People Got Overzealous And There Was No Discipline
The Vancouver Sun reports from Canada. “Housing in Vancouver is becoming dangerously unaffordable. That was among the findings of an RBC report released Monday, the same day Vancouver city councillor Geoff Meggs offered a reality check to homeowners in the country’s hottest real estate market. ‘Let’s be honest — for a long time we really enjoyed that ride. There wasn’t a lot of people complaining about the escalation of single-family home values until relatively recently. That love of speculative gains from land is something that’s part of — I think — our province’s DNA and it’s not good for us. We’re finally hitting the point where we see that it has very negative consequences for the majority of the population,’ Meggs said.”
The Financial Post. “The mortgage broker industry has been facing increased scrutiny since lender Home Capital announced last year it had severed ties with 45 brokers over allegations they had falsified income information. The total value of outstanding loans generated by the brokers in question was $1.72 billion as of Sept. 30. Industry insiders say tightened lending rules and the rise of self-employment have made it tougher for some borrowers to qualify for a mortgage. Meanwhile, competition among brokers has become stiffer as their ranks have expanded.”
“Combined, these factors can make it tempting for brokers, who are paid via commission, to falsify information or use high-pressure sales tactics in order to make sure the deal goes through, observers say. ‘You get big paydays when you close the deal,’ says Cam McCaw, a professor and fraud specialist at Toronto’s Seneca College.”
From CBC News. “A commodity crash which threatens to burst Edmonton’s housing bubble has become cause for caution, for both buyers and sellers, in the local real estate market. Prices in all categories saw a decline in the Edmonton CMA market as many lower priced properties sold in January. ‘Sales volumes are down, relative to the same time last year,’ Realtors Association of Edmonton Chair Steve Sedgwick said in a statement. ‘It is likely that home buyers are responding to current economic uncertainties.’”
The Record. “The oversupply of student housing in this city is far worse than previously thought, says an expert who tracks the investment real estate market. One of the new student apartment buildings in the university town already is in power of sale proceedings, said Karl Innanen, managing director of the Waterloo Region office of Colliers International. Currently, there is an oversupply of nearly 1,200 beds, but when new developments that are in the works are included, the surplus increases to 8,321 beds, Innanen said.”
“The Waterloo skyline is dotted with construction cranes for student apartment buildings. When those buildings are completed, the supply of beds will overshoot the market by 20 per cent, said Innanen. ‘I think the student market was overbuilt because people got overzealous and there was no discipline,’ he said in an interview. ‘Unfortunately, it was a rampant supply of brand new, nice buildings.’”
The Winnepeg Free Press. “A drop in prices made owning a condominium more affordable in Winnipeg in the final quarter of 2015, according to a Royal Bank report. ‘Plentiful availability of newly-built condo apartments continues to be the main thorn on the market’s side, with an unsold inventory amounting to 25 per cent of all apartment units completed in the past 12 months at the end of 2015,’ the report said. ‘Such elevated supply contributed to some price declines in the condo apartment segment.’”
The Globe and Mail. “Calgary resale home prices fell for the fifth straight month in February, as sales of detached homes and condos plunged to the lowest level in more than a decade. Calgary’s condo market has borne the brunt of the economic fallout from falling oil prices and layoffs in the energy sector. Condo sales plunged by an annualized 22 per cent last month, even as new listings rose by more than 7 per cent. The benchmark price for a condominium fell 5.35 per cent from a year earlier to $283,600, compared to a drop of 3.19 per cent for detached houses.”
“‘The last time Calgary’s February real estate market was slower than now, we were watching the first season of Friends,’ wrote real estate agent Mike Fotiou, pointing out that by mid-month, home sales had reached their lowest point since 1995.”
Canadian Mortgage Trends. “In mid-2014 crude began one of its most precipitous declines on record, a plunge that has put oil-town Fort McMurray, Alberta, on the brink of depression. Fast forward to 2016 and job losses are mounting. That’s led to anxious selling and headlines proclaiming how Fort McMurray homes have lost one-fifth of their value. As for Canadian banks, they’re slowly starting to see the effects on their bottom lines. As early as last quarter, during Bank of Montreal’s quarterly conference call, Chief Risk Officer Surjit Rajpal was asked why the bank wasn’t seeing more signs of trouble in household credit given the unfolding economic situation in Alberta.”
