Almost 5,000 properties over a million are listed for sale at the moment in Greater Vancouver. In the GTA, 2,500 are on the market for more than seven figures. This represents at least eight billion dollars worth of real estate, some of the most vulnerable in the nation.
Why? Simple. First, if you have a million dollars and you put it into a balanced, fairly conservative investment portfolio, you made about $100,000 last year. If you bought a house on the other hand, you made nothing, paid $60,000 in land transfer and property tax and now have to buy a new Audi for the driveway. Second, million-dollar listings no longer qualify for CMHC insurance, which means a buyer has to pony up at least $300,000 in cash to move in.
So what? So people with wealth know it makes more sense to use the bank’s money at 2.8% to buy a house, and invest your own cash to get three times that. Especially when you structure a tax-deductible mortgage. This is why a huge number of houses changing hands in 2012 for a million or two carried 90% financing. It was just smart.
But now that’s gone. So are sales. Prices are next. And if homes in this category decline by just 10% (seems to be a given), that carves close to a billion out of the property market.
How serious is this? Listen to realtor Arnold Shuchat, who works the mean streets of Richmond BC, where almost every house last year sold for a mill or more:
“Primarily in Richmond, most people who bought in the last 3 years are technically under water. What I mean is that they are for sure going to be unable to sell their property for more than they purchased it; they are definitely likely to have a selling price net of commissions yield proceeds of disposition less than the amount owing on their mortgage.
“I say this because in our previously expensive real estate market, buyers were throwing everything they could at the down payment and they would be lucky for a house purchase to be able to do so with a conventional mortgage at 20% down. The market being down some 25-30% depending upon neighbourhood, means that they are 40% through their 5 year fixed mortgages and in the event they were at term today, the discussion at the bank would most likely revolve around them coming up with sufficient equity in the form of a new 20% equity payment to finance a conventional loan, or CMHC insurance for a non-conventional one. Both scenarios are grim and place yet another purchase of the next house phase in jeopardy.”
It’s this realization of immediate and pending losses that has more and more people asking, like Dave, how to short the market.
“Garth: I enjoy reading your blog posts and maybe you’ve written about it already and I’ve missed it or maybe you haven’t written about it. But what is a good way for someone to take advantage of the coming housing downturn?
I am in the camp that thinks that commodities will decrease as china slows and it will impact commodity exporting currencies/economies like Canada. I don’t think there will be another type of 2008 crash but I do think in the future our stock market will get hit. Perhaps that’s part of the reason the TSX is down for the year and US equities are up. Besides shorting the TSX, the loonie and the banks, any other way for an individual investor?”
And Gary writes this: “From the US housing experience: short REITs exposed to residential and multi-family real estate; short the banks; short home-improvement companies, such as Home Depot (which is due for a correction soon, anyway).”
Truth is, Canada has almost no financial instruments available to profit from a housing correction, and those who claim otherwise are blowing smoke. The banks, which control 75% of the market and hold 65% of all mortgages, are bullet-proof. That’s because they have already securitized a ton of high-ratio loans through CMHC, which (by law) also provides insurance against default on all risky home borrowings. Even if real estate values collapsed by 30% nation-wide in a year, bank profitability (now at record levels) would barely budge. Shorting the banks hardly seems swift when you give up juicy dividends and cap gains.
REITs? Forget it. Most trust managers have used cheap rates to refinance their portfolios at favourable, long-term levels. Second, most of the big REITs own office towers, shopping malls and business parks full of good tenants with lengthy leases. The economy would have to collapse into a protracted, deep recession (which won’t happen) for these guys to see any impact. Meanwhile, the worse a housing correction ends up being, the better residential REITs specializing in apartment buildings (like Boardwalk or Canadian Apartment REIT, with 65,000 units) will do. When people stop buying condos and houses, they rent. Duh.
Home Depot? Nope. Companies like that and Loew’s do the bulk of their business in the US, where real estate is flowering again with sales and prices ascending. You should be wanting exposure to companies like these, not gambling against them.
So what can you do?
Well, I covered a lot of this ground in my last book, which has been out now for three years (jeez, time for another…). The best shorting strategy is to sell your real estate when everyone is horny for a house and buy one later when nobody wants one. In places like Richmond, for example, that moment is passed, and with 30% declines it’s evidence that, sadly, I was correct. In other locations, like 416 (sub-$1 million), or poor Calgary, there’s still time to exit.
The people benefiting the most from this are the wrinklies with the bulk of their worth tied up in a single real estate asset, and deflowered virgins who purchased in the last few years with little or nothing down. The former need to get liquid and invest in financial assets. The latter must act fast to avoid being wiped out, lest they move back to their moms’ basements, where they’ll be tormented mercilessly and turned into psychotics.
Of course, remember how to sell: At this point in the market cycle, go for a short closing (why tempt fate?), even if it’s inconvenient or more costly. Avoid any offer with conditions, especially the sale of an existing home – you may waste valuable spring-market time on a dud. Get a home inspection done yourself before listing to negate that condition, or avoid the surprise of a butchered price if the report finds big flaws. Use a realtor who can properly paper the deal or, at the least, a lawyer specializing in real estate transactions. Insist on a fat deposit (you usually don’t get it if the deal collapses, but it’s good incentive for the buyer to close). Most important thing: sell now. Next important thing: don’t buy. For a long time.
Oh, and if you own in Richmond, learn to snorkel.
197 comments ↓
DELETED
FIRST time posting!
Garth Turner accuses mortgage marketer of posing as frustrated condo renter
http://o.canada.com/2013/04/28/garth-turner-accuses-mortgage-marketer-of-posing-as-a-frustrated-condo-renter/
=======================
The KLM story has lit up the blogosphere
Thank you Garth.
Why a short closing?
One less than second….
While taking my Mom out for a Sunday drive today through the toney parts of Oakville I noticed many vehicles with New York plates parked at open house signs.
I find it hard to believe that the Yanks are up here looking and potentially buying in this over-heated market, especially when all the homes where I was driving are over $1 million, while in their home State they could probably buy a street full of homes for that same million.
Some of the homes for sale are obvious tear-downs, but the most of them are brand new builds, replete with stainless steel appliances & metres of granite counter-tops.
Thanks CMHC for our bloated residential market! I wonder what on earth these buyers will face when the s**t hits the fan? Are people that stupid? I’m confused.
It’s different here:
http://www.thestarphoenix.com/business/Property+value+assessments+skyrocket/8303940/story.html
Let me be this time :)
Excellent, every one wants to buy a house in calgary these days. Honestly, every single person i have talked to in past few months is either looking for a house or already has purchased it.
We also want to buy a house for our young family, since rents are so damn expensive for a larger place, here in Calgary. But when we look at house prices, it just doesn’t feel right to purchase such a big mortgage.
Yes thats right people. You don’t buy a house, you buy a mortgage.
HOW LONG SHOULD 1 WAIT
the million dollar question is how long do we have to wait before buying makes sense again? I’m guessing at least 5 years, and by then interest rates will be quite a bit higher, negating a lot of the savings from the discount unless you have a ton of cash down.
Focus on debt, not the monthly. — Garth
It makes sense that there are better things to do with your money than put down 20% + taxes + closing costs on a million dollar home. Goodness forbid that these types move into anything less than a million dollar dream home.
I wonder what the market is like for $999,999 homes then?
In Orlando last week. The cab driver said he paid $150,000 for his house 4 years ago, it’s now worth about $190,000.
His relatives paid $350,000 for similar houses before the bubble burst and their houses don’t even have a pool, that is, his house with a pool is nicer.
The guy said, you know I could flip burgers and still pay my mortgage, most of my family can’t afford/have stopped paying theirs.
Oh and he said, no economy there, it’s ALL Disney centric, after that, nothing.
If there is an increase in foreclosures – for CMHC mortgage insurance backed homes, while they may get the outstanding mortgage amounts paid off by the CMHC insurance, banks will be faced with the costs of maintaining the homes and properties until they get re-sold and absorbed back into the market.
Inconsequential. Foreclosures and defaults are a relatively minor occurrence in Canada. — Garth
http://www.realtor.ca/propertyDetails.aspx?propertyId=12752370&PidKey=1575099294
HAM & Champagne in Richmond, BC.
But now that’s gone. So are sales. Prices are next.
No. Foreclosures are next.
Nope. Tiny numbers, no matter how you spin them. — Garth
Garth, what about Genworth financial. They insure mortgages in Canada, wouldn’t this be a good short option? They would see the brunt of losses in a housing downturn, or do they have a lot of american exposure as well?
#1 Johnny, #2 mx420, #6 Tom Vu, #10 Gogo:
My Kreskin senses tell me you boys always come first ;)
I BOUGHT IN 91 FOR 200 G SOLD N 05 FOR 500 G STARTED RENTING & TOLD MY LANDLORD I JUST SOLD FOR HALF A MIL THINKING THAT WAS ALOT OF MONEY BUT NOW SAME PLACE GOES FOR 1.9 I CANOT BELEIVE PEOPLE WOULD PAY THAT MUCH
“The trouble with shorts”… I was assuming a post on spring fashion.
Ici in Montreal we have no such problem with le million dullar homes, more than un demi of those are bought by very rich foreigners, see http://www.montrealgazette.com/business/Foreigners+make+half+luxury+home+buyers+Montreal/8257721/story.html . Because of this, prices will only go up for years to come, especially with global tuurmoil driving those rich people eve more to la belle province!
#5 You want a short closing so you can take the money and RUN before the buyers read The Globe and Mail and change their mind.
http://qz.com/74937/how-to-become-internet-famous-without-ever-existing/
Santiago Swallow ?i did not know you could buy twitter followers!
-From the link posted above by Victor:
“Wow, Garth Turner and his cult of followers need to move on,” she wrote on her Facebook page on Friday. “I’m yesterday’s news…”
It’s kinda true actually. They just want you to love them Garth. Give them love.
#16 DreamingInTechnicolour on 04.28.13 at 5:33 pm
If there is an increase in foreclosures – for CMHC mortgage insurance backed homes, while they may get the outstanding mortgage amounts paid off by the CMHC insurance, banks will be faced with the costs of maintaining the homes and properties until they get re-sold and absorbed back into the market.
