Be a man

So it’s been a while since we mailbagged it. Here are a few of the questions I receive that don’t involve telling me what to do with myself.

“I’ve been fan and avid reader of yours for several years now. I’ve even taken some of your advice,” says Matt, with the obligatory suck-up. “However, there is one piece I struggle with. On Friday you again alluded to it being time to lock in the mortgage. Right now our variable capped rate is 2.2%. We’re halfway through a 5 year term with $355k owing (bought for $431k in 2014).

The credit union here in Manitoba is offering a five-year fixed rate of 2.5%. So it would cost us around $1k/yr in extra interest to lock in now. I’m not convinced it’s worth it. The ‘lock in now’ alarm has been sounding forever. By going variable against popular advice on our first house in 2008, I calculate we avoided paying thousands in interest (it was a very cheap house).

Anyways, I would appreciate any advice or slander you can offer. Enjoy the sunshine and ice cream. My wife and I are off to Costco now to load up on savings…

What Matt may not realize is that 2017 is not 2008. Back then rates were plunging in order to keep the lights on. By the end of this week we will have had three Fed increases in six months, while the odds of a Bank of Canada hike took a leap forward on the latest jobs stats. As warnings about our insane debt levels become  more shrill, markets are factoring in a gradual and sustained rise in the cost of money. The party, dude, is over.

Besides, the difference between 2.2%, with the potential for an increase within a few months, and 2.5% locked for years, is minimal. Moreover, if you ask [email protected] sweetly, she’ll probably lower the fiver to 2.4%. This could be the cheapest insurance you ever bought. Finally, if you’re going to be cheap and capricious, take the extra monthly dollars, invest them inside your TFSA and use the proceeds to pay down the mortgage principal upon renewal.

Costco’s full of tacky crap from China, Matt. Stay home and wash your Kia, instead.

Here’s Mike, who says: “I was recently put onto your blog by one of my friends, and I have to say I have been reading it daily and loving it (not to mention the comments). I am also now following you on Twitter.” Okay, Mike. You may proceed now.

I have a question about Guelph, that I was hoping you might answer pro bono, if you aren’t offended by the proposition. I’m a lawyer, and understand this would not be official advice and would be for education purposes only. I want to purchase a condo downtown Guelph for my own use. Looking for a 2-bedroom, and they are rather pricey at the moment (tough to get under 500). Do you expect the Guelph area to follow the same trend as Toronto (price decline), and if so, can you suggest a window where a buyer might seriously consider a purchase.

I would appreciate any gut feelings you have on the time frame and the area. I understand nobody has a crystal ball.

Pro bono, Without prejudice. Unofficial and for education purposes only. Got it. My hourly rate is better than yours and, naturally, the advice is always judicious, and salacious. So, no, you should not buy a condo in Guelph. Not yet.

The commutershed cities – even distant Guelph – were jacked in the last year by the GTA frenzy and it will take months more for this to wear off. Face it – half a million to live in a box in a city 95 kilometres from utopia, with desperate, clogged Milton and Mississauga to crawl through on the way – is nuts. Wait until next year and you’ll do much better. And when you do buy, get a real house. With dirt. There’s a reason people move to smaller centres like the Royal City, and it ain’t to live in an apartment overlooking the Speed River and a bunch of messy students.

And now, Trevor, who comes here to flaunt his gold-plated government pension.

“I’ll save the spiel about how much I enjoy your blog and all the pictures of dogs, so I can get right into it,” he begins, unwisely.

I’m 28 and I recently began a position within the Ontario Public Sector, and with that comes the opportunity of earning a pension (yes, I’m the scorn of all evil!). So while I’ve taken your advice to balance my TFSA portfolio at a 60/40 ratio thus far, should the fact that I will now be paying and (hopefully) receiving a pension in 30+ years time, mean I should adjust my balanced portfolio to become a little more unbalanced? Say, a 70/30 or an 80/20 split?

This question comes from the fact that if a pension will be there for me in 30 years, won’t this help my overall portfolio by keeping a stable amount of income down the road? Meaning, there’s room to increase volatility because of the pension and my age? Or am I just fusing words together into makeshift sentences while making no sense at all?

A fair question, Trev, that I hear often. The answer is no.

First, there’s zero guarantee you’ll be working for the government for the next three decades. Things change. Lives twist. Even public sector jobs disappear – the odds of which are growing as politicians find it impossible to balance the books. Defined benefit pensions are so incredibly at odds with the way most people have to fund their retirements that, at some point,  they will be in danger of reform.

Second, a 60-40 portfolio with a fixed-income component is designed to reduce volatility as a defense against human nature. People always want to buy high (chasing hot assets, for greater profits) and sell low (when losses make them fear greater losses). With a balanced portfolio the odds are if equities dip for a while, the safe stuff will bail you out. For example, where Brexit happened stocks lost 6% in a couple of days but people with a balanced portfolio saw only a 1% temporary decline, since bonds bounced. So they were not tempted to bail.

Everybody, Trevor, is a risk-munching Stallone when markets are okay. But when the tide turns, they fold. Be a man. Be balanced.

122 comments ↓

#1 Rural Rick on 06.11.17 at 6:15 pm

Garth’s advice about diversity in finance is right on. Diverse ecosystems also weather change well. So do diverse communities. Mutts are also better dogs, more diverse yah know. Diversify and thrive.

#2 Livin Large on 06.11.17 at 6:22 pm

Wow, your best writing in ages.

You do so much better dealing with a few issues than when you beat the “don’t be a greater fool” mantra.

Nice work.

#3 Lumpia on 06.11.17 at 6:25 pm

Garth do you see a 10% price drop in GTA 6 months from now?

#4 This Week in Money on 06.11.17 at 6:31 pm

Garth Turner on This Week in Money:
Vancouver and Toronto Real Estate and Your Bottom Line. BC NDP/Green Policies Negative for the Economy?

http://www.howestreet.com/2017/06/10/this-week-in-money-108/

#5 Rargary on 06.11.17 at 6:32 pm

Guelph will be sucked into the housing funnel along with Utopia. What’s the rush to buy anyway? It’s Guelph!

#6 Ace Goodheart on 06.11.17 at 6:35 pm

You’re all beset by robber barons. It doesn’t matter how much interest you pay. Your lives will be short, full of hard work and ultimately unfulfilling. Just remember that someone cashed in their bank stock options and bought a new yaught with your interest money.

Life is not hard. It is made to seem that way by the robber barons. So keep working and keep paying and dream of your “someday”.

“I can’t stand it. I know you planned it…..your crystal ball ain’t so crystal clear”

Happy summer!

#7 SimplyPut7 on 06.11.17 at 6:36 pm

The just sold reports for recently sold homes in the Toronto area are back! http://sold.watch/

Go to the tab Support > I’d like to know and send an email to find out how to sign up.

#8 For those about to flop... on 06.11.17 at 6:47 pm

Pink Pollen falling in Vancouver.

These guys,like a lot of my cases in this price point are being made to wait to get the bulk of their money back.

They forked out 5.18 in May 2016 ,but despite the bumper assessment that came later in the year coming up roughly 1.5m ,it still come in well short of their buy price at 4.63.

As I said ,they are not on their own, one of my other cases in the same price range also dropped today, and the geniuses that coughed up over 3 million for a condo out in Richmond also got with the current program.

Something’s wrong with my iPad, it just typed that someone spent over 3 million on a condo out in Richmond.