“Fast forward to this week’s first-quarter earnings reports and the figures have taken a notable turn south. ‘We did see delinquencies move up this quarter from historical lows in our residential mortgage portfolio in Alberta,’ said RBC’s David McKay, who adds that RBC is ‘proactively working with these clients.’”
“One of the most concerning alarm bells is Alberta’s surging unemployment rate, a historical precursor to defaults. Now above the national average at 7.4%, it was just 4.7% two years ago. To get a better on-the-ground assessment, we reached out to longtime Alberta appraiser Robert Denis, president at Chalifour Denis & Associates in Fort McMurray. ‘The larger, higher-priced homes have taken a bigger decrease in value than some of the smaller more affordable ones,’ said Denis. ‘You have some properties that may have dropped 8-10%, and some of your revenue properties have decreased in excess of 20%.’ Appraisals have been come coming in under some clients’ expectations, he suggested. For those who aren’t following the market conditions, ‘the cut has been a little deeper than [expected].’”
“Boris Bozic, founder and CEO of Merix Financial, one of Canada’s top non-bank mortgage lenders, says the deals being affected the most right now are refinances. ‘We have a higher decline ratio in that bucket of business on refinances, and I can say what’s really driving that is quite simply appraised values. There’s no getting around that because value is value, period.’”
“He notes that refi applications are being scrutinized more than purchases or transfers because they involve someone taking equity out of their home. His advice for brokers who may be submitting a refi in Fort Mac: ‘I would say to brokers more than anything else, be very, very comfortable with the values that you’re sending in.’”
“Combined, these factors can make it tempting for brokers, who are paid via commission, to falsify information or use high-pressure sales tactics in order to make sure the deal goes through, observers say. ‘You get big paydays when you close the deal,’ says Cam McCaw, a professor and fraud specialist at Toronto’s Seneca College.”
You get big paydays when you close the deal and you get no payday at all if the deal falls through.
The incentive is to cheat.
‘for a long time we really enjoyed that ride. There wasn’t a lot of people complaining about the escalation of single-family home values until relatively recently. That love of speculative gains from land is something that’s part of — I think — our province’s DNA’
You know, it really is a mania. Look at how he talks about it. Let me tell you something Geoff, it’s all going back where it came from. Every single Canadian peso.
These guys are going to make you rich Vancouver:
Death and Despair in China’s Rustbelt
‘But China’s stimulus-inspired building boom was running out. The country’s steel demand peaked in 2013. As the nation’s mills kept churning out metal, prices collapsed. Chinese steel now sells for about a third of the price at the 2008 peak. In January 2015, the head of the new cold-rolled plant Wu Yan, who had given a tour of the plant to reporters during its construction, was found dead in his office. The police said he committed suicide, according to an official in the company, who asked not to be named.’
‘In May, the dreaded announcement from management finally arrived: The payroll was too burdensome and the company would have to lay people off. In a dimly-lit little restaurant opposite the plant in November, the steelworker said he hadn’t been paid since August. He said he rejected the early retirement plan that Shougang management had offered him in April.’
‘By mid-January only one of the three major blast furnaces was still operating. At least one has to keep going in winter to heat thousands of workers’ homes in temperatures that can fall as low as -30 degrees Celsius (-22 Fahrenheit).’
‘When a power cut caused even that plant to temporarily stop, a post in a local online chatroom summed up the sense of hopelessness under the pseudonym Tonghua Melancholy: “Is our mill finally grinding to a halt?”
‘Another suggested: “Why don’t you just smuggle some iron ingots out in the darkness?”
‘Tonghua Melancholy replied: “Can’t be bothered. Stuff’s cheaper than cabbages these days.”
‘By mid-January only one of the three major blast furnaces was still operating. At least one has to keep going in winter to heat thousands of workers’ homes in temperatures that can fall as low as -30 degrees Celsius (-22 Fahrenheit).’
Now there’s an interesting statement. Apparently there is some sort of heat distribution system in place that connects the blast furnaces to the worker’s homes.
Beijing is heated in the winter this way, via centralized hot water distribution; though the hot water isn’t from a steel mill. Even the luxury hotels are heated this way and lack their own heating systems.