Inconsequential. Foreclosures and defaults are a relatively minor occurrence in Canada. — Garth
——————————————————–
That’s what they said in the US too. And the big question with CMHC is how much to they have in the kitty to honestly pay for foreclosures? Remember how Fannie and Freddie were “suppose” to back stop such an occurrence, well didn’t quite turn out the way they hoped.
Inconsequential. Foreclosures and defaults are a relatively minor occurrence in Canada. — Garth
———————————
Now.
Always, actually. You cannot walk from mortgage debt in Canada without onerous consequences. Few do. — Garth
HARPO Attack ads will backfire when used on the young one…
One thing to attack an old dude who’s had his hand in the till by virtue of age, . Another to go after someone the screwed youth will come to idolize…..
I know the herd…… I know the future…..
If commodities continue their slide we might see much higher foreclosures in Canada than at the pick in US.
10-20 % might be very realistic fugure.
Absurd. Focus on negative equity, not what you saw on American TV news. — Garth
Always, actually. You cannot walk from mortgage debt in Canada without onerous consequences. Few do. — Garth
————————————–
I don’t think it is a matter of choice.
Time will tell. I foresee crises of historical proportions.
You would. — Garth
Absurd. Focus on negative equity, not what you saw on American TV news. — Garth
———————–
Disagree. Betting a silver maple leaf on it…
I am just not smart enough to be an adult. Extremely grateful to be fully liquid & debt free, but I really need to get off my ass and get a financial advisor, as I really don’t have a clue how to grow my money. Is this normal for 30 or am I just an idiot? I feel that it’s normal and that we’re all normal idiots together.
Why Canadians are stuck in a low interest rate trap
http://www.thestar.com/business/personal_finance/2013/04/27/why_canadians_are_stuck_in_a_low_interest_rate_trap.html
My first mortgage in the early 90s was a one-year term at 14.25 per cent. It kept me awake at night, wondering how I’d cope if rates kept rising. This week you can get a five-year, fixed term under 3 per cent.
Back then, there wasn’t much borrowing slack either. A home-secured line of credit was a decade away. Businesses had credit lines, but everyone else had loans with fixed terms which meant you had to pay them off.
Now you can get a line of credit with a 3.5 per cent rate, secured against your house, with an option to pay only the interest every month. The banks use that as a selling feature. You can spend $10,000 on a holiday, or a renovation, or new furniture, anything you want and only pay $29.16 a month. Of course, you still owe the $10,000.
#26 Mocha on 04.28.13 at 6:20 pm
-From the link posted above by Victor:
“Wow, Garth Turner and his cult of followers need to move on,” she wrote on her Facebook page on Friday. “I’m yesterday’s news…”
It’s kinda true actually. They just want you to love them Garth. Give them love.
=========================
Here’s the link. Keep in mind, she has been deleting all dissenting views on the Ratehub facebook page. Perhaps she’ll be more transparent on her personal page.
https://www.facebook.com/kerri.lynn.mcallister/posts/10100477937626771
#20 Andrewski on 04.28.13 at 5:49 pm
#1 Johnny, #2 mx420, #6 Tom Vu, #10 Gogo:
My Kreskin senses tell me you boys always come first ;)
====================================
I am honest.
Others cheat …..and use steroids and use Einsteinian wormholes !
Being “honest” F_r-St on this blog should at least be F_r-zSt round bye in the Stanley Cup playoffs….or Nobel Prozac runner -up.
It is very interesting that in the years I have been reading this blog, anyone, or anything that Garth as exposed as being either: unethical, deceitful, immoral, or even illegal, none of the individuals/organizations who have been exposed as such, to my knowledge I can’t recall any one of the exposed offering an admission of wrongdoing. In fact, quite the opposite, they have only responded with either: denial, more lies and deceit, or, as in KLM’s case, a hostile verbal personal attack on the messenger of truth, Garth, and his blog, also including the followers of his blog in the assault. KLM, from myself, personally, from me to you, I too, like Garth, also stand in the light of truth and honesty in everything in my life, and I consider an attack on me personally by you KLM, as merely another insult from the dark side, and I feel honored to be in Garth’s company, and not yours…….thank you!
I just heard trumpets. And a choir. — Garth
Nope. Tiny numbers, no matter how you spin them. — Garth
Ok blog dogs. Make yourselves useful instead of posting the same link a 100 times on this blog. I track enough data so here's one for anyone.
BC New Case Report
Visit this site every two days and sort foreclosure cases in the document into a spreadsheet. Then we'll see how tiny the numbers are.
#1 Johnny on 04.28.13 at 4:51 pm
“DELETED”
——————————————————————–
Life is full of disappointments.
Deal with it….
On http://www.greaterfool.ca/2013/04/09/as-predicted/, we read:
” …It’s the same argument which demolishes most life insurance policies. But I’ll save irritating that industry for another day.”
I’m watching out for the ‘another day’… or maybe that’ll be what’s in the next book?
I know of a home in Burnaby that, until very recently, had been on the market for about 18 months. It was listed for around 1.5 million and saw only one small price reduction of $50,000 during that time.
It’s a beautiful home at the end of a cul-de-sac backing on to a parkland greenbelt. About a year ago, other slightly less well-appointed homes in the same area were selling for about 1.2 million after only a few months on the market.
It seems those days are over. When the real estate listing expired (for the final time) the exasperated realtor told the owner there’s not a hope in hell of selling for anywhere near his asking price. He would either need to come significantly or find himself another realtor.
The house is now rented out. I have no idea what the rent is but, realistically, it can only be a fraction of the carrying costs of that property. Apparently the owner is waiting until the market ‘improves’. I think it will be a long wait indeed.
Here’s some things that also might be a long time coming:
Global TV devotes a special primetime newscast exposing itself as having been in collusion with the real estate industry for decades.
The Prime Minister issues a public, heartfelt, long overdue apology to Garth Turner and thanks him for his tireless effort in educating Canadians about financial risk.
The finance minister holds a press conference admitting to years of malfeasance beginning with the introduction of the ‘zero down, 40 year mortgage’, saying: “Hey, we all make a boneheaded move every now and then. I’d like to see you give it a try.”
#181 Gary M on 04.27.13 at 6:44 pm
“1) I did not explicitly say “short Home Depot” (although Home Depot is long due for a correction). I meant, look at companies that are very sensitive to the housing industry. If you want more examples, here’s a few: Rona, Canadian Tire, Leons, Richelieu. Is that a little easier to understand?
2) Look at my post above re: banks. I particularly discussed TD, with you in mind.
3) REITs are highly correlated to the housing market, even commercial REITs. Look what happened to US REITs in 2007. Look what happened to Canadian REITs in 2009. If you don’t believe me, look it up. Don’t take everything that you read for granted.
Lastly, AK, it’s okay to have thoughts of your own every now and then.”
——————————————————————-
Fair enough, Gary.
I wish you luck….
Garth, my contact on the ground in Calgary who does excavating in the residential house industry says there is no slowdown coming, unless some shock black swan event happens. Says its booming in a crazy sort of way.
Sounds like Vancouver 18 months ago. — Garth
First time I have to disagree with Garth. Foreclosures are coming. I heard the same story in the US (Lived there 1995-2005). People will never walk away from their homes Never! It would ruin their credit, too! They did, and they did in drives. Once the dam breaks….
Just weight…
Freedom first.
It is very interesting that in the years I have been reading this blog, anyone, or anything that Garth as exposed as being either: unethical, deceitful, immoral, or even illegal gal, none of the individuals/organizations who have been exposed as such, to my knowledge I can’t recall any one of the exposed offering an admission of wrongdoing. In fact, quite the opposite, they have only responded with either: denial, more lies and deceit, or, if as in KLM’s case, a hostile verbal personal attack on the messenger of truth.
……….
It’s called business… This chic will never be a cover girl.. But she has excellent business instinct, she will prosper..
She’s on the ice fighting for puck, not like most who sit in the stands and whine.
Good for her….
Don’t Short…
Shorting is always very risky…
Warren Buffett bootstrapped himself into the richest investor in history and rarely if ever shorted anything.
So don’t short but do sell what could get killed in a home price decline.
Consider selling unneeded cottages. Consider selling rental properties that you own especially single family homes.
For most of us, selling our principle residence is just too damn inconvenient. But for some people it may be wise.
#37 Please add me to that list of honored.
#23 Jean Le Flipper on 04.28.13 at 5:59 pm
You think the luxury segment is safe in Montreal but you may want to think twice. Over on another blog that shall remain nameless you can find this bit of what is termed as ‘Ugly’ news: “Montreal has nearly as many homes for sale right now as Toronto and Vancouver COMBINED! And, they have twice as many condos for sale as Toronto.” (http://theeconomicanalyst.com/content/canadian-housing-and-economic-trends-good-bad-and-ugly)
Would seem safe to say that Montreal is on a very large precipice about to fall into the St Lawrence – lock, stock and luxury home.
Saw a house today. Ukrainian car salesman investor. Asking a premium of 2 million, hoping for a bidding war. Will set a new bar in the street. We will see tomorrow if it sells. As an aside lots of Arabic and Chinese potential buyers. Foreigners. This is in Mississauga. I can only assume that this is the demographic of the 2 million dollar buyer. Mineola neighborhood.interesting times. Sitting on the sidelines and watching.
Looking forward to seeing the numbers for April. Starting to think we won’t see major declines until next year. So many amateur flippers still buying properties and bulldog hoping to hit gold.
#47 Shawn good advice
Just wondering if this attainable homes(sublime lending)
scheme is going on in any other province?
Toronto might be implementing this next.
You have $2500 bucks and you got yourself a condo, woo hoo!
http://attainablehomescalgary.ca
I just heard trumpets. And a choir. — Garth
===========================
Maybe check pacemaker batteries….recommend ones with Rabbit as mascot.
#47 Shawn on 04.28.13 at 7:28 pm
Don’t Short…
………
Seriously, are you serious…..
So let’s go painfully slow up the chair lift, but never zoom down the mountain on our waxed snow board.
When markets tanked in 2008 took about 9 months to hit bottom, as so called it on globe and Mail.. 4 years to catch up..
@ #14 Angry But Not Unhappy Twenty Something on 04.28.13 at 5:27 pm
It makes sense that there are better things to do with your money than put down 20% + taxes + closing costs on a million dollar home. Goodness forbid that these types move into anything less than a million dollar dream home.
