Catastrophe

In 2008 you could buy a whole house (albeit, not a nice one) in East Vancouver for $590,000. In February of this year some sad person bought an underground suite in the same house for the same price. That’s right. $590,000 to own a 1,200-square-foot basement.

In recent days another has hit the market, this one 800 feet and asking $694,000, or about $800 a foot. Realtors call it a “townhouse” with “basement entry.” But to mice and mould, it’s still a one-bedroom suite below ground, although it does have stainless and granite.

On Sunday I spoke with a 30-year-old accountant and his wife who sold their house six months ago (smart) and have $400,000 sitting in a chequing account (unsmart). They were thinking about investing it, but she got pregnant and went on mat leave. Now they’re hot to buy another house, this one costing $1,000,000. After putting 20% down they’ll have $200,000 to invest, $200,000  in equity and $800,000 in debt. “Compared to our friends,” Jamie said, “we’ll be doing great. They have no cash.”

And he’s right. They are. Good thing he’s got a stable job with fabulous long-term potential – a trustee in bankruptcy.

On the weekend this pathetic blog hosted a weird debate between those (like me) who think the economy will succeed but gobs of middle-class people will self-destruct, and others who believe capitalism’s turned toxic and we’re all screwed. I was vastly outnumbered but, thankfully, am correct.

When this blog was born four years ago I believed, and clearly stated, real estate was an increasingly dangerous asset class and Canada would at some point repeat the US experience. A year later the GFC was in full force, housing tanked, and panicked governments slashed interest rates. Mortgages fell to historic lows and house horniness swept the land. Prices and sales leapt higher, debt exploded and affordability tumbled. Now 70% of us have real estate, along with more than a trillion dollars in mortgage loans, while savings and investment levels have crashed.

This isn’t so much dangerous as it is lethal. Risk was high in 2008. Today it’s off the chart. You can moan and bitch and blame policymakers for enticing you into debt, which neatly transfers wealth into the hands of bankers and shareholders, or you can do something about it. Most people won’t. And that one fact will drag everyone down – except those who are balanced, diversified and liquid in their financial lives.

The problem is not politicians and central bankers trying to rescue the economy from deflation. That’s actually a good thing, if you like jobs and income. Rather it’s us. The penchant for self-destructive behaviour is endemic. It will lead to social crisis, at least among the numbnuts who buy basements for six hundred thousand or take on $800,000 mortgages because of bumps.

So four years ago I thought a housing correction had the potential to cause unanticipated loss and financial distress among a lot of people, especially in Toronto, Calgary and Vancouver. But I was wrong. It’ll be worse.

The consolidation of personal net worth in housing has been unprecedented. The scope of borrowing, historic. Nobody in government ever anticipated sustained low rates would become a drug, or that so many people would cheerfully plunge into so much debt that normalizing rates now would wipe them out. In their attempts to rescue the economy in 2008 and 2009, policymakers created the mama of all conundrums. The only solution now is to slowly crash real estate values and force the equityless to sell and flee.

Hence, F’s War on the House. And it’s working. But there are months of decline ahead which will slowly, inexorably destroy family net worth and turn many properties illiquid. No matter how horny you are, or how much your spouse begs for Moen and Aga, resist.

How do you preserve your wealth in a country about to learn all about asset deflation, deleveraging and negative equity?

Garth Turner live in Toronto

This will be my topic in a few weeks when I hold a public event in Toronto. Some parts of the GTA and southern Ontario will be thumped by the real estate correction. Others will retain more of their value. But everywhere sales volumes will fall and buyers will be scarce, while the net worth of most families is threatened.

You can go down with the fools, or go unscathed. Your choice.

The event will be on the evening of Tuesday October 23rd. Admission is free, but you need to register in advance, and tell me how many seats you want. To reserve, click below.

Garth Turner Live in Toronto — Event Sign-Up Form

159 comments ↓

#1 Randy on 09.16.12 at 8:55 pm

Nice Foot Fetish !!!

#2 Randy on 09.16.12 at 8:57 pm

What happens to Canada when the Commodity Super Bull Market ends in a year or so ?

#3 gladiator on 09.16.12 at 9:05 pm

Garth, I’m not coming to your event in TO. I’m tired of waiting for house prices to normalize. I give up. I’m buying a SFH in the Annex. Cheers.

We shall pray for you. — Garth

#4 Canadian on 09.16.12 at 9:09 pm

I thought you were going to solve global warming tonight. Hopefully you provide equal opportunity for abuse to the environmental doomers as you do to metalheads. At least my silver ETF is up 18% since I bought it, yet global temperatures are like the markets……still about what they were a decade ago.

#5 Short vowels on 09.16.12 at 9:11 pm

Your auto mailer says I’m signed up for Vancouver on Aug. 20. Good thing I have a Delorean.

Fixed momentarily. — Garth

#6 MikeP on 09.16.12 at 9:11 pm

Hi Garth, just signed up for Toronto but the confirmation email is detailing Vancouver’s talk last month…hope that is just a glitch but would appreciate a clarification.
Thanks!

Glitch. It will be fixed. I am looking at the reservation log now and everyone signing up is confirmed. You will receive another letter closer to the date. — Garth

#7 Skiffy on 09.16.12 at 9:17 pm

Will there be punch and pie?

#8 renters rule on 09.16.12 at 9:20 pm

@#5 short vowels

“good thing I have a Delorean”

Best. post. EVER.

#9 Jim Lahey, Sunnyvale Trailer Park Supervisor on 09.16.12 at 9:23 pm

“The event will be on the evening of Tuesday October 23rd. Admission is free, but you need to register in advance, and tell me how many seats you want. To reserve, click below.”

Set aside 6 tickets Garth. I will be joined by Barb, Ricky, Randy, Julian and of course Bubbles. Looking forward to seeing the blog dogs. What you are describing in your post this evening is the mother of all shithawk storms!

#10 EIT on 09.16.12 at 9:26 pm

Boo Central Planners

#11 Sparky55 on 09.16.12 at 9:34 pm

Another developer jacking the price as their houses don’t sell: PID 41109943

Been noticing this for a while. Even in larger developments, where there are many new houses and lots for sale, none sold.

#12 guido on 09.16.12 at 9:34 pm

You better believe a shit storms a coming garth your always wrong . But realestate in toronto isn,t dropping unless they raise rates and we know that won,t ever happen no matter what you hope … Anyway your still a laugh ..

#13 T.O. Bubble Boy on 09.16.12 at 9:35 pm

How many email addresses ending in @remax.com or @bosley.com have signed up so far?

#14 Van guy on 09.16.12 at 9:36 pm

“In February of this year some sad person bought an underground suite in the same house for the same price.”

It’s not sad when blog dogs here want revenge! Apparently, this story was covered on vreaa.com and it was determined that a realtor had purchased this basement. You’d think a realtor would know better!

#15 NoName on 09.16.12 at 9:37 pm

If i have 400k and stable job, it wouldn’t take me much to upgrade my wife from employed mother of __ ver4.0, to desperate housewife ver1.0, but that just me…

#16 adam on 09.16.12 at 9:37 pm

The title that says “Garth Turner live in Toronto” in magenta & courier new was an unexpected colour & font choice, I can’t stop thinking about it.

My feminine side. Deal with it. — Garth

#17 Robert on 09.16.12 at 9:39 pm

I never like to judge another until I can honestly say I have walked a mile in his shoes. Well in 1980 I did walk in his shoes when interest rates went to 20%. If you think anyone is going to help you don’t count on it. Back in 1981 I had a neighbor who did not want to lose his house so he went to his friendly banker with family budget in hand. He could afford to pay $200 more per month but not the $480 that the bank was looking for. The banker laughed when he suggested that he would pay the $200 if they agreed to to add the extra 240 to his mortgage. Yes that old friendly Canadian bank told him to they wanted a quick claim. Shocked at the way he was treated off he went to his lawyer and told him the story. To make a long story short the lawyer told him to bank all the payments and make no more to the banks and to allow them to serve foreclosure which he did. On the day he was in court the lawyer made a point of telling the judge what his client went through and gave the evidence that he had banked every payment along with the $200 extra he offered the bank. The judge through it Out and he ended up staying in the property for a total of 18 months. So donot think the Bank will care about your fully insured mortgage… This is already ugly and is going to get even uglier as it gains momentum. Already ugly? There are many many losing sleep over their finances tonight and know very well that they will never keep their homes. That is a sad and ugly truth. In 1980 I remember saying to my wife what is it with the foreclosures there seems to be a lot of them and I also remember a builder advertising that if you bought one of his spec homes he would give you a brand new Cadillac for free.. Sound familiar?

#18 Min in Mission on 09.16.12 at 9:42 pm

Very well said.
I remember that “basement” from awhile ago. Unbelievable. And they probably think that they are smarter than the rest of us.
I am still angry, at myself, for missing the event you had in the Fraser Valley years ago. I just can’t make it into the “Big Smoke” very often.
I really hope that people pay attention. The way that things worked in the past, will not work now.

#19 TurnerNation on 09.16.12 at 9:43 pm

I’m booking this day off work! I do have some holiday daze which cannot be carried into 2013.

Punctuality is prized, at this weblog. Life imitates art? Who will be first/furst, at the event?

Let’s hope there isn’t a Lynyrd Skynyrd concert, monster truck derby, or Mattamy homes release scheduled on the same date, otherwise attendance could be flagged. :-p

#20 NoName on 09.16.12 at 9:43 pm

#3 gladiator

talking about gladiators…

http://goo.gl/2PXNu

“Well, some folks over in Pula, Croatia, had a great idea when they thought to themselves, “let’s have these so-called gladiators compete in an appropriate venue.” So this weekend, there will be two outdoor hockey games at the Pula Arena—the town’s ancient Roman amphitheater.”

#21 Naga on 09.16.12 at 9:44 pm

Garth I be continued to read and be impressed with most of your posts but not your blog followers.

I be spent most of the summer in Europe but that is not the point for this post.

In general I agree with most of your musings about the macro economic situation. But I maintain that for those that have 25 percent down Real Estate is still a good path to better times.

You have been espousing the virtues of financial investments through balanced portfolio strategies – yet you have also indicated that DB plans are not sustainable.

So which is it? Most DB plans have very very well balanced financial portfolios along the balanced lines that you espouse. So why are they not sustainable. They are mostly invested interest great companies with good balance sheets and good bond exposure and REITs that you so love.

