Call of duty

He’s 24 and lives in the basement with an iguana. With two degrees he refuses to stock tomatoes in the local Loblaws, since that’s not exactly what $34,000 in student debt was for. Besides, why should he? Mom upstairs cooks his meals, suds his jeans and pays the mortgage. Dad, on the other hand, is a hard ass. Boomer men. When does the damn testo give out?

Mark has a plan. He’s decided to take more courses. And hope he doesn’t get his butt thrown out the door, at least not before borrowing enough from his mom for the downpayment on a condo.

If you witnessed some intergenerational angst over the holidays, join the club. It’s now endemic, as it is in my extended family. Adult Boomer children hanging around like a virus, often endured, if not nurtured by Mom, while Dad looks at a scary economic landscape and wonders how the hell to finance a looming retirement, let alone carry the offspring.

Seems like a phenom. School’s over. Puberty’s but a memory. But no job, no immediate prospects and no appetite to move out and try to live on McWages. After three, four, five or more years of university training, many Boomer kids have expectations of professional lives and fat salaries. Many seem content to suckle, until the big offer materializes.

How many? According to a recent TD Canada Trust survey, a staggering 17% of Boomers are delaying plans to sell their homes and downsize because their basements are populated with the boomerangs. And another 12% say they’ve shelved plans to move entirely, since they expect adult children to be living with them after retirement. Worse, almost 40% of all Boomers confess that when they retire (in short order) they’ll also still have a mortgage.

This is not a happy financial picture. And it’s about to get worse.

Remember, 72% of Canadians have no corporate pension to look forward to, which means they’ll have to survive on their own investments, plus the peanuts the government doles out. And those nuts are about to shrink.

For example, it makes sense for everyone to apply to receive their Canada Pension Plan benefits at age 60, instead of waiting five more years – since you have no idea how long you’ll live. But starting next month the feds are increasing the penalty for taking early CPP, so people doing so at sixty will be losing a fat 36% of their government pension by 2015.

Wrinkly old half-dead people like Boomers also qualify for the Old Age Security payment at 65, which hands over another $527 a month, per person. But with the demographic tidal wave sweeping across the land, that means Ottawa’s bill for this will jump from close to $40 next year to over $100 billion by 2030, as old farts explode in number from 4.7 million to 9.3 million. And you’d think they would have stopped breeding by now…

Obviously with the government wallowing in deficit and debt, this is not happy news. Which is why the coming federal budget (March) is rumoured to hike the qualifying OAS age from 65 to 67. In fact, there’s a growing squad of policy wonks in the Department of Finance who want full CPP benefits also moved back to age 67 (as the US is doing). And, as you know, anyone with a half-decent income in retirement has this government largesse clawed back anyway.

Trouble is, a staggering number of Boomers will absolutely depend on their CPP/OAS to make ends meet in a few years. As I’ve told you before, RRSP contributions have plunged in the last four years; four in ten households have no savings of any kind; and personal debt levels have been exploding at the rate of 7% per year. Mortgage borrowing now reaches past $1.1 trillion, which proves house prices have risen not because people make more money, but because they borrow more. Hence, 40% of Boomers will still be burdened with mortgage payments when they finish working.

With boomerangs and iguanas to support.

It’s impossible to play down the magnitude of this mess. An entire generation, born into unbridled post-war affluence, living through decades when inflation created money and erased debt and enjoying a swelling government safety net, has choked. Millions made the choice of throwing whatever investment dollars they had into a single asset – real estate. It may have worked while the economy chugged, but no longer. So without enough financial assets to actually provide income, even more needed as the feds cut back, what’ll they do?

Simple. Bail. There’s no choice. When the bulk of your net worth’s in just one thing, which is indivisible and immobile, you sell. And if you have to sell into a falling market, so be it.

This is why, regardless of what happens to interest rates, the GDP, taxes or your clingy kids, it’s inevitable the supply of real estate over the next few years will swamp demand. Those who claim Boomers will hang on to their homes until their emaciated and lifeless carcasses are found clinging to a chipping hunk of granite c-top, are mistaken. We are on the cusp of a generational hissy fit. It will not be pretty.

Fair warning, kids. Evacuate the damn basement.

 

131 comments ↓

#1 Jackie on 12.25.11 at 7:15 pm

Thank you, Mr. Turner. I was sad when my 19 years old moved out, and now I am so proud of him.

#2 TheFirstRick on 12.25.11 at 7:21 pm

I thought you were taking the weekend off??

You mean it’s not over yet? — Garth

#3 2lOCK on 12.25.11 at 7:25 pm

Hi Garth,

I know it’s hard to ignore the financial dinkuses and doomers who seem fatally attracted to your blog, but as one of the people who really appreciate what you’re advising, I implore you to continue on. Not all is lost…

;)

#4 Romeo Jordan on 12.25.11 at 7:32 pm

Garth:

You are painting a rosy picture.

Get real. It is going to be much worse than that.

I could actually see a 70% haircut on Vancouver housing prices over the next sixty months.

I bet Junius is shitting the bed on the Olympic Condo’s he bought as part of his retirement plan.

#5 Bill Grable on 12.25.11 at 7:34 pm

I think that Mr. Turner should be our Finance minister. That would mean no time for this live saving blog and having to deal with Harpo, so I guess we luck out and get some free and thoughtful TOUGH LOVE.

My experience was differnt than today’s kids. I turned 18 and I was told it was time to move OUT and learn what life was really like. Granted I did not habve student debt burdens like kids do now. I took courses at UVIC for 254 bucks a term!

BUT – take the slugin the basment and show him the door. They will appreciate what ittook for you to make a life.

Trust me. I worked since I was 14, no complaints, because it taught me the value of stuff. Nothing can replace the love of Family and friends, but knowing how to handle money is so important.

Happy Holidays to you fellow dawgs and Mr. Turner would need the rain gear for the Christmas.

Cheers.

#6 squidly77 on 12.25.11 at 7:52 pm

Oh boy, its about to turn ugly.

#7 TurnerNation on 12.25.11 at 8:10 pm

Those shills pumping condos on the Lang & O’Leary show were something else. Here’s a specific example of the delusion:

In this new downtown Toronto condo, of 27 units listed on MLS in this building the cheapest 1 bedroom is $350,000 (the lower priced ones are bachelors):

http://www.realtor.ca/propertyDetails.aspx?propertyId=11287330&PidKey=-1426589656

On Kijiji the cheapest 1 bedroom for rent in this building (M5V condo) is $1700/mo (the cheaper ones are bachelors). NO parking spot included:

http://tinyurl.com/cwc9wx7

If you bought this cheapest 1 bedroom and paid a generous $50,000 downpayment, and $300,000 financed over crazy long 30 years at low 3% rate, plus $200/mo taxes and $400/mo condo fees carries monthly at $1828.47.

Who would pay $1850/mo for a tiny 1 bedroom condo with no parking included? And this is for cash flow break even.
Heaven help you if rates, taxes, and condo fees rise.

#8 bill on 12.25.11 at 8:12 pm

happy new year Garth…..

#9 TurnerNation on 12.25.11 at 8:12 pm

GTA Christmas dinner real estate anecdote:

Someone moved into new house, but old house still not selling despite 80k price drop, now relying upon bridge financing to carry old house. 2 mortgages, what fun?

#10 Van guy blazin kush on 12.25.11 at 8:18 pm

So where do the kids in the basement go? They will get horny and buy?

Merry Xmas 

#11 TurnerNation on 12.25.11 at 8:28 pm

Let’s see if this morose weblog can stagger into the new year unassailed by rummys, doomers, fema campers, and metalheads.

#12 dibbsy on 12.25.11 at 8:30 pm

It’s much the same here in Brisbane, Australia. They sell out in hours aparently.

http://www.realestate.com.au/property-apartment-qld-bowen+hills-108673726

#13 Appraiser on 12.25.11 at 8:51 pm

Answer: Hello reverse mortgages.

Question: What’s the difference between parents who move in with their kids, and kids who move back in with their parents?

#14 MarcFromOttawa on 12.25.11 at 8:54 pm

Call of duty 4 Modern Warfare 2 is a classic first person shooter game along with Counterstrike (Half-Life engine).

#15 Uh Oh Canada on 12.25.11 at 9:03 pm

I have come to believe that Garth will never stop posting informative articles on this pathetic blog-even on a holiday! Funny you should write about this topic as earlier this week I just watched CBC’s doc zone episode on Generation Boomerang. Scary stuff on Boomers taking out mortgages to support their kids. Who will be the leaders of the future? Not the current parasites who call themselves Gen Ys. It’s the end of the world as we know it, and I feel fine.

#16 Jas Girn on 12.25.11 at 9:07 pm

Merry Christmas Garth. Great piece as usual.

