Big ideas

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“People are correct to perceive there is a serious problem with the housing market,” says blog dog Joe, “but incorrect to believe the solution lies in government intervention. A better solution is to let the market sort itself out (interest rates normalizing) and for people to make better financial decisions, painful as that might be.”

Can’t argue with that. But Canada isn’t in the mood for personal responsibility, and won’t be for a while. Comments here over the weekend proved that. While it’s obvious cheap money, house lust, financial illiteracy, easy credit and a disregard for debt have propelled house prices to the absurd, nobody’s buying it. Instead it’s the fault of flipping realtors, Chinese dudes and lame politicians. While rank speculation is killing real estate, we flame crooked immigrants. Pathetic.

“Bigger picture, I also worry we are collectively losing our way when it comes to our approach to serious political issues,” adds Joe. “With housing and the economy, it troubles me that the majority of people now look to government as a solution to problems best addressed by the private sector or private citizens. The pendulum has swung too far left. The recent elections of Rachel Notley and Trudeau are a symptom of this, not a cause, I think.”

Me too. I take our debate a few days ago about TFSAs as evidence. Why would so many people come here to support the government hacking a tax shelter and thereby increasing taxation? Simple. Investing is hard. It’s risky. Voting for higher pensions is easy. No risk.

The latest example is the moister momentum for a guaranteed annual income, which many of the spawn think will be financed by sucking off others’ RRSPs. They crave a new cradle-to-grave social support, no doubt the reaction to a world in which young people have big debt, uber education, high expectations, lousy jobs and swelling anxiety over ever owning a house or turning into their parents. They’re huge into sharing now. It’s a defence. Shared cars. Shared mortgages. Shared jobs. Shared (public) pensions. Shared economy.

It’s the antithesis of individual ambition. So governments, like those of Trudeau & Notley, are elected to tax the rich more, abandon balanced budgets, go green and replace private enterprise as the creators of wealth and jobs. In a world where people get a minimum annual income their whole lives, then a liveable public pension, where excessive government spending can be amortized into infinity, why worry about TFSAs, stock markets, or investing?

Since the T2 era dawned, I’m seeing a lot more comments like this being directed at me:

“You Conservatives are all the same, it’s all projecting your flaws onto others and worrying exclusively about what’s good for your pocket. Which is fine and dandy on a financial blog where dudes and dudettes come to learn how to get rich, but cut the sanctimonious crap because nobody but a handful of nodding sycophants believe you.:

And this…

“You’re just like with Trump. Because you’re a cheerleader for the status quo, which has served you and the people you’re surrounded with well, and you can’t imagine that ever changing. Meanwhile more and more people in western countries have their back against the wall as your lust for money (you previously referred to dividends as “yum” and “delicious”) causes more outsourcing, more short term thinking, and more corporations that are perfectly happy to sell our country out if it means a buck next quarter.”

Oh yeah, and this…

“You talk about all of us having an obligation to save and invest. What happened to personal freedom, Garth? You conservatives love to talk about so called freedom. No matter how pure your intentions might be, you have to understand how it looks when you say that. As an equities peddler and multi-millionaire investor yourself, you stand to gain in two fundamental ways from putting the burden of retirement funding on all individuals. You stand to gain because they will need the help of professionals such as yourself, whereas with state pensions that is unnecessary.”

How can you not love the way the lefties call me a Conservative, and the rednecks dis me as a Liberal? It’s one of my greatest accomplishments. Irritating everyone. It’s also common sense.

Whatever the flavour of government, we’re not moving in the right direction. Real estate’s become a casino in which every player thinks they’ll win. Sinking money into registered retirement funds has crashed and burned. Most people are willing to flip off TFSAs, because they don’t use them. The rest think they’re savings accounts. Our willingness to swallow debt would astound previous generations. Cash reserves are gone. Credit’s endemic. Kids expect nicer houses than their parents. Now. It’s a society of consumption, not denial. Savers and renters bad. Mortgages good.

Today the young truly believe interest rates cannot rise, houses will always go up, they can retire without investing, it’s different this time, deficits will solve themselves and taxes on others – the wealthy and corps – will make it all work. As Joe said, government is now the solution. A year ago it was the problem.

I can’t help but think of hippies sticking flowers in the barrels of cop guns. Beautiful. Doomed.

Well, there ya go. Blaming others – from immigrants to central banks, Boomers, realtors or Americans – is lame. We’re the architects of our own destiny. Together we have destroyed the housing market, borrowed our butts off and elected leaders for the wrong reason. Pointing that out is neither lib nor con.

The young can learn from experience, or think they know it all.

I did once. It was great.

242 comments ↓

#1 Doug t on 02.28.16 at 5:10 pm

You think things are bad now just wait – if Trump actually becomes Prez then Canada is HOOPED

#2 For those about to flop... on 02.28.16 at 5:15 pm

Out of curiosity, l checked out house prices in Albuquerque ,New Mexico,where I am visiting for spring break.
On Trulia the average house price is $228k.
32nd biggest city in America,pop 550k…metro 900k people.
I like places with character,not cookie cutter, so this condo down town caught my eye.

M41BC

http://www.trulia.com/property/3227475726-407-15th-St-NW-Albuquerque-NM-87104

#3 Nodebt on 02.28.16 at 5:15 pm

Picked up a lot the other day in the interior of bc for 115k, no gst and dcc’s were already paid. 50×122 the realtor was about to list it but called my buddy a realtor to see if he had a buyer. We were over there at 10:45 pm in the dark, good thing our iPhones have great flash lights lol. I bought the lot with my cousin. The realtor sold it 50-70k under what it’s worth, don’t have a clue why. The lot is zoned for 2 suites and flat like my stomach, what a beauty lot.

#4 Muttley O'Toole on 02.28.16 at 5:18 pm

From the cradle to the grave. . .
Probably the biggest cause of the lefties being unable to comprehend the need to look after yourself and stop blaming everyone else for your failures is the left leaning headie tilt they received from their educators or so called teachers.

#5 Jimmy on 02.28.16 at 5:19 pm

About time !!! Been waiting all day!

#6 Jimmy on 02.28.16 at 5:20 pm

FOURTH!!

#7 Mark on 02.28.16 at 5:22 pm

“The realtor sold it 50-70k under what it’s worth, don’t have a clue why.”

Maybe it really was only “worth” 50-70k beneath your perception of value. After all, with no land scarcity in most of BC, land really should only cost the depreciated cost of servicing it, and a small premium for the value of foregone agriculture.

I get a good laugh out of the Realtors who run around, in a RE bear market (such as we’re experiencing now) claiming that transactions are “beneath market”. No, there is no such thing as a transaction between two un-related parties that is “beneath market”. All transactions are “the market”.

#8 Ronh on 02.28.16 at 5:28 pm

Savers? What savers? Its all debt based now. Right again Garth.

#9 Jacy McNore on 02.28.16 at 5:33 pm

Mark,
Who would be the best USA President Elect for the friendliest relationship with Justin Trudeau and Canada, in the economical sense? That is who I hope can win the election because when Canada and the U.S. work together they both win.

#10 Get back Loretta on 02.28.16 at 5:35 pm

As long as they don’t insult your dog.

#11 still employed in AB on 02.28.16 at 5:36 pm

“Buy now or be priced out forever!”

I’m pretty sure people said the same thing about BRE-X, Nortel, and oil.

#12 not 1st on 02.28.16 at 5:39 pm

Trump status quo? Seriously?

#13 Linda on 02.28.16 at 5:40 pm

The thing about saving is that it requires discipline. Not having that goodie right in front of you – ‘such a deal, I got this (insert goodie here) for half price!!!’. The fact one had to borrow the funds to purchase said goodie & that those funds must be paid back (insert comment about unfair business practice here) with interest (unfair, totally) does not compute. Because, by golly, I work hard & deserve that goodie right now.

That is why so many have so much debt. Live now, pay later. Preferably with someone else’s money, which they got by ripping me off, so it is totally justified to take it back. It isn’t stealing, it is reallocating the wealth in a fair & equitable manner. So what if the person I am taking it from worked all their life to get it? Obviously they must have somehow gypped someone else to get it, etc. etc.

With ideas like these, I have to say I have a much greater appreciation of those who hide their funds under the mattress or bury it in the back yard.

#14 preet89 on 02.28.16 at 5:43 pm

Did you have your own phone at 12 years old? No, I (we) do now.

Did you get a new Honda Civic when you graduated high school? No, I (we) do – and some get more higher end cars.

Every generation gets a better and better life thanks to the one before them.

If my parents retire at age 60, I would expect that I can retire at age 50 if I choose to. So I could take those years from 50 to 65 and enjoy them now from 20 – 35 and then work a bit longer past 50.

In Japan interest rates are low for generations. Many people say this is normal now.

It really comes across that most people over 40 are jealous of the younger generation because we can afford cell phones, nice clothes and a new(er) car.

#15 Melvin on 02.28.16 at 5:44 pm

Guaranteed annual income isn’t really a socialist idea. It’s more of a libertarian policy. Everyone shares the handout equally, regardless of income. Once it becomes means tested it becomes more “progressive”. And I have a feeling that is what would happen.

#16 Grooby on 02.28.16 at 5:50 pm

… How can Federal Liberals and Alberta NDP be “abandoning” balanced budgets when they haven’t been balanced for years, and federally for decades?
Why aren’t the conservatives ever held to account for increasing the national debt by 50% in only 10 years, but now the Liberals get bashed for running a deficit?

Garth you’re as passive aggressive as an annoying ex of mine sometimes. It doesn’t suit you.

#17 Chaddywack on 02.28.16 at 5:50 pm

For fun went for a walk today in my Vancouver hood (Kits) and saw plenty of open houses. What shocked me was I didn’t see any “foreign investors” it was mostly people from around the area. One realtor standing outside said “Professionals with two incomes are now moving to East Van.”

I’ll stay a renter thanks….

#18 Terry Dactyl on 02.28.16 at 5:51 pm

Garth, have been a reader for a couple of years; nice work. What’s your take on this potential real estate abuse as described in the Financial Post: http://www.theprovince.com/business/mortgages/canadians+paying+price+conceal+estate+toronto/11750298/story.html

More of the same crap. — Garth

#19 common sense on 02.28.16 at 5:52 pm

Gee Garth, your so not playing by the rules and actually telling your truth to us masses for free with no direct financial compensation whatsoever….

This is 2016 remember? Remember? Where we would rather be fed comfortable lies vs the inconvenient truth.

People, if you don’t like what Garth says..you have a choice STILL…Politely disagree and go elsewhere for your daily source of bullshit….trust me, your not changing Garth’s mind or viewpoint one bit.

If you can’t leave, maybe ask the government for their permission to leave and ask Garth to talk more about soft little kittens, cloud patterns, what Adele is doing tonight, etc…

#20 mitzerboy aka queencity kid on 02.28.16 at 5:53 pm

good job garth
truer words have not been spoken

#21 common sense on 02.28.16 at 5:56 pm

Rule #1 to ANYTHING you buy, be it real estate, stocks, etc…

You make your true money when you BUY at the right price in order to make max profits when you sell in the future for hopefully more.

#22 bdy sktrn on 02.28.16 at 6:00 pm

#3 Nodebt on 02.28.16 at 5:15 pm
Picked up a lot the other day in the interior of bc for 115k, no gst and dcc’s were already paid. 50×122
—————————-
you can;t go wrong with land at a good price.

but for the same price we are looking at 17 acres (about 112x times the area), flat, dry for the same price about 10x closer to town – blaine wa area.
one can go down at lunch time , play/work for 5 hrs and make it home for dinner.

#23 Rick on 02.28.16 at 6:03 pm

Great article Garth! The sad part, is you are right. The moist ones think it is different this time. They think that government is the solution to everything. Maybe they should read “Animal Farm”. It might give them insight into real life.

#24 ben on 02.28.16 at 6:05 pm

“But Canada isn’t in the mood for personal responsibility”

So Garth – the BoC makes this decision. You think they care about workers? They don’t. One group has the ear of BoC – the banks. Agreed?

So, BoC isn’t raising rates, despite CAD cratering. Why? Because the banks don’t want to take responsibility for lending based not on wages but on ever rising asset prices.

It’s. The. Banks.

You think Poloz cares if workers struggle to make repayments? Of course he doesn’t.

The banks are the ones pushing the “more debt forever” because they create debt out of nothing and get a slice of the interest portion.

I feel your slant on this is very skewed.

You thesis is wrong. The central bank does not serve the chartered backs, If it did, rates would be substantially higher. Try again. — Garth

#25 sockeye sam on 02.28.16 at 6:06 pm

The question I have about the Chinese buying up most of our homes over here on the west side of Vancouver and driving the prices up for our own working people is.Why do they buy and then leave town right away? If they are making that much money over in China why do they even have to invest in Vancouver houses? Is it for insurance? A place to escape to if things go sour in China?I was listening to N.W 98 talk show yesterday. One of the callers made a good point. If Vancouver ever had a large earthquake and the bridges were knocked out and we needed all our first res-ponders like fire fighter, nurses, police etc. they’d all be out in the Valley where they live because they can’t afford a house in the city where they’re employed.
I was talking to a 77 year old ex contractor several days ago. He bought his house on Blenheim and 21st in Dunbar in 1969 for $25,000.00. Today the price of his house is around 2.7 mil. 33 x 120 lot.

#26 Stupid population on 02.28.16 at 6:06 pm

What a sad, xenophobic country this is turning into. All because of house lust. — Garth

All because non-affordable housing.

Fixed it for you for practical terms, instead of mythical proxy.

Analyzing the causes why housing is not affordable is more useful than a meaningless sexy metaphor.

This would have to talk about stagnating incomes, destroyed manufacturing base and other issues.

That would of course put some dent into the everyone alone is master of his or her future, the ideology pretending that people don’t exist in isolation and macroeconomics has impact on individuals.

As if North American masses suddenly became more stupid to kill their own future by making bad individual choices.

The timing of their stupidity and major global treaties reshaping global economy start at the same time – but that’s only a coincidence, of course.

And you wonder how come Trump happens.

Looks like not only once a hippie always a hippie- but also once a establishment politician, always an established politician.

Houses cost too much because money is too cheap and people have embraced debt and speculation. Stop overthinking it. — Garth

#27 Chris on 02.28.16 at 6:06 pm

Garth, I think maybe you are making one of the classic blunders we are all more likely to make as we get older. Those damn kids are irresponsible. They pay too much for houses. They dont work as hard as we did back in the day. They spend on cars and bars and hipster clothes. Why in my day, we all………. No. In your day, the elders of the time thought the same of you. Interestingly, your generation did ok, as did the next and this generation will be fine as well – most of them. Some will flame out and go bankrupt or be lazy basement dwelling bums….just as some did in every generation past. Are the problems different – sure, generationally low interest rates, global economies etc mean the issues and solutions are different, but chances are it will mostly all work out. Will there be some hard times – sure, just as there were in the late 80 early 90s or for those in tech stocks in 2001 or for those who had high margin debt or US housing in 2009. Same, just different, not worse, not better.

This is about attitudinal change in government. Way more consequential. — Garth

#28 ben on 02.28.16 at 6:08 pm

Also blaming the young here seems pathetic. They didn’t make this world. The boomers+ voted for free money via asset appreciation. The *loved* house prices going up. They loved toasting themselves at diner parties. A culture of money for nothing. And guess who they are? The hippies you mock (with due cause).

Your slant on this is odd. Why not blame 10 year-olds also. Or you could look to the people who voted for this year after year as they benefited in a positive feedback greed-loop.

But that is just like the boomers – no responsibility.

#29 McFly604 on 02.28.16 at 6:10 pm

“You stand to gain because they will need the help of professionals such as yourself”

Huh?? I don’t know about the rest of you but I haven’t had to pay a penny for all the advice I’ve got out of Garth.

#30 common sense on 02.28.16 at 6:11 pm

Also if it’s to the government to be to “save us”, guess who’s CASH (IF we have any after blowing it all) is going to be used To save us?

YOURS. The Tax payers…..AGAIN.

That got the world saved right last time in 2011..Can’t EVER happen again can it?

PLEASE.

