Big stuff

Let’s forget the big issues, like Trump disintegrating, alt-right Nazis, climate change, Korean nukes or whether blog comments should continue. What really matters to people? Here’s a sample.

“Love reading your blog and my wife does as well,” says Tom. “We’ve been avid readers for the past couple years. We live in Victoria and the real estate market here has been insane lately (past two years essentially). We bought a condo in 2010 for $230,000 that we still live in today. We now owe $192,000 (2.64% fixed rate until 2020) and have been saving to buy a house but this insanely hot Victoria market has kept us from buying some POS for 600 – 700k.

“My question is: Is it worth putting some of our house savings money towards our existing condo mortgage? We have savings (100k and growing) that we planned to use towards the house. However, now that we are content to stay in our condo for longer and wait for this market to cool down I feel that the house savings money could be put to better use. It’s just making a messily rate from one of the online banks. I understand this is a common question but I wanted your opinion in these interesting times with low rates (at least they’re low for now).”

That’s easy, Tom. No. First, if this is a conventional fixed-term bank mortgage, you probably can’t make a $100,000 prepayment. Second, why would you? Borrowing at barely more than 2.5% is cheap, plus you have payment predictability for another three years. Meanwhile the hundred grand is growing mold sitting inside some unstable digital bank paying less than inflation in fully-taxable pennies.

Good to hear you’ve given up on buying in the tenuous and inflated Victoria market, but keeping the ‘house money’ in a comatose state is dumb. So is using funds which should be earning at least 6% to repay debt costing less than half that. A big prepayment won’t lessen your monthly, and if the condo declines in value (quite likely) all you’ll have done is shovel more into declining equity.

Emotional people pay off cheap mortgages. Logical people invest the money, then have more to put against the loan upon renewal. We only allow logical people on this blog.

Now, here’s Beth, a twice-widowed octogenarian blog dog from a small city in Ontario, who appears to live on air.

“After two marriages I am alone now,” she says. “I am 80 years but look, act and feel about 65. I own my home and live alone. I do not have any children and no relatives in Canada.

“I came to this country from Britain when a young bride but never had the opportunity to save much as my first husband was sick on disability and second one had Alzheimer’s. I do not have any heirs and will probably leave my estate to charity.

“I have a line of credit for $50,000 and that is all I qualify with my pension income which is around $27,000. I do not have much in the bank. I love my home and am an avid gardener but was thinking about a reverse mortgage.  I shrink at the thought of all my money going to charity and want to enjoy life while |I can and upgrade my home. I do not want to go into an apartment as I need the freedom of my garden. Should I do this?”

After talking to her, I learned Beth’s house is worth $450,000, without mortgage, and she has essentially no money. You are living in near-poverty, I summarized. “But I have my garden and my church,” she countered. “So I possess what matters.”

Beth could sell the place, invest the proceeds and double her income – allowing her to rent an equivalent house while retaining over four hundred grand to look after inevitable future medical expenses. Or, she can stay and borrow against it. Since she’d not qualify for a HELOC, a reverse mortgage is an option. Beth can borrow half the value of the house without the burden of repayments. If she invests it, her income will rise by half and she’ll retain some capital for the future. But every month the mortgage principal will grow. Thus, if the house declines in value and the debt expands, her estate could soon be zero. If she had to sell for health reasons, there might be nothing.

We discussed this. Selling is your best option, I said. She was gracious. The garden won.

Terry and Bekki hate me, apparently. But not enough to stop reading.

“I’ve been following your blog for a long while now,” he writes. “As a lower mainland home owner I hate it and I hate reading it! However as a fairly pragmatic person it has definitely given me additional motivation to get my financial house in order the last few years.

“I have a question for you if you have time. I’m 34 and my wife is 32. We have paid off all loans, student loans, car debts, credit cards…. The only outstanding balance on our ledger is 725k in mortgage debt on what is likely (as of this moment) a +/- 1.2 million dollar house.

“While we cleared our debts, we have managed a small savings. Our goal was to have $100,000 cash in the next few years to account for potentially a real-estate crash where we needed to infuse some cash if the family home is a small amount underwater or massive interest rate spike when we renew. I know this is a lot of money that isn’t growing (but is at least equaling or beating inflation). So the question; what kind of cash safety net should my family actually have? I’d love to see that money growing, but investing, no matter how safe and smart is still risk. We’ve been told to have a year’s worth of cash. There doesn’t seem to be any magic number that everyone uses as far as I can see, so 1 year of life sounded pretty safe. Too much?”

No real savings, virtually 100% of net worth in a single asset and $725,000 in debt. Yes, you need advice. For people who eschew risk this could be a recipe for heartbreak. No balance, no diversification and, if the real estate market turns, no liquidity. If you’ve really realized a big equity gain on the place and fear being underwater in a few years, why not get out now? Duh.

As to the question about a non-invested emergency fund – don’t have one. It’s an archaic concept. No rational couple should have a year’s worth of cash lying around doing nothing. This is what lines of credit are for.

Go to the bank. Get an unsecured line for twenty, fifty or a hundred thousand – whatever they’ll give you. The interest rate is immaterial (but should be no more than prime + 3%). It costs zero to arrange, and zero to carry. If a personal emergency hits, just write a cheque. When it makes sense, sell investment assets to pay it off.

And when was the last time you had an emergency? Exactly.

118 comments ↓

#1 Ian on 08.18.17 at 5:18 pm

On a temporary basis, it may be possible if he goes to zero. But US economic fundamentals are solid, as witnessed by the Fed’s tightening. I would maintain my American weighting. — Garth

See, I don’t think that’s the case at all.

1) US GDP is continually being revised downwards. Q1 17 has now been revised to 1.2%, after previous estimates marking it above 2%. But that didn’t stop the BEA from marking Q2 at 2.6% in the advance estimate, but this is going to be revised down a lot too. We will find out more on 30 August.

https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

2) The US has a trade deficit with every country in the world. The deficit in goods and services was $502 billion in 2016. Without services, it was $750 billion.
They cannot keep financing this with debt, folks. Eventually the creditors are going to pull the plug.

https://www.thebalance.com/trade-deficit-by-county-3306264

https://www.thebalance.com/u-s-trade-deficit-causes-effects-trade-partners-3306276

3) US unemployment rates are hiding two very important facts: the explosive increase in part-time work which is not captured, and those who have given up completely which is also not captured. Part-time means no pension, no benefits. The true unemployment rate is likely closer to 9%.

