Blessed by the Potato

Ellen Roseman had an article recently about a fellow with a visual impairment that ordered some speakers from their online store on sale, only to find out that the sale price was an “error”. Even though the speakers hadn’t shipped yet, they wouldn’t cancel the order, and told him that he had to return them in store in person, or ship them back at his expense. Then, when he called to complain about how difficult that would be for him, they told him to respond in writing.

Using her gift, Ellen helped get this particular issue resolved, and Future Shop has “noted a change to procedure for the call centre that would have escalated Mr. Klupsas’ case to a senior member of our escalations team, in order to determine a solution for the return based on accommodating his disability.”

This is entirely unsatisfactory in my eyes. How did it ever become policy that as a result of their pricing error, the customer has to ship the item back at their expense? Making an exception for people with disabilities in the call centre response tree is not getting to the root of the problem.

John Hempton said it best: “In many cases, the processes are as important as the outcome. Indeed, they are more important.” These processes need to be set up to encourage their employees and their organization to behave in ways that produce desirable outcomes. This sort of policy encourages pricing errors as a sales technique: slash prices, get people to buy the item, ship the item, then say “Whoops, that was a mistake” and force people to either return the item at their expense, or pay the full price. How many people do you need to trick into paying full price this way to make up for the shipping costs (and complaints line staff time) for the orders that do get shipped back?

Indeed, price errors appear endemic at Future Shop. From what I’ve observed I’d say that about 99.99% of their price changes execute properly — which sounds decent until you realize that that still leaves them with several major screwups per year. At what point does it go from a series of unfortunate errors to a strategy? Loblaws does even more prices changes per week than FS, yet has fewer pricing errors — and when they do screw up, they follow the scanning code of practice, so you still get your deal (or if the price error works against you, up to $10 off your misscanned item). In fact, Future Shop is a member of the voluntary organization that implemented the scanning code of practice, but doesn’t seem to feel the need to uphold their principle to “Visibly demonstrate retailer commitment to price accuracy” when it comes to their online store.

How automated is their online store, anyway? Is there a person who checks each order, akin to a cashier, before the confirmation email goes out? If not, why not? It’s not like the online prices are that much better than in-store, so the overhead should be there to hire that sort of person; it shouldn’t be very expensive, and it may pay them back in catching SNAFUs like this before they get out of hand. I mean, their entire online system isn’t automatic — there are all the phone reps, and someone has to be packaging and shipping in the warehouse, it can’t all be robotic yet (and if it is, I want to see it).

So, what policies can we set up that will demonstrate FS has a commitment to customer service, and not in being that sleazy guy who tries to change the price after the checkout is done, yet at the same time protects them from potentially having to sell two hundred Xboxes at a loss? What rules will align everyone’s interest? After all, the focus is on these sorts of structural problems after the financial meltdown.

Well, first off, you want to remove any way for them to profit from purposefully making price errors. So, remove the need for the customer to return the item at their expense. Since shipping is not instantaneous, refusing to sign should be enough (and again, I don’t know why Mr. Klupsas’ case was allowed to get as far as it did, regardless of his disability). And since shipping is not instantaneous, and your order confirmation is not (or shouldn’t be) instantaneous, there should only be so much opportunity for FS (or any online retailer) to renege on the deal. Someone over there should check the order before the confirmation is issued, and at that point, they’re locked in (if not, is it really a confirmation?). If a mistake is noticed, then the policy should be similar to the SCoP for bricks-and-mortar stores, but modified to fit FS’s big-ticket merchandise: you get the item at the mistaken price (assuming the price is lower than it should have been) or at cost, whichever is higher. Determining cost will have to be on the honour system, but the idea is to find that balance where FS doesn’t go bankrupt because they have fat fingers on the price change keypad, yet where they also don’t make money from screwing customers with bait-and-switch price errors.