I have to go to the Apple Store…

M42BC

4068 11TH AVE W VANCOUVER

Mar 1:$5,798,000
Jun 10: $5,380,000
Change: – 418000.00 -7%

https://www.zolo.ca/index.php?sarea=4068%20W%2011th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMDJCNA==

#9 Porsche on 06.11.17 at 6:48 pm

“I’ve been fan and avid reader of yours for several years now. I’ve even taken some of your advice,” says Matt, with the obligatory suck-up

……………………………………………………………………..

Ha Ha… that’s good

#10 For those about to flop... on 06.11.17 at 7:00 pm

Pink Pollen falling in Surrey.

People keep telling me on here that Surrey is on fire,but if that’s the case how come these guys and a lot of my other cases in this, by Greater Vancouver standards ,modest house and modest price range be having such trouble selling their homes.

No one in seven months offered 809k for this place? Apparently not.

They could only take 1% off as they paid 782 in April 2016

Worse news for them still,the assessment only come in at 715k

You guys wouldn’t be lying to me would you?

I thought we were friends…

M42BC

12607 96 Avenue, Surrey

Nov 7:$809,999
Jun 10: $799,000
Change: – 10999.00 -1%

https://www.zolo.ca/index.php?sarea=12607%2096%20Avenue,%20Surrey&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDA3NkMxVg==

#11 For those about to flop... on 06.11.17 at 7:00 pm

Pink Pollen falling in Vancouver.

These guys,like a lot of my cases in this price point are being made to wait to get the bulk of their money back.

They forked out 5.18 in May 2016 ,but despite the bumper assessment that came later in the year coming up roughly 1.5m ,it still come in well short of their buy price at 4.63.

As I said ,they are not on their own, one of my other cases in the same price range also dropped today, and the geniuses that coughed up over 3 million for a condo out in Richmond also got with the current program.

Something’s wrong with my iPad, it just typed that someone spent over 3 million on a condo out in Richmond.

I have to go to the Apple Store…

M42BC

4068 11TH AVE W VANCOUVER

Mar 1:$5,798,000
Jun 10: $5,380,000
Change: – 418000.00 -7%

https://www.zolo.ca/index.php?sarea=4068%20W%2011th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAwMDJCNA==

#12 sh33p on 06.11.17 at 7:07 pm

Starting to see a few more price drops in Victoria. This is just the start. It’s going to be great! :)

Meanwhile, I know people who are buying their third and fourth properties because “It only goes up”. The stupidity continues.

#13 What are we smoking on 06.11.17 at 7:08 pm

5.3 million in Cali vs Vancouver

https://www.zillow.com/homes/for_sale/CA/19994340_zpid/9_rid/5000000-5300000_price/18409-19514_mp/globalrelevanceex_sort/54.889246,-93.427735,28.632746,-134.780274_rect/4_zm/

vs

https://www.zolo.ca/index.php?sarea=4068%20W%2011th%20Avenue,%20Vancouver&filter=1
vs

#14 saskatoon on 06.11.17 at 7:21 pm

trevor is an immoral thief–too weak to make his own money…uses government to take by force what he is “owed” from others.

ironically, he knows what he is…he calls himself “the scorn of all evil”…but he puts quotes around it…so all is good.

such is the deranged and confused mind of the left-wing psyche.

#15 Sir James on 06.11.17 at 7:27 pm

Bitcoin = $4000 CDN.
Any day now folks will figure out the difference between Ethereum and Bitcoin, then things will get crazy.

#16 Cali on 06.11.17 at 7:36 pm

#13 What are we smoking

5.3 million in Cali vs Vancouver

Actually, that would be: US$2M in Cali versus CAD$5M in Vancouver.

Because the Cali house sold for US$1.9M just 2 years ago.
And no, California real estate did NOT do +176% in two years.

FWIW, I would rather live in Vancouver than in California.
Lower property taxes and lower health care costs are two reasons.

#17 The Technical Analyst, CSTA, CPD on 06.11.17 at 7:45 pm

Are you missing out with a Balanced fund vs a full equity fund?

Not really.

An active 60/40 fund on average YoY: 8.8%.
Downside: 26.6%

An active 100/0 fund on average YoY: 10.2%.
Downside: 43.1%

https://static.vgcontent.info/ret/hnw/web/frsh_images/WSUA_balance_2.png

That’s active management, not ETF.

#18 TurnerNation on 06.11.17 at 7:51 pm

Yes was gob smacked. 1/2million of debt servitude for a box in…Guelph. (Guelph who?)
I bet its ex-Big Smoke diaspora set a daily alarm for 4:20.

In other news virtual bank MOGO (the bank to hipsters starting an ironic T-shirt fund for their kids’ future)
http://www.blogto.com/city/2016/04/this_toronto_shop_is_actually_the_citys_coolest_bank/

…just floated a convertable debenture offering, with a 10% coupon. Not a typo. MOGO.DB.TO
Gee I’m not a Fin guy but what’s their weighted avg cost of capital vs. return of capital?

#19 Tony on 06.11.17 at 8:04 pm

Re: #3 Lumpia on 06.11.17 at 6:25 pm

About three weeks from now. It looks like the month of June will be down exactly 4.00 percent from May for a two month drop of 10.2 percent in the GTA (May and June combined).

#20 Ret on 06.11.17 at 8:06 pm

#14- “such is the deranged and confused mind of the left-wing psyche.”

I don’t blame Trevor. He is a bit cog in the system. In two weeks, he will be a fully indoctrinated Wynne foot soldier.

Canadians have become entitled, lazy and unproductive and have no intentions of changing. As I recall, we had a whole lot more to celebrate on our 100th than we will have on our 150th but this is no time to reflect.

Party on Canada!

#21 Tony on 06.11.17 at 8:11 pm

Re: #13 What are we smoking on 06.11.17 at 7:08 pm

That house in Vancouver would sell for $50,000 U.S. on a good day in America.

#22 Fiendish Thingy on 06.11.17 at 8:14 pm

Garth, it isn’t Costco that’s filled with tacky Chinese crap, that’s WalMart.

Costco, while having some Chinese made merchandise, is known for including lots of locally sourced merchandise in their stores.

#23 The Inconvenient Truth of Consumer Debt on 06.11.17 at 8:16 pm

“Sometime between now and Armageddon, interest rates will go up,”

https://www.bloomberg.com/view/articles/2017-06-08/irrelevant-consumer-debt-loads-can-become-relevant-quickly

#24 For those about to flop... on 06.11.17 at 8:17 pm

Let’s have a look at the bottom end of the market in Vancouver proper.

This is one of my neighbors that I have talked about a couple of times and even showed proof of the ghost town opens that Common Sense thanked me for as it was a nice gay here and during a rainy period in Ontario.

Despite it being one of the cheapest houses in Vancouver after 6 or 7 opens she decided to lower the price and re-list to re-ignite the sale.

This lady is in good hands and has an experienced realtor.
He is actually one of the few that immediately after the sale goes through ,puts up the actual sold price whether it was below ask or not.

If you go to zolo and enter Vancouver houses up to 1.3 million,50 options come up.
Only 5 have the shiny yellow reduced sticker,but just like my neighbor , to keep everything fresh , the bulk of them have a new number and a new price to show no weakness.

Some of the cheapest houses in Vancouver are on their second or third go- around.