It’s interesting, around Toronto I hear more and more about this too. Look at the LCBO battle with its union over part time work. A friend at Greyhound is going through the same thing in their union negotiations.

https://qz.com/877432/the-us-unemployment-rate-measure-is-deceptive-and-doesnt-need-to-be/

4) US auto debt at the end of 2016 was $1.2 trillion, rising 9% from 2015 (much faster than economic growth). The sequel to The Big Short will probably cover this, or student debt. All the exact same nonsense from their housing crisis is repeating. Loans with no income verification, and ‘teaser rates’ that explode upwards (they seem to have some really solid consumer protection laws there, Elizabeth Warren to the rescue lol). Banco Santander has already been hit by fines for shoddy lending practices. Sound familiar?

https://qz.com/913093/car-loans-in-the-us-have-hit-record-levels-and-delinquencies-are-rising-fast-too/

http://www.reuters.com/article/us-banco-santander-settlement-idUSKBN1702EN

Another little tidbit buried in that article…household debt now basically the same as 2008.

5) US student debt, in a seemingly two-horse race with auto debt, was $1.3 trillion at the end of 2016. It’s doubled in ten years. The average student leaves school with $34k in debt. That’s a great way to start your working life when all you can get is part-time work at Starbucks or as a nightclub doorman. In the sequel to The Big Short, Selena Gomez can play a graduating student in humanities who winds up at Starbucks.

http://www.businessinsider.com/americas-student-loan-debt-facts-2017-4

6) If gasoline has hit the lowest level in 12 years, has anyone considered that could be because of economic weakness?

http://www.marketwatch.com/story/drivers-may-pay-the-lowest-july-4th-gasoline-prices-in-12-years-2017-06-27

7) Food cost is rising so much faster than the CPI inflation index. In ten years, food price inflation averaged 2.4% per year. This with the economy barely at 1% growth. Who gives a toss what recreation cost inflation is when you can’t find a real job? The components of CPI that really matter like food and healthcare are rising like crazy.

http://www.freshplaza.com/article/176832/US-food-price-inflation-continues-to-outpace-overall-inflation

https://www.forbes.com/sites/davidmarotta/2013/04/16/big-mac-index-shows-official-cpi-underreports-inflation/#45efa8103551

8) The Shiller P/E marks the S&P 500 as the same expensive valuation as right before the 1930’s depression:

http://www.multpl.com/shiller-pe/

The US has 20t total in debt. Eventually the creditors will unplug the stereo and the party will be over. I’m reminded of a great quote from a senior analyst / mentor I was a big fan of when I first joined Bay St, when he described a company as “a giant bag of poo waiting to explode”.

Remember, a central bank can always shovel whatever manure is needed in order to backfill a story around the agenda they are on. Want to raise rates? Then the press release will focus on seemingly positive things, and avoid the inconvenient issues above.

The US Fed rises happening now are politically driven. In eight years of Obama, they raised exactly once. Trump wins and rates rise three times already. The US Fed is NOT using data as a basis for these rises. How many times can they do quantitative easing before someone finally figures out it’s all a house of cards? The US Fed is finally trying to deal with the debt bubble. After spending 16 years creating it.

Never bet against America. — Garth

#2 rental property math on 08.18.17 at 5:27 pm

RTM doesn’t think it’s a good idea to rent to seniors. They’ll end up seniorizing your home and you’ll spend some monies afterwards removing chairlifts replacing drywall and replacing tiles that grab bars were affixed to.

Do you also think it’s a good idea that this sweet old lady goes out to find a rental when all RE investors are shysters according to this blog?

I can see this happening.. Sweet old lady rents house from one of those people pushing and shoving trying to get into that new housing development that was posted on this blog a few months ago.

Shysty landlord tells sweet old lady on how he will help her with the proceeds of her house sale turn in to lotssss of money!!!

Shysty landlord takes every last penny from sweet old lady and sells the house.

Done.

#3 Stan Broock on 08.18.17 at 5:27 pm

#129 MF on 08.18.17 at 5:02 pm
#121 Stan Broock on 08.18.17 at 3:15 pm

So go move there. What’s stopping you?
MF
————————
The desire to constantly irritate brainwashed brainfrozen idiots like yourself?

#4 slave for life on 08.18.17 at 5:32 pm

ONLY 725,000 mortgage debt ….. LOL

These people have no clue.

#5 Mike on 08.18.17 at 5:37 pm

You answered part of a question for me Garth, thanks!

A couple of days ago, you stated “Days ago I mentioned a recent tidal wave of deplorable comments aimed largely at immigrants, natives, Chinese people, lefties and 1%ers. Me, as well. Open attempts to keep prejudice, racism, xenophobia and haters off this blog earned me a death threat or two.”

While it may be disheartening to see a growing trend in this behavior, it is exactly what one can expect when the economy turns down. People don’t want to hold themselves accountable under any circumstances, there’s always a “boogeyman” to blame, typically with racial overtones. History repeats. Sad, isn’t it.

#6 The Technical Analyst, CSTA, CPD on 08.18.17 at 5:38 pm

I was going to write a technical analysis of the S&P500’s drop this week and what levels to look for as well as other analysis.

But then I remember, Garthco Investing doesn’t believe in financial technicals so I’m not wasting my time. Ryan can do that.

#7 Howard on 08.18.17 at 5:45 pm

So the 2017 Global Livability Survey is out. http://www.huffingtonpost.ca/2017/08/16/most-liveable-cities-2017_a_23079370/

Vancouver, true to form, in 3rd place.

For a city with no real economy beyond selling houses, no real nightlife beyond pot smoking in Stanley Park, and no real cuisine beyond sushi.

#8 Wanderer on 08.18.17 at 5:46 pm

Garth, it’s not as simple as you say to sell your home and enter the rental market in the Lower Mainland, Vancouver area. Scarce availability, what there is is mega expensive (4K+) for a complete dump that is likely queued to be torn down…and IF you’re lucky enough to be considered as a final candidate for the property you have to beg for the landlord to pick you. In the time I have waited for this bubble to burst I have had to move 3 times and my rent is now triple what I started out paying in 2012. Just saying.

#9 InvestorsFriend on 08.18.17 at 5:56 pm

Line of Credit Emergency Fund

I tend to agree a LOC can be the emergency fund, at least for sudden expenses.

But what about an emergency fund for lob loss for those who think job loss could happen to them?

When I was briefly between jobs in 2002 and not knowing when I would get a new job, the last thing I would have wanted was to be borrowing more money. That would have been stressful. I had coincidentally just sold a rental property and that cash gave me a lot of comfort in a time of much lower income.

And is it fraud to run up a line of credit after you become unemployed? It might be. I have asked before are we obligated to tell the bank when lose our job?

I just opened a SAVINGS account and part of the deal was I had to agree to tell the bank of certain changes in my circumstances within 30 days. Completely unrealistic. But I had to pinky swear I would let the bank know.

I am pretty sure the same rule applies to those with lines of credit. You likely have to tell the bank if you lose your job. Most people will never tell them. But could they sue for fraud if you really abused things and ran up a ton of debt after job loss?

