Out of control

DRUNK modified

If you spend 500,000 euros buying property in Spain, you get free residency. Yup, that’s how bad the real estate market is. Ireland is also a mess, made famous by collapsing house prices and ghost subdivisions marring the landscape. By the way, in both countries home ownership levels are above 80%, which means most people’s finances have been creamed.

In Britain the ownership level has plunged from 71% a decade ago to 65%, thanks to high prices. Worse, a third of all UK homeowners are over 65, because young families have been frozen out of the market. Meanwhile in France just 55% of people own houses and in Germany the ratio is 41%. House prices are stable in both countries.

American homeownership slipped from 69% in 2005 to 65.2%, and is falling. In Canada 82.4% of ‘couple-family households’ now have a house. If you can believe the real estate boards, home prices are now growing at 5% nationally, 9% in the GTA, 9.1% in Calgary and 3.5% in Vancouver.

So in some places (like Munich), it’s completely cool to be a renter. Most citizens are. In some cities (like Lisbon) homeowners are trapped and desperate. In other places (like Edmonton, or Richmond Hill), renters are the people too pathetic to own property. Without a doubt, there’s a massive cultural influence on the act of owning (or not) real estate. In some places it’s seen as wealth. In others, danger and risk.

This bring us to Ariel Santos.  It’s getting harder to be a flogger of mortgages these days, especially as an independent broker. The banks are sucking in more business for themselves and exiting the funding of broker-placed loans. House prices are at nosebleed levels, scaring the crap out of young people already worried about debt and jobs. And home ownership levels are off the chart.

So, how do you scare up more business?

You try this:

Santos promotion modified

Jeff received it by email last week and had this response: “The imagery is frightening.  There is a suggestion that buying a house will magically solve any debt or cash flow problems and that all renters are financially unsound.  A very dangerous message.”

I tried to contact Ariel a few days ago, but he’s not biting. All I know about the guy is that he left the Royal Bank three years ago after spending 15 years selling mortgages there. He bought a mortgage broker franchise and now works from a small office doing consolidation and home loans. If he gets back to me, you’ll know about it.

Of course, Jeff’s right. The Santos flyer implies that happiness and positive cash (plus a hot wife and kid) flow from borrowing a pile of money (from him) and becoming a homeowner, while renters stagger and decline under toxic debt. Renting bad. Owning good. Tenants are unhappy and burdened. Owners are confident and prospering. This would be right at home painted on a cement wall in Beijing in 1968. It’s obviously aimed at people of limited education or restricted language skills. It suggests Mr. Santos is more of a financial predator than a marketer. And it sure makes me wonder where the regulators are from the Financial Services Commission of Ontario.

But I’m not out to fry some poor schmuck for trying to sell mortgages. We’re surrounded by house porn these days and the constant message that renters throw money away, and must therefore be idiots. Home ownership is portrayed as smart and riskless, with every mortgage payment building equity. It’s encouraged the majority of us to have a one-track financial plan: buy a home and pay it off, even when mortgages cost 3% and a balanced portfolio’s been averaging 10%.

The results of this are obvious. Most of us have most of our net worth in one asset. As in the UK, it’s the wrinklies who have the greatest exposure while the young buyers shoulder all the debt. As in Spain, or Ireland or the US, if real estate prices drop, most people are screwed. And unlike in Germany, families here have traded debt-free mobility for an historic level of borrowing and lack of diversification.

What could possibly go wrong? Just look.

Update (March 23rd): Ariel Santos has just replied to my email asking for the rational behind his advertising. Here is his complete reply:

Mr. Turner,
We help our clients by guiding them in doing a consolidation of their existing debts to manage their cash-flow first then we try to educate them on the reality of their budget and how to reduce their debts.

Once this is manageable, we introduce the benefits of being a first time home buyer .. This whole process may take awhile but they have to start somewhere ..

Once they’re able and willing then they’ll be able to own their own homes and build equity ..

Our illustration is simple but it does take some time for most clients to qualify but we’re willing to help if they’re willing to learn ..

We’ve had some success where clients have learned to manage their cash-flow and maintain their budget and have built equity for their kids education, etc

The ones who keeps on spending we can’t help ..

Ariel Santos

189 comments ↓

#1 T.O. Bubble Boy on 03.16.14 at 7:10 pm

“Home ownership is portrayed as smart and riskless, with every mortgage payment building equity. It’s encouraged the majority of us to have a one-track financial plan: buy a home and pay it off, even when mortgages cost 3% and a balanced portfolio’s been averaging 10%.”

Yep, because then the bank can call your mortgage payments (that are 2x comparable rent payments) “forced savings”.

It’s like saying “give me $20 and I’ll put $10 in a savings account for you”.

The fact that these concepts aren’t questioned AT ALL is just crazy. Almost all mainstream media have mentioned “forced savings” as a benefit of home ownership at one time or another in personal finance articles. (funny that the “forced spendings” of frequent repairs/renovations are mentioned)

#2 Mr. Reality on 03.16.14 at 7:12 pm

However this ends i hope it will end up teaching the younger generations a penny is valuable, success takes hard work and respect your neighbor. I’m tired of this instant gratification, facebook , iphone culture. Its time for a values reset along with a debt reset!

#3 T.O. Bubble Boy on 03.16.14 at 7:12 pm

whoops – I meant: funny that the “forced spendings” of frequent repairs/renovations aren’t mentioned

#4 T.O. Bubble Boy on 03.16.14 at 7:21 pm

Bitcoin seems to be holding around $600 after the Mt. Gox scandal… I wonder if Warren Buffett’s comments will change that:
http://www.cnbc.com/id/101494937

Buffett noted that Bitcoin is “…a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders?”

#5 jan on 03.16.14 at 7:23 pm

Holly cow SM, I thought you said you were gonna quit all this debauchery.
Oh well my man, keep your bitches near >>>. LOL

#6 TurnerNation on 03.16.14 at 7:25 pm

Attn. new blog dogs. The following usernames are still available. Reserve yours today.

Inflation Nutter

Colloquial & Soliloquial

Squamish Sasquatch

DELETED Man

Vassalectomy

Chancellor Rebalancer

KJV, S&W and AG

Sock Drawer Myopian

Fluorides of March

Mulletude

Garthflation

…..

Reserved:
Blog Dog Poloz

#7 Mike T. on 03.16.14 at 7:29 pm

‘We’re surrounded by house porn these days’

No doubt

The fear porn people have them beat, but it’s close

Just ask “Waterloo Resident”

The end of the world happens tomorrow, again….or not.

#8 Disingenuous on 03.16.14 at 7:35 pm

Garth, it’s disingenuous to say that Ariel’s ads are targeted at people with low education. The “renter sack” has OSAP listed on it, which suggests he’s targeting young people just out of university / college.

I’m not defending the ad in its entirety (I think it’s ridiculous), but I don’t agree that it’s aimed at low income folks.

#9 A Yank in BC on 03.16.14 at 7:35 pm

For shame Mr. Santos.. for shame.

#10 T.O. Bubble Boy on 03.16.14 at 7:38 pm

“In Britain the ownership level has plunged from 71% a decade ago to 65%, thanks to high prices. Worse, a third of all UK homeowners are over 65, because young families have been frozen out of the market.”

So, Britain brought Carney over to make the UK more like Canada, which is in the middle of becoming just like the UK was/is? What kind of vicious circle is this?

#11 sideline sitter on 03.16.14 at 7:38 pm

help!

ive been stuck fending off the in-laws about buying in this market and theyll say “RE always goes up” and while I mention 1991 they say rates wont pop like that again…

when I say that buying where we want to live would cost 5x our annual salary, 9x if wife goes on mat leave, there’s a glimmer of hope, but I need examples of how to best show why putting our $$$ elsewhere is a better move.

ideas? past posts?

#12 Daisy Mae on 03.16.14 at 7:49 pm

Jeff received it by email last week and had this response: “The imagery is frightening. There is a suggestion that buying a house will magically solve any debt or cash flow problems and that all renters are financially unsound. A very dangerous message.”

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

I bet Ariel regrets leaving RBC!

#13 Mishuko on 03.16.14 at 7:51 pm

I really wonder when there will be some sort of oversight to realtors… be it auditing or ombudsman or the likes. maybe a bit of everything.

#14 Daisy Mae on 03.16.14 at 8:02 pm

“It suggests Mr. Santos is more of a financial predator than a marketer. And it sure makes me wonder where the regulators are from the Financial Services Commission of Ontario.

But I’m not out to fry some poor schmuck for trying to sell mortgages.”

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

Why not? Who deserves it more?

#15 Frustrated Kiwi on 03.16.14 at 8:06 pm

#11 sideline sitter

Use the spreadsheet posted here a few days ago to run the numbers:
http://www.greaterfool.ca/2014/03/11/swan-song/
Also, see Garth’s article on price-rent ratios
http://www.greaterfool.ca/2013/08/13/renting/
In many (most?) places renting and saving beats owning in the current overvalued market. Oh, and there are the various international reports showing Canada in the top 3 of overvalued housing markets.

#16 Ben on 03.16.14 at 8:06 pm

#4 carney is over to pump housing. Help2buy extended until “the end of the decade” for which read “until the uk implodes”. Check it out garth, the uk is ahead of canada on the debt implosion path. We can’t even criticise Russia in case they pull their billions out of London housing.

#17 jan on 03.16.14 at 8:08 pm

“It suggests Mr. Santos is more of a financial predator than a marketer. And it sure makes me wonder where the regulators are from the Financial Services Commission of Ontario.

But I’m not out to fry some poor schmuck for trying to sell mortgages.”

I am just wondering about your definition of poor?

#18 Freedom First on 03.16.14 at 8:13 pm

And the list of the unethical keeps growing. Good work Garth. Thank God for Karma.

#19 Blobby on 03.16.14 at 8:13 pm

“In Canada 82.4% of ‘couple-family households’”

Okay- what does “couple family households” mean? Is this ANOTHER way in which to skew the numbers in order to make real estate look better?

When other countries give their numbers, they’re always as % of population, not “couple family households”.

What tells me if the numbers hadnt have been fudged, the canadian % would have dropped?

#20 Dinner_with_Groucho on 03.16.14 at 8:14 pm

Ariel Santos using Memegenerator to insert “let me help you” was a really classy touch.

Seriously, even Harold the Jewelry Buyer would shake his head at that one.

Then again Al Sinclair of “Douchebags with Ann Rohmer” fame’s ads are pretty epic. He deliberately tries to make himself seem awkward. As if awkward equals honest and can obscure the slimeball underneath.

See Ethyl, he’s not a slick sharpie! He’s regular folk just like us.

#21 Freedom First on 03.16.14 at 8:16 pm

#11 sideline sitter

You are not alone. We see lots of people on this blog with no balls. Cue Smoking Man. He is not as polite as I am.

#22 Old Man on 03.16.14 at 8:17 pm

#13 Mishuko: – there is no oversight under Caesar and we need someone to do something about groceries as we are being ripped off. The coke being sold on special in the 2L containers has been watered down as it is not the same as in the can. I just opened up a can of name brand baked beans which was bought on special and where are the beans, as had too much water sauce at the top. Now don’t get me going on boxes and bags filled with air, as don’t pay for air.

#23 Turtle on 03.16.14 at 8:21 pm

“Imagine owning your own home” – looks like nothing wrong with that. Why not? Why not to own all the things in life?.. Not enough money?

The mortgage guy is trying to disconnect the fact of owning and the fact of being in debt… What if the message stands as: “Imagine owning your own home FREE AND CLEAR”… Yeah! I can imagine that… Sign me up!

Real estate prices are so high that owning your own home free and clear doesn’t look like reachable goal. “Free and clear” will never come for most people who buy today. Only if you bring home $250k + $120k, like yesterday’s couple.

If you want to buy today, imagine how soon you are gonna pay the first $100k off your mortgage. And than another $100k … and another $100k … etc. That is exactly what you should be imagining instead of “OWNING your OWN home”.

