speculating on speculation

Mike Mac.... sent me this e-mail last week (it's always good to get good reviews!)

Hey man, love your blog.

I was thinking about the "It's different this time" line of reasoning. I'm a big fan of Dickens and this comes out of Nicholas Nicholby. I thought you'd find it interesting:

`Spec--u--late, my dear?' said Mr Nickleby, as though in doubt.
`Why not?' asked Mrs Nickleby.
`Because, my dear, if we should lose it,' rejoined Mr Nickleby, who was a slow and time-taking speaker, `if we should lose it, we shall no longer be able to live, my dear.'

`Fiddle,' said Mrs Nickleby.
`I am not altogether sure of that, my dear,' said Mr Nickleby.
`There's Nicholas,' pursued the lady, `quite a young man--it's time he was in the way of doing something for himself; and Kate too, poor girl, without a penny in the world. Think of your brother! Would he be what he is, if he hadn't speculated?'

`That's true,' replied Mr Nickleby. `Very good, my dear. Yes. I will speculate, my dear.'
Speculation is a round game; the players see little or nothing of their cards at first starting; gains may be great--and so may losses. The run of luck went against Mr Nickleby. A mania prevailed, a bubble burst, four stock-brokers took villa residences at Florence, four hundred nobodies were ruined, and among them Mr Nickleby.

Tell me Rennie doesn't have a villa in Florence. :)

Indeed! I have noticed that many places that I see "For Sale", whether on MLS, or in driving around, are empty. No furniture, no plants, no swing sets in the back yard...empty. Who owns these houses? Speculators is my speculation. And they will be ruined. Unfortunate fools will be too, but nobody forced anyone to buy such insanely priced properties.

And really, RE is the least of our worries.

bleak friday

At least the weather was not bleak today. In fact, it was another beautiful day on the Lower Mainland. That's why we live here. We can see the mountains on these beautiful days, and dream of the Olympics, and maybe even go up to the mountains, and shout across the whole delta that we are here, and it's the best place in the entire freaking universe. Forget condo appreciation day (kind of like nurse appreciation day), we have condo appreciation years.

Is it unravelling? Rob Chipman's numbers are all over the place, and other realtors who comment haven't got a clue either. The stock markets are all over the map too, up and down, shaking out, teetering on the brink of collapse. There just has to be trouble when the TSX consistently outpaces DJ. It is like Vancouver holding out in RE when all around is falling.

None of that is real news though, the real news (on CBC, anyhow - which I staunchly defend - for all it's shortcomings) is the border line-ups as Canadians return from pumping 100's of thousands, millions even, of dollars into the American economy on it's biggest shopping day of the year. Christmas shopping early! The sales are fantastic! The coverage is breathless. (where is all this money coming from?) So sorry Vancouver retailers - we don't need you. We are rich on RE, and all we need is a few baristas to make our lattes, and a few pool boys for whatever they do. We'll just drive down to Bellis Fair to do our shopping and turn all the empty retail spaces in Vancouver into store-front condo's.

I've been hearing rumblings too of the BoC dropping rates by as much as 1% over the next year. The principle driver of that outlook is not the high dollar, so much as the economy is flagging, and some say (sorry - no links) already in recession. But is it the dollar that is putting the squeeze on the economy? or flagging exuberance? The end of a bull run? That would, of course, exclude Vancouver, because it's different here, and we have all this construction, and mountains, and the weather.

property rights through copyright

I realize that some of my posts are overly self-indulgent (the bitch-slap post being a case in point), but ultimately, I am writing, and fiddling with photo's, for my own amusement. I still want you, the reader, to take something away though...

A year or so ago, there was a lot of talk about oil and gas and mining companies staking private property, and making resource claims on same. A lot of people found this to be outrageous, and I certainly did. There was the guy out in Vernon exercising these staking rights, and was very busy traipsing over people's lands and there was nothing the property owners could do about it. Then there was the ranch up near Ashcroft that had a company mining kitty litter, and generally destroying the land. Again, the property owners had no legal recourse. It gave me pause for thought in buying raw land. Most of the province is being staked, and it would be difficult to protect against such intrusions and trespasses.

Perhaps one could stake claims on any land one chose to buy, but the "companies" have already staked most of it. How to deal with that? I read an article in Canadian Art magazine about one artist's way of protecting his land...he copyrighted his property as an autonomous piece of art.

