A Tale of Two Economies...

[GRG55]

Re: A Tale of Two Economies...

I am not sure there is an equivalency here but everytime the US has "balanced their books" it resulted in a depression/major recession.

Canada "hit the wall" with the foreign bond markets in the early 1990s, and there was a major restructuring with tax increases and government spending cuts. After several years of gradually shrinking deficits the Canadian Federal Budget went into a small surplus in 1997. Canada ran budget surpluses 11 years (1997 to 2007 inclusive) until the government got cold feet and decided it needed to goose the economy like Obama was doing south of the border in the wake of the financial crisis. The 2009 deficit exploded to more than CAD $55 B, wiping out the cumulative surplus from the prior decade, but the Loonie Left and the always smug Canadian media that panders to them thought this was wonderful news coming from the heartless Conservative government in Ottawa, run by an even more heartless redneck Albertan Prime Minister.

What did it get us? A housing bubble that is likely to deflate at some point, and overindebted consumers with maxed out credit cards living on their cashflow. I'm just waiting for the media articles once the SHTF demanding the government "help" Canadians out of this mess of their own creation. Owe Canada...

[GRG55]

Re: OMG!!! Canadians are Corrupt???

From Toronto...


http://www.greaterfool.ca/2013/04/26...this-together/

...A brief follow-up on the woman starring in yesterday’s post. Kerri-Lynn McAlister is an exec at an online company selling mortgage referrals, and a media-savvy promoter. The Toronto Star’s real estate writer (Susan Pigg) featured her yesterday in a splashy piece on how condo-renters are being screwed by big rent increases. The back story: investor-landlords rake in the money and tenants suffer. Just the kind of message mortgage lenders get all juiced over.

The Star portrayed McAlister as a distraught renter. It did not reveal her position as a mortgage player, a real estate spokesperson nor someone previously interviewed by that paper as a housing expert. Until this blog got involved. Editors then went into damage control. Another writer was added to the story, the piece was rewritten to identity KLM as an insider, and the focus was shifted to the demands of a tenants’ association for more rent control laws.

In addition, this was added: “Note – April 26, 2013: This article was edited from a previous version to include the age and occupation of Kerri Lynn McAllister.”

Now, this is not a seminal story by any means. Poor KLM was just doing her job, which is to trash renting and promote buying. If I ran a website churning dollars with every click-through loan referral, I’d want this little digger on my bench.

But if I ran, say, the Toronto Star, I’d be wondering, Did the writer know this information and suppress it because the ‘victim’ angle was stronger? Did the writer not bother to Google the person she devoted a half-page to? Was it a lack of ethics or competence? Or is the writer’s undeclared mandate to promote real estate ownership, since the newspaper cannot afford to lose more lineage from developers, builders and realtors...

[GRG55]

Re: A Tale of Two Economies...

Another entry from the "Owe Canada" file. The blogger, Garth Turner, was twice elected as a member of the Canadian Parliament and was Minister of National Revenue. I think the House of Commons was a funnier place when he was there...

The perfect Canadian

At his final media fling, central bank boss Mark Carney looked patrician, cocked a pinky, arched a brow and warned darkly. If people don’t stop borrowing money, he said, rates are going up. So there.

Do we have a debt problem? Does Justin Trudeau have good teeth?




But first, let’s go to Winnipeg, where you know winter is ending when the flooding starts. At least in bad years it drowns the mosquitoes. Here’s Gwen. She’s pissed at me.

Garth: I’m sending you a link to a Kijiji listing for a house for sale in my neighborhood in Winnipeg. It listed for $419,900 and sold last fall for $375,000. I know because we looked at it then, and decided not to go for it – although it has a better location than our current house (this one looks on to a manicured park), we felt $375,000 was too much money, especially how comfortable our current house is. We thought the best move was to just stay put and stay conservative with our money. Now the house has new paint and countertops and is apparently worth $45,000 more?!

I thought real estate was cooling? It can’t be different in Winnipeg, can it? I am starting to think I am the Greatest Fool ever…had we bought the place we’d be $45,000 richer.

BTW: Our family income is $190,000 per year, we own a house appraised at $330,000, a cottage worth $150,000, hubby and I have $54,000 in RRSPs, between the two of us $14,000 in RESPs and owe $367,000 total in mortgage debt on the two properties and about $18,000 owing on student loans. We’re 36 and have two little kids.

Could Gwen be the perfect Canadian? Methinks. She and her husband are house horny (check), they owe lots (check), they make good money but obviously piddle it away (check), most of their net worth’s in real estate (check), they think debt is equity (check), and she blames me for not having a sexier house (double check). Gwen is also consumed with greed or envy (hard to tell which), and now believes if she’d borrowed more money to buy a better house she’d be richer than she thinks. Or whatever.

More...

[santafe2]

Re: A Tale of Two Economies...

Canadians: More "German" than the Germans...apparently...

What did it get us? A housing bubble that is likely to deflate at some point, and overindebted consumers with maxed out credit cards living on their cashflow. I'm just waiting for the media articles once the SHTF demanding the government "help" Canadians out of this mess of their own creation. Owe Canada...

