The outcry

Pity all the poor people in Canada who make $17 an hour (the average hourly wage is $23).

“There is an outcry by people making between $22,000 to $55,000 a year who do not qualify to buy a lot out there, but they want a piece of the action. They want their own home, rather than renting all their life,” says a Surrey, BC developer who wants everyone to enjoy mortgage debt, condo fees, property taxes and private space. But not much of it. Development company Tier Sher plans to build Canada’s weensiest little condos – 56 ‘micro suites’ starting at 290 square feet.

By comparison, the standard two-car garage is 624 square feet. The average garden shed is 144 square feet. A shipping container is 160 square feet. A school bus is 240 square feet. But to the delusionals running the Greater Vancouver Homebuilders Association, this is a great idea. Micro suites will appeal to “first-time homebuyers, investors and even some empty-nesters.” Not to mention the empty-headed.

Prices start at $110,000. Downpayments are $6,000. Monthly payments will be $650, plus fees and taxes. And the development is a trek away from a train that’s almost at the terminus of a long line to downtown. This is Surrey, after all. As Brampton is to Toronto.

Fool ideas like this, in a country which is largely empty, along with the fools who will buy these units, just because they’re cheap, show we’re at the end. Middle-income people were trapped into real estate entitlement long ago, made to feel that renting is shameful, transient and second-class. Now legions of them in cities like Vancouver risk seeing their equity dribble away, their homes grow unsalable and their freedom nipped.

So with home ownership at an astonishing 70%, it’s only natural developers would turn to Wal-Mart greeters, grocery store shopping-cart jockeys, parking lot attendants and financial advisors as the next victim class. They, too, should buy places with 95% leverage at interest rates which will only rise in the future, and monthly costs they can’t really control. All for the equivalent of two garden sheds which contain one room and no tub.

Speaking of Vancouver, it looks like sales in October will be the second-lowest since the mid-1990s. Values are falling on the Westside and in Richmond, while sellers in North and West Van try clinging to prices no buyers are willing to pay. Blood’s seeping into the water now, and the sharks know it. The year will close out with the greatest number of homes sitting unsold since 2008. Next year could start a feeding frenzy.

“We are in the middle of it now and there is no turning this thing around for a while,” says a man who should know. “It was interesting to report the change in direction downward that actually occurred starting 12 months ago and then really accelerated in the Spring – what we have to watch now is to see if the feds change course given the big slowdown in volumes and clearly the fact that the  industry is heavily lobbying.”

But F and the peckerettes aren’t backing down, unless we well and truly fall off a cliff in the spring of 2013. The odds of that happening are diminishing daily, as the US economy does exactly what this pathetic blog forecast a year ago – slowly, painfully, resurrects. Of the last 48 S&P companies to report earnings, 35 exceeded analysts’ expectations. Central banks have succeeded in stabilizing Europe. US employment numbers have shown gains for 41 months. Bidding wars in Phoenix have pretty much soaked up those thousands of bargain properties I suggested you sniff out last year, and the vultures have just descended on Atlanta.

Now US new housing starts, while still running 60% below the 2006 peak, have blown past estimates. New construction shot ahead 15% last month and houses are being built at the fastest pace since 2008. Building permits are ahead 12%. Overall, the American economy has picked up noticeably on the back of better jobs reports, stronger consumer spending and a surge in car sales.

There are years left in the recovery, of course, but anyone who tries telling you America will flop into depression or burn off its currency in hyper-inflation is flat wrong. If you have $110,000 to spend, then why would you put it into a rabbit warren in Surrey, instead of an always-rentable bungalow in Naples? (This one was worth $384,000 in 2006.)

The message here from 2010 remains. Buy America, sell Canada. There’s substantial risk in most of the Canadian real estate market, with some notable exceptions I will address in future posts. Meanwhile the US market has bounced off bottom, and is now in the earliest stages of a protracted recovery.

Personally, I think the Surrey building would make an excellent kennel.

237 comments ↓

#1 Ken on 10.17.12 at 9:51 pm

Will be interesting to see what finally happens. Garth, look up Professor Morgan Kelly, School of Economics, University College Dublin

He was you 6 years ago

#2 MD on 10.17.12 at 9:51 pm

I almost choked when i read 290 sqft pigeon nests and standard garage being 624 sqft.

#3 samiam on 10.17.12 at 9:53 pm

first!!!

#4 Saskatoon-Living on 10.17.12 at 9:55 pm

Great post Garth! Do you have the home sales number for S’toon in September???

#5 tow mater on 10.17.12 at 9:57 pm

Its amazing its difficult to spend $100k on a condo in florida or arizona. You could by 8 condo’s in one of these locations for 1 in Toronto or Vancouver. I know its not exacty a fair comparison but really somethings gotta give. On a positive note a family with 2 minimum wage earners in Florida or Arizona could buy a condo. It would take a family of about 8 minimum wage earners to afford a condo in Toronto or Vancouver.

#6 claudius emperor on 10.17.12 at 10:01 pm

Buy spain at the bottom. 5-6 years from now.

with all due respect:
The US crises is far from over.
they still need to address:
1. deficit and debt out of control
2. demographics costs
3. lack of jobs

Yes, this time is different and there would be no recovery to the old good world we are so used to.

what we see on the stock market is reaction to money printing and results of deficit spending.

highly recomend the book: Endgame: The end of the credit cupercycle.

http://books.google.ca/books/about/Endgame.html?id=amaQ6ZNBpYoC&redir_esc=y

#7 Eager beaver on 10.17.12 at 10:01 pm

Garth when is the next book, the beast is ready for his next meal!

#8 Ex-Cowtown on 10.17.12 at 10:02 pm

I remain a bit skeptical about the nascent US housing recovery. There is so much blatant government interference in the system that I’m not sure that it’s much more than a dead cat bounce.

Unemployment stats are as goofy as the CREA’s numbers and the massive overhang of foreclosed properties is still out there.

Even Nortel rallied on the way down.

#9 The Gastroesophageal reflux disease wife on 10.17.12 at 10:07 pm

Wow, that is some top-notch photoshopping!

#10 City Slicker on 10.17.12 at 10:09 pm

Yep sounds like that QE to infinity is having some effect, plus some rigged numbers before the election is no coincidence either. Looks alright for now, like the space shuttle Challenger when it was taking off, but we know how that ended.
PS – those car sales will also show to be the next sub prime bubble.

#11 Weedeater on 10.17.12 at 10:11 pm

Wow! it never ceases to amaze me the stupidity of people. UBC students made a tiny shelter for homeless people not much smaller than those micro suites for $1,500 http://www.theepochtimes.com/n2/canada/vancouver-house-development-6131.html

I’m going to put some garden sheds on a flatbed truck and head to Vanouver. “Micro Garden Villas” I’ll call them. Drop them strategically around Stanley Park, charge 199,999 for each (paying for the spectacular view,eh?), and take the money and run.

#12 Deano on 10.17.12 at 10:14 pm

Livin’ in small spaces isn’t so bad….provided they’re not stuck on the 34th floor in some building in Surrey. I’m thinking a little cabin somewhere.

Having said that, I used to live in a 400 sq ft apartment. It was brilliantly designed, comfortable, plenty of storage, cheap and close to work. If I could go back there I would.

#13 FTP - First Time Poster on 10.17.12 at 10:17 pm

First bunned, then vilified, then scorned followed by mocked, taunted, heard, praised, thanked and finally proven correct.

The life & times of Garth Turner.

#14 Smoking Man on 10.17.12 at 10:20 pm

I hope this makes sense,

Neo-Citran Induced Post, first time doing it this way.

What is a constant recurring theme form the blog dogs on here is.
“Oh those dastardly banksters.”
“Oh those off shore tax haven evil corps.”
“Oh The Evil Elite.”

This is all complete malarkey.

Till I lost my mind I was a former member in good standing of all of the above.

You give them too much credit, most are complete idiots. They survive and prosper because they have such a grand pool of well-behaved slaves, who will sell themselves short and devote their lives to serve. That’s what your teacher, and probably your parents drummed into your hard drives thinking it was a good thing, it will help you.

Honesty, Work Ethic, Loyalty, Accountability, are key words to make slaves feel good about themselves.
I say learn to take, lie, and feel good about it. Associate giving without a huge payoff down the road is loser doom. Don’t Do it.

You bubble heads spend your time looking for dirt on the above evil, Banks, Govt, etc just so you can come on here and go, ha look, we got then now, hoping someone other than you does something about it. They won’t. Sell you’re to the Dark Side kids.

You should be spending your time sourcing the supplier list, and the customer list, figuring out what slaves to steal from present company or others. But you can’t, you feel terrible just thinking about such blasphemy. F-en Canadians.

The machine brain washed your parents and you. I am one of your only sources of real light. And that’s only because I went Kurtz.(Hearts of Darkness) Is that not funny or what. For what it matters I liked Darth Vader way more than Luke Skywalker.

Case and point, Conrad Black, a prolific writer, wizard of key stroke combinations, I bet some English teachers have a hard time trying to figure out what he says. But look what he does. He’s under investigation, and he gets caught on camera removing evidence. Idiot!!!!!!

If it was me plastered out of my mind, fall down drunk, I would never be so stupid. But the tax farm slaves think he’s such a smart guy, that’s how you’re trained to think.
His only valuable asset is the alpha male bully persona; he can intimidate anyone to carry out his wishes, (except for boxes) that’s why he lives on the bridal path.

So next time you want to bash a bank, a company, or any other Smoking Man, take a peak in the mirror and say to yourself, Am I all I can be?

I just told my NYC publisher to stick it where the sun don’t shine, Wants all the spelling mistakes and grammar fixed, That’s a big part of the entire lesson,(success by disobedience) she doesn’t see it, or have the nuts to do it. ( It’s just one chapter) I will self-publish f-it. No real loot in it for me anyway. How many of you would have turned down a deal like that?

Bullies
They have been here since the dawn of time, and will be here till the last man is standing. It’s nature.
That little girl that took her own precious young life is sad and troubling. We are all outraged so we have declared war on the bullies rather than the root cause of this tragic death. The Machine is so bloody good. Rather than empower the kids to stand up for themselves the machine wants to crush at an early age future threats to its power, and have weak slaves at the same time.
What really caused this tragedy was a low self-worth, a low self-esteem. An environmental variable that could have easily been changed if it was recognized or cared about.
I would not have missed it in a heartbeat.
Always empower your kids to love themselves first, teach them they are way above god, let them win some times, then, and only then nothing will ever get to them, they will slay the bullies on their own, and will inherit the courage to prosper later in life.

Just ask the 275 pound bully bouncer with missing teeth that picked on me at Barbarella in Ottawa last spring. I did a good job raising my kids.

Sht This Neo-C stuff anit bad :)<<<<<MO

#15 GTA Girl on 10.17.12 at 10:22 pm

Local real estate agents in north GTA are now taking to twitter to advertise listings.

It’s rather a waste of effort, as you’d have to follow them to see them.

Developers sales centers for new build developments have now resorted to tying balloons to all their signs. While their parking lots are empty.

Dear big-time developer,

advertising towns/semis on a former golf course in Vaughan. Your ads say its in Kleinburg…it’s not. Nashville, closer to Bolton/Brampton.

You advertise that a family can buy a townhouse starting at $475. You say this with excitement. As though this is a deal. Presently there are resale townhouses on hwy 7 between Pine Valley/Islington for sale for $360k. And they actually are on a transit line with hwy access.

You can put all the pretty water colors on your glossy pamphlets but the reality is your subdivision is on a very dicey piece of land, known for flooding, with a bog-like type of soil. It also has a large natural gas pipe.

Buyer beware.

#16 Chasicakes on 10.17.12 at 10:24 pm

I followed your advice Garth and dumped my YVR condo last year to buy home in Palm Springs on auction for less than 50 Grand. I would love a small condo here as long as it had room service and housekeeping in the city centre. I just love hotel living…Surrey just does not cut the mustard though.

#17 Brian on 10.17.12 at 10:27 pm

So what’s next Garth condos the size of coffins.. ? R.I.P. Condo owners of toronto & Vancouver :(

See you on the 23rd. I will be the guy with a big smile on my face because I took your advice and did not buy real estate in the last 2 year. It was a big fight to keep my wife from buying a home but now she’s seeing the cliff is very close… And she thanks you too

Thanks Garth :)

#18 Paully on 10.17.12 at 10:28 pm

$110,000 in Surrey? Bah!

Buy this Toronto gem: two bedroom, one bathroom at 320 Dixon Rd. for only, get this, $41,800!

Tonight there are seventeen units showing on MLS.ca in this complex for under $75,000.

#19 NKVD Black Raven on 10.17.12 at 10:29 pm

Barrack & Mitt purposefully aren’t talking debt ceiling and bringing it down with higher taxes. Which could put the U.S. back in recession.

#20 Canadian Watchdog on 10.17.12 at 10:29 pm

Agenda 21 making Reuters headline: Tea Party versus Agenda 21: Saving the U.S. or just irking it? (Go ahead Garth, bash it cause it’s tagged to the Tea Party)

“Agenda 21 is an elusive enemy that floats in and chokes you gradually,”
“Agenda 21 aims to undermine your property rights and force you” to live in cities
“Agenda 21 is nothing short of treason.”

All very true and well documented, so you better read what it is because the youth are being brainwashed to believe it’s socially acceptable to live in 290 sq.ft. condos and, that prices are value, not the physical asset.

It all stops when people say no. But that is why the government’s job is to import more people who will say ‘yes’ to living in cardboard boxes, which degrades our future way of life.

Agenda 21 Learn what it is. It’s important to your freedom and human rights.

#21 [email protected] on 10.17.12 at 10:31 pm

Micro lofts? Leave it to Surrey to move Walmart greeters and McJobbers into pseudo-affordable postage stamp condos. Question for investing since I bailed on some stocks peaking today – what’s the opinion on industrial REITs? Dundee (dir.un)put out a new offering and I’m getting tempted to it.

#22 Ralph Cramdown on 10.17.12 at 10:32 pm

I admit to a bit of envy. If I could slim my life down to a coffee machine, a laptop, a library card and a tabletop Zen rock garden, I could live in a wee pied-a-terre in the centre of it all (not Surrey, with all due respect) for cheap, cheap, cheap.

#23 kreditanstalt on 10.17.12 at 10:33 pm

“…people in Canada who make $17 an hour (the average hourly wage is $23).”

That’s a Frankennumber.

If you take out everyone who is looking for a job, everyone who has given up looking everyone avoiding the labour market by staying in school, everyone employed by government, everone employed by some business dependent on government patronage, everyone working for a business that only exists because of some law (i.e., driving schools, tax advisors or pharmacists)…

…and you add to that involuntary part-timers and moonshiners, all those retired on CPP, all those on welfare, native Indians paid by taxpayers, and all those disabled…

…Canada has one SICK economy.

And of those full-time employed, you really maintain that $23.00 an hour is the average??

That’s a goddam fortune if it’s true…and shows why there may be JOBS, but precious few CAREERS anymore…

#24 Cristian on 10.17.12 at 10:33 pm

I have lived in BC for a few years, and often I feel I live in a land of idiots. They have all kind of lunatic ideas here, like building wooden skyscrapers, or building microhouses on wide streets. Now this lunacy…

#25 ccen on 10.17.12 at 10:34 pm

“There are years left in the recovery, of course, but anyone who tries telling you America will flop into depression or burn off its currency in hyper-inflation is flat wrong.” Garth
Yes don’t bet on America…. watch this video on youtube
“United States Budget Dilemma.wmv”
http://www.youtube.com/watch?feature=player_embedded&v=EW5IdwltaAc
I know everybody else is a moron if thinks different…

Wow. On YouTube. Must be important. — Garth

#26 Charles Ponzi on 10.17.12 at 10:41 pm

‘Meanwhile the US market has bounced off bottom, and is now in the earliest stages of a protracted recovery.’

Green shoots that will only die with the first Autumn frost. Printing money is unlikely to lead to sustainable economic growth.

#27 GTA Engineer on 10.17.12 at 10:42 pm

Earnings upside? Garth, please. The companies may be meeting/beating, but they’re all revising drastically lower for Q4. Wait until after the election, when all the fabricated employment and real estate statistics deflate along with the stock market. The stock market is in for a drastic correction, and recession is still on the way (if not here already). Mark my words – I’ll remind you of this comment when it happens.