#31 Bram on 02.28.16 at 6:12 pm

Ah, the age-old youth/elder gap in politics:

A man who has not been a socialist before 25 has no heart. If he remains one after 25 he has no head. —King Oscar II of Sweden

#32 Hawk on 02.28.16 at 6:13 pm

Agree with everything in today’s post but can’t say that I like “Central Bankers” or the government interference in the marketplace, constantly meddling with interest rates and othef variables.

I’m with blog dog Joe………if only the marketplace could be left alone in peace to work itself out, we’d be 10 times better off in the long run.

#33 ben on 02.28.16 at 6:13 pm

Final thing. Land prices are ramped due to government monopolies. Govt controls land with planning permission in major cities. Govt controls which private banks can create new debt. Govt controls interest rates and banking regulation.

The young are not the ones calling for big state and free money here. The banks are the beneficiaries (with a kick-back to the boomers via land prices – largely unrealisable as all cannot sell up).

The banks are on welfare. The boomers are on welfare.

You know who gets diddly-squat? The kids.

They pay high rent to the banks. A far bigger wedge of their wages go on rent than the boomers+ ever had.

I really think you need to re-examine your view on this Garth, without resorting to a weak yet pithy one-liner.

#34 Ray Skunk on 02.28.16 at 6:13 pm

I’m sort of on the fence with this whole minimum income thing. If it streamlines an array of different benefits into one and gets rid of a lot of overhead, I’m all for it.

However these efficiencies are in direct opposition to the owned-by-the-PS-unions Liberal party mantra, so you can guarantee it will be a huge bureaucratic mess, requiring twice the number of civil servants and run at 3x the projected cost.

#35 Brett on 02.28.16 at 6:15 pm

At #7: I always thought “buy now or be priced out forever” was hilarious. So I am buying now to never be able to sell it again? Interesting strategy…

#36 mountain guy on 02.28.16 at 6:16 pm

#12 Grooby. Your comment goes double in Alberta where Prentice et al projected a massive deficit with $45 oil, after decades of mismanagement. Now Notley gets the blame for the deficit with oil at $30.

#37 Easy on 02.28.16 at 6:16 pm

Voting for higher pensions is easy.

—-

Some people still think that large pool of capital, invested by professionals will beat amateur investors playing with limited resources, knowledge.

Isn’t that what pension funds are all about?

#38 Randy on 02.28.16 at 6:17 pm

There you go Garth…Now you see why Tigers often Eat Their Young.

I still blame the Boomers for their Fustercluck offspring.

#39 Cloudy on 02.28.16 at 6:19 pm

Garth,

I know you don’t recommend individual stocks for the individual investor, but what about adding a small amount of Fairfax Financial or Berkshire Hathaway B to an otherwise balanced mostly ETF portfolio? Both have a really good investing track record, my only real concern is the geniuses at the helm are really old and great companies frequently get handed over to yes men or brown nosers without true talent.

#40 Dreamers on 02.28.16 at 6:23 pm

Canadians have 2 dreams: their house will double in price every 3 years and a canadian team will win Stanley Cup. Well second is more likely to happen this year than former… Oh wait! The reckoning is coming and will be ugly. Especially in vancouver and Toronto, probably Calgary too

#41 For those about to flop... on 02.28.16 at 6:23 pm

#5 Jacy McNore on 02.28.16 at 5:33 pm
Mark,
Who would be the best USA President Elect for the friendliest relationship with Justin Trudeau and Canada, in the economical sense? That is who I hope can win the election because when Canada and…..zzzzzzzzzz!

////////////////////////
Mark ,how many handles do you have???
Racy McSnore would have been better…

M41BC

#42 [email protected] on 02.28.16 at 6:25 pm

Houses cost too much because money is too cheap and people have embraced debt and speculation. Stop overthinking it. — Garth

Classic small c conservative ideology. No danger of overthinking there.

No asking the next question: why is money so cheap and what has stupid, xenophob Canadians have to do with?
Have they purchased subprime US real estate?

What makes people embrace debt?
Possibly stagnating or declining income? Or they just had too much maple syrup and suddenly love to owe?

Since when is owning 1 re property a “speculation”?

#43 mountain guy on 02.28.16 at 6:26 pm

Beg to disagree with several aspects of your post Garth. “So governments, like those of Trudeau & Notley, are elected to … and replace private enterprise as the creators of wealth and jobs…” I see Trudeau’s and Notley’s actions as quite the contrary.

“In a world where people get a minimum annual income their whole lives…” The minimum really is minimum, only sufficient to replace much of the social safety net and attendant bureaucracy (less gov’t waste). It has been shown repeatedly that min-come actually increases work-force participation and re-education, and stimulates creation of new businesses. People can and do take greater risks on new ventures knowing they’ll still be able to pay the rent and keep a roof over their kids’ heads.

“where excessive government spending can be amortized into infinity,…” same old, same old, whether CONs or Libs, PCs or NDP.

“why worry about TFSAs, stock markets, or investing?” Yes, this is the heart of the economic crisis in Canada.

#44 Millennial Realist on 02.28.16 at 6:27 pm

Yeah, yeah, blah, blah, Boomers – we “moisters” will get off your lawn in a minute.

Or….when we damn well feel like, because if you hadn’t noticed, we are in the driver’s seat now.

So tighten up your Depends and listen for a minute:

The reason we like the “sharing” economy is equal parts social/environmental concerns as well as financial reality. The real powers in the Boomer generation have made huge wealth inequality their main objective, and have succeeded. Most of the rest of us have little choice but to embrace “sharing”.

As for a guaranteed annual income, anyone with a first year economics course under their belt will realize such a thing would actually be easier and cheaper to implement than the myriad of programs (all overstaffed by middle managers sucking off the public teat) that currently deal with all the fallouts from poverty and underemployment. Plus, a guaranteed income, at a higher level than current benefits programs, would really goose our economy and spur on spending, creating lots more jobs and downstream opportunities.

Instead, Conservative-minded dinosaurs would rather try to restrict, judge, punish, marginalize the poorer classes, shame them with blame, and feel righteous about their inherited wealth and privileges.

I look forward to a day when Conservatism is again about pragmatic, careful, evidence-based economic leadership in ways that work, rather than whackjob social extremism and building walls.

OK. Now I’ll get off your lawn.

#45 ben on 02.28.16 at 6:34 pm

Basic income won’t help alone. Trudeau has to take on the banks to help the poor. Basic income will be cheaper to admin. Big deal. If they set basic income to $4000 a month (absurdly high) rent would be $3500 a month. Raise it to $5000, rent goes to $4500. In other words: landlord benefit.

We need land value tax to shift the burden of taxation from workers to land owners. This would see income tax reduced and people would get more of their labour in their pocket.

Shock horror – speculators would suffer. Good.

Land value tax now. Canada has a strong history of this idea.

#46 sanddancer on 02.28.16 at 6:35 pm

A friend of mine sold his house in Cloverdale, BC , lastnight fir $70k over asking !! Had 8 offers over asking for a original spec house with no renos done since new 20 yrs ago . Cloverdale is not a desirable area and his house is certainly nothing special. ..quite the opposite !!
$710 k in Cloverdale is insane.
Garth I can provide mls # etc if you want to verify this, the house was not price low to attract a bidding war…these are happening all on there own !
There is something “different ” going on in the Lower mainland that should warrant your further consideration

#47 Marco Polo on 02.28.16 at 6:36 pm

#3 no debt.

$115K for a tiny lot. The realtor told you it was below value. If it was really at value, the only way you’d know is at auction. Farmland used to sell in central AB for around $500/acre, in quarter section quantities. Now its over $1000/acre near any towns or cities. Like a finished home, land is only worth what people are willing to pay. Bare land has the advantage of lower speculation than a home, as you would need a loan rather than a mortgage to obtain it. It takes longer to sell too.

I think at $115k the realtor ran to the bank with your cheque. If we were in the midst of a housing crisis, or bad loans, or after a flood, I might see the upside on your deal. Today with lower mainland BC? Sadly, no.

Your buy is like a “good deal” on Enron or Nortel stock.

#48 Nodebt on 02.28.16 at 6:36 pm

#7 mark
i just showed my buddy the lot, he’s a builder he offered us 165k. I laughed, we said no thanks. Gonna put 3 suites on there for 185k and get 3600-4000 per month revenue, not to shabby of a return

#49 AB Boxster on 02.28.16 at 6:36 pm

I think there’s a bit of a feeling of helplessness in the world today.

A feeling that change is happening too fast, with little planning, management or understanding of its impact on the individual or society.
And with little confidence that these changes will make life better for society and its participants.

While the world had always had war and economic cycles, somehow today it seems different.

My parents lived through WWII and it was a terrible time.
But it was over in 4 years and started a period of huge prosperity in North America.
How long have we been fighting the ‘war on terror’?
We are in our 15th year since 911 and there is no real solution at hand.
In fact it seems that things are worse.

In terms of the economy, we do not only have to think about local, provincial or Canadian economics, we are hugely impacted by the global economies and events.

And the gobal financial crisis, showed that the whole system, supposedly so well understood and managed by govt and industry leaders, can collapse and almost did. The result, was massive loss to individual wealth, loss of jobs, homes, families.

Seeing govt’s resort to years or ultra low interest rates, negative rates, huge amounts of intervention in the economy, and it still seems that the global economy is a basket case.

Gives one little faith that the current system will survive, and some wonder if it even should.

So, the old rules of work hard, get a good education, are under attack from forces that are not in anyone’s control.

I don’t believe that government is the solution, as they are about as clueless as they come.

That some believe that govt is the solution, is telling though.
That Trump in the US is seen as a solution to issues, is a massive indictment of the current system and leaders, because his support comes from many that no longer understand what they must do, to be successful in the ‘brave new world’

And I’m not certain there is any better advice for other generations except to: get an education, work hard and be open to new opportunities.
That and the financial advice Mr. T gives on this blog.

But in a globalized world undergoing massive economic, political, and demographic challenges, I personally have no confidence that this advice will be of any real value, or will contribute to successes in the future.

#50 Randy Randerson on 02.28.16 at 6:40 pm

Youth is truly wasted on the young.

I remember a few months back, another blog dog said it was weird that Canadians all flock to be a government worker, whereas in the States, it’s the opposite. In fact, people who work for Uncle Sam has the stigma of not able to cut in the real world, and that government workers are not so proud, unlike our Canadian brethren, to announce to the world that they work for the government.

I can see the 180 degrees shift in the young minds.

#51 WalMark of Sadkatoon on 02.28.16 at 6:41 pm

nice letters Gartho. i told ya, most ppl want to be poor. they fight to be poor. they will be poor. let them. it’s just a fact of life.

#52 Tony on 02.28.16 at 6:42 pm

The blame is twofold.

1) Ben Bernanke
2) Lazy millennials in America and Canada

Bernanke and his zero interest rate policy resulted in low demand from retirees due to falling incomes.
Lazy millennials earning low wages and only working one job has also caused low demand.

The end result is low interest rates that will go lower.

#53 WalMark of Sadkatoon on 02.28.16 at 6:44 pm

was talking to a 77 year old ex contractor several days ago. He bought his house on Blenheim and 21st in Dunbar in 1969 for $25,000.00…

and still won’t sell. typical. lol

#54 Mark on 02.28.16 at 6:45 pm

‘Who would be the best USA President Elect for the friendliest relationship with Justin Trudeau and Canada, in the economical sense?”

If it was strictly “the economy”, I’d say Trump hands-down. But his views on certain religion(s) are abhorrent to say the least, and it does profoundly scare me, for the future of humanity, that such views could receive such a broad and wide audience.

My “guess” is that Trump will flame out like Ross Perot did in 1992 (the pivotal event was a speech in which he referred to a group of black people as “your people”, instead of a more inclusive adjective, after which the media summarily executed him as an ignorant racist from Texas). But the alternatives unfortunately don’t really have good reform-minded economic policies.

#55 Rick on 02.28.16 at 6:45 pm

preet89, “afford” You must mean financed. You can forget about retiring early; when all you do is embrace debt.

Millennial Realist, interesting that you complain about government workers, draining the system; then agree with mincome. You must have some interesting arguments with yourself.

#56 zudnic on 02.28.16 at 6:45 pm

The real problem, both lib and con, they are all lawyers and economists that have no clue. Criticize Trump all you want. Truth is American and Canadian politicians made a foolish bad deal bringing in Mexico into NAFTA. The big 3 auto manufacture are pouring billions into Mexico and creating real employment. Where’s Canada’s billions from auto manufactures, we gave two of the big 3 billions to survive. So where is our return on that investment in jobs? Mexico that’s where!

We need a Canadian billionaire. All the young ones are down south, note most of the new money Canadian billionaires are now Canadian/American business people. Their job creation is in silicon valley. All the old money billionaires are old and not doing even downsizing like Conrad Black.

Canada is screwed. Thank god I have American real estate and don’t have to live under the moron drama teacher and his stupid trained seals!

#57 mike from Mtl on 02.28.16 at 6:46 pm

#28 ben on 02.28.16 at 6:08 pm
Also blaming the young here seems pathetic.

///////////////////////////////////////////////

Double standard. A few weeks back was all in rage about ageism towards 60+ however, with regularity himself goes on to the “moisters”..

Typical double standard logic.

#58 paddler on 02.28.16 at 6:46 pm

For a few years now we hear that the Real Estate bubble was going to burst in Vancouver. The fact is that anybody that was willing to take the risk and bought a house 4 years ago in Vancouver would be putting a nice chunk of money into his Bank Account today. No other investment for the average Joe would have matched that kind of return.

No real estate money ‘in the bank’ unless you sell. — Garth

#59 Randy on 02.28.16 at 6:47 pm

Is it still possible for me to get a degree in Liberalism and Self-Esteem ? Would like to take a Major in White Guilt and a Minor in Becoming a paid lobbyist for Tides Foundation. It’s great that Ontario is now offering these programs for FREE.

#60 WalMark of Sadkatoon on 02.28.16 at 6:49 pm

today’s millenials are tomorrow’s conservatives lol

as it always has been

#61 Embrace sharing economy on 02.28.16 at 6:52 pm

Arguable Uber is the biggest poster child of the sharing economy.

Owned and run by the investor elit, hiring the kind of lobbyists who were the architects of electing the current US president.

Not exactly Garth’s “moist Millennials”, although some of the figure heads are from the same demographic.

The same goes for Airbrn.

#62 Tony on 02.28.16 at 6:53 pm

Re: #39 Cloudy on 02.28.16 at 6:19 pm

Fairfax would be a nightmare in a market meltdown and prolonged downturn. One of the last companies on Earth to put money into.

#63 Pricedoutfornow on 02.28.16 at 6:56 pm

I think he’s right. The market will fix itself, no boom ever lasts (dotcom, US housing, even AB oil). I don’t blame the Chinese, I think they are just getting in on the action like everyone else. If the market wasn’t hot, they wouldn’t be here. Plus, I think there are some realtors with connections to China who are more than willing to help them speculate in this market. They have deeper pockets, thus can drive prices up higher. This doesn’t mean that prices won’t eventually fall (they will), but locals are getting sucked into this mentality that the Chinese are coming in droves, buy now at inflated prices or buy never. It’s a cycle. This too shall pass. Sanity will prevail.

#64 Keith on 02.28.16 at 6:57 pm

Over and over and over again, the people want a) security, and b) government to provide it. They learned it well from wealthy canadians with their special tax deals on family trusts being extended, and free enterprise companies like Bombardier and the canadian energy sector who have been hanging like convicted murderers off the taxpayer teat for decades.

It can be said that all workers deserve the security of pension that will provide a decent living in retirement. The DIY approach which I will repeat yet again has a five factor model of success (investing long enough, with enough money contributed, high enough rate of return, low enough risk, at low cost) has proved to be a failure. Doesn’t matter if your philosophy is that people “should” take care of themselves – they haven’t. Not one working stiff wage earner in ten in the post company pension era is on their way to financing their retirement, you know it and I know it. Most of the investment industry is not helping, due to high costs alone.

Every worker should be enrolled in the CPP, contribution rates of 18% of income with an employer match. Benefits should be at least 50% of wages, capped at a max of 50k. No need to worry about the market blowing up every 7 or 8 years and ruining your retirement schedule. Low cost, professional management, access to private investment opportunities. Cut down on senior poverty, lose most of the patchwork of senior income assistance, if you want a bigger pension go private with your own money. Done.

