Mark Carney, we hardly knew ye’

Can you believe this?

Mark Carney is leaving us for the Bank of England!

Carney said he and Flaherty had enjoyed an effective partnership and added he will miss the camaraderie and clear sense of purpose he experienced with the finance minister. He praised the strength of the central bank and reiterated his confidence in it.

A smiling Flaherty said this moment is “bittersweet,” and that the loss of Carney will be felt in Canada.

Carney’s rumoured appointment to the Bank of England was the source of published reports last spring, and at the time he and the Bank of Canada denied the reports.

“I’m totally focused on my two responsibilities: as governor of the Bank of Canada, and the Financial Stability Board,” Carney told reporters on April 18. “I can assure you they add up to more than every waking hour of the day.”

I’d leave a job that added up to more than ‘every waking hour of the day’ as well.

92 Responses to “Mark Carney, we hardly knew ye’”

- ♦ ↓ ↓ ↓ Click here to leap to comment form ↓ ↓ ↓ ♦ -

    For those interested in Toronto daily individual property sale prices, check out http://tosolds.ca/?cat=3
    (Apparently it’s “sourced manually”, so probably doesn’t violate MLS usage rules)

    Hope similar sites will spring up for Vancouver (and hope Competition Bureau triumphs over TREB in early 2013)
    Still miss that short-lived “olvius” site, but at least we still have VancouverPriceDrop and the forums.

    Hot debate. What do you think? Thumb up 16 Thumb down 1

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 8 Thumb down 21

    Not interested in knocking or defending Carney personally. But I would ask those who disagree with the BoC’s policies to say what it should have done differently, given that the BoC has a legal mandate to target CPI inflation at 2%.

    Hot debate. What do you think? Thumb up 18 Thumb down 9

    trash crash alert Says:
    4

    Contrary to what the mass media and his global banker buddies convey, Carney will go down in history as the absolute worst central banker in Canadian history. Hundreds of thousands of middle class families in Toronto and Vancouver are on the verge of being decimated financially. What we have is a 40 year amortization & zero down legacy coupled with the highest consumer debt in Canadian history all supported by emergency interest rates that are the new norm. We have seen this movie before in Spain, etc.

    The good news for Mr. Carney is that he will be sipping champagne in London with his society friends along with a former BC premiere whilst middle class Canadian families lives get imploded with divorce, stress, bankruptcy and mass depression. I would expect the Canadian government to handle the domestic housing and debt crisis by printing $200 billion or so added to national debt to provide band aid solutions to homeowners, financially rescue CMHC and Canadian bank balance sheets.

    Well-loved. Like or Dislike: Thumb up 37 Thumb down 12

    @patriotz: ” But I would ask those who disagree with the BoC’s policies to say what it should have done differently”

    Had this convo last night as well. The Bank has a mandate beyond the basic tenet of inflation targeting, they are also responsible for advising the government on appropriate fiscal policy so as to ensure economic growth in the medium and long terms. The Bank, I think, advised to open up the fire hose on household spending and construction as a method of producing rapid GDP growth, which was successful. Some of that ended up getting siphoned into land speculation and now prices are from what I see too inflated relative to their earnings. I think not tracking and advising more strongly on the dangers of speculative excesses during rapid GDP expansion was a mistake ex post.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 0

    RaggedyRenter Says:
    6

    He was vocal about the household debt and RE market. He made it clear it is in trouble and change won’t come from his office because he doesn’t have the mandate. It had to come from Flaherty’s. He made it very clear the fault lies with the government, not BOC.
    His frequent public jawboning must have forced Flaherty’s hands and rollback the prolonged mortgage term and other mortgage tightening measure

    Not sure if we are going to get a replacement with the same spirit. I’m sure the govt would like someone with less affinity to public statements and rethoric now.

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 4

    real_professional Says:
    7

    Yes, the Bank of Canada use of interest rates to deflate an asset bubble would have been wrong. The first thing you learn about Central Banks is that in a free floating currency economy the use of interest rates to stimulate or retard the economy is at the best of times only a crude lever.

    However, we were seeing prints on headline inflation above 2% up until this summer. Fortunately, core inflation was muted so I give Carney the thumbs up. The asset bubble should have been dealt with by the Finance minister years ago.

    It has been such a fiasco that up until about last year the CMHC wasn’t even reporting to the Finance minister. There was that confusion over whose portfolio the CMHC should fall under. It is just shocking pathetic performance by the financial-darling country of the G20. May I also add, Mr. Flaherty is no Paul Martin.

    What I find interesting is that much of the world could be in, or approaching, a recession shortly and the accommodative policies of the last recession haven’t been removed. What ammo is left to fight another slowdown?

    Hot debate. What do you think? Thumb up 19 Thumb down 3

    Extend and Pretend Says:
    8

    @patriotz: re: BoC, “what it should have done differently”

    For one thing each time YoY CPI crept into the 2.5-3% range, the rate could have been temporarily hiked by a 1/4 point. It happened several times and Carney blew it off like some drunk frat boy. This would have tested the waters on unemployment effects and would have provided vital information about sectors of the economy in need of improved economic productivity relative to otherwise free money.

    Carney is a punk. He could have done more than jawbone.

