Stacy Summary: I still reckon individual cities, like Vancouver, are due for a big bust, but this is another interesting piece from Jesse’s Cafe Americain.
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ref. max keiser – Get 6 mo’s free storage
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Rick Ackerman-
- Karl Denninger – Market Ticker
- The Big Picture
- Mish
- David Morgan
- King World News
- SmartKnowledge
- GoldCore
fiat money and the french revolution
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crash banksters – Buy Silver & gold
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1st
@NicAbbo77 – congrats! I haven’t seen you in awhile? Happy New Year . . .
I may be wrong, but that whole islandic thing is a fight between the wrong people. The money went into a mix managed by banks that have since skipped town. They shoul dbe dragged in by their hairs to mek the anglo dutch accountholders whole, not the icelandic people, after all, did they eat the money or stuff it in their matress?
@Y’all
Whereabouts is canada again???
No. Lending standards are more stringent. Less hustlers. Less flippers. And interest rates paid on main residence are not tax deductible. It pays to be boring and more conservative and a little anti-american. It make you more critical and less guillable. Sometimes. France too has this tradition. It helps a lot at least pour l’instant. Vancover, with it’s 100,000 opium users, is a special case because it’s a great place to launder the opium coming from Hong Kong. You indeed have to be stone to buy bricks and mortar in Vancouver. And it’s sismic as San Francisco.
STACY!
I say send Max in to see the IMF, he can rep for Iceland!
Mike
Did you see a leading UK economist has called for England to break away from the UK? He claims 80% of English would vote to breakup the Kingdom. He blames the Scotts for bankrupting the nation between Blair, Brown and their banks.
@Brandon Sanks – excuse me while I choke on my haggis! Scotland bankrupted England??????? Without North Sea oil, England would never have had the entire boom of the past 20 years.
Stacy,
I didn’t say that Roger nightingale did. The North Sea oil is now running out however. You are right England and Wales were helped greatly by the North Sea Oil. Nightingale is really mad about the RBS bailout i guess.
More on Google CEO Eric Schmidt:
In 2008 he referred to the ‘Net as a cesspool of false information (ha!) and said that brands are the solution.
http://www.devlounge.net/strategy/turn-your-site-into-a-brand
So much for “don’t be evil”.
Maybe it’s because Canada’s major banks had been Basel II compliant since Nov. 2007. Stricter regulations, regarding reserve requirements and analyses of credit risk, than what pertained in the US.
The Canadian housing situation might not be as disastrous as the U.S. but what Goldman Sucks and JP Morgan did with MBS (motgage backed securities) will bring everyone down.
The entire global financial system has been brought down and no matter what these clowns say on these financial shows, it means NOTHING.
There is no ‘recovery’ only a fake artificial stock bubble that does not reflect reality.
Until the bail outs are cancelled and Lyndon Larouche’s 4-Powers (India, Russia, China, and U.S.) agreement is reached for a return to a Fixed-Exchange-Rate system, things will continue to get worse for the real economy.
@whitemale08, Interesting suggestion. LaRouche’s former protege Webster Tarpley also calls for a return to fixed exchange rates. Would that be concomitant with a return to precious metals backed currencies? Can you have one without the other?
@whitemale08, Some entrenched interests in the US would have to lose a lot of clout before the US would return to a precious metals backed currency. Maybe Brazil, Russian, India and China, though, in the meantime.
@y’all
yeah… lets just give them newcastle and call it quits… and just admit we never liked each other anyway… and if we could con the irish into taking liverpool… SORTED … we should keep wales as it’s a good place to train the army… NEXT!!!
@Stacy, Some say North Sea oil made the Thatcher revolution possible. Sadly, the latter inspired Reagan to transform the US from the world’s greatest creditor to the world’s greatest debtor. So I guess that makes the US and the UK both banana republics, except the UK is not a republic.
Janet Yellen looks at the commercial real estate outlook 2010:
http://www.frbsf.org/news/speeches/2009/janet_yellen1110.html
“When we turn to commercial real estate, the prospects are worrisome. Commercial property didn’t turn down until well after housing did. The sector’s problems appear to stem in large part from the effects of the recession and the credit crunch, rather than the type of building boom and lax underwriting standards that tripped up housing. Still, there are some parallels between the two sectors. As in the residential market, commercial real estate values posted enormous price gains, with office values roughly doubling from the end of the 2001 recession to the peak. Since then, values have plunged an estimated 35 to 40 percent and vacancy rates are rising for office, retail, warehouse, and other income-producing properties. In Arizona, office vacancy rates started moving up in the second part of 2006 as job growth decelerated abruptly from an exceptionally fast pace. Vacancies in Phoenix are near 25 percent, about a 13 percentage point rise from the recent low.
