Speculation can kill...

The rampant housing speculation in this city has made it the number one industry, topic of conversation and has brought riches to some and misery to others.

There have been many examples in the blogs of locals who have bought multiple units, often with Government backed insurance (? Government blessing too) and have benefited, along with the RE-Industry from this speculation.

Clearly there is housing demand. Clearly the population is growing. So there is pressure on housing stock and prices. Since wages are not keeping up, a greater % of income is being spent by buyers to service their purchases.

The Government cares not one bit that buyers are having to spend 50,60, 70% of their after tax income on servicing mortgages for these bloated assets, but they will quickly run to act at the first sign of significant weakness.

Anyhow if you think that the system is rigged in favour of speculation, and that is causing those wanting to get into the market hard-ship..it could be a LOT worse.

How about speculation that leads to starvation and death. And I don't mean the international arms-dealers (some of whom I hear are based in Vancouver)

We are a global economy and a suspender-clad trader sitting in an investment bank in New York, buying grain for a bet, is literally taking that grain off the plate of a poor person.

Goldman and Friends take on the poor.

And if the bet goes wrong, Uncle Sam will be there to help pay the Investment banks losses. Nice to have

Friends in high places

Our current political system is set up to protect powerful speculators, here and in the US.

21st century trick ...

Once upon a time, there was a gasoline called 97. The cost of this item was $1.80. One day, the governing body wanted to increase the price to $2.10. However, the governing body knows that if they simply increase price, that will affect their popularity. Which in turn affect their eligibility to continue to be governing body in next election.

Hence they come up with a perfect idea. They first introduce another brand called 95. Actually this is a much lower quality product than 97. In short, 97 simply means there is at least 97% of pure petrol in the gasoline. On the other hand, 95 only has 95% purity. However, they push out 95 as if it is a better quality product. They even add some 'addictive' into 95 to justify their claim its a better product. It was presented in a way that 95 will replace 97, and stay at the same price at $1.80

More than 90% of the consumer fall for it. Hence the transition of 97 to 95 went through smoothly. Majority of the consumers pay the same price for a lower quality gasoline while thinking they enjoy a great quality petrol. This is the power of marketing ...

A few more months pass by, its about time to gain even more profit. Hence 97 is released to the market again. It was released silently and the price of 97 is $2.10. Now this time they leave it to individual vendor to tell consumer how 97 is better than 95.

16.7% of profit has been gained without a single complain from the public. You have to admit this is a fantastic marketing gimme. Even if you see it coming like I did, even if you wrote letter into the authority request for action taken .... but the majority of the consumers were falling for it, hence there is really nothing you can do about it, like I was, no matter how hard I tried. We just have to admit ... it was a gimme well played.

I waited more than 6 months to release this article. What do you think ? Do you still think this governing body has taken good care of your interest ? Or do you believe this article has some truth ?

Jigging...

Jigging is a form of fishing where the lure is moved up and down in the water until the fish strikes.

Looks like that is exactly what is happening in our RE market. A little movement up and a little down, until a buyer gives up and strikes...

We were down on detached in May but up in apartments. Now we have a reversal, down in apartments and up in detached.

These are average prices, and are from Larry Yatter...much kudos to him again for being the first out with these.

Average prices from Yattermatters

A little up and a little down - jigging. BTW- I will say it again, as I have said before, I cannot see how the B of C can raise rates. With a shaking hand and sweaty armpits they raised it 0.25% and now we have enough weakening to make them regret even that.

What we bears will need to depend on is (in no particular order):

1) Weakening economic out-look making housing even more unaffordable despite these low rates.

2) A change in investor sentiment. Two months of drops would have done it. And maybe bench-mark and median will support this. However we may have to wait another month. Even head-lines of economic weakness may bring caution.

3) A reduction in off-shore demand. Lets watch this as an indicator:

Shanghai market

4) A retrenchment in Government spending. Harper is already talking about pulling out of deficit and you can expect Provincial cut-backs to continue too.

1 and 4 are double edge swords. Who wants RE to drop because our neighbours are losing their jobs? It would have been better to raise rates, nip the monster early and then drop rates again with the next weakness (which may be starting already)

But it was not to be. We can blame the politicians, but we want everything and they give it to us.

Victoria sales/listing stats

Giveaway Time-Camera Strap Cover

 **This Giveaway is Closed.**

Whew, I am running slow today. Usually by this time of day, on a Wednesday, I am already on my way to the grocery store, then the gym, then swim lessons, but today I can't get my act together. I am siting here with my p.j.'s on, hair standing on end, and an empty cereal bowl sitting beside me, with no real motivation to get moving. We have been attending a marriage seminar at one of the local churches, and it is PHENOMENAL!! We have really enjoyed it, and they provide childcare...which is AWESOME:o) Anyway, we have been getting home late every night. It's wearing the babies out and us, but worth every minute. The kids are loving it too. So, I have been a little busy here lately and racking my brain, trying to come up with a cool giveaway that you would drool over. As I was perusing my blog list, I came across Tatertots and Jello . Love this blog! You guys definitely need to check it out, and become a follower to show your love. Jen made a camera strap, and she has been dying to have one. Here's a pic:

FABULOUS!

