Alberta Bubble Blog - Latest Comments in Deja Vu all over again

Re: Deja Vu all over again

worldclass — Tue, 13 Oct 2009 21:44:17 -0000

That article is slightly misleading for the uneducated. The loonie's rise is partly due to speculation that Canada will raise rates sooner than the USA. The article makes it sound like the Loonies rise will CAUSE rate hikes...which is counter-intuitive... since rate hikes will only exacerbate the rise in the loonie.

Hence, investors are thinking the BOC will raise rates similarly to Australia. So they are buying the loonie up now, before that happens.

Re: Deja Vu all over again

worldclass — Tue, 13 Oct 2009 21:41:26 -0000

CC,

Agreed, you cannot possibly "guarantee" that you can do that today with Real Estate. The bubble has already been blown up and deflating for Real Estate. However, with the introduction of QE, low rates, etc... that throws a wrench into things. If you are buying foreign bonds and foreign currencies in countries rich in commodities.... then this may be far better than real estate presently.

However... how many renters are doing this? I bet you are 5% of all renters actually doing what you are doing. The rest do not even understand how to open an account like that. Not only that, they probably don't understand anything other than "forced savings via roof over your head".

So, I do not believe that the guy who is renting and not investing any of his leftover cash is better off than the guy who bought wisely (good land, inner city, etc) and locked in a dirt-cheap rate. Buying a home is, in some respects, the less savvy way to play the ensuing inflation. You can play it with gold, foreign bonds, or just simply selling all your USD's. I would even be afraid to keep all my money in CDN$ GIC's.... I'd probably diversify at least 50% of it into some other investment vehicles.

Mike-o-rama.... to have all your cash in CDN$, and in CDN$ GIC's is pretty much saying you have all your faith that Carney will not perform QE. If you have 1 million in all CDN$ GIC's then god help you when and if Carney prints all of its value away.

Despite the rise of the CDN$ you cannot buy as much gold as you could 6 mos ago, EVEN with the lower CDN$ of that time. So tell me, do you REALLY feel richer?

Re: Deja Vu all over again

worldclass — Tue, 13 Oct 2009 21:30:56 -0000

Actually gold overall has been up, even in CDN$. At least that's what I am seeing with my investment.

Overall, we are all in a good position as CANADIANS! Thank goodness we all work for CDN$ and own things in CDN$.

Re: Deja Vu all over again

Totalmotorcycle — Tue, 13 Oct 2009 05:57:05 -0000

Gloria -- Can you please add this site: http://albertabubbleblog.bl... to your Blog Roll?

Thanks!

Mike

Re: Deja Vu all over again

Totalmotorcycle — Tue, 13 Oct 2009 05:55:57 -0000

October 13th to the 20th.

I've heard a LOT of people on talk shows, financial news and the internet talk about these dates and the stock market in a negative way. The USD is doing down fast and the CDN is going up fast.

Could the 13th to the 20th be a down turning point? I will tell you something, I won't be putting money into anything during this period myself as I watch the markets.

Did anyone read this article today in the Toronto Star?

"Loonie's rise sparks fear of rate hikes
Bank of Canada seen moving sooner than expected as dollar flies past 96 cents (U.S.) to one-year peak.

The yield on the two-year Canadian bond climbed as a result, increasing the gap between it and the comparable U.S. Treasury note to the widest since Dec. 2008, a development analysts said puts more upward pressure of Canada's bank rate.

RBC Capital Markets said Monday that investors should sell the U.S. dollar against its Canadian counterpart on prospects the Bank of Canada will increase interest rates sooner than the Federal Reserve.

It will become increasingly clear that the Bank of Canada will raise interest rates well ahead of the Fed and once it embarks on the normalization path, rate hikes will likely be more aggressive than the Fed," Sue Trinh, a senior currency strategist in Sydney"

Mike

Re: Deja Vu all over again

Totalmotorcycle — Tue, 13 Oct 2009 05:51:48 -0000

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Re: Deja Vu all over again

Totalmotorcycle — Tue, 13 Oct 2009 05:42:11 -0000

Post removed by author

Re: Deja Vu all over again

Totalmotorcycle — Tue, 13 Oct 2009 05:38:03 -0000

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Re: Deja Vu all over again

Carioca Canuck — Mon, 12 Oct 2009 21:19:51 -0000

Worldclass......

Between the $50K we started with back in 2004, the accumulated interest and continual monthly savings made to our investment account, we have, at today's forex rates, less the 15% taxes we have had to pay on our interest (I didn't forget to subtract that, just to be accurate) roughly $265K CAD +/- givne where the bonds are priced and the nominal cash balance in our accounts. It would have been more, but the Real is appreciating right now........not going to cash out however, so it's really no matter to me.