Surely some people have done this and then declared bankruptcy. Are the courts sympathetic or not?

#10 BobC on 08.18.17 at 5:59 pm

You leave me confused. You constantly make jabs at what today you refer to as the alt-right.
Does that give us permission to comment on the radical, masked left wing wacko’s that bring clubs to street protest or is recognizing them too politically incorrect?
Before you say it’s your blog, I understand that but it’s hard to ignore one sided comments that spreads one sided viewpoints to the uninformed.
I’ve had one delete and do not want another one. Please advise.

#11 Howard on 08.18.17 at 6:01 pm

#126 crowdedelevatorfartz on 08.18.17 at 4:24 pm
@#96 Trumpocalypse2017
“Leave developed urban areas”

*****

You first

————————————-

Funny, one of your Boomer colleagues here a few threads back said young people should do just that as a solution to expensive housing. Toronto’s young people should move en masse up to Kapuskasing.

Suffice it to say, intelligence was never mandatory for Boomers to live comfortably, as evidenced by some of the absurd things I read emanating from their keyboards.

#12 FLHTK on 08.18.17 at 6:10 pm

You have a 725k mortgage and your house is worth 1.2 and your not selling? Wow.
If you sold and invested it at 7% your wife probably wouldn’t have to work!

#13 Howard on 08.18.17 at 6:12 pm

#10 BobC on 08.18.17 at 5:59 pm
You leave me confused. You constantly make jabs at what today you refer to as the alt-right.
Does that give us permission to comment on the radical, masked left wing wacko’s that bring clubs to street protest or is recognizing them too politically incorrect?
Before you say it’s your blog, I understand that but it’s hard to ignore one sided comments that spreads one sided viewpoints to the uninformed.
I’ve had one delete and do not want another one. Please advise.

————————————-

As Garth appears to be a committed leftist on all social and cultural issues, you have to accept that his blog will have a certain bias there. It’s his space, so you need to respect that even if you disagree with his views on things like mass immigration, as I do.

There is no mass immigration. Mass stupidity is the problem. — Garth

#14 Cow Man on 08.18.17 at 6:13 pm

#1 Ian

It is the postings like yours that make the debate enjoyable and educational. And, why we need the comment section. Thank you

#15 raisemyrent on 08.18.17 at 6:17 pm

#8 Wanderer on 08.18.17 at 5:46 pm
Garth, it’s not as simple as you say to sell your home and enter the rental market in the Lower Mainland, Vancouver area. Scarce availability, what there is is mega expensive (4K+) for a complete dump that is likely queued to be torn down…and IF you’re lucky enough to be considered as a final candidate for the property you have to beg for the landlord to pick you. In the time I have waited for this bubble to burst I have had to move 3 times and my rent is now triple what I started out paying in 2012. Just saying.

I feel for you, but there are definitely decent “starter” houses out there for less than that. I’ve moved once in 6 years because I moved in with my (then) girlfriend. We found a 2+den penthouse with a large terrace on the first month of looking. My rent has stayed the same (either flat) or gone up less than the allowed limit in the aforementioned 6 years. And this is in Yaletown, not in the middle nowhere. Similar reports from my group of friends, covering Kits, the West End, and Gastown. If rents don’t go up there, then where?
I mean no disrespect to you personally, but it is stories like yours that start the fear fires. It’s human nature to notice the 1 outlier, bad case and ignore the boring majority. So easy to say and justify by saying that there is no vacancy, there are no “homes”, everyone is getting renovicted etc…

#16 JSS on 08.18.17 at 6:17 pm

In response to: #9 InvestorsFriend on 08.18.17 at 5:56 pm

In January 2003, I had lost my job, and was given a couple of months of severance. Ironically, after two weeks of being out of a job, RBC called me into the branch to update their “know your client” profile on their system.
When the [email protected] asked me if my employer was still the same, I responded honestly, and said that I recently lost my job. She was sympathetic, and told me to wait a minute. She had gone to get the Branch Manager. The Branch Manager had said that unfortunately, they will have to close my unsecured line of credit, as they now see “risk”. She said that I have thirty days to clear up the unsecured LOC. I didn’t have anything outstanding, so I was ok, but I wish I had access to it when I really needed it. Was lucky that my wife and I had about ten grand in a crappy savings account that kept us going for a few months.
For my next job, I set up an automatic deduction from my bi-weekly paycheque into another bank savings account for several months until I reached a decent dollar value, in case I fall into the same predicament again.
You just simply can’t rely on a job or a bank. Based on personal experience, I believe you need around six months of liquid or near liquid assets available. Going further into debt, and hoping to crawl back out of it when you get the next job, is just adding to your misery. And if your next job pays less than the one you lost, it will become even more harder to dig your way out.

Unless you like GICs, investment accounts are liquid. No reason to sit on cash. — Garth

#17 Dan on 08.18.17 at 6:18 pm

You can lead a horse to water, but you cannot make it drink. I don’t expect any 80 year old to even understand the process you describe. My own parents certainly don’t even understand how banks work, let alone some “stocks and bonds”/

Age is no excuse for ignorance. — Garth

#18 rental property math on 08.18.17 at 6:21 pm

…and at 80 years old

Better have a genuine human being for a landlord because once that diminished capacity sets in that $2000/month in rent will become $2000/week.

#19 Jungle on 08.18.17 at 6:40 pm

Solid answers to some common questions.

I too believe having huge amounts of cash for emergency funds is unneeded, especially when it earns almost nothing.

#20 Pretentious Hipster Bicycles on 08.18.17 at 6:47 pm

As Garth appears to be a committed leftist on all social and cultural issues, you have to accept that his blog will have a certain bias there. It’s his space, so you need to respect that even if you disagree with his views on things like mass immigration, as I do.

There is no mass immigration. Mass stupidity is the problem. — Garth
——————————

#13.

Current immigration levels are ~250,000 p.a. Peak immigration to Canada was ~400,00 p.a in 1910. We also had another spike of ~250,000 in the mid fifties.

So yeah, Garth is right, there doesn’t appear to be mass immigration beyond what we’ve seen in the past, and arguably as a % of population immigration is lower now than it has been.

The skin colour of immigrants has changed though. Whereas historically most immigrants were white and of British/French/European descent, many recent immigrants are brown.

Maybe that’s why you think you are seeing more immigrants?

#21 Kat on 08.18.17 at 6:47 pm

Dear Raisemyrent. You and your friends must live in buildings that don’t care they don’t make market rate which would be unusual in this city. Seeing as the cost of rent is a big topic around here I happen to know that every person I know is now becoming rent poor and two families that have been renovicted as well as one family who had a $300 increase of rent per month because of the Liberals little loop holes. The downtown core is becoming hollowed out because it is so unaffordable and the amount of empty and dark condos is mind boggling. I find your story very unbelievable.

