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Cultural Imperial posted:TD economist Brian DePratto wrote in a research note that the Canadian economy should rebound towards modest growth in 2016, but that projection rests on rising demand for Canadian exports — and that growth in demand is currently nowhere to be found. Yeah poo poo should probably turn around midway through the next year or so. I mean I don't have anything to base that on at all but that's my qualified professional opinion as an economist employed by a huge bank. Cultural Imperial posted:https://www.realtor.ca/Residential/Single-Family/16280957/2750-E-1ST-AVENUE-Vancouver-British-Columbia-V5M1A7 Let's just rotate that pic to see the view in the other direction our non Vancouver readers:  In fairness it does at least have a tree hedge and wooden fence between the lawn and the road, but it's not going to do much to cut the noise and air pollution of being right off 1st. During rush hour the road is totally packed and slow. During off hours, most people will routinely drive 60-70 km/h on it. Just make sure your kids never leave the lawn if they want to play outside unsupervised. The Butcher fucked around with this message at 04:13 on Dec 28, 2015 |
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Dec 28, 2015 04:01
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El Scotch posted:I want to build a house on a flood plain, but have it raised on stilts. That way when the floods come I can sit on the deck of my dry house, drinking a beer and looking smug as gently caress. They do that in Galveston, among other places.
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Dec 28, 2015 08:48
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Enjoy your sewer line flooding?
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Dec 28, 2015 08:52
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There's a lot of doom being spoken of in this thread, but what happens if the bubble bursts exactly? Obviously unemployment is being a large issue in some provinces, but is all of a sudden property values going to drop and interest rates going to shot up or will we get hosed a little more gradually? I've always heard Manitoba didn't really inflate like the rest of Canada so are we less hosed to an extent?
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Dec 28, 2015 16:24
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PT6A posted:Wouldn't the extremely high labour costs have already motivated automation as much as possible? DariusLikewise posted:There's a lot of doom being spoken of in this thread, but what happens if the bubble bursts exactly? I dunno about Manitoba as a whole but the major city there looks to have gotten some pretty significant price appreciation during the run up according to this chart which pops up on a quick n' dirty google. That it may be less than some other "truly" bubbly area may not matter much really.  In the end if there is lots of other business in the area to take up the slack then it could be fine. If not then things will be as lovely as anywhere else. Maybe worse if there are some knock on effects from RE collapsing effecting the area's economy more so than others.
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Dec 28, 2015 17:09
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DariusLikewise posted:There's a lot of doom being spoken of in this thread, but what happens if the bubble bursts exactly? Obviously unemployment is being a large issue in some provinces, but is all of a sudden property values going to drop and interest rates going to shot up or will we get hosed a little more gradually? I've always heard Manitoba didn't really inflate like the rest of Canada so are we less hosed to an extent? You're pretty much going to see the same thing as the US did, because you're basically doing the same thing (hopefully with somewhat less subprime lending, so you wouldn't see as many bank implosions). At some point you're going to have a wave of people defaulting on their houses, likely a bunch of now-unemployed people out on the oil fields. The banks are now end up with a bunch of houses they need to offload, so they put them on the market possibly at a discount. This depresses housing prices as a whole, so now a bunch more people are underwater in their homes--that is, their mortgage is for more than the home is worth. This leads to further defaults until a bunch of bad credit is burnt and people are out of a house and a whole lot of money. This leads to a gigantic crunch in the construction industry--it was bigger than it probably ought to be because of the bubble, and now it's going into a market that's way worse than average--and the layoffs probably mean more people now unable to pay off a housing loan. The mass unemployment leads to a general economic malaise because spending is going to be down... which leads to more layoffs which means more defaults. There's diminishing returns, it's not going to just lead to everyone getting fired from everything, but things are going to be awfully poo poo for quite a while. The bubble popping really isn't going to be a gradual thing; it'll be pretty fast in economic terms. If what's said about Manitoba is true, you might be less hosed, but you're still going to have a pretty bad time. Have fun!