I wonder what the market is like for $999,999 homes then?
———————
I’m seeing an extremely hot market for sub-$1M houses in Toronto… $1.1M properties have come down, and $800k-$900k properties have gone up (in some cases, WAY up).
See my comment from a couple of days ago on a North Toronto dumpy teardown house selling for $950k, down the street from where a 5-bdrm renovated house was also around $1M just 2 years ago:
http://www.greaterfool.ca/2013/04/24/the-new-eden/#comment-238522
austerity is getting to the some of the folks in spain …would you cut off your arm with a chainsaw so you could collect insurance ?
================
doesn’t this say usa justice for sale?
James Henry: Swiss banks are negotiating fines to avoid prosecution, while billions of dollars continue to be hidden away from taxes – April 26, 13
politically exposed people (pep)
the biggest list yet – hsbc geneva 79,000 clients from all over the world
http://www.therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=10134
#33 Larf:
No, you are not alone. I am 34 and I haven’t got a sweet clue where to start myself! Garth is a great start, though!
As for KLM, she probably did that story because she needed extra money to pay for her rent increase.
And SM, you are right: she’s no cover girl. I say that with all due respect, too.
I, for once, disagree with Garth. I think there are two ways to short Canadian real estate:
1. Short Home Capital Group (HCG: TSX)
Canada’s largest B lender has massively expanded their operations from 2009 on, and has been getting out of insured mortgages for the higher interest rates of uninsured mortgages. They also have 90% of their exposure to Ontario and B.C., and we all know those two provinces are driven by the GTA and Greater Vancouver.
2. Brookfield Real Estate Services (BRE: TSX)
This is Royal Lepage’s parent company. It’s a little more complicated to short, since it’s relatively illiquid and it pays out an 8% dividend. There’s no doubt Royal Lepage’s business will suffer during a slowdown.
If I may, I did write about how to how to short Home Capital using options. If anyone is interested:
http://financialuproar.com/2012/11/23/how-to-short-the-canadian-real-estate-market-using-options/
Here I sit, broken hearted, tried to short but only started. (Spotted on the 53rd floor gents’ wall ;-) )
Inconsequential. Foreclosures and defaults are a relatively minor occurrence in Canada. — Garth
Why then do you think CMHC is asking RE boards not to disclose forclosures on MLS or to buyers?
So buyers are deceived. — Garth
The pic is an interesting metaphor…..
Today’s youth….. How screwed…
And lifting that bar bell is only for auto insurance. Forget everything else.
Residential REITs and Home Depot should be fine through all of this.
Renting goes up but so does the amalgamation of households. All of the suites to accommodate that will help Home Depot quite nicely.
Know anyone who has put in a suite lately or rented out a room? I sure do and it is clearly on the increase.
One of the blog dogs noticed NY plates in abundance, in his neck of the woods. I have seen a TON of Washington plates = and California and to a lesser extent Oregon, here in Vancouver.
I talked to a friend in Bremerton Washington, who is looking to get out of the States, as he is nervous about the geo politics, etc.
Canada is seen as a safe haven, for some Americans. Sadly Americans are some of the least traveled people on the Planet. Less than 35% have Passports.
So we have a new acronym? SAM?
Stupid American Money?
Richmond has the perception of having a high percentage of offshore owners. How will the recent news regarding residents living in Canada but working in another Country affect this market after Revenue Canada pursues these individuals for taxes? Why does it cost 1 million dollars to live below sea level?
Gold Losers: Ron Paul, Morgan Stanley, Kyle Bass And More
http://www.valuewalk.com/2013/04/gold-losers-ron-paul-morgan-stanley-kyle-bass-and-more/
(He left out the rich wanna-bes on this blog)
None of this e-book stuff for me. Spend all day at work in front of screens.
I’ll be printing it out – double sided – at work, natch.
It’s dead, bleached, flattened trees, or nothing.
A little bit off topic but am looking to pick the brain of some of our readers here…
BIL is an “owner” of a Shoppers Drug Mart store out west and claims an income in excess of $200k based on the one year he’s been there. He’s on the hunt for a second store now so he can up that salary to $300k and further his real estate interests before things start going up like crazy again.
Do these numbers seem legit to anyone out there in that industry? If so, holy crap, I’m in the wrong business!
Yes, Canadians can walk away from mortgages. It destroys your credit rating and you have to work in the underground economy where the banks can’t garnishee your wages. Thousands of Albertans did it in the last housing crash 1982 – 1986. Ten years later you start over again, and the banks have forgotten who you are. There were also thousands of dollar deals, where Albertans sold for $1 plus assumption of the mortgage to a numbered company. The dollar dealers never made a single payment and then rented out the house cheap for cash. It took the banks four or five months to foreclose, and the dollar dealers would disappear to their next house with a new numbered company.
I bought my house in 1982 for $80,000. The owner had listed it for $100,000, and was happy to let me have it for the existing mortgage, plus he paid the legal fees.
Again, I am not going to comment anything, you be the judge
http://recharts.blogspot.ca/2013/04/april-sales-stats-preview.html
We drove around the open houses in our neighbourhood today and they were all like a ghost town. The agents must feel like the Maytag repairman these days. So different from last year when there was a stampede at every house.
For DonDWest: Mainly men getting hit our East.
http://www.nfb.ca/film/cottonland
In this feature-length documentary, photographer Nance Ackerman describes the havoc prescription painkiller OxyContin wreaked in the already weakened Cape Breton town of Glace Bay. The film guides us through a culture of economic and social depression where we encounter men and women at different stages of dependency. Demystifying the world of the addict while showing us the complex social nexus that led to such despair, Cottonland emphasizes the importance of a collective approach to tackling addiction.
…
Consider Steppenwolf’s “The Pusher” lyrics. Before my time, but…
“…But I never touched nothin’
That my spirit could kill
You know, I’ve seen a lot of people walkin’ ’round
With tombstones in their eyes
But the pusher don’t care
Ah, if you live or if you die”
#1 Johnny on 04.28.13 at 4:51 pm
DELETED
Next time if you must go with…..
The sum of all today’s comments minus The sum of all today’s comments plus 1
Victor V on 04.28.13 at 6:42 pm
Why Canadians are stuck in a low interest rate trap?
————————————-
Canadian dollar seems might lose some value, people are already shorting it.
Hence comes the inflation and with 0 interest rates….
Garth is way toooooo optimistic on the coming crises, I understand that being serious analyst requires political correctness, however I see a hell storm coming.
There is NO WAY we are going to get away that easy, with 10-15 % decline in housing market and mild recession.
With these levels of debt there is no way to increase interest rates and with significant inflation looming….
It is going to be nasty. And with all this outsourcing, practically most of the high paid jobs disappearing overseas…. We might be in much worse shape than US.
NEVER trust a seller who has had their own inspection done. Always have your own inspector look at it.
#66 JD on 04.28.13 at 8:32 pm
Gold Losers: Ron Paul, Morgan Stanley, Kyle Bass And More
http://www.valuewalk.com/2013/04/gold-losers-ron-paul-morgan-stanley-kyle-bass-and-more/
(He left out the rich wanna-bes on this blog)
—————————————
I don’t think you are getting the picture.
Comex inventories are almost depleted, gold and silver prices down and huge physical demand in Asia…
It will become VERY INTERESTING in the year or two, maybe much earlier as no physical metal holders are selling, it is mostly paper/STF sells.
Ps. Smoking man, bi-annual Bay St. charity poker event on Wed. I’ll be there:
http://baystreetkids.com/
To short Canada I sold my CAD hedged S&P500 ETF and bought it back in USD. Simple, eh?
Why? — Garth
Walking away from a Mortgage…
Dale from Calgary at number 69 says:
Thousands of Albertans did it in the last housing crash 1982 – 1986.
*************************************
Yes in Alberta you can give the house back and walk away form a mortgage with no further responsibility to pay it. EXCEPT that is if the mortgage is CMHC insured in which case you cannot. And almost all the people with negative equity will have CMHC mortgages.
I suspect CMHC arranged for that rule after all those Albertan’s walked in circa 1982.
Anyhow like Garth says the U.S. in 2008 was unique and the same situation will not apply in Canada. We will not get the massive price declines nor will very many walk away.
Garth,
I’m 6 years into a 20 year universal life policy where I pay 35$/month. I don’t have any dependants.
Should I cancel it?
Thank you.
HOME CAPITAL
Yeah, I sold my shares in that one years ago as the growth seemed unsustainable and I have predicted for years they would run into problems. Had I shorted it, I would have sullied my shorts my now.
There is plenty of money to be made on the far less risky long side. I have lost money exactly three years out of the past 24 years. And I go basically 100% equities but I know how to pick ’em.
#75 Party On Garth
NEVER trust a seller who has had their own inspection done. Always have your own inspector look at it.
——————-
Agreed. Learned the hard way. I do agree with Garth that its could be a wise investment for the seller to avoid any surprises and help to present you’re property as a safe(r) bet.
In case you didn’t get the memo:
If you don’t know the game by now, you can’t position yourself to play it.
Richard Koo Nomura Securities: A Balance Sheet Recession….
https://www.youtube.com/watch?v=aWDTlCk4fyY&t=00h28m12s
For some, this is just a refresher…
What interests me most about the KLM business is, the reaction of the 2 participants, Susan Pigg and KLM. Susan tried a little damage control, to salvage some semblance of integrity . KLM’s reaction is F— you , get over it
#64 Bill Gable:
We could call it “Uncle SAM” money….
Inconsequential. Foreclosures and defaults are a relatively minor occurrence in Canada. — Garth
There’s a lot more to your statement then you realize, Mr. Turner, or perhaps you do realize.. You know very well that banks are -not- foreclosing on delinquent homes. There is a significant inventory of mortgages that are in default that the banks are not moving for all sorts of reasons, including political.
Actually, this could be a subject of one of your columns.
i am feeling the heat…long time reader since 2009, renting on Vancouver’s North Shore. Recently had to move to West Van to enroll my kids in a better school (they have issues). Wife came into some money through an inheritance and is GAGGING to buy something. wants to put a $200K down on a $1M home. I make $180K a year (she has no income).
