The unthinkable

rabbit modified

In the autumn, six years ago, it was worth $116,000. Then everything went wrong. The financial crisis hit, credit dried up, the carmakers were crashed and Detroit along with it. As the economy wavered, real estate values tanked.

The solid, brick, 2,400-square foot three-bedroom house filling the 40 by 110 lot perched on a decent street took it on the chin – just like its neighbours. By 2010, when it changed hands again, the value of the 1929 colonial had plunged to $41,000.

Since then, the local real estate market has had unstoppable negative momentum, even as Chrysler, GM and Ford rebounded. So two years after the last sale, the house has lost another 90% of its value, now on the market for $3,000. Or an iPhone6. Or an iPad.

Here’s the listing for 11954 Laing Street:

*INVESTOR SPECIAL* 3 Bedroom, 1.1 Bath Brick colonial with finished basement and 2 car detached garage. QCD ONLY! Furnace and HWT will be provided if closed before September 29th. Seller will swap the house for a new iPhone 6 or a new iPad – 32gb Brokered And Advertised By: Real Estate Professional Serv Listing Agent: Larry J. Else

And here’s the house, which has lately taken a few stones through the windows, while some nimrod set the living room on fire:

IPhone house modified  Well, the point of this little story is to demonstrate what was worth $116,000 six years ago – because people had jobs and could pay their bills – is now worth nothing. Those who believe real estate has intrinsic value divorced from the wider economy or human population shifts are naïve. Inexperienced. Sheltered. Canadian.

Houses on middle-class streets in Vancouver or Toronto are not going to nothing, of course, but the lesson shouldn’t be lost on us: these are assets valuable only because people want them. When demand wanes – because interest rates rise, job opportunities fall, taxes swell, the economy reverses, terrorists attack or a pandemic erupts – everything can change. And abruptly.

Phil’s a real estate agent in Toronto. Not just any part of Toronto, but that juicy bit of North Toronto which includes Lawrence Park – a leafy, self-important, monied enclave where about three million gets you onto one of the less important streets. He also sells the starter homes on 25-foot lots a few blocks to the south, where a million brings a reno project.

Last spring, says Phil, “it was a zoo. I had ten buyers for every listing.” He attributes that to a long, bitter winter and pent-up demand, combined with bankers aggressively slashing mortgage rates. For a brief time, as a result, the average SFH in all of 416 popped over the $1 million mark.

This week, big changes. Being a salesguy, Phil’s unflappable. “Still busy,” he chirps, “but the world has sure changed.” I ask why. “The buying has just stopped much over a million,” he explains. “And those people looking for three or four mill for their places – which were totally worth it to buyers a few months ago – are going to be sitting there for a long, long time. This is turning out to be the shortest fall selling season I have ever seen.” And Phil’s been doing this job for 18 years.

The disconnect between media reportage of the resale market, and the market itself, is extreme. Sure, houses still sell and there are always greater fools around making it happen. But despite having five-year money available at 2.8% – about the lowest in history – the momentum is gone. Do people expect rates will inevitably increase, bringing house values down? Are they worried about the slagging economy? Have debt levels finally caught up? Or did real estate values simply get to the point where most people walk away?

Beats me. But if I were in the market for a house right now in one of our three hot cities, I’d stop.

Wednesday night the CEO of Sun Life Financial gave a speech about all of this to a summit on pension reform. If real estate prices were to correct, Dean Connor said, a lot of Boomers would pretty much be pooched. “The most vulnerable – the 1 million Canadians whose current debt servicing costs are 40 per cent or more of disposable income – may have to sell their real estate, crystallizing losses and setting back their retirement plans,” he said.

But everyone would be affected, now that 70% of us own houses and we’ve allowed more than a quarter of the whole economy to be dependent on real estate. Connor reminded his audience that in 1990 consumer debt was 87% of what people earned. Today it’s 164%. The number of people in debt over age 65 has doubled. And every year more of us are living paycheque-to-paycheque, while house prices continue to rise. Are we too thick to see the connection?

Of course we are.

And even at these levels, over eighty per cent of Canadians say real estate’s a great investment. It’ll never let you down.

Until you need a new phone, that is, and the rug’s on fire.

187 comments ↓

#1 Derek R on 10.08.14 at 7:13 pm

When people are so strongly in denial, reality may have to kick them repeatedly before they finally get it.

#2 Linda on 10.08.14 at 7:22 pm

Sad story but – Detroit. Where entire subdivisions are being bulldozed because the city can’t afford the expense of maintaining basic services for empty homes. The owners long since fled to presumably where they can find work. Plus Detroit was/is in receivership. Not that the story still isn’t a cautionary tale, but this has been an issue for that city for quite a few years now….

#3 VanRant on 10.08.14 at 7:24 pm

Say it isn’t so. Assessed values at the Olympic Village has dropped 20% in three yrs according to BIV!

#4 Joe2.0 on 10.08.14 at 7:28 pm

Phhfsssssst.

#5 Trombone on 10.08.14 at 7:28 pm

Garth, judging by your blog pics, you don’t seem to have any grey hair. I find that hard to believe for a man who puts himself in the line of fire so much. What’s your secret? Do the Amazons pluck you every night like a harp, or maybe you’re into the Grecian?

I am now half titanium. — Garth

#6 Jason on 10.08.14 at 7:31 pm

First time post, like your writing

#7 Uh Oh Canada on 10.08.14 at 7:31 pm

Forget about ‘retirement’ as we know it. I plan to either work at Walmart or become a used car salesman.

#8 Rob on 10.08.14 at 7:33 pm

Housing correction is well on it’s way. Houses are overpriced, condos are overpriced. People won’t be able to afford this once mortgage rates go up to 4.5%

#9 Cato the Elder on 10.08.14 at 7:34 pm

I’m not sure how much more clear it needs to be that the Bank of Canada and our politicians really don’t have our interests at heart.

This entire scheme is destined to fail, and when it does, the ones who caused the problem are going to buy everything up at fire sale prices.

#10 Mr. Foist on 10.08.14 at 7:36 pm

Would they take a Blackberry instead of iPhone for the house?!

#11 Ex-Cowtown on 10.08.14 at 7:38 pm

Way back in 1990 a small cottage on a 25′ lot in walk-to- downtown Sunnyside in Calgary cost around $55k. Why? No one had jobs. Now the lot alone costs over $500K. Why? Cheap money and expensive parking. At $1K/month to park your Beemer you can carry an additional $450k on your mortgage.

$500K – $450K=$55K (1990 price)

Coincidence? Yeah, but it doesn’t mean the math is wrong.

#12 Mary Ponsertho on 10.08.14 at 7:39 pm

“And even at these levels, over eighty per cent of Canadians say real estate’s a great investment. It’ll never let you down.”

Real estate is a great investment. Canada is one of the best countries in the world to live right now. Toronto is acclaimed for one of the best universities in North America, and the Toronto District School Board is one of the highest ranking school districts in the G7 nations.

Living in Toronto is an investment. House prices are only going to skyrocket higher because Toronto is the new Manhattan of Canada.

Canada offers its citizens free healthcare, quality education and subsidized tuition, what more can greedy old white men want other than a barefoot wife to cook him dinner?

Sorry Garth, Toronto is evolving and you have to keep up with the trends.

Troll alert. — Garth

#13 Property Accountant on 10.08.14 at 7:39 pm

In 1990 interest rates in Canada were between 12-14%
http://www.tradingeconomics.com/canada/interest-rate
That surely drew blood out of all indebted Canadians.
Now we have HELOC at 3.5%-4% while inflation oscilates around 2%. That’s 4 times less… No wonder borowing is easy, interest payments low and affordable.

#14 Fred on 10.08.14 at 7:41 pm

Solution for Detroit: Sell the whole city to the military so the military can train there on urban warfare tactics.
We can get out some lawn chairs in Windsor and watch over a bowl of popcorn while boosting Windsor’s tourism.
win-and-win

#15 Ex-Cowtown on 10.08.14 at 7:42 pm

Actually, I think my math is wrong, but close enough that Smoking Man still can get the point.

#16 Jan on 10.08.14 at 7:44 pm

Yes but in Detroit unlike in the whole of Canada real estate is not an officially recognized religion.

#17 Mike in the Okanagan on 10.08.14 at 7:44 pm

Didn’t the Fed basically say today they plan to further delay raising interest rates? The market pulled a big hockey stick up on the news.

Personally I’m totally out of debt. I would be fine with seeing the rates “normalize” and actually earn a couple shekels on savings.

No, the Fed said its move would be based on economic data. Yawn. — Garth

#18 Muttley O'Toole on 10.08.14 at 7:51 pm

I am not a doomer (at least, I don’t think I am), but I tell you we are well & truly stuffed.
Another nail in the coffin is, it looks like, the Ebola virus has escaped the Medussa bottle.Is this the replica of last century’s killer flu’?
If it does get out then there will be a million less Maple Flag bearers to buy your overpriced property.
Because it keeps on evolving then anti-vaccines won’t be effective.
Will back wood cabins become over priced property?

#19 Retired Boomer - WI on 10.08.14 at 7:52 pm

11954 Laing St. probably did not “sell” for what it was “worth” back in 2008. It would be more interesting to have “seen” what this neighborhood has gone through since this home was built in 1929.
I would guess this home was first foreclosed upon in 1931 or maybe 1932. A succession of owners who raised families there in the 40’s and 50’s and even the early 60’s until the neighborhood “changed.” Unfortunately, many Americans know what that phrase meant as home values went down, businesses closed, and families fled to the suburbs.
It happened in the cities I have been familiar with over my lifetime. Buffalo, Cleveland, Detroit, Chicago, Milwaukee, Minneapolis – St. Paul, and Madison, WI.
The older homes went to people who had less money.
Sometimes they had less education, less stable families, sometimes they looked different.
In these older cities sometimes these neighborhoods, which were often called “blighted” had a resurgence.
Chicago has had a renaissance of the old neighborhoods on the nearer south side along the lake front where $1,000,000 properties abound now where $20,000 run down stately homes carved up for apartments flourished in the 1960’s.
ALL neighborhoods change over time. Houses age, narrow lots are not favored these days, nor 1,100 square foot houses. Jobs, and businesses move (sometimes out of the country).
People buy property in an area where it fits for them. A starter home in a dodger hood is often their starting point, rarely where they retire.
11954 Laing St. appears a tear down to me, but the picture may not be doing justice to it. For mere dimes, a handy guy might be getting a decent grub stake here-if he wants it. If he could acquire the lot next door he might even have a decent site to build anew. I would not want a 40 ft X 110 ft lot in Detroit. Had a 30 X 120 in Buffalo. 219 Westminster St. to be exact. Wonder how that home is fairing these days, was a good home and great neighborhood.

#20 mark on 10.08.14 at 7:58 pm

@ #13 Fred

Surely Kurt Russell has one more Snake Plissken movie in him.

#21 crowdedelevatorfartz on 10.08.14 at 8:01 pm

@#2 Linda
Detroit is still under bankruptcy protection even after getting major pension and benefit consessions from the retired police, fire and other municipal workers.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&ved=0CCUQFjAC&url=http%3A%2F%2Fwww.cbc.ca%2Fnews%2Fworld%2Fdetroit-bankruptcy-retirees-vote-in-favour-of-pension-cuts-1.2714053&ei=9s41VLSXFsvn8AXs6YDwCg&usg=AFQjCNGCPCVa676rHPKIakyBLPOP8axMAQ&bvm=bv.76943099,d.aWw

And then we have a judge in California allowing another bankrupt city to challenge exorbitant city worker pension payments/benefits to be slashed….

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=5&cad=rja&uact=8&ved=0CD0QFjAE&url=http%3A%2F%2Fdealbook.nytimes.com%2F2014%2F10%2F01%2Fjudge-rules-that-bankruptcy-invalidates-calpers-lien-against-stockton-calif%2F&ei=ls81VPLuH87p8AX3v4LoDg&usg=AFQjCNGckczZFEmrK93dHA29up8uWMp51A&bvm=bv.76943099,d.aWw

And for those of you that say ‘Not in Canada” we have Montreal civic workers “rioting” over cuts in their generous pension plans.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CCsQFjAA&url=http%3A%2F%2Fnews.nationalpost.com%2F2014%2F08%2F19%2Fdozens-of-montreal-firefighters-storm-city-hall-throw-water-at-city-councillors-to-protest-pension-reforms%2F&ei=8881VOffM4ql8AXwpILYAQ&usg=AFQjCNGZNEgtTpBRtY3TE_qgegoJKx9nIw&bvm=bv.76943099,d.aWw

For all you govt workers out there that are in denile.
Remember de nile is just a river…………..

#22 High Plains Drifter on 10.08.14 at 8:05 pm

Switching to all Canadian bonds in the spring after making a brief skip with the gold miners, looked like diving into a bucket. Defying odds, the water is a few inches deeper with every month.