#22 John on 08.18.17 at 6:48 pm

A rare example where I disagree with the author. In Toms case, it sounds like he has saved $100,000 with the intent on using it in the short term (ie buying a house if prices become attractive). Investing this liquidity in either his existing condo OR a financial portfolio with a target of 6% or similar both may expose him to short term volatility (or to put another way, losses on paper) at the exact time that he would want to use those funds. For short term goals, you are better to leave your liquidity in cash or near cash on demand accounts where the returns will be horrible but the risk of loss will be negated

That is clearly not the circumstance. — Garth

#23 When Will They Raise Rates? on 08.18.17 at 6:49 pm

alt-right Nazis

No, the alt-left terrorists and their globalist neocon financiers in both the R and D parties are the fascists, or, the “Nazis” as you put it.

Otherwise, great article.

#24 crowdedelevatorfartz on 08.18.17 at 6:56 pm

@#13 How Weird
‘intelligence was never mandatory for Boomers to live comfortably, as evidenced by some of the absurd things I read emanating from their keyboards…”
******

When the last of the Boomers are dust…..and the rapidly aging, cohort of govt pensioned Millenials reign supreme……and your progeny spew uninformed, jealous, vitriol at you…….kindly remember back to when Crowded Elevator Fartz keyboard emanations seemed ‘absurd”…….

#25 Rob JM on 08.18.17 at 6:59 pm

Interesting to see how other markets work. In Aus we have offset accounts which are a savings account that pays no interest but instead reduces the amount owing on your home loan. You essentially earn the home interest rate (~5%) without paying tax. Obviously low interest rates mess up the equation in Canada. Its also interesting that the Shitney and Hellbourne (Sydney and Melbourne) RE has bubbled as high as Canadian Hotspots despite much higher interest rates. Our corrupt politicians will do anything to keep it going a bit longer.

#26 Editrix on 08.18.17 at 7:00 pm

Why doesn’t Beth get a real estate agent and tell/him or her that she wants a buyer who will rent the house back to her? That way she gets to keep her garden and stay solvent.

#27 Engineer on 08.18.17 at 7:01 pm

When was the last time I had an emergency? Last year, when I was laid off twice. And my spouse also got laid off at the same time.

My #1 rule is to live on one income, the smaller one. When disaster hit, we were fine. Even with the $2k vet bill shortly after getting laid off.

#28 Guy in Calgary on 08.18.17 at 7:05 pm

The thought of having a $725k mortgage makes me want to vomit. I get anxiety imagining myself in that situation.

Did I read it right? Instead of harvesting an alleged $400k tax free gain, they are saving $100k in cash which is no small feat, to have it to put into their house in the event that they lose equity so they can renew their gargantuan mortgage and be at the same place MINUS $100k? LMAO That is literally the funniest thing I have ever read on this blog.

If that is how people think I have been giving people way too much credit on this blog.

#29 OnlineBanker on 08.18.17 at 7:06 pm

Hey Garth,

I think piles of cash might not be the worst place to be for a good 20% of a portfolio right now. You push bonds a lot on this blog, but look at ebanks like EQ which is offering 2.3%. That’s twice annualized inflation and looks better than the yields and rates on short-term bonds. Long-term bonds are getting smoked in value due to rate increase projections. 2.3% risk-free rate of return seems solid by comparison.

I am keeping a “less than the FDIC-insured” amount of cash in an ebank and it feels like a prudent place to be for half of the bond portion of my portfolio. I am still big on equities and totally buy your 60:40 equity:bond allocation ratio (even if it is conservative by many young investors standards). I just think half of that 40 being in HISA is actually prudent and not throwing cash away as is usually associated with large balances in 0.05% chequing accounts or what-have-you.

Thoughts?

I have never suggested 40% in bonds. And FDIC is American. — Garth

#30 Guy in Calgary on 08.18.17 at 7:06 pm

#22 John on 08.18.17 at 6:48 pm

That is clearly not the circumstance. — Garth

I think my comment reflects the circumstance

#31 Yanniel on 08.18.17 at 7:07 pm

My view: Often times Garth has suggested 5% of the portfolio could be on cash. I understand this small portion is to take on buying opportunities but it could also be used should an emergency occur.

Does this make any sense Garth?

Thanks.

Yanniel.

#32 Coopoiler on 08.18.17 at 7:18 pm

In toms case. Investing one hundred at six percent is great but tax needs to be paid on that income. If that is 50% you only have 3% left. Applying that one hundred grand against the mortgage is tax free. Mortgage at 2.65%, not much difference and no need to worry about the ups and downs in your investments. This ignores the fact you may not be able to apply that amount against the mortgage now but eventually you will.

Nobody pays 50% tax on investment income. Sheesh. — Garth

#33 Stone on 08.18.17 at 7:18 pm

And when was the last time you had an emergency? Exactly.

———

Well, if real estate valuations continue to crap out and the HELOC ATM gets cut off, methinks there will be many who will be wishing for an emergency fund when you know what hits the fan. Then again, these are the same ones who can’t save enough for next week’s bills.

On the other hand, I’m happily exempt from that. Lovely dividends drop into my account monthly, quarterly, semi-annually and annually. No house. No debt. Lovely.

I think I’m starting to sound like Freedom First. No stress, just peace of mind. LOL

#34 For those about to flop... on 08.18.17 at 7:21 pm

Hey Gravy, apologizes for the late reply.

Yes, if you help a few more people out like that in a cheerful manner your stock will surely rise on the Flop Index.

I have been extremely busy writing the screenplay for the sequel to the 2000 cult classic Dude, Where’s My Car? Starring Ashton Kutcher and Seann William Scott.

The sequel is going to feature Donald Trump and Steve Bannon and its still a work in progress but the working title at the moment is…

Dude,Where’s My Statue?

It will probably flop…

M43BC

#35 Howard on 08.18.17 at 7:25 pm

#20 Pretentious Hipster Bicycles on 08.18.17 at 6:47 pm
As Garth appears to be a committed leftist on all social and cultural issues, you have to accept that his blog will have a certain bias there. It’s his space, so you need to respect that even if you disagree with his views on things like mass immigration, as I do.

There is no mass immigration. Mass stupidity is the problem. — Garth
——————————

#13.

Current immigration levels are ~250,000 p.a. Peak immigration to Canada was ~400,00 p.a in 1910. We also had another spike of ~250,000 in the mid fifties.

So yeah, Garth is right, there doesn’t appear to be mass immigration beyond what we’ve seen in the past, and arguably as a % of population immigration is lower now than it has been.

The skin colour of immigrants has changed though. Whereas historically most immigrants were white and of British/French/European descent, many recent immigrants are brown.

Maybe that’s why you think you are seeing more immigrants?

————————————

1) Immigration is 320,000 per annum and the Liberals have plans to increase it, possibly significantly.

