titular void

source

CBC.ca had an unscientific poll (results pictured above) indicating that a whopping 64% were always against the Games Being Played. Are CBC readers more knowing than National Post readers? Are they more prescient than The Province readers? More cynical than The Sun readers? Who benefits?

That leads me to this;

I heard rumours of a possible criminal investigation around the whole Olympic Village debacle. There were a whole lot of "resignations" of City money people in City Hall since the municipal election. I have never had any doubt that there would be shenanigans around the Olympics. There are always shenanigans when billions of dollars are floating around.

So, those pre-sale flippers that thought that they can just walk away from their deposits and contracts are in for a surprise, the developers are suing for specific performance, and such, and will be flogging such units for what they can (25%-40% off to start...). The contract breakers will be on the hook for the difference, plus costs.

"...now many people who put down deposits at the market's peak are obliged to take possession of properties they don't want and can't finance because of tumbling values." link

Jayne sent me an e-mail with a link to this story. (thanks Jayne)

The Second Stage
Another Real Estate Crisis is About to Hit
By PAUL CRAIG ROBERTS

For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits.

The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate...

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.

Things are getting wilder every day.

Has it been foggy, or is it just me?

floe

A Vancouver real estate developer is making an unprecedented move to offer a liquidation sale of $350 million worth of its condominiums throughout the Lower Mainland.

The marketing strategy by Onni Group of Companies is aimed at selling off hundreds of condos in its inventory.

About 375 unsold condominiums in cities such as Richmond and New Westminster will be offered at 20 to 40 per cent off...
link

There goes the neighbourhood. Pity the fools who bought at full price. I caught a brief news clip, and the condo "owner" was flipping out. The poor bastidge probably thought that he would be selling at a tidy profit in a year, and now his condo is worth at least 20% less. This flo development is more like an ice floe that people were cast off on to perish.



In my not-so-humble opinion, the suckers buying at the sale prices will also be finding that they have bought depreciating assets. Then comes the earth quake that will literally put them underwater.

After a 20 hour "emergency session" of the Legislature, Vancouver has received the go-ahead to borrow the money to finish the Millenium (Under) Water fiasco. You, nor I, will be consulted. That will be at least $456 million, and the latest is that it could be as much as $750 million. The limit imposed by the Leg. is to be found somewhere between the Sea and the Sky. In other words, there is no limit. I don't know about you, but I don't think that a billion dollar decision should be made after 20 hours of deliberation. I know that my own head is not very clear after an hour of debate, let alone 20 hours. The silver lining is that the City of Vancouver can borrow the money at "around 4%", while the developer (and us since September) pays 11%. So how is it good that I can borrow money cheaper than you, to cover your arse?

Who did the 52% that voted for the Olympics think was going to pay for this? Who got a Senate seat? Why do we have to have a 60% majority to have proportional representation, but only a 51% majority to put on a party for the rich, that costs us untold billions - directly and indirectly - disrupts our city and lives for 7 years, fuels an RE bubble that sucks in tens of thousands of slogan-addled believers into a lifetime of servitude to own a decaying, poorly built, and over-priced condo.

After 21 years in Vancouver, I have finally had enough. I don't want to pay for this. I'm going to buy a windmill, some hens and a rooster, hand tools, ammo, seeds, some goats, a few dogs, a few friends, a ukelele, an electric 4X4, 99 bottles of beer, buy a lease, build a sod house, learn to love potatoes, trade them for corn liquor, trade that for tobacco, trade that for dental floss and boots, and maybe a paper clip. What? You think that's crazy talk?, Yeah, well, real estate never goes down, you know.

This is going to be one of my last posts here, I think. I still have some photoshops that I just have to do, and a few comments to make, but let's face it, RE is dying an ignoble death. There is no joy or fun in that, and I am over taken by other, more pressing things. I just don't have the time to put in a decent effort anymore, and I'm just embarrassing myself now. Grin.

novelty

What a week, huh?

The November RE numbers are out (as reported by CBC Newsworld a couple of days ago), and Vancouver is 70% down in sales, and prices (benchmark, if I recall correctly) are off 12.3% since May 08. Flippers in Paradise? More like a floppers with a pair of dice, and they've crapped out. Shucks.

OJ, oh, OJ. You are up shite creek now. Justice delayed is still justice - especially when meted out on such a cretin as you by your own doing. Up to 33 years. Try swinging the babes when you are 94, Old Jerk.