    Hot debate. What do you think? Thumb up 21 Thumb down 10

    Extend and Pretend Says:
    9

    @patriotz: re: BoC, “what it should have done differently”

    For another, within the resources of his office Carney and Statistics Canada, could have pioneered a new consumer price series designed to examine the tenants and assumptions of the fixed basket CPI statistics.

    Call it a Consumer Expenditure Index, CEI. The CEI could measure the percentage of individual consumer expenditure on each CPI component instead of simply assuming consumer expenditures on the various CPI components are the same as they were in 1970 and 1950. It is clear that Carney was targeting the price of eggs when most household income was going into lumber, labor, and land.

    There are plenty of things a true innovator could have done instead of twiddling thumbs and restating the poorly validated assumptions built into so called “core inflation” and a flat CPI basket.

    Another problem with core inflation is the assumption of wage origin inflation. What sort of imbecile thinks core inflation from 2000 is comparable with core inflation from 2010, when wages in China are now a bigger factor that domestic wages on core inflation.

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    I was on backpage.come and the whore index is creeping up. Lots of inventory especially downtown/westend/kits/burnaby.

    Like or Dislike: Thumb up 7 Thumb down 2

    Some Guy Says:
    11

    What Carney should have done is the same thing other central bankers should have done and still need to do: Print money and keep interest rates higher.

    Higher interest rates would contract the money supply by causing defaults and discouraging new borrowing. This contractionary effect would be offset by the printing of new money, leading to an outcome with stronger growth and less debt overall.

    However, this solution is so far outside of the mainstream, inflation-paranoid, consensus (folks like ‘Extend and Pretend’) that it is hard to blame Carney in particular for failing to apply it.

    Operating within the mainstream straightjacket in which the only legitimate way to create money is to have someone borrow it into existence, he probably did about as well as he could.

    Hot debate. What do you think? Thumb up 6 Thumb down 5

    Extend and Pretend Says:
    12

    @Some Guy: Inflation paranoid consensus folks?

    Really? Did you read my post? I said (1) raise rates at every opportunity. (2) Find out why CPI isn’t tracking fraction of income actually spent on what is measured.

    Read my post. Carney is to blame. He is to blame because he is the typical frat boy elite finance guy. If he was at all exceptional beyond simply playing his cards for a long political careeer, he would have picked up the new skills and sensibilities needed to change things for the better instead of trotting out 50 year old mantra in his jawboning sessions.

    Hot debate. What do you think? Thumb up 9 Thumb down 4

    Anonymous Says:
    13

    @trash crash alert: “. Hundreds of thousands of middle class families in Toronto and Vancouver are on the verge of being decimated financially. ”

    Oh, so those families played no part in getting themselves into trouble? Give me a break! It’s fair enough to criticize gov policies, but we all know who the blame really lies with in this mess. I’m tired of all this ‘I’m a victim’ bullshit.

    Well-loved. Like or Dislike: Thumb up 41 Thumb down 6

    @trash crash alert:

    Not to lose sympathy – but frankly, nobody put the gun to their head. . . . . If they bought and overpaid (like most “Joe Howmuchamonths do)” – I frankly don’t care. . and Frankly – I made my own decision all along the way not to play the game. I paid my “subsidized rent” which amounted to the tune of $3,000 per month below cost of ownership, saved my excess, invested and had an increase and ultimately did leave to be part of a different game outside of Canada. I feel very sorry for those who will be hurt but they could have just not done the purchase etc. . . a 40% fall is where this should end and where it does is just too bad for the 5-10% of Canadian’s caught up in it.

    Well-loved. Like or Dislike: Thumb up 35 Thumb down 2

    “Did you read my post?”

    Sure I read it, you were advocating raising interest rates to fight inflation in an environment where the economy was below capacity and there was little or no upward pressure on wages. That’s exactly what I mean by inflation-paranoia.

    Interest rates shold be higher because negative real rates are directing resources toward anything that involves borrowing (speculation and housing primarily) and away from everything else – not because inflation is out of control and we just don’t realize it because it’s not being measured right.

    Like or Dislike: Thumb up 7 Thumb down 1

    @jesse:

    I think what you say makes sense. What would have been helpful however is if they opened the fire hose slower as the rapid release of credit meant that the economy could not respond to the increased demand fast enough without causing a massive run up in prices. We would be much better off now if they had not reduced rates and changed amortization rules. But then again, we perhaps would not have a convservative government. Who will end up paying in the end is not known but at the end of the day, those who are hurt the most had the best ability to prevent it. They just could not resist the access to credit and use it to make an emotional decision.

    Like or Dislike: Thumb up 6 Thumb down 0

    Anonymous Says:
    17

    Here’s a good clip for understanding Carney/Goldman and banking in general.

    http://www.youtube.com/watch?v=lsmbWBpnCNk

    Like or Dislike: Thumb up 2 Thumb down 0

    @Anonymous:

    There will be a time when we can make a list like Americans did after their crash:
    http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877339,00.html
    And American consumers are #5 on that list. They should be like #2 IMHO and MSM should be #1, but you wouldn’t find MSM in the list because it’s Time’s website =)

    Like or Dislike: Thumb up 2 Thumb down 0

    Extend and Pretend Says:
    19

    @Some Guy: re: “where the economy was below capacity”

    Says who or what? Relative to the US, in the present economic environment, it is above capacity. Unemployment should be higher in historical terms relative to the US. It all goes to antiquated measurement, which was my point.

