FFFA! gas, bubble, soft landing

Well here we are, the end of another week.

That means it’s time for another Friday Free-for-all!

This is our regular end of the week news round up and open topic discussion thread for the weekend.  Here are a few recent links to kick off the chat:

Russia/China shakes up LNG market
No housing or mortgage crisis
Overdue for a full blown correction?
CMHC: get ready for soft landing
Rennie: focus on old people
Millenials richer with more debt
Greatest RE bubble not done bursting

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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ILoveCharts
Guest
ILoveCharts

I love it when the bulls and bears start using the same arguments. Rennie’s claims about the glut of seniors who will want to move is the best bear argument I have heard in a long time.

tedeastside
Member
tedeastside

a RE downturn in a city with snowshoeing and kayak opportunities…

get real!!

crikey
Guest
crikey
@#76 from previous thread “in other words, you believe in a soft landing” “Soft landing” is a contrived bullshiat term. We are in a bubble, and there are many ways for a bubble to disappear. The current bubble *could* take many years to unravel, prices could be in a slow decline for years. Or, the bubble could pop violently tomorrow if the right circumstances were to occur. It doesn’t really matter which of the two ways it happens, and in fact the longer it takes the worse the longterm outcome for the real estate industry. Ripping a band-aid off quickly hurts, but is much better than slowly ripping it off. Terms like “soft landing” and “flat prices” are real estate idiot shills’ lame attempts to put lipstick on shiat. It is hilarious when the MSM trumpets some market’s unchanged prices… Read more »
West Coast Woman
Guest
West Coast Woman
I guess the Vancouver Sun, the condo developers and Rennie must be getting worried about the recent decrease in foreign purchases, and they’re hoping the boomers will rescue them by buying into their vision of the future – condo living for everyone! When he was first selling the Olympic Village, Rennie said it would appeal to all those west-side homeowners cashing in on their houses: of course, it didn’t. Most people I know who’ve “cashed in” on their houses left Vancouver, or moved into something much smaller and more distant from the downtown core. Now the marketing is about trying to entice boomers into selling their homes and buying new condos for themselves and their children with the proceeds. Supposedly they will be lured into customizing their own space by buying multiple condos and combining them so they can live… Read more »
CPG
Guest
CPG

“And while the Bank of Canada may be fretting about the country’s low inflation rate (a worrying sign of slack in the economy), consumers themselves aren’t seeing things this way.

The cost of living has surpassed health care as the number-one concern for consumers, the study found.

“There is a perception that everything continues to cost more,” Bensimon Byrne president Jack Bensimon told The Globe and Mail.

Incomes have been growing slowly, if at all, and “things feel expensive because [people] don’t feel they have any more money to spend on them,” Bensimon said.”

http://www.huffingtonpost.ca/2014/05/19/consumer-debt-spending-inflation-canada_n_5340000.html

George
Guest
George

Vancouver Sun has picked up on the story about China wanting to build a railway to North America.

http://www.vancouversun.com/news/national/China+planning+high+speed+rail+line+Canada/9868927/story.html

George
Guest
George
@ West Coast Woman #4 I read that puff piece in the Van Sun about buyers combining multiple condo units to get more space. It did seem like an effort to drum up sales and get people excited about condos. The article was talking about how you have to buy your pre-sale condos early when the project is still in the planning stage so you can customize how you want your units combined because it would be too hard to combine the units after the building is already completed. It seemed like a pressure tactic to get people to buy pre-sales. One could also interpret it as a tacit admission that the condos being built in Vancouver are too small for people to actually live in. There wouldn’t be much need to combine units if the developers were making larger… Read more »
Vincent Dong
Guest
Vincent Dong

There is already a train from China to Vancouver. It’s called Canada Line.

kabloona
Member
kabloona
“Canada April inflation hits 2.0 per cent for first time in two years” https://ca.finance.yahoo.com/news/canada-april-inflation-hits-2-0-percent-first-123444933–business.html By Randall Palmer OTTAWA (Reuters) – – Canada’s annual inflation rate rose to the central bank’s 2 percent target in April for the first time in two years, Statistics Canada said on Friday, further dampening talk of a cut in interest rates. The jump from 1.5 percent in March was exactly as expected in a Reuters survey of analysts, as was the 0.3 percent monthly rise in prices from March. Energy prices rose 2.4 percent on the month, with natural gas jumping a further 8.2 percent after a 10.9 percent hike in March and gasoline up 2.1 percent. The fact that the 0.2 percent monthly price decline in April 2013 no longer figured in the calculations also boosted the annual rate. Bank of Canada Governor Stephen… Read more »
southseacompany
Member
southseacompany

From Forbes magazine; “Greatest Real Estate Bubble In Modern History Not Done Bursting”

http://www.forbes.com/sites/greatspeculations/2012/10/03/greatest-real-estate-bubble-in-modern-history-has-yet-to-really-burst/

“Never in history have so many middle class households been able to borrow so much against real estate at such low mortgage rates.”