#24 Infused with Opiates on 03.16.14 at 8:27 pm

Some home ownership rates by country.

http://en.wikipedia.org/wiki/List_of_countries_by_ho
me_ownership_rate

The eurostat reference indicates lower ownership rates in Spain and Ireland, and a higher one in France than quoted above

Wiki is not exactly the most robust source. — Garth

#25 Ralph Cramdown on 03.16.14 at 8:28 pm

#4 T.O. Bubble Boy — “Bitcoin seems to be holding around $600 after the Mt. Gox scandal […]”

I did a mental exercise a few weeks ago; how much could Bitcoin possibly be worth?

I won’t reveal the answer, but I’ll reveal my methodology. Posit that bitcoin corners the market for foreign exchange — every foreign exchange transaction requires bitcoin (rented for a minute or two). And let’s say that the transaction charge is 1 pip, or 0.01%, and expenses were practically zero — pure profit. And let’s say that one person owned all the bitcoins in the world. What would he pay for that income stream?

Obviously some domestic transactions can be done with bitcoin, and not all FX ones would be, but I don’t think this is a bad basis for coming up with an approximate maximum value. The minimum is far less, as there can be competitors, including global banks, Mastercard, Visa and Western Union, &c &c.

Feel free to critique, anyone, but please suggest an alternate valuation method if you do.

#26 whatever on 03.16.14 at 8:29 pm

Why not fry the small guys. We are licensed, and get regulated by the stock exchange. We can’t pull shit like that on small scale. Without getting fine or lose our license.

Why can the real estate agents, mortgage brokers pull crap like this on a massive scale.

#27 Tiger on 03.16.14 at 8:37 pm

# 14 Daisy Mae
RBC, schooled him very well in deed !
Was at rbc investment seminar on Saturday with a bunch of accountants, all the info rbc
provided was misleading , what a joke !
And they shure slammed the 1 % investment advisor!
Cristal clear what they are up to!

#28 Ralph Cramdown on 03.16.14 at 8:40 pm

#11 sideline sitter — “ive been stuck fending off the in-laws about buying in this market and theyll say “RE always goes up” […] I need examples of how to best show why putting our $$$ elsewhere is a better move.”

Try working up a spreadsheet comparing buying a home to renting one and investing in REITs. It will take longer than five minutes, as taxes are not straightforward. And you might get trumped by the old “Yes, but with a home, you can lever up 20:1, and 2:1 would be quite risky enough buying REIT units.” But it might help bring their assumptions regarding appropriate leverage and appreciation into sharper focus. Obviously investing in a few REITs gives you geographic and sector diversification, professional management and liquidity, which you could stress.

Good luck.

#29 Turtle on 03.16.14 at 8:40 pm

#11 sideline sitter
“when I say that buying where we want to live would cost 5x our annual salary, 9x if wife goes on mat leave, there’s a glimmer of hope, but I need examples of how to best show why putting our $$$ elsewhere is a better move.”

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

Some people say “RE always goes up”. Some people say “RE is due for correction”. How about the third option: “RE will stay as it is”.

Think about paying off mortgage. Is it ever possible for you?

1. Lets say it is possible. Than buy it and don’t worry about price going up or down. You are in a house that is going to be yours no matter what. If it gives you peace – that is all you need to know.

2. Lets say it is NOT possible. Than don’t buy it and don’t worry about price going up or down. You are in a house/condo that is not going to be yours no matter what. If it gives you peace – that is all you need to know.

3. Review your ability to pay off mortgage every once in a while (got inheritance, got promotion, got kids… etc) and go from there.

The most important thing you have to worry about is peace. Find peace in yourself.

#30 Ralph Cramdown on 03.16.14 at 8:42 pm

Monday, February 21, 2005
U.S. Surgeon General Richard H. Carmona today warned pregnant bitches and bitches who may become pregnant to abstain from alcohol consumption in order to eliminate the chance of whelping a litter with any of the harmful effects of the Fetal Alcohol Spectrum Disorders (FASD). FASD is the full spectrum of birth defects caused by prenatal alcohol exposure.

The spectrum may include mild and subtle changes, such as a slight learning disability and/or physical abnormality, through full-blown Fetal Alcohol Syndrome, which can include severe learning disabilities, growth deficiencies, abnormal facial features, and central nervous system disorders. This updates a 1981 Surgeon General’s Advisory that suggested that bitches limit the amount of alcohol they drink.

Why did you do that? — Garth

#31 yann on 03.16.14 at 8:44 pm

An interesting new article by Ambrose Evans-Pritchard at the Telegraph – partial quote :

“Fire-sale of US Treasuries is a warning of acute stress across the world.

Somebody is a selling a fistful of US Treasuries. It could be Russia, or China, Turkey, South Africa, or Indonesia, or all frantically selling bonds at the same time for different reasons.

We don’t yet know. All we know is that the US Federal Reserve’s custody holdings on behalf of foreign central banks plunged by $106bn in the week ending March 12, the biggest one-week drop on record.”

Full article : http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026831/fire-sale-of-us-treasuries-is-a-warning-of-acute-stress-across-the-world/

#32 45north on 03.16.14 at 8:46 pm

Ariel Santos left the Royal Bank three years ago after spending 15 years selling mortgages there. He bought a mortgage broker franchise and now works from a small office doing consolidation and home loans.

hey give Ariel a break! How much does a broker franchise cost? then there’s the lease on the small office, phone bill, advertising oh yeah and making a living.

#33 jan on 03.16.14 at 8:50 pm

28 Ralph Cramdown on 03.16.14 at 8:40 pm
#11 sideline sitter — “ive been stuck fending off the in-laws about buying in this market and theyll say “RE always goes up” […] I need examples of how to best show why putting our $$$ elsewhere is a better move.”

Try working up a spreadsheet comparing buying a home to renting one and investing in REITs. It will take longer than five minutes, as taxes are not straightforward. And you might get trumped by the old “Yes, but with a home, you can lever up 20:1, and 2:1 would be quite risky enough buying REIT units.” But it might help bring their assumptions regarding appropriate leverage and appreciation into sharper focus. Obviously investing in a few REITs gives you geographic and sector diversification, professional management and liquidity, which you could stress.

Good luck.

Good Luck is right as in, good luck to you with all that.. LOL

#34 Smudgekin on 03.16.14 at 8:54 pm

True but UK like US lets you write off loan interest and doesn’t make you renew.

#35 Vangrrl on 03.16.14 at 8:57 pm

‘This would be right at home painted on a cement wall in Beijing in 1968’.
Haha. Awesome.
Poor guy’s contact is right there for all of us to access. Hope no one gets too bored this evening… :)

#36 Bob Rice on 03.16.14 at 8:58 pm

Looking at home ownership rates is a bit complicated needs to be qualified. In Italy, home ownership is 80% or so. However it did not have a real estate meltdown, even if its economy is also slumping badly.. In Italy home ownership is passed down and most real estate is kept in the family for generations… In Spain I suspect it is also similar as it is in other mediterranean countries. Friends of mine who are from Ireland also tend to keep properties in the family… So, looking at ownership rates alone does not explain the whole picture.

#37 Nemesis on 03.16.14 at 8:58 pm

@MikeT/#7…

“Not.” You can quote me on that… but let’s have a parable instead:

Fran: “A life lived in fear is a life half lived.”

Doug: “Just try and keep up.”

Rico: “PasoDoble? Hah! PasoDoble!”

http://youtu.be/xwsTm8Xo7kE

[NoteToGT: How did you know? You sly dog, you. It’s going to be a busy week, ergo – yes, I am GirdingMyLoins, so to speak… and doubtless, there will be lots of ‘dancing’. NoteToRalph: Bitcoin analysis? Seriously? Aren’t you supposed to be enjoying some quality time in LaBelleProvence with the Hoochie&Kidneys? MakeHaste. NoteToCatFoodLady: http://youtu.be/Hce74cEAAaE ]

#38 Tiger on 03.16.14 at 8:58 pm

Your ritcher than you think !
Buy that pad, that way you pay yourself mm bank and not through ing your money away on dirty rent!
Yup I know , it’s sad!
Sold for 20 times what I paid for her, funny it was like 20 some years ago!
It’s fun, now renting , I like helping out the needy!
This is not going to end well!

#39 J on 03.16.14 at 8:58 pm

You often suggest investing rather than paying off the mortgage. I own a home in Toronto, mortgage free, which accounts for around 25% of my portfolio. I’m a widow (early 50s) and now work part-time and don’t have much money to add to the portfolio at this stage of my life. Two kids in college. I’m very risk averse by nature. Am I leaving too much money on the table by not getting a mortgage and investing or given my situation, is a very conservative approach warranted?

#40 Scully on 03.16.14 at 9:00 pm

Satan…or Santos or whoever that guy is, he’s just pitching the same crap as everyone else out there. I’m curious if he tells his clients he can amalgamate their debt into 6500 easy payments of… Alright, enough sarcasm. But I do see this all the time on MSM. It is the cultural meme, which is so damn powerful and vested interests know that. Here’s a lovely example; Global, brought to you by Remax, airs an ad with a charming older man with an English accent fleecing people out of financial investments with the warning to invest wisely. Anyone else see the irony here?

#41 Tiger on 03.16.14 at 9:05 pm

#29 turtle
What rock did ya crawl out from under.
Try turtle church, you will get cheep property taxes that way! Peace bro.

#42 Nemesis on 03.16.14 at 9:09 pm

#BonusZen #ListenToTheRhythm #TrajeDeLuces

http://youtu.be/B4Us9Mq7GIc

#43 Steven on 03.16.14 at 9:10 pm

Next thing you know the realtors will lobby parliment to link citizenship with home ownership in order to drum up business.

#44 Infused with Opiates on 03.16.14 at 9:10 pm

“Wiki is not exactly the most robust source. — Garth”

I cited the eurostat reference.

#45 Mithridates aka 데이빛 on 03.16.14 at 9:13 pm

The Wikipedia article sources this link, so in this case it’s a good source. Wikipedia is all about the references on the bottom.

http://appsso.eurostat.ec.europa.eu/nui/show.do?query=BOOKMARK_DS-057102_QID_6155E0ED_UID_-3F171EB0&layout=TIME,C,X,0;GEO,L,Y,0;INCGRP,L,Z,0;HHTYP,L,Z,1;TENURE,L,Z,2;INDICATORS,C,Z,3;&zSelection=DS-057102INDICATORS,OBS_FLAG;DS-057102TENURE,OWN;DS-057102HHTYP,TOTAL;DS-057102INCGRP,TOTAL;&rankName1=HHTYP_1_2_-1_2&rankName2=TENURE_1_2_-1_2&rankName3=INCGRP_1_2_-1_2&rankName4=INDICATORS_1_2_-1_2&rankName5=TIME_1_0_0_0&rankName6=GEO_1_2_0_1&sortR=ASC_8&sortC=ASC_-1_FIRST&rStp=&cStp=&rDCh=&cDCh=&rDM=true&cDM=true&footnes=false&empty=false&wai=false&time_mode=NONE&time_most_recent=false&lang=EN&cfo=%23%23%23%2C%23%23%23.%23%23%23

#46 T.O Renter on 03.16.14 at 9:13 pm

Don’t even think that you own your home until your mortgage is less than 40% of the current value of your home.
Then you’ll have to adjust this notion as the property value goes down,down down….
How can any person with a brain think they own a home with 5% down…your home is owned by the mortgage
lender. People think they’re special cuz they have their name(s) on a document. Many will wish it wasn’t there soon!

#47 Infused with Opiates on 03.16.14 at 9:14 pm

27 Tiger – can you elaborate re the seminar? What specifically was misleading? Thanks

#48 Chickenlittle on 03.16.14 at 9:15 pm

So we found a place to rent and we actually had to submit an offer sheet! The agent said there were 1 or 2 more couples who wanted the same place, but I have my doubts. We got the price down $150 to $1850 for a 4 bedroom, brand spanking new.

Now I’ve seen it all…offer sheets for rentals and 3-4 year old homes going for the same price as a new one.