As I indicated, credit market conditions are weighing heavily on this sector. Risk premiums on commercial real estate financing remain elevated, although they’re down a bit from the peak of the financial crisis. Average commercial real estate capitalization rates have seen risk spreads more than double over the past two years to more than 4 percentage points over 10-year Treasury securities. The market for commercial mortgage-backed securities (CMBS) remains deeply distressed and issuance is meager despite support from the Fed’s Term Asset-Backed Securities Loan Facility (TALF) and the Treasury’s Public-Private Investment Program (PPIP). Banks and thrifts, which account for more than half of commercial real estate financing, have significantly raised rates and tightened credit terms. That, combined with higher investor demands for returns and weakening operating income, points to further downward pressure on property values.”
@SG, England’s been a Dutch possession since the establishment of the BoE. They should make it officially finally and seal it with a marriage between their royal families. Let Scotland, Wales, and NI go their own ways, and form a new United Kingdom.
Max and Stacy, Great to see your postings and shows continue in 2010!
I am writing from Ontario, Canada. Good points from Jesse(which is a great blog). Our oligopolistic banking system is highly regulated and functional. However, the fuel behind our boom is similar to all markets – cheap, government backed money. Below is a link that I think worth a review on the “bubble.” Our high immigration rates/real estate investment and resources economy are also major factors for growth.
Happy New Year
D
“By the end of 2007 there were $138 billion in NHA securitized pools outstanding and guaranteed by CMHC –17.8 per cent of all outstanding mortgages. By June 30, 2009, that figure was $290 billion, a figure Lepoidevin says, “exceeds the total value of mortgages offered by CMHC in its 57 years of existence!” CMHC’s stated goal was to guarantee $340 billion by the end of this year and is on track to reach $500 billion by the end of 2010. Total mortgage credit in Canada will grow by 12-14 per cent of GDP in 2009.”
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/index.html
@frances .. Real Estate
Check out VNO , it’s “still” going up !
LOL!
http://finance.yahoo.com/q/bc?s=VNO&t=my&l=off&z=l&q=l&c=
http://finance.yahoo.com/q/pr?s=VNO
Max is on the Alex Jones show today. Infowars.com
Stacy,
Vancouver is unique in Canada;
Best weather, everyone wants to move here
Cosmopolitan, much of the wealth is from elsewhere
Land development costs are high and rising, New building costs are way up. Caps new developments and supports existing market.
Geography, limited land with mountains, Ocean and US border restricting expansion to one direction, the undesirable East.
No capital gains tax on primary residence makes a home a good investment. Referred to as a retirement fund.
No mortgage interest deductability, Canadians tend to pay off mortgages vs US. Nearly all my neighbours do not have mortgages. Million $ plus homes.
A new HST tax in coming in is adding to the cost of real estate so there has been a rush to buy before the tax. I expect a minor correction after that.
As long as commodities which are priced globally stay strong Canada will not collapse. Did anyone notice that the CDN$ rose as the US$ dead cat bounced recently.
So, no big bust no way, I do expect a minor correction after the new tax though. Our house is back at its all time high right now after a correction of about 12% in 2008. It is up 125% from 2001.
Real estate is extremely local and it is a joke when American Real Estate analysts pretend to understand this market. They have been wrong for years and years.
@frances .. VNO
Looks like an obvious short … but who knows in this topsy-turvy land of US crap stocks where BK banks go up and real companies go down !
@ SG Us Canadians keep it a secret to the geographically challenged.
Shanghai Bridge Made of Rubbish Collapses
http://www.sankakucomplex.com/2010/01/01/shanghai-bridge-made-of-rubbish-collapses/
I guess a few people will get executed for that !
http://news.bbc.co.uk/2/hi/business/8441312.stm
What would Iceland citicizens refusing to cover the bank debts mean for them as a country, and would it fire up citizens of other countries to do likewise? How does it related to what Chinese are doing?
Just listened to five minutes of Alex Jones radio show,.fffffkkkk sake what a knob!
Did you know, he can run a full hour on his running machine,. he’s THAT angry,…: )
Yes in Canada the banks actually take into account your credit rating, your income, and your income to debt ratio. Imagine that…they use common sense.
But they still are scum because they are in cahoots with the Bank of Canada to make us all debt slaves.
On a side note our Prime Minister prorogued Parliament until after the Olympics. There was a ton of legislation that was lost because of this act. Legally we have no government in Canada at this time.
I wonder what happens if a crisis of great magnitude happens during this time? With no government who rules the land?
@Phil/Germany:
If the CMBS market collapses, won’t we have an increase in homeless poor?
WHY CAN’T ANYONE IN THIS COUNTY FORESEE AND PLAN FOR TRAGEDY???
