As IF Times

link In Vancouver, logic has left the housing market – Canada – Macleans.ca.

But it’s not just Vancouver, it’s a phenomenom that is being experienced the world over from Vancouver to Dubai, from Shanghai to London.  These are some of the hottest spots for real estate prices in the world today.  Investment and speculation in real estate has been the surest way to building wealth for as long as the baby boom generation has known. 

In the days pre 1970, real estate price increases were fairly moderate, for the most part, in line with the cost of living.  In fact, it was a detriment in many cases to own real estate because there were costs involved; maintenance, taxes etc.  At least in the North American experience, as the baby boom demographic pushed it’s way into real estate in earnest, supply and demand for the favored areas gradually drove prices up and houses became for most people, the single largest store of wealth for this generation.  There is no doubt that valuations in real estate are correlated with the wealth of the local inhabitants, but it can cut both ways as residents in Las Vegas, Arizona and Florida have recently found.  Wealth tends to beget wealth and so prices can really climb when a local economy is hot.  Of course access to favorable financing is another significant factor as the multiplying effect of this tool excerbates demand for product and therefore prices.

People of course need a place to live, but in the areas mentioned above, the notion of buying a house as shelter is but a quaint notion.  The entire objective and major consideration for buying real estate in Vancouver, is as a means for hitching a ride on a fast moving train.  No rational person who makes a nominal salary of $75,000 per year, perhaps netting $50,000 after tax, will try to carry a mortgage on a $900,000 house.   According to a recent listing on Vancouver’s west side from an article in Canada.com:

“…At an asking price of $889,000, the Second World War bungalow in the 3100-block West 10th Avenue in Vancouver seemed like a bargain to realtor Terry Flahiff yesterday.With the average price of a detached home in Greater Vancouver nearing $921,000 last month, Flahiff’s listing could be considered a bargain…”

It’s interesting that the news headlines have just recently finished with Bernie Madoff’s collapsed ponzi scheme and have now turned their focus to the questionable products manufactured by Goldman Sachs.  Naturally, the media are chomping at this and the clamor for more regulation is now building.  Surely people must be protected they will say.  In reality, the largest ponzi scheme running, for the longest time and with the most institutionalized support is the real estate market.  While Madoff’s and Goldman’s activities  affect a directed segment of people, the promotion of real estate is directed at the mass of the population.  Everyone is programmed to believe that real estate is the surest way to riches.  That’s a difficult premise to refute given the past 40 years of experience. 

But as the people in Nevada and Florida, once the poster states for real estate speculation found out, when the music stops via interest rate upticks, the damage is devastating.  Ponzi schemes work by constantly finding new buyers to support the earlier buyers.  Eventually, you run out of those.

link Vacationing a human right, EU chief says.

Finally, some civility.  After thousands of years of human suffering, work and achievment, society has finally reached the point where everyone can consume the fruits of generations of labour.  Adding vacation rights as a human right is a milestone in man’s history.  It turns out that the Judeo-Christian ethic of hard work to build a life was errant all these years.  Hedonism is the new rising altar of worship.  Here is the proposal,

“…The plan — just who gets to enjoy the travel package has yet to be determined — would see taxpayers footing some of the vacation bill for seniors, youths between the ages of 18 and 25, disabled people, and families facing “difficult social, financial or personal” circumstances. The disabled and elderly can also be accompanied by one other person. The EU and its taxpayers are slated to fund 30% of the cost of these tours, which could range from youth exploring abandoned factories and power plants in Manchester to retirees taking discount trips to Madrid, all in the name of cultural appreciation…”

People in the spoiled elite and working middle class have always enjoyed lazy summer days on the continent or just shady people watching in on the sunny coast of Monaco.  Now that rights will finally be accorded to those less financially endowed, everyone can partake in the niceties of life.  We assume that this egalitarian initiative will apply to everyone in Europe only so the unfortunates not living in any of the EU states will have to do with snapshots from friends on the  inside. 

Or, they could just move to Europe, which is probably a more pragmatic idea.  Why be stuck in the north of Africa if you can be lounging  in the south of France?  This initiative alone will encourage massive immigration to the sleepy old nations of Europe who desperately need people to confer excess tax dollars to. 

Travel is only one dimension of course, think of all the spin-off benefits.  Luggage manufacturers, golf club makers, sunglasses makers and tour agencies would reap massive windfalls in new business.  Car rental agencies would experience growth in business not seen since the invention of no fault insurance.  Naturally, camera makers would get huge shots in the arm. 

The gaps in society will be greatly narrowed when the rich as well as the unemployed can share opinions on the quality of pastries at Maxim’s in Paris versus those available at Wittamar or Marcolini at the Place Sablon in Brussels.  How civilized would that be!  It will be hard to have class warfare and a fractionalized society if everyone can partake of the recent vintage Bordeaux at the au courant resorts.  They can all commiserate on the snippy service by the waiters, though I’m not sure who the waiters would complain about when they’re on vacation.   Good times are on the horizon for all.