“The New York City steam system is a district heating system which takes steam produced by steam generating stations and carries it under the streets of Manhattan to heat, cool, or supply power to high rise buildings and businesses. Some New York businesses and facilities also use the steam for cleaning and disinfection.
“The New York Steam Company began providing service in lower Manhattan on March 3, 1882.[2] Today, Consolidated Edison operates the largest commercial steam system in the world…”
wikipedia
That’s actually pretty damn clever…. assuming you need to run the blast furnace.
‘Currently, there is an oversupply of nearly 1,200 beds, but when new developments that are in the works are included, the surplus increases to 8,321 beds, Innanen said. The Waterloo skyline is dotted with construction cranes for student apartment buildings. When those buildings are completed, the supply of beds will overshoot the market by 20 per cent, said Innanen.’
You would think this is straight forward. The school knows how many students they will enroll. The builders know. Oops!
For the Region of Waterloo:
“Post-secondary students number about 58,860 at Conestoga College Institute of Technology and Advanced Learning, University of Waterloo and Wilfrid Laurier University. An estimated 29,780 are temporary residents close to their campus, while their primary place of residence remains elsewhere, typically at the home of their parents.”
8000+ new beds and less than 30K students in housing? Canada census predicted 550K population in 2011 will grow to 750K by 2031. Are hosers that fertile? What’s the end game, an immigrant family in each room?
‘He notes that refi applications are being scrutinized more than purchases or transfers because they involve someone taking equity out of their home’
‘The last time Calgary’s February real estate market was slower than now, we were watching the first season of Friends,’ wrote real estate agent Mike Fotiou’
‘In the game of survival, oil drillers have cut capital spending in half this year, but they have also created a gusher of new stock offerings in an effort to protect their balance sheets.’
“They’re trying to position themselves for — the phrase is — ‘lower for longer,’” said Imperial Capital analyst Kim Pacanovsky. “Lower for longer is getting worse than we thought it was. Most companies are thinking, not so much about a recovery to the $70 range, but oil for lower for a long amount of time. They would be reticent to take on debt, but if they have been able to tap the market for equity, that’s what they’re doing. … It gives them a cushion. It gives them liquidity without taking on additional debt, and just staying power.”
“It’s survival basically. They are in survival mode. They are basically throwing everything overboard. The only thing they’re keeping is the ship. These companies want to survive. They’re using everything in the book. They are basically buying a new lease on life. It’s not what is good, it’s the least bad options,” said Fadel Gheit, senior energy analyst at Oppenheimer. Companies have slashed dividends, and Gheit said they are now issuing more stock, after abandoning share repurchase programs as crude prices kept falling.’
‘Drillers had been active in the debt market, but in the high-yield arena, where the bonds of many are trading at distressed levels, issuance has come to a standstill. According to Informa Global Markets, there was already about $350 million in new energy issuance at this time last year, compared with zero for oil companies this year. In the spring, when oil prices moved above $50 per barrel, there was a surge in activity, and 2015’s high yield issuance totaled $17.95 billion.’
‘The investment grade market remains open to issuers, and this week Exxon Mobil issued $12 billion in bonds, the bulk of this year’s $20 billion in energy issuance.’
‘Exxon Mobil Corp , the world’s largest publicly traded oil company, said on Wednesday its output would rise slowly through 2017 as it continues cutting costs. It also said it is on track to start up 10 new oil and gas projects through the end of next year, adding 450,000 barrels of oil equivalent per day to its production capacity.’
According to Informa Global Markets, there was already about $350 million in new energy issuance at this time last year, compared with zero for oil companies this year.
That’s the sound of the money-spigot getting turned off… And then we get to see which companies are ponzi (burning investment capital for working capital) and which are not (generating revenues that supply working capital).
‘The energy business in the U.S. is about to travel 150 years back in time. “While there is no consistent series for drilling activity before 1948, we think it likely that to find a lower level of activity would require going back to the 1860s, the early part of the Pennsylvania oil boom,” Hornsell said in a research note today.’
‘The Pennsylvania oil rush began in 1859, when Colonel Edwin Drake struck rock oil near the town of Titusville in the western part of the state. Industrialist Andrew Carnegie visited the area in the early 1860s and was inspired by the frantic activity he found there.’
