Divine guidance

advice2

In preparation for my shocking new blog posts next week, let’s get some of this damn mail off my desk…

Hi Garth: First off, I’d like to thank you for sharing your insight and knowledge with your fellow Canadians.  The main reason for this email is because I’d like help in finding an adviser to put my mortgage inside my RRSP.  Additionally, I’m now a bit skeptical about the security of my money considering two recent developments.  First is CRA stating that should the government fail it will seize private and public pensions.  Second, on page 145 of the 2013 Canadian Budget it speaks of a Cyprus styled “bail-in” policy should the banks fail.  I was wondering if you have any literature in response to these developments or if you still believe that an RRSP is a safe investment. – Robert

Bobby, you need help. And not with the RRSP thing, but rather with your information. Dude. Stop reading those idiot doomer web sites. They’re worse than porn. Or HGTV. The damage to your long-term health is incalculable. The CRA has said nothing about the government failing or pensions being seized. That’s too dumb for further comment. As for the bail-in, it was discussed at length here months ago, and there’s zero to it. First, no big bank will fail. Second, even if one did, no bank account will be seized. It’s an urban myth created by the gold-humpers.

As for the RSP mortgage, this is a bad idea when home loans are still 3% and you can earn 7% or better on a balanced portfolio. The juice just isn’t there to go through the considerable cost of setting one of these things up. Ask me again in 2015.

Here’s the situation – the missus and I just ignored your advice and bought our second house. Some background: she’s a college instructor and I work in the arts. We’re mid-30’s, have a beautiful baby, and just sold our Toronto house that went for crazy money in a bacchic orgy of bidding ($800,000). Fearing the Toronto market we bought a gorgeous spread that we really love 2 hours outside of the Big Smoke in a rather wealthy semi-rural enclave ($420,000).

Here’s the rub: if I sink EVERYTHING into the house, we’d still owe 20,000 to buy it outright and would still need about 60,000 in essential renovations. We are completely debt-free with almost 400,000 in the bank (pre-house purchase). But my work is up and down – I pull in anywhere from 50,000 to 200,000 (or more) a year with no idea where I’ll land in that range – so I want a bit of a cushion as a soon-to-be sole breadwinner… let’s say 50K.

My mortgage broker is pushing both a mortgage and a HELOC on me “just in case”. When he said max-out because “money’s cheap” I think I wanted to punch him in the neck. I hate HATE HATE debt. So what do I do? Do I diversify? And as a neophyte – diversify in what? REIT’s? Do I plow it all into the house? So many questions. So few answers. I’m in the arts, dammit! Seriously Garth, this keeps me up at nights. This and global warming. And maybe clowns. But I need advice because I’m too confused to act. You’ve scared the hell out of me! – Francis

Actually, you followed my advice quite nicely. You sold at the top of the market. You took obscene advantage of a greater fool. You downsized. All good, my boy. Now don’t screw it up.

So here’s the plan: First, make nice with the mortgage guy and get him working on a secured line of credit. Tell him you expect it at prime. Now, plow all of your cash into closing the new house, avoiding a mortgage of any kind. Don’t hold back $50,000 for what-if-it-rains money, since that’s a complete waste of capital (and what LOCs are for).

After you close the deal, cue the mortgage guy and borrow back $300,000 on a HELOC (at prime). Set aside fifty for renos, and put the rest into the hands of a smart fee-based advisor who will build a conservative, balanced, diversified portfolio you can be confident in. Now you own your home with no amortized, costly mortgage. You have a liquid portfolio. You’ve diversified your net worth. And you have a 100% tax-deductible home loan – which can be paid off at any time (if need be).

Being artsy, Francis, does not need to mean failure.

I’ve been reading your blog for months now, and although I agree with your reading of the Canadian economy in general and real estate market in particular, thus far I had decided to keep my 3 bedroom Calgary townhouse, because even if it went under water for a few years, the monthly payment is still slightly lower than renting the same property on this nice suburb.  My wife and rented another townhouse in Sunnyside (the hipster neighborhood that is a 20 min walk to everything cool in the city, and also to our offices), and rented out our own townhouse for the same amount that we pay for mortgage, taxes and condo fees.  This was in May.  A few weeks after, we were being evacuated and had to spend almost two months away while our landlord re-built the Sunnyside Townhouse.  Now, after watching the surge of countless new Townhouse projects in the South of Calgary, all similar to ours, I am seriously thinking of listing my property, even thought I will just break even.
1. Since my own Townhouse is technically not my main residence anymore, do I pay income tax on the money I get for it?
2. I paid CMHC insurance on the $243k that I got from the bank in 2009.  Since I am going debtless now, do I get any of that CMHC premium money back?

What you need to know: (1) The rent money you’ve been getting for the townhouse is taxable, and must be added to your earned income, which means it is Hoovered at your marginal rate. But you can deduct all expenses from this, which sounds like a wash. (2) When you sell the place, any capital gains earned to the time you moved out are tax-free, but gains in value since then are taxable. Hope you got an appraisal or valuation done. (3) Get CMHC money back? Surely you jest. (4) Stay renting. This is not the time to buy in Cowtown.

My question/comment is quick. First you have proven your case about real estate over these few years and are now vindicated. Enough said. Please focus on saving/investing more. On that note I am a fool who has sat on the sidelines in cash the last two years subsequently missing out on a boon for returns. Looking back at a year of returns for individual large cap US stocks reveals big returns. My question is this, how can I confidently jump in now? Isn’t the likely scenario going forward modest or negative returns? In other words did I miss the boat entirely? Do I wait for a pullback and if so at what approximate level? Help because I and likely others can’t afford to lose any more.

Despite the crap you read in comment section below, the US economy continues to revive, grow and expand (check out the latest GDP stat, housing sales, corporate earnings, deficit dump or job creation scorecard). Markets have surged because of that, plus accommodative monetary policy. And while stimulus will start to be tapered away next month, the economic growth will continue. Ditto for strong markets over the long term.

There may well be another dip coming – like the 8% one last year, the 20% drop in 2011 or the 6% decline two months ago. Did you buy those? Of course not. Humans are programmed to fear falls, not take advantage of them – which is why most investors fail. So maybe you should get somebody to do this for you.

In any case, buy equities to meet long-term goals, not short ones. Don’t buy individual stocks unless you have seven figures to invest. Diversify broadly to grab growth with less volatility. ETFs are the best choice there. And don’t overdo it. US markets should be maybe a third of the growth portion of a portfolio that contains 40% fixed income. The best news? REITs and preferreds are still on sale. Low price, fat yield.

Start there.

146 comments ↓

#1 TO and GTA Sales and Stats 2013-08-30 on 08.30.13 at 7:48 pm

TO and GTA Stats and Sales 2013/08/30
GTACondos: http://bit.ly/1a6yAQP
905SFH: http://bit.ly/1a6yB7l
416SFH:http://bit.ly/1a6yDME

#2 LazyJason on 08.30.13 at 8:05 pm

Garth,

Are you aware of this site?

http://greaterfoolvancouver.blogspot.ca

I know imitation is the sincerest form of flattery, but in this case it just looks cheap.

Happy long weekend!

I have nothing to do with that pathetic blog. — Garth

#3 Donald Trump on 08.30.13 at 8:12 pm

Close…but no cigar..

…..but then again, I don’t smoke.

#4 Smoking Man on 08.30.13 at 8:16 pm

I am the grtst SM out there.

I dont’ care if my posts have anything to do with the sabjekt of the day – it is about my thinkins.

You are here to here me for I know everything. I invented encryption, my son is a door to door seller, education stinks and all educated people are useless obedients.

I drink and do whatever I want – you are all stupid so you need to listen to me.

#5 George on 08.30.13 at 8:16 pm

Check out the top line in both of the following data tables from the Bank of Canada.

Latest household credit numbers in Canada to the end of July 2013

http://credit.bankofcanada.ca/householdcredit

Latest business credit numbers in Canada to the end of July 2013

http://credit.bankofcanada.ca/businesscredit

#6 Divine guidance — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 08.30.13 at 8:21 pm

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

#7 Nemesis on 08.30.13 at 8:25 pm

#148/”Lesssons”

“Our ancestors fought for freedom against those who would remove it. This is free. Deal with it.” — Garth

Actually, historiographically speaking, it would be Truthier to say that some people’s Ancestors fought for Freedom… While others were busy employing numerical, technological and organizational advantages to help themselves to OtherPeople’s RealEstate…

http://en.wikipedia.org/wiki/Terra_nullius#Canada

#8 -=jwk=- on 08.30.13 at 8:45 pm

just passing through and like to see my name in lights. Wife had a panic attack last week “they’ll never go down” but she had her …ahem…unhappy time. Housing really is hormonal.

