Blogonomics

value

This pathetic but prescient blog told you yesterday mortgage rates would be rising. And so they are. On Monday. Once again RBC’s leading the way, adding another fifth of a point.

That means five-year fixed loans will cost 3.49% – yeah, still cheap, but a big jump from the 2.89% of two months ago. Not only will all the banks follow the Royal’s lead, but there are more increases to come after that. So much for all those prickish, know-it-all, self-trained, auto-lubricating monetary analysts who piled on here, telling us rates would stay low for decades.

By now certain things should be clear, even to them. First, the era of dirt-cheap money is shuddering to a conclusion. That’s what all the market turmoil has been about this week. Second, this is very bad news for real estate. Third, if you don’t see this volatility as an opportunity to diversify into financial assets when they’re on sale, you will later. When it’s passed.

Since 2009 everything’s been distorted by emergency interest rates and government stimulus. Now a whole slew of people think 2.8% mortgages are normal, that nice houses can be bought without savings, that real estate always goes up and it doesn’t matter how much money you owe if you can make the monthly.

Cheap money screwed up heads, and markets. It spawned speculation and risk-taking, kicked the hell out of savers and made millionaires of people owning crappy Vancouver bungs. Lately it shot bond prices into orbit, and pushed the Dow up too far too fast. It all had to correct. But some things will not quickly recover.

Let’s remember why the cheap money’s ending. As the US economy continues to grind higher Washington doesn’t need to spend $85 billion a month buying bonds. As that money gush ends, bonds prices fall and yields rise (why mortgage rates are swelling). Turning off the stimulus tap also means less inflation, which has just tanked gold and other commodities, like oil (hitting the TSX hard).

Sadly, low commodity prices and rising rates are toxic for Canada. We have an economy addicted to real estate and resources, with a glut of unsold oil, dumbass housing values and historic levels of household debt. Meanwhile the States recovers (the latest housing data this week was stunning – five million sales, the best since 2009), and will soon be doing it without the mindless accumulation of more government debt.

A tale of two nations. No wonder US stocks are up 14% this year and the Toronto market’s lost 2%. The current correction for equities will doubtlessly turn out to be just that but, as I said, some assets are down for the count. Gold will be one. Nothing but hurt.

Canadian real estate is another, for reasons I’ve pounded – debt, saturation, affordability. Now you can add interest rate creep and economic malaise.

In case you missed it, the housing ‘recovery’ realtors were ramming down our throats in the past two weeks is not supported by the facts. For example, construction and the sale of new homes in the country’s biggest market is in serious shape. Last month was the worst May on record for GTA builders and developers with only 2,500 units changing hands. That’s down 30% from the same month last year, and 44% from May of 2011. Sales of new SFHs are running 33% below the 10-year average, and now sit also at a record low.

Say the builders: “The issue of home affordability poses a significant challenge for new home buyers in the GTA. Government fees and charges continue to increase across the region, making it increasingly difficult for our industry.” Now imagine what higher mortgage rates and a turgid economy will do.

What a fitting week for a fluffy little poll to come along showing how obsessed Canadians are with real estate. Forget boobs and pecs, most of us spend more time thinking about tubs and grout. Eighty-four percent do it weekly. A third say they’re obsessed with housing. In Toronto, it’s almost half.

Look in the mirror. This is what cheap money did for you. House-horny, compulsive, manic and mortgaged. What a spectacle. What an ending.

RETURNS

158 comments ↓

#1 guelphstudent on 06.20.13 at 8:56 pm

For all of those who have been waiting for prices to decline, well aparently condo prices in eastern part of Toronto’s downtown have been falling for over 9 month now.

#2 Weedeater on 06.20.13 at 9:00 pm

“Government fees and charges … difficult for our industry? Who are the home builders kidding? People don’t make enough or have the tenacity to save enough to buy houses. Are they as deluded as the property virgins?

#3 visorman30 on 06.20.13 at 9:02 pm

I’m just a bit confused with the last statement and the chart presented.
Just from the chart it seems that gold was on track with the Dow all the way up to Jan 2013 but the cheap rates have been in effect for quite some time.

What did house horniness have to do with gold being down?

#4 Smoking Man on 06.20.13 at 9:02 pm

Garth, you know I love you man, and like it when your right, but did you not notice what happened today.

All asset classes sold off everybody hording us dollars..

Sounds like the market is scared shitless, and let’s face it, very little retail and playing the markets, apart from insane smoking men.

No rotation happening, you really sure you want go with that rosey call.

Me I’m dazed and confused and haven’t started drinking yet.

#5 len on 06.20.13 at 9:03 pm

This is not about the American economy improving thought that interpretation is flogged heavily and many buy into it. Housing is not improving on fundamentals (note the stagnating wages) but on the back of speculation by private equity chasing yields. This is all predicated on cheap money. That is all. When cheap money is withdrawn, all those “improving fundamentals” are gone with it.

Fed induced chaos – temper tantrums on wall street. Talk about fundamentals – LOL!

Do you feel lucky?

#6 Canadian Watchdog on 06.20.13 at 9:03 pm

Forgive me but I’m a little confused. The chart shows the Dow overvalued and gold undervalued. So buy stocks now right Garth?

You’re the technical guy. Figure it out. — Garth

#7 Mike smith on 06.20.13 at 9:07 pm

I like your blog. I’m not a gold bug at all but you should throw up a 10 year chart on gold v.s US stocks! All that QE and stocks are where they were 13 years ago!

#8 LIS on 06.20.13 at 9:07 pm

East York only SOLD signs. People think it’s “cheap” in comparison with Van. I can’t believe there are still bidding wars in Toronto. People are nuts. Look south!

#9 John on 06.20.13 at 9:10 pm

Garth,

I’ve been religiously following your advice for a couple years now. Thank you,
I’ve done better than anyone else I know. However, on days like today, I’m at a
loss as to what to do. What do you think of day-trading inverse/short ETFs? I
was so tempted this morning to purchase ProShares Ultra VIX Short-Term ETF
(UVXY), but didn’t. Unfortunately for me, it ended the day up 23.25%. I could
have make some quick and easy coin, which would have offset some of the declines
we all experienced today (no, I didn’t panic sell anything, in fact I bought
more).

#10 TurnerNation on 06.20.13 at 9:11 pm

Here I sit broken hearted; tried to exhort but only started.

– Here’s another photo of Bandit moderating this pathetic weblog:

http://www.quickmeme.com/meme/3uxirc/

#11 HockeyNightInAmerica on 06.20.13 at 9:14 pm

To all those who live the credit lifestyle this next recession is coming for you!!!

#12 jan on 06.20.13 at 9:16 pm

Its all true Mr’Turner but please remember. Canadians are just to stupid and to entitled to change anytime soon, especially when everyone is bullshiting them including entire real estate industry and now the Canadian Government …The End

#13 Dean Mason on 06.20.13 at 9:20 pm

This has been a pattern for the last 4 years,stock markets rise first,then bond yields rise and they both fall back.If the economic data of a lower U.S. unemployment rate to minimum 6.50% and a rising U.s. inflation rate to 2.00% as the fed wants plus at least a sustained 225,000 to 250,000 monthly non-farm payroll reports for at least the next 9 to 12 months do not materialize,it’s back to square one.

U.S. housing and real estate must continue to rise not 10%-15% yearly gains but at least 4% to 5% per year for at least 4 to 5 years and then we will get out of this rut called stimulus,QE 85 billion a month the fed buying MBS,treasury bonds.

As the economy improves tax receipts go up and budget deficits come down.I think that a 6.00% to 6.50% U.S. unemployment rate is the lowest we will see unlike the late 1990’s to 2000 with a 3.90% unemployment rate. A 4.75% U.S. 30 year mortgage and 3.95% 5 year fixed mortgage is close if things improve like the fed wants over the next 6-9 months.

#14 Randy on 06.20.13 at 9:20 pm

Reducing Government Debt ????? They would go thru withdrawls…. Can they blame Rob Ford….or Mike Harris ?

#15 CondoMathCourse on 06.20.13 at 9:22 pm

Higher mortgage rates about to crush the condo market in Toronto. Look at the new math based on today’s rates.

$350,000 mortgage on 600 Sq ft downtown condo, average scenario these days, probably higher in some of the more hip areas.

$1500 monthly payment @ 3.49%, 25 years am, $400-500 maintenance fee, $250 prop tax, $150 cable/internet/phone, etc.

That’s around $2400 monthly for an entry level box in the sky and that’s after tax costs most people can’t write off either.

Queue the crash folks…. Guaranteed 20% lower prices by this time next year. Book it.

#16 Julia on 06.20.13 at 9:23 pm

#10 TurnerNation on 06.20.13 at 9:11 pm

Cute pic

#17 East Van on 06.20.13 at 9:23 pm

Was today’s market correction not due to the fact that investors don’t think the economy will continue its tepid recovery when quantitative easing ends?

No. — Garth

#18 DreamingInTechniColour on 06.20.13 at 9:25 pm

For a little brevity…

http://www.lyrics007.com/Don%20McLean%20Lyrics/American%20Pie%20Lyrics.html

#19 DaleFromCalgary on 06.20.13 at 9:25 pm

Calgary radio stations tonight (Thursday, June 20) are running extended news breaks about flooding in Calgary and foothills towns. We had 150 mm rain in the foothills last night and 50 mm inside the city.

People who bought particleboard McMansions in new subdivision Discovery Ridge are learning what the word “floodplain” means. This southwestern suburb of Cowtown is less than a decade old. Older suburbs along the Elbow River are also being evacuated. About 75,000 Calgarians will sleep somewhere else tonight.

High River and Okotoks has new suburbs built on the floodplains. According to news reports, about 150 High River residents spent today sitting on their rooftops in the rain waiting for rescue.

