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Up, Down and Sideways

August 8, 2011 testing

Global markets look to be in roller coaster mode – as of Sunday afternoon there’s lots of red in the market futures, the recent downgrading of US credit probably doesn’t help things. Are we heading into a 2008 replay?

When markets collapsed in 2008 they took real estate markets with them, both locally and in other nations. Canada pumped lots of money into housing via the CMHC and dropped interest rates to their current bargain basement levels which managed to not only restore house prices locally, but pushed them to new record highs.

What happens if we get another global economy crash and don’t have the same tools to fight it?

I can’t tell if we’re looking ahead to big inflation, Japan style mega deflation or a hither-to-unseen market plateau but these sure are interesting times. Are you cashing out of equity markets, playing with shorts or seizing a buying opportunity right now?

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rp1

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Whether we get a bounce or not, sentiment is damaged. In 2008 the TSX put in a double top in May and June. This year it was March and April. My impression (and it may be inaccurate) is that people here are not paying attention like they did in 2008. The world blowing up is the new normal.

That attitude might make sense in the US, but for Canadians it reeks of complacency. I highly doubt we're going to get a rerun of the 2009 stimulus from our own government, the US, and China all at once. Carney probably won't lower interest rates to -4% either. So complacency is a bad thing to have, especially because we are still piling on debt.

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Boombust

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Lessons were not learned from what happened three years ago. People spent what little they had and borrowed the rest.

Harper and Crooks have run out of bullets, so there will be no repeat of their shenanigans.

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logic

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This is going to very interesting over the next year:

A crisis as bad (? maybe worse) than 2008, and no way of dropping interest rates to emergency levels, because they are already there….

Hold onto your hats, make sure your savings are secure, and grab some popcorn….

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Marketmaker

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I highly doubt we’re going to get a rerun of the 2009 stimulus from our own government, the US, and China all at once. Carney probably won’t lower interest rates to -4% either ___________ Well bears, you have been so wrong so so long that you project your wishes onto the real world. You failed to predict the stimulus funding in 2008 or the drop to emergency low level interest rates. That was unthinkable. Now you think that there "clearly" are no more tricks left and that the RE and commodities bubble must pop. But once again, I bet something materializes to save the day. After three years of watching in disbelief the bull run in RE and equitities you still don't get it. Maybe you guys should just shut up about what possibly cannot take place. You seem to… Read more »

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Bummed-out renter

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Marketmaker:

Bears have not been wrong. Who could have forseen the massive economic stimulus in 09-11? If that had not happened we would have realistic R/E prices now. We will see price drops, just when is the question. You are living in LaLaLand. Stop being a troll.

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Active Member

Best place on meth

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Garth is pumping stocks and hating on gold as usual, what a jackass.

It appears he's scared shitless right now and I must have gotten under his skin calling him on his stock pumping as he deleted both my comments.

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Best place on meth

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>>>You seem to jinx yourselves over and over again.<<<

Only dumb people believe in jinxes, ghosts and the power of the number 8.

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marketmaker

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Marketmaker:

Bears have not been wrong. Who could have forseen the massive economic stimulus in 09-11?

____________

hahahahaha…the ol' "who could have known" explanation…

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marketmaker

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@Marketmaker:

>>>You seem to jinx yourselves over and over again.<<<

Only dumb people believe in jinxes, ghosts and the power of the number 8

_____________

Ahhh, I see your bigotry coming out a little more each day grad school boy…

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900kCrackHouse

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Anyone have any annecdotes of this recent crisis having an impact on house buyers? I'm sure it will, but we probably won't see the evidence for another month ortwo.

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CBC: Debt holds Canadians back from financial goals

About 72 per cent of Canadians say they're holding some form of debt, according to a new poll by CIBC.
The bank found that of those debt-holders, four in 10 say their current debt level is an obstacle to reaching future financial goals…
British Columbia has the lowest levels of debt in all of the provinces.

(raises clenched fists to sky) Nooooooo!!!!!

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silly

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@jesse: It's a poll of debt-holders. I suspect it just means that British Columbians are so financially illiterate that they don't know what debt means. They think mortgages are wealth!

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Flip Flop

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marketmaker says "But once again, I bet something materializes to save the day."

Educate us asshat. WTF is 'something'? There ARE options out there. What are they smart guy?

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Best place on meth

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Looks like Bank of America is going under and the financial system is imploding again.

Fasten your seatbelts, we are heading into some major turbulence.

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Bears don't have to be right about house prices, because they don't lose if prices go up. Bulls have to be right, because they lose if prices go down. That's because the bulls are long, but the bears aren't short.

After three years of watching in disbelief the bull run in RE and equitities you still don’t get it.

Both the S&P and TSX topped out months ago. Wakey wakey.

And two and a half years ago (that was the bottom, not three years ago) I was bullish on stocks and buying.

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900kCrackHouse

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@Best place on meth: Loading up on stocks again today?

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N

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We need to watch China, global inflation and commodities. China pulled out the stops in 2008 but its capacity to do so again is limited, among other things, by inflation. If China's growth stops due to a drop off in exports, and they cannot stimulate their economy with cash, their RE bubble will burst. If that happens, they will stop importing commodities and the TSX will crash. With Chinese and Canadian buyers feeling poor, Vancouver RE would also crash.

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Best place on meth

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@900kCrackHouse:

>>>Loading up on stocks again today?<<<

Only if I'm completely brain dead and listen to Garth "financial adviser" Turner.

I'm staying short for now.

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Jiffy

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Anyone have any annecdotes of this recent crisis having an impact on house buyers? I’m sure it will, but we probably won’t see the evidence for another month ortwo.

____

Ya, because a week of stock bleeds panics the masses of homeowners who don't invest in stocks. And ya, a week of stock bleeds translates into immediate job losses.

Too funny…wishful thinking bear

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Troll

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Jittery jittery. Boy, now would be a bad time for a black swan.

HOw about those 5 year bond yields? 1.5%. Didn't see that coming a year ago.

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Devore

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@900kCrackHouse:

Anyone have any annecdotes of this recent crisis having an impact on house buyers? I’m sure it will, but we probably won’t see the evidence for another month ortwo.

Only if credit tightens as a result, and people aren't able to freely borrow.

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Ziggy Strawdust

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I love it! This is a great time to have cash, I actually am doing some buying, but only a few individual equities, certainly not full market indexes. You would have had to have been paying NO attention over the last several months to still have 100% in the market.

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Devore

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@jesse: Well, those are based on poll answers, no? I don't see any figures or statistics provided based on real data. I seem to recall a recent story on Canadians savings rates, which were close to 0, with BC being only province in the negative. I don't think attitudes and actions reversed this quickly, so all this means is BC debtors are delusional. Maybe some are already getting the free crack to go along with those free crack pipes.

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Bummed-out renter

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Meth:

It's too bad Garth feels he needs to censor posts he doesn't like or agree with. The posts are more interesting and useful than Garth's prose which is boring and repetitive.

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s.park

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un-related…

this market is making some just plain nutty:
http://s-ak.buzzfed.com/static/imagebuzz/terminal…

Bubble? What Bubble?