Too cheap to care

Outside Yorkdale Mall, Toronto. A blog dog exclusive.
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More than a year ago I said Sell Canada, Buy America. Real estate values there could only rise. Here they could only fall. Immediately this weedy blog was overrun with detractors who said the US was pre-depression, and I should donate my tiny brain to science. Months ago I told you housing to the south of us had probably bottomed, more evidence only losers bet against America. And the usual gang showed up to say there’s no hope. The system’s screwed. We’re all going down.

Well, let’s see what’s actually happened.

First, the good news. “The crash is over.” So says the chief economist for Moody’s Analytics, taking a look at the latest US housing data. And he’s right. It is, ahead of schedule. The implications for the biggest economy in the world are profound.

The latest S&P Case-Shiller home price index came out this week, tracking the 20 largest cities to the south. The result was all sunshine and puppies – the first year-over-year increase since 2010 and the best absolute jump since 2006. This was a big deal since it came without any new government stimulus program, rate drop or tax break. Simply put, more people want houses and figure they’ll never get cheaper. They also have enough confidence to buy.

This is the fourth monthly increase in prices, hiking them by a fat 2.3%. Meanwhile another index of home prices logged a 6.9% jump in the latest quarter. This comes amid the renaissance of bidding wars for cheapo properties in a number of cities and massive media coverage about a resurgence of bricks.

Prices are rising because demand is increasing and supply falling. Buoyed by the steady but glacial growth in the US economy, more people are bidding, while listings are down to levels not seen since the boom years prior to 2006. A consensus is emerging that the storm is abating, equity’s rising again and housing’s a steal. Hard to argue that. Residential real estate lost 32% of its value to crash the average house down to $173,000, before an abrupt turn higher about ten weeks ago.

Is it real? Yep, looks that way. US interest rates will stay lower than those here for a lot longer. Unemployment is inching down every month. The inventory of foreclosed homes is starting to shrink, instead of swelling as it’s done for four years. And most importantly, people think it’s safe once more to borrow and buy – especially in cities where values collapsed by 60%. Such an opportunity to own a house may never come again in this lifetime.

Of course, consumer sentiment’s still laced with fear and incomes have barely budged. But serious housing deflation has made money more valuable, and goosed affordability. It could not be more dramatically different from Canada.

Here real estate has inflated, not deflated. Since wages and salaries have flatlined, debt’s exploded. We save less, while Americans are saving the most in a decade. We’ve leveraged. They’ve deleveraged. We’re far more vulnerable to rising rates, have less disposable income and think we’re immune. But the average family in Vancouver, Calgary or Toronto cannot afford the average home, without spending between 52% and 92% of gross income. Anywhere in the States, that would bring belly laughs.

Meanwhile it’s interesting that CMHC profits have slipped as the agency that insures high-risk mortgages suffers more claims. Losses on loan insurance have surged 16% in a year, which suggests a growing number of people losing their homes. At the same time, CHMC said this week it’s spending more money on “work-outs”, trying to prevent even more losses by allowing crushed homeowners to defer payments.

CHMC is creeping close to its $600-billion insurance ceiling (it’s now at $580 billion), which is why Ottawa’s trying to prick the housing gasbag. After all, this is a steaming pile of risk equal in size to the national debt, with a lot of it riding on the gossamer wings of newbie homeowners. The feds would be delighted with a 15% haircut for real estate right across the country, because they secretly fear it will be thirty.

So here we are. The early days of the recovery to the south. The fledgling hours of the correction in Canada. There’s no money to be made on housing here. But serious coin to be collected in Phoenix and Miami. Risk is everywhere during times like these, of course, but there’s far more in 604 and 416 than in 415 or 312.

What happened to them will grasp us. Not necessary in the same way, or with similar results. No banks here will fail. No waves of foreclosures or defaults. But slowing sales and falling prices will bring an equity crunch into every home where mortgage debt equaled 80% of the purchase price.

The average down payment is 7%. Figure it out.

211 comments ↓

#1 Bman on 08.29.12 at 9:44 pm

Fiiiirst

#2 donald trump on 08.29.12 at 9:45 pm

buy realeste im donald trump and i say its always a good time to buy .. fools !

#3 JayBe on 08.29.12 at 9:47 pm

:D I’m really happy my momma turned me on to your site Garth!

#4 DD on 08.29.12 at 9:48 pm

True the us housing market is better. However to claim that the gov has no hand at stimulating the housing sector is total BS. That what you get from learning via headlines and ignoring the underlying issues.

There has been no stimulus program for homebuyers since 2010. — Garth

#5 City that smells like it sounds on 08.29.12 at 9:52 pm

Fuuuuuuursssssssssssssssst!!!

#6 Ferrari321 on 08.29.12 at 9:53 pm

2nd? Looking forward to your October show in Toronto

#7 DD on 08.29.12 at 10:02 pm

There has been no stimulus program for homebuyers since 2010. — Garth

What do u think operation twist was all about. The main plan was to keep long rates pushed lower. This is the biggest stimulus of all.

Fail. — Garth

#8 Sebee on 08.29.12 at 10:06 pm

Of course this increase and the 50% of under 40 mortgage holders being under is explainable. But how do you square that equity void with this increase? You think its up from here for US or they will just bounce up an down in single digits?

#9 gladiator on 08.29.12 at 10:07 pm

Garth, a member of the board of a huge Canadian insurer (he resides in Phoenix, AZ) told me this May that the housing market there is getting better, that the number of days on the market is shrinking etc, etc. Guess what he did in mid-July? He sold his house for around 3.5 mil! He is on the board of other companies and runs a wealth management company in the States, so he knows what’s going on.
Moreover, food stamp usage keeps growing and there are other indicators (non-official ones, of course) that show the US is still a sick puppy. They’re in an election year and this is usually a good year for investments. Let’s see what happens afterwards, but Jim Grant is not very optimistic about after-election US.
Time will tell, I guess.

#10 Grim Reaper/Crypt Speculator on 08.29.12 at 10:08 pm

” Immediately this weedy blog was overrun with detractors who said the US was pre-depression, and I should donate my tiny brain to science. ”

——————————————————–

Its true…..it has to be bigger than this > _ <

Same goes for you Smoking Man.

#11 unbalanced on 08.29.12 at 10:14 pm

If you’re an American you can get a low mortgage rate for 30 years and its tax deductable. End of story.

#12 Toronto mine sweeper on 08.29.12 at 10:27 pm

Did I miss something?
When is your show going to take place in Toronto?

#13 Big Al New on 08.29.12 at 10:29 pm

So let me understand this, you won’t accept any of the stats put out in Canada about the state of Canadian real estate. Yet without question your willing to accept the bullshit statistics put out in the US. Kool Aid anyone!

Case-Shiller oozes credibility. — Garth

#14 Rasputin on 08.29.12 at 10:32 pm

Hmmm. The stats are all looking better just in time for an election where the sitting president has done less than nothing. Just a coincidence I’m sure. I’m not buying it. I think no matter who wins there will be a huge incentive to let things drop after the election. Obama is STILL blaming Bush for all his failings! Sure he was handed a steaming pile of $#@!. But so will the winner of the election.
Long story short, the sidelines are looking very nice right about now.

#15 GTA Suburbanite on 08.29.12 at 10:32 pm

Garth, how bad are we going to see it in Oakville???? Prices nearly doubled here in the past 6 or so years.

#16 Happyguy on 08.29.12 at 10:33 pm

From my small understanding, there is a significant “shaddow inventory” of bank held foreclosed RE in the US that is being kept off the market. The rationale for this practice is to attempt to create an artificial bottom for RE pricing then to slowly introduce this inventory to the market as prices rise. The process of foreclosure was slowed due to numerous lawsuits in past months evidenced by longer periods of time that people were allowed to remain in thier residences. Currently, there is a significant number of houses sitting empty with no active sale process in place. Are we looking at a fake dead cat bounce in RE prices secondary to these bank withheld properties? I suppose that perhaps it is still a little early to get too excited about reported increases in price with a surplus waiting in the shadows.
From my memory, is this not a similar process that occurred in the S & L crisis?

#17 TurnerNation on 08.29.12 at 10:34 pm

Banks! Color commentary:

“Globe says TSX’s performance can’t match the big banks

Wednesday August 29 2012 – In the News
The Globe and Mail reports in its Wednesday edition that all of Canada’s top five banks handily beat the S&P/TSX composite index for investor returns over the past 20 years. The Globe’s John Heinzl writes the S&P/TSX had an annualized price return of 6.29 per cent between July 31, 1992, and July 31, 2012. Among the Big Five over the last 20 years, BMO was the laggard. Its annual price return, including dividends, was 12.58 per cent. An investment of $10,000 would be worth $107,100 today. The top performer was Bank of Nova Scotia, which returned 15.49 per cent a year; $10,000 would be worth $178,619 today. Mr. Heinzl says that if you add a dividend yield of 3 per cent to the S&P/TSX — roughly what the index is yielding now — you get a total return of 9.29 per cent for the index. That is well below the total return of the banks. It is worth repeating that the bank with the highest return over the past 20 years will not necessarily be the best performer over the next 20 years. Still, he says, the exercise shows that holding the banks through thick and thin, and reinvesting dividends along the way, has been a profitable strategy.
© 2012 Canjex Publishing Ltd.”

#18 Peter on 08.29.12 at 10:34 pm

Garth, I am a Canadian currently living in the USA. While the media here states housing has stabilized and gone up slightly (google “the big picture” and look at their analysis on housing, it’s not so rosy). Note, one item no one discusses (media or othewise) is the US military downsizing and its affect on the US economy (look at the US economy in the early 90’s and after the vietnam war). The US economy went into recession during each military draw down. Will this happen again…who knows?

#19 Johnny B Good on 08.29.12 at 10:36 pm

Garth, where can one sign up to attend your appearance in Toronto? Thanks.

Coming — Garth

#20 Rob Gunn on 08.29.12 at 10:39 pm

Went to the bank for some reno financing with standard questions, can I get HELOC or require 2nd mortgage? Lender unleashes spiel bout “new” regs no more this no more that.., yeah whatever eyes fully glazed. The grilling starts low at first.., blah blah them how much owing.., zero, then wham blindsided with how much is your home valued at!!?.., WTF! .., I don’t know. I freeze deer in headlights, I used to know, but 3 years of GT I’m not so sure., who?! says banker, nevermind.., assessed at 400 large., worth? whatever some greater fool would pay. What?! says banker. Look girl total POS in my hood on 0.5 or 1 acre listed @ half a mill, condos quarter mill, Sothebys have listed an island out my living room window at 75 million, 780 acres with JD golf course, wild west town, dynamite plant, you do the math banker , how the hell is anyone supposed to know valuations?

#21 Old Man on 08.29.12 at 10:39 pm

Well what can I say as Garth hit two areas within the context of Canada, as it is Arizona in the west, and Florida in the east – bingo!

#22 Marco from Van on 08.29.12 at 10:41 pm

Average down payment at 7%? Average family pumping 52-92% of gross – leaving somewhere between 20% to -20% for everything else (assuming average tax at 30% excl HST).

What, nothing wrong?

I have seen a 250% growth in lease takeover add in kijiji/Craigslist I’ve the last year. Dealers have longer lease terms than ever and the second hand car and boat prices are coming down.

Top end stores are empty (aside from tacky and vulgar vacuous HAM). Restaurant “bum on seats” in GasBagTown are way down. More people use the excuse of “can’t drink and drive” to avoid wine (or buy the cheapest crap by the glass).

Walk about Vancouver and it is showing the symptoms of people pairing back expenses to the core.

That is food, mortgage, unavoidable debt repayments and appearance maintenance – for the rest it is “no frills food” and cheap shelf…

I’m looking to buy a Merc, all the dealers have the standard “I have an offer closing today” and I have the standard “well, call me if it falls through and my price is $X” – I have had 100% call backs (If you trade equities you will know to buy/sell at your price, eg. never at market, at least they have to work to place your order).

It is so easy to digress on tangential lines of thought, but the whole tri-city area is tight…

If RE exposes the naked emperor, in a land full of emperors all will be naked…

Garth, you are doing a heroic service to your community. While I fundamentally agree with your position, your service is also invaluable for those who don’t…

In the land of free speech, anyone inviting serious reflection and offering free education should be heeded and the learning adopted to your own conclusions.

I sleep like a baby at night as my family is taken care of in the long term and I am only responsible for today and tomorrow. I seriously pity those who can only take care of today and tomorrow but have no idea about how to deliver on their reaponsibilities to their families in the longer timeline, all because they did not take it upon themselves to do due diligence and blindly believed generic hype…

Wow, what a digressive, smoking man like rant…

MfV

#23 Marco from Van on 08.29.12 at 10:43 pm

Donald…

Buy a dictionary (or a new keyboard)… Fool! It is RealEstate… Not “realeste”

Always a good time to shut up…

#24 torontorocks on 08.29.12 at 10:46 pm

us recovers, bringing canada up. housing flatlines if anything, wages rise, business as usual. the strategy worked. lets keep this level until the US picks up then its all full bore after that.

#25 IM in C on 08.29.12 at 10:49 pm

I agree with you on the strength and resilience of the
American economy.
Don’t bet on their housing market just yet. There is a steaming heap of ‘shadow inventory’ waiting in the wings

#26 XKR on 08.29.12 at 10:51 pm

“And most importantly, people think it’s safe once more to borrow and buy”

Provided you can qualify. Thats the 3rd leg of the stool.

#27 Canadian Watchdog on 08.29.12 at 10:53 pm

“An increase in expenses related to work-outs on loans in arrears was also a contributing factor to the increase in Losses on Claims.”—CMHC

Another brilliant idea forced by the government’s greasy hands to take taxpayer’s money (including those waiting for prices to decline) to ‘bailout’ speculators and reckless borrowers.

