“And the economic blog might be a nice link”

It seems that the idea didn’t go over that well when I threw it out there last week. I liked it, and I do appreciate your suggestions.

http://www.reportonbusiness.com/servlet/story/RTGAM.20081028.whousingmerrill1028/BNStory/Business/home

The Credit Crisis as Antarctic Expedition

http://vimeo.com/1933993

Pretty good analogy, actually!

And the economic blog might be a nice link

This is actually the guy that broke the camels back. Couldn’t stand the sight of the poor sap.

I’ll tell you what really gets me. Headlines like, “TSX tumbles on fear of recession!” I mean, c’mon people! Where have you been for the past month. Did someone just hear that we are headed for tough times?

Attention!! We are in a recession. You are going to be disappointed in all of the profit reports because profits are going to suck for awhile, probably a fairly long while. Let’s all assume the worst and get all of the crap priced in so we can get excited about the good news and watch our investments go up here and there.

here is another one! ha ha

http://www.reportonbusiness.com/

“Sad Guys on Trading Floors”

Lol. Love it!

Face palm, face palm, face paaaaaaalm!!

For anyone who might ever consider following my lead, you should know that I actually waited for today to sell 20% of my mutual fund portfolio. Yes, I’m quite the investor!

guy_in_regina,

I like the “average” over the long term for tracking trends, but yes, it is much more likely to be skewed by sales at the high or the low end. Those big spikes on the chart are weeks were really expensive homes sold.

George,

You are priceless! We love you no matter who you are.

I’ll be honest, I am 35 years old and still living in my parents basment. I hope to one day save enough from my pop can, worm and bubble gum card collection to buy a house. Hopefully housing comes down some more:)

All kidding aside, my job entails being at the computer some days which is pretty slow so I post here ( just don’t tell my old man who runs the show:)and then on days like tomorrow I’m out for a few days.

Holy moly George! You do all this from work!?! Please, please, please don’t tell me you work for the taxpayer.

Here’s a RE question for Norm: Is the median price a better indicator of where the market is at(i.e what an ‘average’ or mid-level house is going for) than the average price? Is the average skewed higher by a small number of very high-dollar sales? If not, why such a difference between the two?

TSX closed at its lowest in 4 years at 8537.

Sad Guys on Trading Floors:

http://sadguysontradingfloors.tumblr.com/

Go ahead. You know you really want to.

http://www.canada.com/victoriatimescolonist/news/story.html?id=4f45e020-e625-4740-b973-f23dd7795498

“Our professional community is seeing more and more individuals who can’t sell their property for what they thought it was worth and who can’t refinance or borrow more money against their property,” she said.

Looking at Saskatoon’s numbers from last week 38 sales and 1690 listings. 2.2% chance a given house would have sold last week. With prices dropping, we will see more bankruptcies moving forward as well.

I’m getting tired of looking at pictures of guys with their head in one hand a phone in the other.

I know that people that read on here probably have RBC stock and I will say this. The P/E is attractive, the stock is the lowest it has been for a couple of years. It is well capitalized and also pays a good dividend right now ( I believe) Also the Canadian government said it won’t let any bank fail

http://finance.google.com/finance?q=NYSE:RY

If the link I posted about 425 billion exposure to RBC was true ( I am thinking now its false, 1.425 billion would be more accurate) there would be more crap hitting the fan for this bank. Even Citibank does not have exposures that high. So disregard that comment.

I do think there is some funny business between the Bank of Canada and all the banks. Whether that comes out to play remains to be seen

According to bankimplode.com RBC’s known subprime exposure is $1.4 billion.

http://latimesblogs.latimes.com/money_co/2008/10/there-are-bear.html

Tokyo’s Nikkei-225 share index today plunged 486.18 points, or 6.4%, to 7,162.90, its lowest close since October 1982.

That’s 26 years with no net gain in Japanese shares — a track record that mocks the standard investment advice to just “hold on for the long term.”

On the other hand, RBC is a stock to love

http://money.cnn.com/galleries/2008/pf/0805/gallery.financial_stocks_we_love/3.html

“Though Canada may not feel so foreign to those living in the United States, Royal Bank of Canada’s minimal exposure to subprime lending compared to most U.S. banks helped the company through the recent mortgage meltdown.”

what I was getting at with peak oil is that people ( speculators) were saying that peak oil, demand from China, India, blah blah etc was the catalyst for the increase in oil the last couple of years. Now we see that was a bunch of crap. From a high of 147 to 60 in a few months. Opec controls 40% of worlds supply and they cut supply by 1.8 million barrels a day and the price is still sliding! There are trillions and trillions of barrels yet to be found. Just look at Saskatchewan with the Bakken and in the north.