The picture up top is from here. If you want a trippy look at reality, check out (the Late) Terence McKenna. (the Late) Timothy Leary rated him as one of the six most important people alive. They are both toast now, and they both have, er, reputations, but if you have an open and adventurous mind, there are some interesting avenues of thought - far removed from benchmark prices, but strangely relevant to granite counter-tops (or counter-culture, at the least).

That vague reference is the best prologue that I can think of for a comment on what is happening to our poor, beleaguered, bewitched, and bewildered land of Canada. I've got to get away from that though, it only brings out partisanship and talking points, and sound bites from the six o'clock news. A great harm has been done to our country this week. Whether one supports this, or that, doesn't really matter. Precedents have been set, and we have no Parliament in what is about to become very desperate times. "The Big 3" have lined up at the trough, and asked for $6 billion, which they are going to get, with no Parliamentary debate what-so-ever. We just pumped $25 billion into the banks, and they reported profits of some 13.9 billion (needs citation) in profits. Down from the $19 billion of last year, and the year before, and the year before. My bank account is down to less than a grand (I spent a lot on lobster and cognac), can I have a top-up too?

We have not yet really noticed what is coming, but it is coming. Pay attention. Prepare for the worst, but hope for the best. How is that for a platitude?

Here is the best picture of Our Dear Leader that I have ever seen. What a clown whore. (no image credit, but I am pretty sure that it is from Image Factory, which is, I believe, of the CBC)



I loved Question Period last week when the Opposition was chanting "leader, leader" after Prentice got up and spoke (in reasonably reasonable tones - even if he is full of shite). Harper looked like he was having an aneurysm, and some painful haemorrhoids at the same time.

Christmas shopping will be a breeze this year for the recently laid-off, there will be no money to shop with. Sorry kids, but we will have to sell one of you for medical experiments. The malls will not be too busy for those with money.

We are giving li'l solipsist an empty can to collect rainwater, and a ruler. I'll make a fancy box for it, and call it the Lower-Mainland Mini Meteorologist Mean Measurement of Precipitation kit (patent pending).

I smell a new cottage industry that The Dragons might be interested in.

timing

I came across this (redacted) story in the Glum and Moving (italics and emboldening mine), about a woman who waited too long to list. I wonder how many stories like this there are - aside from the flippers with shooting stars in their eyes.

When Pat Webb moved to Vancouver a year ago, she didn't think twice about buying a condo in tony Kitsilano...

Perhaps she ought to have had a sober second thought.

But in August, the 70-year-old retiree decided to move back to the United States. She had sensed Vancouver's market was slowing, but a neighbour's condo had sold a week earlier, so she too tried to sell.

And she realized that the market is even more fickle than she.

She listed her one-bedroom, 705-square-foot condo for the price she paid – $509,000 – on Aug. 30. Ms. Webb has since reduced that to $485,000. It still hasn't sold.

That sucks. She tried to sell it for what she paid for it, and couldn't. Plus, she has not accounted for the Property Transfer Tax, lawyer fees, RE agent commission, etc. Then, along came the stock market troubles. I sure hope that she didn't get burned on that, on top of the condo losses.

Today time is all but up, as Ms. Webb is moving back to California. Barring a last-minute miracle sale by her agent, Lindsay Wilkinson, Ms. Webb said she will try to rent out the condo this year and relist in the spring.

Waiting for a miracle... That is sad. I don't think that she realizes that when she re-lists in the spring, the market will have eroded by tens of thousands of dollars more. Her best move would be to bite the bullet, and list for $429K now, else she will be following the market all the way to the bottom.

“I'm disappointed, but not overly surprised,” she said. “I was right on the cusp and then [the market] changed. So timing's everything.”

That has got to hurt. It just illustrates that one can't time the market.

Incidentally, thanks Derek and Brian, for the e-mails. I did not get a chance to remark on them here before they became stale.

terminal velocity in terminal city

Most hopeful blurb of the day...

Priced to sell is this immaculate Renfrew Heights bungalow boasting 3 bdrms up plus a 2 bdrm basement suite. Features 14 year old kitchen overlooking the sundrenched South facing backyard, updated bathroom, hardwood floors on the main, double glazed windows plus a superb location, half block to Gladstone Elementary & within walking distance to the Skytrain.

$595,000.00 2610 E 21ST AV MLS® V724803

It may have been priced to sell last spring, but those days are so over. Chop $80K off, and you might get some action, but you better be quick! That 14 year old kitchen is almost 15 years old, and that doesn't sound like such a great feature. Where is the granite? The stainless steel, and oiled glass? And that sun-drenched back yard is a faint memory until next June. By that time, you will be glad to sell for $395k.

