The economy

[nuprin001]

Thanks for your input. I have a very small mortgage on the house, so that is basically a non-issue. To address your first point....yes I am going to be moving in the next year or so. The way I look at it is like this....if the housing bubble bursts, the burst will be felt by everyone....thus if my house I sell is worth less, the house I buy will be worth less as well. One kinda negates the other...Short sighted? nah....realistic.

When you move, there are always a large number of variables that you have to take into consideration. Location of the new home, mortgage rates, schools, shopping, commute, etc., etc. When the housing market is in flux or down, the number of variables increases. A home doesn't stand by itself in the middle of nowhere. If you buy a great house in a crappy neighborhood, that's going to hurt you.

Curious, real estate is what I do for a living. I buy properties, rent them out, fix them up, sell them, etc. I'm telling you that if you have a blase attitude about the most expensive thing you will probably ever buy, you stand a decent chance of getting screwed on it. The equity you have in your home isn't just for changing homes: it affects your overall financial health. What your neighbors do directly affects the value of your home. The bubble bursting isn't going to be a 2 day event: it's a rolling event that will be felt for months and years. If it happens.

I'm not betting that it's going to happen, but I'm putting myself in a good financial position to take advantage of it. I'm keeping a cash-heavy position if things break the right/wrong way in Canada. I'm not sitting here, hoping people will be hurt, but if it happens I'd be a fool not to take advantage.

 

[nuprin001]

What the bankers infer, but dare not speak, is the spectre of a housing trough that sucks prices lower, then gets a lot worse three or four years out – pretty much what happened in the US. There the market started to wobble in 2005, fell about 15%, leveled off, then plunged again after 2009 by another 17%. Those early vultures who thought they were so smart buying after the initial crash ended up with unsalable houses which declined in value every month after the deals closed.

I don't like being called a vulture. But in the end, I don't give a damn. Unless a property is really, really incredible (I have some rentals that are turning a 20%+ capitalization rate that I jumped on), you don't jump on an investment right after the big drop. You don't do that with stocks, you don't do that with real estate. You wait for things to truly stabilize and show signs of improvement. If you're in the quick turnover business (day trading stocks, fix & flip houses), you obviously want the market to be going up when you sell. No way to really predict when that's going to happen except when it's actually happening, so if your "fix" people are quick enough, buying in when the market is returning is the way to go.

That said, there are real financial geniuses who can figure this stuff out ahead of time. Just don't confuse yourself by thinking you're one of them when you're not: that's a good way to go broke.

 

[nuprin001]

Weren't the banks and the asses in government saying how good our economy and banking system are about a month ago.
Any one with an iota of sense can see through their bullshit.

We are indeed about to get fist fucked up the ass with sandpaper and a crowbar.

The only out - the people must create economic reform as soon as possible. There is no shortage of money, there are lots of hogs, and theirs a meek wimpy public that is too chicken to demand a raise.

Oh, and lastly get rid of this crap endeavor we call a stock market, tradiing virtual garbage and imaginary everything.

You know that quote of Winston Churchill, about how democracy is the worst form of government except everything else we've tried?

Yeah. Insert capitalism for democracy on that one.

There are places that are run the way you're saying, NorthPole. They're invariably shitholes. That you think stocks and bonds are virtual garbage and imaginary shows how little you understand how money actually works. Demanding raises while not understanding inflationary pressures is how you get into Weimar Republic type trouble, where wheelbarrows full of cash can't buy you a loaf of bread.

Capitalism isn't a system so much as it's a realistic understanding about how human beings actually work.

 

[milehigh]

[QUOTEI really hate negative people
I was reading all the threads to reply when I saw this comment
REALLY???
May is generally slow was not a bad month
June also a slow month was super slow this year
July slow start but good by the end
August good but still not comparable to last year for me anyhow
Last year in the summer I would have an hour session look at my phone after the hour and I would have had 20 texts and 25 missed calls
This summer I would say that is reduced by 75 %
Albeit I have changed my hometown location but still visit my usual areas
Any thought 2012 disaster to be a financial one ???][/QUOTE]

Hey thanks Tori. I talked to the SP I saw yesterday and she said things are down for sure. She also stated there is a lot of cheap competition coming in. I personally would not look to the cheap competition, but I never really thought about whether that was a factor.