#65 Smoking man revealed? on 02.28.16 at 6:57 pm

Anyone catch the story of the Mississauga Forex man that was supposedly beat up and kidnapped by a rival forex company? Might this be smoking man? Weird, weird story.

http://www.thestar.com/news/crime/2016/02/27/mississauga-forex-promoter-says-he-was-kidnapped-beaten.html

Turns out he closed/bankrupted his company “capital trust markets” and many forex traders were left locked out of their accounts and their money gone.

Fun reading: http://www.ferrarichat.com/forum/canada/485804-who-reza-mokhtarian.html

#66 Mark on 02.28.16 at 6:58 pm

“No asking the next question: why is money so cheap “

Debt is so cheap because few have confidence in equity and business investment. So they sell their house (or die), take their money to the bank (or give it to their kids), who in turn buy GICs with it (thus providing a source of funding for the banks), who then in turn lend it out. A sort of virtuous circle of rising house prices, more proceeds of sales being lent to the Canadian banks, who in turn borrow such funds to lend out again. Thus fulfilling the criterion that banks must borrow every dime they lend out.

Combine this with a significant cross-section of Canadians who actually believe that subprime lenders such as the credit unions are superior (“because they pay higher interest”), and you have yourself a credit bubble of epic proportions. Subprime lending has also been encouraged on a national level through the CMHC subprime mortgage insurance schema which basically has alchemized hundreds of billions of highly risky RE debt into the financial equivalent of “risk-free” Government of Canada-issued securities.

A few greaterfool posters (and Garth) believe that the BoC has made a policy mistake by keeping interest rates “low”. But the real economy, ex-RE, is actually so poor that higher rates would do nothing but truncate activity to levels even worse than we already see today. The appropriate policy response is to slow down/shut down the CMHC, and to bring subprime lenders under meaningful regulation for systemic stability. Not to attack, through interest rate policy, those in Canada who need access to credit to expand their businesses and employ people outside of the RE sector.

#67 Boomer on 02.28.16 at 7:00 pm

You thesis is wrong. The central bank does not serve the chartered backs, If it did, rates would be substantially higher. Try again. — Garth

LMAO. There is no corruption in Canada. LMAO.

#68 Bg on 02.28.16 at 7:03 pm

Meh…

As soon as posters here start mentioning foreign money, you label them anti-immigrants.

You can’t be taken seriously on that topic Garth.

#69 Daisy Mae on 02.28.16 at 7:04 pm

“As Joe said, government is now the solution. A year ago it was the problem.”

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

Government does not have and is not the solution, because it’s still one of the major problems.

#70 Joe on 02.28.16 at 7:08 pm

At some point I recall the minimum down payment was 25%. Reinstating this would fix the housing market faster than you can say Vancower

#71 espressobob on 02.28.16 at 7:12 pm

Each individual has a responsibility for their own financial future. Investing is for the few that are willing to live below their means. They don’t keep up with the neighbors or have anything to prove. Forget the government.

Humble is a prerequisite. Most won’t get this.

#72 Mark on 02.28.16 at 7:12 pm

“I know you don’t recommend individual stocks for the individual investor, but what about adding a small amount of Fairfax Financial or Berkshire Hathaway B”

The problem with both companies is that they’re both heavily tied to FIRE (particularly insurance), and FIRE will suffer significantly in the future as the era of excess financialism winds down. Higher long-term interest rates are deadly for the financial sector, as notional valuations of the underlying collateral lent against (or insured against) tend to fall.

Much better, IMHO, to go with a more balanced and diversified portfolio. Buffett and Watsa have made a lot of money riding the trend of increased financialization and rising notional valuations, but if you examine where they made the money in-depth, most of it came through FIRE-sector activity with diversification being an after-thought. I wouldn’t think of either man as being smarter than the average investment manager, but rather, luckier than average for jumping on a trend which could have turned against them at a much earlier juncture.

#73 Some people on 02.28.16 at 7:12 pm

Garth, chances are that you will never write a commercially hit song, never write a poem that withstands time, never architect even a shack.

Some people will never be good at handling money – let alone invest successfully.

Life, human population is “diversified” – why fight it and want everyone to have the same thinking, portfolio, whether it’s the best for them or not?

#74 TurnerNation on 02.28.16 at 7:16 pm

Was at a party last night and B. Lamb showed up
:-0

#75 Fear on 02.28.16 at 7:17 pm

I fear the rise of an anti-immigrant party here in Canada. Started by young immigrants themselves. From their point of view, that’s the only hope they have. I’m sure the refugees that just arrived would support it as well.

#76 kommykim on 02.28.16 at 7:19 pm

I was in the grocery store checkout yesterday and watched a mid 40’s couple attempt to pay. She put her first debit card in. NSF. So she gets on her phone, attempts to move some money around, fails, and then tries another card. Then does the same thing with a 2nd and 3rd card. I moved to another line. They were still there when I left. All for a $120.

#77 ben on 02.28.16 at 7:19 pm

Some reading on the corruption of economics to mis-inform and confuse those unable to think clearly:

http://neweconomics.net.nz/index.php/2016/02/how-land-barons-industrialists-and-bankers-corrupted-economics/

I wondered what fiction you were reading. Thanks for clearing that up. — Garth

#78 Thesis is wrong on 02.28.16 at 7:20 pm

You thesis is wrong. The central bank does not serve the chartered backs, If it did, rates would be substantially higher. Try again. — Garth

LMAO. There is no corruption in Canada. LMAO.

Not to mention that BOC exists in the thin aether, not surrounded by FED and other forces.

BOC alone, all alone is the creator of its own future.

#79 Vancouver Libs on 02.28.16 at 7:26 pm

I can also tell you that some MPs in the lower mainland have been telling their associates privately that there will be a huge boost in immigration numbers this October. They shall remain nameless but initials MAY BE SD and RS.

On another note, All you need is a 10% share in each developers company to make money at a distance.

#80 Smoking Man on 02.28.16 at 7:27 pm

Wow Jeff Sessions endorsed Trump.

That’s it. Trump has the nomination clinched.

Just visualizing T2 in his anti bully pink shirt trying to renegotiate nafta with trump on the other side of the desk.

#81 Russ on 02.28.16 at 7:31 pm

Oh yeah, and this…

“… As an equities peddler and multi-millionaire investor yourself, you stand to gain in two fundamental ways from putting the burden of retirement funding on all individuals. You stand to gain because they will need the help of professionals such as yourself, whereas with state pensions that is unnecessary.”
==============================

Okay, all I saw was one fundamental gain expressed.

Will someone enlighten me on the second gain that Garth is accused of receiving?
But not Mark, I prefer to read something believable.

Cheers, R

The second was too dumb to include. Use your imagination. — Garth

#82 Daisy Mae on 02.28.16 at 7:35 pm

“So governments, like those of Trudeau & Notley, are elected to tax the rich more…”

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

We voted Harper out. And he’s stepped down because he was a liability. The party knows they’ve seriously failed the electorate and must make major changes.

#83 nonplused on 02.28.16 at 7:38 pm

“The young can learn from experience, or think they know it all.

I did once. It was great.”

– me thinks you still do. ;-)

Many argue that the progression of all democracies and republics is towards insolvency once the public learns that they can obtain goodies by voting for certain politicians. You also have a second front against prosperity in the form of power interests, which in our world take the form of large corporations and the military-industrial complex, bribing the politicians. In the end you end up with Venezuela. There is now way Venezuela should have gone broke with all the oil they export and arable land they have but they managed. If Venezuela can do it Alberta can too. Heck, they even have nicer weather and a coastline! Really, nothing was stacked against them. But there they are, no food on the shelves, nobody has been able to wipe their butt for years, the country is in total disarray. This is the socialist utopia towards which we are currently headed as well. Nutley and Glam Boy are symptoms, useful idiots riding a wave of public sentiment to their own benefit, but really just signs of the times.

#84 Smoking Man on 02.28.16 at 7:44 pm

#65 Smoking man revealed? on 02.28.16 at 6:57 pm
Anyone catch the story of the Mississauga Forex man that was supposedly beat up and kidnapped by a rival forex company? Might this be smoking man? Weird, weird story.

http://www.thestar.com/news/crime/2016/02/27/mississauga-forex-promoter-says-he-was-kidnapped-beaten.html

Turns out he closed/bankrupted his company “capital trust markets” and many forex traders were left locked out of their accounts and their money gone.

Fun reading: http://www.ferrarichat.com/forum/canada/485804-who-reza-mokhtarian.html
…………….

I know Reza. He collects nice cars,

I drive a ford ranger with manual transmission and a cracked wind shield.

#85 West Coast on 02.28.16 at 7:44 pm

I imagine Diane Francis should know……….’Billionaires can move offshore and never pay taxes again, like the Irving patriarch of New Brunswick did and countless others.’
http://www.vancouversun.com/business/canadians+paying+price+conceal+estate+toronto+vancouver/11750298/story.html?__lsa=2474-31a7

Dig into this juicy little site if you have endless hours of free time!
http://www.bermuda-online.org/intexecs.htm

British, American, Canadian……….after a certain level – believe me – it IS ‘risk free’.

#86 tundra pete on 02.28.16 at 7:44 pm

Doesnt matter what anyone says about living off the gov dole. Aint gonna happen. Either save your own money for yourself or suffer the consequence. That is a no brainer. Anyone who thinks otherwise is sorely mistsken. You dont get shit for free.

Live by what Garth reccomends and do well. The rule of 90, love your dog and read a pathetic blog. Simple as it gets.

#87 hope & ruin on 02.28.16 at 7:45 pm

@ Millennial Realist
@ mountain guy

I agree that switching to a minimum income reduces government overhead. Could it provide a security blanket for people to take greater risks? Maybe. Although I’m not sure the risk takers would care.

But how much will the government have to tax earnings over the basic income to pay for all of this? 40 percent? 50 percent? Probably more.

Why penalize the most productive members of society to benefit the least productive? The least productive people of society will contribute even less.

The kind of people that don’t read finance blogs and only get out of bed to work their crappy min wage jobs to buy smokes and beer? I know at least 30 guys at a plant who would love to take 20k a year from the government to stay home play xbox and smoke weed all day. I don’t see how this will increase a societies productivity.

And how are you going to find workers to do the crappiest, dirtiest jobs out there? Clean toilets for 12 bucks an hour, taxed at 50 percent or sit at home and play video games? These are dumb ideas.

For the record I’m a centrist millennial with a slight right lean. Not a slow driving wrinklie dinosaur. I’m interested in peoples idea on this topic just not sure it is well thought through.

#88 Asusefulasthe700club on 02.28.16 at 7:47 pm

Sunday service for the last of the right wing dodos.

Skip.

#89 Count Flipalot on 02.28.16 at 7:51 pm

“They crave a new cradle-to-grave social support”.

Nowhere is this more true than government civil servant and related workers. Never understood why I as a taxpayer have to contribute to their full indexed pension plans. Always believed that government is supposed to work for the people, not vice versa.

#90 Marc in Montreal on 02.28.16 at 7:54 pm

T2 vs. Harper

– The TFSA is not eliminated nor capped (5500 more this year, probably the same next year), and Garth said RRSP helps rich ppl. more anyway…

– 10% down on 500000 + houses: won’t do squat for Van ot TO…

– Budget: they both (will) overspent (promise for permanent $1.5B reno tax credit / 2 million fake lake, wtf was that!); Harper-led governments ran a string of 6 straight deficits between 2008-09 and 2013-14

– Taxing the rich: Garth said the 1% will get creative in finding loopholes, so it won’t do much

– Fighting Financial illiteracy: Never heard T2 or Harper mention anything about that

– Guaranteed annual income: if the middle class ends up paying for it (like in France [btw avg. CAC40 tax rate is just 8% there]) it won’t matter much to the rich.

So outside of foreign policies, pot and leading the way at TO’s gay parade, what’s the REAL difference between Harper and T2… what am I missing here?

“Whatever the flavour of government, we’re not moving in the right direction.” – Garth

#91 Brian Ripley on 02.28.16 at 7:54 pm

“It’s a society of consumption…” Garth

This is easy to demonstrate; chart: http://www.chpc.biz/household-debt.html

I should be able to get all the full year data points (2 month lag) up in March.

I don’t understand how any politician in North America can claim to have a way of creating better/higher paying mass market jobs unless our competitors raise employee wages in their own markets, or import tariffs (trade wars)…. or failing that, we would have to further depreciate our currency and start producing goods for our own consumption. How likely is any of that?

If the bet on inflation in the real estate sector does not continue to unfold, then fundamentals (real world) will take over again.

#92 max on 02.28.16 at 7:57 pm

What I find interesting, real estate was down 80% last month. China is falling apart. One thing I know about Chinese, both mainland and Hong Kong, they don’t like banks. Asians in general don’t like banks. Its why the Japanese invested heavily into U.S. real estate in the late 80’s, when everyone thought they’d become the next economic super power!

I actually think the Asian demand is very low. We don’t see a flood of Asian immigrants coming in. The investor visa is still dead. Sure there is capital flight out of China, some is landing here. I now see a lot of listings in the high end. A few have been on the MLS awhile. The nicest street in Surrey now have 5 listing all near each other. The high end in White Rock (ok they are really Surrey) is also increasing in listing. One realtor even has the house priced at $6,666,666, guess they don’t want Christian rednecks! I believe the foreign demand is not only low. Like the Japanese in 1991, the financial crisis in China and Hong Kong has people needing cash. In others just as many want to get out as in!

#93 GenX on 02.28.16 at 8:06 pm

Garth, you should read ‘The 4th Turning’.
It says there that during the 4th turning a charismatic leader comes on stage(T2?) and the society will march together(not necessarily in the right direction).
The individualists (people who take this blog seriously, like me) will be smashed and forced to march with the rest.
It seems to me that all that reasonable people can do in times like this is to try directing the march in a direction less bad than our neighbours and try staying alive.

Good luck everyone!

#94 Babbler on 02.28.16 at 8:10 pm

“While it’s obvious cheap money, house lust, financial illiteracy, easy credit and a disregard for debt have propelled house prices to the absurd, nobody’s buying it. Instead it’s the fault of flipping realtors, Chinese dudes and lame politicians. While rank speculation is killing real estate, we flame crooked immigrants.” – Garth

———————————————————–

Immigrants have certainly helped to inflate housing prices. They are just as susceptible to house lust and financial illiteracy as “old Stock” Canadians. The ones I know mostly also have a disregard for massive debt.

#95 For those about to flop... on 02.28.16 at 8:11 pm

#76 kommykim on 02.28.16 at 7:19 pm
I was in the grocery store checkout yesterday and watched a mid 40’s couple attempt to pay. She put her first debit card in. NSF. So she gets on her phone, attempts to move some money around, fails, and then tries another card. Then does the same thing with a 2nd and 3rd card. I moved to another line. They were still there when I left. All for a $120.

/////////////////////////

Hey Kim,I done my good deed yesterday ,the guy in front of me at the supermarket had 3 items and could not get any money off his card.
I paid for his items ,the grand total $4.60…
It blew me away that he never had a fiver!
Not much of a donation ,but it was the thought that counts…

M41BC

#96 -=jwk=- on 02.28.16 at 8:12 pm

Blog dog Joe is a classic conservative. Pretend that the government is not involved. Ignore that CMHC elephant in the room. Claim to want a ‘open market’. Ignore that CMHC elephant in the room. Raise hackles if the government that created the CMHC would dare ‘intervene’ in the ‘open market’. Then, when/if the crash comes claim “due to government interference” and be the first to demand government aid.

Remember kids all conservative debt is good, all liberal debt is bad.

#97 WalMark of Sadkatoon on 02.28.16 at 8:14 pm

WalMark of Sadkatoon, who can’t get a job, wrong on Buffett and Watsa lol

classic

#98 NoOneOfConsequence on 02.28.16 at 8:16 pm

Wow. Lots of confused people on the blog today.

I haven’t read such a mindless regurgitation of various doomer sites in a long time. It’s like some kind of weird dogma is being spewed thru the mouths of the ignorant.

It’s become quite apparent that people are securely attached to their views. Clearly few consider your comments you attach to their comments.