You are right that oil is a finite resource but I don’t think we will ever see peak oil. Eventually other technologies will replace oil. But I am sure peak oil will used again before I leave this planet:)

After work, I will look at that link. Thanks, maybe it will even change my mind:)

Norm,

sometimes I am so disorganized, I have not a clue where I read that, but I do know that I linked it here someplace a while back. Personally, I don’t trust any of the Canadian banks.

RBC is lending as usual. I think if they were in trouble they would be holding back.

$62 oil – Who will hurt more, big oil or the green shift?

Thank for the reply.

Can you direct me to any evidence that suggests RBC is exposed to subprimes to the tune of $425 billion?

“Economist who foresaw crisis warns of deflation”

He should have passed some of his insights on to his other colleagues at Merrill Lynch.

Oil is a finite resource. No more is being *made*, and world-wide demand continues to increase. Yes, we will discover more, but how MUCH more oil remains to be discovered *is* a ‘theory’ (in both the connotative and denotative sense). The process by which oil fields become depleted, however, is quite well understood… and it is this series of observations on which the concept of Peak Oil is based.

For anyone wanting a superb layman’s explanation of the ideas, I recommend this presentation:

http://www.chrismartenson.com/crash-course/chapter-17a-peak-oil

In fact, I strongly recommend that people familiarize themselves with Dr. Martenson’s “The Crash Course” as he does an amazing job at explaining in easily-understandable laymans terms many of the issues facing us as a society today. Its slight flaw is that it is very US-centric, but the fundamentals are the same for most nations, and the data he presents (and conclusions he draws from it) are eye-opening, to say the least.

http://housingpanic.blogspot.com/2008/10/heres-picture-of-granite-countertop-you.html#links

We destroyed the world economy for these?

People NEEDED to have these items, but really could not afford them.

http://www.financialpost.com/news/story.html?id=911686

“Deflation, like runaway inflation, can be self-perpetuating insofar as consumers defer expenditures in expectation of further discounting and this delay itself reinforces the discounting trend by putting downward pressure on domestic demand,”

I think we will see sprinklings of 29, the 70′s and the 80′s asset inflation in Japan throughout the world. Canada will see a med recession, with Saskatchwan possibly having low growth or dip into mild recession in the next year. Saskatchewan’s growth will be determined by credit, everything else does not carry as much weight.

Deflation in everything from house prices, car prices, oil, commodities, food and retail sales.

During a time of economic prosperity, Saskatchewan people should have led the country in savings not spending. This will come back to bite some people. But it is part of the welath affect which leads people to do things backwards. I think our provincial government is doing the right thing by saving for the rainy days.

And a while back there was talk that potash prices and profits “peaked” this year.

I’d rather be in Saskatchewan than Ontario, but if oil really falls below $50 a barrel, and potash demand falls on increased competition/production, not sure we’ll too well. Even if we beat slumping Ontario, kind of like beating a one legged man at a *** kicking contest.

http://www.msnbc.msn.com/id/12400801/

http://www.globeinvestor.com/servlet/story/RTGAM.20081026.wgulf1026/GIStory/

Armoth,

I am not sure if you know but RBC has over 425 billion exposed to subprime mortgages. RBC will be licking their wounds for awhile.

Everybody in the world is affected by this financial crisis. This is “Globalization at its finest!”

I just love the “decoupling” and “peak oil” theories.

there are many companies who have P/E ratios at low ratios, but if that was the only factor of a stock market, I may even take out a HELOC for some stocks like Armoth did. And if P/E was the only factor, we would not have all this chaos in the markets.

But one has to look at the underlying fundamentals to understand where we are. And the biggest factor is credit. Our world, the companies and people revolves around credit. Credit is the biggest reason for growth the last 7 or 8 years. A false growth. We need credit, but there has been too much given out lately. Now, with credit being contracted throughout the world, many companies who are overleveraged are teetering on the verge of bankruptcy. I had a link last week of over 140 large US companies on the brink. And I bet some of them had great P/E.

Because of the fear and panic in the market, bad quarterly reports send the markets down. Imagine if there are some large companies go bankrupt. There are many great companies out there, but if the market goes down, they will get dragged down as well.

One other thing that bothers me is the USA debt. Borrowing 1.4 billion – 2 billion PER DAY to keep the lights on, this is not including the bailouts. It is at 11 Trillion for government debt, 53 Trillion for all debt. Once the reach the point they can’t even pay the interest, goodbye US currency. Are they close to that? I don’t know. USA GDP is 14 Trillion a year and the World GDP is 45 Trillion a year, but like I said alot of the growth is credit fueled.

I have not seen this movie, but heard it is great.

http://www.iousathemovie.com/

Here is a link about a book written in 1932 and how it pertains to our times. A great read.

The Bubble that Broke the World

http://www.generationaldynamics.com/cgi-bin/D.PL?s=qpQrMC&d=ww2010.i.garrett071009

One gauge to look at, that will determine how Saskatoon will weather this financial storm is River Landing. If it goes ahead, then we will do well. If it doesn’t, that is not good for the people here.