    I am not paranoid for inflation, I just want to make sure the Bank is measuring inflation as it is, rather than as it was.

    There would be no need to for discretionary money supply tinkering if the effect of prices on income buying power was measured in relation to what most income is actually being spent on. The BoC Governor ought to be replaceable by a robot if inflation is being measured correctly.

    Like or Dislike: Thumb up 4 Thumb down 0

    boogeybear Says:
    20

    @yvr2zrh: I don’t buy that the home owner is completely to blame. It isn’t the person that recently bought their home that is in difficulty. It’s the misused home equity lines of credit that are the problem. The lenders, CMHC and the government were predators on those that where easy victims. This was a confidence game, backed and insured by our government.

    Hot debate. What do you think? Thumb up 6 Thumb down 4

    Anonymous Says:
    21

    @RaggedyRenter: And just who do you think was advising the government the whole time on what it should do to stimulate the economy. Carney has been playing nothing more than a blame game with his comments on household spending, etc. Same goes for Flaherty and his comments.

    This spreading around of the blame does nothing but confuse people ahead of time so that when the SHTF nobody is culpable.

    All you need to know is that Flaherty wants votes and Carney works for Goldman. Stop fooling yourself, you sound like you are gushing when you allow Carney to hide behind ‘he had no mandate’.

    Like or Dislike: Thumb up 6 Thumb down 3

    Anonymous Says:
    22

    @Extend and Pretend: Carney could also have:

    1. Been more critical of US monetary policy and its effects on the Canadian economy, particularly those who save.

    2. Been more critical of the EU’s insistence of propping up a failed economy.

    3. Been more critical of the Chinese/US Dollar peg.

    I suppose that you can replace ‘more critical’ with ‘more vocal’, especially in regard to how it effects the Canadian dollar and economy as a whole.

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    RealityCheck Says:
    23

    How is the Tolling on the Port Mann going to affect RE prices (relatively speaking)? Comments?

    I noticed that the Golden Ears bridge tolls resulted in less demand north of the Fraser. Prices never really went up in Maple Ridge since 2008. Less immigrants locating there.

    Also, Tolls on new bridges are a given. We have two and added to that list will Patullo. These are a given. Any future new bridges will be tolled as well.

    Now, Translink will get more money…past experience has shown this. Question is, what happens to existing bridges with respect to tolls?

    The RFID decals infrastructure will also now be in place to not only toll existing bridges but also major roadway points.

    End result is a cash cow for Translink.

    Creation of enclaves where residents only leave their “Toll Zones” for necessity only??

    Hot debate. What do you think? Thumb up 12 Thumb down 1

    Many Franks Says:
    24

    OECD warns Canada about consumer debt:

    The two big domestic risks, the OECD says, are the record level of debt Canadian families hold and their dependence on house prices remaining firm.

    “Continuing high household debt levels could lead to a sharp deceleration in household spending, while a sudden weakening of the housing market could have sizable negative spillover effects,” the OECD says.

    Hey, almost sounds like they’ve been hanging around here too long.

    Like or Dislike: Thumb up 7 Thumb down 0

    RaggedyRenter Says:
    25

    @Anonymous:

    “And just who do you think was advising the government the whole time on what it should do to stimulate the economy. ”

    Why do you think Carney had to go public? You don’t air out problems (especially at the federal government level) unless it’s the last resort

    Like or Dislike: Thumb up 2 Thumb down 1

    Anonymous Says:
    26

    @RaggedyRenter: “Why do you think Carney had to go public? You don’t air out problems (especially at the federal government level) unless it’s the last resort”

    So you are saying that he couldn’t have started warning Canadians earlier? Like maybe in 2008/2009? Sure took him a long time to ‘go public’.

    Man, I just don’t get these people who defend those who played key roles in bringing the entire world into this greatest of financial messes!

    Like or Dislike: Thumb up 8 Thumb down 0

    Consider an article in Wikipedia:

    Carney, Mark:
    Canadian executive with the compensation of ~400K in 2009 (http://bit.ly/jV60Ja) who was one of the key figures among those who installed the time bomb under Canadian budget by approving the silent bank bailout of 2008 (http://bit.ly/JluyQG) and got his golden parachute in November 2012 before the bomb detonated in…

    Have I missed something?

    Well-loved. Like or Dislike: Thumb up 22 Thumb down 1

    Vote Down The Facts Says:
    28

    @Anonymous: “All you need to know is that Flaherty wants votes”

    That’s exactly how a democracy works. Doing whatever is necessary to get votes is in effect responding to the wishes of the people.

    Like or Dislike: Thumb up 3 Thumb down 2

    @Anonymous: Ultimately, if the people are stupid, there’s nothing a government can do to prevent disasters.

    Like or Dislike: Thumb up 5 Thumb down 1

    Not much of a name... Says:
    30

    @Vote Down The Facts:

    That’s exactly how a democracy works. Doing whatever is necessary to get votes is in effect responding to the wishes of the people.

