Standard deviation

Minister Morneau to Discuss Toronto Housing With Ontario Finance Minister and Toronto Mayor

Minister of Finance Bill Morneau will hold a meeting with Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory to discuss the housing market in the Greater Toronto Area.
A media availability will follow the meeting at approximately 3:30 p.m.
Date and Time
2:30 p.m. (local time)
Tuesday, April 18
Location
Artscape Wychwood Barns
Toronto, Ontario

_________________________________________________

And so, Maybe Week draws to a close here on GreaterFool, the blog your Mom wishes you’d never stumbled across. Maybe the bidding wars are over. Maybe people have finished borrowing more money than God. Maybe the politicians will diddle their way to real estate destruction. Maybe all the fools have bought. Maybe this is peak house. Maybe it’s already passed. Maybe not. Maybe this is no soft landing, but a pause before we go all #United Airlines.

As you can see from the media notice above, three levels of government are now in play over GTA house prices. The city’s mayor wants an Empty House Tax plus higher property taxes. The province wants a speculator tax, a foreign dudes tax and maybe even a capital gains tax. The feds want banks to shoulder more mortgage risk and further tighten lending. Meanwhile the Bank of Canada has set the stage for higher interest rates and 80% of house-owning moisters wish they didn’t.

This is not good if you bought a place in the last few months, at the highest level in the history of our beaver-loving nation. As detailed here over recent days, deals are falling apart, expected bidding wars fizzling, buyers getting cold feet and the insane expectations of greedy sellers being squished. All this at the same time as the latest sexy sales and price numbers have been trumpeted by the realtors, in a media blast they’ll likely come to regret.

It’s worth noting that this week the guy who sets most interest rates in Canada warned of what’s coming, with a special message for smug Big Smokers. “There’s no fundamental story that we could tell to justify that kind of inflation rate in housing prices, and so it’s that gap between what fundamentals could manage to explain and what’s actually happening which suggests that there is a growing role for speculation,” says central bank boss Stephen Poloz. “It’s time we remind folks that prices of houses can go down as well as up.”

And you gotta love this: “People need to ask themselves very carefully, ‘Why am I buying this house?”’

It’s all about risk. Your Mom (and others like her) think real estate has none of it, and always goes up. In fact they’d buy at any price. It’s irrelevant, since it’ll be higher in six months. This is the very essence of speculation, turning so many of your friends, relatives and co-workers into asset gamblers. Only a specker would buy a house for $1.6 million that last changed hands two years ago for half the price.

Poloz says the speculation today in markets like Toronto and Vancouver is “unsustainable.” It’s divorced from economic fundamentals and, surely as Conservatives follow Liberals, will correct back towards the mean.

Whazzat mean? The chart below is from the nerds at Bloomberg, showing Toronto’s market has achieved a standard deviation of +4. This is like having 18 beer then playing with your chainsaw. In your underwear. SD is a measure of risk and volatility, basically telling you how far an asset has strayed from the mean. So, it’s risk. Historically, housing has risen by about 5% annually and since 2015 has been out of control.

Source: Bloomberg. Click to enlarge.

Poloz, the man who so far has refused to raise rates and temper this madness, now asks simply, “What would you do if there was a correction? When something has been rising that quickly, of course, it’s vulnerable to a correction.”

And maybe this is it. We’ll only know later.

Remember, real estate is a helpful asset class. It makes sense to own some, so long as it’s affordable, useful and doesn’t represent too much of your net worth. But a house is not a financial strategy, not a retirement plan and no substitute for a growing financial portfolio. If you made a windfall gain on your property, this is the time to harvest it. If you own no land, this is not the time to seek it.

Trust me, there are better things to covet.

141 comments ↓

#1 Post on 04.13.17 at 7:25 pm

Just to add further support to yesterday call that POLOZ IS AN IDIOT, after saying that an increase of the BOC rate by 5% wouldn’t slow down house price gains and speculation. And that not raising rates until sometime in 2018 is justified, here’s a collection of Economists from Bay Street’s opinions:

-Gluskin Sheff Chief Economist David Rosenberg
“A five percentage point rise in rates would not only burst the housing bubble but would crush the economy. We have a Taylor Rule for Canada which measures where the policy rates should be. [It’s] nowhere near 0.5 per cent. At a minimum, it should be 2.5 per cent right now. As long as you keep [nominal] rates negative for this long, and it’s already been eight years, it fosters bubbles in other parts of the economy. Housing is usually a principal candidate. Just go back to when the [U.S. Federal Reserve] kept real rates negative for so long in the last cycle, and look what happened to their housing market.”
Rosenberg said the Bank of Canada may be doomed to repeat the Fed’s mistake if it chooses not to take action.

-TD Economist Brian DePratto
As for mortgage rates around 7 to 7.5% in the second half of his comments? I think this is clearly a rhetorical flourish, because it is difficult to think about any economic model or framework where that kind of sudden increase in interest rates doesn’t have an impact – not only on housing, but on the economy more broadly and thus spilling into the housing market.”

-BMO Capital Markets Chief Economist Doug Porter
“I strongly disagree with the statement. The governor is essentially saying that interest rates don’t matter for the real estate market, which I just can’t buy.”

-CIBC Chief Economist Avery Shenfeld
“Today’s high house prices do pose a material risk that, when it comes, the next recession would be longer and deeper than otherwise. This constraint on hiking interest rates will leave the central bank with precious little in the way of ammunition to stimulate growth when a recession occurs.”

#2 TLG on 04.13.17 at 7:30 pm

Nothing to get excited about. At worst prices will stay about the the same till mortgage rates reach 4 or 5 %, if they ever do.

#3 Jerry on 04.13.17 at 7:33 pm

So that’s why Polz is keeping the interest rate low? lol…he doesn’t want to pop the bubble. It will be a long time before interest rates rise anywhere close to their long term average.

#4 Ex-Cowtown on 04.13.17 at 7:36 pm

Econ question for all you MBA and pro money manager types: When the money supply increases hugely, then rampant inflation is inevitable. But is there a difference between money supply growing organically ( like when people get a raise at work) vs. a growth in money supply via debt issuance? Seems to me that an “organic” money supply growth can be quite inflationary but a “debt” money supply growth ends up being much more neutral as the debt can always go into default and be forcibly “removed” from the system.

Kind of like paying cash for your car vs. putting it on payments. No one can take it away from you if you paid cash and there’s no deflationary overhang on a default because there’s no outstanding debt to clear.

Thoughts?

#5 TurnerNation on 04.13.17 at 7:37 pm

It is widely believed Bigarider is Atsa the Boy.
Coo, or coup?

#6 So Sad on 04.13.17 at 7:38 pm

Words are free and utterly useless. Poloz offers words but not action. This market will continue to climb, but at a much slower rate. No decline but the Poloz is not going to take any action.

The 3 levels of government meeting is just symbolic to give the impression they actually give a sh_t about rising prices. No significant intervention will happen and therefore no significant change in the price trend will happen.

Sad but true.

#7 crdt on 04.13.17 at 7:38 pm

Please more stories of deals falling apart, greedy sellers getting stuck with gargantuan mortgages, and flippers getting F’ed… More.. More…

#8 Guy in Calgary on 04.13.17 at 7:39 pm

Glad I sold out of that mess last year. Nice 5 person bidding war for a shack in St. Catherines that we bough for under 200k in 2014. Nice starter home, rented the basement it paid for itself. No granite, around 980 sqft but good sized yard for the dogs and a walk away from transit and the escarpment. I only say this because a starter home is not a $750k 1600sqft house with all the upgrades you can imagine. Be reasonable with your purchase and you will come out ahead. Keeping up with your peers (which is just keeping up with their debt) will only make you miserable and poor. No penalties charged by the bank since we have a lot there.

Feel sorry for my fellow millennials hopping into a blind auction to buy an over valued house. Condemned to financial servitude for quite a while IMO. Have fun GTA, I’ll be in the mountains with the clean air and quiet.

#9 common sense on 04.13.17 at 7:40 pm

Higher Interest rates only to be lowered again within a year?

I guess so just so they can say “We tried and followed through” instead of bluffing.

I believe in the Easter Bunny as well.

All the best for a peaceful Holiday weekend everyone!

#10 Warren - the lagging indicator on 04.13.17 at 7:41 pm

Looks like the truly deplorable types were at it again as a nice Dutch auction was held to prop up Home Capital Group stock so insiders including the CEO could extract millions before the inevitable downfall.