#23 Blacksheep on 10.08.14 at 8:08 pm

Inglorious Investor,

The second, relevant video on the oil / gold trade.

https://www.youtube.com/watch?v=C4X65TYo51U

#24 Smoking Man on 10.08.14 at 8:13 pm

To hammered to post

What the hell happened to real people posting here.

Just have agenda driven robots…. It’s getting boaring..

#25 takla on 10.08.14 at 8:15 pm

“I am now half titanium”-garth
Way things are going Garth you should have had them install ‘gold” plates to mend yur bones…;}
One part of your body that will be worth more as you wrinkle…..lol

#26 Brian Ripley on 10.08.14 at 8:15 pm

“This is turning out to be the shortest fall selling season I have ever seen.”” said Phil the sales guy.

I just updated my Housing Starts charts:
http://www.chpc.biz/housing-starts.html

Developers are cutting back; I project the year end will finish with housing starts across Canada down 8-10%

#27 Jimbo on 10.08.14 at 8:16 pm

House valuations have decoupled from rental incomes for a very long time. Maybe over 15 years now. This has to normalize sooner or later.

One thing for sure, there are several “what if” scenarios that fuel the uncertainty for purchasing a house.

#28 crowdedelevatorfartz on 10.08.14 at 8:25 pm

@#23 Smoking Man

They’ve taken a lesson from your book.
They’re too busy drinking.
Cheers!

#29 Rudy on 10.08.14 at 8:31 pm

It is common to be lectured by senior family members (aunt, parent/grandparent etc) if it comes to light you are struggling to meeting all your financial obligations. Even though you and your spouse/partner work long and hard at your jobs. Often that senior relative will ‘advise’ that “In my day we didn’t have the credit problems the young people have today”. The fact is their “advise” is right! However they usually fail to acknowledge the rules were different in their day. Not too long ago car leases were almost unheard of, 0% down for a house was a pipe dream and weekly credit card offers sent to your house didn’t exist. If you wanted something you had to WAIT AND SAVE for it because there used to be much more financial safeguards in place .

The rules have changed and it behoves each individual to equip themselves with the proper knowledge to adapt to these changes and protect themselves. It is universally human nature to want the take the easiest path. If the “greatest generation” were offered today’s easy credit drug during their time there would be a lot more seniors in financial rehab today providing a plethora of living examples on how not handle easy credit. It would provide as a cautionary bearing to Gen X, Y & Zer’s navigating their financial course today.

#30 Elmo on 10.08.14 at 8:31 pm

Funny – no news about what is going on south of the border. Feds putting breaks on interest rate increase fear Mongerers

#31 Rexx Rock on 10.08.14 at 8:38 pm

Great day on the market.I knew the fed would stop the correction by delaying raising rates.Good times are here again,no interest rates hikes for a long time.Remember Japan wrote the low rates playbook and the world loves it.6 years and counting so the trend is your friend.

#32 SH on 10.08.14 at 9:01 pm

My experience varies greatly from Phil’s. I have been looking for a home in Lawrence Park for over one year. I’m willing to build, renovate, or buy a brand new home.

A year ago, my budget was $2.5 million. Now, it is $3.5 million and i still can’t find anything. I have made 2 offers in the last 10 days alone and lost both. One was for a lot on Cheltenham were i offered full asking ($2m) and it received 10 offers and went for around $2.3. Mind you, it was not underpriced to begin with.

Another house just came on to Dawlish and was snapped up just over asking ($3.1m) in a few days.

Lawrence Park is hotter than ever unfortunately. Check MLS, there is very little inventory there. Whatever comes up sells right away.

I named this blog for you. — Garth

#33 rory on 10.08.14 at 9:02 pm

FYI people … another great investment … now listed for $169,900 …wonder how much the improvements cost him and they still need to tack on closing costs. GT is right …well mostly anyway.

“Great value here, seller purchased this condo in 2007 for $267,375! This top floor 3 bedroom, 2.5 baths condo has spectacular view of ski area. Spacious 7′ x 20′ with Beachcomber Hot Tub. Upgrades in recent years include all new cabinets, flooring, moldings & light fixtures. Newer vinyl windows and 8′ patio sliders to deck. Five Frigidaire Gallery Series appliances including stacking washer/dryer…”

http://realtor.ca/propertyDetails.aspx?PropertyId=14664215

#34 Shawn on 10.08.14 at 9:11 pm

Bye for Now…

Some of you will be glad to know I am swearing off posting here until at least December 1.

It’s been fun but too time consuming, too addictive.

Also it is disheartening to see how many people have such wild ideas about the financial world. Ideas that are destructive to wealth building. And to see people bash Buffett and in one particularly annoying case to suggest his success was more luck and leverage than skill.

It just goes to show that in this world it does not matter how good you are or what you do. In this internet world you will always have people doubting and bashing you.

I have said before that few minds are being changed on this blog. People have their entrenched mindset and cling to it, be it right or wrong.

In order to force myself to spend less time here I decided to swear off posting until December 1.

I imagine there will be a huge groundswell of support begging me to please, please not go, but my mind’s made up. Might see you back on December 1.

#35 Chucky on 10.08.14 at 9:18 pm

Very interested in that house in the picture. Is a creepy doll named Annabelle included in the price?

#36 saskatoon on 10.08.14 at 9:21 pm

#9 Cato the Elder

dude…i mentioned this to you in garth’s last post, but this isn’t a strictly a “problem”.

for most, maybe.

but for some, it is a definite solution.

and who is “our”?

being specific helps properly identify the upper-echelon sociopathic thespians.

over-generalizing like this keeps them hidden–right where they wanna be.

#37 OttawaMike on 10.08.14 at 9:24 pm

#20 crowdedelevatorfartz on 10.08.14 at 8:01 pm
For all you govt workers out there that are in denile.
Remember de nile is just a river…………..
———————————————————-
I’m gonna pay for this but here goes:
No doubt that the day of reckoning is due for municipal pensions, in fact most municipal employees under 35 already accept that they will lose their indexing or a portion there of.

The subject of overpaid govt. workers is a favorite straw man around this blog. I work in the utility sector and can tell you that the engineer in charge of my city’s drinking water purification plant’s employees along with the billion plus dollars worth of infrastructure, earns $114k per annum. Keep in mind that this is the fall guy should there ever be a Walkerton style tap water crisis.

The men and women who operate and maintain the water and sewer systems here typically work 12 hour shifts and are on call to ensure these systems operate seamlessly. The highest paid superintendent position is around $85k per year with the worker’s earning $70k at the top bracket. All of these jobs require multiple trade licenses and or a technologist certificate.

Yes working conditions are nice most of the time as we are a not for profit sector but nobody is getting rich off this work and the employee turn over is surprisingly high as skilled employees head west or to consulting firms.

Lower skilled jobs in the municipal sector are definitely at the top of the pay scale but what’s wrong with providing a living wage to someone? Many of these jobs are filled by women who would never have another chance to earn a middle class wage.

#38 Inglorious Investor on 10.08.14 at 9:28 pm

#23 Blacksheep on 10.08.14 at 8:08 pm

Thanks for those links, Blacksheep. What’s presented in the videos is very much what the enigmatic Another exposed in his posts at the Kitco site back in the late ’90s.

If you are unaware of Another, there have been two more incognito individuals who have attempted to preserve and disseminate his writings, and to expand on them with their own analysis. The first wrote under the pseudonym Friend of Another, and the second calls himself Friend of Friend of Another (FOFOA). If you want to read his stuff, it’s at http://fofoa.blogspot.ca/

I find the secret identities rather hokey, but FOFOA has built up a lot of cred with his research. Who knows, maybe he’s really Mark Carney ;)

That said, I suggest those who are interested do their own research to learn the truth, which is hidden in plain sight for those bother to look objectively.

#39 long dong on 10.08.14 at 9:28 pm

You’ll end up on The First 48 if you move into that house.

#40 Son of Ponzi on 10.08.14 at 9:31 pm

A couple of weeks ago, I posted that I believed that Merkel was the most powerful women on Earth.
One poster retorted that, given her absolute powers, it must be Yellen.
After what happened today, I must concur.
In early morning the markets were poised for another rout.
And then came the cryptic message (one that would make even Nostradamus blush) from the FEDs, and the market made a remarkable turn around.
Even the Loonie changed directions and gained 50cents in about 2 hours.

#41 Terrier on 10.08.14 at 9:43 pm

After years of denial, sheeple will soon start panicking and it’s going to be epic. Sell, sell, sell!

#42 Has anybody read...... on 10.08.14 at 9:46 pm

This?

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

#43 Tony on 10.08.14 at 9:47 pm

Re: #34 Shawn on 10.08.14 at 9:11 pm

I hope you’re not AK as well as Shawn. Your replies to questions are very similar.

#44 Smoking Man on 10.08.14 at 9:49 pm

#39 long dong on 10.08.14 at 9:28 pmYou’ll end up on The First 48 if you move into that house.

No God damn creativity..

How about

Shlong Zumanga
Face slaping Rod
SR Masavo
Carey voice coming from my belt line.

No waiting for the next essay. About nothing

#45 Mister Obvious on 10.08.14 at 9:53 pm

#34 Shawn

One need not announce they are going to stop posting. One simply stops posting. This is the internet. Nobody cares.

I don’t expect to hear anything further on the subject.

#46 prairie person on 10.08.14 at 9:54 pm

There are ghost towns all across Canada. They’re mostly the result of having only one industry, often mining. When the ore runs out, the town is done. In the early years of Western Canada, if the railway line didn’t go through a town as expected, the wooden buildings would be moved to the railway line. People have to have jobs. Detroit is a modern example of recency thinking. We’re building a lot of cars and we will build a lot of cars for ever and ever. Nothing will change. There are endless examples of property worth very little that becomes costly because there are rumors or even actual facts that opportunities for employment are going to appear. Few people have the ability or desire to look ahead and draw conclusions about the future. One of my favorite picnic spot many years ago was a small group of houses, two story, brick, beautifully constructed, all abandoned because the hydro workers they were built to house left when the dam was decommissioned. No work nearby. Detroit in miniature.

#47 Ben on 10.08.14 at 9:57 pm

Woop my Xmas came early!

#48 Retired Boomer - WI on 10.08.14 at 9:58 pm

#37 Ottawa Mike

The numbers you have shown in your post seem quite in-line to me.
I do not believe many here (or anywhere) would find those salary figures excessive.
I would also like to think the municipality has some sort of defined benefit, or defined contribution plan as well for your retirement years?

As a retired US Federal employee we had both. A small defined contribution plan, and a 401k (RRSP) type plan available. We contributed to the defined benefit
(no choice). You had the option to contribute to the 401-K plank pre-tax a portion of your salary. They matched 100% for the first 3% you contributed, 50% for the next 2% you contributed. I elected to put a minimum of 10% in there and gradually increased it over my 25 year work life there. This makes up the bulk of my retirement money today.

To get decent people to perform a job an employer needs to pay a ‘fair’ wage. What you have outlined seems ‘fair’ not extravagant to me. Sure, some will always complain you are paid ‘too much.’ The same could be said if we knew their circumstances as well.

The only government, or municipal workers I have ever known who were well off, did it with investments (not their home) over many years be it stocks, bonds, mutual funds, or rental property -if they managed it themselves.

Government jobs here are routinely shown to pay LESS, or maybe equal to their private sector counterparts, rarely more. There are comparative pay & benefit studies. These jobs often have a relatively high turn over in a 5 year period. Turnover costs money, smart employers try to limit turnover as much as practical.

#49 Renter's Revenge! on 10.08.14 at 10:00 pm

@Shawn

Please don’t go! I like your comments. They’re “heartening”. At least leave some stock picks before signing off; it looks like the market’s turning around.

#50 Freedom First on 10.08.14 at 10:00 pm

#32 SH

I named this blog for you – Garth.

Priceless Garth comment. And SH really really really needed it. But I call BS on SH. Mind you, there is many idiots with money. The $$$#’s are just bigger than for the fully leveraged idiots.

#51 Renter's Revenge! on 10.08.14 at 10:04 pm

Troll alert. — Garth

This one sounds fat.

#52 Inglorious Investor on 10.08.14 at 10:08 pm

“Falling prices do not come without falling wages. There is nothing good about this. — Garth”

I know you are generalizing, and you are speaking within the context of an over-indebted economy where money IS debt, but such summary statements can mislead those who soak up your wisdom unquestioningly.

Wages can rise and prices can fall simultaneously due to higher productivity. That’s the sign of a healthy economy. Even in our corrupt economy price deflation is the norm in sectors such as consumer electronics and, until recently at least, agricultural products.

Too many in the MSM try to convince their muppet viewers that lower prices are bad because they know (or are just told to say in their SCRIPTS – http://thinkprogress.org/climate/2013/03/11/1700411/hilarious-conan-video-skewers-media-reporting-on-gasoline-price-rise/) that it can be a sign that debt growth is slowing and the monetary expansion that we collectively rely on to keep the ponzi economy afloat is insufficient.

