Wasted

beast

A good reporter never makes stuff up, unless you work for Global, possibly CFRB, and certainly CKNW. Therefore it was incumbent upon me to do some granular (and glandular) research in light of yesterday’s post on the saga of 11 Brookfield Avenue. As you recall, some idiots paid $770,000 plus $23,000 in tax, for a 16-foot-wide geriatric row house across from the orgy epicentre of funky Queen Street West, Wicked.

I’ll spare you the details but they definitely need more towels. And rubber gloves. Maybe an oscillating hose. Plus much udder cream.

Well, wasted from Wicked, let’s turn now to the other face of real estate. Without a doubt what’s been happening in the hot zone in Toronto ($500K to $800K) ain’t taking place anywhere else in Canada. Even steamy Calgary, where sales and prices are again approaching the unsustainable heights of 2007 (when oil was headed for $147), has nothing to compare with the bidding frenzy of GTA GenXers.

Just about everywhere else, housing is in various stages of tumult. For example, here’s Phil in poor, little Kelowna, where the best-before date was three years ago.

“We sold our house in 2011 to put our equity to work. It’s been a tad slow at times but our investment has been doing great this year. After the kids left we moved to a downtown condo where we rent for $1400. Nice place, gorgeous views, and we walk to work every day. The condo is listed for a little under $500k. I think it’s showed about three times in two years. Apparently the strata is north of $500 a month! The owners, great people, are well aware that they are stuck. We have heard of countless similar stories here. There are about 20 realtor lock boxes by the front door and the developer has 17 units unsold including 3 out 4 penthouses. Thanks for the daily knowledge and entertainment.”

Meanwhile Curtis was having a leak in Edmonton, gazed up and found himself inches away from this:

URINAL

“This gives a whole new meaning to property virgins,” he says. “Just look how they’re flogging new homes in Edmonton. I found this poster above my urinal in a sports pub.”

Over in mid-town Toronto David says his hood is being carpet-bombed with the ad below for yet another condo tower, now being built near the intersection of Young & Eligible (Yonge St. And Eglinton Ave).

“Apparently sales aren’t going too well, judging from this advert. No property taxes and no condo fees for two years – fancy that! And a 5% deposit, to boot. To put things into perspective, there’s a condo going up soon just a block east of this site and another on the other side of Yonge AND a twin-tower complex going up a block south on Eglinton East. Plus that absurd proposed twin-tower 100 storey total condo complex on the NE corner of Y&E, right across the street from this. Do these guys know how to spell SUPPLY?

“Some months from now, despite the central bank’s re-embracing of easy money policies, it will be interesting to see what other buyer ‘incentives’ Minto will be offering to get these skyboxes sold.  I’ll keep an eye on it.”

TO CONDO

Paul’s just landed in Victoria. “Having read your witty, manly column for years now, I knew from day 1 I was going to rent,” he says. “Boy am I happy! My wife and I landed a 2200 square foot home in a desirable area, 20 minutes from everything (including my work – no commute by car). The house has a heated garage, 3 bathrooms (including two sinks in the ensuite and a heated floor), 4 bedrooms, a fully finished basement, beautiful kitchen (all new appliances complete with granite countertops), fully enclosed backyard off the kitchen, etc., only a short distance from great schools.

“The house was built 3 years ago from the ground up. The identical home is located next door behind a shared common wall (insulated for sound). The owner and his family live there. They tore down what was there and built 4400 square feet worth of spanking new home from scratch. Each house is in the 600K range (if you can find a buyer that is).

“So I roll in and, lo and behold, the rent is only $2200 – a little over a third of my net salary. The owner told me I was the only suitable prospective tenant. Why? Because every other Gen X’r with a decent job has already bought a home, leaving frat boys and ping pong tables as the only renters.  A mortgage on this same house, even assuming a 100K downpayment, would be likely double the rent.

“How does this make any sense for the owner to rent at this rate given the cost of having constructed the home from the ground up? I have no idea. More importantly, I don’t care. I have more house than I could have afforded to buy and lots of cash left over to goose up my children’s RESPS, our TFSAs, etc. Oh yeah, and a kick ass espresso machine.”

Yes, I understand the people who come and read this pathetic blog are social misfits, contrarians, musty, weasel-eyed basement-dwellers and bitter disappointments to mothers everywhere, but they also bring perspective. Housing is an over-bought asset, wildly inflated in value and unsupported by income gains or economic growth. As I’ve said so many times, the market is segmenting, with weakness at the top and the bottom and a declining number of buyers chasing a shrinking pool of listings. People who insist on stuffing all their net worth into a house, and taking on fat debt are not balanced, diversified or liquid.

But after last night, trust me, I will never think of liquid in the same way.

167 comments ↓

#1 Randy on 10.25.13 at 5:57 pm

Everyday I understand the housing market…less and less…

#2 Alberta Guy on 10.25.13 at 6:08 pm

I had to go wash my hands after reading that.

#3 1drs on 10.25.13 at 6:08 pm

This continues to make me nervous. I think anyone in their right mind should be nervous given that the magnitude of this potential disaster continues to build. But, some people here in Victoria continue to buy because the writing on the wall is addressed to someone else.

#4 pathcontrolmonk on 10.25.13 at 6:13 pm

Who is that woman Justin Trudeau is snogging?

#5 Trick OR Treat on 10.25.13 at 6:17 pm

Early today Garth. Must be a Halloween party you’re going to? ;-)

#6 Michael on 10.25.13 at 6:22 pm

Victoria is bush league! A house that sells for $600k or rents for $2200? That’s only a slightly overvalued 22.7 price-to-rent ratio. Check out this hood in Vancouver:

These two are on the same block:
You can rent for $1.58/ft…
http://vancouver.en.craigslist.ca/van/apa/4151071412.html

Or buy for $1,225/ft…
http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13238006

The price-to-rent ratio works out to 64.6! And those aren’t cherry-picked examples, a tear-down in that area starts at just under $4M, while the max rental is about $6k/month.

#7 Trick OR Treat on 10.25.13 at 6:25 pm

One of the things i have noticed with young people with regards to housing is….

No matter how much they pay for a home they always tell themselves they will get something for it when they sell, even if it’s less than what they paid for.

With renting, they argue, they will never get anything in return. I try to argue the point of being liquid and the joy of being mobile. But it all falls on deaf ears.

Also they say they have some control over the monthly payment amounts…raising it or lowering it. Which again is perceived as being ‘awesome’.

So there you have it. For them rent is just a black hole with nothing in return (or at least they don’t value the benefits it can offer). A house will always give you some money back.

This is why housing never seems to die.

#8 lee on 10.25.13 at 6:34 pm

Am I missing something here? Did Garth actually go to Wicked and take his clothes off? If he did, he’s cooler than I thought.

#9 Son of Ponzi on 10.25.13 at 6:35 pm

Scaaary!!
Black Tuesday is coming.
Load up on Gold and tuna cans.

#10 Randy Macho Man Savage on 10.25.13 at 6:37 pm

I am looking to invest a little money and would appreciate some advice on a stock/etf that has a yield of 3% or more with a positive outlook going forward. I love a stock I already have, IPL, but instead of buying more, I think it might be wise to diversify a bit. Suggestions?

#11 Behavioral Finance on 10.25.13 at 6:49 pm

Ralph Cramdown

“This I don’t agree with. When the middle class is borrowing to spend on manicures, $6 coffees, foreign vacations and German automobiles, it isn’t exactly a case of borrowing to keep body and soul together. The demand for bad loans is always infinite, it’s the supply that needs a firm rein.”

I think that is highly exaggerated by the media. I think if you put into perspective a lot of debt is created just keep the same standard of living as the previous generations have. Over a long period of time you can see substantial increases in cost of education, healthcare costs, transportation costs, decrease in longevity of goods (hence higher frequency of replacement).

As far as supply of loans is concerned, it is finite as some people will not qualify for loans once banks loan portfolio starts showing loses.

#12 jess on 10.25.13 at 7:11 pm

The recruitment pitch to students on short-term visas must have seemed irresistible: give us your good name and some help in our fraud scheme, and we’ll put money—potentially thousands of dollars—in your wallet before your return trip home.

In charges unsealed late last month in San Diego, FBI agents and their law enforcement partners named dozens of young visa holders from former Soviet-bloc countries who took the bait and became willing co-conspirators in a range of elaborate fraud schemes. In four separate indictments, a federal grand jury laid bare how a Los Angeles-based Armenian crime ring ran scams in L.A. and San Diego that relied on a steady tide of accomplices whose time was short in the U.S. While the crimes themselves were not especially novel—identity theft, bank fraud, tax fraud—the explicit recruitment of co-conspirators with expiring visas was a twist.

“The J-1 visa holders are a commodity in these cases,” said Special Agent Davene Butler, who works in our San Diego Division. She described how a few masterminds enlisted young accomplices to do much of the legwork in their fraud schemes—opening bank accounts and securing apartments and post office boxes to route proceeds from bogus tax returns, for example. By the time a scam came to light, the “foot soldiers” holding J-1 and F-1 visas—which allow foreigners to study and travel in the U.S. for brief periods—would be long gone. “They were essential in the schemes,” Butler said.

http://www.fbi.gov/news/stories/2013/october/international-fraud-ring-recruited-short-term-visa-holders/international-fraud-ring-recruited-short-term-visa-holders

#13 CrowdedElevatorfartz on 10.25.13 at 7:13 pm

….And Vancouver City “Clown-cil” has just approved a 50 story, 500 unit condo tower in downtown Van
(Howe and Pacific).
Total developement cost estimated(by the developer natch) at $200,000,000.
One hopes it will be finished in about 3 years in the middle of a multi year slump.

#14 CrowdedElevatorfartz on 10.25.13 at 7:15 pm

@#10 Randy Macho Man

isnt the WWF a publicly traded company?

#15 Spiltbongwater on 10.25.13 at 7:16 pm

There is a condo development being flogged in Surrey that boasts the windows are shaped like tear drops and guitar picks. That must be so when the people realize they can’t sell for what they bought for the tears are there to spare them from crying. I reckon the guitar pick window is to provide inspiration to the people living their to help pay for their insolvent selves, they can learn the guitar and head over in front of a liquor store and make some spare change.

#16 Keith on 10.25.13 at 7:16 pm

Greater madness … google 1/2 duplex V1033052. Consider the neighbourhood.

#17 Son of Ponzi on 10.25.13 at 7:33 pm

Ralph,
What middle class are you talking about?

#18 Squatter on 10.25.13 at 7:35 pm

This lion is either dead or lacking lionsterone.

#19 Max Jones on 10.25.13 at 7:35 pm

All real estate is local. Never any more true than the bedroom community of Tsawwassen (part of South Delta) south of Vancouver and butting up against the US Border at Point Roberts, Washington.

A regional radio station, KPRI owned by BBC Broadcasting based in Richmond BC (not to be confused with the BBC in the UK), presently has an AM radio station operating out of Ferndale Washington which broadcasts towards Surrey BC. To quell local objections of blanket interference (where powerful radio signals are picked up by your TV, clock radio, cordless phones, computers, etc.) they are now preparing to relocate to Pt. Roberts. Just 1080 feet from the Canada US border.