This plan will FAIL when volatility hits home prices.

#28 Freedom First on 08.29.12 at 10:53 pm

Garth, I am not as positive as you, due to the massive debts owed by the European and U.S., Japanese and Canadian governments. However, having sold the house for a nice 30% profit, and having had a very small mortgage on it at the time, always being diversified the whole time, being debt free today, and no financial worries, sure removes having to live a life steeped in the fear of financial insecurity. People willingly putting themselves in vulnerable financial situations has always been something I can’t comprehend, no matter anyone’s situation, income, etc. If a person can not cut their lifestyle back to fit their income, no matter what it is, is simply a bad error in judgement.

#29 ClaudiusEmperor on 08.29.12 at 10:53 pm

The real estate in US will decline by another 10-15 percents on average. There is no bottom without jobs.

#30 coastal on 08.29.12 at 10:53 pm

Sounds like the dead cat bounce down south, one good report after 7 years doesn’t make a trend, nor a bottom.

#31 Mr Buyer on 08.29.12 at 10:56 pm

There were a great number of good months so to speak over the last 2 decades (or there abouts) in Japan and still property value dropped 100 yen per 3.3 square meters over the past 5 years in my little neighborhood. Lets just wait and see. Of course it is different in America. A real estate recovery in America is going to do nothing but serve to justify continued unreasonable prices here in Canada. This is not good news, welcome to the new multiples. Usher in the choir singing the song of the soft landing (there will not be a soft landing as there never has been one). Amped out for a longer period before burning out, that is what we will be facing if America moves into recovery mode now. The fact is America is far far away from the peak it reached and these anemic numbers are just that. Taken as a whole America is simply bouncing along the bottom and incomes will not support a return to bubble prices there in the absence of massive speculation and free money. Should be interesting. I am still going to wait this one out for another year or two at least (maybe five).

#32 City Slicker on 08.29.12 at 11:03 pm

“Does a .5% increase (year-over-year) really “bode well for the housing market”? It has been widely reported the Federal Reserve has spent trillions of dollars suppressing interest rates. There’s been quantitative easing (money printing), “Operation Twist” and near 0% interest on a key Fed lending rate. A 30-year mortgage is hovering at or near historic lows–around 3.5%. This is all we got after all that? According to the latest Case-Shiller report, “As of June 2012, average home prices across the United States for the 10-City and 20-City Composites are back to their summer 2003 levels.” Home prices are back to where they were 10 years ago and this is good news?”

http://usawatchdog.com/housing-prices-rising-real-estate-turnaround/

Yes, it is. An increase beats a decline, except to the fear-biters who come here. — Garth

#33 AgAu on 08.29.12 at 11:17 pm

Garth,

Are you planning to come to Ottawa?

Also, an interesting link…

http://www.theglobeandmail.com/report-on-business/economy/housing/jump-in-claims-pinches-cmhcs-insurance-business/article4507242/

#34 Canadian Watchdog on 08.29.12 at 11:22 pm

#32 City Slicker

“Does a .5% increase (year-over-year) really “bode well for the housing market”?

Case-Shiller Index is three months delayed; this increase was only seasonal. See here.

The US has a looong way to go before prices turn.

#35 Not 1st on 08.29.12 at 11:24 pm

Garth, until the shadow inventory is cleared up and real jobs are created, not crappy part time ones, there will be no housing recovery. The U.S. housing cat is bouncing and you are falling for it.

Look at the numbers of pending sales as well as prices and you will see a healthy incremental growth. If you care to. — Garth

#36 Toon Town Boomer on 08.29.12 at 11:26 pm

Meanwhile it’s interesting that CMHC profits have slipped as the agency that insures high-risk mortgages suffers more claims. Losses on loan insurance have surged 16% in a year, which suggests a growing number of people losing their homes. At the same time, CHMC said this week it’s spending more money on “work-outs”, trying to prevent even more losses by allowing crushed homeowners to defer payments.

No waves of foreclosures or defaults.

HUH? Sounds like a contradiction.

Then learn more. — Garth

#37 Sebee on 08.29.12 at 11:35 pm

Also, since we’re loading up on debt, how can the correction start? Do corrections ever happen in an environment where average non-mortgage debt is growing?

US consumer debt has fallen. — Garth

#38 Tim on 08.29.12 at 11:38 pm

Who would want to live in Phoenix? It’s like Calgary with guns, uncomfortable heat and lots of fat people. Besides, if Romney gets in, they’ll continue to screw the middle class and have more tax breaks for the filthy rich. Who would want to live in that climate?

#39 Evil Smurf on 08.29.12 at 11:39 pm

Garth, did you ever think that what you are explaining in the US currently is nothing but a suckers rally. Sure looks like one to me.

E. Smurf

Bouncing off the bottom is not exactly a rally. Accept positive news for what it is. — Garth

#40 Aussie Roy on 08.29.12 at 11:39 pm

Aussie Headlines

Young couples are being forced to choose between starting a family or buying a house, according to a new report on Australia’s housing affordability crisis.

http://finance.ninemsn.com.au/newsbusiness/8524546/families-chose-between-kids-and-house-report

From Property Observer today comes new data from APM showing that the number of days taken to sell a home increased in the month of July across all of Australia’s state capitals, and has increased year-on-year across all capital cities.

Here’s the breakdown:

Sydney: up 14% since July 2011 and by 43% since July 2010

Melbourne: up 24% since July 2011 and by 80% since July 2010

Brisbane: up 7% since July 2011 and by 63% since July 2010

Perth: up 6% since July 2011 and by 42% since July 2010

Adelaide: up 18% since July 2011 and by 44% since July 2010

Hobart: up 46% since July 2011 and by 110% since July 2010

Darwin: up 22% since July 2011 and by 111% since July 2010

Canberra: up 15% since July 2011 and by 71% since July 2010

http://www.macrobusiness.com.au/2012/08/property-time-on-market-rises/

#41 NewWorldPartyDotOrg on 08.29.12 at 11:49 pm

When house price goes up, it only makes the older people richer and the younger people poorer. Period.

Housing does not create true, long-term wealth. It is massively manipulated by the government and real estate industry for their benefit:

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

If you are a first-time buyer or part of the younger generation who got screwed from this bubble (and you did), you should complain to every politician who you can contact. You can easily find their e-mail addresses or phone numbers on the web, such as:

http://www.parl.gc.ca/MembersOfParliament/MainMPsCompleteList.aspx?TimePeriod=current
http://www.parl.gc.ca/Parlinfo/Compilations/HouseOfCommons/MemberByPostalCode.aspx?Menu=HOC

Similar websites can be found for your Member of Provincial Parliament.

If you do not speak out, you will continue to get screwed by the older generation who controls the government and who have been taking your money to fuel their own wealth.

Spread the word and tell all of your friends to complain to their politicians.

Where do we complain about vacuous demagoguery? — Garth

#42 truth hammer on 08.29.12 at 11:50 pm

Golly Gee….a housing turnaround in the US just as the election looms and the Dems are running scared…..what a co-inky-dink……and with economy actually falling from 2.6 to 1.7 quarter on quarter……well hello liberal media manipulation and howdy suckers rally.

Anyone who knows how different real estate transactions are in the US will tell you that ‘pending sales’ don’t mean diddly…….it’s the ones that come out of escrow that matters. I hear Sears has a great layaway plan too……..it doesn’t mean they take the inventory off the shelf……the store just gives a raincheck in lieu of purchase after a deposit of goodfaith.

Jumbo loan..( Alt A) foreclosures are still yet to crest….the shadow inventory held in REO number in the millions…..unemployment is going up…not down…..and the leading indicators such as Baltic Dry and Ports forecast nothing good in manufacturing OR consumer spending in the near future…..this is why China is stimulating again domestically….exports have tanked.

I think the liberal media is pulling out all the pins to make believe that things are getting better for the sake of the Obamatons in office…..the fact is that nothing anything like a recovery is underway………say recovery to the newly emplyed….sorry there aren’t any…….30++ million hopefuls though.

Paul Ryan said….”Wouldn’t the president want to tell college grads they can move out of their childhood bedrooms and get on with life”………it doesn’t look like the Obama admin has any such speeches lined up.

Talk of recovery should be about the one you see…not the one you dream about.

#43 CalgaryRocks on 08.29.12 at 11:57 pm

#164 penpal on 08.29.12 at 3:59 pm
@ # 135 Calgary Rocks

The list of 100K jobs I listed IS NOT NOR INTENDED TO BE EXHAUSTIVE, BUT REPRESENTATIVE.

The guy moving to your village is in IT. He’s going to be a millionaire working for RIM or some other shitty startup that’s going to work him to the bone and then go bankrupt.

I guess he’s not good enough to work in Sillicon Valley where the big boys play.

#44 Barry Lainof on 08.30.12 at 12:02 am

Garth I’m disappointed in your suggestion that the US is a reasonable place for Canadians to invest in real estate.

Most states, counties and municipalities are on the brink of financial collapse. In fact, some cities have already filed for creditor (read, future pension obligations) protection. Don’t you think that foreign investors are an easy target for increased property taxes. No votes in that group of “taxpayers” to worry about. What will be the capital gains tax in 6-10 years time for non-residents on vacation or commercial property being sold. Will the federal government look at foreigners differently. You bet your a$$ they will. The bankrupt US governments, federal to municipalities will take what ever they can and not care what an Aussie, Canuck or Mexican think – no votes, ponderous court system in place and the ability to amend regulations to affect “foreigners” in a far more damaging way than its own voting citizens.

So as bad as our debt ridden nation is, our friends to the south will treat our citizens with far less respect than their own voters.

So let’s agree that our real estate is overpriced and will correct. Let’s agree that far too many Canadians have put far too much of their net worth into their illiquid homes and taken on far too much debt. But please don’t encourage Canadians desperate to hit the real estate lottery – that the US is a place to invest.

The misinformed fearmongering on this blog is amazing to behold. How did I collect this rabble? — Garth

#45 Big Al New on 08.30.12 at 12:02 am

“Yes, it is. An increase beats a decline, except to the fear-biters who come here. — Garth” This is (the current US financial situation) Japan 2.0 and you know that.

#46 Form Man on 08.30.12 at 12:07 am

#42 truthhammer

It must be hard for you right wingnuts to see the U.S. economy slowly improving under Obama and the Democrats, after Bush and the Republicans did their level best to torpedo it……life is so unfair sometimes…….

#47 truth hammer on 08.30.12 at 12:08 am

BTW…..the Case Schiller is a snapshot…much like a poll……the true measure of accuracy is what data is left AFTER adjustments…….such as the Census Bureau details in the article here.

http://www.businessweek.com/articles/2012-08-29/real-homeownership-rate-at-nearly-50-year-low

Saying that house prices are up generally is selective…inaccurate.

#48 Happy NOT to be Smoking Man on 08.30.12 at 12:09 am

MFV, great posts.

Yes, it is slowing, I SEE IT……60% price decline may be unfolding, this could be epic.

Don’t shit the bed when you read this.

#49 CalgaryRocks on 08.30.12 at 12:10 am

#169 DM in C on 08.29.12 at 4:39 pm
#135

You pointedly ignored this part: “In addition, 25% of all hi-tech start-ups IN CANADA start in K-W. These churn out lots of millionaires (Rim, Open Text, etc.) and have hi remuneration levels.”

Dude, here’s some information for you, that you may find useful.

If you want a warmer climate and the chance to work with start-ups, there is a place for that about 30 minutes from San Francisco. Look it up.

#50 Happyguy on 08.30.12 at 12:12 am

Garth,
Seems a couple of people, at least, are considering the possibility of the effect of the RE shadow inventory and associated dead cat bounce. With respect, even with the numbers of pending sales as well as prices with a significant incremental growth, is this not the same scene that presented during the S & L crisis? From memory, aprox one year after the starting of the recovery of the crisis and the, I think it was called the resolution trust corporation, started pumping out shadow inventory resulting in a big time drop in prices. I believe that about that time, my currently 83 year old dementing uncle, purchased a condo development of 40 units for 10,000 per unit in Arizona. He rode that development’s rents until he got sick aprox 9 years ago and sold them off. Ends up that the timing was pretty fortunate. At least his wife has a nice nestegg to take care of him and herself. Just thinking that maybe just a bit early to get all geared up on a full bore consistent RE recovery. That being said, I fully agree that a full bore gutting of canadian RE is in the makings. I’m happy in my trailer light and ready to take advantage of what ever presents itself. Cracks me up how my professional coworkers can’t figure out how I love living lightly.

Great. More trailer people. — Garth

#51 Not 1st on 08.30.12 at 12:22 am

Garth, consumer debt in the U.S. may have dropped, but that means its just in time for consumers to take on some runaway sovereign debt. It will be passed to them one way or another; austerity, taxes, deflation, inflation, debasement, entitlement reform, etc They won’t even know what hit them.

U.S. GDP for the foreseeable future will be stuck between 1-2%. You can take that one to the bank.

#52 █ ♣ █ Waterloo Resident on 08.30.12 at 12:22 am

I keep reading here on this blog about this guy making $109 K per year and this lady making $89K per year. Let me introduce you to the REAL WORLD:

Graduates from Conestoga College here in Kitchener-Waterloo are graduating with 3 year diplomas in Accounting, into jobs that are paying $14 K to $19 K per year, and they feel themselves LUCKY to get even that !

Imagine what will happen to the housing market when people all begin to become downsized into $19 K jobs?

