David’s a Canadian soldier. “Being in the military I will be among the fortunate to have a government pension to be thankful for,” he says. Just as we are thankful there are such people.
He writes me:
I find myself looking further ahead now that I am 40 and I can’t help but feel more than a little concern followed by a real need to take some control. A lot of missteps, opportunities and costly growing up makes me feel we’re behind in our financial preparations. That said I don’t think RRSPs have a lot of value, very little growth over the past few years makes me wonder what % return we’d need in the next 5-10 years to make up for this near zero growth.
So here we sit with no debts, except a mortgage, a reasonably comfortable combined income of a little over a 100k in our little family of just two. We have a modest 60k in RRSP and 70K in home equity which will as of next month go into another house.
If you could give me some quick tips to set me off in the right direction, like how to educate myself on investing, a pointer on where I might be better served to put my money other that RRSP and for a third, well yours to dispense.
The premise of your letter, David, is seizing control of your financial future after years of drift. Good for you. But be careful. You’re still making mistakes, and past the age of 40 the consequences of bad actions grow exponentially.
First, understand the tools in your hands. RRSPs are not products, vehicles or things. This is merely a way society lets you invest money and defer paying tax on the earnings. In fact, to encourage you to invest, you can even deduct new contributions from your current taxable income. So an RRSP is merely a shelter, a vehicle within which you can put things. That can be stocks, mutual funds, bonds, ETFs or something extremely dumb like a GIC.
So your retirement savings haven’t grown? Odds are [email protected] talked you into a bunch of bank mutual funds, where mediocre returns have been largely cancelled out by embedded management fees. You’ve now learned this doesn’t work. Lesson one. You can seize control by ensuring your RRSP is self-directed, and then filled with the kind of assets I wrote about in the last post.
Lesson two: RRSPs are not the best vehicle for guys like you with government pensions, so you should probably stop contributing. Pumping up your TFSAs is a much better idea, and between you and your wife there’s $40,000 in contribution room. Get it into those ETFs (one for the TSX, one for the S&P, one for emerging markets, one for REITs, etc.) for forget about it for a few years. Go protect us.
How are you doing in general? Sounds like your net worth is $130,000. So give praise for the pension, because at age 40 you’re way behind the curve. And, I fear, about to fall further behind.
Are you actually considering pumping half your net worth into another house? If you’re moving up, this is a dubious thing since real estate is poised for years of trouble and decline. If it’s a rental house you’re buying, this is a disaster. Almost everywhere in Canada it’s impossible to buy a house, finance it, maintain it, pay the taxes on it and be in positive cash flow with current rent. So the only possible way of making this pay off is with capital gains, half of which are fully taxable.
The odds of this happening are as pathetic as this blog. Real estate will be a deflating asset, not a growing one, and could remain this way until your fiftieth birthday. You’ll also have a tenant to deal with who has an astonishing number of rights, while you get all the obligations. The bottom line, this is about the worst possible strategy for trying to catch up on growth your RRSP didn’t deliver.
Lesson three: don’t do it. Be liquid and diversified. Don’t pour your only available financial wealth into another house and end up with 100% in one asset class. Just imagine how defeated you’ll feel in five years when property prices have flatlined and mortgage rates have swelled. Borrowing against your modest home equity, at a price you cannot control, to pump it into more of the same is a recipe for heartache.
Which begets lesson four: there is no five-minute remedy. No three key points to grasp for investing. No book with all the answers. You can’t approach this like learning a new weapons system, because everything changes every two hours amid swirling factors not within your command. Either you study this hard for a number of months and take a course, or you find someone to trust. Both are hard tasks.
What you must avoid is acting decisively and bravely on bad information. RRSPs have a role in tax-free investing, income-splitting and evening out taxes over a number of years. TFSAs have a role in sheltering wealth and forming the first bulwark in retirement funding with taxless growth. Real estate has a role in giving you shelter, emotional refuge and forcing you to save. Because your RRSPs ended up in bad assets does not mean you should try to turn a house into an investment plan.
Stand down from this plan, David. And thank you for your service.
153 comments ↓
Early post!
As mentioned, one of the Amazons snuck a bunker photo out.
This is the control room. All those monitors are for keeping an eye on Preferred Shares.
It think one of them may be for email or something.
http://tinyurl.com/ck7gqeq
The blog is most interesting when it stays relevant to real estate. Median DOM data for Toronto’s East York region. Note that this data is somewhat consistent with the “Leaside Hypothesis”: less expensive areas (although quite nice, imho) such as O’Conner-Parkview, Oakridge, show a bigger DOM increase than expensive areas such as South Riverdale, Beaches. The bigger difference is probably that the more liquid regions: Danforth Village and Greenwood-Coxwell kept reasonably short DOM medians. Lots of similar houses, similar age, etc. Or something, anyways.
I’d love it if someone could tell me how to force a fixed-width font. In absence, you might be able to force your browser to render into a fixed-width font such as Courier.
…………….. … Apr. May.. June July Aug
Birchcliffe-Cliff all 8.50 11.00 14.50 17.50 15.00
Blake-Jones…… all 7.50 6.00 7.00 60.00 21.00
Broadview North.. all 5.00 7.00 5.50 7.00 29.00
Crescent Town…. all 3.50 12.00 na 22.00 24.50
Danforth Village. all 6.50 7.00 6.50 7.00 7.50
East End-Danforth all 6.50 7.00 7.00 7.00 8.00
East York…….. all 7.00 7.00 6.50 14.00 na
Greenwood-Coxwell all 8.00 11.00 7.50 11.00 7.00
North Riverdale.. all 7.00 7.00 7.50 21.00 na
O’Connor Parkview all 28.00 8.00 13.00 8.00 23.00
Oakridge……… all 5.00 20.00 16.50 43.00 20.00
Playter-Estates.. all 8.00 9.00 8.00 15.00 na
South Riverdale.. all 7.00 7.00 8.00 6.00 6.00
The Beaches…… all 6.00 7.00 8.00 9.00 18.00
Woodbine Corridor all 7.00 7.50 14.00 7.00 na
Woodbine-Lumsden. all 8.00 7.00 8.50 25.00 15.00
all………….. Row 47.00 12.00 8.00 na na
all………….. Det 7.00 7.50 9.00 13.00 15.50
all………….. Semi 7.00 7.00 7.00 7.00 11.00
all………….. all 7.00 7.00 8.00 10.00 13.00
Garth, I do not think that this blog is pathetic.
I think that most of us, and, most of the financial advisors that we go to are pathetic (and that is being kind).
When can we anticipate access to the tickets for your Toronto seminar?
David : Garth is being modest. Get his book, it’s a great read and explains a lot of concepts discussed here :
http://shop.xurbia.ca/products/money-road
I aslo recommend another great book, Millionnaire Teacher, by Vancouver native Andrew Hallam. It’a about how he became financially secure on a middle class salary by investing in bonds and stocks ETFs. He now only own 3 ETFs, and keeps buying them every month.
http://www.amazon.ca/Millionaire-Teacher-Wealth-Should-Learned/dp/0470830069/ref=sr_1_1?ie=UTF8&qid=1347328308&sr=8-1
Err, I happen to have all my assests in GIC’s at the moment… I thought this was safe!
I’m overly cautious after getting burned investing during the 90’s market crash.
Can anyone tell me why GIC’s are such stinkers?
What should your net worth be in your forties?
Count backwards from 60. — Garth
#5 Cowpie,
1- GIC’s pay you interest income, which is taxable at your marginal tax rate. Marginal tax rate = the % of money you pay to the federales and provinciales.
2- So if you’re thinking you’re getting a 2.25% return your actual take home after paying the tax man = (your tax rate) x (GIC Return, 2.25% or whatever)
3- Next, go to http://www.bankofcanada.ca and see if that number you get is higher than the inflation number. If it is lower, or equal to the annual CPI in Canada you’re money is eroding due to inflation.
4- GIC’s are usually only redeemable once a year, until your 1,3,5 year expiry happens. If you need the cash for an emergency, you will have to pay a penalty. Shitty deal, but the bank needs to make some dough for the risk it took with you.
1+2+3+4 = Why GIC’s suck.
After the stinker of a jobs report here in the U.S. it is a fore long conclusion that America is in recession. The U.S. stock market is on the brink of a multiple month decline of 40% to 50%!
Professor Hussman agrees!
http://www.hussmanfunds.com/wmc/wmc120910.htm
Dividend Man
Atlanta GA
#6 Cowpie – why buy a GIC from a bank that pays zip to the suckers when you can buy a preferred share from the same institution that pays a much higher rate with a tax advantage?
It’s not so much that GICs are stinkers as that they are not wealth builders, especially when rates are low, especially if your asset growth needs to exceed the rate of inflation. It depends on your goals in the context of your risk tolerance and the consequences of potential losses. They’re safe in that you won’t lose your principal (esp. keeping within the insured limit) but they’re not as safe if you need the money to grow faster than inflation. As in anything else in life, “it depends.” They certainly play a role in a balanced investment or retirement planning scheme.
#3 TimV on 09.10.12 at 9:52 pm
“…………….I’d love it if someone could tell me how to force a fixed-width font. In absence, you might be able to force your browser to render into a fixed-width font such as Courier.”
Here’s one idea
This is a
test to see
if HTML table
tags are permitted
Mark Hanson has the same idea as me:
In the US as housing sales declined, the mortgage rates were lowered. This lowering had the effect of cushioning the decline in sales. In Canada we lowered our interest rates to match the US but now when Canadian sales decline, we cannot lower our mortgage rates. Ergo no cushion.
http://www.greaterfool.ca/2012/01/29/fail/
How can we as bloggers with garths help take down these criminals
http://www.thestar.com/business/article/1254617–competition-hearing-shines-light-on-40-billion-gta-real-estate-industry#comments
“You’re way behind the curve”? According to whom. A pension is worth north of a million bucks. Pension check. House check. CPP check OAS check. Spend the rest and enjoy life
Get OUT of the stock markets…
The soon to be jailbird Wall Street types have super computers that manipulate close to 90% of the trading .
The ponzi scheme will implode once they make the final pillage.
Did you recycle this from last year? — Garth
Oops, no dice…..probably have to add some parameter to the tag to fix column width. Haven’t written HTML since the days when there were only 30,000 websites.
Anyway, enough of that. Great post!
The one thing that never stops amazing me is that people still write to Garth to stat that they’re spending the better part of their money on a house as though they’re hoping he will say “No, for you this is a good idea!”
RRSP’s in bank managed funds have performed pretty miserably over the past ten years. Question: can I melt down an RRSP a few decades prior to retirement while at the same time having no employment income other than dividend income and realize a minimal tax bill on the RRSP cash out? The goal is to get the RRSP cash into the TFSA pile with little or no tax.
#8 Suede on 09.10.12 at 10:21 pm
………..Shitty deal, but the bank needs to make some dough for the risk it took with you.
I like how you said risk with a straight face!
Once you realize that bank prefereds return 3x the after tax of GICs, you’ll never look back. I figure that they carry only marginally more risk as well – if the bank was to default on a preferred dividend, I sure as hell wouldn’t want to be holding their certificate either.
You think times are hard now? CHRYSLER is threatening to move its operations out of Canada!
#14 Realtors are scum
File a complaint to the Competition Bureau and let them know how the boards schemes are disenfranchising buyers.
And demand foreclosure and bank REO data. Without that information nobody will ever know when the market has bottomed.
Here are the ETF people should buy and leave them intact for some number of yrs.