#17 jess on 12.25.11 at 9:09 pm

Signalife, now known as Heart Tronics, was a publicly traded company that purportedly sold electronic heart monitoring devices.

..well no

Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers and then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. The indictment also alleges that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.

The indictment further alleges that Stein and his co-conspirators sold shares of Signalife stock at inflated prices, disguising the fact that they were doing so by placing the shares in purportedly blind trusts. In addition to selling shares in that manner, Stein and his co-conspirators allegedly also caused Signalife to issue additional shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein and his co-conspirators.”

http://www.sec.gov/litigation/litreleases/2011/lr22204.htm
http://www.justice.gov/opa/pr/2011/December/11-crm-1681.html

Ex-NFL Pro Named in Pump & Dump – Courthouse News
Stein, hired promoters for an $8 million pump-and-dump stock scheme. … Raton, Fla., stock promoter Ryan A. Rauch of San Clemente, Calif.,

#18 Mr Buyer on 12.25.11 at 9:30 pm

bridge financing … new term for me. Another instrument to help keep prices up. I figured there would be devices such as these to contend with in the quest for sanity. How on earth a person can believe for profit entities are looking out for our best interests is simply beyond me. When our collective power has been sufficiently undermined by debt and for profit entities arise with a purported solution for our health care needs please keep in mind the myriad of ways these types of entities deny health care to the people they serve. This aggressive denial of treatment is done with the justification that the interests of the investors must be served first and foremost. Just to further underline my growing understanding of financial type matters I would guess that investors would see for profit health care entities as a potentially good investment when properly MANAGED. I do not see easy money coming my way so social medicine seems more and more a necessity as I continue my one way march towards the grave, but I am conscious of the huge majority of people that cannot see anything past their next pay and the remaining minority looking at ways to profit off that myopia. Dived and conquer. As I sit waiting for people to be decimated by their activities in an environment not of their making so I can simply have a place to live somewhat free and clear, I am really no different than those that would profit off the failing health of their neighbors (no matter how hard people try to stress individuals such as speckers created this bubble, these speckers did not enact the policies that made this bubble not only possible but in fact a foregone conclusion). So is that what we are to be, individual GLADIATORS dispatching or being dispatched by other individuals? This crap would not have flown with those returning from WWII because they clearly understood what a group of like minded individuals could accomplish, what exactly was required (many times your life or that of your friends), and how incredibly beneficial and advantageous, on an individual level, looking out for one another was. TRAINING MANY, MANY MORE DOCTORS is a great place to start a march forward (it will greatly attenuate the influence of the business types upon our most necessary profession). The rational that too many doctors will lead to too many services provided to too few people is quite telling. The giving and receiving of health care as a large proportion of the economy is much better than an economy in which a large proportion is based upon the giving and receiving of debt. Maybe it is time to think outside the box seeing how it is becoming smaller and smaller and full of real and imagined debt.

#19 Mr Buyer on 12.25.11 at 9:36 pm

No matter how many times I read something over before posting it is always the same…Divide not Dived (poop)

#20 jess on 12.25.11 at 9:40 pm

keystone…
http://thinkprogress.org/green/2011/12/20/393247/fact-check-keystone-xl-would-ship-foreign-oil-to-foreign-lands/

#21 I'm stupid on 12.25.11 at 9:48 pm

Honestly Garth, do you blame the kids? Why would anyone exchange a five star resort, with maid and personal chef, for the roach motel? In a previous post you wrote about today’s youth not willing to take risks. This is the reason why. The ones who risk are usually the ones that have nothing to lose. I would be the same way if I didn’t have the misfortune of losing my father at a young age and a mother who was a house wife until he died. I knew one thing and that was that nobody would give me anything. I worked and paid for my own education, never once taking a student loan. I went into business for myself at 27 and never looked back. I’m no better than anyone else the only difference is that I had no safety net. I have friends who immigrated here 7 years ago and slept on benches for the first 3 months. No job was refused because they knew the bench was waiting. Fast forward 7 years these two brothers are doing 600-700k a year. The point is all you need to do is eat shit for one day to give you the fire up your ass you need to make it on your own.

#22 Stinky the Fist on 12.25.11 at 9:49 pm

Garth is a man on a mission. Thanks for the post.

Hint for everyone looking at house prices… Examine consumer confidence. It’s your cheat sheet. It has fallen to 2008 levels. Something will happen in 2012

#23 Katz on 12.25.11 at 10:16 pm

We pump so much money into the education system and here is what we get out of it.

#24 Stinky the Fish on 12.25.11 at 10:53 pm

**FISH not FIST

Hint for 24-year old iguana boy. I don’t know what your 2 degrees are, but you should study (should’ve studied) sciences – be it computer science, engineering, physics, org chemistry, nanotech… Best choice of my life; easy to get a higher paying job. We’re talking avg. 32,000$ versus avg 61,000$ starting salary difference between arts and sciences.

2nd) Don’t pile on the debt for a degree. Work your ass off while you study. Get a degree for a reason, target your job, make sure there is lots of demand for your specialty. If there’s no job demand, than don’t get a degree in that subject.

I think I wrote Fist in my other comment. Dammit, there it is, Fist. Paul Newman’s gonna have ma’ legs broke!

#25 T.O. Bubble Boy on 12.25.11 at 10:55 pm

I thought that the official Boomer retirement plan was to sell the dumpy house to Hot Asian Money for millions of dollars?

#26 Tony on 12.25.11 at 11:05 pm

Most with a brain in their head will relocate upon retiring. The move back in the fall of ’87 was to sell in the greater Toronto area and buy up all of Elliot Lake something i’ve very proud of in retrospect. Places like Vancouver as someone said should drop 70 percent and the Toronto area around 50. You put your faith in time and the inevitable will happen. The Ontario pension plan will lose their shirt in the next 5 years and things will quickly change again. The retirement date will be cut to age 50 because of lack of funds and the sense the pension fund will be illiquid.

You live in Elliot Lake? That explains a lot. — Garth

#27 45north on 12.25.11 at 11:06 pm

TurnerNation: Someone moved into new house, but old house still not selling despite 80k price drop, now relying upon bridge financing to carry old house. 2 mortgages,

In 1983, that someone was me, not fun.

#28 Steady Eddie on 12.25.11 at 11:17 pm

Merry Christmas everyone.

Good luck with 2012.

http://www.youtube.com/watch?v=dDTBnsqxZ3k&feature=related

#29 45north on 12.25.11 at 11:24 pm

Mr. Buyer: in subject and in tone your post is completely different than previous posts. Is this the same Mr. Buyer? Test question: where do you live?

#30 Pat on 12.25.11 at 11:38 pm

” 72% of Canadians have no corporate pension to look forward to”

Is this 72% of individuals or families? If the former, then close to half the families could rely on a pension.

Then you say 40% of families have savings. What fraction of them are the families without pension?

Anyway, imho, retirement income will not become a crisis in the foreseeable future. There’s a fairly easy solution – work a few years longer… or die a few years earlier. Not a big deal either way.

#31 Mike Rotch on 12.25.11 at 11:38 pm

To the boomer parents of boomerangs – sit down with them, and make them prepare a plan to get out within a set time period.

I did a temporary boomerang, and it gave me a couple years to dig my way out of a crushing debtload, save a solid downpayment, and get moving on the rest of my life.

Sometimes wish I had kept and invested the downpayment and moved out to a rental, but at least I had the wits not to borrow myself into ruin so I would have room to save towards eventual independence…..Mortgage at 20% of gross, will be paid off over 21 years (or less).

Could have even settled for far less house and been content…..Many of my age group are frigging bonkers for what they’ve “bought” themselves into!

#32 TurnerNation on 12.25.11 at 11:44 pm

In Soviet Russia, bridge finances you!

#33 Timing is Everything on 12.25.11 at 11:57 pm

Mele Kalikimaka Garth and fam…

http://tinyurl.com/ycm3v5o

Thx for the blog you old dog.

#34 Angela on 12.26.11 at 12:01 am

I thought you were taking the weekend off. You actually wrote a blog on Christmas day? This blog just fell way way down on the ratings.

#35 Angela on 12.26.11 at 12:02 am

Although I’m reading it on Christmas, so I just fell on the ratings, too.

#36 Timbo on 12.26.11 at 12:15 am

http://theautomaticearth.blogspot.com/2011/12/december-25-2011-most-tragic-species.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FlRTBR+%28The+Automatic+Earth%29

The latest Asda Income Tracker has revealed that family spending power fell by £15 a week in November 2011, leaving the average UK family with £161 of weekly disposable income – 8.4 per cent down from this time last year.

the only thing holding the circus tent up is the printing presses of the world.

#37 Mike on 12.26.11 at 12:17 am

Your title and photo are so appropriate.

