Friday Free-for-all
Early Edition! Its Friday and that means its time for our weekend super-post round up. Here’s a few stories I’ve noticed this week:
-CBC Video: Abbotsford condo tower Brio put on hold
-BC Real Estate Association says rate cut good for buyers
-Cut in bank rates has no effect on fixed rate mortgages
-Average house price approaching $1 Million
-Use the right words to get it sold
-One months rent: $100,000 please.
-Shelter costs in Vancouver eat up income
-Gordon Campbell: Smaller lots cut housing costs
-Vancouver can’t afford affordable housing
-Enjoy the good times while they’re here
-US mortgage delinquencies and foreclosures hit new high
-Not licensed to print money
What are you seeing out there? Post your news, links and anecdotes here!
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March 6th, 2008 at 7:43 pm
March 6th, 2008 at 7:43 pm
You no doubt read the advertorial on the front page of the Province exclaiming…“Housing Prices Go Through the Roof” and are wondering how much it costs to buy a front page ad such as that. Ozzie? Bob Rennie? Anyone venture to guess how much it continues to cost to brainwash the stupidist people on the planet?
Oh by the way
GOLD IS GOING TO $1,650 SO GET SOME TODAY
March 6th, 2008 at 7:46 pm
well if it wasn’t for bad luck you wouldn’t have any country music ….
March 6th, 2008 at 7:51 pm
you don’t have to brainwash stupid people…. they’ll handle the required rationalization all by themselves….
now to get people to buy gold ..
different story…. there you do need brainwashing…..
March 6th, 2008 at 8:08 pm
Did you see this?
Financial System Broken - Bloomberg - Markets ‘Utterly Unhinged’
Bloomberg is reporting Mortgage Markets ‘Utterly Unhinged’
March 6th, 2008 at 8:14 pm
read the Bloomberg article, didn’t see anything about buying gold…..
your 100% “correctness” is entirely subjective!
March 6th, 2008 at 8:20 pm
March 6th, 2008 at 8:22 pm
March 6th, 2008 at 8:26 pm
As they say, the proof is in the pudden and I’m extremely glad I never bought real estate in the last 2 years as I’m way ahead of those who did. Look at the charts. here’s my plan. I will cash in at gold around 2,500.00 and silver at 75.00 and then buy a nice west side home that now sells for 1.3 million at 50% off. Watch and learn. All this before 2011
March 6th, 2008 at 8:28 pm
housing prices, drugs, rain in the park….:
http://tinyurl.com/238lot
March 6th, 2008 at 8:29 pm
“In today’s essay we are going to scare you like you’ve never been frightened before. If this spoils your day do not read this report.”
March 6th, 2008 at 8:31 pm
March 6th, 2008 at 8:40 pm
if it sounds too good to be true…..
problem with gold is you don’t know who’s holding it…
couple of hedge funds get a margin call and have to dump their gold holdings….. guess what you are holding the sh!t end of the stick….
March 6th, 2008 at 8:56 pm
If you look at SLV, the silver ETF, many have complained that it may be paper and nothing more but this 4000 pages of bar numbers proves otherwise
3rd pdf down on left
March 6th, 2008 at 9:26 pm
That’s interesting, but the bigger story is that rates are rising. From the article…
That one-percentage-point discount on the posted rate that mortgage borrowers were automatically offered is also becoming more difficult to get.
“All the different ways that you used to be able to get a discount — those seem to be drying up, ” Somerville said. “So when I talk to people, what they’re saying is those discounts are hard to get right now.”
March 6th, 2008 at 11:11 pm
March 6th, 2008 at 11:36 pm
Regarding condos, how about a condo for 210K in Toronto? But it’s not an apartment, it’s a condo house:
30 km from Downtown Toronto
March 7th, 2008 at 7:30 am
March 7th, 2008 at 8:51 am
..and they cost a bit more
I assume that its like having a strata council for a group of houses. They can make rules about what you can put in your yard, what color your house can be and charge you maintenance fees to mow your lawn and make sure everything is suitably stepford. How convenient!
March 7th, 2008 at 9:45 am
Good point. I found the hype around that project very disturbing. Crews were supposed to work 6 days of 12 hours to complete ‘the tallest residential complex between Surrey and Calgary’. What a distinction. Rack it up to another poster-child of bubble hysteria.
March 7th, 2008 at 9:47 am
Vancouver = bubble. Toronto = cheaper, possibly bubble. I don’t think much more can be said.
March 7th, 2008 at 9:55 am
WTF??? LIke I’m gonna move out there. They must be starving for idiots if they’re fishing so far away now.
