Frenzies

DOUG By Guest Blogger Doug Rowat

When a market, or at least a particular area of a market, gets preternaturally hot and values overinflated, strange things start to appear. Odd and granular products emerge—products that, at first glance, seem as if they just can’t actually be true. We’ve seen enough examples of these within the real estate market—shall I mention micro-condos?—so I’ll highlight an example from an entirely different market to prove that the strange products that emerge from frenzies are really all the same, they’re just branded and packaged differently.

After being left for dead in the mid-90s, the Canadian sports collectible market has staged a comeback of sorts. One of the key drivers of the market’s resurgence has been the rise of Edmonton Oilers star Connor McDavid. No doubt he’s an outstanding player and his incredible skills have dazzled us all year, but he has played less than two NHL seasons and if there are a couple of things we know for certain about the NHL it’s that its highly touted players often don’t realize their full potential and, even if they become stars, they tend to get knocked around so often that their injuries significantly hamper their careers (Mario Lemieux, Eric Lindros and Sidney Crosby, to name but a few). McDavid’s already missed almost half of the 2015–16 season with a broken collarbone. However, despite all of the unknowns and clear risks, McDavid has become such an inflated and hyped commodity that the release of the below collectible was deemed viable:

“Game-Uased Ice” (i.e. water)( from a Connor McDavid Hockey Game selling for up to $180 a Piece.

Source: PuckJunk.com

As a portfolio manager, we see similar unnecessary and highly speculative products released all the time, particularly in the area of the market that Turner Investments focuses on: Exchange traded funds, or ETFs.

Generally speaking, ETFs are wonderful. They provide diversification, low cost, transparency and tax efficiency. As a result, the US ETF market has grown rapidly from less than US$1 trillion in assets in 2009 to more than US$2.5 trillion at the end of last year. Unfortunately, this growth has spawned some questionable products.

We recently learned, for example, that the SEC may approve 4x leveraged ETFs. That’s F-O-U-R times leverage. Just in case equity markets weren’t unpredictable and volatile enough for you, along comes a product designed to really blow up your pacemaker. Previously, the most risk you could take with a US-listed ETF was 3x leverage, but in this new, post-Trump era of reduced regulation, 3x leverage, apparently, may be just too restrictive. Unsurprisingly, the SEC that may approve the 4x leveraged ETFs is now headed by Trump appointee and Wall Street lawyer Walter Clayton. When it comes to allowable risk, the sky could now be the limit. (We learned earlier this week from The Wall Street Journal that the SEC is now having second thoughts about 4x leverage. Could it be that the Trump administration is dealing with enough controversy at the moment?)

So how do leveraged ETFs work? Essentially, they use mechanisms such as swaps, futures contracts and derivatives to provide investors with 200%, 300%, or in the case of these latest ETFs, 400% of the daily performance (either up or down) of an underlying index. The key term, however, is DAILY returns. These are products that don’t necessarily amplify returns over the long haul, rather just the returns over one trading day. Suddenly, the concept of ‘volatility drag’ enters the picture.

Suppose you put $100,000 into an unleveraged ETF. If it experiences a one-day drop of 5% and a 5% gain the next day, you actually don’t break even, you end up with $99,750 or a $250 loss (-0.25%). But what if you were holding a 4x leveraged ETF under the same scenario? You’d end up with only $96,000 or a $4,000 loss (-4.00%). And this is only after the first two days of trading. You’re actually down 16x more than an unleveraged ETF! If this see-saw pattern continues, your portfolio will continue to diminish at a dramatically accelerated rate. The results can be devastating in a very short period even though the underlying market itself may only be rangebound (as with the above example), or in some instances, actually higher.

Then, of course, there’s also the possibility that your market-direction forecast itself is entirely incorrect. If you’ve picked a leveraged ETF geared to favour an uptrending market and the market goes straight down, you can rack up even more significant losses also incredibly rapidly. In the past 10 years, the S&P 500, for example, has actually recorded a weekly decline of 3% or more 47 times, so it’s not as if meaningful short-term downturns are black swans—they occur constantly. And during the credit crisis there was even a week where the US market dropped more than 18%. Imagine how you’d fare with a 4x leveraged ETF during any of these stretches.

Understand the limits of your market-timing skills. No one can accurately time markets on a short-term basis (particularly daily), and it’s also highly unlikely that you truly have a firm grasp on future volatility. Ask yourself why you’re really purchasing these leveraged ETFs? The answer is probably pure, emotion-driven greed.

But, contrary to the teachings of Mr. Gekko, when it comes to 4x leverage, greed is not good at all.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

145 comments ↓

#1 Bendover on 05.19.17 at 6:10 pm

The Classic Car market bubble is already bursting

#2 Debtslavecreator on 05.19.17 at 6:12 pm

These leveraged ETFs should be banned
Absolute junk, predatory products that rip off 99% of the mostly amateur traders who use them. The slippage on these stupid instruments kills any chance of making money beyond a day or two but Wall Street milks these products like a cow
Great write up Doug

#3 Timmy on 05.19.17 at 6:16 pm

BC Home Prices down $100K

http://www.howestreet.com/2017/05/15/average-bc-home-down-100000-year-over-year/

#4 Timmy on 05.19.17 at 6:20 pm

New Approach to the Astronaut Phenomenon

“The first group to audit, Lesperance said, is the 40,000 would-be immigrants who have, in the past two years, renounced their permanent residence status in Canada, often to avoid taxes.”

http://vancouversun.com/opinion/columnists/douglas-todd-new-approaches-to-the-astronaut-phenomenon

#5 MW on 05.19.17 at 6:28 pm

Opioid conflict-of-interest controversy reveals extent of big pharma’s ties to doctors

Financial ties between doctors, hospitals and the pharma field are widely accepted — but rarely discussed

http://www.cbc.ca/news/health/opioid-pain-philpott-mcmaster-university-purdue-pharma-drug-industry-conflict-1.4121956

#6 I'm Not Poloz on 05.19.17 at 6:30 pm

The biggest rip-off is the 21st century modern marriage. Only Greater Fools from the Toronto area are overbidding on those plywood homes, but they blame Chinese for the real estate bubble, racist Canadians.

What next? Will female teachers who are Caucasian who sex their student, blame their Black male student for rape? In Ontario, there is a revamp of the legal system to categorize all sex as rape, excepting female teachers who sex underage students of course.

#7 Nonbuyer on 05.19.17 at 6:35 pm

#1–Really, can you elaborate? I didn’t think it ever would.

#8 Darryl on 05.19.17 at 6:35 pm

is it already Saturday?
I must have slept in late .

#9 Livin Large on 05.19.17 at 6:41 pm

So, if I have this correctly, you’re saying “stay away from highly leveraged ETFS” and instead, buy CDN Bank shares, collect and reinvest the divs while sitting on the cap gains while we wait for their splitting every 15 years or so?

#10 Long-Time Lurker on 05.19.17 at 6:45 pm

Listen to the man, Bud.

#11 Newbie_Investor on 05.19.17 at 6:50 pm

Re: the explanation about unleveraged ETFs losing money if they drop 5% and rebound 5%… Can you direct us to where that situation is fully explained? I thought ETFs on the TSX, at least, rise and fall just like any equity. Yes, as my nick says, I am totally a newbie and trying to educate myself before investing foolishly. I don’t know enough to even be sure if my watchlist has leveraged ETFs. Thanks.

#12 Once a Boss, Always a Boss on 05.19.17 at 6:55 pm

Want to know how money flows into our country so easily? Why our governments struggles with deficits?

read:

treasureislands.org

#13 Rexx Rock on 05.19.17 at 6:55 pm

Crypto currency is where its at.Invest and prosper!
http://www.zerohedge.com/news/2017-05-19/bitcoin-soars-above-1950-despite-losing-crypto-dominance

#14 Unhinged Trader on 05.19.17 at 6:56 pm

Ugh, there’s absolutely nothing worse in this world than pro sports, except for maybe hemorrhoids that weep blood.

Such a gaudy, boomer-era form of entertainment. So mindless and numb.

