Comments on: Canadians not ready for downturn http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html Bubble? What Bubble? Mon, 01 Dec 2008 21:31:36 +0000 http://wordpress.org/?v=2.6.2 By: DLA http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-20168 DLA Sun, 15 Jun 2008 21:40:59 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-20168 I agree with Anonymous. I think the notion of having an emergency fund is a bit antiquated. Keeping anything over $5,000.00 in a supposedly "high interest" savings account which is actually below the actual rate of inflation is foolish. However, the real issue is managing personal debt (i.e., no high interest rate cards "whether platinum or gold", accepting the limitations of your buying power and most importantly knowing the difference between need and want). All lessons most of us have had to learn the hard way.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-20168">0</span> <small>(to vote for this comment, please visit the site)</small></p> I agree with Anonymous. I think the notion of having an emergency fund is a bit antiquated. Keeping anything over $5,000.00 in a supposedly “high interest” savings account which is actually below the actual rate of inflation is foolish. However, the real issue is managing personal debt (i.e., no high interest rate cards “whether platinum or gold”, accepting the limitations of your buying power and most importantly knowing the difference between need and want). All lessons most of us have had to learn the hard way.

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]]> By: Anonymous http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18887 Anonymous Fri, 23 May 2008 02:53:21 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18887 I don't know if I understand what constitues an emergency savings account, but I'm imagining something highly liquid, that loses purchasing power over time. I think of my untapped HELOC as my emergency fund. It serves the same function, but costs nothing. If I lose both jobs, can't find another, my HELOC is frozen, I can't sell or rent my house and I've burned through my RRSPs and other assets, then a rainy day "savings account" probably wouldn't make much difference. As long as I have credit avaiable, I don't see any reason for emergency savings. Long term savings sure, but not emergency savings. I would only put up with inflation and taxes eroding my earnings in an emergency "savings account" if I anticipated a reasonable high likelihood of needing the money very soon. Wouldn't that explain the findings? Many don't need an emergency fund, and for those that can't save a meaningful emergency fund, there is social assistance. So who's left? Perhaps there's relatively few caught in between those positions, rather than a whole lot of risk takers and poor folks.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18887">0</span> <small>(to vote for this comment, please visit the site)</small></p> I don’t know if I understand what constitues an emergency savings account, but I’m imagining something highly liquid, that loses purchasing power over time.

I think of my untapped HELOC as my emergency fund. It serves the same function, but costs nothing.

If I lose both jobs, can’t find another, my HELOC is frozen, I can’t sell or rent my house and I’ve burned through my RRSPs and other assets, then a rainy day “savings account” probably wouldn’t make much difference.

As long as I have credit avaiable, I don’t see any reason for emergency savings. Long term savings sure, but not emergency savings. I would only put up with inflation and taxes eroding my earnings in an emergency “savings account” if I anticipated a reasonable high likelihood of needing the money very soon.

Wouldn’t that explain the findings? Many don’t need an emergency fund, and for those that can’t save a meaningful emergency fund, there is social assistance.

So who’s left? Perhaps there’s relatively few caught in between those positions, rather than a whole lot of risk takers and poor folks.

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]]> By: Deliverator http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18880 Deliverator Fri, 23 May 2008 00:23:49 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18880 <i>The question isn’t “How much of your portfolio is in cash?”, it’s “How much money do you have saved, period?”</i> Actually, the question was: <i><b>Do you have a ‘rainy-day’ savings account for emergencies?</i></b> That, IMHO, reads a lot like 'cash' to me. It would not include investments like stocks, bonds, mutual funds, etc. That was the subject of a survey a couple of months back, IIRC.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18880">0</span> <small>(to vote for this comment, please visit the site)</small></p> The question isn’t “How much of your portfolio is in cash?”, it’s “How much money do you have saved, period?”

Actually, the question was:

Do you have a ‘rainy-day’ savings account for emergencies?

That, IMHO, reads a lot like ‘cash’ to me. It would not include investments like stocks, bonds, mutual funds, etc. That was the subject of a survey a couple of months back, IIRC.