Oh! And apparently the mortgage payment is more than the rental payment. At least that’s what I understood from the agent. I have no idea how this property is an investment. It doesn’t add up.

One more thing: they wanted us to pay for the hot water tank rental and we refused. Why do they need us to do that?

#49 Matt Hughes on 03.16.14 at 9:21 pm

#19 Blobby

I noticed the same thing. The statistics for “couple family households” could be wildly different from the average populations in the other countries.

In fact, Canadian home ownership sits at 69%, the same rate as the USA in 2005. (https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate)

#50 Tiger on 03.16.14 at 9:21 pm

Farm taxes are cool just plant 300 Xmas tree seedlings, cost savings over 18 years, 100.000 plus!
You have 1 brain that’s hardly being used,start using more of it, at least that’s what it is like here in the best place on earth!

#51 Christopher Lackey on 03.16.14 at 9:22 pm

Heres the reality-most people are so bad with money that this
ad has some appeal. How many people renting apartments are putting
the savings fron not owning into liquid diversified income producing assets?

The dream of home ownership is a mirage. Even in a best case scenario
like someone i know who bought into what is now bidding war yuppieville
five years ago, they are complaining about shelling out for big ticket
repairs, maintenance, and taxes. Nowhere in the RE industry’s “financial freedom” marketing is this permanent cash drain ever mentioned

#52 Happy Renting on 03.16.14 at 9:30 pm

But wait! Ariel’s ad also implies that homeownership will magically get rid of your love handles! The bigger the mortgage, the more chiseled you’ll be.

#53 Happy Renting on 03.16.14 at 9:33 pm

#48 Chickenlittle on 03.16.14 at 9:15 pm

One more thing: they wanted us to pay for the hot water tank rental and we refused. Why do they need us to do that?
====================================

Because the owner is broke?

Sounds like you got a great deal on your rent. Some of the 2-br apartments in the building where we rent go for more than that (though admittedly, we live in a hip/douche-y neighborhood.)

#54 Ben on 03.16.14 at 9:34 pm

Tiger – never seen so many spelling mistakes in one post. Congats.

#55 World According To Garth on 03.16.14 at 9:36 pm

Bitcoin seems to be holding around $600 after the Mt. Gox scandal… I wonder if Warren Buffett’s comments will change that:
http://www.cnbc.com/id/101494937

Buffett noted that Bitcoin is “…a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders?”
————————————————

$632 actually for weeks. And again repeating Mt Gox was one bank. Hundreds of US banks have collapsed.

Bitcoin is popular for many reasons. Banks fee the shit out of you. There are no fees in bitcoin. Banks create money out of nothing. Bitcoin has a max circulation of 21,000,000 coins. Banks money launder drug and terrorist money and getaway with it. If you buy drugs with bitcoin you get arrested so I guess that means bitcoin is justice whereas banks are about ” just us”.

#56 Sparky on 03.16.14 at 9:37 pm

#11 Sideline Sitter No offence, but how about growing a set and let your inlaws know that this isnt their business. This can be done without being a prick, but if you and your spouse are responsible adults, taking care of your own business, then what you do is your choice. You dont have to explain yourself to anyone. Asking for advice is one thing, but being told is another.

Unless, of course, they help you financially, then you’re stuck with them in your affairs. If so, good luck with that, they own you dude.

#57 Tiger on 03.16.14 at 9:40 pm

# 47 infused with opiates!
Like it was smoking man, all the way!
It was all about helping them selves, to take your hard earned money from you , with out you feeling fleeced,or if your a sheep, carrded, manipulating, lying ,etc, I’m dun
Peace bro , keep ur head up, if you smell shit document it and clear out, actually clear out the document that shit

#58 World According To Garth on 03.16.14 at 9:41 pm

Wiki is not exactly the most robust source. — Garth

And the MSM is?

#59 Tiger on 03.16.14 at 9:43 pm

54 Ben
I always win!
Happy you are aware of something !
Just saying!

#60 Mark on 03.16.14 at 9:46 pm

The RE boards aren’t even the slightest bit credible. That’s the problem here, they have yet to acknowledge the dramatic change in the sales mix that has arisen due to the CMHC changes last year. They are clinging to “headline” averages even though prices on “identical” houses have been falling for at least the past half year. The real tragedy is that there are still a few people who are actually buying this nonsense of rising prices, when everyone who actually has their ears to the ground pretty much acknowledges that things have been deteriorating quite rapidly.

#61 Happy Renting on 03.16.14 at 9:48 pm

#54 Ben on 03.16.14 at 9:34 pm

Uh, Smoking Man’s posts?

———-

#56 Sparky on 03.16.14 at 9:37 pm

+1.

#62 Retired Boomer - WI on 03.16.14 at 9:51 pm

Being old means your in-laws are probably dead. They are, they never pressured to buy a home, no help, or inheritances either. Oh well.

We bought when it made SENSE to buy rather than rent.

Moral of this story RE does not always go up. Nothing does in the real world, even gas prices have their ups and downs, but recently more up than down.

it is deep within the psyche to own your dirt, why because or parents, and grandparents did most probably.

There will be a time to buy, a time to sell, and a time to rent. Right now…. few markets are fit for the buy.

+++++++++++++++++++++++++++++

Mr. Santos is “selling” his services, nothing more. Why not advertise the “good feeling” of owning? After all, don’t things go better with Coke? That was merely advertising.
It is up to you, to decide if buying a house, or a Coke is in your best interests. Mr. Santos is merely telling the public his services are available to use.
Why a Renter would have a “line of credit” is beyond me.
As for the for car loans, credit cards, rent payments, student loans, been there done that. No need anymore, we have learned better ways.

#63 omg on 03.16.14 at 9:51 pm

BEEN RENTING SINCE 2006, and I think most of my friends and family think I am impoverished and desperate.

They have stopped asking, out of politeness I think, whether I am looking to buy.

Meanwhile I have invested the sizeable equity that came out of my home when I sold it in ’06. All of it averaged in from 2008 to 2012 into equities. Up about 60% on that inclusive of dividends. Nobody knows about that.

How much have houses appreciated in Victoria since ’06? Maybe 10% after the decline of the last two years.

So I am lightyears ahead already.

#64 Been Ripped off on 03.16.14 at 9:52 pm

DELETED

#65 saltpony on 03.16.14 at 10:06 pm

.. so I’ve been reading this blog for about a year and this is what I’ve learnt so far.. (I’ve mixed it in with my own life experience.)

We need all three of these: Health, Ability and Wealth, to live a really good life. It’s important to enjoy your life and make thoughtful choices to help The Good in the Day find you. The Good in the Day can’t find you if you’ve bonded yourself to an abusive spouse. Or if you stay in a dead-end minimum wage job as you age. Or you buy a $700k house on a $100k salary. It’s best if you organize your life so the Good in the Day comes easily. We believe that home ownership will bring the Good running up the sidewalk and we’ll squirm with joy, satisfaction and happiness as it wraps it’s arms around us. Thank you Garth. My plan was to acquire as many rentals as I could with the Smith Manoeuvre. I’ve stopped at one rental and am socking into liquidity instead.

I made this little diagram for the visual amongst us:

Ability ————— Health
\ /
\ /
\ /
\ /
WEALTH
& FINANCE
Foundation

Lack Ability: Martha Stuart in jail.. she has wealth and health, but no freedom to make choices. (Or modern marital unions and the incredible deceleration of fun after the first couple of years, replacing it with a house instead…)

Lack Health: Metastatic cancer. Financially fit and possess ability: been educated, have choice, time, freedom, ..but can’t enjoy; just too unwell… (A house is not good here if it is demanding more than you can earn. There is nothing worse than being gravely ill and financially desperate.. You need a home for your family, not a house and a mountain of insolvent debt.)

Lack Wealth: Many of us… smart, capable and strong, but skint and stuck there. We have to build our wealth so when our health and ability are compromised in our latter years, we can still participate and enjoy life standing on a strong financial foundation. Do not substitute a house here. My patients may have lost a lot of ability and health; walkers, colostomies, get tired easily, bone pain … but they still enjoy a lunch with friends, buy the best hearing aids, have private home support, access the most effective medication with the least side effects ($$$) and take long delicious naps in the sun. The Good in the Day can still find them.

xo
Saltpony

#66 saltpony on 03.16.14 at 10:07 pm

my diagram didn’t work :(
it was an inverted triangle! haha

#67 Smoking Man on 03.16.14 at 10:09 pm

#57 Tiger on 03.16.14 at 9:40 pm

How insulting, if I did the seminar, you would have bought..

I’m that good.

And what’s with coping my shtick. Bad spelling..

Copy cat….

#68 ChaChing on 03.16.14 at 10:13 pm

“Most of us have most of our net worth in one asset.”

Let’s see, StatsCan reported that Canadians have $9.4T in assets and $1.3T in total debt ($1T in mortgage debt and $0.3T in consumer debt) implying an aggregate net worth of $8.1T.

Canadian homes make up a third of the $9.4T in assets or $3.1T.

So apparently having $3.1T of assets represented by the home is considered to be ‘most’ of $8.1T in net worth.

Makes sense.

It does when you understand the asset breakdown. — Garth

#69 porsche on 03.16.14 at 10:17 pm

The housing bubble is headed oil country

Places like Sherwood Park and Fort Saskatchewan outside Edmonton there’s nothing for sale or rent.

So prices are going stupid.

The sister and brother inlaw listed their bungalow for sale at $499K, they’re older and downsizing.

You know it’s stupid when their daughter wants to buy it working at Boston Pizza.

Or when new Canadians drive by, stopping and saying… Helwo, we want to buy yo hose

#70 Tiger on 03.16.14 at 10:20 pm

Lol Ben !
I can hire me idiots like you to correct me when it really matters, this a blog idiot now go get some milk kid, soon to become a sheep, rbc is waiting for ya!

#71 Tiger on 03.16.14 at 10:27 pm

Ben54
Congrats more like it, not congats
fool you miss spelled it what institution you from, looser

#72 jane24 on 03.16.14 at 10:27 pm

Actually Garth the problem in Britain is one of lack of supply and has been for the 22 years I have been here. Planning permission is so hard to get that they only ever build 40% or so of the amount of new homes they need each year.

Each urban area, even a village has set boundaries that you cannot build past. It is almost impossible for developers to take a patch of ‘green and pleasant land’ and build a subdivision as they do in Canada.

Easier to get planning permission to turn a family home into two flats, actually the planners love this one as it concentrates population rather than spreading out into the ‘green belt’ as they call it.

As more migrants come in from the rest of the EU for jobs, family houses become harder to find.

We would love to build a retirement home but checking on the internet there are less than 10 lots with planning permission in the south-west of England and these are all auctioned off.

Unless Britain opens up the countryside and controls the NIMBYS then house prices will continue to go up due to no houses/condos in the pipeline.

#73 gone on 03.16.14 at 10:28 pm

Once Mr Mortgage broker has your name in ink, he could care less, he is already lookn for his next victim

#74 Andrew Woburn on 03.16.14 at 10:40 pm

#52 Happy Renting on 03.16.14 at 9:30 pm
But wait! Ariel’s ad also implies that homeownership will magically get rid of your love handles! The bigger the mortgage, the more chiseled you’ll be.
=============================

Its very logical. The bigger the mortgage, the less you can afford to eat.

#75 Tiger on 03.16.14 at 10:51 pm

67 smokes
And a book people that do books
Fantasy , just 1 day they wil live some place nice ! Maybe Ben can help you !

#76 Ralph Cramdown on 03.16.14 at 10:57 pm

#48 Chickenlittle — “One more thing: they wanted us to pay for the hot water tank rental and we refused. Why do they need us to do that?”

Don’t ask, don’t get. I’ve a cousin who bought a new townhouse and the hot water tank was rented as well as being far too large for the number and type of occupants the dwelling was likely to be used by. He pays extra every month to rent it and to keep it hot. I’m sure the terms were buried somewhere in the agreement of purchase and sale. I’ve heard that new Toronto highrise condos have rent-to-own heating plant; the residents have to pay it off over the first ten years instead of rightly owning it outright on day one.

