The banks are struggling
Canadian banks have a problem. They’re having a difficult time boosting loans at a time when prospective customers don’t seem as keen to load up on new debt.
Royal Bank chief executive officer Gordon Nixon said the banks must now find ways to build their lending operations – a key driver of their profits – without being coaxed into making unattractive loans just to get more business in the door.
“What you hope you don’t see happen is banks starting to do stupid things again,” Mr. Nixon said in an interview, referring to the past several years where credit was easy to come by, and banks around the world were all too eager to lend.
“Right now we’re in an environment where demand for credit is very, very low … It’s not that credit isn’t available – there’s not a lot of demand.”
Full article in the Globe and Mail, hat tip to RP1 for the link!
September 6th, 2010 at 11:35 pm 1
This is what happens when we had 'borrowed the demand from the future' in the last couple of years (when credit was loose and demand was high). Not so surprising isn't it? as we consider the basic of economics…
Like or Dislike:
0 
0
September 6th, 2010 at 11:47 pm 2
Like my daddy once said, you can only squeeze so much water from a rock…
I bought my car with 2.9% financing two years ago while my term deposits were making slightly over 4%. Right now after they matured, they're sitting at virtually zero and the inflation is eating away my savings. So the first thing to do was to pay off the car loan and stay away from any loans. Buh-buy to the bank, at least for a while.
It's interesting that in theses times of "banking struggle" credit card companies are still charging 29% on outstanding balances… I guess it's because people carry thousands of dollars in balances on multiple cards. Whatever they have left from paying the mortgage, they give away in interest payments and have no way out from the insanity – they're are true modern day slaves…
And on a personal note, if you are in any way involved in motorcycling, you know that BC motorbike industry is in deep shit. Dealerships are closing, the unsold inventory is mounting all while people have no more money to spend on toys. And they cannot afford financing, as there is no such thing as zero% financing on a motorcycle. I suppose boats and RVs must be sharing the pain…
I wouldn't worry about the banks though, they are (like) the mob, and the mob always gets their money – one way or another.
Like or Dislike:
0 
0
September 7th, 2010 at 12:32 am 3
Inventory is dropping on a daily basis. What is going on?
I am confused. People don't need to sell or what?
Like or Dislike:
0 
0
September 7th, 2010 at 12:42 am 4
Alum Says: Inventory is dropping on a daily basis. What is going on?
I am confused. People don’t need to sell or what?
Perhaps it's indicative of just how much of a 'I buy 29' speculative market Vancouver became during the Harper Liquidity Flood. If so, there's almost no bottom to the crash once they figure it out.
Like or Dislike:
0 
0
September 7th, 2010 at 12:44 am 5
Let the market fall, it's the advise from some in the US. Probably the Canadian government should listen and stop intervening
Full article in the NYT http://www.nytimes.com/2010/09/06/business/econom…
Like or Dislike:
0 
0
September 7th, 2010 at 12:56 am 6
In the last post an american living in vancouver provided a link to an article about court cases in california that had refused "MERS" applications to foreclose on certain homes because MERS couldn't show they owned the mortgage (mortgages were bundled and bought and sold – MERS recorded the transactions).
When MERS tried to foreclose the judge said no. MERS doesn't own the mortgage. It was just a system that recorded the many sales of bundles of mortgages.
the poster opined that 65 million americans might live in foreclosure proof homes..
it occurs to me that this might not be so since the MERS system could be used to show how each mortgage was sold from one entity to another. This paper trail might allow the last bank to foreclose since they could show they owned the mortgage.
I don't think the banks would own transfer taxes either. I seem to recall that mortgages (in Canada at least) show that the owner of the property is "HOvering" and then list the bank as holding the mortgage or having a lien of some kind.
If my bank chose to sell the mortgage then that's up to them. I would end up owing some other bank. but I don't think the ownership of the property changed.
I don't think a transfer tax would be owed by the bank to the gov
If it turns out to be impossible (for some reason) to provide proof of how each mortage was bought and sold then perhaps you'd have a foreclosure proof house. YOu might even have a house where you didn't have to pay the mortgage. but you might have a house that you could not sell or transfer since the lien/mortgage would never be removed.. or something
Like or Dislike:
0 
0
September 7th, 2010 at 1:01 am 7
@alum, regarding "Inventory is dropping on a daily basis. What is going on? I am confused. People don’t need to sell or what?"
When we sold in January 2001 (the bottom of the market), no one wanted to sell, no-one wanted to buy or possibly no-one was able to buy. There wasn't much inventory, but in spite of this we took a beating, selling for much less than we had paid 5 years earlier. Inventory levels don't matter if there are no buyers. Price goes down anyway.
Eventually, all the speculators will have to sell, unless they have real wealth and are able to hang in for the long term, a decade or so. I suspect most speculators don't really know what they're doing, don't have the financial resources to hang in for a decade, and will eventually be forced out, by foreclosure or by selling at a loss.
Right now, the speculators are dreaming that things will get back to "normal", lol. As the saying goes, "denial" is not a river in Egypt.
Like or Dislike:
0 
0
September 7th, 2010 at 1:03 am 8
Alum Says: Inventory is dropping on a daily basis. What is going on?
I am confused. People don’t need to sell or what?
Of course they do, silly!
They just want to wait a little until the market "fixes itself" and they can make the profit they were promised they would. That's the only reason they bought, remember?
Like or Dislike:
0 
0
September 7th, 2010 at 1:38 am 9
The Cdn banks are hardly "struggling", they just aren't making as much as they did in the record years. What they'll lose from lending (non CMHC), they'll make up in plenty of other ways as they have always done in the past. This basically means that fees for bank accounts, credit cards, LOCs, Forex transactions etc etc are going up and there is nothing you can do other than bend over and take it in the "you know what". The same goes for anyone with savings out there earning pretty much nothing on their money despite a couple of recent rate hikes. Next thing you know, they'll start penalizing you for not spending the money or leaving your account dormant.
Like or Dislike:
0 
0
September 7th, 2010 at 1:41 am 10
BOC rate hike expected tomorrow.
http://www.cbc.ca/money/story/2010/09/07/bank-of-…
Like or Dislike:
0 
0
September 7th, 2010 at 1:43 am 11
@Dan in Calgary:
The government should unify minimum down-payment to 20% for everyone. Regardless of being an owner, investor, or first time buyer.
5% down-payment and then paying (approx) another 5% to CMHC is stupid !
Like or Dislike:
0 
0
September 7th, 2010 at 2:00 am 12
Yep, some people have to sell.
Ugly flipper house on East Columbia in New West is reduced:
http://vancouver.en.craigslist.ca/bnc/reb/1940884…
Like or Dislike:
0 
0
September 7th, 2010 at 2:02 am 13
CMHC backing should not be available to investors and speculators, period. It only hurts home buyers.
Like or Dislike:
0 
0
September 7th, 2010 at 2:08 am 14
CHMC should only back FTB.
Like or Dislike:
0 
0
September 7th, 2010 at 2:13 am 15
CMHC should disband mortgage insurance entirely. All it does is artificially inflate prices.
Even if they only support first time buyers they're going to be increasing prices which in the end hurts the FTB.
Banks should be forced to take the risk so they do their damn homework instead of sitting on their lazy asses and letting taxpayers take the risk.
Like or Dislike:
0 
0
September 7th, 2010 at 2:15 am 16
Lookie here!
