Books by Garth Turner

Coming February 1, 2010

Oil prices and commodities surging. Real estate tumbling.

Trillions rushing into stock and bond markets. Taxes jumping, America staggering and a pension crisis gripping 11 million Canadians.

Between now and 2015 investors, homeowners and savers will hardly know what hit them. If you’re not prepared for higher taxes, the incredible fallout from the Boomers or crashing house prices, you’re not paying attention. The road ahead is paved with change. Already so many people are losing their way.

In ‘Money Road’ financial guru Garth Turner explains why the global financial crash did not end in 2010, and what this means for stock markets, home values, gold, your paycheque and your retirement. Like no other Canadian guide yet, this one book is packed with hands-on strategies and tools you cannot afford to ignore.

• The secrets of contrarian investing, analysis and stock selection.

• Why real estate will fall and how to be a vulture when it does.

• The looming Boomer crisis. Even if you are 60, it’s not too late.

• Slashing taxes, tax-free pensions and how to deduct your mortgage

• How to make a perfect portfolio. Why many ETFs won’t cut it anymore.

• Investing in stocks, bonds with zero risk. Tax shelters that are too good to last.

• Over a hundred strategies specifically for Canadians.

Millions are now making life-changing mistakes. Don’t be one of them. Get on the Money Road.

Also by Garth Turner…

From a reader: ‘It read like a thriller. I was immersed in the intensity and depth of it…’

Garth: I just wanted to take a moment to thank you for the offering of your most recent work, After the Crash.

After having read daily (via a fairly decent and varied news feed) about the banking crisis over the past couple of years, I have found myself starved for a truly indepth and informed Canadian perspective on the imminent crisis taking place. Then suddenly on thursday morning I caught an interview with you on The Hour (a podcast saved on my computer). After watching the interview I pretty much ran out of the house and headed for the nearest book store to get my copy of your latest tome. I started it on Thursday night, reading 75 pages in a single sitting (in bed) before my wife clamoured for me to turn off my little LED book light – it read like a thriller and I was immersed in the intensity and depth of it. Friday morning I headed out to do my weekly shellfish/oyster deliveries and came straight back home in the early afternoon to get back to the book.

I finished reading it last night and saw your email address printed on your contact page (pretty rare occurrence, yes?) so I am motivated to send you a note about how important it was for me to have read this work. I am thrilled to have finally found a resource of approaches and ideas that are truly timely and useful.

I consider you to be challenging, open, thoughtful and, ultimately, compassionate towards a variety of worldviews without coming down on any particular side too heavily. This kind of tact is refreshing to see – I am just thankful that you’re Canadian! You have helped me to re-prioritize and more importantly, re-connect to my life’s purpose.

I am eternally grateful. Be well,

Eric Giesbrecht
Calgary, Canada

Garth Turner’s ‘to do’ lists for surviving financial end times

There’s a seemingly endless appetite for books that predict either looming economic disaster, or something approaching nirvana, where stock markets soar to the heavens, and the work week shrinks to a few hours.

From author Ravi Batra’s The Great Depression of 1990, published in the late 1980s, to Dow 36,000, written by authors James Glassman and Kevin Hassett in 1999, the book shelves are lined with such tomes.

Virtually all have been dead wrong — some hilariously so — but that doesn’t stop such books from appearing, year after year.

Perhaps it’s a primal thing. At some level, we humans must have a deep-seated need to work ourselves into a state of intense dread about the future, or alternatively, profound exhilaration about the glorious prospects ahead. Depending on our mood, of course.

These days, with the world in the vise grip of the worst recession since, well, the Great Depression, our collective mood grows darker by the hour. So you can expect a steady stream of books predicting a bleak world ahead, as layoffs mount and the global economy sinks.

Veteran author Garth Turner’s After The Crash is one such effort, and it won’t fail to disappoint those who see the economic storm of 2008 as merely the first chapter in what could become a decade of unprecedented pain and misery. The political maverick, two-time federal MP, personal-finance specialist, prolific writer and wealthy entrepreneur spares no detail in depicting a grim future of depopulated suburbs, abandoned big-box stores, empty universities and relentlessly plunging home values.

To be fair, Turner doesn’t exactly predict all this will occur.

He does leave himself an out: “Hopefully the post-bubble years will bring merely a bad recession we snap out of by 2011 or 2012,” he says. “But there’s no guarantee.”

With that tiny caveat, however, Turner really gets rolling. He says Canadians should get used to seeing their net worth fall, their house prices shrink, their stock portfolios sag, and their jobs disappear. And hey, that’s the good news, relatively speaking.

