The new normal

KID modified

So didn’t I tell you this would be a boffo week to take your dog to Cuba? Any doubt of that should have been erased on Wednesday when all hell broke loose, as more or less predicted.

Oil futures collapsed almost 7%, taking crude down to $26.50 – the lowest price since 2003, when most Millennials here were still harvesting zits. There hasn’t been this big an oversupply in 80 years, which should tell you why Canadian companies like Husky are again slashing their capex (capital expenditure) budgets. Our oil’s expensive to produce and considered ‘dirty’ by the tree-huggers who increasingly run America, our biggest customer for the stuff.

But mostly, there’s too much crude in the world. So much for peak oil.

SUPPLY-DEMAND

Stocks markets fall along with energy, with the biggest rout on Wall Street in five months. The Dow, S&P and tech-heavy Nasdaq all cratered – until something interesting happened. After shedding more than 500 points, the Dow rebounded, while the Nasdaq was able to erase a 3.7% freefall.

Huh?

The tinfoil crowd around here will claim the mostly-mythical Plunge Protection Team was behind the dramatic rescue (the Dow regained more than half is lost turf). But it’s a lot simpler than that. We hit bottom – at least during the session. The decline was too far, and too fast. All of a sudden, stuff started looking cheap. Or simply more affordable.

A few months ago the S&P index was at a level equal to 18 times the earnings of its member companies. Not crazy expensive compared to some previous periods, but well above the long-term average of 14.9 times. In fact, the market was trading at a 17% premium to the norm. So what happened today? You guessed it – the index retreated back to its historic average, which made everything look a lot less scary.

PE RATIO

Timing the market is a losing game for just about everybody, especially in a world where high-frequency trading means the retail investor is at a structural disadvantage. (One more reason not to own individual stocks.) But logic tells us that with the US economy still growing, throwing off record job numbers, entering into a Presidential election year, with consumers using cheap gas savings to buy record numbers of SUVs and pickups, that this is no 2008. Not even close.

As for Canada, however, the bottom is probably still down there somewhere. Oil could in fact drop to $20 – a prediction made months ago by the high-salary dudes at Goldman Sachs. That is well below the cost of extraction for most oil sands producers, which will mean the cancellation of more new projects and the layoff of lots more people. In fact, on Monday BuildForce Canada estimated 31,000 jobs will be lost in construction alone in Alberta.

Now, against this tapestry of Canuckistan misery, our central bank did the right thing Wednesday by not dropping its key rate. After all, the last two cuts did little other than to pulverize the dollar, give us $8 cauliflower and make the moisters wild for condos. Household debt has swelled considerably since Governor Poloz diddled with rates, and our currency is worth about a third less. The loonie is among the worst-performing currencies in the world, and if Goldman is right it will continue to fall without any extra help from Ottawa.

The caution here? Do not underestimate the negative momentum of our economy. Sure, oil will rebound, which should be no issue if you have a 80-year investment horizon.

Finally, just so you understand financial guys also bleed when they’re cut, let me share with you part of an internal memo send to the surviving employees of Bay Street’s GMP Capital earlier this week. In it CEO Harris Fricker detailed why the company was ending operations in the UK and Australia and punting people here and in the US, reducing its headcount by 27%.

This is a paragraph for the ages:

“Adversity brings with it clarity. And clarity provides the most viable perspective from which to address adversity. The very clear message to you today is that you are an important part of the future of this firm. That said, each of you have to ask yourselves if you still have the will to compete in this industry and, just as importantly, on this platform. Have the courage to answer honestly. There are easier paths to pursue and much easier places at which to pursue them. If this is not what you truly want and where you want to be, you simply will not survive the new normal in our industry or at our firm.”

As goes Alberta, so leans the nation. Embrace that.

295 comments ↓

#1 zedgt87 on 01.20.16 at 6:31 pm

FIRST!

Boom shakalaka, its just a little dip!

#2 wallflower on 01.20.16 at 6:33 pm

As usual, Garth’s comment cracked me up the other day; pithy words with link provided regarding The Order of Canada and this got me thinking… someone SHOULD nominate this contributor to a better Canada because
[1] his blog is likely the longest surviving and serving Canadian financial source that runs advertising free
[2] his information is relevant and useful to all ages of folk who read and think
[3] many have been enlightened
[4] dogs are people, too

#3 furst on 01.20.16 at 6:37 pm

fuuuuuurst

#4 Cheese on 01.20.16 at 6:37 pm

First?

#5 common sense on 01.20.16 at 6:38 pm

Now THAT is a memo for the ages… Whew.

Today’s ride was better than most roller coasters..

Tomorrow?

#6 Rick on 01.20.16 at 6:43 pm

So, what is a good ETF that tracks oil? Gotta be near the bottom. Might drop a dime on it.

#7 Marcus on 01.20.16 at 6:45 pm

Prediction USA: Total 50% loss in stock valuations from the high. 40% loss in real estate valuations and a loss of 30% of the value of American savings by the end of 2017.

#8 Cheese on 01.20.16 at 6:46 pm

For those with a very long investment horizon, what ETF’s are recommended?. Personally I invest in VXC, but with the large drop in energy ETFs; such as ENY Guggenheim, they begin to look like decent long term purchases.

#9 For those about to flop... on 01.20.16 at 6:47 pm

Finally, just so you understand financial guys also bleed when they’re cut, let me share with you part of an internal memo send to the surviving employees of Bay Street’s GMP Capital earlier this week. In it CEO Harris Fricker detailed why the company was ending operations in the UK and Australia and punting people here and in the US, reducing its headcount by 27%.

This is a paragraph for the ages:

“Adversity brings with it clarity. And clarity provides the most viable perspective from which to address adversity. The very clear message to you today is that you are an important part of the future of this firm. That said, each of you have to ask yourselves if you still have the will to compete in this industry and, just as importantly, on this platform. Have the courage to answer honestly. There are easier paths to pursue and much easier places at which to pursue them. If this is not what you truly want and where you want to be, you simply will not survive the new normal in our industry or at our firm.”

////////////////////////////////
Are you sure the guys name is Mr Fricker?
That’s not what I overheard one guy calling him…

M41BC

#10 Brazil ex-pat on 01.20.16 at 6:47 pm

Peak Oil busted – check

Global Warming busted – next on the list

#11 ShawnG in TO on 01.20.16 at 6:47 pm

wonder if Smoky is coming today. Probably a few more makeout sessions with his JD

#12 Jimmy on 01.20.16 at 6:47 pm

Diversity!
First!

#13 tundra pete on 01.20.16 at 6:50 pm

Poloz looked like the pencil necked geek that he is standing there today although he made the right call. Most likely threatened early this morning by T2 from Davos. “Make me proud you dork or no more selfies for you”. More likely he probably had “Guido and Sid” surveilling him from an old caddy and following him to the bank this morning.

What a major catastrophe in the works for many an investor. I however am giddy at the thought of vultching. Can’t wait. Just a little longer now. Waiting. Waiting………..

#14 "They're All Gonna Laugh At You" on 01.20.16 at 6:50 pm

‘logic’ and ‘markets’ in the same post, haha, that’s a good one…

looks to me like the markets are sending Davos a message….

I wonder if Janet will eventually blink?

as to the turn, I think it was aliens with a big magnet….

#15 Bobs ur uncle on 01.20.16 at 6:50 pm

I just surf the waves up and down and neither sell nor buy (other than regular automatic purchases taken out of my bank account before I can spend it).

This too shall pass.

#16 prairie person on 01.20.16 at 6:51 pm

The guy who wrote that memo thinks he’s the hero in a Hollywood movie.

#17 Smartalox on 01.20.16 at 6:51 pm

Wow. If a ‘survivor’ at that firm reads that memo, and decides to continue working there, can that be considered acceptance of those aggressive, take it or leave it ‘terms’?

It seems to me that having ‘what it takes’ or ‘the will to compete’ is code for ‘the will to endure backstabbing to get ahead and psychopathic bullying’.

#18 Darren on 01.20.16 at 6:51 pm

I think Save on Foods is trying to start a riot tomorrow here in YXC. $3.99 cauliflower!

#19 S.Bby on 01.20.16 at 6:52 pm

Good grief, will the nightmare never end?

https://www.shelfies.com/products/dreamy-trudeau-sweater

#20 not 1st on 01.20.16 at 6:53 pm

Sounds like the speech from glen garry glen ross;

“The good news is all of you are fired, the bad news is you all have one week to earn back your job”

cold..very cold

#21 Glenn on 01.20.16 at 6:53 pm

Excuse me?

‘There hasn’t been this big an oversupply in 80 years, which should tell you why Canadian companies like Husky are again slashing their capex…’

The level of oversupply is actually quite small relative to 1980 which was only 36 years ago.

Current oversupply is around 2 million BBL/D which isn’t large. In 1980 oversupply was close to 10 million BBL/D in 1980s, mostly from OPEC.

#22 lala on 01.20.16 at 6:54 pm

Gold up as well, again, in case you forgot about it.

#23 Brian Ripley on 01.20.16 at 6:54 pm

“BuildForce Canada estimated 31,000 jobs will be lost in construction alone in Alberta.”

Fortunately Alberta is still leagues above the rest of Canada when it comes to per capita earnings:

My earnings chart: http://www.chpc.biz/earnings-employment.html

Average employment earnings in Alberta are:
18% above Ontario,
19% above the national Canadian average,
25% above BC and
29% above Quebec (no typo).

In relationship to increases in SFD prices; in the last 10 years average SFD Prices & Family Income are up:
SFD up 120% in Vancouver & earnings 30% in BC
SFD 75% in Calgary & earnings 48% in AB
SFD 103% in Toronto & earnings 29% in ON

If the Liberals produce a smart fiscal spending plan (in March-April when the budget comes down?), households will be benefactors eventually because in Canada, federal government spending equals private sector savings in a negative trade environment.

#24 ROCK BEATS PAPER on 01.20.16 at 6:55 pm

Yeah,

There was a bounce, led by energy and gold stocks. All the dividend paying stuff still sucked…banks, REITs, telecom…oh and PREFs.

Garth what was it like 80 years ago in 1936, 1937. Oh yeah, there was QE and extremely low rates then too…

Were you calling for $20 oil when everyone was called peak oil. You should be a contrarian now.

#25 Deb on 01.20.16 at 6:57 pm

Inordinate fear has overcome fundamentals, and the markets are oversold. Oil and our limping loonie, in particular, have not yet hit the absolute bottom.
But for each, there is clearly far more upside now than downside.

For me, I’ve done nothing with the 2016 TFSA contribution, until today. Did some nibbling with some savings, and added to equities in Canadian and hedged US and global positions, while staying focused on the long-term plan.

#26 Oakville Owner on 01.20.16 at 6:58 pm

$8 cauliflower? Sure prices are up but there is an easy way to keep the grocery bill in check! Be sure to download the “Flipp” app and shop at a store that does price matching. Flipp makes it easy and convenient without having to lug around flyers etc. Family enjoyed our $2.50 cauliflower tonight!

#27 Philburt on 01.20.16 at 7:00 pm

I just had a look at my fav Hedge fund manager…..
Why is me my fav…..18 yrs of + 10-25%….
Says ALBERTA is going to get WAY WORSE..
2016- Commodities…..not coming back…..
I mention oil earlier….yes a good buying opp in shares coming for a 50% pop…..THEN SELL…Sort
Loonie….by by…..Not much going for this ship of fools.
T2 just took the helm of the Titanic.
Just look at the demographics. Who’s getting the bill for this tidal wave?
No rainy day fund…What a bunch of idiots. They couldn’t run a lemon-aid stand.
T2 was just on the news. HAHAHAHAHAHA
He doesn’t have a clue…..

#28 Dave on 01.20.16 at 7:02 pm

So, my wife the other days goes and buys two heads of cauliflower from the grocery store.

Yes, TWO.

I get home and they’re all chopped up nicely into pieces and being scorched by the broiler in the oven.

I just about had a heart attack. I caught myself before saying, “Woman, what are you doing? Two cauliflowers being broiled in the oven. We need to save money and purchase prime ribs and filets”.

I’m telling you, this is awkward..and has put a strain on our marriage. I think it might require marriage counseling and at the very least, a course on money management and budgeting.

One just cannot be flashing the cash in public buying numerous heads of cauliflower…goodness knows who’s watching.

I’m even tempted to trade the gold in for the organic white stuff…it’s pretty near the same cost per ounce. And it’ll feed you…and you can grow it. Not as much can be said for the “gold” Barrick fishes out of the ground.

And so hail the new tulip revolution…let us drink oil and eat gold…good days are upon us…

#29 rainclouds on 01.20.16 at 7:03 pm

A.K.A. “time to decide if You are on the bus or off it”

Little Jack Welch would be so proud………….

Will the Frikster be taking a salary cut? Didn’t think so….

#30 Mark on 01.20.16 at 7:05 pm

“Fortunately Alberta is still leagues above the rest of Canada when it comes to per capita earnings:”

For how long though? Reduce the wages of Albertans to straight time (instead of 1.5X-2X overtime), and reduce their hours those more typical of Ontario, and Alberta gross earnings probably would be even less than Ontario as hourly rates for most trades and professionals are generally lower in Alberta than they are in Ontario. Net would probably still be higher, but that’s on account of the lower tax environment that is likely to persist in Alberta.

households will be benefactors eventually because in Canada,

In the short term, sure, but if there’s an acceleration of public sector credit, then private sector credit will cost more. Truncating an economic recovery which most likely, this time around, will necessarily require leadership from the non-O&G, non-FIRE, non-FIRE-correlated private sector.

I don’t oppose federal government spending money on infrastructure in the areas that are clearly their defined areas of responsibility. But I really don’t believe they’ll get very good bang for their buck if they start throwing money around like drunken sailors on infrastructure or activities that aren’t strictly their immediate responsibility. The Harper home renovation tax credit was a disastrous example of federal government spending that accomplished nothing for the economy.

#31 Victoria Real Estate Update on 01.20.16 at 7:05 pm

The economic difficulty that Canada is facing now has a lot to do with sky-high bubble level house prices. It makes the cost of producing goods or extracting oil far too high to be competitive on the world stage.

Since 2000, housing bubble-blowing policy has been in effect. This has had disastrous effects on the jobs front in Canada that we are seeing now and will be seeing a lot more of in the future.

Housing bubbles are bad for any country. Canada is no exception.

That policy makers deny that a housing bubble exists is simply more of the same attitude that brought about Canada’s enormous housing bubble in the first place.

The US housing bubble had to deflate before their economy could grow new roots and improve as much as it has in recent years.

Canada’s economy requires the same remedy.

There is no example of a national housing bubble that didn’t deflate. All examples of bubbles deflating came with major (3 to 6 year) housing price corrections. In all cases the economy of the country was negatively affected. It will be no different in Canada.

In 2008-09 several Canadian housing markets were in correction mode. Canada chose to reinflate the bubble at that point.

The move kicked Canada’s economic problems down the road, but didn’t solve anything. Now we are seeing the future economic problems that were guaranteed by the decision to reinflate the housing bubble in 2008-09.

Today’s weak economy should be no surprise. You can’t solve the economic problems of a country with a housing bubble brought on by allowing people with no money to bid up house prices through lax lending standards and record low interest rates. It hasn’t worked for any country in the past and it obviously isn’t working for Canada now.

Canada’s economic problems will worsen. House prices will fall. These things can’t be avoided.

#32 Almost Retired on 01.20.16 at 7:07 pm

A little less than 3 years ago the preferred share etf CPD was trading at $17. Now $11 – a 35% hit. It currently has a yield of 5.89%.

If the yield on this was absolutely correlated to the share price, the yield back when it traded near $17 would have been 8%. I can tell you it wasn’t – not even close.

Obviously, there is more to it’s drop than just purely an environment of low rates or the fear of lower rates. So what is it? Obviously the reset rates are affecting it a lot more than interest rates.

Those of us who bought at $17 will probably never see it pop back to that level.

#33 bdy sktn on 01.20.16 at 7:08 pm

Meanwhile back in 604 madness continues. Friendly realtor knocks on door with sheet from next block. ask 1.3. Sold 1.36 for a 25 foot lot. These were under a million 12 months ago.

#34 Jeff on 01.20.16 at 7:10 pm

Garth, you mention the “mostly-mythical Plunge Protection Team”….is it real? would it be possible to keep it hidden to maintain confidence in the markets?

just curious

#35 Mark on 01.20.16 at 7:11 pm

” After all, the last two cuts did little other than to pulverize the dollar, give us $8 cauliflower and make the moisters wild for condos.”

Now, now. Correlation isn’t causality. $8 cauliflowers (wasn’t it $7 the other day) was a short-term exaggeration caused by production issues in the US, not because of currency depreciation. And condo prices have stagnated over the past few years as the first timers have been locked out on account of tightening financing conditions.

The first two cuts did however help prevent the economy from slipping into deflation on account of the falling prices of housing and a reduction in activity relating to the same. If the CAD/USD pair had remained at the same levels as last year, there should be no doubt that the CPI print today would be negative and the BoC would be revealed as being impotent in protecting Canada from the scourge of deflation.

#36 Ruben on 01.20.16 at 7:18 pm

Even though Garth is an eternal optimist, Peak Oil easily results in low prices. So yes, the zombie apocalypse fantasies were wrong, but the geology of peaking is not.

Gail Tverberg is the smartest there is on this topic.

http://ourfiniteworld.com/2016/01/07/2016-oil-limits-and-the-end-of-the-debt-supercycle/

#37 45north on 01.20.16 at 7:19 pm

prairie person: The guy who wrote that memo thinks he’s the hero in a Hollywood movie.

the guy who gave the keynote speech at Davos thinks he’s the hero in a Hollywood movie:

My predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness,

http://www.ottawacitizen.com/news/national/canada+intellectual+powerhouse+rather+than+resource+based/11664100/story.html

#38 Godth on 01.20.16 at 7:20 pm

lol, you still don’t understand peak oil, though it’s been explained to you numerous times. While you went all in on the US fracking hype the peak oil crowd was saying it’s all a debt driven smoke and mirrors show. They were correct…where are the profits? EROEI, it’s about energy – not money, money is easier to manipulate than physics. Bye-bye expensive oil in a debt saturated world. Hello bankruptcies. There has been plenty written about this before and there will be a torrent written about it in the near future but for now your favourite source is on it:
http://www.zerohedge.com/news/2016-01-20/glimpse-things-come-bankrupt-shale-producers-cant-give-their-assets-away

“mostly-mythical Plunge Protection Team” hahaha, reality bites back hard when it bites. So now you have half a tin-foil hat on? :)

#39 Frickering questions on 01.20.16 at 7:24 pm

….you have to ask yourselves if you still have the will to compete in this industry and, just as importantly, on this platform…

—-

Hahaha…

If you do, go demolish GMP Capital and his CEO Harris Fricker.