Most of the deficits in these plans is due to low interest rate environment which creates short term evaluation distortions re commuted Values. By simply changing early retirement rules susch as R80 or R85 to R90 and allowing for more realistic discount rates the deficits would quickly disappear.

But my bigger point is that your conclusion is somewhat illogical to me. If as you continually state most Canadians have not been smart or disciplined enough to save and invest for their retirement then why suggest that DB are not sustainable?

I belive that 99 percent of the opulation is not disciplined enough to do what you recom mend – pay themselves first and invest in financial liquidity – even though DB plans are not liquid they do provide the financial diversification that you continuously espouse to.

Anyway my model is RE plus a mortgage free home by 55and the rest of you life is an easy ride with or without a job at 55.

Suggest you redirect your talents to the topic of how to create a system for most Canadians to participate in a private pension system that is more in line with a DB plan.

#22 Smoking Man on 09.16.12 at 9:45 pm

Blog dogs, and posters

I say we all go for beers after the great bearded one speaks.

Is there a pub at the double tree

who’s in?

#23 T.O. Bubble Boy on 09.16.12 at 9:47 pm

Now they’re hot to buy another house, this one costing $1,000,000. After putting 20% down they’ll have $200,000 to invest, $200,000 in equity and $800,000 in debt. “Compared to our friends,” Jamie said, “we’ll be doing great. They have no cash.”

This part of the post seems fake to me… no one honestly thinks that putting a smaller down payment (and having $200k more on the mortgage) makes them richer, unless they work in advertising for Scotiabank.

#24 GTA Girl on 09.16.12 at 9:52 pm

I am signed up!

Will bring a notepad, name tag and a copy of your book.

It will be a relief to hear someone openly express concern and question it all. It’s becoming verboten to speak of a correction at dinner parties. Which confirms that many are hanging by a thread, with heads in the sand.

#25 Controller on 09.16.12 at 9:55 pm

For those of you going to see Garth in Toronto, get there early. I was at the Vancouver presentation, (It was great), and almost all of the seats were gone 30 minutes BEFORE start time. Standing room only. And rightly so!!

#26 B P O E $$ #1 on 09.16.12 at 9:56 pm

Thats right you heard it here folks, the unthinkable is unfolding, sales in Vancouver worse than 2008 inventory past 19000 and soaring to 20000, completely unstopable, the bubble has burst, all the pros waiting in the wings have filled their pants and were last seen waiting in line at Money Mart. Fire sale pricing on Mercs and Beemers from repo man coming soon, 2 for 1 hammers and drywall at Home Depot. Bob Rennie and Tsur new managers at Wendy’s. I’m right!

#27 Xindai Shan on 09.16.12 at 10:03 pm

Is Smoking Man the opening act ?

#28 KingBubbles on 09.16.12 at 10:10 pm

Is Sherry Cooper coming ?

#29 Freedom First on 09.16.12 at 10:13 pm

#3 Gladiator

We shall pray for you-Garth.

Thanks Garth, I needed to hear that! Seems like every setting where a group of people get together, the topics of the GFC/RE come up. I still slip up once and a while, and talk like I do here. Pisses people off. Because, as we know, there is people still either unaware of what is going on in the U.S. and Europe, or, if they are aware, they absolutely do not want to hear it is going to happen in Canada. The “we are different” crowd. I can’t stand it! I will pray for them. Thanks, and, no wonder we are screwed.

#30 Old Man on 09.16.12 at 10:13 pm

#17 Robert: the rates never went to 20% in 1980, and nobody goes foreclose, but power of sale, and the bank might ask for a quitclaim deed, but it is not quick – just saying.

#31 Sockeyemoon on 09.16.12 at 10:14 pm

Last!

#32 OttawaLuke on 09.16.12 at 10:15 pm

Any chance of an Ottawa visit this tour? If not I’ll make the trip to T.O

#33 Leggendario on 09.16.12 at 10:15 pm

Hey Garth any plans in coming here to Saskatoon…. Seriously, this place needs a lethal dose of reality. Most people here think that Saskatoon is the next Vancouver, albeit better because of the resources from the mines.

#34 MediaBuff on 09.16.12 at 10:16 pm

On the signup form:

“How many people will be attending?”

3 – me plus 2 or 3 other people

Me and 3 other people would be… 4 people. Maybe we have to share 3 seats. Who gets to sit on my lap?

#35 Party On Garth on 09.16.12 at 10:18 pm

Looking forward to it Garth.

#36 NYCer on 09.16.12 at 10:19 pm

Im so excited I signed up! Can’t wait!

#37 FI Guy on 09.16.12 at 10:20 pm

All signed up…

#38 Smoking Man on 09.16.12 at 10:23 pm

#27 Xindai Shan on 09.16.12 at 10:03 pm

I’m the close at the bar. would beso cool to meet the people that make this place fun.

I promise I will not evaluate you and cast you into the best book ever written.

#39 East Van on 09.16.12 at 10:23 pm

Capitalism requires GDP growth year over year. GDP growth is thus exponential, but we live in a finite world with finite resources, and nature has capacities that cannot be exceeded. Endless GDP growth is like a cancer. It grows until it kills the host.

#40 Smoking Man on 09.16.12 at 10:29 pm

Xindai Shan

sorry made a fo paw title of my book worst book ever writtem

#41 gladiator on 09.16.12 at 10:31 pm

@29 Frredom First:
thanks for your message. I just am tired to see that the ridiculous keeps becoming bizarre and everybody seems to think that it’s ok. I used to be a contrarian. No more. Seems like it’s a loser’s game if you rent. I used to be a proud renter, but life seems to be just passing by. I am a disciplined saver. What did I get? Almost nothing. Preferred stocks fell in value in 2009, so they’re not a perfect protection of my money. Otherwise, I get an almost zero rate, and even negative after inflation.
Whatever… I have to live somewhere where I can put a nail in the wall and not fear about landlord’s complaints about that. Even 3 years ago prices in TO were ridiculous. Now they just make no sense. How long can this go? Nobody knows. The rulers’ class want to keep this game going, so the only losers are the ones not playing it. I am tired of being on the fringes. I’m going head first into it. Whatever it may mean to it. I will not be alone as millions like me bought RE in the last 1-2 years.
My friend who works in a bank (red, 4-letter logo), who was all against paying too much for a house is also buying (in Oshawa though, not TO). The last vestiges are giving up. This may be the top, but I want to buy the place I will live in for the next 30 years. Why should I care?

#42 Smoking Man on 09.16.12 at 10:35 pm

#24 GTA Girl on 09.16.12 at 9:52 pm

Dinner parties? Lucky U

I don’t get invited anymore seeing that I no longer have a filter. A wall. A pretend dispostion. I say what ever pops into the head. 53 Smoke 2 packs, and kill a big bot every night

My time will be short, so why pretend. Say it like you see it and who gives a shit how the flop lands.

#43 Ayn Rand Army on 09.16.12 at 10:37 pm

#39 East Van on 09.16.12 at 10:23 pm

Capitalism requires GDP growth year over year. GDP growth is thus exponential, but we live in a finite world with finite resources, and nature has capacities that cannot be exceeded. Endless GDP growth is like a cancer. It grows until it kills the host.

——
You are completely wrong, but unlike Garth, I’m tired of repeating myself.

#44 torontorocks on 09.16.12 at 10:38 pm

I should be good to go for beertinis. We all wearing namtags or do we have to guess that the guy passed out with a wet front is smoking man? Just kidding.

#45 Merina on 09.16.12 at 10:42 pm

Just checked 1 year mortgage rates history in Canada and found that they were 21.25 percent in Aug to Sept 1981.
http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_page52.pdf

#46 AprilNewwest on 09.16.12 at 10:45 pm

#21 Naga – Arrogant!

#47 Miko on 09.16.12 at 10:46 pm

ouch!

http://richmondbcrealestates.com/?p=834

#48 Old Man on 09.16.12 at 10:46 pm

Now, here is the other angle if history repeats itself for all you wolfs that want to stalk your prey, and hear me out, as when the crash comes who will be holding the bag? CMHC, and they will have offices in all locations. I have seen them dump Real Estate on the books at huge discounts to make the problem disappear, and that is government for you; this could be their loss, and your gain – think about it.

#49 Smoking Man on 09.16.12 at 10:52 pm

Into the 3rd glass, so this is my last post.

God, Jesus, Ala, Destinolgy atom mover, or who ever you are. Why man, Why.

Why did you take Liz, Barrie is crushed. The most loving family I have ever met in my life. The funnest people, newf’s . Haven’t sleep in two nights.

You took her on a friday, how low can you get. If you ever have the balls to take me other than a tuesday morning of a long week end. I am going to puch your face in.

You have been warned.

#50 Will on 09.16.12 at 11:00 pm

@East Van much of that growth in the developed world has barely been above the rate of inflation in the past few years. Even in the developing world, countries like China won’t be using nearly the same amount of resources as they are now. After all you can only build so many empty cities…

As for the greater economy, if you have cash/investments and a job generally you’ll be okay. If you have 0 or 1 of the above, than things will suck.

#51 Bob on 09.16.12 at 11:01 pm

Explaining why the middle class is disappearing…

I know this is mostly a real-estate blog, Garth, but would love to have you elaborate in more detail about the middle-class and income gap. Is it your opinion that the bigger issues is not so much wage disparity, but rather the middle class (the average person) isn’t so smart and is doing self-destructive behavior? Maybe elaborate more on this taking a more holistic view of the issues. Would be interesting.

#52 squidly77 on 09.16.12 at 11:09 pm

Liquidity will set you free. In fact you already are.

#53 Ryan Perich on 09.16.12 at 11:12 pm

to #30 Old Man on 09.16.12 at 10:13 pm

#17 Robert: the rates never went to 20% in 1980, and nobody goes foreclose, but power of sale, and the bank might ask for a quitclaim deed, but it is not quick – just saying.

if you don’t think the average mortgage interest rate went to 20% range for a bit in the early 80’s – YOU ARE THE BIGGEST MOST GULLIBLE MOST UNEDUCATED GREATER FOOL. a lot of people remember that, and have been scared to go floating interest rate ever since.

will we see that again ? unlikely. that was rediculous, in 3-4 years you’ve doubled your debt.

and nobody goes foreclosure ? I did in 2009 from a leaking rotting fraudulent condo scheme. I said ” F this” walked out, handed the keys, let them foreclose then sue me for $170,000 and ignored a $5,500 special assessment after 9 months of a leaking roof. – and declared bankruptcy. 3 years later I have $7,000 in 2 credit cards with nothing owing and a $5,000 unused line of credit.

people can and will let lenders foreclose and sue and go bankrupt. 9-21 months of rough living for not being underwater of $200,000+ is a good thing when you make $40,000 a year before taxes.