Check this out. Particularly #6. http://blog.penelopetrunk.com/2009/02/03/dont-try-to-dodge-the-recession-with-grad-school/

#38 Theone on 12.26.11 at 12:22 am

Garth,

You’re applying North American principles to an ever changing global society. In many Asian cultures (east and south), joint family systems are encouraged.

The idea is when you’re younger you live with your parents, when you’re older, your parents live with you.

Italian and Greek communities have similar values. When a child stays in, they could be the ones taking over the mortgage of the home supporting the parents.

#39 Lawn (South) Asian on 12.26.11 at 12:37 am

Merry Christmas Garth.

#40 Freedom first on 12.26.11 at 2:33 am

Garth: …….been reading your blog for quite a while…..enjoy reading messages from someone living in sanity…….thank you:) …..looking forward to more of your messages in 2012.

#41 West Coast on 12.26.11 at 2:49 am

We are seriously discussing “The Compound” option. We all – “the children” – who have long since left the nest, have what used to be middle class jobs – trades, education – but we are all well aware that purchasing a home now is a terrible idea and in the future still overpriced at a 50% drop…

So we are making as though we are international Canadians and we are moving back in together. 5 bedrooms, 5 en-suites, 2 kitchens 4 families 2+ acres.

#42 new-era on 12.26.11 at 2:52 am

Give it a break Garth

Enjoy the holidays and get back to it in the new years.

Happy holidays everyone!

#43 Jane on 12.26.11 at 3:05 am

Merry Christmas and happy new year Garth and fellow readers!

#44 truth hammer on 12.26.11 at 3:09 am

Theres no doubt that ‘tough love’ must be applied. Again we are mired in an argument that focuses blame on the wrong party. It is entirely the cost of swelling government with theri ever escalating wages perks and benefits that forces rising taxation and creates less money for a working person to live on. Its a virtuous circle for the civil service and a death spiral for workers.

Don’t blame the seniors for ‘not saving enough’….they’ve been raped for the savings thay manged to put away after the outrageous taxation they had to contend with.

Don’t blame the students for going to school….they weren’t told that government jobs would be ‘saved’ for the huge numbers of immigrants a failing economy has promised to keep absorbing without regard for the local economy.If you’re not a recent immigrant from a mainstream group the government favours you are bluntly told not to apply for positions in your community….public knowledge…save your politically correct breath.

This is well known….and has been commented on by Ministers whose ploicy it is. So…if the jobs were touted as viable careers by the post secondary institutions and now the government is saying that these jobs are not for local grads……..how can you blame them ( the local grads) for ‘failing’? Calling them names and demonizing them for paying tens of thousands for an education is undignified Gartho.

Why is there no money left for hungry seniors and kids after the unionistas rake out ‘their share’? Is the solution ‘higher taxes’? Its a fact that wages and benefits take 100% out of education and health ministries……whats the argument? Its public knowledge. 100% is greedy by any definition.

Asking for donations and organizing funding drives to ask for more is just allowing the real culprits to get away with the theft of 100% of the money that was raised for specific aspects of our societies needs.

I’m not touting socialism…..I am saying that the tax dollars that Canadians are paying are being misappropriated by special interests and not getting back to the people who they were supposed to. Fairness is not socialism……..living high off the backs of the poor is the worst kind of economic fascism. Any civil servant on a sunny holiday should be ashamed of themselves for their greed.

Instead we have fat civil servants raking in millions….while kids go hungry…seniors freeze….and working people see their future aspirations eroded by cyncal thugs who by now are basking in the sun on fully paid vacations courtesy of the starving children of Canada.

#45 Trailer Park Boys on 12.26.11 at 3:09 am

We were wondering when Garth will start posting funny pictures and using the dry wit coupon we sent him.

You don’t use it ……ewe lose it.

#46 Soylent Green is People on 12.26.11 at 3:22 am

How do you get thecx.mas tree pic inserted… So cute

#47 Michelle on 12.26.11 at 4:33 am

Ugg!
My father retired at 52. My older sister just retired at age 54 (with a husband to supplement expenses). Looks like I’m going to be a late bloomer if they get rid of early CPP! I’m on the wrong end of the boomer curve :)

#48 P & T S on 12.26.11 at 4:49 am

The “Boomer Generation Retirement Plan Fiasco” is not only a Canadian problem. Just look at Japan – they have a major retiree numbers imbalance right now, and the rest of the “Civilised” world will be in just the same pickle over the coming very few years.

What are the “Good and the Great” to do? The attractive option is to delay retirement entitlement qualification age: This will mean a proportion (maybe a large proportion) of those who could, and would, have retired remain in a job. So, those no longer vacated positions are not available to new workforce entrants – just at the time when employment prospects (so earning prospects) are particularly jittery.

Will it be cheaper to pay unemployment benefit, or to pay a Pension? And what about the adage “The Devil finds work for Idle Hands”? Unemployment IS associated with criminality, and the costs of policing this should also be included in any calculation.

I note that one poster to an article commenting on raising the Retirement Age in France run in La Figaro in November this year, suggested that instead of a retirement pension, “the Elderlies should be given a Cyanide Pill” (picked up in the Sunday Times, and the Observer).

So much for “concern for the less able members of Society”. Once things start to get really tough, the veneer of civilisation is going to be stretched pretty thin all round.

#49 betamax on 12.26.11 at 6:57 am

#25 Stinky the Fish: “you should study (should’ve studied) sciences”

Maybe. I know people with science degrees who can only get low-paying jobs in labs, doing work “they could train a monkey to do”.

Applied sciences like ComSci and Eng can lead to higher starting wages, but getting to six figures depends on the individual. There’s a lot of science grads who are going to start at less than the 60k average and stay there, because they were pushed into choosing something ‘practical’ that they essentially suck at. Working your ass off and being smart makes more of a difference than the type of degree.

“Don’t pile on the debt for a degree. Work your ass off while you study.”

I worked part-time in the beginning and found that my GPA was less than optimal, so I quit working and instead racked up student loans while keeping my GPA high enough to ensure I could get into whichever grad school I wanted.

I know a couple of people who worked part time throughout their undergrad degree and lived very comfortably, but then their GPA wasn’t high enough to get into grad/law school and their life-long dreams were stillborn because they chose to make a few bucks along the way. The choice still haunts them.

Student loan debt was the best debt I’ll ever have — I borrowed tens of thousands and will make a few million in return over my working life. No other investment will touch it.

“Get a degree for a reason.”

Good advice. Unfortunately, too many young people get caught up in school for its own sake and don’t think about what they’re going to do afterward.

#50 Devore on 12.26.11 at 6:57 am

Hence, 40% of Boomers will still be burdened with mortgage payments when they finish working.

And how many will also still have lines of credit?

For the people planning to retire with a mortgage: no, really, what are you thinking?

#51 Devore on 12.26.11 at 7:09 am

#7⁠ TurnerNation

The only studios without parking anyone is renting for $1700 are in Manhattan.

#52 SB aka Mr. B. on 12.26.11 at 8:21 am

Didn’t expect a blog entry so soon. Have to admit, glad I checked. Another informative read as usual.
Merry Christmas!

#53 NoName on 12.26.11 at 8:24 am

http://www.youtube.com/watch?v=npJ0CUT8d_Y&feature=g-all-lik&context=G2cfdd6dFAAAAAAAANAA

it will take an hour of your life… interesting…

#54 Herb on 12.26.11 at 8:38 am

You just had to reach for that crackberry after one day, didn’t you Turner! Now I’ll again have to check six times a day to see what idiocy Westernman has posted.

The upside is that I won’t have to wait for Beach Girl’s account of joy-of-Christmas debauchery. This blog is good.

#55 House on 12.26.11 at 8:38 am

By 2030 OAS will cost $200 Billion. Guess this is just another case of the poor hating the rich. At the rate we are going by 2030 $200 Billion will be the total of taxes paid by the 5 Bank CEO’s on their more and more groresque salaries. Wasn’t it just three years ago that the Conservatives quietly announced that they would spent $490 Billion on the Military. We can spend any amount if it is for the right cause.

#56 Bottoms_Up on 12.26.11 at 8:50 am

I can’t believe they’re changing the rules around these benefits, especially given that there are many boomers out there who have paid into the system their entire lives.

My father in law died at the age of 66 a couple of years ago. After a lifetime of paying into his work pension fund and CPP, you know what his estate got? Squat.

His estate got the $2500 CPP death benefit.

$0 for any extra CPP (he hadn’t applied for it yet but had the paperwork in his apartment, and the government recently changed the rules around the 1 year payout).

$0 from his work pension plan.

Around $6000 as a one-time, one-year OAS payout.

So after a lifetime of working for The Man, and paying into all these great social programs, all he got was $8500 (which was also taxed to a significant extent).

Great government policy no? Score 1 for the work pension fund, score 1 for CPP, score 0 for him and the next-of-kin.