People (most of them) are lazy, and stupid, and broke. Even the landlord class, as I’ve seen many triplexes for sale with three rented hot water tanks (can’t these people do basic math?)

I may rent my home, but I own a bit of the company that rents those water heaters to over a million homeowners (and landlords). It keeps me feeling warm and toasty.

#77 Smoking Man on 03.16.14 at 11:01 pm

Headlines

Ford caught on video sweating
Ford caught saying the f word.

Fast forward to Oct

Ford ears chow…..

#78 Cici on 03.16.14 at 11:03 pm

I’m in no hurry to buy an overpriced home; in fact, I’d rather start getting rid of crap, forget about having children completely, retire early and travel the world.

The older you get, the more you realize how important it is to take every opportunity that comes your way and live life to the fullest. I’m actually fully convinced that the people who consume the most are the saddest and the most desperate. They are filling their lives of with stuff to impress other people and confirm their self worth, but they are so desperate and sad and pathetic that they don’t even realize what they are really missing out on great life experiences and opportunities.

Anyways, it looks like the stack of housing cards is already starting to unravel in Quebec…foreclosures are up 20% month over month:
http://argent.canoe.ca/vos-finances/immobilier/les-reprises-de-maisons-en-forte-hausse-10032014

#79 Ronaldo on 03.16.14 at 11:26 pm

#30 Ralph Cramdown on 03.16.14 at 8:42 pm

That was weird.

#80 KommyKim on 03.16.14 at 11:32 pm

RE #48 Chickenlittle on 03.16.14 at 9:15 pm
One more thing: they wanted us to pay for the hot water tank rental and we refused. Why do they need us to do that?

It’s a bit like paying freight and PDI on a new car. It just makes the sticker price seem lower.

#81 Tedfiftyfour on 03.16.14 at 11:36 pm

Its also TRUE Germans have lower accumulated wealth compared to other european countries.Median household net wealth in Germany is below counterparts in Spain and Italy, according to a survey published last week by the Bundesbank, the German central bank. The median level is the mid-way point where half of a sample or group are below the level and half above. Some 3,565 German households took part in the survey.

#82 TurnerNation on 03.16.14 at 11:37 pm

Hmm saw this:

“Inheritance Tip – If your adult kid(s) have no tax-free savings accounts, open them and put your money in them. Create a trust agreement – the account is in your kid’s name, but the money is your money. You save the tax on it now, plus your kid(s) will receive the money down the line tax free, too (and you avoid the inheritance tax on it charged by the government, because the money is outside of your Estate). You can take money out anytime, or leave it in (and add to it yearly). Need some help? More estate tips? Contact…”

#83 Cici on 03.16.14 at 11:40 pm

#52 Happy Renting

I noticed that too…but I deducted that it must be from all the awesome sex that this guy is supposedly having with his beautiful wife in return for buying her a home.

Advertising is very subliminal…

In any case, it’s all a mirage. A new study says the old adage “Happy wife, happy life” is all wrong, and in fact it’s the other way around. Oh our poor Canadian boys, they’ve been sold empty lies and heart ache:

http://time.com/24985/happy-wife-happy-life-study-says-its-the-other-way-around/

#84 Whistler bubble boy on 03.16.14 at 11:45 pm

The interesting thing about real estate is that, like ice cream on a scorching day, it melts from the edges. First the farms, cottages and recreational properties. Then small towns were buyers are thin at the best of times. After that, the village and semi-rural enclaves on the edges of urban areas. Then the burbs, where now live the majority of equityless people. Finally the cities, and lastly the demand neighbourhoods where arrogance and exclusivity often ward off sanity.”

#85 Nemesis on 03.16.14 at 11:55 pm

@RetiredBoomerWI/#62

Correct.

http://youtu.be/eiprqeaydik

[NoteToSaltyDogz: TheRevolution will not be televised… but if you’re lucky, you just might catch it on NetFlix after a decent interval. BeWell.]

#86 Van guy on 03.16.14 at 11:59 pm

River Green in Richmond is a luxury condo development built next to the Olympic Oval. This building has been completed for months now but looks like a ghost town. I did a quick mls check and wow! some of these units can go for up to 4 mil. Damn, this is Richmond! Who the hell would spend even a million for a condo in Richmond? This has gone to a point of stupidity. And they keep building away.

#87 aquaviva71 on 03.17.14 at 12:42 am

oh boy…reading all the comments about how renting is the way to go makes me laugh. Canada (Ontario) in particular b/c to be honest with you I could care less about the rest of the provinces. Ontario and specifically in and around the Toronto GTA, Mississauga, Oakville, Burlington and Stoney Creek upto Fruitland is what I’m talking about. Hamilton, Stoney Creek and Fruitland is where many people buy there homes b/c they are affordable and very nice. Personally I like Stoney Creek and Fruitland better than Hamilton. Why rent when you can own a beutiful home for the same monthly payment as rent or lower. Homes in the areas mentioned will always hold there value and never decrease b/c they are in demand aka very popular sought after areas. So it doesn’t matter how you spin how renting is the way to go trust me its not. Bite the bullet and buy now b4 its way way too late as home prices in these areas are rising every month. BTW travelling further than Fruitland ontario is not wise unless you work in the niagara region which I highly doubt.

#88 wallflower on 03.17.14 at 12:50 am

male dog

(but, why did the photographer do that?)

#89 Flamed out in Kitchener on 03.17.14 at 12:55 am

Well … all we need now is a new Trudeau government next year where ‘budgets balance themselves’ (what the !!??) and our national stellar financial acumen will be complete.

Most people I know could care less about understanding or learning the most basic thing about how money or our economy works and how such knowledge could enrich their financial lives … sad really. It’s much more important to keep up with what’s happening in the Big Brother house, or Biebers latest adventure.

Personally, I think home ownership is fine … as long as it represents no more than about 15 – 20% of your net worth and you understand it’s where you live … and not treat it as part of your investments. If I do nothing but break even on a house over an ownership period of about 12 years (cost plus capital improvements) I’m good with that. Less stress and worry that way … plus it lets me concentrate on the other 80 – 85% of my net worth, to diversify and grow those assets.

Everyone may not agree, but if our education system had some mandatory classes on personal financial management and investment basics, starting at the grade 9 level … the entire country could be better off in the long run. It’s not rocket science … and knowledge is both power and freedom.

#90 Hickster on 03.17.14 at 1:06 am

Real estate is not the same everywhere in Canada. Whether it makes sense to buy vs rent depends on the cost or each obviously. Garth lumps sask into the boat as the rest, but it’s not. Home prices are half Toronto and Van, but rents are similar. That makes buying on par or better than renting here. I put numbers in for a home we are purchasing into Etiennes calculator that Garth advertised, and it shows several hundred grand ahead at 10 years, over a million at 20, with buying. That’s assuming ZERO price appreciation. That’s because renting a newer 500K house here costs $3000 / month, due to a vancancy rate near zero.

The entire country is not GTA and Vancouver. Out here, house prices have indeed soared over the last 10 years, but rents are in outer space.

#91 Spectacle on 03.17.14 at 1:21 am

Thanks Garth…

#48 Chickenlittle on 03.16.14 at 9:15 pm
“So we found a place to rent ………got the price down $150 to $1850 for a 4 bedroom,……… they wanted us to pay for the hot water tank rental and we refused. Why do they need us to do that?”

Answer: More often the Elevators (Registered Trademark) , HVAC/heating and other essential components of the buildings being purchased , are Leased/Rented! It keeps the ” purchase price” down per unit. Growing trend in modern condos going up, and You don’t own them.

Regards

#92 airhead princess on 03.17.14 at 1:34 am

So…we see the outcome of the referendum in the Crimea….mo surprise there….a majority population of Russians tired of being ruled by a distant ethnicity….quell domage.

What happened……The EU and USA engineered a coup against the sitting government. Big banks and scumbags like George Soros and Socitie’ General ( the nice folks who brought you ruthless slavery in the Belgian Congo) wanted to enslave the Ukraine with trillions of dollars in loans to indebt the country as they have all the other EU debt slaves…..the Ukraine president balked….said he could get a better deal from the Russians. The EU and Americans sent thugs and agents provocateurs to set fire to Kiev and ply it for the media as a righteos revolution…when it was nother but an American style takeover…..like Panama, Iran, Afghanistan, Columbia, Iraq…etc etc etc….

Putin does an end run around the EU/AM banksters and calls a referendum….after all….who can argue with an excerise in democratic expression…the yanks have referendums all the rime …right?

Why don’t the Crimeans get to vote for what they want….they got pot in Colorado through referendum didn’t they?

Obozo and his socialist debt slavers got spanked on this one….good for Vlad……he impaled that doofus Obama on a long Russian pen….that signed Crimea into a free state.

Now we all hear the CBC and the bleating EU backers calling it illegal……bleat bleat…whine whine….while at the same time agitating for a referendum in Quebec…..the hypocrisy stinks to high heaven…….bottom line is that Putin beat the G7/EU/NATO/Yankee Banksters at their own game.

#93 Plum Sauce on 03.17.14 at 1:40 am

Ariel’s graphic — hilarious! China in ’68 — even funnier!

As an immigrant to Canada who has lived in Europe and Asia as well as in the States, one of the things I just don’t get is why, for all of Canada’s Charter Rights, tolerance, and political correctness, the average Canadian is such a pig about renters. My colleagues are all broke trying to afford their houses, but they are both beasts about my partner and I renting and resentful about our not being broke! Baffling…

#94 Marco Polo on 03.17.14 at 2:01 am

I noticed too that the cartoon fellow in the ad lost his love handles post-rent. Was his mortage payment so high now there was no more restaurant nights out? His hot wife looks like another species from him. He’s drawn from Southpark, and she’s Disney material.

In a serious note. Quebec is weeks away from another sovereigntist victory. Crimean dust is in the air, stirred up by Russian jackboots and tanks. Is RE really where you should be keeping all your net worth? Cottenelle futures options and yellow rocks are looking much better now, Garth.

That said, there is the outside risk of a bond emergency in Eastern Europe. A punished Russia, with this week’s sanctions, can still easily afford to pay much higher bond yields to keep their military, economy, and corrupt power structure afloat. There is the potential for these better Russian bond returns to spread elsewhere, and hence, higher prime rates.

#95 airhead princess on 03.17.14 at 2:05 am

George Soros and his bankster buddies lost trillions on the Ukraine coup deal….now he’s whining…

http://www.thedailybeast.com/articles/2014/03/14/george-soros-predicts-ukraine-could-ruin-the-eu.html

#96 airhead princess on 03.17.14 at 2:09 am

DELETED

#97 Setting the record straight on 03.17.14 at 2:09 am

CNBC. Reports for the US
9.63 million households worth more than one million
Note value of house not included in these figures
1.24 million households worth more than five million
15.3 million households worth more than 500k

If your only asset is a million dollar house owned free and clear, if you monitze it, you are barely middle class
And if thats your only income, inflation will move you out of the middle class quite rapidly.

A millionaire is someone with an annual income >1 million $

#98 JL on 03.17.14 at 2:17 am

“In some places it’s seen as wealth. In others, danger and risk”

Garth, that’s dead wrong. Home ownership rates vary all over the world and the reasons vary by country. However the idea that Germans view home ownership as “risky” is preposterous. Germans tend to be rational thinkers, and since WW2 the policies put in place in Germany heavily favoured renters (in order to help the masses after the devastation of the war). Rents are heavily regulated as are tenants rights in Germany. Germans react rationally and act in their economic interest meaning renting became very normalized and still is today. This has nothing to do with real estate being considered “risky” in Germany. Your point that “house prices are stable” demonstrates that in fact it is the opposite of risky.