I keep saying wait- homes are languishing and going for less than asking but she is running out of patience and is at my first thing in the morning and late at night. I am starting to drink and hit the purple kush just to escape….
i need some evidence of a crash to come along quickly and save me. a
This hedge fund disagrees:
http://m.theglobeandmail.com/globe-investor/meet-the-man-whos-selling-canada-short/article11585150/?service=mobile
Good luck to the investors. — Garth
@57 IF you still own BRE, get out now. I went to their annual meeting (at the hockey hall of fame. Nice place). They have no clue. They lost agents(=revenue ) for the first time ever last year, but put it down to a ‘timing issue’. Gulp. I bailed a few weeks later after the post annual meeting bounce :)
Patiently Waiting if you are still out there please post another list of South Surrey listings. I enjoy watching the listing prices reduce and selling prices go lower and lower.
Why is Richmond being hit so hard first? I heard it was because of the tsunami in Japan scared the HAM to higher ground but they are buying in Morgan Creek which is surround by tidal ditches.
Continuing the debate from a previous entry (sorry, couldn’t help myself):
“Don, nostalgia aside, today’s Mustang’s are incomparably more advanced than the 1966 models.”
Bulls**t! Today’s automobiles break down at a far greater frequency than the automobiles of yesterday. Modern day cars are literally armed with computer programmed “kill switches” – so you have to buy more automobiles.
In the past Ford was built to last; today Ford is built to crap!
As for the topic at hand, the best way to short Canadian real estate is to simply off shore all of your investments. Don’t hold anything Canadian – it’s bound to go nuclear. Don’t hold Canadian dollars.
#68 Aquarium in the sky
Do these numbers seem legit to anyone out there in that industry? If so, holy crap, I’m in the wrong business!
—————
Being an owner in a related industry (albeit private not franchised) I can say the earnings can be legit. If the amount you state is actual ‘salary’ paid by owner to themselves through payroll with taxes deducted this would be very good. Im guessing the income stated is revenue…and again is this net or gross? Also if he is a franchise owner he will be paying franchise fees. Your friend could have lucked out with the right business in the right location at the right time but before you keep seeing the grass as greener clarify if you’re hearing an actual ‘salary’ income, and if its net or gross of taxes, fees etc. (overhead).
actually, you can walk away from mortgage debt. once the bank gets its judgment against you for the difference between what you owe and what they got after foreclosing, you declare bankruptcy. odds are many people will do this as they will also have credit card debt, car loans, lines of credit etc in addition to the mortgage debt. bankruptcy gets rid of all of this. foreclosures will rise if prices drop significantly.
Krugman-in-Wonderland
#86 Heatsmoker – you’ve been reading this blog for years, you make $180,000/yr., your starting to drink and you need evidence of a crash. Hmmmmm I think you need help alright but not from anyone on this blog. Nice try.
#77 TurnerNation on 04.28.13 at 9:28 pm
Nice see you there
Re: #75
But I would trust an homeowner who revealed any defects in the property during a viewing much more next to another seller.
Obviously I would also get my own inspection done as well though. The seller obtaining an inspection is going to help with pricing the place, and also probably lead an a decreased likelihood of an offer not getting past the conditioned stage.
#13
Focus on debt, not the monthly. — Garth
—————
THIS can’t be said too often. Too many it seems have been brainwashed by the MSM, daytime talk shows (infomercials) and HGTV to do the opposite. How’d that work for everyone? On this point can we start calling negative equity what it is…debt.
#55 Smoking Man
We live in a corporate-socialist economy. Obviously, you can’t short the “too big to fails.” The losses are socialized -therefore you can’t short. These companies can only go up or sideways until the government collapses.
Sure, I could see them letting one big player fail (Genworth maybe?) aka Leeman Brothers just to give us the illusion we have some semblance of a free market. Lucky guess, unless you’ve just admitted in an online forum that you have insider information? You didn’t just inadvertently confess to insider trading, did you?
Garth,
What do you think will be vulchable first: Condos or cottages?
I’m thinking condos.
Why would you want a cottage? — Garth
I’d like to better understand your statement that a 10% return would have been expected for 100k invested in a balanced portfolio last year. TSX was up only 4%. If you have a good part in things like bonds, that would typically have lower-end returns, how does that lead to 10% overall. I can understand that some people would, depending on their allocation/picks, but it seems to me that stating that a return like that would have been a given last year is misleading. If I’m missing something, please explain, I would very much like to better understand.
A 60/40 portfolio made up only of the global equity index and Cdn bond index returned 9.25 per cent last year. A competent manager adding some alpha got it to 10 quickly. So, where am I misleading, exactly? — Garth
@#87 Heatsmoker
Keep drinking.
Stop smokin the purple kush and bake it into some brownies.
Feed wife home made brownies.
Sell the kids to West Van Arabs.
Eat some of your brownies
relax.
70% of s&p companies beat forecast in first quarter that reported so far.
#68 Aquarium in the sky on 04.28.13 at 8:43 pm.
To own/operate a Shopper’s Drug Mart, you HAVE to be a licensed Pharmacist. No exceptions.
Typical Pharmacist at SDM makes around $120K/yr; therefore, an owner/operator making $200K/yr is not unrealistic. In fact, many do.
My family friend’s wife is a Pharmacist at SDM in Brampton. She’s in this salary range working 40 hours/week. She has a Bachelor’s Degree in Pharmacy from U of T.
Should have gone to Pharmacy school.
Garth, an FYI my comment about negative equity was not in response to your earlier comment (I hadn’t read/seen it yet). It was aimed at so many home owners who have been led to believe money owed on their mortgage…even when they are under water is simply negative equity and really debt. They will include any consumer debt rolled into their mortgage as negative equity. The true meaning of the term is not really understood and has been taken as a convenient way to blur the truth for some.
DonDWest at 91 said:
As for the topic at hand, the best way to short Canadian real estate is to simply off shore all of your investments. Don’t hold anything Canadian – it’s bound to go nuclear. Don’t hold Canadian dollars.
*****************************************
That may be a legitimate strategy. I hold a lot of U.S. equities.
But selling or refusing to hold Canadian assets is a far different thing than shorting those Canadian assets.
If you refuse to hold the Canadian assets and they rise in value you simply miss out on the gain. If you shorted those assets and they rise you LOSE that money. You must pay up the amount of the gain that you bet against. That is the definition of shorting.
Most on this blog should be damn glad there was no way to truly short Canadian residential real estate else many would have lost their shorts these past few years as house prices refused to decline as predicted.
Even those who sold their houses or refused to buy often lament it. But imagine if you had shorted Vancouver real estate and it continued to rise another 20%.
Again, shorting is highly risky. Do not try this at home!
To Shawn #228
You said you made RRSP contributions and received income tax refunds from 1989 to 2013.You did not do your math did you.It is a 10.57% rate of return and I did not calculate any amounts as a lump sum.I calculated your RRSP rate of return as follows, $9,363 contributed per year and compounded all contributions annually invested at 10.57% for 24.33 years which equals $932,442.71.I used 24 years and 4 months because I did not know which month you started investing.You stated your RRSP this week was $932,979.00.
You stated the following ,$138,061 total RRSP contributions,$89,740 total tax income tax refunds so together your total RRSP investment was $227,801.00 over 24 years,4 months.Take $227,801.00/24.33 years=$9,362.97 per year RRSP contribution+income tax refund.
My rate of return is not way low, I said 10.50% but it’s 10.57%. This is only 7 basis points higher than what I first said.It’s a rounding error.
If you take $138,061 as a lump sum invested at 10.57% compounded annually with no income tax refunds for 24.33 years it is $1,591,353.84.So you can see that I did not calculate my rate of return based on any lump sum.If you use the whole total RRSP investment of $227,801.00 compounded at 10.57% for 24.33 years it would be $2,625,737.87.
This was not possible because you have a maximum allowable RRSP contribution each tax year and your income tax refund is given each tax year. You could never invest the total $227,801.00 in a lump sum because RRSP contributions accumulate based on earned income only.
I would never use lump sum calculations precisely for this reason.It’s not logical and possible.I hope you made your calculations on present and future income taxes on your RRSP better than what your recent calculation and statement.The 10.57% is not sustainable in the long term.
Once you start making $78,000 but less than $85,000 in Ontario you are in the 37% tax bracket but after $85,000 you are in the 42% tax bracket.This is because Ontario and federal income thresholds are at different levels. The OAS 15% clawback comes in effect after $69,500 so if you earn $89,000 you will pay $3,000 OAS clawback ($20,000*0.15).
#99 DonDWest on 04.28.13 at 10:22 pm
Don I wish I was bull shitting, years ago I had a coke problem, my hearts stopped in a strip joint, cannonball to be exact.. I got a tour of the universe by a gorgeous striper angle called Becky, I went threw the universal consciousness consolidator… She took me threw too early at the extreme displeasure of the voice, my body was only dead for 15 min..
I learned every thing in there, I keep a low profile but I see all, I know all.
If you think that’s insider trading, your wrong…. It’s way beyond that, I have the ability to move the markets in any direction I desire..just by willing it.
It’s what I do….
Why? Simple. First, if you have a million dollars and you put it into a balanced, fairly conservative investment portfolio, you made about $100,000 last year. If you bought a house on the other hand, you made nothing, paid $60,000 in land transfer and property tax and now have to buy a new Audi for the driveway. Second, million-dollar listings no longer qualify for CMHC insurance, which means a buyer has to pony up at least $300,000 in cash to move in.
While I Would generally agree with this statement I would have to say however that the majority of Canadians out there do not have $1 million available in funds to invest either way, so this is a mute point. The majority of people are Not sitting on these large cash reserves they are making payments on smaller home loans. I would further venture to say that if they did have $1 million in funds available that they would not invest it, but rather pay off their home.
Then they would be fools. Therein is a lesson on why wealthy people are wealthy. — Garth
Anyone have advice on how to pick a great investment advisor? Talking to my guy at the bank, I feel all he does is go through a script and what he’s offering is not a tremendous rate of return…
Thanks for the information guys. I should definitely have gone to Pharmacy school; that’s ridiculous! I do ok myself but was kind of surprised to hear those numbers are legit…
–
Tantalizingly, supremely succulent and scintillating sublime post.