Most of these houses will not be covered or only partly by insurance. Even after they’re fixed up, what’s going to happen to prices? They might get lucky and sell them next year to some young and stupid couple just off the boat from Toronto who didn’t hrar the news reports. But you can bet that Discovery Ridge house prices are sinking fast.

#20 Garth is not god on 06.20.13 at 9:29 pm

CME Hikes Gold Margins By 25%, How much % margin is hiked by the stock exchange ???

#21 Humpty Dumpty on 06.20.13 at 9:30 pm

Humpty Dumpty Markets the Risk of Fed Volatility, Gross Says

“I doubt they can put Humpty Dumpty back together again,” Pacific Investment Management Co.’s founder Gross said

Vice Chairman “Janet Yellen’s task was to damp volatility, to lower that term premium, to calm markets, and they did that. But now there is significant unrest.”

Chairman Ben S. Bernanke said yesterday the Fed may start reducing bond purchases later this year and end the program in 2014 should risks to the U.S. economy abate. The Federal Open Market Committee forecasts the economy to grow 3 percent to 3.5 percent next year, driving the unemployment rate down to 6.5 percent to 6.8 percent from 7.6 percent in May.

Government debt around the world fell, with Treasury 10-year note yields climbing to a 22-month high of 2.47 percent today, as investors priced in the odds of reduced monetary stimulus. Emerging-market assets dropped, with India’s rupee and Turkey’s lira touching record lows.

“The real economy won’t follow the path the Fed thinks it will,” said Gross. “The chairman suggested yesterday that, once we get through this soft patch of fiscal austerity in the U.S., that the 3 percent growth number is indeed where we should be and where they expect we’ll be. We have our doubts at Pimco.”

http://www.bloomberg.com/news/2013-06-20/humpty-dumpty-markets-the-risk-of-fed-volatility-gross-says.html

#22 Canadian Watchdog on 06.20.13 at 9:33 pm

You’re the technical guy. Figure it out. — Garth

Posted it twice on this blog a few weeks ago how smart money (banks) were short S&P. They're killing it now. And while PMs are plunging, they're going long.

Same routine as always. Go opposite from the herd.

#23 Devore on 06.20.13 at 9:34 pm

#207 DonDWest

Do you know how I respond to people who tell me “life isn’t about stuff”?

I answer, “good, then you”ll have no problem handing me over your stuff. Oh, you’re not willing to do that? Oh, that’s right, you’re just being a condescending jerk again.”

Stuff is just things you buy with money to maximize your use of time. Time, which is the most precious commodity of all. Some day you will understand this, and stop your pointless, incessant whining.

#24 not 1st on 06.20.13 at 9:38 pm

Variable rates are unchanged…winning

#25 Pr on 06.20.13 at 9:39 pm

So much for all those prickish….telling us rates would stay low ….

I am one of those. I am happy you where right. Again.

#26 Zach on 06.20.13 at 9:44 pm

Garth, I’ve been following your blog for the last two years now. In all that period my wife was pressuring me to upgrade and buy a bigger house in Oakville, but I was hesitant. I agreed 100% with your views and I believed your forecasts about the real estate will come true. That they reached thir peak in 2011 and will inevitably come down… What a mistake! Houses that were selling for 780K in the spring of 2011 are 900K now and it doesn’t look that their price will come down. Maybe 4-5% in the next couple years, but not 15% as they grew in the last couple of years… As a result I’m depressed to the point of having suicidal thoughts! And not only that: I live with Lysistrata now! What a looser I am… I shouldn’t have spent one hour each night reading your blog. It is really very pathetic… I know that you are not omniscient, but this is a huge blunder! Seriously!

You have a wife problem, not a house problem. — Garth

#27 Mick on 06.20.13 at 9:51 pm

“Financial assets are cheap.”

I LOL’d hard.

I said they are on sale. — Garth

#28 T.O. & GTA bidding wars debunked June 20 on 06.20.13 at 9:52 pm

Check this out, so many damn lies : http://jsfiddle.net/tLutm/

http://recharts.blogspot.ca/2013/06/gta-condo-damn-lies-jun-20.html
http://recharts.blogspot.ca/2013/06/to-sfh-bidding-wars-debunked-jun-20.html
http://recharts.blogspot.ca/2013/06/gta-sfh-bidding-wars-debunked-jun-20.html

#29 Donald Trump on 06.20.13 at 9:58 pm

“The Pigs of the Okefenoke”

http://grizzom.blogspot.ca/2013/06/the-pigs-of-okefenoke.html

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

Good morality tale…and why one should be cynical via the old bromide :

“Hi …I’m from Gov’t,… I am here to help Y-O-U “

#30 Julia on 06.20.13 at 10:01 pm

#15 condomath
Or you can buy an older condo near Bloor and Sherbourne for $465k and pay $1140 a month in condo fees.

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13346343

#31 Zach on 06.20.13 at 10:04 pm

#26 – You have a wife problem, not a house problem. — Garth
————————————————————
That’s probably right, but now I also have a financial problem because I trusted this blog!

But we still love you. Hug? — Garth

#32 The Prophet Elijah on 06.20.13 at 10:04 pm

Garth why do you have to be so mean to the gold bugs they didn’t do anything to you. Anyway here is my good friend Jim Rogers today buying gold:

“Gold bull far from over…”

http://www.hardassetsinvestor.com/interviews/4917-jim-rogers-i-bought-more-gold-today-bull-market-far-from-over.html

People might remember his quantum fund that made investors 4000% over 10 years. He’s good.

#33 TheCatFoodLady on 06.20.13 at 10:12 pm

#31 – Zach. The only way I can see you have a financial problem is if you went ahead & ‘upgraded’ your home anyway.

#34 Chickenlittle on 06.20.13 at 10:12 pm

What a joke the banks are!

We went to [email protected] for a line of credit to pay off my VISA with the student money on it. I wanted a line of credit with a cheaper interest rate for $5000. That is all the debt I currently have. Oh, and a car payment. Both of us have full time jobs. Well, we were denied the line of credit because apparently we have no savings, BUT we do qualify for a $350k mortgage. Go figure.

It’s easier to get a mortgage than it is to get a small loan that I will have paid off in no time.

#35 My thoughts on 06.20.13 at 10:17 pm

#26 Zach… Sounds like first world problems. Put it in perspective… Wawawa crying about not being able to move to a bigger macmansion. I’m a wife who reads this blog and have also wanted to move. Having said that. I am realistic and just because you want something if you look around and see the reality of what’s happening and realize that everyone is over their heads in debt… You also realize sometimes it pays to wait. Come September you may be posting the opposite of what ou did today ad thanking Garth. Geez Louise… This blog didnt preventing ou from buying a bigger home… Your logic did. As for your wife. Figure it out.

#36 TurnerNation on 06.20.13 at 10:19 pm

Just remembered I saw this today. Now about that ship building contract….

“Imperial Oil Ltd. will close its 95-year-old Dartmouth, N.S., oil refinery and eliminate most of the 400 high-paying jobs it provides in the Halifax area – victims of too much refining capacity in the Atlantic basin and the high cost of imported crude.”

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/imperial-oil-to-close-nova-scotia-refinery-convert-it-to-terminal/article12662801/

#37 TurnerNation on 06.20.13 at 10:20 pm

SM:

Student loans?

http://news.cnet.com/8301-17852_3-57590249-71/google-gpas-are-worthless/

“Google famously used to ask everyone for a transcript and GPAs and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything.”

Bock revealed: “We found that brainteasers are a complete waste of time. How many golf balls can you fit into an airplane? How many gas stations in Manhattan? A complete waste of time. They don’t predict anything. They serve primarily to make the interviewer feel smart.”

#38 Yitzhak Rabin on 06.20.13 at 10:31 pm

Riddle me this: How can the US Federal government afford the higher interest payments? Best case QE is scaled back ($65 billion) later this year and ended in 2014. What will that do to rates when the biggest treasury buyer exits the market?

Interest rates sensitive assets like your “bulletproof” REITS and preferreds will be hit the hardest in a rising rate environment.

The Fed is boxed in. Any exit strategy collapses the economy with higher (unaffordable) interest rates. Continuing QE infinity leaves them with a currency collapse, uncontrollable inflation and high interest rates.

The outcome in 100% dependent on central bank action. Deflation and purging of the bad debts of the last decade or high inflation.

#39 Sam on 06.20.13 at 10:34 pm

John #9

Don’t panic. Keep buying the dips, all the way down.

Amazing how many people cannot stomach a 5% decline. In 2011 the correction was 20%. But who remembers that? — Garth

#40 Sparky55 on 06.20.13 at 10:36 pm

Looks like it is becoming known that we are over the tipping point…

http://www.halifaxrealestateblog.net/

#41 groovin123 on 06.20.13 at 10:43 pm

Bargains, bargains galore out there.

XGD.T (TSX Senior gold producers index) hit 10.32 today – close to the lows of October 2008 ($10.01 when gold hit $690/oz). BUY.

XRE.T – Real estate trust index. A basket ‘o REITS. If you bought any of this in the last 2 years and held, you are now underwater. A .5% rise in mortgage rates drops this puppy 15%+ from it’s highs??… Overdone, and a BUY.

Both of these pay you dividends, btw.

Buy things when the market pukes ’em up. Always.

#42 Smoking Man on 06.20.13 at 10:44 pm

I’m speechless

Got an email from a leading Canadian university,

Garth you passing my name around.. Only reason I say that your blog post blogonomics.

They want to talk to me about me teaching a course herdonomics….

Are they getting so desperate for loot, any crazy topic will do.. I’m am after all the best herd observer known to man.

How is this even possible, I barely graduated high school…

My thinking, my posts about the uselessness of schooling must be making traction, Wana shut me up.

