Comments on: TD: A bubble brewing?

By: Cleaning Services Va

Cleaning Services Va — Sun, 27 Dec 2009 23:58:01 +0000

Nice description.

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By: scullboy

scullboy — Thu, 03 Dec 2009 05:52:16 +0000

God bless you SUpratard, you're a dim little critter aren't you? My buddy at TD essentially ran an arm of the bank that loaned GOVERNMENTS money to complete infrastructure projects. My parents are wealthy entrepreneurs as well, and then there are the families in the East that own whole chunks of provinces and have been wealthy for many more generations then you and your family have been in Canada. People who have been wealthy for generations do not gamble with their cash. They calculate risk vs opportunity and invest based on that. This is something you just don't seem to get. Risk and opportunity are two sides of the same coin so to speak. Ordinarily if the risk is high, the opportunity to make money is also high. However in the case of Vancouver real estate the risk is now extremely high and the corresponding opportunity to profit is VERY VERY LOW. Many of not most bears understand this, which is why they are bears. It's like standing around a gambling casino. Bears are observers watching people make increasingly foolish bets. They know that while the gamblers have won the last few hands eventually they're going to lose and that will wipe out not only their profts, it'll take the grocery money and the kids' college funds too. The problem is the gamblers are so intoxicated with the success of their past wins they've gone beyond rationality and won't listen to the voice of reason. I don't mean to sound like a racist asshole but is there something in the Asian psychology that doesn't get this? All the Chinese guys I know loooooove to gamble but a lot of them are really bad at figuring odds.

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By: realpaul

realpaul — Wed, 02 Dec 2009 23:04:53 +0000

#11, The RCMP need some transparency? "From the mouths of babes" they say. No Duh!!!!!!!!!!! An immediate 'stop work' order would be more appropriate. As far as 'numbers' go, I suggest reading the papers. Count back the number of citizens killed by RCMP in the past year and tally that against the number of CDN soldiers killed in Afghanistan over the same period. Yeah thats right, pretty shocking isn't it? There needs to be immediate civilian oversight and removal of all personal files into the public domain. All agents under 50 should be given an independant psych evaluation. The RCMP members involved in atrocities and the cover ups should have thier benefits and pensions revoked and the budget should be directed towards paying victims reparations. As far as the 'gangbangers' are concerned it has been RCMP inaction over the years that has led to the proliferation of the problem as it exists. How were they suddenly able to come up with so much information after the media turned a fire on under thier asses. They have been complicit all along and should be permaently barred from police intelligence services.

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By: rp

rp — Wed, 02 Dec 2009 21:14:08 +0000

#49 @observer: However in early 2008 everyone reading financial blogs knew that most of Wall Street was bankrupt. The subprime losses were there, it was just a question of where the bodies were buried. The US was already in a recession (although this was disputed) and then Bear Stearns went under, confirming everyone's worst fears. It was perfectly clear that a crisis would occur. We now know that few of those massive losses will ever be realized. No large banks will go under. The government has sanctioned their fraudulent accounting practices, extended credit as necessary to keep them running, and monetized much of their toxic waste. Millions of people are also living mortgage free in houses they bought but aren't paying for because banks won't or can't recognize any more defaults. Furthermore, we know that real reform is impossible at least in the US. Even superficial reforms have been eviscerated by the banking lobby. The conversation on the internet has shifted from "how long until banks go bust due to lies and financial machinations" to "how long until countries go bust due to lies and financial machinations". The system has been trashed to save the bad actors, who are now clearly in charge and have their hand on the taxpayers' credit card. In this new era, I do not have much faith in numbers on a bank statement or stock in a company. Anything paper or electronic can easily be manipulated away or decimated outright. Much greater security can be had by owning a house, even though the government could conceivably take that though property taxes. That being said, I still have all my money in GICs, etc. I'm not running out to buy gold. I'm just saying, I understand why people would go out and buy a house and overpay now.