GMP Capital Inc has a net profit margin of -8.95%. Besides being negative, it is also below the industry average and implies that this company is not effective at turning revenues into bottom line profit.

Maybe the first person who should answer the rhetoric task is Mr Fricker.

#40 JG on 01.20.16 at 7:27 pm

Agreed. I am in.

“#2 wallflower on 01.20.16 at 6:33 pm
As usual, Garth’s comment cracked me up the other day; pithy words with link provided regarding The Order of Canada and this got me thinking… someone SHOULD nominate this contributor to a better Canada because
[1] his blog is likely the longest surviving and serving Canadian financial source that runs advertising free
[2] his information is relevant and useful to all ages of folk who read and think
[3] many have been enlightened
[4] dogs are people, too”

#41 Opportunity on 01.20.16 at 7:27 pm

Gmp employees Are picked up by other companies, the problem was the banks going after smaller deals and cutting gmp and smaller firms. Didn’t help that they were not diversified!
Townhouses are coming to list again in surrey at a higher pace than last year. We’ll see how the spring develops after cmhc changes

#42 JSS on 01.20.16 at 7:27 pm

Serious question. I know someone in Calgary who is a first-year electrician apprentice – mostly commercial, but some residential. He’s planning to go back to SAIT(?) for second-year electrician schooling.

Is he likely to have a tough time finding another job as a second-year electrician?

#43 Nanaimo Bar on 01.20.16 at 7:28 pm

What are we going to with this worthless oil crap. Maybe it is just time to boot it off the New York Mercantile Exchange and move it over to the Chicago Mercantile Exchange and let the Millennium crowd deal with it. Reopen the pork belly pits. Let those kids stand there all day with their palms facing out, showing five fingers. Better yet, just peg the USD to pork bellies.

#44 Freedom First on 01.20.16 at 7:33 pm

Great pic! Brings to my mind the importance of a few things.

People may have noticed I have been saying here for years I live a debt free, liquid, balanced, diversified “Freedom First” lifestyle.

Well, the pic today reminded me of something else which is of great importance that people forgot about in Canada while gorging on debt like pigs at the trough. Not only is the above very important, but I am once again reminded of the value of having cash, cash flow, and different income streams.

The world will never adjust to help/aid your financial situation, so always maintaining the agility and flexibility to adjust everything in your life to maintain your well being in every way is of critical importance.

Everyone will learn these lessons in their lifetime. Some, the easy way. The majority, the hard way.

#45 zee on 01.20.16 at 7:35 pm

Hey Garth

Hope this crash ends soon in the stock market.

Those who are invested in Real estate, are really feeling good these days that they are not in the stock market as they are not feeling any pain.

Odds are they will. The pain will be more thn the temporary 4% or 5% decline in a balanced portfolio. — Garth

#46 Ogopogo on 01.20.16 at 7:36 pm

#32 Almost Retired on 01.20.16 at 7:07 pm
A little less than 3 years ago the preferred share etf CPD was trading at $17. Now $11 – a 35% hit. It currently has a yield of 5.89%.

[…]

Those of us who bought at $17 will probably never see it pop back to that level.

Not a week goes by that you don’t come here to b**ch and moan about CPD. I get it that you’re “almost retired,” but have you ever heard of dollar cost averaging? I’m holding a hefty amount of shares at 15.245 and I couldn’t be happier to see CPD tank. That means every month I’m buying it for cheaper, today was no exception. Mind you, not long ago I reported here that I was holding it at a higher average cost (~15.45 or so).

Focus on the juicy, tax-advantaged (if held in non-reg account) divvies you’re getting every 6th of the month or so. I hope CPD crashes further. I’ll be thinking of you, as I quietly chuckle and smugly shake my head.

#47 Chris on 01.20.16 at 7:38 pm

What does GMP capital do? That letter sounds like shenanigans. Cad rebounding. I guess we should really embrace this moment before all hell breaks loose.

#48 Poloz the fox on 01.20.16 at 7:39 pm

Too bad Poloz did not drop the rate.
How can we blame now the financially incompetent liberals?

#49 mark on 01.20.16 at 7:39 pm

Saudi output suggests they’re finally cooked. Declined for 6 straight months now, if they’re still trying to flood the world they’re doing a bad impression of it. OPEC down 200,000 bpd in December while non OPEC is now down 650,000 bpd.

Given everything else delayed or mothballed there will be a rude turnaround at some point this year.

Bullish for those selling truck nuts!

#50 Chris on 01.20.16 at 7:40 pm

#7 you are sure that prediction is for the U.S.?

#51 MSM-Free Zone on 01.20.16 at 7:40 pm

“…..Adversity brings with it clarity. And clarity provides the most viable perspective from which to address adversity. The very clear message to you today……”
_________________________

Sounds eerily similar to the words a spineless, mean-spirited, narcissistic, vindictive, hypocritical, ideologically-blindered, morally bankrupt dictator we punted last October 19th.

“My friends, let me be clear……..”

Still having nightmares from the last decade.

#52 Ret on 01.20.16 at 7:40 pm

Crystal radios run solely from the power of radio waves.

https://en.wikipedia.org/wiki/Crystal_radio

Enough of those tin foil hat quips already.

Microwave and cell phone towers on those tall condos and office towers will ensure a nation of useful idiots.

Cell phone users will be given their orders and turned into zombies. Trial tests have been taking place for months in every major urban area or haven’t you noticed?

Get ready. Be prepared.

#53 46 and 2 on 01.20.16 at 7:42 pm

Vancouver, the lower mainland to Hope, Kamloops, Salmon Arm and Vernon are going to BOOM.

#54 Don't Believe The Hype on 01.20.16 at 7:44 pm

#6 Rick on 01.20.16 at 6:43 pm

Check out IYE and USO. They’re quoted in USD though, if you have a few real dimes. Good luck on your search.

#55 David Federman on 01.20.16 at 7:46 pm

Justin and Poloz have sold us out.

http://business.financialpost.com/personal-finance/mortgages-real-estate/how-the-weak-loonie-is-boosting-canadian-resort-real-estate-sales-among-u-s-buyers

Your kids only future is cleaning toilets for tourists.

Garbage story created by realtors. Not a single sale has taken place. — Garth

#56 MSM-Free Zone on 01.20.16 at 7:46 pm

Speaking of nightmares: Trump & Palin

Kind of like tying two rocks together and seeing if they can swim.

#57 Godth on 01.20.16 at 7:48 pm

Greg Hunter is an idiot but Nomi Prins is not:
https://www.youtube.com/watch?v=R7puB7g8qHA

https://www.youtube.com/watch?v=aRHqs8SffDo

#58 hope & ruin on 01.20.16 at 7:53 pm

did anyone else cringe watching Trudeau at Davos today? I was embarrassed for him. Especially when the interviewer took that jab about being a snowboard instructor. As much as I like ripping on him, I do not envy him.

#59 Doug t on 01.20.16 at 7:55 pm

Before every major economic reset there are polarizing events that happen – today we have been sold and bought “fear” via terrorism – oil, the great lubricant of the last hundred and some years of growth is tanking – th EU Union is headed to a sure fire break up – and the once great Russian bear is growling again – throw in the fact that China has hit the wall and all the lies about their growth are coming home to roost. Well I don’t claim to be Nostradamus but boy you could sure point to all of this make a good case for a major economic reset – either that or a major war

#60 Toronto Dweller on 01.20.16 at 7:55 pm

Enough with Cauliflower prices, if you like it so much buy it frozen!

#61 mauri on 01.20.16 at 8:07 pm

What a crazy world, in which the abundance of a precious energy resource on which the world runs is a “bad thing for the economy” according to the financial press.

Oil represents a cost for everyone outside the oil industry. Its price going down should be a good thing for all except those in the oil industry and related. But we are so dependent on it that it has come to dominate our economy, not only in Canada but the world.

#62 RimJabba on 01.20.16 at 8:08 pm

Markets tanking, people still having bidding wars over junkers. Apparently real estate is immune to market fundamentals.

Smoking Man, your Forex trading nearly gave me a damn heart attack today, I pulled the trigged on 10 lots after the 100 pip drop after Poloz waffled on the rate cut. Bam! Up 10k in 2 minutes. So I let it ride. Ended the day down $1k when my stops kicked it, fml. Waiting for a new uptrend.

Garth, I suspect real estate won’t be effected by oil yet. We still have a long way to fall, especially with Iran joining the oil orgy. The BoC is spiking our currency symbolically, the cauliflower stories worried them we are catching onto their scam.

They’ll let the economy rough up some more before a big rate cut.

#63 Investx on 01.20.16 at 8:09 pm

“So much for peak oil.”

Indeed!

#64 hope & ruin on 01.20.16 at 8:09 pm

ohhh…..I get the pic now. The kid in the snowsuit represents the “moist millennials”. And the cannon is the economy/real estate that is about to blow us away. And we’re staring right at it.

#65 Briana on 01.20.16 at 8:13 pm

@ David Federman

Why would Americans/Foreign Investors buy Canafian RE now?? Better to wait until the dollar is lower and the YYZ/YVR bubble pops… Much better housing deals in the future. They will be giving it away.

#66 Godth on 01.20.16 at 8:19 pm

How far from home are we?
https://www.youtube.com/watch?v=wCxJUKyHHyI

The consumers crumple in tears when they have to become producers.

#67 Nass on 01.20.16 at 8:22 pm

I watched the movie: The Big Short,
Is there a possibility that the same story happens here in Canada in housing market?!

#68 46 and 2 on 01.20.16 at 8:22 pm

I think the provinces of AB and Sask should take that billion $ and use all of it to buy hundreds and hundreds of railway and highway tankers. Start clogging up everything with tankers full of bitumen east, west and south and then see how the peeps and politicians feel about pipelines.

#69 Godth on 01.20.16 at 8:22 pm

#62 Investx on 01.20.16 at 8:09 pm

So much for peak debt! Indeed!

#70 pwn3d on 01.20.16 at 8:23 pm

Wait, I thought sunny ways said we’re not a resource country, so why is the dollar and market crashing with oil and commodities? Hmm, something not quite right there. The rest of the world must be wrong about us.

Good thing we’re so resourceful. Most resourseful are homeless people, I mean how does one stay warm and get food with no money?

#71 Smoking Man on 01.20.16 at 8:29 pm

#61 RimJabba on 01.20.16 at 8:08 pm
Markets tanking, people still having bidding wars over junkers. Apparently real estate is immune to market fundamentals.

Smoking Man, your Forex trading nearly gave me a damn heart attack today, I pulled the trigged on 10 lots after the 100 pip drop after Poloz waffled on the rate cut. Bam! Up 10k in 2 minutes. So I let it ride. Ended the day down $1k when my stops kicked it, fml. Waiting for a new uptrend.

Garth, I suspect real estate won’t be effected by oil yet. We still have a long way to fall, especially with Iran joining the oil orgy. The BoC is spiking our currency symbolically, the cauliflower stories worried them we are catching onto their scam.

They’ll let the economy rough up some more before a big rate cut.
………………………….

Seriously? you jump in on BOC day.. I need to pass the Fedora of insanity to you. 2 cent price swings on days like these. Instantaneous wipe out.

1k down, You’re one lucky dude.

The entire strategy is to get in on the start of long term trends, buy dips with leverage, entry point should be at leased 5 days before any serious economic releases.

#72 For those about to flop... on 01.20.16 at 8:29 pm

I caught the bus today to vgh through the Mt Pleasant neighbourhood .
I was shocked to see election banners everywhere.
Is this a provincial by-election or something?
I think people have had enough of this for now…

M41BC

#73 Snowboid on 01.20.16 at 8:35 pm

While it’s true we are now watching what we spend in Arizona, it’s interesting to see the MSM in Canada claim it’s so much more expensive now.

Just did a comparison of a few items, first is the US price converted to CAD (at 1.45), then the CAD price. We Canucks are still getting the shaft!

Groceries cart $63.51 CAD at US store, $ 97.90 CAD in Kelowna
Beer 18 cans $ 17.23 CAD at US store, $ 31.99 CAD in Kelowna
Fuel Regular $ .66 CAD at US station, $ .959 CAD in Kelowna

Our biggest issue is deciding whether to sell our AZ home – our $ 130K CAD investment in 2011 is worth about $ 250K CAD (todays exchange rates after cap gains and exchange fees).

We wanted to hold onto it for 5 more years at least…

Advice?

#74 polecat on 01.20.16 at 8:37 pm

Awesome pic Garth.

#75 Mark on 01.20.16 at 8:37 pm

“Why would Americans/Foreign Investors buy Canafian RE now?? Better to wait until the dollar is lower and the YYZ/YVR bubble pops… Much better housing deals in the future. They will be giving it away.”

Most likely, but if the Canadian RE bubble pops, the CAD$ is likely to go up on account of all of the domestic deflation that will accompany such. So houses for foreigners will still be a bargain, but I wouldn’t look to the CAD$ as being a bargain.

After all, think of it intuitively — will indebted Canadian homeowners have any money to be spending on discretionary imported stuff like vacations, new cars, cauliflower, etc.? Of course not. Every last discretionary dollar will be swallowed up by higher interest rate spreads on their consumer and RE-backed debt. Or they’ll be in personal bankruptcy, paying into their estate for a few years if they even have a job.

#76 rawdiswar on 01.20.16 at 8:38 pm

I want to hear more about this “fiscal stimulus”. Who’s piggy bank is the great Boy Wonder going to crack open for this one?

Now, I was young when Chretien and Martin wore the C for Team Red, but didn’t they swipe the EI kitty to balance the books? I can’t trust my dad’s rants as the sauce usually did the thinking for him, so one of you kinder gentler grey beards fill a brother in please.

How are the markets going to react to a huge deficit come the Spring Equinox, if it’s released by then? I actually want to know so I can profit from it like the cut throat, greedy capitalist I strive to be.

Another question for the blog dogs, just the smart ones though, anyone held the Cdn banks for 20+ yrs? Talking TD, RY and BNS specifically. I want to pull the trigger on those when the time is right.

Help me oh wise Boomers! How I wish to join your ranks of old know-it-alls on the Interwebs!

#77 cramar on 01.20.16 at 8:39 pm

#37 45north on 01.20.16 at 7:19 pm
prairie person: The guy who wrote that memo thinks he’s the hero in a Hollywood movie.

the guy who gave the keynote speech at Davos thinks he’s the hero in a Hollywood movie:

My predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness,

http://www.ottawacitizen.com/news/national/canada+intellectual+powerhouse+rather+than+resource+based/11664100/story.html

——————————

From the above article:

But he [Justin Trudeau] said the country’s growth doesn’t depend on what lies underground.

“My predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness,” he said.

Trudeau pointed to the success of University of Waterloo graduates in Silicon Valley and the school’s eclectic student population, calling diversity “the engine of invention.”

And he framed Canada as a safe place to invest amid global economic uncertainty.

“We have a diverse and creative population, outstanding education and healthcare systems, and advanced infrastructure. We have social stability, financial stability and a government willing to invest in the future,” he said.

At least he put UofW on the map!

So how does grads being successful in Silicon valley benefit Canada?

Remember a couple of decades ago going to the UofW math/science library to do some technical research on a summer Sunday. The only students there were Chinese. Was told later that they were sent by wealthy Taiwanese parents to get an advanced education then return to Taiwan. If true they didn’t benefit Canada at all.

#78 Housing sales Stalls on 01.20.16 at 8:42 pm

Justin and Poloz have sold us out.
http://business.financialpost.com/personal-finance/mortgages-real-estate/how-the-weak-loonie-is-boosting-canadian-resort-real-estate-sales-among-u-s-buyers

Your kids only future is cleaning toilets for tourists.
Garbage story created by realtors. Not a single sale has taken place. — Garth

—————————

You can see the panic from realtors creating any boogie man they can create from their imagination of phantom buyers that do not exist with the hopes that the locals will fall for their propaganda

#79 gut check on 01.20.16 at 8:43 pm

Two things..

#38 Dave – great fun reading that post! :)

and

I am glad that I don’t even know what CPD is. (I think)

#80 Nanaimo Bar on 01.20.16 at 8:52 pm

How long will it take before Ebay or Amazon develops an Oil Barter Exchange? Worthless Junk.

#81 cramar on 01.20.16 at 8:59 pm

#65 Snowboid on 01.20.16 at 8:35 pm

Our biggest issue is deciding whether to sell our AZ home – our $ 130K CAD investment in 2011 is worth about $ 250K CAD (todays exchange rates after cap gains and exchange fees).

We wanted to hold onto it for 5 more years at least…

Advice?

——–

Ironically, my son in Chicago told me the other day that he was reading an article about Canadians dumping their AZ properties for a 100% profit.

Not giving advice whether you should or should not. Just stating that it seems some Canadians are.

I think if I was in that situation, I would sell, keep the U.S. funds in a U.S. bank for now, with an eye to investing when the time is right. Then rent in AZ for the winter in future. But I know my son probably would rent the place out to generate cash flow and hold on to the property. Personally, I wouldn’t want to own AZ RE when they run out of water.

#82 Big Dipper on 01.20.16 at 9:00 pm

Harris Fricker memo takes the cake in terms of sanctimonious hypocrisy.

Nowhere is he taking blame for the failure of his organization, his obviously faulty business model, his lack of risk management and his poor execution. Instead, while no doubt covered by a golden parachute, he shifts blame to the remaining hapless employees by calling on some sort of Darwinian survival of the fittest process.

Only the most ideologically brainwashed will be unable to see this for the garbage it is.

#83 maurice on 01.20.16 at 9:00 pm

“you simply will not survive the new normal in our industry or at our firm”

hahaha a CEO threatening about who survives and who dies, as if we were in a fascist regime….

and all because we have abundant oil, etc. which is supposed to be a good thing…

1. first we are supposed to be thankful to have a job.