REM ( US NA REIT) 10.5% for past 3 yrs
XTR ( CAN Bal) 5.8% for at least 2 yrs
CPD ( CAN preferreds ) 4.8%
XIU ( Can equity ) 2.8 % — guranteed lots of potential
XEG ( CAN energy ) 2.5 % –guaranteed lots of potential
XRE ( CAn Reits) 4.6 %
XLU ( US utilities) 3.8%
CLF ( bonds short term) 4.2%
ZWB ( covered call bank ) 8%
CHY ( US High yield) 7%
PFF ( Us preferred banks) 5.9 %
XLB ( bond long term) 3.6 %
FIE.A ( Can banks ) 7.2 %
CEW.A ( Can bank & power EQ WT.) 6.6%
Garth do you think this is a good mix or I need to go and change these. Am I being too greedy and taking too much risk. I bought it in 2011 Feb when market was at the peak, it went down in 2011 big time but recovered slowly since then. Now I am probably 5 to 6 % up.
I thank you too David, your sacrifice is great for this country, may you be rewarded for it in the future.
As Garth mentioned learn about finance, learn how to read and interpret financial statements, spend twenty minutes a day on it, use the internet, read every finance book , paper and magazine in the library. Become self educated in this area, make it a game.
You will be rewarded, but you’ll make a few mistakes along the way, everyone does.
Learning can be a lot of fun if you give it a try. Take calculated risks, but become a rational, value investor.
Not to mention this method will pay off, but you have to perceiver.
#14 Realtors are scum
Nice to see realtors and their boards exposed (to the general public) for who and what they really are.
Parasites that suck on your equity.
Grow up. — Garth
Dividend Yield Investor – #9 – amen to that. I hate buying in at a top. When the forward P/E on the S&P is approaching 15x it is too expensive for me. Doesn’t mean that I am liquidating my existing portfolio, but I am still in the “accumulating” phase of my retirement planning and so I am sitting on a significant amount of cash that I need to invest. Should have pulled the trigger in early June but for some reason the European mess had me gun shy.
I have learned that the market will always be there and I just need to be patient. Since taking over the active investment decisions on my portfolio (and scrapping the mutual funds), I am doing very well.
I have made lots of mistakes in the past, hence the moniker, due mainly to blindly listening to others, but now I am one heck of a cynic and do alot of research before investing in anything.
Thanks to posts by Ronaldo and others, there has been a heap of great blog sites referenced here. I own zero ETF’s but am actively learning about them and plan to put some of my cash to work in that area.
realtors are smart, you, on the other hand are dumb, at least that’s the way the realtors see it.
Garth – In your opinion, is QE3 coming this week?
Sales of all types of residential properties in August were down 17.4% from July and down 10.7% from a year ago.
And down goes Edmonton.
Why you need a realtor – they believe the average Canadian can’t handle life. You really do need to use a realtor, just ask one.
Finally!!!! A realistic story. Average Canadian…
Good to have solid men such as David. The country is better off for them.
Did you know the most used gear in French Tanks is reverse?
http://theceliachusband.blogspot.fr/
Rim Laid Off – #22 I question some of the yields that these ETF’s are paying. For example, you mention FIE.A ( Can banks ) as yielding 7.2 %. At current prices there is not a single Canadian bank that is yielding that amount. That can only mean that if the ETF at the current price is saying that the yield is 7.2% it is most certainly returning capital to you as part of that “yield”. If that is the case, then I find this so terribly misleading. Return of capital is not true “yield” in my book. That makes me very afraid of ETF’s. The dividend yield on the investment in a single stock (although poo poohed by Garth) will very clearly be pure income yield. There is nothing misleading and certainly no return of capital being used to artificially “boost” stated yield.
I am only now looking more closely at ETF’s (thanks to Garth’s encouragement) so I may be off base but common sense is sending warning flares up. If the yield is not true income yield, then ETF’s are a load of bull squat in my books and it is buyer beware. It may be the cynic in me, but what a way to scam the uninformed. Time to go hit the “books”.
Garth, next time you see Mark Carney, kindly tell him that disciple knows who he really is… and that if he doesn’t raise rates I may have to expose him.
Between yesterday’s and this evening’s, OldPol… you’re really ‘tugging’ [HeartStrings]. BravoZulu.
David. If the Geezer who writes this didn’t make it perfectly clear… Just remember one word… [tactically speaking]…
Maneuver.
http://youtu.be/t0JFeprolso
PS… it really does get better. Same rules. Don’t do anything stupid.
If you are part of the younger generation, you got screwed by the baby boomers.
The older generation, who control the government and are home-owners, created this housing bubble. Search for and read:
Housing, the most manipulated market in the world newworldparty
(Canada’s manipulation is in bottom half)
This housing bubble is just another way that massive wealth is being taken from the young to transferred to the old. HUGE government debts is the other way. Search for and read:
Stealing from children newworldparty
Politicians cater more so to the old because a higher percentage of the old vote and complain. Speak out and complain to your politician. The silent are usually screwed.
16 Hoof-Hearted on 09.10.12 at 10:52 pm
Get OUT of the stock markets…
The soon to be jailbird Wall Street types have super computers that manipulate close to 90% of the trading .
The ponzi scheme will implode once they make the final pillage.
Did you recycle this from last year? — Garth
============================
No actually just recently.
Found it in the gas tank of a Harley in a bunker filled with pickled squirrel meat.
War is good business
Invest your poor
.
.
.
.
No metal is better at money than gold.
Can you at least admit that?
Maybe “pre” will work:
…………….. … Apr. May.. June July Aug
Birchcliffe-Cliff all 8.50 11.00 14.50 17.50 15.00
Blake-Jones…… all 7.50 6.00 7.00 60.00 21.00
Broadview North.. all 5.00 7.00 5.50 7.00 29.00
Crescent Town…. all 3.50 12.00 na 22.00 24.50
Danforth Village. all 6.50 7.00 6.50 7.00 7.50
East End-Danforth all 6.50 7.00 7.00 7.00 8.00
East York…….. all 7.00 7.00 6.50 14.00 na
Greenwood-Coxwell all 8.00 11.00 7.50 11.00 7.00
North Riverdale.. all 7.00 7.00 7.50 21.00 na
O’Connor Parkview all 28.00 8.00 13.00 8.00 23.00
Oakridge……… all 5.00 20.00 16.50 43.00 20.00
Playter-Estates.. all 8.00 9.00 8.00 15.00 na
South Riverdale.. all 7.00 7.00 8.00 6.00 6.00
The Beaches…… all 6.00 7.00 8.00 9.00 18.00
Woodbine Corridor all 7.00 7.50 14.00 7.00 na
Woodbine-Lumsden. all 8.00 7.00 8.50 25.00 15.00
all………….. Row 47.00 12.00 8.00 na na
all………….. Det 7.00 7.50 9.00 13.00 15.50
all………….. Semi 7.00 7.00 7.00 7.00 11.00
all………….. all 7.00 7.00 8.00 10.00 13.00
–
Good post, but again Ben (previous post) seems to be in better shape.
*
Not enough gold? Understandable why China and Russia are stockpiling it; Losing My Religion Average worker being paid less while food and other costs skyrocket; Apple vs. Braun What’s 60 years between friends? The US Fed More powerful than previously thought? German serfdom Price for saving the Euro; Draghi’s Plans Germans and Greeks are rebelling, Draghi’s blind? Italy and Spain playing tiddlywinks. Add in France, Portugal, the UK and anyone else and a civil war erupts; Eastern Europe You vill obey; Borrowing More to get through the month; Black Wednesday UK fell off a cliff; QE Damned if you do; UK Civil service vs. private employees; Dragon’s Den Couple hit paydirt in UK.
Fiscal Cliff approacheth; China’s US debt holdings are not a problem by themselves, but if / when China brings in a gold-backed currency. that’s a different animal; Microsoft Boosting dividends? FedEx and UPS win over China; Ford Adding 1,200 jobs in Detroit; Student Debt Trap will also affect housing; American mfg. is more about China; Corporations With more robots, it’s adios workers; UAE’s abandoned luxury cars The real reason; Healthy ROI in dollars.
*
Obomba Endorsed by Communist Party (Soros), and 5:29 clip Oromneyba and dubya — birds of a feather; Consistency at the same pub; Bubbly, broke Barcelona Let’s all go for a holiday! Fat Cats of another kind; Predicting the future from a century ago; Protein Drinks Are they worth it? The Big Yin Like Keith Richards, he will die onstage; 10:31 clip Iran – Iraq — same lies, diff. countries; Berlusconi’s Underwater Lair; Aliyun Threatening Apple and Google?
Just saw that in the Calgary Herald, while eating my .65 centimes Croissant with my 1.00 Euro Espresso……
http://blogs.calgaryherald.com/2012/09/10/calgary-housing-prices-and-sales-on-the-decline-in-september/
32 OlderbutWiser:
If the yield is not true income yield, then ETF’s are a load of bull squat in my books and it is buyer beware.
————————————–
How do you determine if it’s true income yield?
People should read this. Especially Junius.
It outlines how Immigrants apply for entry into New Brunswick and then quickly move to Toronto. Statistically, they are counted as New Brunswick residents. However, father immediately leaves and goes back to China to work where the Canadian tax people can’t get at him.
What’s surprising is the stories are told by immigrants themselves who dont give a F&^%. A line in the story says the only thing they regret is not buying sooner in Markham.
http://thechronicleherald.ca/opinion/134406-wong-chinese-immigrants-story-shows-the-price-of-admission-has-risen
A govt pension is only worth north of a million bucks if there is enough public money to fund it in 25 years. Sadly I don’t think so. Govts are already cutting back on their public pension provision and this is just ahead of a massive curve.
I am a university prof in England and here the govt changed our pension scheme several years back from final salary to defined contribution. The black hole a few years out scared them. The rest of the public service jobs are now falling not this new reality.
Ths so much collateral damage from government interferances I hardly know where to start some days….but don’t worry about me.
‘No need to save in an RRSP…….I have a government pension’……excuse me while I puke’.
Lets be specific here on another point…we have no conscription in Canada…soldiering is a choice…..can’t stand the heat stay out of the kitchen. Same for teachers, firemen, cops….etc…..you’ve chosen to be what you are….the rest of us don’t owe you an above averge living and a luxe pension for the choice you made.
The Liberal culture of the past thirty years has taught the civil servants that they are above everyone else….and they deserved to be coddled and bathed in largesse.
This culture of servility into a generation by the Liberal propaganda has created a level of complacency that shows up every day as red ink on the bottom line of this country’s balance sheet.
Don’t save…..the government will take care of you.
What kind of life is that? The entire country is dreamy eyed about government pensions becaue they’ve seen that the fat greasy civil service live like kings while the average huy suffers to pay the bills.
Gee…wouldn’t it be nice not to save a dime knowing that your swiney pension has backstopped your mindless lazy butt from getting out of bed and being something other than a leach.
The ZIRP and NIRP are causing pension funds to collapse into insolvency…life insurance companies are going broke and on life support….who’s going to pay for that…seniors raped…kids starving….millions lining up at the food banks…families so deep in debt that they will never have anything but slavery.
The Candian bureacracy and their unionized civil servants are worse than the Taliban…..more cruel in the fact that they are torturing an entire population slowly into despair…while all the while themselves enjoying drunken nights of dancing boys and a debauched life of obscene luxury.