My car has it’s first scratch :(

I have no idea how it happened, but just behind the rear passenger door is a small, curved scratch, about the length of my finger, and just deep enough to show the primer underneath. Now, my old car was covered in small scratches like that (well, maybe not enough to show the primer, but a common complaint about the Prius is how thin the paint is), maybe 3 dozen in total, which indicates that on average, one accumulates these small scratches at a rate of about one every four months, so to get one after a month isn’t too unusual, but I was hoping to go a little longer before having to deal with this…

I went to the Superstore today to get some sub buns, and also hope that they had restocked the bottles of Coke Zero that were on sale last week, but which they ran out of in the first day (so I have a rain check for them). I should also note that I’ve really wanted subs the last few days. I went on Wednesday and they did have some sub buns, but they were already a day or two old, and they’re only good for 2 or 3 days, so I figured I’d wait. I went back yesterday, and there were no sub buns, so I just got some pasta and cookies (which were on sale — a terrible idea I’ll get to in a bit. It should be illegal to make cookies that delicious that cheap). I’ve been eating a lot of pasta and soup and KD (by which I mean PC deluxe macaroni and cheese) because I haven’t been able to get sub stuff this week, and that’s a lot of pot washing and I was frankly getting sick of it.

So today, I’m there, and there’s no sub buns. What the fuck? I even went there kind of early (but not so early that I might have risked being there before the sub buns came out). They had fields of panini buns, but the panini buns don’t make particularly good sandwiches. I mean, you can put some garlic and cheese on them and throw that in the oven for a pretty decent garlic bread, but a sandwich? Nuh-uh. The RCSS here in London has the best sub buns — obviously I think highly of them if I went to the grocery store three days in a row to try to get some.

In the end I just grabbed 6 cases of Coke Zero and went on my way.

As I was explaining this on the phone to Wayfare, she asked “Why couldn’t you just get some wraps? You can put all the same stuff in it, and have wraps for lunch.”

And here’s the thing: on a scale of one to wraps, the best a wrap can ever hope to do is wrap. A sub, on the other hand, is like Chuck Norris round-house-kicking you in the mouth. It’s an awesome flavour parade that has incredible flexibility to be toasted, panini-pressed, or eaten just the way it is. Plus, the texture is just so much better: a wrap is basically just packaging for the sad little salad you’ve made yourself, whereas a sub bun is a major player in its own right (and Wayfare of all people should know that since she often has those sub buns all on their own without toppings). It’s an adventure into a mythical land of bready bubbles that you only get to swim in after crashing through that hint of a crust. And the RCSS sub buns are so good that, in my own home, I can make a sub that’s better than anything Subway or Mr. Sub can offer, that’s also healthier and less expensive. It’s just that variety of awesome that I was looking for, and was denied.

So at the bottom of the receipt was that invitation to go take a survey with them, and I was all like “Yarrr! I’m-a gonna give your bakery manager guy a bad review and let you know how very disappointed I was about my three trips specifically to get your sub buns that ended in disappointment!” Yet much to my surprise there was no comment field at all where I could start ranting at these clowns, so I had to settle for putting down “very unsatisfied” with the bakery department and hope they figure it out.

Then it was time to work on reanalysis. People don’t understand the importance of the re in research. There’s a lot of re going on.

So as I’m analyzing I’m feeling you know, a little stressed, a little dumb, a little bored even, and I’m trying to focus and not make mistakes and most importantly just get it done.

Then I started to wonder: what if I become an evil mad scientist when I get my PhD? Would my effort to hurry up and finish actually be to the detriment of mankind? Would my mind-controlled zombie minions overthrow the world hegemon we suffer under today, only to replace it with an iron-fisted rule of my own making that was even worse for the everyman? Perhaps procrastination is the only thing standing between my genius maniacal lust for power, and the safety of all living things?

No, no, that’s just the procrastination talking, back to work.

