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July 30th, 2007 at 10:33 am
Every system makes money in a bull market. The real test is when things get choppy or head downhill.
July 30th, 2007 at 10:05 am
freako said: “Surely there is a fallacy or two that describes this tactic.”
Begging the question
July 30th, 2007 at 8:45 am
Weather is also a good analogy.
Using models that take a micro approach is a bit like predicting the weather. Very accurate in the short term. Less so in the medium. Totally useless in the long run.
July 30th, 2007 at 7:23 am
In that sense, the more he drinks, the closer he is to stopping (my view), but also, the more likely he is to have another one (Cam’s view).
Or like the German Army in WWII. The more territory they have conquered, the more likely they are to conquer even more.
Until Stalingrad.
July 30th, 2007 at 6:47 am
freako/all: This discussion re Cam reminds me of my recent thread at RET (why? why?) called “Guessing Right For The Wrong Reasons” (see below).
I’m with freako and similar analysts all the way on this one.
One of these days, Mr. Market is going to exact a penalty for the guessers who’ve guessed right for the wrong reason.
—
This piece by Bill Fleckenstein about DOW 14000 might as well apply to Vancouver RE.
> LINK
excerpts:
I say that because if somebody continually gets the analysis part wrong, even if he gets the guess part right — i.e., temporarily makes money buying stocks because he says that subprime either doesn’t matter or is contained — that incorrect analysis ultimately will see him get carried out.
In the long term, correct analysis is more important than your guess about how people will react to it.
Today’s bulls have all been right about their belief that stocks should go up every day, but many have been wrong in their analyses. One of these days, Mr. Market is going to exact a penalty for the guessers who’ve guessed right for the wrong reason. I believe that day is coming sooner rather than later and will cause far more damage than anyone expects.
July 29th, 2007 at 11:45 pm
“If the guy has not called a previous downturn, what credibility does he have predicting there will not be one going forward? “
No credibility with me. He has never called a downturn.
Wwhat he has done is what all those before him have done at CMHC- forecasting by template.
When the economy is on steroids, the forecast will be high single digit price appreciation, when the economy is contracting the forecast will be just above inflation.
The analysts get their careers started at CMHC, and if they behave, and catch on with how to manipulate the media,then they graduate to private enterprise, and that’s when they get the big bucks.
I believe in his own heart, Cam is just as baffled as we are that the correction is not yet in full swing.
He knows it’s coming, but he is paid to say it is not coming, and when the bubble finally blows up, he will explain, how nobody could have predicted it.
July 29th, 2007 at 10:28 pm
freako, the only reason why Cam was right and you were wrong is that someone had to be right, and it wasn’t you.
His turn for being wrong will come at some point, at which point our 20/20 hindsight will spell out why.
In the meantime, keep on keepin’ on TEPUE.X et al.
July 29th, 2007 at 9:47 pm
The last sentence should say “as sellers refuse to actualize paper losses.”
July 29th, 2007 at 9:46 pm
“When prices start falling it is apparently difficult to get volume up again.”
Yes, supply and demand does not operate like most goods and commodities. Normally, high demand and low supply is associated with rising prices and vice versa.
For housing, prices are an input as much as an output, and interact with supply and demand.
If the market cools, and prices don’t fall, the market won’t clear and sales will drop off a cliff.
If the market cools, and prices fall, counterintuitively, demand will drop off a cliff. Not only that, but supply will dry up as well as sellers actualize paper losses.
July 29th, 2007 at 9:30 pm
OK, so did he predict the 1981-1984 crash (maybe too young for this one) or the 1995-2000 bear market?
Don’t know doubt it. I was referring to the current run up. he felt that prices would continue to appreciate in 2006. I said “no way, no how”. He was right. He said that prices would appreciate in 2007. I said “no way, no how”. He was right.
Why was he right, and I wrong? Because he based his opinions on relevant microdata that accurately foresaw the depth and breadth of demand. I used the insane valuations to deduce that the end must be near.
Here is an analogy that I have used before:
It is 9PM and the party is just getting started. One particular reveler has wasted no time and is already half sloshed. A few others are taking bets on how many more he will drink over the night.
Note that volatility is high: Compared to a social drinker, there is a high chance that he will drink many more. But there is also a high chance that he will be lying in a pool of vomit by 10PM.
In that sense, the more he drinks, the closer he is to stopping (my view), but also, the more likely he is to have another one (Cam’s view). Paradoxically, these are not mutually exclusive views.