But that viewpoint serves the interests of governments and banks. So the message is that what’s good for the banks is good for the people. While the interests of the two are not necessarily mutually exclusive, believing that what’s good for the banks is always what’s good for the people is a false assumption in a world where the big banks engage in all manner of monetary schemes to suck every last remaining golden crumb of wealth from the people, either directly or indirectly.

What is never explored in the MSM is that it doesn’t have to be this way. But they never question the system––because they are part of it. Their great con job is making the people believe that what’s good for the establishment is good for the people. That might be true if the system was fair. One thing the MSM has done very effectively is conceal from the people just how unfair the system really is.

What was it that Henry Ford said about the banking system and revolutions?…

#53 Smoking Man on 10.08.14 at 10:13 pm

DELETED

#54 Cato the Elder on 10.08.14 at 10:19 pm

Re: #36 Saskatoon

Our meaning middle-class, hard working, decent, honest Canadians. Obviously it is not a problem for those with close access to the banks. Yes, I agree, it is by design. Regardless, it doesn’t mean that if people developed critical thinking skills and realized politicians who vie for power over our lives are sociopaths and shouldn’t be trusted, that things couldn’t change.

Based on how you’re talking, it sounds like you’re taking advantage of the system as it exists, and I applaud you for it. Unfortunately, most people aren’t in a position to do so, like myself. I am young and am very responsible with money – no debt, don’t spend much, and invest what I can. However, I don’t have access to the kind of leverage bankers have that allows them to extract enormous profits from modest returns.

International banking interests that have no loyalty to any person or country. They exist solely to burden people with debt and then move on. These are the same people and banks that were playing both sides during World War 2, just to show you the lack of scruples they really have. Do your own research. Everyone knows the story about how IBM was selling to the Nazis – well there’s much more sinister things than that.

I leave you with a quote from Josiah Stamp, who was the governor of the Bank of England – where the monster was born. Here’s what he said:
“Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back.”

#55 james on 10.08.14 at 10:19 pm

#12 Mary Ponsertho

Toronto has one world class University, namely UofT. York and Ryerson are schools that you go to if you cannot get into somewhere decent (Schulich and Osgoode excepted). McMaster is a good school, but it is not in Toronto.

Only so many people can go to UofT every year, so it is not by itself a justification for high housing prices. What matters are employment opportunities.

#56 james on 10.08.14 at 10:22 pm

#48

“Government jobs here are routinely shown to pay LESS, or maybe equal to their private sector counterparts, rarely more. ”

There are many studies showing that private sector workers earn LESS than their public sector counterparts because of pension plans, etc.

This is not a huge sample, but I urge you to check out the salaries for employees of Stockton, which is bankrupt. Then check out private sector salaries in Silicon Valley. IT people in Stockton’s government outearn engineers at top companies on salary at equivalent levels, not even taking into account pension plans. (Elite engineers at high levels of experience can earn more in the private sector, so I am talking about junior and senior people, not rockstars). There are, obviously, no comparators for police and firefighters.

#57 Smoking Man on 10.08.14 at 10:29 pm

When it comes to relationships, you’re either on the inside or the outside. Standing in the door way.
Well that only gets you hurt no matter if the wind is blowing in or out.

2014-Smoking Man

#58 OttawaMike on 10.08.14 at 10:32 pm

Shawn

Be careful of the door it has the tendency to hit one’s ass on the way out.

#59 CPG on 10.08.14 at 10:35 pm

Garth. I think Bloomberg News and the financial blogs are doing a better job informing Canadians about the “money issues” in this country than our main stream news media.

Poloz to Publish Paper Used for Private August Speech

http://www.bloomberg.com/news/2014-10-08/poloz-to-publish-paper-based-on-private-august-speech.html

#60 Smoking Man on 10.08.14 at 10:40 pm

#53 Smoking Man on 10.08.14 at 10:13 pm

Deleted, imposter….

There can be only one…

Nice catch Gartho

#61 SH on 10.08.14 at 10:42 pm

#50

Not sure why you don’t believe me or what exactly makes me an idiot.

Look up sales in Lawrence Park over the past number of months and years. The data is out there and the area is on fire.

I believe real estate is ridiculously overvalued as well, but I’ve waited 6 years and I’m not getting any younger, so I’d like to pull the trigger and buy. Even if I buy something for $3.5 and it goes down by a million next year, I’ll be ok. I’m planning on living there for at least 15 years with my family.

One thing I’ve realized is that there are a lot of people with money in Toronto. The high end of real estate is very strong, despite what Garth says. The numbers are out there to prove this…

#62 Nemesis on 10.08.14 at 10:44 pm

“Until you need a new phone, that is, and the rug’s on fire.” – Hon.Bard[akaGT]

#FunnyYouShouldSayThat,AuldPol… #LessonsFromTheCriticalPast… #Parable,Much?

http://youtu.be/ybbeV_3rKYM

[BonusTao?… or, ExorbitantPrivilege?… You decide, SaltierDogz. JustForMischief!… &for SeeingItFromBothSides. TheBrentwoodPeople: http://tinyurl.com/ot6m9zm ]

#63 45north on 10.08.14 at 10:49 pm

This is turning out to be the shortest fall selling season I have ever seen.” And Phil’s been doing this job for 18 years.

and this is the hottest market in the country! It’s not going to be better in King City or Brampton or Montreal! Winter is coming and sales drop. This is going to bite in the spring – I’d say May 2015. Nobody promised that you could sell your house for more than your mortgage. Nobody.

Here’s my Detroit story: On Sunday, I was in Detroit.

http://kunstler.com/clusterfuck-nation/marching_toward_zombieland/

#64 dave on 10.08.14 at 11:02 pm

Having a fantastic University means bupkiss if there are less jobs or rising interest rates mean that you cannot afford a home. I lived in what was once one of the wealthiest cities in the United States – St Louis. It is now largely a wasteland – dangerous, dirty, abandoned and sad. Industries that left the city included : lead, printing presses, shoe manufacturing and many others. They are all gone now. And you can buy a home in that city for the cost of back taxes to the city. Incidentally, Washington University of St Louis is one of the best universities/medical schools in the Western World.

#65 Retired Boomer - WI on 10.08.14 at 11:07 pm

#56 James

note my comment….government jobs here are routinely shown to pay Less, or maybe equal to their private sector counterparts, rarely more.”

Yes, do anomalies exist? Sure, maybe your Stockton example is one. I’ve heard their firefighters and PD had a sweet set-up as well. Matters not. The city went tits-up it has been declared DEAD. Does their union contract matter now? Courts will decide who gets the shaft the taxpayers, or the membership.

Detroit is an example of a city who failed to react to change, see where they are now? Chicago might soon be in the same crosshairs of change. Others on the horizon as well. Yes, we had NYC in the 1970’s. Philly, Camden and other old industrial cities have had, and ARE having survival issues with old pension promises, and changing times.
One thing you can bet on. Change happens, or as the Devil’s Advocate says “Shift Happens” sometimes faster than we can realize it! The velocity of change appears to be accelerating, our institutionalized systems are quite slow to react, we ourselves never see it until it slaps us upside the head -or wallet!

Nobody is going to be responsible for your security in the final analysis except YOU!

Are you preparing yourself as best you can for unseen SHIFT?

#66 Financial Freedom at 40 on 10.08.14 at 11:09 pm

#32 SH
…I have been looking for a home in Lawrence Park for over one year. A year ago, my budget was $2.5 million. Now, it is $3.5 million and i still can’t find anything… Lawrence Park is hotter than ever unfortunately….
——
Average sale price for Lawrence Park
Spring 2008 $1.6M Fall $2M
Spring 2009 $1.3M Fall $1.8M
Spring 2010 $1.9M Fall $2M
Spring 2011 $2.4M Fall $2.1M
Spring 2012 $2.3M Fall $2M
Spring 2013 $2M Fall $2.2M
Spring 2014 $2.7M Fall $2.6M
Avg household income $800K
Meets definition of ‘special’?
(Just avoid driving on Bayview Ave, or Yonge, or trying to get in or out of the area…)

#67 Mark on 10.08.14 at 11:23 pm

“And to see people bash Buffett and in one particularly annoying case to suggest his success was more luck and leverage than skill.”

The format of this blog doesn’t exactly lend itself to an in-depth discussion of Buffett’s record, and his extensive use of leverage. He’s a genius for using leverage when it was appropriate to use leverage, but as a stock picker, I believe even Buffett himself has commented that he probably would have done just as well in a S&P500 index fund rather than his selection of assets.

So is deciding when to use leverage a skill, or is it luck? That’s debateable. BRKA looks great right now because the US stock market, in particular, the financial sector has experienced many decades of well above average growth. But the philosophy that Buffett uses does not appear to be well positioned for a rising long-term interest rate environment, and Buffett is likely too married to the dogma that made him rich to be nimble enough to change at his old age. Its what ends up happening to every dynasty that lasts long enough, Buffett not being unique in that aspect either.

#68 Mark on 10.08.14 at 11:28 pm

“IT people in Stockton’s government outearn engineers at top companies on salary at equivalent levels, not even taking into account pension plans. (Elite engineers at high levels of experience can earn more in the private sector, so I am talking about junior and senior people, not rockstars)”

San Francisco bus drivers, and even San Jose police officers, out-earn most Silicon Valley engineers adjusted for pensions. The SV engineers are strung along with the future promise of being able to sell stock, but most SV tech firms don’t have earnings, hence, its very unlikely that the stock will have much, if any long-term value. Those ‘elite engineers’ you speak of are extremely rare, and nearly all >$200k salaries in the tech sector are that of managers and lawyers, not of ‘elite engineers’.

#69 Kenchie on 10.08.14 at 11:29 pm

#3 VanRant on 10.08.14 at 7:24 pm
“Say it isn’t so. Assessed values at the Olympic Village has dropped 20% in three yrs according to BIV!”

Got a link?

#70 Insurance Pro on 10.08.14 at 11:29 pm

Dean Connor at Sun Life will do ok during and after the Canadian real estate correction. Sun Life will reject more policy claims for life and disability insurance than they do presently. Just to give you an idea what a Sun Life policy holder has to go through to get paid on a claim, just visit
http://www.canlii.org and query for Sun Life. Look at all the Canadian court cases that policy holders have to initiate just to get the judges to rule in favor for them. Look at all the time and effort policy holders have to waste on Sun Life.

#71 Linda on 10.08.14 at 11:30 pm

#37 – Ottawa Mike – your salary figures are in line with what large municipalities pay their employees. However, I find there is a real bias towards government workers & their pension plans, specifically their DB pension plans. I can’t begin to estimate how often I’ve read comments complaining about how government workers get inordinate sums of pension money upon retirement. What no one has yet been able to explain to me is why these workers, who are supposedly going to receive mucho moolah, are still working when they could be collecting their inordinately large pensions. Oh wait – one person did comment & said these people still work ‘because pensions are less than earned wages & they need the money’. Talk about trying to have it both ways – take that pension away, it is too much but – the people involved need to work because the pension won’t cover their costs. Am I the only one who sees a slight conflict in the logic here? Plus, if people can’t afford to retire, even with a ‘rich’ DB pension, then why bother taking the pension away? If these folks can’t afford to retire the pension won’t ever be paid out…..

#72 Nomad on 10.08.14 at 11:33 pm

Roller-coaster stock markets today.

Down 1% intraday, limit orders triggered on beaten down XEG, ZEO, XMA, XIT, and mainly ZIN… plus rockstar pimp tech stocks like Avigilon.

Post Fed minutes, market is up 1%+, Avigilon up 9%, the party is on! Well, for those who had the guts to buy.

Oil is down 20% over last what, 5 weeks? Hold onto the rollercoaster Calgary! Those smaller companies… how they will manage with lower oil prices…will be instructive.

#73 Nemesis on 10.08.14 at 11:34 pm

“I am now half titanium.” — Hon.Garth

#BonusBonusTao. #Us,too-Oddly

http://youtu.be/AUaea_SGN5c

[NoteToGT: Strictly speaking, it was much closer to USD1M$… Of course, in those days… a Million was, like, worth way more… Right?]

#74 young & foolish on 10.08.14 at 11:45 pm

Wow … this blog must be like a slow drip of poison for house owners

#75 earlybird on 10.08.14 at 11:47 pm

That’s interesting….I have the real estate chat daily with many people, and today was the first time in years that someone said, “I’m not going to pay that, I just wont do it, how can it be that much, its just not worth it”…and they were in their late 20’s. That age group is usually the most house crazy and have a short sense of history…low rates for this long are creating very serious problems….the benefits have long exhausted themselves.