Now, as a scientist, I can recognize a pattern. Mostly. Anyhow, when I last finished a graduate degree, I got really, really fat. I was really, really sick through a lot of that too, so I have excuses and doctor’s notes and what-not, but the fact of the matter is that I gained 40 pounds in a really short, intensely stressful period of time, and despite my (best isn’t the word I’m looking for here, so let’s say:) incredibly average efforts, I only ever managed to lose 10 of those (many of which, I gained back this winter). I did get in much better cardiovascular shape, which I’m moderately proud of, but it’s still been a long-term goal to get back to my mid-MSc weight. I consider it a bloody miracle of self-control that I haven’t turned into a minor planetoid and haven’t even re-crossed that high water mark, so feel free to leave me encouraging accolades in the comments section, but nonetheless under normal* amounts of stress I haven’t made much progress, so I’ve decided that I have to be especially careful as I get into the intense writing-up-and-defending portion of this degree. So I’m thinking about what kind of exercise regime I should try to set up to stay in shape and how strict of a diet I should attempt to stick to, all while I’m doing analysis. I’m even starting to think about how awesome I’ll look as a slimmer Dr. Potato.

Of course, as I’m doing said analysis, I’ve got the box of on-sale cookies beside me, nomming away as I edit these files. It’s just go-go-go-go-go over here, I’m totally in the zone, backspace backspace, add 5, retypte, nom nom, down two lines… next thing I know it’s 1 am and I realize I haven’t had a meal for like 12 hours and I’m not the slightest bit hungry.

Then I realize I just ate nearly 400 g of cookies, roughly 1900 calories worth, while I was doing my thing. Damnit, this “watch what you eat during the high stress time” is going really, really poorly to start with.

Wayfare’s on the phone and I’m relating my day to her, and wondering if I should maybe go throw up a little because that surely can’t be good for me. Except that I worry that that may be the first step to a rather serious eating disorder. “Oh, it’s no surprise you feel sick if you ate almost a pound of cookies!” she says.

No, no, I don’t feel sick at all. I feel abso-frigging-fan-tastic. Think about eating a cookie or a half dozen cookies. You feel pretty good, right? They’re cookies, you had some, life is good, the universe is far more balanced with the cookies inside you rather than inside that stupid box where they weren’t doing anybody any good.

Now think about how good you’d feel if you had 72 cookies.

Yeah, it’s a party in your mouth, and your brain’s all tingly on the glucose and happy hormones. For the short-term, there is absolutely nothing wrong with this scenario. You could race a goddamned horse and ride a tiger into battle and analyze the ever loving hell out of some data. YEAAAAH!

“You don’t feel sick to your stomach at all?” she asks.

“No,” I say, apparently really quickly, like one of the Gilmore girls, though it really doesn’t sound all that fast to me, “I’ve been trained from a very young age to be able to digest intense amounts of junk food. I’m like a samarai, or a cookie ninja, just that kind of lifelong, total dedication to intense training that produces a level of total awesomeness that’s hard to look at directly. I mean, if the Stay Puft Marshmallow Man from Ghostbusters were to come into our plane of existence and try any shit in this day and age, let me tell you, I’d handle that situation. That’s the kind of digestive system I have going here.” I’m sure you’ve seen examples of it elsewhere: my supervisor has been eating so many hot peppers over his lifetime that at this point he can basically consume fire. I’m like that, but for sugar and starches.

She giggles for a bit “Oh, I wish I was recording this right now.”

Anyway, on the subject of talking to Wayfare via the phone, the other night she says to me “How is it we’ve been going out for almost 9 years and I never knew you could draw??”

“I what? I still don’t know that I can draw, what are you talking about?”

“Your post, you drew! I’ve never seen you draw before!”

“That? That’s not drawing, it’s just a quick sketch, and it’s not very good. I’d do stick-people, but then I’d be ripping off Randall Monroe.”

“It’s pure great! It even kind of looks like you!”

“Ooookaaaaay.”

Finally, “disappointment” is a funny word. You’re never appointed with something, are you? I mean, you can be appointed to something, or appoint a room with some froody furnishings, or have an appointment for a colonoscopy, which you can then be disappointed in, but it’s really not the same thing.