“Everybody was in high glee; fortunes were supposedly within reach; everything was booming,” Carnegie wrote in his autobiography. “On the tops of the derricks floated flags on which strange mottoes were displayed. I remember looking down toward the river and seeing two men working their treadles boring for oil upon the banks of the stream, and inscribed upon their flag was ‘Hell or China.’”
November 30, 2007
It’s Friday desk clearing time for this blogger. “John Davidson re-located to Horry County, South Carolina, a few years ago. ‘We were real excited about the way the area was growing, no way it was going to slow down…how could it possibly slow down?’ Davidson said. ‘It’s amazing how quickly it turned.’”
“‘What’s happened is the people who bought on the high end can’t afford to lower their homes that much because they paid a lot for them,’ said Tom Maeser, a local real estate market analyst. ‘The buyers are sitting here, knowing there’s a lot of inventory, saying, ‘I want the best deal.’”
“Davidson’s had his house on the market since April and now has to sell it just so he can keep his condo. ‘We’ve had a steady flow of people coming through, but the consistent remarks are: love the house, but it’s priced a little too high, and they’re going to wait and see what happens,’ Davidson said.”
“‘There’s only one reason a home doesn’t sell, and that’s price,’ said Maeser, who has been a real estate agent for 15 years. ‘Sellers are going to have to get the 2007 mentality instead of 2005.’”
“Economist Jerry Johnson broke the bad news as home builders and bankers dined on scrambled eggs, hash browns and bacon at the Oregon Convention Center. ‘2008 is going to be a tough year,’ he said.”
“Speaking on housing prices, economist John Mitchell said: ‘There will be increasing affordability. That’s a polite way of saying price declines.’”
“As for a rebound, ‘It’s going to be 2009,’ Mitchell said. ‘You’ve got a lot of inventory to work through.’ So what does this mean for real estate jobs? Mitchell told one story: ‘My daughter’s Realtor is becoming a phlebotomist.’”
“From South Memphis to Southwind, Memphis is losing value. ‘Right now, Memphis is down about as far as I can remember in 30 years,’ auctioneer John Roebuck said.”
“Treasurer’s offices all over the country are bracing for the day when lenders stop paying the taxes on many properties in the worst hit neighborhoods. Many houses in Cleveland’s central city neighborhoods have been so damaged by looting, fires and weather that they are almost total losses. The lenders will eventually walk away from them.”
“‘The lenders will come to us and say, ‘We just can’t hold the properties any longer. We don’t want to pay the demolition costs. Here’s the property,’ said Jim Rokakis, Treasurer of Cuyahoga County, which includes Cleveland.”
“Zoe Cruz, co-president of Morgan Stanley and Wall Street’s highest-paid female executive, was ousted three weeks after the firm disclosed $3.7 billion of losses on mortgage-related securities at the division she oversaw.”
“‘I’m surprised, she’s been a big disciple of John Mack,’ said Douglas Ciocca, who helps manage $1.6 billion, including Morgan Stanley stock. ‘It may well be to satisfy the public’s need for scapegoats.’”
“The Singapore Housing and Development Board is building up the supply of new flats by 10,362 units to meet rising demand. Separately, the HDB plans to build another 6,000 units under its BTO system in the first half of next year. The total number of flats offered under BTO this year is 4,800 units, double that of last year.”
“The National Development minister urged buyers not to be too choosy when offered a new flat.”
“‘Be realistic about the chances of getting a flat. If you need a new flat, please take up the new flat even if it’s not something you like, even if it’s not ideal for you. Take it up and then gradually over time, you may upgrade to the flat that you like,’ said Mr Mah.”
“American Residential Group, a Tulsa real estate development and management company, is now in a ‘pre-marketing evaluation’ of changing the Tribune complex from apartments to condominiums….as a testing ground for a multimillion-dollar expansion.”
“Senior VP Steve Ganzkow said no one has attempted this type of effort since the late 1970s to early ‘80s. ‘We’re dealing here with an asset class in the real estate world that is pretty new and unique to this market,’ he said.”
“Ganzkow suggested prices could range from $175 to $200 per square foot. ‘There’s a lot of people who would say for that kind of money I would go get a house somewhere, and you probably can,’ he said. ‘But then you wouldn’t be downtown.’”
