Dear Garth

Well, we all had so much fun poking sticks at Carl’s flagging manhood yesterday that we should probably pry open the mailbag a tad more. Here are some people who have written me in the last few days. May Allah be with them.

I am  a new reader to your blog and you have me questioning my future plans.
 
I am a 40’s single female, no kids, with an income of $90,000.   I have $95,000 in RRSP, and $60,000 in savings/TFSA.  My mortgage is $160,000 and the value of as today is about $275,000 for a 1 bedroom in Burnaby.   The neighbourhood is going to have a huge amount of development in the next 2 – 5 years with pre-sales already starting.   My plan was/is to move to a $450,000 2 bedroom townhouse in North Burnaby in the spring of 2013 with the idea of selling my apartment before the development starts as who will buy a 18 year old condo, albeit renovated, when they can buy brand new?  To buy the townhouse I will put down at least 25% on a 7 year mortgage over 25 years.
 
I do have the mentality that owning is better for me then renting and really don’t like moving.  The thought of selling, renting and waiting for the bottom to hit is not appealing. Leesa.

Bad plan, L. First, if you wait until the Spring to dump your condo, you’ll be doing it in the middle of a dismal market. The Lower Mainland’s unraveling fast, and six or eight months from now you might not be able to give away a geriatric suburban condo. Second, you’ll be doubling your mortgage. What, just to get a second bedroom? Third, how ‘40’s’ are you? If it’s closer to 50, and you lack a pension, you don’t have enough liquid assets. And if the RSPs are in dead-end mutual funds or comatose GICs, far smarter to worry about them than your real estate. And if you do this, why take a seven-year mortgage? So you can pay double the interest rate now, in order to avoid higher interest rates later?

Give yer head a shake, girl. Say, would you like to borrow Carl?

Garth, in your hilarious piece about that loser in the almost-Beaches you told him to, “Open a spousal RRSP and make contributions there – you’ll need that when the mat leaves hit.” Huh? I thought this was only good if you have a wife who makes less than you do, besides how is he going to do that in nine months? Isn’t there some kind of rule saying this has to be years long? Thanks, Jimmy in Saskatoon.

It’s a basic way couples can income-split, even in Skatch. Open a plan in your spouse’s name, then contribute into it to the extent of your own allowable room. You get the deduction from your taxable income and the spouse gets the money. So, if you have a mat leave coming up, you can plan in advance to fund it with a spousal RSP. When the woman is on leave and drawing EI, she can collapse the plan and pay minimal tax, after hubs has written it all off. Voila! Income-splitting.

And yes, there’s a minimum time requirement – if the plan is cashed before three years, the money (taxable) is attributed back to the contributor. Can you count backwards, Jimmy? Good. Keep your pants on.

Dear Garth. Well, as January 2012 rolled around, the often discussed topic about “should we sell our house” again surfaced. It seemed every year or so we looked at the subject, wanting to cash in on the gains, but each time we backed down, not quite sure it was time. This time, it was different. We took a gulp and the house was sold in under a week, over asking, three bids in play, on March 1st, 2012. Jackpot! We bought in North Van for about $450K in 2003, and it went for over a million bucks. Yahoo!
 
As of June 1st, we have once again returned to the land of renting. So, two key questions. First, how long should we expect to rent for? I have to get my head around the timing, and it might prompt me to paint the walls and perhaps pull up some carpet if it’s going to be a long haul. My husband on the other hand is happy not to lift a finger!
 
Second, what do you recommend we do with the money? By the way, we also sold a place in Whistler. So we are cash rich, and real estate poor at the moment, looking for great ideas. I am all over finding passive income streams (like the Chatham apartment you mentioned last week), but really not sure at this point. Looking for some great ideas! Feel free to blog about it…
 
Cheers, Mrs. Bold

I am now aroused. What a magnificent specimen you are. Lusciously covered in liquidity, making sage decisions, knowing the moment to strike, and harpooning a greater fool. Moreover, you are the rarest of Canadians – a woman happy to r-r-rent. Hold me.

How long should you plan to stay there? Aim for three years, Mrs.B. Vancouver will shed sales until Christmas, with the next leg down in prices hitting in the new year. If you see average values falling by 20%, don’t be tempted to jump back in since it’ll be nothing but a bull trap. After a few more months, the decline will continue, and it could easily last a couple of years. I’ll tell you when to pounce.

As for that bag of money, hire a smart guy to manage is. Just because you’re a mercenary, succulent real estate goddess doesn’t mean you can manage your own investment portfolio. Buying an apartment building income stream in Ontario is one possibility, but wouldn’t it be easier to have a blue-chip, income-spewing, income-splitting joint investment account stuffed with bank preferreds, dividend ETFs, quality REITs and a dash of high-yield bonds? If you score just 6%, then a million throws off $340,000 in five years.

You will grow more desirable with each zero.

162 comments ↓

#1 American Werewolf in BC on 07.12.12 at 9:37 pm

I get the feeling we won’t be seeing a significant bull trap in Vancouver because everyone will be rushing to the exits in panic. That market is just way, way too far gone. Time will tell.

#2 Westernman on 07.12.12 at 9:41 pm

firsssssssssssst!!

Is this storm trooper thing? — Garth

#3 fancy_pants on 07.12.12 at 9:43 pm

unusual evening post for me, not sure what to make of this regarding any impact on the RE scene; must be worse down there than we realize

http://ca.news.yahoo.com/blogs/canada-politics/americans-moving-canada-record-numbers-report-161857845.html

#4 pathcontrolmonk on 07.12.12 at 9:44 pm

We havent even see the bear rally yet, and the media is already trying to convince people this is a buyers market.

Realtor quote of the week from Victoria, “New price is $ 624,800 this reduction is to reflect any alterations the buyer may wish to make to the home. ” As opposed to buyers just thinking the seller is desperate.

#5 Keeping the Faith on 07.12.12 at 9:45 pm

Leesa,
Sell and don’t look back.
renting will pay you more if you invest your money wisely, learn the meaning of ‘couch potato’ you will still need to add to your investments while renting but you won’t be at the mercy of the RE market. No other option, check your RE ego at the door.

Mrs. Bold,
Good for you.
Truly, Good for you.
You should be proud and also humble. Humble enough to spend time learning how to invest your money. Don’t just turn it over to a financial advisor because they came as a good reference. Unless the reference is from Warren Buffet, then question it. DO your due diligence and learn about investments, real investments that pay you. Not just ones that people brag about at dinners out. 5 years ago RIM was the centre of that bragging. 5 years from now we will be saying the same thing about TO investment condos.

Good luck to all and to all a good night!

#6 Toronto_CA on 07.12.12 at 9:47 pm

An interesting post today by the guy who is tracking the Vancouver price drops, re: the $1mil CMHC changes:

Homes that are listed for $1.1 million are now missing a huge chunk of potential buyers and many are listing for $999K as the data below shows but this cascades through all prices. Homes that were listed at $995K before now need to go below $900K to avoid competing with these newly dropped homes. Those drops force lower priced homes to drop and so on. It also affects prices above $1 million. That $1.3 million home isn’t looking much better than the $999K home so it drops to $1.2 million. Now those $1.5 million homes are looking out of place and they adjust and that continues all the way up at least until you start getting into the higher priced listings where rationality in most cases isn’t a consideration anyways.

http://vancouverpricedrop.wordpress.com/2012/07/12/just-under-a-million-july-12-2012/

I guess I never considered the cascade affect that people dropping the home value to $999k would have, but the evidence seems to be right there in his stats.

I wonder if Toronto will experience anything like that.

#7 Just Park It on 07.12.12 at 9:48 pm

One thing most bloggers in here seem to overlook. There are masses of homeowners like myself, who like myself have shaved years off the mortgage monster and have only a few years remaining. We have been given a golden opportunity on financing with ultra low rates that probably won’t return for decades..yes, my old man use to tell me how in the early 80’s, 1st and 2nd mortgages were the norm, 11%-12% rates made you feel blessed.

So, I enjoy the remaining years of my mortgage with a locked in, juicy 2.89%…bought before the market lost it’s bearings – prices may have doubled, but I am loving where we live – mortgage free is just a skip away – and though some will hiss that being liquid is having cash – but I say – what if..just a thought, the world goes into a financial crisis (I know, that’s just crazy talk) and the currencies around the world become worthless toilet paper – hard assets will rule. Money won’t keep you warm at night if those digital numbers all of a sudden get wiped out.

I agree buying today is insane, but the blog dogs forget that there are legions of homeowners who are living mortgage free, investing in themselves and have the same long term investment strategy .. so the market drops .. big deal – I am in for the long haul…I came to terms that dedication and commitment will always prevail, and I climbed my own Everest and watching all the rest scramble below me.

#8 T.O. Bubble Boy on 07.12.12 at 9:52 pm

Mrs. Bold is my hero.

#9 OlderbutWiser on 07.12.12 at 9:53 pm

Hahahah…what a great pic. Look out for slow mooo-ving objects!

#10 Victoria Tea Party on 07.12.12 at 9:54 pm

RACE TO THE BOTTOM…INDEED: IT’S RISKY OUT THERE, CLASS!

That (above) infamous left-wing phrase can now be safely purloined by armchair economists and business fans everywhere, as well!

Because the RTTB is happening big-time.

CHECK THIS OUT

In the week or two just gone by: China, Britain, some EU countries, and today, Brazil and South Korea have now all piled into the Lower Central Bank Rate Club. Other countries have kept their low rates as is including Canada and the US.

A “currency war” is what this alignment is aka.

This “war” is the single most dangerous economic disruption known to man because, simply, currencies are the bed rock of our monetary systems.

Currency Wars, is also the title of a book penned by James Richards, an internationally-respected American investment banker with a long list of amazing economically-significant creds.

I read his book a year ago, and here is a quote from the publisher about same:

“…Currency wars are one of the most destructive and feared outcomes in international economics. At best, they offer the sorry spectacle of countries’ stealing growth from their trading partners. At worst, they degenerate into sequential bouts of inflation, recession, retaliation, and sometimes actual violence. Left unchecked, the next currency war could lead to a crisis worse than the panic of 2008.

Currency wars have happened before—twice in the last century alone—and they always end badly. Time and again, paper currencies have collapsed, assets have been frozen, gold has been confiscated, and capital controls have been imposed. And the next crash is overdue. Recent headlines about the debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are all indicators of the growing conflict.

As James Rickards argues in Currency Wars, this is more than just a concern for economists and investors.

The United States is facing serious threats to its national security, from clandestine gold purchases by China to the hidden agendas of sovereign wealth funds. Greater than any single threat is the very real danger of the collapse of the dollar itself…”

ANOTHER RTTB SIGN

Other clear signs of this race to the bottom, best-found in the giant bond markets, are recent decisions by Holland, Germany, the US, and others to sell their shorter-term sovereign bonds at NEGATIVE REAL INTEREST RATES!

In other words, investors are prepared to “park” their money for up to two years and pay the sovereign entity a “price” for the privilege!
It means they view currencies as being increasingly unsustainable.

Many other investors are buying and selling gold and silver bullion, coins and jewellery in a confused market right now where prices are all over the map. That’s
ALSO a sign of PANIC.

As well, the less important stock markets are also getting it in the neck, part of the overall picture of financial destruction.

This is the pits!

BUT: THE MAIN EVENT EU – VS – US!!

The main event, of course, is the push-me-pull-you tug-fest between the collapsing (sometimes) euro and the ascending (sometimes USD).