#76 Kenchie on 10.08.14 at 11:47 pm

#9 Cato the Elder on 10.08.14 at 7:34 pm
“I’m not sure how much more clear it needs to be that the Bank of Canada and our politicians really don’t have our interests at heart.

This entire scheme is destined to fail, and when it does, the ones who caused the problem are going to buy everything up at fire sale prices.”

It’s a fallacy to believe that everyone in society have their interests aligned. The basis of democratic politics is to negotiate a most beneficial outcome for as many competing interests as possible. Therefore, your sweeping statement is ignoring how the world works, probably because CATO stands for “can’t accept the opposite”.

Maybe certain individuals and companies fail, rightly so, but not everyone. And those who do buy up “everything” at fire sale prices clearly have different interests than those losing “everything”.

#77 Leo Tolstoy on 10.08.14 at 11:48 pm

The CEO of Sunlife Financial could have given the same speech to say that if the stock market crashed that retirements would be pooched. Who cares?

Overpaid, self-important company drone making speeches based on conjecture and speculation.

No wonder people think CEOs are overpaid.

#78 As Is Old Man on 10.09.14 at 12:14 am

#37 OttawaMike said:

… what’s wrong with providing a living wage to someone? Many of these jobs are filled by women who would never have another chance to earn a middle class wage.

Are you serious? The city is not a f*%^#$^ charity. In the real world you get what you are worth. They are not “earning” a middle class wage – they are being given it. And the issue is not only that salaries and wages are out of whack with the private sector and actual value, it’s also that there are TOO MANY sucking on the sagging dried up tax payer’s teats!

#79 Happy Renting on 10.09.14 at 12:16 am

#34 Shawn on 10.08.14 at 9:11 pm

Come on back, after your break, when you find this fun again.

And thanks for letting us know. You don’t sound elderly, in poor health, or living a precarious lifestyle, but one does wonder when regulars drop out with nary a peep.

#80 raisemyrent on 10.09.14 at 12:37 am

meanwhile in BC, people just don’t get it. Caught up with old co-worker. Guy works 10 hour days as a supervisor in construction. Mid 30s. Got a good government project (it’s all we get) gig in COMOX. Bought a house. (you saw this one coming, right?).
Ever since I’ve known him, his goal in life has been getting a raise and saving for a down payment on a house. He was working in [the] Vancouver [area] and renting a house in Burnaby with no issues, rent protection, and more than enough bedrooms for the kids and mastiff. Wife wasn’t happy.
Now he’s the proud owner of a 2,400ft2, 5 BR, $346,000 liability in one of those towns you have to google (no offence to anyone).
In all fairness, he’s been wanting to go back to that area for a while, but here’s to hoping Comox real estate has hit rock bottom already, and to all the future working-out-of-town drinking nights he will enjoy (and me pretending I’m not in town that night).

#81 Tim on 10.09.14 at 12:40 am

Any words of wisdom for Vancouver’s would be mayors who are making the empty overseas owned houses/condos an election issue? They seem to be talking about a non resident tax….but if you can sit on an empty 3mil home, will a tax make any difference? Maybe limiting the number of properties they can hold??
Ps. Carney seems to be doing the same trick with Britain ‘s real estate as he did with ours in Canada.

#82 Internal Auditor on 10.09.14 at 12:58 am

Garth why no mention of the Fed minutes? Interest rates at these levels could stay lower longer than you predicted? With the pop at the end of the day I’m surprised you neglected to mention this.

#83 Has anybody read...... on 10.09.14 at 1:12 am

this?

http://www.huffingtonpost.com/2014/10/08/china-gdp-tops-us_n_5951374.html

#84 Son of Ponzi on 10.09.14 at 1:29 am

Seems like the locals in Richmond And Vancouver West have still plenty of money left for spurging on expensive French wines:

“Almost 70 per cent of the 2011 Bordeaux wines available sold out province-wide on Oct. 4,” said spokesperson Tarina Palmer.

How did sales go at the Richmond liquor stores?

Both the Brighouse and Ironwood branch finished in the top-10 stores in Bordeaux sales.

Brighouse sold more than 3,200 bottles to place second in overall store sales, behind only Vancouver’s 39th and Cambie’s B.C. Liquor Store.

http://www.richmondreview.com/business/278452001.html

#85 jane24 on 10.09.14 at 1:37 am

The highest world ranked university in Canada is actually McGill in Montreal. Most of the top 20 are either American or British.

Read the yearly ranking tables in the Times Higher.

from an academic!!

#86 pretentious hipster bicycles on 10.09.14 at 2:03 am

Got a call from a nice chap from the RBC yesterday. The skookum fellow called to inform me that not only had they dropped the interest rate on my 35k LoC to prime plus 1, that they could go ahead and transfer some over to my chequings account so I could go shopping. Whats up with these bloody wankers????

#87 pretentious hipster bicycles on 10.09.14 at 2:05 am

To my above post i should add that my LoC is unused and just sitting there for emergencies… they sure are desperate for me to spend their money though

#88 Mike in Surrey on 10.09.14 at 2:07 am

If you can consolidate all your consumer debt by refinancing into a 5 year fix mortgage back in 1990. The interest of 87% of $36,000 salary base on 12% interest is $3,758 a year. Or over 10% of what you earn that year. But today is only 5% of what you earn if you make $72,000 a year. Families piles on a new SUV, vacations to accumulate $120,000 consumer debt. Money is 50% off!

#89 LH on 10.09.14 at 4:56 am

Dear smoking man

What brand of cigs do you smoke?

LH

#90 Steve French on 10.09.14 at 6:22 am

Ambrose Evans-Pritchard

80% Dutch householders 25-34 in negative equity. Such are the awful social effects of debt deflation

https://twitter.com/AmbroseEP/status/520128363290038272

#91 Millenial on 10.09.14 at 6:59 am

So Garth,
Is now a good time to rebalance my portfolio and purchase some Detroit real estate?

#92 bigrider on 10.09.14 at 7:03 am

#12 Mary Ponsertho on 10.08.14 at 7:39 pm
“And even at these levels, over eighty per cent of Canadians say real estate’s a great investment. It’ll never let you down.”

Real estate is a great investment. Canada is one of the best countries in the world to live right now. Toronto is acclaimed for one of the best universities in North America, and the Toronto District School Board is one of the highest ranking school districts in the G7 nations.

Living in Toronto is an investment. House prices are only going to skyrocket higher because Toronto is the new Manhattan of Canada.

Canada offers its citizens free healthcare, quality education and subsidized tuition, what more can greedy old white men want other than a barefoot wife to cook him dinner?

Sorry Garth, Toronto is evolving and you have to keep up with the trends.

Troll alert. — Garth
===========================
An Italian Canadian if I ever did see one.

#93 bigrider on 10.09.14 at 7:17 am

#32 and #62 SH

I actually believe what you are saying about Lawrence Park but what I think you are failing to realize is that the rate of price increases on the properties you have referenced are probably not very much greater than anything along the Yonge street corridor going up as far north as, dare I say it, Richmond Hill.

Please see #66 Financial Freedom at 40 comment quoting average sale prices. That rate of growth not very much different than anything along the entire Yonge corridor, up to about Major Mackenzie Drive.

#94 OttawaMike on 10.09.14 at 7:44 am

#77 As Is Old Man on 10.09.14 at 12:14 am

Your argument has convinced me. Municipal employment is charity and the middle aged lady that is collecting the money owing for water used or issuing work orders for a broken water main in a street intersection should not be making 50k plus benefits.

We should pay her $12/ hour like tha cashier at the Metro. After all we are competing with China now and the only solution is to bring every worker in Canada down to the same level.

I was visiting Mumbai India recently and they have a limited municipal services and taxes. We should emulate that model. Who needs working traffic lights, safe drinking water or raw sewage contained to pipes under the streets when we can have the Mumbai model and stop this milking of the taxpayers teat?

Imagine how much better each home owner could live if the property tax burden was reduced to a couple of hundred dollars per year?

BTW: Municipal employees do pay 50% of their pensions through hefty biweekly deductions. It is not a gift.

#95 maxx on 10.09.14 at 7:53 am

“Are we too thick to see the connection?

Of course we are.”

Greed and fear also operate in perfect harmony, with our illustrious cb and finance ministers laying out the yellow bricks of low rates, allowing fools to raid rsp savings and extreme, economy-destroying funding of CMHC.

All the while, realturds pump “buy now or buy never” and HAM like the sky is falling, distort market stats and foment bidding wars. No official intervention, no problem!

Gullible and stupid. Canuckleheads and unforgivably, their leaders….

Still, the fools at the helm refuse to deal with the real economy by raising rates. More advanced entities will do it for them because they are clearly no longer in control.

Canuckleheads will never stop borrowing and adding to the debt pile until rates are raised.

Our dumbbell economy of mostly commodities and FIRE is already in the toilet. It is now chasing taxes, utilities and basics like food at disproportionate increases. Small wonder Canaduh is once again worried about cross-border shopping. That shopping is more impactful than when the economy was healthy.

#96 The real Kip on 10.09.14 at 8:02 am

Wow, you pick Detroit to compare to Toronto, Calgary or Vancouver? Really?

Detroit once had a population of 1.8 million and now is under 700,000 mostly black underprivileged people and a perfect example of the millions of Americans left behind by a country that, in your opinion, is doing fine. Half of the inner city school children are on federally subsidized lunches. They can’t even feed themselves. Hardly surprising housing is worth less than an iPad.

Segregation is alive and well in Detroit.

#97 Rainmaker on 10.09.14 at 8:21 am

Post #32, #50 & #61

“I named this blog for you – Garth.”

Isn’t what she or he is planning to do consistent with what you have preached – that is, if you can afford a home given your overall financial situation (net worth and income) go and buy one – if that is important to you. Just don’t do it if it will put you in a difficult financial situation if things turn south – loss of job, RE market, etc.

This individual has indicated they can afford it if the market were to turn south and that owning a home in this area is important to their personal lifestyle. Seems reasonable to me AND consistent with everything I believe to be sound financial and lifestyle planning & living.

Garth, I find your blog to be a place of financial sanity. You share some excellent information that many would benefit from. Lets welcome and encourage different perspective’s from people like SH -we all learn from it. I know I do.

#98 Victor V on 10.09.14 at 8:23 am

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/toronto-condo-construction-starts-to-slide/article20997242/

The number of condo units under construction in Toronto has been sliding. But the trend is almost certainly temporary.

Bank of Montreal economist Robert Kavcic spotted the decline in Toronto condo starts and noted it in a research report Wednesday. He titled the report “Is the bulk of Toronto condo building behind us?” and added: “It certainly looks that way.”

If that’s the case, it would be welcome news to those economists and policy makers who have long been concerned that all of the cranes dotting Toronto’s skyline are a sign of overbuilding. Two years ago, former finance minister Jim Flaherty told The Globe and Mail’s editorial board that Toronto developers appeared to be willing to build new units until sales dried up, which could lead to a crash. He was concerned that buyers who entered the market just before the music stopped could get burned. “I do worry about the last person buying a condo in Toronto, and people getting caught,” he said at the time.

#99 TurnerNation on 10.09.14 at 8:23 am

Comments section is descending into a loserish insanity of gold nut talk.

Might be time for Ctrl-F Smoking search, and move on.

#100 Londoner on 10.09.14 at 8:29 am

“…over eighty per cent of Canadians say real estate’s a great investment. It’ll never let you down.”

Cue Rita Ora with her UK hit single, “I will never let you down” (written from the house’s perspective obviously):

#…
When you say you’ve had enough
And you might just give it up
Oh, oh,
I will never let you down
When you’re low on love
I’ll be what you’re dreaming of
Oh, oh
I will never let you down

There’s a million ways to go
Don’t be embarrassed if you lose control
On the rooftop, now you know
Your body’s frozen and you lost your soul

‘Cause I’ve been sick and working all week
And I’ve been doing just fine
You’ve been tired of watching me
Forgot to have a good time

Let me take you where you never go
Have a little fun, it’s the only way we know
Let me show you what you never see
You know how to love only when you’re holding me
…#

#101 Simon on 10.09.14 at 8:54 am

I have enough invested assets (in a balanced portfolio) to buy a house outright, and yet I rent. This is in large part thanks to what I’ve learned here for the past few years.

Thanks Garth.

#102 Holy Crap Wheres The Tylenol on 10.09.14 at 8:55 am

Well, the point of this little story is to demonstrate what was worth $116,000 six years ago – because people had jobs and could pay their bills – is now worth nothing. Those who believe real estate has intrinsic value divorced from the wider economy or human population shifts are naïve. Inexperienced. Sheltered. Canadian.
_____________________________________________
I lived in Motor city back in the day and it will not happen here. I was there when the 12th Street riot started. It was not pretty. The demographics are completely different here in Hogtown. Never happen here, I guarantee it.

http://www.youtube.com/watch?v=DPXL3iEVnCM

#103 crowdedelevatorfartz on 10.09.14 at 8:59 am

@#37 OttawaMike
“The subject of overpaid govt. workers is a favorite straw man around this blog. ”
++++++++++++++++++++++++++++++++++++

At no point in my comment did I say govt workers were “overpaid”. I mentioned unsustainable pensions.