#15 Jeremie on 05.19.17 at 6:57 pm

Doug,

Would you be so kind as to explain why 5% down and then up would yield a loss in an unleveraged account?

#16 Dave on 05.19.17 at 7:00 pm

I don’t know who sees these Bank of Canada numbers and *doesn’t* think there’s a problem with Vancouver real estate.

https://betterdwelling.com/city/vancouver/vancouver-mortgages-are-rapidly-deteriorating-in-quality/

#17 Nero on 05.19.17 at 7:17 pm

#3 Timmy…..averages are almost meaningless….

Anyone who has been paying attention knows that prices are still creeping up over most of BC and only garbage is sitting on the market…wish it weren’t so ..but the sickness has found a host in every town.

Pass me my fiddle.

#18 greyhound on 05.19.17 at 7:31 pm

Given the tracking error of these 4x things, selling them short, especially the inverse version, looks like free money…

#19 the Jaguar on 05.19.17 at 7:32 pm

First of all, it should be acknowledged that baseball is the only professional sport in town. Yes. A game where the play moves forward. None of this back and forth crap. Tedious doesn’t describe the back and forth of hockey, football, or soccer. What an incredible bore.
In baseball there are only so many pitches and the player either strikes out, gets on base, etc. The play moves forward in an orderly way. Long ago and far away I attended many games at the old Exhibition Stadium in Toronto. The Jag served time in Toronto in the early to mid 1980’s. Garth used to be on the business page of some Toronto paper in those days…(was it the Sun?) Everyone hated George Bell, but not me. I adored him. He played his heart out every day because he loved the game. It wasn’t ‘Moneyball’ at that time. Not like today.
All of which brings me to the point that only baseball cards are worth trading. The greatest player of all time was Roberto Clemente. Others have greater statistics, but nobody can hold a candle to his humanity.
Sorry to hijack your investment agenda, Doug. Sometimes the air in the room just needs clearing…

#20 Suede on 05.19.17 at 7:43 pm

My 1989 O-Pee-Chee Premier hockey card set is going to be worth a Bitcoin fortune in the future.

Just watch.

#DiversifiedPortfolio

#21 conan on 05.19.17 at 7:45 pm

“Game-Uased Ice” – Doug

Used?

I really do not see that much difference between 3x and 4x. There are lots of esoteric products out there, and people should know that they exist. Puts and calls provide a valuable function in the markets. Otherwise, they would not be so popular.

If I manufacture a product, I can guarantee my input costs by using derivatives. I could own a Canadian NHL team and use derivatives to guarantee the value of the Canadian dollar throughout the season. Longer if I have some crazy contracts on the books.

Phaneuf……..much more then a pylon.

#22 Andy on 05.19.17 at 7:50 pm

1.05 = 5% up
0.95 = 5% down

Multiply 1.05 * 0.95 and what do you get?

#23 spaceman on 05.19.17 at 7:55 pm

That explains why my leveraged ETF went in the dumpster, and never returned when prices came back, great article, wish I knew this 10 years ago

– D.

#24 Nonplused on 05.19.17 at 7:56 pm

#11 Newbie_Investor, #15 Jeremie

It’s just how percentages are measured, it doesn’t really reflect how markets move in absolute terms.

For example, say the Vancouver housing market experiences a 50% drop and a $1.5 mill shanty is now worth $750,000. Then, the market experiences a 50% dead cat bounce. That 50% is measured against the new price of $750,000 so the shanty is now worth $1.125 mil. You need a 100% bounce to recover from a 50% drop. But it’s just a measurement thing. In absolute terms the market doesn’t tend to go down and up in neat percentages the longer trend is that it goes up more than it goes down.

Doug is right though, if you bought that shanty for $1.5 mil using 4X leverage you are wiped out even if it goes back to 1.125.

I’d rather have 4 wives than 4X leverage. You’ll go broke just as fast but at least it’s fun to watch them fight.

My margin account doesn’t allow anywhere near than leverage and they have the ability to just up and close my positions on a daily basis if something goes wrong.

#25 Robbie on 05.19.17 at 8:18 pm

5% loss on $100,000 is -$5,000. 5% gain on the balance of $95,000 is +$4,750 thus creating a loss of $250. The 5% is being applied to two different numbers.

#26 Figmund Sreud on 05.19.17 at 8:23 pm

Generally speaking, ETFs are wonderful.
_____________________

Yes, they are! But so were mutual funds in the olden days, … and so were mutual fund managers – even more so: … Midland Walwyn, Investors Group, T. Rowe Price, et al.

Anyway, … I believe that – nowadays – is also a “wonderful” time for ETFs managers, too: State Street, Black Rock, Bank of Montreal, et al. No?

Best,

F.S. – Comox, BC. [ … just musing out loud.]

#27 Waiverless on 05.19.17 at 8:30 pm

#15 Jeremie
Doug,

Would you be so kind as to explain why 5% down and then up would yield a loss in an unleveraged account?
————————————————————–

$100 * 0.95(down 5%) = $95 then
$95 * 1.05 (up 5%) = $99.75
You just lost money – same reason 30% loss in real estate doesn’t even you out a previous 30% gain. You lose money

#28 Whipster on 05.19.17 at 8:31 pm

Re #3 Timmy
Get back to us when it’s 500-700k drop. :-)
At least then it will be affordable. And example of insanity :
https://www.zolo.ca/delta-real-estate/858-51-street

Local place on its FIFTH REALTOR SINCE BUILDING AND LISTING. Prices are approximate, but :
initially 1.7
Relist at 1.9
Then 2.2
Then 1.9
Now 1.8
Nobody ever lived in it and not many have toured it. Guess they missed the boat.

#29 crowdedelevatorfartz on 05.19.17 at 8:46 pm

@#6 I’m not poloz

That soapbox you’re handstanding on……is actually an outhouse toilet……dont slip.

#30 Pete from St. Cesaire on 05.19.17 at 8:50 pm

The Classic Car market bubble is already bursting
———————————————————-
Dagnabbit, I held onto my ’81 Chevy Citation too long.

#31 Mattl on 05.19.17 at 8:51 pm

McDavid has very little to do with the explosion in memorabilia and sportscards. The growth in these assets started while McJesus was still in high school and is being driven at the high end. Same for art, high end cars, comics, etc. High end Gretz rookies are up 400% over the past decade. High end sports card as an asset class have done insanely well since 2008. Guys with money have LOTS of money and they are buying toys and lots of them. Mantle rookies are out of control.

I am a collector and have always felt that a true balanced portfolio had collectibles as part of the mix.

#32 cramar on 05.19.17 at 8:51 pm

Where can you pay $19,000 for a house in 1984 and sell for $110 million today? Not even Torana. Now THIS is hitting the jackpot! Better than hitting the jackpot even in the stock market.

http://money.cnn.com/2017/05/18/luxury/jean-michel-basquiat-untitled-painting-auction-record/

#33 Baseball is good for sleep. on 05.19.17 at 8:57 pm

Ontario plans to ease rules for pension plan funding.

https://www.theglobeandmail.com/report-on-business/ontario-eyes-new-rules-for-pension-funding/article35067299/

#34 Tony on 05.19.17 at 9:00 pm

When day trading the biggest concern is always commission if you make enough day trades. The higher the leverage of the ETF the better chance you have to make more money because it negates commission. The same is true of betting a triactor at the racetrack. You only pay tax on the one bet but the payout is more or less tripled.

#35 S.Bby on 05.19.17 at 9:04 pm

Those leveraged ETFs are WMD.

#36 Tony on 05.19.17 at 9:08 pm

Re: #1 Bendover on 05.19.17 at 6:10 pm

Yup, down about 14 percent year over year as the great unwind takes place.

#37 Tony on 05.19.17 at 9:09 pm

Seriously no one that I didn’t know couldn’t time the stock market on a daily basis up until the year 1993 or 1994.

#38 Smoking Man on 05.19.17 at 9:14 pm

Zzzzzzz

The action is watching self destruction with a good attitude.

@SmokingMan.

Got a new toy. Periscope.