#9 retired WI Boomer on 08.30.13 at 8:56 pm

Garth-

Good advice as usual. Wish you had a US outlet, you make the same wise sentiments as the best of the US based investment guys I talked with. Unfortunately, I had to interview over a dozen before I felt comfortable with the one I selected. He is doing me a very good service.

Pays to shop around in advisors, as with anything else.

Everyone, enjoy the long weekend! The problems will still be there to be solved next week.

#10 Industrial Guy on 08.30.13 at 8:59 pm

He’s got it all wrong.
It’s the face eating aliens who will steal you pension and buy Goldline coins with it.
It must be true, eh ……. Glenn Beck said so

#11 Steve Thompson on 08.30.13 at 9:06 pm

Here is a look at how the spread in real estate prices between Canada and the United States has grown since 2007:

http://viableopposition.blogspot.ca/2013/06/the-canada-united-states-house-price.html

Considering that prices were in lock-step for many years, the current spread of 62 percent is of concern.

#12 Marginal on 08.30.13 at 9:07 pm

#3 Donald Trump on 08.30.13 at 8:12 pm

Oh well…..sometimes no cigar is just no cigar ;)

#13 robburton on 08.30.13 at 9:13 pm

any anal retentive,except turner

#14 Nemesis on 08.30.13 at 9:19 pm

A FridayNight, DanceMix, HistoryLesson… [WarPaintOptional – either way, best enjoyed HD/MaxVol]….

YothuYindi’s “Treaty”

http://youtu.be/2uszdyMaC2c

#15 Jim on 08.30.13 at 9:22 pm

I want to know how that fellow makes 200k in the arts. That’s the sort of figure reserved for useless higher ups in places like Art Galleries and Royal Museums, but his figure is varying from year to year.

#16 Marginal on 08.30.13 at 9:22 pm

#7 -=jwk=- on 08.30.13 at 8:45 pm

Ooh ooh….maybe wifey needs new hubbie to fix her…ahem…hormones.

Just saying. If your partner’s goals aren’t aligned with your own, then true love says you should set them free…or maybe I just read it on a coffee mug somewhere.

Bottomline, sure hope you are comfortable with sharing everything you post with your partner. If not, you’ll only lose the house down the road when you divorce.

#17 Smoking Man on 08.30.13 at 9:36 pm

Astonishing

People sending in email, what should I do, buy this, sell that, bla bla bla. all looking for a free bee.

People!!!!!!

Al Gore invented the internet years ago. We have Google, yahoo.

Every bit of info you can think of is out there.

You can learn GEO-Politics The Machine….(her comes another label my way)

Investing, Cooking, Trading. Everything.

I’m sure the majority of the questions being sent in are from University Grads. They need an authority figure to tell them what to do.

The ability to think critically and be decisive is not a characteristic the school system rewards.

Memorize Regurgitation and Obedience gets you a long way.

With record amounts of grads, Financial advisory companies should be a good growing business for years to come.

#18 Smoking Man on 08.30.13 at 10:04 pm

Divine guidance

Just got it……LMAO

Nice one god

#19 Marginal on 08.30.13 at 10:13 pm

#15 Smoking Man on 08.30.13 at 9:36 pm

Tim Berners-Lee (physics degree from Oxford -university not pub) father of the World Wide Web, gave it away for free.

And just think, our own dear host (masters in literature) now giving excellent financial advice to someone in the arts field (most have MFAs now in case they have to teach).

…..and then there are artsies who became accountants. I guess there are no neat boxes or rules. Ok, better stop now before I agree with you ;)

#20 Catalyst on 08.30.13 at 10:14 pm

“Despite the crap you read in comment section below, the US economy continues to revive, grow and expand (check out the latest GDP stat, housing sales, corporate earnings, deficit dump or job creation scorecard).”

—-
Oh Garth, you should stick to real estate. Just as now is one of the worst times to be jumping into Canadian RE in most markets, it is an equally bad time to be in US equities.

GDP stats: most useless stat ever produced. The only reason it is has been positive is because of the blowing asset bubbles in housing (can) and equity markets (US)

Housing sales: As you’ve noted recently, 70% of condos in recent years were bought by investors. It is the same in the USA right now. With 50million americans and growing on food stamps you think everyone is rushing out to buy houses?

Corporate earnings: Agree here, corporations are better this year than last year at gouging consumers

Deficit dump: don’t know what your referring to there

Job Creation: LOL.. http://money.cnn.com/2013/08/29/news/fast-food-strikes/index.html

You are right about one thing, those 20hr mcjobs are booming, if that’s the new definition of recovery then I yes, we are booming baby!

If your emailing readers are perusing the peanut gallery – stay mortgage free, don’t invest via heloc. Save and wait until you see an opportunity that makes sense to you and not one of the coolaid drinking financial advisors. Even one as objective as Garth. Oh and stay away from the RE agents too.

#21 Donald Trump on 08.30.13 at 10:20 pm

I wouldn’t worry about this women’s movement, feminism , house horniness and equality thingy.

It’s an ancient rumour of which no evidence shows will come to fruition.

No one can be incompetent enough to let them influence important decisions.
(unless Maple Leaf fan)

#22 Marginal on 08.30.13 at 10:39 pm

#14 Jim on 08.30.13 at 9:22 pm

Contract…..film/media?

Are all gallery/museum higher ups useless? Anymore than business higher ups? Ironic that the latter are very happy to fund the former. Funny how that works.

#23 Squidly77 on 08.30.13 at 10:44 pm

“Despite the crap you read in the comment section below”

Fact is, there are so many people commenting on your blog whose sole purpose is to discredit it, that many sane people that read your extremely informative and helpful posts just ignore the comment section. Sad really.

Oh we’ll, it is what it is.

#24 FATHER on 08.30.13 at 10:45 pm

shocking new blog posts? Now you got me thrilled

#25 jd on 08.30.13 at 10:52 pm

The guy in Calgary could look into making an election under subsection 45(2) of the Income Tax Act to have his rental townhouse considered his primary residence for up to 4 years after renting it out. http://www.cra-arc.gc.ca/E/pub/tg/t4036/t4036-e.html#P1734_97806

But he had no gains, so why bother? — Garth

#26 Squidly77 on 08.30.13 at 10:52 pm

Your better off having 10 readable comments, then 160 comments from social misfits trying to be somebody on this site that you very obviously care about.

You spend considerable time here sir, for no payment other than the fact that you care about Canadian families no matter of their country of origin. Cheers.

#27 AACI Home-Dog on 08.30.13 at 11:45 pm

Great post again tonight, Garth.
Idea for a future post…?
let’s say I know a boomer who has 7 digits & more in equities for RRSP’s, TFSA’s etc….a post regarding their investment strategy may be a interesting topic…
…love this place…
peace

#28 Skook on 08.30.13 at 11:51 pm

Garth,

It looks likes Ross Kay’s prediction regarding May 19th being the day the market died could be true…

I just posted these Sunshine Coast, BC stats at VCI:

http://vancouvercondo.info/2013/08/fffa-debt-money-numbers-investing-fail.html#comment-213474

Here’s the link to Garth’s May post where he mentions GTA Realtor Ross Kay’s prediction…

May 29, 2013, “The Day it Died” : http://www.greaterfool.ca/2013/05/29/a-downward-spiral/

#29 Nemesis on 08.30.13 at 11:57 pm

@Marginal/#11…

Thought you were a Jungian!

MyBad.

#30 Skook on 08.31.13 at 12:02 am

Just to show you how bad the situation is on the Sunshine Coast, here is my post about investment losses since 2006 at one of the most successful oceanfront developments in Sechelt.

http://vancouverpeak.com/Thread-Real-Estate-Investing-Sunshine-Coast-Style-Life-s-a-Wakefield-Beach

#31 ILoveCharts on 08.31.13 at 12:17 am

Tell us how you feel about the rush of Canadians buying homes in Phoenix and Miami. — Garth

I would feel no offense if they implemented rules to control it. In fact, it would probably be a prudent move.

Here is a fun fact.
In China:
” Foreigners can own only one residential property for their own use (permanent residents are restricted to two properties).
Foreigners must reside in the country for one year before they can buy property.”

And something else to consider:
“Alberta limits non-residents to two plots of agricultural or recreational land not exceeding a total of 20 acres.”

In the same way that farmland is is important for the economy of Alberta, houses and condos are important for the white collar economy of Vancouver. Our city is going to continue to bumble along without a growth in the number of corporate headquarters as long as the price of living is so high.

