US economic gloom round-up

This is an easy one, I’ll just link to the top 4 headline stories on MSNBC:

Record drop in house price index

U.S. home prices dropped 8.9 percent in the final quarter of 2007 compared with a year ago, Standard & Poor’s said Tuesday, the steepest decline in the 20-year history of its housing index.

Foreclosures up 57 percent in 2007

The worsening situation came despite ongoing efforts by lenders to help borrowers manage their payments by modifying loan terms, working out long-term repayment plans and other actions

Wholesale inflation rate jumps up in January

The January inflation surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years.

Consumer Confidence weakens significantly

The index measures how consumers feel about the economy. It has been weakening since July, suggesting that wary consumers may retrench financially, which could fatigue the economy further.

Does any of this matter to us in Canada? The IMF seems to think so.

More vital than Canada’s massive trade ties, financial markets have become the primary conduit for the faltering U.S. economy to infect its northern neighbour. And that’s why Canada can’t easily escape the economic headwinds now buffeting the United States, the report concluded.

Canada-U.S. trade represents 49 per cent of GDP, up from 37 per cent in 1988. But the value of cross-border financial holdings, meanwhile has shot up to 90 per cent of GDP from 53 per cent before the trade pact.

Meanwhile Bank of Canada Senior Deputy Governor Paul Jenkins has come out as skeptical about ‘decoupling’ – the theory that our economy can detach itself from the US economy, our largest trading partner.

“Decoupling doesn’t really do it for me,” Jenkins told the House of Commons’ Industry Committee today in Ottawa while taking questions about the strength of the Canadian dollar. The word “suggests that there’s only one force out there or two and we really need to look at all of those,” he said.

If all this gloom and doom has you feeling down just remember: its always darkest before the dawn, every cloud has a silver lining and you can re-arrange the letters in ‘Stagflation’ to spell ‘A Tango Lifts’!

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ex-vancouverite
ex-vancouverite
12 years ago

from the Sun article…

but look at your Vancouver friends and relatives over the last 40 years – 20 years – 10 years – even two years. We could not have had a more volatile market and yet had you bought, at any time, you would have outperformed all others.

Well, that does it. Sign me up right now. Imagine that; it wouldn't matter if you bought 40 years ago or two years ago – it's all the same. Money in the bag.

I'm so totally sold on that idea.

scullboy
12 years ago

HAHAHAHAHAHA!

"Restricted", eh?

Here's the footer at the bottom of the article:

Ozzie Jurock is a Canadian real estate adviser and author of Forget About Location, Location, Location. He is featured in Donald Trump's latest book, Trump: The Best Real Estate Advice I Ever Received. Your can reach him by email at oz@jurock.com or at http://www.reag.ca.

BWAHAHAHAHAHAHAHA! Good call Jade!

jadeeast
jadeeast
12 years ago

Blueskies.

Looks like it was written by Ozzie Jurock.

"It is the ONLY true wealth creator over time. "

blueskies
blueskies
12 years ago

pw:

loved that Sun article!

they couldn't even print the name of the shill that wrote it.

me thinks the end times are nigh……

-A-
-A-
12 years ago

This is the latest according to a realtor's blog who has blocked access to some readers:

"There were 271 new listings today and 188 sales for a sell/list of 69.37%. Inventory reached 10,808, of which 2,633, or 24.36% were over 90s.

Over the last three days there have been 760 new listings and 428 sales, for a sell/list of 56.32%"

Patiently Waiting
Patiently Waiting
12 years ago

"Don't listen to the gloomers"

http://tinyurl.com/26l7ob

Patiently Waiting
Patiently Waiting
12 years ago

"They might have also assigned the units… wow… big losses."

So I guess the assignees will be paying the "lift" twice. Am I understanding this correctly? This could mean many hundreds of thousands of dollars in losses for some people. Possibly bankruptcies over this. Maybe even lengthy legal battles.

Is this just the beginning of a wave of condo projects going into receivership?

This is getting exciting. (munch munch) I wonder what's next…

bcubbins
bcubbins
12 years ago

Dingus, I didn't say their prediction was wackadoo or anything like it. I said the operators of Housing Predictor have no credibility. Anybody can create a website and throw up some numbers, but it doesn't mean they're worth quoting.

Unlike the OFHEO or Case-Shiller (or for that matter CMHC and the real estate boards), we don't know anything about Housing Predictor. We don't know who they are, we don't know their credentials, we don't know their track record, we don't know their methodology, and we don't know their motivations.

Jeff
Jeff
12 years ago

They might have also assigned the units… wow… big losses.

BBY
BBY
12 years ago

2 more Vancouver condo projects in receivership — CBC News

http://www.cbc.ca/canada/british-columbia/story/2

If these insiders were speculators, this is really, really funny…

"The receiver has discovered that 23 condos in the Chandler Development Group projects were allegedly sold to insiders at prices well below market value, Bowra said.

They may get to keep their condos, but will likely have to pay today's prices, he said."

dingus
dingus
12 years ago

"The OFHEO national house price index recorded a 1.3% decline in the price of a typical U.S. home during the fourth quarter of 2007, while the S&P/Case-Shiller home price index registered a 5.7% decline during the last three months of 2007… For the year as a whole, Case-Shiller calculates that home prices fell 9.8% nationally"

OFHEO is based on mortgages handled by Fannie Mae and Freddie Mac, while Case-Shiller uses publicly recorded data on all home sales in selected communities.

http://www.econbrowser.com/archives/2008/02/house

Dunno, bcubbins, 9.8% last year. Is 8% so wackadoo for 2009?

