#116 NLL, the current capital gains tax statute is somewhat nebulous. Although the intention was that residence of a specified was a must, I have heard from lawyers that this isn’t the case. One lawyer insisted he had played this one out in court and was found successful in an alternative interpretation. So, what would the ‘exemption’ actually manifest itself as through the CRA? Case by case?

I would hope that the Conservatives would overturn the capital gains exemption on all real estate holdings no matter what the situation. It would wake the population up and we’d have some genuinely interesting political times in this country for a change. A cash grab like that would have to be done at gunpoint.

Current score: -7 (to vote for this comment, please visit the site)

Current score: 5 (to vote for this comment, please visit the site)

Current score: 8 (to vote for this comment, please visit the site)

Current score: 6 (to vote for this comment, please visit the site)

“Speculators are often not good for a city and, from my experience, they are going to lose a fortune,” he said. “But there are no easy answers. It’s a declining city.”"

Current score: 1 (to vote for this comment, please visit the site)

Very interesting comments above on how counterintuitive it is that banks will lend you less if you put more down and are not CMHC insured but makes perfect sense…can you say Moral Hazard.

Current score: 21 (to vote for this comment, please visit the site)

Current score: 0 (to vote for this comment, please visit the site)

Current score: 9 (to vote for this comment, please visit the site)

I agree with the tax cutting done by the Conservatives

I don’t. In particular, the cut in the GST from 7% to 5%, at a time of record low savings and low unemployment, was one of the most ill-advised fiscal moves ever made by a Canadian government. It was tailor made to induce an unsustainable surge in consumer spending and increase consumer debt even more, and greatly weakened the fiscal capability of the government to deal with the current recession.

They should have INCREASED the GST, and then they would have had some room to cut it, or better to cut income taxes, NOW when we need the stimulus.

Current score: 13 (to vote for this comment, please visit the site)

http://www.greaterfool.ca/2009...../#comments

#104 OttawaMike on 10.24.09 at 7:48 pm

Could this be a way of tempering the bubble?

I think a modification is quite possible.

Current score: 3 (to vote for this comment, please visit the site)

Current score: 8 (to vote for this comment, please visit the site)

Current score: 0 (to vote for this comment, please visit the site)

Wait a minute, I went through to the PDF linked at the Alberta bubble site you linked to Squidly and all the numbers for CMHC loans start in 1987.

Now I’ve been saying for YEARS that in my estimation 1987 is when things started to go off track and prices should fall back to around 1986 levels (adjusted) when the dust settles. Dave has been complaining that it’s not possible for a bubble to last longer than mortgages (I never could figure out the logic in that myself) but maybe the precipitating factor in the current mega-bubble is the CMHC? It would totally make sense to me. Anyone else see that in the graphs? Prices here just suddenly and irrationally took off in the late ’80s and haven’t returned to reality since.

Current score: 5 (to vote for this comment, please visit the site)

Current score: 5 (to vote for this comment, please visit the site)

Current score: 1 (to vote for this comment, please visit the site)

Ego much?

Current score: -1 (to vote for this comment, please visit the site)

#65 U, Dude/ette, are you that anal over your inability to understand whats being said? Are you soooo jealous and covetous over my ability to travel vs yours or anybody elses? Do you hate the guy with the better car, the girlfriend, who got the promotion when you’re so sure it should have been you? You sound like the road rage mentality where you think that making payments you can’t really afford gives you the right to be ‘first in line’. Do you get mad at people because they seem smarter than you? Did you buy a pick up truck to make yourself feel bigger and hide that very small wee wee of yours? Get a life pal or do a flyer. Clown.

Current score: -1 (to vote for this comment, please visit the site)

“We will attempt intelligent and courageous deflation, and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend Republican capacity…it will be an example to stimulate thrift and economy in private life.

“Let us call…for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic.””

http://dailyreckoning.com/macro-for-dummies/

Current score: 1 (to vote for this comment, please visit the site)

#103, the major differance is that the Chinese made the money available to commercial ventures ie the factories to spur growth and get people back to work en masse. That money fed directly into profits and jobs rather than debt backed give aways as we have seen here. The factory is a growing profitable enterprise money and job spinner whereas the single family house market is a one shot debt pit and non job spinner. It would seem like the Chinese have us beat where the rubber hits the road in the smarts race.

Current score: 4 (to vote for this comment, please visit the site)

“Hong Kong real estate requires 40% down”

http://tinyurl.com/yhek9k7

Some excerpts:

Concerns about a growing bubble in Hong Kong’s high-end property market pushed central bankers here to increase the required down payment on luxury homes to 40%, from the current 30%.