#20 Cassandra on 09.10.12 at 11:10 pm
GM Scarborough Van Plant…..Closed 1985
Chrysler Van Plant (Windsor).Closed 1999
Ford Truck Plant (Oakville)…..Closed 1999
GM Battery Plant (Oshawa)….Closed 1998
GM Truck Plant (Oshawa)…….Closed 2009
Ford St Thomas Assembly (St Thomas)..Closed 2011
GM Transmission Plant (Windsor)….Closed 2012
GM Car Plant (Oshawa)……….Closed 2013
To be closed in the next 5 years
BAP Chrysler Brampton
WAP Chrysler Windsor
Ford Oakville
GM St Catharines
As you can see this has been going on for some time. Also the Navistar & Sterling truck plants have been also closed. Yes the union leadership is going to fight for every last job…….lol….R.I.P.
agree Garth, mutual funds suck. I actually did a short post on that very subject on my slightly less famous than your blog, blog
Why Mutual funds Suck
Garth, you’re not getting soft on us, are you? As of becoming a daily reader of your blog since April 2008 when I sold my house for almost 75% more than what I paid for it. Then I rented, coming here to make myself feel good for being liquid. With the money I made, it allowed me to be a life model for art classes. However, renting sucks, really it does. So I bought a house last May. I’m not timing the market but my plan is to live here for 13 years. Do you think I made a bad decision? Of course not! Who can predict that far into the future? I just don’t want this blog to become Dear Abby/Oprah-ish place. If you want to help people, come to some of my art classes.
http://www.youtube.com/watch?v=rALKvHo7tWA
@ nick nr 5 regarding millionaire teacher, he actually lives in Singapore and has a website. I don’t really like this investing style, being a non resident means withhold taxes.
I actually changed my address back to Canada to avoid the 25% withholding taxes on my dividends. Will have to file a tax return this year but as I earn no real income it won’t make much of a difference
“Almost everywhere in Canada it’s impossible to buy a house, finance it, maintain it, pay the taxes on it and be in positive cash flow with current rent. So the only possible way of making this pay off is with capital gains, half of which are fully taxable”.
Last week RE price index creators RP Data told us,
“Places were buying is cheaper than renting”.
This week we get the truth.
anyone excited by the RP Data “Buy versus rent” report last week, which featured metropolitan suburbs such as Rushcutters Bay in Sydney, Carlton in Melbourne and the Perth CBD as often now cheaper for buying than renting, should think again.
“It’s a worthy exercise but I think there are traps, given the generalised nature of the modelling,” Australian Property Monitors’ Andrew Wilson said. The report says paying a mortgage is cheaper than paying the rent on a unit in Rushcutters Bay (that is, the median home value and the median asking weekly rent for the suburb).
But the comparison does not take into account, among other things, stamp duty, council and water rates and, where they occur, strata fees, which are paid by the home buyer.
The report makes this clear in its disclaimer but the interest that followed its release suggests many may not have realised this.
http://afr.com/p/technology/costs_add_up_for_city_home_owners_jwwq0Nd5qQpoFExIyryrsJ
#46 falsedata… nice work. Yes, it’s all an act, union bosses are paid twice, essentially they are double agents. And that’s a fact.
@ TimV #3: I agree with you. This blog should stick to real estate.
Garth also gives great advice and maxing out TFSAs is a great idea. RRSPs are a tax deferral scheme and in the future, I expect that taxes will be higher not lower so postponing the pain to the future does not make sense.
Regarding the comments about David serving his country, I respectfully disagree. Every Canadian soldier needs to be tried as a war criminal. WE attacked THEM, not visa versa. What are the Pashtun tribes going to do to Canada? Plant IEDs along the 401? Come on.
http://www.youtube.com/watch?v=9QewOE5O1BQ&feature=related
#35 blah, blah, blah, blame not the older-old say somebody who is 75 and up but put the blame for the entire world’s problems on 18 years of people, who are now ages 48-66 by the way, and say that they are responsible for all your personal financial problems.
Never mind that many of them bought houses say in 1990 and watched the value plummet for 10 years or bought one in the 80s and paid 15 and 20 percent mortgage rates (similar to a credit card rate) making a house payment more expensive in real terms than today – NO IT’S ALL THEIR FAULT for being ages 48-66.
I suggest you grow up and stop blaming people for things they had no control over. There was never a single time in history that these 18 years of people formed the majority of voters, never was and there never will be.
Not sure when this hatred of older people started, it’s basically an asset envy, younger people feel hard done by because they don’t have what others accumulate through a lifetime of working RIGHT NOW. #35 would you trade places with Warren Buffet or Rupert Murdoch, you know hop in their body, you can have all their money okay – I don’t think so.
Garth,
I read your piece about the man who has re-found his health and has 8k cash and 1k silver
I wanted to just mention, in line with your advice, that if he opens TFSA with scotia itrade, he will have a list of 50 ETFs he can trade commission-free
there is enough in that list to get him started and going
#45 truth hammer on 09.11.12 at 2:24 am
Ths so much collateral damage from government interferances I hardly know where to start some days….but don’t worry about me.
‘No need to save in an RRSP…….I have a government pension’……excuse me while I puke’.
Lets be specific here on another point…we have no conscription in Canada…soldiering is a choice…..can’t stand the heat stay out of the kitchen. Same for teachers, firemen, cops….etc…..you’ve chosen to be what you are….the rest of us don’t owe you an above averge living and a luxe pension for the choice you made.
…………………………………………………….
You sir are truly lost in space. Liberal this, liberal that and all the while it is your conservatives that raided the pantry BIG time. It is the conservatives that created this monstrous bubble and leveraged the entire country to an extent that would make any sane person blush.
#25 OlderbutWiser on 09.10.12 at 11:32 pm
Take a look at the wonderful work that Multpl.com has done with all of their very long term charts. The Professor Shiller’s PE averaged over 10years and inflation adjusted shows the U.S. market at a very pricey 22.95 times earnings.
Those holding U.S. stocks at this level for the next 10yrs will experience an estimated average annual return between -1% to 2% return. This of course is never a smooth ride but a bucking bronco that you hold onto for 10yrs if you have the stomach for it.
Long term returns are not “baked into the cake” by the nature of simply holding stocks. That is MPT bull crap but a function of the price that is initially paid for those future stream of profits/dividends.
A similar tool for RE is price to rents. Anytime you pay over 20 and especially 25 times plus equivalent in rents you are way over paying for properties. I have a niece who will be marrying a great kid from GTA both have PHD’s and make good money. Because of good old Uncle she knew to rent and until prices get close to 10 times rents or less… they will continue to rent.
Home is where you hang your hat!
This is what it is to be a value player; if applied consistently it will make you wealthy.
http://www.multpl.com/shiller-pe/
Dividend Man
Atlanta GA
But Garth, doesn’t this fellow’s net worth also include his pension?
Supposing he joined the forces at 20 years old, he would have a 20 year stuffed pension that is likley valued at around 3-4 hundred thousand…and growing.
Am I wrong? Are pensions not included in “net worth” calculations?
A little porn for you gold bugs out there. Peter Munk’s modest abode in Toronto is up for sale.
http://themashcanada.blogspot.com/2012/09/24-old-forest-hill-road-forest-hill.html
Mutual Funds may suck, but if you’re an employee with a DC plan (a large chunk of Canadians outside of the public sector) that is matched by your employer, it is usually all that is available.
For those people, try to find index funds, or the least active lowest fee. Use morning star to find out which of the available funds is best regarded. And watch out for bond index funds if you’re nearing retirement, those could take a big hit in the next few years if interest rates ever rise.
Deetes wrote:
“What should your net worth be in your forties?
Count backwards from 60. — Garth”
——-
The question is only “good” by being as realistic as possible. Imagine if you keep your eye on the “number” and “liquidity” and “diversification” in a too-limited context.
Nowadays the idea of leaving the system up to the system and then “just doing your part” ( as per the three pillars above), your risk shoots off the chart.
Why? How?
Because of treating net worth as safe inside the system if liqudity and diversity are obeyed. Of course they must be obeyed…an excellent change in attitude.
If LIBOR manipulation, derivatives deleveraging impossibility, structural unemployment, permanent quantitative easing, impossibilities in bond markets, inaccessibility for housing to whole demographic sectors, socialized banking debt, forced and senseless austerity measures to pay off bad bankers bets, global commodities volatility, Chinese unemployment ( grave for that society), irrelevant US elections, a food stamp cover-up of US labor force dropouts, precious metals manipulation and hoarding, currency-trade wars and the oil fight drama are put in a “finger-crossing” file….what the hell is that?
It might be fun to be a “middle class technocrat”, but it could end up as relevant as playing Monopoly with the kids.
If we’re going to talk liquidity and diversification….why not talk about it?
Where could you get the idea that you can “solidify your future net worth” without looking at the big picture?
It all sounds like giving away power to some “unseen authority”. It sounds risky…in spite of attention to staying out of debt, favoring diversity and liquidity.
Im looking for a used Camry so I called an ad that said, “One-owner car. Excellent condition. Etc.” So I called and said, “… so you bought this car new?”. The guy (who turned out to be a realtor) said,”Well, actually I bought it from a guy who bought it new.”
Good article on HFT (High Frequency Trading)
http://www.nytimes.com/2012/09/09/business/high-frequency-trading-of-stocks-is-two-critics-target.html?_r=2nl=todaysheadlines&emc=edit_th_20120909&
The blog is fantastic.
The obscure acronyms, yah, not so much… [email protected]?!? [email protected]
– JP
detalumis: blah, blah, blah, blame not the older-old say somebody who is 75 and up but put the blame for the entire world’s problems on 18 years of people, who are now ages 48-66 by the way, and say that they are responsible for all your personal financial problems.
incomprehensible
Why do things take so long to happen in Canada?
We all know housing prices will go down, but when?
Likely has already started to happen, but with our slick government and Banking system, why is Canada standing alone.
Are we truly a safe port in the global economic quagmire?
Or is the fact that it is different here actually starting to take some credit.
But is the pop of a balloon that much greater if you blew more air into it?
What is different here, is the fact that the Government, (which ultimately is the tax payers) has basically co-signed the vast majority of all mortgages in Canada. Who wouldn’t want to invest in Canadian mortgages, with the largest crown corporation personally guaranteeing against any possible loss of equity?? What other country in the entire world has actually set up their mortgages this way.
On top of that Canadian Bank’s have no reserve requirements when funding mortgages. So they can just keep approving, and approving, funding and funding with nothing to stop them from giving the smallest rural cities, to the largest metropolitan cities unlimited access to keep building and building.
Now accelerate this model but dropping mortgage rates to record lows, and give every home owner access to new-found wealth by increasing their existing equity exponentially…
And then the final nail in our coffin is adopt some of our US lending strategies, and give self employed individuals any amount they want to borrow if they have good credit, but make sure that government co-signer is on the hook.
And there you have it, this is what the Canadian Real Estate market has been based on for the last 15 years.. This is why crackshacks were selling for a $1 million plus.
This is why homes have granite and stainless steel, and why Canadians are addicted to possessions which is usually obtained through debt.
But you still have to wonder why it is taking so long to correct?
With the recent changes to mortgage lending policies, foreign Bank’s leaving the Canadian Mortgage Market, (ING, HSBC and Macquarie) just to name a few and CMHC rapidly approaching the ceiling of their insurance account……
This changes the the entire landscape of the Canadian Real Estate Market forging ahead.
Once Canadians rationalize the fact that housing prices do not always go up, and now that their Equity ATM’s are flashing “Insufficient Funds” because even CMHC has realized the trouble the Canadian housing market is in, and reduced the spending limit of all existing homeowners to 80%, and the Bank’s have just cut the line’s of credit limits to 65%…..
It is time to start paying for that hot tub from 5 years ago that sits empty, for that $30,000 man cave, where you spent $7000 on a 50″ plasma that Best Buy is now selling for $799.00..
My friends still laugh when I give them the same, the sky is falling speech I was preaching back in 2008, and they remind me that even broken clock is right 2 times a day.
But one thing for certain, when the Bank’s and CMHC are making clear preparations for what’s about to happen, and foreign money is leaving the Canadian mortgage market, there is very little time left.
It is different here, when you are the last ones standing at the party, don’t forget to shut off the lights when you leave.