I just read about how graduates of the college’s Financial Planning course are in high demand, and that there are only 2 grads for every job (instead of 24 grads per job as in regular courses). Well guess what; of the 8 grads from that course last year, one is still seeking a financial job while he works at Canadian tire, another grad works part-time at a hotel (behind the desk, earning all of $12.25 / hr ), and not ONE of them is currently earning over $24 K per year !

I talked to the dean of Business Admin – Financial Planning, and he told me that $19 K is a “GOOD SALARY”, one can really build a life from such humble beginnings.” (that’s a quote from him.) I asked him WHERE does he get that low pay, he told me a large investment house in Toronto. I used to think that Brokers and investment dealers got $250 K Plus, but no, now is under $20 K – minus. If this is what the GFC has done to the financial workers, just imagine what the real estate crash is going to do to the incomes of Real Estate Brokers?

So tell me, CAN YOU LIVE IN TORONTO as a investment broker / financial planner, if you were earning only $19 K per year ? And NO, I’m not bull-SH!TTING you, Business Admin grads from Conestoga are graduating with about $20,000 to $30,000 in debt, and getting jobs that are only part-time, close to minimum wage. ( and almost ALL under $20 K for Financial Planners. )

#53 truth hammer on 08.30.12 at 12:32 am

Philly Sooperfullofcrap is full of crap…….the reason vacation props are not selling as well as residential Phil…is that the buyers have to come up with much larger downstroke……..the vac props can’t be 95% borrowed and downed with a 5% heloc. The simple answer Phil is that in reality Cdns have no real money…..what they have is credit……and second mortgages are not as cheap as firsts.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/vacation-properties-still-struggling-as-buyers-play-the-waiting-game/article4491756/

look for a new web site …www.psooperfullofcrapisadouchebag.com?

#54 new canadian on 08.30.12 at 12:33 am

If it’s just gambling, surely buying a house in US has better chance of appreciation than Canada.
Moody’s should send you a gift for advertising them as if they are a credible institution.
US can’t and won’t create jobs unless China moves to Mars, employment stats are forged, household debt is as bad as in Canada, gov’t debt is going exponential. It’s a joke to buy a house in US.
http://www.shadowstats.com/

You are right, buy from US instead of Canada, unless you can buy Patagonia.

#55 TRT on 08.30.12 at 12:40 am

Correct….Yes, USA!

Incorrect…Interest rates here will stay lower than the USA for a very long time…they will let the Canadian dollar suffer…banks will ensure this and you know it!

#56 Grim Reaper/Crypt Speculator on 08.30.12 at 12:46 am

I think Old Man is Smoking Man with a spell- checker.

#57 Baron von Munchouses on 08.30.12 at 12:56 am

#41 NewWorldPartyDotOrg on 08.29.12 at 11:49 pm

I don’t get this whole “the younger generation is being screwed by the housing bubble” thing.

Why do young people want to buy a house anyway? Why not rent and be mobile. Backpack around the world! If there’s one thing that I’ll recommend to my kids it will be to see more of the world on the cheap while young before settling down somewhere. Puts life into perspective at an early age. I regret not having done more shoestring travel. The irony is, instead of going backpacking, I stayed in school for 13 years post-sec and now pull in mid-six figs and still can’t afford to buy a house in Van west. Lol. So I rent and laugh about it, but this “housing bubble victim” stance, I don’t understand. Strikes me as exemplifying some problems with younger Canadian identities these days.

#58 lookoutbelow on 08.30.12 at 1:00 am

I wouldn’t be getting too excited about the housing “recovery” in the US just yet, Garth.

The word is that the “underwater” properties are being scooped up by the Investor community who are buying them in bulk and renting them out. Case Schiller doesn’t know if the buyer is an average guy or a sophisticated investor.

Is the average consumer buying houses? Wait and see.

#59 TRT on 08.30.12 at 1:07 am

VANCOUVER

AUGUST NUMBERS: Vancouver West is slated to have the highest month over month price increase in history. 2 days to go and numbers are pointing to…get ready…

25% INCREASE in Average prices…WOW!! There goes that 15% drop everyone’s been cheering about.

Until people start to realize what’s driving the Vancouver n Toronto markets, they will be oblivious. Its Immigration and in all forms it equals over 10,000 people per week. Believe whatever you wish but the info ha always been in front of you.

#60 Nostradamus Le Mad Vlad on 08.30.12 at 1:10 am


Everything’s all sunshine and lollipops which is fine, but what happens if China unexpectedly tanks (taking us with it), calls their IOUs from the US then brings in a new gold-backed currency? (Opinion), this and this.

All have equal amounts of highs-lows, ups-downs, positives-negatives doled out to us — that’s the nature of life. But no one knows when to expect the unexpected, as the unexpected is unknown.
*
Barclays Bailed and probed; Nixed Wealth tax on rich; Okanagan cost of living Expensive; UK and west’s youth Becoming a slave culture; 40 Items to Barter; China is following the US; Gazprom puts Arctic project on hold; Loosing Grip Germany may be milking the EU dry; China – Oz Veiled threats; Discount stores boom; Home prices in Blighty; Loans dry up Not a bad thing.

Budget Deficit Nice chart; China’s ghost cities; Wells Fargo Great PR (not); Whistler, BC Made the big time; Spectacular Hedge Fund implosions; Sept. 12 The Fourth Reich speaks; Holland Anti-EU, anti-Brussels; California Finally figured out the reason why they’re broke; Productivity wanes with demand; Passing the Buck China was responsible for the ’08 crash, not Wall St. (Hah!); US Student Loan debt climbed; US Companies moviiing abroad to escape taxes; Auto Makers head for Russia; The Rise and Fall of Bitcoin.
*
2:35 clip George Carlin;s Hippy Dippy weather forecast; Croaky voice or lucky man? Chocolate Like tea and coffee, it’s good for one; Gravy Wrestling The weird version of putting lipstick on an albatross; Merkel’s Green Shift Germans burning more coal; NASA discovers new planets; Highway 61 Revisited.

#61 Al on 08.30.12 at 1:17 am

Scotia took the money from sale of its Scotia Tower and used it to buy ING Canada.

#62 Langley Mom on 08.30.12 at 1:17 am

A few comments…

@#20 Rob Gunn: You had me snorting my Diet Coke/Vodka reading your post – love the inside/outside voice dialogue you had there!

@23 Marco From Vancouver: Classic line, nicely done: “Always a good time to shut up…”

@38 Tim: Have you been to Phoenix? Regularly? Or TX as a whole? Don’t insult it by comparison with Calgary. Most would/should take it over Calgary any day, bar none. As a whole, TX is one of the few states that suffered the least during the whole US economic meltdown. I do work with USAF HQ in San Antonio, a lot of money there and in that state specifically as a whole. And as to weather? Out of +40 or -40, pick your poison…

@#43 CalgaryRocks: Errr, it’s “Silicon” actually. Not Sillicon. Please remain in your own [Albertan] village. Thanks.

@#52 Waterloo Resident: Frankly, people making 19K/year after post-secondary education have only themselves to blame. Proof-in-the-pudding story: I paid out approx $1000 and 8 months to become a Lifeguard/Swim Instructor when I was 18 to put myself through University. Aside from the fab tan lines, great hours and never worrying about finding full-time summer employment, while going to school I made minimum 30K/year. Average wage in Aquatics falls in the $16 (YMCAs) – $22 (municipalities) range plus 12% in lieu of benefits (you’re typically auxiliary staff) per hour…so if someone in Accounting (read: a person supposedly smart enough to figure out tax loopholes for me) can’t figure out how to make some quick money through school and then supplementing while they get established in their chosen career …hate to be blunt, but frankly they probably just wasted 2-4 years of education on something they have no business being in.

#63 futureexpatriate on 08.30.12 at 1:31 am

Spot on as usual. In Vegas cash-only bidding wars are ensuing for thousands of trashed and semi-trashed homes under $100,000 (that had peaked in 2008 for $400,000 and $500,000 plus) and investors (to rent) and flippers are snapping them up, most not lasting longer than a month. Most realtors won’t even show them without bank account statements. The Depression was averted this time, and cash is cleaning up.

Canada can’t even count on fleeing liberals post-November, and all the fleeing conservatives flee south, as always.

#64 Canadian on 08.30.12 at 1:32 am

I wonder if any of the 46.5 million Americans on food stamps will be buying a house soon?
Or how about the huge numbers of unemployed that are not counted as such and come off the official numbers every month.
Garth, we all hope you are right about this miniscule uptick, but quite a few compartments have already flooded.

#65 Humpty Dumpty on 08.30.12 at 2:24 am

Prices are rising because demand is increasing and supply falling.

According to whom… your crony Amercian friends…

http://usawatchdog.com/housing-prices-rising-real-estate-turnaround/

http://www.wftv.com/news/news/local/hidden-foreclosure-rates-expected-grow/nRJ78/

G your starting to sound like that condo “Queen”
Bob Rannie..

http://www.huffingtonpost.ca/2012/08/27/bob-rennie-vancouver-housing-bubble_n_1777122.html

He may even be willing to hold your hand also…

#66 Scott in Gibsons on 08.30.12 at 2:52 am

Standard of living is falling for most people in the world. European austerity, North American debt and joblessness, and rising food and energy costs have made us all poorer. How can the global economy grow under these conditions?

US real estate will remain weak because the Boomers are sellers to fund lifestyle. They are losing their pensions, seeing their cost of living rise, and stuck with miniscule returns on investments. There is no appetite for the debt required to fuel a real estate bubble now. The sellers will be in control for a long time.

US government debt took over 200 years to pass one trillion dollars. Now the debt rises one trillion dollars every 283 days. No government would survive cutting this deficit so the market will one day force discipline instead. How will that look? No one knows but it will be big and disruptive.

What’s in your portfolio over the next few years will be very important.

#67 cynically on 08.30.12 at 3:11 am

#44 B L – Most cdns buying in the US the last 2 or 3 years have been buying second homes, not for investment but for vacation purposes – great winter climate and many golf courses around Palm Springs and Phoenix. Several thousand, maybe more but such a lucrative market up here that US realtors have been coming here with their sales spiels. The Snowbirds must like what they’re hearing and the prices must fit. I would guess that the majority are cash purchases, the prices being so low percentagewise. The same situation, I’m sure, has been taking place in Florida with eastern cdns taking advantage of it and US prices are recovering with inventory dropping! I get a special monthly report on what’s happening in Snowbird country.

#68 Aaron - Melbourne on 08.30.12 at 3:30 am

Maybe I’m jumping in to defend GT before the first stone is cast but as GT would advise you not to buy individual shares I believe the message holds true for individual properties.

Maybe instead of getting uppity about market bottoms in the US you’d do better to look at yields on multi-unit complexes.

Even if the yanks are “buying the f’n dip” on detached homes there’s still an awful lot of people renting, unable to buy back in.

Maybe stick to College towns or other areas with some social vitality and run the numbers?

#69 Buy? Curious? on 08.30.12 at 3:42 am

*IMPORTANT INSTRUCTIONS TO ENSURE MAXIMUM EFFECT TO READING MY POST*

*If you own own a house, listen to this song while reading.

http://www.youtube.com/watch?v=pCx5Std7mCo

*If you’re renting because of advice received here, listen to this song.

http://www.youtube.com/watch?v=wM0IDLAntVM

Could the American housing rebound mean the false hope of seeing a similar decline in Canadian housing may not occur? I remember seeing some muppet on the Keiser Report claiming that there could be 90% decline in parts of Canada. Bahaha! Any decline that’s happening now is only based on some repeated Chicken Little Mantra that the sky was falling. It’s all cyclical, like the market, the weather, or female reproduction. It’s funny how a few months ago, US stats that pre-dated their collapse were used on this blog (I disagree it’s a pathetic blog, it’s more of a mullet/Nickleback fan page) to demonstrate that Canadian housing had similar stats and we were definitely heading down the same path. “Get into REITs, sell your gold!” Yadadda, Yadadda, Yadadda. Well, there may have been a slight dip but has it been the Depression that some trailer dweller predicted? I sold in 2008 and rented until May of this year. Do you know that the house appreciated almost $70k in those 4 years? D’oh! And now that Ah-merica is gaining momentum since the financially illiterate have been culled from the herd and are back to the Mcjobs they can handle, how long are people who are renting by choice going to pay someone else’s mortgage? Are we near the bottom of the market now, a few months from now, a few years from now? Do you get a badge for how you’re so liquid and mobile , Mr and Mrs Arm Chair Economists? If you’re going to come here so you can feel good about renting and talk about how you’re getting popcorn ready to watch House-pocolypse Canada, good for you. You’re nuts. You might as well wait for the second coming of christ on the corner of Yonge and Dundas with that deep voiced loon with the tumour growing on the side of his cheek. In 13 years, I’ll take the pepsi challenge with any whiny Boomer, Doomer, Gloomer or if they’re from BC, Shroomer and we’ll see who’s done better.

*what song did you listen to?*

#70 Mark on 08.30.12 at 5:44 am

US consumer debt has fallen. — Garth

Replaced by US government debt, which has mushroomed.

Don’t bet against America. – Garth

Why Garth, is it different there? Why doesn’t it matter that they are the largest debtor nation in the world?

A recovering economy doesn’t need ZIRP. The US recovery is just an illusion Garth, soon bond holders will wake up and realize the US can’t pay its debts, just like Greece can’t pay its debts. The outcome will be the same.

See Garth, Vancouver isn’t the BPOE. Toronto isn’t the next Manhattan.
Alberta oil fields won’t prop up inflated real estate in Calgary.

It’s not different here, and it’s not different in the US either.

#71 canus on 08.30.12 at 5:56 am

The recovery is the US is real. Housing is up, by the same metric (C-S) as everyone was using on the way down. It is still a weak recovery and it could easily turn back down or flatten for decades, but Garth is correct at this moment.