    Which in itself is a definite flaw in the system. The wishes of the people are not always what is in their own best interest.

    Like or Dislike: Thumb up 5 Thumb down 3

    painted turtle Says:
    31

    One can find victims on both sides.
    What about families who have been bringing up children (now teens) in tiny condos because they could not afford anything else?
    What about people who immigrated in their 40s and are now close to 50, still renting, very poor pension plans, will never be able to buy and use this investment to finance retirement?
    What about the people who cannot get a downpayment from Mom and Dad, nor Granny?

    We can find excuses, or blame, whiners on both sides. But at the end of the day, we are all adults making decisions. With internet access, it is hard to say “I did not know.” Better say “I did not bother doing my own research.”

    True, banks and brokers are trying to sell you products, but “buyer beware” is not a new adage…
    I recently bought slippers Made in China that broke in 10 minutes, but I do not expect the Dollar Store owner to install a banner saying:” Warning: We only sell crap.”

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 0

    You’ll easily spot Carney and Gordon Campbell wandering the streets of London; they’ll be the only ones with good teeth.

    Hot debate. What do you think? Thumb up 21 Thumb down 6

    Anonymous Says:
    33

    @Vote Down The Facts: “That’s exactly how a democracy works. Doing whatever is necessary to get votes is in effect responding to the wishes of the people.”

    Read the context. You will find that your comment says nothing that isn’t already inferred.

    Flaherty is deflecting blame to save votes…

    Like or Dislike: Thumb up 3 Thumb down 0

    A site worth quick perusal is Reed Construction Daily Commercial News. They have a link for daily Top 10 projects, divided up by region. I check the Western one about once a week. They mention cancelled/deferred projects in these lists as well. See: http://www.dcnonl.com/top10projects1

    Like or Dislike: Thumb up 3 Thumb down 0

    Vote Down The Facts Says:
    35

    @Not much of a name…: “Which in itself is a definite flaw in the system. The wishes of the people are not always what is in their own best interest.”

    The important part is that people get to choose. If they don’t want to engage in the system or educate themselves as to what the options available to them are, then that’s their choice too. Going against peoples’ wishes based on what somebody else thinks “is in their best interest” isn’t a democracy.

    Like or Dislike: Thumb up 6 Thumb down 0

    @Many Franks:
    The only real question is what will bring it all down, record debt or high house prices ?
    Carney is analogous to a fat rat leaving a sinking ship, swimming across the sea to take his seat next to the queen.

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    Anonymous Says:
    37

    @gokou3: “Ultimately, if the people are stupid, there’s nothing a government can do to prevent disasters.”

    Good point. Mind you the public education system which the government is responsible for isn’t exactly a model for pumping out financially intelligent people. In fact it’s quite the opposite. Consumer Ed doesn’t teach much about money… but that’s another topic.

    Like or Dislike: Thumb up 4 Thumb down 1

    @Anonymous: Exactly. Don’t get me started on the education system. It’s so detached from the needs of the real world.

    Some people don’t know what they don’t know, that’s the gist of the problem. Without basic economic knowledge, for example, they would think it’s normal for home prices to go up 10% a year forever when inflation is only ~2% per annum.

    Still, this is not an excuse for getting oneself into financial or other kinds of disasters. As someone else said, with internet nowadays it’s hard to excuse oneself for being ignorant.

    Like or Dislike: Thumb up 6 Thumb down 1

    After reading comments, I have an impression that a lot of people at VCI see the coming RE bust as a the biggest event of the nearest future of the Canadian economy. Wrong decisions by irresponsible borrowers, predatory lending practices, the coming wave of foreclosures and so on. I can’t say I really care about the bust: foreign “investors”, local flippers, mortgage brokers, realtors, banks, developers played by the rules (thank CMHC, Flaherty and Carney), pigs got slaughtered.

    My concern is that, unfortunately, the people who were not directly involved in this bubble mess will be affected as well. My understanding is that throughout the past decade, Canada was making a big move towards becoming a North American version of Greece or Spain:

    – disbalanced budget;
    – unprecedented personal debt level;
    – costly government bodies;
    – mismanaged crown companies;
    – abused social programs;
    – deteriorating conditions for small and medium business.

    My uneducated guess is that the next really big thing we will see is trivial tax increases, some government spending cuts and slowing business activity, which will decrease tax revenues which means higher tax rates and so on. And I can’t see a political force that would have balls to cut this spiral and take proper measures.

    And I consider Carney’s move a sign that he doesn’t want to be associated with what is going to happen with Canadian economy in the next 5-10 years. I wish I could have such a possibility and sit it out in a safer place too.

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 3

    #14 @yvr2zrh: So what you’re sort of saying is, markets have no victims, only volunteers ;)

    Like or Dislike: Thumb up 2 Thumb down 0

    I guess the problem with saying who cares is that the economic bomb will hit all of us, including people who didn’t participate. Many have been responsible, as we must be, but it’s still gonna hurt. What happens when the government starts slashing?

    Like or Dislike: Thumb up 4 Thumb down 0

    real_professional Says:
    42

    Teranet Data October 2012 available on their website.