They offer 3.something% financing for a year and 1br+den is in the high 200k. So cheap? Wow, I should get two.
I have three co-workers who commute from Abbottsford to the office (new west/richmond border). They get up at 5am to make it before the rush hour. 3 hours a day gone.
What a miserable life to live.
March 7th, 2008 at 11:13 am
Bears who are unthinking bears are fools.
March 7th, 2008 at 11:26 am
That’s CP’s old main line to Montreal. It’s nowhere near as busy as CN’s double tracked line, which is used by VIA and GO trains as well. Most CP freight goes north of Steeles Ave. There are a lot of very nice houses close to the CN in Scarborough, and in Mississauga too.
Really the area is just generic suburbia, quite close to the Toronto Zoo and Rouge Valley Park as you can see. But what would you get in Coquitlam for 210K?
A lot of people use the term “condo” as a synonym for a self-owned apartment when actually it has nothing to do with the type of building. It simply means the land is collectively owned. You can have condo parking lots or horse stables.
Properties in Toronto seem to have a price/rent of between 150 and 200 which is on the high side, but not what I’d call a bubble. Not to say we won’t see nominal declines, but remember a 15% decline in Toronto will take it down to the same price/rent as a 50% decline in Vancouver.
March 7th, 2008 at 11:31 am
What a miserable life to live.
It’s awesome to watch the morning TV news and helicopter/traffic reports. And you look down at the grid-lock and think to yourself … why would any sane person do that to themselves? TWICE a day!
And the answer is clear - this is The Best Place On Earth. Repeat the mantra…stay on-message … Best Place On Earth.
Why anybody would ‘choose’ bumper to bumper traffic as a way of life; as opposed to a more sane existence, is anybody’s guess.
March 7th, 2008 at 11:43 am
Obviously, not. Otherwise, there wouldn’t be a debate.
March 7th, 2008 at 11:59 am
Whatdoes that mean? People borrow less, so they buy more gold?
March 7th, 2008 at 12:46 pm
I have to admit feeling schadenfreude every morning as I hear the traffic reports on the radio during my 10-minute drive to work.
“The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.” - Henry David Thoreau
March 7th, 2008 at 12:51 pm
Why don’t you tell us about gold’s fundamentals?
March 7th, 2008 at 1:08 pm
As the Fed cuts administred rates in the USA, the US dollar falls. The US dollar is in a bear market. All things priced in US dollars rise (absent other head winds). This is why gold, oil, commodities have increased in recent years. As long as the outlook for the US dollar is bearish, Gold is bullish.
Systemic risk in the finanicial markets of the kind we are seeing is bullish for gold. In times of financial system crisis, the investment demand for gold increases. This is because gold is not a debt or equity obligation as are all other finanicial instruments. When bank stocks, CDO, mortgage backed securities, etc., etc. - all of which are obligations upon someone else - decline in value and the risks of holding them increase, people buy gold. This is they way it has been throughout history.
Just as history shows that real estate booms turn into busts, history shows that financial crises increase the investment demand for gold. It is perhaps not a coincidence that the last big bull market for gold was at the time of the last really big real estate bust in the early 1980’s.
March 7th, 2008 at 1:14 pm
People buy gold during a credit contraction (some people also call it a liquidity crisis) because credit instruments loose their liquidity.
Subprime mortgages and other repackaged forms of debt have no bids. Because debt cannot be repackaged and sold, less debt is created. I.e. credit contracts.
When debt obligations loose liquidity, people will not invest in them because they are hard or impossible to sell. People then begin to invest in the most liquid assets - assets which rarely go “no bid”.
Throughout history this has been gold. In more recent history we may add US Treasury Bills. When debt instruments go “no bid” the media talks about a “flight to safety”. This is really a flight to liquidity - things you can always sell anywhere in the wold and get your money out.
March 7th, 2008 at 1:19 pm
March 7th, 2008 at 1:19 pm
“I love this life… it is so sweet. Soon, a house will be for the privelaged only. Actually, I think it already is.
Everyone else will need to submit their application to me, so I can review and decide who get’s a place to rent or not. I love being a Land lord. It’ll be just like the good old days.
“The rich getting richer, and the poor getting poorer.”
Cheers!”
March 7th, 2008 at 1:32 pm
The symbolism of architecture reflects the economic reality that Vancouver is sustained by real estate. If we are all waiting for prices to decline, what will that do to the economy? The Vancouver economcy is a real estate ponzi scheme. When it ends there will be a black hole in economy. How many people will loose their jobs and who will be able to afford even depressed real estate prices?