July 29th, 2007 at 9:28 pm
“With a correction they would have a broader market and be able to do more volume.”
As a premonition of what may come to pass in Vancouver, take a look at some of the US markets like San Diego and Phoenix: prices are down and so is sales volume. When prices start falling it is apparently difficult to get volume up again. A speculative run, where prices and volumes move in tandem both up and down.
July 29th, 2007 at 8:54 pm
The thing is that Cam has been very very right over the years
OK, so did he predict the 1981-1984 crash (maybe too young for this one) or the 1995-2000 bear market? I’ll give him a pass on the 1990 correction.
If the guy has not called a previous downturn, what credibility does he have predicting there will not be one going forward?
July 29th, 2007 at 8:31 pm
What is interesting Tulip Mania is your comment about realtor pimps “Not a spectacular crash, just yet, but cetainnly casts some doubt on the “running out of land” bs, the real estate pimps were pushing “
You actually think that realtors want to keep pushing prices? It is harder for them to find the purchase at this price. They would have to find people solely based on lifestyle and disposable income.
With a correction they would have a broader market and be able to do more volume.
You should realize that there is use to a realtor and if you know a good one it truly does help. Most of the people who have been burned by realtor will no longer be able to find them considering they will not last. A good realtor is like a good lawyer, accountant, financial advisor. You just have to find the right one.
Just because you can’t don’t give them a bad name. It is like saying all caucasians are KKK, all indo-canadians are gang members, all hispanics are illegal, and blah blah blah.
July 29th, 2007 at 7:59 pm
I thought all the drug addicts were being sent to Victoria?
July 29th, 2007 at 2:29 pm
re the Georgia Strait article.
That was a hatchet job, but not by Muir, but rather the reporter, Charlie Smith.
He/she writes: The now-defunct Vancouver Housing Market Blog, operated by a man who identified himself as Vance, was spreading a doomsday message that the region was on the verge of a housing crash.
Those are strong words for a non-editorial.
Cam is a bit of an enigma. Now that he deserves more leeway now that he works for the realtors, where it is clearly understood that spin is part of the job. Compared to say Lereah, he is very low key, avoiding use of slanted metaphors and the like.
He did respond to VHB personally, and at the time he did imply that the models they use are more sophisticated than us bears seem to think. The thing is that Cam has been very very right over the years. I think it breaks down into how one views the picture, big or small.
I look at it from a big picture point of view. The fundamentals are out of line, so real prices will fall. I don’t have the means or interest to forecast when and how that will occur.
Cam on the other hand seems to take a micro approach. He and his models accurately predicted the continued demand and appreciation. Whereas bears such as myself simply concluded that the situation was unsustainable, end of story.
Hence Cam is no fool, and I think the beef I and others had was that he doesn’t tell us how the story will end (I think he knows it). It is great that he accurately understood the scope of demand. But he does not mention that two big components of that demand are speculators and ownership borrowed from the future. Clearly there will be a future drop in demand, creating huge downward price pressure. He has never acknowledged such an eventuality.
He is absolutely right about the rising rates boosting short term demand. I think the high sales as of late is evidence of that. But again fails to mention that once the pre-approvals expire there are fewer buyers left, all whom will face higher borrowing costs.
The article ends with the following piece of sh*t quote:
“And if there is no Vancouver real-estate bubble, it means that the folks at the GVRD can’t expect any market correction to solve the region’s very real housing woes.”
Way to insinuate fact out of possibility. Surely there is a fallacy or two that describes this tactic.
July 29th, 2007 at 11:44 am
Some early signs from the UK
” Mannall agrees. “Houses that a couple of months ago were valued at £925,000 are £895,000 today, and a £550,000 house is now £500,000.†It is this mid-mainstream market that is particularly affected – this is a slowdown we are experiencing, not a crash”
Not a spectacular crash, just yet, but cetainnly casts some doubt on the “running out of land” bs, the real estate pimps were pushing
July 29th, 2007 at 9:33 am
Thanks for the comments and discussion everyone – I see that Countrywide Financial is now saying that home price depreciation in the US is now at a level “not seen since the Great Depression“
As they point out on that link, the one big WTF line from that conference call was “no one saw the deterioration of real estate values coming”
July 28th, 2007 at 9:12 pm
Ulsterman: “Half the people in this city are a paycheck or two away from homelessness or serious debt.”
The days of wine and roses…and easy money are over, at least for the next 3 or 4 months. Often easy money in reality is just an attractive loan that comes with an undisclosed exorbitant interest rate when the markets fall.