    Vancouver Index is off 2.8% from the highs. September and October Prices are flat but sales-pairs are 19% lower than October 2011. This is actually the worst showing of the major Canadian centres the sales drought in Vancouver isn’t getting any better.

    Summary, Prices from highs, Monthly Sales Pairs YoY:

    Vancouver:
    Prices -2.8%
    Sales -19.1%

    Victoria:
    Prices -5.1%
    Sales +8.7%

    Toronto
    Prices -0.6%
    Sales -5.7%

    Remember Teranet data is based on closed deals – so there is about a two month lag in addition to the one month lag (October data).

    Real time my guess is that we are currently off another 3% from the highs. What we are certain of is upward momentum is done – momentum really peaked out in summer of 2011.

    Quote me on it: “VANCOUVER real estate has topped for well over a year – 15 months to be more precise”

    If you are a bull buying for price appreciation then you are out of luck. If you are buying for rental income you are stupid. If you are buying to impress people you are out of luck, stupid, and probably ugly.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 2

    Anonymous Says:
    43

    @C.Junta: “And I can’t see a political force that would have balls to cut this spiral and take proper measures.”

    Sad but true. There’s little electability in taking away entitlements.

    Like or Dislike: Thumb up 1 Thumb down 0

    Look at this wonderful collection of new condo units for rent in the Queensborough area:

    http://vancouver.en.craigslist.ca/search/apa/bnc?query=MaryEllen&srchType=A

    I wonder why the owner didn’t sell them?

    Like or Dislike: Thumb up 8 Thumb down 0

    HAM Solo Says:
    46

    @ real professional

    I think the vancouver market is “really” off more like 10% from its peak. Things the official numbers don’t consider.

    a) substantial renovations or re-builds in the same property

    b) the effect on prices of the drop in volume. If the same level of volume had cleared, the prices would be lower

    c) various types of hard to quantify but quite real fudging and finagling by the real estate statistical bodies (only bulls get paid to put together these stats). Would include the exclusion of “outliers”, mix adjustments between SFH and condos etc.

    Like or Dislike: Thumb up 7 Thumb down 1

    space889 Says:
    47

    @Some Guy: Or let the free market determine more of the cost of borrowing and allowing debts to be written off (default) with private investors taking the loss. That might be better than your method of high interest rate and printing money because it’s less likely for the new money to flow to those who don’t need it – eg) banking fat cats or those with the right connections.

    Like or Dislike: Thumb up 3 Thumb down 0

    data junkie Says:
    48

    Here’s another little anecdote in the ‘shadow inventory’ story:

    http://www.6717000.com/mls/V967340-310-36-water-st.html

    http://vancouver.en.craigslist.ca/van/apa/3438556390.html

    Shadow inventory kind of sounds like schadenfreude, doesn’t it?

    Like or Dislike: Thumb up 6 Thumb down 0

    data junkie Says:
    49

    I should note that I’ve stumbled across literally dozens of examples of this in my current housing search. A lot of them are ‘furnished’ and have ridiculously optimistic asking rents. Like this one for example:

    http://vancouver.en.craigslist.ca/van/apa/3394008064.html

    Like or Dislike: Thumb up 8 Thumb down 0

    Many Franks Says:
    50

    The speculation has already started about when Jim Flaherty will jump ship — and whatever your opinion on Carney, I think we can all agree that Flaherty is a bona fide rat. In my opinion he’s the guy carrying the most blame for Canada’s 0/40 excesses, which may become the hallmark of policy mismanagement leading to the crash.

    Well-loved. Like or Dislike: Thumb up 20 Thumb down 0

    @data junkie: This is why the unit has been vacant for 3 months. I am sure the billionaire owner doens’t have a mortgage to pay and is not hurting at all.

    Like or Dislike: Thumb up 4 Thumb down 1

    from Flaherty article:
    “Appearing emotional and a little teary-eyed, Mr. Flaherty told reporters Monday it was his “bittersweet” duty to announce Mr. Carney’s exit for a new job fronting the Bank of England.”

    ….”teary-eyed” ??!!! oh man, our political system is pure comedy

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    Anonymous Says:
    53

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 3 Thumb down 14

    @Anonymous:

    “Bet you had a good chuckle at your own wittiness when you wrote that, didn’t you? So darn clever and funny!”

    Sounds like a “bitter homeowner” warning. We should coin the term I think. After all these years of hearing about bitter renters, it’s about time to make some additions to the urban dictionary.

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    Guy Smiley Guy Smiley Says:
    56

    I had a chuckle at it. Keep ‘em coming r_p!

    Like or Dislike: Thumb up 3 Thumb down 0

    Anonymous Says:
    57

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 1 Thumb down 13

    data junkie Says:
    58

    @gokou3: I like to picture some dipshit who is running out of money and credit sitting down and looking at how much his condo costs per month in mortgage + strata + taxes, and then simply asking that much in rent.

    “Oh, well, of course somebody will pay 2x the market rate for a 1000 square foot unit- mine’s furnished! Everybody LOVES to use a stranger’s furniture!”

    Hot debate. What do you think? Thumb up 18 Thumb down 0

    @gonzo: “Appearing emotional and a little teary-eyed, Mr. Flaherty told reporters Monday it was his “bittersweet” duty to announce Mr. Carney’s exit for a new job fronting the Bank of England.”

