Choices

“Let’s just say, Garth, that I fought off the need for my wife to nest for 2 years.”

I can tell by the way Ken started his email to me that the guy has a problem. And a tude.

“We had to move in 2010 due to a job loss and sell the house we left behind in our home city.  We made enough on the sale for a small down payment whenever we decided to buy again. I found a job back home last month and decided to move back (Lethbridge AB).

“My wife told me that she never wants to move again and if I want to stay married we better buy a house (isn’t love grand?) I am in my mid 40’s and just got my mortgage approval on Wednesday from the bank. – the day before F dropped the housing bomb.  I will put 5% down with a 30 year amortization.  So we are looking at me carrying a mortgage well into my 60’s.

“I have 100K in RRSP so I have a retirement nest egg started.  We have RESP for the 4 kids so hopefully they have their education paid for.

“Tell me, did I just hang myself with debt on an asset that isn’t going anywhere but down.  Most of what you hear is about Toronto and Vancouver, what about us that live in areas of 100,000 people who worry that we’re screwed?”

Good question, Ken. But the answer won’t save you, as we’ll discuss in a moment.

As for the events of this week, it’s important to understand the context. In their clumsy, ill-timed and jackbooted fashion, the feds moved deliberately to squish housing demand. It was done for one purpose, which is to slow the pace of borrowing and avoid a potential debtageddon in a few years when a growing economy brings seriously higher interest rates. There was a choice to make: risk a housing correction now which retards economic growth, or keep horniness alive and wait for a bank-kicking US-style meltdown in 2015. Now we know the answer.

The effort was coordinated between the Department of Finance, the Bank of Canada and the Office of the Superintendent of Financial Institutions. It was orchestrated for late June when the housing market slows and would be more able to cope with shock.

It was also deliberately done the day before Parliament rose for the summer, so there would be virtually no political scrutiny. After all, this was a moment of monumental failure for F. He was forced to retreat 100% from his 0/40 policy and usher in draconian measures to staunch the damage he allowed to occur. In the past four years, thanks in part to cheap money, lax lending standards, and pro-real estate policies, housing has become unaffordable for millions of middle-class families. During this time, in addition to sanctioning 40-year mortgages and zero down payments, F increased withdrawals from the RSP homebuyer plan, brought in a first-time buyer’s tax credit and repeatedly stoked the market by insisting runaway prices were not. “There is no bubble,” he said.

But there was. He knew it. Mark Carney knew it. You knew it. And now the real estate market will be neutralized in a way that will shock property virgins and house lusters everywhere. Shorter mortgages have the same effect as higher mortgage rates. The death of cash-back loans means no more 100% financing. Tighter qualifying for borrowers and home equity-takers means fewer equityless buyers and wannabe flippers. Less CMHC insurance equals specker pain.

Yes, Ken, the major rivers of blood will flow through the GTA and Vancouver. Big-city condo markets are ground zero. Lots of million-dollar homes in Van will be heading south in a hurry. The last of the bidding wars will end this weekend. Condos have been bought in buildings never to be erected. Sellers will be forced to fight for buyers. A long, protracted process has begun, taking us towards a trough of unknown depth.

But what about Lethbridge?  I know sales are up about 19% over last year and prices have romped ahead almost 9%. This is exactly the kind of activity F and the peckerettes are trying to curtail with this week’s coordinated assault. And they will likely succeed. This time next year the local numbers will look far different.

But who cares? This is personal.

You have kids, which makes renting difficult. You have a nesting wife, which makes it impossible. You can buy a Harley and head south, or suck it up and buy your family a home. My point is this: you made a decision to get married, have four children and buy real estate. That explains why, in you mid-forties, you have only $100,000 saved and a measly 5% down payment. It’s all about choices, Ken. You made ‘em. You live with ‘em.

Will the house you just bought be worth less in a year? Probably. As long as your wife knows that, and can live with a complete erasing of your equity, then so be it. Just do what you can to improve the situation you’ve created. Get a weekly-pay mortgage to compensate for the long am. Write a family budget so there’s money every month for TFSAs. Make sure the retirement fund isn’t in blood-sucking mutual funds. Don’t renovate the damn basement. Get a part-time job. Same with her.

Make this house a symbol of your partnership, not your entitlement.

Forget F. Stop reading this moany blog. Go home.

255 comments ↓

#1 arcs55 on 06.22.12 at 9:10 pm

Garth, you’ve been bashing F a lot for the steps taken yesterday. Just out of curiosity, how would you fix the current state of affairs? I understand it’s F’s policies that got us in to this bubble, is he doing well getting us out?

#2 Fred on 06.22.12 at 9:12 pm

Garth after yesterdays announcement from F, what do you think they will do with the interest rates now? We were expecting them to go up by around fall…still think that will happen?

#3 50% correction predictor on 06.22.12 at 9:12 pm

Can’t believe I’m the fi*st!

Anyway, I see asking prices are being cut left and right in the HAM area in GTA!

#4 Where is FUUUURST???? on 06.22.12 at 9:13 pm

Where or where is the bubble bursting poet FUUUUURRRRSSST? If you are reading this, we miss your poems on the biggest bubble burst since the 1634 Dutch tulip mania. SOS, calling Furst back to this blog!

#5 Retired Boomer - WI on 06.22.12 at 9:15 pm

Hold off til the ‘dust settles from the new changes’ you don’t NEED a house. A wife, either if that is how she is measuring her man…

#6 Steve Thompson on 06.22.12 at 9:16 pm

While we are perpetually being told that Canada’s banking sector was the crowning jewel in the global banking system over the past five years, in fact, this article shows that without a massive bailout, Canada’s banks would have been in the same sad shape as many banks around the world:

http://viableopposition.blogspot.ca/2012/06/canadas-healthy-banking-system-fact-or.html

What is most concerning about this bailout is that, at its peak, the size of the bailout exceeded the market capitalization of some of the banks by a wide margin and that taxpayers could well have been on the hook for the large CMHC bailout funding.

Things could get really ugly for Canada’s banks if their portfolio of mortgages collapses in value.

#7 lilyflor on 06.22.12 at 9:22 pm

i swear i never want to buy a house again! lol

#8 A in Vancouver on 06.22.12 at 9:23 pm

Good

#9 JO on 06.22.12 at 9:25 pm

By end of 2013/early 2014, prices ought to be down 15-20 %. Don’t worry, if things get really out of hand or keep dropping into the spring of 2014, they will in desperation try to goose the market again to try and re ignite the bubble in time for the next Fed election.

CMHC’s role is to help inflate housing, not make it affordable as the liars claim (I am a lender too and did my first CMHC deal at 22 yrs old for a world class lender..although since 02 I only process 3-5 year if that).

By financializing the housing market through the NHA (CMHC) and artifically low interest rates as well as other favourable policies, the feds/banks and other lenders/RE execs were lucky to find enough people willing to take the debt which inflated prices.

Mtg debt and debt overall has been rising about 2-3 times faster than GDP which itself was inflated because of the junk debt bubble.

What you ended up with is essentially a massive tax being imposed on the majority of Canadians as new buyers took pledged more and more of the artifical price rise to the banks as interest through larger mortgages. This helped put excessive pressure on housing costs and rents = cost of living and doing business.

The primary benficiaries were the senior execs in the FIRE industry and the public sector as property values are inflated and the fake prosperity created a tax windfall. Got to love the system – fool the population into believing they are richer but in fact taxing them.

STAGFLATION is the primary theme for the next 7 yrs or so. Gov’t and banks will try to find ways to get most of the 50 % of your income they don’t already have.
JO

#10 Dan in Victoria on 06.22.12 at 9:25 pm

Where did you get the picture of my Dad?

The big boss has been on me lately about the house deal, just about wore me down.
Explained the “F” bombshell 5 minutes ago to her.
Hmmm lets just stay renting for now was the answer.
Ha, dodged another one for now.
Good Luck Ken I know what you are going through……

#11 A in Vancouver on 06.22.12 at 9:26 pm

Garth,
How much do you think the new mortgage rules will affect Vancouver market?
The price went up like crazy in the last few years. Many people just buy properties as their business. I head a lady from BMO bank bought more that 20 condos in Vancouver for rent. I dont know how she can afford them.

#12 Kevin Clarke on 06.22.12 at 9:27 pm

Great blog Garth. And I was amazed at how gentle you were with Ken and his wife. They are the average Canadian family, I am afraid. This is going to turn ugly. People have no idea.

#13 MJG on 06.22.12 at 9:27 pm

“So we are looking at me carrying a mortgage well into my 60′s.” ?? Say what? Why?

Tell the guy that every time his term comes up to shorten the AM! This is a no-brainer.

#14 vinny on 06.22.12 at 9:28 pm

Vow! Powerful post and as always hat off to you Garth….

#15 Freedom First on 06.22.12 at 9:28 pm

Great post, and pic.

#16 truth hammer on 06.22.12 at 9:30 pm

‘F’s lady fart on regulations has done nothing except make it more likely that Ken will collapse his kids RESP’s well before maturity. In fact I have had many humorous anecdotes from a branch banker aquaintance about an awesome number of ‘hopefuls’ cashing in the bairns future for a new truck or vacation within a short time of opening the account.

Ken will see his ‘investment’ collapse in the near term….what the future brings no one can guarantee…..hyperinflation does funny things to people sense of ‘savings’. At least the kids will have a home…..but probably have to grow up listening to Ken and his wife argue at the dinner table very night about their miserable life in debt.

If the persistently unpopular story of a mass exodus from after school entertainment holds up then Kens kids will join the millions who don’t play hockey, soccer, dance, act….etc etc etc because of the debt slavery that the parents have been burdened with.

Also they might grow up with taking no lunch to school……relying on passing the hat for school trips and supplies…..seeing Mom and Dad wrestle on the front yard drunk every saturday night…….going to the food bank for groceries…..reality in the burbs is really ugly.

No ‘extra’s’ from Grandma these days…she’s tapped out because of the ZIRP and the CRA stripping her naked and gorging on the corpse of her fixed income savings account.

Ken is screwed…..like so many other Canadians who don’t work for the government…..if he did he would’nt be writing for advice.

‘F’ is closing the barndoor after the horse has bolted…..guys like Brad Lamb have suckered more than 80% of the population into ‘HomeMoanership’.

Hah ha so funny….your picture reminds me of a time when a top ranking ‘National Policemen with yellow Striped Pants’ who moved into my CDS came to ask me for advice on how to fit his 24ft long supertruck into his 20 foot SXS garage…..I jokingly told him to knock down the wall adjoining garage to living room…..I’ll be damed if he didn’t follow my advice…..what a douche…..how do you get that high in an organization that allows you to carry a gun and get that stupid? Good thing he moved shortly after his kid started to shoot kids in the area school yard with his BB gun….psycho’s don’t fall far from the tree eh? I should have kept the letter from the force saying it was all a big misunderstanding. I wonder if Mrs Djikanski or Mrs Bush and all the other victims of irrational institutionally sanctioned violence got the same letter?

#17 LJ on 06.22.12 at 9:31 pm

Excellent post!

#18 Jay Dee on 06.22.12 at 9:35 pm

THIRD!!!!!!!!!!!!333

#19 Steven Rowlandson on 06.22.12 at 9:35 pm

I would say Ken and the guy in the tree need to take a different approach to the problem at hand.
Always let the big head do the thinking and be aware of what your doing. It is just too easy for people too go through life on automatic without doing much thinking and letting the hormones govern ones behavior..
Ken should wait awhile untill prices drop so that he can get a better deal and save on interest charges.

#20 Jay Dee on 06.22.12 at 9:35 pm

and FOURTH!!!!!!444

thats it have a great weekend…..

#21 Amazed on 06.22.12 at 9:37 pm

Interesting story.. Sadly ken is probably doing better then most people. Afterall he has rrsp and resp money saved. Choices indeed.

#22 MarcFromOttawa on 06.22.12 at 9:37 pm

Not first.

#23 The Gospel of GARTH on 06.22.12 at 9:37 pm

Garth 10:1 “And it came to pass that the words of the bearded mystic oracle, lone voice of financial reason in the HELOC infested land of Canada came to pass.
10:2 Many mocked the prophet and his followers (known as the blog dogs)during the run up of the boom.
10:3 But the day did come spoken of by the bearded oracle.
10:4 There was much weeping and gnashing of teeth in the HELOC infested land of Canada.

#24 Not buying it on 06.22.12 at 9:40 pm

Very nicely stated. Thank you for running this blog and educating some of us about the perils of the financial world and providing a counterpoint to entrenched attitudes. I think as a society we need to move away from thinking about real estate as the road to riches, and instead think of it as one potential road to happiness. I had mentioned to a family member that was in awe of the North American lifestyle that in Canada some people can feel rich earning low five figures a year and some people can feel poor earning seven figures. It’s all about how you look at it and what you deem is important in your life. If your partner is not satisfied with what you bring to the table, then there may be more serious issues at play. When a couple finds itself in a difficult situation, it can be an opportunity to make the relationship stronger. The key is to look for what can strengthen the relationship. And, it certainly isn’t money!

#25 Westernman on 06.22.12 at 9:42 pm

Well Ken, you have two choices …
1. Change your name and flee as far as you can and just forget ( if you can ) about the giant mess you made of things..
2. Put your slave shackles on, paste a fake smile on your face and gird your loins for about 30 – 40 years of abject slavery…
You’ll never hold it together for that long anyway – you’ll break mentally long before then…

#26 eagle eyes on 06.22.12 at 9:42 pm

Are they trying to orchestrate a soft landing for RE like China? How’s that working for them?

#27 James on 06.22.12 at 9:47 pm

Yesterday and today’s blog were great. Thanks for the placing this week in context and sharing your thoughts. I hate weekends as Garth gets some R&R from this blog!

#28 DJB on 06.22.12 at 9:48 pm

Ken only has 5% down so he really has no skin in the game. The other point since he is in his mid 40’s with a 30 year amortization it is almost like a long term rental but with the taxes and maintenance. The bank as his landlord.

I wonder if he will celebrate the mortgage document burning day wearing depends, sitting in his walker chair?

#29 Debtfree on 06.22.12 at 9:52 pm

I’d add Ken . Grow a huge garden . That’s what we did when were rowing your boat . Head down shoulder to the wheel kid .
That picture . Is that the Tory strategy chief ? They are making friends with the medical profession from coast to coast to coast and beating on the very refugees they let into the country. Tony clement looked and sounded like an idiot today but then he usually does. I guess they thought . Who cares about refugees . Hell they can’t even vote . I can just hear them chuckle and say its a freebie.

#30 pat on 06.22.12 at 10:05 pm

One big prob is the way people trust what they are told. The banks put the risk directly on the taxpayer so they dont care how much risk is invloved and the goverment not only allows it but supports it at least this goverment. Which means less money for jobs job creation and stupid meaningless stuff. Hm what could possibly happen ?

#31 Mean Gene on 06.22.12 at 10:06 pm

Some handsome double-wides for sale in Lethbridge.

#32 East Van on 06.22.12 at 10:06 pm

Excellent analysis of the politics behind Fs bomb.

#33 John on 06.22.12 at 10:07 pm

Arcs55 wrote:

“I understand it’s F’s policies that got us in to this bubble, is he doing well getting us out?”
———

Just so it’s perfectly clear, this is people’s understanding of the Canadian real estate bubble. And that’s even if they get that far. Would you not say that’s beyond belief?

Now imagine the opinion Goldman Sachs et al would have of the masses. They are very aware of the “Arcs55” horizontal base. The political-corporate-banking machine moves cynically forward.

Anyone care to take a crack at the question? What can F do to get us out of the darn mess he created. Love to hear the answer to that one.

#34 Not 1st on 06.22.12 at 10:07 pm

Garth, you forgot to mention who foolish boomers are going to sell their oversized mcmansions to now that 30% of the buying market is toast.

As far as Ken goes, you are explaining it wrong to your wife. Ask her if she would rather sit the rest of her life looking out the window of a house thats underwater whole life passes by while you struggle to pay the mortgage, or would you rather use your money to live, travel and enjoy. Try it that way and I guarantee you will get the response you want.

#35 Debt's Dark Embrace on 06.22.12 at 10:15 pm

Garth, I don’t think that the changes today are that big a deal. This balloon will only REALLY pop when interest rates rise in 2 or 3 years. Then it will be fugly.

#36 Observor on 06.22.12 at 10:17 pm

SKIN IN THE GAME?

DJB at 28 said:

Ken only has 5% down so he really has no skin in the game.

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

That is totally false. If Ken buys he is on the hook for 100% of the mortgage value. Only in bankruptcy can he escape that and that is not a realistic option.

Ken’s value at risk is like anyone’s 100% of the house value. In his case 5% down and 95% mortgage. In my case 100% equity and no mortgage.

The skin in the game for any homeowner is always 100% of the value of the house (or 100% of the mortgage value if that happens to be higher). Possible unimportant exceptions would be a case where someone views bankruptcy as a viable option. Things have got to be pretty bad to go that route.

GET IN THE GAME!

Oops too late almost everyone is already in.

#37 TNT on 06.22.12 at 10:22 pm

I bet a banker/broker somewhere climbs out of a hole willing to insure the 1ML +ers

#38 Blue Monster Lover of Meats and Vegetables on 06.22.12 at 10:23 pm

Anecdotal, but I wonder.

Two weeks ago I was visiting a friend in Burlington and later in the evening we were smoking a j in the garage and listening to what sounded like a domestic dispute directly across the street, he was yelling viciously a his wife and I said if I hear a scream for help I’m gonna break the door down and get him. Well then it just tapered off and we heard laughing. This house was just recently bought, i think it was on the market last summer.