2) Those 400,000 in 1910 homesteaded in the uninhabited West and rural Ontario and received zilch from the government of the day. Even largely urban immigrant groups spread out (Winnipeg has the 3rd largest Jewish population in Canada). Today, 70%+ go to two cities. For Toronto and Vancouver, it is mass-immigration. I don’t blame the immigrants, of course. I blame the government for not encouraging settlement in smaller centres to spread out the pressure on services and infrastructure.

What pressure? Immigration enriches us. Current levels seem reasonable and consistent with historic norms. In any case, this blog is not going to join the xenophobic cesspool gathering around our ankles. — Garth

#36 When Will They Raise Rates? on 08.18.17 at 7:29 pm

A Libertarian view:

Peter Schiff: Freedom of Speech vs. the Thought Police

Press Wants Freedom of Speech as Long as It Fits Their Agenda

One of the few rights left to us in this country is the freedom of speech. If we don’t defend speech that we find offensive, someone else will find your speech offensive (and use the power of government to shut you down). Political correctness, is evolving into the Thought Police via the mainstream media. In particular, President Trump’s reaction to the events in Charlottesville is being portrayed as a defense of White Nationalists over Black Lives Matter. Nothing in President Trump’s remarks supports this story. President Trump, in the lobby of Trump Tower, was subjected to an inquisition by the Press, who intended to entrap the President and further their agenda to mischaracterize anyone who supports him.

Disrespecting Donald Trump and the Office of the President

I know very few members of the Press respect Donald Trump; this is clear. But they need to respect the office of the Presidency. Could you imagine members of the Press treating President Obama the way they are treating President Trump? Can you imagine the cries of racism? Of course, no member of the Press would dare show that type of disrespect to President Obama.

Condemning Violence on Both Sides

President Trump is refusing to denounce only the violence perpetrated by the White Nationalists without also mentioning that the Black Lives Matter group, who assembled without a permit, also engaged in violence. The Left is saying that President Trump has not denounced the White Nationalists enough. What the President said was that he was condemning the violence on both sides and that angered the left. They hold that the President should only condemn violence committed by the White Nationalists. That would be hypocritical. If you are going to condemn violence, that one must condemn it for everyone involved. The media wants to give Black Lives Matter and Antifa a pass.”

The podcast is a bit long, but well worth the listen if you’re a Peter Schiff fan :

https://www.youtube.com/watch?v=faPfunri0Vg

Not appropriate content for this blog. — Garth

#37 cramar on 08.18.17 at 7:37 pm

Ah, Beth! A little old lady after my own heart. Love gardening too!

I knew of an apartment complex in Kitchener 5 years ago. Don’t know if they still do this, but they had some land bordering a park. They had a fenced community garden where tenants had their own small plots to grow whatever they like. There was a patio area nearby where the gardeners would socialize.

If Beth could find the equivalent, she could sell her house and move. Best of both worlds. She can still garden, plus socialize with like-minded people at the same time. Maybe even teach youngsters to garden, which would give her added purpose.

#38 Jay (not that one) on 08.18.17 at 7:56 pm

There’s a few people in here going “We have to buy! We can hardly afford to rent in Toronto and Vancouver!”

I’m going to throw a crazy idea out there: If you can’t afford to live in those cities, why not live somewhere that isn’t those cities?

I want to drive a Ferrari, but I can’t afford one, so I drive a used Kia (yeah, yeah).

Per capita income is not higher in Vancouver or Toronto than other Canadian cities. In fact, there are quite a few jurisdictions where the average house costs about as much as Toronto house prices dropped last month alone, yet per capita income is higher.

#39 For those about to flop... on 08.18.17 at 8:05 pm

Hey Gravy, apologies for the late reply.

Yes, if you help a few more people out like that in a cheerful manner your stock will surely rise on the Flop Index.

I have been extremely busy writing the screenplay for the sequel to the 2000 cult classic Dude, Where’s My Car? Starring Ashton Kutcher and Seann William Scott.

The sequel is going to feature Donald Trump and Steve Bannon and its still a work in progress but the working title at the moment is…

Dude,Where’s My Statue?

It will probably flop…

M43BC

#40 Dragonslayer on 08.18.17 at 8:07 pm

#23 When Will They Raise Rates

Here’s a simple guide to sorting out who’s who:

Fascists are on the far right. As are neo- cons. Nazis are fascists.

The left includes socialists and the far left (alt- left, if you will) includes communists.

So you won’t see “globalist neocon financiers” supporting the far left. Makes no sense.

Also interesting how the pro- Trump peanut gallery on this blog is strangely quiet after his last speech. Crickets.

#41 InvestorsFriend on 08.18.17 at 8:39 pm

Ironic Response on Ignorance

#17 Dan on 08.18.17 at 6:18 pm innocently said:

You can lead a horse to water, but you cannot make it drink. I don’t expect any 80 year old to even understand the process you describe. My own parents certainly don’t even understand how banks work, let alone some “stocks and bonds”/

Age is no excuse for ignorance. — Garth

********************************
True…

#42 Nonplused on 08.18.17 at 8:40 pm

Beth’s case is one of the few I have heard where I think a reverse mortgage might be a reasonable option. I think she should look at her predecessors in her family and kind of get an outlier as to how much longer she should expect to live. 20 years (to 100)? 10 years (90)? If she really has nobody she can think of to leave the house to (not even nieces and nephews back in Britian? How about her late husband’s relatives?) she may as well come up with an arrangement to liquidate the house at least partially even if she wants to stay in it for a while more. But at 80 it seems pointless to upgrade the house. If it was good enough until now why wouldn’t it be good enough for another 10 years? Seems like a waste of money to do renovations you might not live to see completed, a rare case where the money would be better spent on a cruise.

On Terry and Bekki I don’t agree with Garth that an emergency fund is “archaic”, but he’s certainly right that a year’s worth of money is excessive. I think most people advise 2 month’s expenses. The most common “emergency” is a job loss for whatever reason but 2 months should give enough time to either secure another job or work out the next steps like selling securities or the house. A line of credit is one way to deal with an emergency, and so is a credit card, but in both cases one has to assume that there is a way to pay it off after the emergency is over. Sometimes emergencies take a long time to resolve, for example after losing a job the next job might not pay so well so paying off the line of credit might be difficult even after adjusting your lifestyle to the new reality.

In any case none of these stories are as bad as many of those out there. There are people who not only have a mortgage, car payment, credit card debt, etc. but they also went out and bought an RV and a boat and maybe a quad or a motorcycle all on credit.

The mortgage is ok, you need a place to live arguing about whether to rent or own a house is just arguing optimization, some expense is unavoidable. Most of it actually even when renting wins you still have to pay the larger part of what owning would cost. Let’s throw 75% out as the number, assuming equivalent housing.