    “Oh shxt, now I have no one to blame for the RE mess!” – F, teary-eyed.

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    patriotz patriotz Says:
    60

    @painted turtle:
    “What about families who have been bringing up children (now teens) in tiny condos because they could not afford anything else?”

    They are precisely the people who are responsible for the bubble. They could have rented something much bigger for much less.

    “What about people who immigrated in their 40s and are now close to 50, still renting, very poor pension plans, will never be able to buy and use this investment to finance retirement?”

    If they want something to finance their retirement, how about an investment that is not absurdly priced relative to earnings?

    “What about the people who cannot get a downpayment from Mom and Dad, nor Granny?”

    They are the lucky ones.

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    ReadyToPop Says:
    61

    She has described the notion that humans should halt all consumption to save the environment as a “good point” but “very hard given the way our societies function”, and has also lamented the “relentless exhortations to buy and the fact that much of our sense of self is tied up in our possessions”.

    New Bank of England Governor Mark Carney’s wife: an eco-warrior who says banks are rotten

    Hot debate. What do you think? Thumb up 8 Thumb down 2

    RaggedyRenter Says:
    62

    If Flaherty were to go after the Budget is tabled, I guess we’ll see an increasing pace of mortgage tightening and CMHC offloading. No legacy to protect, Vancouver be damned.

    Like or Dislike: Thumb up 4 Thumb down 2

    @ReadyToPop:

    Thanks for the link.

    “Describing herself as a “farmer’s daughter” she wears recycled vegan shoes, describes environmentally-friendly ways to tackle head lice and recommends “gardening with cow poo”. “Reducing consumption, or returning it to levels that are sustainable, is critical overall,” she wrote online.”

    Of course, everybody knows that the whole go green movement was inspired by those globalist puppet masters who wanted to have control over all the gears and levers, including the “free” opposition.

    Interesting touch indeed.

    Like or Dislike: Thumb up 4 Thumb down 4

    Ben Rabidoux Says:
    64

    Hey to the VCI crowd.

    I’m enjoying my time in this beautiful city, although I’ve been looking over my shoulder a lot with the CAAMP conference in town. I keep waiting to get jumped. So far, so good.

    Had the pleasure of meeting a few of the forum characters. Most casual readers of this forum have no idea how many really smart professional analysts and portfolio managers read and contribute to this site. VCI is without a doubt the top online real estate forum in the country (should also give a shout-out to House Hunt Victoria which is also very solid).

    One final plug for what brings me to the city: The seminar will be tomorrow at 7pm at the Westin Bayshore and as a teaser, the staff at the Lepoidevin Group have printed (in colour) and bound the entire presentation for every person in attendance to take home. Should be a fun conversation piece if you leave it on your coffee table.

    http://www.realestate2013.ca for more info.

    -Ben

    Well-loved. Like or Dislike: Thumb up 64 Thumb down 2

    patriotz patriotz Says:
    65

    http://www.calculatedriskblog.com/2012/11/real-house-prices-price-to-rent-ratio.html

    Note how nominal prices, real prices, and price/rent have all returned to the pre-2000 trends – something that the bulls were saying was impossible a few years back.

    Like or Dislike: Thumb up 8 Thumb down 1

    patriotz patriotz Says:
    66

    @gokou3:
    ” I am sure the billionaire owner doens’t have a mortgage to pay and is not hurting at all.”

    Then why is he listing it for rent in the first place? I’m sure Pattison doesn’t rent out his place in Palm Springs on Craigslist when he’s not there.

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    Guy Smiley Guy Smiley Says:
    67

    I still think it’s a taxation scheme. At least, i’m still waiting for a tax lawyer out there to tell me it’s not possible. But if it’s in professionally managed rental pool, and not getting rented out, it is wracking up tax deductable losses. No?

    Like or Dislike: Thumb up 3 Thumb down 0

    Vote Down The Facts Says:
    68

    @Guy Smiley:

    The example was listed at $4250/month. That’s about $140/night. Could it be targeted at people on business, staying for a few weeks?

    Like or Dislike: Thumb up 3 Thumb down 0

    New Listings 114
    Price Changes 85
    Sold Listings 114
    TI:16993

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 80 Thumb down 2

    YLTNboomerang Says:
    70

    @Ben Rabidoux: I really wish I was in town for this but I’m in Houston all week for meetings. I hope at some point there is an opportunity to meet some of the folks behind the blogs as I’ve been around since the early days of VHB’s blog and have enjoyed the banter. At what point are we going to have the Vancouver Bubble meetup? It’s got to be once the crash is in full effect and it’s no longer worthwhile to blog “see, we were right”, bear opinions will be accepted and heated words of past forgotten (I know I’ve made some strong statements that pissed others off).

    Hot debate. What do you think? Thumb up 18 Thumb down 0

    SunBlaster Says:
    71

    I remember in 2007 talking to my mortgage broker about buying a second place and 40yr mortgage. He strongly advice me not to get a second mortgage and defenitely not get 40yrs. Thinking back I had no clue about any of this and he had integrity to go against his business interests to give me that advice.

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 0

    100% sell-newlist.