Out of the 50 ,I would estimate the number of the houses that have had some sort of price correction,major or minor as in this case ,to be close to 50%

Is that hot ,or what…

M42BC

904 37th Avenue, Vancouver

Apr 24:$1,298,000
Jun 8: $1,275,000
Change: – 23000.00 -2%

https://www.zolo.ca/index.php?sarea=904%20E%2037th%20Avenue,%20Vancouver&filter=1

#25 For those about to flop... on 06.11.17 at 8:27 pm

Common Sense thanked me for as it was a nice gay here and during a rainy period in Ontario…

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

There might have been some nice gay people at the open house,but autocorrect did me no favours as I wrote ‘ nice day’ .

A same sex couple does live across the road.

Best garden in the neighborhood.

If I had a dog that’s where I’d take it to pee…

M42BC

#26 Ace Goodheart on 06.11.17 at 8:29 pm

#5 Rargary: Guelph is a University town.

That means the nightlife is happening the ladies are youngish and there is intelligence in the talk on the street. If he is trying to survive Guelph might not be so bad. Not Toronto but it has a pulse. Better than Marathon.

People need to breathe.

But 500k for a condo? That is nuts. Buy a large house in Stratford for that money and you get the theatre and all the freaks that come out at night that go with it.

#27 Damifino on 06.11.17 at 8:44 pm

#2 Livin Large

You do so much better dealing with a few issues than when you beat the “don’t be a greater fool” mantra.
——————————–

Well… this is greaterfool.ca. What were you expecting? A support group for the overextended?

#28 Costco Nation on 06.11.17 at 8:55 pm

Why, Garth, why? I take offense in mocking our cherished club. We are not dumb consumers there, we feel proud of being valuable members. As a member I get the weekly opportunity of a friendly joust in the parking lot, with other equally cherished members. Makes us feel less Ke we belong. I feel a bigger member when my cart is checked at the exit. It’s caressing my feelings of being member. I also value how I’m offered no choice, so I can guiltlessly dive into buying something I might not need now, but has to be stacked there in case it’s discontinued. I wholeheartedly trust the judgement of our Club to drive my spiritual life with steady accumulation. I am not good enough with words to describe the feeling of fulfillment I get every week, rubbing against fellow members in a friendly competition. And, here you are, attacking my way.

#29 waiting on the westcoast on 06.11.17 at 9:04 pm

#12 sh33p on 06.11.17 at 7:07 pm

I like your handle…. But don’t get frisky or anything…

#30 Andrew Woburn on 06.11.17 at 9:04 pm

The Washington Post “Energy 202” reports –

“– Digging deep into President Trump’s budget, Joe Kunches for The Post found that the White House proposed to eliminate a program that detects solar storms. These storms can send toward Earth a rush of radiation that, if powerful enough, could cripple the electric grid. Kunches explains:

Geomagnetic storms — disturbances to the normal state of Earth’s magnetic field — result from energized solar wind. The solar wind is always blowing, but sometimes it’s particularly — windy. The largest storms usually are sparked by “solar wind gusts” called coronal mass ejections. The geomagnetic field fluctuates wildly during a storm, like the wind during a hurricane, and that creates electrical currents here on Earth. They can be intense and damaging to transformers in the power grid.

It costs only $1.9 million per year to run.”

According to Wikipedia, in the “Carrington Event” solar storm of 1859, telegraph systems all over Europe and North America failed, in some cases giving telegraph operators electric shocks. Telegraph pylons threw sparks. Some telegraph operators could continue to send and receive messages despite having disconnected their power supplies. Imagine the potential effect on microchips with electrical pathways measured in nanometers … the ones that control the power grid, internet, banking systems. Supposedly the systems are hardened against solar flares but we won’t know until they are tested.

This breathtaking lack of common sense will save US taxpayers about enough to fund one weekend for Trump at Mar-a-Lago.

#31 Asterix1 on 06.11.17 at 9:09 pm

#3 Lumpia asks “Garth do you see a 10% price drop in GTA 6 months from now?”

Just read Garth’s last 10 postings for your answer!

PS: Pretty sure you wont have to wait 6 months for a 10% drop. The way this house of cards is built, it will be a fast collapse when all the cards gets reshuffled.

#32 Layla Demers on 06.11.17 at 9:27 pm

Garth, do you ever recommend holding more than 5% cash? Like in 2008, did you ride it all down or sell a bit and go to cash and re-enter when things stabilized? Or what would it take to go higher than 5%?

Nobody can time markets. The proper cash weighting is probably now closer to 2%. Stay invested, my friend. — Garth

#33 Ace Goodheart on 06.11.17 at 9:34 pm

Dharma bum. Jack Keroac. Dean Moriarity with Jack shambling after.

Still beats granite and 25 year payment plans.

Seriously though anyone falling for this sh%t is f^$#ed. Really? Come on guys. The world is big. Why are people doing this?

Dirt and a payment plan?

You don’t need somewhere to live

Repeat after

You don’t need somewhere to live.

Life is a journey not a destination.

#34 Smoking Man on 06.11.17 at 9:41 pm

Wondering what happened to context. Ak Old Man.

We communicated daily for years up to blog dogapolusa. He strongly recommend I don’t go. I did and I never heard from him again. Garth has he posted since? You know his email. I’m a bit worried.

He was a smart dude. Mabey too smart. What ever his plans where I guess they where wrecked when I showed up at the forks.

Hmm.

Wondering in a former life he went by the name of Shaw.

He realized in the two years of servalance he got nothing from me.

Humans never aggree to a one world govt until you can read each other minds. Its a long way off

#35 solar storms on 06.11.17 at 9:44 pm

#30 Andrew Woburn on 06.11.17 at 9:04 pm

The Washington Post “Energy 202” reports –

“– Digging deep into President Trump’s budget, Joe Kunches for The Post found that the White House proposed to eliminate a program that detects solar storms. These storms can send toward Earth a rush of radiation that, if powerful enough, could cripple the electric grid.

====

The problem with solar storms is that although they can kill electronics that control virtually everything these days in all industrialized countries, there is absolutely nothing we can do about them.

#36 young & foolish on 06.11.17 at 9:48 pm

“Garth do you see a 10% price drop in GTA 6 months from now?”

Yup … there will always be buyers.

#37 Fish on 06.11.17 at 9:53 pm

If you have a 100 k
You Will Live in 2 Countries If You Buy This House

http1://time.com/4813730/vermont-canada-border-house-sale/

#38 Smoking Man on 06.11.17 at 9:57 pm

Nobody can time markets. The proper cash weighting is probably now closer to 2%. Stay invested, my friend. — Garth

Seriously do I need to walk on water. Or do a lower fly-bye at the forks.

Aliens are real.

#39 Smoking Man on 06.11.17 at 10:25 pm

solar storms on 06.11.17 at 9:44 pm
#30 Andrew Woburn on 06.11.17 at 9:04 pm

The Washington Post “Energy 202” reports –

“– Digging deep into President Trump’s budget, Joe Kunches for The Post found that the White House proposed to eliminate a program that detects solar storms. These storms can send toward Earth a rush of radiation that, if powerful enough, could cripple the electric grid.

====

The problem with solar storms is that although they can kill electronics that control virtually everything these days in all industrialized countries, there is absolutely nothing we can do about them.
…..

Mother ships need em. No worries on earth. Within a nano second of a big one. My boys and rivals are filling up the gas tank.

Gravity=Either sub set of electro magnetism.

