A shift in mainstream sentiment is underway in Canada right now. In Victoria and Vancouver, the most delirious of Canada's real estate markets, people are starting to realize that, in fact, human nature isn't all that different, no matter what side of our southern border one happens to be on.
Some wonderful articles this week that both illustrate this -- and make me wish I had put in a larger order for my “I told you so” t-shirt series -- can be witnessed below:
Alexandre Pestov has also made another excellent update to his original paper on the housing situation: http://www.scribd.com/doc/38509625/The-Elusive-Canadian-Housing-Bubble-Fall-2010-Musings
After a decade of unprecedented credit expansion, culminating in the lowest interest rates of all time and no need for a down payment to obtain 35 year financing (in fact, you can get PAID!), the party is now over. As the herd mentality takes hold and spreads from west to east, the difference between money and credit will show its head once again, and those who hold the former will find themselves in a very pleasant position.
I don't want to talk real estate much further; first, because so many others listed on the right hand side of this blog do a better job than I can, and second, because I find it bothersome. Thanks to the knowledge I've gained from the Austrian School of Economics, I generally find it more frustrating to know exactly what's going to happen and then watch it play out, than interesting.
My wife and I have never understood the obsession the majority of our peers have with open houses and HGTV 'house porn', as Garth Turner calls it. To us, if a portion of our portfolio dividends can cover our entire rent and utilities, while simultaneously eliminating the risk of being trapped in an immobile, illiquid, depreciating asset as jobs migrate elsewhere, great! Don't get me wrong, there will be a time to own real estate in Canada again -- much like 1992-2004 -- but that will be sometime between now and 2015, depending on how quickly the herd of buffalo impacts the cliff bottom.
In other fun news this week, world-renowned environmental scientist James Cameron was up in northern Alberta, advising the locals on the benefits of filling the world's energy needs with campfire Kumbaya instead of synthetic crude oil. While I highly doubt the people of this country are truly that stupid, I have increased my supply of ammo and canned goods accordingly, as any good hedge fund manager would.
In addition, I signed up for Netflix earlier this week. Now, there are some complaints about some of the content, and they are probably warranted, but I have found it to be a wonderful replacement for the horrendously expensive waste that cable television is. I just need to find a way to get hockey...
Honestly, for a monthly cost less than one McDonald's meal, Netflix is a pretty good deal. Best to get on board soon, though, I imagine the gods over at Canada's OPEC of telecommunications aren't too happy, and will find a way to rape us the way we deserve. Much like Rogers is doing to Wind Mobile (another favorite company of mine)
See, when the government grants you an oligopoly over an entire industry, and then years later allows small competitors to gain some foothold in the name of 'competition', you can simply subsidize a money-losing subsidiary to destroy the competition. All you have to do is outlast the funds of the competitor, which is easy when the majority of the country is surgically attached to your 3-year-contract teat.
Look at that, I just got home from Wal-Mart prior to spewing this onto the page and I didn't even mention it until the very end!
I was wondering when Wal-Mart would show up...
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