10% of Electronic Arts staff got layoff notices today. It was kind of EA to wait until after Christmas. They are also amalgamating there 3 facilities into just one. How many ancilliary jobs go with those? Isn’t the economic effect something like 3-1?

Further afield

http://www.nytimes.com/2009/01.....mp;emc=rss

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That depends pretty strongly on a turnaround for the Western consumer, who is tapped out and is likely to remain so. The vast Asian wealth accumulation came from selling the labor of the poor very cheaply to allow the west (primarily the US consumer) to accumulate more debt. The western middle class hasn’t seen an increase in income in decades and only financed the past 10-15 years on credit cards and home equity withdrawals. They’re done.

It will turn around? Tell that to Japan. It doesn’t have to do anything.

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http://biz.yahoo.com/ap/090102.....onomy.html,

I have lots of friends in business there. The news from real people with real jobs and business intrests is that things are not rosy and getting a lot worse region wide. You are probably just a lot smarter than all the people there to know something they don’t. Good for you.

Of course there were a lot of people out last night , it was New Years Day. I was out, and I hate going out. But even so, my many friends in the Chinese community here are seeing off 10-20% in the quarter.

As far as investing in the stock market there (China) I quite agree if you can keep a three to five year time frame in mind. Stocks are cheap, buy there are getting cheaper, daily. No bottom in China yet, the market is off more than 54% this past year. But there is no doubt that the entrepeneurial zeal that exists in that region of billions of smart people will turn around at some point. But, remember they are TOTALLY dependant on the fortunes of the Western Markets in N.AM and Europe. Chindia and the other Bric markets are export driven, period. That includes NE Asia, SE Asia and Japan.

Probably a good time to buy a CHINDIA or BRIC ETF. This isn’t a stock forum so I won’t start making recs.

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Fung estimates that 10,000 of the 60,000 factories in China owned by Hong Kong interests have closed or will close in the coming months.
http://www.iht.com/articles/20.....xports.php

Tell me some more about Asian financial brilliance? A lot of AZNs have developed a very high opinion about themselves, resting mostly upon exploitation of the gross wage disparities which result from Asia’s teeming billions of poor folk. Japan is out of that picture of course – they’ve been getting poorer for decades now. China is now hitting the skids. It was all an illusion.

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#73 realpaul, you say that you cannot get a 25 year mortgage beyond 40 years old; are you sure of that? Because that implies that 0 down 40 year mortgages are (um, were) only available to those under 25 years old. How many 0/40 mortgages can there be out there, I wonder, and for what average amount?

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The Olympics will give the condo market a boost as people will be scrambling for rental units.

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#83 Stevee , you would only have to take out a second ( or come up with some serious mommy cash like a Supraboy) if you had zero equity in your property as in the example you refer to. Key concept, zero equity, NONE OF YOUR OWN MONEY IN THE PROPERTY.

In the example the First Mort was written for $400K. Three years later the prop is appraised at 300K. You put 5% down originally ( 20K) . The differance is $80K. This 80K is the negative equity.

Adversly if you had a 400K 1st and put 25% down (100K) then when the appraisal came in at 300K you would still be optionable. This would not be zero equity (even though it appears that way) , in this scenario the bank does not have a negative balance sheet. But, sadly you’ve lost 100K, the upside though is you’re still in your home at bank rates.

Hope this helps

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Banks never go through re-appraisal unless you switch over your mortgage with other banks even if some one chose to change bank or other mortgage company then rest of comment from paul goes to America because he knows VANCOUVER REAL ESTATE NEVER GO DOWN

Arit,you have to go through your family doctor to disscuss dementia which show you unreal things b.c. medical does not take action unless your doctor refer you to next step.

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Thanks for your insight re Arit’s question. Now if you, or anyone else for that matter, has a moment, I would like to clarify something (for my own personal education). Do you mean to say, in your example, tht if the person taking out the mortgage sees their home drop by $80,000 in value, that when refinancing they would have to take out a second mortage, likely at a much higher interest rate, to cover that loss ($80k)? Thanks in advance.

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Jury is currently out on future Condo values/sales

Advice your parents never gave you.

BUY CONDO’S-THEY AINT MAKING ANY MORE

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All I can say is Wow!

Realpaul: Thanks for the explanation!!!

Luckily, evil_arit was defeated by arit so my example is only hypothetical.

But it is not hypothetical for most people I know. Most of them will be underwater before 2015. So all of them will be in a similar situation as realpaul has explained.

So they will be slaves, slaves of the bank. Forever. Once the owed amount starts growing, and the salaries stay flat, there is no exit but lose the home or keep paying ever-growing monthly payments. It’s horrible…

Nobody, what Doctor would you like me to see? And what treatment should I be treated for?