Markets seek equilibrium, always, but very seldom maintain it for any length of time as the momentum of the pendulum causes it passes through too far to the other side. In real estate a “balanced market” is a misnomer that isn’t a market at all but merely a fleeting transition period of indiscernible duration from that of a buyer’s market to that of a seller’s and back again.
Markets are always shifting. That “almost everywhere in in Canada it’s impossible to buy a house, finance it, maintain it, pay the taxes on it and be in positive cash flow with current rent” is sure indication that will, in due time, change. Question is; will it be a predominance of falling property values or rising rental rates that bring about the shift to and through equilibrium? Certainly it is likely to be a combination of the two but which one more than the other?
Thoughts?
I for one do not think the cost of life’s necessities, like putting food in your belly or a roof over your head, is headed any direction but up. Simple supply and demand. One hundred years ago there were about a billion people on the planet, today there are seven billion. Extrapolate that.
Re: Auto plants in Ontario.
Auto plants in the past had a ring of suppliers within 100 miles of the plant supplying most of the components. Think Flint, Michigan, Ford Oakville, GM St. Catharines/ Oshawa. There was an industrial inertia that kept those plants anchored in place for decades.
Today auto workers are just essentially putting off shore parts onto vehicles. Robotics have reduced the need for skilled assembly workers. All those radios, transmissions and tail light lenses etc. come in from third world countries in shipping containers. (View Container Mountain behind the Ford Oakville plant!)
An automotive plant can re-locate anywhere near a rail siding and it can use local unskilled labor to put the parts on. Ford Fusions and Lincolns are made in Mexico and are very competitive products in their class.
Volkswagen, a competitive new rising star worldwide, builds the majority of its products in developing countries. Companies like Volkswagen and Hyundai are the new competition for both domestic and Japanese auto producers.
RE dependent on surrounding automotive plants could be at risk as south western Ontario has found out.
If Chrysler exits Canada, can Canadian taxpayers ever expect to get Chrysler’s bailout money back? Lotsa luck with that one.
Hey,
Isn’t that pic an American soldier?????
Best post ever Garth!!
My portfolo since 2001..17,000 oz of SILVER at $5 Canadian..40 oz of GOLD at $250 per oz. Blows any portfolio on this blog. Had GARTH preached GOLD/SILVER instead of RRSP or stupid stocks/bonds, you would have had a HAPPY RICH GROUP HERE..
Buy? Curious? wrote:
“However, renting sucks, really it does.”
Everything has pluses and minuses, so to say this is actually a character problem. It has nothing whatever to do with reality.
You sucked up a 75% casino premium on selling your house. If anything “sucked” it was that…and then threw it back into the casino on a hugely overvalued assest. An asset with an axe hanging over it. Knowingly.
It sounds as if the problem isn’t renting or owning. And your lack of empathy for your fellows reinforces this perception.
#45 Truth Hammerer,
I love it when you get all hot and bothered and give your incomparable invective free rein. Love it almost as much as the sweat of your brow that has permitted me to spend decades “coddled and bathed in largesse” as an Army officer, and continues to provide the “swiney pension” that allows my “mindless lazy butt” to stay in bed when it feels like it. Living “a debauched life of obscene luxury” is tiring. By the way, never had any use for dancing boys, so don‘t mind if I stick to girls.
Thank you from the bottom of my bleeding commie socialist heart. Keep up the good work, because I propose to draw that pension as long as possible – wouldn’t want you to have to work only for yourself and become selfish in the process.
Investx #42 – the only way to determine the true yield on the ETF is to read the prospectus.
I am going to have a look at this later on tonight to see for myself. The prospectus will allow you to see what the fund invests in and how it pays out its “earnings”. If the Canadian bank ETF is paying out more than say 5% +- as “yield” then you can be certain that the ETF is doing something else other than just holding shares of Canadian banks (such as doing puts, calls etc) or it is returning capital.
Learn from my mistakes, ALWAYS know exactly what you are investing in before you spend your money. Read the prospectus. You can find it on the issuers website and it is freely available. Just takes time.
Jane24 – #44, I think you are going to be proven correct over time. As most private companies change their pension plans from DBP to DCP and as employees wake up to the fact that now THEY have 100% of the investment risk, there will be a great deal of pressure put on the government to change their pension plans as well.
It is not about how much you contribute – everyone who has a pension plan (private or public employer) makes contributions into the plan. The issue is the return that they enjoy. A defined benefit plan (DBP) will pay you out regardless of NIRP or ZIRP or volatility in the markets. Who cares if the market falls 50% just as you retire – with a DBP the risk is ALL on the employer.
With a Defined Contribution plan (DCP), you had better hope that you earn a good return because if you don’t, then YOU run the entire risk of no money to retire on.
BIG, BIG difference.
Don’t worry too much.
This guy, like all government employees, is wealthy. He WILL be taken care of, you can bet on that. Big pension, fat benefit package, good salary. Fawning bloggers, too.
Dividend Yield Investor – #56, thanks for that info. A Forward PE ratio of close to 23x is way too expensive for me. I generally have purchased blue chip dividend paying stocks (mostly large US multinationals but also Can banks and REITs) when I am happy with the current yield on cost as well as current and forward PE’s. As a result of my investing strategy, my current yield on cost for my portfolio is close to 7%. My plan is to hopefully have enough invested that I never need to touch the capital and can rely solely on the yield to fund my retirement. That way I can take volatility in the market price out of the equation. It is also why I am concerned when I can see that an ETF is returning capital and calling it “yield”. I don’t want my capital back!
I also plan to ensure that no single stock exceeds 2% of my portfolio so that if a dividend is suspended I will not suffer a huge drop in income.
To be frank, the husband and I do not have the stomach for an investment strategy where we have to worry about the price of stocks. There is way too much volatility. We prefer to live “frugally” and save as much as possible to make this happen. I can really relate to MrMoneyMustache heheheh!
#45 truth hammer on 09.11.12 at 2:24 am
Re Unions:
In History, they had a use, to avoid exploitation and share in the wealth generation etc. etc. They were also organized by socialists and used as a means to control and disrupt society , as within their ranks they also have communist idealogues.
Union “penetration” seemed to at best hover around 30% of the workforce. Or, why hasn’t more ..even all….of the work force been unionized? That is because society couldn’t afford it, and thus left an elite group getting top dollar and benefits. That was in the private sector and of course the public sector followed suit as well.
However, the private sector economy has decided that unions are not crucial , not affordable, etc. and we see their ranks diminishing.
However, the Public Sector unions are quite entrenched and have high and somewhat delusional expectations of what they are worth and also the delusion of indispensablility. They want same , or more, $$$ from a citizen base that has less income to pay such luxuries as their public sector wages.
Something has got to give.
Question is; will it be a predominance of falling property values or rising rental rates that bring about the shift to and through equilibrium? Certainly it is likely to be a combination of the two but which one more than the other?
“I for one do not think the cost of life’s necessities, like putting food in your belly or a roof over your head, is headed any direction but up. Simple supply and demand. One hundred years ago there were about a billion people on the planet, today there are seven billion. Extrapolate that”.
Thoughts?
I’ll play, I can’t think of a bubbled house market where once the delusional buying stops prices didn’t fall.
USA, Japan, Spain, Australia etc etc.
This rent rise theory of yours is based on which market, what real life experience?. Or is it just your wishful thinking that It’s different here?
“I for one do not think the cost of life’s necessities, like putting food in your belly or a roof over your head, is headed any direction but up. Simple supply and demand”.
You might be right on food but it seems to me that buying shelter has only got cheaper and cheaper where bubbles have burst, eg USA.
Maybe you think food prices push up house prices.? Why would they be linked as you suggest?. If they are linked, how do you explain US shelter and food prices moving in opposite directions?
Ever considered the link between demand and debt?.
Rob the Dividend Trader #47 – great site!! Thanks for that. Just read your post on why mutual funds suck. You are right on the money. That is how I started out investing (many years ago) after reading some books by Gordon Pape. Still had those investments up until the end of August. Now I have sold them all. I had changed my investing strategy several years ago but had just not gotten around to selling the mutual funds. What a mistake – returns on the MF’s were by far the worst over time. See, I may be getting older but I’m still getting wiser lol!
Johnny, Johnny, Johnny, did I hit a hipster nerve? Renting is ok if you’ve got the lifestyle of desert tumble weed, ie. students, single mums, contractors, hipsters who breast feed their kids until they’re 8, but there no stability with those types. They go where the wind takes them. Look at your friend, oops, there I go again with my lack of empathy, I meant to say, look at your friends. Look at those who rent and those that have bought, notice the difference in those two groups? My neighbour is putting in new stones in his walkway. I offered to help. Why? Because he’s taking care of his place and if it increases the value of his house, it raises the value of all the houses in the neighbourhood. Now on the other hand, if my neighbour who was renting asked me to help him move his sofa because he was moving up to Barrie because the cost of living in Toronto was too much, I’d walk into my house, come out with a folding chair, my internet radio tuned in to some station that plays Arcade Fire 24/7, some beers and laugh my tight butt off. And I have a great sounding laugh. You can hear it from blocks away.
http://www.youtube.com/watch?v=h-RtayJQubY&feature=related
Garth’s definitely made me a believer again. He’s found his mojo. Oh sure, he’s still wrong on Alberta price declines, and VERY, very early on interest rate hikes. I guess it’s better to be early than late, but Carney has been crying wolf far too long enough on consumer debt. If they truly wanted to curb the gluttony, something would have been done by now.
David, THANK YOU for wearing the Uniform and doing your duty – Bravo Zulu.
Read what Mr. Turner said carefully – for another reason.
40-60 years of age is going to flash by.
Your life goes at the speed of your age.
I wish you nothing but the best – and in this case – you are talking to a very cogent, caring an bright gent – when you are talking with Mr. Turner. His BUZZ is helping people.
#58
I have never seen a more beautifully decorated house.
Wow!
#71 John
That’s an excellent reply to the tired old adage “renting sucks”. Now, of course renting can suck… or not. It depends on many things.
From the time I left my parent’s home at 19, until the age of 34, I rented. From then until I was 58, I owned. Now I rent again. I’ve had a lot of experience, both ways.
It depends largely on what you want to do in your home and that depends largely upon your interests and what life stage you have reached.
I’m an extremely handy guy with many tools and skills. I can do a lot for myself. For example, I singlehandedly replaced my own roof in the last few years I owned a home. It’s not that I am drawn that kind of work. I suppose I just wanted to prove to myself I could do it. As it turns out, yes, I could. I saved a lot of money too. But it cost me a ton of work and time, not to mention physical risk. So… I’ve been there… and I’ve done that.
Now I’m too old for that crap. I don’t spend my weekends cleaning gutters, scraping paint, installing things purchased at Home Depot. I simply rent. My tools are all in storage. I’ll probably sell most of them. The landlord fixes things. Last month the hot water went out in my building. I called the manager and went downtown for the day. By nightfall the hot water was back and there’s been no problem since.
As an owner over the years, I’ve had several hot water tanks fail. Guess who took a full day out of his life to fix them each time? Multiply that by the dozens of other infrastructure failures you will certainly encounter as homeowner.
The key to successful renting is to avoid false economy. Pay the kind of rent you must to get a quality place with competent management. It is far cheaper than owning. At least it is here in Vancouver. That is, unless you got in to the Vancouver housing market 15 or more years ago. If that’s the case, take Garth’s advice and harvest and invest your gains now. Better hurry on that. Then go find a good place to rent. Look very hard for the right situation. It will be worth it.
#47 Rob the Dividend Trader on 09.11.12 at 3:05 am
the link doesn’t work.
David,
As an ex-serviceman I can offer one bit of really good advice.
TAKT FULL ADVANTAGE of the trades training offered by the forces before you get out.
You will be too young to retire and “go fishing”.