Higher currencies ALSO invite trade wars as countries try to discount their more valuable currency as compared to a competitor’s whose goods and services have now become cheaper in the eyes of their consumers.

This push and pull is debilitiating and it exhausts the players leaving their economies always vulnerable to further “attacks” from other players.

NO START DATE AND NO SHELTER

Rickard’s book sets no date for the ABSOLUTE outbreak of such a war, but the “generals” (banksters everywhere) are lining up their ammo, pieces of “paper” representing their sovereign currencies, and are preparing for this ultimate dust-up at the OK Corral.
OK Corral, clearing out of Dodge, it doesn’t matter.

There’s no escape once this baby is launched. NONE.

A currency war dwarfs all other financial debacles, makes ’em look like misdemeanours.

As such debt-addled people and representatives of corporations and governments, may want to read Rickard’s book NOW.

Because, I think, that now is about all the time we’ve got left before this monster’s fearsome tail takes us all out.

As an example in Canada: pity the Hog Town condo crowd and Vancouver’s Metro-freaks crawling about on the underbelly of our Wet Coast.

May they all go coastal!

Get what they deserve.

#11 Johnny D on 07.12.12 at 9:55 pm

Great article as usual. Still looking forward to an article focusing on Regina or Sask in general. Was wondering what you think about the linked corruption in real estate, construction, politics and media and what tricks might be pulled to try keep this bullsh*t alive. I think it’s a real problem here in particular.

#12 First to last on 07.12.12 at 9:59 pm

Sell it all and come visit me in Italia

#13 Grim Reaper/Crypt Speculator on 07.12.12 at 9:59 pm

May Alllah be with them.
=========================

This deity name has (2) L’s..not (3)…dumbkopf.

Alzheimers is a harvestable parameter.

PS I get Double Air Miles this weekend.

#14 cramar on 07.12.12 at 10:03 pm

http://www.facebook.com/photo.php?fbid=357504807653316&set=a.208994629171002.49708.208877045849427&type=1&ref=nf

#15 Easternman on 07.12.12 at 10:11 pm

Man…glad I own RE in the Maritimes. Steady as she goes – it’s different here.

Sooo much risk out west in RE…sounds like Mrs Bold made like a bandit with her sale. Glad I’m not the guy on the other end of that deal.

#16 armpit on 07.12.12 at 10:19 pm

Garth… blog…the Spousal RRSP attribution rules apply to all deposits made within three years.

In other words….the spouse should stop making any Spousal RRSP deposits for the three years, before the recipient may withdraw the funds under his/her tax bracket.

http://canadianaccountanttips.blogspot.ca/2011/04/spousal-rrsp-withdrawal-rules.html

Nope. Spousal contributions can continue. You just can’t withdraw (without attribution) money which was contributed in the year of withdrawal or the two previous ones. — Garth

#17 Market Bull on 07.12.12 at 10:32 pm

Yup, all those recent no money down unqualified Canadian home buyers are really making a mess of their finances.

Hang on, the latest mortgage default numbers are just out:

Wait for it – 0.34% (the lowest in 4 years).

http://cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

Yeah, yeah, I know – everyone’s paying their mortgage with their HELOC. Except that all those “unqualified” buyers with low down payments don’t qualify for a HELOC.

Oh well, there must be another bogus theory to explain it all.

#18 Retired Boomer - WI on 07.12.12 at 10:40 pm

Wow!!! The smart cash out at the top. The Quick buy there. As an old fart now retired let me be the FIRST to say what a pleasure it is to have NO mortgage, NO car payments, NO credit card stuff either.

Of course, we built the home 16 years ago now, and now repainted, new carpets, and the general BS upkeep. $800 a month for taxes utilities, maint, and insurance just to live here “FREE” that will take a decent retirement nut to support. I’m kind of high maintenance too, you see.

Would I buy a home today say if I were twenty something? Hell YES, mortgage money in the US under 4% 30 yr fixed, with 20% down, and pay it as a 15 yr fixed… in a NY minute.
Would I be yesterday’s Carl? Not on a BET!!!

As an old guy retired now, with just 600k in investments life might be good if investments are OK, but could get crappy if we enter a zero return world for too long. So far so good. Income stream looking to be around 60k.
That buys good food, booze, trips, and other stuff.

What I do NOT understand is the young stringing credit to dangerous levels relative to their income? Come now, making say 50K as a single is ok, double that for a married couple fine, too, but then thinking about RE with no 20% down, NO emergency fund, no plan to put 15% into your retirement planning, what ARE you planning for, besides a mess at the first OOPS in life. THAT will happen trust me!

Car crash, unplanned kids, job loss, whatever. Stuff happens. PLAN for it.

The world may take some cruel turns in the next decade.
WE might run out of Brandy, tobacco, or tax cuts!!!

Think long before you sign up for DEBT. I don’t like DEBT, and now I don’t need DEBT. I like my investments to return 5-10% a year as ‘rent’ on my invested money.
thank you. There is NOT a get rich quick plan I have ever seen that works over time. Get rich slowly, and keep some of it the rest of your life, but give it away so you can die broke. Sorry, you can’t take it with you…no U Hauls behind the hearse!

#19 blase on 07.12.12 at 10:43 pm

Easternman,

What city are you in? There are definitely some bubbles out in the Maritimes too. Just saying.

#20 Bill Gable on 07.12.12 at 10:49 pm

Suggestion to our fortiish pal in Burnaby.

Do this. Write Garth another letter. Because of modesty, let me say it…Mr. T. and his partner Scott, take care of our money.
I shan’t make Mr. Turner blush, but he is not only smart, and, a nice fella, but he manages on a fee basis, and actually gives a damn about his clients.
Mr. Turner could hang with his Amazonian tribe and ride his Harley, and take it easy…but instead his crusade to save people from making tragic financial errors, make me an unabashed fan.

This is not a commercial. It’s just my opinion. Because of health issues, my Lawyer knows that Garth and Scott will also be there for my wife and son. If I am not going to be around, I can rest easy, knowing that Garth and Scott will be there for those I love.

He doesn’t hype. He just works his tail off to protect his clients.

This is no time to upgrade into a 400 k piece of crap, made with chipboard and glue.

It is a time to be liquid and diversified and r e n t.

Commercial over. Hope you get the message.

Don’t blush, Garth. I speak the truth. Ne Plus Ultra.

Besides, Garth has a wicked sense of humour, that has literally gotten me through some very tough days.

Now, if he was PM, I would be happy, but I wouldn’t have he and Scott taking care of us.

Nuff said

#21 CapeBretonFugitive on 07.12.12 at 10:56 pm

#15 Easternman I wouldn’t be too sure on that. Viewpoint.ca paints a different picture. Startling number of “New Prices” and 95% of them are price drops. At least in the Halifax and surrounding areas. I’m sure you can still get a sweet deal on a 2 BR in the teen pregnancy capital of New Waterford.

#22 furst on 07.12.12 at 10:56 pm

2016, a real estate Odyssey – a poem by furst

A large flying ship, orbits the earth
Inhabited by the enlightened, with high net worth
Led by the named one, Lord Garth Vader
Who ignited the rebellion, the anti real-estate crusader

At first, his followers were few and far between
His enemies, shouted phrases loud and obscene
But he led his people, sharing wisdom via blog
A daily grind, an arduous slog

Most ignored, but some had listened
They turned away from counter tops that glistened
Rented instead, for half the amount
A premium on freedom, a larger bank account

In 2012, property prices made a small turn
Premonition to something much larger, 2013 would burn
Prices fell, home owners turned sour
The shunned renters, rose up and came to power

Garth Vader, the leader of renters stood tall
He called his people and said you shall not fall
For I was righteous and led you true
With no mortgages, we shall use our cash in lieu
To build a star ship and escape this land
Writing a real estate blog has become so bland

Garth and his renters flew off into space
Home owners stuck on earth, they had no saving grace
We look at earth below, from our ship way up high
For the property virgins, my heart does cry

If only they listened to the bearded oracle
His posts written with whimsy but full-on allegorical
Now we can only pray for those left behind
The greater fools, became the last of mankind

#23 T.O. Bubble Boy on 07.12.12 at 10:57 pm

@ #17 Market Bull
Yup, all those recent no money down unqualified Canadian home buyers are really making a mess of their finances.

Hang on, the latest mortgage default numbers are just out:

Wait for it – 0.34% (the lowest in 4 years).

Why would mortgage defaults be happening when prices have been rising 5%-10% a year?

Just wait for 2013 and beyond — this number will look much different.

#24 cramar on 07.12.12 at 10:59 pm

#18 Retired Boomer – WI on 07.12.12 at 10:40 pm

I’m totally with you on this! But your $800/month sans mortgage is better than those paying $1800 or $2800 to rent and still paying utilities and content insurance on top.

#25 T.O. Bubble Boy on 07.12.12 at 11:01 pm

Also for Market Bull… you know that there are a lot of stressed households out there when things like this Craigslist ad show up all over the place (I also hear debt consolidation ads on the radio every single day):

http://toronto.en.craigslist.ca/tor/sbw/3117865724.html

#26 NotAGreaterFool on 07.12.12 at 11:04 pm

Credit unions escape new mortage rules

http://business.financialpost.com/2012/07/12/credit-unions-escape-new-mortage-rules/

Garth – Will the FEDS seek to have credit unions fall under it’s jurisdiction or look to have Provinces apply the OSFI rules? Will they close the back door?

The CU share of the mortgage market is too small to matter. — Garth

#27 Toon Town Boomer on 07.12.12 at 11:10 pm

How long of a wait for the average price to start falling Saskatoon ?

#28 blobby on 07.12.12 at 11:10 pm

Leesa – listen to Garths advice… and if you do… We’re on the same page… Any chance you can get Garth to email me your phone number?

#29 TNT on 07.12.12 at 11:11 pm

Retired Boomer.

These wanna be’s are just doing what they have been brained washed to do through years of mind control. Global Agenda TV for example. What to wear, where to live, live it up, up the creek.

#30 John on 07.12.12 at 11:21 pm

” If you score just 6%, then a million throws off $340,000 in five years.

You will grow more desirable with each zero.”
————

Anyone think this one’s worth a real chew? A legit, serious one? I do.

That desirability and zero thing is aaaaaall tied up. The ponzi owners don’t let muppets win at the tables. They well know where the zero’s come from, because they cooked them up.

And you have to ignore the facts to not know what that means. This has been going on in plain view for quite a wee while now.

On the zero’s. Let’s talk pathological. As the ponzi operators on the inside see the zero’s mount, they get impacted the same way a guy with a betting obsession does. It’s dopamine rush after dopamine rush…causing hypofrontality. The frontal lobe receptors turtle-up, denial goes through the roof and a very inaccurate view of power takes hold. It must be unreal to be above the law, nations, and other people. Drunk on power. To be astronomically BETTER than ordinary folk. To have the game locked up.

Many with expanding zeros believe that. It’s exciting. What a RACKET. They pulled it off.

An over-priced North Van house ( in 2003) blows out to a greater fool in 2012. A cool million. The result of a derivatives fraud. Then the muppet “pardners up” with the junkies for some smack…1.4 million bucks by 2017.

Money for nothin’, chicks for free.

Why is this not possible? Demographics are enough to make that obvious, but let’s play pretend and say nothing about that. It doesn’t exist. Next.

Let’s stick to CLASS DYNAMICS, and pretend dupes and suckers underneath are in limitless supply. How long could Canada hold up the lie of democracy and the “sibling society” after allowing a “select group of muppets” to take a million of the mafia’s money…times hundreds of thousands. Impossible.