As far as my own biz stuff goes.... I learned when it is going good, as it is now, ride the wave. And adapt to what the market wants.

 

[Curious36]

When you move, there are always a large number of variables that you have to take into consideration. Location of the new home, mortgage rates, schools, shopping, commute, etc., etc. When the housing market is in flux or down, the number of variables increases. A home doesn't stand by itself in the middle of nowhere. If you buy a great house in a crappy neighborhood, that's going to hurt you.

Curious, real estate is what I do for a living. I buy properties, rent them out, fix them up, sell them, etc. I'm telling you that if you have a blase attitude about the most expensive thing you will probably ever buy, you stand a decent chance of getting screwed on it. The equity you have in your home isn't just for changing homes: it affects your overall financial health. What your neighbors do directly affects the value of your home. The bubble bursting isn't going to be a 2 day event: it's a rolling event that will be felt for months and years. If it happens.

I'm not betting that it's going to happen, but I'm putting myself in a good financial position to take advantage of it. I'm keeping a cash-heavy position if things break the right/wrong way in Canada. I'm not sitting here, hoping people will be hurt, but if it happens I'd be a fool not to take advantage.

OK...I am following you. I am also holding cash, despite the advice of my financial planner, for liquidity and stability. Money he "controls" is mostly tied up in resource based stock.....think I am ok there. Anyhow, back to housing....as mentioned I carry a very small mortage and need a place to live So what is your suggestion? I dont want to rent as this defeats the purpose of building capital in a primary residence and is essentially padding the pocket of another individual. Appreciate the feed-back.

 

[nuprin001]

OK...I am following you. I am also holding cash, despite the advice of my financial planner, for liquidity and stability. Money he "controls" is mostly tied up in resource based stock.....think I am ok there. Anyhow, back to housing....as mentioned I carry a very small mortage and need a place to live So what is your suggestion? I dont want to rent as this defeats the purpose of building capital in a primary residence and is essentially padding the pocket of another individual. Appreciate the feed-back.

Look for the same things you look any time you're buying a house, except be pickier. Be a lot more careful.

What you want to find is a neighborhood that's going to be good and stay good through the crisis. More older, established families and homeowners. I'm in my 30s, but the neighborhood I live in is mostly retired doctors, lawyers, and the like. They're not going to lose their homes unless a financial crisis gets really, really bad and they can't afford to pay the property taxes. Most of the homes around me are already paid off. That keeps my neighborhood in as good of shape as possible. The worst thing is to actually have a foreclosure in your neighborhood, because that will tank everybody's property values.

Don't be afraid of homeowner's associations (HOAs). Yeah, they're a pain in the butt busybodies, but that also means they keep the property values up.

If the real estate crisis is as bad as some are saying, you're still going to lose value. But a good neighborhood where the homeowners have good financials stays a good neighborhood.

 

[Curious36]

Look for the same things you look any time you're buying a house, except be pickier. Be a lot more careful.

What you want to find is a neighborhood that's going to be good and stay good through the crisis. More older, established families and homeowners. I'm in my 30s, but the neighborhood I live in is mostly retired doctors, lawyers, and the like. They're not going to lose their homes unless a financial crisis gets really, really bad and they can't afford to pay the property taxes. Most of the homes around me are already paid off. That keeps my neighborhood in as good of shape as possible. The worst thing is to actually have a foreclosure in your neighborhood, because that will tank everybody's property values.

Don't be afraid of homeowner's associations (HOAs). Yeah, they're a pain in the butt busybodies, but that also means they keep the property values up.

If the real estate crisis is as bad as some are saying, you're still going to lose value. But a good neighborhood where the homeowners have good financials stays a good neighborhood.

I'm in the same situation you are in. Older neighbourhood, full of retiries, most houses paid off. I am 40. I know the neighbourhood is a good one.....not too concerned about my financial situation. I DO care about the financial situation of others and understand that their will be a huge market adjustment in short order. Those that are "house rich" and "cash poor" are in for a stuggle.....

 

[homerjsimpson]

No country with a fiat money system has ever survived. No country such as the US or Canada can escape its debt when it's so far under. The end is coming, it's only a matter of time.

 

[FatOne]

No country with a fiat money system has ever survived.