I live in a BIG military retirement area (Comox Valley) so have seen a great many servicemen “retire”.
Most of them NEED to work.
By that I do not mean for want, But rather to not stagnate so young. (Mid 40’s to young 50’s)
I do not know what your interests maybe but what ever they may be, the forces will retrain you before retirement.
One trade I would recomend is refridgeration tech.
It is a growth industry with not a heavy package to learn,good anywhere.
Just my two cents worth from a “been there done that”.
Al
#63 JPinTO on 09.11.12 at 9:17 am wrote:
The blog is fantastic.
The obscure acronyms, yah, not so much…
Hey, working them out is part of the fun! But if you can’t handle that much fun you can look up the answers in the GarthFAQ.
#45truth hammer on 09.11.12 at 2:24 am
And who are you goin g to run too when you or yours is atacked in the street? shot by a terrorist? house is on fire? child drugged? or any nuimber of wonderfull things that can happen to you?
Wouldn’t be police? fire brigade? army? or any number of “Government” jobs that YOU count on for help when you need it, BUT, would not do for yourself now would it??
I wonder why it is that these stupid loud mouths always shout out these stupidities at any chance they get.
Is the brain turned off at the words “Government pension”?
Oh, before you try to spout off some more stupidity, NO I do not get one.
#3 TimV
For fixed width you can try to put text in <pre>your text</pre> element. I am trying with a couple of lines below.
Broadview North.. all 5.00 7.00 5.50 7.00 29.00
Crescent Town…. all 3.50 12.00 na 22.00 24.50
3202 128 W Cordova. unobstructed north shore/mountain view (32nd floor). 2 bed 2 bath 916 sq 1 parking.
Paid $633k+GST brand new… about $675k
paid land transfer tax $11.5k
million dollar view? why not ask a million!
Nov 2009 it goes on market for $988k.
Jun 2010 $888k
Aug 2010 $788k
April 2011 $736k
Jul 2011 $738k
Jan 2012 $718k
Jan 2012 $699k
Mar 2012 $670k
sells for $611,800 in August.
Took almost 3 years to sell.
guy had to pay $14k commission
Total input $675k+$11.5k+14k+legals($1k) = $701k.
$91k loss.
if you include opportunity cost (even at a modest 3%) on the money, then we’re talking roughly $160k loss
Hi Garth,
As you might remember, I mentioned that houses on my road in Gatineau aren’t selling. I bought a row house for 129k in 2005 and last year a similar one sold for 188k. After sitting at 179k for a few months, a house just like mine dropped the price to 169k and another house further down is newly listed also at that price.
I have 104k left to pay now, this 4 years after getting rid of the car and paying off essentially all debt except the mortgage, so if I could sell at 169k, it’d be a nice 65k tax free gain minus costs, but it looks like things could get more complicated and drop more than I thought!
Still kinda surprised that Ottawans would rather ditch 2-3x the money into cardboard boxes twice as far from downtown when they’re in way too much debt as it is.
Want to take any bets as to how low it can go?
Digging into the Mid-Eastern immigrant citizenship scams is a good start…..
http://news.nationalpost.com/2012/09/10/the-hunt-for-false-citizens-cbsa-crackdown-comes-after-years-of-investigation/
But what about the rest who have come here under false pretenses from the Orient ( specifically the PRC) and simply dump their elderly, kids and extended families off for us to educate, provide health care for and service them with super expensive geriatric facilities ?
The practice is so common that we often read that ‘young disastisfied professionals’ who had successfully imigrated to Canada and brought families of up to 20 individuals with them to be dependant on the tax payer are leaving in droves for better pauing jobs in Hong Kong or China almost immediatly after getting their status.
I have worked and lived in the Asian community in Hong Kong , China and of course ‘Aca Nada’ ( the original name for Canada meaning ‘Here is nothing’ on the spanish maritime charts) and know that nobody sends any tax money back to Canada while working overseas……there is no requirement to do so…….Canadians are just stuck with the expense of another unproductive sub set of ‘takers’.
And for those of you who can’t figure their way past the definitions of Conservative and Liberal……here’s mine….any a-hole in government, bureaucracy or the civil service who is leaching in the public trough is a liberal……If you think that I think Harper is a conservative then you’re mired in media dogma……tax spenders and leaches are the enemy…no matter what flag they hide behind.
Bwahahahahahah….money stress is so high in Vancouver that people have stopped having sex
http://www.vancouversun.com/health/sexual-health/Metro+Vancouver+parents+aren+having+poll+suggests/7216753/story.html
I hear the sphincters tightening as nary a sale is processed and the job market has completly tanked.
Drive down any street and see that the collateral damage from the ZIRP is producing unintended consequences….like driving people into poverty as opposed to what the bonehead BOC governor thought would/should happen….whooooops. Business are closing at a phenomenal rate in Vancouver.
For a better broader understanding read about the unintended consequence of the ZIRP here.
http://www.mauldineconomics.com/images/uploads/pdf/mwo090112.pdf
Sure …flood the land with cheap money……debt is good……Bwahahahahahahahahaha what fools!
Tidbits for the easily brainwashed:
Japan house prices have been progressively Going Up in the the last 14 years (Since 1998). Measured in reserve currency (USD). And that in a country where population is declining.
http://www.google.ca/imgres?q=japan+housing+prices+30+year&num=10&hl=en&biw=1280&bih=633&tbm=isch&tbnid=PxfBSR7_CmbrxM:&imgrefurl=http://piggington.com/money_supply_exploding_inflation&docid=VwCsScdfq-WW8M&imgurl=http://www.marketoracle.co.uk/images/2008/japan-house-prices–nov08.gif&w=744&h=444&ei=pnlPULbhM6HoiwKrlIGADg&zoom=1&iact=hc&vpx=103&vpy=158&dur=3082&hovh=173&hovw=291&tx=189&ty=99&sig=109307639811150218681&page=1&tbnh=105&tbnw=176&start=0&ndsp=17&ved=1t:429,r:0,s:0,i:73
http://www.google.ca/imgres?q=yen+vs+usd+30+year&num=10&hl=en&biw=1280&bih=633&tbm=isch&tbnid=MbFmGjjnlNv6lM:&imgrefurl=http://en.wikipedia.org/wiki/File:JPY-USD_v2.svg&docid=H_RBfIXKllpMGM&imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/5/56/JPY-USD_v2.svg/700px-JPY-USD_v2.svg.png&w=700&h=400&ei=aXlPUOauDcnOigKzz4G4Ag&zoom=1&iact=hc&vpx=116&vpy=310&dur=1144&hovh=170&hovw=297&tx=186&ty=104&sig=109307639811150218681&page=1&tbnh=119&tbnw=209&start=0&ndsp=15&ved=1t:429,r:5,s:0,i:89
Truth hammer #92 – you said – I have worked and lived in the Asian community in Hong Kong , China and of course ‘Aca Nada’ ( the original name for Canada meaning ‘Here is nothing’ on the spanish maritime charts) and know that nobody sends any tax money back to Canada while working overseas……there is no requirement to do so…….Canadians are just stuck with the expense of another unproductive sub set of ‘takers’.
*******************************************
It is not true that there is no requirement to send tax money back to Canada. Canada taxes individuals based on residency. If you have a permanent home available to you in Canada, immediate family in Canada, bank accounts in Canada, vehicles, spend time in Canada etc then you are most certainly resident in Canada for tax purposes. That means that you are subject to tax in Canada on all of your income regardless of where it is earned. If you are also resident in Hong Kong or China (and a person CAN be resident in two places for tax purposes) then the Tax Treaties between Canada and those countries will provide the tie breaker rules on who gets to tax the individual.
Sounds like those individuals may not be telling you the whole truth or else they are evading tax. CRA will likely have them in their sights.
In any event, the vitriol seems to be a little misplaced. Did you have a Snickers lately?
#86 Roial1
Your advice sucks. But the machine has condioned you to think just on way. Get a job sell your time. Sucks
David. Go around to all the big biz in your area make appointments with the prez in those companies.
Give him a sad bs story about the army. Say you wana start a business are there any suppliers or vendors that you are not happy with, let him know that you will do a btter job. Hire some slaves to do the work. Sit back and enjoy the loot. Its thgat fking easy people
What is wrong with all of you
Truth hammer #92 – you said – I have worked and lived in the Asian community in Hong Kong , China and of course ‘Aca Nada’ ( the original name for Canada meaning ‘Here is nothing’ on the spanish maritime charts) and know that nobody sends any tax money back to Canada while working overseas……there is no requirement to do so…….Canadians are just stuck with the expense of another unproductive sub set of ‘takers’.
*******************************************
It is not true that there is no requirement to send tax money back to Canada. Canada taxes individuals based on residency. If you have a permanent home available to you in Canada, spouse and children living in Canada, bank accounts in Canada, vehicles, spend time in Canada etc then you are most certainly resident in Canada for tax purposes. That means that you are subject to tax in Canada on all of your income regardless of where it is earned. If you are also resident in Hong Kong or China (and a person CAN be resident in two places for tax purposes) then the Tax Treaties between Canada and those countries will provide the tie breaker rules on who gets to tax the individual.
Sounds like those individuals may not be telling you the whole truth or else they are evading tax. CRA will likely have them in their sights if it is the latter. Not a situation you want to be in.
In any event, the vitriol seems to be a little misplaced. Have you had a Snickers lately?
“Foreign buyers are an increasingly potent force in residential real estate in the Bay Area, as well as nationally. Foreign buyers plowed $82.5 billion into U.S. homes for the 12 months ended in March, up 24 percent from $66.4 billion the year before, according to the National Association of Realtors. The sales – which represented 8.9 percent of all home purchases – were evenly split between recent immigrants and nonresident foreigners, the Realtors group said
Developers and single-family home buyers are returning to Bonita Springs and to many parts of Southwest Florida. About 60 percent of John R. Wood Realtors’ home buyers are buying homes with cash. ‘Our No. 1 foreign buyer is Canada,’ said CEO Phil Wood. ‘Canadians did relatively well during the recession. They’re in much better shape to buy homes than the typical American
Canadian buyers now account for about 85 percent of Horton’s business, up from two or three transactions per year a decade ago.
‘Everybody and their mother has a place down here’: Matt Horton Realty One Group
Despite that country’s current advantages, the Canadian government is concerned about rising debt, some of which is due to its citizens borrowing on their home equity to invest in U.S. real estate, said Dale Walters, CEO of KeatsConnelly, the largest cross-border wealth management firm in North America.”
“‘There are a million things that could go wrong, but none seem to be highly likely,’ he said. ‘And regardless, for the wealthy, they’re pretty much immune to these things.’”
If this is the case, what are the consequences on the American market when the Canadian market goes bust? Any thoughts?
http://thehousingbubbleblog.com/?p=7352#comments
#92 “But what about the rest who have come here under false pretenses from the Orient ( specifically the PRC) and simply dump their elderly, kids and extended families off for us to educate, provide health care for and service them with super expensive geriatric facilities ?”
You are bang on about this practice. I have a wide social circle of Chinese people in Vancouver and Toronto (my father having been born in Hong Kong doesn’t hurt either). This practice is routine, and widely acknowledged amongst the Chinese community. Canadian born chinese people detest it as much as other domestic groups.
The most interesting development of late is hearing Hong Kong chinese complain about mainlanders. Numerous chinese immigrants from Hong Kong have remarked to me that they find mainlanders greedy, selfish, and prone to abuse the immigration system. Of course, many immigrants from Hong Kong did the same thing in their day.
As for your comments on liberalism, you are right that Harper is a liberal. The term ‘liberal’ has a well entrenched meaning, however, that cannot be reduced to what you suggest. I would recommend reading some works in classical liberalism (what is akin to modern libertarianism), then moving to some of the core texts in modern liberalism (rawls, keynes, etc).