Why would they ( the ponzi bosses) need to let the muppets keep the ” net worth?”. They need ALL the zeros…that’s the point. The game now is a TRANSFER of wealth from the deluded middle class to their owners.

Ever heard the junkie axiom “one is too many and a thousand is never enough”? It applies…as is overwhelmingly obvious.

And with the incredible class division that would occur, underclass muppets would not work for overlords who “lucked out”. Consider the societal dynamics at all levels. It’s simply not sustainable, and it’s almost absurd to have to spell it out.

I think you need a dog. — Garth

#31 Randman on 07.12.12 at 11:24 pm

Hey Victoria Tea …

Thanks for posting about Jim R but most people will just……
yawn and scroll over your post to look at the latest feud between Westernman ,John G, and penpal

People just don’t want to hear it…just like they don’t want to hear about R.E. crashing

The entire economic system needs..’ A Noah Moment”

how about this quotable gem from Karl Denninger….

“We must stop the stupid right now!

Arithmetic is a bitch. It’s politically agnostic and cold-hearted. Exponential growth, as I have repeatedly pointed out, is utterly unsustainable over the long term. It doesn’t matter if you want these sorts of schemes to work or not; the longer you continue to pretend that there is some path forward that achieves these goals the worse the outcome is when you discover that you’re wrong.”

Scary …and for Garth…the link

http://endoftheamericandream.com/archives/19-warnings-about-a-coming-global-financial-catastrophe

Enjoy the collapse. — Garth

#32 CriticalQ on 07.12.12 at 11:25 pm

Hey Garth love the blog, just a couple of comments regarding REIT’s for the ones that are sitting with good cash flow. Focus on apartment REIT’s because when the SHTF (really bad) everyone will be looking for apartments to rent. And for those with good brokers, shorting banks would be a good idea also.

#33 Mr Buyer on 07.12.12 at 11:27 pm

#27 Toon Town Boomer on 07.12.12 at 11:10 pm
How long of a wait for the average price to start falling Saskatoon ?
…………………………………………….
Either 47 days, 18 hours, 27 seconds from exactly 12:25 pm July 13th 2012 Osaka time OR whenever they start dropping. If you have any others similar concerns feel free to ask.

#34 a prairie dawg on 07.12.12 at 11:37 pm

#26 NotAGreaterFool on 07.12.12 at 11:04 pm

Credit unions escape new mortage rules

– — –

That story was pure spin. They make it sound like a huge loophole, but end it with this:

“The B.C. Financial Institutions Commission is currently conducting a review of its mortgage rules, according to Doug Mclean, the deputy superintendent.

“We are concerned about the current level of consumer debt in the province and we want to ensure that credit unions are following prudent underwriting practices,” said Mr. Mclean.

In most cases the provincial regulators follow pretty much in step with OSFI so any significant loopholes will likely get closed over time, analysts said.

The new OSFI guidelines “all sound very reasonable and I would expect the credit unions would [already] be following them,” said Helmut Pastrick, chief economist for Central 1 Credit Union, the industry association for credit unions in British Columbia and Ontario.”

#35 Freedom First on 07.12.12 at 11:39 pm

Garth…….great post tonight! Thank you!

#36 Mr Buyer on 07.12.12 at 11:40 pm

#17 Market Bull on 07.12.12 at 10:32 pm
Yup, all those recent no money down unqualified Canadian home buyers are really making a mess of their finances.

Hang on, the latest mortgage default numbers are just out:

Wait for it – 0.34% (the lowest in 4 years).

http://cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

Yeah, yeah, I know – everyone’s paying their mortgage with their HELOC. Except that all those “unqualified” buyers with low down payments don’t qualify for a HELOC.

Oh well, there must be another bogus theory to explain it all.
………………………………………………………..
Wait a minute, it is comig to me now. I bet it is time to BUY real estate isn’t it Mr BULL. Nobody is defaulting on their loans so that means I should BUY. Is that correct? How exactly does nobody defaulting on their loans make RE more affordable I do not know. Maybe because it means everything is Okay and thus will continue to be okay and thus prices will continue rising and thus I should BUY now thus avoiding being priced out forever and thus I can sell to somebody later. Wait a minute, if I should buy now to avoid being priced out forever doesn’t that mean at some point everybody will be priced out forever? How does nobody defaulting change that logical inference? I am awaiting more of your BULL to help me sleep at night under the mountain of debt you would like me to assume so you can collect your commission.

#37 Grim Reaper/Crypt Speculator on 07.12.12 at 11:46 pm

Listen…

This is going to be “JUBILEE ” weekend.

(NOTE: if don’t know what JUBILEE means, you are forever doomed to live East of LoserPeg)

Send your application to my Nigerian Banker…and don’t forget to submit the appropriate info.

#38 John G. Young on 07.12.12 at 11:48 pm

#31 Randman on 07.12.12 at 11:24 pm

“Thanks for posting about Jim R but most people will just……
yawn and scroll over your post to look at the latest feud between Westernman ,John G, and penpal…”

If that is true, then those people definitely need to get lives.

Cheers,

John

#39 a prairie dawg on 07.12.12 at 11:59 pm

#17 Market Bull

Just noticed that your name is contained in:

“R.E. Market Bullshit”

What a coincidence…

#40 Canadian Watchdog on 07.13.12 at 12:16 am

#36 Mr Buyer #25 T.O. Bubble Boy

Here’s one reason why delinquencies are low http://www.genworth.ca/homeownership/c_on-your-terms/HomeownershipWeek_Friday.asp

And the after-effect of paying peoples mortgages for free. http://tmx.quotemedia.com/charting.php?qm_page=97896&qm_symbol=MIC

#41 Nostradamus Le Mad Vlad on 07.13.12 at 12:25 am


“You will grow more desirable with each zero. I am now aroused. Hold me. Say, would you like to borrow Carl? What a magnificent specimen you are. I’ll tell you when to pounce.”

A veritable mountain of words, lost in the eccentric cornucopia of a column. Still, an excellent form of classical poetry in motion, esp. with a return of $340K after five years. Better than winning a lottery? You bet, ‘coz there ain’t no publicity attached to it.

#10 Victoria Tea Party — “A “currency war” is what this alignment is aka.” — Good post. Would these have anything to do with it? Gold, US and China looking for a fight in the SCSea, and US – Iran When Russia joins in, that will be interesting.

The currency and physical wars are precursors to one another, because as there is so much crap currently happening in the world, it stands to reason that TPTB would be involved in manipulating PMs, Libor, currencies etc., and the average Joe doesn’t have a clue as to what’s going on.

That’s why most of us will be caught with our pants down, at the worst possible moment (‘tho not here).
*

Euro — Going down; Mtge. Minefield The only good mtge. is a dead mtge.; Barclays Fall out starting? Pensioning off Austerity; Marvin Traub Adios to a retail genius; The Four Horsemen of an economy in disarray; Central Banks No ideas, no inventiveness; Time Bomb in slo-mo; New Food Crisis Just when we thought it was all over; Oil Still around.
*
Saturday Night Beaver Not Justin, John Travolta; Russia Curbing the ‘net; Words For The UN and Agenda 21.

#42 Jonno on 07.13.12 at 12:38 am

I met My realtor in the elevator today he sold my place and I have been renting a nicer Unit for 1700 much less than my mortgage. He said you never called me back about buying And I said I would just rent a few years and see where the market goes. He said you are wasting your money! I said lets see I will call you in a couple years he gave me his card we both smiled thinking each other was wrong and just as he got off the elevator he said you are probably right prices are dropping just sit then call me…

#43 Jody on 07.13.12 at 12:53 am

My God, who keeps breeding these people with more money than sense? Or maybe it’s just the government schools. Hi Garth, I have $700,000 in savings and make $300,000 a year, what should I do? Give it to me. I sure in da hell hope these people don’t have a job that requires them to do something to insure we all stay alive, bloody hell.

#44 Van grrl on 07.13.12 at 12:58 am

“I am a 40’s single female, no kids, with an income of $90,000. I have $95,000 in RRSP, and $60,000 in savings/TFSA.”

And I am f’n jealous of you, damn!!

Buy property in Europe, get a few dogs, live happily ever after :)

#45 Patz on 07.13.12 at 1:01 am

Hey John #30, like the cut of your jibe.

You’ve nailed the real rules of the game. But muppets being muppets will always try and get ahead it’s what helps the ponzi bosses rake it in. Guy goes to a casino has a streak of luck and hits the jackpot for a 1 or 2 and lots of zeros. He walks away and lives happily ever after right?

Doesn’t happen. Next morning he’s back at the tables, missed his flight home and is going to run up an even bigger pot. Send in the clowns.

Uh, I don’t need a dog I’ve got a whack cat!

#46 Van grrl on 07.13.12 at 1:03 am

Garth to John:

“I think you need a dog”

If male, better make that unneutered ;0

#47 Not 1st on 07.13.12 at 1:23 am

Garth I want vultch Calgary. When’s it gonna happen?

#48 Aaron - Melbourne on 07.13.12 at 1:36 am

China won’t save us, the books are cooked. The chefs are making HAM.

http://www.theage.com.au/business/cracking-the-china-numbers-puzzle-20120713-21zwq.html

Regulatory agencies also noticed suspicious movements in the sharemarket before important central bank interest rate announcements.

An investigation was launched and resulted in the arrest and conviction of central bank and bureau of statistics officials and investment bankers.

The investigation reveals some tantalising details about the trade in classified economic data.

“A set of official economic data can fetch you anywhere between 400,000 and 500,000 yuan (between $60,000 and $70,000),” an unnamed persecutor told Chinese media.

#49 Doug in Victoria on 07.13.12 at 1:40 am

#24 cramar

Even a 2 or 3% secure return on the half million+ cash it would take to own a similar home is enough to offset the cost differential of renting/util/insurance with no maintence time/cost liability. At least in the big cities.

Financial/geographical/employment freedom. What’s that worth? Buying is so 00’s.

#50 soho ne on 07.13.12 at 1:46 am

went to see a open house in richmond.1hundred g’s under assesed value.realtor called to say they had a offer.i said i was not interested.BYE.

#51 An Cat Dubh on 07.13.12 at 2:17 am

In the time of deciet, telling the truth is a revolutionary act. Alot of posters had family and friends pressuring to buy. You didn’t. Now you are vindicated. Here is an interesting clip about Okanagan foreclosures.
http://greenzonetv.info/video/world-/-kelowna-real-estate-forclosures—okanagan-bubble-burst—youtube/

#52 VanCity Gal on 07.13.12 at 2:25 am

Garth, you always talk about ETFs and REITs but every advisor will tell you they’re too risky for short-term investing. I’m in my late 20’s and I went to open a TFSA. The money I’m putting away will be used as a downpayment in 3-5 years (I live in Vancouver, waiting for the crash).

But no advisor would let me invest in ETFs or REITs if I’m planning on taking the money out in such a short time. I had to fight them to let me invest in anything other than GICs or short-term bonds. They told me the SEC makes you fill out a form and if my goals do not align with my investments, then the advisor would not be allowed to invest that money.

So what do I do? I find most of the investments you talk about are for long-term retirement, but what about shorter term (2-5-10 years)???