2. then we are supposed to be stressed and work harder if through our work we create abundance of a previously scarce resource.

3. those that put up with these rules, are supposed to be thankful to a threatening CEO that our livelihoods are ok thanks to our workaholic lifestyle.

are we living in a fascist society? so that stock traders can make money by clicking on a mouse?

the oil industry should shut in production to bring back scarcity and remind people how oil has always been a scarce and finite resource.

#84 Ronaldo on 01.20.16 at 9:00 pm

#72 Snowbird

Sell

#85 rawdiswar on 01.20.16 at 9:03 pm

#37 45north

That’s because he is an actor. Glad I’m not the only one who sees it.

They’re all actors, right Garth?

#86 what? on 01.20.16 at 9:05 pm

https://www.facebook.com/PeterSchiff/?fref=ts

#87 For those about to flop... on 01.20.16 at 9:05 pm

Hey Boomer WI,if it ends up being a Donny Rump and Sarah Palin ticket and you don’t think you can handle it,yell out and I will clear some stuff out of the spare bedroom for you.
You are welcome to stay as long as you like.
I will share everything I own with you but my house has a strict b.y.o Cauliflower policy…

M41BC

#88 Mark on 01.20.16 at 9:05 pm

“Remember a couple of decades ago going to the UofW math/science library to do some technical research on a summer Sunday. The only students there were Chinese.”

I’ve been in that library a few times during my time at Waterloo (I presume you’re talking about the compsci “library”). Let me just say it is a dungeon that isn’t really fit for any purpose other than spending a few minutes to get a book out of that one might need for an English lit class or some other similar nonsense.

The top compsci/engineering students (or students generally) are either in the better quality computer labs, or they’re sitting at home on their computers either running the applications on their own computers, or remotely logged in. The “labs” themselves are mostly operated as a courtesy to the few cheapskates who can’t/won’t buy their own equipment, or those whose personal machines are broken. With the odd porn or gaming addict using them simply on account of being able to overcome temptation “at home”.

Trudeau’s comments boosting Waterloo were actually quite unfortunate as Waterloo’s claim to fame isn’t superior academics, but rather, that they make every student in every program do multiple (low-paid) internships as a condition of graduating. My assigned attache, when I was the Dean’s guest, was actually a Phys Ed student employed by the Dean’s office on a work term. Essentially Trudeau, through his boosterism of Waterloo, threw the fine graduates of the dozen or so other top-tier Canadian research universities out the window in favour of promoting Waterloo. That seems to be a persistent problem of Trudeau — forgetting that he is now the “leader” of a nation, rather than merely the leader of a narrower special interest group.

If true they didn’t benefit Canada at all.

I disagree here. The incremental cost of offering an additional seat in an engineering training program is essentially zero. No competent Canadians are being turned away from engineering training on account of foreign students being enrolled. Unlike the non-direct entry professional programs, the bar to entering a Canadian professional engineering program is very low. Now, a lot of people do flunk out (2/3rds when I went through, including a significant number of foreign students), but that’s on account of their demonstrated academic and time management aptitude, not because enrolment quotas are forcing the issue. If foreign students leave Canada after receiving their training, that is great — the labour market for engineering and IT talent is severely glutted in Canada. Some IT and engineering programs at lower-tier schools are likely only financially sustainable in the context of training foreign students at this point on account of the weakening domestic demographics.

#89 Godth on 01.20.16 at 9:21 pm

#78 gut check on 01.20.16 at 8:43 pm

One thing: you used the wrong post #

Another thing: Garth has no idea what’s going on with millenial music scene because they operate outside of the corporate structure he knows and loves. It’s global and unharnessed, like it or not.
https://www.youtube.com/watch?v=0vkS2t0Csew

#90 kayak_guy on 01.20.16 at 9:21 pm

Preferred share question for a non-tax sheltered investment:

Would I be better off buying FTS-H which is yielding over 12% vs regular FTS which is yielding just over 4%?

FTS-H has plunged so much lately is it a no brainer? If not, what is the catch? Thanks

#91 Dan on 01.20.16 at 9:22 pm

Preferreds and REITs snapped first, corporate bond ETFs like CBO and CBH are probably next. ($US) Cash is king.

#92 wallflower on 01.20.16 at 9:29 pm

#72 Snowboid on 01.20.16 at 8:35 pm

What will the capital gains taxes be?

#93 Smoking Man on 01.20.16 at 9:31 pm

Gut Check.

Just finished chapter 6 . You are an inspiration.

On that trip, I discovered the true art of fiction.

Packege Words that the opposing teams fall in love with, they hate each other but think your on there side.

I’m now a writer thanks to you..

Your so bloody talented.

#94 wallflower on 01.20.16 at 9:32 pm

#72 Snowboid on 01.20.16 at 8:35 pm

Spending three winters (in the second one now) on US dollars I bought at $1.02 Canadian so it’s all cheap cheap cheap to me. BUT, clearly prices are ahead of last year’s winter so the Americans must be feeling it but gasoline is cheaper and here in Florida most everyone drives.

#95 Vik on 01.20.16 at 9:33 pm

Here’s the NYT on the $8 cauliflower: http://www.nytimes.com/2016/01/21/business/dealbook/in-canada-5-cauliflowers-cost-more-than-a-barrel-of-oil.html

#96 Mark on 01.20.16 at 9:34 pm

“FTS-H has plunged so much lately is it a no brainer? If not, what is the catch? Thanks”

I presume one is the common shares, the most junior form of capital on the balance sheet. And the other is obviously a preferred share, a less junior, but still fairly junior ranking claim on the firm.

It need not be an ‘either-or’ decision, but is somewhat a function of your risk tolerance. There will definitely be more volatility in the common shares, which is what you’re seeing.

If you sit down with a professional financial planner like Garth, you will answer a questionnaire and have a discussion about risk tolerance as part of the engagement process. Common shares would, as part of a balanced portfolio, comprise part of the risk-oriented portion of such portfolio. Preferred shares are a sort of hybrid between fixed income and common shares, being less volatile, but exchanging lower long-term returns for the relative stability of fairly regular tax-preferred dividends.

If you don’t have a framework to evaluate these sorts of decisions, then you really need to get yourself to someone like Garth who can, if not on an ongoing basis, at least initially for a consultation fee, provide some guidance, come up with an investment policy statement, and help you develop your own sense of risk tolerance. Of course, the practical outcome of such is that you might not be even buying individual securities at all, especially if you don’t have a high 6-figure/low-7 figure portfolio to justify purchasing enough names to comprise a reasonably balanced portfolio.

#97 SWL1976 on 01.20.16 at 9:35 pm

“mostly-mythical Plunge Protection Team” hahaha, reality bites back hard when it bites. So now you have half a tin-foil hat on?

Perhaps it’s a beard

All joking aside, sadly the odds of us doomers, nutbars, tin-foilers are way long on us being right vs any sort of normalcy be it in politics or the financial world.

Remember, we are not waiting for or trying to pin a date on the financial collapse – we simply understand that we are currently living through it. One can bitch and moan all they want, or pretty it up by putting lipstick on it, by looking at only the numbers they choose – ain’t gonna change a thing. The direction we are going is quite obvious to a lot of people, and the rest – well they are either willfully ignorant or just plain ignorant.

Our current financial mess is simply more than enough stress for this global population, but add in the constant threats of war, mass surveillance, ‘national security’ which the herd clearly can’t comprehend, food shortages, pollution, poisoned water, climate change, insect and animal species collapsing, and I’d say the millennials have every right to be pissed, even though the majority don’t even understand what they should be angry about.

Ah yes the 21st century is proving that it is going to be quite a ride

Buckle up – and best understand the real problems we face, because not only are they not going away they becoming more intense.

Rational decision making is becoming a long lost art

#98 Harbour on 01.20.16 at 9:36 pm

#6 Rick on 01.20.16 at 6:43 pm
So, what is a good ETF that tracks oil? Gotta be near the bottom. Might drop a dime on it.
……………………………………………………………………..

There’s a million of them but I’m watching GASL… don’t own it yet, but what a wild move it had today with the markets.

#99 BS on 01.20.16 at 9:37 pm

“We have a diverse and creative population, outstanding education and healthcare systems, and advanced infrastructure. We have social stability, financial stability and a government willing to invest in the future,” he said.

But that is not what you told us during the election Boy Wonder. Did all that change in last the 2 months?

#100 WUL on 01.20.16 at 9:38 pm

With the utmost respect to PM Harper, I think his “reform” of the National Energy Board handling of applications and hearings for approvals of bitumen pipelines to tidewater was hamfisted.

I spent 10 years as counsel to 2 regulatory tribunals and never have I seen two municipalities pound away at and tear into the regulator like Surrey and Burnaby are on the TransMountain expansion.

Far too long of a comment to expound upon here, but, I think the project is doomed. Like “I coulda been a contender.” the project could have been a “no brainer”. Some serious tactical mistakes were made by the former government.

To be fair, some serious tactical mistakes are and will be made by the present government on the same file.

These dolts should listen to their lawyers. Why else are they paying us so damn much for our advice?

#101 Scott on 01.20.16 at 9:38 pm

“mythological” The turn around in Stawks came the way all hockey stick “saves” have come since the bottom of 2009 lead by the worst companies and most shorted Stawks.

Yup, that a rally on ‘strength’ and ‘cheap’ alright. Now let’s mount up our unicorns and believe the central planners and there fiat printing presses can save us from themselves. Time to bottom fish those cheap biotechs Garth?

#102 Albertguy on 01.20.16 at 9:41 pm

#72 AZ Home..i purchased in 2012 for $125 CAD when CAD was 1.03 USD and now estimate value to be $170 USD x 1.45 = $245 CAD. Also thinking of selling this year then wait for nod from our host to move back into maple. Any other ideas dogs?

#103 Blobby on 01.20.16 at 9:44 pm

I’ve got $100k usd sitting in an American bank. Do you think it’s wise to hold on longer, or it’s time to cash in?

Thoughts?

#104 Drill Baby Drill on 01.20.16 at 9:46 pm

#30 Mark
No one in Alberta is working overtime these days. You really are a bag of wind.

#105 Don't Believe The Hype on 01.20.16 at 9:50 pm

#72 Snowboid on 01.20.16 at 8:35 pm

I’d say sell the property as well. An almost 100% gain in 5 years is nothing to sneeze at. And just like

#80 cramar on 01.20.16 at 8:59 pm suggests, I’d keep the majority in USD and convert say, half the gain after tax into CAD just for diversification purposes.
Nice work though!

#106 Mark on 01.20.16 at 9:50 pm

“No one in Alberta is working overtime these days.”

Exactly my point. Take away the overtime and expense accounts, and compensation for Albertans deflates severely.

#107 RimJabba on 01.20.16 at 9:52 pm

Thanks for the advice, I bought hours before the nice 30 day trend broke. Could have been worse, I could have had Wynne as my mom. Looks like a very mild downtrend is starting.

It feels kind of weird losing money, sort of like getting beat up, but it’s not that bad. Beats being a spineless wimp afraid to take a chance.

#108 Me Holidays in Kanadastan on 01.20.16 at 9:56 pm

(Yesterday)
#109 Bobs ur uncle on 01.19.16 at 9:08 pm

You know you’re old when you listen to the young’ens music and think “it’s just noise – it’s not even music” Newsflash you old fart – that’s precisely the intended reaction – to offend your sensibilities.
///////////////////
Now that’s just great. A Millennial telling us the “Highest Achievement in New Music” is to offend. (I’ve suspected that for years.) That’s really something to aspire to musically for some of the “young’ens” out there I guess. (Lookee, Old Fart, my crappy music has offended you….)
(Yesterday)
#109 Bobs ur uncle on 01.19.16 at 9:08 pm
(Yesterday)

Regardless, there *is* still good music out there if you’re willing to seek it out. This one aptly titled for tomorrow’s rate decision: Roll the Bones.
//////////////////////
I’ll see your:

Shakey Graves ~ Roll the Bones, Dearly Departed, etc.

and Raise you:

John Martyn ~ Grace and Danger (Album – 1980)

Also: Who gave your guitarman Mr. S–tty Graves the right to use Neil Young’s Nickname??? (I know, I know, the dumb “Indians ‘round the campfire story.” Yawn…)

Music? Our Era is a Goldmine. Yours. Not so much. Time to check out some history with your headphones young’en. Ours puts your “music” in the Grave.

#109 Smoking Man on 01.20.16 at 9:57 pm

#103 Drill Baby Drill on 01.20.16 at 9:46 pm
#30 Mark
No one in Alberta is working overtime these days. You really are a bag of wind.
…..

My call he’s got a demented sence of humar, not much makes me laugh these days. Winter shit and all. But he does.

I think, or he’s just warpet, either way.

Laughing is healthy.

#110 Nanaimo Bar on 01.20.16 at 10:01 pm

Lot of goodies in here for smart shoppers with a Hedge Fund frame of mind. Pretty well sums up the Path going forward.

http://www.scmp.com/business/article/1903234/bernanke-says-pboc-needs-be-more-transparent-yuan-policy

#111 steerage steward on 01.20.16 at 10:02 pm

Looking forward to a long weekend ice fishing far from financial news. Good thing Scotch prices haven’t changed.

#112 maure on 01.20.16 at 10:06 pm

oil price changes, here is what has not changed:
1. middle east and other petrostates (Venezuela, Russia) swim in corruption
2. the general population there is poor so there is political and social instability
3. the war on terrorism, ISIS, etc is just a mask to justify repression on those petrostate excluded populations, while the royalty vacations in Paris and New York.
4. new technologies like fracking and deep sea drilling have opened access to new oil reserves outside OPEC.
5.But the instability in the petrostates is a time bomb that could knock off production at any time.

What will change:
1. This cheap oil will not last too long. Shale oil and deep sea oil is not cheap to produce.
2. Furthermore, fracking has long term environmental problems that is not reflected in the cost yet as people are not aware of the hazards involved, like underground fresh water reserve pollution. As years go by, the wellbore will communicate gas and oil reserves with water reserves, polluting the water.
3. The Paris agreement will be thrown aside just like Kyoto as a photo op for Obama admin and others, but in the ground the world depends on oil for energy and petroleum products.
4. The climate will not warm as predicted. Leo DiCaprio is wrong, the world is not doomed by Carbon.

#113 Macduff on 01.20.16 at 10:08 pm

I have a question for you Garth, or for the blogdogs. I’ve been with my financial advisor for about the last 3 years who takes care of my seven figure portfolio at a fee of 0.9%. My question is, am I being unreasonable in assuming that said advisor would contact me at times like this when the markets are cratering if only to encourage me to stay invested, rather than hearing nothing from him for the last 6-8 weeks? Do others have similar concerns with advisor behaviour?

No. And you’re paying too much. — Garth

#114 Smoking Man on 01.20.16 at 10:10 pm

A writer with out booze is like an engine without gas.

#115 Timberrrr on 01.20.16 at 10:12 pm

Canadian cauliflower is now famous!

http://www.nytimes.com/2016/01/21/business/dealbook/in-canada-5-cauliflowers-cost-more-than-a-barrel-of-oil.html?_r=0

#116 Shaker on 01.20.16 at 10:17 pm

Huh?
Is just short covering. There are no real buyers.

#117 Murphy on 01.20.16 at 10:19 pm

Victoria Real Estate Update #31

Are you a battery??

#118 Murphy on 01.20.16 at 10:21 pm

Blobby. #102
Give it to me I’ll guarantee you 2.5% and only take a 1% commission.

#119 Ret on 01.20.16 at 10:23 pm

#66
“Is there a possibility that the same story happens here in Canada in housing market?” (Big Short) Not a chance. We’re Canadians!

Drive around a newer $450-550,000 subdivision in the GTA. Check out the people, what they are dressed like, what they are driving (usually either total crap or two new $50,000 leased vehicles), how many children, landscaping since taking possession, number of cabs, tow trucks, low income service vehicles in driveways, cars being repaired in driveways or inoperable etc. and you can’t help but think a correction is close.

IMHO, oil is a nothing burger, a mere diversion from the main event. A (10-25%) reset in housing prices in 2016 would not surprise me.

Canadian banks have done similar soft doc credit and lax lending standards as in the US so why would the outcomes be any different?

#120 Greg on 01.20.16 at 10:24 pm

I have some Merican friends seriously looking at BC rec property. It’s 1/3 off after all. Told them to wait until Iranian oil hits the market.

#121 VICTORIA TEA PARTY on 01.20.16 at 10:26 pm

#31 Victoria Real Estate Update

“…Housing bubbles are bad for any country. Canada is no exception…”

Right on.

And that is why the “voyage” of the good “ship” Price Discovery continues whether we like it or not.

Price Discovery is commanded by Mr. Market whose task is to ensure an orderly movement of money in the markets so that investors can get and stay rich.

Unfortunately he has been severely kicked about ever since the US Fed began its stupid Quantitative Easing Show (printing money because there was none available elsewhere in the country and in such historically vast quantities).

Sure stock prices rocketed higher but corporate bottom lines were corrupted by share buy-backs, cost cutting (job losses), declining consumer demand and other financial jiggery pokery to make them look good when they were not doing well at all, and still aren’t.

In a rage Mr. Market has come back with a vengeance at various times since about 2011, and has been showing up at our door occasionally ever since.

Last week and this week he spread heart burn, acid indigestion and extra revenues for adult diaper-makers; and the result?

Why, tomorrow markets will open higher as if the double-digit market collapse punishment, of the past 20-odd days, was nothing but a blip on someone’s app out there.

No lessons were learned even by the likes of CNBC market “mover and shaker” Jim Cramer.

Everything will be good if only the Fed cuts rates, again, he whined this week on CNBC, joining an expanding chorus of market “experts” who blame the Fed hike for fomenting the wicked responses from Mr. Market.

What these folks fail to comprehend is that the Fed and every other central bank, having printed up trillions, has led to our current debacle.

In other words, Mr. Cramer wants to stall Mr. Market’s vital Price Discovery work because lower markets make investors feel like NOT investing more.

A conflict of interest, you guys, is what it is here, delaying the approaching reckoning.

Stop it.

And then there was Mr. Trudeau, at Davos, meeting with George Soros who gave him the Mr. Market pitch. The young lad looked utterly perplexed. Of course he did because Soro’s comments had nothing to do with sunshine and a Millennial’s iPad plus apps.