MLS® V726475 may well be one of the "better" deals out there. This is a fairly quiet area, and there is purportedly an 8,321 sq ft lot for $555k. The lot seems quite irregular, but it is smoking big.

Things are definitely moderating, but there is a long way to fall yet.

capitulation

I heard of Cameron Muir on CBC this AM, saying that Vancouver RE has corrected by 12% since March, and will correct another 18% over the next year. Wait a minute! Wasn't he saying earlier this year that price increases would moderate to 8% this year, and a bit lower the next? Now he is talking about a 30% correction. If we extrapolate the errors of the forecasts of the experts, we ought to see a 70% correction before this is done. Why does anyone even bother to interview these bobble heads? They have their heads so far up their arses... If it was me, I would be too embarrassed to get on the radio and make another prediction. And the interviewers... I would ask "well, you were so drastically wrong over the last 8 months, why should we give your statements any credence now?" Pulitzer must be weeping in his grave. Maybe rename it The Puh-leasitzer Prize, and award it to the most vapid "journalist".

I did my bi-monthly MLS search for all of East Vancouver today, and came up with 3 properties under $400K. That is a slight improvement over the one that I found last time. Pushing the maximum price up to $500K provides 35 properties - pretty much all of which are junk. The place that I wrote of on Oct. 10 has been "slashed" from $499K to $469K - not nearly enough.

The blurbs are not so over-the-top anymore; no real mention of heritage features such as original, cracked concrete walkways, and such. I found the place featured below ($419K), and thought the photographs to be simply weird.

Attention Builders or 1st time Buyers, cute 3 bedroom rancher on 41st/Earles in sought after Killarney area, renovate it to your hearts desire or build your new dream home, steps to all amenities, sunny south facing backyard/garage with lane. V727568

This wondrous house of character and fortitude comes with a door knocker and letter slot on a dove grey door!


A lovely, original fireplace (converted to gas!), with energy saving, candle-powered coach lights! These fine chattels are included in the purchase price!


Here is a close-up of one of the coach lights. The discerning value buyer will instantly recognize the antiquity of these features - as evidenced by the layers of dust. Sotheby's is interested!



There were 5 such pictures of the property. No over-view shot, no shots of any rooms, just fixations on mundane fixtures. Sad sellers.

I feel myself preferring (again) the fun of the housing crash over the over-all crash. It is easier to laugh.

bleak monday

Yikes! Ouch! The TSX gave up 840 points today, DJ took it's biggest single-day loss ever. Tokyo closed down 340-something just a bit ago, Hang Seng down over 400 with an hour or so to go. Stephen Harper said today that the Canadian economy has "good fundamentals", and that what is happening down south, well, we are insulated. It's different here. Jeebies, doesn't that sound familiar? I might have felt better had he been wearing a cardigan when he said it.

The TSX is down 9% today, and my memory bank echoes with the words that the losses were $104 B-B-B-Billion - out of Grampa's retirement pension fund. Out of those Mutual Funds that were sold to you so adroitly. Market-linked GIC's? They did not sound good to me, and I didn't buy 'em. Oil down 10 and a half bucks on the day. What else?

The meltdown is upon us. I made sure today that all of our cash holdings were spread out to be covered by CDIC. I would advise you to do the same. I have to say though, that I do not even trust CDIC solvency if this keeps going. This is historic. Remember it. Oh, never mind my admonition, you will remember it. Alberta's boom may be on hold for a while if this continues (and I am sure that it will).

I'm looking forward to buying a house in Shaughnessy for $300K when this is over.

Still want a Harper majority? A Dion majority? Forget it. The only hope we have is for coalition gov't. A co-operative government, where decisions are made by consensus amongst the parties that represent the majority of Canadians. Don't want to see Young People Fucking? How about All of Us are Fucked? Pardon the vulgarity, but it is that stark.

There are those who say that this is a manufactured crisis, and I lean toward that. Here we have right-wing governments - under Bush and Harper gutting our treasuries, cutting taxes while increasing spending. Harper's gov't has turned a 14 billion $ surplus into a near deficit in 2.5 years. Some say that the only reason we are not in deficit, is the sale of frequencies to cell phone companies (reaped about $3.4 billion, if I remember correctly. We would be a billion-seven in the red else). That was a one time deal. Kinda like when Campbell sold BC Rail, and tallied a surplus. And look where that got us. 400,000 jobs have disappeared under Harper's regime, with plenty more to be lost.