I meant country.
How Russia Is About to Dramatically Change the World
http://www.thetrumpet.com/index.php?q=6872.5382.0.0
“Over the next few days, Russia will change the world. It has completed a new oil pipeline and port complex that sets Russia up to become a more powerful oil exporter than Saudi Arabia. The ramifications for Europe and Asia are profound: The shape of the global economy—and the global balance of power—will be altered forever.”
@Max
Can Male Prostitutes Boost Economy?
http://abcnews.go.com/Video/playerIndex?id=9455572
@Danny, That could make OPEC’s oil-for-USD policy irrelevant.
@The Man from Glad … That could make OPEC’s oil-for USD policy irrelevant.
That could make the USD irrelevant !
@Danny, Good Trumpet article, till it goes off on a weak Biblical exegesis at the end.
What up What up
Hasssup
@Phil, Without the petrodollar, how long would China, et al., continue buying US T-bills?
@frances … CMBS market collapse
They said this before .. in November 2008 !
…Some of the data from the CMBS is nothing short of alarming. Yield spreads on “AAA” rated CMBX-5 indexes have reached a record (and shocking) 650 basis points. A Citibank portfolio manager reported that junior “AAA-” mortgage-backed securities are trading today at yields of 16% in thin conditions. At least two of largest mortgage-backed loans, including one for Westin Hotels, are close to default, and sell orders for a number of other similar securities will pile up as more disclosure comes into the public domain.
The credit rating agencies are, quite naturally, looking hopelessly inadequate today. The Treasury and Fed too will come under increasing criticism shortly for ignoring the embedded crisis right across the CMBS matrix. That said, investors are well-advised to act now by entering short positions in real estate ETFs (IYR) and in Ultra-Short real estate ETFs (SRS). Also, there is no doubt that the sorry state of the CMBS market is sending urgent sell-on-rally signals on the broader indexes (QQQQ)….
…
Urgent Sell Signal from the CMBS Market, Finally
http://seekingalpha.com/article/106971-urgent-sell-signal-from-the-cmbs-market-finally
That could make the USD irrelevant !
How so, Phil? Will the dollar derive value differently in future?
@The Man from Glad … Without the petrodollar, how long would China, et al., continue buying US T-bills?
…. continue ?
Yes, that was before they decided to let the US commercial banks off the basel 2 hook: I think this year it’s a sure go for regulatory chaos. Talf stepped in to securitize the market: talf ends in June.
@frances .. TALF
TARP, TALF, HAMP, HANF ?
I’ve lost track !
Maybe they should call the show Follywood !
@Phil, Have they stopped already? Last I heard that had scaled back to very short-term T-bills. I’ve been in Japan for mos., but am returning to China in Mar. Maybe this a good time.
@Phil, Sorry, it’s the wee hrs. here. Last I heard, China had scaled back to buying short-term US T-bills. Have they stopped altogether already?
@ The Man from Glad
Didja see Food Inc. ???
The moment comet was eaten up after orbiting too close to the sun
Text size
Scott Warren
http://www.infowars.com/the-moment-comet-was-eaten-up-after-orbiting-too-close-to-the-sun/
WTF
Nibiru ???????
Brrrrrr hic
@Bonn, No. What’s in it?
@Bonn, The last real estate bubble will be on Nibiru.
It was about that GMO thingy
Sent ya the link
@Bonn, Don’t see the link. Will look for a torrent. Thanks for the heads up.
Sniff Sniff lost all me poker chips
I do have the password of me GF she got 1.7 mill chips
Hic
Wondering wondering
ROFL
never Bonn has never done anyting criminal in his life
Hic
Talf has produced an artificially low TED spread, right Phil?
http://docs.google.com/viewer?a=v&q=cache:ySzuwzdTJV4J:https://www.wachovia.com/common_files/AnEconomyatNonMarketPricesOct2009.pdf+talf+created+artificially+low+ted+spread&hl=en&gl=us&sig=AHIEtbR5BLa5CmU0TdWv-wrADlwHqXg7hQ
“Yield spreads are not a reflection of the market’s risk/reward tradeoff but some nebulous spread that reflects the heavy hand of government in private markets.”
OMG are ya hearing Alex Jones show
The boys at Wachovia/Wells have a sense of humour:
“Guess about the shape of the recovery–L, U, W, V–or our favorite–the swoosh–remain guesses.”
Boomerang children: Flying back to the nest
Instead of saving for retirement, many parents are having to support adult offspring who have nowhere else to live
http://www.timesonline.co.uk/tol/news/uk/article6973991.ece
STACY!
http://online.wsj.com/article/SB10001424052748703436504574640244009472018.html?mod=googlenews_wsj
PIMCO say that a “TOB” is coming for the £ !
