Don’t

Want to start a brawl on this pathetic blog? Just type the words, ‘Don’t bet against America.’ Go have a few Mooseheads. And wait. It never takes long.

Most Canadians believe what most people coming here are convinced of. The US is in decline, a fact ‘proven’ by millions on food stamps, more millions out of work, evisceration of the middle class, outsourcing of jobs, record public debt and the systematic enrichment of the overlord class. Like Oprah. And Al Gore. Jamie Dimon. Nancy Pelosi. And Springsteen.

There’s been no better symbol of the American descent than the death of the American dream. Yup, home ownership. So the fact there are 16 million vacant homes in the States and a quarter of all families are under water, owing more than they own, or that $6 trillion in equity was lost when real estate gave up about 35% of its value, is all the proof most of us need. US dumb. Canada different. The people to the south earned their misery. We, however, deserve our bounty.

But this is the beer talking. I wouldn’t get too smug.

Yesterday I outlined a bit of what a hard landing looks like – a scenario which seems increasingly likely given what Ottawa did last week, and the recent wobbling of key markets like Vancouver. All it will take in coming months is for interest rates to start normalizing, and anyone who bought a house in 2011 could regret it until 2020. Meanwhile, I have said for a year that smart people (who understand the process) would be wise to do this: Sell Canada and buy America.

Here’s Bruce, thinking of exactly that.

“Hi Garth I’ve found your blog to be insightful and surely an eye opener. Few weeks back you said you’ll be writing more on the prospects of US real estate. I’m seriously considering investing their particularly in Atlanta and Houston. However, what deters me, is the skeleton foreclosure inventory that is yet to hit the markets, and that it’s an election year. Can you please provide your thoughts in your next writing? I’m sure a lot of Canadians will benefit :) Please and thank you.”

As addicts will know, I have touched on this topic several times. Besides my abiding belief the US will bite all the doomers in the butt, I’ve cautioned inexperienced investors about diving into Phoenix or Miami or Seattle without knowing the pitfalls. Most Canadians won’t get financing. You have to worry about title. File two tax returns if you tenant. Pay cap gains tax when you sell. In addition you need hurricane insurance in Florida and a protective sniper in parts of Atlanta. Plus a management company to find renters without records. And the border? Any pissed-off USCBP officer can refuse you entry, for any reason. Like trying to enter America in a Kia.

Despite these and other problems, the pull of cheap real estate is infectious to many. Especially when gasbag Canadian prices are destined to deflate. So, would it not make sense to reduce your exposure to property here (likely to fall) and shift that net worth into American real estate (certain to rise)?

As a tenet of financial theory, you bet. And especially now, when evidence is building Yankee housing just bounced off the bottom.

Don’t believe me? Hmm. Explain this. Pending home sales in the States shot ahead almost 6% in May. There are bidding wars for properties under $200,000 (which is $30,000 above the current US average) in places like Phoenix, where one realtor recently fielded 40 offers on a single listing. Prices have jumped 12% in Seattle, 11% in Tampa and 8% in San Diego and Miami, according to the latest Case-Shiller home price index.

In fact, said Shiller, that price appreciation is escalating rapidly. Since April values in San Franscisco are ahead at an annual rate of 16%, and in Phoenix it’s 26%. This is happening just months after affordability levels for American real estate reached the highest levels in history – the combination of historic low mortgage rates and an unprecedented six-year collapse in prices. Meanwhile, the US population continues to grow (America accepts more immigrants every year than all other countries combined), and so does demand for shelter as people do human stuff like get married, have babies and crave granite.

The key factor is confidence. It’s coming back as jobs do. By one estimate (Vancouver economist Doug Smyth) a little more than 80% of the 8.4 million jobs lost in the GFC have now been restored or (more likely) replaced. In San Francisco, for example, 12,400 professional jobs (mostly tech-related) were added in the past year alone. As a result, housing starts which have languished in the 400,000-per-year range are forecast to balloon to 1.3 million.

So is the financial storm over? Hardly. The US has a massive debt to reconcile. It’ll take years and years of incremental growth to inch its way back to the day when being middle class means being hopeful.

Sure, there’s shadow inventory to hit the market still, which should keep prices from rebounding too spectacularly. Obama has to win again, but (like it or not) that’s already in the bag. And maybe it’s time we measured America not against Heaven, but against a country where shopping malls collapse and body parts are mailed to the prime minister.

Just sayin’. Don’t bet against America.

245 comments ↓

#1 furst on 06.27.12 at 9:11 pm

I am furst
So posting first
Yes I win
I ain’t dim

Not this again. — Garth

#2 Tim on 06.27.12 at 9:16 pm

Stockton California declares bankrupcty
http://www.huffingtonpost.com/2012/06/27/stockton-california-bankruptcy_n_1629390.html

How does a big US city declare bankruptcy? Would you bet on Stockton, USA?

You bet. — Garth

#3 East Van on 06.27.12 at 9:17 pm

Teranet House Price Index shows Vancouver shouse prices up 4.37% in May year over year, an 1.87% in May year to date.

http://www.housepriceindex.ca/Default.aspx

Nothing like old numbers. — Garth

#4 Sebee on 06.27.12 at 9:21 pm

I read somewhere that US advertises food stamps and wants people eligible to be on them, like seniors, etc. I used to think this was a measure of desperation in US, but it appears to be a form of social assistance for lower income brackets.

#5 CrowdedElevatorfartz on 06.27.12 at 9:22 pm

a country where shopping malls collapse and body parts are mailed to the prime minister.

Harper finally gets a brain?

#6 Pounding sand in Peachland on 06.27.12 at 9:22 pm

The Americans will do the logical thing after exploring all other options.

#7 second on 06.27.12 at 9:24 pm

Still need to be careful against Interest Rate Risk.

#8 please be respectful on 06.27.12 at 9:32 pm

Sir,
In your last paragraph, your comment on shopping malls might not be judged offensive, but the end of the last sentence is. Could you remove it?

Canada is as incapable of human fallibility as any other domain. –Garth

#9 ric in gta on 06.27.12 at 9:34 pm

Hi Garth

I agree with 99% of your view of the real estate market
but Obama for another 4 years! no way! My contacts
in the USA tell me not only will he lose but many of
the left Dem’s will be out on the streets. this election
will reset a new course for the USA. this nation will wake up, an be reborn in November, you can bet on it.
P.S. keep up the good work!

#10 Canadian on 06.27.12 at 9:40 pm

Yeah, but the US can’t bail out Europe. What does that mean for US banks?

#11 Debtfree on 06.27.12 at 9:40 pm

Garth you’re betting against a president Willard Mitt Romney . President Willard . Got a nice ring to it . I think there was a movie called that . The sleeping giant is awakening . About time .

#12 Dan from Richmond Hill on 06.27.12 at 9:45 pm

GM recalled hundreds of thousands of Cruze last days, due to a possible engine fire, not Kia. Could it be a coincidence, or another (small) reason to bet against USA ?

#13 bubble head on 06.27.12 at 9:46 pm

Interesting point about renewing in five years with normal interest rates, It probably means the housing market will take 7 + years before it starts to get better (assuming there is a crash this year).

Make no mistake interest rates won’t start normalize for another 3-5 years. Its been three years in the US since the credit crisis and its still at a record low.

#14 American Werewolf in BC on 06.27.12 at 9:46 pm

#6 Pounding sand in Peachland

I doubt it.

#15 Aaron - Melbourne on 06.27.12 at 9:46 pm

Sorry just had to stop my fit of snorting laughter when reading FARK and an ad popped up:

“Real Estate Agents Improve your reputation!”

linky:
http://www.consumer.vic.gov.au/businesses/licensed-businesses/estate-agents

Yeah they are douchebags the world over. Consumer Affairs knows it.

#16 Editor on 06.27.12 at 9:47 pm

Here’s the quote: “We can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.” ― Winston S. Churchill

Americans are an optimistic people, so if the past 10 years of trauma haven’t beaten it out of them, they’ll be back.

#17 Aaron - Melbourne on 06.27.12 at 9:50 pm

hahaha it just got funnier when i noticed the other occupational categories on the left menu at that link

Debt collectors
Introduction Agents
Motor Car Traders
Sex work service providers
Travel Agents

Boy, those Real Estate Agents keep great company! Maybe they should have a collective annual conference or bawdy picnic of loose morals at an island getaway. They’d know how to party ;)

http://www.consumer.vic.gov.au/businesses/licensed-businesses/estate-agents

#18 Frustrated Kiwi on 06.27.12 at 10:02 pm

#9 ric in GTA. I’m not sure your friends are the most accurate data source. I tend to go with the Iowa markets which have proved accurate in the past:
http://iemweb.biz.uiowa.edu/graphs/graph_PRES12_WTA.cfm
They have Obama about 55 to Romney 45, so not quite “in the bag,” but our host does like to use a definite tone. :-)

#19 Cash is King on 06.27.12 at 10:06 pm

# 2 Tim

How does a big US city declare bankruptcy? Would you bet on Stockton, USA?

You bet. — Garth

Why would you not bet on Stockton? Chapter 9 will remove all the legacy costs. Goodbye retires health care, adios union contracts, See ya’ full value unpaid bonds.

When the dust settles jobs return bringing the people to inexpensive housing.

#20 Ray on 06.27.12 at 10:12 pm

Lived in California for 28 years before moving back here..I agree with Garth..the Americans have that certain “je ne sais quoi” that makes them resilient, creative and resourceful.

I believe it was Churchill who said of them “Americans can always be relied upon to do the right thing…after trying everything else”

#21 timbo on 06.27.12 at 10:15 pm

If oil stays near 80 for 6 months I totally agree with you Garth. If oil goes back over 100 you might be calling for a recovery way to soon. I think Saudi production is geared for an 80 floor to give economies that breathing room……

http://www.reuters.com/article/2012/06/28/china-pensions-tax-idUSL3E8HS0LO20120628

“It added that the new measure will most likely be a tax delay, but did not say what proportion of tax bills will be postponed or the length of the proposed deferment.

China’s insurance regulator has already drawn up the specifics of a tax delay for commercial annuity insurance policies, the Securities Journal said, citing unidentified sources.

The government has announced a series of measures intended to attract more investment into the country’s capital markets, including proposing a 50 percent increase size of the total stake that approved foreign investors can hold in listed companies.”

China opens the door and kicks the can……….

http://www.irishtimes.com/newspaper/breaking/2012/0626/breaking17.html

“The shortfall, which excludes government support for banks, was £17.9 billion compared with £15.2 billion a year earlier, the Office for National Statistics said in London today.

Economists forecast a deficit of £14.8 billion, according to the median estimate in a Bloomberg News survey.

Spending jumped 7.9 per cent and revenue rose 1.6 per cent. Income-tax receipts fell 7.3 per cent.”

Man Europe better get their s&^t together and fast….

I did not ‘call for a recovery.’ US real estate can rebound even if the country slides into recession. In fact, it will. — Garth

#22 phinny on 06.27.12 at 10:17 pm

I worked with a British fellow, for awhile, would travelled and worked extensively in both the US and Canada. When I asked what he perceived to be the main difference between Americans and Canadians, his answer was very interesting to me.

He said that most Americans he worked with were eager to learn the trade, worked extremely hard and talked about someday starting their own business.

Every Canadian he’d worked with talked about someday working for the Government.

#23 Tron on 06.27.12 at 10:18 pm

please be respectful on 06.27.12 at 9:32 pm
Sir,
In your last paragraph, your comment on shopping malls might not be judged offensive, but the end of the last sentence is. Could you remove it?

Canada is as incapable of human fallibility as any other domain. –Garth

They removed the last two bodies from the Elliot Lake mall today – could of used a better example of fallibility.

Looks like failure of the system to me. People should not fear death when they go shopping. — Garth

#24 Smoking Man on 06.27.12 at 10:18 pm

Garth Obama?

The guy who spent more loot than all his predecessors put together, not including Bush.

You sound like a guy who is a secret share holder in the private federal reserve.

But then how can you not like him after working with Hosni Harpo.

I see it

Did I say I liked him? I said he would win. — Garth

#25 Mr. Anderson on 06.27.12 at 10:20 pm

So basically we’re just in a giant cluster f##k.

#26 Not 1st on 06.27.12 at 10:21 pm

Garth, you are turning a blind eye to problems that cannot be reconciled in the U.S.A under any growth model;

– shadow inventory of homes
– more foreclosures to hit
– austerity plan coming December 31st which will wipe out hundreds of billions from the economy, or will add trillions to the national debt if they ignore the measures.
– Insolvent medicare and medicaid and SS programs which will be in demand very shortly as boomer tsunami hits the system

Simply put, there is no combination of growth, spending cuts and taxation that keeps the all the balls in the air. Something will give. Their Europe moment is but years away.

You said that years ago. — Garth

#27 bullion.bunny on 06.27.12 at 10:24 pm

Just sayin’. Don’t bet against America.

Wrong……Epic Fail

How’s that $5,000-gold thingy working out for you? — Garth

#28 Keeping the Faith on 06.27.12 at 10:24 pm

Thank you Garth for all the time you spend in writing for this blog. You are irreplaceable.
Thank you.

Now you are worrying me. — Garth

#29 Peter Goesinya on 06.27.12 at 10:25 pm

Got this email from a developer in Calgary today. Thought the greaterfool savages would like it.
Basically, in short, it says hurry up and buy before July 9th.

http://oi47.tinypic.com/2ryixch.jpg

#30 Smoking Man on 06.27.12 at 10:30 pm

#18 Ray on 06.27.12 at 10:12 pm

Ray you are dilluisonal. Most americans don’t even know the story behind the national anthum.

Your american track 6ers don’t even know they are waiting for a train.

Once an educated proud people, school, pop culture, msm has dumbed them down.

To become a tax farm slave , you need to be Drug tested, your privacy out the window with face book searches. No rights what so ever. Take bread from 711 10 years in prison, and they now get inmates to work or 25 cents an hour for private companies in prision. Even your crooks are wimps.

No longer the land of the brave and free.

It is now the land of the scared and inslaved.

You even have guns.

To bad you guys never grew up playing hockey an new what it was like to be a man.

#31 Tim on 06.27.12 at 10:30 pm

Re# 9. Obama copped out on the bankers and didn’t hold them accountable and let them walk away with obscene bonuses despite their massive incompetence, irresponsible and unethical behavior. He lost a lot of respect for this. It figures given that they spend more in lobbying than any other industry. But come on, they will never elect a Mormon for a president.

#32 A Fan in Van on 06.27.12 at 10:32 pm

#20 phinny — Thanks for sharing your useless anecdote.

#33 T.O. Bubble Boy on 06.27.12 at 10:33 pm

America has a fiscal union and a debt union across its 50 states — something that Europe does not (and Alberta wishes Canada did not, except in the 80’s when it was their lifeline).

Makes it easier to balance the various pieces of a diverse economy.

The U.S. may not be in recovery, but Europe could sure use a Bernanke of their own right now.