Anyway….

Well, talking to buddy again tonight on the phone, who just smoked another half a j, my half is still there un-smoked, sucks. Says there is an ambulance and three cruisers across the street.

So I wonder if F caused this? I bet their stressed with a new born and horrible expenses.

Moral of the story, they should have smoked more and fought less.

#39 Frugal Fred on 06.22.12 at 10:35 pm

“My point is this: you made a decision to get married, have four children and buy real estate. That explains why, in you mid-forties, you have only $100,000 saved and a measly 5% down payment. ”

I don’ think everyone who has made the decision to have four children and buy real estate find themselves in Ken’s situation. Ken’s income, savings rate and investment success is mirrored in his financial situation.

#40 Basement dweller on 06.22.12 at 10:41 pm

I hate these boring stories. Who cares about ken

As opposed to you? — Garth

#41 Blue Monster Lover of Meats and Vegetables on 06.22.12 at 10:41 pm

Anyone care to take a crack at the question? What can F do to get us out of the darn mess he created. Love to hear the answer to that one.
——-
Easy, privatize everything that can be privatized, eliminate the income tax, have only a consumption tax, eliminate CPP and EI, eliminate the CRA. Open up complete free trade between provinces and internationally, get rid of CBSA and open the boarders, this can be done now that there are no handouts by government, come and go as you please, the only thing Canada has to offer is freedom.

And last but not least, back our currency with gold.

If we did all this, Canada would make Ireland look like north Korea.

#42 george on 06.22.12 at 10:52 pm

This link will take you to a short video clip (3 minutes and 5 seconds long) of Rick Santelli on CNBC this morning. He talks about a Spring 2009 article in which Anna Schwartz gives her thoughts about Alan Greenspan, Ben Bernanke, and Hank Paulson (ex-Treasury Secretary). Please note that before the video starts you have to watch a 30 second commercial first.

The article Rick Santelli was talking about in the video clip is at the following link:

http://www.city-journal.org/2009/19_2_economist-anna-schwartz.html

#43 Mark W on 06.22.12 at 10:53 pm

I can only see five houses in Lethbridge on the market for over one million dollars.

The most expensive is this one:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11455595&PidKey=-1078676264

Question: What do you call a one million dollar house in Vancouver.

Answer: A tear down.

But then again unlike Vancouver … Lethbridge has not had the guts of it’s middle class ripped right out of it.

http://www.realtor.ca/propertyDetails.aspx?propertyId=11774190&PidKey=-606601701

#44 Claudia on 06.22.12 at 11:06 pm

Either Ken made a typo or he’s in denial: If he’s in his mid-40s, he’ll be in his 70s by the time his mortgage is paid off. That is, if he even lives to 70; according to Stats Can, men born in the 1960s aren’t expected to (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health26-eng.htm).

The compromise he might be able to get his wife to accept is to hold off on buying a house for six more months. That means she still gets her house by the end of the year, but by that time it’ll be more clear that the market is tanking so that best-case scenario she’ll accept renting for a while longer or worse-case scenario at least they won’t lose as much equity than if they buy immediately.

Another eye-opener would be to actually come up with a spreadsheet that shows her that she and Ken will have to work an extra decade or two to afford the house. Plus include all the extra expenses — the maintenance, property taxes, and, and, and.

#45 Smoking Man on 06.22.12 at 11:07 pm

It’s amazing just one day after F locks and loads, MSM on board, the gang on here is celebrating. The missed the boaters are dancing in the streets. Lets face it, your palls your parents, people you love who purchased and scored big now walk around with a conceited arrogant smile.

You the smart ones gaged the financial fundamentals, and made your bet to sit on the sidelines these last few years.

Your friends net worth boomed. yours did not.

I sense sheer hatred in some of the posts.

Now we have the Govt, The Media doing everything in its power to kill the market in the GTA. Why?

Because it’s insanely on fire and could do serious long term damage.

Now if Harpo want’s to be a one term wonder all he needs to do is crush the real easte market, Harpo has serious special interests backing him.

If they do to good of a job greater than a soft landing the machine will simply find away to prop it up via MSM

and we all know lots more track 6ers that 5ers.

Your dance is premature, but hey calling it like I see it, makes me a Realtor by LaughingCDN logic.

#46 ANONYMOUS on 06.22.12 at 11:17 pm

You know how many immigrant to Canada have 4 kids yet they live in 3-bedroom apartments for 15 to 20 years? Tens of thousands of them, and their wife SHUTS UP and puts up with it the best they can !

So my advice to Ken is to sit down with his wife and tell her that they are going to be moving into an apartment, no other choices. If she wants a divorce, then so be it.

( She probably will want a divorce. That is why I never ever want to marry a North American women, they don’t care what happens to their husbands, they are only out for themselves. )

This is what I would do if I wanted a house for myself: Buy a small vacant lot out in the country for about $20,000. Get a permit to build a really small 600 square-foot house. Build the mini-house myself for about $20,000 over 3 to 4 years while renting a nearby apartment / room. So after 4 years I have my own house that I built myself for only $40,000.

#47 ozy - A realistic outcome in GTA on 06.22.12 at 11:21 pm

A realistic outcome in GTA

To avoid a larger price decrease, all sale prices should be reduced 5% lower acroos board on July 10. All.

Then they should drop another 5% by December, market forces.

That will put some folks back in relative affordability, and will stabilize the market (not the kandos market though obviously)

After that will be the employment & rates at play in spring 2013, will decide the trend up or down

#48 tf on 06.22.12 at 11:23 pm

Hey Garth – so glad I’m a regular reader of your blog. I can understand some of this stuff!
Thanks for being gentle with Ken – this is when he and his family need to get creative and find those skills that have lain dormant – sewing, darning, gardening – use of our hands. Who knows what they’ll discover.

#49 wes coast on 06.22.12 at 11:30 pm

F taking us to 0/40 was his version of QE and it delayed our recession. (Believe me it saved Vancouver’s ass big time) We made a housing bubble. The US a bond bubble. We have exited our over stimulating policy too late and will now pay the price. Let’s hope the Fed is better with their timing as they are far more systemiclly important. Isn’t Keynesian economics fun? Pop!

#50 timbo on 06.22.12 at 11:30 pm

http://www.nytimes.com/2012/06/23/business/global/chinese-data-said-to-be-manipulated-understating-its-slowdown.html?_r=1

“As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles. ”

nothing to see here, all is well……………..

http://www.guardian.co.uk/business/2012/jun/22/eurozone-big-four-pledge-gdp?intcmp=239

“The leaders of the eurozone’s biggest economies announced on Friday night that 1% of the European Union’s GDP was to be set aside to help the continent grow its way out of the financial crisis. But doubts were immediately expressed as to what share of the package – said to be worth €130bn (£105m) – would be genuinely new money.”

Excellent, use public money to bail private banking again. What could go wrong…..

#51 This is Wonderland on 06.22.12 at 11:39 pm

#44 ANONYMOUS

This is what I would do if I wanted a house for myself: Buy a small vacant lot out in the country for about $20,000. Get a permit to build a really small 600 square-foot house. Build the mini-house myself for about $20,000 over 3 to 4 years while renting a nearby apartment / room. So after 4 years I have my own house that I built myself for only $40,000.
—————————————————————–

Tell the truth Anonymous, your really a 15 year old boy living in your parents basement; so ya.

#52 Island Girl on 06.22.12 at 11:40 pm

I don’t know why people say they can’t just rent with a family. We have 2 kids, 2 cats and a dog and we’re renting, and I have no intention of jumping back into home ownership when it’s just so much easier for us to rent.

And what makes Ken’s wife think that by buying a house they won’t ever have to move again. They owned a house before and had to sell and move, why would this time be any different?

#53 gokou3 on 06.22.12 at 11:43 pm

Arcs55 wrote:

“I understand it’s F’s policies that got us in to this bubble, is he doing well getting us out?”
———

Just so it’s perfectly clear, this is people’s understanding of the Canadian real estate bubble. And that’s even if they get that far. Would you not say that’s beyond belief?

Now imagine the opinion Goldman Sachs et al would have of the masses. They are very aware of the “Arcs55″ horizontal base. The political-corporate-banking machine moves cynically forward.

Anyone care to take a crack at the question? What can F do to get us out of the darn mess he created. Love to hear the answer to that one.

———————————————–

This question is analogous to a person who has just jumped off the bridge and, immediately regretful of his action, asked “what should I do now?”

Well, there is not a painless solution for every problem in real life, as the Greeks are learning now.

#54 Walden`s Pond on 06.22.12 at 11:53 pm

#46 ANONYMOUS on 06.22.12 at 11:17 pm

After you have built your 600 sq ft cabin you can call yourself Henry Thoreau…

#55 The American on 06.23.12 at 12:02 am

I gotta admit that the Canadian mentality surrounding home ownership is quite different than what it is and has been in the past in the U.S. There is a clear difference in attitudes of home ownership vs. renting between both countries. Sure, Americans want to own a home (hence why we had house-buying frenzy several years ago), however one was never viewed as “trash” or “a loser” simply because he/she rented. My Canadian friends constantly tell me about this mentality throughout Canada that if you rent you are simply an outcast to societal norms. Never has been the case in the U.S., even when every Tom, Dick, and Harry could get a mortgage. Can someone please explain to me what is driving this mindset and why it has been successful in securing such a stronghold within the Canadian population?

#56 dd on 06.23.12 at 12:03 am

The effort was coordinated between the…It was orchestrated …

Are u saying that the gov and central banks work together? Hmmm … Wonder if they do it in any other market.

#57 lubudmax on 06.23.12 at 12:05 am

so exactly how did F manufacture the zero 40? genworth started it, then there was a rush to the bottom. cmhc didn’t speak to F or Dodge. this was cmhc acting on its own in a competitive market. if you are going to say this, then please give precise evidence to support your view. just keeping things objective.

#58 thinker on 06.23.12 at 12:08 am

I think you are getting a bit ahead here. We have not seen job losses. Keep in mind, a 5% down home is negative equity on day 1, transaction costs will eat it up. They didn’t raise that for up to ONE MILLION. That is huge. The fact is after the rules, I can go pay 999k for a home with 5% and if I have a job that can cover the payments, I am not impacted at all.

1M @ 25y ammo vs 30Y is only 6k a year difference Garth or 500$ a month. The fact is, banks can now introduce INTEREST ONLY loans to help offset that cost and other tools of modern finance.

Home loan value caps are based on LTV, those can easily change.

And if people are forced to make large down payments on larger priced homes, if you own one, not flip, would you not feel better that your market is being accessed by only more stable buyers – is this not good and healthy for the upper home market, it keeps the riff raff out of the b path?

#59 Bo Xilai on 06.23.12 at 12:11 am

#45 Smoking Man

Your syntax, grammar and spelling are so atrocious, it’s difficult to decipher your meaning… A definite deal breaker.

I’ve always known you are “Special”… Now I’m starting to think you’re “Special Ed”.

#60 Uki on 06.23.12 at 12:12 am

To #41: You plan is good, except what you going to do with all criminals from poor countries around the world coming to “work” here because they can ? Either arm citizens with guns or increase police number, which means tax citizens more and here we go again.

To #29: “I can just hear them chuckle and say its a freebie.” They LOL, its a well known fact.

#61 Smoking Man (fraud) on 06.23.12 at 12:20 am

Smoking Mad,

Those conceited smiles will disappear by fall.

The crap is going to get pooped on.

Get used to being wrong(er).

#62 Elmer on 06.23.12 at 12:23 am

100k in an rrsp in your 40s is light years ahead of most canadians. This guy should be applauded for being able to save that much.

#63 tundrapete on 06.23.12 at 12:34 am

Ken, you are a dumb ass.

#64 James on 06.23.12 at 12:35 am

#46, not sure were you are finding a $20k vacant country lot. must be in a have not province or 2 hours away from civilization.

#65 Stan on 06.23.12 at 12:38 am

Ken:
Just say “NO”.

What kind of ridiculous myth is is, that you can’t rent with four kids?

#66 Intuitive Missus on 06.23.12 at 12:40 am

#46 Anonymous.

Did you even read your message before you hit the “submit” button? Their wife SHUTS UP! Really?

Sounds like you are the one who is only out for yourself.

And sounds like a vacant lot out in the country is the right place for you. Alone. What self-respecting woman would want to be with a misogynist like you?

#67 cj on 06.23.12 at 12:45 am

Ken you’ve made some poor choices like all of us do. Is she serious that she will divorce you if you don’t buy a house? You’re partners and she shares the responsibility of the decisions made about family finances – good or bad. If she wants a house then she needs to find work too. Something tells me you’re not on solid ground.

#68 Nostradamus Le Mad Vlad on 06.23.12 at 12:49 am


Are F and the Peckerettes similar to Megadeth’s Symphony of Destruction? Justin Bieber or Frank Sinatra would be too outrageous, so can’t do any comparisons there!

“Yes, Ken, the major rivers of blood will flow through the GTA and Vancouver. This time next year the local numbers will look far different.” — Ask BPOE and Mikey the Realtor for confirmation!

“There is no bubble,” he said. But there was. He knew it. Marc Carney knew it.” — Therein lies the path our 38% majority CPC has chosen to take us. Sure glad I’m getting old. Won’t have to put up with these jackbooted CPC politicos any more.

#44 Claudia — “. . . according to Stats Can, men born in the 1960s aren’t expected to . . .” — Isn’t life insurance mandatory for a mortgage? I thought it was.
*
Boost for stomachs (and economy); Spending Power decreases; Recovery? Politicos talk and can’t be trusted; Check Yer Artwork; Robots This won’t help the unemployed; Greater Urgency on Edebt. Wonder why? Maybe it’s this; Cdn. Friday links; Confidence Indicators sink; Coffee Tazo New invention reinvented, and Starbucks South America; Backdoor Talks Stuff sheeple never hear of until their jobs are gone; IMF and Germany; 12:11 clip How low can or will they go? 11:36 clip Chinafix; Exotic (but rigged) Markets.

Jim Rogers Precisely what TPTB want; Bernanke on the edge, and Rosenberg’s Cliffs; Euro Risks US businesses preparing; Oblowitall This won’t help him; Disaster Nevada city; Soros Getting cozy with Brazil; Rare Earth substitutes; Italy Heavy breathing; Laugh of the Day; Moncton scam; Cdn. lottery winners Four things to do; Cutting energy bills by 2/3; B I G Bailout in the EZone, which could affect NAmerica.
*
Freaks Not really. Freedom of choice allows for that; Nixon and Obomba Watergate – Fast and Furious. Nixon went down. Obomba? Thanks to the US Taxpayers who paid for the lost. Israel’s new missile defense system. Canada is going down the same road; Arming Rebels Not only is the CIA arming Syria’s rebels, SArabia is doing the same; Self Defense Switzerland; Frustration Hasn’t the west realized by now that it’s not supposed to be bombing other countries? Alien Planets; The Exorcist Part II? 14 year old girl. That house in Maryland, 1949 was probably torn down decades ago. The boy was 14 or 15, same age as Linda Blair when the first film was made.

#69 truth hammer on 06.23.12 at 12:52 am

#46 A……There are properties in the far north for $20,000 …trouble with the neighbors is that they’re either black or white………bears…..and always hungry.

From personal experiance I can tell you that the cheapo regions of Northern Ontario have mosquito’s and Black Flies big enough to rape a horse……good luck.

South of 60 degrees I can’t think of many towns with paved roads that will issue permits for $20,000 anymore. Try to squat……in a tent.

And you’re right… leave all those nasty North American women to me.

#70 Scott in Gibsons on 06.23.12 at 12:52 am

Hey Ken, give this a try. Take your down payment money and invest it in the safe things that Garth recommends. Every month you’ll get a nice little chunk of money. Give it to the wife. Ask her to trust you and to watch house prices with you. If house prices go up, you were wrong and will buy a house. If house prices go down you were both right. Either way she is right.

If house prices go down, keep track of how much money you would have lost. Do the mental math and tell her how much of your down payment you would have lost, and how much less money she would be getting every month from it.

Tell her that when prices have fallen enough, you will buy a beautiful house that will not destroy your financial future.

#71 Cristian on 06.23.12 at 12:56 am

“You have kids, which makes renting difficult.”

Why difficult? There are enough rental houses with 4 or 5 bedrooms on Craigslist.

#72 Calgary Car Guy on 06.23.12 at 12:58 am

Re #46 Anonymous

I just had to chime in here and say I agree with you 100%. The only difference in my thoughts to yours are about buying the lot and building a small house. I want to buy a large comfortable RV so I can stay mobile.Also so I can store it in the winter and go live in SE Asia cheap. Great people, weather,beaches and beautiful ladies who don’t hassle men to death. You have to really let go of all the materialistic B.S. that people feel they have to have here though. Live simple. Let the flaming begin, lol.

#73 B P O E $$ on 06.23.12 at 1:05 am

Guess who I saw today??? Me $B$P$O$E$ he was walking into the I am Scared Clinic, the Beamers about to get repo, and i thought the cell phone was broken cause nobody calling to buy up the promised land, oh ya the land that they are not making anyone of. Mr Bpoe Nobody buys with cash here, everyones leveraged to the nutsack and the cash taps are running dry.

Bye Bi Bye Buy

#74 Dan7 on 06.23.12 at 1:06 am

Garth why the “F” don’t you have your own youtube channel?

You would probably make a killing if you became a youtube partner.

#75 Housing_Bubble on 06.23.12 at 1:09 am

Garth,

While I agree with you that many of these new policies implemented will help cool the housing market, I think that “F’s” move to shorten the amortization period by 5 years will do little to further that end.

