Happy $104,725 Holidays!
As we wrap up 2008, I would like to wish you all a wonderful winter and a Happy $104,725.00 Holiday. If you went shopping for a house in Vancouver last May but haven’t yet bought, that’s how much you’ve saved so far according to local real estate board statistics.
That’s enough to buy a small house or condo outright in one of the US housing bubble markets of California, Arizona or Florida.
Of course those markets have been falling for the last three years, our prices have been dropping for less than six months. What will Decembers stats show? What about the New Year?
At this point some people are very concerned about the state of the economy, both globally and locally. I do believe we’re headed for some leaner economic times, but it’s worth keeping perspective. If you’re reading this website from a warm dry location with a comfortable place to sleep and food to eat, you’re doing ok. You don’t have to go far in Vancouver to see people that are doing a lot worse.
Enjoy your extra $104,725 and have an excellent New Year, I have a feeling that 2009 is going to be very interesting.
CZ suggests the following poll:
[poll id="32"]
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December 24th, 2008 at 11:52 pm
Happy holidays Bears and Bulls! 104K lost by the Bulls, ouch!!
I’ll be conservative and guess a 15% to 20% drop in the benchmark in 2009. Not to worry though, because all in all, the Vancouver SFH benchmark will drop 50% from its peak in May 2008!!
Buh bye Specuvestors!
December 25th, 2008 at 12:03 am
Merry Christmas. I am surprised that it is dropping as fast as it is. I do believe the drop from peak to trough will be at minimum 50% I voted below 50% for 2009 but am expecting carnage. Being back for the holidays I am surprised at the change in perception in most people I met. With the exception of a few real estate die hards in my family most people are joining us bulls. I think 6 months in we will start seeing huge drops which will further accelerate things as people will finally figure out that the last one to sell will get nothing.
December 25th, 2008 at 1:29 am
The poll should have included an option for growing real estate prices. This could happen if central banks inject too much money into the global financial system which suddenly starts flowing creating massive inflation and shortage of everything. I personally don’t think this is a likely scenario for 2009 but can’t exclude it either. In this scenario real housing price would go down, but nominal would be up.
December 25th, 2008 at 5:57 am
http://www.uniqueaccommodations.com/
40% vacancy rate in prime time skiing season!! HAHAHA yah right I’ll just rent it out till spring!
December 25th, 2008 at 6:00 am
Search downtown 110 out of 273 vacant
http://www.uniqueaccommodations.com/
By end of December look for 50% 1 outa 2
December 25th, 2008 at 6:16 am
How many of you think you’ll be employed through 2009 and what sector are you employed in?
December 25th, 2008 at 6:24 am
Matt; “How many of you think you’ll be employed through 2009 and what sector are you employed in?”
Wonder why buyers look at Granite Counter Tops? MY Christmas eve would have paid for more than a few! Say 10?
Well I will be because I am work rebuilding PLC panels in an elevator room so the residents have elevator service when they get up. How in the hell they can afford $500.00 / hr is beyond me! New Tower 2.5 years old!
December 25th, 2008 at 6:30 am
goddamn
I need to learn a trade.
December 25th, 2008 at 6:50 am
It’s working! I’m gone! I ate up 11 monthly maintenance payments on a 1 bedroom. Guess their landscaping and painting budgets will suffer. I am going to change my loggin ID to Stratatechy, too many people think I am a Property Manager!
. I wouldn’t go there be a really big demotion in wages. Have a great Christmas all!
December 25th, 2008 at 8:26 am
Merry Christmas Bitter Bubblehead Renters!
Here is my Christmas card to you and I hope it doesn’t get as bad in Canada as it is now in the U.S. All I want for Christmas is a return to fundamentals, but I don’t want to see innocent children suffer.
http://www.youtube.com/watch?v=meKdy8JS2-Q
December 25th, 2008 at 8:46 am
Predicting?
No thanks.
Too chaotic and confusing.
Bubble is over, natural forces will take over.
Just hope the human misery can be limited, few are even discussing such collateral damage which is often the far more important consideration.
December 25th, 2008 at 11:41 am
Matt:
I work for the feds – our negotiated pay package was rolled back to 1.5 percent a year (we were originally told 3.5 for 09 and 2.5 for 2010! Otherwise my job is safe (i’m a cop)
I guess, we should n’t complain given what the private sector could be facing.
I think next year will see a fall in Vancouver RE of between 15-25 percent by this time next year.
Happy new year – don’t drink and drive
December 25th, 2008 at 12:34 pm
Merry Xmas to all!
My guts feeling is:
- a 30% chance to loose my job, this is probably the 1st layoff in my life.
- a higher chance that vancouver jobless rate escalating to more than 10%.
- so the vancouver RE should be hit 30%.
Like an ant to prepare for winter, I have buffered enough cash for this to happen. So be enjoying the Xmas and the New Year.
December 25th, 2008 at 12:48 pm
Two predictions from me:
- 2009 will be the year we start to see a large number of foreclosures hitting the market in Vancouver.
- we will see a few developers hit the panic button and auction off their remaining inventory.
December 25th, 2008 at 1:22 pm
I voted for under 40% drop this year, some will hold out till 2010. After that we will hit my expected 70% drop. Commercial strata is collapsing fast. I have two prime spots in Yaletown which I am instructed to put in moth balls. I know they employ a total of 9 people. Small potatoes but that is only what I happen to deal with, and I only look after three commercial strata systems.
December 25th, 2008 at 1:58 pm
Merry Christmas from a happy, rich renter! I spent a few dollars over the last few months upgrading my accommodations so it looks like I pay a lot more than I do! I’m as snug as a bug in a rug, and I don’t bat an eyelash if someone drops a mug on my antique fir floors.
December 25th, 2008 at 2:02 pm
Anon in post #3 brings up an interesting point. I also think that high inflation or even hyperinflation is a valid possibility. The most notable proponents of this view include Jim Rogers and Marc Faber. Their basic premise is that US assumed an unsustainable amount of debt and will inflate its way out of it, one way or another. I don’t see what can prevent US Government from doing exactly that. After all printing money is cheap.
Having lived through the hyperinflation in Russia in the early 90s I remember that there was no consumer credit period, and at the same time GDP in USD terms was down something like 50%. Most transactions involving realestate property were conducted in cash, in USD, which was called “the hard currency.” I wonder what will be the hard currency for the North Amercan version of this inflation scenario?
It is quite clear that in the case of hyperinflation people holding the biggest possible mortgage with the smallest possible downpayment, and people holding some sort of “hard currency” will be somewhat better off. Real estate owners will be practically mortgage free, and renters will be in a less favorable situation having to pay rent indexed to the rate of inflation. I suspect however that the government will keep rent controls lagging the rate of inflation.
December 25th, 2008 at 2:05 pm
Stratas will be a disaster….and a predictable one. Every time I read Tony Giouventu, and moreso recently ,I get more concerns justified.
Condos will be the equivalent of the pet rock fad.
People will migrate to SFH homes, that market will become more stable… relatively speaking…one is master of one’s own domain.
ALSO:
Vancouver will be the worst RE investment across the board, I can smell the fiscal black hole the 2010 Olympics (and especially the Olympic Village ) will become.
If the Feds didn’t bailout Montreal re: the 1976 Olympics…which just recently paid it off…forget 2010 cap in hand. Also a Left -leaning Council aka traditionally ” tax and spend” just exacerbates it.
December 25th, 2008 at 2:18 pm
#3 Anon,
I would think that “Not drop at all” would cover the price increase case.
December 25th, 2008 at 2:19 pm
NO -LYMPICS Says: “Stratas will be a disaster….and a predictable one.” I agree the whole strata law system is incompatible with democracy. It would be the equivalent of all the Vancouver City Councilors owning large portions of real estate. If the mayor owned 10 blocks of a certain area would he be allowed to vote on improvements to that area? Guess what if your a strata council member the MORE you own the MORE you decide what is done and what is kept (in-camera). In my experience ALL major building deficiencies are kept OUT of the minutes because it would NEGATIVELY affect property prices. My suggestion to condo buyers; Ask for a copy of the minutes or alternatively support an up and coming fiction writer and tell him what you want written. Then buy it based on that! Same thing exactly except the latter means your contributing something to the arts!
December 25th, 2008 at 4:03 pm
There’s nothing really wrong with current strata system. Strata are not perfectly run, just like government and corporations are not perfectely run. I can see SFH in west side dropping further than condos, simply because the price/rent ratio is A LOT more out of whack, and densification won’t happen for at least a few more decades–when the imaginary rich asians don’t arrive after Olympics, the only thing justifying price would be rent equivalent. SFH command a higher price/rent ratio, but not that much higher than condos.
December 25th, 2008 at 5:09 pm
Re Strata:
It could or should work well in theory…(just like any democracy could or should, in theory.)
However, its the reflection of those that own a stake in the entire strata. If every unit is owned by resident owners , AND they have a good Strata Council Executive great .
My Armaggedon view is 1/3- 1/2 empty buildings, or too many specuvestors ,,……foreclosures…contingency fees paid(?), warranty terms and conditions complied with (?), due diligence to be on top of things…good property management companies…etc . etc.
In bad economic times I can see a lot of this going down the proverbial toilet. IMHO…Yaletown and area will be brutal, especially when the nearby Olympic Village opens, and the WoodWards site as well
December 25th, 2008 at 5:14 pm
The only thing i know for sure is that Gadwin will post too many times for someone with an IQ of 93.
December 25th, 2008 at 7:35 pm
Really Thompson? Too bad your crappy phd is not recognized here. And now you’re trying to fool us with a fool’s wisdom.
December 25th, 2008 at 9:38 pm
To everybody who voted #3 down: you have no idea what’s coming (even if it might not be coming in 2009). It’s tough to appreciate it unless you lived through it like “flip this #17″ has. The poll was about price. “Price” is a relative measure that defines how two things relate to each other in terms of value. One of these things happens to be fiat money. Even worse, it is money produced by fractional reserve banking. If our economy can uncontrollably produce too much houses and silly condos what’s to stop the same economy from producing too much money? Last time I checked, creating houses involved lots of actual work and physical assets like land and materials while creating money was a simple database transaction…
December 26th, 2008 at 1:25 am
Print money = Deficit. That cash is a bond, a promise, nothing more. Ya, we’re already there.
Fractional Reserving is a major part of the problem which led to this bubble, and all previous bubbles, and all future bubbles. It’s designed that way. Winners and losers, just be on the right end (ie. don’t piss money away on overvalued assets) and you should be just fine.
Regardless of that, a recession changes everything. So much so that printing money, lowering rates, devaluing your currency, won’t lead to another spending spree. It’s hard to phathom because things have gone so good for all for the last 8 years.
What we’re in for, we might never see again in our lifetime, at least not to this magnitude. It’s not “doom and gloom”, life goes on, the economy will struggle along and we’ll likely be better off a decade or two from now for it. If the right changes start now that is.
December 26th, 2008 at 1:37 am
One last point on the printing money topic, because it is a good one: Don’t forget what they’ve been printing money for. It’s not to filter down to buyers to increase demand. No, it’s to bailout some of the cornerstones of the economy, it’s a survival tactic. Don’t expect banks to lend as they have in years past. You won’t see subprimes again for example, or zero down mortgages. The money is filling a large void already. That is to say, it is already in debt.
December 26th, 2008 at 1:51 am
Anon:
To clarify my point: I agree that in the case of inflation nominal prices on the houses will inevitably go up following the rise in the overall price level. However, as previous historical precedents demonstrated, inflation rapidly destroys credit. It happens not only because lending rates are usually one step ahead of the inflation, but also because the willingness to assume debt is greatly diminished. When you are borrowing at 50% or 100% monthly rates (extreme case of hyperinflation, but valid as an illustration nonetheless) there is a huge risk which hinges on the estimation of future inflation. What if inflation rate abates for a month or two, from let’s say estimated 75% to just 25% monthly? In this case the borrower in just two months will have to pay in interest payments (in inflation adjusted money) amount bigger then their principal. Similar considerations apply to the lenders: their biggest fear is to underestimate the rate of inflation. In the extreme case of hyperinflation, lending and borrowing becomes so risky that the whole banking industry moves into domain of loan sharks.