Watch The National on CBC tonight. It is worth the watch. There is a very good interview with Elizabeth May. The Greens are the most centrist party of all of them, but they don't have the vicious experience of the House. I think that May could tame the Liberals, and pull them back to the centre in a coalition. That is what Canadians really are. We also pull together in difficult times.

Here are some vids to relieve you from my rantings - which will continue manana. Some of the vids are amusing, some stark. A good few have tunes. I hope you like at least one. There is some really heavy schtuff to come.

funny

amero

joking?

alliteration under the volcano

Vesuvius 1822

Wow, the shite is hitting the fan. Lots of talk about 1929, global depression, doom, gloom, and despair - and that is just the MSM! The commentary runs from the apoplectic, to the apocalyptic, to the apathetic, to the apologetic - and that is just the A's! I thought that I ought to add to the mix with some brimstone, bitter nettle, bone heads, and just a little braying.

Speaking of boneheads;



The picture is from this article - a nice synopsis, and I redact;

Let's take a look at America 's...entire financial system...in the process of blowing up...over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way...over $1 trillion has been transferred from the Fed to the banking cartel...estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.

Taxpayers are on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. When Superman fails to show up, Washington might consider giving David Copperfield a call. Get the popcorn ready.

Those clowns up there are the architects of all of this, but they won't be affected by it, they have made out like foxes in a hen house. My rough estimate of the debt that 330-odd million people just accrued (whether they wanted to, or not) is tens of thousands of dollars each, and that does not count the wars, and such. All to bail out banks, mortgage companies, and insurance companies whose directors and CEO's collected tens of millions of dollars in bonuses. AIG alone cost $2575 per man, woman and child. Sounds fair to me! Everybody loves an insurance company.

And yet more clowns, chimps, chumps, cheats, whatever (I promise not to go through the whole alphabet).

The mental midget. The picture says it all - RESPONSIBLE. Responsible for 0%/40 year mortgages, responsible for blowing the surplus, and very likely for putting the gov't into a deficit situation. Responsible for leaving a $5-6 billion deficit in Ontario after just one term as provincial finance minister. He is no economist, or financier, he is a lawyer. Let us not see the likes of him return to the finance portfolio.



Heil Harpler. (complete with lip-stick on the pig)



What an unfortunate (if defining) photograph of this clown. I find it hard to believe that he has pulled the wool over so many people's eyes (as evidenced by poll numbers). Have Canadians not been paying attention to the chimps in the first picture these last 8 years? I find that to be very disconcerting, though I ought not to be surprised; after all, so many Canadians drank the RE kool-aid, I really ought to have lower expectations.


The picture above leads right into the photoshop below, though instead of looking like an evil dictator, Harpler ends up looking more like the incompetent Sgt. Shultz from Hogan's Heroes. I really hope that people wake up in the next 3.5 weeks, and get rid of this prick for good.



Things are not looking so good. I predicted back in January that we would see the TSX back at 8,700 before this is all over- I am now revising that to below 7,000. I also predicted that we were heading to a depression (in 2005), and now the MSM is predicting the same thing (that is my braying).

Good luck everyone, I hope that you don't have debt, and do have lots of savings, you are going to need it.

More reads -

The Ultimate Wall Street Nightmare

more gloom

unintended consequences

Vancouver leads fall in house prices

So much to write about, and so little time...

report

Yesterday, the Missus and the Ba, and I (Da) checked out this "lovely 1912 home" just for fun (it was an Open House, and we were passing by). The first thing that the agents said (beyond "hello") was that the price had been dropped from $799k to $709k, and that the sellers were "very motivated". The male agent started blathering about how the market was strong for another 4-5 years. I did not ask why the price reduction in the face of all that market strength.

The agents seemed a bit dejected.

The house is tenanted, with the main and upper floor rented at $1300/month, and the basement suite rented at $700/month. The two bedrooms at the top were very small, and the Missus said that it would be good for a couple, but not so much for a family. The kitchen has been recently modernized, and the basement suite was all modernized -with new plumbing, wiring, drains, etc. I asked if there was still knob and tube wiring in the house, and the agents were...evasive - pointing out the original fir trim and panelling.

The female agent looked at our gorgeous Ba, and said "Hi. You're kind of cute." The Missus looked at her sharply (usually, we hear "gorgeous", beautiful", or "adorable"), and I muttered that the house was "kind of over-priced".

It is a character-filled house, but I would not offer more than $400k.

gotta go

I did this screen-grab (click to enlarge) for your edification (McLovin provided the link on a couple of local blogs). It's beautiful, and coming soon to a neighbourhood near you.