*
4:27 clip Garth’s column this past weekend only covered the Cdn. m$m, whereas this clip covers the US m$m. See next three links re: Boston; 5:58 clip “The man in the wheelchair was wheeled through the scene several times for the benefit of cameras.” wrh.com, Boston – Syria Bomb one then the other, 4:10 clip Boston two and 1:47 clip Boston three; Psychological Psychobabble As long as RE rises, sheeple are hypnotized again; Greece – Gold – Germany Seems Greece will sue Germany for WW2 reparations. If judgment is awarded to Greece, Germany could mint Euros or use their gold (which seems to have been conveniently lost) to make good, so Lower Manhattan Is this where Germany’s gold is? Workplace or Terrorism Where is one most likely to die? The m$m in glorious technicolor; Jurassic Park for real; 5:50 clip “After disarming the Soviet population, Stalin went on to kill 20 mln. + citizens.” No references to Aurora, Sandy Hook or Boston are necessary, and Boston bombings were staged; Collecting Rainwater now illegal in many states; Syria + BRICS? An interesting possibility; 9-11 landing gear and Pic <“Yeah, Boeing doesn’t use rope in the landing gear of their passenger jets.” wrh.com; Hurricane Sandy Not Sandy Hook; Kannaduhh Yes massa! BdB’s Quarterly meeting again; The Real Terror is the law. Who writes laws? Lobbyists, politicos and the like.
#44 -=jwk=-:
First time I have to disagree with Garth. Foreclosures are coming. I heard the same story in the US (Lived there 1995-2005). People will never walk away from their homes Never! It would ruin their credit, too! They did, and they did in drives. Once the dam breaks….
—————–
Tis different here.
glad I sold when I did, even if it was to early
http://www.mybudget360.com/canada-debt-bubble-canada-real-estate-bubble-the-coming-deleveraging-for-canada-unit-labor-costs-in-manufacturing-above-us-labor-costs-and-household-debt-to-income-at-160-percent/
There are SOLD signs everywhere in Dunbar and Point Grey here on Vancouver’s West Side. A lot more of those stickers going on signs over the last 2 weeks. I don’t know how much they are going for, or how much they’ve been reduced. There were some sitting for months and months that have now sold.
Not sure what’s going on as there seemed to be no activity in Feb/March.
This might be the last hurrah before the steady decline?
‘Even if real estate values collapsed by 30% nation-wide in a year, bank profitability (now at record levels) would barely budge’
and yet there are still people out in the wilderness that would sell/short such an asset
buy bank stocks
buy REITs that house the physical bank operations
and diversify the same way globally(also responsibly)
simple….
“#18 Canadian Watchdog on 04.28.13 at 5:41 pm But now that’s gone. So are sales. Prices are next.
No. Foreclosures are next.”
“Nope. Tiny numbers, no matter how you spin them. — Garth”
I work with lawyers and that’s all they’ve been talking about lately is the increase in foreclosures and bankruptcies …
To Shawn
The RRSP rate of return is 10.57%. I first said 10.50%, it’s only off .07% or 7 basis points.It’s a rounding error.I am not way off.If you Compounded for 24.33 years at 10.57%=99.58802797 the factor of all yearly RRSP contributions and yearly income tax refunds*9,363=$932,442.71.
The stated amounts by you Shawn are $138,061 total RRSP contributions plus $89,740 total RRSP income tax refunds=$227,801.00/24.33 years=$9,362.97 per year.
I did not make any lump sum calculations because it is impossible to have that total RRSP room in one year and plus income tax refunds come yearly and not in one time.RRSP contribution room is based on only earned income.
If you take the total RRSP investments of $227,801.00 invested at 10.57% compounded for 24.33 years it would be worth $2,625,573.87 not the $932,979 you stated your RRSP was worth this week.
hmmmmm….Arnold Shucat…..let me guess…the buyers he sold to might have been scrambling for the down payment….something tells me that James Wongs weren’t.
Open you eyes. Report the real story.
heatsmoker: i am feeling the heat… Wife came into some money through an inheritance and is GAGGING to buy something. wants to put a $200K down on a $1M home.
here’s some pretty good evidence:
http://whispersfromtheedgeoftherainforest.blogspot.ca/
but there is nothing like the life experience of having to sell a house to put the fear of God in you
how about paying a real estate agent a flat fee for his time? he shows you the house, looks up comparables, presents the sales history in the area, advises you on the ease of selling the house at the same price. He gets paid whether you buy or you don’t.
To Victor V #34
These news articles are really getting lame.If it’s such a good idea than why doesn’t all the people who work for the banking industry just borrow their brains out with $10,000 vacations,$50,000 cars,$500,000 houses,$500,000 cottages etc.Hey, borrow $500,000 at 3.00% and invest it and get 6.00% that is a $15,000 profit and borrow more money making another $15,000 and do it over and over and over.
Wait,this is not a video game,it’s real life.The more I years that go by the more adults become children.You can be what ever you want.It looks like people never grew up. A low interest mortgage or line of credit gets people so excited.It’s like giving a kid a chocolate bar.Once it’s gone what do you have left,memories.
The main difference is you have to pay back the money it’s not free.People are going to learn the hard way but at least they had memories.
#37-
Amen to that!
screw the snorkeling,i bought a canoe to stay out of the filthy water.we are down river from the annacis island treatment plant.cross over on the alex to surrey,what a fricken smell.no cookies just the stench of crap.i try to take the tunnel.
#80 MarcFromOttawa on 04.28.13 at 9:33 pm
Garth,
I’m 6 years into a 20 year universal life policy where I pay 35$/month. I don’t have any dependants.
Should I cancel it?
Thank you.
——————————-
Ask yourself, would you own car insurance for a car you do not own?
Any whole life/universal life policy is a HORRIBLE investment vehicle. Period. And it is always way over priced.
If you must have insurance always buy term insurance. Invest the difference in cost separately.
Short Facebook! Only nerds use that site! Are you a nerd? Well, are you?
http://www.youtube.com/watch?v=kFKHaFJzUb4
Speaking of nerds, the leafs are in the playoffs. I wonder how many losers will be forking over hundreds, maybe thousands of dollars, to see the most overrated sports team in history try to win the Stanley Cup (top nerd name of all time) of a abbreviated season.
http://www.youtube.com/watch?v=0hQb7m7AAcQ
Garth: You cannot walk from mortgage debt in Canada without onerous consequences. Few do. —
———————————
Plenty of US states (eg Nevada) are recourse (no walkaway) , like Canada. They have similar foreclosure rates to the non recourse states.
Here’s a list of recourse states.
http://www.forecloseddreams.com/recourse_states
Does the photo imply that the new generation is going to have to do some heavy lifting?
#102 CrowdedElevatorfartz on 04.28.13 at 10:35 pm
@#87 Heatsmoker
Keep drinking.
Stop smokin the purple kush and bake it into some brownies.
Feed wife home made brownies.
Sell the kids to West Van Arabs.
Eat some of your brownies
relax.
_____
I want some brownies.
Seriously, if everyone is selling their properties, who is going to rent to all of them. Won’t there be a lack of quality rentals and at what price? Is anyone finding the rental market tight or expensive? Just curious.
#121 Dean Mason
There is good and debt.
Borrowing off a line of credit to put stainless in one’s kitchen while jetting to Hawaii for a week paid by credit cards, might be considered bad debt.
Borrowing out of your margin account at 3.5%, deducting that interest against income, then investing it and earning 8% is good debt.
Brand new econobox, much more advanced over 1990’s model. Same price! 14k. Financing for single digits (previously unheard of). Case closed. Whining losers need not apply.
http://www.dixieford.com/view/2013-Ford-FIESTA-28965
– No Hassle ePrice
$14,461
# 87 Heatsmoker
“i am feeling the heat…long time reader since 2009, renting on Vancouver’s North Shore. Recently had to move to West Van to enroll my kids in a better school (they have issues).”
I feel for your kids, they need their Dad & house horny Mom’s love & encouragement to help them through “their issues”, not some over-priced box in We(s)t Vancouver.
Here are a couple of resources for you:
http://www.parentsupportbc.ca
http://www.bccf.ca
http://www.calgaryherald.com/technology/Calgary+bitcoin+exchange+fighting+bank+backlash+Canada/8306709/story.html
Garth, I am honored to be here. Thank for all your
hard work . Looking foward for the new book…
Dean Mason and RRSP return
Dean, I must apologize because I was too quick to assume you had calculated based on a lump sum contribution in 1989.
Okay, using equal annual contributions you got 10.57% return. Fair enough.
Using the actual annual contributions which were rather lumpy and included some larger amounts associated with severance ($2000 per year worked before 1992 used to allowed) I get an IRR of 14.0%
The point is I made a large return in RRSP and with tax free compounding it will be a great investment despit taxes and any clawback.
I am in Alberta. (But I may not always be).
I hope to earn in “retirement” above the top end of the clawback range and so the old age pension will be all gone in any case.
Your calculations were diligent and again I apologize for my rush to judgment.
@#128 Beachgirl
Sorry, I dont mail my brownies. The dogs usually get them before the recipient.
As for rental rates….depends on where you live and what month of the year your looking..
Vancouver seems to pretty good right now for renters.
Calgary , not so good.
Sask….who cares.
Winterpig, too many mosquitos so I’ll pass
Toronto, dont know, dont care. Help Beach girl folks
Montreal and Quebec City? Dont move July 1st because for some incredibally stupid reason…EVERYONE moves on July 1st?( shaking my head).
Halifax? Move during the summer when all the University students are out of town.
Newfoundland? Everyones in Ft. Mac. shouldnt be a problem.
Does that help?
Finally, a fight breaks out between two guys, each armed only with an HP 12C. Take any intersection in the world, put a hockey game on one corner, a basketball game on the second, a baseball game on the third, and two guys comparing portfolio IRR on the fourth. Where’s everybody going to go?
C’mon ladies, show us your Sharpe Ratios!
The Dumbest Things You Can Do With Your Money
Silly Money Mistakes
Neil Macdonald: The ‘monarchs of money’ and the war on savers
“They are the world’s central bankers.
