Another planet

As Linda was walking into a Vancouver branch of the BMO yesterday, a house in tony West Van, a few clicks to the north, was being sold. In fact, it was the biggest deal of the day, in which the relieved seller – an offshore Chinese investor – was bailed out of a flip gone wrong. Over the 12 months he owned the place, eight of which the property languished on the market, the guy lost $1.1 million.

Unknowing of this, Linda (a wealthy woman who rents) ran into her account manager.

“He told me that the bank is forecasting stable prices and perhaps a small softening based on what’s happening in China. He then asked if we were getting ready to buy yet. I told him that we were happy renting especially since a home we desire in the neighbourhood we like would cost between $1.5 to $2 million. He then inquired if that was our budget. As you know Garth, we could certainly ‘afford’ – whatever that means –  a home in that price range. I told him however, that it wasn’t in the cards because we weren’t interested in a fat mortgage. I kid you not Garth, he looked absolutely offended as if I’d launched a personal attack. Then, [email protected] (I’ve wanted to use that moniker for a while…), who had overheard this conversation told me that I really should be looking at a house as an investment since house prices always go up. And I replied, well until they go down. She looked at me as if were from another planet and said well, not in Vancouver. At that point I realized that I was from another planet – the one inhabited by sane people.”

It was another week when sanity left the room. The growing disconnect between what’s happening on the streets of the nation, and what we’re being told by institutions and ‘experts’ is sad and profound. No wonder so many are losing our way.

For example, in the midst of a credit bubble and historic heaps of debt, big banks are hacking the cost of borrowing. This week Linda’s bank – BeeMo – sucked a half point from its 5-year mortgage to achieve the lowest level in history, 2.99%. Hours later TD came up with a six-year home loan at 3.79% and one for seven at 3.99%.

Just what we need. Cheaper money. Excess borrowing. Worse family balance sheets. Increased risk. If this doesn’t make you worry a little more about the economy, you don’t understand. Personal debt as a share of the GDP is at historic levels – high enough to have international agencies warning us. More borrowed capital pouring into real estate will only make the inevitable correction uglier, the aftermath darker. And as housing’s share of the entire economy swells, we’re set up to become California North – a state that played the real estate card and lost.

Ironically, you’d think the banks would get it. Days ago I told you about RBC’s internal stress test, probing to see if it could survive a 25% price crash. The CEO says the bank can, but the very test belies great concern. So, is the competition for short-term profits and scooped-up market share more important now than structural financial integrity?

Duh.

As the real estate market comes under stress in real life, in fact, those companies who have grown fat on its bloated carcass just can’t seem to quit. Why, here’s Royal LePage chomping on an appendage right now.

The real estate marketing conglomerate’s CEO managed not to gag as he told reporters, “Widespread calls for a major real estate correction in 2012 simply can’t be justified.” In fact LePage scored a lot of headlines in the past 24 hours with a bold forecast that housing will stay strong, prices nationally will jump 2.8% (not 2.5% because that doesn’t sound scientific enough), and both Vancouver and Toronto be more expensive places by this time next year.

Based on what? Nothing, actually. Just the status quo. Low rates and ‘industry momentum.’ Of course, what Mr. Soper counts on is a slavish and incompetent media reporting his views uncritically, unleashing a new tide of hormones. Horny young couples, soothed by an ‘expert’ opinion will tank up on newly-cheapo mortgages and get lubed into a sexy new condo or semi in a former cornfield.

And he’s right. That is just what happened. Once again CP, Postmedia, the CBC, CTV and others proved there’s no longer room for critical thought in reporting. No second opinions. No opposing views. No counter-arguments. No filter for the corporate propaganda. And I heard nobody asking Royal LePage what the methodology was for its forecast.

As such, it’s utterly consistent with the path this society is now on.

It’s in the media. In the financial system. In the bank branch on the corner. There is only one investment asset in Canada. Only one place to put your money. Only one goal. One object of desire. Just one prize young lovers seek. One rock the old cannot release. A single inbred assumption so ingrained that when you question, people are startled. Upset. How could you?

Yes. It’s a Nortel moment.

Run.

331 comments ↓

#1 TurnerNation on 01.12.12 at 9:49 pm

The First Club’s first rule: Don’t talk about the First Club.

#2 Josef on 01.12.12 at 9:55 pm

First!!! OH Yeah BABY!!!!! This is such a great blog.

#3 Arrow to the Knee on 01.12.12 at 9:55 pm

I used to think buying 500 sq ft east end “fixer-uppers” in Toronto was cool…

then I took an arrow to the knee.

http://www.thegridto.com/life/real-estate/in-the-market-for-an-east-end-fixer-upper/

#4 GTA Engineer on 01.12.12 at 10:00 pm

Joseph you bring tears to my eyes. Not in a good way. Go do your homework.

#5 Spiltbongwater on 01.12.12 at 10:01 pm

FWIW, I prefer pictures of prostitutes, and the occasional cross dresser, when it is in related context of what you have wrote about.

#6 Nick on 01.12.12 at 10:11 pm

Garth you are great!

Thx for the evening reading!

You are soooo funny but wow we are soooooo screwed.

I do rent and I managend to calm my wife down.

No, we are not buying thank you very much!

#7 Dorothy on 01.12.12 at 10:17 pm

Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?

#8 Herb on 01.12.12 at 10:19 pm

Two vignettes on CBC TV in prime time tonight to make us all very afraid:

1.) A real estate agent stating in a news show that it was a good time to buy “because interest rates are low”. Why any network, and especially the CBC,would carry such a self-serving public disservice is beyond the pale.

2.) An ad for a debt counselling service specifically marketing itself for “these tough economic times”.

To coin a phrase for this blog, “We are so screwed!” Let’s just get this over with so we can start again.

#9 Jimbo on 01.12.12 at 10:20 pm

This makes absolutely no sense to me. The big banks are sounding the alarm bells about the amount of debt people are taking on, then they go and lower the cost of borrowing again so people can take on even more debt. This is insane!

#10 John Ratadlin on 01.12.12 at 10:27 pm

Read the fine print and terms and conditions fro BMO’s 2.99% 5 year fixed rate mortgage. It looks like those introductory offers you get in the mail.

#11 Victor on 01.12.12 at 10:27 pm

#7 Dorothy on 01.12.12 at 10:17 pm

Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?

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

To feel envy is human, to savor schadenfreude is devilish. – Schopenhauer

#12 R on 01.12.12 at 10:30 pm

Picked up the book last week. My savings is terrible, I have three years into the company defined contribution pension and no TFSA.

But better too late than never! I still have 30 years to retirement and I’m paying attention. I didn’t drink the RE kool aid at least.

#13 chubster on 01.12.12 at 10:31 pm

:) run indeed. what is this new devilry? a balrog. a demon of the ancient world. this foe is beyond any of you. run!

#14 Vick on 01.12.12 at 10:32 pm

This picture is worth a 1000 words! (especially if you live in Vancouver.)

http://i.imgur.com/K8947.png

sorry if it’s been posted

#15 Duncan on 01.12.12 at 10:35 pm

Dorothy, corrections are correct. It is a positive thing.

#16 six-figure-renter on 01.12.12 at 10:35 pm

oh i can’t wait to laugh at all the idiots that thought Vancouver real estate will only go up.

#17 KingBubbles on 01.12.12 at 10:35 pm

This reminds me of 1999 when strippers and cabbies were telling me about their stock Portfolios and IPO’s. With this much lipstick being put on the pig you know what comes next will be epic.

#18 McExpat on 01.12.12 at 10:37 pm

Sorry Dorothy but why is it disheartening? What is truly dishearteningly is how brainwashed and utterly pathetic Canadian society has actually become. It drives my absolutely wild actually to see the dumbing down of society and the massive debt we are now it….except for a select few who have chosen another (and much smarter) road. I am soooo tired of having real estate rammed down my throat and I have seen busts overseas like you could never or would ever want to imagine….wiped out. A house is a roof over your head period. Society has managed to elevate it to religion and it is beyond sickening.

#19 JessicaJ on 01.12.12 at 10:40 pm

#7 Dorothy: “Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?”
——————————
With all due respect, what about all of the savers who are priced out because specs and buyers with 5% or 0% have driven prices to insane levels? You expect us to be sad for them? Get real!

#20 Snowboid on 01.12.12 at 10:41 pm

#7 Dorothy on 01.12.12 at 10:17 pm…

I don’t think too many people ‘want’ the effects a huge real-estate correction would have on the economy.

However, since there is one coming, is it not prudent to prepare?

What would you have people do? Pool their meagre savings to buy ‘as-is’ real estate in small towns with few jobs that would support buying?

I’m sorry, there is nothing “…wrong with you people?” – they know this is not the time to be buying RE, especially in most parts of BC and Canada.

#21 City Slicker on 01.12.12 at 10:43 pm

Well here is more heavy insider selling by RBC. One exec unloading $14 million. And the CEO another $12 million.
Maybe this could affect the Royal and they know it:

http://canadianinsider.com/node/7?menu_tickersearch=RY+|+Royal+Bank+of+Canada

#22 Re-diculous on 01.12.12 at 10:43 pm

Doesn”t surprise me that someone in the bank said “prices in Vancouver only go up”. I have lived in Vancouver most of my life and love the city, however, I’m embarrassed at how arrogant, smug and ignorant we appear to be to the rest of the country.

#23 John Ratadlin on 01.12.12 at 10:45 pm

Read the fine print and terms and conditions from BMO’s 2.99% 5 year fixed rate mortgage. It looks like those introductory offers you get in the mail. Bring money over.

#24 Onemorething on 01.12.12 at 10:47 pm

Softening in VAN due to China RE Meltdown!

Now that’s just another someone at the bank that doesnt know squat!

Remember folks without this BS spewing from the banksters their future looks dismal at best!

Throw the realtors in there as well!

Remember, when this all shakes out these are jobs that are either going be cooked or perceived as dodgy or both!

1 – Bankers
2 – RE Agents
3 – MSM
4 – Politicians

Children will not even admit their parents are one of these!

#25 Pr on 01.12.12 at 10:49 pm

#7 Dorothy ….What is wrong with you people?
Be nice, and try to explain, all the facts to someone who think a correction is not in the scenario sooner are later. You see, after 99 % of the time, those persons just spit a you ( exaggeration here) to let you know your a idiot. You will see how you will start to lose your patience a little bit. They are not salivated, i think, its more du genre: I TOLD YOU! And for the one who wish for a very bad scenario, their is a old adage; be careful what you wish for.

#26 Mr. Lee on 01.12.12 at 10:49 pm

So let them

All is always going great until it does not.

How many times do we have see this re-run, Nortel, Tech bubble, Bre-X and I have not even touched the surface of investing disasters. Those who are liquid and diversified will savor the day “Carpe Diem”

#27 City Slicker on 01.12.12 at 10:49 pm

#7 Dorothy on 01.12.12 at 10:17 pm

Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?
———————————————————
Oh shut up already. And how many of us got the you’re stupid for renting look from them. I’m already drooling and can’t wait to vulch, Dorothy!

#28 City Slicker on 01.12.12 at 10:52 pm

oops looks like many have already responded to Dorothy. And I’m sure many more will with dumb as$ comments like that.

#29 Fifty Percent Correction Predictor on 01.12.12 at 10:53 pm

As recent as this week, I had been lectured in my face by two co-workers that real estate prices only go up!

When I replied that this is not true in the US (just a couple of hours drive south), they became so upset! So visibly upset!!!

Can not wait for day that the RE drop 50% value. Nothing sinsiter. Just to prove a point.

By the way, I saw three (3) For Sale signs put up this week in my street. Someone is getting anxious and can not wait for the Spring. maybe early bird catches the worm?

#30 rosie on 01.12.12 at 10:54 pm

BEWARE NORTEL MOMENTS: P.S. BEWARE THE NICE LADY AT THE BANK. and the guy in the orange shorts, and economists working for realturds, and the m.s.m. JUST BEWARE.

#31 Jsan on 01.12.12 at 10:56 pm

The name of the game that the banks are playing is suck as many people into the deepest most expensive mortgage that they can because when the rates inevitably start to head higher, they have guaranteed themselves a homeowner lifetime of healthy future profits and thanks to the CMHC, 100% risk free.

Back in the olden days not that long ago, the mortgages were much lower while the rates were considerably higher. Today we have the perfect storm for lenders and a once in a lifetime golden banking opportunity. They can use rock bottom, Century low mortgage rates as the carrot and insanely historically high prices as the guarantee of a HUGE future payoff.

What more could they want?

#32 Fool in the GTA on 01.12.12 at 11:02 pm

Here’s another anecdote for my fellow fools:

Was in the watercooler at work today. A young-ish guy was telling me he’s looking to buy a pre-construction 2014 condo on King West (Toronto). I asked him why you’d buy something you can’t even see. He said because prices will be higher by 2014.

#33 GTA Girl on 01.12.12 at 11:03 pm

The Barrista at Starbucks owns a condo.

She is about 23.

She speaks of flipping it.

That is the equivalent of Moses’s burning bush

#34 TurnerNation on 01.12.12 at 11:09 pm

#2 Josef on 01.12.12 at 9:55 pm

Josef, son, come here. I let you have First yesterday. It’s true. I sat down at my PC just as this pathetic weblog updated. But I thought to myself do I really feel like it? No.
You have shown your true colours today, #2.

#35 Mikesinlangley on 01.12.12 at 11:13 pm

How about this angle…
A high profile journalist questioning the koolaid being served, is libel to having the ass sued off his/her employer and their own career pastureized.

#36 Mel on 01.12.12 at 11:16 pm

Whenever I happen to come across media ‘ advertising expert ideas’ as something to behold when I know better, I turn the channel.

The way our world economy has been ruled and ruined by these banks, governments, investors and people in general is truly scary.

As for me, even though I am retired and rent, I still save and invest 10% of my retirement income. I will do this as long as my pension income has value in today’s dollars, since my pension is not inflation indexed. Only then, I will stop saving and take a portion of my savings to supplement my pension funds.

#37 Paul on 01.12.12 at 11:16 pm

All about which banks that can handle a downturn in the housing market.

http://watch.bnn.ca/thursday#clip599779

#38 disciple on 01.12.12 at 11:16 pm

Garth, first of all, leave it to me to say how stirring that last paragraph was. Pulpit material. Reading it I had a vision of you in front of millions of Canadians, only you were beardless, go figure, I’m sure it doesn’t mean anything…..

P.S. With a blog title like “Another Planet” I know you want some Mars material… so I’ll hook y’all up tomorrow… Perhaps I’ll throw in some things on Venus you never knew…. stay tuned…

#39 Don on 01.12.12 at 11:18 pm

Josef is delusional – I can’t believe he made it to this site also – he is on others sites as well – spreading crap.

Dorothy – I can’t believe the nonsense you are promoting – I and a lot of others didn’t create this housing bubble and yes I feel despair that so many people were sucked into buying by people like you spouting off versions of the real truth.

Rising prices are not sustainable – we are already at 70% home ownership in Canada, big debt on the books of the CMHC and yet you ask if the blog dogs are happy about a correction. Well here’s my answer: YES… cause I have had to endure the smugness of idiots who choose not too listen to common sense… spout off at the mouth how wrong I am and how right they are because prices always rise and it is different here. If you reached the age of adulthood in the last ten years (boom time) you can chalk it up to youthful ignorance and dumb advisors. I ask the question again Dorothy if the average house price goes up year over year sooner or later more and more people will be priced out of the market so who exactly will buy all the houses so your clients can realize the paper gains.

And remember China is not considered a democratic nation and they don’t necessarily have to tell the truth about their economy – it is not a level playing field. Here in North America we are lied to also and our degree of democracy is questionable. China is also experiencing a lack of demand for their products and real estate.

Dorothy I mean you no ill will, depending on your clients and advice you have given it sounds like you will have your hands full or empty – and maybe just maybe if you tap you shoes together you will find your way home and magically all will be glorious. This is not a blog to come to without commonsense fundamentals.

Unleash the Dogs.

First things first time to revamp the educational system – even those coming out with University Degrees these days concern me.

#40 young & foolish on 01.12.12 at 11:19 pm

It’s so true about the media …. they’ve been castrated. Nobody’s willing to be critical anymore lest they offend somebody or upset the status quo. We have become too passive to discriminate …. too afraid to challenge anybody who claims to be an “expert”.

So Nortel indeed!

#41 Junius on 01.12.12 at 11:19 pm

#7 Dorothy,

I agree with you. I have believed that we are in a bubble for more than 2 years. I am angry at the Con gov’t for stoking the fire. I am furious at the Banks for extracting so much money without taking much risk. I am deeply unimpressed by the sleazey and deceitful practices of the leaders of the Re industry. Finally, I am disillusioned with the complicity and stupidity of the Economics Profession who eithermwhore themselves out to the aforementioned groups or sit idly by as others spew nonsense.

However I am deeply worried about how this will impact all of us.

#42 mid-Ontario on 01.12.12 at 11:24 pm

The direction of the world is clearly set out by those with vision. Currently, the vast majority of people see real estate rising moderately in 2012. This vision will come to pass while the thrashing about of those with contrary views will fill the comment section on Garth’s blog.
We were pretty well in the same spot last year when Garth was not positive for 2011, had strong support of the masses here and as it turned out, everyone was wrong. Garth’s call for increases in interest rates and a corrseponding drop in house prices did not happen.

2012 will probably be about the same in twelve months as now. Down the road, who knows for sure.

Realtors want to sell and make money. Let them spin their tale – argue about the future if you want, but don’t get apoplectic about what has yet to come.

#43 T.O. Bubble Boy on 01.12.12 at 11:26 pm

Here’s a thought for you:

If RE prices only go up, and the banks have all the money needed to buy every unit of every condo/home out there, why wouldn’t they just buy the condos themselves? They all have investment divisions trying to make money – what better investment is there than one that only goes up???

Next time you’re at a bank, go and apply for a mortgage (just for sh*ts and giggles) — what do you think the odds are that the mortage amount that they offer you is the MAX that you “qualify” for? Now ask yourself, in what other transaction do people get excited and feel lucky to be able to pay the absolute highest amount possible for something? Imagine that you went to a car dealership, and they offered you a $100,000 loan to buy a car… is that a good thing? How about getting offered a $50,000 credit card limit?

The whole consumer credit industry is built on lenders maxing you out as quickly and easily as possible — why else would they start all negotiations at the maximum possible amount that they are allowed to lend?

#44 Don on 01.12.12 at 11:28 pm

My wife recently called a foreclosure realtor to get some info on a website and before ending the call the realtor said and get this. “You promise to call me when you are ready to buy”. Her reply “Yup for sure we will, wouldn’t do otherwise” Yah, whatever buddy. Monkey see Monkey do – it’s not rocket science.

#45 Chaddywack on 01.12.12 at 11:32 pm

I wonder why the MSM doesn’t print stories about the Chinese guy who LOST $1.1M on his flip attempt. I wonder where Garth dug up that info anyway….

#46 T.O. Bubble Boy on 01.12.12 at 11:32 pm

Here’s the deal of the day: $650k for a tear-down, buy hey – you get some freebies…

Work Bench And Fridge In Basement Plus Some Storage Bins Are Included As Well As Material Currently In Garage.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=11458033&PidKey=-826100426

(maybe the “material currently in garage” includes the $300k-$500k it would take to destroy this place and build a new home?)

#47 GPC on 01.12.12 at 11:33 pm

Global Edmonton story on the local RE Market:

http://www.globaltvedmonton.com/video/housing+sales+forecast/video.html?v=2186090052#stories

Everyone in this video from the CMHC rep to the newly elected real estate board president can’t seem to figure out why sales are so slow in the E-town market…

Clueless might cover it.

#48 Renters Revenge on 01.12.12 at 11:40 pm

“If RE prices only go up, and the banks have all the money needed to buy every unit of every condo/home out there, why wouldn’t they just buy the condos themselves? They all have investment divisions trying to make money – what better investment is there than one that only goes up???”
Good questions. Points to the fact that banks are in the business of creating debt, not the business of loaning money.

#49 Fleabitten Monkey on 01.12.12 at 11:43 pm

Is anyone surprised by the media of late? They’re not going to let the recent stories of the correction go unanswered.

#50 smartalox on 01.12.12 at 11:46 pm

I’m not worried about the MSM, once real estate craters, re-max and royal Lepage will stop the gravy train and get back to real reporting, right?

#51 kim on 01.12.12 at 11:49 pm

even at 3% interest which you can get with a mortgage broker ….prices are still out of reach. Every rental i seen on mls is cash flow negative. one condo for rent is trying to sell at 400k and sits empty for rent as well at $1800 . The condo fees are $400. at 3% interest the condo would have to be priced at 290k to break even. does not include taxes so even lower then $290k. Anyone one buying or even investing in RE now is a total fool.

#52 Uh Oh Canada on 01.12.12 at 11:53 pm

My in-laws live in Ireland and they say the media was really tooting RE before the crash. Same thing in the US, according to a RE appraiser I spoke to. So of course we’re gonna have the same delusional message in Canada. It’s the sign of the bubble crashing. I do hope it really happens this year because if this thing grows any bigger than it would REALLY get ugly.

#53 Devore on 01.12.12 at 11:55 pm

So for weeks now I’ve been overhearing this guy at work yapping away about the condo (Vancouver) he’s planning to buy. Finally, he called someone, apparently hasn’t talked to for months, and practically first (and only) thing he says is “hey guess what I bought a new condo”. Went over all the usual suspects, throwing money away on rent, building equity, own place, blah blah blah. Thing is, sounded like he was trying to convince himself, to justify this splurge in hindsight.

Apparently his mortgage (no doubt a 5/30, with scant equity after CMHC premiums get tacked onto the principal) is “only a little higher” than he was paying in rent, so I suspect he has not yet seen his property tax bill or strata fee yet. But hey! we’re building equity here!

Sounds like this Dorothy character. Must repeat the mantra constantly, otherwise reality will intrude.

#54 MARTIN on 01.12.12 at 11:55 pm

what garth doesnt understand is that the bear in real estate its not even close. canadians are so damn that if the market drops a bit they will think its just temporary and they will still hold. this will take years until they kaka their pants’

#55 Bill Gable on 01.12.12 at 11:58 pm

Poetic description for the prescription for economic disaster.
Anecdotal stuff again, Mr. Turner.

Driving from Vancouver across the Lion’s Gate and into West Vancouver – at around 10:00 am. and it was a morgue.

It was super quiet on Marine.

Yes, there was customers on the street, but something has changed. People seem, I dunno, subdued?

The Doctor was honest enough when I asked him if my pharmacist was correct in saying that sleeping pills and anti-depressants, were flying off the shelves.

It bothered me. This was a sunny day in Vancouver.
I walked and looked at the window full of listings. Nary a sold sign to be seen.