Canada’s economy has failed for two main reasons:

–the ongoing currency wars which have trashed the Loonie, a horror over which Canada has no control, because those wars are the province of the US, the EU and the big Asian countries;

–and, the oil price crash. It is related to the currency. Why? Because the currency issues have impoverished much of the world, and has caused a terrible destruction of demand for hydrocarbons. So the price keeps dropping as the Opec folks continue to sell their oil at any price no matter what.

Price Discovery is the voyage that any good economic system must endure in order to right past, and primarily monetary, sins so that our “ship” can be drained, and righted, of this awful excess money and the concomitant debts can then begin to be dealt with.

Until then, enjoy the show. And, by the way, look for further market corections downward inspite of the 14.9 P/E ratio average. That is a chimera.

#122 Mike Le Pard on 01.20.16 at 10:34 pm

#102 Blobby on 01.20.16 at 9:44 pm
I’ve got $100k usd sitting in an American bank. Do you think it’s wise to hold on longer, or it’s time to cash in?”

I did the trade today at 1.4500. It’s not a bad time to sell the USD for CAD. I’ll be doing so again as I’ve done now 5 times. (1.30, 1.33, 1.40, 1.429 and now 1.45)

But in the end, it’s up to you and your risk tolerance. Are you happy with a 45% return?

#123 Investorz on 01.20.16 at 10:38 pm

Deloitte is merging offices in Toronto. And now no one has a desk… you have to sign-in electronically to reserve it.

I bought more preferred shares ZPR now that we know Poloz isn’t cutting rates. Might have marked the bottom for preferred. Can’t know for sure, but there is a 6.5% dividend, paid monthly.

#124 Whinepegger on 01.20.16 at 10:40 pm

Foul! Foul! I call foul!

Postmedia Network is running a story giving credit to Melissa Lantsman, former director of communications for Harper finance minister Joe Oliver as the originator of the ‘Cauliflower comparison’. Apparently she made a Facebook post on January 13th bringing attention to the cost of cauliflower. Anyone that follows this blog knows that Garth brought it up (pun intended) on January 4th.

http://www.winnipegsun.com/2016/01/20/trudeau-davos-and-7-cauliflower

The PCs are STILL bereft of new ideas, Garth. You should take more care in copyrighting your posts.

#125 S.Bby on 01.20.16 at 10:43 pm

Even Burnaby city politicians feel the heat of high property prices.

http://www.burnabynow.com/news/realty-group-slams-burnaby-councillor-for-comments-1.2154425

With reference to realtors, the the Real Estate Board of Greater Vancouver replies with a straight face:

“Making inaccurate comments in the media about their professional association needlessly places a negative light on these hard-working professionals.”
LOL.

#126 Ronaldo on 01.20.16 at 10:44 pm

#101 Albertguy on 01.20.16 at 9:41 pm

”#72 AZ Home..i purchased in 2012 for $125 CAD when CAD was 1.03 USD and now estimate value to be $170 USD x 1.45 = $245 CAD. Also thinking of selling this year then wait for nod from our host to move back into maple. Any other ideas dogs?”

You’ve doubled your money in 4 years. How long would it take you to save that kind of cash out of your earnings? Take the money and run. Everything is temporary. The CAD is not going to be down forever and no guarantee that the house prices in US stay where they are if the economy turns. I bought a stack of USD’s back in May 2011 when our dollar was $1.06 and I cashed out last week. I left a bit on the table. Many people missed the opportunity back in 08 when our dollar once again rose to $1.10 when I again bought a stack of them. Your expenses to keep this place has increased in the currency you operate in as well unless you’re renting it out and covering those costs. How much higher in price do you think it can rise from now? If it’s not bringing in any revenue for you, why hang onto it? That’s a lot of cash that could be deployed elsewhere. Think about it.

#127 Sheane Wallace on 01.20.16 at 10:47 pm

#102 Blobby

I’ve got $100k usd sitting in an American bank. Do you think it’s wise to hold on longer, or it’s time to cash in?

Thoughts?
———————

Hold for now, convert to Swiss Frank or Euro in 2 years

#128 Snowboid on 01.20.16 at 10:53 pm

#80 cramar on 01.20.16 at 8:59 pm…

Thanks for your thoughts, but not too worried about AZ running out of water during our lifetime. I would be more worried about owning in cities that could be underwater (financially or requiring scuba gear) in the coming 20-30 years.

*****************************

#83 Ronaldo on 01.20.16 at 9:00 pm…

Thanks…

*****************************

#91 wallflower on 01.20.16 at 9:29 pm…

Based on the calculations if we had sold last year we would pay about $ 13,500 in US capital gains, and about $ 5,500 in Canadian taxes (after applying the foreign tax credit). There may be another option for the CRA deductions but haven’t calculated that yet – it may save a few more dollars.

Because the property sale price will be under $ 300,000 US and was used as a residence (not rented) we don’t need the IRS 10% withholding tax, but will still need an ITIN number to file and pay the US cap gains (and claim the deductions to CRA).

****************************

#93 wallflower on 01.20.16 at 9:32 pm…

We also have a fair bit of USD acquired at a more favourable rate, but want to stretch it out – hence watching what we spend.

BTW, there is a Canadian bank that owns a US subsidiary, BMO – this has made our lives much easier managing finances between the two countries. BMO Harris in Phoenix would even lend us money or set up a LOC based on our Canadian credit scores, we may take them up on the offer.

#129 gut check on 01.20.16 at 10:56 pm

@ #88 Godth on 01.20.16 at 9:21 pm
#78 gut check on 01.20.16 at 8:43 pm

One thing: you used the wrong post #

***********
you are so right,
DAVE! I meant you @ #28. good post. funny.

thank you, Godth, for leading me out of wrongful enumeration

#130 BG on 01.20.16 at 10:59 pm

This January is definitely an interesting month. Looking forward to see how low will the stock markets go.

Personally I bought in today at around 11 AM when the market was close to its lowest.
Not that I was trying to time it, but I had the money and I had the time, so according to the long term plan, I should have bought – and I did.

#8 Cheese
I invest in VXC as well.
That’s pretty much all I own: VAB, VXC and VCN.
And their TD e-series counterparts.

#131 Kreditanstalt on 01.20.16 at 11:12 pm

And exactly how much longer can the US economy support this strong dollar policy without imploding…?

The “tightening cycle” is probably done.

#132 Crazyfox on 01.20.16 at 11:18 pm

#111 maure on 01.20.16 at 10:06 pm

You are wrong of course, about climate change (and other things). 2015 was the hottest year on record globally since we’ve been keeping records going back to 1880. 7 months last year smashed records. 2014 was also the hottest year on record globally. So please don’t lecture us on the earth not warming when in fact, it is.

http://www.cbc.ca/news/technology/2015-record-heat-1.3411797

#133 ANON on 01.20.16 at 11:24 pm

Great, now we have also a cauliflower mania to deal with, on top of everything else. Any ways to short this?

#134 Godth on 01.20.16 at 11:26 pm

#108 Me Holidays in Kanadastan on 01.20.16 at 9:56 pm

just die already you arrogant, pretentious douchebag. Most of your beloved music would never have been produced and promoted by the scumbag corporations these days. If anything the music is flourishing but ossified geezers like you will never know.

#135 Love my Kia on 01.20.16 at 11:30 pm

The new normal – the top 1% swells and the money they refuse to let go sits offshore in hiding. Rest of the economy suffers due to imbalance. Economy stalls.

Plot twist, the fed will start following Canada’s lead and drop rates. The DOW loses more per day than the TSX does. The board only says what, not how, and the fed will try to reverse this trend.

My USD account is doing wonderfully (thanks Garth), and so are my gold holdings (thanks to me). I think the rise of gold explains why many posters here have been very cranky of late, predictions didn’t turn out quite as planned.

You can’t time the market, but you can observe changes and adjust accordingly. I look at street level and see people of all ages struggling, they have been for a number of years. I don’t see any rosy outcomes anywhere in the world, not even the US. If Bernie wins (remember he who laughs last), then you haven’t seen anything yet.

#136 cramar on 01.20.16 at 11:31 pm

Seems that Soros gave our youthful PM a dose of reality. “You’re too optimistic!”

Guess he does not buy into “Sunny ways.”

#137 RimJabba on 01.20.16 at 11:33 pm

When the cabby is giving advice on investing, time to run. Well, I have people even dumber and lazier telling me how great real estate is, and how I need rentals or a house. I’ll be rich.

You honestly think Wynne or Trudeau are going to let the masses accumulate any wealth? They are the rainbow flag waving commie nazi’s.

I like Smoking Man’s idea, spot a trend and ride it hard. Well the trend I see is Canada is going communist. This isn’t the sickle and hammer type, this is the wave a rainbow flag or we send you to jail type.

Garth saved my arse, this blog is a great melting pot of idiots, genius, conspiracy theorists, and a few commies, ugh. Glad I sold, gives me more time to focus on trading and trend following.

Another trend is people over borrowing. Same with the government. It’ll end up like Greece eventually, after the currency is destroyed via inflation.

I’m going to get a shack in the woods and make moonshine and grow weed. I know the perfect spot too.

#138 Bottoms_Up on 01.20.16 at 11:33 pm

#43 Freedom First on 01.20.16 at 7:33 pm
—————————–
Do you have enough? What is enough?

I live in a safe country, in a safe city. I have food on the table. I have family. We have our health, and lots of love. I have enough.

#139 Bottoms_Up on 01.20.16 at 11:37 pm

#112 maure on 01.20.16 at 10:06 pm
———————–
You really should read the facts on global warming and climate change.

Exxon mobile believes the price for carbon pollution should be $60/tonne, higher than many other estimates.

#140 S.Bby on 01.20.16 at 11:46 pm

Nothing new here, but something to think about before buying a condo in BC:

Bramwell believes that over 90 per cent of stratas in B.C. could be facing the problem of too-low contingency funds. As well, he says, less than 50 per cent of stratas are operating without any sort of contingency fund at all.

http://www.cbc.ca/news/canada/british-columbia/strata-contingency-fund-too-small-1.3412642

#141 Ronaldo on 01.20.16 at 11:55 pm

#102 Blobby on 01.20.16 at 9:44 pm

”I’ve got $100k usd sitting in an American bank. Do you think it’s wise to hold on longer, or it’s time to cash in?”

At this point I believe you would be taking a gamble. Below is a chart showing what our dollar has done over the last few years. You can pretty much see where it’s headed for next.

http://www.tradingeconomics.com/canada/currency

#142 liquidincalgary on 01.21.16 at 12:05 am

according to peak oil theory, a major recession can push out peak oil by years or even decades.

#143 WUL on 01.21.16 at 12:05 am

Garth:

Oblige me with another comment. There is a glass half-full counterpoint to the dreary news about the TSX, Fort McMurray real estate prices, cauliflower, condos in False Creek and the Toronto subway system.

They are all a distraction from the ultimate embarrassment to we lovers of maple.

No Canadian NHL team will make the playoffs this year.

Oh, the humidity!!!!

#144 Bobs ur uncle on 01.21.16 at 12:05 am

#108 Me Holidays in Kanadastan on 01.20.16 at 9:56 pm

*sigh*

The point was that a good cross-section of music was always intended to flip the bird to the establishment and to anyone over 30 (or even 25), so no surprise if you don’t ‘get it’ – they frankly couldn’t give a flying f*ck what you think. EG Steely Dan – a band named after a *DILDO* from William S Burroughs’s Naked Lunch. Not appealing to the older crowd. Offended? Look it up.

And I never disparaged older music – just poked fun at old people’s reaction to it – which you have just very nicely illustrated.

#145 liquidincalgary on 01.21.16 at 12:16 am

JSS on 01.20.16 at 7:27 pm
Serious question. I know someone in Calgary who is a first-year electrician apprentice – mostly commercial, but some residential. He’s planning to go back to SAIT(?) for second-year electrician schooling.

Is he likely to have a tough time finding another job as a second-year electrician?

=========================================

should not be difficult to find employment at all. your employer is required to hold your position open until you return from trade school

#146 Bobs ur uncle on 01.21.16 at 12:22 am

#89 Godth on 01.20.16 at 9:21 pm

I like it. Kinda weird and trippy. Don’t try selling it to Me Holidays in Kanadastan tho… :-)

#147 The new normal - Realties.ca on 01.21.16 at 12:33 am

[…] Source: http://www.greaterfool.ca/2016/01/20/the-new-normal-4/ […]

#148 liquidincalgary on 01.21.16 at 12:34 am

46 and 2 on 01.20.16 at 8:22 pm
I think the provinces of AB and Sask should take that billion $ and use all of it to buy hundreds and hundreds of railway and highway tankers. Start clogging up everything with tankers full of bitumen east, west and south and then see how the peeps and politicians feel about pipelines.

=======================================

already happening. hardisty tank farm will double it’s capacity, for rail shipping. this additional storage/rail capacity equates 65% of what Keystone would have pumped through a pipeline. which method is safer (think lac-megantic)?

#149 Tony on 01.21.16 at 12:37 am

Re: #7 Marcus on 01.20.16 at 6:45 pm

All I know is Obama will see none of it but Yellen will see all of it.

#150 Tony on 01.21.16 at 12:43 am

Re: #6 Rick on 01.20.16 at 6:43 pm

If I had to pick anything I’d pick FRU on the TSX.

#151 MF on 01.21.16 at 12:51 am

#343 Godth on 01.20.16 at 5:43 pm

A little excessive but yes I agree about the standard of living falling in the next few decades as the effects of this debt bubble take hold.

I do believe that those of us who have shunned debt and have lived frugally with savings to show will be the winners though. Admittedly, it’s hard not to yield to temptation and emotion and take the plunge so the party will go on for a few more years at least.

#342 Nanaimo Bar on 01.20.16 at 5:39 pm

True. But at the time we were pounding our chests remarking at how “strong our banking system was”. It was full speed ahead and the hell with what the world was going through. It was the wrong direction but you cannot really blame anyone. The time to stop was around 2011.

Excuse my learning but what do you mean by bond boys salivating over an easy meal?

#341 Capt. Obvious on 01.20.16 at 5:33 pm

No they don’t realize it and these gen x are among the most delusional out there, to be frank. These guys feel invincible with built up equity gains and easy mortgages nearly paid off. Talk to any gen x at work and you will hear about new upgrades/renos, new purchases, rental properties all day etc.

They also started work prior to 2008/9 and represent the last decent entry point into the workforce.

Gen x is fragmented into three:

1) bought at perfect time, paid mortgage almost off, moved up maybe 1 or 2 times already.

2) bought at perfect time, made some gains out of luck and now have 10-15 properties and are delusional and about to be destroyed.

3) never bought in and is very resentful/jealous of those in 1 and 2 that did.

MF

#152 pwn3d on 01.21.16 at 12:57 am

At least he put UofW on the map!

So how does grads being successful in Silicon valley benefit Canada?

Remember a couple of decades ago going to the UofW math/science library to do some technical research on a summer Sunday. The only students there were Chinese. Was told later that they were sent by wealthy Taiwanese parents to get an advanced education then return to Taiwan. If true they didn’t benefit Canada at all.
—————
That’s when I would have been there, I can assure you there was lots of pasty people getting a BMath as well, it wasn’t as uni-racial as you’re making it to be.

#153 Ronaldo on 01.21.16 at 1:02 am

Low dollar good for some sectors. Might be time to look at companies such as Canfor and West Fraser again as a good candidates for capital appreciation. Or at least ETFs or Funds weighted in this sector.

http://business.financialpost.com/news/economy/bank-of-canadas-rate-cut-shocker-means-good-times-ahead-for-these-sectors

#154 pwn3d on 01.21.16 at 1:02 am

#85 rawdiswar on 01.20.16 at 9:03 pm
#37 45north

That’s because he is an actor. Glad I’m not the only one who sees it.

They’re all actors, right Garth?
—————
He’s not just an actor, he’s a bad one. His speeches are so lame, I can’t believe people can listen for more than a few seconds. It’s not really what he’s saying, but the way he says it and the sound of his voice it’s just so painfully melodramatic.

#155 pwn3d on 01.21.16 at 1:09 am

#88 Mark on 01.20.16 at 9:05 pm
Trudeau’s comments boosting Waterloo were actually quite unfortunate as Waterloo’s claim to fame isn’t superior academics, but rather, that they make every student in every program do multiple (low-paid) internships as a condition of graduating.
—————-
holy f@#$ you literally are wrong about everything. co-op is optional.

#156 Smartalox on 01.21.16 at 1:13 am

We’re doing some budgeting, and I’m looking for a calculator that will tell me how much in taxes I can avoid in exchange for making supplemental contributions to my RRSP, and filing a T1213 to reduce my income tax deducted at source.

Can anyone point me to an RRSP calculator for 2016, like this one here (from 2015): http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2015-RRSP-Savings

It’d be nice to be able to budget cash flow, and offset the cost of our additional contributions.

#157 MF on 01.21.16 at 1:13 am

Looks like the PPT might be a real entity for all you tinfoilers.

However it goes by the name Working Group on Financial Markets and is known only “colloquially” as the PPT.

PPT was a term coined in a Washington Post article which posited the group had gone beyond its mandate post 2008 and was buying stocks with government funds to prop up markets.

https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

Now I’m not a doomer by any means but there is definitely a palpable pessimism out there. Lots of people believe the market was propped up by the fed, and now that tightening has begun that fear has moved to the forefront. China and oil are worries, sure, but from what I see the real reason for this pullback is that the current bull run has been going on 7 years now. Everyone is just expecting the shoe to drop.

That’s my take.

MF

#158 pwn3d on 01.21.16 at 1:15 am

#123 Investorz on 01.20.16 at 10:38 pm
Deloitte is merging offices in Toronto. And now no one has a desk… you have to sign-in electronically to reserve it.
——————
They moving into a massive new building. Desk reservation has been going on for a long time. Because they are auditors a lot of staff often work in client buildings so it makes a lot of sense.

#159 MF on 01.21.16 at 1:34 am

#286 Fiction Peddler dlog 1472_1614 on 01.20.16 at 1:12 pm

Garth will hate this but ERX is a leveraged energy etf I am watching. It looks like oil might bottom soon around 22-25$. Not sure when but when oil does recover even a little this thing will rocket.

Also SPXL which is leveraged S and P 500.