Peter von Tiesenhausen, in 2005

"...set a legal precedent by successfully claiming copyright of his land as an autonomous piece of art, thereby protecting it from encroaching oil and gas interests." Again, one might view such legal safeguarding as the politico-legal incarnation of the romantic desireto parcel up and control the landscape. But really, when urgent and large-scale legal reforms seem like a pipe dream for environmentalists and concerned artist-citizens alike,how can one resist the legal system by operating in it's extant, if flawed, strictures? Von Thiesenhausen's legal success offers a glimmer of hope in an ever-more-hopeless world. His paintings,like totems salvaged from a fire in the studio of his beleaguered mind, stand as a bittersweet celebration, a small victory for art over the big murder of economic progress.

That same small victory could be claimed by whomsoever would make a mineral claim on Gordon Campbell's land on the Sunshine Coast, and proceed to quarry it for gravel. It was after all, the Campbell government that made it so easy for big business interests to lay claim on the private lands of British Columbians... And since property rights were omitted from the Charter of Rights and Freedoms, we must protect those rights in any way that we can.

Hurrah for Peter von Tiesenhausen!

bitch-slap ahead

I always enjoy reading The Republic of East Vancouver, and this week, there is a good article about Dan Rather coming to Vancouver with a camera crew (hacked up below). This may be unwelcome coverage for The Best Place on Earth (TM) in the wake of the homicide by police officers of a new immigrant to Canada, the inquest into the police culpability in the death of Frank Paul, and of course, the on-going problems of the DTES. The torched bus on Commercial Drive would have been a cool backdrop for this pre-Olympics survey.

It is easy to pull out cliches right now - like The Wizard of Oz, The Emporer's New Clothes, and another few that I forgot in my drunken musings, but this arrogant city is in for the bitch-slapping that it deserves (no misogyny intended or implied).

Oh my God, what have we done? Everyone’s afraid what skeletons Dan Rather’s gonna find in our closet.

The famous American broadcaster... came to Vancouver this week, and he brought a camera crew with him.

Understandably, the local Mayberry Chamber of Commerce, in double-time rethink mode about all this talk of putting Vancouver on the map, is nervous.

Where is Rather going? Who is he talking to? Why is he looking over there?

Putting aside all value judgment and blame for the moment,...the downtown eastside has come into being. It is what it is, and unless we want to get real ugly with buses and cops and tazers, it’s not going away in time for the media frenzy that is the Olympics, just 27 months away.

Vancouver is one nervous city. Dan Rather risks being shot showing up here, now, with his camera crew. Not now! the city screams in terror behind the shut curtains, too early! We’re still getting the party ready!

Unfortunately, there’s no help. We’re just at the front of this parade and the whole world is behind us thinking we’re the ones who must know where we’re all going, or else we wouldn’t be in front. But what nobody behind us can see yet is the wall we’re staring at in front of us. Yeah, we are the new capitalism and globalization, and yeah, we’re making a whole lot of money. Now what?

Read the whole article here.

deceit

On victory born of deceit

I, Virtue, soak the tomb of Ajax with my tears, alas, wretched, having rent my whitening hair. Certainly this matter still remained, that by a Greek judge I should be vanquished: and that deceit should have the stronger defence. link

This is just food for thought. I can't write the situation any better.

It is Amero-centric, and is a departure from Vancouver RE (I seem to be doing that lately), but I think that it is pertinent and applicable to what we are/will be seeing here. (emboldening mine)

How does the government deceive us? Let's count the ways.

Employment/Unemployment: Job hunters vanish without a trace after six months, and ghost jobs are created in the hundreds of thousands by a bogus "birth/death" model.

Inflation: As even the mainstream media is now admitting, official inflation is grossly manipulated to appear half of the true rate (3% vs. 6%). This lowers payments to those costly entitlement retirees and maintains the illusion that interest rates can be kept low because inflation is so low.

GDP: The GDP number always comes in "hot" and is usually revised downward later, when nobody's looking.

Federal Deficit: The Federal deficit contains a huge deception: the Social Security surplus is spent to offset current spending, reducing the "official deficit" by hundreds of billions each and every year. In exchange for these trillions, the Government issues the Social Security fund an IOU. The IOU is now about $4 trillion.

If this fiscal legerdemain were outlawed, then the true Federal deficit would be double or triple the "official" deficit.

"A strong dollar is in the interests of the nation." Hahaha... is that why you've engineered a 33% decline in our buying power since 2002 (the dollar index dropped from 120 to 80 in that time and is currently 78.) I'd hate to see what would happen if a weak dollar were in our interests.

All these accounting tricks serve one purpose: to deceive the citizenry and the world into believing the U.S. economy is stronger than it actually is.

2. The government has opened the floodgates of money and loosened banking regulations to help all those poor investment bankers. Regulators who should have provided oversight of the lending, mortgage and derivative markets have been idling away their time, doing anything but their job. Who's benefitted? Their pals churning all the origination fees, that's who.