I have been dying to have one, but have been a tad too lazy to do it. So I thought to myself, why not make this the giveaway, and then I can get motivated to make one for me:o) If you aren't interested in me making you one, you can find a tutorial on Crap I've Made. This is also a FAB blog, and the title cracks me up every time I see it:o) Now I will be making a few "minor" adjustments to the camera strap. The one I will be offering will be a strap cover. The winner will get to pick the fabric they want for the cover. So here's whatcha do:

• Leave a Comment Here(1st entry)

• "Like" Fussy Monkey Business on Facebook, and tell me that you did it(2nd Entry) If you already "like" FMB on Facebook, just say so. 

This giveaway will end on Sunday, July 4th, 12 p.m. Be sure to enter!

*****

My living room makeover is almost complete! Can't wait to share it!!!

Tuesday Tutorial-Vacation Countdown Calendar

Hello My Peeps!  I hope that you all are having a wondermous day:o) I am utterly exhausted, but completely in love...with my new wall color! I got the paint on the walls yesterday, and I feel comforted by the sweet "Comfort Gray." I can't wait to reveal my "new" living room. Not sure when it will be ready since I am rearranging furniture:o) 

Anyway, today is Tuesday Tutorial Day, and I saw this tute on another blog called U Create. Kari is featuring Stephanie Lynn from Under the Table Dreaming who shows us how to make a  Vacation Countdown Calendar.

(sorry there isn't a picture)

Definitely check it out! It's super cute! 

******

Tomorrow I will be announcing what the giveaway will be, so stay tuned!!! 

Painting My Living Room

I am painting my living room today!!!! I am so excited about this. I have had two gallons of "Comfort Gray" just waiting to be rolled onto the walls(3 weeks sitting on my pantry floor):o) 

I have never had paint sit that long, unopened... It's gonna be great!

The yard sale didn't go as well as I had hoped. I sold almost all of the big stuff, but there were so many clothes, that it didn't look like I sold anything. We live out in the country now, so that may have had a little bit to do with the low turn out. We are going to try it again this weekend, but at a friend's home that has lots-o-traffic. 

*******

We now have reached 75 followers!!!! Stay tuned for the next giveaway. I think I will announce it on Wed. or Thurs.

*******

Also, remember that tomorrow is Tuesday Tutorials day. Hope to see you back here tomorrow!

Recession over, what's NeXT ?

Sometimes I feel very depress when my prediction comes TRUE.

For those who don't know yet, Malaysia is going through a transition where political power could potentially shared between 2 parties; instead of just one-side-say-it-all like the past 50 years. Unfortunately, the initial phase of this transition has ended in a way when our new Prime Minister has strategically resolved it.

At the moment New Economy Model was presented, I immediately sensed the game err they plan to play. Because exactly the same game plan has been played in USA before. While it is true that Malaysia CAN become a developed nation by adopting those moves but it has also been proven that such finance structure is NOT sustainable. Just see what has happened in USA and what is happening in Europe.

Although as if recession is over now, actual effective inflation experience the SHARPEST rise in last 2 months, as high as 25% to 50% if you visit hypermarket often. That is not the worst. What is happening now is that major manufacturers are deceiving consumers in large scale openly. While their products have inflated severely, they run advertisements and promotions as if their products are ON OFFER ! All these are done as part of the exercise to smoothen the transition into a developed nation, hence they have government support behind the scene at all cost. Ahem ... at consumer's cost that is. While these are nothing new to those who have seen it all, but sadly ... there are more consumers falling into it than realizing it at all.

As mentioned in what can we do when bully by the big boys, there is probably nothing much we can do to STOP anything now. So there are just a few things we can probably watch carefully and ride on so that we can get a piece of the pie too ...

• Property will rise drastically. Wherever you are staying right now and despite how much you like it, it may become more worth while to sell it off in the next 10 years. So do plan ahead where you may want to stay 5-15 years later. This may become your LAST and ONLY ticket when the nation is developed and you are still under developing.

• Double your salary in the next 2-3 years. If you wait till the wave carries you, you will always stay behind. You salary WILL increase AFTER the effect of inflation fully kick in. But by then, your increased salary will mean much less. So you really have to think for yourself now. If you are really royal to your employer, your employer should have seen this coming too and take care of you but did it ?

Other than that, derived finance products like futures, options and forex will over shine proper financial planning so much that a lot of weird and ad-hoc theories will surface out. Most people will no longer be able to differentiate what the real proper investment is. On the other hand, that is due to more and more improper investments will actually obtain real returns for the new few years. So if all you care is to get more money, then it should fine temporary.

Hence, MalPF only has one advice to all. Be deviated all you want, just remember to engage an exit strategy and keep yourself in high cash flow condition.