I smell a rat…..

I will just throw out a ridiculous wage request…

And let’s see….

GARTHO your pathetic little blog has reach.. Wow

#43 mississaugaboy on 06.20.13 at 10:45 pm

to see today market, Is it time to convert equities into bonds or income. Any suggestion

#44 Keeping the Faith on 06.20.13 at 10:49 pm

#31 Zach,

if you invested the money you saved over the last 2 years into a balance portfolio you would be net zero or net positive…. oh I forgot, you already own a home, I thought you were renting.

Sorry … back to loser status.

Renters Rule.

#45 Piccaso on 06.20.13 at 10:49 pm

Four Reasons Gold Falls Below $1,000: Analysts

http://finance.yahoo.com/blogs/talking-numbers/four-reasons-gold-falls-below-1-000-analysts-181656789.html

#46 Herf on 06.20.13 at 11:01 pm

#26 (Zach)

“In all that period my wife was pressuring me to upgrade and buy a bigger house . . .”

“As a result I’m depressed to the point of having suicidal thoughts!”

#31 (Zach)

“. . . but now I also have a financial problem because I trusted this blog!”

I don’t know if you’re joking or just trolling in order to gain some notoriety and/or sympathy on this blog.
You already have a house, so what’s your “financial” problem? Sorry; I don’t see it. If you have a problem, I think it is something else, perhaps something noted in the following observations made 2 to 3 millenia ago:

Ecclesiastes 4:4 4 And I saw that all labor and all achievement spring from man’s envy of his neighbor. This too is meaningless, a chasing after the wind. (NIV)

Luke 12:15 15 Then he said to them, “Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions.” (NIV)

#47 economictsunami on 06.20.13 at 11:02 pm

“Turning off the stimulus tap also means less inflation…”

The Fed said they might/ could taper depending on the future of the US economy. I would be surprised if tapering would begin in earnest this year.

Disinflation/ Deflation is still their constant concern and the Core PCE (Ben’s favourite measure) is @ a 50 year low.

Few economic data factors point to positive trends for a clear case to be built that the US economy can muster enough sustainable strength.

Neither consumer spending, nor business investment. They have the supply but lack sustainable demand…

#48 Dean Mason on 06.20.13 at 11:02 pm

#24 not 1st

You would be winning if you had no debt.You are just losing less with a variable rate mortgage than with a fixed rate mortgage for now.I give it 2 years and your 2.79% rate will be 3.79%,in 5 years 4.79%.

If you have a $350,000 mortgage you will be losing $7,000 a year in 5 years.What do you think water rates,electricity rates,gas prices,natural gas prices,food costs,other energy costs,medical costs,repair and maintenance costs,car payments and car prices,CMHC premiums,home and car insurance costs,tuition and education costs,other debt interest costs,H.S.T. and other taxes will be in 5 years.

It will hit you guys like a ton of bricks when your lifestyle’s costs are not sustainable.You guys are digging your own graves and only have yourselves to blame.Winning not a chance.

#49 Smoking Man on 06.20.13 at 11:02 pm

#37 TurnerNation on 06.20.13 at 10:20 pm

Just read your post, good one link by the way.

You in on this Herdonomics thing, you in cahoots with Garth on this.

Ha, like I would ever work for the obedience machine.

I Can see it now

Professor Smoking Man…..

#50 not 1st on 06.20.13 at 11:05 pm

Had the stock market really reflected the state of the u.s. economy from the past few years, its valuation would be in around 9-10,000, not 15,000 like it was run up to by QE.

So now that their god BB has rolled back the free cash, valuations will come back in line. Look for retrenchment backwards of at least 2500 pts in 2013-14. New recession in 2015.

Fiction. — Garth

#51 Freebird on 06.20.13 at 11:11 pm

@#35

Great answer. I’m also a wife (but why gender matters I’m not sure) and read this blog. We qualified for much more mortgage then signed for and a house much smaller then we could have bought by mutual choice. I actually know more men who love to spend and are poor money managers who give credit to spouses. Here’s a suggestion use what you read on blogs as general information (no matter how good) and don’t substitute your own judgement for someone else’s…too simple I know.

#52 not 1st on 06.20.13 at 11:22 pm

What is the real amount of debt added to the system since 2008. Are you ready for a shock?

TARP – 1 trillion
U.S. budget deficit addition – $7 trillion
FED Bank bailouts – 1.7 trillion
Overseas Lending – 3 trillion
FED QE – 85 billion per month x 36 months = 3 trillion

More than 15 trillion spent to restart this fiasco economy. And sovereign debts don’t matter right?

Using today’s mortgage rates as a guide, the cost to service that debt is more than $300 billion per year. If normalized rates come to effect, say 4%, that number is over $600 billion per year. The annual budget of the U.S.A is 1 trillion. So more than 50c of every dollar will go to service the debt.

And this is the phoenix economy rising from the ashes? This is nothing more than Greece ver 2.0 but in slow motion.

Dear Ben can print all he wants but he can’t change the laws of mathematics. Neither can Garth.

Despite your efforts, America continue to recover. Get a new hobby. — Garth

#53 espressobob on 06.20.13 at 11:25 pm

Its like buying a new pair of running shoes. Most go to the glitzy stores and slobber over the latest creation. Air soled cushion supports, arch adjustable, & reflective tape. Comes along with a price tag of say $240. In fact not only is there a line up for this product, some will fight over getting a pair!

Six months later the same shoe appears on the discount rack for $50 bucks. Most consumers look down their nose at these ungodly looking things as if they where demonized or emitting radiation. I aint buying that! Must be defective at that price.

Many didn’t realize the retailor was flushing this product to up the cashflow for next years inventory.

As if the next line of runners possess some special feature? Maybe jet propulsioned. But you can bet a price tag of say $300.

The point is simple, ‘Herd mentality’. Buy high-sell low.

#54 Dean Mason on 06.20.13 at 11:34 pm

#24 not 1st

All those costs from water rates to electricity,natural gas,food,energy,home and car insurance, house,car,maintenance and repairs, car payments,gas,CMHC insurance premiums,other debt interest costs,H.S.T and other taxes,medical,property taxes etc. which I missed to mention will add up to at least 30% more expensive in 5 years.

If you are spending $2,000 a month on these expenses you will looking at $600 more a month.This is equivalent to a 2.00% point increase on a $350,000 mortgage.So with a $7,000 more in interest costs on your mortgage means you are looking at $14,200 a year more.

Since it’s after income tax we all pay our expenses,it is really costing you an extra $21,600 a year or $1,800 a month not $14,200 or $1,183 a month.You still think your winning.

#55 Something on 06.20.13 at 11:35 pm

And so it began. In few months mortgage rates will be even higher. I predict by the end of August, “5 years fixed” will go over 5%. The people will realize how crazy the house’s prices are with new mortgage rates. Almost nobody will buy any RE. The number of sales will try to rich a zero zone then people start to panic. :) The bubble will show real signs of bursting before New Year. Right after Ben leaves we will see the rest of it. About U S A market. I doubt it that high mortgage rates will help RE there. The last spike in RE was a market rebound, but the trend still there. I agreed with you Garth about U S A stock market, but you need more patience to start buying it on dips. It will correct even more. I want to see what big guys are going to do to stop this correction. Once it will hit a double dip, then I will buy it. For now CASH is KING.

#56 Gerryantics on 06.20.13 at 11:48 pm

6 months is not an investment plan, put a five or ten year chart on stocks vs gold, for some practical investment reality.

Practically all asset classes around the world are down with some biggest one day drops in years.

The bond market globally is beginning to crack, if it really begins to break down, forget about the stock market, they both will get flushed.

#57 Basil Fawlty on 06.20.13 at 11:52 pm

“Despite your efforts, America continue to recover. Get a new hobby. — Garth”

The recovery is an illusion built on trillions of dollars created out of thin air. The US economy is a hollowed out shell being kept upright with the biggest money printing binge in world history.
They are still printing $85B per month, that is reality. Tapering is just smoke and mirrors.

#58 US Realtors being honest on 06.21.13 at 12:09 am

Refreshing to see realtors in the US doing thier job and setting expectations for house prices – seems laughable for that to happen here…

http://www.cnbc.com/id/100831431

“For six straight months, home prices have been leaping in double digits from a year ago. In May, the median existing home sale price was 15.4 percent higher nationally than May of 2012, according to a new report from the National Association of Realtors.

The Realtors themselves say that kind of jump is “unsustainable.”

“Some of the increases can be explained by the fact that it is recovering from an over-corrected situation,” said Lawrence Yun, chief economist for the Realtors. “But with people’s income rising at only 1 or 2 percent and prices rising in double digits, it cannot continue.””

#59 ronthecivil on 06.21.13 at 12:12 am

Went and looked at a place today in New West (don’t worry blog dogs will only buy places on the cheap that would carry themselves with rental income if need be) and the realtor had no problems at all with the idea of me submitting an offer below asking. In fact, he encouraged it, and said to just try and he would see what he could do, noting that it is in fact a buyers market.

FYI garth I got prequalified last week for a five year fixed at 3.1%. That was lower than advertised. Maybe people with good credit can still get good rates so long as they don’t go telling F about it…..

Mind you, if a lowball does get accepted, I am going to see if I can get the ten year 3.99% the banker was shocked would actually be available (and was actively discouraging me from due to how shockingly bad a deal it is for the banks!).

#60 Vosdelerton on 06.21.13 at 12:23 am

The money launderers from abroad are inflating the bubble along with the clueless buyers who are forced to pay extravagant prices for homes.