Some other good examples in the story:
http://www.cbc.ca/news/canada/story/2012/03/17/f-real-estate-foreign-ownership.html

#32 Carpe Diem on 08.31.13 at 12:27 am

#14 Jim

Like any other industry the “arts” could mean so much. This guy could be specializing in setting up new programs for exhibits or specialized in the recording arts and makes cash when a couple bands make a new album.

What I do know is senior baby-boomer civil servants need Gen-X consultants that know what to do for big projects. We’ve had to work hard to make it versus the boomers just having to ride the wave. Hence, now we make a pretty penny while they need to be civil servants and hope they don’t lose their jobs.

#33 Carpe Diem on 08.31.13 at 12:32 am

I can also mention, that’s why they pay 48% marginal taxes so their loser kid can get jobs holding slow/stop signs around public works sites.

#34 AACI Home-Dog on 08.31.13 at 12:32 am

Smoking Man…when your spelling is bang on, does it mean that you are sober ?
WTF…it is a Friday night…

#35 Tony on 08.31.13 at 2:24 am

The only people in Calgary with a capital gain on a townhouse are the ones who bought in the seventies and eighties. The distraught gent will be in for a rude awakening if he actually believes he’ll break even upon the sale of a townhouse bought in 2009.

#36 observer on 08.31.13 at 4:56 am

Checking out the okanagan, Vernon, Kelowna region this week. In some places almost every second house is on sale.

They overbuilt, and now have been facing price reduction for a year now and still can’t sell

#37 detalumis on 08.31.13 at 5:41 am

Francis made a really, really DUMB move. He sells his house in a convenient area of one of the only places in Canada with walkability, transit and jobs to move to the back of beyond to let his wife be a stay-at-home wife with an unstable job of his own. This ain’t 1950. Anybody who does that today just made the biggest financial mistake of their life as you will be on the hook forever for spousal support for enabling and encouraging them to give up their career. I don’t get men who still do this sort of thing today.

#38 Kent on 08.31.13 at 6:38 am

If there’s no intention to “bail in”to bank accounts, why did they include it in the budget? Buying PMs sounds like a good idea to me given that the govts don’t even trust the future of the financial system.

#39 bigrider on 08.31.13 at 6:52 am

Fundamental question which may address why RE prices continue to remain stubbornly high in the GTA is :

Is Toronto a world class city ?

The question has been dealt with before on this blog with many pro and anti, but it has been quite a while since.

I am wrestling with this myself, especially in light of some of the initiatives by government and planning departments now seemingly in place.

Anyone who wishes to chime in as to why it is or is not, please provide arguments for or against.

Let’s re-open discussion.

#40 jerry on 08.31.13 at 7:50 am

What is the safety spread on the HELOC? If you borrow back your principle at prime plus pay the fee base advisor and make your monthly interest (tax deductible) payments , what sort of investment vehicle makes it safe and worth while. Ex. Prime around 3%. Do you you need something that generates at least 4-5% to make it work? Do you need to be in a high 40% plus tax bracket?

#41 housedoc on 08.31.13 at 8:03 am

fter you close the deal, cue the mortgage guy and borrow back $300,000 on a HELOC (at prime). Set aside fifty for renos, and put the rest into the hands of a smart fee-based advisor who will build a conservative, balanced, diversified portfolio you can be confident in. Now you own your home with no amortized, costly mortgage. You have a liquid portfolio. You’ve diversified your net worth. And you have a 100% tax-deductible home loan
……………………………………………………………………………

Not quite.
Only the interest on the 250k that is being invested.
The 50k for home renovations is not eligible.
Correct me if I’m wrong.

Obviously. — Garth

#42 renter in Edmonton on 08.31.13 at 8:56 am

I for one will be very happy when rents come down and there is more to chose from. This should bring some of those landlords and property management companies back down to earth when they realize the glory days of excessive rents and snooty attitudes are over.

#43 economictsunami on 08.31.13 at 9:39 am

No doomer-isms. No peddling. No soliciting.

Just attempting to help foster a better understanding of the big picture.

Informative video of Richard Koo doing a rather apt job of explaining what happened in Japan; and it’s current implications globally.

Also, Bruce Greenwald, on structural problems in the economy and unemployment.

The Great Recession: Structural and Cyclical Causes

http://www.youtube.com/watch?v=M3quayhKZ0M

Central bank technocrats are running the show and fair weather politicians; when it’s time for re election.

Knee jerk/populism will be on full display in both Canada and the US this election cycle.

Without a firm understanding, this can only lead to bad policy.

After all, politicians are not bound by the Hippocratic Oath…

#44 Julia on 08.31.13 at 9:46 am

#38 BigRider Is Toronto a World Class City.

Having just returned from Chicago my answer would be hell no! Of course we didn’t venture into the south end where they are are instituting the safe passage program so kids don’t get shot on the way to school.

#45 Smoking Man on 08.31.13 at 9:47 am

#33 AACI Home-Dog on 08.31.13 at 12:32 am
Smoking Man…when your spelling is bang on, does it mean that you are sober ?
WTF…it is a Friday night…
……………………………………………….

Usually an impostor. Have a cold, forgot to get into character. See I did it again.

#46 Julia on 08.31.13 at 9:56 am

Toronto world class? Chicago has the same population as Toronto and yet in 4 days in Chicago we never once experienced a crowded transit train, sidewalk or street and we were out and about the whole time. Plus the streets are clean, the architecture is stunning –even the Trump Tower, and the waterfront is spacious and clearly visible. The people seemed more relaxed and were very friendly.

#47 Siva on 08.31.13 at 10:05 am

#38 bigrider on 08.31.13 at 6:52 am
Fundamental question which may address why RE prices continue to remain stubbornly high in the GTA is :
Is Toronto a world class city ?

Yes but that is not the reason behind high RE prices. It’s because of cheap and easy credit. With Feds tightening easy part has been removed. Credit is already becoming costly and after September 17 it will be clear how expensive it will get. This time next year TO RE would have lost value substantially!

#48 Penny Henny on 08.31.13 at 10:24 am

Tell us how you feel about the rush of Canadians buying homes in Phoenix and Miami. — Garth
——————————————-
shoot the whole lot of them. bastards never invited me down for a week.

#49 CrowdedElevatorfartz on 08.31.13 at 10:36 am

Toronto world class?

Chicago has the Cubs, the Bears and the Blackhawks.
Toronto has the Jays, the Raptors, and the maple leafs.

No, it isnt a world class city…..yet.

#50 Bob on 08.31.13 at 10:50 am

#35 observer

“Checking out the okanagan, Vernon, Kelowna region this week. In some places almost every second house is on sale.

They overbuilt, and now have been facing price reduction for a year now and still can’t sell”

———————————————

I also spent time in Kelowna this summer. My own observations were similar. Tons of for sale signs – not many sold signs. However, if you talk to realtors, they’ll tell you that sales are picking up and listings are way down.

Boy, I sure didn’t see a shortage of for sale signs and open house signs. The plethora of strip malls all had for lease signs in some spaces – some with half or more spaces sitting empty. There was also residential construction (condo) sites that have had marketing signs up for 2-3 years but they sit idle. It sure didn’t look like a good situation to me.

Nevertheless, the weather was great and lots of construction still continues???

#51 Mr. BigStuff on 08.31.13 at 11:03 am

Corporate Bond ETFs are now on sale

#52 rosie "moving forward" in the knowledge that, "this won't end well" on 08.31.13 at 11:19 am

Is Toronto world class. You be the judge, or let these people. http://www.forbes.com/2009/09/02/new-york-paris-mumbai-rome-berlin-opinions-21-century-cities-09-world-class-cities.html

#53 John on 08.31.13 at 11:20 am

Toronto is far from a world class city. Have family in Chicago who live in an area that would cost $1 million plus in Toronto and yet would only cost $350-400K in Chicago . Toronto is a monster of a housing bubble and lets face it doesn’t have half the class of Chicago. Cheap and easy money is the ONLY reason why Classless Toronto is in a MONSTER of a bubble.

#54 BG on 08.31.13 at 11:26 am

#38 bigrider on 08.31.13 at 6:52 am
Fundamental question which may address why RE prices continue to remain stubbornly high in the GTA is :
Is Toronto a world class city ?

No way.
And I’m not hating. If I had to choose between living in Toronto, NY or Chicago for example, there’s good chances I would pick Toronto because it’s a more liveable city.

But if Toronto was a world lass city, we would not have this conversation, it would just be an accepted fact. Toronto tries to hard to be world class, instead of developing its own identity. This produces relatively pathetic landmarks like Dundas Square or the CN tower, empty of any symbolism or history.