While property prices in much of the rest of the world (NOT IN CANADA, though!!) continue to languish, prices in traditionally volatile Hong Kong have been on a tear this year, thanks in large part to low interest rates and a wave of liquidity from mainland China, where Beijing last year unleashed a four trillion-yuan (US$585.6 billion) stimulus.

Current score: 6 (to vote for this comment, please visit the site)

#74 P, Nafta, OMG how could we forget to be fair to the Americans? You’re right on that issue of course. I guess I was having a simplistic ‘Bambis Mom grazing in the forest moment’ when I was thinking about the possibility of what other programs that may have been initiated to support Canadian industry with the same ratio’s of money going into pumped up popcorn shacks in the valley. Of course we all know what happened to Bambi’s mom in the movie.

Current score: 0 (to vote for this comment, please visit the site)

“Soros calls Wall St profits ‘gifts’ from state”

http://tinyurl.com/yfn8k8d

Some excerpts:

he big profits made by some of Wall Street’s leading banks are “hidden gifts” from the state, and taxpayer resentment of such companies is “justified”, George Soros, the fund manager, said in an interview with the Financial Times.

“Those earnings are not the achievement of risk-takers,” Mr Soros said. “These are gifts, hidden gifts, from the government, so I don’t think that those monies should be used to pay bonuses. There’s a resentment which I think is justified.”

Mr Soros joins a transatlantic chorus calling for limits on risk, leverage and compensation at big banks….

“There is a general lack of confidence in currencies and a move away from currencies into real assets,” he said. “There is a push in gold, there’s a strength in oil and that is a flight from currencies.”

Future inflation, anyone???

Current score: 3 (to vote for this comment, please visit the site)

Thursday, October 22, 2009 11:38 AM
Dollar over housing

David Berman

The Bank of Canada released its quarterly monetary policy report on Thursday morning, two days after it caused turbulence in currency markets when the bank reiterated its commitment to keeping interest rates unchanged until at least next June.

The report provided some more information about that commitment, making specific references to the Canadian housing market, which has been picking up lately – to the point where some observers believe it is being fed by low rates.

Here’s what Eric Lascelles, chief economics and rates strategist at TD Securities, said in a note: “A telling message that continues to be sent is that the strength of the Canadian dollar is the more important factor than housing market strength,” he said.

“In fairness, the housing market did receive more ink than it did on Tuesday, but the references were still quite calm. Recent strength was characterized as being primarily due to ‘pent-up demand for housing,’ and the overall assessment was still fairly blasé: ‘the housing sector appears to have bottomed out, and some firming in house prices is evident.’ There is nothing to suggest the Bank of Canada has any desire to go on the warpath against rising home prices, despite Governor Carney’s earlier sympathetic comments towards leaning into asset bubbles.”

Madness, dear friends, madness…Carney is so wrong, but we will all have to apy for his misplaced judgment. Wait a few more months and then we can start evaluating the new inflation figures.

Current score: 4 (to vote for this comment, please visit the site)

I must admit, however, that the handling of the economic crisis by the Conservative party is absolutely horrible.

- excessive lending is the cause of the problem? Let’s lend some more through government-insured CMHC loans!

- excessive government intervention in the economy? Let’s spend some more through an economic action plan which allows people to fix their patios… (that’s some productive investment, isn’t it?)

- fiscal conservatism and careful debt management? Let’s generate a massive current account deficit and additional increase in debt which adds one third to the existing load (part of it stealth-debt, through liabilities and guarantees due to CMHC, which will be there for decades to come!).

- free markets and economic freedoms? Let’s intervene on exchange rate markets to limit the ascent of the C$; let’s mess around with taxation of housing, income, resources; let’s provide huge subsidies (and I mean huge!!!) to declining sectors (see auto, forestry);

These guys have no credibility, probably less than the ones before them. they will hopefully be wiped out at the next elections.

And this is without even starting to talk about the provincial politicians, like Mr Campbell. Let’s not get there.

If the real quality of people becomes evident during crises, i think we know how our elected officials score.

Current score: 20 (to vote for this comment, please visit the site)

I am with flip on the inflation problem. This is not just going to be a question about Canada, but a question about the value of the C$ and trade with the US.

You are mighty optimistic about our politicians. I think it is clear by now that the US will inflate prices to some extent. Canada can play tough and get a loonie above 1.10 US$, with all its consequences. Or it can follow suite.

Following suite means also lower unemployment and pain in the short term, say next 3 years. Why wouldn’t they do it? Are they so honest? Do we have check and balances that could prevent that?

If the US will do it, so will Canada.

Current score: 2 (to vote for this comment, please visit the site)