Sounds like about the same gain as had we bought.

Now, here's the big question......can you do that today and accumulate the same amount of equity in the next 6 years wth RE ? I can still buy the bonds close to what I paid with the same yeild........but he forex is 10% against me. Are houses going to go up that much in 6 years ?

Re: Deja Vu all over again

worldclass — Mon, 12 Oct 2009 19:27:45 -0000

Right, so you are telling me that with all of Carioca's investments since 2004 he would have returned nearly as much as real estate? We are talking leverage by using a likely 20% down payment here and potentially pocketing 300% his initial investment (down payment) if he were to buy property in 2004. Depending on where in the city, the returns could have potentially be more.

Don't kid yourself...call a spade a spade and move on. In many respects Carioca avoided a lot of the risks by staying in his safety investments. Nothing wrong with that. But to say that in 20/20 hindsight his bonds did better with a piddly return (without leverage) compared to if he were to buy real estate in 2004...comon, that is just extreme denial.

Now, if you compare real estate PRESENTLY vs. bonds.... the jury is out. Perhaps Carioca's investments are better than real estate PRESENTLY... especially since they are foreign and not USD based. I've always said this may be the case. But do you know how many "renters" out there do NOT have the discipline Carioca may have? Perhaps they have yet to experience their first bankruptcy filing and do not understand saving/investing for a rainy day.

Rent vs. buy is a good argument with no concrete answer. All I know is that BUY wins out for those renters who rent and then blow the rest of their money away instead of investing into something tangible to their name.

Re: Deja Vu all over again

Carioca Canuck — Sun, 11 Oct 2009 14:32:49 -0000

It is not too bad at all.

The wife and I have saved a ton of money (bascially the rent/buy difference) which I have oft commented on here on this blog and others. A figure roughly equivalent to that which would have been equal to the accumulated equity had we bought a house.

But.......

It will not cost us 7/3% to take some money out.

It will not cost us an appraisal, mortgage fees and/or bank fees to get it out.

It generates cash flow 10% annually with a 13% yeild at maturity.

I can move wherever I want, when I want, without the financial risk of home ownership.

I don't need to call someone in the middle of the night and pay $500 when my sewer backs up.

Etc........

I agree that heavily indebted consumer and commodity based economies will do best when things turn around. But for things to turn around people have to start working again.....that is the primary and most important US and Canadian problem hindering recovery.....there are no jobs nor is there a desire to create them amongst government and employers.

Re: Deja Vu all over again

jsan33 — Sun, 11 Oct 2009 13:25:40 -0000

Gerald Celente is absolutely sticking to his prediction, this mess is going to end very badly in the next couple of years.

Celente - People Should Brace For 'Greatest Depression' 2012 Forecast - Food Riots, Ghost Malls, Mob Rule, Terror

Re: Deja Vu all over again

squidly33 — Sun, 11 Oct 2009 11:56:36 -0000

worldclass i doubt that cariocas has a single doubt
he like me has seen the madness and prefers cash
your belief that canada is different is flawed

dont beware zoocasa beware google
the wolf thats in sheeps clothing

Re: Deja Vu all over again

squidly33 — Sun, 11 Oct 2009 11:55:06 -0000

worldclass i doubt that carioca has a single regret
he like me has seen the madness and prefers cash
your belief that canada is different is flawed

dont beware zoocasa beware google
the wolf thats hiding in sheeps clothing

http://www.zillow.com/homes...
zillow or google same beast that will slay the REIC for the benifit of us all..minus the parasites

Re: Deja Vu all over again

worldclass — Sun, 11 Oct 2009 11:43:07 -0000

Century 21 vs. Zoocasa is ridiculous. Let information flow freely and the market decide what prices should be. Realtors have had too much control over the information too long, with only a few of them willing to share some of it as a "gesture".

Carioca... it is too bad you did not capitalize on that mortgage approval and buy a home back in 2004. But hindsight is 20/20 I guess.

A few latest articles supporting why a commodity based economy like Canada's will emerge from this recession better than our southern neighbors:

http://www.calgaryherald.co...

http://www.bloomberg.com/ap...

some propaganda:

http://www.calgaryherald.co...

Re: Deja Vu all over again

Carioca Canuck — Sat, 10 Oct 2009 20:32:57 -0000

Mr. Happy.....

I know all that......you could have saved yourself the typing. Used to be banker, remember ?

7.5% - 10% is the quoted rate from the place that keeps filling my mailbox up. No fees except for appraisal and legal, is what they say on their flier, and the Fair Trading Act covers you if they lied. All you need is equity. Maybe we should set that to the Beatles tune.

