Tag: Donald Trump

House Prices: Divining the Bottom

For during an extended period of ever steady price declines in house prices, a rational person is inclined to delay any purchase, especially if he/she is a first-time buyer and/or has little equity.

Often thrashing economic and housing stats, a number of pundits have sought to find that elusive bottom in the Canadian housing market. (REMAX, on the other hand, is perpetually predicting a rebound, conveniently releasing their auguries just prior to the two seasonal waves to give themselves initial credence, at least among the naïve and gullible.)

During periods of sharp upheaval, economic and housing pundits are rarely accurate. During the last major decline in house prices in the GTA, only one pundit, Frank Clayton, accurately predicted a minimal 25% decline. That was his sole one-hit wonder as an augur.

Data driven prophecies have proven evidentially worthless, especially when the fluctuating edicts of the leader of an economic hegemon are capricious and deliberately intended to harm foreign jurisdictions in his less than rational self-interest. With real possibility of abrupt changes to one’s fortune, it becomes difficult to see a turnaround prior to January 2029, when Trump is constitutionally required to surrender authority. Even should he die in office, I doubt that this would alter American policy significantly, such as it can be called policy. Lack of the predictable leaves only the bold and reckless to risk major investments.

There exists a more commonsense predicate, at least in understanding the economic dynamics of the present predicament. I am personally acquainted with this dynamic from that earlier decline in house prices in the early 1990s. A variant of this dynamic also occurred during the Great Depression.

For during an extended period of ever steady price declines in house prices, a rational person is inclined to delay any purchase, especially if he/she is a first-time buyer and/or has little equity. For further declines in house prices may place that homeowner underwater or with much less net equity, which makes purchasing a different house impossible. This has the effect of trapping that family household in place, even if they concluded that their initial purchase was a mistake and desire to move or an economic opportunity opens up which requires a move.

I like the country. Hence, we purchased a detached house in the country in 1991 because of the large lot which gave our children room to play. However, my wife soon concluded and complained about how isolated she felt.

Like Frank Clayton, I had concluded that house prices would drop 25% from 1989 peaks. However, one year after our purchase, the builder dropped the prices of the same house type another 10%. The price remained at that level until all lots were bought. After dropping closer to 30%, house prices in general remained level until near the end of the decade.

In the early years of a mortgage, little of the principal of that mortgage is paid. Hence, while a homeowner acquires some equity, it is insufficient to overcome any major decline in house prices. Hence, we were stuck, (even if I had wanted to move).  

There exists yet another peril during an extended period of price decline. A mortgage company is under no legal obligation to renew the mortgage after the term ends. While rare, it does happen, especially if house prices have precipitously declined as they have since the frenzy of late 2021 and early 2022. Five year terms are up for renewal at rates which are somewhat higher than during the frenzy.

The additional expense, however, is probably not greater than nominal wage gains (c. 19%) since then. However, the self-interest of the mortgagor is reasonable averse to renewing a mortgage if the outstanding debt exceeds the present price of the house.

A Self-Perpetuating Dynamic

The curious aspect to this dynamic is its extended lifespan, independent of, sometimes in the face of, present economic circumstances. Barring some tumultuous event, abruptly reversing the trend, it becomes self-perpetuating, a vortex of anxious expectations propagating actualities.

During the American Great Depression, a civic jolt was required, a deliberate set of reflationary policies by the FDR administration which reversed three years of high single-digit deflation, during which one made significant ROI, merely by stuffing one’s cash in the proverbial mattress. However, this took currency out of the economic system, perpetuating the decline in GNP and in prices in an ever incessant vicious spiral.

In the 1990s, the jolt emanated from an export boom into the United States, courtesy of NAFTA, the end of the Cold War, and a maturing PC revolution (c. 1995), which finally produced the long hoped for productivity gains.

Other than some sane governance reemerging in the United States, whether from the Left or from the Right, it is not apparent from where that reversal shall come.

Even if one believes, as I do, that Canada is presently well-governed; because of the continued overhang of trade dependence upon the United States, it will require several years of resolute and steadfast political will to break free from that maddened society and the deleterious consequences of its self-serving policies and capricious edicts.

How Bad Could It Get?

After decades of inordinate price rises, the average price of a home in Ireland peaked at €349,838 in April 2007. (I regret not buying anything there in the 1980s and 1990s in Donegal where my wife’s family was from.) By February 2012, prices had dropped to €205,476, a decline of 41.3%. (Cost of living in the Euro area rose 9.6% during that period.)  The decline from peak in February 2022 to present in the GTA is 24.4% so far. (Cost of living has risen 14.5%).

Metropolitan areas like Vancouver and the GTA rose inordinately in the 2010s, courtesy of lascivious monetary policies, the excess of liquidity funneling into asset inflation. Housing prices rose and fell more modestly elsewhere in Canada.