Albert Einstein was an idiot. CERN is fake news.

#40 45north on 06.11.17 at 10:29 pm

ace: That means the nightlife is happening the ladies are youngish and there is intelligence in the talk on the street. If he is trying to survive Guelph might not be so bad. Not Toronto but it has a pulse. Better than Marathon.

I betcha

https://en.wikipedia.org/wiki/Marathon,_Ontario

#41 WUL on 06.11.17 at 10:30 pm

Bandit has his work cut out for him.

My Alma Mater just gave a dog a law degree. A Juris Dogtor.

http://www.huffingtonpost.ca/2017/06/11/tiana-knight-guide-dog-law-degree_n_17043392.html

#42 Smoking Man on 06.11.17 at 10:34 pm

My demented world.

I don’t fit on bay street anymore. I’m a writer now. Truth warrior. With a small adiance.

Its my life.

https://youtu.be/9B1M3IPVcXs

#43 Pete from St. Cesaire on 06.11.17 at 10:36 pm

Guelph is a University town.
That means the nightlife is happening the ladies are youngish and there is intelligence in the talk on the street.
————————————————————
Intelligence & university don’t go together. Poseur, know-nothings babbling about what they’re going to become in between discussions of how wonderfully sloshed they got last night. I know the scene all too well. And unless they’re in a STEM program they get a rude awakening when they graduate.

#44 Halling oats on 06.11.17 at 10:47 pm

#12 sh33p on 06.11.17 at 7:07 pm
Starting to see a few more price drops in Victoria. This is just the start. It’s going to be great! :)
_____________________________

Wait 5 years and tell us how that worked out for you. Plenty of others have revisited this blog in the past 5 years after waiting for “the crash” only to talk about how much they regretted listening to the advice here and wish they’d bought.

#45 Smoking Man on 06.11.17 at 10:50 pm

Garth do you realize that tonights head line might be a hate crime soon.

Its sis something, the mind fling moves too fast for even an alien with an 800 IQ to figure it out.

I just know you used the word man. Its not appropriate.
Some one from the deep state will be busting your balls over it soon.

#46 Smoking Man on 06.11.17 at 11:03 pm

To young liberals. Hopefully you do some acid and wake up soon.

https://www.youtube.com/watch?v=7U2E-In0DDg

#47 Ace Goodheart on 06.11.17 at 11:05 pm

RE: Pete from St. Cesaire:

Who cares. Uni is always a rude awakening.

Canada is a work camp. A person is either working hard or enjoying the efforts of others.

Party time is undergrad. If you are bent on joining the machine then you need to have something to remember fondly. .

Honesty go abroad see stuff. I can’t explain it to you. Things are not what they seem

#48 -=jwk=- on 06.11.17 at 11:16 pm

2 #16
FWIW, I would rather live in Vancouver than in California.
Lower property taxes and lower health care costs are two reasons.

taxes in LA are lower, and so are healthcare costs if you have a decent job. I moved from LA to toronto, property tax went up 20% HOA fees tripled and the deduction on my pay for health benefits went up $5 a month….

#49 Smoking Man on 06.11.17 at 11:26 pm

So the bilderburgs devious croud. Peer pressure im thinking. A salary worth more that human life. Not like that on plant nectoite.

3000 died on 911 to set in motion Shlongs master plan. A hurt nectonite with no forward thinking.

Msm on bullding 7

https://youtu.be/u9Dg-g7t2l4

#50 Smoking Man on 06.11.17 at 11:37 pm

Cycle people, young ones with helmats attached to skulls never grew up with this tune.

Shame.

https://youtu.be/egMWlD3fLJ8

#51 Ponzius Pilatus on 06.11.17 at 11:41 pm

#102 Stan Broock on 06.11.17 at 4:06 pm
You must be romanian. You guys just love your germanic masters.
——————————————
It is funny you mentioned it, I was in Eastern Europe including Romania on Business trip few years ago, when contracting for a major management consulting company.

I was just amazed at how many high tech and financial companies are present in Bucharest/Romanian capital.
The place is literally booming. Hint: our jobs go there.

In my humble opinion, no matter how funny it might sound, Eastern Europe is overtaking Canada very fast in terms of standard of living and already looking in the rear view mirror at us. I am absolutely serious.
No seniors searching the garbage bins as in Toronto.
No drug addicts on the street as in Vancouver.
I had a chance to board a tour ship in the Danube delta, the most amazing trip in the wilderness in my life.

We really need to rethink our view of the world.
————–
Completely agree, bro.
Canada has 34 mill people vs. a total of 7.4 billion.
Little humility seems in order.

#52 SI2K on 06.11.17 at 11:46 pm

Guelph west end is still doing very well. Not the frenzy it was last June, but well-priced houses are moving within ten days. The most recent on our street, a super slick listing, just went for $799K. We keep waiting for the other shoe to drop, and it doesn’t, but we’ve also still got 50 foot lots with 20-year-old 1300 sq. ft. SFHs available in the fours. Buying a condo here is mainly a student thing. It’s ten mins drive from your private backyard paradise past your choice of several excellent schools to the Go train. With high speed rail also on the table, I think we’ll hold value relative to the GTA, but, that said, we personally got into this over 40% ago.

#53 Smoking Man on 06.11.17 at 11:54 pm

When the me machine nukes you over area 51 and this is on the buds.

Machine not so strong. They don’t know music

https://youtu.be/R044sleOW6I

#54 Smoking Man on 06.12.17 at 12:04 am

For true writings and post smiths this is our song.

https://youtu.be/tAGnKpE4NCI

#55 Smoking Man on 06.12.17 at 12:15 am

SJW

Donald did it. So did my hero Rob Ford

https://youtu.be/92cwKCU8Z5c

#56 Smoking Man on 06.12.17 at 12:22 am

University we are fighting back. Pick a side.

https://www.youtube.com/watch?v=n4RjJKxsamQ&sns=em

#57 fishman on 06.12.17 at 1:10 am

About your last music pick SM. We brought a relative raised in the USSR out for a visit. When we picked him up at YVR first thing he wanted to do was go to the electronics store & buy a VCR & VHS movies. The first movie he wanted to watch was Easy Rider. This was in the eighties. He spent his month holiday renting & watching Hollywood films. He went back with VHS tapes & a player.

Hollywood movies on VHS & coincidently A Hollywood actor brought down the USSR empire.
I wonder what empires the internet will demolish?

#58 Louise on 06.12.17 at 1:26 am

Just curious…. How is Bandit?

I haven’t heard you mention him recently??? Is he ok?

#59 Tamsen on 06.12.17 at 2:09 am

https://www.theglobeandmail.com/real-estate/vancouver/as-metro-vancouvers-affordability-gap-widens-a-search-for-answers/article35267249/

#60 Freedom First on 06.12.17 at 2:26 am

Found the Blog and the comments overall today to be 5 star.

Freedom First
Master of Freedomonics
Its my life

#61 Minsky J. Moment on 06.12.17 at 5:06 am

“What Matt may not realize is that 2017 is not 2008.” … you are really tempting the gods of private debt with this statement 10 years since the last recession. Better hope they can raise rates 3-4 percent before it hits or we will really go through the looking glass, head first.

#62 Ray Skunk on 06.12.17 at 6:21 am

Credit where credit’s due for Trevor – at least he recognizes that the Ontario Liberal spending orgy is unsustainable and there’s quite a high chance that his DB pension will not be there for him upon retirement.