There is no evidence US employment data is fabricated, and corporate profits are real and evident. Go worry about something significant, like climate change. — Garth

#28 Define Deflation on 10.17.12 at 10:43 pm

I would suggest that Garth throws around the terms deflation and inflation too loosely and this is important to clarify. Deflation is a monetary phenomenon (i.e. a decrease in the money supply) whose symptom tends to be (but not always immediately) manifested in a decrease in general price levels in the economy. A correction in real estate prices is an example of deleveraging, reflecting a reduction in debt. It’s true, in the environment of our current monetary system which we’ve been living under for a few decades now, that debt (or credit, depending on your point of view) is the basis of money. However, they are different forms of money and the distinction is important because it is perfectly possible to encounter inflating prices for the day-to-day items we buy (like food and gas) while simultaneously experiencing a deleveraging in asset prices such as those of homes.

The situation is currently exacerbated by central banks throughout the world aggressively combatting the deleveraging process (about to begin in Canada’s housing market) with the printing of money in vast quantities (QE, OMT, etc.). The result: we will almost certainly see lower real estate prices in Canada and, eventually, likely see higher inflation of those day-to-day items, currently delayed due to money-hoarding by the big banks shoring up their balance sheets and the exporting of inflation to other countries (consider: China or North Africa’s Arab Spring which was fomented, in large part, by a reaction to overburdensome food inflation).

I disagree with Garth when he argues that deflation is the bogeyman. The big central banks of the world certainly fear this and have recently declared publicly (and finally) that their central objective is to create inflation in order to encourage more spending and, of course, to reduce the burden of escalating federal debts through the debasement (inflation) of their currencies. Here’s a picture of the US adjusted monetary base, the most basic form of money supply (http://research.stlouisfed.org/fred2/graph/?s%5B1%5D%5Bid%5D=BASE), and please do remember that the US dollar is still the world’s primary reserve currency (i.e. all other currencies derive their value from it; no nation’s currency is an island) although other countries are doing their best in beginning to undermine that status. According to the ‘true’ definition of inflation, technically, we already have hyperinflation. However, this new money is not currently circulating, thankfully. The danger, however, lies in this money leaking out into circulation and its quantity becoming multiplied through spending and lending. If so, and if the velocity of money picks up too much, then watch out ‘above’. One must remember, the big central banks of the world want inflation; the challenge for them will be to constrain its magnitude once it picks up.

As I have said, we’ll have price inflation and asset deflation. It took you 450 words to confirm that. — Garth

#29 Define Deflation on 10.17.12 at 10:52 pm

Well, the link to that graph of the US Adjusted Monetary Base on the St. Louis Federal Reserve website didn’t seem to work. Here’s something similar at Wikipedia: http://en.wikipedia.org/wiki/File:U.S._Monetary_base.png

Too bad. We were all so excited. — Garth

#30 Herb on 10.17.12 at 10:53 pm

#14 Smoked Man,

could I have the Coles Notes version please?

#31 Zoids on 10.17.12 at 10:55 pm

Loblaw just laid off 700 management ppl at its HQ!!! How will this affect the house market since a lot of them definitely still have mortgages not yet fully paid for another 10 years even if they bought it low at year 2000!

#32 PoorgEoisie on 10.17.12 at 10:56 pm

Is there any relation to the latest round of QE and the U.S. housing rebound?

#33 Define Deflation on 10.17.12 at 10:59 pm

Re: “It took you 450 words to confirm that. — Garth”

Ah, Garth, ever the disparager. I felt some of your readers would benefit from a little background explanation so that they could rationalize the situation for themselves, and therefore deal with matters independently, instead of simply following your instruction blindly.

Your blog is a better read when you get the chip off your shoulder.

#34 Van guy on 10.17.12 at 11:07 pm

Houses in Surrey avg over $600k. Much more than Brampton. I don’t think we’ll see houses in the 100’s in Surrey.

#35 T.O. Bubble Boy on 10.17.12 at 11:09 pm

BPOE = Best Postage-Stamp-Condos On Earth?

#36 Paul on 10.17.12 at 11:12 pm

http://www.timescolonist.com/travel/100K+micro+condos+works+historic+Janion+building/7349629/story.html

#37 Mel on 10.17.12 at 11:12 pm

I have always agreed with you on the housing bust.

However, I do not agree that Europe is contained, U.S. is on a long way recovery. It will come, but not yet!

U.S. is already in a recession with Europe. Canada will be in one next year. Commodities will be following a long term decline in prices, as a matter of fact oil is in a decline already.

U.S. 10 year treasury will hit 1% in the coming few years. 30 year treasury will fall to 2%.

That’s my take on things.

Too bad you do not see the opportunities. — Garth

#38 Christopher Lackey on 10.17.12 at 11:15 pm

I have a hard time being as bullish on the U.S. as Garth because when when you look at the 16T and rising debt and long term demographic projections (old, all wanting SS and medicare), tax revenues won’t even be sufficient to cover the interest on those payments.

Then again, Japan has already been dealing with this problem for 20 years and can only cover the interest even now because it is zero. Despite this Japanese companies are still profitable and money is still made on the Nikkei. So I’m not saying he doesn’t have a point.

But where the hell do these scenarios end?

They don’t. Worry about your own life, not macros. — Garth

#39 Grim Reaper/Crypt Speculator on 10.17.12 at 11:17 pm

#20 Canadian Watchdog on 10.17.12 at 10:29 pm

Yeah funny how Agenda 21 hardly gets mentioned up here in Canada

People don’t seem to quite get it….this higher density is a de -facto prison camp yet sold as sustainability.

#40 THE CELIAC HUSBAND on 10.17.12 at 11:17 pm

Naples is nice for 110,000.
France is nicer………health care is actually affordable.

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

#41 McLovin on 10.17.12 at 11:21 pm

DA:

“Up a bit from low levels? Sure if you consider the peak of the market in 2007/08 a benchmark. Personally I consider them to have been an anomaly the likes of which we should hope do not return as ultimately it costs us all.

Not at all the 5th year in a row of steady declines… we have been ‘stable’ with modest gains in volumes hardly noteworthy price declines – effectively flat lined which isn’t bad by compare.”

Translation: Prices down 5 years in a row in Kelowna

#42 GTA Engineer on 10.17.12 at 11:22 pm

There is no evidence US employment data is fabricated, and corporate profits are real and evident. Go worry about something significant, like climate change. — Garth

—————

The evidence is clear if you read past the media’s headlines. Overall employment on a monthly basis is increasing at a rate *lower* than the rate of population increase. Yet the unemployment rate is going down. Why is this? Because, mostly, the BLS (Bureau of Labor Statistics) manipulates the size of the labor force to make the unemployment (the “U-3”) rate look lower than it actually is.

Look instead look at a better official number, which is much less talked about: the official U-6 unemployment rate in the US. This includes entire classes excluded from U-3, including people who can’t get fulltime work so settle for parttime, and those that tried to find work but couldn’t and therefore “don’t count” anymore. What?? Don’t count? Yes, if you can’t find a job and stop looking, you are considered a ‘discouraged worker’ and no longer could as unemployed in the U-3 media-reported number.

Of course, this U-6 rate will ALWAYS be higher than U-3. That’s not the point. The point is that the divergence between U-3 and U-6 has grown astronomically over the years:

–Sept. 2002 (when the recovery from the 2001 recession was well underway): U-3: 5.7 percent; U-6: 9.6 percent; gap: 3.9 percentage points.
–Sept. 2007 (right before the latest recession started): U-3: 4.7 percent; U-6: 8.4 percent; gap: 3.7 points.
–Sept. 2012 (the most recent numbers): U-3: 7.8 percent; U-6: 14.7 percent; gap: 6.9 points.

The gap betwen U-3 (headline number) and the more comprehensive U-6 number has grown 3.2 points since 2007. Which means, in effect, the real unemployment situation in the USA is much worse than the U-3 number shows. This growing gap showcases the manipulation perfectly. Unemployment is not going down. No – the number of workers that can’t find work is going UP and the statistics the government reports (% of those looking for work that can’t find it, nevermind those who gave up) are providing a fictitious picture of a rosy labour market.

You just proved transparency. — Garth

#43 Angel on 10.17.12 at 11:22 pm

omg, would you even get a kitchen? It would be like living in a trailer. Make sure you don’t get grease splatters from electric fry pan on your bedspread. Would a washer/dryer even fit in there? That’s shameful. I hope the wheels completely fall off before it’s even built. No one should be made to live in that. You’d have to go outside to change your mind. The idea of an open house for one makes me giggle. “Let me step out so you can step in.” MLS pictures are just the realtor doing a 360 in the middle of the room. Bwahahaha

#44 Canadian Watchdog on 10.17.12 at 11:22 pm

#28 Define Deflation

The Fed can print all they want; if the money doesn’t move it’s not inflationary. M2 Velocity

When unions start rioting and force governments to lift their wages with mass amounts of stimulus are spent to boost private sector jobs, then you can worry about hyper-inflation.

#45 Suede on 10.17.12 at 11:25 pm

That Naples house pays for itself in 6.5 years. Nice payback period.

Surrey, for $100k – i shook my head watching that on the news. “So people that can’t afford can get into the market”

If they can’t afford, why get into the market.

Bob Rennie held a big RE agent conference a couple of days ago.

“Why wasn’t the media invited,” some asked
“Because they would put a negative spin on things,” Rennie replied

He knows how to play and use his rooks and pawns when he needs to.

#46 Devore on 10.17.12 at 11:30 pm

#173 };-) aka D.A.

On the matter of publicizing sales and listing information, you do realize we have privacy laws in Canada don’t you?

Sales are already public knowledge, available for a fee at your local city hall records office. What is so private about listing information? Especially when, as you say, it is available at a mouseclick by any realtor? You’re hiding behind a smokescreen.

The point here is that having single source of information, and information guardians, works against the market and against price discovery. Sure, my agent can pull up all that information if I ask for a specific property, but, well, he won’t be very forthcoming with information that might scuttle a deal if he himself hasn’t closed a deal in 6 months and the kids need new braces.

We’re not talking buying a box of cornflakes here, we’re talking a million bucks. Trust but verify. My trust to a commissioned salesman paid by the seller (and sometimes paid an additional bounty by the seller, oh, but that’s in the agent notes field) only extends so far.

My trust withers further when faced with your explanation of relisting. That the majority of agents are a bunch of muppets who cannot find their clients a property unless it pops up on the hotsheet, as if, somehow, they “missed” a listing in their search. Oh, look, new shiny!

#47 45north on 10.17.12 at 11:35 pm

But F and the peckerettes aren’t backing down, unless we well and truly fall off a cliff in the spring of 2013.

there’s no backing down, Dalton McGuinty is a sign. He looked over the cliff and strapped on his chute.

#48 adam on 10.17.12 at 11:37 pm

Average garden shed 12X12? Wow, must be a rich neighbourhood Garth!

Includes nanny’s suite. — Garth

#49 born in the usa on 10.17.12 at 11:39 pm

oh ya the usa is improving LOL thats right we here in the usa never fudge the books on our employment numbers like greeks cooking there books all the stats you read about housing starts and consumer confidence in the usa are all honest reporting even our CPI is real honest ,thats right come buy houses now oh did i mention its an election year

#50 GTA Engineer on 10.17.12 at 11:39 pm

You just proved transparency. — Garth

Transparently manipulative :) But only to those willing to dig to get the real data. For the unwashed masses (including the media), they continue to be misled into thinking that the employment situation is improving. Transparent? Yes. Using the data to manipulate the public’s perception of reality? Also yes.

#51 neo on 10.17.12 at 11:41 pm

“Of the last 48 S&P companies to report earnings, 35 exceeded analysts’ expectations.”

The expectations they had 3 months ago or the racheted down expectations they revised them to after pre-warnings? YOY earnings are still tracking negative and none of that has or is being reflected in the stock market because stocks have ignored all the downward revisions but hop when they leap over the low bar.

“Central banks have succeeded in stabilizing Europe.”

You still think that? wow. Here I thought those riots and strikes were a bad thing.

“US employment numbers have shown gains for 41 months.”

All they need to do is get the participation rate down to 50% and the unemployment rate will be 0%

This blog is a constant reminder that fear trumps all. — Garth

#52 Define Deflation on 10.17.12 at 11:42 pm

Re: #44 Canadian Watchdog

“The Fed can print all they want; if the money doesn’t move it’s not inflationary. M2 Velocity”

That’s exactly what I said. We agree.

Re: “When unions start rioting…”

No need for riots and demands for increases in wages. There are a lot of scenarios that could precipitate an increase in velocity.

#53 Netcentric on 10.17.12 at 11:53 pm

A decade ago when my kids were small I bought a 40ft travel trailer (400 sq feet), parked it in a nice trailer park right on the beach and we lived there for five years. It cost me $10k. Looking at prices and square footage these days maybe some folks should consider this option. My kids loved it.

#54 TRT on 10.17.12 at 11:57 pm

USA

Budget revenue = $2,400,000,000,000

Budge expenses = $3,500,000,000,000

Deficit = $1,100,000,000,000

Do the Math! Watch inflation run 4-5%, watch 30 year mortgage debts melt away. That’s why housing is on fire. Only those with cash are buying.

However, the deficit will be shrunk … on the backs of the poor/working class. It will be a renaissance for the non-working class/1% ‘ers! Until the lower class rises ?

#55 Mr Buyer on 10.17.12 at 11:59 pm

I was really set off balance the first time I read the America is rebounding so we will have a soft landing theme a while ago. For some reason I do not see America preventing a collapse in Canadian Real Estate prices. Things are progressing along a very simple trajectory. I am just guessing but I think it is not going to be good in Canadian Real Estate for a long long time to come.

#56 TRT on 10.18.12 at 12:00 am

Regarding inflation and “velocity”:

Keep it simple man. No need for economic jargon;

If more and more money is added to the mix…it will EVENTUALLY move to buy something.. maybe not today but it will. The more they print, the more to potentially buy assets in the future. Simple ====> inflation sooner or later.

#57 Devore on 10.18.12 at 12:01 am

Wow, those Quattro developers getting really desperate. Must be zero interest in their other projects.

In cities like New York, Tokyo and Paris, they found a solution – build smaller, but build closer to amenities.

As someone on VCI quipped, ah yes, New York, Tokyo, Paris, Whalley. Such world class cities, so easy to confuse.

And what amenities are they talking about exactly? 10 blocks to a train station in the ass end of nowhere?

For a few dollars more than the $650/month it will take to live there (guaranteed to be higher in practice after you take possession) you could rent an apartment with an actual bedroom and closets in the same area. Who exactly is going to buy this box from you when you need more room because you got a pet goldfish?

#58 Joe in van (livin in it) on 10.18.12 at 12:10 am

#14
Never been loved and never will be

#59 Party On Garth on 10.18.12 at 12:14 am

RE: Agenda 21.

Yes, another subversive atrocity being championed by the all-knowing, pious “urban progressives”, who continue to push Canada down the dark path of reckless mass immigration and urbanisation.

#60 daystar on 10.18.12 at 12:48 am

#25 ccen on 10.17.12 at 10:34 pm

It’s still a good link worth browsing Garth, as it shows that there truly are some tough fiscal choices going forward for the U.S. . What I believe our friend ccen is missing with his fiscal assessment as well as his reliance on the 40 year accountant narrative of the said youtuber is just where the GDP percentage of taxation in the U.S. compares to the rest of the nations of the world nationally.

Governments can and will raise taxes and cut spending towards fiscal balance with the U.S. being no exception to this. Lets check out another link to see where the U.S. stacks in terms of taxation shall we?

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2221rank.html?countryName=United States&countryCode=us&regionCode=noa&rank=193#us

Currently the U.S. is at 15.3% income taxation federally (2011 est.) as opposed to Canada (38% combined federal/provincial income taxes, 2011 est.)and I believe if anything over the last couple years taxes have gone down in the U.S. as GWB tax cuts are still in effect. This U.S. number does not include state/municipal taxes:

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

…but these taxes are quite low compared to provincial income tax rates in Canada. 7 states don’t tax income, another 7 states have income tax at a flat rate of 5% or less and the rest vary with income and its a lengthy process for me to search for income tax levels for the other 38 states online but my guess is the highest taxation rate comes out of New York state at 12.7% and the rest are below 10%. We can see this quite easily if we look at average incomes of each state (the national average is what, $47,000) and what the average tax per person is and go from there. Overall state taxation is in my own best guess averaging nationally between 6 and 7%.