If people would actually apply some critical thinking skills, I believe the world in general would be a much better place.

But…people are funny that way.

#99 Ex-Cowtown on 02.28.16 at 8:17 pm

It occurred to me that Obama and Trump really have the same message, one of hope and change. The difference is purely whether you have an exteral or internal locus of control.

In Obama’s case, he preaches that the government (external locus) is the only source of hope to change peoples lives. Trump preaches that people themselves (internal locus) are the only hope that they have to change their own lives.

Strangely, they both also preach intolerance. Obama is utterly intolerant of anyone who disagrees with him about, well… anything. Trump is utterly intolerant of people who are too lazy to take responsibility for themselves.

Hillary? Rhymes with pillory. And that’s where she’ll be going unless the Americans are so stupid that they elect her.

#100 Chris on 02.28.16 at 8:18 pm

They are really thinking about handing out money to everyone? Aren’t we in deficits, and big ones? How would that work?

#101 ender on 02.28.16 at 8:18 pm

Both the Liberal Ontario and Federal governments are unfortunately paying for an idealistic agenda without regard for the long term economic impact. I guess the “New” governments are all about promising extravagant spending to buy votes even when the economy has turtled. But it’s okay because the government is compassionate and as such, if you are in trouble, they’ll bail you out. It’s such a deadly mindset. Canadians now have the expectation to be saved from themselves.

I just shake my head every time they bank roll yet another egalitarian program when they have no money. My kids will undoubtedly suffer the most for undisciplined spending.

Thankfully, I’ve been renting for 9 months in Unionville with a fat investment portfolio. I was fearful of the economy a year ago but right not I’m down right terrified.

#102 For those about to flop... on 02.28.16 at 8:20 pm

#81 Russ on 02.28.16 at 7:31 pm
Oh yeah, and this…

“… As an equities peddler and multi-millionaire investor yourself, you stand to gain in two fundamental ways from putting the burden of retirement funding on all individuals. You stand to gain because they will need the help of professionals such as yourself, whereas with state pensions that is unnecessary.”
==============================

Okay, all I saw was one fundamental gain expressed.

Will someone enlighten me on the second gain that Garth is accused of receiving?
But not Mark, I prefer to read something believable.

Cheers, R

The second was too dumb to include. Use your imagination. — Garth

////////////////////////
Umm boss … I believe Russ did use his imagination when he asked Mark not to comment…

M41BC

#103 Unhinged Loon on 02.28.16 at 8:21 pm

Canadians remind me of this couple:

https://www.youtube.com/watch?v=ye-XEcD8gRo

STEAK IS FOR TAXPAYERS!

#104 David on 02.28.16 at 8:23 pm

Some form of guaranteed income will eventually become a political necessity. Going forward markets simply won’t be delivering more jobs or wage gains.

#105 espressobob on 02.28.16 at 8:23 pm

Some people underperform in life due to a lack of education. It’s worse when they are not listening.

The inability to learn is the worst scourge going.

#106 Paul B on 02.28.16 at 8:25 pm

That was an amazingly profound blog post, Garth. As a society,we have become irresponsible with our finances and debt load. Like you said before, it won’t end well.

#107 Sideshow Rob on 02.28.16 at 8:26 pm

#9 Jacy McNore

Mark,
Who would be the best USA President Elect for the friendliest relationship with Justin Trudeau and Canada, in the economical sense? That is who I hope can win the election because when Canada and the U.S. work together they both win.

///////////////////

The only chance of a US prez that operates on the same level as JT is if they elect Derrick Zoolander.

#108 Crappy armchair economist on 02.28.16 at 8:26 pm

if the government wants to intervene in the housing market here’s an idea.

Increase the minimum down payment by 1 percent each year for 15 years. Until we reach 20 percent.

What affect would this have on the market?

#109 Nodebt on 02.28.16 at 8:28 pm

#47 Marco Polo
Thanks for your Insite but you don’t have a clue, keep playing Marco Polo, lmfao!

#110 45north on 02.28.16 at 8:31 pm

Bigger picture, I also worry we are collectively losing our way when it comes to our approach to serious political issues,” adds Joe. “With housing and the economy, it troubles me that the majority of people now look to government

Just as we look to the government, it becomes unable to withstand any sudden shocks:

Ontario is seriously unprepared to withstand any sudden shocks to the economy, the provincial government’s new budget reveals.

http://ottawacitizen.com/news/local-news/reevely-eight-years-after-the-recession-sousas-budget-shows-ontarios-still-desperately-fragile

You can’t make this stuff up.

#111 kommykim on 02.28.16 at 8:31 pm

RE:

#3 Nodebt on 02.28.16 at 5:15 pm
We were over there at 10:45 pm in the dark, good thing our iPhones have great flash lights lol. I bought the lot with my cousin. The realtor sold it 50-70k under what it’s worth, don’t have a clue why.

Maybe you’ll find out tomorrow when the sun comes up.

#112 The American on 02.28.16 at 8:33 pm

Smoking Man, it isn’t about wanting or not wanting Trump to be President. You clearly want him to be President. That’s fine. But the fact of the matter is this… he won’t be. It will be Sanders or Clinton for the way the Electoral College works and in consideration of Delegates vs. Super Delegates. It isn’t about getting over it. Perhaps you should stick to what you know and go smoke another bowl. If you’d like, I’ll put a wager on it. Your call.

#113 Nemesis on 02.28.16 at 8:35 pm

“Real estate’s become a casino in which every player thinks they’ll win.” – HonGT

#NotFairToCasinos… #AfterAll,They’veGotRules…

https://youtu.be/4i7m1eU6iOQ

#114 45north on 02.28.16 at 8:43 pm

AB Boxster: My parents lived through WWII and it was a terrible time.
But it was over in 4 years and started a period of huge prosperity in North America.

it was over in 4 years for the US. 6 years for Canada

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

#115 Mark on 02.28.16 at 8:45 pm

“Increase the minimum down payment by 1 percent each year for 15 years. Until we reach 20 percent.

What affect would this have on the market?

Probably wouldn’t do much of anything to slow the nation-wide declines at this point that we’re entering the 3rd year of. But would be a good step towards future stability so that a bubble isn’t reflated after the decline/crash-in-progress is completed.

Contrast such with the USA, where the minimal-downpayment mortgages were revived through various means, thus creating what some are now describing as a second real estate bubble.

Like the Japanese in 1991, the financial crisis in China and Hong Kong has people needing cash. In others just as many want to get out as in!

Exactly. Capital flight *out* of Canadian RE is likely just as much of a problem, if not larger than a relatively small handful of wealthy Chinese sending a few bucks to Canada. As reported a month or two ago, the CBSA has been engaged in some pretty significant inspection activity on *outgoing* passengers to China from YVR. Something my friend, a relatively frequent traveller to Shanghai (in the clothing business) had never experienced in prior years.

“Chinese” may very well be net sellers of Canadian RE, not buyers, to support falling valuations and satiate debt calls back home.

#116 Vancouverite on 02.28.16 at 8:46 pm

#107 Crappy armchair economist on 02.28.16 at 8:26 pm
if the government wants to intervene in the housing market here’s an idea.

Increase the minimum down payment by 1 percent each year for 15 years. Until we reach 20 percent.

What affect would this have on the market?
—————————————–

To cool things down, one way would be to just going back to minimum 25% down payment for anything over $500,000……and with minimum amortization 25 years.

But no government wants to do that.

#117 protea on 02.28.16 at 8:46 pm

Listening to CBC this morning was interesting to hear Canada’s former parliamentary budget officer Kevin Page say that the Liberal government is even less transparent on fiscal matters than the Conservative government it succeeded. “I don’t think it is [more transparent]. The documents — they’re not better from a government that promised to be better, more transparent … there’s no more information, perhaps even less information, than what we got from the previous government,” Kevin Page said said in an interview CBC Radio’s The House.

“I don’t think we’ve seen the transparency yet,” he said. Here is a brillant economist who was a thorn in the side of the Conservatives not holding out much hope for the present crew.

Being an immigrant to Canada for over 40 years the first time in my time here that I fear for the future of this wonderful country given the leadership that we have Federally .Alberta,Ontario and most of the rest of the provinces. My predication is Canada sliding into a position of weakness in the next decade.

http://www.cbc.ca/radio/thehouse/preston-manning-s-prescription-to-recharge-the-right-1.3463742/liberal-fiscal-plans-less-transparent-than-under-harper-kevin-page-says-1.3464078

#118 Slumking on 02.28.16 at 8:48 pm

I love the rental market where I am. I cashed in all my tfsa money and stocks I had invested and bought 5 rental Houses with 3 suites in each of them. I’m now making a average return of 16 percent. It’s great! And the best part about it is Every 1st of the month I jump into my 1976 Convertible Cadillac eldarado(golf clubs in the back) and go house to house and pick up the cash. No stress at all. I’m 35 years old I think it’s a great age to retire. Have a horny weekend everyone! From b.c with love. :)

Isn’t the Internet great? — Garth

#119 Randy Randerson on 02.28.16 at 8:50 pm

I secretly wish the entitled bunch would just work till they drop, since they think investing for retirement is futile.

#120 Smoking Man on 02.28.16 at 8:59 pm

The problem with millennials is they haven’t been around long enough to build enough real life experience to form a rational opinion.

It’s refreshing all the same, takes me back to my youthful communist leanings till I figured out you make way more loot with your brain than your hands.

Selling things gives you minimal risk and an endless upside. They haven’t quite figured out trading time for wages is a loser’s game.

They have been handcuffed and disarmed by the current education system, the higher up the schooling chain they traveled, the more doomed and prone to slavery they are.

They are not idiots, they sense they are screwed and they really are. But it’s their stubborn inflexible belief system that is keeping them from really making it. Who wants to admit to themselves they are losers?

So they blame their fathers and mothers for all their shortcomings.

I mean look at all the verbal acid I typically chuck in their faces, I never get a half decent rebuttal. They’re either afraid to debate the Great one, or Ad hominem attacks. Joking Man. Or they just let their training kick it, ignore a true teacher in the room. Hopeless lefties.

After barley passing high school, I started out as a rivet bucker inside airplane wings for ten years, I Evolved, learned and started building business and selling them and things. The internet was introduced where I could learn anything I took a fancy too extremely fast.

I’ve taught my self to program to help me automate my businesses, remember in 1995 no such thing as Quick Books or CRM software. I liked it so much that I sold my mfg. company and did it professionally, at first the pay sucked but was already quite rich so It’s didn’t matter.

Eventually I ended up on Swaps and Bond Desks for some of the largest banks in Canada and the USA.

If anyone knows anything about swaps, they would bet their entire life’s saving that my above mini bio is complete bull shit, and they would lose.

Yes, I know you need a MBA or PhD in math for some of these gigs. I got so good at what I did it was always over looked in interviews, I also spent large parts of my time training some of our Quant guys.

You kids, now your going to tell me that it can’t be done today.

And your wrong, so keep bitching, whining and selling your teachers covert union ideology insuring employment for those useless eaters for years to come.

You got google, there is nothing you can’t master if you so chose too.

My next goal is to publish a great fiction novel, I’m not a celebrity or Journilist with a huge following so it wont sell many or make money. But that’s not the goal.

I’m really a hard core dyslexic, my bad spelling is real and it’s something that’s on my bucket list.

That’s the way successful boomers roll. Stop bitching and start learning.

Dr Smoking Man
PhD Herdonomics

#121 greyswan on 02.28.16 at 9:00 pm

We live in a society that very complex and is manipulated
by the financial bank policy well before 2008.We live a environment they control.The experts penalize savers and reward borrowing…and their real estate goes up in value!!
“We have to take personal responsibility for ourselves”…lol
The false man made environment we live is caused by greed at the top of the financial world….you would almost think the sun would not rise without the money changers….governments need to regulate!!
Garth you are entertaining….that`s all.

#122 james on 02.28.16 at 9:00 pm

“What happened to personal freedom, Garth? You conservatives love to talk about so called freedom.”

Oddly enough, the political philosophy most closely associated with the idea of freedom is liberalism.

That is, what we now call classical liberalism.

It’s kind of sad in that rejecting crony capitalism so many people veer towards stale, defeated ideologies like socialism or communism. As if there are only two teams and if you don’t like one you have to join the other. It would be better if they started to read about libertarianism, anarchism or a host of other approaches to political philosophy.

I can’t understand the frenzy for public sector pension plans. Anyone who reads up on Wall Street and the financial crisis knows that the main function of many investment banks is to shovel dodgy products into public pension plans. They have a pretty low average return, and the rules for passing on your stake when you die are quite different than for brokerage accounts.

I guess it is much easier to expect a big, omniscient and benevolent government to wipe your bum than to take some personal responsibility.

#123 james on 02.28.16 at 9:03 pm

#117 Slumking

“I cashed in all my tfsa money and stocks I had invested and bought 5 rental Houses…. I’m now making a average return of 16 percent.”

When? Back in 2002? Rental yields are not that high now.

“I’m 35 years old I think it’s a great age to retire”

Anyone who seeks to retire so early is weak and lazy. People with talents and ambition never truly retire.

Can you imagine if Newton, Galileo, Darwin and others had that attitude? Ugh.

(Now being ABLE to retire that early is a good thing. Actually sacking out and spending the next 50 years of your life as a mindless consumer is not. It shows you have no real contribution to make to the world).

#124 Slumking on 02.28.16 at 9:05 pm

Maybe explain your last comment on “isn’t the Internet great” comment Garth? Sorry just confused? Thanks man.

#125 max on 02.28.16 at 9:08 pm

The American tax firm H&R block business model in the U.S. was guaranteed income tax refunds. Their slogan last year was Get You’re billions back America! This year they guarantee they’ll help you pay half in taxes! Liberals love liberalism until it costs them directly. Trump will win in a landslide.

#126 BadMagpie on 02.28.16 at 9:15 pm

Well, 28 pages later, I have accomplished the task of properly reporting my TFSA to the IRS as a “US person”.
Should’ve cleaned it out completely and closed it before I moved here, but oh well.
Forms 8858, 3520, 3520A, and an account statement. Forms 1041(J) and 4970 were omitted since it’s a simple trust with no accumulation distribution.

#127 The Amerian on 02.28.16 at 9:23 pm

At #124: Max, H&R Block makes no such claim to “guarantee they’ll help you pay half in taxes.” Again, my gawd, where do you all come up with this stuff? Trump is winning the nomination for the Republicans. He will not be winning Presidency. Please, people, get this through your heads.

#128 WalMark of Sadkatoon on 02.28.16 at 9:25 pm

Can you imagine if Newton, Galileo, Darwin and others had that attitude? Ugh.

they would still be dead.

retire whenever u want. you’ll be dead soon.

#129 The Amerian on 02.28.16 at 9:25 pm

At #124: Also, last year, H&R Block did not guarantee Americans tax refunds either. H&R Block guarantees to get you the maximum refund you are entitled. That is their guarantee. So, if you’ve underpaid your taxes, even in considerations of all the deductions allowed, you aren’t entitled to a refund.

#130 Prairieboy43 on 02.28.16 at 9:26 pm

I have been talking to “Millenials” recently. Learned there are different groups within the “Millenial” name. There are the “Bros” aged between 34-26, then there are “Hipsters” 30-22 age group. Turns out they have differences.

https://youtu.be/IGkuxk-LPww

PB43

#131 John in Mtl on 02.28.16 at 9:26 pm

@ #89 Count Flipalot on 02.28.16 at 7:51 pm

… “Never understood why I as a taxpayer have to contribute to their full indexed pension plans. “

I don’t see why you, and everyone else that thinks this way, have to keep bringing this point up ad nauseum. The “full indexed pension plans” are part of the remuneration an employee gets for working, its not something extra. Instead of getting X per hour, say; he gets X + a pension benefit. Because that’s what was collectively negociated between the unions and the employer. Somewhere else in the working world and for the exact same kind of work, X might be a lot more but without a pension benefit.

Of course, we hope a) – the government employee is efficient and does the work competently; b) – his job/tasks/labour/expertise is worth what we are paying; and c) – that we get our collective money’s worth out of paying that salary against a service we collectively receive.

In an ideal world, a, b and c are true. Unfortunately it is not an ideal world, but it has nothing to do with your statement!