Stop asking for investment advice at the bank. You are getting biased, ignorant advice. And the SEC is American. — Garth

#53 gmc on 07.13.12 at 3:48 am

Hey Garth
what about 16% in the bank, yes thats correct, my friend works in the mines in Mongolia and they are offering 16% to put your money there, they have huge developments and need capital.
and why not gold or silver, via Central Fund Of Canada or Sprott Shaw silver account, you fail,
I took your advice back in 2008, but also invested in gold, It still baffle’s me why you do not mention god solid blue chip gold Canadian companies, Gold Corp, Agnico Eagle etc… all pay dividends??????
please explain.
gmc

#54 Buy? Curious? on 07.13.12 at 4:27 am

Advising the Ladies/Groupies, Garth? I know where EXACTLY you’re coming from. One time, I was with these friends of mine, on our way to a BBQ, and we were talking about how they felt their current house was way too small. Then we stopped in at The Beer Store and my buddy pops in to get a case of Laker, but the premium kind. As he shuts the door, she turns to me and says, “If he doesn’t buy a bigger house soon, I’m taking the kids and leaving him.” I thought that was code for wanting to have an affair but she really did just want a bigger house. I told her to hold out on the sexy sexy until he caved in, hoping that in a few weeks she’d show up on my doorstep with nothing but a raincoat and a smile. It didn’t happen, unfortunately. They eventually bought a bigger place but my buddy and I no longer hang out because he works crazy overtime and has a part time job on the weekend. Or that’s what he says the reason is. It’s too bad. I’ve taken up Zumba classes.

http://www.youtube.com/watch?v=EOzxvVjJOOw&feature=relmfu

#55 Timbo on 07.13.12 at 5:14 am

http://news.xinhuanet.com/english/china/2012-07/13/c_131713073.htm

“China’s economy expanded 7.6 percent year-on-year in the second quarter of 2012, slowing from 8.1 percent in the first quarter, the National Bureau of Statistics (NBS) said Friday.

The figure, which marked the sixth consecutive quarter of decline, revealed the slowest growth pace since the first quarter of 2009 and was within market expectation of below 8 percent.”

Slowing down but not crashing. Re-arrange the deck chairs and order more wine…………….

http://www.bloomberg.com/news/2012-07-13/italy-s-bond-rating-cut-by-moody-s-on-contagion-funding-risks.html

“Italy’s bond rating was cut two levels by Moody’s Investors Service hours before a sale of more than 5 billion euros ($6.1 billion) of debt as the financial crisis threatens to cut off market funding to the euro area’s third-biggest economy.

The ratings company lowered Italy’s government bond rating to Baa2 from A3 and said further downgrading is possible, according to a statement released in Frankfurt today. That’s two levels above junk and one above Spain, according to data compiled by Bloomberg. ”

2 steps away from the junk yard. Friday should be interesting…………..

#56 Questioning Calgary stats on 07.13.12 at 5:53 am

#17 Market Bull

You really don’t get it. The new mortgage rules that have been and will soon be implemented will bring prices down in Canada. The high risk, low down payment crowd that you speak of will be underwater in no time as soon as these rule changes start to take their toll.

It is doubtful that you will be bringing up the mortgage default numbers 6 months from now.

#57 Aussie Roy on 07.13.12 at 6:35 am

Aussie Headlines

Aussie RE TV porn “The Block” debunked by MSM

Newsflash: Reality TV does not reflect reality

And following last year’s pricing debacle, the reserves were set so low as to virtually guarantee competition and sales because the properties were effectively available for below what they cost to purchase before the renovations.

http://theage.domain.com.au/home-investor-centre/blogs/domain-investor-centre-blog/debunking-the-block-20120712-21y3l.html

RE article “5% fall in house prices”

Pulled from MSM 2 hours after being published

http://i.imgur.com/8kKrD.jpg

NSW, Victoria post biggest drop in house prices

http://smh.domain.com.au/real-estate-news/nsw-victoria-post-biggest-drop-in-house-prices-20120712-21yxs.html

#58 Aussie Roy on 07.13.12 at 6:43 am

Questioning Calgary stats

on 07.13.12 at 5:53 am
#17 Market Bull

“Defaults are low”

You really don’t get it.
………………………………………………………………………..

Clearly he has no idea, defaults are a lagging indicator, don’t take my word for it check out the stats for any burst bubble market. Defaults only rise AFTER prices being to fall.

While you are checking that “Market Bull” can you see any forward indicators, maybe like stock on market or falling mortgage demand?.

You know some indicator that you can actually back up with data from a known bubbled market?.

I hate to say it, but by looking in the rear view mirror (thinking you are looking forward) only assures you will run into the wall at top speed, good luck with that.

#59 John on 07.13.12 at 6:48 am

And with the incredible class division that would occur, underclass muppets would not work for overlords who “lucked out”. Consider the societal dynamics at all levels. It’s simply not sustainable, and it’s almost absurd to have to spell it out.

I think you need a dog. — Garth
—————

Ok, but 2 months ago the debate included “Mark Carney and interest rates”. Things have progressed.

The above might be “worst case”, and a lot can happen to change the game, but it helps to throw out a “sharp turn” to get the discussion moving forward.

I just think your take on what to do with “equity” in real estate needs to be freshened up. You might be forced to trash it in certain scenarios. Anything can happen…we’re talking about people.

History contains a lot of “themes”, many of which are emerging right now.

#60 JO on 07.13.12 at 7:11 am

I love dividend paying investments and work in financial services. Met with a client who is top level private equity guy and he told me to be careful as people at the highest level (including people connected to gov’t) suspect an extra dividend tax of maybe 20 % is on the table and will likely be implemented at some point in the next couple of years…nothing official but they seem to think it is inevitable.

This would be a most unfair tax on anyone making under $ 150,000-200K / year. Scumbag politicians trying to come after the 50 % they don’t already have to squander even more on interest from past debts and more debts in a desperate bid to keep the debt bubble economy going.
JO

#61 Fred on 07.13.12 at 7:47 am

Jonno #42 “just as he got off the elevator he said you are probably right prices are dropping just sit then call me…”

That was a smart salesman letting his customer know that he knows the customer is always right.

#62 TurnerNation on 07.13.12 at 7:58 am

#22furst on 07.12.12 at 10:56 pm

Yes, awaiting the spaceships’s flight to planet TurnerNation. Where stern risk managers and amazons with an intensive breeding program – to revive their dying race – await.

#63 Stoopid on 07.13.12 at 8:15 am

Cheers, Mrs. Bold
Please consider the track record of GSA. http://www.goldstockanalyst.com/ down load his independent auditors report. They say that a healthy portfolio has at least 10% gold weighting. I have been with John for twelve years and am happy with his results. Garth has made money in Gold but I’m under the impression he is no longer a fan? As to why of late I know not given the deteriorating conditions since 2006 or 8, not sure when again. I would also stay away from energy as 22 of the 88 million barrels a day produced are consumed by 5% of the world populous. This could create demand destruction pronto in a drop due to any down turn or say absence of growth. Stay Garths course and you’ll know the bottom when you see it (it will look like blood in the street’s and your bowls will have turned to liquid) Is it the end of the world? Course not, just the end of monetary system, we have done this before. Just history repeating itself. The manipulation of the LIBOR should be proof enough that they want to implode the system. There are no conspiracy’s… it’s just Math. Please do your D&D

“Those who cannot remember the past are condemned to repeat it.” – George Santayana

“Those who invest based on doomer web sites are idiots.” — Garth

#64 real estate bear on 07.13.12 at 8:24 am

TO mr market bull. The defaults wont increase untill the people who get themselves into financial trouble cannot pass on their debts to a greater fool. First sales slow, then prices drop, then people cannot bail themselves out, then bankruptcy follows, Why is this so hard to understand.

#65 kegpeg on 07.13.12 at 8:27 am

Credit Unions will still need to follow the new OSFI guidelines for all CMHC insured loans which puts new home buyers on a level playing field.

Also not implementing the new rules could mean a financial institution will no longer have access to other CMHC products/services in the future.

#66 rosie on 07.13.12 at 8:36 am

#20 Bill Gable

Ditto.

#67 furst on 07.13.12 at 8:42 am

#62 TurnerNation on 07.13.12 at 7:58 am

Yes, awaiting the spaceships’s flight to planet TurnerNation. Where stern risk managers and amazons with an intensive breeding program – to revive their dying race – await.

Make no mistake, rebuilding a population will be hard work but someone must do it. I’ll be the first to volunteer in the breeding program. One must lead by example.

#68 Harry Palms on 07.13.12 at 8:42 am

#227 Bond junkie on 07.12.12 at 2:41 pm
Oh poor Carl, first rule of the beach is that there’s no such thing as the Upper Beach (it’s called Scarborough).

Actually that mess of row houses to the North is East Toronto, and then East York if you’re into the Upper-Upper-Upper Beaches.

If you go East, past Victoria Park, it’s Scarborough, but there’s no beach. I’m not Bluffing either.

#69 Stoopid on 07.13.12 at 8:42 am

Jonno,
Relators are pimps for houses…. They don’t care if markets go up or down. They make money in either direction

#70 Grantmi on 07.13.12 at 9:02 am

#11 Johnny D on 07.12.12 at 9:55 pm

Great article as usual. Still looking forward to an article focusing on Regina or Sask in general.

Garth just did. That photo was for you guys living in the Bush!!.

#71 Toronto_CA on 07.13.12 at 9:14 am

#69 Stoopid on 07.13.12 at 8:42 am

In a sense you’re correct, but Realturds do care if houses aren’t selling. When prices are going down every month people wait to buy (see America, United States of) and this means no commissions for the pimps. So they do have a vested interest in making people think it is a good time to buy, whether the market is going up or down. It’s never a bad time to buy if you’re a Realturd.

Side note, what a useless, awful profession. I have more respect for used car salesmen.

#72 Grantmi on 07.13.12 at 9:21 am

#25 T.O. Bubble Boy on 07.12.12 at 11:01 pm
(I also hear debt consolidation ads on the radio every single day)

Every Day?? Every hour more like it. They’re the only ones buying radio spots here in the PBOE.

#73 Mackie on 07.13.12 at 9:32 am

Jonno,
Relators are pimps for houses…. They don’t care if markets go up or down. They make money in either direction

Not if you don’t use them. Get a lawyer and try kijijiji.

#74 Jim Lahey, Sunnyvale Trailer Park Supervisor on 07.13.12 at 9:52 am

#22 Furst

Just when we thought you had exhausted your supply of poems you come up with another masterpiece. Sunnyvale will have this latest gem read my moi this evening. Keep ’em coming Furst!

#75 Mixed Bag on 07.13.12 at 9:56 am

#20 Bill Gable on 07.12.12 at 10:49 pm

Bill Gable, I wish you good health. Your post touched me, I sincerely hope for the best for you.

For what it’s worth, being the major breadwinner in our family, your words did not go unnoticed.

#76 truth hammer on 07.13.12 at 9:59 am

Pot calls the kettle black…….again.

http://news.nationalpost.com/2012/07/12/deputy-mayor-says-downtown-not-ideal-place-to-raise-children/

It was the shitty hall clans in the first place who lowered the FSR at the bequest of unions as a way to juice tax revenues so that raises and pension perks could be enhanced. In Vandump the FSR was reduced by 47%.

At the time it was the insiders of the business who brought the farce to the attention of the media….and the advertisers quashed the move towards enlightenment at this sleazy trick.

One voice that did get through was that of Dr David Foote ( boom bust echo) who pointed out that the cat box sized condo’s were ‘functionally obselete’ from the onset as the units could accomadate no one except the socially and financial suicidal.