#34 Canadian Watchdog on 06.27.12 at 10:34 pm

Shiller said there was a few cities that boosted the composite index. He knows damn well the latest increase was a seasonal change, and that another major dip is coming. That’s why he said housing is and will be a “loser investment” for some time.

If you want to invest in properties, go to Brazil, Peru or Chile. Canada and U.S. housing will be a wasteland for the next decade or two.

Stick to charts. — Garth

#35 Observor on 06.27.12 at 10:37 pm

Buy High, Sell low?

By definition people are most enthusiastic about a market at its peak and most fearful at the bottom.

Only a few brave souls buy near the bottom, and they reap the rewards.

A smart and retired government worker/businessman that I know well spent 3 to 8 weeks in Florida every year for many many years. But he never bought a house there. Not until late 2010 when prices were near a bottom and well below replacement cost.

At that point the successful 79 year-old pounced and bought a beautiful newer four bedroom house with pool in a golf course community for $192k. A short sale. That same house had last sold for $350k. He paid cash. (I told you he was successful).

This is what winners do. They think independently. They buy low, not high. They take calculated risks.

This man is in great health at (now) 81. He can afford the health insurance to visit the U.S. (Again, I told you he was successful). And if it turns out he does not get to enjoy the property for too many years then myself and my brothers and sisters and our children can.

Thanks Dad, for not being a doomer.

#36 espressobob on 06.27.12 at 10:39 pm

Great post ther G.T. If i have learned anything about investing its simple. Buy what the herd hates and fears.

#37 robert james on 06.27.12 at 10:42 pm

Financial planning….

Dan was a single guy living at home with his father and working in the family business.

When he found out he was going to inherit a fortune when his sickly father died, he decided he needed to find a wife with whom to share his fortune.

One evening, at an investment meeting, he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.

“I may look like just an ordinary guy,” he said to her, “but in just a few years, my father will die and I will inherit $200 million.”

Impressed, the woman asked for his business card and three days later, she became his stepmother.
Women are so much better at financial planning than men.

#38 Not 1st on 06.27.12 at 10:44 pm

Even the most pumped up, positive, optimistic man on the planet is bearish on the U.S.

Let Tony Robbins explain the U.S. situation in simple terms and decide for yourself how this ends well for them;

http://youtu.be/jboTeS9Okak

You just proved contrarianism works. — Garth

#39 Dan from Richmond Hill on 06.27.12 at 10:47 pm

#34espressobob on 06.27.12 at 10:39 pm

So, would you buy RIM?

#40 T.O. Bubble Boy on 06.27.12 at 10:51 pm

Looks like Bowmanville Ontario may be the centre of the Canadian financial universe for 10 weeks:

http://finance.yahoo.com/news/bowmanville-ontario-selected-next-million-151400923.html

The series follows 100 families in one community as they attempt to raise their collective net worth by $1 million in only 10 weeks.

Maybe they’ll all just short RONA’s stock?

#41 neo on 06.27.12 at 10:54 pm

You forgot to mention one thing Garth that has been largely overlooked…

Young adults were crushed in the 2008 downturn disproportionally. They are not only staying away from household formation because they graduated college and were unemployed or underemployed longer than expected. They are also a product of another bubble. The one trillion dollar college debt one. In many cases, they already have a mortgage, a college debt one, so they can’t even think about taking on a household one.

Thank goodness for industrious, optimistic Latino immigrants. — Garth

#42 Onthesidelines on 06.27.12 at 10:56 pm

As I said before, opinions are like assholes: everybody has one.

Yours on America is rather shallow. It’s not all about simply realestate. America as we knew it is not sustainable and has displayed symptoms of its unsustainability years before the housing crash. What’s bringing Amerca down and, to a lesser extent, the rest of the west is an economic system that has little regard for the social consequences of it’s policies and actions. That economic system has now turned on itself and, like some invasive species destined to destroy the environment which sustains it, is now gorging itself on the society it lives within.

There are already some serious bets against America on the table in the form of currency swaps which bypass the US dollar altogether.

I sense that the America you are betting on is, for all intensive purposes, corporate America. You are not talking about a country but a system which no longer has any allegiance to any country. If this is what you are betting on, be careful what you wish for.

Actually I just wrote about housing. But I enjoyed seeing you get off. — Garth

#43 Phil on 06.27.12 at 10:56 pm

Tuesdays Rasmussen tracking poll has Obama at 45% and Romney at 46%. Just wait till Obamacare is overturned tomorrow. Romney wins hands down.

#44 Toronto_CA on 06.27.12 at 11:02 pm

I know it’s anecdotal, but our American office (our parent company) works like dogs. They have a work ethic that shocks me. Late hours, weekends, and they aren’t just surfing the net, they are getting sh*t done. Compared to my office in Toronto, where everyone is out the door at 4:30 to catch the Go Train home and half the time stopping to go watch the Euro Cup or gossip in the lunchroom. I’m sure my experience is not indicative of all of Canada, but when you read about our “productivity problem” maybe it isn’t My friends who work in public union jobs certainly seem to agree with me that no one is putting in a hard day’s work these days here in Canada.

#45 futureexpatriate on 06.27.12 at 11:09 pm

Have to agree. America’s in the best of hands (trust me on this) and it will be even more so after November when many obstructionists find themselves without a job.

The tide has turned. And if demographics are any indication (and they are), the ugliest of conservatism in America is dead for the foreseeable future.

Which, according to US history at least, is good for business AND everybody else.

#46 eviee1973 on 06.27.12 at 11:09 pm

YYC laughs, some developer named Zen did a bulk mailing to my mid town high rise building, a ten thousand dollar off coupon for one of their condo town homes in extreme south end Calgary. There is no limit on coupons you can redeem, so in theory you could get the place for free.

#47 citizen of convenience on 06.27.12 at 11:13 pm

I slightly disagree with you, Garth.
I am a citizen of convenience, i lived and worked in many countries and left them when I no longer like them and US is one of the countries in my past.
-US jobs are lost and no plan to recover them. To recover jobs, US should leave WTO and ban/tariff most imports, which won’t happen.
-US public and private debt is going exponential. Just printing money and QE[insert a random number here] This will hit the wall soon.
-US has many chronic problems, education, health, minorities, etc. Also serious political problems, corporate donations, AIPAC controlling foreign policy etc. These are not going anywhere soon.
-Increasing population? Most Asian countries and almost all Muslim countries have increasing population, does this justify investing in them?
US pop increase is only by immigration, that can only happen with a stronger economy and I am not seeing it in future.
-What’s left in US as competitive advantage? Military power. But nobody is playing this game with US anymore. USSR was good to play, squeeze some countries together, put puppet dictators and divert resources. Cause fear and people give all they have without asking. US tried to play alone in Iraq but gained almost nothing and lost a lot. People are not scared anymore. So this advantage is doomed to fade over time.
So yeah, US estate investments look far smarter than buying Canadian wood with sticking fake stones, but don’t expect too much from that.

#48 Pounding sand in Peachland on 06.27.12 at 11:20 pm

#15 Editor……….. Who’s Winston Churchill?

#49 Canadian Watchdog on 06.27.12 at 11:23 pm

“Stick to charts. — Garth”

If you purchased a U.S. property in 2006, you’d be down 70-80% in PPP. Go buy a property now and you’re guaranteed to lose another 50% over the next decade.

Change your gauges to measure wealth and you’ll get it.

I use money. Works quite well. — Garth

#50 Jonno on 06.27.12 at 11:24 pm

I received a flyer form a realtor in the mail today stating that all bc first time buyers are eligible to 10000 dollar bonus payment from the government upon buying a home, does anybody . Know anything abou t this?

On another note I have been following listings in my bu idling a unit 501 was list for 438k and this week after not selling a u it 1501 exact same layout is :438k. It looks like 501 will have to drop 1501 dropped 20k. There are still others in a sister building three years older much higher for many weeks for the exact same unit. Prices are definitely dropping but it is slow as it takes months for people to drop prices…

#51 Observor on 06.27.12 at 11:28 pm

AMERICANS WORK HARDER?

Number 37 Toronto CA suggested they do.

I agree. The customer service and response time from American companies is usually far superior to that in Canada. That has been my experience.

#52 espressobob on 06.27.12 at 11:30 pm

#37 Dan from richmond hill People love RIM! SELL SELL SELL! Ever heard of a PUT option?

#53 truth hammer on 06.27.12 at 11:32 pm

Stockton Calif is declaring bankruptcy becaue it can no longer afford to carry the legacy contracts of both active and retired civil servants….end of story. In todays Wall St Journal ( pg A16) a write up on this situation tiled ‘Down and Out in Stockton’ tells the whole truth about it.

The unions, of course, are acting like they’ve stolen a page from the CAW playbook and have decided that ‘the city is too big to fail’ and are denying that overhead costs have anything to do with the demise of the Stockton taxpayer.

One of the issues mentioned is firemens pay costing the city $157,000 per annum ( all in with a full medical pakage until death on top of a 90% indexed pension). Unions don’t seem to understand that the taxpayer is not an endless waterfall of cash.

We have the same problem in Canada…total denial by the socialist elites. More people working for the government with these antiquated benefits packages than there are workers in the private sector to support them. The largest employer in Canada is the government(s)………anyone awake on this point? Isn’t that exactly why Greece , UK , US States like WI and CA…..and Spain etc…have not been able to make ends meet.

******* Lets not forget that it’s an election year in the US. Oil prices are magically down and real estate prices are magically up?…..don’t be naive y’all…….

Thursday the SC of the US will decide on ‘ObamaCare’ and the mandatory stipulation that intends to force every citizen into a new government program. The unions are screaming for this…the trough will suddenly spill over with all the corruption. If the SC cuts the mandatory stipulation the entire program will fall…..not good for the Obamatrons. Don’t expect the GOP to give the socialists any ammunition between now and Nov……the fundamentals of the market as reported by the CBC equivelants like MSNBC are just smoke up the arse…………….so say the Americans.

What people down here are calling for is structural change…….top down cuts in spending….cutting the elites off at the ankles.

#54 Mr Buyer on 06.27.12 at 11:33 pm

The whole America is rebounding after 7 or 8 short years thing is a critical part of the mythology of a soft landing. There is a tunnel, its length is 7 years and there is a light at the end of it. I wish to state the tunnel is well over a few decades long and there is a dim steady light at the end of it only if low low interest rates are maintained. Bubble prices will never be attained again, not in Japan, the US, Canada, where ever. Bidding wars, give me a break. 500k people have been made aware of a bidding war in the US now. I see you.

#55 vatoDETH on 06.27.12 at 11:35 pm

It’s funny how everyone kept saying,”We’re not the USA!” and “Canadians don’t walk away from mortgages!”

In the USA, they never walked away from mortgages either. It was unthinkable, well, at least until they walked away from mortgages…

#56 JohnL on 06.27.12 at 11:35 pm

Going to bet on a country that borrows 6% of it’s GDP to run it’s Federal Government and get’s ~2% GDP growth out of that, in a 2% inflationary environment.
Inverse leveraging, neat concept, very Kenisian.
They better start their 8% growth in a 0% inflation environment plan to clean up the mess.

#57 JSS on 06.27.12 at 11:36 pm

Garth, do you recommend using HELOC to purchase income property in US?

No. — Garth

#58 Basil Fawlty on 06.27.12 at 11:40 pm

In the past it was recognized as time to get out of the market when the shoe shine boys were recommending stocks.
Well, I just walked past a vehicle with an advertisement for: “Wagging Trails, Dog Adventures”.

#59 Canadian Watchdog on 06.27.12 at 11:47 pm

“I use money. Works quite well. — Garth”

Money loses value with time. http://postimage.org/image/i79ldfogd/

#60 Motzu on 06.27.12 at 11:51 pm

If chocolat bars prices raise from 1$ to 1.25$, its a 25% jump. Its fantastic, is it ? Yes, it is. And its actually sustainable because 10 year old kids can cope with the 0.25 prise raise.

But next month, if it hike from 1.25$ to 1.50$ then 1.75$, kids will go back buy discount candy rapsberries at dollar store again in no time.

Right now, I would bet on dollar stores.

So, houses climbed 6% is US ? Good.

#61 ozy - not different on 06.27.12 at 11:52 pm

kanata and amerikia no different baby

same materialistic desperate selfish tricky eyeballs
same problems there and here, the scale is different, but globalization uniformed, leveled the field.
20 years from now, after the global govt is finally sworn in, it will be called amerikana, 1 country, 1 president, OPuppet Jr by name.
Everybody has what it deserves, dn’t kid yourselves.
Toronto vs Calgary vs Quebec vs Vancouver, Maritimes, as much difference as Toronto bs Chicago or New York….

kanata and amerikia no different baby

#62 randman on 06.28.12 at 12:00 am

Hmmmm…I don’t think so…and neither does Doug!!

“Yes, it’s shocking to me, though, how the US has gone downhill. In past decades, if anyone wanted to set up a business, the US would almost certainly have been the best place to do so. But it has become less and less so over the years. Now it’s just asking for trouble. But everything is relative. I’d advise anyone with capital to deploy it elsewhere, not in the US, because it has just become too dangerous, financially and morally. But if I had nothing, if I were a landless serf struggling to live in Nigeria or Burma or Venezuela, sure, I’d try to make it to the US. Bad as it’s getting, it’s vastly better than where they come from – and will likely be for years.

The fact that there are some 50 million people relying on food stamps these days – about one in six US citizens gets money for food – just goes to show how bad things are getting. And worse, government agencies are trying to get more people on to these programs, instead of helping them to stand on their own two feet. According to a Wall Street Journal article I was reading the other day, Republicans and Democrats alike have blocked reform of the food stamp program, even minimal and sensible reforms like means testing. The program is projected to spend more than $700 billion over the next ten years.”

http://www.caseyresearch.com/cdd/doug-casey-coming-eurocrash

#63 T.C. on 06.28.12 at 12:06 am

As goes the U.S.A., so goes Canada. Flogging U.S. real estate might be a good move. Or not – if what we are seeing is a dead cat bounce.

However, if Barry is re-elected then look for a handicapped recovery and a decade of stagnation. Just like the 1930s.

#64 furst on 06.28.12 at 12:12 am

Too big to fail – a poem by Furst

For those who are betting against the US
Who feel our southern brother can’t escape his mess
History will show, if you’re keeping score
US will become a ten, from it’s current four

Growth is slow, and housing did crash
But unwavering they are, always bold and brash
1929 saw fortunes, completely lost
Depression, food stamps was the societal cost
World War I and II, let’s not forget
Cold war, missile crisis, the US did beget
But they soldiered on through thick and thin
Industrialization, expansion and space travel for the win
A nation that has risen many times from the dust
Really? the US will die because of a housing bust?