Hum, the last Canadian atrocity I remember was sending Gretzky to Los Angeles. As for the housing bubble, if the bottom is in about five years the timing should be just about right for those of us who understand how quickly the Southwest US is drying up. Get ready, Americans are going to be heading north. You're going to need a very sturdy fence.

[BadJuju]

Re: A Tale of Two Economies...

You could just go to the Southeast US. We are getting more and more record years of rain. We've had 25 inches of rain so far here.

[GRG55]

Re: A Tale of Two Economies...

Hum, the last Canadian atrocity I remember was sending Gretzky to Los Angeles. As for the housing bubble, if the bottom is in about five years the timing should be just about right for those of us who understand how quickly the Southwest US is drying up. Get ready, Americans are going to be heading north. You're going to need a very sturdy fence.

Everyone welcome! Just as long as I don't have to become a Cubs fan...

[Polish_Silver]

The lure of real estate

Could Gwen be the perfect Canadian? Methinks. She and her husband are house horny (check), they owe lots (check), they make good money but obviously piddle it away (check), most of their net worth’s in real estate (check), they think debt is equity (check), and she blames me for not having a sexier house (double check). Gwen is also consumed with greed or envy (hard to tell which), and now believes if she’d borrowed more money to buy a better house she’d be richer than she thinks. Or whatever.

More...

I think this shows well the psychology of real estate. The "housing investment" is easier to show off than money in the bank or other assets. (Many Bugs wisely keep thier holdings a secret). The "housing always goes up" idea masks the risk taken with the mortgage debt.

Underlying it all is the idea that "more networth brings more happiness", when a better idea might be "more risk brings more worry".

[santafe2]

Re: A Tale of Two Economies...

You could just go to the Southeast US. We are getting more and more record years of rain. We've had 25 inches of rain so far here.

I know, it's crazy the way weather patterns have shifted over the last few years. You all need to live in boats and we can't buy a drop of rain. There was a brief break in the mid-2000s during the last El Nino but it's so dry again even the Rio Grande is drying up. We just completed a huge diversion project to ensure Santa Fe will get it's share of water, at least for now. I'm not sure what will happen when folks in Texas and Mexico get serious about getting their share. It's really too bad but at some point we may have to move north of here.

[santafe2]

Re: A Tale of Two Economies...

Everyone welcome! Just as long as I don't have to become a Cubs fan...

Good, we're vacationing in Nova Scotia this summer while our dollars are still worth something.

[BadJuju]

Re: A Tale of Two Economies...

I'll sell water to you now for you to take me to Oregon or Washington later on!

[GRG55]

Re: A Tale of Two Economies...

Good, we're vacationing in Nova Scotia this summer while our dollars are still worth something.

Nova Scotia is picturesque no doubt, and I am an unashamed fan of my country, but especially the west where I live.

Turn up the sound when you watch this:
http://www.youtube.com/watch_popup?v=ThFCg0tBDck

(and remember to breathe... )

[Fiat Currency]

Re: A Tale of Two Economies...

Nova Scotia is picturesque no doubt, and I am an unashamed fan of my country, but especially the west where I live.

Turn up the sound when you watch this:
http://www.youtube.com/watch_popup?v=ThFCg0tBDck

(and remember to breathe... )

Amen says the born and raised Ontario boy. That's been my home for 20 years now. If the winter gets a little too long/harsh ... plenty of warm nice places to fly into for a break. I've always liked that video.

[Edit] Oh .... and fly fishing starts soon

[astonas]

Re: A Tale of Two Economies...

Amen says the born and raised Ontario boy. That's been my home for 20 years now. If the winter gets a little too long/harsh ... plenty of warm nice places to fly into for a break. I've always liked that video.

[Edit] Oh .... and fly fishing starts soon

I have to say, you guys do make a great case for your country. Of course, a few of us have been looking enviously at what you have going on up there for quite some time anyway.

Universal health care (the real kind, not the insurance company handouts we implemented here), sensible governmental structures, the lot.

I'm sure that it's possible to find things to gripe about anywhere, but you've got a good thing going up there. It gives a guy hope to see that such things are possible.

[GRG55]

Re: A Tale of Two Economies...

I have to say, you guys do make a great case for your country. Of course, a few of us have been looking enviously at what you have going on up there for quite some time anyway.

Universal health care (the real kind, not the insurance company handouts we implemented here), sensible governmental structures, the lot.

I'm sure that it's possible to find things to gripe about anywhere, but you've got a good thing going up there. It gives a guy hope to see that such things are possible.

I learned to really appreciate the experiment that is Canada, flaws and all, only after I moved overseas for nearly a decade. After witnessing first hand the tribalism that seems to be rooted in most of the peoples in every other part of the world in which I lived, worked and traveled, I came to the conclusion that Canada is a rather unique place. We have people from all over the world, all cultures, religions, languages, and ethnic backgrounds living together in relative harmony. I didn't realize how rare that is until I left this place for a while, and I don't take it for granted any more...

[BadJuju]

Re: A Tale of Two Economies...

I really wish I lived in Canada. That would be my first move if I could move out of the USA. Take me to Quebec City or the PNW.