This won’t happen until Toronto strops trying to be world class just for the sake of it.

#55 NoName on 08.31.13 at 11:34 am

Few weeks ago a took my 10yrs old daughter to Bay street to show her “where the money is”. She doesn’t get concept of stock nor do i, but i did my best with my bad english to explain her its not about a money in a paper or coin form, that its all about that number that she can see in her bank book, that can be converted in to something tangable, like hotdogs that we had for lunch. anyways interestin reads about hight friquency trading

model that use apple share and high froquency trading made “profit” of 377000$ in one trading day…

http://finance.fortune.cnn.com/2013/08/30/latency-arbitrage-costs/

“Here’s how Hendershott’s latency-arbitrage strategy worked: Redline allowed him to use its “direct market access” — cables that run directly from exchange servers to its own. Redline’s server was co-located with that of BATS Exchange so that the “latency” on information and orders coming from BATS was cut down to barely one thousandth of a second. As a result, some of the quotes on public feeds such as the crucial “national best bid and offer” feed were a few milliseconds behind those Hendershott could see on his direct link with the exchanges. With a half-decent trading algorithm, Hendershott would have had ample time to buy Apple at a stale price with a guarantee that he could sell at a profit. Every couple of seconds. All day. Risk on the trades: zero.”

in 1960 average position in stock was 8yrs, now 5days, high friq trading 16sec

http://www.equedia.com/the-shocking-truths-about-high-frequency-trading/

“HFTs are not only being used in the U.S., but everywhere around the world, including Canada. Sadly, regulations in Canada only add more support to the destruction of our market.”
guy who wrote all it seems to bee PM pumper, but nonetheless article is good read in my opinion.

#56 Donald Trump on 08.31.13 at 11:55 am

aaah Chicago…oh yes.

One of the most corrupt cities on the planet…with a Mayor whose eligibility was challenged on the residency facet, and who used some stored boxes in a house as evidence.

Chicago is the political machine that grooms and chooses politicians, NYC is the money machine.

#57 Rob on 08.31.13 at 12:06 pm

Folks, Garth is a fee based advisor, but don’t waste his time unless you got a decent sized portfolio.

Rob

Not exactly. I hope this blog demonstrates I try to assist everyone. Except the fools. — Garth

#58 Mr. BigStuff on 08.31.13 at 12:22 pm

Uncertainty in the markets is the norm, not the exception. Invest accordingly

#59 Infused with Opiates on 08.31.13 at 12:23 pm

29 Skook – the drops in prices seem comparable to the market on VI (exc Victoria). Height of insanity was 2007 into 2008, then a quick but small correction, then bouncing along with little change for last 5 years. Maybe a little more in the last few months, but hard to tell until some time later.

There may have been some speculators, but also some wealthier folk who bought on a whim, and now figure they are not using the property enough. I am sure many
can afford the hit. Typical of semi-rec lifestyle property.

#60 Alex n Calgary on 08.31.13 at 12:28 pm

Oh Garth! we just got the call that the folks who own the house we rent are coming back from BC and wanna move in (apparently something went wrong there, hmmm…) we still have 8 months left on our lease, but this is our 3rd rental house in 4 years now, I am getting exhausted from having to move so much. (they keep getting sold or tore down to put up duplex hellholes)

I know this is a terrible time to buy, asking prices are higher in this neighborhood then I’ve ever seen (50k over feb prices) for the high 300 low 400 houses. I’m hoping that in the winter we can score a deal on a desperate out of work construction kid from out East who went big and lost job. (poor guy, but you know) If not I guess more rent, but man, getting booted out of houses one after another is not ideal :(

#61 Infused with Opiates on 08.31.13 at 12:36 pm

38 Bigrider – of course it is, the arguement is a matter of degree. Here is a list I pulled off a google search. I have checked others and TO seems to run somewhere in the
top 20 depending on how the different factors are weighted.

http://www.atkearney.com/documents/10192/dfedfc4c-8a62-4162-90e5-2a3f14f0da3a

Keep in mind TO also has one of the highest percent of foreign born residents, meaning it is both a destination and a hub.

Though much smaller, Vancouver makes some lists for the same reason as well as its assessed “liveability”.

#62 Rawdiswar on 08.31.13 at 12:42 pm

Ok, if no Canadian bank will fail, what do you make of this?

http://www.policyalternatives.ca/newsroom/updates/study-reveals-secret-canadian-bank-bailout

Canadian banks WERE bailed out, with American money.

What does this mean in the long term?

Absolutely nothing to investors or depositors. — Garth

#63 Old Man on 08.31.13 at 12:59 pm

#52 Rawdiswar – The Canadian banking system is unique, as is opposite to the system in USA. We in Canada have the big six with each having thousands of branches from coast to coast. So if one gets into a bit of trouble the others will rush in for support with the Bank of Canada as a watchdog. Now surprise, as the CEO’s of all the big banks are friends as they make deals together, and socialize together as well; not one against the other in the least. There will never be a class A bank in Canada going bust, so sleep well at night.

#64 Dan on 08.31.13 at 1:04 pm

Preferred ETFs and REITs look tempting at these prices, but a decent sized correction in the equities market looms. I would only nibble and wait a few weeks for a better buying opportunity.

I’m glad I cut my preferred share allocation substantially back in April after holding since 2011.

I was a little early buying some gold mining stocks in May and June, but I’m glad I did. There could be substantially more upside in the coming months. It is an aggressive speculative play, but if you call yourself a contrarian like Garth claims to be, I couldn’t think of a better opportunity back then.

Emerging markets are starting to look interesting at these prices as well.

#65 Mortgage Man on 08.31.13 at 1:07 pm

A look back over a decade of mortgage
Rates. Below is the the cost to borrow
$100000. The cost of borrowing 100k was usually
In the low $ 400s. Now it’s approaching mid to $500

2009 3.65% @35 years $420
2010 3.50% @35 $411
2011 3.19% @30 $420
2012 3%. @30 $420
2013 2.89% @30 $415
2013 2.89 @25 $467
2013 3.4% @30 $442
2013 3.4%. @25 $494
2013 3.85% @30 $467

2004 4.2% @25 $527

#66 Mortgage Man on 08.31.13 at 1:18 pm

Looking at that chart we should get a major drop
By mid November (by the end of September all the cheap
5 year and 10 year will be gone). We should go back to 2010( more like 2008 but add a normal 2% per year appreciation ) price level and when include all the new rules like new restrictions on debt levels.
I don’t know if I’m missing another factor. Any thoughts?

#67 HAWK on 08.31.13 at 1:36 pm

38 bigrider on 08.31.13 at 6:52 am

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

Toronto would probably not be in the top 50 even, in either wealth or infrastructure.

#68 Toronto_CA on 08.31.13 at 1:47 pm

Toronto is very livable, but this too is in decline with the housing bubble (thanks to F’s 0-down 40year rules + 5 years and counting of emergency low interest rates) and crumbling infrastructure (awful traffic and public transportation).

But if you have to ask if it is a World Class City, then it probably isn’t.

I live here because I have cheap rent on my nice condo, I can walk to a high paying finance job in a few minutes, my friends and family live in the GTA, and I can fly many places non-stop from Pearson (or Billy Bishop). If I had to drive to work or take the TTC I would not live in the GTA because I don’t find those options sane, and from what I’ve read the traffic and transit in Toronto is far from world class.

I was an expat for many years and have friends from all over the world. The vast majority had never had any desire to come visit Toronto (the Canadian Rockies are the only thing in the country that I think is globally impressive as far as tourism goes). They have all been to or desire to go to Chicago; anecdotal perhaps but I think it shows that Chicago just manages itself better in the world city arena despite being very similar population wise and on a Great Lake.

#69 Toronto_CA on 08.31.13 at 1:51 pm

#55 Donald Trump on 08.31.13 at 11:55 am

While I agree with what you’re saying about Chicago and corruption, let no Torontonian throw a stone at another city’s mayor.

#70 piazzi on 08.31.13 at 2:00 pm

Garth,
do you have favorable views towards

1. US Preferred Shares ETFs?

2. Canadaian short term corp bond funds?

3. US short term corp bond funds?

#71 Old Man on 08.31.13 at 2:25 pm

The City of Toronto has changed over the years with insanity; crime; corruption; high density; and costing for accommodation; and transportation that works no more for the common good. Might be time with those that have the education and skills to split for a better life, and saddle up going elsewhere. I am suggesting to sell out, and look for options for a better location for the family unit to prosper in peace, and the Maritimes looks so good to me. Change is a difficult process in life, but one that needs to ponder going forward in life, so think about it all with a rational mind.