#54 squidly77 on 09.16.12 at 11:14 pm

But if your in debt….

#55 anotherreader on 09.16.12 at 11:18 pm

it’s all about timing . had the owner sold his/her place in 2008, the tax free loss is 590k

#56 Old Man on 09.16.12 at 11:26 pm

I can see Caesar a couple of years from now with an election coming up with mess on his hands with about $300 billion of properties at CMHC, and he will say get them off the books, and where is K? Well he will be hiding his ass down the street at some pub getting drunk with gals giving him lap dances.

#57 Canadian Watchdog on 09.16.12 at 11:29 pm

S&P500 isn’t going too far with QE3 deteriorating growth. S&P500 Growth Rates

Only a matter of time before Hedge Funds start booking profits.

#58 TRT on 09.16.12 at 11:32 pm

Real estate in Vancouver will probably keep going up. After all, it has defied logic for almost a decade now. i went in head first years ago…totally scared…always thinking that the market might collapse.

It didn’t. In the meantime, its almost paid off and I have it rezoned and ready to go for multi-unit residential townhomes. During this scary time, I have hedged against a RE collapse. So now, i don’t care whether there is a collapse or not. Oh, btw in my 30’s.

The only thing IMO that makes sense why RE prices went up and continue to go up is International migration. ALL my friends were born in another country! Take that for what you think its worth.

I don’t expect anybody to believe in my thesis. However, it should be considered if you are bewildered about what has happened in the last 10 years.

#59 Old Man on 09.16.12 at 11:38 pm

#53 Ryan Perich – said 1980, and rates went higher in 1981/82, but was syndicating $millions with pension funds, and our prime rate for a first mortgage never went above 16%. Foreclosure, as Garth said really in fact really does not exist, but can be done with the court system that can take over a year; all is power of sale to kick out bad situation.

#60 AACI Home-Dog on 09.16.12 at 11:42 pm

#17Robert

…it’s called a “quit claim”, not a quick claim.
good story though…

#61 Victoria Tea Party on 09.16.12 at 11:49 pm

INNOCUOUS RAMBLINGS ON THE EVE OF DESTRUCTION

Perusing House Hunt Victoria’s blog finds that Victoria’s real estate market is pretty much like a lot of folks hereabouts, room temperature. The only graveyard in Canada, with a business section, is now, perforce, a graveyard! No business!?

SPEAKING OF…

…grave situations, I was drawn to the various stories outlining the American Empire’s stunningly rapid dissolution of influence in various parts of MENA (Mideast and North Africa).

A number of apparently Libyan commandos, having slaughtered four Americans in Benghazi several days ago, just don’t know how lucky they are that the Yanks helped to waste that Ghadaffi chappie a year ago.

Talk about a bunch of local ungrateful wretches. No more Yankee ammo for those laddies! And no invitations to the White House either!

The “Ugly American” syndrome has enveloped the greater Islamic world to such an extent that who knows what lies in this tale’s next chapter. It won’t be nicey-nice. Does this mean we may also soon see…

IRAN VS THE REST OF US?

Latest word out of Israel is that the Iranians (Persian smart folks actually, and don’t forget that!) are about 7 months away from having their own home-bult nuke.

Is that true? Not according to retired Mossad chief Meir Dagan, reprised on CBS 60 mins this weekend. The Persians are three years away from owing its very own glass-maker, he contends.

Also this weekend an exhausted PM of Israel,, “Bibi” Netanyahu, was doing the Sunday US talk shows and urging that somebody’s gotta to something to stop this “existential” threat from Iran against the Jewish State.

NOW TO RICK’S PICKS…

Your faithful scribe then repaired to Rick’s Picks web to read about his technical analysis that the Dow may be ready to punch up way past all-time highs of 14-grand!

…BUT, HE CAUTIONS THUSLY…

“..Some would argue that it is impossible for stocks to collapse at a time when monetary easing has never been more promiscuous…at least in theory, in practice the good times on Wall Street could end overnight.

Recall that it took just a single assassin’s bullet to trigger World War I…Is it inconceivable…a single shoulder-fired missile could have a similar, destabilizing effect…if it were to sink an oil tanker in the Strait of Hormuz?

…The point is, the relatively good times for shareholders are fated to end with a thunderclap.

Until then, we should recognize that it is hubris alone that sustains the global financial system. Those who actually believe we are enjoying a “wealth effect” from the transparent, unmitigated fraud being perpetrated by Ben Bernanke, and who have positioned themselves aggressively in shares to take advantage of this belief, richly deserve what is coming.”

MY QUESTION IS THIS…

…Is it a good time to STILL be investing in fixed income, REITS and other dividend-yielding equities in what seems like a topish market with all of the song and dance musical geopolitical chairs mentioned above now dancing in our heads and beyond?

Or What?

#62 DON on 09.16.12 at 11:54 pm

“On the weekend this pathetic blog hosted a weird debate between those (like me) who think the economy will succeed but gobs of middle-class people will self-destruct, and others who believe capitalism’s turned toxic and we’re all screwed. I was vastly outnumbered but, thankfully, am correct.” (Garth)

********
Not vastly outnumbered…you were handling the doomer situation well. To all the doomers: Things happen in degrees and humans adapt, we have too. People talk of peak oil, pollution. People are already slowly adapting to cleaner forms of energy, food growing. People will adapt and those who don’t will fell discomfort. It’s easier to hope for the worst to end this tragedy and start over asap but things don’t happen that way.

I will wait to buy a house, as my wife is on side. I will wait as long as it takes. Peer pressure is laughable, might even read the realtor manual and buy using a lawyer and home inspector with credentials. I love being liquid, easier to compete for jobs, as most money making professionals have chained themselves to a hefty mortgage. Living in a City is not what its all cracked up to be, especially when you have children and the lifestyle is not ideal.

#63 Grim Reaper/Crypt Speculator on 09.16.12 at 11:58 pm

Something is NOT right…..

I counted (5)….counted em FIVE …..posts by Smokinky Man ..and none were DELETED.

I know its Sunday……butt….

#64 Old Man on 09.17.12 at 12:10 am

#62 DON – you just said it all that your wife was on your side, as a good woman is hard to fine, so hang in there.

#65 Devore on 09.17.12 at 12:25 am

#21 Naga

You have been espousing the virtues of financial investments through balanced portfolio strategies – yet you have also indicated that DB plans are not sustainable.

DB pensions are not sustainable, because the majority of them are underfunded, and the contributions are modeled on unrealistic returns not seen for years.

#66 THE CELIAC HUSBAND on 09.17.12 at 12:29 am

A major correction in Canada won’t be pretty.
One could always watch the carnage from afar, when it happens. Rents are cheap here in Europe, compared to what they are asking for a basement suite in Montgomery.

http://theceliachusband.blogspot.fr/2012/09/for-sale.html

#67 MrHulot on 09.17.12 at 12:33 am

Hey Garth, any plans to come up to Nunavut? The Igloo prices here are in a bubble and keep going up. Though I think prices have peaked and they’ll be melting away soon.

#68 Devore on 09.17.12 at 12:37 am

#39 East Van

Capitalism requires GDP growth year over year. GDP growth is thus exponential, but we live in a finite world with finite resources, and nature has capacities that cannot be exceeded

Capitalism requires no such thing. Compound interest does.

#69 Nostradamus Le Mad Vlad on 09.17.12 at 12:43 am


“The penchant for self-destructive behaviour is endemic. It will lead to social crisis, at least among the numbnuts who buy basements for six hundred thousand or take on $800,000 mortgages because of bumps . . . some sad person . . .” — Hence the saying “Stupid Is as Stupid Does”, ‘coz that’s just plain monolithic, neanderthal planning. That’s not even thinking things through.

“Most people won’t. Rather it’s us.” — Bingo! Most sheeple have no idea what self-responsibility means, but now is a good time to fathom it out. The govts. are not our friends.

#61 Victoria Tea Party — “Latest word out of Israel is that the Iranians (Persian smart folks actually, and don’t forget that!) are about 7 months away from having their own home-bult nuke.”

Hi VTP. A link posted earlier stated Noddin’ Yahoo said the same thing in 1992 about Iran. Should be classified as a Reader’s Digest joke.
*
The US Fed in full-blown panic mode, and Steve Keen Fortunately, I was somewhere else then; Brazil and the global payments forum; Masters of Deception The Establishment, or TPTB; Loopholes for tax havens; The NHL Players should read this as well as owners. Perhaps owners should donate 30% of their teams’ incomes during the season to charities, a.k.a. spreading the wealth out a little more; Spain Large protest against authoritarian austerity; 2:01 clip More prison labor = longer unemployment lines, a.k.a. shifting work to cheaper sourced labor.

10:29 clip Preserving the Petro-dollar (won’t) and WW3 (fiscal and / or physical); Contemplating Your guess is as good as mine; Global Data = global weakness; A Pic Is Worth A Thousand Words; 2015 Hard commodity price collapse; China Crash What the CPC fear most; Wall St. Monday Today sux; Bernanke Plan working, but Fake Jobs aren’t coming back; Cooooonsequences of a bloated deficit; Interesting about US RE and derivatives.
*
Male Parking Skills? 6:11 clip Electromagnetic pole shift? It could be one reason why the seasons are being pushed forward, appearing later each year, and Polar Shift – Ice Age Coming soon. Link in; 1:03 clip Acoustic levitation — water droplets held aloft by sound current; World events will end up changing the face of the planet. Cdn. RE won’t even be counted; Muslim Riots The m$m is lying about it? Of course they are! The riots were pre-planned several weeks ago, as this is how TPTB keep sheeple off-guard, bringing in one crisis after another. It’s called dumbing down; US – SArabia This is what the US will use to justify invading SArabia, ‘tho it was almost certainly done by expendables; FEMA Camps and the buses used to get sheeple there; Syria Wonder who is supplying Libyan arms to Syrian rebels? Honest politico? Axed by the govt. for not supporting Iran attack; US nukes Ready for overhaul? Fresh Air smells really nice to her; Back Seat driver Which end of a jet is safest to sit in? Arthritis A painful illness, if ever there was one; Superbug #7 moves on; Mitt Romney Complete shambles. Obomba – no better. The Tooth Fairy – Improvement; False Failing Flags.