But closer to the point. Given a hypothetical situation where inflation is rampant, credit is absent, economy is in the shithole, I think that the real estate prices will suffer (in inflation adjusted terms). This is because the real estate will only be purchased for cash, and people on average tend not to have that much cash in bad economic conditions.
So, is real estate a good inflation hedge? If it is a principal residence with 5% or better yet 0% down, locked at 6% for ten years, then it probably is. At current RE prices however, I would rather call it a speculation — because in the absence of significant inflation such property will not break even, i.e. renting is cheaper then owning.
I think that inflation is very likely to occur, both in the US and in Canada, but my conviction is not strong enough yet to act on it, and by action I mean drastic things like buying physical gold and assuming a 40 year mortgage.
BTW here is an interesting article on inflation vs. deflation question: http://www.financialsense.com/...../1203.html
(The Value of Money, BY JAIME E. CARRASCO CFP)
December 26th, 2008 at 2:04 am
flip this, you made me smile by including gold and 40 year mortgages into the same category. Seriously?
December 26th, 2008 at 8:28 am
Flip This:
That article doesn’t work for me for a few reasons. He glosses over a few VERY key points. WHY didn’t Japan manage to inflate it’s way out of trouble? They sure tried.
Canada is not the States, and our debt levels are not unmanageable. High and troublesome for sure, about time we had a good recession to clear some of the deadwood out of the system, but we aren’t in an impossible situation like they are. (Vancouver RE not included in that assessment. Canada overall is OK, here will crash hard.) The hyperinflation he thinks will happen, could easily leave Canadian dollar alone. Our recession is inevitable, with the currency and economic effects that implies, but not necessarily high inflation here.
The problem is not in “printing” the money, it is in getting into the economy without spooking debt holders into calling everything they can. Remember, far too much of the debt is in short term instruments. You think you’ve seen forced liquidation already?
Although he explicitly denies being a goldbug, everything I’ve seen from FSU ends up with goldbug talking points.
Going back to the original premise, remember that for many years all the players in the game, that is individual small investors, advisors, banks and other financial institutions, companies themselves (with regards to their stock price), etc, etc.
All were playing to the same outcome, a rise in asset values. Everyone wanted everyone else to accept that the current value was correct, and could be used as the base for tomorrows gains. When the TSX has an up day, everyone cheers and congratulates one another for a job well done. With everything rising together, everyone is happy, and that pesky little detail of real wages creeping down in terms of “real” dollars”, and plummeting in terms of asset values? Well, we told you to buy before you’re priced out forever!
True inflation affects wages as well as asset value, and I see no chance of that happening. Monetary injection that merely supports asset value, I don’t think can be sustained. At some point soon, the boomers are supposed to start liquidating their “vast wealth”, to turn their delayed consumption into real consumption in their golden years. You do the math. Asset prices fall, in relationship to consumption prices, and vice versa.
Inflation works just fine in principle to reduce debt levels, but does nothing to increase wealth. Deflation and debt default also clears out the debt overhang, but again, doesn’t increase wealth. Either just brings a balance back between asset values and consumption prices. Don’t be too quick to dismiss the possibility. Either, of course, moves wealth around, and destroys paper wealth. Those with real wealth, who are sensibly position, do MUCH better in deflation than inflation. Those are the same ones who have much of the financial clout to move markets.
Why are the central banks so terrified of deflation, if it is really so easy to deal with?
Your linked FSU article is pretty short on facts, and long on rhetoric. Compare that to what Mish, Denniger, Ritholtz, Roubini all have to say on the subject.
All that said, I’d still rather have my money in gold than leveraged Vancouver RE! Better yet, liquid and ready to jump the right way. The right way is still to be determined. All I’m sure of is this is not a little blip, and we get back to “normal” any day now.
My 5 cents. (Inflation everywhere!)
December 26th, 2008 at 9:15 am
True inflation affects wages as well as asset value, and I see no chance of that happening.
good point ac:
as we slip into recession wages will not
be going up for the vast majority of income earners…. anything else is wishful thinking.
December 26th, 2008 at 9:24 am
Article:
Japan’s industrial output plunges
http://news.bbc.co.uk/2/hi/asi.....799908.stm
There is no sense re-inventing the wheel…..
Simply observes the solutions tried elsewhere. As many have noted…Japan has been trying for years, but still can’t seem to find a way to dig itself out of an economic hole.
The rest of the world has now caught up to Japan (???)
What I foresee is much like that theoretical question many of us were asked in High School about the raft with survivors, decisions have to be made re: who stays and who to toss over.
Example: Auto Industry
Unsold car inventories pile up…yet soon they will be looking at next years model.
Regardless, The Feds won’t let the auto industry crash, there are thousands of auto workers aka VOTES in Eastern Canada…those hordes of union members feeling they have a right of entitlement to exhorbitant wages,pensions and benefits will be a force to be reckoned with, rightly or WRONGLY .
There will be band – aid solutions all over, but I think a lot will be tossed overboard, (if they were ever let on in the first place ).
Re BC
The Feds and the BC Gov’t will focus on where the bandaids will best embellish the 2010 Olympics. The fact that we have a major economic crisis one year before the Olympics could make 2010 stand out amongst all others…the IOC may be in for a rude awakening on the global front re bid cities and ” No thanks ” attitudes.
Alberta: ? = Ouch
Lots of oil…too much invested in the Tar Sands, but will have to keep oil flows going to derive revenue. Can foresee a lot of secondary industry (ie plastics manufacturers)shutting down
Quebec: Not sure what they do there…..mostly Bombardier? How much more Bombardier crap can BC absorb for the useless SkyTrain ?
Maritime Premier Danny Williams will not flip to “have not” status to milk the Feds more….likes to have it both ways even when Oil was doing just fine
Thats politics !!!
December 26th, 2008 at 10:08 am
I’m amazed. Bullish realtors and flippers will hang their hats on anything.
Now the are looking for inflation to be their hero.
They live in this fantasy world in which it is believed politicians can successfully engineer inflation just enough to get them out of this pit, but so much as to cause higher mortgage rates.
My predictions for 2009 is a lesson they will never forget:
1) Governments won’t be able to engineer a recovery
2) The metric which work now, won’t work in the future, as rent revenues will be going down
December 26th, 2008 at 10:24 am
NO-LYMPICS: TransLink is buying more Bombardier SkyTrain cars. Bombardier’s building them in their Mexican plant.
December 26th, 2008 at 10:52 am
http://news.yahoo.com/s/ap/200.....an_economy
The worlds second largest economy is in free fall, with factory output plummeting 8.1% !!! . This shows how the economic Tsunami is growing in ferocity.
I voted for a price adjustment of more than 50%. I have experianced recessions first hand. Mass job loss is being under-reported, the government is months behind in it’s honesty.
If you have a service industry job you’re most likely toast. Jobs in every other sector will follow. It doesn’t matter if you’re a junior lawyer, retailer, entomologist or delivery driver. Construction jobs will be lost in the tens of thousands. This is not idle speculation, it is what actually happened in the three preceeding recessions of the 60′s , 70′s and 80′s.
Expect the worst, and be happy if you don’t end up on a street corner with a shopping cart. If you don’t have at least three years of cash savings chances are you’ll lose your shelter, owned or rented. Don’t believe it?, go to the archives of the Vancouver Sun and check out the goings on for the bitter winter of 82/83.
December 26th, 2008 at 11:16 am
BTW, thanks for the 100 grand but I think I’ll save much much more by waiting. This is not ‘value’ being lost , it is just ‘froth’ being swept off the bubble top.
FYI: Don’t count on China for help. Ex; Power Industry profits down 84%!!!!
http://www.bloomberg.com/apps/.....refer=home
December 26th, 2008 at 11:21 am
Post # 34:
So…are you telling me Mexicans speak French ? LOL
We can’t afford any more of this Bombardier white elephant, hopefully it will go broke so we can switch to more cost effective technology. Just curious if Transit may be overwhelmed by people who can’t afford their vehicles. Buses and LRT trump the Bombardier crap we bought.
Post # 35
Unless mistaken, Japanese firms have thinner margins and rely on Volume. Hence, if THEY are hooped, there is another dead canary in the global economy mine.
Was also reading about Jaguar and Land Rover…the Indian company that bought them from Ford is asking the Brit Gov’t for bailout $$$$. I think luxury items like Jags and Land Rovers are toast.
Also saw on CNN that Lottery revenues are down in the US. This was previously viewed as recession proof…yet also a tax on the poor. I sense this will be a trend all over…and moreso an indication re how bad things are getting. The vicious circle is Gov’t itself got too hooked on Gaming Revenue to fund many Gov’t programs, and these programs will suffer.
PS Should we send out a search party for Al Gore?
He sure has STFU….his ilk/ type only crawls out from under a rock when the $un is $hining… gee what a coincidence.
December 26th, 2008 at 11:26 am
speaking of India, the recession in the west is spreading.
http://www.thaindian.com/newsp.....35296.html
December 26th, 2008 at 11:26 am
If only the REBGV had the power of a Communist state behind them. Instead of ads in the newspaper, they could use loudspeakers to make us bears abandon our apartments to buy condos.
http://www.liveleak.com/view?i=68f_1230314812
December 26th, 2008 at 11:27 am
think you’re safe?, think again
http://news.cnet.com/8301-13505_3-10128880-16.html
December 26th, 2008 at 11:30 am
More good things to think about
http://www.boston.com/business.....s_its.html
It appears that there is no bottom in sight. Look out belowwwwwwwwwwwwwwwwwwwwwww !!!!!!!!
December 26th, 2008 at 11:36 am
Canada’s housing market turned to favour buyers in ’08; prices to decline in ’09
http://www.google.com/hostedne.....Oa-YQm4twQ
The decline is going to be significant, but it’s not going to be a freefall,” Tal said
Sory Tal, you are wrong again, it will be a freefall.
Tal does not have a good forcasting record, he is Muir Lite.
December 26th, 2008 at 11:58 am
“Expect the worst, and be happy if you don’t end up on a street corner with a shopping cart. If you don’t have at least three years of cash savings chances are you’ll lose your shelter, owned or rented. Don’t believe it?, go to the archives of the Vancouver Sun and check out the goings on for the bitter winter of 82/83.”
I’m ready for a lot of things, but this is blowing it out of a proportion. Homelessness was actually an uncommon thing in Vancouver at this time.
And yes, I am old enough to remember 82/83. I remember friends parents divorcing, people moving away from Vancouver, evening news showing job seekers crowding employment centres, my Grade 7 school camping trip being canceled due to cutbacks, people marching in the streets against the Provincial government “restraint” program, teachers telling us we HAVE to go to university or face unemployment, food banks appearing for the first time, etc.
BUT society did not fall apart, homelessness was rare, and nobody starved.
People pull together during hard times. Be good to your family and friends. Look out for them and they’ll look out for you. You can always move in together, if necessary, and share meals.
December 26th, 2008 at 12:04 pm
Maybe Beedie and Gaglardi should drop their Lawsuit against Canucks owner Aquilini.
The Canucks tickets are overprices, mosty due to season tickets owned by corporations. When these sales start to fall off, due to belt tightening…Aquilini(who has major exposure to Real Estate) may have to sell and sell cheap. I wouldn’t be surprised if Gov’ts no longer allow them to be tax write-offs…
Major league sports franchises will be hit hard..nothing is immune form this Tsunami, especially overpaid Sports Monkeys.
December 26th, 2008 at 12:39 pm
#43, Homelessness was rare in the recession of the 1980′s ? Sorry to differ but the 1980′s were the genesis of mass permanent homelessness. This was when the government was moved by socialist insanity and started closeing all the mental heath centers and hospitals. Remember how they were announcing how they were going to replace institutions with community health workers? trouble was , when all those mentally incapacitated people hit the streets they couldn’t remember or didn’t have the wherewithall to take their medications. The NDP thought they were going to give the unions a gift of thousands of new dues paying slaves to consolidate power in Victoria. All the program did was torture the less fortunate who were turned out of the hospitals in the thousands, mostly to fend for themselves.