"All you need is equity.....dah, dah, dah, da da"

FWIW the wife and I were approved for $175K back in 2004 (6 years post BK for me) at the banks base rate +2% with $50K down........but we didn't buy anything.

I'd imagine that it is a good investment, being a hard money lender, if you know the ropes.......and your property.

Interesting thing is, I've seen more than a few first mortgages for sale in the G+M, as well as other places as of late.....40-50 % LTV ratios too with 7-10% stated rates.....guy probably figures it is better to take haircut and find a sucker than foreclose ina saleproof property.

Bearclaw.....

Let me know if you can make it.......you have my e-mail.

-------------------------------------------

"Century 21’s chief executive Don Lawby says he wants to ensure Zoocasa does not have an unfair competitive advantage."

You mean like the monopoly that is the MLS ??? This has to be the bullshit quote on the year from the REIC.

Re: Deja Vu all over again

realstinkyagent — Sat, 10 Oct 2009 18:55:44 -0000

BearClaw:
even though your are becoming more bias now on the bullish side but I'm glad you are still here and posting.

Re: Deja Vu all over again

Mr Happy — Sat, 10 Oct 2009 16:57:48 -0000

5 % is a extremely low rate for a State with a piss poor credit rating. California was downgraded to a BBB credit rating, that's only 2 levels above junk bond status. So even though they increased thier bond yield they are still selling bonds at yeild rate that is a big discount to their credit rating. Those bonds should be paying 8% to 10% yields; with their credit rating, but they're only at 5%. I guess everyone who bought these must think they're a good deal.

http://en.wikipedia.org/wik...

http://www.bloomberg.com/ap...

Re: Deja Vu all over again

Name — Sat, 10 Oct 2009 15:53:51 -0000

As much as I would like to see Canada's real estate cartel broken up, I's bet Rogers entering the mix would only compound the problem.

Re: Deja Vu all over again

vanman11 — Sat, 10 Oct 2009 15:42:57 -0000

Cities, states/provinces, countries are all issuing debts that are competing with each other driving up the yield (interest rate of return on them).

California for example.

http://www.marketwatch.com/...

Alberta did it recently as well and offered a higher rate of return than government of Canada bonds.

Mortgage rates compete with Bonds. As bond yields go up...mortgage rates go up.

it is inevitable.....with all these governments issuing bonds.

Re: Deja Vu all over again

squidly33 — Sat, 10 Oct 2009 11:59:03 -0000

Friday, October 9, 2009
CREA: "Housing Boom Not Sustainable"...

Existing home sales in Canada have rebounded sharply in the past few months, but Canadian Real Estate Association chief economist Gregory Klump doesn’t see the surge lasting much longer.

“The big jump we’ve seen is housing activity in recent months is not sustainable, in fact it’s already shown signs it’s leveled out,” Klump said during a video interview with Reed Construction Data at the CanaData Construction Industry Forecasts Conference
http://blog.buzzbuzzhome.co...

Re: Deja Vu all over again

squidly33 — Sat, 10 Oct 2009 11:55:50 -0000

Friday, October 9, 2009
CREA: "Housing Boom Not Sustainable"...

Existing home sales in Canada have rebounded sharply in the past few months, but Canadian Real Estate Association chief economist Gregory Klump doesn’t see the surge lasting much longer.

Re: Deja Vu all over again

squidly33 — Sat, 10 Oct 2009 11:49:46 -0000

the death of the realtor dominated and manipulated mls is near

The Financial Post has learned Century 21 Canada is suing Zoocasa Inc., which officially launched last month, for “scraping” information from sites provided by Century 21 brokers and representatives. Sources indicate privately controlled Zoocasa is nearly 100% owned by Rogers.

The move by Rogers, the largest telecommunications company in the country, into the real estate sector could have major repercussions and Century 21’s chief executive Don Lawby says he wants to ensure Zoocasa does not have an unfair competitive advantage.
The Financial Post has learned Century 21 Canada is suing Zoocasa Inc., which officially launched last month, for “scraping” information from sites provided by Century 21 brokers and representatives. Sources indicate privately controlled Zoocasa is nearly 100% owned by Rogers.

Re: Deja Vu all over again

BearClaw — Sat, 10 Oct 2009 11:03:17 -0000

I'm insane enough to think that Alberta has less than 16% unemployment and the vast majority of people buying houses have jobs. The price drops in 2010 will be moderate. OMG! Crazy train!

I don't expect to win any popularity contests here being a totally deranged and bias homeowner.

I think this blog needs some villains. ;-)

Re: Deja Vu all over again

Blogger — Sat, 10 Oct 2009 10:31:37 -0000

"If a person declared bankrupcy"

Hey Carioca, even you can go buy a house now!