Compare and contrast to all the public “servants” (funny how that title makes it sound like some kind of sacrifice) I know who gloat that nothing negative could ever happen to them; Greece and Venezuela could never happen here.

That said, perhaps Trevor is right to be skeptical. Maybe he knows that he’s in a complete and utter non-job added to the payroll to try and prop up the Wynne vote. They’re the most vulnerable once the inevitable happens and she’s out on her ear.

#63 Dharma Bum on 06.12.17 at 6:50 am

#33 Ace Goodheart

“Dharma bum. Jack Kerouac. Dean Moriarity with Jack shambling after.”
——————————————————————-

Ahhhh yesssss! Be a Dharma Bum. That is the LIFE!

I agree with you, because you are right!

“Happy. Just in my swim shorts, barefooted, wild-haired, in the red fire dark, singing, swigging wine, spitting, jumping, running—that’s the way to live. All alone and free in the soft sands of the beach by the sigh of the sea out there, with the Ma-Wink fallopian virgin warm stars reflecting on the outer channel fluid belly waters. And if your cans are red hot and you can’t hold them in your hands, just use good old railroad gloves, that’s all.”

― Jack Kerouac, The Dharma Bums

#64 Another Deckchair on 06.12.17 at 8:55 am

@62 Ray Skunk:

“Compare and contrast to all the public “servants” (funny how that title makes it sound like some kind of sacrifice) I know who gloat that nothing negative could ever happen to them…”

As a one-time public servant, I’d agree that there are lots of people who think only of themselves, but there are an amazing number of people who do sincerely believe that they are helping out the citizens of Canada – we tend to notice only the bad things, not the good. (remember, the military, police, fire-people are public servants – was just down in NYC and passed a fire hall museum and it hit me about what those public servants did, knowing the probable outcome)

BTW – I survived the Harper cuts, while close to 40% of my colleagues did not – some adapted and are thriving, while others did not, same as when public companies go down (also been there, done that)

Not that it matters, but if you are reading this web page, you are using at least two technologies that I, as a public servant, had a hand in, and I did not make zillions off of – my goal was to keep this stuff in the public realm, not tied to some billion dollar company. It has worked so far, but we’ll see what the future holds. You are welcome. ;-)

#65 A Reply to #6 Ace Goodheart on 06.12.17 at 9:00 am

“Your lives will be short, full of hard work and ultimately unfulfilling.”

A Hobbesian observation.

“… and the life of man, solitary, poor, nasty, brutish and short.” — Thomas Hobbes

#66 maxx on 06.12.17 at 9:16 am

#6 Ace Goodheart on 06.11.17 at 6:35 pm

“Life is not hard. It is made to seem that way by the robber barons. So keep working and keep paying and dream of your “someday”.

“I can’t stand it. I know you planned it…..your crystal ball ain’t so crystal clear””

Good post. Life really isn’t that hard, we make it so – but it is really, really short.

Most of us have no choice but to pay the dream of someday whilst living today…..you gotta do both. Someday does arrive and those who followed through by constructing their vision get to enjoy that “someday”.

I found a crystal ball years ago. Abandoned. Best thing it ever reflected is “you don’t need me”. I keep it as a reminder that all that we do to succeed, we do on our own – with a little help from our friends from time to time.

#67 maxx on 06.12.17 at 9:52 am

#41 WUL on 06.11.17 at 10:30 pm

“Bandit has his work cut out for him.

My Alma Mater just gave a dog a law degree. A Juris Dogtor.

http://www.huffingtonpost.ca/2017/06/11/tiana-knight-guide-dog-law-degree_n_17043392.html

A pit bull makes a better pawyer….;-)

#68 Jay (not that one) on 06.12.17 at 10:25 am

$431k? In Winnipeg?

Seems like you can sell anything. Someone will pick it up.

#69 TurnerNation on 06.12.17 at 10:39 am

Everyone pile into commodities boys. Oil, softs, etc.

#70 maxx on 06.12.17 at 10:54 am

#48 -=jwk=- on 06.11.17 at 11:16 pm

Plus, something put out the sun up there…………it’s no-contest.

#71 The Limited Sage on 06.12.17 at 11:06 am

While Garth called me by the wrong name – it isn’t “Trevor” – I greatly appreciate you taking the time to answer my question.

Thank you Mr. Turner.

Your name wasn’t real, but the question was. You’re welcome. — Garth

#72 A Reply to #66 maxx on 06.12.17 at 11:17 am

“Most of us have no choice but to pay the dream of someday whilst living today…..you gotta do both. Someday does arrive and those who followed through by constructing their vision get to enjoy that ‘someday’.

“I found a crystal ball years ago. Abandoned. Best thing it ever reflected is ‘you don’t need me.’ I keep it as a reminder that all that we do to succeed, we do on our own – with a little help from our friends from time to time.”

A nice two-paragraph philosophical essay on the topic of determinism versus free will. On which side do you come down?

I think you might enjoy Thomas Nagel’s five-page essay on free will. (It gave me pause.)

https://laurenralpert.files.wordpress.com/2014/08/nagel-free-will.pdf

#73 Justin on 06.12.17 at 11:19 am

Anectode from my ‘in demand’ West Oakville area. A 3 bedroom 1960’s sidesplit has been for sale since April and I’ve watched as the sellers aggressively reprice but it seems like crickets. They must be closing on their new place as today they dramatically dropped the price.
Early April listed $999,900
About 2 weeks later $989,000
May 15 dropped to $949,000
End of May dropped to $899,000…thought for sure they’d sell.
Today they’ve listed at $699,000
MLS® Number: W3837331
https://www.realtor.ca/Residential/Single-Family/18283882/2105-SAXON-Road-Oakville-Ontario-L6L2V1-Bronte-West

I would be shocked if the house sells for less than $800k but I thought it would sell for $1.05MM 3 months ago.

This area has tear downs every 10-12 houses with an empty lot and foundation poured just around the corner and a couple recently rebuilt homes nearby that are either listed or seem about to be listed. Several other houses in area listed in the $1MM range but for 3+1 or 4 bedrooms.

Interesting times…

#74 InvestorsFriend on 06.12.17 at 11:40 am

Are the Wealthy Retired Living Off the backs of those still working?

#47 Ace Goodheart on 06.11.17 at 11:05 pm said:

Canada is a work camp. A person is either working hard or enjoying the efforts of others.

******************************************
Disagree. What about those living off the savings and sacrifices that they made years ago?

If retired people own shares in factories do they not legitimately earn their dividends?

Could workers produce much without all the factories and software and infrastructure owned by share owners?

Are the wages of capital not legitimate wages fairly earned by the owners of the capital?

#75 Joe2.0 on 06.12.17 at 11:57 am

Uhttps://www.theguardian.com/cities/gallery/2017/jun/07/boxed-life-inside-hong-kong-coffin-cubicles-cage-homes-in-pictures

#76 Ole Doberman P. on 06.12.17 at 12:13 pm

Looks like boys at BNN are starting to see what Garth saw a decade ago – speculative bubble ready to burst:

http://www.bnn.ca/canadian-home-prices-could-fall-20-40-over-next-five-years-warns-capital-economics-1.774787

#77 isuckless on 06.12.17 at 12:17 pm

Feds will not increase the rate, they will stay the current course.
You heard it here first.

#78 Raj on 06.12.17 at 12:17 pm

#73 Justin, Thanks for sharing this.This surely looks desperation. On the other hand, this house is not even worth $500k.