FREE BOAT CRUISE w/ FIRST HOME BUYER SEMINAR
Wow, stuck on a ship for 2 hrs with realtors, mortgage brokers, and real estate Nazis.
Looking more and more like time share selling tactics!
http://www.firsthomeinfo.ca/first-time-buyer/book…
Like or Dislike:
0 
0
September 7th, 2010 at 2:18 am 17
I wonder how many seniors swimming in the "wealth" of home equity will forget to apply for the CPP. Oh well, the rest of us will be richer for it:
http://www.vancouversun.com/business/Costly+mista…
Like or Dislike:
0 
0
September 7th, 2010 at 2:57 am 18
I would disagree that banks are 'struggling'…they are 'struggling to increase profitablity maybe..but they ared oing far better than many other sectors after the recession hit.
http://www.tdwaterhouse.ca/markets/index.jsp?refe…
The shareholders aren't struggling, thats for sure…dividends are on time and on schedule. I think the 'struggling' comment is part of a public relations campaign as banks ( as always) jostle for favor as new legislation may be needed to reorganize the financial landscape.
Like or Dislike:
0 
0
September 7th, 2010 at 3:02 am 19
@Drachen:CMHC should disband mortgage insurance entirely.
There is something to be said for having MI available when "nobody" thinks housing is a good investment. If CMHC only insures loans based on their inherent cash flow value from rents — thus allowing responsible people with incomes to buy homes at long-term sustainable prices when nobody wants to lend to them — I think it can work. This is not what they do: they use appraised value.
CMHC has deviated from its mandate of providing AFFORDABLE housing to Canadians. Allowing homeowners to take on exorbitant levels of debt does not produce affordable housing. Providing loan guarantees and grants for housing geared towards low income households does. And it costs money to do this.
Like or Dislike:
0 
0
September 7th, 2010 at 3:21 am 20
The concept of 'affordability' should be examined. Are we really just talking about our governments sly campaign to extend credit and pile the subsidy onto the back of that taxpayers and future generations? After all, we all know ( those of us with a brain anyway)that a majority of Canadians can't 'afford' housing…or even food with their disposable ( after tax income) although mentioning thiss causes certain naive elements to set their hair on fire…as if the disonance is such that they can't process the information) cash after they deal with being 150% in debt before they get their paycheques.
We only have to look at a society that does not have credit…
http://www.nationalpost.com/news/Mozambique+rever…
to see that food costs alone are skyrocketing and are in themselves…unaffordable…..we do see our lines of seniors…young …..single mothers and working families increasing dependant of subsidies and charity. Without the 'credit' extended to a large segment of our population to keep bread on the table it is easy to see Canadians are one step away from starvation….a situation that is only masked by an artificial campaign of extending credit and monstrous taxation that robs the future economy to pay for these economic mistakes of inflating things like real estate today. The current attempt to bolster real estate prices only insures that all other consumer items will also inflate to 'unaffordable' dimensions and cause Canadians to be driven further into a debt trap that a majority will never extricate themselves from.
Perhaps the people of Mozambique only need more visa cards and they would all eat like Canadians. With the points they'd collect they could fly to Canada and see how we handle the growing lines at the food banks that keeps our people from having to riot. After all …they only increased bread prices by 30%…our bread prices have more than doubled and tripled……how do we keep buying. Well……buying groceries on credit just lets you bury your head up your ass for a while longer in Canada….simple eh?
Like or Dislike:
0 
0
September 7th, 2010 at 3:25 am 21
@Bilbo Bloggins:
Are there free drinks included on that cruise? So as to dull the pain from being lectured for two hours about our "buyers" housing market?
Anyone who shows up might as well just stick a sign on their forehead that says "I want to be screwed out of every penny I will ever earn!"
Like or Dislike:
0 
0
September 7th, 2010 at 3:35 am 22
@pricedoutfornow:
I would'nt be surprised. Alcohol lowers inhibitions.
Why do you think Vegas casinos dole out drinks at the table for free.
Like lambs to the slaughter… muahahahhaha!!!
Like or Dislike:
0 
0
September 7th, 2010 at 3:38 am 23
@ jesse. Don't think it'll work. As soon as you increase the number of applicable buyers by necessity it raises demand and with it prices. I have no issue with government backing of mortgages in very limited and specific cases, for example working with low income applicants in marginalized locations to revitalize slums and ghettos. Problem with it is, like Keynesian economics, it's not a bad idea until you hand it to politicians and the tool gets re-purposed to pump GDP or get reelected.
Like or Dislike:
0 
0
September 7th, 2010 at 3:55 am 24
Will the homeless begin rioting because McD's has increased the cost of 'value' by 50%??????? Maybe the homeless need more credit cards.
http://www.myfoxny.com/dpps/news/homeless-upset-a…
I have to think that there are a lot of family's that are eating crap because of the mortgage and the two car loans that keep Mom and Dad both working two jobs while still not able to keep food on the table. So…..what does 'affordable' mean…and do whom? What is the definition of 'affordable' today. Does it mean that there is five dollars left after the mortgage payment and the family eats shoe leather soup for two eeks after the mortgage is paid. Is that 'affordability' to the government?
Standard of living is another misnomer that is glossed over by the media whores. Whose standars are they talking about? Is it the ability to circle around the granite counter tops and prey you don't lose your job this month? Is this why hockey registartion in Ontario has gone down from ten thousand ten years ago to barely two thousand today? We see the same thing in Vanshithole where childrens sports programs are imploding because a large number of parents can no longer afford the cost after the mortgage payment. Are these the same 'affluent ' families that are lining up at the foodbank?
What is affordable ?……are the pimps saying that it means that the suckers are handing over 99% of their income and still have credit to buy groceries? If the government doesn't raise rates then the gap between the disposable income and the 'affordable' monthly payment will again close….. pushing Canadians into unaffordable real estate and becoming permanent fixtures in the bread lines.
Like or Dislike:
0 
0
September 7th, 2010 at 4:26 am 25
@fixie guy: "As soon as you increase the number of applicable buyers by necessity it raises demand and with it prices."
Yes I agree but if it's limited to rental value it should have a relatively muted effect in speculative markets. Besides, there's nothing stopping companies like Genworth from filling the gap unless MI is specifically legislated to be limited in scope or banned altogether.
Housing has been in a bubble for so long I can barely remember when housing was considered nothing more than a place to live. In this particular environment it can be destabilizing to a country or city if lenders are unwilling to allow people to borrow to own property, either to let or to occupy. In my opinion, ownership should always be an available choice to those who are capable but it should not — and indeed can not — be a long-lasting situation where people pay a premium for ownership. In those situations, like now, CMHC should not be offering MI at all.
I think we can agree that CMHC's activity in the current market environment is causing more problems than it's solving.
Like or Dislike:
0 
0
September 7th, 2010 at 4:27 am 26
Canadian wages fall far below what the recent polls suggest as 'happiness'.
http://www.guardian.co.uk/science/2010/sep/06/ear…
Is this why so many are borrowing themselves into a coma and pretending they have a decent standard of living when in fact they are in debt more than any in the western world? How long can this facade remain? How can real estate prices continue to go up when incomes have stagnatated.
Vancouver..by the numbers…is the 'unhappiest and most unafforbale place on the planet.