#39 Pete on 05.19.17 at 9:18 pm

No offence, Doug, but your writing is pretty boring. Garth is more interesting.

#40 NoName on 05.19.17 at 9:21 pm

how to lose money 101

http://bit.ly/2rBLfp8

#PeptoBismo

#41 Tony on 05.19.17 at 9:23 pm

Re: #6 I’m Not Poloz on 05.19.17 at 6:30 pm

Its not just real estate, guess who the biggest buyer of the bitcoin was when it crossed the $1,000 mark? Coincidence?

#42 NoName on 05.19.17 at 9:25 pm

addendum to my privious post, link doest take where is suposed to… c

click the link and instead of 1 day click on 5 days chart, implosion happened yesterday, not today.

http://bit.ly/2rBLfp8

#43 Really!!! on 05.19.17 at 9:29 pm

Come on Garth! I was so excited to hear about the housing market today! And we have to read about ETF’s!!! Really , did you head to the cottage early! Come on can’t you write from the cottage! We want more about the looming crash!!! It makes my day! I have a millennial son wanting to buy his first granite filled Home in Durham! I have a nephew biting at the bit , will to pay over list in Etobicoke and Vaughan! I need your help to hold them off! Help save my hard earned diversified portfolio from future generations!!! LOL

#44 up/down on 05.19.17 at 9:29 pm

#26 Waiverless on 05.19.17 at 8:30 pm

#15 Jeremie
Doug,

Would you be so kind as to explain why 5% down and then up would yield a loss in an unleveraged account?
————————————————————–

$100 * 0.95(down 5%) = $95 then
$95 * 1.05 (up 5%) = $99.75
You just lost money – same reason 30% loss in real estate doesn’t even you out a previous 30% gain. You lose money

—–

Only if you sell.

#45 NoOneOfConsequence on 05.19.17 at 9:32 pm

Re: #19 The Jaguar / Baseball only real sport…

Oh please. Baseball ranks right up there with lawn bowling and croquet for excitement.

You couldn’t pay me to watch baseball.

#46 Myra Andrews on 05.19.17 at 9:37 pm

Today’s stats from Vancouver realtor Paul Boenisch

New 192
Price Change 53
Sold 279
TI: 8481

#47 CL on 05.19.17 at 9:49 pm

Slot machines have better odds even though they’re only a 95% payback.

#48 Waiverless on 05.19.17 at 10:05 pm

#42 up/down
#26 Waiverless on 05.19.17 at 8:30 pm
#15 Jeremie
Doug,
Would you be so kind as to explain why 5% down and then up would yield a loss in an unleveraged account?
————————————————————–
$100 * 0.95(down 5%) = $95 then
$95 * 1.05 (up 5%) = $99.75
You just lost money – same reason 30% loss in real estate doesn’t even you out a previous 30% gain. You lose money
—–
Only if you sell.
——
Depends when you bought…. or if you took a heloc out at 30% up… or if the bank says your underwater and wants some its $$$ back…
or you could not sell as you say..and wait 20 years years to get your money back… like they did in TO in the 90s

#49 Mark on 05.19.17 at 10:21 pm

“These leveraged ETFs should be banned”

I concur. And I can’t even borrow shares of them on my trading platform (Interactive Brokers) because the “pros” have already beaten me to shorting them to zero.

#50 TCContrarian on 05.19.17 at 10:21 pm

Although not quite the same, doesn’t a high-ratio mortgage come with a 20:1 leverage (5% down)? And if inventive finance ‘creates’ the 5% for down-payment, we have 100% leverage.
That’s where Home Capital Group comes in handy, I suppose – at least, it used to.

Leverage is great on the way up; almost lethal on the way down! I know this from my use of margin. I now better now…

TCC

#51 TCContrarian on 05.19.17 at 10:24 pm

“I’d rather have 4 wives than 4X leverage. You’ll go broke just as fast but at least it’s fun to watch them fight.”

————————————————————–
Quote of the day! Still laughing at this, thanks!!

#52 TurnerNation on 05.19.17 at 10:25 pm

I wish to culturally appropriate this weblog.


Green bank is desperate. Sent email, postal mail then a personal phone call – a first – with pre-approval 30k loan @ 4.99% if I move over ‘high interest debt’ (I have none).
And then a mailer offing to fix a low interest rate if I use my existing LOC.
Suckers – I have a 3% LOC elsewhere at my disposal.

#53 Son of Really!!! on 05.19.17 at 10:27 pm

The correction? The crash? Whatever you wish to call it; it’s happening.

I’ve tracked house sale prices for a while now, and I’m well over 300 homes in my spreadsheet. I have the maximum allowed favourited properties on Realtor.ca. Every time I favourite a new one, it bumps out an existing one because they’re taking so long to be removed from MLS. Three houses I was looking at sold this week below list. Another 15 listings were terminated altogether. Just this week. Of all the house sales I have entered since May 10th, 5 sold for 20% or more over asking out of the 21 properties that sold. But that’s just this past week. Things are staying longer, and selling for less. Oh and 3 of those 5 properties with the large over list selling prices were in Pickering and Ajax; the most expensive part of Durham.

There are just so many properties that get listed that we can be pickier and pickier. Single lane wide driveway? Next. Only 2 bathrooms? Yea right. No ensuite? Yikes, I’m not a caveman. 3 bedrooms that aren’t on the same floor? I want to buy a house not a condo. No room for a dining room table that seats 12? How can you even have people over?

And the list just keeps getting longer. Soon I won’t even need to look at the pictures on the inside, my judgement will begin with: does it have a 2 car garage? If yes, proceed, if no, go directly to jail.

The tides are changing, and it’s in favour of buyers.

#54 Ace Goodheart on 05.19.17 at 10:30 pm

Very interesting read as per usual. To date I still only deal with ETFS for my bond purchases (because bonds can usually only be bought in large quantities which makes it difficult to diversify them unless you have an awful lot of money).

Bonds have popped nicely with the Trump-tastrophy under way and uncertainty in Canadian housing. Commercial REITS have also come up nicely.

And starting to see the beginnings of the expected strong pull back in the Chartereds that should become a buying opportunity in early 2018.

#55 Rick Fast on 05.19.17 at 10:31 pm

Hey Doug, why can’t we just short these etfs? Over the long run it’s guaranteed profit

#56 TurnerNation on 05.19.17 at 10:36 pm

Good lord I just watched SM’s twit vid.
Well don’t try that at Trump Toronto’s ‘America’ club.
Washroom is dark with black walls and black coloured urinals (!). And their tops are sloped to the sides.
Glasses placed there slide then…smash. Attendant keeps broom at the ready.

#57 InvestorsFriend on 05.19.17 at 10:58 pm

Wither ETIFs?

The first ETFs were actually ETIFs that tracked an existing index.

later the concept was abused as ETFs that tracked totally new and made for the purpose indexes came along.

Most ETFs are not really ETIFs as was the original intent. There would not be hundreds of ETFs if they all tracked legitimate indexes.

#58 InvestorsFriend on 05.19.17 at 11:10 pm

In the beginning…

Toronto invented ETFs called HIPs and TIPs, index participation units and beat New York to the punch with these new products.

#59 Livin Large on 05.19.17 at 11:11 pm

Get a grip Lurker.
It was hyperbolic sarcasm.
You’re taking all this toooooo seriously.

Rule#1
If you don’t understand the risks in any investment or asset class…don’t get in. All leverage whether ETFS or margin account is gambling and designed to multiply a potential return and therefor subject to the balancing risk of maximizing potential loss.

#60 Newbie on 05.19.17 at 11:23 pm

The trick is to use percentage when talking about ups and downs ;) exactly what Mr. Kay is uncovering when he explains the RE boards’ “statistics”

#61 Mark Baum on 05.19.17 at 11:27 pm

Doug what is your opinion on purchasing real estate at 20x leverage into a market where debt is out of control and mortgage lenders are going bankrupt?

Thanks

#62 Waiverless on 05.19.17 at 11:58 pm

#49 TCContrarian on 05.19.17 at 10:24 pm
“I’d rather have 4 wives than 4X leverage. You’ll go broke just as fast but at least it’s fun to watch them fight.”