The question becomes - How are you preparing yourself to take advantage of low RE prices when the rest of the local economy is in the dumps too? Are people saving like crazy not going out for dinner, etc?
March 7th, 2008 at 1:45 pm
WTF? That is the U.S. dollar going down, not gold going up. From a Canadian dollar perspective, the product price doesn’t move. Convert money, buy U.S. dollar denomated product, NOTHING CHANGES.
Systemic risk in the finanicial markets of the kind we are seeing is bullish for gold. In times of financial system crisis, the investment demand for gold increases.
WTF#2. Which is it? Is gold an inflation hedge or a flight of safety? They are kind polar opposites. Liquidity decreases buy gold. Liquidity increases buy gold. Jeez.
When debt obligations loose liquidity, people will not invest in them because they are hard or impossible to sell. People then begin to invest in the most liquid assets - assets which rarely go “no bid”.
Sorry, makes no sense at all. Basically when there is illiquidity, there is less money chasing goods, including gold. Don’t forget about the fractional reserve banking. The real story when there is illiquidity is that there are willing borrowers, but not willing lenders. The vast majority of this retraction comes from the reserve ratio. In other words, there is less money in the system. Somehow you are myopically focused on small part of the supply side related to depositors. Give me a break. The cause of the illiquidity is not in the demand side. I can still go to ING or Presidents Choice and get my 4 percent. Why exactly would I be better off in gold?
March 7th, 2008 at 1:47 pm
March 7th, 2008 at 2:51 pm
March 7th, 2008 at 3:01 pm
I asked for fundamentals (ie technical analysis) not some rhetoric you copy and paste from a goldbug chat site. Some fundamentals to back up your stance please.
March 7th, 2008 at 3:07 pm
I can’t believe that “Land lord” post. The awful thing is, having been here for a while I have seen it more and more. It’s so feudal, isn’t it? You either hold land and are a “lord” or you aren’t, and you’re a peasant.
Meanwhile the whole rest of the world is in a real estate freefall. Places like London and NYC, which are true global cities are in freefall. Toronto seems to be in a correction. Vancouver just floats along on its own silly cloud.
Depressing.
March 7th, 2008 at 3:35 pm
A reliable source has informed me that Krrish is busy spending a small portion of his RE windfall in Monaco. He’s probably drinking a martini mingling with other Vancouver RE tycoons in his Versace tux, top hat and monocle as we speak. Oh and surrounded by gorgeous Russian women in evening gowns and tiaras.
March 7th, 2008 at 3:37 pm
March 7th, 2008 at 3:41 pm
New York style living with skytrain convenience!
March 7th, 2008 at 4:32 pm
How do you explain the rise of gold since 2000? If you are a bear on gold, what is your case?
March 7th, 2008 at 4:42 pm
The question is what would someone with money to invest invest in now? Would they invest in mortgage backed securities or other debt based obligations? The answer is no because those obligations are not liquid in the current environment- they have no bids. This is the freezing of the credit market. If you buy them you will not be able to sell them easily.
That is why you would buy gold.
Gold as an inflation hedge or as a flight to safety may be polar opposites. However, they are the two major reasons people buy gold. Just listen to the pundits on ROBTV. What you ignore is that markets are made by individuals, each of whom may believe different things. What matters is not that they hold consistent beliefs as between them but that their market beliefs lead to one decison: buy gold. If there were another conflicting theory people bought into to buy gold, that would also increase the demand for gold. It is irrelevant that theories are inconsistent. All that matters is that they have adherents among investors.
Freako, you have to understand that markets are not the logical arguments of one person. They are millions of people who buy into a number of alternative theories which are often conflicting. Your prism of logic rather than viable investment theses would not be very profitable.
March 7th, 2008 at 4:46 pm
I do not know anyone that is living in Abbotsford however I do know several working there. I asked them why they don’t move there to cut down on their commute & it’s cheaper to buy a place there and their response was “It’s Abbotsford, there’s nothing to do there after work! I will go nuts!!”
March 7th, 2008 at 4:51 pm
You asked for fundamentals not technical analysis. You seem to think they are the same thing. They are not. Technical analysis is the analysis of price movements and is often done using price charts, moving averages and the like. Please get your terminology straight before you accuse someone of plagerism.
March 7th, 2008 at 4:57 pm
I wish you luck investing in something based on the logic that if investors like it, so should you.