The car payment is also ok you probably need a car, but most people tend to buy more car than they need and thus finance more than they need. To me it is surprising that Porsche, Mercedes, BMW, Volvo even, why do these brands even have financing available? If you can afford a Porsche you probably shouldn’t need to finance it. Get a Honda Civic it goes just as fast if you obey the posted limit. Don’t get me wrong, I think Porsches are cool, but they don’t have any purpose other than showing some bling for the average person. If you aren’t planning to take it to the track you don’t need it. You don’t even want it. You just want to show off. Of course they have that Cayenne SUV thing now but really? A Porsche SUV?

But the other toys are just silly. If you can’t afford a boat cash, you can’t afford one. Believe me I know. A boat spends way more time in the shop per hour of use than a car does. Motorcycles can be an economic purchase, they get good gas mileage and you can probably get something decent for $4,000 used, but most people go for a $40,000 Harley and you never get the money back on gas. Most people aren’t even using them to commute, they just ride them around aimlessly on the weekends.

#43 S.Bby on 08.18.17 at 8:50 pm

Garth is the “Dear Abby” of finance.

#44 Edmonton on 08.18.17 at 8:53 pm

Why do realtors, car salesman and investment advisors always have the answers for the other guy???? My experiences have shown me that it’s common for realtors to live at home with parents, car salesmen usually don’t own a vehicle or if so it’s a beater and Investment advisors don’t usually have much invested.

You need more experience. — Garth

#45 conan on 08.18.17 at 8:56 pm

Bannon out, is big stuff.

Trump is going to pivot like no one has ever pivoted before. His Presidency depends on it.

Being bold here, he signs the Paris Accord.

#46 Pete from St. Cesaire on 08.18.17 at 8:56 pm

Conspiracy time: Reverse mortgages only allow you to keep living in your house for as long as you are able to. Afterwards the bank gets full ownership. But what if these lousy banksters start (or may already be) getting (bribing) social services and the public curators office to start declaring elderly people unfit to remain at home many years in advance of when that might really become the case just so they can essentially ‘evict and sell’.

#47 crossbordershopper on 08.18.17 at 8:59 pm

DELETED

#48 Smoking Man on 08.18.17 at 9:10 pm

Who’s ready for Briebart Canada?

Just saying. … I’ve slayed every lefty loon on here for years. No compition vs my alien mind. Even pissed òut of my brains they can’t hold a tourch to the smoking man.

Time to take on the globalists as an occupation vs a hobby.

Who has Bannons cell.

War on.

#49 ShowbiZZa on 08.18.17 at 9:18 pm

I have been a regular blog dog for at least 9 yrs and only ever commented twice. I recall arguing with people at dinner parties since 2008 saying that Toronto prices will go down.

We starting looking to purchase a bung or a semi in 2008 and I remember thinking that it is too expensive to pay $280k on a home. We held off and waited until 2014 to seriously look at purchasing again. By then the exact houses we were looking at had doubled in value. Although thinking we might possibly be buying at the peak we purchased a bung in an amazing neighbourhood just shy of $600k.

I also remember thinking when we bought that Garth would approve of this buying decision. Real estate 101 – buy one the smaller homes in an expensive neighbourhood. After we bought prices started to increase at an unsustainable amount as you all know. We decided around Nov 2016 that it might make sense to sell soon as we might be reaching tulip mania. All booms have a bust in the classic cycle. Some last longer than others. By the time March and April hit we started thinking we better list. We listed in May and sold in June. Took a price cut and adjusted our expections as the market chilled super quick. We only had one offer in a month. We took it … to the bank today. We closed. A 350k price increase in 3 years. Best part is we don’t have to move as we are leasing our home back from the buyer. The deal works perfectly for both parties. We will finally be debt free with a nice down payment for the next house.

I have to give Garth props for his education. Part of my real estate savvy has come under the tutelage of GT. Thanks Garth for all the time and effort you put in this.

For those on the sidelines – my take is that the market will see an unprecedented explosion of listings in September for those wanting to cash out at spring prices. They will be sadly disappointed when they realize that that ship has sailed. I think the shit hits the fan around Oct-Jan with interest fees increasing, out of control debt levels, OFSI changes, FONGO, HAM gone to Ottawa/Montreal, buyers not wanting to catch a falling knife, MSM starting to get negative.

However as prices and sales collapse watch for the Wynne government to try and prop up the spring market so they get re-elected.

Might be a buying opportunity Oct-Jan.

I might vultch or wait for the knife to fall further.

Things are getting interesting but let’s face it – we need a correction in this super bloated market.

I’ll be celebrating with the boys tonight for an actual done deal. Grateful that it don’t fall through.

Cheers!

Happy housing correction ;-)

#50 Smoking Man on 08.18.17 at 9:19 pm

45 conan on 08.18.17 at 8:56 pm
Bannon out, is big stuff.

Trump is going to pivot like no one has ever pivoted before. His Presidency depends on it.

Being bold here, he signs the Paris Accord.
…….
NOT chance. No pivot. MSM is about to face a challenge they never dreamed of.

Can’t say anymore.

#51 Capt. Serious on 08.18.17 at 9:20 pm

@ #1 Ian on 08.18.17 at 5:18 pm

Of course the USA has a trade deficit with most countries. Largest consumer society in the world. Duh.
The US has 20t total in debt. Eventually the creditors will unplug the stereo and the party will be over.
And why would they do that? The creditors want to get paid and know the USA is still in a good position to pay when they lend them money. You want them to lend money to Columbia instead? The money has to go somewhere, and the USofA is still the most important economy in the world.
You say the Fed is not data driven, but the job growth and unemployment numbers have been stellar the past couple of years.
You talk of quantitative easing, but that’s over. The Fed laid out their plans to start selling off their bond assets in recent FOMC meetings. Try to keep up.
Mostly you sound like someone howling at the moon because it’s there.

#52 X on 08.18.17 at 9:22 pm

‘Emotional people pay off cheap mortgages. Logical people invest the money, then have more to put against the loan upon renewal.’

If they had the money to pay off the mortgage (and I know they aren’t quite there yet)….would that not be better, then to get a HELOC, and invest the amount, but by being able to claim the investment interest against their income?

Possibly. But leverage amplifies risk. — Garth

#53 Ignorance Is Bliss on 08.18.17 at 9:29 pm

@Investors Friend

I work at one of the big banks. A few weeks ago a new anti-fraud requirement was instituted. We have to ask customers who are opening bank accounts what countries they are a resident of for tax purposes. The disclosure we then read about having to let us know within 30 days of a change in circumstances has to do just with that. Nobody calls us to inform us of losing a job. A couple of years ago my brother got a credit card offer around the same time he lost his job. He ran up the card then claimed bankcruptcy a little while later with no problem. He blamed the bank for offering it to him, said it looked good on them.