Indeed, the conservative party is liberal in many respects, including economics.
David Thank you for your service to this country. There have been recent changes to Canadian Veterans pensions, mainly in the disability pensions. However I would consult a service officer at a veterans’ organization to make sure there are not any nasty surprises in your future. I hope not. It seems Canada is trigger happy to send men and women into harms way but reluctant to pay the overall costs when they come home. Lest we forget.
At least TH understands that Harper is as big a spendthrift as any we’ve seen.
What TH doesn’t seem to understand is that quite a few of us in the public sector don’t have DB pensions.
I’m unionized public sector at a major Canadian university and we’ve had our mandatory contributions more than doubled at the same time as we’ve been de-COLA’d. Our acutaries are still telling us to contribute more and cut future benefits.
I’m not whining too much about it. It’s just the demographic reality that everybody has to face throughout the entire developed world. Same story all over: Japan, Europe, USA–everybody.
However, I do wish current benefit recipients would share some of the pain. Instead, like our country’s enormous debts, everything is still being put off til tomorrow.
#72 Herb.
I guess you don’t like the fact that the military is the biggest welfare program in the land to be pointed out, do you?
Hong Kong has no agreements, and all income earned outside of its jurisdiction coming there is exempt from taxation into one of their banks; the problem is how to legally repatriot the funds.
http://www.theprovince.com/life/Real+Estate+burst+bubble+that+wasn+there/7208209/story.html#Comments
I don’t know why this articles comments (at least 4, all against The Province paper or the Summerville) were all removed as of this morning!
At # 65
People have been saying that house prices will go down for several years, but this has not proved to be the case.
After July, the fall in sales in GTA led me to believe that finally perhaps prices may have some pressure. I went to see a house listed at $269K and put in a bid 10% lower.
It sold today at $330K.
This how prices “go down” in Toronto. I wish it were otherwise, but it isn’t.
At #70 – Stew,
On the gold that works out to an annual compounded return of approx 19.25%. In cricket, that wouldn’t be six runs, rather you’ve simply hit the ball out of the stadium :-)
Should you be cashing that gold out now though?
Cheers,
H
Roial1 @ # 88,
Typical Canadian response. Help! I can’t possibly defend myself – I have to rely on Government Gunslingers to come and help me!
You Canadians are positively, sickeningly helpless aren’t you?
#84 Mister Obvious
It’s a case of the right tool for the job. In some cases, the right tool is not available, and you have to improvise.
It is as easy to have a crappy renting experience, as it is to have a crappy ownership experience. It’s just that owners suck it up, either because they spent hundreds of thousands on a money sucking house, or they have gained so much appreciation equity on it. Plenty of owners live in disaster zones, that would be condemned if inspected, permanent construction zones, sewer filled basements, even living in a tent in the backyard because the house is unlivable. To mention nothing of living paycheck to paycheck in constant fear of the bank, like the renter subhumans. But hey, they’re not throwing their money away on rent, right?
The key, of course, is to do your homework. Know what you want, what you need, what is acceptable, and how much money you’re willing to spend on it.
I’ve had a great renting experience so far, and crappy ownership. It turned out ownership expenses and time investments were much more than I (poorly) estimated, and instead of living a bitter hate-filled life building equity and living the supposed Canadian dream, I ditched the place. But my rental is great. I wanted to rent from a professional landlord. Someone who treats this as a business, and makes their living on it. I wanted to avoid amateurs and accidental landlords who would sooner or later make my life a living hell, and speculators who were just biding their time to sell the place at first opportunity. I absolutely guarantee you when I walked out of a place, I knew more about the landlord and their place than they knew about me. Except for one place, which I ended up renting. These guys are pros. I don’t have to do anything, and everything is taken care of promptly. And it’s way cheaper than owning was.
Just look at all the owners who bought without a house inspection (or a very poor one), who bought in bidding wars. These are the people who are going to be having many regrets in the future, even if they won’t tell you about it, even if they won’t admit it to themselves.
#99 Jim ….As much as it pains the liberal bleeding hearts and politically correct dupes who benefit from the immigration business…….what you confirm is entirely correct and true…..The Chinese community has Canada figured out to a ‘T’…..they know that whenever a point is made about immigration abuses all they have to do is scream ‘rascisim’ and the rest of the befuddled guilty liberals will run for high ground and begin bleating like sheep.
It doesn’t matter to the politically correct dipwad liberals that the abuses may actually be taking place…..and that many of the people who report the abuses are in fact Chinese Canadian taxpayers who have tied their tax wagon to THIS country and want to live here and respect the law of the land.
I know just as many of every ethnic group who are REAL Canadians who are disgusted by the abuses within and coming from their own communities we see every day but are badgered and screamed at for reporting.
A lot of the time the loudest voices against the reporting of abuse comes from the government sponsored community advocacy groups who rake in billions for ‘settlement’ of newly landed immigrants. It is their best interest to keep the reporting of scams on the down low so as not to upset the gravy bowl.
Don’t think that the directors of the largest of these advocacy groups don’t have multi million dollar salaries and in one glaring case of the largest entity here in Vancouver the administration has become a dynasty of one family nepotism.
As you mentioned a cross community issue I will do you one in return…recently there was a horrific accident in Singapore that killed a cab driver and a pedestrian…the driver of the car, a Ferrari, was a recent arrival from China, the son of a powerful communist politicain. ( sounds like Canada eh?) The spokesman for the Singapore Government referrred to the influx of corrupt Chinese Mainlanders as a ‘swarm of locusts’. So is it rascist for the people of Singapore to call another nations Chinese ethnics ‘locusts’ while the politically correct Canadians will not even allow the real facts around the influx of HAM to be printed or spoken?
I see it, you see it, we all see it…and many of us know of a new neighbour from China who has dropped his family off to be taken care of and has dissappeared back to work in China never to be seen again. There was a book called ‘Mayday Mayday’ written by a radio talk show host in Ottawa that outed the fraud and the expense to Canada…but nothing is being done about this not so secret scam.
Now, since the closure of the Iranain emabassy the Iranian community advocates have been up in arms about certain Iranians showing up with enormous sums of money to seek citizenship in Canada. They say that these are members of the regime importing proceeds of corruption into Canada.
Wasn’t this same activity under the fleeing members of the Shah’s regime who came to Canada with the corrupt prodceeds of that corrupt regime? The advocates from the Iranian community are very concerned that they can not get their OWN corrupt family members into Canada and without a steady stream of immigration then the funding for the current Iranian immigrant advocay groups will dry up….thats what the real issue behind the Iranian protest is.
And to the guy who says that Canada taxes on residency…..thats fine but who’s keeping track in China? The answer is no one.
#52 Rob now in Nova Scotia:
@ TimV #3: I agree with you. This blog should stick to real estate.”
———————–
And yet you stray off real estate to politics and bash our soldiers.
Garth…hopefully you don’t blow this off…
Jim Rogers and Chris Martenson are both astute financial experts…
“In a riveting interview on CNBC, legendary investor Jim Rogers warned Americans to prepare for “Financial Armageddon,” saying he fully expects the economy to implode after the U.S. election.
Rogers, who for years has been an outspoken critic of the Feds policies of “Quantitative Easing,” says the world is “drowning in too much debt.” He put the blame squarely on U.S. and European governments for abusing their “license to print money.” In the U.S. alone, the national debt has surged to nearly $16 trillion, that’s more than $50,000 for every American man, woman and child.”……………..
I can’t seem to grab the link but it’s at
moneymorning.com
Truth Hammer
Keep the Truth and the Hammer coming
You are ‘bang on”
#45 truth hammer on 09.11.12 at 2:24 am
“The Liberal culture of the past thirty years has taught…”
We have had federal conservative governments for going on 17 of the last 30 years. How someone ignores a truth like that to form a basis for such anti Liberal bias repeatedly not to mention the literal hate TH emulates for civil servants, the choices are limited to either getting paid to produce propaganda or its more psychological, disordered. The answers aren’t pretty and the choices of how to deal with it are uncomfortable.
Should we start with politely discounting whats false for whatever motive with simple truths? Over the last near 17 years of Conservative rule over 30 years, Mulroney racked up our federal deficit by $300 billion over 10 years. Harper’s contribution is currently at $125 billion into his 7th year. Of our total federal debt:
http://www.debtclock.ca/
… Mulroney & Harper governments have combined to create roughly $425 billion of the $590.75 billion we owe federally today but the true current alarm lies with gross public debt at 109% of GDP that has grown by more than 40% since Harper came to the PMO. Its no mystery as to how they did it (undertax, overspend)and why, if understood, is embarrassing to say the least for many who support Harper. Anyone who understands the message behind these numbers and actually cares about the future of Canada knows why we need a change in government as the greatest domestic risk to any sovereign nation outside of civil war in some cases (and increasingly the environment, some could make a strong case that its already #1, including myself) is debt.
Such purposely unrecognized facts by Truthhammer isn’t what disappoints a tenth as much as the cruel behavior behind the misguided comment (one always seems to feed the other, does it not?). I’m not much for censorship but if I had to, forms of cruelty would top the list of what to axe unless I knew it was made an example of in a broader context. Like now.
#105 Hawk
The listing was obviously positioned for multiple offers (ie, priced well below comparables), and you (or your realtor, who has now proven himself worthless) did not recognize this.
#112 Randman on 09.11.12 at 4:43 pm
Truth Hammer
Keep the Truth and the Hammer coming
You are ‘bang on”
……………………………………………………….
You are clearly another conservative propagandist or lost in space with Truth Hammered.
#99 Jim on 09.11.12 at 2:33 pm
As for your comments on liberalism, you are right that Harper is a liberal. The term ‘liberal’ has a well entrenched meaning
…………………………………………………………….
The only meaning that matters is the meaning at the ballot box and in such a case the Conservatives have brought us this massive real estate bubble and huge public and private debt.
This was forwarded to me by a teacher friend of mine. Smoking Man will likely get a kick out of it.
================================
Subject: Messages from OSSTF Presidents and Suggestions for Tomorrow
Message from President Ken Coran – September 11, 2012
My friends, we as education workers have a long history of standing up to protect Ontario’s public education system and our jobs within it.
• In 1973, when the provincial government tried to ban our right to strike, our members walked off the job and held what was then the largest public protest ever at Queen’s Park.
• In 1989, our members filled Copps Coliseum in Hamilton to protest the government’s proposed adverse changes to our pension fund.
• In 1997, 126,000 education workers held a two-week protest against Premier Mike Harris’ attempts to negatively impact our working conditions through Bill 160.
In all three of these events, we were able to effect real, positive change. We stared the government down and protected our schools, our jobs and our rights. Today, we face a new assault.
The passing of Bill 115 is one of the darkest events in the history of workers’ rights in Ontario. What has become very clear is that the McGuinty government wants to dismantle the rights that you, as workers, have in this province, and has solicited the support of the Tim Hudak Conservatives to accomplish this.
Over the past eight months, the Provincial Executive, with the support of your local leaders, continued to discuss with the Minister of Education alternatives that would meet the government’s fiscal targets without stripping your benefits or conceding salary increases for newer education workers. Instead, we were always met with a “take or leave it” response and there was no interest from the Minister to look at our cost-saving solutions.
This new law is not about getting rid of sick days, gratuities or grid increases. It is a direct attack on our right and ability to bargain a deal with our legal employers, our respective local school boards. Instead, our government has decided to take away the democratic power and responsibilities of locally-elected school board trustees and vest them solely into the hands of the Minister of Education. It gives the Minister the power to impose any collective agreement provision that she chooses without any public accountability or ratification by you, the education worker.