#132 WalMark of Sadkatoon on 02.28.16 at 9:26 pm

hey where was that US deflation? oh yeah, it was never really here. lol

#133 AfterTheHouseSold on 02.28.16 at 9:28 pm

“… the Ontario government could go ahead and develop a north-south road now if it wants. Queen’s Park has committed to spending $1 billion on Ring of Fire infrastructures, and has asked the federal government to do the same.”

A billion here, a billion there. How does this fit into their green economy? Isn’t mining kinda dirty?

http://business.financialpost.com/news/mining/ontario-court-ruling-opens-up-potential-road-access-to-ring-of-fire-mineral-belt

#134 Smoking Man on 02.28.16 at 9:30 pm

#111 The American on 02.28.16 at 8:33 pm
Smoking Man, it isn’t about wanting or not wanting Trump to be President. You clearly want him to be President. That’s fine. But the fact of the matter is this… he won’t be. It will be Sanders or Clinton for the way the Electoral College works and in consideration of Delegates vs. Super Delegates. It isn’t about getting over it. Perhaps you should stick to what you know and go smoke another bowl. If you’d like, I’ll put a wager on it. Your call.
…………

Dude perhaps you are right he won’t win, I don’t know enough of the workings of what you describe. So I won’t take your bet. I only bet on sure things that I understand. But look at the turn out Trump got in Nevada. This is a movement a revolution in the making.
I will bet you this, Trump will win the nomination and will bet that in November it will be the biggest voter turnout in American History.

Yes I do want Trump to win, I have an anarchist tendency in my soul. Can’t help it. Established Authority figures remind me of my teachers. Watching grovel is so satisfying.

I’m on a TN visa right now, working for a great company in Boston, Pay is huge, $USD.

Get to travel and see all the great cities of America. If trump wins I kiss that gig good bye.

But it will be worth it, I know for a fact that justice will be served on behafe of the 3000 Americans that died on 911 and thousand of senseless deaths of US, and Canadian service men and woman who died in Afghanistan and Iraq, I call it the crime of the century.

I have a huge tin foil fedora that I proudly wear.

The NEOCONS know it’s coming that’s why they are in total phyco mode.

#135 Slumking on 02.28.16 at 9:30 pm

RE: James Anyone who seeks to retire so early is weak and lazy. People with talents and ambition never truly retire.

Can you imagine if Newton, Galileo, Darwin and others had that attitude? Ugh.

(Now being ABLE to retire that early is a good thing. Actually sacking out and spending the next 50 years of your life as a mindless consumer is not. It shows you have no real contribution to make to the world).

I just volenteer in the community and give back now James. Chill girl!

#136 DON on 02.28.16 at 9:37 pm

#14 preet89 on 02.28.16 at 5:43 pm

Did you have your own phone at 12 years old? No, I (we) do now.

Did you get a new Honda Civic when you graduated high school? No, I (we) do – and some get more higher end cars.

Every generation gets a better and better life thanks to the one before them.

If my parents retire at age 60, I would expect that I can retire at age 50 if I choose to. So I could take those years from 50 to 65 and enjoy them now from 20 – 35 and then work a bit longer past 50.

In Japan interest rates are low for generations. Many people say this is normal now.

It really comes across that most people over 40 are jealous of the younger generation because we can afford cell phones, nice clothes and a new(er) car.

***************************************
Yikes!.

I understand your frustration, but to generalize is plain ignorance especially in light of google. Dumb, greedy, idiotic transcends every generation. Every generation has every personality type.

Use google and do some research on that iphone. Just remember that in ten short years you become old compared to the new generation and they will bitch about your generation as well. Find strength in like minded people from all generations.

#137 Herb on 02.28.16 at 9:39 pm

Garth, while indeed it is obvious that

… cheap money, house lust, financial illiteracy, easy credit and a disregard for debt have propelled house prices to the absurd …

you are disingenuous in blaming the house-lusting, speculating victims.

Canadians have wanted and bought houses before, for decades, without driving prices to the absurd. What accounts for the difference this time? May I second your “cheap money”, “easy credit” and “disregard for debt”, making debt easier to obtain and carry than ever before? Add all-pervasive marketing by the financial and real estate industries, and we are where we are.

So how did we get here? Who were the actual “architects” of this housing market? Who moved the government to ease the purse strings and mortgage regulations and continue to ensure lenders through CMHC? It was not clamouring house-horny taxpayers, but the executives and lobbyists of the FIRE Industry.

The problem was created by government, and government will have to intervene to solve it. The only way the market will “sort itself out” will be to dry the swamp of cheap and easy money. Pity the government that will have to do it and leave of current home owners high and dry.

#138 Bram on 02.28.16 at 9:50 pm

#47 Marco Polo on 02.28.16 at 6:36 pm
Farmland used to sell in central AB for around $500/acre, in quarter section quantities. Now its over $1000/acre near any towns or cities.

Hearing those prices, I would be tempted for a long term investment.

But I always wonder: can you buy and forget?

I’m always afraid that with that ownership come obligations, like: responsible for maintaining drainage channels, responsible for clearing weeds, responsible for fencing, etc. etc. And of course property tax, but surely that can’t amount to much at those land prices?

Anyone here who knows what ‘gotchas’ are involved when you buy land that has not been zoned residential yet?

Bram

#139 Vampire Studies GMST 454 on 02.28.16 at 9:51 pm

14 Preet89

“It really comes across that most people over 40 are jealous of the younger generation because we can afford cell phones, nice clothes and a new(er) car.”

I know you’re a troll with a silly comment like that. I had a nice car and clothes when i was young too.

Now my phone is 7 years old. Still works. Dont care if I break or lose it. My clothes are OK, but I invest more in the machine under them. Just got a newer car (2011). It has a computer. I paid cash for it.

#140 common sense on 02.28.16 at 9:57 pm

No new news out of the G-20 Summit this past weekend…aka stimulus and the Chinese stock market is already down 4% to Nov 2014 levels…..

March should be fun….How long until the govt’s start rumouring up the markets again?

#141 For those about to flop... on 02.28.16 at 10:00 pm

Smoking man # 119

I mean look at all the verbal acid I typically chuck in their faces, I never get a half decent rebuttal. They’re either afraid to debate the Great one, or Ad hominem attacks. Joking Man. Or they just let their training kick it, ignore a true teacher in the room. Hopeless lefties.

///////////////////////

I’ve kicked your ass so many times on this blog that I had to go and buy a new pair of shoes…

M41BC

#142 jane 24 on 02.28.16 at 10:10 pm

The truth is Garth that the young have indeed been right for 20 years or more at this point. You can indeed get rich on holding house debt without the bother of learning about investment in stocks or bonds. I am Old School like you, debt is not credit but so far we have been on the losing side. Those borrowing one million to buy a beater have been on the winning side and until a black swan event like oil in Alberta, an earthquake in BC, the kids will be right.

Hardly. Over the last two decades liquid assets outperformed real estate, using any national measure. But it is not a contest. Those who do not lead balanced investment lives court large risk. — Garth

#143 Two-thirds on 02.28.16 at 10:37 pm

The only constant is change. It always has, always will.

One supreme blind spot electorates worldwide have is our support for those promising and end to x, brought upon us by y. Where:

x = undesirable situation(s)
y = them

And x can be defined thusly in the contemporary world:

x = o(u + y)**(g*i*a)

Where:
o = actions
u = us (any defined group)
g = globalization
i = internet
a = automation

Any intellectually-honest discourse must recognize that, most situations are shaped by our actions and those of others, compounded by the three omnipresent realities of globalization, instant and persistent connectivity, and their baby sister; automation.

The world’s resurgent crop of demagogues are fond of railing against “them” and all the evils of globalization, while conveniently tiptoeing around the unwise actions and attitudes of their incandescent supporters, most often, using digital, connected platforms.

Visions of justice, hope, and change, are withing grasp, we are told, and “them” will pay for it dearly. These futures are irresistible: after all, if someone will fight for us, we will win and “them” will lose, and all we must do is elect someone who fervently and justly can do so. What is not to like about that?!

The complication is that no one (thus far) can demonstrably bend g, i, and a to their will, while most of us in “advanced economies” are too invested living our lives around and enjoying the fruits of globalization, omnipresent connectivity, and (soon enough) relentless automation.

Although we may not consciously or willingly accept this, making the promised “new eras” viable, would require a radical change in the equation, redefining g, i, or a, or taking them out altogether.

Fixing all the putative wrongs thus cannot be accomplished without erecting some barriers, whether physical, financial, digital, or technological. The agonizing truth is the world is far too connected, interdependent, and synchronized for an entity/nation to unilaterally change their own rules and expect it will be able to control the outcomes.

Goods, capital, talent, information, companies, and more no longer have borders. All governments have obligations, monetary and legal that binds them, for better or worse, to other international entities (including, but not limited to, other governments) and their decisions. And private enterprise is now global/supranational, exerting influence on a historically unprecedented scale in the digital economy and relentlessly defining the future. Technology companies now rival governments (and in some cases have already surpassed them) on their ability to set the agenda for how the world is to function and most of us have unreservedly embraced their leadership. If you are reading this and can instantly reply to these words on your mobile device, no matter where you are in the world, often for free, you know this to be true.

So if we (the people, I suppose) are not going to take it anymore and we want “them” to pay for our discontent, we must ready ourselves for disappointment. Unless the leader is ready and able to reform/possibly halt globalization, the internet, and automation, the world will continue its inexorable march towards “progress”, with a mixed bag of benefits and ills for all.

Or, we must be willing to suffer major adjustments in our free, omnipresent instant messaging social media, our infectiously affordable technology and a smattering of implausible consumer goods, like strawberries in January.

If what we seek is a more fair, clean, and sharing society, and we want to maintain globalization, connectivity and technology, then we must accept that some of our losses are other people’s gains.

People like the tech billionaires, whom we enrich more daily, by voluntarily and obsessively using their products, real and virtual. Folks like the job-stealing foreign labour that thanks to the factories that opened in their country are now able to enter the middle class (or at least abandon poverty) and their children, who may now have a shot at a better future than their parents. Or (gasp) the oil producers that provide fuel for materials and goods to cris-cross the globe to be sold here or (triple-gasp) the bankers that enable the companies on both ends to transact and us to tap’n’pay for their products.

If we think we can do better, then let us lead by example. How hard is it to make a bird-smashing app, and sell it for $1 a million times over? Or 40 million times? Who is stopping us from doing so? Digital entrepreneurs are working on blockchains to upend the current financial system and make it more secure, simpler, and cheaper. The sharing economy is enabling folks to earn an income by renting their cars, homes, and labour, so why won’t we do something like that?

Oh yes, of course: it is a lot more expedient to outsource these actions, decisions, and outrage to elected folks. We are morally/ethically above the alternative.

Now if only someone would create a carbon-neutral, organic, fair trade, and gluten-free ethical voting app, I would agree to that approach :).

For now, I will stick to bloggin’ and doggin’, and being flamed in 3, 2, 1…

#144 bmc on 02.28.16 at 10:39 pm

Here is a little something we all should be thinking about when it comes to the wonderful caring T2 government……. most of the people that worked to get the wonderful caring Ontario Wynne government elected are now working for T2.
Lets put aside the fact the Wynne /Mcguinty Liberals managed to increase the provincial debt from 123 billion to 308 billion, lets instead ask how, without raising personal taxes, without raising corporate taxes, without raising sales taxes, and in a lousy economy with 7.5% unemployment, they managed to increase their annual revenues from 47 billion in 2003 to 124.4 billion as of this last budget, why is no one in the msm asking, the answer to the question, is that they did it by increasing regulatory fees by forcing government oversight of almost every sector of the economy, and increasing user fees for government services, businesses just quietly complied and passed the cost onto customers, some packed up and left, it is STEALTH TAXATION
Should we be expecting the same from T2

#145 Millmech on 02.28.16 at 10:39 pm

What happened to all the comparisons of Vancouver being the Hong Kong of the west coast,ie their real estate could only ever go up(mainland Chinese buyers buying up everything),no more land to build on,sounds familiar?I wonder how many owners seen it coming and cashed out at the top before the 80% price drop,or did they all believe it would never end?

#146 ROCK BEATS PAPER on 02.28.16 at 10:48 pm

“Since when is owning 1 re property a “speculation”?”

-When buying into a clear bubble, like Vancouver!

Garth, please cnsider refering to Vancouver as a full fledged bubble of epic proportions ready to crash at the next recession. OK, if you want to pussy foot about the GTA slowly declining. But the price to income ratio, rent to price ratio, and price to household income mathematically mean that YVR is several standard deviations out of control such that it is the definition of a bubble, where prices going parabolic has always meant a crash. It is not different this time.

There are plenty of places in Canada that are reasonaby priced, YVR and GTA are not them.

The WOLF comes at the end of the story.

#147 Dogs are great on 02.28.16 at 10:53 pm

”As long as they don’t insult your dog.”

Who would insult a dog? Dogs naturally embody everything positive about man, without the any of the bad stuff. Optimism, friendship, loyalty, energy, and enjoying the moment. Without greed, hatred, competition, envy or selfishness.

We have a lot to learn from dogs. Their shorter lives and the way they make the most of it should teach us something.

#148 Gov't involved on 02.28.16 at 11:00 pm

Government intervention got us into this mess by allowing cmhc, lower to no downpayment and keeping interest rates low. This ia already a skewed market.

#149 Leslie on 02.28.16 at 11:09 pm

It is over .. interest rates will stay this way .. last time it rises was because the central banks were newbs and lost control of inflation after removing the gold standard..
They are pros now . Not going to lose control again.

#150 HeartSutra on 02.28.16 at 11:13 pm

Life is short and we actually own nothing in this world. Live within your means, peacefulness and joyfulness, that’s all you get from this short and temporary life.

#151 p123 on 02.28.16 at 11:17 pm

Garth, it looks interest rates won’t rise any time soon. It says it’s most likely going to go down.

https://www.washingtonpost.com/business/economy/when-will-interest-rates-bottom-out/2016/02/26/2f148b14-d71d-11e5-9823-02b905009f99_story.html

#152 Marco Polo on 02.28.16 at 11:21 pm

Bram #137,

Yes you can buy cheap farmland, but there on ongoing costs, and the yield on the investment is quite low if you rent the land out to other farmers for a crop. If you take the crop off yourself, you’re a farmer, with all the weather, equipment, and financial risk. Farm land immediately near a large centre has already been speculated on, and is often sold to a developer who splits it into small pieces to resell to unsuspecting city folks, maybe even for $115K each.

Again, no crisis, no opportunity. Commodity prices are fairly low, but few farmers are motivated to sell land lately, and prices are near all time highs. The upside of urbanization is a long game, and you have all the property taxes to pay as you get there.

As Garth advises, dividend paying investments are a much cleaner use of money.

#153 Smoking Man on 02.28.16 at 11:24 pm

#140 For those about to flop… on 02.28.16 at 10:00 pm
Smoking man # 119

I mean look at all the verbal acid I typically chuck in their faces, I never get a half decent rebuttal. They’re either afraid to debate the Great one, or Ad hominem attacks. Joking Man. Or they just let their training kick it, ignore a true teacher in the room. Hopeless lefties.

///////////////////////

I’ve kicked your ass so many times on this blog that I had to go and buy a new pair of shoes…

M41BC
………

You wish.

There is one characteristic I like about the lefties. The inclusiveness thing.

I was at a stag for black dude that I have known since he was in Grade one. One of son number 3 best friends.
x Toronto FC player.

His father a principle at an elementary school, he agrees with me 100% on my stance on education by the way.

Now a lot of the grooms young black friends were there, looked like total gangsters to some in the room. Till you start talking to them.

All had professional, In Banking, Accounting, Law,

Very Nice boys.

How did they turn out that way. Good parents, all of the boys I interviewed just loved there folks.

Now the thing I hate about liberals, this whole hetero sexual white man bashing syndrome.

Where are the libs when it comes to Saudi Arabia. Chics can’t drive, men get 1000 lashes and prison if they even remotely chirp Mohammad. Or are like me, don’t believe in fairy tails of gods.

Where are you liberals on that. Been waiting a long time. Oh yes Justin just sold them some tanks.

In the Gym today, I could not believe it, there was a poster from the Ontario govt. About mirrors. suggesting that all men are perverts. And don’t stare at chics in yoga paints.