“The real estate bubble is like a popcorn popper with different markets frothing over and peaking at different times, but all will burst ultimately. Given that real estate is so local, the best way to gauge the downside potential of your home or commercial real estate is to find out what it was worth at the beginning of 2000 at best and the beginning of 1996 at worst. If you can’t take that much heat consider selling and renting for the next three years plus. From around early 2015 forward we could see the greatest bargains in real estate of our lifetime.”

Son of Ponzi
Guest
Son of Ponzi

There is already a train from China to Vancouver. It’s called Canada Line.
————————-
And some Chinese special interest groups demand it to be called China Line. 🙂

Brian Ripley
Guest
Brian Ripley

re: Millenials richer with more debt “…young families are also wealthier than their parents were. It said the median net worth of households headed by someone aged 25 to 34 years was $52,000 in 2012, almost double the inflation-adjusted median net worth of $28,752 of a comparable household in 1984.”

Interest rates peaked in 1981 at over 18% for a 5yr fixed. In the mid 80’s a Vancouver SF house was +/- $150k.

The millenials I know have very little savings and lots of cheap debt. In the 80’s that cohort had very little savings and lots of expensive debt.

I just did a mashup of the current U.S. experience; real earnings are falling and debt is rising for the 25-34 year old cohort:

http://www.chpc.biz/history-readings/us-housing-update1

Doubler
Guest
Doubler

http://bloom.bg/1i9b98l

Faber Sees `Gigantic’ Credit Bubble in China

Son of Ponzi
Guest
Son of Ponzi

Regarding inflation:
I believe that the CPI number is greatly understated.
One reason is smaller package sizes for the same price.
I stopped buying the 48 ciabatta buns bag, because the buns are getting smaller and smaller.

Ford Prefect
Guest
Ford Prefect

CPG #5: I often wonder how the average person with house, mortgage, car payments etc. manages to make ends meet. Recently my partner and I had relatively minor dental problems, our car needed repairs and we had some vet bills along with day to day living expenses. The bill for these items, all within the past month, has been around $12k. From my experience inflation appears to be a great deal more than is commonly claimed.

Jon
Guest
Jon

My concern with inflation rearing its head is it could juice prices again. Nothing loves inflation more than real estate.

NOM NOM NOM
Guest
NOM NOM NOM

http://www.bbc.com/news/world-asia-china-27533558

This is obviously the tippy-top of the pyramid in terms of “high profile” corruption. But if I were a regional magistrate, skimming a little cream from the public pail, this would have me looking for an out.

What upsets me, is that with all the anecdotal, empirical and observational evidence available,our government is demonstrating a willful myopia towards all this wealth being funneled into our community!

Snake
Guest
Snake

Housing starts point to a soft landing in 2014 and 2015

http://www.cmhc-schl.gc.ca/odpub/esub/61500/61500_2014_Q02.pdf?fr=1400826432543

patriotz
Member

@12: “The millenials I know have very little savings and lots of cheap debt. In the 80′s that cohort had very little savings and lots of expensive debt.”

No, they had little debt relative to income compared to today’s young people. That’s all they were able to borrow due to the high interest rates.

Their debt servicing costs relative to income were comparable at the time, but they dropped substantially going forward due to declining interest rates.

patriotz
Member

@17:

Objectively, why should the Canadian government care whether money coming in from China (or anywhere else) is being obtained from corrupt practices? It’s the Chinese system that’s responsible for the corruption and it’s their problem to fix.

patzonthehead
Guest
patzonthehead

The Canadian gov should definitely care whether money coming into the country is obtained through corrupt practice’s. What are the odds some one will stop their corrupt practice’s once they switch countries?

Son of Ponzi
Guest
Son of Ponzi
Interesting ——————– Canada’s largest school board has opened a Confucius Institute, bringing to Toronto students a controversial global language and cultural outreach effort that is controlled by the Chinese government. The TDSB is embracing the institute just as several universities are severing their ties with it because of restrictions China has placed on academic discourse and fears of political censorship. The institutes offer language and culture programs subsidized by China’s government. The academic activities are supervised by the Beijing head of the Chinese Language Council International, a state agency commonly known as Hanban. MORE RELATED TO THIS STORY School board takes zoning battle with city to court Toronto public schools to get training in mental health Bid for public airing of TDSB spending probes fails VIDEO Video: TDSB to discuss volunteer rules MULTIMEDIA TDSB investigation: Five key passages from the… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

the sinofication of canada is unstoppable. canadians want it, and it will happen.

you didn’t listen to me when i told you to buy a house and you lost out. ignore my advice once again at your own peril. enroll in mandarin classes today!

Son of Ponzi
Guest
Son of Ponzi

400 open houses in Vancouver West as of today.
Could be over 500 by tomorrow.

registered
Member
registered

@20: Because it becomes much harder for honest, law-abiding Canadians to compete for their own domestic assets, some of which like housing are life essentials?

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