Like or Dislike:
0 
0
September 7th, 2010 at 4:33 am 27
"I wasn't worth a cent two years ago, and now I owe two million dollars."
Mark Twain (1873), The Gilded Age: A Tale of Today
"The Infinite Elasticity of Credit" good read
http://theautomaticearth.blogspot.com/2010/09/sep…
Like or Dislike:
0 
0
September 7th, 2010 at 4:38 am 28
@jesse:
"This is not what they do: they use appraised value."
Appraised by who?
Like or Dislike:
0 
0
September 7th, 2010 at 4:58 am 29
@ jesse " In this particular environment it can be destabilizing to a country or city if lenders are unwilling to allow people to borrow to own property, either to let or to occupy."
Well there's the rub, the environment is artificial and pathological. I'ld buy the notion of ramping the transition, if rather quickly, for the social benefit of stability but see none in maintaining the practice permanently. Banks should bear real market risks and not be backstopped on my dime.
Like or Dislike:
0 
0
September 7th, 2010 at 5:03 am 30
@realpaul:
Realpaul, I hardly ever agree with your views, but I have my own suspicions that many Canadians are in fact living on the edge of hunger, After all you cannot lease or rent-to-own food and if the credit cards are maxed out, your friendly grocer will not let you buy anything on the tab, not theses days…
According to my 15-year old daughter, social status amongst teens these days is measured not by what clothes you wear, what Iphone generation you use, not the car you drive or what size your flat screen tv is.
It's the contents of your fridge.
Every single time she has friends over they get mesmerized by our full fridge, stuff themselves wit seemingly basic ingredients and proclaim that "we must be fuc**ng rich to afford all this food!!!". She's getting used to this now but at first she thought it was weird.
That and the fact that most of their friends are always hungry at school and jelous of her sandwiches. I explained that it's the "growing-up thing" and how young boys eat a lot in general. I didn't want her to feel too special.
We're not rich by any standard, btw, just have no debt.
Like or Dislike:
0 
0
September 7th, 2010 at 5:09 am 31
@fixie guy: "Banks should bear real market risks and not be backstopped on my dime."
Perhaps you're right but I think in almost every existing democracy — even the more "free market" ones — it's not realistic. There is too much ability and will to implement government solutions to economic problems. Unless there is a paradigm shift in the way voters demand the government to step into the economic cycle, CMHC will play a meaningful role.
Perhaps you're debating larger policy issues but, given the electorate expects government intervention in market extremes, CMHC has a role to play. I would argue its role should be reverting the ownership-rental calculation to close to parity (if not making ownership slightly cheaper), in which case the best it can do now is cut the legs from under the housing bubble or just let it burst instead of perpetuating it.
Like or Dislike:
0 
0
September 7th, 2010 at 5:10 am 32
@giggling: This is so true, my child attends one of the high schools west of Granville and everyday her friends who live in multimillion dollar homes beg her for food from her lunch. I always thought it was because they were too lazy to prepare a lunch or lunches for school aren't part of their cultural background, interesting.
Like or Dislike:
0 
0
September 7th, 2010 at 5:10 am 33
@giggling:
Interesting, reminds me of my youth ;p When I was growing up, we lived in a smaller city, in the downtown area (not exactly ghetto, but mid-to-lower-income for sure). My friends were often coming over and opening the fridge and helping themselves to "luxury" items like cheese. I often heard things like "We have no food until family allowance day." Oh, the good old days….
Like or Dislike:
0 
0
September 7th, 2010 at 5:15 am 34
@Anoymous: "Appraised by who?"
By appraisers, silly!
And sometimes computers as is/was the case with BMO. They had a highly publicized case of mortgage fraud in Alberta in part due to the automated appraisal system they were using. Appraisals are a relatively opaque concoction of rental value, market prices, and financing rates. From what I've seen for residential units, previous sale prices are the predominant, but not the only, inputs.
And yes I think granting MI based predominately on market value is a gross mistake.
Like or Dislike:
0 
0
September 7th, 2010 at 5:19 am 35
@jesse:
"By appraisers, silly!"
But nobody ever enters a property to perform an appraisal.
Like or Dislike:
0 
0
September 7th, 2010 at 5:23 am 36
August 2010 Vancouver Real Estate Stats Released
http://agentwill.com/statistics/august-2010-vanco…
Like or Dislike:
0 
0
September 7th, 2010 at 5:30 am 37
"But nobody ever enters a property to perform an appraisal."
This is only the case some of the time. I work as an appraiser and have never submitted a "full" appraisal report without doing a complete inspection (inside/outside) of a property. Of course, the Appraisal Institute of Canada will have you believe all appraisers do this when, in reality, they've got their heads so far up their own asses they can taste themselves. Just like with realtors, there are good/reputable/honest appraisers and crappy/dishonest appraisers. However, given the hands-off approach of the Appraisal Institute of Canada (the majority of whose membership is approaching retirement age so they can't be bothered to actually save the industry), I can pretty much say that sooner rather than later the crappy appraisers will become the rule rather than the exception… especially since the unregulated appraisal management companies have basically begun running the industry, ordering appraisals for banks from the lowest bidder (and let's face it… if you're willing to charge less for your work than anyone else, you're probably not that good at your job).
Like or Dislike:
0 
0
September 7th, 2010 at 5:46 am 38
@giggling: If what you are saying is true, that is nothing short of mindblowing. In that sense, those of us who have been financially responsible might be living in a bubble of our own, isolated as it were from the troubles of the over-debted who have no money left over after taxes and housing expenses. And children really do look at things differently, for them the life they have day to day is what they consider "normal", so it's always interesting the things they say,
Ever since I've lived on my own I've never wanted for basics like food, although I certainly know what that is like, and for reasons other than debt slavery.
Like or Dislike:
0 
0
September 7th, 2010 at 5:47 am 39
There, I said it, slavery. In a gilded cage.
Like or Dislike:
0 
0
September 7th, 2010 at 5:51 am 40
I operate a business with an RBC line of credit. We bought the business a few years ago and at the time the business was in trouble. We saved and did the bank a huge favour as they were really worried about default. Company went from red to black and was declared a huge success by them. We went back in to renew the line of credit and were treated like total crap. It was incredibly insulting.
Our major banks are terrible. They only work for major corporations. They are too big, too inefficient and too arrogant.
Like or Dislike:
0 
0
September 7th, 2010 at 6:05 am 41
New Listings 156
Price Changes 101
Sold 37
Like or Dislike:
0 
0
September 7th, 2010 at 6:10 am 42
@Junius:
Our major banks are terrible. They only work for major corporations. They are too big, too inefficient and too arrogant.
That's why some consider them to be yet another level of government.
Like or Dislike:
0 
0
September 7th, 2010 at 6:11 am 43
I have it on good authority that the "ugly" flipper house from comment 12 is owned by a realtor! And a discount realtor at that!
Ha! Drank too much of the Koolaid, did he? Can we make him a special sidebar badge and watch him drown?
Like or Dislike:
0 
0
September 7th, 2010 at 6:14 am 44
Come on bears, do not buy bank complaining hook, line and sinker. How can RBC say 'struggling' and 1.28 Billion in earnings in the same breath without laughing? Canadian banks are not struggling, but probably jostling for political gain.
Like or Dislike:
0 
0
September 7th, 2010 at 6:14 am 45
@Junius: Welcome to Canada, where the banks treat you like they're doing you a favour!