#72 Siva on 08.31.13 at 2:30 pm

Three Canadian cities in top five.

http://www.huffingtonpost.ca/2013/08/28/vancouver-most-livable-city-economist_n_3830039.html#slide=2850297

#73 NonSenseInMontreal on 08.31.13 at 2:36 pm

a friend of a friend has flipped a century old duplex in Griffintown(downtown montreal) into 2 fully renovated condos…

One of them is listed for 915k $ for a very decent 1650sq ft 3bdrs 2bthrms..

There are multiple apartments for rent in the same area or even in more prestigious Westmount for around 2000$ a month.

Wait a minute, what’s the ratio on this comparison..

915,000/(2000*12) = what the #@% !!???

38 ?

ah well, I guess it’s all justifiable given Montreal exceptional economic growth this year

#74 Donald Trump on 08.31.13 at 2:40 pm

Toronto was built with what even Detroit, Moose Jaw and Vegreville couldn’t be paid enough to accept.

#75 ILoveCharts on 08.31.13 at 3:18 pm

Is Toronto a world class city?

No. But it is the largest city in a world class country and that counts for something.

#76 espressobob on 08.31.13 at 3:28 pm

#65 Dan

Thats the problem with market timing, to much guessing! You might be right on a few plays but when do you sell?

As an index investor its far easier to skim profit off broader based ETFs and re-allocate the proceeds to the underperformers, like prefs & REITs. No timing necesary!

Gold stocks can usually be found in ETFs like say ZCN for example. names like Barrick, Goldcorp, or even Tech Resources are present. Small cap plays are much better played in an a small cap ETF, think liquidity. I’ve learned a few lessons the hard way! Like stock picking for one. Good Luck.

http://www.etfs.bmo.com/bmo-etfs/holdings?fundId=72048#

#77 Revmod on 08.31.13 at 3:53 pm

Shocking new blog posts? Let me guess:

“That’s it, RE melt over, this is the bottom, buy buy buy?”

“Your portfolios need more gold.”

“i’m having an affair with [email protected] She actually has some pretty good advice.

“With the right seasoning, squirrel can actually be pretty tasty.”

Okay, I give up.

#78 Squatter on 08.31.13 at 4:43 pm

Shocking new blog posts? Let me guess:

“That’s it, RE melt over, this is the bottom, buy buy buy?”

“Your portfolios need more gold.”

“i’m having an affair with [email protected] She actually has some pretty good advice.

“With the right seasoning, squirrel can actually be pretty tasty.”

Okay, I give up.
—————————————————-
I’ll add:

“Squatters are invading condo towers in downtown Vancouver.”

“It’s time to buy a Kia.”

#79 Bigrider on 08.31.13 at 5:11 pm

Love all the responses so far as to Toronto being a world class city or not.

Seems the question is absolutely fundamental to the sustainability or not of these sky high RE prices and more so, the lack of a significant price correction to date unlike just about everywhere else in the world.

Keep the opinions and references to support views coming

#80 Mike T. on 08.31.13 at 6:11 pm

Definition of a world class city:

A global city (also called world city or sometimes alpha city or world center) is a city generally considered to be an important node in the global economic system. The concept comes from geography and urban studies and rests on the idea that globalization can be understood as largely created, facilitated, and enacted in strategic geographic locales according to a hierarchy of importance to the operation of the global system of finance and trade.

http://en.wikipedia.org/wiki/World-Class_City

by this definition Toronto is un-questionably a world city….

but that won’t stop the real estate melt

NY corrected
London
Rome
Paris
etc etc

#81 johnnny on 08.31.13 at 6:25 pm

#75- Well done!
You named an area or neighbourhood,BUT you also
let the reader know where it was.(downtown Montreal).
Too many commenters don’t realize that people all over Canada,as well as world wide,read this blog and they assume that everyone knows the nicknames and areas of the city they refer to,and they don’t even say what city.

#82 wendi1 on 08.31.13 at 6:31 pm

Speaking of “firsts”…

http://xkcd.com/1258/

#83 Dan on 08.31.13 at 6:43 pm

#78 espressobob:

Yeah I know, I bought the XGD (senior miners) and ZJG (juniors) ETFs back a few months ago, not the individual gold stocks.

#84 Marginal on 08.31.13 at 7:11 pm

#79 Revmod on 08.31.13 at 3:53 pm

#80 Squatter on 08.31.13 at 4:43 pm

….or F is retiring and Garth is getting his old job back.

#85 Donald Trump on 08.31.13 at 7:15 pm

Now this is a World Class city:

Prepared for and/all emergencies.

http://www.youtube.com/watch?v=EMHxBcimal8

#86 espressobob on 08.31.13 at 7:35 pm

#85 Dan

I’m not dissing your comment! The point I’m trying to make is the concentration risk your playing in a sector play! Quite Risky! But fair enough if your portfolio is wealthy and can absorb such a loss, no problem!

I doubt many that read this blog have that luxury.

#87 Daisy Mae on 08.31.13 at 7:42 pm

#80 Squatter: “Shocking new blog posts? Let me guess: “That’s it, RE melt over, this is the bottom, buy buy buy? Your portfolios need more gold. i’m having an affair with [email protected] She actually has some pretty good advice. With the right seasoning, squirrel can actually be pretty tasty. Okay, I give up. I’ll add: Squatters are invading condo towers in downtown Vancouver.It’s time to buy a Kia.”

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

Soooo…basically, what you’re saying is that we’re all going to hell in a hand basket?

#88 Skook on 08.31.13 at 7:58 pm

#59 Infused with Opiates

I have been posting VIREB and VREB stats in the VancouverPeak.com forum, too.

http://vancouverpeak.com/Forum-Vancouver-Island-Data

However, I don’t live on the island and we could sure use some “feet on the ground” if you feel so inclined. Anyone else from the Island reading this, please feel free to take me up on this offer, too.

The forum is there for whatever insight you can offer or comments you would like to make.

#89 Evangeline on 08.31.13 at 8:00 pm

#89 Daisy Mae “Soooo…basically, what you’re saying is that we’re all going to hell in a hand basket?”

Don’t forget to pack sandwiches!

#90 Marginal on 08.31.13 at 8:08 pm

#82 Mike T. on 08.31.13 at 6:11 pm

Thanks Mike….great value added input, both the Wikipedia link and the comment that just because Toronto may be a world class city doesn’t mean that Toronto won’t have a housing correction/crash.

#91 Smoking Man on 08.31.13 at 8:18 pm

Wow didn’t see this one coming

O bummer is backing down, asking congress for a green light….. He don’t want it.

This is going to cost me huge….

In the past, the crime, the images and story, msm pump
The pole, all good.

BOOM……..

The stupid herd picked a bad time to wake up.

This is going to hurt….

#92 Dwight on 08.31.13 at 9:05 pm

Which preferred and reit EFTs? Specific recommendations please Garth.

#93 -=jwk=- on 08.31.13 at 9:23 pm

@ #38 bigrider.
No Toronto is not world class. (BTW: it is 1/3 the size of Chicago. The entire GTA is roughly the size of the core of true Chicago, what used to be called Toronto the city pre-amalgamation. Toronto city was 800k or so? vs 4M? Not close.)

Having lived in New York (manhattan), los Angeles and a spot of London Toronto is a quaint little seaside village compared to those places.

There are a handful of mega cities, that have influence far beyond their borders and the infrastructure (schools, transport, architecture) to back it up. London, New York, Hong Kong are on that list. Then you have the very strong, what I would also call World Class cities that are regional players but have the infrastructure of the big boys, striving to take over. The Paris, shanghai, Singapore and yes, Chicago’s of the world. Finally you have very regional cities, with limited infrastructure (small transit, few schools, small single business districts) and influence only in their regional sectors. These are not world class cities, just large regional centers. Think Philedelphia, Miami, Barcelona, kuala lumpur, …Toronto.

Toronto is 100’s of km of subway track , 4-5 large universities, millions of square feet of office space, a couple of professional sports teams, several TV stations and about 5 million people away from world class. My bet is the 5 Million arrive before the subways do!

#94 Big Brother on 08.31.13 at 9:35 pm

#93 Smoking Man on 08.31.13 at 8:18 pm
Only if MKULTRA says its going to hurt. Go drink some wine and have a cigarette to calm yourself SM. don’t worry our drugs will kick in soon and you will be dreaming of hotties.

#95 Nemesis on 08.31.13 at 9:36 pm

@DT/#87

“Amateurs. Sigh.”

