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Another day, another juxtaposition. Is it any wonder the dewy virgins are so confused, now that the rutting season has finally arrived?

On one hand, here’s Royal LePage earning headlines with its latest ‘report’ saying real estate has stirred along with the beavers. “It appears that it took only the slightest hint of spring to bring home sellers out of hibernation,” says our fav CEO rodent, Phil Soper. In fact, LePage claims, “the stage is set for a robust 2014 spring market. This is particularly good news for buyers, as the home price spikes we have seen in a number of cities should be alleviated by additional supply.”

Of course, the higher prices LePage celebrates are good for its agents, but misery for the house-lusty kids. And they might be Sopered into taking the plunge at precisely the wrong moment. That’s because along with Phil’s faux survey and unicorn outlook, there’s some real news suggesting all is not well.

House construction is tumbling, bigtime. Economists didn’t expect what CMHC told them on Tuesday. Housing starts fell 18% last month, and are now at the lowest level since the lights went out back in 2009. Worse, building permits – those indicators of construction to come – cascaded lower by 21%.

When it comes to just condos, the news is worse. Starts on multiple-unit housing dropped 26%, with the big hit coming in Vancouver and Toronto, while the value of building permits cratered 32%.

Hmmm. What shall we make of these numbers?

First (obviously) idle drywallers mean less demand for new housing. Way less, it seems. So how does that square with a ‘robust’ market? It doesn’t. Rodent talk. Second, with construction falling to 2009 levels, this could signal real estate’s coming in for a landing. Will it be the soft landing the banks and realtors have been praying for, keeping prices high but slagging sales? Or will it end up a smoky hole in earth with a tail fin sticking out, bringing plunging volume, soaring listings and fading values?

Third, as this depressing but coquettish blog has suggested for more than a year, it’s all more evidence we’re closer to asset deflation than inflation. Natural gas and bananas (for God’s sake, don’t mix them) may cost a lot more, but sputtering growth is inching us closer to falling incomes and inevitably cheaper houses. In fact, we’d already have them, save for absurdly low mortgage rates. And while the Bank of Canada is in no mood to raise its key rate anytime soon, there’s no controlling the bond market.

The US Fed, as you know, continues to slice its massive bond-buying program. Each cut reduces demand for bonds, leading inevitably to lower prices and higher yields – with three more reductions coming by the end of the year. Figure it out.

Now, none of this will faze Royal LePage one bit, nor deter any moist newbie from joining a bidding war for a sad semi on a trashy street. I fully expect the spring season to be intense as we see the perfect storm of 2.99% mortgages and a paucity of listings. But sales volumes in places like Toronto and Vancouver are running significantly behind long-term averages for a good reason. House prices and debt are at historic highs. Can they continue to march higher together? For how long? What happens when the trend breaks?

Isn’t the Canadian housing market like the US stock market? Both are at all-time peaks. Both are supported by the greatest amount of leverage on record. Both are being fed by oceans of cheap debt. Both have the highest prices, but on less volume. Both are detached from reality. And both will correct.

The difference? Financial investors don’t have 95% debt, and can get out in thirty seconds.

So, your choice. Beavers, or facts.

163 comments ↓

#1 gladiator on 04.08.14 at 6:35 pm

Garth, it’s all relative – depending on who looks at what.

The best example of “relative” to me is this:
“Due to SOPA (Stop Online Piracy Act), you could get in prison for up to 5 years for illegally downloading a Michael Jackson song, which is 1 year more than his doctor got for killing him”.

See? It’s relative. (sarc off)

#2 Frustrated on 04.08.14 at 6:40 pm

When will we see mortgage rates higher

#3 Forzudo on 04.08.14 at 6:40 pm

Don’t worry, those underemployed drywallers will still get massive real estate loans.

#4 mucho on 04.08.14 at 6:44 pm

Amigos, first!

#5 girn on 04.08.14 at 6:45 pm

:)

#6 Herf on 04.08.14 at 6:46 pm

‘“It appears that it took only the slightest hint of spring to bring home sellers out of hibernation,” says our fav CEO rodent, Phil Soper. ‘

And what kind of rodent is he?

#7 whiz on 04.08.14 at 6:48 pm

First!!

#8 Smartalox on 04.08.14 at 6:52 pm

I haven’t read Soper’s report, but based on what you posted here, isn’t his wording carefully chosen to goad SELLERS into the marketplace? Isn’t that what we’re waiting for?

If the cause of bidding wars on shoddy hovels is the lack of quality listings, won’t more sellers in the market lead to more listings, and ultimately lower prices on all homes, as the over-leveraged under cut each other in order to get out ahead of their neighbors?

#9 dienekes on 04.08.14 at 6:53 pm

caught a bit of cross country check-up today.
Talking about foreign workers and Canadas need for them.
Felt like phoning in to say that there are no workers in the busy parts of Canada because nobody can afford to move.

And yes, Canadians are lazy

#10 sideline sitter on 04.08.14 at 6:56 pm

So, now you’re bearish… do I keep my cash and wait for the crash?

#11 Mishuko on 04.08.14 at 6:57 pm

Don’t forget the bacon!!!

What a sad life we would have without the most important food group of pork.

#12 Blase on 04.08.14 at 7:11 pm

Phil? Like Groundhog Phil? Hey, watch out for your shadow!

Morons, your bus is leaving…

#13 Calgary Owner (2nd. Round) on 04.08.14 at 7:15 pm

I don’t see it, Garth. No new homes being built, house horniness intact on the youngsters, rates low for a while, oil production out the ying yang in Alberta, massive infrastructure projects in the works… What will that do to the prices of Calgary inner city properties?

Besides, with all the drywallers having time on their hands, renovations galore in the years to come! ;)

#14 Tony from Calgary on 04.08.14 at 7:21 pm

Markets operate in nano seconds.
Theoretically they could freeze up and/or collapse faster than you could respond, thus 30 seconds may not be enough time.

Both houses and financial markets have their risks. Its disingenuous not to point that out, but I’m guessing some people learned a long time ago that the truth doesn’t sell unless its really juicy.

TFC

#15 Blase on 04.08.14 at 7:27 pm

Calgary will sustain the housing market for the rest of Canada. Everyone wants to live there, especially the rich who pay 10% provincial income tax, the same as the guy pumping gas. Plus because there are no flowers in the ” spring” you don’t have to worry about pollen allergies. And there are breathtaking views of bald prairie, bald nose hill park, and the windy cold July nights are awe inspiring. Not to mention the air quality rating which ties the green city of Windsor. It’s good to be Houston north!

#16 Dentist can't afford a house on 04.08.14 at 7:28 pm

Damn it I wanted to be first

#17 Entrepreneur on 04.08.14 at 7:30 pm

Youth only listen to themselves. Thank goodness that we have internet and Garth Turner to inform them. Just maybe it will dawn on them that the prices are too high and not a good time to buy. Just maybe they will realize that houses do not always go up in value and the downsize to less equity. Maybe, just maybe, they will take a stand away from the realtor and think for themselves.

#18 Blacksheep on 04.08.14 at 7:36 pm

“Housing starts fell 18% last month, and are now at the lowest level since the lights went out back in 2009. Worse, building permits – those indicators of construction to come – cascaded lower by 21%.”
————————————–
These details may be perceived as a harbinger of doom, but I think this would reading the tea leaves incorrectly. We all know the Demand VS Supply equation applies to all things, from Smoking man’s $500 per go ‘ladies’ to Garth’s 1% annual service fees.

#19 Van Isle Renter on 04.08.14 at 7:37 pm

Rodent ® – Gotta love it!

#20 Vlad on 04.08.14 at 7:43 pm

Let’s face it the real question here is: Deflation or Inflation.
If we are faced with long deflation you want to be in cash and no real estate. Renting is better.
However, if we are faced with long term inflation the owning stuff is important. Real estate is a must. Not owning your own home would be a disaster. Short term correction in the market are irrelevant in the long run.
So what are we faced with: long term deflation or long term inflation?

#21 Brian Ripley on 04.08.14 at 7:44 pm

Garth said: “Financial investors don’t have 95% debt, and can get out in thirty seconds.”

And they are getting out. The TSX Real Estate Index price momentum (Y/Y Change) has plunged into the flat line and Toronto’s SFD price momentum has rolled over as well joining Calgary and Vancouver just above zero enthusiasm:

http://www.chpc.biz/housing-price-momentum.html

#22 RunningBackToSaskatoon on 04.08.14 at 7:47 pm

Garth! You speak both lowly and highly of the youth. So perhaps you can help me out.

I am a young professional trying to make a go of it in Regina.. I’ve been renting.. and I’ve fended off instruction from my co-workers to “buy a cheap condo” and settle down.

I am fresh out of university and have no debt.. my just over $10,000 cash.

I read this blog–I’m obviously adverse to real estate–but I am not sure where to park my money.

Your blog has great advice.. but I cannot find anything that would help someone who is only beginning to play this game make some wise decisions early on.

Quit the doom and gloomin’ for a day and write a quick piece on this!

#23 TEMPLE on 04.08.14 at 7:59 pm

Isn’t the Canadian housing market like the US stock market? Both are at all-time peaks.

Except that the stock markets’ nominal peaks are irrelevant when you look at any of the many available valuation ratios. Nominally, yeah, some stock market indexes look high, but who cares about that? Unlike housing, companies generate returns, so what is wrong with indexes setting new highs? Relative to earnings, stock prices don’t look so bad. I’m still finding cheap stocks where I always do: off the beaten path.

Both are supported by the greatest amount of leverage on record.

I am going to go out on a limb here and say that leverage in the stock market is usually backed by more intellectual firepower than in the housing market. Leverage makes a lot of sense right now, too, given the low rates. I don’t think you can fairly conclude that leverage is always bearish.

TEMPLE

#24 Bob Rice on 04.08.14 at 8:00 pm

few homes being built translates into tighter supplies and higher prices..

More debt and more risk. There is nothing good in this. — Garth

#25 James on 04.08.14 at 8:01 pm

Indeed, if you were to (as a young 20-something) approach Questrade or RBC Investing and ask to borrow 95% of your incipient stock market investment, they’d laugh you out the building, or at the very least give you stern advice on the dangers of high leverage.