One of West Vancouver’s best known brokerages, getting in his Porsche. He looked like he had something on his mind.

I’m sure it wasn’t the Canucks.

#56 Smoking Man on 01.13.12 at 12:01 am

a prairie dawg and disciple I chirpt you late on yesterdays.

Waiting for rebutall

Gatho
And he’s right. That is just what happened. Once again CP, Postmedia, the CBC, CTV and others proved there’s no longer room for critical thought in reporting. No second opinions. No opposing views. No counter-arguments. No filter for the corporate propaganda. And I heard nobody asking Royal LePage what the methodology was for its forecast.

My consistant message, School Makes People Stupid

#57 Rich Man on 01.13.12 at 12:02 am

Hey guys
I think the banks are slashing interest rates just to hype up the chinese people that are coming over with millions for chinese new years. The banks say these rates are only available from Jan 12th to Jan 25th.

#58 Peter on 01.13.12 at 12:04 am

Regular reader – 1st time poster. Here’s a strategy for “F” and the gang to slowly cool the market and target those at the higher end! Why not develop a down payment formula that works on a sliding scale? For example, keep 5% down on homes under 200k; 7% for 200 to 400k and 10% for 400+K.

Just a thought! BTW, love your blog!!!

#59 [email protected] on 01.13.12 at 12:05 am

How much money in advertising do various real estate boards and agents put out? This is why I don’t think any MSM outlet will bite the hand that feeds them. Telling for me is Bernanke hoping for a soft landing in 2006 (Globe and Mail article today); every banker and CMHC is talking about the Canadian housing soft landing.

#60 Rich Man on 01.13.12 at 12:05 am

Also I am pretty sure around chinese new years last year was the time when all the hype started and people are getting ready for the chinese this year. Just like the banks are getting ready by slashing interest rates for a short period of time. Thats why we got so many listings at same prices.

#61 Cory on 01.13.12 at 12:07 am

Garth,
do you think our banks could collapse? what about our currency?? this thought makes me nervous since we are very liquid.

Not a chance. — Garth

#62 Timing is Everything on 01.13.12 at 12:12 am

#10 John Ratadlin

Agreed.

You can NOT break that BMO mortgage in ANY way in the 5 years, even if you want to pay the penalty…unless you sell the property. Read the fine print for the rest of the ‘deal’.

I’m back on sno-cones.

#63 Rich Man on 01.13.12 at 12:13 am

also imagine what the chinese real estate agents will be saying to the mainland chinese hyping the shit out of them

#64 Frank on 01.13.12 at 12:14 am

Things are very different in Canada. Sure prices might drop a bit or stay flat. Remember 93% of people are still working and those that do not have to sell in a downturn will not sell. Anyone that things that prices are going down down 40% in one shot are delusional.

#65 Rich Man on 01.13.12 at 12:15 am

all that being said i feel like we do not stand a chance :(

#66 NewWorldPartyDotOrg on 01.13.12 at 12:16 am

http://www.newworldparty.org/2011/11/bubbles-extreme-maker-and-breaker-of.html

“In 1989, people with many years of real estate investing experience, stated that real estate:

– is the safest investment you can make
– prices have never gone down in history
– you have to get into real estate now, or else you’ll never get in

Yet, house prices have dropped before and after 1989.”

“You might hear or read these reasons, especially from real estate agents or the CREA, why bubble prices will not come down:

– immigration
– foreign investors
– it’s under-priced here compared to other world-class cities
– they aren’t making any more land
– this time, most buyers are not speculators

Each of the above points are debatable.”

#67 Jon B on 01.13.12 at 12:17 am

I’m feeling the anger.

#68 NewWorldPartyDotOrg on 01.13.12 at 12:18 am

Housing is the most manipulated market in the world

http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html

“Financial Motivation

Most politicians are likely homeowners and not renters. Therefore, if they can continually increase home prices, they stand to benefit.”

#69 Ralph Cramdown on 01.13.12 at 12:19 am

This is BMO’s Canadian equivalent of redlining. Even though the CMHC (taxpayer) promises to make them whole for a mortgage up to 30 years and 95% LTV, they only offer this mortgage up to 25 years. So low rates for buyers who live in much of Canada, but a higher rate for first-timers (who need a 30 year AM to make the nut) living in expensive places like Vancouver, Toronto and Fort Mac.

Renter? Yep. Bitter? No, but annoyed. This once-in-a-generation-if-that money sale only applies if I agree to put it into a house just as this country runs out of buyers. I’d be a lot more copacetic if my squirt wasn’t looking for a well-regarded kindergarten spot for next fall. Still, we’ve amassed a fat bankroll by renting housing and renting cheap, tax-deductible cash to invest. When we buy, we’ll be able to pay cash and then mortgage 80% to invest, so our mortgage interest will be deductible.

In the meantime, if anyone has a house to rent, we’re looking for a place in a good school district, walking distance to the subway, with a garage. Mail me the details (bathurts at gmail). Thanks.

#70 mark on 01.13.12 at 12:20 am

I just wonder what this wealthy woman has to go to that financial person and waste time with her

What can one possibly gain from taking to a BMO financial advisor?

#71 Dylan on 01.13.12 at 12:20 am

I bought a foreclosure for $310 k in the Edmonton area where it would otherwise be listed for $360 k. The melt is already happening even when the ground is freezing. People with their “For Sale” signs just don’t want to see it, or think their house is “really worth it because we put 50k into it last year.” I’m not mortgage free, but I think that I bought in the area for 50k less will make those around me nervous. We’ll see how many signs go up in the spring.

#72 Cookie Monster burnin' Kus on 01.13.12 at 12:20 am

And to think, if you can, that if we were still on the gold standard non of this shenanigans would even be possible. Bank credit expansion leveraged 25:1 backstopped by the central bank of CanaDuh and the FDIC and the CMHC. Our whole monetary system is a sham! with interest rates and savings both at all time lows at the same time, like being barren and pregnant at once. Distortion of reality is not possible, only distortions of perceptions are possible and perceptions are soon to change.

Keynes’ economic theories were dead the day they were born since we’ve always been Austrians since we even know what economics was, reality is real, existence exists and A is A. The damage is done!

So Garth, are you still a fan of FIAT money now, do you still have faith in government, are you still a paperboy?

Ron Paul 2012 or die.

I am sorry for your loss. — Garth

#73 zman on 01.13.12 at 12:26 am

hi garth

waiting to read on why rrsp is bad…i hope you talk about it before this deadline as i am looking to drop 35k

#74 Tri-State Pat on 01.13.12 at 12:27 am

#46 Toronto Bubble Boy

I got on the link you had in your message. I left a note saying the garage looked nice.Looks like the openner needs some work…

This market is just like so many US cities just a few years ago. I saw first hand what happenned in towns close to the Chicago area. 35% decline…

#75 Mr Buyer on 01.13.12 at 12:30 am

#7Dorothy on 01.12.12 at 10:17 pm
Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?

Let’s see Dorothy…A house built in 1973 or 74 for 29k now selling for 294k in a town with 10000 people and no industry except for banks and real estate agents. Families can no longer afford to buy homes to live in unless they are mentally deranged to an extent that they think it is okay not to have money for running shoes for the kids for their entire life (we can borrow the money for shoes in the form of a home equity loan so the bank can even charge intrest on food and clothing along with shelter). A correction is working its way through the system now and many people have to sober up. Not just the borrowers but every agency, intitution, CEO and politician that has damaged the Canadian Economy, communities and families across the country. Even this blog makes things out to be a great deal less sinister than they are or maybe even we the enlightend do not understand that most people are not borrowing from their home equity now for vacations but for milk. I remeber the first time I heard the term house poor some 40 years ago. That now seems to be the norm rather than the correction. What is different here in Canada is the desparate level we need this bubble to continue. I think we have reached a magnitude that bubble may no longer be appropriate maybe a term like real estate Blimp speaks better to the magnitude of the bubble or perhaps real estate aneurysm better highlights the grave aspects of the condition. There must be some recourse in the courts to bring all these agencies to account under the law. At what point does the misrepresentation of the truth become criminal in nature?

#76 Bobby on 01.13.12 at 12:32 am

Just read a retirement bulletin that was forwarded to me. It says that 59% of Canadians approaching retirement have less than $100k in financial assets. Oh oh.
It certainly seems to coincide with what Garth has posted.

#77 villain? on 01.13.12 at 12:37 am

#7
Dorothy on 01.12.12 at 10:17 pm
Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.
What is wrong with you people?
=================================

Dorothy, it had caused me heartache and trouble as a single mom to sit by and watch so many people playing the big shot, and pushing the housing prices up through the roof, and why?
Because they thought they could. Because they thought they were entitled to those McMansions.

Do you honestly think that they cared for just one second how folks like me felt like?

I am finally seeing some areas in BC at least, where I can actually afford to (eventually) buy a decent house for my budget.
CASH … that is, not throwing money into the wide open throats of those banker dragons.

I waited my turn, why couldn’t they?
Geeeez, I wonder what is wrong with me ;)

#78 Victor on 01.13.12 at 12:38 am

Quebeckers feeling the job squeeze

Thursday, Jan. 12, 2012

It’s almost as if the recession has caught up with la belle province.

Economists are at a loss to explain why Quebec, which limped through the slump but didn’t suffer the extent of job losses as elsewhere in Canada, is suddenly seeing deep cuts.

But the trend is clear. While a single month of job losses could be dismissed as a statistical blip, three consecutive months of declines – from October to December at a cost of almost 70,000 positions – can’t be.

http://www.theglobeandmail.com/news/national/quebeckers-feeling-the-job-squeeze/article2300895/

===========

Hard to pay a mortgage when you don’t have a job. This will not end well.

#79 Junius on 01.13.12 at 12:45 am

Garth,

Thanks again for mentioning the MSM. The massive consolidation of our media industry has destroyed journalism. The corporations who own the outlets are slaves to the sponsors and couldn’t care less. It is pathetic. Look at where it leaves us as a society.

#80 MarcFromOttawa on 01.13.12 at 12:46 am

Spec fever has hit the nation’s capital. An amateur developer tore down a nice affordable house on a decent lot to build a duplex plus this hideous monstrosity. It’s been for sale since this summer in a so-so neighbourhood called Overbrook.

They’re only asking 689,900$

http://royallepageottawa.ca/listings/listing_body.php?id=26767

#81 Cookie Monster burnin' Kus on 01.13.12 at 12:47 am

#35 Mikesinlangley on 01.12.12 at 11:13 pm

How about this angle…
A high profile journalist questioning the koolaid being served, is libel to having the ass sued off his/her employer and their own career pastureized.
——
Reminds me of yesterday when I was watching the Lang and O’Leary on CBC and Amanda asked what’s his name about the Harper government blocking charitable donations to environmental groups protesting the northern gateway pipeline what he thought of Harper’s position, and he supported it or at least didn’t even hint of noticing the hypocrisy and stifling of free speech and freedom of choice to give money to a cause. Unbelievable!

Then I remembered the CBC is currently scared shitless these days about their pending budget cuts. Kiss, kiss, kiss, make nice, don’t rock the boat. Hail Harper.

#82 villain? on 01.13.12 at 12:50 am

Sorry, I just read Dorothy’s comment, and felt my throat swell up.
Had to hit the keys immediately but had not read all the other responding posts.
Will shut up now 

#83 a prairie dawg on 01.13.12 at 12:53 am

#1 TurnerNation

The First Club’s first rule: Don’t talk about the First Club.

– – –

Nice pop culture reference. ;)

And the Second rule of First Club: Don’t talk about First Club.

#84 HDJ on 01.13.12 at 12:59 am

More and more condos are being dumped onto the market in Victoria. And awareness is fortunately increasing that anything built between 1980 and 2000 is a potential leaky-condo disaster.

#85 APCM on 01.13.12 at 1:00 am

For all the people who think friends/relatives/co-workers are trying to do you harm for telling you to buy a place, they probably think they’re giving you good advice. I sat on the sidelines for 3 years before buying a condo. I bought a condo almost 3 years ago now and it has gone up on paper (compared to the same units in the building). So if my friends or I were to buy in now we’d have to pay significantly more. It sucks to see people pay for more just because they waited and tried to be responsible. I know in the time I waited prices went up more than my sucky investments. When people tell me they want to buy a place and should they, I always tell them I regretted waiting but I can’t predict the future so they could drop. But I always say I would buy sooner if I could.

Sorry for rambling. I know I’m not expressing myself eloquently. But reading people hoping prices will drop to show up people who told them to buy seems a little mean-spirited. I know when I suggested to people (who really wanted to be homeowners) they should buy I was trying to be helpful

#86 Trailer Park Boys on 01.13.12 at 1:00 am

OMG…Wedding problems for non traditional weddings in Canada….get yer ass in gear

We do hereby wed BPOE and Crowded Elevator Farts.
Crowded Escalator farts please pass the gas/ring

#87 BPOE on 01.13.12 at 1:02 am

All unfolding as I have stated many times. This comes as no surprise. Interest rates being lowered for decades to come. It’s amazing how wrong The American has been on predicitions
********************************************
For example, in the midst of a credit bubble and historic heaps of debt, big banks are hacking the cost of borrowing. This week Linda’s bank – BeeMo – sucked a half point from its 5-year mortgage to achieve the lowest level in history, 2.99%. Hours later TD came up with a six-year home loan at 3.79% and one for seven at 3.99%.

#88 dd on 01.13.12 at 1:03 am

BOC gov and all are screaming about the debt but nothing is being done. Bankers loaning out cheap money but are warning about a major house correction. Major banks doing their own stress test and say dont worry be happy.

What utter bull shit.

#89 Emperialz on 01.13.12 at 1:03 am

Garth, what’s to stop the government from keeping interest rates this low for the next decade or more? I am a RE Bear (or maybe I am the delusional one and all of the rest of my generation got it right), but it is hard to ignore the ‘it’s different this time’ argument in regards to interest rates. Thoughts?

#90 Nostradamus Le Mad Vlad on 01.13.12 at 1:05 am


“And as housing’s share of the entire economy swells, we’re set up to become California North – a state that played the real estate card and lost.” — As California’s economy tumbled just after their RE crash, so will ours. This is a completely unsustainable lifestyle. Let the good times roll? There is always a rest period somewhere.
*
#7 Dorothy — “What is wrong with you people?” — Nothing. I’m not salivating at all. But there comes a time when this excessive greed and corruption must end. What the ultra-rich and wealthy are doing is bringing forced austerity into our lives, and at the same time are introducing new laws and legislation to make it more and more difficult for us to live.

How many Bernie Madoffs would you like to see screwing people out of their money, Dorothy? I’m sure there are plenty around. Nothing lasts forever as everything runs its course. The sooner this present cycle ends, the better (2026 or thereabouts). It will get rid of a lot of garbage from the WH, Pentagon and Wall St., 24 Sussex Drive, 10 Downing Street, etc.
*
Quadrillions hidden? “What global banking crisis?” Carlyle Group Quite comfortable, thank you; Austerity Refused, and Do As We Say! Cleveland 20K more homes to be demolished; China I mentioned earlier that China may deliberately let its economy tank then call their IOU’s from the US and see what happens; UK; 4,000% student loans; Greece.

US – Iran The US did the same thing to Libya — closed its central bank; Drinking the Koolaid? Not from the toilet; Banking on Friday the 13th, and it’s not a horror movie; Cashless Society First in India, but does the NDAA and other bills have anything to do with this? Bonds Fading? and Junk Bonds; 28 with dividends; Three Bubbles — one country (this one); Spain and Italy We’ve only just begun; Treasuries doig=ng the Twist; Tesco Going down and nice chart; China and cheap oil; YoY Gas Chart; Retail Sales; 3:11 clip The real reason for the Libyan invasion.
*
Pic and caption are telling; Ron Paul finished second in both Republican and Democrat races; Now why would the US send more warships to the Persian Gulf? Billary Dracula Clinton Obomba and Dracula — what a team! ET exists somewhere There are billions of earth-like planets in the Milky Way; Mexican Drug War Depop. by any other name.

#91 Standard Deviation on 01.13.12 at 1:08 am

Way back in the 16th century or was it the17th? the scottish inventors of economic theory established that the principle driver was to ensure that people made decisions that benefitted society and not themselves yet here we are 5 centuries later still procrastinatiing or deliberating the fundamental theory.
Namely People/institutions always make decisions that benefit themselves above all else ….daaaah what has changed!
Why do media and officianado’s continue to procrastinate on fundamental economic theory and god or whomever forbid trust so called economic theorists to the total absence of critical thinking?
I believe we are fundamentally masochists at heart and behave accordingly. If the law of large numbers prevails we are destined for disaster. ……. Way too much wine tonight my friends.

#92 Ronaldo on 01.13.12 at 1:09 am

#42 mid-Ontario – – “argue about the future if you want, but don’t get apoplectic about what has yet to come.”

Maybe Doris was right after all……

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

#93 Trailer Park Boys on 01.13.12 at 1:13 am

Oh yeah…..

We and Bubbles (get it)kitty litter think that offshore investors who speculated on Canadian RE should be compensated for their losses. …..plus interest .

It’s the least we could do, we don’t want the world to think we Toque-mandas are ungrateful and ignorant trashy assh*les who drink beer and watch hockey 25/7.

Pass the hat …….starting(and stopping) in Eastern Canada

#94 Ronaldo on 01.13.12 at 1:18 am

#55 Bill Gable – “One of West Vancouver’s best known brokerages, getting in his Porsche. He looked like he had something on his mind.

I’m sure it wasn’t the Canucks.”

Bill, he was probably wondering how he was going to make his next Porsche payment.

#95 frozen trumpet on 01.13.12 at 1:18 am

Dorothy – “what’s wrong with people?” Here’s what’s wrong: Last year I had to sit in an office and the only conversation besides work was real estate day in, day out. I dreaded going to work because I’d be forced to listen to endless conversations about real estate. One day I said, “Can we talk about something else today?” Blank stares. One person actually said, “Why would you want to? That’s all there is.” By the grace of God, someone referred me to this blog, so I would sit reading and learning from Garth and his readers, as conversation that contradicted what I was reading continued all day long. I said nothing to anyone and just kept reading. It was the only thing that got me through the job (I work contract, and luckily each job is short-term). No one seems to be talking about real estate at my new job. Dorothy – I have one word for you and it rhymes with swat.

#96 InvestorsFriend (Shawn Allen) on 01.13.12 at 1:19 am

LOW MORTAGE RATES…

Garth reports… This week Linda’s bank – BeeMo – sucked a half point from its 5-year mortgage to achieve the lowest level in history, 2.99%. Hours later TD came up with a six-year home loan at 3.79% and one for seven at 3.99%.

Wow, 5 years at 2.99% is a sweet rate indeed.

And as I nattered on about a couple weeks ago it sure would be nice if Canadians could lock in for the full 25 years at something like that rate.

In America the average 30 year locked in rate just fell to 3.89% AND they have the right to get out of those mortgages in return for a smallish fee (NO interest differential applies)

I still need to follow up with CMHC and Royal Bank about what they would need to do to get lower long-term fixed rates in place for Canadaians. (And at the same time investors in Canada would be able to invest some money at better rates by buying securitised long term mortgages if only CMHC would get on this). Surely there is a way to get a 25 year locked in rate that is a LOT lower than 8.75% (try 5%) but which still gives room for profit for the bank (say 1%) leaving investors with say 4% which many would accept.

In Canada Royal Bank is offering a 25 year locked in rate for 8.75%. Anyone taking that should be locked up for insanity.

#97 Ronaldo on 01.13.12 at 1:25 am

#70 – Mark -“What can one possibly gain from talking to a BMO financial advisor?” Not much. They are mutual fund sales people. Nothing more.

#98 LS in Arbutus on 01.13.12 at 1:31 am

I 100% concur with Disciple, that last paragraph was a masterpiece! Stirring is correct.

You should be a writer and a financial adviser, then I’d say you’d met your calling. Oh yeah, you’re both… lucky guy.

#99 a prairie dawg on 01.13.12 at 1:36 am

“Run”

I already did. Stopped watching TV news years ago. Stopped listening to bank employees years ago. Stopped listening to commission based sales people years ago. Don’t blindly trust what a doctor says. I don’t trust anyone anymore. lol Funny thing is, I’m better off for it in many ways.

I read all my news. I read about finances. I read about products/services I need to buy. I read about a medical condition before and after seeing a doctor. You can cross source just about anything these days. Then make up your own mind from a more informed perspective.

Mainstream TV has morphed into a cesspool of BS. From reality shows, to celebutantes, to commercial sales pitches, all the way up to the evening news.

Too many agendas getting in between me and the facts as well. And hearing it eloquently spewed from a photogenic bubblehead on Live at 5, instills no confidence in me at all. Or trust.

But most people don’t want facts. They just want to be entertained.

Run, indeed.

#100 Ok. I'll Bite. on 01.13.12 at 1:40 am

Garth, I take it all back. I think that you are a humanitarian. As for sex and real estate, you’re not the first to point out the connection: http://www.randomhouse.com/boldtype/0700/garber/

#101 Wage Slave on 01.13.12 at 1:43 am

From Retire This
175 Junius on 01.12.12 at 6:42 pm

In response to:

#164 Smoking Man,
Good post. Chris Hedges is one of America’s finest public intellectuals.

You’re right in that Chris Hedges ranks among the very best journalists and intellectuals, but you and SM should stop referencing work that you clearly know nothing about.

Hedges is very vocal in his opposition to values that both of you, and Garth, subscribe to. He’s a social justice advocate and very much against the hoarding of wealth, not to mention his anti-porn stance (that one’s for you, SM). If you listen to enough of his interviews, you’ll even hear him use the word “socialist” a lot, and not as a pejorative.

#102 Ozy - CEO is not a hungry poor soldier on 01.13.12 at 1:45 am

The ceo-cfo folks are fat already, the poor ‘mortgage specialist’ from the branch is hungry like hell, and even if the ceo, vp, etc send a memo to stop lending, they will still do it, they are COMMISSION BASED !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1
Wake-up! The ones that say ‘it always goes up’ have a VESTED INTEREST !!!!!!!!!!!! Call thier bluff and ask them how much do they OWE on real-estate!!!! Their pervliar faces will turn blue… TRY IT next time.

#103 Soylent Green is People on 01.13.12 at 1:52 am

Re #24 Onemorething on 01.12.12 at 10:47 pm

Add RCMP to that list pls

.
.
.

#104 Nina: RE:#32 Fool in the GTA on 01.13.12 at 1:55 am

Reply to #32 Fool in the GTA
Tell your friend my friend was in despair today, gloomy, once learned from realtor could not sell condo in king west willage for more than she paid (or less). agent said there were too many for sale and she needs to wait few more years for appreciation. she did not make any $, but locked 20% of half of million in builders hands since 2008. Now is ready, but can’t sell or rent to be cash positive. Maybe your friend can buy this brend-new lemon-condo?