So… in conclusion, if U.S. federal income taxes are at 15.3% and state income taxes are… lets be conservative and call it 7%, average income taxes in the U.S. are around 22%. Again. Canada’s level of income taxation is around 38%. The 40 year youtube accountant claims U.S. federal taxation would have to go up 50% to balance as well as some cuts and I believe he’s right but a 50% increase in U.S. federal taxes pumps up total federal/state tax rates to roughly 30% personal income taxes. Its still 8% less than Canadians pay! Is that doable? YES but raising personal taxes by 50% will only raise what… $550 billion and they are still short $450 billion or more to balance and I can’t see any other way to balance budgets other than to cut defence by a full third and that wouldn’t be easy either as GDP would plumment if it was done overnight unless the U.S. economy recovers but it is recovering and war is ending.

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/us-poised-for-boom-in-crude-oil-exports/article4605560/

I’m not sure just how many of us are aware of the true extent of drilling with frac for nat gas and horizontal drilling of old vertical wells but U.S. energy production is way up. Over half of the worlds drilling rigs for oil & gas are drilling in the U.S.. No, I’m not making this up (and folks still want to bet against america):

http://www.wtrg.com/rotaryrigs.html

Is the U.S. past a tipping point? No. Not at all. We could, however, be facing a tipping point with ocean acidification and later global warming. (in fact, I’m worried that we’ve already passed it with ocean acidification and if I’m right it means 70% or more of all the species in the ocean will die off in the sea within 40 years and there’s nothing anyone can do about it now, its already too late). In my slightly humble opinion, C02 and smart gases (i.e. pollution) is the worlds #1 problem. Nevertheless, the U.S. fiscal surprise out there could be interest rates a few years away and my feeling is that once a nation hits gross public debt of 100% or more, the said nation in question cannot sustain high interest rates (7-8% or higher) and that could change everything fiscally for the U.S. but with the actions of the U.S. central bank over the last four years and the average treasury bond maturing at 8+ years, the U.S. is likely… 4 and 5 years away from needing to borrow large sums from the markets to roll over debt or they can Q.E. once these bonds are set to mature if rates become a problem and I believe they will have to do that to some degree regardless of whether they balance fiscally or wherever inflation is at but we shall see. Their U.S. central bank can control rates if they become too expensive but it means hyperinflation as that next big round of bonds is set to mature again, or potential Q.E. to infinity as is the case with Japan if the U.S. elects poor leadership but we are into the 2020’s now and thats far off from whats happening today.

We belly ache about being overtaxed but we’ve gone through worse and can manage at that level. Can the U.S. do the same? The 40 year accountant doesn’t think so. ccen doesn’t think so. Many others would like to cheer on hyper inflation and a cratering U.S. dollar to make their beloved dooms day predictions come true and cash in on gold but the facts remain. The U.S. is undertaxed and with any kind of economic recovery up she goes and I believe it begins at the end of this year early next regardless of who wins the whitehouse and one final thought. Only those who haven’t connected the dots will bet against america. I see the U.S. becoming an energy exporter, their currency is much more competitive than it was and their dominance in agriculture coupled with energy could make them the dominant economy over the next decade and that means they can relax on defence some and raise taxes in accordance with true growth. They need true leadership to see it done and on that note I hope for their sake Obama wins.

#61 h bergquist on 10.18.12 at 12:48 am

I’m typing this from the livn room of my 300 sq ft house.
Yes, house. It’s okay for a single ole man. I do have a rented storage locker that I’m in the process of emptying, then I’ll go somewhere else. I like having a garden and all. Smokn Man would appreciate this place as you’re always near your bed for passing out. Vancouver is about the worst place for someone on a pension. Everywhere else in BC is pretty silly too.

#62 Tim on 10.18.12 at 12:52 am

Who would want to live in America?

#63 David Oliver-Godric on 10.18.12 at 12:55 am

Alas, Garth. Your faith in the American dream is misplaced, I fear. Everything gets rosy just before an election. Afterwards, reality bites.

#64 Alberta Ed on 10.18.12 at 1:20 am

Those micro-condos sound like concrete coffins. Who wants to live in a box? I’ve seen bigger dog houses in Texas.

#65 Click Here, its different on 10.18.12 at 1:30 am

#6

I read the book “Endgame : The end of the debt supercycle” this year and will read it again this week.

Then I notice that most economic bloggers on the web write about buying gold and that the end is near.

Then I read Garth Turner, who says “US will slowly recover, liquid is king, gold is very difficult to digest on a toast”

Then I sip a coffee, thinking how the US can print 40 billions a month and get out with it.

Thats what I like in 2012. Internet give me access to very different authors I choose to listen to for different reasons. No one have THE answer. Truth is printed in separate sentences scrambled a little everywhere.

But I liked the book you mentioned (Endgame).

Heres a good “overview” or “recap” of its content for those of you who wont take time to read it :

http://seekingalpha.com/article/266602-book-review-endgame-the-end-of-the-debt-supercycle-and-how-it-changes-everything

#66 six-figure-renter on 10.18.12 at 1:45 am

Beautiful post Garth…bravo!

#67 WaterlooResident on 10.18.12 at 1:51 am

Hey, $17 per hour is more than most Engineers are making at the place my friend works at in Kitchener. He works at an automation company (Brock Slns ) and he’s been working there now for 4 years and is in charge of programing PLCs, designing up equipment specs, and even going to the customer’s site and installing everything correctly. For that he’s getting paid $13.25 per hour ! The company just let go of 2 other Electrical Engineering technologists who were making $14.50 per hour because they were classified as “TOO EXPENSIVE TO KEEP”. They just opened up a new facility in Texas where the workers there are getting paid $7.20 an hour for the same work; highly skilled workers, trained as Engineers, doing programming and installations too. So as you can see, the U.S. workers get half of what we get paid, and if you think that $17 per hour is too low, then come to work in Kitchener Ontario as a high-tech worker and enjoy living on $14 per hour or less !

#68 InLimbo on 10.18.12 at 2:12 am

#15 GTA Girl

Where on Hwy 7 are these townhouses?
Thank you

#69 InLimbo on 10.18.12 at 2:17 am

#15 GTA Girl — I suspect you may be talking about relatively recent builds that you see after passing Islington eastwards and shortly after passing the top of the hill.

#70 new-era on 10.18.12 at 2:26 am

That Right Garth, Buy America and Sell Canada. Not only in Real Estate but also in the Canadian dollar. When both currencies are equally valued, with one being a bigger risk and the other onto its way to recovery.

If Canada takes a hit, expect traders to sell off Canadian dollars for something else. The Us has taken a hit and has a chance to recover. Canada never took its hit but got SuperSize (debt) with government intraventions.

There will be a time when people will treat canada treasuries as too risky with basically 1% returns. And other currencies such as the Euro, or Greenback as a better gamble.

#71 Whiny on 10.18.12 at 2:39 am

I retract my comments from last night. I guess the only downfall is you’ve got to see it through – might take some time.

Good luck. We’re all in this together.

#72 Buy? Curious? on 10.18.12 at 2:47 am

Housing Boom in the US? Maybe if you’re a bank.

http://www.youtube.com/watch?v=cfLINvhK2JE&feature=g-all-u

I think Smoking Man just blew my mind but I know if I passed out beside him him on the GO Train what else he’d blow. Smoking Man for Education Minister 2013!

#73 jan on 10.18.12 at 3:44 am

Sorry, what’s a kennel ?.

#74 Ayn Rand Army on 10.18.12 at 3:52 am

Garth, the US home starts and bidding wars as reported in the media is a farce, it’s an election year and Obama is desperate and going to extreme lengths to make it appear all is improving. IT’S NOT.

Anyone who buys that their economy is on the mend are the ones who are flat out wrong.

This is why gold is pulling back now, but it’s a buying opportunity. Once the SHTFan gold will rebound and blast through new highs for years and years to come….

#75 Freedom First on 10.18.12 at 4:00 am

Interesting blog and comments tonight. Like what Garth said about not worrying about the macro……just worry about yourself. The take I get from all of it, to me, is one of the cornerstones of this blog. Right now, be liquid and diversified.(addendum: does not include micro-condos:)

#76 Aussie Roy on 10.18.12 at 4:07 am

Aussie Headlines

Houses worth less than loans on them

MORE than 35 per cent of homebuyers who purchased the properties after 2008 are facing the prospect of being in negative equity.

Analysts warn that those homeowners with negative equity – their house being worth less than they owe on it – are likely to stay in that scenario for up to six years as property values remain “soggy” for some time to come.

LOL Soggy, it must mean, prices continue their slow melt.

http://www.news.com.au/realestate/news/houses-worth-less-than-loans-on-them/story-fncq3gat-1226497332060

#77 Questioning Calgary stats on 10.18.12 at 5:02 am

Hi Garth, please don’t post my previous comment (#53).

Thanks. I look forward to meeting you some day. I live in Victoria and hope you make it out here soon.

#78 live within your means on 10.18.12 at 6:22 am

#48 adam on 10.17.12 at 11:37 pm
Average garden shed 12X12? Wow, must be a rich neighbourhood Garth!
………………
Ours is 12X14 & we don’t live in a rich ‘hood, but then we don’t live in the GTA either. DH built it – max. dimensions w/o needing a permit.

#79 live within your means on 10.18.12 at 6:25 am

#43 Angel on 10.17.12 at 11:22 pm

That was so funny – had to read it to DH. Thanks for our morning laugh.

#80 House on 10.18.12 at 6:37 am

“Analysts” aren’t they laid-off Walmart workers?

#81 I'm stupid on 10.18.12 at 6:45 am

Pity all the poor people in Canada who make $17 an hour (the average hourly wage is $23).

That’s not bad. It would only take 5 years to make a million dollars, if you worked 24 hours a day. No wonder people spend a million dollars like they have a money tree in the back yard. In the real world if you made $23 an hour and worked 40 hours a week it would take just under 21 years, good luck with retirement. But hey at least you have your dream home (for now).

#82 Ralph Cramdown on 10.18.12 at 6:46 am

“[H]e focused instead on Agenda 21 at a public meeting to discuss the plan. As almost no one in attendance knew what he was talking about, Saul says his words met with blank stares.

“I wish I’d focused on why the plan was bad,” he said, “instead of talking about Agenda 21 and looking like a wacko nut job.”

#83 neo on 10.18.12 at 7:00 am

This blog is a constant reminder that fear trumps all. — Garth

Let me ask you a question Garth. You are a financial advisor correct? Ok.

The U.S. has been borrowing 10% of its GDP for the past 4 years and is only growing at 2%.

If someone came into your office and told you they were borrowing 10% of their income and only getting a return of 2% after 4 years what would you tell them?

If they were the largest economy in the world, the planet’s technological leader, possessor of the reserve currency and greatest power, running at undercapacity and shorted by you, I’d ask if I could buy in. — Garth

#84 Bigrider on 10.18.12 at 7:39 am

Here is my prediction.

A mere 5-10% recovery in housing prices in the U.S over the next few years will be good for a 20 to 40% rally in the S&P.

Not saying housing is going to recover, but if it does, the S&P will be a multiple of that.

While all the house humpers try to make a 10% gain on houses like today’s naples example, these same people will continue to doubt the recovery in U.S corporate earnings and share prices.

Like they are mutually exclusive.

#85 Herb on 10.18.12 at 7:40 am

Happy Anniversary, Garth! Six years ago Harper made you an independent MP, and me a blog dog.

I watched myself get fired, on TV. It was a watershed day. Thank you. — Garth

#86 maxx on 10.18.12 at 7:46 am

“Personally, I think the Surrey building would make an excellent kennel.”

True, but even a dog wants an occasional bath.

#87 futureexpatriate on 10.18.12 at 7:56 am

“Personally, I think the Surrey building would make an excellent kennel.” – Garth

For toy chihuahua couples, maybe.

Uh, FIXED toy chihuahua couples.

#88 TurnerNation on 10.18.12 at 8:14 am

Living in a school bus! Like the hippies did.

#89 █ ♣ █ My House Pofit is MINE - My House Loss is OURS on 10.18.12 at 8:24 am

Why go to Surrey?

You can have 750sqf condo in High Park build by Daniels for $155k.
fine print: first 3 floors facing Subway line and Apartment building.
You save on alarm clock as subway will wake you up 3 am
and no need for snooze button . Comes again every 7 min !
I lived in house there and decided to blow money on alarm radio and moved away..
eheem… they advertize those $300 k but make an offer…Don’t tell them you read this here…

#90 Pr on 10.18.12 at 8:39 am

…But F and the peckerettes aren’t backing down, unless we well and truly fall off a cliff…

Com on! Did you see the cliff that we fly over for the last 10 years! Remember the interest rate are suppose to go up. So, no way , it will stay that way. About time for a correction.

#91 Rick in Japan on 10.18.12 at 8:41 am

Hey Garth,
I try to check in when I can-been busy with the doctorate program. . .
Interesting to see the developers trying to sell micro sized apartments. My first apartment in Osaka was 110 square feet. Not much fun to live in.

#92 GTA Girl on 10.18.12 at 8:50 am

In Limbo & new-era,

The town houses are, as you mentioned, east of Islington towards Pine Valley on south side. One listing just went for sale for $380k. One unit has been for sale for 2 mos for $402… No bites. Units sell for $360-390. They have a nice layout, 2-3 bedrooms. But they are freehold.

Only problem with this and more with the subdivision behind is sewage flow. Some homes closer to 407 have had minor flooding. Seems there isn’t enough space for all new builds. City has to send a sewage vacuum truck once a week to clear pipes.

Again, it’s bad planning in a corrupt city.

#93 TurnerNation on 10.18.12 at 8:57 am

#14 Smoking Man

The elites know well what we little people crave. Attention, recognition!

They’ve created a bunch of expensive but colourful Diplomas and Certificates which may purchased from them for $10,000-100,000, each.

Certificate in Organization Design? WTF? Certified Human Resources Professional. Dude. How does this make money for anyone else.

They’ve created facebook, Pintrest. On FB you can post in your status: I passed the test!
10 people Like this.
Everybody is twittering away on their mobile devices all the time. Notice me! So self absorbed while the elite tighteng the noose. Jobs offshored; each year brings a slew of new taxes, laws, fines.
Driving has never been so dangerous. New elite tax collection schemes: holding a cell phone while driving, smoking in the car with kids, having a couple of beers (BC, AB, and soon ON, make a criminal out of you at .05 not .08). The law is not they law they make the law. For-profit prisons.
New land transfer taxes, EI taxes, Air transport and “security” taxes. New taxes on alcohol, smokes.
EU is introducing an investment tax.

#94 housedoc on 10.18.12 at 8:57 am

How was the Naples bungalow was “worth” 384k in 2006? It didn’t sell then.
Is the 2002 sale price a typo?

09/04/2012 Pending sale $110,000
06/26/2012 Listed for sale $110,000
09/11/2002 Sold $36,900
08/08/1997 Sold $123,500

#95 fancy_pants on 10.18.12 at 9:00 am

Wondering where I lost those rose coloured glasses. Garth, can you send them back to me asap? Economic realities not looking as pretty from my angle. thanks.

#96 gladiator on 10.18.12 at 9:09 am

I see the trend, I see the trend!!!
This is its logical destination:
http://urvianandworldtrip.blogspot.ca/2009_07_01_archive.html

#97 Ronaldo on 10.18.12 at 9:10 am

http://www.forbes.com/sites/jonmatonis/2012/10/17/large-cash-transactions-banned-in-mexico/

This would certainly stop the HAM in its tracks.

#98 gladiator on 10.18.12 at 9:10 am

sorry, this is the link:
http://urvianandworldtrip.blogspot.ca/2009_07_01_archive.html#2217808603576828877

#99 Sisko on 10.18.12 at 9:10 am

Anyone who buys one of these is dumb. My RV is bigger than that, and has a tub!