When it comes to housing, 95% is apparently fine. Dangerous stuff. Canadians have learned that leverage is great when prices are rising, but they haven’t felt the lash of leverage when prices fall.

You’d think they would have learned from past crashes, or crashes in other countries.

#26 Halifax Observer on 04.08.14 at 8:01 pm

Halifax drop in new housing starts leading the country

http://thechronicleherald.ca/business/1198953-housing-starts-take-57-per-cent-tumble-in-atlantic-region

Experts and sellers are concerned about downward trend

http://thechronicleherald.ca/business/1198971-taylor-house-sellers-hope-for-end-to-downward-trend

But don’t worry, Royal Lepage thinks things are going great

http://thechronicleherald.ca/business/1198952-halifax-housing-market-picking-up-says-broker

#27 mitzerboy on 04.08.14 at 8:15 pm

I luv u being coquettish garth

#28 prairie person on 04.08.14 at 8:19 pm

I’m not sure what is going on in Victoria but on my drive to the grocery store today there were three sold signs. These are places the owners couldn’t unload last summer. Is this the effect of the never ending winter on prairies? Is it let’s grab a house while interest rates are under three percent? Have retirees from Montreal flocked here because they thought the PQ was going to win? Certainly, there are fewer and fewer jobs. Victoria has never been a good place for jobs. Usually low pay tourist, seasonal jobs or clerks in stores that have a habit of going out of business. Pedicab pedlars hoping for big tips. Yet, someone is buying houses this spring. I guess being able to afford means we can make the minimum payment and interest rates are never going to go up and if they do, we can rent out the basement.

#29 jan on 04.08.14 at 8:20 pm

#6 Herf on 04.08.14 at 6:46 pm
‘“It appears that it took only the slightest hint of spring to bring home sellers out of hibernation,” says our fav CEO rodent, Phil Soper. ‘

And what kind of rodent is he?

HE’S A RAT !!

#30 Daisy Mae on 04.08.14 at 8:22 pm

#13 Calgary owner: “Besides, with all the drywallers having time on their hands, renovations galore in the years to come! ;)”

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

Well, it homeowners are using HELOCs or LOCs to finance those renovations they’re not really all that smart — just getting themselves deeper and deeper in debt. Duh!

Is it a ‘need’ or just a ‘want’?

#31 Don't Wait Too Long on 04.08.14 at 8:22 pm

#22 You are young. Have a look at this…

http://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

#32 Hawk on 04.08.14 at 8:25 pm

I think in fairness we need to recognize some realities of the stock market for the average investor (little guy) and the I do mean the “stock market” specifically and not the “balanced portfolio”.

On the first day the market crashes only insiders will even be up to speed to react at all, the average Joe is unlikely even to know that the TSHTF much less liquidate everything inside of 30 seconds flat.

By the morning of the second day the average Joe will have his sell order in place. God help him if he has an “average financial adviser” from Edward Jones, Manulife etc etc. Those guys will be busy catering to the Big Fish clients they have and by the time they get his deal done……….he may pretty much be done.

If he has an online account he can put in a “market order” or a “limit order”. The market order means that the brokerage sells it without any checks on price and the limit order runs the risk of not getting executed.

None of this is to deny that stocks are highly liquid comparable to RE, ……but 30 seconds flat……that’s not reality, not for the 99% and there will be a significant loss for them if they want out rather than wait for market to rebound.

Stock markets have not had a meaningful one-day collapse in 27 years. Investors with total liquidity can exit at will. Owners of houses in a protracted market decline usually find themselves trying to dump illiquid assets in the midst of a buyer drought. No comparison. — Garth

#33 Van Isle Renter on 04.08.14 at 8:26 pm

#20 Vlad

So what are we faced with: long term deflation or long term inflation?
++++++++++++++++++++++++++
Both. As the Bearded Swami has pointed out numerous times, RE will drop but things like food, energy and clothing will increase. This is what makes it very tough on people who are invested in non-cashflow producing assets. Dividend paying stocks, REITS, ETFS etc. will all climb with the prices in the goods and services that will become more expensive. RE will get creamed.

The time to grow rich like Uncle Fred by just banking cash and keeping in a savings account is long past. It’s a New World, and that’s OK too, once you know the new rules.

#34 X on 04.08.14 at 8:27 pm

I have had 1 realtor request any referrals for business this week. I am sure that is a reflection of how busy they currently are….

#35 omg on 04.08.14 at 8:32 pm

#25 James – you’re right.

In most of Canada there has not been a meaningful correction in RE prices for 20 years, on the coast it been 30 years for any real correction.

So basically 80% of the people buying houses today have never seen a downmarket. “Real estate is always a good bet” is what their conditioned little minds keep telling them.

My expectation is that we will not see a precipitous drop in house prices in Canada – there is simply too many things supporting prices, current high values are full entrenched in peoples’ minds, and we do not have the same loan quality issues as the US did.

The GREAT CANADIAN REAL ESTATE RESET will be a long grinding decline in real dollar terms as inflation eats away at the value of a house. It could take a generation, but prices in real terms will fall by 50% to 70%.

Of course the only spoiler would be a major spike in interest rates (I am talking a 6% to 10% rise), but that ain’t happening anytime in the next couple years.

#36 OttawaMike on 04.08.14 at 8:33 pm

Meanwhile Ben Johnson and one of the Trailer Park Boys have joined Rob’s re-election team. Ben maintains to this day “Hey man, I never took any of them stereos”

http://www.thestar.com/news/city_hall/toronto2014election/2014/04/08/rob_ford_adds_ben_johnson_trailer_park_boys_actor_to_campaign_team.html

#37 HD on 04.08.14 at 8:34 pm

Sorry OT but worth sharing:

BMO InvestorLine is pleased to announce the launch of new BMO Mutual Funds – Series D,
a suite of low-fee mutual funds that was created specifically for self-directed investors.

BMO Mutual Funds – Series D give you:

Low management fees and investment minimums of only $500

Professional fund management

No commission charges to buy or sell

A way to diversify your portfolio with a comprehensive selection of mutual funds that cover a variety of asset classes and fund categories

BMO Mutual Funds – Series D is available exclusively to BMO InvestorLine clients.

————–

Looks like BeeMo will compete with the TD E-Series.

Best,

HD

#38 Victor V on 04.08.14 at 8:35 pm

http://www.theglobeandmail.com/report-on-business/economy/housing/housing-starts-slow-more-than-expected-in-march/article17871968/

Canadian housing starts fell more than expected in March and building permits dropped sharply in February, according to data released on Tuesday that suggests the country’s robust housing market is cooling.

Volatility in the housing data and an especially hard winter may explain some of the unexpected weakness in the data, economists said. But the figures still bolstered expectations that home building was starting to slow after a boom that observers have warned is unsustainable.

#39 Castor Canadensis on 04.08.14 at 8:35 pm

Well folks, Garth is right most of the time,but no one knows everything.Proof? No PQ victory and beavers do not hibernate(they were not asleep)

#40 Smoking Man on 04.08.14 at 8:36 pm

The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.

Marcus Aurelius…..

As I have said on previous posts, the young are gone, the individual murdered my the teachers. Chasing acceptance with extremist religious forthrightness.

Saving trees, murdering the auto, especially ford’s, they lust for granite and hardwood so they can proudly create a shrine for there expensive obedience certificate.

They are doomed, I’m following, Robyn Doolittle, and Daniel Dale from the Toronto Star for shear amusement… And I get my money’s worth….

#41 Porsche on 04.08.14 at 8:46 pm

Well in Deadmonton it’s booming. There’s more Sold signs then For Sale signs when driving around.

Shinglers are working on top of every third roof in my neighborhood and it’s all cash work. Sorry taxman.

#42 Calgary Owner (2nd Round) on 04.08.14 at 8:47 pm

@ #30 Daisy Mae on 04.08.14 at 8:22 pm

#13 Calgary owner: “Besides, with all the drywallers having time on their hands, renovations galore in the years to come! ;)”

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

Well, it homeowners are using HELOCs or LOCs to finance those renovations they’re not really all that smart — just getting themselves deeper and deeper in debt. Duh!

Is it a ‘need’ or just a ‘want’?

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

Well, that’s a big IF (or as you call it, “It”). What if these hypothetical homeowners are actually using their play money, without touching their portfolios or their big company pension plans? It can’t be that bad in Canada that no one remembers what being financially stable looks like.

Duh yourself!

#43 OMG on 04.08.14 at 8:51 pm

OMG Garth you are still talking about a housing crash after now 5-6 years!!!! Very simple its called Demand and Supply. Huge demand (at least in Toronto) and no supply = high prices.

#44 Freedom First on 04.08.14 at 8:59 pm

Nice post today. Love the way you write your messages to people on a daily basis, always passing on the truth about what real financial wisdom is, laced with wit, humour, and sexy superlatives. I consider this blog a gift. thank you Garth.

Ahhhhhh…..being diversified, balanced, liquid, and debt free. I always like putting Freedom First. I compare Freedom First to being vulnerable to interest rates rising, or any other event which could infest my life with wealth eating rodents, such as job loss, MIL’s, financial liars/ evil people, pregnancy, hormonal brain freeze to the point I can’t think and lose my balls…..etc. Today…..Canadian housing market: “Red Alert”. Rule of 90. No exception. Ever.

#45 Victor V on 04.08.14 at 9:05 pm

Should unemployed single mother sell her house?

http://www.thestar.com/business/personal_finance/2014/04/06/should_unemployed_single_mother_sell_her_house.html

Clara has $87,000 in various forms of savings. This includes $50,000 in a registered retirement savings plan (RRSP), $20,000 in guaranteed investment certificates (GICs) and $17,000 in her tax-free savings account (TFSA). She is withdrawing up to $2,000 a month from these accounts to help pay her bills.

“I am very good at reducing costs, but at this point there is absolutely no fat to cut,” Clara says of her living expenses totalling $3,400 a month. She has no car, pension or benefits.

Clara knows that this can’t continue because it’s a downward spiral, but wonders what to do. Should she continue to draw on her investments while looking for a job, or sell her home and rent? Clara doesn’t want to sell now as the basement is in disrepair. She also worries about retirement and what she’ll have to live on.

