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rp1
Guest
rp1

Why would it end? The government sets lending standards now. If they want to lend a million dollars to every hobo or crackhead they can do that. That's one way to fix the homeless problem – write enough bad loans.

VMD
Member
A day after I discussed the dreadful Chinese RE situation and its stock market's 25% decline since April, MISH just posted the following article: [China Prepared to Let Housing Prices Sink in Spite of Economic Slowdown; Transition to New Regime Underway; Decoupling in Reverse] "China’s leaders affirmed they will stick next year with a campaign to bring down property prices even as a “very grim” global outlook threatens growth in the second-largest economy. … the decoupling theory was correct, except in reverse. The $SSEC Shanghai stock index is down about 60 percent from the 2008 high and has shown no propensity to bounce since summer of 2009, precisely when the US recession ended. A retest of the October 2008 low may be coming up. As mentioned on numerous occasions, there is a change next year in Chinese leadership. I have… Read more »
rp1
Guest
rp1

Gee if debt to income is extreme, and income sags, how fast will that ratio increase? Our idiot media seems to think that as long as we don't hit the magic 160% number the Americans did, everything will be fine. But in the US that's not what happened. Their bubble started to pop at a lower debt level, and falling incomes pushed the ratio up, then deleveraging hit followed by a big recession.

oldtimer
Guest
oldtimer

Vancouver is different. On Sunday, a 20+ year old mainland China guy driving a Dodge Viper converter trying to gun the paddle turning a corner onto Expo Blvd spin around twice, ending up going in the wrong direction (if you have money in China, you go in any direction, does not matter if it is one way, Canada is China now, the new home land). If there were pedestrians, a few would have been killed. With new immigrants like these, Vancouver will be a wonderful place. Housing prices will never go down, don't kid yourselves. For the poor folks, these mainland China boys will just run a few over. Great for Vancouver folks!

jesse
Member

"The government sets lending standards now"

It looks likely lending will be further curtailed in 2012. I don't know the details — not my industry — but all signals are towards the government reversing the debt-income ratios to more sustainable levels. That means on balance per-household debt accumulation is going to be difficult.

patriotz
Member

http://www.theglobeandmail.com/news/opinions/jeff

Mr. Carney believes, and he’s profoundly correct, that the Western world stands at a point of “rupture.” For decades, countries borrowed beyond their means – leveraged themselves with accumulations of debt. “That era,” Mr. Carney proclaimed, “is now decisively over.”…

Everywhere in the Western world, a long period of deleveraging – that is, reducing debts – has begun, or must begin.

Which necessarily means a national RE bust in Canada.

jesse
Member

@patriotz: " necessarily means a national RE bust in Canada"

… and even if it doesn't a national "soft landing" requires a much harder landing in the more overheated markets.

registered
Member
registered

@6 patriotz: Ageing Boomers and irresponsible consumers are main causes for Canada's predicament, not rock bottom interest rates and loose, federally guaranteed lending practices? And was it the last thread I suggested they'll try to pin it on 'outside forces' like China?

No mention of the threat to Canada's financial health from the CMHC or the consequences of our fiscal policies. Maybe that passes for honesty and straight talk from Ottawa these days, in the real world it's spineless. Be very afraid they recommend shoving money to businesses and express 'concern' at the cost of our social net.

Vansanity
Guest
Vansanity

China's housing bubble is losing air

Home prices and sales plunge after China's government intentionally slams on the brakes. Some recent buyers stage demonstrations, destroy real estate offices and demand refunds of up to 40%.

http://www.latimes.com/business/la-fi-china-housi

Vansanity
Guest
Vansanity

Anecdotal: Bankruptcy lawyers in the City that I know quite well are becoming busier. They're seeing more and more people caught up in the debt trap. It's the usual story where they buy as much time by shuffling debt to pay debt until the music stops. All these lawyers believe an increase in rates will be cataclysmic.

Vansanity
Guest
Vansanity

Also, I've been passively looking for a new place and I'm not sure if it's seasonal or not but I'm seeing a number of rent reduced places come up very recently.

PennyStock
Guest
PennyStock

@patriotz: And when Carney's tenure at the BoC ends, he can always turn to stand-up comedy.