The global meltdown may still happen or not, either way I wouldn’t bet against the USA.

#72 Ron on 08.30.12 at 6:00 am

New article claims condo prices to RISE in Toronto: http://www.canadianbusiness.com/article/96969–condo-prices-to-rise-in-most-cities-in-2013-demand-to-continue-genworth-says

#73 Smoking Man on 08.30.12 at 6:50 am

Todays pic. Priceless

#74 John on 08.30.12 at 6:53 am

Garth wrote:

“First, the good news. “The crash is over.” So says the chief economist for Moody’s Analytics, taking a look at the latest US housing data. And he’s right. It is, ahead of schedule. The implications for the biggest economy in the world are profound.”
——-

This isn’t real. This isn’t true. And it certainly doesn’t reflect the social process that is going on in Canada and the US. Perhaps at one important ( and legitimate level): Denial.

Being absolutely fair, you can say that reality is relative and driven by perception. But human needs are real, identifiable and impossible to hide from. Basic human dynamics which go on inside your home…in the community…the world.

Nothing really has changed since 1960. Just velocity. And more maturity. The suppression has steadily unfolded to expression.

A lot of great comments on this blog…really opening perspectives. These “technical” posts are coming from the thinking associated from actually hanging out with and being in “Scotia world”…the red rocket.

We become what we hang around…but the miracle is forming identity anyway. And separating from it. But relating to it. In a way that serves real human needs ( self and others).

That’s social process. You’re trying to avoid it. Don’t wr all.

#75 dd on 08.30.12 at 7:11 am

#69mark,
Because that what the news media has told the world for years. Why question the tried and true.! Brainwashing at its best.

#76 Jim Lahey, Sunnyvale Trailer Park Supervisor on 08.30.12 at 7:26 am

“Great. More trailer people. — Garth”

And what is wrong with more trailer people on this blog? Ricky, Julian, Bubbles and the rest of the Sunnyvale gang are going to turn on you Garth with any more of your trailer jabs. Remember the grand time you had at the FASTGFBDCParty and back off on the trailer park bashing…

#77 pbrasseur on 08.30.12 at 7:34 am

Canadians live in econonic fantasy land…

http://fullcomment.nationalpost.com/2012/08/29/kelly-mcparland-canadians-close-their-eyes-and-pretend-the-economy-is-ducky/

The trip back to reality will be something to watch and no fun.

Prepare for more PQ and NDP governments and things of that sort, prepare for major tax grabs from coast to coast.

Not only it might make sence to buy in the US, it might become a good idea to move there…

#78 Darlene on 08.30.12 at 7:47 am

I know this is anecdotal at best, but this summer I have seen more American plates. I haven’t seen this many since 2007. It gives me the impression that those that didn’t borrow beyond their means are now spending.

Garth is right when he says don’t bet against America.

Hopefully if the American is reading he could confirm this.

#79 TurnerNation on 08.30.12 at 7:48 am

BNS.US took an afterhours hit, after last night’s news.

What bank mergers? :-)

#80 Victor on 08.30.12 at 8:01 am

RBC hikes payout, posts highest-ever quarterly profit of $2.2-billion

http://www.theglobeandmail.com/globe-investor/rbc-hikes-payout-posts-highest-ever-quarterly-profit-of-22-billion/article4509258/

Royal Bank of Canada, the country’s largest bank, says it earned $2.2-billion in the third quarter, its highest quarterly profit ever, and is raising its dividend by 5 per cent to 60 cents per share.

The profit, which is $946-million higher than in the same period a year ago, comes largely from its core Canadian consumer lending operations.

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

I love the smell of bank profits in the morning.

#81 neo on 08.30.12 at 8:06 am

Garth,

Question. Do you know what the long run average since World War II is for debt to income in the U.S. at the start of a new credit cycle? Currently it is sitting at 134% which is way off of its highs af 160%, which is an improvement. However, the answer is 75%. Even if you want go with 100% we are still WAY off where they need to be. Why? The government never allowed this deflationary, deleveraging cycle to fully unwind. Why? This credit cycle was larger than the Great Depression. They would rather intervene and artificially prop it up with stimulus and hope that the real economy grows beneath it. After 5 years all stimulus has done is interfere with the free market and displace price discovery of various financial assets, commodities, etc. I have no doubt housing is forming a bottom. But Garth, this is a very politically and economically engineered bottom maintained by trillion+ dollar deficits and and zero interest rates. A true recovery in housing will occur without these crutches. A true housing recovery and new credit cycle will require far more deleveraging on the part of consumers. The government will not allow that to happen. They cannot allow another recession to occur in the next few years which is not possible either. The fragility of this recovery cannot bear the impact of another downturn the next few years but it is inevitable. Lastly, we are never going to return to even half of where prices were in the foreseeable future. That robust an economy is dead for a generation nor do they want to go back to those prices. That means millions of jobs tied to that housing ramp are never coming back and won’t be able to be absorbed into the economy leading to what is already a serious structural unemployment problem we are seeing. Bottoming is great but the strength of the recovery is yet unknown and I think will be more muted than you are suggesting.

#82 futureexpatriate on 08.30.12 at 8:12 am

The US had a surplus just a short while ago in the 90’s, and since the right leadership is staying it will happen again. Especially since the wrong leadership that almost screwed the entire planet will never lead again (demographics, idiot dark ages policy, racism, and Americans wising up fast).

So yeah, sure, future is so bright Americans aren’t exactly wearing shades yet, but we are squinting.

#83 Smoking Man on 08.30.12 at 8:12 am

Bank profits huge. Div’s going up.

Where are the head officess? why they located in 416.

Jobs and pay hikes to follow. Confidence up.
Carney turns in dove from hawlk. (See financial post) as I have been calling.

Re cap

Jobs and Money 416
Rates on hold and weighted to drop.
No inventory of SFH 416

Its going to be a nasty carsh realtors a nasty crash

O laughingcon. You are so screwed

#84 Victor on 08.30.12 at 8:23 am

TD profit rises 14%, increases dividend

http://www.theglobeandmail.com/globe-investor/td-profit-rises-14-increases-dividend/article4509272/

Toronto-Dominion Bank reported a 14-per-cent increase in third-quarter profit, driven by record earnings from its network of branches in Canada, and higher revenue from wholesale banking.

In a quarter when all of Canada’s Big Five banks boosted their dividends, TD also announced it was increasing its quarterly payout to investors by 5 cents, to 77 cents, an increase of 7 per cent. It is the second time this year TD has increased its payout to shareholders.

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

More good news for those of us with diversified portfolios.

#85 Rex on 08.30.12 at 8:36 am

“Only loosers bet against America”, 15 trillion debt, 1.5 trillion annual deficit and rising, continuing increase in food stamp usage, 15% unemployment rate (U-6).
Some people pump real estate, others pump the American Way and the blessed banks.

I just pump spelling. It’s “losers.” — Garth

#86 Risk Analyst on 08.30.12 at 8:44 am

I’m also a recent grad making approx 60k per year working as a wait for it risk analyst. Graduated with a double major in stats and Eco. My GF makes the same working in accounting, she graduated with bcom
Degree. We both Owend crappy shoeboxes in Toronto. We recently sold recently to move back in with my parents to save up an actual down Paynemt for our dream home. Hopefully at a discount. We are both financially savvy but in opposition to Garths rules consider owing a home a priority. This is a fairly typicall scenario with the grads we know.

#87 Hugh Jasz on 08.30.12 at 8:49 am

#52 █ ♣ █ Waterloo Resident on 08.30.12 at 12:22 am

What does a community college diploma in financial planning qualify one for? Selling mutual funds at a bank branch? Working back-office at an investment bank?

I dunno. All I know is that if the dean told me his training is going to qualify me for minimum wage, I’d just keep my tuition and either train somewhere else, or go work somewhere else for minimum or better.

T.O. Bubble Boy RE: net worth calculation:

The bearded oracle’s first sentence is valid

Assets – Liabilities = net worth.

His rule of 90 minus your age only applies if your net worth is greater than the market value of your home.

If the home price is higher than 100% net worth the calculation breaks down and gives you junk like the 333%

Quite simply, Net worth is $180K, and all of it is in a house. That is 100% of net worth in a house.

Whatever. This argument is boring and technical.

The key point is that it’s a dumb idea to have all of your net worth in a house and I’ll agree with you on that point.

#88 ttiegs on 08.30.12 at 9:00 am

What’s your source on the average downpayment being 7%?

I made it up. Quicker. — Garth

#89 refinow on 08.30.12 at 9:13 am

Nobody is talking about Scotia’s purchase of ING??

Funniest thing was this was a deal that was negotiated months before.

Coincidence that Scotia 3 months ago, sold it’s most valuable piece of real estate, Scotia Tower, and put well in excess of $1 Billion in cash into the “Bank”, to announce yesterday they are buying ING and putting a large sum of cash down for this purchase….

Who are they kidding…

This deal was struck months ago…

#90 Not 1st on 08.30.12 at 9:14 am

Yup its different in the U.S.A – until it isn’t, just like it wasn’t in Ireland, Iceland, Greece, Spain, Italy, Vancouver, Toronto…etc.

The bet against the U.S is a sure thing. Sure they might inflate that sucker for a quarter or two, but long term demographics and sovereign debt tell the future. Garth will be shouting that one from his 54th floor window in about 3 years time. Guaranteed.

#91 eaglebay - Parksville on 08.30.12 at 9:15 am

#46 Form Man on 08.30.12 at 12:07 am
“It must be hard for you right wingnuts to see the U.S. economy slowly improving under Obama and the Democrats, after Bush and the Republicans did their level best to torpedo it……life is so unfair sometimes…….”
_______________

Or left wingnuts, entitled bloodsuckers.
Obama had 4 years to do something about the economy.
Yet, he did nothing. Just making it worse.
Obama has increased the US national debt from $10 trillions to $15 trillions. The worse record of any presidents.

#92 Kevin on 08.30.12 at 9:30 am

“The stats are all looking better just in time for an election where the sitting president has done less than nothing.” – Rasputin

Nothing, except for killing the world’s #1 terrorist, ending 2 wars, bringing universal healthcare to all US citizens, assisting in deposing Libya’s despot dictator, and turning around an economy that was in a spiral dive when he took the oath.

Other than that, you’re right, he’s done nothing.

What did Bush do, again?

#93 eaglebay - Parksville on 08.30.12 at 9:33 am

#52 █ ♣ █ Waterloo Resident on 08.30.12 at 12:22 am
“I keep reading here on this blog about this guy making $109 K per year and this lady making $89K per year. Let me introduce you to the REAL WORLD:

Graduates from Conestoga College here in Kitchener-Waterloo are graduating with 3 year diplomas in Accounting, into jobs that are paying $14 K to $19 K per year, and they feel themselves LUCKY to get even that !

Imagine what will happen to the housing market when people all begin to become downsized into $19 K jobs?”
_______________

I call BS.
Your information doesn’t meet the stupid government regulations on minimum wage.

#94 rembrandt on 08.30.12 at 9:38 am

A more realistic observation can be found at:
http://news.goldseek.com/GoldenJackass/1346270400.php

Realism from a golf-pumping site? Yeah, right. — Garth

#95 OhGod on 08.30.12 at 9:40 am

Great. More trailer people. — Garth

Yes, more insults from the Politburo.

#96 CalgaryRocks on 08.30.12 at 9:43 am

#43 CalgaryRocks: Errr, it’s “Silicon” actually. Not Sillicon. Please remain in your own [Albertan] village. Thanks.

well that’s a siLLy argument. I’ve lived all over and I’m not even from Alberta.

#97 eaglebay - Parksville on 08.30.12 at 9:46 am

#60 Nostradamus Le Mad Vlad on 08.30.12 at 1:10 am
“Everything’s all sunshine and lollipops which is fine, but what happens if China unexpectedly tanks (taking us with it), calls their IOUs from the US then brings in a new gold-backed currency?”
________________

Don’t bet against China. China will not “tank”.
They are still growing at over 7% per year.
1.3 billion people have to eat, need clothes, tools, communication, transportation, shelter, medical services, etc… As it happens, the Chinese people gets wealthier.

#98 CLAY on 08.30.12 at 9:54 am

Garth,
Unemployment in the US is not inching down. You are flat out wrong. Initial claims have been rising for 6 weeks.

http://www.zerohedge.com/news/initial-claims-miss-third-week-row-highest-six-weeks

Also, can you spot the housing bottom you claim?

http://www.zerohedge.com/news/spot-housing-bottom-new-homes-sale-drop-lowest-ever-average-new-home-price-plunges-2012-lows

#99 patiently Waiting on 08.30.12 at 9:59 am

# 81 Neo

Digging below the surface and examining the details always tells the real story . . . your comments are very insightful and much appreciated!

pw

#100 eaglebay - Parksville on 08.30.12 at 10:00 am

#70 Mark on 08.30.12 at 5:44 am

Blah, blah, blah…
The Greek economy is smaller than Toronto’s.
The Greek debt is owed mostly to foreigners.
The US debt is owed mostly to Americans.

#101 eaglebay - Parksville on 08.30.12 at 10:04 am

#74 John on 08.30.12 at 6:53 am

Which planet are you from?

#102 unbalanced on 08.30.12 at 10:08 am

On August 26 you tell us to pray for Vegas, Miami and Phoenix. Today you tell us to buy. Why aren’t alot of rich Americans buying these deals up? Why so many food stamps? There are so many holes in this theory. Smart people are learning how not to be ripped off any longer. They don’t trust. Who can blame them. I’ll sit on the sidelines earning 12 to 15%. You just have to out smart society.