#11 Rainclouds on 04.13.17 at 7:42 pm

2L Growler of Beer check
1 bottle of white wine check
Weed check
Underwear on check
Chainsaw?……………….damn

Gonna be uneventful in Yaletown tonight

#12 So Sad on 04.13.17 at 7:43 pm

The ONLY thing that will save Canadians is the CHINESE Government! They have been trying to go after Chinese who are parking large sums of money in Canada for a few years now but our own traitorous federal government keeps blocking any sort of extradition agreement with China. Total joke. The Chinese government is a heck of a lot more honest than our own.

Don’t believe me? Do your own reading…and please read between the lines of our own governments excuses for not agreeing to an extradition agreement. Total con job on Canadians.

#13 prairie person on 04.13.17 at 7:44 pm

In Victoria, the passengers just keep dancing as rumours of icebergs are whispered here and there. RE agents put up a For Sale sign with one hand then slap a sold sign on with the other. Not sure what is going on but whatever it is, it is crazy. For years, the word was that Victoria no longer was a favorable destination for retirees. Now, has it suddenly become favorable with the stubble jumpers? The newly rich from selling in Vancouver? Americans with real dollars? The Asian menace? Russian oligarchs? The SFH that are being built are mansions, like crazy big so it ain’t no first time buyers getting into the market. And, our darling cutie pie premier is letter the builders build on grade A farmland.

#14 Al on 04.13.17 at 7:46 pm

I don’t expect much from Sousa and Wynne. They will probably state in their budget that the Libs intend to implement a spec tax in March 2018 or something stupid like that.

#15 Smartalox on 04.13.17 at 7:47 pm

You know, if you were to truncate that chart at 1996 (i.e.: after real estate values returned to normal, following the crash in the early 1990s) the current gain would be something like six (6!) standard deviations from the mean.

But that would be foolish, right?

By the way, a variation of three standard deviations from the mean is enough to immediately stop manufacturing processes for critical parts.

As Monty the Python used to say: “Four is right out!”

#16 traderJim on 04.13.17 at 7:55 pm

Poloz’s statement was pretty much the dumbest one I’ve heard any central banker make, and that’s saying something.

Close friend is racing to get his house ready to list (I have been pushing him for months) but I fear he missed the peak insanity. Too bad. Another month earlier and he might have gotten $500k more.

Now it’ll be a tough call: take a good, but not spectacular offer? Or wait for the ‘correction’ to pass.

If Poloz is right, he should wait, because sounds like the politicos are not going to do anything meaningful.

Big risk, but if it were me I’d wait it out and we could see another bout of insanity in a few months.

Or not.

#17 more talk on 04.13.17 at 8:01 pm

More talk and no action. The same story as usual and rates still in the ditch, with no way out. Pretty sad when everyone is drooling over a tiny increase. Net negative rates are the new normal, slurp up the debt and kick the can further down the road, the kids will pick up the tab after we’re dead.

#18 Stone on 04.13.17 at 8:03 pm

4 countries where there is a recognized real estate bubble (Canada, Australia, New Zealand, Sweden) at this time with a combined population of around 76 million people. The US had a population of just over 300 million when theeir real estate bubble imploded in 2008-2009. Just wondering about what the worldwide ramifications of this would be instead of just thinking about just our little country. If everything just imploded at the same time, how severe would this really be?

#19 suburban coyote and pup on 04.13.17 at 8:07 pm

great post…just sent it to a couple of friends i am worried about. Couple #1 early 50’s, own 2 houses in gta and went to some Scott Mcgillivary real estate flim flam a couple of weeks ago “for $20,000 we get access to an exclusive network of realtors,mortgage brokers,contractors across Canada..we are thinking of buying a house in BC for retirement” They are a teacher and principal, still have significant mortgages on their current homes. No savings beyond DBP.

Friend #2, late 50’s self employed, rents in downtown TO. She is terrified of losing her $1550 rental condo if owner decides to sell… keeps contemplating buying a condo which would gut her modest portfolio and increase her housing costs to a minimum of $2500.00 month.

Not my business…. but I spend a lot of time encouraging my dear friends to open their eyes to this risk and educate themselves. I nag them by sending your columns to them Garth :)

Onf52

#20 common sense on 04.13.17 at 8:12 pm

Hey Leo T

USA dropped a BOOMING little gift overseas today I see (surprised we didn’t feel or hear it.)

Preamble for the orange one raining other things downward in the near future elsewhere to distract from the economy?

#21 Is it true .. on 04.13.17 at 8:34 pm

The TSX (dividends in ) have earned under 5% over the last decade ?

With a housing crisis and oil never to see $100 again , how can anyone be invested in this ?

#22 Freedom First on 04.13.17 at 8:42 pm

Trust me, there are better things to covet.-Garth

Yes. Like living in Freedom, All of one’s adult life.

Especially when you live it starting from the age of 17, like me.

There are many of us, and we walk among the masses. But rarely do they notice us. If they do spot us, they are most often angry.

Just look at all debt levels the masses are carrying. Voluntary slavery.

#1
Freedom First
Master of Freedomonics

#23 Better things to covet? on 04.13.17 at 8:46 pm

I’ll take my real estate over the TSX!!

Pass on that ‘asset class’!!

#24 Andrew Woburn on 04.13.17 at 8:51 pm

“You’d expect that after an eight-year bull market and a massive first-quarter stock rally, investors would be pouring more money into stock funds than bond funds.

You’d be wrong.”

http://www.investmentnews.com/article/20170412/FREE/170419977/investors-pour-into-bond-funds-in-march?

#25 Show me the Money on 04.13.17 at 8:51 pm

What does all this talk mean in a place like Calgary? Since oil crashed prices have only dropped 4%. Could we expect prices to drop further?

#26 Debtslavecreator on 04.13.17 at 8:58 pm

Poloz revealed how deluded these central bankers are. When the 5 year mortgage goes above 4% it is the start of lights out many a Canuck
When the 5 year mortgage goes above 7%, might as well learn to farm. He will regret making that statement -so incompetent or dishonest or both

Upcoming rule changes are one thing but watch HCG – they appear to be in very serious trouble and this is before the RE prices decline which appears to have started
If ( when ?) they go under say goodbye altA mortgage lending and hello RE price drop acceleration and hello CDIC payout on the Oaken GICs / savings accounts
HCG going down may very well exacerbate the tax and lending changes the politicos are planning

#27 crossbordershopper on 04.13.17 at 9:00 pm

simple, sell your place, pack your bags and move to nowhere saskatchewan. it has a canadian tire, hospital, banks, shoppers, everything you need. cost is like nothing, like nothing, walk to work, no stress, you can get a little place for 100 grand. which is a rounding error for southern ontario people. this only works for seniors of course, who have no job and live off the goverment pension. sell your shack for 600 or 700 or whatever, cash in your once a lifetime gain, collect your goverment cheque and spend months south of the border.

#28 Nonplused on 04.13.17 at 9:00 pm

It’s a sign of the times, and how broke the government is, that all 3 levels of government are coming after your house that you live in. It’s going to ultimately represent the total confiscation of all property and assets. Property taxes already do that, but it takes time. Now they want to do it all at once.

#29 Chaddywack on 04.13.17 at 9:01 pm

Speaking of Big Smokers, weed will soon be legal.

I wonder how this will affect bidding wars in BC?

#30 Gentle ,Loving Kindness on 04.13.17 at 9:05 pm

This what happens when political ideology fervor trumps good engineering cost benefit –analysis. Ontario used to have an electrical power supply infrastructure system that was an asset to Ontario. It used to have competitive rates that encouraged business to operate here, in fact in the 70s, it had the most competitive electrical rates than any other jurisdiction in all of North America. Now Ontario’s rates are the laughing stock of North America. Thank You Wynne.
http://business.financialpost.com/fp-comment/brady-yauch-how-queens-park-broke-ontarios-provincial-electricity-sector

#31 Marcus on 04.13.17 at 9:08 pm

Get ready ….. the B-1 Lancers and B-52’s are on the runways in Guam as we speak. North Korea is adamant that they will test their Hydrogen Bomb tomorrow. Looks like ‘merica is about to pop a really big North Korean zit. Invest accordingly.

#32 TSX on 04.13.17 at 9:12 pm

Short …..short ……short

Gold ….gold ….gold ….1300 here we come . We have a perfect loon president to let gold blow through 1400. Look at that chart !!!!

SLV breaking !!!!

#33 Free Bird on 04.13.17 at 9:14 pm

FYI not all sellers right now are in it for greed. Some like friends of ours (who yes are Boomers) are just following advice to sell while they can and add what they can to the retirement fund. Maybe some sellers are greedy but not all. They’re just taking advantage of what sounds like could be the last window for them to cash out. They like us kept getting asked the same question…have you sold yet?