Homelessness was HUGE in the 1980′s. Being in Grade seven, you would have been sheltered by your parents from reality. You should have been there. it was worse than you can imagine. Getting a camping trip cancelled is nothing like going hungry or having your dreams crushed, not even close.
The program was started by the So-Creds and then compounded by the NDP who put the final nails in the coffin of mental health care in this province. They are all a-holes IMHO. Homeless numbers were exacerbated by the recession however, take the example of the 70′s and 80′s. 1963 was the beginning of a long vicious recession.
On Granville, Robson, Fourth ave, all the parks and campuses in the 60′s became hobo camps of newly poor people sleepng in the streets and cramming into ‘crash pads/flophouses. Some of these morphed into communes as the years of poverty dragged on. The whole hippie movement was based on mass poverty, although it’s memory has been romanticed by the safe middle class kids who were living in the warm bosum of a mommy and daddy, sheltered from the storm. They grew their hair long and wore funny clothes because they saw us on TV.
I was one of those people who lived in the street. patched ragged clothes and long stinking hair became a badge of honour and quite normal otherwise. Of course those who think of the 60′s as romantic and cool weren’t there. We were the generation that created the greatest number of victims who never recovered. The sub-urban girls who came into town to experiment with free love was a bonus though. It’s a good thing that crabs and lice were the worst things going around. If AIDS had been around we would have had mass extinction.
People pulled together allright, but in every recession victims are claimed and many many many don’t ever recover.
I can tell you the same stories about the brutal recession of 1973 but why be redundant.
Now , you may remember the mass homelessness
December 26th, 2008 at 12:53 pm
Econ Student #33, was your comment posted in response to #3?
If so, you need to re-read it. I am not suggesting that real estate in Vancouver could possibly go up in value. What I am suggesting is that Canadian dollar collapse can lead to higher prices for everything. This cannot be excluded as a valid possibility, and my point was that the poll was biased by suggesting scenarios in which both of the following happen:
- real estate goes down
- Canadian dollar does not go down faster than real estate
Regarding governments view on this- they are looking to keep everybody “ok”. When lots of people have no savings and debt the only way they are going to keep everybody in the “ok” state is by making sure that their debts are managed down to the point where mass defaults are avoided. If this means that people with savings will lose their savings, this does not really matter for the government because those people will still be “ok”. As long as most population is “ok” there will be no revolution to replace the government… So yes, I believe that substantial inflation is unavoidable in the next 2-3 years. Whether we are talking 30%, 50% or some number with many zeros I do not know.
December 26th, 2008 at 1:24 pm
Homelessness has always been there, but it didn’t take off until the late 80s (mostly due to the deinstitutionalization you mention).
In 82/83, there were certainly a lot of people in difficult housing situations (I remember an Aunt having to move in with us after she lost her job), but true hardcore homelessness was still around the corner. In 85-86 I started to see dumpster divers. Mass numbers of people sleeping on downtown sidewalks was not a common sight until the 1990s.
Losing a camping trip was certainly not the end of the world. But it was a first of many cutbacks, with the more serious ones to come.
The worst thing I saw as a 12 year-old was divorce and break up families. I didn’t happen to me but I could see friends hurting. At that age, it was a big deal to their social development.
December 26th, 2008 at 1:25 pm
downtown = DTES
December 26th, 2008 at 1:37 pm
#46 Why aren’t you considering the prospect of mass deflation?. Too scary? The M3 statistics , last reported in 2005 indicated the money supply being inflated by 14% p/a. If you take Russia for example which inflted the M3 by 50 p/a it has now devalued the ruble.
The inflation train has derailed and now deflation must take place in order to reprice assets. I think deflation is more politically palatable than reveluation to western governments who at that point would have to admit failure.
December 26th, 2008 at 1:49 pm
#47 Maybe you began to notice more homeless because you were entering your adult years and your perception was changing with the new experiance of being an adult?
It’s true, homelessness has allways been a factor in Vancouver to some extent. It was centered around Pidgeon Park when we were kids. The bums would buy us cheap wine. As I said though remember, “recessions create victims who never recover”.
After the recessions of the 60′, 70′s and 80′s and the Machiavellian political moves to close the mental hospitals the cumulative effect was an entire generation steeped in poverty and huge numbers of people on the street. After this recession I expect the homeless population to at least double.
I also said that these events shaped my life, I am ready for the worst, expect it, know how to survive it and welcome it. I feel right at home.
December 26th, 2008 at 1:50 pm
Proof of 0.5% vacancy in the rental market:
Metropolitan Towers (Seymour/Nelson) is offering tenants a $200 bonus for referring new tenants.
Tight rental market indeed.
December 26th, 2008 at 1:51 pm
Yes indeed if Central Bankers could have, they would have reflated.
The reflation tool is broken. Those who have debt loads geared for infation are screwed.
Overextended landlords, bend over, and yes it will hurt, I say with pleasure.
December 26th, 2008 at 1:58 pm
AC – you forgot to mention Peter Schiff, who has been probably the single most prescient forecaster of the current market disaster. Not only does he predict massive inflation, but he also explains why the US will not follow Japan’s post-bubble path.
According to Peter, Japan’s population had (and continues to have) an enormous saving’s rate, which meant that all the government’s attempts at economic stimulation (both monetary and fiscal) were mopped up by the Japanese people themselves. Rather than spend, they chose to save. Furthermore, the nation was and is a net creditor, so all of those Japanese bonds the government pumped out stayed in the country. In the US, they have a negative savings rate and a massive net foreign debt. Unlike Japan, the US has been running a huge trade deficit for decades. They have been buying on a massive credit card called the US Treasury Bond, and very soon, those IOUs will come flooding back into the US, buying up everything in site and leading to huge inflation.
There is no way around it… US gov’t debt is massive and growing at warp speed – the government is pumping out more and more every day in an attempt to “stimulate” the economy with even more debt. There is currently a bubble in the bond market, but that’s a very temporary “flight to safety” that every bank and financial institution in the world is caught up in. Once the panic settles down and the world realizes they’re holding a bunch of low-yielding worthless paper, the final bubble (ie the US treasury bond bubble) will pop and the US dollar will be history.
December 26th, 2008 at 2:18 pm
Yalie:
Just in briefly. Check out peter-schiff-replies-to-deflation and the linked posts that started it, including the FSU article by Schiff.
Gotta go, more later.
PS. Seymour is AMAZING. So much snow!
December 26th, 2008 at 3:03 pm
What does FSU mean? I tried to google it, but mostly got university names. I can’t infer its definition from the context it’s used in either.
December 26th, 2008 at 3:12 pm
alexcanuck (post #30):
I agree with you that Canada is more fiscally conservative, however if USD is devalued (which is what they are trying to accomplish by printing money), Canadian central bank will have to follow suit. Indeed, with 87% of exports going to US, and with exports being 45% of Canadian GDP what other choice does Canadian Central bank have?
Regarding Japan: That is true, they did have deflation throughout the nineties, but it is important to note that crash in Japan started when it was a creditor nation, and they had a positive trade balance. US on the other hand is a huge debtor, it might not be able to find enough buyers for T-bills to finance its growing 1 trillion dollar annual deficit. So, the T-bills will be purchased internally by freshly printed USD. Therefore US default will take shape of currency devaluation against other currencies, and against commodities. Internally this process will be seen as inflation. This inflation will manifest itself in a stagflation type of environment as oppossed to the inflation cased by an overheating economy and rapidly raising wages.
Here is an interesting quote on the subject of the US default: “Countries can and do go bankrupt. The United
States, with its $65.9 trillion fiscal gap, seems
clearly headed down that path. The country needs
to stop shooting itself in the foot. It needs to adopt
generational accounting as its standard method
of budgeting and fiscal analysis, and it needs to
adopt fundamental tax, Social Security, and
healthcare reforms that will redeem our children’s
future.” — Laurence J. Kotlikoff, Is the United States Bankrupt? http://research.stlouisfed.org.....likoff.pdf
December 26th, 2008 at 3:22 pm
mino3, post #55:
My guess it refers to the link: http://www.financialsense.com/...../1203.html ( FINANCIAL SENSE ® ONLINE)
December 26th, 2008 at 3:44 pm
what other choice does Canadian Central bank have?
They need us more than we need them. Energy. We don’t HAVE to hold a peg to a diving currency.
No matter what, this will be painful. Exactly how it plays out is VERY important. Keep it coming.
December 26th, 2008 at 3:55 pm
#56, Canadian dollars are being devalued at exactly the same pace as their US counterpart. The current M3 in Canada as last eported was 13.4% p/a. Meaning? , Every year the CDN dollar purchasing Parity Power recedes an additional 13.4% by adding 13.4% more paper money into the system. This makes every dollar in your pocket worth 13.4% less valuable evry year. Effectivly , you are being swindled.That’s real inflation !!!!!
As has been the practice for many years ( particularily under the Liberals) the Bank of Canada will aggresively print CDN dollars to sell into the market at a loss to force the CDN dollar down against all currencies. This is how they have kept all those anti buisness anti competition corrupt unions in Ontario and Quebec afloat for so long.
December 26th, 2008 at 4:30 pm
“#46 Why aren’t you considering the prospect of mass deflation?. Too scary?”
Your first mistake is that you assume that i am not considering something. The second mistake is that you assume that your assumption is a fact and then you look for reasons- like “too scary”. Stop assuming.
“The inflation train has derailed and now deflation must take place in order to reprice assets.”
What are you smoking? The “inflation train” is called “Bank of Canada” along with the fractional reserve system that this institution oversees. Neither Bank of Canada nor the fractional reserve banking system have collapsed yet.
“I think deflation is more politically palatable than reveluation to western governments who at that point would have to admit failure.”
Hope you figure out what’s going on before you run out of room in your pockets to hold million dollar bills.
December 26th, 2008 at 5:01 pm
Hope you figure out what’s going on before you run out of room in your pockets to hold million dollar bills.
Inflation may yet prove to be the big problem. Right now it looks like deflation is happening. That may change, and may change quickly. But if you are dismissing the possibility of deflation, and just yelling at and insulting anyone with an open mind, I would suspect you are the one smoking. Unless you think the meaning of inflation is the CPI, in which case you’re so far out of the loop you should stop talking and start listening. It may do your retirement fund some good.
December 26th, 2008 at 5:02 pm
Hi. I don’t know why four people down clicked my Christmas card, but maybe it is because they agree with the bailouts to the financials. The criticism of the bailouts was the main message of my card.
On the other hand, the down-clickers may have disagreed with the angry tired teachers message that children are suffering and some may have interpreted this to mean that the teachers want a bailout for the people who took out subprime and alt-A loans, but that was not the intention of why I posted it. My intention was just to say the bailouts to the financials who caused this mess is WRONG. Why should the ones who caused this mess be bailed out while so many children have been left in stressful situations? The poor and uneducated were targeted by the mortgage companies according to a CBC radio documentary I heard. They actually went and concentrated on targeting poor neighborhoods in the states to take on these loans. They harassed people into signing — wouldn’t leave them alone.
I think deflation is here for consumer goods such as houses, cars, oil, and electronics but inflation is here for food, coffee, fruit, vegetables and toiletries.
So, if someone were to hedge his or her bets it would be ideal to buy into commodities such as suncor and uranium for power since China and India are growing and need the energy and power. They will increase a year from now.
However, for deflation, it is better to hold CASH so you can buy up some real estate and cars, boats, electronics, etc. IFF you need them in the near term.
Also, buy some hard gold in case things get really bad and you need to buy some coffee and staples in the short term in the case that our banks fail.
So, Merry Christmas everyone and thanks to all of you for cyber friendship over the years.
December 26th, 2008 at 5:08 pm
Inflation?
OR Deflation?
Keep in mind this is a global bubble
All Gov’ts have to synchronize their efforts.
Anna ONE anna TWO anna THREE….
Everybody in Gov’ts everywhere Suck OR Blow at the same time !!!
December 26th, 2008 at 5:25 pm
“Right now it looks like deflation is happening.”
Where does it look like it? What is happening is excess inventory liquidation. This is not a monetary development. The monetary development that is going on is inflation.
“just yelling at and insulting anyone with an open mind”
What are you talking about?
December 26th, 2008 at 5:47 pm
What is happening is excess inventory liquidation.
