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Flaherty is trying to scare you

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116 Comments

Jim is in the news again, wringing his hands about potential problems in the global economy.

Finance Minister Jim Flaherty fears the world could be faced with another recession, given the fragility of the global economy and especially the troublesome debt and deficit situation across the border.

“I am quite worried,” Mr. Flaherty told CTV’s Question Period Sunday. “We have lived three-and-a-half years now since the credit crisis started in late August, 2007. We are seeing in Europe, in particular, some very difficult situations.”

Has nobody told him it’s different here?

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Van Hire Derby
Van Hire Derby
9 years ago

The post is really cool , I appreciate that , please share some more such stuff with us in future too.

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fixie guy
fixie guy
9 years ago

@114 patriotz Says: "One more time…."

You're sure?

http://vancouvercondo.info/2008/12/bank-of-canada…

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patriotz
patriotz
9 years ago

@fixie guy:

any idea what it means to monthly payments to renew an upside-down mortgage?

One more time – if a mortgage is insured, the banks don't care if the mortgage is upside-down because they are guaranteed to get their money back anyway.

The real problem for those facing mortgage renewals is that interest rates have nowhere to go but up.

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Curiosity
Curiosity
9 years ago

Check out this latest news:

http://news.ca.msn.com/top-stories/home-prices-dr…

Discounts in New York. So not sure why the fly by day and leave by night investors don't take advantage of stock in New York but instead prefer to pay peak prices for half of a house in Vancouver.

The article does mention that part of the reason for the slump in the States is that they can't get financing. But what? I heard HAM investors don't need financing. Or do they?????

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chip
chip
9 years ago

@Best place on meth:

"Germany has done very well for a country that had to absorb 20 million impoverished people after the wall came down and now finds itself bailing out more corrupt slackers in the form of periphery Euro countries."

That was over 20 years ago. It's fiscal problems are worsening, not getting better.

As for the bailouts, Germany led the charge to incorporate these countries into the EU, and it is German banks that have the most to lose if there are defaults.

Germany has also spent about $15 billion less on defense every year than France because it leans more heavily on US support. Look for this dividend to evaporate as US influence shrinks and Russia gets more belligerent.

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Romeo Jordan
Romeo Jordan
9 years ago

You chumps have no idea what is brewing.

There will be an epic real estate hangover, the early aches and pains should begin in the coming weeks.

It is HERE. Even McLosin will realize the errors of her ways.

xoxox

Romeo Jordan

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Li Kai Shing
Li Kai Shing
9 years ago

ikea bummmer

Rick get job as maxi-pad…not maxim

Charlie Sheen get my leftovers

Torpedo of truth?

Not understand why Lavishing Lick have crush on long list of Asian men….maybe they look like John Holmes in proportion to Rick.

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ikea bomber
ikea bomber
9 years ago

@Ravishing Rick:

great post. there will always ba a job for you at maxim magazine

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Li Kai Shing
Li Kai Shing
9 years ago

Lavishing Lick

how you goose West Van sales if you not doing job as undercover pool cleaner?

You again caught posting ads when you should be polishing chrome on pool ladder

http://vancouver.en.craigslist.ca/van/m4w/2413225…

You need help from Dr Drew..or butterball turkey…. whichever cheaper.

Oprah retire so no go zone.

PS don't miss spot under diving board

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Ravishing Rick
Ravishing Rick
9 years ago

Cut the music! Li kai you chicken choking, low interest rate loving, she-man, sit down and shut up so your woman can see what a real alternative asset class investor looks like! Yes, Lavishing Lick here… And that name is appropriate considering thats what i do to your old lady's basement suite. Now Li kai, im getting sick of your attitude, and the worst part is that battling with you has gotten me labled a racist. First, id like the opportunity to clear the air. I love asians just not you. You need be more like those real tough as nail asians not your testosterone limited wimp self. Asians you need to be more like 1) Jackie Chan – tough as nails 2) Those canadian chinese railway builders – balls of steel 3) that dude that stood infront of the… Read more »

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Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

This is very good news.

No interest rate hike, the bubble is left to inflate a little more, to pop on its own.

Low low interest rates, with Low Low Prices to follow.

Just like Japan Inc, and the USA.

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fixie guy
fixie guy
9 years ago

@97 Anonymous Says: "That same drop (and it wouldn’t’ be that high anywhere else) on a $210k house is $63k…"

Discounting that no significant Canadian metro has median pries that low or the massive and rapid increases rivaling Las Vegas seen in places like Calgary, any idea what it means to monthly payments to renew an upside-down mortgage?

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patriotz
patriotz
9 years ago

@Anonymous:

When the bubble pops, not everyone has to sell.

That's always true. At any given time, only a small fraction of the housing stock is for sale.

But the price of houses is determined by the houses that are for sale, not the houses that aren't. And in addition to those who normally sell (moving, estate, etc), when prices go down investors start selling to cut their losses.