However. If you want to “go there”. Ok.
My experience with friends and relatives that work in the public sector is thus.
They are paid a fair, equitable, industry standard wage comparable to the private sector.
BUT, there also seems to be 3 staff for the same job that 1 staff in a similar private sector job. Nothing like boosting the amount of employees under ones command to justify another salary increase. Happens in the private sector but not to the same extent.

Lets just stick to pensions and benefits.
THAT’s what my statement and the links were about.

Unaffordable, bankrupt govt employee pensions that are becoming more and more unaffordable as the boomer retirement tsunami sweeps across Canada and the US. I blame the anonymous govt officials and politicians long dead or retired that agreed to these ridiculous pensions.
They should be tied to stocks and pelted with rotten vegetables by the legions of pensioners in Detroit , Stocton etc. that have been sucked into believing their pensions were perfectly ok.

Denial is not just a river.

#104 };-) aka Devils Advocate on 10.09.14 at 9:05 am

#32 SH on 10.08.14 at 9:01 pm

I named this blog for you. — Garth

#50 Freedom First on 10.08.14 at 10:00 pm
#32 SH
I named this blog for you – Garth.
Priceless Garth comment. And SH really really really needed it. But I call BS on SH. Mind you, there is many idiots with money. The $$$#’s are just bigger than for the fully leveraged idiots.

#61 SH on 10.08.14 at 10:42 pm
#50
Not sure why you don’t believe me or what exactly makes me an idiot.
Look up sales in Lawrence Park over the past number of months and years. The data is out there and the area is on fire.
I believe real estate is ridiculously overvalued as well, but I’ve waited 6 years and I’m not getting any younger, so I’d like to pull the trigger and buy. Even if I buy something for $3.5 and it goes down by a million next year, I’ll be ok. I’m planning on living there for at least 15 years with my family.
One thing I’ve realized is that there are a lot of people with money in Toronto. The high end of real estate is very strong, despite what Garth says. The numbers are out there to prove this…

You’re not alone SH. And it remains to be seen who the “Greater Fool” is.

Last year was “The Year of The Low Ball offer” as many fence sitters got tired of doing so waiting, like you, for six years for prices to fall. Those fence sitters thought “if prices aren’t going to fall to where I think they should be I’m going to make them do so with a “low ball” offer”. Paradoxically all those I’m aware of who entered with such an attitude paid handsomely more than they expected they would.

This year is ”The Year of The Multiple Offer” as so many who have been waiting for the bottom realize it has long past and that the market is on fire and if they don’t buy now they may be forever priced out of the market.

Who is the “Greater Fool”, those who have been pining away the past six years, and still are, hoping for a crash so they can vultch a real estate deal or those who have finally realized it’s just not going to happen, remains to be seen. Clearly though, those who bought more than six years ago, when Mr. Turner first coined the phrase “Greater Fool” are proving not to have been quite so foolish as prices never did drop nearly as much as they rose and are now higher than ever.

Real estate is a long term hold. Most of the posters on this blog are speculators trying to time the markets. That is a fool’s game as it just can’t be done. At best they might get lucky. But odds are they’re going to lose just like the past six years has proven the market followed quite a different path than Mr. Turner and the Blog Dawgs predicted each and every one of the 2,190 past days. But they should not get too discouraged for, eventually, there will be capitulation they can grasp hold of and say “See… we told you so”. But it will be only a fleeting 15 minute of fame so to speak as the market rebounds. We, they, won’t let it fail.

#105 Cato the Elder on 10.09.14 at 9:07 am

Re: #75 Kenchie

The guys at the top DO have their interests aligned. I love it when people are so dismissive of ‘conspiracies’. Folks, conspiracies happen EVERYDAY. The act of conspiring is simply when people get together and work in concert to advance their own interests. You don’t think the rich and powerful do this? You’re naive.

And by the way, when you talked about companies failing, notice that the BANKS never do? Maybe because we bail them out? Maybe because EVERY LIVING CANADIAN is on the hook for all their risk taking through the CMHC? This is NOT a level playing field – it is rigged to their advantage.

And how are their interests aligned? Just look at the donations received by politicians. You will see the same companies donating to EVERY political party. Why do you think THAT is? They win no matter who gets elected!

Also, Cato was a great man. If more people had listened to him maybe Rome wouldn’t have fallen and we’d be 1500 years more advanced today. His son killed himself rather than live in a world ruled by Caesar. Not many people had the courage they did.

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

On a side note, I wanted to post to talk about China and why we’re idiots. We’re idiots because our politicians are inhibiting economic growth at EVERY turn through politically correct nonsense. All those regulations on Alberta and everyone’s concern over ‘global warming’ (hate to break it to you, but we’re in an ICE AGE. Most of Earth’s history didn’t have polar ice caps. Warming is a GOOD THING and it’s NATURAL) is total nonsense. Now, electric cars are becoming more and more popular (look at Tesla). We only have a few decades more to take advantage of the massive amounts of wealth that can be extracted through oil/gas. We’re going to look back on it one day and say ‘damn, we could have REALLY taken advantage of that moment in history and instead let complainers and irrational people prevent it’.

I mean, yes Alberta is booming. But it would be 10x what it is if the government would get out of the way. And no, I’m not suggesting massive pollution. I’m suggesting respecting property rights, which would inhibit pollution. I’m also suggesting that we quit preventing them from developing the region to it’s full potential. I love nature, but people need to get a grip. The earth is MASSIVE. I saw a documentary recently that demonstrated how out of touch we are with the realities of pollution in terms of our fears. Did you know an area of 10 square miles could fit all of America’s garbage for 100 years?! GET A GRIP PEOPLE.

See, I know the real reason for all these regulations. They want us to get nice and comfortable and accepting of our lessening living standards. That’s right: energy prices going up? Don’t blame government, blame global warming! You wanted regulations on their to save you’re health, right folks? Man, people sure are gullible.

#106 };-) aka Devils Advocate on 10.09.14 at 9:19 am

VEGAS BABY

#107 };-) aka Devils Advocate on 10.09.14 at 9:29 am

#85 pretentious hipster bicycles on 10.09.14 at 2:03 am
Got a call from a nice chap from the RBC yesterday. The skookum fellow called to inform me that not only had they dropped the interest rate on my 35k LoC to prime plus 1, that they could go ahead and transfer some over to my chequings account so I could go shopping. Whats up with these bloody wankers????

It’s a business. Afraid you have no self-control? They hope so. As for everyone else who gets hooked on the drug of easy credit… WTF do you care. They are stimulating this Ponzi Scheme economy to the benefit of the level headed. It’s none of our business what another chooses to do. It’s not for me or you to tell someone “I think the pink house is ugly and that they should buy the yellow one”. And it’s not for you or me to tell someone they can or can’t afford what they think they can. To each their own.

It is what it is.

How do you think things work? How do you think the economy keeps growing and growing? Do you honestly think it will end? NEVER. And when it does you’re going to have a whole lot more to worry about than money and the material shit it buys.

Learn to ride the tide.

It is what it is.

SHIFT happens.

#108 CWB on 10.09.14 at 9:45 am

Please, Garth, don’t say “SFH” (as in “popped over the $1m mark”) when you really mean detached house (i.e. semis not included).

#109 Holy Crap Wheres The Tylenol on 10.09.14 at 9:46 am

The unthinkable, Not only are they cuddly but………………

http://www.youtube.com/watch?v=5bGvv2VUP_8

#110 Italians love real estate on 10.09.14 at 9:56 am

#91 bigrider on 10.09.14 at 7:03 am
#12 Mary Ponsertho on 10.08.14 at 7:39 pm
“And even at these levels, over eighty per cent of Canadians say real estate’s a great investment. It’ll never let you down.”

Real estate is a great investment. Canada is one of the best countries in the world to live right now. Toronto is acclaimed for one of the best universities in North America, and the Toronto District School Board is one of the highest ranking school districts in the G7 nations.

Living in Toronto is an investment. House prices are only going to skyrocket higher because Toronto is the new Manhattan of Canada.

Canada offers its citizens free healthcare, quality education and subsidized tuition, what more can greedy old white men want other than a barefoot wife to cook him dinner?

Sorry Garth, Toronto is evolving and you have to keep up with the trends.

Troll alert. — Garth
===========================
An Italian Canadian if I ever did see one.

——————-

Bigrider, she probably is an Italian Canadian and she is most likely right, as it seems to be what the evidence suggests.

Perhaps you could be a little less condescending to an entire group of people to whom you have same background ( as you say)

#111 young & foolish on 10.09.14 at 9:57 am

RE prices are disconnected from salaries, like stock prices are disconnected from economies.

Where’s the value?

#112 Ray Skunk on 10.09.14 at 10:08 am

House prices are only going to skyrocket higher because Toronto is the new Manhattan of Canada.

We’ve got one here! Amazing scenes.

You need to post more often. Seriously.

#113 liquidincalgary on 10.09.14 at 10:17 am

Shawn said:

Some of you will be glad to know I am swearing off posting here until at least December 1.

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

and we will keep watch for your nom de plume

#114 Smoking Man on 10.09.14 at 10:18 am

New home prices up… In the big 3 city’s, down in the East. Flat everywhere else..
I
Markets getting clobbered, expect a prop up by 11 bonds and treasury flat.

CDC dusting off its vast quantity of heremedacly sealed caskets. Hum?

#115 liquidincalgary on 10.09.14 at 10:20 am

Shawn also said:

I imagine there will be a huge groundswell of support begging me to please, please not go, but my mind’s made up. Might see you back on December 1

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

‘delusions of Smoking Man’?

#116 45north on 10.09.14 at 10:21 am

raisemyrent : Caught up with old co-worker. Guy works 10 hour days as a supervisor in construction. Mid 30s.

good story! I fear for him.

pretentious hipster bicycles : The skookum fellow

never heard that before. I assume you’re in BC?
http://en.wikipedia.org/wiki/Skookum

OttawaMike : Your argument has convinced me. Municipal employment is charity and the middle aged lady that is collecting the money owing for water used or issuing work orders for a broken water main in a street intersection should not be making 50k plus benefits.

it took me a minute to realize you were being sarcastic. City (City of Ottawa) workers work hard. The politicians do too. Maria MacRae announced that she would not run again. She worked hard and stood up for what was right.

#117 Ivan the Moderate on 10.09.14 at 10:26 am

UK is already implementing Garth suggestions

http://www.bbc.com/news/uk-england-gloucestershire-29443240

Grey squirrel the focus of festival burger-making contest

#118 Colin Laney on 10.09.14 at 10:29 am

#54 Cato the Elder on 10.08.14 at 10:19 pm

I leave you with a quote from Josiah Stamp, who was the governor of the Bank of England – where the monster was born. Here’s what he said:
“Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back.”

####

So why not own the banks?

#119 Financial Freedom at 40 on 10.09.14 at 10:35 am

For fellow hog towners…

Playing with this TO real estate prices map on the G&M is about as much fun as looking at a stock price chart, calculating P/Es and price supports and thinking you can predict some future behaviour or time the market.

What housing areas are your volatile tech co’s that have irrationally spiked sans solid fundamentals? What are your dividend paying blue chips (good name, quality builds & great location) that will still be the top brands in 20 years?

http://bit.ly/1hGE7e6

How much research went into your illiquid housing buying decision?

#120 maxx on 10.09.14 at 10:37 am

#21 crowdedelevatorfartz on 10.08.14 at 8:01 pm

Sobering points…..and “de nile” only ever succeeds when you are in a position of superiority.

#121 M on 10.09.14 at 10:51 am

Inexperienced. Sheltered. Canadian. = dead meat, road kill…etc

#122 -=jwk=- on 10.09.14 at 10:51 am

What part of “housing will never come down until the government stops giving away free money” does everyone fail to understand?

Nothing else matters.

Until CMHC stops backstopping the market, it is not going down. A .25% raise is irrelevant, heck a 1% raise is irrelevant.

#123 Tony on 10.09.14 at 11:03 am

Re: #94 maxx on 10.09.14 at 7:53 am

Exactly and it’s CanaDUH not Canaduh and CanKnuckleheads.

#124 bdy sktrn on 10.09.14 at 11:05 am

10 bond makes new 52wk low, ecb will be buying bonds soon.

rates are going to rise when , exactly?

#125 Smoking Man on 10.09.14 at 11:11 am

#88 LH on 10.09.14 at 4:56 am

Gone Vapour….. But every now and then, Malbourh or Du Maurer.

And once in a while, un branded green stuff,

Why do you ask?

#126 joman on 10.09.14 at 11:12 am

OttawaMike.