#70 Junius on 09.17.12 at 1:02 am

#58 Trt,

You said (for the millionth time), “The only thing IMO that makes sense why RE prices went up and continue to go up is International migration. ALL my friends were born in another country! Take that for what you think its worth.”

It is worth nothing. It is total BS as has been pointed out here a million times. Prices rose primarily because of a credit bubble. They will fall as the credit bubble deflates. Period.

#71 cynically on 09.17.12 at 1:05 am

#12 guido – you are eiher a realtor or one of those poor folk Garth just finished writing about but please, for your own sake, don’t brag about it, particularly if a realtor.

#72 $$$BPOE#1 on 09.17.12 at 1:20 am

Anyone else notice Obama and Co keeping interest rates rock bottom til AT LEAST 2015. Uncle Stephen Harper is going to do the same. Mark these words. So the person buying in 2008 will have only 13 years left of payments to the Winner Circle because of acellerated payments. Nice to see a Realtor snapping up the suite. Everything is selling and prices are going higher now. Don’t forget to check out VREAA for all the latest breaking pro buying news in BPOE.

#73 Robert on 09.17.12 at 1:32 am

I guess the point was the Banks are not at all interested in helping those that need help. Ok so it was 1981 and that’s not bad only being out by one year. After all it was over thirty years ago.. By the way I stand corrected on the quit claim.. LOL. Old Man quit being so anal your age is showing..

#74 Mr Buyer on 09.17.12 at 1:58 am

#41 gladiator on 09.16.12 at 10:31 pm

…………………………………………………………
This is obviously a real estate salesman

#75 Mr Buyer on 09.17.12 at 2:01 am

#11 Sparky55 on 09.16.12 at 9:34 pm
Another developer jacking the price as their houses don’t sell: PID 41109943

Been noticing this for a while. Even in larger developments, where there are many new houses and lots for sale, none sold.
……………………………………………………………
Its a Psy-Ops thing. If a buyer gets 100k off a price the buyer thinks they have done well, even if the price was arbitrarily inflated by 100k a day before said buyer stumbled upon it. This kind of nonsense will fade away as the grim reality sets in.

#76 Mr Buyer on 09.17.12 at 2:02 am

BUYER BEWARE. Now is not the time to buy a house. The bubble has topped, sales and prices are falling across Canada.

#77 TheBigLebowski on 09.17.12 at 2:20 am

Capitalism will fail ? We haven’t had anything that resembles Capitalism in over 50 years. When corporations control government is the definition of Corporatist?Fascism. And thats what we have had for the past half century. The question should be, “will Corporatist/Fascism fail ? With every new QE bank bailout we are witnessing the real time failure of Corporatist/Fascism. It is reverse Robinhoodism, steal from the poor and give to the entitled.

#78 Buy? Curious? on 09.17.12 at 2:47 am

Garth, you’re expecting House-pocolypse to be worse? Home-agedeon to more destructive than previously thought? Right on! I can’t to see all the garage sales next Spring! Do you think housing correction that will wipe out the middle class, be an even cull or do you think one demographic take the brunt of this tsunami? I think Gen X’s are going to suffer the worst because of aging parents and high costs of childcare. Old people are going to spend all their cash on old age homes and depends leaving nothing behind in the form of inheritance. Thanks baby boomers, thanks for leaving nothing behind but a sense of entitlement and hypocracy.

#79 Mr Buyer on 09.17.12 at 2:59 am

Hey where is the Garth Turner Osaka Japan sign up form?

#80 eagle eyes on 09.17.12 at 3:06 am

#53 Ryan Perich
” declared bankruptcy. 3 years later I have $7,000 in 2 credit cards with nothing owing and a $5,000 unused line of credit.”
Ryan, can you tell me when you declared bankruptcy did they take “everything”. I was told that it is really tough, they’ll nail your wedding ring. What were you allowed to keep?

#81 Aussie Roy on 09.17.12 at 4:29 am

Aussie Headlines

During the property boom of the early 2000s, Australians embarked on a debt-fuelled spending binge. A halving in interest rates since the mid 1990s meant families could afford to borrow twice as much. Banks were more willing to lend.

Supported by rising incomes and low unemployment, we went on a spending splurge. House prices boomed – more than doubling in a decade. Australia’s debt to household income ratio soared above 150 per cent – one of the highest in the world.

http://www.heraldsun.com.au/business/jessica-irvine/we-are-conservative-with-our-finances/story-fnfhw5ld-1226474796421

The SMSF Professionals’ Association of Australia (SPAA) has called for the Government to close the loophole that allows unlicensed individuals to offer advice on how to finance an SMSF property investment.

It is proposed that a limited recourse borrowing arrangement will become a financial product, so it’s not law yet, but the Government have certainly indicated, and they have issued draft legislation, that those type of products will become a financial product,” he said.

http://www.wealthprofessional.com.au/article/spaa-speaks-out-on-property-spruikers-143720.aspx

The audio from Leith van Onselen’s presentation was recorded and edited into his arresting powerpoint. Press play and enjoy the analysis.

http://www.prosper.org.au/2012/09/12/leith-van-onselen-on-australias-macro-housing-conditions/

Almost half the first-time buyers lured by hefty home loan grants towards the end of June 2008 will be faced with the prospect of losing their homes by mid next year, according to a new report, Digital Finance Analytics.

“Most people don’t realise that the average loan size is twice as big as it was in 2005 so many people are still mortgaged to the hilt,” DFA director Martin North said.

http://www.couriermail.com.au/realestate/buying/house-crisis-looms/story-fndboawi-1226475536529

AUSTRALIAN house prices are likely to tumble in the next two years, potentially plunging 20 per cent, an analyst at a global investment bank says.

http://www.couriermail.com.au/realestate/selling/property-prices-to-hit-the-mat/story-fndbofvw-1226473248661

#82 Buy? Curious? on 09.17.12 at 5:09 am

I meant to say “I can’t wait to see all the garage sales this Spring.”

#83 Rob now in Nova Scotia on 09.17.12 at 6:32 am

Garth, are you planning on coming out East at all? Halifax or Lunenburg? The weather is great this time of year out here…

#84 Accroker on 09.17.12 at 6:48 am

Signed up and looking forward to hear you live!

#85 John on 09.17.12 at 8:04 am

Gladiator wrote:

“This may be the top, but I want to buy the place I will live in for the next 30 years. Why should I care?”

Why should you care? Looks like you’ve answered that question already. Has it ever ocurred to you that a man looking to “nest” isn’t interested in offering value to his community or society?

That’s the context. That’s the culture. But…why should you care?

After 30 years in a suburban pressed cornflakes box, hiding from life…you’d be well beyond caring.

#86 elmsley on 09.17.12 at 8:59 am

Garth, how long is your TO event run until? I have to close a few deals.

#87 HalifaxEd on 09.17.12 at 8:59 am

@11 Sparky55:

Another interesting “trick” I’ve noticed is that sometimes after a property has been sitting for a really long time (sometimes hundreds of days), it will sell for exactly the asking price, right to the dollar. Even after one of these price bumps.

There is actually one such property in that same neighborhood (Timberlea, Halifax, NS): PID 41110370

I’ve seen the same thing happen in other developing areas. These houses are usually all similar in structure, features, location, etc. Why does one house out of the bunch suddenly sell at asking price or the recently “boosted” value?

No idea what games these developers and agents are playing at. If I had to guess I’d say some kind of market manipulation, but that would be too cynical of me… ;)

————————————
“Another developer jacking the price as their houses don’t sell: PID 41109943
Been noticing this for a while. Even in larger developments, where there are many new houses and lots for sale, none sold.”

#88 Reality Bytes on 09.17.12 at 9:04 am

I’m only coming if you have a metal detector at the door to keep out those toting gold and silver around.

Relax. It will be confiscated. — Garth

#89 maxx on 09.17.12 at 9:16 am

UPDATE FROM VANCOUVER

My friend owns a small real estate office in BC…just last week he had 4 HAM buyers walk from downpayment days before closing…HAM is getting scared…another place 2M+ has sold and NOT closed 3 times this summer…something is going on…the market seems to have cooled…yet MSM tells us it is time to buy…w

#90 italian ignorant villager on 09.17.12 at 9:37 am

#12 guido

hayyy Guido why don’t you go and make some tomato sauce in your backyard a and bitch and talk loud like an italian villager while you doing it. Leave the predictions to the professionals ay.

#91 Johnny D on 09.17.12 at 9:41 am

The government of Canada will do whatever it takes to prevent a real estate meltdown of any kind. The bank of Canada will probably even lower interest rates to zero or go negative and start charging banks and people to stash money.

It is different this time… and all the people who are $500,000 in debt at least have nice houses and cars to show for it.

As someone who believes that earning and saving for what I own is the thing to do, I’m kicking myself and wondering where it all went wrong. I have all this useless, worthless Canadian currency and all the time I worked to earn it was a waste because people who impulse buy houses and cars with no savings or planning are re-writing the book of economics… and the government is happy to accommodate them.

Au contraire. The government is acting deliberately to deflate the bubble. — Garth

#92 gladiator on 09.17.12 at 9:45 am

@85 John: I am already offering value to the community and society by paying taxes, volunteering and donating to local charities. By buying a house, I’ll contribute to the economy several tens of thousands of dollars (renos, furniture, etc.). In your words, renters offer more “value” than owners? Please correct me if I didn’t understand your opinion.
btw, the Annex is not considered suburban and the drop in value won’t be that bad compared to suburbs.

#93 T.J. BONES on 09.17.12 at 9:59 am

see you on Tuesday!!

#94 Mike on 09.17.12 at 10:19 am

Hi Garth,

I love your blog, but in your previous post you said that options traders are worse than drug dealers. I price embedded options in financial products, and I can tell you that most options traders use these instruments to hedge. Those that abuse them are taking large risks, almost all of which result in ruin. Why would someone who gambles with options be worse than a drug dealer????

A rare miss by Garth?