Mike
Man dunno who logs onto Alex Jones
I think 2 % are hooked onto the Internet
Good think I am broke I can’t travel by flight lolololol
@ttu
canadians they live in canada … do they???… oh… as for keeping canada… a secret… erm… you are doing a grand job… keep up the good work… just one question… how do you type with thermal gloves on…
Ron ron
Where ta fuck are ya
LOL
Hic
@ stacey
Da ya wan’t me to dig up
Henry Kissinger quote’in “Population is the problem”
Hic
Max coming up! I can’t wait.
@ Phil
Max coming up! I can’t wait.
Me too are ya hearing Alex Jones ????
@ Paul sorry
Hic;-)
In my experience there is no such thing as LUCK!
@Mongo, Baby needs a new pair of shoes!
How China Will Blow Past India And Control The Gold Market In 2010
“Take the following analysis with a grain of salt, but it appears China will be a massive force in the gold market this year, potentially blowing past India…”
Kinda bothersome that there is full body scans now at the airports…I’m flying out soon and I can’t imagine travelling if I have to subject my wife and kids to this (I don’t have a wife or kids right now).
Nothing makes any sense !
Gold and the Dollar relationship? What a joke, I don’t think there is one. Up Down Down up… iv given up looking at this silly value system, it makes no sense.. who cares the value of dollar. Its going south eventually END lol
Who cares what the value AAA BBB CCC DDD lol its all a political fix and makes little sense also. What is the value of a Quadrillion ? = Zero? Who is Mr Bond and what does he loose by not buying guilts? I don’t know?
Oil from Russia to China that’s interesting…. I wonder what effect that’s going to have?
Rubbish bridges in China, how nice… like the ammonia burgers in US.. what a shit whole.
So the Icelanders get a vote on something of importance to them. Wow they really are democratic. In the UK we only vote on the meaningless issues, for example our general election choices..
@ Max and Stacy, what would you guess the outcome of the Icelandic vote to be, as you covered this and visited you may have a feel for the outcome?
@Fibon11235 – the population will DEFINITELY vote against it; we just spoke to on of the organizers of indefence.is yesterday; the interview airs Thursday
http://www.youtube.com/watch?v=fX0hyeXuicQ
Gold and the Dollar relationship? What a joke, I don’t think there is one.
LOLlol
I got zero in the bank zero in gold
Hic
Stacey & Max 6000 year Scam
If and when icelanders get to vote about compensation for failed banks to UK/Nederlands.. and they say no.. IMF will pound Icelanders back to the stoneage.
@bonn
How are property taxes in India?
“Given China’s continued economic growth.”
Did you notice this caveat in the Commodity Online article Business Insider linked, Will?
I’m listening to AJ. Max up next?
here’s max!
Casino Gulag!
Casino Gulagomics!
Soldiers Inmates and Whores!
Go Wolf!
How are property taxes in India?
Its not so cool for ya ta buy property here cause sometimes local poltics could make ya investment zero
So I would’nt advise any forghiner s frm investin here unless ya connected
I pay 80$ per year on ta property I own thats around 1000 sq feet I tink
Hic
wait let me re – phrase
@Fibon11235 … Nothing makes any sense !
Ditto !
World is going crazy IMO.
Too much MSM propaganda and disinformation.
BK stocks go up , serious stocks stay flat, Penny stocks all over the place !
In relation o the body scanners, I take Max’s point on the sadistic nature of the casino operators and the massive profits Wall St and the ‘defence’ contarctors will make on this abomination.
Anyone considered demand destruction in relation to oil? Who wants to travel under these vile conditions?
@Bonn
I once intermediated a sale of a big software package for logistics (~1,2 mln usd) in India and found you have to pay a special tax of about 28% for no clear reason. That became a discount
But imho India is quite corrupt..
Denninger on Iceland …
Hint To Other Nations: Here’s The Bill
http://market-ticker.denninger.net/archives/1819-Hint-To-Other-Nations-Heres-The-Bill.html
@Danny – I love the liveblogging of his appearance. Maybe I should start a separate entry
@bonn
Not looking to buy land, spiritual reasons, just curious how things worked in your neck of the woods. 1000 sq ft? do you live in a city apartment? Thought you lived in the woods for some reason.
@all y’all
stacy put up a new post for this live interview
I do know quite about Physycology
All tiss shit is propgated by Loosers
unfortunately we elected em
Sonia Ghandi declared her assets before Election
LOL her Italian house she declared was supposedly worth 4000 $
I’ll buy it right now
LOL
she stays in a place where the price is 1000 $ per sq feet
LOL
Plus peeps I know real estate inside out
Hic
The Underfundedmentalist
@ missed one extra zero
Spiritually can’t help ya mate
Me an Athiest
Hic
It’s about 1,3 billion euro, which the dutch government had lend to the account holders for the time being, on 31 december there was news Iceland would be filling the gap. If Iceland is smart it tries to get Holland to help it recouperate the money from the IMF, because as I see it it is because of the collapsed carry trade that the kroner lost their value, and whoever profitted from that trade now ows the dutch government the money.