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Dec 28, 2015 17:33
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The biggest issue for Canada if the bubble pops is that the main thing currently driving the Canadian economy is consumer spending based on debt. There are three main possibilities in terms of economic drivers: investment by corporations, spending by governments, and spending by consumers. Right now, across Canada, corporations are not investing (and haven't been for years). They're either cutting back on operations or they're just sitting on all the money they're making (often in offshore tax havens)--look at the successive conservative finance ministers who were literally openly pleading with Canadian companies to spend some of their huge cash reserves, which of course they didn't do. The only growth industry in Canada was exporting oil and other natural resources, and that's clearly not happening anymore either. Simultaneously, across Canada government at all levels are passing austerity budgets and cutting back on spending, which has a deflationary effect on the economy rather than an inflationary one. We'll see whether this changes to a significant degree at the federal level since Trudeau campaigned on deficit spending, but the provinces spend most government money so it won't make as big a difference as you might think unless they change their tack significantly. That leaves consumer spending. And consumers don't actually have high wages to spend on things, and currently their spending power is being constrained further by the low Canadian dollar and our high degree of imported consumer goods (lack of domestic manufacturing). Which means most of Canada's consumer base is either cutting back spending or sustaining their current level of spending by taking on increasing levels of debt. And the biggest source of that debt is baby boomer home equity (HELOCs) with the collateral on their loans coming from the constantly increasing value of their houses and the record low interest rates they're currently getting on debt. None of these people want to be told that their lifestyles are unsustainable and they are the largest voting bloc in the country, so politicians of every level and political affiliation are constantly telling them that there is no bubble and there is no problem and they can continue doing what they're doing forever. When the bubble bursts, suddenly their HELOCs and mortgages will have much higher interest rates, constraining their ability to take on new debt or to sustain their current levels of debt, which will shrink their spending power and therefore reduce the only thing driving the Canadian economy. Simultaneously, their homes will lose a lot of value which means they can't take on as high levels of debt and they lose the ability to sell their homes to pay off their debts and downsize their lifestyles, either because their house value drops enough that it doesn't pay off their high debt levels or because they can't find a buyer, or both. The end result is that Canada sinks into a very bad and potentially very long recession, depending how much our governments are willing or able to step in and take up the slack. The biggest problem they and we will face in doing this is the lack of Canadian industries outside resource extraction. We don't really have major industries that could lead a recovery, which means we could end up mired in recession and then very slow economic growth for years.
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Dec 28, 2015 19:04
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Here's my non-trolling honest thought about 2016: Given the following facts: - Canada's economy is taking a poo poo because oil and all the industries supporting it are getting absolutely slaughtered by increased Saudi, Iraqi, Iranian production. Increased oil production is primarily perpetrated by the Saudis who wish to crush the fracking boom in the US. Unfortunately for the Saudis, fracking lead times are extremely short; that is, the time it takes to set up operation and 'tear-down' are short. This means that the Saudis will either enter economic malaise (and they already kinda are) and be forced to cut back oil production or they will be victorious and depress oil prices long enough that fracking will be suppressed for an extended amount of time. - Canada's economy is primarily being driven by construction and all the associated FIRE industries. Ontario and BC's economies are still growing because tons and tons of dwellings are being built. - Canadian manufacturing cannot compete with Mexican currency depreciation. 60 cent loonie? The peso laughs in ur face. - Canadian consumer spending is also driving the Canadian economy. People are buying furniture, appliances, home improvement bullshit and spending tons of debt (lol) on automobiles. I believe this spending is being driven by the false sense of wealth from skyrocketing housing prices in BC and Ontario. By the way, something insane like a third of Canada's economy is being supported by these two idiot provinces. - America's economy is recovering. The Federal Reserve has just increased overnight lending interest rates. Part of this is supported by low unemployment and the other part is the Fed doesn't want to repeat past mistakes in leaving interest rates too low for too long. In theory, a recovering US economy means that America will import more goods and services from its largest trading partner in the world, Canada. I have no idea what the gently caress is happening in China. I don't understand it and I think I have to congratulate those assholes for keeping their equity markets from nuking themselves. They succeeded. That said, I cling to my own simplistic theory that foreign investment has very little effect on the Canadian real estate market simply because Ontario's housing market is in lockstep bubble with BC's and they certainly don't have as many princeling children tooling around in exotic supercars. I think the Saudis are going to blink and cut back oil production. Alberta will probably bounce back a bit. I also think the Bank of Canada will reduce rates at least a couple more times which will spur an insane spring buying season. Trudeau Part 2 has said as much that the bubble must go on because the negative effects of a declining housing bubble will be devastating to household equity (lol). If you think Trudeau Part 2 isn't going to do anything and everything in his power to keep this conveyor belt of stupid rolling, you're out of your loving mind. He's a populist moron. At some point this garbage economy will have to stall out but it will probably take a very dramatic economic event, not unlike lehman monday to initiate it and I don't think it will happen in 2016.