In their application to the FCC, now approved, they included a map showing Pt. Roberts with a population of 304 US residents inside the 1 volt per meter radiation pattern. They did not show to the FCC the existence of Tsawwassen with some 21,000 Canadian residents also inside the 1 v/m radiation pattern. FCC guidelines would not normally permit a powerful AM radio station is such close proximity to a large urban area.

Once KPRI goes live from their new location in Pt. Roberts the residents of Tsawwassen will be bathing in EMF from this 50,000 watt transmitter 24/7. Tsawwassen already has property value issues associated with a 230 kV power line where just 100 homes have a depressed value. Anybody with kids and concerns about radiation induced leukemia, will be regarding the whole community as a potential toxic “cancer cluster” site.

We should expect the entire community of Tsawwassen to lose an estimated 20% of its property values. Significantly more if your home is adjacent to the Canada US Border and spitting distance from these five 150 foot radio towers.

I actually feel pity for the Customs Agents who have to work at the Canada US Border crossing points just 1100 feet (Canada) to 700 feet (US) north of these towers. Imagine working 8 hours a day in a radiation field of several hundred volts / meter. But at least being in that 50,000 watt near field pattern will have a warming effect on those cold rainy winter days.

Naturally I’d presume that my local real estate agent would inform me of this new project prior to buying in Tsawwassen. Or am I just being naive?

http://notowers.webs.com/

#20 Son of Ponzi on 10.25.13 at 7:40 pm

#15 Spilt
Please don’t use the verb “boasts”.
It can be exclusively used only by licensed Realtors.

#21 TurnerNation on 10.25.13 at 7:41 pm

New Kandos only 5% down. In an area where police stop-and-card pedestrians day and night.
What could be wrong?

http://www.oneparkplacetower.com/

•Incredible 5% down deposit
•Studios from $168,900
•1 Beds from $229,900
•Parking and locker combo only $15,800
•Fantastic development caps at $3,800

#22 live within your means on 10.25.13 at 7:48 pm

OT – as usual. Called my younger sis the other day who lives on the south shore of Mtl. I don’t like to pry but asked her a couple of questions. No – her hubby still hasn’t pursued his OAS claim nor the ‘supposed’ buyer in their condo building who wants to buy their condo. She will try to talk to her hubby this wkend. They both have their heads in the sand. Talked to their daughter the other day & she said the same thing. Unfortunately, she’s not much better. She did send me a video of my grand niece, now 1 yr old, dancing in front of a TV to a classical piece of music. She sure has rhythm. Her mother talks to her in English & her father in French.

Went to my bank this AM and got a new card, after I got scammed yesterday. Then went to Costco to return 575 grams of fat from a vac pack beef tenderloin that I had bought a few days earlier. They reimbursed me $75+ for it tho I only took the fat back.

#23 ILoveCharts on 10.25.13 at 7:48 pm

I’m a bear for my own reasons but sometimes I wonder if some of the other bears are even doing the math. When the bears post numbers that are as ridiculous as the bull numbers, it robs credibility from the rest of us bears.


“So I roll in and, lo and behold, the rent is only $2200……. A mortgage on this same house, even assuming a 100K downpayment, would be likely double the rent.

If he put down $120,000 (20%,) and went with a 5 year fixed at 3.49 on a 30 year amortization then his monthly would be: $2,146.02

#24 GUnit on 10.25.13 at 7:49 pm

Hey Garth, I got a question for you…what are your reputable sources for financial information? What newspapers do you read? I find most of my daily insights comes from this blog…keep up the great work!

#25 LadyInWaiting on 10.25.13 at 7:49 pm

Two items. First, this blog focuses on the “wrinklies” whose total assets are bound up in their homes and the “horny house humpers”, consisting of mostly young, overambitious home-owners (to put it gently), but the group in the middle, with kids, needing a good school, nearby doctor, dentist, vet, library, etc, etc, are definitely NOT mobile. Renting means that you do not or cannot control your home or environment (landlord can remove trees, leave place to deteriorate slowly or sell and tear it down at any time). It is certainly not easy to pick up and re-establish your life. I just wanted to put in a word for those of us in the middle and would welcome comment about this group in the context of our bubble.

Second, many of the condo dwellers that get mentioned in this forum, and there are a lot of them, given the number of highrises and high density complexes in Toronto or Vancouver, want to move-up to a SFH at some point. Many are also starting families and need more space (if you remove the investors from the discussion for a moment) these people are generating enormous demand on the scarce resource that is the SFH. This is a legitimate source of strong demand, being driven by the larger number of folks that elect to purchase a condo first.

#26 not 1st on 10.25.13 at 8:13 pm

Boy these latest RE stories have really churned my stomach in the past few days.

People often gloss over hearing about rates and income to debt levels etc, but when they hear these anecdotes from the ground it is just jaw dropping.

#27 T.O. Bubble Boy on 10.25.13 at 8:14 pm

… was about to comment on housing… but forgot about my “appointment” at Wicked… see ya!

#28 Poloz vs Julie D. on 10.25.13 at 8:18 pm

Low rates here to stay for foreseeable future says Poloz.

Flaherty said yesterday there is no need for him to tinker with the housing market.

Poor Julie at OSFI will only do minor tinkering as H and the gang will toss her if she makes it too difficult to get a home.

Prediction: Toronto prices will match Vancouver’s. Expect the base price of a SFD in the 416 to surpass $1 Million. Seems unbelievable????????? That’s what we here in Vancouver once thought.

#29 Victor V on 10.25.13 at 8:24 pm

#10 Randy Macho Man Savage

If you don’t have preferreds and REITs in your portfolio already, then pick up some CPD and XRE. Both yield over 4% and as has been discussed here in recent weeks, outlook is positive. For what it’s worth, my top REIT pick is H&R but you’re likely better off sticking with the ETF to minimize volatility.

I also own IPL – one of the best performers in my portfolio this past year, so kudos on that pick.

#30 Nemesis on 10.25.13 at 8:36 pm

@Squatter/#18

That would be a Lioness. And she just ate the ‘competition’.

That’s how BigCats work, ya know.

Some Dogz never learn.

#31 not 1st on 10.25.13 at 8:38 pm

Garth, an ETF related question;

Funds that payout in capital gains instead of regular dividends…good or bad?

#32 Yitzhak Rabin on 10.25.13 at 8:41 pm

Good posts lately. More cracks will start to show. Would be good to see you link government employment and the explosion in provincial debt to the future housing meltdown. Manitoba, Quebec and Ontario should be very worried.

#33 TnT on 10.25.13 at 8:48 pm

#25 LadyInWaiting

Renting means that you do not or cannot control your home or environment (landlord can remove trees, leave place to deteriorate slowly or sell and tear it down at any time). It is certainly not easy to pick up and re-establish your life. I just wanted to put in a word for those of us in the middle and would welcome comment about this group in the context of our bubble.

*********

I sold my home and have been renting a 3 bedroom house in the Upper Beaches Toronto with 3 kids, wife, cats and a dog no problem.

Been almost 2 years and it’s awesome, cheap and stable.

What a lot of people don’t realize is the tenants act for (at least Ontario and I am sure elsewhere) makes it a stable environment for renters.

http://www.ontariotenants.ca/index.phtml

It’s not in the best interest of any landlord to aggravate their tenants and risk them vacating a property. No tenants mean no money for them…

#34 Linda Mulligan on 10.25.13 at 9:02 pm

Flyer in our mailbox this week (we are Calgary based) for luxury condos for rent in Applewood ( The Gala – 17 Ave & 68 St SE near Elliston Park). Rentals beginning at $1,275 per month for a one bedroom unit on the first floor for approximately 600 square feet of floor space. Heat, water & sewer are included in the rent. Non-smoking building, no pets. Largest unit for rent – 2 bedrooms & 2 baths – boasts 900+ square feet which runs $1,675 (bottom floor) to $1,745 (top floor) for rent. I think these were supposed to be sold but no takers so they are now being rented out. Don’t know how well they will do even in a super tight rental market, because Applewood is nowhere close to the downtown core where those who can afford luxury rental digs want to be.

#35 Obvious Truth on 10.25.13 at 9:12 pm

# 25

In a perfect world this is the way it works. The problem is that loose money created false demand and wealth. Tighter money reduces entry demand and values go down. When that happens they don’t have equity to move up and it snowballs.

Banks tighten more and it gets worse. Now that temporary home you thought you’d move out of one day or the one in the up and coming area has no up and comers to help you.

Thus the greater fool title.

#36 Don Derc on 10.25.13 at 9:17 pm

Global and CKNW – liars period. Sequel 138 is now sold out and I wish everyone who bought the best of luck – buyers must earn under $85K, the (repayable upon selling) dwn pmnt is covered by the developer so you get 100% financing on a $250K one bedroom (add another $30K if you want a parking spot). Glad to see home prices have dropped 25% in abby and chilliwack, where i will now upgrade. A house for $250K? pinch me….

#37 Obvious Truth on 10.25.13 at 9:28 pm

Wow it’s like wicked for ETF lovers tonight. Awesome.

Pull out an iwm, xli or xlf we have a fun group.

#38 B on 10.25.13 at 9:53 pm

Nothing makes me happier than unloved condos at Yonge and Eg. I hope some of those sites e.g. Redpath/Roehampton don’t get built for years to come. It may be inevitable what is happening in the area but it is a shame as well.

#39 Observation Post: GTA on 10.25.13 at 9:55 pm

#33 It’s not in the best interest of any landlord to aggravate their tenants and risk them vacating a property. No tenants mean no money for them…


This is true. It takes a long time to make up one month’s rent on an empty property. Scores of amateur/accidental landlords are going to learn this the hard way. In any case, in the 905, rents are coming down and landlords are starting to actually – gasp – put a coat of fresh paint on the walls and talk about making tenants happy. It’s about time.

#40 Thoughts on 10.25.13 at 10:06 pm

There was a time when I looked forward to open houses and what I could find… Then I realized the market is crazy and greedy. Now watching my neighbors lose sleep over the inability to move their house. Serenity is when you take yourself out of the game and spend your free time doing things other then looking at houses. Eventually (who knows when)… The market will correct. If you have investments and they are diversified you should be smiling. Our returns have never been better then this year :))))) on track for the retirement plan without much effort and lots of time ahead. Make the best out of your situation. When I think I need more room, first I declutter. Donate stuff it feels good and frees up space in your home and mind. Happiness is found beyond the four walls of the space you live in!

#41 John on 10.25.13 at 10:07 pm

Hmm

Sorry I live in outlying Kelowna. Things aren’t that bad. Most SFH are relatively stable unless you paid something stupid in the past year or two. If you invested in real estate to make money yes you are probably hooped. If you bought a ‘home’ you are probably fine.
To

#42 Correlator on 10.25.13 at 10:14 pm

Financial asset values and real estate values are correlated. Both rely on loose monetary policy and debt. As long as financial markets go up, real estate values will go up along with them.