Government worker compensation should simply be determined by the current market value for that position. If someone else equally qualified is willing to the job for less then they should get the position. Just the same as it is in the private sector. Of course on the flip side, if qualified people cannot be found at a given wage, then that would have to be increased. But that already happens anyways.

There should also be no special government pension at all. I have to save up for my retirement. Why should a government employee not have to do the same. The way it is setup right know, when I retire I will effectively have to subsidize someone else’s retirement through higher taxes. I.e. money will be taken out of my saving and given to someone else who should have saved it themselves during their working years.

Government should also actively seek to improve productivity though automation and privatization. It should be their mandate to provide the required services at the least cost, obviously within certain quality constraints. I don’t believe this is currently the case and if government was run more like a corporation then I am certain there would a lot more savings to be had.

Believe me, I don’t like the idea of eliminating jobs and cutting benefits, but that is the reality of our current social and economic system. And the consequences should be carried equally by all of us.

#127 Retired Boomer - WI on 10.09.14 at 11:25 am

#93 Ottawa Mike

Great rebuttal to #77 AS IS OLD MAN

AS IS fails to realize the high earnings out there in the private sector. Maybe not the clerk at the local stop & shop, but the corporate leaders of that corporation.

If you want to earn BIG MONEY bring something of value to an employer, or better yet be your own employer.

That’s merely the starting point, now you have to manage those earnings to pay for all the “buckets” of life, like shelter, food, transportation, savings, and investment.
Best have a bucket for fun too…. sometimes that can be the deepest bucket, if you’re good!

#128 };-) aka Devils Advocate on 10.09.14 at 11:42 am

You can learn a lot from your mistakes when you aren’t busy denying them.

#129 nobody on 10.09.14 at 11:46 am

#22 High Plains Drifter on 10.08.14 at 8:05 pm

“Switching to all Canadian bonds in the spring…”
_________________________________________

You missed a fairly good opportunity a few weeks back just before Yellen backed out of a rate rise when bond yields last peaked. We bought 10 year provincials at a bit of a premium paying 3.5%.

Hopefully another such opportunity will materialise next year again, but I’m not counting on it.

And, yes, we are one of those folks who according to Garth don’t exist. Hold bonds to maturity.

#130 Rational Optimist on 10.09.14 at 11:56 am

125 joman on 10.09.14 at 11:12 am

I was going to reply to Linda’s post about how the pension plan could be so generous if public servants sometimes cannot afford to retire. I think that, like for others, their pension plan with their employer is one of three legs of the stool, and they still need to save.

However, joman, do you know why public pension plans were introduced in the first place? It was thought that a public servant who was relatively assured of a comfortable retirement upon departure would be a lot less likely to be corrupt. I think that’s true, and even if it doesn’t justify any level of pension, it’s a justification for a fairly generous one.

Also, it’s a cliché now to suggest that “government should be run more like a corporation.” The people who originally introduced that catchphrase, do not believe it.

I’d like to see more discussion here about how to personally avoid paying more than one’s fair share of tax, than a lot of griping by people who’d clearly like not to pay any share at all.

#131 };-) aka Devils Advocate on 10.09.14 at 12:03 pm

To find happiness, you must first find the courage to let go of that which you cannot change.

#132 Dr Giggles on 10.09.14 at 12:11 pm

And when hard assets like real estate go to zero…..do you really think people are going to be lining up to buy a ‘balanced portfolio’? What will retain value in the nightmare scenario you describe? After all, a majority of Canadians have their entire net worth in houses. Fear doesn’t bring with it a logical mind…..

#133 Mark on 10.09.14 at 12:30 pm

“Until CMHC stops backstopping the market”

Budget 2013 made it abundantly clear that the CMHC limit would not be expanded above $600B. The housing market across Canada has been falling ever since (although in Calgary, Vancouver, and Toronto, the sales mix shifted, as a result of such, sufficiently so that the averages still modestly rose for a while). So not sure what your “point” is.

Since there’s no meaningful land constraints anywhere in Canada, as overcapacity continues to rise in the sector, the quality/value of the collateral will continue to deteriorate.

#134 Tony on 10.09.14 at 12:35 pm

Re: #114 liquidincalgary on 10.09.14 at 10:20 am

Shawn has also been known to post on this blog if you go back in the archives.

http://edmontonrealestateblog.com/2011/04/edmonton-real-estate-market-weekly-update-april-8-2011.html

#135 Mark on 10.09.14 at 12:35 pm

“New home prices up… In the big 3 city’s”

Of course, because only higher end units are being ordered. When you starve the subprime crowd of credit, as the CMHC has done with the limits enacted, of course the market is going to shift to the supply of higher-end units which are generally bought by people of better quality balance sheets.

The real situation though, on the ground, is of falling housing prices and tighter wallets. At $86/barrel and no end in sight to the transportation issues with crude oil, Calgary/Edmonton may as well kiss new projects in the oilsands goodbye for a while.

#136 Big Mie on 10.09.14 at 1:02 pm

DELETED

#137 betamax on 10.09.14 at 1:11 pm

“Until you need a new phone, that is, and the rug’s on fire.”

Nicely done, sir.

#138 Mark on 10.09.14 at 1:13 pm

“If someone else equally qualified is willing to the job for less then they should get the position. Just the same as it is in the private sector. Of course on the flip side, if qualified people cannot be found at a given wage, then that would have to be increased. But that already happens anyways. “

The HR system in government is rather rigged to only favour insiders and their families. If you are a mid-tier to senior leader in the private sector, good luck moving into government. The HR clerks almost always invent some nonsense requirement (such as bilingualism, excessive demands for ‘experience’, etc., etc.) to exclude good candidates in favour of their own.

Your comments describe how the system “should” work, but generally in government, it works dramatically differently than that. Things are so messed up in large parts of government that even the mere HR clerks are out-earning scientists, engineers, and other degreed professionals.

#139 Kenchie on 10.09.14 at 1:30 pm

“There is a Poison Kool-Aid Point, but it’s not where Sierra’s harassers and other trolls think it is. They see it at the point where other people start listening, or start caring, or start valuing the opinion of someone who they feel speaks for them. But it’s not there. It’s at the point where that person starts feeding followers poison, and they take it. It’s the point where people look at the hand that’s holding the cup, not at its contents. That hand too often belongs to a male demagogue, and it is never bitten.”

http://www.theguardian.com/commentisfree/2014/oct/09/trolls-men-witch-hunt-internet

#140 saskatoon on 10.09.14 at 1:47 pm

#117 Colin Laney

of course you can own the banks–but, cato tries to point out the ethical consequences involved with doing so.

if you give money to banks, you ultimately support them…including all the bad stuff they do.

this is the price of “profit”.

there is over-the-top, seemingly ubiquitous greed today, because morally, many have lost their way.

#141 Long Time Lurker on Here on 10.09.14 at 2:02 pm

For those who complain about housing being too expensive, (take Ontario for example) please go to MLS and search for condos under 100k and houses under 150k. There are a ton of them. But wait, you don’t want to live in those condos/houses? Too old? Too far? Not renovated to your taste? Shady part of the town? Not job in the close vicinity?

Live within your means. We have too many people with $1 on hand but eyeing on $5 houses. Low interest and easy credit means they can actually get $5 houses.

#142 Nomad on 10.09.14 at 2:10 pm

Yesterday’s stock market dip was a trap!

After today, we’ll have an even harder time to convince people to sell their condos for the TSX.

#143 Rational Optimist on 10.09.14 at 2:16 pm

137 Mark on 10.09.14 at 1:13 pm

“The HR clerks almost always invent some nonsense requirement (such as bilingualism, excessive demands for ‘experience’, etc., etc.) to exclude good candidates in favour of their own. “

Bilingualism is a “nonsense requirement” for a senior public servant in a bilingual country?

#144 Mixed Bag on 10.09.14 at 2:17 pm

Garth, isn’t this comment considered to break your comment rules? Offensive, no? (Not to mention stupid).

#135 Big Mie on 10.09.14 at 1:02 pm

Sorry, I missed that. Now deleted. — Garth

#145 pt on 10.09.14 at 2:17 pm

Is the Toronto Condo boom over?

http://www.huffingtonpost.ca/2014/10/09/toronto-condo-boom-bmo_n_5957930.html?utm_hp_ref=canada

#146 Retired Boomer - WI on 10.09.14 at 2:37 pm

3139 saskatoon

Cato’s posts usually have a good point. I agree on the “seemingly ubiquitous greed today.”

Yet, by Capitalism’s very definitions WHAT has changed, sir? Capitalism will likely be the destruction of itself due to the inherent greed factor.

Looking around the world, many other countries with a managed form of “Capitalism” appear to be gaining on the
old guard capitalist countries. Not to imply they will succeed only that they appear to be winning the race presently.

Profit without ethics is never a long term bet.
Where have we put our ethics?

#147 Linda Pearson on 10.09.14 at 2:42 pm

#135 Big Mie on 10.09.14 at 1:02 pm

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

Boy, that comment isn’t worthy of this blog! Garth, I hope you’ll consider deleting it.

You are correct, and I apologize for missing it. Now gone. — Garth

#148 liquidincalgary on 10.09.14 at 2:43 pm

Tony on 10.09.14 at 12:35 pm

Re: #114 liquidincalgary on 10.09.14 at 10:20 am

Shawn has also been known to post on this blog if you go back in the archives.

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

not even curious what that pompous ass posts there either

#149 Mixed Bag on 10.09.14 at 2:49 pm

#143 Mixed Bag on 10.09.14 at 2:17 pm

Sorry, I missed that. Now deleted. — Garth

No problem, I figured it was something as innocuous as that, with only a friendly mention required.

#150 Mark on 10.09.14 at 2:52 pm

“Bilingualism is a “nonsense requirement” for a senior public servant in a bilingual country?”

In many cases, absolutely. Especially in areas that are deeply technical, and are mainly conducted in English. The language of aviation is always English, so why would, for instance, bilingualism be demanded of a senior engineer in the airworthiness branch of Transport Canada?

#151 bigrider on 10.09.14 at 3:08 pm

“#141 Nomad on 10.09.14 at 2:10 pm
Yesterday’s stock market dip was a trap!

After today, we’ll have an even harder time to convince people to sell their condos for the TSX.”

Unfortunately I think you are probably correct.

Garth we need this RE correction you have been anticipating for 6 years to actually come to fruition.

All that this recent market “correction” does is re-enforce the behaviour of the house humping masses so prolific in T.O.

Houses do not decline by 20% in a matter of weeks ( like for example the energy complex has) nor are there ‘red’ signs second by second throughout the day on BNN reminding anyone of this fact.

#152 OttawaMike on 10.09.14 at 3:12 pm

#137 Mark on 10.09.14 at 1:13 pm

“If you are a mid-tier to senior leader in the private sector, good luck moving into government. The HR clerks almost always invent some nonsense requirement (such as bilingualism, excessive demands for ‘experience’, etc., etc.) to exclude good candidates in favour of their own. ”

——————————————————

Completely false statement.

Firstly, the feds picked up and continue to absorb many of the cast off tech workers left in the wake of the tech bust and Nortel’s flame out.

Secondly, a major the cause of the high price to run govts. be they in the form of hospitals, municipal or federal sectors is that all procurement and HR policies are based on the premise that some nefarious intent is possible. There are so many checks and balances in place that hiring takes 2-3x as long as in the private sector with required documentation and testing at every stage.

Low bid contracts often result in the govt. sector purchasing substandard services or goods because they are beholden to a purchasing bylaw that demands the lowest bidder win instead of the best value.

I believe you mentioned that you are an engineer. Engineering consultants are probably one of the most prolific groups who purvey their services to govts. without any performance evaluations or clear breakdowns of their delivered services. Legal services fall into the same category.

#153 Andy on 10.09.14 at 3:47 pm

Whats happening in Wall Street Garth…..The world seems uncertain. Dow loosing 1% One day after Germany results, gaining 1% back after Fed says something and drops 1.5% back next day ….What will happen when the Fed actually increases the rate….bloodbath?

#154 Mike S on 10.09.14 at 4:01 pm

“Of course, because only higher end units are being ordered. When you starve the subprime crowd of credit, as the CMHC has done with the limits enacted, of course the market is going to shift to the supply of higher-end units which are generally bought by people of better quality balance sheets.”

Not sure about that. from what I saw it was the lower end units moving, while high end (relative to area) were overpriced and don’t move at all. But I guess it depends on the area and unit type

Anyway, delusion is still there and so is cheap credit.

#155 Mike S on 10.09.14 at 4:06 pm

“The real situation though, on the ground, is of falling housing prices and tighter wallets. At $86/barrel and no end in sight to the transportation issues with crude oil, Calgary/Edmonton may as well kiss new projects in the oilsands goodbye for a while.”

