tag:blogger.com,1999:blog-6931353.post5862226812660252150..comments2023-10-28T09:25:39.790-04:00Comments on The Atavist: Boom and BustThe Atavisthttp://www.blogger.com/profile/12529157597486952484noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6931353.post-62345663190002603042007-06-01T08:20:00.000-04:002007-06-01T08:20:00.000-04:00Galt: I have long thought that kids should learn ...Galt: I have long thought that kids should learn economic and fiscal basics in school. Not only do kids not have a clue about how the economy works but they also have no idea about how to manage their personal financial affairs. At avergae credit card interest of 24%, the real cost of carrying an average outstanding balance of $5,000 over a period of three years is $10,000. And that is in after-tax dollars, so you might have actually had to earn $12,000 or more to get the $10,000 to pay the $5,000 debt.The Atavisthttps://www.blogger.com/profile/12529157597486952484noreply@blogger.comtag:blogger.com,1999:blog-6931353.post-83711407000299174602007-06-01T08:11:00.000-04:002007-06-01T08:11:00.000-04:00Trooper: I have made a lot of money jumping in an...Trooper: I have made a lot of money jumping in and out of the real esate market. There is nothing wrong with that. The key is that when the market gets too frothy, it is time to step back and wait for a correction. When every young couple, every retiree, becomes a real estate speculator, it's time to get out.<BR/><BR/>Real estate, like every other investment, operates on the 'greater fool' theory: that there will always be another fool to buy from you, at a higher price than you have paid for the asset. When supply meets demand, all of the fools ahave been used up and the market will correct. It never pays to be the last fool in line, just before the market implodes.<BR/><BR/>The long-term price direction of real estate, because of money inflation by central banks, is always up, but there are inevitable corrections along the way. All I am saying is that it is dangerous, right now, to move into the market. Vancouver and Edmonton and even London, where I live, may chug along a bit longer, but it is risky.<BR/><BR/>For someone in your situation, if you have the stomach for a bit of hard work and some administrative headaches, buying fixer-uppers and/or rental properties can work. It all depends on a number of factors, but sometimes with some dilgence and a bit of luck, it can work well. Even in those situations, though, I think that the market is getting too long in the tooth right now.The Atavisthttps://www.blogger.com/profile/12529157597486952484noreply@blogger.comtag:blogger.com,1999:blog-6931353.post-41732390810077312092007-05-31T23:00:00.000-04:002007-05-31T23:00:00.000-04:00Well said, Sieg.And the economy has a bad habit of...Well said, Sieg.<BR/>And the economy has a bad habit of turning on a dime; at the drop of a proverbial hat.<BR/>One morning the stock exchange is busting 14,000 and by closing bell, it's dropped to a little more than half that. Most of our counterfeit "prosperity" is war-debt fabrication: People think they're making money because their gold has gone from $333 a couple years ago to almost $700 now, not facing the reality the gold hasn't changed its value at all: The government has simply printed twice as much money, thus cutting the value of the $ in half!<BR/>It's a freaking shell game. So what if the price of gold is twice what it was a year and a half ago; so is the price of gasoline!<BR/>I'm adding some research aids at CFN that will help people take the economy's pulse.<BR/>At least Canada has the advantage of some in its government who consider it right to protect their nation's borders, language and culture! I don't know what the United States Congress is smoking, but from the insanity it is currently trying to pass as law, I'd say it's some rabid crack.TheWayfarerhttps://www.blogger.com/profile/15074292938877766871noreply@blogger.comtag:blogger.com,1999:blog-6931353.post-21481128061953892772007-05-31T19:41:00.000-04:002007-05-31T19:41:00.000-04:00You're the first person I know to advise agains ju...You're the first person I know to advise agains jumping in and grabbing what you can.<BR/><BR/>Everyone else out there is saying "Buy quickly before it goes up more and you'll never afford a house".<BR/><BR/>That worries me, because people said similar things during the dot com boom. Then it busted. "It's going up and never coming down".<BR/><BR/>Maybe people see a trend and can't imagine the thought of it reversing so they block it out. Nobody wants things to go down.<BR/><BR/>I just don't think it's realistic to think that I'll never be able to afford a house. Everyone in my family for the last 50 years has bought a house, and now I wont be able to? Foolish. I expect it to come down again. And if not, I won't be alone. I'll be with all the rest who don't own, and the millions of kids growing up now who won't be able to afford either (because the prices will be going up and up!).<BR/><BR/>But I doubt it. The bubble is about to meet the needle!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6931353.post-43042493725863303802007-05-31T19:33:00.000-04:002007-05-31T19:33:00.000-04:00Good move, Trooper. As someone who has been throu...Good move, Trooper. As someone who has been through the real estate booms and busts several times and played them to my advantage, I assure you you are doing the right thing. It may take as long as two or three years for things to snap in Canada, but equilibrium is always restored. People cannot buy what they can't afford.The Atavisthttps://www.blogger.com/profile/12529157597486952484noreply@blogger.comtag:blogger.com,1999:blog-6931353.post-90894664329260813992007-05-31T18:49:00.000-04:002007-05-31T18:49:00.000-04:00Oh yikes, I'm really scared about the way things a...Oh yikes, I'm really scared about the way things are going these days. Housing in Vancouver is high, and Edmonton is even hotter it seems. How are people affording it? The banks offer them more. I got a mortgage pre-approval recently, and was approved for vastly more than I could reasonably afford over the long term. I'm no pro at this stuff, but I understood the bank would lend you somewhere around 31 or 32% of your income for a mortgage. I asked about it, and was told the figure is now more like 45%.<BR/><BR/>And don't even get me started on gas. Everyone trying to make a big buck quick. It's a bad situation headed for trouble.<BR/><BR/>I guess people do it... put all their effort and money into maintaining the fancy things they "need". I've decided to avoid the boom and bust cycle. I'm not going to buy property while we're at the peak. Even now I see things slowing down, condos on the market for 3+ months when they were being snapped up within days a year ago. Over in Edmonton, people are bidding $25,000 over listing price in order to successfully buy.<BR/><BR/>In the meantime, I'm going to pay off my debts (which are tiny compared to the price of a house), save up some cash, and while others are going to your soup kitchen, I'll be elsewhere buying their house.Anonymousnoreply@blogger.com