* normal for graduate school, which is intense for all you sonsofbitches in the “real world” who think you have it so much tougher just because you can get fired at any time and have to be “productive” and pay taxes and don’t get to play frisbee on Wednesday afternoons just because it’s so fucking gorgeous outside that it really is a sin to stay in and look at the computer screen when spring is in the air…

I went to bed last “night” at about 5 am. I have no idea why I do that sometimes. Way back in the day, when I used to pound back Jolt colas daily just because my heart had gotten so used to the constant caffeine bath that it would stop a little here and there without it, I used to stay up all night sometimes because the workload in UofT physics was a little insane sometimes. Even on my days off through the summer I’d stay up until about dawn, with the appearance of the ball of fire in the sky a serving as my reminder* to go to bed. I was my most productive after midnight, getting all kinds of stuff done on crazy timetables. Lately, however, my most productive time seems to have shifted a few hours earlier, to about 9 pm - 2 am. Anything after 3 am is a waste these days, nothing gets done. I sometimes wonder if I fall asleep in my chair, since last night I didn’t get a single thing done (not one sentence written, and I didn’t even watch more TV!) after about 3 am. I have no idea where the two hours between when I stopped working/reading/watching TV and when I actually climbed into bed went.

They certainly weren’t spent cleaning.

Anyhow, so tonight I have to go to bed substantially earlier because I have a meeting at 9 am tomorrow. I had my dinner and everything, and was in bed by about 11:30. Not too shabby.

Then a little after midnight I find I have to go pee. So I untuck all my covers, stumble out to the bathroom, and do my thing. Three minutes later, I have to go again. Ok, fine, off we go. I don’t even get my breathing settled and my hands re-warmed after crawling back into bed before I have to go a third time. Sighing at myself, I stumble back out to the washroom… and there’s nothing left.

“Ok,” I say, actually out loud, which seemed a lot less crazy when my cat was around and I could talk out loud to her “fuck you body, I’m going to go surf the internet until you make up your mind and let me sleep.” So I go off to see if John Hempton’s got anything new for me, since he’s wide awake on purpose down in Australia time. Sure enough, he’s got short post up about Jim the Realtor and some funny business in house pricing. I watch the video, and man, somebody take Jim’s video camera away. I have no idea how video blogging became such a “thing”. Audio podcasts I find annoying enough that I subscribe to exactly zero, but I can at least see the utility of being able to consume them in an environment away from the computer (e.g., on the train). But most video bloggers are not using the medium very effectively. Take Jim the Realtor’s post there: 9 minutes to get to the point. Nine, monotonous, hand held shaky, minutes. We would all have been better served by Jim trading in the video camera for a still camera and a keyboard. We could have skimmed through the comparables with their pictures and gotten to the point in about a minute (depending on your reading speed) and wouldn’t have had to listen to him talk.

Anyhow, that’s 10 minutes gone, and I’m starting to return to normal, so I decide to finally finish an idea for a post I had last week. I had a presentation and wore a shirt with buttons on it (and a collar!) which is pretty fancy attire for a grad student. After my presentation, another student commented on my dress-up day: “You know, you look so much better when you put some effort into dressing up! People say that your whole outlook and attitude is shaped by what you wear, and if you dress for success you may find it. You should wear a power suit on Monday!” And of course, this is what went through my head:

* - Seriously, I just forget to go to bed sometimes — my tired reflex is broken. I used to forget to eat sometimes for 12 or 14 hours at a time too, but now I’m fat and can only wish dieting was that easy.

Peter Watts was found guilty for obstructing an officer. All he did was get out of his car during a search and ask what the problem was. For that he was beaten, maced, and to add insult to injury, sent back to Canada in December without his winter jacket. As if all that wasn’t punishment enough, a court has now also convicted him for obstructing an officer — a crime that can apply to such heinous acts as questioning an officer, or not complying with an order quickly enough (and here noncompliance can include asking “why?” when an officer orders you to the freezing pavement in December).

There was some half-joking talk here of boycotting some travel to the US because of how crazy the border had become. Now the next time we have a conference in the states, I think it will be a serious consideration.

American border guard: get your heads out of your asses.

Spring is in the air, and the flu season is pretty much over. Colds are a different matter: everyone I know seems to have caught this nasty cold that’s going around. I’ve been fighting it myself for almost 3 weeks now: I’ll be miserably sick for a day or two, then feel almost all better for a few days, just to have it sneak back up on me again when I’m not looking.