Every country on earth uses a fiat money system and has for many many years. As they are still around they have survived.

Every single country on the gold standard is either off the gold standard, or long gone.

Not that this proves anything expect you are being a bit sloppy and weak in your argumentation.

 

[nuprin001]

Every country on earth uses a fiat money system and has for many many years. As they are still around they have survived.

Every single country on the gold standard is either off the gold standard, or long gone.

Not that this proves anything expect you are being a bit sloppy and weak in your argumentation.

You do understand that your positions are not mutually exclusive, right? That the only thing keeping both arguments being true, theoretically, is time?

I'm not saying a fiat money system is doomed to collapse necessarily, but it isn't as stable and does have issues that make it more vulnerable to collapse. I don't favor a return to a gold standard or anything silly like that, but I don't pooh-pooh the dangers of a floating currency, either.

 

[nuprin001]

This shows that your sense of the world isn't rooted in realism, but in fiction. I know how money works, for you to have underestimated that is a foolish assumption.
In case you haven't noticed the virtual deck of stocks and virtual 'junk' and our lunatic credit system also built on virtual junk, is in rapid decay.

Capitalism only works when money flows and the balance of I'm getting enough comp for my work" is in check.
Money isn't flowing, its being horded, people are not being equitably paid.
There is no shortage of money, or customers, there is a shortage of circulating money because of so many factors, largely due to meddling government and fat paycheck do nothing CXOs.

I can only surmise that you have no idea how humans work.

You were saying people just needed to demand a raise. That's idiotic. Canada's unemployment rate is north of 7%, and the US's is above 8%. And those are cooked numbers just to get them that low. Demanding a raise will just get you replaced by one of the people on unemployment.

"Rise up!" mentality is consistently a long term failure. Ask the French to stormed the Bastille (only to find 7 prisoners, all of whom probably belonged there), tore down their country, only to have a Reign of Terror and an Emperor replace their king.

Yes, stop the government from meddling. But you don't have a clue as to what kind of system you want to replace the corporations with, which historically leads to all the little people dying of starvation.

 

[FatOne]

You do understand that your positions are not mutually exclusive, right? That the only thing keeping both arguments being true, theoretically, is time?

I'm not saying a fiat money system is doomed to collapse necessarily, but it isn't as stable and does have issues that make it more vulnerable to collapse. I don't favor a return to a gold standard or anything silly like that, but I don't pooh-pooh the dangers of a floating currency, either.

I was pulling a Lois's meatloaf and being shallow and pedantic. Your original statement as stands needs a qualifier and with the qualifier of time turns from a statement of historical fact to an opinion which is in contradiction to your latest statement.

"No country with a fiat money system has ever survived." and "
I'm not saying a fiat money system is doomed to collapse necessarily," say two different and contradictory things.

I know where you are going with this, again being more pedantic, it is your wording more than your point I am taking issue with. I guess I am being annoying like one of those spelling and grammar Nazis. Even a fatty needs hobbies.



Sadly enough non fiat currencies are far from immune to ahem... adjustments. Ask the Romans. It took less time for their currency to turn to shit than the US has been a country Although paper is easier, I will agree with that claim.

 

[onthebottom]

I've been told repeatedly by Canadian's that your banking system is so well regulated you don't have to worry about banking issues... this causes me to laugh uncontrollably....

OTB

 

[onthebottom]

Are you laughing at the fact that the list of failed banks in the US continues to grow, almost daily??

http://www.fdic.gov/bank/individual/failed/banklist.html

No, there are something like 8,000 small banks in the US, the strong are eating the weak - as they should in this case.

I'm laughing at the notion that regulation will insulate the big banks in Canada from a bursted property bubble... That's funny stuff.

 

[WoodPeckr]

I'm laughing at the notion that regulation will insulate the big banks in Canada from a bursted property bubble... That's funny stuff.

I'll be laughing when you produce the 'fuzzy numbers' and BS charts you created to delude that will happen....

 

[mrsCALoki]

Seems simple to me, rich get richer, poor get poorer, middle class get to shrink in numbers.

 

[milehigh]

I get a real kick reading the letters my financial advisor sends to explain why something isn't doing as hot as it should be. They start blaming strange events in foreign countries that cause effect after effect after effect. The stories are so interesting. Like reading "Peter Rabbit."