    Wait, this is the first time sell-newlist hit 100% this month, normally the sell-newlist goes over 100% mid-month, and there are only 3 days left?

    Crap.

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    Guy Smiley Guy Smiley Says:
    73

    @Vote Down The Facts:

    Maybe. My thought though was that the prices were so high precisely because they don’t really want anyone to rent it.

    Like or Dislike: Thumb up 3 Thumb down 0

    ReadyToPop Says:
    74

    OTTAWA — One going, and another one likely to follow soon.

    It would seem inevitable that in the wake of Mark Carney’s imminent departure from these shores, his key backer and policy counterpoint would entertain similar thoughts of disengagement from Ottawa.

    Flaherty next? After Carney departure, spotlight turns to finance minister

    Like or Dislike: Thumb up 8 Thumb down 1

    Canada housing moving in right direction: BoC’s Murray

    Nov 27

    “NEW YORK (Reuters) – Canada’s heated housing market appears to be cooling as desired, a senior Bank of Canada official said on Tuesday, although he noted that housing starts remain unusually high.
    Housing prices and construction in Canada roared higher in 2011 amid low interest rates, sparking fears of a U.S.-style bubble. The market started to slow after the government tightened rules on mortgage lending in July, and policy makers hope to see a gradual softening rather than a crash.
    It’s still early days. But we’re certainly seeing evidence of movement and acceleration in the right direction,” Murray told a business audience after giving a speech in New York.
    “Some sort of smooth transition, at least on the housing side, is what we’re looking for,” he said.
    He said the evidence on housing expenditures was “to a degree encouraging” but cautioned that housing starts were still higher than would be warranted by demographic trends.”

    Like or Dislike: Thumb up 6 Thumb down 1

    ReadyToPop Says:
    76

    I see Many Franks already posted the Flaherty story. Oh well, let the speculation begin.

    Like or Dislike: Thumb up 1 Thumb down 0

    Not Ready To Be Slave Says:
    77

    Not related to Mark Carney, but very related to the first comment:)

    Technically it’s an interesting project and totally doable, but can anybody explain how it may work from the legal perspective?

    Tthey say ‘TREB’s VOW policy would be similar to the policy adopted by NAR’

    http://lowes.inman.com/InmanINF/lowes/news/145830

    but it looks like there is no password required to access listing info on ziprealty.com:

    http://www.ziprealty.com/property/10605-SEOLA-BEACH-DR-SW-SEATTLE-WA-98146/74277446/detail

    so what is this noise about password protected VOW’s?

    Also, ziprealty.com is providing the prices from previous sales (see the link above) having different source specified (not MLS), i guess they are not allowed to specify MLS. Do we have something similar here (i.e. some source that can be specified when price is provided to the public)?

    Like or Dislike: Thumb up 0 Thumb down 0

    southseacompany Says:
    78

    Interesting:

    “Mark Carney: is he really that good?” Maclean’s Magazine;

    http://www2.macleans.ca/2012/11/27/mark-carney-is-he-really-that-good/

    “…have we been witnessing something of a Mark Carney bubble in the last few years?

    I’m sorry to disappoint those in the Mark Carney fan club, but signs point to the latter. The odds are that history will not judge Carney as kindly as we are now.”

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 1

    Some Guy Says:
    79

    @space889: “or let the free market determine more of the cost of borrowing and allowing debts to be written off (default) with private investors taking the loss. That might be better than your method of high interest rate and printing money because it’s less likely for the new money to flow to those who don’t need it – eg) banking fat cats or those with the right connections.”

    Well, I agree with your concern about the money going to the right place. I’d advocate just sending equal cheques to every citizen with a condition that it has to be used first to pay any outstanding mortgage debt for those who have any. But the current system, in which all new money is created as debt (with interest payable to banks and wealthy bondholders) is pretty much optimal for fat cats so any change could only be an improvement. Why do you think we *have* the current system.

    The solution you advocate, deflation through default, is the one currently in effect in Greece, that was in effect over the last few years in the Baltics, and that operated in the 1930’s (the great depression). It just doesn’t work out well in practice as the shrinking money supply makes existing debts ever harder to pay and the economy grinds to a halt.

    My approach (printing money) is what happened during WWII, which was followed by greatly reduced debt levels (government debt rose, but private debt shrank to almost nothing) and a subsequent economic boom of a sort that hasn’t been seen since.

    Like or Dislike: Thumb up 0 Thumb down 2

    TurtleHead Says:
    80

    I saw tonight on the news the number of the people coming into the food bank is up 10% from this time last year.

    Like or Dislike: Thumb up 1 Thumb down 0

    speaking of food bank. Over the past few years, there have been so many people standing at busy intersection asking drivers for money.