#61 Blogonomics — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer on 06.21.13 at 12:23 am

[…] via Blogonomics — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]

#62 Shouldn't be new anymore on 06.21.13 at 1:01 am

# 26 Zach: What a mistake! Houses that were selling for 780K in the spring of 2011 are 900K now and it doesn’t look that their price will come down. …..I know that you are not omniscient, but this is a huge blunder! Seriously!
_______________________________________
Zach, your problem is you only think about the upside, while keeping the downside in your blindspot. So, you assumed you lost 120K! Seriously, did you? How much did you think it would have cost you, agency fees, tranfer tax, etc…… to sell your strata and purchase that house. Do you think somebody already had a house in hand, and need to sell old and buy new and remortgage can have the same benefits of “timing” as somebody lurking around? Or if you keep both, how much do you think that LOC can have caused you? Or did that 900K included hefty renovation cost? You should be happy if you can break even!

Then again, you will think at least I would be living in a bigger house. Really, or sleeping on deeper debt? That are the people surfing through sleepless nights, waken up by “noises” out of the blue when RE went down!

Before you jump, plot step by step all your way in and out of the emergency exits in case it fail first! If you think there’s no way out, I am going all in, that’s gamble! And you’re sure to end up in trouble.

#63 retired Boomer - WI on 06.21.13 at 1:12 am

#156 STICKLER on 6/19/2013

You’re right. I must have missed your entire point. I went back and re-read your first post, and I still don’t get your point. Perhaps, as an American, I fail to read between the lines.

Anyhow, such fun in the markets today! This too, shall pass.

Tomorrow brings what it must. I still have to wax the car for the parade here Saturday, and finish my “honey do” list.

Will check on the markets at their close to see if I lost a ton more, or made back a few dimes. Either way, it will NOT change my plans, or life. Other things can, and will but the actions of Wall St. or Real Estate will not.

I “harvested” my earnings earlier, so we’re playing with a lot of the house’s money now.

#64 Tony on 06.21.13 at 1:14 am

Re: #25 Pr on 06.20.13 at 9:39 pm

The bottom will fall out of interest rates next month in America. America has been losing jobs every month for the last 6 years but we’ve been told different. I’m betting with the interest that has to be paid on the debt that America we reconsider all their lies and tell the truth. At that point in time interest rates will fall to zero like Japan once was.

#65 HAWK on 06.21.13 at 1:24 am

#26 Zach on 06.20.13 at 9:44 pm

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

Some parts of Oakville are “High Demand Areas” not representative of nationwide performance.

Nationwide the market is weakening, but real estate prices are always local.

#66 Tony on 06.21.13 at 1:26 am

Re: #51 not 1st on 06.20.13 at 11:05 pm

The DOW would be in the 3 to 4,000 range not 9 to 10,000 range if America could only tell the truth and not lie about everything.

#67 FutureExpatriate on 06.21.13 at 1:43 am

Boobs and pecs wrinkle, sag, and rot away.

While stainless steel and granite is…

5-10 years, driven by fairly idiot women who follow magazine decorating trends driven by corporate interests and warehouse stores like they were the Holy Scriptures.

Who gives a flying ef what your friends and coworkers think? They’re reading the same brainwashing crap you are.

Thirty years ago you same Babes were oooh-oohing over the same popcorn ceilings and wall to wall orange shag carpet you’re yanking out of perfectly good houses now. And turning up your noses at Depression era hovel hardwood floors and “farmhouse sinks”. And loving cedar cathedral ceilings that now must be painted white and preferably, flattened and coved.

Like something because YOU like it (not because it’s the flavor of the week) and stick with it until you die. Time capsules not only rock for the discerning in the next generations, they save hundreds of thousands over a lifetime.

#68 angela on 06.21.13 at 2:51 am

So much for all those prickish, know-it-all, self-trained, auto-lubricating monetary analysts who piled on here, telling us rates would stay low for decades. Garth

garth get off your high horse the interest rates i think them prickish know it alls were talking about the feds and bank of canadas lending rate .where do those rates stand today and btw I think your housing crash prediction also lasted a decade you started back in 2001ish

A person having to shell out more for a mortgage on Monday hardly cares if it is the result of bond yields or the central bank discount rate. Straws. Grasping. — Garth

#69 angela on 06.21.13 at 3:24 am

#38 Yitzhak Rabin on 06.20.13 at 10:31 pm

Very well said too bad Garth doesn’t see your extremely logical and mathematically correct understanding of basic monetary science involving us government bonds

The bullion bunnies fight back! Too bad. — Garth

#70 Buy? Curious? on 06.21.13 at 5:12 am

Hey, Mr Garth! Don’t you hate it when an Ego Inflated Blowhard, uses terms like “Herd Mentality” (No disrespect Smokey). As if they know what the hell they’re talking about. Animals that herd, use that tactic to defend the greater good of the species. The way a herd works is that the old, sick, stupid or unlucky protect the stronger members in order to pass on, select, the genes most used for the species survival. By giving up your collective information and negatively motivating people (“Hey, your stupid. You should do this to make money.”) you are helping the weak to survive which means there is now a greater chance of You becoming the “unlucky.”

So keep your comments vague and immature, you bald headed, convertible driving, know-it-alls. Don’t spill the beans.

http://www.youtube.com/watch?v=hF4OlKKrFfI

#71 Yellow Rox Rock on 06.21.13 at 5:21 am

this guy from the UK rants about the real estate situation over there. you’ll find many similar complaints in his diatribe to what we express in this forum.

he is also the head moderator of the MGTOW forum, which may be familiar to those of you who have at some point typed “don’t date single moms” into google :)

http://www.youtube.com/watch?v=D0MYHKrHE04

#72 fancy_pants on 06.21.13 at 7:11 am

What a table this country has set…
Maybe Trooper said it best… “you’re just a 3 dressed up as a 9”.

but no, it’s different here.

um. no.

#73 Mr. Monday Night on 06.21.13 at 7:29 am

#64 retired Boomer – WI on 06.21.13 at 1:12 am

#156 STICKLER on 6/19/2013

You’re right. I must have missed your entire point. I went back and re-read your first post, and I still don’t get your point. Perhaps, as an American, I fail to read between the lines.

—————————————————————
Yep, got it. You made money because you worked hard for your STUFF, which is the goal apparently and those who weren’t as smart or lucky as you can go suck it. Yet another value-added post from yourself.

Carrying on a conversation from yesterday isn’t obnoxious, not one bit. Maybe it’s time for you to move along.

Did you read between THOSE lines?

#74 Stickler on 06.21.13 at 7:30 am

@ #64 retired Boomer – WI on 06.21.13 at 1:12 am

Maybe I misinterpreted your comment from yesterday.

These guys summed it up pretty well (yesterday’s posts)…
#216 Mister Obvious on 06.20.13 at 6:49 pm
#217 Blacksheep on 06.20.13 at 7:03 pm

#75 Buy? Curious? on 06.21.13 at 7:48 am

Hey Garth! Thanks for putting me at number 69. You didn’t have to do that but it’s much appreciated.

I’m a little confused (only on this topic) about the following statement:

“Say the builders: “The issue of home affordability poses a significant challenge for new home buyers in the GTA. Government fees and charges continue to increase across the region, making it increasingly difficult for our industry.”

Who are “the builders”? Is there some collective figure head that speak for this industry? The more I read this blog, the more it reads like a J.R.R. Tolkien book. The builders are the Dwarves. You are Gandalf, Smoking Man is Gollum (No disrespect Smokey but we know what you look like walking out of a casino) but who could play Bilbo Baggins? He’d have to be short, have lots of spare time to go on adventures and be a little light in the loafers. Hey I know! George Strobobulopoluspulus! His CNN show makes Piers Morgan look like Ernest Hemmingway.

http://www.youtube.com/watch?v=a3-f4tysKyo

GTA builders = BILD. — Garth

#76 The Man From Nantucket on 06.21.13 at 7:53 am

#30 Julia on 06.20.13 at 10:01 pm
…….http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13346343

Pros: You can claim to live in Rosedale.

Cons: It’s the part of Rosedale that’s right across the street from St. James Town.

Those fees are scary for a box in the sky.

#77 Ralph Cramdown on 06.21.13 at 8:06 am

#76 Buy? Curious? — “but who could play Bilbo Baggins? He’d have to be short, have lots of spare time to go on adventures […]”

I coulda sworn you were going to nominate Robert Reich.

#78 Retired Boomer - WI on 06.21.13 at 8:43 am

#74 Mr. Monday Night

OK, read both of those posts. Now I get it. I too, have a 10 year old Buick, and a TV that’s probably older than you are (1978). But, I watch very little TV, and my ride does not have to impress any body. In summer I also have a 4 yr old convertible that I enjoy. So WHAT?

If I had the desire for some new flat screen that also performs my shaving chores I could go out and buy one, but I never will, I’m too frugal.

So, I’ll live my boring life my way, answering to my maker someday, and he, or she will perform the ultimate weighing. In the mean time, enjoy the life you have wrought.

#79 jerry on 06.21.13 at 8:57 am

Projections for US economic growth and inflation has been reduced by the US Fed. Interest rates are proposed possibly to go up in 2014-2015.
US unemployment numbers remain high 7.7%- 7.6% and no where near the standard hoped for at 6.5%.

To me these are the real fundamentals that haven’t changed.

The Fed’ premature calender date remarks were irresponsible as they do not reflect reality of meeting fundamental goals.

If the Fed’ idea was to “jolt” everyone about the future of easy money thats fine. They did it. But I don’t see why good solid BOND picks should take such a hit and everyone should dump and run.

Investing or trading?

#80 Captain Critical on 06.21.13 at 9:03 am

Smaking Man: Dude you should change your moniker to “Drinking Man”. I don’t ever recall you talking about smoking – just drinking. BTW you’ve got some great insight mixed in with all the rest of the BS you ramble on about. Perhaps if you started smoking more and drinking less you could become a really profound expounder.