I say that because I did a simple present value calculation in Excel on the debt that you are allowed to borrow with the 30 year amortization vs. the debt you are allowed to borrow using the 25 year amortization.

Ironically, with F’s new policy, you are allowed to borrrow MORE debt…. you just have to pay it back in a shorter time frame.

People are stupid enough to throw all their money into shelter…. so I doubt that policy will help cool the housing market.

#76 Housing_Bubble on 06.23.12 at 1:15 am

Convice F to force people to pony up 10% as a down payment with no cash back manipulation from the banks…. that’s when we’ll see a real housing correction!!!

#77 lookoutbelow on 06.23.12 at 1:35 am

So where do we go from here:

Only time will tell, you know those intended and unintended consequences. In the near future we will all be a whole lot wiser and a lot more certain about what happened. Everybody is a genius when we look backwards because we all know we are 100% correct!

BUT, how, my dear friend Garth, will we know it’s time to jump back into home ownership, especially if we happen to live in the great HAM city of Richmond, BC.

Any suggestions, oh Bearded one?

#78 Popeye the Sailor Man on 06.23.12 at 1:40 am

Ken,

I was in the same boat, we had $260,000 from a sale in Jan 2009 on Vancouver Island. We needed to move to the Edmonton Area for family reasons. I still work in BC. We rented for a while waiting for the crash in RE, we were to scared to invest the money properly and the Vancancy rate was low so getting a good place with kids and a dog was hard. We both understand the market will fall, so we loked for good value. After 8 months of looking and viewing about 100 homes we found a property. it wa a 2006 2 story about 2200sf and the family selling were hoarders, and did not take care to show the house well. Assestment in 2006 was 530k we got it for 430k so we hope we are far enough down the curve that the correction will have minimal effect on us.

Ken look for a property that fits your needs and does not show well that has been on the market for a spell and make a low offer. But dont buy a poor crappy house. Ask the realter to show you the pricing and listing history to get an idea of the sellers situation. Do a title search to see if they have room for the lower price. Looking at this info on a numbe of propertys you will start to see a pattern of what may be an oppertunity.

Good luck

#79 Mr Buyer on 06.23.12 at 1:44 am

#45Smoking Man on 06.22.12 at 11:07 pm
…………………………………………………………………
This is clearly a twinkle twinkle little star what you say is what you are post. Can’t flip it, can’t afford it. It’s done.

#80 rentin on 06.23.12 at 2:13 am

Sounds like Ken is brown bagging it with drip coffee every morning in an insulated mug. – Sounds awful doesn’t it?

Nah, that’s how stupid this world has become, thinking that they can “afford” all of life’s luxuries. 99% of people I see are living beyond their means and they don’t even know it.

Ken – The first million is the hardest. It gets easier after that.

You have 100K and 4 kids. You are doing something right.

#81 renters rule on 06.23.12 at 2:29 am

Smoking Man, I have no clue what your deal is: realtor, developer or lender — I don’t like you plastered or sober. I think you are an idiot.

#82 P & T S on 06.23.12 at 2:41 am

Canadian Banks reckoned they were “The Best”?? Seems the Aussie Banks also reckoned THEY were the best too – with “far better lending standards” than everyone else. Seems that is now not the case, and with overbuilding on a grand scale coming home to roost, the cards are well stacked in favour of an almighty crash Down Under.

Bearing in mind retail has already died (along with manufacture), AND Ms Gillard’s recent posturing at the G20 telling everyone off, and “demanding” Europe get their act together (er, Madam – you’re running a very Second-League “Economy” entirely dependent on flogging your dirt to those who can use if for finished products (which you then buy back at an inflated rate . . . . . )), so in all things are just rosy . . . .

God help them, ’cause after last weekend, Europe will not be offering any assistance, and it’ll serve them right.

Yet another shining example of the”Guaranteed RE Pathway to untold riches” – if everyone does the same thing as everyone else, we’ll ALL be multimillionaires . . . won’t we . . . ? ?

#83 Canuck Abroad on 06.23.12 at 3:06 am

Property taxes and maintenance ALONE come to more than $2,000 per month on this $1.4 million condo in Forest Hill. Does this count as “throwing your money away”?

http://www.torontolife.com/daily/informer/gimme-shelter/2012/06/22/condomonium-319-lonsdale-road/

You can get a similar sized space in the same neighbourhood (e.g. half a duplex, or a large 3 or 4 bedroom apt in an elegant older building) for about $3,000 per month rent.

So, who would buy this? Why would anyone buy it?

#84 earlymidlifecrisis on 06.23.12 at 3:09 am

Wow. I cant believe #46 wasnt deleted. I can see why he’s single.

#85 Canuck Abroad on 06.23.12 at 3:27 am

Snooty Leaside is getting a big-box retail mall. Classy!!

http://www.theglobeandmail.com/news/toronto/leaside-residents-oppose-proposed-shopping-centre/article4365600/

#86 Furst on 06.23.12 at 4:05 am

Requiem for 30 – a poem by Furst

30 was fair, 30 was kind
30 was good, for all of mankind
How the people turned against you, in a blink of an eye
Punished and derided, left alone to die

I’ll miss you 30, remember the fun we had
You made me feel rich, and never got mad
If I needed a car, you lent me a hand
Forget the condo, you bought me some land
I’d never own a house, without your aid
Even had money, to hire a maid
Oversea trips, hotels with palm trees
Times were great, forgot about RRSPs

30 was chartiable and kept on giving
Because of him, I was really living
Life in the fast lane, not a dime to my name
My friends were renting, I know, they’re so lame
Putting aside savings for what I don’t know
I trusted in 30, as he was running the show
Those who needed hope, followed 30 with zeal
Now we sit with 30, for the final meal
On July 9, he will be put to rest
His persecutors will say, it was for the best

30 will be gone but one day must rise
For 25 is false and only utters lies
25, you shall not have my soul
Owning a home will still be my goal
But that one last hope, you’ve decided to take
I can’t afford my house, now I’m exposed as a fake
Why must I rent, like the poor sad masses
Go ahead,laugh, take away my rose colored glasses

I hate you 25, wish 30 were here
He’d rip out your guts, I wouldn’t shed a tear
I’m nothing now, you stole my dream
A wreckless failure, is what you deem
30 was a hero, he made us strong
Everything about you 25, is just so wrong

Never have I felt so lost and sad
No longer a man but a lonely lad
No house, no car, banks will not lend
30, why didn’t you tell us this is how it will end
We’re done, we’re through, 30 is gone
On July 10, 25 will rise with the dawn

#87 carl berger on 06.23.12 at 4:34 am

Garth, I really need some advice. I am at a crossroads in my life. Right now I have a chance for my dad to help me out with a downpayment for a home. He wants to invest in a small place in the city with me; he would put the downpayment and I would pay the mortgage and all the expenses. The problem is that with the prices being so high in Vancouver, all we can afford is a 1400 sq ft (and most likely older) space that will be insufficient for my family of 5. My father says that they grew up in a generation where you put up with what you can get and nowadays people just expect too much. I just know that my wife will be very unsatisfied with what we can afford and we may end up fighting all the time. So the question is: Do we find a nice rental for $3000 per month with enough space for my family to spread out? Or do we take advantage of this generous offer and a lower monthly expense, but subject my wife and kids to cramped quarters for the next 5 years? She may get used to it. If house prices decline, I would have locked myself into a debt for 25 years with a shrinking equity and an angry wife. But if prices increase or remain steady, then I would have a nice investment into the future and I would look like a winner. I would appreciate any advice.

#88 soho n e on 06.23.12 at 6:30 am

in kens shoes for 2yrs. sold house .some one at wifes work told her you will never again afford in bopeep land.renting,just got1 month notice to move.boss wants to buy.NO MORE RENTING she says.landlord is building townhouses.does anybody know the tenant act,maybe i can get a free month.they are tearing the house down.please help with link or any advice.thanks.soho ne.

#89 Aussie Roy on 06.23.12 at 6:30 am

Aussie Headlines

Home ownership by families peaks at 79.5% in 2007

FAMILIES with dependent children have recorded a sharp drop in their home ownership rate from 79.5 per cent to 77.2 per cent over the past five years in the first warning that high property prices are starting to hinder the middle-class pursuit of the great Australian dream.

http://www.theaustralian.com.au/national-affairs/in-depth/housing-goal-fades-for-young-families-census-data-shows/story-fnegj121-1226405988640

#90 Deb on 06.23.12 at 6:43 am

I am puzzled by Jim Flaherty’s comment on Thursday when he explained that the government is providing a “prophylactic function” in protecting Canadians from themselves. What?

Who, exactly, is supposed to be wearing this condom, the government or me? Does this mean that if I am not already screwed then I am about to be screwed? Or, should I be concerned that I’ll screw myself? If the worry is that I’ll screw myself, then what good will a condom do?

#91 Jake on 06.23.12 at 6:53 am

Garth, we’re an early-fifties couple with a kid living at home and going to university (debt-free through the magic of RESP). Our Ottawa suburban home is paid off and we’re starting to think about living in a downtown apartment (we considered a condo until we figured out that fees and taxes alone feel like a rather large mortgage). If we sell our home, worth under $500,000,
how should we invest the money? I see you think that mutual funds are a bad idea, but what’s an average Jake to do?

#92 eddy on 06.23.12 at 7:25 am

Harper denied the bubble too. Golman Sachs installed Carney here for one reason-control.
Step one- send Carney back to Goldman Sachs. Canada cannot survive an enemy within

#93 rosie on 06.23.12 at 7:26 am

#90 Deb
The prophylactic in question is meant for the protection of F. It is a non-specific, gender neutral “measure” designed for protection against a myriad of HTD’s (housing transmitted defaults). For the males in this country, who are in debt prison, it’s too late. They have already bent down to reach for the soap. Best to take it like a man. As for the ladies, well you can always lie back and think about Queen and country.

#94 Chiquita Banana on 06.23.12 at 7:27 am

Re: #52 Island Girl
“I don’t know why people say they can’t just rent with a family. We have 2 kids, 2 cats and a dog and we’re renting, and I have no intention of jumping back into home ownership when it’s just so much easier for us to rent.”
_____

Try renting with a dog in the 416. The rental market is so tight that there are open houses and bidding wars. Anyone with a dog is immediately disqualified. Children can also be deal breakers – after hearing my toddler in the background over the phone, I had one landlord tell me her 3 bedroom apartment could only take two people because the hot water tank was too small. I offered to buy a new one and she still refused.

#95 Bottoms_Up on 06.23.12 at 7:35 am

#90 Deb on 06.23.12 at 6:43 am
———————————-
lol, but there is such a thing as ‘autoinoculation’ and therefore, yes, a condom could actually protect you from yourself!!

#96 Bottoms_Up on 06.23.12 at 7:37 am

#88 soho n e on 06.23.12 at 6:30 am
—————————————
It’s provincial regs…what province do you live in?

#97 Canuck Abroad on 06.23.12 at 7:39 am

55 The American – …Americans want to own a home (hence why we had house-buying frenzy several years ago), however one was never viewed as “trash” or “a loser” simply because he/she rented. My Canadian friends constantly tell me about this mentality…

Yep, completely bizarre. There is not such a mindset in Europe either. Great for me because I have no desire to own in Toronto so hopefully the selection will be that much better when the time comes to move back.

As an aside, I just renewed my lease for a fifth year, and for the fifth year in a row I have NO RENT INCREASE. Whoohoo!! You people out there moaning about how your landlord can put up your rent whenever he wants and tribunals and hearings blah, blah, blah must be doing something wrong. All you have to do is make sure you are the perfect tenant, and if your landlord is unreasonable, be prepared to walk and find another place when the lease is up. Life is short, keep it happy.

#98 Bottoms_Up on 06.23.12 at 7:39 am

#75 Housing_Bubble on 06.23.12 at 1:09 am
———————————————
I’d like to see those numbers (and your assumptions) if you still have them.

#99 Bottoms_Up on 06.23.12 at 7:41 am

#71 Cristian on 06.23.12 at 12:56 am
—————————————
He was being facetious.

#100 House Horny Housewife on 06.23.12 at 7:45 am

Good for you Garth !

Excellent advice. Real estate decisions are more complicated than a simple equation, that’s for sure.

Wow, FOUR children.

Ken, both you and your wife are going to have to work outside of the home to support this lifestyle choice (it will also give you BOTH a pension at retirement, which will help a little).

Make sure those children know the value of a buck so that they learn to support themselves as soon as they are able. You will be doing both them and yourselves a favour. RESPs are fine but your children should also know how to support themselves so that the flight from the nest will be seamless. Them knowing how to take advantage of financial opportunities is also a necessary thing.

For example, scholarships and project grant funding (for post graduate work) is a wonderful way to help fund an education. This is money that you don’t have to pay back and it infuriates me when I try to tell this to my university students and all I get is an empty, docile stare back. A lot of these kids are so used to getting money from their parents that they don’t look for it anywhere else. Working hard in school will not only make your transcripts look good and allow you to go anywhere, but it can pay off in real dollars and cents. Make sure your children know and understand this. In a family of four children, it could make all of the difference in them having successful careers in life and not having to rely on you for cash.

Pad your nest egg whilst paying off your mortgage, as Garth says, but work also on educating that offspring. Many do not realize how expensive children can be. And for heaven’s sake, don’t get caught up in all of the expensive extra curricular crap. My family never did (they couldn’t afford it and they KNEW it) and we turned out just fine and able to take care of ourselves. We participated in swimming, band etc.. but only the free stuff and nothing that required huge outlays of cash from the parents. This is totally unnecessary in my opinion. Let the Jones’ do whatever the hell they want and you take care of yourselves.

Thread carefully and you should make out OK. Best of luck.

HHHW

#101 T.O. Bubble Boy on 06.23.12 at 7:59 am

@#85 Canuck Abroad
Snooty Leaside is getting a big-box retail mall. Classy!!

http://www.theglobeandmail.com/news/toronto/leaside-residents-oppose-proposed-shopping-centre/article4365600/

You obviously don’t live near Leaside… there is already a HUGE big box mall, plus multiple other plazas with Canadian Tire/Future Shop, Marshalls/Homesense, and a Home Depot. Adding one more set of big box stores is really just extending what’s already there. Also, since that part of Leaside is built on toxic industrial land (it used to be the side of artillery factory for WWI), you can’t put residential properties there anyway.

#102 Back East on 06.23.12 at 8:32 am

#41 Blue Monster:
When interest rates are raised, taxes should be lowered at the same time. It’s the tool that should have been used to stimulate the economy in the first place. And you’re right, everything will be sold…

#103 Canuck Abroad on 06.23.12 at 8:35 am

87 carl berger – are you new here? Like completely new? Your situation is not unlike Luke’s from a few weeks ago, except you are thinking of buying in Vancouver – ground zero of Canada’s epic housing bubble that will probably put Ireland, Spain and maybe even the US to shame and will be featured in Canadian business and economics textbooks for decades to come.

Do not buy a shitty little Vancouver house that your wife “may get used to” (hint: she won’t) in the hopes it will go up in value someday (we’re talking decades here) just because your father is wants to “invest” with you. He does not have to live with your unhappy wife.

#104 stickler on 06.23.12 at 8:36 am

@ #41 Blue Monster Lover of Meats and Vegetables on 06.22.12 at 10:41 pm

Anyone care to take a crack at the question? What can F do to get us out of the darn mess he created. Love to hear the answer to that one.
——-
Easy, privatize everything that can be privatized,
>> So prices will increase…dumb. Just hand over control of steady cash flow generators & all precious resources to corporations…dumb.

eliminate the income tax, have only a consumption tax,
>> That I like….but you know the consumption tax will be higher then it is now right?

eliminate CPP and EI,
>> No safety net? disagree.

eliminate the CRA.
>> Great, but don’t believe that would get rid of all 40,000 employees. Someone has to administer the consumption tax you love.

Open up complete free trade between provinces and internationally,
>> Don’t think you thought this one through…you still want working wage jobs in Canada don’t you?

get rid of CBSA and open the boarders, this can be done now that there are no handouts by government, come and go as you please, the only thing Canada has to offer is freedom.
>> This one is pure fantasy.

And last but not least, back our currency with gold.
>> You know Canada does not have much gold right?

Maybe you should have smoked the other half…

#105 Caraco on 06.23.12 at 8:47 am

Anonymus at #44

Google Tumbleweed Houses.

#106 T.O. Bubble Boy on 06.23.12 at 8:48 am

@ #57 lubudmax
so exactly how did F manufacture the zero 40? genworth started it, then there was a rush to the bottom. cmhc didn’t speak to F or Dodge. this was cmhc acting on its own in a competitive market. if you are going to say this, then please give precise evidence to support your view. just keeping things objective.

A) The Government provides 90% backing for Genworth/AIG/etc., so saying that F was not involved in bringing 0%/40-yr mortgages to Canada is incorrect. These products would not exist if not for the Government backing.

B) CMHC was already the dominant monopoly in the mortgage insurance market when F put them in the 0/40 business. The “race to the bottom” didn’t need to include CMHC – in fact, this was a way for the Government to reduce their involvement in this market. But, F decided that the Government apparently needed to be in the business of backing $600B in mortgage debt!

C) Since the implosion of Fannie/Freddie in the U.S., there have been 4 years to make plans to reduce exposure to this market, and CMHC has kept growing and growing despite evidence that this won’t end well. F also “doubled down” on the mortgage debt/HELOC bubble with the Economic Action Plan — encouraging people to do home renos, and even buying mortgages off the banks’ books with the IMPP.

