Monday, June 4, 2012

Mon Post #2: "It's a stabilizing period"


Wikipedia says rationalization, In psychology and logic, is an unconscious defense mechanism in which perceived controversial behaviors or feelings are logically justified and explained in a rational or logical manner in order to avoid any true explanation, and are made consciously tolerable – or even admirable and superior – by plausible means.

In brackets, Wiki defines rationalization as "making excuses".

Today's Vancouver Province newspaper carries a story which headlines: Housing sales in Metro Vancouver hit 10-year low in May.
Greater Vancouver housing sales hit a 10-year low in May, dragged down by plunging sales of high-priced homes in West Vancouver, Richmond, and on Vancouver’s pricey west side.
This comes as May sales figures show that detached-home sales fell 59% in West Vancouver, 46% on the west side of Vancouver, and 25% in Richmond.

Eugen Klein, president of the Real Estate Board of Greater Vancouver (REBGV), calls the negative numbers "a stabilizing period" and attempts to put a positive spin on the situation by saying fewer sales and more listings mean that buyers can look around and haggle over price.
“People are talking all the time about affordability. There’s more room to negotiate with sellers. That’s when you have better affordability.”
Ahh, yes. More "room to negotiate with sellers." Bet all those people out there with homes on the market are calmed by this assessment of the market.

Meanwhile compare that with realtor Larry Yatkowsky's take on seller's angst at the moment, a viewpoint we posted yesterday:
"Probably, on average, about a 150 or 160 homes in Vancouver are reducing their price every day in the hope of catching, getting ahead of the train and maybe get out before they can't."
Remember that... it's not concern or panic... it's a stabilizing period as people try to get out before they can't.


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  1. Stabilizing would hint at there was a problem.

  2. Too funny. A stabilizing period kind of reminds me of what a high-wire trapeze artist attempts to do just before falling off the rope.....but that's just me.

    I saw that REBGV report yesterday, by the way and noticed it still begins by calling the market balanced which caused me to burst out laughing. Those guys just never give up. If this is "balanced" I wonder what crazy looks like.

  3. If you are watching the dollar, Whisperer, you might agree that it looks like it is rolling over and heading down. I think that is exactly what is about to take place as the Euro surges ahead. We may get some indication of easing coming from Ben Bernanke's testimony this Thursday and markets are already gearing up in anticipation and pricing good news into commodities. I see oil on the rise again as it has already bottomed, gold and silver going up sharply in the next two week period and general bullishness returning to the markets. We shall see. I am going long Euros on my belief that pretty much everyone has been scared out of the pool and it looks like a fairly good bet to me now.
    PS: Enjoying your site. Keep up the good work.


  4. world money contracts

    "China's money data are falling at the fastest pace since records began. The gauge – six-month real M1 – gives advance warning of economic output half a year ahead. "Europe needs to start quantitative easing [QE] immediately and China must ease policy," said Mr Ward. "

    Paging Ben , your helicopter is ready......

  5. Replies
    1. Good interview. Thanks Pipewrench. I don't agree with the amount of 3000 dollars annually that Deninger notes but he is correct that inflation is a kind of tax and that we are all paying it now. None of what he said was crazy....only the way he says it makes it sound less believable.

  6. An Interesting thing with the sales slipping, the realtors clinging to their notion of balanced and better pricing is that it's just beginning. Just wait until the mainstream population really believes that prices can materially fall. People still so cling to this dream of a mild correction and ultimate rebound. At that point when the market continues to melt and melt, buying will dry up for a good long while with only truly necessary sales happening such as job moves and the like. Somehow I think all the way down the realtors will shout balanced and affordability.. Meanwhile someone who buys on a dip and see's it tumble will have made possibly the worst investment of their life. On that note, on a email distribution I'm on I saw a comment you guys might like here- US based individual bemoaning Facebook's price drop and debationg stop-loss semantics, made the comment that "it was the worst investment of their life", excepting of course their home purchase. [meaning it should almost go without saying that]


    1. Yesterday I came across a comment somewhere that the new term is "Fleecebook". Cracked me right up.

      But what can you expect, eh? Most investors were anticipating the usual 10 or 15% quick bounce off a major IPO which they sell at a profit. They live for that easy money but cry the blues when one in 50 times the principle fails to work in their favour. Then they call the lawyers. Fools. In this case most of us could see the trouble that was coming. I did not buy. Call it gut instinct but it just looked too forced and the timing was terrible. And I was right....FB is down more than 6% in the last two days alone and now sits at 25.87

      Given time it will be a hell of a good buy. Just not yet.


  7. For a person who is learning the art of hypnosis, the first thing he has to master is the Unconscious Mind (UM). For a person, the Unconscious Mind not only store information that is beyond our consciousness, it also manages all of our senses and bodily functions.

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