#79 Old Dog on 06.12.17 at 12:35 pm

#74 Investors Friend, you’re wasting your time trying to convince some people IF. They only see the one side.

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” W. Churchill.

#80 HaHaHa on 06.12.17 at 1:03 pm

Ole Doberman nice video from BNN. Prices either go up or down in the end I guess. Pretty funny watching the faces on these BNN fake news people as they try to argue with Madani. If he is right look out.

#81 Ray Skunk on 06.12.17 at 1:18 pm

#64

Sadly, your optimism and heartwarming anecdotes are misplaced with me. I live in a province where teachers threaten strike and demand more pay, “for the children” of course, every time an election nears. Of course, it’s those very children that will be paying as our debt repayments climb higher. But hey, those teachers are entitled to their entitlements.

As for the NYC firefighters, you’re comparing apples with oranges. In the US, police and fire get into their profession as they want to make a difference, in most jurisdictions barely breaking $50-$60k in salary. However, here in glorious Ontario we have firefighters pulling $120k for a handful of days a week – in their plentiful spare time taking on cash jobs which take away from legitimate tradespeople and deny tax revenues. It goes further – the firefighters union is actively savaging their own members in a court case to prevent them from giving back to their communities with free volunteering – lest they starve the union of more dues.

With the unions pulling the strings of the Liberals we’re seeing only more and more self-serving and people in it for the money only. I cannot recall the last person I spoke to who told me they got into their public career for the greater good.

#82 Smoking Man on 06.12.17 at 1:20 pm

Happy to report Old Man ak Context is still alive and kicking. He’s somewhere by St Marteen

#83 maxx on 06.12.17 at 1:43 pm

#72 A Reply to #66 maxx on 06.12.17 at 11:17 am

“A nice two-paragraph philosophical essay on the topic of determinism versus free will. On which side do you come down?”

Thanks for that – I did enjoy it, however too black and white for me. I love arguing existential concepts such as these, but they are not long for the dynamics of how one idea(l) relates to the other in the real world.

In my world, determinism is largely the system within which I live and free will operates to a great extent within it. Until something lights a fire under my proverbial. That’s when free will begins to push the generally perceived parameters of the deterministic “envelope”.

I don’t see either idea as invalid nor operating entirely independently. My experience, and that of many I know, seems to generally fall the way of capitalizing on determinism, such as it may be understood, through the use of free will.

As for the peach vs. the chocolate cake, I come down on the peach every single time, because the chocolate cake contains to much free will of someone else’s election.

#84 Smoking Man on 06.12.17 at 1:56 pm

Hope you didn’t spend too much on that degree in comp science. Cause your rates are about to tank.

http://www.cbc.ca/news/business/global-skills-strategy-1.4156364

#85 Smoking Man on 06.12.17 at 1:57 pm

Oh O

http://www.zerohedge.com/news/2017-06-12/loonie-spikes-2-month-highs-boc-questions-need-stimulus

#86 Airbnb house horders on 06.12.17 at 2:16 pm

Garth,
please comment on this impending GTA disaster for folks who horde houses/condos to get rich quick with short term rentals:

New Toronto Airbnb rules would require hosts to live at property they’re listing

http://www.cbc.ca/news/canada/toronto/city-hall-air-bnb-rules-1.4155938?cmp=rss

How do we define live at to get around these regs?
Thanks.

#87 A Reply to #74 InvestorsFriend on 06.12.17 at 2:24 pm

“Could workers produce much without all the factories and software and infrastructure owned by share owners?

Are the wages of capital not legitimate wages fairly earned by the owners of the capital?”

Adam Smith in his book The Wealth of Nations (1776) provides exhaustive discussion of the wages of labour, the profits of stock, inequalities arising from the nature of the different employments of labour and stock, the accumulation of capital, the rents of land, the real and nominal price of commodities, the division of labour, and so on.

Highly recommended reading!

#88 Smoking Mans Realestate Broker on 06.12.17 at 2:28 pm

#40 Smoking Man on 06.10.17 at 10:17 pm

Liberalism is a mental disorder.

Up is down and down is up.

Whatever a lefty loon says you are, that’s just them looking in the mirror.

Taxation is theft, and running away from it is smart.

Just signed my lease down in the tropics. obviously, I can’t disclose the real Island, Wynne and T2 have an army of idiots trying to figure out the ending of this fiction novel and my Forex account.

The only one who has a chance is @GMBUTTS he bought my book for ten bucks after I raised the price. Another idiot
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
You have all been waiting to hear Smoking Mans new Island location.
https://www.realtor.ca/Residential/Single-Family/18052504/10-GORE-Street-GORE-BAY-Ontario-P0P1H0

#89 Howard on 06.12.17 at 2:32 pm

#69 TurnerNation on 06.12.17 at 10:39 am
Everyone pile into commodities boys. Oil, softs, etc.

—————————————

I thought oil is headed back to the $20s?

And isn’t Goldman still bullish on oil? Good enough sign to stay away.

#90 bdwy sktrn on 06.12.17 at 2:35 pm

whats with the rocket shot in the CAD???

#91 A Reply to #79 Old Dog on 06.12.17 at 2:42 pm

“… democracy is the worst form of government, except [for all the others].” — Sir Winston Churchill (1874–1965)

#92 bdwy sktrn on 06.12.17 at 2:51 pm

found it.
http://www.bnn.ca/bank-of-canada-to-assess-need-for-low-rates-as-growth-continues-loonie-jumps-1.776867

#93 bdwy sktrn on 06.12.17 at 2:51 pm

i’m not poloz, this looks bad on you!

#94 the Legend on 06.12.17 at 2:52 pm

legendary men know when to fold em…
http://theeconomiccollapseblog.com/archives/legendary-investor-jim-rogers-warns-that-the-worst-stock-market-crash-in-your-lifetime-is-coming-this-year-or-next

#95 Smoking Mans Realestate Broker on 06.12.17 at 3:02 pm

Which humble abode is more to Smoking Mans taste or therefore lack of?
Bet accordingly my friends.

https://worldproperties.com/property/ag/5773861123d1bc2c25f664bb/?areaUnit=squaremeter&currency=usd

https://worldproperties.com/property/ag/554e224b23d1bc2c25ab7101/?areaUnit=squaremeter&currency=usd

#96 Victor V on 06.12.17 at 3:13 pm

Realtor sees ‘troubling’ downturn in Toronto housing as sales drop 44%

http://www.bnn.ca/realtor-sees-troubling-downturn-in-toronto-housing-as-sales-drop-44-1.776748

#97 MarketPundit on 06.12.17 at 3:35 pm

USDCAD Short Squeeze! I’m Not Poloz is probably hurting today!

By the way, I am just curious how would you enforce this new regulation regarding AirBnb rentals? Who would I have to prove to that I live in the property? Or, rather who will control/police this?

#98 Lillooet, BC on 06.12.17 at 3:54 pm

#87 A Reply to #74 InvestorsFriend on 06.12.17 at 2:24 pm
“Could workers produce much without all the factories and software and infrastructure owned by share owners?


Adam Smith in his book The Wealth of Nations (1776) provides …
**************
InvestorsFriend has read that book at least twice and you?

#99 mike from mtl on 06.12.17 at 3:59 pm

#90 bdwy sktrn on 06.12.17 at 2:35 pm
whats with the rocket shot in the CAD???