Hence, there may yet be more financial pain to suffer.

New and Active Listings: A Flawed Indicator

Two of the statistical indicators, cited by pundits to discern the tightness of any housing market, are new and active listings. However, in a depressed market, like the current one, these indicators may be delusional. For just like the potential employee who, out of the apparent hopelessness of the job search during bad times, stops searching for work and is therefore not counted in the employment statistics, those, who otherwise desire to sell their home, may not do so out of the hopelessness of selling, and hence do not list their house. Consequently, when the market does pick up, there may be a seeming interminable stream of new listings coming onstream. The housing market does not appear to tighten and prices remain flat until the actual pent-up supply is exhausted.

The Age of the Sophists

Preamble

If honest and competent, a lifelong student of world history would observe that as free civic polities become decadent, those, claiming some intellectual, or at least rhetorical, prowess become largely sophists. Herein, an overwhelming number of public “thinkers” argue from both sides of their arse in order to advance a factional/sectarian cause. Other sophists prostitute their rhetorical prowess on behalf of whatever paymaster by whom they are paid.

Public disdain for the sophists, attested by the three famous philosophers of Athens, undermines respect for all intelligentsia, the life of mind, and meaningful public discourse required for the survival and welfare of any free civic polity.

The American Republic has befallen into a cesspool of sophistry, this even before the Donald rode the down escalator to declare his candidacy for President in the summer of 2015. This dissembling is largely consequent of a decades-long kulturkampf.

Sophists have existed in all societies. The age of sophists, however, occurs only when the mendacity and the sophistry becomes pervasive and prevailing. The meretricious claims are so sweeping in breadth that the debunkers cannot keep up.

In healthy societies, specious claims and arguments are derided and condemned by those from one’s own faction, this for the sake of continued credibility of one’s own faction.  Consider William Buckley Jr.’s denouncing of Ayn Rand, the John Birch society, and other racialists and antisemites. Herein, self-interest is enlightened and tempered with principle.

Nowadays, there are pundits who shamelessly shed impartiality, ostensibly because perfect impartiality is humanly impossible, and thereupon openly declare themselves “advocacy journalists,” sophists by another label.

Et tu, Mollie Hemingway

One of my egregious mistakes has been in giving respect and ear to journalistic pundits in America who, while their faction is in opposition, poignantly refuted and deprecated the claims and arguments of their sociopolitical foes. These pundits, while in opposition, often wrapped themselves in moral/ethical principle, even in the particulars of the American Constitution. But once their faction mounts the Commanding Heights of society, moral/ethical principle and constitutional niceties are quickly and unceremoniously set aside. Both factions are guilty of this inconsistency and hypocrisy.

There were a number of conservative pundits, who I followed to varying degrees during the Biden administration, who declaimed the follies and vices, even the ever increasing insanities of the extremism, currently and preemptively labeled Woke 1.0, (preemptive in the belief that like Trump 2.0, a worse rendition shall imminently return).

Mollie Hemingway was one of an ever diminishing periphery of journalistic pundits in America worthy, so I thought, of giving an ear. I might have missed the tidbit about how she had drunken the Kool-Aid. For in a recent video quip, she defends the indefensible.

In light of imminent shortages and spikes in diesel prices, Donald Trump has now defied the spirit of a law, yet to be put in legal force, that he signed off on just last month, which sanctioned the purchase of Russian energy products. In Lindsey Graham’s Sanctioning Russia and Iran Act, the President was even given leeway to levy steep tariffs on other countries who bought oil products from those identified. Indeed, Trump threatened to do so with India last month.

In light of Ukraine’s ability to attack refineries throughout Russia, even cripple the Baltic ports, which are portals from where diesel might be exported, the Black Sea behind completely untenable, this presidential waiver is insignificant in impact, but rich in significance.

Hemingway, now a converted Trumpian sycophant, defends his actions:

Well, the legislation mentioned does include a provision that the president can work within the restrictions of the sanctions. But I think what President Trump is trying to do here is put the American people first and let them have an interest in this ongoing, lengthy war between Russia and Ukraine. People in America are suffering. Farmers in Nebraska, Kansas, and Iowa who are dealing with very high diesel prices. Just normal Americans who are struggling to fill up their tanks at the pump. And diesel is something that Russia has a lot of.

Hemingway notes that America is not “actually at war with Russia, and that America has given Ukraine hundreds of billions of dollars. We provide the technology, weapons, intelligence, and we’re happy to do that in their efforts.”

The notion of aiding Ukraine, but then aiding Russia, in their interminable war efforts might be deemed as acting at cross-purposes, an epithet ascribed to the conflicting purposes of the policies in Jimmy Carter’s administration.