OSSTF/FEESO has a history of standing up, standing strong, and standing united against those who would seek to dismantle all that we have accomplished together. Many of you may have been students in the education system the last time a government tried to restrict our rights as workers, and some of you were part of that collective action. Tough actions were taken and difficult individual decisions were made. Your Provincial Executive, your local leadership, and the rest of the over 60,000 professionals that make up OSST F/FEESO call upon you for your support and solidarity in standing up against this unprecedented and undemocratic assault on your rights as education workers.
In Solidarity,
Kenneth Coran
President, OSSTF/FEESO
===============================
Good afternoon everyone.
Thank you to everyone for your patience, flexibility and understanding during these challenging times.
The members of your Provincial Executive and District 16 Office were in the House today for the passing of Bill 115. The Bill passed with 82 MPPs voting in favour and 15 MPPs voting against.
Since this legislation was introduced OSSTF staff at the district and provincial levels have been looking at the impact of the Bill. Now that the legislation has passed we will start dealing with specific impact interpretations as the Board starts implementation. It is premature to speculate at this point regarding how individual parts of our collective agreement may be changed. We will always work to minimize the negative impact of this Bill on members.
We have had some members ask how to respond when students’ question the wearing of black on Wednesday.
Here are a few responses that can be given:
“The ribbon represents a struggle that education workers are having with the provincial government.”
“I am participating in a Political Protest against the loss of my Charter Rights”
“I am participating in a Political Protest against the passage of Bill 115 which removes my democratic rights.”
All members are advised absolutely not to get into any discussions with the students about Bill 115. Make the response about wearing black and then move on.
Bill 115 was passed into law on Monday, September 10. This law now gives the Minister of Education the authority to suspend our right to strike, to impose a collective agreement at their discretion, and impedes our legal right to free collective bargaining.
Members are strongly encouraged to contact their MPP by email, by phone, or to arrange a face-to-face meeting to discuss your feelings about their vote in FAVOUR or AGAINST Bill 115, or their ABSTENTION from voting on Bill 115.
In addition, you can encourage your family, friends and allies to contact their MPP to do the same.
Go to http://www.osstf.on.ca/bill-115-express-your-outrage for the steps that you can take to send your message to your local MPP.
Also see how each MPP voted by going to http://www.osstf.on.ca/list-of-mpp-s-and-how-they-voted-on-bill-115.pdf
Thank you for your continued solidarity
Colleen Ireland
President & Delfina Traxler Chief Negotiator
District 16 Ontario Secondary School Teachers’ Federation
Hi Garth
I want you to know that another dumbass aka Bill Gross from Pimco.
He only manages 1 trilion dollars fund made compeling case for gold.
He joins another comedians and _ _ _ _and_ _ _ _like Soros,Paulson,Sinclair,Celente ect. you know them all.
#92 You puzzle me…
Having myself returned here, unwillingly – after 20 years in the Far East – I have to ask why anyone would want to live in Canada anyway?
This socialist nanny state…with a government hand in my pocket and a nose in my window…?
Far better to have a job, pay far lower taxes, have a positive net worth and higher standard of living THERE.
Just doing some real estate homework today and it suddenly became apparent to me that realtors are cluttering their personal websites with listings that sold over one year ago. Anything to make it look like there is activity and things are selling. Every page has at least two sold properties on them. This is so deceiving.. When will the real estate industry clean itself up and begin giving the public full disclosure rather than trying to put paint an a false picture..
John #71,
“You sucked up a 75% casino premium on selling your house. If anything “sucked” it was that”
John, I also ‘cashed out’ at 100% premium in 2008. I’m not sure how my doing this, would negatively affect society? I’m aware I did not create or earn these benefits, but I also did not, create the ‘casino’, I just recognized it’s existence. I guess I could have held the asset, turned liability through the coming price correction, instead of hot potatoing it, to a greater fool, but have no delusion of faux empathy for my fellow man.
I did not hunt down and force anybody to purchase. Someone is going to ‘lose’ perceived value compared to today’s market price, whom holds the declining asset, is not relevant.
Lets be realistic about things. I like many critical thinkers, have paid the price with years of self education (thank you net) while others continue to spend $ with carefree abandon.
With the volume of ‘impossible to miss’ information available, ignorance is not an excuse, it is a choice. They assume the state will never let anything bad happen to them and that the system will always have their best interest at heart. Only reaching the young before the full blown indoctrination sets in, will change this.
They are unknowing and naive. This is not their fault.
————————————————–
Buy? Curious? # 80,
“I’d walk into my house, come out with a folding chair”
Your emotional comment, completely missed John’s point.
————————————————–
Roial1 # 88 shares this:
“And who are you goin g to run too when you or yours is atacked in the street? shot by a terrorist? house is on fire? child drugged? or any nuimber of wonderfull things that can happen to you?”
As unknowing members and defenders of the ‘system’, compensation, above and beyond what the private sector can support, comes with the deal.
The ‘what if’ ploy, only works on the sleeping masses as I see no need to live in fear.
————————————————–
Daystar # 113,
“actually cares about the future of Canada knows why we need a change in government”
“I’m not much for censorship but if I had to”
Still singing the same old song, we need to ‘vote and censor’, cause that will change everything.
take care
Blacksheep
ronaldo
fragmented banking systems
you may enjoy reading this
origins of banking panics
http://www.nber.org/chapters/c11484.pdf
=
Volume Title: Financial Markets and Financial Crises
Volume Author/Editor: R. Glenn Hubbard, editor
Volume Publisher: University of Chicago Press
Volume ISBN: 0-226-35588-8
Volume URL: http://www.nber.org/books/glen91-1
Conference Date: March 22-24,1990
Publication Date: January 1991
Chapter Title: The Origins of Banking Panics: Models, Facts, and Bank
Regulation
Chapter Author: Charles W. Calomiris, Gary Gorton
#94 TRT on 09.11.12 at 1:52 pm
Tidbits for the easily brainwashed:
Japan house prices have been progressively Going Up in the the last 14 years (Since 1998). Measured in reserve currency (USD). And that in a country where population is declining.
…………………………………………………………….
Japan’s house prices absolutely have not been going up for the past 14 years. I can assure you of this. Ask any Japanese person you bump into. Your own graph shows the trend upwards began 9 years ago and the entire upward trend is not even 10 percent of the crash. On top of this the graph is likely a product of creative accounting as there have not been widespread increases of even the smallest levels across Japan. My neighborhood has recorded a loss in real estate value over the past 5 years. Another point worth making is that houses are depreciating assests here in Japan much like cars. A forty year old house actually drives down the value of the land it sits upon and is a candidate for demolition. I have a sneaking suspicion that you are in fact attempting some ham-fisted brainwashing with questionable sources attempting to do the same. Lets just accept the graph you presented as truth (it likely is not). The massive decline is huge relative to the highly doubtful minuscule increase presented in your graphic over the past 9 years and that in itself is enough for me to suspect that you are indeed a propagandist. From a boots on the ground perspective there is not a rise in real estate prices across Japan happening by any stretch of the imagination. I can not help warning prospective buyers that Japanese real estate is not recovering by any stretch of the imagination and will likely never attain the massive levels achieved in the bubble and is not increasing in value especially outside the truly huge cities of Japan (which are massive with equally massive population densities). The collapse in real estate was apocalyptic in magnitude and no recovery is or has been evident for decades. I have not been brainwashed and I am not interested in brainwashing you the reader. I have been living in Japan for over 10 years (close to 12 now) and I have kept a reasonably close eye on my local market (we have an old house and a piece of land for parking) and our real estate has lost value since we bought it but only by a few hundred dollars but a loss all the same.
BUYER BEWARE. The bubble has topped (even in TO). Now is not the time to buy a house.
–
3:57 clip Herb and truth hammer, although on opposites sides of the fence, may glean a little more of what is coming through stealth; Greece and Germany Very interesting. May be time to unleash The Fourth Reich, and EZone Tip toe through the tulips, and Serfs Millions here and in Europe; Italy banning all transactions over 50 Euros next year; At last! Kannadduuuhhhh’s RE bubble set to pop, BPOE will be struck with a mega-quake and the Chokenagan will be beachfront property worth mega-yillions; Collateral Concentration Risks US$648 tri. derivatives; Obomba’s Job Creation Massive job outsourcing; Gold “Chinese leadership understand what is coming economically, and is doing their best to stay economically stable, when the “great financial unhinging” comes.” wrh.com; Layoffs Interesting to see if China and Russia re-employ these folks; Teachers facing layoffs; Bailout Britain Cutting 10% of police.
*
3:07 clip Monsanto’s failure; US – Israel Could be Obomba’s trying to distance himself, which is why TPTB have already chosen Romney; Dissent against govt. Labeled as terrorist. 8:14 clip Correction: We are all terrorists now; Super Volcano found in or near Hong Kong? Earth to Mars It appears that earth has been damaged enough, so NASA has started on Mars, and Jupiter hit Look at nine o’clock on the image; Japanese Mayor WTF? Bahrain Never heard of it; Alzheimer’s Excessive amounts of junk food could be one cause; UK Shredding workers’ rights.
Munk bought the Port of Tivat for €155 million. His co-investors include two Rothschilds and the Russian billionaire Oleg Deripaska
The unremarkable town of Tivat is situated in a remarkable place: the Bay of Kotor, a UNESCO-protected world heritage site of rugged mountains plunging into pristine turquoise waters, and the deepest natural harbour on the Adriatic coast. The conditions are ideal for docking a big boat. Two serpentine bays conjoin to make up Europe’s southernmost natural fjord. Byron once declared the region the world’s “most beautiful encounter between the land and the sea.”
However, when Munk arrived in 2006, the town was far from beautiful. A one-time Soviet navy base, Tivat has a population of 14,000. There were no Western-style hotels or restaurants, no quaint bakery-cafés. Four enormous concrete piers stretched out several hundred metres from shore. The piers, which Munk bought from the Montenegrin government, are the commercial backbone of his proposition. They are bomb-proof and up to 20 metres deep. Constructed 120 years ago by the Austro-Hungarian military, they were later used to dock Warsaw Pact–era submarines.
Five years and hundreds of millions of euros later (at least €650 million will be spent before it’s done), the port is well positioned as the newest hot spot on the Mediterranean coast.
dilution wasn’t the solution
INDEPTH: ENVIRONMENT
A century of slag
Reporter: Chris Brown, CBC News | December 15, 2003
…”The theory, according to B.C. regulators, was that any pollution from the Teck Comnico smelter would be diluted as it flowed down the river.
http://www.cbc.ca/news/background/environment/centuryofslag.html
…The company said Teck and its predecessors were operating within all regulations in place in Canada at the time.
The company “estimates that the compensable value of any damage will not be material,”
Jim Rogers moneymorning.com interview…
http://moneymorning.com/2008/08/19/jim-rogers/
Dave this is how you do it. Pay close attention.
Make a list of 20 companies in your area that have between 50 to 250 employees.
Contact the Prez of a company. Tell him you are vet, you served in (who gives a shit) make it sound good.
Tell him you are planning on starting a company and you are contacting leaders in the community for a little advice. Tell him I would like to buy launch and pick your brain.
Don’t fax, don’t tell reception, when they ask what you want him for. say exactly this ” I would like to do some business with your company, and I need to speak directly to the prez(make sure you know his name) an other tip, when calling use his first name only, she may think your a pal.
Once you get him to lunch, ask about his company, what they do bla bla bla. ask about his suppliers and vendors.
The goal is to take that business away from the one he’s not happy with. They are never happy. find
the gaps in his operation. make friends try and get him looped.
Tell him you have a buddy who does that and he’s been asking you to partner up with him. I will talk to my pal and we have another meeting.
You have a month to find alliances and suppliers to take out they company he don’t like.
Your in business buddy
Then it’s up to you.
This is much easier than actually getting a stupid tax farm slave job.