Are you talking retail prices?
I had in mind more that virtually every index of value in the world, with the notable exception of gold, is down. That means the value of a dollar is up, doesn’t it? My dollar can buy more than it could 6 months ago. Consumer prices are but a small aspect of inflation, and even they are flat or falling. I don’t expect consumer basics to have the devaluation that asset prices will, especially as the past decade or more of high inflation went mainly into asset values.
You can term it asset meltdown or forced selling if you wish, but it just does not look like inflation. This may change, I’m very open to that possibility, but right now I am betting that assets continue to decline, so I hold no assets. Cash and bear funds have been very good to me this year.
This may change, if so I will change, but right now cash is king!
December 26th, 2008 at 6:06 pm
alexcanuck, the poll was about 2009 real estate prices. What I am saying is that in the next year, two or three we might witness a situation where nominal prices go up because money injected into fractional reserve system and currently stuck there (i.e. banks are not willing to lend, borrowers are being more careful) gets unstuck and starts flowing creating a massive surge in available dollars.
What you are referring to is not simply an asset meltdown, it is a debt crisis. Debt is the foundation of this monetary system and debt problem must be fixed. In the process of “fixing” this debt crisis central banks will inflate money supply. Creating inflation is the definition of Bank of Canada job.
Anyway, since you agree that significant and noticeable inflation is very much a possibility as the result of what is going on now, it seems like we are in a violent agreement
December 26th, 2008 at 6:35 pm
Here is an interesting article/discussion I found on Greater Fool’s site about how the Big Three took the pension money contributed by the workers in the 1980s and 1990s when the companies were making billions and invested it overseas and how the overseas capital will be protected from bankruptcy leaving the N.American pensioners s.c.r.e.w.e.d.
http://investorshub.advfn.com/.....d=34385578
December 26th, 2008 at 8:53 pm
Does anyone agree with the hypothesis propounded in this article that the US currency is the centre of all currencies?
“Jack: The third reason is the flight to the center. Think of the world currency market as a solar system. The dollar is the sun; the other currencies, the planets. As the system expands, investors migrate from the core currency, the U.S. dollar, to the inner planets — currencies like the euro, the Swiss franc or the pound.
And as the system expands even more, they migrate to the next tier of currencies, like the Australian dollar or the Canadian dollar … and then, still further, to the system’s periphery — outer planets like the Brazilian real, the Mexican peso or the South African rand. At each step of the way, they take more risk with less stable economies, use more leverage, go for bigger returns — all fueled by abundant dollar credit.
Martin:
OK. What happens when the global economy contracts?
Jack: Precisely the reverse. As the global economy begins to come unglued, they rush back to the center, creating a massive flight back to the U.S. dollar. They have no love affair with the dollar. They just see the peripheral economies going down and they dump those currencies. These are the first risky investments they sell, almost invariably switching back to U.S. dollars.
The U.S. economy, despite all its troubles, is still the dominant world economy. Militarily, it’s the only remaining superpower. Financially, it’s still the world’s capital. So it’s natural that when investors are running from risk, they rush back to the dollar, bidding up its value.”
http://www.marketoracle.co.uk/Article7939.html
December 26th, 2008 at 9:43 pm
Yalie,
You are so right. US is in major shit with their debt. We will see double digit interets rates soon.
December 26th, 2008 at 10:02 pm
#62 Lilypad, I think you’re on the right track with the macro. The energy story going forward is a no brainer. Eco 101. There was a very good 1 hr doc on BNN re: nuclear power generation and the uranium mining story this morning. I’m sure you can pull it off the archives.
The upside of this financial scenario is that it has put some very good companies on sale ; one of which you mentioned. The uranium story is very compelling. We have had a rough ride recently on the investment side but it is not company or industry specific/related: the recovery in this area will pay handsome dividends longer term. IMHO
Anon #60 Keynsian economics modelling such as the monetary expansion (you seem to be alluding to) has produced what is now being referred to as a ‘failed experiment’. To monetize debt and re-inflate at this point is to encourage hyperinflation, Weimar Republic style. As I said earlier, there is a global process occuring to deflate asset prices, you may have noticed the concerted efforts to curtail inflation for the time being by central governments. The fact that this recession was so sudden and global shouldn’t be a surprise to anyone. They are doing it on purpose. You don’t think they play peaknuckle at those G-20 meetings do you?
The inflation train has run out of track. Ignore this at your peril. I can tell you right now that the smart money is on the sidelines.
An old analogy in the markets is ” Money eventually finds it’s way back to it’s rightful owners”. That is precisly what is happening now.
December 26th, 2008 at 10:16 pm
I’ve been checking-out the residential real estate in Palm Springs this past week (I got out of Vancouver just before all the snow started to fall). The snow is apparently still falling in Vancouver and real estate prices are still falling here in Southern California. In fact, the average price of a single family home here in Palm Springs fell from $319k in December 2007 to $276k today. That’s a pretty decent decline considering that last December people were already hurting from the declines in 2007.
Anyways, I guess it makes me suspect that Vancouver’s market will fall for a longer period of time than I had hoped. I was hoping that we would find a bottom by early 2010 but it probably could keep falling beyond that date.
December 26th, 2008 at 10:46 pm
realpaul,
Speaking as someone who is relatively young and has not experienced even a minor recession while being a member of the general workforce, I appreciate you sharing your anecdotes regarding past recessions and find them very interesting. I’m risk adverse by nature and happen to be good with numbers, so I pursued a career in accounting (recent CA grad) in a conscious effort to have one of the so-called ‘recession-proof’ jobs. I’m not so arrogant to believe that my job will be guaranteed to exist through the upcoming turmoil, but the impression I’m getting from you is that nobody is safe. Is there any truth as to those who are accountants, nurses, etc. are safer than others? Would it be possible for you to expand on the demographics of those you encountered in those days on the street?
And further, might I suggest that you submit a discussion topic to Pope with a few stories, in hopes that others may share their recession experiences for the benefit of those of us who are ignorant as to the upcoming day-to-day changes for life in Vancouver.
December 26th, 2008 at 11:34 pm
FSU = Financial Sense University
http://www.financialsense.com/...../1212.html
December 27th, 2008 at 9:12 am
Peter Schiff has had some mention recently. I’d like to point out he has been stunningly wrong on the past few months with regard to currency moves and “Decoupling”, and the funds he manages have suffered as a result. He may yet prove to have been right in theory but wrong only in timing, but at the moment he has lost a lot of credibility in my mind.
Have a look at this chart of central bank reserves, and the growth history.
Lower in the article, he talks about and links to some Schiff stuff, but my point is the chart. How can you see current and future inflation in that? PAST inflation, well, YEAH, but it seems to have abruptly stopped.
BTW, that immense past inflation was largely masked by the impact of falling consumer prices caused by manufacturing efficiencies and China, helped along by an insistence that the CPI is a true measure of inflation by Governments and media. (Both knew better, the latter at least should have shouted it out.)
Now that further price drops will be very difficult to achieve, and IF deflation is here, expect to see consumer essentials prices with mild upward pressure, consumer discretionary with “Craigslist pressure” down, and asset values with MAJOR downward pressure, as that is where the past credit bubble/inflation has largely parked itself. IF deflation is here; I hold an open mind. It looks like it right now, it really does. That may change, but to dismiss the possibility as absurd could be very dangerous right now.
December 27th, 2008 at 9:25 am
I realize that there is a problem with homelessness in Greater Vancouver. And I also understand that many of the homeless are mentally impaired and should be helped at no cost to them and should be shouldered by the taxpayer. However, when we were having our economic boom I was (and still am) constantly accosted by beggars sitting outside stores who I KNOW just wanted the money for drugs. People were begging for people to come work for them and these people preferred to get high instead. And people were giving them money which only makes the problem worse. I suggest that if people stopped being such bleeding hearts and stopped giving these drug addicts money then they would be forced to get a job. I have no sympathy for these losers. Help the mentally ill and screw the addicts. (They should issue I.D. cards so we can tell the difference.) If one more of these self indulgent lazy wastes of space breaks into my car I’m going to go ballistic!
Sorry, I just hate meth heads.
Oh yeah, Merry Christmas and peace on earth and all that.
December 27th, 2008 at 9:50 am
Lily Pad #68:
I agree with most of that article, up until he turns so bullish on the US$. I think the amount of treasuries held overseas may start to come home, that is, get turned back into the local currency of the countries that hold them. Primarily China and the Gulf States. In addition the new liabilities the US govt has taken on in the bailouts can only add to the currency devaluation expectations for the US$. All that adds up to selling pressure on the US$. At the same time, all currencies, US included, have deflation pushing them up. So I conclude it is not so simple and easy as Wiess makes it out to be.
The US is in a lot of trouble, and the real economy in the US is probably more distorted than anywhere else in the world. In the article they talk about the trillions of dollars the Eurozone has loaned, very true, but the entire financial sector in Europe could go up in flames, and the real economy would stumble a bit, but then pick itself up and continue on much the same. They can get on fine without the rich! Much more of the economy there is producing and using the things you need everyday, that is the advantage of having a lot of poor, not too much frivolous, discretionary activity to suddenly disappear. They kept more manufacturing there, held on to the old fashioned idea of buying only what you need, and then buy high quality that will last.
I currently hold some US$ bear funds.
December 27th, 2008 at 9:58 am
Saw on the news that California, one of the world’s top 10 economies, is within 2 months of going broke.
Go Green Governorator Schwarzenegger is pulling back on the enviro-throttle, stating they should create work with more vehicular friendly projects(highway improvements etc.)
December 27th, 2008 at 10:15 am
re: U.S. Dollar:
I have given up on making “logical” sense why the US dollar tends to be quite strong historically ….even if it is one of the world’s greatest debtor nations.
My fall back rationale is its military superpower status aka relative political stability/ relative democracy. As World Cop….the U.S. has expanded its influence elsewhere and will continue to do so. All the aforementioned has bearing on the value of the US dollar.
The same rationale explains why Russia would not be a strong currency. Only twice in my lifetime have I seen the Canadian dollar worth more than the US, and both times were short – lived.
Canada always has and always will follow in the US jetstream.
December 27th, 2008 at 10:24 am
HHH “However, when we were having our economic boom I was (and still am) constantly accosted by beggars sitting outside stores who I KNOW just wanted the money for drugs. People were begging for people to come work for them and these people preferred to get high instead.” That scene will probably change drastically by next winter. Unemployment reaching 10 % in the city will triple the homeless and panhandling will no longer support any drug habits as it is hard to panhandle when most people on the street are in the same or worse circumstances. Security guards will be one of the few “careers”
that is a growth industry. It will be like Africa where it was a rule of thumb five years ago to hire a personal vehicle guard every time you parked anywhere. So don’t worry panhandlers will go extinct!
December 27th, 2008 at 10:31 am
Or maybe it will be that you can pick out a panhandler to give some food to, who will be grateful for the food because it is not drugs they really want.
I gave a big donation to Union Gospel Mission this year.
December 27th, 2008 at 10:36 am
Hanna,
You can’t separate the drug-addicted from the mentally ill. A lot of drug use is the mentally ill self-medicating. Also, even though there were lots of jobs to go around, very few employers were ready (or able) to take-on street people.
You are right, though, when you refuse to give to panhandlers. Its better to give to the Union Gospel Mission/Salvation Army/local food bank. At least you know your money is going to help these people with basic needs.
December 27th, 2008 at 11:06 am
Happy New Year Everyone….here are the closing gold prices in USD since 2,000
2000 — $273.60
2001 — $279.00
2002 — $348.20
2003 — $416.10
2004 — $438, 40
2005 — $518.90
2006 — $638.00
2007 — $838.00
2008 — ?
It will be interesting to see if it keeps rising inverse to home prices as it has in the last two year (U.S.) and if so making it totally obvious that it has performed better than any other investment out there. Will this trend continue? Will silver outperform gold?
These are things to think about as one looks for a place to park their savings while waiting for the opportune time to shift back into real estate in say 4 or 5 years (guessing of course)
December 27th, 2008 at 12:02 pm
Madoff’s ($50 Billion Ponzi scheme) Victim List
http://clusterstock.alleyinsid.....lient-list
December 27th, 2008 at 12:19 pm
10 Reasons Vancouver will become the new Financial/Trade centre of Canada…
1/
Matts Sundin carries with him the Captaincy, the insignia of the new Leadership from Toronto to Vancouver.