If you think the CUs are different, think again. My wife's firm couldn't even get an LOC from them, even though she had 4 straight years of net income, cash in the bank, debt free and had a personal perfect credit score. The final insult? Her business partner (a older male) was able to get one for the company within 10 minutes.
This is part of what's wrong with the industry. Banks pay lip service to "helping" small businesses. But any small business owner knows it's a PR stunt. Banks would rather chase govt backed mortgages and "prestige" deals (i.e. – large developers, like say… O&Y, Brascan or Len Barrie!), than go through the process of lending to real small businesses.
I had my own issue years ago with CIBC, who kept passing around our company account like it was a rugby ball, until they told us they would be charging a $500/mon minimum service fee. I asked them if they still wanted our business, and the curt reply was "no."
Like or Dislike:
0 
0
September 7th, 2010 at 6:18 am 46
Well, judging by how unpleasant most bear here are, I am not surprised the banks don't want to deal with them. Who needs customers like that?
Like or Dislike:
0 
0
September 7th, 2010 at 6:27 am 47
@ giggling
"BC motorbike industry is in deep shit"
It is not just BC. Primary vehicle sales have not recovered to sales levels prior to the recession, nevermind the luxury of a second/pleasure vehicle.
The HST is now added to all private vehicle sales, and most motorcycles are sold privately – increasing the cost 7%.
Then there is Bill 14. The struggling industry will see more struggles starting Sept 20. The rules change for all drivers (impounded for excessive speeding, stricter DUI penalties, …) yet motorcycling takes a special hit with new regulations on helmets and eventually engine size. Considering most riders either love cruising with a skull cap, or dragging a knee on a SS, this new law takes a lot of fun out of riding for both.
Like or Dislike:
0 
0
September 7th, 2010 at 6:33 am 48
OT but it looks like SSB's 24/7 commenting has finally caught up with him, no time to tidy and forgot to pay the mortgage I guess:
http://www.ianwatt.ca/ActiveListings.php/Details/…
Like or Dislike:
0 
0
September 7th, 2010 at 6:33 am 49
@SuperSmartBull: "unpleasant" ain't got nothing to do with making money. You are a riot.
Like or Dislike:
0 
0
September 7th, 2010 at 6:46 am 50
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain”- Robert Frost.
I am not ashamed to admit that our household income is "only" $120k, and since we do not want to spend $3000/month on housing, no half a million bucks mortgages for us, thank you very much.
Like or Dislike:
0 
0
September 7th, 2010 at 6:59 am 51
@taylor192: Offtopic, but most of Bill 14 seems reasonable to me. Some things are pushing a bit, that's expected from any legislation, like prohibition for passengers under 16, and like 5 section 194.10 (riding side by side), which is BS, but there are more worrying things like 16 section 215.8.1, which allows an officer to hand you a prohibition for basically any reason whatsoever.
Just another in a plethora of selective enforcement tools to take you down a peg if you get too lippy.
Too far down these bills become unreadable due to amount of referencing required to make sense of anything.
But I don't see how the bill itself will have any impact on bike sales. Not like anyone reads the motor vehicle act before buying wheels, or ever.
Like or Dislike:
0 
0
September 7th, 2010 at 7:00 am 52
@jesse:
A market extreme in housing at the low end is when buying is substantially cheaper than renting, like in the 1930's. That means that the housing market is facing a true shortage of capital and that's justification for the government to intervene.
The fact that buying is as expensive as, or more expensive than, renting is evidence in itself that there is adequate capital for the RE market and reason in itself for the government not to guarantee mortgages.
We are now of course facing a market extreme at the high end, but the government continues with policies that inherently inflate prices.
And I'll sorry to say I think most of the public wants the government to intervene in favour of higher prices, all the time. It will not and cannot work. You cannot get something for nothing. A lucky individual might, but not the market collectively.
Like or Dislike:
0 
0
September 7th, 2010 at 7:40 am 53
@MachoNacho:The banks and credit unions are bastards to small and medium sized business because it is their own money they are lending and risking. They don't have CMHC and endless taxpayer dollars to back up those loans in case the borrower can't pay. They lend out on traditional and rational criteria and actually research the ability to repay.
Consumer loans that are 100% backed by the CMHC and taxpayer money are a totally different animal and they fall over themselves trying to get mortgages out the door. They GIVE money back and offer ZERO down – hey wait… ZERO down? I thought the new regs did not allow that as it was classified as sub prime?
Can you imagine a bank offering cash back on a personal business loan to someone with no colatteral? NFL (not f'ing likely)
What a fucked up situation we live in.
CIBC (up to 7% cashback!!!)
RBC (also 7% cashback!)
Northwood Mortgage (5.5% cashback)
TD Canada Trust (5% cashback)
Scotiabank (up to 5% cashback)
PC Financial (5% cashback)
Laurentian — 5% cashback
CanEquity – no money down
Mortgages Canada – 0% down
Mortgage Intelligence – no down payment
Centum – 0% down
Ontario Equity (part of CanEquity) – no money down
Like or Dislike:
0 
0
September 7th, 2010 at 8:06 am 54
@patriotz: "We are now of course facing a market extreme at the high end, but the government continues with policies that inherently inflate prices."
My conclusion is CMHC believes permanently higher prices are the norm and they have to enable people to purchase within this "new paradigm." That is a gross error in policy based on what has been observed in other countries. If their policy wonks determine it's high prices causing unaffordable real estate (duh) their mandate should be to reduce the market price of housing.
Until there is a fundamental shift to understand how real estate valuations are anchored instead of using market price as a gauge, CMHC will be a bad idea. The concept of providing a counter-cyclical force like other government policies (such as EI) just isn't applied to housing but it could have a place. That is, smoothing housing cycles should be a two-sided subsidy of disabling unaffordability when prices are high and enabling affordability when prices are low. CMHC has had good experience with the latter but no idea how to do the former. The minimum that could be done is mothball CMHC when prices are overvalued vis a vis rents and have government fund its efforts properly when prices are fairly valued but lenders refuse to finance. The "disabling unaffordability" function is simply accumulating tax revenue to fund future CMHC expenditures.
Abolishing CMHC entirely is another option but I'm convinced there would be political pressure to reconstitute it in severe housing depressions. I think it more pragmatic to make its policies symmetric as the "second best" option.
Like or Dislike:
0 
0
September 7th, 2010 at 8:18 am 55
@jesse:
This is of course is exactly what was believed by banks and other mortgage lenders in the US during the first half of the decade, a belief which was directly responsible for the global financial crisis.
So CMHC either can't learn, won't learn, or someone is pulling the strings. Take your pick.
Like or Dislike:
0 
0
September 7th, 2010 at 8:20 am 56
Fixed rates are about to go up.
Here’s two charts for those who want to see how high they’ll go (variable rates will follow). Second one clearly shows the 13-year trend channel that bond rates have been in and why they’ll start climbing from here. Makes sense contrarily, since most think they’ll keep falling from here.
http://www.mcoscillator.com/learning_center/weekl…
http://blog.kimblechartingsolutions.com/2010/09/6…
Like or Dislike:
0 
0
September 7th, 2010 at 8:29 am 57
#45 Macho Nacho,
I hear ya. They are all the same.
Lately it is getting down right weird with mine. I got a note last week from my private banker offering a "special" mortgage rate to preferred clients. It was a great rate but he knows my feelings on the housing situation.