#46 takla on 04.08.14 at 9:07 pm

get out in 30 seconds garth ,that may be 29 seconds too late with high frequency tradeing what it is today.Of course the stock market is over bought and will correct soon,Anyone with money in this grand Ponzi has a bigger set then me.Its all about preservation of wealth from here going foreward.

This blog is getting scary again. — Garth

#47 Thomas on 04.08.14 at 9:12 pm

Ottawa condo market looks atrociously bad. Supply is at way record highs. Condo fees are ridiculously high and will be going even higher with all the double digit increases in utilities (hydro, natural gas, water). You have to be nuts to buy into this type of a market.

#48 KommyKim on 04.08.14 at 9:21 pm

RE: #31 Don’t Wait Too Long on 04.08.14 at 8:22 pm
#22 You are young. Have a look at this…
http://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

That’s a pretty weak premise. It assumes that a person will be able to annually contribute the same annual dollar amount between the ages of 21-30 as they would between the ages of 30-70.
Peak income years are between the ages of 40-55. Not to mention inflation over a 50 year span!

#49 Millenial on 04.08.14 at 9:25 pm

# 16 Dentist can’t afford a house
____________________________________________

Me neither.

#50 KommyKim on 04.08.14 at 9:28 pm

RE: #46 takla on 04.08.14 at 9:07 pm
Of course the stock market is over bought and will correct soon,Anyone with money in this grand Ponzi has a bigger set then me.Its all about preservation of wealth from here going foreward

With a simple TSX index ETF such as XIC paying a 2.5% dividend yield, why not just ride the roller coaster in a balanced portfolio until it comes back to even and then some?

#51 A Yank in BC on 04.08.14 at 9:33 pm

Garth.. I can certainly see housing in Canada as being “detached from reality”.. but I would hardly characterize the S&P in the same manner. It’s 18 times trailing earnings and about 16 times next year’s. Not exactly nosebleed territory.

#52 condo candy on 04.08.14 at 9:40 pm

Meanwhile here I’m Vancity, the infamous Olympic Village and other neighboring condo complexes have been on sale for 5-7 yrs and still are not sold out, and thousands of others are in various stages of construction, the false crack area is gonna be ground zero for condo crash

#53 PJ on 04.08.14 at 9:41 pm

At 2.99%, even I was tempted to break my ”no debt” rule and buy a house in Rockland this year.

#54 Old Man on 04.08.14 at 9:48 pm

Mony a mickle maks a muckle. Keep the heid. Caesar scunner yer aff yer heid.

#55 ss on 04.08.14 at 9:51 pm

#43 OMG

Huge demand is due to people buy 2rd or 3rd homes. That will be gone the second home price starts to drop. For market index ETF, at least you can average down, but for houses, you are trapped forever unless you cut and run.

#56 Chickenlittle on 04.08.14 at 9:51 pm

#22 RunningBackToSaskatchewan:

Go back to January26 of this year and read that one and I think one or two before and after. I found them very helpful!

It’s hard to know where to begin, isn’t it?

#57 Yuus bin Haad on 04.08.14 at 9:52 pm

Oh, primarily nocturnal, large, semi-aquatic rodents. I thought you meant “rodents”!

#58 takla on 04.08.14 at 9:53 pm

garth”this blog is getting scary again”…There has been flash crash’s in the past caused by HFT garth you know this.These technics are alive today as witness in sudden 10-20 dollar drops on low volumes in the metals markets.

#59 KillaBoy on 04.08.14 at 10:01 pm

Hopefully you’ll tell us dewy virgins when the stock markets are about to correct so we can sell in time.

Own individual stocks? Now would be good. — Garth

#60 not 1st on 04.08.14 at 10:03 pm

“Stock markets have not had a meaningful one-day collapse in 27 years.”

—-

I just about choked on my supper when I read that;

– In 2001 after 9/11, the DOW dropped more than 1000 points in a couple days.

– In 2008 at the Lehmen collapse, the DOW fell more than 700 points in 1 day.

– In Q1 2009 the markets had multiple days with 500+ point drops

– In 2010, the infamous flash crash occurred when the DOW fell 800 points in a matter of hours.

Nothing has come remotely close to 1987. Most of your examples were followed by rebounds. Like I said, no meaningful one-day collapse in 27 years. — Garth

#61 Moist. The word is moist. on 04.08.14 at 10:06 pm

Something something “coquettish blog”.

Yea no kidding, Garth. Right from the first paragraph. Still haven’t figured out if you’re making fun of the almost-sexual attraction dumbasses have to real estate, or whether you’re just being frank about what’s going on in the minds of gentlemen your age. Or is it both?

#62 Hubris on 04.08.14 at 10:08 pm

No54 Old Man
Michty me. Is there anither Loon on here?

The Chiel

#63 My Life is a Pile of Shit on 04.08.14 at 10:11 pm

The thing that will crash the housing market is a recession, and that will bring down the stock market as well. (If higher interest rates crash the housing market, they will bring down REITs as well.) If stock investors as a group want out, they will create a bear market, and stocks will crash harder than home prices. And therein lies the illusion of stock liquidity. The moment when you, and everyone else, want out “in thirty seconds,” you have to accept a discount of 20 – 50% off the peak. You can hold stocks for a recovery, but you can do the same with real estate. A recovery in the economy (after a recession) will revive both stocks and housing.

Both stocks and real estate have risks, and they may even have a high correlation. Garth, for you to write as if stocks have no risk, while real estate has massive risks, is biased and irresponsible.

Nor us it what I wrote. Risk abounds. Combine that with extreme leverage and an inefficient market, as with real estate, and it far exceeds financial asset danger. — Garth

#64 quebec economist on 04.08.14 at 10:18 pm

A little pure economics. Very much pertinent.

A recent paper (2007) by a very well know economist and statisticien in US, Edward Leamer has shown, with empirical facts that :

Housing IS the Business Cycle.

(for a very math/econ read go to:http://www.nber.org/papers/w13428)

but basically what he has shown from historical data is that housing starts and the change in housing starts, are the best forward-looking indicator of the economic cycle. To bring that closer to layman terms…a drop in housing starts and of permits is the best indicator of a coming recession. He has shown that this is a better indicator then GDP, export losses, debt ratio or level of unemployement.

So Garth, I think things should get ugly, from my historical data it should be by september…however everything happens much faster now, it might in june…

I believe Leamer will be awarded a Nobel prize in economics for this important contribution.

#65 Derek R on 04.08.14 at 10:46 pm

#62 Hubris on 04.08.14 at 10:08 pm speirt:
Is there anither Loon on here?

Aye, min. Loons an quines. We’re aawey. We jist keep oor heids doon maist o the time.

#66 not 1st on 04.08.14 at 10:48 pm

#22 RunningBackToSaskatchewan

Take it from a fellow sask resident all my life. Things are good here now, and I hope they continue, but the reality has always been that Sask is a one trick pony – raw resources and those cycles don’t last forever.

This is no silicon valley and there are very few value added jobs being created. A lot is in primary construction (housing, oil, mining) and service sector (health care, fast food, support services) and then of course agriculture which has its own ups and downs.

I wouldn’t touch a house in Regina right now.

#67 AK on 04.08.14 at 10:48 pm

#4 mucho on 04.08.14 at 6:44 pm
“Amigos, first!”
====================================
#7 whiz on 04.08.14 at 6:48 pm
First!!
====================================

Not to worry. Therapy is available for both you Deadbeats!!

DR. Wayne has several opening this week… Book now..

#68 Sheane Wallace on 04.08.14 at 10:55 pm

#46 takla on 04.08.14 at 9:07 pm

get out in 30 seconds garth ,that may be 29 seconds too late with high frequency tradeing what it is today.Of course the stock market is over bought and will correct soon,Anyone with money in this grand Ponzi has a bigger set then me.Its all about preservation of wealth from here going foreward.
……………………………………….

It depends which stock market you are talking about.
US stock market is slightly overvalued and overbought, not severely.

Any correction would be temporary and with interest rates going nowhere in short to mid term I think DOW could easily hit 20 000 while some other relatively undervalued markets (Europe, Brazil) could easily double.

In environment of rate suppression for a prolonged period of time it is the chase of yield that will drive dividend paying stocks up.

It would be very surprizing but I bet few years down the road when inflation shows up and bonds decline there would be mass-exodus from bonds and into stocks, so DOW 30 000 could be in the cards.

Of course the logical alternative would be gold and it would have it’s moment but dividend paying stocks would be a preferred and encouraged alternative investment.

If stock markets falls significantly we are in a depression, it is that simple.

#69 Sheane Wallace on 04.08.14 at 10:59 pm

#64 quebec economist
………………………
There is no Business cycle, there is the Credit cycle.
However in the current conditions reduction of credit will drive depression and bank failures so it would not be allowed. Credit would be channelled in different venues. When money velocity picks up we will get the inflation and gold will skyrocket.

#70 AK on 04.08.14 at 11:04 pm

“Isn’t the Canadian housing market like the US stock market? Both are at all-time peaks. Both are supported by the greatest amount of leverage on record. Both are being fed by oceans of cheap debt. Both have the highest prices, but on less volume. Both are detached from reality. And both will correct.”
====================================
The S&P 500 is currently trading @ a PE of 17X.

I would hardly call it “Detached From Reality”.

#71 Jon B on 04.08.14 at 11:04 pm

I keep wondering when all those young buyers lusting for over-priced real estate will start to Soper-up and realize they will be making the biggest financial mistake of their lives buying in at current prices. It is beyond crazy.

#72 Angela on 04.08.14 at 11:05 pm

The difference also between US and CAN is that most house owners have more than 10% equity on their detach homes. And owners can’t just walk away or won’t.

Condos are a different story…

#73 Jon on 04.08.14 at 11:06 pm

Smoking man what are you talking about with ford the stock was killed in 2009, they didn’t take a bailout and and have been rated amongst the highest quaility and the stock price reflects it, get out of the 80’s. Ford has gone up about 700 percent since the crisis.

