Re: Watering Down the Message.
Once again, the mainstream media simply trots out the staged stunt and spouts the politically correct mantra. Maldives president Mohamed Nasheed inherited a deficit of 30% of GDP and has no hesitation of putting on a little act in an effort to get a hand-out from the developed nations. Researchers have reported directly to Nasheed that the Maldives do not face flooding from global sea level rise, he refuses to accept these results. The attached link is to one of the few media outlets which reported on this aspect of the story: http://network.nationalpost.com/np/blogs/fpcommen...

Price does not exist in a vacuum. A major constituent of price for housing is expectation of future direction based on past movement. Those million dollar condos in Vancouver have a lot of hope built into them. The most recent housing boom has all of the elements of the1980 boom, with the added boost of even lower interest rates. Prices post-1981 came down 20 to 25% as interest rates rose and momentum turned. I think we can expect a similar or greater correction this time around. We must recognize that the economic boom of the past 15 years has been based on unprecedented credit expansion in the US which inflated unsustainable levels of activity in our largest (vastly) trading partner. This situation in the process of seriously correcting. US housing prices and construction will not bottom until after the Option ARMs and Commercial building sectors have resolved. Resets of the mortgages for the former will peak in August of 2011. Foreclosures and abandonments will not conclude before 2012 based on the known reset schedule. Before then, it is quite possible that foreign lending to the US will experience debt revulsion. The borrowing needs of the US exceed the capacity of the total sum of global savers to satisfy, and the US will further dilute the purchasing power of its currency by unprecedented money printing (money supply expansion/inflation/"quantitative easing'" or whatever obfuscating terminology chosen). Foreign central banks, sovereign wealth funds, pension funds, insurance funds, etc are already expressing deep concern about debasement of the US$ and are voting with their feet. In cases where US govt securities are still being purchased, there is a sharp trend to shorter maturities. This is a macro-economic background to consider when evaluating prospects for the Canadian housing markets. We will not prosper if we plan on hitching our wagons to a US economic engine that shows such serious indications of fundamental damage and whose repair plans are counterproductive, based as they are on more borrowing and growth of government obligations.