It was pure greed people….the shitty councilours rolled over and gorged on the tsunami of cash coming in from bumping up the number of units per parecel by double….and thereby they collect double and triple the tax revenue…..and that has all gone into the pockets of the greedy short sighted civil servants.

The city now wonders if kids are safe in this environment….bwahahahahahahahaha….of course they aren’t…….but it’s too late now isn’t it. Every day the kiddies have to slog through the perverts in the ‘city parks’ and the junkies in the streets because of union greed.

#77 Helen on 07.13.12 at 10:04 am

Garth,

I am reading your blog for more that 3 years for now and I have to state that I lost a lot due to this fact. You have predicted RE correction long time ago, but prices are still going up, at least in GTA and area. I have decided not to flip a house based on your blog suggestions and what? – I lost alots of money. During the last 3 years my pal flipped 2 houses and made sufficient money on it. Sorry, Garth, but I CANNOT thank you.
Nobody knows for how long this RE will last, nobody. It migh take another 3-5 years before correction starts. Layoffs in government? ha – they offered jobs in another gov-t departments so still have good income.

A flipper denied? You just made my day. — Garth

#78 cramar on 07.13.12 at 10:23 am

#18 Retired Boomer – WI on 07.12.12 at 10:40 pm

(and #24 & #49)

“Would I buy a home today say if I were twenty something? Hell YES, mortgage money in the US under 4% 30 yr fixed, with 20% down, and pay it as a 15 yr fixed… in a NY minute.
Would I be yesterday’s Carl? Not on a BET!!!”

Thinking about this, if I were 20s something today, I would NOT buy, nor could I afford to buy if living in the GTA. My coarse of action would be to continue to rent or get out of the GTA (or Van., Calgary, etc.) *IF* I was really house horney and made it my goal to be a home owner. The exact same strategy that worked a generation ago would be my alternative to renting today. Find a job in some area of Canada that had reasonable RE, and move! Accepting that a pay cut would be in the cards, frugality might be necessary, but concentrating on the longer term goal of owning a house that is not inflated beyond reasonable value.

#79 jess on 07.13.12 at 10:37 am

probable cause?
dog used as an excuse for abusive police corruption

Tuesday, July 10, 2012 06:29

Lawsuit Challenges Reliability of Police Dogs, Says Handlers Influence Them
In 2010, University of California, Davis researchers set out to test the reliability of drug- and bomb-sniffing dogs, says the Las Vegas Review-Journal. The team assembled 18 police dogs and their handlers and had them go through a room and sniff out the drugs and explosives. The room was clean. No drugs, no explosives. The teams failed the test 85 percent of the time, leading researchers to concluded that they were influenced by their handlers.

Two Nevada Highway Patrol K-9 troopers and a consultant have sued, charging that the Metropolitan Police Department’s police dogs and the state patrol’s own dogs were “trick ponies” that responded to their handlers’ cues, and therefore routinely violated citizens’ rights to lawful search under the Fourth Amendment. The lawsuit goes makes other accusations in its 104-page complaint: that the Metropolitan Police Department is a racketeering organization, that money seized by motorists was misappropriated by the Department of Public Safety, that their agency subjected the two troopers to harassment and intimidation.

http://www.lvrj.com/news/legal-challenge-questions-reliability-of-police-dogs-161759505.html

#80 daystar on 07.13.12 at 10:41 am

Leesa… you net $65 G’s with the help of RRSP’s. Use up your TSFA’s. Take a couple years off the market and sock away another $50 G’s. In 2 years the market corrects 15 to 20% and you save $67 to $90 G’s at the entry and you are $40 G’s richer if you sell and rent. A $200 G mortgage is alot better than $350. Right? Think!

I wish they were all as mentally gifted as Mrs. Wold who knows simply, that security comes from equity, not concrete, glass, paint and wood.

#81 jess on 07.13.12 at 10:50 am

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

brookside —>global tech —>strategy was to profit from prominent US companies outsourcing production abroad (china) On September 4, 1998, Global-Tech stopped a $30 million expansion of its Dongguan facility because Sunbeam, a was a major client of Global-Tech

remember chainsaw al -sunbeam -He was fired by Sunbeam in 1998 and confronted with fraud allegations — accusations remarkably similar to the ones he had faced two decades before
THE INCOMPLETE RÉSUMÉ: A special report.; An Executive’s Missing Years: Papering Over Past Problems
By FLOYD NORRIS
Published: July 16, 2001
.

http://www.nytimes.com/2001/07/16/business/incomplete-resume-special-report-executive-s-missing-years-papering-over-past.html
http://www.motherjones.com/politics/2012/07/bain-capital-mitt-romney-outsourcing-china-global-tech
http://www.nytimes.com/2001/05/16/business/sec-accuses-former-sunbeam-official-of-fraud.html?pagewanted=all&src=pm
http://www.nytimes.com/2005/05/20/business/20norris.html?_r=1

#82 Nick on 07.13.12 at 10:57 am

#43 Jody

No, no You give to us!

#83 Daisy Mae on 07.13.12 at 10:57 am

“As for that bag of money, hire a smart guy to manage is.”

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

Garth, you are soooo modest….

#84 Realtors in an all out PANIC! on 07.13.12 at 11:01 am

real estate bear on 07.13.12 at 8:24 am TO mr market bull. The defaults wont increase untill the people who get themselves into financial trouble cannot pass on their debts to a greater fool. First sales slow, then prices drop, then people cannot bail themselves out, then bankruptcy follows, Why is this so hard to understand.
———————————————————-
Yes this is EXACTLY what is happening RIGHT NOW! People were able to sell before they went bankrupt and now not so much. sales in TO have slowed down just like Vancouver and prices have already started to drop . As maxed out people can not borrow more money from HELOC and maxed their credit cards out …they will go bankrupt.

#85 HOUSE FIRES on 07.13.12 at 11:08 am

Looks like another House “fire” this time in brampton as people try to burn their houses down before they go bankrupt. As the crash gets worse you will see many more “fires” Remember 2008 there were 3 “fires” a week in the news and now the “fires” are starting again.

#86 Kim on 07.13.12 at 11:16 am

T.O. Bubble Boy @ #17 Market Bull
Yup, all those recent no money down unqualified Canadian home buyers are really making a mess of their finances.

Hang on, the latest mortgage default numbers are just out:

Wait for it – 0.34% (the lowest in 4 years).

Why would mortgage defaults be happening when prices have been rising 5%-10% a year?

Just wait for 2013 and beyond — this number will look much different.
———————————————————-

In the US defaults were low and then as prices stopped going higher . Guess what happened to defaults in the US? Yup they went higher. Realtors like Market Bull are very worried which explains why they post on garths blog al day and night. The RE market is very sick and both mortgage brokers and realtor have said the phones have stopped ringing. They stopped ringing before the mortgage changes. July number are going to be horrible.

#87 Montreal_CA on 07.13.12 at 11:22 am

This is directed to #60 – JO

The 20% tax you mention seems improbable because they would have to re-jig a whole bunch of measures to the tax system, mostly, making large changes to the dividend tax credit and connected gross-up to ensure that integration (look it up) remains achieved.

Considering that we currently have a conservative gov’t I don’t find any such tax likely in the near term. Only the NDPs would be stupid enough to impose it. To make ends meet, entitlement programs will be scaled back and overall taxes increased.

Also, realize that the “lower” tax rate on dividends has to be seen in context with earnings that were already taxed inside the respective corporation. Combined, you are already at about 50% anyways (depends on tax bracket of course but integration aimed at high-earners anyways).

#88 Alex N Calgary on 07.13.12 at 11:32 am

Drywall guy is telling me about his 25yr old daughter. Just sold their 2yr old house, which he had totally drywalled for them, and have moved back in with him for 6 months with their 2 kids and 3 dogs until their new MUCH bigger house is built, did I mention the part about being 25yrs old and having moved out of a nearly new house already? Cause of course they DESERVE a much larger new house at 25, brand new houses that are a bit smaller are for 19yr olds, Sheesh get with the time Alex.

rot in your unsellable hellhole uneducated pigs…

#89 jess on 07.13.12 at 11:40 am

tale of three cities?

http://www.urbancentre.utoronto.ca/pdfs/researchbulletins/CUCSRB41_Hulchanski_Three_Cities_Toronto.pdf

#90 Nemesis on 07.13.12 at 11:40 am

“Those who invest based on doomer web sites are idiots.” — Hon. GT

No kidding. Some UK based punters were nearly wiped out by the SquirrelPox pandemic (which, naturally, precipitated a shocking decline in RedSquirrelRanch REITS)… As it happens though, the RedSquirrels are staging a comeback…

[BBC] – Sefton red squirrels recover from pox ‘nose dive’

…”Merseyside’s red squirrels, which were nearly wiped out by squirrel pox, have “bounced back” to repopulate the area.”…

http://tinyurl.com/cwyayjm

#91 Dupcheck on 07.13.12 at 11:49 am

#6 Toronto_CA

You make a good point. It looks like the spiral effect of the RE market is just starting.

#92 Dupcheck on 07.13.12 at 11:53 am

#88 Alex N Calgary

Alex, the dry wall guy must have been from a country that ens with -taly. They like to show off, and live outside of their means, but pay for bad decisions and consequences later.

#93 American Werewolf in BC on 07.13.12 at 11:58 am

#77 Helen on 07.13.12 at 10:04 am

First off, think for yourself and take responsibility

Secondly, while I haven’t been following for 3 years, I’ve been predicting a crash at least that long because the Canadian market is out of whack. I would suggest that any rational person with a sense history and ability to reason would be thinking alone the same lines. The very fact that its able to keep getting worse for that long doesn’t mean you ‘lost’ money; it means this party is going to end in a very, very bad way. When that end comes, would you rather be liquid, or be hoping you can pawn your debt on some other fool and make it to an exit in time?

#94 Grim Reaper/Crypt Speculator on 07.13.12 at 12:01 pm

Re Females….

Take it from me…..can’t live with them…..and can’t live with them.

WARNING: They will be the death of you.

Most men solicit my services because they want to. Noticed quite a spike when Bubble was growing..but a lot less now.

Correlation ?

#95 Brad in Calgary on 07.13.12 at 12:08 pm

#47 Not 1st on 07.13.12 at 1:23 am
Garth I want vultch Calgary. When’s it gonna happen?

It’s not going to happen.

#96 Daisy Mae on 07.13.12 at 12:24 pm

CBC, July 13th — “JPMorgan Chase, the largest bank in the United States, said today that a trading blunder had cost the bank $5.8 billion since the beginning of the year — nearly triple its original estimate.

The company also raised the prospect that traders had attempted to conceal the trading loss.”

#97 Jojo on 07.13.12 at 12:33 pm

“I am a 40’s single female, no kids, with an income of $90,000. I have $95,000 in RRSP, and $60,000 in savings/TFSA.”

Cool. I am 40’single male in Van , have the same amount in RRSP and about 3 times that amount in saving. And no kids, no wife and according to my friend I am a handsome guy. Let’s get togather… If things will works for us we will invite Garth to our wedding. He would deserve this for getting us togather…

#98 antiflakflak on 07.13.12 at 12:43 pm

Sell that condo in N. Burnaby, (take the money &run) as for neighborhoods you won’t even miss it, N. Burnaby is one heck of an ugly neighborhood in the GVRD. (can’t think of anywhere uglier in Vancouver right now that I’d rather not be). It was nicer in ’97, and has been going downhill severely aesthetically speaking, and is only about to get a whole lot uglier with that scaretrain and stack & pack housing about to engulf that ‘hood.