Omg number 35 were you in vancouver when the hong kong crisis dropped west side prices 30 percent? Wasnt 30 years ago, get real…

#74 Andrew Woburn on 04.08.14 at 11:10 pm

#28 prairie person on 04.08.14 at 8:19 pm
I’m not sure what is going on in Victoria but on my drive to the grocery store today there were three sold signs.
========================

Nanaimo is also moving. March sales are up 53% over last March although the prior March was unusually low. Unemployment is down to 4.5% which may be a factor. Some houses in the north part are selling for as much as $100K over assessment.

Parksville/Qualicum sales are up by 72% but I am not sure what is going on pricewise as the March average price of $394K is about $50K more than the median price.

http://www.vireb.com/assets/uploads/03mar_14_vireb_stats_package_54531.pdf

#75 Sheane Wallace on 04.08.14 at 11:14 pm

#63 My Life is a Pile of Shit
…………………………………………..
Stocks are the economy, they pay dividends and are assets. There will be global energy, pharmaceutical companies that will be increasing profits and dividends in the years to come as the world is getting richer.

Don’t be confused by the decline of certain western economies, the world economy is not declining.
Europe would be very stable for a very long time, Asia is booming. They might slow down but will be growing.

The trick is to escape the sinking ship and diversify internationally and in future powers: BRICS + Europe.

A house is a liability (property taxes, repair) not an investment. Houses became ‘an investment’ thanks to banks advertisements, 3 generations ago there were no mortgages, one did buy a house with hard cold cash.
Credit enslavement through mortgages is reaching it’s pick and can only decline.

“The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.”

Marcus Aurelius

#76 Son of Ponzi on 04.08.14 at 11:15 pm

# 64
So Garth, I think things should get ugly, from my historical data it should be by september…however everything happens much faster now, it might in june…
————————-
Interestingly, Chinese Horoscopes for the Year of the Horse are also predicting that the autumn of 2014 will not be favorable for Real Estate.

#77 Ed on 04.08.14 at 11:15 pm

Just read your previous post about Owe and TFSAs. Told my wife about it and she came up with a great idea. In a few years we will be retired and our kids will be starting out as highly paid professionals. We won’t have extra cash sitting around to put into our TFSAs, but the kids will. If what you say about Owe is correct, each of them will be able to sock away 10 large in their own TFSAs, and another 20 large of TFSA space will be available to them under their parents’ names. Cool! I feel marginally closer to 1%.
All of this is fitting, somehow, as the kids provided us with RESP investment space for a couple of decades. It turns out they didn’t need the RESP money because of full scholarships and negligible additional costs due to living at home–so they gave us back all the RESP money. Now we will be able to return the favour by giving them our tax-free investment space. Don’t tell anyone about this…if it catches on they will change the rules.

#78 Sheane Wallace on 04.08.14 at 11:32 pm

RE: #46 takla on 04.08.14 at 9:07 pm
Of course the stock market is over bought and will correct soon,Anyone with money in this grand Ponzi has a bigger set then me.Its all about preservation of wealth from here going foreward
……………………………………….

put 70 % of your portfolio in internationally diversified dividend paying ETFs and companies (40 % of that in energy, commodities and agriculture), put 10 % in gold/platinum/silver, leave 20 % in cash (euro, Singapore dollar) for future market interventions and to adjust for market crashes , adopt passive portfolio strategy, rebalance once a year and enjoy life.

#79 DocInWaitingRoom on 04.08.14 at 11:45 pm

Garth looks like we got our wish next Zillow for Canadians instead of bs cmhc or “royal” hyne websites

http://m.theglobeandmail.com/report-on-business/economy/housing/dangers-lurk-in-dearth-of-solid-housing-market-data-economist-warns/article17786461/?service=mobile

#80 shawn on 04.08.14 at 11:50 pm

Sir John A MacDonald, Insurance Executive?

Last post yesterday by Joe Cambell said:

just end income tax and I would be happier.

however as Sir john built our country on tax avoidance for the rich through insurance at the company he chaired(manulife) i wouldnt expect tax equality any time soon.

******************************************
Well, I don’t know if tax avoidance was the reasons but Prime Minister John A MacDonald was indeed president of an insurance company after he left the PMO.

In 1887 he was the first president of the Dominion of Canada General Insurance company.

A few years ago I owned some shares in E-L Financial which owned the Dominion of Canada General Insurance Company.

In 2013 the Dominion was sold to Travelers Insurance (not Manulife)

E-L Financial is majority controlled by the Jackman family.

The Dominion of Canada General Insurance Company has been making money almost every year for 127 years now.

Those who don’t believe in stocks and who worry about high frequency trading and black swan events should think about that.

While you worry the Jackman familys of this world grow richer through compound returns.

Do you realize what 127 years of compounding at a rate higher than inflation will do for wealth?

The best time to start a dynastic wealth fund was at least a 100 years ago. The best available time is right now.

Have you started?

Also can anyone please direct me to a good human cryogenic service?

#81 shawn on 04.08.14 at 11:55 pm

Business Cycle?

Quebec Economist at 64 says:

A recent paper (2007) by a very well know economist and statisticien in US, Edward Leamer has shown, with empirical facts that :

Housing IS the Business Cycle.

*******************************************
And that may be important for home buyers indeed. As for stock buyers Buffett has said he ignores the business cycle and macro economics and focuses on value and getting a wonderful business at a decent (or preferably indecent) price.

#82 shawn on 04.09.14 at 12:06 am

Gasoline Inflation Math

Sheane wallace later yesterday’s post said:

As for Canada current prices are 1.33 and I do happen to remember 50 cents 12 years ago.

******************************************
Assuming your memory of both the price and the number of years is accurate that would be 8.5% inflation per year. Amazing how it compounds, no?

I like it better when my investments compound at that rate or higher.

In reality I think 50 cents was further back than 12 years ago. More like 25.

Anyhow yes some things have inflated a LOT and many other things not so much.

It’s increasingly the case that retailers have many price points. Those who want to shop around aggressively can live cheaply. Most of us don’t have the time.

Anyone who spends tons of energy doubting the official inflation numbers is just wasting their time in my opinion.

If inflation is high in spots, maybe invest in companies in that sector.

And, if bread is expensive, buy Cake.

#83 bill on 04.09.14 at 12:21 am

#6 Herf on 04.08.14 at 6:46 pm
rattus lenulus

#84 Jim on 04.09.14 at 12:24 am

A man is suing his elderly mother’s nursing home in New York for one million dollars after seeing a picture of his mother stuffing dollar bills down a male strippers’ underwear in the recreation room at the nursing home. The stripper was hired by staff for residents’ entertainment but the lawsuit alleges the mother was defiled. From the Vancouver Sun:

“Hiring male strippers to perform for the defendant’s nursing-home patients was a serial occurrence.”

Youngblood’s lawyer John Ray said: “Bernice Youngblood has lived 85 years as a traditional Baptist, hard-working lady. And now she has been defiled. We will be seeking at least a million dollars.”

http://www.vancouversun.com/news/York+nursing+home+sued+hiring+male+strippers/9716018/story.html

#85 bill on 04.09.14 at 12:25 am

or rattus inlicitatorus ?

#86 bill on 04.09.14 at 12:36 am

how about rattus soperi?

#87 Fiendish thingy on 04.09.14 at 12:41 am

I guess the builders in Maple Ridge didn’t get the memo about dropping housing starts.
There are over a dozen projects off of 240th in the Albion area of Maple Ridge, with probably 200-300 homes in varying stages of construction. The developer and realtor packed city council was even kind enough to approve new, 17 foot wide lots, down from the previous minimum of 25 feet.
Sadly, a recently completed town home complex with no units sold in the few months they’ve been on the MLS, has dropped the price (starting in the mid $200’s) by $10,000, but only for limited time, until the end of April!

This same complex has already sent out multi page ads, promoting $39,000 in free upgrades, 3 years of free Internet and cable, 3 years of reduced property taxes and strata, and Don Cherry himself is promoting special financing that any household earning $21 an hour can qualify for- that means two crazy kids working at McDonalds and Walmart for minimum wage ($10 hr in BC) can qualify for 25 years of debt laden misery.

#88 Whinepegger on 04.09.14 at 12:42 am

@63 quebec economist

Very interesting paper: http://www.nber.org/papers/w13428

Portion I found most concerning because it seems to reflect Canada’s current RE circumstance is found on page 35.

“Paul McCully(2007) has insightfully applied Hyman Minsky’s(1986) theory of the financial cycle to housing.
Minsky identifies three types of loans: hedge finance, speculative finance and Ponzi finance. Hedge loans support the acquisition of assets with current profits
sufficient to cover the interest charges and amortize the debt. Speculative loans back assets with current profits enough to cover the interest charges, but these loans require growing profits to pay down the debt. Ponzi loans back assets with current profits too low even to cover the interest charges.

Substitute “income” for profits to get a story of the housing financial cycle. In the first phase of the housing financial cycle, after a recession, heightened lender concerns about risk allow homebuyers to qualify for loans only if they have income levels high enough
both to service the debt and amortize the loan – that’s hedge financing. Later, after the period of heightened risk avoidance turns to normal risk concern, loans are given to buyers who can afford to pay the interest but
who must rely on rising incomes or rising home values or falling interest rates to amortize the debt – that’s speculative financing.
Next, after a period of prosperity and rising home prices, lenders forget all about risk, and loans are given to buyers whose incomes are not enough even to service the debt – Ponzi financing. Ponzi borrowers who qualify on the basis of teaser rates or negative amortization rates face a reset/recast reality that can be dealt with only if their homes appreciate in value. ”

Based on that application a recession may not be far off. This will not end well.

#89 prairie person on 04.09.14 at 12:49 am

Local

Winnipeg Free Press – ONLINE EDITION
Manitoba building permits plunge

#90 Chief Keef on 04.09.14 at 1:07 am

Vancouver is booming. Luxury cars everywhere. Tsur Somerville announced today in effect to either buy a condo or move out. Traffic is getting worse even with the trains. Huge developments at Marine Drive and Oakridge. Viva La Condo

#91 World According To Garth on 04.09.14 at 1:07 am

Just Us – not justice

LARGE civil unrest in USSAmerika after 2015.75

http://armstrongeconomics.com/2014/04/08/sec-lawyer-confirm-govt-will-do-nothing-to-big-institutions-ever-american-corruption-at-its-finest/

#92 Ralph Cramdown on 04.09.14 at 1:29 am

#64 quebec economist — “Housing IS the Business Cycle.”