#105 TheRealTruth on 01.13.12 at 2:02 am

2.99% 5 year rate!

Gut feeling says prices are going to firm up in the near term and expect a strong spring (90 day rate holds). Bodes well for condo sales.

Current owners on Variable are going to switch to 5 year fixed terms. So no need for them to sell for the next 5 years.

Seems like the only thing that will burst this bubble is an external shock that results in sudden job losses. Otherwise, this bubble is not popping anytime soon.

#106 Hoof - Hearted on 01.13.12 at 2:26 am

#90 Nostradamus Le Mad Vlad

” How many Bernie Madoffs would you like to see screwing people out of their money, Dorothy? I’m sure there are plenty around. ”

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

Good point….

I’ll bet there are 1000’s of Wall Street scumbags (redundant) who saw what Corzine did with MF Global and will either trigger their own plans or draft em soon.

Unless that NY Judges ruling sticks (……and that “fines” negotiated as precedent, which amount to wrist slaps/cost of doing crooked biz ……) I can see lots of these Wall Street bandits ripping people off before the window closes.

#107 Bobby on 01.13.12 at 2:27 am

For MarcfromOttawa,

Had a good chuckle with that listing. I’m in the market for a TH or larger condo in Ottawa. Am going to wait until the government brings in their budget outlining the prospective layoffs.
There will be lots for sale then.

#108 TheRealTruth on 01.13.12 at 2:30 am

Crunched some numbers..

A $300,000 townhouse in the Vancouver suburbs.

2.99% 5 year rate. 5% down 25 year Amortization.

Mortgage amount $285,000.

Monthly Payment= $1347 ($660 toward interest)

Balance at end of 5 year =$243,000.

Rents are similar for these types of townhomes (lets say $1347). So by renting instead of buying, you are losing out $41220 over 5 years due to not paying down a principal.

Result: Just to break even, RE must fall by 15% over 5 years. Anything less means you lose money renting. I have ignored property taxes and closing fees as these are outweighed by the intangibles of pride of ownership.

Garth dude, other than a crash…renters are screwed. Those that bought prior to 2008 won the lottery. Gov/Bank policy changes will not allow a crash. Maybe stable prices over the next 5 years mean renters lose big time.

#109 Mike on 01.13.12 at 2:40 am

The flip gone bad that lost 1.1M was posted on vreaa website:
http://vreaa.wordpress.com/2012/01/12/failed-flip-1-1m-loss-in-west-vancouver/
And here are the pictures:
http://www.vopenhouse.ca/video/7884_Rockridge/
Enjoy.

#110 AprilNewwest on 01.13.12 at 2:43 am

People who work for the RE will continue their pumping all the way to the bottom.

#111 truth hammer on 01.13.12 at 2:44 am

Lets not overlook this simple fact….although the real estate market is the sleaziest business in Vancouver since used car lots sprung up along Kingsway……the real whores and developers are not entirely stupid people. What the sales people are telling the developers and the retail sellers after the drop in rates is ‘Raise your asking Prices’. Why….when you say the market is falling? BECAUSE MONTHLY PAYMENT SPREADS WENT DOWN !!!!!!!

The rubes can pay more by the month…so why give them the break that the rate drop provides? Remember what Barnum said….”never give a sucker an even break”.

I predict the rate drop with stabilize prices with an upward bias. Now…..regarding the overseas buyer/flipper who lost a million one. In Vancrapper historically it is always the high end of the market that drops first and fastest. The goofball in the burbs has more skin in the game and is more likely to get a second job and hold out. The wealthy guy…..he can always get more money and risk is a whole ‘nother monkey suit…..he bails…hence the huge price swings in the pricey markets.

#112 Rich Man on 01.13.12 at 2:48 am

the speculation is going to continue.
Chinese new years brings all the HAM money
and the banks have slashed interest rates just for Chinese new years to fuel the HAM speculation
WE DO NOT STAND A CHANCE

#113 High numbers of people listing their property... on 01.13.12 at 3:10 am

Garth, note the numbers… roughly 5000 new properties went on the market in Canada between Jan 10th and 11th, and another 5000 went on between the 11th and the 12th. Remember… just a few days ago my wife and I mentioned that the total was around 175,000. Now it’s 185,000… in just a few days! And, for some odd reason, the mapping source of these numbers… http://www.realtor.ca changed back to its old site name http://www.mls.ca ??

#114 Signpost in the bushes on 01.13.12 at 3:13 am

Roller coaster ride for Linda’s nice bank lady, and anybody else looking for a thrilling ride;

http://www.youtube.com/watch?v=hqOn5XEm86A

#115 right on Villain on 01.13.12 at 3:17 am

there were a few rebuttals of Dorothy’s inane comment, but IMHO you nailed it.

after approx 17 years of people gloating over how smart they have been for buying and flipping RE can’t we have a few years of correction without being scolded by RE pumpers like Dorothy?

looking forward to some sanity being restored to the Canadian housing market. and yeah, it’s gonna sting some folks….I dont recall them sharing their tax-free profits with me though :)

bring it on.

#116 Blacksheep on 01.13.12 at 3:19 am

DonDWest D # 211,

“While having the philosophy of being good, giving, and merciful is divine”

A belief based on faith, is required to be good, giving and merciful?
————————————————————–
Disciple # 202

“Wilful ignorance must be bliss, eh, Blacksheep?”

I’m ignorant, because I don’t believe what you believe?

“Time for you to grow up”

I’m immature, because I don’t believe what you believe?
————————————————————–
Guy1 # 203

“I gather you aren’t a religious or moral person”

So, if one is not religious, one is immoral?
————————————————————–
Anyone see a less than flattering pattern here?

I 100% support anybody’s right to believe what ever they choose. I do not categorize/label people based on their beliefs.

The relevant part of my post # 148 yesterday, is that I
believe we have all been lied to, virtually from birth.

I also believe it’s time to challenge, what we think
we know as “systemic” truths.

I have taught my young adult daughter:
Do not to believe what I believe.
Do your research and form your own opinion.

Thankfully, she is wise beyond her years.

take care,
Blacksheep

#117 Canuck Abroad on 01.13.12 at 3:19 am

7 / Dorothy – I think of it as karma. Snooty preachy people like you with your condescending dismissal of renting as a valid means of paying for shelter will finally get that smug smarmy gloat wiped off your faces.

#118 hollywood3000 on 01.13.12 at 3:30 am

This blog has many comments on the booming Alberta Economy and I beg to differ at present and even question the 5% unemployment rate. Natural gas prices are historically at very low prices sources from edmonton journal mention 1 billion dollars will contribute to govt coffers for2011 compared to approx 8 billion in 2005. Oil tends to be mostly concentrated in the NE part of the province and natural gas has contributed more to coffers in the past. Forestry is still suffering the hangover from 2008. I know several mills remain closed. The beef industry is about 1/2 of the output from Canada but numbers are significantly lower than pre BSE – although prices are good. I like to know where all these jobs are as I know several people are having trouble finding work in all areas of the work areas? Enough said – I definitely don’t see the strength or no where near the strenght in 2005-2007. This could be the reason houses are struggling in Alberta or lack of buying.

#119 Peter Pan on 01.13.12 at 3:40 am

Every media outlet with a poll has to report how many people were interviewed and what the margin of error is “19 times out of twenty”. Yet, real estate gasbags like Phil Soper get to act like “Oracles of Delphi” and proclaim real estate will increase by 2.8% next year, without revealing if they got that number by hiring a Voodoo priest to study chicken entrails.

Sheesh, what a world we live in…

#120 new-era on 01.13.12 at 4:06 am

Garth if there is a 15 to 25 % drop,

We know the banks will be safe.

But what do you think will happen to CMHC?

#121 Back Renting in Victoria on 01.13.12 at 4:15 am

Hi Garth,

I know you have been over this before, but it never seems to sink in. Why would REIT’s be relatively unaffected by a housing correction?

Wouldn’t rents drop as owners try to cover their carrying costs? Wouldn’t the broader economic impact increase commercial vacancy?

I am thinking of putting a small amount of my small portfolio into .XRE.

#122 vultch on 01.13.12 at 4:21 am

#7 dorothy

you’re right, it does seem terrible for me to be wanting something bad to happen to other people for me to benefit from it….BUT…. forget that! i don’t care about what the fallout is from it, i DO WANT PRICES TO GET BACK TO THE NORM! absolutely…100%…and if that means a ton of stupid people are caught with their pants down, then so be it. i have absolutely no sympathy for that at all.

i’m a 35 year old doctor with no debt, and never had since my student loans (paid off a year out of school). i could afford a $600,000 house, but WHY? why the hell would i want a mortgage? i’ve been renting for the past 6 years and saving like a madman. i scrimp and save so i can eventually buy a house with cash, or hopefully a small mortgage. i am in the top 5% of income earners in the country, but i don’t spend like them. i have watched prices go up and up and up, and now i don’t really feel like buying a house. i see people making a third of what i do, buying houses that i would never want to afford. it’s insane!!! 6 years ago in s’toon, a $250,000 house was a very nice house. now it’s a piece of junk on the west side if you’re lucky.

sometimes people need a wake up call…the americans sure did. and they have learned. garth keeps saying we’re stupid to be hoping for a crash…i say no. i get it…it will be bad for so many people, but truthfully, i don’t really have sympathy for those people. no one wants to live with the moral or ethical code of the old days, when you had to earn what you got. now people just want what they see, and will do whatever it takes.

you can blame the banks, you can blame the government, i don’t care…it comes down to people’s decisions. herd mentality. no one held a gun to your head and made you take out a $350,000 mortgage with only 5% down. YOU DID THAT! and if that’s the case, then bite the bullet if things cycle back to the norm. i make close to $250,000 per year. i have a net worth of over $700,000. i have no debt. i have never owned a home. do i want to? hell ya! do i want to handcuff myself to a mortgage and buy a chipboard piece of crap for half a million? NO THANKS!

i will be damn well ready to vultch when the time comes! some of best friends will be hurt. i will not gloat. i will not be emotional about it. it will be business. that’s all. it’s survival of the fittest and smartest in the financial world, just like in the real world. it all comes down to GREED! THINGS don’t make us happy…RELATIONSHIPS and FREEDOM does. hard lessons are going to be learned. it’s really a shame, but it is what it is.

#123 MB on 01.13.12 at 4:29 am

I have been looking for rental condo for the last week, had a great conversation with a prop manager/realtor who showed us a place:

“We’re in a total bubble, everyone knows it, renting is where you want to be, much cheaper, less risk. Good tenants have all the buying/negotiating power, way to many people bough places as ‘investments’ and its difficult to find decent tenants. There are a lot of units on the market and rental prices for great places are dropping, posted rents don’t mean sh**, owners are getting desperate.”

Keep that in mind all you renters! I offered $200/mo less than asking and I’d paint the place to my liking ($300+ in paint and materials). Not only will I get a custom place, but also my rent and future rent increases are based on the decreased rental amount (with a no move-out clause on the lease). The prop manager was pretty confident we’d get the place (Vancouver).

#124 Two-thirds on 01.13.12 at 5:09 am

I postulate two things about the lowering of mortgage rates:

1) It may signal deflation is around the corner

2) It could be interpreted as a transparent attempt to “shield” the 2007 borrowers from having to renew at high(er) rates and (in some cases) owing more than the property is currently worth.

This could be an attempt to engineer a coordinated RE soft-landing in Canada:

1) C leaves rates untouched
2) F modestly increases borrowing requirements for insured mortgages, but,
3) The banks lower rates, to soften the pain/not derail the market

If 2) is announced with the next federal budget, watch F give 3-6 months for sheeple to rush to:

a) buy now, or risk becoming ineligible for a CMHC-insured mortgage after the deadline
b) renew 2007 mortgages at a low rate (and longer ammortisation, perhaps)
c) borrow heavily from their HELOC to beat any changes
d) make changes to their spending habits (hopefully)

So, 2012 may end up being another 2011 – no substantial RE correction.

The real interesting times may thus be pushed to 2013, when:

1) The US election is out of the way
2) The Euro is no longer the main issue (war perhaps?)
3) It becomes obvious to the masses we are in deep do-do

Extend and pretend, ad infinitum. That’s the name of the game.

Stay liquid and avoid debt, fellow bears.

#125 futureexpatriate on 01.13.12 at 5:19 am

Possibly good news. Escalation, WWIII, Armageddon postponed. Saner heads prevail.

a href=”http://www.zerohedge.com/news/west-blinks-iran-embargo-likely-be-delayed-six-months”/a

#126 futureexpatriate on 01.13.12 at 5:22 am

Right link, sorry:

http://www.zerohedge.com/news/west-blinks-iran-embargo-likely-be-delayed-six-months

#127 Onemorething on 01.13.12 at 5:39 am

I believe that will be the last we hear of Dorothy!

#128 Opportunity on 01.13.12 at 5:47 am

What if we start a class action law suit against the real estate boards, real estate companies and financial institutions for misleading information and representation.

#129 I'm stupid on 01.13.12 at 6:27 am

Garth, your referring to the piece of crap that was on cp24 yesterday. I got a text message from a friend, who bought a home 2 months ago, bragging that he’s a genius and I’m an idiot. I replied with links from 2005 saying US home prices will go up in 2006. I told him to always believe those who stand to profit from the home market. I guess the cool aid tastes great right now.

#130 JohnInJimsRiding on 01.13.12 at 6:49 am

It appears worse than you think Garth. Whitby is really your ground zero for real-estate. I could give you a lovely tour of a town where nothing sells yet people are fully convinced prices only go up. The latest example (of 20 I could easily recall right now) is a house not 4 down from me that was on the market from March 1 to Dec 31. Two reductions, 4 open houses with their neighbour confirming to me that NO ONE CAME. One showing the whole time, no offers. Not to brag but this is a very nice area. Last listing was $459,000. Surprise! As of yesterday its back on the market for $468,500. Total disconnect.

If you need a “case study” that doesn’t include T,V, or C, then look to Whitby. It will show you the real market.

#131 Demosthenes on 01.13.12 at 7:47 am

Look at how much money is being made by every Canadian bank right now. They’re making a billion per quarter and they’re doing it on the backs of Canadians.

Housing prices are easy to call out for being silly, but much of that relates back to the first paragraph. Foreign investors have really raked us over the coals. Up up up. That’s what they thought and for a time they were right. However, they completely priced themselves out of the market. Wages have hardly moved in the last 30 years, meanwhile cost of living certainly hasn’t remained stagnant. Education costs are a huge issue and a growing concern as they’re a very large portion of that growing Canadian debt. Additionally when you have people investing thousands in education that then nets the graduate a minimum wage job that’s a pretty big problem, ESPECIALLY when this “educated” individual doesn’t have the skills or sense to think critically and call anything out. No instead this educated individual has just spent 4 years being indoctrinated into becoming a lemming. From their first day in the classroom students are told they need more education. That education = income. Education = homes cars etc etc. But how many “educated” people are stuck in minimum wage jobs?

Some numbers…
According to StatsCan the “economic family” income was $53,000 in 1976. In 2007 the income has risen to $61,800. In 1978 my dad bought a loaded Pontiac Grand Am for $9000. In 2007 that car would have cost $50,000.
According to http://vancouverrealestatelink.ca/2011/10/24/british-columbia-sees-average-income-decrease-housing-rates-soar/
From 76-10 incomes were actually down 6% while house prices were up from $202,000 to $505,000 – 150% increase. The Canadian average is up half that from $192,000 to $340,000.
In neither case are wages up that much tho it would be nice for the average wage to be 6-figures.

#132 T.O. Bubble Boy on 01.13.12 at 8:03 am

Dear BPOE,

Please explain how interest rates will be “lowered for decades to come”.

If a 5-yr mortgage is at 2.99% today, and the Bank of Canada rate is 1%, I’d really like to know how these can be lowered for decades… Maybe a 0.25% drop every 10 years? Mark Carney might as well give his job to a boulder.

#133 neo on 01.13.12 at 8:29 am

Hey Garth,

The “responsible” part you left out about BMO is they are forcing people who accept the 2.99% 5 yr to also take on a 25 yr amortization. See, they are looking out for our best interest. (eyes rolling)

Here is the truth, people have become desensitized to the low rates. They are just accepted now and don’t move the needle like they onced did. What isn’t being accepted now is the sticker price. People are finally starting to balk at it and not JUST focus on the monthly payments. Internally banks are seeing this and as a last gasp they are lowering rates to snag whatever “greater fools” are left.

#134 45north on 01.13.12 at 8:48 am

Linda talking about house prices: And I replied, well until they go down.

you see Dorothy, it’s binary (binary is what the computer does – it’s either 1 or 0 ) so either the market always goes up or it doesn’t. It’s a psychology thing.

You know, for the last year I’ve been getting these calls “if you need help with your debt, we can help you”. There are a lot of people in serious debt.

Nortel moment

#135 The Dividend Yield Investor on 01.13.12 at 8:52 am

#33 GTA Girl

Young girl thinking of flipping her condo at age 23.

As the late John Templeton stated his maxims of buying during the “point of maximum pessimism” and selling during the “point of maximum optimism”. These and other signs are what we look for when major markets or industries are a buy or sell. During the top of the USA real estate there were 223 T.V. shows dedicated to real estate. How many are there in Canada?

Maximum pessimism will not be reached in the USA or Canada for quite a few years [around 10 yrs.] with the Baby Boom generation needing monies to retire, down size to a smaller house or move into an apartment.

Those moving into an apartment will take housing units onto the market with a demographic baby bust. After the initial RE crash, there will be a short term upside pop, promoted by the speculators and a scramble by the government to pump up and re-inflate the bubble.

The three levels of governments in Canada and USA have and had become addicted to the easy revenues generated by this housing madness. They won’t let this bubble deflate with out fight. The politics will be of massive government money pump priming and finger pointing.

Governments may huff and puff all they want, after the crash and that brief upside pop, the true market will turn based on affordability and demographic buying power. The housing market will sag and go flat for years.

The “point of maximum pessimism” will be reach when there is very little media exposure [print, TV, internet, seminars etc.] about making money in RE, AND most importantly the public believes that it is impossible to make money in RE.

The mantra will move from “RE only goes up” “to you only lose money.” Don’t think this won’t happen, the demographic baby bust is the 800 pound gorilla. This will push RE BELOW historical norms of price to income; the upcoming Z generation will unknowingly make out like bandits.

Quick Note on the “Retire This” post.

The lack of proper funding programs for retirement, here in the USA and Canada, will end up being nothing more than a NATIONAL DISGRACE!!!

The Dividend Yield Investor
Atlanta G.A.

#136 Frank on 01.13.12 at 8:53 am

#7 Dorothy

I totally agree with you. I do not think many people understand the consequences of an RE collapse. I do not believe there will be no collapse only a correction. If someone had bought 4 yrs ago they would be able to withstand a 15-25% correction.

#137 nickolaos vlittas on 01.13.12 at 8:59 am

Garth, since you’ve been giving us Canadians and others, great advice over the years, may I return the favour? Thanks.

Three things:

1. Get that guy Investors, Friend (Shawn Allen) off your website! That guy is riding your coat tails. I googled his handle, and, um, interesting.

2. Think about running for Prime Minister, gawd damnit! Really. It would an epic battle between two Canadian titans! Like the end scene, in the last of the Lord of the Rings trilogy, Return of the King. You could be Frodo. You’d go down in Canadian History as The little Ross Perot That Could. Seriously, think about running for PM.

3. Be Grateful.

You’re Welcome.

Good day, sir!

#138 Ben on 01.13.12 at 9:09 am

The banks need you to borrow, the interest rate is low so they have to lend lot’s of money to make money.

#139 DUI on Money Road on 01.13.12 at 9:10 am

One of Michael Moore’s movies has a clip of when a law changed in the United States that abandoned the requirement for balanced, two-sided reporting. I forget the name of the movie but it was a monumental (essentially unreported) event.

News is no longer news — it’s political, one-sided opinion pieces.

In science ‘news’ would be called ‘biased’, ‘full of conjecture and speculation’, ‘non-peer reviewed’.

It’s time to teach the masses how to be critical thinkers.

#140 AM on 01.13.12 at 9:26 am

#107 TheRealTruth on 01.13.12 at 2:30 am
Crunched some numbers..

A $300,000 townhouse in the Vancouver suburbs.

2.99% 5 year rate. 5% down 25 year Amortization.

Mortgage amount $285,000.

Monthly Payment= $1347 ($660 toward interest)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

What? No taxes, maintenance or strata fees?
Oooops! There goes that theory.

He did not add in closing costs or CHMC insurance. — Garth

#141 Ronaldo on 01.13.12 at 9:38 am

#121 Vultch – very good post. My thoughts exactly. Sorry Dorothy.

#142 Gotthardbahn on 01.13.12 at 9:42 am

‘…since house prices always go up…’

That was the single most retarded remark to come out of the US housing bubble five, six years ago. I really oughtn’t to be surprised hearing it in the True North. Lambs to the slaughter.

#143 Sky on 01.13.12 at 9:55 am

@ Wage Slave ( # 101 ) :

Did you catch this lengthy, compelling interview with Chris Hedges – ” “Brace Yourself! The American Empire Is Over & The Descent Is Going To Be Horrifying!” ?

http://www.youtube.com/watch?v=7zotYU21qcU&feature=player_embedded

@ approx 2:03 Hedges talks about his upcoming court date after his arrest in front of Goldman Sachs with the Occupy movement

@ approx 2:08 = the pornification of our culture and the brutality of the gonzo porn industry that renders its victims ripped up , torn open, on drugs and suffering from PTSD.

Even though I don’t agree 100 % with everything Hedges says, the man positively REEKS of integrity. And integrity is a rare, rare quality these days.

That interview is a jewel amid the stinking dung heap of lies and corruption that passes for media nowadays.

#144 eaglebay - Parksville on 01.13.12 at 9:59 am

#111 Rich Man on 01.13.12 at 2:48 am

The Chinese buyers do not borrow from Canadian banks.
For the few Chinese buyers that there are, they pay cash.

#145 Crash Callaway on 01.13.12 at 10:10 am

Home Ownership is a cult.
They wine & dine you as they brainwash and enslave you.

#146 Waterloo Resident on 01.13.12 at 10:13 am

Linda said: “( [email protected] (I’ve wanted to use that moniker for a while…)”

What the HELL does [email protected] refer to ?

#147 eaglebay - Parksville on 01.13.12 at 10:14 am

#117 hollywood3000 on 01.13.12 at 3:30 am

You’re right.
If you exclude the oil sands, natural gas is 80% of the oil and gas produced in Alberta.
Natural gas prices are extremely low and more is discovered almost every day.
Not a good time to invest in natural gas.

#148 Crash Callaway on 01.13.12 at 10:16 am

And just when you tell them that you won’t bend over for them anymore, your bank whips out a book full of glossy pictures with all kinds of new positions for you to assume.