So bet against the US, at your own peril
US goes down when the fat lady sings a Christmas carol
US will stand up, once again
Disaster averted, policies will amend

Buy the US, for it’s innovative soul
It will find a way out of this economic hole
But learn from their mistakes, we certainly can
Sub prime and 30 year amortizations, we had to ban
Housing can fall, equity all gone
For sale signs and tumbleweed, can litter the lawn

So bet on the US, short Canadian real estate
Buy with little down and face financial check mate
A wise man who experienced much, once said
Here’s the secret to getting ahead
Fools make the same mistake over and over
Masses learn slow, need luck from a four-leaf clover
The smart always thrive and rarely fall
Because they learn from the mistakes, made by all

#65 cool on 06.28.12 at 12:16 am

watching Gary Shilling on BNN rightnow.He thinks US may be already in recession.He is short SP500.

#66 arit on 06.28.12 at 12:18 am

waterfront rental homes in RICHMOND, BC?

Well, this one is new for me: They turned the “Riverport” flats development (sold about two years ago) into rentals.
Is this the new trend?

https://riverportflats.com/

Regards

arit

#67 HDJ on 06.28.12 at 12:33 am

I agree that the US is a formidable country, and that it will continue to recover, despite what happens in other regions of the world. As for Canada, I suspect this improvement in US fortunes will moderate our upcoming real estate downturn – prices will drop, but we won’t experience anything like what occurred south of the border. The US is our cushion and security blanket.

#68 poster makes sense on 06.28.12 at 12:36 am

in response to “#41 Onthesidelines on 06.27.12 at 10:56 pm
As I said before, opinions are like assholes: everybody has one. Yours on America is rather shallow. It’s not all about simply realestate. America as we knew it is not sustainable and has displayed symptoms of its unsustainability years before the housing crash. What’s bringing Amerca down and, to a lesser extent, the rest of the west is an economic system that has little regard for the social consequences of it’s policies and actions…..”

Garth, you’re pretty dismissive of this post. But it does make sense.

Instead of dissing people publicly and mocking their position you’d gain credibility by acknowledging their contribution and being articulate about how it differs from yours. There are many shades of grey….assuming that your vision is the only correct one is a folly imho.

See what I mean? Our arrogance is boundless. — Garth

#69 Jon B on 06.28.12 at 12:41 am

Buying US property is a great topic and I’m sure it’s of interest to many considering prices might be heading higher in the States. I’ve invested a considerable amount of time into the prospect of buying US RE and have made two conclusions:
1.) If you plan to spend the majority of the year in the US it’s worth it to own – And sell your overpriced Vancouver house.
2.) If you want to only spend the winter in a warm state for up to 5 months – don’t fail the substantial presence test. Property taxes, condo fees, maintenance and tax filing/legal fees will all represent an annual cost that is essentially toilet money. If the sum of all these annual expenses is greater than three months rent, it’s better to rent.
Hope this helps someone.

#70 Snowboid on 06.28.12 at 12:43 am

#53 truth hammer on 06.27.12 at 11:32 pm…

“…One of the issues mentioned is firemens pay costing…”

Even as you don’t do the proper research to learn that the median firefighters’ salary there was about $ 100K including ALL benefits – you insult the most important public servants there are – along with police, paramedics and health care workers.

Now if I was a firefighter I would certainly want health coverage, that costs about $ 25K annually for a Stockton firefighter – which is included in the $100K salary figure.

Several of our friends are fire-fighters (or retired) and I know the work they do is worth much more than $157K – but none of them here or down south make anything close to that figure!

One of them is well aware of the cuts – in Phoenix new recruits don’t get the same benefits, and they are trying to cut down staffing to save costs. First-responder services may be cut back. They have already had some of their DB pension plan gutted – plus many of them don’t live very long after retirement due to health problems.

This is the same person who puts on over seventy pounds of gear and runs into burning buildings in 45C heat to save lives.

Makes me feel pretty insignificant – it should you as well.

You consider firefighters ‘elites’? My God, you are an idiot!

#71 Nostradamus Le Mad Vlad on 06.28.12 at 12:45 am


“US dumb. Canada different. ” — Not quite. Both greedy, me-first attitudes, yes. Everything falls into place after that. Remember the Me Generation?

“The US has a massive debt to reconcile.” — Plus deficits, and if WW3 accidentally happens along the way, that will mess things up pretty good.
*
jess — Independent Jersey? All the Channel Islands would have to be independent from the UK to keep their tax-haven status, plus this. The Channel Islands may have to switch to Monaco’s currency for the elite.

#209 JOBS CUTS….more JOB CUTS on 06.27.12 at 8:51 pm — Hitting Hard Same as NAmerica, but Curbing Loans Major US banks; Necessity is the mother of invention People using other means of transportation, while but Osborne continues to gouge drivers; 5:37 clip Corporations and NAmerican banks wiping out middle class, and Nervous Investors filling Swiss safes with cash and gold; No Market Manipulation? Think again; 4K% Interest Addendum to the other day’s link; Merkel says nein to Italy and Spain; More more more pay cuts and freezes. Austerity’s a bitch; Owelympix He may be right. Hotel rooms are a third or more empty; Spend Her Victorious; EZone History not kind; Thin Air Money grows on rhubarb plants; 4:54 clip From GD1 to blnaire.; Germany and Stockton Unions.

Garth seems to have made a good call, but Living Wills for US banks? QE3 in Sept,; Italy Skyrocketing borrowing costs; Xpurts Germany, not Greece, Spain or Italy should leave EZone, but Threatening Layoffs; Italy is the centrepiece; Michelle Meyer’s outlook; Vineyard Retirement in Argentina, relatively cheap; Best Buy Hmmm; Mtge. applications fall; C & C China and Chile signing deals to boost trade; TPP and NAFTA Using one to expand the other; Deflation with a chart; EU Elites, the Fourth Reich, etc.
*
17:27 clip Strange new world of nano things, and GM Babies Yep, genetically modified babies are here; Drop-in guest; Lord Nelson and Conan Doyle They paid taxes, too; Xymphora Incl. Syria and Turkey; Curious Small town cops loading up on military gear. Expecting martial law? Outlawing Vitamin D? Half-hour or more in the sun is plenty, but the govt. may outlaw the sun; 20 Pix Tokyo’s commuter hell; Harper How low can he go? Just watch him.

#72 45north on 06.28.12 at 12:50 am

pounding sand in peachland: Who’s Winston Churchill?

“His steadfast refusal to consider defeat, surrender, or a compromise peace helped inspire British resistance, especially during the difficult early days of the War when Britain stood alone in its active opposition to Hitler. Churchill was particularly noted for his speeches and radio broadcasts, which helped inspire the British people. He led Britain as Prime Minister until victory over Nazi Germany had been secured.”

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

#73 FTP - First Time Poster on 06.28.12 at 12:51 am

Here is what David Rosenberg says about US housing:

http://www.businessinsider.com/david-rosenberg-housing-shadow-inventory-2012-6

If you’re going to quote an economist Garth, at least quote one who is well known & highly respected.

Rosie has good days and crazy ones. I know him well. — Garth

#74 lookoutbelow on 06.28.12 at 12:57 am

Garth, Garth, Garth…..This is THE time to bet against America. Why, let me count the ways:

Effects of the GFC still fresh in the minds of all those Americans still deleveraging. According to Bill Gross of PIMCO, this takes years and years.

Quantitative Easing becoming less and less effective. The stock market still needs to bailed out every August.
It’s hooked and can’t stand on its own two feet.

Europe and China weakening simultaneously can’t be good for the US

Did you hear about the “Fiscal Cliff”, higher taxes at a time such as this pretty much gurantees a depression (sorry recession). See forecast by ECRI.

Public Debt at over 100% of GDP, add in the Social Security, Medicare and Medicaid and the entitlement mentality blows the total public debt to a conservative $60 TRILLION, 400% of GDP.

US Treasury Secretary, Tim Geithner, goes to Europe to “advise” them on their debt problems and gets his butt kicked back to the US after being reminded of US debt levels.

Add to this the Pension liabilities that still assume a 7-8% return on their investments. Hah!

Shall I carry on?

So Garth, US Dumb, but Canada DUMBER, seeing we didn’t learn anything from their close encounter with the GFC.

#75 Smoking mans smarter coousin on 06.28.12 at 12:58 am

Invest in US…you gotta be kidding…unless you are implying cashing out in Canada and buying an equivalent REAL asset in the US……before the $ is worthless.

Review the abuse of Eminent Domain laws in the U.S.

#76 ANONYMOUS on 06.28.12 at 1:04 am

Sell in Canada and buy in America; what a concept !

I’m sure that a person with a FULL-TIME JOB in Toronto will really benefit from the nice short commute from his new ‘Cheap’ Phoenix house to his job in Toronto after he sells his old but over-priced Toronto house ?

#77 Humpty Dumpty on 06.28.12 at 1:04 am

Rober Shiller… Right … Hmmm

Robert Shiller has completely lost his mind

http://ochousingnews.com/news/robert-shiller-has-completely-lost-his-mind?source=Patrick.net

#78 Onemorething on 06.28.12 at 1:12 am

dead cat bounce for America! Fulled by dummies and foreign investors!

#79 Questioning Leverage on 06.28.12 at 1:17 am

I wouldn’t let a Kia in either.

#80 Jon on 06.28.12 at 1:21 am

Even a dead cat will bounce. US prices will continue to go down up to another 20% in some markets. So you are recommending people get their asses handed to them in two countries? You know very well people are not going to sell their places here. Why would you buy a house in the states when you can just buy some US REITs instead, like you are recommending in Canada? RE in the US will not see an increase of any significance for another decade.

It’s important to separate what is happening in financial markets and RE versus what is happening on the street. Things are still very grim for a lot of honest hard working Americans. RE in Spain is a great deal too with 50% of young people unemployed.

But really the point is people need to stop thinking of homes as an investment and instead as a place to live.

Garth, you’ve jumped the shark.

#81 Jon on 06.28.12 at 1:24 am

Also, stop posting bs numbers.

http://seattletimes.nwsource.com/html/businesstechnology/2018532130_homeprices27.html

“This region’s 2 percent rise follows a 1.7 percent jump in March after seven straight months of declines, providing further signs the real-estate market may be recovering.”

#82 Blue Monster Lover of Meats and Vegetables on 06.28.12 at 1:33 am

Home ownership is not the American dream, good grief. Freedom to make the most of your life however way you choose is, which usually means in business and the acquisition of wealth, that is the American dream. Rags to riches via freedom.

Don’t bet against America? Well when America returns we can bet on them, until then what we have south of the boarder is looking a lot like the mirror of Canada. Big government, heavy taxes, loss of freedom.

I agree with Observer and CA, dealing with American companies for both purchasing and sales are the best for all the reasons stated. The people are conscientious and hardworking, pricing is better and the service is exceptional, usually, especially compared to Canadians. I now always avoid dealing with Canadian suppliers whenever possible.

#83 Of_Montreal on 06.28.12 at 1:34 am

Supercilious comments made by S and F about the Canadian economy, banks, housing,etc… will leave our nation out in the cold when it comes to getting a piece of the USA recovery action.

#84 cynically on 06.28.12 at 1:35 am

As America goes, so goes Canada, but the US will always come out on top because they as a nation are what Canada is not – innovative, creative, inventive. We take from the Brits, our constitutional and political systems and from the Yanks, just about everything else. The last great, successful Canadian idea was insulin, many years ago and to #28 – play less hockey and learn how to spell a four-letter word.

#85 Fort Mac Flatlander on 06.28.12 at 1:37 am

#28 Smoking Man

I’ve seen you refer to 5’ers and 6’ers before. Excuse my ignorance, but to whom are you referring to?

Thanks

#86 Blue Monster Lover of Meats and Vegetables on 06.28.12 at 1:47 am

So housing is reflating and that’s a good thing? I said this years ago, the plan from the Fed to save the banks is to inflate the US currency until the banks are make whole. By this I mean when a gallon of gas costs $8 then $500k for an average house will make their balance sheets solvent once again. Sounds great if you’re a debtor, but if you’re a saver or on a fixed income, you’ve been wiped out.

Can you say transfer of wealth from savers to debtors? Yes you can!

Like Canadian Watchdog says, it’s how you measure wealth, nominal numbers are meaningless in this inflationary and deceptive environment. Real money is fixed and gauged by weights and measures as per the US constitution, meaning gold and silver, as in ounces.

#87 The Real Jimbo on 06.28.12 at 1:49 am

Invest in the US?? Isn’t anyone concerned about the US estate tax? The rules are scheduled to change in 2013.

As a Canadian, if you have a global net worth of $1M or more then your US assets are subject to a 55% estate tax upon your death. And, shockingly, this includes US assets held within your RRSP.

So own a $400K house in Canada and $600K in US stocks in your RRSP and/or US investment real estate? The the IRS will take over $300K in estate taxes upon your death. It doesn’t matter whether your holdings have a capital gain or loss, you get slaughtered.

And to add insult to injury, after the IRA robs your RRSP, you will still need to pay CRA taxes upon the collapse of your RRSP.

So investing in the US? Think twice if you want to leave your kids something.

#88 The American on 06.28.12 at 2:02 am

At #2: Tim, I’d definitely put money in the bank for Stockton, CA. I’d bet on Stockton in a heartbeat. Bankruptcy is a cleansing process to expel excess and restructure. Do you understand what filing for bankruptcy protection means in the U.S.?

#4: Sebee, you are correct that food stamps (which aren’t even food stamps, mind you. It is almost always a pre-loaded rechargable electronic card, much like a debit card), is more often than not a means for social assistance to the elderly, mentally ill, mentally challenged, students in school, immigrants trying to get established, and so on. The “astronomical” number people see will always be a high number. Yes, it is higher in recent times with the recession, but it will almost never be below 27,000,000 in the U.S. Also, for the record, there are 42,000,000 people, not 50,000,000 on the EBT or SNAP program.

At #8: Please be Respectful, are you saying Garth did not state a fact? I’d prefer to see the facts instead of acting as if it doesn’t happen. That’s a big difference in the two countries. The U.S. is by almost all means a more transparent place, good or bad.

At #9: Ric in GTA, you need to get some new contacts then. Obama is a shoe-in for the next election. The rest is just political posturing. Everyone knows this.

At #10: Canadian, The U.S. has already bailed out Europe. And the U.S. will be sending additional funds to bail it out again. Mark these words.

At #12: Dan from Richmond Hill, the Cruze accounts for less than 0.7% of Chevrolet sales. This is nothing more than a rounding error.

At #15: Editor, you summaraized nearly a decade of up and down in the U.S. in a very concise manner. You nailed it on the head, and signs of improvement and hope are clearly coming to fruition.

At #22: Smoking Man, the Obama administration has spent more money than previous administrations combines, barring the George W. administration. What you fail to mention is a massive share of that spend is going to service the DEBT that George W.’s administration assumed in 8 years. That’s not Obama’s fault. Nice try, though. I’m not an Obama fan myself, but I try to stay clear on the issues. Sure you’re not from Alabama?

At #44: Toronto_CA – DAMN.