Ulsterman: “… cannot imagine attempting to make a success in this world when saddled with mental illness and addiction.”
Snowball’s chance in hell to stay afloat when you’re battling your own demons and struggling to survive in the real world.
July 28th, 2007 at 6:53 pm
“Whistler is a hype right now, with the Olympics in 2010. We bought into that hype,†Cheng said.
“I made a mistake. I trusted the wrong people.”
You made a mistake, all right, but it really wasn’t trusting the wrong people. It was being greedy. People who expect something for nothing often wind up getting nothing for something.
July 28th, 2007 at 3:39 pm
life can be tough enough when blessed with a good brain, work ethic, family support structure and education. Can you imagine being turfed out of Riverview and told to pull yourself up by the bootstraps and sort your life out. Half the people in this city are a paycheck or two away from homelessness or serious debt.
I’m quite conservative in many ways but just cannot imagine attempting to make a success in this world when saddled with mental illness and addcition.
July 28th, 2007 at 3:25 pm
This proposal came fast and furious … they will play hardball to get it approved so that construction can well be on its way to completion before the Olympics.
July 28th, 2007 at 3:00 pm
For all the government’s proclamation that they would not shove this proposal down the residents of Coquitlam, they most certainly will play linkage in areas such as transportation (rapid transit) and other programs.
At the end of the day, you may as well be shoving it down the resident’s throat.
July 28th, 2007 at 2:57 pm
Institutionalizing and working with the mentally ill in a controlled setting is rather different compared to letting them roam the streets hoping that they somehow would magically integrate into the community.
That’s exactly the prescription with the current government’s proposal. It is based on studies that said that the poor can better their lot if they live among the middle and upper class community. The problem is that this is based on people that are economically disadvantaged, not those that are mentally ill.
The current proposal is meant to shift the problem away from the limelight in preparation for the Olympics without dealing with the problem of inadequate supporting programs and structures. Wouldn’t you then think that re-institutionalization would be a better solution given the proposal? Unless of course the government is ready to put in the proper funding to set up the support structures.
If you feel that the mentally ill has “successfully integrated” into the community based on the existing structures, why don’t you move your family into the DTES and tell me how safe you feel?
Generalization or not, it is based on the existing experience. Explain to me why I’m wrong!
July 28th, 2007 at 10:41 am
Read this and think about where we are now: http://en.wikipedia.org/wiki/Great_Depression
In the spring of 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas where commodity prices plunged, and in mining and logging areas where unemployment was high and there were few other jobs. The decline in the American economy was the motor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. By late in 1930, a steady decline set in which reached bottom by March 1933.
July 28th, 2007 at 10:34 am
Credit crunch ignores borders
July 28th, 2007 at 10:30 am
Anyone one read the article in the Georgia Straight on June 14th about house prices being much more unaffordable in 1981. Cameron Muir gives the bears and VHB a good slating. Article concludes that there is no bubble and those waiting for it to burst are dreamers:
http://www.straight.com/articl.....ere-higher
July 28th, 2007 at 7:51 am
Re ‘bigger stuff’:
Agreed, we may be seeing the beginning of the coming ‘Big Contraction’.
Stockmarkets around the world may have just topped,
many commodities are pulling back,
USDollar has begun its bounce (believe it or not, this represents a flight to safety, record low bulls at the recent bottom BTW),
Credit contracting,
Private equity deals stalling,
Blackstone (recent hedge ipo) crashing,
Etc.
The REALLY IMPORTANT contraction may be the coming contraction in COMPLACENCY. There was absolutely no fear in any of the markets, which is a setup for a giant pullback, perhaps even a crash.
Note how expectations of steady gains appeared to be priced into the markets, yet a very small percentage pullback is treated like a big surprise.
I note that the net is now awash in “Don’t worry, buy†recommendations re stocks. That means complacency STILL reins, so I’d expect this drop to continue.
It’ll be very interesting to watch next week, to see if there is follow through on this blip.
As I commented elsewhere, perhaps Vancouver RE will be the last sector in the entire Universe to contract.
–
Samples of some current complacency quotes (taken from Fallstreet.com site):
Fears are set aside as managers agree ‘bull run still has legs’ (Times).
Neil Woodford: “I don’t see this as the start of the bear market.â€
Doug Sandler, Wachovia Securities: “I think all you really need is some green on the screen and people will want to jump in.