#107 SCIB on 06.23.12 at 8:56 am

For years and years it has been mortgage money for anyone at under 5%.
Small business has to use their 19% credit card to get financing.
We small businesses are the greatest source of employment .
Our government is hostile to small business.

#108 Toronto_CA on 06.23.12 at 9:10 am

http://www.theglobeandmail.com/globe-investor/personal-finance/time-for-couple-to-change-their-game-plan/article4364544/

So this 33 year old guy wants to quit his job (that has a Defined BENEFIT pension plan) to start his own “buy and renovate residential property” business, while his older than him no kids yet wife has to keep working.

What’s wrong with people’s brains? Real Estate is some sort of crazy cult.

#109 Min in Mission on 06.23.12 at 9:18 am

$20K for a lot??!! I don’t think that has been the price for decades!! Unless it was so far out of town that there wasn’t a road or services anywhere nearby! Probably on a nearly vertical rock face!

#107 SCIB – I work for a “small business”, approx. 5 million a year, and that is one of the items that we struggle with. Along with the lower productivity and “sense of entitlement” that many Canadian workers exhibit.

#110 Jamaican_Gal on 06.23.12 at 9:24 am

#90 Deb, #93 rosie

Hey, ladies rocking the house today. Just goes to show, we can give as good as we can take…

#111 Grantmi on 06.23.12 at 9:27 am

#81 renters rule on 06.23.12 at 2:29 am
Smoking Man, I have no clue what your deal is: realtor, developer or lender — I don’t like you plastered or sober. I think you are an idiot.

It’s all an act!!! Don’t encourage him!! :>(

#112 TurnerNation on 06.23.12 at 9:30 am

Today’s sob story highlights the problems with marrying North American women. Or men. Or both???

#113 Alberta Ed on 06.23.12 at 9:42 am

“…avoid a potential debtageddon in a few years when a growing economy brings seriously higher interest rates. ”

Not to mention, an election.

#114 TurnerNation on 06.23.12 at 9:50 am

People are FED UP up with realtors that overprice listings and rip us off.

Read the vitriol towards realtors in this column’s comments section:

http://www.torontolife.com/daily/informer/gimme-shelter/2012/06/22/condomonium-319-lonsdale-road/

#115 Ret on 06.23.12 at 9:57 am

#23 Gospel of Garth

10:5 Our faith had been challenged but we had remained resolute and had not waivered. The sin of RE gluttony could not tempt us, nor could the money lending evil doers lead us into the hellfires of debt and perpetual servitude.

#116 Williston Geo on 06.23.12 at 9:57 am

Ken is in his 40’s with only 100k saved. Not one mention of ‘you’re screwed’. Is this the new kinder/gentler blog?

I still think Ken did the right thing

#117 cb on 06.23.12 at 10:17 am

Vhttp://www.vancouversun.com/news/housing+market+teetering+Happy/6827464/story.htmlAncouver sun article:

#118 CrowdedElevatorfartz on 06.23.12 at 10:21 am

….and in case anyone is interested…..Its STILL POURING RAIN in BPOE !

Yes folks, coldest, wettest June on record in BPOE !
And this is after one of the wettest Winter and Springs on record. ( aprox 10 days of sun in 6 months….Tanning Salons are booming! )

Flood warnings in the Lower Fraser River as water levels have risen to heights not seen in over 40 years!

Hopefully waterlogged Richmond will liquify WITHOUT an earthquake but thats hoping for too much( like 2 sunny days in a row in BPOE).

#119 CrowdedElevatorfartz on 06.23.12 at 10:28 am

BPOE
Bipolar Purchases Overide Economics

#120 Not 1st on 06.23.12 at 10:30 am

Boy some of the posters here are just brain dead after the announcement last week still thinking of buying or appraising their home value based on old conditions.

Don’t you get it? If you want to sell right now, take 10% off whatever you could have got for it a week ago. And if you are intent on buying, those houses will be lower too, but they are going to be falling. Why on earth would you buy a falling asset? Tell your wife or crazy father-in-law the real deal so they understand.

#121 Halifornia on 06.23.12 at 10:31 am

Introduced the common law wifey to the blog a couple years back. No pressure to upgrade to a house yet. My little vulture.

#122 City Slicker on 06.23.12 at 10:33 am

Lets not be so hard on Ken, we don’t know what he makes nor how much the house in Lethbridge cost. There are plenty of houses in Lethbridge in the $250-300K range that can house a family of 4.
A family member was in the same situation and bought a very decent place in a nice neighborhood for $290, and have house hold income of just over $100K. Not great but not a disaster either.

As for our government they did what they had to to keep the economy going. And now doing their best to orchestrate a soft landing. What could have been done different.

#123 CrowdedElevatorfartz on 06.23.12 at 10:43 am

@#93 Rosie

Ummm, hate to burst your prophylactic predictions…

Butt(pun intended) it aint just the “males” of this country that are “in debt prison”.

I know tons of gals living paycheck to paycheck with zero savings and tons of debt.
Hence the term “sugar daddy”….. A term coined in the late 1800’s and still appropriate today.

Perhaps that’s what you meant for the gals?
When you suggested the girls could “…. always lie back and think about Queen and country.” ?

#124 TurnerNation on 06.23.12 at 10:46 am

#62Elmer on 06.23.12 at 12:23 am

My rule of thumb is that your liquid (investible) net worth in thousands must equal your age; else cat food retirement.

Ergo, 40 yr old must have $400,000 in investments.

#125 snooty canuck on 06.23.12 at 10:52 am

#97 Canuck Abroad

life is short; stop being an ass.

#126 TurnerNation on 06.23.12 at 10:54 am

The changes’ financial effects will be secondary to their psychological effects.

Case in point. March 2009 – stocks at their cheapest. Didn’t matter to people, as they were of the mindset “stocks are going down”.
Proof that price is secondary, emotion is primary motivator.

Also see: bidding wars. Price is secondary, emotion is primary.

Blog dogs, print this slogan and tape it to your PC’s monitor!

“Price is secondary, emotion is primary”.

#127 Doug in London on 06.23.12 at 10:54 am

@The American, post #55;
This mentality of not owning a house makes you a loser isn’t prevalent everywhere. It isn’t prevalent in places I’ve lived in like Timmins or London, Ontario where prices never went to ridiculously high levels. So this mentality is a product of the recent bubble. It’s probably also a product of a country where there hasn’t been a real estate bust for 20 years (except in some local markets like Windsor, Ontario), and most of the general public has a short memory of such events. Of course you already know that the existence of this mentality is just further confirmation there is a bubble. If you are older as I am (51 years) you no doubt see the parallel between the present and gold in 1980, real estate in 1989, and tech stocks in 2000.

#128 Daisy Mae on 06.23.12 at 11:00 am

“Make this house a symbol of your partnership, not your entitlement.

Forget F. Stop reading this moany blog. Go home.”

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

Yes! It’s all about ‘attitude’. If you’re feeling resentful, change that attitude.

#129 Lethbridge-ite on 06.23.12 at 11:00 am

Thanks for highlighting Lethbridge, Garth. In case anyone is considering a move west, here are a few Lethbridge factoids.
The major employers are gov’t (University, Research Station, College, jail, provincial building) but with oil prices dropping, so are gov’t budgets – so not much new hiring going on.
The ag sector is going strong (cattle, grain, poultry, pulse crops) and land values are high as people hedge against inflation. $1 million for a 1/4 section is not uncommon.
There is a large and thriving industrial park that hosts a lot of energetic businesses, including secondary food processing.
The defining feature of Lethbridge and area is a strong work ethic and a lot of entrepreneurialism. Some oil & gas activity too.
My neighbor works for a hiring agency and actually goes door-to-door looking for employees but mostly for low-paying labor jobs.
You can live cheaply here if necessary. We just rented our small rental house out for $750 per month. It’s on a large double lot with trees, perfect for kids.
Lethbridge s a nice place with low unemployment but it’s also described as windy and boring although there are lots of pools, rinks and golf courses. The Rockies and Calgary are close.
The population here is approx 90,000 and growing steadily. Boomers moving here from Calgary & Edmonton to retire while some graduating college & Uni students go big-city for jobs requiring advanced degrees.
Real estate is overpriced but prices are coming down almost daily as the excessive inventory of unsold houses is sold off.
I heard from a realtor that there are 1,100 houses for sale when the avg a few years ago was only 300 or so.

#130 Realtors and mortgage brokers in a PANIC! on 06.23.12 at 11:11 am

50% correction predictor on 06.22.12 at 9:12 pm Can’t believe I’m the fi*st!

Anyway, I see asking prices are being cut left and right in the HAM area in GTA!
——————————————————————–

We all know and even realtors and mortgage brokers all know there is NO HAM . Yes there are a few real HAM but there numbers are very small. BAM or borrowed Asian Money is in great numbers as these people have borrowed money they will never pay back and have no intentions of doing so. Many BAM will leave Canada once they go bankrupt. The stupid CON’s have lent out 560 Billion dollars of which will never be paid back.

#131 CHMC = BUBBLE on 06.23.12 at 11:17 am

Without CHMC the free and open market would crash Canada’s housing prices by over 50% and all the realtors in the land know it. If realtors are so sure the housing market is really strong why not ask the government to get rid of CHMC and allow the free markets to show the world just how sound Canada’s housing market really is.

#132 Dom on 06.23.12 at 11:25 am

Chiquita Banana # 94

“The rental market is so tight that there are open houses and bidding wars.’

LOL what are you talking about ? Look at MLS and view it.ca or simply drive around the GTA to see the thousands and thousands of empty houses and condos. I have buddies sitting on empty houses and or condo’s and they complain they can not find anybody. A couple of buddies have been trying to sell or lease out their properties. Bidding wars? LOL you must be a realtor or simply a gullible person.

#133 Daisy Mae on 06.23.12 at 11:31 am

“After all, this was a moment of monumental failure for F. He was forced to retreat 100% from his 0/40 policy and usher in draconian measures to staunch the damage he allowed to occur….. He knew it. Mark Carney knew it.”

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

And, by the way, so did HARPER….

No one makes a move without his approval. After all, he’s da boss!

Wasn’t it Harper who led you, Garth, to the door ’cause you wouldn’t agree to this stupidity?

#134 FTP - First Time Poster on 06.23.12 at 11:33 am

I feel sorry for Ken. I once had a heart to heart with a younger co-worker who was having fun sewing his seed and dating whoever he wanted. I told him that while that was all well and good, when it time to settle down and find the right girl, make sure she had a good job that paid well – not a “community college” or secretarial school job.

My advice was two fold: 1) You will be equals financially instead of what a lot of my buddies have – a “housewife” who wiles her day away shopping and spending like made.

2) Should you have kids and you kick the bucket – she’ll be self sufficient enough to raise them.

Luckily I followed my own advice. Mrs. FTP doesn’t make as much as me, but she has a recession proof, high paying job. She still gets a good chunk of cash being on Mat Leave and when she goes back, we’ll have even more.

#135 chris on 06.23.12 at 11:35 am

Shocked to read CMHC statistic that only 5% of the homes they insure are over $1M. If this is the case, Vancouver SFH won’t take a big hit from the mortgage tightening.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/targeting-high-end-mortgages-more-politics-than-protection-experts-say/article4365313/

#136 Burnaby Renter on 06.23.12 at 11:35 am

The picture is hilarious . . . he’s using the wrong type of saw!! Keep up the good work Garth.

#137 Mixed Bag on 06.23.12 at 11:43 am

This is my favourite comment in Garth’s post:

“It’s all about choices, Ken. You made ‘em. You live with ‘em.”

And yes, it applies to me too. :)

#138 TnT on 06.23.12 at 11:45 am

Chiquita Banana # 94
“The rental market is so tight that there are open houses and bidding wars.’

#111 Dom
LOL what are you talking about ? Look at MLS and view it.ca or simply drive around the GTA to see the thousands and thousands of empty houses and condos. I have buddies sitting on empty houses and or condo’s and they complain they can not find anybody. A couple of buddies have been trying to sell or lease out their properties. Bidding wars? LOL you must be a realtor or simply a gullible person.

*******************
I agree Dom, I am renting in 416 prime location with a wife, 3 kids, 1 dog and 4 cats. I think it’s a realtor who posted that….

#139 John on 06.23.12 at 11:48 am

It’s been a homerun finding a clearinghouse of Canadian values. Pure koolaid hangover. Take a peek at this one:

House Horny Housewife wrote:

“Make sure those children know the value of a buck so that they learn to support themselves as soon as they are able. You will be doing both them and yourselves a favour. RESPs are fine but your children should also know how to support themselves so that the flight from the nest will be seamless. Them knowing how to take advantage of financial opportunities is also a necessary thing.”
———–

What a horrible value system, completely detached from reality. Kids learn values from what’s really going on. Your advice is little more than covering the large stink going on.

Dad is a boy. Without masculinity, he rejects choices
( responsibility), and blindly accepts his “lower value”
( the Canadian degendered, neutered feminazi soup). He’s reacting, reacting, reacting. To be fair, his will is broken, so it’s just another example of someone needing help. And deserving help…and much empathy.

Children are brilliant, but will crush their real feelings
( to their extreme detriment) to support and get behind the belief system of “grown-ups”. So they’ll take House Horny Housewife’s sage advice…if they had the misfortune to have it imposed on them by manhaters. Hell, let’s face it, the manhating tragedy does not belong to the poster. She is a product of her family and society.

As you can well see, our “financial” mess, so eloquently expressed by the housing bubble ( itself supported by de-gendered non-decision making), is something not understood by House Horny Housewife.

Most important for men? There is no possibility of her ever getting it. She’ll defend the delusion to the end, all the while holding up children as human shields. Why not? It would not be unreasonable to suggest the same thing happened to her. Nobody creates a “parent protection racket” without cause.

The post shows how far away from the root of the problem Canadian society is.

#140 Robert on 06.23.12 at 11:50 am

Shorting the Housing Market. Renters are winning big time from now til the market bottoms out. Housing valuations declining even .5% per month mean that the average bung in GVTA is losing 2500 per mo in value even before fixed costs are factored in. Add in mortgage, maintenance and taxes results in “owners” bleeding cash daily to hang on to a depreciating asset. Wanted to make money on Facebook shares, should have shorted the market, especially with all the hype. Want to make money on housing, rent from the greater fool.

#141 Average Joe on 06.23.12 at 11:55 am

#74 Dan7

“Garth why the “F” don’t you have your own youtube channel ? You would probably make a killing if you became a youtube partner.”

YouTube is a brain vacuum. You loose 50 IQ point just by typing the URL. Its the Holy Temple of morons with boobs and cinnamon/milk/… dispairing challenges and ads poping/flashing everywhere like a twinkling pizza …

YouTube is primarily aim at teenagers, then douches, then depressed porn addicts.

And GreaterFool is aimed at depressed only (porn optional).

#142 Jane24 on 06.23.12 at 12:01 pm

Looking over the pond from England I would be very interested in reading anyone’s Open House experience this weekend.

Is it still bidding wars or crickets in your neighbourhood right now?

#143 KingBubbles on 06.23.12 at 12:26 pm

55 The American – …Americans want to own a home (hence why we had house-buying frenzy several years ago), however one was never viewed as “trash” or “a loser” simply because he/she rented. My Canadian friends constantly tell me about this mentality…

Sadly, I have seen this belief raise it’s ugly head many times in Canada. Ignorance and stereotyping are the drivers in my opinion and it’s really just discrimination.

#144 Karie on 06.23.12 at 12:37 pm

Wow! Furst is back and that poem is fantastic! When you’re good at something, haters sometimes come out to try to bring you down. Your poems make me smile or laugh!

I think Ken is doing great. Shame on all the people who keep coming on here and telling one spouse to divorce the other because of housing disagreements. Why so quick to be a quitter? If that’s enough to make you call divorce then what’s going to happen when you face a real tragedy? Life involves compromise.

Lethbridge is a nice town with a university there. Ken don’t have to rent unless they prefer to as there are an abundance of affordable houses for sale in Lethbridge for under $200,000 for 3 bedrooms. That would be if your kids shared bedrooms or you could maybe get a 2+2. We have 3 kids and 4 bedrooms but 2 of our kids WANT to share a room. If you are set on 4 or 5 bedrooms you are looking more $$. Up to you, Ken and family! Good luck!

#145 Mr. Anderson on 06.23.12 at 12:42 pm

#123 CrowdedElevatorfartz

Is it fair to assume your single? Not that there’s anything wrong with that speaking from experience.

#146 a prairie dawg on 06.23.12 at 12:44 pm

Now he’s asking if he’s screwed? lol

A bit late for that.

Typically, here’s how the next few years play out:

She won’t get a job. He will. She will want a developed basement, and a manicured backyard with all the trimmings, and a new car/suv/minivan. He won’t. Any failure on his part to keep up with the neighbor Jones’ will be forced on him whether he wants it or not. A few weeks of sleeping on the couch will keep him in line if necessary.

Hello HELOC, goodbye manhood. Just give her your pants now dude. You’re waaaay past, “am I screwed?”

#147 Calgary's OK on 06.23.12 at 12:52 pm

“#64 James on 06.23.12 at 12:35 am

#46, not sure were you are finding a $20k vacant country lot. must be in a have not province or 2 hours away from civilization.”

Quick search on MLS produces this:

http://www.realtor.ca/propertyDetails.aspx?propertyId=10802106&PidKey=1711890747

Looks like a decent size serviced lot, less then an hour drive to Lethbridge, AB, cost less then 20K too. Not sure if Alberta is a have province right now or not, but people still getting decent jobs in oil and gas industry around Lethbridge. Alberta rocks!