#34 Gasbag Boomer on 04.13.17 at 9:26 pm

Well, it looks like Smoking Man made it to Ecuador but his internet sucks…he’s working on a new book on a typewriter, enjoying hits of liquid whiteout, according to his dyslexic blog.

#35 Trojan House on 04.13.17 at 9:30 pm

There’s an old saying that goes:

“No mortgage, no future.”

#36 common sense on 04.13.17 at 9:33 pm

#31 TSX

YES YES YES.

I am ready too….

Funny Smokie isn’t around when the lunatic shows his true coulors.

Talk about an about face.

#37 Spectacle on 04.13.17 at 9:42 pm

#18 suburban coyote and pup on 04.13.17 at 8:07 pm
Said :: “Not my business…. but I spend a lot of time encouraging my dear friends to open their eyes to this risk and educate themselves. I nag them by sending your columns to them Garth :)”

Great empathy & friendship you offer your friends. Solicited or not, at times you can be a life saver to those we love, as you do . Best advice is, to show them what they have to go to, rather than kick in their Lower Brain system will kick in. Might as well yell at a rock, it cannot get processed. Show them what opportunity, better outcome, and the greater TM things await them ( if they just think/follow hard advice; a rare thing actually) .

Relative will deny the advice and influence, but for example:: he made nearly 1/2 million tax free! You don’t need to be “right” , but your advice does.

Share your results, M

#38 Leo Trollstoy on 04.13.17 at 9:42 pm

Putzlutz is a guy who gives alcoholics free alcohol while simultaneously telling them that it may result in addiction

Clown

#39 Leo Trollstoy on 04.13.17 at 9:46 pm

Gold ….gold ….gold ….1300 here we come

Gold is STILL below $1300? Damn. I was more correct than I thought I would be when I said gold would float below $1300 in 2013. And now it’s almost 5 years later…

What a useless “asset”. People who own gold will always be losers.

#40 NS Guy on 04.13.17 at 9:49 pm

The same type of speculation is at play with many US/Canadian stocks at dot-com-type valuations.

Interesting how the US and Canadian stock indexes have hit peak and are starting the long downward spiral, EXACTLY at the same time as the housing bubble shows signs of deflation.

What downward spiral? — Garth

#41 Self Directed on 04.13.17 at 9:49 pm

“People need to ask themselves very carefully, ‘Why am I buying this house?”’

Because a friend of mine has been patiently waiting on the side lines for the last 8 years for a correction that never happened. And I don’t want to end up like that.

#whenwillthisrebubblepopnooneknowsnotevengarth

#42 bigtowne on 04.13.17 at 9:50 pm

Church is the best in the states. Naples, Florida Unity Church off Rattlesnake Hammock is the best but beware getting past the Catholic Church on the way there. One thing for sure in Naples, Fl in the winter season…get to that pew on time kids cause you will be way in the upper deck back pew. Corpus Christi has an outrageously mammoth 18th century European style church with a small congregation you can count on your two hands who are all wealthy beyond the Aga Khan. The Unity Church in Paradise Valley, North Scottsdale often has professional musicians normally an $80 event asking only to pass the plate praise the Lord.

I love America not just for that good time gospel but for the same reason our Governor Poloz gives us the “hard timing it” kids and pulled a late season snow ball out of the air on Wednesday. I totally feel Poloz’s agony. Everything is better in America nevermind just the good religion lile low taxes; we’re all American and America first.

Also in America their dollar is worth 1.33 Canadian.

#43 paulo on 04.13.17 at 9:54 pm

#30 Marcus
The trupinator is in play here, the carrot and stick play:
the Carrot: Chinese goverment all but told to put there
bad boy in north Korea in place or else you are toast on trading with the USA
The Stick: battle fleet on station,not a show of force but a intentional loss of face event for kim,and possible go ahead make my day event.
Analysis: money talks B.S. walks. China will do its best to put this clown in a box.
The Danger: when cornering a rabid animal.it can do irrational things.
The outlying reality: china needs to keep its trade with the USA,loss of same would cause them some significant internal issues, they will protect it.
Worst case scenario: Bozo the clown in N.Korea takes a shot at the us fleet or attempts a “test” that draws the implied response,trump turns the place into dust in the wind,the Chinese look the other way,claiming they did there best,unfortunately a lot of innocent North Koreans
become “collateral” damage

#44 The Smaller Fool TM on 04.13.17 at 9:54 pm

Sounds like 3 levels of government each trying to get more tax revenue while appearing to do something for the little guy, but worried they may be killing the golden goose. Tough job.

In the end they will do the minimum that will earn them maximum bragging rights. And the speculators on this site hoping to buy back what they foolishly sold years ago, will remain the greatest fools.

#45 common sense on 04.13.17 at 9:56 pm

#38 Leo baby

Just rent it….why own it and carry the costs for so long…

Just like housing.

#46 Smoking Man on 04.13.17 at 10:12 pm

Blog dig meet up at the general store at the forks.
Saturday may 13th.

I have some lies to tell.

#47 Redcurlygirl on 04.13.17 at 10:15 pm

Sooooo, anyone else notice that there’s been no comments from our buddy Smoking Man….and all his other comments (and links to his blog) are gone? What gives?

#48 Eastend on 04.13.17 at 10:17 pm

@suburban coyote and pup

You should have advised your friend to buy a condo at least 2 years ago. They would have some equity and mortgage =to their current rent and they would enjoy their Game of Thrones without worrying about their rent going up…

Is there anyone out there who thinks that weakness in real estate will not have an impact on RICH shareholders…think again!!!
Then what do you do> Do we short the market?

#49 I HATE CONservatives on 04.13.17 at 10:17 pm

Gentle ,Loving Kindness on 04.13.17 at 9:05 pm
You ignorant Conservatives mak me sick. First of all your hate for Liberals is confusing since Liberals are CONseevatives lite. They serve the same corporate masters. They dont care about Canadians; only corporate profits. This way when they lose an election they get hooked up with fake jobs like CEO (tim hudak) or sit on a bunch of boards (Mike Harris) . Any how mike Harras deregulated Hydro and that is the reason for high hydro prices today. BtW Milke the snake Harras sold the 407 ;lease for a 100 years for peanuts . Mike Harras was the 1990’s version of Harper. I hate CONservatives and i hate CONservative lite. End of rant

#50 Trumpocalypse2017 on 04.13.17 at 10:28 pm

Massive bomb blast today by the USA. More to come.

The probability of a nuclear detonation by April 30 is now 65%.

Plan accordingly.

#51 Gold on 04.13.17 at 10:39 pm

double digits a yr ago

up double digits ytd

the panic selling in Nov was silly. Trump euphoria about over now?

#52 Mark on 04.13.17 at 10:44 pm

The Toronto RE market is basically a giant non-issue. The gains in average transactional values were derived not from appreciation in individual units, but rather, by a well-past-the-peak market experiencing a dramatic sales mix shift to only transacting in upper-quartile units. The correct policy response from the BoC is to continue to target 2% inflation, and most available evidence indicates that BoC policy rates may actually be too high relative to the capacity available in the Canadian economy. Especially with the CAD$ on the upswing as of late.

The Ontario government, even the Government of Canada could instruct the banking regulators, such as the OSFI (for federally regulated banks) to increase the capital requirements as applicable to mortgages. They could also crack down on CMHC’s participation in the subprime mortgage financing market through the CMHC subprime mortgage insurance program. There is no need to raise policy target interest rates systemically, especially with Canada’s economy in such a weak and fragile state, with the spectre of significant housing-led deflation across consumer prices in the pipeline.

Interesting how the US and Canadian stock indexes have hit peak and are starting the long downward spiral

Peak? The TSX is basically at a level similar to that of a decade ago, numerically. With a significant earnings retention and earnings growth since.

#53 Hicksville Alberta on 04.13.17 at 10:51 pm

There is a news item on CTV Vancouver today saying that the empty house syndrome is spreading vigorously throughout the lower mainland and not just the City of Vancouver itself.

So, i continue to completely support both a foreigner tax, and perhaps maybe even go as far as banning under severe penalty if caught, any outright purchase of housing stock, and secondly, a pretty hefty empty occupation tax for any residence left vacant.

Is it not more important to keep things open and fair for your own citizens?

Be careful what you wish for. — Garth

#54 soost on 04.13.17 at 10:54 pm

The three of them are going to compare Real Estate portfolios and go home.

#55 AACI Homedog on 04.13.17 at 10:57 pm

Interesting in that the small town market where I am in BC is just kicking into spring mode…with initial signs of rising occurring. Active range mainly 200k to 450k though. Like a different world !