————————————————————–
Quote of the day! Still laughing at this, thanks!!
———————————————–
Not if they’re all on the same side fighting with you… stuff nightmares are made of…

#63 Steve French on 05.20.17 at 12:49 am

I read this story and then realised that this is where Smoking Man gets all his weird opinions from…!

http://www.rollingstone.com/politics/features/taibbi-roger-ailes-was-one-of-the-worst-americans-ever-w483013

#64 ole Doberman on 05.20.17 at 12:49 am

World record holder in the stock market, Dan Zanger, who turned 10k into 18 million in 2 years, says ETFs and mutual funds are for lazy people.

If the average joe wants to change their life and all their future generations life you gotta learn to swing trade individual stocks.

Etfs and those types of instruments are good for those with a few hundred thousand atlesst, or millions to make it worth while. Otherwise you remain an economic slave to the system.

#65 ole Doberman on 05.20.17 at 12:54 am

#41 Really!!! on 05.19.17 at 9:29 pm
Come on Garth! I was so excited to hear about the housing market today! And we have to read about ETF’s!!! Really , did you head to the cottage early! Come on can’t you write from the cottage! We want more about the looming crash!!! It makes my day! I have a millennial son wanting to buy his first granite filled Home in Durham! I have a nephew biting at the bit , will to pay over list in Etobicoke and Vaughan! I need your help to hold them off! Help save my hard earned diversified portfolio from future generations!!! LOL
————————————————————
Thank you this was my sentiment too

#66 Ponzius Pilatus on 05.20.17 at 12:54 am

#162 Ronaldo on 05.19.17 at 7:10 pm
#137 Ponzius Pilatus on 05.19.17 at 12:45 pm

#130
by the way, the “irrational actor” was Ronald Regan.
That guy scared me much more than Trump.
——————————————————————
But he got the wall torn down didn’t he? Sometimes we need people like that to get things back on track.
———————
Another comment by someone who has not studied history and is just following local news.
Gorbachev had already started Glasnost, way before Reagan came to Berlin for a staged performance.
After all he was a B movie actor.
Worst President ever, in my opinion.

#67 Ponzius Pilatus on 05.20.17 at 1:03 am

Doug,
Please don’t give up your day time job.
Blog dogs want to be entertained, not bothered with facts.
Learn from your master.
Remember you don’t sell the steak, but the sizzle.

#68 No supply due to these guys on 05.20.17 at 1:50 am

Property development not lucrative enough

http://www.cbc.ca/amp/1.4124531
Vancouver developer fined for running short-term rentals

#69 Error or saving Thier skin on 05.20.17 at 1:55 am

1.5 million dollar error

http://www.cbc.ca/beta/news/canada/british-columbia/dcl-waiver-issue-vancouver-chief-risk-officer-review-1-5-million-waiver-given-in-error-1.3891424

#70 When Will They Raise Rates? on 05.20.17 at 4:37 am

#13 Rexx Rock on 05.19.17 at 6:55 pm

Crypto currency is where its at.Invest and prosper!
http://www.zerohedge.com/news/2017-05-19/bitcoin-soars-above-1950-despite-losing-crypto-dominance
————————

To those who got in @ $10/BTC… Buy physical silver by the monster box now… Keep a small speculative position in BTC/ETH to ride the bubble/ponzi, but be aware that Bitcoin is DOA – Block size/scaling/transaction time make it unusable in commerce going forward. It’s toast.

Etherium has *unlimited* supply, Ripple is backed by banksters… Dash, Monero, etc.. are all reproducible and don’t have first to market advantage… allocate a small amount to all of these because of Herdonomics™, corrupt gov’s and central banks, dumbass asian bubble chasers, domestic idiots, and other considerations. Just know that the big $ has already been made by the early adopters, but there is still some $ to be made in the current mania phase, but it’s risky… Market cap of the big cryptos already dwarfs the silver market. ;)

When the crypto bubble pops, the last flight to safety will be the phyzzzz… Only there won’t be enough to go around -> wealth transfer from the paper/digital asset speckers to the stackers on an enormous scale. A few monster boxes will make you rich when it happens. Basic math.

#71 When Will They Raise Rates? on 05.20.17 at 5:04 am

*physical silver market cap

#72 Dan.t on 05.20.17 at 5:30 am

#59 Mark Baum on 05.19.17 at 11:27 pm
“Doug what is your opinion on purchasing real estate at 20x leverage into a market where debt is out of control and mortgage lenders are going bankrupt?”

Haha, that is no problem. Seriously, houses only ever go up so you don’t actually have to worry about massive debt or ever really paying it off.

Just buy and then in a few years become a millionaire. It is so simple really, and very little work involved.

Buy the way, if you bought within the last 4 years, you bought near the top (maybe the top and if not very near the top), but it doesn’t matter because there really is no top. Prices just go higher so don’t worry.

But with real estate it is well known in Canada that even if you have no money, you can still leverage 95-100% of the investment and be rich with virtually no risk…Go Canada Go.

That is because
-everyone in the world wants to buy 1.2 million dollar shacks in the suburbs anywhere in Canada
-Prices don’t matter to rich Chinese, they are dumb and will by everything (that is how they got super rich)
-If a rich asian investor doesn’t save you, a greater fool Canadian will buy your house anyhow, at what ever price you ask
-It is different there
-Everyone in the is parking their money in Burnaby BC and Toronto suburbs
-debt in Canada never has to be repaid.

All of this has nothing to do with banks giving out free money for 10 years to debt pigs (or the 2 trillion in Canadian debt),

or the fact that supply is low because every Canadian owns at least 2-3 houses and a couple “investment” condos,

or that, since 60% don’t know how debt and interest rates are correlated, they just follow the herd and do what everyone else tells them to do, or what real estate sponsored news tells them to do, or what HGTV tells them to do (just buy, paint kitchen, flip for cool 300k, easy).

Real estate insanity has just caused so much wrong within Canada and worst is that most don’t see it or even care….as long as that imaginary equity keeps going up, doesn’t matter.

#73 Wrk.dover on 05.20.17 at 5:45 am

Lots of spit in televised sports, but never rewound and slowed down like on porn. The future?

#74 Peter Parker on 05.20.17 at 6:44 am

))) Suppose you put $100,000 into an unleveraged ETF. If it experiences a one-day drop of 5% and a 5% gain the next day, you actually don’t break even, you end up with $99,750 or a $250 loss (-0.25)

Sure, but if it goes up 5% and then up another 5% you make $250 more. It all evens out. Only in an oscillating market will you lose money by that type of leakage. If leverage etfs truly leaked money (other than fees) , it would be free money to short them – which it isn’t.

#75 Trumpocalypse2017 on 05.20.17 at 7:14 am

Don’t let yourselves get too relaxed this long weekend.

(And don’t just take it from me!)

The Washington Post suggests global catastrophe, nuclear war, major conflict or assassination may be about to happen with Trump’s international trip:

“Now he heads to the Middle East. What could possibly go wrong?”

As he heads into “…the world’s most explosive region”

https://www.washingtonpost.com/opinions/trump-thinks-hes-under-attack-thats-very-dangerous/2017/05/18/e7af59e6-3bf9-11e7-a058-ddbb23c75d82_story.html?utm_term=.6bd41cca675f

Forget about the BBQ this weekend, folks.

Prepare, prepare, prepare.

#76 FLHTK on 05.20.17 at 7:24 am

haha, Ice from a hockey game wow! People wouldn’t want to see my Oilers stick signed by all the Oilers from 1990, back in the glory days then!!! lol. Or my Stick from Kevin Lowe. Geez, water from a game!

#77 traderJim on 05.20.17 at 7:26 am

Good article by Conrad Black on criminalizing political beliefs:
http://news.nationalpost.com/full-comment/conrad-black-the-malicious-and-dishonest-media-really-are-as-trump-says-enemies-of-the-people

In other countries they would call what’s going on a coup attempt.