#57 Bottoms_Up on 12.26.11 at 9:37 am

#50 betamax on 12.26.11 at 6:57 am
————————————————
Pursuing an education with a specific job in mind is somewhat good advice, although it takes the fun out of pursuing higher education for the sake of pursuing higher education.

And not all peripheral degrees are useless. In fact, I would argue that no degree is useless, it’s all about the person, their smarts, attitude, willingness to learn, ambition etc.

I know someone who got a university degree in piano performance and in fact this degree was used to get into a great Master’s programme and subsequently a great job (a job which has no relation whatsoever to piano or music).

So one’s degree can really be in anything they want it to be, and it shouldn’t hinder their future pursuits, unless of course they fail to achieve the necessary prerequisites for moving up/on.

#58 Stupesing in Cabbagetown on 12.26.11 at 9:48 am

#56 NoName – here’s another point of view: http://www.vanityfair.com/politics/2012/01/stiglitz-depression-201201

#59 R2D2 on 12.26.11 at 10:12 am

“World growth will slow in 2012—the only question is by how much.

The problematic combination of private-sector deleveraging, public-sector austerity and the lack of confidence in political leaders’ ability to navigate these choppy waters will continue to plague the United States and Europe. The US economy can be expected to muddle through. Unfortunately, Europe will not be so lucky. Meanwhile, China’s economy is slowing and there is growing anxiety about the government’s ability to engineer another soft landing. If Europe only suffers through a mild recession and China does not experience a hard landing, then world growth will decelerate from around 3.0% in 2011 to around 2.7% in 2012. On the other hand, if the recession in Europe is much deeper or the slowdown in China more pronounced, then the global economy will be headed for much weaker growth and possibly another recession.”

http://www.ihs.com/info/ecc/a/economic-predictions-2012.aspx?ocid=top10-2012-pdsrch:globalinsight:ppc:0001&s_kwcid=TC|1026151|2012%20economic%20forecast||S|b|17398413698

Kevin, member of Kids in the Hall, will eat your bible … for a price!

#60 R2D2 on 12.26.11 at 10:27 am

Harper is finally going to listen to Canadians.

http://www.youtube.com/user/thishourhas22minutes#p/search/9/WOsbAH2Gvwg

Stephen Harper warns of tough times ahead in 2012

http://www.thestar.com/news/canada/article/1106905–stephen-harper-warns-of-tough-times-ahead-in-2012?bn=1

Provinces are now ‘on their own’ in all matters.

#61 Incubus on 12.26.11 at 10:27 am

In french they are called “Tanguy”.

You did not specify the nature of the degrees?

I guess they are as usefull as a third tescilule.

I thought that was standard for French guys. — Garth

#62 Canadian Watchdog on 12.26.11 at 11:07 am

I’ve now labeled Canada’s household debt an anomaly.

“Canadian households continued to amass more debt in the third quarter of 2011, now totalling more than $1.6 trillion or 151 per cent of personal disposable income – both record-high levels,”

http://www.marketwire.com/press-release/bmo-keep-a-close-eye-on-debt-levels-during-holiday-shopping-season-tsx-bmo-1598576.htm

Charts:

Regional Credit Card Distribution http://i40.tinypic.com/acyhxg.png

Personal Lines of Credit http://i44.tinypic.com/23qh6s.png

This will end very badly at some point.

#63 Kip on 12.26.11 at 11:16 am

My father called me into the livingroom and told me to get out. I said “what?” and he said “if I tell you one more time you will go right out the front window”. It was 1974 and it was the best thing he ever did for me, I needed it.

Tell iguana boy to get off his structurally unemployed ass and get to GTA, check out the building trades where jobs go wanting that pay 60k per year to start. Take the diplomas and wipe his ass with them.

Give some good advice for a change!

#64 Steven Rowlandson on 12.26.11 at 11:56 am

If youngsters are forced out of the basement and into the real estate market I would say they better be ready to bid down the price by demanding a 90% discount or evacuate the country they grew up in . I don’t see how young people owe home owners and realtors any subsidy, favor or tax free profit especially when you consider the insignificant pay rates offered by employers for skilled and unskilled labor.
Real estate fanatics and speculators, I say let em burn!

#65 miketheengineer on 12.26.11 at 11:58 am

Loblaws:

Only place I know where part timer’s can get benefits after they work xxx hours.

If you don’t mind working for minimum wage, good place to make some cash.

You gotta do what you gotta do in this environment.

What ever it takes. Dirty 30’s all over again, except we have welfare, or it would be much much worse, for “Joe 6 Pack”.

Don’t knock it till you do it, weather you want to or not.

I have an engineering degree, and I am doing it.

#66 TurnerNation on 12.26.11 at 12:04 pm

Blog dogs: share your Christmas stories, of overbearing relatives who insisted you begin “building equity” by taking on a $500,000 30-year mortgage, plus 5% in CMHC/land transfer taxes/closing costs, plus $600+/mo in property taxes and utilities costs.

Perhaps beach girl can open a home for wayward bommerangers, with smoking man dropping by to re-educate them.

Can’t wait for their twitter updates this year: drank tons of bozze, kicked the dog, yelled at the neighbours. All is well in the world.

Oops that was more than 140 characters worth.

#67 TurnerNation on 12.26.11 at 12:14 pm

#23Onthesidelines on 12.25.11 at 9:59 pm

It was clear to see that O’Leary was over his head when it cames to real estate. A brilliant businessman and investor by right for sure, but he struck me as being a “brainwashed” boomer who got lucky by buying in, many years ago.

You could almost see him quietly mouthing/meditating tired boomer mantras to himself during the interview: “real estate always goes up, it is a secure asset in rough times, too big to fail, they’re not building any more land, people always need a place to live” .

He should have ripped those guys a new one, but he did not do so; instead he was like a deer in the headlights.

10 years ago young guys like those would have told him that .com stocks are the future, unbeatable, and here’s our new book to prove it.

#68 Willa on 12.26.11 at 12:14 pm

Human beings have always lived in intergenerational families, except for a brief 100-year period that’s now over. The extended family home is back. Get used to it.

This isn’t “failure to launch” but “failure to accept the realities of the post-industrial economy” (on both generations’ parts). Clinging to the old ways (because people still think those ways are “normal”) is just friction.

Households that accept the extended family reality and the harshness of the new economy are the ones who’ll survive.

Poppycock. Young men and women need to experience independence, freedom and choices. This is not the middle ages. Stop being clingy. — Garth

#69 Daniel on 12.26.11 at 12:36 pm

I’m a Canadian living in Malaysia currently, our nanny has two boys living at home, 37 and 30.
It’s normal here for multi-gen families, but I don’t think it’s good for them. Both do very little at home, watch TV, after work with very little drive. When mommy gets them wives they’ll probably expect the same treatment.
Parents let me stay until after University, but glad I took the plunge and I’m sure they are too.

As for houses in Penang, Malaysia where I am, very similar to Vancouver, Toronto. Houses selling for approx 700 – 900RM (200 – 300CAD) per sq ft. at abot 9 times earnings. Prices in our building have gone from 300kRM (100k CAD) – 650kRM since we bought in 2008 … but, they could go back just as easy … don’t count on your home equity, it can/will go down very similar to how it went up unless other factors (increasing pop, increasing incomes/rental rates, etc.) increase demand, decrease supply.

#70 Edmontonian on 12.26.11 at 1:11 pm

Wow! You site really makes me think of the mess the credit bubble we are in orchestrated by the Coservative Government of Canada… 1st the 40 year mortgages, then the too low interest that the Bank of Canada Mark C.has broken his own sworn promise to keep inflation between 2-3%!
I see the mess around me here in Alberta where I personal feel we have yet another Conservative regim that has pushed to “living in poverty” rate to over 20% around the Cities Capital. SO many Jails here, Prisoners get released and no social services to help them out so they are forced to live in Homeless Shelters and go back to crime. Billions spent on “police” forces to help but money still taken away from Social Services which is the root of the problem. Not sure our new puppet Allison Redford will be able to do mcuh…
But this site is about The Canadian Economy & Housing Market, right? In ALBERTA we have about 5000 houses in Foreclosure right now, and in Edmonton we sit at the Fall of 2006 prices for Real Estate in the city! Imagine all the people underwater as there was close to 10 billion dollars worth of real estate action (total commercial & Residential) in the Edmonton Area in 2007! ALl is down 20% now What a terrible investment it was in the Edmonton area. But wait! We haven’t had interest rates rise yet… and now we have been declared the murder capital of Canada.. the coldest dirtiest Major City inn Canada! WHo would be crazy enough to do property speculation here?

#71 April on 12.26.11 at 1:33 pm

Re Lang O’ Leary show, I read somewhere some time ago that Kevin plays tennis with his real estate buddy so that might explain why he didn’t oppose the guest speakers. I did not see the show am just responding to some bloggers here who mentioned his having a segment of RE.

