What is going on? Food Shortages / Recession Talk / High Oil Prices(Gas)/Home Prices? [Archive] - Beyond.ca - Car Forums

ICEBERG

04-25-2008, 07:53 AM

Supply and Demand.

I have my own business and the prices on material went up 30% this year.. Things have slowed down alot in Calgary. Oil and gas might be different story, but rest of the industry is not doing that great.

Would it affect Calgary? For sure, people who say it wont are naive. I have friends who live in TO and they say things are really bad down here. There is no work and lot of layoffs. Would that happen here? Sure it would.

As home prices go. I have friends who are loosing money on their homes. They bought when the market was hot thinking they would make good money on their house. One of them is getting a divorce and has to sell, he bought his house for $430,000 in the S.E and now had to lower it to $380,000 and still can't sell it. And this was a Show home he bought. The house market leveled if not went down about 50K. More expensive homes are sitting. Could get worse than better. I feel sorry for people who took out $300 - $400,000 mortgages..

Gas prices won't slow down, look at Europe. They are paying $3 a litre over there. It will be getting high here also. i see no end to this.

cheers,

Bimmer88

04-25-2008, 08:05 AM

Food prices are going up too! Damn people are going to be in more debt than ever. That's why the government is lowering interest rates to promote spending which should help out the economy. Well were all screwed... especially folks who are living paycheck to paycheck I feel sorry for them.

Supa Dexta

04-25-2008, 08:08 AM

It's all controlled by the major world banks.. *foil hat alert!*

... The Money Masters - How International Bankers Gained Control of America (http://video.google.ca/videoplay?docid=-515319560256183936&q=the+money+masters&total=1056&start=0&num=10&so=0&type=search&plindex=0&hl=en-CA)

benyl

04-25-2008, 08:48 AM

There are many many factors, but a big one is the idiots south of the boarder.

They are all living the high life thanks to credit. The credit is running out. It is funny when people say that they are losing everything. The reality is that it wasn't theirs to begin with. Just because you are making payments on something, doesn't mean you own it.

canuckcarguy

04-25-2008, 09:11 AM

Originally posted by benyl
There are many many factors, but a big one is the idiots south of the boarder.

They are all living the high life thanks to credit. The credit is running out. It is funny when people say that they are losing everything. The reality is that it wasn't theirs to begin with. Just because you are making payments on something, doesn't mean you own it.

So your cars are all paid for, cash? And you're mortgage-free?

Not trying to single you out, but everybody feels good when the money's flowing, sure some people in the US made some bad decisions, but we're not that different here - we also have record levels of consumer debt. The big difference in the US is not that their borrowers were less disciplined, but that their lenders were looser with their cash.

98type_r

04-25-2008, 09:19 AM

Stagflation... :thumbsdow

Xtrema

04-25-2008, 09:22 AM

The lack of financial and credit education > everyone.

They have force the idea in people's head that "affording" is more than just making the interest payments.

heavyD

04-25-2008, 09:23 AM

98type_r

04-25-2008, 09:29 AM

Originally posted by heavyD

Calgary is just as bad if not worse. Way too many people living beyond their means.

I couldn't agree more, consumer spending in this city has taken off far faster than the growth can support. Granted there is a lot of oil money is this city, but I for one could see a very large number of BMW owners trying to get out of their leases soon.

Antonito

04-25-2008, 09:29 AM

Originally posted by heavyD

Calgary is just as bad if not worse. Way too many people living beyond their means.

No, it's not. Not even close. But Canuckcarguy is right, it's mostly because we're simply not allowed to be worse by the banks that have shown some restraint compared to their American counterparts.

Xtrema

04-25-2008, 09:33 AM

Originally posted by 98type_r

I couldn't agree more, consumer spending in this city has taken off far faster than the growth can support. Granted there is a lot of oil money is this city, but I for one could see a very large number of BMW owners trying to get out of their leases soon.

Everybody is making good money and job market is still hot. So I don't think that'll happen soon.

But used car value is gonna suffer in this city next few year because of all the lease returns (who's gonna buy it out?) and cheaper American imports.

hampstor

04-25-2008, 09:33 AM

I hate it how stores market debt.

"you only pay $X per month" instead of, "you pay $x per month over the next Y years and pay Z amounts of interest".

People are sheep, easily fall into that trap and it's fucking up the economy. This is especially true for most younger people that want the new system for your car, new notebook computers, etc.