#95 Victor on 09.17.12 at 10:19 am

http://www.theglobeandmail.com/report-on-business/economy/housing/crea-cuts-forecasts-as-canadian-home-sales-slump/article4548858/

The Canadian Real Estate Association is cutting its forecasts for both home sales and average prices, as it reported that national sales over the MLS system fell 5.8 per cent in August from July, the largest month-over-month decline in two years.

#96 Steven Rowlandson on 09.17.12 at 10:27 am

I seriously doubt that there is any thing accidental about what has happened and is happening in government and finance. Those running and regulating the markets are all educated people and they are fully aware of the consequences of their policies. I have no doubt they are also positioned to pick up the peices when the collapse has bottomed out. Garth you can’t sanitize the bankers, governments or their fellow travellers. The sheep are only doing what their shepards taught and told them to do and the out come was known well in advance. The price of property and paper assets is limited by the ability to earn and save enough to pay for them in a natural economic system. If that requirement is not met then prices would have to fall or there would be little or no sales.
In a natural system there are feed back mechanisms that limit excesses. In a manipulated system politically motivated excesses are permitted that lead to catastrophic collapes. People are about to find out the hard way.
The dirty little secret is that in an economy that runs on currency backed by debt, the price of all debt and paper can fall to zero under the right conditions. If the debt is no good or if there is no demand to get into debt everything based on debt can approach zero in the official currency and it to can go to zero since it is based on debt and not equity. In the event of government debt being unacceptable to the market the debt gets monetized and the exchange rate of the currency approaches zero and the currency which is the basis for the economy is recalled and X number of zeros are knocked off the supply wiping out debt and savings. If market forces don’t bring real estate prices down the consequences of inflation and currency destruction will. Once again a bell hop might just be able to buy the hotel he works in with a gold coin.

In the future people will laugh their butts off over the magnitude of government debt and real estate prices in an economy where one or two times minimum wage was the rule for skilled workers. They will laugh because allowing such excesses was the height of foolishness and stupidity on the part of people who should have known better.

#97 Realtors are in an all out panic on 09.17.12 at 10:32 am

http://www.theglobeandmail.com/report-on-business/economy/housing/crea-cuts-forecasts-as-canadian-home-sales-slump/article4548858/

The Canadian Real Estate Association is cutting its forecasts for both home sales and average prices, as it reported that national sales over the MLS system fell 5.8 per cent in August from July, the largest month-over-month decline in two years.
—————————————————————–

Wait til people can not get zero down mortgages the market will crash even harder as the house of cards falls apart. It’s going to be a nasty crash realtors a nasty crash.

#98 Toon Town Boomer on 09.17.12 at 10:58 am

I sure would like to hear you speak and meet you in person and discuss investing.
Will you ever come to Saskatoon?

With the pelicans. — Garth

#99 Jim Lahey, Sunnyvale Trailer Park Supervisor on 09.17.12 at 10:59 am

#22 Smoking Man

“Blog dogs, and posters, I say we all go for beers after the great bearded one speaks.
Is there a pub at the double tree who’s in?”

The Sunnyvale gang and I will join you Smoking Man. You will love Ricky, Randy, Julian, Barb and of course Bubbles. Cyrus may even come to the big presentation by the bearded mystic oracle, all knowing, all wise soothsayer from the east, Captain Garth. Ricky says he can outdrink you and feel free to be filterless with us misfits from Sunnyvale. The only exception is Cyrus. Please use your filter with Cryus as he is liable to pull out his hand gun. Should be a blast!

#100 Canadian Watchdog on 09.17.12 at 11:00 am

#96 Steven Rowlandson

“Those running and regulating the markets are all educated people and they are fully aware of the consequences of their policies.”

No. Those regulating the markets are the banks regulating themselves.

Maurice Dorman
Senior Supervisor at OSFI
LinkedIn Page
Past Jobs: Team Lead, Fixed Income Operations at Bank of Montreal Senior Manager, Treasury & Investments at Capital & Credit Merchant Bank

David Maxwell
Senior Capital Markets Analyst at OSFI
LinkedIn Page
Past Jobs: Consulting Analyst at TD Securities

Winnie LoBaker
Senior Manager at OSFI
LinkedIn Page
Past Jobs: Head of Collection Analytics at HSBC Financial

Renée Chen
CA, CFA, Director at OSFI
LinkedIn Page
Past Jobs: Manager, Derivative Reporting at RBC

Dave Oakden
Managing Director at OSFI
LinkedIn Page
Past Jobs: Senior Vice President at Zurich Canada

Tom Belyk
Manager OSFI
LinkedIn Page
Past Jobs: Director Canadian Commercial Credit at Scotiabank

Leslaw Skoczylas*
Senior Supervisor at Office of the Superintendent of Financial Institutions of Canada
LinkedIn Page
Past Jobs: Research Analyst at Bank for International Settlements

Don’t forget that it was OSFI who raised the LTV limit in 2007.

#101 AprilNewwest on 09.17.12 at 11:11 am

#72-$$$BPOE#1
What a silly dope!

#102 Victoria Tea Party on 09.17.12 at 11:26 am

#69 …Vlad

Yes, I noticed that 1992 piece and found it most instructive and it definitely leads one to suspect the latest “7 month” to a Persian home-made glass-makin’ machine, doesn’t it?

It may be a lie, or not. But wars have been started on thinner soup that a basic bald-faced lie as you well know.

On this issue, I support Mr. Obama’s reticence to chuck all the family silverware into whatever action plan “Bibi” demands. the president is a voice of reason in this instance. We must remember that the Israel lobby in the US is beyond powerful and for good reason: its members see themselves as a bulwark against existential threats against the Jewish state. And they bribe US politicians accordingly.

Regardless of what you may think of that society and the rest of the Middle East “players”, it is a fearsome brew at the best of times.

And these are NOT the best of times right now.

Would it be that we’d only have to worry about Uncle Ben’s stack of solid lies about the economic health of the “Empire.”

More stats out today from the state of New York point to an economic existential threat to us on this continent: we’re back into recession. I thought we were all still in the depression that began in 2007!

Thanks, Vlad for that piece from the False Flag chappie. Interesting.

Meanwhile…

ON A REAL ESTATE MATTER IN VICTORIA

Here is a quote from Victoria House Hunt which I alluded to overnight:

“…It’s ugly out there. If you were trying to sell your house last month, your agent probably told you things would pick up after the Labour Day long weekend. With just under 10 unit sales per day thus far, it’s safe to say the “picking up” is closer to dropping off…”

Check out the “news” on BC real estate of various MSM sites this day. Garth is right!

#103 Non-Naked Swimmer on 09.17.12 at 12:04 pm

#91 Johny D

“It is different this time… and all the people who are $500,000 in debt at least have nice houses and cars to show for it.”

Johny, Johny, Johny. Patience is a virtue cowboy. What these losers have is the illusion of wealth and the day will come when this mother of all credit bubbles stops and voila, as Warren Buffett is fond of saying, we will see who was swimming naked. The day is approaching Johny, get out your popcorn. In the meantime heed the words of the bearded sage who tirelessly blogs day after day to save the skins of indebted Canadians.

#104 In Garth Almighty not God we Trust on 09.17.12 at 12:13 pm

#94 Mike

“I love your blog, but in your previous post you said that options traders are worse than drug dealers. result in ruin. Why would someone who gambles with options be worse than a drug dealer????A rare miss by Garth?”

A rare miss by the all knowing, all wise, all seeing, bearded mystic oracle, soothsaying wonder from the east, former minister of national revenus, denouncer of parliamentarian peckerheads and peckerettes, financial prognosticator without equal, Amazon bathed and protected, Harley riding bad ass, fearless protector of the little guy and gal, compassionate and sympathic to a fault, lone voice of financial reason crying out in the HELOC infested wasteland of Canada and all round jolly good fellow? Are you kidding me cowboy???? Get with the program and remember when the bearded sage makes a pronouncement, it is without question or reservation, true! Sheeeesh!

#105 Silver on 09.17.12 at 12:17 pm

Drove by a bunch of new condo’s built in the last 2 years over the weekend near commercial st. in vancouver…

fun watching the mold grow on the seams of these new High Grade construction jobs…

lots of new shit being built… sure not worth $500 a square foot…

if the assessment is below purchase value… its because no one who is financing this shit… believes it is actually worth that much in the market.

Second mortgage soon anyone…

Silver

#106 another gem from the pigg! on 09.17.12 at 12:33 pm

Toronto Star:

“While average Vancouver house price was down almost 7 per cent in August over a year ago to $725,086, it was up about 3 per cent in August over July when adjusted for seasonal fluctuations.”

http://www.thestar.com/business/article/1257715–canadian-real-estate-association-cuts-home-sales-forecast-for-this-year-and-next

#107 Hoof - Hearted on 09.17.12 at 12:36 pm

#89 maxx on 09.17.12 at 9:16 am

UPDATE FROM VANCOUVER

My friend owns a small real estate office in BC…just last week he had 4 HAM buyers walk from downpayment days before closing…HAM is getting scared…another place 2M+ has sold and NOT closed 3 times this summer…something is going on…the market seems to have cooled…yet MSM tells us it is time to buy…w
=====================================

Interesting keep us posted.

I kind of expected that. I saw deals close at the peak…and wondered if any would bail.

I think this will become a major trend, like what would you do if you bought something with a down payment and the price went underwater.

#108 Roial1 on 09.17.12 at 1:01 pm

#4Canadian on 09.16.12 at 9:09 pm

yet global temperatures are like the markets……still about what they were a decade ago

I hope you do not try to tell that to the starving polar bears. THEY would know what to do to a warming denier.

http://news.google.ca/news/url?sr=1&ct2=ca%2F1_0_s_1_1_a&sa=t&usg=AFQjCNHuwdpqqNVxB3E1CXTCarcwTKfKTQ&cid=26389775616868&url=http%3A%2F%2Fwww.sacbee.com%2F2012%2F09%2F17%2F4826842%2Fone-way-to-protect-the-melting.html&ei=wlZXUKi2L6KriALG-gE&rt=SECTION&vm=STANDARD&bvm=section&did=-6531510367125650413&sid=top-stories

This is a very long link but I did not know how to load a shorter one.