Other than that might add to my balanced and diversified stuff (VV, VGK).

MF

#160 GMan on 01.21.16 at 3:15 am

Garth thank you for everything you do. I love the blog and all the free info. The Plunge team does exist though.

https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

https://www.treasury.gov/press-center/press-releases/Pages/hp1177.aspx

Keep up the good fight. Now if damn real estate would just go down.

#161 Freedom First on 01.21.16 at 3:17 am

#97 SWL1976

Great post! Personally, I think any human being in the world who is breeding today is either stupid, insane, or ignorant.

#162 Sam Cook on 01.21.16 at 3:26 am

“I bought more preferred shares ZPR now that we know Poloz isn’t cutting rates. Might have marked the bottom for preferred. Can’t know for sure, but there is a 6.5% dividend, paid monthly.”

Poloz might have held due to media pressure, as he likes to ham it up and Hollywood the meetings, but his insane tirade against the dollar ain’t over. The look on his face during the announcement was one of extreme anger over not getting his way, he was positively petulant.

I’m increasing my cash holdings monthly by not putting any more cash in and holding off reinvesting the dividends. My feeling is that Poloz and Trudeau have a depression qued up and we’ll see it soon enough.

As it stands the rate announcement did nothing. The C$ is still tanking in global markets against all currencies, no one will touch it with a steep discount. The hyperinflation hasn’t abated nor will it. The stagflation the Trudeau-Poloz team have imported will haunt us for years. What goes up from inflation always stays up, never comes down.

#163 Correction #132 Crazyfox... on 01.21.16 at 5:00 am

Forgetting Polar Ice core samples are we?

Google Holocene Climatic Optimum, Medieval Warm Period, Little Ice Age, 8.2 Kiloyear Event. Means we haven’t a clue how to model this, nor your buddies at CBC. Suffice to say if CBC were to show the Holocene on a Mercator projection, they would have us all running for a cave.

Panic, yes.

Currently, we have unprecedented levels of CO2 (incl. Polar Ice core samples going back 800,000 years) and no one knows what effect this will have (since we cannot model the past, what statistical certainty do we have of modeling the future?) None.

Why we need Kyoto and subsequent accords to succeed.

It is about the unprecedented levels of CO2 and having no reliable model to capture the effects of this.

Better to err on the conservative side and do our very best, than to do nothing.

So, do not pooh pooh other Commentators when per your link, you are just as informed as those you critique.

#164 family beagle on 01.21.16 at 5:50 am

#124 Whinepegger on 01.20.16 at 10:40 pm
Foul! Foul! I call foul!
Postmedia Network is running a story giving credit to Melissa Lantsman,
former director of communications for Harper finance minister Joe Oliver
as the originator of the ‘Cauliflower comparison’. Apparently she made a
Facebook post on January 13th bringing attention to the cost of
cauliflower. Anyone that follows this blog knows that Garth brought it up
(pun intended) on January 4th.
http://www.winnipegsun.com/2016/01/20/trudeau-davos-and-7-
cauliflower
The PCs are STILL bereft of new ideas, Garth. You should take more
care in copyrighting your posts.

…..

“The latest inflation figures are coming out on Friday, but in the
most recent data average price increases, while rising, remained
well below target at 1.4 per cent . But stories about the doubling
price of cauliflower and $3 cucumbers may be giving people a
magnified view of inflation.” – Don Pittis · The Business Unit · CBC News
29 Minutes Ago – http://www.cbc.ca/beta/news/business/bank-of-canada-monetary-policy-poloz-1.3411951

The Six Degrees of Garth Turner.

#165 ROCK BEATS PAPER on 01.21.16 at 6:46 am

“But logic tells us that with the US economy still growing, throwing off record job numbers, entering into a Presidential election year, with consumers using cheap gas savings to buy record numbers of SUVs and pickups, that this is no 2008. Not even close.”

Cool Aid, not logic!

Retail sales, wholesale sales, business investment and industrial production all currently show annual rates of growth that have previously been features of a recession, with all but retail sales showing annual decline. That last point is not due to the huge gas saving but in spite of it. The FED has admitted as much.

Auto sales were robust in 2015 because of record subprime auto loans coupled with massively extended lease periods. In other words, sales dramatically pulled forward. Still it was unimpressive.

Oh yeah, and unemployment (LAGGING) was seasonally adusted in December up by a whopping 280K jobs. What a joke. We are only waiting hear for the rotund lady to sing!

Perhaps I should only worry about Canada, because the rest of the world doesn’t matter to our exporting nation?

#166 ROCK BEATS PAPER on 01.21.16 at 6:55 am

Lets assume you owned 3 ETFs in your portfolio which you bought on December 31st.

MSCI World = 60%
I Shares Canadian Pref Index = 20%
I shares US Treasury Bond ETF = 20%

MSCI = -7%
CPD = -15%
Treasury = +1.8%

Return YTD = -7%

After the currency exchange where the Canadian dollar fell against US$ (and less against Euro etc…) Garth is correct to say a balanced portfolio is off 4-5%.

#167 George S on 01.21.16 at 7:05 am

Maybe it is a good thing that T2 is inexperienced, not ready yet, etc. because he will listen to advice from people that really understand what is going on in our economy rather than stick to the economic dogma that he has faith in over and over again like H1 did.

Cauliflower was likely a little bit high priced over the holiday season because it looks nice on vegetable and dip trays and tastes good raw with dip because it doesn’t have too much of a cabbagey flavour. You can notice the same pricing deal with chicken wings.

#168 acdel on 01.21.16 at 7:13 am

Quote: Calgary Mayor Naheed Nenshi says he doesn’t agree with Prime Minister Justin Trudeau’s comment that Canada should be known for its resourcefulness, not its resources.
Nenshi says he would not have used that language.

“We are still a resource-based economy. Our biggest export is still energy. And I do not see a path where that does not continue to be the case, so clearly we need to do what we can on market access,” said Nenshi.
______________________________________________
Until T2 understands this we are in for a long 4 years under his leadership; I suspect T2 received too many hits to his head in that boxing ring.

#169 pbrasseur on 01.21.16 at 7:21 am

There is no new normal, just the same old normal where humans get carried away and end up with corrections and occasional crisis.

That said Canada is screwed for a long time.

#170 Herb on 01.21.16 at 7:28 am

#143 WUL,

…the ultimate embarrassment to we lovers of maple.

No Canadian NHL team will make the playoffs this year.

It may be the ultimate embarrassment to suckers disporting themselves as “fans”, but the Sportainment Industry still is laughing all the way to the bank.

#171 CJBob on 01.21.16 at 7:28 am

I’m a tiny part of the reason the market bounced back yesterday, I bought XIC just after lunch time. I don’t take money in and out to try to time it, but I did a transfer of my TFSA from Tangerine to self-directed late last year which worked out well as I missed all the downside from the past few weeks. Yesterday I put the maple portion in the market and it will stay there for 15 years. I still have to pull the trigger on the US and Int’l portions.

#172 Ryan on 01.21.16 at 7:46 am

Garth or anybody,
What are some good oil etf’s to latch on to soon?

#173 gut check on 01.21.16 at 8:00 am

#161 Freedom First on 01.21.16 at 3:17 am
#97 SWL1976

Great post! Personally, I think any human being in the world who is breeding today is either stupid, insane, or ignorant.
**********************

Yeah, it’d be better if the good people just died out, right, FF?

Misanthropy of this degree needs to be countered by the rest of us whose minds, hearts and spirits are still operational. Thankfully all of the people who use the word “breeders” will be the first to go.

#174 maxx on 01.21.16 at 8:16 am

So glad I’ve been a saver for the past 45 years – since the day I got my first job at the golden arches.
When mutual funds became all the rage and Mr. Greenspan was lauded as the grand wizard of all things financial, I knew today would come. What a platinum opportunity to churn ordinary people’s money in the most deliciously opaque way. There is no more hormonal creature than an investor – more hormones than house lust. So the masses piled into the toilet bowl of mutual funds. Later, spliced freaks known as CDOs were born.
Today, most investors are scared witless and/or desperate. Even some of the saaviest of them. No one really knows what will happen next – monetary policy since 2001 and especially the GFC has been a complete failure. And hanging onto the edge of a cliff for 15 years and counting whilst multiplying the money supply does not, in my book, count as success.
The world is increasingly unpredictable, reaction time to incredible change is ever shorter, investment time horizons are shrinking and personal wealth recovery times longer as Gen-Xers and boomers age. The ugly cousin to this is that the young, on the other hand, are having the toughest time getting traction in life.
Global economies attempt to heal from the mightiest moronic decisions made about a quarter century earlier and it’s not working. Then there’s the “evolving” global economy, where opportunities for cutting quality, polluting, abusing people and thereby reducing costs abound.
Timing is not exactly everything – policy deployment velocity is it’s twin.
Central bankers have been in the dark on this one. Or too hormonal to apply it.
We all pay for it – lost wealth, greatly reduced fixed income after a lifetime of hard work, relentless bleeding of good jobs, austerity, compromised social programs, catalyzed illness and social instability.
The list grows with each passing failed attempt to “fix” the problem.
There but for the grace of monetary policy go I?
Sadly, very sadly, not a chance.

#175 WallOfWorry on 01.21.16 at 8:17 am

I know that most here want to point to the astounding drop in oil prices as the basis for suggesting anarchy for the Canadian economy. However, the economic results in Ontario for the last quarter may suggest something other is going on?

Fact: The latest quarter GDP growth (annualized) came in at 3.5% which exceeds current growth of US
Fact: The government debt is concerning but still lower than current US government debt levels

So….as this blog is full of extremists…what do you say? (Can’t wait to hear what Leo Tolstoy has to say…)

“The third quarter economic results, published on Jan. 15, showed the province had real GDP growth of 0.9 per cent from July to September, an annualized rate of 3.5 per cent. That followed a much slower growth rate of 0.4 per cent in the second quarter.

“Importantly, third quarter growth was broad-based, with household spending, business investment, and net exports all contributing to the overall increase – a positive sign for potentially stronger and more balanced economic growth in 2016,” states the commentary from David West, FAO chief economist, and Luon Ngo, FAO senior economist.”

#176 Dups on 01.21.16 at 8:28 am

And the Putin is done. The markets should see some relief soon as more positive news unfold in politics.

#177 crowdedelevatorfartz on 01.21.16 at 8:29 am

@#134 Godth
“just die already you arrogant, pretentious douchebag.
++++++++++++++++++++++++++++++++++++

Kanadastan hit a nerve did he?

#178 BC Working Guy on 01.21.16 at 8:36 am

Tough talk from Rona Ambrose on housing. From the Vancouver Sun:

“I was talking to a cab driver here, asking him how does he feel about (the fact) that a $1.5-million home is a cheap home here, apparently,” Ambrose said at the meeting. “And he said, ‘I will never get to live in Vancouver. I will never be able to live in the city I was born in.’ And I thought, that’s really sad … That’s the time when you have to rethink that maybe the government should do something, when people who are born here can’t live here anymore.”

http://www.vancouversun.com/life/time+feds+address+high+real+estate+prices+rona+ambrose/11665265/story.html

I was born in Vancouver and can’t afford to live there. It sure is nice to hear a politician recognize the problem. I am a socialist who votes NDP but if the Conservatives were to put a ban on foreign ownership or a tax on foreign ownership, I would vote Conservative in a heart beat.

#179 Still Confused on 01.21.16 at 8:41 am

Canadian Centre for Policy Alternatives says no government debt crisis in Ontario. Hopefully this shuts all you right leaning scaremongerers up.

#180 fancy_pants on 01.21.16 at 8:42 am

veggies are getting expensive but at least the standard staples (for most) like cookies and chips are holding steady. And if vitamin D deficiency is making you anxious or depressed, it’s nothing a selfie and a dubie can’t fix, right?

#181 Dups on 01.21.16 at 8:49 am

If the price of oil now is similar to 2008 low; would that mean that the markets are done correcting?

http://www.fool.com/investing/general/2015/12/19/oil-prices-is-recent-history-poised-to-repeat-itse.aspx

#182 Robert on 01.21.16 at 8:54 am

No HAM in YVR, only happens in the big apple I guess.http://www.newyorker.com/news/daily-comment/the-kleptocrat-in-apartment-b?mbid=gnep&intcid=gnep&google_editors_picks=true

#183 saskatoon on 01.21.16 at 9:08 am

#178 BC Working Guy

“I am a socialist who votes NDP but if the Conservatives were to put a ban on foreign ownership or a tax on foreign ownership, I would vote Conservative in a heart beat.”

typical.

another socialist devoid of moral principles.

r-selected rabbit.

#184 Penny Henny on 01.21.16 at 9:16 am

Meanwhile in Etobicoke. Cauliflower $1.99 each at Food Basics. Gotta run.

#185 The Other Chris on 01.21.16 at 9:17 am

Finally, some positive news… at least the growth numbers for Ontario were solid. Maybe there is finally some minor uptick in manufacturing. And Apple is also finally setting up a software development office in Kanata.

(I don’t buy the CCPA’s paper released today about Ontario’s debt levels though.)

#186 what la chingada on 01.21.16 at 9:18 am

#132 Crazyfox

that single part may be true, but the fact is that no one has actually proved that it this been caused by humans.

if you have proof, please post link to it here.

#187 Godth on 01.21.16 at 9:24 am

Donald Trump and the Politics of Resentment
http://thearchdruidreport.blogspot.ca/2016/01/donald-trump-and-politics-of-resentment.html

#188 IHCTD9 on 01.21.16 at 9:38 am

#30 Mark on 01.20.16 at 7:05 pm

The Harper home renovation tax credit was a disastrous example of federal government spending that accomplished nothing for the economy.

__________________________________________

You mean the HR tax credit that both the Libs and NDP supported 100%?

It was a rousing success, and one of Harpers most popular tax credits. Canadians spent 20 billion more on renovating their existing homes than they did building new ones. Home renos were 3.6 of our GDP in 2014, well above historic norms. I moved a new deck build to top of the to do list and took advantage of it myself.

Compare that to Trudeau’s last tax credit which left anyone making less than 45K out in the cold, and simultaneously blew 1.4 billion down the shitter because he can’t count…

#189 Godth on 01.21.16 at 9:42 am

#177 crowdedelevatorfartz on 01.21.16 at 8:29 am
So Long
https://www.youtube.com/watch?v=1ATWC9oAZfk

#190 Jason Haule on 01.21.16 at 9:53 am

To Still Confused

What about Don Drummond’s report. He said Greece was like Ontario 25 years prior to the mess it is in now.

It does not matter what, who, how great you look now accumulating too much debt and spending too much money is not a good thing.

#191 Andrew Ross on 01.21.16 at 9:55 am

#179 if you beleive Sheila Block, senior economist with the left-leaning Canadian Centre for Policy Alternatives, is the author of the study, “No Crisis on the Horizon: Ontario Debt, 1990-2015.” I have some swampland for you.
Wynne of the left is trotting this out to try and trick the sheeple of Ontario and you have fallen hard again. So sad.
Wynne and her merry band of idiots (Sandals, Mathews, Sousa, Duguid etc. ) have been systematically destroying this province two years and we can be rid of them lets give them their pink slips.

#192 BC Working Guy on 01.21.16 at 10:00 am

@ Godth #182:

Wow! Wow! Wow! That is the best thing I have read on the internet, I think, ever! Definitely one to save to the hard drive! I am a member of the wage class in Canada and I say that this paragraph is pure gold and one of the truist things I ever read on the internet:

“There’s a further barrier, though, and that’s the response of the salary class across the board—left, right, middle, you name it—to any attempt by the wage class to bring up the issues that matter to it. On the rare occasions when this happens in the public sphere, the spokespeople of the wage class get shouted down with a double helping of the sneering mockery I discussed toward the beginning of this post. The same thing happens on a different scale on those occasions when the same thing happens in private. If you doubt this—and you probably do, if you belong to the salary class—try this experiment: get a bunch of your salary class friends together in some casual context and get them talking about ordinary American working guys. What you’ll hear will range from crude caricatures and one-dimensional stereotypes right on up to bona fide hate speech. People in the wage class are aware of this; they’ve heard it all; they’ve been called stupid, ignorant, etc., ad nauseam for failing to agree with whatever bit of self-serving dogma some representative of the salary class tried to push on them.

And that, dear reader, is where Donald Trump comes in.”

http://thearchdruidreport.blogspot.ca/2016/01/donald-trump-and-politics-of-resentment.html

#193 Hope & Change (Canada) on 01.21.16 at 10:00 am

I was born in Vancouver and can’t afford to live there. It sure is nice to hear a politician recognize the problem. I am a socialist who votes NDP but if the Conservatives were to put a ban on foreign ownership or a tax on foreign ownership, I would vote Conservative in a heart beat.

It’s not really a problem. I mean, it’s your problem, but nobody else cares where you can afford to live.

My grand parents lost their home to wars (twice) against the commies. Then lived like slaves for almost half a century because of people with your thought processes and socialist ideas.

You think I care that YOU are to poor to afford a crap shack in Vancouver. Not even close.

#194 Andrew Ross on 01.21.16 at 10:01 am

Not a fan of Brown but Howarth caused Wynnes majority and was bamboozled by her repeatedly – it was always a stretch goal love him or hate him Brown will be the only positive option next time.

#195 Andrew Ross on 01.21.16 at 10:02 am

Stretch goal can we get competent goverment in Ontario

#196 Andrew Ross on 01.21.16 at 10:06 am

#188 the other thing it did was bring under the table companies and work out in the light. To get the credit you had to use someone that was registered and paid tax. Increased tax revenues for the gov. Smart like a fox as opposed to well our current leader who didn’t understand the tax code and now we have an additional $1.4 B deficit per year. Good job CDN voters you picked a real winner

#197 Jason Haule on 01.21.16 at 10:15 am

I just heard on 680 news the business report and the radio announcer mentioned that the TSX is at 2006 levels and a lost of 10 years as where the TSX is.

The TSX presently at 11,817, it is pretty close to the high in year 2000 at around 11,423. It is only up about 3.4% from today’s TSX level.

The TSX is down about 21% or 3,183 points from the 2007 high of 15,000.

That would make it cheap, right? — Garth

#198 BC Working Guy on 01.21.16 at 10:20 am

@ saskatoon #183

“another socialist devoid of moral principles.”