#56 45north on 04.13.17 at 11:07 pm

David Reevely: Premier Kathleen Wynne met Toronto-area mayors Wednesday afternoon to try to figure out what to do about mad housing prices there — a problem that could easily detonate the provincial budget and conceivably tank the national economy and has no good solution.

http://mcaf.ee/dm3qz2

the fact that Kathleen Wynne is getting involved is a good sign but Justin Trudeau cannot remain aloof. He has to take real measures which involve real risk.

#57 Hicksville Alberta on 04.13.17 at 11:07 pm

One of my oilpatch kids moved out to Vancouver about eighteen months ago and has been getting his eyes opened and new experiences from his upbringing in rural Horseturd Alberta.

There is a lot of desperate people out there that own nothing and can barely live on meagre earnings and many even live day to day.

He now has a Japanese girlfriend who is a permanent resident and has been there for about ten years or so. Her friends pool are mainly Japanese that came to Vancouver about the same time as her. Good hard working people but not with a great wage.

Two of her friends and their families have given up and are in the process of going back home as they see no future for their children or themselves. They are planning on moving in June and July.

So, i guess that is some anecdotal evidence of what happens to people that are priced out of opportunity or even a simple reliable living place.

I wonder how much of this is going on in the hotter parts of this country?

#58 A Two-Parter on 04.13.17 at 11:19 pm

It’s a two-parter, Garth. Folks not only think that real estate always go up, but that interest rates never go up —complete euphoria and delusion.

#59 Craig on 04.13.17 at 11:44 pm

It’s been a long time since I remember a financial institution going under in Canada but Home Capital Group seems to be a sinking ship and taking on more water every day . Rating now BBB (low) with junk status not far around the corner and no sign of the shorts covering . Are they toast or will they be taken over/merged at a fire sale price . Comments anyone ?

#60 Russ on 04.13.17 at 11:48 pm

Hicksville Alberta on 04.13.17 at 10:51 pm

So, i continue to completely support both a foreigner tax, and perhaps maybe even go as far as banning under severe penalty if caught, any outright purchase of housing stock, and secondly, a pretty hefty empty occupation tax for any residence left vacant.

Is it not more important to keep things open and fair for your own citizens?
===============

Many countries limit foreign ownership of land, nothing new there.
But any kind a vacancy tax should cause an uprising of citizens.

Present interference in our property ownership is almost beyond belief and yet, everywhere the deplorables and “haven’t got a million” are calling for further impositions of property rights, such that it becomes foolish for a common workin’ stiff to own something that exposes himself to so much punitive intervention.

I think I’m gonna sell this year, retire, rent & travel and come back when the dust settles.

Cheers, R

#61 paulo on 04.13.17 at 11:51 pm

Politics 101:
We have provincial liberal governments in both of the major over heated real estate markets, these regions also
have the combined largest number of voters effecting the federal side,currently liberal . the voters in these areas are
for the most part pissed about the housing situation,and ready to make changes. my bet is the liberal party in BC will not win enough seats in the coming election to maintain official status. over in Ontario the potential
for the same result is the same,except Wynn has time and is somewhat smarter, we shall see. on the federal side if this real estate debacle continues,it will be the main issue in the next federal election and T2 and crew will be facing a similar fate that will come to pass in BC,
and possibly Ontario.
If you think these politicos are not going seriously regulate,tax,and do what ever they must in order to appease the electorate,and reign in our out of control real estate market,you are only kidding your self.
look for a mind boggling hammer to be swung.

#62 Vit on 04.14.17 at 12:08 am

some good read
http://business.financialpost.com/investing/correct-this-housing-market-if-you-dare-because-you-gotta-live-somewhere

#63 Alain on 04.14.17 at 12:11 am

You said: roperty, If you own no land, this is not the time to seek it.

Well no really owns their own land for if property taxes are not paid then you will eventually lose your land so maybe we are all renters some with a bigger stake we could call them temporary owners as long as sky high property taxes are paid in full.

#64 Ponzius Pilatus on 04.14.17 at 12:11 am

Stats from the Lower Mainland.
Inventory is shrinking.
———-

paulb
New
247
Price Change
34
Sold
183
TI:8169
—————–
And they just can kill the beast.

#65 DON on 04.14.17 at 12:29 am

#13 prairie person on 04.13.17 at 7:44 pm

In Victoria, the passengers just keep dancing as rumours of icebergs are whispered here and there. RE agents put up a For Sale sign with one hand then slap a sold sign on with the other. Not sure what is going on but whatever it is, it is crazy. For years, the word was that Victoria no longer was a favorable destination for retirees. Now, has it suddenly become favorable with the stubble jumpers? The newly rich from selling in Vancouver? Americans with real dollars? The Asian menace? Russian oligarchs? The SFH that are being built are mansions, like crazy big so it ain’t no first time buyers getting into the market. And, our darling cutie pie premier is letter the builders build on grade A farmland.
******************

I take it you don’t read the local news, low listings, (people can’t afford to move across town and buy a similar house), people bidding up prices on low inventory. The signs of a sustainable healthy market. Nothing like buying at the Peak. Yes I know Victoria is special, Wakiki of the North. There are twice as many realtors as listings.

Lots of recent posters trying to talk up the market, lots of this can never happen…that will never happen talk…and whadda a yah know it is happening and has happened before.

What happened to the glory days. Things are definitely different now then 2 yrs ago in Vancouver. Do people not comprehend, the banks, economist etc etc have been warning people and yet they remain swimming in chum waters.

All that has to really happen is for first time home buyers to be priced out of the market or get too overloaded with monthlies or just become disgusted with prices and go traveling. It is all about sentiment.

But maybe Rexx Rocks or another Victoria realtor can explain to me how prices can go up 15-30% yr over yr to infinity and still be affordable. Do they teach math anymore in school?

The smart money is already looking for the next bubble. I am investing in bees or maybe Tulip bulbs, my friend at work told me it is the latest craze…what’s old is new again.

My task this weekend is to convince my sister and BIL to list high…unbelievably high so that if an offer comes they will take the cash and run…if not they can grow old in their affordable home. To each their own.

#66 Future Expatriate on 04.14.17 at 12:42 am

Aw, go on, buy a house. Buy TWO houses. Three if you can swing it. Go bigly.

Trump’s blowing up the planet in a few weeks. WWIII.

It’s gonna be uge. Just uge. You’l never have to pay off those mortgages.

#67 Pete from St. cesaire on 04.14.17 at 12:52 am

Preamble for the orange one raining other things downward in the near future elsewhere to distract from the economy?
—————————————————-
Not to distract from, but rather to trigger the economic collapse under the guise of it being due to the actions of N. Korea (or whoever gets to play the patsy this time around). It’ll have to be something big for it to be believable as being the cause for world-wide economic collapse. So, hold-on, N.Korea isn’t Iraq. The true allegiances aren’t known. N.Korea’s full tech capabilities aren’t known. World reaction to US provocation isn’t known.

#68 DON on 04.14.17 at 12:53 am

#36 common sense on 04.13.17 at 9:33 pm

#31 TSX

YES YES YES.

I am ready too….

Funny Smokie isn’t around when the lunatic shows his true coulors.

Talk about an about face.
**********************

Maybe Trump is returning to the Republican nest. Not really a surprise – good plan to make him look anti-establishment just like using Trudeau’s name and looks to beat the older gents. Then he didn’t follow through on changing the way we vote.

War is on the horizon, new dick on the block.

#69 DON on 04.14.17 at 1:07 am

#41 Self Directed on 04.13.17 at 9:49 pm

“People need to ask themselves very carefully, ‘Why am I buying this house?”’

Because a friend of mine has been patiently waiting on the side lines for the last 8 years for a correction that never happened. And I don’t want to end up like that.

#whenwillthisrebubblepopnooneknowsnotevengarth
********************

Solution: Roll the Dice, borrow the most you can, lie on your application if need be, as the investment pay out with be exponential, of course! Everyone wants to live in Hawaii North.

What are you waiting for get in now…Before you are priced out forever…cause all things last forever and ever.

#70 Vancitydave on 04.14.17 at 2:49 am

I want to own, but even with $130k household income I’m priced out now. My hope is 1981-82 rapid interest hike, when researching I see political, economic and demographic similarities to 1981:
1. Celebrity republican president
2. Trudeau prime minister
3. Large demographic cohort of millennials that will put upward pressure on wages as boomers did back then
4. Inflation is real, and under reported, and an oil price hike is a huge risk
5. Currency wars are a big risk

Don’t be fooled by long term bond prices predicting somewhat stable interest rates, because I doubt the bond market in the late ’70’s priced in double digit interest hikes in ’81-82.