#149 Bond junkie on 01.13.12 at 10:16 am

I’ll say it before and I’ll say it again, there is no correction coming in 2012. Even if prices ARE down 10-15%, who freaking CARES. seriously, who cares?? That’s barely enough to cover T-costs when you eventually cover your short (buy back in). You all blindly criticize the love affair with real estate in this country yet you fail to recognize the plain and simple fact that at the margin, you guys are ALL BUYERS. Every single last one of you who is cheerleading the ride down to the bottom is just as obsessed as those who are infinitely bullish on the same asset class. You can’t wait for it to collapse just to eventually get a piece of the action. Yeah sure, that townhouse in Cobourg or Squamish that’s up 50-60% from its previous list, of course that’s going down because its current value is completely out of line with economic fundamentals. Anyone on this blog actually do any research? If so inclined, have a look at what debt to disposable income levels are at in Denmark, Sweden, Switzerland, Norway, and Singapore. I’ll give you a hint, they’re well above and in some cases double the levels in this country and, you guessed it, no RE crisis there. Apart from being a geopolitical safe haven, these nations have little else to offer besides good skiing, beaches, and in some cases crude exports. And you guys knock Canada because ‘all we have’ is the oil sands, wheat, an utter abundance of land and fresh water, and a stable democracy. Silly Rabbits. 5y fix is currently at 3% and going lower people. The refi trade is well in play, any selling will be easily absorbed by the masses for the reasons highlighted above.

#150 R2D2 on 01.13.12 at 10:16 am

When I think of Shameless O’Flairity and the ‘Zero down, 40-year mortgage’ the tears run down my legs.

http://www.youtube.com/watch?v=N7EFv2eypoY&feature=related

Shameless missed ALL his practice shots.

https://www.artizans.com/images/previews/MAC1761.pvw.jpg

Now Shameless is promoting DOWNLOADING of the CHT shortfall of $31 Billion hoping NONE OF US will recall the GST consumption tax cut from 7% to 5%.

Due to demographics Shameless indicated OAS will be burdensome in the coming years. I guess he wants us to forget the confrontation between Mme Solange and the Last Great Emperor, Byron of Muldoon, Ka-Ching Ka-Ching Dynasty.

As I said, some days the tears running down my legs approach waterfall levels. The wife says I should either ( 1 ) get Hydro to take a look for feasibility or ( 2 ) price out a catheter, bottle and pedestal. I’m going to opt for #2 and attend one of the upcoming Shameless ‘gospel’ meetings.

Under the adage ‘you are what you eat’ nobody I know wants to ever break bread with Shameless.

ta-ta for now

#151 InvestorsFriend (Shawn Allen) on 01.13.12 at 10:17 am

GET ME OFF?

Number 136 nickolaos vlittas says:

1. Get that guy Investors, Friend (Shawn Allen) off your website! That guy is riding your coat tails. I googled his handle, and, um, interesting.

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

Nicholas, Garth is welcome to ban me if he wishes. Personally, I think I add value to this blog. Basically I enjoy the commentary, especially I enjoy baiting some of the wackos from time to time.

Garth allows us to enter a link in our “handles” and I do that. I also have a prominent link on my site back to Garth’s.

As a result I do garner a bit of traffic from this Site. However given the attitudes and apparent lack of intelligence (and most certainly lack of investable money) of the majority of those who post here, it’s not clear how valuabe that traffic is.

Hopefully I do get some traffic from the silent people who read here but seldom or never post.

As far as your comments about my site being “um, interesting” why don’t you elaborate? Do you have something against an investment site of the highest integrity?

“However given the attitudes and apparent lack of intelligence (and most certainly lack of investable money) of the majority of those who post here, it’s not clear how valuabe that traffic is.” Well, with that demeaning and insulting statement you have just ensured you’ll no longer have to worry about the quality of ‘leads’ coming from this site. Adios. — Garth

#152 Ronaldo on 01.13.12 at 10:19 am

#21 – CITY SLICKER – “Well here is more heavy insider selling by RBC. One exec unloading $14 million. And the CEO another $12 million.
Maybe this could affect the Royal and they know it:”

Back in February of 2009 when bank stocks hit their lows, the CEO was putting his bonus into his own banks stock while his [email protected] was urging my wife to put her $5000 in her newly opened TFSA account into GIC’s at somewhere around 1% because she told her that mutual funds were too risky.

She went to another bank and the [email protected] wanted her to sign a form releasing them of liability if she invested in those “risky” funds. She ended up buying RBC shares at around $26.00 from another bank after opening up a direct trading account.

They’ve more than doubled since. Kinda tells you something don’t it.

P.S. Why wouldn’t the CEO sell and pocket a cool 6 or so million for doing what the rest of us should have been doing instead of panicking and selling out at the wrong time. Follow the money.

#153 Cookie Monster burnin' Kus on 01.13.12 at 10:20 am

So, if one is not religious, one is immoral?
————————————————————–
Anyone see a less than flattering pattern here?

I 100% support anybody’s right to believe what ever they choose. I do not categorize/label people based on their beliefs.
——–
I do, I label people who are highly religious as suffering from a form of mental illness, they are delusional. People who are only moderately religious I consider go-along-to-get-along likely since they were children.

I consider parents who indoctrinate their children heavily into any religious belief as doing great damage to their children’s minds and world views / concepts of reality that will in turn put them at a disadvantage starting out in life by creating serious logical obstacles that are best to overcome.

I support tolerance for the sake of individual rights to believe anything one chooses, but it’s tolerance none the less, we should not endorse it.

And to think that religion should be tolerated and by doing so it causes nobody any harm is wrong, look at all the wars and tensions in the middle east and look at all the religious beliefs on both sides of the battles and then justify tolerance for so much stupidity based on mystical beliefs and delusion. The problem with tolerance on a national level by national leaders is it leads to bad logic in the name of some crazy religious beliefs. In the hands of power religious beliefs can result in seriously evil deeds and dangerously irrational justifications on both sides.

It’s bad stuff that should be tolerated only to a point where secular people should never bite their tongues whenever given a chance to argue against it arises.

Rest in peace Christopher Hitchens.

#154 eaglebay - Parksville on 01.13.12 at 10:29 am

Retirement Planning
  
If  you had purchased $1,000.00 of Nortel stock one year ago, it would now be worth $49.00.
   
With Enron, you would have had $16.50 left of the original $1,000.00.

With WorldCom, you would have had less than $5.00 left.
    
If you had purchased $1,000 of Delta Air Lines stock, you would have $49.00  left.

But,  if you had purchased $1,000.00 worth of wine one year ago, drunk all the wine, then turned in the bottles for the recycling REFUND, you would  have had $214.00.

Based  on the above, the best current investment advice is to drink heavily and recycle.
   

#155 R2D2 on 01.13.12 at 10:36 am

#152Cookie Monster burnin’ Kus on 01.13.12 at 10:20 am

Rest in peace Christopher Hitchens

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

Does anyone here have Chuckie McVety’s phone # ( ? )

#156 Sky on 01.13.12 at 10:39 am

Cookie Monster – I don’t have a quarrel with atheists in general. I just wish they’d get their belief system straight. When a writer of Hitchen’s calibre uses the word ” satanic ” as an adjective to describe evil…. well you just have to give your head a shake.

Here they are arguing against the existence of god and then , at the same time, making a reference to the prince of darkness himself- satan. HAHAHA!

#157 Junius on 01.13.12 at 10:40 am

#143 Sky,

Thanks for posting this link with Chris Hedges. I watched this a week ago and was very impressed with him. I had read one of this books (Desth of the Liberal Class) and thought it was excellent.

People throw words like “liberalism” “socialism” and “conservatism” around with no understanding.

Hedges most important incite on the current financial collapse, occupy wall street and our current situation is that the RADICALS ARE THOSE IN CHARGE. Those who oppose them want a return to law, order and our traditional values.

#158 Randy on 01.13.12 at 10:41 am

We have always been at least 5 years behind what happens to the U.S…….Australia is in the same boat….

#159 HC on 01.13.12 at 10:52 am

Garth, you said it right, the stats and analysis mean jack, its just about emotion. There SHOULD be a correction, the graphs and charts are crystal clear, but I don’t think there will be.
You can predict and berate the fools all you want, but until their is a catalyst, nothing looks like its going to change. Money is too cheap. I think that a 2.8% increase is a good bet, I wouldn’t take the under without great odds.
Maybe 2013 will be different, but I don’t think 2012 will be. Right now its the start of winter (in TO at least) after the Christmas Climax, who the hell is buying residential real estate with VISA knocking down their door? R/E is obviously seasonal, the Van/TO markets will be on fire again come April and the doom and gloomers will not be able to pull from their archives and say I Told You So….yet.
I know you have said a 15% decline (total, not annual) in CAN, what would be your % decline estimate for 2012? Too direct a question ;)?

#160 Jimbo on 01.13.12 at 10:54 am

A lot of similar signs between the Ireland property bubble collapse and what’s taking place currently in Canada.

http://en.m.wikipedia.org/wiki/Irish_property_bubble

#161 Alistair McLaughlin on 01.13.12 at 10:57 am

@ #7 Dorothy, a real estate bubble causes hardship for many as well, by making homes unaffordable. I’m sorry, but my sympathy will be non-existent for anyone hurt by a housing crash. Each and every buyer helped push the prices just a little bit higher. Each and every financial idiot who paid for a vacation or new car with a HELOC (I work with several such people) helped fuel the madness. Millions of Canadians set themselves up for disaster, despite numerous warnings.

Yes, they’re being misinformed. But the truth is, they want to believe the bank when they’re told the mortgage is affordable. They want to believe the RE agent who tells them “housing always goes up in the long term”. They want to believe their parents when they’re told that “your home is an investment.” And they want to believe their friends when they say, “you’re just throwing your money away on rent.”

Why do they want to believe this? Because they’re greedy. Covetous. Because real estate holds the promise of easy money. Of tax free capital gains. Because all their friends are buying nice houses and taking vacations paid for with home equity loans. Because a big new McMansion in the burbs exudes status, wealth, success, and conformity. Even if 95% of the value is owed to the bank; that status is not hurt by this little fact in the slightest.

And despite the scenario that played out in the US, they’ve spent the past four years continuing to line up for slaughter. That’s how irrational their greed has become. Cry me a river.

#162 Sky on 01.13.12 at 11:07 am

Junius # 157 – The self-serving radicals are indeed in charge.

Hedges is part of a very small, marginalized and rapidly vanishing number of people called the intelligentsia. Once the intelligentsia is totally silenced, then you can kiss what remains of our culture buh-bye.

Hedges doesn’t just talk the talk. He walks the walk. His opposition to the Iraq War cost him his job with the New York Times. Integrity!

#163 The American on 01.13.12 at 11:08 am

57thBPOE, name one prediction where i have been wrong. I dare you to do it. I’m going to release some fun little statistics for the readers of this blog, and hell, why not… how about the readers of the Vancouver Sun :-)

#164 Spiltbongwater on 01.13.12 at 11:09 am

#146Waterloo Resident on 01.13.12 at 10:13 am

http://lmgtfy.com/?q=tnl%40tb

#165 Wage Slave on 01.13.12 at 11:10 am

@143 Sky on 01.13.12 at 9:55 am:

Thanks for the link, Sky, I have seen the C-Span interview and it is excellent. I don’t agree with everything he says either (mostly regarding his stance against atheists) but he seems to have the most informed, realistic, and frank ideas on what is in store for the US, and he has the credentials and INTEGRITY to back them up. And he does it without subscribing to what he calls “magical thinking”, which has always bothered me when other people use and rely on it.

This interview has made me newly aware of Cornell West, and I’m trying to find a good primer on him; if there are any interviews or articles you can recommend, I’d love to hear it.

#166 The American on 01.13.12 at 11:15 am

At #132: TO Bubble Boy said it the best. Rates are basically as low as they can go. 57thBPOE claims rates will be lowered for “decades to come.” I spit out my morning coffee with such rubbish. Rates CAN’T be “lowered for decades to come” unless they are steadily dropped by mere margins of a tenth of a percentage point. The BOC rate is already at 1%. Please explan, 57thBPOE, how you anticipate rates can be lowered over and over again “for decades to come.” Geeeeesh. What an IDIOT!

HyPATHETICALLY (twist on words for 57thBPOE), let’s say rates do stay artificially compressed for “decades to come.” All this means is the significant devaluation of the Canadian Dollar. It means the CAD isn’t worth as much as what current exchange rates provide. If rates stayed where they are today for “decades to come,” watch for a 35% devaluation of the currency. Either way, Canada’s screwed for a long, LONG time.

#167 Bobby on 01.13.12 at 11:15 am

For #149, Bond Junkie,
From your post, it is evident that you have never been out of the country, perhaps out of the province.
Your rant suggests perhaps you just got your realtor license and haven’t made a sale.

#168 C on 01.13.12 at 11:19 am

From MLS, listings for:

-Burlington, Ontario
-Price $400,000 to $550,000
-House
-Detached
-2 or more bedrooms
-2 or more bathrooms

January 5th, 2012 384
6th 387
7th 392
10th 402
11th 407
13th 420

Maybe people are trying to list before everyone else lists in the spring?

#169 Kris on 01.13.12 at 11:24 am

Re: #149 Bond Junkie.

Garth, of all posts today, #149 deserves your comment – We hear such reasons repeatedly, and they’re representative of public sentiment that’s been fuelling our housing market.

Prices revert to the mean. If you believe we have suspended the laws of economics, embrace such a comment. In the sweep of time it will be seen as inconsequential and flawed. — Garth

#170 Kris on 01.13.12 at 11:38 am

#168 C.
I’m using similar filters as you.. SFHs in the Orchard & Millcroft. I don’t see FORSALE signs mushrooming on the streets. Do you know what area(s) of town your numbers refer to?

#171 Devil's Advocate on 01.13.12 at 11:38 am

RE: Yesterdays sideline discussions on Morality and Ethics

“This is why Garth’s blog is vital and his stand inherently moral.” – #203Guy1 on 01.12.12 at 10:59 pm

Are you really quite sure? Are you absolutely positive there is no hidden agenda no matter how passive in Garths development and maintenance of this blogsite?

None of us do anything without expectation of reward of some description. You may be a very religious person who does such good humanitarian deeds because you believe it will lead you to a better afterlife. That is your reward – but not so much in present day that it will lead you to that better afterlife but for the mere present expectation that it will which today eases your mind giving you comfortable reassurance. Really, what is confession for?

Ultimately we all act as we do for selfish reasons – if only that giving makes us feel good for the moment. I am not saying there is no compassion. If you truly care about someone you could not bear to see them suffer it would break your heart and anyone who has endured a broken heart knows it is to be avoided at most cost. To keep some other person safe from suffering is not entirely a selfless act as were you to witness their suffering it would cause you great discomfort that would be worth something for you to avoid.

If I saw someone crash their car into a lake and sink ten feet below the surface I would probably do everything humanly possible to save them. I carry tools in my car just in case of such an emergency. But why would I do it. Simply because I know if I didn’t I couldn’t live with myself thereafter. Hence as much as one might think I was a hero I really would be doing it for myself to a large degree for I don’t think I could live with myself had I not.

Don’t tell me anyone does anything for anyone else without some serious due consideration of themselves. Even if that consideration takes place in the blink of an eye – that it most often does should tell you something . Trust me there is ALWAYS something in it for the do-gooder. While they may not be immediately cognitive of it if they give it some serious consideration they will come to realize, at some level, they, ultimately, do it for themselves. There is always a motivating reason from within them.

#7Dorothy on 01.12.12 at 10:17 pm
Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?

Yes and it is they who so often preach such humanitarianism as they did the other day.

#172 J. Robbins on 01.13.12 at 11:40 am

Garth,

Enjoy your tireless efforts. Don’t usually comment but I have one beef with your characterizing A banks “stress testing”, particularly wrt a 25% drop in prices as a evidence/validation of your views. I’d expect you to know that stress testing (which includes the testing of extremely adverse conditions e.g a 25% drop in house prices) is done by all financial institutions and is in fact required by OSFI. You have enough valid points to back up your positions without mischaracterizing this one.

P.S just looking at for you as it is stuff like this that can be cherry picked to discredit people like yourself.

Cheers

It is not routine for a CEO to publicize the procedure. It is interesting to speculate why he did so. — Garth

#173 renting and waiting on 01.13.12 at 11:44 am

it’s driving me a little mad to look at MLS and see houses sitting there month after month after month with no price reductions and even a few that go off the market for a while and then come back on at a higher price.

At the same time the number of new builds.. empty or (my fave) sketches of those yet to be built… multiplies daily. And at astronomical prices! No one seems to even attempt to be competitive. I know this city like the back of my hand, and I know there aren’t enough well paid jobs here to support this number of homes priced at over $375,000.

The only ‘competitive’ move I’m seeing is for RE agents to list the ***EXTRAS*** and these are hilarious: building materials in garage, window coverings and.. wait for it… clotheslines!!!!!

*sigh* please please please let me find a quiet, comfortable place soon. My husband is about to get a work from home job (his dream position) and I already work from here. in a two bed apartment. This thing has got to give already. :(

#174 Devil's Advocate on 01.13.12 at 11:49 am

RE: Yesterdays sideline discussions on Morality and Ethics

“This is why Garth’s blog is vital and his stand inherently moral.” – #203Guy1 on 01.12.12 at 10:59 pm

Are you really quite sure? Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?

None of us do anything without expectation of reward of some description. You may be a very religious person who does such good humanitarian deeds because you believe it will lead you to a better afterlife. That is your reward – but not so much in present day that it will lead you to that better afterlife but for the mere present expectation that it will which today eases your mind giving you comfortable reassurance. Really, what is “confession” for?

Ultimately we all act as we do for selfish reasons – if only that giving makes us feel good for the moment. I am not saying there is no compassion. If you truly care about someone you could not bear to see them suffer as it would break your heart and anyone who has endured a broken heart knows it is to be avoided at most all cost. To keep another safe from suffering is not an entirely selfless act as were you to witness their suffering it would probably cause you great discomfort that would be worth something for you to avoid. What price are you prepared to pay to avoid that discomfort yourself?

If I saw someone crash their car into a lake and sink ten feet below the surface I would probably do everything humanly possible to save them. I carry tools in my car just in case of such an emergency. But why would I do it. Simply because I know that if I didn’t I would not be able to live with myself thereafter. Hence, as much as one might think I was a hero, I really would be doing it for myself to a large degree knowing I could not endure the guilt if I did not.

Don’t tell me anyone does anything for anyone else without some serious due consideration of themselves. Even if that consideration takes place in the blink of an eye – that it most often it does should tell you something . Trust me there is ALWAYS something in it for the” do-gooder”. While they may not be immediately cognitive of it if they give it some serious consideration they will come to realize, at some level, they, ultimately, do it for themselves. There is always a motivating force driving them from within – their motivation. To deny it is hypocrisy.

#7Dorothy on 01.12.12 at 10:17 pm
Given the kind of heartache and trouble a huge real estate correction would cause to so many people, it’s really disheartening to see so many of your bloggers positively salivating at the thought.

What is wrong with you people?

Yes and it is they who so often preach such humanitarianism as they did the other day. Hypocrisy.

#175 live within your means on 01.13.12 at 11:52 am

“However given the attitudes and apparent lack of intelligence (and most certainly lack of investable money) of the majority of those who post here, it’s not clear how valuabe that traffic is.” Well, with that demeaning and insulting statement you have just ensured you’ll no longer have to worry about the quality of ‘leads’ coming from this site. Adios. — Garth

…………

As always, a great retort.

#176 Alistair McLaughlin on 01.13.12 at 12:04 pm

@108 TheRealTruth, now include property taxes, maintenance or condo fees, insurance, and CMHC fees (if less than 20% down) to your figures. Now include the down payment, and the lost potential return on investment for that money.

These are real costs; they are in no way offset by the “intangibles” (intangibles????) of owning a home. Hiding behind “intangibles” (intangibles????) to mask the true costs of ownership is either foolish or dishonest. Don’t tell people to “crunch the numbers” unless you’re willing to crunch them yourself. Conversely, you could consider a career in real estate. If you haven’t already.

I live in a town home worth about $300,000. I’ve crunched the numbers. If I were to buy it, I’d be paying an extra $900 per month after all those extra costs were considered. That’s $10,800 each year. Perhaps that came down by $50 or so per month after the latest mortgage rate decrease. And I haven’t included the down payment, or the loss of investment return (opportunity cost) on that down payment, or RE fees. We’ll just call those “intangibles”.

#177 J. Robbins on 01.13.12 at 12:15 pm

Re: 172

Touché. Good point – I overlooked that perspective.

#178 Aussie Roy on 01.13.12 at 12:21 pm

Aussie Update

House prices ‘slump’ in key Murray-Darling basin towns

http://theage.domain.com.au/real-estate-news/house-prices-slump-in-key-murraydarling–basin-towns-20120112-1pw1a.html

Official figures masking massive job woes

http://www.news.com.au/business/two-million-austrailans-looking-for-more-work/story-e6frfm1i-1226243279976

Aussie’s no. 1 RE spruiker questions Steve Keens motives?.

Recognising that having a personal corporate sponsor might be perceived as undermining his academic integrity, Steve explains, “I am aware of the danger of letting commercial sponsorship alter one’s message, and I want to make it clear that I will not let that happen to me.”

http://christopherjoye.blogspot.com/2012/01/steve-keen-solicits-corporate.html

China

China endured its third straight month of capital outflows in December as a slowing domestic economy and mounting global uncertainties led some investors to withdraw speculative funds.

China’s central bank and commercial banks sold a net 100.3 billion yuan ($15 billion) in December in foreign exchange in December, Reuters calculation based on official data showed.

http://www.theage.com.au/business/world-business/china-posts-third-consecutive-month-of-outflows-20120113-1pyq1.html#ixzz1jM6SbhPA

China Enters The Danger Zone, SocGen Presents The Four Critical Themes

http://www.zerohedge.com/news/china-enters-danger-zone-socgen-presents-four-critical-themes

#179 Tom from Mississauga on 01.13.12 at 12:22 pm

So if I had a 3.5% mortgage on my condo with BMO should I blend and extend with the 2.99% to invest in financial assets?

#180 Smoking Man on 01.13.12 at 12:25 pm

#139 DUI on Money Road on 01.13.12 at 9:10 am
It’s time to teach the masses how to be critical thinkers.
……………………………………………………………………………………………..

There are plenty of critical thinkers around, but they are not called critical thinkers, they are branded Conspiracy Theorists. =BAD
See how the machine works, they have large populations of dumb down people who swallow every time, they even buy real estate in markets like this.
They were made that way by school. Goal in that environment is to please the master (Teacher) and obey his/hers authority. After 12 to 18 years of this the individual is fk-d and void of all Critical Thinking.
Marks have two purposes, establish position on the hierarchy and control of behaviour. If you invest 50K in an education you have something to lose if you get out of line.