Maybe it's time we require legislation into how debt is advertised...

benyl

04-25-2008, 09:39 AM

Originally posted by canuckcarguy

So your cars are all paid for, cash? And you're mortgage-free?

Not trying to single you out, but everybody feels good when the money's flowing, sure some people in the US made some bad decisions, but we're not that different here - we also have record levels of consumer debt. The big difference in the US is not that their borrowers were less disciplined, but that their lenders were looser with their cash.

Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromabroad/macdonald/20080325.html

Living within your means would seem to be a universal wisdom. Not here.

canuckcarguy

04-25-2008, 09:48 AM

I don't remotely care about banks and lenders and credit card companies being too loose and taking a huge hit when the market goes down. Big deal - they're big boys, they can handle it. If you don't like their lending policies, don't buy their stocks. What bothers me is when the taxpayer is on the hook. Everybody talks about the housing boom, and why it happened. I thought, by and large, it was great, by the way. And we were undervalued for a long time in Alberta, so lots of that price appreciation was reasonable. I don't see us returning to $75K houses.

But most people ignore that one of the big causes of the boom is not that banks got looser with their credit, but that CMHC got looser. The government agency introduced lower lending criteria, like eliminating the cap on loan values (they used to limit how much you could spend on a CMHC insured house, depending on where you lived). They decided to allow longer amortization periods. They decided to allow so-called "no down-payment" options (essentially a borrowed downpayment). They reduced requirements on credit, and income, and job stability. They lowered the "conventional mortgage requirement" from 25% to 20%. And they'll be on the hook for most of the foreclosures in this economy, since people who put more than 20% down are less likely to let their homes go.

These changes all occurred within the last five years. And when the shit hits the fan, as it always eventually does, it'll be the taxpayer on the hook.

Chester

04-25-2008, 09:48 AM

Antonito

04-25-2008, 09:51 AM

Originally posted by hampstor
I hate it how stores market debt.

"you only pay $X per month" instead of, "you pay $x per month over the next Y years and pay Z amounts of interest".

People are sheep, easily fall into that trap and it's fucking up the economy. This is especially true for most younger people that want the new system for your car, new notebook computers, etc.

Maybe it's time we require legislation into how debt is advertised...

Forget the advertisments, if we're going to make legislation for help, legislate proper economic education in highschool. Even when people get told Y and Z, they don't care because they don't have financial foresight

benyl

04-25-2008, 09:55 AM

Originally posted by canuckcarguy

These changes all occurred within the last five years. And when the shit hits the fan, as it always eventually does, it'll be the taxpayer on the hook.

Yup.

Thats is what is happening south of the border now... and will migrate up here soon. The US Gov is bailing out banks, etc but not the taxpayer themselves. The best part is that Bush lowered taxes... Where does all the money come from? They just print and lend more making the situation worse.

I think that as a prerequisite to becoming the president, you should be required to take an economics, finance and accounting course. LOL

canuckcarguy

04-25-2008, 09:55 AM

Originally posted by benyl

Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromabroad/macdonald/20080325.html

and I wasn't trying to single you out. Sounds like you're in a great position. Not sure if you were always in that position, I know I've been in worse spots before. And I'm not one to blame the big, bad companies out there.

But I don't think that Americans are inherently dumber or less-disciplined than their Canadian neighbours. Go to the Brick, and watch broke people buy new furniture, or go to the "no credit, no problem" dealers, and watch people buy cars they can't afford. They're not dumb Americans. They're dumb Canadians.

But on the house front, our lenders are acting like American lenders were acting 10 years ago. We tend to follow their trends. They had payday lending 5 years before we did. Our pawn shop industry is where theirs was some years ago. And the "sub-prime" lending industry here is less-developed, but growing fast.

I'm a big believer in personal accountability, and I frankly don't have a bunch of sympathy for people who over-reached and made unrealistic financial decisions, and are now paying the price. But certain percentages of both Americans and Canadians will borrow as much as you'll lend them.

benyl

04-25-2008, 09:56 AM

Originally posted by hampstor
I hate it how stores market debt.

"you only pay $X per month" instead of, "you pay $x per month over the next Y years and pay Z amounts of interest".

People are sheep, easily fall into that trap and it's fucking up the economy. This is especially true for most younger people that want the new system for your car, new notebook computers, etc.

Maybe it's time we require legislation into how debt is advertised...