Yes, good paper. One of the things Bill McBride at Calculated Risk has been stressing is that residential homebuilding typically leads other sectors out of a recession, priming the cycle. And since there has been such an oversupply, debt overhang and damaged credit in the US this cycle, that took a lot longer to start happening, retarding the recovery.

I like this quote from the paper: “But during the “bubble” that is now leaking, it was the smaller homes in the lower-priced zip-codes that experienced the greatest rates of appreciation. That run-up in relative prices of the less-expensive homes could be permanent if innovations in finance have permanently increased the fraction of homeowners, raising the relative demand for cheaper homes. But I doubt it. In 2007, all the anecdotes suggest foreclosures are differentially favoring the lower-income neighborhoods, just as do the pink slips of labor market dismissals.”

This is a good description of Toronto right now. You can see in the occasional house that has sold and resold in a high priced neighbourhood within 5 or 10 years that price appreciation hasn’t been huge, but the prices of crummy semis and row houses on narrow lots in marginal neighbourhoods have skyrocketed, with many people espousing the fervent belief that we’re running out of SFH and all neighbourhoods close to downtown have nowhere to go but further up.

#93 betamax on 04.09.14 at 1:57 am

My friend working in roofing in Vancouver says the market is the deadest he’s seen in 20 yrs in the business. Before, they were booked 6 mths in advance. Now the phones are dead and the work is drying up. A couple of roofing companies have already closed their doors due to lack of business. And the companies still in business are so competitive that to get contracts they have to bid so low that they’re not making any money off the deal — they’re basically working just to stay working.

It’s springtime, but for the roofing business it’s still the dead of winter. Get your mittens out, campers. Groundhog day is here and it looks like it’s going to be long, cold one.

#94 Fortune500 on 04.09.14 at 2:01 am

A lot of people say Garth is wrong because a correction has not taken place since he started calling for one in 2006. This ignores Keynes’ very valid observation that, “The market can remain irrational longer than you can remain solvent.” We are all probably lucky that we weren’t Hedge Fund managers back then hoping to make a bundle on the coming ‘collapse’.

I don’t think many would have predicted the massive government intervention that took place to maintain support for this bubble, nor just how engrained the cult of home-ownership had become in Canada. After all, it wasn’t that long ago that Canadians were known as prudent savers who avoided risk.

BUT (and that’s a big but), the fact remains that prices have become detached from reality (Price to Rent, Salaries, debt levels, etc.). Anyone who thinks this will never correct clearly hasn’t taken the time to look at the numbers and project into the future. Eventually something will give and prices will more accurately reflect fundamentals once again.

The question to me is whether someone entering the market NOW and putting most of their savings into this one asset is truly smarter than Garth. Most seem to think they are, but it is sure one expensive bet to make …

#95 Humpty Dumpty on 04.09.14 at 3:06 am

This English group of pack rats says different…

Toronto, Vancouver and Calgary have been ranked as the three best places out of 50 cities around the world in terms of where best to invest in real estate for the long term, according to a centuries-old London real estate firm.

Their star ranking doesn’t come so much from short-term metrics like return on investment, but their longer term “resilience” — a stellar combination of “low vulnerability and high adaptive capacity,” says the unusual report, more than three years in the making, by the U.K.-based Grosvenor Group.

Adding to that ability to rise above the cyclical ups and downs of the real estate market is the fact all three Canadian cities have a “high level of resource availability” and “are well governed and well planned.”
In fact, they beat out London, New York and even Chicago, ranked as No. 4, for their strong investment potential over the coming decades.

http://www.thestar.com/business/real_estate/2014/04/09/toronto_vancouver_calgary_rated_tops_for_real_estate_investment.html

#96 Humpty Dumpty on 04.09.14 at 3:14 am

Bananageddon…

Scientists have warned that the world’s banana crop, worth £26 billion and a crucial part of the diet of more than 400 million people, is facing “disaster” from virulent diseases immune to pesticides or other forms of control.

http://www.independent.co.uk/news/world/politics/bananageddon-millions-face-hunger-as-deadly-fungus-decimates-global-banana-crop-9239464.html

#97 Tony on 04.09.14 at 3:44 am

The U.S. stock market has always gone up right before earnings season and during the first two-thirds of earnings season and has always fallen after earning season ends. Historically the market always falls on April 15th and April and May are two volatile months. House buyers should always look at replacement costs like Ross Kay states on his blog but alas most buyers are daft at least the ones buying homes presently are.

#98 OneMoreThing on 04.09.14 at 4:39 am

Who the hell parks like that!

#99 Where's The Money Guido? on 04.09.14 at 4:46 am

Re: #32 Hawk on 04.08.14 at 8:25 pm

I think in fairness we need to recognize some realities of the stock market for the average investor (little guy) and the I do mean the “stock market” specifically and not the “balanced portfolio”.

On the first day the market crashes only insiders will even be up to speed to react at all, the average Joe is unlikely even to know that the TSHTF much less liquidate everything inside of 30 seconds flat.

By the morning of the second day the average Joe will have his sell order in place. God help him if he has an “average financial adviser” from Edward Jones, Manulife etc etc. Those guys will be busy catering to the Big Fish clients they have and by the time they get his deal done……….he may pretty much be done.

If he has an online account he can put in a “market order” or a “limit order”. The market order means that the brokerage sells it without any checks on price and the limit order runs the risk of not getting executed.

None of this is to deny that stocks are highly liquid comparable to RE, ……but 30 seconds flat……that’s not reality, not for the 99% and there will be a significant loss for them if they want out rather than wait for market to rebound.

Stock markets have not had a meaningful one-day collapse in 27 years. Investors with total liquidity can exit at will. Owners of houses in a protracted market decline usually find themselves trying to dump illiquid assets in the midst of a buyer drought. No comparison. — Garth

Yeah, that worked well for me when I tried to get my money out of the Canuck market starting in September 2008 when TSHTF in the US and Vancity’s partner (Credential) obfuscated my order for more than 4 months and I lost 50% of my investment just as the bottom hit. IIROC, BCSC, OSC all laughed at me cuz I was a bit player.
They wouldn’t let me speak at the AGM in 2009 when they found out the topic of my presentation, which you have to provide beforehand.
[email protected]#$ ’em all. Thieves !!!!!
The game is rigged for the little guy with <$1 mil.

#100 World According To Garth on 04.09.14 at 5:46 am

but basically what he has shown from historical data is that housing starts and the change in housing starts, are the best forward-looking indicator of the economic cycle. To bring that closer to layman terms…a drop in housing starts and of permits is the best indicator of a coming recession. He has shown that this is a better indicator then GDP, export losses, debt ratio or level of unemployement.
———————————————————–

So in other words, the chart below means the US is NOT in a recovery anymore…..

http://www.globalresearch.ca/the-us-housing-market-is-still-flat-on-it-back/5374789

#101 Scarlem Kid on 04.09.14 at 7:01 am

You mean I shouldnt drizzle gasoline over my bananas in the morning!

#102 neo on 04.09.14 at 7:07 am

Nor us it what I wrote. Risk abounds. Combine that with extreme leverage and an inefficient market, as with real estate, and it far exceeds financial asset danger. — Garth

Excuse me but isn’t buying on margin the highest it has ever been in the US stock market? You only do that when you have little fear of the downside risk (QE induced). There is extreme unsustainable leverage in both.

You cannot buy a stock with 5% down. — Garth

#103 Buy? Curious? on 04.09.14 at 7:22 am

Garth, the reduction in building permits means that supply will be reduced. That will increase demand as more and more immigrants come in. We will party like it’s 1999!

You can’t make love in a balanced portfolio.

#104 pbrasseur on 04.09.14 at 7:29 am

Isn’t the Canadian housing market like the US stock market? Both are at all-time peaks. – Garth

The stock market at an all time peak? In nominal terms sure but in real terms it’s not even close and that’s what matters.

This is a misleading statement, at best…

Markets are at record levels. Fact. — Garth

#105 unbalanced on 04.09.14 at 8:07 am

To # 82 Shawn.

I have a 1997 truck with 100 liter gas tank. In 1999 I paid $ 37.00 to fill the puppy, which is 37 cents a liter.
Honest !!!

#106 SBB CFF FFS on 04.09.14 at 8:40 am

Garth –

did you spend all winter in Florida? Housing starts were down in March because of foul winter weather, and should rebound this month. Geez, the American media explained away all the soft US numbers during the winter not to the incompetence of the Obama administration, but foul weather. The same should be true here, too.

Big drop from February. — Garth

#107 Smoking Man on 04.09.14 at 8:50 am

#73 Jon on 04.08.14 at 11:06 pm

Smoking man what are you talking about with ford the stock was killed in 2009, they didn’t take a bailout and and have been rated amongst the highest quaility and the stock price reflects it, get out of the 80′s.
Ford has gone up about 700 percent since the crisis.

Omg number 35 were you in
vancouver when the hong kong crisis dropped west side prices 30 percent? Wasnt 30 years ago, get real…
………

My reference to Ford was as in.

Rob Ford.. Doug Ford….

#108 Joe on 04.09.14 at 8:56 am

Every possible scenario will be implemented to persuade the sheeple to ante up.

Houses are historically the largest financial commitment people will ever make.

The monster computers are programmed and used by the banks to manipulate the people, like lambs to the slaughter.

They foresee all scenarios miles down the road, wash rinse and repeat.

The brainwashed are just doing what they are programmed to do, strap on the yoke assume a debt load and die.

It’s never been any other way, it’s just continually being refined.

Regardless of what people want this scenario only has one outcome, pain and suffering for many well intentioned consumers.

The low interest rates are a great incentive but wait in till they begin to rise after all the marks are in.

It’s a formula, the computers calculate who will hold em and fold em when the dealings done.

It’s truly unfortunate, most people feel they have no other option when they are being programmed to feel like losers unless…..

#109 shawn on 04.09.14 at 9:00 am

Where’s The Money Guido? (post 99)

Guido while you were selling near the bottom in late 2008, I was buying. Your former money is in the account of those who bought low. Your broker certainly does not have your (former) money.