This is why TSX going down. anyway with no end in sight how do you adjust your projections for CAD/TSX composite if the oil would go to 80/70/60/? $ and stay there for a couple of years

#156 espressobob on 10.09.14 at 4:24 pm

#154 Mike S

Global diversification? It works. Canada is 4% of the world economy. Why concentrate on that?

#157 devore on 10.09.14 at 4:28 pm

#70 Linda on 10.08.14 at 11:30 pm

What no one has yet been able to explain to me is why these workers, who are supposedly going to receive mucho moolah, are still working when they could be collecting their inordinately large pensions. Oh wait – one person did comment & said these people still work ‘because pensions are less than earned wages & they need the money’. Talk about trying to have it both ways

No conflict. Not trying to have it both ways.

What I said was crystal clear. Fact: The pensions are lower than employment earnings, no matter how much gold plating it comes with. No duh. You’re trying to float a strawman. But just because the pensions are lower than earnings, does not mean the pensions are terrible. AGAIN, with the stupid false dichotomy! It’s a trend on this blog.

Why would you leave a secure, nice, cushy, well paying job, and jump into the nothingness of retirement with a fraction of your income? Some people will, because they’ve had enough of working, or are lucky enough to have even better opportunities elsewhere (while collecting their pensions), but the vast majority clearly do not.

Am I the only one who sees a slight conflict in the logic here?

No, you’re the only one struggling with logic here.

#158 calgaryPhantom on 10.09.14 at 4:35 pm

Regarding Equity market:

I think ( and it’s just a speculation, obviously), that it is a trap. I knew this would happen as soon as there is chants of a rate hike. People who are selling equities right now to run to bonds will loose. The volatility is being used to lure people into bonds and shunt equities. But i think, soon, bonds will take a hit and yields will rise. And all those who are piling money into bonds will loose.

I am buying more equities, as much as i can. And Yes, don’t forget to buy XEG.TO.

#159 devore on 10.09.14 at 4:53 pm

#70 Linda

Here is some aggregate data for you, so you don’t have to rely on anecdotal crutches:

Retirement before 65:
public sector: 8/10
private sector: 6/10
self-employed: 5/10

The false dichotomy I talk about refers to the choices you are apparently presenting, namely that the only options we have are A) “this pension is soooo good, why am I still even working”, and B) “this pension is garbage”.

The retirement age results are not surprising when you consider Garth presented to us many times that managed and indexed pension plans are disappearing from the private sector. You can continue to spin this, and spout illogical fallacies all day long if you like, does not change the facts.

#160 Mark on 10.09.14 at 5:02 pm

“This is why TSX going down. anyway with no end in sight how do you adjust your projections for CAD/TSX composite if the oil would go to 80/70/60/? $ and stay there for a couple of years”

Obviously lower oil prices, if not accompanied by a lowering of other input costs, will have an effect on earnings in the sector. However, most of the major TSX firms in the O&G sector are trading beneath replacement cost of their assets so they certainly could go lower, but eventually the valuations will return.

The stock market, at least to some extent, is anticipatory of what the future might look like. Oil and gas assets will always produce a valuable product, and the O&G sector as a component of the TSX has already been beaten down severely over the past number of years. Additionally, the gold component of the TSX should start ramping up and doing much better in a lower-energy cost environment.

If you listen to Bob Hoye’s comments, he talks about what happened in the 1930s, and why the gold miners exploded in price and provided prolific amounts of dividends. It wasn’t so much that the price of gold went up (it didn’t, until the dollar devaluation in 1933), but rather, that the price of all of the industrial inputs to produce it went down.

IMHO, the TSX will actually take a leadership role coming out of the decline, as it has been one of the poorest performing indices since the 2008 crash. I wouldn’t worry too much about it.

#161 Mark on 10.09.14 at 5:05 pm

Completely false statement.

Not false at all. I’ve seen it with my own eyes, with government HR clerks inventing bogus requirements, making postings “internal” inappropriately, and excluding high quality external talent, simply to protect their own.

On a message board, I can’t really prove it, and I certainly can’t go into the examples I’ve seen. But its fairly obvious that the HR function in most governments are highly dedicated to maintaining a fiefdom, rather than open organizations that facilitate labour mobility in and out of the public sector. And as a result, often far less competent individuals end up in roles and great external candidates are excluded.

#162 Mark on 10.09.14 at 5:08 pm

“Houses do not decline by 20% in a matter of weeks “

Houses absolutely can and do decline by 20% in a matter of weeks. However, price discovery is far less immediate as housing is a heterogeous asset class, as opposed to the homogenous asset class with rapid and almost instant price discovery that you see in stocks.

If you own stocks, and want to reduce the volatility you see, simply open your account statements only once a year.

#163 chapter 9 on 10.09.14 at 5:27 pm

#149 Mark
The annual cost to the Canadian taxpayer to maintain bilingualism at the federal and provincial level is a staggering $2.4 Billion.
I have a family member that to keep her job had to take French. Keep in mind this is rural Alberta. Travel expenses to Edmonton,her salary,,meals,hotel instruction 8 hours aday 5 days a week for six months and let’s not forget the cost of the teacher.
In the last five years how many times has she actually spoken or used French at work— ZERO!!!

#164 Crowdedelevatorfartz on 10.09.14 at 6:06 pm

@#151 OttawaMike
“Your statement…Secondly, a major the cause of the high price to run govts. be they in the form of hospitals, municipal or federal sectors is that all procurement and HR policies are based on the premise that some nefarious intent is possible. There are so many checks and balances in place that hiring takes 2-3x as long as in the private sector with required documentation and testing at every stage.

Low bid contracts often result in the govt. sector purchasing substandard services or goods because they are beholden to a purchasing bylaw that demands the lowest bidder win instead of the best value.”
++++++++++++++++++++++++++++++++++++

Well lets see.
“nefarious intent”
Hmmmmmm like THIS company ?
SNC LAVALIN ?that managed all Canada Post properties, ALL CBC properties, ALL Canadian Military Properties, ALL Canadian Military procurements?
THAT company?
SNC Lavalin. Pure as the driven snow……..

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=0CD0QFjAG&url=http%3A%2F%2Fwww.calgaryherald.com%2Fbusiness%2FComments%2BSNCLavalin%2Bwerent%2Battempt%2Bintimidate%2Bauthorities%2Bsays%2F10274575%2Fstory.html&ei=PAU3VLWtOKTSigL9r4HICw&usg=AFQjCNEZomie220e8YwXjdl02YCndWVx7g&bvm=bv.77161500,d.cGE

Or this little “escapade” by a former SNC employee hired back as a private contractor. Stopped in Mexico with Lybian Leader Mhomar Quadaffi’s son and millions in bullion, bankdrafts and fake Canadian Passports…
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0CDQQFjAD&url=http%3A%2F%2Fwww.cbc.ca%2Fnews2%2Finteractives%2Fsnclavalin-vanier%2F&ei=EAY3VPLxDYutogSt7oK4Bw&usg=AFQjCNF0cN9898VxXdd3vIuHV9ngF0GbJg&bvm=bv.77161500,d.cGE

Yesssssss, Its good to know Canadian govt employees are spending 2 times the cost to double check every vendor.
Riiiiiiiiiight.

I didn’t know you could pile horse manure so high.

Lazy, slothful, insolent, untouchable slugs couldn’t hold a candle to most govt workers.

But enjoy that pension while it lasts.

;)

#165 Mike S on 10.09.14 at 6:07 pm

“#154 Mike S

Global diversification? It works. Canada is 4% of the world economy. Why concentrate on that?”

It just that Mark has some peculiar point of view (CAD to go up & TSX to deliver dual digit gains for several years)

It doesn’t practically matter for diversified investor, but it does matter for the GIC/saving account guys

#166 Mark on 10.09.14 at 6:27 pm

It just that Mark has some peculiar point of view (CAD to go up & TSX to deliver dual digit gains for several years)

What’s so peculiar about pointing out that domestic debt deflation is generally currency-positive, as is a cyclical rotation back into the equity markets away from bond/real estate investing? What’s so peculiar about using the P/E of the TSX, adding a historic rate of nominal GDP growth (which is roughly consistent with long-term earnings growth), to come to an implied return in the 10-12%/annum range?

I don’t get it. If you study the reason why the TSX has lagged the Dow since 1980 (TSX = 2000, Dow = 1000), and look at it in terms of the structure of the balance sheets of Canadian listed corporations, its fairly obvious that the long-term deflationary environment for commodities has been brutal. But the Canadian economy, relative to the US economy, is quite lean and mean at this point, and we should easily outperform for many, many years to come. The result of fiscal discipline, our resource endowment, and an almost unmatched capacity for growth.

#167 Mark on 10.09.14 at 6:31 pm

“The annual cost to the Canadian taxpayer to maintain bilingualism at the federal and provincial level is a staggering $2.4 Billion.”

Those are just direct costs. The indirect cost of hiring and having less talented (albeit bilingual) people in those positions is certain to be significantly greater than even $2.4B.

Not to mention that on occasion there are talented bilingual people who end up pigeonholed into government jobs, when they really should have spent their careers more usefully creating value for society in the private sector.

Labour in-mobility and artificial barriers to employment damages the entire economy, and just like the CMHC, hurts economic growth.

#168 Cato the Elder on 10.09.14 at 6:35 pm

Re: #145 Retired Boomer

I love capitalism – it’s the only system of wealth creation thus devised by man that takes his vices and turns them into virtues.

In order to acquire wealth in a capitalist system, one must provide a service or good of value to your customer. This is irrespective of your motivations, be they greed or altruism. You can only ‘get rich’ by HELPING others.

What we have today is hardly capitalism. We have crony capitalism, which is more akin to fascism. Big government and big business working together to block out competition and allocating resources through confiscatory taxes (not voluntary transactions).

This is why we have been getting collectively poorer. It is so upsetting to hear people, especially the young, bashing capitalism like it is at fault. Ladies and gentlemen, capitalism is the reason you have ANYTHING of any value whatsoever in your lives. We ought to get on the ground and PRAISE the entrepreneurs that sweat and toil and risk and overcome burdensome government all for our sakes. And they do it without the guarantee of a profit at all – they could LOSE money for all that effort!!!

We ought to be vilifying the politicians that are creating this atmosphere, not those that are providing us goods and services in spite of the challenges they impose.

#169 Mike-in-Calgary on 10.09.14 at 6:56 pm

Hey Garth…

I’ve been following your blog now for a few years kinda lurking around and not saying much. Great stuff by the way. I love the shock value. People need that.

I remember graduating from high school in a town just outside of Calgary in 1981. Long time ago, but my formative work years were spent in Calgary with $12 oil prices, 17% interest rates, and the National Energy Program.

Oil companies were laying off in droves and hiring freezes were everywhere.

I spent about 5 years plugging away in the trades before giving up and going to university. This year I’ll pay more tax than I made in those 5 years, so I guess things worked out.

In my late teens and early twenties, I remember all the stories from guys who were my age now that had lost everything. And I mean everything and they were working alongside me! Businesses, houses, wives, families…all gone.

Welcome to the recession where houses were flipped for $1 just to get out from under the payments.

At the time, I never really did understand what all that meant. I was 19 or so. My goal then was save some cash and hit the ski slopes on the weekend or have some beers with my buddies.

But with the passage of time I realized that I did pick up a bit of wisdom. And that is that debt can be really, really, really bad should circumstances change. And change they do.

With that background, I paid off my first house in 7 years. My second in three. I ended up giving the second to my ex-wife (it was kind of a bummer, she’s still the mother of my children) but I should have my current house paid off in 2 or 3 more years. I’ve never paid more than 2 times my annual family income for a house. I could get a bigger house, but that won’t make me happy. Freedom makes me happy.

I’m not telling you all this to brag, but I wanted to share an observation. I was at the hospital with my son last weekend. He needed some minor surgery due to a mountain biking mishap. But what shocked me when I looked around and saw how packed the place was and the age of most of the patients. My son’s nurse told me they were at 120% capacity.

Demographics are a reality whether we want to acknowledge it or not.

The baby boomers are now closing in on 70. Soon, they won’t have the physical capacity to run up and down the stairs in all those big houses they live in on the west side of town. Nor will they have the energy to clean and maintain them. And with what I saw over the weekend, I’m not sure how the hospitals are going to cope with the inevitable pending rush.

There is going to be in shift in demand. That’s coming whether we wish to believe it or not. And, with the interest rates as they are, we’re all impacted by what’s described as the “tyranny of small numbers” where a 1% change has a much greater relative impact when rates are 2.65% compared to a 1% change when they’re 8 % or 9%.

I was talking with a younger client the other day (I’m a tax accountant so the skirt comes up when they meet with me) and we started talking about houses, mortgage rates, debt loads, etc. This guy was in his early 30’s. He’s never really experienced an economic recession. 2008/2009 was just a blip to the guy as he did have a good job and the rent he was paying wasn’t much in relation to his income. And we were talking about him buying a house. He was talking about buying a house that was 6 or 8 times his annual income. He wanted to skip past starter home and live in the style his parents had become accustomed to. And hey, it had to be in the right funky neighborhood because anything else just wasn’t cool.

