Pathetic

Gartho, your propaganda is still flowing here I see. The market is still hot but how can anyone get a fair analysis from you, gartho? they cant, keep flogging those preferreds as your banker buddies are exposed one by one. I’m sure you’ll be outed for your lying and fraud eventually as well. And your small dick. You have a lot to be ashamed of, unfortunately your arrogance wont let you recognize it. Here’s one, the fact that you’ve been lying to and manipulating your readers while being wrong at the same time, a juggling act I must say. How are those stocks working out for ya? oh I forgot, you’re in the ‘circle’, so I’m sure your stocks are doing jussstttt fineeeee. Pathetic!! — Mikey the Realtor

Rather than entirely pollute the comment section of this blog, I throw idiot remarks into a file. In 2011 it ran to 218 pages, single-spaced. So far this year (with five months to go), I’m at page 196. It’s a bumper crop. Realtors are well represented.

Seems a lot of people hate my basic message repeated often enough on this pathetic site to turn your mind into tapioca. To wit: a house is a really dumb place to have the bulk of your net worth, given the risks swirling around us. You will seriously regret not being liquid in the years to come. Worse, a housing bubble built on debt and cheap money, not income and economic growth, can turn quickly and destroy your family. Just as it has elsewhere.

If thinking this way shrivels your male organ, then realtors must have a serious drag problem.

The main problem in society isn’t that too few people have Wolf stoves, Miele dishwashers and Bosch dryers. Instead, it’s that most people have a woeful lack of net worth, the direct result of record real estate ownership. With seven in ten families possessing a house, many purchased in the last few years at escalating prices, savings and investments have been replaced by debt.

You know the stats. Total debt at 152% of disposable income. Mortgage debt topping $1.2 trillion. Consumer debt now 92% of the economy. RRSP contributions plunging. Ditto for the savings rate, now negative in BC. Six in ten retirees in hock, according to a new CIBC survey. Three in ten families struggling to meet monthly bills, while 38% have zero money put aside.

And yet 70% have houses. Notice a pattern here? House lust is raping us.

 The latest proof – car loans. For the first time ever people are routinely borrowing money on six or seven-year terms to buy machines which have lost 70% of their value by the time the loan’s paid off. Does that make sense? Of course not. But most consumers have little choice – they need cars, but have no money. Nor do they have enough cash flow to finance over 36 or 48 months. So (like with 40-year amortizations) they just spread the payments out. Hence, the 84-month mistake.

As JD Power told us this week, over half of car buyers now take out loans for more than six years, a massive increase from the riffraff who did so just five years ago. The reason is simple. Real estate ate all of their savings, and now consumes most of their cash flow. It’s “another sign that households are under tremendous pressure and that they’re finding any way they can to stretch out their payment or keep a lid on their payment,” says BMO economist Doug Porter. More concerning is the fact 26% of people now need to trade in a car even before it’s paid off – almost twice the number of five years ago.

So, household finances are disintegrating, even as people move into their mortgaged palaces. But these are just the early days of the personal financial crisis which is brewing. Let’s have a little look south, to see what a 32% decline in real estate values can do to a society in which most people thought a house was their retirement plan.

As US university prof Teresa Ghilarducci pointed out in a New York Times column on the weekend, 75% of Americans nearing retirement have less than $30,000 saved. Did you just absorb that? It means about 50% of all Americans will be living below the poverty line when they retire. This is what real estate did. Rather, this is what the absolute conviction that real estate was safe – safer than investing in liquid assets – did. When housing corrected, $6 trillion in middle-class wealth evaporated.

Of course, it won’t take a US-style housing crunch to do that here. Nor am I expecting one. We’re already nicely screwed when 84-month car loans are normal, when 72% of pre-tax income is required to own a Vancouver house and four-tenths of families have nothing in the bank. What happens when equity falls 15%, but the debt remains? What will people retire on if their houses go down, instead of up?

Why isn’t everyone asking these questions?

263 comments ↓

#1 TurnerNation on 07.23.12 at 8:32 pm

US yields crushed – again. Equity investors should be in a panic…

#2 Junius on 07.23.12 at 8:41 pm

Garth,

Thanks for posting the comment from ole Mick. He remains among the most detestable of realtor trolls on this site. Or perhaps I just haven’t seen them all?

You have no idea. — Garth

#3 Chris on 07.23.12 at 8:41 pm

“Why isn’t everyone asking these questions?”

Because nobody here (particularly the Lower Mainland) wants to hear the real answer.

#4 Ravishing Rick on 07.23.12 at 8:43 pm

Hey beard face… your best work yet.

Special thanks to mikey the realtor… I could feel your anger

#5 Nemesis on 07.23.12 at 8:46 pm

No doubt about it, when it comes to Jerks&Circles… MikeyTheRealtor is in a ‘special’ class of his own.

#6 It's again me on 07.23.12 at 8:46 pm

WE ARE SCREWED. MOST OF US. THE GOVERNMENT IS A THIEF.

Change what is in your own power first. Yourself. — Garth

#7 John S on 07.23.12 at 8:47 pm

Ouch… truth hurts, Mikey?

#8 Nemesis on 07.23.12 at 8:49 pm

maze?…. it’s “maize”… oh.

#9 B on 07.23.12 at 8:51 pm

Assuming the US claws its way back and the price of oil rebounds as well, where do you see the USD/CAD exchange rate going in the next 5 years?

#10 East Van on 07.23.12 at 8:52 pm

The real problem is that the 1% are stealing from the rest of us:
http://www.guardian.co.uk/business/2012/jul/21/global-elite-tax-offshore-economy
The are also suppresing democracy:
http://www.commondreams.org/view/2012/07/23

#11 bruce on 07.23.12 at 8:55 pm

At least in California and Florida when the real estate market went bust – it is warm year round – much greater differences temperatures year round in the great white north.

#12 Speculators of Canada Unite on 07.23.12 at 9:01 pm

Do not listen to naysayers! Sell and buy among yourself and make tons of money. Could anything be simpler than that?

#13 Einzatgruppen kanada on 07.23.12 at 9:02 pm

Stateside record number of Americans holding onto their vehicles 10 years or more. This is a big turnaround from the post war era.

#14 TurnerNation on 07.23.12 at 9:07 pm

As posted, yesterday: this must be Mikey’s other thread.

Not unexpectedly, ersatz blog dogs attacked.
“It’s just a flesh wound…” (M. Python)”.

http://forums.redflagdeals.com/will-garth-turner-finaly-close-his-blog-1205655/

#15 Oh! My! God! on 07.23.12 at 9:10 pm

Any normal person should not want to fart in its direction:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12172454&PidKey=1187825429

But someone may enslave himself for a lifetime to get this “charming updated” gem:)

#16 I will Gladly Pay you Tuesday for a Burger Today on 07.23.12 at 9:12 pm

Canadians have all their wealth in their houses, but they need a BMW or Mercedes or Audi to complete “the look”, so they are going for the 8-10 year auto loans now LOL.

Go Canada Go!

#17 Hannibal Lechter on 07.23.12 at 9:13 pm

DELETED

#18 It's again me!!! on 07.23.12 at 9:14 pm

Back to you Garth at #6:

Thanks for the advice. It’s especially valuable from a guy who could not get along with them as well. I’m trying man, but every time I think what they do to this cuntry, blood rushes to my head.

#19 Mister Obvious on 07.23.12 at 9:16 pm

Those hundreds upon hundreds of boxy condos along Vancouver’s Second Avenue (adjacent to the failed Olympic Village) are nearing completion.

Thus, the universe is unfolding as it should here in La-la. It’s going to be so exciting.

#20 Mark W on 07.23.12 at 9:16 pm

After six or seven years the vast majority of cars are worth a lot less than 30% of their original value.

Try 15% to 20% if they are domestic and wholesale values are even worse.

So your driving around in a car six or seven years old that will require major work, possibly a transmission rebuild (the average person drives 28,000 km a year).

Now you are paying this major repair money AND making payments.

Nothing wrong with public transit. Someone standing there with $2.50 in his pocket and no debts will have zero assets and zero equity once they get on the bus.

This is opposed to someone that owes $10,000 on a car they might be lucky to get $5000 for if sold.

Total valuation here is NEGATIVE $5000.

#21 Tim on 07.23.12 at 9:17 pm

The good thing about the downturn is that inbred idiots like this realtor won’t be able to make easy money selling overpriced real estate.

#22 Paully on 07.23.12 at 9:17 pm

What is it about posting online that makes so many people forget their manners? If someone said what he said to your face, I would fully expect it to end in a fist-fight.

If you wouldn’t say it in person, please don’t post it. Make sure that your Mama would be proud, not ashamed, of your online behaviour.

#23 Prepmonkey on 07.23.12 at 9:18 pm

I tried talking to two friends in very different occupations about real estate in BC. They both were very convinced that it is simply impossible to lose money in real estate, ever!

Yep…said my peace and took a deep breath..

#24 45north on 07.23.12 at 9:19 pm

Chris: “Why isn’t everyone asking these questions?”

Because nobody here (particularly in the Lower Mainland) wants to hear the real answer.

pretty funny

someone I know reminds me of the duck:

a big, grey wolf” does indeed come out of the forest. The cat quickly climbs into a tree, but the duck, who has excitedly jumped out of the pond, is chased, overtaken and swallowed by the wolf.

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

if you’re a duck stay in the pond

#25 Frank le skank on 07.23.12 at 9:19 pm

Any man with a small penis can’t be right. I’m out of here!

#26 mattymatt12345 on 07.23.12 at 9:21 pm

And… They will give the car loan to any one! My Bro. in-law has worked at cactus club for about 2 years PART TIME, and just got himself a new jeep wrangler new off the lot. 1 grand down, and the 84 month thing. They bent over… to sell him that car.
Tells you how the economy is also…

#27 GTA dude on 07.23.12 at 9:22 pm

Equities are not where you want to be. I’ve been preaching this since last summer. Hope you few that caught the blip cashed out – the worst is yet to come. China slowing, Europe crashing, USA when we look back a year from now will be shown to already be in recession. Sell you equities – sit on the sidelines and wait for the correction, then buy back in. Trust me, I’m a greaterfool.ca commenter!

Unless you have seven figures, forget direct equity holdings. — Garth

#28 mjg on 07.23.12 at 9:23 pm

@#8 – Thanks, I didn’t get it at first either. :-)

#29 Tim on 07.23.12 at 9:24 pm

Vancouver Waiting to Cash in on Surge in Travelers from China:

http://www.vancouversun.com/business/asia-pacific/Vancouver+waiting+cash+surge+travellers+from+China/6967614/story.html

Expected to double next year. The flood gates are opening up…

#30 OBSERVATION on 07.23.12 at 9:25 pm

Greeks in Canada have traditional ties to their old country and are well informed and aware what’s going on. It gives them some insight how things may go in Canada.

I noticed a spike in Greek selling in GTA. They sell businesses, houses, commercial real estate, social clubs , etc. They smell the rat I guess.

#31 NO CONDO BUBBLE IN T. = CONFIRMED on 07.23.12 at 9:25 pm

Garth,

RBC has just confirmed that there is NO condo bubble in Toronto. CONFIRMED. I repeat, NO bubble in Toronto. Thanks RBC!

Thank goodness they are looking out for us!

#32 mark on 07.23.12 at 9:25 pm

Yeah, I like the car loan one. Common sense tells you $100 a week into a savings account and in four years time you’ll have a new or near new car. But hey, run the juice on something that’s worth 15% less the moment it’s off the lot.

Or you can just drive a 23 year old, regularly serviced Toyota, like me. Minimal to insure, minimal to run and let your money do work for you elsewhere. The lady don’t like it, but she’ll appreciate it when the trade off is steak and not KD in retirement, that’s if her denture paste holds.

#33 OBSERVATION on 07.23.12 at 9:27 pm

Greeks are selling in GTA! Houses, businesses, commercial r/e. They know what happened in their old country and they smell a rat here.

#34 Tim on 07.23.12 at 9:28 pm

The beginning of the end…

China’s CNOOC Offers 15 Billion for Nexen

http://www.cbc.ca/news/business/story/2012/07/23/20120723-nexen.html

That’s right Harpo, keep the money and the good paying office jobs in Canada…not

#35 Editor on 07.23.12 at 9:31 pm

Well that explains the 22-year-olds driving all them fancy cars to go with all them fancy houses. Not only should folks be asking questions, they should think about the example they are setting for the kids. Who don’t need all them fancy things, but for some reason with their kid brains can’t understand that the fancy things are a debt-based illusion. That all them fancy people ain’t so fancy.

Is your name Jim-Bob? — Garth

#36 Great blog!!! on 07.23.12 at 9:34 pm

Garth, it’s too bad that I didn’t know about your blog before. It’s an eye openr. I just realized that one can try to open other people eyes with a pry bar, and it’s still not enough. People have propensity to believe in fables.

#37 Spiltbongwater on 07.23.12 at 9:39 pm

Why do you say 4/10ths? I was always taught to reduce to the lowest terms, calling it 2/5ths.

#38 Junger on 07.23.12 at 9:40 pm

But these days they give you 0% interest at 60/72/84 months. Why would you not pay as little as possible with free borrowing, then take the extra cash you would have spent at 36 or 48 month financing and put that toward your investments?

Most people finance over seven years because they don’t have cash to invest. — Garth

#39 Champs-Élysées on 07.23.12 at 9:45 pm

#173 Tania on 07.23.12 at 8:41 pm

“How about you guys who vacation in Europe, etc? Over 20 years, many of our friends will have spent $300,000 on “vacations” with nothing to show for it except photographs.”

Nothing to show but photographs? I take it you have never visited Paris, London, Rome and other European cities. Try some of the greatest architecture in the world, amazing cuisine, museums housing the greatest paintings, sculptures and archeological finds of antiquity. Perhaps visiting great universities such as Oxford and Cambridge, sites of wonder like Stonehenge, the grandiose Palace of Versailles, ancient castles all over the continent, Windsor Castle, the Vatican, the ancient ruins of Rome and Greece, and so on, etc. These European vacations give culture to a person in ways that no cottage in Ontario ever can. Cottages serve their purpose and do it well but don’t place them above European vacations or compare them. Apples to oranges.

#40 Van grrl on 07.23.12 at 9:46 pm

“As JD Power told us this week, over half of car buyers now take out loans for more than six years, a massive increase from the riffraff who did so just five years ago. ”

That explains why I’m a rarity in my 25 yr old car :)

#41 @tim on 07.23.12 at 9:47 pm

At least Canada still has RIM! (for a few more weeks)

#42 Led on 07.23.12 at 9:53 pm

I remember saying that real estate was overpriced in 2001, boy was i wrong. Are we wrong this time as well? will there be some slight correction and prices continue to rise? I am obviously trapped in a parallel universe where up is down, left is right. Canada is different. we are better than the rest of the world. it could never happen here. I will believe it when I see it.

#43 Johnny B Goode on 07.23.12 at 9:55 pm

Garth, Please ignore “Mikey the Realtor” as there is no substance or facts to support his post other than insult. Most realtors are low life lying scum bags and would hate you for telling the truth about where the housing market is heading….Please keep up your good work!

#44 wes coast on 07.23.12 at 10:03 pm

Hate mail like that is a sure sign you are on the right path.

#45 I'm stupid on 07.23.12 at 10:03 pm

Why isn’t everyone asking these questions?

Simple, most either don’t know, don’t care or are too stupid to do the math.

#46 T.O. Bubble Boy on 07.23.12 at 10:03 pm

Nice work GW Bush – homeownership society (and the eventual housing crash tied to it) really cemented his place as one of the worst presidents of all time.

Harpo, you paying attention?

#47 Axehead on 07.23.12 at 10:04 pm

Garth,

How did Mickey get that close to you with a measuring tape; what with dogs and alarms and Amazons with primative weapons of male destruction…I just don’t believe him.

#48 armpit on 07.23.12 at 10:08 pm

Let’s see….government reduces long term mortgages from 30 years to 25…..Cuts the HELOC maximum.

So why are they allowing car payments extended to 84 months? Kind of defeats the purpose of prudent credit management.

Housing bubble crisis looming…sound like the Automobile industry will be in crisis….again.

Watch out!!

#49 h bergquist on 07.23.12 at 10:09 pm

Gartho?

#50 Curious George on 07.23.12 at 10:10 pm

Feels like history repeating itself (USA, circa 2005).

The irrational rise of house prices, ridiculous “low rate” car financing, and the expectation of new immigrants and young folks to buy into this addictive fantasy of instant prosperity.

Hope it won’t hurt as bad this time around.

#51 Just Park it on 07.23.12 at 10:11 pm

I give credit to those who hold or invest in equities. Garth does sound convincing on certain investment strategies but I will be that “guy”who plays it safe, and maybe, just maybe come out on top. Something tells me we are nearing a major shift in the markets that even the most astute scholars will be stunned. I may sit with cash on the sidelines, making enough interest each month to have a nice fine steak dinner served to me and a night on the town…woohooo.

But, I must tell my fellow blog dogs, I like thousands of others own homes for comfort, security and little sense of ownership. If I cashed in my chips I would have easily have doubled my money since I purchased in 2002 – just about 10 years to the day. Nearing the end of this mortgage beast – I wonder why some here exert so much energy freaking out about total strangers and somehow fill in stories about them and how they will end up –

If you used that energy and built something constructive, money would be an afterthought. Your life would be filled with both financial and spiritual richness.