2/
Vancouver has three ski mountains overlooking it’s city, Toronto has none.
3/
Vancouver never gets snow/rain and it’s always sunny/mild.
Toronto needs brick homes for winter and central air for humid summers.
4/
Vancouver has culture like Wreck Beach while Toronto can only attract Off Broadway.
5/
Toronto has a phony Greek Village, they serve Pork instead of Lamb with bread buns while Vancouver’s Stephos serves Lamb and properly oil smeared pita.
6/
Vancouver is closer to Maui whileToronto is closer to Saint Pierre and Miquelon.
7/
Vancouver has city casinos while Toronto has none.
8/
Vancouver has the Olympics…sorry Toronto.
9/
Vancouverites live to a ripe old age of 100 due to its healty climate…sorry Toronto.
and 10/
Vancouver has been quietly relocating all the power brokers from California and Toronto….shhhhhh
December 27th, 2008 at 12:19 pm
#74 Alexcanuck. Bingo
#72 No Rush . I don’t want to depress you, I get no pleasure out of anyones pain, I’m neither bull or bear, just a realist with a long memory. There are many people who make it through recessions alive. These are generally people who have many irons in the fire, many contingency plans at work simutaneously and specialty educations with saleable skills as well as seniority. I began to refer to it as the ” F-U Resume”.
A big underlying factor in your survival is ‘ do you have a big nest egg to cushion you’ through readjustment periods which you may encounter. I do remember some interviews on TV of persons in the unemployment line with real rare specialties which had no practical application , like a Ph.D in Entemology.
As a junior CA you may at least be able to find part time gigs if the worst scenario unfolds. A freind of mine at the time was a CGA ( who couldn’t get work with a B.Sc in enviornmental engineering, duh)and he kept books for some local pubs, picking up a cheque here and a cheque there. Unfortunatly for him the pressure turned him into an alcoholic and he lost everything. If you’re a junior guy in any industry sector though it may be tough to find or keep a full time gig, so keep your cash up and debt down for awhile.
Huge numbers of people are/will be dislocated from the work force. It happens in waves often brutally, and then moves on to another sector, as if the recession is a beast with a cruel sick mind of it’s own.
One area which doesn’t fare badly is unionized senior government workers, go figure. Although during the 80′s recession these people were affected by revolving redundencies. Many of the senior workers were unscathed, fairly or not. No meritocracy in the union movement, favouring the entrenched and brutalizing the young workers.
Late recession behaviour by the government is increased hiring numbers. Allways too late for many. It does nothing exept create another layer of parasites for the union movement to manipulate. The cumulative effect of this is something like 12% of the CDN pop now works for the government. Socialist economics at work.
December 27th, 2008 at 2:13 pm
Thanks realpaul, that confirms what I’m expecting. Personally I’m in a fairly good position with no debt, but with only meager savings since I shed the student title only recently. I meet your list of qualities to possess to weather this storm, with the exception of seniority, and I can’t help that at this point.
That said, I’m in a FAR better position than the vast majority of my peers. I cannot name a single friend/co-worker/associate in my age group that has not purchased an expensive car/condo/boat/etc. at the very moment their income was sufficient to make the monthly payments. You and all the other older posters here would be surprised as to how fiscally reckless and arrogant they are, since as I said we’ve had absolute job security, up until now. I expect it will be a great, self-inflicted tragedy… a generation of people who will be bankrupt and homeless right at the beginning of their adult lives.
And yet the headlines only ramble on about how due to the market crash, the boomers have to suffer through another terrible five years of working their cushy management jobs before they can retire. Again, this is a common topic of moaning that I hear from the higher-ups at my office. It’s not that I’m bitter about this, it’s just the way it is. But as for preparing for the worst, after all is said and done I would not be surprised to see some civil unrest here at home, akin to that seen in the current youth riots in Greece.
December 27th, 2008 at 3:03 pm
#86 PS I love your line about
” I expect it will be a great, self-inflicted tragedy… a generation of people who will be bankrupt and homeless right at the beginning of their adult lives”.
Right on, this is exactly on the money. As I have said in previous posts
The recessions create many victims, some who will never recover”.
Keep your thinking cap on.
December 27th, 2008 at 3:36 pm
great read for those who think Canada is insulated from recessionary effects.
Think Globally Not Locally
http://www.globeinvestor.com/s.....7/GIStory/
December 27th, 2008 at 6:57 pm
All this carnage that is supposed to be expected doesn’t seem to have happened. I was out on Boxing day and it seemed like everyone’s got money to blow away. Are we being too negative here? I was looking at the real estate newspaper and I still see tonnes of houses listed well over a million. Houses in Marpole is not worth a million but why are those crappy 33×120 lots going for more than that?
December 27th, 2008 at 7:21 pm
Regarding the inflation/deflation debate, my take on things is consumers in the developed world have a lot of room in which they can cut back on spending and still be well off. What we are seeing is a readjustment period by consumers and banks as to where best to put their money following years of excess and bubble crashes.
Even though the money supply has been increasing for some time now, sparking the tech and housing bubbles, none of these produced much cpi inflation because productive capacity was sufficient to meet demand (in the developed world and using cheap labor from developing nations). But in a certain sense, it produced asset price inflation. Now because of the scandals and bubbles, money has been cashed out from theses assets due to waste and prices which could never be justified in terms of achievable future earnings.
This money is out there, but it does not seem like it will produce cpi inflation unless there are shortages of any essential kind and a lot of the excess money is in the hands of consumers. If the money is mainly held in reserve by banks, then cpi inflation seems even less likely. Even if there are shortages, provided they can be met by simply building capacity, the money will simply flow into those activities (but of course if it is an essential shortage like no more oil, that could be a problem).
In a way, a recession (but not depression) may be good in the long term because it will allow this money on the sidelines to make its way to more productive and important economic activities.
December 27th, 2008 at 7:35 pm
Boxing Day sales as an economic indicator?
The last gasp of the lemmings…
Shows me there are people who buy TVs but don’t watch the
frikkin N-E-W-S on TV!
Why would I buy a 52 inch flat screen HD TV for $899 (as one party bragged on the news yesterday ) when I can more than likley get it for free once the foreclosures occur (like what happened in Southern California and they had to hire companies to come in and throw out all the contents ).
Maybe they they will even pay you to take it away…
I also read an article that foresees a lot of store closures after Xmas, even the Big Box chains. Then you’ll see discounts and fire sales that will make Boxing Day look like a rip -off
December 27th, 2008 at 8:12 pm
#90 Supraboy, the official stats on spending don’t jibe with your eyeball analysis. Here is one example out of hundreds of articles you can look at.
http://ca.news.finance.yahoo.c.....ssion.html
#91 Observer , CPI is manipulated by the BOC specifically to produce a “headline number’, it excludes food, energy, housing, transportation , wage demands and everything else a person would consume day to day. The government does this because it says that these goods and services are ‘volitile’ and aren’t easily tracked. I’m sure you have unofficially tracked the real rate of inflation by asking yourself why your grocery bill has gone up so much year after year.
What they do include in the CPI are things like T-shirts, computer keyboards, technology upgrades ( hedonic measurement)and redundancies, in other words the things an average person does not consume on a regular basis. So when you refer to production capacity meeting demand, I wonder what the person who eats macaroni four times a week now instead of once a month would say about this government hubris and hedonic measurement of inflation.
The BOC is quite simply full of ‘it’, and everyone seems to know except the few deniers. I’ve got news pally, “DE Nile is not just a river in Egypt”.
http://investingforthesoul.com.....US-CPI.htm
December 28th, 2008 at 12:12 am
“generation of people who will be bankrupt and homeless right at the beginning of their adult lives.”
Tragic in some ways, but it is the beginning, so they have lots of time to recover. There’ll be a lot boomers at or near retirement age who won’t recover — and many more who will run out of inadequate retirement funds long before they die. Not all boomers have well-paid management jobs that allow them to keep working indefinitely, and many were counting on their over-inflated house value to fund their retirement. (Oops.)
December 28th, 2008 at 12:50 am
You people sound so negative. Isn’t anyone here optimistic? I’m just a ‘fence sitter’ so I’m neutral on this.
“I also read an article that foresees a lot of store closures after Xmas, even the Big Box chains. Then you’ll see discounts and fire sales that will make Boxing Day look like a rip -off”
I’m not so sure if fire sales will come in Vancouver. We’re not the United States here. I heard everything is also fine in Seattle. There are a lot of cocky bastards in Vancouver and Seattle bragging about how loaded they are from the housing boom. They’re also showing me how high real estate prices are and they expect it to go up more next year.
I’ve been travelling around the past 6 months and I saw a lot of unemployment and deflationary pressures in Europe, the Middle East and Asia going on. I don’t understand why Vancouver is still holding up well, isn’t this supposed to be a global problem? I go to restaurants and there are lineups. The Asians in Richmond are eating out all the time even during the day in weekdays, don’t they have to work?
December 28th, 2008 at 12:57 am
Hey realpaul, just because US retail sales are plunging doesn’t mean the same is happening in Vancouver. I watched on the news that there are more interac swipes this holiday season in BC compared to last year. The people that are spending, do they have their heads buried up their asses? That’s what I wonder, I walked around Richmond Centre today and everyone’s out spending or lining up at the Starbucks there for drinks. That to me is ridiculous. I’m glad I don’t spend money on ripoff drinks. I spent only $65 this entire month on one x’mas gift, that’s it, and my salary is more than $75k/year. I got no debts and no bills to pay off. I leech off free living from my parents and I still feel like I’m poor because I did not buy a million dollar house.
December 28th, 2008 at 1:45 am
I have also noticed that BC does indeed seem to be delayed to the global party, including apparent lack of massive drop in consumer spending. But it will come here. It will be comparably as bad as everywhere else. It will simply start more sharply because of a delayed start.
December 28th, 2008 at 7:28 am
Post # 94
Simply stated…
As the global economic crash scene gets analyzed, it would be fair to say that its been a
Ponzi scheme within a ponzi scheme within a ponzi scheme, within…..
Many of us had suspicions that what we saw going on was on par with the “smoke and mirrors ” Dorothy , Toto and crew saw the Wizard of Oz’s closing scenes.
Xmas 2008 is not an indicator, it is more an delay mechanism….where people can take a break from reality,…perhaps a timely break and allow us all to re-focus on what is truly important.
If people feel better believing Canda is immune….we are different than the U.S. …etc etc. that one’s right.
The rest of us call it denial.
December 28th, 2008 at 8:21 am
Hey realpaul, just because US retail sales are plunging doesn’t mean the same is happening in Vancouver. I watched on the news that there are more interac swipes this holiday season in BC compared to last year
Part of the reason is because, most of these people’s credit limit had been lowered without notice, sometimes to half the amount or more. Ours did and we have high FICO scores to boot. We have a friend who recently noticed that his limit was lowered from $5000 down to $1500 on the credit statement he got. He phoned of course to inquire only to get a reply saying that he didn’t spend enough and so, he doesn’t need that much of a limit. He didn’t ask for more, because he was recently laid off.. But seriously, $1500 can be easily spent buying gifts and toys this season. The rest however, he needs to pay it via Interac..
December 28th, 2008 at 8:38 am
Fri Dec 26, 1:54 PM Yahoo.ca (Front page Headlines)
What’s this
By Brenda Bouw, The Canadian Press
VANCOUVER, B.C. – Canada’s housing market made skeptics (like vancouvercondo.info) proud and put eternal optimists to shame in 2008 as the favour turned quickly to buyers, after years of smug sellers having the upper hand.
The shock was how quickly the tables turned.
House prices across Canada have dropped 11 per cent since hitting a peak of $316,896 in May 2008, down to $280,880 in November, according to latest figures from the Canadian Real Estate Association.
The drop is weighed heavily by cities such as Vancouver, Canada’s most expensive housing market, where prices have also fallen almost 13 per cent since May.