#54 45north on 08.18.17 at 9:31 pm

Ian: 4) US auto debt at the end of 2016 was $1.2 trillion, rising 9% from 2015 (much faster than economic growth).

I got the same idea from Wolf Richter – car buyers in the US were in over their heads and credit was being withdrawn:

http://www.greaterfool.ca/2017/08/07/its-still-debt/#comment-533065

#55 Wrk.dover on 08.18.17 at 9:39 pm

#115 Ace Goodheart on 08.18.17 at 1:07 pm

………………………………………..

I keep going back to his one. Totally mesmerising.

#56 dr. talc on 08.18.17 at 9:49 pm

#49 ShowbiZZa on 08.18.17 at 9:18 pm
I have been a regular blog dog for at least 9 yrs and only ever commented twice. I recall arguing with people at dinner parties since 2008 saying that Toronto prices will go down.

We starting looking to purchase a bung or a semi in 2008 and I remember thinking that it is too expensive to pay $280k on a home. We held off and waited until 2014 to seriously look at purchasing again. By then the exact houses we were looking at had doubled in value. Although thinking we might possibly be buying at the peak we purchased a bung in an amazing neighbourhood just shy of $600k.

I also remember thinking when we bought that Garth would approve of this buying decision. Real estate 101 – buy one the smaller homes in an expensive neighbourhood. After we bought prices started to increase at an unsustainable amount as you all know. We decided around Nov 2016 that it might make sense to sell soon as we might be reaching tulip mania. All booms have a bust in the classic cycle. Some last longer than others. By the time March and April hit we started thinking we better list. We listed in May and sold in June. Took a price cut and adjusted our expections as the market chilled super quick. We only had one offer in a month. We took it … to the bank today. We closed. A 350k price increase in 3 years. Best part is we don’t have to move as we are leasing our home back from the buyer. The deal works perfectly for both parties. We will finally be debt free with a nice down payment for the next house.

I have to give Garth props for his education. Part of my real estate savvy has come under the tutelage of GT. Thanks Garth for all the time and effort you put in this.

For those on the sidelines – my take is that the market will see an unprecedented explosion of listings in September for those wanting to cash out at spring prices. They will be sadly disappointed when they realize that that ship has sailed. I think the shit hits the fan around Oct-Jan with interest fees increasing, out of control debt levels, OFSI changes, FONGO, HAM gone to Ottawa/Montreal, buyers not wanting to catch a falling knife, MSM starting to get negative.

However as prices and sales collapse watch for the Wynne government to try and prop up the spring market so they get re-elected.

Might be a buying opportunity Oct-Jan.

I might vultch or wait for the knife to fall further.

Things are getting interesting but let’s face it – we need a correction in this super bloated market.

I’ll be celebrating with the boys tonight for an actual done deal. Grateful that it don’t fall through.

Cheers!

Happy housing correction ;-)

I don’t believe this story, none of it.

#57 For those about to flop... on 08.18.17 at 9:56 pm

Joking Man 9:10 pm
Who’s ready for Briebart Canada?

Just saying. … I’ve slayed every lefty loon on here for years. No compition vs my alien mind. Even pissed òut of my brains they can’t hold a tourch to the smoking man.

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

As long as it’s not a tiki torch…

M43BC

#58 Pete from St. Cesaire on 08.18.17 at 9:58 pm

Fascists are on the far right. As are neo- cons. Nazis are fascists. The left includes socialists and the far left (alt- left, if you will) includes communists.
—————————————————–
You forget; NAZI stands for National Socialist German Workers Party. In other words, Commies.

#59 Ian on 08.18.17 at 9:59 pm

#54 45north

Yep. It’s gonna be bad. Maybe in the sequel to The Big Short, Selena Gomez can have her car repossessed.

#51 Captain – visit the rust belt states, talk to the average person on the street, and ask them how that stellar job growth you’re dreaming about is working.

#60 Scully on 08.18.17 at 10:02 pm

The sequel is going to feature Donald Trump and Steve Bannon and its still a work in progress but the working title at the moment is…

Dude,Where’s My Statue?

It will probably flop…

M43BC
————————————————————
Or you could call it “The Reich Stuff” ;)

#61 Sitting on the toilet thinking on 08.18.17 at 10:10 pm

#35 Howard

What’s your problem with immigration? Last I checked unless your native Indian everyone in this country descends from immigrants. Are you just scared of a little competition

#62 Leo Trollstoy on 08.18.17 at 10:14 pm

What has two thumbs and said deflation wouldn’t be a problem?

http://www.foxbusiness.com/features/2017/08/18/canada-inflation-accelerated-in-july.html

Me.

#63 When Will They Raise Rates? on 08.18.17 at 10:17 pm

#40 Dragonslayer on 08.18.17 at 8:07 pm

#23 When Will They Raise Rates

So you won’t see “globalist neocon financiers” supporting the far left. Makes no sense.

———————————

Obama.

QED.

It makes no sense until you realize that the globalists who have been in charge of US foreign policy for the past 2 decades are indeed neocons and Trump’s foreign policy is incompatible with their agenda.

You mistake the globalists for principled people. Left/right, makes no difference, only power, defense of the dollar and global hegemony matter. By any and all means necessary. They have no principles… They preferred Hillary Clinton over Trump, proving that left/right is of no consequence. She was the neocon pick because she vowed to continue neocon FP, just like Obama before her and Bush before him. It should be crystal clear to all by now that they only allow puppets who they can control into positions of power. Trump was not supposed to happen, now they are scrambling…

If you believe that the neocons – who prop up murderous dictators – consider political ideology when they fund subversive groups, you are sadly mistaken. These same fascists armed and funded ISIS – who behead children – to overthrow Assad. You think they would think twice about funding far left subversive groups in order to bring down Trump?

Turn off the teevee.

As for the alt-left, they too are fascists, it’s not even debatable. If you bring pepper spray, clubs and bats in order to shut down free speech by force, you are a fascist. Just a different flavour of fascist.

A lot has changed in the world since WW2. It’s no longer fascists vs communists. It’s now a cabal of globalist fascists who are employing Marxism in order to erode the rights and freedoms of the people in order to further consolidate power.

This discussion is over. You are perverting the nature of this blog. Go tinfoil elsewhere. — Garth

#64 Smoking Man on 08.18.17 at 10:26 pm

Having drinks with a couple from long Island.
Hate trump.

I’m your buddy I said you can trust me.

Turns out Huge trumps fans. The left bullies all logical minds. Feet of the pack.
Thank you lord for giving me no mind.

Freedom is so under rated.

#65 meslippery on 08.18.17 at 10:31 pm

Even with the $2k vet bill shortly after getting laid off.
#27 Engineer
————————
Vet must have given 5 hours effort for that.
I was not laid off but my dog needed a vet.