So, pay homage to those who have taken the high road, worked hard, played fair and bought something that technically none of us really own or can take with us – we are just a blip in the scheme of things.

As my neighbour told me many moon’s ago – we exert this unseen energy that most release, not realizing that to harness this energy would make you a king among men. Harness your energy and stop letting others steal it as you protray resentment, anger, denial or bitterness to your fellow man. Let those who chose unwisely deal with those consequences on their own terms – rejoicing in their defeat is nothing but a energy sucker!

Cheers, stop, consider what I have said, let it simmer and you will feel something new and magicial change inside of you – I gurantee it!

#52 Realtors in an all out PANIC! on 07.23.12 at 10:11 pm

Bloggers Spread the truth all over the internet. I am posting http://www.greaterfool.ca everywhere I can. Realtors and now RBC is in a huge panic. Garth keep the truth and facts coming and watch these uneducated realtors get even more angry. realtors are criminal scum who wish to steal from the masses. Realtors hate truth and facts. Spread the word blogger. Together we can get the word out and bring the criminal realtors down.

#53 Financial Uproar on 07.23.12 at 10:13 pm

I would like to request a sampling of the best insults posted online. That would be fun.

#54 Bend over on 07.23.12 at 10:19 pm

2010 poverty line was $11,139 per individual and $22,314 for family of four. Potentially 50% of Americans below this income is staggering.

#55 Van Isle Renter on 07.23.12 at 10:20 pm

The blog today reminds me of the daya couple of years ago when I went into Bass Pro. Nice beautiful bass boat and motor for sale. $240/month. Not a bad deal I thought, until I looked at the term …. 240 months…. 20 years.

Yeah… a mortgage on a fishing boat. In 20 years, you can look at replacing the motor, and then the boat. After that, it’ll be like brand new.

#56 MarcFromOttawa on 07.23.12 at 10:21 pm

#35 Junger

Car dealers will offer 0% financing for 7 years only at inflated prices. Anybody who’s bringing actual cash to the table is in a much better position to negotiate.

Not that buying a brand new cars is a good idea in the first place.

#57 Smartalox on 07.23.12 at 10:29 pm

@#31 Tim, you’re not seeing the other half of the picture: do you remember the changes to the temporary foreign workers program? You can bet that CNOOC will be bringing in their own people to work in the oil fields too. HAM in fort Mac anyone? Of course these workers will be accustomed to Chinese style management practices, and either what happens in the oilpatch would stay in the oil patch, and if the workers choose not to like it, they can always be returned to China.

Could this be why the Harper government kept quiet about the 30th anniversary of the adoption of the Canadian Charter of Rights and freedoms?

#58 Foggy on 07.23.12 at 10:30 pm

Mikey, Mikey….why all the anger? It’s just a discussion on the pros and cons of real estate. You know..like using facts, figures, history, logic….stuff like that. No need to burst a blood vessel over it. Nor any need to insult our host or the size of his member. Although I have to admit that I’ve never heard that line before.
Pretty clever for a 20- something who barely finished high school.
8)

#59 Housing_Bubble on 07.23.12 at 10:35 pm

That 84 month loan is a fantastic idea if you’re not stupid with your money and are already leveraged to the tits. At 0% financing, inflation chizzles away at the real value of the loan over the duration of the financing period.

#60 Christopher Lackey on 07.23.12 at 10:38 pm

Let’s see – $5000 in preferreds pays about $80 per quarter, taxes at a dividend rate.
That $5000 in a high interest savings account pays about $50 per year, taxed at your regular rate.
Or you could be paying the bank 3-5% per month on a couple hundred thou.
You have shown us this garth. Yet Mikey, flogging the last option, calls you the bankers buddy

#61 Cy on 07.23.12 at 10:39 pm

I just talked a 19 year old kid who makes twenty a hour out of leasing a forty thousand dollar car. Earlier this week I talked a twenty five year old man out of buying an overpriced house and sent his ass to this pathetic blog. Good karma is on the way.

#62 the greater fools on 07.23.12 at 10:40 pm

“It is much easier to fool people, than convince them that they have been fooled.”

#63 Stinky the Fish on 07.23.12 at 10:41 pm

DELETED

#64 AgAu on 07.23.12 at 10:55 pm

I am grateful to Garth for this blog. I may not always agree with his opinion, but the fact that he researches the topic before he writes appeals to me.
As for the “Mikey the realtor” post, I hope you guys get to follow stricter rules of engagement: if you declare a house is an investment, you should be required to put in writing clauses that exidt with mutual funds – the value of your investment may go down and the past performance is not a guarantee of future performance.

#65 Roial1 on 07.23.12 at 10:57 pm

#37Van grrl on 07.23.12 at 9:46 pm

That explains why I’m a rarity in my 25 yr old car :)

Not as rare as you may think.
Mine is 26 and a VW turbo deisel to boot.
Now thats CHEAP!

#66 John on 07.23.12 at 11:00 pm

“75% of Americans nearing retirement have less than $30,000 saved. Did you just absorb that? It means about 50% of all Americans will be living below the poverty line when they retire. This is what real estate did. Rather, this is what the absolute conviction that real estate was safe – safer than investing in liquid assets – did.”

———-

Hold on a second there. Freeze that assertion, because it isn’t true. This was not caused by “real estate”, it was caused by the rigging of the system to create cheap money….buying real estate or not…selective investing or not…savings or not….selling…renting…preferred shares etc.

None of this deals with the issue.

Fully five percent of the comments here deal with reality ( also providing great links). That’s a huge amount, and as things unfold it will grow.

People are not above or below water because of “real estate”. As hard as it may be to believe, this assertion is false.

It’s out of context. And there’s a point where it won’t be plausibly able to remain out of context.

#67 Not 1st on 07.23.12 at 11:05 pm

Garth, I can assure you that people are not using those 84 month terms to buy chevy cruise. Every other person has a lexus, BMW or audi these days.

I have to laugh at the millenials who live at home, serve tables part time and yet have enough cash to drive a $70k car. yeah right. They haven’t seen any of life’s real expenses yet.

#68 ANONYMOUS on 07.23.12 at 11:07 pm

To Garth : you are so correct with what you said about consumer’s and their cars and of how their new houses are eating up all of their cash flow.

It is all following the same vicious trend at in America: first the manufacturing jobs disappear, then everyone gets new jobs in House construction / house sales / house something-or-other , and then ‘BOOM’ = the real estate market bubble pops and all of those jobs go along with it. The problem is that 30% of the public now don’t have a job, and there is no manufacturing to go back to, so those 30% are PERMANENTLY out of work (until they die off 2 or 3 decades later), and this is EXACTLY what is happening in America, and what will happen here in Canada soon too.

As for equities: If you blinked, around 10:00 am was a wonderful buying opportunity for stocks today, prices were really low. Remember; buy low and sell high, don’t buy high and sell low as so many others tend to do these days.

#69 Jon B on 07.23.12 at 11:11 pm

I thought those late night “two easy payments of $19.95” tv infomercials catered to a small group of economically challenged folks. I guess this segment of the population is growing. This will get interesting.

#70 bclandguy on 07.23.12 at 11:14 pm

#10 bruce

I totally agree, I spent some time at my uncles place in Bradenton Beach FL, it was nice and we should have moved there when we had the chance, that was many years ago and life went on. But for some reason I allways regret buying that place on the beach from my uncle, but I could not afford it at that time, big mistake on my part. I still love FL!!

#71 Smoking Man on 07.23.12 at 11:15 pm

#49. Please tell me your hair is not painted orange

Mikey. Nice

Garth even nicer for sharing it

This pathetic blog aint so pathetic free speech allowed

Love it

#72 So sad on 07.23.12 at 11:18 pm

We were chatting to the latest bright young “investment consultant” at the bank here in Cookiecutterville the other day. She was so disillusioned because so many of her potential customers are so deeply in debt that they will never be able to pay off their debts let alone save for retirement.

#73 City Slicker on 07.23.12 at 11:20 pm

#45 armpit on 07.23.12 at 10:08 pm

Let’s see….government reduces long term mortgages from 30 years to 25…..Cuts the HELOC maximum.

So why are they allowing car payments extended to 84 months? Kind of defeats the purpose of prudent credit management.

Housing bubble crisis looming…sound like the Automobile industry will be in crisis….again.

Watch out!!
———————————————————-
Its all a form of quantitative easing, keeping the economy going through artificial inflation. One bubble to the next until we reach economic armageddon. But hey it buys time.

#74 daystar on 07.23.12 at 11:25 pm

Gartho, your propaganda is still flowing here I see. – Mikey the realtor

Hmmm… personalizing…. using the word propaganda as a smear, has a narcissistic flavor to it and a possible psychosis. Lets see if there is a psychotic break developing here.

The market is still hot but how can anyone get a fair analysis from you, gartho? – MTR

The market is cooling throughout Canada now as RE pumpers/media scramble to fudge, smudge and obfuscate the numbers. More evidence of a psycotic episode here with narcissistic potential.

“they cant, keep flogging those preferreds as your banker buddies are exposed one by one.” – MTR

Personalized bitterness here morphing into a scapegoat attempt. This line has a narcissistic flavor backed by a psychotic delusion. It appears that Mikey’s psychosis is fed through a thirst for narcissistic supply. Suffering from an abysmal low self esteem, Mikey tries desperately to inflate his ego through the deflation of Garth’s character and position.

I feel for him.

“I’m sure you’ll be outed for your lying and fraud eventually as well. And your small dick. – Mikey the realtor

A Classic attempt to inflate through deflation. Weighed down with low self esteem, Mikey launches a desperate attempt to remain buoyant and strains to keep the ego afloat through deflation and devalue.

“You have a lot to be ashamed of, unfortunately your arrogance wont let you recognize it.” – Mikey the realtor

Another desperate attempt to inflate low esteem through deflation. In typical narcissistic fashion, Mikey needs to cheapen, minimize and devalue in order to have value, self worth. Low esteem is the root here.

It saddens me.

“Here’s one, the fact that you’ve been lying to and manipulating your readers while being wrong at the same time, a juggling act I must say.” – Mikey the realtor

Another Re-up attempt to inflate self esteem through deflation revealling a consistent pattern of pychosis created for narcissistic supply. Self projection and self absorbsion are typical signs here.

“How are those stocks working out for ya? oh I forgot, you’re in the ‘circle’, so I’m sure your stocks are doing jussstttt fineeeee. Pathetic!!” — Mikey the Realtor

I for the life of me can only remember Garth pushing equities as an asset class on this site three times. November of 08′, March of 09′ and October of last year. All three times were obvious market bottoms. Has Garth owned equities himself in the last couple years? I don’t believe so but I digress. More personal attacks evidenced here, most likely due to a NPD.

Drowning in low self esteem, Mikey struggles for narcissistic supply in a desperate bid to inflate through deflation. Feeling pitifully inferior and inadequate, Mikey’s despondence and atrophed self hope projects personal attacks towards Garth in one final bid to reinflate. This appears to be a case of cerebral narcissism with a developed pychosis developed through personal envy. In fact, what I see here smacks of envy as I profile.

Mikey’s continuous character attacks suggest an obsession with superior intellect driven with the belief that superior intellect commands superior, perhaps absolute power, that which would then be recognized as supporting self worth. In essence, superiority = worth.

On the surface, its pathetic but the greater reality is, its tragic.

NPD traits:

– grandiousity
– arrogance
– preoccupation with success
– a lack of empathy
– a belief of being unique
– a sense of entitlement
– requiring excessive admiration
– exploiting others
– being envious of others

– controlling
– challenges authority due to the need to control
– never admits fault
– never accepts responsibility

NPD’s usually lack the ability to fully self assess themselves, having very little if any capability of self introspection. They lack the ability to step aside and look at themselves and see that they are the source of their own misfortune, defeat and troubles. Traditionally, NPD’s are unable to sustain long term relationships or work in teams. They are usually unable to hold down a job long term. The often result is a social recluse. Depression and pervasive sadness is common. In essence, for the NPD, it ends badly.

There is a history of Mike the realtor’s obsession with superior intellect blended with envy in the archives that has helped to create a psychosis or “false reality” that is typical of the cerebral NPD’s pathetically desperate bid to inflate low self esteem when the reality based argument fails. What readers need to understand in dealing with such individuals is that they outwardly project superiority and as such have a noteable superiority complex while inwardly, it is the opposite. NDP’s feel quite inferior (low self esteem) and their behaviors reflect this 1,000 times out of 1,000.

I believe Mikey has potential to heal from this, but only through a therapist that is a master at self introspection. I’m also suspecting stimulants, possibly a high caffeine intake coming into play or something stronger?

But I wander. This is RE blog and I shall try to make some kind of attempt to stay on topic. :)

Garth, one of the things I’ve most consistently enjoyed is your eye for the macro. Excellent piece once again and I do hope you don’t take haters to heart. Some of these people aren’t in their right mind, pure and simple. Any time a subject deals with possessions,, securities, intellect and scotch fuelled ego, it will attract some individuals who aren’t well. Its the nature of the beast. Thanks again for your perseverance Garth and the best of summers everyone!

#75 tkid on 07.23.12 at 11:26 pm

I too would like to see an all-time best insults post! There must have been some doozies over the last few years …

#76 Don on 07.23.12 at 11:26 pm

I don’t think people really want to know the truth of what’s coming. What happened to the US, isn’t Canada even though we are following down the same path. Gotta wonder if it is pure blissful thinking or they just don’t know any better. I hope it’s blissful thinking!

On the lighter side: Mikey…not even a good RANT man. It’s OVER. Let it Go.

All the people I warned are now thanking me, and Garth deserves some of the credit for sharing the knowledge.

Mikey: Thanks for the laugh. I need to see more of Mikey’s posts.

#77 Retired Boomer - WI on 07.23.12 at 11:27 pm

Poor Garth,

I never had any idea he was getting hate mail from mere Realtors! I recall reading several of Mickey’s posts in the past, nothing memorable for me, but then I am just a dis-interested party.

I like cars much more than houses. While a smart guy can make an income off of property rents assuming he bought it right, etc etc I see a car as an absolute expense! I just counted up the metal in my past…we are at 63 now. 45 years of driving, the bulk of it on the road earning a living.
That includes 19 new cars the rest various shades of junk.
The money spent (wasted perhaps) would have bought my last house!

Today, keeping a car for 200 thousand miles (US) is not a big deal. PAYING for one over 84 months is financial death. Most auto loans are front end loaded with interest here in the states.

I once had a car loan for 48 months but, paid it off in 38 months. THAT was the last car loan.

Decided then to save the car payments I had been making until I ‘needed’ another ride. Then 5 years later I just wrote a check for the new ride, and put the excess savings toward the future replacement. That was in 1998.

No car loans since then. No, I don’t have the newest rides, but they are close, a 2010 and 2009 and two 2004’s.
Me, wife, kid and a spare. All bought used, usually off lease (let the other dude get the big depreciation kick).

So, the idea of trying to reduce debt works with the house too. Pay a little principal each month extra it comes off the back end of the loan.

You will not HAVE money unless you decide to SAVE some for yourself, sorry guys, but the money tree died!!

Then, you can do stupid stuff like buy McDonalds stock like I did, again today! Will it be a wise buy? Who knows.

#78 John on 07.23.12 at 11:27 pm

T.O. Bubble Boy wrote:

“Nice work GW Bush – homeownership society (and the eventual housing crash tied to it) really cemented his place as one of the worst presidents of all time.

Harpo, you paying attention?”
————

This, to me, is beyond a May 2012 bidding war for a Toronto crack shack. The understanding of the actual situation is so weak, so uninformed, so removed from reality, that it’s mind-boggling.

This poster is talking about Stephen Harper.

Anyone catching how odd that is? And this is someone who knows about the real estate bubble, and has for while. Yet knows nothing about the real situation.

They also believe that George W. Bush pushed home ownership. That Bush was a driver in anything. That he wasn’t a mouthpiece.

Surely a substantial amount of people reading the blog know this…don’t they? Why is there no sustained debate on it? I don’t get it at all.

#79 Harry Palms on 07.23.12 at 11:31 pm

#51 Bend over on 07.23.12 at 10:19 pm
…….Potentially 50% of Americans below this income is staggering.

The blog entry actually seems to state 50% of Americans retirees would be below the poverty line, not 50% of Americans.

Still staggering.

#52 Van Isle Renter on 07.23.12 at 10:20 pm
………..Yeah… a mortgage on a fishing boat. In 20 years, you can look at replacing the motor, and then the boat. After that, it’ll be like brand new.

The only thing that depreciates faster than a domestic car is a fishing boat. The “cottage toys” market is the one that’s actually easy to time, just watch for massive layoffs of well paying blue collar jobs, and swoop in with cash.

As for those 72 month plus car loans – they’re so desperate to move new cars, they’re giving you 6 year money for “free”.

Unbelievably, even after beating the shit out of the sales agent and manager on a cash price, they even let me have the 0% financing on the same bottom line……dealer’s position was that the loan subsidy is an incentive from headquarters. They pay the same costs and record the same revenue no matter whether Harry pays cash or Harry’s lienholder pays cash.

What the hell? Free money over 6 years certainly beat having to scratch my head over what holdings to sell to raise the cash!