Thank you. You just brilliantly proved the point being made in the link in post #187 by Godth. One of the points made in that article about the rise of Trump and the politics of resentment is that when a member of the wage class tries to talk about something important to them, the salary/investment class sneers at them.

#199 Oil's In Everything on 01.21.16 at 10:20 am

So much for peak oil.

The globe currently spins on diet of 96million barrels of oil a day. We’ll go to the bottom of an oceans, separate it from grains of sand, crack the rock below our feet to capture crude. Name a product or service, crude is involved, the great capacitive input.

Solar is a marginal energy vertical source. As this new realized energy vertical establishes roots in the energy space and grows, it changes how we think about crude.

As the cost to extract photo-energy decreases and our ability to store and transfer such energy increases, the cost factors will be absolute.

Less than 1% of total global energy today comes from solar. An estimate of 2% global output will be reached many factors sooner than the first 1% and so forth.

The entire global oil complex is valued in the 10’s of trillions, the reverberations from expensive oil to inexpensive oil are forcing a new paradigm.

#200 Herb on 01.21.16 at 10:26 am

#183 Sask,

if you ever figure out what moral principles have to do with politics, let me know.

Your Neandercons are living proof that the two shall never meet, except on the odd occasion that “moral principles” provide a useful fig leaf for politics.

#201 BC Working Guy on 01.21.16 at 10:33 am

@183 saskatoon:

PS: As a working class wage earner born in Canada socialist, why should I have any loyalty to the NDP??? They sold out my kind in favour of identity politics long ago. NDP will never take a stand against foreign ownership or many other issues important to working class people in Vancouver and elsewhere. If the Conservatives take a stand, I just might vote for them. Would you rather I vote for the Liberals?

#202 Clochard Kuujjuaq vs Wall Street on 01.21.16 at 10:33 am

I like tremendously the pe-ratio.png chart. It proves that our gracious host has a keen sense of humour!

#203 Herb on 01.21.16 at 10:34 am

#178 BC Working Guy,

Rona Ambrose: “… maybe the government should do something, when people who are born here can’t live here anymore.”

But Rona, Dear, your government did something. It goosed the residential housing market by reducing mortgage requirements and interest rates for most of its nine years.

#204 Fine Wild Roasted Gonads on 01.21.16 at 10:39 am

#161 Freedom First on 01.21.16 at 3:17 am

#97 SWL1976

Great post! Personally, I think any human being in the world who is breeding today is either stupid, insane, or ignorant.
———
Here’s a term you are not familiar with.. they would be humans.

#205 Mike in Edm on 01.21.16 at 10:40 am

My wife’s small employer (in multiple cdn cities, but might only have 100 people working for them) just laid off another handful in Calgary and 1 in Ontario.

The news on the heart of O&G in Alberta where I work is most drilling companies obviously have drilling activity in their 2016 budgets, but instead of roaring through it right now (much easier to access all these locations when everything is frozen instead of swampy) when oil us sub $30, they’re holding off until the fall when they “hope it’ll be around $40″…. My bosses exact words yesterday which I had to laugh at. Imagine the day when the O&G industry is hoping for $40 oil. FML

#206 Daisy Mae on 01.21.16 at 10:43 am

#188: “….was a rousing success, and one of Harpers most popular tax credits. Canadians spent 20 billion more on renovating their existing homes…”

**********************

A ‘rousing success’? And our personal debt now stands at $1.74 per $1.00 earned income. Another real smart PC move.

#207 Berniebee on 01.21.16 at 10:43 am

#168 acdel “Calgary Mayor Naheed Nenshi says he doesn’t agree with Prime Minister Justin Trudeau’s comment that Canada should be known for its resourcefulness”

I am shocked, SHOCKED, that the mayor of Gasgary would say such a thing!

#208 JimH on 01.21.16 at 10:48 am

#7 Marcus on 01.20.16 at 6:45 pm
“Prediction USA: Total 50% loss in stock valuations from the high. 40% loss in real estate valuations and a loss of 30% of the value of American savings by the end of 2017.”
================================
Marcus; your lofty but silly little ‘prediction’ adds about as much value and appeal to this blog as would a turd in a wedding cake.

I’ll bet you have absolutely no skin in the game, do you? Just the same, if I’m wrong, perhaps you’d be kind enough to inform we ignorant fools of:

1. exactly how you arrived at this proclamation.

2. your investment strategy; exactly and in detail how you are going to reap the windfall profits during the implosion you so confidently predict.

#209 AB Boxster on 01.21.16 at 10:49 am

So Quebec will not support an oil pipeline to deliver AB product East…
And BC will not support a pipeline to deliver AB product west….
So Alberta cannot sell its products and is being forced to accept less than world price for oil..

Pretty much what the original NEP of the 80’s was designed to achieve.
Lets just call it NEP2.

And, Alberta will still be sending more taxes to the federal gov’t than it receives back, going to those provinces that are blocking delivery of AB oil.

Explain to us friendly Albertans the benefits of being in this Canadian confederation again?

Anyone with a cogent argument?

#210 Nagraj on 01.21.16 at 10:54 am

“As goes Alberta, so leans the nation.”

There’s dust on yer Bible, my good man, dust on yer Bible.
Because it says right there in GENESIS I, 28:99 “And God said, Let there be Alberta. And there was Alberta. And then He said, Let it grow wheat and cowboys.” Nowhere, eh, is “bitumen” mentioned, neither in the Old nor the New Testament.
But the people of Bay Street listenethed not.
Gleefully squealing “THARRS GOLD IN THEM THERE POISON PITS!” they builded towers of junk bonds in this Alberta place, upsetting God’s ordained order of cows and cowboys – which junky towers are now see-through towers . . . and there is much wailing and gnashing of teeth.

Alberta, which is evidently somewhere in the middle of nowhere (north of Montana maybe) was a divine afterthought and never intended to be a home for Roy Rogers and Dale Evans and Trigger either. Their “Stampede” is a conceit too. Let Alberta revert – to what it was meant to be: a coupla cold ranches with three or four families as population.

#211 Basil Fawlty on 01.21.16 at 11:04 am

No Peak Oil, since prices are currently low? Not a chance, do some homework. It is all about Energy Returned on Energy Invested. The return has been falling for years, as the low hanging fruit is depleting rapidly. Why do you think we are fracking and mining the tar sands?

#212 Cici on 01.21.16 at 11:05 am

In other news, Google has declared itself a “dog company.”

http://finance.yahoo.com/news/google-officially-dog-company-193741749.html

#213 Briana on 01.21.16 at 11:11 am

I am aware this isn’t 2008 again….but from July 2008 to March 2009 the CAD dropped 22%, WTI plummeted from a peak around $140 in 2008 to $40 in 2009. Of course, we all know about the US housing and stock market correction. We did not see the US style housing correction in Canada, but there was definitely a noticeable weakening in prices and sales in early to mid 2009.

Any thoughts how the latest developments could affect YYZ/YVR real estate and when??

#214 Ontario's Left Coast on 01.21.16 at 11:21 am

Good luck to all the Forex traders who are shorting CAD today… yikers!

#215 Evangeline on 01.21.16 at 11:27 am

Day started cloudy and dismal and the Dow, S&P 500 and NASDAQ were red. Now the sky is blue and the sun is shining, and just checked — yup, the Dow, S&P 500 and NASDAQ are showing green.

#216 chapter 9 on 01.21.16 at 11:29 am

#55 David Freeman
Justin and Poloz have sold us out.
How the weak loonie is boosting Canadian resort real estate sales among US buyers. Your kids only future is cleaning toilets for tourists.

Garbage story created by realtors not a single sale has taken place. Garth

Living in Banff or any national park there is the “need to reside” regulation. The only real buyers of properties are those who are going to be primarily employed or operate a business or an investor who buys a property and rents it out to tenants who are eligible residents. Recreational use,have to buy outside the park boundary. Any reference to Banff in this story should have been deleted, real estate folks in Canmore know about these regulations!

#217 Alberta Guy on 01.21.16 at 11:55 am

xpf or cpd? which is better given current market conditions ? trade bottom forming?

#218 Bottoms_Up on 01.21.16 at 12:02 pm

#186 what la chingada on 01.21.16 at 9:18 am

that single part may be true, but the fact is that no one has actually proved that it this been caused by humans.

if you have proof, please post link to it here.
================================

Here’s the proof if you care to read it:

https://www.ipcc.ch/report/ar5/syr/mindex.shtml

(click ‘new’ then ‘summary report for policy makers’)

Science begins with theories…and then once enough data accumulate, something becomes fact. It is now a fact that humans are the biggest contributor (ie, the biggest cause) of global warming and climate change.

#219 Penny Henny on 01.21.16 at 12:03 pm

CAD 70.02. Up 1.5%. who was on the right side of that trade?

#220 chapter 9 on 01.21.16 at 12:06 pm

Correction on earlier post, article was pertaining to Canmore and not Banff, regarding US sales. Dropped the ball on that one !!

#221 Prairie Oysters for all on 01.21.16 at 12:07 pm

#210 Nagraj on 01.21.16 at 10:54 am

“As goes Alberta, so leans the nation.”

There’s dust on yer Bible, my good man, dust on yer Bible.
Because it says right there in GENESIS I, 28:99 “And God said, Let there be Alberta. And there was Alberta. And then He said, Let it grow wheat and cowboys.” Nowhere, eh, is “bitumen” mentioned, neither in the Old nor the New Testament.
But the people of Bay Street listenethed not.
Gleefully squealing “THARRS GOLD IN THEM THERE POISON PITS!” they builded towers of junk bonds in this Alberta place, upsetting God’s ordained order of cows and cowboys – which junky towers are now see-through towers . . . and there is much wailing and gnashing of teeth.

Alberta, which is evidently somewhere in the middle of nowhere (north of Montana maybe) was a divine afterthought and never intended to be a home for Roy Rogers and Dale Evans and Trigger either. Their “Stampede” is a conceit too. Let Alberta revert – to what it was meant to be: a coupla cold ranches with three or four families as population.

Do you ride a horse and buggy is your metrosexual world dude.

#222 AB Boxster on 01.21.16 at 12:14 pm

#215 Evangeline on 01.21.16 at 11:27 am
the sky is blue and the sun is shining
————————————————–
Classic dead cat bounce.

Beware!

#223 Crazyfox on 01.21.16 at 12:16 pm

#163 Correction #132 Crazyfox… on 01.21.16 at 5:00 am

https://en.wikipedia.org/wiki/Holocene_climatic_optimum

Googled your suggestion and in the link you will find the Milankovich theory as the explanation to the warming period 9000 to 5000 years BC in the link above. What the Milankovich theory doesn’t explain, (please look this up, it will help you understand the error of your ways) is why the earth is warming now. The planet should be getting colder according to Earths orbital variations, by far and away the most significant influence on climate change, more so than atmospheric conditions when we get right to it. That is cause for alarm.

Oh, and this if I may quote you “(since we cannot model the past, what statistical certainty do we have of modeling the future?)”. Makes no sense. We can model the past. We have limits of course. We know in theory what Earths planet orbital variations have been and we have a history though ice assays from Antartica of what our atmosphere has been going back 850,000 years but going back farther, we don’t know with certainty what our atmosphere and orbit has been. WE do know with certainty however, when atmospheric C02 has been higher than 400 ppm through past ocean acidification leading to mass extinction events. We aren’t flying totally blind.

In modelling the past, we have some degree of certainty in terms of what orbital and atmospheric changes will do to climate going forward including our own future as the world lip syncs a brave fight towards against made climate change but does little in practice about it.

While I’m on the subject of personal angst, what peeves me is how the majority of us are so absorbed with their micro environments that we don’t pay much attention to the macro. The average Joe is deer in headlights when we try (pick ’em, economics, politics, science) and we easily quit telling ourselves we can’t influence the macro (which isn’t true of course, we all influence it, its just that none of us can control it so many of us give up right there) when we come up short of our efforts. We find quickly enough that it will take a universal effort and that too, is disheartening because humanity as a whole is too weak, too shortsighted, too blinded by greed and self interests, too conditioned by our superior/inferior egos run a muck and set in our ways to look hard enough to realize just how much of a threat human made climate change and reckless human environmental degradation overall truly is until it hurts us personally. Then, as they say, its too late.

There is too large a minority of mindsets of the generations in power in this age that will act in their own self interests over the greater good, too much in the way of poor mental health overall, for humanity overall for humanity to change course on its own. That is what I, in my short 50 years, have seen so far and I see nothing that makes me think this will change.

Without some kind of intervention, humanity will continue on with its reckless ways and the majority of us won’t make it. Can’t say when. 20, 30, 40 years, maybe less. Certainly not cheering it on as some do, (did I mention poor mental health?) but its coming and like I say, without some kind of intervention…

Just ask yourselves who read this, what cheaper gas does in the mindset of the consumer who can buy a new car that gets 40 to 50 mpg’s for $20 K or an electric car for $ 40+ K with a range of less than 200 km’s. The worst thing that can happen in the fight against climate change is cheap oil. Green tech is priced out of the market place and at the end of the day, the self interested consumer, some driven to choice by affordability alone, win the day.

If we only knew how expensive that will be for us all going forward.

#224 AB Boxster on 01.21.16 at 12:19 pm

#210 Nagraj on 01.21.16 at 10:54 am
#209 AB Boxster on 01.21.16 at 10:49 am

“As goes Alberta, so leans the nation.”
———————————————————
OK, thanks Nagraj.

The results so far :

Alberta benefits as a member of confederation: 0
Alberta is screwed as a member of confederation: 1

Keep ’em coming.

#225 Godth on 01.21.16 at 12:38 pm

#192 BC Working Guy on 01.21.16 at 10:00 am

The good news is you have 7 or 8 yrs. worth of back reading you can do then. He counts himself a Burkean conservative, in other words not the assholes we’re familiar with. He’s extremely insightful too.

How explosive is this?
http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined

https://www.youtube.com/watch?v=_3c8l322U4g

https://www.youtube.com/watch?v=gNZshwPXP_k

#226 common sense on 01.21.16 at 12:39 pm

#214 West Coast

Thank god I got out yesterday!!

At the bottom? — Garth

#227 common sense on 01.21.16 at 12:43 pm

Got to love the PPT..

Record inventory of oil, low demand, higher production, major credit risks and oil SPIKES.

Free market, what free market?

It’s all just a QE, China pumping market and we are mear pawns…..

#228 Ponzius Pilatus on 01.21.16 at 12:47 pm

#102 Blobby

I’ve got $100k usd sitting in an American bank. Do you think it’s wise to hold on longer, or it’s time to cash in?

Thoughts?
———————
Blow it in Las Vegas.
At least you have a great story to tell your grand kids.

#229 Ponzius Pilatus on 01.21.16 at 12:49 pm

#133 ANON on 01.20.16 at 11:24 pm
Great, now we have also a cauliflower mania to deal with, on top of everything else. Any ways to short this?
————-
Go long on turnips.

#230 Ponzius Pilatus on 01.21.16 at 12:54 pm

Any thoughts on who is a better financial predictor:
The cabby or your barber?
Personally, I go with my shoe shine artist.
He also spits on my shoes.
Glorious shine every time.

#231 ALBERTASTROPHE on 01.21.16 at 12:55 pm

#209 AB Boxster

Explain to us friendly Albertans the benefits of being in this Canadian confederation again?

Anyone with a cogent argument?
—————————————

Sadly for us Albertans, the most relevant advice comes from Jim Prentice.

“Look in the mirror”

Like delusional idiots, we Albertan voters have chosen decades of Conservative financial imbeciles to run our province like a one-trick Ponzi scheme.

Now the trick is out of fashion. And unlike Norway, our retarded Conservative leaders haven’t saved nearly a trillion $ to tide us over. Only pennies.

We’ve spent it all, all those billions in oil revenue, on unnecessary tax cuts for the wealthiest.

Now we’re broke.

And screwed.

And we completely ignored that the times were changing around oil and climate.

I admit it. We have all been idiots in Alberta. We think we are the smartest of Canadians, yet really we’ve been among the dumbest. Even those who disagreed with the Conservatives should have been smarter and left years ago.

Alberta now faces enormous social disruption, a spiral into nowhere for real estate values, unemployment, divorce, suicide, and crime.

It’s no surprise the other provinces won’t bail us out with some outdated energy pipeline or other.

Look in the mirror, AB Boxster.

Look in the mirror.

#232 Lorne on 01.21.16 at 12:59 pm

#178 BC Working guy
“I was born in Vancouver and can’t afford to live there. It sure is nice to hear a politician recognize the problem. I am a socialist who votes NDP but if the Conservatives were to put a ban on foreign ownership or a tax on foreign ownership, I would vote Conservative in a heart beat.”
………………………..
You realize, of course, that this is the Party that got us into this mess in the first place, by allowing 0% down, 40 year mortgages….so we would not follow the US, during the financial crisis, and allow our housing market to crater in most markets. This very questionable strategy of allowing anybody to purchase a home, has flamed the crisis we now find ourself in whereas the US took the hit then and has come out of it just fine. We just pushed the pain down the road…and it has now arrived!

#233 SWL1976 on 01.21.16 at 1:03 pm

#223 Crazyfox – Yeah Crazyfox

Great post

You get it. Let’s hope it’s contagious

#234 conan on 01.21.16 at 1:18 pm

#211 Basil Fawlty on 01.21.16 at 11:04 am

Call me crazy, a loon, or disturbed. I do not believe in peak oil. Oil seems to be everywhere. Huge deposits are found miles beneath the ocean.

I am sort of leaning in an insane way to thinking that the Earth produces it over time. Or, the dinosaurs dug huge holes and flung themselves into these pits in the millions.

Low oil is here to stay. Many countries around the World borrowed money based on reserves in the ground. The bankers are calling……drill baby drill and they must obey.

#235 CJBob on 01.21.16 at 1:18 pm

So when the CAD$ is dropping your US and Int’l investments go up in value due to the exchange rate.

If I believe the CAD$ will be stable or going back up (or generally to balance things out), which hedged ETF’s should I be looking at?

#236 AB Boxster on 01.21.16 at 1:19 pm

#231 ALBERTASTROPHE on 01.21.16 at 12:55 pm

Look in the mirror.

————————-
Thanks ALBERTASTROPHE.
Albertan’s hoped that by throwing out the conservative gov’t that the NDP might actually make a difference.
Sadly, they are pathetic.

