Excellent Book !

That cemented my skepticism of how the system really works.
Shows how history repeats itself and much of the bubble’s genesis

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Ya think?

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GORDO, traitor to free enterprise.

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http://www.cbc.ca/news/interactives/map-tsx/

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That’s an oxymoron. If they’re paid, they’re not volunteers.

It is true that the provincial government will pay public servants to work for the Olympics, with their salaries not accounted for in the tally of the games’ cost.

Thank you Gordo.

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This excellent Michael Lewis (of Liar’s Poker fame) article will scare the hide off the craggiest stock market bear. Did me. We ain’t seen nothing yet. One of the best things I’ve read all year in my near ADD-level of house and stock bubble article browsing

http://www.portfolio.com/news-.....print=true

“But he couldn’t figure out exactly how the rating agencies justified turning BBB loans into AAA-rated bonds. “I didn’t understand how they were turning all this garbage into gold,” he says. He brought some of the bond people from Goldman Sachs, Lehman Brothers, and UBS over for a visit. “We always asked the same question,” says Eisman. “Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.” He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says. ”

… ““You have to understand this,” he says. “This was the engine of doom.” Then he draws a picture of several towers of debt. The first tower is made of the original subprime loans that had been piled together. At the top of this tower is the AAA tranche, just below it the AA tranche, and so on down to the riskiest, the BBB tranche—the bonds Eisman had shorted. But Wall Street had used these BBB tranches—the worst of the worst—to build yet another tower of bonds: a “particularly egregious” C.D.O. The reason they did this was that the rating agencies, presented with the pile of bonds backed by dubious loans, would pronounce most of them AAA. These bonds could then be sold to investors—pension funds, insurance companies—who were allowed to invest only in highly rated securities. “I cannot f**king believe this is allowed—I must have said that a thousand times in the past two years,” Eisman says.

His dinner companion in Las Vegas ran a fund of about $15 billion and managed C.D.O.’s backed by the BBB tranche of a mortgage bond, or as Eisman puts it, “the equivalent of three levels of dog sh*t lower than the original bonds.” “

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Do you think this site will help you to sell your home?

In your own words The suffering unparalleled, cried out for Buyers.
Then Why did you list your home? Take it out off market or else your realtor will ask you to Reduce asking prices If there is no buyer what’s the point of price reduction? Simply take it off before you go also tell us why were you selling this home, WHYYYYYYYY?

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http://www.yattermatters.com/

We regret to inform you.

In the past 12 days, the Vancouver west side detached real estate market died.
Say It Ain’t So

Each day, the blushing love for Vancouver’s west side real estate faded. A total of twelve days evidenced statistical blood lying on the floor of high priced glories past. The suffering unparalleled, cried out for Buyers.

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> “Your neighbour must have overpaid.
> I don’t think we’ve hit 26.8% decline yet.
> Did they destroy the unit or something?”

This is a misunderstanding of how markets work. You are comparing price changes on an individual home vs aggregate price changes in the market as a whole. The two do not necessarily track that closely. You should not be surprised if individual homes or neighborhoods deviate significantly from the average or median numbers.

For example, even though the DOW is “only” down 35% for the year, some individual stocks within the DOW like GM are down over 75%. People who bought GM 12 months ago paid “fair market value” at the time, since it was not possible to buy those shares for less at that time.

Likewise, in the current housing market, many home prices in West Van and Van west have already dropped by more than 33%, even though the aggregate numbers for greater Vancouver are “only” down 9% YTD.

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I would like to volunteer to look after our female visitors “needs”; I prefer females early 20’S,

But will settle for mid 20’s if athletic and rich.

http://www.canada.com/vancouve.....6512eb7cd9

Sadly, there are fools who will actually go along with this.

Does anyone know if it is true that the Provincial Government will pay pablic servents to volunteer?

Does anyone know if they are looking for volunteers with my special talent?

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What I’ve noticed:

I’ve been following a few, West Side, and I’ve seen one go from 399K to 325K. another on the same street is 319K, it would have gone for >400K at peak. So, the whole street has been pressured to re-price downward … problem is, no one is buying. Everything is just sitting.

Then there are the jokers who are just wasting time, like this 390sq/foot studio in Kits/Arbutus for 289K, hilarious.

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Not disagreeing.
Read the link below. Canada is mentioned as well.

http://network.nationalpost.co.....under.aspx

The pendulum swing of correction by desperate Gov’ts

In a reducto ad absurdum sense….too much of a good thing can be = too much of a bad thing.