#109 EIT on 09.17.12 at 1:13 pm

I think the people’s objections to our current state of affairs, i.e. doomers, gloomers, occupy & others, is due to the level of criminality found in today’s markets. There is simply too many cases of fraudulent activities occurring in certain markets and a lack of legal recourse provided by our governments. Let’s examine the Savings and Loans crisis, and then note the absence of arrests made during our own 2008 crisis. “Where’s the money sir?” “Well, I simply don’t recall!”. End of discussion. No Investigation. Next Please. “All” these people are looking for injustice, whether they realize it or not, to stamp it out. People can even call money printing immoral. They just don’t understand it’s for the public good. Right ;)

#110 Roial1 on 09.17.12 at 1:21 pm

#48Old Man on 09.16.12 at 10:46 pm

I have seen them dump Real Estate on the books at huge discounts to make the problem disappear, and that is government for you; this could be their loss, and your gain – think about it.

Yes, think about it.

YOU pay taxes too, right????

#111 eagle eyes on 09.17.12 at 1:28 pm

#89 maxx

I heard from a realtor that the deposit is not automatically given to the Seller when these deals don’t close. It is a long and lengthy process who gets claim to the deposit. As well, it is really difficult to sue the Buyer for any losses that is suffered because HAM cannot be tracked. Walking away from a deposit will be much more common in the coming months.

#112 Alex N Calgary on 09.17.12 at 1:49 pm

These people like most I assume, sold house, made money, reinvested as a big downpayment on a much more expensive, higher risk house. 200k will be wiped out, and more, middle class wealth decimated, jobs lost, house poor, life miserable, banks win.

Everyone has this concept where they live is special, special resources, special recession proof, its kind of like when I was a cable guy. Nobody knew the world outside their own, so everytime someone asked me if I saw the Cable Guy movie I’d tell them this.

66% of people have asked me if I have seen the cable guy movie and I tell 100% of them that the statistic is that 66% of people have asked me that out of 10,000people i’ve visited, so thats 6,600 people have thought they were special and asked if I’d seen the movie, not so special as you thought eh?

Also smoking man is rediculous, just delete his crap, it never has anything usefull other then crazy rantings and murmerings in some language I don’t understand.

#113 kreditanstalt on 09.17.12 at 2:04 pm

“The problem is not politicians and central bankers trying to rescue the economy from deflation.”

That’s where you will be wrong. And it DOESN’T mean the economy will go to hell in a handbasket suddenly or soon.

I’ll put it simply. All it means is that, over time, those with no protection from confiscation of income and assets via government taxation or central bank inflation will face a lower standard of living.

I think GOLD is the best way to fight back against central planning. As Alan Greenspan said, ” In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.”

You will disagree, and disagree too that gold is money. But what’s the point of grubbing after investment yield denominated in a depreciating asset – cash?

But I’m fairly sure you can agree that the most secure way to protect oneself from the central planners and wealth redistributors is to have the majority of your assets in that asset class which is in most limited supply and is most insensitive in terms of price/demand…

#114 Spiltbongwater on 09.17.12 at 2:09 pm

Is there an MLS listing for the basement for sale? How does the title work on purchasing a basement suite. Never have heard of that being done.

#115 jess on 09.17.12 at 2:11 pm

100 Canadian Watchdog
lol … ” it was the UK’s light (touch) regulation that had enabled RBS to grow into a world beating business.”
or this branded phrase that “our culture and values are our first and last line of defense.”

these voices seem to have retired.

======
http://www.thecornerhouse.org.uk/resource/crumbling-wall-money

#116 Rabbit-One on 09.17.12 at 2:13 pm

#89 maxx
I heard similar story from frustrated realtor.
His client’s sale deal was originally July.
High-end condominimum in Yaletown Vancouver.
Sale price was about $3MM.
There was no subject “financing” since deal is by cash.
For some reason, closing date was postponed twice so far, now new closing date in in Nov(!).
Reason from overseas buyer, difficulties on mortgage financing.

#117 Ralph Cramdown on 09.17.12 at 2:23 pm

I saw deals close at the peak…and wondered if any would bail.

I think this will become a major trend, like what would you do if you bought something with a down payment and the price went underwater.

It’s important to note that, unless you’ve written something different into your agreement of purchase and sale, you don’t JUST lose the deposit if you walk from a deal. If you agree to buy at $2mm, walk, and the buyer subsequently only gets $1.6mm for it after a good faith effort, he can sue you for $400k. If your last known address is a P.O. box in Guangzhou, he might have difficulty collecting, but the point stands.

#118 robert on 09.17.12 at 2:45 pm

The Banks new appraisal policy is and will continue to become the catalyst behind collapsed deals. As prices adjust note i didnot say collapse and as more property owners accept the growing number of lowball offers, the basis for LTVR will be negatively impacted. Its no longer just about finding a Greater Fool to buy into the insanity as the Banks have notably tightened and this Greater Fool will have to find a willing bank who have their own idea of values. The rubber hit the road when Banks decided overnight that RE was a Tier Three Asset. Repeat after me, 65 cents on the dollar..

#119 NewWorldPartyDotOrg on 09.17.12 at 3:17 pm

The Housing Bubble is only one of the ways the government and baby boomers have screwed the young.

Screwing the Young, Over and Over Again
http://www.newworldparty.org/2012/09/screwing-young-over-and-over-again.html

#120 TRT on 09.17.12 at 3:25 pm

CAW

They threw the young under the bus!! TWO-TIER wages and benefits. New Hires get much less so the Boomers can keep it all. Sickening Boomers…just sickening!

and the 30 years (screw nuts) and your out (full pension) has got to come to an end.. enough is enough!

#121 Marina on 09.17.12 at 3:30 pm

Last Sat went for Open House in central Etobicoke – about 1200 sqf, very old house is being sold for $ 829K, the price just reduced to $ 809K on the weekend. Still no takers.

#122 Canadian Watchdog on 09.17.12 at 3:37 pm

#115 jess

Derivatives is just an amplification of the root cause, which is control fraud. Little does everyone know (even Garth) that banks pledge client assets to borrow and bet in OTC exchanges. Link

We’re beyond a crisis at this point. Everything else is just denial.

#123 Victoria Tea Party on 09.17.12 at 3:49 pm

HOW HIGH FROM HERE?

One of Zero Hedge’s contributor’s, Phoenix Capital, poses an important question, issue, whatever.

Read this please:

“…The Fed has never been good at anticipating the consequences of its actions (so we) have to ask ourselves, “has the Fed gone too far this time in its efforts to boost stock prices?”

Our initial view is “yes.” Stocks were already at four-year highs before QE 3 sent them soaring. Our primary concern now is that by announcing QE 3 at this time, the Fed has removed the primary driver of stock prices: the anticipation of more Fed intervention…

…Barring a systemic crisis or the collapse of a major bank, the Fed’s hands are now tied due to it having an ongoing intervention in place.

…Our view is that it is quite possible the Fed has played its hand too strongly…to maintain market stability via intervention. Given that stocks were already decoupled from the underlying economic realities, this has made the market highly vulnerable to a sharp correction.

And then of course, there is the coming inflationary storm to consider.”

As we ponder markets there was more “trouble” by the Occupy Wall Street anarchists this morning. Lots of arrests. This street theatre has legs.

SHORE LEAVE CANCELLED

Meanwhile, it looks like the final pieces in America’s possible pending intervention in the Persian Gulf are falling into place for some sometime in early October?

Once again to Zero Hedge:

“Up until now, the LHD 7 Iwo Jima Big-Deck Amphibious Warfare ship was all alone in the Arabian Sea, patiently awaiting orders…This is no longer the case: launching today…for a brand new 7 month engagement, is …the amphibious assault ship, the USS Peleliu (4000 marines)… amphibious transport dock USS Green Bay…dock landing ship USS Rushmore…Marine Corps’ 15th Marine Expeditionary Unit…Fleet Surgical Team 1, Helicopter Sea Combat Squadron 23, Assault Craft Units 1 and 5, and Beach Master Unit 1…CVN 74 Stennis aircraft carrier…

In other words, in about 2 weeks, the Middle East will be the focal point of 3 aircraft carriers, 2 amphibious assault forces, and who knows how many “developed” world armadas, all hell bent on securing that one extra bit of Middle East oil, under the guise of spreading democracy and liberating the local people who “hate America’s for its freedom.”

More tea, please.

#124 Deb on 09.17.12 at 3:54 pm

#98 Toon Town Boomer

I sure would like to hear you speak and meet you in person and discuss investing.
Will you ever come to Saskatoon?

With the pelicans. — Garth

—————————————————————-

Does that mean that March-April of 2013 is a possibility? According to the Meewasin Pelican Watch, the pelicans landed at the Saskatoon weir on April 4, 2012 at 7:00 a.m.

#125 John on 09.17.12 at 4:13 pm

Gladiator wrote:

“@85 John: I am already offering value to the community and society by paying taxes, volunteering and donating to local charities. By buying a house, I’ll contribute to the economy several tens of thousands of dollars (renos, furniture, etc.). In your words, renters offer more “value” than owners? Please correct me if I didn’t understand your opinion.
btw, the Annex is not considered suburban and the drop in value won’t be that bad compared to suburbs.”
—–
Yes you are right…I’m looking to expand the context to a much bigger and far more relevant context. We’re in a really strong crisis right now. A crisis of value ( not including “values” in that…everyone decides that privately).

The “economy” we’ve got is kind of like a spilled coke beside the pool in July. Ants have a heyday with that…but rarely is it about ecosystemic sustainability.

Housing went to the sky because international
( not Canadian) banking cartels sold cheap money to a population which had outsourced it’s manufacturing to slave populations. The remaining credit and “service economy” is for making over-consumption efficient. Technology evolution fits into that..for that.

Goldman Sachs bankers et al spiked glucose into the system, and wanted ignorant consumers. Property virgins. HELOC compulsion…debt debt debt. Glucose. Banks and the “club” suck the system dry…and will leave it dry. Meanwhile the political class sucks up and tries to get a few buckets of gravy off the train.

“Annex” is a meaningless value proposition when Canadians are unplugged from a longer-term productive strategy..and all tangled up in a world ponzi scheme. Not only that, Canada is a completely inactive democracy( that’s how Goldman Sachs et al took over the Canadian system…look into the big Canadian banks “renters” put their “money into).

In other words, you’d have to plug into and take forward the ponzi for 30 years for your idea to make sense. The ponzi isn’t going forward 30 years. Saying it will is nonsense and a very understandable hideout…but a hideout of “anti-value” nonetheless.

Answers have to start from accepting what’s what. A “renter” vs. “owner” is just a part of the story. I’m suggesting looking at what’s actually up.