#71 Gentle ,Loving Kindness on 04.14.17 at 3:53 am

#48 I HATE CONservatives…..
I stand behind my position. Ontario used to have a power system that was enviable. Cheap reliable power managed by engineers. Wynne has turned it into a chaotic economic mess so that she can get brownie points with the left environmentalists. Premier Davis, (a Conservative), built the system, Wynne destroyed it. After the next elections, the sounds the liberals will be hearing is that of the weed whacker Kevin O’ Leary will be using to flush the liberals out.

#72 4-Sigma Event on 04.14.17 at 7:06 am

“… Toronto’s market has achieved a standard deviation of +4. This is like having 18 beer then playing with your chainsaw. In your underwear….”

Just for some context: the approximate frequency of a 4-sigma event is once every 43 years (twice in a lifetime).

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

#73 Cottingham a bargain on 04.14.17 at 7:18 am

OMG big rider your posts are too funny !

It’s sounds that they are only in good fun ( I hope)

You do understand the cultural thinking though around houses and real estate: !

#74 Grantmi on 04.14.17 at 8:09 am

Is anyone else seeing this, or is it just me. HCG in free fall. Massive gap down yesterday… off 9%

#75 TrumpForTheAges on 04.14.17 at 8:18 am

#69….VanCityDave,

The real difference is the levels of debt, including at the government level. The US has $20 T debt and climbing. If Q1 comes in with a GDP growth rate of 0.6 %, a continual rise in rates will make the debt unserviceable.

The real fear is stagflation….where we see inflation as you reference with nominal growth. I do think that Garth is quite right about the housing market being a bubble, and the stock market is also heading that way. The amount of intervention in the markets that started with QE and unnaturally low interest rates is coming home to roost.

Garth hates to acknowledge it but if you look over the last four years, the US growth rate has declined while debt continues to mount. If Q1 comes in around 0.6%, there is slim to no chance that the US can even finish the year at 2% annual growth. And….the leading indicators are suggesting that the US is on the brink of a recession.

The Trump pro growth policies are rhetoric. Remember too all of the pundits who warned that a Trump win would crash the market to then all of a sudden, once he wins, herald him as the economic saviour?

The reality is there is a transfer of wealth from West to East, and the US is equally dependent upon China as China is of the US and there is no easy answer to getting the debt bubble under control.

#76 maxx on 04.14.17 at 8:25 am

“There’s no fundamental story that we could tell to justify that kind of inflation rate in housing prices, and so it’s that gap between what fundamentals could manage to explain and what’s actually happening which suggests that there is a growing role for speculation,”

I beg to differ. The fundamental story is pi$$ easy to explain, a rich harvest of low-hanging fruit that describes beautifully what happened.
It’s called unbridled human nature in the face of an unprecedented opportunity to make money; the uncoupling of government responsibility by way of destructive low rates.
The part I’m having a problem with is how much latent damage we’ve yet to face, given this idiotic monetary policy.

#77 A Correction to #71 4-Sigma Event on 04.14.17 at 8:35 am

We are only considering asset price inflation (not deflation), so I should have only considered the upper tail (not both tails) of the probability distribution.

Hence, the approx. frequency of this 4-sigma, upper-tail event is once in 86 years (once in a lifetime).

Garth, you weren’t exaggerating!

#78 Scott Cordier on 04.14.17 at 9:02 am

Real estate going down much 5% to 10% maximum is not a real possibility.

It is just like interest rates and bond yields, the central banks, banks, financial institutions etc. will control it, contain it.

Who would ever thought negative interest rates in Europe, Japan would happen and 2.3%, 2.4% 5 year fixed rate mortgages would be here in Canada.

#79 maxx on 04.14.17 at 9:17 am

#35 Trojan House on 04.13.17 at 9:30 pm

“There’s an old saying that goes:

“No mortgage, no future.””

Which mental fruit fly came up with that one?
Must have been a realtard.
It’s since been replaced by: “no mortgage, fat bank account”.

I prefer the last one.

#80 Retired Buddah on 04.14.17 at 9:23 am

#22 Freedom First

“There are many of us, and we walk among the masses. But rarely do they notice us. If they do spot us, they are most often angry.”
——————————————————————–

You are so right Freedom. I recently announced my impending (early) retirement at work. I am now a despised enemy. The jealousy is seething and brutal.

But hey! Eff ’em all! Not my problem that they were not students of Freedomonics.

#81 The Smaller Fool TM on 04.14.17 at 9:27 am

Seems that all the measures the 3 stooges can implement will hit the condo market. Not much that they can do about the detached houses that is politically feasible.

To recap: rent control, speculation tax, empty homes tax. To the extent that these problems even exist, they are all in the condo market.

Where such measures could actually have an impact on the detached market is if housing starts (mostly high rise) fall , it will result in lower economic activity and less demand overall – in time. Will the slack be picked up by other sectors, say infrastructure – who knows? But also may mean lower rates, so it’s anybody’s guess which factor will weigh in more.

#82 when the whip comes down on 04.14.17 at 9:28 am

#64 – The victoria market is really performing outside of what I think even what very experienced realtors can comprehend. When realtors with 25 yrs plus experience cannot advise their clients on what a fair offer is and what things are likely to sell for, then its a sign of pure market dysfunction to the lay person. The experienced are meant to be the experts right? If they can’t even price things properly or counsel on offers that should be in the ball park of what a property ultimately sells for, what is anyone relying on them to do? I’m not being critical of them, I’m just saying if the market is acting so far outside of their expert experience, part of their service has been rendered completely useless.

#83 Purge on 04.14.17 at 9:37 am

#46 Redcurlygirl on 04.13.17 at 10:15 pm
Sooooo, anyone else notice that there’s been no comments from our buddy Smoking Man….and all his other comments (and links to his blog) are gone? What gives?

Wow… you seem to be right, greaterfool seems to be purged from Smoking Man’s previous posts.

#84 common sense on 04.14.17 at 9:38 am

More bad news on retail sales out of the USA.

USD drops naturally and takes the exchange rate edge slightly off other countries currencies. And Donald wants a lower dollar.

Got housing to prop up what’s left of Canada’s economy?

Interest rate hikes? Dream on.

#85 Tony on 04.14.17 at 9:41 am

Re: Joe Natal joining Rogers date. In America the securities and exchange commission would hang someone for something as obvious as this. Gee?? When is their first quarter earnings made public? Why did Joe pick this date of all dates? You couldn’t get away with something like that in America.

#86 Grey Dog on 04.14.17 at 9:42 am

#4 ex cowtown,…pay cash versus debt…
I have a quandary for you. I would like to buy an RV, it sells for ~200k$. We have been saving for years. Paid off home in GTA, responsible for a grey dog, no other descendants, RRSPs, TFSAs, plus quite a bit in non registered savings. So, do I pay cash for this RV, taking a wallop of funds out of compounding investment circulation or do I use my line of credit at prime plus one?

#87 Bobby13 on 04.14.17 at 10:14 am

The u s housing is heading for a downward spiral as the fed says they ll unwind their balance sheet, we’ll see if this actually happens. Gold being compared to how many dollars it cost to buy or how many ounces it takes to buy a home or car is the easiest way to see what’s over or under priced. Governments and banks hate gold it goes against their system. Canada economy is dead the housing market will figure this out. Trade is down ships aren’t moving they too are going broke yip economy is improving makes total sense.

#88 mto on 04.14.17 at 10:14 am

“…Historically, housing has risen by about 5% annually and since 2015 has been out of control…”

Generally, I agree with the message, but it grossly understates the problem:

The average rise of 5% is computed started in 1990. The 5 year mortgate rate:
1990: 12%
2017: 4.64%

Monthly payment for $100,000 borrowed:
1990: $1031
2017: $561

The 5% average appreciation has been over a period of unprecedented decrease of interest rates. There is every reason to believe this trend now only will stop, but it will go into reverse.

Saying “average increase of house prices of 5% since 1990” is like saying “from Feb. to July the average temperature increase was 20%” and considering both a normal long term trend.

#89 crowdedelevatorfartz on 04.14.17 at 10:19 am

There are better things to covet….
++++++++++++++++++++++++++++++++++++

Thy neighbors wife?

#90 NoName on 04.14.17 at 10:26 am

#71 4-Sigma Event on 04.14.17 at 7:06 am

when someone mentions any-sigma, first thing what goes tru my mind is aerospace industry.
Tolerance are so tight and strict that parts manufactured are near 6-sigma, but in a contrast bag handling on terminals is around 2-sigma.
So basically near 100% that bird will be ok, chance that they will lose your luggage 30%.