March 7th, 2008 at 5:05 pm
“If I owned Detroit and Hell,
I’d rent out Detroit and live in Hell”.
http://tinyurl.com/372jea
Take Chicago, for instance, the largest city in America’s midwest and the third largest in the US. It is rumoured to be seriously in the running for the 2016 Olympic Games, and all the investment breaks that go with it.
funny article
March 7th, 2008 at 5:06 pm
What do you think makes asset prices rise if not investment demand? Why do you think speculators bid up vancouver RE prices to insane levels? What do you think causes the boom before every bust?
Read the Alchemy of Finance by George Soros. If you are trying to make money in any asset market by buying and selling the asset, the most important thing is the prevailing investment thesis because that drives demand. As long as the thesis has legs prices will rise. When the thesis breaks down, so will prices.
March 7th, 2008 at 5:15 pm
This is what I mean by credit contraction (taken from an article in today’s NY Times):
“The credit markets came under renewed stress Thursday as investors sought absolute safety and even moved away from debt issued by Fannie Mae and Freddie Mac, the government-sponsored mortgage lending enterprises.
The intensifying credit crisis came as one regulator, Timothy F. Geithner, the president of the Federal Reserve Bank of New York, said that some banks had moved from being too willing to take on risks to being reluctant to take any chance of losing money, a move that was making the crisis worse.”
Debt is being repudiated by lenders and the buyers of debt. What is the one financial asset which is not an obligation or claim on another entity? It is gold. That is why the current credit crises increases the investment demand for gold. In addition to this are the gold bugs who believe in the us dollar down -gold up thesis. Very few people understand the dynamics of gold (again just listen to the pundits of ROBTV who openly admit this). I may not even understand it but the bottom line is that my ideas about gold have made me at least $10K per year since 2002 in my spare time. I don’t think it will go up forever but I will make money on it until it goes bust.
Lets focus on the bottom line here, people. Don’t you all want to make money?
Freako has a lot of good criticism but all he does is criticize but what are his investment ideas? Is he an omni bear who never makes money because every idea is a bad one.
March 7th, 2008 at 5:37 pm
http://tinyurl.com/yruhby
“Prime Minister Stephen Harper says Canadians feeling the effects of the global economic slowdown shouldn’t expect government bailouts any time soon”.
Now, that is just flat-out funnier’n f@ck.
Just look at our de-facto hyperinflation, courtesy of the CBs injecting more and more zeros into the mix.
No bail out here…
March 7th, 2008 at 5:46 pm
http://tinyurl.com/yr9xoq
March 7th, 2008 at 6:27 pm
I don’t think anyone’s arguing that markets can be driven by sentiment. I disagree that sentiment is a good way of making investment choices on average but to each his/her own.
As to gold, out of curiosity, how do you know when to buy or sell? I’m asking because, personally, I don’t know what I would do. FTR I’m not a very good judge of future directions of sentiment.
March 7th, 2008 at 6:36 pm
As with any asset class, the basic investment thesis supports a long term up trend. Within the long-term up trend there are corrections and rallies. By on the corrections.
Corrections in gold tend to happen when there is bullish us dollar news (interest rake hikes, good jobs numbers, good export data) which causes the gold bugs to sell. News of credit market strength draws money away from gold and into interest bearing debt based obligations and causes some others to sell gold. Over top of all this is technical analysis of price movements which may indicate bullishness or bearishness. You must take a holistic approach to the decision of when to buy and sell. Investing (or speculating) is an art rather than a science.
March 7th, 2008 at 6:42 pm
March 7th, 2008 at 6:45 pm
March 7th, 2008 at 7:04 pm
1. U.S. dollar decline.
2. Inflation.
3. A bunch of gold bugs bidding up the prices.
Not listed in order of importance.
March 7th, 2008 at 7:08 pm
Can you get off this tangent. The purchasing power from investors with money burning a hole in their pocket is frigging miniscule compared to the purchasing power lost from lack of liquidity. Somehow you manage to read that as bullish for gold. I have news for you. People still borrow, people still lend. Like I said, go to ING to see if they turn away your deposit. You are getting this backwards. It is the debt that is repackaged and sold to investors, not deposits.
March 7th, 2008 at 7:10 pm
Again, to emphasizie, you have it backwards backwards. You the investors are buying them, not selling them. One invests in a security through buying, not selling.
March 7th, 2008 at 7:15 pm
Perfectly split at this point. I wonder how this poll would’ve looked a couple of years ago. Talking to co-workers now, they’ve definitely changed their tune from last year. Now, instead of RE going up, up and away, they accept the fact that it’ll stall for a few years. Hopefully by this time next year they’ll accept that it’ll just slowly drop for a few years.