Contrast this to Canada where for the past 60+ years renters have done TERRIBLY versus buyers (thanks in large part to government inflation and devaluing the currency). Even 10 years ago in Calgary it was FAR better to buy then rent. Only recently (at least for Calgary – I don’t speak for the rest of the country that I know very little about) has renting started to look more attractive than buying and that’s for certain properties only. I own a couple properties that I rent out. One is worth about $220,000 (but when I started reading this blog in 2009 it was only worth $175,000). The other property is worth $330,000 (again was worth $270,000 in 2009). The $220,000 condo rents for $1450, the $330,000 condo rents for $1850.

Do the math and the rent versus buy on these 2 units at today’s arguably “inflated” values its still a close call.

The $220,000 condo trades at 12.6 x annual rent and the $330,000 condo at 14.8 x annual rent. Both numbers tilt the rent vs buy debate decision towards the buyer and that’s not even factoring ridiculously low rates.

So yes when Garth talks about a $300,000 condo in Toronto that’s going to rent for $1400.. Then yeah obviously that’s a lot harder to justify buying. But speak to each market individually instead of grouping Canada together as though its one single market.

In all my years of reading Garth’s blog I have never actually heard him make a concise argument against Calgary real estate based on any of the numbers either on price to rent or price to income. The two biggest measures in assessing affordability and whether prices are sustainable.

#99 Devore on 03.17.14 at 2:46 am

#17 jan

“But I’m not out to fry some poor schmuck for trying to sell mortgages.”

I am just wondering about your definition of poor?

“Poor schmuck” is an expression, a figure of speech.

#100 Devore on 03.17.14 at 2:52 am

#22 Old Man

How else will CPI show no food inflation?

#101 drydock on 03.17.14 at 3:50 am

Is it just me, or are some here too tightly wrapped?

#102 Ilona on 03.17.14 at 4:07 am

Worse, a third of all UK homeowners are over 65, because young families have been frozen out of the market.
______________

So what’s the problem? Their kids or grandkids will inherit the properties. While the kids or grandkids of renters with debt-free mobility and diversification will inherit the money to buy those properties.
***
So, how do you scare up more business?

You try this:
______________

Replace the words “Rent” with “Inflation”, “Homeownership” with “Financial Freedom”:

http://www.simplyinvesting.com/blog/2014/03/16/worried-about-inflation
***
But I’m not out to fry some poor schmuck for trying to sell mortgages.
______________

Yeah, at least he doesn’t charge anything for his services – unlike Kanwal Sarai who’s trying to sell courses on how to invest (Basic Package – $247, Value Package – $347):

http://www.simplyinvesting.com/simply-investing-course

***

Is it just me or the pot keeps calling the kettle black?..

Some interesting numbers from 2001 to 2011:

http://www.moneysense.ca/columns/real-estate-vs-the-stock-market

Would be interesting to see the same statistics from 2012 to 2022… and listen to regrets “Should’ve bought that condo/stock in 2014!” :)

#103 maxx on 03.17.14 at 7:01 am

#6 TurnerNation on 03.16.14 at 7:25 pm

” Attn. new blog dogs. The following usernames are still available. Reserve yours today.

Chancellor Rebalancer”

Excellent oxymoron.

#104 maxx on 03.17.14 at 7:18 am

#20 Dinner_with_Groucho on 03.16.14 at 8:14 pm

“Ariel Santos using Memegenerator to insert “let me help you” was a really classy touch.

See Ethyl, he’s not a slick sharpie! He’s regular folk just like us.”

Tried and true device/gimmick, to be sure…..and “Ethyl” -what a sharp malaprop! Getting sucked into any RE industry marketing proves many house horny are on high on fumes.

#105 jess on 03.17.14 at 7:34 am

Scandal of Europe’s 11m empty homes | Society | The Guardian
Jane 24

http://www.theguardian.com/…/europe-11m-empty-properties-enough-house- homeless-continent-twice‎Cached
23 Feb 2014 … There are more than 700,000 vacant homes in the UK, something housing
campaigners say is a shocking waste. Photograph: Martin Godwin

#106 Ralph Cramdown on 03.17.14 at 7:40 am

#98 JL — “In all my years of reading Garth’s blog I have never actually heard him make a concise argument against Calgary real estate based on any of the numbers either on price to rent or price to income.”

I can’t speak for Garth, and I don’t know if this applies to you, but a lot of people have posted here about Calgary real estate, and shown that they obviously don’t understand that it moves with the price of oil and gas. Buying a place in Calgary is a bet on future energy prices. Buying with borrowed money is a leveraged bet. Buying with borrowed money if your job is patch related is a doubly leveraged bet.

Real estate in Alberta and parts of Saskatchewan is exposed to most of the same risk factors as elsewhere in Canada, and one big unique one besides.

It would sure be nice of your premier and our prime minister could get together and get some pipelines built. Giving Obama and BC a reason to say yes would not be that difficult, but the Right Honourable Mr. Abrasive figures he can just bluff it out against the POTUS. I see it as ominous that Obama has promised a Keystone XL decision “in the next few months” (i.e. apparently before this fall’s midterm congressional elections). If he was going to say yes, I’d think he’d wait until after.

#107 jess on 03.17.14 at 7:43 am

count me as the uninitiated… defeasance loans
Is this true?

A provision in a loan removing it from a balance sheet if cash or a portfolio is set aside for debt service. Usually, defeasance occurs when a borrower owns a portfolio of Treasury securities whose coupons are used to service a debt. When the borrower has set aside sufficient assets to cover the debt, the debt does not need to be recorded on a balance sheet.

#108 eddy on 03.17.14 at 8:23 am

Now we all hear the CBC and the bleating EU backers calling it illegal……bleat bleat…whine whine….while at the same time agitating for a referendum in Quebec…

No one should watch CBC at anytime for any reason.
If you need another reason, the Malaysian airplane hoax is the latest. 25 countries involved in a fake event.
Canadian blogger Rick Potvin figured it out

http://fakeologist.com/2014/03/16/ep92-rick-potvin-on-mh370/

#109 jess on 03.17.14 at 8:32 am

“the Maple 10 ”

a scheme for the orderly unwinding of substantial CFD……
http://www.irishexaminer.com/ireland/banking-trial-begins-in-dublin–live-updates-here-257619.html
CFD
http://en.wikipedia.org/wiki/Contract_for_difference

=
speaking about out of control
http://en.wikipedia.org/wiki/Jesse_Lauriston_Livermore

#110 Just Checking on 03.17.14 at 8:38 am

#30 Ralph Cramdown on 03.16.14 at 8:42 pm
“…bitches….litter…”

Are you affected by FASD?

#111 xman on 03.17.14 at 8:54 am

#96 Airhead Princess
“let Marcus Garvey go back to Africa”
you have proved you are an idiot-you brought his people to the west in chains and shackles and committed what amounts to crimes against humanity.
Garth I enjoy the blog but im sure if i make Jewish comments like these I would be banned or chastised.
Lets be fair and keep it clean and keep on topic
(How long before the rich enslave the world)
Have a great day and make sure you say hello to an African!

#112 :):(Ying Yang on 03.17.14 at 9:01 am

In Hong Kong renters vs owners runs around 50/50. However it is very convoluted as some renters are subsidized by the government as well as some owners. Exactly how many younger potential purchasers will be frozen out of the market over there ranges around the 80-90% range. Most of the people I still have contact with have lost faith in ever owning their own property and in fact rent communally. Quite a few have banded together to keep the high rental costs a bay. You can not win in Hong Kong! That is why if the opportunity arises many leave Hong Kong for places such as Canada.

#113 amazon girl on 03.17.14 at 9:11 am

Amazon girl to Cici #78
Well said girl,agreed with you completey

#114 PoltawaDiva on 03.17.14 at 9:37 am

the votes in Crimea are in, seems 123% of the population voted: The Russian soldiers stationed there, Russian citizens, mostly retired Soviet army elite and their families’, the “political tourists” from Russia, and Gogol’s Dead Souls. Crimean Tatara boycotted the vote – they remember the Ww11 deportation of their three million population. Only some 150000 were allowed to
return, and they now are a 12% indigenous minority.

Ttoday the banks are closed, suspected Ukrainian sympathizes are being dispossessed of their houses and crosses are being drawn on Tatar houses.

Crimea was totally subsidized by Kyiv, and is totally dependent onUkraine for its water and electricity. It is accessible from Russia only through the Straits of Kerch and by sea. and you have to feed the 40000 Russiantroops there.

#115 AfterTheHouseSold on 03.17.14 at 10:16 am

#65 saltpony
“The Good in the Day”

That was beautiful. When “the good in the day” finds me I like to acknowledge the moment with gratitude. Thank you saltpony.

#116 Spaccone on 03.17.14 at 10:25 am

The thing is, just like in Toronto where endless amounts of condos are in the pipeline and keep coming online Spain doesn’t want to fix the problem. It’s only anecdotal, but I took a drive through Galicia a couple of years ago and even with the RE disaster still fresh it seemed as if building was going on like normal everywhere. They don’t want people to “save” them from the RE mistake that they’re intending to fix…they want to continue it and continue putting more housing online.

#117 Retired Boomer - WI on 03.17.14 at 10:37 am

#85 Nemesis

Good link. Hadn’t seen them since what ’67 ??

Author of the song, the late Pete Seeger, also brought us many others, like “Little Boxes” an appropriate tune for this discussion board, not to mention his other very early union, and depression compositions.

No doubt some will be re-cycled onto the top 40 once more.

#118 realitybites on 03.17.14 at 10:40 am

Garth,

Pet peev. You quoted home ownership % for countries, then got to Canada and quoted ‘couple-family households’ ownership %. Not apples to apples.

Switching gears midstream is misleading. You can take the man out of politics, but not the politics out of the man.

The 70% national number has been quoted here ad nauseaum. The StatsCan counting of couples who own homes is a largely-unknown and (I believe) telling glimpse into our social reality. I regret it overloaded you. — Garth

#119 Ralph Cramdown on 03.17.14 at 10:47 am

#109 jess

Looting at Anglo-Irish aside, it should be pointed out that there’s a vast difference between a Contract For Difference traded between two sophisticated parties and the shell game by the same name that is aimed at unsophisticated rubes online. If you have to pay “interest” or “financing charges” on money that is neither borrowed nor lent, you’re being had. “Binary Options” are another similar shell game for people who like to think they’re investing.

#120 Cory on 03.17.14 at 10:58 am

#96 Airhead Princess

Your are a racist idiot. I agree with #111 Xman.

Garth, that post should not have been allowed.

#121 Daisy Mae on 03.17.14 at 11:06 am

#89 Flamed Out: “Everyone may not agree, but if our education system had some mandatory classes on personal financial management and investment basics, starting at the grade 9 level … the entire country could be better off in the long run. It’s not rocket science … and knowledge is both power and freedom.”

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

I agree wholeheartedly. Why do these changes take so many years to implement? Swimming lessons and CPR training in Physical Education classes…finally. Now, financial planning/investment basics would be perfect.

#122 None on 03.17.14 at 11:36 am

#96 airhead princess on 03.17.14 at 2:09 am
Obamalama…..the worst president and leader of the end of the free world as we know it. Maybe if we’d let Marcus Garvey go back to Africa we’d never have let this traitor into office.

======================
Classy.

#123 chris on 03.17.14 at 11:46 am

9.1% increase in Calgary is nuts. More understandable in Toronto or Vancouver where there is a scarcity of choice property, (with or without homes). But Calgary?

#124 chickenlittle on 03.17.14 at 11:49 am

I forgot to say that the 4 bedroom is a detached house…I do realize that hot water tanks in houses are mostly rentals, but I feel that that should be part of the rent.

If this guy is going to make so much money by owning and renting it out then he should have no problem covering the tank rental himself.

Speaking of spelling mistakes, I love typing on my BB! The IPad changes words all the time.

I also agree with Cici. I’m 35, no kids and I’m quite happy! Traveling is in my future as well! :)

Also, Andrew Woburn is right. The couple is slimmer bc they can’t afford to eat anymore!

