Good Friday Free-for-all!

Happy weekend everyone!  It’s time to do our end of the week news round up.  Here are a few stories I’ve noticed lately:

Vancouver house prices take a steep dive
We’re #1: Vancouver has biggest price drops in first quarter
We’re #1: BC leads nation in job loss
BC housing starts down 70%
Cruise visits drop off, hammering Vancouver
Council expedites 2010 rental rules
We’re #8: Calgary named ‘best city on the planet’
Peter Schiff on mark to market: Lets play pretend

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent long weekend!

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Cheebzz
Cheebzz
11 years ago

Anyone know what will happen to Global News if Canwest seeks bankruptcy protection?

patriotz
11 years ago

asp:

During this little credit crisis, is the money supply shrinking because less borrowers are maxing out their lines of credit?

NO, because all the money (apart from reserves) is loaned out all the time, as I have already said. If it's not loaned out to someone's LOC it's loaned out to someone else. The banks are not sitting on big bags of money.

Isn't it self-evident that if banks are willing to pay x% interest on deposits, they must be lending the money out to somebody?

Money supply is contracting because of loan losses, which reduce bank reserves, which reduce the amount of money they can lend out.

asp
asp
11 years ago

I was just trying to illustrate in an extremely simplified example how money is destroyed and created by borrowers. Of course, there are thousands of credit unions and other financial institutions involved, and money is being created and destroyed thousands of times per day.

During this little credit crisis, is the money supply shrinking because less borrowers are maxing out their lines of credit? Are we then in period when money is being destroyed faster then it is being being created?

patriotz
11 years ago

asp:

Your fallacy is in assuming that the credit union has a bag of money sitting around that it loans out in drips and drabs to people like you.

In fact the credit union loans out all its money all the time, subject to reserve requirements. If it hadn't loaned the money to you it would have loaned the money to someone else. That's what the bond markets all are about. All the money loaned out, all the time.

asp
asp
11 years ago

The way borrowers create money has been explained to me like this: My parents and aunts and uncles save some of their money and deposit it in the local credit union. All together, they deposit 10,000. that is the base money supply. I use my credit card to buy a cheap flight to Mexico. The credit union transfers $400 to the bank account of the airline. The credit union now has 9600 in cash plus 400 in debt owed to it. All counts as "money" assets. The airlines bank has 400. Total money supply $10,400. By going to Mexico, I have created money. When I get back, I get a job with the airline unloading luggage. They pay me $400 from their bank account. I pay that back to the credit union. Now the credit union has $10,000 cash again,… Read more »

asp
asp
11 years ago

Canada's Money Supply: http://www.bankofcanada.ca/en/backgrounders/bg-m2

"Commercial banks and other financial institutions provide the greater part of assets used as money through loans made to individuals and businesses. In that sense, financial institutions are creating money."

Or, to put the shoe on the other foot, borrowers create money when they take out a loan, use their line of credit or credit card. And then destroy money (supply) when they pay off those loans.

patriotz
11 years ago

helltopay:

But when people ask how a massive drop in prices could affect some, my friend is a good example.

It is your friend and people like him who were directly responsible for the massive rise in prices in the first place, so why should anyone feel sorry for them?

mousie
mousie
11 years ago

Oh well, easy come, easy go.

That is why I am so wary when then put a nice piece of cheese on these complicated serving platters (mouse traps).

Too good to be true, no free cheese bits out there.

factcracker
factcracker
11 years ago

helltopay:

Sellers who can afford to seem to be waiting it out, hoping for better news – which just won't be coming any time soon.

factcracker
factcracker
11 years ago

What happening in Spain is eerily similar to what is happening here, almost WORD for WORD, uncanny. Funny how 'Bulllshit' translates into every language. Big business leaders in Spain are stepping up their demands for labour reforms following the crash of regional savings bank Caja Castilla la Mancha, the first since 1993. After attempts to coordinate a buyout failed, the Spanish government was forced to inject €3 billion ($4 billion) into the bank to plug a "hole" in its finances and provide €9 billion ($12 billion) in loan guarantees. The bailout has destroyed the myth that Spain's banking system was "immune" from the global financial crisis. According to economics professor Antoni Espasa at Madrid's Carlos III University, "The Spanish economy is in for a ferocious fall… It's going to suffer more than Europe and take longer to recover." Dominic Bryant,… Read more »

helltopay
helltopay
11 years ago

I picked this comment off another blog and it got me thinking about the old 'six degrees of separation' idea. If evryone knows somebody in a position where they are underwater or overextended then think about how many clenched sphincters there really are out there. This may explain why the number of 'specuvestors' inventory that was purchased over the past two years is vacant and only slowly coming into the rental market. My guess is that these people are still borrowing to keep current on payments, using rental payments to partially cover the monthly payments and using the last savings they have have built up due to using credit to cover 100% of the purchase. How long can it take to bleed them dry? Obviously a job loss will blow anyone out of the game, but I think the low… Read more »

deathspiral
deathspiral
11 years ago

The plight of the downsizers: Record number of middle classes desperate to sell homes

By Olinka Koster

Last updated at 11:40 PM on 13th April 2009

Comments (0) Add to My Stories

Record numbers of middle-class homeowners are trying desperately to sell and move to smaller properties.