#78 Darryl on 05.20.17 at 7:32 am

#40 NoName on 05.19.17 at 9:25 pm
addendum to my privious post, link doest take where is suposed to… c

click the link and instead of 1 day click on 5 days chart, implosion happened yesterday, not today.
http://bit.ly/2rBLfp8
————————————————————-

An optimist would say it’s in an upward trend on the one year .
Look at the five year . Timberrrrrr………

#79 jess on 05.20.17 at 8:10 am

leakers

KPMG Fires Partners Over Leak of Audit Regulator’s Confidential Plan
Big Four accounting firm improperly received information about which audits PCAOB planned to review

Dave Michaels and Michael Rapoport at the WSJ got a scoop last week that five partners and another audit employee at KPMG had been fired, including a Vice Chairman who is was the top US audit partner and the former national managing partner for audit quality and professional practice.

KPMG Fires Partners Over Leak of Audit Regulator’s Confidential Plan
Big Four accounting firm improperly received information about which audits PCAOB planned to review
By Dave Michaels and Michael Rapoport
Updated April 11, 2017 10:51 p.m. ET

Five KPMG LLP partners, including the head of its audit practice, were fired after the Big Four accounting firm improperly obtained information about which audits its regulator planned to inspect, the company said.

The PCAOB also fired one employee who media reports said was allegedly the leaker.
http://retheauditors.com/2017/04/17/kpmg-takes-its-turn-with-a-big-4-sized-scandal/

=================
Order in Fed Leak Case Against Goldman

The Federal Reserve forced Goldman Sachs to pay a $36.3 million penalty, escalating a long-running investigation into a 2014 leak of confidential government information. AUG. 3, 2016

KPMG and the Precedents for Possible Punishment
By Francine • Apr 23rd, 2017 • Category: The Case Against The Auditors

#80 Smoking Man on 05.20.17 at 8:22 am

#61 Steve French on 05.20.17 at 12:49 am
I read this story and then realised that this is where Smoking Man gets all his weird opinions from…!

http://www.rollingstone.com/politics/features/taibbi-roger-ailes-was-one-of-the-worst-americans-ever-w483013
…..

Rolling Stone magazine is only good for one thing now days. Plan b when you run out of toilet paper.

Gone are the days of truth justis and Hunter S Thompson.

#81 Bond Junkie on 05.20.17 at 8:42 am

Early post, opening the cottage this weekend Doug?

-Bj

#82 Sir James on 05.20.17 at 10:18 am

#68 When Will They Raise Rates?

Bitcoin was not created for day to day transactions, it was designed to be a long term store or value or the reserve currency of the internet used to back other cryptos, like gold was used to back fiat.

#83 Sir James on 05.20.17 at 10:20 am

#68 When Will They Raise Rates?

Bitcoin was not created for day to day transactions, it was designed to be a long term store of value or the reserve currency of the internet used to back other cryptos, like gold was used to back fiat.

#84 TrumpForTheAges on 05.20.17 at 10:43 am

I guess Americans and Canadians are more similar than we necessarily appreciate? Although Garth only seems concerned when it supports his narrative?

http://www.marketwatch.com/amp/story/guid/3ED3F85E-3CA3-11E7-911B-74EEBDF756B0

#85 Doug in London on 05.20.17 at 10:46 am

So these leveraged ETFs will go up more than unleveraged ETFs when the market goes up. Why weren’t they being offered in early 2009 when stocks were on sale and there was the greatest upside potential?

#86 crowdedelevatorfartz on 05.20.17 at 10:57 am

@#79 Bond Junkie

“Early post, opening the cottage this weekend Doug?”
******

Nah.
He’s detailing and waxing the Porsche

#87 westcdn on 05.20.17 at 11:11 am

I made the other half on Friday. I am whole again. Yet I am respectful, stay with good advisors. You will have headache with me.

#88 AK on 05.20.17 at 11:24 am

“But, contrary to the teachings of Mr. Gekko, when it comes to 4x leverage, greed is not good at all.”
——————————————————————-
When Mr. Gekkos’s name is mentioned, “Greed is always good”.

#89 economictsunami on 05.20.17 at 11:35 am

All markets are priced to perfection;

except real estate…

One country is dominating US home sales to foreign buyers

http://www.businessinsider.com/canada-is-dominating-us-home-sales-to-foreign-buyers-2017-5

#90 Stock Picker on 05.20.17 at 11:47 am

Doug, without risk there would be no market. Thank God we don’t live in a nanny state. 10 X’s ETFs are fine with me.

#91 traderJim on 05.20.17 at 12:10 pm

#73 Trumpocalypse

I suppose if you predict nuclear annihilation every week for the next 200 years you might be right once, although I doubt it.

Thing is, if you are ever correct (you won’t be), then no one will be around to know it.

Kind of a no-win proposition.

That’s the opposite of Trump’s approach, which is to try to get into as many can’t lose situations as possible.

For example, try to take dramatic steps to improve security, which the opposition is forced to vocally and hysterically oppose.

That’s a no-lose situation for Trump: If there are no terror attacks during his term he takes credit (regardless if deserved or not).

If there are terrorist attacks he blames his opposition for not letting him ‘build the wall’.

He’s revolutionizing politics in front of our eyes.

I’m not sure it’s a good thing at all…but it sure is entertaining and fascinating.

#92 dontcallmeshirley on 05.20.17 at 12:10 pm

Doug,

Marty Armstrong says when ETF liquidity > underlying asset liquidity there will be a “problem”.

Armstrong isn’t part of the wealth management fraternity any longer. Do you agree with him?

#93 Doug Rowat on 05.20.17 at 12:29 pm

#2 Debtslavecreator on 05.19.17 at 6:12 pm

These leveraged ETFs should be banned
Absolute junk, predatory products that rip off 99% of the mostly amateur traders who use them. The slippage on these stupid instruments kills any chance of making money beyond a day or two but Wall Street milks these products like a cow
Great write up Doug

I could have added that you pay handsomely for the leverage as well. 2-3x the MERs of unleveraged ETFs.

–Doug

#94 Doug Rowat on 05.20.17 at 12:33 pm

#11 Newbie_Investor on 05.19.17 at 6:50 pm

Re: the explanation about unleveraged ETFs losing money if they drop 5% and rebound 5%… Can you direct us to where that situation is fully explained? Yes, as my nick says, I am totally a newbie and trying to educate myself before investing foolishly.

Don’t even be curious. You know what that did to the cat.

–Doug

#95 David McDonald on 05.20.17 at 12:40 pm

It’s true 5% down followed by 5% up leaves a loss. However some factor that drove markets down 5% when dismissed and discounted should drive markets back up
(1/0.95) times 100%; i.e. roughly 5.21% back to the original price. I emphasize should because this is a question of market psychology. Do buyers value an asset the same after receiving an erroneous signal that causes a 5% drop. Maybe not.

#96 Doug Rowat on 05.20.17 at 1:33 pm

#74 FLHTK on 05.20.17 at 7:24 am

haha, Ice from a hockey game wow! People wouldn’t want to see my Oilers stick signed by all the Oilers from 1990, back in the glory days then!!! lol. Or my Stick from Kevin Lowe. Geez, water from a game!

The stick is a real collectible. I guess buyers of the ‘ice’ are hoping they might actually get some McDavid ‘spit’. But then how would they know?

–Doug

#97 oopswediditagain on 05.20.17 at 1:34 pm

#87 economictsunami

Great catch. All those poor Canadians in Vancouver and Toronto, at the mercy of Chinese buyers. Wow, it’s time to take off your blinders, bulls.

One of the dangerous side effects of this bubble is the homeowner’s extraction of equity (heloc) to purchase more property.

Interestingly enough, Canadians are the new Chinese in the U.S.A, dominating foreign purchases of real estate in 5 cities.

Notably, 3 of those cities could be called B.C. purchases and the other 2 Ontario?

I know, I know, just because Vancouver and Toronto have the highest house prices doesn’t discount the possibility of other speculators from other regions.

It’s interesting the things we buy when we think we’re rich. The bears had better be wrong about this crash.