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]]> By: Aleks http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18873 Aleks Thu, 22 May 2008 21:24:25 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18873 How much to keep in an emergency fund is a separate discussion, but the fact that you're even considering it probably puts you in the "six months or more" category. The question isn't "How much of your portfolio is in cash?", it's "How much money do you have saved, period?" Half the population has nothing saved, and another quarter only have enough for one month's expenses. When you start quibbling over whether to keep $5000 or $10,000 in a savings account, you're already in the 90th percentile at least.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18873">0</span> <small>(to vote for this comment, please visit the site)</small></p> How much to keep in an emergency fund is a separate discussion, but the fact that you’re even considering it probably puts you in the “six months or more” category. The question isn’t “How much of your portfolio is in cash?”, it’s “How much money do you have saved, period?” Half the population has nothing saved, and another quarter only have enough for one month’s expenses. When you start quibbling over whether to keep $5000 or $10,000 in a savings account, you’re already in the 90th percentile at least.

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]]> By: Deliverator http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18870 Deliverator Thu, 22 May 2008 19:58:03 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18870 <i>When you refer to a rainy-day account, what is that exactly? I have plenty of assets and zero debt, but I don’t see the point in holding too much money in some “high interest” savings account which is really being eroded by inflation.</i> I would concede your point, Warren, but it still makes sense to have a couple of months (at least) expenses in cash (or some other highly liquid asset) quickly available for emergencies.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18870">0</span> <small>(to vote for this comment, please visit the site)</small></p> When you refer to a rainy-day account, what is that exactly? I have plenty of assets and zero debt, but I don’t see the point in holding too much money in some “high interest” savings account which is really being eroded by inflation.

I would concede your point, Warren, but it still makes sense to have a couple of months (at least) expenses in cash (or some other highly liquid asset) quickly available for emergencies.

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]]> By: Warren http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18852 Warren Thu, 22 May 2008 15:51:42 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18852 When you refer to a rainy-day account, what is that exactly? I have plenty of assets and zero debt, but I don't see the point in holding too much money in some "high interest" savings account which is really being eroded by inflation.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18852">0</span> <small>(to vote for this comment, please visit the site)</small></p> When you refer to a rainy-day account, what is that exactly? I have plenty of assets and zero debt, but I don’t see the point in holding too much money in some “high interest” savings account which is really being eroded by inflation.

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]]> By: Drachen http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18849 Drachen Thu, 22 May 2008 14:51:51 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18849 <b>patriotz</b> "...higher taxes and higher cost of living right across the board (Germany..." I've lived there and I can tell you the taxes are higher but the cost of living is lower. Scandinavia as well I believe. But more importantly for families starting out both have subsidized daycare (free through most of Scandinavia I believe).<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18849">0</span> <small>(to vote for this comment, please visit the site)</small></p> patriotz

“…higher taxes and higher cost of living right across the board (Germany…”

I’ve lived there and I can tell you the taxes are higher but the cost of living is lower. Scandinavia as well I believe.

But more importantly for families starting out both have subsidized daycare (free through most of Scandinavia I believe).

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]]> By: Michael Randallbard http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18842 Michael Randallbard Thu, 22 May 2008 06:55:41 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18842 http://www.kitco.com/ind/AuthenticMoney/may202008.html<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18842">0</span> <small>(to vote for this comment, please visit the site)</small></p> http://www.kitco.com/ind/Authe.....02008.html

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]]> By: Michael Randallbard http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18841 Michael Randallbard Thu, 22 May 2008 06:54:38 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18841 <a>Lest We Forget a Certain Little Bet</a><p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18841">0</span> <small>(to vote for this comment, please visit the site)</small></p> Lest We Forget a Certain Little Bet

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]]> By: patriotz http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18840 patriotz Thu, 22 May 2008 05:31:46 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18840 <i>Pre-sale buyers (at the Anvil) have received letters from the developer saying they have 14 days to decide whether they want to pull out and get their deposit back or pay the additional costs.</i> Is that a no-brainer or what? :-) Take the money and run.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18840">0</span> <small>(to vote for this comment, please visit the site)</small></p> Pre-sale buyers (at the Anvil) have received letters from the developer saying they have 14 days to decide whether they want to pull out and get their deposit back or pay the additional costs.