#100 gladiator on 10.18.12 at 9:22 am

or, here’s a more pessimistic forecast of the trend:
http://www.urbanphoto.net/blog/2009/03/14/life-in-a-cage/

#101 live within your means on 10.18.12 at 9:27 am

#61 h bergquist on 10.18.12 at 12:48 am

We had a great laugh from Angel’s comment then DH said, wow shouldn’t cost much to heat & I replied, wow, I wouldn’t have much to clean. Seriously tho, I’d love to downsize or rent, but we’d both miss our n’bours, especially DH (a social papillion) who visits n’bours places on the spur of the moment for a drink (then they call me to see if I want to come over – 50/50). Same n’bours pop in also at our place unexpectedly. Sometimes, we’ll end up ordering pizza or if I’ve made a huge Lazagna or a big stew or whatever, they’ll stay for dinner or we end up ordering a pizza. We’ve lived here for 21 yrs. There were only 9 houses on our street. Only 2 houses on our end of the st. were sold during that time. Maybe 7+ yrs ago they opened up our st. & created a crescent with, at that time, 500K homes. A few of those newer homes have have been sold a couple of times mostly to younger families with kids. DH & I attended some ‘open houses’ out of curiosity. Some of them had really ‘weird’ layouts and we were not impressed with the ‘workmanship’.

BTW – We really like seeing the little kids riding their bikes on the street.

#102 Steven Rowlandson on 10.18.12 at 9:36 am

Pity all the poor people in Canada who make $17 an hour (the average hourly wage is $23).

Lets see now if the poor make 17 bucks an hour and my business used to make 15 bucks an hour to yield a 11 buck an hour profit that would make me destitute even when I had a job/ business working on stairs. Now that I have no job I guess that would make me super destitute. If I applied for and got a job the best I could be paid is minimum wage or may be slightly higher but not by much. So the very best the labor market has to offer me for my services is destitution wages and no chance of ever living like my parents or siblings.
That sounds like a very crappy deal every way you look at it. Small houses and garden sheds are far too expensive for the working class……..
What is Canada? A multi millionaire or better club?

#103 The real Kip on 10.18.12 at 9:36 am

“Meanwhile the US market has bounced off bottom, and is now in the earliest stages of a protracted recovery.”

The US housing market is being primed by the Fed with QE-3 aimed squarely at propping up housing to the tune of 40-billion dollars monthly.

It must be different there eh?

#104 neo on 10.18.12 at 9:50 am

If they were the largest economy in the world, the planet’s technological leader, possessor of the reserve currency and greatest power, running at undercapacity and shorted by you, I’d ask if I could buy in. — Garth

If they are all those things. Why are they only growing at 1.25% and China is growing at 7.4%. They sold their technology to Asia a long time ago. China holds the largest U.S. dollar reserves and has the greatest power because of that. Your argument is antiquated.

#105 613 Happy where I am on 10.18.12 at 9:53 am

http://www.civicsurrey.com/2012/09/28/tien-sher-proposes-300-sq-ft-micro-lofts-for-surrey/

Here is the link which describes the proposed micro-lofts…

I love small spaces that are well designed but I am no waif so this would probably be a bit too small…

#106 Chris on 10.18.12 at 9:53 am

The reason homes in the US are increasing are because of QE… Its called inflation… the prices of everything are rising because of it.

The “recovery” has also been because of inflation.. its just going to make things worse long term.

Silver & Gold

#107 Uwinsome on 10.18.12 at 9:54 am

Hey Garth,

Didn’t you get the memo? Keynesians can’t wear cowboy boots!

#108 Gypsy Kid on 10.18.12 at 10:01 am

I lived in a tiny tiny apt in Japan in my late twenties…it was unbelievably well designed…having said that, Japan IS a tiny country, unlike Canada.

#109 Smoking Man on 10.18.12 at 10:09 am

#93 Turner Nation

Brilliant man. Why is it only traders that see the light.

#110 TorontoBull on 10.18.12 at 10:23 am

@14
SM – very interesting perspective…but wasn’t Darth Vader enslaved?

#111 thinker on 10.18.12 at 10:28 am

Let’s step back and think shall we Garth – the stock market is up also on very little volume, infact volumes are down over 60% over the last two years and prices are very high and sticky…sound familiar? It should because housing is doing the exact same thing. No smoking gun here, when prices actually do drop in any real way, then wake me up.

#112 maxx on 10.18.12 at 10:37 am

#35 T.O. Bubble Boy on 10.17.12 at 11:09 pm

Or, “Better Pray Or Else”!

#113 Bottoms_Up on 10.18.12 at 10:39 am

Ok, question for the dogs:

Just received my MPAC assessment. By my calculations it’s 6% too high.

Is this something worth fighting for? i.e. my property taxes will go up, but only by a fraction of the assessed value. Is it worth my time to fight this?

#114 Gold is money on 10.18.12 at 10:44 am

” Meanwhile the US market has bounced off bottom, and is now in the earliest stages of a protracted recovery.
——————————————–

protracted recovery Garth, you’re mad. The R.E. bottom has yet to be touched, US banks hold large stockpiles of foreclosed homes, Interest rates are still at historic lows and will go up dramatically, and the US has not yet had its Europe like crisis–when it does, 2008 will look tame.
which state defaults first, california or illinois!?

#115 Bottoms_Up on 10.18.12 at 10:44 am

If one were to add 2 floors within the 290 sqft apartment, you could have almost 900 sqft of living space!

Yes you would have to live horizontally, but the sacrifice could be well worth it. No more ‘getting up’ out of bed, and you’d have a good excuse for skipping your stairmaster sessions.

#116 Daisy Mae on 10.18.12 at 10:45 am

The Gastroesophageal reflux disease wife: “Wow, that is some top-notch photoshopping!”

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

Actually, there is a sheet of glass between the viewers and the wildlife. The front end of the vehicle is within the compound and the back end is not. It’s a tourist attraction. But I don’t know where….

#117 Bottoms_Up on 10.18.12 at 10:46 am

#92 GTA Girl on 10.18.12 at 8:50 am
—————————————
I find it interesting that people buy these homes, especially at these prices. I would have a hard time living in them if they were free. Are they real estate zombies?

#118 Tony on 10.18.12 at 10:53 am

The U.S. is toast earnings are on a downward slope and once the United States election is over all the lies will be swept under the rug. They can set the bar for earnings as low as they want fact is earnings are and will continue to implode. America will be back in recession next year and the housing market after flat lining for a couple of months will start to fall once again.

#119 };-) aka D.A. on 10.18.12 at 11:13 am

#188AACI Okanagan on 10.17.12 at 9:42 pm
#125 };-) aka D.A. on 10.17.12 at 1:39 pm
I tell buyers and sellers what they NEED to know not what they WANT to know and certainly never an untruth. REALTORS deal in the realities of the market. We really don’t care if it is up or down. We check emotion at the door and bring logic to the table.
—————————————————————

Now if only you can apply that on here.

You calling me a deliberate hypocritical liar AACI?

#189Ex-Cowtown on 10.17.12 at 9:49 pm
One look at the # of Comments posted by D A confirms what GT is saying. The market sucks and is getting suckier. How can you tell?

D A has WAAAYYYY to much time on his hands.

If the market was anywhere near as strong as D A says it is he’d be working not dicking around on his computer.

Now you see, this is where you show you haven’t a clue what you are talking about. Obviously you must be a rank and file employee on a payroll. Ever heard the expression “when the going gets tough the tough get going”?

This is a very competitive business and unlike those heydays leading up to the peak market in early 2008 you have to work hard to get homes listed and sold let alone have your business merely break even after all the expense. So while I wish it were true that I had time to “dick around” it is just not the case as I am working harder than I have in a long time.

What I should explain is; I truly do believe in real estate and that even today there exist a good many opportunities by which people can improve their present and future by investing in real estate. I believe this no less than you might believe the contrary or Garth believe that financials are a better investment than real estate. My job is to bring those opportunities I see to the attention of clients, not to sell them, but to give them the opportunity to see those opportunities for themselves in the right light that they can make for themselves an informed objective decision on what they should do. Obviously with the general mood in the economy, which is not as bad as you might think by the way, I have to work harder to bring those opportunities to the consideration of they who might want to consider them as I need to moderate the influence of such bad press as this blog. Not that this blog is wrong but nor is it any more right than I am. Ultimately people have to make their own decisions without undue influence either way.

Participating on this blog allows me to hone my skills in addressing the objections of my existing and potential client base that if they might be misinformed I might be able to better offer them logical explanation why they should consider another point of view. I think you must admit there is no more readily available and tough an audience than the participants on this blog with which to academically debate these contentious issues. I don’t expect to change the Blog Dawgs collective mind but I believe the exercise in trying to do so is about as good as any Professional Development as I might find to that end. Also, I get to experiment with a lot more latitude than I would otherwise dare to with real live warm bodies who matter more to me i.e. better I screw up with you than with them.

There remain two constants in my ongoing debate with the Garth and the Blog Dawgs;

1.) They continue to offer strong argument against my convictions that causes me to continually defend my beliefs thereby forcing me to look objectively at those beliefs that I can continue to support and defend them.

2.) I have not yet had my mind changed by the Garth and the Blog Dawgs with respect to my opinions on matters of real estate as a home today and investment in one’s future be it financial or emotional.

Thank you very much

#120 };-) aka D.A. on 10.18.12 at 11:14 am

#188AACI Okanagan on 10.17.12 at 9:42 pm
#125 };-) aka D.A. on 10.17.12 at 1:39 pm
I tell buyers and sellers what they NEED to know not what they WANT to know and certainly never an untruth. REALTORS deal in the realities of the market. We really don’t care if it is up or down. We check emotion at the door and bring logic to the table.
—————————————————————

Now if only you can apply that on here.

You calling me a deliberate hypocritical liar AACI?

#189Ex-Cowtown on 10.17.12 at 9:49 pm
One look at the # of Comments posted by D A confirms what GT is saying. The market sucks and is getting suckier. How can you tell?

D A has WAAAYYYY to much time on his hands.

If the market was anywhere near as strong as D A says it is he’d be working not dicking around on his computer.

Now you see, this is where you show you haven’t a clue what you are talking about. Obviously you must be a rank and file employee on a payroll. Ever heard the expression “when the going gets tough the tough get going”?

This is a very competitive business and unlike those heydays leading up to the peak market in early 2008 you have to work hard to get homes listed and sold let alone have your business merely break even after all the expense. So while I wish it were true that I had time to “dick around” it is just not the case as I am working harder than I have in a long time.

What I should explain is; I truly do believe in real estate and that even today there exist a good many opportunities by which people can improve their present and future by investing in real estate. I believe this no less than you might believe the contrary or Garth believe that financials are a better investment than real estate. My job is to bring those opportunities I see to the attention of clients, not to sell them, but to give them the opportunity to see those opportunities for themselves in the right light that they can make for themselves an informed objective decision on what they should do. Obviously with the general mood in the economy, which is not as bad as you might think by the way, I have to work harder to bring those opportunities to the consideration of they who might want to consider them as I need to moderate the influence of such bad press as this blog. Not that this blog is wrong but nor is it any more right than I am. Ultimately people have to make their own decisions without undue influence either way.

Participating on this blog allows me to hone my skills in addressing the objections of my existing and potential client base that if they might be misinformed I might be able to better offer them logical explanation why they should consider another point of view. I think you must admit there is no more readily available and tough an audience than the participants on this blog with which to academically debate these contentious issues. I don’t expect to change the Blog Dawgs collective mind but I believe the exercise in trying to do so is about as good as any Professional Development as I might find to that end. Also, I get to experiment with a lot more latitude than I would otherwise dare to with real live warm bodies who matter more to me i.e. better I screw up with you than with them.

There remain two constants in my ongoing debate with the Garth and the Blog Dawgs;

1.) They continue to offer strong argument against my convictions that causes me to continually defend my beliefs thereby forcing me to look objectively at those beliefs that I can continue to support and defend them.

2.) I have not yet had my mind changed by the Garth and the Blog Dawgs with respect to my opinions on matters of real estate as a home today and investment in one’s future be it financial or emotional.

Thank you very much

#121 Mike on 10.18.12 at 11:16 am

Thanks for another good read Mr Turner. I do have one comment.

the US economy does exactly what this pathetic blog forecast a year ago – slowly, painfully, resurrects

Don’t lose sight of the fact this is an election year.

The US created 800 000 thousand jobs last month?

Or they changed the way you calculate un-employment. Again.

Also, it has to be pointed out that 40 billion dollars is being parked in the stock market every month thanks to QEternity. This figure jumps to 85 billion next year. This is after QE1, 2, Operation Twist 1 and 2….and the tax-payer funded bailouts.

If they US economy is recovering why does the number of Americans using food stamps go up every month too? There is still a deficit of 3 million jobs lost from the great recession.

Stats are manipulated. Facts are facts. I guess you can argue things are getting better, in some places, for some people. But I don’t think that is most people or most places.

I don’t see a fiscal cliff, more like a long slow draining of our wealth. Less people notice it that way. And it will be over by the time they do.

Elite = misdirection

it’s what they are best at

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

#122 John on 10.18.12 at 11:25 am

FTP wrote:

“First bunned, then vilified, then scorned followed by mocked, taunted, heard, praised, thanked and finally proven correct.

The life & times of Garth Turner.”

———–
This is undone by promotion of the idea of a “US recovery”. Supporting that is the same as supporting all of the fundamentals of the world real estate bubble. These unsustainable fundamentals are not being addressed. This is of course understandable. What can really be said?

Starting with reality isn’t easy, nor desirable, but there it is….it is what it is.

I fail to see the value of leaving out the foundations of the story. That said, without that error, reality wouldn’t be so obvious.

Defending the obvious is met with denial and resistance. In other words all the same emotional reference points of the Canadian real estate bubble.

So far…nothing has changed.

#123 };-) aka D.A. on 10.18.12 at 11:27 am

#46 Devore on 10.17.12 at 11:30 pm

I’m sorry you feel that way. Obviously your experience with real estate agents has not been all that you expected or what it could and should have been. I suggest you speak to friends, family and colleagues to get their recommendation of a good REALTOR® who most probably would prove themselves worthy of your trust. I am sure such a REALTOR would be happy to invest a great deal of their time and resources to prove themselves worthy – if you don’t have too much baggage left over from your previous experiences.

Reminds me of the email that was making the rounds a few years back… At the top was written “No matter how good she looks to you right this moment” and then you scroll down a picture of a very beautiful woman scantily clad in a bikini which once you land at the bottom of are printed the ending words “somewhere, some guy is tired of putting up with her bullshit”. Of course so too, I am sure, could any woman say so of any man. But I think you must get my point.

Could it possibly be that you are not getting the service you think you deserve because too soon too many tire of putting up with your bullshit?

#124 EIT on 10.18.12 at 11:35 am

‘Central banks have succeeded in stabilizing Europe’

Garth, each time you talk about Europe, I cringe. You must believe that they deserved that Nobel prize. Sometimes you strike me as a lost fabian walking in the dark. You can’t deny the division and antagonism created between the north and south.

Time for the world to take its medicine, let interest rates rise and end central interference.

#125 Uwinsome on 10.18.12 at 11:48 am

Garth, your recent post seems to have hit a nerve with the readers…

They seem to disagree with your estimation that the Ol’ USA and Europe have been mended and recovering.

It’s going to be a long and arduous road back up. More than likely, it’s going to dip down again before the economy rebounds in any meaningful way. It going to be a slow and painful process.

#126 GTA Engineer on 10.18.12 at 11:49 am

Garth, re:

#120 Mike

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

———

I think we agreed yesterday that it’s not the stats that are manipulated, but rather the selective presentation of stats to the public via uneducated or biased media to present a viewpoint that isn’t consistent with reality. In my example, presenting U-3 unemployment numbers to indicate an improving employment picture, while the spread to U-6 (more representative) unemployment data has grown (evidence available) since 2008 via consistent drops in the labour participation rates.

So yeah, the stats aren’t manipulated. But it’s like saying ‘studies have found that 70% of life-long chain smokers who ate carrots in their 20s will develop lung cancer’ and coming to the conclusion that carrots are to blame. Employment is NOT getting better in the US, and the media reporting a government number that misleads into us thinking the opposite is a great disservice. But par for the course – I’m not that surprised..

#127 Gold is money on 10.18.12 at 11:53 am

the evidence that labour stats are manipulated is the stated fact of how they are collected…the criteria used. Now im sure you will say thats only evidence of a flawed model not evidence of manipulation, but the choosing of a flawed model IS the manipulation. read below jack welch….