You will get your long overdue real estate correction at the same time that your balanced portfolio takes dump.

#43 Kreditanstalt on 10.25.13 at 10:16 pm

Come on…this guy in Victoria makes $6,000 a MONTH??

These are NOT normal people…they deserve to pay double that in rent…

This economy sucks for 70% of the population…how about hearing from some real people?

#44 john on 10.25.13 at 10:24 pm

It’s sickening reading posts from realtors on this blog who from what I understand are starving. Many realtors haven’t made a sale in over a year. Many still don’t have a single listing in over a year. Sure some are making sales but the
Majority are not making a single penny. I suspect that realtors that post on this blog are not making money. Many are now looking for a real job. Hungry realtors it’s time you found a real job. As the housing market worsens so will your chance of making money. You know you are not making money. You know you are financially hurting.

#45 NotAGreaterFool on 10.25.13 at 10:27 pm

Anyone know what the point to a “Working With a REALTOR : The Agency Relationship”? As a buyer/tenant, do I need to sign this?

#46 Carpe Diem on 10.25.13 at 10:28 pm

#25 LadyInWaiting

I’m a gen-x. 3 kids. I rent. Love it and landlords are awesome so far. I had a house and now have investments, some in REITs so I can say I owe some RE that generates $$.

I live in a lovely neighborhood. 1/2 hour max to the city core, acreages, trees and awesome soccer and hockey at the village near by. Schools are 90th percentile in the province.

I also believe, although I can afford a place around here, my investments are paying for my rent. I.E I live for free and my capital is not tied to one address.

Sure we would love to find our home, but it has to be just right and not for crazy prices. I won’t pay some boomer their retirement money. Some sheep can do that and be a serf to the banks. I will wait for the prey who needs to sell when the time comes and will gladly pay a fair price.

#47 live within your means on 10.25.13 at 10:29 pm

We both didI’m so glad we don ‘t live in a big city. We both did eons go. When we bought our current home we had a price we were willing to pay. Saw one we liked but it was $5K above what we wanted to pay. A good friend of hubby now lives in it. We like him, but he’s up to his eye balls in debt.

#48 Tiger on 10.25.13 at 10:44 pm

My friend is splitting , he is thinking of buying now instead of renting, that way he can pay himself as in a huge mortgage and not throw money away renting. I resently sold in jan 2013 closed today heart beating hard till close . Would never buy in this market. My friend just doesn’t get it. For me it’s crystal clear . I told him to read your .

#49 Tiger on 10.25.13 at 11:05 pm

Do the math buy 4 years ago 540 now worth840 taxes and m in4 y130 -never mind all other costs.into it for 670 4 more years another 130 plus may need a new ?????? Roof etc don’t forget to pay the real com . Your investment. Your shure make the bank and the city you live in happy!!!! Just my thoughts ! Hope I’m wrong :)do the math ynot

#50 Future Expatriate on 10.25.13 at 11:06 pm

Looks like the same lesbian couple that Fox News in the US touted as a “traditional marriage” couple.

Another “first”, indeed.

#51 omg on 10.25.13 at 11:09 pm

Paul in Victoria who scored a great house for $2,200/m.

Figures that all the other GenXers have already bought so there is nobody to rent – true, but also decent paying jobs are really hard to find in Victoria.

If you do not work for the government, are in health care, or are a accountant or lawyer, your lucky to make $14/hr as manager of a retail outlet.

Of course there were all those $100k per year construction jobs, but they are a lot leaner now.

Last nail in the coffin will be if they legalize pot and put all the small grow-ops out of business.

#52 Tiger on 10.25.13 at 11:26 pm

22# you are a looser, maybe a realtard having a hard times! I take it all back won’t eat that$$$t

#53 Tiger on 10.25.13 at 11:30 pm

Being first, means you never get to look at asses in front of you. Just an observation . But crystal clear!!!!!

#54 Victor V on 10.25.13 at 11:39 pm

Frugal condo owner has ambitious goals … and cash-flow jitters

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/haunted-by-debt-demons/article15091441/

Jenny is rightly proud of her ability to live within her means and save money, too.

Thanks to her financial prudence, she was able to buy a small condo in the Toronto area in 2011 despite her relatively modest salary. She is 36, single and earns about $64,500 a year as a family counsellor, her second career.

Now she’s on a roll. Even though her condo costs are more than half her income, she wants to save up to buy a house at some point.

She would keep her condo as an investment property. She has $20,000 in the bank that she wonders how to deploy.

#55 marco polo on 10.25.13 at 11:41 pm

Although the subject of this blog has been Canadian housing, i’m eagar to hear Garths wider view of other national housing markets in the same state as ours. I’d expect to see the same result of low US interest rates to these international markets. Some that come to mind are Israel and Australia. Seeing a crisis or a market turn in those markets could reflect on our own.
I’m perplexed on what the near term future might bring, higher interest rates? Debt deflation? Where will commodity prices be?

#56 Tiger on 10.25.13 at 11:56 pm

Just see how things can be manipulated

#57 valleyrenter on 10.26.13 at 12:08 am

NE corner of 56 ave and Langley By-Pass, buy a condo and they’ll throw in a Fiat!

#58 prairie person on 10.26.13 at 12:25 am

House below me on the slope was on the mkt for over a year. Realtor ended up buying it. A lot of tradesmen worked on renovating it. Now, it’s for sale. Realtor is living in it. It’ll be interesting to see if the renovations make for a quick sale. Blog dogs keep saying nothing is moving in Victoria. Every time I go out, I see sold signs. I don’t know the numbers of sales over the last few months but just from traveling around the city, I see a lot of bldg going on, mega houses replacing what were good middle class houses. I don’t understand where the money is coming from because an earlier poster is quite right. There are few decent paying jobs in Victoria. Many jobs are part time. Many are paying around 15.00 an hour. Businesses keep closing. It’s a puzzle.

#59 World According to Garth on 10.26.13 at 12:35 am

#42 Kreditanstalt on 10.25.13 at 10:16 pm
Come on…this guy in Victoria makes $6,000 a MONTH??

These are NOT normal people…they deserve to pay double that in rent…

This economy sucks for 70% of the population…how about hearing from some real people?
—————————————————————–

Actually poor Paul robbing Peter (the taxpayer) is probably a Govt worker. And his pay is $10,000 a month not 6,000 (his net after taxes). Some beareufat cat most likely making policy on how YOU must run your life according to the man.

Move along…..nothing to see here sheeeeeeeeeeeeple.

#60 John on 10.26.13 at 1:20 am

My friend is splitting , he is thinking of buying now instead of renting, that way he can pay himself as in a huge mortgage and not throw money away renting. I resently sold in jan 2013 closed today heart beating hard till close . Would never buy in this market. My friend just doesn’t get it. For me it’s crystal clear . I told him to read your .

Seriously???!!! You sold in Jan 13 and are closing today??!!

#61 Ogopogo on 10.26.13 at 1:49 am

Great to see Kelowna get a mention in tonight’s post. I’m always amused when I see pathetic trolls like “Realtor #1” come on here to mock that the “crash” still hasn’t happened. What these sad, dull realtors don’t realize is that the housing correction has been well under way for years in parts of the country, including the Okanagan.

Real estate prices have been on decline here since 2008. Listings languish for years, occasionally disappearing and being re-listed again “fresh”. Of course, for those of us following closely we see through the realtors’ stratagem. Meanwhile, I continue to rent a sweet condo unit much like the one described in tonight’s post (perhaps even in the same building?). Plenty of realtor lock boxes here too and no buyers. My portfolio isn’t quite delivering free rent yet, but we’re close.

This Gen X’er will buck the trend until the collective greed turns to fear. Then and only then we shall vultch.

#62 willworkforpickles on 10.26.13 at 2:39 am

It’s been said that going back to the gold standard is unworkable as there is not enough gold in the world. With the dollar headed for collapse , a new gold standard would be inevitable as no foreign currency at this time could meet the challenge of a world reserve status designation.
Is the US headed for recession and a market crash that will dwarf the 2008 nightmare?….Some think so.
Does anyone listen to Peter Schiff anymore…..Some Do…..>
“Gold was the international reserve before the dollar hegemony. Going back to the gold standard would result in one of the two things: either the price of gold goes up or the price of everything else goes down. Schiff believes that it is much easier to adjust the price of one thing up instead of the price of every other asset down. His expectation is that the gold price will go much higher from here.”

When the dollar collapses, what could countries peg their currency to? The only thing that would make sense to stabilize the dollar and recreate confidence is gold. Gold is the main reserve of the US. The US has 90% of its reserves in gold and no foreign reserves.

Schiff believes there’s going to be a currency crises that will morph into a sovereign debt crisis when the dollar collapses.

Never count out America?

Never count out Gold!

We will all see soon enough. Fear the Fear.

#63 Devore on 10.26.13 at 2:55 am

#42 Kreditanstalt

Come on…this guy in Victoria makes $6,000 a MONTH??

These are NOT normal people…they deserve to pay double that in rent…

This economy sucks for 70% of the population…how about hearing from some real people?

Median household income in Victoria is $80k.

Median.

You need to find some new friends if $6k sounds like a lot for your crowd.

#64 Devore on 10.26.13 at 3:04 am

Speaking of facts…

A mortgage on this same house, even assuming a 100K downpayment, would be likely double the rent.

Assuming? Likely? Or, you know, you could just take 2 minutes out of your life and bounce some numbers off a mortgage calculator. 3.5%/25 year mortgage on $650k with 20% down will run you some $2.5k a month.

Cheap money, it’s like magic.

This is why I keep saying the $800k range is the top for “normal” people, a DINK couple with good jobs can just about afford that if they stretch and get a little creative.

#65 Onthesidelines on 10.26.13 at 3:19 am

#11 Behavioral Finance on 10.25.13 at 6:49 pm

“I think if you put into perspective a lot of debt is created just keep the same standard of living as the previous generations have. ”

Yes, exactly, and this is a point that is sorely missed by many pundits, including Garth. Moreover, while the absurd pricing of realestate in Canada’s major urban centers is out of whack in terms of affordability, I do beleive that this is a world-wide trend that is here to stay. The bottom line is that this generation and those following will be subject to the globalization effect of bringing living standards down as evidenced by the proliferation of matchbox size condos. Good, solid, roomy homes that the working class folks could afford 40 years ago will remain out of reach for most regular people as will many other aspects of living that were once considered an achievable standard of middle class life.

One only needs to spend time in HK or Tokyo to see that future. Or, alternatively, visit Prague and see what were once servants’ quarters now selling for incredible sums as desireable housing.

In another ten or twenty years the standard that this generation is trying to regain will be all but forgotten.

#66 JUNO on 10.26.13 at 3:33 am

Is it safe to bet on the USA ?

http://www.cnn.com/2013/10/25/politics/nsa-snooping-other-countries-spying/

Contract being cut by foriegn government against us companies. IBM is the latest to lose out. MOre to come.

Go Obama,

#67 meslippery on 10.26.13 at 4:17 am

Linda
Non-smoking building, no pets.
I have a dog and smoke.