Yet you miss the point of the exercise.
Alberta wants a fair price for its product and cannot get it. We are not asking for handouts, (well except for Mr. Nenshi)

The question has nothing to do with how much Albertan’s have personally saved, or whether we should speak Norwegian. It has nothing to do with being broke, or screwed by voting for idiot conservatives or pathetic NDP.

It only ask if we should be able to sell our products to the world.

The question is, what benefit, is there being in confederation if our national partners say ‘ screw you’?

I’ll put you down for a ‘negative’.

Alberta benefits as a member of confederation: 0
Alberta is screwed as a member of confederation: 2

Keep ’em coming.

#237 Still Confused on 01.21.16 at 1:21 pm

#226 Common Sense

I bought some more S&P 500 and BNS yesterday.

Still looking at juicy XCS.

#238 Godth on 01.21.16 at 1:28 pm

#223 Crazyfox on 01.21.16 at 12:16 pm

Yup. I’m not so sure about the climate models but it doesn’t really matter, we’re a volcano of pollution going off 24/7 – 365. For what? Keeping up with the Jones’s, Conspicuous consumption, an economy based on infinite growth on an obviously finite planet? It’s a mass suicide cult.

“Green tech.” isn’t very green either, more techno-narcissism, and it will never replace fossil fuels.

The worldwide ocean fisheries will completely collapse by about 2040-2050 (maybe sooner as scarcity and greed kick in). That is a hard limit that won’t be debatable as 2-3 billion people won’t have a basic staple food to rely on. Fresh water is another hard reality that won’t be debatable.

Meanwhile we’re so wasteful it’s incredible. Planned Obsolescence (for ex.) is such a crime against life, and yet on it goes on and on. This spaceship (earth) is an insane asylum and the management are criminals.
https://www.youtube.com/watch?v=hLV09_FDnIQ&list=PLNiRcMjUGDJcTN3INln476xt_6Wvg3QNs&index=4

#239 IHCTD9 on 01.21.16 at 1:36 pm

#206 Daisy Mae on 01.21.16 at 10:43 am

A ‘rousing success’? And our personal debt now stands at $1.74 per $1.00 earned income. Another real smart PC move.
____________________________________________

I see.

So if I decided to bury myself in consumer and mortgage debt by my own hand – that’s Harpers fault?

Daisy, I understand partisanship, hey – I’m not innocent myself. But do you actually believe what you posted there?

A couple guys I work with bought new cars, trucks, houses, ATV’s etc using credit. They now have some serious debt to pay all these things off.

Do you blame Harper for my co-workers personal debts?

Clear short answer please.

#240 James2 on 01.21.16 at 1:37 pm

#219 Penny Henny on 01.21.16 at 12:03 pm

CAD 70.02. Up 1.5%. who was on the right side of that trade?
…………………………………………………………………
Well Smoking Man has gone to the ground. Not a pinch, nothing, perhaps he is in a groggy drunken stupor? Must have missed the ques on BOC when sitting at his casino bar, blah, blah, blah, blah blah J D drinking, blah, hotties chasing the great smoking man, blah, listening to whatever on the buds, now listen here you schooled idiots, blah, blah. Hick up, burp !#$^&*@.

#241 gut check on 01.21.16 at 1:40 pm

#198 BC Working Guy on 01.21.16 at 10:20 am
@ saskatoon #183

“another socialist devoid of moral principles.”

Thank you. You just brilliantly proved the point being made in the link in post #187 by Godth. One of the points made in that article about the rise of Trump and the politics of resentment is that when a member of the wage class tries to talk about something important to them, the salary/investment class sneers at them.

*******************

It is rife, and it’s not going to change. I’ve decided that we have to just go AROUND them. Let them have their delusions.

#242 Randy on 01.21.16 at 1:45 pm

Mythical?? PPT. Again with the insults. Tin Foil hats. The world needs a good culling of most of the nitwits who use personal insults as their ONLY defence to overwhelming data.

Google “president’s working group on financials”

Presidential Executive Order 12631

https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

You and the people who listen to your diversified ‘advice’ are going to lose EVERYTHING.
Ha Ha. What is the MER on $0??

#243 Philburt on 01.21.16 at 1:46 pm

#114 Smoky. Writers and booze.
Rply
Yes and they all die of wet brain and cirrhosis of the liver. Go easy man Im even on the waghon after xmas!!

Ok so loonie and gas way oversold. Bounce is due.
Loonie going lower for sure so we can get a Canuklehead reboot. Canada will do beter accept for Altberta
Rates WILL go down further here EOS and the bid will stay up RE accept for ALT.
Garth Ive been watching CPD ZPR and it doesn’t get any better. Grabbed $100k this am.
The loonie sh$tting the bed will BOOST the economy. Accept 403. Thier in big doodoo for long time. No major recovery in Commodities for eons. Ther is lots of capacity that will keep the damper down. China and emering economies and in trouble for some time. Its easy math.
So the very high USD will now hurt the US and the opposite for Canada.
If you doubt this you may want to print it to remind you not to list to your broker next time. I fired all mine long time ago.

#244 saskatoon on 01.21.16 at 1:47 pm

#201 BC Working Guy

you shift moral alignment depending on the situation that best suits you.

this is unethical.

you are without moral principles.

consequently, this is why you identify as “socialist”.

#200 Herb

INDIVIDUAL moral principles.

you obviously can’t understand this–since you have no personal moral principles.

this is why you suffer from emotional dissonance, logical inconsistency, and “left-wing” disease.

incidentally, it is why you look to others to “validate” your opinions, rather than employ logic to arrive at your own conclusions–independently.

group think.

you can remedy this, if you really want to–but until such time, it will remain an ongoing weakness of your character.

#245 acdel on 01.21.16 at 1:54 pm

#207 Berniebee
#168 acdel “Calgary Mayor Naheed Nenshi says he doesn’t agree with Prime Minister Justin Trudeau’s comment that Canada should be known for its resourcefulness”

I am shocked, SHOCKED, that the mayor of Gasgary would say such a thing!
—————————————————————–
Actually he said:
Quote: Calgary Mayor Naheed Nenshi says he doesn’t agree with Prime Minister Justin Trudeau’s comment that Canada should be known for its resourcefulness, not its resources.
Nenshi says he would not have used that language.

“We are still a resource-based economy. Our biggest export is still energy. And I do not see a path where that does not continue to be the case, so clearly we need to do what we can on market access,” said Nenshi.
—————————————————————–Nice try! He’s right, it will take decades if not longer to change, in the mean time the world needs our resources as the population is still increasing and would like the same standard of living as the rest of us.

#246 Godth on 01.21.16 at 1:55 pm

#233 SWL1976 on 01.21.16 at 1:03 pm

btw, I’ll be at ol’ Ron’s @ about 1:30 -40. I’m taking the bus as I know what we get up to, in fact I already started. :0
https://www.youtube.com/watch?v=LsnFvEQYJPU

#247 Philburt on 01.21.16 at 2:02 pm

And sory 4 the typos always on dmall fon usually in hot tube

#248 Godth on 01.21.16 at 2:03 pm

#242 gut check on 01.21.16 at 1:40 pm

Ragnarök, let them do their worst. It’s painful though as we’ve seen it all before and theoretically we could benefit from learning from past mistakes. Alas, we’re all too human.
https://www.youtube.com/watch?v=HKFDYdaSyng

#249 Prairie Oysters for All on 01.21.16 at 2:05 pm

#238 Godth on 01.21.16 at 1:28 pm

#223 Crazyfox on 01.21.16 at 12:16 pm

Yup. I’m not so sure about the climate models but it doesn’t really matter, we’re a volcano of pollution going off 24/7 – 365. For what? Keeping up with the Jones’s, Conspicuous consumption, an economy based on infinite growth on an obviously finite planet? It’s a mass suicide cult.

“Green tech.” isn’t very green either, more techno-narcissism, and it will never replace fossil fuels.

The worldwide ocean fisheries will completely collapse by about 2040-2050 (maybe sooner as scarcity and greed kick in). That is a hard limit that won’t be debatable as 2-3 billion people won’t have a basic staple food to rely on. Fresh water is another hard reality that won’t be debatable.

Meanwhile we’re so wasteful it’s incredible. Planned Obsolescence (for ex.) is such a crime against life, and yet on it goes on and on. This spaceship (earth) is an insane asylum and the management are criminals.
https://www.youtube.com/watch?v=hLV09_FDnIQ&list=PLNiRcMjUGDJcTN3INln476xt_6Wvg3QNs&index=4
——-
Ain’t no sunshine in Godth’s world.

#250 S.Bby on 01.21.16 at 2:06 pm

#178 Working Guy
If the BC NDP are smart, they will using the high cost of housing as a wedge election issue. There are enough pissed off people around that it could make a difference at the polls.
The BC Finance minister Mike de Jong is on record as owning seven condos so he’s not about to do anything to bring down the cost of real estate.

http://thetyee.ca/News/2016/01/11/Finance-Minister-Well-Invested/

#251 jess on 01.21.16 at 2:07 pm

A federal grand jury has criminally charged Wilmington Trust Corp
…”The 19-count indictment, which was not publicly available on Wednesday night, charges the executives and bank for their roles in concealing from federal regulators and bank shareholders the total amount of past-due loans on Wilmington Trust’s books from October 2009 to November 2010.

Prosecutors have alleged the bank and its officials hid the true condition of the bank’s loan portfolio during the banking crisis through a practice of waiving past-due loans. The defendants are charged with making false statements in securities filings and to agencies of the U.S. government.

“Wilmington Trust Corp. had an obligation, to its shareholders and to the public, to accurately report the important financial metrics which enable investors to make informed decisions,” Oberly said in the statement. “Difficult financial times may present significant business challenges, but they do not excuse anyone or any entity from complying with the law.”

http://www.delawareonline.com/story/news/local/2016/01/06/defunct-wilmington-trust-criminally-charged/78382480/

#252 jess on 01.21.16 at 2:13 pm

How the public came to know about Wall Street’s recklessness conduct /obscene bonuses due to the court battle of BloombergNews and legislation secured by Senator Bernie Sanders of Vermont requiring a Fed accounting.
The Fed’s Secret Liquidity Lifelines
http://www.bloomberg.com/data-visualization/federal-reserve-emergency-lending/#/Morgan_Stanley/?total=true&mcp=true&mc=true&taf=false&cpff=false&pdcf=false&tslf=false&stomo=false&amlf=false&dw=false/

===================
Who is Morgan Stanley and Why Its $31 Trillion in Derivatives Should Concern You
By Pam Martens and Russ Martens: January 21, 2016
(wall street on parade)
================
https://financialresearch.gov/briefs/files/2015-02-12-systemic-importance-indicators-for-us-bank-holding-companies.pdf
dec 2015

#253 Sideshow Rob on 01.21.16 at 2:17 pm

BC Working Guy

Question for you…

Explain to us exactly how much of someone else’s hard work do you believe should be your fair share? Because that is what socialism is.

#254 Ronaldo on 01.21.16 at 2:26 pm

#230 Ponzius Pilatus on 01.21.16 at 12:54 pm

”Any thoughts on who is a better financial predictor:
The cabby or your barber?
Personally, I go with my shoe shine artist.
He also spits on my shoes.
Glorious shine every time.”

Actually, it’s the elevator operator at the stock exchange.

#255 ALBERTASTROPHE on 01.21.16 at 2:32 pm

#236 AB Boxster

I’m afraid you don’t get the point, and I wouldn’t be included in your little separatist group, I’m afraid. Too risky now – we’ll need Canada’s welfare state.

This is a moment of reckoning for Albertans, like when someone finally goes to the office of the bankruptcy trustee and faces facts. Time to look in the mirror, not point fingers like angry toddlers.

On my street, three out of seven driveways to the west of me are empty, plus two out of ten on the other side. Houses left behind as people pick up and move to look for work. Pure desperation.

The last thing Albertans need is to put up walls and customs guards on the highways. Many of us will need to migrate to other parts of Canada, and soon. (My friends in Ontario tell me that Alberta license plates are all over the GTA already.)

Alberta’s population of 4.1 million was projected, in a study from 2014, to grow to about 6 million by 2038.

There is work going on among experts right now that suggests an alternate course. Probably the most likely.

Alberta’s population I am told is now being projected to actually decline to at least 2.5 million by 2030.

We’re talking about half a million empty dwellings in this cold province. And jobs flooding away.

We would be so much better off if we had elected governments that had a vision that extended beyond the next quarter’s oil revenues.

But we never did.

It is what it is.

#256 jaybee on 01.21.16 at 2:35 pm

#226 common sense on 01.21.16 at 12:39 pm

Thank god I got out yesterday!!
==============================

Facepalm. Somebody is actually admitting publicly that they got out of the market at the bottom. Bravo!

#257 jaybee on 01.21.16 at 2:41 pm

#113 Macduff on 01.20.16 at 10:08 pm

I would switch advisors. You should be getting more personal attention if you have a seven figure portfolio.

#258 Penny Henny on 01.21.16 at 2:56 pm

So this morning I told you about the $1.99 cauliflower at Food Basics and I do what any rational person would do and go down to get me some before they’re all gone. Right.
Well low and behold I rush into the store in to the veggie aisle and what do I see “Strict limit of 6 cauliflowers per family”. Well shut the front door! No one is going to tell me how many cauliflower is my limit!
So I grab me my 6 cauliflowers and go to check out, yes I’m getting some odd looks because all I have is the cauliflower.
Then I go out to the car and put on a baseball cap as a disguise. I grab me 6 more cauliflower and go to check out again (different cashier though). I’m sweating buckets as I pay but the plan was working.
I run back to the car and proceed to get the hell out of there ASAP.

Oh back to the point of my post, does anyone have any good cauliflower recipes?

#259 Penny Henny on 01.21.16 at 2:58 pm

Oh, one more thing.
Pork loin on sale for $1.47/lb. Limit 6.

#260 Chris on 01.21.16 at 2:59 pm

From a local paper article entitled: “Some Goods News On Ontario’s Debt”

“Three factors suggest that the province is not approaching a debt crisis. There is a continued appetite in financial markets for Ontario debt. That means that financial markets expect it will be repaid and that the provincial government is not approaching a debt wall,” she added.
“The continued fall in effective interest rates also support this, suggesting that the risk premium on Ontario’s debt is not rising. The stability of interest costs as a share of revenue indicates that this increased debt can continue to be serviced.”
Block said Prime Minister Justin Trudeau’s new Liberal government — with its large Ontario political base and close ties to Wynne’s administration — could also help the province’s bottom line with increased transfer payments.”

Translated into plain English:

1. As long as people are still willing to lend you money, you are doing fine financially and there’s nothing to worry about.

2. Interest rates will stay low forever.

3. If things go south, the Federal Government will bail us out.

So happy deficit spending. Everything is fine. Just keep borrowing, it’s OK.

#261 Godth on 01.21.16 at 3:10 pm

#250 Prairie Oysters for All on 01.21.16 at 2:05 pm
“Ain’t no sunshine in Godth’s world.”

Your correct, it’s been raining all day but I’m sure your Prairie Oysters are delicious. How should I cook them?
https://www.youtube.com/watch?v=CNAkbbKycCM

#262 Panem, droga et circenses on 01.21.16 at 3:15 pm

This post is in reply to:

#175 WallOfWorry on 01.21.16 at 8:17 am
#179 Still Confused on 01.21.16 at 8:41 am
#185 The Other Chris on 01.21.16 at 9:17 am

These three posts (posters) at the best are perfect example of the brainwashed dumbed-down Canadian youngsters – a fine product of the Canadian educational system. And at the worst – they are paid shills for the Ontario Liberal party and the CCPA (“think-tank” funded by the trade union’s money) – as they are early in the morning – once the employed people in the “ministry of truth” propaganda department get to work to disperse the truth about the shinier status of the Ontario economy and its finances and debt.
==========================
1. Let’s see what is behind the shiny facade os the Ontario economy growth – as provided in post #175
“Fact: The latest quarter GDP growth (annualized) came in at 3.5% which exceeds current growth of US”
“Importantly, third quarter growth was broad-based, with household spending, business investment, and net exports all contributing to the overall increase”

Here is the real “economy update” data as provided by GO on Jan. 15,2016

http://www.fin.gov.on.ca/en/economy/ecupdates/update.html

Lets drill to see where the robust growth in the GDP cme from:

I. First – pay attention to the line “Average Weekly Wage Rate ” and see the big bump of $16.35 between Q2 and Q3 and no bump between Q3 and Q4(already known)

This big bump in Q3 is due to the all the educational workers getting increases in September (due to seniority, extra education etc.)
This is very notable bump that happens every year in Ontario and Canada in September once Stats Canada reports the average weekly wage.
Almost always the real one is higher than the expected one which in turns affect the C$ briefly at the time of the release and can be exploited by the Smoking Man new FX disciples to feast on a some pips if they still have their accounts the coming September…

The government employees salaries are directly counted in the GDP calculations – so you have the first reason for the strong GDP growth in Q3 (but this is not the case for Q2 and the already posted Q4)

II. Next one – “robust” household spending.
First factor here is the official inflation – most of the stuff will cost more so even if the population buys the same amount they will pay more money (aka higher household spending)

Second factor here is the unofficial inflation as some items (food and similar) are striped when counting the official inflation as they are way more “volatile” – but as everyone who shops will see the huge price increases there (or smaller packages, qtys, weights for the same price as before) – hence even more household spending.

Third factor here – Canada officially accept 250-280k (0.7-0.8% of present population) new immigrants each year and a big chunk of these lands in Ontario. As the family reunification is somehow limited now the big number of these are the “independent category” and the majority of these are families with kids. The best time to come to Canada for them is in the summer when the kids have finished their school year in their native country and they can look forward to the new life and the new school year in September.
These people are coming here and renting places (or even buying), buying used and even new cars and consuming big time setting up their new households here. And consuming is GDP growth – never mind the “back to school” frenzy which coincidentally is in the same Q3 with reported robust household spending.

