Convergence of Negatives

Don’t read too many hard copy newspapers anymore. When researching my doctoral dissertation, used to read seven or so newspapers a day. Lots of piles.

Problem with electronics versions, at least to me so far, is that there isn’t that same cover to cover feeling. Glancing at each page, checking out the odd ad. Instead, in the electronic world, quickly looking at the top stories and moving on, often away from paper, rather than to another electronic section.

Ended up with a hard copy of the January 11, 2012 copy of the Globe and Mail Bought it at the Ottawa airport, for something to read while friend was in the midst of preparing for takeoff. Goodbye, goodbye, seems like I’ve been here before.

Ended up this past weekend finally getting to the Report on Business section of the January 11 edition of the Globe and Mail. Another advantage, and curse, of hard copies: saving and saving and saving, for when there is time to read. Maybe weeks, or months later; too precious to throw out beforehand.

Two stories seemed to link. One, by Grant Robertson, “Banks warn to cooling Canadian real estate market“, featuring the comments of Canadian Imperial Bank of Commerce Chief Executive Officer Gerry McCaughey that the housing market is “leaning heavily into an area that might be peaking” and may well soften. McCaughey mentioning that, at present, there is more than a trillion dollars of mortgage debt in Canada, while comparatively recently, that figure was $700 billion. A sidebar comment: “There has to be a landing.”

Then another story, by Shirley Won, “Get set for a crash, forecaster says“. Comments of investment advisor Harry Dent, who is advising his clients to get completely out of stocks. He lives in a rented house that has declined in value by 40% in six years; why buy? He trades on the fact that he is a Harvard M.B.A., who graduated in the top 5% of his class. Also the fact that he correctly predicted the Japanese crash in the 1990s, from which the country has still not recovered. The Japanese market is still down by 80% from its peak, nearly twenty years later.

Remembering Martin Wolf speaking about how an economy based on residential real estate is not sustainable. Remembering how Chrystia Freeland and Mark Cameron spoke about how income disparities are masked through borrowing against equity. At what point doesn one’s house decline to the extent that one owes more than it is worth? Harry Dent is predicting a 50% decline in real estate values in Toronto, and 60 to 70% declines in Vancouver and Victoria…

About brucelarochelle
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