There are bidding wars and bulk sales in all those cities. Google, then type. It’s safer. — Garth

#103 eaglebay - Parksville on 08.30.12 at 10:11 am

#85 Rex on 08.30.12 at 8:36 am
““Only loosers bet against America”, 15 trillion debt, 1.5 trillion annual deficit and rising, continuing increase in food stamp usage, 15% unemployment rate (U-6).
Some people pump real estate, others pump the American Way and the blessed banks.”
_______________

Go Obama, go.

#104 eaglebay - Parksville on 08.30.12 at 10:16 am

#86 Risk Analyst on 08.30.12 at 8:44 am

Wow, what an education you both have.
My neighbor is a bookkeeper and she makes over $100K
a year. She completed grade 11.
Do you know the difference between accounting and bookkeeping?
Now, go buy a house.

#105 The American on 08.30.12 at 10:16 am

At #8: Sebee, you have a good question. Yes, it is true many Americans have negative equity. The prices are indeed climbing at a faster rate than analysts expected. But the equity gap is there because, as Garth pointed out, the country as a whole lost 32% of value in real estate. The equity gap is diminishing, albeit it at a very slow rate. As prices continue to push upward, less Americans will have negative equity.

I can tell you that inventory in Seattle is nearing an all-time LOW and prices are on the upswing again. Developers are re-entering the market in several areas throughout the nation, and the cranes are starting to pop up again in a seemingly much more selective fashion.

#106 The American on 08.30.12 at 10:17 am

At #9: Food stamp usage had hit an all-time high. However, food stamp usage is on the decline now, not the incline. Also, unemployment is shrinking month by month, and has been for several thus far.

#107 WING on 08.30.12 at 10:21 am

#86
GARTH rule is purely from a financial planning point of view, does not consider emotional value and satisfaction of life value of owning/living in a home.

#108 Toronto_CA on 08.30.12 at 10:21 am

http://www.thestar.com/business/article/1249028–condo-prices-set-to-rise-in-2013-as-demand-continues-to-grow-report-says

I love the tongue in cheek insert here in disclosing this is a report from Genworth:

“Genworth — which earns revenue from selling mortgage insurance — notes that rising prices for single-detached homes are driving first-time buyers to condos, but retirees also continue to prop up demand.”

Condos are not going up in price in the GTA. That would be ludicrous.

#109 The American on 08.30.12 at 10:23 am

At #13: Big Al News, you’re absolutely correct! I wouldn’t accept ANY stats coming out in Canada as it is now a well-known FACT the CREA and Canadian government have been manipulating data for years about the state of real estate in Canada. Also, those numbers you get up there is much like the fox guarding the hen house. What’s to trust?

Case Shiller’s interest is not backed by banks nor a government. End of story.

The U.S. has highly-transparent, user-friendly systems in place for consumers to fact check data that is supplied. These systems include privately based and publicly based systems. All tax data, sales history (including names of buyer/seller, price, mortgage amount, etc) is easily sourced online for FREE via government issued websites within each county. Also, sites like http://www.trulia.com http://www.zillow.com allow consumers to fact check data supplied by real estate boards and others, including Case Shiller.

#110 Mr Buyer on 08.30.12 at 10:37 am

#69 Buy? Curious? on 08.30.12 at 3:42 am
………………………………………………………..
And they’re off, Canadian Real Estate will not depreciate because American Real Estate is appreciating….
Another 1000 deer caught in the head lights. RED ALERT…Bubbles inflate then crash and bubble values do not return in the scorched earth environment left behind by bubbles (never mind betting against America, DO NOT BET AGAINST BUBBLE MECHANICS). Buyer beware, now is not the time to buy a house. Imagine a wild forest fire that absolutely consumes a massive old growth Forrest, then imagine returning to the devastation scant months later to see a few green shoots here and there. Now imagine somebody telling you that the thousand year old forest is back because green shoots have been observed there (even though starving deer came right behind the observer and consumed the shoots). That is about the situation America is in. Anybody pretending America is BACK is doing just that, pretending. That is not to say America is dying or it will never be back, it is a great country, and a fine neighbor but it is not going to be BACK for a long long time. We have to pull our own butts out this wringer we have been caught in.

#111 Hoof - Hearted on 08.30.12 at 10:39 am

I think the problem with the post boomer generation is they got sucked into an fiat economy and tied their horse to it and rolled the dice. Highly educated, highly in debt but in narrow fields, easily made redundant.

The economy is like one of those game shows where a person is placed in a clear box with money on the ground. The wind machine is turned on and the person has “X” time to grab the $$$.

QUOTE by Taibbi article on Mitt Romney

By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you’ll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It’s almost enough to make you think he really is qualified for the White House.

The unlikeliness of Romney’s gambit isn’t simply a reflection of his own artlessly unapologetic mindset – it stands as an emblem for the resiliency of the entire sociopathic Wall Street set he represents. Four years ago, the Mitt Romneys of the world nearly destroyed the global economy with their greed, shortsightedness and – most notably – wildly irresponsible use of debt in pursuit of personal profit. The sight was so disgusting that people everywhere were ready to drop an H-bomb on Lower Manhattan and bayonet the survivors.

Read more: http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz252W5Y8vW

Prime Example:

Quote:

Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in “management” fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren’t crying: They’d made more than $100 million on a $5 million investment.”

The modern economy would have modern analysts stating that Romney was brilliant. However old school types would be disgusted at the leveraging scam. While its doubtful Romney will win, is this indicatvie of the calibre of the pool of future candidates?

We don’t need any more pencil pushers moving “fiat “from one electronic account to another .

A monkey without a suit can do that.

#112 eagle eyes on 08.30.12 at 10:39 am

Most Canadians who buy in the US would be pulling equity out of their own house in Canada since it is hard to get financing in the States. If you decide to rent it out and receive revenue, you would be subject to file an income tax return and pay taxes. Have you factored in all these costs Garth?

1. Closing costs (extra because you are Canadian)
2. Property Management fees
3. Interest rates no where to go but up (changes soon apply to HELOC’s)
4. Annual accounting costs to file a US tax return.
5. Loss in rental income from deadbeat tenants (heard economy not so great in the States)
6. very illiquid asset
7. homeowner’s association fees, property taxes, repairs and maintenance.

Didn’t I heard somewhere that REIT’s are better?

Prior blog posts have dealt with these issues. — Garth

#113 Angel on 08.30.12 at 10:40 am

“But slowing sales and falling prices will bring an equity crunch into every home where mortgage debt equaled 80% of the purchase price.”

Yeah, yeah, yeah, heard it here first, a long, slow melt that will be slow enough to make all those that bought with 40-year ams and 5% down payments still look like geniuses while the rest of us who did the “prudent” thing are locked out by 25 year ams and high interest rates. This correction is like watching paint dry.

#114 The American on 08.30.12 at 10:42 am

At #44: Barry Lainof, you stated “Most states, counties and municipalities are on the brink of financial collapse.”

Correction… Less than 6% of all municipalities and States are on the “brink.” Canadian media sensationalism toward negative sentiments in the U.S. is unbelievable. It has lead many Canadians into believing just what you stated, which simply is not true. While in Vancouver last week, I watched some painfully horrible news casts. One included the Canadian equivalent of Suze Orman, the original female financial planner with her television show. It was hilarious. She was all roses and puppies to counter act the most recent Transunion report about Canadian household debt reaching an all time high, exceeding by several points what Americans had done. She was quick to point out that in recent months, Canadian revolvoing credit card debt had dropped, but she would not provide by how much in way of percentage. Want to know why? Because it is very, very little. What she FAILED to state is that Canadians taking out HELOCs to pay down credit card debt is the reason this statistic is pointing the way it is. It was pretty damn funny. I would suggest Canadians stop taking everything your media states at face value and instead start asking WHY numbers may or may not be pointing in one direction or another with Canadian household debt loads. They’re simply out of control.

#115 The American on 08.30.12 at 10:51 am

At #58: Case Shiller DOES understand which properties are for investment purposes. This is recorded as such at time of closing with the bank, and it greatly affects rate the borrowing entity receives. Lenders review, in-depth, if you already have a primary residence. If you do, any property exceeding that is deemed a 2nd home, which receives “investment property” rates.

#116 Gord In Vancouver on 08.30.12 at 10:54 am

What happened to them will grasp us. Not necessary in the same way, or with similar results. No banks here will fail. No waves of foreclosures or defaults.

___________________________________________

…only because it’s much tougher to walk away from a Canadian mortgage.

#117 Old Man on 08.30.12 at 11:13 am

#103 eaglebay – the difference between bookkeeping and accounting is keeping two sets of books. :)

#118 disciple on 08.30.12 at 11:14 am

#57 You make 400K per year, and you laugh. And then you wonder why you can’t understand the rest of the 99.99%? I’m holding up 3 middle fingers, read between the lines…jack…

#119 Tony on 08.30.12 at 11:24 am

No banks here will fail? There’s still quite a lot of banks in Canada and many of them will fail. Almost all second tier mortgage lenders will declare bankruptcy. Face the facts and these are the facts.

No Schedule A chartered bank will fail. — Garth

#120 Tony on 08.30.12 at 11:31 am

Re: #111 eagle eyes on 08.30.12 at 10:39 am

Anyone who actually believes American real estate will rise in price can always buy land there. I personally see a flat lining in prices like Japan. After the America election world stock markets will crash putting downward pressure once again on real estate markets.

#121 robert on 08.30.12 at 11:35 am

Twenty years ago my family had to rent while we were waiting for our house to be built. Our neighbors were a couple in their early eighties and they were amazingly active. One friday night they invited us for dinner and the gentleman told me that he never misses Wall Street Week and we had to watch it before dinner. I was shocked that he had a notepad and was making notes during the show. Well the following Sunday at my daughters soccer game i was telling one of the fathers about my neighbor and much to my surprise he said do you not know who he is? Turns out my neighbor had a net worth estimated at 1/2 billion dollars. a couple weeks later we invited our new neighbors to our house for supper and in advance i wrote out our entire financial picture and my intention was to share it with him and ask for his opinion. i will never forget that night as i explained to him what i had done and asked for his opinion and his answer shocked me. He said i donot need to see where you are at right now as that is not important. He then stated son remember this going forward that a wealthy man by the year 2012 will be a man with no debt. He then went on to say you need no other advice than this to become wealthy.. HMMM The RE market in Canada is screaming that something is up and its not prices. IMO this is not going to be a healthy correction of 25% its going to end with a rush to the exit and i believe this has already began but is still in the early stages. i live in a city of 18,000 and follow all sales and listings from $250,000 to $340,000 daily. As of yesterday there were 101 listed homes of which 60 had already had price reductions. Now for the alarming part.. Since July only six homes have sold from this group and four have been withdrawn. i will let you judge the health of this market!!!

#122 DM in C on 08.30.12 at 11:38 am

#49

DUDE Here is some information for you that YOU might find useful:

1) I am not a dude. That assumption was amusing.

2) I am not a code monkey

3) Silicon Valley is a nice place to visit, but we don’t want our kids growing up there.

#123 DonDWest on 08.30.12 at 11:52 am

#103 eaglebay – Parksville

Where does she work? I’m curious to know about a company that pays bookkeepers 100K a year. I’m also interested in knowing how she bypassed the gatekeepers that tend to automatically screen out anyone with only an 11th grade education.

#124 eaglebay - Parksville on 08.30.12 at 12:03 pm

#110 Hoof – Hearted on 08.30.12 at 10:39 am

What’s wrong with the Ampad deal?
Looks legal to me.
I wish I had thought of that when I was younger.
Go Romney – Ryan, go.

#125 Old Man on 08.30.12 at 12:10 pm

No Chartered Schedule A bank will fail because if one gets into a bit of trouble the others will come in to execute a temporary support system; not to mention the Bank of Canada greasing the wheels if needed to correct any problem.

#126 eaglebay - Parksville on 08.30.12 at 12:11 pm

#119 Tony on 08.30.12 at 11:31 am

Then buy in Italy.
The world stock markets will not crash. Only the Italian markets.

#127 KommyKim on 08.30.12 at 12:12 pm

#90 eaglebay – Parksville on 08.30.12 at 9:15 am
“Obama has increased the US national debt from $10 trillions to $15 trillions. The worse record of any presidents.”
_____________________________________________

Huh?

http://zfacts.com/p/318.html

#128 eaglebay - Parksville on 08.30.12 at 12:16 pm

#122 DonDWest on 08.30.12 at 11:52 am
#103 eaglebay – Parksville
“Where does she work? I’m curious to know about a company that pays bookkeepers 100K a year. I’m also interested in knowing how she bypassed the gatekeepers that tend to automatically screen out anyone with only an 11th grade education.”
_______________

Self employed and self taught.

#129 Nemesis on 08.30.12 at 12:29 pm

“More than a year ago I said Sell Canada, Buy America.” – Hon. GT

Evidently you’re in ‘GoodCompany’, OldPol… or so it would seem, given the JollyPrognositications of the ConvictedFelon RightHonourable Lord Black of Crossharbour – whose recent experience of YanquiHospitality cannot help but bolster his views…

[FT] – Republicans can end 15 years of US stupidity

…”It is an abiding mystery why the US, after leading the west to the greatest strategic victory in the history of the nation state in the cold war and the triumph of democracy in most of the world, has been for about 15 years, in public policy terms, an almost unrelievedly stupid country. America’s enemies could scarcely have devised a more suicidal programme than the one that was followed: outsourcing nearly 50m jobs while admitting 20m unskilled aliens; throwing American lives and $2tn after nation-building in the Middle East; and inundating the world with trillions of dollars of worthless real estate-backed debt, certified as investment-grade by the palsied lions of Wall Street.”…

http://tinyurl.com/8zopqrp

[NoteToGT: CB’s prose waxes more sanguine towards the ‘wrap’]

#130 Daniel Hall on 08.30.12 at 12:42 pm

So Garth, what do you make of this from the Canadian Press today:

TORONTO – A new condo report suggests first-time buyers, retirees and population growth will continue to fuel demand and price growth for the compact living spaces over the next few years.