#80 John in Mtl on 07.23.12 at 11:42 pm

I sold my condo a few months ago and am now all liquid and will rent for a while. I’ve conservatively invested the product of the sale.

But even conservative investment has me worried….. Given the state of world finances and that its all a rigged massive Ponzi scheme anyways, fiat currency that is worth what? and what will it be worth in a few months, a few years (if the system survives that long)?

Garth keeps saying the banks will not fail. TBTF, like in the US, banksters have us by the balls anyways? Its no secret anymore that the government will always bail them out to prevent an economic armageddon. Hell, they sleep together, always have. But who pays in the end? Us taxpayers! And the 1% party on. But we’ll pay with misery and hardship this time, ’cause there ain’t no money, real money that is – money is “debt” right now, debt is the only thing that keeps this system destined to crash and burn, running. Its all fake.

So I wonder after all if it may be more worthwhile to buy another home (its a shelter, not an investment), move to a small community where there is still a sense of “neighborhood”, buy gold or as many useful and basic things as possible so I can barter when the fiat finally fails (because it will fail, just a question of when). I don’t need much and I have very useful knowledge and skills that will enable me to continue living with a decent quality of life when the system eventually fails.

Doomer? not quite – anyone can stop being “busy”, can observe and gather information then draw some conclusions as to where all this is going.

John

#81 tundra pete on 07.23.12 at 11:47 pm

Just wait. Soon it will be different here. Very different!!!!

#82 Inglorious Investor on 07.23.12 at 11:54 pm

You know how cool it is to read Garth’s blog while listening to Rise by Herb Alpert. Makes you feel mellow, like everything will be juuuuuust fine.

Even though most of us are comfortably screwed.

Personal finances have been deteriorating for years. Why do you think interest rates are so low? Remember, interest rates are the prices for money. When demand grows slower than supply for any good, prices drop. And money is what banks sell.

There’s plenty of credit/debt/money in the banks warehouses. But fewer and fewer takers. Would banks effectively try to stuff money into people’s back pockets when they weren’t looking if those people actually wanted as much as the banks had to sell?

At some point, people won’t take it even if it’s free. Oh wait, we may already be there.

So with housing at saturation, watch banks find new and imaginative ways to lure you into even more debt as they clamour for those last precious disposable pennies that you have.

Here are some ideas for the loan mongers at our hallowed (or is that hollowed) financial institutions:

• 2.9%, 25-year financing (OAC) for iPad 2s
• 3.5% loan for any business idea rejected by Kevin O’Leary.
• 5.5%, 30-year mortgages for multi-brood bird houses (appraisals required).
• Home Equity Line of Credit–on someone else’s home.
• 4% student loans for online Wikipedia-based education.
• Overdraft protection for your daughter’s piggy bank.
• The “Pooch Advantage Plus” credit card for your dog.
• Special, low-rate, 30-year mortgages for first-time shed buyers.
• The “No Questions Asked” drive-by loan window. Just ask for Sal. You’ll get a really good vig. (Must supply names and addresses of at least three relatives)
• The Rest In Peace loan. You never know what expenses you’ll have it the afterlife. Kids to co-sign.
• The MYBOR Name-Your-Own-Rate overnight loan. You pick the rate. We pick the amount. (There’s no reason this can’t be fun.)

#83 Poorboy on 07.23.12 at 11:55 pm

#53 MarcFromOttawa

Myth. Dealer does not care how you pay – whether you pay cash or finance has zero affect on their bottom line when buying new cars. All that matters is the price you agree to pay as that is how the dealership/salespeople make their money.

I agree that buying used (especially the 3 year old sweet spot) is a better idea for most people, but like everything else there is a huge market of people who don’t have any savings.

Those of you buying new:
1) If you are prepared to be patient, not so picky and don’t mind haggling – try to talk to the fleet manager at the larger dealerships. You can actually get new cars less than what the dealership itself paid if you take overstock off their hands.

2) If you are like most people who want it now and suck at negotiation, go to Car Cost Canada and get the invoice report. That tells you the dealers cost for the car – bring a copy of it and tell them what commission you are prepared to pay on top of that right up front along with the report – be prepared to walk. Remember, dealerships have carrying costs, profit margins and sales guys gotta eat too.

Also call around to all dealerships in the area and ask them what color and trim combinations they have for the car you want. The goal is to get a rough inventory count of what’s available to drive off the lot today to give you a good idea of how much supply is available.

#84 craig robinson on 07.24.12 at 12:01 am

Garth; since 1975 we have vacationed numerous summers in the BC interior, mainly the Kootenays and OK. The recreational properties were always well advertized in the real estate mags, prices were always up, up and away. Two weeks ago during a driving tour from Kelowna, Nelson, Balfour, Kootenay Lake, Creston, Cranbrook, Canmore – without question there are currently more recreational property listings than ever before. Waterfront, waterview, you name it – take your pick – so much for the sales pitch that they’re not making anymore waterfront.

#85 TNT on 07.24.12 at 12:04 am

Mike’s reference to your organ size clearly shows that he has a penis fetish, fantasy. It sounds like he should be put under house arrest.

#86 cdub on 07.24.12 at 12:11 am

posting # 56 – can you please amend name to cdub

#87 What to do... on 07.24.12 at 12:20 am

Thanks for sharing the post Garth.

I see two scenarios:
1. Garth is wrong and so are its pathetic followers, myself included. If we are wrong, I will admit to it. Garth, will you?

2. If we are correct, how do you propose we view/act all those idiots for buying real-estate? I mean, these are the same people who drove up real-estate prices and either a) priced us out of the market, or b) cost us 100’s of thousand more money to own. Do we show them compassion (families or seniors who kicked out of their home, people losing jobs, etc.)… or do we snub them and say “deserves you right?”

#88 DDCorkum on 07.24.12 at 12:23 am

Earlier this year, I bought my first car. I had the money saved up to buy it with cash, but I realised something was wrong when they offered “zero” interest. Why would anyone offer anything less than 2% for a six year loan?

Well so be it, if they want me to keep my downpayment at their expense, then that’s exactly what I will do. I’m investing the downpayment and using the income to offset the biweekly payments. Their loss.

#89 Mr Buyer on 07.24.12 at 12:23 am

#39Led on 07.23.12 at 9:53 pm
I remember saying that real estate was overpriced in 2001, boy was i wrong.
………………………………………………………
I do not think you were wrong. Real Estate was overpriced in 2001 and we will likely see that as prices past those levels during the crash that is now upon us.

#90 Joseph on 07.24.12 at 12:28 am

Ok, my two cents.
What I find interesting is that in the discussion of real-estate, one thing is never mentioned. That of Parental help or inheritance.
One of the reasons why so many people own homes today is because, most people have gone to the “Bank of Mommy and Daddy” to put a hefty down payment. The other reason is inheritance.

What I am trying to say is they come in to homeowner ship with a strong position. I moved to Toronto in 1985 when I was 20, since that time, I have met only TWO People , that paid for a house on their own. That’s right folk’s, two people.
When I say, on their own, I mean just that. No parental help, No inheritance, just hard work , savings and living in a not so popular area.
I have had a friend who has had two houses purchased for him. Not outright, but the down-payment so that he just pays mortgage.

I for one, am not blessed with this “Birthright”. One time about 5 years ago, I got lectured from a guy telling me that renting was for idiots, when he found out I was renting. He told me that he owned a house and was renting it out for extra income.
Because I know how to ask the right questions, I find out he lived at home in Mommy and Daddies basement and that they helped him to put a huge down payment on the house that he was renting.

Wow, big man on Campus !!!!

In the Annex, for example , let’s see you buy a semi detached, fix me up, on a drive a taxi wage, with out help. I wish you the best of luck !
Yes, it was possible at one time.

Sorry, for the rambling but let’s be honest. A lot of people have gotten help from other sources even though it might not be “Hip” or “Cool” to admit it.

Keep that in mind when discussing why so many people have managed to hold on to their “Goldmine” properties.

Peace everyone !

#91 P & T S on 07.24.12 at 12:30 am

Whilst “on paper” having an 84 month (or maybe even more?) loan on a “depreciating asset” such as a car or truck may seem silly, just hold on for a moment and consider the “loan” on the other depreciating asset mentioned oft times here – your “Home”. Both will require maintenance, both will require insurance, both can (albeit at a pinch!) provide “some degree of shelter from the elements”, however only one can provide you with a safe and nowadays very reliable (and durable) means to get to where you can make your money.

Citing “Public Transport” is great for those in metropolitan centres where such beasts are commonplace, but for those in the more rural locales, public transport just ain’t so common (nor is it frequent) so that’s another factor to consider.

There are those who will (maybe must) buy secondhand, and those who must buy new. Both strategies have their advantages and disadvantages, and be mindful that low mileage or ex-demo. secondhand are often not that much cheaper than new (and they often lack any extras such as extended warranties, agreed servicing costs, etc.) that new purchases attract. Add in a poorer trade in arrangement, and no definite knowledge of prior user characteristics, and all of a sudden the “big savings” are not so big after all.

As an aside, maybe Mikey the Realtor isn’t really a realtor, but might be a “plant” whose actions are intended to foment anti-realtor sentiment? He does seem “exceptional” even by Aussie / NZ standards, which might indicate a suspicious intent??

Go on Garth – give us all a (de-identified of course) “sample” of the worst of the worst (which we suspect might qualify for the UK “X” film rating (Aus / NZ MA15+ Rating)). It would certainly ram home the message that things are hurting a “certain sector” of the bubble economy – we’re betting you’ll get to 300++ pages of “hate mail” this year easily!!

Whatever happened to the old US “ideal” of needing about $1 million in productive (i.e. yield-generating) assets as a minimum for a couple to retire on??

How many near retirees in the US can even cobble together $100,000 in assets between two??

And with the “slimming down” of entitlement payments Worldwide it’s not just the elderlies in the USA which will be suffering – this particular contagion has spread throughout Europe too, and is making its way to Australia / NZ.

For many the start of the 21st Century will be remembered as NOT a good time to be elderly and of “average means” Worldwide.

#92 Carpe Diem on 07.24.12 at 12:30 am

I’m a top 5% with a 1999 car.

Everyday this car gets me fro A to B. Meanwhile, my hot, younger wife drives a Dodge Grand Caravan and hates the lemon. Maybe I should should have gone Toyata or Mazda. After seeing the scratches and dents done my 3 kids, I’m happy spending less and milking that sucker.

My 1999 Mazda Protege is going on strong and love this babe …. If I can keep her for 10 more years, the wife can get the new Ford Escape when the kids no longer need seats and such.

I’ve seen the articles regarding 14% 5 years ago to 50% of people having +6 loans for cars. My thoughts are simply losers and idiots would go for that.

My 7 year old kid asked me why so and so parents have nice vechiles and I have an AtoB car. I tell my kid the money is being saved for your University Education. That is worth much more than me driving a kickass car or me having to work 5 more years to pay shit off.

I think he gets it.

Do you?

#93 Sockeyemoon on 07.24.12 at 12:30 am

Just read an article on Marketwatch recapping how Canadians have greater net worth than Americans (I guess we thank the Bubble God here). But if we go the way of the US, Ireland ( remember the great Celtic tiger?), Spain, etc. we certainly will lose that status.

Furthermore, with our bank accounts empty we certainly won’t be buying Blackberries or Lululemon clothing.

So, is it time to short the market? HXD anyone?

#94 Nostradamus Le Mad Vlad on 07.24.12 at 12:33 am


“Pathetic!! — Mikey the Realtor” — Yeehawwww! Mikey the Pathetic Realtor, whose mind is filled with tapioca and raisins with cinnamon sticks protruding from his ears, plus facial expressions which are identical to limp, flaccid, shriveled up male organs, has reclaimed top spot for having the same IQ as an eaten corn on the cob! BPOE is runner up, so let’s give these two outstanding dweezilbulbs a nice round of applause, just for showing up!

“But these are just the early days of the personal financial crisis which is brewing.” — Orson Wells was right — Good Wine Takes its Time. Takes around a dozen or so years for malt whisky to mature, so we’re right on track.

“Why isn’t everyone asking these questions?” — Because they are dumbed-down sheeple, who follow orders without questioning or using critical thinking skills. Too lazy to think for themselves, they prefer others (TPTB) to do it for them, which is why it is so easy for them to manipulate sheeple.
*
Following up on #31 Tim’s links; Bernanke What, with QE3 on the horizon then using that QE3 to buy one’s own T-Bills, life must be tough; Pension Shortfall; Growth Hormones are dwindling; Strong Recovery for Housing says GS. Fine. Where are the jobs coming from to pay for these new homes? Cdn. Banks lose trust; The US Fed destroyed Libor; DOW at 20K? Uncomfortababble Spending The future doesn’t look much better; Ex-IMF Calls it right; China Migrant workers going home; Bear Stearns Where are the bad boys now? Ron Paul, Libor and debt scandals.

Median Wealth Chart of the Day; Physical Silver Market is tight; Lost Growth in UK (lost decade?); Paying cash in hand to avoid taxes, but politicos are morally reprehensible; McDonalds and Coke Hurt by slowdown; EU banking union What on earth for? Euro and Global Slump; Domino’s Pizza Doing well in London; Rothschild Making money hand over fist; Raffle To See Who Will Be Paid First An idea whose time has come? spain in Germany grovelling; Austerity hits Computer / Chipmakers; Smaller Paycheques at GS; 14:53 audio clip Negative rate could be (are) deflationary; Bln. Dollar If the coffee’s good, it’s worth it.
*
Egypt lifts blockade of Gaza; Taj Mahal from the air; Critical Thinking and Monsanto; Ten Super-Junk Cars; House Cleaning By a robot? Chicago Map Not my kind of town; 4:48 clip The secret city of London; CC Propaganda “How much can we screw out of future taxpayers?” Bill Gates focuses on GM crops for Africa, while Melinda is rooting for depop; Sharks Alive! ‘Tho this one doesn’t eat people; Agenda 21 is the NWO; Global Weapons agenda in the hands of nutbars.

#95 aaci-home dog on 07.24.12 at 12:36 am

48 just park it
Well said…

#96 BigAl (Original) on 07.24.12 at 12:39 am

Mikey’s not too different from many of the blog dogs on here in how they attack the ‘herd’, is he? I can’t tell who’s more frustrated, bitter, and angry any more. The anti-Garths or the pro-Garths?

#97 Debt Slave on 07.24.12 at 12:45 am

The Canadian governent actually planned this years ago to get everyone mortaged to the hilts so every one is a debt slave.Thats the truth.

#98 Nodebt on 07.24.12 at 12:48 am

DELETED

#99 Canadian Watchdog on 07.24.12 at 12:51 am

Here comes those Brampton foreclosures.

http://postimage.org/image/p7bcpn93v/
http://postimage.org/image/8hlz0r4l3/

#100 ex bc boy on 07.24.12 at 1:03 am

the people I mistrust the most are realtors and bankers. they push to buy and push to loan. funny, I actually trust lawyers. they have been good to me.
tommorrow The National is having a round table discussion on consumer debt levels.

#101 Superman on 07.24.12 at 1:08 am

MOI in Richmond is approaching 20

#102 dosouth on 07.24.12 at 1:09 am

…and RBC steps into the fray – nothing to see here, keep on buying, we need diapers for our children.

http://tinyurl.com/cw3kp5w

#103 Motzu on 07.24.12 at 1:26 am

Hi Garth.

Just (another) quick thanks for this flashlight in the dark.

For years I ask myself : If 70% are owners, 70% dont care anymore about common sense. They are only playing for themselves. All they want to hear is +x% a year. Where common sense will come from then ?

Its like a collective psychosis.

They dont care about the young couple in their early 30s who will buy their house. “They will do the same”.

No. They cant. Pick you old calculator in the drawer.

Game over.

#104 Jimmy on 07.24.12 at 1:41 am

My RN friend at the UofA hospital in Edmonton Alberta bought a carriage home style condo in 2008 for just under 300G (5% down 95% financed) on the advice from ma and pa that RE never goes down. Now she can’t sell it without taking a HUGE loss, or rent it out for enough to cover the mortgage, condo fees and taxes. They need to sell bad as she’s already into a 2nd property to live in with her new man (portfolio diversification I guess- the property not the man). It’s easy to see. Why all the deniers? Oh yeah, it’s a RE scam lol. Suckers born every day. Meanwhile my Canadian resources mutul fund (yeah yeah I know) is cleaning up with some nice growth (up and down but what aint). I’m a peak oil believer, just like the Chinese gov.

#105 EW on 07.24.12 at 1:44 am

We human beings are short sighted. We live for the now, not the future. Our expectations are too high, we are full of pride and cannot humble ourselves to live lower or differently than we are used too.

I am saddened to hear how my fellow Canadians are becoming more, and more indebted. It could be the pressure to have a house, a fancy car, or the latest gadget. Dept isn’t good. It’s terrible. It enslaves the borrower to the lender. Canadians are willingly giving themselves to slavery and just so they can own a fancy car. I can’t believe it.

I am glad that I have a choice not to be a slave. That is a wonderful thing about Canada. It also makes me happy to see people like Garth who are asking these tough questions. I have these questions too!!!