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The ONLY people accepting more debt right now is the last ones you want to have it.
With my lack of ANY debt, and fair cash reserves I could singlehandedly make more contribution to the Vancouver Westside RE market than anyone in the past 12 days. (See post 685 at RJ’s, oops, sorry, Rob’s blog)
But I won’t!

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We are talking different things. Overextending and incurring debt that can’t be paid off is bad bad bad. But credit and debt aren’t evil or morally repugnant in and of themselves. What do you think happens to the money you put in a savings account, and why does it earn interest?

All businesses operate with credit, whether it’s vehicle or equipment leases, lines of credit, or financing of asset purchases. It’s not that scary. Imagine if you had to save up the entire cost of a house. Or if someone who wanted to start a business had to finance the whole nut through personal savings. Purchase all your equipment as a 100% outlaid capital cost. Collect your accounts before you pay salaries. It can’t be done.

One of the problems of the 30s was the people refused to take on debt at all and hoarded savings. Without liquidity in the system it seizes up. Spending and investment contracted and wouldn’t budge. Without that spending and investment, economic activity slowed, jobs were lost and not created, which led to even less spending and investment. Which led to less economic activity, which meant no jobs being created etc. It only started to improve with massive government spending to stimulate the economy (Tennessee Valley, the War). One criticism was that government didn’t intervene enough and early enough. This is no doubt on the minds of Bernanke, Paulson and Flaherty.

No question consumer debt and mortgage debt got out of control in the US, and mortgage debt in our fair town is likely the same for a lot of recent purchasers. The problem is those excesses have caused systemic problems in all debt markets, even those that were otherwise sustainable. Now here, those excesses are unlikely to cause the same systemic problems. Right now our financial system is simply suffering collateral damage to the US meltdown.

Anyway, trust me, if it people start missing a few paycheques or get laid off because their employer can’t access credit, there would be calls for the government to “do something”. They’re doing that something right now.

All of which is to say… I gotta lay off the afternoon Starbucks.

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Harper and Flaherty are such idiots. Yeah, great idea guys, let’s sell off national assets at a time when we’re sure to get bottom dollar for them simply for a short term political gain.

Good job Canada re-electing that pack of thieves.

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Your neighbour must have overpaid.
I don’t think we’ve hit 26.8% decline yet.
Did they destroy the unit or something?

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that can’t be good. i’d better stop reading the papers. all this bad news is starting to get to me. i guess we’ll all find out how bad it’s going to be soon. good luck everybody.

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A scary thought indeed! But what if the old stories that warn against living on credit are true? It’s sure looking a lot like the lead-up to the great depression, which is what “they” are positive they can avoid this time. “They” also said we didn’t have a problem to begin with. “They” were wrong then.
Like it or not, what I see out there looks like what Mish is describing more than it looks like what “they” are repeating like a mantra.. What if he’s right?
Here is a key, older post on “Peak Credit”.

“Peak credit has been reached. That final wave of consumer recklessness created the exact conditions required for its own destruction. The housing bubble orgy was the last hurrah. It is not coming back and there will be no bigger bubble to replace it. Consumers and banks have both been burnt, and attitudes have changed.

Children whose parents are being destroyed by debt now, will keep those memories for a long time”.

Borrowing money is dangerous, and borrowing money to fund current consumption is a TERRIBLE idea. Yet collectively that’s what we have done. Worse yet, we borrowed it from our future selves! The debt we take on enters the economy (minus big , fat paychecks for the scam artists running the show), sloshes around a time or two, making the economy look fine in the current quarter/election cycle/average sheep attention span. The debt then parks itself in our house/RRSP/mutuals/etc value, which we use as collateral to borrow even more.
The FUTURE value of all those asset classes depends on the debt being paid down.
So if I owe myself a lot of money, and can’t pay, who’s problem is it?

Without that steady stream of new “money” entering the economy, we’ve been in recession for years. The whole economy is as unsustainable as Vancouver RE prices, for the same reasons, and the only question is when does the music stop. Mish is making a very compelling case that the music HAS stopped. Got a chair?
I have a comfy chair, and popcorn. It’s been 80 years since the last time this show hit the stage. I’m gonna like it.

And deplore it, and hope we can do better next time.

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Of course the system runs on credit.
However, credit should be run like a control valve but not on par with a Titanic-esque leak .

Those at the top either took advantage of the situation or were ignorant of the potential.

The saying “Gov’t can NOT go broke ” was made a few decades back by an insightful party as the world became more and more addicted to credit and most at the top of the system who are often the greatest beneficiaries from such voodoo economics have never forgotten that Gov’t can NOT go broke.

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