The study by Genworth Canada found that average condo resale prices are expected to rise next year in seven of the eight metropolitan centres studied.

Prices in Toronto are projected to jump 2.5 per cent to $312,352.

The highest increase however, is expected to be in Edmonton where prices could rise 3.2 per cent.

Vancouver is the only city where condo prices are expected to drop, by two per cent to $348,152.

This is a credible as Royal LePage’s house price forecasts or Re/Max’s cottage reports. — Garth

#131 Canadian Watchdog on 08.30.12 at 12:48 pm

#118 Tony

US bank liabilities are 75% of GDP, European banks are 300% of Euro GDP and Canadian banks are 212% of GDP.

When Garth can defy the laws of math and quantify how the government will backstop our banks, I’ll believe him. But he won’t because it’s impossible to do without inflated the debt or a default.

Those are Mark Carney’s words, not mine.

#132 Arthur on 08.30.12 at 12:55 pm

#92 eaglebay – Parksville

Yeah exactly. Minimum wage in Ontario is $10.25. That is 21K/year if you work 40 hours a week. That $12.25 at the hotel is over 25K/year if it is full time.

Someone working in accounting making 14K/year is totally bogus unless they only work a couple days a week.

#133 dosouth on 08.30.12 at 12:59 pm

Condo price to rise in 7 out of 8 major markets next year – Who are these people at Genworth?

http://www.ctvnews.ca/canada/condo-prices-to-rise-in-most-cities-in-2013-demand-to-continue-1.935871

The people who want to loan more money to high-risk clients, guaranteed by the taxpayers. — Garth

#134 snotglue on 08.30.12 at 1:06 pm

Not going to attempt to “fence” with you over the US economy/housing recovery (or PMs) so I’ll defer to Jim Willie (he’s probably almost as smart as you)

http://news.goldseek.com/GoldenJackass/1346270400.php

More gold-pumpers. Very credible. — Garth

#135 Bobo on 08.30.12 at 1:12 pm

Please be careful spooking readers by saying CMHC’s insurance claims have risen, more people are losing their homes, foreclosures, etc. The fact is that the insurance book has grown faster than claims, so as a share of what they’ve underwritten, claims are actually down, not up. That’s good, not bad.

#136 -=jwk=- on 08.30.12 at 1:16 pm

@ waterloo resident. According to the 6 month post grad d survey reports Conestoga publishes every year, Business Admin class of 2012 had vast majority working in their field with average income around 40k. The lowest salary was 20,100. (ie min wage). Average of 40k, reasonable amount for a 3yr program. New immigrants with limited english skills could expect to start at min wage just to get some experience. They will move up.

6months after grad about only 5 grads (of ~150) were still looking for work.

Seems like a decent program to me, maybe you should find a better group of people to associate with :)

#137 Do we agree? « Harderblog on 08.30.12 at 1:16 pm

[…] presidential election.  It’s also true in terms of divergent views about the housing markets on either side of the border.  Or how about the partisan views on who will or won’t be in contention for the Super Bowl […]

#138 Spiltbongwater on 08.30.12 at 1:35 pm

Garth, any chance you can move to BC and join the free enterprise coalition Liberals. We need some fresh faces here. You will likely lose the riding to the NDP, but you could get some good sound bites, and offer Christy a job as chief amazon when she loses Pt. Grey riding.

#139 Roial1 on 08.30.12 at 1:36 pm

#42truth hammer on 08.29.12 at 11:50 pm

……well hello liberal media manipulation
—————————————————–
Well hello gullable sucker.
——————————————————–
Every time I read that reactionary and stupid line I want to beat on the head of the speaker till there is an opening for information to get in.

Please do some reserch on the ownership of any and all media. There are NO liberal owners.
All of the media belongs to the right wingnuits.
For starters Rupert Murdock comes to mind. The “Black” papers and Roy Thompson’s get lead off the pack.

Only dummies would still use the line Liberal media.

Or (right wingnuts)

#140 Investx on 08.30.12 at 1:38 pm

59 TRT:
VANCOUVER

AUGUST NUMBERS: Vancouver West is slated to have the highest month over month price increase in history. 2 days to go and numbers are pointing to…get ready…

25% INCREASE in Average prices…WOW!!
———————————————————-

Source?

#141 Investx on 08.30.12 at 1:40 pm

87 ttiegs:
What’s your source on the average downpayment being 7%?

I made it up. Quicker. — Garth
————————————————
So no official and credible sources?

I’m not your researcher. — Garth

#142 Investx on 08.30.12 at 1:44 pm

107 Toronto_CA:
http://www.thestar.com/business/article/1249028–condo-prices-set-to-rise-in-2013-as-demand-continues-to-grow-report-says

I love the tongue in cheek insert here in disclosing this is a report from Genworth:

“Genworth — which earns revenue from selling mortgage insurance — notes that rising prices for single-detached homes are driving first-time buyers to condos, but retirees also continue to prop up demand.”
———————————————————-
If only all news articles included such disclosure and perspective!

#143 Hoof - Hearted on 08.30.12 at 1:57 pm

#123 eaglebay – Parksville on 08.30.12 at 12:03 pm

#110 Hoof – Hearted on 08.30.12 at 10:39 am

What’s wrong with the Ampad deal?
Looks legal to me.
I wish I had thought of that when I was younger.
Go Romney – Ryan, go.

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

Go head….the secrets out….never too old.

Otherwise read the whole Taibbi article…and then wonder why the SHTF…?!?

#144 Investx on 08.30.12 at 2:00 pm

When a dividend hike is announced for a bank (or other companies) does that apply to both common stock and preferreds?

#145 Hoof - Hearted on 08.30.12 at 2:14 pm

#120 robert on 08.30.12 at 11:35 am

So…if I hear you correctly…what the gent was saying is that he foresaw SHTF 20 years ago……. and thus wealth becomes even more of a relative term

Assume he has passed on…….curious what did he invest in and make his fortune?

#146 Seriously? on 08.30.12 at 2:20 pm

Wake the hell up.

Here’s another number for you freaks.

According to Hilltimes.com there are approximately 150,000 members of the Conservative Party of Canada.

Leaders are elected by one member one vote.

Less than one one-thousands of a percent of the population of Canada decide what kind of country you will live in.

An even smaller number of people tell the Prime Minister what is going to happen and how to do it.

When you bought the building did you really think that it came with the elevator?

No, the elevator is extra, what you got was the shaft.

Thanks for coming out. Better luck next time.

#147 daystar on 08.30.12 at 2:21 pm

#113 The American on 08.30.12 at 10:42 am

Excellent points.

Canada has a credit bubble on its hands and it won’t become a problem until higher interest rates hit Canada which will likely be years. I believe that 3 to 5 years from now, Canada will see above normal rates that kicks off, ironically, with a U.S. recovery particularly in housing that I see beginning sometime early next year validified by next fall. As U.S. housing recovers in valuations, Bernanke will have room to raise rates and once that happens, rates will rise here but unlike the U.S., rise higher and possibly start sooner. Shadow inventories are substancial but who controls them? Enough said.

I do feel compelled to offer opinions on what Garth has touched on here this past week. Firstly, REIT’s. I’m not an expert but did spend a couple hours cruising through, what, the dozen or so REIT’s in the REIT sector and found 2 that I felt comfortable owning, Dundee being one of them. The rest… not so much. Within REIT’s are winners and losers, they aren’t all built equal. The sector overall has enjoyed a near record low interest rate environment for several years and as long as that enironment doesn’t change, the sector will continue to do well overall but it is a sector that is vulnerable to higher rates and this includes financials. No investor or FP should delude themselves as to what the consequences of higher rates will do REIT’s or for that matter, the economy as a whole.

Garth has been positive and feeling the crowd with REIT’s to some degree and positive on financials and they currently are doing well. This is the result of credit expansion coinciding with 3.5 years of near record low interest rates and a heavily deregulated mortgage environment (until late). Tighter regulations will slow credit expansion, specifically as CMHC reaches its $600 billion cap limit as most already know but credit expansion isn’t needed forever to generate profits. The financial sector is poised to milk the credit bubble they’ve created so to speak as time marches on but there is a risk to the financial sector that we shouldn’t stick our heads in the sand over here and that risk comes with higher interest rates.

Stiffer regulations and higher rates will do one of two things that we shouldn’t pretend won’t come. The first is reduced consumer spending and the second is higher unemployment. Both factors have a downside to financials that could be anywhere from moderate to severe depending on how high rates go and how much unemployment climbs from layoffs particularly in construction and RE so I’ll try to speak it plain as I can.

Are financials and REIT’s (a few) a good place to have your money? Sure. Today. Why not, and it is likely to be a good place to be until rates rise. HOWEVER…. once rates do rise, financials won’t be so rosy. I think preferreds will be ok until the market senses risk that higher rates bring so the question there in terms of share value is what effects rates will have on preferreds and I’d love to some feedback on that one in particular.

Its fine to be optimistic about the “buffering effect” that recourse loans have (it bought Spain a couple years but then what) and outside of Alta, bankrupcies won’t soar but what could soar as a consequence of mere normal to above normal rates is high unemployment and lower consumer spending that breeds, just as it did in the U.S., a recession all on its own from merely trying to meet the consequences of elevated debt service and what follows, if sustained, is higher bankrupcies so… lets be aware that there is risk out there? It’s not measured in months but it is there in years so we can speak of financials and REIT’s and preferreds as safe but for how long? What kind of timeline can we accurately put on its safety? How many years are we away from true risk entering into financials?

Ever windy, off topic, annoying, volumous, attitudinal, how convenient it would be if a pain in the ass like myself wasn’t around to rock the boat right? But hey… if we can’t talk about the true risks to the whales at the center of the economy (our banks), then why does this blog exist? The upside (credit expansion, low rates) has papered profits in financials well. The downside (higher rates, credit contraction, deleveraging, unemployment, reduced consumer spending) can and will happen. Things change. One of the classic mistakes most if not all investors make is to become a fan of something just because you own it. In other words, it becomes personal. To borrow Garth’s words, we aren’t Japan. Just my opinion but the question we should be asking ourselves is what kind of timeline financials have before it turns bad. To put it simply, financials aren’t recession proof.

When is Canada going to experience its next recession? We know what will cause it and the risks aren’t as external we might initially assume. A credit bubble combined with a housing bubble has created domestic risk like no other and it WILL be realized with higher rates so I’ll ask it again.

When?

#148 Canadian Watchdog on 08.30.12 at 2:22 pm

Speaking of “work-outs”, consumer proposals for June just released.

Alberta CP up 16.4% y/y in June.
British Columbia CP up 8.4% y/y in June.
Ontario CP down 4.4% y/y in June.
Canada CP up 3.1% y/y in June.

There was a big increase in bankruptcies for Alberta, chart here.

#149 Hoof - Hearted on 08.30.12 at 2:24 pm

HPD: Disgruntled worker bulldozes building

http://www.chron.com/news/houston-texas/article/HPD-Disgruntled-worker-bulldozes-building-3822225.php#item-10892

Buildigng for sale..cheap !!!

#150 Canadian Watchdog on 08.30.12 at 2:28 pm

Chart corrected:

Speaking of “work-outs”, consumer proposals for June just released.

Alberta CP up 16.4% y/y in June.
British Columbia CP up 8.4% y/y in June.
Ontario CP down 4.4% y/y in June.
Canada CP up 3.1% y/y in June.

There was a big increase in bankruptcies for Alberta, chart here.

#151 Foggy on 08.30.12 at 2:33 pm

Canadian banks will fail? Record earnings this year and many banks have increased their dividend to shareholders. The preferred shares, I assume…

http://www.ctvnews.ca/canada/five-canadian-banks-report-billions-more-in-earnings-1.935970

#152 Jim on 08.30.12 at 2:55 pm

#91: “Nothing, except for …ending 2 wars, bringing universal healthcare to all US citizens”

You are clearly delusional. I fail to see any ended wars, and the Obama administration has participated in new military action in Somalia, Libya, Pakistan and now Syria. (Those penniless insurgents aren’t blowing up heavy tanks by themselves).

The ‘universal healthcare’ claim is the most idiotic. You have obviously not researched the issue. Left wing groups in the US are aghast that the statute has largely been crafted by private insurance companies, all 2000 pages of it. It is NOT a universal insurance plan like we have in Canada. It is mandatory private insurance with additional levels of administration, and penalties for those who fail to purchase insurance.

#153 Investx on 08.30.12 at 2:55 pm

140 Investx:
87 ttiegs:
What’s your source on the average downpayment being 7%?

I made it up. Quicker. — Garth
————————————————
So no official and credible sources?

I’m not your researcher. — Garth
—————————————————-

You’re the one making the claim.
Back it up.

Done previously. Look it up. — Garth

#154 Jim on 08.30.12 at 3:01 pm

#135 : I would not assume that self-published reports on employment are trustworthy. There is a huge problem in the US right now (e.g., follow the Times Supplement or Chronicle of Higher Education) about schools publishing false data on employment rates. Law schools in the US have been hammered for this recently, and the articles will tell you the sort of dirty tricks they use to fudge the numbers.

Maybe Conestoga’s reports are accurate. I haven’t a clue. I think the default assumption is that one should be wary when the educational institution has an incentive (particularly if it is private, and relies on enrolments to make payroll).