Immodest though it may be… this is how we used to do it.

http://youtu.be/38YbolAesPY

Training helps. Natch.

#96 mortgagebrokeron on 08.31.13 at 9:47 pm

Hi there,

as a broker if I can get you a secured line of credit it would be prime plus .50 ……. prime isn’t really offered, if is out there than be prepared to pay a brokerage fee to get it…

better to just get a prime plus .50…. you hate debt anyways so you probably won’t use it.

#97 mortgagebrokeron on 08.31.13 at 9:50 pm

The following is on canadianmortgagetrends.ca

TD Economics weighed in on these points in a report last week. Here’s a quick overview of the implications TD foresees, and some observations of our own…

Future Rates: TD projects a 2.25 percentage point jump in 5-year bond yields by 2017. That would peg 5-year fixed rates at roughly 5.74%.

#98 Donald Trump on 08.31.13 at 9:50 pm

#93 Smoking Man on 08.31.13 at 8:18 pm

Wow didn’t see this one coming

O bummer is backing down, asking congress for a green light….. He don’t want it.

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

http://www.washingtonpost.com/blogs/worldviews/wp/2013/08/31/watch-the-video-of-obama-announcing-he-will-launch-military-action-against-syria/

I agree…I didn’t think he would do it….but it is a green light. He just wants to drag Congress into it and make a stacked deck look like a democratic vote.

Syria is a very small country, and regardless of what is really going on….why is the U.S. getting involved ?

WW3/Armageddon..the U.S. is the b*tch of a certain Rothschilds- created circa 1948 Middle East country.

#99 mortgagebrokeron on 08.31.13 at 9:51 pm

That would drop real estate like a stone

#100 Marginal on 08.31.13 at 10:19 pm

#97 Nemesis on 08.31.13 at 9:36 pm

Positively Adlerian…

;)

#101 Smoking Man on 08.31.13 at 10:38 pm

Henry kissinger just lost control of his boy..

Machine did you not see the dementia setting in?

I did and bet stupid.

Henry time for a graceful retirement. Your done now.

I say it’s time for Bolton to fill his shoes.

What you thinking anon.

#102 Donald Trump on 08.31.13 at 10:49 pm

I tell ya..it’s getting uGlY out HerE

Maple Ridge shooting victim is a Realtor and former city councillor

http://globalnews.ca/news/813336/person-airlifted-to-hospital-after-reports-of-shooting-in-maple-ridge/

======

Tomorrow is Sunday..and we will kneel and be thankful we are not in 416….

#103 Julia on 09.01.13 at 12:24 am

The only problem with world class cities is they are not in countries where I’d want to live. Personally I love Toronto, but then I rent and live within walking distance of everything. My love of this city and country doesn’t make Toronto world class or mean real estate is worth what people are paying for it.

The frustrating part is that Toronto could be world class if the rest of the country didn’t hate it so much that it would be political suicide for the federal government to fund its infrastructure adequately.

#104 Bill on 09.01.13 at 1:51 am

Calgary is affordable again! Only $12,000 for this house in Calgary! Oh wait… what? It’s just the house? Not the land!? Why would I even want a 1950’s bungalow? Nevermind having to move the entire thing somewhere else…

http://www.findcalgary.ca/mls-C3577649-720_35A_ST_NW_Calgary_Alberta.html

#105 cynically on 09.01.13 at 3:14 am

There is only one NA world class city in the true sense of the meaning “world class,” and that is New York. It has everything that the term implies – business, finance, culture, sports, population, you name it, and the headquarters for the United Nations to boot. Neither London nor Paris, other world class cities, can claim the UN. As for Toronto being in the same category as the three cities mentioned, forget it. There are people in Vancouver who believe that because it is one of the most livable cities it is world class but that is laughable. Toronto is really the only city in Canada that might get a mention because it does have a couple of the above-mentioned attributes required but it is in a relatively unimportant country on the world scene.
As for the comment about the big six banks by #64 Old Man, you should add that there never will be real competition among them as it not in the Canadian character to compete like the Americans, thus their banks are unwelcome up here whereas a couple of the big six are doing very well competing in the US. I’ve always said the banks run the country not the government except that the lack of democracy in the senate or the choice of a foreigner as head of state seem to come from whichever party is in power. No wonder some posters on here use the term sheeple when discussing its citizens. We allow it. Sorry Garth.

#106 Robin Giesbrecht on 09.01.13 at 3:27 am

#82 you are joking right, did you read your own words?? Toronto, excuse me, Canada is a backwater in global events..

#107 snake on 09.01.13 at 9:10 am

Maple Ridge shooting victim is a Realtor

http://globalnews.ca/news/813336/person-airlifted-to-hospital-after-reports-of-shooting-in-maple-ridge/

#108 Siva on 09.01.13 at 10:22 am

“Canada’s house prices are bubbly” -The Economist http://t.co/zho2059OAi

#109 MarcFromOttawa on 09.01.13 at 10:31 am

#108 Robin

You’re just pissed Toronto is listed above Frankfurt in Wikipedia’s list.

#110 Nemesis on 09.01.13 at 11:15 am

@DT/Snake…

First things first: according to BC’s EnvironmentMinistry/WildLife, Realtor season doesn’t open until September…

So, we can rule out MapleRidgeSportsMen (although personally, I don’t think it’s sporting to shoot at anything that can’t shoot back).

Now, as to PrimeSuspects… here’s your SmokingGun:

…”Prokop also founded the Gourmet Hideaway Restaurant, which was later renamed Don Cherry’s, and burned down in a suspicious fire two years ago.”…

There, solved it for ya.

Now, if HogTown’s finest could just spare a few moments from their search for the Mayor’s missing ‘HomeMovies’… they might begin with a discreet inquiry or two at Cherry’s tailor/dry-cleaner… alternatively, the MapleRidgeGendarmerie might try a StakeOut at their local DominionLendingCentre…

#111 Nemesis on 09.01.13 at 11:31 am

Meanwhile, back in EuroLand…

…”Axa Real Estate, the property arm of the French insurer, has completed deals in both Italy and Spain during the second quarter of the year. “Investors, including us, are starting to move slowly up the risk curve again and are seeing those markets open up,” said Anne Kavanagh, global head of asset management and transactions at Axa Real Estate.

“But there will not be a rush into the peripheral countries; it was, after all, only a year ago that we were talking about a possible break up of the single currency.”

The burgeoning activity puts the cluster of countries, often unflatteringly referred to as “the PIIGS”, at odds with the wider trend in Europe’s property market, where demand, having risen steadily for two years, ebbed during the past three months.

The large cities of the continent, London in particular, have become saturated with competition from US, Asian and Middle Eastern property buyers, driving down yields and forcing many European investors to eek out returns in regional or higher risk submarkets.”…

[FT] – Property deals surge in peripheral EU countries

http://www.ft.com/intl/cms/s/0/1066d5e2-1301-11e3-a05e-00144feabdc0.html?siteedition=intl

#112 Nemesis on 09.01.13 at 11:55 am

LastUpDogs, your SundayBrunchZen… LAX vs. YVR ‘Comp’OTheWeek’

Let’s see, will that be VancouverCrackShack… or would you prefer HurleyHouse, a Greta Magnusson Grossman original in the City ‘O Angels’ HollyWoodHills. Yours for just USD1.8M…

[LAT] – Hurley House in Hollywood Hills is for sale

http://www.latimes.com/business/realestate/la-fi-home-20130901,0,1654510.story

#113 dienekes on 09.01.13 at 12:29 pm

Globe and Mail
“Alberta braces for wider oil price spread”

Duh…Really?
Keystone will never be built. US’s key to cheap Canadian oil.
Hello Phillips 66, I’m your friend.

“But..But oil will keep house prices in Calgary high.”
Dumb people keep housing high, not oil.
How big is Alberta deficit going to grow to now?
Does anyone in Alberta know what the letters P.S.T. stand for?

#114 Donald Trump on 09.01.13 at 12:33 pm

Re World Class Cities:

One cannot have a world class City unless the mayor is some sort of quotable buffoon…

….also bizarre public art and “love” shops

#115 Infused with Opiates on 09.01.13 at 12:40 pm

112/113 Nemisis – I find you making light of a shooting victim offensive – Garth do you approve?