Across Canada, prices have dropped 10 per cent since November 2007, when the average home cost $311,485. Sales slipped 42 per cent year-over-year.
December 28th, 2008 at 8:45 am
People,
Even during a recession or a great depression, people still spend. But people do spend on their creature comforts. Your priorities are not theirs and neither do theirs on yourself. So you need to be careful on how you judge people spend during this holiday season. What’s clear is that, Vancouver is not immune to the global credit crunch and recessionary pitfalls.
We’re just late into the party.
There’s been a lot of talk about Japan and its decade long recession and how inflating the money supply doesn’t work for them.
That’s not entirely true either. If you ever visit Japan during the recessionary years, which I did cause I used to work for a Japan conglomerate, the first few years were evident — lots of hardship and cutting back. But then as people got used to the recessionary climate as humans always do, things on the street went back to normal.
If you’re from Mars and you’ve just landed on Japan in the mid 90s, not knowing they are in the deflationary spiral, walking through the streets of Tokyo you could never tell that a recession was ongoing. That’s because, life does go on. People who cocooned themselves into this depressive state of self-helplessness usually end up in homeless shelters or in parks. In fact, during that decade, the Japanese economy helped spawn a new breed of youngsters called Freeters (or in Japanese Fruita), which are people who don’t or can’t hold full time jobs either by choice or by economic reasons. We have our own freeter workforce — Angus One for example. But unlike Angus One, people can go from being temporary to full employment, in Japan freeters can’t. They are outcasted by big corporations. It’s called loosing face, in which Asians are very sensitive of, unlike us North Americans where loosing face is really not a big deal.
Another problem with Japan during the lost decade is in the form of immigration. Japan does not like foreign immigration. In fact, you can’t easily become a Japanese like you could in the States or in Canada by means of application. Japan has a much older workforce than North Americans do, and most of their young ones died massively in the war. The Kamikazi attacks were brilliant in execution, except that you need young soldiers, your future citizens that all went into the graves because of the war. So basically, no massive stimulant packages are going to excite old people to spend.
As we all get older, we get a bit wiser. We’ve been there and done that and do not wish to accumulate junk or toys any longer. People you see lining up on Starbucks or in the shopping malls are mostly young people. They hadn’t live the full interesting life that we old farts had, so it’s understandable that they will spend more than we do. Just look at who buy those iPhones the most and subscribe to text messaging plans?
Unfortunately, the baby boomers population outweigh these youngsters by a bit. What could they possibly spend on? More TVs? More cars? More vacations?
December 28th, 2008 at 8:53 am
About the housing prices dropping 11-20% in 2008 in Vancouver, if you picked up a Chinese newspaper on real estate, prices are actually listed even higher. To those Chinese people, it seems like the markets are going up up up and away!!!!!!!! Until I see real price drops, I’m still neutral in my view. It still feels to me everything is fine in Vancouver. Lots of cars on the streets, people are spending, etc……
December 28th, 2008 at 9:05 am
Until I see real price drops, I’m still neutral in my view.
Well, I guess that’s OK if you’re not active in the market, that means, haven’t bought in the past 5 years and don’t plan to for the next five. But waiting until you see concrete evidence in such an illiquid market as real estate can mean that you are “priced in forever”. Rear view mirrors don’t help you to stay on the road. Especially when you leave the flat highway and head into the narrow twisty roads!
December 28th, 2008 at 9:52 am
“About the housing prices dropping 11-20% in 2008 in Vancouver, if you picked up a Chinese newspaper on real estate, prices are actually listed even higher. To those Chinese people, it seems like the markets are going up up up and away!!!!!!!!”
Lol! Wow! Where to begin? You know what… I’m not even going to bother.
“It’s too bad that stupidity isn’t painful.”
-Anton LaVey
December 28th, 2008 at 11:03 am
97/96/94 No-Lympics – put even more simply, it’s the BC “we’re so far behind we think we’re ahead” syndrome. A common malady in these parts.
December 28th, 2008 at 11:27 am
Open Question. Who do you think is most distrusted, most reviled, sleaziest douchebag in the Vancouver Real estate Industry. Was it the media for diguising their cooperation with developers without disclosing the relationship? Was it hucksters like Bob Rennie who appeared to be a robot with short loop tape.
Was it Ozzie Jurock who kept telling people to “take action” and led many to their ultimate demise like a Pied Piper. Was it the australopithecus morons REBGV, the Vanncity 40 year mortgage pimps, CMHC for delaying facts, CREA for never swaying off message that real estate would appreciate 5% a year forever?
Was it all just a big hallucination of greed and avarice that blinded an entire population. Is there someone to point a finger at for being a big fat dick-wad or was it just everybody? What do you think?
Who do you hate the most and why?
December 28th, 2008 at 11:45 am
realpaul “Who do you hate the most and why?” It would have to be CMHC as they are taxpayer funded. Bob Rennie is a good salesman nothing wrong with that, the only people to blame who got sucked in by him are the buyers. CMHC mandate is AFFORDABLE housing. All of them did everything in their power to make it UNAFFORDABLE. I’d love to see heads role there, no severance pay being a start. Take the top 25 execs and fire them and ask for immediate repay of their last 5 years wages I would say! Seizing all their personnel assets would be a good start!
December 28th, 2008 at 12:11 pm
realpaul Says:
December 28th, 2008 at 11:27 am
Open Question. Who do you think is most distrusted, most reviled, sleaziest douchebag in the Vancouver Real estate Industry
I don’t know if my nominee would fit all your categories, but certainly takes the title of sleaziest, none other than:
Bill Good
2nd Prize:
BC Government
December 28th, 2008 at 12:28 pm
I’m with strataman on the CMHC. I expect salespeople to pump up a market, but the CMHC pisses me off. They did the exact opposite of thier stated mission to make housing more affordable and drove prices up during a bubble by introducing 40 year zero down speculator mortgages backed by taxpayers!
December 28th, 2008 at 1:44 pm
If cpi was underestimating actual consumer prices during the boom, they would want to overestimate actual consumer prices if there are fears of deflation to prevent a deflationary spiral. So the question would be is the cpi currently over or under estimating prices? My guess is that we are still having inflation but if your view is correct at some point they would want to overestimate prices if deflation actually happens.
They do have indices for the food, energy, shelter components too by the way, but you are right core cpi excludes these, though total cpi does include some of these. Certainly food and energy costs have gone up recently but it looks like they will be coming down.
Another possibility of course is cpi isn’t really that far off from the truth. It is difficult to tell unless they were to publish more details on how they arrived at the numbers, though one could track a constant basket of goods and maintain shadow statistics.
December 28th, 2008 at 2:30 pm
#109 Observer there are plenty of info services which hold the governments ass to the fire. One of the is http://www.shadowstatistics.com. But honestly pal, no offense, but you really aren’t up on the subject and it shows, again no offence. I’m not into teaching and this is no forum for holding a master class on economics.
Now !!!!!! I have some more suggestions for the “Who is the most reviled category”. How about
The City of vancouver Permits and Planning Dept and the Arcitects who designed ( can you give them credit as designers) the whole leaky condo mess. Why weren’t these people run out of business!!!! What a fiasco that was. When I was an AACI student ( UBC RIBC) in 1984 I wrote a paper I called “Building Tomorrows Ghettos Today” .
It was obvious to even an idiot student that these designs were built to fail. We spoke adamantly to the City Planners community and the design/development community et al at the time to no avail. These flat surface lathe buildings without peaks or runoff flashing were going to leak. Flat roofs without pitch in Vancouver ?????? Only an idiot could not surmise that these buildings would leak.
The City Planners/Engineers simply rubber stamped whatever the idiot architects submitted and it ended up causing the pop of Vancouver ( especially new buyers and retirees) a lifetime of savings ( and still is) and no one at the city or in the design community was ever held responsible!!!! It ( THE BLAME) was shifted to a few numbered companies which could not be held liable and to the buyers who paid a fortune in special assesments.
December 28th, 2008 at 2:35 pm
Was it all just a big hallucination of greed and avarice that blinded an entire population. Is there someone to point a finger at for being a big fat dick-wad or was it just everybody? What do you think?
Who do you hate the most and why?
First off, I can’t ‘hate’ anyone but find it inconceivable that people cannot see the ultimate source of this bubble and crash – the central banking cartel. Without a sea of liquidity sloshing all over the planet, none of this would have happened. The real economy would have just kept chugging along at its usual (albeit, unsustainable) pace and the banksters would still be making a killing – even without creating the mother of all heists.
Anyone else: realtors, mortgage brokers, advertisers, media shills, marketing geniuses, flippers … in fact, anyone at all wanting to cash in on the frenzy was simply acting in a self-interested and some say, parasitical manner. None of this could have come to fruition without the machinations of the central banking cartel and the de-regulators.
Pointing fingers at each other is somewhat limiting when trying to see the big picture.
December 28th, 2008 at 3:19 pm
realpaul: was the link to http://www.shadowstatistics.com supposed to go to a website providing alternate canadian cpi statistics. If so, I can’t find that in the link you gave – the website seems to be a shell website.
There is such a site for the US called http://www.shadowstats.com but I’m not aware of anything similar for Canada.
December 28th, 2008 at 3:50 pm
Post # 105
SlEazIEsT RE pimp?
Well…philosophically speaking…
We are into the tenents of contract law.. ie “Offer and Acceptance.”
Its getting to the point I am losing patience, and concurrently exhausting my sympathy, for those that allow themselves to be hoodwinked, bamboozled ,drink the kool-aid ,so – called screwed and shafted etc. etc.
Forget the ethics and morals..this is simply a question of ” Are you that certifiably stupid to think a realtor who gets their license in say 6 months or less, is a Frikkin expert(???) .
Or because Ozzie says so……
Or Rennie sells lots of condos = he’s an “expert”. ????
Many of them have failed other careers.
Unless you can prove coercion, forgery, fraud etc…the buyers is SOL.
These people are P-R-O-M-O-T-E-R-S. like P.T. Barnum….That’s it!!!
No one likes bad news….ever heard the saying ” don’t shoot the messenger.” ???
Their JOB/ Source of income is to pump the given market…everything is forever UPbeat, ….”Here wear my rose coloured glasses, I got lots of them!!!”…”Real estate never goes down” !!!….” They don’t make any more land” …….blah blah barrf barrrrrrf BAAARRRFFFF.
If they can convince enough people of this, it becomes a self -fulfilling prophecy. Real Estate is a COMMOODITY , it is no different than any other commodity. Unless its your primary abode….don’t fall in love with it.
These purchasers are much like the parties in a car down an strange/Unfamiliar/potentially treacherous road who ignored the detour signs…or any other warning signs…their vehicle is now in free- fall over a cliff, YET they are STILL slamming their foot on the brakes??? …thinking it will help ????
Geez, what is the legal age one can enter into a contract? They had to at least have gotten through High School, haven’t they?
At least take Law 11.
They don’t seem to get it that they cut their own throats pumping up the market by outbidding each other…it sets up a big correction later when the inflationary fuel is spent.
If all else fails Look in the mirror..the blame lies therein. These are often the same types that envy Ozzie, Rennie etc. and would trade places with them in a heartbeat.
The rest of us have at least a triple digit IQ and a few of things called
—common sense,
— a long memory having seen this before(actually small correction, not seen it THIS bad before) and
– a conscience.
December 28th, 2008 at 4:03 pm
When the Chinese economy reloads and rockets, the Vancouver real estate market will rocket to heaven. Better get in before it’s too late. There are a lot of Chinese people ready to step in and scoop up all the land. All you naysayers better get your hands on a property while the going is bad now.
December 28th, 2008 at 4:30 pm
#113-no lympics. A moron can get a real estate license in a couple of weeks. There is no set time for study. It’s not like a college course load or anything similar . It’s a ( the study guide for the prospective licencee) flimsy study guide the size of a half a People magazine and an idiot can get through it in an evening on the toilet.
Most tutors are guaranteeing the license in 5 weeks. “Yeeehawwww Pahhh I got me one of them thar real estate licences” I got me a real edge a muck ation Mahhhh, duh yup I do.