The decisions that emerge from those meetings affect the entire world. And yet the broad public has a dim understanding, if any, of the job they do.”
http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html
#104, #68 Aquarium
I am a pharmacist and work at Rexall. You have to stand for 12 hrs at a time without any breaks or lunch whle checking 300 Rx’s, endure narcotic addicts yelling at you, angry sick seniors, being forced to do fraudulent medschecks so the store can make up the profit that the government took in 2010..oh and squeeze in 30 flu shots in the winter season. I can only work part time bc I would throw myself off a bridge if I worked FT. Yes, it pays well so I am fortuneate to work PT and work on my tennis game on my off time but it’s the worst working conditions I have ever seen for a “profession”. Go to theangrypharmacist.com and see that I am not alone in my rage..lol My son is going to medical school if he has great marks. Both professions require over 90% for admission. Study hard.
DELETED
So let me get this straight Nasty!!
The whole BM event was staged?
You’re an idiot! (Here. put some more of this on your head .. http://bit.ly/10ntyUI )
Hi Garth,
There might be a way to short the Canadian REal Estate market. There are a few companies which are deep into this market and am not sure if they hold insured mortgages. They are:
ETC – Mainly exposed to the greater toronto area
HCG – Subprime lender across Canada. I am waiting for their loan loss provisions for the last quarter. If the provisions are low relative to sales, I will probably short it.
(I am not short either yet…)
#43 Not 1st on 04.28.13 at 7:24 pm
Garth, my contact on the ground in Calgary who does excavating in the residential house industry says there is no slowdown coming, unless some shock black swan event happens. Says its booming in a crazy sort of way.
Sounds like Vancouver 18 months ago. — Garth
——————————————————
Garth is right. Listings in Calgary and area keep climbing:
March 27 – 5306
April 29 – 5937
Going up every time I check.
No shock yet, but I hear Cowtown is the mecca of boom and bust.
Dean Mason and RRSP
To clarify the $138,061 was the total RRSP contributions. The refunds reduced our share of that to approximately $89,740. (assumes average 35% marginal tax rate)
So the main reason for the smaller return you calculated was the assumption that the contribution was those two figures added, when in fact it was only $138,061.
mr. carney said in a democracy we get the government we choose.
http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html
charitable foundation is non and profit ?
http://www.businessweek.com/news/2013-04-29/billionaires-flee-as-tax-districts-pursue-32-trillion-offshore#p3
One of the simplest ways to increase your take-away from a home sale is to pay 1% or 2% less to your agent. This site makes agents fight for your business: https://www.DELETED
That brings me to a comment about shorting – why not short Brookfield Residential Services? They own Royal LePage. The thesis is simple: transaction drop + prices drop = real estate commissions drop. Now, some 70% of BRE’s revenue comes from fixed fees, so the effect may be muted until agents start seeking a profession elsewhere
The dumbest money you’ll ever ‘save’ is cheaping out on a good agent. BTW, I see you work for the website you tried to pitch, above. Buzz off. — Garth
“We’re going to issue some bonds, even though we have more cash than most major countries combined, and not a penny of debt” -Apple
http://finance.yahoo.com/news/apple-lays-groundwork-first-debt-
They sure know how to make fund managers drool….
What do you think about Harry Dent’s predictions that the DOW will drop to 3300!!!
Seems very far fetched to me…
Dent peaked in the Eighties. — Garth
The mantra of
“Price Below Assessment, Sell to Emotional Bidders Well Above Asking”
… has spread from demand pockets of Toronto to Burnaby. I have just witnessed three listings, where this was the case.
Alert: You don’t WIN in life if you’ve just won a bidding war for a house. Unless, of course you happen to luck out re-selling to another sharp tool and cover your costs.
The entire financial management industry is a rentier arrangement: they skim immense profits and return no productive yield at all.
http://www.zerohedge.com/news/2013-04-29/wall-street-rentier-rip-index-funds-beat-996-managers-over-ten-years
Whats your stated occupation Garth?
I provide you with free information and advice. What’s yours? — Garth
The road ahead is clear.
There is now a glut of supply on the uppper end of the market of houses 1.3-1.5M or so, and a glut of supply of condos, which will only get worse. Those 1.3M and 1.5M houses will be dropping into the 999K area that CMHC will insure if those sellers hope to close. That will put pressure quality wise on the $600-800K homes, which in turn will drop a relative amount. Then condos will sandwitch this middle range inventory from the bottom as well ensuring the pressure on both sides.
Sounds plenty logical. No need for catastrophic event. Crumble under it’s own weight.
@ 131 Andrewski
you are right- i am trying to convince that because of the complex neurological condition from which my child suffers, we need to just lower our expectations and be happy renters. I love having money in my bank account. (oddly, i am ridiculed by “loving to open my online bank statements with money in them” which would evaporate if i bought a house).
#141 Grantmi on 04.29.13 at 10:23 am
Come on Grantmi, haven’t you figured out how many wackos like to post their conspiracy theories on this site as of yet. We have space people here from World Trade Inside job, Pentagon inside job no plane, Pearl Harbor attack inside job, Sandy Hook, Boston Massacre, Aliens, Chem-trail conspiracy, Paul is Dead you name it. It appears that they like to distract from the root of the blog and feel free to rant. By the way most of the Conspiracy Theorists have been sniffing Chem-trails. The latest theory is that the housing market is safe and stable!
I’ve been tracking listings on MLS.ca for Burlington, Ontario Detached House $400000-$550000 2 or more bedrooms 2 or more bathrooms for a couple of years now. I check it almost every day. It seems to move up and down at a snails pace, no more than 3-5 listings either way per day.
I checked it on Friday, April 26th and the number of listings in the above search was 608.
I just checked it now on Monday, April 29th and it was 663!! That’s the biggest change I can recall off the top of my head. That’s a 9.05% increase in a couple of days.
Maybe those waiting to list in the spring market feel that now’s the time, and possibly the time to bail.
I imagine these numbers will increase in May and then tail off. Or it could be the beginning of a listing panic?
Time will tell.
Ok I posted the worst performing GTA areas, now it's time for the best performing areas.
Best Q1 Sales-To-New Listings Ratio (Rated out of 226 GTA areas)
1 Thornlea – Markham 800%
2 Country Club Estates – Markham 350%
3 Cathedraltown – Markham 325%
4 Village Green-South Unionville – Markham 273%
5 Milliken Mills – Markham 260%
6 Berczy – Markham 224%
7 Middlefield – Markham 213%
8 Victoria Manor-Jennings – Markham 200%
9 Royal Orchard – Markham 200%
10 Grandview – Markham 175%
11 Victoria Square – Markham 175%
12 Markham Village – Markham 167%
13 German Mills – Markham 167%
14 Old Markham Village – Markham 160%
15 Raymerville – Markham 143%
16 Buttonville – Markham 133%
17 Wismer – Markham 131%
18 Markville – Markham 125%
Wow! How can there be more sales then what's listed on MLS? Click the links and find out.
I posted this would happen on this blog over a year ago. For all the analysts out there from Vancouver to Toronto, you're counting nothing but added presale dollar volume in resale average prices. Canadian RE boards need to start reporting MLS 'existing sales' separate from new sales like every other developed nation does. The only way to measure GTA performance right now is by consolidating resale and new sales, which at the moment looks like this and this.
Until changes are made, take every RE report you read with a grain of salt.
# 138 & #145,
I have to say, after reading the summary of Neil Macdonald’s piece, I’m getting a little bit worried that the hyperinflation-phobics might have something of a point.
That said, two things became clear to me:
1) Pensioners who complain about losing the benefits of saving are perfectly positioned to sell properties to younger people, empowered to buy by recent super-low interest rates.
2) I was disappointed by how Carney washed his hands of the consequences with his answer that citizens in a democracy deserve the governments that they vote for. Um, isn’t the un-elected governor of the Bank of Canada supposed to operate at arm’s length from the Government?
I’m too young to be a pensioner, too responsible to be an easy-credit junkie. I rent, and invest the difference. I sure hope that I’m doing the right things!
http://ca.finance.yahoo.com/news/canada-budget-office-sees-rates-hold-until-mid-161142349.html
“Consequently, PBO expects the Bank of Canada to maintain its policy interest rate at 1 percent until the second quarter of 2015 before gradually, but steadily, raising its policy rate,” it said.
The PBO’s assessment is based on its own economic outlook derived from partial information from the finance ministry, rather than any direct knowledge of monetary policy intentions.
The central bank has said it will probably raise rates after an unspecified “period of time,” even as it acknowledges that the economy is expanding more slowly than it had forecast previously.
Analysts surveyed by Reuters before the central bank presented its latest forecasts predicted that move would come in the third quarter of 2014.
Garth, Has the CBC’s Neil Macdonald hit the nail on the head?
http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html
Just as accurate as he was on Cyprus. — Garth
http://business.financialpost.com/2013/04/29/short-interest-in-canadian-banks-at-highest-level-since-lehman-collapse/
“The increase in Canadian bank short interest, we believe, is due mainly to concerns about a housing bubble, and weak economic growth outlook,” said Mr. Choquette.
But he doesn’t see the high level of short interest as a negative for Canadian banks. Instead, Mr. Choquette said the shorters are likely to soon become discouraged as Canadian banks begin to defy expectations and continue to post healthy earnings.
“We believe fears of a Canadian housing correction are overly discounted in bank valuations,” he said. “Short sellers, we believe, will eventually lose patience as Canadian banks continue to earn their way through the housing slowdown, capital begins to be more aggressively repatriated to shareholders, and the cost of carry, due to high bank dividend yields, begins to be costly.”
Once that happens, short sellers will begin covering their positions more heavily, which Mr. Choquette said should result in a bank rally, particularly for CIBC and National Bank of Canada. He upgraded the former to sector perform from underperform as a result.
========================
This will not end well…for the shorts.
global tv caught on tape with the developers …
have you read this one
Ship of Fools by Fintan O’Toole
from the guardian uk
http://www.guardian.co.uk/books/2010/jun/27/ship-of-fools-fintan-otoole
…”National Asset Management Agency (Nama), or the state’s “bad bank”, which was established, explains O’Toole, so the public could “pay vastly over the odds for properties that the banks had lent testosterone-crazed speculative developers far too much money to buy”. Courtesy of Nama, Irish taxpayers now own Claridges, the Connaught and the Berkeley – scant consolation when 40 per cent of homes in Ireland are worth less than was paid for them and some mortgage holders are expected to be in negative equity until 2030. “…Ship of Fools by Fintan O’TooleA masterly unpicking of the deceit, stupidity and greed that has brought Ireland down
Given this choice, what would you choose?