Let’s get real. The unemployment data reported each month are gathered over a one-week period by census workers, by phone in 70% of the cases, and the rest through home visits. In sum, they try to contact 60,000 households, asking a list of questions and recording the responses.

Some questions allow for unambiguous answers, but others less so. For instance, the range for part-time work falls between one hour and 34 hours a week. So, if an out-of-work accountant tells a census worker, “I got one baby-sitting job this week just to cover my kid’s bus fare, but I haven’t been able to find anything else,” that could be recorded as being employed part-time.

The possibility of subjectivity creeping into the process is so pervasive that the BLS’s own “Handbook of Methods” has a full page explaining the limitations of its data, including how non-sampling errors get made, from “misinterpretation of the questions” to “errors made in the estimations of missing data.”

Go back to your conspiratorial, gold-humping sites. — Garth

#128 Sask Power on 10.18.12 at 11:53 am

I will never ever DRINK THE KOOL AID! NEVER!

It’s Different Here!

I don’t care as I saw it twice in my life time. One in the early 90’s in Tokyo and as recently in the US.

So how “IT IS DIFFERENT HERE?”

I was reading the Starphoenix this morning and Potash Corp is planning to close some of its mine here in Saskatchewan as there will be a projected decline in demand in India and China for the next quarter.

Yeah, It’s Different Here.

#129 Ray on 10.18.12 at 11:56 am

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

It’s like proving the existence of God or that the Kennedy assassination was a conspiracy we believe what we believe but I will tell you that Rick Santelli CNBC seems to lean that way without directly saying it.
So government agencies always tell the truth right? In an election year the stats provided are a stretch at best a huge stretch time will tell.

I’ll take that as a No. You guys are all hat, no cattle. — Garth

#130 tkid on 10.18.12 at 11:58 am

#43 Angel, I just took a look at the designs, and you aren’t kidding when you say to watch out for grease stains on the bedspread.

Holy frak, the designs are tiny. One could go insane living there.

#131 Dontcallmeshirley on 10.18.12 at 12:06 pm

#118 };-) aka D.A.,

Could you be more specific?

You have seperate sellers clients and buying clients correct?

You tell each “…what they NEED to know”.

It can’t be simultaneously a good time to buy and a good time to sell…or can it?

You tell the sell client: good time to sell

You tell the buy client: good time to buy

Is that how it goes?

#132 avenirv on 10.18.12 at 12:19 pm

@all

The location is the problem. The best investments in London, UK for a ordinary citizen are the small studios around the British Museum. Their size is 211 sf, have very smart furniture (full furniture, a corner is the kitchen, small sower-powder room, TV, etc) allowing a couple to sleep and rents for more than 1000 pounds/month.And they rent like free beer.
But they are in the most touristic area of London. And London is a little more known than Vancouver.

#133 Stickler on 10.18.12 at 12:19 pm

Oh unemployment statistics are a hoot…

If your unemployment benefits run out, you are no longer considered “unemployed” for the headline number.

So guess what happens when thousands of people’s benefits run out and they did not find a job? They are no longer unemployed. The unemployment rate goes down.

Also, If you worked 1 day last month mowing your neighbor’s lawn for $10 -> guess what? You were not unemployed.

If you had no job last month, but got 3 part time jobs this month-> shazam 3 jobs were created!

Nice huh.

#134 Just Park It on 10.18.12 at 12:24 pm

I agree buying a shoe box may be a purchase that will down the road be a regrettable decision…but why does everyone come to the same conclusion.

Maybe there are people, living on the edges – who live in area’s that are truly frightening as crack heads, drug dealers, prostitutes can make life a living hell. This maybe is there chance to “own” a little something that has elluded them for most of their lives. We past judgment way to quick on those –

The herd mentality is evident even in here – we mock those who follow the crowd but mirror that in the writing- unless you walk a mile in someone’s shoes, how can you pass judgement on them ??

Life is too short – live for the moment!

#135 spaceman on 10.18.12 at 12:27 pm

the new gold… wood…

West Fraser Timber Co. (WFT) and Western Forest Products Inc. (WEF) are leading Canadian lumber producers to the biggest combined profit since 2006 as mills run at five-year highs to feed a U.S. housing rebound and near-record Chinese demand.

Lumber mills in British Columbia, Canada’s leading forestry region, ran at 86 percent of production capacity in the five months through May, compared with 82 percent for all of 2011, according to the Western Wood Products Association. Lumber futures rose to a 15-month high on Aug. 15 on the Chicago Mercantile Exchange

I personally have stock piles of 2X4’s in my back yard, they don’t seem to want to fit in my safe deposit box.

Soon people will give up money and carry around bags of wood chips to trade for food.

#136 arctodus on 10.18.12 at 12:28 pm

I greatly enjoy the blog…and I like to read Garth…..

but…..ain’t there always a but….

Almost everyone misses it…or intentionally ignores the beast squatting in the corner….well the beast is actually in the middle of the room eating our family dog and making bowel movements….

Human civilization hit the energy wall in 2005-2006…..absolute peak in all forms of energy production when totalled….

Predictably the world economic engine went to idle and stayed there….

now as we (collectively) start down the slope of energy deficit…..now the engine will start losing power in cylinder after cylinder…..and the beast in the room will start feeding on the dogs human owners….

Ergo: rise in totalitarian regimes, open warfare, starvation, declining human population etc…..

As this occurrs we will see a cessation (rit large) of air transport (commercial that is: the fighter jets and drones will still fly)……when the aerosols from the thousands of flights settle (almost instantly) we will see how bad global warming really is (rise of 2-4 degrees C at ground level world wide)……..

We are finished and we are to collectively stupid to even admit there is a problem.

#137 kevsta on 10.18.12 at 12:32 pm

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

oh please, it is a complete fantasy.

“Imputation” you know, the bit where they estimate what they think is probably happening, by up to 15% GDP?

here’s another non-conspiracy minded and mildly successful blogger explaining this farce in 2005

Imputations are a part of GDP that the government decides to estimate value, where no cash actually changed hands. In other words, if I scratch your back and you scratch mine but no one gets paid, then back scratching is undercounted in the GDP. Clearly it would be a travesty of justice if economic activity like that was under reported in the GDP. It goes far beyond that however, into complete fairy tale absurdities..

“Hedonics”?

I contacted the BEA today asking for the latest hedonic and imputation measurements. They pointed me to some online articles and tables and emailed me an Excel spreadsheet. Unfortunately the figures are severely behind and the latest numbers for imputations was from 2003. The most current figure I have for hedonic adjustment to the GDP is 2.257 TRILLION dollars which is roughly 22% of the GDP.

To the best of my knowledge the US is the only major country that hedonically adjusts its GDP

Not only is the US GDP distorted by hedonics but we “lord it over” the EU as well. If we did not hedonically adjust our GDP for subjective quality improvements our “growth” would not be anywhere near as strong as it looks

#138 };-) aka D.A. on 10.18.12 at 12:38 pm

#124Uwinsome on 10.18.12 at 11:48 am

Garth, your recent post seems to have hit a nerve with the readers…

They seem to disagree with your estimation that the Ol’ USA and Europe have been mended and recovering.

It’s going to be a long and arduous road back up. More than likely, it’s going to dip down again before the economy rebounds in any meaningful way. It going to be a slow and painful process.

Personally I think Garth is right and the readers are wrong – the US is, from what I have seen while visiting there several times of late, on the road to recovery and maybe Europe as well although I must admit to not following Europe so closely as to be able to offer a sincere opinion one way or the other. But I do disagree with Garth’s dismal opinion on Canada’s prospects in terms of real estate as a viable investment. When I say ‘investment’ I, of course, mean long term not speculative. ‘Speculations’ are a very big part of what got us in that mess of 2008 to begin with and I am sure we would all agree we don’t want to go there again. Right?

Certainly Canada did avoid the economic crisis better than most, maybe better than all, and for that there will be a price to pay. but I think not so severe as the prevailing opinion of Garth and his Dawgs

It is unquestionably, more than ever, a global economic stage and we are not immune to what happens in other country’s economies – good or bad. That we were able to bolster our Canadian economy as well as we did over the last few years while so many others faltered can only prevail for so long before we are pulled back in line with all those other countries we do business with. It’s that old, inescapable, ever present law of equilibrium. Equilibrium is the great equalizer of all things. The Ying and the Yang. It knows no boarders.

So… is it not entirely possible that there will be spin off benefits to be had by Canada coming from those other Nations which are now in a reparatory phase, mending their ways and regaining economic ground catching up to Canada? Why would we not experience some bolstering of our own economy by virtue of those others we do business with improving such that they do more business with us than they have been these past four years?

Absolutely we in Canada do, all things being equal, have a significant degree of capitulation to endure to bring ourselves back in line with those other countries we do business with who suffered more than we. But might it not be entirely possible that we will hold steady while they catch up rather than drop back to where they are now or were? Why ever would we drop back to where they were anyway? That would be ridiculous. No one wants that, no one is going to let that happen especially not Flaherty and Carney who, you must admit, have done a pretty good job if not too good a job.

I personally think we will hold. I think the good news south of the boarder is good news for Canada and we will now hold, as Kelowna has for the past four years, while we wait for them to catch up – but of course it is time which will tell. And if I am right, for those all those ‘speculators’ yes Garth is right when he suggests the US is a better bet for higher gains than Canada – in the short term. Long term I am bullish on Canada.

#139 spaceman on 10.18.12 at 12:42 pm

Reports on Chinese economy seem positive, I have FXI in my portfolio, (see Garth, I like ETFS) and it is boding well for BC Lumber.

You don’t have to buy a house in the US to take advantage of the recovery in the US, most of the wood comes from BC, buy companys that support the industry. TOL is another company that is up substantially.

but if you do have a house in Florida, can I rent it for the winter?

#140 Timing is Everything on 10.18.12 at 12:44 pm

You’ll like this.

If you’re an ‘enigmatic government insider’, you get ‘free’ advertizing to sell your house via the MSM.
Remember…this is ‘news’…

http://tinyurl.com/8zqmyy9

#141 Junius on 10.18.12 at 12:50 pm

#128 Ray,

You said, “I will tell you that Rick Santelli CNBC seems to lean that way without directly saying it.”

This is 100% proof that it is all a bunch bull. If Santelli knew anything he would shout it from the roof tops as he is slightly right of Hitler in his politics. And a moron.

Last time these stats were bad for Obama the right wing went on and on about how credible they are. Get your head out of the right wing echo chamber.

#142 Regan on 10.18.12 at 12:52 pm

I stayed at an apartment in Paris that was about 300 square feet. But it was built in during the reign of Louis XIV and you had to heat every square inch of it (probably by hauling wood up a 6 story winding staircase so steep I imagined it must be a leading cause of death at the time). But, it had a central courtyard if you wanted some gardening time (or you could just head to Court, since this area was where the courtiers lived), 12 foot ceilings, elegant tall windows and a lovely handcrafted built-in floor to ceiling cupboard/closet along one wall. Plus, ya know… Paris. Not effing Surrey.
I was in Vancouver recently, driving through mile after mile of single-story suburb. How anyone could imagine there’s a shortage of land to justify micro-apartments is beyond reason.

#143 Herb on 10.18.12 at 12:52 pm

#112 Bottoms_Up,

depends on the grounds on which you would ask for reconsideration and a potential appeal to the ARB. If it is a factual error on MPAC’s part (no. of bedrooms, for instance), it would only take a letter and a couple of phone calls. If it’s your guesstimate against theirs, I would forget it unless you had solid evidence, such as good comparables or inspection reports/repair estimates.

MPAC has gotten pretty good at current value/market assessments. They were high-handed and sloppy until the Ontario Ombudsman hauled them over the coals in 2006. However, each assessment is the baseline for the next, so if there is a reasonable chance of success, you should fight. Check this link for hints on how –

http://www.canadianjusticereviewboard.ca/archive_BH_introduction.htm

#144 kevsta on 10.18.12 at 12:54 pm

how is it a “recovery” while the patient is on life support (ZIRP) after 4 years, and the witchdoctors are now on their 4th adrenaline shot in the heart (QE) and have just committed to endless adrenaline until the goddamn corpse’s moral improves?

Oh and according to the IMF Europe has a $3-$4.5 Trillion black hole in it’s finances, nobody is recovering anytime soon.

#145 Gold is money on 10.18.12 at 12:59 pm

Go back to your conspiratorial, gold-humping sites. — Garth

invoking “conspiracy” how shallow and trite of you garth, spoken like a true red herring arguement liberal. you cant debate me with logic.

When I detect logic, I’ll respond. — Garth

#146 spaceman on 10.18.12 at 1:01 pm

#113 Gold is money on 10.18.12 at 10:44 am ” Meanwhile the US market has bounced off bottom, and is now in the earliest stages of a protracted recovery.
——————————————–

“protracted recovery Garth, you’re mad. The R.E. bottom has yet to be touched, US banks hold large stockpiles of foreclosed homes, Interest rates are still at historic lows and will go up dramatically, and the US has not yet had its Europe like crisis–when it does, 2008 will look tame.
which state defaults first, california or illinois.”

What are you basing this on? Your crystal ball? best clean it, Corporate earnings are increaseing, housing starts in the US are up 15%, lumber profits are booming, US builders are booming… show us some stats to prop up your doom and gloom…

And PS, Gold is a commodity, like soy beans and oil.

#147 walltiger on 10.18.12 at 1:06 pm

“So with home ownership at an astonishing 70%, it’s only natural developers would turn to Wal-Mart greeters, grocery store shopping-cart jockeys, parking lot attendants and financial advisors as the next victim class.”

Gartho, you are too funny for me. :)

#148 jess on 10.18.12 at 1:12 pm

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

…anything electronic /wireless can be hacked
that includes drones /data so the probablility is highly likely.

watch the nova segment with Tadayoshi Kohno
http://www.pbs.org/wgbh/nova/tech/can-science-stop-crime.html

http://www.ted.com/talks/avi_rubin_all_your_devices_can_be_hacked.html

#149 TRT on 10.18.12 at 1:12 pm

Buy Bell stock now.

Who do think The clowns at the CRTC are going to side with this afternoon? Or you could overanalyze and do a logical study and lose…Junius?

#150 jess on 10.18.12 at 1:14 pm

Avi Rubin is Professor of Computer Science at Johns Hopkins University and Technical Director of the JHU Information Security Institute. Avi’s primary research area is Computer Security, and his latest research focuses on security for electronic medical records. Avi is credited for bringing to light vulnerabilities in electronic voting machines. In 2006 he published a book on his experiences since this event.
http://www.youtube.com/watch?v=metkEeZvHTg

#151 luke8929 on 10.18.12 at 1:14 pm

According to Macleans, Canadians were the largest foreign buyers of American real estate last year representing a quarter of all international buyers. Contrast that with who came second (Chinese buyers – the infamous HAM). Chinese buyers represented 11%.

http://www2.macleans.ca/2012/10/03/attack-of-the-snowbirds/

So what happens to prices in the US if we get the crash in real estate here and those Canadians have to sell?

Mortgage rates in the US will never be lower and prices and sales are still anemic. We are told that rates will rise so what happens to price in the US when they do.

But thank goodness the HAM is now saving US real estate, its still working here right? Guess all those folks selling in Vancouver are buying Arizona and California now.

We now have QE4ever in the US, you can’t ease past forever. Earnings in the US are dismal from large cap companies including Google who reported today.

Remember the other big lesson of the 30’s depression was that people in cash bought everything at the bottom (Kennedy s and the shoe shine boy) and became very wealthy, those in assets like housing and stocks not so much. But all you hear from the fed is stable prices and now employment and the depression could have been avoided if we had just inflated the money supply to infinity, QE4ever. Still not convinced they have this (TNX in particular for housing) under control.

#152 broadway skytrain on 10.18.12 at 1:14 pm

google – EARLY earnings released – big miss – stock plunges , halted

#153 gladiator on 10.18.12 at 1:18 pm

@20 CanadianWatchdog:
I was a skeptic on Agenda21 until my 6 year-old went to school and I saw her agenda: on every second page at the top there are written phrases like “save power”, “recycle plastic”, etc. in dotted letters and the kids are supposed to trace them.
The brainwashing starts in Grade 1 and it’s on a very strong footing. I am not against saving energy, but I am afraid that this is a very smooth entry into banging something more radical into our kids’ minds, because “it’s good for them”.
Carbon credits market is the future!