#72 Mike Rotch on 12.26.11 at 1:41 pm

@ 68 miketheengineer:

For an engineer, it probably doesn’t have to be Loblaws at $11 to $15 per hour.

Even in poor, hopeless Ontario, ICI Construction is still booming in several sectors, particularly condos and municipal civil works categories. Job turnover happens enough that there are always opportunities

(Most of the turnover is because another company needs a body with half a brain to deliver a project, so throws a little more money and responsibility at someone who’s doing an OK job for a competitor).

Anyway, irrespective of your discipline and years of experience, you can probably find work as a “coordinator” for either a consultant, contractor, or if you’re super lucky a public sector proponent!

That’s going to be $22 to $25 an hour to start. There’s benefits for full timers or higher hourly for “timesheet contractors”.

If you’re any good, count on 5 to 10% average increases annually as your responsibility increases (may have to change employers once or twice to keep the average). Anyway, salary probably doubles in 10 years or less. If you’re better than “any good”, after 10 years, count on being a full-fledged project manager on decently sized project. $100K easily.

That’s what’s there for a young engineer, but you may have to take a shit job and pay your dues for a couple of years first.

Note also that the $hourly rates I gave are based on 40 hours per week. 44 is minimum, 55 is not unexpected, 60 would be extreme….it does gets better as the years go by and sometimes you even get a bonus that makes it almost worth the time.

Good luck. If you want to tell me more about your degree and experience and maybe let me give you a hint or two, leave a me way I can get in touch with you right here.

#73 Arse on 12.26.11 at 1:44 pm

I think the interest rates will be held low for a couple of more years, and the housing bubble could be extended for a few more years. I thought the bubble would have burst 2 or 3 years ago. 2012 is going to be a very difficult year for the world economy, but I have given up predicting when the housing bubble could burst in Canada.

If the bubble lasts longer and then burst, I think the housing correction could be 50% in real prices taking inflation into cosideration.

In the longer term, after 10 years, this capitalist fruad based on money creation out of thin air will start to collapse world wide. World has reached peak oil, and Middle East crude oil production will start the ride down the downslope of the crude oil production curve.

#74 Tana on 12.26.11 at 2:17 pm

Yet another drinking the “university=prosperity Kool Aid.” OH sure there was a time when universities actually taught important stuff, ethics, arts humanities but they aren’t even doing that properly anymore. Get a trade kid: machinist, millwright, pipefitter, oh the list goes on. Hell two journeyman tickets trump a doctoral degree any day.

#75 Paul on 12.26.11 at 2:17 pm

I ‘ll post it again as everyone should watch it. Unbelievable. Starts at the 35.35 min mark.

http://www.cbc.ca/video/#/News/TV_Shows/Lang_&_O'Leary_Exchange/1308689786/ID=2180026313

#76 City Slicker on 12.26.11 at 2:25 pm

21I’m stupid on 12.25.11 at 9:48 pm
Honestly Garth, do you blame the kids? Why would anyone exchange a five star resort, with maid and personal chef, for the roach motel? In a previous post you wrote about today’s youth not willing to take risks. This is the reason why. The ones who risk are usually the ones that have nothing to lose. I would be the same way if I didn’t have the misfortune of losing my father at a young age and a mother who was a house wife until he died. I knew one thing and that was that nobody would give me anything. I worked and paid for my own education, never once taking a student loan. I went into business for myself at 27 and never looked back. I’m no better than anyone else the only difference is that I had no safety net. I have friends who immigrated here 7 years ago and slept on benches for the first 3 months. No job was refused because they knew the bench was waiting. Fast forward 7 years these two brothers are doing 600-700k a year. The point is all you need to do is eat shit for one day to give you the fire up your ass you need to make it on your own.
—————————————————————–
This brings up an interesting point. When one is put into do or die position they perform that much better. That’s why in a sense it’s wrong to harbour those that should already be out in the real world.
Marriage is the same way today, people take the easy way by just living together, this way if something goes wrong it’s easier to walk, rather than being legal bound and having to work through things.

#77 Westernman on 12.26.11 at 2:32 pm

Garth,
Great post, after the last couple of lackluster specimens it’s good to get back to the meat and potatoes.
There’s so much here to work with…where oh where to start. I know, let’s start with the crack about boomer men, when does the testo give out? In my case, never :)
But really, imagine the gall of some father thinking his son should get a productive job and become a contributer instead of a tatooed, attititude oozing, know-nothing video game playing bum… how dare he!
Furthermore, I have a 100 dollar bill in my ass pocket that says this Mark A-holes degrees are in something like liberal studies, multi-culturalism or some very new-age socialist pablum like that. Absolutely useless to the world which is now emerging.
THAT new world needs people who can add value – not spout off about how we should all mongrel up together and be one big happy family.
In addition, that big offer this Mark creature is waiting for? It’s not coming, that fantasy about some fresh out from under mom’s skirt twenty-something making huge money is OVER and over big time… he better take that Canadian Tire job while he can still get it.
How’s that Herb? Accurate,insightful and straight from the hip… you may now respond with your usual liberal nonsense…

#78 City Slicker on 12.26.11 at 2:43 pm

Garth do you think the Mayan calander will be right about 2012? What are your thoughts on this?

#79 Signpost in the bushes on 12.26.11 at 2:54 pm

“For example, it makes sense for everyone to apply to receive their Canada Pension Plan benefits at age 60, instead of waiting five more years – since you have no idea how long you’ll live. But starting next month the feds are increasing the penalty for taking early CPP, so people doing so at sixty will be losing a fat 36% of their government pension by 2015.”—Garth

To add to this sobering thought; as of January 2012, anyone aged 60 to 65 drawing CPP will have to make CPP contributions on earned income as will their employers! Thus, in future, it may not make “sense for everyone to apply to receive their Canada Pension Plan benefits at age 60, instead of waiting five more years.”

In the words of a wise accountant: “Those who apply for CPP early, are invariably disappointed, while those who wait until they are 65 are, usually, pleasantly surprised.”

#80 not asian on 12.26.11 at 3:07 pm

#74 April
Kevin did keep mentioning on that segment that real estate prices have been on a rise for the last 11 years and that is longer than any run in history. He was demurely suggesting that this cannot go on forever. Yet, that isn’t his usual style and he wasn’t very forthcoming.

#81 Ret on 12.26.11 at 3:11 pm

Deductions at 65 for taking CPP early. The % year phase in per month of escalating deductions to move a 5 yr. deduction from 30% to 36%

% deduction per month starting in Jan. 2012. If CPP taken in
2012, .52
2013 .54
2014 .56
2015 .58
2016 .60

2012 would be a 60 month x.52%= 31.2 % reduction of CPP at 65 if you started to collect in the month of your 60th birthday in 2012.

Interestingly, CPP does not care about your risk factors nor does OAS. If they followed guidelines that insurance companies follow, females would receive lower benefits or pay higher rates because on average they live longer and would have, in all likelihood, collected more than their fair share upon their death.

Or alternatively, it would only be fair for universal OAS payments to be delayed for females by 3-4 years if we were the egalitarian society that we purport to be, as females on average live that much longer and would on average get to collect more than males would.

And if you don’t make it to 60 or 65, your CPP contributions will go to others more fortunate who have lived long enough to collect. They will need it more than your estate will and you really wouldn’t want to see them go without some of your CPP contributions in their old age, would you? It is all so Canadian!

#82 TurnerNation on 12.26.11 at 3:13 pm

#73Edmontonian on 12.26.11 at 1:11 pm

Alberta will be the horse to watch in this year’s race. This bastion of ballsy ‘get er done’ attitude is now headed by a female human rights lawyer, with a much-ballyhooed Muslim mayor in Calgary, and an apparently Jewish (surname Mandel) mayor of Edmonton.

http://www.jewishindependent.ca/archives/Nov04/archives04Nov05-05.html

Times they are a changing.

#83 The Dividend Yield Investor on 12.26.11 at 3:15 pm

http://www.hussmanfunds.com/wmc/wmc111219.htm

The above link is from Professor Hussman who writes once per week at his web site. His writings are a true testament to some real academic horsepower, that is tempered with real life since he manages three mutual funds.

The U.S. tax revenues are dropping like a rock thrown into a swimming pool. With Canadian real estate in the ready for a big drop, this will provide the extra push to the downside.

Incubus and Ronaldo thanks for the info on Price to Rents in the Great County of Canada. Actually, I do realize that Canadian real estate is going to be smashed in the major cities, I was just trying to be nice since I’m an American.

Got to go, the wife wants to go to the “Mall of Georgia” to see what specials we can pick up. Resistance is futile.

Best of Luck, hope every had a great holiday.