#81 Mike on 06.21.13 at 9:14 am

I used to have the same thoughts whenever markets turned down; I used to think it was a continuation of the financial crisis. After a while, I realized the crisis is over. The only way to learn the markets is to watch them every day for a few years. You learn a lot pretty quickly.

Many here have much to learn. — Garth

#82 Loopback on 06.21.13 at 9:15 am

five million sales
Source: National Association of Realtors . . . LOL

You have a better source for MLs transactions? — Garth

#83 Buy? Curious? on 06.21.13 at 9:21 am

Hey Garth! Thanks for the link.

GTA builders = BILD. — Garth

Did you notice that on the same day they report the horrible stats, they also hire a new PR guy? Yeah, that’s right! I am not pulling your leg. Check it out.

http://www.bildgta.ca/

His name is George Christopopudopalas-populdopolas (I may have mispelled his name) and you can see it on the press release.

You know what’s coming down stream, don’t you?

Ok, everybody, I’m going for a swim. Talk to you later.

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

#84 gladiator on 06.21.13 at 9:38 am

Did Bank of Canada raise rates? Nope.
We’re talking about two different things here – those who say that rates will stay low mean the rates set by central banks, and the only thing they were wrong about is what influences mortgage rates. The central bank rates do influence mortgage rates, of course, but there is another very important factor, called bond yields, which fluctuate with economic cycles and money flows into/out of the bond market.

So yes, I think that the self-lubricating analysts are right: central bank rates will stay low and seemingly for many years.
And yes, I think you are right too: mortgage rates will rise due to the bond market.

Almost correct: The BoC will raise rates in one year. — Garth

#85 Ralph Cramdown on 06.21.13 at 9:41 am

Stuff and nonsense!

If there weren’t people with an affinity for stuff, the ascetics would have nothing to contrast themselves with. Money and stuff are exchangeable (but the bid/ask can be pretty wide, depending on the stuff), so money is stuff, for all intents and purposes.

Let us contemplate the example of Leonard Cohen. He didn’t need stuff because he had inner peace (and millions in the bank). But when he found out his manager had rolled him, he checked out of the monastery and hit the road in jig time to earn more cash. Stuff wasn’t important to him when he had it. Didn’t know what he had ’till it was gone.

#86 TorontoBull on 06.21.13 at 9:42 am

“Source: National Association of Realtors . . . LOL

You have a better source for MLs transactions? — Garth”

zero hedge?:)

I love your stand-up material. — Garth

#87 Rob aka Captian and Mrs Slow on 06.21.13 at 9:59 am

@ Canadian Watchdog

That is a great way to loose money, everybody thinks there smarter than the market, take Manulife, crap stock in many regards idea is wait pick it when it hits support make a buck or two blah blah blah

Well it never did hit support or restance topped out at $16 a share. Trying to be smart I left out a 60% gain

Now I stick to mechanical trading, the rules say buy I buy, the rules say sell I sell

In other words like Garth I re-balance only once a year. Currently own dividend stocks that that is slowly changing as I move to ETFs

@Garth any chance you’ll change the commenting to threaded commenting like other blogs etc.

#88 John on 06.21.13 at 10:01 am

John #9

Don’t panic. Keep buying the dips, all the way down.

Amazing how many people cannot stomach a 5% decline. In 2011 the correction was 20%. But who remembers that? — Garth
___________________________

Hello – I didn’t say anything about not being able to stomach yesterday’s decline. In fact, I said I bought more yesterday.

My question was – what are you thoughts about buying inverse ETFs on down days???

That’s gambling. I don’t gamble. — Garth

#89 Ray Skunk on 06.21.13 at 10:03 am

Well… waddaya know? Euro markets up, premarket up, first 30 minutes trading up. Nothing to get excited about in the grand scheme of things, but certainly we’re not seeing the end of the world predicted by many yesterday.

Pantywaists indeed!

#90 Captain Critical on 06.21.13 at 10:12 am

26 Zach: Grow some balls son. I can tell you’re from the younger generation. Your blaming everyone else for your failure to research and make an informed decision. You also want it all “now”. Can’t wait! So yeah, go ahead and buy in at the top you knob. Happy Wife – happy life.

#91 Smoking Man on 06.21.13 at 10:13 am

#81 Captain Critical on 06.21.13 at 9:03 am

Smaking Man: Dude you should change your moniker to “Drinking Man”. I don’t ever recall you talking about smoking – just drinking. BTW you’ve got some great insight mixed in with all the rest of the BS you ramble on about. Perhaps if you started smoking more and drinking less you could become a really profound expounder

…………

See how we all jump to conclusions

Smoking Man = handsome, good looking, SMOKING SEXY

nothing to do with Tobacco or weed..

#92 Grantmi on 06.21.13 at 10:22 am

#89 Ray Skunk on 06.21.13 at 10:03 am

Well… waddaya know? Euro markets up, premarket up, first 30 minutes trading up. Nothing to get excited about in the grand scheme of things, but certainly we’re not seeing the end of the world predicted by many yesterday.

Euro is UP?? uhhhh?

http://www.bloomberg.com/

#93 Grantmi on 06.21.13 at 10:26 am

Holy crap Batman…. Lennar Homes

http://scharts.co/10DBZlS

So much for the US Housing market looking forward to correction to the upside.

That wasn’t Aunt Mary and Uncle Bob selling shares on LEN yesterday. That was MAJOR institutional selling!

Uncle Ben has spoken! (Clearing the deck chairs on the Titanic.)

#94 Soma on 06.21.13 at 10:26 am

Take this info with a pinch – not everything this “self-lubricating” (I like the way he writes – always in agony) – expert tells is correct.

Checked the http://www.ratesupermarket.ca/mortgages/
FIXED: 2.83%
Variable: 2.45%
for 5 years.

You want to borrow from a company you’ve never heard of that may be absorbed by the time renewal happens? Good luck with that. — Garth

#95 Daisy Mae on 06.21.13 at 10:31 am

#26 Zach: “Houses that were selling for 780K in the spring of 2011 are 900K now and it doesn’t look that their price will come down…”

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

There are still greater fools out there. And greedy sellers. But just because the sellers inflate the asking price doesn’t mean they’re going to get it. Be patient.

#96 Heather Nova on 06.21.13 at 10:38 am

#19 Dale from Calgary

What an inappropriate and disgusting comment. 100,000 Calgarians are facing evacuation, volunteers working through the night, a community pulling together in the face of disaster, and you have to indulge yourself in schadenfreude? Your reaction to people’s suffering is loathsome.

#97 Daisy Mae on 06.21.13 at 10:59 am

#68 FutureExpatriate: “Who gives a flying ef what your friends and coworkers think? They’re reading the same brainwashing crap you are.”

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

Very true. Styles/fads change for a reason — to keep us spending money we don’t got. Relax and enjoy what you have. What goes around, comes around….carpeting will come back into vogue.

#98 Vamanos Pest on 06.21.13 at 11:06 am

Late last year I called Garth out on his prediction interest rates would rise this year, and mentioned that I would hold him accountable in these predictions.

This comment is simply to accept my slice of humble pie.

#99 ronthecivil on 06.21.13 at 11:29 am

Almost correct: The BoC will raise rates in one year. — Garth

What motivation would they have if they do manage to reign in the rogue credit binging Canadian consumer without having to raise the rates?

Keep the low rates for themselves and they can devalue the dollar, stimulate exports, and inflate their way out of debt!

Do as I say, not as I do!

#100 Holy Crpa Where's The Tylenol on 06.21.13 at 11:39 am

#21 Humpty Dumpty on 06.20.13 at 9:30 pm
Humpty Dumpty Markets the Risk of Fed Volatility, Gross Says
“I doubt they can put Humpty Dumpty back together again,” Pacific Investment Management Co.’s founder Gross said

Ben’s having a senior moment, I think he requires Depends!

http://economictimes.indiatimes.com/news/international-business/ben-s-bernankes-policy-guidance-is-clear-as-mud/articleshow/20690848.cms

#101 Brian on 06.21.13 at 11:45 am

As the chart shows, it’s hard to ignore the fact that its been tough slogging for gold over the last year or so. As far as an investment strategy goes, however, I think it pays to take a slightly broader view of its performance by looking at just how gold has performed relative to most major asset classes since 2001.

My view is that the long term drivers are still bullish for gold and on a 10-year chart most major asset classes can be shown to have underperformed relative to the yellow metal. I show the performance of gold versus stocks, bonds, commodities, and real estate here:

http://www.thelonelytrade.com/go-gold-or-go-home/

Just so one can get a good idea that the picture is not so black-and white as the 1-year chart might suggest.

When you’re forced to use a 10-year chart to justifying owning something, you shouldn’t. — Garth

#102 Ralph Cramdown on 06.21.13 at 11:46 am

#98 Heather Nova

It’s never inappropriate to point out that people who build, buy or issue permits for dwellings on floodplains are morons. If there’s graphical images of the consequences to accompany, so much the better. It might save others from making the same mistake. But I bet it won’t save those of us on high ground from paying for it through emergency government recompense for the eminently foreseeable.

#103 T.O. Bubble Boy on 06.21.13 at 11:46 am

I guess if you’re selling a 17ft wide semi-detached house for $769k, you need to stretch all of the photos?

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13350667&PidKey=-733953472

#104 David Jensen on 06.21.13 at 11:48 am

Enjoy the rising rates Garth. China’s economy keeps printing worse numbers, worldwide debt continues to rise and the housing slowdown/drop takes a toll on Canada’s economy.

We’re turning Japanese Garth. Low rates for about 20 years now over there.

5 year for 3.49%. Probably near the peak for the next decade. You can still get 5 yr 2.94% from Dominion and others, and the 10 year for 3.69% from the Big banks should be a lesson.