#154 SCIB on 10.18.12 at 1:24 pm

#25 ccen
“United States Budget Dilemma.wmv”
http://www.youtube.com/watch?feature=player_embedded&v=EW5IdwltaAc

This sounds like a rational, logical summation of the debt crisis in the US.
However they have one ace up their sleeve. That is control of the printing presses and bond offerings. All they have to do is
inflate the currency 10% a year for a decade or so and that will slay the debt.
They will act when that is the best alternative. So far the best alternative is to not talk about the problem.

#155 };-) aka D.A. on 10.18.12 at 1:27 pm

Most recent buyer Okanagan Mainline Buyer Survey Highlights ;

FINANCING
52.5% Conventional Mortgage more than20% down
15.2% High Ratio Mortgage less than 20% down
30.9% All Cash buyer with no need for financing

WHERE DID THE BUYERS COME FROM
58.7% From within the Board Area
9.8% From the BC Lower Mainland
4.9% From other areas of BC
19.1% From Alberta
2.7% From Sask/Man
2.2% From Eastern Canada
1.3% From the NWT/Yukon
1.3% From outside Canada

BUYER DESCRIPTION
16.2% First Time Buyer
26.6% Upgrading Byuyer
2.7% Moving from Strata to Single Family Property
8.6% Moving from Single Family Property to Strata
6.8% Moving into a Retirement Community
9.9% Revenue Property Buyer
15.3% Recreational Property Buyer

So far this month of September there have been 168 Sales of residential properties of all types

Last year for the same period there were just 133 residential properties sold.

That, according to my simple math, is a 26.32% increase this September over last month to date.

BTW I do this stuff a couple times a day so posting it on this blog is no big consumer of my time (cut and paste). But thought you might like to know… you’re welcome. };-)

#156 onebadudde on 10.18.12 at 1:28 pm

>But only to those willing to dig to get the real data.

By dig you mean go to the same site where BLS U-3 numbers are reported, and click on U-6?

U-3 isn’t manipulated; it has a specific definition. If you don’t like it, you are welcome to choose some other metric. The key information is whether that metric is improving or not.

#157 Nemesis on 10.18.12 at 1:28 pm

“I’d ask if I could buy in.” — Hon. Garth

Rumour has it there’s a google sale on right now, OldPol… TeeHee!

#158 Ronaldo on 10.18.12 at 1:38 pm

#132 Stickler –

”Oh unemployment statistics are a hoot…”

Like this:

http://www.youtube.com/watch?v=O8TGgMkkEUE

#159 Old Man on 10.18.12 at 1:45 pm

The last time I lived small was at Tartu student residences which was an 18 storey modern building on Bloor Street. I may have been living in a shoebox, but the benefits were many with a common area; kitchen; great bathrooms; restaurant; laundry; free cable tv; and underground parking for $94.00 a month.

It was between Spadina and the St. George subway stations, and the babes were everywhere with plenty to go around – at night we played strip poker in the common rooms – say nothing. The movie theatre at the department of education had the best once a week for $1.00, and then there was always the Brunswick House. The downstairs level had the freak show on stage, and upstairs had the best jazz in Canada with standing room only – Garth will remember it :)

#160 EIT on 10.18.12 at 1:45 pm

Peter Schiff rents… awesome!

http://www.youtube.com/watch?v=OQr5clFsZMU

#161 Ronaldo on 10.18.12 at 1:46 pm

#129 tkid –

”Holy frak, the designs are tiny. One could go insane living there.”

Try this one out for size in downtown Manhattan

http://www.youtube.com/watch?v=Q4FoAr8i26g

#162 Snowboid on 10.18.12 at 2:00 pm

#67 WaterlooResident on 10.18.12 at 1:51 am…

Please provide supporting links to your claims. According to several Canadian job sites, engineering interns start at more than your are claiming your friend makes in Kitchener.

Not sure about Texas, but in Arizona checkout clerks at our local supermarket are making more than you claim engineers are paid at Brock.

Links please…

#163 };-) aka D.A. on 10.18.12 at 2:03 pm

#130Dontcallmeshirley on 10.18.12 at 12:06 pm
#118 };-) aka D.A.,

Could you be more specific?

You have seperate sellers clients and buying clients correct?

You tell each “…what they NEED to know”.

It can’t be simultaneously a good time to buy and a good time to sell…or can it?

You tell the sell client: good time to sell

You tell the buy client: good time to buy

Is that how it goes?

It depends on the clients particular circumstances. If they need to sell there is always a good and a bad way to do that just as if they feel they need to buy there is a good way and a bad way to do it. I help clients achieve their goals.

Sometimes I tell, more often sellers, that they should just stay put. This happens when through an initial consultation it becomes clear to me that they are not so motivated as to list their home at a realistic asking price. When a seller has such lofty expectations I explain that they are not so motivated to make the move so they should not as it would not be worth it to them given the current market conditions which they are not prepared to accept. Same goes for buyers with unreasonable expectations of being able to vultch. Vultures are not serious buyers and any such property as they might be interested in I can easily find more worthy clients for. So I tell the vulture “Ya know, it’s still not the right time for you to buy. Prices will be lower next month” Why would I waste my time trying to educate them and give them opportunities other more worthy folk deserve?

Make sense?

#164 cariboojohn on 10.18.12 at 2:09 pm

Life in the small world.
I bought a small 400 square foot condo,in Gastown in 2009 for 200 K. cash with parking.maintenance cost is $134.hydro $1.00 a day,insurance $15. per Mo. I rent out my parking for $100. per Mo. Have a cell phone, and internet bill which I don`t include with my housing costs. Take a 28 minute bus ride to my 37 year union job @$ 30.28 per Hr. I ride around downtown on a $50.00 bike. Living small is NOT that bad ! Have a good financial advisor, and YOU Garth. Small is the best thing I`ve ever done.

#165 Iconoclast on 10.18.12 at 2:10 pm

#140 Junius
“This is 100% proof that it is all a bunch bull. If Santelli knew
anything he would shout it from the roof tops as he is slightly
right of Hitler in his politics. And a moron.”

Nah, not really. This is about as loose a cannon can be in the MSM. Any more and he’d be out of a job in short order. And we all like to eat.

(All the flouride in the water is making us timid little f*#$ks, isn’t it?)

Ironically, the best financial news coverage in the West is coming from… RT. (Russia Today)
Ironic because I wouldn’t trust a damn thing they say about Russia… But they’ve got Wall Street nailed.

#166 Van guy on 10.18.12 at 2:11 pm

I’m not sure what’s wrong with my last post. But I guess anything MF related, will not make the board :(

You asked for my assessment of a specific security. Forget it. — Garth

#167 Old Man on 10.18.12 at 2:18 pm

I was surfing the canadian msm today, and am seeing articles about real estate and the economy which tends to mirror what Garth has been saying, and just smile about this all, as they are turning into a different direction, and wonder why? Perhaps, they have a need to cover their ass a bit, or are they reading Garth’s blog, and buying his books?

#168 EIT on 10.18.12 at 2:44 pm

#161 Snowboid on 10.18.12 at 2:00 pm
#67 WaterlooResident on 10.18.12 at 1:51 am…

There’s a difference between technologists and engineers. Engineers have a stamp and technologists make less money, unless they’re really good and an engineer trusts them with their stamp. STAMPY STAMPY!!!!

#169 IM in C on 10.18.12 at 2:50 pm

@137 aka DA
you wrote : When I say ‘investment’ I, of course, mean long term not speculative

I would be very interested to hear your definitions of ‘speculator / speculative ‘ and ‘investor / investment’.

#170 IM in C on 10.18.12 at 2:51 pm

and just for fun; lets hear Garth’s definitions of speculator and investor!

#171 SRV on 10.18.12 at 2:54 pm

“US recovery”

Garth… you forgot to mention the $85B per month (open ended) The Fed is printing to prop up this “recovering” beast… but what the heck, he’s got a prediction to support.

And… hold those tears on the missed opportunities resulting fron the AZ housing “recovery”… a sample property of a “livable” Pheonix townhouse for $18K (just reduced by 5%)… it seems there is still time to plop some hard earned cash on this sure thing investment…lol!

http://www.ziprealty.com/property/2526-W-BERRIDGE-LN-PHOENIX-AZ-85017/80763441/detail

Crap housing that’s not selling is usually…crap. This proves what? — Garth

#172 Dontcallmeshirley on 10.18.12 at 3:06 pm

#162 };-) aka D.A.,

Got it. You qualify your seller / buyer by seeing where their expectation is vs your understanding of the market.

If they’re too far off, such that you won’t be able to sway them to close a deal in a “reasonable” period, you skip them to not waste your time.

That’s reasonable and respectable.

#173 Canadian Watchdog on 10.18.12 at 3:07 pm

#152 gladiator

It’s not just the government brainwashing kids.

Genworth Press Release: Power of Children. Power of Words. Power of Home.

On October 10, Genworth Canada launches its sixth annual Meaning of Home Contest in support of Habitat for Humanity Canada. The contest invites grade 4, 5 and 6 students across Canada to submit a written essay about the meaning of home for a chance to direct $60,000 to a Habitat for Humanity build of their choice in Canada and win a pizza party for their entire school!

There’s something creepy about an insurance company, homeownership and kids in the same context. Link

#174 Wake up on 10.18.12 at 3:09 pm

#67 I doubt these numbers too since it is my field and I work in one of the poorest province in Canada (easy to guess if I say the most taxed place in NA). Maybe your area has too many engineers, they should move to AB where its minimum 50$/h in that field.

I’m still amazed by the RE prices in Montreal, over 42k a year and you are above the middle class, loll. I dont know where people get all the money for their mortgage, and how will they manage with rising interest rates. I hear tons of stories of people in 400k houses with no furniture at all, expecting to sell in 5 years with 30% profit and downsize after. People always tell me that the rising prices in Montreal is to reduce the gap with the other provinces, Id rather see my available income rise to the level of the other provinces first.

I hope for a correction of 40% in BC, so I can buy a nice house 30 min north of Vancouver and move out from my poor socialist province. At my salary, in BC, I will have an extra 20 000$/year after taxes, 5% less on sales tax, so I can afford a 400-500k house (my wife is a CA), not one over a million $$$ (imagine the mortgage payment at 7%, loll).

#175 Gold is money on 10.18.12 at 3:11 pm

#145 spaceman
What are you basing this on? Your crystal ball? best clean it, Corporate earnings are increaseing, housing starts in the US are up 15%, lumber profits are booming, US builders are booming… show us some stats to prop up your doom and gloom…

And PS, Gold is a commodity, like soy beans and oil.
————————————
-what do corporate earnings have to do with a second leg down in US real estate!
-are you suggesting rising housing starts are a signal of R.E. price recovery?
-lumber “boom” as you call it has nothing to do with price recovery in US real estate, nor is it an indicator of home prices now or in the future.
-what does “booming” house builders have to do with price recovery or as a predictor of another leg down in prices?
-go look up the stats yourself, see the number of houses the banks are holding back from the market, see the low interest rates which at historic lows still cannot ignite a decent recovery, look at the wage stagnation, look at real inflation, look at debt/deficits and personal debt, look at US jobs numbers as calculated by third parties.

PS, gold is not a commodity, it is not eaten or burned like oil and beans, it is hoarded as wealth, and it fulfills Aristotles requirements for money. In excpetional times it is also used as currency among the masses, currently it is only used as a currency amongst bankers.

Dont rely on Garth to define the difference between Money, currency and commodities for you. There do exist technical definitions you know.

Yeah, listen to Aristotle. — Garth

#176 Timing is Everything on 10.18.12 at 3:13 pm

#161 Snowboid – “…Arizona checkout clerks at our local supermarket are making more…”

Links please…

http://tinyurl.com/9qhluug

#177 Old Man on 10.18.12 at 3:13 pm

#170 SRV – Garth is saying there will be opportunities for a buy in Canada and USA, but all areas in either country are not the same. This will depend on location with various economic considerations that will include a target scenerio in any Province or State; a target city and a specific area within that city; not to mention the housing type as well. It is a complex mix, and when a particular property within this matrix seems too good to be true; walk away from it, as something is wrong.

#178 new-era on 10.18.12 at 3:22 pm

Just a year ago Global CBC and the province and Sun were all ranting and cheer Housing Housing Housing. Its called brain washing.

Now its the opposite, the are cheering bubble , debt crash, see europe, USA Greece

http://business.financialpost.com/2012/10/18/risks-of-eurozone-like-debt-crisis-exist-in-canada-report/

http://uk.reuters.com/article/2012/10/17/markets-canada-dollar-bonds-idUSL1E8LHKTY20121017

http://www.cbc.ca/news/business/story/2012/10/18/provinces-debt-europe.html

http://ca.news.yahoo.com/household-debt-numbers-spiralling-control-002508870.html

#179 };-) aka D.A. on 10.18.12 at 3:22 pm

#168IM in C on 10.18.12 at 2:50 pm
@137 aka DA
you wrote : When I say ‘investment’ I, of course, mean long term not speculative

I would be very interested to hear your definitions of ‘speculator / speculative ‘ and ‘investor / investment’.

Speculative = short term; looking for only quick speculative equity gain.

Investment = long term; seeking an income stream or other beneficial use to which an equity gain, should it come as in time it surely will, is a bonus.

Real estate is a long term hold; A smart man does not wait to buy real estate. A smart man buys real estate and waits.

To speculate or invest has nothing to do with time, and everything to do with the asset. — Garth

#180 GTA Engineer on 10.18.12 at 3:26 pm

#155onebadudde on 10.18.12 at 1:28 pm

>But only to those willing to dig to get the real data.

By dig you mean go to the same site where BLS U-3 numbers are reported, and click on U-6?

U-3 isn’t manipulated; it has a specific definition. If you don’t like it, you are welcome to choose some other metric. The key information is whether that metric is improving or not.

———————————–

Oh of course we are, that’s not the debate. The issue at hand is that the media is being encouraged to report the U-3 number and is brainwashing the masses into thinking the employment situation is improving. U-3 improvement, although correlated with U-6 historically, does NOT indicate labour market improvement. As others have pointed out, if your unemployment benefits run out, or you mowed your neighbour’s lawn last month, U-3 doesn’t consider you unemployed! While it’s great that U-3 is improving, the fact remains that this is NOT a good indicator of employment health in the US, and the media reporting it as such is uneducated, misrepresented brainwashing. The people reading this blog are educated (relatively speaking) on these things. Those outside of here, the 99%+, are NOT and are being misled.

But there is an advantage to being educated you see – take the knowledge that not all have and apply it for your own benefit. As I said earlier, post-election, the US stock market correction is coming. Did we all enjoy GOOG’s epic earnings failure today? Just the beginning..

#181 Define Deflation on 10.18.12 at 3:33 pm

“#56 TRT

Regarding inflation and “velocity”:

Keep it simple man. No need for economic jargon;”

Yeah, I’m responsible for that jargon usage. I think I kept it fairly restrained and I think it’s at a level that most can understand (always good to stretch one’s level of understanding regardless). Anyhoo, people can take from it what they wish.

But I also think the details are important. People should understand that this level of monetary intervention is unprecedented, and international in scope. If too much of this money seeps into the system, inflation could appear suddenly and rapidly. And we’re not talking about incremental increases.

I appreciate Garth’s investment advice, mostly sound recommendations. However, he seems to be quite sanguine and definitive, suggesting he knows with certainty what the future looks like. I don’t believe anyone should presume to know the future with such certainty, certainly not someone dispensing financial advice. And investments are best approached from a risk/reward perspective with an understanding of the conditions impinging on them.

Garth also seems to think deflation is the overriding theme going forward. But then he uses the term deflation very loosely, so I’m often not clear on what his stance is. I felt that understanding the distinctions was important in the context of individuals making prudent investment decisions (for instance bonds are a bad place to be when inflation flares up). We’re certainly at the end of a debt supercycle whose natural tendency is a process of deleveraging. However, central banks are countering this tendency with massive amounts of money-printing to reinflate asset prices or to keep them inflated. I’m merely throwing up a flag of caution and saying beware of the threat of severe inflation. I won’t presume to know if it will happen, but there is a lot of kindling in the fire. Simply be aware of the underlying conditions and let them inform your investment decisions.