III. Broad-based net export.
Pay big attention here because this is the big scam sold to the unsuspecting public which is led to believe that a lower currency is good for the country and they have to accept it even if their quality of life and purchasing power suffers tremendously.
Every country keep statistics about ther trade balance in the country’s currency but the international trade is done mostly in US$. In normal times when the exchange rates are relatively stable this does not post a problem but in turbulent time like the present this is a SCAM to justify the race to the bottom
Example – if Canada (Ontario) exports U$10 billion of merchandise to the USA in a given period of time when U$1 is C$1.20 and then in the next period of time we export exactly the same U$10 billion of merchandise as qty and quality but now we have U$1 to C$1.30 we will be reporting exports of C$12 billion in the first period and C$13 billion in the second period.
And the government pumper will be blasting the media that the exports have been increased by 8.33%.

Who benefits by the increasing amount of money received by the same amount of U$10 billion of merchandise – the owner of the companies, their senior management who will rewards themselves with higher salaries and bonuses and perhaps the employees who will be given opportunity to work overtime (hiring extra staff is usually more expensive). And the big winner is the government who will get more tax money without extra work.
The big losers – everybody else whose purchasing power has been decimated….

Lets see the reality in Ontario – assuming that all the export is done in U$ – which may be very close to the truth as Ontario exports mostly cars and auto-parts to the USA.

We will need to use bank of Canada exchange calculator
http://www.bankofcanada.ca/rates/exchange/10-year-lookup/
From the link above one can get the exact exchange rate and the average one for a set period of time.
Using that link I got the average exchange date of 1.2297 for Q2 (April to June) and 1.3089 for Q3 (July to September)

In Q2 we have export of C$47,474 billion and by using the 1.2297 average exchange rate for that period we will get a real export of U$38.606 billion

In Q3 we have export of C$50,045 (12% increase) and by using the 1.3089 average exchange rate for Q3 we will get a real export of U$38,243 Billion

In reality we exported less in real merchandise but in the governments statistics we exported more and the GDP grew substansially due to the 12% “growth”in the export!!!

Oh, Ontario – you are richer than you think!!!
===================================

Let’s debunk now the “Canadian Centre for Policy Alternatives says no government debt crisis in Ontario. Hopefully this shuts all you right leaning scaremongerers up.”

CCPA is for hire shills funded by the trade unions and the government entities.
If a trade union need to peddle some opinion supported by “research” they donate $100-200k to the CCPA and in return they get a “research” by “an economist” who proves exactly that the trade union needed to be proved.

Same applies for any government or government entity:
http://www.taxpayer.com/blog/friendly-reports-from-funding-recipients

The document is here:
https://www.policyalternatives.ca/sites/default/files/uploads/publications/Ontario%20Office/2016/01/CCPA%20ON%20No%20Crisis%20on%20the%20Horizon.pdf

and the Ontario public debt is here.

http://www.ofina.on.ca/borrowing_debt/debt.htm

As everyone can see the Ontario gross debt is $315.4 Billion but the CCPA peddlers push the net debt of $284.6 Billion. (the lower debt is better looking to the Ontario simpletons)
As everyone knows we pay real interest in real money to service the whole $315.4 billion and not only $284.6 billion. These $30.8 billion offset by the assets are not “interest free”. And a curious one may wonder if these “assets” do generate any income to at least offset the interest paid to service the $30.8 Billion or they need additional expenditures and tens,hundreds or thousand of government employees paid $60-$80 or $100k plus to keep and maintain the “assets”???

The other trick used here is in the duration and the potential interest saving on these bonds. Previously the prevailing number of these bonds were with shorter duration due to the much steeper yield curve but after the financial crisis the yield curve is much flatter (the interest difference between the shorter duration less than 5 years and longer duration (15,20,30 or more years) is not that big and the Wynne government is rolling the existing debt into longer duration. This allows then to still not pay that much more interest in debt servicing charges but to kick the can much further away in the future when a different government will have to deal with that monstrous debt and the present “leaders” will be long retired….
So how much more the government could save in interest expenses if they keep the lower duration when refinancing?
Why is the CCPA not “researching” that???

And the third one is in the composition of the debt and the foreign components (US$, Euros and other currencies). These may have been sold with a very strong Canadian dollar (when it was at pair with the US$) but now the interest payments and later the principal repayment will be done with significant FX loss.
For example the portion of 41.6 billion in US$ is now equivalent to over C$60 billion.

Why is the CCPA not doing their due diligence?

Is it because the were “paid” (via donation directly from the liberal government or from one of their friendly unions and then later the liberal governments will offer an equivalent refund to their bargaining cost…)???

#263 Evangeline on 01.21.16 at 3:15 pm

Donald Trump and the Politics of …..

https://www.youtube.com/watch?v=V1kFqviAEHw#t=799

#264 Ronaldo on 01.21.16 at 3:17 pm

#259 Penny Henny on 01.21.16 at 2:56 pm

“Start the car”.

#265 Investorz on 01.21.16 at 3:27 pm

CP rail layoffs… 1000 people.

Terrible outlook. The stock market was smelling trouble, and there is trouble.

Layoffs are made by public companies to adapt to changing conditions, improve or retain shareholder equity and maintain or increase stock value. Markets like that. — Garth

#266 acdel on 01.21.16 at 3:29 pm

#259 Penny Henny

Too funny!

#267 Noel on 01.21.16 at 3:37 pm

#261 Chris

1. As long as people are still willing to lend you money, you are doing fine financially and there’s nothing to worry about.

2. Interest rates will stay low forever.

3. If things go south, the Federal Government will bail us out.
_____________________________

#3 is kinda the exact point of deficit spending. Deficit spending when the economy is below full employment is stimulative, and creates jobs – as long as the spending is for investment, not tax cuts.

#268 Hicksville Alberta on 01.21.16 at 3:41 pm

#256 et al – ALBERTASTROPHE

I only hope Alberta goes back to 2.5 million population by 2030. It was a great place to live back when the population was 2.5 million as it was populated with real basically simple and honest people back then when a handshake or a nod was good enough and you knew your neighbour and he knew you.

I don’t buy the bullshxt more growth, more of everything and that’s why i moved here in the first place well over forty years ago. And it was a great place to live up till about the last ten or so years when it started to become infested with tinhorns and carpetbaggers and things got pumped far more than they should have.

So if there ends up being 500,000 more houses than necessary i would be just as happy seeing them torn down if there is no use for them. Same goes for everything else.

Calgary used to be a great small ” big ” town where everyone ” knew ” and accepted everyone. Now it is just another city shithole. Maybe the best thing Calgary has done culturally for the Province in the last decade is building the ring road so you can just bypass it on your way.

As to the oil and gas situation, if it is overbuilt right now and nobody wants it, just shut it in for say five or ten years. The market ought to be able to sort itself out in time and since the hydrocarbons in place are being produced from formations that took from sixty to hundreds of millions of years to develop, i can’t see that another ten years or so could do much harm.

#269 Godth on 01.21.16 at 3:44 pm

I have a very important meeting to attend, there will be beer and homegrown. Another day in the life of Riley. Just because it’s a suicide mission run by corrupt criminals doesn’t mean I don’t enjoy myself. The music is great too.
https://www.youtube.com/watch?v=YeNIMS3RlDc

#270 Skeptical on 01.21.16 at 3:59 pm

It’s not all roses in the US. The PMI has been below 50 and falling for the last two months.

#271 S.Bby on 01.21.16 at 4:09 pm

More realtor scare tactics. they just never stop.

http://www.news1130.com/2016/01/21/spike-in-the-sale-of-rental-buildings-in-metro-vancouver-could-lead-to-higher-rents-realtor/

#272 Jack Simms on 01.21.16 at 4:13 pm

Noel #268

Debt is debt. When you or anyone else ether a corporation, government or consumers etc., it can get out of hand.

It does not matter if that debt is for tax cuts or giving fatter pensions to public sector, government workers.

The debt will pile up and when interest rates go higher even modestly, it will cause financial pain.

Even if interest rates were to say low at 3.7% in Ontario’s case, in 20 years, interest costs will be $22 billion a year.

#273 john on 01.21.16 at 4:13 pm

Saudis and others will not want to give away their oil at $20s or 30s per barrel for too long. They can sit on reserves and wait for better times.

#274 Entrepreneur on 01.21.16 at 4:25 pm

Swollen, swelled bubble heads
smearing lipstick, fudged figures,
proven does not work as meds
high-debt level “cents” frozen,
the interest level historic dead
time to four-way split cauliflower,
a pointed cannon faces the end
to bring us back to a fair game.

#275 Conspiracy theorist on 01.21.16 at 4:44 pm

Ogopogo. Of course you like CPD. You’re used to being underwater.
Don’t you people know the banks control the gov’t. Every time the bank preferreds are set to reset, they force the Bank of Canada to drop the rate.
BMO is bitching on BBN today that the rate wasn’t cut. Look for the Bank of Canada guy to be replaced soon.

#276 Ticketron on 01.21.16 at 4:47 pm

Get to Income Support Alberta early folks.
The tickets( like the bakery has) run out within opening hours, staff can’t handle the volume arriving everyday.

#277 Noel on 01.21.16 at 4:50 pm

#273 Jack Simms

“Debt is debt.”

____________________

That isn’t true and is a fundamental misunderstanding of our economy. I feel this is the biggest barrier to people having a good grasp on what the government’s role should be.

The US has a higher debt to GDP ratio that Canada, yet its economy is the envy of the world. Right?

Debt is not debt when you have your own central bank that can create money.

Read up on it, its an interesting topic:

http://www.forbes.com/sites/johntharvey/2012/07/18/why-you-should-love-government-deficits/#2715e4857a0b410968231351

#278 Leo Trollstoy on 01.21.16 at 4:52 pm

#226 common sense on 01.21.16 at 12:39 pm

http://www.southofdallas.com/wp-content/uploads/2013/04/jesus-facepalm1.jpg

#279 cramar on 01.21.16 at 5:04 pm

#259 Penny Henny on 01.21.16 at 2:56 pm

Oh back to the point of my post, does anyone have any good cauliflower recipes?

———–

Everyone seems to tell the unemployed, when you loose your job start your own business. Maybe the entrepreneurial example can serve for inspiration. Open a stand at the curb and sell HOT cauliflower soup!

Or you could become a writer. That was quite witty. Worthy of publication in a national rag.

#280 Chris on 01.21.16 at 5:11 pm

Noel:

“#3 is kinda the exact point of deficit spending. Deficit spending when the economy is below full employment is stimulative, and creates jobs – as long as the spending is for investment, not tax cuts.”

This is a wonderful idea. However, there are some problems with implementing this idea in Ontario:

Firstly, Ontario has a $295 billion dollar debt. We increase this each year by around $15 billion. Interest on this each year is around the same as we borrow, being between $12 billion and $15 billion at an average rate of 4%.

Simple reality is this Province will never be able to pay this money back. Here’s why: Each year we borrow the money needed to pay the interest. So this Province is actually able to support itself using taxes, but cannot pay interest on its debt. We borrow money each year to keep up with the interest.

In order to pay back the debt, we would have to do one of two things:

1. Increase taxation to obtain an additional $16 billion per year. We would then be able to pay the interest out of taxes, and also make a payment on the principal of $1 billion per year. If we did this, we would pay back everything we owe in 295 years.

2. Decrease Provincial expenditures by $16 billion per year. The same situation above would result.

We can’t do either of those two things, obviously. So what we do in Ontario, is continue to borrow to make our interest payments, and hope that interest rates stay low, people still want to buy our debt, and if all else fails, pray for a Federal Bailout.

That is the sad reality of our situation in this Province. We no longer can borrow and spend to stimulate the economy. We already have to borrow $15 billion a year, just to pay the interest on the money we already borrowed, and spent, to stimulate the economy.

We now have to do what the Liberals are currently doing, that being cut back on the areas that can be cut back. So we see cut backs in Education and Health care, and the associated angry professionals reacting to this (cue Doctor and Teacher info-mercials telling us how terrible the cuts are and how much they will hurt us). Remember, spending in Ontario is hierarchical and goes like this: 1. Health care 2. Education 3. Interest on debt. We can’t cut back on interest payments, so instead we cut health care and education. That is all we can do. Any deficit spending is impossible. Any job creation by the government can’t happen. All we can do is cut back, to get more money to make interest payments (because each year, the Provincial debt goes up by $15 billion or so, and so each year there is more interest. We pay the increase in interest, by cutting spending on Health care and education).

Just wait to see what happens if interest rates rise significantly. Then you are going to see option #3, ie, cue the Federal Bailout.

Stay tuned……

#281 cramar on 01.21.16 at 5:11 pm

#256 ALBERTASTROPHE on 01.21.16 at 2:32 pm

On my street, three out of seven driveways to the west of me are empty, plus two out of ten on the other side. Houses left behind as people pick up and move to look for work. Pure desperation.

———

On the national news the other night, they did a feature on Ft. Mac. The reporter was on a street where it looked like every house had a for sale sign. The thought that pop into mind was, who the heck is going to buy these houses?

#282 earthboundmisfit on 01.21.16 at 5:19 pm

@194 Andrew, I could not agree more, but if Brown doesn’t start showing himself, and ripping into the idiotic turds running Ontario, he’s destined to do a Hudak.

#283 CJ on 01.21.16 at 5:19 pm

$2.98 for cauliflower in Calgary. Best city in Canada.

https://www.instagram.com/p/BAz1uBNuLz_/

#284 Grey Dog on 01.21.16 at 5:24 pm

To Penny,
Google recipes for Aloo Gobi to use up some of your cauliflower. Too bad it won’t last til Super Bowl weekend.

Living in GTA during the Christmas ice storm a few years ago there was a real run on driveway salt. People bought enough bags to last several family homes for a number of years. I bet they are still using this original purchase.

Likewise a couple years prior to that it was windshield washer fluid for one’s vehicle. Couldn’t find it anywhere, yet when a shipment came in people were buying multiple jugs!

Good luck with your cauliflower, hope everyone in your family enjoys it.

#285 SunShowers on 01.21.16 at 5:43 pm

#259 Penny Henny on 01.21.16 at 2:56 pm

Oh back to the point of my post, does anyone have any good cauliflower recipes?
—————————————————-

Coat baking sheet in olive oil, cut up cauliflower jumble around in pan until it’s coated. Sprinkle on your favorite seasonings, bake in the oven @ 350 for 10-20 mins depending on how crunchy/soft you like your texture.

Stupid easy, really fast, and probably my favorite way to eat an otherwise underwhelming vegetable that looks like a colossal wart.

#286 45north on 01.21.16 at 5:48 pm

M: from your link: Nariman Behravesh, chief economist for IHS, said capital flight from China has reached $1 trillion since the mid-2015. “It has been massive. They have offset it by running down reserves but doing this is a form of monetary tightening. So what are they going to do now?”

that got my attention.

by the way M is not much of a name.

Chris: Some Goods News On Ontario’s Debt

1. As long as people are still willing to lend you money, you are doing fine financially and there’s nothing to worry about.

2. Interest rates will stay low forever.

3. If things go south, the Federal Government will bail us out.

it’s going to be very hard to cut back on spending. We are moving towards a crisis.

#287 IHCTD9 on 01.21.16 at 5:54 pm

#259 Penny Henny on 01.21.16 at 2:56 pm
So this morning I told you about the $1.99 cauliflower at Food Basics and I do what any rational person would do and go down to get me some before they’re all gone. Right.
Well low and behold I rush into the store in to the veggie aisle and what do I see “Strict limit of 6 cauliflowers per family”. Well shut the front door! No one is going to tell me how many cauliflower is my limit!
So I grab me my 6 cauliflowers and go to check out, yes I’m getting some odd looks because all I have is the cauliflower.
Then I go out to the car and put on a baseball cap as a disguise. I grab me 6 more cauliflower and go to check out again (different cashier though). I’m sweating buckets as I pay but the plan was working.
I run back to the car and proceed to get the hell out of there ASAP.

Oh back to the point of my post, does anyone have any good cauliflower recipes?

—————

LMAO!! That was great, thanks for the laugh!

#288 AB Boxster on 01.21.16 at 5:58 pm

#256 ALBERTASTROPHE on 01.21.16 at 2:32 pm

Alberta will need Canada’s welfare state
—————————————

So the solution then is to suck off the teat of the rest of the country?
The rest of the country that is essentially broke.

Unfortunately that’s a very Canadian attitude.
But it’s not the attitude that built Alberta.

It might be a better option to join the Americans.
No doubt they would be thrilled to have access to Alberta resources.
I’m sure a pipeline would be built quite rapidly.

The gun thing is not a big issue, and our health care system in Canada sucks anyways.

If Alberta cannot be successful in this confederation of ‘partners’, then maybe we need better partners.

#289 AB Boxster on 01.21.16 at 6:08 pm

On Energy East:

Denis Coderre:”environmental risks outweigh the meagre economic benefits of the pipeline project”

Brian Jean:“You can’t dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipeline”

Thanks Quebec.
Welcome to the Canadian way.

Dazed Sunny boy had no comment.

#290 Herbn on 01.21.16 at 6:21 pm

#245 Sask,

why do I find myself exclaiming “O.M.G!!!” every time I read one of your “rebuttals”?

#291 Fine Wild Roasted Gonads on 01.21.16 at 6:24 pm

#290 AB Boxster on 01.21.16 at 6:08 pm

On Energy East:

Denis Coderre:”environmental risks outweigh the meagre economic benefits of the pipeline project”

Brian Jean:“You can’t dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipeline”

Thanks Quebec.
Welcome to the Canadian way.

Dazed Sunny boy had no comment.
——-
Beauty. Reform 2.0 on the way…….

#292 Jack Simms on 01.21.16 at 7:55 pm

To Noel

So why do they have to force down interest rates using QE and other methods over the last 30 years?

If government deficits are such a great thing more interest paid and compounded will create larger deficits and mean more private sector wealth according to the article you referenced.

#293 maure on 01.21.16 at 8:04 pm

#139 Bottoms_Up

that single part may be true, but the fact is that no one has actually proved that it this been caused by humans.

if you have proof, please post link to it here.

furthemore, saudi arabia and others will not sell oil for 20-30 dollars for long, they will shut in production to sell at higher prices in the future. they are not in a hurry.

#294 Nanaimo Bar on 01.22.16 at 1:45 pm

The Vultures start flapping their wings. Toxic junk for Paul Singer. This the one we have been waiting for.

Moody’s Investors Service is eyeing a sweeping downgrade of a sizable chunk of corporate Canada.

http://www.theglobeandmail.com/report-on-business/top-business-stories/moodys-eyes-sweeping-downgrade-of-canadian-oil-mining-companies/article28333969/