The H1N1 seems to have burned itself out in North America, and indeed it’s been months since I’ve even heard it mentioned on the news. Steven Novella over at the Neurologica blog provides an update of how it played out in the US. I believe the numbers for Canada are similar, but I haven’t gone to look them up yet. What’s interesting is that we were hit quite hard here in London with it, very early on in the flu season, but then it fizzled out shortly after the vaccination program/holidays. I can’t say whether it’s because the vaccination (and hand hygiene) program was so effective, or if it would have gone away on its own… but either way, it wasn’t all that bad. What’s interesting is that the normal seasonal flu didn’t look to be as bad this year for us too.

Now I expect people will start to second-guess the vaccination program, since there was so much hand-wringing about it to begin with. I’m still not really convinced H1N1 was “overhyped” that much — it did look like it had the potential to be quite serious, and based on the information I had at the time, I don’t regret at all getting the shot myself.

I took a look at Zenn Motor Company (ZNN on the toronto venture exchange) and it looks pretty bad, maybe bad enough to short.

They’re a company that produced what are basically glorified golf carts (low speed electric vehicles). Their plant is in Quebec, so they were a bit of a Canadian success story for a while, except that they couldn’t quite turn a profit, and Canada wouldn’t license their cars to be used on our roads.

Now they’re going to shut down their manufacturing business and become a “solutions provider” — try to sell their electric drivetrain to a larger OEM. Makes sense since they’ve been burning through their pile of cash and their prospects haven’t been improving much. Except almost all the major car companies already have home-grown electric car divisions, so I can’t see this strategy actually working for them, especially since their drivetrain was fairly unremarkable.

The one thing they do have is an interest in EEStor, a private company developing a “revolutionary” energy storage system for electric cars. Zenn owns 10% of EEStor and has exclusive rights to distribute the EEStor capacitors for automotive use.

Tangible book value of ~$0.30/sh, and ZNN is trading at ~$2.50, so people are basically paying $2.20 for that piece of EEStor.

Now EEStor may have something that works as claimed — supposedly someone at Lockheed-Martin got to look at a prototype, but they haven’t been too open about what they have yet. More importantly, they claim that their capacitors can be produced cheaply, which has yet to be demonstrated. Production was supposed to have started in mid-2008 originally, and here we are into 2010 and we have yet to see the first unit.

I seriously suspect EEStor is just smoke-and-mirrors, and was considering putting my money where my mouth is on that front by setting up a short on Zenn.

Unfortunately on the off chance that they do have something real a short could go quite badly. Also, since Zenn has essentially no debt to speak of, there’s no near-term default-type event to push them down, so we could be right but still lose money if it takes years for them to finally burn through their cash and hit zero.

It looks like a case where the short thesis could be completely right: the company may be worthless in the long run, and EEStor’s long-awaited technology may not be competitive with what the big players have developed in-house for batteries if it ever comes out at all… but you still couldn’t make money off the short since the stock is all hype, and more empty promises from EEStor could send the stock to the moon between now and when it does finally hit zero.

The Globe and Mail looks to have been taken in by a perpetual motion machine type scammer in today’s article “Texas university has eureka moment for coal-to-gas”.

I’m not saying that there’s necessarily anything wrong with the main topic of the article: it is possible to make gasoline or other liquid fuels from coal, and researchers in Texas may have found a way to do so economically. What I take issue with are these lines:

“Far better, he said, to capture CO{-2} right at power plants and convert it into crude on the spot. ” … “Assuming, arbitrarily for the moment, that Texas has struck oil in a huge way yet again, UTA’s announcement shows that energy research has finally begun to move in the right direction - simultaneously toward clean coal and the commercial exploitation of carbon dioxide. The reasons are obvious. The world has enough coal reserves to last for centuries. And it has enough CO{-2} - used as an abundant new raw material - to last forever. Harnessed together, this cheap coal and this greenhouse gas could drive the global economy for hundreds of years. “

Carbon dioxide is the product of burning fossil fuels. You have some energy-carrying molecule, you release the energy, and you get carbon dioxide. In order to take carbon dioxide and turn it back into an energy-carrying molecule (oil, coal, sugar, whatever), you have to have a source of energy to get the energy back into the system. For biofuels, this reaction takes place inside plants using energy from the sun. To think that you can simply take the carbon dioxide from a power plant and convert it to crude on the spot is ludicrous — akin to the perpetual-motion machine ideas like putting a windmill on your car.