Think about that. 5 year money for 3.49% and 10 year money for 3.69% from the same banks. What does that tell you about long term interest rates?

That you’re wrong. — Garth

#105 Smoking Man on 06.21.13 at 11:48 am

Stairway to heaven =Long USDCAD

ha ha just sick cha chingalingaling

Overnight rate will be cut, bank on bubble heads.

Every asset class selling again buying USD To stuf under mmattress

#106 Holy Crap Where's The Tylenol on 06.21.13 at 11:57 am

As the American economy continues to revitalize albeit at snails pace the long-term strategy would be to invest in industrials, tech stocks and perhaps financials. As people obtain employment factories expand and purchase industrial equipment that is required to produce said product. As factories acquire this new technology and machinery they have to expand thus the impetuous to look at construction materials with the caveat that this segment of the market is still dragging behind. Financial institutions will be dragged along upwards as factories expand in order to service their industrial customers new plant or expansion plant demands. Well that’s my take on it! Go Team America!

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

#107 bob on 06.21.13 at 12:19 pm

I have the innate ability to predict the peak metal prices because it’s exactly when I get the overwhelming urge to buy. It’s herd mentality which we humans cannot avoid but only learn to control. In a healthy herd the survival of the group is the result but humans are ruled by dysfunctional emotions like greed and fear so we compete and hoard to stay ahead of our fellow humans. We are easy to herd with fear/greed – a single shepherd can control the masses.

#108 blobby on 06.21.13 at 12:21 pm

I heard on the radio this morning that the bond market is taking a pounding.. And taking the canadian dollar down with it (or so the [email protected] station said).

I dont pretend to understand this stuff, i come here mainly to educate myself on it!

But :

a) Is this true?
b) why is it happening? (or the reasons you’ve been saying? Or has something else come into play?)
c) Am i right in thinking this will put even more pressure on higher rates?

#109 Old Man on 06.21.13 at 12:22 pm

Was Caesar just thrown under the bus by China? Not sure but seems like our Caesar should give up his world diplomacy, and find a new gig playing the piano somewhere. Russia and China just signed a 25 year contract, whereby, Russia will supply 365 million tons of oil worth $270 billion. We in Canada need a new Caesar who can lead with integrity.

#110 VICTORIA TEA PARTY on 06.21.13 at 12:24 pm

RATES ARISIN’…AND IT’S NOT GOOD!

Just because it’s dangerous for mortgage rates to be rising in Canada doesn’t mean it’s somehow OK for the same to be occurring US. Which it is.

Economically speaking, one must be careful to call the other’s pot black in that the US is doing better while Canada is definitely not.

What St. Garth of Unintended Consequences may wish to think upon are these two following snippets: one from Garth’s latest and the other from Zero Hedge of this date:

Garth wrote: “Cheap money…spawned speculation and risk-taking…some things will not quickly recover…Let’s remember why the cheap money’s ending. As the US economy continues to grind higher (!!) Washington doesn’t need to spend $85 billion a month buying bonds…Turning off the stimulus tap also means less inflation, which has just tanked gold and other commodities, like oil (hitting the TSX hard).”

Zero Hedge: “…a four year celebration (is over)…Now it is time for everyone to get ready to go home. The latest Fed (edict) was one hundred percent different than Bernanke’s Congressional testimony and to not understand what was said will cost..billions of dollars and…jobs.

Yes, the biggest of American corporations…borrowed money very cheaply…paid down debt…bought back their equity…Equities and bonds both rallied due to all of the liquidity. There is no other reason they rallied. None!

The money never made it to Main Street…lots of newly created money that had to go somewhere and so it did (go nowhere)…we (US) will now also get impacted by China and Europe…Liquidity has been the one and only god and the Fed has now told you that this god is going to close up shop.

It has been a great party. Enjoy the memories!”

WHAT THIS ALL MEANS…

Ten year Canadian and US bond rates are moving lock- step UP to the 2.5 per cent range. Mortgage rates are going up in the two countries, in the result. Sure those rates are trending back to so-called “normal”, but on the flip side, bond prices are falling big-time and the smaller equities markets are too, today at least.

The US housing market is just another low-interest rate-prodded bubble, like in so many other sectors. China is just a whole series of bubbles and Europe is done like dirt.

Wherein, therefore, lies the economic optimism, that Canada is (soon will be) somehow worse off than the US?

Are the big wheels of world finance, those idiots in Japan included, still “on top of their game?”

I think they’ve chucked it in; don’t know what tricks to do next.

Apparently some of the big investors in many world markets started cashing out of equities weeks ago and are now waiting for a severe (manipulated?) correction to glide by before they return to the markets.

Makes perfect sense to me, Garth. at least SOMEONE will be making some loot!

#111 Heather Nova on 06.21.13 at 12:40 pm

#104 Ralph Cramdown

It’s never inappropriate to point out the insensitivity of the self-righteous.

#112 Macho Man Randy Savage on 06.21.13 at 12:44 pm

Hey Blog dogs, I have a questions for you.

The wife wants to upgrade houses in the next few years. Currently we are doing alright with our mortgage being 70% of our gross income. She is eyeing a house that would make our mortgage 180% of our gross income. I think the jump might be a little too much, but I just want to get a feel for what is typically considered a reasonable sized mortgage…

Thanks in advance.

‘Macho’? Did she name you? — Garth

#113 Donald Trump on 06.21.13 at 12:50 pm

Check your Local Gov’ts web site and meeting schedules…

Every so often they ramp up the various fees they charge builders.

They usually draft reports comparing other cities and try to aim for some median….when in fact its simply a game of catch – up leap frog where they all take turns.

Take DCC’s. very simply to simply “justify” say another extra $1000(average) per condo unit.

Of course the cost is passed on to the consumer. Effectively the Local Gov’t is dipping into the cheap money and CMHC backing , a sneaky way to do an extra cash grab.

#114 Bargains everywhere on 06.21.13 at 12:58 pm

Question for Garth and/or the blog dogs:

If I buy a stock that is interlisted and there is a big currency move, would it make sense to sell it on the other exchange?

For example, if I bought shares of Royal Bank on the TSX when the Canadian dollar was at par with the US dollar and now the Canadian dollar has fallen, can I not sell those same shares on the US market and get a currency gain windfall? Is there anything that would prevent me from doing this? I could then turn around and transfer the money back to Canadian using Norbert’s gambit.

Traders and currency converters love talk like this. They make money. You don’t. — Garth

#115 Old Man on 06.21.13 at 1:03 pm

Today is Friday which can be busy so went out early at 11:00 AM, so here is my retail report. I went to 3 places to buy my weekend supplies, as today can be a make or break situation – nobody around. The first place they just brought out my order while walking in; the second place was the Polish store and deli with smiles as had cash for some rye bread and smoked ham slices; and then to M&M for a bag of fries, but noticed the sale on chicken strips had been extended, so bought a 3 lb. box for sandwiches. The point here is that Friday can be a very busy day with housewives shopping; nobody around in the least. :)

#116 Gerryantics on 06.21.13 at 1:32 pm

Cheap credit through money printing and low interest rates has been around for decades, cheap credit is the biggest bubble.

Over many years central banks have pumped the financial system full of cheap credit, it now engulfs everything. The biggest leverage is off balance sheet derivatives, $100’s trillions.

Paper, whether it is backing real estate, stocks, bonds, etc. are all at risk.

#117 Donald Trump on 06.21.13 at 1:39 pm

U.S. Housing Recovery Already Comes to an End ?

http://www.marketoracle.co.uk/Article40899.html

QUOTE:

Michael Lombardi writes: The housing market simply isn’t improving at the rate many in the mainstream media are telling us.

Home prices are still significantly lower than what they were during 2005 and 2006. On its own, there is no housing market recovery. All we are witnessing is the mere reflection of easy money provided by our central bank.

As I often write, to see a real recovery in the housing market, we need to see first-time home buyers active in the market. Unfortunately, they are not involved.

In April, first-time home buyers accounted for only 29% of all existing home purchases in the U.S. housing market. This was three percent lower than the previous month and 17% lower than April 2012, when first-time home buyers accounted for 35% of all home purchases. (Source: National Association of Realtors, May 22, 2013.)

According to a survey by Fannie Mae, last month, 40% of Americans said it’s a good time for them to sell their home. In April, the survey showed only 30% thought the same thing, and in the same period a year ago, this number stood at 16%. (Source: Realtor Magazine, June 11, 2013.) Hence, we are going to see more listings hit the housing market.

The inventory of homes for sale in the U.S. housing market increased four percent in April from the previous month nationally, but what’s troubling is that in a few areas, such as Stockton and Sacramento, California, new listings have surged 75% from a month earlier.

QUOTE:

Taking all this into consideration—first-time home buyers absent from the housing market, the rising number of homes on the market, mortgage rates climbing higher, and housing affordability squeezing—the news for the housing market is not good.

All of a sudden, the housing market that was propped up by institutional investors’ buying seems to be running out of juice.

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

Figures lie and liars figure

Been reading the same it’s-all-a-lie drivel for two years. Still the recovery happens. Trust reality. — Garth

#118 Ralph Cramdown on 06.21.13 at 1:45 pm

“My view is that the long term drivers are still bullish for gold”

Never mind the long term. Short term drivers are bullish too, right? Chinese inflation continues unabated, the Rupee has lost 6.66% against the USD in the last month, returns on bonds and cash are low, meaning owning gold has a low opportunity cost. People are fearful. The loons have crapflooded the internet and talk radio with talk of rehypothecation, bail-ins and general financial collapse, “paper” gold, shortages in the vaults, etc. The senior miners are late and over budget on all their projects, some of which have stopped production completely. The juniors can’t finance so much as a cup of coffee. The Fed’s printing so fast that we face a worldwide shortage of green ink.