Is that a no-brainer or what? :-)

Take the money and run.

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]]> By: blueskies http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18839 blueskies Thu, 22 May 2008 04:53:02 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18839 <i>And perhaps, Bill Good, Muir, Pastrick, and the VANOC mob, should administer the plan.</i> ...like having the coyotes design the security system for the chicken coop.. -A-... you sl-A-y me :-)<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18839">0</span> <small>(to vote for this comment, please visit the site)</small></p> And perhaps, Bill Good, Muir, Pastrick, and the VANOC mob, should administer the plan.

…like having the coyotes design the security system for the chicken coop..

-A-… you sl-A-y me :-)

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]]> By: --A- http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18838 --A- Thu, 22 May 2008 04:36:30 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18838 "Maybe the Urban Development Institute representing the developers … should have a mediation process. Maybe there should be somebody there to look after the consumer," Rennie said." Sure Rennie, perhaps we should have a process in place whereby if the flippers make money they keep it, if they lose money the taxpayer picks up the tab. And perhaps, Bill Good, Muir, Pastrick, and the VANOC mob, should administer the plan.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18838">0</span> <small>(to vote for this comment, please visit the site)</small></p> “Maybe the Urban Development Institute representing the developers … should have a mediation process. Maybe there should be somebody there to look after the consumer,” Rennie said.”

Sure Rennie, perhaps we should have a process in place whereby if the flippers make money they keep it, if they lose money the taxpayer picks up the tab.

And perhaps, Bill Good, Muir, Pastrick, and the VANOC mob, should administer the plan.

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]]> By: exx http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18837 exx Thu, 22 May 2008 04:16:01 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18837 <a href="http://www.cbc.ca/canada/british-columbia/story/2008/05/21/bc-the-anvil-in-trouble.html" rel="nofollow">Here's the CBC article</a> to the Anvil that macchiato posted above. "United Properties, the developer behind The Anvil in New Westminster, has run out money, and that means pre-sale buyers are being asked to pay an additional $20,00 to $40,00 if they want to keep their condos."<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18837">0</span> <small>(to vote for this comment, please visit the site)</small></p> Here’s the CBC article to the Anvil that macchiato posted above.

“United Properties, the developer behind The Anvil in New Westminster, has run out money, and that means pre-sale buyers are being asked to pay an additional $20,00 to $40,00 if they want to keep their condos.”

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]]> By: Re-diculous http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18836 Re-diculous Thu, 22 May 2008 03:40:14 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18836 Garth Turner has posted "Condo Crack" refering to his Bill Good interview this morning http://www.greaterfool.ca/2008/05/21/condo-crack/#comments ...am I reading this correctly? Looks like pumper-Bill was RENTING a 1.6 million dollar unit which he was foced out of because the owner wanted to sell. LOL<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18836">0</span> <small>(to vote for this comment, please visit the site)</small></p> Garth Turner has posted “Condo Crack” refering to his Bill Good interview this morning

http://www.greaterfool.ca/2008...../#comments

…am I reading this correctly? Looks like pumper-Bill was RENTING a 1.6 million dollar unit which he was foced out of because the owner wanted to sell. LOL

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]]> By: blueskies http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18835 blueskies Thu, 22 May 2008 03:32:02 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18835 <i>And of those, only half have enough to cover a month’s expenses”</i> i read somewhere that the median savings on an individual basis was merely $2500... a little scary<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18835">0</span> <small>(to vote for this comment, please visit the site)</small></p> And of those, only half have enough to cover a month’s expenses”

i read somewhere that the median savings on an individual basis was merely $2500… a little scary

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]]> By: patriotz http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18834 patriotz Thu, 22 May 2008 03:31:52 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18834 The plain fact is that there are countries with higher taxes and higher cost of living right across the board (Germany, Scandinavia for example), or much lower incomes (Asia) which have higher savings rates than us. If people choose to save they will save. It's a matter of priorities. That's all there is to it really. And it would have been interesting if that study had broken out results by province. I think BC would probably be the worst by a mile. Remember our -8% savings rate. I think this province has set itself up for a clobbering in the upcoming recession.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18834">0</span> <small>(to vote for this comment, please visit the site)</small></p> The plain fact is that there are countries with higher taxes and higher cost of living right across the board (Germany, Scandinavia for example), or much lower incomes (Asia) which have higher savings rates than us.