#155 Sebee on 08.30.12 at 3:07 pm

Look, Condo prices in Canada will go up.

http://money.ca.msn.com/investing/news/business-news/condo-prices-to-rise-in-next-few-years-2

I swear, it’s time for me to start my own blog about how evolution is not real. Hey, if it’s written on the internet, it must be true.

#156 marf on 08.30.12 at 3:10 pm

I work in the lumber products industry. We have been surprisingly busy the last few weeks.

#157 disciple on 08.30.12 at 3:12 pm

#123 eaglebay… “Go Romney-Ryan go…” You mean: “Go, Richard Jenkins-Casper Van Dien, go”. They are actors in politics…

#158 disciple on 08.30.12 at 3:19 pm

#145 Seriously… And the more shocking fact is that about half of people still believe that elections determine their leadership. There’s a real reason voting is anonymous and not even a requirement as a citizen?! How can a nation determine its leadership if less than half bother to vote, it’s ridiculous.

#159 Sebee on 08.30.12 at 3:21 pm

It wasn’t Sub-Prime that took down US, it was Chinese savers!

http://www.cnbc.com/id/48814165

#160 disciple on 08.30.12 at 3:22 pm

And don’t tell me it’s logistically impossible to get everyone’s vote… Revenue Canada figured out a solution to that one a LONG TIME AGO…

#161 luke8929 on 08.30.12 at 3:30 pm

So Canadian realtors are full of nonsense and fudging numbers but the NAR in the US who has a history of revising both pending and actual sales downward is correct and truthful?

#162 DonDWest on 08.30.12 at 4:00 pm

#127 eaglebay – Parksville on 08.30.12 at 12:16 pm

“Self employed and self taught.”

And clients trust someone with an 11th grade education to do their bookkeeping? Nobody demanding to see her credentials or licenses? Wow, she must be physically attractive. . .

Back in my parents era this may have been possible, but I somehow doubt it today. Not that I agree with it, but the stigma is if you don’t have a college degree, you’re as dumb as a sack of bricks. In most jobs were I’ve acted as an independant contractor, every second lead I had demanded I show some sort of license or diploma.

#163 Bruce on 08.30.12 at 4:09 pm

High interest rate makes old debt more easy to be payed off.

Lowing interest rate harms the old creditor and destroys capital.

#164 Sebee on 08.30.12 at 4:19 pm

#37 Sebee on 08.29.12 at 11:35 pm
Also, since we’re loading up on debt, how can the correction start? Do corrections ever happen in an environment where average non-mortgage debt is growing?

US consumer debt has fallen. — Garth.

————

Exactly, yet we Canadians don’t seem to have ever started deleveraging – hence, no correction yet in Canada.
As you frequently say, and others on here – it’s debt driven. So perhaps the question should be, when will Canadians start deleveraging? As that will likely align with the inevitable RE correction.

#165 DAFFY DUCK on 08.30.12 at 4:21 pm

#42 truth hammer

You either suffer from recency or choose to stick your head in the sand.

Obama didn’t put the US into their current predicament. Who was in before him? What did they do? Now you want to elect a guy who has been outsourcing American jobs. Don’t you have some other blogs you can spew your ideological rhetoric around. Your reasoning and logic is quite embarassing.

#166 Mitt Romney on 08.30.12 at 4:32 pm

Eagle Bay…Parksville? That’s in the 51st state….

I think I will sell toxic default swaps to their City , and then foreclose on all the homes. Most of the people are old farts no one will miss.

#167 Westernman on 08.30.12 at 4:39 pm

Kevin @ # 91,
Are you kidding? Please stop watching the CBC ( Communist Broadcasting System ).
This current Goomba in the white house has got to be the worst disaster since that lame brain liberal Jimmy Carter spent 4 years screwing things up… and like that worthless Liberal this one will also be turfed in November.
Absolutely one of the biggest mistakes the American people have ever made – and they have made some big ones…

#168 CalgaryRocks on 08.30.12 at 4:45 pm

#121 DM in C on 08.30.12 at 11:38 am
#49

DUDE Here is some information for you that YOU might find useful:

2) I am not a code monkey

A paper shuffler then? There’s always a need for good paper shufflers. Good luck in your new job if you’re going to look down on your co-workers and call them code monkeys.

You have no class. Just like spitting on Calgary on your way out even though it fed your kids and allowed you to earn the experience for a new ‘better’ job.

3) Silicon Valley is a nice place to visit, but we don’t want our kids growing up there.

I don’t think they invited you.

#169 Devore on 08.30.12 at 5:08 pm

#8 Sebee

Of course this increase and the 50% of under 40 mortgage holders being under is explainable. But how do you square that equity void with this increase?M/blockquote>

Supply and demand. The market is finally working its way through the surge of sellers from the crash. Banks are still trickling out foreclosures, rather than flooding the market with them, so there will be steady supply for years. But everyone who needed to sell, and could afford to do so, has already done it.

Demand for well priced properties in good condition has always been good in US. There were even bidding wars. But too many listings are grossly overpriced. Vacant houses are deteriorating. Sellers will eventually drop their prices, and market will work its way through the inventory.

Finally, investors put a floor under house prices. Once they can get a good return on a property, they will buy it. It makes good business sense to buy rental properties in many parts of the US, suggesting prices do not have far too fall, and even if they do, it is still better to buy than rent. It just might be that regular people are figuring this out now. Hence, prices are stabilizing and creeping up.

#170 OnlyTheBankersLaugh on 08.30.12 at 5:09 pm

Prior blog posts have dealt with these issues. — Garth

Garth, As with your answer to InvestX, you say to find it on a previous article. It would be great if you had a search feature for the amazing content to peruse here. Any plans for adding search to articles and to blog comments so we can 1) capture good data/writing and 2) catch really drunk posters when we sniff out contradictions for sport and publicly shame them.

http://www.youtube.com/watch?v=Nyrzyd5Rq1Y

Especially at bonus time with recent Q’ly reports……. Only The Bankers Laugh

#171 robert on 08.30.12 at 5:17 pm

Lets see the bankers now believe that your real estate as collateral is only worth 60% of the appraised value. Up until a week ago Gold was a tier three capital instrument with a 50% collateral limit and has now been raised to tier one capital in other words raised to 100%. Hmmmm lets see it appears that the banks are saying that real estate is now a tier three asset and has a collateral value of just 60%. Talked to an accredited appraiser the other day and was told that he has never seen so many appeals on appraisals. Not uncommon to see these appraisals moving closer to assessment values and this alone could stop this market in its track. Would anyone in a slowing market pay $50 to $100k over assessment value. An example was given where a couple were buying a townhouse for $345,000 with 70k down. The bank ordered an appraisal and you guessed it the appraisal was $290,000 a full 25k over assessed value. The bank appealed the appraisal and the result was $285,000. Needless to say the couple walked and should of sent the appraiser a gift card for a nice dinner. i fully expect that this movie will soon be playing in a theatre near you and will be playing for years to come. If you want an idea of future value or the first downside target have a peek at your assessment value unless of course you want to sleep at night.. In watching our local market i have noted that the new listings coming on are already being priced well below comparables of the current listings which now look rediculously priced. The next 12 months will be very interesting and could join the infamous real estate collapse of the early eighties.

#172 Devore on 08.30.12 at 5:29 pm

#22 Marco from Van

I’m looking to buy a Merc, all the dealers have the standard “I have an offer closing today” and I have the standard “well, call me if it falls through and my price is $X” – I have had 100% call backs (If you trade equities you will know to buy/sell at your price, eg. never at market, at least they have to work to place your order).

You should “accidentally” say “call me _when_ it falls through”, see how they react ;)

But yeah, never pay retail. With equities, I _always_ put in my own price, sometimes I have to wait a couple of weeks, but I _always_ get my price. With the markets so volatile and moving up and down for no reason, makes no sense not to low ball.

#173 truth hammer on 08.30.12 at 5:40 pm

Don’t you just love these Liberal nutz who are infected by the CBC ‘American Outlook ‘ disease? It’s just plain retarded as a Canadian to concern oneself with whatever the social policy of the day is popular in the USA and who is going to adminsiter it……in this respect the CBC is plainly anti Canadian for brainwashing these wacko liberals into thinking that whatever they say has some importance to the US or to the Canadians who seek a better economy here…in this country.

What every Canadian should be concerned about is how much and how many is/are going to flow over the border to benefit the Canadian economy. The leftist drones who take the CBC Liberal ideology and spew out every Obama announcement as if they were little Americans waiting in the wings should be ashamed of themselves.

As a Canadian I don’t give a crap what the CBC has to say about Obamas policies as opposed to the current government in Canada……..we live in Canada…..not the US…stop watching the CBC and start fussing about the bottom line in Canada.

#174 Smoking Man on 08.30.12 at 5:45 pm

At the duke meeting my accountant for a stratagy taxes made way to much. He just called in a cab on the way down. He’s losser drunk. Ah how do I work this to my advantage?

#175 IM in C on 08.30.12 at 6:01 pm

http://blogs.calgaryherald.com/2012/08/30/market-update-and-look-at-calgarys-increasing-list-to-sale-price-gap/

Today’s puff piece, from the Calgary Herald. It isn’t even written by a columnist (whom the Herald would have to pay). It is written by the marketing Manager of a real estate company !

#176 dosouth on 08.30.12 at 6:03 pm

Westernman #166 – This current Goomba in the white house has got to be the worst disaster since that lame brain liberal Jimmy Carter spent 4 years screwing things up… and like that worthless Liberal this one will also be turfed in November.
Absolutely one of the biggest mistakes the American people have ever made – and they have made some big ones…
___________________
Are you kidding?

Have you been watching the RNC comedy special this week – and you talk about the Whitehouse? Hopefully you are kidding….

#177 dm in c on 08.30.12 at 6:16 pm

#167

Hahahah. I am not taking a better job. I’m a VP now. Going where there is more opportunity in my field is not spitting on Calgary. Grow up.

Talk about classless. Go shine your truck nuts and let the adults talk.

#178 Suede on 08.30.12 at 6:36 pm

Wow, Vancouver and burbs’ market sales not looking too good right now. Not sure the poster’s source but….

from:

http://vancouvercondo.info/2012/08/question.html/page-2/#comment-171148

“What a difference a year makes. As we get through to the last 2 days of August, we can pretty much see where the month will end and overall it’s not pretty. I have so many stats to summarize but here are some interesting highlights.

1.) SFH in West Vancouver will end the month with approx 1 sale per day. Down 50% from last month and down 70% from last year. MOI will now be over 20 and up from 5 last year. Inventory is near record at 530 units.

2.) Richmond SFH. July repeat. Same sales level, same inventory. I would say prices have to be down. MOI close to 20. The month had a blip in the first half with the first 10 sales days coming at 33 sales but the next 10 days being 21 sales. Quite a different second half.

3.) Van-West Attached (Appartment/Townhouse). This is a big big market so it’s tough to have it stop completely. It is the centre of the uninformed buyer especially young people with parents money. This month will be 15% below last month, 30% below last year and pretty much on par with 2008. Many sources have indicated prices are down but maybe about 5%. So many units are available. MOI in this large market will end the month close to 9, up from 5 last year and 8 last month. The sales pace in first 10 days and second 10 days were constant.

4.) SFH Van-East. – An intersesting market. I don’t want to get on East Van but you have to admit that much if it is a dump. Not all but there are pockets where there are houses where you could not imagine living but these places sell for 600,000. In any case, this was one of the last places in Vancouver were young people could buy a “House”. Not because of desire but because of need. As for the stats. Sales in final 10 days of month were down 40% from first 10 days. Total for month will be down 30% from last month and close to 50% from last year. MOI in this previously tight market will be 9 compared to 3.5 last year. Inventory is fairly high but not at record levels. Sales here are below 2008 levels (compared to Van-West which are actually up from the 2008 level which was only 46 units).

5.)Attached Van-East. This was market where in the past 2 months was really spiking. Sales were opposite the trends of all the other markets and seemed to be an anomoly. Not sure if it was new product coming for re-sale or just that people could get so much more so they were going there. In any case, that has now all stopped and come back to crash territory. Sales are down 33% from last month, 7% from last year, and 12% from 2008 levels. MOI is now at 8 and up from 5.5 last month.

6.) Richmond Attached. Who would buy anything there? Well – not many people any more. MOI is now above 13 with inventory pretty much at record levels. There are over 1500 attached properties for sale in Richmond. This market already started to crash last year so this compares to 8 MOI in August 2011. As for a condo crash – Richmond has to be on the list. What are they going to do with all those condos by the airport that are moving towards completion?

7.) The other two close suburbs where young professionals can live – – Burnaby and North Van. Last year these were the hottest. MOI under 3, you could not get property and inventory was really short. Now, we’re moving into crash territory for Burnaby and finally some weakness in North Van. Burnaby, a city with 250,000 people, will sell only 40 SFH this month. That’s 1 for each 6,000+ residents.”

#179 TurnerNation on 08.30.12 at 6:41 pm

Vive le Quebec libre?

“Quebecor’s Sun Media launches property-selling website

2012-08-30 17:09 ET – News Release

Mr. Martin Tremblay reports
SUN MEDIA CORPORATION UNVEILS NEW REAL ESTATE STRATEGY
As part of a drive to offer customers the best possible experience, Quebecor Inc.’s Sun Media Corp. has unveiled its new strategy for real estate websites. It is launching ViaProprio.ca, a new site for property owners who want to sell their property themselves, and is also adjusting the positioning of its Micasa.ca site, one of the busiest real estate sites in Quebec with more than 150,000 unique visitors per month. ViaProprio.ca will extend Micasa.ca’s services to individuals. “

#180 Ronaldo on 08.30.12 at 6:47 pm

Find out if you can afford to live in Vancouver. Take the test.

http://www.welcomebc.ca/wbc/immigration/choose/economy/cost.page

#181 unbalanced on 08.30.12 at 6:48 pm

To # 146 Daystar. You should have your own site. You are one hell of a good knowledgeable writer and a pleasure to read. Just saying.