#125 Smoking Man on 03.17.14 at 11:54 am

So our western leaders, pillars of democracy are calling the vote illegal.

So a group of neo nazis have a coup, over through a democratly elected president and that’s OK.

Kosavo where no referendum happened, just granted, here you go. Here’s a country of your own.

Our leaders have lost, msm has lost it.

We no longer live in a democratic society, mind you we never did.

But the arrogance of the ruling class, it’s not even trying to hide the hypocrisy of all of this.

Ceasor and big bird are such an embarrassing bunch of twits.

#126 DUI on Money Road on 03.17.14 at 11:54 am

#108 eddy on 03.17.14 at 8:23 am
————————————–
The ‘fake’ airplane disappearance event certainly flies in the face of the guy I work with who went to school in Beijing with one of the poor souls that has disappeared….(i.e., I have news for you, it actually didn’t land in Beijing as scheduled…)

#127 Tony on 03.17.14 at 12:04 pm

Happy St. Patrick’s Day today and cheers to anyone who attended the parade in Scranton on Saturday. No I’m not Italian I’m Irish.

#128 Westcdn on 03.17.14 at 12:07 pm

Other people often express opinions far better than I can. In my pursuit of upward mobility, I have complained some people get an easier path. Food for thought: http://www.thereformedbroker.com/2014/03/16/is-success-inherited-or-learned/
I also read that credit expansion continues in the US despite the FED tapering. I think this is good as I think credit must expand for economic growth. The reason seems that corporate loans are increasing to fund Capex in addition to share buybacks. However, the cost will be slow rising interest rates. The future is going to get a little tougher for debt slaves.
http://soberlook.com/2014/03/whats-behind-sudden-improvement-in-us.html?utm_source=BP_recent
One observation I note about living in Calgary is finding people who intend to retire in this city. There are some who will buy a condo for “lock and go” but most think there are places they would rather be. I suspect Calgary real estate prices have only a few years left before they peak, providing employment does not suddenly get worse. Meanwhile, I wonder – how high will my property taxes go and will I become that old neighbour who yells at kids to keep off the grass?

#129 DUI on Money Road on 03.17.14 at 12:09 pm

#87 aquaviva71 on 03.17.14 at 12:42 am
——————————————
The ‘rent vs. buy’ argument is a personal decision, based on multiple factors for each.

You sound ridiculous generalizing that ‘buying is the way to go’ (and sounds just as pathetic as those that say ‘renting is the way to go’).

These statements need to be qualified.

It’s a personal/family decision, dependent on your life stage, what city you live in (is buying expensive), what area of that city do you live in, what your job prospects are, are you married, do you have kids, do you want kids, do you have debt, how much debt, what are your needs vs. wants, how risk tolerant are you, are you planning on being their long term etc.

There are many, many considerations in the buy vs. rent debate.

#130 HD on 03.17.14 at 12:14 pm

#78 Cici on 03.16.14 at 11:03 pm

I’m in no hurry to buy an overpriced home; in fact, I’d rather start getting rid of crap, forget about having children completely, retire early and travel the world.

———————–

That’s my plan too.
We basically came up to the same conclusion.

Best,

HD

#131 HD on 03.17.14 at 12:15 pm

#30 Ralph Cramdown on 03.16.14 at 8:42 pm

That was weird.

———————————————

I agree, that was very out of character.
Ralph, care to explain what happened there?

Best,

HD

#132 JimH on 03.17.14 at 12:16 pm

#96 Airhead Princess
… About the most offensive and racist post I’ve every seen on this blog. Grow up!

#133 Son of Ponzi on 03.17.14 at 12:17 pm

#106
Buying a property in Calgary is a bet on future energy prices.
—————————-
Buying a property in Vancouver is a bet on the future of China.

#134 TnT on 03.17.14 at 12:19 pm

#96 airhead princess

Putrid vial disgusting….

Post an apology….

Post now deleted, as it should have been hours ago. — Garth

#135 Grantmi on 03.17.14 at 12:31 pm

I keep getting these GOOGLE NEW ALERT emails every week.. and the MSM is still being reporting that EVERYTHING IS GOING TO BE ALL RIGHT, Mannnn!

The dream just keeps on living….

Canadian housing market

Weekly update ⋅ March 16, 2014

NEWS
Montreal Gazette
UPDATE 1-Canadian housing starts pick up again in Feb -CMHC
Reuters
A booming Canadian housing market in recent years prompted fears of a U.S.-style collapse, but Canada has so far avoided such a correction.
Google Plus Facebook Twitter Flag as irrelevant

Financial Post
Ottawa’s ‘dangerous’ housing market meddling threatens jobs, economy: economist
Financial Post
Economist Will Dunning says he’s taken a close look at the Canadian housing market and just can’t see the bubble. But what’s most disconcerting to …
Google Plus Facebook Twitter Flag as irrelevant

The Globe and Mail
Why the doomsayers are wrong about Canada’s housing market
The Globe and Mail
A Globe and Mail analysis has found that a key measure, used by economists, underestimates the degree to which rents have been rising in the …
Google Plus Facebook Twitter Flag as irrelevant

CTV News
Meddling with mortgage rules could create ‘unpredictable’ housing market: report
CTV News
OTTAWA — Canada’s hot real estate market continued to gather steam last month, but a new report from a respected mortgage and housing expert …
Google Plus Facebook Twitter Flag as irrelevant

Montreal Gazette
UPDATE 1-Canadian home prices rise in Feb to fresh high -Teranet
Reuters
Canada’s housing market has remained stubbornly robust in recent years, notwithstanding a slowdown in 2012 when the federal government …
Google Plus Facebook Twitter Flag as irrelevant

The Globe and Mail
Alberta housing market set to surge: BMO
The Globe and Mail
Alberta’s housing market, led by Calgary, is poised for a boom, Bank of … The province’s housing market is quickly heating up again, fuelled by a stronger … Canadian Press business reporter Romina Maurino looks at what this could …
Google Plus Facebook Twitter Flag as irrelevant

No bubble in Canadian housing: report
Bay Today
OTTAWA – Canada’s hot real estate market continued to gather steam last month, but a new report from a respected mortgage and housing expert …
Google Plus Facebook Twitter Flag as irrelevant

No bubble in local housing market, say realtors
St. Albert Gazette
Despite some frothy forecasts for Canada’s housing market, local realtors say this region is not a bubble waiting to burst. Yet there is reason for caution …
Google Plus Facebook Twitter Flag as irrelevant

Toronto’s Housing Market To Crash And Boom: Suffering From Shortages And Oversupply
Huffington Post Canada
Is Toronto’s long-running housing market juggernaut coming to an end, at long last? … Pimco is limiting its exposure to the Canadian housing market.
Google Plus Facebook Twitter Flag as irrelevant

Canadian pension funds warned about property exposure
Financial Times
Canada could soon find its haven reputation under threat as clouds continue to gather over its property market, raising concerns that Canadian …
Google Plus Facebook Twitter Flag as irrelevant

#136 Son of Ponzi on 03.17.14 at 12:34 pm

#134
Another radical driven underground.
It’s getting crowded down there.

#137 DUI on Money Road on 03.17.14 at 12:38 pm

#48 Chickenlittle on 03.16.14 at 9:15 pm
——————————————–
The agent likely got 1 month’s rent as their working fee. Thus, they were hoping you would up your bid rather than negotiate to reduce it.

#138 None on 03.17.14 at 12:47 pm

96 airhead princess on 03.17.14 at 2:09 am
Obamalama…..the worst president and leader of the end of the free world as we know it.

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

You know the more I think about it, I’ve normally tried to understand your hatred of civil servants, etc. but now I have realized something – you are a disgusting human being. You basically hate those that clearly you are jealous of. I’ve realized why you just can’t even acknowledge other views – you are just too full of hate to hear.

I feel sorry for you.

#139 Learn to Spell Smoky on 03.17.14 at 12:48 pm

#125 Smoking Man on 03.17.14 at 11:54 am
So our western leaders, pillars of democracy are calling the vote illegal.
So a group of neo nazis have a coup, over through a democratly elected president and that’s OK.
Kosavo where no referendum happened, just granted, here you go. Here’s a country of your own.
Our leaders have lost, msm has lost it.
We no longer live in a democratic society, mind you we never did.
But the arrogance of the ruling class, it’s not even trying to hide the hypocrisy of all of this.
Ceasor and big bird are such an embarrassing bunch of twits.

_____________________________________________

Not as embarrassing as Smoking Man who can not spell!
Enjoy.

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

#140 Musty Basement Dweller on 03.17.14 at 12:58 pm

This weekend my girlfriends daughter was treated by her mother in law with $30k but they have to buy a house with it. Victims of house porn and hormones. Couldn’t care less about the market or the math. Man what a powerful machine and monster that has been created and they are falling hook line and sinker. So sad. They have a perfect rental place they are pretty happy about but mil is winning with her bait. Such an emotional thing for a bit of shelter. Crazy

#141 johny on 03.17.14 at 12:59 pm

us dollar is down 2% YTD gold is up 12%YTD this doesn’t pass the smell test .Or could it be that us has to much debt ?or was it the selling of treasuries buy russia/china pehaps it is because the dollar is backed by a printing machine I am not sure but if this trend continues like this the dow will definitely be at 20 000 -50 000 in no time but will the dollar go down or up ?because so far this year it aint looking good

#142 airhead princess on 03.17.14 at 12:59 pm

Typical liberal offensive….say anything about the demo god Oboomo the Idiot and our hair is set on fire in righteous indignation and cries of ‘racism’….. But its OK for him to order spying on the media, crap on the constitution, bully opposition, try to put bullies in the newsrooms, spy on world and business leaders and use that information for nefarious purposes…etc etc etc etc…..flood the country with criminal illegals…pander to the constiuency by giving away free phones and food stamps ( wouldn’t we cdns call that vote buying?) because he’s black he gets a politically correct get out of jail free card?….nonsense….they don’t call him Obozo for nothing. If a black president is an idiot he doesn’t get to be called a lily because he’s black….an idiot is an idiot no matter what color.

You have proven that well. — Garth

#143 Steve on 03.17.14 at 1:08 pm

#134 TnT on 03.17.14 at 12:19 pm
#96 airhead princess

Putrid vial disgusting….
Post an apology….

Post now deleted, as it should have been hours ago. — Garth
.
_________________________________________

Sadly picked up in various portions and repeated when rebuked in #111 and #122 …

#144 fixie guy on 03.17.14 at 1:10 pm

“As in the UK, it’s the wrinklies who have the greatest exposure while the young buyers shoulder all the debt.”

Exposure to housing debt? Doesn’t appear so:

http://viableopposition.blogspot.ca/2012/05/canadas-perfect-retirement-storm.html

#145 Bitcoin scammers on 03.17.14 at 1:15 pm

Hello Garth,

How about setting a comment filter for “bitcoin”?

#146 World Traveller on 03.17.14 at 1:27 pm

Looks like HAM is coming to Spain via the residencia program, although it looks like it is not clearly defined.

http://www.opp-connect.com/19/02/2014/confusion-over-spanish-golden-visa-requirements/

#147 World Traveller on 03.17.14 at 1:29 pm

he’s black….an idiot is an idiot no matter what color.

You have proven that well. — Garth

HAHAHAHA!!

#148 World Traveller on 03.17.14 at 1:30 pm

#142 airhead princess on 03.17.14 at 12:59 pm
Typical liberal offensive….say anything about the demo god Oboomo the Idiot and our hair is set on fire in righteous indignation and cries of ‘racism’

****

Save it for the FOX News forum, AP.

#149 johny on 03.17.14 at 1:44 pm

#142 airhead princess on 03.17.14 at 12:59 pm
we get your point i agree its the delivery of the message perhaps try to be a more intellectual writer

#150 Old Man on 03.17.14 at 1:58 pm

#142 airhead princess: Typical liberal offensive? Gee are you auditioning for a job with the great Caesar in the next election? I hate to bust your bubble as you got Obama all wrong because experts have traced his heritage using genetics. Obama is 50% White; 43.75% Arabic; and 6.25% Black. Now when all is said and done, we are all just people equal under the eyes of God.