#148 Junius on 06.23.12 at 12:55 pm

#55 The American,

You asked, “Can someone please explain to me what is driving this mindset and why it has been successful in securing such a stronghold within the Canadian population?”

My guess is that it has to do with the fact we are traditionally a less urban country. People never buy in New York, Chicago, LA, London or Paris when they first move there. There is a general understanding that renting is acceptable for many years and these attitudes trickle down. Canada is more like Australia with only a few cities unaffordable so the mentality is different.

#149 Chiquita's Vindication on 06.23.12 at 1:06 pm

#138 TnT

Chiquita Banana # 94
“The rental market is so tight that there are open houses and bidding wars.’

#111 Dom
LOL what are you talking about ? Look at MLS and view it.ca or simply drive around the GTA to see the thousands and thousands of empty houses and condos. I have buddies sitting on empty houses and or condo’s and they complain they can not find anybody. A couple of buddies have been trying to sell or lease out their properties. Bidding wars? LOL you must be a realtor or simply a gullible person.

I agree Dom, I am renting in 416 prime location with a wife, 3 kids, 1 dog and 4 cats. I think it’s a realtor who posted that….

**********

Dom and TnT are NOT correct.

Chiquita is most likely NOT a realtor, and is telling the truth:

There are NOT thousands and thousands of empty houses in GTA!!!!!!!!!!

Condos, maybe. But not houses!!!!

In any case, why would Chiquita want a condo?!!?

Renting a SFH in GTA is incredibly expensive, and demand is high.

There ARE bidding wars.

Try to base your opinions on something more than “driving around”–which doesn’t even make sense!

How can you know just by “driving around” what homes are actually empty? Have you driven down every street? Do you have X-ray vision?

Geesh.

Chiquita = Vindicated.

#150 Humpty Dumpty on 06.23.12 at 1:09 pm

Wonderful thing about making choices…

The contrast between the reporting companies who
by law cannot lie about their fiscal realities, versus the central planners who admit that they MUST lie to preserve calm and control.

Its up to you to decide whose version of the truth you want to believe.

http://www.sprott.com/media/171797/maag-06-12-ministry-of-%5BUn%5D-truth.pdf

#151 CrowdedElevatorfartz on 06.23.12 at 1:12 pm

@#119
I thought of that whilst sitting on the “Throne”…..how appropriate eh BPOE ?

#152 Blue Monster Lover of Meats and Vegetables on 06.23.12 at 1:14 pm

#104 stickler on 06.23.12 at 8:36 am
Easy, privatize everything that can be privatized,
>> So prices will increase…dumb. Just hand over control of steady cash flow generators & all precious resources to corporations…dumb.
*** Private operations in competitive markets bring costs down and quality up. It’s not dumb.

eliminate the income tax, have only a consumption tax,
>> That I like….but you know the consumption tax will be higher then it is now right?
*** That’s fine if it needs to be but at least it’s avoidable and doesn’t punish working, saving and investing.
eliminate CPP and EI,
>> No safety net? disagree.
*** People will take more self responsibility when there’s no gov. support and they’ll have more money and a more functional society to lean on. Plus there would be more charity and we always have family and friends to help us in need. Direct charity is much more effective. We don’t need the government providing help to anyone, it’s a disaster.

eliminate the CRA.
>> Great, but don’t believe that would get rid of all 40,000 employees. Someone has to administer the consumption tax you love.
*** It’s pretty easy to administer a sales tax like the HST. A simple audit from time to time is all that’s necessary.

Open up complete free trade between provinces and internationally,
>> Don’t think you thought this one through…you still want working wage jobs in Canada don’t you?
*** Yeah. Protectionism only hurts the closed off society. Your economics are wrong. See North Korea. Trade is good at your local farmers market as it is with China and the rest of the world.

get rid of CBSA and open the boarders, this can be done now that there are no handouts by government, come and go as you please, the only thing Canada has to offer is freedom.
>> This one is pure fantasy.
*** I say aim high! We’d still have laws.

And last but not least, back our currency with gold.
>> You know Canada does not have much gold right?
*** Who’s fault’s that? Start buying!

Maybe you should have smoked the other half…
Thanks, I will tonight. I’m outta here soon!

Enjoy the weekend everyone!

#153 45north on 06.23.12 at 1:30 pm

furst:
Never have I felt so lost and sad
No longer a man but a lonely lad
No house, no car, banks will not lend
30, why didn’t you tell us this is how it will end
We’re done, we’re through, 30 is gone
On July 10, 25 will rise with the dawn

good stuff furst!

#154 Calgary Car Guy on 06.23.12 at 1:33 pm

Re #139 John

Interesting post. Caught me by surprise. I am and have always been a non-conformist. Blazed my own trail with regards to most things in life. Has that always worked out well for me? No, it hasn’t but I wouldn’t have had it any other way. It’s called freedom and freedom is something many Canadians throw away with abandon with both hands these days. My one major decision where I conformed was to get married. I shouldn’t have done that and I knew it was against my gut feelings at the time but I pushed ahead anyway. Huge mistake. Marriage may be fine for many people but I am not suited for it. Somewhere in the archives of this blog is the statement ” Marriage is the biggest financial decision you will ever make” Truer words have never been spoken. NOTHING is more important than freedom and independence to me. And no, you don’t necessarily need a lot of money to have it and keep it. Live simple. Look at the material things in today’s world for what they really are. Just stuff to spend money on. Most people spend the first half of their life collecting “stuff” and the second half trying to get rid of it. That may have originally come from George Carlin. A wise man who always said what he thought. Freedom.

#155 TNT on 06.23.12 at 1:33 pm

Global slowdown=job losses=Increased RE inventory FOR SALE=Reduced Priceing, aka buyers market
=Global Slow Down.

#156 Gmaz on 06.23.12 at 1:37 pm

Chiquita Banana # 94

You are so RIGHT.
I don’t agree with what is happening BUT you only have to subscribe to TOSold to get a daily update on what homes are selling and for how much. Over asking is very common, even in the 905, hence still bidding wars, even for freaking townhomes, over $500,000.

Before anybody starts accusing me of being a Realtor, let me say I don’t agree with these bidding wars. These people are really fools, especially after this week’s announcements.
And stop accusing people who actually look at data to make judgements instead of standing on their porch and assuming they know what is going on in the whole GTA area based on what one of their buddies tells them.

#157 CrowdedElevatorfartz on 06.23.12 at 1:38 pm

@#145 Mr Anderson
Are you asking me on a date??????

and yes, there is soooooo much wrong with that!

I’ve seen you in the Matrix. Not my type.

#158 vatoDETH on 06.23.12 at 1:47 pm

Laaaassssstttttttttttt!!!

Just like I hoped to be! I will also be the last to buy a house! Despite my pathetic savings and lack of assets at my age, I am happy to be last!

I can wait to cash in on this opportunity to buy into the market at bottom. I’m in the midst of setting up a few key projects and business ideas to get me caught up now.

My plan for years was to buy a place and leverage it into rental properties. That plan got screwed with the oil boom and then the housing rules experiment. I sat there frozen and paralyzed over the last few years, waiting.

It took me quite a while to realize that there are other opportunities out there. Screw the housing market! I’m tired of waiting! Get ready and position yourself to capitalize when the bottom hits.

Don’t listen to sales people, they’re not economists…

#159 Pat on 06.23.12 at 2:04 pm

@ #134 FTP,

Equally important to the wife earning a good coin is that she is younger and good looking. You want her to last long ’cause a divorce costs a lot.

Don’t forget to evaluate her family too. Wealthy parents and no siblings is best – lots to inherit.

Next, to minimize educational costs you want brilliant kids that will win scholarships. So the wifey better bring in some smart genes as well (good earner does not necessarily mean particularly smart, as exemplified by FTP).

Of course you want healthy kids too – to avoid direct or indirect health-related costs. Breastfeeding is very beneficial in this regard. Make sure your partner is well endowed to perform the required functions.

To summarize, you are looking for a smart, professional, high earning, younger, good looking, voluptuous girl from a wealthy family with no siblings. Anything else I’ve forgotten or that will do it?

#160 Snowboid on 06.23.12 at 2:05 pm

#152 Blue Monster Lover of Meats and Vegetables on 06.23.12 at 1:14 pm…

“…Private operations in competitive markets bring costs down and quality up. It’s not dumb.”

In real world examples since 2001, the exact opposite happened in Lotus land, costs went up and quality of service went down.

Even worse, resources owned by the citizens of the province were sold off at firesale prices, leaving a legacy of debt future generations may not recover from.

#161 45north on 06.23.12 at 2:06 pm

carl berger: I would appreciate any advice.

let’s point out two extremes:

door number 1: the “small place” turns out to be adequate for a family of 5, your wife understands and agrees with the need for sacrifices, the small place (in Vancouver) steadily increases in value and after 5 years is worth 150% of purchase price, your father is happy to have his money in the place knowing that you could sell at any time, at a handsome profit.

door number 2: the “small place” is too small, it declines in value but not as much as other parts of Vancouver, your wife is not a happy camper, your father is distraught because his capital is tied up in the place and he can only get it back if you sell it at a loss.

#162 Junius on 06.23.12 at 2:23 pm

#152 Blue Monster,

You said,”Easy, privatize everything that can be privatized.”

Do you know how badly this has worked out in so many places in the US? Terribly.

In most cases were public services are privatized the result is poorer services and eventually higher prices. This is fact.

Don’t get me wrong, I am a competitive market capitalist. However I have seen how time and time again how we are sold an ideological bag of goods that the private sector is more efficient only to watch a public utility or service be turned into a private monopoly for the friends and donors of politicians – mostly on the right.

#163 Mario DeSousa on 06.23.12 at 2:57 pm

This is an easy problem. Ken needs to separate his finacials from his wife. Then buy the house under HER name. Then soon she’ll be forced to declare bankruptcy while Ken keeps a tight hold on his modest pile of gold for his children’s future.

Afterwards Ken can decide if he still wishes to be associated with a bankrupt parnetner who gave him such an unworthy/unloving altimadum.

#164 Claudius Emperor on 06.23.12 at 2:58 pm

The number of new signs ‘for sale’ for SFH in North York in the last 2-3 days is astonishing. 50-60 percents drop in the prices not just for condos but for SFH as well would not be a surprise for me.

#165 Fleabitten Monkey on 06.23.12 at 3:32 pm

#135 Chris,
Interesting factoid from CMHC. However, does anyone have a data point on the proportion of the Vancouver book of business within that 5%? Thats what is more relevant and would add colour to the statistic.

#166 FTP - First Time Poster on 06.23.12 at 3:49 pm

Speaking of George Carlin:

https://www.youtube.com/watch?v=Yi6XV8yBFoU

Truer words…

#167 carl berger on 06.23.12 at 3:51 pm

#161 45 North

So is that a “yes” you should do it or a “no” you should not?

#168 TurnerNation on 06.23.12 at 4:07 pm

From my email inbox::: economic joke.

Subject: Euro 2012: Germany vs Greece…

Greek line up for today’s game:

Crisos
Insolvenzos
Creditopoulos
Bankruptos
Noeurosleftos
Ruinos
Lendusmonios
Defaultas
Notaxus
Noliquidios
Fiascopolus

#169 amazing on 06.23.12 at 4:21 pm

Gmaz? You are back…. show some examples… and please tell all those people in Mississauga who have been sitting on their homes for so long that they are changing agents about all these so called bidding wars in Mississauga. Subscribe to different information, like putting on your running shoes and walking neighbourhoods and seeing for yourself if bidding wars are true… I am now convinced officially that you either a) lack some brain capacity or b) are pumping Mississauga real-estate for some reason that is beyond me. The bidding wars in hot neighbourhoods like Davisville/Leaside/Thornhill etc. where all the so called money and HAM live are not happening. Get a grip and stop trolling this sight. Honestly… there are so many for sale signs and open house signs… price reduction signs. I’m sorry but “GMAZ” is full of it and I am calling you on it.

#170 Smoking Man on 06.23.12 at 4:44 pm

Row 11. Centre Stage. Rogers centre. AHhhhhhhhhh

American you hit nail on the head. In canada you are viewed as a losser if you rent. That’s why its different here. On previous post went into great detail on the subject. The herd is different

#171 Victor on 06.23.12 at 4:53 pm

Just got this email newsletter alert from a mortgage broker here in Toronto. Note the multiple references to “work around solutions” for clients.

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

Friends:

Changes will effect anyone of the following people:

– Self-employed or salaried people,
– People refiancing to take advatage of these low rates, pay debt, or invest money in 2nd mortgages at guaranteed 8% returns with me, and/or
– Purchasing a home or condo.

If you are remotely thinking of doing anything mortgage related; I need your application in my system before July 9th, which is when the changes below to mortgage lending will take place. You will have less options after July 9th; however, for many I am prepared with work around solutions.

Here is is a link to the application: https://www.secureapp.com/MBPLUS/apps/mbapp3short.asp?bid=5RCB500B565

The summary of changes below, and link to article are a good read.

PS If I reached you in error, you can unsubcribe below.

***My email to industry follows***HARPER GOVERNMENT TAKES FURTHER ACTION TO STRENGTHEN CANADA’S HOUSING MARKET

Good morning strategic partners:

For the record: These changes are of no consequence to us, we have work arounds to handle all of the below. Now is when the real professionals in real-estate and mortgages shine and take over market share.

http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-clamps-down-on-mortgage-rules-to-cool-overheating-market/article4359232/

Attached please find the Government of Canada’s announcement, regarding changes to Government Backed Insured Mortgages, effective July 9th 2012.

***I am personally not concerned with these changes the broker channel always

The New Rules are as follows and most lenders will be adhering to these guidelines on the effective date:

1) Amortization Period is REDUCED to 25 years for high ratio applications. Banks can continue to offer 30 year amortization on LTV’s 80% or less
2) Refinancing is REDUCED from 85% LTV to 80%
3) Limit GDS to 39% and TDS to 44% –
4) Maximum Purchase Price for government backed mortgage insurance is $1 Million. Homes above $1 Million must have 20% downpayment

Please note: Albeit these adjustments are in force July 9th, exceptions have been allowed on binding Purchase & Sale financing & refinancing agreements where the application is made prior to July 9th. Any mortgage insurance application received after June 21st and before July 9th, that do NOT conform to the new guidelines must fund by December 31st, 2012.

Thank you.
Mortgage Architects – Lead Mortgage Planner

#172 woper_holic on 06.23.12 at 5:20 pm

I call BS on the 5.7% CMHC figure on homes insured over $1 million, I’m sure it is higher than that. But even at that figure it adds up to a “paltry” $33 billion + of the insane $570 billion that they backstop with their pathetic $14-$15 billion in cash reserves. Hurrayyyy the horses have taken off and let’s ever so slowly shut the barn doors!

#173 Mingeford on 06.23.12 at 6:21 pm

@ Jane 24

I nipped in to an open house in Brampton earlier today that my realtor was attending and she had already told me the listing price she chose was to illict a bidding war for the offer night. Well I can tell you I stood there chatting to her for 40 mins and not a soul passed through the door.

She didn’t seem too bothered because according to her she has 7 deals closing this month. She never discounts on her 5% commission so based on her 50% share of that, on say an average deal of $300K that equates to approx $52,000 gross commission for her…………..WTF

#174 Don on 06.23.12 at 6:33 pm

YES PRICES OF HOUSES DROP GO AND BUY SOME LUMBER ,COPPER,DRYWALL,TILE.CARPET,HARDWOOD,WIRE,SHINGLES,A TON OF OTHER BUILDING MATERIALS,AND A SERVICED LOT ALL OF THESE ARE DROPPING IN VALUE PLEASE DON’T FORGET LABOUR AND SEE WHAT IT COST FOR A HOUSE.SO GO AND LIVE IN A SHACK

#175 Jamaican_Gal on 06.23.12 at 6:50 pm

Furst, oh, Furst…what a lovely poem. You are so clever with words. This whole thread could be condensed in that one poem. With satire and humour you have encapsulated the emotions running amok in the streets.

A poet’s delicate soul is often the target of rough-hewn daggers. The art confuses many causing them to lash out with vinegar-tinged words. With a wistful smile, carry on, dear Furst…

#176 Herb on 06.23.12 at 7:40 pm

#162 Junius,

you’re right, of course. I will go fiurther and say that I have not heard of one instance where this privatization has worked in the public interest. If anyone can enlighten me here, it would be appreciated.

The problem I have is that I can’t decide whether the types who plug ideological bags of goods are plain dumb and credulous, or are operatives for the dark side paid to prepare the ground for such shifts of policy.

#177 Daisy Mae on 06.23.12 at 7:45 pm

145Mr. Anderson on 06.23.12 at 12:42 pm
#123 CrowdedElevatorfartz

“Is it fair to assume your single? Not that there’s anything wrong with that…”

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

LOL Funny! No, there’s nothing wrong with being single.

As ‘Dr. Phil’ sez: “No relationship is better than a bad relationship.”

#178 Daisy Mae on 06.23.12 at 7:52 pm

#154 Calgary Car Guy: “NOTHING is more important than freedom and independence to me.”

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

‘Amen’ to that…

#179 TnT on 06.23.12 at 8:20 pm

#149 Bananas!

Simply go to viewit.ca or mls.ca

I secured a 3 bedroom, finished basement in The Beaches, $2000 a month, 1 year lease, 4 cats and a dog.

My credit score is 832 as per BMO so maybe you have bad credit score?