The Dividend Yield Investor.
Atlanta Georgia

#84 not 1st on 12.26.11 at 3:16 pm

Garth, you are totally missing the trend right in your face. RE prices may come down, but it is going to become a generational asset where 3 generations could be living in the same home and it is willed down. Foreigners are already do it and the high cost of living and lack of decent paying jobs will bring it to us white folk too. This is the last generation to retire with secure pensions and 30 years of life to enjoy it. It will be unknown to the next generations.

Maybe ask yourself what our prized financial system was creating in the past 30 years? Offshored jobs, inflation sucking our standard of living, consumer led economy instead of production led, low interest rates to discourage savings, etc etc.

And you are on record for wanting this to continue forever. Those lovely corporate profits you keep bragging about have come at a great expense to our society. Everyone can sit back and be a passive investor.

Or they can be like you. — Garth

#85 TurnerNation on 12.26.11 at 3:17 pm

#74April on 12.26.11 at 1:33 pm

O’Leary is a regular (squash) at the Toronto Lawn Tennis Club‎.

#86 S on 12.26.11 at 3:24 pm

Eventually another “unbridled post-war affluence” will come along…

#87 InvestorsFriend (Shawn Allen) on 12.26.11 at 3:28 pm

HOW PENSIONS WORK

Number 59 Bottoms up complained:

My father in law died at the age of 66 a couple of years ago. After a lifetime of paying into his work pension fund and CPP, you know what his estate got? Squat.

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

That is exactly how pensions work and what makes them affordable. In traditional defined benefit work pension plans and also CPP and Old Age pension, we all pay into it during our working lives.

The plan tries to charge enough money to fund us only to the average age of death. Those who live much longer can keep collecting ONLY because those who die young stop getting payments (or the surviving spouse gets a lower amount).

This is THE KEY advantage of traditional pensions. We don’t have to pay in enough to last until age 95 because the age of death is pooled.

Any new pension plan solution MUST keep this feature of cutting off benefits on death in order to be affordable.

Pensions are not an inheritance plan.

It’s rather sad to expect an inheritance of any kind. You should welcome it if received, but never ever count on an inheritance. It’s NOT YOUR money.

If you want to build an estate use non-pension assets to do so.

#88 Westernman on 12.26.11 at 3:31 pm

Turner nation,
A female human rights lawyer in charge? I think it can be summed up in one simple phrase… ” Forgive them, they know not what they do…”

#89 InvestorsFriend (Shawn Allen) on 12.26.11 at 3:37 pm

GO WORK FOR YOUR SHARE (AND MORE)

Christmas is cute. On that one day we share and give. Very nice.

We now interrupt that brief interlude and get back to real life.

For the other 364 days of the year you have to get out there and earn your keep.

There will always be those who struggle financially and those who are comfortable and those who are very comfortable and those who are stinkin’ rich.

For a young person, their own choices will largely determine which category they will be in as they move into their 30’s, 40’s, 50’s, 60’s and dotage.

For those in their 40’s and 50’s, your choices too will determine whether you enter retirement with debt and boomerangs. We all largely make our own beds in this life.

The world these days may hand you a basic living but it will not and never has handed too many people a very comfortable life. Most boomers will tell you, the harder they worked the luckier they got. It has ever been so.

#90 Herb on 12.26.11 at 4:04 pm

#80 Westernman,

“Accurate,insightful and straight from the hip…”

There you go confusing your lip and your hip again. You wouldn’t do that if you had an arts degree.

#91 Signpost in the bushes on 12.26.11 at 4:07 pm

It’s interesting that most people assumed the rule for increasing the annual TFSA contribution room, would be the year over year cumulative effects of the CPI. Apparently, we shall have to wait for the CPI to increase more than 5.1% in a single year, before the contribution room is increased from $5000.00 to $5500.00(?).

http://www.cra-arc.gc.ca/tx/rgstrd/tfsa-celi/bt-eng.html

#92 Paul on 12.26.11 at 4:07 pm

O’leary should have told those guys that it should be illegal for them to right such a book and fudge the info in it. They should be thrown in jail just all unions.

I know my union CUPW has a complaint in about him.

#93 Edmontonian on 12.26.11 at 4:12 pm

Re: # 85 Turner Nation
AS far as the Job our new mayor is doing: I personally think he is bowing to the rich and privatizing our public owned Utilities like there is no tomorrow. I feel he does NOT have the interests of the middle-class what so ever. He’s agreed with city council to put the city on a 1/2 billion loan for a privately owned arena Downtown In Edmonton-he knows we are desperate to do something to Edmonton’s downtown people that visit are shocked to see how “filthy” it is (lots of urination and defecation along jasper ave with the thousands of homeless & drunks-we can’t afford a public washrooms downtown.
Recently year this fall we’ve seen many Bars, Restaurants and a few other business that were really busy just a year or so ago have gone Bankcrupt. On 112st we have a huge tower that is COMPLETELY EMPTY, finally just a restuarant called the Cactus Club is going in there.
I think in Edmonton we could be going into a “State of Financial Correction” that will be felt for a decade or more-nothing new here, just like the collpase of the bubble in 1987…

#94 whiteshoes on 12.26.11 at 4:17 pm

#73 Edmontonian is right on!

Dunno about you guys, but there is nowhere in this passive aggressive mess of a country I would want to make a 20 year commitment to living, nevermind a pile of bricks and aluminum siding I’d feel happy to be responsible for…

Canada has a lot of very ugly cities filled with crime and extremely limited opportunities for the people that actually live there. The street people in Vancouver aren’t going away, but they aren’t getting degrees anytime soon either, some accommodation needs to be made for them, looking the other way only takes you so far before the issues become overwhelming.

We’ve hobbled the class of people who do all the actual work with silly restrictions and expenses (if you move from one province to another expect to spend $1500 per car for the ‘out of province inspection and subsequent unnecessary ‘repair’, just as one example) and have created a class of real estate elitists that don’t think anyone who gets their hands dirty or made their money from labour should receive any consideration.

whiteshoes

#95 TurnerNation on 12.26.11 at 4:28 pm

Just in time for the latest round of tax increases:

Toronto Star online poll:

Is Toronto a better city today than it was in 2010?

Yes (20%)

No (63%)

About the same (17%)

Total Votes: 1247

Back to Poll

#96 TurnerNation on 12.26.11 at 4:39 pm

#90Edmontonian on 12.26.11 at 4:12 pm

Very interesting. I think we should all remember that the “Middle Class” is simple a post-WW2 marketing invention designed to keep the returning troops passive, a distraction from the economic plundering going on elsewhere. Don’t want them overthrowing own corrupt leaders, no. Throw a shiney new car and stove at ’em and they’ll be A-ok.
Kind of like today’s granite and stainless combo – guaranteed to placate of any age group.

And how about that auto industry:

“See the USA in a Chevrolet”
“Pontiac: we bulild excitement”
“What’s good for GM is good for USA”.

:(

#97 TurnerNation on 12.26.11 at 4:45 pm

#91Westernman on 12.26.11 at 3:31 pm

I know what you are getting at and I partially agree.

It’s worth noting that some of the best parts of Toronto are found in:
Chinatown
Greektown (with their annual food festival)
Little Italy
Little India
Little Portugal
Caribanna parade is a huge tourist attraction.

Worth nothing, none of this was forced down our throats instead it occured naturally. No social engineering was used, at least back then.

#98 Westernman on 12.26.11 at 4:50 pm

Herb,
I compose that great post chock full of biting and colorful opinion and commentary and all you got is a childish retort like ” confusing your lip and your hip”?
Can’t you liberals ever contribute ANYTHING of worth?

#99 TurnerNation on 12.26.11 at 4:53 pm

#97whiteshoes on 12.26.11 at 4:17 pm

I have a perfect example of Toronto’s anti business practices: each day in the downtown core a small army of courier trucks keep our economic engine going. Delivering your house closing papers or business contracts. Yet each day the city parking cops ruthlessly ticket the courier trucks – including our own Canada Post’s, with costs passed down to taxpapers. Trucks end up papered in tickets when they are simply carring on business, .

A better idea: allow 10 min stopping zones only for courier trucks in the core, allowing them to deliver essential business documents. If they step over the 10 min timeline then ticket them by all means. But give business a chance.

Not gonna happen – cities are so broke due to to the union mafias that the ticketing must go on; businesses be damned.

We have unionised traffic cops soaking essesential private businesses, to feed a small army of city managers indexed unions pensions. The circle of life.

#100 Hoof-Hearted on 12.26.11 at 4:55 pm

Interesting article about Stalin’s demise and the usual Bankster suspects:

http://barnesreview.org/pdf/TBR2011-no6-4-10.pdf

QUOTE:
Apparently elated by what he considered a brilliant
move by his hero Stalin, author Mukhin blurts out:
Just think what Stalin encroached upon—America’s
“holy of holies”—the basis on which it lives its parasitic
existence—the almighty dollar!