#89 Grooby. on 06.28.12 at 2:03 am

#45 futureexpatriate,

hear hear. The lesser of two evils is actually an angel by comparison.
Obama will win handily, despite the best efforts of the supreme court. And the economy will rejoice.
Demographics are against the Republicans, even if most greedy millionaires are not.

#90 Jeff on 06.28.12 at 2:10 am

Bought a place in Phoenix in a great area in Nov 2010 for $130k as an auction foreclosure and it was in mint condition.. got it a bit below the other sales that were around $160k at the time.. now there are absolutely no foreclosures or short-sales in my condo community and places like mine are selling at $200k plus. And I mean selling, not just listing. The only listings like mine are now at $230k. It seems to have turned on a dime since January 2012. You could have still got a place at $160k up to Nov 2011. My condo is 4 years old (still mint condition), 1100 sqft, 10 ft ceilings, 2 underground parking spots, granite counters, huge patio, resort style pool & gym, on a golf course, 2 minutes from Costco..restaurants, Paradise Valley Mall. When I’m there I tell friends that something like this would cost $700,000 in Vancouver or Toronto and they laugh at me.
Keep in mind my condo was only $300k at the peak when it presold in 2006. I never would have thought that prices would be rising like this. Forecasts for Phoenix were that prices would return to peak in 2032. Now it’s the hottest market in America. Go figure.

#91 Scott in Gibsons on 06.28.12 at 2:20 am

Do you disagree with any of these facts or posits?

-US consumer goes on debt binge, economy booms, consumer reaches limits of debt, economy busts.

-US Government goes on colossal debt binge, economy kinda muddles through, US Government never reaches limit of debt because of unholy alliance between the Federal Reserve and US Treasury, US dollar becomes worth less, US trade deficit plus weak dollar means US consumer can’t buy.

If you think the US economy is recovering, explain this

http://globaleconomicanalysis.blogspot.ca/2012/06/3-month-petroleum-usage-chart-for-march.html

#92 bluethunder on 06.28.12 at 2:23 am

#50 Jonno
smoke another.

#93 Jane24 on 06.28.12 at 2:46 am

Don’t forget if you plan on living part of the year in your purchased US home that the health insurance bills are steep. My daughter has just arrived back in England after working in NYC for 18 months and she met folk paying from $400 to $1500 a month for health insurance. She met professionals working as filing clerks just for the insurance benefits included in a tiny wage pack.

#94 Tony on 06.28.12 at 2:54 am

Problem is the U.S. housing market will make an L shaped recovery the same as Japan and Iceland. While Wall Street has dreams of grandeur with housing stocks they don’t assume the obvious which is finally housing will hit bottom followed by about 20 years of sideway prices.

#95 Tony on 06.28.12 at 3:01 am

Re: #53 truth hammer on 06.27.12 at 11:32 pm

Everyone already knows housing in America will make a miraculous recovery just before the U.S. election then fall off a cliff after the election is over. It’s common knowledge already.

#96 bluethunder on 06.28.12 at 3:02 am

More good news for BC Businesses!!!

“B.C. employers will face annual WorkSafeBC premium increases of at least five per cent for the next several years after the Crown corporation’s income plunged by $900 million last year.”

http://www.vancouversun.com/business/workplace/WorkSafeBC+cites+global+downturn+total+income+drop/6851753/story.html

Just wait till March 2013 when the PST kicks back in and prices jump across the board.

Thankfully we’ll have the NDP / Dix in power to navigate
us completely down the drain into the sewer.

Hopefully by that time, my new “Porn Production Studio” / “Grow Op” will be granted a dual purpose business license from the City of YVR! (cause there’ll be nobody else left to get business taxes from!)

#97 Mooks on 06.28.12 at 3:08 am

Heya Garth,
Just wondering, rather than investing directly in real estate down south… ie. buying a property… would you recommend another means of gaining exposure to the future price appreciation of US real estate?

#98 kevsta on 06.28.12 at 3:55 am

“And especially now, when evidence is building Yankee housing just bounced off the bottom.”

Dead. Cat. Bounce.

#99 new-era on 06.28.12 at 4:57 am

Even TD says Prices will fall 10 to 15%
Jay Bryan: Forecasters say home prices may fall soon

Read more: http://www.montrealgazette.com/business/Bryan+Forecasters+home+prices+fall+soon/6851705/story.html#ixzz1z4oOgGOA

http://www.montrealgazette.com/business/Bryan+Forecasters+home+prices+fall+soon/6851705/story.html

#100 Superman on 06.28.12 at 5:15 am

After all the negative things you mention about buying in the US (tax returns, border guards, rental companies, snipers and hurricane insurance), you still recommend it? What a hassle. There are easier ways to make money than buying houses in the US. I’d only encourage a retired couple who planned to spend 6 months a year down there, and didn’t need to worry about renting it out the other 6 months of the year, to do what you are suggesting.

#101 Johnny D on 06.28.12 at 5:41 am

@ #27 Peter Goesinya

Funny to see developers trying to hook the last of the gullible. Also, judging by your screen shot, you’re looking at Volvo S40’s. How’s that going for ya? I hear Kia’s are good cars.

#102 John on 06.28.12 at 6:01 am

Onthesidelines wrote:

“I sense that the America you are betting on is, for all intensive purposes, corporate America. You are not talking about a country but a system which no longer has any allegiance to any country. If this is what you are betting on, be careful what you wish for.

Actually I just wrote about housing. But I enjoyed seeing you get off. — Garth”
———

You just wrote about housing….

Then how could your comments represent a good judgment of what’s going on? Things are moving forward anyway.

CNN international puts up daily stories about “Syria” over and over and over. Today they had a picture of a broken wooden fence with the headline of a “TV station being bombed”.

In other words? The money junkies are not nice people. You are absolutely right. Do not bet against “America”. You’d have to be nuts to do that. What happens when you bet against any group or individual who has nothing to lose? Exactly. It gets ugly.

Maybe do a housing-Syria piece? Nahhh…let’s just stick to housing. They’re not connected.

#103 Ray on 06.28.12 at 6:11 am

#28 SM

I grew up in Canada and have been back here for 6 years…I know all about hockey…is your measure of a “man” the ability to hit somebody with a stick?

Keep your eyes on the news, SM. Every day in every day we are inching closer to the American model in all the respects you mention as negatives.

When it comes to news out of Ottawa, every day for me here is Deja Vu..its like someone found an old copy of GW Bush (or Dick Cheney’s more like) old NeoCon playbook.

#104 Piccaso on 06.28.12 at 6:42 am

Canadian average home prices forecast to contract over next two years 10-15%
By Mario Toneguzzi, Calgary Herald June 27, 2012

http://www.edmontonjournal.com/business/real-estate/Canadian+average+home+prices+forecast+decline/6847983/story.html

#105 Smoking Man on 06.28.12 at 6:43 am

#101. Ray.
Aggreed

#106 Erika on 06.28.12 at 6:57 am

Which city in the US would you recommend in terms of biggest potential for recovery?

#107 Piccaso on 06.28.12 at 7:05 am

Canadian law does not allow major banks to merge so they must look for expansion elsewhere. In an effort to circumvent these limitations, BMO combined Marshall & Ilsley with another Midwest bank and put it all under the umbrella of BMO Harris Bank.

BMO has sought to grow internationally, and has plans to expand under the BMO Harris name across major cities in the Midwest.

The strategy worked out well for Toronto-Dominion Bank (TD), Canada’s second largest bank, which currently has more branches in the US than in Canada, and set record profits last quarter.

http://wire.kapitall.com/investment-idea/bank-of-montreal-bmo-sees-big-savings-in-us-midwest-market/

#108 Bottoms_Up on 06.28.12 at 7:34 am

Garth, no capital gains tax on the sale of my extended family’s place in Phoenix.

Word was it was bought by US residents for the purpose of having it for their primary residence, so the government I guess is happy just having a stable tax base.

#109 House Horny Housewife on 06.28.12 at 7:37 am

Garth,

I also believe that the US will bounce back in time, stronger and better than before too. I would never bet against the US, never. Their correction is also being “internalized” mentally by the mass public, as people are beginning to espouse new (old) values such as financial security and saving for the future. Unlike the Greeks (who are still in denial), most Americans are now willing to sacrifice and embrace their “austerity package” because they know that it will mean real economic wealth in the long term. Ironically, they have a parallel thing going on with health, as they also implement changes in their society which valorize values such as eating well and exercise. It will take time, as any real major change should, but they will be victorious and I don’t doubt it for one second. We would be wise to take them seriously and use them as an example to follow.

As for “investing” in real estate in the US, however … I would not DARE go there. What a royal hassle ! Red tape and problems as long as your arm and then some .. many of which you outlined yourself. I am also quite sure that beautiful properties with real value are still just as expensive as anywhere else (except perhaps Vancouver, of course). A couple of friends of mine recently were under the stupid impression that they can whisk themselves down to Florida and buy themselves a beautiful beach house in Miami for chunk change. Where they ever surprised to find that this was not the case. “Please, please, please, take my Nantucket style mansion on the peninsula with the spectacular view of the ocean .. I’ll let you have it for any price !” Are you kidding me ?!

I am sure there’s an easier way to earn a buck than buying up cheap bungalows with hidden problems that need fixing and that are situated in crappy neighbourhoods. Houses are money pits no matter where you buy them and, unless you really know what you are doing and happen to be a contractor that can fix things yourself, not to mention a legal expert at crossborder redtape and B.S., then leave well enough alone.

Just because it’s cheap it doesn’t mean you should buy it.

HHHW

#110 Vulture Buyers on 06.28.12 at 7:37 am

#89 Jeff

Does it matter who is buying?

#111 Bottoms_Up on 06.28.12 at 7:40 am

People that think you should bet against America obviously haven’t visited a major US city recently….

#112 House Maniac Phenom on 06.28.12 at 7:53 am

You have to remember that the USA has these things that Canada doesn’t have called companies. Kanada used to have a few, sure, but where are they now? Nortel, Corel, RIM? Where are they now?

In terms of economy, tech is gigantically enormous as a wealth producer for the nation. Canada doesn’t have any tech firms left. The Canadian economy is built upon acting as a resource wh*re, and the other half is based on building houses. Sorry folks, that won’t turn out well, RIM is about to die today after earnings, and the rest is history.

#113 The American on 06.28.12 at 7:59 am

At #80: Jon, Garth’s numbers weren’t B.S. Garth carved out Seattle specifically, which did indeed see a 12% gain. Your article refers to the Seattle “region,” which includes Seattle, Bellevue, Tacoma, Kent, Tukwila, Everett, Lynwood, Shoreline, issiquah, Snohomish, Samamish, North Bend, Puyallup, Renton, and so on. It is referring to Seattle and all outlying cities/municipalities.

#114 Steven Rowlandson on 06.28.12 at 8:00 am

The financial and political world as you know it Garth has got to go. It is time to start over from scratch and outlaw the politically correct errors of the past.

Whenever I want to escape reality I come here. — Garth

#115 bigrider on 06.28.12 at 8:16 am

Universal Canadian Immigrant thinking:

Houses, real estate … go-o-o-o-d.

Stock market… ba-a-a-a-d

Nuff said.

Not the choice, except of uneducated folk. — Garth

#116 The American on 06.28.12 at 8:17 am

#89: Jeff, I know you are correct in what you have written about the Phoenix market having turned on a dime since January, 2012. I’m afraid, however, you’re beating a dead horse. A lot of Canadians aren’t “getting it” and that is perfectly fine. A lot of pessimism from Canadians toward the U.S., almost as if they are wanting to see the total fall of the U.S. Another difference I notice is Americans are certainly more optimistic than Canadians. One country has a propensity to dwell on all the reasons why it will never work out. The other finds ways to get the job done. I don’t give a damn who takes offense to this statement, but we all know its true at the end of the day.

News for those who are thinking like this, you’re going to be waiting until you’re in your graves. It simply is not going to collapse.

#105: Picasso, TD has more branches in the U.S. than Canada? That I did not know. If that’s true, TD must not have many branches at all in Canada. I cannot recall but only maybe three times I’ve ever seen a TD bank branch in the U.S.

#117 The American on 06.28.12 at 8:29 am

#104: Erika, what our intended purpose for the property? That’s what you should consider before narrowing down to any single market. I’d put my money on Bend, OR with median sales price of $202,000 (in the interest of full transparency, I own a place there), San Diego with medial sales price of $330,000, Seattle (live here too, but truly major and amazing things are happening here) with median sale price at $377,500, Tampa, FL where the median sales price is $107,000, Washington D.C., where the median sales price is $410,000, Scottsdale, AZ where the median sales price is $312,700, Chicago, IL where the median sales price is $180,000 (yup, not kidding), or San Francisco where the median sales price is $693,000.

#118 TurnerNation on 06.28.12 at 8:43 am

#22 Smoking Man on 06.27.12 at 10:18 pm

Interesting angle. What if G-man was booted for out-conning the con (Harper!). I don’t think so.

#119 FTP - First Time Poster on 06.28.12 at 8:59 am

Here’s what the guy who runs Alberta’s pension and investment fund says:

http://www.edmontonjournal.com/business/Lamphier+AIMCo+boss+warns+troubled+times+economy/6851827/story.html

Pretty interesting stuff!

#120 Boombust on 06.28.12 at 9:04 am

“#87 The American on 06.28.12 at 2:02 am

That’s a big difference in the two countries”

Oh? And what other differences could you cite?

Your “knowledge” of Canada is 0 to none. You didn’t even know what the GTA was! (and couldn’t care less by the way). That’s what you wrote, after all.

As far as I’m concerned, this is a Canadian site. We KNOW all about the housing unravelling in the US.

We don’t need to hear anymore about YOU and YOURS.

We don’t need you here to “define” us.

Buh-bye!

#121 TaxHaven on 06.28.12 at 9:10 am

Without real – not fake – economic growth there is no way real estate prices can rise except by means of MORE DEBT.

Incomes have flatlined. Unemployment remains elevated. Personal & government debt is at record highs.

US personal and household debt is now less than that in Canada. — Garth

#122 OttawaRenter on 06.28.12 at 9:10 am

#20 phinny on 06.27.12 at 10:17 pm
He said that most Americans he worked with were eager to learn the trade, worked extremely hard and talked about someday starting their own business.

Every Canadian he’d worked with talked about someday working for the Government
__________________________________

Haha, this is so true! I have lived and worked in both countries, too.

#123 SZ on 06.28.12 at 9:12 am

#20,

I think you are onto something. But that American mentality is slowly changing too. Was in DC & VA recently, the places are booming and friends were extremely content working for Uncle Sam.

#124 Observor on 06.28.12 at 9:26 am

MONEY LOSES VALUE?

Canadian Watchdog at 59 said:

“I use money. Works quite well. — Garth”

Money loses value with time. http://postimage.org/image/i79ldfogd/

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

Yes, money in a matress or in a 1% savings account loses value over the years. Absolutely.