If the economy really goes to hell, Turner figures we could all be going back to something akin to the 15th century. Among other things, he sees the likelihood of local food and gasoline shortages, mass migrations from the cities and suburbs as urban crime soars, escalating firewood prices, and regular power blackouts.

“While some of the above may sound extreme, enough will come to pass to make it clear we’re in changed times,” he says. “The decision each person must make is how to react, and to what degree.”

Turner’s book is full of helpful “to do” lists and practical guides offering advice on what items will be needed to survive the possible breakdown of civil society. His worst-case scenario — dubbed

the “This will get bad, I’m outta here” list — provides no fewer than 41 separate tips.

Give the man this: He’s thorough.

Turner says every home should have a “Bad Day Box” containing vital survival items (can opener, personal hygiene supplies, matches, cash, rain gear, etc.).

His so-called “Go-bag” of essential items reads like something out of a military manual. He even devises a “Go-bag” for each family pet, complete with a copy of their vaccination history.

Besides the obvious things — stockpiling water, food, batteries, vegetable seeds, soap, medical prescriptions and toilet paper, buying a generator,

installing a wood stove and loading up on gasoline — Turner also suggests getting basic fishing tackle, installing a clothesline, and yup, even buying a weapon.

“Are some of the above suggestions extreme? Most people will readily answer that they are. Some will not,” he says.

“Some folks will wonder how any of this factors into a financial book. Others will quickly see the connection in a time when our collective pursuit of consumerism and debt has led into debt and danger.

“After the crash we know much more about the fragility of our system and how it broke down. We hope for better days. But hope is not action. That’s for you. Take care,” he says.

As for me, I’m not sure what the

future will bring. I’ve never seen such uncertainty in my entire life. Like everyone else, we’ve been hammered by the downturn in the housing market, and the stock market.

But let me also say this. The future is never clear — even when you think it is.

Back in 1983, when my wife and I bought our first home in Toronto, the economy was a mess, interest rates were high, I had no full-time job, we were expecting our first child, and our annual household income was less than $25,000.

At the time, I was a freelance writer. I was so poor I had to write my stories on a rented typewriter. All of our meagre income was directed toward paying our $850 monthly mortgage fees.

Yet somehow, we managed to do it. Even after my wife gave birth, and stopped working. Eventually I found a full-time job, and my salary soared to an astounding $23,000 per year. Life went on, and we had a second child.

Six years after we bought that house, we moved west, and sold it for nearly three times the original purchase price. If we hadn’t made that leap of faith in 1983, when all was dark, and the world was terribly uncertain, we would have missed a golden opportunity.

That’s what exists today. On the one hand, uncertainty. And on the other hand, opportunity. You can choose to be fearful, or you can gather your courage, and move forward. As Turner says, that’s for you to decide.

glamphier@thejournal.canwest.com

Smarmy Globe and Mail review

‘The world according to Garth’

By Julian Beltrame, Canadian Press

OTTAWA — Garth Turner is finding that the scarier things get, the more people pay attention to his doomsday alerts.

One reason is that he’s out of politics, he says, so his economic forecasts are no longer seen as possibly tainted by partisanship.

But more important may be that the former MP’s alarmist book about collapsing housing prices in Canada – “Greater Fool,” which he began writing last December when the sky seemed to be the limit – has turned out scarily bang-on.

If he turns out to be as prescient with his soon to be released new book – After the Crash – Canadians would be well advised to heed his warning and on how to survive the economic collapse.

Turner, who has worn a number of hats in his career including entrepreneur, journalist, broadcaster, author and combative politician, is predicting hard times for Canada over the next two years and he hasn’t ruled out a good old fashioned depression.

“We’ve had a crash. America has crashed, stock markets crashed, Wall Street crash, real estate crashed and the global economy crashed,” he says of the events of the fall.

“The world as we’ve known it is gone. You are not going to get credit cards in the mail, you are not going to get lines of credit easily. Those days are gone. The question now is are we going into a bad recession, are we going into a depression?”

Turner believes Canada’s gross domestic product will plunge five to eight per cent from the beginning of the recession, which he believes began after Labour Day, to the end, which he says won’t come until the spring of 2010.

As well, he expects housing prices will plunge another 30 per cent next year – on top of the 11 per cent drop so far this year.

‘His book about collapsing house prices in Canada has turned out to be scarily bang-on’

For the first time since the Dirty Thirties, Turner expects many Canadians will wind up owing more on their homes than what their home is worth, particularly those who purchased in the last two years with little down payment.

That’s not a depression, as he sees it, but pretty darn close.