It’s always nice to use a broker rather than self directed, that way you have someone to blame.

#110 shawn on 04.09.14 at 9:05 am

Gasoline Prices

To # 82 Shawn.

I have a 1997 truck with 100 liter gas tank. In 1999 I paid $ 37.00 to fill the puppy, which is 37 cents a liter.
Honest !!!

********************************************
Yes I recall in Edmonton we made periodic dips to 39 cents per liter briefly and it may have been as late as 1999.

In any case Statistics Canada most certainly does include gasoline in CPI (not in the core number but in the main headline CPI).

Some prices have soared, but inflation overall is tame. Isn’t anyone here old enough to remember the 70’s and early 80’s?

Prices went up hill as I walked to school and up hill some more as I walked home. You kids don’t know sh*t about real inflation.

#111 Smoking Man on 04.09.14 at 9:16 am

I just figured out the E=Mc2 of philosophy while making another contribution to the holly thrown.

We are put on this earth to make as many copies of ourselves as possible. Everything else we do is marketing. – SM – 2014

#112 ozy - this is Excellent NEWS, indeed on 04.09.14 at 9:25 am

this is Excellent NEWS, condo permits dropping 30-40$ in Toronto, places a FLOOR under the PRICES…

thanks MS and MRS DEVELOPERS…

excellent news, indeed

#113 Ray Skunk on 04.09.14 at 9:29 am

Re: #95…

Susan Pigg pumping real estate?

WELL, I NEVER!

#114 T.O. Bubble Boy on 04.09.14 at 9:49 am

BMO Strategist on BNN this morning: there is no housing bubble, because housing is local… there might be too much supply in parts of Vancouver, but that isn’t a Canada-wide bubble.

He was basically calling for a soft landing, because there will be a “renaissance” in Canadian manufacturing jobs thanks to onshoring (moving back from China etc.), and that will result in wage growth.

Ummm… call me crazy, but if a job that pays $1/hr over in China is moved back to Canada, it won’t be resulting in wage growth… it will pay poorly, just like all of the services jobs that dominate the job numbers these days.

#115 Penny Henny on 04.09.14 at 9:54 am

My psychic tells me that Toronto house prices will continue to rise until the Leafs win the cup. This will also signal the end of the world.
Golf Leafs Golf

#116 TEMPLE on 04.09.14 at 10:23 am

Markets are at record levels. Fact. — Garth

Yes, we know, but you are missing the point: the nominal value of the Dow, S&P, TSX, etc. is irrelevant. There is nothing disconcerting about new highs in the stock market.

Market valuations are only very slightly on the high side, and maybe appropriately so given the earnings forecasts and low interest rates.

TEMPLE

Risk on. — Garth

#117 yo on 04.09.14 at 10:25 am

Its an odd market for sure driven by people who are willing to leverage up now without a real idea of the “risk on” consequences. I live in Unionville in Markham and I count probably at least 3-4 house developments near me that the developer has simply just walked away from. One near my house the frame is up, but it has been that way for about 3-4 months now. The developer has removed all their signs, and it just seems they have walked away. Another one the land is cleared but sits idle. Another one was able to finish, but has sat on the market since Dec, and they have dropped the price about 3 times. Still very expensive. A few seem to be in the process of tearing down the old house, but when I was chatting with one fellow when I was walking the kids, he shook his head and said it was a mistake to buy – but has to try and build to get his money back. Its a mystery to me why anyone would want to put “risk on” in a market place like this, when in unionville, allot of buyers pay in CASH (no mortgage), and their risk appetite is fading.

#118 airhead princess on 04.09.14 at 10:30 am

Detached……the fact is that civil service compensation is ‘unhinged ‘ from reality. Compensation is described as a ‘charade’. These same gluttons….er excuse me…progressives suggest you aren’t paying enough taxes. While at the same time the additional money that goes into ‘fixing’ our healthcare etc gets shunted into the pockets of the elite….and that is why nothing gets to the infrastructure needs. The report says that public servants bleat about underfunding of improvements //but when the money is made available it all gets redirected into the civil servants pockets…… and they start whining all over again in the knowledge that the strategy of bait and switch keeps working.

http://business.financialpost.com/2014/04/08/were-undertaxed-governments-in-canada-hardly-starved-for-resources/

I agree with Mr Mulroneys recent comments…..”Mr Harper…being Prime Minister isn’t about being popular….it’s about leadership”….You need to axe the civil services down to the bone……and get Canada’s revenue earning infrastructure like the pipelines and mines pushed through the whiney little gaps in society that gave made you fear the next election…Get Something Done…..and damn the popularity consequences. Not only are we wasting hundreds of billions on unproductive mouths but we are losing trillions in resource revenue while you dither. Imagine the infrastructure we could build with our natural resource revenue instead of maintaining the beggared status quo we have under the Obama menace..

#119 DM in C on 04.09.14 at 10:33 am

Grandpa, I found the car!!!

#120 Doug in London on 04.09.14 at 10:46 am

It seems everyone else here is comparing stocks and houses, so I’ll put in my 2 cents worth. If I have a portfolio of stocks (or better yet those ETFs we keep reading about) worth $500,000 and suddenly need some amount like $30,000. I can sell off part of my portfolio to get that money. In a down market, some stocks will fall more than others so I’ll sell off those where my losses are the least (or better yet those assets which have held their value or gained like bond funds during the crisis of 2008-09) and patiently hold the rest. Didn’t the Oracle of Omaha himself, namely Warren Buffett say something about buy and hold? Now, if you have $500,000 of equity in a house, try selling off only $30,000 worth. That’s a lot easier said than done.

#121 Aggregator on 04.09.14 at 10:48 am

#64 quebec economist

That paper has some good points and draws similarities to what we're seeing in Canada's existing and new home sales market, whereas home sales (total new and resale) are declining and prices continue to rise to a Wile E. Coyote moment. Chart However, today Canada's presale market is far more advanced and prevalent then the U.S. was prior to 2008. Developers here have adopted a presale system (forward market) for selling units that was derived from Hong Kong and China decades ago. What makes this market far different is the qualitative structure of transactions, i.e., the amount of leverage, the maturity of the purchase agreement, the buyer's obligations and the developer's liability.

This is an entire market on its own that is independent of a typical mortgage transaction, and quite frankly, I'm surprised there isn't much research on this topic from Canadian analysts and economists when it accounts for about 30-40% of total residential transactions.

I highly recommend these two articles to get familiar with the origins of the presale market and why it was created.

Why there is Speculation in the Market for Pre-Sale Housing Units (Part I)
Why there is Speculation in the Market for Pre-Sale Housing Units (Part II)

Once one understands the mechanics of presale markets, including its spillover effects into resales, the carry trade held by international speculators and why it works under a communist regime and why it won't work under a democratic regime, only then one sees how vulnerable Canada's housing market is to a complete collapse.

#122 Paul on 04.09.14 at 10:57 am

Well it’s official the Real-estate world is totally nuts now they are holding back offers at the ‘sellers’ request in Clarington, Bowmanville. Oshawa, so you can over pay and get to drive to work on a crappy road for an hour or more.
It won’t end well

#123 Nemesis on 04.09.14 at 11:27 am

#HouseOfCommonsCommissars #MeanWhileInRussia #BeaverFacts

[UK Independent] – House of Commons’ champagne bill goes up and up despite austerity

…”The total cost of stocking the House of Commons with champagne has added up to £275,221 since 2010. This bought Westminster over 25,000 bottles, which MPs and their staff are able to buy at a rate subsidised by the taxpayer…

…Earlier this year Metro published anonymous complaints made by MPs about the on-site subsidised catering services. These included concerns about the “embarrassing” lack of Martini and a request for “more fresh game” to be introduced to the menu.”

http://www.independent.co.uk/news/uk/politics/house-of-commons-champagne-bill-goes-up-and-up-despite-austerity-9247255.html

http://youtu.be/gJxgObJJQM0

[NoteToVladimir: Respect the Beaver.]

#124 Nemesis on 04.09.14 at 11:49 am

#BeaverEphemera

http://en.wikipedia.org/wiki/Max_Aitken,_Lord_Beaverbrook#First_Baron_of_Fleet_Street

#125 2CntsCdn on 04.09.14 at 11:55 am

#120 Doug in London
A very good point. You take what you need …. and in the most effective tax way possible….. you have more options.
I used to be one of the stocks/bonds terrified. But after finally finding a decent adviser and trimming out of RE the last few years ….. I have been getting good returns (5.5%, 8.7% and 12.5% over-all averages the last 3 years) on a very conservative very diversified portfolio (50/50 cash/equities). Maybe too conservative …. but I don’t care. It spits out way more than I spend, I’ve never touch the principal and I sleep well at night. But it all started way back when with RRSP’s (and now TSFA’s) …. putting money away and letting it grow. For the first 15 to 20 years it felt like I was spinning my wheels …. but as any exponential graph shows us ….. the growth ramps up later on. The future DOES eventually get here …. you WILL see and feel that ramping effect.

I still think RE is a good part of a retirement plan …. but its just one piece …. I just wouldn’t get in now (and if I was over 55 I would get out now). And in hind sight I would have bought and hung on to a few rental properties (but only when bought at the right price).

If you make an average wage I still believe you can retire decently at 65. But you have to do all the little things right. You have to take advantage of all the little things that come our way. But recognize when to get in … and when to get out.

#126 None on 04.09.14 at 11:57 am

#103 Buy? Curious? on 04.09.14 at 7:22 am
You can’t make love in a balanced portfolio.

======
But Dividends can pay for a hotel room.

#127 Holy Crap Wheres The Tylenol on 04.09.14 at 12:01 pm

#111 Smoking Man on 04.09.14 at 9:16 am
I just figured out the E=Mc2 of philosophy while making another contribution to the holly thrown.
We are put on this earth to make as many copies of ourselves as possible. Everything else we do is marketing. – SM – 2014
_____________________________________________
Sorry Smoking Man what you are describing is procreation. I am an engineer so here goes in simple terms.

Einstein’s famous equation says that mass (m) is equivalent to energy (E). The recognition that the two quantities are related was Einstein’s stroke of genius. The speed of light squared (c2) comes into the equation to tell us exactly how much energy a given amount of mass represents.