So I sent him a note with a quote in it from one of their economists who recently stated that houses are over valued. So why is he pushing me into the market?
No response.
Like or Dislike:
0 
0
September 7th, 2010 at 8:30 am 58
@Tony Danza: #48
What in the hell was that? My eyes hurt.
I can't believe Ian Watt has sunk so low, it's like watching a episode of Hoarders.
Like or Dislike:
0 
0
September 7th, 2010 at 8:37 am 59
so far so good
New Listings 260
Price Changes 153
Sold Listings 80
Like or Dislike:
0 
0
September 7th, 2010 at 8:47 am 60
patriotz Says: So CMHC either can’t learn, won’t learn, or someone is pulling the strings.
Put me down for strings. I believe the CMHC mandate was long ago co-opted for purposes other than social stability through assisting the bottom end acquire housing. Profit centre? Balance the bleeding of manufacturing GDP to the Asian juggernauts? Get elected again?
Like or Dislike:
0 
0
September 7th, 2010 at 8:47 am 61
@REdown’til2020’s: The constant talk about the "bond vigilantes" being placated seems to be a perfect contrarian set-up.
The wild-card here is the US election. It's becoming increasingly likely that the House will switch to Republican control. (No way does the Senate switch, although given the ineffectual Democratic leadership in that august (i.e., corrupt) body, a D majority of 1 or 2 is not different than one of 9 or 10). We know that the Rs talk a tough game about the deficit when the Ds are in power, but are completely irresponsible when they control things in DC.
Like or Dislike:
0 
0
September 7th, 2010 at 8:48 am 62
@paulb.:
in the words of one Frank Barone:
"Holy Crap!!!"
I'm a little surprised at the 260/80 list/sale ratio today.
I was sort of settling into the understanding that we'll have anemic list and sales for a long time.
I guess it could just be a bunch of re-lists like every month, but this one surprised me a little.
Can't say I wouldn't be glad to see more days like this.
Like or Dislike:
0 
0
September 7th, 2010 at 9:15 am 63
New Listings 282
Price Changes 156
Sold Listings 89
Like or Dislike:
0 
0
September 7th, 2010 at 9:17 am 64
@paulb.:
Let the fall campaign begin!
Like or Dislike:
0 
0
September 7th, 2010 at 9:22 am 65
N/W Van
New Listings 40
Price Changes 19
Sold Listings 6
Yeah baby
Like or Dislike:
0 
0
September 7th, 2010 at 9:48 am 66
@Best place on meth: Sorry about that. By the way, listings like that are why you'll rarely see most Best Place On Earth realtors in shorts and t-shirts, they don't want anyone to see their bedbug bite riddled bodies.
Like or Dislike:
0 
0
September 7th, 2010 at 9:58 am 67
@paulb.: YES!!!!
Like or Dislike:
0 
0
September 7th, 2010 at 10:03 am 68
@paulb.:
Great Scott!
Like or Dislike:
0 
0
September 7th, 2010 at 10:05 am 69
@paulb.:
Damn! Those are some of the best numbers I've seen on a Monday. Thanks paulb!
Like or Dislike:
0 
0
September 7th, 2010 at 10:15 am 70
@fixie guy: "Profit centre?"
Exactly right. Under Paul Martin through the '90s and early 2000s crown corporations were geared towards being profit centres or at least being independent of requiring government intervention. CMHC is no different.
CMHC management was likely told to fulfill its mandate without requiring government funds. Getting involved in an insurance racket is a logical consequence of that directive.
Like or Dislike:
0 
0
September 7th, 2010 at 10:23 am 71
New Listings 282
Price Changes 156
Sold Listings 89
I guess the yard work is done!
Well folks I am off with my family for to Italy for 2 1/2 weeks, one week in a villa in Umbria and one week in a villa on the Amalfi coast. This wonderful little trip (I hope we will remember for a lifetime) has been made possible by my landlord. As many of you know we rent a wonderful 3br condo in Yaletown for 31% of the cost of owning it. This money I am "throwing away" on rent has made this trip possible.
I will check in with everyone at the end of September when I expect things will have continued to slow and prices will have continued to drop.
Ciao Ciao
Like or Dislike:
0 
0
September 7th, 2010 at 10:40 am 72
@McLovin: Tell the guy next to you on the plane how rich your landlord makes you…maybe he will be impressed. More likely he will ask the stewardess to get a seat away from the bragging douche.
Like or Dislike:
0 
0
September 7th, 2010 at 10:43 am 73
@Jim Bob:
It's Tuesday, but what the hell!
New season is here – GO BEARS!!
Like or Dislike:
0 
0
September 7th, 2010 at 10:46 am 74
@Doc Brown: GREAT SCOTT!!
Like or Dislike:
0 
0
September 7th, 2010 at 10:48 am 75
@paulb.: Inventory surge, engage!
Like or Dislike:
0 
0
September 7th, 2010 at 10:49 am 76
@giggling:
"I bought my car with 2.9% financing two years ago while my term deposits were making slightly over 4%. Right now after they matured, they’re sitting at virtually zero and the inflation is eating away my savings."
Gold is up 500% since 2000
I think that beats real estate and bank accounts hands down.
$1,500.00 by end of Oct
Silver 25.00 +++
Like or Dislike:
0 
0
September 7th, 2010 at 11:05 am 77
Wow!
Looks like we're off to a great start for the Fall listings surge….and all this without a real catalyst.
Hard to imagine what kind of panic a little fear of a rate hike would unleash….I'ts just a matter of time folks.
Like or Dislike:
0 
0
September 7th, 2010 at 11:23 am 78
Eat your heart out Johnny Horton.
Ha Ha Ha ha Ha Ha
Like or Dislike:
0 
0
September 7th, 2010 at 11:42 am 79
Love those listing numbers but I won't get too excited until I see them for a few days in a row. But it sure looks good.
Like or Dislike:
0 
0
September 7th, 2010 at 11:45 am 80
I want to see a couple of things before getting really excited…I sound like myself back in Jan or Feb…the A# broken record
1) is this not just some noisy day due to the long weekend?
2) Are these actual market participants or just wishers?
My quick evidence from Abbotsford shows that the new listings are VERY sharply priced. What about your area?
Like or Dislike:
0 
0
September 7th, 2010 at 11:49 am 81
"New Listings 282
Price Changes 156
Sold Listings 89"
Did the 89 not get the memo?
Maybe some of these are bought by realtors as they know prices always goes up.
But hopefully the others are completed by sharp buyers/sellers setting the stage for new 'lower' prices for comparables as prices inch their way downwards.
Like or Dislike:
0 
0
September 7th, 2010 at 11:51 am 82
#81 was me.
Like or Dislike:
0 
0
September 7th, 2010 at 11:53 am 83
curious lurker says: I’m a little surprised at the 260/80 list/sale ratio today
typically listings would hit the stats ahead of sales, i would expect a high listings to sales ratio for this week especially. if the ratio stays high through to the end of the month that would be a bearish indicator for the entire fall and winter. the ratio is key to watch over the next few weeks.
Like or Dislike:
0 
0
September 7th, 2010 at 11:58 am 84
i am so hammered right now based paulb's data. Please don't stop the music…music…music
Like or Dislike:
0 
0
September 7th, 2010 at 11:59 am 85
@Anonymous: good point lumberg, did they not get the memo on the new TPS report?