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Dec 28, 2015 19:34
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Cultural Imperial posted:I think the Saudis are going to blink and cut back oil production. Alberta will probably bounce back a bit. I also think the Bank of Canada will reduce rates at least a couple more times which will spur an insane spring buying season. Trudeau Part 2 has said as much that the bubble must go on because the negative effects of a declining housing bubble will be devastating to household equity (lol). If you think Trudeau Part 2 isn't going to do anything and everything in his power to keep this conveyor belt of stupid rolling, you're out of your loving mind. He's a populist moron. I agree with basically your entire post except this bit. I don't think oil prices will go back up so soon for two reasons: first, Iran is also ramping up oil exports now that sanctions are being lifted, so even if the Saudis cut back somewhat there will still be an overall glut of production on the world market. Second is that I don't think the Saudi oil glut is entirely to crush the US fracking industry. This seems to be the common opinion of it at the moment but, as you say, fracking has short lead times and is also getting cheaper all the time. Combined with ramping up domestic US oil production from places like Alaska (lol Obama's commitment to climate chaaaaange) I don't think fracking will be destroyed by the Saudi boom. I honestly think a big part of it is a joint effort by the United States and Saudi Arabia to punish Russia for its actions in Ukraine and, now, Syria. Russia (and Venezuela) is probably the country worst affected by the oil crash, and they're burning through their foreign currency reserves at an insanely rapid rate. Once they run out of foreign currency to prop up their state, the Russian economy as we know it is essentially going to collapse and there will be enormous pressure placed on Putin to pull Russia out of its expensive foreign adventurism and support for regimes that can't survive on their own. It's important to remember that the very beginning of the oil crash coincided almost exactly with the imposition of severe sanctions on Russia, and I don't think for a second that that's a coincidence. I think what will happen is oil will remain low, the US will continue to support its domestic oil industry with subsidies and expanded drilling in places that don't require fracking, and we'll see what Russia does when they run out of currency reserves. In more Canadian news, I have no idea whether the bubble will pop or not but the ongoing economic malaise in places like Alberta means it's extremely unlikely that the BoC or Canadian governments will take action to deflate the bubble since there are no other economic drivers at the moment.
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Dec 28, 2015 19:55
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Holy poo poo, awesome, informative, thoughtful post by CI.
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Dec 28, 2015 20:29
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Cultural Imperial posted:- Canadian manufacturing cannot compete with Mexican currency depreciation. 60 cent loonie? The peso laughs in ur face. It's also important to note that Canada failed to make big manufacturing capital spending when the loonie situation was more favorable. So basically Canada can't compete with Mexico for either labor costs or amount of foreign capital investment. I hope with the energy industry crash it will finally be safe to let the Calgary bars stay open a bit later.
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Dec 28, 2015 21:00
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Saudi Arabia is increasing gas prices by up to 40%, reducing subsidies on water and electricity as well, increasing VAT and taxes on tobacco and soft drinks, making budget cuts, floating the idea of privatizations, and still predicting a 15% deficit next year. http://www.independent.co.uk/news/business/news/saudi-arabia-to-raise-petrol-prices-by-up-to-40-as-low-oil-price-hits-home-a6788496.html I predict oil prices to remain low for the foreseeable future.
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Dec 28, 2015 21:46
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vyelkin posted:popping of the bubble This is basically every developed economy propped up on QE.
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Dec 28, 2015 21:48
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Cultural Imperial posted:
Foreign investment absolutely has a significant impact on Canadian real-estate. Also oil is staying low. Some other good points though. vyelkin posted:
Yep if fracking is a component of their strategy it's not a major one, and there's lots of other reasons they'd like to keep oil low besides fracking.