If you are facing or considering foreclosure, you're not alone.

Are you stressed out about your mortgage payments?
Do you have little or no equity in your home?
Have you had trouble trying to sell your house?
Is your home sinking under the waves of the real estate crash?
What if you could live payment free for up to 8 months or more and walk away without owing a penny?

Unshackle yourself today from a losing investment and use our proven method to Walk Away.
link

Then there is this:

Can't Pay Your Mortgage? Trash Your House and Leave

Wachovia's current losses in California are originating not from subprime buyers fallen on financial hardship, but from homeowners who can pay their cleverly structured loans but are just choosing a different fate. "They've been from people that have otherwise had the capacity to pay," a Wachovia spokesperson said on the call, "but have basically just decided not to because they feel like they've lost equity, value in their properties. It's hard to know right now, but we may have seen somewhat of an acceleration problem…as people have reached that conclusion."

But that is what things usually do when you drive them off a cliff: Accelerate, ever faster. The open secret about the current housing crisis is that it is almost wholly built upon debt, which is to say the opposite of money. Everyone owes everyone: American banks borrow money from overseas, structure bizarre loans at home for Americans, which are then sliced and diced into securities and sold back to the international debt markets. The whole thing is a feedback loop made of bills needing to be paid. The best-kept secret of the crisis, however, is that homeowners at the mercy of those greedy banks and lenders -- including Countrywide CEO Angelo Mozilo, who sold off his stock before the crisis to net a cool $290 million while the company's value shrank to practically nothing -- are bailing out and leaving the banks and lenders to sort out the mess of past-due notices themselves.
link

There is a lot more to the article, and links to stories from the people who make good money cleaning up the abandoned houses, which often are stripped of anything of value, and the contempt of the owners is evident in the feces left on carpets, in pools, etc.

I don't know that we will see that kind of behaviour here, but ya gotta wonder.

how low can she go?

I've been up to my arse in alligators, hence the lack of pies.

I stole the image below from Garth Turner's blog posting Pop Heard Around The World. (don't think that he didn't lift it from somewhere) Politically, he's...well anyway, he is telling it like it is vis-a-vis the economy, and some of the comments are good too. It's kind of like wading through comments at Rob Chipman's , but there is stuff worth reading.



Look at that down slope. Pretty steep. And the timeline - aren't we "two years behind the US"?

This is it. The Wile E. Coyote moment has passed. How about that 600 point drop on the TSX today? And the 900 points off last week? That is some 12% down in seven days. My stock list is a sea of red - except for the ones that have Halts on them :[

Oil down below $90. the CAD below .97. Quebecor up shite creek in a lead colander.

Some are talking about TSX below 12,000, try below 10,000. The rout is global. Look for 8700. Then buy. Rinse. Repeat.

Oh, and house prices? How low can she go?

I know that we are immune to everything, elsewhere, but I am in Vancouver, and I'm watching my stocks go down. And I thought that I was different. It's so great to be living down a rabbit hole in The Land of Oz.

Here is some light reading at the Gloom and MarketCrash

And just to round things off -

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.

grief in 5 easy stages

Thanks to zed for sending me this link to CBC's story entitled Canadian real estate sales slip. (I have copied their style of a bold red font for the headline. It's like the colour of...blood in the streets. Very provocative.)

There is a lot of blah, blah - pointing out how things are down, but from a giddy escalation. Good news with the bad news, wot?

Vancouver's real estate market once again topped the country's most expensive. The average home sold for $582,354. That's down by about $5,000 from August, but still represents a better than 10 per cent hike in the past year.

"The underlying economic conditions in Canada that affect real estate are still very strong," said CREA president Ann Bosley in a statement. She attributed lower overall sales to the "volume of new listings."

And just what might be driving that "volume of new listings"? Has someone accepted the diagnosis of terminal bubblecoma?

As I read all of this, and along with everything else, I was minded of Kubler-Ross' Five Stages of Grief, and wondered if we were into acceptance yet. The bargaining is yet to come, and then, the depression - in my rosy view.

so what gives? - prices, that's what

A couple of weeks ago I brought this place to your attention here (well, 28 days ago). It was listed at $749k. Today it is listed at $728k. A breezy hair cut of $21k - $750/day. Just wait a year, and you can save yourself a cool 1/4 $million, though they may start dropping the price by $1k/day soon.

The cracks are starting to appear in the "sellers' market".

"Bears" will be vindicated.

I have added "dropping prices" to the labels - so that we can follow things down. Finally!