This bung for $850 with 2 bedrooms in Bloor/Royal York area:
http://www.realtor.ca/propertyDetails.aspx?propertyId=13105544&PidKey=1399786070
Or this:
http://www.realtor.ca/propertyDetails.aspx?propertyId=12134594&PidKey=-858294784
Funny…really funny. What’s even funnier is that the Hamilton house is going to drop in price too.
#146 Jason S – The Real Estate system of buying and selling is here to stay, and a good agent with integrity and experience must be paid, as you get what you pay for most of the time. Now am in a state of shock, as how can a developer with over 25 highrise buildings both commercial and residential that many are paid for except using cheap money building so many more over the past 5 years get it so wrong? New commercial carpets are being installed in the older ones to match the doors, and the new expensive vinyl paper which looks great. How about a sickly green that looks like death warmed over? I met a couple from Hong Kong who saw this all, and said what do you think, and they laughed saying we cannot believe it too. Ok, back to my taxes, as am going to the wire this year with a few problems that need to be adjusted.
the bad chases out the good
anti purchaser anti employee control frauds
What if George Akerlof had written about Lethal “Lemons?”
Posted on April 29, 2013 By William K. Black
#139 sue on 04.29.13 at 10:12 am wrote:
“I am a pharmacist …being forced to do fraudulent medschecks so the store can make up the profit that the government took in 2010”
Easy money? The B.C. government implemented a medication review program in 2010 and pays pharmacists $60 for each review. How big is this program? In 2011 the government reported 100,000 reviews were submitted for a 4 month period ($6 million of your tax dollars at work). There is no requirement to have the patient sign a form indicating they received the services.
If you have had prescriptions for 7 medications in the past 6 months, a pharmacist can do a medication review and discuss medication interactions/answer questions. I work in healthcare (not a pharmacist) and some of my patients have found this very helpful. However, I checked with my pharmacist and found out that one had been done on me without my knowledge. I wonder how many of the $6 million reviews were faked?
http://www.health.gov.bc.ca/pharmacare/pdf/mrs-faq.pdf
I have an old corporation as the sole shareholder with a shareholder’s loan advance that was never written off, so maybe can deduct this as a business lost on my personal taxes, as will try it, and see what happens :)
AAPL
Last week told u dogs to reverse your short on Apple and go long…..
CHA CHING BABY……….. who was that blog dog who said it was a dog….
It’s only a dog when I say so…….
RE is down, food is up…
After a few of days back in cold Kelowna (24 C cooler than Phoenix) a few observations:
Groceries have gone up more than expected in six months – based on last two carts overall about 50% more than down south. Although my favourite beer is up to $ 18.99 for 30 cans down south – they are still over $ 55.00 here – it’s too cold to drink beer anyway.
Real ice cream – $ 2.99 down south for 1.68 l equivalent (no modified milk ingredient) same here on sale yesterday $ 6.99 but has MMI listed as third largest component. Milk here – $ 1.99 for one litre, $ 1.79 for 3.78 l down south.
Three visits to restaurants here since our return, although the tax is down 7%, the meal prices appear to be up about 10% over the last six months – coincidence?
Near us a four year old luxury high-rise condo which sold for a tad over $ 500K in 2009 is now listed for rent at $ 1500 – somehow I don’t think they are covering their costs.
Okay, rant is over – still happy to be back and looking forward to some ‘low-balling’ with our favourite RE agent later in the summer.
Canadian Watchdog what happened to you on twitter?
#167 Snowboid – give me a break, as you need some training in life with shopping in Canada. I shop the sales for 50% off to stock up, and never discount Shoppers Drugmart or Valumart, as need to go there soon to hoop me 50% off with products that even the major food companies cannot match in price. It is all a game in life to save money, and the Polish deli stores are bringing in quality products from Poland that will surprise you all with savings that the the big stores cannot match.
Maybe people will realize that homes are mainly used as a roof over your head not an investment for the greedy. Find another line of investments dirt bags and stop bastardizing the housing market. The new generation have no chance of buying with the current high prices.
How is the equity market fundamentally sound when earnings are collapsing? Earnings are irrelevant when sea of liquidity trumps real earnings or value. Read more: Here and Here.
71% of S&P companies have exceeded Q1 profit expectations. The only ‘collapse’ is in your analysis. — Garth
debt : gdp
http://qz.com/79051/thomas-herndon-the-grad-student-who-exposed-reinhart-and-rogoff-they-still-cant-get-their-facts-straight/
#156 Smartalox
I would say you are doing the right things. Your chance will come to pick up some discounted property, if you are patient. In the mean time, diversify and don`t let the Goldman Sachs gang push you to far out on the risk curve.
OTC clearing
the G20 decided at the September 2009
Pittsburgh leaders Summit that:
“All standardised OTC derivative contracts should be
traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end‑2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non‑centrally cleared contracts should be subject to higher capital requirements.”3….
http://www.banque-france.fr/fileadmin/user_upload/banque_de_france/publications/Revue_de_la_stabilite_financiere/2013/rsf-avril-2013/2-CARNEY_Mark.pdf
Caesar gave the marching orders to his puppet Jason Kenney to trash the 15% wage differential for foreign workers, as now employers must pay all equally which sounds a bit queer to me. Like as if Canada never for decades brought in foreign workers to work the farm fields. There was a time that kids went to work those farm fields bringing in crops from 7:00 AM to 5:00 PM as was one of them.
We kids had the time of our lives working in the fields picking beans to make $5.00 a day, as that was a lot of money, as we had bucks to take a gal to a movie and buy her a box of popcorn. What is this government talking about, as for decades programs went into place bringing Mexicans and those from Jamaica to work the farm fields with free accomodations, air flight, and a fair wage.
Victor V #129
I know one thing,once you have debt and use leverage you are at a higher risk for your whole financial life.If you use debt and leverage for investing this means you are not saving enough and you have expenses that are too high.The better solution when possible is cut waste in your spending and invest that money instead of paying interest of 3.50% to anyone.
The law of averages will eventually push up that interest rate so don’t base your long term future costs of borrowing on the low 3.50% interest rate.You said that you use your house or other property to get this secured credit,this is a financial trap.Be very careful.
Caveat emptor,buyer beware.I avoided all my life having any type of debt for a long time.If you play with sharks you will get bitten.
71% of S&P companies have exceeded Q1 profit expectations. The only ‘collapse’ is in your analysis. — Garth
The companies are exceeding expectations because of cost-cutting, not revenue.
Read this analysis
More efficient, productive, profitable companies are exactly what investors want. There is no collapse in earnings. Just admit you were wrong. By the way, two-thirds have also exceeded revenue expectations. — Garth
History has shown us repeatedly that all fiat money systems eventually fail and lead to government default and demise. Even the value of the United States dollar has been rolled back twice in the past 80 years.
In 1933, President Roosevelt devalued the dollar 70% by raising the fixed price of gold from $20.67 to $35.00. His executive order also reneged on the government’s promise to redeem paper currency in gold upon demand and made it illegal for citizens to own more than five ounces of bullion.
The Breton Woods Agreement of 1944 made the US dollar the world’s reserve currency and it alone was decreed as redeemable in gold and only by other central governments. In 1971, the US defaulted again when Nixon closed the gold-for-dollars option and floated its money on world exchanges. Since then, greenbacks have had no backing except the United States of America’s promise to pay.
Since the first baby boomers were born in 1946, American citizens have been taught, cajoled, and perhaps even brainwashed into thinking that the almighty dollar, the world’s reserve currency, is a stable fiat money beyond question and reproach. Acceptance of this idea requires a belief that the US government is solvent and will remain so into the future.
But this very same government has gone bankrupt and defaulted on its financial obligations twice during my parents’ lifetimes. Why would you think they will not do it again in yours? Is it your faith, belief, or a combination of both?
I kindly remind you what Mark Twain had to say about that: Faith is believin’ what you know ain’t so.
Face the truth folks, your money is not real money unless it is held in physical gold.
The losses are real, too. — Garth
#153 Holy Crap Wheres The Tylenol on 04.29.13 at 12:12 pm
At one point in time, saying the world was round branded you a conspiracy theorist.
Gulf of Tonkin, the USS liberty at one point in time claiming those events were false flags branded you a conspiracy therorist
I proudly where my tin foil hat, as any successful trader knows always a story behind the official story…..
You go all in trading and listening to MSM or the status quo centralized info…. You go broke fast….
Good post VLAD
More efficient, productive, profitable companies are exactly what investors want. There is no collapse in earnings. Just admit you were wrong. By the way, two-thirds have also exceeded revenue expectations. — Garth
Ten stocks drove 88% of S&P earnings growth in 2012. Link Don't surprised if they exceed 90% this year.
Hello Stalinism.
Large US companies employing millions of people with global reach are making robust profits. Gee, what a bad thing. — Garth
The Value of a Dollar…
Stew at 178 says:
In 1933, President Roosevelt devalued the dollar 70% by raising the fixed price of gold from $20.67 to $35.00.
…greenbacks have had no backing except the United States of America’s promise to pay.
*******************************************
I would assume that the dollar then fell against the british pound and other foreign currencies in 1933.
But the U.S. dollar did not devalue in terms of what really matttered, it’s purchasing power in terms of goods and services in the United States. No inflation ensued. In fact there was deflation.
And what exactly does the U.S. government promise to pay anyone for a dollar? The answer is nothing. The U.S. dollar is worth what it will buy in goods and services in the market. The U.S. government makes absolutely no promises about the value of the dollar and promises to pay you nothing for a dollar other than perhaps 100 pennies.
None of this matters. Your job is to accumulate wealth. Your wealth may be measured in dollars today and Chinese Yuan tomorrow. The important thing is to accumulate wealth.
If you fear inflation (devaluation of the dollar) simply avoid holding your wealth in actual money such as cash and bonds. Money in houses and in stocks is NOT money IN dollars. It’s wealth measured in dollars but it is is not wealth invested in dollars as such.
Fiat currencies may come and go. (But don’t hold your breath waiting for the demise of the U.S. dollar in your lifetime) Anyhow, wealth in houses and farmland and Coke shares and Hershey and Heinze are basically forever. Coke has value no matter currency it operates in.
Brad Lamb says; if you don’t want to eat cat food in your retirement, you had better invest in Toronto Condos !http://www.ottawacitizen.com/homes/Brad+Lamb+strategy/8211258/story.html
#141 Grantmi on 04.29.13 at 10:23 am
So let me get this straight Nasty!!