Best ever explanation of standard deviation, using dogs.
http://bit.ly/2oyhYgK

#91 crowdedelevatorfartz on 04.14.17 at 10:29 am

@#46 Redcurlygirl
“Sooooo, anyone else notice that there’s been no comments from our buddy Smoking Man….and all his other comments (and links to his blog) are gone? What gives?”
********************************************
Various scenarios none of which are too appealing.
He’s on a repositioning cruise ship in the mid Atlantic with no internet.
He’s stuck in a cabin with Shia LeBoef in Lapland for a month……….
His “other” self has emerged due to an intervention.
His wife had enough.
His doctor had enough.
His body had enough.
OR
Nectonite has recalled him and has started the eradication of all trace of his being here.
Pretend you didnt know him…you may be next
Whatever the reason.
We miss our Smokey

#92 ole Doberman on 04.14.17 at 10:37 am

Is anyone else seeing this, or is it just me. HCG in free fall. Massive gap down yesterday… off 9%
————–”—————————————–
Genworth to looking like the start of a waterfall event

#93 crowdedelevatorfartz on 04.14.17 at 10:44 am

@#46 redcurlygirl

Apparently there’s something going on near the Equator that interests Nectonites

https://www.google.ca/url?url=https://dyslexicsmokingman.blogspot.com/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiBi8eClqTTAhVD0GMKHe8ODBgQFggUMAA&usg=AFQjCNEe5CgK7CZ_dXuP5bhP-7njO3C01A

Tumpocalypse2017 might be able to figure it out but he needs to wash down more paranoia pills with a tumbler of Vodka before he can make predictions of the future of Mankind…….er sorry…… that wasnt too pc…….. Personkind? Peoplekind? Zhekind? Zherkind?
I guess as long as we’re “kind” thats what matters……

#94 45north on 04.14.17 at 10:52 am

Paulo: We have provincial liberal governments in both of the major over heated real estate markets, these provinces also have the combined largest number of voters effecting the federal side,currently liberal

that is very true

the voters in these areas are
for the most part pissed about the housing situation,and ready to make changes

I don’t know. 70% of the voters own houses, condos or whatever. In the GTA, 70% of the voters are currently very pleased that their one financial asset has gone up in price by 30%. In Vancouver, 70% of the voters are worried that their one financial asset is not going up. These voters pay attention to political change so if you’re a politician you don’t want to piss them off. That’s what makes it so hard: if you come up with some specious self-serving piece that requires no political courage, you will be called out for it.

my bet is the liberal party in BC will not win enough seats in the coming election to maintain official status.

not just lose the election but lose official status?

my bet is the BC Liberal Party will keep official status

over in Ontario the potential
for the same result is the same

pretty much

#95 TurnerNation on 04.14.17 at 11:12 am

Saw Lamb at an event party last night. Private club, natch.

Funny as earlier in day had been reading the laments, his included:

http://www.postcity.com/Bayview-Post/April-2017/Real-Estate-Roundtable-Biggest-regrets/

#96 Read it on 04.14.17 at 11:40 am

1998: End of Public, Non-Profit Hydro

The most significant piece of legislation affecting Hydro rates was Mike Harris’s Bill 35 in 1998, The Electricity Competition Act. It ended 94 years of public, non-profit, at-cost power in Ontario, where profits were given back to businesses and rate payers in the form of low and stable rates. On April 1st, 1999, all Municipal Hydro’s as well as Ontario Hydro were changed from non-profit, at-cost Commissions into for-profit corporations. Ontario Hydro was broken up into five Corporations, the two largest being OPG (Ontario Power Generation) and Hydro One. The Harris Tories conducted a massive advertising campaign on Hydro Deregulation promising that “A competitive deregulated electricity market, will lead to lower rates” [see “Harris certain Ontario power rates will drop”].

At public hearings then and all through the 2000s, as part of the campaign to maintain public hydro, the question repeatedly asked was “How do you get lower rates when you add in profits to generators, profits to distributors, profits to retailers, dividends to investors and commissions to commodities brokers?” When Tory Energy Minister Chris Stockwell was confronted with this question, he angrily left his own town hall meeting.

In 1998, the Conservatives set up a Market design committee. The main player on that committee came from ENRON, an American corporation that had recently committed one of the biggest corporate frauds in American history. It had designed electricity markets around the world including Alberta, California, and here in Ontario. Not surprisingly, Alberta had the same problems with high rates as we came to have here in Ontario. California subsequently had a major crisis with its electrical system after ENRON designed its electricity market and – in order to raise market rates – manipulated supply so low that it resulted in major blackouts. The deregulation that originated in the U.S. was the major cause of the 2003 blackout here in Ontario.

Ontario’s electricity market opened in the spring of 2002 but in November of that year Premier Ernie Eves had to close the retail market because the market price had spiked up to 49 times the rate during the summer months. The ENRON designed wholesale market – called the IESO (The Independent Electricity System Operator) remains open to this day and is one of the major reasons for price spikes in Ontario.

In April of 2002, CEP, CUPE and the Ontario Electricity Coalition stopped the Harris/Eves sale of Hydro One in court. During the court case Judge Gans asked the governments lawyer “Why did you separate the debt from the Bruce nuclear deal?” The Government Lawyer answered. “To make it easier to sell” [the ruling can be found here].

In June of 2002, after losing the court case to sell Hydro One, the Tories under Ernie Eves passed Bill 56 giving them the legal authority to sell Hydro One. But they didn’t dare do it. It is this legislation that Kathleen Wynne is using to sell Hydro One now. (In 2000, in a deal far worse than the sale of HWY 407, the Tories had privatized the Bruce nuclear station via a long term lease. The profits are privatized but the debt, the risks and decommissioning remain public). Tory leader Patrick Brown seems to have amnesia about the Tories’ actions and the Tory deregulation legislation that is the major part of skyrocketing hydro rates.

The ENRON designed IESO electricity market however remains open and hidden. The IESO submits a bill to the OEB (Ontario Energy Board), twice a year and the OEB “trues up” rates. That’s why for the last ten years, your Hydro bill has gone up every May 1st and November 1st. There is not an ENRON designed electricity market anywhere in the world where prices have not skyrocketed.

In the spring of 2002, part of the NDP’s energy plan was that “All new generation will be private.” (As well, during the early 1990s, Bob Rae’s appointee to head Ontario Hydro, Maurice Strong, was instrumental in laying the groundwork for the restructuring of Ontario Hydro for the Harris Tories). At the convention that year, leader Howard Hampton deleted that part of the NDP’s plan and he campaigned on Public Power in the 2003 provincial election.

http://rankandfile.ca/2017/02/24/time-to-fix-hydro-mistake/

#97 Mr Trump on 04.14.17 at 12:00 pm

To ignite gold ? And here we thought his presidency was about growth , jobs , maga

IF they are dumb enough to engage n Korea , well, gold will fly

Given gold’s recent break from 1260, it appears the ‘just in case’ group is buying

#98 akashic records on 04.14.17 at 12:03 pm

#46 redcurlygirl

Your observation is correct – Smoking Man’s past posts have been deleted from this blog.

For whatever reason.

Mind you, once on the Internet, always on the Internet.

https://web-beta.archive.org/web/20160313162450/http://www.greaterfool.ca:80/2016/03/11/hot-stuff/#comments

Smoking Man is timeless… like everyone else.

“Bet accordingly”.

Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth

#99 Big Bear on 04.14.17 at 1:16 pm

Garth, I’ve been reading your musings for years (long before the blog was introduced) I recall seeing Gwynne Dyer in the same local free tabloids until he crossed the Asper line and of all the theorists (he’s not conspiratorial) he’s been the most accurate about the fallout of the Iraq War and the alliances that have formed as a result of cowboy diplomacy. We are watching it all unfurl with incredible accuracy in real time these past few months…

On the macro picture, I recently read where you spoke of the BIS and the IMF and all those other above the law orgs who play puppetmaster with us mortals…

The ability to create debt from thin air through fractional reserve lending then use that debt to shackle many (especially the naive social justice warrior/snowflakes) has proven brilliant in its evil.

Just a matter of time before they create a liquidity crisis, call in their loans, foreclose and let it deflate non? At that point they will sell the best of the lot to their cronies for pennies on the dollar while renting the undesirables to the newly deplorable and our canuck politicians will be lucky to survive with their careers intact. JT will be the fall guy on the micro level while Trump with be Macroman – Epic Fall Guy and well deserved for his hubris.