Aid for Ukraine might have been the case. But as of September 29, 2026, Trump has effectively cut off economic and military aid to Ukraine, now more explicitly by not permitting the use American assets (intelligence and satellite links), tilting the advantage to Putin’s Russia.

Cutting off subsidiary support to Ukraine’s war efforts is particularly rich, coming from a President who recently complained about allies who refused to grant access to their air bases and space for planes destined for aggressive operations in Trump’s war of choice with Iran.

And complaints of economic hardship in rich America in comparison to the existential crisis in Ukraine are akin to a family member who, whenever someone related some trauma that they have and/or are now undergoing, claims that her “hardships” are of similar kind and degree. She has lost all contact with her family who cannot stomach her intractable narcissism.

Unenlightened Self-Interest

It is naïve to believe that common humanity acts in anything but self-interest. Undergirding America’s magnanimity after World War II (i.e. Marshall Plan) were geopolitical and economic calculations. Nevertheless, the beneficiaries of such enlightened self-interest have little basis to complain about American motives.

But under Trump, America has formally renounced a first among equals foreign policy in favor of raw and myopic self-interest and self-aggrandizement. In so doing, and in its resentment of allies, who failed to carry their burden as they recovered from the devastation of WW2, America has permanently forfeited its moral authority and role in dictating how the world is run.

Europeans, who have long longed to unburden themselves of the shackles of American hegemony but did not have the political will and courage to do so, have recently discovered their kahunas or, at least, one of them in their resistance to Trump’s feint to invade Greenland. They, who have long basked in safety and prosperity, but have not been prepared to own responsibility for that security and prosperity, are being thrown to the wolves by Trump’s America.

The population of the European Union is 452 million, excluding Britain; 522 million with it. The nominal GDP of the EU is 21.24T USD, excluding Britain; 25.26T USD, including it. The GDP of the EU and Britain, under a PPI variant (Producer Price Index), exceeds that of the US. For Russia, the numbers are 140.1 million, 2.56T USD, and 7.24 USD respectively.

The Europeans are rearming. How much of a threat is Russia to Europe once Europe has rearmed? And after rearmament, Europe shall no longer have need for American military support and the American dollar as the reigning Reserved Currency. Moreover, Europe will emerge as another independent geopolitical power, another rival to American interests.

Canada has also reneged on its military responsibilities, largely courtesy of Trudeau Jr. and the specter of Trudeau Sr. A society unwilling to defend its sovereignty is unworthy of retaining its sovereignty. Hence, Canada is also rearming. Carney is committed to building millions of drones. I have since 2017 believed that Canada needs WMDs, 500 nuclear bombs, 5,000 dirty bombs should do the trick.

Americans may resent being the erstwhile defenders of Canada, and may ridicule the phantom military that it currently has. However, which is preferable from the view of American enlightened self-interest: a freeloading nation to their north and an undefended border, or one armed with drones and nuclear tips?

Sudetenland Reprised

Americans, including Hemingway, have a low threshold for inconvenience, let alone real suffering. The whole world knows this. Iran’s strategy of patience in its current war with America operates upon this premise. And certainly, Russia’s Putin knows this. The Russians have rarely had good commanders. They count on attrition and the grating willingness of the Russian people to be cannon fodder. The Rus did not build their empire overnight.

Putin will not negotiate peace unless he retains what his military has currently acquired. His political survival and legacy requires such a “peace.” The only way that the Russians might negotiate with lesser gains is if Putin dies and a new Tsar ends the war in order to stop the bleeding of Russians in an interminable war of attrition, worse than Afghanistan.

But from the perspective of Zelensky’s Ukraine, the eastern regions with a sizable ethnic Russian populace, are equivalent to Czechoslovakia’s Sudetenland, which was also populated with a large number of Germans. Hitler annexed the Sudetenland in September of 1938, courtesy of the complicity of  Neville Chamberlain. Germany took the rest of Czechoslovakia six months thereafter, also without military confrontation with western powers which had made a defense pact with Czechoslovakia.

The Americans can no longer be trusted to keep faith with their treaty promises. And Ukraine cannot count on the Europeans unless and until it becomes a proper formal member of the EU. War is hell, except for the alternatives.

And just like Viet Nam, wherein a peace settlement in 1972 allowed Nixon to completely extricate America from the South, allowing the latter’s conquest, any peace settlement with Russia would facilitate a similar concession, although it now appears, under Trump, a peace settlement is no longer required in order for the Americans to again renege.

Once upon a time, the Americans, whether Republicans or Democrats, understood that violating their promises contained in treaties in one jurisdiction would only invite further aggressions by hostile actors, alternative arrangements for allies, and the diminishment of American geopolitical power and influence. But that was a different generation.