I fail to see the disrespect. — Garth

#116 Julie on 09.01.13 at 1:00 pm

But it’s different in the USA with their booming economy……oh wait:

http://www.wnd.com/2013/08/more-bad-news-for-labor-day/

#117 Donald Trump on 09.01.13 at 1:02 pm

Re: Rentals and Vacancies

No bugs, rats or shared beds

Hannah Blazer’s checklist is pretty straightforward. “No bugs, rats, mould, disrepair, crumbling ceilings.”

http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=e1bf2f75-32c2-4ba8-8c7d-4745676be980&k=24973

QUOTE:

If, like Blazer, you want a place you are going to love – or at least like – you may be forced to go out of your chosen neighbourhood or seek lessconventional alternatives. Randy Carlaw, 33, had plenty of interest when he recently posted an ad for a 1974 Sprite Caravan, a classic trailer with a working toilet, running water and 200 square feet of living space for the rock bottom price of $350 a month.

“I put myself through school and lived in some dumpy apartment. This is your own space, and it’s so cute,” says Carlaw, who hopes to eventually turn the trailer into a ’50s-style diner food cart, pumping out sliders and milkshakes at summer music festivals.

Carlaw figured that until he was ready to kit the cart out, he would find a student. What he got instead was a retiree who plans to park the trailer on a lot and live in it to save some money – something that illustrates, perhaps, it’s not just students feeling the squeeze.

==================================
QUOTE:

Hannah Blazer’s checklist is pretty straightforward. “No bugs, rats, mould, disrepair, crumbling ceilings.”

For the 24-year-old who starts classes at Langara College next week, cleanliness and safety are the biggest dealbreakers. But her budget, $500 to $600, puts her perilously close to living in a pit.

“You really can’t find anything cheaper that isn’t a shithole,” she says.

In the last few weeks she’s seen at least 20 places. “That’s just the people that get back to you and the place is still available.”
======================

Fuss-ass….offered Surreys best !

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

Quote:

Blazer is just one of the nearly 300,000 post-secondary students who will be hitting the books this fall in the Lower Mainland. For those that haven’t snagged a spot in residence or, like Blazer, choose to live off-campus, the quest for affordable housing in Metro Vancouver can be daunting.

CMHC’s Rental Market Report, released last fall, showed that although vacancy rates were up marginally (from 1.4 per cent in 2011 to 1.7 per cent in 2012), rents had risen in most Vancouver markets, jumping 2.3 per cent for an average two-bedroom apartment. One bedrooms went for, on average, $1,067 in the Vancouver City area, $947 in Richmond, $723 in Surrey, $888 in Burnaby, $947 in North Vancouver and $1,248 in West Vancouver.

#118 Holy Crap Wheres The Tylenol on 09.01.13 at 1:26 pm

Relatively few comments today, seeing its the long weekend and all. Asads about to play his cards against Obama and what’s worse is Asads brother is the evil one in the family and yet nobody notices!
The war machine keeps turning, in the fields the body’s burning!!!!

#119 Julie on 09.01.13 at 1:47 pm

In “Climate Cold’ news:

Here in Chilliwack we had TWO DAYS above 30. Two. The Fraser Valley is known for being hot hot hot in the summer. I pity those who bought those overpriced match boxes in Garrison. They won’t burn but rather rot when “Climate Cooling” really takes hold. We sold our farm last year (thanks to Garth) and I can tell you, wood rots. I don’t care what preservative you put in it, it wears off in the rainy rainy rainy rainy long wet coast. And all the junk in Garrison is WOOD. Good luck……oh and hear are some stats you wont see in the the main slime media on Climate Cooling:

http://www.dailypaul.com/294443/1122-record-low-temperatures-set-in-us-this-week

the sooner you people get off your iphones and DEMAND the removal of the carbon (Fraud) tax the sooner things will start to turn around for us as a controlled people.

#120 Old Man on 09.01.13 at 1:47 pm

All wars throughout history come about with false flags to advance a political agenda to benefit the bankers and corporations or a particular country. In this scenario with Syria just ask one question, and that is who benefits; then you will ascertain the guilty parties who are hiding behind the curtain of deception.

#121 lawboy on 09.01.13 at 1:52 pm

Look at this creepy little house just north of Lakeshore in ‘Riverdale’. My stomach turned looking at the itty bitty rooms, low ceilings, ugly back…..area? I can’t imagine spending five minutes in that place let alone living in it. Gross. 599k, they probably could list for 649 and would get multiples.

http://www.realtor.ca/propertyDetails.aspx?propertyId=13574071&PidKey=62902901

#122 lawboy on 09.01.13 at 1:54 pm

#`112 Nemisis

Uhh…Nemisis….it IS September.

#123 Andrew Woburn on 09.01.13 at 2:01 pm

First, no big bank will fail. Second, even if one did, no bank account will be seized.
=======================================================

Garth has a sunnier disposition than me. The Dutch are some of the only people the world community would consider more boring and responsible than Canadians but their fourth largest bank, SNS Reaal, was nationalized this year over bad property loans in a collapsed real estate market. You missed that one in the Canadian MSM? Me too. The bank had apparently passed a “bank stress test” only a few months before.

The good news is that the passing of the bail-in provisions in the Federal budget does not represent an immediate threat to your $50 bank account. The bad news is that it represents some of Canada’s part in complying with the Basel III round of international banking rules promulgated by the world’s central bankers. They recognize that world governments are financially exhausted and can no longer rescue huge banks with taxpayer funds. They are trying to harmonize banking regimes so that the failure of an international bank can be dealt with in a similar manner across the various countries in which it operates to facilitate a speedy wind-up. One of the prime items on the menu is bail-ins (creditor haircuts).

Canadians who would never risk a dime on shares of General Electric are quite happy to lend money to highly leveraged corporations at virtually no interest. What we
call a bank deposit is in fact and law an unsecured loan. In some countries the doctrine of depositor preference prevails. That means on a bankruptcy depositors get paid first in preference to all senior debt. Those crazy cowboys in the US passed such a federal law in 1993. Before you are dazzled by the US government’s compassion, remember that most American’s bank deposits are completely covered by federal deposit insurance. What actually happens on a bank failure is
that the guarantor agency buys out the individual depositor’s claim against the bank and then pursues the claim on its own behalf. Depositor preference means the US government muscles to the front of the line. There are less assets for secured creditors to claim. Canada hasn’t enacted depositor preference so in a bankruptcy your bank deposit ranks slightly north of a common shareholder. Now you know why Canadian banks are popular with secured creditors. You also know who actually runs the country.

Bail-ins are not outright seizures. They are the forced conversion of some part of your claim against the bank into equity so that the bank’s capital ratio can be maintained. In theory you could get your money back. Someday. However EU politicians are waking up to the realization that both bankers an politicians can swing from the same lamppost and are warming up to the concept of depositor preference. Meanwhile, should another black swan come hissing over the horizon, Canadian depositors are protected by the common sense and good faith of their political and financial elites.

There is no bail-in provision in Canada that applies to anything other than new issues of investor-grade securities. Such a stupid waste of words on this non-matter. — Garth

#124 Mister Obvious on 09.01.13 at 2:24 pm

#106 Bill

That Calgary bungalow at $12K looks like a bargain to me. For example, you could buy a building lot in Drumheller for about $22K. Then you could prep the lot for maybe $15 K and have the house raised and moved the 150 km to Drumheller for say, $20K.

For a measly $69K you’d have a nice little place in dinosaur country. It would compete with other similar homes in the area going for 150K to 200K.

If you wanted, you could seriously undercut these and make some cash provided you could find a buyer. Myself, I love Drumheller but I don’t think too many would find it much of a destination.

#125 Old Man on 09.01.13 at 2:58 pm

Happy Labour Day weekend to all. I had this sweet old lady knock on my door, and brought me a freshly baked apple pie, so invited her in for a cup of King Cole tea, as only have the best. She wanted to know what I was up to, and said was just looking at handmade hats for something to do, so off to my home office, as she had to see especially on the blog site on my computer for a full display of hats in real life. She wanted them all, and is going to buy a few lol. Hey, what can I say as contribute to Canadian business.

#126 Donald Trump on 09.01.13 at 3:27 pm

BTW:….according to the media buzz…WW3 may start Thursday.

#127 father on 09.01.13 at 3:55 pm

is sunday the day of shocking news?

Never on Sunday. — Garth

#128 Squatter on 09.01.13 at 4:16 pm

Russia just sent many battleships in the Mediterannean Sea.
If USA attacks Syria, and Russia does nothing, Putin will look like a fool. He needs to respond…
Any one has a nuclear shelter to share? I won’t use much space. I’m very small… I’ll pay a good rent.

#129 Old Man on 09.01.13 at 5:13 pm

#130 Squatter – Russia and China will never back down, as they have drawn the redline, as am an expert in military assets, and USA is a joke as Russia is #1 and China is #2, as USA cannot even get a working war plane to work anymore in the air; not to mention sending a space shuttle up via NASA. Russia is a world power with weapons that are decades ahead of USA, and Putin is no fool, so he is holding a royal flush, and the big question is who will blink first.

