VanCityGuy has moved!  I will no longer be posting here.

The new site is http://www.vancityguy.com

The new site(s) reflect my personality a lot more.  Now there’s no question about my sanity.

Check out my TUMBLR and TWITTER pages as well.

Not a lot of time to post.  Doing some major renovations here at VanCityGuy, hope to have the new site up soon.

In regards to today’s market, this cartoon pretty much sums it up.

“In the Truth there is no news, and in the News there is no truth”

Pravda [Truth in Russian] was the leading newspaper of the Soviet Union.  Actually, newspaper isn’t the right word.  It was actually a propagandist rag.  But before we look down our noses at the farce that was Soviet reportage, let’s take a cursory look at our own beloved Vancouver Sun.

Now, I’m not calling the Vancouver Sun propagandist, especially when they run excellent articles like this one.  But when it comes to the Vancouverite’s obsession with real estate, the Van Sun has, in large part, been manipulated as a tool of industry.

Here’s the article short novel that the Sun ran this weekend.  Purportedly it’s a round-table of local experts on the case for real estate in the lower mainland.  These experts consist of a builder, a seller and a pundit, which is like going back exactly one year from today and having a round-table with a subprime mortgage broker, a Bear Stearns broker and a Moody’s analyst over the prospects of ABCP.

Here’s the piece. The article is well over 6,000 words long, double-that of any coverage on the gangland shootings so far, which goes to show what’s the real cause of the fear and trembling in Vancouver.

But, thank the muses, poetic justice is still alive and well over at condohype where Bob Rennie admits that

the cost of paying the tickets is less than buying a parking spot

To which condohype so beautifully compares to

the same logic when I look at renting versus owning.

ZING!

Where do I stand?  There are two types in my mind.  Real estate that you invest in, and real estate that you live in.  In my mind they are mutually exclusive.

For anything I own to be considered an investment it must meet two qualifications.

1 – I must have zero emotional attachement to it.

2 – It must be liquid.

Real estate that you live in fails in both of these categories.  But I’m not a complete bear.  I own some.

I own development land in the Eastern Townships of Quebec (which I plan to sell very soon).

And I own farmland in Saskatchewan (which I am adding to)

But where I live is not an investment. It’s where I live.

A little older, but a great track.  Bright future here.

Steve Goldie - Professional Prick

Professions for Total Pricks – ICBC Claims Agents, CRA Auditers, Lawyers…and Vancouver Meter Maids.

I am SO happy that the Vancouver Sun ran this article today about a ‘super-keen Vancouver parking officer, Steve Goldie, who writes 60-70 tickets every day‘.

Here’s some nice quotes from the article.

A typical parking officer working out of a car usually writes between 30 and 40 tickets a day.

“I like to write between 60 and 70,” Goldie said.

He’s issued, more than 35,000 since he started in the fall of 2004, are all stamped “Officer 0301.”

After chalking tires, Goldie gives the cars on his route their two hours plus a five-minute grace period, then starts checking for violators, winding his way up and down the West End’s maze-like streets and alleys.

As he starts to write tickets — or, more accurately, punches them into his hand-held computer with a plastic stylus — the time ticks by and Goldie starts to get anxious.

He knows that the longer it takes to get back to a car he chalked, the greater chance it will no longer be there.

Long story shot, these guys ENJOY being assholes.  Just like the tattle-tale kids on the playground, they LIKE getting people in trouble.

HOW ABOUT CATCHING ONE GANGSTER INSTEAD OF 35,000 PARKING TICKETS.

I hate them.  And wouldn’t you know, I have a related story that happened just last week.

My Asshole Vancouver Meter Maid Story

I was at Holy Rosary Cathedral at 8pm last Sunday night for church.  I decided to drive, so I parked in the alleyway beside the cathedral.  I’ve parked here for well over a year with zero problems, and I wasn’t alone.  There were nine other cars parked along the alleyway as well.

When I come out an hour later, sure enough, every car is gone.  First I look for broken glass because it is Vancouver afterall.  There’s none, so I know my car has been towed.

There’s usually a beggar that stands outside the cathedral and he told me that the same cop comes by every second Sunday night and gets people who park there.

So I hail a cab for me and the 70 year-old grandma and her 8 year old nephew who also had their car towed, and go to Buster’s under the Granville Street bridge where I doll out the cash for my car.

How big of a prick does this guy have to be?

He waited until people (mostly senior citizens) were going in to church to nail them.  This guy must have it in for the Catholics or something.

If we broke the rules, fine, I’ll pay the ticket.  But this asshole decided to tow us on top of the ticket.  It’s petty, but I’m disputing this ticket all the way.  I’m going to enjoy dragging it out as long as I can.  I’m disputing the ticket for the grandma as well.

The prick from the cathedral is officer #0339, not the guy from the Van Sun article, but a prick cut from the same cloth.

Most Heavily Ticketed Areas (red) in Vancouver

House of Pain

There are some topics you don’t bring up in conversation with strangers.  Politics is one.  Religion is the other.  But if you’re from Vancouver, it’s a good idea to add real estate to that list because there is no surer way in this town to loose a friend then by telling them that you’re bearish on the 750 sq. foot “investment” property they just paid 350-450k for.