Wynne that’s the main god damn reason I joined the gym.

I’m a man that likes to take in the beauty of woman’s body. and I saw a hell of a lot of woman checking out those mussel men.

See Wynne, its about families, a traditional sex drive, make kids, bring them up with love as mother and father.

And I have no issues with gay couples and lesbian couples, bringing up kids in a loving home.

But why do you hate straight white men. With out us, no tax farm slaves to pay teacher salaries.

This is the puzzle I’m trying to figure out.

#154 Great Canadian Bubble Co.a on 02.28.16 at 11:32 pm

To be fair, it has been ‘different this time’ in terms of interest rates.

Historically, we have not seen such low rates for so long, and things continue to point in the same direction. Many of us have tried to apply standard personal finance theory in this environment, but if it takes decades for rates to normalize, we will have chosen the wrong path. Regardless of how financially responsible/right/historically normal our choices may have been …

#155 Damifino on 02.28.16 at 11:35 pm

#145 ROCK BEATS PAPER

But the price to income ratio, rent to price ratio, and price to household income mathematically mean that YVR is several standard deviations out of control such that it is the definition of a bubble, where prices going parabolic has always meant a crash.
——————————–

That’s pretty much what I thought too, Rock. But I’ve been in YVR for a long, long time. I’m starting to think that maybe… just maybe… it really is different here.

Gravity does not seem to be functioning. It’s truly a marvel to behold. Like the northern lights or a total eclipse of the sun.

To be honest, I find it quite exciting, but that’s mostly because I have no skin in the game. For that I am considered a fool by many. I can’t with deep conviction say they are necessarily wrong.

Still, I wouldn’t touch it any of it with a barge pole.

#156 For those about to flop... on 02.28.16 at 11:40 pm

Joking Man # 119
They’re either afraid to debate the Great one..

//////////////////////////

I didn’t know Wayne Gretzky hung out on this blog….

M41BC

#157 45north on 02.28.16 at 11:45 pm

Herb: The problem was created by government, and government will have to intervene to solve it. The only way the market will “sort itself out” will be to dry the swamp of cheap and easy money

intervene is not the right word. Act is the right word.

Pity the government that will have to do it and leave the current home owners high and dry

the current government will have to address a collapse in the housing market. Vancouver house prices are now up 50% ( July 2015 to July 2016 ). That cannot continue. How many middle class Canadians have borrowed their brains out to buy into the Vancouver market? What is the government going to do about it?

The situation in Vancouver is dire.

I have said before the government needs to raise interest rates and tighten lending standards.

The need for action is urgent.

#158 Allan W on 02.29.16 at 12:47 am

Garth is neither a liberal or a conservative. He is a NWO Globalist.

#159 Exurban on 02.29.16 at 12:57 am

#144 Millmech

What happened to all the comparisons of Vancouver being the Hong Kong of the west coast,ie their real estate could only ever go up(mainland Chinese buyers buying up everything),no more land to build on,sounds familiar?I wonder how many owners seen it coming and cashed out at the top before the 80% price drop,or did they all believe it would never end?

Say what? I live in a Vancouver suburb and work in the city. Real estate values have been rising steadily, often in double-digit percentages annually, and they are still rising. Any SFH for sale gets the SOLD sign within days. I have heard that there has been a drop in the value of Hong Kong real estate, which is good because YVR and Hong Kong RE values will probably converge eventually, and I’d rather they converged lower. I don’t know of anywhere that has dropped 80%.

#160 juno on 02.29.16 at 1:02 am

Interesting observation today.

On Kingsway, I seen several old geezer flashing sign like ÈAT AT JOES on he street corners.

I guess they are getting more desperate and there is competition for those Walmart greeter jobs

#161 nonplused on 02.29.16 at 1:04 am

#45 ben

With whose money do you think the landlords and factory owners are going to pay the property value tax? (Assuming you mean beyond the property and land transfer taxes they already pay.) I can assure you it won’t be with their own money. Taxes get baked into the rent. Just like you have to pay the tax on your own Slurpee, you’ll be paying whatever taxes are levied against your residence. It’s just the way it works. You can’t tax the rich because they don’t own hardly anything they aren’t renting out. It all gets passed to the end consumer, that being you.

This is the same reason why a “guaranteed income” must fail. Oh sure if we did a big public works program and got a bunch of nice roads and bike paths, maybe a few Thorium reactors out of it, it wouldn’t be a complete waste. But when you pay people not to work you have to shift the burden onto those who do, and eventually it makes little difference to your lifestyle whether you work or not so you don’t no matter how ambitious you may be. Why work for $4000 a month and pay $2000 a month in taxes when you can get $2000 a month for free and go skiing? Skiing wins every time, even if you have to live in a van to afford lift tickets. Except the hill won’t be open because the lifties won’t want to work either.

None of these socialistic schemes can work because the only real sources of wealth are labor, raw materials, and reinvestment of excess (capital). Sure the rich are skimming the system, but not enough to make everyone else rich if they won’t work and build capital.

The only way the system can guarantee income is if it is functioning well enough to create jobs, which it cannot do if the government is destroying the capital for reinvestment. Think of it as a farmer that is forced to sell his seeds for bread because his neighbor didn’t plant last year. That is exactly what has happened in Venezuela and it’s what’s coming here soon too if we don’t stop this unicorn and fairies type thinking.

The only unicorns that exist are single girls at swinger parties, and they are called unicorns for a reason. Everyone’s heard of them and wants to meet one, but nobody ever has. The “money” that is going to provide for universal income is much the same thing. It’s a childhood fantasy based on not ever coming to terms with the fact that your mom was Santa and your dad paid for all your stuff.

#162 nonplused on 02.29.16 at 1:22 am

I would like to further clarify the last point I made about why taxing the rich just won’t accomplish anything. The rich hardly own anything they aren’t renting out in some fashion. That is very important to understand. Sure they may have a giant mansion and a few nice cars, some of them even have a jet. But (as Garth has pointed out time and again) it is a tiny fraction of what they own. The rest is rented out.

I’ll belabor the point for the slow of hearing. If they own a factory making something you buy, the rent is in the purchase price. If they farm the rent is in the cost of the wheat. If they own the apartment you live in it’s fairly easy. And they are already taxed at every step of the way and guess who pays those taxes? It isn’t them, quite frankly they don’t have the money all they have is the assets. You pay.

Sure, they skim a bit to pay for their expensive cars and trophy wives but it’s a fraction of what the government is already taking in. And there is no way other than seizing their assets to shift the burden of payment from the purchasers of goods to the owners of capital other than seizing the assets, which has never been shown to work.

Let’s take the example of a mythical Saskatchewan billionaire, Edward Murries. Sure he’s living the life, but actually only on $10,000,000 a year despite having assets supposedly worth billions. So let’s tax him at 10% on his capital. Well guess what? He doesn’t have the money! He now has to sell shares in his online poker and dating websites to pay his capital tax. Who’s going to buy them? And now that all the billionaires are being forced to divest of their Ashley Madison shares, the price is collapsing!

This is why socialism always fails. Only what is currently being produced can be consumed or reinvested and if you aren’t producing, well….

#163 kommykim on 02.29.16 at 1:32 am

RE:

#94 For those about to flop… on 02.28.16 at 8:11 pm
I paid for his items ,the grand total $4.60…
It blew me away that he never had a fiver!

I might have done it for a fiver, but not for $120.
Mind you, I didn’t have any cash either. Usually I just have 3 cards in my pocket: Debit, Visa, and DL. The difference is that I don’t live that close to the edge and keep plenty of headroom for regular purchases. I guess what floored me more than anything else was their complete utter lack of knowledge/caring about their own bank card balances before going shopping.

#164 crowdedelevatorfartz on 02.29.16 at 1:43 am

@#123 Slumking

I believe Garth was referring to the endless plethora of inane self important mindless drivel that dribbles, drools, and cacks forth from the blogosphere…………myself included.

#165 crowdedelevatorfartz on 02.29.16 at 1:51 am

@#146 Dogs are great
“Who would insult a dog?”
++++++++++++++++++++++++++++++++++++
Apparently its been a while since someones untrained tiny “kick me” lap dog has snarled, nipped and urinated near you while visiting.
I particularly love the older “kick me’s” that have the breath of of an elderly buzzard fed on skunk rectum. Especially when they seem to “know” that you truely dont like them but you cant “shoo” them off your lap after your friend/neighbor/relative has uncermoniously dumped the little rotten toothed carrion feeder on your lap while they answer the phone/check the stove/ seek help.

Give me a big dumb Lab any day…….

#166 bdy sktrn on 02.29.16 at 2:48 am

China could shanghai the markets in the morning.
————-

#144 Millmech on 02.28.16 at 10:39 pm
What happened to all the comparisons….
HK 80% price drop

—————–
is Mark providing your data?

#167 Virginia Shagwell on 02.29.16 at 5:35 am

Interesting point of information from the DF article today.

“The lack of transparency is a major global economic risk, according to the G7, United Nations and the Organization for Economic Cooperation and Development. This is because hot money is destabilizing countries that are being abused, and creating real estate bubbles in destination countries. The lack of transparency also enables the spread of terrorism, criminality and tax evasion globally.

The biggest losers are China, where US$1.39 trillion was looted between 2004 and 2013”

Isn’t Canada already showing the signs of instability as morte local citizens are priced out of their homes by this hot money? It’s one thing to be an ideological crank, but to deny the global evidence is appalling.

http://business.financialpost.com/diane-francis/all-canadians-are-paying-the-price-for-conceal-estate-in-toronto-and-vancouver

#168 Blame Boomer's and RE Will Correct on 02.29.16 at 6:10 am

Have taught University for 20 years. Millenials a breath of fresh air in terms of egalatarianism, lack of bigotry, care for the environment and focused on careers.

Only flaw I saw was self-entitlement and that was taught by my generation, the Boomer’s, and their deterministic thinking.

True, rates may stay low but when a job loss recession hits, as I think it will mid-year (May/June?), then even 0% rates will not save Canadians.

No money coming in whether severance or EI can even begin to pay mortgages as seen in YVR/416.

People will bail as they did in the early 80s and in subsequent job loss recessions. This will correct RE even in the sovereign states of YVR/416.

All these paper RE millionaires in YVR/416 will be left holding the bag and a large one at that. The only people that will profit from YVR/416 RE will be retirees downsizing.

As Garth and many others have pointed out is that currently a $200/month increase in costs will short 50% of Canadians.

The Millenials will learn the same lesson as every other generation before it has and that will be: financial prudence wins the day.

#169 data on 02.29.16 at 7:01 am

Garth, you are correct in calling it for what it is – real estate is a very overvalued asset.

One big problem, nobody saw coming..negative rates. This basically means that investors around the globe have to keep looking for alternative assets to stocks and bonds – ie. real estate, gold and who knows what other crap. But’s happening and this wave is huge.

#170 Brian on 02.29.16 at 7:29 am

Garth,

Good start.

Now you need to show how those with rrsp holdings and pension plans (you know the ones who worked hard, lived within their means and saved) how guaranteed income will leave them hooped.

Show them how they’ll LOSE OAS and likely CPP too!

The government is already on record stating that OAS will be disbanded in favour of guaranteed income that will be clawed back

All to save the debt ridden, house horny millennials!

#171 maxx on 02.29.16 at 7:45 am

What’s with the increasing number of MSM articles about the possibility of negative interest rates? A bit of social engineering to prepare the masses? Or simply a head fake?

I wouldn’t put it past cb’s on this side of the pond enacting this sledgehammer “tool” at some point. It’s just about the only (desperate) move they’ve got left.

If the goal is to suck as much cash as possible from the global economy, it could work. This excess ocean of cash (QE, QE, QE!) is causing the global economy to stagnate and cannibalize itself and disproportionate amounts of liquidity have been pooling in too few places for far too long. FIRE, for instance. Going ’round and ’round the FIRE game and producing fresh air, for the most part.

This scenario, catalyzed by ever more QE will keep global economies stagnating as far as the eye can see.

The rot set in a long time ago.

#172 Bobby13 on 02.29.16 at 8:18 am

Constant credit expansion multiplier via fractional reserve banking has created market bubbles in many areas covering many asset classes. We have been in a long trend of credit expansion. Canadian housing is a good example, for years now the prices have only gone in one main direction asset classes rarely go unchecked for this long. Government and banking intervention is doing what it can to keep the prices advancing. Sadly the elected think they know what’s best for the market. They are worried about deflation because they can’t tax it. Ever increasing prices is there goal for them it’s just another form of tax they need to pay themselves and give them the ability to waste money at will by an ever expanding government base.

#173 mishuko on 02.29.16 at 8:21 am

Smoking man’s post the other day talking about individualism. Today’s (yesterday) confirmed it.

People are too concerned about fitting in. About being accepted by ‘society’. Being politically correct.

I’m more concerned about making money for myself. Line my own pockets. I don’t want the government deciding what to do with my money. The Ontario pension plan is the exact opposite of what I want our government to do.

Oh and I’ll reiterate this. I financed a sports car after making some sacrifices. Instead of actually going out and doing the whole real estate thing. I’ve had countless family members ask why I don’t buy a house. I just walk away. I don’t need to be accepted for what they want me to be. I just need to accept myself.

That’s the first step to happiness and independence.

#174 Millmech on 02.29.16 at 8:26 am

Apologizeing for that incorrect post,Nadurra makes ya do strange things,slipped over to the Mark side.

#175 TurnerNation on 02.29.16 at 8:32 am

Toronto Star newspaper front page this weekend scary “climate change” story replete with photos. That’s the biggest thing affecting Torontonians?

Just in time for Ontario’s new gas tax roll out.
You see how this game is played
A battle for our minds.
Media long ago was weaponized.

#176 pbrasseur on 02.29.16 at 8:32 am

Canada’s real estate market IS a world class hot spot for dirty money and money laundering both for foreigners and locals, I have absolutely no doubt about it.

It’s simply a badly regulated market and badly policed market, an invitation for fraudulent behavior.

Governments in Canada prefer to spend money on social causes instead of lae protection, this is the result.

#177 pbrasseur on 02.29.16 at 8:35 am

Meant Law Protection of course.

http://business.financialpost.com/diane-francis/all-canadians-are-paying-the-price-for-conceal-estate-in-toronto-and-vancouver

#178 pbrasseur on 02.29.16 at 8:46 am

I disagree with Garth on this one, I think there is plenty blame to go around. Canadians are nor more stupid than anyone else, they simply react to the environment that’s provided to them.

Canadians are victims of their very mediocre political leadership.

I First blame the government and CMHC for distorting the credit market by removing for the banks the responsibility to assume risk.

I also blame the authorities for the lack of transparency, the opaqueness, the lack of regulation ad lack of policing which facilitate the presence of dirty, money laundering and other fraudulent behaviors.

Without those things chances are the Canadians real estate market would be fairly balanced and normal.

Instead it is a ticking time bomb.

#179 Bat Flipper on 02.29.16 at 8:49 am

Trump is on the move. Once a dog, now a favorite for the GOP. Many Americans won’t vote Hillary, many Americans want change from the Dems. Trump is looking at closing the doors on the USA which is obviously horrible for Canada. Don’t be surprised if he is the man come 2017.

#180 IHCTD9 on 02.29.16 at 8:53 am

#14 preet89 on 02.28.16 at 5:43 pm

It really comes across that most people over 40 are jealous of the younger generation because we can afford cell phones, nice clothes and a new(er) car.
_______________________________________

I’ve always considered it the other way around – with early Gen X’ers being at the pinnacle. We had grants still available for post secondary, we bought cheap houses, got sub-prime variables, and then watched our mortgage rates plummet to 1.5% – cheaper than rent for me. We got good paying jobs, didn’t have to compete with shitloads of immigrants, no TFW’s either. Shortly after getting our career jobs, the economy boomed in the early-mid 2000’s, and our investments did great, and our houses appreciated 100’s of percent.

Maybe the boomers had it better, hard to see. They definitely hit a home run on housing, and easy jobs.