#99 Karie on 07.13.12 at 12:47 pm

I don’t think Carl or any of the young couples who come on here looking for advice are losers, they’re just trying to figure out their finances and how to buy a house. Many young people want to buy a house, they will continue to write in – I don’t think this will change. From reading Carl’s letter, I got the feeling his wife was not a princess and I felt he threw her under the bus, blaming her for their joint financial decisions. I bet they are a very nice young couple but Carl is in a panic over the huge numbers of buying a house, a wedding and kids and portrayed him and his wife in an unflattering way.

The most interesting thing I think that Garth wrote that really caught my attention was this:

Garth: Is trying to avoid debt and worry about the future worth all the grief? Maybe it’s just so much easier feeling entitled, and let things take care of themselves.

That really got me thinking! Some of my spendthrift friends have taken chances particularly on buying new homes in new developments with all the upgrades and are doing very well financially! Meanwhile, I’m on blogs trying to figure out my finances, investments and the future. Researching and reading financial books and magazines constantly and yet their networth is probably way higher than ours. It’s so funny that sometimes everything does seem to work out for some people who don’t worry so much about things. Maybe ignorance is bliss!

There is nothing wrong with buying a home, spending thousands on a wedding or vacation or whatever is important to you. Money is for saving but also for spending especially for memorable events with loved ones. Money is for a means to an end. Save for the future but have fun in the present. You can’t take it with you!

As for today, I think both Leesa and Mrs. Bold have a very bright future ahead of them.

#100 BCObserver on 07.13.12 at 12:55 pm

#7 Just Park It

Same here. People who have a small principal left should not sell. They should be patient, pay off the rest, enjoy their home, and lowest interest rates, and wait till prices on condos crash, then use HELOC to buy at the bottom, rent out, and watch another appreciation cycle.

#101 spaceman on 07.13.12 at 12:56 pm

Banks, have the money, control the money, and make the money. All Equity funds in Canada hold the big 5 Canadian Banks. I agree with a previous poster, learn as much as you can about, liquidity, risk, Balancing a portfolio, dividends, tax laws (very important). Get a copy of Money Road, The Wealthy Barber, and read everything about Warren Buffet, and Value investing.

Land is a good hedge against inflation, but not if it is overpriced, like any commodity. Real Estate is attractive as an investment, as it is the only investment the banks will let you massively leverage, with unreal low interest. thats why everyone wants it and thats why its in a bubble in Canada. (think Tulip bulbs)

#102 Bill Gable on 07.13.12 at 12:59 pm

Take it from me – the gift of life and health slips by very quickly.

IF you are NOT prepared, and have a Living Will and proper Will and a great team like Garth and Scott trying to help – you are leaving those you love vulnerable.

Your kind words meant a lot to me.

I hope the Doctors are wrong, and I enjoy everyday, like it’s my last.

Not to be morbid – but believe me, it feels like only yesterday I was 30 and enjoying my media career.

Now? I spend my days trying to make sense of all that has happened and trying to point people to sensible life choices.

Wishing YOU great health and all good things. (*There sure are some swell folks that hang around here, and you cheered me up, more than you will ever know – I am very grateful to you and to Mr. Turner and Mr. Thomensen – two VERY fine people).

Take CARE of yourself.

#103 spaceman on 07.13.12 at 1:16 pm

VanCity Gal

Lie on your investment goals, you don’t need to tell them its short term. Then get a self directed account, lets you buy and sell anything, anytime. Now you can do what ever you want.

Banks are great to invest in, lousy to get advice from. Find and independant investment advisor, tax or estate planner. (I haven’t found a good one yet, go with my own gut and lots of reading.)

#104 Canadian Watchdog on 07.13.12 at 1:28 pm

Canada reviews CDOR setting after Libor woes http://uk.reuters.com/article/2012/07/13/uk-banking-libor-canada-idUKBRE86C0RS20120713?feedType=RSS&feedName=GCA-GoogleNewsUK

Chart: CDOR 3 Month – OIS Swap http://postimage.org/image/rr881ffxr/

Everything is fine….nothing to see here.

#105 Alex N Calgary on 07.13.12 at 1:31 pm

I just logged onto a random users Facebook, saw this early 20’s girl next to a SOLD sign, our very first house! oh dear….Calgary is massivly overpriced, but more important, you don’t see the fancy pantsy cars of Vancouver and toronto around here. why is that you might ask? Well its because there is a large portion of people here with little to no education, trades, service, lots and lots and lots, all super duper vulnerable to a recession. Like Garth says over and over, commodities prices are super volatile, IF and WHEN oversupply, and lack of demand for oil hits, people will Bail on AB in MASS back to the provinces they came from, and countries. Its widely known here, talk to anyone from another province, they will all Bail home and walk away from their homes if the jobs dry up a bit.

Then all the trades guys and service people lose their jobs from housing slowdown,then can’t make house payments, OH and I did I mention how since I rent, I see all the people who own these houses, all investments, more houses then people +++ = maybe the biggest crash of all here in Calgary.

Also any person who has lived in AB has seen Bust and Boom, but a lot have forgotten…

Does anyone have the figures on interest saved on lower home value? So for example 400k now @ 25yrs is 200k in interest but 300k @ 25yrs is 150k interest? Would be nice to know! Thanks as always Garth.

#106 jesslyn on 07.13.12 at 1:31 pm

Blase, 45 North, Bill Gable, Calgary Rocks, AgioBlue-Yesteday’s post 12/07/2012

Thanks for all of your insight and good wishes! When we head down to tour the neighborhoods in Las Vegas we will be working with a realtor who is friends with the boss of my husbands company-so hopefullly that will answer some questions re. location and market volatility. I had meant an L1 L2 Visa don’t know why I wrote ‘T’ and this process will be handled through lawyers with company. Thanks for the recommendation of a lawyer, though, I appreciate it.

Bill Gable-Although I am aware of civil unrest in the US and have given that a great deal of thought my conclusion is that civil unrest will follow in Canada if that is to occur. People can get guns anywhere if desired. I have decided that I don’t want to live my life expecting the worst and living in fear. I think that having a positive outlook and working towards a better future sends a better message and allows me to be more optimistic and caring.

Again, thanks for all of your help and insight!

#107 Daisy Mae on 07.13.12 at 1:35 pm

#42 JONNOwe both smiled thinking each other was wrong and just as he got off

#108 Spiltbongwater on 07.13.12 at 1:36 pm

No wife
No Kids
75K per year
If Ms. North Burnaby wants to meet??????
20K TFSA, 30K RRSP, 2008 Honda Fit paid in full, avid golfer, cyclist, bit of a pothead, but goes with living in Vancouver area. Call me at 555-321-1455

#109 Daisy Mae on 07.13.12 at 1:36 pm

#42 JONNO: “…we both smiled thinking each other was wrong…”

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

There’s an awful lot of that going on today.

#110 John G. Young on 07.13.12 at 1:56 pm

#102 Bill Gable on 07.13.12 at 12:59 pm

So true. On November 19 2009 I broke my hip. It was surgically repaired and I was pain-free and with complete range of motion — until April of this year. The head of the femur has collapsed due to damaged circulation and I am now awaiting a hip replacement, which probably won’t happen until 2013; in the meantime I limp with a cane, and am in constant pain. My life will never be as it was before.

A person’s life can change forever in an instant. Be prepared, take good care of yourself, and enjoy your life — it may be much shorter than you anticipate.

John

#111 Daisy Mae on 07.13.12 at 2:00 pm

#77 HELEN: “I have decided not to flip a house based on your blog suggestions and what? – I lost alots of money.”

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

Boo hoo…..made my day, also.

#112 China's economy will never crush on 07.13.12 at 2:13 pm

To: #55 Timbo

The Chinese government will rather starve people to death, and put half of the population into labour camps than allow crash. That’s what communist regimes do. It does not matter that communist regimes evolve into a different form. They are still centrally run beaurocracies. The best you can expect from them is lying about results.

#113 Managia on 07.13.12 at 2:23 pm

Garth, what do you think about investing in small commercial real estate and managing it personally saving costs? Is any advantage to it compared to REITs? I was thinking about sixplex, small industrial freestanding (up to 10,000sqft), mixed use, or office building. It seems that CAP rates are quite tight (historically speaking).
In today’s Toronto Star – Business Section there is an article about shortage of office space in Toronto. Is it a hype or is it based on merit?

Show me a single Toronto commercial property for sale in which there is a decent return on investment. — Garth

#114 superbubble on 07.13.12 at 2:25 pm

more proof canadians are the dumbest humans…ever:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11906962&PidKey=323918853

#115 HD on 07.13.12 at 2:28 pm

#52VanCity Gal on 07.13.12 at 2:25 am

Garth, you always talk about ETFs and REITs but every advisor will tell you they’re too risky for short-term investing. I’m in my late 20′s and I went to open a TFSA. The money I’m putting away will be used as a downpayment in 3-5 years (I live in Vancouver, waiting for the crash).

But no advisor would let me invest in ETFs or REITs if I’m planning on taking the money out in such a short time. I had to fight them to let me invest in anything other than GICs or short-term bonds. They told me the SEC makes you fill out a form and if my goals do not align with my investments, then the advisor would not be allowed to invest that money.

So what do I do? I find most of the investments you talk about are for long-term retirement, but what about shorter term (2-5-10 years)???

—————————————————————–

#128HD on 07.10.12 at 11:58 am

Garth,

Looking forward to your post about ETFs.
I currently have 20k savings (cash) in my TFSA. I contemplated investing in ETFs but might need the money in 2 years from now if there is a buying opportunity (RE).

I am under the impression that you should buy and hold (long term) if you invest in ETFs.

Wouldn’t it be more prudent to park the money if one is planning to use in about 2 years?

Would Garth or any blog dogs care to comment on this?
Best,

HD

—————————————————————–
#141Toronto_CA on 07.10.12 at 1:05 pm

To #128 HD on 07.10.12 at 11:58 am

I don’t think a TFSA is a great vehicle for house downpayments. As Garth says, TFSAs are not for ING accounts earning 1.3% interest on a good month. TFSAs are for long term growth, which involves short term risk.

If you need the money in the short term, like in 2 years, why not be 100% safe and use a GIC or high yield savings account outside the TFSA. Max your TFSA anyway as part of your long term savings plan (retirement); not the short term. I’d recommend the max contribution to my employers DC plan to get the match (diversify in the plan); then fully fund the TFSA with ETFs; then fill up my RRSP room to the max; and leftover money goes into ING.

Sadly, that assumes you’ve got lots of money left after paying your bills (or before paying your bills if you pay yourself first).

Hope that is helpful.

—————————————————————–

Best,

HD

There is no instance in which a GIC makes sense. — Garth

#116 Daisy Mae on 07.13.12 at 2:47 pm

I’ve just been scanning the Kelowna & District REAL ESTATE WEEKLY.

Well, you wouldn’t believe all the listings marked “pending”.

Latest gimmick?

#117 Tom from Mississauga on 07.13.12 at 2:48 pm

The condo listings in South Mississauga from some of the older buildings are pouring onto the market.

80 Port St used to go for near a mill and still you couldn’t get one. Now there’s a bunch and the most expensive is 568K.