That hasn't changed for decades. I remember in the 80s, my parents used the "Do not pay" financing to buy a TV.

canuckcarguy

04-25-2008, 10:01 AM

Originally posted by Antonito

Forget the advertisments, if we're going to make legislation for help, legislate proper economic education in highschool. Even when people get told Y and Z, they don't care because they don't have financial foresight

I couldn't agree more.

In a rental property I owned a few years ago, I had a very nice tenant. He was in his 4th year of Engineering, was born and raised in Canada. He had a retail job to pay the bills, and was just moving out of his parents' house.

When I asked him for post-dated cheques for his rent, he had to go to his bank and order cheques, since he'd never had any. And then I had to show him how to fill them out.

Now he has a big job, a big car, a big house, and (presumably) big debt. I doubt he has any idea how any of it works.

Xtrema

04-25-2008, 10:26 AM

Originally posted by benyl

That hasn't changed for decades. I remember in the 80s, my parents used the "Do not pay" financing to buy a TV.

I love all the great financing promotions like do not pay.

But I always make sure I can pay it out right NOW before I take those promotions.

Antonito

04-25-2008, 10:31 AM

Eleanor

04-25-2008, 11:11 AM

Originally posted by benyl
The best part is that Bush lowered taxes... Where does all the money come from? They just print and lend more making the situation worse.

I think that as a prerequisite to becoming the president, you should be required to take an economics, finance and accounting course. LOL

Bush can't lower taxes, that power doesn't rest with the executive, it was congress that made all those decisions....

I know the president has a hand in it coming around, but the idiots in congress still let it all pass.

canuckcarguy

04-25-2008, 11:27 AM

Originally posted by Antonito

Luckily for us, the US's problems are going to save us from following them down that road

I'd like to agree with you. And that might be the case.

But have you noticed any decrease in those flyers that come in the door, with the "your house is your credit" philosophy? These guys are still lending money as fast as the borrowers will take it...

I've loaned money for years, including against houses, and I'm at my most cautious right now. But there are plenty of lenders and investors out there burning through money.

sexualbanana

04-25-2008, 11:47 AM

Funny that this topic came up. I just read this article and I agree with everything said 100%.

Why Gen Y is Broke (http://articles.moneycentral.msn.com/Investing/HomeMortgageSavings/WhyGenerationYIsBroke.aspx)

Dren

04-25-2008, 07:59 PM

Such a Changing world...seemed to happen soo Fast !

TomcoPDR

04-25-2008, 09:10 PM

Originally posted by benyl

Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromabroad/macdonald/20080325.html

Originally posted by canuckcarguy

I'm a big believer in personal accountability, and I frankly don't have a bunch of sympathy for people who over-reached and made unrealistic financial decisions, and are now paying the price. But certain percentages of both Americans and Canadians will borrow as much as you'll lend them.
^^^:clap: :clap: :clap: :thumbsup: :thumbsup: really good points and comments both of you.

I remember in the mid-80's as a kid, everyone made fun of my dad taking up some "expensive" assumable mortgage houses, in his late 30's ended up working at McDonald's for extra income to pay for them too (rent income does not completely cover expenses), buying no-name food, I didn't get no #23 Air Jordan's but $15 K-Mart shoes.

Guess we're ok now because of my dad's cheap spending teachings, but I'd still like to be able to splurge on $95 lunches once in a while.

HuMz

04-25-2008, 09:35 PM

Originally posted by canuckcarguy

But on the house front, our lenders are acting like American lenders were acting 10 years ago. We tend to follow their trends. They had payday lending 5 years before we did. Our pawn shop industry is where theirs was some years ago. And the "sub-prime" lending industry here is less-developed, but growing fast.

The thing is though the sub-prime mortages aren't growing fast here in Canada at all. Thats what makes our lenders that much different and leaves alot more optimism in our real estate market here in Alberta. In 06 the states had 26% of new mortages to sub-prime borrowers compared to only 3% in Canada.

eblend

04-26-2008, 09:49 AM

Originally posted by benyl

Two out of 3 of my cars are paid for. One is a lease as it is a deduction for one of my businesses. My mortgage payment is 15% of my monthly income. I bought my house 1.5 years ago and I have 15 years left on my mortgage. I am getting married in 3 weeks and she makes more money than I do. So our mortgage payment will drop to 5% of our combined income. I don't think that is anywhere near living beyond my means. I am not bragging, but you asked.

Nobody tells you to go and borrow money. It is a choice you make. Sure there is peer pressure to live the "bling" lifestyle.