As I was talking with him I was reflecting on my experience at the hospital and I mentioned that to him. I also brought up the fact that interest can only go up. Changing demographics can result in a lot of unforeseen events which can have an impact on the future and this may or may not be good or bad. And with all that, I suggested he might want to consider dialing back his enthusiasm on the house thing and maybe consider something more reasonably priced in relation to his income.

Garth, I may as well have been talking to a squirrel. He was looking at me, nodding his head but I knew nothing was registering. It was then his turn to talk…and talk he did.

I’m not sure if you’re aware of this, but things are different now according to this guy. Interest rates will always be low or will be low for at least the foreseeable future. It’s the new paradigm. With the new demand, oil prices will always be high and Calgary will always be a prosperous city…blah, blah, blah…

How could I be so uninformed?!?

I might be right. I might be wrong. I can’t predict the future. But I do believe that with the low interest rates we have lived through the greatest opportunity in the history of modern banking that would allow many of us to get out of debt and live unencumbered lives. And most of us have done the exact opposite.

Interesting times indeed.

Keep up the good work.

#170 saskatoon on 10.09.14 at 6:58 pm

#167 Cato the Elder

well said, cato.

#171 crowdedelevatorfartz on 10.09.14 at 7:02 pm

@#162 Chapter 9
Oui, total agreement.
The majority of bank machines in the Lower Mainland of BC offer “English” or “Chinese” as your option for banking.

French is irrelevant west of the Ontario/Manitoba border

#172 Sheane Wallace on 10.09.14 at 7:34 pm

http://ceoworld.biz/2014/10/09/old-g7-hypothetical-new-g7-impact-world-economy

the rising powers, the new world and us, the suckers managed by idiots/the likes of Harper and Poloz.

#173 Ret on 10.09.14 at 7:34 pm

The history of Hamilton is eerily very similar to that of Detroit.

Industrial decline, flight away from the water to the burbs, contaminated sites often with vacant buildings, crime, deteriorating infrastructure, lots of low income people, high property taxes, etc.

Interestingly, the same failed Detroit solutions that didn’t work are trotted out as solutions for Hamilton.

Building hospitals, universities, stadiums and a proposed expensive LRT public transportation system did not work in Detroit and it won’t work in Hamilton.

The latest load of rubbish is that the art is the new steel.

Another Art Crawl every month on James North and a few more bike and rapid transit only lanes and this city will be on top once again! Right.

#174 Sheane Wallace on 10.09.14 at 7:39 pm

What the world thinks of us

http://www.youtube.com/watch?v=EyShGogzIn4

#175 Sheane Wallace on 10.09.14 at 7:43 pm

#167 Cato the Elder

exactly,

It is time to show the idiot ‘leaders’ the door. With a kick in the back and jail time.

#176 jess on 10.09.14 at 7:45 pm

rascals

UBS France put under formal investigation

Swiss bank UBS’s French unit has been put under formal investigation in Paris for alleged complicity in suspected illegal business …
http://www.swissinfo.ch/eng/ex-banker-heads-to-florida-to-testify-in-weil-case/41048188
http://www.swissinfo.ch/eng/paris-court-affirms–1.1-billion-bond-for-ubs/40793648

French tax evasion
http://www.swissinfo.ch/eng/in-depth/pressure-on-the-financial-sector-
Registering the beneficial ownership of legal entities
Switzerland has to tackle the issue of its shell companies, which are still denting the country’s image in the world, Transparency International said.

#177 Cato the Elder on 10.09.14 at 8:22 pm

Re: #172 Ret

The solutions they’re implementing are characteristic of their ignorance: that governments can create wealth. What these politicians don’t realize is all the industry, steelworks, and everything else in that city were derived through the private sector. Even the things that are normally attributed to the public sector such as roads could only be built through confiscatory taxes on private wealth creation.

This whole preoccupation with ‘green’ is really scary. It’s scary because people don’t realize that we’re being conditioned to accept LOWER LIVING STANDARDS. Everyone’s being encouraged to bike nowadays. I love biking and it’s healthy, but is that really an UPGRADE? Less car driving, more biking, pretty soon even that will be a luxury and we’ll be told walking is best.

And wind and solar energy is SIGNIFICANTLY more expensive than coal or other conventional means. So use less electricity folks! Use those CFL bulbs that give you headaches because incandescent are ‘bad for the environment’ (even though incandescent mimic candlelight and are the most palatable).

Man, I used to be very adament about the environment – when I was in my early teens. Then my brain grew larger and I developed critical thinking skills. I started to QUESTION DOGMA. I started to ask why BIG CORPORATIONS whose only interest is to earn a profit were lobbying for environmental regulations. And then I realized – small and medium sized businesses (their competitors) can’t afford to comply! What a scheme! Convince the public that regulations that are HURTING them are actually good, and they’ll love you for it!

Oh, and this video helped too :)

https://www.youtube.com/watch?v=ozO4YB98mCY

#178 Linda on 10.09.14 at 8:23 pm

Devore, I find it interesting (but expected) that someone would upon my questioning the richness of government pensions immediately attack my logic. What I’m getting at is that many people complain about the richness of government pensions, but see no dichotomy over the fact that a growing percentage of government workers are not retiring when they are fully eligible. Your comment about why leave a cushy job implies they all of them like their jobs so much they can’t bring themselves to leave it. Also, I find it rather telling you call retirement ‘nothingness’. It may be how you consider it, but retirees I know all of them lead very full, active & interesting lives & are definitely not existing in a state of ‘nothingness’.

#125 Joman – Ah yes, the eternal ‘why can’t we contract out the work & ensure taxes are wisely spent’ idea. It will be so much less expensive.

Joman, this has been tried at a municipal level & you are correct in part. In the beginning of the magical contracting out process, the honeymoon stage, costs are far lower than those pesky, expensive municipal services provided by municipal employees. Joy is yours as taxes cease to rise & services continue to flow. However, all good things must come to an end. The contracts signed amidst much rejoicing eventually come up for renewal. At that point, the contractors bidding have the ability to recoup their true costs for future services and the golden profit taking years (for them, not the taxpayer) are ready to be reaped. Repeat after me – the main mandate of any business is to PRODUCE A PROFIT. But competition! you cry, competition will keep prices low & taxes low. Uh-huh. So you’d think, but somehow the reverse occurs. IF you do somehow manage to keep getting low ball contracts, I’d be taking a close look at the infrastructure those companies are supposed to be maintaining. Usually something that was in relatively good shape is being left to rot to the point of becoming a public hazard – because the company has to make money somehow & cutting corners on maintenance is the easy way to keep those profits flowing. For a rather closer to home view of this, look to Montreal. Lots of contracting out has occurred & gee, haven’t they had some issues with bridges falling down, bridge decks with holes big enough to drop a Smart car through, kick-backs on the construction bid process & so forth. Think of the Olympics – the bid process for the stadium. Cheap it wasn’t – cost a billion & took decades for the lucky taxpayers of Montreal to pay that bill off. In fact, I believe they paid it off very recently, as in within the past year.

#179 Smoking Man on 10.09.14 at 8:24 pm

#157 calgaryPhantom on 10.09.14 at 4:35 pmI think ( and it’s just a speculation, obviously), that it is a trap. I knew this would happen as soon as there is chants of a rate hike. People who are selling equities right now to run to bonds will loose. The volatility is being used to lure people into bonds and shunt equities. But i think, soon, bonds will take a hit and yields will rise. And all those who are piling money into bonds will loose.

I am buying more equities, as much as i can. And Yes, don’t forget to buy XEG.TO.

……..

You’re an idiot.. I told you bastards last week..I thought it would be Monday, so I was a few days off. Told you to look at the charts..

I’m never wrong.

Never ever bet against the Smoking Man

#180 Retired Boomer - WI on 10.09.14 at 8:34 pm

#167 Cato

Well stated. I LIKE capitalism. I do NOT unfettered unregulated, unsupervised capitalism. I leads to all kinds of mischief.

Agreed, “what we have now is crony capitalism.”

WE can only make those changes evident with our vote.

How such an ill informed public as we have in the US (and you may also have in Canada) can make logical choices based on the quality of candidate, rather than the label they wear is beyond my pay grade to assess.

Can be as lucky going forward as we have been in the past years? Time will weigh that outcome.

#181 As Is Old Man on 10.09.14 at 9:04 pm

#77 OttawaMike:

Setting aside the fact that the cashier function should be automated, yes, a cashier should be making minimum wage. Low skill, interchangeable, and plenty of supply. Just what does being a middle aged woman have to do with it? Some special dispensation is in order?

Where did I say we should do away with ALL government workers? Many are qualified and do a fine job, and some may even be under compensated. I said there are TOO many, and certainly too many making too much. Your argument is that this is good stuff. You are unreasonable, so there is no reasoning with you unfortunately.

Regarding your pensions, which I did not mention:

I don’t give a hoot what percent you contribute – taxpayers are paying the rest and paying the wages and overhead while you are working. Outside of government few have defined benefit pension plans. Why? Because they are unsustainable given longer life expectancy and skyrocketing medical costs.

Yes, trot out the old “race to the bottom” nonsense. I suppose in your fantasy world everyone would work for the government. But wait! Most of your income would have to go to paying taxes to pay for your income…do you see the problem here? Someone has to actually be productive instead of being friction in the gears of the economy.

We can’t have a system where the public servants are set while the majority suffers.

#126 Retired Boomer WI said:

AS IS fails to realize the high earnings out there in the private sector. Maybe not the clerk at the local stop & shop, but the corporate leaders of that corporation.

I didn’t fail to realize anything, but apparently you have. Sure there a high earners in the private sector just what does that have to do with the average Jane Doe struggling paycheque to paycheque looking at higher and higher taxes? She should get a government job right?

#182 Retired Boomer - WI on 10.09.14 at 9:39 pm

#180 AS IS OLD MAN

I came to government service at age 37 from the trucking industry (management), prior to that, the Rail industry 8 years in management for the AAR (Association of American Railroads).

I went to Fed service due to the opportunity to learn AND earn. 25 years there + 7 trucking + 8 RR = 40 years with steel or rubber wheels.

Few had the knowledge, skills, and abilities. Yes I earned good money all the way.

I still do some consulting on MY terms today. (Great work if you have the KSA’s few do).

You need both well educated, and well compensated personnel in both private sector employment as we’ll as government. Talent commands its own rewards always has, and likely always will. (no union needed here)

#183 bz6wp4 on 10.09.14 at 10:11 pm

Detroit is <700000. But metro Detroit is flourishing. I live a few miles north and forgetful. But I still believe that if I leave house unlocked and returned after 6 months, it probably will be the same as I left. The house is surrounded with parks and 100's of miles of tracks. Best schools and lots of jobs. The house isn't as expensive as Toronto. But what good would it be to have lower disposable income with an expensive house. What happens to the new entrants to the market in Toronto? What happens if the mortgage interest goes up? Is a correction in real estate coming?

#184 Nazihunter on 10.10.14 at 12:44 am

Hi Garth
Son of Ponzi is race baiting again on #83…read between the lines and you know what this old Nazi is hinting.
He’s out right a Gestapo on the Van blogs as he still continues to slam you…ban this idiot, please
Keep up the great writing, sir ….

#185 Rabi Dmangycur on 10.10.14 at 2:23 am

http://www.triplenine.org/main/admission.asp

Hello Garth

I have followed all your blogs and up to Oct 2006.(political) I am convinced you are a genius, and that is why you are excluded from the trappings of political power.

I know you read all your emails, and am impressed. Genius is included in Nobel prizes in such endeavours in chemistry, mathematics, economics etc. but not in common sense.
I am privileged in knowing you thru your blog. You deserve a Nobel prize in COMMON SENSE!

#186 Yanniel on 10.10.14 at 9:54 am

I don’t know what to believe anymore… Garth, didn’t you say job creation sucks? Then what is this:

“Unemployment falls to nearly six-year low”

http://www.thestar.com/business/2014/10/10/unemployment_falls_to_nearly_sixyear_low.html

A surprise number, completely out of context with the year to date. Good news, if it lasts. — Garth

#187 The Sky Is Not Falling on 10.10.14 at 12:36 pm

Really guys? The sky is falling! The sky is falling!

…..except it isn’t.

http://www.thestar.com/business/2014/10/10/unemployment_falls_to_nearly_sixyear_low.html

Calgary is CHEAP. No idea where you are all getting the idea that it’s overpriced here. I can still buy a detached home for less than 4 times the average income. And no, you bunch of mutts, oil prices are not about to fall to 35. But good luck with that. You’re starting to look a lot less like vultures and a lot more like pigeons.