As a person in my early 30’s, it can be difficult sometimes living in a one bedroom basement suit, a child on the way, and family to entertain from out of town. It’s hard having mom/dad over when they don’t get their own room and have to sleep in the living room. It’s very humbling. Just wondering how they are going to like sleeping in the same room with the future grandchild?

We drive a 13 year old car and it get’s us from A to B. My wife and I both grew up camping and we love it. How does this relate to the car? Well it’s difficult to go camping in a small car. By the time the car is packed, there isn’t much room left. Oh yes, next year there will be another little person coming along too. How are we going to fit everything next year?

I am under the same pressure everyone else is under but I am not going to spend my savings on something that doesn’t make sense.

Think houses are bad? Ever thought of camping? Camping used to be cheap. Now with provincial campsites costing up to $30 a night. Do the math on $30 a night. That’s $900/month to sleep outside in the elements. A good basement suite can be rented for that price. What is the world coming too?

Why does everyone in Canada think that Canada is better than Greece / Spain / Italy? We have the same bad attitudes. How long before it is us?

My question to you Garth is this: What do you think would happen if the various Canadian municipal, provincial, and federal governments stopped borrowing money, and started saving for the future? Could our governments become somewhat financially independent just like most financial advisers hope we will be one day??? I know this would hurt. It hurts living in a basement suit and driving a 13 year old car.

In the future it will be worth it!!!

#106 bill on 07.24.12 at 1:44 am

mikey is a sore loser.

#107 Soylent Green is People on 07.24.12 at 1:53 am

My car is 14 years going strong, get some PTA bullying from a few moms

Eff them

ps lolololo re

Is your name Jim-Bob? — Garth

O
O
O

#108 a prairie dawg on 07.24.12 at 1:56 am

lol @ Mikey the Realtor

– — –

Your 6-8 weeks of grueling RE license training has taught you much. At least about license training…

And Jack is a complete stranger to you.

#109 earlymidlifecrisis on 07.24.12 at 2:02 am

Wow, what a dick. So- am i at least on the ‘safer’ side if i stick to foreclosures? I’m ok with bottom feeding, not like i haven’t had to do it before.

#110 Last (now that first is gone I need a new name) on 07.24.12 at 2:08 am

84 MONTHS are they insane, wife and I just bought our second cash car!!! No more bank loans for us

#111 Freedom First on 07.24.12 at 2:12 am

To Mikey the realtor: ……Mikey…Mikey…Mikey…..do you not know, that people who speak the truth, as repulsive as that is to the people who are adversely affected by the truth, such as yourself,….. well, the “Truth Messengers” are impervious to people such as yourself, whose only retort to the truth messengers……is to try and shoot us. This is because you lack ammunition…..the ammunition being both the truth, and brains. Of course, I would not say this if you had not already proven this with your childish rant, which Garth is man enough to expose at the beginning of the post today, knowing it is you Mikey…..that, how shall I say it….”Mikey, you are not on the side of truth”.

#112 thinker on 07.24.12 at 2:26 am

Garth, the better analysis might have been to view renting vs buying a car – looking at tools of modern finance available is hopeless, as we will continue to get infinite ways to get something in your hand vs the smallest payment.

The best defense for the hate spam is best to show weak points in the market. Let’s see if we can some stories from folks who can’t really do much because financing a home has trapped them. Or stories about job loss that cannot be recycled back into work

In about 4-5 weeks, you will have an inbox of resumes from Baystreet folks. I can confirm the firings have started, as I doing about 3 a day.

#113 a prairie dawg on 07.24.12 at 2:27 am

#38 @tim

At least Canada still has RIM! (for a few more weeks)

– — –

They’ll survive. Within a few years, a whole bunch of realtors will get RIM jobs…

#114 Aussie Roy on 07.24.12 at 2:36 am

Aussie Headlines

Aussie central banker tells the delusional

House prices can’t fall (it’s different here) is a ‘dangerous idea’: RBA

The Reserve Bank says housing prices may fall further and believes it is risky to assume they won’t.

“It is a very dangerous idea to think that dwelling prices cannot fall,” said RBA governor Glenn Stevens said in a speech today. “They can, and they have.”

“We should never say a crash couldn’t happen here, and the Reserve Bank continues to monitor property markets and the performance of mortgages quite closely,” said Mr Stevens.

Home prices in Australia have fallen 5 to 10 per cent from their peak, compared with 15-20 per cent in the UK and 30 per cent in the US, according to the RBA.

http://www.theage.com.au/business/house-prices-cant-fall-a-dangerous-idea-rba-20120724-22m9v.html

#115 FTP - First Time Poster on 07.24.12 at 2:41 am

Guys w. small d*cks are easy to identify here in Alberta – they’re the ones driving the jacked up trucks with the 8″ exhaust & chrome testes on the hitch. The bigger the truck, the smaller……

0% & 84 mos eh. That & the comments on this blog support my long held theory that 90% of the population are morons.

Keep up the great work Garth.

#116 big mac on 07.24.12 at 2:43 am

When homes and condos are flipped back and forth like a pancake, with realtor commissions being added over top of mortgage and equity amounts in a property – sooner or later either the market becomes overcooked or the values (just like a pancake) start to fall apart.

Realtors = “House Pimps”

#117 Buy? Curious? on 07.24.12 at 3:04 am

Garth, hate mail, collection calls, and small dick references, are all the same. They don’t work unless you let them. I’ve been screamed at by people who think I’m going to say “Oh, sorry” and run away with my tail between my legs. I just laugh in their face.

Now back on topic, the 84 month car loan is a good example as to how the banks and car industry are desperate like Mikey the Realtor is for business with his easy access ass flaps modified on his Stitches buy 5 for 1 business suits, but another indicator I like to use is counting the number of garage sales they are in specific neighbourhoods. Places like Leslieville and Roncesvalles are having tons every weekend.

http://www.youtube.com/watch?v=ah0mZV1EV7g

#118 ags on 07.24.12 at 3:20 am

@49 Please don’t.

Not too loudly, not yet… or, well, just tell the people you love the most, as I’ve been doing. I’ve stopped trying to spread the word, as they all kindly but firmly ignored my sharings, with a couple lecturing me that this blog and its dogs are too rude and hostile and anti-marriage and anti-home or homestead, too short-sighted, that the perspectives are too extreme… and that I’m yet once again being too gullible.

Well, at least I tried.

However, I stopped sharing garth’s URL on other social networking sites for a while… stopped talking about this pathetic blog with social friends and the folks at work.

Truth is, I don’t want everyone to know the truth, yet… until, well, until I’ve sold my place, of course.

Listed almost two months ago, with not the most aggressive of realtors, but a nice family friend who offered a cut rate. And who thought he had a couple of buyers in the bag. But they fell through. One decided to get a house instead, the other wants lease to own. I thought, any other time, sure. But to lease-to-own a home that, come square-up time, has fallen in value by who knows how much… could be a dicey situation.

So we finally went MLS, quietly, with some pretty drab photos until my son borrowed a wide-angle lens, bless him.

I tried not to nag my gentle realtor, but had to ask, what would it take to sell this place by end of July… so he said, we’ll do an open house. I dropped a couple of notes about that on CL and kji. And purged and staged even more. And switched out the old light switches. Bought new faucets but couldn’t find an available friend to install them, so they’re still in boxes. But the place is showing well, they tell me.

So, open house came and went on Sunday, 5 solid viewings, one lookeyloo, and 2 very solidly interested parties. No follow-up from what I can tell so far. I’m priced imho too high, yet lower than comparable current listings. Higher than the closing price of two places that sold recently in my building.

I’ll be carrying a shortfall and closing-costs debt around 20K, so can’t drop the price much. IMHO, the price should be 230 (it’s 237). But to pay two realtors, I can’t go lower than 232. Should I drop the posted price?

Oh please, don’t tell me the whole world already knows what fools we’ve been… shhhhhh!!!!!

Love this blog and all you dogs :))

#119 Mark on 07.24.12 at 3:46 am

Well thanks to the CMHC inducing an unnatural preference for investing in domestic real estate on credit, versus stocks — one of Canada’s largest oil and gas firms, Nexen, is under a takeover bid, probably at the bottom of the oil and gas cycle, by a Chinese firm.

Productive Canadian-owned assets, and not houses, are what the Chinese are really bringing “money” to buy in Canada.

Could we be sacrificing our economic future, and hundreds, if not thousands of good Mechanical/Petroleum/Chemical engineering jobs for Canadians (nevermind all the other professionals’ jobs) by keeping this RE bubble inflated while our businesses starve for reasonably priced capital and valuations? After all, why won’t a Chinese company, CNOOC, create jobs for Chinese O&G professionals — not Canadians?

The Chinese aren’t dummies here (they’re, in fact, ruthlessly smart) — they’re picking up assets on the cheap, while we sit here deluded that they’re, en masse, paying top dollar for Vancouver/Toronto RE. When the facts support very little, if almost no “foreign money” coming to the table to buy Canadian RE.

#120 Aussie Roy on 07.24.12 at 3:47 am

Aussie Headlines

Peter Switzer interviewed STEVE KEEN last night on his Sky News program.

“We discuss the Euro, why default is preferable to rescheduling, fiscal austerity versus deficit funding, Nobel Prize Winner Prescott saying that the Great Depression was an extended holiday, Australian property, what is a house price crash (comparing Japan and the USA to Australia), how does Australia’s housing market really differ from the USA’s, what really makes house prices rise, stock market performance in the next decade, the Credit Accelerator and the ups and downs of a down-trending market, the pain in Spain, and what it might lead to”.

http://www.debtdeflation.com/blogs/2012/07/24/talking-with-peter-switzer/

#121 Bilbo Bloggins on 07.24.12 at 4:41 am

What’s the odds that’s Mike Stewart from Hongcouver?
He’s know to pop in and out of blogs and RET.

#122 TaxHaven on 07.24.12 at 4:48 am

About time.

Obviously the precarious state of the Canadian ECONOMY – and people’s “jobs”, such as they are – rather than merely residential real estate, should be the focus of your blog…

#123 Betamax on 07.24.12 at 5:31 am

Mikey has shown himself to be petty and juvenile — the opposite of professional, and not someone I’d want representing my interests in any capacity.

#124 Troy on 07.24.12 at 5:41 am

It’s not just cars that are financed this long. I work for a boat dealership north of Toronto, and most of them are bought with 60 month terms and 120 month amortizations. Yes, we are so screwed.

#125 Ken on 07.24.12 at 5:50 am

This past weekend, I think I threw a Chrysler Canada flyer into the recycling bin that was offering 96 month terms. You can make your final payment a year or two after you send old Bettsie to the wreckers.

#126 URL on 07.24.12 at 6:09 am

15 bil of ham coming to Calgary :-)

Wonder how will that reflect on the higher end of lOcal re…

#127 eaglebay - Parksville on 07.24.12 at 6:14 am

#45 armpit on 07.23.12 at 10:08 pm
“Let’s see….government reduces long term mortgages from 30 years to 25…..Cuts the HELOC maximum.

So why are they allowing car payments extended to 84 months? Kind of defeats the purpose of prudent credit management.”
_______________

You’re right, the government should manage our lives.
Why should we think for ourselves?
Just like greed, common sense is becoming a dirty word.
By the way, the government didn’t do anything to the mortgages. CMHC maybe?

#128 JULNICAN on 07.24.12 at 6:20 am

Garth never admitted that he was not only off on his RE crash predictions since 2008 but is in fact dead wrong.
On year 5 of scaring off old folks on here you may be finally right one day if you keep this blog going for ever.
Maybe you’ll be remembered as a stopped clock: Garth was right twice daily.
Garth=FAIL.
Please delete me as I am right. Have fun with your censored blog.

When you are worth deleting, you’ll know. — Garth

#129 Wait & Watch on 07.24.12 at 6:21 am

#32 – Well that explains the 22-year-olds driving all them fancy cars to go with all them fancy houses.

#119 – It’s not just cars that are financed this long. I work for a boat dealership north of Toronto, and most of them are bought with 60 month terms and 120 month amortizations. Yes, we are so screwed.

—-

I spent the last two weekends on Lake Memphrimagog in Quebec and was amazed at how many fancy speed boats were occupied by 20 year olds. I thought to myself, either they have rich parents or access to cheap financing.

When I mentioned this to my 22-year old step son upon returning to the city, he told me that he knows of a couple of twenty-something year olds who took out loans on a $70K boat.

And students are crying over tuition increases in Quebec??!! We really have our priorities screwed up …

#130 Piccaso on 07.24.12 at 6:27 am

I bought my 2001 Trail Blazer down here in Dallas with my RBC Visa card. Worked slick.
Either drop $4,500 at once and sell it it two years later for something when my contract is over or pay $600 a month for a rental car. It wasn’t a hard decision.

#131 Tim on 07.24.12 at 6:48 am

If you MUST get a car loan do the smart thing and buy something under 10 grand 2 or 3 years old. New cars just flush 10 grand down the toilet driving off the lot. It says a lot about how over priced they are.
My car is 17 years old for the record with a mere 100k on the odometer and I picked it up 2 years ago for 3 grand.

#132 John on 07.24.12 at 6:53 am

Nostradamus Le Mad Vlad wrote:

“Why isn’t everyone asking these questions?” — Because they are dumbed-down sheeple, who follow orders without questioning or using critical thinking skills. Too lazy to think for themselves, they prefer others (TPTB) to do it for them, which is why it is so easy for them to manipulate sheeple.”
__________

Nostradamus Le Mad Vlad, I think the answer to that “plea” of why isn’t everybody asking these questions is that the questions aren’t relevant.

You post great links which paint the picture ( plus absurd ones and humor), yet you still think people asking themselves about real estate dynamics and liquidity solutions touch the big picture?

If people are asking those questions with the information you have in your hands, something else is going on. You answered this complaint I had about you a while back, and I think your reply is substandard.

I can understand the positive human need for participation, connection and community..and you
( in my opinion) offer big value due to your reaearch. But c’mon man. I think you know what I’m saying.

Most people don’t have the information you’ve provided. How can you have that information, process it…and then ignore it in a “priority” switch.

So, given your knowledge on where the “real estate” “equity” came from and the nature of the global financial system, tell me how today’s supposed “important questions” are relevant….tell me why YOU think everyone should be asking those questions, full stop.

You must know what I mean. The blog WILL become like wet firewood ( you know why…you can see world events unfolding) if people don’t at least try to say something. To make their own world real. To stop lying. To stop being so afraid. We may not be able to do a hell of a lot at the moment, but I say to you: Why isn’t everyone asking these questions?

And you talk about sheeple? I think my position is very legit.

Thanks for your links.

#133 DR. WAYNE on 07.24.12 at 7:11 am

“Why isn’t everyone asking these questions?” … you say, Garth. Well, the problem is the vast majority of people out there don’t wish to hear the truth, can’t absorb the truth, feel they can weather any financial storm … and most of all … are, basically, stupid.

#134 House Horny Housewife on 07.24.12 at 7:43 am

Oh Garth,

This is a classic case of attacking the messenger with the bad news. I also think that many people don’t really understand what you are saying, especially those realtors that attack you for hating real estate.

Many people think you are saying “don’t buy a house” but I think what you are really saying is “don’t funnel all of your wealth into a house”. This is not quite the same thing. If you are able to save and invest sufficient liquid assets for a decent retirement AND you can also afford a house then go for it. If you are unable to put money aside because most of that money is going into the mortgage payments then don’t go for it. Am I right ? … not to mention the message of not using real estate as an investment tool because it is a big risk at the moment (personally I think it has always been).

Although this would seem to make a lot of common sense, many people cannot fathom this advice because they have been raised with the idea that a property is a good place to put your money .. even if it is ALL of your money. In addition, our economy sucks and more liquid investments are not doing well in general so most would figure, “why not dump the cash into a house ?” THIS is the logic that you are fighting, Garth.

Add to that, the attraction of not having a landlord and actually owning your own place. AND let us not forget the attraction of HGTV which is making people spend money they don’t have to renovate their kitchens and bathrooms every couple of years (this is something you never discuss but which is also a BIG problem as many cannot afford the renos they are having done .. they are borrowing to reno and when those renos have gone out of style and are worth nothing, they are still paying off the loan).

I myself am renovating my new place (not touched since 1950 so no choice) and have a constant battle with contractors trying to get me to buy extras when all I want is a classic kitchen and bathroom that won’t go out of style next year. Something that is quality but doesn’t cost an arm and a leg. Thank goodness I am an overbearing bitch who knows exactly what she wants otherwise, I would be penniless and my reno budget would be toast by now.

This is the kind of thing that you are fighting, Garth, and I personally think it is a lost battle because the attraction of having something one cannot afford is too great. The philosophy of “live for today for you may die tomorrow” is forever strong these days. Saving for the future costs too much for many. It means not having that middle island in the kitchen with the granite countertop .. it means not taking that vacation to Bora Bora with that new sexy wardrobe you’ve been dreaming of. It means making do with a nice paint job and a change in cabinetry hardware instead. Or driving out to Bar Harbour with last year’s bathing suit for your vacation. Happiness is just one purchase around the corner … just one more.

So don’t waste your breath. Just do what you have to to take care of yourself and sit back and watch what happens to many of those poor unhappy souls who prefer to search for personal satisfaction at the store with their credit cards rather than within themselves. Most have chosen which road to take and for many it is too late and too painful to undo the sheer amount of debt that it has already cost.