As a 'white-collar recession' begins to bite deeply, new figures show a sharp jump in families looking for a quick sale on houses worth £500,000 or more.

http://www.dailymail.co.uk/news/article-1169774/T

realpaul
realpaul
11 years ago

And so it begins. The Option Arm and Alt-A mortgages we have talked about are now starting to reset and are forecast to make the sub-prime crisis look like a drop in the bucket. Anyone who thought it was coming to an end was just deluded. "Besides layoffs, salary reductions and other recessionary factors, many suburban homeowners are watching their adjustable rate Alt-A mortgages — which are between prime and subprime mortgages in interest rates and risk for the bank — reset with higher payments. That is forcing some families who owe more on their homes than they are worth to walk away from their property, sell at a loss or face foreclosure. A growing number of owners are rushing toward the brink because home values have fallen so precipitously in recent months: Local prices have, on average, fallen to… Read more »

GarthTurner'sTw
GarthTurner'sTw
11 years ago

Some predictions :

1) Stock market will rally sometime in the next 10 years

2) House prices will go down in the next twenty years and up again too

3) Oil will go up in the next 30-40 years

4) My books will continue to sell well

5) Don't take my advice, use a professional financial advisor just like I do

6) Buy Nortel stock while it's cheap, you won't regret it

7) Vote for me!

jesse
11 years ago

"And someone paying off a debt to a bank with cash results in an increase in money supply because that cash increases the bank’s reserves which increases the amount of money it can lend out."

An increase in potential money supply. The reserves allow loans to be made; whether they are actually made is another story. When a loan is re-paid, another is not always issued.

realpaul
realpaul
11 years ago

We're #1, we're #1

"For months into the economic downturn, Gordon Campbell told British Columbians not to worry. He had no idea what was going on for working families in the province. He responded slowly, and even today he stands alone among western leaders in calling for tax increases and program cuts," Ralston said.

B.C. job losses largest in the country

'A lot of hurt out there'

Statistics Canada reports 16,000 B.C. jobs were lost in construction last month, 8,500 in real estate and finance and 6,600 in manufacturing. (Sectors like transportation and food services saw increases, bringing total losses to under 23,000.)

The province has lost a total of 69,000 jobs since October and 73,000 jobs over the past 12 months.

http://www.theprovince.com/business/fp/losses+lar

This is great news for the real estate bulls and the whores who love and support them….not

observer
observer
11 years ago

If someone has the cash already and pays off their loan to their bank, the money which was created to make the loan in the first place has been unwound and destroyed ("loan money is destroyed"). The banks reserves have increased so potentially they might have the ability to lend out more but might not if they are in dire straits.

If someone takes the money out of another bank account to repay the loan, it reduces that banks reserves, and hence its lending ceiling, so I'm not sure if it evens out as you say.

patriotz
11 years ago

jesse: Actually, money IS destroyed by a) someone repaying their debt to a charter bank Yes but where does that money come from? Someone else's bank account, i.e. I sell some stocks to pay off my debt to the bank, the money comes from the buyer's bank account. Or I pay off a debt with my earnings, the money comes from my employer's bank account. Or to make it really simple, if I owe the bank 10K, and my dad writes me a cheque for 10K to pay it off. If someone repaying their debt to a bank destroys money, a bank repaying its debt to someone – i.e. someone taking money out of a bank account – has to create money. It evens out. Actually people taking money out of a bank (which is the bank paying off its… Read more »

hombre
hombre
11 years ago

Anyone feeling smug about the security of their job might want to look at the economy chart on
http://fishyre.blogspot.com

jesse
11 years ago

Anonymous: "Wrong. One person’s loss is another person’s gain. Money does not disappear from the system because of losses."

Actually, money IS destroyed by

a) someone repaying their debt to a charter bank or

b) someone defaulting on their debt at a charter bank

Not all loans being repaid or defaulted result in money supply contraction but a large portion do.

bearette
bearette
11 years ago

He strikes me as a coke-up frat boy. No way in hell I would hire that lunkhead to represent the biggest purchase of my life. Dude, where's my commission?

ragingbull
ragingbull
11 years ago

not paranoid:

In the immortal words of Gregg Halsey-Brandt ( ex-mayor of Richmond)

" Living in Richmond is never having to say you're Surrey".

The irrelevance of someone who trys to justify his existence in the Sewer ( surrey) is not lost on the knowlegable members of this forum. There are a plethora of reasons why The Sewer has earned it's reputation as 'loserville'. Surrey is synonomous with destitution and denial.

not paranoid
11 years ago

Post # 83 ragingbull

As George Bernard Shaw once stated never wrestle with a pig, you get dirty and besides the pig likes it.What a juvenile and disgusting statement. The relevancy of this forum has been lost. Have fun preaching to the choir.

ragingbull
ragingbull
11 years ago

RennieWhereRU?:

#76 , well said, what kind of a retard would live in Surrey ( The Sewer) at all. Why not not just whack off on the john and flush your sperm down the toilet instead of brutalizing your children with having to grow up ( thrown up) in that shithole of shitholes. It's a deadend community without peers. You have to really have shit for brains and be so covetous about this whole cheaper real estate thing to make a decision where Surrey ( The Sewer) becomes a viable option.

Anonymous
Anonymous
11 years ago

It's always the stupid who think they are much smarter than they are.

Accidentally stumbling on one small one bedroom the mediocre mortgage broker then goes on blogs and pretends to be even stupider than he is.