Someday, eventually, just as happened to the British and Roman empires the US will falter and be replaced with some other new “world power”. We all know that. But not likely in our lifetimes.
Blacksheep wrote:
“John, I also ‘cashed out’ at 100% premium in 2008. I’m not sure how my doing this, would negatively affect society? I’m aware I did not create or earn these benefits, but I also did not, create the ‘casino’, I just recognized it’s existence. I guess I could have held the asset, turned liability through the coming price correction, instead of hot potatoing it, to a greater fool, but have no delusion of faux empathy for my fellow man.”
Yes, you’re absolutely right…and I would have done the exact same thing. I am only saying “it is what it is”…and we are all in it together. It’s going to be difficult to bring the situation forward without developing some other priorities which don’t set us up for a “win-lose” interaction.
What about value and service? Not out of some fake altruism…but because that’s the joy of life. If the system is about snuffing out joy and replacing it with control and fear…whoa…it might be something I’d want to begin accepting. So as to have real options.
#68Canadian “Hey, Isn’t that pic an American soldier?????”
******************
Does it matter?
#123 Mr Buyer said
“I have been living in Japan for over 10 years (close to 12 now) and I have kept a reasonably close eye on my local market (we have an old house and a piece of land for parking) and our real estate has lost value since we bought it but only by a few hundred dollars but a loss all the same.”
Yes. But the Yen has almost doubled relative to the US dollar in that time.
Also, that is amazing since the population of Japan is declining. Canada’s is booming.
Jason Kenny’s Assistant said it herself today, “Canada already maintains the highest sustained level of immigration in the world..”
550,000 per year added to our major cities. That is the primary cause of runaway RE values. Low interest rates (like japan) and gov policies (CMHC) just exasperate the situation.
The masses are brainwashed. Take away massive population growth (high immigration) and the other factors won’t mean anything if there are not bodies to fuel the ponzi scheme.
Citation:
citation:
http://www.theglobeandmail.com/report-on-business/small-business/starting-out/canada-designs-new-visa-for-immigrant-entrepreneurs/article4537339/
Dave phaze 2
Now that you have your basment account that keeps the power on, basic bills paid. Don’t do a thing. hire people that’s how you build a sellable aset. If your the show, your company has no value with out you.
Hire as many slaves as you can to sell, produce, service.
Just grow it. Hire kids from middle class familys that have no experience in owning a business. Make sure they have degrees, as they are well trained in obedience, honesty and loyalty.
You need to be selfish, every once in a while fire someone just for the hell of it to keep your other slaves in line.
make it a happy envorment so long as the slaves are making you money. but you need to lose your shit at leased once a month.
in 10 years you sell it for millions, the harder you work your slaves the more loot for you.
Your welcome :)
#105 Hawk
You are correct. I’m with you when i say lower house prices benefit many over the long run. Even in my area (Surrey), i see no effect on prices yet. The problem is, even with a slowdown,that over the course of the next 12 months, 550,000 people will be added to the major cities…what will this do to demand?? people need a place to live in..
The problem with posters on this site is some have veiled motives. Others are just clueless and will eat any views comfort them.
If anyone is interested…’CONFIDENCE MEN’ by Ron Suskind is a good read.
Chapters, softcover, $20 — “…the complete story of the financial meltdown in the United States….”
I am reading it now. Exceptional. — Garth
Buy? Curious? wrote:
“Now on the other hand, if my neighbour who was renting asked me to help him move his sofa because he was moving up to Barrie because the cost of living in Toronto was too much, I’d walk into my house, come out with a folding chair, my internet radio tuned in to some station that plays Arcade Fire 24/7, some beers and laugh my tight butt off. And I have a great sounding laugh. You can hear it from blocks away.”
——
This is a “hyper reality”. There are lots of people who chose to “buy” because of accepting your hyper reality. Since most of it is not real, they are often people who may “bring up the neighbourhood” by bringing themselves down. People maxed out or under water aren’t building anything, regardless of appearances.
It seems you’re missing the context. It’s really just about common sense. Lots of people are cool outside of the hyper reality.
You may be living inside a really small box.
Dave
and remember business is war, your a soldier you should know this , its kill or be killed. always shoot first.
Take no prisoners. be a combo of alien and predictor in hiding in lamb skin.
Learn to lie, and believe your lies. Pretend to be everyone’s best buddy while viewing them in your mind as less then.
You aint going to learn this in an MBA class kids.
If any of you pathetic bubble heads wana start up a company.
email [email protected]
my new goal for this year is to make 1 loser, a winner
tired of listing to all the working class dribble and stupidity
As I’ve said over and over…there will be no recovery without jobs…. pretty simple really!
This from Mish
Quick Notes About the Unemployment Rate
US Unemployment Rate -.2 to 8.1%
This month the number of people employed fell by 119,000.
In the last two months, the number of people employed fell by 314,000!
In the last year, the civilian population rose by 3,695,000. Yet the labor force only rose by 971,000.
This month the Civilian Labor Force fell by 368,000.
Last month, those “not” in the labor force increased by 348,000 to 88,340,000, another record high.
This month we set another record high with a whopping 581,000 dropping out of the labor force. If you are not in the labor force, you are not counted as unemployed.
In the last year, those “not” in the labor force rose by 2,723,000
Over the course of the last year, the number of people employed rose by 2,347,000.
Participation Rate fell .02 to 63.5%;
There are 8,031,000 workers who are working part-time but want full-time work, a decrease of 215,00. This one the only bright spot in the report.
Long-Term unemployment (27 weeks and over) was 5.033 million a decline of 152,000 (likely an artifact of the decline in the labor force).
Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.
Over the past several years people have dropped out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low. Some of this was due to major revisions last month on account of the 2010 census finally factored in. However, most of it is simply economic weakness.
Read more at http://globaleconomicanalysis.blogspot.ca/#XIXFmC0flU1bwbOP.99
http://globaleconomicanalysis.blogspot.ca/
#102 Zeeman1,
I would point out “the fact that the military is the biggest welfare program in the land ” to any sailor, soldier or airman. You will find having your lights put out an enlightening experience.
#121 Blacksheep on 09.11.12 at 6:33 pm
If you were a parent and something absusive and obscene came on the radio or television, and young kids were listening or watching, what would you do? Would you censor with the flick of a channel change or would you let it play. If the systems of democracy don’t work for you, what systems of government, if any, will?
I’m all ears.
confidence?
Four Years After Madoff, Audits and Auditors of Broker-Dealers Still Lousy
By Francine • Aug 30th, 2012 • Category: Latest
The Public Company Accounting Oversight Board, the US audit industry regulator, issued its first report on the auditors of broker-dealers
that gave the regulator the authority, under the Dodd-Frank Reform Act, to require registration and, therefore, inspection of the auditors of broker-dealer firms, a majority of which do not audit any other SEC registered companies.
This was the first time most of these firms were scrutinized by anyone but their peers in the accounting industry.
http://www.americanbanker.com/bankthink/bain-capital-partners-and-PwC-a-rich-and-varied-relationship-1052200-1.html
http://pcaobus.org/News/Releases/Pages/08202012_BD_Interim_Inspection_Program.aspx
#141 Herb on 09.11.12 at 8:59 pm
#102 Zeeman1,
I would point out “the fact that the military is the biggest welfare program in the land ” to any sailor, soldier or airman. You will find having your lights put out an enlightening experience.
………………………………………………………………
Whenever you need a military absolutely nothing else will do. Canada is the second largest country on earth along with a near non-existent population with yet another huge source of oil discovered recently in Newfoundland. We have in all likely hood passed peak oil and regardless of what people who have purposely limited their perception are saying there is an epic bottleneck fast approaching that will never again be seen on earth and it is scant decades out. While a military can indeed appear to be a socialistic construct it is at its core a dictatorship that holds power by means of force yet at the same time the overthrowing of that power by its members is more or less assured if basic needs and social norms are not respected (something about heavily armed and well trained individuals raises the level of respect accorded such individuals). Having said all this if you think a land of such true wealth is going to hold on to this wealth that will increase in value exponentially over the coming decades then certainly a military is an extravagance. I myself believe it is much better to be prepared and develop force multiplying technologies and strategies now as when the time comes that we need them it will be well past to late to develop them. We will always need to be strong to maximize our chances of survival. Canada goes without a military in proportion to its great wealth at huge peril that is only going to increase going forward. Even Quebec with its legitimate cultural concerns is blessed to be part of such a rich country. Harper got one thing right when he said we are an energy superpower and we must become a defense technologies superpower as well. We do not have to outright defeat all comers, just mangle them so badly that they can be easily defeated by traditional rivals.
#133 TRT on 09.11.12 at 8:14 pm
Canada took in just over 250,000 people last year and is poised to repeat. 550,000 new people move into Canadian cities every year? From where? Canada’s population is growing by less than 400,000 per year. 200,000 if one goes by our now junk census numbers.
http://en.wikipedia.org/wiki/Population_of_Canada_by_year
The Yen has also devalued by a third against the U.S. dollar over the last decade:
http://www.forecast-chart.com/currency-japanese-yen.html
Don’t mean to offend with correction, just helps to be factual.
#113 Daystar,
you’re a saint, but Truth Hammerer and his ilk have no use for truth because it would get in the way of their propaganda.
I like the kill or be killed business talk espoused by some that in the next breath turn around and dismiss the military. It is clear you believe you are walking the walk when in fact business is a faint approximation of what populations are capable of doing to each other especially from a historical perspective. Hopefully such types will not have to suffer rude awakenings at the tips of swords or the muzzles of a guns. I walked out into a beautiful empty field in Gagetown NB what seems like a hundred years ago and a professional soldier (which I am not and never will be) was describing a weapons system to us and then a tank let fly a single blank round that had the effect of taking and simultaneous x-ray of my soul, blasting my persona out of my body and causing every single muscle in my body to contract at once. At the same time the heavy machine gun on the tank in the seemingly empty field opened up and it felt like fingers poking me. There was no bravado, nothing, just an urge to throw down the rifle I was carrying and the toss off the helmet so I could become as light as possible and run like the wind. A whole new perspective to say the least. I think some of these tough talking business types may turn out to be blow hards much like myself. When you need an army, nothing else will do.
Westernman @107
Typical Westernman response … a sweeping generalization painting all canadians with the same broad brush strokes. Any suggestions on how the “sickeningly helpless” can improve their lot in life?
Sieg Heil!
145 Daystar – Sounds backwards. Your graph showed
Yen v. USD. It now takes less Yen to buy 1 USD, therefore USD has weakened. See caption below the
graph. TRTs explanation seems correct to me.
#90 Van guy – You’ve heard the RE mantra – LOCATION,LOCATION,LOCATION – well 128 W. Cordova is just not the location, at least not yet but maybe in a few year’s time after the present fiasco settles.
#130 – We can be assured of one thing – the world’s next dynasty won’t be Canada. They went down with the British Empire because they hung on too long.
>>Just as we are thankful there are such people.
Why are you ‘thankful’ that there are Canadian soldiers helping the US with its illegal invasion and occupation of Afghanistan? Or with its terrorist bombings in Pakistan? Or are you one of those suckers who believes the CBC when it tells you that all Canadian troops are ‘peace-keepers’?
You seem to be capable of independent thinking about the real estate market: perhaps you could extend that thinking to world affairs before you mentioning this in your blog. The photo you show is a propaganda item. Thanks.
Marshy @ # 148,
What a unique group of people Canadians are…
The mere suggestion of taking personal responsibility in reference to ones own safety brings politically correct indignation if not outright hostility to the concept.
Trudeau’s Marxist-Liberal brainwashing is now complete I would say. Completely dependent on Big Nanny-State Government fo reverything and proud of it.
As Jed Clampett used to say … ” Pitiful, just pitiful “…