"Fortunately, this means largely doing what we have been doing—individuals and institutions acting responsibly and policy-makers executing against sound fiscal, monetary and regulatory frameworks."

Anonymous
Guest
Anonymous

@fixie guy: "Be very afraid they recommend shoving money to businesses and express ‘concern’ at the cost of our social net."

Why be afraid? Helping businesses create jobs and austerity would be the right thing to do.

Makaya
Member
Makaya

Chinese Village Locked in Rebellion Against Authorities

"A long-running dispute between farmers and local officials in southern China exploded into open rebellion this week after villagers chased away government leaders, set up roadblocks and began arming themselves with homemade weapons, residents said.

The conflict in Wukan, a coastal settlement near the country’s booming industrial heartland in Guangdong Province, escalated on Monday after residents learned that one of the representatives they had selected to negotiate with the local Communist Party had died in police custody. The authorities say a heart attack killed the 42-year-old man, but relatives say his body bore signs of torture.

Spasms of social unrest in China have become increasingly common, a reflection of the widening income gap and deepening unhappiness with official corruption and an unresponsive justice system."

<a href="http://www.nytimes.com/2011/12/15/world/asia/chinese-village-locked-in-rebellion-against-authorities.html” target=”_blank”>http://www.nytimes.com/2011/12/15/world/asia/chinese-village-locked-in-rebellion-against-authorities.html

Makaya
Member
Makaya

@Makaya: oups, didn't mean to get all the text in bold…

here is the initial reason for the protest:

"The unrest began in September, when thousands of people took to the streets to protest the seizure of agricultural land they said was illegally taken by government officials. The land was sold to developers, they said, but the farmers ended up with little or no compensation. "

registered
Member
registered

13 DEFAULT NAME Says: "Helping businesses create jobs and austerity would be the right thing to do."

Shovelling money at businesses at the expense of public health and education is how free markets (and societies) create jobs? Who knew? Given the core of Carney's speech it was none too successful over the last ten years, maybe the next ten are the charm.

Anonymous
Guest
Anonymous

@Vansanity: I recently moved (renting) and noticed the same thing. The rental market was hot in September/October (seasonal) but has cooled since. Probably some landlords heard of the hot market and increased rents, only to realize they now have to reduce them again. My old place still hasn't been rented, which is a surprise because it's a very desirable unit with great water view…they're just asking too much.

Not much of a name...
Member
Not much of a name...

@DEFAULT NAME:

Why be afraid? Helping businesses create jobs and austerity would be the right thing to do.

Hasn't the gov't already "helped" with corporate income tax cuts and with ultra low emergency interest rates for the last two years? How's that worked out?

Patiently Waiting
Member
Patiently Waiting

@Vansanity: Vancouver is weird in that a significant part of the population cheers lower vacancy rates and potentially higher rents.

So many two-bit slumlords out there with their fingers hovering over the "raise rent" button only to get foiled time and time again. 🙂 I'm still seeing asking rents that are the same as three or more years ago LOL.

Patiently Waiting
Member
Patiently Waiting

"Get ready for possible higher taxes if you live in Vancouver.

Council is hearing about proposed water and sewer rate hikes of nearly ten percent."

Make that if you "OWN" in Vancouver.

http://www.cknw.com/Channels/Reg/NewsLocal/Story….

WhatProblem
Guest
WhatProblem

$12.00 an hour probably won't get you even a $100,000 place..Oh yeah..when prices drop that much unskilled warehouse workers will be out of a job…Sorry guys.

jesse
Member

@DEFAULT NAME: "Helping businesses create jobs and austerity would be the right thing to do"

You don't think businesses might want to practice the old "austerity" themselves? Monkey see monkey do.

rp1
Guest
rp1

#21 @WhatProblem: Dude, the problem is that $12.00 an hour is getting people $300k places.

patriotz
Member

@Not much of a name…:

"How’s that worked out?"

How it's worked out is that corporations are sitting on piles on cash that they're not willing to spend on new investment or new hires because consumers are too strapped to buy their products.

whydoItry
Guest
whydoItry

It's better for the City of Vancouver to raise utility rates rather than property taxes. Then owner and renter both pay.

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