Author Topic: Garth Turner - Real Estate in Canada  (Read 335204 times)

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #10 on: February 29, 2012, 12:23:07 PM »
"Owning a house is not seen as something you achieve (by saving a lot and then waiting for the right bargain), it's seen as something you have a right to (price doesn't matter, it'll go up anyways!). That's dangerous."

If you mention the idea of "saving up" to buy something, people tend look at you as if you were out of touch with reality. The idea today is that you use other people's money so that you can get what you want - now - and worry about paying for it later. That is when the problem comes in - later. Eventually later comes around. Then, when they find themselves in deep it's everyone else's fault, the bank, the government, the credit card companies, etc.

Here is another scary scenario. I have had people actually say to me, "We doing pretty good, we are making the minimum payments on all our cards and we still have enough credit to buy that new ....... we want.

First off, I cannot believe people think of their credit capacity as an asset rather than a pending debt.
Secondly, I received this month's Visa bill. Hidden on the last page (and required now by law), is the statement "if you only make the minimum payment it will take you 37 years to pay the amount owing".   And my Visa bill was for only $1,770.
 


SharperDingaan

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Re: Garth Turner - Real Estate in Canada
« Reply #11 on: February 29, 2012, 12:34:32 PM »
You cannot prevent people from hurting themselves, it is their choice. 

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #12 on: February 29, 2012, 01:10:02 PM »
You cannot prevent people from hurting themselves, it is their choice.

Indeed, but you can sure make it easier or harder to do so. (ie. remove all seatbelts from all cars)
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Hester

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Re: Garth Turner - Real Estate in Canada
« Reply #13 on: February 29, 2012, 01:14:35 PM »
So what do we short, guys. What securities are going to get killed when Canadian RE prices fall.

Probably not the banks. Damn CMHC...

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #14 on: February 29, 2012, 02:52:20 PM »
Speaking of CMHC, does anyone have any idea of total potential liability that CMHC and the Canadian taxpayer has if a meltdown occurred in housing prices?

EdWatchesBoxing

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Re: Garth Turner - Real Estate in Canada
« Reply #15 on: February 29, 2012, 02:56:41 PM »
It's awful to see people voluntarily harm their financial health.
« Last Edit: February 29, 2012, 02:59:45 PM by EdWatchesBoxing »

Hester

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Re: Garth Turner - Real Estate in Canada
« Reply #16 on: February 29, 2012, 02:59:19 PM »
Speaking of CMHC, does anyone have any idea of total potential liability that CMHC and the Canadian taxpayer has if a meltdown occurred in housing prices?

I had the same thought a little while ago. Here's their 2010 annual report. http://www.cmhc.ca/ar-ra/2010/en/mda/

Of course a potential meltdown has to be modeled out by the investor.

Kiltacular

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Re: Garth Turner - Real Estate in Canada
« Reply #17 on: February 29, 2012, 04:31:07 PM »
Buffett in the just released shareholder letter:

Homeowners everywhere felt richer and rushed to “monetize” the increased value of their homes by refinancings. These massive cash infusions fueled a consumption binge throughout our economy. It all seemed great fun while it lasted. (A largely unnoted fact: Large numbers of people who have “lost” their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost. In these cases, the evicted homeowner was the winner, and the victim was the lender.)

Yet, the "scandal" is robosigning.  Comical.

It likely that the biggest "winners" in the Candaian version will also be those most irresponsible.  The key is that you have to be unimaginably irresponsible to win big.

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #18 on: February 29, 2012, 04:34:42 PM »
So what do we short, guys. What securities are going to get killed when Canadian RE prices fall.

Probably not the banks. Damn CMHC...

That's a good question. The way I'm playing my conviction is by being ready to continue renting for a few years. We'll try to be really patient because if (when) it happens, it could take a while to reach bottom line in the US, and it won't bounce back quickly, so no need to hurry up. Would suck to be right about this but buy way above the bottom...

But as for shorting stocks, I'd look at companies that are heavily leveraged and closely tied to construction in Vancouver or Toronto. No idea what the best company to short would be, though.
« Last Edit: February 29, 2012, 04:50:10 PM by Liberty »
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Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #19 on: February 29, 2012, 04:36:53 PM »
Buffett in the just released shareholder letter:

Homeowners everywhere felt richer and rushed to “monetize” the increased value of their homes by refinancings. These massive cash infusions fueled a consumption binge throughout our economy. It all seemed great fun while it lasted. (A largely unnoted fact: Large numbers of people who have “lost” their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost. In these cases, the evicted homeowner was the winner, and the victim was the lender.)

Yet, the "scandal" is robosigning.  Comical.

It likely that the biggest "winners" in the Candaian version will also be those most irresponsible.  The key is that you have to be unimaginably irresponsible to win big.

I think this was a better deal in most US states because the creditor of the mortgage can't go after you personally. The way I understand it, in Canada they can. Unless they spend all that HELOC money on intangibles, they'll get repossessed.
"Most haystacks don't even have a needle." |  I'm on Twitter  | Watch this, please