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By: crabman

crabman — Wed, 02 Dec 2009 20:41:08 +0000

Two other bubble cities also had condos called 'The Mark'; Scottsdale, AZ and San Diego, CA. Both projects were pre-sold at peak prices, but weren't completed until after those bubbles had popped. Who says developers don't have a sense of humour? http://www.livethemark.com/ http://www.themarksandiego.com/

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By: crabman

crabman — Wed, 02 Dec 2009 20:23:53 +0000

@Supraboy: Rich people share common traits, that is they take risks in life. Something you and a lot of bears don’t understand. What supratard doesn't understand is that rich people take calculated risks. They study the market, then place their bets if it makes sense to do so. The supratarded risk takers are just gamblers. Go look at Gold today, Doh! over $1200. Wait till gold rockets over $2000, you’d wish you had bought a property today. I bet you’re holding cash, shove it all into GICs, yup, that’s the way to beat inflation with your mentality. So, the 400% increase in gold since 2002 was inflation, eh? Boy you truly are a supratard!

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By: observer

observer — Wed, 02 Dec 2009 19:57:04 +0000

Although I have no hard evidence for the number of speculators in the market, the circumstantial evidence I've seen comes from how the market behaved in early 2008, before Fall 2008 when the financial crisis hit full steam. In early 2008, there was a marked increase in the number of new listings and decrease in the number of sales. One could attribute the decrease in sales to the prices hitting affordability ceilings given the interest rates at the time, but the fact that there was an increase in the number of new listings, at a time when the financial crisis was probably only known within certain financial circles, suggests to me that this increase was due to investors trying to sell at peak. The quick turnaround in our markets this year but large rental inventory also smells of investors deciding to hold on to inventory, helped by the low interest rate environment. Yes, the turn around was only possible with FTB coming in, but I also think there is a large shadow inventory out there which is just waiting to be unleashed at exactly the worst possible moment. Instead of letting the market correct to more reasonable levels, the policies this year (through purchase and extension of CMHC mechanisms) have simply created a whole new stream of FTB at higher debt levels who are sensitive to interest rate resets (i.e. a canadian subprime like situation). In a sense, what the government and banks have done is double up on the bet and hope the economy recovers enough to offset the later side effects. Personally, I think it would have been better to allow homeowners, who had already gotten rich without effort anyways to take the hit now and in a sense pay for the mess with those windfalls, rather than indebt the next wave of FTB at a higher level only to have it coming crashing it at the slightest lift in bond yields. This will surely happen one day when true recovery arrives.

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By: anon

anon — Wed, 02 Dec 2009 19:34:07 +0000

Speaking of price volatility, I remember that when prices were going up, analysts refuted the idea of a large number of speculators in the market, pegging them at 5-10%. Then when we had the market downturn, those same analysts came out and said that speculators accounted for at least 25% of the market. If the latter is true, you will always have volatility...

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By: observer

observer — Wed, 02 Dec 2009 19:25:24 +0000

@Dave: I personally think it is difficult to have stable RE prices given the way the market currently operates. If RE were treated less like a get rich investment scheme and more like a consumable priced in line with the service it provides (i.e. more in line with rents paid for housing), there could be more price stability, like in Germany for instance. However, our RE market is treated more like an investment vehicle for the economy in the way it is taxed and the way credit is loosely given to purchase it. It almost has borderline ponzi like qualities to it depending on how you view it. The significant amount of investors in the market, especially in Vancouver, makes it prone to price volatility. The RE market is also inefficient for many reasons: it is not very liquid, it is not possible to short RE, it is possible to straw bid up prices, detailed quality data on the housing market is not available from unbiased sources. This makes housing prices go up more than they should for longer than they should and then drop more than they should and for longer than they should, simply because too many people buy at the peak and there are too few people left to buy at the bottom. Government, CMHC, and bank intervention can have temporary influence over the market as we've seen but this control isn't omnipotent nor ever lasting, and neither does it come without side effects and often it simply postpones the inevitable at the expense of further detrimental effects.