This place I’m renting sat empty for a month, previous tenant left end of January, I refused February and told them March… No problem.

I see many other places for rent here still, some places have signs out front.

Best of luck for you….

#180 The American on 06.23.12 at 8:20 pm

Well, word is starting to hit the publications from credible sources. The Canadian housing bubble is popping. And yes, despite the Polly Anna attitude it may just cool a bit, you need to understand it is indeed headed for a U.S.-style collapse. There’s no way around it. Hell, Vancouver is melting faster than Florida, even.
http://www.moneynews.com/Economy/Canada-Housing-homes-Collapse/2012/05/30/id/440583

http://www.csmonitor.com/World/Americas/2012/0529/Is-Canada-about-to-face-US-style-housing-meltdown

http://www.newsmax.com/StreetTalk/Canada-Housing-homes-Collapse/2012/05/30/id/440583

http://www.bloomberg.com/news/2012-01-30/canada-s-subprime-crisis-seen-with-u-s-styled-loans-mortgages.html

Although not deemed a credible nres source, this is sll a very interesting read…

http://www.doctorhousingbubble.com/canadian-housing-prices-canada-housing-real-estate-bubblereach-apex-set-for-deep-fall-foreign-money-speculation-housing-debt/

Next up, publications will begin posting how Canada’s housing market is even more overvalued than the U.S. at peak. I wish not or it o happen, but Canada’s “melt” is going to make the U.S. melt appear as a cakewalk. Mark these words.

#181 Onemorething on 06.23.12 at 8:34 pm

I’m sure some of you read MISH however this is exactly why there’s 20% more to go downward in USA RE. I’ve said this for a year!

Garth again has moderately estimated a Canadian Avg. of 15% hedging so he doesnt have to deal with the idiocy that comes from the no minds who frequent this blog!

Housing

Let’s put it all together and look at the picture from the point of view of housing.

Kids are graduating from college deep in debt with poor job prospects.
Those with too much debt and too little income are sharing apartments or moving back home, not buying homes and starting families.
Boomers are looking to downsize, not buy more toys and larger houses.
Shadow inventory of buyers waiting for higher prices is immense, yet generation X and Generation Y represent small pools of potential buyers

#182 daystar on 06.23.12 at 8:38 pm

#152 Blue Monster Lover of Meats and Vegetables on 06.23.12 at 1:14 pm

Easy, privatize everything that can be privatized, – Blue Monster

You made me instantly think about the cost of the Divine government selling Sask Potash Corp for $700 mil to an american corp back in the late 80’s precisely because they had the same ideology you.

The fallout? 2 years after the sellout, POT:TSX declared profits of $550 mil, close to what a fully developed mine that was then, the largest potash deposit in the world, was bought for. Last year, the same corp was offered a $42 billion dollar buyout and it was turned down. The amount of government revenue Saskatchewan residents lost was also staggering, never mind what the value of this mine/deposit is today. It was the largest potash deposit then and still is the largest potash deposit in the world now that I know of even though its been roughly 40% depleted. Its safe to say such a decision to privatize Sask potash, especially to a foreign entity, was a huge mistake of mammoth proportions. This example isn’t even remotely debatable. Sask taxpayers got majorly hosed through literally bankrupt ideology identical to your own.

A second large point I would like to make is that monopolies are formed for a very specific reason, whether its private or public and that is to fix prices. Publically, monopolies exist to fix prices downward to the benefit of the consumer with “inclusion” in mind. Working examples of this are SGI, ICBC and AMA. These provincial crown corps exist to fix auto insurance to much more affordable levels for the general public. Provinces that don’t have crown corps monopolizing insurance pay on average 2 to 4 times as much to insure their vehichles. Don’t just take my word for it, see it for yourself. Compare auto insurance from west to east and you’ll see it quickly for what it is.

Privately, monopolies are created in the private sector to squeeze out competition with the sole aim of fixing prices to the upside. We are seeing these trends with food and drug manufacturers as well as certain commodities and its ultimately at the consumer’s expense. The shareholder benefits but unfortunately its a small percentage that benefit to the sacrifices of many and such services and products become “inclusive” and thats the problem going forward with monopolies that are private so what I would like you to do in your spare time is not to take my word for it but look at what the differences are with monopolies concerning pricing of products and services passed onto the consumer and see it for yourself.

Above all, ask yourself how privatizing a government monopoly can in any way benefit anyone besides the shareholder by privatizing a monopoly to get a private monopoly in return. (think BC gas privatized to Terasen as an example in terms of what it did to gas bills for 40% of BC residents. Terasen is a U.S. corp so it hurt Canada’s potential tax base beside driving nat gas prices up for BC residents and it all points back to provincial politicians being legally greased through directorships and share options upon re-entering private life. (Emerson has more than one example of such behavior but Teresen is the most blatant)

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

#183 45north on 06.23.12 at 8:40 pm

carl berger: So is that a “yes” you should do it or a “no” you should not?

no

#184 TurnerNation on 06.23.12 at 9:00 pm

Our forum host, on the scuzzy Howe Street radio show
:-)

http://talkdigitalnetwork.com/2012/06/this-week-in-money-37/?

Show Archives

June 23rd, 2012
Jun23

■Garth Turner – Canada’s new mortgage rules.
■Mike Shedlock – Latest from Europe.
■Adrian Ash – Operation Twist… and Gold.

#185 zeeman on 06.23.12 at 9:08 pm

to gmaz

man here you go again….i was out today at open houses in markharm and the agents were telling me that it has slowed down a lot and after the new mortgage rules announcement it has completely killed the market…..no one is serious at buying right now and most have a wait and see approach…….so why would it be different in missisauga

#186 Vangrrl on 06.23.12 at 9:09 pm

Re #46 Anonymous:

“That is why I never ever want to marry a North American women, they don’t care what happens to their husbands, they are only out for themselves.”…. as opposed to ‘them’ (immigrant women) who you stated in the paragraph before simply SHUT UP and put up with the lot they have in life.

Haha- I figure most North American women don’t want to marry you either, dude, so you’re safe there!!

#187 dogman01 on 06.23.12 at 9:18 pm

Interesting Summary or changes here:

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/06/20-observations-on-the-new-mortgage-rules.html

#188 Jim Lahey, Sunnyvale Trailer Park Supervisor on 06.23.12 at 9:25 pm

#86 Furst

Thanks for heeding our request to post a poem once again. The blog wasn’t the same without your poems! Today’s post is a gem and the park will once again be read Furst’s poem over the loudspeaker tonight. It is Ricky’s turn to read and he is just ecstatic with anticipation…

#189 City Slicker on 06.23.12 at 9:30 pm

#154 Calgary Car Guy on 06.23.12 at 1:33 pm

Re #139 John

Interesting post. Caught me by surprise. I am and have always been a non-conformist. Blazed my own trail with regards to most things in life. Has that always worked out well for me? No, it hasn’t but I wouldn’t have had it any other way. It’s called freedom and freedom is something many Canadians throw away with abandon with both hands these days. My one major decision where I conformed was to get married. I shouldn’t have done that and I knew it was against my gut feelings at the time but I pushed ahead anyway. Huge mistake. Marriage may be fine for many people but I am not suited for it. Somewhere in the archives of this blog is the statement ” Marriage is the biggest financial decision you will ever make” Truer words have never been spoken. NOTHING is more important than freedom and independence to me. And no, you don’t necessarily need a lot of money to have it and keep it. Live simple. Look at the material things in today’s world for what they really are. Just stuff to spend money on. Most people spend the first half of their life collecting “stuff” and the second half trying to get rid of it. That may have originally come from George Carlin. A wise man who always said what he thought. Freedom.
———————————————————-
Well said brother! And amen.

#190 Vangrrl on 06.23.12 at 9:37 pm

#159 Pat:
You want her to have a gun and a shovel as well so when she gets sick of your crap (probably by year 2 of marriage) she can take you out and bury you in the back yard :)

#191 45north on 06.23.12 at 9:58 pm

dogman: great article by Robert McLister – wonder if he posts here?

#192 amazing on 06.23.12 at 10:09 pm

Yes, your friendly realtors are out on the patio’s drinking with friends, travelling around the world… because up until now it’s been easy street and good times… when it’s good it’s good… but when times get tough there will be many hungry realtors. Realtors will sell wether the market goes up or goes down… but when the market goes down.. they will have to work a lot harder for a lot less commission. A sign of a down turn will be when all those realtor ads on bus shelters start coming down.

#193 NoName on 06.23.12 at 10:25 pm

#108 Toronto_CA on 06.23.12 at 9:10 am

Funny story,of their savings

400k of their saving can be accedes only by being
RETIRED, FIRED, DIVORCED OR DEAD and on top of that they can access only at age 55 or older.

115k of RRSP can be taken out, but tax burden is in between 22-46%…

Assessment on propertys is arbitrary number, plus when they sell cost is involved, and tax if any…

iffy “real” net worth
366k

the way i see it
http://i48.tinypic.com/29krh5f.png

i could be wrong
yes i’m jelous…not

#194 Mr. Anderson on 06.23.12 at 10:27 pm

#177 Daisey Mae

Not sure about CrowdedElevatorfartz but not being a viewer of Dr. Phil I do subscribe to that point of view….lord knows I have long time friends that just can’t be on their own and the train wrecks I’ve observed…..well to quote Garth “this will not end well”. Just saying.

#195 carl berger on 06.23.12 at 10:39 pm

#183 45 North

carl berger: So is that a “yes” you should do it or a “no” you should not?

no
************************

Thanks. I will take your advice to heart and rent a large place for my family and see if things slow down next year. Meanwhile, we’ll be paying a steep rent and “throwing money out the window to wind up with nothing” according to my Dad. But at least we won’t be like caged rats in a small place, which will eventually lead to a divorce anyways.

#196 Debtfree on 06.23.12 at 10:43 pm

@133 dm don’t worry about Steve . He’s asking and no doubt getting advise from that popularist Brian mulroney on how to keep the country together . But on the bright side at least he’s not asking advise from his dead dog . That would be a king thing . Have we not had a most amazing menagerie of Primeministers . Steve mr. 39 percent . Ain’t gerrymandering great . Does any one remember Kim Campbell . What a gong show.

#197 Junius on 06.23.12 at 10:47 pm

#176 Herb,

I beleive it is entirely ideological. The solution to every problem is to psuh for so called free market solutions. Every position pushes the blind faith that private is better than government in the most absolute extremes.

This prevents the possibility of nuance or even thinking about the issues because the goaal is not really about solutions or sensible policy but victory of the ideology.

#198 Foggy on 06.23.12 at 11:14 pm

20 grand for a building lot out here in the Maritimes (NS) is a pretty common price. And for that you’ll get around an acre. Hell I bought the one next door to me for 7 grand after I purchased my house. Not everywhere has silly land prices like BC or S Ontario. The only speculative activity on raw land out here, was ocean frontage back in the mid-2000’s. And it was mainly driven by Americans who saw NS’s prices as being bargains. It has since cooled off substantially.

#199 Gmaz on 06.23.12 at 11:30 pm

@ zeeman

one of many examples from Mississauga, just yesterday:

4846 Colombo Cres Sold: $690,000 for $11,000 over asking!!! So bidding war, after only 5 days on the market. I thought the final sale price was outrageous for a house in Mississauga! That is crazy for a cookie cutter suburban box in a crummy subdivision.

Don’t even get me started on Vaughan area. They are getting over asking in higher priced properties.

Again, I don’t agree with this at all. Just greedy sellers and foolish buyers.
No one wants this to stop more than I do, but it hasn’t happened yet. Here’s hoping that it does after July 9th.

For the final time, I am not trying to disagree with anyone that this has to end, just that it hasn’t happened yet.

Feel free to subscribe to ToSolds on your own so you can see there are many examples of bidding wars still.
I am going to unsubscribe as it depresses and confuses me too much when I see what people are foolish enough to spend on some really crummy properties.

I think this will be my final post here as well. I originally just wanted to know why these crazy prices in Mississauga were happening but I guess other posters just want to ignore it.

Anyways, wish you all the best return on your investments and liquid profitability.

#200 Nostradamus Le Mad Vlad on 06.23.12 at 11:33 pm


NatWest IT crash or bank holiday? The Fourth Reich Is the IMF – BdBs driving them on? Taming the Costs of College Leave this continent and go to the Far East, young person; 26:58 clip Mafia, organized crime (the govt.’s banking secrets) and other stuff; 2:25 clip Little boxes (Germany); Three Reasons why housing is finished; Greece More, please; Too Convoluted Ron Paul, GS and Greece; Economic Recovery? Drive / reverse to the future / past; Vote Buying You scratch my back . . .; G20 reviewed Free (not fair) trade arriving shortly? BMO Financial Group 17 Wisconsin banks closing; Depression Going Global; Greek brain drain There is nothing for smart youth; Second early repayment for Iceland.

John Mauldin The US Fed is carving up pension plans; Equals and Opposites Wages – down. Corporate profits – up; Another Bubble Like popcorn, it’s popping, and Horrible Chinese economic data (fudging the numbers?); The Feds can’t even agree among themselves; 21:39 clip What happens when the entitled elect themselves; Charts that count.
*
Funny stuff? Gulf of Tonkin redux To understand the future, go back a a little. First few sentences are good; Cdn. Politics Harper McGuinty with figures from the Winnipeg Free Press on a US site; 2:17 clip Armored vehicles on the streets of America; Cooling Oceans Has some effect on the climate; Rain The UK or BC? We’re sunny but drenched; Cockroaches, not banxters necessary for evolution; GM grass linked to cattle deaths. So much for Monsanto; War Games Coming to NKorea soon; Ten Tips for companion planting.
*
disciple — Parallel Universes = Deja Vu This is more up your street.

#201 ANONYMOUS on 06.23.12 at 11:44 pm

Someone here said this nonsense:

(“Equally important to the wife earning a good coin is that she is younger and good looking. —-
Don’t forget to evaluate her family too. Wealthy parents and no siblings is best – lots to inherit.
—-
To summarize, you are looking for a smart, professional, high earning, younger, good looking, voluptuous girl from a wealthy family with no siblings.” )

WOW, NOW THAT IS NUTS !!!

Listen; life is short and all I really want is to just enjoy life with as little stress as possible. To me its okay if the wife is ugly, fat, bad health, low income, etc. All I really want in a partner is someone who is kind to me, doesn’t hit me, and if we get divorced then she will not try to take me to the cleaners, and we can still be friends afterward, that’s all I really seek in a partner. I think even THAT is asking for too much in today’s feminist-dominated world here in Canada.

#202 Dd on 06.23.12 at 11:47 pm

Jim sinclair.. Lehman 2?

There is a big problem brewing again in the OTC derivative market.

A major international financial auditing firm is currently involved in a massive project on Wall Street that presently has over 900+ consultants involved, which is massive and beyond even the size/scope of the Fannie Mae restatement several years ago. They’re grabbing any senior financial analyst and software expert that they can to help this “unnamed” major Wall Street bank calculate valuations for a suddenly devaluing portfolio of Credit Default Obligations that they have heavily invested in. This auditing firm is charging nearly double their normal billing rate and is getting it, no questions asked.

#203 FTP - First Time Poster on 06.24.12 at 12:26 am

Malcolm Mayes of the Edmonton Journalist is the only part of this rag worth following.

http://www.edmontonjournal.com/Malcolm+Mayes+cartoons/1007472/story.html

#204 timbo on 06.24.12 at 12:51 am

http://news.investors.com/article/615616/201206220802/why-deleveraging-continues.htm?src=SeeAlso

“Further, New York Fed research shows that of 37 million student loan borrowers last fall, only 39% were paying down their balances”

The US will not be returning to spending as usual any time soon……….

http://www.telegraph.co.uk/finance/financialcrisis/9350346/Debt-crisis-Angela-Merkel-defies-Latin-Europe-and-the-IMF-on-bond-rescue.html

“If I give moneystriaght to Spanish banks, I can’t control what they do. That is how the treaties are written,” she said, before racing off to Danzig to tonight for Euro 2012 quarter final between Greece and German..

Christine Lagarde, the head of the IMF, warned before the summit that the eurozone is under “acute stress” and at risk of a downward spiral.”

acute stress is bank speak for insolvent……….

#205 Aussie Roy on 06.24.12 at 3:44 am

Aussie Headlines

Melbournes weekend auction results

A clearance rate of 56 per cent was recorded this weekend compared to 56 per cent last weekend and 55 per cent this weekend last year.

Next weekend marks the end of the first half of the year and the year to date clearance rate is 61 per cent compared to 63 per cent this time last year and 82 per cent in 2010.

There were 544 auctions reported to the REIV this weekend with 305 selling and 239 being passed in, 158 of those on a vendors bid.

Next weekend the REIV expects around 500 auctions

http://reiv.com.au/en/Property-Research.aspx

#206 neo on 06.24.12 at 7:08 am

Turns out these “smart” government officials in China Garth raves about have been fudging their economic data. What!!? I am so surprised?!? And we are suppose to trust these same guys to fix the problem like you mentioned in a previous blog entry? Sure…

http://www.nytimes.com/2012/06/23/business/global/chinese-data-said-to-be-manipulated-understating-its-slowdown.html?_r=1&pagewanted=2&hp

Tempus Fugit…

#207 John on 06.24.12 at 8:27 am

Timbo wrote:

“Christine Lagarde, the head of the IMF, warned before the summit that the eurozone is under “acute stress” and at risk of a downward spiral.”
———-

Remember how those super-low level no name Goldman Sachs et al Canadian technocrats ( F and C) were “warning” Canadians? Yeah, that’s right….after they had blindly followed orders….and fully soaked Canada with cheap funny money? Remember that? Oh the CONCERN they have for the “people they represent”.