BTW, no 40+ guy gives a crap about Cell phones or Honda Civics. If a young guy had a paid for house and hundreds of thousands in investments, may then us 40+’ers may turn a little green :)

#181 IHCTD9 on 02.29.16 at 9:00 am

#16 Grooby on 02.28.16 at 5:50 pm
… How can Federal Liberals and Alberta NDP be “abandoning” balanced budgets when they haven’t been balanced for years, and federally for decades?
_____________________________________

Because they are making them worse instead.

Much worse.

At the worst possible time.

And for the worst possible reasons.

Trudeau will have sunk us ONE HUNDRED BILLION by the time his tenure is up.

Get ready for prosperity.

#182 Herb on 02.29.16 at 9:19 am

#156 45north,

the “action” of raising interest rates would be an “intervention” in the RE market, as lowering them was.

Rates will adjust as required by the economic climate. People must understand the status quo will not be maintained indefinitely. — Garth

#183 You're Nuts on 02.29.16 at 9:20 am

“People are correct to perceive there is a serious problem with the housing market,” says blog dog Joe, “but incorrect to believe the solution lies in government intervention. A better solution is to let the market sort itself out (interest rates normalizing) and for people to make better financial decisions, painful as that might be.”

—————————————————

A market which is so heavily influenced by government policy is hardly free. In this case, letting the market “sort itself out” requires the government to make a policy decision (lower interest rates). That policy decision will be made in consideration of a number of economic factors, including the effect on the housing market. When they do that, prices will go down.

Moreover, the market’s rise is being dictated at least in part by inflows of capital from a largely non-capitalist, non-free market country – China. The price of a commodity is being dictated by the likelihood that investing in that commodity will preserve and hide wealth obtained in a centrally planned, and apparently highly corrupt nation.

I’m not a fan of government intervention, but I don’t see a whole lot of Adam Smith at work in this particular market.

#184 Yuus bin Haad on 02.29.16 at 9:42 am

Yuh, Garth – with state-run pensions there’s no need for professional money managers – it’s a no-brainer dude.

If you’re good living on $20,000 a year. Enjoy! — Garth

#185 Vampire Studies GMST 454 on 02.29.16 at 10:01 am

Just so we are clear on what is meant by “Guaranteed Minimum Income”, from wiki we have:

“Basic income means the provision of identical payments from a government to all of its citizens. Guaranteed minimum income is a system of payments (perhaps only one) by a government to citizens who fail to meet one or more means tests. While most modern countries have some form of GMI, a basic income is rare.”

I feel what is described as “basic Income” would be the
more workable option.

#186 Slumking on 02.29.16 at 10:34 am

Any advice would be appreciated here…….So now that I have my rentals going and have a monthly income of 13k a month with no debt should I start putting money back into my tfsa? Or go buy another house with cash and add 3500 a month in rent money to my current monthly income? I know most people say I’m too young to retire, it seems to me like most people are worn out by 65 and can hardly get out of bed in the morning. Anyways Off to Bermuda today folks. Have a great week. Slumking

#187 Dogman01 on 02.29.16 at 10:43 am

A primer on the current Banking system, for those whom are frustrated that they can’t get their friends to be concerned with FIAT currency and Central Reserve Banking. Here it is in an entertaining package.

http://kisscartoon.me/Cartoon/All-Hail-King-Julien-Season-2/Episode-5?id=65369

I have often wondered when we reach the end game and the people whom need money have none and the people whom don’t need any more money have it all….who keeps the market system running?
I do not quite understand QE but would it not work better if demand for real goods was stimulated?

I have a feeling we are at the end game of Monopoly, where the one guy (gal) has got it all and is now just lending from the bank to keep the game going as they are having so much fun and can’t lose. .

#188 Renter's Revenge! on 02.29.16 at 10:44 am

“Trudeau will have sunk us ONE HUNDRED BILLION by the time his tenure is up.”

Does anyone else get a mental picture of Trudeau pointing his pinky finger at the corner of his mouth while saying that, a la Dr. Evil?

#189 Penny Henny on 02.29.16 at 10:48 am

#122 james on 02.28.16 at 9:03 pm
#117 Slumking

“I cashed in all my tfsa money and stocks I had invested and bought 5 rental Houses…. I’m now making a average return of 16 percent.”

When? Back in 2002? Rental yields are not that high now.

“I’m 35 years old I think it’s a great age to retire”

Anyone who seeks to retire so early is weak and lazy. People with talents and ambition never truly retire.

///////////////////////////////////

Wow James you really got me thinking there for a moment. Here I am sitting at home retired for the last two years (at 48) and the biggest thing I have to do today is find a suitable mustard based marinade to go with my salmon tonight. What kind of lazy bastard does that make me I wonder? Do I care, nope.

#190 Penny Henny on 02.29.16 at 11:10 am

#185 Slumking on 02.29.16 at 10:34 am
Any advice would be appreciated here…….So now that I have my rentals going and have a monthly income of 13k a month with no debt should I start putting money back into my tfsa? Or go buy another house with cash and add 3500 a month in rent money to my current monthly income? I know most people say I’m too young to retire, it seems to me like most people are worn out by 65 and can hardly get out of bed in the morning. Anyways Off to Bermuda today folks. Have a great week. Slumking
////////////////////////////////////

Off to Bermuda today?
But tomorrow is when you collect the rent cheques.

#191 IHCTD9 on 02.29.16 at 11:11 am

#49 AB Boxster on 02.28.16 at 6:36 pm
I think there’s a bit of a feeling of helplessness in the world today….

____________________________________________

Excellent Post.

It’s true we are in a global economy, and our collective Governments have less control than they ever have. There is no prosperity to be had via government short of them reducing the cost of government and passing the savings on to the taxpayers.

When the Olympics in China can make scrap steel prices break records in the US, when bad US mortgages can kill the banks in half the EU, when strife in the Middle East costs the Western World Trillions, we know that individual governments aren’t going to improve things too much in their home country.

We are all affected by Global concerns, but we can’t tell China to pass on the Olympics, or tell the USA to smarten up with their mortgage lending, or tell the ME to stop bickering with much effect. Government is just along for the ride, only a fool puts their faith in Government.

Trudeau is getting a good hard lesson in that right now. No one in Canada had anything to do with the commodities bust, but we will suffer more than most countries will, just like the commodities boom allowed Canada to breeze right through the GFC with little of the drama seen elsewhere in the world.

If you are going to be different than everyone else, you are going to have to do it by yourself.

Stay out of debt. That is what it takes. Make sure that six figure education pays big or don’t bother – you’re still a perfectly viable human being even without those letters behind your name – maybe even more so. Don’t buy a house that has you saving nothing through your 30’s. If you arrive in your 40’s and haven’t got a few 100 thousand socked away, and your house paid for, you are going to be living the rest of your life same as your 30’s were. Don’t buy new cars and finance them. Don’t blow huge on toys and vacations using debt.

This is my story. No debt, pay yourself first, a house is not an asset, use your brain, hands; and your free time to save 10’s of thousands, or to make more income.

You need to be debt free complete with decent bank by 40 years old or forget it, you are out of time.

The two single most effective destroyers of the above scenario are education and housing.

Really, it all starts when a young guy/gal decides what to do for a living…

#192 max on 02.29.16 at 11:25 am

I know several high net worth individuals, here and in the U.S. They all have one thing in common. They are all very careful with their money.

I’m into boats. There is a saying in boats about the boat business, want to make a small fortune in the boat business? Start with a large one. The bulk of the wealthy people I know, made it from stock options and they cashed out when they had buyers and liquidity. The others are old money, some there “investments” are now down and not returning enough money to fund a multi millionaire lifestyle.

Sure some live in mansions, they bought them 30 to 40 years ago. With property tax, cost of heating and cooling a big old house. Many are now downsizing because the interest or return on their cash is not enough to live on. Talking people with $50million and $100million investible cash! Other end of the lower end, the millionaire savers, they too are not getting a safe decent return on their cash. Some of them are even getting back into the work force as consultants, etc. I know a widow, her husband was a dentist, he died 20 years ago. Her two kids, spoiled most of their lives, had to get jobs. She recently sold their nice house not to downsize, needed more cash to generate a safe return. Plus even without a mortgage the house became unaffordable!

Even $4million to $10million in investible assets, returns very little these days.

#193 Snowboid on 02.29.16 at 11:35 am

#175 pbrasseur on 02.29.16 at 8:32 am…

Wasn’t Canada rated as the worst G7 country a few years back for lack of enforcement in white collar crime?

I believe it was an OECD report, and I tend to believe nothing has changed. This could explain why the government of BC hasn’t been taken to task for its’ shady Site C project and the LNG partnership with Petronas, among dozens of other scams like the balanced budgets, LNG prosperity fund, etc!

#194 Dewflicker on 02.29.16 at 11:39 am

I agree with all of that with the exception of this statement: “Today the young truly believe interest rates cannot rise”. I don’t think the young have the first idea what an interest rate is.

#195 IHCTD9 on 02.29.16 at 11:41 am

#167 Blame Boomer’s and RE Will Correct on 02.29.16 at 6:10 am

The Millenials will learn the same lesson as every other generation before it has and that will be: financial prudence wins the day.
_________________________________________

There you go Kids, right from the Professor him/herself.

Found yourself in a pile of debt at 40 years old?

Game over.

#196 charles on 02.29.16 at 11:41 am

Whats a chartered backs?

#197 IHCTD9 on 02.29.16 at 11:46 am

#191 max on 02.29.16 at 11:25 am

Even $4million to $10million in investible assets, returns very little these days.
____________________________________________

Sounds like a lifestyle problem. 3%/annum on 10 Million is 300G’s, could probably do better. Half the tax too. That is plenty if you don’t need to be Jay Z’s neighbour.

#198 Slumking on 02.29.16 at 11:56 am

Penny henny:re

Picked it up yesterday in cash. It’s so nice having accomadating renters:) adios!

#199 Stanley Bridge on 02.29.16 at 11:56 am

Liquidating my TFSAs and RESPs, transferring insurance, preparing for the life of non-resident and for the move south and then to Europe.

God help this place and whoever is left (and has the guts) to pick up the pieces. It won’t be me.
Farewell/Arrivederci and good luck.

#200 Smoking Man on 02.29.16 at 11:57 am

Kevin Oleary open letter to Wynne. A must read

http://www.torontosun.com/2016/02/28/open-letter-from-kevin-oleary-to-kathleen-wynne?token=3fe614a443710444f34962a4cbb2dd40

#201 Daisy Mae on 02.29.16 at 11:59 am

#191: “She recently sold their nice house not to downsize, needed more cash to generate a safe return. Plus even without a mortgage the house became unaffordable!”

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

These ‘moisters’ must have received their property assessments and have not until now, factored in the property taxes due in July on these million plus homes.

#202 Stanley Bridge on 02.29.16 at 12:01 pm

https://ca.finance.yahoo.com/news/ontario-mortgage-brokers-face-allegations-unscrupulous-behaviour-documents-161125833.html

Any resemblance with the liar loans/ARM/teaser rates in US is purely coincidental.

#203 robert on 02.29.16 at 12:17 pm

Wait to see how many 25 year old Liberals feel the same way about min-come and ‘cradle to grave’ when they become 35 year olds with six figures and a mortgage. I’m 30, white-collar, Alberta with a 27% avg tax rate this year…..I used to be a leftie too…..

#204 family beagle on 02.29.16 at 12:34 pm

Big ideas, eh? http://www.theamazingbrentwood.com
Million sq ft of retail, three towers, 2 sold out, 54 stories, billions involved. If you don’t take out an HELOC to front a downpayment for your kids—that’s just bad parenting.

Christie and gov, et al, have your back. RE in YVR is experiencing the next leg up and sheltering dirt money. Just $24k down, pocket change. People are lamenting the cost of RE like the passing of the horse and buggy. New reality is urban land grab in seven or eight key global markets. ROI is proven 20% per annum.

How else will entitlements be paid, if not through RE stimulation and exploitation? No more guaranteed 8% on investments. Unless…
… Next billion dollar bubble will be an index for internet personalities. Everyone with an online presence will be worth a share value…billions of people will be listed. Investors can invest according to who they think will have value/influence/ad revenue. Garth’s ticker will be GTB and traded at $1.75. Kim Kardashian will be KKN and traded at $46.50. An algo will itemize the internet and compile index of willing and all who don’t opt out manually. You might be traded, based on your comments, and be unaware, trading at $.0016. Retros, like Elvis, could be EPKING and trading at around $5.80.

#205 Smoking Man on 02.29.16 at 12:37 pm

Ha Gravitational Waves debunked.
Einstein was wrong.

https://www.thunderbolts.info/wp/2016/02/23/hilton-ratcliffe-discovery-of-gravitational-waves-thunderbolts-podcast/

#206 Otys on 02.29.16 at 12:38 pm

(Whatever the flavour of government, we’re not moving in the right direction. Real estate’s become a casino in which every player thinks they’ll win.)

In case you haven’t noticed Garth, casinos have been a part of our daily lives for a while now. Gambling is now mainstream and accepted willingly. Choices are, either give our money to someone like yourself or put it into something tangible like real estate. An uneducated investor will always do the latter and so far I must say they have done extremely well.

#207 Blacksheep on 02.29.16 at 12:51 pm

AB Boxster # 49,

Solid post….

#208 Great Post on 02.29.16 at 12:52 pm

Thank you Garth, this was an excellent post.
I feel the same way, thanks for articulating… this from a lifelong Liberal supporter too…

#209 max on 02.29.16 at 12:58 pm

A lot of my friends and including myself, we got nice cars at 16, never mind graduating. Almost all my friends parents, financed or leased them for their kids. I was the only one who got a nice car fully paid for. By 18 I had two cars, paid for by my parents. Cars, cell phones, and even nice houses, became cheaper to finance. We didn’t get richer, we just have better credit!

The problem, all the safe investments in Canada, are very low return. GIC is capped, etc. Non of the big money managers, take big risks. Its why our stock market is flat. Now people are turning to real estate to get more cash to get a little more interest return on their money.

The safest investment is a savings account at a credit union or a term deposit at one. Deposits are 100% insured. On deposits of $100k or more the interest is around 1.8%, some of the bigger ones are at 2.10% annually. A million barely returns enough to live on even for a downsized boomer.

#210 Bram on 02.29.16 at 1:01 pm

#165 bdy sktrn on 02.29.16 at 2:48 am

#144 Millmech on 02.28.16 at 10:39 pm
What happened to all the comparisons….
HK 80% price drop
—————–
is Mark providing your data?

Ha!
I guess Vancouver prices will drop 80% too, in the case that Vancouver ‘special administrative region’ leaves Canada and is annexed by the United States of America. Imagine all the automatic rifles flooding the city of Vancouver, and the disappearance of universal health care. I would sell my house at any price indeed.

:-)

Millmech must be referring to 1997-2003 when HK RE indeed fell very hard.
But that was for a good reason.
Can you imagine the uncertainty when you leave the British Empire and join the Chinese one?

link with price data:
http://www.tradingeconomics.com/hong-kong/housing-index

Bram

#211 Bram on 02.29.16 at 1:15 pm

#191 max on 02.29.16 at 11:25 am
Even $4million to $10million in investible assets, returns very little these days.

I doubt that. TSE seems pretty affordable, with high dividend yields. If you load up on $10M dividend paying stocks, you can get $0.5M per year on dividends without trying too hard.

You just need to let go of market moods, after that.
The $10M may shrink to $5M, but that $0.5M/yr income will be much more stable.
Just don’t sell, and keep collecting. Forget how much you paid for the investment.

Oh, of course, as Garth says: spread the 10M over EU/NA/Asia for more stability.
But frankly, if your horizon is 15 yrs of passive income, who cares about diversification?
It will work just fine, even for an all-maple portfolio.

Bram

#212 max on 02.29.16 at 1:25 pm

We are learning that low interest rates can act in reverse of why they are low. Look at Japan, they pay their banks to take their cheap money!

#213 Roial1 on 02.29.16 at 1:26 pm

This is about attitudinal change in government. Way more consequential. — Garth
———————————————————–
Yup! to start with, your “old boss” fired you for communicating with your constituents. This one would see the good and get everyone to do it.

And you are sooooo jealous.

#214 gut check on 02.29.16 at 1:29 pm

keep in mind when I ask this that I know nothing.
I was just looking at Canadian bonds and see this:

Province of Ontario coupon: 4.400 maturity: 03/08/2016 bid: 100.10 yield% -1.11

It’s the only one showing a negative …. is this new or what? is it normal?