#98 RW_Z on 05.20.17 at 1:36 pm

Odd writeup. The fact that 5% down followed by 5% up doesn’t balance out has nothing to do with leveraged ETFs. The point just seems to be that you lose more on leveraged ETFs when you lose… which is obvious enough.

The author doesn’t explain how you can be down when the market is higher.

#99 jess on 05.20.17 at 1:52 pm

new century ?

May 12, 2017
Lawyer with Responsibility for Mortgage Crisis Appointed to Take Care of Mortgage Banks

Trump appointed Craig S. Phillips, who contributed to the 2008 financial crisis at Morgan Stanley, to take care of FannieMae and FreddieMac, explains white collar criminologist Bill Black
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=19073

Thursday, February 11, 2016
Morgan Stanley Agrees to Pay $2.6 Billion Penalty in Connection with Its Sale of Residential Mortgage Backed Securities

Man Trump Named to Fix Mortgage Markets Figured in Infamous Financial Crisis Episode

Former Morgan Stanley banker once dumped “shitbag” CDOs on clients
Phillips headed a division that sold billions of dollars of mortgage-backed investments to Fannie and Freddie. Many of those investments were as bad as the ones his unit sold to the Chinese.
One Morgan Stanley due diligence officer, Pamela Barrow, joked in an email about how to go after borrowers.
“We should call all their mommas,” Barrow wrote. “Betcha that would get some of them good old boys to pay that house bill.”
http://www.rollingstone.com/politics/news/taibbi-trump-named-craig-phillips-to-fix-wall-street-w479332
https://www.bloomberg.com/news/articles/2014-12-30/morgan-stanley-said-to-near-mortgage-bond-accord-with-u-s-1-
The Man in Charge of Fixing Fannie and Freddie Knows Them All Too Well
Before he was a Treasury official, Craig S. Phillips ran Morgan Stanley’s anything-goes mortgage operation.
By GRETCHEN MORGENSON April 7, 2017nytimes

#100 jess on 05.20.17 at 1:53 pm

2001
http://www.prnewswire.com/news-releases/new-century-announces-the-completion-of-the-ocwen-transaction-ocwen-federal-bank-fsb-purchased-new-centurys-servicing-rights-82308247.html

CFPB sues Ocwen Financial over unfair mortgage practices

http://www.housingwire.com/articles/39932-heres-a-detailed-breakdown-of-ocwens-new-restrictions-by-state
==============================
KPMG was the original auditor of Fannie Mae before fraud, financial restatements and a lawsuit forced it out.
http://retheauditors.com/2007/03/14/new-century-financial-its-kpmg-again/
“McKenna first reported on poor disclosures at a KPMG audited company in 2007. That company was New Century. It hadn’t disclosed anything about repurchase risk in earlier filings with the Securities and Exchange Commission. But, suddenly, it was revealing that banks were demanding that it buy back mortgages it had sold. If all the mortgages were put back to the company, New Century said it would be on the hook for $8.4 billion.”
http://retheauditors.com/2017/04/17/kpmg-takes-its-turn-with-a-big-4-sized-scandal/

#101 Long-Time Lurker on 05.20.17 at 2:29 pm

#57 Livin Large on 05.19.17 at 11:11 pm
Get a grip Lurker.

LTL:
Sorry, Living Large, that wasn’t directed at you. My apologies. I just thought it would be funny to make a reference to the movie.

Now here’s something interesting. For the record, Constitutional Law Professor Alan Deshowitz on the current Trump fiasco:

Constitutional Law Professor Alan Dershowitz Destroys The Left’s Russian Narrative BS

http://investmentwatchblog.com/constitutional-law-professor-alan-dershowitz-destroys-the-lefts-russian-narrative-bs/

#102 Mauro on 05.20.17 at 2:49 pm

Stock bubble
Car bubble
Real estate bubble
Bond bubble
Retail mall bubble
ETF bubble

Bubbles for a decade yet no implosion. Maybe everything is just fine. Try writing a blog with a positivr spin. Otherwise you’re just convincing ppl not to buy anything and miss out

#103 espressobob on 05.20.17 at 2:59 pm

A balanced portfolio with say 100k invested making only 5% annual, would actually be worth over 170k in ten years. That’s the power of compounding.

Taking a hit with speculative ETFs is like being drawn and quartered.

#104 Doug Rowat on 05.20.17 at 3:09 pm

#96 RW_Z on 05.20.17 at 1:36 pm

Odd writeup. The fact that 5% down followed by 5% up doesn’t balance out has nothing to do with leveraged ETFs. The point just seems to be that you lose more on leveraged ETFs when you lose… which is obvious enough.

The author doesn’t explain how you can be down when the market is higher.

Of course it has nothing to do with leveraged ETFs that’s why I noted in the example ‘unleveraged’. The point is that the downside risk can be far more than 4x in certain market conditions. Many investors aren’t aware of this.

And trust me, you could can lose substantial coin with leveraged ETFs in an up-market if volatility is high, but it’s a blog post not a white paper.

–Doug

#105 Long-Time Lurker on 05.20.17 at 3:26 pm

For the record: That’s Alan Dershowitz originally on Fox News.

Now here’s something interesting. For the record, Constitutional Law Professor Alan Deshowitz on the current Trump fiasco:

Constitutional Law Professor Alan Dershowitz Destroys The Left’s Russian Narrative BS

http://investmentwatchblog.com/constitutional-law-professor-alan-dershowitz-destroys-the-lefts-russian-narrative-bs/

#106 NoName on 05.20.17 at 3:59 pm

I tried to dispos some of my garbage earlier this morning today, noone wanted it.

I went to city dump to dispos of it and dump dude told me we cant take tires on rims. so i went to private dump, dude took it and when he sow much tread was on them gues what he helped me unloading them.
So i was nice i threw in deep will nuts and locking nuts with “key”. was he ever happy.

talking about garbage, this was IN thing few yrs back
http://nycgarbage.com/

#107 Game with people's lives on 05.20.17 at 4:39 pm

1 in 3 chances we might go bust but players still toot affordability? Players need to stop looking out for only profits.

http://www.cbc.ca/news/business/goldman-sachs-house-prices-1.4119982

#108 Mark Baum on 05.20.17 at 4:40 pm

#70 Dan.t on 05.20.17 at 5:30 am

Sounds like you would rate it a strong buy!

#109 espressobob on 05.20.17 at 5:10 pm

Physical metals are another bet on nothing profitable and a drag long term on returns. Anyone who has played this game long enough knows the solution is to own the major indices. They already own the producers and miners of these underlying assets with way more upside in relation to their underlying commodity.

Skip the bs.

#110 TurnerNation on 05.20.17 at 5:24 pm

A quick glance at the headlines show a stratifying Toronto in decay. But we are politically correct and you can get hitched to your horse if you want to, and live in a million dollar house.

NO FUN ALLOWED:

Cool places to eat cannot rent:

https://beta.theglobeandmail.com/news/toronto/rising-rent-is-starving-torontos-restaurateurs/article35061520/

Live music venues closing for condos etc:

https://nowtoronto.com/music/torontos-vanishing-music-venues/

https://www.thestar.com/entertainment/music/2017/02/03/is-toronto-facing-a-live-music-crisis.html

Nimbys and Lefties and other Stridents
take the fun out of kid’s playgrounds:

https://beta.theglobeandmail.com/news/toronto/what-happens-when-toronto-takes-the-play-out-of-playground/article35065670/

#111 Smoking Man on 05.20.17 at 5:37 pm

Lock and load on equities Tuesday Morning.

#SethRich trending being suppressed by twitter right now.

Kim Dotcom to release proof murdered Seth Rich was the DNC leaker, not the Russians.

Trump Bump 2.0

#112 The Technical Analyst, CSTA, CPD on 05.20.17 at 5:47 pm

#81 Sir James on 05.20.17 at 10:20 am
#68 When Will They Raise Rates?
“Bitcoin was not created for day to day transactions…”

Bitcoin (BTC) is now used to GO AROUND a countries capital controls to move money around illegally. 98% of BTC transactions are occurring in China as China has some of the most stringent capital controls in the world. Thus the outflows of money from China into other areas of the world.