HHHW

#135 futureexpatriate on 07.24.12 at 7:52 am

“The market is still hot”

Fitting epitaph for a crash.

#136 DodgedBullet on 07.24.12 at 8:01 am

I just got a 0% car loan for 6 years (Ford).

I could have paid the car down but figured I’d invest that money instead.

#137 Gord Morrow on 07.24.12 at 8:09 am

Did you not hear that we Canadians are wealthier than Amercians? We are are doing great! That is what the headlines have been saying for a few days now.

Of course this is BS as most of our wealth is tied in Real estate (our houses). Our debt has increased and our non-real estate assets have declined. The Amercian on the other hand have increased their non-real estate assets and decrease their debt.

To see the how we are really doing check out this blog post: http://www.timeandmoneyconnection.com/2012/07/are-canadian-households-really.html.

To quote you Garth, “we are so screwed”.

#138 nuke on 07.24.12 at 8:34 am

No Toronto condo bubble, RBC says. Good times.

#139 theguyfromthecorner on 07.24.12 at 8:35 am

People should realize that, there is no way a car can be financed at 0%….People must realize that if so proposed, the price of the car must be boosted somehow so we still pay those sale taxes no matter what…..

#140 Mr. Lahey, Sunnyvale Trailer Park Supervisor on 07.24.12 at 8:48 am

I bet nobody, but nobody on this blog can match Sunnyvale’s very own Ricky and his beater car. Check it out folks.

http://www.youtube.com/watch?v=o3nTmSJqKuc

#141 TurnerNation on 07.24.12 at 8:51 am

I wonder how many posts originate from “Stevey the PM”.

#142 disciple on 07.24.12 at 8:55 am

Garthmeister, Lou (scheme-bag) Schizas just dissed you on AM radio this morning. He gets paid to peddle the silver nonsense as well as other stupid financial advice. I am considering exposing him in one of my upcoming blog posts, just because I can’t stomach his snide sniveling… and the rest of those right-wing lunatics on AM radio will soon get a blog-lashing from me on a daily basis. There has to be a voice of reason to counter the daily mind control ritual that goes on in the minds of drivers commuting to work every day and have to listen to all that garbage. Even the 24-hour news channels are tainted with it, there is no relenting on the part of the 4 people who own all the media in Canada.

Anyway, thought you all might enjoy a little evidence that the Challenger and Columbia disasters were totally faked. Check out my blog. And take note that James Holmes is an actor and the whole media event that occurred over the weekend is totally bogus. More boogey-boogey from the real terrorists, your real rulers.

Never heard of the guy. Who’s he? — Garth

#143 Smoking Man on 07.24.12 at 9:02 am

Watching James Homes on TV freeked me out. His actions and the way he was behaving was exactly the same as when my mom was put on
Scopolamine. The zombi drug.

You can get anyone to do anything you want on that drug.

Like to know the political demographics and affiliation of people in the theater.

Ok that’s nuts but. That boy is on it.

#144 nuke on 07.24.12 at 9:09 am

dad was a car dealer, he had a simple rule, never pay for a trade in. I could always get a good used car for the cost of ownership paper transfer ($40 back when an undergrad and used cars were 3-5 years old). 0% financing is just another ploy. try price matching lowest price wrangled off the internet or using a car buying service, then get the dealer to sell at that price with 0% financing.

#145 Mackie on 07.24.12 at 9:11 am

Cars are the worst place to put money. That being said, I have four right now, lol. But I bet my four cars cost me less than one good new car. Three Subarus and a Datsun 280zx. Daughter has the 2001 subie pushing 250K kms, I drive a 1994 as my winter car and my wife has a brand new (for us) 2005. I have a 1981 Datsun ZX as my summer car that is in better shape than most 3 year old cars. That said, as they die, they will not be replaced.

#146 Jamaican_Gal on 07.24.12 at 9:23 am

#125 JULNICAN

“Garth never admitted that he was not only off on his RE crash predictions since 2008 but is in fact dead wrong.
On year 5 of scaring off old folks on here you may be finally right one day if you keep this blog going for ever.
Maybe you’ll be remembered as a stopped clock: Garth was right twice daily.
Garth=FAIL.
Please delete me as I am right. Have fun with your censored blog.”

Garth was 100% correct in his predictions. If not for interference from the powers that be the market would have unraveled in 2008.

We are now just hanging out and waiting for things to get back on track as they must.

You know, you can run but you can’t hide.

#147 pascal on 07.24.12 at 9:23 am

I live in Quebec city. Althought houses prices more than doubled in the last decade, I have not seen over 1 million brand new house with granit coutertop, etc for sale yet. Up to yesterday ! Downtown Quebec city, here is a ZEN house, with all the fashion stuff ! Price : 1 190 000 $ + tx. Is that a sign that we are, even here, close of the cfliff ??

http://duproprio.com/maison-neuve-a-vendre-sillery-quebec-243207#description

#148 World View on 07.24.12 at 9:47 am

Hi,

What many do not realize is that the financing options make the car/house expensive for the person who would like to pay cash. The car companies sell at a higher-than-normal price so that they can tap into both segments – rich and poor. Only the rich can pay cash down. But to sell to the poor, without reducing the price, financing is the way. But the car companies have to assume that a lot of them will default. And they recover it from those who pay cash down and those who pay it over the years. IF people dont take up financing, car prices will fall making it affordable for middle class who can pay most of it cash-down at that fallen price.

#149 Ret on 07.24.12 at 9:48 am

I have never seen so much automotive jewelry in my life as I have seen lately. Audi’s appear to be the new weapon of choice. That would be in the thriving NOT metropolis of Hamilton.

Big Audi and BMW dealerships on Upper James St. and a world class Mercedes dealer in nearby Aldershot. (You can see it from the #403 Hwy. It is a mecca for the 3-pointed star set.)

Trucks are for old men and losers unless they are towing a boat worth at least $30,000. Domestic cars are for worker bees. Japanese cars are for wannabees who can’t afford German cars. A German car sets you apart from those other people and says that you want the best and that you can afford whatever it takes.

(1998 Ford Ranger owner; yes, probably yes, no boat.)

#150 Stoopid Idiot on 07.24.12 at 9:49 am

“First they ignore you, then they ridicule you, then they fight you, and then you win.”

― Mahatma Gandhi

#151 refinow on 07.24.12 at 9:51 am

a friend of mine runs the dealer finance loans for BMO (Car loans), and it amazes me how the public perceives 0.00% financing as free money. Ever wonder why you have the option of 0.00% financing or $8000.00 cash back on some cars.. Hello….McFly !!!

You are still paying 7-8% financing on “all” car loans, that cash back incentive is the what is actually covering the interest cost…. All the car dealerships do is they increase the cost of the car by the interest cost of the car loan… and then offer you 0.00% financing.

This is the ultimate bait and switch deal.

At least in Mortgage lending we have to disclose the actual cost of borrowing, wonder why they don’t for car loans ??

Then to make matters worse in about 3-4 years many go out and consolidate their 0.00% car loan into their new 25 year mortgage refinance, now paying interest again on that 0.00% debt.

#152 neo on 07.24.12 at 9:58 am

#96Canadian Watchdog

Two isn’t exactly statiscally significant. Those could have popped up any time the last 10 years. The floodgates haven’t opened just yet.

#153 I am in Vancouver on 07.24.12 at 10:02 am

If the government has a regulation on unauthorized suites in detached properties, the price in Vancouver will go down.
There are so many people I know here rent their basement to TWO or THREE families without paying any taxes!
A small house with 33 by 120 lot has FOUR suites, FOUR families!
Can you imagine?

#154 eaglebay - Parksville on 07.24.12 at 10:04 am

Toyota Motor Manufacturing Canada Inc. will spend $100-million to expand production of the Lexus RX350 luxury crossover utility vehicle in Cambridge, Ont.

The move will create 400 jobs as the Cambridge plant produces all RX350 vehicles for the North American market by 2014. At the moment, North America is supplied by both the Cambridge plant and a plant in Japan.

#155 GTA Girl on 07.24.12 at 10:13 am

The local Ferrari dealer just got in two new 458 Italias in white. Paid in full.

Not from developer money, the other kind, I presume.

But many developers haven’t put in their usual orders for 2014 models.

The RBC economics mouthpiece states that the Toronto condo market won’t crash, just cool. That’s what they hope…the bankers aren’t very quick to return the phone calls from developers looking to finance new projects. Their actions speak more of ice-cold.

#156 just learning on 07.24.12 at 10:16 am

I don’t see the 84month 0% APR as a bad deal. Let’s see this point of view:

30K to pay in 84 payments with 0% APR.

1st – You have 30000 to pay in 7 yr with 0% APR (great loan. wouldn’t you like to have this kind of loan for investments… haha)

2nd – You don’t pay the dollar depreciation.

$30000 / 7yr is about $4286/yr

It is important to remember that the purchase power of $4286 in the first year is $4286, but in the 2nd year it will be $4200 and $4116 in the 3rd and so on… until $3796 in the 7th (assuming 2% inflation against the purchase power of the dollar)

Therefore, it is like paying back less money with every additional year of you loan.

If you buy a car that holds its market value (Toyota, Subaru maybe…) you might get a good price at the end of the 7yr loan. So… it may get even better…

What am I missing here?

PS: It is irrelevant to this discussion if I had the full-cash payment at the beginning. The point is to prove that there is nothing wrong in having good debt (the kind of debt that produces or saves money)

#157 EdmontonJim on 07.24.12 at 10:29 am

After we bought our last car, I decided that would be the last one we would ever buy on financing – probably.

With a very low interest rate (even 0% in some cases) it can make sense to just invest the balance owing and reap the dividends.

But keep in mind: The ‘free’ money they offer isn’t really free. Because most large auto companies have their own financing arm, they can bury the cost of the loan into the sticker price of the car.

But when you indicate you will pay cash (especially if you want features), suddenly the various dealers in your city are competing against each other for your business. Done right, you can haggle the price down 10, 15, even 20% or more, plus having the priceless experience of having salespeople kowtowing to your every whim.

This only applies to new vehicles. Used is a whole different story, but you should never, ever pay anything but cash for a used car.

#158 Daisy Mae on 07.24.12 at 10:31 am

#35 JUNGER: “But these days they give you 0% interest at 60/72/84 months. Why would you not pay as little as possible with free borrowing, then take the extra cash you would have spent at 36 or 48 month financing and put that toward your investments?”

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

I’m sure ‘interest’ is factored in somewhere — inflated price, perhaps?

#159 Dontcallmeshirley on 07.24.12 at 10:45 am

Unless you have seven figures, forget direct equity holdings. — Garth

————–

Why? Please elaborate. How do you reconcile your constraint with the fact many retails are doing fine without having seven figures on the table.

If I held the top 3 holdings in each your favourite ETFs that’s courting disaster???

Where did I say ‘disaster’? You will suffer heightened volatility. Have fun. — Garth

#160 House on 07.24.12 at 10:53 am

A few corrections.
I remember being in Florida 30 years ago and being amazed that they were advertising 10 year vehicle loans. It sort of made sense as there vehicles wouldn’t be destroyed by salting the roads in winter.
Have you heard of “leasing” that was the 84 month loan 10 years ago.
The key is “economic growth”. Does any economist know what it is, I think not. Lowering taxes on business is the mantra for creating jobs. I would like to know where they came up with that great thought. For as long as I have followed business, business creates jobs when more people buy their goods and if people don’t have jobs or retirement savings to live on they DON’T buy more goods. So the more that business screws their ultimate customers the worse it will get. Perhaps they might try teaching “real economics” at Economics and Business Schools.

#161 Helen on 07.24.12 at 10:55 am

Cherry Beach Resort is offering 3 season cottages at low pricing – from $ 60 K. Crash ????

http://cherrybeachresort.com/ownership.html

#162 Dontcallmeshirley on 07.24.12 at 11:11 am

Unless you have seven figures, forget direct equity holdings. — Garth

Where did I say ‘disaster’? You will suffer heightened volatility. Have fun. — Garth

—————–

Seven figures is the wrong constraint. You’re diluting returns by following this rule.

I only asked because your “seven figures” comment was…well…pretentious.

If you don’t have the money to build a diversified portfolio using individual equities, you increase exposure to volatility. Nothing pretentious about that. Just fact. — Garth

#163 truth hammer on 07.24.12 at 11:11 am

Gee Garth….. I have been asking the questions….outing the truthyisms of The Great Canadian Fallacy for quite some time…..the problem is that almost every topic is forbidden from mainstreet discussion due to the politically correct positioning of so many.

Howz about we take a stand……we leave nothing hidden…we expose every thing from a -z and reveal exactly how much BS is being thrown at us for the purposes of some legacy agenda’s. You want to know why Canadians are so sheepish……..look no further than your censor finger…..because people have been blinded by ‘verbotten’ topics into a state of ignorance.

BTW I think you’re estimation of 3 in 10 families having difficulty making the monthly nut are at the low end. Anecdotally…..take the number of kids who won’t sign up for Ontario hockey this fall……according to estimates the roster is down some 90%.

Lets look at the distateful topic of the new wing the Gospel Mission in Vancouver has had to open to accomadate young children so that they don’t have to rub shoulders with the hard core poor who line up for blocks starting at 1 o’clock in the afternoon just to get a meal.

Let’s observe the fact that seniors and young families visits to the food bank have gone hyperbolic.

Lets separate the two societies in Canada…the 20% of the population who gorge every day as civil servants and the other 80 % who slave to support the elite union members that have raped the revenues out of every ministry leaving nothing for anyone else.

Gettin mad is one thing…….getting things out in the open is another……and this country does need a giant enema to get back the equity we lost as citizens under the liberal dictatorship.

Mr. Harper has been PM for more than six years, presiding over the accumulation of record debts and deficits, a moribund economy and the facilitation of a credit-fueled housing bubble. I’d say Libs are the least of our worries. — Garth

#164 Pat on 07.24.12 at 11:32 am

@ #154 EdmontonJim wrote:

“Done right, you can haggle the price down 10, 15, even 20% or more, plus having the priceless experience of having salespeople kowtowing to your every whim.”

For new cars, dealers receive some incentives from the manufacturers. For example, target numbers of cars to sell in a given period of time. If your purchase comes in a critical time and helps them to meet some of these incentives, you may be able to get a large discount. Otherwise, a reasonable price is a few hundred $ around invoice.

#165 casual Observor on 07.24.12 at 11:34 am

The reason is simple. Real estate ate all of their savings, and now consumes most of their cash flow. It’s “another sign that households are under tremendous pressure and that they’re finding any way they can to stretch out their payment or keep a lid on their payment,”
————————————————————–
It would be nice, easy and neat to place the blame solely on real estate but it’s not true.
It’s people and their need to have everything……just because they want it. Many consumers base everything on payment and they don’t think that they should have to do without.
They want it and they get it. they’ll figure out how to pay for it later.
I work at a company that helps people get out of their car leases and you would not believe how many people go out on a limb to get as much car as they can get approved for only to find out shortly thereafter they can’t afford it.
And it’s not just goods it is also services.

Be it the lawn maintenance guy, dog walker, party organizer or whatever. The mentality is that they deserve it and they should have it.
Truth is you don’t deserve it you earn it. And if you can’t afford it you haven’t earned it.

#166 World View on 07.24.12 at 11:40 am

@ Just learning,

Do you think car companies dont do the math that you just did….If yes, they just jacked up the price at which they sell, to account for all those calculations and Profit margins and default rates on those debt-payments.

#167 Toronto's Condo's Set To Crash on 07.24.12 at 11:40 am

Who want’s to go “Site Seeing” of Toronto’s condo crash? This is just a taste of the condo crash of over 50% in prices.

http://www.thestar.com/living/realestate/article/1230620–site-seeing

#168 Canadian Watchdog on 07.24.12 at 11:41 am

BILD/RealNet Report

New Toronto high rise condo sales plunge 31%, GTA new homes down 27%. BILD/RealNet report http://www.bildgta.ca/media_releases_2012_detail.asp?id=885

Someone had a brilliant idea not report sales in percentage terms this month. As if people don’t know how to use calculators.

#169 DJB on 07.24.12 at 11:42 am

Garth, do you think there is any connection to RBC’s mortgage origination bottom line when they come out with these two stories.

“Banks are tipping their hand as to just how much appetite they still have for mortgage lending, with RBC pointing to the continuing low-rate environment and the offset it provides households swimming in debt.”

http://www.mortgagebrokernews.ca/news/breaking-news/banks-hint-at-renewed-rate-war/124032/

And this 2 days later

“There is no bubble in Toronto’s condo market, says the economics department of Royal Bank of Canada, the country’s largest bank and biggest mortgage lender.”

In other words we have lots of money to lend and you Joe Public need to buy more real estate.

#170 T. on 07.24.12 at 12:05 pm

Here’s a beauty article for when you do you SK piece. http://www.leaderpost.com/business/Mortgage+rule+changes+backwards+move/6975429/story.html
… It’s different here.

#171 realturds are going crazy on 07.24.12 at 12:05 pm

Garth, guess what?

Those emails and that anger only show one thing:

You didn’t hit a nerve… YOU HIT THE WHOLE FRICKING NERVOUS SYSTEM for these realturds. (straight in their spinal-cord)

Every article you write here is like a threat to their unscrupulous source of profit .

They are scared and they very well know why… The bubble is bursting (the realturds scam is ending.)