#215 jess on 02.29.16 at 1:29 pm

nine years later….

26 February 2016
From the section Jersey

A firm has been stripped of more than £3.6m in assets for money laundering, following a global investigation.

Jersey-registered company Windward Trading Limited

http://www.bbc.com/news/world-europe-jersey-35659938
================

Coutts has forked out £75 million to settle two separate tax evasion probes relating to its former Swiss private banking business.
http://citywire.co.uk/wealth-manager/news/coutts-hit-with-75m-tax-evasion-penalties/a884996
============

French daily Le Monde have revealed new details about the investigation into Swiss bank UBS amid accusations the bank was actively prospecting French clients to help them avoid tax…

“UBS is currently on trial in France for illegal solicitation and laundering the proceeds of tax fraud between 2004 and 2012. In 2014, judges estimated that the Swiss-headquartered bank had helped French taxpayers hide between 13 and 23 billion euros (about $14.5 to $25.6 billion).

According to one of the internal UBS documents published by Le Monde, bank employees were urged to follow strict protocols to preserve clients’ secrecy when traveling abroad. UBS workers were advised not to carry any client data, and to coordinate a “story” with travel companions in case they were questioned by customs…
It was revealed last month that 38,000 accounts had been opened for French clients in the Swiss bank. French authorities said that 4,206 tax evading clients – scared by the end of bank secrecy in Switzerland – had regularized their situation by September 2015. The majority of those clients were entrepreneurs, CEOs and business owners. Le Monde also mentions artists, athletes and doctors. read more @
By Cécile Schilis-Gallego February 17, 2016, 6:30 pm

The largest of the two penalties saw the 300-year old bank pay out $78.5 million (£56 million) to US prosecutors after it admitted assisting US clients to conceal assets in offshore accounts, which subsequently helped them evade tax.

http://citywire.co.uk/wealth-manager/news/coutts-hit-with-75m-tax-evasion-penalties/a884996

#216 Smoking Trump on 02.29.16 at 1:33 pm

#133 Smoking Man on 02.28.16 at 9:30 pm

#111 The American on 02.28.16 at 8:33 pm
Smoking Man, it isn’t about wanting or not wanting Trump to be President. You clearly want him to be President. That’s fine. But the fact of the matter is this… he won’t be. It will be Sanders or Clinton for the way the Electoral College works and in consideration of Delegates vs. Super Delegates. It isn’t about getting over it. Perhaps you should stick to what you know and go smoke another bowl. If you’d like, I’ll put a wager on it. Your call.
…………
Dude perhaps you are right he won’t win, I don’t know enough of the workings of what you describe. So I won’t take your bet. I only bet on sure things that I understand. But look at the turn out Trump got in Nevada. This is a movement a revolution in the making.
I will bet you this, Trump will win the nomination and will bet that in November it will be the biggest voter turnout in American History.
Yes I do want Trump to win, I have an anarchist tendency in my soul. Can’t help it. Established Authority figures remind me of my teachers. Watching grovel is so satisfying.
I’m on a TN visa right now, working for a great company in Boston, Pay is huge, $USD.
Get to travel and see all the great cities of America. If trump wins I kiss that gig good bye.
But it will be worth it, I know for a fact that justice will be served on behafe of the 3000 Americans that died on 911 and thousand of senseless deaths of US, and Canadian service men and woman who died in Afghanistan and Iraq, I call it the crime of the century.
I have a huge tin foil fedora that I proudly wear.
The NEOCONS know it’s coming that’s why they are in total phyco mode.
____________________________________________
Really surprised SM at your lack of wisdom in googling stuff. Your Donald Trump is a self absorbed, blowhard, narcissistic liar, perhaps unbeknownst to yourself. Then again birds of a feather……………..
https://www.youtube.com/watch?v=DnpO_RTSNmQ
Oh and just to keep it real check his facts out.
http://www.politifact.com/personalities/donald-trump/

#217 Iconoclast on 02.29.16 at 1:37 pm

So, one of the big benefits of a Guaranteed Annual Income is efficiency. It would be much easier to administer and replace a mishmash of other social programs.

This would eliminate thousands of jobs. Does anyone really think the public sector unions would allow this?

#218 jess on 02.29.16 at 1:41 pm

The Swiss bank said US regulators were investigating potential sales of so called “bearer bonds”.

http://www.bbc.com/news/business-31349135

“In 2009, UBS agreed to pay a $780 million fine to the U.S. to settle a tax evasion case, and in early 2015 confirmed it was again under investigation by American authorities.” (icij)

#219 VJGoh on 02.29.16 at 1:42 pm

I voted NDP, I’m not unhappy with the Liberals, and I still come back every day to read. If you can’t read this sort of stuff without flipping out, the problem isn’t with Garth, it’s with you. Finance, real estate and investing are complicated, and the more you know, the better off you are.

That said, I’m pretty sure that you believe in at least a little government intervention, Garth. You weren’t impressed when all the rules surrounding borrowing were made more lax. :)

#220 understood by few on 02.29.16 at 1:45 pm

Beginning of the end?

http://www.timescolonist.com/news/b-c/millionaire-property-owners-exit-vancouver-head-to-country-1.2186395

Assuming there are any numbers to support this (not just a couple realtor anecdotes), Vancouver home owners cashing out en masse will drive prices down. Even just reporting on it will generate owner fear, “Maybe this is our one chance to cash out!”

Chilliwack/Sardis is still cheap. No way I’d live there, but $300K buys something liveable on a good chunk of land (up to a 1/2 acre). More liveable than most of the $1mil+ tear-downs (if you can ignore the scent of chicken manure wafting through the air). Put 20% down and get a low low rate mortgage (while they still exist) and invest the tax free capital gains you realized. Heck, you can buy a NEW house for under $400K and save yourself the PTT.

If I owned in YVR I’d be cashing out.

#221 Roial1 on 02.29.16 at 1:56 pm

#191 max on 02.29.16 at 11:25 am

Even $4million to $10million in investible assets, returns very little these days.

——————————————————————

You mean to say that you could not live well on say 80,000 (2million at 4%) per year ?

What kind of lousy life style are we talking here?

I travel as I want, eat well and have, to me a healthy, life. For a LOT less. (oh, and I earn several % more on my investments than 4%.)

I guess it is what you think you need for a good life.

For me it is health, a good wife, income enough for my needs and that’s really enough. My yacht is a pontoon boat just right for the lakes and streams around here on lotus island.

Go ahead, be green with envy. (72 going on 29)

#222 World Traveller on 02.29.16 at 1:58 pm

Another hit to the economy

http://www.cbc.ca/news/business/tim-hortons-layoffs-long-time-employees-escorted-out-the-door-1.2934853

#223 onpar on 02.29.16 at 2:20 pm

The answer, as always, lies someplace in the middle. Solid personal investments coupled with a pension (private, public, or both) and managing expenses along the way instead of diving into an insane mortgage or downing
Dom every second night. You can maintain your individual freedom while still being an advocate for better social policy, improving the lives of those less fortunate, and educating everybody on what to do with a dollar earned.
Or, we can go on pretending we all play on different teams and that life is some kind of bizarre zero-sum sport.
As you can see, I’m an educated liberal.

#224 max on 02.29.16 at 2:23 pm

You need to deduct management fee’s and other banking fee’s, etc. and then taxes. You can live an ok lifestyle, but my dentists widow was also paying $30k per year in property tax alone.

#225 Nemesis on 02.29.16 at 2:37 pm

#WhoKnew!,Or… #AcademicExtolls… #ComparativeVirtuesOfBC’s… #RuralIdylls… #Vs.Vancouver-“UnhingedFromReality”…

“$2 million in the overwhelming majority of the world gets you a beautiful home… If you buy a beautiful home and then put $2 million in the bank, you know, maybe … make $25K a year, that’s enough for food. Then you tap the interest on the $2 million for other expenses. That’s a pretty good life. Why get yelled at by a boss?” – Thomas Davidoff, associate professor at the Sauder School of Business at the University of B.C.

[TimesColonist] – Millionaire property owners exit Vancouver, head to country

http://www.timescolonist.com/news/b-c/millionaire-property-owners-exit-vancouver-head-to-country-1.2186395

#226 Ponzius Pilatus on 02.29.16 at 2:58 pm

#189 Penny Henny on 02.29.16 at 11:10 am
#185 Slumking on 02.29.16 at 10:34 am
Any advice would be appreciated here…….So now that I have my rentals going and have a monthly income of 13k a month with no debt should I start putting money back into my tfsa? Or go buy another house with cash and add 3500 a month in rent money to my current monthly income? I know most people say I’m too young to retire, it seems to me like most people are worn out by 65 and can hardly get out of bed in the morning. Anyways Off to Bermuda today folks. Have a great week. Slumking
////////////////////////////////////

Off to Bermuda today?
But tomorrow is when you collect the rent cheques.
————————
No problem, his rental properties are in the slums of Bermuda.

#227 TurnerNation on 02.29.16 at 3:20 pm

File under: Massive social and economic programming underway: T2 to pardon some guy who might have been convicted for being gay 50 years ago? !
Is he going to Tweet lil Jenner like Obama did?

Keep State out of bedrooms.

#228 Toronto Dweller on 02.29.16 at 3:36 pm

Wow, Smoking Man is dropping some words of wisdom tonight. Always admired self made men and women.

#229 Bottoms_Up on 02.29.16 at 3:37 pm

#199 Smoking Man on 02.29.16 at 11:57 am
——————————————————-
Although he was a little snide in parts, he has some good points. I would also hope that the new gas/carbon tax and new natural gas/carbon tax are fully accounted for applied appropriately in fighting carbon pollution.

#230 James on 02.29.16 at 4:17 pm

#204 Smoking Man on 02.29.16 at 12:37 pm

Ha Gravitational Waves debunked.
Einstein was wrong.

https://www.thunderbolts.info/wp/2016/02/23/hilton-ratcliffe-discovery-of-gravitational-waves-thunderbolts-podcast/
…………………………………………………………………….
Smoking Man your an embarrassment to your alien agenda. Then again your just an ass. Thunderbolts is Pseudoscience crap.
Keep googling.

#231 Blacksheep on 02.29.16 at 4:51 pm

understood by few #219,

“If I owned in YVR I’d be cashing out.”
———————————————-
Spoke to three different parties about F.V. real estate, since Friday.

Two separate guys, attempting to buy houses listed around 675-700K, both offered approx 100K over ask, assuming they’d be competitive, but the houses ended up selling just under 1 million each. Their perception was, these were not million $ places, listed low to get a bidding war going, but that was exactly what happened.

One house was in Abbotsford, the other in Otter area (Langley)

Third guy sold his home backing onto a golf course in Langley.

He was thinking 750-800K if he was lucky, it sold for almost a million in a bidding war in two days.

It’s official…

The Fraser Valley has joined the Insanity.

#232 Exurban on 02.29.16 at 5:25 pm

#173 Millmech

… slipped over to the Mark side.

ROFLMAO you are forgiven.

#233 Intuitive Missus on 02.29.16 at 5:25 pm

#221 World Traveller

Check your dates. This was a year ago.

Clearly you’ve been travelling far too long :) :) :)

#234 tugg on 02.29.16 at 5:26 pm

“we flame crooked immigrants. Pathetic.”.

Stong words considering we have no idea. Zero. No data is collected. BC is run by conservatives who we now know hate data. The last thing they want is informed decisions. So while you’re probably right, you just don’t know for sure. Nobody does and nobody ever will. Its the wild west out in Vancouver.

#235 Russ on 02.29.16 at 5:35 pm

142 Two-thirds on 02.28.16 at 10:37 pm
The only constant is change. It always has, always will.

One supreme blind spot electorates worldwide have is our support for those promising and end to x, brought upon us by y. Where:
x = undesirable situation(s)
y = them
And x can be defined thusly in the contemporary world:
x = o(u + y)**(g*i*a)
===============================

Hey 2,
To be honest I didn’t read your post. It was too long. And math is hard.

But I can give you this well known simple answer:

The Answer to the Ultimate Question of Life, the Universe, and Everything is 42.

#236 liqudincalgary on 02.29.16 at 6:01 pm

ben on 02.28.16 at 6:34 pm
Basic income won’t help alone. Trudeau has to take on the banks to help the poor. Basic income will be cheaper to admin. Big deal. If they set basic income to $4000 a month (absurdly high) rent would be $3500 a month. Raise it to $5000, rent goes to $4500. In other words: landlord benefit.

We need land value tax to shift the burden of taxation from workers to land owners. This would see income tax reduced and people would get more of their labour in their pocket.

Shock horror – speculators would suffer. Good.

Land value tax now. Canada has a strong history of this idea.

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

sounds like the feudal system.
google it PITA

#237 Ronaldo on 02.29.16 at 6:17 pm

Front page headline in The Province newpaper:

”SEEKING GREENER PASTURES

Homeowners are cashing out of red-hot Metro Vancouver and buying rural acreages, with money to spare.”

Typical media hype once again. But, this should certainly help to stampede the herd in that direction. Reminds me of the headlines back in mid 70’s and the late 80’s. Just 25 to 40 years later is all. Looks to me like we’ve reached the peak. ‘Realtors last stand’. Going to be an interesting spring indeed.

#238 Steerage Bilge on 02.29.16 at 6:32 pm

#229 James on 02.29.16 at 4:17 pm

#204 Smoking Man on 02.29.16 at 12:37 pm

Ha Gravitational Waves debunked.
Einstein was wrong.

https://www.thunderbolts.info/wp/2016/02/23/hilton-ratcliffe-discovery-of-gravitational-waves-thunderbolts-podcast/
…………………………………………………………………….
Smoking Man your an embarrassment to your alien agenda. Then again your just an ass. Thunderbolts is Pseudoscience crap.
Keep googling.
—–
So how much do you donate in support smoking alien man?

http://www.thunderbolts.info/wp/get-involved/support-us/

#239 Ace Goodheart on 02.29.16 at 6:44 pm

There’s already a country that has a guaranteed annual income. It’s called Cuba. It also has a guaranteed rice ration per month and guaranteed housing. Unfortunately it’s currency does not trade internationally (as it is worthless), it has almost no economy and it is considered “third world” by Western standards.

Instituting a guaranteed annual income in Canada would have the following effect: All necessities of life would increase in price, to be priced just above the level at which the guaranteed annual income would finance them. This would be the result of our currency, at the guaranteed income level, becoming worthless. Above that level, you would be able to purchase items for subsistence.

Have a look at Cuban monthly wages compared to the price of “luxury goods” (like for example, a refrigerator). The equivalent is something like a basic level refrigerator costing the equivalent of $60,000.00 in Cuban pesos (ie, not “convertible pesos”, the kind they pay the regular working folks).

That is what happens when you guarantee everyone housing and an income. It is the equivalent of nationalizing your economy. It is stupid and will result in economic collapse. T2 knows that and so do his advisors. It will never happen here.

#240 IKnow on 03.01.16 at 1:17 am

#46 sanddancer on 02.28.16 at 6:35 pm

$710 k in Cloverdale is insane.

——————–

Check the fundamentals:

40 minutes away (good traffic, in a prestigious direction) a similar house is about $3-4M.
So 80 minutes a day of commuting say worth about $2.5M ?

My math says driving 80 minutes every weekday equal to about 10,000 hours over a 30-year span.
Neglecting the cost of driving, then it works out to about $2.5M/10000 hrs or $250/hr.

So $250/hr is the cost of the privilege to live in prestigious west side Vancouver vs lowly Cloverdale!

#241 Wait...things are different this time. on 03.01.16 at 8:26 am

These youngsters are on to something, all collectively sharing & caring in a hyper connected landscape, the generation that pushes for debt forgiveness and a 3 day work week, awesome.

From stable interest rates to historically low interest rates to new norm negative interest rates to debt forgiveness, financial darwinism is alive and well.

#242 Cuban living in freedom on 03.01.16 at 8:37 am

For Ace Goodheart:
Where did you get Cubans have guaranteed housing and rice? Is Castro’s propaganda living in you? Cuba is a perfect example of what lefties can do to a country that was better than USA and Canada in many areas, before 1959 of course.