#181 TaxHaven on 01.13.12 at 12:26 pm

2.99%

Print, print, print…

What happens to “money” when it gets sooooo cheap that as mere “currency” it risks replacing firewood?

I fail to see how this can’t end in raging price inflation for food & energy…

#182 maxx on 01.13.12 at 12:26 pm

Bean counters and bean counter wannabees both in and out of government have this persistent wet-dream of “saving” the economy through continuous spurring of consumer RE spending. Some of these little hopefuls in suits will soon be relieved of another fantasy: that, in the global landscape, the little guy in the red-and-white beanie with the maple leaf is somehow “special” and will succeed in skirting the mess that the rest of the world is sinking in and will do for years to come.
Banks do get it. They aren’t in the business of “helping” anyone but themselves. They will kick the proverbial cat for all it’s worth. They are smart and can easily analyze risk down to the penny. The average consumer cannot. Banks, money lenders of various stripes and RE cartels thrive beyond balance because government allows them to, at taxpayer expense.
Healthy economies are comprised of spending from many different sources of investment income and not from debt, debt and more debt. This is what beanie kid doesn’t get- yet.

#183 Smoking Man on 01.13.12 at 12:37 pm

#101 Wage Slave on 01.13.12 at 1:43 am
#164 Smoking Man,
Good post. Chris Hedges is one of America’s finest public intellectuals. You’re right in that Chris Hedges ranks among the very best journalists and intellectuals, but you and SM should stop referencing work that you clearly know nothing about.
…………………………………………………………………………………………..
Slave who the hell are you to tell me not to reference his work. Obviously you missed his point completely, you have categorically branded GarthO and yours truly into the left right pyridine, A tool created by your masters to control you and the slaves fight each other over frivolous issues while they steel your wealth .
I can’t speak for Garth but my ideas come from all segments of the right and left and middle and top and bottom, and inside and outerspace.
Time to Read his stuff again with an open mind, slave.

#184 live within your means on 01.13.12 at 12:41 pm

#155 R2D2 on 01.13.12 at 10:36 am
#152Cookie Monster burnin’ Kus on 01.13.12 at 10:20 am

Rest in peace Christopher Hitchens

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

Does anyone here have Chuckie McVety’s phone # ( ? )

…………………

I love Rachel Maddow.

Don’t you just love all these hypocritical, fanatic, religious nuts.

Can’t recall whether I mentioned this on Garth’s current blog, but growing up in the 50’s we lived in a small town in the Laurentians for 2 years. Mom (an Anglican) forced us to go to church & attend Sunday school. Dad (raised as a Lutheran) would never go. Church was all about who wore the nicest hat, etc. Mom had a ‘confirmation’ dress made for me when I was 10. I did not want to attend Sunday school nor be ‘confirmed’. On the steps of the church on my confirmation day, I swore at my Mom for forcing me to be confirmed. She was so concerned others had heard me. Two years later when we moved to Mtl. Mom stopped going to church. It was really about ‘fitting in’ with the ‘small town’ mentality at that time & I considered her a hyprocite too at the time. As I understand the term, I’m an agnostic atheist.

And now we have this bloated PMO creating an Office of Religious Freedom at taxpayer’s expense to appease their base supporters. What a sham.

#185 maxx on 01.13.12 at 12:46 pm

#31 Jsan on 01.12.12 at 10:56 pm .

Completely agree. The big profit dollars are now in debt interest and fees. Lenders reap a very rich harvest, but when rates rise, they will make a killing.

By whichever means a dollar is wasted (or “killed” as Mr. O’Leary is wont to say), it is a dollar lost forever. It is lost potential for wealth creation. The average person needs to really understand how business sees money and the opportunities it presents. Until the average person understands this, business will carry on making tons of cash from “dumb money”.
The age of falling ass-backwards into RE profit is largely dead and gone. RE risk is huge.

#186 John Prine on 01.13.12 at 12:54 pm

4308 Rockridge, West Vancouver.

Sold 2001 for $970,000 with older home.

Sold January 2011 for 6.8 million.

Sold January 2012 for 5.7 million after 235 days on market.

Most listings in West Vancouver appear to be by long time residents cashing in after many years in their homes.

#187 Dan Hammond on 01.13.12 at 1:13 pm

What is [email protected] ????

As for Bank of Montreal aka BMO and the CBC, it’s employees, agents, spokespeople and advertising agencies, it’s Cui bono all the way!

Garthspeak for The Nice Lady @ The Bank. — Garth

#188 Wage Slave on 01.13.12 at 1:18 pm

183 Smoking Man on 01.13.12 at 12:37 pm:

Time to Read his stuff again with an open mind, slave.

Back atcha Smoking Moron:

Chris Hedges’ Columns
Why I Am a Socialist
Posted on Dec 29, 2008

By Chris Hedges

http://www.truthdig.com/report/item/20081229_why_i_am_a_socialist/

#189 City Slicker on 01.13.12 at 1:21 pm

#152 Ronaldo on 01.13.12 at 10:19 am #21 – CITY SLICKER – “Well here is more heavy insider selling by RBC. One exec unloading $14 million. And the CEO another $12 million.
Maybe this could affect the Royal and they know it:”

Back in February of 2009 when bank stocks hit their lows, the CEO was putting his bonus into his own banks stock while his [email protected] was urging my wife to put her $5000 in her newly opened TFSA account into GIC’s at somewhere around 1% because she told her that mutual funds were too risky.
———————————————————-
Nice story Ronaldo, but after the crash of 2008, early 2009 was the time to buy, and I was buying too, luckily I wasn’t in the group of those selling at those lows and wathcing the market double over the next 2 years. Very sad. And yes what is also sad is ‘advisors’ telling people to go to 1% GIC’s. That was then this is now.
Obvious evidence says housing is under more and more stress. And the banks could be affected. Gord Nixon was wise to buy at the lows in 2009, and now he is selling big – you think he is making another wise move?
Yes collecting 6 million is a nice pay day, but that’s not the point here.

#190 lawboy on 01.13.12 at 1:26 pm

108 The Real Truth,

Crunched some numbers..

A $300,000 townhouse in the Vancouver suburbs.

2.99% 5 year rate. 5% down 25 year Amortization.

Mortgage amount $285,000.

Monthly Payment= $1347 ($660 toward interest)

Balance at end of 5 year =$243,000.

Rents are similar for these types of townhomes (lets say $1347). So by renting instead of buying, you are losing out $41220 over 5 years due to not paying down a principal.

………………………………………..

@The Real Truth,

Does the “$300,000 townhouse in the Vancouver suburbs” in your analysis come with a unicorn as well?

#191 Van guy blazin kush on 01.13.12 at 1:27 pm

BPOE,

Didn’t u see my post showing the amount of sfh listings in 1 sq km of Richmond? I stopped counting at 50. You’re trying to up talk the market so you can sell your home that you purchased this year.

#192 Blacksheep on 01.13.12 at 1:31 pm

Cookie Monster burnin’ Kus # 153,

“And to think that religion should be tolerated and by doing so it causes nobody any harm is wrong, look at all the wars and tensions in the middle east and look at all the religious beliefs on both sides of the battles and then justify tolerance for so much stupidity based on mystical beliefs and delusion.”
—————————————————–
That’s your opinion and your welcome to it.

I believe religion, race and geography, have been
used for aeons to divide.

We are taught to fear anyone, who is different from ourselves.

Many wars, that have claimed to be religion based,
were in fact, resource based.
Control of: Land, labour, water, oil, currency and politics have all been pursued over the century’s.

The current game is Iran, the MSM pumps fear, fear and more fear.

Pure and simple, Iran is ditching the petro dollar.

The US is attempting the, two birds with one stone thing, ensuring the control of Iranian oil reserves
and continued trade, via US dollars.

This has nothing to do with security, religion or democracy.

take care,
Blacksheep

#193 poco on 01.13.12 at 1:34 pm

#108TheRealTruth on 01.13.12 at 2:30 am
Crunched some numbers..
A $300,000 townhouse in the Vancouver suburbs.
2.99% 5 year rate. 5% down 25 year Amortization.
Mortgage amount $285,000.
Monthly Payment= $1347 ($660 toward interest)
Balance at end of 5 year =$243,000.
Rents are similar for these types of townhomes (lets say $1347). So by renting instead of buying, you are losing out $41220 over 5 years due to not paying down a principal.
Result: Just to break even, RE must fall by 15% over 5 years. Anything less means you lose money renting. I have ignored property taxes and closing fees as these are outweighed by the intangibles of pride of ownership.
Garth dude, other than a crash…renters are screwed. Those that bought prior to 2008 won the lottery. Gov/Bank policy changes will not allow a crash. Maybe stable prices over the next 5 years mean renters lose big time
____________________________________________
let us do some real math on some real purchases–these are not 300k TH –they were bought in the spring of 2008 for the low 390’s (392k) four years later they are listed for what you see—–do you think they will get asking price?–not a chance
you do the math —i already have–i’ll continue renting thanks
the belowTH are more of those “think tall not small”concept—they’re not working out too well

http://www.realtor.ca/propertyDetails.aspx?propertyId=11314615&PidKey=1854404267

http://www.realtor.ca/propertyDetails.aspx?propertyId=11360576&PidKey=1017508092

http://www.realtor.ca/propertyDetails.aspx?propertyId=11345652&PidKey=-1783068540

this is just one of many complexes selling in this manner –same or less (many) than they paid years ago
suggest you do a little more research into the real housing market–not what you hear from the RE pumpers

PS: as far as your post #105 on condos –same as above —get real !!!

#194 Victoria on 01.13.12 at 1:36 pm

Jimbo,

A friend of mine in Dublin (ex banker, trader) says he sees so many parallels between Canada and Ireland. We have been talking about this on facebook for over a year.

#195 Mister Obvious on 01.13.12 at 1:36 pm

#174 Devil’s Advocate

“Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”
————————–

No, I’m not sure. But I don’t care. However, if I did care, the solution would be quite simple. I’d delete greaterfool.ca from my favourites and refrain from visiting this site.

Me too. — Garth

#196 anotheronebitesthedust on 01.13.12 at 1:38 pm

174 Devil’s Advocate on 01.13.12 at 11:49 am

I used to look forward to reading your comments as an interesting counter perspective. Recently, however, you post nothing but pretentious, emotional or fluffy drivel.

Now you’re saying we should be happy to pay more than a home is worth out of “humanitarianism” for the previous owner?

Emotions and massive life changing purchases shouldn’t mix. imho.

#197 maxx on 01.13.12 at 1:39 pm

#42 mid-Ontario on 01.12.12 at 11:24 pm

Is that why RE peddlers are calling with price “corrections”, and “make an offer” entreaties?
Is that why Spring market MSM yadayada by RE cartels, banks and mortgage brokers has commenced earlier than usual?
Is that why the little angry red dots multiply by the day?
Is that why lenders try to squash rates even lower?
Is that why reverse mortgages are increasing?

#198 Rene on 01.13.12 at 1:44 pm

Don’t kid yourself. This is the perfect time to buy a house. It said so on MSN, the most trusted and reputable resource for all financial decisions. LOL.

http://money.ca.msn.com/banking/homebuyersguide/gallery/is-now-the-best-time-for-house-buying

#199 renting and waiting on 01.13.12 at 1:47 pm

#180 smoking man –
re Critical Thinkers being called Conspiracy Theorists. I completely agree.

Critical thinkers who have to operate within society are either practiced liars (so that they can ‘fit in’) or they are social outcasts. Unless they are famous, of course. then, anything goes.

I can’t pick between becoming a hermit and become famous for my oddball views. hmmmm… it’s a toughie.

#200 Junius on 01.13.12 at 1:50 pm

#162 Skye,

You said, “Hedges doesn’t just talk the talk. He walks the walk. His opposition to the Iraq War cost him his job with the New York Times. Integrity!”

Let’s not forget that it was 2 draft dodgers in George W. Bush and Dick Cheney who sent the US to War. It was also the Neo-Cons like Wolfy and others who never served outside of so-called intellectual think tanks who came up with the strategy.

It was also a US General Eisenhower who correctly warned of the power of the military industrial complex.

#201 tran, Calgary on 01.13.12 at 1:51 pm

BMO reduced five-year fixed mortgage rate to 2.99 per cent. For more good years in RE?

http://ca.news.yahoo.com/bmo-cuts-5-mortgage-rate-time-low-120603200.html

#202 smartalox on 01.13.12 at 1:52 pm

@waterloo resident: [email protected] = the nice lady at the bank.

Interesting post on Vancouver news radio site yesterday, a luxury condo sold for $10, a 30% drop from the $14+M asking price. Fortunately, UBC dial-a-quote Tsur Sommerville assured us it’s not indicative of a change in Vancouver’s housing market.

Phew!

#203 Bill Gable on 01.13.12 at 1:53 pm

Thank goodness you have banned Shawn Allen. Much appreciated.
As for anyone hing for a crash – read what Mr. Turner quoted earlier.
Take no joy in your neighbors misery, or perceived mistakes. Bad kharma and we are not here to judge people, I believe we are here to try and make sense of this mess, with the guidance of our witty, and expansive host.
Mr. Turner could be lapping up Mai Tais with the Amazons, but instead he works on this blog to HELP people.
Mr. Turner should be our Finance Minister, but that ain’t gonna happen.
Our loss.

#204 Junius on 01.13.12 at 1:54 pm

#149 Bond Junkie,

You said, ” Anyone on this blog actually do any research? If so inclined, have a look at what debt to disposable income levels are at in Denmark, Sweden, Switzerland, Norway, and Singapore. I’ll give you a hint, they’re well above and in some cases double the levels in this country and, you guessed it, no RE crisis there.”

You buried the lead. No cheap lending in these markets which meant no rise in prices to the same levels. Same for Germany.

Congratulations. You just proved the point of everyone taking the opposite position of you. Cheap lending in the US, Australia, Ireland, the UK, Spain and now Canada is what caused the bubble. This is why we will suffer their fate.

#205 Junius on 01.13.12 at 1:56 pm

#151 Investor’s Friend (Shawn Allen)

You said, “As a result I do garner a bit of traffic from this Site. However given the attitudes and apparent lack of intelligence (and most certainly lack of investable money) of the majority of those who post here, it’s not clear how valuabe that traffic is.”

Who would invest their money with someone who cannot even spell the word “valuable”?

#206 Bill Gable on 01.13.12 at 1:59 pm

Talks between Greece and its creditor banks aimed at avoiding a disorderly default broke down on Friday, with Greeks warning of disastrous results if a bond swap deal is not reached soon.

France downgrade has spooked markets. Holy cow, what a mess.

What next?

#207 DonDWest on 01.13.12 at 2:03 pm

#131 Demosthenes

“ESPECIALLY when this “educated” individual doesn’t have the skills or sense to think critically and call anything out.”

I do believe that the modern day educational industrial complex has much to do with the blind faith in “expertise” and titles. This causes people do not question any decisions or advice. They see the diploma of that financial advisor hung on the wall; it’s a temple, it cannot be questioned. . .

However, the few of the younger generation who have the ability to critically think; and call out how we’re essentially being SCREWED OVER. What happens to us? From experience, we’re ostrocized and called “whiners” by the baby boomer horde.

Sorry I can’t paint the situation like friggin roses, I didn’t grow up watching Stephen Spielberg where every little guy grows up to being an idealistic and optimistic Messiah complex hero. The economic and financial destruction being unleashed upon an entire generation is for the most part caused by a series of bad mathematics and impractical decisions from the generation that came before hand. There’s little the individual can do unless he/she is truly gifted.

Telling me to “stop whining” and “get to work” is essentially asking me to battle windmills with a sword. The advice is worthless, meaningless, and unoriginal; yet we pay so many people outrageous sums of money just to throw this simpleton advice around.

#208 Junius on 01.13.12 at 2:12 pm

Joseph Stiglitz believes that 2012 will be worse than 2011. Interesting article from the Nobel Prize Winning Economist:

http://www.project-syndicate.org/commentary/stiglitz147/English

#209 Devore on 01.13.12 at 2:14 pm

Good response to a VREAA post:

Reminds me of the stories I read in the late 1990s about doctors, dentists, pharmacists and other highly paid professionals quitting their practices to become full time day-traders. And then there were the stories about the Ph. D physicists, engineers, chemists – people doing cutting edge research – being lured away from their fields by the big financials, who hired them to create, analyze and trade derivatives (They called these people ‘quants’ for ‘quantitative analyst’.) That’s the same kind of misallocation of resources we’re seeing today in real estate. Think of it, a skilled professional leaves his profession to speculate on stocks, real estate or whatever. This ghastly misallocation of human capital represents a net loss to society. Instead of being productive, we’re chasing easy money and doing nothing. It needs to end. It will.

Still “salivating” Dorothy?

#210 Wage Slave on 01.13.12 at 2:18 pm

207 DonDWest on 01.13.12 at 2:03 pm

However, the few of the younger generation who have the ability to critically think; and call out how we’re essentially being SCREWED OVER. ‘
[…]
The economic and financial destruction being unleashed upon an entire generation

Don’t forget about the concomitant environmental destruction! Hooray!

#211 Nostradamus Le Mad Vlad on 01.13.12 at 2:22 pm

#192 Blacksheep — “Pure and simple, Iran is ditching the petro dollar.”

So was Iraq, which led to the US invasion. Libya, Iran and others all have / had central banks, plus Libya had a massive fresh-water lake, which guaranteed their citizens enough to drink, enough oil to live well and self-sufficiency.

But TPTB, the elite don’t want us to be self-sufficient. They want us to be debt slaves, passing on debts to TNG so the interest keeps rolling in, and they stay at the top.

#199 renting and waiting — “#180 smoking man – re Critical Thinkers being called Conspiracy Theorists. I completely agree.”

Same here. The road less traveled is a far more interesting road than the norm, new adventures and experiences. Good post.

#212 Mister Obvious on 01.13.12 at 2:22 pm

#153
… I label people who are highly religious as suffering from a form of mental illness, they are delusional…”
—————–

OK, its a mile off topic and I don’t do this very often but here goes:

Some people are poor at math while others are poor at facing the fact of their own existence without mythical supports. In both cases there is a blank area in the mind where such capability might have thrived but instead remains undeveloped. Both types of individual are capable of being stellar citizens.

Those with math deficits don’t usually claim the field of mathematics is invalid, only that they are personally inept at the subject. They will merely get sleepy when the subject turns to standard deviation or Bessel functions.

But those with existential deficits really do seem to get their backs up when asked a simple thought provoking question like “Who made God?” or perhaps, “Did Adam have a naval?”

#213 Devore on 01.13.12 at 2:29 pm

#140 AM

What? No taxes, maintenance or strata fees?
Oooops! There goes that theory.

Oh he did, he offset it with “pride of ownership”! Didn’t know you could eat pride of ownership. Guess being able to paint your walls wacky colors is worth the extra $600 a month. I used to have “pride of ownership”, then I got an arrow to the…. wait no, wrong movie, then I got a $9000 special assessment in the mail. (and it wasn’t over 9000, it was just under, that’s a different movie too)

#214 Devil's Advocate on 01.13.12 at 2:32 pm

#195Mister Obvious on 01.13.12 at 1:36 pm
#174 Devil’s Advocate

“Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”
————————–

No, I’m not sure. But I don’t care. However, if I did care, the solution would be quite simple. I’d delete greaterfool.ca from my favourites and refrain from visiting this site.

Me too. — Garth

My point was simply that everyone has a personal agenda to one degree or another in everything they do. My personal participation on this blog is not without personal agenda. What is my personal agenda? Well a few things actually come to mind none-the-least of which is I am interested in what all facets of the population think is going on in the real estate markets today and while this “pathetic” blog most certainly is demonstrative of that furthest to, shall we say, the left it still is a reasonably prevalent opinion that it is worthy of consideration.

I do not frequent this blog to troll for business. My true identity is known only to Garth and a few clients of mine who I know from time to time visit this blog. Most certainly if I were trolling for business my comments would be a lot more filtered and I then could and would make known who I am. Those who frequent this blog who are already clients of mine know me well enough. But it is my colleagues I most want to remain anonymous to for from time to time I tell truths about the business they would rather you not know.

When I throw a thought out there which starts the pups and poodles to howling that provides me some valuable insight to the mindset of those who commonly hold those misunderstandings of theirs or mine. If they are mine I quickly stand corrected. Although to be honest I have only too rarely been proven wrong on these blogs to such a degree it changes my mind. Trust though that I am only too willing to be proven wrong as it would be far less embarrassing here than in my real world. So you must understand now that while I attend this “pathetic” blog in great part to provide the pups and poodles an alternate point of view they might not otherwise be exposed enough to, so too am I open to learning from them – seriously.

Now with respect to Garth’s motives behind the tireless work he does in keeping this blog running; if I could pull off such a coup I surely would. That is not to suggest in any way that there is anything sinister in Garths intent. To muster such a loyal following from which I could earn such trust and loyalty as Garth has would be of tremendous value to my business as I am sure it has been for his. Garth most certainly has “earned the right” with all they who come to do business with him as a consequence of their frequenting this blog. Even though Garth and I disagree on some matters, although far, far fewer than the pups and poodles seem to believe, I am positive that he is a man of integrity who well deserves the loyalty he garners for you all.

With Garths, and your, permission I will continue to stop by from time to time. I do want to limit my involvement here though as I do have a business to run and more than the time it is the too often toxicity of many of the posts that negatively impacts me most and you too I am sure.

So why not keep our comments from degrading to the depths of school yard antics and appreciate this forum for what it is – a vehicle through which we can share widely varying opinion on the state of the economy, where we think it might be headed, how we got here and what might be done about it if in fact need be.

#215 JRoss on 01.13.12 at 2:36 pm

DA,

“Are you really quite sure? Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”

You have got to be yanking my chain. Talk about pot calling the kettle black. How many times have you posted your email and asked people to contact you for the ‘real data’, you hypocrite.

You are in serious need of the introspection you constantly implore others to undertake. Projecting perhaps?

#216 stickler on 01.13.12 at 2:38 pm

@ #108TheRealTruth on 01.13.12 at 2:30 am
Crunched some numbers..
A $300,000 townhouse in the Vancouver suburbs.
2.99% 5 year rate. 5% down 25 year Amortization.
Mortgage amount $285,000.
Monthly Payment= $1347 ($660 toward interest)
Balance at end of 5 year =$243,000.
Rents are similar for these types of townhomes (lets say $1347). So by renting instead of buying, you are losing out $41220 over 5 years due to not paying down a principal.
Result: Just to break even, RE must fall by 15% over 5 years. Anything less means you lose money renting. I have ignored property taxes and closing fees as these are outweighed by the intangibles of pride of ownership.