It is not required to have any educational/academic background whatsoever. You promise to have completed high school but a transcipt is not required. The real estate exam itself is no more than 100 multiple choice questions. You would have to have an IQ of less than 75 to fail. A chicken could peck enough right answers to pass.
Having worked in that industry as an executive I can tell you from personal experiance that these sub-agents are brute stupid in the majority. During my time I handled the arbitration for my company at the Real Estate Board. The Board members themselves are brute savages, exeptional only in their ignorance. It is a nepotistic body which has no history of intellectual pursuit. If you could meet these idiots as I have you would not be surprised in the least by the ‘goober policies’ that have originated in that crap factory.
December 28th, 2008 at 4:38 pm
#114 I know you’re a new troll but we’ve long ago proved that Chinese immigrants make $12/hr ,on average, and that is not enough to buy a parking space in Vancouver.
It doesn’t matter if Richmond Townhouses are offered for sale at $689k, no one will buy them until they’re back to the $240k range.
It doesn’t matter what you think, if you are to stupid to understand the basics of what’s happening in the global economy then get out there and buy! I’m sure your security job covers your JDM parts for the Supra so now all you need to do is increase your income another $3300 and you too can own your very own 1 bedroom condo!
December 28th, 2008 at 4:40 pm
#114 Supra Boy, are you drinking that Wu Pia Pi Chui? The Chinese equity market went down 70% this year. Some buisnesses such as the Power generation sector are reporting profits falling more than 80%.
The local Chinese community are so far up to their eyeballs in debt that they’re scared shitless. Everything is leased and money is disappearing and nothing is selling while the prices are in the toilet and spiralling down. The diminishing wealth effect is hitting Asia hard in Asia and Asian Canadians especially. Do you think that you know something we don’t?
December 28th, 2008 at 4:58 pm
#115
Real Paul:
Yeah I know. The REaltors license can be gotten in just over a month.
As I type this I have a junk mail flyer in front of me that says ” REaltors License” in “5″ count ‘em FIVE weeks !!!!!!.
If it is that easy to get…nuff said.
Why not an M.D diploma in 2 years? (Yeeesssh !)
What a lot of new bright -eyed and bushy – tailed realtors don’t realize is (depending on how much their company split is) that each license can get at least a ” few ” sales/listings….such as Granny’s estate,…. Aunt Mary’s downsize to a condo …..and Brother Bob’s divorce.
That is why turnover is so high OR why they can lure more in…due to the need for more agents after the last batch quit .
(or at least hit them up to keep the licensing facility open
If can ,DO.
If can’t, Teach.
If can’t do either THEN teach someone how to be a realtor aaahahahahahahaha)
However, in hindisght, I am glad Rennie was in it…his ” beyond Lions share” of the condo market ultimately NUKED what I always thought was a crooked, overhyped and overinflated “commodity” market to start, good frikkin riddance.
Crash and Burn….. Welcome to Condo HELL
December 28th, 2008 at 5:14 pm
By 2010 …
Those McMansions that the first wave of wealthy Asians bought in the post Expo 86/ mid 1980′s will begin to depreciate rapidly. They will be about 25 years old in 2010. Poorly built and outdated. A fortune to renovate. They will end up as “lot value” …and that “lot value” price looks to collapse as well. $1 Million for a Vancouver lot won’t cut it ,..except maybe the History books.
The crap the rich Asians bought in the 2000′s will be at overly inflated prices , too much supply, thus due for a major correction as well . The writing is on the wall that the last 25 years of B.C. RE was B.S.
If nothing else, the Asians may turn more into “grinders” than “inflators”, or stay at the sidelines …..either way having learned a valuable lesson.
As Confucious say..” That’s the way the RE cookie crumbles …SOL bwahahahahahahaha “.
( NOTE: why do I think of Pat Morita as “Arnold” from TV’s “Happy Days” ???)
December 28th, 2008 at 6:17 pm
That Realpaul guy seems to know what he is talking about. I would pay attention to his posts.
Realpaul, how about submitting an article for us? Share the burden…
Regards,
arit
December 28th, 2008 at 7:11 pm
I know i’m probably pissing into the wind here, but is there even the slightest chance that as a community we can ignore the Supraboy’s of the world? Don’t vote them up or down – just PgDN. That’s the only way to make them go away.
December 28th, 2008 at 7:17 pm
You are correct #121.
Trolls want to upset the blogs and take them off topic.
Here’s the NY Times article about trolls and what they do:
http://www.nytimes.com/2008/08.....-t.html?hp
Ignoring them is the best way to make them go away, with mainstream media referencing these sites there’s bound to be a troll influx..
December 28th, 2008 at 7:20 pm
In the late 1980s, Internet users adopted the word “troll” to denote someone who intentionally disrupts online communities. Early trolling was relatively innocuous, taking place inside of small, single-topic Usenet groups. The trolls employed what the M.I.T. professor Judith Donath calls a “pseudo-naïve” tactic, asking stupid questions and seeing who would rise to the bait. The game was to find out who would see through this stereotypical newbie behavior, and who would fall for it. As one guide to trolldom puts it, “If you don’t fall for the joke, you get to be in on it.”
December 28th, 2008 at 7:54 pm
Supraboy,
Good work Supraboy,Your info exposes bears’deformation of Van RE and super hot economy of vancouver.
December 28th, 2008 at 7:57 pm
“I know you’re a new troll but we’ve long ago proved that Chinese immigrants make $12/hr ,on average, and that is not enough to buy a parking space in Vancouver.
It doesn’t matter if Richmond Townhouses are offered for sale at $689k, no one will buy them until they’re back to the $240k range.
It doesn’t matter what you think, if you are to stupid to understand the basics of what’s happening in the global economy then get out there and buy! I’m sure your security job covers your JDM parts for the Supra so now all you need to do is increase your income another $3300 and you too can own your very own 1 bedroom condo!”
Why don’t you go down to Richmond and see for yourself. Chinese people are still dancing over the boat loads of money they have. They’ve taken so much money from China and now they’re all holding cash enjoying life. They don’t care about the $12/hour. It’s just to keep their lives busy while they wait for more cash to roll in.
“The local Chinese community are so far up to their eyeballs in debt that they’re scared shitless. Everything is leased and money is disappearing and nothing is selling while the prices are in the toilet and spiralling down. The diminishing wealth effect is hitting Asia hard in Asia and Asian Canadians especially. Do you think that you know something we don’t?”
Have you talked to any Chinese people in town yet? They’re all loaded and enjoying life right now. They don’t leverage, they use cash to buy up properties while you sweat on your 9-5 job trying to make ends meet because you had no balls to learn how to get rich.
December 28th, 2008 at 7:59 pm
btw, about the JDMs on my Supra, I didn’t go with JDM, I used TRD parts on my Supra and my Subaru STI is souped up with Zerosports parts. All paid by cashing, no financing or credit cards required. Isn’t it too bad you’re wishing doom and gloom while I enjoy life with a paid off house and fully modified cars.
December 28th, 2008 at 8:01 pm
I come here with a neutral perspective and you fools are all pissed because of it. Face reality, if you look around Richmond, Asians rule that place, and when you go to hockey games, GM Place is always full, if the economy was that bad, who the hell can afford a $100 ticket to get in?
December 28th, 2008 at 8:11 pm
“Isn’t it too bad you’re wishing doom and gloom while I enjoy life with a paid off house and fully modified cars.”
and
” I leech off free living from my parents and I still feel like I’m poor because I did not buy a million dollar house.”
???? jeez… at least keep it consistent, eh? you must be new to trolling.
December 28th, 2008 at 8:44 pm
Supraboy,
Thanks for your endeavor in telling the truth to those jealous bears.
December 28th, 2008 at 8:45 pm
My paidoff house is being rented out for the next 12 months. I don’t need to live in it just because it’s paid off you fool, and I paid 650k for it 6 years ago, now worth a million. Do you want me to make myself more clear before you call me a troll?
December 28th, 2008 at 10:03 pm
Hey all,
Get off Supraboy. We thrive on different perspectives and he brings an angle we never heard here. Cool down you all. Now.
Regards,
arit
December 28th, 2008 at 10:08 pm
Now,
Supraboy – I apologize for my fellow’s bears behaviour. They can get quite carnivour some time!
Understand us, we have had a very long hybernation, and we are hungry. Spring is not here yet for us, it hasn’t been for 7 years (but soon we’ll have “Spring from hell 2009″).
So let’s try again. Supraboy, welcome to the discussion. Please tell us: How did you manage to aquire paid off houses? It is our goal too, and maybe you can teach us something.
Best regards,
arit
December 28th, 2008 at 10:30 pm
“My paidoff house is being rented out for the next 12 months. I don’t need to live in it just because it’s paid off you fool, and I paid 650k for it 6 years ago, now worth a million. Do you want me to make myself more clear before you call me a troll?”
Yes, please do make yourself more clear. Explain to me why someone who makes 75K a year, has travelled extensively, has a fully paid off million dollar house, only spends $65 on Christmas gifts, still needs to “leech off” his parents?
December 28th, 2008 at 11:52 pm
#125 Supraboy In a couple of my buisness ventures I have had licensed access to peoples credit reports. There are a lot of citizens of Chinese origin-new to Canada who haven’t got a pot to piss in, but attempt to keep up appearances. These persons are not specifically ethnic or new immigrant and are definatley not alone in this behaviour, god love them all.
I was underwriting second tier financing ( lending money ) for awhile through brokers at a local bank and I had many Oriental clients living in fancy houses, driving fancy cars and delivering newspapers at 3AM to make enough to pay me not to repo the ‘face”.
The fallacy that all Chinese are rich is certainly a stereotype and definatley false.
FYI, I built many of those McMansions in Richmond and believe me, I know how crappy they are.
December 28th, 2008 at 11:56 pm
I had a stash of cash right after I graduated from all the red pockets from parents and relatives, then I asked my parents to borrow 120k around 7 years ago to buy a house worth around 600k. I wanted to put 25% down so I added another 30k and I had a fulltime job paying me about 55k back then. To cover the mortgage, I rented the basement and main floors separately.
To make the story short, I used my parents money to catapult myself into becoming an “artificial millionaire.” When/if this vancouver housing bubble actually does crash, I’ll refinance and use my excess cash to buy another house.
How did I manage to have the house paidoff? Well, it’s almost paidoff, I was just trying to spite a few people here.
The thing I noticed here is that there are a lot of negativity here. I was quite negative after spending 4 months from July till November in Europe, Asia and the Middle East. But when I got back and checked out the malls in the past 2 weeks, I noticed that the malls are jammed packed with people and wondered why the hell people are still out spending. It looks to me all is fine here. What I see is what I get. When I was in Barcelona for 2 months, restaurants were quite dead and the highclass boutiques were also dead. I didn’t notice it in Vancouver especially with the lineups at Coach, Tiffany and Holt Renfrew.
December 29th, 2008 at 12:01 am
Hey realpaul, perhaps the chinese that you dealt with are the poor ones. Have you dealt with the ones throwing around 5-10 million dollars all in cash? I’ve seen a lot here in Vancouver. If you have time, go hit a chinese restaurant during lunch hours during the weekdays, they order the most expensive stuff for lunch which is outrageous. If you’re chinese, you know having shark fin soup and abalone during lunch hours are meant for the rich elite Chinese. I can assure you that there are a lot of those around in Vancouver. Where else are they going to throw their money around after stealing money out of China through corruption? They sure aren’t going to take it to a collapsing United States. In the end, I think the money is coming in to Canada and they will continue to lift the Vancouver real estate markets inflating that big bubble.
December 29th, 2008 at 12:10 am
“Supraboy: Better get in before it’s too late. There are a lot of Chinese people ready to step in and scoop up all the land.”
I knew he was a closet troll, now it’s coming out.
According to a Vancouver Sun article (don’t have link), the average Chinese immigrant works, saves, and rents for an average of 5 years after moving here before buying a house. The days of uber-rich Hong Kong Chinese buying up the show is long over. The mainland PRC Chinese immigrating now have far less money; we just notice the wealthy ones.
As for Christmas crowds, so what. The recession just began here, and many people haven’t felt the pinch quite yet, but they most certainly will. Others have already pointed out articles showing people spending less and using cash and less on credit; that’s just the beginning.