Ned Riley: “I think we’re going to start to see the market coming back next week. Once we get over the shock of the subprime issue, which is not as big an issue as the market is making it, people will realize there is value out there.â€
Frederic Dickson, D.A. Davidson: “I don’t see this as a start of a 20% bear marketâ€
Timothy Feldheim: “This is absolutely the worst possible time you could get out of the marketâ€
Robert Walberg: “Don’t panic: Markets will likely recoverâ€.
–
Translation:
Panic. We are about to see a bear leg of at least 20% down.
July 28th, 2007 at 7:49 am
“She said many of those who invested money or provided “loans†were members of B.C.’s Chinese community, where news about investment opportunities often spreads by word of mouth.”
Cheng, here is one you can spread by word of mouth:
Buy real estate in Vancouver, it can only go up, it’s a sure thing,because there is no more land left, and they don’t make anymore land.
July 28th, 2007 at 2:58 am
Cheng, we ALL are greedy and we ALL make mistakes in investment. Take heart, you’ll get it right one day.
July 27th, 2007 at 10:07 pm
Deb,
The whole big international economic mess. I fear how things will turn out in the US.
Read this and think about where we are now: http://en.wikipedia.org/wiki/Great_Depression
July 27th, 2007 at 9:09 pm
patiently waiting. Can you explain what you mean?
July 27th, 2007 at 9:01 pm
I’m barely paying attention to the Vancouver housing market. I’ve stopped looking at the MLS, Craigslist and the stats sites. There is much bigger stuff unfolding right now. The last thing I should be concerned with right is when I can buy a condo.
July 27th, 2007 at 8:49 pm
I gotta tell you Cheng, I am so glad you got f—ked. And I truly hope there will be thousands more who will end up like you.
Yes, I plead guilty of moral condemnation of these greedy low lives.
July 27th, 2007 at 8:27 pm
I am curious to hear how someone looks at this crazy market and thinks
that there is room for much more growth. I used to hear many people say including many a realtor ” Look at California that is where things could get to…” Funny you don’t hear that anymore… I have one comment to make about that analogy. This isn’t or never will be California, They have many more hours of Sun and will always be a desireable place to be. We have the cold and damp and many days without the sun…. Even when the economy sucks they still can sit in the sun in November… Us not so much….. We are going to hit hard.
July 27th, 2007 at 8:19 pm
Is anyone in their right mind investing in investment property? I am asking as a friend has just purchased another property as just that, after not being able to get enough for their current property.(which is in a difficult sell area) I am worried for him, As I am very bearish in this crazy market…
July 27th, 2007 at 8:13 pm
Let’s face it the problem with the drug addicted will(if the current gov’t can muster it) be on the outer limits of the lower mainland once the
land issues have been utilized and developed. There is no where else it can go. They have been squeezed out of yaletown and soon to be Gastown and later DTES.
July 27th, 2007 at 7:24 pm
My understanding is that Riverview is still used as a mental health facility, just with less occupied buildings than the “old days”. There is apparently no opposition among Coquitlamites (is that the term?) to the continued use of Riverview for treatment of mental illnesses.
July 27th, 2007 at 7:14 pm
mk-kids, I couldn’t have said it better myself.
July 27th, 2007 at 7:11 pm
Um, you do know what Riverview is right? A “mental hospital” or it used to be until the provincial government decided it didn’t want to foot the bill anymore and jumped on the “community integration” bandwagon in the late 80′s. The Government cleaned out a lot of mental hospitals & other similiar facilities in those days preferring that people who had mental health issues be taken care of in less-institutional “community” settings. Unforunately they didn’t put much money into creating or funding the community support programs needed & many mentaly ill found their way into the DTES. Almost all of folks living in the DTES are “dual diagnosis” meaning they have mental health AND addiction issues. There are people who believe that many of those with mental health probs “self-medicate” with street drugs because they lack the ability to access proper medical care & don’t have family or community support. The folks in the DTES come from all communities – Van, Coq, Surrey, etc… clearly what we are or aren’t doing in Van isn’t working so why not try something else?
July 27th, 2007 at 6:45 pm
“I hardly think that the mentally ill could well integrate into the community and that the community would feel safe.”
That’s quite the generalization.
July 27th, 2007 at 4:26 pm
I really think it is unfair for anyone city in the GVRD to have to shoulder the responsibility of all the addicts. Weather it is Vancouver or Coquitlam. It makes a lot more sense to spread the addicts out. It may be more costly to fund treatment centers all over the GVRD, but in the long run I think the goal is to break the intense concentration of addicts to one area.