#182 Manipulatchicks of the world unite on 10.18.12 at 3:54 pm

People are being screwed by all governments in the name of the best interests of the people. It is so sad that honest work and diligence does not pay anymore. The governments and financiers induced most of the people into a cattle run. Sorry to say that, but the cliff is near.

#183 neo on 10.18.12 at 4:15 pm

If they were the largest economy in the world, the planet’s technological leader, possessor of the reserve currency and greatest power, running at undercapacity and shorted by you, I’d ask if I could buy in. — Garth

One thing is for sure this earnings season. U.S. technology is not providing any leadership with earnings or that Google early earnings release debacle.

#184 Joe on 10.18.12 at 4:29 pm

Wait till the sucker buyers find out that banks and lenders dont mortgage condos under 480 sq ft….let alone 260 !!! LOL

http://www.canadianrealestatemagazine.ca/news/item/1396-teeny-condos-promise-big-returns

#185 Mixed Bag on 10.18.12 at 4:44 pm

Smoky, I agree with you here:

“Rather than empower the kids to stand up for themselves the machine wants to crush at an early age future threats to its power, and have weak slaves at the same time.”

I remember as a kid defending myself in a fight, the one time, and boy did *I* get in trouble, it felt like more so than the kid who threw the first punch. (Maybe because mine landed better). Even with the older kids around to tell the teachers what happened. God forbid we defend ourselves, stand up for ourselves, then we’re called vigilantes. Don’t defend yourself, you get beat up. Defend yourself, you get beaten down.

“What really caused this tragedy was a low self-worth, a low self-esteem.”

Bullies know who to target.

#186 Ralph Cramdown on 10.18.12 at 4:48 pm

#154 };-) aka D.A.

A few observations, you old attention whore you.

– I’d have to admit that if you’ve survived this far into the Okanagan bust with real estate commissions as your primary source of income, you’re probably a better realtor than most, or perhaps just have lower cash flow requirements.

– Hey, maybe things ARE picking up in the Okanagan. That’s great for you and all the people who live there. I’m happy for them, really. But if the Lower Mainland and Alberta bust, I don’t think the Okanagan is going to continue its slow climb out of the hole.

– Your continuous, long postings give the impression of someone who spends his days sitting around waiting for the phone to ring, which goes against the thrust of your general argument, regardless of your claims that it’s all just a giant cut and paste job.

– If you can consistently crank out 600-1,500 real estate related words a day, why don’t you start your own damn blog and maybe get some business out of it? Your spelling and grammar are at a level which makes it hard for me to believe you’re a realtor at all!

#187 Miss Woodles on 10.18.12 at 4:51 pm

Rent is not a four lettered word:
http://www.globeadvisor.com/servlet/ArticleNews/story/gam/20121018/GICARRICK1017ATL

#188 T.J. BONES on 10.18.12 at 4:55 pm

Sir Garth : I have proudly received my invite to the conference. I am unsure as to the admittance to the event? Is there a ticket number, or do we just show our print out? How do we fight off the gate crashers? Some confirmation information would be helpful, where to pickup passes etc.

The event was mentioned only on this blog, and I have hired a room of sufficient size to accommodate those from here who wish to attend. Just come. Then you can wonder who all the weird people are. – Garth

#189 Old Man on 10.18.12 at 4:56 pm

#174 Gold is money – I will not disagree that gold has no value, but what if I took a one troy ounce to pay my rent with a landlord, or took an ounce of silver for a haircut? It will not fit in with the real world to pay a bill at this time, as they would all laugh at me because cash is king; not silver or gold.

#190 };-) aka D.A. on 10.18.12 at 5:02 pm

#171Dontcallmeshirley on 10.18.12 at 3:06 pm
#162 };-) aka D.A.,

Got it. You qualify your seller / buyer by seeing where their expectation is vs your understanding of the market.

If they’re too far off, such that you won’t be able to sway them to close a deal in a “reasonable” period, you skip them to not waste your time.

That’s reasonable and respectable.

I don’t “sway anyone to ‘close’ a deal”. I give them the information they may currently lack that they can make an informed decision but I do not ‘close’ my clients. Never have and never will.

I may ‘close’ another the other party in the negation process as I seek to achieve the best deal for my client but ‘clients’ I do not close as that would be a precarious slippery slope. I have lots of opportunity to close my ‘clients’ and to do so would certainly up my hourly rate but helping people make a choice is far better than forcing them to decide.

Beyond that, trusting that you are not being sarcastic, yes what you say is essentially what I do. Of course it does take some time through fact finding initial consultation to determine what, if any, the prospect clients motivation is and if their expectations are realistic. I’d rather ‘turn them down’ than hold myself out as able to achieve their unrealistic expectations and end up ‘letting them down’. I am not the right REALTOR for everyone and not everyone is the right client for me. I’m not about to dilute my time and resources that could be better spent with realistic clients by taking on unrealistic clients who take typically three times as much work and never amount to anything anyway compared to realistic clients who practically always do in a third the time.

And then there is, of course, my family to which I try to be a good provider and make myself available to enjoy as much quality time with as possible. Speaking of which, it’s my turn to make dinner tonight… I gotta go.

#191 Mixed Bag on 10.18.12 at 5:04 pm

So a colleague is telling me she found the perfect little house for me, for 699K in Etobicoke. I ask her if she’s crazy. She tells me, no, you can carry it. Why would I want to? I’d effectively be tripling my monthly mortgage payments when all is said and done. For something not much bigger than what I already have.

With the savings of not moving, I can afford to send my kids to private school, extra lessons, buy another car, and the list goes on. When did people stop looking at the final price, and only look at the monthlies?

#192 Canadian Watchdog on 10.18.12 at 5:10 pm

From today’s Bill C-45 release.

Division 17 of Part 4 amends the Canada Mortgage and Housing Corporation Act to remove the age limit for persons from outside the federal public administration being appointed or continuing as President or as a director of the Corporation.

And that folks is exactly how they keep the same reckless policies, same agenda and same crooks in office.

#193 Old Man on 10.18.12 at 5:31 pm

#180 Define Deflation – Garth has explained this all well as assets will deflate, as in Real Estate, and there will be some inflation with other consumer products, as they all will go hand in hand as a complex scenerio, but he is right. So take the hit with both, but the main one is asset deflation. So sell out of the Real Estate to save capital, and the consumer inflation will become a cake walk in life.

#194 Patrick on 10.18.12 at 5:43 pm

House prices have been over appraised but article does not say by how much. From reading the article this isn’t single digit over appraising. This is going to get ugle real fast.

http://ca.finance.yahoo.com/news/analysis-canada-house-appraisal-tool-202103908.html

#195 metal-nut#756 on 10.18.12 at 5:51 pm

“Central banks have succeeded in stabilizing Europe.”-Garth Turner

I don’t know what’s funnier, your statement, or your latest blog picture. Next, you’re going to tell me you are a fan of Bernanke and that he’s also stabalized the USA. You underestimate the crisis in Eurozone, things are getting much worse, not better. Even the IMF admitted lately they were wrong to push austerity.

Remember folks, can-kicking economics = serenity now…. INSANITY later!

#196 Timbo on 10.18.12 at 5:53 pm

http://www.bloomberg.com/news/2012-10-17/private-equity-in-atlanta-after-picking-phoenix-clean-mortgages.html

“Everybody is in Atlanta right now — they’re following the distressed market,” Tom Ruff, managing director of AZbidder.com, a Phoenix-based firm that buys foreclosed homes for investors that expanded to Georgia at the request of clients. “Some of the large investors have stepped back a ways in Phoenix.”

20 years from now there will be a handful of employers and a handful of landowners controlling 80% of the market…….

http://www.guardian.co.uk/world/2012/oct/18/greece-protests-general-strike-austerity

“After three years of non-stop taxes and wage cuts it’s got to the point where nothing has been left standing,” she said drawing on a cigarette. “It’s so bad families can no longer afford to even bury their dead. Bodies lie unclaimed at public hospitals so that the local municipality can bury them.”

Ugly cu-de-sac of broken dreams……..

#197 Darlene on 10.18.12 at 5:53 pm

Okay, let me see if I got this right. 290 sq ft is too small and all the McMansions are built with shit materials but have granite and stainless. But any older house that is around 1200 sq ft is a tear down and not worthy either.

I’m beginning to think that the people who post on this blog would never find anything that would make them happy, regardless of how much prices correct.

#198 Junius on 10.18.12 at 5:56 pm

#164 Iconoclast,

You said, “Ironically, the best financial news coverage in the West is coming from… RT.”

Agreed. I think Lauren Lyster’s Capital Account is a really great show on most days. Some great guests you can’t see anywhere else. And she is hot.

#199 Junius on 10.18.12 at 6:01 pm

#148 TRT,

You said, “Buy Bell stock now.”

Fail. You lose again.

The so-called “clowns” at the CRTC got it right.

#200 Reasonfirst on 10.18.12 at 6:22 pm

#196 Darlene “I’m beginning to think that the people who post on this blog would never find anything that would make them happy, regardless of how much prices correct.”

I would call that a sweeping generalization.

#201 LuckyRenter on 10.18.12 at 6:23 pm

Are you convinced the U.S. housing market is getting healthier?

Yes No VOTE
Results
Yes:
49.4%No:
50.6%

http://www.bnn.ca/

Canadians voting on the US market? Most Canucks couldn’t find Milwaukee. — Garth

#202 Old Man on 10.18.12 at 6:41 pm

#187 T.J.BONES -It is like this as Garth took a small venue with his gig in Toronto with about two thousand peeps coming to see what he has to say, and what is he going to do? Now he will have the hot babes sitting in the front row; he will have these Amazon women on standby to protect him, and the Real Estate losers will sitting at the back taking notes; need I say more?

#203 Picasso on 10.18.12 at 6:44 pm

Just play Mexican and come down to the southern U.S.

Cheap as H E L L

#204 Dan from Richmond Hill on 10.18.12 at 6:44 pm

Provide evidence, any evidence, that US Bureau of Labour stats are being manipulated. — Garth

Garth, why should I trust the stats offered by US Bureau of Labour and not the Frankenumber MLS Home Price Index?

Government vs unregulated special interest group. — Garth

#205 Men Who Stare At Sheeple on 10.18.12 at 6:55 pm

#20 Canadian Watchdog
As with global warming, Agenda 21 is just another UN ploy at trying to create and implement global governance. As always the goal is to strip away state sovereignty in favour of global governance. Basically humanity’s total loss of rights and civil liberties to a global government.

Here is an interesting article dealing with Agenda 21 http://www.canadafreepress.com/index.php/article/48898

Take a peek behind the curtains and you will always find the true forces behind these agendas, the shadow masters of this World, the private international banking cartel (Rothchilds, Rockefellers, Warburgs, etc.) and their corporations and mass media machine working behind the scenes.

The secretive plan to create a World government under the UN is real and has been in the works for the last century or more. It is a work in progress and is well underway!

Thanks to the brainwashing and mass mind control of the MSM and governments the people remain blissfully ignorant as to what is truly going on around them and the world they live in. People must understand that Stephen Harper and most governments around the world are not working in the best interests of their people!

It’s time for people to wake up to this reality!

#206 Canadian Watchdog on 10.18.12 at 6:59 pm

#188 Old Man

More gold is currently being used in international payments and settlements systems. You have much to learn old man.

#207 David McDonald on 10.18.12 at 7:04 pm

Hi Garth,

Assessment notices have been mailed to Ottawa homeowners this week. In many neighbourhoods assessments have increased by 25%. This is one more side effect of the cheap money policy which has driven up housing prices and consequently driven up assessments.

Condo owners are unfairly hurt by this increase because they require so much less service from the city compared with suburban taxpayers. They pay based on assessed value like everybody else in spite of being efficient city dwellers. This applies in spades to investors who are renting condos (because they can’t flip them) since they already have negative cash flow. This will put additional downward pressure on condo prices.

Your photo of lions coming for lunch is very appropriate; the lions represent city government.

#208 Pr on 10.18.12 at 7:26 pm

I can tell you now, its not that bad for the east province for this month of selling volume , may be -5 to -10% max.

#209 Onemorething on 10.18.12 at 7:36 pm

The only reason the US market has picked up in housing starts is due to the two year bankruptcy laws around non-recourse mortgage defaults now resetting and some can now qualify.

There is little evidence of the resale market improving.

Any growth in housing is falsely reported or optimistic from the builders.

I agree with Garth that the US market has a long slow way back but bottomed, unlikely and there is knowone going back to work anytime soon.

3.0x income is great if you qualify and to qualify you better have a job.

Great. Now the builders are lying, too. This blog is truly pathetic today. — Garth

#210 TRT on 10.18.12 at 7:43 pm

I was wrong on this one…but doesn’t change the fact that you are a L.

Didn’t realize there was a change in Chairman… That Von something guy gone…CRTC is trying to improve their image with the consumer for the next round of consolidations.

Some insiders have said that they knew this would be denied…as BELL wants to take over SHAW and/or merge with TELUS. Hmmm…do you think CRTC will keep nixing indefinitely?

#211 TRT on 10.18.12 at 7:44 pm

Genius,

they are clowns!

#212 TRT on 10.18.12 at 7:56 pm

#180 Define Deflation

Garth’s views are polarizing and appear never-changing. He sticks with a thesis and people with an emotional void take it in. That is how you get people to follow! “Coercive Pesuasion” is what it is called.

Intel very interested in this.

I am very intrigued by this blog as many followers seem to distrust any opposing views. Amazing. It’s similar to the cults popping up in North India. The leaders, called “Baba’s”, set their own rules under the guise of Sikhism. The followers follow the Baba like he is a God — even though Sikhism states that there will be no other Guru. Go figure.

These baba’s are making millions; and the followers don’t give a second thought even if you tell them. Corcive Persuasion and the Truth don’t go together. Hence, you can yell and plead all you want and no one will listen to your views.

So people who disagree with you have an ’emotional void’? I’m tempted to smite you. — Garth

#213 };-) aka D.A. on 10.18.12 at 8:00 pm

#185 Ralph Cramdown on 10.18.12 at 4:48 pm

Your spelling and grammar are at a level which makes it hard for me to believe you’re a realtor at all!

Ouch! Given the opinion you and the Blog Dawgs have for the intellectual capacity of REALTORS® in general that is indeed a scathing critique of my English. I only wish I could blame it on being a second language but English is my first and, sadly, only language – save for enough Spanish to order a beer and ask for directions to the washroom. I went to Mexico to immerse myself in and learn Mexican but that damned Spanish kept getting in the way.

Things are not ‘picking up in the Okanagan’ Mr. Cramdown, they are ‘holding steady’. Apparently my poor command of the English language has prohibited me from communicating this limiting fact as evidenced by so many thinking I am saying its going gangbusters here. I am not saying that. It is not going gangbusters, but neither is it tanking. It is holding steady and has been doing so now for more than four years.

And I don’t sit around waiting for the phone to ring Ralph. Much of my time is spent making calls – what we in the business call ‘lead generation’. Clients move out of town, they die, they move into their last home (a retirement home) and my client base consequentially dwindles. This is a very competitive market and if a current client does not want to accept my opinion on the value of their home they can easily find another REALTOR who will say it is worth more. This is a tough market in which client loyalty can be put under great pressure when their expectations cannot be met. If a REALTOR does not generate new business every day they will soon be out of business. So, for the better part of today I am at my desk with a couple computer screens on and multiple windows open actively calling ‘suspects’ to determine if they are good ‘prospects’ worthy of pursuing as potential ‘clients’.

You think I get a lot of rejection on this pathetic blog? You should listen in on the 25 plus cold calls it typically takes to find that one elusive needles in the haystack.

But this is the underbelly of the business… the part I like least, the part no REALTOR likes to do, the part few are aware of, the reason it gets called a ‘job’ for if it weren’t for that part it would all be fun and games. But, as any honest successful REALTOR will tell you, what I am doing today, cold calls, is a most important part of this business which if neglected will inevitably preclude those more enjoyable aspects of the business and ultimately the opportunity to earn an income.