“The NAR and Lawrence Yun, its new chief propagandist — er, economist — continued to fiddle and insist that all was well. Take a look at this ridiculous and self-contradictory release, titled ‘Mixed Results for October Existing-Home Sales; Mortgages Improving.’ The NAR follows that front-line fib with what I can only characterize as a big, fat, stinking lie. The first line begins, ‘Single-family existing-home sales were stable in October.’”
“‘Mixed’ results? ‘Stable’ sales? There’s nothing mixed about a nearly 21% drop from October 2006. There’s nothing stable about a housing inventory that has jumped 15.4% year over year, so that the months’-supply number screamed upward by 46%.”
“House prices dropped by an average £65 a day this month, the fastest rate for 12 years. Further fuelling fears of a property slump, mortgage approvals in October also crashed to just 88,000.”
“It was the lowest figure since February 2005 and contrasted to a recent monthly average of 109,000. Nationwide’s chief economist Fionnuala Earley said: ‘This data confirms the market is cooling.’”
“The Council of Mortgage Lenders urged the Bank of England to ‘unblock the funding logjam.’”
“With Arizona ranked eighth in the nation in the number of foreclosures, some advice for people who fall behind on their mortgage payments. Number one, call your lender.”
“Banks don’t want you out on the street, says Chase Bank’s Tom Kelly. ‘What we want to do as mortgage servicers is to work with customers to try to keep them in their houses. We don’t really want to own houses. We would like people to pay us back.’”
“A lot has changed in the real estate market in the past year. Advice that brokers gave clients only a few months ago no longer applies.”
“As far as Johnny Matos is concerned, the prices haven’t come down enough. The Levittown native recently sold his home in Orlando, Fla., and moved back to Long Island. He and his wife are now renting a one-bedroom apartment in a Wantagh house.”
“For the time being, Matos says, he thinks it’s more economical to rent than to own. He is paying $850 a month but figures he would likely pay about $4,000 a month in mortgage payments, taxes and insurance if they bought a home.”
“Still, he expects to purchase a place in the next year because his wife wants to start a family. He says he’s hoping prices will drop more by then. ‘In the last year nothing has enticed me to buy,’ says Matos. ‘For me, it’s just waiting until somebody gets desperate.’”
http://thehousingbubbleblog.com/?p=3805
Keep posting flashback threads occasionally. It reminds me of old times, complete with memorable voices from back then — Neil, Olympiagal, exeter, aladinsane, and more. And also a retrospective on REIC spokespeople. 2007 was the beginning of the Lawrence Yun era, as David Lereah’s replacement. I didn’t see anything from Sean Snaith, who infamously came up with the metaphor of housing as a “soufflé.”
It does help with perspective. I found that because a spam-bot tried to post on it.
In another year or two those old posts, after changing the years, could be republished as current news.
Metro Denver prices getting crazy again…
http://www.denverpost.com/business/ci_29581852/inventory-homes-sale-hits-record-low-metro-denver
My wife and I are renting a house in NW Denver, and a little bungalow house in the neighborhood just got flipped with a remodel. It’s listed at $675k! I grew up here, and just can’t believe this madness is still continuing… Everyone around us is convinced these prices are legit and will continue to climb as new people flood the state. I really have no idea anymore… It’s the new California I guess.
Here’s the listing for the $675k house:
http://www.trulia.com/property/3227039669-3041-W-Clyde-Pl-Denver-CO-80211
“This spring is shaping up to replicate last year’s market with high buyer demand significantly outweighing supply, which will inevitably lead to bidding wars and higher prices,” said Anthony Rael, chairman of DMAR’s market trends committee. “Homes priced below $325,000 are in such high-demand that multiple offers well over list price will continue to be the norm until more listings come online.”
Hey Tony, there was a shortage in Winnipeg and Waterloo too, until there wasn’t. This is like asking a barber if I need a haircut. Oh Jingle, just who is putting up the money for these bidding wars and over asking offers?
Here’s the listing for the $675k house:
http://www.trulia.com/property/3227039669-3041-W-Clyde-Pl-Denver-CO-80211
I see the nabe has a hefty crime blotter. Does it have a good walk score too?
A 109 year old house with average elementary and below average middle and high school.