Just need a good crisis to get the ball rolling (take your pick from this weeks headlines) then confidence in the Fed will wane while Trump takes the fall. Then it will all be saved by the newly gold backed IMF SDR? A good bloody nose for the US will be needed first tho…

Willem Middelkoop is worth reading to any who aren’t familiar with what I’m writing about: https://twitter.com/thebigresetblog?lang=en

#100 Big Bear on 04.14.17 at 1:20 pm

Sorry, link provided was last years

Here’s the current link: https://twitter.com/wmiddelkoop?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

#101 Trumpocalypse2017 on 04.14.17 at 1:28 pm

http://www.cnn.com/2017/04/14/politics/donald-trump-north-korea-mar-a-lago/index.html

The probability of a nuclear detonation by April 30 is now 90%.

The probability of a global nuclear confrontation by April 30 is now 55%.

Plan accordingly.

Most people will require about 1/10 of a cubic metre of water per day in survival mode. Be sure you have some in storage

#102 Schlong Branch Deplorable Wisdom on 04.14.17 at 1:32 pm

#97 akashic records on 04.14.17 at 12:03 pm

#46 redcurlygirl

Your observation is correct – Smoking Man’s past posts have been deleted from this blog.

For whatever reason.

Mind you, once on the Internet, always on the Internet.

https://web-beta.archive.org/web/20160313162450/http://www.greaterfool.ca:80/2016/03/11/hot-stuff/#comments

Smoking Man is timeless… like everyone else.

“Bet accordingly”.

Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth
..
He’s just peeved only 36 ne’er-do-well’s bought his book. – The greatest living piece of gonzo fiction writing the entire universe has ever known. So he won’t share his astounding wisdom any more .. he’s still spewing full-on on twitter world! from drunken schlong branch headquarters. The royalties from 36 sales didn’t last in ecuador

#103 Tony on 04.14.17 at 1:35 pm

Re: #87 mto on 04.14.17 at 10:14 am

The long term average annual price increase in homes in both Canada and America has been 3 percent not 5 percent.

#104 akashic records on 04.14.17 at 1:42 pm

Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth

===

Sounds like a reasonable story from Smoking Man’s life, but completely unheard of for WordPress, which is the back-end application of this blog.

Unless SM had an account with the proper administrative privilege, there is no way that he can wipe all of his own comments using JD, nicotine, fire and sudden motions.

How about restoring the database backup?
Your techie should be able to get this fixed.

#105 Future Expatriate on 04.14.17 at 1:50 pm

#82 Smoking Man died of blog cancer. It was inevitable.

#106 Trumpocalypse2017 on 04.14.17 at 1:55 pm

http://money.cnn.com/2017/04/14/news/north-korea-air-china-pyongyang/

Air China has just suspended flights to North Korea!

The probability of a nuclear detonation by April 30 is now 96%.

#107 crowdedelevatorfartz on 04.14.17 at 2:30 pm

@#103 akashic records
“Your techie should be able to get this fixed….”
+++++++++++++++++++++++++++++++++++
Easter Weekend ….overtime rates.
Or
its not worth the bother
Or
God Help me,
Trumpocalypse2017 is actually right and we need 1 litre of water per day .

#108 A Reply to #95 Read it on 04.14.17 at 2:41 pm

Jeff Skillings is set for early release Feb. 21, 2019 (upon serving 14 years of a 24-year, 4-month prison sentence).

(Ken Lay died before his sentencing.)

#109 Dan.t on 04.14.17 at 2:42 pm

#97 akashic records

“Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth” .

Haha, sounds about right. If you are going to go out, go out swinging.

#110 common sense on 04.14.17 at 2:53 pm

#85 Grey Dog

Wait 6 months….. I bet your $200K RV will be “on sale”

$150k? Maybe less…

#111 YVR update on 04.14.17 at 3:03 pm

16 years into the housing bull market and you guys still keep calling for a correction/melt.

Sorry to break it to you but you’re missing the true causes. Look at every other site on the internet for clues. Lol

#112 Happy Housing Crash Everyone! on 04.14.17 at 3:07 pm

What a house of cards that will fall down. GTA is screwed. This is the dot.com bubble × 100 . Good article with talking points about shyster realtors advising people not to wait and just buy to others saying
“People are buying 100 per cent on debt. They are refinancing their homes. They don’t care if they are cash-flow negative. People just think they’re going to make money. Everybody wants another property. I’m talking friends, aunts,” he says

/www.thestar.com/business/real_estate/2017/04/14/buyers-sellers-brace-for-an-unprecedented-spring-real-estate-season-in-toronto-region.html

#113 Damifino on 04.14.17 at 3:18 pm

#103 akashic records

How about restoring the database backup?
Your techie should be able to get this fixed.

————————————–

In my opinion, nothing is broken.

#114 WUL on 04.14.17 at 3:24 pm

These stats from @stats_canada are interesting and timely:

29% of Canadians are planning on moving to the States to be fans of hockey teams that win.

32% of Canadians are taught at birth to boo Gary Bettman. The other 68% learn it in kindergarten.

49% of Edmonton Oilers jerseys are just Connor McDavid’s name taped over (insert first round draft pick here)’s name.

#115 Lee on 04.14.17 at 3:28 pm

Quote in lead story in Toronto Star today quoting real estate agent saying better buy now or you’ll never get in. What better authority than this? Better jump in now or cry forever.

#116 WUL on 04.14.17 at 3:42 pm

Vancouver’s future evident in coastal California. Leaving Socal:

“Rob Lapsley, president of the California Business Roundtable, a senior executives group, said housing has “quickly risen to the top of issues impacting decisions in the boardroom.”

Businesses are struggling to recruit and some are putting off expansions, Lapsley said, while others are moving mid-level office jobs to neighboring states.”

LA Times:

http://www.latimes.com/business/la-fi-leaving-socal-20170414-story.html

#117 Penny Henny on 04.14.17 at 3:44 pm

#97 akashic records on 04.14.17 at 12:03 pm
#46 redcurlygirl

Your observation is correct – Smoking Man’s past posts have been deleted from this blog.

For whatever reason.

Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth

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

My guess is Smokie received a cease and desist from former employer and is currently involved in a lawsuit. Rather than try to edit his thousands of previous posts he asked Garth for mercy and begged him to delete said posts.
Will he still show up May 13th at the B.G.S.?

#118 Ecuador or Bust on 04.14.17 at 4:36 pm

#116 Penny Henny on 04.14.17 at 3:44 pm

#97 akashic records on 04.14.17 at 12:03 pm
#46 redcurlygirl

Your observation is correct – Smoking Man’s past posts have been deleted from this blog.

For whatever reason.

Apparently he spilled a bottle of JD on his laptop then collapsed and set it on fire with his cigarette, all while posting. As a result, technical issues. As much as he deserves it, he has not been banned. =- Garth

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

My guess is Smokie received a cease and desist from former employer and is currently involved in a lawsuit. Rather than try to edit his thousands of previous posts he asked Garth for mercy and begged him to delete said posts.
Will he still show up May 13th at the B.G.S.?
..
Well they couldn’t have just disappeared without Garth’s help…..garth clearly has a soft spot for him…… like the dog that just refuses to stop eating the garbage…. so some sort of “reality” actually entered his drunken existence and smoking man had to die….. but they live on in the archive web forever….. You would think the universe’s best VBA IT programmer would realize that!

#119 Balmuto on 04.14.17 at 4:48 pm

Just got back from Hong Kong. And we think we have a real estate bubble, lol. In HK their RE index is updated weekly, not monthly, because that’s how fast it moves. To purchase even a decent apartment is out of the question for the average person. Most people I spoke to there are resigned to renting forever – and rent’s not cheap. Could be worse, folks.

#120 NoName on 04.14.17 at 5:04 pm

#117 Ecuador or Bust on 04.14.17 at 4:36 pm

https://www.youtube.com/watch?v=_NdHySPJr8I

#121 crowdedelevatorfartz on 04.14.17 at 5:12 pm

@#118 Balmuto
“Could be worse, folks….”
+++++++++++++++++++++++++++++++++++
Yes.
You could live in Hong Kong.

#122 conan on 04.14.17 at 5:26 pm

Things are getting active on N Korea front. Earlier, China moved 150 k troops to border, and then today, suspended all flights to/from North Korea.

If both China and US want this regime to end, then this is a new scenario. Does US take the capital or is it China? South Korea also wants in, due to recent political chaos.

I think there is a potential North Korean attack coming up in the near future. Compliments of Donald Sun Tzu Trump and the art of the deal err war?

We have seen Missiles and a MOAB this week, so not too far-fetched.