Most economists – but not all – would scoff at such doom and gloom, to which Turner replies: That’s what they said when he predicted Canada’s housing market was on the same disastrous path as America’s.

“It’s a relatively straight forward to weave some pretty ugly scenarios,” says Douglas Porter. “He’s probably not too far out of line to say things could be very ugly if policy makers make missteps or don’t step in to support the economy.”

Porter places greater faith in the massive economic stimulus packages being proposed around the world, and in Canada. Prime Minister Stephen Harper is pegging the deficit next year at up to $30 billion, mostly as a result of increased spending to help the economy.

The Bank of Canada and Ottawa have also injected over $110 billion in liquidity – cash -to grease the money markets, and interests rates have been chopped.

Turner agrees those bold actions could stave off the worse, but they also may not, he adds.

“We’ve never had this amount of money thrown at an economic problem, so we’re in uncharted territory,” he says.

“But by the same token, they are blowing their wad all at once, so this better work because we are out of bullets.”

________________________________

Garth’s 2008 best-seller was right on the mark

The timing couldn’t have been better for Garth Turner’s early Spring 2008 book on real estate and its impact on personal finances. At a time when the US was clearly heading for recession, stock markets roiling, a global credit crunch overwhelming banks and a climate crisis lurking, the Canadian real estate market was immensely vulnerable. And while ‘experts’ reassured Canadians and encouraged new buyers, Garth Turner was raising the alarm. Just in time.

More than 700,000 US families lost their homes in 2008 and millions more are now threatened. House prices have collapsed as much as 40% in some markets, amid predictions of another 25% slide. New home sales are down over 70% in some markets like Vancouver. There are 20,000 new, empty houses for sale in Phoenix, streets of foreclosures in California and desperation in Florida. What happened?

In this prescient, timely and important new book, Garth Turner examines the myths and counters with the facts. He dissects the American subprime experience and finds, startingly, the problems go far beyond mortgage products, and also reach into Toronto, Calgary and Vancouver.

Real estate, especially after 9/11, has become a mania in North America. But emotion is colliding with massive debt, and the results are not pretty. Who’s at fault? Greedy investors? Central bankers? Industry Pollyannas? Self-serving media? Garth Turner funds there’s plenty of blame to go around.

This book is a wake-up call to all those who own real estate, or dream of it. There will not be many Greater Fools left in the market soon,

Don’t say you were not warned.

Recent reviews:

Garth Turner has an interesting post up on the blog for his book, Greater Fool: The Troubled Future of Real Estate. For those who are unfamiliar with the book, in a nutshell it discusses the subprime crisis in The U.S. and explains why Canada is in line for a similar real estate bust, albeit for different reasons than in the United States. While this may seem obvious now, the book was published back in March, when many real estate experts were still saying that Canada would be immune to the type of crash than our American neighbours have seen. Since that time, real estate prices in most parts of the country have declined significantly, and as such Garth’s book has proven remarkably prescient.

In his blog post, Garth talks about what we can expect to see in the next six months. Some of his points include:

* Eastern cities, including Toronto, will have markets fall another 10%, for a peak-to-Spring decline of 25%.
* Albertan cities will decline another 10% as well, for a rout of 30%.
* Vancouver will crash 20%, taking the average price down 25%, on its way to 40% prior to the 2010 games.
* Montreal and Ottawa will decline about 12% by Spring from the peak, while Maritime cities will escape absolute reductions, and merely flat-line.

Given Turner’s prior success in prediting how things would play out in Canada’s real estate market, it seems wise to heed his advice. Obviously, it’s not what you want to hear if you are planning to sell your home. On the bright side, for those looking to buy a home, things are becoming more affordable.

Realtors and their professional associations are, understably, the group that is most upset with current trends. An article in the Toronto Star provides a couple of revelatory quotes:

“Just stop reading the newspaper and watching the news,” Polzler said to enthusiastic applause.

“The need is paramount now to accentuate the positive,” said Gary Hockey, president of Coldwell Banker Canada. “We have to create some positive spin so we don’t get dragged down to the doldrums.”

It’s obvious that they are running scared, with good reason. It seems a bit disingenuous to say that all that needs to be done is to create some positive spin. Over the past half-decade, realtors managed to take 0-down, 40 year mortgages and spin them into a real estate bubble. While it is not surprising that realtors want to keep attitudes toward real estate purchases positive, it seems a bit reckless to suggest that realtors and others ignore the news. Denying reality isn’t going to make things better. (Review posted on Oct 28, 2008).