Keep it simple. Are we in a world ponzi scheme or not. We need to admit that we are. Casinos don’t set up operations to offer value. Clients who play in them don’t either.

That’s not going to work…a society must work off of value to grow and sustain itself. It’s not rocket science.

Too much brainpower given to technocrats and spin doctors with an agenda. It’s a bunch of crap.

#126 DON on 09.17.12 at 4:14 pm

#64 Old Man on 09.17.12 at 12:10 am #62 DON – you just said it all that your wife was on your side, as a good woman is hard to fine, so hang in there.

Thanks Old Man, it is a pleasure reading your posts and the critical thinking and logic displayed. I was a teen in the mid 80’s and remember the chaos, the high interest rates and the lessons given by my parents about home ownership.

Now, I surround my life with critical thinking and am surprised to see those in their 20’s and 30’s defying logic without the decency to check the facts. I have two siblings in their early 30’s who listen to others rather than their trusted brother, those generations trust the talking heads “experts” even though my logic is proving to be right. I shouldn’t be too hard on my siblings at least they are waiting to buy as they are now seeing what I have been preaching for the last 5 years.

For me, I will wait to buy a old house on acreage, and fix it up as I have both means and ability and so does my wife. There was recently a show on CBC about the “experts” and most of there claims are incorrect.

As for the young guy on here too impatient to wait as his young banker friend is about to jump in. Are you sure you are not a realtor, with backwards logic? Life is longer than your 20’s and early 30’s and most of you younger folks are just starting to realize who you are and how the world works at those ages. WHY would you jump off a cliff when you do not have to. University educations were supposed to teach critical thinking and now we have young people who barely know how to reason and change their own car oil. But if you must buy now, then go ahead and buy and see what that gets you. I dare you. At least you should perform the what if analysis. What if Garth is correct, you’ll be paying high premiums for 30 years and your property will never reflect the value you paid for it.

#127 kreditanstalt on 09.17.12 at 4:16 pm

#120 TRT…all you have to do is NOT BUY THEIR PRODUCTS.

#128 daystar on 09.17.12 at 4:17 pm

#21 Naga on 09.16.12 at 9:44 pm

My oh my, you managed to run ALL of us blog dogs down in your very first line with the mere wave of a hand. “You just won a free membership into the “we belittle others to build ourselves up” club! Now, doesn’t that just beat all.

Defined benefit pension plans (don’t worry about your sloppy definition on this public site, I’ve got your back for their sake):

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

… carry the risk of your employer not remaining solvent. Ask the former employees of RIM or Nortel why this is important. Sure, some DB plans are sustainable… and some will never be and most will never see it coming.

What appears to me that you fail to understand (besides the importance of manners) is that a true financial planner doesn’t gamble with other people’s money. Some of us will gamble and load all our accumulated wealth into one asset, be it a house or a stock or gold or even an education and for some of us, this worked in the past, present and will so in the future but but for some of us, its led us or will lead us to sure ruin. So sure, we can gamble and add a zero or go sideways or go broke loading up on one asset, thats our individual discretion as many do and some will later pay the price for, especially buyers of RE these last few years but a true FP doesn’t gamble with other people’s money or future. Thats why they are so valuable in this world because most will mitigate risk and invest conservatively when their clients either can’t or won’t. Not so conservatively that FP’s can’t meet inflation with a little extra each year but conservatively enough so that we don’t go steeply backwards in market downturns.

Its called wealth preservation with modest growth over realistic timelines. Its not sexy or leads to a sizzling boom/bust cocktail story but it does lead to a comfortable retirement and far less stress along the way for those who don’t like the sweat that comes with… gambling. (like me :)

Getting back to DB plans, the Ontario teachers Pension is an example of a DB plan that isn’t self sustaining. There are plenty of other examples like it, albeit, much smaller ones and there, like I’ve said before, are employers that simply won’t be around 5 years from now so what does a good FP do, does he/she gamble with the unknown future of their clients employers state of well being and questionable judgement calls or encourage their clients to use leverage for investments? Or does he/she preserve and build on wealth with investments that are safe but offer more realistic returns over the long haul.

You answer your own questions. Low interest rates (for 3 more years now out of the U.S. fed), illiquid, some not self sustaining, sure most DB plans can be self sustaining but some aren’t because they effect the bottom line and I’ve added a couple you haven’t addressed. Some employers go broke and the competition DB pensions face with other investment plans cannot be ignored but the biggest flaw I can see you make (besides encourage pension plan models to take on leverage) is that you are looking for a holy grail DB plan that doesn’t flex with changing market dynamics.

Your plan to have a mortgage free home by 55, doesn’t that sound great readers? Tell us more, its obviously so easy and achievable with today’s bloated bubble cresting valuations in Canada. Great if your a seller and started that plan 7 to 17 years ago. Not so great if you’re a buyer in today’s market. By all means, please bless us with the details of how 25% investment in a house in today’s market will lead to profit in a market correction tomarrow and higher rates MBS’s pose on the horizon thereafter as CMHC credit dries up. Please explain to us why you even believe that the vast majority have the accumulated wealth in their portfolios to wit, they can buy a house and it only soaks up 25% of their wealth and/or why taking on extreme leverage to do so in a market correction poses no serious risk. We’re all ears.

I have one last suggestion (besides learn some manners and show some respect if you truly want to be above it all). Read Garth’s archive posts. His plan is already there.

#129 Tony on 09.17.12 at 4:18 pm

Gross, the location for the GT speaking engagement is in Miserablesauga? Yikes! I will have to withdraw, too far of a TTC/Mississauga Transit commute.

Garth, how do I do this? Couldn’t find any details on the generic e-mail or website

Shall I pick you up? — Garth

#130 Canadian Watchdog on 09.17.12 at 4:22 pm

Minister Toews still pushing online spying bill C-30, ignoring due process and police resourcing http://openmedia.ca/blog/minister-toews-still-pushing-online-spying-bill-c-30-ignoring-due-process-and-police-resourcing

#131 Bigrider on 09.17.12 at 4:37 pm

#12 Guido.

No way in hell you could be anything but an Italian.

Real estate always goes up and it’s always the best investment at anytime, right??

Guido’s type of thought process ( however limited) is endemic to my group of people from which I am proud to be of heritage, but whose time has come to learn that RE is not ” Gods chosen asset class “.

#132 DAFFY DUCK on 09.17.12 at 4:38 pm

#58 TRT on 09.16.12 at 11:32 pm Real estate in Vancouver will probably keep going up. After all, it has defied logic for almost a decade now. i went in head first years ago…totally scared…always thinking that the market might collapse.

It didn’t. In the meantime, its almost paid off and I have it rezoned and ready to go for multi-unit residential townhomes. During this scary time, I have hedged against a RE collapse. So now, i don’t care whether there is a collapse or not. Oh, btw in my 30′s.

The only thing IMO that makes sense why RE prices went up and continue to go up is International migration. ALL my friends were born in another country! Take that for what you think its worth.

I don’t expect anybody to believe in my thesis. However, it should be considered if you are bewildered about what has happened in the last 10 years.
********************************

Really. Acutally I am happy for you. But the last ten years in BC has been riddled by politicians whose claim to fame was realtor/developer. And yes the immigration will help certain areas, and what about the drug culture in Van. Lost of grow houses in nice areas. Let’s also consider that the blind have been leading the blind and that this is a done deal. What about the largest economy and their real estate or the second largest also deflating. Nothing like a balanced opinion or not analyzing the years before you entered your awarness stage. This was fueled by a mass reitirment boom, that’s how this was started back in the late 90’s. Geezus, nothing like taking a part of history and projecting into the future. IF PRICES KEEP ON RISING WHO ON MASS WILL BE ABLE TO AFFORD IN ORDER TO FUEL THE YOY INCREASES. Please let me know your profession so I can avoid doing business with such logic.

Garth, I may have to start siding with the doomers, as our education systems seems to be failing many that or your site in now being over run with realtors who have nothing to do. A bit of both i am sure.

#133 Tired of Saskatoon on 09.17.12 at 4:41 pm

Plenty of time for people here in Saskatoon to bask themselves on how great they are in comparison on the rest of the country.

I was planning to move to BC in the future and I told some of my colleagues about my plan. They told me that Sk is way better because this place has more sunlight. Of course when it comes to talk about the RESOURCES they speak that they think Saskatoon/Saskatchewan is the Center of the Entire Galaxy. I’m getting sick of people tryin’ to justify this stupid housing prices to the BOOM because this is not a BOOM but a credit bubble all of my friends who bought houses has cash back mortgages and it was stupid because the majority of them are earning 150K /year and they don’t have enough saving even for a 5% down payment.

#134 Smoking Man on 09.17.12 at 4:49 pm

#123 Victoria

Don’t you wish you went long crude when I called it. Cancel shore leave.

Crude down a bit today good buying op

#135 Tony on 09.17.12 at 5:06 pm

The next Yahoo… Rona.

Today Lowe’s got a clue… why buy a company destined to go bankrupt? Like i said before anyone who shorted Rona hold onto your short position and anyone who got short on the Lowe’s announcement which the whole world knew would never take place kudos and spend your profits wisely.

#136 Ken R on 09.17.12 at 5:14 pm

#119 NewWorldPartyDotOrg on 09.17.12 at 3:17 pm
#120 TRT on 09.17.12 at 3:25 pm

Don’t get too excited that the kids will forever be screwed by the boomers. There will come along a charismatic young politician that will mobilize the youth and get elected. The first order of business will be to slash retirement and health benefits for the elderly.

The youth shall rise and I hope I’m alive to see it.

#137 Suede on 09.17.12 at 5:32 pm

#133 tired of saskatoon

People in vancouver don’t even know what the capital of saskatchewan is without the help of wikipedia. Until that time, no one is flocking there. You’re safe from crazies for now.

#138 truth hammer on 09.17.12 at 5:49 pm

The supposed ‘turn’ in the US housing market is proving to be a sham….coincident to the ‘rise’ in proximity to a tightly contested election…..anyone who believes that real estate has bottomed is a dupe…..being duped…has been duped and is just plain dupey.

http://www.theburningplatform.com/?p=40366

“The reality of the number of For Sale signs does not match the rhetoric coming from the NAR, government mouthpieces, CNBC pundits, and other housing recovery shills about record low inventory and home price increases.