December 29th, 2008 at 1:28 am
Supraboy,
I am a bit slow, so let me see if I can recap:
7 years ago , you wanted to buy a 600K house.
You wanted to put 25% down.
In order to do that: You borrowed 125K from your parents, and 30K from somewhere else (I didn’t understand if the 30K where also borrowed or the money which was given to you by relatives).
Let’s say the 30K was your own money.
You borrowed 125 from parents, and I assume 445K from the bank for a total debt of 570 thousand dollars. That is seven years ago.
So…
If you took those 445K at 5%, for 25 years, your monthly payment would be something like $2588.15.
So you you still owe: 559008 dollars to the bank and 120000 dollars to your parents for a total of 679000 dollars.
Your monthly cost on the house if we exclude maintenance is 2588 + (asume 5000 tax / 12 ) 416 = 3004.
So if you are renting the house out for less than 3004 dollars a month, you are bleeding money. And that is without counting the money owed to mom and dad.
Bottom line: You owe 679000 dollars. That debt can be repayed by selling the house, but I wouldn’t bet on the house being worth more than 679000 when you sell it.
Debt is NOT wealth. You cannot judge other people’s wealth by the car they elase or the gold coated avalon in the Chinese restaurant.
Being in Richmond myself, I am also quite familiar with the culture. True, there are a few millioners (Peter’s mother from the martial arts class comes to mind – she bailed out a year ago, sold all her investment properties), but many are just “show”.
Best regards,
arit
December 29th, 2008 at 1:33 am
Forgot to ask something:
Supra, I forgot to ask:
If indeed you are not gaining income from your house, and you are still living with your parents, then: What is the point?
Regards,
arit
December 29th, 2008 at 6:25 am
He might be a re-incarnation of John after he sold his increasingly valuable SUV collection.
=========================================================
BTW:
Still haven’t seen a single ” SOLD ” sign since the last one I mentioned a couple of weeks back.
Must be the snow and Rich Asians with summer tires on their Mercedes and BMW’s not able to attend the open houses.
December 29th, 2008 at 8:53 am
Canadian retailers face a bleak 2009
December 29, 2008 8:30 AM
TORONTO – Malls across Canada teemed with shoppers this past weekend, enticed by boxing-day discounts that were even greater than usual after Christmas.
But while first impressions of Boxing Week sales are optimistic in terms of volume, the heavy discounting putting pressure on margins together with depressed demand in the forecast suggests Canadian retailers may be about to join their U.S. counterparts in what looks to be a bleak new year
December 29th, 2008 at 9:13 am
You guys are spreading too much doom and gloom here. Everything here is so one-sided. If you would pull you bear head out of the cave, you’ll see light at the end of the tunnel.
About the SOLD sign, there are private sales all the time, you don’t need SOLD signs to confirm that people are still buying. I’m sure there are real estate being sold every hour and the rich Chinese people will continue to jack the markets up. Even if they’re poor, as long as they continue to flow into Vancouver, they’ll create a healthy rental market. Population growth creates demand.
A 650k house 7 years ago is now worth easily over 1.4 million, even if I factored in a 5% drop in housing, I’ll still be up. The house I have right now is rented out for more than 3k because I rented the basement and the upper floor separately, anymore questions about that?
December 29th, 2008 at 11:41 am
In the late 1980s, Internet users adopted the word “troll” to denote someone who intentionally disrupts online communities. Early trolling was relatively innocuous, taking place inside of small, single-topic Usenet groups. The trolls employed what the M.I.T. professor Judith Donath calls a “pseudo-naïve” tactic, asking stupid questions and seeing who would rise to the bait. The game was to find out who would see through this stereotypical newbie behavior, and who would fall for it. As one guide to trolldom puts it, “If you don’t fall for the joke, you get to be in on it.”
December 29th, 2008 at 12:11 pm
Supraboy Says: “You guys are spreading too much doom and gloom here. Everything here is so one-sided.” Strange comment when you consider this little blog is a voice in the wilderness inhabited primarily by independent thinkers. You would give your opinions credibility IF you were to indicate that that MSM had for the most part if not entirely been one sided for the last five years. Maybe a quote from a letter or cooment on an MSM blog roll / comments section where you severely chastised them for their fraudulent one sided aspect would be in order. If you do that possibly your opinion is of some weight. If you cannot prove that then please STFU.
December 29th, 2008 at 12:13 pm
Well you know the old saying, : A couple of dim sum queens doth not a market make”.
Arit, good calc, don’t forget to inc the prop taxes and maintenance. I’ve also been made aware that Revenue Canada is ‘trolling’ for revenue property income tax evaders. Inspectors are doing spot checks. Many ‘landlords’ are getting audited as we speak. Maybe we can forward Supra Boys rants over to them. There has been a boom in the repo business lately.
A fellow I know has suggested to me that the number of real estate sub-agents ( salespersons)is dropping like a stone. I’m trying to check into what the actual numbers are in real time.
December 29th, 2008 at 12:56 pm
Hey Realpaul,
Who do you know personally that’s being spot checked? Is that a myth of yours? Why don’t they come and spot check me? I pay my taxes every year. So now that I’m making money off my property, Revenue Canada’s going to give me a spot check just because those fat pigs have nothing else better to do? Well bring them on since they’re using my tax dollars, perhaps they’ll spot check me and give me tax returns while they’re at it.
Who cares about the sub-agents, they’re like parasites trying to leech off others. They’re just a bunch of kids out of university with nothing else better to do in life.
December 29th, 2008 at 1:10 pm
“Who cares about the sub-agents, they’re like parasites trying to leech off others. They’re just a bunch of kids out of university with nothing else better to do in life.”
Leech off others???? What was that again about the pot and the kettle? Oh, that’s right. Sub agents leech of complete strangers and you leech off your parents…. That’s a big difference. Boy, you are a piece of work.
December 29th, 2008 at 3:22 pm
Check this out:
http://www.canada.com/vancouve.....d0&p=1
People have cash and are ready to step in and lift the markets. You snooze, you lose, better start buying real estate now guys.
December 29th, 2008 at 4:11 pm
You snooze, you lose, better start buying real estate now guys.
LOL. Take your own advice and leverage yourself to the moon, because no one’s listening here, dirt pimp.
Did you see the printed version of that article? The ‘Homes’ section of the Sun used to run in two thick sections. The day that article was printed, it was a single page. One frickin page. Realtwhores and develuppers don’t even think the advertising will pay for itself. LOL.
Don’t like the ‘negativity’ here? Go peddle your fairy dust and sunshine to all the other The Secret readers in denial.
December 29th, 2008 at 4:12 pm
Supra,
Thanks for that article. I am happy you posted it as we have not seen that specific type of propaganda from the Sun in almost two months.
“Jennifer Podmore Russell, Special to Westcoast Homes”
I need to find out who this lady is. I will bet 1000 dollars now with whoever that she is an interested party – aka realtor, developer, etc. Posing as a periodist.
“MPC Intelligence’s experience”
Who is MPC?
And the usual propaganda:
“The reality is, if you are looking to buy a home, there are some great deals if you act today.”
“Perhaps the greatest advice one can receive is that there is never a bad time to start building equity into a home”
“Five years from now, we will all be more disappointed with the things we didn’t do and the opportunities we didn’t take.”
Pardon me while I go puke. I’ll be back soon.
Best regards
arit
December 29th, 2008 at 4:26 pm
Jennifer Podmore is the daughter of a hot shot real estate guy.
She’s been thoroughly discredited on RET.
Hey supra, why don’t you to to Real Estate Talks? There are lots of people with your point of view on there.
December 29th, 2008 at 4:29 pm
Well , it seems like we’re striking some nerves. My experiance is that the loudest and most beligerant voice in the room is always the least sure of themselves.
December 29th, 2008 at 4:32 pm
#150 Arit. It is criminal IMHO opinion that the local media hides these industry tout sheets behind the veneer of ‘news’. In the US the papers have to disclose the relationships they have with advertisers and they can’t get away with this crap.
December 29th, 2008 at 4:45 pm
realpaul,
Indeed, but didn’t they fire their regular RE “periodist” from the Sun two weeks ago for getting a hefty sum of ‘papelines’ from the developers?
Isn’t this Jennifer Podmore just deja-vu all over again?
Regards,
arit
December 29th, 2008 at 4:56 pm
Can’t stop puking, I feel like a rape victim…
Look at this….
The Sun says ONLY this about the article’s writer:
Great deals out there
Home buyers are holding back because of the economy and deals have sprung up as a result
Jennifer Podmore Russell, Special to Westcoast Homes
An I found these gems:
1. Jennifer Podmore Russell, founder of MPC Intelligence Inc.
(from http://www.canada.com/victoria.....8b672a37a)
2. And also (from http://www.mpcintelligence.ca/about)
What We Do
MPC Intelligence (MPC) is a real estate market strategy consultancy and market intelligence data company. MPC assists the development community to make better business decisions by providing services that will allow clients to Think Before They Act.
So she is on the developer’s paycheque. Isn’t it criminal to advertise in disguise???
Regards,
arit
December 29th, 2008 at 8:20 pm
You guys are harshly scrutinizing her. About post #150, are you done puking? You shouldn’t be in denial, Vancouver is well insulated from the recession. We have the best city in the world, but isn’t it too bad that in every city, there are bears wishing for a market crash? You can dream about a real estate drop all you want because with the fed and all the world governments acting together in a coordinated attempt to pump more money into the system, everything will get re-inflated. Better get in now before it’s too late. I’ve overloaded myself last week with a lot of agricultural and gold stocks and it’s working wonders for me right now. With a real estate and commodity re-inflation in 2009, get ready to miss the boat and kill yourself.
December 29th, 2008 at 8:38 pm
“Vancouver is well insulated from the recession”
Vancouver, more than most other places in Canada, is built on debt. What we have is not a “recession”, it is debt crisis. Vancouver is NOT insulated from the debt crisis, no place is. It will be painful.
By the way, in addition to monetary debt we also have quality debt in our real estate. The quality of construction is so shitty that owners will have to pay for it much earlier than they can possibly pay off their mortgages.
December 29th, 2008 at 8:42 pm
Supraboy,
Yes, thanks, done puking. Feeling better now.
Look, we have different views. I respect your position, you have presented it clearly. My opinion is different, and I don’t think there is much more to add. The details have been already over-processed.
The chips are in place and the little white ball is rolling. 2009 will be either good for the Supraboys and bad for the arits, or vice-versa. I invite you to stay here with us until the bitter end, and then we will see whose right and whose poor.
Then we can meet for a beer and we’ll race your Supra against my Previa
Best regards and a happy 2009
arit
December 29th, 2008 at 10:02 pm
Arit 155 thats very interesting. I am going to take this up with the Times Colonist editorial dept tomorrow. Although this sleazy behaviour is not illegal ( as it is in the US) it is unethical and I intend to make that point with the editor and cc the CRTC.
I have gone a few rounds with Global TV and The Vancouver Sun ( I took them to account when they tried to flog ” The Diamond Triangle” in Fleetwood-Whalley )on this same issue and it really pisses them off when you catch them out . I was successful in that case.
I know they have to consult legal about this and this costs money. The expense has to be approved and it exposes the editor for the dumbshit that he is.
I suggest all of you write The Times Colonist and express your dissapointment in this unethical non-disclosure of a relationship with an advertiser posing as a news/information item.
December 29th, 2008 at 10:31 pm
Arit, I will stay here and come back more often, we will see what 2009 holds. I’m very excited since I’m heavy in cash.
December 29th, 2008 at 11:02 pm
Jennifer Podmore is the daughter of Concert Properties CEO, one of the largest developers and property managers in Vancouver.
Biased; of course not. And by her picture, obviously a wealth of knowledge and experience. Probably only in late 20′s. Listen to her alright!!
December 29th, 2008 at 11:37 pm
She looks older than late 20s. Perhaps the reason why she got where she is today was because she was willing to get worked over by some hungry men. Who knows? The quicker they climb, the harder they fall.
December 30th, 2008 at 8:42 am
realpaul
Excellent idea. Please do keep us updated.
Regards
arit
December 30th, 2008 at 8:51 am
http://business.theglobeandmai.....m_mostview