In the world of subatomic processes, the mass of particles can change into energy in the form of light, heat or motion. Likewise, energy can also transform into mass. Particle accelerators exploit this idea by smashing together fast-moving particles. The high energy of these collisions transforms into new particles, which can have much greater mass than the ones that originally collided.

Converting mass into energy is the goal of scientists pursuing nuclear fusion. Fusing protons and neutrons together results in a nucleus with a total mass that is less than the mass of its constituents. The missing mass appears as energy, which can be harnessed—in principle—for useful power: E=mc2!

Mass-energy convertibility has far-reaching consequences. Your car’s engine is powered by fossil fuel, which comes from prehistoric plants. The plants got their energy from sunlight, which was produced by nuclear fusion in the sun. So your car, and virtually all other activity on Earth, is ultimately powered by E=mc2.

Does that help?

#128 Holy Crap Wheres The Tylenol on 04.09.14 at 12:03 pm

#115 Penny Henny on 04.09.14 at 9:54 am

My psychic tells me that Toronto house prices will continue to rise until the Leafs win the cup. This will also signal the end of the world.
Golf Leafs Golf
____________________________________________
Does revese time travel count? I recall “67”

#129 Holy Crap Wheres The Tylenol on 04.09.14 at 12:06 pm

#82 shawn on 04.09.14 at 12:06 am
Gasoline Inflation Math
Sheane wallace later yesterday’s post said:
As for Canada current prices are 1.33 and I do happen to remember 50 cents 12 years ago.

******************************************
Assuming your memory of both the price and the number of years is accurate that would be 8.5% inflation per year. Amazing how it compounds, no?

___________________________________________

How much of that inflation is tax on top of tax on top of tax?

#130 bdy sktrn on 04.09.14 at 12:42 pm

#22 RunningBackToSaskatoon on 04.08.14 at 7:47 pm
Garth! You speak both lowly and highly of the youth. So perhaps you can help me out.

I am a young professional trying to make a go of it in Regina.. I’ve been renting.. and I’ve fended off instruction from my co-workers to “buy a cheap condo” and settle down.

I am fresh out of university…$10,000 cash.
———————————————————
at such a young age just buy xiu 100%
or if u r chicken little get a single balanced fund
either way it’s not important now.

you need to just keep saving what you can BUT much more important is developing your career, and spending any or all of that 10k on whatever it takes to better ones skills, tools, image, experiences is the best place to put the $$ now.

#131 Aggregator on 04.09.14 at 12:48 pm

This is what happens when your master-planned community landlord lives in UAE, Russia or China.

Tenants' federation to expand reach to condo renters

The 40-year-old Federation of Metro Tenants’ Associations is expanding in hopes of stepping up protections to an exploding new generation of Toronto tenants — condo renters.

The federation has seen a spike in emails and calls to its hotline from renters living in glass-and-granite-clad condos, shocked by demands from their landlords for key deposits of up to $500 or huge rent increases to cover escalating maintenance fee costs.

Condo boards are also a source of concern: Some are demanding that tenants pay a fee, often $150, just to rent the elevator for a move, or $100 an hour for a security guard to oversee the process, says Geordie Dent, executive director of the federation.

Poor-quality construction and the inability to get things fixed — given that the landlord can often live across the country or around the world, and the tenant has no legal right to demand repairs from the condo board — are high among the long list of common complaints, noted Dent.

#132 spaceman on 04.09.14 at 1:05 pm

Land sales On the Big Island are dead.

Vancouver Island that is. We just hired a temp worker in our stock room, no IT experience, but a quick learner. “So what else do you do” I asked.

He is a property developer, with 17 developed lots in Cowichan Lake, that he cannot sell for what he has into it.. Not one. No builder will wants them, too far from the capital. 1 year before the loan is due, and forclosure commences…

#133 Bottoms_Up on 04.09.14 at 1:10 pm

#22 RunningBackToSaskatoon on 04.08.14 at 7:47 pm
———————————————
We have discussed that quite frequently on this blog and it goes like this:

Open up a TFSA at Questrade.com.

Top up your TFSA with said cash.

Buy a mix of exchange traded funds. For example, throw $3000 at XIU.to (Canada’s 60 largest companies), and some other ETFs that are based in the US or other countries (i.e. for diversity).

#134 Bottoms_Up on 04.09.14 at 1:14 pm

#117 yo on 04.09.14 at 10:25 am
——————————–
The majority of people in Markham are living in homes they no longer could afford to buy themselves.

#135 World According To Garth on 04.09.14 at 1:48 pm

#105 unbalanced on 04.09.14 at 8:07 am
To # 82 Shawn.

I have a 1997 truck with 100 liter gas tank. In 1999 I paid $ 37.00 to fill the puppy, which is 37 cents a liter.
Honest !!!
—————————————————–

Yes sorry Shawn but your inflation analysis is something you would hear from idiot Govt Workers.

“inflation is 1.5% because we don’t count food and energy”.

WTF?

Yeah dumbass Govt Worker……humans don’t eat food and we don’t drive to work using gasoline. According to the govt we eat iphones, fill up our gas tanks with flat screen tvs and heat our houses with laptops. Cuz those things come down in price and thats what dumbass govt workers count as inflation/deflation.

#136 Nemesis on 04.09.14 at 1:49 pm

#MickeyIcarus #CautionaryTales’oFame,Finance&Fidelity

[LAT] – Mickey Rooney’s death stirs family feud and reveals how far star fell

“It’s a sad tale,” said Michael Augustine, who served as Rooney’s conservator since 2011.

http://www.latimes.com/local/la-me-mickey-rooney-20140409,0,589697.story

#137 Holy Crap Wheres The Tylenol on 04.09.14 at 2:00 pm

#134 Bottoms_Up on 04.09.14 at 1:14 pm
#117 yo on 04.09.14 at 10:25 am
——————————–
The majority of people in Markham are living in homes they no longer could afford to buy themselves.

______________________________________________

Ditto Oakville. We used to ooze with cash, still do! Just most of the oozing is going out of Oakville.

#138 Holy Crap Wheres The Tylenol on 04.09.14 at 2:10 pm

Just listened to this via Siruis XM and thought
“Is this the end? RE Construction”

You shout in your sleep
Perhaps the price is just too steep
Is your conscience at rest
If once put to the test?
You awake with a start
To just the beating of your heart
Just one man beneath the sky
Just two ears
Just two eyes

You set sail across the sea
Of long past thoughts and memories
Childhood’s end
Your fantasies
Merge with harsh realities
And then as the sail is hoist
You find your eyes are growing moist
And all the fears never voiced
Say you have to make your final choice

Who are you and who am I
To say we know the reason why?
Some are born
Some men die
Beneath one infinite sky
There’ll be war
There’ll be peace
But everything one day will cease
All the iron turned to rust
All the proud men turned to dust
And so all things, time will mend
So this song will end
Pink Floyd – Childhood’s End

#139 jess on 04.09.14 at 2:23 pm

Is it possible to copywrite yourself?

Today this news:

Canada Revenue Agency shuts part of website over Heartbleed Bug

But what about this one:

Apr 14
Fact-Checking Experian’s Talking Points

http://krebsonsecurity.com/tag/hieu-minh-ngo/

…”In the wake of long-overdue media attention to revelations that a business unit of credit bureau Experian sold consumer personal data directly to an online service that catered to identity thieves, Experian is rightfully trying to explain its side of the story by releasing a series of talking points. This blog post is an attempt to add more context and fact-checking to those talking points.
Experian Sold Consumer Data to ID Theft Service

Friday, October 18, 2013
Vietnamese National Charged in Widespread International Scheme to Steal and Sell Hundreds of Thousands of U.s. Persons’ Personally Identifiable Information
http://www.justice.gov/opa/pr/2013/October/13-crm-1116.html

#140 Nemesis on 04.09.14 at 2:27 pm

#WonderWednesdays #QuantumMechanicalEngineering #ZeroPoint

For PapalSnugglyButtocks & TylenolChallengedSlipStickSliders, et al… What would CaptainFuture say!?

[Salon] – “The Hunt for Zero Point” by Nick Cook

…”What makes the allegations interesting is that they appear in “The Hunt for Zero Point,” which is written by Nick Cook, for 10 years the aviation editor at Jane’s Defense Weekly. Jane’s is the bible of the defense establishment, known for its no-nonsense, nuts-and-bolts reporting. A former Jane’s editor tackling this topic is enough to make you take a second look.”…

http://www.salon.com/2002/08/05/zero_gravity/

http://youtu.be/Y0RoarHKMiQ

#141 bdy sktrn on 04.09.14 at 2:36 pm

20 Doug in London on 04.09.14 at 10:46 am
It if you have $500,000 of equity in a house, try selling off only $30,000 worth. That’s a lot easier said than done.
———————————-
in vancouver there are endless, round the clock, radio ads by the thousands, telling how easy it is for you to get that 30k 60k or 200k. you can borrow it no questions asked if you have home equity

#142 Victor V on 04.09.14 at 2:57 pm

https://ca.finance.yahoo.com/blogs/pay-day-/mortgage-rate-discounts-only-temporary-relief-economists-161903010.html

Mortgages may have gone on sale again for the first time in a year, but economists warn those discounts will likely be short lived.

The rush to cut 5-year, fixed mortgages by a half-point to the 2.9-per-cent range started last month with the Bank of Montreal. It has since been matched and slightly beat by a handful of lenders, according to data posted by RateHub.

Scotiabank economist Adrienne Warren says the discounts are the result of a drop in bond yields. That is being passed on to borrowers as an incentive heading into the critical spring home buying season.

Warren calls the current mortgage rate sale “temporary relief” for borrowers, but doesn’t expect a war that will drive rates down further.

In fact, she warns borrowers to “brace for somewhat higher interest rates” later this year, as bond rates rise again and the global economy continues its steady recovery.

“Modestly higher borrowing costs are still on the horizon as global growth picks up,” Warren says.