#68 meslippery on 10.26.13 at 5:13 am

Wicked must be a poor mans playboy mansion.

#69 Axis on 10.26.13 at 5:23 am

#42 Kreditanstalt

Well he doesn’t work with me, my co-workers have all purchased, mostly Brentwood/Saanich. I pay a hair more than half that in rent and don’t feel I deserve to pay more, the property managers seem to like financially secure long termers.

Specialization is a double edged sword, you may do very well or be largely useless.

#70 Multiple Offers on 10.26.13 at 6:45 am

All you low-ball sillies, you’re not really helping!!
The trickster-agent uses your offers to show the Sucker that there is great demand here, Multiple Offers! The trickster-agent being one of high integrity & a keeper of fiduciary responsibility can never tell the Sucker anything about the other offers only that “if you really want the place you better put in at asking or to better guarantee, about a $50k cushion”. The Sucker goes for it not knowing the ONLY other REAL offer was 25% less than asking and 2 further offers were agents (or friends) creating the illusion of multiple offers.

That’s right, all that’s ever really needed by the trickster-agent are only two interested parties and his own creations of a demand which he get’s from a little help from his friends. If the two interested parties show great enthusiasm for the area the show begins & goes & where it ends, nobody knows!!!

I’ll bet that if someone ever investigated the trickster-agent, the investigator would discover that the same names appeared over & over on many of his successful sales! be careful, the deck really is loaded!!

#71 Stephen on 10.26.13 at 7:49 am

You can buy a really nice house here in New Brunswick for a reasonable $250,000. Unfortunately your mortgage payment will consume a big chunk of your unemployment cheque.

#72 George on 10.26.13 at 8:53 am

Vancouver is going to have the world’s first Bitcoin ATM. I think this is awesome. The folks over at Zero Hedge love Bitcoin because they hate fiat currencies issued by the central banks. Note how the article says the FBI has tried to shut down Bitcoin. Anything that the Big Brother authorities don’t like has to be a good thing–it challenges Central Bank’s control of money. Bitcoin is a digital currency and you can pay for things over the internet or even at some bricks and mortar businesses and the business owner doesn’t have to pay any credit card fees so there is a big advantage right there over other digital payment methods like Visa and MasterCard. I’d love to see Bitcoin take a bite out of Visa’s profits. From the Vancouver Sun:

“It’s trading for around $200 but it fluctuates widely, going from a low of $13 to a high of $250 in the past year.

At the Bitcoinacs ATM users will be able to deposit cash in the machine, which has a currency reader like the one that reads bills you feed into transit ticket machines. The cash is exchanged instantly on Canada’s VirtEx exchange for Bitcoins and a deposit is made to the user’s online Bitcoin wallet that can be accessed through a smartphone or any online device.

ATM users can also get cash from the machine in exchange for Bitcoins, reversing the process by sending Bitcoins from their virtual wallet to the ATM, which sells them on the market in real time and dispenses cash. The transaction limit for the ATM is $1,000 a day.

Vancouver is home to a growing number of Bitcoin users and an increasing number of merchants who accept the virtual currency. Among places where you can spend Bitcoin here: Waves and other coffee shops and restaurants; you can pay your landscaping bill with No Limit Landscaping, get a spa treatment with Pacific Bliss Massage or pay for personal training at Krystal Fit Studio.

WordPress.com, maker of the blogging software used bys The Vancouver Sun blogs, is among companies that accept Bitcoin.

“Vancouver has a very strong Bitcoin community,” said Demeter. “There are 50 to 70 people at weekly meetups, there is a lot of interest.

“A lot of people use them to spend around the city and people are using them as an investment. There are also a lot of people who prefer to use Bitcoin rather than a credit card to buy online.”

While at one time it was regarded as only the currency of choice for online black market items like drugs, the recent FBI shutdown of Silk Road that provided the biggest marketplace for such transactions only caused a brief drop in Bitcoin. Bitcoin is a decentralized currency that is neither owned or controlled by any agency or authority. As it has moved from marginal to at least growing acceptance, it is causing headaches for financial regulators.”

http://www.vancouversun.com/technology/personal-tech/Vancouver+host+world+first+Bitcoin/9084958/story.html

#73 Ralph Cramdown on 10.26.13 at 8:54 am

#11 Behavioral Finance — “I think if you put into perspective a lot of debt is created just keep the same standard of living as the previous generations have.”

It doesn’t really matter whether someone is incurring debt to live better than his parents or only to live as well as his parents once did. If he’s incurring debt to live, he’s living beyond his means, and in most cases, will eventually be worse off than if he hadn’t borrowed at all.

The bank that sees that you’ve already got balances on three or four credit cards and grants you another one isn’t exactly helping.

#74 Robert on 10.26.13 at 9:02 am

It’s crazy when you have blinders on. While I agree with the market getting soft there is nothing like home ownership. We bought a bungalow in Mississauga. Gutted it and. Put a secondary suite. We collect 1500 a month rent and life for next to nothing. We put separate entrance sound control separate laundry stainless steel appliances and granite counters. It was rented within a month. We love our home and can never dream of renting. We have some other investments as well. It’s not always black and white. We used the banks leverage and now have income for life. When the property is paid off we will still have income. So we plan to retire in 15 years and rent the whole house ou collect hopefully 3000 after expenses – who cares what happens to the market. What goes up must come down but if you hang in long enough it comes up higher and higher

#75 Ralph Cramdown on 10.26.13 at 9:03 am

#10 Randy Macho Man Savage — “I am looking to invest a little money and would appreciate some advice on a stock/etf that has a yield of 3% or more with a positive outlook going forward.”

If you can’t afford to be in at least 20 stocks, you’d better be a really good stock picker, as the lack of diversification entails a lot of position risk. Stick to ETFs.

But IPL has been a great stock for me as well. For eleven months of the year, anyway. It does throw one a bit of a curveball at tax time.

#76 jerry on 10.26.13 at 9:10 am

My wife reads fifty shades and I read your blogs. It works for us.

#77 Ralph Cramdown on 10.26.13 at 9:31 am

#158 Canadian Watchdog — “So what you’re saying is this is sustainable or that subprime consumer lending is the new normal?”

Nope. My portfolio is structured as far as possible in avoidance of much dependence on the continued spending of the Canadian consumer. I’m not much for the soft landing theory of Canadian residential real estate, and everything flows from that.

#78 Herb on 10.26.13 at 10:06 am

#59 World Acccording to Garth,

thank you for your contribution. This blog was getting dull without the daily dose of Western Moron mud flung at government employees.

#79 Tony on 10.26.13 at 10:10 am

Re: #65 JUNO on 10.26.13 at 3:33 am

The beauty of betting against America is knowing no country will bail them out. America is too big. This is one of the main reasons to profit by betting against America.

#80 TheCatFoodLady on 10.26.13 at 10:14 am

There’s a whiff of desperation in the air in Kingston. If this is the height of the fall housing market, (is it?), realtors must be sweating. It’s moribund. Some weeks ago I’d mentioned a new listing in my neighbourhood – pretty little 2+2 bedroom home but way overpriced at $282,900. A few weeks & a couple of open houses later, they’ve already dropped the priced by $10k. A 900 sq. ft. cracker box around the corner from that one has been listed for months at roughly $229 & just sits… $160-ish might be more in the ballpark. The first one I mentioned… they’d better get serious & drop it to $249,900 to garner interest & be prepared to sell lower. Corner lot, no back yard, I’m no home inspector but even I can see the roof needs redoing.

The selection of properties I’m following in Ottawa – no action, even with price drops of 10%+.

Surprisingly to me, in conversations with family & friends lately, I’m hearing admissions from people I thought had their financial stuff together that it’s getting tight. These are people making good money – multiples more than we have coming in & they’re feeling the strain. They have room to cut back – they lead ‘toy heavy’ lifestyles & while they’re certainly not close to financial hardship or onerous debt loads, I was still surprised.

Here on the wrong side of the tracks in a building with rents below the city average, people are grumbling. And paying rent late & in some cases, trying to move downmarket. Downmarket from here starts getting pretty lean if not outright rough. I keep track of the market – we rent a two bedroom, utilities included in an okay building. So what if we decided we couldn’t afford it? We could drop to a one bedroom, saving maybe $100/month BUT it would take 2-3 years to recoup moving costs. Thankfully, we don’t have to move but for those who think they do – I hope they’ve done the math. Better choices in discretionary spending might serve them better.

Units here aren’t filling as quickly. We should have been full up by the end of August – didn’t happen & the complex is still carrying vacancies. I looked across the REIT’s portfolio, (owned by private REIT) & they’ve got vacancies across the board, in spite of a buying policy that locates them in areas where tenants have little choice. The REIT has noticeable gone cheap. Preventative maintenance isn’t being done & routine repairs are slow & poorly done.

The number of empty storefronts is increasing & empty ones are staying empty longer. Plenty of people the last few weekends were walking around the downtown shopping core but window shopping only – few were carrying anything other than cups of coffee. Getting tougher & tougher out there.

#81 Ralph Cramdown on 10.26.13 at 10:29 am

#71 George — “Vancouver is going to have the world’s first Bitcoin ATM. I think this is awesome.”

I think it’s awesome too, in the same way that I think that a science fiction writer deciding to start a religion based on space aliens, and actually getting it off the ground is awesome.

Back in the real world, the key questions are:
– how much does the machine cost
– what are the service charges
– how many dollars will need to be exchanged for the machine owner to break even?

#82 Raven on 10.26.13 at 10:41 am

Bubble or Bust?

If Canada is in a RE bubble, in every sense of the word, then so is China, Australia, Hong Kong, Norway and possibly Brazil. While the US and Europe are still mired in deflationary spirals, with massive government intervention, with fleeting signs of sporadic growth.
Seems like the two big manufacturing countries like China and Brazil and their natural resource suppliers countries, mainly Canada and Australia, are still bubbly on the RE front. Oblivious to the carnage laid bare in other countries when RE bubbles pop, we continue to reach the stratosphere with our balloons! It appears that the Europeans and Americans ( the two biggest consumer nations) have taken their medicine and will show future growth while the producer nations will take the economic hit yet to come.

Macroeconomically our economies stand divided. Will the US Fed. Reserve keep buying time through Quantitative Easing to allow the massive engine of the US economy to fire on all cylinders or will “The invisible hand of Capitalism” wait for all global RE bubbles to correct before the inequalities in our truly global economy can rebalance through deleveraging?

From this vantage point I would guess that it is we Canadians ( its different here) mentality that will need to correct our imbalances in costs of money and Capitol appreciation in RE. Chasing non existent yield in income property, awaiting Capitol Appreciation, is the sucker in the poker game!

#83 Ralph Cramdown on 10.26.13 at 10:55 am

Paul asks “How does this make any sense for the owner to rent at this rate given the cost of having constructed the home from the ground up?”

It makes sense for the owner to rent it for a few years at whatever rate he can get. As others have pointed out, he’s likely breaking even on cash flow, at least. Note that it hopefully cost him less to build than it’s worth.