And they have to accept what buyers are willing to pay. And that's how busts happen.

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patriotz
patriotz
9 years ago

@paradox:

Yet, you can buy a house with a variable 2% interest rate whereas the business paying you a salary has to borrow at 8%. Can you see the picture?

That's why the real reason RE prices are inflated is not interest rates, but government guarantees on mortgages. Without those the banks would be charging 8% on mortgages too.

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paulb.
paulb.
9 years ago

New Listings 287

Price Changes 155

Sold Listings 173

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ReadyToPop
ReadyToPop
9 years ago

Chilton’s summation: “That’s the problem. It’s a lot of people’s job to get Canadians to take on debt.

<a href="http://www.montrealgazette.com/business/Credit+lines+worst+trend+last+years+Wealthy+Barber+writer+says/4862498/story.html&quot; rel="nofollow">Credit lines worst trend of last 20 years, Wealthy Barber writer says

I wonder if Flaherty has been doing any reading lately….RTP

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Patiently Waiting
Patiently Waiting
9 years ago

@vangrl: I know of an M&Ms Meat Shop that's probably not going to make it. I talked to the two owners and you should've seen the looks on their faces. They no longer have employees and work behind the counter themselves.

Also, commercial landlords are being brutal to small businesses. Many are going under because of skyrocketing rents. Even in malls, you see empty spaces because the owners don't seem to care about losing tenants with no replacements. I'm not sure what kind of business model they're using.

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Li Kai Shing
Li Kai Shing
9 years ago

Where is lavishing lick ?

Rick…you finish pumping West Van yet

Next on list is Whalley Newton

chop chop….

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paradox
paradox
9 years ago

"Many will not be affected (in terms of mortgages) no matter how high rates go"

You will be surprised how many canadians have been using their homes as ATM. Any decrease in home prices and those people will have to come up with the many to compensate for the equity lost or the banks will not renew the mortgage.

This guy does an excellent job at analysing the mess we will be in, check him out:
http://www.theeconomicanalyst.com//

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Anonymous
Anonymous
9 years ago

@paradox: …And no, RE has not gone crazy only in Van, affordability is at an all time low all over Canada….

Yes, but it's only in Vancouver that folks normally classed as 'upper middle class' can't afford a house. In most other places, prices are expensive, but not retarded. A 30% drop on a $1M Vancouver house is $300k – a huge wacky, especially when you still owe $800k and you don’t have any other savings. That same drop (and it wouldn’t’ be that high anywhere else) on a $210k house is $63k – a good hit, but not a retirement ender. And in the boonies, there’s a good chance you get that back if you stay long enough. It won’t come back in Vancouver is this generation or probably the next.

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Anonymous
Anonymous
9 years ago

@paradox: …Ownership in Canada is around 70%. Did you see what happened in the US when RE crashed?

…..

Yes, and a very large portion of those can withstand a significant increase in interest rates, particularly if they live outside of Vancouver and to a lesser extent in Toronto, and if they're not recent buyers, which most of that 70% are not. Many will not be affected (in terms of mortgages) no matter how high rates go. When the bubble pops, not everyone has to sell. In fact, obviously, almost nobody will sell, because nobody will be buying. Most will weather the storm just fine if only ending up with less change in their pockets. Never the less, prices will drop significantly (again, reinforcing that most people won't sell).

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vangrl
vangrl
9 years ago

and the sweet guy that owns the local Subway told me today that times are really tough for him right now. Man I'd hate to own a high end restaurant right now, I can't even imagine.

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vangrl
vangrl
9 years ago

"You’re welcome!From what I hear condos are a tough sell these days. SFH seem to be doing fairly well. In N Van condo prices really haven’t budged in the last few years. The West Side may be different."

I'm noticing a lot of apartments in Kitsilano have been sitting for months, and in the last few weeks I've noticed about 13 price reductions on my "Kits watch-list" of about 120 listings.

A few of them have been listed since Christmas.

I'd say the tide is changing on the Westside for condos and townhouses, not sure about houses, too rich for my blood, don't bother following.

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paradox
paradox
9 years ago

@Fast

No, it is not about manufacturing.

If you really look into the economics of a stronger currency, the disadvantages to exporting are more less balanced by paying much less for the raw materials. Germany has and likes a strong currency, yet German exports have been booming.

If the government was really concerned about manufacturing they could create the equivalent of CHMC to subsidise them with cheap loans.

Try getting a loan for your small business from your bank ans see what exorbitant interest rate the bank will charge you.

Yet, you can buy a house with a variable 2% interest rate whereas the business paying you a salary has to borrow at 8%. Can you see the picture?

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WFT?
WFT?
9 years ago

The Canadian consumer is tapped out according to the Globe.

http://www.theglobeandmail.com/report-on-business…

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