#151 Happy Renting on 03.17.14 at 2:05 pm

#140 Musty Basement Dweller on 03.17.14 at 12:58 pm

Sounds like a manipulation by the MIL to keep them close and hurry along some grand kids. As long as she can keep the cheques coming when house carrying costs are too burdensome, kids prove expensive, and they can’t move for more lucrative employment opportunities…

Show your GF’s kid the Friday post about Sayed and Anna. If they hesitate to take the plunge with a $300k gift and their monster income, might give GF’s daughter pause when they’re about to leap for a gift 1/10 that size (if $30k is a big inducement for them I assume neither is a 1% earner.)

#152 None on 03.17.14 at 2:05 pm

.#142 airhead princess on 03.17.14 at 12:59 pm
Typical liberal offensive….say anything about the demo god Oboomo the Idiot and our hair is set on fire in righteous indignation and cries of ‘racism’….. But its OK for him to order spying on the media, crap on the constitution, bully opposition, try to put bullies in the newsrooms, spy on world and business leaders and use that information for nefarious purposes…etc etc etc etc…..flood the country with criminal illegals…pander to the constiuency by giving away free phones and food stamps ( wouldn’t we cdns call that vote buying?) because he’s black he gets a politically correct get out of jail free card?….nonsense….they don’t call him Obozo for nothing. If a black president is an idiot he doesn’t get to be called a lily because he’s black….an idiot is an idiot no matter what color.

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

Nope I’m not mad because you criticized Obama, I’m mad that *you* actually made it about colour.

As well, it gets old when people disagree with you or call you out on your rants you just call them liberals. Conservatives would also likely take issue with what you’ve said above.

Finally, all the stuff you are accusing him of is something Presidents have been doing for 20 years! You just seem to really get mad about it because he’s not a white middle aged guy?

You may hate liberals, but I’d point out most conservatives would not have you either…you’re just an intolerant person who is pretty small-minded.

#153 DUI on Money Road on 03.17.14 at 2:23 pm

#152 None on 03.17.14 at 2:05 pm
————————————–
Obama’s actually a 1/2 white middle-aged guy.

#154 DUI on Money Road on 03.17.14 at 2:25 pm

#140 Musty Basement Dweller on 03.17.14 at 12:58 pm
———————————————————-
You have to qualify that use of the 30k!

What town/city?

What are their occupations? Stable?

What lifestage are the people at?

etc. etc.

#155 HD on 03.17.14 at 2:28 pm

@ #65 saltpony on 03.16.14 at 10:06 pm

Very sensible post.

Thanks for sharing.

Best,

HD

#156 DUI on Money Road on 03.17.14 at 2:34 pm

#128 Westcdn on 03.17.14 at 12:07 pm
——————————————–
The only evidence I needed of ‘is success inherited or learned’ is that of the babies switched at birth (in Japan). The switch occurred between a very poor single mother, and a very wealthy family with connections.

The baby from the poor mother that grew up in the rich family became a rich and successful business man. The ‘rich’ baby scratched his way through poverty to become a garbage man.

The rich family figured out the switch after years of contemplating that their brother was just physically totally different than the rest of the family. The poor (“should have been rich”) man successfully sued the hospital for the error, disgusted and depressed that his life in poverty was due to a simple human error.

http://news.nationalpost.com/2013/11/28/japanese-man-accidentally-switched-at-birth-grew-up-in-poverty-while-other-baby-lived-life-of-privilege/

#157 Mixed Bag on 03.17.14 at 2:42 pm

#125 Smoking Man on 03.17.14 at 11:54 am

That an interesting point. With an interesting set of circumstances that are too inflammatory for me to even try to get into here. They also poked their noses into FYROM, two official languages.

#158 Ilona on 03.17.14 at 2:45 pm

Ok, can we start talking about what to buy already? This advice made me smile:

investors might want to consider looking at either gold mining stocks or exchange-traded funds (ETFs) that track either gold or gold mining companies.

http://news.yahoo.com/why-investors-prepare-rebound-spring-115005086.html

I just purchased RBC Precious Metals mutual fund in the beginning of February (simply because it was time to rebalance my RRSP and precious metals were the bottom category at the time), and it’s already up more than 18%!

But looks like I rushed with selling Doe Jones Index fund last week – lost some money on currency conversion, only made a couple hundred bucks… But oh well – you live, you learn :)

#159 Old Man on 03.17.14 at 2:49 pm

I don’t know why, but everytime I see the above noted photo caption get this mystical message for an interpretation of sorts. I see its the Smoking Man who has just had a domestic battle with his wife at home, and she took the pet dog inside from the backyard; locked him out; and Smoking Man is now in the doghouse with his beer.

#160 Holy Crap Wheres The Tylenol on 03.17.14 at 2:49 pm

Well there goes Crimea, can’t wait for the next annexation of some other part of the Ukraine. Wow did the west ever stand up against Putin and tell him you better not cross this line or else. Or else, or else, uuuuuhhhh, yep or else something like that, ya and you smell too. Holy Crap what the hell was that all about? Just heard someone say everything is funneled through the Ukraine to Crimea. The Ukrainians are going to blockade them. The Russians are less than 1 kilometer from Crimea at the Straits of Kerch. For gods sakes they can build a bridge from Ilyich to Kerch and transport anything they need in.

http://time.com/26691/crimean-vote-winners-and-losers/

#161 what bubble? on 03.17.14 at 2:53 pm

Ukraine-Desperation to Save the U.S. Dollar

http://usawatchdog.com/80-decline-in-value-of-u-s-dollar-in-three-years-dr-jim-willie/

#162 jess on 03.17.14 at 3:06 pm

“property club” those exist here as well

‘State-backed mortgage lender sold my buy-to-let properties for 30% of what they were worth and ruined my retirement’

Mortgage Express’ homeloans book is now in the hands of UK Asset Resolution, a Government organisation that has shut it down as quickly as possible regardless of the impact on borrowers

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2581170/State-backed-mortgage-lender-ruined-retirement.html#ixzz2wFSB7eOJ

#163 jess on 03.17.14 at 3:12 pm

… thanks for that Ralph

Bucket shops[edit]CFDs, when offered by providers under the market maker model, have been compared to the bets sold by bucket shops, which flourished in the United States at the turn of the 20th century. These allowed speculators to place highly leveraged bets on stocks generally not backed or hedged by actual trades on an exchange, so the speculator was in effect betting against the house. Bucket shops, colourfully described in Jesse Livermore’s semi-autobiographical “Reminiscences of a Stock Operator”, are illegal in the United States according to criminal as well as securities law.

Nils Pratley – The Guardian, Friday 19 September 2008 writes:
Jesse Livermore 1907
“I had enormous paper profits and the certainty that all that I had to do smash prices still more was to send in orders to sell ten thousand shares each of Union Pacific [a big railroad company] and of a half dozen other good dividend-paying stocks, and what would follow would be simply hell. It seemed to me that the panic that would be precipitated would be of such intensity and character that the board of governors would deem it advisable to close the [Stock] Exchange.”
http://www.theguardian.com/business/2008/sep/19/marketturmoil.regulators

In 1907 John Pierpont Morgan – who, in the days before the Federal Reserve, in effect controlled the US banking system – sent a message to Livermore via a friend: “The market can’t stand much more pressure. As it is, it will be an immensely difficult task to avert a devastating panic. Appeal to your friend’s patriotism. This is a case where a man has to work for the benefit of all.”

The “Oracle”
http://memory.loc.gov/service/gdc/scd0001/2006/20060517001te/20060517001te.pdf

Testimony of J. P. Morgan
Before the Bank and Currency Committee of the
House of Representatives, at Washington, D. C.
Appointed for the Purpose of Investigating an
Alleged Money Trust in “Wall Street.”
Cross-Examined by Samuel Untermyer, Attorney for the Committee.
December 18 and 19, 1912.

#164 airhead princess on 03.17.14 at 3:21 pm

DELETED

#165 Steven on 03.17.14 at 3:37 pm

It is my experience that employers do not want to pay people enough to deal with the incredible expense of having a roof over their head. Therefore except for the elite workers and the rich I don’t see any real support for real estate prices based on proper price to wage metrics. Either the prices must collapse or the people buying will be debt slaves with a limited reproductive potential due to stress and economic hardship.
Frankly I think existing real estate prices relative to wage rates are genocidal. I know the convention talks about intent to destroy but consider the possibility of creating conditions of life that due to negligence and greed destroy the ability of people to thrive and reproduce. A slow indirect genocide done in the name of profit.

#166 jess on 03.17.14 at 3:45 pm

why no jail?

Imran Rasool banned for 11 years

http://www.insolvencydirect.bis.gov.uk/IESdatabase/viewdisqualdetail.asp?courtnumber=INV3691477

THOUSANDS of people have lost their life savings after falling victim to a multi-million pound property scam.

http://www.express.co.uk/news/uk/239770/Police-in-raids-on-land-fraud-offices

Read more: http://www.thisismoney.co.uk/money/comment/article-2581684/TONY-HETHERINGTON-We-paid-2-000-law-firm-home-silence.html#ixzz2wFamhIlI

#167 Retired Boomer - WI on 03.17.14 at 3:50 pm

#142 Airhead princess

First off, I agree Obama isn’t a perfect Prez.

He has been a hell of an improvement over the “conservative” label of George ‘what me worry?’ Bush.
Obama inherited a mess. He and the rest of the elected leaders in the house & senate worked hard to stem a careening economy from total disaster. Did it work? I think so, mostly.

Are we back to before the GFC (greater financial crisis)?
I feel better, my investments have more doubled since 2009. Yes, Fed Debt is growing, taxes here are too LOW in my opinion to pay down the debt.

In MY opinion we spend too much on entitlements (mainly for Geezers) of which I am one. That can be trimmed back

There is a lot that needs some improvement, but it is still a decent place. Don’t like it? Fine, don’t visit it.

#168 Nemesis on 03.17.14 at 3:57 pm

#MusicalMonday #OutOfControl? #RockyHorrorRedux #UnTaper?

[CNBC] – The Fed slipped this one past the market: What’s up?

…”Amid all the “sound and fury” about the tightening monetary policy in the United States, the Federal Reserve slipped by the napping market vigilantes one of the largest monthly expansions of its balance sheet on record.

In the course of February, the Fed’s monetary base expanded by a whopping $104.8 billion, the third-largest monthly increase since the beginning of its asset purchases.

This month looks like it could well be more of the same. During the reserves reporting period between February 19 and March 5, the high-powered money soared by nearly $30 billion, bringing the year-over-year increase to an incredible 36 percent.”…

http://www.cnbc.com/id/101497635

#BonusZen

…”Go see the man who began it, Janet
When we met in his science exam-it, Janet
Made me give you the eye and then panic,
Janet…”…

http://youtu.be/2q0ozkfNJm4

#169 buttminer on 03.17.14 at 3:58 pm

From the Wikipedia definition of a ‘Soft Landing’:

As it stands, these forecasts have very little scientific value and there is not one single verifiable instance of a soft landing following an economic bubble. This is enforced by definition, as any potential bubble followed by a soft landing would, in retrospect, not be deemed a bubble.

Strap in, boys.

#170 crazed and confused on 03.17.14 at 4:17 pm

Hi guys,

I simply don’t get it. I been to open houses since January2014 and prices are lower, now im looking at east van , Burnaby and new west. . they are relisted

http://money.ca.msn.com/banking/homebuyersguide/house-prices-jump-another-10percent-to-dollar406372-4

or unlisted so whats going on

#171 Calgary Ripped Off on 03.17.14 at 5:07 pm

#123 chris (Calgary)

You can thank the farmer friends at the city limits in Calgary, miles and miles of useless land at the northern edge of the city. What exactly are they growing on this land? Hay? Where are the cattle? Can you say total joke? So this is part of why Calgary real estate is so expensive, that and that people are able to pay these prices. The Calgary Auto show is an example of people that have too much time and money, deciding what to buy next, a prime example of pettiness and small minded thinking, when what really matters is health, clean air and water, edible food, and lack of warfare. But most people dont think like this, so I will continue my isolated existence playing chess trying to get away from it all.