This imho is a US attempt to destabilized Europe, rather us than them..
Acceleration of returns forgoing humanity.
SPECELERATION!
How da we get Jon Stweart heree ????
oks laters peeps Poker Time
Hic
YEAH, Jon Stewart would be interesting!
@Frances – Did you notice the caveat…?
Oh yeah. To be honest, I’ve decided I have no idea what the markets are going to do, especially in the short term (days & weeks & months). In the longer term, the USD will be worthless, but who knows how long that will take?
But I still post stuff here for general amusement.
What alot of people don’t know is that Canada had to bailout its banks too but the government and the media kept it on the downlow…the Canadian federal government purchased “secure” mortgages from Canada’s chartered banks through CMHC (Canadian Mortgage and Housing Corp.)
Canada’s 75 Billion Dollar Bank Bailout
http://www.globalresearch.ca/index.php?context=va&aid=12007
Obviously the reason there was no housing bust in Canada is that Americans trying to get out of the dollar and get out of the US are hitting the MARKET BUY! MAX POSITION! button.
Couple of things. First, there is an express difference between what you would call housing and real estate in terms of equity.
Jesse might have an old chart to compare CDN/US prices, this one is updated every month:
http://www.gettingtechnical.com/01_home/market_commentary/can_en.html
The S&P TSX Real Estate Index declined along with all other markets, just look at this chart:
http://stockcharts.com/h-sc/ui?s=$SPTRE&p=W&st=2002-01-01&id=p31592049983&listNum=2&a=187720108
Peaked in 2007, and really crashed along with everything else. Very possibly the Canadian Real Estate Sector was heavily exposed to international commercial banking sector losses.
Canadian housing prices are well beyond housing prices in the U.S. even with the exchange, but getting that point across to anyone in Canada is like pulling teeth.
Here’s Flaherty, lying through his teeth:
http://www.bloomberg.com/apps/news?pid=20601082&sid=akkWGP9Sz5bw
2010 CRISES FINALLY REACHES DUTCH MAIN STREETS
According to The Economist Canadian House prices are still Overvalued +20.6 and even worse in the Netherlands +21.2
http://www.huizenmarkt-zeepbel.nl/images/CFN683.gif
If that’s true 2010 will prove to be the Real Crises year for some countries.
This seems to be the case fors the Netherlands were Unemployment increased 5,25% in 2009 (3,6% in 2008) but for 2010 8% Unemployment is expected and House Prices will continue to decline.
The IMF pictures a much diffirent picture about Canadian Over priced Houses though but are still “bearish” about the Dutch House Over Pricing.
http://www.huizenmarkt-zeepbel.nl/images/House_Price_Gap_CFN127.gif
But I know the IMF is wrong about the Netherlands cause it doesn’t adress the spesific Dutch Housing situation namely THE DUTCH HOUSING SHORTAGE SITUATION FOR MORE THAN 30 YEARS! I mean In October Dutch house prices were 5,25% lower than in in October 2008!? That’s not dramatic at all (yet).
But on Dutch Commercial Estate it’s a much different story where prices decreased 25% in the last two years. This doesn’t show in the books yet cause most investors don’t sell to keep the higher value on their books helped by the banks who provide these investors with postponed pay schedules. The Dutch Commercial Estate business Inflated and many offices never will be rented again even when the economy grows.
@ FranSix – The real estate sector in Canada is diverse. In my region: Fredericton New Brunswick (east coast of Canada), real estate prices are not “bubbleized” like they are in Western Canada.
Our home is a 5-bedroom, two storey, 3-bath bungalow that was built in 2000. We have a landscaped lot, swimming pool, an out-building, and garage sitting on 0.6 acre lot. It is on a municipal city water and sewage system and is close to schools and shopping.
What would that go for in Western Canada? Here it is worth about $175,000 max. When we bought it we paid $125,000. That was in 2001.
@ SG
I keeps me thermal gloves, thermal undies, and beaver-skin hat outs in me igloo.
Checked it again but coincidently the Dutch Unemployment (5.2%) is the same as the decline of House Prices (5.25%) over 2009.
There was and is a Canadian housing bust, but by the scale of the US and UK housing busts — it is statistically not that significant.
Canada was not lucky.