The other key factor is tax. If you build a house and sell it, your profit is income, the dreaded “adventure in the nature of trade.” If you rent it for a few years first, your profit is capital gains, saving significant tax.

It should also be noted that while honest builders in this situation will allocate their construction costs equally between their residence and the rental, dishonest ones will attempt to allocate more costs to the rental, shifting some of the capital gains from the rental to the primary residence, where they’re tax free. This is tax fraud, of course.

#84 Tony on 10.26.13 at 10:56 am

Re: #55 marco polo on 10.25.13 at 11:41 pm

Short term rates will go lower, deflation will accelerate. The U.S. dollar will crumble. At some point soon in time commodities will jettison to the upside only to crash for a long period of time after that.

#85 Beach Girl on 10.26.13 at 11:07 am

Well I was under the assumption young Trudeau was not allowed to enter the good old US of A. After admitting he smoke the evil weed. Special waivers? Rules only apply to poor people, one would assume.

#86 BG on 10.26.13 at 11:21 am

#62 Devore

A personal income of 6k / month after tax is way above average.
Don’t mix up household income and personal income.
If I’m not mistaken, the median personal income in Canada is around 40k/45k a year which means around $2800 a month after tax.

It sounds like you hang out with people doing quite well. But that does not change how much the average Joe is making.

#87 Not 1st on 10.26.13 at 11:26 am

Garth isn’t responding to any posts this time. I think he put the blog on auto approve while he went to that Wicked club.

Towel, anyone? — Garth

#88 Doug in London on 10.26.13 at 11:34 am

The housing market in the inner city of Toronto may still be going strong, but that’s not necessarily the case in the suburbs. I don’t follow it myself, but a guy I work with tells me the market around Oshawa has really slowed down in the last few months.

It’s not all doom and gloom for real estate, however. My REIT investments have really appreciated in value over the last 2 weeks. Most likely they are returning to normal after 2 months of colossal kick ass dirt cheap Boxing Week blowoff fire sale prices.

Yes, I understand the people who come and read this pathetic blog are social misfits, contrarians, musty, weasel-eyed basement-dwellers and bitter disappointments to mothers everywhere you say? Garth, you’ve said that before, but I still got a good laugh from reading it again today!

#89 Son of Ponzi on 10.26.13 at 11:35 am

170 K above asking!
But, like in Vancouver:
who’s doing the buying?
Can’t be the property virgins.
Is it HAM, the Germans, the Ruskies, the Persians?
Who is it, I really wanna know.

#90 TheCatFoodLady on 10.26.13 at 11:41 am

Oh dear – you KNOW it’s getting bad out there when our favourite Prudent Pundit had to take a job at Wicked.

Wonder what the dress code is for staff?

Will he accept bit coins for tips?

On a more serious note – here’s some fun reading:

***Are you betting on an inheritance to solve your money problems?***

http://business.financialpost.com/2013/10/25/are-you-betting-on-an-inheritance-to-solve-your-money-problems/?preview=true

Worth the read & a notable point not raised. Much of that ‘inheritance’ money might be required to fund long term care.

#91 Mr. Monday Night on 10.26.13 at 11:50 am

#70 Stephen on 10.26.13 at 7:49 am

You can buy a really nice house here in New Brunswick for a reasonable $250,000.

————————————–

Pass.

#92 [email protected] on 10.26.13 at 12:04 pm

I have a dilemma. Does it make sense to keep any significant amount in cash? Should it be invested in stocks?

#93 Victor V on 10.26.13 at 12:07 pm

U.S. seizes $28 million in bitcoins from man linked to online drug market

http://ca.news.yahoo.com/u-seizes-28-million-bitcoins-015007153.html

Since it began operations in 2011, Silk Road provided an anonymous site where drug dealers, counterfeiters and other criminals could shop for everything from heroin to hit men, according to the Justice Department.

More than 900,000 registered users of the site bought and sold drugs using bitcoins, according to authorities. The currency, which has been around since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking bitcoins to Silk Road.

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

A few blog dogs have been asking about bitcoins. Well here is one of the uglier sides to ponder.

#94 Victor V on 10.26.13 at 12:17 pm

http://www.thestar.com/news/canada/2013/10/25/conservatives_bruised_by_internal_and_external_opposition_hbert.html

But in so doing Segal has also put a different — more serious — face on the growing internal discomfort over the authoritarian style of the current prime minister.

Up until now, that discomfort was mostly voiced by mavericks such as former MP Garth Turner or, in the current Parliament, Brent Rathgeber or by disgraced Conservatives such as — in the case of this week — Duffy and Wallin. For different reasons they mostly have had in common that they had little left to lose by standing up to the prime minister.

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

Will this affair stir the pot and get our bearded leader to reconsider his exile? Blog dogs want to know.

#95 Obvious Truth on 10.26.13 at 12:32 pm

Just read a free paper copy of the globe and saw the article about “Jenny”.

Is that financial planning advice or a kindergarten teacher patting jenny on the back.

How bout the couch potato who hires active mutual fund managers.

I think they missed the first day of class.

I’m sure garth mentioned the industry standard for income dedicated to housing before. It ain’t 50%. At least no advisor I talked to in the last quarter century has advised that.

It’s a mess out there. Going into grade one is going to be a shock. And yes suburbs are slowing along with condos. Always the first sign. But a generation has not seen it.

Rates will go down only temporarily here. I’m not giving my money to the bond market except for a recent trade.

When we stop buying they have to offer us more. It gets passed on. Wonder if anyone told Jenny that my money wants a better return for my risk in bonds.

Wow can things change fast.

#96 World According To Garth on 10.26.13 at 12:36 pm

#77 Herb on 10.26.13 at 10:06 am
#59 World Acccording to Garth,

thank you for your contribution. This blog was getting dull without the daily dose of Western Moron mud flung at government employees.
————————————————–

Perhaps you would like to educate us on whose back it’s going to fall to pay all these pencil pushers their 1,000,000 dollar pensions whose liabilities stand at close to 500,000,000 dollars right now and growing? Maybe we should have a “herb brownie” bake sale what do you think?

#97 World According To Garth on 10.26.13 at 12:41 pm

#80 Ralph Cramdown on 10.26.13 at 10:29 am
#71 George — “Vancouver is going to have the world’s first Bitcoin ATM. I think this is awesome.”

I think it’s awesome too, in the same way that I think that a science fiction writer deciding to start a religion based on space aliens, and actually getting it off the ground is awesome.
————————————————

Interesting you say that considering there is “Mountain Ranges” of evidence of ETs (1000 sightings a day now) and virtually zero evidence of any “guys in cloaks and beards” saying to people “thou shall” this and that.

#98 Ralph Cramdown on 10.26.13 at 12:42 pm

What, pray tell, is the US dollar going to collapse in relation to? Note that your only choices are the Euro, the Yen and the Yuan. You can pick more than one of course, but you still have to explain how or why its major trading partners would allow the dollar to fall, and how and why global investors would flee from the largest, most wealth-producing capital markets on the planet. Where would that money go, exactly?

Wasn’t the theme-du-jour not so long ago that we were going to see currency wars, with countries deliberately devaluing? That didn’t go anywhere either.

I’d advise a little less global macro theorizing and a lot more local micro analyzing. Spend your time and effort trying to find investments that cash flow and whose businesses you understand instead of betting against the richest and most powerful people in the world… the holders of all those dollar-denominated assets.

#99 BG on 10.26.13 at 1:01 pm

I’ve been considering moving into another rental unit here in Montreal.
My current one is cheap for the location, but the quality of the building and the services are just as cheap and this is starting to bother me.

Most residential buildings in Montreal are old low rises, with virtually no sound isolation (you can here each step of your neighbor on his hardwood floor).
These are out of question for me.

The best bet seems to be renting a condo.
But then the $$$ difference between buying and renting becomes less important.Buying becomes more attractive.

The risk of getting stuck in my condo and the lack of freedom really is what’s holding me off shopping for a home.

#100 Victor V on 10.26.13 at 1:53 pm

VIDEO: Don’t expect house prices to keep rising

http://www.theglobeandmail.com/globe-investor/investment-ideas/lets-talk-investing/20130906theglobeandmailctmdavidmadani3thelongviewonhousing720p3000kbpsmp4/article14721810/

#101 TurnerNation on 10.26.13 at 2:22 pm

All this talk about Dudeism following. Let me guess their mantra: My toke is easy? :-)

Anyway, here’s a snapshot of the American Requiem. Coming soon to a town near yours?

http://linhdinhphotos.blogspot.ca/

#102 Nemesis on 10.26.13 at 2:23 pm

“I’d advise a little less global macro theorizing and a lot more local micro analyzing.” – Ralph

Every now and again, Ralph – the Micro gets VeryMacro… or is it vice versa?

…”In January 1980, the late Congress leader Indira Gandhi rode back to power on the back of rising onion prices, waving huge strings of them at campaign rallies and saying that a government has no right to govern if it cannot control onion costs.

The latest onion price rise has also come in the middle of India’s most important religious festival season, an occasion for multi-day feasts and family dinners.”…

[AlJazeera] – India struggles to handle onion crisis: Prices of staple food have quadrupled in recent months; government hopes to increase supply ahead of November elections.

http://www.aljazeera.com/news/asia/2013/10/india-struggles-handle-onion-crisis-2013102614469763971.html

I suppose it’s only a matter of time before we experience our own FoodCrisis… I can see it all now… the angry throngs… the BonFires in Hortons parking lots… effigies of Duffy, et al atop blazing pyres of empty TimBits boxes… a QuestionPeriod dominated by a resurgent Justin Trudeau – flagrantly taunting PM Harper with garlands of HoneyGlazed, chocolate coated and sprinkled confections…

Oh yes, speaking of SprinkledConfections and bonfires… there’s a little something the UrbanPlanners and Developers of NewWestminster forgot to mention in TheQuayside’s prospectus… [talk about, “wrong side of the tracks”!]…

[CBC] – New Westminster condos at risk in rail disaster, says mayor: Mayor and fire chief say railroad companies are too secretive about hazardous materials

…”Thousands of residents in New Westminster’s Quayside condo development could be trapped if there is ever a major railway accident involving dangerous goods at the neighbouring rail yards, the mayor and fire chief say.

New Westminster Mayor Wayne Wright told CBC News this week that he fears a disaster on the scale of what occurred in Lac Megantic, Que.”…

http://www.cbc.ca/news/canada/british-columbia/new-westminster-condos-at-risk-in-rail-disaster-says-mayor-1.2251931

And now for some RealZen!

[PWN] – Brazen thieves take Corvette from Penticton car dealership

…”The Penticton RCMP is seeking public assistance in locating a stolen 2011 Chevrolet Corvette, taken from a local dealership showroom floor overnight Thursday in Penticton. A detachment spokesperson hastened to add that, “Unusually for the Okanagan, this Corvette is not displaying Alberta tags.”…

http://www.pentictonwesternnews.com/news/229331021.html

#103 russell olausen on 10.26.13 at 2:47 pm

Garth is big on smarts and that means he is also a main chancer. Just like his readership. If you are not familiar with Toronto and environs, a lot of this blog is going to seem like a collection of bloated gas bags who are grossly overpaid and are inexplicably well off. Those would be what was formerly know as the “family compact”. They have the cutest names ,by the way. Thats why they live in Toronto. A great place but hayseeds beware. One more, In this gross collection of countries on Earth, Canada is special. After all that really is the question when it comes to what something is worth.