Garth, keep going with your excellent work. People like you (eye openers) are the ones we really need in this country.

Thanks

#172 Chris on 07.24.12 at 12:09 pm

http://www.cbc.ca/player/News/Canada/ID/2259979432/

This just reeks of big media truth smearing. I love the term “softening” of 2-7 percent. With most buyers with nothing down, that puts them underwater. How long until everybody realizes the truth. Cheap money meant lots of buyers, and price inflation. Tight pocket books and boomers means sellers and many people realizing that they aren’t actually ahead.

#173 somejerk on 07.24.12 at 12:11 pm

Do you think RBC is promoting ‘no condo bubble’ because they are at risk holding a >% of the debt for all the current developments going on, once they are built the ‘condo’ owners hold the debt, so they just have to get them built. But if things tank and peeps walk away from their 5% down (+penalties)… whew… those buildings could be big monolith, half finished cement blocks, with the debt owed by the bankrupt builders. There were blocks here and there across Canada for years (ask the tridel owners – from the wiki “Near collapse and revival – The end of the 1980s property boom placed the company in severe distress. The problems began in 1992 when subsidiary Aluma Systems Corp was unable to meet some $226 million in debt obligations…” Feels similar to early 90’s (and when I bought a nice condo for 1/2 price, sold recently for 325% return ~15% annually). …So its easier to get monies and spread the risk to the owners instead of the few builders out there or am I out to lunch?

#174 Steph on 07.24.12 at 12:14 pm

I understand and witnessed all what happen in the last 10 years. First I saw the US RE bubble back in 2004. I remember well, it was a piece on RDI about condo flipping and price increases. I followed the action from there.

It’s not just about Canada, it’s global. Most governments around the world took actions to fuel a RE bubble.

In the US, it was done by deregulating markets, leaving a bar open for the banks. In Canada, it was via CHMC and free credit.

So most countries did just that. The only question is why?

I can’t get my hand on the answer to that one. Usually I get some global conspiracy theory kinda answer…

Garth, would you have a beginning of answer for that one?

#175 Edward on 07.24.12 at 12:14 pm

(Why do so many of the comments and blogs I read from realtors online contain such poor grammar? I know I shouldn’t, but I take poor writing as a sign of poor intelligence and I’d never buy a house from someone who couldn’t compose proper sentences.)

This was one of your best pathetic posts ever, Garth. So perfectly succinct that I can print it and give to the greater fools I know. They really need things put into this type of nutshell.

#176 just learning on 07.24.12 at 12:23 pm

@ #163 World View

Of course they do the math… way better than you and me. But even if you don’t get the 84month 0%APR financing you are also facing the same jacked up prices.

The car industry is another scam. Cars are so-overvalued !!! (and they only depreciate in time… so you are just wasting money, always)

But the scam is in the business model (which also forces to increase the prices) . People should be able to buy cars like a regular product in Walmart (no hassle, no negotiation, no scam, no tactics…) or maybe directly from the manufacturer like Dell or Sony (getting rid of all these thieves intermediaries, … like the realturds) … but we are deviating from the debt subject.

Regular people don’t have better negotiation skills than a regular car sales-person, therefore even if they have the $30K cash they won’t be able to take much advantage from that. So a lot of people can easily pay the 84 payments at 0%APR and make a better deal.

You have many options but the 84 months is not that bad, that’s my point.

#177 Tonino on 07.24.12 at 12:23 pm

#152 GTA Girl

“Not from developer money, the other kind, I presume.”

Yes, those well off hot dog vendors. I know the types.

#178 Steph on 07.24.12 at 12:36 pm

@#173just learning

Auto-Manufacturing scam is coming to an end. See: http://www.teslamotors.com

#179 Canadian Watchdog on 07.24.12 at 12:36 pm

Million dollar condo in Yorkville foreclosed. http://postimage.org/image/5cyyecfb9/

Next…

#180 Andrew on 07.24.12 at 12:51 pm

Garth why pay cash for a car if teh dealer is not willing to make you save a little by doing so. 2yrs ago when my wife purchased her car , I proposed that to the dealer. They where going to charge me the same price. So why not pay monthly and put it in perfers in a bank , like you talk about .. I know most poeple would rather spend it on something else.

#181 World View on 07.24.12 at 12:53 pm

@ Just Learning,

Ofcourse we dont have that option of negotiation etc. But I think you are making the assumption that this will continue to happen for the foreseeable future, while I am not. Imagine if in 7 years the financing dries up, then Car companies will have to reduce prices to attract customers. And then new cars will have to have lower prices and the car which you bought will not retain the same resale value as before.
In the meantime, it is better to buy “good” used-cars because it also reduces insurance premiums !

Ofcourse like all “bubbles”, it will take a real big fall in consumption to get rid of all these funny financing stuff.

#182 zeeman1 on 07.24.12 at 1:01 pm

#45 Armpit.

Because the government doesn’t force taxpayers to insure car loans and why can’t a private business let you take 84 months to pay for their product?

No need for government to interfere, except perhaps to legislate financial literacy courses throughout the entire high school curriculum and therefore stop many idiots from parting from their money before it happens.

Great post today Garth. I’ve been noticing for some time the lengths auto companies are going to ensure interest in their product.

Perhaps a future article on how expensive cars are loosing the younger demographic (and much of the older) because mortgage payments are so big a part of disposable income?

#183 Timbo on 07.24.12 at 1:02 pm

http://www.guardian.co.uk/business/2012/jul/24/fall-germany-pmi-credit-rating

“Germany’s private sector shrank for a third straight month in July in a second blow to Europe’s largest economy after Moody’s cut its credit rating to AAA with a negative outlook.”

And debts are growing. Something has to give………..

http://www.richmondfed.org/research/regional_economy/surveys_of_business_conditions/manufacturing/2012/mfg_06_26_12.cfm#tabview=tab0

“Looking at the main components of activity, shipments edged into negative territory as growth in new orders experienced notable declines and employment grew at a rate well below May’s pace. Most other indicators also suggested weakening activity. ”

cough, sputter…………..

#184 Toronto_CA on 07.24.12 at 1:09 pm

Kind of amusing to see on the G&M the article about no condo bubble in Toronto next to this headline also from today:

“Toronto new condo prices fall 6 per cent in June”

http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-new-condo-prices-fall-6-per-cent-in-june/article4437314/

Ah the media. Well the Mop and Pail, which is psuedo media.

#185 American Werewolf in BC on 07.24.12 at 1:12 pm

#124 eaglebay – Parksville on 07.24.12 at 6:14 am
By the way, the government didn’t do anything to the mortgages. CMHC maybe?

*sigh*

#186 vancity on 07.24.12 at 1:12 pm

I know you are but what am I response from Mike the realtor sounds more like an unstable 12 yo. Hope your not the typical realtor or the public are in trouble.

#187 Form Man on 07.24.12 at 1:19 pm

#160 truthhammer

Thanks Garth, for correcting truthhammer’s ideological nonsense.
As the right-wing crazies revel in the Harper economic mess, it is interesting to note how skillful Harper has been at convincing voters that ‘conservatives are better at managing the economy’. They have not one shred of evidence to back this up. Instead the cons demonstrate a formidable ability to ignore ( even subvert ) facts and history. What a relief to think we have such clever leaders guiding us……

#188 neo on 07.24.12 at 1:21 pm

#148refinow

DING! DING! DING! We have a winner..

Great post.

#189 Westernman on 07.24.12 at 1:22 pm

A lot of posters today seem quite upset over the masses of asses getting buried in debt and then eventually losing it all – btw, there is an avalanche of sheeple going to be insolvent and liquidating soon – but that is a very good thing if you are at all sharp and have some real cash in your back pocket…
Scoop up the bargains as the fools jettison cars, boats, motorcycles, trailers etc. etc. etc. to try and make the grocery bill…
Think of it this way – BIG SALE on everything 50% to 75% off!

#190 cramar on 07.24.12 at 1:34 pm

#152 GTA Girl on 07.24.12 at 10:13 am
The local Ferrari dealer just got in two new 458 Italias in white. Paid in full.

Not from developer money, the other kind, I presume.

But many developers haven’t put in their usual orders for 2014 models.

—————————
Canadian Ferrari dealers (there are so many of them) should wake up to the realities of modern economic marketing. Offer no down 0% financial over 40 years, and we can all be driving the prancing horse (‘cept Garth). And you know what, a 40-year old Ferrari is actually worth something!

But who in his right mind ever buys a white Ferrari? It is like Marilyn Monroe with black hair! Sacrilegious I tell you!

#191 truth hammer on 07.24.12 at 1:36 pm

If we’re going to educate…then lets not obfuscate and take sides. The fact is that the country is saddled with legacy appointee’s from the prior Liberal government that had it’s ideological center on big government and welfare statisms.

It’s not like any party can come in and clean house as needed due to the onerous legacy civil service contracts ‘that must be honoured’. As we have seen time and again federally and provincially these political parties adopt positions before leaving office strictly to hamstring an incoming government so that the previous agenda remains newsworthy knowing that under the Trudeau Charter of Tears the appointed judiciary will never face reality and always reside in the legacy that has made the Liberal appointed justices more powerful than the people.

It has been impossible for the new government to quickly adapt to the new economic reality bracaue of a thick layer of legacy appointments. As you say Harper has been in government for six years….but less than one year as a majority where decisions are finally being made on behalf of the constiuency that voted for a change in policy direction. The previous minority was moribund in pandering as are all minority governments.

So….lets talk facts and legacy costs if we are going to point fingers in the right direction. It would serve the Canadian people that no legacy contracts need be honoured when the government who issued such proclamations is no longer in power.

#192 IM in C on 07.24.12 at 1:39 pm

Back in 1987 Tom Wolfe wrote a book “The Bonfire of the Vanities”. In it , the central character discovers that he wasn’t upper class, he ws really upper upper middle class. . What had happened is that his wealth had bought him the trappings of the upper class with the illusion that he was somehow the master of the universe. As I look at all the ads for real estate, the prime selling feature seems to be, buy this condo , house , cottage and you will have stepped up , you will have arrived at a new and wonderful place, not only physically , but emotionally and socially . Perhaps this is a good definition for house horny.
Now the focus of this blog has turned to the leveraged purchases of other trappings of status – such as cars, boats and cottages. I am beginning to agree – this won’t end well.

#193 TEMPLE on 07.24.12 at 2:13 pm

If you don’t have the money to build a diversified portfolio using individual equities, you increase exposure to volatility. Nothing pretentious about that. Just fact. — Garth

With all due respect, Garth, that isn’t fact. There are some very good studies that show that an investor doesn’t need nearly as many equities as the old guard thinks in order to reduce volatility. I’m not saying that most people should directly own equities, but you don’t need seven figures to own them safely or cheaply.

TEMPLE

That’s your opinion. BTW my statement – “If you don’t have the money to build a diversified portfolio using individual equities, you increase exposure to volatility” – is fact. — Garth

#194 2nd Last on 07.24.12 at 2:27 pm

Great insight Garth. I read this blog from Eastern Europe as we are planning our return to Canada. I am optimistic that we will time the property market in Toronto well, since the loosey goosey mortgage days are now finished…the massive price inflation during last few years in the GTA, which I have watched in amazement from the other side of the ocean, can likely be 75% attributed to all the lax mortgage money swashing around. I performed an acid test a couple months ago (before F dropped the bomb): called up a mortgage broker I had used in Toronto back in 2005….without re-establishing Cdn residency or showing any real documents to prove my personal balance sheet or income, I was approved for $1.0m in mortgage and simply told to ‘Go and buy’. My jaw dropped and I thought I had just time warped to the USA circa 2006.

My fellow Canadians, you have been extremely foolish and you will be sorry.

#195 live within your means on 07.24.12 at 2:34 pm

We bought our last 4+cars w/cash. We bought my top of the line used 2000 Accord because of my health problems. I could no longer drive in peak hour traffic using a std. transmission, no air conditioning, manual everything. We bargained for 3-4 hrs. As I’m retired, & mostly use it for shopping errands, it still only has true 136K’s on it. Other than new summer/winter tires, oil changes, etc. we spent next to no $$$ on it. The air conditioner needs replacement, but a chap my DH deals with said there’s still pressure & we might get this & next summer out of it. DH has bought a couple of used great Camry’s (4 cls) since then ’cause he needs a car for work. His mileage allowance doesn’t cover depreciation, etc. When we travel long distances we take his car as it’s more comfortable than mine.

I learned to live within my means 28 yrs. ago. Consolidated my debt – not much – couple of K. Paid it off within a yr or so and have never looked back. We did take out a $30K loan for investment purposes yrs ago with our previous FA from Manual Life. Saw our investments decrease for many years & finally paid it off & moved what little was left to another Adviser.

I know we are in a position to invest more than we do, but we like the freedom of being able to decide on the spur of the moment to travel, take advantage of deals & at least every 2nd yr we travel to Europe to see my PIL’s, family & friends. Both of us have travelled extensively in Europe & elsewhere since we were in our 20’s. Neither of us would exchange our memories & experiences to have $1M for old age. Plus, neither of us will live into our 80’s. My MIL has only 21% kidney function now, an inherited disease my DH has. With my health problems, I’ll be lucky to see 70, but who knows. We try to take advantage of the rest of our lives. We don’t have children.

#196 Robert on 07.24.12 at 2:36 pm

#171 – where did the global property bubble come from you ask. How about a concerted effort by the respective western governments to devalue their respective currencies in the face of China’s refusal to allow the yuan to float. Of course the easiest way to devalue currencies is by using the magic of fractional lending to create fiat currency out of thin air. No printing presses needed, just add zeroes to the bank balances and backstop the whole mess with Freddy, Fannie, and CMHC. Pigeons are coming home to roost now.. Notice who’s buying up the tar sands. Hewers of sand and pipers of oil, that’s the Harper game plan..

#197 Realtors in an all out PANIC! on 07.24.12 at 2:51 pm

Realtors in an PANIC and RBC is in a PANIC as Toronto condo’s are CRASHING HARD! We all know lol…about lol it to funny I can not stop laughing. ….OK. We all read RBC saying no condo bubble and prices will come down 2-7%…well prices just fell 6% in ONE MONTH. LOL

http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-new-condo-prices-fall-6-per-cent-in-june/article4437314/

#198 GTA Girl on 07.24.12 at 2:51 pm

Ferrari dealers do not do financing or leasing. Purchases have to be paid in full.

Smoking Man? Darling, loved your post…this should interest you.

http://www.sandiegoreader.com/weblogs/news-ticker/2012/jul/20/holmess-father-is-anti-fraud-scientist/

Now tell me the whole story isn’t truly bizarre

#199 KW T800 on 07.24.12 at 2:56 pm

Scary how much debt people take on. I really hate to see what happens when reality hits oh we are out of money.

Ohwell sit back and watch people claim bankruptsy.

#200 EdmontonJim on 07.24.12 at 3:05 pm

@Pat

Of course, with anything, patience is required to get the best deal. There are afew times each year when dealerships are feeling the pressure.

Alternatively, some types of more expensive vehicles carry higher margins, because they are harder to sell. If you are buying a luxury SUV, coming in with Cash will get you a nice discount any time of the year.

The only way to get a deal on an economy car is if they are trying to clear inventory.

#201 disciple on 07.24.12 at 3:06 pm

#171 Steph… Allow me to field that question, as that is not Garth’s passion, it is mine. You see, the purpose of the global RE bubble was to create debt slavery. It’s all about control, and more specifically, mind control. It’s all fake debt, the mortgage money passed to all the home-debters doesn’t even exist, and never did, yet the financial parasite class went ahead and started playing casino with that make-believe money. And that is the crux of the problem, a totally fake and intentionally engineered problem.

Your real rulers are so completely convinced of their own infallibility that they employ famous actors to fill roles in our governments, in a fashion that proves how certain they (were) that we “sheeple” would not even suspect it…

They were sloppy, though, leaving their FAMILY photos on a public Picasa domain such that Ed Chiarini, with a gift for faces and a background in graphic production, and who happened to be documenting the Occupy Dallas protest, found them and put two and two together when one of the actors gave him an evil look. He quickly realized just how many famous Hollywood actors were there at the Occupy Dallas rally that day, including Danny Glover and Alec Baldwin. Even Marilyn Manson and Russell Brand were there. And the rest, as they say, is history. We’ve now helped him identify hundreds of actors in our global government, military, and popular media. The actor you know as Tom Cruise, for example, recently played one of the doctors in the recent Batman shootings. No, not in a movie, in real life. He also plays the Page on 30 rock, Kenneth Parcell. Yup, that’s him. Are you starting to get the picture?

#202 a prairie dawg on 07.24.12 at 3:07 pm

@ #125 JULNICAN

Do all the Realwhores get their scripts directly from CREA?

You all use exactly the same language and tired out euphemisms on this blog each time.

And most people here are smart enough to see that.

Guess what? This isn’t an ad for a house. Repeating the same words over and over do not sell your agenda or convince anyone of anything. You people would know this if you had any ‘real’ marketing skills.

Good luck in your next career.

#203 Smoking Man on 07.24.12 at 3:14 pm

Everyone chirping RBC’s Robert Houge

Well if his numbers are right re population and the growth rate of toronto. 100k people every year added he might not be off the mark. Love how he left out an exit sentance just in case.

