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Friday Free-for-all!

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It’s open topic time here at Vancouver Condo Info – Here are a few stories I’ve noticed this week:

-As home prices fall, it’s time to rethink real estate
-British Columbia: Leaky condos to leaky schools
-BC homebuyers ‘sitting on their hands’ in buyers market
-Vancouver leads drop in Canadian house prices
-Realtors unfit to serve on council?
-Rennie: It’s all about the consumer
-Craigslist a haven for crooks?
–Vancouver bedbugs doubling each year
-Canadian productivity: longest slide in 2 decades
–Canadian buyers run to the USA
–Lehman a Lemon?
-US Fed holds emergency meeting on market

So what are you seeing out there? Post your news, links and anecdotes here and have a great sunshine filled weekend!

note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

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Mr. Market

Everything in finance is relative to everything else. to say it another way, there is no hitching post in the financial universe. The value of cash relative to stuff will skyrocket and the value of stuff relative to cash will plummet. This will reach rediculous levels before reversing to norma.

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ForeignerX

When four of the strongest bank in America are on the verge of collapsing: I m shit scared…

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John

As the stock market continues to soar in the US the housing market in Canada will follow. It's evident that rich asians and albertans have sold out of the TSX and will put that money into condos in Vancouver. That's the last safe bastion along with SUVs and boats. I also think that wiskey is a good investment and so I've been building up a stock of single malt.

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Bluesman

Thanks, Patriotz. You ROCK, TOO! Excellent explanation. So I don't have to worry about missing the cash bubble now. I can sleep easy tonight. Wish I could say the same for all those who are long in the stock market:) G'night folks, and think of what the employee from Lehman interviewed on CNBC said, hey put it all into perspective, it's not 9/11. We're all alive and well and life will go on.

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patriotz

Approximately 10.7% of the province’s annual output and more than 10% of the province’s employment is driven by residential construction.

This from the provincial government report on the Leaky Condo Crisis I.

And note that report is from 10 years ago, during the rule of the evil Glen Clark and the late 90's RE minibust. How much higher do you think that figure is today?

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patriotz

So to be a bubble people would have to pay me way more for my cash than they are willing to pay me now. Vancity is only paying 3% or so on term deposits. A term deposit is a bond, not cash. You have an asset bubble when the market price of an asset is more than it is really worth, or in other words when the yield on that asset is too low. So you have a bond bubble when bond prices are too high, i.e. interest rates are too low. If the term deposit rate went up to, say, 10% without a corresponding raise in inflation expectations, that would be a bond antibubble aka bust, not a bubble. You cannot have a bubble in cash because cash has no time value by definition. Nobody is going to pay… Read more »

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rentah

Garth: Van Eeden stopped publishing his explorer picks some time earlier this year, then went almost all into bullion, then changed his money supply calculations and calculated that gold was worth $760, all in time for gold to plummet to <$750. Pretty impressive, although the timing was a bit lucky (as I'm sure PvE would agree). He is, however, predicting that the true 'value' of gold will continue to inflate with the money supply, which means about 8-12% pa. Regarding "Do you have any other good places to read?" I use fallstreet.com as a good portal (and a bit of sensible commentary) with a skeptical edge. Also like some of what you find on itulip.com patriotz: agreed, deflation & inflation not mutually exclusive. But it is worthwhile considering the overall effects on liquidity/money supply, esp when deciding on the big… Read more »

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Still Keeping an eye

“Osoyoos realtor Carol Youngberg said the 497 figure does not include units for sale in unfinished buildings such as the Indigo condominium development and the Watermark Beach Resort and that with those units included, the number of available properties in Osoyoos could be close to 700.”

Interesting:"the Indigo condominium development"

Isn't that the one Bill Good's buddy Neil was pimping on the same radio station?

Something to do with last chance, waterfront, best place on earth etc.

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Bluesman

squidly77 YOU ROCK, MAN!

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Bluesman

Holy cow, Batman.

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squidly77

lehman bros is gone

merril lynch is gone

AIG needs to raise 50 billion over night

the centre cant hold its blowing apart

allon cnbc live

hang on comrades we are in for a rough ride

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oziijjiizo

interesting take on American "Alt-A" mortgages….. can't happen here folks!

http://tinyurl.com/4lrcxy

About 3 million U.S. borrowers have Alt-A mortgages totaling $1 trillion, compared with $855 billion of subprime loans outstanding, according to Inside Mortgage Finance

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Montery

Hey folks,

Not to swing things too far off topic, but I was just googling around and stumbled across this beauty:

Residential construction activity in British Columbia is a key component of economic growth, employment, and income. Construction is BC's second largest industrial activity, in terms of value and employment. Approximately 10.7% of the province's annual output and more than 10% of the province's employment is driven by residential construction.