Like or Dislike:
0 
0
September 7th, 2010 at 12:04 pm 86
Oh, one day of bear stats, crash is coming bears! Time to have new party, here is picture from last party….
http://www.flickr.com/photos/vedia/22384040/
Like or Dislike:
0 
0
September 7th, 2010 at 12:17 pm 87
“Housing needs to go back to reasonable levels,” said Anthony B. Sanders, a professor of real estate finance at George Mason University. “If we keep trying to stimulate the market, that’s the definition of insanity.”
Housing Woes Bring a New Cry: Let the Market Fall
Like or Dislike:
0 
0
September 7th, 2010 at 12:31 pm 88
It seems that most participants in the discussion portion of this website use the comments section of the most recent post. I'll try that for now.
By way of introduction, the relevant facts are as follows: moved from ontario 2004 (sold condo originally purchased 1998 – up 50% in 6 years) – used proceeds to make substantial downpayment on detached SFH on vancouver westside in early 2005 (motivatated seller, seemed a decent deal at the time, given the market then). We've sold said house in early july, and were fortunate to see a 75% increase in value in 5.5 years, after all the fees/transfer taxes are factored in.
I enjoy the vigorous discussions here, as it helps frame my thinking about what I'm going to do with my family – "homelessness", or buy again when I see a little value. Keep up the great discussion, both bears and bulls – it helps the undecideds (if you can call it that – we made a rather sizeable bet on the market direction when we sold) clarify their thoughts!
Like or Dislike:
0 
0
September 7th, 2010 at 12:47 pm 89
New east side listing, agent was in a hurry to get it on the MLS.
http://www.mls.ca/propertyDetails.aspx?propertyId…
3rd bedroom where?
Like or Dislike:
0 
0
September 7th, 2010 at 12:51 pm 90
@REdown'til2020's
"Fixed rates are about to go up."
I hope you aren't betting real money on that.
Your first chart, even if the historical record continues as the chart implies, shows rates can easily bottom 10 years from now.
The second chart cherry picks an 11 year period in a 30 year down cycle for rates that occurred in a completely different environment from what is happening now – and what will be in place for probably at least 10 years.
Look to the fundamentals.
Like or Dislike:
0 
0
September 7th, 2010 at 12:54 pm 91
Fun and games in Chinese real estate:
"But concerns about a U.S.-style real estate bubble led the central government in recent months to pass measures aimed at reining in speculators here and nationwide. Those restrictions, which include tighter lending standards and higher down payments, have probably spelled the end of untamed growth in Hangzhou, a city of 8 million residents about 115 miles southwest of Shanghai.
Housing sales have plunged. Property values have declined far faster than the national rate. Real estate agents are getting restless."
http://www.latimes.com/business/la-fi-0907-china-…
Like or Dislike:
0 
0
September 7th, 2010 at 12:59 pm 92
Wait a second. Hold on! Hold on!
Bears make big noise over silly number today? Let's look at that number. It really only
141 New Listings
78 Price Changes
45 Sales
This is Tuesday. Your BIG numbers are for two days. Divide by two and you see that market still asleep. This is not excitement. You think maybe 9000 realtors still depressed no one list? This is not even +100 day (which you bears make big noise about before).
Wake me when we get over 200 listings a day. Or maybe it not happen?
Dumb Bear
Like or Dislike:
0 
0
September 7th, 2010 at 1:02 pm 93
@Best place on meth:
Perfect for a thriller/suspense movie-don't get ATTACKED in the ATTIC!
Like or Dislike:
0 
0
September 7th, 2010 at 1:05 pm 94
@Best place on meth:
Haha. Oh yeah.
Like or Dislike:
0 
0
September 7th, 2010 at 1:10 pm 95
I'm new here (see my other post for real estate background if you can call it that). Could someone please explain to me why the posters named super.smart.bull and bad.news.bears both use similarly unique grammar ? Is this a general characteristic of those who are bullish, or is it some sort of put-on affect, or are these the product of the same individual? I'm not trying to put anyone down, I'm merely curious.
Like or Dislike:
0 
0
September 7th, 2010 at 1:34 pm 96
@hesitant: Great question! And I'm not really sure what the answer is. It's certainly not inconceivable that the two posters–BNB and SSB–are one and the same person. Why the "immigrant Chinese syntax?" I don't know; you had to ask them. It is almost beyond a reasonable doubt, however, that SSB is a native English speaker as the more lucid and rational his posts, the closer they hew to standard, grammatically correct, English.
What say you, SSB? What the put-on grammatical effect (in this case, "affect" would be an equally appropriate noun)?
Like or Dislike:
0 
0
September 7th, 2010 at 1:35 pm 97
@hesitant: Only bulls who post here jealous bears have bank account with $5000 to afford 1% cash back TD visa. Posts as fake and tasteless as $5 abalone special at local dim sum shop.
Bears numbers focused like billionaire Jack Welch but better looking with more sexy hair and deeper sexy voices.
Like or Dislike:
0 
0
September 7th, 2010 at 1:37 pm 98
Days elapsed so far 4
Days remaining 17
Average Sales this month 98
Average Listings this month 218
Projected Sales 2058
Projected New Listings 4573
Projected sell/list 45.0%
Inventory as of August 31st 15962
MoI at this sales pace 7.76
Like or Dislike:
0 
0
September 7th, 2010 at 1:55 pm 99
I love what’s happening with sales because with these numbers realtors are going to go broke & be standing in the E.I. line; do they even qualify???
Ha Ha, should have stayed in school or at least earned a trade. Your BMW payments are due soon.
Santa's going to fill your stockings with coal and cheap cologne (to cover the smell from crapping yourself).
Like or Dislike:
0 
0
September 7th, 2010 at 1:59 pm 100
@Bear Patrol: Its not entirely clear to me what your post means. Its equally unclear why it was addressed to me.
Like or Dislike:
0 
0
September 7th, 2010 at 2:03 pm 101
@VHB: I'm curious as to the source of the sales statistics. I see the sales updated, generally most evenings (although not this past friday, for example) on the yattermatters website. That blogger cites the real estate board of greater vancouver, I believe, as the source. But the REBGV does not have any publicly available daily statistics, at least none that I could easily find. Do you know of any other public sources for the data?
Like or Dislike:
0 
0
September 7th, 2010 at 2:24 pm 102
@hesitant: don't waste your time. That guy is a troll. If you are new to the internet, here is a link that explains what a troll is. Please don't egg him on.
http://en.wikipedia.org/wiki/Troll_%28Internet%29
Like or Dislike:
0 
0
September 7th, 2010 at 2:29 pm 103
@hesitant: I record them every day from either Paulb or Yatter matters. The archive of these dailies is in the forum under 'september numbers' for September, and analogously for other months.
They are not official numbers, but they typically end up pretty close.