#104 Ralph Cramdown on 10.26.13 at 2:56 pm

Stop it, Nemesis. You’re making me cry. For a bit of comic relief, and so at (boring) parties you can answer the question “Name one good thing Gerald Ford ever did,” try this:

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

#105 Rev Smoking Man on 10.26.13 at 4:12 pm

I am now an ordained minister of the church of Dude.

I do weddings and funerals.

Old man, at Seneca, change my Halloween costume,

Indiana Jones hat, pink Floyd tee shirt, shades, be at the centre bar after grassroots.

Hopefully I make it, already 3 wines over the line

#106 Keith in Calgary on 10.26.13 at 4:28 pm

Well, I’ve been sitting in Calgary for a week since my last trip out to London, Ontario, where my observations I posted here were similar to those of #79 “The Cat Food Lady”. I live ina district here were there are about 15 high end houses for sale at $750K + +……….but, there was one for $625 which sold in 30 days while all the others languished for months. Hint….hint….they all seem to be going off the market, and coming back on, but with different property pimps.

Tomorrow I’m on my way to Albuquerque, New Mexico for a week. That should be interesting…….then in two more weeks time it’s Virginia, Minnesota for a week. Two very realistic RE markets compared to the bubbliscous state of Calgary and Toronto.

#107 sciencemonkey on 10.26.13 at 4:39 pm

Ralph, is the activity of futures trading beneficial to society (society meaning Joe six pack), parasitical, or both?

#108 Smoking Man's Old Man on 10.26.13 at 4:49 pm

Garth, please, no postings for the next little while as my Mom is moving into a care facility at the end of this month, and I’m responsible for selling her condo here in Vancouver and require one more greater fool.

#109 Worse-in-Oz on 10.26.13 at 4:53 pm

Crazy Australian listing du jour:
23 year old gets 2 bedroomer in Sydney for just over a Mil . . . Mum and Dad delighted to have helped her seal the deal!

http://theage.domain.com.au/real-estate-news/milliondollar-first-home-20131026-2w8ch.html

#110 Bob Holmes on 10.26.13 at 5:08 pm

#38 B, I agree, I grew up on Erskine Ave. (about half way between Yonge St. and Redpath Ave.)) between 1949 & 1964. Back then Erskine Ave. was a nice tree-lined street with SFH for (mostly) blue collar families. My first wife and I bought our first house in 1969 from her folks on Roehampton Ave which also was a nice tree-lined street. Of course, nothing stays the same but…!

#111 Shawn on 10.26.13 at 5:19 pm

PENSIONS ACCORDING TO PEOPLE WHO KNOW

World According Garth asks:

Perhaps you would like to educate us on whose back it’s going to fall to pay all these pencil pushers their 1,000,000 dollar pensions whose liabilities stand at close to 500,000,000 dollars right now and growing? Maybe we should have a “herb brownie” bake sale what do you think?

*****************************************
Yes, I am pleased to educate you.

Pensions are funded by contributions that are invested in stocks and bonds.

When an employee retires and begins collecting her million dollar (or whatever) pension the intention is that the pool of money that came from pension contributions of her employer and (sometimes) herself) and which have been earning returns in the market and which will continue to do so will fully pay the pension.

If there is a shortfall the employer and in some cases current employees must make extra payments to fund the shortfall.

Recently many pensions have deficits. But it is important to understand that these deficits are calculated on the assumption that returns will be relatively low. The predicted shortfalls may not actually arise.

Pension contributions have been raised substantially over the past dozen years or so and this will take care of most of the deficits.

For the most part pensions of those retiring today have ALREADY been paid for. So now you know.

Government workers enjoy good salaries and the government makes pension contributions for them and they also contribute a good portion of their pay to contributions (in Alberta employees contribute about 13% of their pay). If the government thinks the pay and benefits are too high they can freeze pay and hire less people.

#112 Shawn on 10.26.13 at 5:28 pm

IMPONDERABLES…

Science Monkey asks:

Ralph, is the activity of futures trading beneficial to society (society meaning Joe six pack), parasitical, or both?
***************************************
By beneficial to society, I think you mean beneficial to you.

I understand Farmers created futures trading a long time ago so get certainty of the price received from crops.

In a free market the best we can say is that if someone is willing to pay for something then it must be beneficial to them.

Is ballet beneficial? (Not to me but it is to patrons who pay)

Is professional sports beneficial (to someone, yes)

fast food? apparently yes

Alcohol? Indeed so.

Futures trading is a zero sum game. It’s not immoral. It’s generally not financially fattening.

Why is it any business of Joe six pack?

Did Joe six pack bail out futures traders? If he did he should fire his politicians.

#113 Ralph Cramdown on 10.26.13 at 5:36 pm

#106 sciencemonkey — “Ralph, is the activity of futures trading beneficial to society?”

I believe it is. Close down the markets and farmers would still want to lock in a future price for a crop, as would the food companies that buy it. You’d just lose the price transparency and the risk mitigation provided by an exchange and clearinghouse. The price transparency itself signals to producers what we need more of, e.g. a farmer deciding whether to plant corn or beans. This is a bad thing? I much prefer it to a quota system, the other traditional way to keep commodity price swings from putting farmers out of business.

The modern solution to the onion corner problem is position limits and reporting.

#114 jess on 10.26.13 at 5:36 pm

In 2012, the IC3 received 289,874 consumer complaints with an adjusted dollar loss of $525,441,1101, which is an 8.3-percent
increase in reported losses since 2011. In recognition of this increase, the IC3 expanded its efforts to inform the general public about online scams by publishing several public service announcements and providing additional tips for Internet consumers.
The IC3’s success has attracted international interest. Canada, the United Kingdom and Germany use the IC3 as a model for similar cybercrime centers. In furtherance of its continuing support of foreign law enforcement, the IC3 prepared dozens ofcountry-specific statistical reports and disseminated hundreds of complaint referrals to FBI Legat offices throughout the world. In 2013, the IC3 will continue to pursue its mission to serve both the online public and law enforcement and regulatory agencies throughout the entire global community.”…

http://www.ic3.gov/media/annualreport/2012_IC3Report.pdf

#115 Westernman on 10.26.13 at 6:54 pm

Comrade Herbie @ # 177,
Nice of you to chirp in, you erudite Socialist you…
I have noticed one thing about you Socialist dirtbags – you’re schemes ALWAYS entail the use of other peoples money…
May I suggest you request your OWN taxes be raised to promote your Marxist utopian fantasies…

#116 Westernman on 10.26.13 at 6:59 pm

Beach Girl @ # 84
Well, well, look who’s back – I assume you served your time at the sanitorium and have been released on your own recognisance – stay on your meds at all times please…

#117 Daisy Mae on 10.26.13 at 7:51 pm

“People who insist on stuffing all their net worth into a house, and taking on fat debt are not balanced….”

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

In more ways than one? ;-)

#118 45north on 10.26.13 at 9:10 pm

TheCatFoodLady: There’s a whiff of desperation in the air in Kingston. If this is the height of the fall housing market, (is it?), realtors must be sweating. It’s moribund. Some weeks ago I’d mentioned a new listing in my neighbourhood – pretty little 2+2 bedroom home but way overpriced at $282,900. A few weeks & a couple of open houses later, they’ve already dropped the priced by $10k.

a 4% drop in price which is not really anything

The number of empty storefronts is increasing & empty ones are staying empty longer.

that’s the sign to watch

Doug in London: the market around Oshawa has really slowed down in the last few months.

there are a lot factories there not the least is the GM Oshawa plant, Jim Flaherty’s riding. In the US the cracks started in the outskirts first.

Keith in Calgary

#119 Who Farted? on 10.26.13 at 9:14 pm

Paul from Victoria, quoted in the post by Garth, wrote:

“So I roll in and, lo and behold, the rent is only $2200 – a little over a third of my net salary. The owner told me I was the only suitable prospective tenant. Why? Because every other Gen X’r with a decent job has already bought a home”

LMFAO

Once again, despite being right on a macro level, Garth has a blog that aims at the 1% if you really get into the nitty gritty of the numbers involved.

How delusional is this kid? If $2200 is a little over a third of his net monthly income, that works out to about a $100,000 a year gross income, give or take. What percentage of this country’s working adults make that much? Let’s be serious here. Maybe now I can understand Garth’s “conservative” roots. After all if you’re a homeless veteran sleeping on the streets because jobs are hard to get its your own damn fault for not working hard enough! Don’t you know jobs paying $100,000 a year are the norm?

To Paul in Victoria: it’s offensively Michael Scott-ish to be that disconnected from reality. Where do you hang out where it’s cool to say “only 2200 a month on rent, what a bargain”? You can’t believe you’re the only prospective tenant? That’s like going to that Harry Rosen clothing store and being amazed you don’t have to wait in a checkout line for 15 minutes to buy a 600 dollar sweater.

It’s a damn shame that Garth’s very astute macro-analysis is often drowned in a sea of neo-con ideology, it makes the content very hard to swallow, despite the useful truth wrapped around in many layers of bullshit. Don’t choke on your dogma, Garth. Stick to examples most of us can identify with, instead of these privileged insolent jerks. What’s next? Tomorrow you’re doing a post on how some dude can’t believe he rented a mansion for only a hundred grand a month? Is this turning into reality-tv, Cribs-style infotainment? Come on Garth, you’re better than that.

Dear Fart: I did not write the letter. Best. — Garth

#120 Nemesis on 10.26.13 at 9:29 pm

@Ralph/#103…

You SlyDog, you! CherryPicking the absolute Zenith of Gerald’s Congressional legislative accomplishments.

Never mind, and blame on a surfeit of DutchLager if you want to… but I’m feeling positively nostalgic right now…

Ergo, it’s SaturdayNightZen/WayBackMachine time for all the SaltyDogz who slept through HistoryClass!…

Where shall we begin!??? …

Oh yes, Gerald’s first act as President:

http://youtu.be/_qC2b6ibOK0

Apparently, it wasn’t a terribly popular decision in some circles…

http://youtu.be/_WlSQpqc9HY

Never mind, though – he made a spectacular comeback of sorts… well – at least it was memorable…

http://youtu.be/w8rg9c4pUrg

Speaking of memories, or rather lack thereof, here are one or two things that Gerald’s presidential debate rehearsal’s had evidently glossed over…

http://youtu.be/WY7_vSDPr6M

http://youtu.be/_FfR64aJ7fI

And yet, oddly enough [or not?] – Gerald will always be best remembered for this [who knew ChewingGumWhileWalking could be difficult, GoFigure?]…

http://youtu.be/jlz0he9rtKw

I do believe I’m going to get “Wasted” now. Something to do with Prague/68…

On the BrighterSide – if I overdo it, there’s always BettyFord’s…

#121 Snake on 10.26.13 at 9:59 pm

London rents are so high it is now cheaper to live in BARCELONA and commute
soon we will be communicating from Seattle to Vancouver

Read more: http://www.dailymail.co.uk/news/article-2477291/London-rents-high-cheaper-live-BARCELONA-commute-heres-.html#ixzz2ispbEsbM

#122 Herb on 10.26.13 at 10:16 pm

#96 World According to Garth,

now look what you’ve done did! You and Western Moron telling those tall stories about the earnings of public servants has made even ETs envious, and now they are coming down in droves to get on government payrolls.