#182 Herb on 08.30.12 at 6:49 pm

#166 Westermoron,

and I suppose you still think that the Shrub was the burning bush of old!

#183 Herb on 08.30.12 at 7:07 pm

Westernmoron,

just ran across this on a Facebook page and dedicate it to you and your fellow wingnuts:

President Obama should go on TV and ask people not to eat yellow snow if only for the joy of hearing Fox News explain how good yellow snow really is.

#184 berry on 08.30.12 at 7:11 pm

Why not post links to facts and graphs on house price increase in the USA, it is easy. Furthermore, that is a pretty wild deviation in house prices since early 2006, depending upon which month one picks, if one picked spring 2010 as the comparison house prices are down 2%.

http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245339137830&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true

#185 CrowdedElevatorfartz on 08.30.12 at 7:24 pm

@#173 Smoking Man
take your drunk accountant to a motel and drink until he passes out. Use your cell phone to take “compromising pics’ Then he will defend you for free at CRA audits !
Its a win win! You get to drink all night AND see your accountant naked! Yowser! wish I was there to help.

#186 Westernman on 08.30.12 at 8:09 pm

To all supporters of the Obamanation in the white house:
By all measures things have gotten significantly worse since he took office – no question about it…
Why defend the indefensable? It only makes you liberals look more foolish than you already are – if that’s possible.
Just admit it: appointing this incompetent community organizer was a huge mistake – one that will be corrected in Nov.
One thing is quite clear from Herbie’s and the rest of you Liberal Marxists – your percerption of things is demonstrably detached from reality…

#187 cynically on 08.30.12 at 8:09 pm

To #90 eaglebay – You are just like the scumbag rightwingers (not all Republicans) who lie and tell half stories but not all the facts. First you conveniently forgot to mention that the country was in the crapper after the 8 years of Bushmania which had turned very high employment and Treasury surpluses into the start of today’s predicament: two unfunded wars, a banking industry gone rogue thru little or no oversight, the housing market in the toilet, again no oversight of the bank’s lending practices and Fannie Mae and tax cuts for everyone, but especially the very rich (trickle down theory). No wonder they lost the election in 2008 by a wide margin but when Obama tried to fix things thru large funding in 2010 for work projects on hwys and bridges, he was turned down in the House (MPs) which had been taken over in the 2010 election by the brainless teapartyers. In fact these idiots were willing to let the country go under when in 2011, the top AAA rating was downgraded by S&P-a rating which had been in place for 70 years. Fortunately the non-teapartyers in their party were able to explain the dire consequences of going bankrupt so don’t blame Obama for not getting the country on its feet. The US will come back but it will be a lot sooner in years if he gets in again but to do so he will need control of both the House and Senate, something that may not happen.

#188 Daisy Mae on 08.30.12 at 8:11 pm

More BC Liberal government resignations….

Yikes! They’re all jumping ship!

#189 Nostradamus Le Mad Vlad on 08.30.12 at 8:11 pm


#66 Scott in Gibsons — “They are losing their pensions, . . .” — Good point. Never mind the RE swimming the other way, if people have, or will have their pensions cut back to peanuts, how would they be able to afford an adequate lifestyle?

#120 robert — “. . . that a wealthy man by the year 2012 will be a man with no debt.” — He was absolutely correct. There really is no experience to live a debt-free life, able to turn down various banks’ offers of “You are pre-qualified for a LOC / HELOC for xx thousand dollars if you call today!”, to put the invite straight into the recycling bin. That is the way of getting off the grid!

#145 Seriously? — “Less than one one-thousands of a percent of the population of Canada decide what kind of country you will live in. An even smaller number of people tell the Prime Minister what is going to happen and how to do it.” — Unfortunately, we are living with the effects right now, so you are accurate with your post.
*
2:03 clip “Our prison system is a beast, gobbling resources that should be going to communities. Watch this video to find out why. ” and between 1987 and 2007, spending on prisons was 127%; 2:24:19 doc. Fall of the Republic — Offshore corporate cartel is bankrupting the US by design; Bailout for Mitt Romney First para. says a lot about him; Safety Deposit Boxes Sure, they’re safe; Music Album sales in UK are roughly zip; Morgan Stanley “According to Rick Wiles: “I’m hearing rumors that another major financial house is going to implode. In fact, the name I’ve been given is Morgan Stanley . . . It’s going to be put on the sacrificial alter by the financial elite.”; Siemens Job cuts in Europe.
*
Baiting the Bear It will be interesting; Truth or Lies It is quite easy to figure out who is telling the truth, the other lies; 7:12 clip NATO caught red handed; Confirmed Smart meters aren’t that smart; Fed Book or Facebook? A wet dream of TPTB; Pussy Riot and destabilization of Russia (hah!); Super Drugs for Super Bugs They don’t work anymore; NAM Good meeting, and the second para. is interesting; Recashandcarrycans “Especially after Romney’s fundraising trip to Israel!”, thus breaking the law; Egypt – China back Palestinian statehood; 3:18 clip Neither party represents the people any more; Six New GMO Crops Actually, physical death is more palatable than eating this trash; 2:38 clip US – Israeli colonization in Canada.

#190 Hoof-Hearted on 08.30.12 at 8:17 pm

#177 Suede on 08.30.12 at 6:36 pm

6.) Richmond Attached. Who would buy anything there? Well – not many people any more. MOI is now above 13 with inventory pretty much at record levels. There are over 1500 attached properties for sale in Richmond. This market already started to crash last year so this compares to 8 MOI in August 2011. As for a condo crash – Richmond has to be on the list. What are they going to do with all those condos by the airport that are moving towards completion?

===================================
yeah..I don’t know what is going on in Richmond…

Lots of inventory yet still many projects on the books ready to start.

With tighter lending domestically, I say its offshore passport buying and money laundering.

ALSO: I see the small South Asian builders of low rise condos getting smoked. They tend to spec build, and I see a lot of their units full of “For Sale” signs.

#191 Aaron - Melbourne on 08.30.12 at 8:32 pm

#40 Aussie Roy on 08.29.12 at 11:39 pm
Aussie Headlines

Young couples are being forced to choose between starting a family or buying a house, according to a new report on Australia’s housing affordability crisis.

http://finance.ninemsn.com.au/newsbusiness/8524546/families-chose-between-kids-and-house-report
*****************************

*SIGH*
I have sympathy for the position but that is a terribly weak argument put forward by Australians for Affordable Housing.

Its not a choice between KIDS or HOUSE PURCHASE.
Its a choice between KIDS or LIFESTYLE
Its a choice between RENT or BUY
Its a choice between ONE INCOME or TWO INCOMES – (the good old dual income trap would be worthy of examination if that is the thrust of their argument).

I would be more accepting of the argument if the contention was that the OPPORTUNITY COST of having kids meant houses were unaffordable or if they produced some research to back the social trend to buy a house first/have kids later.

A common thread among my peer group is that they are all having trouble falling pregnant in their mid thirties. Some rent, some have bought. None of them deferred having kids due to house prices. They deferred because they were building careers, travelling and forming commitments later in life. Some have also deferred because they listen to sensible contrarian argument.

The social impacts of unaffordable housing are certainly interesting but I’m relatively immune from the histronics.

DISCLAIMER: Single – 35, renting, debt free. I would at this stage (assuming I find a partner) raise kids in a rental.

#192 futureexpatriate on 08.30.12 at 8:42 pm

#90 I pump spelling to clueless conservatives too.

It’s “worst”, not “worse”, and either is a complete lie.

#193 futureexpatriate on 08.30.12 at 8:48 pm

It took FDR sixteen years to undo a Great Depression. CANADIAN conservaborg are ragging on Obama for not pulling it off in four. With the usual de rigueur trailer park “spelling” or its best faking by zillionaires.

Where’s Trudeau when you need him.

No matter. Happy days ARE here again.

#194 Westernman on 08.30.12 at 8:59 pm

Cynically @ # 186,
Isn’t it funny how Liberals use the ” It wasn’t my fault ” when they mismanage things…
Listen up pal, when you have the presidency everything is your fault.
When things go well you get to take credit – conversely when things go awry you take the blame…
Is this how you are at your job ( assuming you have one )? When you screw up do you blame it on someone else? Resposibility. It’s central to growing up – try it sometime…

#195 dradak1 on 08.30.12 at 9:28 pm

That is exactly what broth us here where we are. Not really fun time is here.

#196 Westernman on 08.30.12 at 10:06 pm

futureexpatriate @ # 192
” Where’s Trudeau when you need him.”
Trudeau was never needed…

#197 The American on 08.30.12 at 10:20 pm

At 78: Darlene, confirmed. Consumer spending is up, up, up right now. This report in just today. And yes, you’ll continue to see more U.S. plates as confidence rebounds.

#198 bill on 08.30.12 at 11:25 pm

western git said : Isn’t it funny how Liberals use the ” It wasn’t my fault ” when they mismanage things…
a human trait that is not exclusively liberal dont you think ? or do you think?
your endless ranting is much the same. ”I am perfect so its all your fault.’

#199 CalgaryRocks on 08.30.12 at 11:29 pm

DELETED

#200 Marshy on 08.31.12 at 12:06 am

Westernman @ 185

“By all measures things have gotten significantly worse since he took office – no question about ”

What about the 8 years prior to Obama under the leadership of George W? Like someone recently stated it was like the voters of America were given 2 exams …. they flunked the first attempt and even when they had all the answers 4 years later, they flunked it again.

And I’ll bet you know a thing or two about flunking exams.

#201 cynically on 08.31.12 at 1:57 am

#s 185&193 Westernman – Let me ask you a question to see if I get an honest answer. If this blog or another like it was alive in the period from 2004-2008 when your friends, the conservatives, were destroying the country with all the shit they were doing in that period, would you have defended them or would you have criticized them? Remember they were the party in power during that time and you said Obama defenders should accept the guilt of whatever is happening during his presidency. I’d really be interested in an honest answer but I doubt you know the meaning of the word. Hope you read this.

#202 Herb on 08.31.12 at 3:10 am

#193 Westernmoron,

what would a neandercon know about responsibility?

#203 -=jwk=- on 08.31.12 at 11:09 am

@62 Langley mom.

Look at you the ‘expert’:

…hate to be blunt, but frankly they probably just wasted 2-4 years of education on something they have no business being in.

A little research on how one obtains their CA/CGA might be in order before you go around proclaiming
those students wasted their time….

#204 futureexpatriate on 08.31.12 at 11:24 am

#195 – Ah but history disagrees. The history conservaBorg haven’t gotten around to rewriting yet, anyway.

Wiki Trudeau

And the same history will show that Harper was needed as much, if not less, than Dubyah needed another poodle.

#205 Westernman on 08.31.12 at 11:39 am

To all my Liberal detractors:
Wow is all I can say… I knew Liberalism was a mental dysfunction but you Canadians have really perfected it.
Now, I will say it once again … when you sit in the Oval Office you own what is going on in the country. It’s yours! You asked for it and you were granted your wish.
Do not blame the previous dumbass, sunspots or ocean currents. The responsibility is yours.
The current worthless sack of shite in the White House has eff’ed it up and he now owns the responsibility for it.
No amount of crybaby liberal whining and excuse making will ever change that.

Nobody needs to be a Liberal to know you are a hater. — Garth

#206 Westernman on 08.31.12 at 11:52 am

Good of you to pile on Garth, but I should take this opportunity to point out that just because someone is on the opposite side of the political fence does not make them ” haters ”
This has become a worn out ploy from the left side of the political spectrum…

#207 futureexpatriate on 08.31.12 at 1:21 pm

#205: Fact 1: It took FDR 16 years to pull the US out of the Great Depression. And HE didn’t have to deal with an House full of petulant ideologues nor a Senate that required 66 votes to get anything done; 51 votes was just fine back then. Nor an enemy who dropped every single thing they were formerly in favor of just because the President saw it their way, and attacked every time he gave them what they wanted. Partisan obstructionism is idiocy, cutting off one’s nose to spite your face. Obama didn’t create the problem, and he can’t fix it by himself. And the height of idiocy is to put the same cretins back in power that really caused the problem. Luckily, people who are clueless about such things are a distinct minority and growing smaller each second.

#208 Westernman on 08.31.12 at 2:25 pm

futureexpatriate @ # 206,
Nobody expects a miracle – but this buffoon is so incompetent that one wonders if he is doing it on purpose…
Stop making excuses for stupidity.
You know, results matter in the real world – not just happy feelings – RESULTS.
I know this is a dirty word to you Liberals…

#209 canus on 08.31.12 at 4:19 pm

Two trends can occur at once. You can have high unemployment across the country and also a hot real estate market locally. It depends who the buyers are. In the USA, the divide between the rich and poor is widening. The rich (and those who didn’t get caught up in the last few bubbles) are buying up properties in distressed areas, which the masses are struggling to pay rent.

#210 futureexpatriate on 09.01.12 at 1:36 am

#208 Neither you nor I have law degrees from Harvard. However, stupid is calling people that do, stupid.

#211 cynically on 09.01.12 at 1:36 am

Westermoron, and I was giving you the benefit of the doubt addressing you as Westernman but I see there’s no use trying to be civil with you. Instead of your one-name calling of Obama as your rebuttal, why don’t you give the specific failed policies so far in his administration like you were given as reasons why the deck was and is stacked against him from the Bush years. It is really a better way to make your point than the name calling. Finis!