———————————————

>>>So you ignore property taxes AND maint fees AND closing costs AND any repairs because those costs over 5 years (easily >30K) are outweighed because you can tell people you “own it” (because you put 5% down).

LOL

By that same logic…

If socks cost $1 to rent for the life of the socks, and the laundry was free you would still buy the socks for $3 and pay to do the laundry yourself. You would feel better because that sock was “yours”.

#217 JRoss on 01.13.12 at 2:39 pm

DA

‘Trust me there is ALWAYS something in it for the” do-gooder”.’

So then what is in it for you to come here daily to ‘offer us another opinion’.

Your slip is showing.

#218 Dorothy on 01.13.12 at 2:42 pm

#122 – Vultch
First let me say that I have never advocated greed, and I most certainly have never advocated using your home as a way to make money. Neither have I advocated speculating in the condo market or any other type of RE. It is that type of activity that has caused prices to rise to unsustainable heights in certain markets, and I abhor it.

Second let me say that I’ve always disapproved of nothing down, or 5 % mortgages, and have always advised people to save as large of a down payment as possible in order to protect them from the inevitable downturn in the market. Because real estate booms and busts have been a fact of life for as long as I can remember, and people would be wise to always keep that in mind when buying a house. I’ve also always advocated they keep their purchase price as low as possible by negotiating a good price (NOT getting into a bidding war), negotiating a good mortgage rate (or shopping around if your bank won’t play), making weekly payments, and taking advantage of your annual penalty free pre payment allowance. This is all prudent behaviour which, if practised more often by more people, would have gone a long way to keeping prices at more affordable levels.

I see nothing wrong with renting; I used to be a renter myself. And if that’s what people want to do, then more power to them. But the vitriol I observe on this blog towards those who chose to buy, seems to be more the result of jealousy than anything else. And it would be more productive if, instead of being jealous of those who worked and saved to buy a home, those who are envious saved up themselves in order to buy that which they desire. They just need to be careful about how they go about buying, particularly in the current market where prices are indeed softening. But provided they don’t see your home as a way to make money, or to use as a piggy bank, and follow the above advice, they’ll be OK buying. Yes the price may continue to soften, but if you’re planning on staying there for a while, enjoy living there, and can afford it, a little price volatility shouldn’t matter. Some of the homes I’ve owned over the years never made me a dime; I merely broke even on most, one home I lost money, and one I made money. But at the end of the day I enjoyed living in each and every one of those homes, and saw any expenses as being the price I paid for the pleasure I got out of living there. You don’t make money when you buy a car, but that doesn’t stop you buying it if you want one.

As Real Estate is very much a local market, it is not going to be possible for everyone to save up a minimum of 20% down (which is what I’ve always seen as being the ideal). So in those kinds of “bubble” markets (e.g. Vancouver and Toronto, and possibly Saskatoon) I also would be a renter. Because I wouldn’t dream of paying some of those ridiculously overinflated prices for what are basically dumps. However, if I lived in a more affordable market, where saving 20% is within my reach, then I would (and did) save up and eventually buy a home. Not because I see home ownership as a status symbol or as a way to make money, but because I enjoy being a homeowner. And there is nothing wrong with that, just as there is nothing wrong with being a renter. It’s a matter of personal choice.

Those markets where prices are out of reach for the majority HAVE been driven by greed (from foolish property virgins, to speckers, to bankers, to Realtors) and there WILL be an inevitable correction. But those who were prudent, and refused to buy into such a market will not be affected, and WILL be able to buy in once prices come down.

However, to wish for a massive country wide crash in ALL markets (even those that aren’t in bubble territory) is to wish for such a huge downturn in our economy that NO-ONE will emerge unscathed (unless like you, they happen to be a highly paid doctor whose livelihood will be less affected by the same economic forces as the rest of us). Much more than just the price of houses would be affected in such a massive housing downturn. And for anyone to be sitting rubbing their hands with glee and hoping for such a thing to happen is not only mean spirited, but also very short sighted. Because for the most part, they themselves would also become victim to such a huge economic downturn, whether they’re a homeowner or not.

#219 dad on 01.13.12 at 2:48 pm

I’ve always assumed DA was Garth

I just had an accident. — Garth

#220 Macrath on 01.13.12 at 2:52 pm

#143 Sky,
Thanks for posting the link to Chris Hedges. Excellent !

#221 Junius on 01.13.12 at 2:52 pm

#209 Devore,

Good post on Vreea. This is such an important point to make about the creation of assets bubbles. One is clearly the amount of people that get hurt on the way down. The other is the massive misallocation of human and other resources. This cannot be forgotten

In the movie, “Margin Call” there is a scene where the junior quant mentions his education was from MIT as a rocket scientist. When asked what he was doing on Wall Street he simply says, “The Money is Better.”

#222 Sky on 01.13.12 at 3:01 pm

@ DonDWest- “The economic and financial destruction being unleashed upon an entire generation is for the most part caused by a series of bad mathematics and impractical decisions from the generation that came before hand.”
******************************************
Don’t be naive DonD. You’re smarter than that. Unless your hate-on for the boomers blinds you from seeing the big picture…. in which case you are NOT smarter than that.

Bad math and impractical decisions had nothing to do with where we are now. Govts were well aware of the unsustainability of massive social programs and how debt would balloon and the economy would tank. In fact, they made SURE of that by creating massive carry trade $$ and unleashing the derivative hell hounds of finance capitalism .

Do you think the folks who voted for Harper are happy with our upcoming gulag system for non-violent drug offenders? Probably not. But the politicos don’t care.

USA congress has an approval rating in single digits. Does this concern congress? Not much. They have an AGENDA and are following the script like the good little quislings they are.

We’re at a point in time, economically and socially, where we were MEANT to be. This was not a ‘can’t add 2 + 2 ‘ accident’. It was deliberate.

Gen X has it tough, but the boomers will fall right along side. Like it or not, we’re in this together.

#223 poco on 01.13.12 at 3:03 pm

#204Junius on 01.13.12 at 1:54 pm
#149 Bond Junkie,
You said, ” Anyone on this blog actually do any research? If so inclined, have a look at what debt to disposable income levels are at in Denmark, Sweden, Switzerland, Norway, and Singapore. I’ll give you a hint, they’re well above and in some cases double the levels in this country and, you guessed it, no RE crisis there.”
____________________________________________
no time to look up the rest
http://www.globalpropertyguide.com/Europe/Denmark/Price-History
_

#224 Bond junkie on 01.13.12 at 3:07 pm

Junius are you crazy?? Here’s a run on where 5 and 10y rates are trading in those respective countries.
5y 10y
Denmark .54% 1.59%
Sweden .97% 1.56%
Switzerland .12% .70%
Norway – 1.77%
Singapore .48% 1.58%
Canada 1.25% 1.90%

Can you spot the outlier? I’ll give you one guess. There’s no way the above’s banks are churning out 5-700 basis point margins (which is what you are implying) in the current environment. Unlikely that any domestic regulator would stand for that. And Bobby, have you even done the slightest bit of research to see what people pay p/sq ft to live/work in downtown Zurich nowadays? Ummmm, it’s a tiny bit more than 500$ you can bank on that. But what do I know, I’ve never left the province. Garth, you know what also tends to revert to the mean? Bonds, until they stopped doing so sometime in early 2007. The inherent problem with the mean reversion argument over the long term is that capital flows can severely skew the average in the intermediate term, often for years on end. There are many ppl on this blog that argue home prices will revert to 2003 levels. Do you remember where 10y rates were in Canada back in 2003?? Just north of 5%, DISTANT memory. We will not see those levels again for at least a decade if not more. You guys don’t appreciate the impact capital flows are currently having on EVERY asset in this country. In today’s global marketplace, stability is king. I sit on a desk where everyday sov wealth funds, central banks, and extremely wealthy individuals all come to us to beg for a safe place to put their money, accepting a very meager return for our service. This trend will continue well into the indefinte future. Good luck

#225 Smoking Man on 01.13.12 at 3:09 pm

#199 renting and waiting on 01.13.12 at 1:47 pm

I go with insanity, and bad spelling than I can play both sides of the coin.

#226 Bond junkie on 01.13.12 at 3:10 pm

Norwegian 10y rates are not -1.77. I meant to put a dash in place of the 5y rate as that country does not currently issue a 5y bond. Just an fyi

#227 Smoking Man on 01.13.12 at 3:11 pm

Well I thought the Fat lady was going to start singing soon regarding a real estate crash.

BMO just shoved a cucumber down her throught with the insignia 2.99

#228 GuyInBurnaby on 01.13.12 at 3:34 pm

And according to the current quality of our building process, the TH could be facing major repair expense in 5 years (which may unfortunately happened during the correction), then Ooops, can’t sell (price lower), can’t break even (adding the repair part)…

#140 AM on 01.13.12 at 9:26 am

#107 TheRealTruth on 01.13.12 at 2:30 am
Crunched some numbers..

A $300,000 townhouse in the Vancouver suburbs.

2.99% 5 year rate. 5% down 25 year Amortization.

Mortgage amount $285,000.

Monthly Payment= $1347 ($660 toward interest)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

What? No taxes, maintenance or strata fees?
Oooops! There goes that theory.

He did not add in closing costs or CHMC insurance. — Garth

#229 mcsteve on 01.13.12 at 3:38 pm

Blog dogs: I have a 5 year fixed mortgage @ 3.84%. I have 3 years left in the mortgage. I recently ran into my broker. He indicated mortgage rates are even lower now and he could lower my mortgage by 0.1% to 3.74% and restart the clock for another 5 years (blending today’s rate with my earlier rate). Since it’s with the same lender, there would be no penalty.
I’m usually skeptical, but I asked my mortgage provider and they said they could do it for a one-time $150 admin fee. My theory is that rate will be much higher in 3 years when I go to renew – there doesn’t seem to be any downside. The 0.1% isn’t much, but another 2 years at ultra-low rates is tempting. Am I missing something?

#230 C on 01.13.12 at 3:38 pm

#170 Kris

All I am doing is going to http://www.mls.ca and inputting the information. It includes some additional properties near Burlington such as Hamilton, and perhaps Stoney Creek but all in all more listings are more listings, keeping everything the same.

#231 Devil's Advocate on 01.13.12 at 3:42 pm

#215JRoss on 01.13.12 at 2:36 pm
DA,

“Are you really quite sure? Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”

You have got to be yanking my chain. Talk about pot calling the kettle black. How many times have you posted your email and asked people to contact you for the ‘real data’, you hypocrite.

You are in serious need of the introspection you constantly implore others to undertake. Projecting perhaps?

Sometimes posters doubt what I post and I am only too happy to provide the proof-source if necessary to prove to them that which I post comes from a credible source. In the absence of such proof-source that which I post here is understandably considered by they who doubt it of nothing more than personal agenda propaganda.

If someone reads my posts and likes and agrees with what I say they are at liberty to contact Garth for my personal information which I assure you he will not give out but will pass your name along to me if he is comfortable doing so. As for my posting of that [email protected] account again – anonymous and used only for the purpose of verification.

#217JRoss on 01.13.12 at 2:39 pm
DA

‘Trust me there is ALWAYS something in it for the” do-gooder”.’

So then what is in it for you to come here daily to ‘offer us another opinion’.

Your slip is showing.

I believe I answered that at my lenghty post #214

Hey, if enough people ask politely ask me to leave, I will leave and leave they to the censured opinion that precludes them from opportunity for to know of only one possible outcome confines you to acting only in accordance with it which may negate any possibility of another better.

#219dad on 01.13.12 at 2:48 pm
I’ve always assumed DA was Garth

I just had an accident. — Garth

Come on now Garth… you know we aren’t so far apart as the pups and poodles believe. ;-)

#232 bill on 01.13.12 at 3:51 pm

”Not a good time to invest in natural gas.”

-and it wasnt a good idea to buy gold at $276.00?
buy when its cheap…..
I think that nat gas has a brighter future than it does at present.
[those wells that are fracced [sp]? drop off production quickly].

#233 Cookie Monster burnin' Kus on 01.13.12 at 3:59 pm

212 Mister Obvious,

The difference of whether a person or mankind knows or understands mathematics, science or cosmology does not alter the fact that reality exists whereas no matter how much or how many people want to accept or believe in a supernatural dogma it will not make it true if it does not exist.

Blacksheep, agreed.

#234 jess on 01.13.12 at 4:00 pm

Mutatis mutandis

http://www.federalreserve.gov/boarddocs/speeches/2004/20041019/default.htm
Remarks by Chairman Alan Greenspan
The mortgage market and consumer debt
At America’s Community Bankers Annual Convention, Washington, D.C.
October 19, 2004

“In addition, improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities.”

robo signers, mers, liar loans, tax evasion schemes e.g blips, son of boss etc etc..

Economic substance, “investment rational”
new york times 2007

The Blips shelters were created to generate artificial losses that were then used by wealthy investors to offset gains in legitimate income. The shelter involved a purported investment component as well as banks, extending purported loans to investors. Blips were marketed and sold around 1999 and 2000 to at least 186 wealthy investors and generated at least $5.1 billion in phony tax losses, according to prosecutors. The Presidio entities made at least $134 million selling Blips.

#235 DonDWest on 01.13.12 at 4:07 pm

#222 Sky

I sometimes forget how much older I am. That statement was mostly in reference to what I was telling people back in the early 2000’s. I could see the economy crashing (great depression caliber), the math wasn’t good, and I was called crazy by the masses.

Even back then, it just didn’t add up for me. The mortgage payments people where shelling out, the CPP contributions, etc. It seemed like money was being made out of thin air. It made me question what’s the point of working for money at all? It still does. . .

The way I see it is a lot of people wanted to get rich off their homes without having to work. When I would point out to them that if homes increased 10% every year; how will your kids get out of your basement? They looked at me all funny. Many crazily argued their darlings would become company CEO’s out of college because their degrees are just that valuable; so they could afford that 1 million dollar bungalow. It’s no secret what group hoped to benefit from rising housing prices at my own personal expense.

You can blame the politicians and banks as much as you like; but they for the most part pander to “consumers.” The consumers are baby boomer voters. I’ve worked as an intern (SLAVE) for many politicians. Politics is local. Politicians cater to home owners/older people because they understand that home owners/older people are less mobile than renters/younger people. Therefore there is great incentive, in terms of votes, to keep home prices rising.

I’ve seen it first hand in meetings with constituents. Most of them were all boomers, pushing for laws, bylaws, regulations, social policy, etc. all centered around keeping home prices up. Mean while I was a disgruntled young person watching the generational slaughter before my very eyes. Helplessly watching the ladder being pulled up from under me. The politicians have no choice but to budge to such demands if they want to get voted.

What I’m trying to get at; the voters are the people who created the beast. The politicians are merely a reflection of a certain demographic where the votes lie. Mainly that middle class homeowner type.

#236 Michael Hawk on 01.13.12 at 4:08 pm

Dorothy, in the internets nobody can hear you cry.

Plus….. what’s wrong with you people not living within your means, uncontrollably borrowing from the banksters, and then complaining because pay-back time is coming? What’s wrong with you people !!! You people deserve a correction. It’s gonna be hard to keep my debt-free shoes clean from all the blood flowing on the streets. Ah whatever :-D

#237 Noah on 01.13.12 at 4:11 pm

Garth,

I know what this is all about. Flaherty and the bunch are playing with your head. They don’t like you.

No? — Garth

#238 The InvestorsFriend on 01.13.12 at 4:16 pm

DELETED

#239 NoChanceInHell on 01.13.12 at 4:21 pm

Hey Garth
My prediction is hot money from China is going to come in for Chinese New Years and a hand full of the immigrants are going to get suckered in again to buy over valued land from scum real estate agents. That will start the hype all over again for a few months, with locals also jumping in on the hype pushing sale higher and prices to stay at these levels. The cycle will continue……… Mark my words….. that is what happened last year…. a handful of immigrants got suckered into bidding wars and the locals also jumped onto the wagon

#240 Okanagan Renter on 01.13.12 at 4:22 pm

I almost choked on my blueberry pancakes this morning when the talking head at CBC Newsworld barked out “great news for home owners” as the preamble to the puff piece on BMO’s crack cocaine rate drop.

Waiting for my inbox to start cluttering with well-meaning friends advising me that there is no better time to buy. “Buy now, buy now, buy now, baaaaaaaahhhhhhhhh” .

Dorothy, listening to you covering your ears and repeating the same point blog dawgs have already torn to shreds reminds me of when I used to debate my boomer dad on the scientifically-based theory of evolution. One day, after yet another heated discussion, he simply said, “Well, I think the devil could very well have placed those dinosaur bones there to confuse us”. That was the last time I ever raised the issue with him or any other religious fundamentalist. I trust you catch my drift.

#241 Bond junkie on 01.13.12 at 4:28 pm

Poco, a 15% blip is commensurate with what some parts of Canada experienced in 2008 and certainly does not constitute a crisis. If you had time to look up the rest (which all of you should do), you would conclude that my argument is sound.

#242 zeeman1 on 01.13.12 at 4:31 pm

#183 Smoking Man.

That was one of your best responses, ever.

Please don’t encourage him. — Garth

#243 Realtors and Bankers in a Panic on 01.13.12 at 4:37 pm

Beemo did a stress test and does anyone really know the results? Looks like the bankers along with the realtors are in panic mode as prices and sales have dropped. With the tens of thousands of condo flippers looking for suckers buy the house of credit is starting to crashing from it’s own weight. The outskirts of the GTA are seeing NOTHING SELL. They can blow all the hot air they like but the crash is coming.

#244 AG Sage on 01.13.12 at 4:44 pm

>Dorothy, However, to wish for a massive country wide crash in ALL markets (even those that aren’t in bubble territory) is to wish for such a huge downturn in our economy that NO-ONE will emerge unscathed (unless like you, they happen to be a highly paid doctor whose livelihood will be less affected by the same economic forces as the rest of us). etc. etc.

Wishing for the crash is the equivalent of wishing the bubble had never happened. The best one can wish for now is to get it over with before it gets any worse. Like you said, it is inevitable. What is the alternative at this stage? People get tired of watching friends and relatives acting like lotto winners because a bank loaned them too much money. Mockery and dark humor are about the only tools when the masses have drunk of the kool-aid and you have not.

The Powers That Be are going to pretend no one could see the crash coming. Better to be in a position to point out that many saw it coming, and this is why it went wrong, and please fix things so it doesn’t happen again, thank you. Canada will have one tiny window during the crisis to overcome the political influence of the parties that contributed to the mess and make the right structural changes.

TheRealTruth — I live in a house with no mortgage so it must be free, right? Yay for me. Wait, I seem to have $400 a month in taxes, $60 a month in insurance, $300 in utilities and according to 15 years of quicken data, $400 a month in upkeep. What went wrong??

#245 brad in saskatoon on 01.13.12 at 4:55 pm

well i hope for the sake of the next generation thAT this bubble comes to a end sooner or later.. i own real estate , do i care if the market crash’s yes, but in the same breathe i do want to see prices come to a more affordable standard , but more than that i would like to see the government step in a start regulating how the banks run there business , and not have backing from the tax payers via cmhc. if they increased the down payment required too 15 or 20% , it would weed out the speculators real quick .
all i see and here is about buying this house to flip for this much money and so on around here . it is almost as if no one see’s any risk involved.
but it is heard mentality you want to do it cause everyone else is doing it . i too even hear and see the #’s they are talking and see them makeing 75 or 100ks on a brand new build live in it for a year (now 6 months )and sell for a profit and it is tax free gains cause it is your principle res.
i am a contractor by trade and do foundations and concrete work . so it is not that i do not no people too do the work for the builds i am just not prepared to loose my paid for family home which would become a atm machine too do the projects , i see too much risk ..

my great grandpa and grandma taught me lots , not from what they said but now i look back how they lived. simple lives . but always bought things with cash . i kinda envy there live style now, liveing on the farm eating fresh meat veggies and eggs , milk no chemicals .. totally against the herd.
peace out

#246 Westernman on 01.13.12 at 4:59 pm

DELETED

#247 DM in C on 01.13.12 at 4:59 pm

#231 “Hey, if enough people ask politely ask me to leave, I will leave ”

Problem is, you come back.

#248 Devore on 01.13.12 at 5:03 pm

#214 Devil’s Advocate

So why not keep our comments from degrading to the depths of school yard antics

You can start by doing this yourself. You take great relish from calling posters to this blog “poodles”, but quickly get upset when someone shoots back.

Like Investors Friend, you deem to dispense pearls of great and timeless wisdom to the great unwashed masses, and expect gratitude and respect in return, which is naturally due. When countered and snubbed (how dare they), you turn petulant and petty, and threaten to leave.

If you truly want to raise the level of discourse, as you claim, then drop the “from on high” attitude, stick to the factual and concrete, and ignore trolls, instead of lowering yourself to their level.

Your way of life, your beliefs, your attitudes, are yours, and you will never ever “convert” others to your way. Don’t even try. Because like opinions and a*holes, everyone has theirs, and they’re just as good as yours, whether you choose to believe that or not.

Stick to facts, is that so hard? Leave the metaphysical BS to the coffee shop and drunken camping trips.

#249 Spiltbongwater on 01.13.12 at 5:10 pm

Will BMOs mortgage rate cause the bubble to keep inflating? Seen as people have to qualify at the posted 5 year rate, then with a 2.99% rate, they can take on more mortgage debt then before the price reduction. Should be good news for the Realtors imo.

#250 Wage Slave on 01.13.12 at 5:11 pm

242 zeeman1 on 01.13.12 at 4:31 pm #183 Smoking Man.

That was one of your best responses, ever.
Please don’t encourage him. — Garth

It’s a response which I categorically disprove at #188. And he’s too much of a coward to respond and admit that he’s wrong.

As for encouraging him, well, we already know how he’ll reply: with some inane comment followed by a stream of blah blah I M smrt n all nowing n have a huge cck, blah universal shrinkage. He’s nothing if not predictable.

#251 Dorothy on 01.13.12 at 5:19 pm

All of my posts (both today and previous) have advocated good money management and the avoidance of excessive debt. So the fact that so many bloggers appear to find my comments to be just plain wrong, probably speaks to the average mindset these days when it comes to money management and debt.

Nevertheless, I stand by my belief that those who practise good money management, and avoid debt as much as possible, will emerge from the end of this current recession/depression better off than their money spending counterparts.

What you decide to spend your money on is a totally personal decision, based on your individual circumstances. Those who choose to rent, should not criticize those who choose to buy, and vice versa. But whatever you choose to spend your money on, make sure you can afford it and then negotiate a good price, don’t overleverage, and be sure to shop around for the best interest rate you can get.