BTC is (again) up for IPO review, the 3rd time. (the other 2 times it has been declined).

If you ever want to know what is really happening in the Chinese markets or with investment/outflows, look to BTC, but never buy it unless you like x3 leverage-like risks.

#113 Doug Rowat on 05.20.17 at 6:18 pm

#100 Mauro on 05.20.17 at 2:49 pm

Stock bubble
Car bubble
Real estate bubble
Bond bubble
Retail mall bubble
ETF bubble

Bubbles for a decade yet no implosion. Maybe everything is just fine. Try writing a blog with a positivr spin. Otherwise you’re just convincing ppl not to buy anything and miss out

Leveraged ETFs are not a bubble, they’re just dangerous–in any kind of market.

–Doug

#114 Fish on 05.20.17 at 6:25 pm

Never ever show your teeth

#115 Gentle ,Loving Kindness on 05.20.17 at 6:28 pm

BRZU.N, Buy call $25.00 strike at $9.50 for Sept 15/17. This will give leverage on the Leveraged ETF. This went down out of trend due to a political scandal in Brazil, and it will rally back, and reward this “investment “as a three banger minimum.

#116 NoName on 05.20.17 at 7:38 pm

#113 Gentle ,Loving Kindness on 05.20.17 at 6:28 pm

BRZU.N, Buy call $25.00 strike at $9.50 for Sept 15/17. This will give leverage on the Leveraged ETF. This went down out of trend due to a political scandal in Brazil, and it will rally back, and reward this “investment “as a three banger minimum.

—-

@113
yes, you can hope that dead cat will bounce bit more, and that option seems bit pricy for duration but my water account is dormant for some time now so i can’t acces it and cheq the rest. volatility for short option is there and alure of easy money on that trade is very tempting i have to admit.

but no tnx to many people are thinking a same. When everione is thinking same noone is actualy thinking…

#117 AB Boxster on 05.20.17 at 7:53 pm

#68 When Will They Raise Rates?

———————
Everyone should have some physical metal as a hedge.
Any wonder why the Chinese and the Russians are buying up huge amounts of gold while US and Canada have no reserves left?

The Russians and Chinese are setting up trade arrangements around currency based upon a gold standard, looking to eventually bypass the US dollar as reserve currency.

So what would be the concern if the USD was no longer the world’s reserve currency and was replaced by another currency backed by gold?

You don’t want to know.

But I’m sure it will all work out fine.

We have our top economists telling us not to worry.
Low rates are good.
Ridiculous housing prices are fine.
Deficits are no problem.
Massive public and personal debt is ok.
Low growth is great.
High taxes are good for everyone.

War is peace. Freedom is slavery. Ignorance is strength.

#118 Ronaldo on 05.20.17 at 8:21 pm

Speaking of the Canadian collectible cards, I recently asked my 45 year old son if he would be interested in obtaining his hockey, baseball and football collection from 1979 to 1985. He says, ”you have them”, I said, “Yep I do”. “I’ll gladly take them”, he says. So boxed them up and shipped them off. There were several hundred of each. All in acid free wrap and stored away for the last 27 years since he left home. I get a call a couple weeks later. He’s gone through all of them and says that several of them are worth in the hundreds of dollars. Wished I’d saved my collection from the 50’s. My granddaughter will reap the benefits I expect. Part of her education fund.

#119 Deplorable Dude on 05.20.17 at 9:09 pm

#109 Smoking man…..Kim Dotcom to release proof murdered Seth Rich was the DNC leaker, not the Russians.

——

Believe it when I see it. That 400lb hacker is all hot air. He supposedly had Clintons deleted emails but that was a bunch of crap…

Meanwhile the Trumpster is having an amazing diplomatic trip in Saudi…..and the MSN is barely covering it….

#120 OttawaMike on 05.20.17 at 9:30 pm

Garthman Sachs warns of CAD housing bust:

http://www.cbc.ca/news/business/goldman-sachs-house-prices-1.4119982

#121 Smoking Man on 05.20.17 at 10:37 pm

Doug doing a double shift on the long week end.

Ice cream sales at the forks must be on fire.

#122 Tony on 05.20.17 at 10:42 pm

Re: #2 Debtslavecreator on 05.19.17 at 6:12 pm

On a day when the stock market indexes get pummeled downward you absolutely want to be long something like NUGT if you day trade. The last thing you want to day trade is a gold stock since the market direction will pull down all shares including gold shares.

#123 Doug Rowat on 05.20.17 at 10:42 pm

#116 Ronaldo on 05.20.17 at 8:21 pm

Speaking of the Canadian collectible cards, I recently asked my 45 year old son if he would be interested in obtaining his hockey, baseball and football collection from 1979 to 1985. He says, ”you have them”, I said, “Yep I do”. “I’ll gladly take them”, he says. So boxed them up and shipped them off. There were several hundred of each. All in acid free wrap and stored away for the last 27 years since he left home. I get a call a couple weeks later. He’s gone through all of them and says that several of them are worth in the hundreds of dollars. Wished I’d saved my collection from the 50’s.

At the large Toronto sports card show a few weeks ago a dealer was asking $130,000 for a Bobby Orr rookie card. Such is life. We don’t know these things.

–Doug

#124 Smoking Man on 05.20.17 at 10:44 pm

#117 Deplorable Dude on 05.20.17 at 9:09 pm
#109 Smoking man…..Kim Dotcom to release proof murdered Seth Rich was the DNC leaker, not the Russians.

——

Believe it when I see it. That 400lb hacker is all hot air. He supposedly had Clintons deleted emails but that was a bunch of crap…

Meanwhile the Trumpster is having an amazing diplomatic trip in Saudi…..and the MSN is barely covering it….
…..

MSM lost me when they never questioned building 7
That was 15 years ago.

Seems I’m not alone.

https://youtu.be/KpqPgU_4V4I

Smoking Man
PhD Herdonomics
Last of Gonzo the Journalist.

#125 Smoking Man on 05.20.17 at 11:12 pm

If you can read between the lines of hunters clip my last post. If huter was around today. He be a Deplorable. So much book food today.

He’s probably pissed he was murdered.

Well I’m Smoking Man’s Ghost.

#126 Smoking Man on 05.20.17 at 11:37 pm

Phones plugged in. Battary under fast charge is sinking fast.

The reason I disclosed my real name.
I have no intentions of offing myself.

But the machine, Zumanga is really pissed at me.

It wasent suiside…..

My regular email buddy’s vanished once I posted my real name.

No patsy for you…….

Ucc bitch. …

The power of a mind reader and a Dr of Herdonomics.

What’s your plan B basterds.

#127 Gentle ,Loving Kindness on 05.21.17 at 12:03 am

#114 NoName on 05.20.17 at 7:38 pm

#113 Gentle ,Loving Kindness on 05.20.17 at 6:28 pm
BRZU.N, Buy call $25.00 strike at $9.50 for Sept 15/17. This will give leverage on the Leveraged ETF. This went down out of trend due to a political scandal in Brazil, and it will rally back, and reward this “investment “as a three banger minimum.
—-
@113
yes, you can hope that dead cat will bounce bit more, and that option seems bit pricy for duration but my water account is dormant for some time now so i can’t acces it and cheq the rest. volatility for short option is there and alure of easy money on that trade is very tempting i have to admit.
but no tnx to many people are thinking a same. When everione is thinking same no one is actualy thinking

————————————-
I guess that’s why there is a market. I admit, I am probably outgunned on this one. I recorded it as a paper trade only, because I am trying to teach myself options. By using long-term trend lines and weekly candlesticks, I look for anomalies that occur well outside the current trend. So, it is out of its “normal cortex”. I then try to buy slightly in the money close to the bottom of the fall after “green shoots “are forming. I will make about 100-300 of these paper trades over the course of about 1 year, and then review the data to develop my expected return. The whole thing may not be worth the effort, but then again, it may

#128 vee.to on 05.21.17 at 12:35 am

vee.to – Vanguard Emerging markets ETF
mer- 0.25%
5 yr average- 9.85%

RBC Emerging Markets Equity D
mer- 1.48%
5 yr average- 13.39%

not even close

#129 westcdn on 05.21.17 at 12:44 am

My father bought a quarter section just outside of Dawsan City in BC. His pal, Stan, spotted it while flying clients to his camp. He was an outfitter and bush pilot. The section had plenty of trees and dear old dad took up horse falling. I started visiting him again with my daughters. He would deliver the wood to a nearby pulp mill. It was a long drive from Calgary. I laughed when he told me I was the only one he borrowed from to dig a well. He paid it back as I knew he would when he sold the property.