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Dec 28, 2015 22:24
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We'll be lucky if the eventual crash is only as bad as what the Americans faced. Given that we don't have a large or dynamic enough economy for an internally driven recovery I think the better comparison might be a country like Spain, who also had to deal with a lot of foreign buyers helping to inflate a property bubble, and who is similarly dependent on economic and financial conditions in neighboring countries.
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Dec 28, 2015 22:56
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Helsing posted:We'll be lucky if the eventual crash is only as bad as what the Americans faced. Given that we don't have a large or dynamic enough economy for an internally driven recovery I think the better comparison might be a country like Spain, who also had to deal with a lot of foreign buyers helping to inflate a property bubble, and who is similarly dependent on economic and financial conditions in neighboring countries. How much of Canada is employed in FIRE and construction? 2013 Spain had something like 30% unemployment and over 50% for under 25s. Huge danger of a lost generation there and we're already seeing problems in Canada with the glut of unpaid internships and dearth of meaningful and well compensated entry level jobs.
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Dec 28, 2015 23:16
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vyelkin posted:Saudi Arabia is increasing gas prices by up to 40%, reducing subsidies on water and electricity as well, increasing VAT and taxes on tobacco and soft drinks, making budget cuts, floating the idea of privatizations, and still predicting a 15% deficit next year. Saudi Arabia is also being forced to issue more sovereign debt as a result of the oil price crash.
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Dec 28, 2015 23:31
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etalian posted:Saudi Arabia is also being forced to issue more sovereign debt as a result of the oil price crash. http://www.telegraph.co.uk/finance/economics/12071761/Saudi-riyal-in-danger-as-oil-war-escalates.html It's worse than that. If these fuckers aren't careful they're going to destabilize their own country never mind the US oil industry.
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Dec 28, 2015 23:38
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I'm all for Saudi Arabia getting hosed seeing their great role in the Middle East and also how they spent their oil money exporting Wahhabism around the world.
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Dec 28, 2015 23:42
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vyelkin posted:Second is that I don't think the Saudi oil glut is entirely to crush the US fracking industry. This seems to be the common opinion of it at the moment but, as you say, fracking has short lead times and is also getting cheaper all the time. Combined with ramping up domestic US oil production from places like Alaska (lol Obama's commitment to climate chaaaaange) I don't think fracking will be destroyed by the Saudi boom. I honestly think a big part of it is a joint effort by the United States and Saudi Arabia to punish Russia for its actions in Ukraine and, now, Syria. Russia (and Venezuela) is probably the country worst affected by the oil crash, and they're burning through their foreign currency reserves at an insanely rapid rate. Once they run out of foreign currency to prop up their state, the Russian economy as we know it is essentially going to collapse and there will be enormous pressure placed on Putin to pull Russia out of its expensive foreign adventurism and support for regimes that can't survive on their own. It's important to remember that the very beginning of the oil crash coincided almost exactly with the imposition of severe sanctions on Russia, and I don't think for a second that that's a coincidence.
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Dec 28, 2015 23:48
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Albino Squirrel posted:Forgive the derail in a Canadian debt thread, but what leverage does the US have over Saudi Arabia to get them to nuke their own economy? Yes, they've sold them tons of weaponry, but you'd have to think the Saudis currently have enough tanks and planes and guns to crush any feasible internal or external threat. The greater problem is that Saudi Arabia is big welfare state that provides heavy subsidies for everything from gas to the electric bill. With a currency crash and being unable to raise sovereign debt would make it harder to provide carrot type incentives to the mostly poor population.
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Dec 28, 2015 23:54
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Albino Squirrel posted:Forgive the derail in a Canadian debt thread, but what leverage does the US have over Saudi Arabia to get them to nuke their own economy? Yes, they've sold them tons of weaponry, but you'd have to think the Saudis currently have enough tanks and planes and guns to crush any feasible internal or external threat. Afaik a lot, though maybe not quite as much as when a Bush is in the WH. Another thing to keep in mind is that The House of Saud have their own cold war with Iran. They could easily be thinking that the damage they are doing to Iran outweighs their own internal damage.