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

#123 When Will They Raise Rates? on 04.14.17 at 6:02 pm

4 standard deviations? Means we’re probably already in a correction, just don’t know it yet…

#124 Shyster Realtor on 04.14.17 at 6:14 pm

Balmuto #118

You shysters are beyond shysters. Toronto is not even close not even 1/10 similar. The RE industry needs some rules and regulations plus CMHC has to go. Then you shysters wiill see what happens. Its goingbto happen anyways. It will get so bad that realtors will claim they were never realtors .

#125 Ace Goodheart on 04.14.17 at 6:14 pm

If you are expecting Toronto detached and semi detached house prices to “crash” you may be waiting a long time. If you are purchasing real estate anywhere in Ontario, other than Toronto, I would suggest that you not do so.

They are not making any more land in Toronto. Detached will always be “unobtainium” and semis are similar.

Elsewhere, there is tons of land, they can build houses as much as they want and people are idiots for bidding on houses in places like that. Morons. Dupes. Total fools.

Right now, you have the opportunity to purchase detached and semi detached in the 6ix for about 200 to 300K less than it will be in the summer. This opportunity will not repeat itself.

#126 Entrepreneur on 04.14.17 at 6:15 pm

Thumps up to the comeback comments (keep the greedy ones at bay) and lots of funny ones too.

The three important officials meeting to discuss GTA housing market and so quickly too. That is good and that is how it should be govern for the local Canadians. But, but I don’t recall BM having a discussion with our premier and mayor, maybe I missed it, or when “the shoe is on the other foot” different story and response time.

Looks like Kristy is concentrating on jobs stats in Victoria/Vancouver area for voters as she forgot the rest of us in B.C (one ad had Alberta background). And btw, those job numbers are mostly part time in services. A leader should be talking about all of B.C. not just in where can I get votes so I can win, so out-of-touch, so not a leader.

Also, a leader can fudge the job stats to their liking (to win, win) but it is full time jobs that matter. We know that but we should also look at how many small businesses are functioning to how many have closed or moved away. This is an indicator on how our province is sustainable and able to “hold the fort” when things go sour. And then from those stats can discuss the “whys” and “how come.”

Is it the free international trades? Or is it the big unions? For sure and that needs correcting but no one wants to budge.

The people of a nation come first and each person should be respected fairly so we can grow and be strong again.

And thanks GT for an outstanding blog.

#127 Eddie Y fellow loser lounge member. on 04.14.17 at 6:46 pm

I know Smokey is at Seneca tonight. I’ll get the low down and share my findings.

#128 Hong Kong ? on 04.14.17 at 6:47 pm

Why do you they gobble New Zealand , Canadian ,Australian real estate ? Cause it’s dirt cheap , relatively speaking

#129 akashic records on 04.14.17 at 7:10 pm

The latest Dump of Alleged NSA Tools

https://motherboard.vice.com/en_us/article/the-latest-shadow-brokers-dump-of-alleged-nsa-tools-is-awful-news-for-the-internet

Right now, millions of computers could be in danger. And they will be hackable until Microsoft releases patches, which could perhaps take weeks or months.

Latest “Shadow Brokers” Leak Reveals NSA Hacked Most Windows Platforms; SWIFT Banks

http://www.zerohedge.com/news/2017-04-14/latest-shadow-brokers-leak-reveals-nsa-hacked-swift-belgium-hq

The folder claiming to hold SWIFT data contains SQL scripts that search for SWIFT-specific data inside databases, and text and Excel files hinting the Equation Group had hacked and gained access to several banks across the world, including not only Middle Eastern countries such as Palestine, UAE, Kuwait, Qatar, and Yemen, but also allegedly to European Union-based banks.

“this folder is by far the most interesting of the three, as it alludes the Equation Group (NSA) had been infiltrating banks, and secretly keeping an eye on SWIFT transactions. The files included in the dump indicate the Equation Group had targeted and successfully infiltrated the SWIFT Service Bureau of the Middle East (EastNets), one of the SWIFT departments managing and monitoring SWIFT transactions across Middle East banks.”

And while the NSA can perhaps claim that it was infiltrating Middle-eastern SWFT-member banks to search for terrorist, it will have a bigger headache on its hands if it emerges as some have alleged, that the NSA’s “Equation Group” had managed to hack the internal Belgium HQ network at SWIFT itself.

As a reminder, the transaction protocol SWIFT has been repeatedly targeted by hackers seeking to redirect millions of dollars from banks around the world, with recent efforts in India, Ecuador, and Bangladesh. Over the past year, researchers have pointed to clues that a $81 million Bangladesh bank theft via SWIFT may have been the work of the North Korean government. But the Shadow Brokers’ latest leak offers new evidence that the NSA has also compromised SWIFT, albeit most likely for silent espionage and supervision of global fund flows, rather than wholesale larceny.

It was not the Russian government that allegedly had backdoor access to virtually every Windows-based platform and had infiltrated the information network that connects every bank in the world, but the NSA… and the US government.

And then there’s the question why the NSA has kept silent throughout this entire process.

#130 Karma on 04.14.17 at 7:10 pm

Post on 04.13.17 at 7:25 pm
“Just to add further support to yesterday call that POLOZ IS AN IDIOT, after saying that an increase of the BOC rate by 5% wouldn’t slow down house price gains and speculation. And that not raising rates until sometime in 2018 is justified, here’s a collection of Economists from Bay Street’s opinions:”

Great quotes. Can you post links to the sources?

#131 traderJim on 04.14.17 at 7:31 pm

#100 Trumpocalypse

Do you think a global nuclear war annihilating 99% of the population instantly will affect home prices in the GTA?

Will Trumpageddon be just like the Walking Dead TV show?

Did all the MSM except for the ‘right wing’ ones predict right up to election eve that Hillary had a 98.1% chance to win?

#132 45north on 04.14.17 at 7:46 pm

Ecuador: My guess is Smokie received a cease and desist from former employer and is currently involved in a lawsuit. Rather than try to edit his thousands of previous posts he asked Garth for mercy and begged him to delete said posts.

maybe this will help:

In late 2015, as Fortress was scouring Rabidoux’s Twitter feed for slights, the Ontario government introduced a law, the Protection of Public Participation Act, that created a new way for defendants to fight defamation suits. Ontario’s so-called anti-SLAPP law doesn’t alter existing defamation laws, but if a defendant introduces it as a motion, the plaintiff has to prove several things, the most important being: was the defamation so damaging to its reputation that it outweighs the potential harm to the public interest in letting the suit proceed?

http://mcaf.ee/o5tfv1

#133 Cowtown Cowboy on 04.14.17 at 7:52 pm

Looks like Smoky is In Ecuador, no doubt irritating the locals…

#134 Balmuto on 04.14.17 at 8:13 pm

“#123 Shyster Realtor on 04.14.17 at 6:14 pm
Balmuto #118

You shysters are beyond shysters. Toronto is not even close not even 1/10 similar. The RE industry needs some rules and regulations plus CMHC has to go. Then you shysters wiill see what happens. Its going to happen anyways. It will get so bad that realtors will claim they were never realtors .”

If I were a Toronto realtor I wouldn’t be spending March/early April on the other side of the globe.

#135 Balmuto on 04.14.17 at 8:15 pm

“#127 Hong Kong ? on 04.14.17 at 6:47 pm
Why do you think they gobble New Zealand , Canadian ,Australian real estate ? Cause it’s dirt cheap , relatively speaking”

This guy gets it.

#136 Ace Goodheart on 04.14.17 at 9:03 pm

Still have my multi million dollar semi. Decided not to sell. Went over there with the intention of telling the tenants they’d soon be homeless. Upstairs folks ended up having birds in their dryer vent. So cleaned that out, then replaced the roller bushings on the back, so dryer working again. They have teenage kids. They were playing cards in the kitchen. They looked really happy.

Main floor lady and her 4 year old were out having a barbeque.

Basement couple (cutest couple ever) were just getting home…..

I can’t do it. Can’t make these people homeless.

cancelled the sale.

Maybe later, but not now. I can’t do it…..

#137 Ryan on 04.15.17 at 12:51 am

Your tenants wouldn’t become homeless if they have a lease.

#138 willworkforpickles on 04.15.17 at 5:28 am

Watch that chainsaw in your underwear, you don’t want to get your pickles caught in there.

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#140 AGuyInVancouver on 04.15.17 at 11:46 am

I wish I could be optimistic anythign will restore sanity to housing markets. My cousin just sold their house in Whidby last week, nine offers. The lunacy continues.

#141 Future Expatriate on 04.15.17 at 10:53 pm

#130 The alt right had a direct line to Putin.

You know, the guy whose shills and “wikileakers” threw the election.