    Like or Dislike: Thumb up 2 Thumb down 1

    Here’s an interesting one from BI:
    ROSENBERG: In 2007, I Had A Conversation With Mark Carney That Sent A Chill Up My Spine

    On U.S. Thanksgiving in 2007, shortly after he was named the next governor of the Bank of Canada, Mark Carney and I met at his office in Ottawa. After a bit of discussion about the economic backdrop, he asked me: “Who is the smartest person on mortgages over at the Merrill desk in New York that I can talk to?”
    I asked him why. He showed me reams of data from spreadsheets he had created and said, “Do you see these bracket signs at the bottom?” The brackets indicated negative numbers. I nodded. “This is Freddie Mac’s balance sheet,” he said. “It’s insolvent. And if it is, Fannie Mae isn’t far behind.” Needless to say, that finding sent a chill up my spine. We all know what happened next: both Fannie and Freddie met their demise about eight months later.
    The story speaks volumes about Mark Carney’s intelligence. And his brains, combined with his experience, work ethic, and ability to keep his cool as others lose theirs, will serve him well in his new role at the Bank of England…

    Good thing he saw it. I wonder how many spreadsheets he has on CMHC insurance in force.

    Rosenberg then compared Carney to Gretzky. I think it was Gretzky who said he “skates to where the puck is going”. Chuffle.

    Like or Dislike: Thumb up 9 Thumb down 0

    Sensible Says:
    83

    Jesse:

    So it is safe to say that the Finance officials already know what crises lie ahead?

    Like or Dislike: Thumb up 3 Thumb down 0

    Anonymous Says:
    84

    Re: Furnished rentals. A couple of my comments.

    1. You don’t have to advertise a place as a rental to claim a loss on an investment property. If your interest and expenses are higher than revenue it is a right off on other income regardless if you advertise it as a rental or just let it sit empty for sale.

    2. These furnished rental agencies take about 35% of the monthly rent. The owner is not getting the full amount. Compare this to a regular property manager who might get 10%.

    3. Most of the furnished rentals seemed to show up around the Olympics. There was obviously a market for furnished accommodations during the Olympics but I doubt most of these places are rented more than about a month per year now. There just is not enough demand in Vancouver. Overpriced furnished rentals seems to be a phenomena with Vancouver only. You don’t see this % of furnished rentals in any other city yet we are hardly a tourist or business hub that demands lots of furnished accommodations. Hotels are fairly reasonably priced in Vancouver as well so the demand here should be much lower than American cities.

    4. I think a lot of these are staged places for sale where underwater investors are pitched by the furnished rental agencies to list as a rental. Some may be underwater home owners trying to make their next payment. It also may be used as a marketing tool to claim the place can get an unrealistic rent (for like one week per year maybe).

    Like or Dislike: Thumb up 9 Thumb down 0

    wouldn’t suprise me if carney had had enough of flaherty. carney is a bit of a visionary in that he knows government based reflation and debasement is going to be the wave of the future. canada was well positioned for this. flaherty appears as either a bit clueless or plays dumb or always has outdated ideology. take your pick.

    Like or Dislike: Thumb up 7 Thumb down 0

    Anonymous Says:
    86

    Rent It Furnished was established in 2009 prior to the 2010 Olympics. Here is how they are marketing a place:

    http://rentitfurnished.com/downtown-vancouver-luxury-penthouse-for-sale-1006-beach-avenue/

    “This luxury property has been rented by Rent it Furnished Realty for up to $11,000/month and we are now offering this exclusive property for sale in partnership with Blake Lilly, Remax.”

    Like or Dislike: Thumb up 4 Thumb down 0

    Anonymous Says:
    87

    @paulb: Gotta love that sold/listings ratio!

    Like or Dislike: Thumb up 0 Thumb down 1

    Harry Wang Says:
    88

    http://www.canada.com/news/Robberies spawn charges/7614486/story.html

    Robberies spawn charges

    One of two men arrested for armed robbery was a real estate agent in Maple Ridge, and he has since lost his licence

    Like or Dislike: Thumb up 2 Thumb down 1

    @jesse: If Carney was that smart, he would have started his own hedge shop and shorted the shit out of Freddie Mac and Fannie Mae and bought deep out of the money put options.

    I love Rosie, but I think he’s bought into the Mark Carney hagiography. Don’t get me wrong, I think Carney knew he should get out of Dodge while the getting was good, but I don’t think he’s some type of “spine tingling” genius.

    Like or Dislike: Thumb up 1 Thumb down 0

    Patz says

    “Note how nominal prices, real prices, and price/rent have all returned to the pre-2000 trends – something that the bulls were saying was impossible a few years back.”

    I guess this means the US real estate market has finally recovered. Now if we could just get the MSM to report it that way!

    Like or Dislike: Thumb up 4 Thumb down 0

    [...] normally post about events, but many readers here may be interested in this one.  Here’s a comment Ben left here [...]

    Like or Dislike: Thumb up 1 Thumb down 0

    patriotz patriotz Says:
    92

    @Guy Smiley:
    ” But if it’s in professionally managed rental pool, and not getting rented out, it is wracking up tax deductable losses. No?”

    No. CRA will disallow any deduction for a “rental” property that sits empty more than is normal for the market, because as Guy pointed out, that means the owner is deliberately letting it sit empty by asking too much.

    You can always rent out a property for the market rent, by definition (I mean of course a city like Vancouver, not a ghost town).

    Like or Dislike: Thumb up 1 Thumb down 0

VCI Network

  • Take a Peak.

    The Vancouver Peak Discussion Forums are now open for collecting stats, sharing data, etc. Please register at the new site and let us know what you think.
Leap to comment form