3. The banks sold hundreds of billions in "safe investments" to institutions, domestic and foreign alike. Only now are the true risks and illiquidity of these SIVs, MBS, CDOs, etc. being revealed in the grim light of day.

4. Our trading partners who export vast quantities of goods to the U.S. (and who run stupendous trade deficits with the U.S.) have bought trillions in U.S. debt to keep us afloat. Since Americans don't save anything, somebody has to give them a credit card to fund all that spending.

So what's hidden? How utterly dependent the U.S. is on foreign buyers of Treasuries and debt to keep U.S. interest rates low. That's another little wink-wink, of course; when the Fed slashed the Fed Funds rate a half-a percentage point, headlines blared "Fed Cuts Interest Rate." Meanwhile, back at the Long-Term Interest Rate Ranch, 30-year mortgage rates actually went higher after the Fed's cut. Huh? Yes, that's right--because the market sets the long-term interest rates, not the Fed. Not that you'll ever read much about that, though.

So the "debt junkies" in the U.S. get their "fix" of abundant, low-interest debt from the "pushers" who need the junkie to keep buying exports and oil. link

sinking in seattle

(I picked this photo' because in the smaller version, the hose hanging on the left looks like a person in a green jacket standing there. That, with the trellis, reminded me of the iconic American Gothic, and it seemed kind of fitting.

And what is it with RE agents that frame pictures like drunken land-lubbers at sea in a pitching storm?)

patriotz left a link (on an earlier post about the place in New West.) to a Seattle house listed for $475k (roughly $425K CAN - grin). This is a brick house boasting 1,750 sq', and is close (relatively) to DT Seattle. I might remind you that Seattle actually has industry (Boeing, Microsoft, etc.). Your mortgage interest is tax deductible.

Check out their other listings too, it's interesting to see the reductions, and the $475K, 900 sq' Puget Sound view condo's. If Seattle is going down, so are we.

The unfortunate side effect of this sub-prime debacle (nowhere near over), and the Roman holiday that will be visited on the RE market, and further, is going to make the Depression look like a cake walk. That is part of why I wanted to see this bubble burst a long time ago. It's never so simple as it seems.

hype

This is normally condohype's bailiwick, but this came into my front door today, and there are two things that irk me (well, much more than two things...); wasted resources, and paper that comes in my front door, and goes directly into the recycling bin (kinda the same).

The paper that this advert. came on weighs 20 grams. I don't know how many people in Greater Vancouver (I refuse to use Metro Vancouver) received this, but let's say (very conservatively) 100,000 households. That equals 2,000 kilograms of wood pulp. How much carbon would that produce - from production to delivery to disposal? (I am not a Global Warming acolyte/fanatic/reactionary) It's a couple of trees that could be sequestering carbon, at the very least. Add in the toxic inks etc., and these chumps are chumps.

As I pointed out, I am not a Global Warming guy, so on to the advertisement itself...

The artist's rendition of the completed project has mature trees, and an established, bucolic atmosphere. The reality is always so much different. Selling dreams and fantasy, and I have the nerve to moniker myself solipsist. Just make it so - build it, and they will come.

The ad. goes on to mention granite, marble, stainless steel (isn't that passe yet?), custom crap etc., and 3.5 acres of private greenspace, blah, blah. Private to whom? The couple of hundred (or more) residents? Does that count boulevards, etc.? How private is it? Can I frolic naked, and have bacchanals at my whim?

Then, there are a couple of pic's - one has a soft focus framing of some seasonal flowers, and is emblazoned with life, the other has people walking so fast that anything less than 1/250th second shutter speed cannot capture them, and is emblazoned with style. Is it life, or style? The imagery is contradictory. The life suggests stopping and smelling the flowers, while the style suggests that it is going to be very fretful to try to pay for this junk.

Then, they admonish to take advantage of your Last Chance for 2007 Prices! There are only about 7 weeks left in 2007, and 2008 is not looking great for RE prices. Do they really think we are that worried about being priced out.

I also wonder at the claim of South Burnaby's fastest selling new residential community. How many new residential communities are there in South Burnaby?

Give me strength.

note: I deliberately blurred all contact information, names, etc. I will not help to promote this crap.

broader horizons

Mark K sent me an e-mail regarding a property in New West. I do stay focussed on Van. proper, but maybe that is narrow-minded of me. I'm kind of slow on the post building these days too.

Mark rightfully points out that this place is "close to all type of transportation" - namely, the SkyTrain screaming over your head every few minutes. I have a particular predilection for modern vinyl over the old-fashioned variety too.

They are having an open house every Saturday (until the damned place is sold!), but still admonish to act fast. Lots of Park too.

Nice.

Dude! I know this is New West not Vancouver but you HAVE to see this POS! "Close to all type of transportation." No Sh**t!

