This morning the S&P Case-Schiller Index to the end of December 2007 confirmed that housing prices across the US fell again in unison across the country and all throughout 2007.



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Thanks to Wallst.Net out of NY, NY for chatting with me Friday about Juggling Dynamite and my upcoming keynote at the PDAC (Prospectors & Developers Association) conference next weekend in Toronto. They have posted the interview on the Wallst.Net website here.


The PDAC International Convention, Trade Show and Investors Exchange is the most important event in the world of exploration, bringing together over 18,000 attendees from all over the globe. This weekend the event will be at The Metro Toronto Convention Centre, South Building and I will be speaking at 10:45 am on Sunday.


I will also be doing the Market Lookahead segment at 9:20am this Wednesday Feb 27 on BNN. For those who miss the live spot, the folks at BNN have been posting the clips on their web site again of late. You may be able to catch it there for a week afterwards.   more »

This recent video interview with Peter Bernstein is worthwhile. Bernstein is one of the few market historians and scholars alive today who can offer the longevity of personal perspective on how recent developments compare with prior crisis periods.

Bernstein's perspective was of comfort to me in the past couple of years as the credit party raged on. I had never seen madness like recent years in my life time before. I found Peter's 8 decades of real life experience to be a great resource.   more »

This clip is a worthwhile interview. Always welcome when a smart economist speaks plainly and without bias on the current ...   more »

Some celebs are feeling the pinch as the housing downturn worsens. Others are actually facing foreclosure and losing their homes to the subprime mortgage crisis. See Celebrities not immune to the real estate crisis.

The credit crisis is not just impacting sub-prime or low income borrowers. I think this is important stuff for regular folks to read and understand. Believe it: the excess and loss of asset bubbles is something that all walks of people can succumb to. These are human behaviour driven cycles. Neither relative wealth, nor large incomes, or education can naturally protect people from getting caught up in financial mania. Only awareness and self-discipline in our individual behaiour can offer hope.

Realizing bubbles are a naturally reoccurring event in human history is a crucial first step to protecting ourselves from getting caught up in them and future losses.   more »

Recently several people with Registered Retirement Savings accounts held with broker/dealers and planners have commented to me that they are frustrated with RSP’s and they are wondering “what is the point?”

The source of this frustration comes from their experience of diligently plopping in annual contributions to registered plans, and seeing little to no growth or outright losses year after year. This is very hard to take. But I would like to get one thing straight. It is not RSP accounts that are the problem here. It is the crap bad investment products people are buying inside RSP accounts that are causing the problem. As I have said before, a flashy car with a defective engine will get us no where fast.

You do not have to buy high risk, high fee assets within your RSP and RESP (registered education savings plan) accounts. Continue making your contributions. Savers in North America receive a valuable deferred taxation benefit and tax sheltered growth on assets we hold inside of registered accounts. It is easier to save into tax sheltered accounts with before tax income than to save outside of sheltered accounts with after tax income. These are worthwhile benefits in their own right.

The trick is that once you have contributed your savings into your retirement plans you must be extremely careful with what you invest your savings in. High fee, long always products like venture capital funds, stocks or equity mutual funds are more likely to erode your capital each business cycle than they are to appreciate meaningfully within your life time. Since most advisors and investors do not have a management discipline that determines when to buy and sell equity investments, most simply buy equity investments as soon as you contribute savings regardless of asset price level or where we are in the business cycle. This is the path to almost certain losses for passive investors.   more »

For the past couple of years, market bulls have been roaring great hope and wildly optimistic expectations. Their upbeat forecasts were based on common themes: world economies would decouple from a US slowdown, real estate prices around the world would only have to correct a modest -5% in order to rebound and continue their ascent, and subprime mortgage problems would be small and contained.

In the past few months we have seen that world economies are slowing pretty much in concert, world stock markets are once again highly coupled in their descent, and Real estate prices in the US have already fallen 8% over 12 months ended November 2007. See latest Case/Schiller index. Oh yes, and subprime has been contained alright, at least to planet earth.

But even though a decline of 8% in real estate to November was the worst in many decades, by all indications prices are getting much cheaper by the day. The WSJ cites more evidence of this yesterday in Homes in Bubble regions remain Wildly Optimistic. :

"...even after a year of misery and falling prices, homes in many of these regions still aren't cheap. They remain wildly overvalued compared to average personal incomes. There is a strong long-term correlation between the two figures. And in many regions, house prices would still have to fall a very long way to get back into line.

How far? Try around a third in Florida and Arizona -- and closer to 40% in California... Even if house prices stabilized, it would take a decade or more for rising incomes to catch up.”

In many areas, prices could reasonably fall another 20 or 30% over coming months. I just returned from speaking in Phoenix where housing has been particularly overbuilt and is now violently correcting, already down by up to 50% in some areas before buyers can be found.   more »

For those who are interested, I will be talking about the housing market on CTV Newsnet tomorrow night, Tuesday, February 5, at 7:45 p.m. We will do an update on recent housing market data in the US and what impacts we are seeing in Canada to date. This is channel 30 on Rogers.

On Saturday and Sunday this week, I will be speaking in Phoenix at the Cambridge House Resource Investment Conference. It is a large conference with a great lineup of speakers (mostly American) mainly focused on trends in natural resources and gold. These are not your mainstream, run-of-the-mill financial thinkers. Panels tend to be lively and critical-thought-provoking. For anyone looking for more info or to pre-register for free attendance visit Cambridge House.com and click Phoenix.

Lastly, I did another couple of segments on the Korelin Economics Report radio show out of Washington this past Saturday, February 2. In segment 3 and 6, we discuss the significance of market cycles when executing investment strategy. You can listen to a recording of the show here.   more »