It does take a lot of psychological preparation to make those calls and believe me it can be mentally exhausting and sometimes demoralizing. So every hour or so I make some of those ‘warm’ ‘follow up’ calls to my existing client base to build my self-esteem back up. Other times I just log onto http://www.greaterfool.com to vent by putting someone like you in your place by letting you know how little you know about what you think you know. You know NOTHING about me or my business. I must admit though, I can be bit of an attention whore. What REALTOR isn’t? You gotta have balls to be and survive in this business. The meek may inherit the earth but a REALTOR they’ll never be.

Thank you, now it’s time for me to dial number 18.

#214 TurnerNation on 10.18.12 at 8:00 pm

Toronto couples in Housing Wars.
Why is no-one smiling….

#glum

http://www.torontolife.com/daily/informer/from-print-edition-informer/2012/08/29/real-estate-bidding-wars/

#215 kam on 10.18.12 at 8:03 pm

New mortgage rules are going to kill first time buyers like me.

My mortgage broker called up and told me that as per new rule I will qualify for $380k .In spring, I was pre-approved fo $460k :(

Do you have any money? — Garth

#216 ccen on 10.18.12 at 8:18 pm

#60 Daystar
I agree with you but when you raise the taxes to the americans with how much you propose make sure you wear a bullet proof vest, those guys are not canadians to bend down and take it, especially the south. Everybody has their own predictions, time will tell. US will not collapse, their wealth will be denominated in different currency that’s all and don’t worry they will find a way to do it.

#217 Westernman on 10.18.12 at 8:36 pm

Reply to post at #203
” Government vs. an unregulated special interest group”
I have news for you – government IS an unregulated special interest group.

#218 Grooby on 10.18.12 at 8:41 pm

#60 daystar,

Nice comment, a refreshing change from the typical tripe about manipulating unemployment rates, etc.

I’m thankful that Canada (and Australia) have strict gun-control laws against automatic weapons and assault rifles.

Some of these gold-humping conspiracy theorists are a step away from going over the edge. Even their own shadow is conspiring against them!

#219 Onemorething on 10.18.12 at 8:42 pm

Any growth in housing is falsely reported or optimistic from the builders.

Great. Now the builders are lying, too. This blog is truly pathetic today. — Garth

Haha…lying is a strong word, manipulated reporting is more like it, kinda like the U3 not including part time employment nor those who stopped looking for work in the US, and all in the face of an election!

I think you know what I mean here!

#220 McLovin on 10.18.12 at 8:45 pm

DA:

FINANCING
52.5% Conventional Mortgage more than20% down
15.2% High Ratio Mortgage less than 20% down
30.9% All Cash buyer with no need for financing

BULLSHIT!

Every banker I speak to says 90%+ take the max amort possible.

Do you really believe only 15% of buyers need CMHC?

Do you think maybe people aren’t being truthful on your survey?

#221 Gold is misunderstood on 10.18.12 at 8:49 pm

People seem to think that gold has no value, and yet put their faith in paper currency. The US HAS already gone through hyper inflation (with the continental dollar), which is why they went on the Gold Standard in the first place – so it never happened again. They brushed again in the 70’s once they went off the gold standard, until Volker had to raise the rates significantly to defend the dollar, even if people lost their homes. The petro dollar has kept inflation at bay since then, as all central banks need to buy it, which keeps the currency stronger than it should despite being devalued; it was a critical deal with the Saudi’s and works alongside the reserve currency status.
Utah is now the first State (in 2011) to reinstate the value of gold – you can now use it as currency in any store; several others are now considering it as well. Unfortunately, the gold is taken at face value right now, instead of market, but it is the first step in the right direction. A recent survey showed the biggest issue facing the average American was not the economy, or housing, but rising prices – this will continue. Anyone who looks at the official government stats for inflation, and compare to the cost of everything going up significantly more (food, energy, education, healthcare, insurance etc…), can only laugh.

#222 Derek R on 10.18.12 at 8:55 pm

#215 kam on 10.18.12 at 8:03 pm wrote:
My mortgage broker called up and told me that as per new rule I will qualify for $380k .In spring, I was pre-approved fo $460k

But that’s good for you because all the people who will be competing against you just got told the same thing. So none of you can afford to pay as much as you could this time last year.

That means that you won’t have to bid so much to beat them. So you won’t owe so much to the bank. So you won’t have to pay so much back. Sounds to me like you’re a winner all the way.

Of course it’s bad for anyone selling a house. But that’s not you: you’re a first time buyer, not a first time seller.

#223 Gunboat denier on 10.18.12 at 9:03 pm

Many good comments today from both sides about living in very small spaces. Works for some but not all.

DA – yes you are a little long winded today but appreciate the “time to buy/sell” explanation. Those that have not been in the market for its ups and downs may not understand though

67 Waterloo – I pay new tech school grads $20/hr. Some
years of experience will get you closer to $30.

101 Steve – and I make more than my employees. Why would I be in business if I didnt?

#224 Devore on 10.18.12 at 9:13 pm

#178 };-) aka D.A.

Sounds like “I know it when I see it”. Words like “investor” and “speculator” already have meanings people agreed upon, so when they say them others know what they are talking about, without having to guess or read their minds.

Investment = long term; seeking an income stream or other beneficial use to which an equity gain, should it come as in time it surely will, is a bonus.

“As in time it surely will”? Surely? Sounds speculative to me. If your investment’s earnings increase in the future, it might, earnings could decrease, costs could increase, other adverse economic events might shrink profit margins.

#225 };-) aka D.A. on 10.18.12 at 9:16 pm

#221McLovin on 10.18.12 at 8:45 pm
FINANCING
52.5% Conventional Mortgage more than20% down
15.2% High Ratio Mortgage less than 20% down
30.9% All Cash buyer with no need for financing

BULLSHIT!
Every banker I speak to says 90%+ take the max amort possible.

Those survey results were for the amount of the purchase financed NOT amort. (amortization) period.

And absolutely I believe those stats a reasonable representation of the percentages of homebuyers who last month entered into a Conventional Mortgage, High Ratio Mortgage and All Cash (not any mortgage).

Believe it or not McLovin not nearly as many as you believe are so destitute. The percent of homeowners with a high ratio mortgage I am quite sure is less than half the number who own their home free and clear. Consider the equity of those who do own free and clear. Consider the probability that those owned homes likely have a significantly higher average value than that of those which are high ratio financed. Certainly the high ratio financed homes, given these current economic circumstances, is a concern but I think not nearly so much as we are led to believe.

Please endeavour to prove otherwise.

#226 vonder bra on 10.18.12 at 9:24 pm

Garth

So Real Estate boards fudge stats …..

But Governments don’t ?

Please….. this is insulting!

I’ve been in government. Have you? — Garth

#227 John on 10.18.12 at 9:29 pm

SCIB wrote:

“So far the best alternative is to not talk about the problem.”
——
That’s the deal alright. Notice how there’s about a five fold increase in people who notice what’s up here? The whole “doomer” escape hatch has folded up like the house of cards it was.

#228 Snowboid on 10.18.12 at 10:32 pm

#175 Timing is Everything on 10.18.12 at 3:13 pm…

One site – http://tinyurl.com/9vkk7bj – reports $ 9.23 per hour

Even using your link – based on 160 hrs a month indicates $ 9.38 an hour, much better than Waterloos’ claim of $ 7.20 an hour for engineers in Texas.

Maybe you have some links supporting WLRs’ claims?

#229 daystar on 10.18.12 at 11:15 pm

#216 ccen on 10.18.12 at 8:18 pm

I tried to post another comment about U.S. deficits that would have been helpful, it must have gotten lost in the ether so I’ll just go off memory (this one is much stronger anyway, less mistakes particularly a whopper with discretionary spending).

The U.S. federal debt is now at 16 trillion. Combined state debt is $4.2 trillion for a total gross public debt excluding municipal debt of $20.2 trillion. The balance sheet of the U.S. treasury has assets of $ 2.7 trillion so total gross public debt excluding municipal debt is $17.5 trillion. U.S. GDP last year was $15.09 trillion leaving the U.S. with a total gross public debt to GDP of around 115%. There may be pension issues that could boost this number but thats where its at, making U.S. gross public debt slightly better than say… Italy.

The U.S. deficit for 2012 is 1.1 trillion.

http://www.cbc.ca/news/world/story/2012/10/12/us-budget-deficit.html

Is it possible for the U.S. to move towards a balanced budget within 4 years? Sure it is.

http://en.wikipedia.org/wiki/File:U.S._Federal_Receipts_-_FY_2007.png

If personal income taxes were scaled up to 20% over 4 years (its at 15.3% now) personal income tax revenues would jump by $339 billion. (if GWB tax cuts are allowed to expire, these guys:

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

say income tax revenues would increase by $435 billion. Increases by .5% per year to 10% corporate taxes would increase corporate tax revenues by another $45 billion leaving us with $384 billion worth of increased revenue. Social securities I would try to make sustainable through increases over spending cuts to social security and I doubt that it would take much but i haven’t looked into it.

So our deficit after realistic tax increases is at $716 billion. Lets look at spending and this is where the U.S. election becomes pivotal because we have two dramatically different fiscal approaches:

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png

If we leave social spending alone, that leaves defense and discretionary spending. It is possible that with the end of U.S. war in the middle east and some base closures throughout the rest of the world that defense spending could be chopped by a third. This would reduce the deficit by $ 231 billion. This takes the deficit down to $485 billion and its realistic. Over the last 20 years defence has averaged 3.3% of GDP and $485 billion is 10 billion under the average. Now.. where do you cut next? Non defence discretionary? 10% straight across the boad over 4 years? This drops the deficit by $65 billion and we are now at $420 billion. Can that be made up with GDP growth over 4 years to get us to balance? To rely on growth to make up the difference, GDP growth would have to grow by 28.4% with 32% income tax increases in mind to generate another $420 billion worth of income tax revenues. That would mean a GDP of $19.37 trillion four years from now over last years $15.09 trillion. Can the U.S. economy generate 28.4% growth over 5 years? Its possible but it really depends on whether or not the U.S. can become an energy exporter again. If the U.S. can pull it off through lower domestic demand with more transporation efficiency and continued production increases, then it is possible and it really opens up the ability for the U.S. government to spend less on defence as a big part of defence spending traditionally has been to secure energy supply.

Mitt Romney on the other hand wants to cut taxes by 20% (I believe in the second presidential debate that Mitt said this works out to a $100 billion tax increase from today since it comes after GWB’s tax cuts expire) and says he can go back to balance in 4 years and was on record early this year saying that he’ll kill Obama care on his first day in office.
http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png

So Romney axes medicaid. Where else. One would think that this will save $835 billion and he could rely on a hundred billion extra in tax revenue and growth to make up the difference but the problem with that plan is that this would put about 20% of the population (poor and middle class) without any form of health care at all. I believe vouchers has been mentioned, its hard to say how expensive that would get (Obama suggests half of the $835 billion if Romney doesn’t want to kill people outright with public medicare gone) and that means Romney will fall short a few hunded billion unless he embraces major cuts to defence (Mitt has pledged 2 billion in new defence spending over 10 years) or breaks his promise for 20% tax cuts.

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

Either way, regardless of who wins this election, if GWB tax cuts are left to expire untouched, income tax revenues could increase by an estimated $435 billion in 2013. Romney claims his 20% straight across the board tax cuts would amount to an increase in income taxes of $100 billion.

http://www.huffingtonpost.com/2012/10/17/mitt-romney-five-point-plan_n_1973653.html

And then, of course, there is the spectare of debt interest with rising rates but the fed could tame it with Q.E. but what a contrast of presidential choices and the decisions they want to make concerning fiscal policy eh?

Either way, whoever wins, both presidents will have to raise income taxes, cut defence back to a realistic 3.3% of GDP and make some tough spending cuts going forward and the result is potentially paring down the deficit to $200 billion or so over 4 years.

Now… if I was to tell a gold bug that the U.S. deficit would be a mere $200 billion or less 4 years from now and could prove it, how shiny would gold be then? Where would the doomers go now? The point is… the U.S. fiscal deficit is still fixable. There is a shot at balancing budgets regardless of who wins over the next 4 years and what would that do to PM’s if it happened? Would gold bugs and doomers find a more productive way to spend their energies? Probably not… but it might be more quiet.

Cheers

#230 daystar on 10.18.12 at 11:16 pm

#219 Grooby on 10.18.12 at 8:41 pm

lol, they are on the fringe. Thanks, man.

#231 kam on 10.19.12 at 8:03 am

#224 Derek R

Thanks Derek for your kind logical explanation.You made my day.

#232 Gold is money on 10.19.12 at 9:01 am

Government vs unregulated special interest group. — Garth

so self regulated self interested gov is to be trusted! And you probably also believe in the fable of democracy, where people actually have power, hahaha
Garth even as an “elected” MP you got your ass handed to you, the people have no power, and the government is a tool of the elite, your direct experience should have taught you that.
manipulation, fraud and scam are all deeply ingrained in the human psyche why is it so hard for people to believe that gov/business/regular joes, would harm them.

#233 Gold is money on 10.19.12 at 9:09 am

#232 daystar

#219 Grooby on 10.18.12 at 8:41 pm

lol, they are on the fringe. Thanks, man.
——————————————–

Yes daystar thanks for reminding me, I am on the fringe, where as you are stuck in the acquiescent herd, you are main stream, you believe mainstream media, you eat a mainstream diet, etc.. it is on the fringe, the leading edge where you can see clearly, not stuck in the middle of the mob.

You are all so lucky to have been graced by my pressence here on this thread…to be exposed to an iconoclasts views, to have your sacred cows defiled and your conditioning questioned.
Capatalize on this and escape from herd thinking.

#234 daystar on 10.19.12 at 12:37 pm

#235 Gold is money on 10.19.12 at 9:09 am

Thanks, you are too kind. Yes, I am lucky but alas, I’m just a gentle lamb in the middle of it all, taking my place amongst the herd where my shepherd keep me safe from harm and want. :)

The one with hair white like wool with eyes like a flame of fire, his feet fine bronze as if burned in a furnace, his voice like the sound of many waters, with 7 stars in his right hand, with countenance the strength of the sun and out of his mouth comes a sharp two edged sword (truth) … yeah! That cat has a message for you in Revelations 3:17 and beyond. Happy reading.

#235 -=jwk=- on 10.19.12 at 12:51 pm

@GTA Engineer #42

When the unemployment rate goes down during a conservative presidency its PROOF of neo-con success. When it goes down during a democratic presidency it is a CONSPIRACY!

Mostly, it is just bad math. Two variables with a common numerator but a different denominator will grow apart if the same quantities are added to both numerator and denominator. The relationship between U3 and U6 is variable, but proportional. In short as U3 goes up (gets worse) U6 MUST go up by more it gets worse faster due to the large deonominator. Try to find a scenario where U3 goes and U6 goes down. Won’t happen. Math (technically arthimetic) doesn’t work that way.

#236 GTA Engineer on 10.19.12 at 5:07 pm

#237 jwk,

@GTA Engineer #42

When the unemployment rate goes down during a conservative presidency its PROOF of neo-con success. When it goes down during a democratic presidency it is a CONSPIRACY!

Mostly, it is just bad math. Two variables with a common numerator but a different denominator will grow apart if the same quantities are added to both numerator and denominator. The relationship between U3 and U6 is variable, but proportional. In short as U3 goes up (gets worse) U6 MUST go up by more it gets worse faster due to the large deonominator. Try to find a scenario where U3 goes and U6 goes down. Won’t happen. Math (technically arthimetic) doesn’t work that way.

—————

I agree – but these two fractions should not diverge as much as they have. Interesting article:

http://dayhagan.com/looking-through-the-unemployment-report/

As the article suggests, the larger spread between the U3 and U6 are because of the size of the labour force, which shows that U3 is becoming less and less representative of the actual employment picture due to its disconnect from reality. U6 is better due to its more stable definition of labour market size (ignoring things like how long people have been looking for work, whether they’ve given up, etc.). Let’s report unemployment how it should be reported: # of people of employable age (>18) who do not have employment. Divide it into FT and PT, and boom – you’re done.

#237 GTA Engineer on 10.19.12 at 5:09 pm

In essence, following my previous post, a 7% unemployment rate today is much worse than a 7% unemployment rate was in 2008. MUCH worse. And it’s well above 7% in the USA, meaning the country is in a sorry shape indeed.