Single detatach homes in 416 are no where near a peek. Take that to bank

#204 zimmerp on 07.24.12 at 3:15 pm

Really…

http://www.cbc.ca/news/canada/toronto/story/2012/07/24/toronto-condo-market.html

Who to believe? Is there a complete lack of unbiased reporting left anywhere?

#205 disciple on 07.24.12 at 3:23 pm

James Holmes is known to you as James Corbett of the Corbett Report, pretending to be in Japan. He also goes by the names of Tim Whale and Gabe Zimmerman. His real mother is the wife of Jeffrey Katzenberg CEO of Dreamworks. The whole incident is a fake script. Don’t be fooled by the media one minute longer… the police chief is Martin Scorsese, for God’s sake…

Now, knowing all this, watch how your local media spins the event to serve their agenda(s)…

#206 Piccaso on 07.24.12 at 3:23 pm

You want to fix the housing market? Tell the gov they should have never got involved in the housing market to start with, all they did was create speculation.
Let interest rates rise and housing fall to where they should be.

#207 daystar on 07.24.12 at 3:25 pm

#189 IM in C on 07.24.12 at 1:39 pm

You’ve nailed it. People aren’t just buying real estate, they are buying status, prestige. Unfortunately for many of them in this market, they are also using extreme leverage in a falling market to obtain this status meaning its a phisod of sorts, later exposed as the unexpected happens such as higher interest rates further correcting a market already in correction from debt fatigue, tighter regs and bloated unsustainable values wiping out equity, a steep price to pay for the human weaknesses of vanity and pride.

Interestingly, bankers with a background in commerce:

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

… can and do take organizational studies:

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

… that are broken down into 4 parts. As you read, you will find that psychology plays a significant role especially in areas such as organizational behavior:

http://en.wikipedia.org/wiki/Organizational_behavior
It is thought that such teachings stay within the confines of organizations such as banks but these areas are expanded to the customer base. The risk of course, is that the areas of phycology accessed by students seeking a bachelor of commerce are not limited to organizational studies but expand into areas like social engineering:

http://en.wikipedia.org/wiki/Social_engineering_(security)

http://en.wikipedia.org/wiki/Social_engineering_(political_science)

It really is an eyeopener to know how diverse the teachings are concerning a degree in commerce. Organizational studies combined with studies in the area of social engineering in particular literally teach future bankers how to influence and in some respects, control the herd through learned areas of psychology. It appears as though pride is a thoroughly exploited area of study in commerce. Status… prestige… possessions… are the carrot at the price of debt.

Perhaps… our university cirriculums should offer in the area of commerce, teachings that are more focused and concentrated on the human weakness of GREED.

#208 pessimist on 07.24.12 at 3:36 pm

Garth, I thought that this quote might be of some value to you:

All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.

Arthur Schopenhauer, German philosopher (1788 – 1860)

Seems that you are in step #2.

#209 Ralph Cramdown on 07.24.12 at 3:38 pm

• 2.9%, 25-year financing (OAC) for iPad 2s
— actually 29%, called a credit card

• 3.5% loan for any business idea rejected by Kevin O’Leary.
Find someone else to finance those, I wouldn’t touch ’em.

• 5.5%, 30-year mortgages for multi-brood bird houses (appraisals required).
— Tyson foods is paying 7%, due 2028

• Home Equity Line of Credit–on someone else’s home.
— cynics would say the banks own many of these homes already, and the occupants are just renting

• 4% student loans for online Wikipedia-based education.
— How about 0%? RBC MyProject Mastercard, 0% for 6 months.

• Overdraft protection for your daughter’s piggy bank.
— The breakage that inevitably precedes an overdraft is covered by many banks’ extended insurance coverage on their CCs.

• The “Pooch Advantage Plus” credit card for your dog.
http://www.petcard.ca

• Special, low-rate, 30-year mortgages for first-time shed buyers.
3% low enough for ya? http://www.chfa.org/Homeownership/for%20Homebuyers/Homebuyer%20Mortgage%20Programs/MobileManufacturedHomeLoanProgram.aspx

• The “No Questions Asked” drive-by loan window. Just ask for Sal. You’ll get a really good vig. (Must supply names and addresses of at least three relatives)
— For that, you also need collateral: http://www.city-data.com/businesses/158723353-dean-s-drive-thru-pawn-shop-oklahoma-city-ok.html

• The Rest In Peace loan. You never know what expenses you’ll have it the afterlife. Kids to co-sign.
— Just google “funeral loan” Plenty of options

• The MYBOR Name-Your-Own-Rate overnight loan. You pick the rate. We pick the amount. (There’s no reason this can’t be fun.)
— OK, that one I don’t have an answer for. But seriously, the sad state of consumer lending is such that you CAN’T write a joke that somebody, somewhere hasn’t already turned into a serious business.

#210 Led on 07.24.12 at 3:45 pm

Garth – you won’t believe what these Americans are painting the Canadian economy as, especially housing

http://www.youtube.com/watch?v=4xGM6_RQIsw

#211 Steven Rowlandson on 07.24.12 at 3:49 pm

84 month car loans are ridiculous. It is amazing what they will do to hide the magnitude of inflation in order to sell vehicals to people that probably can’t afford to buy due to high prices and wages that are 40 years out of date.

#212 Steph on 07.24.12 at 4:01 pm

#193 Robert

I didn’t see any major devaluation of currency against China. There must be a better answer.

Sounds like another conspiracy theory.

#213 Helen Highwater on 07.24.12 at 4:08 pm

Totally tasteless picture, Garth. In fact, if that’s the best you can do, I think I’ll spend my time reading something else.

I’ve been far more tasteless than that. — Garth

#214 2centCdn on 07.24.12 at 4:09 pm

An aweful lot of people spend every cent they make trying to APPEAR wealthy (leasing, financing, “never pay eventing” Heloc-ing, and mortgaging a short term “good” life). Many make great family incomes. If they’d just tough it out a little and put some sound basic plans into effect … one day they WOULD BE wealthy (by anyone’s definition). And lasting wealth, not just living a week or two ahead of the bills. But through greed, impatience and more than a pinch of ignorance, millions of hard working, well paid Canadians who will retire poor (by anyone’s definition).

#215 char on 07.24.12 at 4:11 pm

If the toronto condos are overbuilt why are rents so high, and available rental units so scarce ?

#216 jess on 07.24.12 at 4:14 pm

and those would be considered wealthy (30k compared to these folks )

Hedges also describes the difference between truth and news. “The really great reporters — and I’ve seen them in all sorts of news organizations — are management headaches because they care about truth at the expense of their own career,”

Hedges on Capitalism’s “Sacrifice Zones”: Communities Destroyed for Profit

http://billmoyers.com/segment/chris-hedges-on-capitalism%E2%80%99s-%E2%80%98sacrifice-zones%E2%80%99

#217 John S on 07.24.12 at 4:22 pm

http://www.zerohedge.com/news/treasury-yields-tumble-new-all-time-lows

Digest this!!!!

#218 new-era on 07.24.12 at 4:32 pm

Gartho, your propaganda is still flowing here I see. – Mikey the realtor

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

I wonder who is flowing the propaganda.

Hitler was the master of propaganda, getting the Germans sheeples to follow and perform acts against humanity.

The Banks, Global and news stations are todays propaganda machines. They continue to pump the real estate market. While the bombs are beginning to hit places like richmond, victoria, whistler and okanagan .

Don’t be dumb and lazy, do your research, just go to MLS.ca and start looking at the going rates of places and do a comparison to the highs and lows. Its not rocket science.

#219 Blue Monster Lover of Meats and Vegetables on 07.24.12 at 4:37 pm

#91 jess on 07.23.12 at 9:38 am

Libor Rate Rigging Shows Biggest Banks Are Criminal

Call the “Libor scandal” by the right name: massive criminal conduct. If any other business or group of businesses did what is reflected in the Barclays emails and voicemails, Federal prosecutors would already be indicting them under a bunch of criminal laws including RICO because there is a pervasive pattern of criminal racketeering activity
—-
Hello Jess,
If you think LIBOR is criminal, wrap your head around our fiat money system and you should feel outrage.

The debasement of the money supply is the oldest trick in the book for the financial elites and governments to steal from the real productive society. It’s amazing to me how F-ing stupid our society is today. Centuries ago the population understood the basics of money and trade because they actually lived it and participated in it. Today, money and economics has been so obfuscated that average people don’t have a clue or even care. Which is shocking but true.

I’d say 90% of the populations doesn’t care. Then for those who do try to understand economics, you know, with degrees and all that non-sense, 9 in 10 of them are completely wrong because the education of economics has been hijacked by governments globally to fool the people.

So that leaves us, the 1%, who actually understand whats happening and are positioning to protect ourselves and hopefully profit.

Good luck.

#220 Keith in Calgary on 07.24.12 at 4:49 pm

The reality about long term car loans is that they are just a financial substitute for the previously available low lease payments, but with the risk for the entire portion of the debt placed squarely on the personal covenant of the vehicle operator, whereas in the past the lease company was on the hook for any deficiency occured upon disposable at the end of the term, if the lease was a “closed end” contract, as most were…….unfortunately……..just ask GMAC, FORD CREDIT or CHRSYLER……LOL !!!

Which is why closed end, or “walk away” leasing has almost vanished from the automotive marketplace, save for a few manufacturer’s.

To wit, back in February of this year I stood in the “D” lane at ADESA AUTO AUCITON here in Calgary and watched my 2009 SMART Passion” coupe with 37,000 KMS going thru the block for $8,300. I almost bought it back…..after all, a mere 4 weeks ago, I had just returned it to the dealer because it was on a 36 month closed end lease. MB Credit had a residual value of roughly $12,500 outstanding…….and the car was like new, but because the market had crapped out, the car was only worth $8,300…..so they lost their backside……..and I laughed all the way to the bank. Fast forward to today……on one of these 72/84/96 month car loans you’d still owe $12,500…..but “you’d” owe the money with no recourse…….on an asset worth $8,300…….the banks are not stupid, we are. Sorry, I am not because I’ve been in the car business since 1989 and also, I don’t own a house in Canada.

The balance owning after 36 or 48 months on these loans is similar to the residual value on a lease, in that the math is comparable, but the debtor now is on the hook for the whole amount….no more dropping off the keys and getting a new car….you are truly “upside down” now…….just like real estate.

#221 Investx on 07.24.12 at 4:52 pm

212 char:
If the toronto condos are overbuilt why are rents so high, and available rental units so scarce ?
___________________________________________

I was wondering the same thing after a friend, who owns an investment condo in downtown Toronto, was telling me he was receiving many inquiries from potential tenants about his unit and how scarce comparable units are in the same building and surrouding areas.

#222 Blacksheep on 07.24.12 at 4:53 pm

John # 75,

“Surely a substantial amount of people reading the blog know this…don’t they? Why is there no sustained debate on it? I don’t get it at all.”
—————————————————
Before the masses can admit, George B. or Stephen H. weren’t / aren’t driving the bus, they must first accept they’re vote is irrelevant, when it comes to the fundamental path out lined by the elites. People need to cling to the belief they have some control, or will feel helpless. Our handlers know and fear this.

Reasoning.

Involvement in Afghanistan and other locations, can no longer be described as ‘peacekeeping’. Multiple new for profit prisons, when crime rates are dropping. The F-35’s are an obvious red herring, so we will welcome the more economical, unmanned drones (by the dozens). We will see the border thicken, slowing trade, until big business cries ‘job losses’, then the peeps will be offered a solution that requires the relinquishment of perceived sovereignty, to keep us ’employed and safe’. Which of these actions would cease, with a different ‘democratically’ elected CEO / Party ?

NONE.

Borders and flags are for deluded Patriots. It’s essential to maintain the, ‘my farms better than your farm’ facade. The corporate Olympics, are once again here to reinforce this doctrine. Today we have China corp. buying Nexen @ 15 billion? Economically, borders don’t exist, unless there’s a war profit to be made.

The Assimilation of Canada continues, as scheduled.

take care
Blacksheep

#223 GregW, Oakville on 07.24.12 at 4:55 pm

Hi #91 Nostra,
FYI, The ‘Zeitgeist’ movie you may want to watch some time.

It has some ideas to think about, that might have answerers your looking for or at least a different view point of why and were we are now and were we could go.
(I hope it’s not just a propaganda peace with connections to Aganda 21 to help manufacture consent?)

They seem to re-edit the show ever so often so there are several versions you can find, and are about two hours in length.
You can find them on YouTube and the internet by searching the titles below:
ZEITGEIST 3 – MOVING FORWARD (FULL – 2011)
ZEITGEIST 2: ADDENDUM (FULL MOVIE!) – PLEASE SHARE
Zeitgeist: The Movie (2007)

PS, thanks for your links ;)
And regarding Garth’s picture pic today. I hope it’s not also foreshadowing the state of the worlds food crops supply this year?!

#224 T.O. Bubble Boy on 07.24.12 at 5:07 pm

@ #218 Investx / #212 char

Just drive by the Skydome or Yonge & Sheppard at 8pm-9pm sometime, look at the towers (especially the newer ones) and guess what % of condos have no lights on… there are a lot of empty condos sitting there as an “investment” and not being rented.

#225 Andrew on 07.24.12 at 5:21 pm

There is a massive debt disaster waiting to happen in Vaughan. Vaughan is not a terribly desirable place to live, there is little but a railway yard, some industrial areas, a mall, an amusement park, and “SmartCentres” big box stores everywhere (they’re headquartered here), and the traffic on 400 is always congested. To the west is Brampton and to the south are Rexdale and Jane and Finch. Nevertheless, McMansions in Woodbridge cost $500-600K (bought a few years ago with a 40 year 0 down mortgage of course) and almost every driveway seems to have a big SUV or luxury car that gets bad gas mileage (leased of course).

#226 Junius on 07.24.12 at 5:29 pm

#213 Jess,

I think Hedges is brilliant. He makes a very compelling case. One of the few authentic, intelligent voices out there today.

#227 Cory on 07.24.12 at 5:37 pm

“I see two scenarios:
1. Garth is wrong and so are its pathetic followers, myself included. If we are wrong, I will admit to it. Garth, will you?”

Garth is wrong. I am wrong. Things selling like hotcakes. Probably the 3 month pre approval crowd prior to the changes…but never know.

These people buying these are smart

http://www.therivercalgary.com/floorplans

these are moving forward so I assume theyve sold enough of them. I always thought people with money were smart….not so apparently!! especially at 5k/month condo fees!!

#228 Canadian Watchdog on 07.24.12 at 5:40 pm

#218 Investx

“If the toronto condos are overbuilt why are rents so high, and available rental units so scarce ?”

It’s the other way around. Rents are not high, rather investors have overpaid for units and are expecting higher prices. What lacks is clean one-bedroom units priced at affordable rates, while larger 2-3 bedrooms are flooding the market with no bids.

Simply said, renters are chasing lower prices that new condo buyers can’t offer.

#229 Junius on 07.24.12 at 5:48 pm

#125 new-era,

The thing I don’t like about discussion of propaganda isn’t that it always assumes a guiding mind is behind it. I understand that at Fox news everyone gets the talking points and the Koch Brothers are busy trying to explain to the world that black is white. However most of the time people promulgate information as truth without ever having a deep understanding of the forces pushing them towards their beliefs.

The average realtor, mortgage broker, financial trader and bank employee are just doing their job. They are cogs in the wheel and they do not see the larger picture. This is just the way it is for them and most people. The difficulty we now face is that so much of what we were taught to believe in or was true (like house prices will always rise) is no longer true for reasons most people have never considered.

Speaking of Chris Hedges, he recently wrote a very good article on this exact point. Perhaps a bit extreme in comparison to realtors or retail bankers but it makes a good point about the relative nature of our ethics.

Here it is:

http://www.truthdig.com/report/item/the_careerists_20120723/?ln

#230 I'm stupid on 07.24.12 at 5:49 pm

Hi Garth

You wrote the following
Where did I say ‘disaster’? You will suffer heightened volatility. Have fun. — Garth

Does that include Long term investors. 20-25 years holding individual equities and adding 5-6k a month?

Yes. — Garth

#231 cramar on 07.24.12 at 6:03 pm

207 Led on 07.24.12 at 3:45 pm
Garth – you won’t believe what these Americans are painting the Canadian economy as, especially housing

http://www.youtube.com/watch?v=4xGM6_RQIsw

———————–
Wow! We REALLY ARE different up here!! No problems! Makes you want to beat your chest in pride and go out and buy that McMansion.

#232 Condo crash in Toronto on 07.24.12 at 6:03 pm

Investx on 07.24.12 at 4:52 pm 212 char:
If the toronto condos are overbuilt why are rents so high, and available rental units so scarce ?
___________________________________________

I was wondering the same thing after a friend, who owns an investment condo in downtown Toronto, was telling me he was receiving many inquiries from potential tenants about his unit and how scarce comparable units are in the same building and surrouding areas.
———————————————————-
What are you talking about? Investors flippers are trying to either sell their condo or trying to rent it out cash flow positive which they can’t. The crash is well under way as condo prices CRASHED 6% just last month alone. OUCH

#233 Bill Gable on 07.24.12 at 6:06 pm

Gad. It was for $1.50 for some cough drops. She used a credit card.