Like or Dislike:
0 
0
September 7th, 2010 at 2:38 pm 104
@hesitant: Welcome to the site, hesitant. One of our posters has graciously explained to us how we can make foreclosed comments disappear. It's wonderful logging on to the site and not being able to view the asinine drivel of SSB and his ilk (or alter egos).
http://vancouvercondo.info/forum/topic/how-to-hid…
Like or Dislike:
0 
0
September 7th, 2010 at 2:45 pm 105
@giggling: I have to say, far too many people on this blog confuse big corporations with government. I've worked for big corporations. They are not transparent, self-serving, often wasteful, dedicated strictly to making profit for their shareholders and delivering big compensation to their executives. However, unlike government, corporations need NOT care about free speech, right to free association or assembly, nor are the leaders subject to a vote of the people. We may argue about whether government is becoming a captive of corporations and veering off the path of democracy, or even devolving into a form of fascism, but we should recognize that in the case of government there are many more remedies available to the common person in challenging decisions, compared with challenging corporations. I'd argue that good government depends on us getting off our rear ends and paying attention, speaking out, enforcing rights. It's the only thing that stands between us and the incredibly voracious excesses of an unbridled private sector.
Like or Dislike:
0 
0
September 7th, 2010 at 2:54 pm 106
@Simpatico: It's easy to challenge a corporation: stop giving it money. Try that with government. And as a shareholder, you can vote too, to exact same effect as in the polling booth.
Like or Dislike:
0 
0
September 7th, 2010 at 2:56 pm 107
@Simpatico:
What a load of crap. Most of the biggest companies from two decades ago no longer exist today. Private companies are punished quickly and severely by the markets in ways governments can only imagine.
And if you don't like a company don't buy it's products or avoid it's stock and bonds.
Try not paying your HST or carbon tax today.
Like or Dislike:
0 
0
September 7th, 2010 at 3:00 pm 108
@Devore: Easy to say, but monopolies leave people few choices. How many will simply stop making their mortgage payments because they don't like the bank's manipulation of elected officials? Don't like Translink, so that means you somehow stop paying to take the bus if you don't have a car? Dislike the oil companies, so just stop paying for gas? I think you need to stop romanticizing corporations, especially the monopolies.
Like or Dislike:
0 
0
September 7th, 2010 at 3:17 pm 109
@oneangryslav2: Thanks – I suppose I'll have to treat this website like the zoo – feeding the animals makes them unfit to survive in their native environment – we wouldn't want that to happen…
Like or Dislike:
0 
0
September 7th, 2010 at 3:18 pm 110
@Devore: @Simpatico: Very interesting points by both of you. I've been thinking a lot about this and once I'm finished the projects that I'm currently working on–two of them–I plan on taking this up.
There are some similarities and many differences between corporations and governments. The most important similarity shared by the two institutional forms is the divergence in interests between those that rule/lead–executives and politicians–and those that "own" the enterprise–shareholders and the citizenry.
What is good for the elite is rarely good for the rest of the populace. There is no capitalism anymore. Why? Because there are no capitalists. Those who make the decisions–the executives–don't own the enterprise. Shareholders do. And over the last few decades the nature of corporate (crony) capitalism is such that shareholders have become virtually powerless. Moreover, the exorbitant pay that executive boards have gifted to each other in an orgy of circle-jerk gluttony means that every executive has the same incentive–goose short-term performance in order to raise the stock price significantly, load up on options, cash out, take one's golden parachute and do it all over again. The fact that the company's long-term financial health is undermined as a result is incidental. No true owner of a company would operate it in this manner.
Analogously, politicians operate using the same short-term rationale. (Incidentally, this is one of the reasons why I oppose term limits.) They become rich and the shareholders (citizens) have to pick up the mess–financially, socially, in terms of blood and guts on foreign battlefields. (Democracies are just as bellicose as non-democracies, the only difference being that democracies generally don't fight each other.)
Like or Dislike:
0 
0
September 7th, 2010 at 3:24 pm 111
@Simpatico:
"How many will simply stop making their mortgage payments because they don’t like the bank’s manipulation of elected officials?"
Nobody forces you to take a mortgage out nor do they force you to deal with a bank or any institution you do not like. CMHC is the problem and they are a government organization.
"Don’t like Translink, so that means you somehow stop paying to take the bus if you don’t have a car?"
Translink is a government organization. And yes you have an option not to take a bus. I have not taken a bus in 10 years or more.
"Dislike the oil companies, so just stop paying for gas?"
Yes you have a choice to not buy gas. BTW most oil companies in the world are state (government) owned. The vast majority of oil is controlled by governments not private cooperations.
"I think you need to stop romanticizing corporations, especially the monopolies."
None of the examples you have given are monopolies and are actually government controlled.
Like or Dislike:
0 
0
September 7th, 2010 at 3:25 pm 112
@Devore:
I agree. However, the effect that a single individual has on the vote in either case is infinitesimally small.
http://en.wikipedia.org/wiki/Paradox_of_voting
Like or Dislike:
0 
0
September 7th, 2010 at 3:27 pm 113
Vancouver's Billion Dollar Boondoggle
“It’s weird,” said Heather Eddy, who recently moved into a rental unit at West 1st and Columbia. “It’s almost living in a futuristic police state. All you see is police cars driving around and people on bicycles.”
Eddy, a 24-year-old pastry chef, said she believes the village was opened too early.
“It’s very much like a ghost town,” she added. “I’m scared to walk down the streets at night.”
Near the renovated Salt Building, Mitch Williams described himself as a “lookie loo” checking out the views.
“This place is spooky,” said Williams, a 41-year-old telecom worker from Port Moody. “It’s like a sci-fi movie. I don’t see any patio furniture and there’s nothing on the balconies.”
Read more: http://www.theprovince.com/business/Vancouver+tax…
Like or Dislike:
0 
0
September 7th, 2010 at 3:28 pm 114
@Anonymous: I don't want you to misunderstand me. I don't want to romanticize government either. There's a huge yawning gap between responsible government and what we typically get. Just as there is a big gap between how the largest corporations actually operate (as fiefdoms of top executives in collusion with hand-picked boards rubber stamping short-term decisions), versus the ideal visions of pure capitalism, without abusive monopolies, governed by a rational market, restrained by the rights of shareholders, guided by good business practices. I personally think small businesses are much more respectable, honest, productive.
Like or Dislike:
0 
0
September 7th, 2010 at 3:31 pm 115
@VHB: Thanks. I had checked out the forum posts previously (I've been lurking in the background ever since we decided the time might be ripe to sell our primary residence, about 3 months ago).
Your posts in the past have been well reasoned and analytical. However, in this case I suspect the 95% confidence interval on the average calculations (based on 3 or at best 4 data points), might be a bit wide. It seems the readers here are hungry for any tea leaves (and you appear to be the resident fortune teller), but its probably premature to extrapolate the first few days of september into a full month estimate.
By the way, you're not by chance related to vancouver housing blogspot, are you? It was a housing blog I used to read a few years ago, sporadically. Nice analyses, but I'm not really sure what happened to it. If I recall, that blog was also relatively bearish on vancouver RE, largely on the basis of analysis of fundamentals.
Like or Dislike:
0 
0
September 7th, 2010 at 3:32 pm 116
@Anonymous: The difference is that you want companies to constantly be destroyed, with (presumably) better ones taking their place in the corporate hierarchy. You absolutely do not want that in the governance realm. Look at Europe before the Treaty of Westphalia (and many sub-Saharan African states today): there were hundreds of groups competing for supremacy on any one territory. It was only after certain groups of elites had established an effective monopoly on the legitimate means of coercion (to use Weber's phrase) that Europe really began to flourish economically, culturally, etc.
You want only one sovereign government on any territory. Why do you think the US is such an economic/political/cultural/military power? Because it has had (except for a brief interlude in the early 1860s, the destruction that resulted as a result only serving to underline my point) only one sovereign for over 200 years.