It was only a matter of
1. Regulation against sub-prime lending
2. Less securitizations
3. A different banking system, where banks held mortgages
4. A lot slower uptake on US and UK finance system innovations
5. Etc …
The lack of a Canadian housing bust is not helping my American friend that was born in Canada — his ability to by a house in BC’s outports is still limited due to the high costs of housing.
Someone better tell WL that Vancouver is the bubble of all bubbles waiting to pop. The guy is clearly delusional if he thinks Vancouver has sound market fundamentals. Some quick stats for you, it takes 2.7 incomes to qualify for a home in Vancouver, explain to me how that is sustainable ? Also as prices increase, wages are falling, and personal debt is growing at an alarming rate. BC has some of the highest taxes in the country and still needs billions to pay for the olympics. Where is that money going to come from ? From the poor taxpayers of course in the form of higher taxes since they don’t have a printing press in Vancouver. I am sitting here in Calgary watching our bubble starting to deflate, how is it no one in Van. thinks their property market is a mega bubble ?
Actually, in Canada, we did have a form of credit contraction in the Asset Backed Commercial Paper market, where the government bailed out brokerages who defrauded the public, and should have gone bust. But here we are, sometime later, with the government bailing out mortgages.
A housing bust would mean a relentless equity decline. So the property presently worth so much could very well be worth -30% some time in the next year or two. That’s what its about. With everyone signing variable interest rate mortgages nowadays, then the bust is not far off, as equity declines follow on interest rate hikes. The Canadian market is not unlike the Alt-A in that respect.
The conclusion that you can draw from the Canadian experience is that government backing serves no other purpose except to keep housing prices beyond the reach of most and to put these people on the hook once it all goes sour.
Graph update supression:
http://finance.yahoo.com/q/bc?s=CADUSD=X&t=3m&l=off&z=m&q=l&c=
It still says 21 DEC as of the time of this post.
NZDUSD
AUDUSD
Are up to date…
==============
The real estate sector in Canada is diverse. In my region: Fredericton New Brunswick (east coast of Canada), real estate prices are not “bubbleized” like they are in Western Canada.
==============
There are vast areas in Western Canada where there is no properties bubble:
BC:
Kamloops
Kewlona
Alberta:
Red Deer
Most of the prairie provinces have neborhoods in their major cities where there is no bubble, but all towns smaller than 100,000 people have no property bubble.
Ontario:
Sudbury, assumed
Soo Saint Marie, pending verification
The picture in Canada has been one of chronic unemployment, jaded government statistics, and deficits as far as the eye could see for many, many years. But for a short time, Canada was sitting on a surplus (mostly from cutting benefits to the unemployed – which they paid into – and was fully funded) and now sits on an immense deficit once again. (mostly from bailing out banks and brokerages that booked record profits on junk paper.)
But the banking sector is racking up profits and waxing holier than thou by “limiting” bonuses.
No different than anywheres else, I expect.
===========
Canadian housing prices are well beyond housing prices in the U.S. even with the exchange, but getting that point across to anyone in Canada is like pulling teeth.
===========
1. The houses have to endure crushing amounts of snow
2. Canada is more expensive to live in generally, heating costs notwithstanding — but indirect government costs are very low vs US’s that are now astronomical
3. The exchange rate issue may be dead as CADUSD may be in parity mode for a year
4. Canadians don’t have a tropical environment like the US (or UK or Spain) that is amiable to housing speculation — notice the BC housing bubble vs Manitoba … you buy a house to live in and that is that
5. Canada is a UK white colony, so long ago it was instilled in the populous that the colony must be profitable — so there is no intellectual mindset for large scale gambling or speculation
6. Canada is a functioning civil society, more or less — and the US is on the other hand in in a perpetual state of lawlessness … unhappy people gamble like drunken sailors
The question “Why was there no Canadian Housing Bust?” implies that its potential has passed. It certainly hasn’t. And to suggest that it has, is lunacy.
By the same token, the US has not experienced its housing bust yet either. Most people have absolutely no idea how devastating this rout will be when it comes.
We are in the third inning.
Canadians should refrain from getting all huffy about real estate bubbles as if it could never happen here, and point the finger at the US as some sort of immoral camp.
Remember, there has already been a serious real estate bubble and collapse in the early 90′s.
If your house hasn’t appreciated to well over 400k $CDN, then the equity in your home has fallen well behind inflation. Canada has been printing money to the tune of 13% or more YOY since 2002.
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“Brand affinity is clearly hard wired,” he said. “It is so fundamental to human existence that it’s not going away. It must have a genetic component.”
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Adam Smith never spoke about brands as far as I know, and their existence in general is still new (< 200 y) … but branding was known to be done by
http://en.wikipedia.org/wiki/Carthage
with its foodstuffs sold into Greece before that empire was crushed by the Romans.