That’s why WINNERS invest at rates that more than compensate for inflation. WINNERS increase the purchasing power of their savings over the years.

Poster Child is Warren Buffett, $15 in Berkshire Hathaway in 1965 is now worth $120,000.

Yes, that’s “only” about $12,000 after inflation or “only” a return of 80,000% in those 47 years.

LOSERS invest money at 0 or 1% and lose purchasing power after inflation.

The LOSERS opporating amnual states: Protect that capital. Don’t take a risk. You can’t go broke taking a profit (but you will prevent your winners from making you rich.)

Winners win and losers lose.

#125 Nemesis on 06.28.12 at 9:31 am

…”[Obama2012] already in the bag.” – Hon. GT

Leaving aside, for the moment, the broader issues of Yanqui hegemonic decline, OldPol… the psephological ‘tea leaves’ are hinting one term incumbent.

Care to wager?

#126 Ret on 06.28.12 at 9:32 am

In the long run, would you bet on the US or China?

Kinda like a choice between US banksters or Chinese gangsters. Personally I don’t do the Mandarin thing well.

#127 First to last on 06.28.12 at 9:36 am

Let the moose loose

#128 The American on 06.28.12 at 9:39 am

At #118: Boombust, you’re crazy. Seriously, you’re crazy. I’ve never stated I didn’t know what GTA was. You clearly have me mistaken for someone else. Your hatred of Americans and the U.S. rings through way too much. Watch yourself. Your inferiority complex is showing. :-)

#129 Cowbow on 06.28.12 at 9:45 am

The American and Boombust,

I really enjoy reading ‘the American’.
He has great posts and is very knowledgeable.
I appreciate all the info regarding the States that I have no idea about.
He is very welcome here as he is never insulting and gives great info!
Who cares if he does not know what GTA means.
He lives in Seattle and is kind of far from TO, you
know what I mean Boombust?….

#130 Sid on 06.28.12 at 9:45 am

Little too late for that now!

Forecasters say home prices may fall soon

http://www.montrealgazette.com/business/Bryan+Forecasters+home+prices+fall+soon/6851705/story.html#ixzz1z5y5sCRB

http://www.montrealgazette.com/business/Forecasters+home+prices+fall/6851705/story.html

#131 The American on 06.28.12 at 9:47 am

Here’s how the capital gains tax works for real estate in the U.S. Speaking for primary residences, real estate sales are subject to Capital Gains Tax IF AND ONLY IF the sale of the property see in excess of $250,000 gains over that of the initial purchase price for a single person. If you are a married couple, that number rises to anything in excess of $500,000 per couple. The amount in excess to these two numbers is the amount subject to the tax. The tax is about 34% of the gain in excess of either $250,000 or $500,000, depending on your status. It does not matter your nationality, as long as it is your primary residence. Also, I need to lay to rest the idea that Federal, State, County, or City governments in the U.S. tax real estate at a higher rate simply because you’re from another nation. Simply not true. It is all based on whether or not the home is your primary residence. Milliage rates are not subject to condition of anything besides the assessed value of the property per the assessor’s office.

#132 condopoor on 06.28.12 at 9:48 am

Is there a way to invest in US RE without buying houses there?

#133 cramar on 06.28.12 at 9:58 am

#33 Observor on 06.27.12 at 10:37 pm

Great story! Luv it! Thanks for this.

#134 Smoking Man on 06.28.12 at 10:01 am

#116 TurnerNation

G man is smart and a smart ass all the same. Harpo is dumb bully how came to power by the powerfull asper family, no his handlers are the likes of ONEX corp. Harpos chief of staff was a shooter there.

So we have a dumb as bully who’s every move is planned by the machine.

Ya a free thinking G man had no chance in that world

#135 OttawaRenter on 06.28.12 at 10:01 am

#106 Bottoms_Up on 06.28.12 at 7:34 am
Garth, no capital gains tax on the sale of my extended family’s place in Phoenix.
_____________________________
Basically, if the house sold is a primary residence, and you lived in the house for two or more years you don’t have to pay Capital gains . A Canadian buying for flipping or profit or renting would not qualify.

#136 truth hammer on 06.28.12 at 10:10 am

#69 SB…every civil servant union thinks they’re ‘essential’ and as such should be paid more than everyone else……such was the case in all the bankrupt states I mentioned……where does the narcissism stop? If a fireman doesn’t want to do firemens work then let them find a job they’re more suited to……the taxpayer doesn’t need to coddle them ….no one said they shouldn’t have insurance…what a typical liberal ad hominem….and by the way…bitch at the WSJ’s numbers on pay in Stockton not me……you could at least not be so cheap and read the article before setting your socialist brain aflame….it’s on the net.

As far as the job conditions and quality of service from any civic worker…these tasks can easily be filled by guest workers from other countries who would be happy to relieve the taxpayer of the burden at market rates rather than legacy union contracts at far beyond what the average citizen gets for their efforts in the private sector….this system works fine in many countries……including Canada…..are union traditions unassailable?

Canadians have been equipping and training firemen in the Caribbean, Cental and South America for decades…why not give a Mexican ‘Bombero’ a chance to visit Canada and work as a fireman……or is labour union xenophobia and rascism an unspoken value of the union movement?

#137 Smoking Man on 06.28.12 at 10:13 am

Guy who asked what a Track 6er is

Every day a train traveling from the east approches union train station. Its the lakeshore line.
Depts at 12:43

Down in the concorce. The herd gathers as they do everyday and watch the great hypnotist. Tv monitor. At 12:33 it tells the herd to go to platform6. One entrance on the east side 300 to 400 people fight to make it up the one entrance.

Now there is a platform on the other side of the track called platform 5. 10 ways up to the tracks. Mabey 5 people use it.

When the train pulls in the doors open on the platform 5 side first. So on 5 first choice of seat.

Now a platform 6er sounds like a shoe. The track associates going somewher.

So. Track 6er. Just some dumb idiot in the herd who’s drven by what he sees on a tv screan. A track 5er. Someone with amazing powers of observation

#138 Peter Goesinya on 06.28.12 at 10:18 am

@ #99 Johnny D

I was looking at how to fix something on the s40.
Should have just paid the extra and got a Kia.

#139 Helga on 06.28.12 at 10:28 am

Hoorah, a poem by Furst

#140 The American on 06.28.12 at 10:31 am

Wonderful news. As expected, “Obamacare” was largely pheld and passed at the Supreme Court. Only a few differences in interpretation of the law, but this is a victory for the Obama administration.

#141 Smoking mans smarter coousin on 06.28.12 at 10:43 am

Winston Churchill ?

One of history’s biggest war criminals?

He was a political whore, flip flop of party loyalties and doctrine allegiances , wore ladies underwear and a drunk.

He was invited to the US at the time the Great Depression started , and at the NYSE when the market crashed in 1928 to overview the manipulated crash.

Most over hyped criminal in history.

#142 VicBC on 06.28.12 at 10:46 am

#110 House Maniac Phenom

“Canada doesn’t have any tech firms left”
Wrong!

http://www.techvibes.com/blog/victoria-becoming-the-little-tech-town-that-could-2011-02-09

#143 Dividend Yield Investor on 06.28.12 at 10:50 am

Garth,

Did I read this sentence correctly?

“Sure, there’s shadow inventory to hit the market still, which should keep prices from rebounding too spectacularly.”

The acceptance of shadow inventory that has been held off the market due to the robo signing flap, and is now entering the market. This will drive down RE here in the States an additional 20% plus another 10% as the strategic sellers “throw in the towel.” After this occurs, the crash portion on a nationwide average will be finished.

The U.S. economy and the world are NOW in recession. The U.S. will experience a MILD recession driving corporate profits to around the $80 per unit on the S&P 500. With my forecast of PE of 10 that has the S&P 500 bottoming out at 800 or a 43% decline from top to bottom.

This is not a draconian prediction; with the S&P 500 at 800 and if dividends do hold, which I believe they will, the 10yr estimated average annual return at that point is only around 6%-7%. This means that the secular bear market in stocks is not finished, the historical the est. return needs to be over 10%. Therefore, there will be one more round trip before stocks bottom out.

Plus, U.S. Treasury 30 year and 10 year bonds will dip below, at the bottom of the recession, at 2% and 1% respectfully.

What is happening now and will continue for the next 5 to 7 years here in the States is deflation. That term is defined as the destruction of money and more importantly credit.

Deflation is on its way to a Canadian City near you. Canada has a CREDIT bubble which has created a RE bubble. When it bursts, from an American’s point of view, is how much more punishment can Detroit take?

Best Wishes,
Dividend Man

#144 Not 1st on 06.28.12 at 10:54 am

US personal and household debt is now less than that in Canada. — Garth

Yup, but add in the gov’t debt, state debt, unfunded liabilities and its off the charts.

100 trillion over 350 million people is simply UNPAYABLE.

#145 eaglebay - Parksville on 06.28.12 at 11:10 am

Obamacare, the largest tax increase in American history.
Welcome to the Socialist Republic of America.

#146 Tony on 06.28.12 at 11:15 am

Re: #130 condopoor on 06.28.12 at 9:48 am

You already missed a big move in real estate stocks. You could play some real estate stocks long and short the market indexes to cover your trade. Beazer is one with a long of movement up or down. I really think they won’t go bankrupt. It just made almost a 30 percent gain on housing figures that could be bogus with the election coming up. The market sells off about one month before the election so if you buy any real estate stock or stocks sell about one month before the U.S. election.

#147 cramar on 06.28.12 at 11:33 am

“And the border? Any pissed-off USCBP officer can refuse you entry, for any reason.”

Oh, so true! A requirement for officers at border crossings must be a propensity for paranoia. Recently over the Memorial Day weekend a couple of single guys were heading south for a church-sponsored singles weekend in NC. At the border one fellow, an ex-Mennonite, said he just lost his job. Refused entry! Why? Because he “could be” looking for a job in the U.S.

Worse, I know of a young fellow with a stable IT job in Mississauga, a wife and a new baby. He has been refused entry while trying to go to corporate HQ in the U.S. for a conference. He just might be trying to find an IT job in the U.S.

That’s right. Refuse entry to the good guys on the northern border while millions of illegals cross the southern border. Truly the inmates are running the asylum.

#148 DM in C on 06.28.12 at 11:36 am

Quick question for the blog dogs — a co-worker of mine is looking to buy a condo. I can’t talk her out of it. She sent me this link today — I thought I read it wrong. $1,500/month condo fees? Is that any where near normal? I have no clue on condo fees, but I told her she was insane to consider it.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12135194&PidKey=136039731

#149 Pat on 06.28.12 at 11:36 am

@#118 Boombust,

Crazy, angry old man?

Careful, you’ll burst a vessel.

#150 bill on 06.28.12 at 11:45 am

boom busted
”You didn’t even know what the GTA was! (and couldn’t care less by the way)”
well i know where the gta is and I couldnt care less about it either.
the american actually does seem to know quite a bit about Canada and Canadians.
and I have found his comments to be interesting as well as informative.
maybe we should ‘all just get along” eh?

#151 jess on 06.28.12 at 11:59 am

#70 Nostradamus Le Mad Vlad
as liar loans : mortgages : health claims are to ?

island buying and new kingdoms – so would the present sir title transform to a higher superlative

http://www.guardian.co.uk/uk/2012/jun/28/grandees-sarkees-channel-island-feud

http://www.guardian.co.uk/uk/series/channel-islands
Guernsey health supplement industry facing regulatory crackdown
28 Jun 2012: Island belatedly prepares to adopt Europe-wide standards on what beneficial claims can be made about products

…is thought to be Simply Supplements, the owners of which remain anonymous behind a Jersey trust. It too has been accused of making unsupported claims”

#152 Saggy Bottom Boomer on 06.28.12 at 12:08 pm

Wow, great news. Real estate is going up in Nelson.

“Trends in the current home buyer’s market show a new demand for affordability and value in homes that make them not only a great place to live but also a smart investment. ”

Guess I’ll collapse my portfolio and buy several units.

http://www.tmtv.net/BCTV_early_sales_the_view_on_west_richards_nelson_bc_kootenays_news_june_27_2012.htm

#153 Doug in London on 06.28.12 at 12:08 pm

Earlier this year Brother Carney said in a speech this economic slump America is in could last for many years to come. The next day I read an article where Warren Buffet (who do you trust?) said he was bullish on America. Shortly after that, there were signs the real estate market had bottomed and was actually showing signs of life in some cities. So I’m not out looking for any American properties (although I would be looking or have bought already in my city if I were American) there are other deals to be found south of the border. I’ll sign off now and look for some cheap stocks on the NYSE, or some cheap U.S. equity funds.

#154 gladiator on 06.28.12 at 12:15 pm

@20 phinny:

so true! I lived in both countries (first in the US and now in Canada) and noticed the same things.
After coming to Canada, I couldn’t understand why people here say “he’s working for the government” like they’d say “he won the lottery”, but now I understand… I pity the people whose goals are set so low, but, on the other hand, it gives me more advantage: I am building my second business here and there’s not much competition, so it works for me. I’d have much stronger headwinds in the States.

#155 T.O. Bubble Boy on 06.28.12 at 12:16 pm

@ #130 condopoor:
Is there a way to invest in US RE without buying houses there?

U.S. REITs
U.S. Homebuilders
U.S. Mortgage Lenders (mREITs)
etc.

However, many of these have already seen significant gains, so you could have missed the boat somewhat.

#156 bigrider on 06.28.12 at 12:22 pm

#113- Garth to Bigrider- “not the choice-except of uneducated folk”

Exactly what I wanted you to reply.

You travel amongst a group of well educated people I am sure Garth ,but try talking to the guy that cements bricks together, nails 2 by 4’s, picks up your garbage or cleans buildings for a living and try to convince him that RE is not a better investment than financial market instruments.

That guy turns on the TV ,sees red arrows almost daily, hears the mantra of negative economic news and in his limited scope of understanding decides its ‘b-a-a-a-d’ and plows all his money into a home.

His re-enforcement of course, his rear view mirror

Guess what, surprise to you I’m sure, but there is a much higher proportion of uneducated folk than educated in the GTA.

So I repeat the Universal Canadian Immigrant thinking:

Houses ,real estate….go-o-o-d

Stocks….B-a-a-a-d

#157 Big Al New on 06.28.12 at 12:26 pm

#Snowbird, are you firefighter? All the ones I know, some close friends, will tell you they have it good to the point where most have a second business on the side based on all the spare time. Tell me is it safer to commute to Toronto on a daily basis or be a fireman.
Offer the job to anyone else at half the salary and benefits and you’ll see a lineup of candidates a mile long.

#158 Blue Monster Lover of Meats and Vegetables on 06.28.12 at 12:27 pm

Several of our friends are fire-fighters (or retired) and I know the work they do is worth much more than $157K
—–
Snowboid, your opinion is irrelevant. There is no market price discovery mechanism anymore in the cost of fire services. It’s all pubic and disconnected from market forces. The may be worth $25k or they may be worth $250k, but we don’t know when it’s arbitrary.