If home ownership is your choice, and you do all of the above, you wouldn’t be buying into a super heated market like Vancouver because it would be highly unlikely you would have a big enough down payment, and probably impossible to negotiate a good price. But if you lived in a place such as Thunder Bay, or Windsor, in Ontario or Yarmouth, in Nova Scotia, then its a totally different story. Which is why generalizations regarding real estate affordability on blogs such as this one is a bit of a mugs game.

However, that said, common sense and good money management never go out of style, and both have always served me very well.

#252 Devore on 01.13.12 at 5:24 pm

#221 Junius

Of course few see this misallocation of capital and resources as a problem, because “everyone” makes lots of money, right? Asset bubbles are a net drain on societal wealth. Even if a bubble burst resets the numbers in aggregate to pre-bubble state, the gains and losses are not distributed equally. But it is the previous misallocations which end up being a net loss, because that is a sunk cost. You’ll never get that time back. The research that could have been done. The progress and advances that could have been made. The talent that withered away. The investments that weren’t made.

People like Dorothy make the mistake of believing that the bubble bursting does the damage, so “wishing” the bubble to pop is bad. (the “wishing” part being entirely irrelevant to reality) But the actual damage is done during the bubble build up, damage masked by paper gains and fake prosperity.

The bubble popping is merely the actualization of the real losses incurred during the bubble.

In truth, rising good and asset prices are a net loss for society. In particular, no one benefits from higher house prices, because people primarily buy houses to live in (it’s an expense), so they buy them from each other. The true sign of wealth, and a wealthy society, is DECLINING real prices. Wealth is measured by purchasing power, not how deep you can dig the debt hole.

#253 DonDWest on 01.13.12 at 5:29 pm

#251 Dorothy

“All of my posts (both today and previous) have advocated good money management. . .”

I stopped reading right there.

#254 Westernman on 01.13.12 at 5:38 pm

[email protected] # 207,
Stop whining and get to work???
What terrible advice! How dare they say that to a genius like you…
Much better advice would be – lay around your mom’s basement smoking dope and playing video games all day… and get more tattoo’s of course….
THAT will work a lot better than stopping your whining and going to work.

#255 Form Man on 01.13.12 at 5:44 pm

#248 Devore

excellent post !

on another note, I see in the Globe and Mail today that Sherry Cooper is worried about a Canadian housing bubble, but quickly offers up the opinion that Canada is different than the U.S. in that subprime mortgages here are ‘negligible’. Either the Canadian banking industry is completely unaware of what constitutes ‘subprime’, or they are lying, because subprime mortgages in Canada are far from ‘negligible’.

#256 DonDWest on 01.13.12 at 5:55 pm

[email protected] # 207,
Stop whining and get to work???

So how is punching hours in the clock going to make housing affordable for my generation?

#257 Dan on 01.13.12 at 6:00 pm

Smoking Man #180

Smokingman it’s amazing how many people swallow the propaganda. People are such puppets that even when you explain what is the real reality of life they look at you as if you are crazy. Sometimes I look around think to myself that most of these people are puppets of propaganda they will never wake up. I’ve noticed those who have money and do not work for others share your view point. Good post smokingman. You to garth I really enjoy your view points and posts. Oh ya I also most forgot about Nostradamus Le Mad Vlad . I come to this blog everyday for these guys.

#258 DonDWest on 01.13.12 at 6:02 pm

#254

Besides Westerman, it’s stupid advice, any idiot can say it. Doesn’t solve the problem that house prices rise faster than any rate of savings I could possibly muster. Considering I was already working 80 hour weeks when that trash was preached in my face; often by people who only worked half as hard, the advice was condescending to say the least.

#259 Freedom first on 01.13.12 at 6:05 pm

#161 by A.M. – Really enjoyed your post!

Garth, only my 2nd post, though I have been a fan of your blog for quite a while:)…….enjoy your sanity…..refreshing in today’s world!

I am from another planet myself, as I, being self supporting from my teenage years, developed certain financial beliefs of my own, that have made me a leper to others, as to how I operate financially. I rarely discuss anything financial face to face. Can’t stand it. Painful to listen to.

I simply believe in living well, helping others, a healthy lifestyle, and looking after my finances myself, which I have self taught myself with reading a diverse amount of financial information. This is a great blog!

I like diversified assets, income streams, cash flow, minimal/no fees wherever possible, and no debt. I enjoy a nice lifestyle. And love to live in freedom:)

#260 Junius on 01.13.12 at 6:07 pm

#255 Form Man,

Sherry Cooper = Paid for hack

#261 Junius on 01.13.12 at 6:14 pm

#252 Devore,

Excellent post. I agree 100%.

Those who come here and say everyone is hoping for a crash so they can buy a cheaper home just don’t get it. We are all losers in this situation because the aggregate harm it does to our society.

One recent situation in Vancouver just nailed this for me. The assessment notices came out and once again everyone thinks they are house rich in this City. My wife was complaining to a friend about the outrageous increase in prices. Her friend just laughed and said it is the price we pay for get rich so easily! Of course, my wife said that prices are falling and the tone changed.

No one would put up with these sort of tax increases on anything else except for the fact everyone thinks there is no end in sight. It is just so short sighted.

#262 Ian on 01.13.12 at 6:15 pm

Some one has to feed the .1%! That would include the 99.9% of the rest of us.

Concrete is now the only thing in a high rise that is not from China, yet. Apparently this goes for the majority of our building industry.

We are also now financing the complete take over of our country.

This is sad.

#263 Guy1 on 01.13.12 at 6:28 pm

Re. #171 Devil’s Advocate on 01.13.12 at 11:38 am

“Trust me there is ALWAYS something in it for the do-gooder. While they may not be immediately cognitive of it if they give it some serious consideration they will come to realize, at some level, they, ultimately, do it for themselves.”

Only a person without religious conviction could say such a thing. I’m a Christian. Jesus died in a state of suffering for our sins. Suffering is the antithesis to personal pleasure. Are you saying that Christ was selfish and some kind of sadist?… “But he was pierced for our transgressions, he was crushed for our iniquities; the punishment that brought us peace was upon him, and by his wounds we are healed.” A person of the deepest moral convictions can, in fact, see that their own well-being needs to, in many instances, come second to those around them. Are you saying that when our soldiers in the Canadian Corps fought against the German Sixth Army in Vimy Ridge – that when one of them with death in their eyes bravely stood to protect the other – that somehow this was an individual act of personal pleasure – knowing that they’d leave their wife and kids behind. This is why we have a problem in Canada – why i.e., real estate has gone mad – there’s a deep moral, social and fiscal vacuum in this country, that is, if people can’t see how a greater sacrifice for others can and should trump personal interest.

#264 Arshes on 01.13.12 at 6:32 pm

#251 Dorothy
“So the fact that so many bloggers appear to find my comments to be just plain wrong, probably speaks to the average mindset these days when it comes to money management and debt.”

I think its more the fact, that there are people out there who have done the right thing, when it comes to thier money and still ended up in the bad place in the end.
Generic financial advice may seem fine and all, but you can truly screw some peoples lives with it. There will defintley be some good people in the near future, who are gonna g

#265 Westernman on 01.13.12 at 6:32 pm

DonDWest,
Yeah, you’re right… there’s absolutely nothing you can do to improve your life….
I guess the best thing for you to do is go jump off a bridge…

#266 Form Man on 01.13.12 at 6:38 pm

#260 Junius

agreed.
Every time I read that there is no ‘subprime’ issue in Canada, I truly wonder………
Wife has a couple of colleagues at her work who bought homes in Kelowna 3 years ago. Both were told by their broker to ‘ just tell me what you need, I will make the numbers work’……….. one has just lost their home to foreclosure, the other one is in serious distress, hoping for ‘prices to bounce back’. Neither would have had their mortgage applications approved if the information given had been accurate…….

#267 Kris on 01.13.12 at 6:42 pm

#224 Bond Junkie.
Foreign money is one the factors at the heart of this issue. What sort of limits/quotas apply to foreign property buyers in Canada (like the limit of roughly 250,000 immigrants per year)

#268 Timing is Everything on 01.13.12 at 6:53 pm

‘How to speak Apocalypse: A terminology primer’

http://tinyurl.com/73y7tj2

It’s getting late…

http://tinyurl.com/7p8sycj

Have a nice weekend.

#269 Timing is Everything on 01.13.12 at 7:03 pm

183 Smoking Man

You spell better when you’re angry. Neat.

#270 Bill Gable on 01.13.12 at 7:04 pm

This wee tid bit is for those among us that think interest rates are going to act all ZIRPY for the next decade = this from Michael “Mish” Shedlock: Friday the 13th, indeed.

“In conjunction with a “Pause for Reflection” and stalled talks by Greece Bank Creditor Group over the benefits of further “voluntary” cuts on Greek debt, yield on 1-year Greek bonds soared over 400%.

A hard default appears imminent.

#271 John G. Young on 01.13.12 at 7:16 pm

#231 Devil’s Advocate:

Hey, if enough people ask politely ask me to leave, I will leave and leave they to the censured opinion that precludes them from opportunity for to know of only one possible outcome confines you to acting only in accordance with it which may negate any possibility of another better.

Some people just have a way with words.
Unfortunately, you’re not one of them.

#272 Westernman on 01.13.12 at 7:17 pm

Guy1,
I have absolutely nothing against religion, it’s ORGANIZED religion that is inherently evil.
More wars and conflict has been started by organized religion than any other lie in the history of mankind… especially when the self-rightous bible-thumping starts…like you for example.

#273 Smoking Man on 01.13.12 at 7:25 pm

242 zeeman1 on 01.13.12 at 4:31 pm #183 Smoking Man.
That was one of your best responses, ever.
Please don’t encourage him. — Garth
It’s a response which I categorically disprove at #188. And he’s too much of a coward to respond and admit that he’s wrong.

…………………………………………………………………………..
First of I’m never wrong, ok YLO but that was it. And I even admitted it was a stupid move before it tanked which makes me still right….

Slave do you know the difference between a ruthless capitalist and a bleeding heart socialist are?

Knowledge, my little grasshopper salve. knowledge

The capitalist figured out a way to make money, a socialist hasn’t got their yet.

I have seen with own eyes orange shirt picketers find a way to make loot and transformed into hard ass capitalist, even changing their accents to sound like the queen.

Now you seen to idolize Chris Hedges, the exact thing he teaches is to not idoize, fail number 1 on your part. Two, you have jumped to the conclusion that everyone on this form despises me, Even the bearded one has taken a liking to me. You are trying to incite mobbing. fail number 2. Another lesson from Chris that went over your head.

Look at me I just wiped your ass with Grade 2 writing skills.

PS

And as far as the universe the speed of light is slowing down with universal shrinkage Einstein was wrong, speed of light is not a constant, The neutrinos at Cern did not go faster than light, light slowed down making them appear to go faster.

One day in the not to distant future it will be accepted, and remember who visualized it first.

Me The Great Smoking Man

#274 oldmac on 01.13.12 at 7:26 pm

Thanks for soldiering forward once again Garth.

Now we have to wait for the last generation to become less delusional, the current one to grow up; and somehow come up with an economic paradigm that works for everyone.

Are we smart enough to turn this song and dance into an economy based upon innovation and efficiencies? Manageable exploitation of natural resources and sustainability? Can we expect this when we’ve got a boatload of existing workers who are unwilling/unable to update their skills? When we have a generation of new workers expecting 6 figure salaries with skills that have no practical application? I sure hope so.

Even with our recent advancements in technology; it appears reasoning and logic have faded into the background. A whole generation fixated on house-based wealth. A whole new generation less disciplined than the last who want to accelerate that house-based wealth. A nation of trendy followers; not the robust leaders our great nation was once known for.

Will our Grandchildren look back at this era and be happy with our progress? Will they see the moral implications of having an asset so intrinsically tied to our well being skyrocket in price based upon greed and delusion? I think they will, and I think they will not be impressed. We are morally bankrupt, and perhaps soon to be financially as well.

So let us strip the problem down to a philosophical one; rather than a technical one. Take the deadlines of the crash, the pumpers, speckers and flippers out of the equation – merely semantics. What you’re left with is simply a despicable display of humanity. Uncaring, we push for exponential growth without the slightest concern for those who follow.

We can show that this current stage of development is exceeding our personal income. We can show that we are exceeding the limitations of our environment. What we cannot seem to realize is that the real estate issue is a very serious symptom of a larger problem. We have become parasitic by our nature.

The dream of doing nothing and taking windfall profits has eroded the work ethic and sensibility of a great many. It bolsters the illusion that we are better than we are. Clever and high-minded. Confident beyond reason. Blind and destined to fail.

A real estate crash and a decade of stagnation – while painful – is a Trojan horse into the castle of delusion; and a small price to pay for our future. An affordable house would be nice. A livable planet would be nicer.

Greater fools indeed. Peace.

#275 Smoking Man on 01.13.12 at 7:28 pm

#268 Timing is Everything on 01.13.12 at 6:53 pm

Haven’t started drink yet

#276 Smoking Man on 01.13.12 at 7:31 pm

257 Dan on 01.13.12 at 6:00 pm

Nostradamus Le Mad Vlad is my favorate on here, I Visit all his links

#277 GregW, Oakville on 01.13.12 at 7:36 pm

Hi Nastra, Have you heard about this yet?

“The Department of Homeland Security is set to increase its deployment of of X-ray scanners, already in use on highways, at US border crossings, despite warnings from innumerable health authorities that the devices can cause cancer.”

The thing that I see about this being so bad is the picture I saw was not just of the car inside and through, but there was a person in the car also! The x-rays must be very powerfull to get through all the metal. Just what we want to get for crossing the boarder or just driving around. It’s got to be good for the kids and unborn too!!! The truckers and bisness travalers must be happy about this? ( O I forgot radiation is now good for you, not!) FYI, I just saw the story on the infowars site.

#278 Devil's Advocate on 01.13.12 at 7:38 pm

#263Guy1 on 01.13.12 at 6:28 pm

I am a Humanist. ‘Nough said?

#279 Boombust on 01.13.12 at 7:42 pm

“We are also now financing the complete take over of our country.”

Now? You kiddin’ me?

This country has been selling itself out to the US for YEARS.

#280 Form Man on 01.13.12 at 7:45 pm

#272 westernman

well knock me over with a feather……..I never thought I would agree with you on something……….

#281 Cookie Monster burnin' Kus on 01.13.12 at 7:48 pm

Guy1,
You’ve demonstrated my point. I’m sure you’re a nice guy but your argument starts from a ridiculous premise or two and then deteriorates from there.

The morality of altruism is wrong, your life and your happiness are your highest values that must never be sacrificed for anything, you must preserve you self interest, to sacrifice means to exchange something of a higher value for something of a lesser value or of no value at all.

#282 Kris on 01.13.12 at 7:50 pm

#266 Form Man.

A friend, senior Accnt Mgr at a big Cdn bank, told me Canada has our own flavour of the sub-prime problem.

No – Cdn banks did not lend like predatory US outfits who ratcheted-up rates suddenly on unsuspecting borrowers. We weren’t that blatant.

But Yes – Our banks DID allow too many to borrow too much, exposing many families to future economic downturns.

Not too long ago, the ability to sustain debt on half the family income was a rule of thumb. Nowadays I’ve had bankers tell me 450K debt was okay on 100K family income.. No safety margin whatsoever. Unfortunately families did take up such offers.

If rates stay low for long, and then rise veeeeery slowly, maybe people will get time to catch up on debt, after all? But there are enough headwinds today to warrant concern (world economy; jobs; Boomer effect and unprecedented household debt).

#283 Bill Gable on 01.13.12 at 7:50 pm

This the fate of a number if Canadians? Anecdotal evidence again – quoted from John Rubino ( a brilliant author from Washington State – he and Mr. Turner would agree on many salient isues, is my guess. For sure: demographics. Full disclosure, I have interviewed both Mr. Turner and Mr. Rubino and they didn’t exactky fall off a turnip truck.
Mr. Rubino is making the case for how screwed many Boomers are, and we are now reaping, what we didn’t sew.
“Kathi Paladie, 64 years old, lost her job as an executive assistant at a mortgage company in Tacoma, Wash., six years ago. She hasn’t found full-time work since but works occasionally as a phone interviewer for a political survey firm.

Her retirement savings is spent, and she said her monthly $800 Social Security checks, $100-a-week unemployment benefits and occasional paychecks barely cover expenses.

“If I don’t buy a lot of groceries, then I am OK,” said Ms. Paladie, who is divorced. “I do a lot of puzzles sitting here and watching TV. And I play with my bird. And that’s about it.”

She rarely goes out, she said, “but I’ve got a clean house.” To save money, she sometimes eats Frosted Flakes for dinner. She shares them with her African Grey parrot, Muffin, who also likes the sweetened cereal.

Ms. Paladie hasn’t been to the doctor for five years, she said. She frets about paying rent after her unemployment benefits run out next year. Her daughter lives nearby but doesn’t have the room for her, Ms. Paladie said. “It is kind of a standing joke,” she said, “that if this fails, that I can always move in with them and sleep in the garage.”

The problem of older, out-of-work Americans extends beyond individuals to the U.S. economy. Among jobless people aged 55 to 64 who want to work, lost annual wages exceed an estimated $100 billion, based on the median income of this age group.
Retirement savings losses exceed $10 billion a year, assuming contribution rates of 8% for employees and 2% for employers. Even if only half the people were working, the economy would gain $50 billion a year in income and another $5 billion in retirement savings.

That doesn’t count the lost wages of people who have taken salary cuts to get new jobs.”

#284 Dorothy on 01.13.12 at 7:51 pm

#252 – Devore
“People like Dorothy make the mistake of believing that the bubble bursting does the damage, so “wishing” the bubble to pop is bad. (the “wishing” part being entirely irrelevant to reality) But the actual damage is done during the bubble build up, damage masked by paper gains and fake prosperity.”

You couldn’t be more wrong Devore. When any sort of bubble develops, its eventual pop is inevitable. It is the circumstances leading up to the bubble that do the damage.

It was a combination of speculation, greed, and poor money management, combined with the loosening of bank regulations surrounding mortgages (e.g. 0/5% down payments, 30+ year amortizations) that contributed to the bubble.

But if couples had been more prudent and avoided getting into bidding wars (which contributed to over inflated prices), saved bigger down payments prior to purchase, (which would have resulted in fewer of them sinking so quickly “underwater” once prices began to fall), and bought smaller, less expensive homes (making it easier for them to make the payments in the event one of them lost their job) maybe we wouldn’t all be so worried today.

When I was young I too thought that housing was priced out of my reach, and I too had to rent. But knowing I couldn’t afford to buy in Vancouver (although prices there then weren’t as high as today, they still seemed too high for me relative to my income) my spouse and I found work in an area where prices were lower. We still rented there too in the beginning, but eventually (after saving up the down payment) were able to buy. But our first home was a far cry from what many expect in a first home today. It was a bit of a fixer upper, with an unfinished basement, no garage and only one bathroom. But it was ours and we were very proud of it. I know there are many young people today who’ve done exactly the same thing we did, but my comments have never been addressed to them. They already know about being prudent. Rather, my comments have been addressed to those on this blog who appear not happy with their lot, yet feel helpless to do anything about it, preferring instead to blame anyone and everyone, from the government to baby boomers for their problems.

Although I’ve already acknowledged that many of the problems were caused by government and certain individuals, I refuse to believe we are so helpless that we can’t do anything to help ourselves. If one is in debt, then one needs to practice good money management, which usually includes having to do without something we want if it isn’t a necessity. If one lives in an area where home ownership is unaffordable, maybe a move to a more affordable area should be considered. If one feels underpaid, maybe a new job is in order, possibly in a more remote location where the pay is better. Even though you may not fancy living in the north, it can be a good place to work for a few years while saving a down payment. If you’re not trained to get a job in a place like that, maybe you should consider going back to school. And the list goes on. I’ve always found that if I think about it long enough I can usually find a way to try to improve my lot in life, and so can everyone else.

#285 vultch on 01.13.12 at 7:51 pm

#161 Allastair

very, very well put. i wish i was as eloquent as you were at getting my point across. i agree with you exactly.

people seem to forget history. i don’t mean 10, 20 years ago, but basic human history. society that lives in decadence (and please dont’ tell me that you disagree that we are not a decadent society today), will eventually fall victim to it. look at all the teachings of wise people from the past, be they buddists, christian scholars, or otherwise. they all pointed to a minimalistic lifestyle that was not based on decadence, greed and lack of integrity. as a society, we have lost our way, and we’re gonna learn a hard lesson very soon. i like to work hard and save (put away) during the good times, so i have something during the bad times (just like farming all throughout history). it’s basic, simple and easy to see. people are just people, plain and simple. they don’t think about consequences, until the consequences are causing their world to implode.

#286 DonDWest on 01.13.12 at 7:55 pm

#265Westernman

Only if you go first.

#287 Bill Gable on 01.13.12 at 7:57 pm

Great typing, and spelling.
Exactly – sow.
Some days, I think it’s better, that I put away the Ipad. Apologies.

#288 Nostradamus Le Mad Vlad on 01.13.12 at 8:01 pm


#257 Dan — Thanks! Here’s more . . .
*
Religious Money or how the Divide and Conquer system works; Excuse for a war; Conflict between rich and poor high; Silver Eagle Sales Sales in orbit; Bain Capital owns all these shock and awe jocks, and 6:01 clip The ad that will floor Romney; Italian town “Banks globally sold $707.6 trillion of over-the-counter derivatives as of June 30, about 18 percent more than the $601 trillion at the end of 2010, according to data published by the Bank for International Settlements last month.”; Occupy This Ship Coast Guard called in; Mitt Romney Great liar, so-so politico, and Romney “Romney’s wealth makes him one of the 3,140 wealthiest people in the country — that’s the richest 0.001 percent of Americans. So, he’s not just the candidate of the 1 percent, but the candidate of the 0.001 percent”; France AAA no more.
*
4:01 clip WH holding secret talks with Iran; 3:11 clip Further to the India’s biometric wristband; 8:22 clip “The plan is absurdly simple, Israel kills Iranian scientists and sabotaging Iranian facilities, then follows a false-flag attack claimed to be Iran’s “retaliation”, which becomes the pretext for invasion.” Have they forgotten China, Russia and Pakistan? and John Bolton Sign him up, give him a rifle then dump him in the centre of Tehran; Vintage Wine, yes. Fluoride, no; Af’stan One industry booming. One year profit +133%; Antidepressants can cause damage to unborns; Monsanto sux big time; Child Abuse Interesting that priests call themselves people of God, yet they continually sodomize altar boys / girls and expect to get away with it. So much for religion; One Cause of obesity; 4:30 clip Pharmageddon.

5:26 clip Ron Paul says war with Iran has already been decided by financial elites, who will profit from WW3; 1:35 clip Animals are not stupid. They leave that for humanity; SOPA Designed to kill the ‘net; Herding Instinct Because the west’s economy is broken, the last thing left is war based on lies; And now . . . How disappear from the ‘net; Free Speech In a dictatorship? Eavesdropping Guess bloggers are doing something right!