#123 Son of Ponzi on 10.26.13 at 10:19 pm

On my son’s soccer team there is a RE agent and a Financial Advisor.
Both of them not doing well.

#124 Who Farted? on 10.26.13 at 10:33 pm

“Dear Fart: I did not write the letter. Best. — Garth”

Well I know that, Garth, but I’m hoping you’ll pick less alienating examples in the future so that more people can get to the heart of your message and understand it. The last thing you want is to make people feel like the story doesn’t apply to them because the salary of one individual is so high compared to what is typical, especially when he acts like it ain’t a big deal.

The reason I say this is because as we both know the main driver of this entire housing problem isn’t the handful of obscenely-rich people playing around. Their money is elsewhere. No, this situation is made possible by typical Canadians being dumb with their money, because they don’t have a bird’s eye view of the situation and don’t think things through. And that’s why your blog is so valuable. Shit, 2 years ago it inspired me to get what you could call “financially educated”. I didn’t become an accountant or anything, I just pay a lot of attention to my personal finances now and I actually learned how to use Excel.

I hope you don’t think I was attacking you, I just thought that one example was likely to be off-putting, and a lot of your examples are like that. I just want your message to be more palatable to the masses. Because I respect you a lot Garth. I read your book. I know about your political past. This blog might help you get a handful of speaking gigs or whatever, but it’s not likely worth the return-on-time-invested in financial terms. I know you’re doing this because you love this country and you want to help people. You were never cut out to be a politician.

Speaking of which, thanks for the Tax Free Savings Accounts. Being in my late 20s, a lot of people I know are using those things. Even if it’s just to save for future purchases.

#125 i'mjustlookingforsometushbyzztop on 10.26.13 at 10:41 pm

Well… I would have also mentioned the CBC in the list of media purveyors of fairy dust and perfume lashed petard…but that’s just me.

Hey…even the Pakistani press has a lock on what’s happening to CDN rates….what the heck is keeping the CDN media from reporting it?

http://www.brecorder.com/money-a-banking/198/1245163/

CDN real estate will continue to go up based on the huge salaries paid to a certain favoured sector and the influx of strangely rich foriegn nationals. This will be the headline….and skew the ‘averages’ skyward….fluff and mirrors. But of course the lowlights and sheeple will continue to respond to sexualized adverts and buy ‘the specials’ …..hot grotesque and primitive.

Meanwhile….digging deeper into the stealth bull beginning in industrials, materials, energy and resources…..aka the TSX. The possible answer hit me suddenly as I was laying on the couch listening to a massive tropical thunder storm roll past…. that the industrial complex most hated by the Obama administration smells blood.

Forward looking investors are suspecting the president is neutered by his own incompetance….and will no longer be the boot on the neck of progress he has been. My energy and resource picks rose 10% in the past two weeks. At the same time the presidents polling numbers are reaching new daily lows.

The TSX passing 13000 for the first time since July 2011 is a very signifigant signal. I won’t propose any stock picks for ther sake respecting of our resident master. But the past year and some has been interesting.

Someone mentioned IPL…yes…this has been a gem…one of the few that wasn’t crushed by the swoon in 2011. The chart hasn’t faltered….from $9 to $27.
But there have been so many goodies to be had by the smartish investor. since then….. THI …aka Tim Hortons…$25 to $63.

CGI Group has paid big….$15 to $36 ….CP Rail.. $78 to $149…..yes kiddies…it’s good to be a stock picker. Thats an average annualized return of 49%.

I run an average of 50 stocks…..with a heart of brass…but do I enjoy my winters in the tropics….you betcha.

#126 Snake on 10.26.13 at 11:15 pm

#16 Keith on 10.25.13 at 7:16 pm
Greater madness … google 1/2 duplex V1033052. Consider the neighbourhood.
————————————–

What’s wrong with MT pleasant area I loves that area 10 min to Downtown, 15 min to Burnaby & 20 min to Richmond

if u talking about the house it is absurd for that price I went for the open house house is really nice owner lives in the front of the building and selling the back part of the house

if u think that’s bad check out the house right across at 518 east 11th ave

http://thethirtiesgrind.com/2013/08/08/absurd-vancouver-property-august-8th-2013/

#127 Snake on 10.26.13 at 11:54 pm

#16 Keith on 10.25.13 at 7:16 pm
Greater madness … google 1/2 duplex V1033052. Consider the neighbourhood.

#128 Tiger on 10.27.13 at 12:49 am

Don’t rent , pay your self ! This guy is armored with education as well. Going to buy into this market so at leAst there is one more greater fool to purchase your investment

#129 Tiger on 10.27.13 at 12:50 am

Last nice place too b!!!!!

#130 Tiger on 10.27.13 at 1:01 am

It means so you can watch all the sheeple being slautered , debt slaves bank city taxes finally your investment for retirement , wish you luck

#131 Travnik on 10.27.13 at 1:18 am

Regards to #124 (i’mjustlookingforsometushbyzztop)

Boy oh boy would I love to pick your brain over some coffee…solid picks. While you’re in the tropics in the winter, I’m stuck up in Northern Manitoba Brrrrr…lol
I currently am avoiding the RE market and sticking with renting based on this blog. I much prefer the returns of equity, but am no where near the returns you are getting lol

#132 2CentsCdn on 10.27.13 at 4:13 am

#118 Who Farted?
“How delusional is this kid? If $2200 is a little over a third of his net monthly income, that works out to about a $100,000 a year gross income, give or take. What percentage of this country’s working adults make that much?
It’s offensively Michael Scott-ish to be that disconnected from reality. Where do you hang out where it’s cool to say “only 2200 a month on rent, what a bargain”?

Hey “Who Farted” (if that really is your real name : ) maybe the guy does make $100 grand a year (and high five …and way to go!) … but $2200 a month rent is acceptable his reality. Renting for for that much makes the best economic sense for him right now. It may not for you … but it does for him.

But shouldn’t the bigger question is ….. why does it make way more sense for a guy who makes a hundred grand a year to rent over buy right now? Think long and hard about that. He is doing the right thing.

#133 live within your means on 10.27.13 at 4:32 am

#75 jerry on 10.26.13 at 9:10 am
My wife reads fifty shades and I read your blogs. It works for us.
……………

LOL

#134 live within your means on 10.27.13 at 5:30 am

A GF rents a tiny 1 bed apt in Clayton Park (in Halifax) for $650./mo. She’s lived in it for 20+ years. New owners who bought the building several yrs. ago were supposed to renovate all the apts. Didn’t happen so she has replaced fixtures, etc. herself. Her son repainted part of the apt this week. She travels quite a bit & likes the freedom of renting. Rents in HRM are atrocious.

When my sis & I moved here in ’76 we were astounded at the cost of a rental in comparison to what we paid for far superior apts. in Mtl. It hasn’t changed.

Old friend in a great downtown area of the Plateau in Mtl. hasn’t been able to sell her spacious & beautiful 3 bed condo even tho she’s reduced the price. Her 3 children fled the nest years ago and a couple live in other countries.

In my area I’m seeing a lot of houses for sale as well as ones that have a ‘sold’ sign. A new development opened up near us. Only 1 huge house, double garage, etc. under construction.

#135 Squatter on 10.27.13 at 7:53 am

#124 i’mjustlookingforsometushbyzztop:
Hey…even the Pakistani press has a lock on what’s happening to CDN rates….what the heck is keeping the CDN media from reporting it?
******************************
Very simple.
To get good Pakistani news, read the Canadian press and to get good Canadian news, read the Pakistani press!
Didn’t you know about that?

#136 Steven on 10.27.13 at 9:10 am

“So I roll in and, lo and behold, the rent is only $2200 – a little over a third of my net salary. The owner told me I was the only suitable prospective tenant. Why? Because every other Gen X’r with a decent job has already bought a home, leaving frat boys and ping pong tables as the only renters.

Garth if these people are real and living in Canada then I must be living in a different world and country on another time line.

#137 Ripped on 10.27.13 at 9:40 am

#118 Who Farted?

I’ll take that 100K a year average pay job, but I still won’t pay 2G a month rent.

Ripped

#138 CrowdedElevatorfartz on 10.27.13 at 9:55 am

@#133
20+ YEARS in Clayton Park!?!?
Jeez, convicted murders dont have living conditions that bad……..

#139 AK on 10.27.13 at 10:55 am

#78 Tony on 10.26.13 at 10:10 am
Re: #65 JUNO on 10.26.13 at 3:33 am

The beauty of betting against America is knowing no country will bail them out. America is too big. This is one of the main reasons to profit by betting against America.
====================================

Hey Tony,

You are on a roll today, Bud… It’s a good thing that you are betting against America with Monopoly Money. :-)

#140 OttawaMike on 10.27.13 at 11:54 am

Western man reminds me of a mean version of a 1930’s era German politician only without that same sense of humour as the German.

#141 OttawaMike on 10.27.13 at 12:14 pm

on 10.08.13 at 8:34 am
#84 Smoking Man said:
To Marginal and Ottawa Mike

Counter to your chirps from the weekend when I stated basicly shrinks are nothing but theorist, with no science behind them just collective opinions.
————————————————————
Smoking dude,
I agree most of psychiatry is theoretical and we are in danger of over diagnosing and labeling everybody but are you saying that a person suffering from severe mental illness and in psychosis should be allowed to live and let live?
You wouldn’t let granny who is suffering severe dementia or Alzheimer’s live in a back alley in an old refrigerator box so why do we as a society still question the forced treatment of the mentally ill who are placing their own lives and possibly the lives of others in jeopardy?
The costs of lost time to our economy due to lost production due to untreated mental health disorders is staggering. It is time we destigmatize mental illness and have a healthy debate about it in N. America.

Sorry for the delayed reply..

#142 DM in C on 10.27.13 at 12:28 pm

Who Farted: “What percentage of this country’s working adults make that much?”

Alot. Especially in AB. We decided to buy after 6 years of renting in Calgary because that’s exactly what rents were going for in our neck of the woods. Our annual gross is over $150k and we’re nowhere near the 1% ers in this city.

You should get out more.

#143 Mister Obvious on 10.27.13 at 12:31 pm

#7 Trick OR Treat

“A house will always give you some money back.”
—————————-

Unless you are in a negative equity situation or your gain does not exceed closing costs plus interest paid in excess of the rental of equivalent accommodation. And don’t forget to consider the opportunity cost on that same money.

Of course, saying such things in a social situation will immediately out you as a wet blanket. In that case, it’s better if you stick to folklore.