The Carthaginian names were rendered into Greek chars … ! ! !
That said it is at best a commercial habit that has waxed and waned since Alexander the Great's time.
Is Windsor, Ontario a part of Canada , I think so, you can now buy a older well conditioned 3 bedroom home their in a good neighborhood for 50-60 G range. wow.
Also look for a 20% crash in the lower mainland of BC housing market shortly after the Vancouver Olympics end.
Windsor is being directly affected by the auto sector decline.
Links etc …
http://www.cbc.ca/consumer/story/2008/11/14/f-realestatemap.html
http://www.cbc.ca/consumer/story/2009/12/21/f-hire-home-inspector-real-estate.html
http://www.cbc.ca/canada/british-columbia/story/2008/11/14/bc-real-estate-values-fall-okanagan.html
http://www.cbc.ca/canada/british-columbia/story/2008/11/03/bc-vancouver-real-estates.html
http://www.cbc.ca/money/story/2008/12/12/f-pittis-bankofcanada.html
http://www.cbc.ca/money/story/2009/11/12/f-vp-pittis-world-weakest-currency.html
Take in a bit of history during the depression, and you will see that the attitude in Canada was that they would fare better than in the U.S. during that time, but in reality Canada was much worse off.
Now, Canada has nothing backing its currency as it had sold off all of its gold in 1994 to Goldman Sachs.
If anything Canada is in a very dire situation and must print money like its going out of style to prop up its economy. That spells currency failure.
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If your house hasn’t appreciated to well over 400k $CDN, then the equity in your home has fallen well behind inflation. Canada has been printing money to the tune of 13% or more YOY since 2002.
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Sadly, the FOREX rates for Canada have not been harmed by this…
The CAD @ 0.80 USD has worked in the past, but the US is now so prone to hyperinflation and general FOREX value implosion that even with the crummy and suspect practices of the central bank are of little use…
I would have hoped that the 2007 Finsec crisis would have slowed money printing, but so far it probably has not done so.
Its interesting to note that the Japanese Yen has been in a massive bull market for years, but nobody notices. They print money like its going out of style and have had Quantitative Easing for decades.
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The picture in Canada has been one of chronic unemployment, jaded government statistics, and deficits as far as the eye could see for many, many years.
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Canada has always reported its UI figures differently, they are much higher as you are seeing realistic numbers.
Canada’s deficit spending vs Australia is not unusual for its population size or economic or productive assets.
Canadian “cumulative debt per person” is still probably orders of size smaller than the US’s — now at 700,000 USD per person.
The US has a 69,667% negative savings rate….
Ok, just so’s nobody thinks I’m prone to exaggeration, a house in 2002 worth ~$125k CDN would have to have appreciated to assuming a constant rate of 13% increase of money supply to ~$222k CDN.
So a house worth ~$175k CDN in that time has lagged inflation by a very significant percentage.
But the average housing price, considering all sales in Canadian centres, is past $400k CDN., propped up solely by legerdemain.
Jesse’s link to the Bailout Details in Canada:
http://www.socialistproject.ca/relay/relay25_dasilva.pdf
It maybe a “socialist” source, but the really one of few sources reporting on it in Canada:
“On November 12[2008[, the Department of Finance announced that it would buy up another $50-billion in securities by the end of the fiscal year through the CMHC as part of its Insured Mortgage Purchase Program (IMPP), bringing the total of the programme up to $75-billion. This was justified as part of the government’s efforts to maintain the availability of longer-term credit in Canada. Simultaneously, the government announced that they would indeed “guarantee…more than $200-billion to pay back new loans made to Canadian financial institutions.”
“The rich ruleth over the poor, and the borrower is servant to the lender” (Proverbs 22:7).
We were luckier to be a little behind the US top in housing. We lowered the interest rates a long time before we reached the top of the market. So we have delayed the reconing a little bit further. But make no mistake things are bad here as our factories pack up and leave Ontario and Canadas heartland.
Nothing is over-priced unless no one can afford to buy it. Vancouver, B.C. median house price far exceeds the median income.
The truth eventually boils down to the math. You can continue the charade for a while, through market momentum, but eventually, there has to be an adjustment.
I think all major Canadian cities are due for a Real Estate bust. Canada has not escaped the real estate speculation and price inflation that has hit most of the world’s major cities. This is primarily due to the tiny interest rates set by the Canadian central bank. Garth Turner, author of “A Greater Fool” has a daily blog that details the current craziness of Real Estate markets in Canada. You check out his blog at http://www.greaterfool.ca/
Yes, I think its not so much as a price decline in housing at the root of recession, but the lack of available credit to keep housing in turnover.