Stan supplied the horses and a D9 cat as well as a large white dog called Obie. Stan used him as a pack dog to carry client kills. One day I was walking the quarter section with Obie to get the lay of the land. We came to a crop of trees and he refused to follow me and started growling at me. I gave up and followed him back to the house. I told my father the story and he said Obie was badly mauled by a grizzly. He was defending Stan’s sons and it took Stan a minute to grab a rifle and shoot the bear – WTF!

Stan was funny and dyslectic. His was a cash business. One day, thieves hauled his safe out of the wall of his cabin. We are talking about a major place. So he took to putting the cash in his ceiling. The CRA turned up one day to question him. He looked up at the ceiling on a question and could see dollar bills through the rafters. Oh please don’t look up ‘cause I going to have lots of explaining to do.

#130 Penny Henny on 05.21.17 at 8:37 am

#120 OttawaMike on 05.20.17 at 9:30 pm
Garthman Sachs warns of CAD housing bust:

http://www.cbc.ca/news/business/goldman-sachs-house-prices-1.4119982

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

The article goes on to state that a 5% drop in price would qualify as a bust.
Whoop. Dee. Do.

#131 The other Doug, in London on 05.21.17 at 9:57 am

@Ronaldo, post #118:
Yes, when you have something like collectable cards that potential buyers are willing to pay a premium price for, it’s time to sell them and cash in your winning lottery ticket(s). Just like overpriced houses in Toronto and Vancouver areas.

#132 jess on 05.21.17 at 10:27 am

The law stipulated that such trades should be “pushed out” to uninsured affiliates, thereby forcing the firms to assume the risk themselves.

origins
https://harpers.org/archive/2015/04/saving-the-whale-again/

Glass-Steagall unleashed acquisition spree that made the biggest banks bigger and bigger. Read our Fact Sheet here: http://ow.ly/PKbb30bSyrn

http://www.bettermarkets.com/sites/default/files/Fact%20Sheet%20Glass-Steagall%205-3-17%20FINAL.pdf

Why talk about Bombardier..,
“The U.S. market is the most open in the world, but we must take action if our rules are being broken,” U.S. Commerce Secretary Wilbur Ross said in a statement after the hearing began.”

America tarp SUBSIDIES
https://projects.propublica.org/bailout/list

Ocwen Loan Servicing, LLC Mortgage Servicer Fla. given $3,579,140,400
net outstanding -$3,579,140,400

#133 A Reply to #21 conan on 05.21.17 at 10:36 am

“Puts and calls provide a valuable function in the markets. Otherwise, they would not be so popular.”

Years ago I read in the Times Colonist about Warren Buffett writing (selling) puts each week during the 2008 financial crisis so as to purchase shares in the BNSF Railway at a strike price he was willing to pay.

Buffett wrote/sold millions of one-week puts each week during the crisis, and if the BNSF share price rose, the put options expired worthless and he pocketed the put premiums as pure profit; but if the share price fell to or below the strike price, he happily purchased the BNSF shares (at the strike price). The following week he lowered the strike price if the BNSF share price had fallen the previous week. So he didn’t know if the share price was going to rise or fall during the crisis, but he was bound and determined to make profit either way. (Sheer genius.)

So much of one’s education can be gleaned from newspapers.

#134 jess on 05.21.17 at 10:53 am

http://subsidytracker.goodjobsfirst.org/prog.php?parent=boeing

by Kasia Tarczynska

March 2017

More than half of the nation’s 50 biggest cities and counties still fail to disclose online even the names of the companies receiving property tax abatements or other costly economic development incentives

http://www.goodjobsfirst.org/sites/default/files/docs/pdfs/showusthelocalsubsidies2_prrel_0.pdf

Discover Which Corporations are the Biggest Regulatory Violators Throughout the United States

http://www.goodjobsfirst.org/violation-tracker

http://violationtracker.goodjobsfirst.org/prog.php?parent=citigroup

#135 NoName on 05.21.17 at 10:53 am

#127 Gentle ,Loving Kindness on 05.21.17 at 12:03 am

There is a book it’s very “fat” and lots of math and formulas and charts to evaluate option pricing, time value volotiliti beta gama and all other greeks …, and explain strategys can’t remember title, you’ll need that book, I never had it but two people that I know and worked with do have it was around 80 on amazon.
My problem was I never had “enough” money to trade “right way” so fees were killing me, i was so pissed with fees and life was getting very complicated in a hurry at the same time that I couldn’t think straight, so I just have shelf it, and apply balanced approach so I can focus on more important things at the time.

Dude I worked with was probably smartest person I ever met, he had brain and self control, (opposite of me), he was Jedi Knight of options trading.

What I am saying get a “that” book and Good Luck to you!

#136 OttawaMike on 05.21.17 at 11:12 am

#130 Penny Henny on 05.21.17 at 8:37 am

If you read it closely, it does say that 5% is just the start but yeah I am with you — anybody who sat this boom out is a Greater fool. There is still plenty of bubble left to inflate in the GTA.

#137 maxx on 05.21.17 at 12:03 pm

“New Approach to the Astronaut Phenomenon”

Silly word mangler should try another descriptor. This one’s an insult to the space effort.

#138 Doug Rowat on 05.21.17 at 12:33 pm

#128 vee.to on 05.21.17 at 12:35 am

vee.to – Vanguard Emerging markets ETF
mer- 0.25%
5 yr average- 9.85%

RBC Emerging Markets Equity D
mer- 1.48%
5 yr average- 13.39%

not even close

The exception not the rule. In aggregate, mutual funds are a waste of time.

–Doug

#139 traderJim on 05.21.17 at 12:55 pm

#105 Long Time Lurker

That Dershowitz clip is very informative, I hope not too many “Trump will be impeached” true believers see it, it would really ruin their long weekend.

(And Dershowitz being anti-Trump and an avowed Hillary supporter might really cause some cognitive dissonance headaches.)

#140 crowdedelevatorfartz on 05.21.17 at 1:25 pm

@#129 westcdn
“Stan was funny and dyslectic….”

******

No, you’re dyslexic AND much funnier than Stan….

Those homespun stories never cease to amaze, mystify and confuse me.

#141 firaihuck on 05.21.17 at 1:53 pm

Hey Dougie, what’s an Eddie Shack hockey card worth these days?

#142 Sir James on 05.21.17 at 2:44 pm

#112 The Technical Analyst, CSTA, CPD

Bitcoin like cash is traceable. There are other day to day cryptos that would likely be a preferred choice of the criminals you mention.

#143 april on 05.21.17 at 2:48 pm

Just spoke to a Van realtor, Ian Watts… just sold his “Principle residence” sees a ” correction looming”.

#144 traderJim on 05.21.17 at 4:53 pm

Still watching “Toronto, ON” on realtor.ca and I see the total listings number climbing, but at a snail’s pace.

Now at 14,258. A week ago it was 13,568.

So what’s going on? If you set the ‘listed since’ date to a week ago it shows 5,163 ‘new’ listings, yet the total listings has only gone up by about 700.

So it seems to me that either a LOT of houses are selling, going off the market, or the ‘new’ listings are merely old listings with price changes or whatever.

Maybe the sellers hoping to win the lottery are already giving up?

#145 Happy Housing Crash Everyone! on 05.21.17 at 5:08 pm

Fraud is huge in the
https://twitter.com/VanmalaS/status/860245668723666946