And still gold falls. Into bear market territory. Check your assumptions, because the trade isn’t working. I check Jim Sinclair’s site every week or so just for snark. Today he’s posted a picture of an old guy with his dog, and the guy looks about sad enough to eat a gun. I don’t know if it’s Jim or not.

#119 AK on 06.21.13 at 2:01 pm

#116 Bargains everywhere on 06.21.13 at 12:58 pm
“Question for Garth and/or the blog dogs:

If I buy a stock that is interlisted and there is a big currency move, would it make sense to sell it on the other exchange?

For example, if I bought shares of Royal Bank on the TSX when the Canadian dollar was at par with the US dollar and now the Canadian dollar has fallen, can I not sell those same shares on the US market and get a currency gain windfall? Is there anything that would prevent me from doing this? I could then turn around and transfer the money back to Canadian using Norbert’s gambit.”
——————————————————————-
If you are with TDW, you can ask them to Journal your RY shares over to you U.S. Dollar account.

#120 Calgary Rip off on 06.21.13 at 2:08 pm

Garth you provide much good information to your readers. What is needed additionally is learning negotiating skills.

Asia is a superpower. What would be beneficial is learning to think Asian. This is not racist. Each Asian culture is different and yet there is underlying adaptability. Asians are not smarter than other ethnicities but due to severe competition and sheer number of people in China, the best rise to the top, do or die if you will. As one Chinese player put it, “Come to China and you will know real stress. To the average Chinese, your life is like Heaven.” Or another Chinese player, “You have two eyes, two arms, brain, two legs, what is your excuse?”

So I suggest the study of wei-chi to those humble enough to admit they must master negotiating. Instruction: http://senseis.xmp.net/ Then, problems, some as old as 1347 AD from mainland China: http://tsumego.tasuki.org/ And to play free correspondence: http://www.dragongoserver.net I believe that wei-chi was instrumental in teaching me timing skills needed to buy my first(and hopefully last) mortgage in Calgary which remains above water far away from the rivers. I hope for safety and sanity of those individuals suffering from the flood.

#121 broadway skytrain on 06.21.13 at 2:10 pm

For example, if I bought shares of Royal Bank on the TSX when the Canadian dollar was at par with the US dollar and now the Canadian dollar has fallen, can I not sell those same shares on the US market and get a currency gain windfall?
—————————————
mkt price reflects currency changes – yes, you can sell it in usa, but you will get 97% of tse price if the dollar is at 0.97.

no deals here

……..on another topic, calgary prices must be dropping fast as there are many homes ‘underwater’ right now

#122 broadway skytrain on 06.21.13 at 2:12 pm

another example – right now the same share of RIM is;
14.38 TSE
13.75 NYSE

#123 jess on 06.21.13 at 2:18 pm

raiding the ratings

..”major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, documents that for the most part have never been seen by the general public.

incriminating emails

..”Lord help our fucking scam . . . this has to be the stupidest place I have worked at,” writes one Standard & Poor’s executive. “As you know, I had difficulties explaining ‘HOW’ we got to those numbers since there is no science behind it,” confesses a high-ranking S&P analyst. “If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,” complains another senior S&P man. “Let’s hope we are all wealthy and retired by the time this house of card[s] falters,” ….

Read more: http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619#ixzz2WsMx5NJm

Read more: http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619#ixzz2WsMx5NJm

#124 zeeman1 on 06.21.13 at 2:24 pm

Garth, Dogs et al.

Forget real estate, forget bonds, forget metal heads, forget Smoking Man.

It’s Friday folks, check out this awesomeness:

http://www.thestar.com/news/world/2013/06/21/guinea_pig_armour_draws_25000_ebay_bid.html

#125 Brian on 06.21.13 at 2:31 pm

#120Ralph Cramdown on 06.21.13 at 1:45 pm
“Never mind the long term. Short term drivers are bullish too, right?

It isn’t necessary to get bogged down in conspiracy theories or speculation to try and explain why gold is in multi-year downtrend. One only needs to have a good understanding as to what has caused stocks to be in a secular bear market since 2001 and why gold has historically moved counter-cyclical to these secular declines in equities.

Gold has suffered based on the perception that money-pumping measures by Central Banks has worked and resulted in a self-sustained recovery. In such a scenario money printing is seen as transient and temporary, but one should note that it was also seen as transient and temporary following the dot-com bust, and that didn’t alter gold’s long term direction then – and it won’t now.

Long term bull markets and bear markets don’t move in straight lines after all…

There is no reason to hold gold. — Garth

#126 Devore on 06.21.13 at 2:32 pm

Government fees and charges continue to increase across the region, making it increasingly difficult for our industry.

No they don’t. Fees and charges are completely irrelevant to housing affordability. Higher fees mean prices will simply lower. As do higher interest rates. Affordability will remain the same.

At the end of the day, people can only pay as much as they can pay for a house. A tax (or a subsidy for that matter) has no bearing on affordability, prices will just adjust.

#127 Gerryantics on 06.21.13 at 2:35 pm

CCPA and CBA are at it again. CBA says the $114 billion given to the Canadian banks was not a bail out, but liquidity support.

Funny thing is, any other company that doesn’t have adequate liquidity and cannot function or pay debts is declared insolvent, and, bankruptcy is filed.

#128 Post Haste on 06.21.13 at 2:35 pm

Just a thought – in reality – the world has gotten itself into a debt mess – very few places in this world where debt hasn’t become a stranglehold.

So, a few very powerful people stoke the cheap credit – millions if not billions of people around the world take on this added burden to gain in the materialist sense – we buy because the impulse which we have been subject to via tv and radio makes us feel that without it – we are somehow less of a human being..we value our self worth by the “things” we have (but in reality don’t even own outright). How was that thought process conditioned to begin with – mass media baby!!

So, we took the step towards indebtness, the world awash with debt and now those very well off financial heads are about to collect – forcing countries to hand over it’s wealth to stay afloat. No one can escape the wrath that will be set upon us – Free Market – if you believe that hype – then you too have been brainwashed.

Simple lifestyle has it’s rewards – but everyone pays – everyone!

#129 Gerryantics on 06.21.13 at 2:43 pm

CBA says due to global banking integration it wasn’t the fault of Canadian banks that they needed liquidity. Of course there is no mention of the obvious that Canadian banks require liquidity or loans from global institutions to conduct their business.

So Canadian big banks are systemic, globally systemic, and at the mercy of global financial institutions.

Makes perfect sense to have a bail-in should any future global institutions have problems with liquidity and hence so do Canadian banks.

And now the cost of liquidity, interest rates on debt, is rising.

#130 jess on 06.21.13 at 2:44 pm

cheating is competition?

Zhongxiang in Hubei province “gaokao” exams

Last year, the province’s Education department discovered 99 identical papers in one subject. Forty five examiners were “harshly criticised” for allowing cheats to prosper.

This year the invigilators wasted no time in using metal detectors to relieve students of their mobile phones and secret transmitters, some of them designed to look like pencil erasers. …”We want fairness. There is no fairness if you do not let us cheat.” According to the protesters (parents) , cheating is endemic in China, so being forced to sit the exams without help put their children at a disadvantage…

http://www.telegraph.co.uk/news/worldnews/asia/china/10132391/Riot-after-Chinese-teachers-try-to-stop-pupils-cheating.html

#131 Peter on 06.21.13 at 2:44 pm

Hi Garth,

For those of you renting and waiting, the only thing that will lower the price in RE significantly is a major rise in interest rates , I am paying 3.79 on a rental and will be thrilled to accept the same for another 5 (3.29 sounds better) . I have read on here that too many people they have a think they have a “right” to home ownership, I am not one of them and I worked really hard for mine (paying 9% in the beginning). What I think renters are missing is they will not have a “right” to affordable rents either . Unless your are planning to rent for ever , which is fine , and maybe a good choice. Prices coming down with higher rates (which is unlikely, Garth, 3.29 may be higher than 2.89 but still cheap, even at 4.5, which is a LONG way away). The difference between affordability in renting and owning will shrink in 2 ways, house prices melting slowly, which it may (not crashing , Garth , a housing correction is as normal with RE and it is with Stocks , you seem to describe the 2 differently), AND rents increasing faster than house prices will melt , which I think will happen faster than the melt. I own RE , I own stock , and I rent lots of things , to each his/her own , work hard and enjoy the fruits of your labor and good luck. RE was and is the best investment I ever made , I am hoping is drops a bit , then holds , just so people stop whining about it , but its not for the weak.

#132 Tyrone Asauras on 06.21.13 at 2:59 pm

#34Chickenlittle on 06.20.13 at 10:12 pm
What a joke the banks are!
…….
It’s easier to get a mortgage than it is to get a small loan that I will have paid off in no time.

Get the mortgage, and then sit tight for a few minutes. You will probably be bombarded with no less than five offers of secured and unsecured L.O.C.s within the first month.

#133 Steven on 06.21.13 at 2:59 pm

I concurr with Garth is not God. There is bias infavor of paper that is not gold or silver. How ever we have gold and silver prices that are not decided by asking the question what do you want for your real ounces? Prices are decided by trading paper between insiders who are biased against gold and silver being money or even an expensive commodity just like Garth. Today at silver doctors they were kicking around the idea of commodity traders dropping the paper price of silver to zero by the end of the month. No matter how you cut it that is manipulation and since it is destroying market value of physical holdings if infact such holdings exist in whole or in part I would say a hate crime is being committed against investors.
I would say buy the dips and take delivery untill you can’t. The whole financial and political system is as rotten as the bottom of a septic tank and you might as well have the ounces, just sit tight and wait for the whole rotten system to crash and burn. When the fire burns out the only real wealth will be tangible and portable.