Like or Dislike:
0 
0
September 7th, 2010 at 3:32 pm 117
Utterly hilarious:
Vancouver taxpayers on hook for $1-billion as most Olympic Village units unsold
Read more: http://www.theprovince.com/business/Vancouver+tax…
http://www.theprovince.com/business/Vancouver+tax…
My favourite comment:
"Free washers and dryers? Why? Vancouver taxpayers have already been taken to the cleaners."
Like or Dislike:
0 
0
September 7th, 2010 at 3:34 pm 118
An interesting comment from the billion dollar boondoggle story:
"Obviously the city of Vancouver is going into bankruptcy.History tells us that when Burnaby went into bankruptcy during the Great Depression, they were forced to sell a big chunk of Burnaby to Vancouver. Renfrew was once in Burnaby.Now that the shoe is on the other foot, i suggest Vancouver sell back east Vancouver to Burnaby. Problem solved.As for these Olympic legacy units -they look like something out of East Germany 1968."
Read more: http://www.theprovince.com/business/Vancouver+tax…
I wonder if its true…
Like or Dislike:
0 
0
September 7th, 2010 at 3:38 pm 119
@Simpatico: And why are those monopolies persisting? Could it be the protection of government regulations that are effectively restricting barriers to entry? We already know out representatives don't read the legislation they vote on, what makes you think they write it?
I'm not necessarily anti-government, it's an institution that pretty much needs to exist in one form or another for many many generations to come, even if we started the changes today. I just believe that whenever you have a government that exercises ultimate power over its citizens, there will always be groups who seek to co-opt its power to coerce everyone else to align with their beliefs and world view, and to extract advantages for themselves and their interests. And we don't get to opt out. Best we can do right now is retain the freedom to run and fund parallel equivalent systems (eg education, health care, transit, insurance, retirement, etc), while also paying for the establishment one, but one by one those are falling down, as government power gets unrelentingly pushed out further and further into our lives.
The root of the problem is whenever people get to vote, they quickly learn they can vote themselves free money. They believe as long as their cause is supported, they will be receiving more than the other person, which is all they care about, having that advantage. Just human nature. It's an inherent flaw in the system, but we believe it is the best system possible that maximizes social order and progress, so we defend it ardently. Eventually it grows too big and explodes.
No such thing as a benevolent or limited government. It always gets corrupted. All we can do is hit the reset button every couple hundred years.
Ah well, nothing useful real estate related ever gets said late night, so off-topic we go!
Like or Dislike:
0 
0
September 7th, 2010 at 3:49 pm 120
@Simpatico:
"as fiefdoms of top executives in collusion with hand-picked boards rubber stamping short-term decisions"
Yes and these poor short term decisions are poor decisions for (most) share holders and the companies in the long term. Much of this has been fueled by bubbles created by poor short term government policy.
I will refer you to the government policy changes with respect to down payments, amortization terms and interest rates that have fueled the housing bubble in Canada. The banks didn't create it. In the long term this will be bad for banks and citizens. You can blame the executives if you want but the government made the policy changes that have allowed/caused this to happen.
Like or Dislike:
0 
0
September 7th, 2010 at 3:59 pm 121
@Devore: I agree with much of what you say. As an American, I honestly believe we are at the end of our empire, and that reset button is being pushed. Had the media monopolies become less powerful (through legislation and regulations they manipulated), and the sheeple less subject to divisive, inflammatory propaganda, and had the corporations had less a killer grip on both parties in Congress, and a better informed electorate put forth better candidates and held them accountable, and we'd better regulated campaign contributions, etc. etc., maybe things would not be going down the toilet. But I think the private sector deserves a hefty share of the blame for a helluva lot of the suffering for utter unscrupulous behavior at the expense of shareholders, creditors and the public. I am becoming much more interested in wave theory…perhaps there is a natural human cycle of optimism and pessimism that tends to explain the cycles of rising and falling governments, industries, etc. Yes, we are off the RE topic, and yet, this is one sector that has BC government at all levels, by the balls, abetted by govt. policies to assure cheap money and unreasonable risk-taking in mortgage lending and hedge fund investments by the banks.
Like or Dislike:
0 
0
September 7th, 2010 at 4:38 pm 122
@Nero: I don't know about this $5 million dollar condo, I hear that real estate is going down. But you say it comes with a FREE washer and dryer !? And CIBC will throw in 100k ?!
http://www.cibc.com/ca/mortgages/article-tools/up…
All yours for 420 easy payments of $30000!
Like or Dislike:
0 
0
September 7th, 2010 at 5:03 pm 123
I don't understand how some of you would say you can afford to travel more as a renter than a homeowner. If you Had more money, you wouldn't be renting in the first place. Obviously the homeowner is taking your bitter money and piling up more cash while you have to take a percentage of your earnings each month to make the fat get fatter. I know quite a few homeowners getting rich renting their paidoff homes. Those who bought 20 yrs ago are laughing to the bank. Those who have parents with half a brainshould be enjoying multiple paidoff homes purchased more than 30 yrs ago.
Like or Dislike:
0 
0
September 7th, 2010 at 5:45 pm 124
@Supraboy: Son, I am a licensed opthalmologist and in my professional opinion you are suffering from a chronic case of RV (Rectal Vision). Fortunately the disease is easily treated by simply removing your head from your ass.
Like or Dislike:
0 
0
September 7th, 2010 at 5:48 pm 125
Latest murmur is Canada real estate will slow down. You won't read it in VanSun. A 43-yr-old Canadian PR/citizen is jailed 5-1/2 years in China and fined 3M Yen (abt C$500k). He registered a money TT company in Canada in 2003 to help people to transfer money from Canada to China and vice versa that is legal here but illegal in China. Amount came to 310M Yen (abt C$48M).
Chinese government found out his illegal underground money TT when they traced several corrupt officials siphoning C$3M, C$4.6M, to Canada.
It be interest if Sun and Province tell us more.
Clever man, he transferred money not through banks, but he and wife open 20 bank accounts in Canada and more bank accounts in China, and swap money around to customers who want receive money in either country. He charged less commission than banks 0.3%-0.5% making good profit still under radar FINTRAC.
Like or Dislike:
0 
0
September 7th, 2010 at 6:04 pm 126
correction* Money TT company locates in Vancouver. During 4-1/2 years, sums amount to 8500M Yen, daily transactions up to 4.6M Yen, involved 20+ chinese provinces, 4000+ local residents.
Like or Dislike:
0 
0
September 7th, 2010 at 6:11 pm 127
@Nero: Let's get some perspective here: $1.03 Billion distributed amongst every man, woman and child residing in Vancouver is only $1,500! I mean what the hell would we all do with an extra $1,500?
Like or Dislike:
0 
0
September 8th, 2010 at 12:06 am 128
@Tony Danza: Buy a new washer and dryer?
Like or Dislike:
0 
0
September 8th, 2010 at 10:20 am 129
@No More Gordocracies: Can't drive gold
Like or Dislike:
0 
0
September 8th, 2010 at 11:12 am 130
BC registered office of Canada Money TT Ltd, 5945 Kathleen Ave, Room 208. Shareholders are husband and wife, names correspond to persons convicted and jailed in China.
http://news.singtao.ca/vancouver/2010-09-08/headline1283935979d2716604.html
Like or Dislike:
0 
0