The 12 charts above reflect global real estate indices that have been grinding lower. The bears are not hibernating.
It's easier said than done of course. One has to have a skill set that is in demand. Individuals that have been marginalized by the rapid change from manufacturing to service employment may never qualify as a "middle class" income earner. The last seven years of ZIRP & NIRP have been outstanding for "upper class" leverage, but for everyone else it's a casino economy; a few winners, lots of losers.
Hilliard MacBeth makes the point that in Germany there is a much higher population density than in Canada "Munich is more than 4 times as dense as Toronto and 5 times more packed than Vancouver." and that "In Canada, home ownership is at record high levels of about 70 percent, similar to the U.S. in 2005, while in Germany comparable numbers are 45 percent."
The idea of development land scarcity and the current regime of letting the market place dictate land values in Canada is of course absurd. We need reform, not a wild west of house flippers, money laundering and consumption at any cost.
Electoral reform, a promise that was made during the last Canadian federal election, by the current Liberal administration who claimed a "majority victory" with just less than 40% of the popular vote, is again being moved from the bucket to the fuckit list: "...we're not going to move forward (towards electoral reform) unless we have the broad support of the people of this country for whom we're making this change.” said the Democratic Institutions Minister Maryam Monsef CTVnews December 5, 2016. You dear voter only have until December 30th, if that, to "voice" your view at mydemocracy.ca.
The housing and bond bubbles are reflections of the ignorance bubble that we the electorate are in and it's not likely to change.
The last two properties of Umberto Eco's list of 14 that define fascist ideology are cogent to our predicament:
"Selective Populism" – The People, conceived monolithically, have a Common Will, distinct from and superior to the viewpoint of any individual. As no mass of people can ever be truly unanimous, the Leader holds himself out as the interpreter of the popular will (though truly he dictates it). Fascists use this concept to delegitimize democratic institutions they accuse of "no longer represent[ing] the Voice of the People."
Not only do we see this in our present government by removing itself from its mandate to reform the electoral process but we see it writ large in the U.S. where a similar under-representation of the electorate has Trump surrounding himself with the elite of big money, big oil, big military, and big religion, institutions that are all expert in using overt mendacity (newspeak) to cloak their agendas.
Critical thinking might as well be outlawed in the new world order of truthiness.
Word of the Year: "Post Truth"
Walter White: The New DEA Nominee
Bob Dylan: Only a Pawn in Their Game
The top panel shows Canadian Government Spending vs Labour Force Participation and the lower panel shows Canadian Jobs Added on an Annual Basis all since 2008.
The two biggest line items of Federal Government Expenditures as of 3Q 2014 are:
Government spending on itself and the household sector combined with ultra low borrowing rates have not yielded growth in Canadian Labour Force Participation.
The Federal Government may announce a "balanced budget" going into the next election call but unless Canadian employees can reverse their debt to income ratio trend by either lowering debt or raising income, householders along with the Federal Managers will not be participating in productive economic spending in any big way.
Deutsche Bank reveals 7 reasons why ‘Canada is in serious trouble,’ starting with a 63% overvalued housing market. Financial Post, Business Insider, Andy Kiersz, January 8, 2015
If Treasury Yields are a measure of price and wage inflation, it's just not happening.
Jerry Maguire - Show me the Money
Readers here know that I have been tracking "Real" Canadian interest rates and most of the time since the Pit of Gloom in March 2009, the real bank rate of Canada has been negative and yet total CPI since 2011 has been in a down trend except for the 2013-2014 spike with the oil rally which has rolled over.
The Eurozone central bank nominal negative rate experiment started in June 2014 but is getting panned by the private sector. Supply side lending is not producing private sector demand for borrowing. Borrowers get quickly fatigued when prices are not rising, and without price inflation, aggregate demand drops and economic growth stalls.
Banks are not sitting on piles of unloaned money, they are unable to find credit worthy borrowers that have desire.
It's a myth that banks lend their reserves in some money multiplier style fashion and that the Central Bank can control the rate of inflation directly by steering the banks to act in precise ways. Hat Tip to Cullen Roche
THE EUROZONE CONTINUES TO DEFLATE
AS CHINESE HOUSING GRINDS LOWER
When it comes to net worth, what the stock market is to the US, housing is to China. Hat Tip to Zero Hedge
When the world is suffering from insufficient demand, however, clearly the problem we face today, income inequality and excess savings are the problem, not the solution. There may be plenty of good investments that are not being funded in the US, but the reason they suffer from lack of funding, unlike in the 19th Century, is not because capital is to scarce or too expensive. Capital is actually too plentiful, and this shows up in the speculative flows that have driven global stock and bond markets to unreasonable levels. It is weak demand or political gridlock that prevents productive investments from being made. Hat Tip to Michael Pettis
The Spear's & WealthInsight list of cities with the highest percentage of millionaires. Toronto is ranked 15th with 3.3% of its population having assets apart from prime residence, of more than US$ 1,000,000. Spears July 2014
A ranking like this is important, said WealthInsight Analyst Oliver Williams, "...because wealthy individuals, more than any other group, will change their home and even their domicile based on factors of ready access to wealth managers and private banks as well as political stability and heritage. Owning a piece of history in a city such as London is an aspiration for many, particularly wealthy individuals from overseas..."
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'