#130 Smoking Man on 09.01.13 at 5:46 pm

#130 Squatter on 09.01.13 at 4:16 pm

Russia just sent many battleships in the Mediterannean Sea.If USA attacks Syria, and Russia does nothing, Putin will look like a fool. He needs to respond…Any one has a nuclear shelter to share? I won’t use much space. I’m very small… I’ll pay a good rent.

………..

If USA attackes Syria, Russia will attack Saudi Arabia,for supplying the rebels with the gas. And paying them back for threats of terror attacks at the oylimpics

And my oil future contracts go orbital….

#131 TnT on 09.01.13 at 6:07 pm

#131 Old Man

***
#130 Squatter – Russia and China will never back down, as they have drawn the redline, as am an expert in military assets, and USA is a joke as Russia is #1 and China is #2, as USA cannot even get a working war plane to work anymore in the air; not to mention sending a space shuttle up via NASA. Russia is a world power with weapons that are decades ahead of USA, and Putin is no fool, so he is holding a royal flush, and the big question is who will blink first.

***********

Old Man is this you saying this? Is this a joke?

Simply look at any public global map and see where the US has a military presence.

Think about the logistics of moving war materials and executing command and control.

Think about the intelligence and strike capabilities.

Think about the allies, the money and just the shear mentality of American society.

Anyone who thinks the US is not the #1 all-time military, so far advance from any other country if completely insane.

#132 Texas boy on 09.01.13 at 6:47 pm

Wow, Smoking man and old man have some WWIII scenarios going so I’ll add mine:
The US bombs Syria. Some minor damage so they can say they spanked Assad.
Assad is no fool, doesn’t need more pain after they bombed his summer palace and crystal chandeliers his wife just bought, so he has one of the rogue Lebanon-based minions shoot Israel. Israel bombs Lebanon, end of story… Russia and China do nothing. They are too smart for that…

#133 Squatter on 09.01.13 at 6:52 pm

#132 Smoking Man:
If USA attackes Syria, Russia will attack Saudi Arabia
——————————————————–
I wish I lived on another planet.

#134 Nosferatu le Madman on 09.01.13 at 7:13 pm


#121 Julie — “In ‘Climate Cold’ news: I pity those who bought those overpriced match boxes in Garrison. They won’t burn but rather rot when “Climate Cooling” really takes hold.”

To completely mess the world up and confuse Sheeple in the Zombie Zone, all that is needed is for Yellowstone or Toba to have a hissyfit, thereby blocking out the sun’s rays and sending us yonder into another ice age for a few thousand years.

If WW3 happens at roughly the same time, we’ll wipe ourselves out a lot more quickly (physically, but not spiritually as life always continues) than first envisaged.

Meanwhile, a few links fell off the garbage truck a few days ago, such as Hungary, is making history of the first order along with Iceland & Russia (issuing debt-free money);
here, here, here, here, here, here, here, here and here.

#135 Old Man on 09.01.13 at 7:26 pm

#133 Texas Boy – the one thing in Texas that I loved was the Ribs, and the women, but other than that you good old boys know nothing about Geo-Politics, and military hardware as USA has zip; no money; no manufacturing structure; and no boots to take the ground to fight any battle. Russia has it all, and if you challenge Putin he will destroy you, and China will back this all into WW3. USA is not a world power anymore, so live with this new reality.

#136 TnT on 09.01.13 at 7:40 pm

#131 #135 Old Man

You have dementia if you think the US is not the only super power that exists.

Just look at a global map and see first hand who dominates.

Your comments are so naive it’s like your post is from an imposter.

#137 Donald Trump on 09.01.13 at 7:50 pm

I think we should pass the hat and send Smoking Man and Old Man to Syria ……it is our only hope.

#138 TnT on 09.01.13 at 7:54 pm

#131 #135 Old Man

Your posts are so naive that it seems its an imposter is using your name.

There’s no other country that dominates in culture, military and politics than USA.

Russia is a paper bear, no claws or pride.

China has a very long term plan that makes this Syria issue nothing but a blip on their radar.

#139 Steven on 09.01.13 at 8:02 pm

I must concurr with Old Man. Georgia with the help of America and Israel got out of line and the Georgians shelled ethnic Russians in Georgia and their Russian peacekeepers a while back. The result? The Russians sent in the army and kicked butt and rightly so.
In the summer of 1939 before sept 1st the Poles committed atrocities against ethnic German- Polish minorities living in the Danzig corridor and in western poland and also during the german invasion. Estimated death toll was estimated at 58,000. The German government like the Russian government more recently did their moral duty to intervene and punish ethnic cleansing. Imagine that the Germans actually fought genocide and that started WW2.
The Syrian conflict is obviously a war crime and genocide being inflicted by foriegners on the people and government of Syria. In all these cases the blame falls at the feet of the globalist elites and the tribe.

http://archive.org/download/PolishAtrocitiesAgainstTheGermanMinorityInPoland/Poland.pdf

All Wars Are Bankers’ Wars
Done with malice and fore thought.
http://www.youtube.com/watch?v=5hfEBupAeo4
http://servv89pn0aj.sn.sourcedns.com/~gbpprorg/judicial-inc/Broomberg.htm

Just a history lesson to consider before WW3 breaks out good and proper.

#140 Texas boy on 09.01.13 at 8:06 pm

#135 Old man:

Ribs and ladies are still outstanding. The economy is doing surprisingly well and the US military is still unmatched when in comes to toys and equipment. Regardless, no one wants to have a ground war with China and their 100,000,000 man standing army.

Having been around the world multiple times and traveled extensively to the Middle East for the last 30+ years, I have an understanding of the situation that is better than the average Joe.

Only thing Russia cares about in Syria is the port city of Tratus. This is the only “friendly” port Russia has in the Mediterranean Sea, with economic interest greater than $20B. On a side note, that is why Russia was trying to “buy” Cyprus (if you remember the news from a few months ago), so that they can have a backup plan.
Assad gives Russia some money for weapons, but that is insignificant. They want him to stay in power so that they can keep the port.
As long as Obama doesn’t blow Syria to a point where Assad loses power or an accidental tomahawk hits Tratus, Russia will stay totally out. Why get involved.

Assad is more afraid of Israel than he is the US. The US doesn’t border Syria so he doesn’t really care… Israel is not going anywhere and he believes they control the US as does most the Muslim world. Israel will bear the wrath of Assad, maybe Jordan. As it goes, there will not be much wrath, as there will not be much of a US attack. Just a spanking…

China simply doesn’t care. They don’t support Syria albeit China is the largest export market for the few Syrian businesses still operating. China just wants every country to butt out of every other country’s business, even if that involves killing of thousands or millions… It’s simply how they are wired… They will not get into a war with the US or anyone else over Syria.
In 10-15 years, when the US is “energy independent” and is not as involved in the Middle East, China will invade Iran so they can get cheap oil. At that point, the US would howl, and so will Russia, and none will do anything about it…

#141 Nemesis on 09.01.13 at 8:16 pm

“Never on Sunday.’ — HonGarth

Sadly preoccupied with HobGoblins&Tales’OwOe in DistantTroubledLands, Nemesis – and not for the first time – was obliged to make his apologies and RegrettablyRideOff into the SunRise.

Shortly afterwards, in a small, RococoGreekBoudoir…

http://youtu.be/YCFXGanTx4A

#142 FutureExpatriate on 09.01.13 at 8:26 pm

No worries!

Syrian war leading to WWIII officially over.

GOP Congress (House mainly) will never grant “the Kenyan Moslem antichrist” war powers.

It’s over before it started. Score?

Obama, 1,000,000

GOP, -0.

Again.

#143 Smoking Man on 09.01.13 at 8:37 pm

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#144 Smoking Man on 09.01.13 at 8:53 pm

DELETED

#145 Smoking Man on 09.01.13 at 9:04 pm

Anyone wana make a zillion, start a religion, offer the best after life deal going, just get it on TV, the track 6ets are yours.

Humans are pathetically stupid that’s why I hate them. Mind you with out them being stupid it would be hard to get them to hand over treasure and loyalty and labour credits.

I’m going to invent the ultimate religion……..

#146 Old Man on 09.01.13 at 9:20 pm

#138 Texas boy – what a rant and will stand firm as the best rib rack in the world can only found in the State of Texas, and the women are the best in the world, as if you cross them better saddle up fast to cross a state line quickly or will end up in jail, or they will beat the hell out of you with baseball bat.