Not only did he refuse to use the dollar in the Soviet Union’s ever increasing international
trade, but he also stopped assessing the value
of products in dollars.

You can imagine how despised
Stalin became in the United States and Great Britain. Essentially what he did was to undermine the dollar gold
value system that had been established after the war
based on 34.5 dollars for one troy ounce of gold. Under
this system theAmericans wildly unleashed a torrent of
green paper in the world economy.

In an aside concerning the importance of gold, Martirosyantells the story of how and why Charles de Gaulle, president of France, fell into bad graces with the British and the Americans in the turbulent
1960s. Shortly after becoming president,
de Gaulle, in his desire to maintain
the independence of France,
abruptly exchanged all French holdings
of dollars into gold.

As the story
goes, the French minister of finance
had explained to the president in a
simple way the true worth of the dollar
as a medium of exchange.

The minister told the president this story:

Imagine, if you can, Mr. President, an auction in
which a painting by Raphael is being bid upon by Fritz,
a German,Abdullah, anArab, Ivan, a Russian, and John,
an American. Each of them makes his bid and offers to
pay for the painting with his nation’smost valuable commodity:
—–theArab would pay in oil, the German with technology,
Ivan with gold, but the American, smiling, bid
double the amount any of the others had offered and won
the painting. He took a packet of hundred-dollar bills out
of his wallet, paid for the painting and left.

When de Gaulle asked what the trick was, the minister
explained:
By all appearances the American won the painting
for $10,000, but in actual fact he bought it for three dollars,
because the real value of each $100 bill was just
three cents apiece.

Thus, because the dollar has been declared
the universal medium of exchange, all the treasures
of this world—gold, oil, technology—can be exchanged
for green paper—greenbacks.

================================
Premise is: Stalin was whacked in an internal power struggle, and with encouragement by outside forces who saw him as a threat to the global financial system .

#101 45north on 12.26.11 at 4:57 pm

NoName: I made it half way through the video. I like Peter Schiff. I’ll watch the rest later. ( shame that you don’t have a name )

Paul: Yeah I thought Kevin O’Leary was kind of docile there.

Mr. Buyer: what have you done with the real Mr. Buyer?

#102 Alan on 12.26.11 at 4:58 pm

Intergenerational Wealth, Intergenerational Real Estate, AND Intergenerational Mortgages are the new mantra.

I appreciate previous posters who pointed out that people have been living in extended family homes since the cave man days. It just happens to be a N. American phenom over the last 150 years that people have been encouraged to move out of their family homes. If tough times are indeed coming, this should not be news.

In Vancouver, the City has recognized the need to build more affordable housing and in this respect, they now have passed Laneway housing (converted garages) and are promoting secondary suites for rentals in single family homes.

Lastly, I will say for the record that Canada despite it’s problems is viewed by so many foreigners as a place of opportunity compared to many other countries. Immigrants still want to come here despite how bad people think it may be in Canada, there will always be many places that are much worse off. Capital will always find it’s way here.

There was a time a couple years ago on this blog that I suggested it was foreign, mostly Chinese money that was driving Vancouver RE prices up and I was lambasted and asked to prove that this was a fact. Now everyone knows this is and was a fact. I say this because, I’ve been suggesting that while RE prices may come under pressure in certain parts of the country there are places that people will want to continue to migrate to. Rentals now in Vancouver are at a premium. No one is getting any deals and if you want to rent a basement suite in the burbs you better be prepared to pay 12-1500 per month.

Garth, I will say that while you bring excellent points to ponder, debate and discuss, it would be great to see you balance your viewpoints on the subject matter rather than continue to try to ring an alarm everytime you make a post. That is definitely getting old.

Either way, I enjoy visiting and do appreciate your point of view.

Best of 2012 to you

#103 Timing is Everything on 12.26.11 at 5:07 pm

‘King sees most of the correction taking place in the Toronto area, where an abundant supply of condominiums is expected to bring prices lower. The report added, “We estimate there are already enough units in the pipeline to satisfy fundamental demand for the next five years.” ‘

For what it’s worth…

http://tinyurl.com/7lpwazn

#104 John Reid on 12.26.11 at 5:17 pm

An excellent review by GARTH. He failed to consider those who become disabled. Looking at this will help uncover the biggest problem which is overpaid government people.

If a TTC person becomes injured or ill, he is told to sit in the ticket booth so he can still get his full income that is equal to about $100,000 yearly paid from the public pocket. If a taxpayer has the same injury and is unable to work, the government pays him or her just about $16 daily to live on. A ticket booth person at the movie theater is paid around $11 per hour and does more work than the TTC ticket booth person who often sleeps or plays guitar on the job.

Entry level positions as a Customer Service person pay $65,000 – $120,000 yearly with the government but in the private sector they pay $11 per hour.

#105 InvestorsFriend (Shawn Allen) on 12.26.11 at 5:20 pm

CONSUMER SOCIETY

Not 1st at 87 complains about our

consumer led economy instead of production led
************************************

It may sound logical to prefer a production led economy but, in fact, it is “most illogical”.

Think about it. From the beginning of time from cavemen to early farmers to today there was little reason to produce anything unless it was going to be consumed (immediately or later) or used in some way to produce something for consumption in the future (a club to kill animals or seals with, a shovel to till the earth with). Even houses are basically a consumable good, although they may take 100 years to consume. Exceptions to the rule of “produce to consume” included churches and the like. (Easter island statutes). Even there I suppose the reason was to fcailitate the consumption of religion.

We could in fact strive to be a country that produces for export and consumes little. We would be a nation of savers. But why? That would mean other countries got what we produce.

Here is how the cycle works. We want “stuff” and services. In order to get it we generally must work. Working produces goods and services.

The more we want. The more we work and the more we have. This is true both individually and collectively.

It has ever been thus. And it is good. It is very good.

#106 Beach Girl on 12.26.11 at 5:41 pm

Regarding Iguana Bob. He has more troubles than he is aware of. Anyone who harbours an iguana is in the unf**kable category. And his parents are very aware of that, but in denial.

Once again, children are not your friends. One should be wary of them as one ages, they are cute till five, like puppies. If you think I would allow a weirdo with an iguana to live in my home is insane.

_____

#57 Herb on 12.26.11 at 8:38 am

You just had to reach for that crackberry after one day, didn’t you Turner! Now I’ll again have to check six times a day to see what idiocy Westernman has posted.

The upside is that I won’t have to wait for Beach Girl’s account of joy-of-Christmas debauchery. This blog is good.

_____

Well for once, I have no idea what you are talking about. Please elaborate. I think you dissed me, not sure.

_____

#69 TurnerNation on 12.26.11 at 12:04 pm

Blog dogs: share your Christmas stories, of overbearing relatives who insisted you begin “building equity” by taking on a $500,000 30-year mortgage, plus 5% in CMHC/land transfer taxes/closing costs, plus $600+/mo in property taxes and utilities costs.

Perhaps beach girl can open a home for wayward bommerangers, with smoking man dropping by to re-educate them.

Can’t wait for their twitter updates this year: drank tons of bozze, kicked the dog, yelled at the neighbours. All is well in the world.

_____

Well I respect Smoking Man, but regarding educating Boomerangs, I will pass. I prefer people who have been educated by life. And realize it is up to them to swim or sink.

Talking to disenchanted Boomerangers is SOOOOO BORING.

#107 Herb on 12.26.11 at 5:55 pm

#101 Westerman,

sorry, but I weighed your “great post chock full of biting and colorful opinion and commentary” and found it wanting. That’s why you all you got was a smackdown in response.

#108 coastal on 12.26.11 at 6:26 pm

O’Leary is a mouth piece whose full of crap. He talks tough on Dragons Den about “how do I make money ?” ad nauseam, but then pumps crap condos that will never pay for themselves ? Shows he is just another investment ho who will pump his buddies real estate junk as payback for buying into his crap companies. Time magazine did an article on him a couple of years ago showing his original big company buyout software didn’t even work. The Lang and O’Leary show is a joke, a pretty face and a big mouth.

#109 Westernman on 12.26.11 at 6:32 pm

Herb,
Found it wanting!!!??? That was practically a historical document… I thought you liberals were experts on things like great literature…
You sure as shootin’ ain’t experts at anything of practical, utilitarian use, that’s for sure.

#110 InvestorsFriend (Shawn Allen) on 12.26.11 at 6:32 pm

ECONOMY BAD? GET OVER IT

Imagine that you are 25 with a university degree and heavy student loan debt and no job.

You COULD spend time moaning that your parents’ generation had it easier. The benefit in doing this is zero and it is a waste of time.

Or, you could make the best of your life and realise there are still tons of opportunities for you. The world is your oyster. Get on with it.