The IMF is the same. So let’s roll out the doomer comments, and the ye olde “forgotten about Greece”
( a month ago) , a Europe that will hold together, corporate profits, precious medal head throw-away comments, a “growing” US economy, interest rates rising, manageable debt talk, and bank health, potential 15% drops and multi-year slow declines in real estate values, and how the Euro and dollar won’t fail. Just throw all the bull up on the BBQ for a tough meat dinner.

And while we’re sawing through it all, let’s play some myopic ridiculous content from a doomer master of ceremonies. How can it hurt? It’s just a game anyway.

“That guy’s crazy”……

Yeah, maybe, but probably more for the things he doesn’t say about his real motives and what personally drives him.

Thing is, I still like to get every angle available and decide what’s what. That? Not so crazy.

http://www.youtube.com/watch?v=-Mp-Co8EnHE&feature=youtube_gdata_player

#208 stickler on 06.24.12 at 8:38 am

@ #152 Blue Monster Lover of Meats and Vegetables on 06.23.12 at 1:14 pm

*Easy, privatize everything that can be privatized,

>> So prices will increase…dumb. Just hand over control of steady cash flow generators & all precious resources to corporations…dumb.

*** Private operations in competitive markets bring costs down and quality up. It’s not dumb.

>> Ah, nice you stuck in the competitive market stipulation…that is the whole problem. Much of what the gov’t “owns” is not in an easily competitive market (power, prisons, military protection, etc), or arguably should not be profitable. I took your “privatize everything possible” statement too literally then.

*eliminate the income tax, have only a consumption tax,

>> That I like….but you know the consumption tax will be higher then it is now right?

*** That’s fine if it needs to be but at least it’s avoidable and doesn’t punish working, saving and investing.

>> So your new mondo consumption tax wont include rent, food, gas, heating oil, electricity, financial services?…so what you really envision is really a 300% tax increase on stuff you dont buy huh. LOL.

*eliminate CPP and EI,
>> No safety net? disagree.
*** People will take more self responsibility when there’s no gov. support and they’ll have more money and a more functional society to lean on. Plus there would be more charity and we always have family and friends to help us in need. Direct charity is much more effective. We don’t need the government providing help to anyone, it’s a disaster.

>> What would be a disaster is taking away EI and CPP…or all those people could move in with you. I hear you are very charitable.

*eliminate the CRA.
>> Great, but don’t believe that would get rid of all 40,000 employees. Someone has to administer the consumption tax you love.

*** It’s pretty easy to administer a sales tax like the HST. A simple audit from time to time is all that’s necessary.

>>Hey I like the consumption tax idea too…but if you think that if that is the gov’t’s main source of revenue the proper admin is do do a simple audit from time to time you are dreaming again.

*Open up complete free trade between provinces and internationally,

>> Don’t think you thought this one through…you still want working wage jobs in Canada don’t you?

*** Yeah. Protectionism only hurts the closed off society. Your economics are wrong. See North Korea. Trade is good at your local farmers market as it is with China and the rest of the world.

>>Maybe your definition of free trade would work, but since those details are only in your head we may never know….I was taking about free trade in the real world.

*get rid of CBSA and open the boarders, this can be done now that there are no handouts by government, come and go as you please, the only thing Canada has to offer is freedom.

>> This one is pure fantasy.
*** I say aim high! We’d still have laws.

>>If there was no income tax, and people would be free to come and go as they please wouldn’t all the boomers just move to Florida?…heck why would anyone stay!? Especially with no CPP! Or your private for profit healthcare system ;)

*And last but not least, back our currency with gold.

>> You know Canada does not have much gold right?
*** Who’s fault’s that? Start buying!
>>You buying gold might be good for you…but you are advising the Govt. to start stockpiling gold with tax payer money. I get the point, but would like to see detail on how it would come about.

#209 Ret on 06.24.12 at 9:08 am

If the Family Debt to Income ratio keeps moving up, as I suspect it will, what is Plan B?

I am thinking that the majority of the population has no intention of moving, buying 2-3 condos in T.O., renewing a mortgage, or getting a granite HELOC this year.

However, Canadians do love to treat themselves with their credit cards. Many carry large monthly balances now, so what is another few grand more?

F may curb RE spending but there are too many other ways to spend and borrow. Would a raise in interest rates slow spending and debt accumulation outside of the RE sector? I doubt it.

Canadians in the last few years have acted like Americans with respect to debt. Many simply choose to remain oblivious to their escalating levels of personal debt and according to the statistics, have kept piling on more.

F’s hoping that his RE interventions will work their magic but if they don’t, the debt situation could continue to threaten the economy and a Conservative re-election.

Party on Canada!

#210 eaglebay - Parksville on 06.24.12 at 9:36 am

#182 daystar on 06.23.12 at 8:38 pm

Potash Corp pays taxes to Canada and Saskatchewan.
Same with Terasen.
Many Canadians like myself own shares in both companies. We also pay taxes on the dividends and the capital gains.
So much for foreign owned.
These opportunities are available to all Canadians, including yourself.
As for ICBC, my insurance costs are much higher in BC than in Alberta, for less insurance.
You’re full of it.

#211 Chiquita's Vindication on 06.24.12 at 9:41 am

#179 TnT

You rented a decent 3-bedroom house (with finished basement) in the beach for $2000???

YEAH RIGHT!!!

You must live in a TOTAL craphole, OR you are BS’ing.

Post some pics (interior/exterior) of this incredible deal for us all to see!

#212 Daisy Mae on 06.24.12 at 9:42 am

#175 Jamaican_Girl: “Furst, oh, Furst…”

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

…is an unhappy realtor.

#213 The American on 06.24.12 at 9:53 am

At #206: Neo, i don’t honestly remember Garth ever “raving” about the “smart Chinese officials,” but I could have missed that posting I guess.

This much I can say about China right now, though. The economic slow down in China is not a slow down at all. Effectively, they hit a brick wall and real estate values are in free fall, specifically in larger cities that experienced rapid growth like Shanghai. Price collapse so far in less than a year is exceeding 40%. Yes, the NY Times article is accurate in its read that the number coming out of China are fudged (and they probably have been for the past five years too, by the way).

This shouldn’t be a surprise to anyone, though. China was building “ghost cities” for populations that could support over 2 million people. However, these cities have never been occupied. The only reason the places were built is because the easiest way to demonstrate economic growth and provide jobs is to build something. What better to build than an entire city?

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

http://www.youtube.com/watch?v=widrX8EQdu8

http://www.youtube.com/watch?
v=ylcax3efw0I&feature=related

http://www.youtube.com/watch?v=fpPN3e6VbS0

#214 Chiquita Banana on 06.24.12 at 10:11 am

RE: 149 Chiquita’s Vindication

Thanks! I’m not a realtor. I have a dog and a child and another one on the way. I’m stuck in my current rental, even though I don’t like the hood, because I need to be on the west side with subway access and walking distance to groceries etc. 95% of the rental listings explicitly say “no pets”. Some will allow cats or even small dogs, but not a 70 pounder like mine. Condo boards don’t like big dogs either. And who wants to live in a tiny box in the sky with two kids and a dog?

#215 Kam on 06.24.12 at 10:22 am

#199 GMAZ

I agree with you GMAZ.I also get information from ToSold.ca and whatever you have mentioned is right.

Why prices are going up in mississauga? Lot of buyers are from one particular community and each family is having minimum 4/5 kids and and one soon to be arrived in this world.Buyers are getting under social pressure to buy as everyone is buying and there are lots of mortgage agents and real estate agents who fooled the buyer by just telling them how much they have to pay monthly(variable rate 2.99/30 yrs) to get a big house with illegal basement with separate entrance that they can rent for minimum $1k per month.If a family with 4 kids will rent a apartment , it will cost them minimum $1600 (rental bldgs say 3 bedroom).
So buyer feels that it is wise to buy a property.But most of them are earning less than 70k/annum.So how can they get a mortgage?HERE CONCEPT OF MORTGAGE FRAUD COMES UP. Agents arrange a fake appointment letter for buyer’s wife and buyer gets the mortgage.Courts are dealing with lots of mortgage fraud .Garth may be you can tell us about rising trend of mortgage fraud cases in To.

Again you think that how can bank can finance 600k for 500k house(real value)? Bank hires a appraiser and tells him in adavance to evaluate the property close to offer price.

Most of the buyer do not do their homework and rely on their agents from their own community. Buying and selling agents COLLIDE together to fool the potential buyers.Fake buyers visit properties in open houses and genuine buyers think that property is in great demand.

There are lots of other trick which lead to increase in selling prices.Garth and other Blog dogs alreay mentioned about them.

BUT THE PROBLEM IS ALL THESE THINGS WILL KEEP ON HAPPENING IN THE FUTURE TOO.
1. MORTGAGE FRAUDS:FAKE APPOINTMENT LETTERS ETC
2. FRAUDULENT PROPERTY APPRAISALS
3. ILLEGAL BASEMENTS-UNDISCLOSED INCOME FROM RENTALS
4. someone mentioed it yesterday: YOU CAN NOT UNDER-ESTIMATE THE POWERS OF STUPID PEOPLE WHO ARE BUYING THE PROPERTIES
5. MLS.COM WAS SUPPOSED TO PROVIDE THE SALES PRICE INFORMATION IN 2012 BUT RE AGENTS BLOCKED THAT INITIATIVE TOO
6. LOTS OF FLIPPERS BOOK NEW PROPERTIES AND TAKE ADVANTAGE OS HST REBATE AND TELL CRA/BUILDER THAT THEY ARE BUYING THE PROPERTY FOR THIER OWN USE.THEY SELL IT WITHIN ONE YEAR .ONE PERSON SOLD 3 PROPERTIES LAST YEAR AND CLAIMED HST REBATE ON ALL OF THEM BUT CLAIMED FULL MARKET PRICE FROM BUYER.NOW CRA IS GETTING ACTIVE AND TRYING TO RECOVER HST MONEY FROM FLIPPERS.

#216 zeeman on 06.24.12 at 10:31 am

to gmaz:

You pick one listing that sold for a few thousands dollars over asking and you feel that is a reflection of the current market. I just checked ToSold, and there are numerous listings that sold for less than asking price. Why did you not mention 2789 Bushland, 3296 forest bluff, 821 Preston manor and 9 broadview, just to name a few that all have sold for less than asking price and some at 96% of asking price.

Also, the example that you pointed out on the house on colombo st, it was priced very low and only got 11k over asking price. my friend lives on this street and he bought his house in 2008, approx 2800 sq feet with a finished basement for 680. This particular house sold for 690…as you could see it was priced very low ans still only got 690k.

Sorry Gmaz, you need to go and do more research.

#217 CrowdedElevatorfartz on 06.24.12 at 10:41 am

@#177 Daisy Mae

Dr Phil?

UGH.

Havent watched daytime tv in years……
Possibly due to the fact that I work AND the odd time that am home sick and stuck with a remote in my hand…I discover to my horror what a veritable wasteland tv is.

The shreiking audiences laughing or mocking guests and interviewers. The Dumbing Down of America/Canada continues without a seconds hesitation.
Housewives and Househusbands have their brains turned to mush with the gossip shows that pose as ‘reality” tv.

The “photo op” drivel that passes for “news”.
No story can last longer than 90 seconds without the tv audience moving on unless of couse there is nudity or scandal involved.

Then we’re on to evening television.
With hard hitting stories on ET about Jason Biebers latest hairdoo or George Clooneys latest bimbo conquest….
Not to be missed is the latest Fear Factor ,Big Brother, etc.etc.etc. where we learn that men and women are equally good at conniving/manipulating/backstabbing each other…and the winner of the prize is the best person at all 3 of those “charming” attributes.

And TV execs wonder where their audiences are?

The internet,
This blog,
Where I can get true information without the network sponsors censorship.

Sorry for my “off topic” rant.

Walter Cronkite is spinning in his grave at the debasement of todays news televison

#218 CrowdedElevatorfartz on 06.24.12 at 11:01 am

….and just in case anyone is interested.
Its 8am on Sunday June 24 on the WET Coast and it isnt raining? WTF? No sun due to the oppressive cloud cover and the temp is a balmy 13 degrees.
God I love summer in Vancouver! Its so…….bug free.
( hey! ya gotta look on the bright side right?).
Several of my Druidic neighbors have suggested hunting down a small,cute, defensless baby animal and killing it to appease the sun gods but I think thats a tad harsh. Dont you?
I have suggested to them that we catch a dishonest politician( politicus everywhereus) and make them speak the truth by tieing them up and putting small bundles of sticks(faggots if you please) around them while threatening immolation.
Oh the stories they would tell, eh what?
My tattooed, religiously liberal neighbors seem very enthusiastic so after a breakfast of sausages and dark beer were all grabbing pitchforks and piling into pickup trucks and we’re off to find a dishonest politician.
Does anyone have any suggestions as to where we can look?

#219 City Slicker on 06.24.12 at 11:59 am

Everyone seems to be taken by the falsified Chineese numbers. Did we already forget Sino Forest, I think this is just the tip of the iceburg.
And as The American mentions above regarding ghost cities, you’d think if the Chineese had intention of filling them then they’d abolish the one child per family policy.
We live in very interesting times you know.

#220 neo on 06.24.12 at 12:26 pm

At #213The American

This is what Garth wrote in the Choas Blog entry:

“China is run by people smart enough to engineer a soft landing (they’re already pricked the housing bubble), as evidenced by recent moves by the People’s Bank of China.”

That could not have been further from the truth. The truth, which is present in that NY Times article, will slowly reveal what an absolute sham that economy is and there will be no soft landing from what was the largest housing bubble known to man. For someone who has dedicated three years to one in Canada that isn’t even remotely to the scale of China’s and to say their own will be a soft landing and they have smart people who will fix it? They are neither smart nor competent. They are corrupt and shortsighted.

I’ve said many times since the fall of last year that the second half of this year things will finally turn over the global economy. What will set things off will be when we finally find out what a mirage that growth in China has been (July 17th GDP comes out). As much as they fudge that number it will not be good and will take down the global stock markets. Second, all that hot money floating around (ie. Vancouver/GTA housing) which is already fleeing do to repratiating of wealth is going to accelerate and bring down commodities which will give Canada and our stock market and housing market a double whammy. Not to mention Europe will be even a bigger mess and the U.S. seasonal adjusted employment will turn over starting with July payrolls and GDP will be weaker, corporate profits will be weaker and the inventory ramp up that has given us that mediocre GDP since the Fall of 2011 will turn over in the 2nd half of this year. We will find out the consumer still isn’t as strong, nor is business investment and government spending isn’t propping up the situation enough.

The only card the central banks and The Fed in particular will have to play is QE3 late 2012, most likely after the election. Only this time the initial euphoria of it will wear off much sooner than the other programs before 2012 is even over.

Now does that mean the world is coming to an end? No.

Does that mean we have only delayed the inevitable deflation that should have occured in 2008? Yes.

Will the global debt need to be expunged and re-structured and we are only fooling ourselves by adding to it? Yes.

Will it end badly and involve a reset? Yes.

Will that reset, however painful, allow us to finally have a TRUE recovery? Yes.

I’ve put my position out there. Now let’s see how things play out (-;

Tempus Fugit…

#221 Cy on 06.24.12 at 12:31 pm

eaglebay – Parksville

I’m from BC living in Alberta, insurance prices are higher here and don’t even get me started about the energy costs here.

Good post Daystar

#222 woper_holic on 06.24.12 at 12:44 pm

@#218CrowdedElevatorfartz

Wow highs of 15-16 right up until July 1st. Needs to be re-named GPOE (gloomiest place on earth) or MDPOE (most deluded place on earth). Clinical depression has probably perpetuated the real estate insanity out there.

#223 Observor on 06.24.12 at 12:49 pm

HOUSES LESS AFFORDABLE WITH 25 YEAR AMORTIZATION?

Newspaper editorial laments that it will be harder to buy a home.

They seem clueless that the house prices might drop and affordability remain constant.

#224 Observor on 06.24.12 at 1:05 pm

PAY 39% OF GROSS INCOME ON MORTGAGE AND PROPERTY TAXES AND HEATING?

When we last bought a house in 1995, our mortgage payment amounted to 14% of my gross income and less than 10% of our combined income. Add in property taxes and heating and it was 18% of my gross income and about 12% of combined.

That was quite enough for me. For $135,000 we got a 3 bedroom two story 13 year-old house in a suburb of Edmonton. Mortage $108,000 (Scrapped up 25% down to avoid CMHC fees)

Could easily have qualified for a more expensive house and mortgage but chose not too.

I simply can’t imagine paying 30% of gross income on a mortgage. We have been mortgage free since 2003. Yet we find no problem at all using up our incomes. We do a little saving but not that awfully much (We max out RESP, RRSP and TSFA and that amounts to a fair chunk of money).

If you sign on to pay 30% of gross income on a mortgage and especially if you have kids you are indeed a mortgage slave. You are also totally beholden to your bosses since loss of a job would be devastating. You will have little chance of building up any savings. You will live in abject fear of a housing price crash. And you will have done it by your own choice.

What would I do today with the higher prices, well I would have been forced to pay more but I would also have bought a lot less house than the bank suggested I could afford, just as I did in 1995. We could also have moved to a better house since 1995 but we chose to stay put. We all have choices in life and we klive with the consequences.

To each his own…

#225 TnT on 06.24.12 at 1:23 pm

#179 Bananas

Learn to open a site called viewit.ca or mls.ca, why argue with me and see for yourself….