I thought that odd. Then I stepped up. 20 bucks of cleaning products andd too much tax, I asked the clerk ” How many people use plastic out of say, ten purchases?”.

He didn’t hesitate. “I’d say, seven”.

That blew me sway.

Debt slaves.

The stark realism of todays “RAM TOUGH” posting, was rather stark.

I like to think the we have some things to be thankful for and to enjoy and love the things that matter….because “Happy Days are Here Again” – was not playing in the background.

Well done piece, sir.

#234 jess on 07.24.12 at 6:07 pm

anti regulatory reinventors have such a passionate hate for inspector generals

Geithner’s vs Barofsky

#235 Smoking Man on 07.24.12 at 6:12 pm

#49 Realtors in an all out PANIC! on 07.23.12 at 10:11 pm

I found you on the globe and mail. LaughingCON

Garth should put you on the payroll
…………………………………………………………..

laughingCON
9:55 PM on July 23, 2012
Amazing the lies the media will print. Realtors , bankers and realtors don’t want you to know the truth. Find out why realtors fear and hate garth turner goto http://www.greaterfool.ca and see real facts and numbers they don’t want you to know.It seems most people on this message board are smart enough to see through the lies

………………………………………………………………….

So when the MSM favors your opinion it’s the truth, but when they don’t it’s lies lies lies.

Your intelligence is truly breath taking…………….

#236 Smoking Man on 07.24.12 at 6:14 pm

Haven’t done an essay in a while but one is coming tonight.

I’m going to show you all why we are all the bugs. and the machine is the windshield.

#237 Bill Gable on 07.24.12 at 6:22 pm

I phone keypad drives me insane. Apologies for fumbled spelling. Yipes.

#238 char on 07.24.12 at 6:28 pm

Thanks Bubble Boy and Investx. Hope for renters sake these places soon become available: the rental market in T.O. is really expensive.

#239 Nostradamus Le Mad Vlad on 07.24.12 at 6:43 pm


#129 John — “. . . think people asking themselves about real estate dynamics and liquidity solutions touch the big picture?”

Hi John. Cdn. RE is such a tiny part of what is going on in the world, it doesn’t even register on the radar, and eventually people will learn how to take responsibility for their own actions.

If there were none of this GW / GC horsefeathers going on (the climate will always change), all humanity could adapt to living in the four western provinces, provided a moderate temp. existed.

However, it doesn’t and never will. We’re living in a shitbowl of a classroom. The classroom is in fairly decent shape, it’s humanity that’s gone psycho, and will probably be so in the next decade or so, until things cool off a little.

But this is a great forum to exchange ideas on, whether one agrees or disagrees. Cheers!

#193 Robert — “Hewers of sand and pipers of oil, that’s the Harper game plan.”
— and —
#198 disciple — “. . . a totally fake and intentionally engineered problem.”
— and —
#215 new-era — “The Banks, Global and news stations are todays propaganda machines.”
— plus —
#219 Blacksheep — “. . . George B. or Stephen H. weren’t / aren’t driving the bus, . . . The Assimilation of Canada continues, as scheduled.”

Gennuloffsprings, all of you have hit the head with tons of sharp nails. That’s why this damn blog is so sexy and addictive — way better than crack cocaine! Hi there Harpo, Slim Jim and others — you enjoying this takedown of NAmerica?

220 GregW, Oakville — Hi Greg, and thanks for the links. Seen some of them before, but they’re always interesting to look back on, as compared to the drivel that the m$m serves us daily. Stay well!

#240 JRance on 07.24.12 at 6:46 pm

Garth,

Speaking of overextended car owners, when do you think it will be prime vultching time for used cars and motorcycles? I’ve lost interest in real estate and don’t mind waiting another 5 years to buy a house but I’m really jonesing for a good deal on an NSX or S2000.

#241 robert on 07.24.12 at 7:08 pm

#209 – You must be right. The property bubble created by loose lending in the USA, Ireland, Spain, UK, Italy, France, Canada, Australia, New Zealand, Portugal etc. was a massive coincidence. Absolutely none of the parties involved ever met or communicated with one another as they re-engineered the economies of their respective nations.

#242 eaglebay - Parksville on 07.24.12 at 7:10 pm

#195 GTA Girl on 07.24.12 at 2:51 pm
“Ferrari dealers do not do financing or leasing. Purchases have to be paid in full.”
_______________

Neither do the other dealers. They shop around on your behalf so that they can get their commissions from the financing.
Same with a Ferrari buyer, they shop the financing themselves.

#243 eaglebay - Parksville on 07.24.12 at 7:16 pm

#202 disciple on 07.24.12 at 3:23 pm

You’re a sick puppy.
No conspiracy. Things are much simpler than you think.
Who’s responsible for the sun’s flares?

#244 YagginHT on 07.24.12 at 7:27 pm

Unfortunately Mike the realtor is right.

About which part? — Garth

#245 eaglebay - Parksville on 07.24.12 at 7:29 pm

#217 Keith in Calgary on 07.24.12 at 4:49 pm
“Which is why closed end, or “walk away” leasing has almost vanished from the automotive marketplace, save for a few manufacturer’s.”
__________

Auto leases are back and becoming popular again.
Check it out.
The only difference are the rates (lower) and the residuals (higher).
There were never any “walk away” leases. The lessee was always responsible for extra mileage and any damages.

#246 ballingsford on 07.24.12 at 7:38 pm

Does anyone want to believe anything RBC says about the condo market in Toronto? They could be involved in an International Bank scandal concerning the LIBOR rate. Here’s the link and some of the key statement are posted below.

http://www.cbc.ca/news/business/story/2012/07/15/canada-libor-link-probed.html
***************************

Canada’s Competition Bureau continues to probe a mushrooming international scandal that has already ensnared a venerable British bank and forced the resignation of its chief executive.

Documents filed in an Ontario court suggest the bureau is investigating a possible Canadian link to the scandal that’s rocking the world of global banking: financial skullduggery involving the manipulation of a key international interest rate known as the LIBOR rate.

One of the named parties — the Canadian branch of the Royal Bank of Scotland — has filed a court challenge on the grounds the bureau’s actions are unconstitutional and well beyond the scope of its mandate. But the investigation hasn’t stopped, said bureau spokeswoman Gabrielle Tasse.
******************************

#247 Grim Reaper/Crypt Speculator on 07.24.12 at 7:40 pm

#233 Smoking Man on 07.24.12 at 6:14 pm

Haven’t done an essay in a while but one is coming tonight.

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

Whats his name ?

#248 So it begins.... on 07.24.12 at 7:48 pm

From the Redpin.com
Listings up 82% w/w
Their caption read “There is lots of demand for RE in the GTA right now.”
It’s always a good time .

#249 Steph on 07.24.12 at 7:51 pm

#238robert on 07.24.12 at 7:08 pm
#209 – You must be right. The property bubble created by loose lending in the USA, Ireland, Spain, UK, Italy, France, Canada, Australia, New Zealand, Portugal etc. was a massive coincidence. Absolutely none of the parties involved ever met or communicated with one another as they re-engineered the economies of their respective nations

————————–

That’s what I was talking about, this whole thing was fabricated. No such thing as a coincidence.

In Canada the bubble was clearly fueled by the federal gov. 40years/0 down, when the market started to correct, dropped interests rates to the floor… buy back of bank morgage by CHMC etc…

But still, I don’t have a good and clear theory on why they did it.

Any ideas? Anyone?

#250 neo on 07.24.12 at 8:01 pm

What’s pathetic is this equity market. It’s bad enough you get a late day HFT ramp every day. But planting a story about QE with no real new information 30 minutes before the market closes, when the S&P 500 is just about to break it’s 50 DMA is embarrassing. Of course Garth will keep defending this blatant manipulation and profess a free market exists. We will soon find out if stock prices are really about earnings and top line growth as well as the macro picture, because it is about to get real ugly.

Tempus Fugit…

#251 Nostradamus Le Mad Vlad on 07.24.12 at 8:04 pm


exit Stage Left and Another Brick In The Wall “And all those investors who bought credit default swaps against Europe’s debt are going to show up on Wall Street demanding payment … which Wall Street (like AIG) is not prepared to pay. I guess this is why they have the barricades built right into the sidewalks in that part of town!” wrh.com; 30:43 clip New clip of one of Reagan’s advisers saying the debt / deficits are unsustainable; 3:12 clip The City of Angels. LA, centre of glitz and homelessness; 11:43 clip New Hitler via collapse of EZone? First Greece, now Spain Depression; Colleges Drowniing “Yeah, okay; so our education system is falling apart, 40% of American is out of work, we can’t travel to the Moon any more, our roads have crumbled, our hospitals are failing to heal the sick, but look at this bomb!” wrh.com; Smashing the can instead of kicking it; Crooked US banks Still playing by their own crooked rules; Phoney Tony He can talk. He made around twenty million last year; The US Fed New plans; Losing Faith Most of the west’s citizens don’t believe their govts. anymore — they’re all liars and cheats.
*
Good ol’ CPC They must be scared to citizens! China New city? Billary Can’t think for herself, so works with someone else’s ideas; Deja Vu Iraq’s non-existent WMD, Syria’s too; US Govt. and Vaccines Duh; Iran Virus You know who tops the list for creators; Toxic Nanoparticle Don’t ask. They’re from space; Opposing Agenda 21 By a Rothschild? Monsanto Sue ’em for trillions; Russian Subs In combination with the Russian and Chinese troops in Colo. and other area, it’s slowly beginning to to look like a takeover, and NATO escalates war So what will China and Russia do? See prior link.

#252 daystar on 07.24.12 at 8:11 pm

#219 Blacksheep on 07.24.12 at 4:53 pm

I don’t mean to be overly critical with what I say (yeah, I know, I have a habit of doing that with certain folks), I just want you to think things through.

To believe everything you just said… it must depress you to belong to a nation you neither love or appreciate and judge anyone who does as deluded. Love and appreciation for a nation, thats how I define patriotism anyhow. It must be challenging to believe that all leaders are powerless (even though we’ve seen first hand what their powers can do from war and fiscal/social policy to new laws and governance) and somehow remain permanently so.

For some reason it seems as though you convey that Harper’s choices within the PMO are “forced” or puppetized. No one forced Harper to be a corporate lobbyist or later, a sellout turncoat, he chose to be “americanized” and impress it upon us with powers you say he doesn’t have. In the same breath… other leaders that come after him will choose their own path as all leaders have done before him and they too, will have their own set of “supporters”. It must be frustrating for you to believe you are utterly powerless to change anything politically outside of a vote that you claim is meaningless and yet, still feel powerful enough to try to pursuade the rest of us through opinioned voice that we have no power to change anything ourselves. (good luck with that)

Its disappointing to read someone’s thoughts that refuse to recognize that the fundamental differences between nations or not defined solely by territory, border or culture, but by the systems they’ve chosen through the ages beginning with the rule of law and its constitution and systems of education (a literacy many take for granted), directly reflected through the choices of leadership AND their followers spanning centuries, not mere years… and will do so again.

I see you slipping into political nihilism. It isn’t a warm blanket to insulate yourself with.

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

… just so you know, a political nihilist wants nothing to do with present systems because they prevent the political nihilist from seizing power for themselves. The question you should be asking yourself is… to what end?

#253 Daisy Mae on 07.24.12 at 8:11 pm

#73DON: “I don’t think people really want to know the truth of what’s coming. What happened to the US, isn’t Canada even though we are following down the same path.”

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

That’s exactly it. Anyone who dares to broach the subject is generally met with anger and denial….

#254 Spiltbongwater on 07.24.12 at 8:22 pm

#230 Bill Gable on 07.24.12 at 6:06 pm
Just because a person uses a credit card does not mean they are debt slaves. I use a credit card for nearly all purchases, as it helps me to track my spending, as when I pay cash or debit I don’t have time to audit my purchasing. My credit card does it for me, and through no cost to myself.

#255 Daisy Mae on 07.24.12 at 8:27 pm

#74 RETIRED BOOMER

“I never had any idea he was getting hate mail from mere Realtors! I recall reading several of Mickey’s posts in the past, nothing memorable for me, but then I am just a disinterested party.”

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

Garth has a tough skin — he has to have. Besides, when you’re right, you’re right. These realtors are lashing out ’cause he’s hitting a nerve. Boo,hoo! They’ve had it too good, for too long. Maybe now we’ll do something about those outrageous commissions…

#256 Steph on 07.24.12 at 8:29 pm

#198disciple

While I agree with the part where you say it’s all fabricated, I wouldn’t say it was to enslave the population (they can escape, it’s called bankrupcy)

Again, must be a more rational explanation.

But I can see lots of good thing coming out of this, our world will be changed forever when the master plan is complete.

I just don’t know what they are up to yet….

#257 Junius on 07.24.12 at 8:37 pm

#246 Steph,

You asked,”But still, I don’t have a good and clear theory on why they did it.

Any ideas? Anyone?”

They did it to stoke the economy and keep the country out of going into a deeper recession. It worked.

I believe they also did to win a majority government because they would look like geniuses instead of the irresponsible dolts they were really being. That worked as well.

The problem though it was a temporary move that will over the long term will be more harmful then if they had just let the market fall. Certainly they had to be complete idiots to not know the ramifications when the US was already heading into the foreclosure crisis.

So, in short, the answer is short election cycles combined with greed and power. And stupidity.

#258 Keith in Calgary on 07.24.12 at 8:57 pm

#242 Eaglebay…….

Well……….I “walked away” with my $250 lease security deposit which was refunded by MB Credit because I didn’t have any.

Both of us cannot be correct.

Excess mileage and/or wear and tear affects everyone, people who lease, or finance, or pay cash. It is a red herring. If you “drive it hard and put it away wet” you’ll pay the price…….one way or the other. Same goes with whether or not you maintain your property.

The leasing available out there today, with the exception of MB Credit for the most part, is mainly open ended in nature, or it comes with extremely low residuals and/or very high penalties and money factors attached. Having said that, it all comes down to the cost and use of money versus perceived risk when making the call.

#259 Dontcallmeshirley on 07.24.12 at 8:59 pm

If you don’t have the money to build a diversified portfolio using individual equities, you increase exposure to volatility. Nothing pretentious about that. Just fact. — Garth

———

Your two points are:

1) diversification is desireable to minimize volatility
2) diversification cannot be achieved without deploying seven figures of $$$

These are opinions, not fact. The countless folks out there, including me, doing solid numbers on their portfolios while not complying with either point above prove it.

From Aug 10 to Aug 12, I will have reaped $62k of CASH returns. I have nowhere near seven figures invested.

Please don’t make pronouncements.

#260 Steph on 07.24.12 at 9:09 pm

#254Junius

First, I don’t think any of the people in power are idiots. They just wouldn’t be there.

Second, I doubt the moves were based on Canadian domestic problems. All western governments did the same (Except germany, why?)

So blaming Harper and his gang is a little easy. It seems to be coming from much higher then him.

So still, I can’t figure it out. Garth?

#261 Tania on 07.24.12 at 9:14 pm

#36 Champs-Élysées on 07.23.12 at 9:45 pm

Been there. Done that. You’re right about apples and oranges, though. I consider Europe an “experience” while I consider cottaging a “vacation”. While I’m still working towards retirement (working hard, long hours with 4 weeks vacation per year) what I need is R&R when I’m off work – not traipsing through Europe or anywhere else. Maybe, just maybe, when I’m retired I might feel the urge to return to Europe – or somewhere else I’ve not yet been. Maybe. But when I reach that stage, I’ll probably have the $ from my cottage to support that. All I’m trying to say is that I don’t think owning a cottage is that bad of an investment. As long as you’ve followed Garth’s advice on where/how to purchase. I’ve put in $275k (less than I’d pay over 20 years of “vacationing” in Europe or the Caribbean. It only costs me $4,500 per year to keep it up (less than a week in Jamaica). If I so choose, I can rent out my cottage for $1500 per week – more than most condo owners can get for a month. Do the math. It might not quite add up to Garth’s 5% in ETFs but its not bad. And I have a place to go to any time I choose. My drive to the cottage is quicker than getting through Customs at Pearson. To each their own.

#177 Ryan Tydon – 07.24.12 – @ 12:17 a.m.

Tania you sound idiotic. Do you have any idea what kind of doctors exist in Cottage hospitals? The worst kind, after my friend’s nightmare experience at a Cottage hospital – I would surely drive to Toronto any day to a proper hospital than be stuck in a cottage ‘hospital’ if you can call it that.
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Ryan – Please don’t dis the cottage doctors. Most of them are very good doctors. I, myself, am a health care professional and know a good doctor when I meet one. I am sorry for your friend’s nightmare experience but YOU are idiotic to think that the same can’t happen in the big cities. I worked for Canada’s largest (and “best”) hospital for years. The number of “nightmare” experiences in the best hospitals would shock you. Ryan – are you always this crusty? Or are you just in need of a cool dip in a fresh lake? The heat getting to you? Too bad you don’t have a dock to jump off of….

#262 TurnerNation on 07.24.12 at 10:34 pm

#139disciple on 07.24.12 at 8:55 am

I’ve met Lou a few times in the past, even sitting across from him at a restaurant a few years ago. He tells good tales of past exploits. Likes a drink or two…
I do think he has a few blind spots.

#263 TurnerNation on 07.25.12 at 8:05 am

Everybody knows Lou, from his BNN days.

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