If people choose to save they will save. It’s a matter of priorities. That’s all there is to it really.

And it would have been interesting if that study had broken out results by province. I think BC would probably be the worst by a mile. Remember our -8% savings rate.

I think this province has set itself up for a clobbering in the upcoming recession.

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]]> By: emile http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18833 emile Thu, 22 May 2008 03:31:01 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18833 sin tax ???<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18833">0</span> <small>(to vote for this comment, please visit the site)</small></p> sin tax ???

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]]> By: Brittanny Spears http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18832 Brittanny Spears Thu, 22 May 2008 03:05:10 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18832 "Canadians are poor savers" Can't imagine why this is? It must be mostly because of our extravagant lifestyles. I don't think it has anything to do with: - real estate prices - gas prices - food prices - income tax - banking costs - sin tax - GST - energy costs in general - inflation - etc. etc. etc.<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18832">0</span> <small>(to vote for this comment, please visit the site)</small></p> “Canadians are poor savers” Can’t imagine why this is? It must be mostly because of our extravagant lifestyles. I don’t think it has anything to do with:
- real estate prices
- gas prices
- food prices
- income tax
- banking costs
- sin tax
- GST
- energy costs in general
- inflation
- etc. etc. etc.

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]]> By: Drachen http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18829 Drachen Thu, 22 May 2008 02:18:43 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18829 <b>Ted</b> "Pathetic!" Arrogant prick!<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18829">0</span> <small>(to vote for this comment, please visit the site)</small></p> Ted

“Pathetic!”

Arrogant prick!

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]]> By: macchiato http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18827 macchiato Thu, 22 May 2008 01:26:36 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18827 'nother one bites the dust: http://www.liveatanvil.com/ they are asking pre-sale buyers to buck up 20-40K more or else have their deposits returned. they are apparently reputable: http://www.udi.bc.ca/<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18827">0</span> <small>(to vote for this comment, please visit the site)</small></p> ‘nother one bites the dust:

http://www.liveatanvil.com/

they are asking pre-sale buyers to buck up 20-40K more or else have their deposits returned.

they are apparently reputable: http://www.udi.bc.ca/

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]]> By: --A- http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18826 --A- Thu, 22 May 2008 00:59:39 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18826 Problem is almost everyone I know has become an Economist of Nobel Prize rank. They reason....everyone wants to live here, and we have natural resources to boot. No RE Bubble, no commodities bubble, yeah okay. My view: we have a commodity bubble, a RE bubble, and a credit bubble to boot!<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18826">0</span> <small>(to vote for this comment, please visit the site)</small></p> Problem is almost everyone I know has become an Economist of Nobel Prize rank.

They reason….everyone wants to live here, and we have natural resources to boot.

No RE Bubble, no commodities bubble, yeah okay.

My view: we have a commodity bubble, a RE bubble, and a credit bubble to boot!

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]]> By: Anonymous http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18825 Anonymous Thu, 22 May 2008 00:55:47 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18825 Why save with so much credit available?<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18825">0</span> <small>(to vote for this comment, please visit the site)</small></p> Why save with so much credit available?

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]]> By: read on http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18824 read on Thu, 22 May 2008 00:45:46 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18824 worrying, more like well, not for me, but for them<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18824">0</span> <small>(to vote for this comment, please visit the site)</small></p> worrying, more like

well, not for me, but for them

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]]> By: Ted http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18823 Ted Thu, 22 May 2008 00:13:02 +0000 http://vancouvercondo.info/2008/05/canadians-not-ready-for-downturn.html#comment-18823 "And of those, only half have enough to cover a month’s expenses" Pathetic!<p class="top-comments">Current score: <span class="top-comments-karma" id="karma-18823">0</span> <small>(to vote for this comment, please visit the site)</small></p> “And of those, only half have enough to cover a month’s expenses”

Pathetic!

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