Thanks Mark

Beautiful updated 3 bdrm 2 full bath house on 5565 sq.ft lot, OPEN HOUSE EVERY SAT 2-4pm. The house has river view from dining rm, affordable price, 2 blks to skytrain. Close to all levels of schools and shopping. Brand new Washer & Dryer, also fridge & stove are 1 year old, freshly painted. Vinyl exterior, new drive way many updates. This house shows great. Beautiful garden with storage & work shop. Amazing yard & landscaping. An excellent for first time buyer. Quiet street with no thru road. Family oriented neighborhood. In thought after West end location in New Westminster. Super Central location. Close to all type of transportation. Come to the OPEN HOUSE. Act fast, must see to appreciate.

link

I can't help it - this blurb is so painful to read.

To wit;

1) 2 blks to skytrain

Is a blk a new unit of measurement of 12.5 feet?

2) fridge & stove are 1 year old, freshly painted

Why the hell would they paint one year old appliances?

3) In thought after West end location in New Westminster. Super Central location.

What does "thought after" mean? I thought after I published that blurb, that it might not make sense - especially touting the West end as a Super Central location

Oh, I'm tired now.

fighting the ennui

There is something oddly compelling about this place. I have scoffed at it's West Coast fusion of French Maison en pays/Admiral-range-hood-above-the-entrances with the art deco hut perched on top, but I really do like the red front door. That's...ballsy. Suddenly, I hear the Internationale, and I get to like this oddball infiltrator out of Proust or the like.

It's been on the market for better than 90 days, and the old timer that was originally there was listed in the neighbourhood of $550K. Giving for a deep discount construction cost of $100/sq', plus all the other costs, I would think that this place is priced at the developer's margin. That is why I have been watching this place. The price has not budged since September 30th, but the next cut will be seriously starting to eat into any possible profits. Is it time to cut and run?

There have been no signs on the lawn for a while now, but it still shows up on MLS. I don't know if the real estate agent has been reading my facile critiques of the photographs, but this is the best one yet. (Just a degree and a half counter-clockwise, and you are there.)

Enough of the snippiness (it's the ennui), here is your Deal of the Week. The only place in all of East Vancouver listed at less than $400K, in fact, this one lists at $329K. Not only is it a deal, it is the most realistic pricing I have seen for a while.



But calling Strathcona Mount Pleasant is a bit of a stretch.

Handyman's Special on charming street in Strathcona. Super location - only steps to McLean Park & Chinatown. Bring your ideas & hammers.

The stats claim a 4300 sq' lot (86 front x 50 deep), but I don't see that. If that is a fact, this place is a deal in this market. Still grossly over-valued in my estimation though. Steps away from McLean Park and Chinatown = steps away from DTES. I suppose hammers are recommended for self protection, as much as for hanging pictures. It's a cutesy pie little house though, and I do like the blue front door.

I'm giving the photographer a break on this one because there is an optical illusion with that metal railing.

staging vaudeville

Today I was crawling around in traffic with all the other denizens of this world class city, and found myself behind a 5 ton truck emblazoned with DEKORA. It's Canada's largest home staging company. It got me to thinking about all kinds of things;

- are people actually still "staging" their homes? and will people still "stage" their homes after the melt-down?

- what will happen to all the ancillaries to RE in Vancouver? (Revy, Home Depot, furniture stores, lighting stores, property inspectors, property appraisers, a lot of RE agents and their staff, filing clerks at the building department at City Hall, back hoe operators, for sale sign makers, mortgage brokers, etc., etc.) Some will still be around, but there is going to be a lot of pain. There are a lot of actors on the stage.

Then I started thinking about a post. My mind (of course) went to the Photoshopping possibilities, and I dwelled on that far a while, with all of the economic horror stories yammered at me from the radio.

My thoughts are often oblique (ship hits dam being one), but I amuse myself none the less. As I was working the pic's, I started thinking of vaudeville, and I thought that we ought rename Vancouver Vaudeville. Why not? It's a Hurly-Burly city these days, and spectacle, masks, glitter, spotlights, songs and dances, and dogs and ponies are the thing. It's all a distraction - just like Vaudeville was a distraction from the Depression. And boy! is there going to be a lot of depression when things go south.

Things are going south too - just look south. Look east and west while you are at it. This thing has barely begun in the US, UK, Spain, etc., and has not yet begun here. By the time it does, people are going to be so scared shipless, it will unwind here very quickly. The biggest house staging company in the world won't help much then.

I wonder what next summer will look like.



*It's a cheap post because I wasted too much time on the Photoshopping, and Babby solipsist needs a feed and a diaper change. Gotta go.