For $675K!
Yeah, not a bubble at all! Completely sane and reasonable!
I guess some people just really want to live near downtown.
At the lunch table some were beginning to admit that Denver is getting as expensive as the west coast and that it’s out of whack.
And for some strange reason, US News named Denver the “best city to live in”
And the market place knows it.
Denver, CO Housing Market Craters; Prices Nosedive 19% YoY
http://www.zillow.com/highland-denver-co/home-values/
Similar insanity in Ft. Collins, especially on properties close to downtown. Loveland and especially Greeley are now considered “bargains” by comparison.
Ahh,the sublime aroma of Greely!. A bargain at any price!
Most of the feedlots have been moved further eat, so Greeley isn’t as “pungent” as it used to be. But it hasn’t lost its cow town charm, nor its above average crime rate.
Denver is a joke. I had a meeting in Highlands Ranch this morning and got to drive through Littleton and back up 470 to the west side. Every infill development I pass (and there are alot of them) has me thinking that’s another 500-1000+ cars on the road.
I drove the 10 freeway from the high desert into Los Angeles a few weeks ago. Denver is turning into the Inland Empire, just an endless blob of soulless sprawl.
Move to Greeley
Lot’s of “soul” there, if by soul you mean big diesel pickup trucks.
Once again….
Why buy it when you can rent it for less than half the monthly cost?
built in 1907 ? Steel over rocks as a wall in the front it doesn’t rust ?
Denver is rather dry.
“He notes that refi applications are being scrutinized more than purchases or transfers because they involve someone taking equity out of their home.
Which makes zero sense, of course; the bank is just as much “at risk” for a purchase-loan as it is for a refi, if the appraisal value is too high.
Are the GSEs absorbing all the refis?
Huckabee: Trump Phenomenon is a ‘Peaceful Overthrow of the Government’
Paul Joseph Watson - March 2, 2016
‘Former Governor of Arkansas Mike Huckabee told Fox News this morning that Donald Trump’s success represents a peaceful “overthrow of the government” and that the Republican establishment should be glad it’s being achieved with “ballots not bullets”.
‘Huckabee, who has not officially endorsed Trump, told Fox & Friends that “people in Washington need to recognize the reason that Trump is winning is because they (his supporters) feel like people in Washington have helped them lose and they’re sick of it.”
“The donor class runs the political environment in this country and people are waking up to that and they are tired of it,” added the former presidential candidate.’
“That’s what this election is largely about, it’s an overthrow of the government….we ought to be glad that it is a peaceful revolution with ballots rather than one with bullets,” said Huckabee, adding that the Trump phenomenon was a “political revolution in the Republican Party and in the country.”
‘Huckabee accused the Republican establishment of “bed-wetting” over Trump by treating his voters as stupid while trying to select a presidential candidate rather than let the American people elect one.’
‘The former Governor said that Trump’s supporters were coming out in droves to support him because “they’re angry at the very establishment who is going nuts because Donald Trump is doing so well – and they don’t get it that they are the problem.”
I’ve been saying for a while it’s a phenomenon. All you had to do was watch how different things were. Remember when McCain thought all he had to do was put his thumb on Trump and that would end it all. Trump tells him sit down old man, and up he goes in the polls. He tells Bush, your brother let 9/11 happen. Up in the polls. He says NAFTA stinks, same outcome. He actually had the audacity to suggest illegal (note I said illegal) immigration must stop, and he wasn’t just lying like McCain did in 2012.
I want you to consider this; the other day someone posted Lindsey Graham saying the party was bat shit crazy. Now here’s a guy who was running for president. His big thing was he was going to bomb Iran on inaugural day! Not the second day in office, the very first. Let me get this straight; a country that isn’t a threat to us, and we’re going to bomb it on your first day in office? And now you have the freaking nerve to tell us who’s crazy?
Funny how so much of this started after the “crisis”.
‘Molotovs and Death Threats: Russian Debt Collectors Go Medieval’
‘Russians went on a borrowing spree as their economy recovered from the 2008 global financial crisis. Total consumer debt more than doubled, to 10.3 trillion rubles, last year from 2008.’
Russians are very serious people. Messing with them generally ends in blood and tears.
When the global yard sale kicks in, be prepared with..CASH!!