1400 Dixie Rd I’ve don’t recall ever seeing one listed before. Now there’s 5!

#118 new-era on 07.13.12 at 3:01 pm

40 Canadian Watchdog on 07.13.12 at 12:16 am

#36 Mr Buyer #25 T.O. Bubble Boy

Here’s one reason why delinquencies are low http://www.genworth.ca/homeownership/c_on-your-terms/HomeownershipWeek_Friday.asp

And the after-effect of paying peoples mortgages for free. http://tmx.quotemedia.com/charting.php?qm_page=97896&qm_symbol=MIC
=============

Yes and that is why I still have this coming on “SHORT”
Its been steadily falling. I can totally see this thing under 8 dollars by the end of the year.

Its a good bet against the freakin dysfunctional real mortgage and loans business in north america

#119 tkid on 07.13.12 at 3:06 pm

#96 Daisy Rae, someone on Zerohedge had the losses pegged at 9.9 billion. It is almost like tptb are trying to minimize the impact of the losses by slowly increasing the dollar figures.

It’ll be interesting to see what the final figures are.

#120 balsamic on 07.13.12 at 3:14 pm

So, if anyone has any doubts that RE agents are panicking / scrambling and things are drying up, look at the email below I got from my agent this morning. For a while we were looking last year, spoke to Garth and rented instead. However have kept in touch with the Agent. She has pretty much left us alone, until now —–

Email Below:
How are you doing?
Hope everything is well.
I want stay in touch to see if you are ready to buy because the market has corrected considerably and market in july and august is for the buyers’ market to shop as you will see listings that did not sell in the spring market or need to sell comes out now. And you will see in september they will regroup for Fall market.
You have been watching the market closely and know that price went up continuously but crazy multiple offer has stopped or less occurring now.
I still don’t see the decline of price in near future especially with continuing low interest rate to borrow.

I still believe investing in real estate and specially for principle home is the way to go, and sooner than later.

Let me know with thoughts!
Looking forward to hearing from you!
Best regards, M

#121 Pat on 07.13.12 at 3:20 pm

“There is no instance in which a GIC makes sense. — Garth”

I’ll give you one example (which can’t by used by most people on this blog). A governmentally insured GIC under my gradmother’s name in a foreign country (with very little debt), where grandma lives. US $ account with 5.25% interest, tax free.

#122 Glen on 07.13.12 at 3:28 pm

#77 – Helen
Your pal has most likely enjoyed some dumb luck. The fundamentals have been terrible for years now. I suspect they will try to make one flip too many, please report back when that happens.

#99 – Karie
I hear you, my wife and I wonder the same as we watch some of our friends throw money around and somehow have it work out for them. In my business I do see that poor planning eventually catches up with most. If interest rates ever do start moving, there is going to be a whole whack of people in trouble.

Regards,
Glen

#123 gladiator on 07.13.12 at 3:28 pm

this is how you sell a 35M-dollar house:
http://realestate.yahoo.com/news/-35-million-home-sells-itself-with-movie-and-app.html

#124 Toronto_CA on 07.13.12 at 3:29 pm

“There is no instance in which a GIC makes sense. — Garth”

I’d prefer a high yield savings account for short term savings as the liquidity is better, but the best 2 year GIC is 2.5%, while the highest savings accounts are at 1.8%.

On $100k downpayment you’d have interest of $3632.40 in a 1.8% savings account before tax and $5062.50 in a 2.5% GIC. Is that $1400 before tax difference (call it $1000 net) worth the fact that your money is locked in for 2 years? Maybe to some.

Yes, interest rates could go up substantially between now and 2 years from now…but they could go down or stay flat if growth continues to be sluggish.

Investing in preferreds or dividend paying stocks for a time from under 2 years is playing with fire for capital; most people don’t want that much risk.

But you’re the advisor, Garth. I defer to your wisdom on this. Where would you stick a downpayment for 2 years or less if not a GIC or high yield savings account?

#125 Pat on 07.13.12 at 3:32 pm

@#97 Jojo,

Really?? You can’t find any 30’s or 20’s? What’s wrong with you dude?

#126 HD on 07.13.12 at 3:38 pm

#115HD on 07.13.12 at 2:28 pm

There is no instance in which a GIC makes sense. — Garth

—————————————————————–

Garth,

You might be right but you didn’t suggest an answer to our situations (VanCity Gal and me).

Perhaps you’re waiting for your post on EFTs/TFSA to give some insights?

I offered Toronto_CA’s answer because that’s all I could get from you and the blog dogs.

Best,

HD

#127 Aussie Roy on 07.13.12 at 3:58 pm

105 Alex N Calgary

on 07.13.12 at 1:31 pm

“Does anyone have the figures on interest saved on lower home value? So for example 400k now @ 25yrs is 200k in interest but 300k @ 25yrs is 150k interest? Would be nice to know! Thanks as always Garth.”

………………………………………………………………………..

The radical reduction in the day-to-day cost of mortgage debt permitted Australian households to significantly increase the amount of debt they were servicing without a noticeable rise in underlying mortgage default rates.

Although this argument holds water on a serviceability level, if we look at the effects that a doubling price and halving interest rates have on a mortgage holder over the term of their loan it’s a real eye opener (use this mortgage calculator to run your own scenario. https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/mortgage-calculator ):

$300,000 borrowed @ 6%
Repayments of $2000 per month
23 years, 2 months to payoff loan
Total repayments = $555,903

$150,000 borrowed @ 12%
Repayments of $2000 per month
11 years, 7 months to payoff
Total repayments = $278,643

The initial interest costs on a $300k loan at 6% is the same as a $150k loan at 12%, however the smaller loan is repaid at a much faster rate if the borrower has the capacity to repay either loan at the same rate.

So are lower interest rates making property more affordable? Not if prices rise to fill the serviceability gap.

By taking on a larger amount of debt, even if the interest rate is half of some historical levels, borrowers are taking on significantly larger amounts of risk and hence by the second definition perhaps can’t be considered as affordable as some would make them out to be.

It’s an Aussie example but I’m sure the MATH is global.

#128 Mixed Bag on 07.13.12 at 4:02 pm

#102 Bill Gable on 07.13.12 at 12:59 pm

Bill, not sure if you were referring to me – if not, please forgive my pretentiousness. But if so, thank you, you have been in my thoughts a great deal today.

Your message is that prod to get my paperwork in order, something that has been nagging at the back of my mind, but always put on the back burner. At the very least, to compile a list of all the policies, contact information, steps to take, etc. I don’t know if I’ll get to it tonight, or even this weekend, but I will appreciate my life that much more as I take my kids out to play this summer evening.

God Bless.

#129 Aussie Roy on 07.13.12 at 4:03 pm

Link for previous posting.

http://www.bullionbaron.com/2012/06/does-australia-have-housing.html

#130 Santa on 07.13.12 at 4:11 pm

Garth, you on your way to Port Dover? :)

#131 Canadian Watchdog on 07.13.12 at 4:16 pm

#118 new-era

Despite their tumbling stock price—when nobody was looking, Flaherty sneaked in a new rule that allowed private insurers to post NO collateral for government guarantees; in exchange, PMIs must pay a higher premium. Ref. “Residential Mortgage or Hypothecary Insurance Act” April 23, 2012. http://laws-lois.justice.gc.ca/eng/acts/P-25.7/

So now taxpayers are 90% backing private mortgage insures with no collateral posted. Wonderful.

#132 Toronto mine sweeper on 07.13.12 at 4:58 pm

Hey Garth
what about 16% in the bank, yes thats correct, my friend works in the mines in Mongolia and they are offering 16% to put your money there, they have huge developments and need capital.
and why not gold or silver, via Central Fund Of Canada or Sprott Shaw silver account, you fail,
I took your advice back in 2008, but also invested in gold, It still baffle’s me why you do not mention god solid blue chip gold Canadian companies, Gold Corp, Agnico Eagle etc… all pay dividends??????
please explain.

I agree Garth, we want to hear your spin on these investments

So buy gold. Good luck. — Garth

#133 Westernman on 07.13.12 at 5:12 pm

Westernman @ # 2,
Remember, the sincerest form of flattery is imitation…

Unless it’s parody. — Garth

#134 Westernman on 07.13.12 at 5:16 pm

Johnny D @ # 11,
You sure are a slow learner young pup, that’s why you’ll fit in well in Sask. with all the other inbred retards…
I’ll go over it one more time – maybe you’ll pick up on it …
There will be no in depth posts on Sask. because nobody lives there and nobody cares about it… get it … dumkopf?

#135 jess on 07.13.12 at 5:27 pm

ego ergo I

po box, photoshop and inkjet printer = 20 years of lies

http://www.reuters.com/article/2012/07/13/us-pfgbest-ceo-arrested-idUSBRE86C0YM20120713

#136 eagle eyes on 07.13.12 at 5:27 pm

Headline news of Hong Kong claims that

“Home prices almost doubled in the five years to end-2011,and as soaring property prices, the most expensive in the world, have stirred public discontent.”

Hmmmm… this vaguely reminds me of another RE market. One that begins with a V.

“The impression is that government policies tend to favour the rich tycoons, particularly rich property developers.”

This article refers to the arrest of the 2nd wealthiest developers, the Kwok brothers of Sun Hung Kai Properties. They were charged with corruption.

The Hong Kong Government is concerned by the public’s perception of inequality and lack of integrity. They are acting quickly to try and change this perception by pledging cheaper land, subsidizing first time homeowners, more government programs, etc. Whereas the Canadian Government couldn’t give a rat’s arse. We should learn from them. In fact, I believe Canada will be schooled very soon.

#137 Investx on 07.13.12 at 5:40 pm

124Toronto_CA
“There is no instance in which a GIC makes sense. — Garth”

Investing in preferreds or dividend paying stocks for a time from under 2 years is playing with fire for capital; most people don’t want that much risk.

Where would you stick a downpayment for 2 years or less if not a GIC or high yield savings account?
—————————————————

Hmmm… that instance seems to make sense.

If you think putting money into the preferreds of banks or large insurers for two years is ‘playing with fire’ there is no hope for you. I give up. — Garth

#138 eagle eyes on 07.13.12 at 6:35 pm

8271 Osgoode Drive, Richmond BC:

October 2011 $998,000 List Price
Tax Assessment $921,000
July 2012 $800,000 SOLD

Sold in 275 days.

#139 Toronto_CA on 07.13.12 at 6:35 pm

“If you think putting money into the preferreds of banks or large insurers for two years is ‘playing with fire’ there is no hope for you. I give up. — Garth”

Please don’t give up on us. Thanks for answering, you’d stick them in preferred shares for banks or insurers.

I’ll concede playing with fire is too strong a term. If the person has access to a great advisor like you who can pick low volatility preferreds, maybe they would be better off even in the short run.

But if they are picking themselves, just to cherry pick an example – on Oct 1, 2008, TD Preferred R series was worth $24.59. On November 21, 2008 it was worth $18.10.

For an insurer, Sunlife preferreds seem to be pretty volatile, as well:

http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=SLF.PR.H-T

There is some risk to capital with preferreds, even for banks and insurance companies as I’ve demonstrated.

I don’t believe anyone who is risk averse is beyond hope, though.

Everything went down in 2008. This is an extreme example which I do not expect to be repeated in our lifetimes. Nonetheless, the preferreds continued to pump out their dividends and recovered quickly. Only a fool would have sold for a capital loss instead of sitting back and collecting the income. Like I said, I give up. If people are too timorous to invest in their own futures, they will certainly face a greater risk. — Garth

#140 Jim Lahey, Sunnyvale Trailer Park Supervisor on 07.13.12 at 6:42 pm

#110 John Young

“A person’s life can change forever in an instant. Be prepared, take good care of yourself, and enjoy your life — it may be much shorter than you anticipate.”