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

BoC suggesting things are doing well and signaling rate raises as soon as end of 2017. Which is totally surprising though not coming from Mr. (good for exports) Poloz. Damn that’s a surprise.

http://www.marketpulse.com/20170612/usdcad-canadian-dollar-higher-boc-signals-higher-rates/

“Addressing a business school crown in Winnipeg the Deputy Governor of the Bank of Canada (BoC) Carolyn Wilkins said that: “As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required,”. The words from the Deputy Governor boosted the loonie as the market was expecting a rate hike in 2018 but now it could come as early as the end of 2017.”

#100 Smoking Man on 06.12.17 at 4:11 pm

#90 bdwy sktrn on 06.12.17 at 2:35 pm
whats with the rocket shot in the CAD???
…..

Some one at BOC said rates may go up.
Zero Hedge.

#101 TCContrarian on 06.12.17 at 4:16 pm

Nobody can time markets. The proper cash weighting is probably now closer to 2%. Stay invested, my friend. — Garth
***********************************************

I guess there are a few ‘somebodies’ out there, then. Their net-worth summary page begins with a “B”.

I’m now about 10% weighted with short positions (ETFs weighted with mostly the FAANG’s).

Does this count as ‘invested’?

TCC

#102 Contrarian Coyote on 06.12.17 at 4:24 pm

#47 Ace Goodheart on 06.11.17 at 11:05 pm
RE: Pete from St. Cesaire:

Who cares. Uni is always a rude awakening.

Canada is a work camp. A person is either working hard or enjoying the efforts of others.

Party time is undergrad. If you are bent on joining the machine then you need to have something to remember fondly. .

Honesty go abroad see stuff. I can’t explain it to you. Things are not what they seem

===

Full agree with Ace. I made the mistake of not going abroad the day after graduation. I hung around until I was 31 and missed out on some opportunities. Spent Left in ’03 and returned in ’14.

Best decision of my life and the opportunities and experiences are things that I never regret. If someone is young and mobile, at least do a year abroad doing whatever. The Brits/Aussies/Kiwis have it right with the gap year concept.

#103 Sonny on 06.12.17 at 4:25 pm

BoC’s Wilkins hints at first rate hike in 7 years

https://www.theglobeandmail.com/report-on-business/economy/bocs-wilkins-hints-at-first-rate-hike-in-7-years/article35283879/

#104 M on 06.12.17 at 4:37 pm

The game in southern gringo land is to raise the nominal interest rates in SUCH WAY that the real interest rates are still inflationary.
The northern gringo land will try hard to emulate the same, however Poloz is a pygmy while Mnuchin is a giant.
I don’t even compare T2 to anything :)
So what will happen, THE MARKET will be the one pushing the interest rates higher. So Poloz will have to chose between going 3% or loonie to 50c US.
I doubt that T2 will even understand the choice.
Since 2/3 of economy is housing related, the financial unraveling will be swift and cruel :)
Considering the HELOC, banks are by no means safe (except for bailing out). Helloc is what… 200 bil and change ?

Good show Gartho baby (on howestreet) -> here, i did my expected brownie nose thinghy :)

#105 Lee on 06.12.17 at 4:45 pm

#94 The Legend,

As Garth says: Jim Rogers is a nutbag.

My theory on these stock market prognosticators is that they know we believe they are all full of crap so they make the most outlandish predictions possible so that if they come true, they will look like a genius to people who are not on guard to the game they are playing. Mr. Dent for example has been calling for a crash for five years now too. Rogers has no idea when it will happen or why it will happen. So in essence what he is saying is that some day something bad will happen, we just don’t know why, but it will. Personally, not the kind of advice I can do anything with.

#106 AK on 06.12.17 at 4:49 pm

#90 bdwy sktrn on 06.12.17 at 2:35 pm
“whats with the rocket shot in the CAD???”
———————————————————-
Dead cat bounce.

Going to go down much lower.

#107 jess on 06.12.17 at 4:54 pm

basel 3

…Remember CDOs squared (collateralized debt obligation squared) –that mini masterpiece of financial engineering that spread panic throughout the market? The instrument still features on the roster of RiskWeighted Assets. And the RWA regime determines the amount of capital required in support of such risks. So, how much loss absorbing capital do you think the “tough” new rules require of a bank to carry an investment in a debt obligation, backed by a debt obligation, backed by a pool of loans made to US subprime residential homeowners?

https://www.bettermarkets.com/sites/default/files/Speech%20Berlin%20Financial%20Stability%20Conf%20Nov%202016.pdf

marked to model
http://www.bis.org/bcbs/publ/d352_note.pdf

The Rise of the “Basel IV Momentum”?
http://www.harvardilj.org/2016/12/beyond-the-horizon-of-banking-regulation-what-to-expect-from-basel-iv/
==================

Reports of the ESRB (European Systematic Risk Board)
The horizontal analysis revealed vulnerabilities stemming from developments in the RRE sector in a number of EU Member States.

The ESRB identified a group of eleven countries where vulnerabilities have risen to an extent that they required further investigation from a systemic perspective.

These countries comprise: Austria, Belgium, Denmark, Estonia, Finland, Luxembourg, Malta, the Netherlands, Slovakia, Sweden and the United Kingdom. These countries (hereafter referred to as the “focus countries”) were subject to a second stage of in-depth, country-specific analysis of vulnerabilities and policy measures. Overall, the findings of the country-specific analysis were the following (also summarised in Table E.1)”
https://www.esrb.europa.eu/pub/pdf/reports/161128_vulnerabilities_eu_residential_real_estate_sector.en.pdf?d1a536823a87796fcc0d06428343fe11
For other reports

#108 Mark on 06.12.17 at 5:16 pm

“Going to go down much lower.”

Why? You do realize that Canadians have record indebtedness, and the banksters will certainly want a much higher CAD$ in order to maximize the value of their loans, right? If anything, the CAD$ will rocket much higher as huge demand emerges for CAD$ to repay CAD$-denominated debt. Mortgages, consumer loans, credit cards, etc. Just as happened circa 2008-2009 in the USA.

Of course, we’ve had a few false alarms, but with the slow-motion bank run occurring, a much higher CAD$ is inevitable. Current prices are ridiculously low relative to Canada’s long-term trade balances.

#109 TCContrarian on 06.12.17 at 5:28 pm

#105 AK on 06.12.17 at 4:49 pm
#90 bdwy sktrn on 06.12.17 at 2:35 pm
“whats with the rocket shot in the CAD???”
———————————————————-
Dead cat bounce.

Going to go down much lower.

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

The loonie has a very close (positive) correlation to commodities/energy. So, as these are still coming out of a severe 4-6 year bear market, we’ll be seeing the loonie going UP for some time still.
Don’t be surprised if we’re north of 0.90 USD within the next 24 months or so.

Doesn’t anyone look at history any longer?

TCC

#110 Mark on 06.12.17 at 5:28 pm

“So what will happen, THE MARKET will be the one pushing the interest rates higher. So Poloz will have to chose between going 3% or loonie to 50c US.”

I find this scenario unlikely. As the Canadian RE market collapses (along with consumer consumption and imports leveraged to it), there will be insatiable demand for CAD$ from domestic sources. This alone should push the loonie back to par, and perhaps even beyond (if coupled with a US tech meltdown, could be very well beyond par if there’s strong flows into Canada’s precious metals sector as there was in the early 2000s!).