The Federal Reserve/Wall Street/U.S. Treasury charade of foreclosure delaying tactics and selling thousands of properties in bulk to their crony capitalist buddies at a discount is designed to misinform the public. My local paper lists foreclosures in the community every Monday morning. In 2009 it would extend for four full pages. Today, it still extends four full pages. The fact that Wall Street bankers have criminally forged mortgage documents, people are living in houses for two years without making mortgage payments, and the Federal Government backing 97% of all mortgages while encouraging 3.5% down financing does not constitute a true housing recovery. Show me the housing recovery in these charts.”

The ‘recovery’ it seems is another creation of the ‘Obamanomics’ campaign being blasted out of a failed regimes desperate attempt to keep an undeserved hold on power.

Apparently…..Obama is a really nice guy……he’s just been a bad president.

I know that anecdotal stats have been ballyhooed on this site regarding the turn in the US housing market….but these statements don’t have a foot hold in reality when Alt-A’s are still building and foreclosures are more common than sales.

Look for a ‘real change’ or the facts to come out once electioneering is over. There are millions of homes being forclosed on…more than in all the sub primeday…and millions more lost in the paper shuffle as shadow inventory being traded back and forth to keep reality off the books for the time being..

#139 TurnerNation on 09.17.12 at 6:36 pm

The hotel’s bartender has been warned. For Smoking Man, a strict 6 drink limit . We don’t want him rushing the stage with a hug for “Gartho” or something…

#140 TurnerNation on 09.17.12 at 6:40 pm

Harper’s alma matter (UofC) is calling for GST changes/additions on financial transactions!?

Doesn’t sound very pro-business to me. Nor Conservative. Fool me once…

+++++++++++++++++++++++++++++++++++++++++++++++++++++
Report calls for changes to GST on financial services

Investment merits, not effective tax rates, should govern consumer choices

By IE Staff | September 14, 2012 11:40

A report published Friday challenges the way the Goods and Services Tax (GST) is applied to financial services such as mutual funds and insurance.

The report from the School of Public Policy, University of Calgary, finds serious flaws with the current application of the exemption-based approach applied to financial services.

Under the exemption approach no GST is levied on transactions designated exempt under the GST, nor is a financial institution able to recover the GST on inputs used to provide the good or service.

“When a financial institution is not able to recover GST on its purchases of inputs, the GST will be embedded in the price charged for those financial services,” write the report’s authors Ken McKenzie and Michael Firth. “This will be true for both consumer and business purchases of financial services.”

“Consumers should choose among various financial services — investing in GICs versus mutual funds, term versus whole life insurance, etc. — on the basis of their relevant merits, not because of differences in effective tax rates due to differential treatment under the GST,” they write.

McKenzie and Firth propose several tax reforms to rectify these issues. They recommend retaining the exemption-based approach, but offer up several ways in which it can be improved. One of these is the zero-rating of business-to-business transactions by allowing businesses to recover GST paid on inputs related to providing financial services. To accomplish this goal, a new system for determining recovery of GST by financial institutions will need to be created, including rules around attributable costs. A system for taxing imported supplies will also be needed.

They also recommend that all financial services be treated in a similar matter and taxed at the same effective rate so that consumers face a “level playing field between different types of financial services.”

#141 Willie on 09.17.12 at 6:44 pm

@ Alex N Calgary
#112

How you should really interpret that statistic is not 66% of people this they are special and ask you if you’ve seen the Cable Guy.

But rather, 66% of people assume from your profession you’re a loner weirdo and would rather have you discuss pop culture such as movies than start talking about your personal life or pry about theirs.

#142 Canadian Watchdog on 09.17.12 at 6:54 pm

#136 Ken R

“Don’t get too excited that the kids will forever be screwed by the boomers. ”

I don’t think so. Once the boomers start seeing their kids or grand children suffer they will revolt.

Students protest loss of extracurricular activities

Try telling a father his son can’t play sports or telling a mother her little girl isn’t having a prom and you’ll see which way the boomers start marching—right to Ottawa.

#143 Cory on 09.17.12 at 7:07 pm

How theeeee hell does a bank finance something like this?????? now people are buying basement suites??

#144 Form Man on 09.17.12 at 7:45 pm

#138 truthchallenged

Harper troll……

#145 salonist on 09.17.12 at 7:51 pm

“for rent”
http://business.financialpost.com/2012/09/14/why-its-better-to-rent-than-buy/

sm’s basement,son is moving out.
now that would be a landlord.
invite you onto the deck to look for ufo’s and snake eye a 40.

#146 jess on 09.17.12 at 8:04 pm

Exclusive: Ghost warehouse stocks haunt China’s steel sector

http://www.reuters.com/article/2012/09/16/us-china-steel-warehouse-idUSBRE88F0EJ20120916

#147 Smoking Man on 09.17.12 at 8:29 pm

#112 Alex N Calgary on 09.17.12 at 1:49 pm
Also smoking man is rediculous, just delete his crap, it never has anything usefull other then crazy rantings and murmerings in some language I don’t understand.
…………………………………………………………………

So I take it you won’t be laying down 30 bucks for my book. No spelling or gramor fixes. Its going to be pure art.

Lets face guys, gals. Many of you will meet me and other dogs in the bar.

Yet only a few of you will admit it on here, even though you use an made up name.

Reminds me when having breakfast with the family and a copy of the Toronto sun is kicking around. You’re dying to check out the sunshine girl, but you dare not stay on that page for more than a split second, frighted of being judged.

I so know people.

#148 Nonno Nicola, Real Estate Investor Extraordinaire on 09.17.12 at 8:44 pm

#131 Bigga Rider

“Guido’s type of thought process ( however limited) is endemic to my group of people from which I am proud to be of heritage, but whose time has come to learn that RE is not ” Gods chosen asset class “.

Iya no know a vat I ama gonna do wid ya Bigga Rider. You tink you so a smarta wid da portfolio bilanciato which hasa mada you almost nothing in da last decada while your paesani, dey maka millioni wid da real estata. Da GTA, it gonna go from a 6 millioni gente to 8 millioni gente by da yeara 2032 when you gonna be an old farta like Nonno. You knowa where all dose people gonna liva Bigga Rider? Not in da portfolio bilanciato but in da real estata. Capice testa dura?? Data mangia caka Turnero, he keepa saying da real estate in da GTA gonna go downa and Nonno, he keep a making da moneta wid da real estata. Stop being a contrario Bigga Rider and join your paesani in making loadsa moneta in da real estata! Nonno gotta go causa I am making da salsa in da garageo.

#149 torontorocks on 09.17.12 at 8:57 pm

#139 or pitching a tentpole.

Smoking Man, and all, if I see you guys there I will be the first to admit I saw you all there. I’m looking forward to it.

#150 TurnerNation on 09.17.12 at 9:08 pm

Err Smoking man surely you are familar with the nearby “Airport Strip”?

#151 Smoking Man on 09.17.12 at 9:40 pm

#150 TurnerNation on 09.17.12 at 9:08 pm

Very Familiar. Place sucks. Million Dollar much better, don’t even think AS is still in business.

The Rub and shakes are killing that industry. Lets face a much better product.

#152 Don't read his post on 09.17.12 at 9:51 pm

I can’t believe I’m actually going to come all the way from stouffville to listen to what I already know……
Smoking man you must reveal yourself I really want to throw a shoe at you.

#153 TRT on 09.17.12 at 10:14 pm

DAFFY DUCK said

“IF PRICES KEEP ON RISING WHO ON MASS WILL BE ABLE TO AFFORD IN ORDER TO FUEL THE YOY INCREASES.”

Very credible point indeed. Don’t get me wrong, I’m shocked at prices just like you are. Fundamentals just don’t support them. Having said that, I wish to impart an international perspective to RE.

In Northern India, a worker (educated or not) will never be able to afford a plot of land to build a house. Prices have roughly gone up about 1500% in the last 15 years or so (yes 15X). This is even if land prices collapse 50%.

There are no mortgages for most properties in India. Hence, that is why i don’t put the blame squarely on loose credit as Junius does. There was no easy credit there but prices sot up anyways.

It seems there is too much money (in hands of few) chasing artificially limited real estate. In suburbs of vancouver, it is the owners swapping houses with each other…acting like they are a new upper class. Witness that a tear down is $500,000 in Surrey while you can get a mini-mansion for about $800,000. Very small difference…so owners are playing musical chairs with each other and don’t care as the market seems saturated.

BTW, not a realtor. Like numbers… 145 WAIS Verb

#154 Smoking Man on 09.17.12 at 10:22 pm

#152 Don’t read his post on 09.17.12 at 9:51 pm

On the floor LMFAO a shoe ? got a visual bahahahahaha

#155 v on 09.17.12 at 10:24 pm

LOL @#67 =)

#156 Randman on 09.17.12 at 11:19 pm

Al Gore DID NOT invent the internet…..

He did however..invent all these things……

intercede intercept Intercity interdict interests
interface interfere interfuse interject interlace
interlard interlink interlock interlope interlude
interment intermesh interplay interpose interpret
interrupt intersect intervene interview

#157 DonDWest on 09.18.12 at 1:01 am

#153 TRT

We call this feudalism, yet I’ve been called communist for speaking out against it many times by right-wing nutcases. People generating wealth via land/houses is an old school feudal concept that’s completely disgusting as success depends completely on the inheritance bestowed by your parents. The audacity that many right-wing baby boomers have to call this disgusting practice capitalism is enough to make me puke.

Wealth should be generated by hard work, talent, innovation, etc. not by being the “lucky house generation.” I’m tired of lazy baby boomers accusing the young of being entitled and lazy when boomers gained all their money just sleeping in their living room. Young people work TWICE as hard as any boomer; I’ve seen this first hand, yet where’s the incentive? The baby boomers make more money from their house than I ever could actually working. . .

Act as though we work, as though there is incentive. . . That’s the motto for my generation! Thanks boomers!

#158 Don't read his post on 09.18.12 at 8:13 am

Just like George W. it flew right past him
Lol

#159 Toronto S on 09.18.12 at 1:55 pm

#21 Naga “Suggest you redirect your talents to the topic of how to create a system for most Canadians to participate in a private pension system that is more in line with a DB plan.”

There is a group of pension lawyers, actuaries, and other professionals in TO that has a business plan and been trying to set something like this up for several years now. Garth would be an interesting addition to that group!