I used to be a volunteer fire fighter for 8 years in Burlington. I was paid zero and love it.

I think you’d find we could go back to all volenteers again and those people in Elliot lake would have been rescued. That whole incident with city engineers declaring the building UNSAFE was despicable. NO SHIT IT’S UNSAFE, it just collapsed!

Next time there’s a fire the fire dept. will withdraw and declare the burning building unsafe. This country has turned into a bunch of total dweebs. It’s disgusting.

#159 Bottoms_Up on 06.28.12 at 12:40 pm

#20 phinny on 06.27.12 at 10:17 pm
—————————————–
The big difference could be perception of the status of working for the government.

In both the US and Canada, I would assume salaries, compensation etc. are similar for governmental employees.

In the US they see working for the government as a form of ‘communist socialism’, like you’re ‘selling out’. Whereas in Canada it’s viewed as a good paying, stable job where you can work for the taxpayer and do your best to make Canada a better place to live.

#160 Bottoms_Up on 06.28.12 at 12:44 pm

#142 Not 1st on 06.28.12 at 10:54 am
—————————————–
As Garth has said before, there is no intention of governmental debt to ever be repaid.

The size of the debt in terms of GDP, and ability to finance the debt, is important, however.

#161 # 8...lucky 8 on 06.28.12 at 12:45 pm

Go and start some bidding wars. Truth is offensive to you and real estate investing the best ting since sliced bread I assume. Take a bubble bath.

#162 daystar on 06.28.12 at 12:46 pm

#68 poster makes sense on 06.28.12 at 12:36 am in response to “#41 Onthesidelines on 06.27.12 at 10:56 pm

Is U.S. government debt still manageable? Actually… yes. When do their government bonds roll over? The average is 8.4 years and they are pushing to extend it. Is their balance sheet strong? Actually, with a recovery in housing… yes! Readers should take a look at how much cash is also in their federal treasury and they shouldn’t stop there.

We should take a look at what the rest of the world is doing. China has a RE bubble deflating and financials aren’t firm there. Europe is in chronic crisis. The rest of Asia is battling debt, demographics, overpopulations, you name it. India is caught with high inflation. South America looks good, but its not developed like the west, they’ve got some catching up to do. When we look at U.S. peers, suddenly the U.S. looks like the best house on a bad block.

The U.S. has long term systemic problems as we all know. Their federal deficits run 35 to 40% over revenues, utterly unsustainable. The U.S. spends on military like no other (save north Korea), older stats I recall are at 14% of GDP, second to one. With approx 175 military bases world wide, logic would dictate that they should scale back but what are the risks if they do? They have to get their fiscal house in order, gross public debt is running away on them but the thing QE did for them is kick the crisis can by about 8 years… 5 to 6 years if we include deficit spending repeats like what we are seeing right now. They have cash not just public but corporate, their competition is weakened, their dollar should strengthen reducing import costs, a lot is going their way when one thinks about it but the one thing that readers should remind themselves of when considering the U.S. is this.

Roughly 25% of the world’s nominal currency is American. Their influences world wide on other systems… its really hard to bet against them when one looks at the market share they’ve got not just with currency but with trade, defense and other governments (like ours with Harper). This is the U.S. we are talking about here. In decline, that’s defendable but decline from what to where? Its hard to bet against the U.S., it truly is. Considering credit alone, they have no immediate worries for the next 5 to 6 years (QE, long term inflationary as it is, delayed their credit woes to this extent) and I can’t say that considering its peers. Canadians should be much more worried about Canada and its credit issues from what I can tell.

#163 Bottoms_Up on 06.28.12 at 12:53 pm

#133 OttawaRenter on 06.28.12 at 10:01 am
————————————
So how are vacation properties treated? Those not rented out for profit?

#164 Snowboid on 06.28.12 at 12:57 pm

#86 The Real Jimbo on 06.28.12 at 1:49 am…

The rules do change in 2013, but you are wrong on the current amounts. The global net worth trigger is $ 5 million.

Most of the Canadians we know spent less than $ 160K on a US property and certainly don’t have more than $ 5 million in assets. The current estate tax on $ 160K is about 25% in any case.

By the way, you can have your children on title (at least in Arizona) so there is no issue with RE when you pass on.

Your statements are misleading but are quite common in those who continue to pump over-valued Canadian RE!

#165 Snowboid on 06.28.12 at 1:00 pm

#89 Jeff on 06.28.12 at 2:10 am…

Our experience was similar, but we bought a SFH in a conventional sale December 2010 – about 20 miles NW of you.

Sale prices are also up in our area. We figure a similar place in Kelowna would cost about $ 600K.

Unlike some of the posters here our experience with the purchase process was at least twice as easy as in BC, and about 1/3 the cost – including all the fees and title insurance. No red tape, except allowing for additional time to get Canadian cash transferred down there.

I also agree with The Americans’ posts, most Canadians we know are completely ignorant about the US. We enjoy our time in Phoenix as much or more than our time in Canada.

#166 Beauty and the Beast on 06.28.12 at 1:00 pm

The girl is beautiful. I was looking at the picture for a good 10 minutes before I noticed the sign. I was examining the girl and did not see what’s wrong with the big yellow sign.
I guess this is a metaphor for Canadian real estate. Homeowners are so indulged in the beauty of their home and promise (or maybe just a hope) of good times that they do not see the BIG (warning) SIGN of what’s coming. It won’t be pretty as that girl for sure.

#167 timbo on 06.28.12 at 1:06 pm

http://www.smh.com.au/business/no-risk-of-housing-bust-rba-20120626-20zyz.html

“There was a “day of reckoning” coming for the EU at some point but nobody knew how it would play out, said Mr Debelle, who heads the central bank’s financial markets unit.
Advertisement: Story continues below

Asked about fears of a housing collapse in Australia, Mr Debelle said there was no oversupply of housing in the country, households were well able to manage their debt levels and mortgage arrears remained very low.

“This (housing risk) is not something that keeps me awake at night,” he added.

Capital city home prices in Australia have dropped 5.5 per cent in the year to May, according to RP Data.”

Calm before the storm………

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9361646/Barclays-Libor-scandal-as-it-happened-June-28-2012.html

“It’s fair to say Barclays shareholders are pretty shell-shocked today. The Libor scandal may have cost Diamond a few bob in terms of his bonus but big investors are nursing millions of pounds of losses from the plunging shareprice. Anger is mounting and they want answers. Here’s the first awkard question from the National Association of Pension Funds. The group has said in an email: “Institutional investors like pension funds should be concerned about whether the commitment to improved risk controls has any real meaning. Shareholders should also ask why the Board was apparently unable to carry out its oversight duties effectively.”

When trust is lost the finger pointing will begin. Thank god we have a system where criminals will pay ;) …….

#168 Snowboid on 06.28.12 at 1:08 pm

#134 truth hammer on 06.28.12 at 10:10 am…

There is a description for your illness, but it has already been described by multiple posters.

I’m not a socialist, but consider myself a realist in comparison to your rants.

Not sure why you skip from BC to Thailand to Texas, but surely you can find a country more suited to your style – maybe Mexico?

In any case, no point in getting upset about your ridiculous posts, I must admit you do bring some humour to the site, as warped as it is!

#169 Cato on 06.28.12 at 1:18 pm

The raucous US political process tends to give the impression that things are far worse than they actually are. The question Canadians need to ponder is if things are really so bad in the US why are so many exceptional Canadian entrepreneurs leaving for US soil.

In some ways the western middle class has made itself irrelevant. Maybe the whole concept of a middle class was a doomed social experiment. America won’t fail, its still the bastion of capitalism. It still attracts exceptional people from around the globe intent on doing exceptional things. Canada will never fail due to our vast resource base. Both countries can survive & thrive without a middle class. There was no conspiracy that got us here. It was simply human greed on the part of many in the middle class.

We get to observe an economic re-balancing that will likely last the rest of our lives. The crisis will bounce from Europe then China and finally Japan. Japan is the biggy, a combination of debt,xenophobia and demographics has set the stage for an economic depression in the world’s 3rd largest economy. There can be no bail out of Japan. If you think the markets are riled over Europe just wait until Japan.

The world is set to change and Canada along with it. Some will make it, most won’t. Life goes on, prepare while you can.

#170 agioblue on 06.28.12 at 1:18 pm

To #9 ric in gta
“My contacts in the USA tell me not only will he lose but many of the left Dem’s will be out on the streets. this election will reset a new course for the USA. this nation will wake up, an be reborn in November, you can bet on it.”
——————————————————————–
Fox “News” , Rush Limbaugh , Michelle Malkin and the disturbingly hot to me Anne Coulter et al aren’t “contacts” unless you consider idiot magnets ‘contacts’ and the National Post insightful.

#171 Intuitive Missus on 06.28.12 at 1:23 pm

#114 – The American

TD Bank has 1275 branches in the U.S. mainly in the Northeast and 1100 branches in Canada.

Ranked #82 on the 2012 Forbes Global 2000 Leading Company List.

Learn something every day. Who knew?

#172 Not 1st on 06.28.12 at 1:27 pm

To The American, I appreciate your comments and experiences and I have nothing against your country or the people, just some of the policies.

That aside, you have to admit that there has been no politician willing to risk his hide to tell your countrymen the truth about your debt. By all conservative measures, your country is at least 50 trillion in debt counting gov’t and state debts and unfunded liabilities. Some estimates put this number closer to 200 trillion. The dollar is only strong because people have no place else to put their money. if you raised the taxes to 100% on every person, company and entity in the U.S.A you still couldn’t pay that off.

Garth won’t mention the numbers on here because he wants to believe they can be inflated away with a magic wand of artificial growth.

Personally I believe the U.S.A has another agenda and thats a financial war with China which will spark an internal revolution. The U.S.A can hold top spot in the world without firing a shot, just like they did to the USSR.

I think the U.S. will start repatriating manufacturing back home again and building off its own vast resources including oil which are largely untouched and then stiff China with the 10s of trillions it owes them and others. China and others will go into a tailspin and once an economic shock hits them, their communist gov’t will be overturned. U.S.A. still trades with Russia after blowing up their economy.

#173 Rural Rick on 06.28.12 at 1:32 pm

#154
Just remember the words of the late great George Carlin. “The average person is pretty dumb and half of them are dumber than that.”

https://www.youtube.com/watch?v=8rh6qqsmxNs

#174 Spiltbongwater on 06.28.12 at 1:36 pm

#146

But it is 1954.7424 sqft!! Realtor must have had a micrometer in the tool box to get that exact. The monthly fee better include all utilities, tv, phone and a STD free prostitute twice per week.

#175 Inglorious Investor on 06.28.12 at 1:47 pm

#141 Dividend Yield Investor on 06.28.12 at 10:50 am

Good post, Dividend Man. I don’t know if your specific predictions will be correct, but I tend to agree we have further down to go, perhaps much further.

Aside from the technicals and historical stats, I like to look at fundamentals from 20,000 feet.

The stock market, like our economy, depends on ever more money flowing into it for growth to be sustained. With the boomer generation now entering the retirement phase, and the young swimming in debt, a strong argument can be made that money flows into stocks will be severely constrained in the years ahead, not withstanding the enormous intergenerational transfer of wealth that has begun. Or will immigrants save us? I dunno.

Not to mention that, as an asset class, equities are being reviled by the retail investor. Although, HAL 9000 seems to love them still.

The central money masters can try printing more money, much of which could flow into stocks, but there are two problems there. As you know, in our system money is debt. Even though many of us like to say that central banks are “printing” money, in actuality, all the money they create is not just printed and thrown into the economy; it is lent out to various parties who must post collateral in return.

Ultimately that collateral is primarily the future productivity of the nation’s tax payers, whether via taxes directly, or via things like mortgages. But, as a society, we have run out of our capacity to service our current debts, let alone take on new debts. And economic growth is sluggish, which should dampen future debt/money growth. Furthermore, the quality of the collateral being posted now is deteriorating. So, to sum up: too much debt, insufficient collateral.

As you mention, the US is in deflation. This means money supply (at least in the real economy) is shrinking RELATIVE to goods and service. Of course the central planners are desperately trying to counteract deflation with ZIRP and QE. However, at some point they will run out of room, unless they actually plan to drop money from helicopters or do a Steve Keene. Barring that, unless the economy really begins to expand rapidly, we will simply not have the collateral to back more debt/money creation. Which means less money for stocks.

If it came down to a choice between the US dollar and the stock market, I think Bernanke et al would willingly sacrifice stocks to save the greenback.

#176 Kevin on 06.28.12 at 1:55 pm

@vatoDeth (#55):

“It’s funny how everyone kept saying,’We’re not the USA!’ and ‘Canadians don’t walk away from mortgages!’

In the USA, they never walked away from mortgages either. It was unthinkable, well, at least until they walked away from mortgages…”

You understand the difference between “recourse” and “non-recourse” mortgages, right? The vast majority of the strategic defaults in the US occur in “non-recourse” states, where the bank cannot go after the homeowner for the deficit amount. In “recourse” states, if you default, the bank sues you for the shortfall, and the only escape is full-blown bankruptcy. Any assets you have are liquidated to settle your debt, and if it’s not enough, the rest are wiped away (but you’re left penniless).

Canada, of course, is entirely a “recourse” jurisdiction, with the exception of Alberta.

So, no, Canadians won’t be “walking away” from their mortgages, because we don’t have the same get-out-of-mortgage-free card that many states in the US have. Up here (except in Alberta), if you mail back the keys, they sue you and take all your money.

#177 Devore on 06.28.12 at 1:55 pm

#84 Fort Mac Flatlander

I’ve seen you refer to 5′ers and 6′ers before. Excuse my ignorance, but to whom are you referring to?

Are you trying to drive smoking guy to drinking again? He can’t explain this track 6 nonsense because it is physically impossible. Something about a train being on two tracks in a station at the same time.

#178 daystar on 06.28.12 at 1:55 pm

#134 truth hammer on 06.28.12 at 10:10 am

Still obsessing with civil servant wages I see. (what else is new) There’s plenty of evidence to suggest OCPD here:

http://www.youtube.com/watch?v=MhSDO5ogadA&feature=related

However, you could be an attention seeking histrionic:

http://www.youtube.com/watch?v=8msOeHlOiTo&feature=related

… but your obsessions trump it? The key thing to watch for is depression either way. From time to time reality could creep in through the fleeting acknowledgement that the reality you’ve created is a fraud. Safety is found through the escape of such realities but in the meantime, such depressions may overwhelm you. Just remember that even though people may not like you, it doesn’t mean you aren’t valuable or unimportant to the world. It just means things are somewhat disordered is all and we can heal from it, it just takes a bit of work and effort.

I am pulling for you and if you need my continued support, I am at your service, please don’t hesitate to ask.

#179 daystar on 06.28.12 at 2:05 pm

#134 truth hammer on 06.28.12 at 10:10 am

Almost forgot. Egocentrism (plenty of evidence of this as well) and depression are also closely linked.