On top of that, it doesn’t sound like much of a breakthrough: a tonne of coal has something like 15 GJ of energy. To turn that into 1.5 barrels of oil would reduce that to something like 9 GJ of energy, and only about 25% of the mass. Where has the other 1500 lbs of coal gone? Probably used up to supply the energy for the conversion, and out as carbon dioxide. It may be economical (due to the cheap price of coal vs oil), but it’s not particularly green or efficient. Except for rare cases where liquid fuels are needed for range (or where you need to keep the tanks in the blitzkrieg rolling, no matter how much of your total energy reserves it eats up), for transportation purposes it would be far better to burn the coal to make electricity, and then use electrified transportation, than to convert it to gasoline at that kind of conversion ratio.

Update: I contacted Mr. Reynolds at the Globe to inform him that something wasn’t right in his article. He provided me with the original source, which still is missing that key ingredient of how this isn’t just a perpetual motion machine:

“Though refining the technology for converting coal and oil shales to oil is a CREST priority, converting smokestack carbon dioxide to hydrocarbon fuels is also high on the research list.

“The idea that we can dispose of massive quantities of greenhouse gases like CO2 by piping them underground or into the oceans is not very practical,” Rajeshwar says. Better to capture carbon dioxide at power plants and cement plants, convert it to carbon monoxide and then add hydrogen from a renewable source like the water trapped inside lignite coal to make what’s called syngas.

“What’s produced is a liquid hydrocarbon fuel—synthetic oil—from which we can then make any conventional fuel, like gasoline or diesel,” Rajeshwar says. “The oil produced is very similar to that produced from coal.”

These are not the only ideas making the rounds at CREST. Others abound but are not as advanced.

“This is not hypothetical academia,” Billo says. “What we’re doing here is producing real solutions to this country acquiring sustainable and affordable energy.”

And what a St. Patrick’s day it was.

I locked myself out of the house today, what must be the first time ever in my life that’s happened. My new place has these stupid locks that automatically lock when the door closes (except at the cottage I’ve always lived with deadbolts where you need the key to lock the door, so it’s impossible to lock yourself out). I left my cell phone and my wallet inside as well.

Fortunately, a friend has a key to my place and could let me in later on in the evening… but going out with my friends was going to prove to be a challenge without ID or money. That’s when the luck o’ the Irish came into play. On Monday my new license arrived in the mail, which I picked up as I was walking to work. So I had opened it there, and left my old license in my desk drawer at work. Boom, ID, I could get into a bar.

Money was then not such a big issue: I could borrow from friends, or, as it turned out, get some from work since I had reimbursed a subject out of my own pocket yesterday, and was able to get paid back in cash today.

The biggest challenge turned out to be the lack of a cell phone for coordinating with my peeps. I got myself locked out because I was running out of the house in a big rush to do something at work… so I was at work while my friends were starting the day-long liver killing festival. I was supposed to meet them at Mike’s house. They knew I didn’t have my cell phone and would be just a little late… yet they left without me for the bar, but I didn’t know which bar.

Ah-ha! I remembered that Mike’s apartment intercom/buzzer system called his cell phone (since he doesn’t have a landline), so I just buzzed him that way. Unfortunately, he couldn’t hear me and just told the intercom that he wasn’t home (”I know that” I shouted in his lobby “but WHERE are you?”). He buzzed the door for me and hung up.

So much for that plan. Luck struck again though when another member of our group walked by on the street and told me where to go to find them.

Then it was us against the crowds. London’s a student town, and the weather was awesome today, so even though St. Paddy’s day fell on a Wednesday, there were lineups at all the bars. To try to avoid that, we went to one of the smaller ones away from Richmond St., and even they had a lineup. So Mike, like a ninja, goes and sneaks in the fire exit in the back. The place was nowhere near full, but they were being really anal about capacity (even though no other bar in the city was)… so without too much guilt, other members of our party start sneaking in. But with such a small place, they quickly found the ninjas out and kicked them out. In the frustration of being kicked out of a bar that they were behaving civilly in and paying good money for beer, one of Mike’s friends swiped a funny St. Patrick’s day hat (which I now have).