You can post your findings after a few weeks of monitoring.

Dom, TnT = vindicated

#226 TnT on 06.24.12 at 1:25 pm

#179 – should be #211

#227 Daisy Mae on 06.24.12 at 1:26 pm

217CrowdedElevatorfartz on 06.24.12 at 10:41 am
@#177 Daisy Mae

Dr Phil?
UGH.
Havent watched daytime tv in years……

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

Agree. I never watch daytime television, either….

#228 Bill Gable on 06.24.12 at 1:28 pm

“Vancouver is building on its reputation as a city of glass and steel.

Look around the skyline and you’ll see it dotted by cranes, and everywhere there seems to be another hole in the ground making way for another apartment building.

Sixteen condo towers are under construction, according to a database by Skyscraperpage.com. and another 67 proposed high-rises are in the works.

>> As Capt. Hastings would say on Poirot -” Good Lord!”

http://tinyurl.com/7x5w53a

#229 MikeB on 06.24.12 at 1:33 pm

Did Garth write “significantly higher interest rates” Sorry. not gonna happen… Higher maybe but how hard is that to predict when you are essentially at zero. If you think we will see a 5 percent increase in interest rates you are smoking something illegal that is for sure. Just recently Bernanke touted that as long as interest rates stay below 1percent then the US can go on just paying its bills and of course printing cash whenever it deems necessary. So is Canada going to raise interest rates a few ticks… no way… not with the US .. the holder of the world currency.. has a policy of keeping rates very low for the foreseeable future. The entire world is geared to making Wall Street and Banks happy at all cost. They will move heaven and earth to protect them and keep their lifestyle going. Look at the Dodd Frank bill.. the bankers have watered it down so that even when it does come into effect they will have ways around any restrictions. If you keep interest rates low you keep interest in the markets high…which is really what the Wallys want..
Would I love higher rates?? Absolutely.. then I could get a decent return on my money without having to be in the stock market. Yes it will go up but not of any significant amount.
As for F being an abject failure… well… that is kinda old news. Wasn’t he the one who said No One could see the global financial crisis coming. You mean no one except anyone following it and the likes of Paul Volker . Yeah he is a great model for a garden gnome but that’s about it.

I said significantly higher rates as the economy improves. Which will happen. — Garth

#230 live within your means on 06.24.12 at 1:53 pm

Most people spend the first half of their life collecting “stuff” and the second half trying to get rid of it.
………………

Just read that sentence to my DH and we both laughed & agreed. I & many of my siblings are now trying to get rid of ‘stuff’ that we’ve collected over the years. Some very old & beautiful things, IMHO, but the younger generation doesn’t seem to appreciate them. During my travels in Europe (47 yrs) I’ve brought back many items (some heirlooms) from my & my husband’s side of the family. One of my DH’s grandmothers gave me several pieces of 22kt gold jewelry which I no longer wear – they just sit in a safety box. I’ve several sterling silver pieces from Denmark (dated 100+yrs) & lots of my Mom’s stuff from Norway. Hopefully our nieces on both sides will, as they age, learn to appreciate the history behind them. I’d hate to auction them off.

#231 TurnerNation on 06.24.12 at 2:10 pm

New “Greaterfool” bidding strategy for all million-dollar homes: vultch bid at $999,999 (the new CHMC cap).

All bids: $999,999. Until the sellers relent. Get ’em used to the new normal.

We are the 99%!!!!!

#232 Daisy Mae on 06.24.12 at 2:22 pm

#222 Observer: “Newspaper editorial laments that it will be harder to buy a home.”

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

Boo, hoo…..

How long have we had 25-year mortgages? For eons!

And the term was never a problem until the cons started messing with it.

#233 Observor on 06.24.12 at 2:38 pm

Number 230 Turner Nation

We are the 99%!!!!!

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

Speak for yourself…

Some of us are proud members of the 1%

#234 live within your means on 06.24.12 at 3:07 pm

Please excuse my previous post as it now sounds so petty in light of what I have just found out. I just learned that my BIL’s Mom is dying and that a best friend of a neighbour’s son (18) has bacterial meningitis. He’s been in ICU since Wed. & has had multiple strokes & blood clots in his brain. The Drs induced a coma – is that the correct word? His father said he could not live without his son. Neighbour was so concerned that he went to his house & removed all of his ‘hunting guns’. We know the father.

#235 jess on 06.24.12 at 3:13 pm

” austerians”

Why Latvia’s Austerity Model Can’t Be Exported
Posted on June 22, 2012 by Mitch Green | 10 Comments
By Michael Hudson and Jeffrey Sommers
(Cross-posted from FT)
http://neweconomicperspectives.org/2012/06/why-latvias-austerity-model-cant-be-exported.html

#236 Westernman on 06.24.12 at 3:53 pm

Herbie @ # 176,
Ah, Herbie…you socialist devil you… I trust you have heard of the automobile industry? Private enterprise and free market competition have kept prices at least within reason…
Imagine if your socialist government workers were in the auto manufacturing business… a Pinto would have cost 100,000 dollars…
Tell the truth my little Marxist friend – you are living off the proceeds of some kind of government handout aren’t you? Either you yourself, your wife or your wife’s parents… your unbridled love for the communist central planning model gives it away…

#237 woper_holic on 06.24.12 at 4:19 pm

@#233live within your means

Makes all of this sound so trivial doesn’t it? Let’s all pray that all will be ok for both of these people and their families.

#238 John on 06.24.12 at 4:20 pm

Chiquita Banana wrote:

RE: 149 Chiquita’s Vindication

“Thanks! I’m not a realtor. I have a dog and a child and another one on the way. I’m stuck in my current rental, even though I don’t like the hood, because I need to be on the west side with subway access and walking distance to groceries etc. 95% of the rental listings explicitly say “no pets”. Some will allow cats or even small dogs, but not a 70 pounder like mine. Condo boards don’t like big dogs either. And who wants to live in a tiny box in the sky with two kids and a dog?”
——–
You can learn more about what’s going on in Canada here than from all other sources combined. 

Notice above how there’s no mention ever of a man? As well as the “march of I’s” in the post.  She’s the man, and the woman.  Strident and entitled.  She’s got another one on the way….proof that immaculate conception is alive and well.

I assume this pregnant woman is single ( read the post), but if there is a man, it’s most definitely a “lesbian” relationship.  Which isn’t too healthy when one of the participants is biologically male.

The problem isn’t real estate, as the real estate bubble
has now exposed.   Wild stuff…but it was going on all along.   The women aren’t having a good time without nature. That post said it all.

The dog is big and 70 pounds for a reason. I’m positive it’s a male.

#239 jess on 06.24.12 at 4:42 pm

accounting irregularities

SAO PAULO (Reuters) – Brazilian authorities want investment banking giant Morgan Stanley to return about 113 million reais ($54 million) associated with a stock sale by shareholders of troubled lender Banco Cruzeiro do Sul, which was seized by the central bank this month, Folha de S.Paulo newspaper reported Sunday.

http://brazilianbubble.com/greed-and-fraud-panamericano-style-here-is-how-brazils-cruzeiro-do-sul-bankers-spent-their-greens-before-bankrupting-their-small-bank/

#240 VICTORIA TEA PARTY on 06.24.12 at 5:05 pm

HANG ON TO YOUR WALLETS…

…the BROTHERS have just rolled into Dodge!

The Muslim Brotherhood, that would be.

We thought Europe, US, China, etc., were hot issues.

Now check out the MSM news sites today because another risk element has been let loose upon us all.

I call it the Islamic Tsunami.

Millions of voters in Egypt, the largest Muslim country in the Middle East, have just pointed the route out to a whole new way of business THAT part of the world may SOON be doing with, or should that be TO (?), the Rest Of Us!

Sure the Egyptian military has stripped the constitutional powers of the new president’s duties and obligations, AND rendered recent parliamentary elections null and void, which the MBers ALSO won.

But that is most likely a temporary thing. Egypt’s large and frightening military is kept afloat by loot from the US and Israel.

But amongst the lower ranks of same, Islamic stirrings must be making themselves felt as many soldiers must now either stay with a failing Empire, and its Mideast safe-haven, or go with the flow and offer to spread Sharia laws far and wide. Very far, very wide, at the point of a gun if needed.

Only time will tell if the Egyptian military will be able to hang on to power.

Probably not long.

The Muslim Brotherhood’s world-shaking victory should be neither denied nor dismissed as an overnight knee-jerk by deprived people screaming for change.

Some of the too easy to figure out consequences:

–Womens’ rights…trashed (Sharia Law). In fact there was a report out of Egypt today that a husband beat his pregnant wife to death because she did not vote for the Brothers!

–World oil prices…through the roof smartly.

–Regional Sunni/Shia power shifting….a certainty.

–Saudi Arabia…hang of to your hats.

That’s the simple stuff.

What is most important, however, is the issue of expectations amongst Egyptians whose national economy is in absolute tatters.

First, they need someone to take that army boot off their collective throats.

Then they have to take matters into their own hands and the Brothers have been selected to do the job.

Will they? Or will this revolutionary shift just tumble back into Western-promoted tribal violence with untold regional consequences.

That’s what the US and the West want. That would mean a temporary hike at the gas pumps, followed by relatively lower, manageable, prices once the folks have been properly put down.

It’s all about the fuel, isn’t it?

Or IS it? We wait to see!

#241 Junius on 06.24.12 at 5:07 pm

#235 Westernman,

You could hardly find a worse example of so called free market capitalism then the auto industry. Then again there are so few examples at the Fortune 500 level it is easy to pick them.

Remember the GM bail-out? How about the US-Canada auto pact and all the regulation

You worship a god that does not exist. The overall amount of our economy that exists in a truly free market, capitalist competitive market economy is remarkable small and primarily small business.

Any true competitive market capitalist (and I am one) doesn’t fall for the BS pumped out by the crony capitalist regime. What is your excuse?

#242 daystar on 06.24.12 at 5:08 pm

#210 eaglebay – Parksville on 06.24.12 at 9:36 am

Potash Corp pays taxes to Canada and Saskatchewan.
Same with Terasen. – eaglebay

It is thought that Sask Potash Corp is headquartered in Saskatoon but technically its headquarters is in Illinois even now and POT:TSX pays its corporate taxes in the U.S. as far as I’m aware. There is some confusion as to who Sask Potash Corp pays taxes to, as they are dual listed on TSX/NYSE and file through SEC and Sedar but as far as I’m aware, they pay their corporate taxes in the U.S. since 89′.

http://www.potashcorp.com/investors/financial_reporting/securities_filings/

Technically, Saskatoon is a branch office. Senior management and board members are roughly a 50/50 split of americans and Canadians apart from what journalists suggest otherwise.

http://www.icis.com/v2/companies/9146120/potash-corporation-of-saskatchewan-potashcorp.html

Sask Potash Corp went through a series of M & A’s that diluted Canadian ownership substantially in the 90’s (Texas Gulf, Arcadian). Since then, the majority of shares of POT:TSX are owned outside of Canada and unless share offerings over the past 15 years has tilted ownership towards Canadian institutions (I haven’t followed POT closely but the majority of their share offerings have gone through the NYSE from what I know), thats the way it has stayed:

http://www.potashcorp.com/about/history/

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

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

Terasen is another story. BC gas was a BC crown that was privatized back in the late 80’s with ownership restrictions keeping foreign ownership to less than 20%. Its true privatization came in 2003 through the subsequent provincial deregulation that eliminated foreign owership restrictions allowing for Terasen to be bought out by a U.S. corp:

http://www.columbiajournal.ca/05-11/Terasen.html

Teresen was then sold to Morgan Kinder (KMI) in 2005 and its assets split up in 2007 with KMI keeping the oil pipelines and selling gas distribution to Fortis:

http://www.cbc.ca/news/business/story/2007/02/26/terasen.html

Many Canadians like myself own shares in both companies. We also pay taxes on the dividends and the capital gains. – eaglebay

Teresen is no longer listed since 05′ and has gone through major asset and shareholder changes so I guess in a round about way you could say you own Teresen through Fortis but I think you’re either full of it. If you owned Fortis, you would have said so.

So much for foreign owned. – eaglebay

At this point, I’m convinced POT is majority U.S. owned and pays its corporate taxation to the U.S. . Morgan Kindle walked away with oil pipelines connecting Alta oilsands to BC that have more value asset wise especially considering right of way expansion than Terasen gas distribution.

As for ICBC, my insurance costs are much higher in BC than in Alberta, for less insurance. – eaglebay

Again… (I keep repeating myself with certain folks, doesn’t surprise me) the west pays between 2 to 4 times less for auto insurance than the east. I would have thought that the west (western Canada) and east (eastern canada) were easily distinguishable for the average person.

You’re full of it. – eaglebay

I’m glad that you challenged me on this. (I regretted not proofing that comment in some respects more closely, truth be told, private corps create monopolies with “exclusion” in mind as an example of an error) It forced me to look at the ownership of Sask Potash Corp more closely. (its good to refresh)

However… its highly doubtful that POT is still majority Canadian owned through shares and from what I can tell, they pay their corporate taxes to the U.S. government. (share offerings over the last 10 years would be the only way to truly know, but I’m thinking POT:TSX is majority U.S. owned) Its certain that Morgan Kindle walked away with Teresen’s best assets and its pretty much a guarantee that you don’t own Teresen because it no longer trades on exchanges since KMI bought them out in 05′ so I can’t help but think you are full of it with what you claim to own and I have to question habitually whatever else you have to say because past claims like this one aren’t isolated. By the way, this thing you do, cherry pick and distort facts to smear and label, isn’t that getting old for you by now, is that still working for you?

#243 TurnerNation on 06.24.12 at 5:12 pm

#232Observor on 06.24.12 at 2:38 pm

So you own a multi-national corporation? 8-figure net worth?

#244 daystar on 06.24.12 at 5:33 pm

#220 Cy on 06.24.12 at 12:31 pm

Thanks.

#245 T.J. BONES on 06.24.12 at 5:34 pm

SIR GARTH: Wouldn’t the Amazon’s let you play with power tools?

#246 TurnerNation on 06.24.12 at 6:23 pm

Observor, son, you are a tax slave like the rest of us.

Now, get over here as we feast on processed food and cheap rotgut beer in preperation for this week’s labour.

#247 Snowboid on 06.24.12 at 7:10 pm

#236 Westernman on 06.24.12 at 3:53 pm…

Check out the definition of privatization – has nothing to do with something that is already in the corporate world.

Or are you referring to the multi-billions of dollars thrown the way of GM and Chrysler in past, meaning they were sort of a public service while taxpayers paid the bills?

#248 TurnerNation on 06.24.12 at 7:48 pm

#240VICTORIA TEA PARTY on 06.24.12 at 5:05 pm

What’s so hard to understand?
Muslims electing muslims?
Israel elects jews
USA elects hard right christians.

Anyway, I’m sure harper will welcome any worldwide extremists into the country. He hates Canada.

#249 Westernman on 06.24.12 at 7:59 pm

My God this blog has more than it’s fair share of Communists, doesn’t it?
Don’t you buffoons understand that Government doesn’t create anything? It taxes, strangles business through red tape, redistributes wealth and attempts to socially engineer… all of which stifle productivity and innovation.
How in the name of hell’s half-acre did this country get so many socialists… it’s truly downhill for this country unless this is reversed…

#250 Herb on 06.24.12 at 8:24 pm

#236 Westernmoron,

I hope you know what you are talking about, because I sure don’t. But do read Junius @241 to get cleared up on some of your BS.

#251 Herb on 06.24.12 at 9:58 pm

#249 Westernmoron,

you should ask for a raise: you got six (count them, six!) neandercon shibboleths into one sentence, the second one.

#252 Roland on 06.25.12 at 5:40 am

Victoria, have little fear of the Egyptian Muslim Bros. They are socially moderate and economically conservative. If serious political instability occurs now in Egypt, it won’t be started by the MB. More likely any trouble will be started by self-proclaimed “secularists” from among the old regime.

Egypt has been on the whole a good-news story, with very little violence for a country that had a revolution just a year ago, and which has only now had its first real elections.

The leadership of Egypt’s MB is trying to follow the Turkish example, in which a moderate Islamist party also took over power from a military regime, while maintaining fairly good relations with the West.

If the world just leaves the Egyptians alone to work out their own affairs, then in a few years we’ll all be talking about the emerging “Arab Tiger.”

#253 Daisy Mae on 06.25.12 at 9:55 am

“But the fact is, F and Mark Carney now want real estate to deflate. They desire lower prices, even knowing thousands of recent buyers will be thrust under water, economic growth will be impacted, employment whacked and downtown condo towers turned into monuments to speculator stupidity and losses. As houses lose value, families will shed equity – everywhere. The wealth effect will be gone, and consumer spending impacted. Lower retail sales, fewer Best Buys and more Wal-Marts.”

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

I don’t know what the Harper, Flaherty and Carney were thinking but it sure as hell wasn’t Canadians’ wellbeing.

We will remember this fiasco….

#254 Daisy Mae on 06.25.12 at 10:08 am

#1 Ark55: “Just out of curiosity, how would you fix the current state of affairs?”

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

It’s not up to Garth to ‘fix’ anything. If he was at the helm we wouldn’t BE in this mess.

#255 Tony on 06.25.12 at 4:42 pm

Ken seems to be right on the mark. Housing prices in all of Alberta have been falling since the summer of 2007 and will continue to fall as oil prices head back down to the 30 dollar U.S. level. Prices never rose 9 percent ask anyone who tried to sell their house for the past 5 years. All of them are looking at a 30 to 40 percent loss.