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

Perhaps what you may find to be quite healthy for yourself is simply to become more attuned to the needs of others. (just trying to help)

#180 Jeff on 06.28.12 at 2:10 pm

#108 Vulture Buyers, not sure your question… I paid cash. Most buyers are paying cash. US and Canadian snow birds mostly.

Also should mention that rents in my condo community for a unit like mine are $1400 per month unfurnished so I figured $130k was a great deal. Even now at $230k it’s cheap.

#181 Opinion as good as the next guy's on 06.28.12 at 2:16 pm

That’s right!!! The markets are rigged and any opinion is just a guess since we cannot control what the government and big f. (finances) are doing. Thank you!

#182 Western Observer on 06.28.12 at 2:28 pm

To: America Bashers

The USA gets bashed around & judged unfairly way too much. If they send their military to a country where people are being oppressed/killed/tortured (Iraq & Afghanistan) they get bashed.

If they don’t send their military to a country where people are being oppressed/killed/tortured (Iran, Syria, Libya, Somalia) they get bashed.

When your country has a natural disaster – who is there to help immediately with massive resources- the USA.

Where do people all over the world send their people for the best education available – the USA.

Who welcomes more immigrants every year than all other countries combined – the USA

Who saved the democratic world in WWII – the USA

Who would you rather have for a neighbour – Iran, Iraq, Haiti, China, Russia, India, Libya, Bosnia, Serbia, Mexico – the list of repugnant countries is endless.

No I am not American – I am a 6th generation Canadian & I appreciate our neighbour.

The way I see it, it’s jealousy/envy followed up with hypocrisy.

If you dont like America then don’t watch their television shows, read their authors books or magazines. Don’t listen to their musical talent, don’t travel there especially in an aircraft, vehicle or boat built there. Don’t buy an aircraft, vehicle or boat built there. Don’t emulate their clothing styles & fashions. Don’t go to the hospital or doctor and utilize technology developed there. Don’t watch any Hollywood productions or buy an Ipad, Ipod, Mac or any other Apple products. Don’t watch the NFL or MLB or play football or baseball. Don’t eat a hamburger or drink their beer, wine or spirits. Don’t sell your products into their markets. Don’t eat at McDonalds, Wendys, Burger King etc. Don’t cross border shop. Don’t go to college or university there. Don’t use or buy any Microsoft products. Don’t let them cross the border to spend their money here. Don’t copy their housing styles.

Otherwise – you are a hypocrite.

#183 45north on 06.28.12 at 2:47 pm

boombust: talking about The American: We don’t need you here

snappy comeback – NOT!

The American experience gives up a deeper insight into our own. The housing bubble in the US burst 6 years ago. The US supplies us with an unparalleled information: newspaper articles, personal blogs and financial analyses. Google maps lets us zoom in on an address and find out exactly where it is.

The flow of information is a two way street. Nothing to stop Americans from coming here. They have lived through a steady fall in their housing market – they have something to offer.

It’s my theory that the ready comparison with the US forced Flaherty’s hand – he cannot say “I never saw it coming”.

#184 Amerigo on 06.28.12 at 3:07 pm

Canadians!!! Don’t bend for America!

#185 jess on 06.28.12 at 3:11 pm

computer trading and opaque markets has hurt investor confidence. Niederauer in his written testimony said a big factor in the waning confidence was that “an ever-increasing volume of trading in equities occurs in dark markets.”

===

NYSE CEO: Public Has Lost Trust in

Mark Cuban: When the flash crash hit, that got me looking at algorithmic trading and the state of the market. I came to realize that the stock market no longer knew what business it was in. I wrote a blog that basically said that the markets for equities of all kinds had evolved to a platform for hackers.
mark cuban: That got me looking further into issue of high-frequency traders. They are the ultimate hackers. They’re running software programs that have one goal, and that’s to exploit the trading systems as early and often as possible. As someone who wrote software for eight years and who keeps up very closely with the technology world, that scared the hell out of me. The only certainty in the software world is that there is no such thing as bug-free software. When software programs are trying to outsmart other software programs and hack the world’s trading platforms, that is a recipe for disaster

=
Isn’t that the point?

==========
bonuses rebranded as “incentive compensation”

“There was a period of remorse and apology for banks, and I think that period needs to be over,” Barclays’ boss Bob Diamond declared last year
==========

#186 IM in C on 06.28.12 at 3:21 pm

@146 DM in C
Tell your friend that I rent a mid size 2 bedroom apartment (with balcony) for 1300/month and that includes everything but my phone and cable. Oh, and that’s not the best price in town either! What amazes me is the number of people out there who buy condos with these high condo fees, yet are convinced it’s better than paying rent. Perhaps it’s because they sincerely believe that in a few years their ‘investment’ will have doubled, no , tripled in price

#187 DonDWest on 06.28.12 at 3:25 pm

Garth, should I buy a KIA dealership instead of a house?

#188 TRT on 06.28.12 at 3:25 pm

Euro 2012

It’ll be interesting to see what flag colors will be worn in North Toronto, Vaughan,and Woodbridge on Canada Day July 1st.

Italy will be playing in the finals of Euro Soccer cup.

#189 Ray on 06.28.12 at 3:26 pm

After Boom Always Comes A Bust — Norway’s Housing Market Mirrors The U.S. Bubble

http://www.ibtimes.com/articles/356908/20120627/housing-bubble-norway-real-estate-property.htm?

You can replace every single occurrence of Norway with Canada in the article except the debt to income ratio of 200.

#190 jess on 06.28.12 at 3:32 pm

158 Western Observer

the usa as you wrote seems to be so good at solving other countries problems then why is it it cannot seem to solve it’s own?

The three-yearly OECD Programme for International Student Assessment (PISA) report, which compares the knowledge and skills of 15-year-olds in 70 countries around the world, ranked the United States 14th out of 34 OECD countries for reading skills, 17th for science and a below-average 25th for mathematics.

this will make you cry
http://www.pbs.org/wgbh/pages/frontline/dollars-and-dentists/

#191 Devore on 06.28.12 at 3:52 pm

This article is making the rounds:

http://www.theglobeandmail.com/news/politics/for-many-new-mortgage-rules-put-home-ownership-out-of-reach/article4362261/

Should really be filed under Humour, not Politics, but, eh, close enough.

The choice quote:

“It means my total family income would have to be an exorbitant amount to afford an $800,000 house,” she said.

Yes, Andrea, your income should be very high to afford a million dollar house. These are not for mere mortals and working stiffs.

#192 Debtfree on 06.28.12 at 3:55 pm

The Americans work harder ? Better work ethic ? Folks this is because there is NO government mandated paid vacation time in the USA . The only place in the western world that treats its workers worse than the Chinese . Even in china that mandates work ethic at the end of a bayonet . The people there get government mandated ten days paid vacation . In the states the vacation they are allowed to take (unpaid) most don’t take for fear of losing their jobs . Another good reason not to bet against the states . People up to their eyeballs in debt and scared shitless to take time off . They also so have the highest post secondary education costs in the world . And in the land of the free . Student debt can not be dissolved by bankruptcy . It survives any move they make . I guess that’s why they would put their lifes on the line in the military for an education . It’s ugly but what a money machine.

#193 bubble head on 06.28.12 at 3:55 pm

From theredpin.ca

Year to date, there have been a total of 10,882 new condo units in the GTA, over 4,500 of which have been released in the 905 region. This represents an increase of 160% over the previous year. Overall, the 416 suffered a 31% drop in new launches.

#194 Terces on 06.28.12 at 3:55 pm

I just had lunch in Calgary with good friends who know the undercurrent of the oil and gas market. All seems well on the street if you ask the ditzy mid level staff who are out buying glitz condos. The people I am connected with see it all and know different. There are bankruptcy proceedings against 55 junior oil and gas companies as of today. And the low price of gas has kicked the crap out of cash flows. Just a little inside knowledge from the hinterland for anyone interested.

#195 International Observer on 06.28.12 at 4:07 pm

To: Western Observer

You have a very naive understanding of US involvement in the world. Especially regarding US foreign policy.

The United States military and security state apparatus historically has not been intended to ‘save’ anybody. Rather, as it is historically documented (through senate investigations, committees, hearings, reports, academics, documentaries etc.) US foreign policy has systemically and systematically been involved in the direct and indirect murder, oppression, suppression of millions of people worldwide – and has been destabilizing and crippling dozens of nations around the world, through covert operations, direct military occupation and/or operation, financial hegemony, etc.

The intention here is not to pass moral judgment, but rather to tease out ideological obfuscations and rob you of your myths – so we can open a factual dialogue that is not based on Hollywood myths.

Is this some sort of conspiracy theory? Why would US foreign policy be involved in such horrendous things? This makes no sense! … I invite you to start your research with this acclaimed documentary from the 1980’s called ‘The CIA: On Company Business ‘which provides a very keen interpretation of united states foreign policy based on official reports, CIA operatives, and other factual information. You can find it on you tube.

(not to reader: although not directly related to real estate in the United States, this is highly related to US culture and functioning overall – a military which experiences record heights of soldier suicides is a broken military. A broken military in a country whose myths and functioning heavily rely on militarism is a sick society. This, briefly is how I claim my comments are relevant not only as a response to the OP, but overall).

#196 Peter Goesinya on 06.28.12 at 4:11 pm

@ #180 Western Observer
Amen brutha!

If I had the choice to hang with an American or an albertan, The American would win.

I hope oil drops below $60. And holds.

#197 TakingResponsibility on 06.28.12 at 4:19 pm

Don’t bet against the Americans???

Forgot to add …. the USD. It’s the US Dollar – and not the optimistic, hard-working, ethical, giddy-up, US people’s characters! Ha!

Of course, do not bet against the US Dollar. It is backed by the most powerful and lethal military in the world.

#198 mingeford on 06.28.12 at 4:24 pm

Snowboid

Fire Fighters : paid to sleep on the job

#199 Steven Rowlandson on 06.28.12 at 4:26 pm

Whenever I want to escape reality I come here. — Garth

You must be a Canadian Boomer Garth, always wanting to escape from reality into a world of 6 figure incomes, 7 figure homes, government pensions and social programs and open mindedness. Hell you have to be rich or in the government as we know it to think like that. Things are not so rosy in the real world Garth and it is going to get alot worse before any corrective action is even considered.

I was referring to this blog. Thanks for the validation. — Garth

#200 Snowboid on 06.28.12 at 4:28 pm

#155 Big Al New on 06.28.12 at 12:26 pm and
#156 Blue Monster Lover of Meats and Vegetables on 06.28.12 at 12:27 pm…

I agree to disagree.

Volunteers can be depended on as long as they are around, but will never replace full-time firefighters in anything but small rural departments.

What value do I place on firefighters (or police, military, healthcare, etc)? Certainly more than you two. Market forces shouldn’t decide the value of essential emergency workers.

It would be interesting to see Toronto with an all-volunteer fire department!

#201 Bill Gable on 06.28.12 at 4:31 pm

Phoenix?

Are you nuts?

The Zetas and the boys from Sinaloa are running a mazzilion tons of coke through a City that will run out of water, in less than 5 years.

Incredibly naive folks out there.

I lived in Mexico for three years and spent a long time in Phoenix.

I wouldn’t go back for all the money and Amazon back rubs in the world.

#202 cramar on 06.28.12 at 4:37 pm

RIM is toast! The lost over a half billion in last 3 months! Gasp!

#203 futureexpatriate on 06.28.12 at 4:39 pm

#68 “See? Our arrogance is boundless”. – Garth

That’s what happens when you give a population the size of California their entire own country.

And WAY too much pot.

#204 futureexpatriate on 06.28.12 at 4:42 pm

#41 – Corporate America is no longer in charge. People woke up. Who knew?

Or didn’t you get the memo?

#205 So it begins.... on 06.28.12 at 5:26 pm

A bad week for jobs
Rim -5000
Civil servants – 5000
Ria rail – 200
Rogers – 375

Interest rates?
It’s all about the unemployment rate

#206 T.J. BONES on 06.28.12 at 5:34 pm

Sir Garth: Haven’t I seen that girl on this blog before?

#207 betamax on 06.28.12 at 5:42 pm

#190 Debtfree: “….the USA . The only place in the western world that treats its workers worse than the Chinese”

No. Millions of Chinese toil seven days a week in horrible, health-destroying conditions. A few days vacation for New Years hardly compensates for the other 346 days of hell.

#208 betamax on 06.28.12 at 5:52 pm

#77 Onemorething: “dead cat bounce for America”

Agreed. Seems like every month for years there’s someone claiming the resurgence of US housing, only to be later refuted with stats revised downward. There’s a lot more sh** to come down the pipe before things change.

#209 Not 1st on 06.28.12 at 6:25 pm

#186 TRT on 06.28.12 at 3:25 pm

It’ll be interesting to see what flag colors will be worn in North Toronto, Vaughan,and Woodbridge on Canada Day July 1st.

________

How about the white flag of defeat for the entire bankrupt, insolvent Eurozone. Every country in Europe is a failed state with a lazy, socialist, entitlement attitude. How about some bags over the fans heads too.

#210 Toronto_CA on 06.28.12 at 6:27 pm

Assuming those 5000 RIM jobs to be cut are mostly from head office (perhaps I’m incorrect) I wonder what this will do to the Waterloo housing market, if anything? It’s a lot of jobs to be cut at once.

#211 Johnny D on 06.28.12 at 6:29 pm

Totally a KIA bubble going on right now. Will it pop?

#212 Snowboid on 06.28.12 at 7:04 pm

#196 mingeford on 06.28.12 at 4:24 pm…

I thought all public servants were paid to sleep on the job?

#213 Debtfree on 06.28.12 at 7:06 pm

@205 Betamax google sweatshops in America . They don’t get paid vacations like they would in china .

#214 gokou3 on 06.28.12 at 7:07 pm

#174 Kevin, you wrote:

“You understand the difference between “recourse” and “non-recourse” mortgages, right? The vast majority of the strategic defaults in the US occur in “non-recourse” states, where the bank cannot go after the homeowner for the deficit amount. ”

Florida=recourse. Enough said.

#215 gokou3 on 06.28.12 at 7:09 pm

List of non-recourse states:

http://wiki.answers.com/Q/Which_states_are_non-recourse_states_for_mortgage_debt

#216 Snowboid on 06.28.12 at 7:11 pm

#199 Bill Gable on 06.28.12 at 4:31 pm…

Yep, I’m nuts and so are the other 550,000 Canadians that winter in Arizona.

I think BC will run out of water before Phoenix, or haven’t you heard? Run of river projects plan to drain our mountain lakes to feed their insane mini-hydro projects during the off-season.

I’m not naive, that’s why I know it’s safer in our neighbourhood in the NW valley of Phoenix than downtown Kelowna.

I thought we Canadians were supposed to be tough!