I’m a financial markets guy, so real estate only affects me and where I put my money as far as the effects of the Case-Schiller Index on the greater markets.  That’s not to say I don’t like real-estate, I own farmland in Saskatchewan and plan to own more.  That’s for another blog post though.  But if the dismal numbers from the United States is any indication (down 18.5% year-over-year), any money that was put into in real estate is doing as good as a Popsicle in Dubai.

“There are very few, if any, pockets of turnaround that one can see in the data,” David Blitzer, chairman of S&P’s index committee, said in the statement. “Most of the nation appears to remain on a downward path.”

Here’s the American West Coast (the East nearly as ugly)

West Coast Living

As for Vancouver, there’s great post at Housing Analysis that, for the most part, similarly reflects my own personal opinion of Vancouver real estate. I’m not even close to bullish.  Gonna party like it’s 1999.

But Vancouver is a bubbly city by disposition, so damn all them real-estate bears.  The Vancouver Sun reports that consumer confidence is up saying:

31% of British Columbians said they expected their personal financial situation to be better in a year

That’s nice.  I just wonder how many of those 31% surveyed also own condo’s that are fast depreciating in “value”, or in other words, have no business voicing an opinion on macro-economic factors.  Also, given the fact that retail sales are nosediving and retail bankruptcies are expected to spike, I don’t think the Sun should stick it’s neck out by running articles that try to soften the reality of the situation.

The American’s aint feeling any more confident either.

That said, I’m also sick and tired of the sensationalist headlines plaguing every newspaper you read these days.  But, the Globe asks, will invoking the Great Depression bring it on?  The verdict is no, but then right after that they run an article titled “There Will be Blood”.  Go figure.

Here’s the quote of the day for me though, but no one really knows for sure:

“I would still think a depression is less than [a] 50-per-cent chance,” he said. “It’s a minority situation, but the consequences are so enormously bad. The outcome is so horrific that it sort of swamps the positive outcome. I still think we’re on a knife’s edge between deflation and very significant inflation. You’re pushing so hard against it that the chance of an error is enormous.”

NOW PLAYING

Now playing in financial markets everywhere!

You’ll  laugh at the hilarity of SIV’s (Structured Investment Vehicles) CDO’s (Collateralized Debt Obligations) and ABCP (Asset Backed Commercial Paper)!  AAA rated humour!!!

You’ll cry as the VIX (Volatility Index) the TED and the LIBOR spread rise to new terrifying heights, as the the BDI (Baltic Dry Index) drops to abysmal lows!

And you’ll gasp in complete horror when, for the first time, light is shed on the shadowy world of Hedge Fund management, 30% annual returns and the $600 trillion in derivatives that remain unwound.

Encore!  Encore!  Stimulate me to the tune of ever more trillions!  Buy by mortgage even!  The CPI be damned, we need to inflate SOMETHING as house and condo values are going to party like it’s 1989.

Also from Head-Up-Ass productions, Breton Woods II and China, Rise of the Red Dragon.

SNEAK PREVIEW ALERT – China, Rise of the Red Dragon starring…Oil!

NYC.  In the summer, Friday’s there are just great (except if you’re a banker I suppose.)

War

Say what you will about Chinese political and domestic policy, but when it comes to deal-making, the Chinese are definitely the best of the bottom feeders.

Without getting too technical, if anyone wants a lesson in how the Chinese are doing business these days, look no further than Sun Tzu’s Art of War.  Along with Machiavelli’s The Prince, it is mandatory business reading.  I plan on re-reading both soon, something I probably should have done months ago given the crisis in the financial markets.

Let’s just take a look at some of the moves the Chinese have made on the last two weeks alone.

China buys 20% of Rio Tinto, the world’s 3rd largest mining company in the biggest private placement in history (20 billioin).  Rio is straddled with debt, in desperate need of cash, and its iron, copper, coal and aluminum assets have all plummeted in price.  They are desperate and weak.

And they’re not stopping there as more Chinese firms are on the warpath, hunting mines and miners of all the base metals.

So far this year, China has acquired $22 billion worth of commodity assets.

And then there’s the oil question, or rather, the oil solution in China’s case.  State-owned China National Petroleum Corp has agreed to provide $25 billion of loans to Russia in return for oil supplies for the next 20 years.

Relevant Art of War quotes:

“Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are. Anger may in time change to gladness; vexation may be succeeded by content.”

“So in war, the way is to avoid what is strong and to strike at what is weak.”

And in related commodity news, Obama and Harper are touting carbon-capture. Why?

Here’s why – Coal.  Oil Sands.

Chavez wins the vote to stay in power for life in Venezuale.  North Sea oil production is declining exponentially.  Nigeria is a crap shoot.  China gets Russian oil for 20 years.  And amidst all this Obama wants independence from Middle-Eastern oil.

What does North America have?  Lots of coal, and as much Middle-Eastern oil in Fort MacMurray.  Carbon capture it and Obama gets to be green, and provide energy to Joe Six-Pack.

I keep harping on this, but it’s time to buy all things commodity, especially energy.