Keep repeating it until it sinks in though. House prices in the US declined nearly 10% nationally last year. And the bottom is nowhere near.

Nothing to do with us, though. Nothing to see here. Move along.

krrish1
12 years ago

BDK Laguna Parkside-1925 Alberni is on sale buy developers realtor- on current market prices,if the go down further than that still their is big chunk of profit than the presale but they can not reduce the price,just to remind you few unit in any projects are hard to sell because of floor#,sq.ft.direction,views etc. I like your comment tough atleast put my head back to where it belongs. SONIKA, You don't know the economy of the world right?Do you know who is depend on whom? anyway this world is affordable because of China and India. we get cheap stuff because of labour cost in their countries are cheap,lots of people in the world can fill their tummy on low cost and decorate their homes with needy items. Special:China and India can produce 95% of their necessities they are depend on the… Read more »

-A-
-A-
12 years ago

"My guess is that their hoped-for business model is to issue sensational press releases thereby attracting traffic to their website, and then rake in ad revenue."

bcubbins: c'mon, you don't expect the same level of unbiased science based facts and figures you would get from the real estate board and CMHC?

bcubbins
bcubbins
12 years ago

Housing Predictor has no real credibility. On their About page, they claim to have a "staff of journalists, researchers, analysts and economists" but they don't name any of them. They issue lots of press releases but don't offer any data to support their conclusions. They have no record of accurate predictions either, having only been up for just over a year. It also seems very odd for an economics research and forecasting organization to solicit advertising on their website.

My guess is that their hoped-for business model is to issue sensational press releases thereby attracting traffic to their website, and then rake in ad revenue.

blueskies
blueskies
12 years ago

from the good ol' US of A:

http://tinyurl.com/36vzmn

Scrambling to find a bottom, the U.S. real estate market is falling further and further in most areas of the country. Home prices nationally will deflate an average of more than 8% in 2008, according to the new Housing Predictor forecast.

Anonymous
Anonymous
12 years ago

you can re-arrange the letters in ‘Stagflation’ to spell ‘A Tango Lifts’!

Unfortunately 'stagflation' also rearranges into 'got anal fits'! :mrgreen:

Lager not Logger
Lager not Logger
12 years ago

“The last two U.S. recessions in 1990-91 and 2001 lasted eight months each. The current recession will last much longer and will be more severe… The main good news in this respect is that, after being behind the curve in its assessment of the economic and financial risks, the Fed now gets it and is worried about a serious systemic financial crisis.” But the Fed will be hamstrung, he said: “At some point the Fed needs to worry that an aggressive fed funds easing will lead to a disorderly fall of the U.S. dollar, to foreign private investors pulling the plug on the financing of still large U.S. external deficits and to higher imported inflation. Second, monetary policy is relatively ineffective in stimulating the economy as: there is a glut of housing, consumer durables, automobiles and it will take years… Read more »

dingus
dingus
12 years ago

Gloom? You want gloom? I got your gloom right here pal…

Check out Nouriel Roubini's testimony to Congress yesterday:

http://www.house.gov/apps/list/hearing/financials

Chilli Con Carne
Chilli Con Carne
12 years ago

If anyone has insomnia, a good cure is Chipman's blog.

Pathetic and desperate( aside from boring).

And he wanted to charge?

bdk
bdk
12 years ago

Laguna Parkside (1925 Alberni) has reduced the asking prices by about 10% and there is an extra $5,000 commission in it for realtor who brings in a sale, they have been sitting on the market for 364 days and no takers. There are also vacant units for rent in there for $3k-4k that no world class renters want to pay for either. Now why would all these wisemans choose not to "buy our own place what we need is a monthly payment and some money for food and entertainment" Does this mean no one wants to spend over $6,000 a month to own a 1050 sq ft unit on a busy street in the west end? Where are these manual labourers who're making $240,000 like Krissh and Tom Vu who want to be world class and " Desire:when we know… Read more »

scullboy
12 years ago

Hey Steve, consider: 1) the US is the world's foremost consumer of everything. 2) They are losing their appetite for "stuff" (local housing, cars etc) 3) We are their biggest trading partners, NOT China. WE sell them BC lumber for their homes, and cars made in Ontario 4) Even the cheap crap they buy from China and India may be made in part or whole from our "commodities" 5) The world holds a huge number of US denominated debt and assets. As the USD falls those assets drop in value, reducing those countries' total ability to purchase our "stuff" So no I would guess we're not in great shape. And KRRRRISH, the things that is better then owing "stuff" right now is having money in the bank. When the recession hits and you lose your job (and with people buying… Read more »

steve
steve
12 years ago

Isn't it possible that Canada as a whole will just be a much better investment than the US going forward? I know that our manufacturing work depends a lot of the US market, but as long as commodities stay strong aren't we in pretty good shape?

moldcity
moldcity
12 years ago

Thank goodness! 🙂 Some people do think that way which is why I didn't get the joke right away. Haven't had my morning coffee yet either.

It's such a remarkable ignorance to think that somehow we'll seperate from the influence of our biggest trade partner at just the right time. The government acknowledged that with yesterdays budget which expects more slowing and even then some have complained that it doesnt do enough.

http://www.theglobeandmail.com/servlet/story/RTGA

Londonernow
Londonernow
12 years ago

Of course its a joke Moldy, but I'm not sure people in Vancouver don't really think that way.

moldcity
moldcity
12 years ago

Thats a joke right londonernow? You investing with the 100 year timeline without regard to entry point? If so I have a car that will be worth a LOT in 100 years and I'm willing to give you a really good deal on it.