This from the provincial government report on the Leaky Condo Crisis I. Leaky Condo Crisis II is currently underway, but if you want to read more, check this out!
http://www.qp.gov.bc.ca/condo/index.htm#contents

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Bluesman

Mr. Market:

Ok, let me explain my confusion about cash as a bubble. A bubble is when people are paying way more for an item than it's true value. However, due to inflation, people holding cash are getting paid less not more than the value of their cash. So to be a bubble people would have to pay me way more for my cash than they are willing to pay me now. Vancity is only paying 3% or so on term deposits. Also, due to a rising cost of living I my cash is not buying as much as it did last year in terms of gas, food and rent. So what am I missing here? How and when can I participate in the cash bubble?

Thanks in advance for your explanation.

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Gadwin

This market is getting ugly. The number of "For Sale" signs across the city is astonishing. Ironically, it will probably only get worse by next year.

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Bluesman

Mr. Market:

How can cash be the next bubble? Do you mean that someone who has cash will win big from an increase in interest rates; buying power of deflated assets; both or none of the above?

Please explain. Thanks.

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Mr. Market

"What is better than cash?"

Short positions on the stock market are a good way to raise cash right now because cash is the next bubble.

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ted

Barclays just walked out of talks to aquire Lehman, the NY Times is reporting that Lehman is headed towards liquidation:

http://www.nytimes.com/2008/09/15/business/15lehm…

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bdk

Richmond will make Osoyoos seem like a tight market soon.

The taxes in Richmond are driving Commercial and Industrial businesses out of Richmond while at the same time they are planning to increase the population by 50% by 2020 without building any new bridges.

The RAV Line is expected to absorb 6% of the traffic.

When the buzz wears off Richmond will seem even worse than Downtown Vancouver as far as being overbuilt, which is saying a lot because Vancouver is seriously overbuilt.

Imagine how foolish one would feel for paying $458,000 for a one bedroom. Unless you plan to stay in your suite and never go anywhere.

Just checked building digger and there are flippers trying to get 20% more than they paid one year ago! I have to laugh at their greedy, ignorant expense.

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RJB

"P.S what a joke –oil is 100.00 a barrell and gas prices are the price when oil was almost 150.00 a barrell-so much for affordible suburbia!"

Ike was just a blip.

Crude dropped again today:
http://www.reuters.com/article/businessNews/idUSS…

I'm looking forward to Monday 🙂

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Bluesman

Garth:

Here are some websites you might find interesting:

http://howestreet.com/

http://globaleconomicanalysis.blogspot.com/

http://thehousingbubbleblog.com/index.html

You probably already know about them, but maybe some others don't. They are not all on investing, but there are some good audios and videos on howestreet and it's full of links and Mish's globaleconomicanalysis site is a good one if you are more technical like me 🙂 hehe.

What do people in general think of Howestreet.com? I would be interested to know.

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Bluesman

TOWN OF 3000 PEOPLE HAS INVENTORY OF 500-700. THAT WOULD BE ONE UNIT FOR SALE FOR EVERY 4-6 PERSONS, MAN, WOMAN AND CHILD. Another juicy tidbit from anonymous on PaulB's blog: "Osoyoos realtor Carol Youngberg said the 497 figure does not include units for sale in unfinished buildings such as the Indigo condominium development and the Watermark Beach Resort and that with those units included, the number of available properties in Osoyoos could be close to 700." http://www.osoyoostimes.com/pMOT/more.php?id=1086… Anonymous Anonymous said… Todays news from global news #1–speculaters in osoyous can`t give their investments away,prices dropping fast,town of 3000 people has inventory of over 500 units. #2–A little story about wages,debt,and inflation–average wage in BC in 1986 19.61 an hour—–average wage in BC today 19.69 an hour Consumer debt at all time high,household debt at all time high, inflation since 1986–food… Read more »

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Bluesman

Good Sunday morning all,

I found this informative little nugget over at PaulB's site:

Anonymous RJB said…

"Anyone have any thoughts on whether the Fannie/Freddie bailout will actually slow foreclosures in the US and what downstream impact might be felt (if any) in local price deflation?"

Foreclosures will continue at the same pace. Alt-A and Jumbos are next.

Good overview of the next wave

http://www.youtube.com/watch?v=pmeBSWI9sF8

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Garth

rentah: I think we are on the same wavelength. I first saw Paul van Eeden at a resource conference in 2003 or so. He is great, but has stopped publishing the free stuff on his website. I also read everything from the people at http://www.sprott.com. They have predicted pretty much everything that has happened, although unfortunately their funds don't reflect that fact. I also read the boards at http://www.prudentbear.com, for some discussion with a little more colour.

Do you have any other good places to read?

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patriotz

When these two pimps start talking double digit and no rebound in sight, it means an outright crash of greater than early 80’s.

Bingo. Add Somerville and you get the Three Stooges.

inflation or deflation?

Not "or". "And".

Consumer price inflation and asset price deflation.

Oh and stagnant nominal wages and declining nominal payrolls too.

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