Poloz will have to cut to zero in the face of this, but the question becomes, whether to do QE, or whether to run NIRP, and how significant of NIRP.

I think they’ll try NIRP, but ultimately fail at it. And $1 CAD$ will eventually be worth $1.30-$1.50 USD. A complete inversion of what happened in the early 2000s. Eventually the CAD$/USD$ pair will settle at a more natural level of $1.15-$1.25 which is more reflective of the long term trade balances between Canada and the USA. Canada will be able to run considerably lower interest rates than the US for basically the next generation, owing to its legacy of relative fiscal prudence. Exciting times for Canada once we get this housing bubble out of the way, that’s for sure!

#111 InvestorsFriend on 06.12.17 at 5:34 pm

The Wealth of Nations

#87 A Reply to #74 InvestorsFriend on 06.12.17 at 2:24 pm said:
Adam Smith in his book The Wealth of Nations (1776) provides exhaustive discussion of the wages of labour, the profits of stock, inequalities arising from the nature of the different employments of labour and stock, the accumulation of capital, the rents of land, the real and nominal price of commodities, the division of labour, and so on.

Highly recommended reading!

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

Indeed so and I have read that book, cover-to-cover. Twice, including recently. It is still surprising relevant.

#112 Victor V on 06.12.17 at 5:44 pm

https://www.thestar.com/business/real_estate/2017/06/12/toronto-home-sales-decline-continues-into-june.html

Toronto-area lawns are still sprouting “For Sale” signs even as the number of home purchases continued to decline into June, says online brokerage Realosophy.

It found that sales of houses (detached, semi-detached and towns) across the region were down 44 per cent last week compared to the previous week.

York Region is still showing some of the largest declines of about 60 per cent in some areas, said company president John Pasalis.

“The sales numbers keep getting worse,” he said. “It’s like they’ve fallen off a cliff. It’s this downward momentum week after week.”

#113 Daughter of Ponzi on 06.12.17 at 6:15 pm

#74 InvestorsFriend on 06.12.17 at 11:40 am
Are the Wealthy Retired Living Off the backs of those still working?

#47 Ace Goodheart on 06.11.17 at 11:05 pm said:

Canada is a work camp. A person is either working hard or enjoying the efforts of others.

******************************************
Disagree. What about those living off the savings and sacrifices that they made years ago?
———————————————
Shut up, please! You retired at 55 as government employee and you also speculate in stocks. You are basically a parasite typical for boomer generation. Have you ever had a real job in your life, making something that people really need? You are nobodies friend and if you had any real friends you wouldn’t be on this blog 24/7.

#114 A Reply to #97 Lillooet, BC on 06.12.17 at 6:18 pm

“InvestorsFriend has read that book at least twice and you?”

Is this a contest? (I was just trying to be helpful!)

#115 Daughter of Ponzi on 06.12.17 at 6:21 pm

#88 Smoking Mans Realestate Broker on 06.12.17 at 2:28 pm
#40 Smoking Man on 06.10.17 at 10:17 pm

Liberalism is a mental disorder.

Up is down and down is up.

Whatever a lefty loon says you are, that’s just them looking in the mirror.

Taxation is theft, and running away from it is smart.

Just signed my lease down in the tropics. obviously, I can’t disclose the real Island, Wynne and T2 have an army of idiots trying to figure out the ending of this fiction novel and my Forex account.

The only one who has a chance is @GMBUTTS he bought my book for ten bucks after I raised the price. Another idiot
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
You have all been waiting to hear Smoking Mans new Island location.
https://www.realtor.ca/Residential/Single-Family/18052504/10-GORE-Street-GORE-BAY-Ontario-P0P1H
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Looks the same as his old redneck house.

#116 Daughter of Ponzi on 06.12.17 at 6:26 pm

#109 Mark on 06.12.17 at 5:28 pm
Mark, you need the best psychiatrist a money can buy. Find one and leave this blog. We can’t bear you any more.

#117 Daughter of Ponzi on 06.12.17 at 6:33 pm

#79 Old Dog on 06.12.17 at 12:35 pm
Your quote comes from Churchill, the old psychopath, who sent millions of young men to war to die or get crippled. Think about it.

#118 Daughter of Ponzi on 06.12.17 at 6:37 pm

#111 Victor V on 06.12.17 at 5:44 pm
https://www.thestar.com/business/real_estate/2017/06/12/toronto-home-sales-decline-continues-into-june.html

Toronto-area lawns are still sprouting “For Sale” signs even as the number of home purchases continued to decline into June, says online brokerage Realosophy.

It found that sales of houses (detached, semi-detached and towns) across the region were down 44 per cent last week compared to the previous week.

York Region is still showing some of the largest declines of about 60 per cent in some areas, said company president John Pasalis.

“The sales numbers keep getting worse,” he said. “It’s like they’ve fallen off a cliff. It’s this downward momentum week after week.”
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Sounds peachy and it’s just a start!

#119 crowdedelevatorfartz on 06.12.17 at 7:37 pm

@#81 Ray Skunk
“I cannot recall the last person I spoke to who told me they got into their public career for the greater good….”
*******

Apparently you’ve never swilled brewskis with a CRA auditor…..

#120 A Reply to Daughter on 06.12.17 at 7:46 pm

#112 Daughter of Ponzi on 06.12.17 at 6:15 pm
#114 Daughter of Ponzi on 06.12.17 at 6:21 pm
#115 Daughter of Ponzi on 06.12.17 at 6:26 pm
#116 Daughter of Ponzi on 06.12.17 at 6:33 pm

Don’t hold back: Tell us what you really think!

A church sign saying next to a Baptist church this week reads as follows: “Before you speak [or write], THINK! Is it True, Helpful, Inspiring, Necessary or Kind?”

#121 sia_kb8 on 06.12.17 at 11:39 pm

A friend has put up his SFM up for sale in Mississauga. The open house on Friday had zero people showing up. The party is over. They need to sell because they have to close on another property mid-august.

#122 People are Strange on 06.13.17 at 12:49 pm

Wow, this must be a really strange coincidence….

Condo Activity Boosts Residential Market In Montreal
BY CALEB MACCAULEY JUNE 13, 2017 REAL ESTATE NEWS
According to the Greater Montreal Real Estate Board, the performance of Montreal’s immense condo market has resulted to a record number of homes being sold during the previous month in that area. In the month of May, 5,057 residential properties were sold, which was up year-over-year by 15 per cent and a new record for that month.
The increase came about in the middle of concerns of a spill over effect in Toronto’s foreign buyer’ tax on the second-largest city in Canada as reported by the Canadian Press. Observers in Real Estate market have given their opinion on whether a 15 per cent levy on foreign buyers in the Golden Horseshoe region which includes the Greater Toronto Area, would push sales in Montreal.
Paul Cardinal of the Quebec Federation of Real Estate Board noted it’s too early to determine whether the tax which was endorsed by the government in Ontario last month in retrospect to April 21, would have an effect on dealings.
Cardinal noted Montreal is prepared to have one of its best years concerning sales of home, attaching that to increase in employment, addition of temporal tenants and causing consumer confidence to improve.
Paul explained; “Demand is strong and listings are going down. We’re back in a seller’s market for single-family homes.” Finance Minister for Quebec, Carlos Leitao guaranteed he had no intentions for the immediate term to have a foreign buyers’ tax on Montreal homes introduced, but is however open to the idea if there is need for one.