#111 Herb on 12.26.11 at 7:13 pm

#109 Beach Girl,

no, I was not dissing you. Since you regaled us with accounts of the odd date and implied debauchery on the odd weekend, I used you for a bit of poetic licence. If we stuck to the sad facts in economy and real estate, this blog would be pathetic indeed.

#112 Randy on 12.26.11 at 7:33 pm

Who needs a degree ? I got an online degree 15 years ago and have always pulled down a 6 figure income with no student debt….Darwin Awards will be winning big time in the 5-20 years….

#113 Hoof-Hearted on 12.26.11 at 7:49 pm

ReAlItY ExPlaiNed;

Many parties are realizing the facts that support the model that we are undergoing an insidious shift to a Global Central planning model, aka Communism …..if not outright Totalitariansim.

This model is dependenrt on a critical mass of apartchiks, ie lower level member Civil Servants who obey orders and are “ready ,willing and able” to sell out their neighbours.

In this Neo – Con model(= Communism)…..the corporations take over with complicity of Gov’ts.

The Civil Servants become “paper pushing soldiers” in this red -tape army, to keep the masses in line. Expanding their own useless bureaucracies (redundant) moves them up the vampiric $$$$ food chain.

Their traitorous reward is the usual perks ie top salaries, unions, benefits,early retirement, job security etc.

They don’t care if the Kill the GOLDEN GOOSE taxpayer, as the poorer the masses, the easier they are to control.

#114 MarcFromOttawa on 12.26.11 at 7:54 pm

In french they are called “Tanguy”.

You did not specify the nature of the degrees?

I guess they are as usefull as a third tescilule.

I thought that was standard for French guys. — Garth

Au moins ma

DELETED.

#115 FTP - First Time Poster on 12.26.11 at 8:23 pm

I have been searching the MLS in Edmonton for decent prices as our 1100sq ft house for the 4 of us seems a bit cramped. I’ve come to the realization that buying anything built in the last 5-9yrs would be crap and that I’m better off doing improvements to our home. I renovated the back yard, deck and now working on the basement. Putting in a new, insulated subfloor and fireplace to make it cozy. Nothing fancy, just minor upgrades to improve our quality of life.

Just wanted to wish you a Happy, Non-denominational winter holiday Garth! Can’t say the “MC” phrase anymore, people will get bent out of shape….

#116 Timbo on 12.26.11 at 9:02 pm

http://thehousingbubbleblog.com/index.html

The so-called ’shadow inventory’ of future foreclosures may be about to fall on Southern California’s real estate markets. In San Bernardino County, foreclosure filings jumped nearly 30 percent from October to November, new numbers show. Los Angeles County’s foreclosure activity jumped 15 percent.”

Interesting that r/e has recovered down south. With such a boom and budget surplus on the horizon 2012 will be a great….not…

#117 Nostradamus Le Mad Vlad on 12.26.11 at 9:02 pm


#103 Hoof-Hearted — “Stalin was whacked in an internal power struggle, and with encouragement by outside forces who saw him as a threat to the global financial system.”

Same thing with Ron Paul. Too many of TPTB view him as a threat to their own ‘crooked’ way of banking / money laundering. That’s why he will never be elected.

Keep in mind that six individuals control 95% of the m$m, which is why they are controlled as to what they can put out. If those costs get outta hand, then we’re all in the same boat.

#116 InvestorsFriend (Shawn Allen) — “The world is your oyster.” — So true, yet how many realize it? At least we (the beter half and I) take advantage of all that is available, without screwing the taxpayers.
*
Good post. As #80 Westernman correctly points out, we’re down to the nitty-gritty of life, with the CPC piling debts upon debts as if there were no tomorrow, and eventually it will become a self-fulfilling prophecy.
*
Eurozone Draghi’s real goal; IMF Lagarde keeps warns us. Could be the elite have gotten themselves in over their heads; US Cities Struggle Cdn. cities as well, probably; Yuan Is the Yuan really high, or is the US$ sinking? But Tokyo and Beijing agree on currency pact. “This is a very wise move on the part of the Chinese and Japanese governments: the US dollar will not be able to withstand the coming collapse of the Euro.” wrh.com.

Brazilian economy leaves UK behind; Xmas message from the 1%; 0:57 clip There’s no business like war business; Control Freaks But they cannot control the cycle change; Money and Politics in the land down under.
*
Montana Good for the citizens, Enemy of the State and One Nation inder drones; Iran – Iraq Building stronger military ties, and PLO may revoke recognition; China testing a new 500 kmph train.

Smallpox “The U.S. government has awarded a $433-million contract to pharmaceutical company Siga Technologies for 1.7 million doses of an experimental smallpox drug called ST-246 (Tecovirimat).” Note the word experimental; Four min. clip Facebook — not all that it seems; Last xmas “Villains prosper while the rest are fired, foreclosed, and foreordained to suffer for the sins of their rulers.”; Psycopathic Children There may be something fundamentally wrong with the education system.

#118 P & T S on 12.26.11 at 9:04 pm

#77 Tana – It’s obvious that you have not got a Doctoral degree. One of the main reasons for the continued loss of WELL PAYING jobs to the Far East is that they REALLY value higher education – because the educated are the innovators. You are welcome to be a tradesman / woman, but don’t expect the rest of the Planet to beat a path to your door, because they won’t.

#119 Beach Girl on 12.26.11 at 9:26 pm

#117 Herb on 12.26.11 at 7:13 pm

#109 Beach Girl,

no, I was not dissing you. Since you regaled us with accounts of the odd date and implied debauchery on the odd weekend, I used you for a bit of poetic licence. If we stuck to the sad facts in economy and real estate, this blog would be pathetic indeed.

___

Well Herb, that is reassuring. I do enjoy everyone on this blog. Real estate has been a big portion of my life, but am invested in the markets more. Am not the brightest bulb, but not not the dullest blade either. I find the financial situation out there quite depressing, as a lot of my friends are suffering.

But, on a lighter note, I might have the chance of landing a bigger fish than me. The weekend was quite promising.

My Christmas present might COME after all.

#120 mark on 12.26.11 at 9:27 pm

Yeah, I loved watching those two real estate spruiking douchers on L&O’L. Of course the major selling point was what real estate has done in the past. No question it will be replicated in the future lol

#121 jess on 12.26.11 at 9:53 pm

“..they stink even on ice”

http://www.rollingstone.com/politics/blogs/taibblog

=
So far?
…the largest in South Florida history. The scheme collapsed in 2009 and Rothstein, 49, is now serving a 50-year federal sentence

by RANDY KREIDER
Dec. 14, 2011
FBI says Florida fraud scheme could top $1 billion | Reuterswww.reuters.com
Scott Rothstein.

#122 Westernman on 12.26.11 at 10:09 pm

Beach Girl,
” I might have the chance of landing a bigger fish than me ”
May I extend my condolances to the potential victim…

#123 Mr Buyer on 12.26.11 at 11:26 pm

#30 45north … its me in Japan

#124 Gord In Vancouver on 12.27.11 at 11:37 am

Thanks, Garth.

Many kids that are able to leave the nest are getting truckloads of $ assistance from “Bank of mommy and daddy”.

#125 MM on 12.27.11 at 11:47 am

#91 Westernman
“A female human rights lawyer in charge?”

Is it “female”, “human rights”, or “lawyer” that offends you?

#126 Q on 12.27.11 at 1:16 pm

best thing to do for boomerangs, is to change the locks once they go off to waste 4 years in partyville…. tough love will serve them better in the long run, rather than the sudden realization that the days of “entitlement via government vote buying schemes” will soon gone for ever.

#127 Bubby on 12.27.11 at 2:12 pm

Boomerangs. HAHA you can’t throw them out, they just keep coming back.

#128 Westernman on 12.27.11 at 3:25 pm

MM,
Lawyer.

#129 TurnerNation on 12.27.11 at 3:31 pm

#131 MM on 12.27.11 at 11:47 am

I’m thinking he would like living in Saudi Arabia: women are kept in their place, there are no human rights rules, and a religious theocracy keeps men on top.

#130 Garry Calbick on 12.28.11 at 4:53 pm

I have enjoyed your books from a number of years ago o n finances etc.I have only recenntly come across your blogs. I wonder if your short term in politics was your choice or what.No insult or inference meant.
I will likely read more as they occur on the internet.this recent warning to boomers is well written and very likely a portent of the future. My wife and now live in Mexico and return to Canada for short times each year and like your advice have no mortgages and very limited credit card debt.We get by comfortably and safely on our pension income.Our children ,long ago, learned of the “no free lunches” and as such are very independent. thank you for confirmation of our good choices.Look forward to teading more of your “stuff”
Garry Calbick

#131 Westernman on 12.28.11 at 7:25 pm

Turner [email protected],
Say…that sounds pretty good…order would be restored and things would once again be the way nature intended them to be.