#144 Obvious Truth on 10.27.13 at 1:18 pm

I’ve mentioned tips a few times here as they are well off their bottom and something I watch.

Turns out fed has been buying inflation protected bonds. Take that how you wish but thought I’d share.

Also some have mentioned TSX and breakout. TSX has been positively correlated to the C dollar until recently. They are diverging this time but may be for many reasons.

Again rebalancing using ETFs is the easiest way to take advantage of these moves. You don’t need to be a rocket scientist but you should never be a couch potato investor.

For the US dollar bashers. Only in a safer world do people divest of their Benjamin’s. If the world gets scary they pile in.

Maybe the world is a safer place for now.

Better question is why are people sell CAD.

#145 JL on 10.27.13 at 2:08 pm

#42 Kreditanstalt:

Just because you’re failing in this economy does not mean the majority of people are.

You sound like you’re a fellow Gen Y’er who got a “degree” in sociology or some other “social” science (whatever that means – I thought science was science) and now you’re failing because there are no jobs for B students with pointless degrees.

I’m 30 years old, put myself through University getting a real degree now I own a condo and a rental and am investing in financial assets to balance out my portfolio. I’m not well off by any stretch but I moved out while still in University, live with my girlfriend and own a car. It’s not that difficult.

If Victoria is as bad as you say then leave.

#146 Shawn on 10.27.13 at 2:12 pm

Correlation without Causation and how to Get Rich

Obvious truth just above states:

TSX has been positively correlated to the C dollar until recently. They are diverging this time but may be for many reasons.

******************************************
There is very little rational basis for the TSX to be correlated with the Canadian dollar.

The Canadian resource companies, manufacturers and all exporters benefit from a lower Canadian dollar so that suggests REVERSE correlation. Retailers and importers benefit from a higher dollar. So some correlation explained there.

The Canadian dollar against the U.S. bumps up and down but over the last 200 years has tended to cluster not far from the U.S. dollar.

The TSX meanwhile is up thousands of percent over decades.

Any observed correlation is a mostly a coincidence and certainly not a logical basis for investment.

Do yourself a favor and forget about trends, correlations, patterns and all similar technical “analysis”. Invest in high quality profitable companies where P/E ratios are not obscene and you will do fine. Do so when high quality companies are on sale and you will grow rich. Trade less, Invest more. Think like an owner not a renter your companies.

#147 Daisy Mae on 10.27.13 at 2:19 pm

#143 Mister Obvious: “Of course, saying such things in a social situation will immediately out you as a wet blanket. In that case, it’s better if you stick to folklore.”

**********

I find that, too. Just tell ’em what they want to hear.

#148 not 1st on 10.27.13 at 2:29 pm

The canadian govt has basically given everyone the opportunity to be a millionaire so there is no excuses anymore for claiming poverty or buying lotto tickets or voting NDP.

Take your smoke money and lotto money and coffee money and scrape $20,000 together. Take it out of your RRSP if you have to. Drop it into the TFSA, find an ETF with a 5% yield and DRIP it hard. Add $5500 per year religiously. Doesn’t get easier than that.

#149 not 1st on 10.27.13 at 2:37 pm

It is truly funny how some people think. My friends who both work for the govt have safe comfy jobs with a nice pension plan in the works. Personally, they shun stocks and think of safe investments like their house and RRSPs and GICs.

I made the point that if they are so afraid of the equity market, did they not realize their pension plan is also invested there. Crickets chirping…

#150 Ripped on 10.27.13 at 2:50 pm

#142

“Our annual gross is over $150k ”

Our means x2.. so actually your Joe Ordinary

#151 ALE on 10.27.13 at 3:14 pm

Me Thinks: A really pretentious and annoying way to say “I think.” – urban dictionary.

#152 Future Expatriate on 10.27.13 at 3:27 pm

#79 Ever hear of something called the Fed?

Genius.

Garth must be getting tired of dealing with ignoramuses.

#153 Nemesis on 10.27.13 at 3:45 pm

“How could time go that quickly? It never ceases to amaze me. The other day I was 19, I could fall down and get back up. Now if I fall down you are talking about nine months of physical therapy… make sure you take your vitamins.” – Lou Reed [1942-2013]

http://youtu.be/4be4Az5BM-c

BonusQuote: [on the quality of digitally recorded/reproduced music] “It sounds like s**t.”

#154 TurnerNation on 10.27.13 at 4:16 pm

#107 sciencemonkey on

Save it for the J. Layton School of Economics (whenever it should open).

Joe 6-pack pays the same price for his swill all year ’round, when the brewers hedge their prices for grains, hops, even hydro in the futures markets.

It’s all about Price Discovery. Or maybe Joe would like to ‘discover’ his pint at a higher price?

#155 Tony on 10.27.13 at 4:37 pm

Re: #149 not 1st on 10.27.13 at 2:37 pm

Buffett’s favourite indicator predicts five years of low returns

SCOTT BARLOW

— The Globe and Mail

Published Saturday, Oct. 26, 2013 2:50PM EDT

Last updated Saturday, Oct. 26, 2013 2:55PM EDT

No wonder Warren Buffett’s having trouble finding attractive investment
opportunities. His favourite measure of stock market value suggests
mediocre returns for the S&P 500 for the next five years.

Mr. Buffett’s preferred measure of broad stock market valuations is U.S.
market capitalization as a percentage of gross domestic product. The
scatter chart below uses 23 years of quarterly data (as much as I have
access) to compare the ratio of S&P 500 market cap to GDP against the
average annual return for the ensuing five years.

#156 Tony on 10.27.13 at 4:50 pm

Re: #146 Shawn on 10.27.13 at 2:12 pm

That kind of thinking wiped out a whole generation and ushered in the great depression. Corporate profits are falling, GDP is falling and will continue to fall in America.

GDP is growing. — Garth

#157 jess on 10.27.13 at 4:53 pm

pete the dog signs up for a mba
Watch Newsnight’s investigation, in which Pete obtains his degree

http://www.bbc.co.uk/news/uk-24618786

=======

tp://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539880547

The company is comprised of five entities based in Hong Kong, Canada and the British Virgin Islands. The SEC says at least 400 investors in New York, California and other areas with large Asian-American communities were hustled of more than $20 million. Millions more were taken from investors in Canada, Taiwan, Hong Kong and other countries in Asia.

SEC Halts Pyramid Scheme Targeting Asian-American Communitywww.sec.gov › Newsroom › Press Releases‎CachedOct 17, 2013 – … under business names “CKB” and “CKB168” are at the center of the … Leung portrays herself as a professional investment adviser who will …

movers and shakers indeed!

#158 Renter's Revenge! on 10.27.13 at 5:52 pm

@ ALE:

Me Thinks thou doth protest too much. – Shakespeare

#159 Shawn on 10.27.13 at 6:43 pm

WAIT UNTIL YOU HEAR IT FROM THE HORSE’S MOUTH.

Tony says

Buffett’s favourite indicator predicts five years of low returns.

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

I’ll wait to hear it from Buffett himself and he has said no such thing (not since 2001, that is) and I do know that Buffett very recently said that stocks are the best available long-term investment, far better than bonds.

So don’t believe crap attributed to Buffett, Believe what Buffett himself says.

Sorry Dr. Doom, I mean Tony, your hoped for depression has not arrived yet and certainly has not been predicted by Buffett.

#160 i'mjustlookingforsometushbyzztop on 10.27.13 at 7:17 pm

131 Trav….time spent on fundamental analysis can be daunting and at the same time fraught with risk…many people spend more time on which shoes to wear to the WallMart than they do on their investments.

Stock picking is not luck…it is not art…it is not timing. Stock picking is more profitable than shotgunning an ETF because you take more risk…ergo investing in stocks is essentially risk management.

An ETF can fail because the sector involved can be sideswiped by unforeseen interferances…..ditto an individual stock can fail due to equally unforseen anomalies.

The skill set is to be right more often than you’re wrong. No pro is right 100% of the time…..and being wrong isn’t always due to faulty analysis. Case in point the Harper governments recent goof ball arbitrary ruling against MBT’s sale of Allstream…..or the greed soaked killing the income trust vehicle.

#135…..you noticed that too? Why is CDN news considered toxic by the CDN media while Pakistani news is front page stuff?

#161 Randy Macho Man Savage on 10.27.13 at 7:41 pm

Good job Garth!
http://www.theglobeandmail.com/report-on-business/industry-news/property-report/accuracy-of-canadas-housing-data-under-scrutiny/article15107922/

#162 Kreditanstalt on 10.27.13 at 8:59 pm

#145 JL

I’m nearly twice your age and already have made my pile.

If what you believe to be a typical Canadian income is correct, I’m left wondering how Canadian standards-of-living and spending habits are sustainable…and how any economy in which labour is paid $20-$30-$40/hour and in which personal debt is now 165% of income can be called “productive” is beyond me.

#163 Dm in c on 10.27.13 at 9:21 pm

Ripped #150

Xactly my point. Thx

#164 bob smith on 10.28.13 at 1:46 pm

You and Paul should check your math… mtg payment to buy 600k house with 5 percent down is about 2900, including mtg insurance… that’s more than 2200 but only about 1700 of the initial mtg payments are interest, the rest is principal (ie you get it back if you sell) Paul should buy the place, he’s getting ripped off…

#165 spaceman on 10.28.13 at 2:28 pm

Victoria….

a 3bdr is going for about 425 give or take, a mortgage brings you in at about 1800/mth, with a 10% down. I know, I did it a year ago. 600 is going toward the principle every month, why? cheap rate 3.39.

The rent for same is yes, 2000 or better…. well you do the math…

#166 Vince on 10.28.13 at 2:33 pm

Re #23 ILoveCharts

If he put down $120,000 (20%,) and went with a 5 year fixed at 3.49 on a 30 year amortization then his monthly would be: $2,146.02


You can’t ring-fence your analysis in that manner. The $120,000 would produce $4188/annum in yield (to be exceedingly reasonably I’m using your 3.49%, though higher yields abound) — to be fair, you’d have to back out this opportunity cost of $4188/12 ~ $349/month (curious coincidence only).

$2,146.02 + $349 = $2495.02

I haven’t factored in:
+maintenance costs
+property taxes (say 50-75bps/year)
+that a 30-year mortgage will be significantly more biased to interest payment instead of a 25-year amortization whch is more fair for this analysis.
+lack of mobility to take up better employment or other arbitrage opportunities
+loss of liquidity

#167 Vince on 10.28.13 at 2:58 pm

they have been trying to hock a gaudy condo building at Yonge/Eglinton for the last couple years. A lonely woman occupies a desk in the RioCan tower there…with seemingly nobody ever showing any interest. The price list will do that, as well as the 6-8 year waiting period for completion of construction.

I have a bet with my s/o and several other co-workers that the project will never see the light of day.

Will be a long time before I am proven right (or wrong).

I also have a friend who purchased at ICE condos downtown about 5 years ago. It is _still_ not ready due to various delays including elevator strikes. Buying forward has not only its price risks, but outgrown-my-lifestyle risks.