Hold a useless asset, and blame others for the price. Nice strategy. — Garth

#134 Nemesis on 06.21.13 at 3:08 pm

DELETED

#135 Al on 06.21.13 at 3:31 pm

What does a highly leveraged Apartment REIT like Interrent (IIP.un) do to pay off the investors who are selling it’s shares big time?
Answer sell some buildings to cash buyers fast. Only the good buildings will sell fast and that leaves the trash for the REIT.

#136 drydock on 06.21.13 at 3:38 pm

http://www.google.ca/url?sa=t&rct=j&q=hubbert's%20peak&source=web&cd=1&cad=rja&sqi=2&ved=0CCoQFjAA&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FHubbert_peak_theory&ei=fKfEUcWbC5LI4APl3YCgBA&usg=AFQjCNFEfZjM9DiD1qc9lN1E6YZ_MMUHMw

All is vanity.

#137 frank le skank on 06.21.13 at 3:44 pm

#133 Peter on 06.21.13 at 2:44 pm
Wow, everything is pretty straight forward for you and you seem to have it all figured out. There’s only 1 thing that could ever lower house prices….?!?!? riiiiiiiiiiiiiiiiiight!! I grew up in hicktown Nova-Scotia and you remind me of the know-nothing-know-it-all who never left their remote town but seems to know everything about the world around them. It always an self-serving, over-simplistic and nearsighted point of view. Thanks for the flashback!

#138 Holy Crap Where's The Tylenol on 06.21.13 at 3:51 pm

Bangkok number one destination, eww really? Where have we gone wrong London, Paris, Singapore and New York yes but Bangkok? Oops I almost forgot the sex trade travel destination capitol of the world, ah yes no wonder its number one! Toronto came in at number six. Oh man we have a sex trade here already as we are all screwed economically!

http://www.thestar.com/life/travel/2013/06/17/arthur_frommer_bangkok_surpasses_london_as_worlds_top_destination.html

#139 Moscovite on 06.21.13 at 4:00 pm

“The study by Alliance De Luxe conducted every year showed that a resident of Moscow with an average salary of 41,000 rubles ($1,300, monthly) would have to save the entire salary for 13.5 years to buy an apartment.”

Still think Toronto housing is overpriced relative to salaries? We are talking about a one bedroom, 400-500 square meter apartment here, not even a townhouse.

http://english.pravda.ru/business/companies/19-07-2012/121681-moscow_apartment-0/

#140 Loopback on 06.21.13 at 4:05 pm

ETF’s not so liquid yesterday over at Citigroup or State Street when they stopped cash redemptions.

No issues in Canada. — Garth

#141 renterswillpaywhatitellthemtopay on 06.21.13 at 4:19 pm

133 – What I think renters are missing is they will not have a “right” to affordable rents either .

I will never pay more than X% of my wage in rent. If my rent starts climbing I will instantly move to someplace more affordable at absolutely no loss.

Maybe I’ll skip out on the last month’s rent and turn the landlord’s money grab into a large net savings for me.

Maybe I’ll throw a giant spite party the night before I leave and not clean up too. How does that work into your grand scheme?

Renting = Freedom

PS – My rent in Fairview, Vancouver, went up each year slightly while prices were going up. Now that the market is soft the landlord offered us a reduction in rent to keep us there.

Just another perspective, good luck.

#142 Ralph Cramdown on 06.21.13 at 4:38 pm

That’s what I want to do, too! Buy real estate when rates are 9%, holding it as rates fall to 3%, and telling everyone it was the best investment I ever made.

#143 Sotiri on 06.21.13 at 4:43 pm

#133 Peter

Peter ask our friends south of the border – unless you too think is different here and economic fundamentals does not apply to us because we are Canadians.

#144 Squatter on 06.21.13 at 4:49 pm

#135 Al

What does a highly leveraged Apartment REIT like Interrent (IIP.un) do to pay off the investors who are selling it’s shares big time?
Answer sell some buildings to cash buyers fast. Only the good buildings will sell fast and that leaves the trash for the REIT.
******************************************
They don’t have to sell any buildings. The REIT is not the one who sells, it is investors like you and me who sell…

#145 Network Admin on 06.21.13 at 4:51 pm

Re #145
That’s what I want to do, too! Buy real estate when rates are 9%, holding it as rates fall to 3%, and telling everyone it was the best investment I ever made.

Maybe you can try buying when rates are 3%, holding is as rates fall to 0.5%, and telling everyone it was the best investment you ever made :)

#146 Old Man on 06.21.13 at 5:10 pm

I looked at the picture that Mr. Turner put up, as have a problem with this all, as my middle name is cheap and am broke most of my life. Now putting that all aside I shop in the dollar store, as hoop bargains there, and go to the bulk food store for bargains in my sordid life to save money, but have never found a wife in life, as could never find a woman that wants to save money.

#147 raider on 06.21.13 at 5:49 pm

How could I have missed this last X-mas :D. Garth, should probably sign a record deal too…

http://www.youtube.com/watch?v=7uKnd6IEiO0

#148 EIT on 06.21.13 at 6:34 pm

At least gold had a great run, several thousand years. But we solved that!

#149 FutureExpatriate on 06.21.13 at 6:40 pm

I FINALLY figured where all the monetary gloom and doom paranoia is coming from, and more importantly, why.

Conservatives. Because they ARE dying and they know it; in every way, shape, and form. Slavish to the 1% and pandering to racists and xenophobes and a magnet for bigots and the self-righteous of all kinds, at least in the US the python is eating itself alive, starting with its tail, and will be getting to all that fantastic hunk of digesting flesh in its middle, the base, presently.

And when it’s over, and they’re all gone? They’ll only have themselves to blame, because they blamed everyone else the entire “demographic death spiral” down, and never once listened to the more moderate voices that made any bit of real sense.

Good riddance to bad poison, and wait until that python hits all the goldbugs bolus. That might just be a big enough explosion that the entire snake might go to smithereens right there and never experience the exquisite surprise of swallowing its own neck from the bottom up.

Balanced portfolio. Trust in government(s). ECONOMIC conservatism and contrarianism, not the self-serving panic and outright sabotage that passes for such today. That’s the way to inner peace and prosperity.

#150 Mr Buyer on 06.21.13 at 6:44 pm

All 3 of my kids have been vaccinated for multiple diseases with no complications. Multiple studies have shown no causative link between Autism and vaccines or preservatives found in vaccines.Without a doubt the molecular mechanisms of many conditions and treatments for that matter need to be fully fleshed out but my remedial understanding of science leads me to fully support vaccinating myself and my children in the mean time.

#151 Devore on 06.21.13 at 6:56 pm

#137 Al

Do you even know how the stock market works? At a basic level? Maybe you should educate yourself before you speak with such authority chastising others.

#152 Daisy Mae on 06.21.13 at 7:44 pm

#104 Ralph Cramdown: “#98 Heather Nova It’s never inappropriate to point out that people who build, buy or issue permits for dwellings on floodplains are morons. If there’s graphical images of the consequences to accompany, so much the better. It might save others from making the same mistake. But I bet it won’t save those of us on high ground from paying for it through emergency government recompense for the eminently foreseeable.”

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

I agree. The post was factual. And it needed to be. #19 Dale from Calgary was absolutely correct.

#153 Nemesis on 06.21.13 at 7:50 pm

For those who are wondering, it was a salacious witticism at the expense of Michael Douglas… injudiciously posted prior to our Host’s WaterShed/CocktailHour easing of BroadcastStandards.

I still think it was funny, though.

#154 No Longer Innocent on 06.21.13 at 8:03 pm

Province of Ontario just came out with the 2014 rental rates… lowest in ages. 0.8%. Enjoying my new lease and it’s rent control clause.

What are the chances that hydro and fuel costs are going to increase by so little next year? hmm Happy Renter!

#155 Ret on 06.21.13 at 8:11 pm

Re #111

Russia and China just signed a 25 year contract, whereby, Russia will supply 365 million tons of oil worth $270 billion.

Nothing like seeing two scumbag countries trying to rip each other off for $270B of oil. Business with countries that have no rule of law is never a good idea. Best that Canada stays clear of any contracts with either of them.

Re #132

”We want fairness. There is no fairness if you do not let us cheat.”

No wonder that Canadian universities are accepting thousands of foreign students to fill up those empty lecture halls?

If Canadian kids want those spots, they’ll simply have to get with the program and cheat harder!

#156 Tony on 06.21.13 at 8:54 pm

Re: #100 Vamanos Pest on 06.21.13 at 11:06 am

This isn’t the end of 2013 yet. Rates will plunge in Canada and in America. Don’t believe all the B.S. you read in the newspapers and hearsay. We all know America is toast and has been on a downhill slide since 2007. The U.S. dollar will plunge as sucker money is flowing into it right now. These are the type of people who lose all their money because they can’t think but it happens over and over again.

#157 Unpoovio on 06.21.13 at 11:40 pm

#151 EIT on 06.21.13 at 6:34 pm

At least gold had a great run, several thousand years. But we solved that!
____________________________________

I’m sure if all the serfs and peasants in the past 1,000 years could invest in income-producing entities at a flick of their finger, instead of a hope and a prayer yellow metal that was very abundant in some societies and scarce in others, they would toss the yellow barbaric relic out in an instant.

#158 Cici on 06.22.13 at 12:09 am

I have to say, I love cottages. My ex’s family had a cottage, and I loved it and cottage life more than him.

We went up there every weekend with his family (aunt, uncles, cousins), and even when we weren’t getting along, we were having a great time. BBQ pit, pure lake and clean and private lake to swim in. Going back to the city was always such a drag.

Emotional my arse. I’d rather have cottage than a house.