If you wish to peruse housing in any city in Canada, you can always refer to mls.ca, where they recently upgraded the searching of properties.
You get a very sharp, clear idea of what housing looks like and what it goes for in any particular city. Its for very certain that urban properties in major centres will retain more value than depressed regions, even though those major urban centres have suffered tremendous economic pullbacks.
Full Report: 2010 AND FINALLY THE CRISES REACHED DUTCH MAIN STREET by Youri Carma http://tinyurl.com/ychwlmh
The fact that Chriss Dodd is going to STEP DOWN…
shows that any politician with their fingerprints found on that stupid TARP bill and bail outs for Goldman Sucks and JP Morgan will be KICKED-OUT-OF-OFFICE!!!!!!
WARN CONGRESS TO STOP ALL BAIL OUTS IMMEDIATELY!!!
My favorite Canadian: Mike From Canmore [RIP]
Comments on the then recent stock market merger of Time Waner & ALO (A-hole).
http://www.youtube.com/watch?v=F1GUoQpkr0s
Don’t Bank on the Banks
http://www.sprott.com/Docs/MarketsataGlance/11_09%20Dont%20Bank%20on%20the%20Banks.pdf
- skip to page 4 to find out what really happened to Canada’s bank…they’re actually in much worse shape than I thought
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
Few Canadians realize is that the housing market has avoided collapse (prices are down 32 per cent in the U.S.) because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world. What’s almost as alarming as this reckless policy is that no one in the financial media is talking about it, even though everyone knows the facts.
I was alerted to the scandal by David Lepoidevin, a financial advisor with National Bank Financial, in a warning letter to his clients.
The facts are that over 90 per cent of existing mortgages in Canada are “securitized.” That is the practice of pooling mortgages (or other assets) and then issuing new securities backed by the pool — MBSs, or Mortgage Backed Securities. That’s what happened with the sub-prime mortgages in the U.S. which (because the whole pool was so diversified) received triple-A ratings by the rating agencies. Losses around the world amounted to hundred of billions of dollars
This is the ticking time bomb Prime Minister Stephen Harper has tossed at the Canadian taxpayer. Why? So that he can maintain the fiction that he is a good economic manager and win a majority in the next election.
The problem is no opposition political party wants to expose the looming disaster and risk being responsible for a dramatic fall in house prices. As Liberal finance critic John McCallum told The Globe and Mail: “I don’t think we want the government to be rationing Canadian home-buying.”
The price of political cowardice will be very high. And in the end the housing bubble will burst anyway, putting taxpayers on the hook for tens of billions of dollars in defaulted mortgages.
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
Listen people… few Canadians realize is that the housing market has avoided collapse (prices are down 32 per cent in the U.S.) because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world. What’s almost as alarming as this reckless policy is that no one in the financial media is talking about it, even though everyone knows the facts.
I was alerted to the scandal by David Lepoidevin, a financial advisor with National Bank Financial, in a warning letter to his clients.
The facts are that over 90 per cent of existing mortgages in Canada are “securitized.” That is the practice of pooling mortgages (or other assets) and then issuing new securities backed by the pool — MBSs, or Mortgage Backed Securities. That’s what happened with the sub-prime mortgages in the U.S. which (because the whole pool was so diversified) received triple-A ratings by the rating agencies. Losses around the world amounted to hundred of billions of dollars
This is the ticking time bomb Prime Minister Stephen Harper has tossed at the Canadian taxpayer. Why? So that he can maintain the fiction that he is a good economic manager and win a majority in the next election.
The problem is no opposition political party wants to expose the looming disaster and risk being responsible for a dramatic fall in house prices. As Liberal finance critic John McCallum told The Globe and Mail: “I don’t think we want the government to be rationing Canadian home-buying.”
The price of political cowardice will be very high. And in the end the housing bubble will burst anyway, putting taxpayers on the hook for tens of billions of dollars in defaulted mortgages.
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
@DN: That is not a “bailout”. The government is buying INSURED mortgages. If those mortgages had gone into default the banks had nothing to worry either way… they were either getting paid by the people who held them or they were getting paid by the insurance payout from CMHC.
All the government is doing by purchasing them now is freeing up capital in the banks so they can increase lending as a general economic stimulus measure. There is a large difference between stimulus measures and bailouts.
The Vancouver Real estate market screams foreign investors. I have lived in Vancouver my whole life. I have discussed real estate with analysts in Vancouver which have expressed a large presence of foreign investors. Since i am a plumber in new construction, i have also built houses for countless foreign investors. The real estate market seems to keep climbing, but nothing has happened to the wage. Buying a home in Vancouver is next to impossible unless you have an enormous income, you live rent free for a long period of time, or you have family money. Hopefully the bubble will bust so i can buy a home sometime in my life.