Very wise words John and something everyone should reflect on. Hope all goes well with your hip surgery.

#141 Johnny D on 07.13.12 at 7:11 pm

#134Westernman

So you have no valuable input and all you can say is that garbage? You can do everyone a favour and stop posting. So anyone with a brain refer to post #11 for my original question. Real opinions would be appreciated.

#142 Canadian Watchdog on 07.13.12 at 7:22 pm

Prime Stocks To Short.

The Brick Ltd. (BRK) $4.01 http://postimage.org/image/d2bjtycyh/

Leon’s Furniture Limited (LNF) $11.40 http://postimage.org/image/uq7jyof3x/

#143 Tony on 07.13.12 at 7:44 pm

Re: #142 Canadian Watchdog on 07.13.12 at 7:22 pm

Those are very good ones as the way to play this market of course is from the short side. Rona should also fall under the two dollar level before a reverse stock split.

#144 Toronto_CA on 07.13.12 at 7:44 pm

Everything went down in 2008. This is an extreme example which I do not expect to be repeated in our lifetimes. – Garth

Fair enough (although those Sunlife Preferreds dropped in January 2012, that was isolated as well and they did recover.)

I don’t mean to aggravate you Garth, and yes let’s hope we never see another 2008 again.

Have a great Friday night! I’m off to Bermuda to enjoy the weekend with some Dark’n’Stormies.

#145 John G. Young on 07.13.12 at 8:03 pm

#140 Jim Lahey, Sunnyvale Trailer Park Supervisor on 07.13.12

Thanks Jim. Nothing teaches life lessions better than experience.

As for the hip surgery — at this point I’d probably opt for “soon” over “well”!

Cheers,

John

#146 Nostradamus Le Mad Vlad on 07.13.12 at 8:08 pm


#48 Aaron – Melbourne — “China won’t save us, the books are cooked. The chefs are making HAM.”

Good post. China seems to have dropped their interest in helping the EZone out, mainly because BRICS are having their own slowdown as well. The realization that “Charity begins at home” is sinking in.

“There is no instance in which a GIC makes sense. — Garth” — The only reason that I can think of, is that Guaranteed Investment Certificates are guaranteed to lose money. Anyone noticed the cost of food lately?
*
New Cdn. Money (plastic) melts in sun, and will not be reimbursed; Ten min. clip Remember Cpl. Klinger in M*A*S*H? Toledo now; Bank Accounts The last official act of any govt. is to loot the nation; Spain now has to pass over their banks. Whom to? Terminal Scam It’s Crooked Economics; Warfare State Driving the US’s economy over a cliff, thanks to Soros and TPTB; 29:55 clip / cartoon Who controls NAmerica? UN’s Agenda 21 (one world govt.) explained; Oz and Iceland’s economies booming; Libor Becoming politicized, with some mtgs. thrown in for good measure; Banxters And a fitting place for them, it is; Ireland Sharp GDP fall.
*
Solar Flares Greg W., Oakville — direct hit coming in tonight. That should stimulate weather patterns around the world! Side A and Side B. Two sides to every story; Sterilization Under ObombaCare, it’s free for women; FB Monitoring chats; MI6 Chief Curious as to how the UK would react if someone took away the North Sea, and its oil; Monty Python’s Killer Cat lives, albeit in a different form.

#147 John G. Young on 07.13.12 at 8:08 pm

#141 Johnny D on 07.13.12 at 7:11 pm

Hi Johnny D,

Westernman is an irrelevant troll who has never, ever contributed anything of any value, and undoubtedly never will.

I suspect that he posts here because it is one of the few blogs left that he has not yet been banned from.

John

#148 grantmi on 07.13.12 at 8:16 pm

#142 Canadian Watchdog on 07.13.12 at 7:22 pm

Prime Stocks To Short.

The Brick Ltd. (BRK) $4.01

Leon’s Furniture Limited (LNF) $11.40

http://scharts.co/MrqqBT

I wouldn’t short Leon’s that’s for sure! Not enough volume on these stocks. You could very easily get your hat handed to you.. and be told! “Thank you very much! And be on your way!

#149 Harlee on 07.13.12 at 8:16 pm

Just watch out for Two-Gun Cohen, Saskatoon hero and Edmonton realtor ! (Soon to be a Rob Reiner film).

#150 Bill Gable on 07.13.12 at 9:03 pm

#128 Mixed Bag – Not pretentious at all – it was a message to all my fellow, much respected blog dogs.

Be prepared. Life goes by very quickly and the subject of health and the inevitable, while not pleasant, has to be taken care of….or the Government will take over and your Family will get hosed.

I am pleased that maybe I prodded you into making some plans.

I return the best wishes. I hope all the amazing people I read here everyday have long and happy, prosperous lives.

Mr. Turner has gone out of his way to help my Family. He takes the time to make sure that my wife and Son will not have to worry, as my time (like us all) grows shorter.

My late father (Bless his heart) – said something I live by “Your life goes at the speed of your age”.

Be prudent. Enjoy and share and be of service. Think of other folks (like Garth does) and make sure that you take care of yourself.

Life is a blessing. Even if we have dreck like”Dancing With The Stars”, polluting he airwaves.

#151 Bill Gable on 07.13.12 at 9:12 pm

Jesslyn – I wasn’t trying to rain on your parade – just be careful.

I know the USA very well. Vegas – been there a LOT, on business.

I wish you and your husband every success.

One small point. You just try and get a Mach in Vancouver. If you know a Biker, or leg breaker maybe.

In Vegas – you can buy a 50 cal. out of a guys trunk at a gun show.

Make sure you RENT to start. Please don’t get sucked into buying.

Some of Vegas is Crip Central.

I know. I got shot at, after making a wrong turn in my rental.

Of course, that was nothing compared to my three hairy years in Mexico – but that for another time.

Again, I wish you all the best. You deserve nothing less.

#152 Harlee on 07.13.12 at 9:29 pm

#150 Bill Gable
“Life goes by very quickly..”
So true,so true. Sometimes I can’t believe how “time flies”. Life doesn’t seem to slow down as one gets older either.
Take care.

#153 Canadian Watchdog on 07.13.12 at 10:04 pm

#148 grantmi

That’s because the algos have been ignoring it. Watch out in Q4.

#154 Fort Mac Flatlander on 07.13.12 at 11:27 pm

#134 Westernman on 07.13.12 at 5:16 pm
Johnny D @ # 11,
You sure are a slow learner young pup, that’s why you’ll fit in well in Sask. with all the other inbred retards…
I’ll go over it one more time – maybe you’ll pick up on it …
There will be no in depth posts on Sask. because nobody lives there and nobody cares about it… get it … dumkopf?
.

Whoa Westernman, WTF? This is a little extreme even for you. I suggest you look into getting some help with those pent up rage and insecurity issues. I’d hate to see you “take out” some coworkers for wearing green.

#155 “I agree buying today is insane, but the bears forget that there are legions of homeowners who are living mortgage free. So the market drops.. big deal. I am in for the long haul.” | Vancouver Real Estate Anecdote Archive on 07.14.12 at 9:00 am

[…] “One thing most bloggers in here seem to overlook. There are masses of homeowners like myself, who like myself have shaved years off the mortgage monster and have only a few years remaining. We have been given a golden opportunity on financing with ultra low rates that probably won’t return for decades..yes, my old man use to tell me how in the early 80′s, 1st and 2nd mortgages were the norm, 11%-12% rates made you feel blessed. So, I enjoy the remaining years of my mortgage with a locked in, juicy 2.89%…bought before the market lost it’s bearings – prices may have doubled, but I am loving where we live – mortgage free is just a skip away – and though some will hiss that being liquid is having cash – but I say – what if..just a thought, the world goes into a financial crisis (I know, that’s just crazy talk) and the currencies around the world become worthless toilet paper – hard assets will rule. Money won’t keep you warm at night if those digital numbers all of a sudden get wiped out. I agree buying today is insane, but the blog dogs forget that there are legions of homeowners who are living mortgage free, investing in themselves and have the same long term investment strategy .. so the market drops .. big deal – I am in for the long haul…I came to terms that dedication and commitment will always prevail, and I climbed my own Everest and watching all the rest scramble below me.” – Just Park It at greaterfool.ca 12 Jul 2012 9:48am […]

#156 Real Estate: “So the market drops.. big deal. I am in for the long haul.” | on 07.14.12 at 12:23 pm

[…] “One thing most bloggers in here seem to overlook. There are masses of homeowners like myself, who like myself have shaved years off the mortgage monster and have only a few years remaining. We have been given a golden opportunity on financing with ultra low rates that probably won’t return for decades..yes, my old man use to tell me how in the early 80′s, 1st and 2nd mortgages were the norm, 11%-12% rates made you feel blessed. So, I enjoy the remaining years of my mortgage with a locked in, juicy 2.89%…bought before the market lost it’s bearings – prices may have doubled, but I am loving where we live – mortgage free is just a skip away – and though some will hiss that being liquid is having cash – but I say – what if..just a thought, the world goes into a financial crisis (I know, that’s just crazy talk) and the currencies around the world become worthless toilet paper – hard assets will rule. Money won’t keep you warm at night if those digital numbers all of a sudden get wiped out. I agree buying today is insane, but the blog dogs forget that there are legions of homeowners who are living mortgage free, investing in themselves and have the same long term investment strategy .. so the market drops .. big deal – I am in for the long haul…I came to terms that dedication and commitment will always prevail, and I climbed my own Everest and watching all the rest scramble below me.” – Just Park It at greaterfool.ca 12 Jul 2012 9:48am […]

#157 Westernman on 07.14.12 at 2:13 pm

Fort Mac Flatlander @ # 154,
Nope, not extreme, just simple facts stated accurately and without politically correct embellishment…
And as for your other concern, let me say this – you just look out for yourself and I’ll do the same …

#158 John G. Young on 07.14.12 at 5:27 pm

#157 Westernman on 07.14.12 at 2:13 pm

“Fort Mac Flatlander @ # 154,
Nope, not extreme, just simple facts stated accurately and without politically correct embellishment…”

As you keep telling us (actually yourself) over and over and over again.

It won’t make it true.

Ever.

#159 Westernman on 07.15.12 at 3:04 pm

John G. @ # 158,
Feeling pretty argumentative eh? All topped up on your magic medications with an extra load of smug, self-rightousness I see.
I submit you don’t know the first damn thing about Sask. so your drug-addled opinion of such is completely without merit…

#160 Marshy on 07.15.12 at 5:17 pm

Johhny D @11 & 141

Post anything about Saskatchewan and guaranteed you will get a post from Westernmoron. It is amusing for a little while but grows tiresome very quickly given the repetitive nature of his responses … “inbred retards” and so on.

He left another clue in post #134 that he just might be a nazi.

Just got back from a football game last night in Regina …. 32,000 fans (quite a few sporting water melons on their heads) watching the Riders beat the BC Lions.

#161 Westernman on 07.15.12 at 5:39 pm

Marshy @ # 160,
And after you paid a wad of money to watch this irrelevant spectacle can you tell me how your life was made in any way, shape or form better in any quantifiable way?
You spent hard earned money to watch a bunch of fat-ass college kids run around and fight over a football… don’t you feel like a real sucker?
You should…

#162 Leesa on 07.15.12 at 7:27 pm

Thank you for your comment Garth!