#289 Dorothy on 01.13.12 at 8:04 pm

#264 – Arshes
I’m sure there ARE people who’ve practised good money management who still can’t afford to buy a home, particularly if they live in a place like Vancouver where prices have risen beyond all reason. But frankly, who WOULD want to buy into a market with such ridiculously high prices? I know I wouldn’t.

That said, there are also many who claim to be priced out of the market, even in communities where prices are more reasonable, when in actual fact it is partly their own fault.

I know many who live a very nice lifestyle, that is NOT conducive to saving up, who fail to see that they are the author of their own problems. Nothing in this life worth having comes without sacrifice (unless you happen to be a millionaire). Yet many fail to recognize that fact.

#290 Crash Callaway on 01.13.12 at 8:06 pm

Hey everybody relax,

Soon F will mandate that every home sold comes with a senior and you’ll have to feed it and promise to take care of it.

#291 SaggyBottomBoomer on 01.13.12 at 8:21 pm

“We keep on being told that religion, whatever its imperfections, at least instills morality. On every side, there is conclusive evidence that the contrary is the case and that faith causes people to be more mean, more selfish, and perhaps above all, more stupid.”
― Christopher Hitchens

#292 Daisy Mae on 01.13.12 at 8:26 pm

#184 LIVE WITHIN YOUR MEANS: “…Mom stopped going to church……as I understand the term, I’m an agnostic atheist.”

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

Sounds like my experience! LOL Attending Sunday School…going thru the motions….and finally coming to terms.

#293 Popeye the sailor man on 01.13.12 at 8:29 pm

http://realestate.yahoo.com/promo/an-american-castle-in-the-ozarks.html

1,800,000 for a 12 BR 15,000SF house on 17 acres

Lets see; 12 rooms X 52 weeks = 624 people to have a one week getaway. 1.8M/624 = $2,885 each or $15/month

or 12 X 12 months= 144 people for one month getaway
1.8M/144 = 12,500 each or $64/month

or 12 people to live in a cool house for the whole year or have the whole house for a month each.
1.8M/12 = 150,000 each or 768/month

I like the 1 month getaway for 12,500

#294 Daisy Mae on 01.13.12 at 8:34 pm

Mister Obvious on 01.13.12 at 1:36 pm
#174 Devil’s Advocate

“Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”
————————–

No, I’m not sure. But I don’t care. However, if I did care, the solution would be quite simple. I’d delete greaterfool.ca from my favourites and refrain from visiting this site.

Me too. — Garth

*********************8

It’s absolute crap to suggest such a thing, DA. Get a grip.

#295 neo on 01.13.12 at 8:36 pm

Things take longer to develop than anticipated

and resolve faster than expected…

#296 Daisy Mae on 01.13.12 at 8:51 pm

dad on 01.13.12 at 2:48 pm
I’ve always assumed DA was Garth

I just had an accident. — Garth

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

Garth, you are PRICELESS! LOL

#297 Guy1 on 01.13.12 at 8:54 pm

Westernman, some elements of organised religion can be a concern, but not all – some people are good and some are evil regardless of what institutional affiliation they posess or support. And in quoting scripture, I was merely offering something of a contrast to your statements and tone.

#298 P & T S on 01.13.12 at 8:59 pm

Could be some good buying opportunities post 12/21/12??

Since we’ll all still be here “post Apocalypse” I’m predicting a “softening” in PM prices . . . . .

#299 Daisy Mae on 01.13.12 at 9:01 pm

#237 Noah on 01.13.12 at 4:11 pm
Garth,

I know what this is all about. Flaherty and the bunch are playing with your head. They don’t like you.

No? — Garth

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

They’re slowing winding up with egg on their collective faces…this should sink them in the next election which can’t come soon enuf.

#300 Stevenson on 01.13.12 at 9:03 pm

Lets just see a year from now how the market is. If the prices are higher then the current market price. Looks like some of you will have been “fooled” AGAIN. It seems like a lot of you are certain that this moment will come for you. An unavoidable correction in the market. Well good luck with that because Canada doesn’t care if you can’t afford.

Read the news and understand what sells. This news about RE price correction in the papers is from the same companies that claimed the prices will continue to go up a few months ago.

#301 Daisy Mae on 01.13.12 at 9:05 pm

#240 OKANAGAN RENTER: “One day, after yet another heated discussion, he simply said, “Well, I think the devil could very well have placed those dinosaur bones there to confuse us…”

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

So funny!

#302 GregW, Oakville on 01.13.12 at 9:21 pm

#73zman, re: waiting to read on why rrsp…
You don’t need to wait if you choose. Invest 1/1750 of the 35k, $20 now to find out. G tells all in his book ‘Monet Road’. And It helps cover cost to run this valued blog, is my understanding BTW.
You’ll be glad you did!

#303 Devore on 01.13.12 at 9:26 pm

#284 Dorothy

If, if, if.

If everyone was smart, no one would be stupid.

The modern debt economy has turned the owner-occupied house into an investment. Whether you agree or not, you have to treat it as an investment too, or you’ll lose your shirt. As a highly leveraged investment, it is also highly volatile. The volatility cycle is lengthened greatly by the illiquidity and transaction costs of the real estate market. It is still volatile, because no one can possibly tell you what a house will cost in 10 years. House prices, unlike most stocks, are not based on their fundamentals, like rents and incomes, which are predictable. Prices might be up, just as likely as they might be down.

This is no reason to throw your hands up and ignore economics. It’s just more reason to pay more attention, take more time. You can’t just buy, and hope you’re still ok in 5 or 10 years. Because it’s not just a house anymore.

The return to tighter lending rules, shorter amortizations, higher downpayments, and higher rates will bring about more stability and normalcy. Everyone should want this to happen. Yes, it will make prices go lower. That’s the point. Yes, it will suck. For everyone. But it will make things better when families can follow your prudent rules and get themselves into a reasonable house without stretching themselves to the limit, or worrying about where in the real estate cycle the market is. If houses were shelter again, they’d be as boring and predictable to buy as toilet paper. You need/want one, you buy one (assuming you can afford it).

A wealthy and prosperous society should pride itself on affordability of and accessibility to basic needs, like food, shelter, medical care. High house prices are good for no one, regardless of how affordable the monthly payment may be. That’s not being prudent. That’s a wealth trap.

#304 Just(not)AnotherSheeple on 01.13.12 at 9:29 pm

Re: Bond junkie #149, 224, 226, 241

You said “Anyone on this blog do any research” and also “In today’s global marketplace, stability is king. I sit on a desk where everyday sov wealth funds, central banks, and extremely wealthy individuals all come to us to beg for a safe place to put their money, accepting a very meager return for our service.”

Yes, we do research…

You know there was a frequent user (young guy) with if I remember correctly the handle “LH”. He was also in the bond trading, boasted all the time that he has 4 houses in DT Toronto (cash flow+) and in fact was looking into buying another property (perhaps with his 2011 bonus). He also was adamant that there wont be any price corrections…

He is now MIA but the blog has another bond traded.

And you now accept the fact that there will be 15% correction but it is not biggie. For parasite from the finance world it is not biggie but it will be devastating for the real people out there, especially if it turns out to be more severe that you are ready to accept right now.

So perhaps Garth can do a quickie IP address check to see if the two bond traders are …. somehow related.

Now – any estimate of the amount of sovereign debt to be rolled out this year.

#305 Ballingsford on 01.13.12 at 9:30 pm

I need to get into this 2.99% mortgage as house prices always rise. May as well get some granite and stainless steel too. I am too cool to be a renter. My friends will think I am so cool. They might invite me out for a drink or they can come to my place and drink my liquor in my built in bar.

I have the chance to be soooooo kewl!

Thanks BMO!

NOT!

#306 Goldenfox on 01.13.12 at 9:30 pm

As I said over two years ago, all you who are waiting for int. rates to rise and housing to crash as a result, will wait a long time. By the way, if int. rates do rise, a housing crash will be by far be the least of your worries!

http://www.financialsense.com/contributors/rob-kirby/2012/01/13/the-dollar-centric-derivatives-complex

#307 TurnerNation on 01.13.12 at 9:32 pm

Weekend off topic, and speaking of scams (the billionaires on TV – ex-presidents, rock stars – begged for our money. Something seemed strange to you?)

Haiti: Two Years After the Earthquake, Where Did the Money Go?

Donovan Webster
Global Post
Friday, January 13, 2012

Where those billions went following the 7.0-magnitude earthquake that left a government-estimated figure of 220,000 people dead — and at least 1.6 million more homeless — remains a confounding mystery.

“In the end,” says Robert Fatton Jr., professor of government and foreign affairs at the University of Virginia and a son of and authority on contemporary Haiti, “if you read the reports — the UN Report and so on — you’ll see that actual Haitians got less than 1 percent of all the American money pledged.”

In other words, Fatton explained, “99 percent of [the US money spent] went back to the US military, the State Department, NGOs and contractors. The money was clearly intended for Haiti, but it ended up returning to the same place it came from.”

Full story here.

http://www.globalpost.com/dispatch/news/regions/americas/haiti/120110/haiti-earthquake-aid-rice

#308 Westernman on 01.13.12 at 9:35 pm

Guy1,
Believe what you want,sir,but I think a good case can be made that humankind is a lot closer to risen apes than fallen angels…
DondWest,
I have no intention of jumping off a bridge as I have no difficulty whatsoever making my life better every single day.
You, however, sound utterly helpless and hopeless…hence the suggestion – just trying to help out you know.
Form Man @ # 280,
Looks like we agree on something…don’t spread it around as I have a reputation to protect…

#309 InvestorsFriend (Shawn Allen) on 01.13.12 at 9:40 pm

PLEASE PAY HOMAGE…

Number 248 Devore says…

Like Investors Friend, you deem to dispense pearls of great and timeless wisdom to the great unwashed masses, and expect gratitude and respect in return, which is naturally due. When countered and snubbed (how dare they), you turn petulant and petty

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

Well, okay, at least Devore understands where I come from.

(I am not particularly looking for traffic to my Site, I just have a need to share my great wisdom with the great unwashed (and uneducated in finance matters) mass. And I get a kick out of the response… Anyhow You’re welcome!)

#310 a prairie dawg on 01.13.12 at 10:00 pm

#174 Devil’s Advocate

“Are you absolutely positive there is no hidden agenda, no matter how passive, in Garths development and maintenance of this blogsite?”

– – –

If we can see YOUR agenda here, don’t you think we’d be able to see HIS agenda here too?

Really….

#311 truth hammer on 01.13.12 at 10:08 pm

High taxation impoverishes the nation.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/no-matter-how-much-we-earn-wealth-always-seems-just-out-of-reach/article2300594/

No matter how much you earn the governments weasles steal 80% for ‘program spending’….in reality all the money is blasted down the crap hole of supporting the civil service…..none gets to the people who need it.

Hey..thats fine if you have a DB pension with all the perks……but for the starving kids and seniors…underemployed and small businesses life in Canada is more of a struggle every year.

So what does the governments brain trust say to people who can’t afford to live in their birthplace…….? Bugger off appraently…because nothing is being done to alleviate middle class poverty.

So….can’t afford to go to school…the government will import someone who’s paid for their education elsewhere in a lower currency and will gladly take your job. Less money spent on training locals means more DB’s for the fat and greasy ….right?

Can’t afford to have kids……the government will gladly open the doors to anyone who has two wives and fourteen children……and hey…look at the economics of that one….support payments provide jobs to civil servants….a virtuous circle jerk ..right?

Wages not keeping up with inflation?…no prob….the governments job stats are stable because theres 300,000 new Canadians who’ll gladly keep wages down.

#312 Guy1 on 01.13.12 at 10:18 pm

Re. #281 Cookie Monster burnin’ Kus on 01.13.12 at 7:48 pm

You are starting to get into mud-slinging by using words like ‘ridiculous’. What do you want me to say “well, oh ya, your arguments are…!’ I won’t. It only would cheapen the conversation.

A position of altruism is neither right or wrong; it just is. We are socialised creatures; if we want to act according to ways that help others, whether we perceive the acts as self-interested or self-sacrificing, we can.

So, if you wish to advocate for a form of Adam Smith’s notion of self-interest, so be it, but I prefer the Pauline phrase “love seeks not its own interests.” This debate has been going on for eons, but I can recommend a good book by Roderick Hindery: “‘Indoctrination and Self-deception”.

#313 disciple on 01.13.12 at 11:47 pm

Blacksheep: This is an important discussion we are having, I’m sure others are keenly interested as well. Now as a member of a secret society, you either are a shill for the controllers or you are honestly seeking the truth. I will assume the latter and proceed to engage you…

You recognize the matrix of lies, but you believe you have freed yourself. I assert you haven’t yet because the last few statements you made here are very troublesome, self-contradictory, full of hubris, and plain wrong. Perhaps you cannot see it yet but humility is the beginning of wisdom. That is why they blindfold you and rip off one sleeve during your initiation.

“I have taught my young adult daughter:
Do not to believe what I believe.
Do your research and form your own opinion.
Thankfully, she is wise beyond her years.”

But you HAVE taught her what you believe, which is not to research but to merely survive, and to believe wholeheartedly in social Darwinism, the most destructive religion of them all. If you had allowed her more freedom of thought than you allow yourself, she would have come to the conclusion that mass is energy and energy is mass.
This concept alone defeats the antics of Darwin and his bankster friends. Yes, that’s right, look it up…The matrix of lies is self-created.

The controllers tell you that you are merely a beast and they then give you claws. But disciple is here to re-affirm for you that you are certainly not a beast. So put away the claws. Instead, pick up the act of reflection and the study of the classics. Why do you think the controllers seek to hide their wisdom? Pick up the legacy of knowledge handed down to you from the philosophers of antiquity and realize the enormous wealth within you. Become a disciple… join me…

#314 BigAl (Original) on 01.14.12 at 12:40 am

Re Media

I was watching a major national daytime talkshow. It was a wedding makeover for 3 brides-to-be. All were excited, showing off their engagement rings and all. I was surprised to see one of them was someone I know. I had no idea she was engaged, so I called her that night to congratulate her. She laughed and said it was just a gig to get a free makeover (I’m not sure whether she was paid). She explained it was all phony. Even the rings were props.

On the show they just pretended they were all brides – no disclaimers, nothing. But why did they have to pretend to the audience they had real brides-to-be? Why not just say they had models on?

Not a big deal because the show was primarily about makeovers, but this sort of thing just makes me mistrust anything you see on TV or media in general – especially real estate or other corporate interests. If they aren’t truthful even in this example where they didn’t even need to be, it must just be in their blood and deeply ingrained in media culture to just lie about everything, even where they don’t really have to, like in this example.

#315 BigAl (Original) on 01.14.12 at 12:54 am

#311truth hammer

Who do you think is pushing and lobbying their buddies in government for the looser immigration, more foreign workers, etc? Its not the average gov’t worker who has absolutely no power over the laws and rules of the land. It’s your big private business buddies who scream, yell, and demand the government let them bring in whoever they want, get rid of all immigration rules, and hire as many temporary foreign workers as they want, and not just your low-skill Tim Horton’s and agriculture workers…engineers, technicians, trades, finance, hr….everything under the sun. What do gov’t workers have to do with these policies?
But it appears, that with your comments, the corporate/politician tactic is working like a charm. You (an average guy I assume), blame gov’t workers (average people) and then I get into the mix (another average guy) and we’re all finger-pointing and screaming at each other. All the while, the pushers of these policies, and the politicians who make them the law sit quietly on the sidelines undermining all of us. Amazing.

#316 Cookie Monster burnin' Kus on 01.14.12 at 5:52 am

Guy1, calling your premise ridiculous was not mud-slinging at all, it was a logic bomb making the point that it’s pointless to argue against a religious position using reason and logic because by definition a religious position is irrational whose premise requires a leap of faith from the realm of reason and logic to the realm of the unreasonable, unknown, unknowable and supernatural.

I believe Jesus Christ was just crazy, could you imagine someone walking around today claiming to be the son of God? What would people think? Aren’t we all children of God? Why was Jesus the son of God and not us, why not everyone? Maybe Mary was a frisky vixen and lied to Joseph. And what a lie it was! First proof of if you’re going to tell a lie, make it a big one!

See, a lot of crazy questions that require a lot of crazy answers.

#317 pathrik M on 01.14.12 at 2:31 pm

BMOs bank stress test may be a little optimistic too – 25% as a worst case scenario?
The US market reduction was higher than that.

#318 Raging Ranter on 01.14.12 at 5:38 pm

@284 Dorothy, so it seems you’ve come around completely, and are now agreeing with us malicious “doomers” who are hoping for a substantial correction before the bubble does further damage. What took you so long?

@285 Vultch, thanks. I agree we live in decadent times. And we will pay dearly for it. This is not a moral or religious pronouncement. Simply an observation. Way too much gorging on home equity, using debt to pay for vacations, new i-toys, SUVs, what have you. Way too many bidding wars on poorly constructed McMansions. And an always increasing supply cheap credit enabling us to continue doing all of the above.

As a result, our relationship with debt and consumption has become dysfunctional and destructive. We want everything now. Even if politicians and central bankers tried to fix things, we wouldn’t let them. We’d turn around and blame them for the severe side effects (withdrawal pangs?) such preventive actions would cause. Because whatever fix they came up with, if it were genuine, would involve an immediate lowering of our standard of living. They wouldn’t dare. Therefore, it will run its course. And blow up in our faces. I could be wrong about this. I hope I am.

#319 Raging Ranter on 01.14.12 at 5:50 pm

Truth Hammer, you are so right. Canadians can’t – or won’t- have kids anymore. Those who can afford them have become too selfish or too self-absorbed to bother. The rest can’t afford to have them. So we bring in almost 300,000 immigrants each and every year, and pray that they will not adopt our “modern” ways and attitudes until after they have produced at least one more generation of low wage slaves.

Much like inflation (i.e. the RE bubble) which creates the illusion of wealth, immigration creates the illusion of an increasing labour supply. But like inflation, the boost in young workers is temporary and fleeting. And the only way to keep the illusion going is to accelerate the trend. This is why 3% inflation now becomes 4% next year. It’s why 225,000 immigrants in 1990 became 275,000 today, with increasingly shrill screams about our coming demographic crunch, and the labour shortage. The answer most often proposed? More immigration.

#320 Don on 01.14.12 at 8:34 pm

Smoking Man #180

I consider myself to be one of those critical thinkers as I do not subscribe to the heard it 3 times it must be true group.

I am also branded as a Conspiracy Theorist. So now I say nothing and just watch the herd. The cycle will repeat and the truth will return – we just happen to be in the time of the idiot.

Funny thing is those with handles referring to Mary Jane seem to be the most sensible comments. Who would have thought.

and to those who insist on rates being lower, what happens when they rise, people who own bonds will call in the IOU’s sooner or later.

#321 Don on 01.14.12 at 8:45 pm

My latest comment – should be clarified

“Funny thing is those with handles referring to Mary Jane seem to be the most sensible comments. Who would have thought.”

That is not to say that others are not sensible as well, was just making an observation based on this latest posting. Others such as Devil’s advocate and Investor friend are just children.

#322 Don on 01.14.12 at 9:02 pm

“Smoking Man
257 Dan on 01.13.12 at 6:00 pm

Nostradamus Le Mad Vlad is my favorate on here, I Visit all his links”

Other than Garth of course – I too enjoy Nostradamus and his links. And spelling mistakes are a sign of intelligence pointing them out are a sign of jealously – lol

OldMac – Your comment sums up the elephant in the room. Thank you.

#323 Don on 01.14.12 at 9:42 pm

Disciple – couldn’t agree with you more.

#324 TurnerNation on 01.14.12 at 10:00 pm

In Soviet Russia, test stresses you!

#325 disciple on 01.14.12 at 11:30 pm

#212 Mister Obvious… have you been replaced by a clone? Your latest comments are not worthy of the usually clear-minded Mr.O.

“Both types of individual are capable of being stellar citizens.” – this is not the objective, why would you make this wrong assumption? Do you work for the gov’t?

And then you say: ““Who made God?” or perhaps, “Did Adam have a naval?” – these are not thought provoking unless you’re ten years old. Sorry. Can we have the real Mr. O back please?

#326 Calista on 01.15.12 at 11:26 am

The bubble discussion rages on: http://business.financialpost.com/2012/01/13/is-real-estate-overheated-the-bubble-debate-rages-on/

#327 Dorf on 01.15.12 at 4:38 pm

Garth, if it makes you feel any better….I read your book and it was fantastic. I wish I had the opportunity to read it much earlier in life. When I got it, a high ranking financial manager who is the son of a friend of mine, flipped through it for awhile. He said, this is a really good book for you to read, I’m impressed with the author. He doesn’t know who you are or care. I didn’t bother to tell him.

I lived through the Nortel moments, and depite my urging to stay away from it (I am a telecom analyst and IP Telephony Specialist), my lawyer friends disregarded me as “what the hell do I know” (in spite of studying just as long as they did) and gorged on it anyway. So, I know how you feel when you give somebody the information they would love to have, but because they got it, they ignore it. They would have listened to you if they had to beat it out of you.

Know this… after reading your blog avidly for a long time and reading your book, my wife and I have a $120,000 mortgage on a $175,000 home, we both have zero debt, zero payments, our mortgage payment is $750 month and I make $75,000/yr and she makes almost $50,000/yr. We own outright everything that we have, and everything we want is planned for and paid cash. I treat everything that you say, as inside information. I pay attention, I listen, and I follow your expert advice.

Somebody listens…..because I realize the value in listening to somebody who obviously knows WTF they are talking about, and I’m smart enough to recognize that person when I see/hear them.

Some of us will continue to drink the Nortel Kool-Aid, and some of us will continue to appear in court, not realizing that the statute of limitations has expired on the charge they are presently trying.

Oh well……

#328 betamax on 01.15.12 at 4:56 pm

#149 Bond junkie: “at the margin, you guys are ALL BUYERS.”

Funny, it didn’t work that way in the US when prices tanked. Or anywhere else.

#329 betamax on 01.15.12 at 4:58 pm

#136 Frank: “I do not believe there will be no collapse only a correction.”

I don’t believe there will be no collapse either.

Not all bulls are stupid, but the stupid are invariably bullish.

#330 betamax on 01.15.12 at 5:00 pm

#146 Waterloo Resident: “What the HELL does [email protected] refer to ?”

Dorothy, apparently.

#331 Dorf on 01.15.12 at 6:03 pm

#320-Don…”Funny thing is those with handles referring to Mary Jane seem to be the most sensible comments. Who would have thought.”

I would. 140+ IQ, 3 trades, best in class in primary trade, and chronic.