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Dec 29, 2015 00:37
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etalian posted:I'm all for Saudi Arabia getting hosed seeing their great role in the Middle East and also how they spent their oil money exporting Wahhabism around the world.
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Dec 29, 2015 01:23
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ocrumsprug posted:Afaik a lot, though maybe not quite as much as when a Bush is in the WH. I suppose I should be somewhat thankful that Trump has hijacked the Republican political process. Before him, there were several Republican candidates who were openly advocating war with Iran as an election promise. It makes me wonder how much of their political elite is in open sway of foreign interests.
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Dec 29, 2015 01:55
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Oh yeah thank god we have Scott brison and bill morneau.
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Dec 29, 2015 02:09
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TROIKA CURES GREEK posted:Foreign investment absolutely has a significant impact on Canadian real-estate. Also oil is staying low. Some other good points though. Not really. You might be able to blame an $8 million house selling for $15 million on Chinese plutocrats, but there's no way in hell you can blame a $150,000 house selling for $350,000 on anything but dumb Canadians being allowed to borrow way more than their income would suggest, and doing exactly that.
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Dec 29, 2015 04:14
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But no you see, nevermind no one keeps stats on foreign capital inflows (because it's racist!), I have this feeling man
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Dec 29, 2015 04:38
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http://www.theglobeandmail.com/news..._medium=twitterquote:Remedial measures urged as B.C. property assessment jumps loom I don't even know what to say here. You own a loving million dollar house and you are bitching about $1000 extra/year in property taxes? gently caress you. My loving in-laws are these loving people
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Dec 29, 2015 04:44
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Why is there a provincial homeowner grant for homes under $1.1 million? Or, like, at all?
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Dec 29, 2015 04:47
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Dan Eaton everyone: https://www.linkedin.com/in/daniel-eaton-p-eng-mba-6ab620a #donthaveonethousand
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Dec 29, 2015 04:49
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Cultural Imperial posted:Dan Eaton everyone: http://www.sgurrenergy.com/ That is the stupidest company name I have seen in a long, long, looooooooong time. 
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Dec 29, 2015 04:52
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eXXon posted:Why is there a provincial homeowner grant for homes under $1.1 million? Or, like, at all? Baby boomers love owning houses. Baby boomers love voting. The BC Liberals love getting elected.
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Dec 29, 2015 05:01
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vyelkin posted:Baby boomers love owning houses. Is there a generation worse than the baby boomers in terms of loving up everything around them for generations to come?
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Dec 29, 2015 05:11
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millenials
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Dec 29, 2015 05:13
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Cultural Imperial posted:millenials Hey, I keep trying to rouse the proletariat revolution but everybody loves their Xbawks and Iphones too much to bring down the system maaaaaan. 
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Dec 29, 2015 05:18
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Not only that, but I think there is a way for boomers to "pay" for their property tax through equity in the home at effectively 0% interest. The current property tax shortfall is made up by non boomer owners and the future property tax liability is paid for by the buyers or inheritors of the property.
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Dec 29, 2015 05:19
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Cultural Imperial posted:millenials Would millenials be this bad if they hadnt been handed a poo poo sandwich by the boomers?
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Dec 29, 2015 05:54
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Cultural Imperial posted:Here's my non-trolling honest thought about 2016: You're a smart guy. I can see why you're miserable all the time. This info is very helpful, thanks.
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Dec 29, 2015 05:54
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Does anything even change when the value of your property goes up? If 1000 people live in a village where the average property value is $100,000 and they have to pay $1k in taxes every year, bringing in revenue of $1,000,000, if the average property price doubles to $200,000 then for the city to raise a million bucks every property still just has to pay $1000. edit: in case I just wrote the dumbest thing ever, it's late and I am sleepy
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Dec 29, 2015 05:56
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Playing devil's advocate: someone who bought their home 20-30 years ago when it was much more affordable might be substantially impacted by the increase in property taxes brought by skyrocketing home prices. If that person's on a fixed income, it's possible they might get priced out of their home despite carrying zero mortgage. This guy (edit: Dan Eaton) is not the best example of that phenomenon. Rime posted:http://www.sgurrenergy.com/
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Dec 29, 2015 05:58
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