Interesting article about the US spending habbits:
http://www.cbc.ca/news/reportsfromabroad/macdonald/20080325.html

If your paying that low for your house payments....why are you feeding the banks?! Jack up your monthly payments to be like 50% of your income and be finished with your morgage in a few years, otherwise you are just throwing interest at them.

I wish I was in a position where I could buy a house in this city, but obviously I know the market is on the downturn so I am not taking the plunge anytime soon. I rather pay 1100 in renting then something stupid like 3000 a month for the next 30 years. I will wait it out for now. When me and my girlfriend get married (aug 24th of this year) and she gets her nursing job (already certified with experience, but in Japan) then our household income will be high enough to warrant a house purchase, even in this market.

And the thing about credit cards. I don't know why people are so stupid when they use it. I use my credit card simply for convenience of having everything on one bill. I don't bother using debit or cash ever (unless I absolutely have to) because then you are spending your own money a month and a half early, so why not get interest on that money for that time, and let the credit companies take the hit. I pay off my CC in full every single time, and its super convenient for me as I can see all my purchases on a single bill. I think the reason for my success with credit cards is because I have the money ahead of time for stuff I purchase, whereas many people purchase first and hope they can pay off later, and as often the case, they can't and end up in the continious loop.

rc2002

04-26-2008, 10:36 AM

Originally posted by HuMz

The thing is though the sub-prime mortages aren't growing fast here in Canada at all. Thats what makes our lenders that much different and leaves alot more optimism in our real estate market here in Alberta. In 06 the states had 26% of new mortages to sub-prime borrowers compared to only 3% in Canada. '

Subprime or not, in a highly speculative market where people put little to nothing down and count on rising home prices to make a quick buck, when the market turns there will be defaults even for prime borrowers. Alberta is shielded right now, but if unemployment rises and defaults occur, fire sales could snowball this into a huge issue.

rc2002

04-26-2008, 10:43 AM

Originally posted by eblend

And the thing about credit cards. I don't know why people are so stupid when they use it. I use my credit card simply for convenience of having everything on one bill. I don't bother using debit or cash ever (unless I absolutely have to) because then you are spending your own money a month and a half early, so why not get interest on that money for that time, and let the credit companies take the hit. I pay off my CC in full every single time, and its super convenient for me as I can see all my purchases on a single bill. I think the reason for my success with credit cards is because I have the money ahead of time for stuff I purchase, whereas many people purchase first and hope they can pay off later, and as often the case, they can't and end up in the continious loop.

That's exactly what I do as well. The credit card company is giving you a free loan every month and a half, take it and do something with it.

in*10*se

04-26-2008, 01:21 PM

Originally posted by benyl
Just because you are making payments on something, doesn't mean you own it.

so true of all bmw drivers....
:rofl: :rofl: :rofl:

(had to say it):D

Legless_Marine2

04-26-2008, 09:21 PM

Originally posted by canuckcarguy

I couldn't agree more.

In a rental property I owned a few years ago, I had a very nice tenant. He was in his 4th year of Engineering, was born and raised in Canada. He had a retail job to pay the bills, and was just moving out of his parents' house.

When I asked him for post-dated cheques for his rent, he had to go to his bank and order cheques, since he'd never had any. And then I had to show him how to fill them out.

Now he has a big job, a big car, a big house, and (presumably) big debt. I doubt he has any idea how any of it works.

That's hilarious - Sounds exactly like me. I was likewise reluctant to get on the "financial grid". I've done so slowly, and responsibly - I now have a mortgage, and a few credit cards.

I'm still a bit out of my depth in regards to comfort with financial matters, but nonetheless live responsibly, and within my means.

Legless_Marine2

04-26-2008, 09:24 PM

Originally posted by Dren
Whats happening ?
Will this affect Alberta much? Heard stories that Ontario is already in recession?

Views? ideas....

The news really does seem more pessimistic than usual. It's gotten a few people around me quite riled.

A790

04-28-2008, 09:36 PM

The US economy as completely fucked my industry up. Advertisers that were paying well have cut back on their spending, which in turn means less revenue coming through the advertising channels, which means I get a small cut of it.

But, I have no debt, so I'm pretty carefree about it. I use my credit card for all purchases, big or small, since I get 1% cashback on it (have collected over $1,200 since January), and it gets paid off every month.

Using debt as a means to leverage your income isn't a bad thing so long as you keep your wits about you and save some money. I mean, why finance that $1,600 TV when it's realistically another month or two of saving? I'd rather wait, buy the TV outright, and NOT have to pay 28.8% interest.