‘We did see delinquencies move up this quarter from historical lows in our residential mortgage portfolio in Alberta,’ said RBC’s David McKay, who adds that RBC is ‘proactively working with these clients.’
‘One of the most concerning alarm bells is Alberta’s surging unemployment rate, a historical precursor to defaults.’
No money coming in will do that. “We’ve never had so much house-hold debt” and then this happens. A lot of these Canadian media/REIC types seem like deer in the headlights about the foreclosure storm that’s coming.
‘That love of speculative gains from land is something that’s part of — I think — our province’s DNA’
Well who doesn’t like “speculative gains”? But the thing about gambling is you can lose. And with bubbles lots of people lose.
‘and it’s not good for us’
They have suddenly got a whiff of fear in Vancouver, I’m not sure why. This latest “alarm bells” report isn’t much different that dozens of reports before.
Ben
The oil sands industry has the ability to produce without losing money at about $30, some even less.
They also have a massive installed mechanical base that needs large scale continuous maintenance. This downturn is not the same as ones before.
Thanks to President O’Bama refusing Keystone they will be getting more secure pipeline access to Europe by Energy East - something that wins for all Canadians.
They have lost many jobs, and may lose more, but their industry is sound and has honest reasons for hope.
It appears the Chinaman is gone from Vancouver and Toronto. I would worry more about their economy than the Prairie Provinces.
But for those who have lost their jobs (a lot of maritimers) their future is uncertain. Until Energy East is finished there is no reason to build increased tar sand capacity until there is a pipeline able to handle the oil’s delivery.
I don’t know that much about the oil business and especially Canadian oil sands. But I am familiar with the economics of resource production, and I have been watching Canada a long time. We can see all the signs, all the denial that is common when things head down. Of course there’s going to be massive jingle mail. Jeebus, I’ve seen what people were paying for a double-wide trailer. I know they weren’t putting much of a down payment. Many of these reports also mention another bubble characteristic; casual splurging and thinking it’ll never end. Boy does that remind me of the 1980’s. Like last week, the guy standing mournfully looking at the snow-mobile that got repossessed. The garages full of toys, the giant trucks, probably bought on credit in some way or another. Refinancing in Fort McMurray, at this stage? The banks will be lucky if they don’t pour cement into the septic tank. I keep thinking about this:
‘That love of speculative gains from land is something that’s part of — I think — our province’s DNA’
This is very simply crazy talk, and he probably thinks he summed up some philosophical gem. Money doesn’t rain down on you for decades because of your DNA. One thing’s for sure; raining money just might stop.
Anyhoo, I hope the problems up there end soon and we can all get back to a real economy. Being realistic we have to acknowledge that this isn’t just oil. Oil is just one symptom.
I agree. “Spending as if it will always be the same”.
Their prices will continue to fall, but they do have a future because of the base load of jobs that have to be there to handle miles of equipment.
Without allowing the economy to correct itself (with lots of pain) - - - -
but they do have a future because of the base load of jobs that have to be there to handle miles of equipment.
And what happens if they happen to have built more housing than is required by the set of workers who will fill that “base load of jobs”?
I have spoken with people up there, they are abandoning their homes and cars and leaving. Shorting canadian banks might still be a play.
TX, NM, OK as well, not just the Balkan area.
Well who doesn’t like “speculative gains”?
Working is for losers and little people.
“Work is for suckers,
And the suckers is you.”
“Half-life” by Local H
Honolulu, HI Housing Market Implodes; Prices Crater 9% YoY On Evaporating Housing Demand
http://www.zillow.com/honolulu-hi/home-values/
2006 called…it wants it’s greed and corruption back.
The fact that Fox News still tries to tell us Reagan was a great president says it all… smoke and mirrors for the sheeple.
1. he tripled the deficit
2. sold weapons to Muslims illegally
3, gave amnesty to 3 mil illegals
4. raised taxes 11x
5. had very high unemployment at the end of his term
6. created the Taliban and Bin Laden
http://thinkprogress.org/politics/2011/02/05/142288/reagan-centennial/
The Moral Foundations of ThinkProgress, Alternet, Daily Kos, & the …
http://www.yourmorals.org/…/ - 64k - Cached - Similar pages
Nov 2, 2011