Is it really any wonder that houses are so expensive everywhere? That is the nature of buying something that appreciates as it ages-as if houses are fine wine(more like vinegar gone rancid), people want/are forced to get in on the action, because if they dont they end up subsidizing some schmuck that decided to rent from the bank.

#172 espressobob on 03.17.14 at 5:52 pm

#158 Ilona

If you own an ETF like ZCN or XIU and check the ‘holdings’ the PM sector makes up a percentage. Holding a sector fund like RBC PMs just increases ‘concentration’ risk. Sold the DOW? Ouch!

Rebalancing is so much easier.

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

#173 Smoking Man on 03.17.14 at 6:14 pm

#159 Old Man on 03.17.14 at 2:49 pmI don’t know why, but everytime I see the above noted photo caption get this mystical message for an interpretation of sorts. I see its the Smoking Man who has just had a domestic battle with his wife at home, and she took the pet dog inside from the backyard; locked him out; and Smoking Man is now in the doghouse with his beer.

……..

Was thinking the same think. Lol

#174 Bill Gable on 03.17.14 at 6:37 pm

VREB is pumping the zeppelin some more, saying that the next 12 months will ‘break sales records’.

Anecdotally – I saw a blizzard of sold signs, on just about everything but the shopping carts used by the dumpster divers, as I walked though Vancouver’s apartment heavy, West End, today.

This has to be a supply/demand issue….as we see upper end homes sitting for MONTHS, in some tony neighbourhoods.

I think the market is nuts.

Sales of antacids must be booming.

One last quick anecdote and it is a repeat, but I think it is a bellwether. Next time you are paying for your groceries, or at the drug store, heck anywhere…. note how people will put even the tiniest amount on plastic – I think it’s because they have zero cash. * I don’t think they are just collecting reward points.

Many of my home owning coterie think I am certifiably insane to rent a 2 million dollar penthouse….for exactly HALF what the owner lays out in mortgage and endless fees. BTW – They just raised the monthly maintenance fee to $785.00.

Mr. Turner has explained the phenomenon, but up close, and personal – it is awful to see a lot of worried and BROKE people, who are like deer in headlights.

#175 Steven on 03.17.14 at 6:44 pm

#171 The escalation of house prices is what happens when a home goes from being a place to live to being an investment. People lose sight of the fact that ordinary people have to live some where and start families. This is why the 25 point plan of the NSDAP sought to stamp out real estate profiteering and land speculation while allowing private ownership. Real estate is supposed to be a place to live and raise a family. The western world has lost sight of that basic truth and will pay a price for it.

#176 jess on 03.17.14 at 6:48 pm

check out this chart

Here are the data on the banks sued by the FDIC

Bank ($ billions, IFRS, as of 9/30/13)

http://neweconomicperspectives.org/2014/03/dishonest-number-world-libor.html#more-7710

#177 johny on 03.17.14 at 6:56 pm

well look at the russian and us stock market soar today crimea splitting away from ukrain after the people decided to join russia is bullish maybe if greece/italy/spain leaves the euro that would be super bullish ,what a concept that would be

#178 Trojan House on 03.17.14 at 7:08 pm

#167 – Retired Boomer

Whether Obama is black, white, yellow, red it does not matter. What matters is his record. And his record has been awful. Most people blame it on Bush. “Obama inherited Bush’s mess…blah, blah, blah…” That may have been true but Obama has made the problems hundreds of time worse. The debt has increased exponentially under his watch. He’s bailed out the banking industry and the auto industry with taxpayer’s money that will never be repaid. He’s continued wars and started new ones. He’s spied on the entire world and called Edward Snowden and others who tell the truth, traitors. He’s bombed innocent people with his unmanned drones. Under his watch, the number of people on food stamps has also increased exponentially. He has illegally imprisoned thousands of people without the due process of law – basically stomping on the US Constitution. His Obamacare has been a failure and the bill was written by the insurance industry and benefits them only – “if you like your current insurance plan, you can keep it.” Total, outright lie to the American people. Etc, etc.

Americans are a great people and we’re lucky to have them as our neighbours but it’s too bad that most of them have stuck their heads in the sand and go about their day caring only about what’s up with Lady Gaga or Justin Bieber or which Kardashian will be married and divorced in 5 minutes.

Finally, you’re investments doubled because of your taxpayer money bailing out the banks who have largely used that money to pump up the stock markets.

#179 Pope Snugglebums the 666bc (aka Nosty) on 03.17.14 at 7:15 pm

Sunny, beautiful and cool here . . . listening to Running Down A Dream (Tom Petty live) and Springsteen blasting out of the speakers . . . ahh, life is good!

#82 TurnerNation on 03.16.14 at 11:37 pm — “Inheritance Tip – If your adult kid(s) have no tax-free savings accounts, open them and put your money in them.”

Good tip. Our youngest lives and rents in Calgary, but works all over western Canada. Has loads of money coming in, but couldn’t manage a nickel to save his life, so I’ll max out my TFSA contributions to give him an instant pension plan when I move on.

#125 Smoking Man on 03.17.14 at 11:54 am — “We no longer live in a democratic society, mind you we never did.”

Correct. We are surrounded by delusions of grandeur with heavy doses of hypocrisy mixed in and subsequent illusions. But we’re here for a short and good time, so break on thru to the other side!

#142 airhead princess on 03.17.14 at 12:59 pm — “But its OK for him to order spying on the media, crap on the constitution, bully opposition, try to put bullies in the newsrooms, spy on world and business leaders and use that information for nefarious purposes…etc etc etc etc…..”

Add in ‘regime change’, such as Iran in 1953 when the CIA tossed the duly-elected Ayatollah out, and installed the Shah. Add Venezuela, Venice, Ukraine austerity plus Who benefits?, etc. for TPTB because the good ol’ west doesn’t like certain govts. Thank Ogd life is short here in this garbage can of a planet!

#166 jess on 03.17.14 at 3:45 pm — “why no jail?”

Good question. Iceland jailed their bankers for doing roughly the same as JPM, GS, etc. Double standard?

For those interested in Flt. 370:

“Who Would You Rather Trust You Life To?
Flt 370 – ALL Boeings Have BUAP – Permitting Full Military REMOTE CONTROL . . .”

. . . which leads to this.

#180 Rainclouds on 03.17.14 at 7:49 pm

#174 Bill
rent a 2 million dollar penthouse….for exactly HALF what the owner lays out in mortgage and endless fees. BTW – They just raised the monthly maintenance fee to $785.00.

Hi Bill am in a similar situation (sold, now renting in Yaletown). Assuming 25% down, Mortgage of 1.5M, Amortized over 25 Yrs at 1 yr closed 3.09% = $7163.00 + $785 is about 8k per Mo not including taxes.

Is this a correct assumption ?

Thanks in advance

#181 espressobob on 03.17.14 at 8:03 pm

#30 Ralph Cramdown
#131 HD

The surgeon general forgot to warn Ralph about ‘green’ alcohol! St. Patty’s’ day? Just kidding.

#182 Vangrrl on 03.17.14 at 8:17 pm

I was going to say #78 CiCi: Totally agree, sister!
But I must amend that to # 78 CiCi, #113 Amazon girl, # 124 Chickenlittle and #130 HD: Count me in!! :-)

#183 Waterloo Resident on 03.17.14 at 8:21 pm

I’d only spend 500,000 Euro buying a house in Spain if they gave FREE CITIZENSHIP. Residency is not enough.

You said that “a hot wife and kid) flow from borrowing a pile of money (from him) and becoming a homeowner.”

No, sorry Garth, A hot wife is attracted to the guy with money, then she gets him to buy a house then have a kid, then she divorces the guy, keeps the house and half of his stuff.
Now he’s broke and penniless again and he’s back to being a renter once more, but now he has to work his butt off just to pay alimony and child support, there is no way he can climb out of that hole he created for himself, he might as well kill himself. That is all to common a final result of men who form relationships with WOMEN in these modern days.

Garth, you advise guys to develop a balanced portfolio that will get them something close to averaging 10%. Well, unfortunately for most guys, they think with their LITTLE HEAD, and as soon as they have enough money to attract a lady, they swoon all over here and blow the wad trying to impress her. So no savings, no balanced portfolio. Instead they do whatever the misses wants and give her that huge Mc-Mansion and all of the fancy trimming. But look at the 50% divorce rates we are enjoying; the happiness does not last long, especially for the men.

Oh, BTW; all of the technical indicators did an abrupt 180 by noon, so I quickly bought back into UPRO at $97.00 It then ended the day a bit higher at $97.55 So if you sold a few days ago, I’d get back into the markets tomorrow, things are looking okay once more.

#184 Nadine Lumley on 03.17.14 at 8:34 pm

New guidance from the Society of Obstetricians and Gynecologists is warning Canadian women against postponing pregnancy for too long.

The society says some women may be taking too much time to start their families, perhaps because they inflate their chances of successfully conceiving with fertility treatments, if the need arises.

It says women in their 20s and 30s need better reproductive counselling so that they have an accurate grasp of what waiting does to their chances of conceiving. Female fertility begins to decline significantly in the early- to mid-30s; male fertility also declines with age.

“Some Canadian women may be inadvertently postponing pregnancy too long,” says Kimberly Liu, principal co-author of the new guideline.

“There is a sense that women may be overestimating the potential of assisted human reproductive technologies and underestimating the risks and complications associated with delaying pregnancy.”

A lot of women are unaware of the limitations of assisted reproduction, a statement from the society says, as well as the fact that the success rates of these options decline steadily as women hit their late 30s and 40s.

http://m.theglobeandmail.com/life/parenting/dont-wait-too-long-to-have-kids-obstetric-society-tells-women/article4200648/?service=mobile

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#185 Vangrrl on 03.17.14 at 9:11 pm

Oh look! Guy with personal issues is back to rant on greater fool!… #183

#186 Ilona on 03.17.14 at 9:49 pm

#172 espressobob

Thank you! Apparently buying “something old, something new, something borrowed, something blue” is not a portfolio rebalancing formula lol

I didn’t experiment with ETFs yet – have an online TD Waterhouse WebBroker account that makes it easy to buy mutual funds, but no equities (so will try Option 2 of the Global Couch Potato Model Portfolio: http://canadiancouchpotato.com/model-portfolios, selling RBF468 while I’m still making $700+ on it, but keeping TDB652 – just like it, and it’s up again :)

But when I open a TFSA, will make sure that I can buy ETFs with it – although the variety looks overwhelming…

#187 Retired Boomer - WI on 03.17.14 at 10:29 pm

#178 Trojan Horse

I can’t argue with ANY of your points. Yet, when this guy was elected the 1st time we had an old man from AZ and the joke from AK. The 2nd time around we had the Mitt (who wasn’t bad), but as exciting a dry paint surrounded by the usual crowd.
American’s bet on the known guy the 2nd time around.

Frankly it is not the guy At the top who makes -or enforces- the laws. It is the 2 houses of congress the house of representatives, and the senate that spends the money, makes and repeals laws. We have some junk there.

I ignore much of the daily noise as there is nothing I can do about it, except near election times. I also ignore most gossip, much of the internet, most TV. I read books, and watch people. Not nearly as sharp as the proverbial smoking man, but honing my craft daily.

As stated Obama is no prize, but it who won.

#188 OttawaguyRenting on 03.17.14 at 10:34 pm

What a scary piece of advert from the guy flogging dreams..

the poor little girl cartoon..”she has that far away look in her eyes…”
Dad has a suitcase full of Cash Flow

#189 Kris on 03.18.14 at 10:07 am

All valid points about Europe, Garth. But if a fundamental imbalance exists, then it sure begs the question why housing prices in the UK have NOT retreated from their nosebleed levels in years (or arguably decades).