The whole BM event was staged?
====================================
Healthy skepticism is good, but don’t shut your mind down to perhaps reviewing the evidence versus the ” official story”.
BM ? When I heard about it on the news….I thought False Flag….after reading about a lot of false flags.
As the dust settles…BM has all the hallmarks of a false flag.
What was achieved ? That citizens obeyed orders to both stay indoors AND allow police in without warrants …..all via (2) “suspects”…one dead. Not good
Like JFK….there has been so many theories…but Michael Collins Piper has THE most plausible one.
There was no default
Stew at 178 says:
But this very same government has gone bankrupt and defaulted on its financial obligations twice during my parents’ lifetimes.
***************************************
Absolutely false. The value of a dollar in 1933 was unchanged in terms of what it would buy in the U.S. It bought the same amount of food clothing and shelter after it was devalued against Gold. So no default there.
Admittedly emigrants from the Unitied States in 1933 suffered. I am sure both of them were bitter about it. Smart people were moving to the United states in 1933 not moving away from it.
In 1971 or so when the Gold window closed there did ensue inflation. And it was easily compensated for by sticking your money in the bank and earning high interest. And wages soared accordingly. House prices soare for decades after. Only a fool who kept their cash under the matress for years on end lost.
No default.
You are reading too many doomer sites.
Better to spend time accumulating dollars than fearing them.
#169 Old…Nope..it’s just a fact that in the US consumer prices are lower by a wide margin every day…..you don’t have to wait for some Polish Deli down the street to clear out the dated kolbasa and head cheese….and you don’t have to stock up like a Russian hoarding toilet paper.
Nope…you get to live a nice comfortable life with cheap everyday costs. But heres the big question…. why has the CDN economy been designed specifically to keep people poor? Is it because poor people are easier to manipulate? It can’t be an accident that so many people are grinding it out in near poverty while a few civic service elites drain the coffers…can it?
Why are grocery staples……for non Polish people…..who want milk, eggs ,cheese, meat, staples over double in Canada compared to the US? You have to know that processed foods are even cheaper…… no?
Ice cream was mentioned……nope thats right…it’s a third what it is in Canada for the real thing…not the artificial crap you get in Canada. The real thing at most stores is an item most Canadooooodians haven’t been able to afford for years……why is that? Are the wages & pensions of the elites so high that manufacturing prices have to be triple in order to produce enough revenue to support the overburden.
Why are clothing prides so high? Is it because city workers cost so much that property and business taxes are so outrageous that shopkeepers are forced to gouge their customers just to stay alive?
Did you ever ask yourself why….instead of dumbing down to the lowest common denominator and playing the Polish Kolbasa card?
Here in Texas a woman can go to Ross and buy a new outfir…shoes included for under $20 bucks and put a steak on the table with the change……and the economy is booming here……and you can still buy a 300 sq ft home with all the perks for under $200K…….why is that? For one thing the property taxes and building fee’s aren’t outrageous. Could this be because the city staff don’t pull down $350 thousand like they do in Vancouver….transit cops don’t make $200,000……teachers don’t make $100,000+++ ditto fireen at $150,000…the list goes on. If you’re having trouble putting quality food on the table wake up and look around.
Meanwhile its festival season in Texas…..theres more public events in a weekend than Vancouver has in an entire year. You’re not a criminal if you bring your car….and you can have a beer in public without being tazed.
Ask yourself…why is Canada so far down the toilet compared to other area’s? Isn’t Vancouver supposed to be the best place on earth?….for whom?
Bwahahaha silly me…thats a 3000 sq ft house for under $200K
164 Adele
It’s $60 for an annual review yes, $25 for a follow up etc Many pharmacies are forcing pharmacists to perform these in huge numbers even when they are done by the cash register (supposed to take 30 mins in another room). We require a signature in Ontario but some are done so quickly “let’s clean up your profile” that many aren’t even aware that they have had one done. It’s disgusting but Head Office puts a gun to our heads. I always make sure to take extra time but I know that many are being billed for and in a fraudulent manner.
#176 Dean Mason on 04.29.13 at 5:02 pm
Victor V #129
I know one thing,once you have debt and use leverage you are at a higher risk for your whole financial life.If you use debt and leverage for investing this means you are not saving enough and you have expenses that are too high.The better solution when possible is cut waste in your spending and invest that money instead of paying interest of 3.50% to anyone.
The law of averages will eventually push up that interest rate so don’t base your long term future costs of borrowing on the low 3.50% interest rate.You said that you use your house or other property to get this secured credit,this is a financial trap.Be very careful.
Caveat emptor,buyer beware.I avoided all my life having any type of debt for a long time.If you play with sharks you will get bitten.
====================
You misinterpreted my post as we are in agreement.
My wife and I rent and have no consumer debt. Our RRSPs, RESP, TFSAs are all maxed out.
All our additional savings go into our non-registered investment account. That is a margin account and I’m comfortable borrowing on margin with the types of investments we have chosen (blue chip dividend, REITs, utilities, etc). The margin is against currently held securities not against house/mortgage etc.
As interest rates normalize over the next few years and the margin costs go up, then it is likely we’ll pull back on that end. But we’ve got a few years to keep building up the portfolio.
http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6093
“When it comes to the purchase of a home, most Canadians admit to making some mistakes, according to the 20th Annual RBC Homeownership Poll conducted by Ipsos Reid. The majority (60%) of Canadian homeowners indicate they’ve made some kind of mistake when buying a home, compared to two in five (40%) who say they haven’t.”
ya think that is going to rise…….
http://business.time.com/2013/04/28/the-real-reason-to-worry-about-china/
“That’s what is happening in China today. Everywhere you look, the signs of rot are apparent. In a mad-cap quest to dominate green energy, China’s banks pumped billions into solar-panel manufacturing, creating hundreds of factories and vaulting China into the world’s largest producer. Now the sector has become a victim of its own excess: companies are failing, symbolized by the recent bankruptcy of market leader Suntech Power. Steel companies continue to invest in new capacity even though debt is rising and losses mounting. ”
must keep bubble aloft …all is well….move along….
Snowboid: After a few of days back in cold Kelowna a few observations:
my favourite beer is up to $ 18.99 for 30 cans down south – they are still over $ 55.00 here
sounds like Florida – Sun City Center, food is cheaper, beer is cheaper and it’s warmer than Ottawa, a very nice condo (ground level, 2 bedroom, 2 bathrooms) goes for $110,000 – $120,000.
I’m sure your comment is well intentioned. Problem is Gold & Silver are nothing more than commodities traded on comex. Niether are considered legal tender.
Although gold is usefull for dental caps, jewellery, or coating NASA’s probes against gamma radiation one has to wonder how this metal equates into currency?
But there are those who continue to believe in its virtues.
Oh, don’t get them started. — Garth
Private equity crash could trigger next wave of financial crisis warns Bank of England
guardian uk
how is this democratic?
The sector is dominated by oligopolies (in the UK, just 5 banks control 85% of the money supply).
http://theconversation.com/a-short-history-of-banks-and-democracy-11991
John Keane
Professor of Politics at University of Sydney
thiscountryis going down the toilet
I’m sold, good post
It seems to me, in reading this blog that the only ones screaming SELL are the ones that rent. The only ones predicting a housing crash are renters…trying to convince themselves that the have done the right thing.
70% of Canadians own homes….that’s a lot of stupid people. And the other 25% are saving up for one, leaving 5% RENTERS.
The renters don’t share with you the horror stories of renting – scumbag landlords – moving every year whether you like it or not – crap houses that the landlord refuses to fix – their stock market losses when the market crashes, etc. etc.
We just hear the rosy stuff, kinda makes one wonder.
During 9/11 how’d you do in the market or 2008…during those periods my house remained the same or increased in value….while markets crashed.
If you guys are right, why isn’t everyone selling or a large % selling. Where are the huge increase in listings? I don’t see it so are you guys just that much smarter than the rest of Canada?
Or are you wrong?
You’ve been beating this drum for some time now.
Rates keep dropping and my house keeps going up.
What the renters fail to mention is the rent they’re paying is to a SMART homeowner who has YOU paying off his mortgage.
For the last 5 years my house has gone up an average of $25K per year. ($125K)
If you’re renting you’ve paid (lost) roughly $25k per year. ($125K)
My numbers are facts whereas as your numbers are just predictions that may never happen. Folks here also said rates would take off in 2013…then 2014…now the latest is 2015.
Hmmmmmmmmmmmm
If rates stay the same or drop, my house price is staying the same or going up.
Pure logic
The only facts you ever present are Vancouver…”look what happened there…blah blah blah.” Vancouver was a huge fraud, based on Asian money. You watch. It is not a reflection of the rest of Canada like some here are trying to portray it as.
You can own a home AND invest in the market. Win win. It doesn’t have to be one or the other.
My rant for the night
#169 Old Man on 04.29.13 at 3:28 pm…
You are but a grasshopper compared to our shopping techniques.
But that is a story for another blog!
#194 Craig on 04.29.13 at 8:05 pm…
Silly me, why I’m going right out first thing tomorrow and plunk down my cash, why I don’t have a worry in the world!
Funny thing in Kelowna, after tracking prices on many properties for the last two years, they are still coming down – and I don’t like sharp knives.
And the horror of it all, my nearly new high-end rental is costing nearly half of the ownership costs. How stupid of me!
BTW, the under $ 17K for rent took place at the same time that the property has lost roughly $ 25K a year in value over the last five years!
If you would like the math, let me know!
Following up on your response to my comment (#101), giving an example of a “balanced portfolio” that yielded 10% last year does not mean that every portfolio considered balanced would have gotten such a high return. The TSX was only up 4% last year, so if you had a high amount of canadian holdings (as many canadians would, no?), it is likely you would not have done so well. Are you saying that you recommend a portfolio consisting of mostly international holdings on a consistent basis? My point is that assuming such a good return for everyone with a balanced portfolio, year after year, seems unrealistic.
A balanced and diversified portfolio is just that. Canada accounts for 3% of global markets. Why would you have a majority of your wealth in Canadian assets? It’s a common mistake – 70% of Canadians have 100% of their net worth in domestic securities. No wonder they look depressed. — Garth