With no magnetic dtes area, the draw from other parts of the country would dry up. Non-locals wouldn’t know the area well enough to land in Richmond, West Van, Tsawassen, Ladner, or Langley and quickly find drugs and dealers.
I also wish they would spread social housing out – like one apartment/ suite per block, rather than 200 welfare recipients in one sleazy hotel/rooming house.
July 27th, 2007 at 4:26 pm
Drachen, I’m not sure whether dealing with the DTES problem is causing people to be “up in arms”. Exporting the problems to another municipality is not what I would call “dealing with the problem”.
When the downtown eastside residents move into coquitlam, the political heat with die down and the attention will surely wane. If dealing with the problem is best done by moving the problem, then I would highly recommend that institutionalization be re-instated and building social housing in downtown eastside.
July 27th, 2007 at 4:20 pm
Housing project out in Coquitlam…good luck in trying to get it approved. You’ve got plenty of affluent people out there that don’t want the “downtown eastside” in downtown Coquitlam.
The Riverview site is situated right at the Lougheed entrance to new Coquitlam and downtown Port Coquitlam. I hardly would think that the residents of both PoCo and Coquitlam would want Vancouver’s problem.
Many if not most of the individuals that drifts to the “Vancouver Eastside” refuses and/or are not able to be rehabilitated due to their mental illness. They drift because of Campbell’s failed experiment in deinstitutionalization. So, with that realization, Campbell’s going to carry on with deinstitutionalization and provide Coquitlam as the destination point for the mentally ill to drift to.
I hardly think that the mentally ill could well integrate into the community and that the community would feel safe.
Good luck!
July 27th, 2007 at 3:26 pm
Uhh wait a minute. People get up in arms because of DTES gentrification, ‘Oh where will all the poor people live!’.
Now YOU’RE up in arms because Campbell and Co are making sure there IS an alternative?
I don’t get it. The main downside to living in PoCo is the commute, in this case it’s no problem because they don’t generally work. So why shouldn’t a housing project be created out there?
Are you suggesting that the problem should just be ignored as usual? I don’t see what alternative you’re proposing.
July 27th, 2007 at 1:42 pm
Exporting Vancouver’s Problem:
“It is a social-welfare ghetto not just situated there to be in proximity to its clientele, but one that acts as a magnet to that clientele, too. It generates its own critical mass.”
So Campbell & Co. are going to export our ‘problem residents’ just in time for the Olympics.
Welcome to the gulag…
At least the people buying into Woodwards will be happy. And the developers too.
July 27th, 2007 at 1:11 pm
What gets me about that story is who the hell would lend 70k in LOCs to a part time worker who earns less than 1k a month?
July 27th, 2007 at 10:55 am
From the “good investment” article:
Cheng … [said] it sounded like a good investment at the time.
“Whistler is a hype right now, with the Olympics in 2010. We bought into that hype,†Cheng said.
…
She said she invested some $70,000, using three separate lines of credit from banks.
…
Cheng, who works part time, said the payments, totaling approximately $1,000 a month, exceeded her total income.
..
“I made a mistake. I trusted the wrong people. It was really horrible. They told me they’d pay me back, but they never did,â€
No Ms. Cheng, your mistake was “buying the hype” and lending money that wasn’t yours.
Your ignorant greed will probably not earn you much sympathy.
July 27th, 2007 at 9:06 am
How many people in Florida would have believed 2 years ago that their condo market would be in the shape that its in today? I wonder when we’ll see our own ‘condovultures’
It may be worth looking at units in Miami in a year or two..
July 27th, 2007 at 7:30 am
Glad you got your money back PW – probably wise to just get it back as quick as you can, filing for arbitration is just a drag and would have taken a lot more of your time.
Good to hear that your still going to send in the code violations and tell the ccra, you’re helping to make this a safer city to live in.
nice that it (eventually) worked out for you.
July 27th, 2007 at 1:41 am
After a very frank conversation with my ex-landlord, I now have my deposit back. I basically told him that he had two days to get the deposit to me or it will double once I file for it. Apparently, he wasn’t aware of this new rule (or didn’t know that I knew). It is a very brilliant move by the Rental Tenancy Board.
A friend said I should have filed without letting the ex-landlord know of it and grabbed an easy $450. But I think it is to try to come to an understanding without having to use the RTB resources, and I can actually use time more productively for myself.
I am still going to bust him on fire safety/building code violations, and may call the CCRA.