Anyway, it was a fairly crazy day. I feel like such a kid for all the shenanigans. I mean, I’m an old-ass man. I shouldn’t be locking myself out of the house, hiking around town without money or ID, let alone sneaking into crappy London bars on green beer day. But there you have it. Despite the disastrous start, it didn’t turn out to be all that bad a day in the end.

Hat tip to Jonathan Chevreau’s recent blog post: “Younger folk aged 18 to 24 are leading the charge, with those “very likely to buy” almost doubling to 15% from 8% per in 2009.

This is one of the signs of the end stages of the housing bubble.

Low/no downpayments allow people to buy earlier and earlier in their lives, stealing demand from the future, and driving up prices in the present. Skyrocketing prices convince people to buy now or be priced out forever. But there is a limit to it all, unless we start selling houses to children. Home ownership rates are at ~70%, and here we have 15% of people in the youngest (least home-owning) age bracket planning to buy (more than that, actually, since there’s another bunch in the “likely to buy” category below “very likely”), and presumably ~8% who bought over the last year. Won’t take too much more robbing of the cradle here before we run out of ways to bring demand up and hit a wall when high school students can’t join in bidding wars.

That is of course assuming that tightening of interest rates doesn’t do the job first (and now most bank economists are calling for that to happen before the end of the year).

I’ve been bearish on real estate for going on 3+ years now, and I’ve been hesitant to get too excited about the correction that I know must be coming because real estate moves in long, slow cycles. It’ll be years before the time to buy (the undershoot) finally arrives… plus, I get in trouble for being “optimistically bearish” from people with house lust that I’ve convinced to hold off (”the market’s up 20% this year! We could have bought last year, damn you!”). Nonetheless, I can’t help but feel that the stars are aligning for this nonsense to finally end.

Flaherty brought in some rules that I thought would be fairly minor tightenings to the mortgage market. Real basic, common sense tweaks, like that banks shouldn’t give someone all the money they can borrow at today’s rock-bottom rates, but instead have to qualify people on the still-low 5-year rate. I didn’t think there’d be anyone walking that close to the bleeding edge of affordability, but apparently CIBC is forecasting that this rule alone will have a ~5% impact on the mortgage market (hat tip: Canadian Mortgage Trends). The new rules also require a 20% downpayment for non-principal residences, which should help reduce the speculation out there.

Canadian Business had an article this week on “Why Buying a House is a Bad Investment”. Despite the title, it’s not nearly as bearish as I am, though that may be because they’re talking about “Canadian housing”, which is a tough concept, because the market in London and Charlottetown is vastly different than Vancouver or Toronto.

Even some realtors are starting to think that there may be, possibly, just the teenist whiff of a bubble happening, despite their inherent bias towards believing that real estate prices will always go up.

So I think the end is finally arriving (well, the end did arrive in the fall of ‘08, but low interest rates drove it back for an age), and I can start to make some prognostications. Time may prove me wrong, but time’s a bitch like that. I predict that by the end of the year rates will begin moving back up as the need for the emergency stimulus eases and inflation returns. The real estate market will stall around midsummer; by this time next year, it will be clear that the market momentum is down, and by the fall of 2011, the media should start picking up on the slide. Since real estate moves in slow cycles you probably won’t find a decent time to buy until late 2013 (rent-to-buy of <150X), with the final bottom coming somewhere around 2016. For Toronto, top-to-bottom, my crystal ball says we’ll see a 35% drop — still about 10-15% above the 1996 trough in real terms, but a real kick in the nards for anyone that bought in the last few years.

These prophecies of doom are for entertainment only of course, and I’ll be changing my opinions as new data emerges… but now you know what I’m thinking.

In other eschatological news, Netbug has cancelled his World of Warcraft subscription. The end times, they are nigh.