#217 CrowdedElevatorfartz on 06.28.12 at 7:19 pm

@#164 Beauty……
Time for new glasses?

#218 Two-thirds on 06.28.12 at 7:20 pm

A fun fact about Kia and the U.S.:

Kia’s factory in Georgia employs 3,000 Americans, and contributes another 10,000 indirect jobs in the region.

http://www.kmmgusa.com/about-kmmg/our-company

And it also manufactures the Kia Optima, a handsome sedan that has won a bunch of awards and is a hot seller:

http://www.kia.ca/pages/company/AwardsandAccolades.aspx?lang=en

So yes, America has nothing against Kias, it would seem.

Disclosure: no position

#219 Stupid Canucks on 06.28.12 at 7:21 pm

Garth, why did you have to stoke people’s egos, including perhaps yours, by comparing U.S. to Canada? Other than the English language spoken in most of the country with that peculiar Minnesotta accent, there is not much at all to compare between the two countries. True that both countries share English imperial legacy, but the historical interpretation of it differs immensely. One suffers from inferiority complex just a like a prissy girl that is starving for attention, the other doesn’t even know where the one is located, or if it exists and for what purpose. Call it ignorance, arrogance whatever. It is what it is. No verbal tirade or diarrhea of the mouth would ever change any of it.

#220 jess on 06.28.12 at 7:24 pm

UK recession deeper than thought …well don’t count on the games

http://www.dailymail.co.uk/news/article-2164517/Worlds-biggest-McDonalds-First-pictures-inside-Olympic-Stadium-fast-food-restaurant.html

Zero tax

Without these tax sweeteners the IOC would simply take their corporate circus elsewhere and so begins a race to the bottom in a bidding process that echoes the offshore system. New tax rules ushered in as part of the winning Team GB bid include ‘a temporary exemption from UK Corporation Tax and UK Income Tax for certain non-resident companies’. (1)

The legislation is written to include ‘partner’ organisations such as McDonald’s and Visa. Both, along with other ‘partners’, look set to make a tax-free fortune. The former will have a near monopoly on food vending and the latter a total monopoly on venue and ticket payment methods.

The HMRC says “For the purpose of this exemption a London 2012 Partner is an organisation (known as a Commercial Delivery Partner) that is supplying services to LOCOG in return for the right to market and advertise themselves or their products for commercial purposes by reference to their association with the Games. It includes a company connected with the Commercial Delivery Partner.” (1)

The new legislation also exempts all foreign nationals working on the games in the UK from paying income tax on any earnings. Thousands will be exempt from taxation from competitors to media workers (including journalists, technicians and producers) to representatives of official Games bodies and technical officials (including judges, referees and classifiers) along with the athletes themselves.

So, despite putting severe weight on London’s public infrastructure, those profiting from the games and many of those working at them will be exempt from tax.

http://www.ethicalconsumer.org/commentanalysis/corporatewatch/thegreatolympictaxswindle.aspx

#221 Editor on 06.28.12 at 7:30 pm

# something or other – “In the US they see working for the government as a form of ‘communist socialism’, like you’re ‘selling out’. Whereas in Canada it’s viewed as a good paying, stable job where you can work for the taxpayer and do your best to make Canada a better place to live.”

In the US they see working for the government as a values choice to work for the common good, at a cost to income potential. Plenty of people make that choice or there wouldn’t be a government. In fact, they may need to be more idealistic than Canadian government workers, because they are aware that they would make more money in private industry. Never heard anyone say working for, say, the Food and Drug Administration, would be socialism. Just underpaid and under-appreciated, but with a chance to — and this is so American — “make a difference.”

#222 An Cat Dubh on 06.28.12 at 7:41 pm

Obamacare just killed any job recovery in the USSA.

#223 Rog on 06.28.12 at 8:16 pm

Wow comments on this one are intresting. I don’t know how many times on this blog we have read be a contrarian. Buy whats on sale and sell when it’s at the top.
US going down??? There still the largest economy in the world even if china passes them they will still be the second largest economy in the world.
Funny thing is seems like most think a Vancouver or fta condo is a better investment.
Oh well can’t fix stupid……and we shouldn’t try

#224 Nostradamus Le Mad Vlad on 06.28.12 at 8:24 pm


“Whenever I want to escape reality I come here. — Garth” — Why? There’s nothing of any interest here, except a bunch of loopy lumberjack whackjobs babbling on and on and on!

#149 jess — It will be interesting when all of this comes out into the open. Billion of pounds / dollars in laundered money go through there, and I would imagine the same holds true for the Yuan / Renmibi and other currencies as well.
*
Ireland Bank bondholders take precedence over hospital patients; NatWest Guess the chickens are coming home to roost; DDR in UK a.k.a. double dip recession; Swiss Cheese Having a go at the EU, and EU Budget Contagion; Market Rigging Markets aren’t rigged, they just play funny!
*
War Games Practice on those nasty Iranians, but don’t talk of Dimona or the nukes we have; EU Slush Fund Now the reason for all the wars in NAfrica are beginning to make sense; Five min. clip US and Iran should not take part in Syrian talks; DoubleSpeak in 1984 Bees kill as many as terrorists do; Obomba’s Nobel PP Good idea; Enemy Of The State 75% of Pakistanis now view the US as an enemy, and Triple the cost; Skeptics “An epidemic of sanity erupts across the globe!” wrh.com; Fukushima Another ‘quake.

#225 TurnerNation on 06.28.12 at 8:37 pm

this will make you cry
http://www.pbs.org/wgbh/pages/frontline/dollars-and-dentists/

#188 jess on 06.28.12 at 3:32 pm

Jess, shows what a brutal country USA is. Sure, great technology. But only for the top 25%.

Might as well be in India. The shivering, huddled masses beg for basics of health, dental care. Lining up at makeshift camps. Might as well be a 3rd world country Red Cross tent.

#226 PoorgEoisie on 06.28.12 at 8:37 pm

Ok the pool is over who had #221?

#227 Editor on 06.28.12 at 8:51 pm

#220 Health care access doesn’t kill jobs, if anything it will help relieve employers, especially small-business employers, over time of the burden of paying for overpriced insurance. The jobs a lot of Americans would like to see killed, of course, are the jobs of insurance company execs who fought with all their billions against a single-payer plan.

#228 Chaser on 06.28.12 at 9:23 pm

“Don’t bet against America.” It will be a lot longer than 6 years before you are right about this one. You must enjoy being wrong.

When it happens I’ll let you know. — Garth

#229 Alberta Guy on 06.28.12 at 9:39 pm

#129 The American – to your knowledge, can a Canadian have their primary residence in the USA?

#230 Alberta Guy on 06.28.12 at 10:05 pm

#146 DM in C 1500 in condo fees is insane, you could rent that place furnished, all utils in with maid service for not much more!

#231 Stupid Canucks on 06.28.12 at 10:08 pm

# 228 – Sure as long as you have your valid U.S. Permanent Resident Card with you…

#232 truth hammer on 06.28.12 at 10:59 pm

#166 SB….so you envy and covet my lifestyle? Pretty weeny dude. I travel because I can……what’s your excuse to yourself for being too stupid to make enough money to do what I do?

Has it become a politically correct socialist rant that people who can travel are bad? If thats the case then you should join me in shouting down the liberal elites jamming those cruise ships and beer bars in Phuket.

Cry me a river. BTW….it’s freaking brilliant down here in Dallas……a fantastic thrill ride to tread the streets of BKK……….last year I went around the world……three times……..envy me some more ……smarty.

I’ll probably be in Brazil within the next 8 weeks…….and I’m so sorry I can’t stay in whiny little Canada and commiserate with a loser like yourself……so be pissed with ‘the hammer’ baby……really pissed…..the real world is made up of winners and losers…

But I wiil guarantee that if anyone can get out from under the cloud of BS that is perpetrated upon Canadians the experiance will make you bigger …better…smarter….faster……like me baby…..it’s a beautiful thing.

#233 futureexpatriate on 06.29.12 at 12:47 am

#88 Grooby- thanks for the further encouragement!

#234 Gunboat Denier on 06.29.12 at 1:09 am

214 Snowboid – run of river projects do no drain or store water. It is simply removed from the river for a certain distance and then returned. Power production is reduced if the flow is lessened.

http://www.scribd.com/doc/45482489/Run-of-River-Hydro-Project

Vancouver doesnt have a water problem. It has a water storage and useage problem, as do many towns on the coast. If storage resevoirs and infrastructure kept closer
pace with population growth, and consumers employed
better conservation, there would be water aplenty.

#235 cynically on 06.29.12 at 3:52 am

Hey, #190 & 193, Canada and the US started their existence from the same mother country with the latter choosing independence and the former remaining a colony. The US has become the richest and strongest country ever and Canada as far as I’m concerned, having not cut the umbilical cord, is a quasi colony. albeit self-governing. I don’t expect the US will remain on top but I can assure you we will never get a sniff at that rare altitude. All empires had their faults and eventually went into decline but they experienced something both externally and internally that only their people will ever know. The Brits knew this. I’ll bet you both wish you were American before the decline begins, this being your last chance to experience that feeling and that is why your hatred is showing. Your inferiority complexes are blowing our “nice” Canadian reputation. Hey #180, Western Observer, HALLELUJAH! Couldn’t have said it any better but alas, it falls on some deaf ears.

#236 TurnerNation on 06.29.12 at 6:57 am

Is this considered as a governement job? Is USA really needed in over 100 countries, bases abound? No-bid contractors charging military $400/galllon of gas (google search this one) or $100/widget?

http://www.usatoday.com/news/military/2010-08-16-military-towns_N.htm

“Soldiers, sailors and Marines received average compensation of $122,263 per person in 2009, up from $58,545 in 2000. “

#237 Boombust on 06.29.12 at 9:33 am

“181 45north on 06.28.12 at 2:47 pm

boombust: talking about The American: We don’t need you here

snappy comeback – NOT!”

I get sick and tired of them coming to sites like this one and droning on about what happened to THEM. It is ALWAYS about THEM because they rarely KNOW about any place else. (Much less care)

Most of them couldn’t tell you that Ottawa is the capital of Canada.

They live in perpetual ignorance within their own “bubble”… due to a substandard educational system, a xenophobic press and a general dumbing-down about everything else. (Paris Hilton, anyone?)

Most of the cities I have seen in the US are grimy toadholes and are downright dangerous.

Go ahead and fawn. I won’t.

#238 The American on 06.29.12 at 10:06 am

#228: Alberta Guy, it would depend on whether or not you are living more than 50% of your time in the home you are claiming as your primary residence. Would you be living in the U.S. on a work visa? This would be the only way I could see that being possible. I’m not an expert in this are, though.

If the home is not your primary residence, the milage rate doesn’t typically increase *that* much. For example, in Seattle the property tax is around 1% of the assessed value for primary residences. For non-primary residences, the tax increases to about 1.25% of assessed value (there is no state income tax in Washington state, and there are no income tax. Revenues are collected by way of “sin” taxes on alcohol, tobacco, and gasoline. In Texas, property tax is *around* 3%, depending on the county you live in if it is your primary residence (yes, Texas has expensive property taxes, but there’s not state income tax, and many retail items are sales tax exempt). If you are a non residence in Texas, it will run you around 3.25%.

#239 Snowboid on 06.29.12 at 11:02 am

#231 truth hammer on 06.28.12 at 10:59 pm…

I only envy your ability to post nonsense and get away with it.

Apparently you inability to comprehend has left you with the wrong impression about me, but I don’t really care.

You are still a pleasant diversion.

#240 Stupid Canucks on 06.29.12 at 11:21 am

#236 – No verbal tirade would really help the case here, but…Ironically, you appear to be epiphany for ignorance and inferiority complexes so many others, including myself, have talked about. You obviously have been permanently barred from being able to come to America judging by the venom you are spewing on this site. You are simply pathetic and small in your hatred.

#241 Snowboid on 06.29.12 at 11:43 am

#233 Gunboat Denier on 06.29.12 at 1:09 am

Actually if you look at some of the projects called ‘run-of-river’ they remove water directly from lakes – three in the case of the Narrows Inlet project.

Much like an Omnibus bill, these companies are able to bundle different types of projects and call everything ‘run-of-river’ – including the renaming of dams as ‘weirs’ or ‘pondage’.

Some of the diversions you mention are over 4 km long, and some companies are now able to divert 95% of the water from the creeks.

I think the entire IPP project is one of the biggest scams perpetrated on the taxpayers of BC, and the loss of control of our water is only one aspect – when the 20-25 year terms expire these companies no longer have an obligation to provide BC with any of the power generated!

#242 West of the Grand on 06.29.12 at 12:08 pm

Garth sayeth: _”Southern Ontario west of RIM’s head office is an employment wasteland.”_ You got that right. I live in London and have been looking for a senior management position for 4 months with few leads.

Southwestern Ontario never recovered from the 2008 meltdown and more importantly never recovered from the automotive sector crisis of the same period (I am not in automotive). The MUSH sector is on layoff deathwatch, so there is little to no opportunity there. Declining enrollments due to demographic change will soon cause schools, universities and colleges (major employers here) to shed good middle-class jobs by the thousands.

Outside of maybe Windsor, no one seems to notice this. Our political leaders are in denial and talk like it’s 1999. It’s like being in a tsunami when the beach has been pulled back 500 metres and just before the big wave comes ashore.

And for those from Alberta, I can say that I have not heard one discussion from anyone about checking out jobs in Alberta or Saskatchewan.

#243 Mithan on 06.29.12 at 12:50 pm

Garth, what is your impression of Saskatchewan?

From a carnal or agricultural point of view? — Garth

#244 Boombust on 06.29.12 at 6:49 pm

“#239 Stupid Canucks on 06.29.12 at 11:21 am #236 –

“No verbal tirade would really help the case here, but…Ironically, you appear to be epiphany for ignorance and inferiority complexes so many others, including myself, have talked about. You obviously have been permanently barred from being able to come to America judging by the venom you are spewing on this site…”

Well. Aren’t you a delight.

I rest my case.

No sooner had I posted than “American” started on with a lot of blah, blah and then some more blah.

Totally unrelated to Canada, wouldn’t you know?

And, I don’t need to be “defined” by you or anyone else.

Buh-bye!

#245 Roland on 06.30.12 at 7:15 am

#180 doesn’t understand the Second World War.

What won the war was an alliance. The USA was an important part of that alliance, but not the most important part.

After our huge defeat in the spring of 1940, the war seemed lost, but the British decided to reject Hitler’s peace proposals. If the British had compromised, the Germans would have won the war before the USA even got a chance to participate.

Without the Russians, the German armies would never have been defeated. Nearly three-quarters of all Axis armies, and almost half of the Axis air forces, were destroyed in combat against the USSR.

It took the efforts of all three major Allied powers to defeat the Germans.

It is a terrible violation of the truth, to suggest that the USA “won the war.” No single Allied power won the war. It required all of them to do it.

General Marshall knew this. General Eisenhower knew this. Why doesn’t #180 know it?