Canada not immune from subprime crisis: Garth Turner
By Jonathan Chevreau, Financial Post
The U.S. real estate crash is about to sweep into Canada, says Garth Turner in a just-published book entitled “Greater Fool.” Turner – entrepreneur and real estate investor – says the problems underlying the American subprime crisis “go far beyond mortgage products and also reach into Toronto, Calgary and Vancouver.”

In a nutshell, Turner urges his Canadian readers to sell their real estate if it makes up much more than a third of total family net worth and consider renting until the storm passes. He suggests baby boomers sell their “McMansions” while they can still get decent prices and find more reasonably priced modest homes located near hospitals, public transit and other amenities.

The book is timely enough, considering it includes such recent news reports as the line-ups for downtown Toronto condos: line-ups he says were largely fabricated for the benefit of gullible media types. “When bungalows in Vancouver cost $900,000 and resale homes with no parking in midtown Toronto are $1 million, it’s only forty-year mortgages and an embracing of debt that sustain the unsustainable,” Turner writes in the Key Porter published book, subtitled The Troubled Future of Real Estate.

He warns that overextended young Canadian couples are buying into several real estate myths, “egged on by real estate marketing machines and reassured by economists paid by our largest lenders.” They “cling to the absurd belief that paying too much for something is okay” and that “there will always be a greater fool willing to pay more.”

Turner does not believe the American housing crisis was caused by subprime mortgages extended to otherwise unworthy borrowers. “That was but a symptom” of the real disease, which was the rush into real estate that followed the flood of cheap money Alan Greenspan unleashed following the shock of 9/11.

With 5% down mortgages and the new 40-year amortization schedules, Canadian homeowners are just as overextended as their American counterparts, Turner argues. He also notes that subprime [or near-prime] loans are also available in Canada through firms like Toronto’s Exceed Mortgage.

“The inevitable conclusion is that the current Canadian real estate market is floating on a sea of unrepayable, and perhaps unserviceable, debt.”

Among the myths Turner identifies:

1.) Unlike stocks, real estate is a riskless investment.
2.) Houses [always] appreciate
3.) Canadian lenders are more conservative [than U.S. subprime lenders]
4.) Industry experts are worth heeding
5.) You need some place to live anyway
6.) A house is a great investment
7.) Better to be an owner than renter
8.) Rising markets are normal
9.) Real estate profits are tax-free
10.) Canada is different

And here are his recommendations (or what he terms “strategies.”)

For Homeowners:
• Wait and see what happens
• Hang on and hope for the best – a downturn of just a few years
• Liquidate now, invest the proceeds and rent
• Sell with a long close, hope the contract is honored, then buy back into a declining, buyer’s market
• Ignore it all
• Diversify, and promise you’ll never be so foolish again.

For Homebuyers:
Turner suggests buying real estate with a future and that empty-nester boomer couples will be downsizing into bungalows, townhomes and condos of 750 to 1500 square feet. Access to urban services will be important. In other words, “buy real estate with a fighting chance of retaining its resale value.”

And for those thinking of buying a second home, Turner’s one-word recommendation is “Don’t.” Those who want cabins on a lake or farms with a pond should rent instead, because overextended investors will be dumping their country retreats before their urban principal residences.

And finally – here I’m talking to anyone who viewed the recent video blog interview with Mark Dziedzic – Turner warns Canadians not to get sucked into buying “bargain” foreclosure properties in the United States.

Turner closes with the disclaimer that “my views may be prescient or be proven wrong. Regardless, there will be a greater fool.”

Well, that’s covering all the bases.

And what do I think? Turner makes some good points and he’s certainly been around the real estate block a few times. I wouldn’t disregard his points out of hand. Personally, I’ll be hanging on to our own Toronto residence, but then it already qualifies as a modest home near public services, it’s mortgage free and does not exceed a third of our net worth. Nor do we own a second property.

However, if I were among the many people tuning into TV shows like “Flip this house” and thinking of speculating on real estate, I’d certainly want to consider Turner’s arguments before borrowing money in the hope of instant riches at this stage of the game. It’s one thing to have a paid-for home you live in and quite another to be speculating on real estate on the hope prices will always rise and a greater fool will arrive to save you from your greed and foolishness.

Much of Turner’s criticisms are directed at people who have saved nothing for retirement or even for emergencies and who live beyond their means, buying more house than they need with such atrocities as 40-year amortizations. I agree with Turner that if the only way you can afford a home is through a 40-year am, then you’d be better off renting and waiting until you do have enough money saved to buy a more modest home. Thankfully, the new Tax-Free Savings Accounts (TFSAs) Canadians will have by 2009 will help young Canadians take such a prudent approach to home ownership.

Whether the real estate market cracks before then remains to be seen.