Best regards,

arit

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Ex: You pay $400K for your digs , 3 year term , 25 year amortization. Your 6.5% 3 yr var., comes due and the bank orders an appraisal which comes back at $300K. OUCH. You’ve paid down the $20K LOC thank you and owe $380K. You have $80K negative equity.

The principle repay chart says that after three years of payments all you’ve been paying is intrest and you barely own the doorknobs. If you’re a re-fi virgin don’t look this up it’s too scary. You owe the whole shebang and it looks like you’ve been renting from the bank instead of owning, it doesn’t look good.

You say, sign me up, bank says not so fast, you have negative equity, no can do, legal stuff with the Bank Act.

Amortization means the number of months between todays date and the date you turn 65. You can no longer get a 25 yr amort after 40 years of age.

Term refers to the Financing period that the bank agrees to loan you a set amount of money at an agreed upon rate of intrest. EX; 1 yr , 2yr, 3yr, fixed, variable . You see, make sense now ?, very differant words meaning totally differant things.

EX: You initially put 5% down , 20K @ 3% p/m on a seperate LOC for the downstroke, feeling cheeky. You’re sailing along with a monthly PIT of $2000p/m and the 5% LOC repay at $600. $2600 p/m plus costs. Very cheeky boy. Total debt $400K

You start a steep learning curve after changing your shorts. You find out that the bank needs $80K to refi your first and won’t do it because of the zero equity thing. Total equity is $300K remember. They send you to the nice people at HouseReamer Finance who say the $80k’s worth 15% p/a, compounded semi annually.

Now you owe $460K on a house you paid $400k for and your payments have gone up to $2000p/m on 300K and $996p/m on the second $80000. Plus everything else of course, not including the annual $3500 HouseReamer will charge you for the annual loan extensions, read the fine print in a second mort loan doc, it’s very funny stuff.

Now you’re down $80K plus the 20K you paid down, poof gone, $100,000 gone!!!! And your monthly nut has gone to $2900 !!! YEEOUCH!!!! Not to mention ( did i mention that you owe $460K on the $400K place you bought) that you had better stay current on the GDSR that the lenders set, which by the way is 33% of Gross Income. If you or your spouse loses their job it may be ‘bye bye bank’ ( you’ve changed the terms of your agreement)and you may have to fund 100% through the secong tier.

Total Debt $460++K and climbing.

Yes it’s true even people who are current on their payments can lose their homes.

#68 HUH ?

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Thanks for the explanation. That clarifies a bit. Maybe someone can tell us the answer to your question:

“When you renew your mortgage, I do not know if the bank will simply renew it, or if they look at the “current” value of the house to see if you’re still above water. ”

Let’s use an example for visualization.

evil_arit bought a house in May 2008.

The house was bought for 500,000CAD with 5% down (25,000CAD) and 25 years amortization, term of 5 years and interest rate of 5 percent.
Not even the worst case scenario, obviously.

So the mortgage taken is 475000CAD.
The monthly payment is 2762.62

After five years, evil_arit still owes 420,410CAD to the bank.

But now we are in May 2013! And the house is worth, as expected, only 250,000CAD.

What happens next? What does the bank say?

Regards,
arit

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The amortization is 25 years, so if interest rates and payments stay the same, it’ll be paid off in 25 years.

However, the term of your contract with the bank is probably only 5 years. When that 5-year term is up, you need to renew your mortgage (hopefully with only a 20-year amortization this time, since you’ve paid part of the house off already). Maybe you’ll set up the mortgage with a different bank, or maybe you’ll stay at the same bank.

When you renew your mortgage, I do not know if the bank will simply renew it, or if they look at the “current” value of the house to see if you’re still above water. If you’re below water (owing more than its worth), I don’t know if the banks are legally able to renew, or not.

Hopefully somebody can confirm this, preferably with a link to the bank act, or something that might make it clear.

Non-bank mortgage entities probably aren’t under the same set of rules.

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If telling yourself that losing 50Z% of the value of your “investment” will make you rich that’s great.
If you think the price will go up then encourage the bears to wait, then you can sell it to one of us for 25 million dollars.
Seriously who doesn’t want a 1000 sq ft poorly built Richmond townhouse near no.4 and westminster?

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I’m guessing your shtick is to say things that are completely contrary to reality to try to get a reaction. Beijing is dreaming of a eventual payoff in the midst of a major downturn. Their real estate market started to collapse just before the games and are still going down. Their economy hit a seven year low after hosting the games:

http://www.eeo.com.cn/ens/fina.....6324.shtml

The official optomistic line is that prices will start going up again after an ‘adjustment’

http://www.chinadaily.com.cn/b.....962496.htm

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