#143 Dorothy on 04.09.14 at 3:20 pm

Real Estate has always had it’s ups and it’s downs, and it always will. It is also subject to local market factors, resulting in differing ups and down cycles in different areas.
While it is true that places such as Toronto and Vancouver appear to be massively overpriced and consequently due for a huge correction, prices in other locations have already moderated and achieved that much vaunted “soft landing”. Still others never really rose excessively in the first place, and consequently have not fallen either. And finally, certain markets with hugely successful economies have high prices which have increased even further in recent months due to renewed confidence in whatever industry supports their area. The point is that Garth’s “one size fits all” comments simply do NOT apply to every single RE market. They are all different, because they are so dependent on local factors. Always have been, and always will be.
Case in point, in my neighbourhood house prices have been slowly falling over the past 4 years (not crashing, but gradually moderating), and sales have fallen slightly as well. But anyone who has embraced the new reality is still able to sell their home fairly quickly and, as most of those sellers bought before prices rose as much as they did a few years back, most of those sellers are still going to make a profit despite the recent reduction in prices.

Yet in another, similar size town, in the same province (BC) but several hundred miles from where I live, a friend just sold a house he bought only 6 months ago, for 17,000 more than he bought it for (and he listed it well below his competition in order to generate a quick sale). The difference is that the town my friend lives in currently has a booming economy based on the resource industry. Naturally if the economic fundamentals change in that town then so will the RE market, but that’s always been the case in any town at any time, and always will be.

I give these two examples to illustrate how the RE market is fundamentally different in every location based on many differing local factors. So generalizing about RE prices and where they are going to go is a bit of a fools game. Every RE market is different because they are all subject to differing local influences.

#144 :):(Ying Yang on 04.09.14 at 4:07 pm

#40 Smoking Man on 04.08.14 at 8:36 pm
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.

Marcus Aurelius…..

As I have said on previous posts, the young are gone, the individual murdered my the teachers. Chasing acceptance with extremist religious forthrightness.

Saving trees, murdering the auto, especially ford’s, they lust for granite and hardwood so they can proudly create a shrine for there expensive obedience certificate.

They are doomed, I’m following, Robyn Doolittle, and Daniel Dale from the Toronto Star for shear amusement… And I get my money’s worth….
……………………………………………………………………..

Smoking Man I’m amazed you used an quote from Marcus Aurelius. I had to take a philosophy course in University and he was one of the old order Roman Emperors and philosophers. Had to read a small book of his called Meditations.
Good on you Smoking Man U R gettin educatid!

#145 out of work construction workers on 04.09.14 at 4:14 pm

Looks like the slow down in construction is hitting hard as construction workers who were busy building condo’s that no one will livr in are now out of work. This will continue to hit the economy as restaurant and retail take a bigger hit as the economy could down. Realtors, mortgage brokers, bankers, and now construction workers are worried and they should be.

#146 Holy Crap Wheres The Tylenol on 04.09.14 at 4:17 pm

#136 Nemesis on 04.09.14 at 1:49 pm
#MickeyIcarus #CautionaryTales’oFame,Finance&Fidelity
[LAT] – Mickey Rooney’s death stirs family feud and reveals how far star fell
“It’s a sad tale,” said Michael Augustine, who served as Rooney’s conservator since 2011.
http://www.latimes.com/local/la-me-mickey-rooney-20140409,0,589697.story
____________________________________________

Just read it so sad to see an Icon of our era go like that. Had a neighbors aunt and uncle go through similar circumstance. The children forced them into a old age home sold their home, took the cash and never even went to see them. They finally passed away and the children were pissed when they found out the father had almost $900 K in old IBM stocks. He left it to my neighbor (their cousin) I’m glad the old guy had the last laugh.

#147 kOOLAID on 04.09.14 at 4:25 pm

http://www.cbc.ca/news/canada/british-columbia/cheapest-house-in-vancouver-on-sale-today-listed-at-600k-1.2592103

600k For a shack is cheap. On a major highway.

#148 ruchir on 04.09.14 at 4:30 pm

#30

“Is it a ‘need’ or just a ‘want’?

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

No, it is the ‘need’ that they ‘want’.

#149 Smoking Man on 04.09.14 at 4:34 pm

#127 Holy Crap Wheres The Tylenol on 04.09.14 at 12:01 pm

OK you, got one for you… If you right the second decide to extend your middle finger, everyone raise your hand and extend it..

What just happened there?

Our brains are made up of atoms, electrons, in motion in orbits.

Is a thought and an action the direct result of aconsciousness, or is it a result of light waves hitting the back of your head changing the direction and flow, direction of sub atomic partials in your brain.

In other words our destiny is preset, million years ago the event that just took place, raising of the hand and flipping the finger.

I think the later is true….

Conclusion, don’t worry, play hard and have fun… The future can’t be changed..

If you read this, don’t raise your hand or do raise your hand..

You had no control of it.

Destinology is all I’m saying

#150 jeff on 04.09.14 at 4:40 pm

Buddy who works for one of the big banks has said big bets by wealthy individuals and insiders are being made to short the Canadian housings market. The fund is called real asset opportunities fund (something like ) . big hitters who (run the show) as he put it are betting that the Canadian housings bubble is going to get hit hard.

#151 Pope Slamdunk Snugglybums the 666kg (aka Nosty) on 04.09.14 at 5:42 pm

#140 Nemesis on 04.09.14 at 2:27 pm — “For PapalSnugglyButtocks & TylenolChallengedSlipStickSliders, et al… What would CaptainFuture say!?”

Fy mear dellow, it is far too nice, sunny and warm to be bothered with any of the worthless, pathetic, meaningless drivel that happens to this planet on a daily basis. But thanks for the larf!

#152 Old Man on 04.09.14 at 6:07 pm

#149 Smoking Man – Time is an illusion as there is only the present state. The future is created out of the present which instantly becomes the past; only the present state exists in time. Now can the future be changed? We get a hint in the Book of Noah at its the only prophecy that was ever changed in the Holy scriptures – repentance is the key! Amen

#153 OttawaMike on 04.09.14 at 6:14 pm

Read it and weep Turner, 3 Canadian cities are chosen as top markets to invest in world wide:

http://www.huffingtonpost.ca/2014/04/09/toronto-vancouver-calgary-best-real-estate-markets_n_5120113.html

A subjective survey with no methodology from a British property developer. Are you out of meds? — Garth

#154 Shawn on 04.09.14 at 6:20 pm

Risk is proportional to assets, not equity

141 bdy sktrn on 04.09.14 at 2:36 pm

points out that you can boorow against house equity whereas Doug in London said you can sell a portion of your stocks when money is needed

in vancouver there are endless, round the clock, radio ads by the thousands, telling how easy it is for you to get that 30k 60k or 200k. you can borrow it no questions asked if you have home equity

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

Borrowing against a house is NOT the same as selling a portion of the house or a portion of equities.

When you own a house you are risk for the full value not just your equity (unless you contemplate bankrupcy).

I strongly disagree with the suggestion to keep your equity in your house at a certain percentage of net worth like 90 minus age.

You do not reduce your real estate risk by borrowing against your house and investing the proceeds.

If you want to limit risk exposure to real estate, you must limit the asset value (not the equity in the asset) as a percent of net worth.

But that is not the only way to measure risk. A young graduate doctor might have negative net worth and still safely buy a modest house 100% leveraged. It’s not that risky if he has a government contract as a doctor complete with disability and life insurance.

That’s my take on it anyhow. Respectfully.

#155 jan on 04.09.14 at 6:31 pm

#54 Old Man on 04.08.14 at 9:48 pm
Mony a mickle maks a muckle. Keep the heid. Caesar scunner yer aff yer heid.

Huh…dude
Call 911 you’re having a stroke…lol

#156 Old Man on 04.09.14 at 6:51 pm

#155 Jan – Whit’s fur ye’ll no go by ye!

#157 Happity on 04.09.14 at 6:55 pm

Funny thing is happening, gold man sacks looks like they are shutting down their “Sigma X” dark pool clearing.

Meanwhile smart folks are doing the opposite, selling homes and parking the proceeds in the digital system.

#158 maxx on 04.09.14 at 8:31 pm

Went to a major department store today to trawl for a pair of loafers. Sperry Topsiders, excellent deal at $24.95, less an additional 10% for minor scuffs. Deals abound. Anyhow, on the way out, no less than 5 sales “associates” in the sports department were twiddling their thumbs, draped on furniture, yakking it up, with the same scenario in appliances. We couldn’t believe it. Retail is well and truly toast.

Then, mailed a birthday card to the U.K.today- cost of a stamp is up ~35%. Guess what? We’re free-greeting Christmas and most other cards now. We actually did our Christmas greetings this way last year. Easy, free and excellent card sites abound.
Our beloved postal service is and will be losing a lot more revenue from this family unit than any increases it attempts to squeeze out of us. Parcels? Plenty of competition. It will now only ever get MINIMUM business from us….when we have absolutely no choice but to use them.

#159 saskatoon on 04.10.14 at 6:52 am

New, differing viewpoints can often be painful to accept (or even acknowledge); but the pain is only temporary–like walking into sunlight on a bright, summer day.

In other words, you will adjust. Hang in there.

#160 Doug in London on 04.10.14 at 10:02 am

@bdy sktrn, post #141:
Yes, but you still have to pay interest on it, and it adds to your total debt.

@out of work construction workers, post #145:
Time to look for a job elsewhere. It wasn’t long ago I heard of a severe shortage of construction trades in Alberta, Northern BC, or parts of Newfoundland and Labrador. If you are mobile (following the advice of this sad blog), there may be opportunity there or other places.

#161 TheManwhoStaresatSheeple on 04.10.14 at 2:29 pm

Jim Flaherty dead. RIP

http://www.thestar.com/news/canada/2014/04/10/jim_flaherty_gravely_ill_reports_say.html#

#162 Ray Skunk on 04.10.14 at 2:31 pm

Apparently F is dead?!?

*shocked*

#163 Joseph R. on 04.10.14 at 2:41 pm

Well, Garth, you can now claim another victory over F. : You have outlived him:

Jim Flaherty, former finance minister, dead at 64:

http://www.cbc.ca/news/politics/jim-flaherty-former-finance-minister-dead-at-64-1.2605728

Either he was correct on leaving for health reasons or the conspiracy theorists are going to go nuts over the news.

RIP