#66 Smoking Man on 08.18.17 at 10:34 pm

DELETED

#67 Smoking Man on 08.18.17 at 10:43 pm

DELETED

#68 Entrepreneur on 08.18.17 at 10:57 pm

“We only allow logical people on this blog.” GT…WOW, GT finally admits that we are logical people.

And he said “Never bet against America.” So true and even if Trump is the leader. (Not a question just a statement with a period.)

And power to the people within borders of their country. We fly our flag. And the resources belong to the people within that country, have it work for the people. Remember this when election time rolls around.

TGF

#69 Sock Merchant on 08.18.17 at 11:14 pm

Can we please discuss Justin’s socks and instagram selfies!?

#70 Viorelli on 08.18.17 at 11:15 pm

Commies = open the borders and let everyone in!
Nazis = shoot everyone who is entering our borders
Sane people = lets evaluate everyone on case by case basis, everyone is a human being, some bad humans, some good humans out there.

Those of you who come to this blog to spew hate, keep out. Instead, be appreciative and thankful that someone is providing you with free investing advise and takes their valuable time to help people no matter who they are!

My grandma fought german Nazis in the occupied Ukraine, she was a partisan sniper, her whole village was gunned down and she was later gunning them down mercilessly, even got a red star of honor from the Soviets. She hated the Nazis but also hated the Commies, this is why my parents run away from the USSR. Hate does nothing good for you in the long run. So far we have been lucky in Canada without hating each other, lets keep it that way!

Thank you Garth for all your time and effort that you are investing into this blog, you are helping many people out there.

#71 For those about to flop... on 08.18.17 at 11:16 pm

If any realtor on here wants to give me a price check on a few items I picked up in aisle 5, I would appreciate it…

M43BC

12698 Drummond Pl Surrey. Paid 803 ask 799 sold?

22977 Coulter Crt. Langley paid 1.74 ask 1.89 sold?

5833 Cove Link Rd. Delta paid 1.39 ask 1.49 sold?

#72 Gordon Gecko on 08.18.17 at 11:19 pm

Has anyone else noticed the TSX has been basically flat or negative for the last year?
I’m continuing to divest out of anything Canadian.

#73 Don Quixote on 08.18.17 at 11:23 pm

As a slumlord how do i best make money off these Haitian asylum seekers flooding Quebec??

They each get $700 at least per month, I am hoping to get a large portion of that.

#74 Cici on 08.18.17 at 11:23 pm

#7 Howard

So hilariously true!

#75 When Will They Raise Rates? on 08.18.17 at 11:24 pm

This discussion is over. You are perverting the nature of this blog. Go tinfoil elsewhere. — Garth

What tinfoil? I was pointing out the obvious… But I agree, the content was indeed way off-topic. Sorry about that, wasn’t intentional, just got carried away responding to #40… My bad.

#76 Khalid on 08.18.17 at 11:29 pm

I’m loving these “letters to Garth” in each blog post. Probably fake or made up by Garth himself but very enlightening and entertaining!
Love seeing people take them seriously in the comments section.

Why would I do that? — Garth

#77 Ace Goodheart on 08.18.17 at 11:52 pm

Re: prepayments on conventional fixed rate mortgages: right now most of the fixed rate mortgages taken out in the last year or two actually have negative interest rate differentials.

So you can pay these mortgages with almost no prepayment penalty. Usually three month’s interest is the penalty.

Reason is rates have gone up since the mortgage was taken out.

#78 Yawnnnn on 08.19.17 at 12:19 am

#61 Sitting on the toilet thinking on 08.18.17 at 10:10 pm
#35 Howard

What’s your problem with immigration? Last I checked unless your native Indian everyone in this country descends from immigrants. Are you just scared of a little competition

————————-

Tired, lazy and simplistic statement. Try a lot harder.

#79 true Vancouver on 08.19.17 at 12:20 am

http://cme4pif-thoughts.blogspot.ca/2017/05/dark-money-dirty-real-estate-and-naive.html

#80 Ace Goodheart on 08.19.17 at 12:37 am

So the folks are like Ace why can’t you be more like your brother in law. Equity partner. Six figure income with figure number six being a four. He gets to go to the meetings where the firm’s earnings are divided up. He gets a say in the division. He drives an Audi worth 100k. Lives in tonyville. Wears thousand dollar suits. You dress in rags.

I’m like duuuuuuude. Wait a moment. I go to the meetings where my firm’s money is divided up too. Dif is I’m the only one there. Anyone mind if I just take everything? Nope? Thought not.

And what’s an equity partner? His firm rents their three floors of their bay street tower. Equity in what? They employ a chairman who does nothing and earns 350k. They do have very nice furniture. Strikes me as a ponzi scheme.

And the Audi??? Don’t even get me started. Sucks premium fuel like a mule in heat. Put your foot down you can watch the fuel gauge retreat. And what is a 100k Audi worth in 15 years’ time with 500,000km on the clock? Answer: same as my base model 5spd vw golf will be: $200 for scrap.

Suits: I like to look poor. If Canada revenue ever takes me to court I will come wearing rags.

Wearing $1000 suits tells the world one thing: “I am rich. Please tax the crap out of me”.

Another family argument lost.

Oh well. Bro in law is millions in debt. Fancy house 100k car even the suits are borrowed money.

I’m a multi millionaire. No debt own everything lots of cash invested. Live in a poor neighbourhood in a house I own with no mortgage. Drive a base model vw 5spd golf. Dress in rags. Look poor.

Life is really, really good…..

#81 Deplorable Dude on 08.19.17 at 12:54 am

#40 Dragonslayer…”Also interesting how the pro- Trump peanut gallery on this blog is strangely quiet after his last speech. Crickets.”

Nothing to say….just the latest shiny thing the MsN (aka propaganda arm of the DNC) is attempting to smear Trump…

To quote James Woods….

Climate Climate Climate Wait. Russia Russia Russia Russia Russia Russia Wait. Nazis Nazis Nazis Nazis Nazis Nazis #WhyDemocratsAreDone

I could give you multiple examples of Trump explicitly disavowing/critising/etc the extreme right….the press is pretty much just outright lying now..

As Scott Adams says…we’re watching to different movies.

I’m actually more interested in what Julien Assange is about to say…..

#82 Mark on 08.19.17 at 1:37 am

“What has two thumbs and said deflation wouldn’t be a problem?”

Inflation (deflation) was 0% month over month. I guess that’s an acceleration over deflation, but could very well just be seasonality as well.

Wouldn’t read too much into it. The fact remains that inflation is dramatically beneath the BoC’s policy target. Changes in the CAD/USD$ pair can take a while to filter through to import prices. Falling RE prices and rising consumer credit spreads should continue to provide downwards pressure on consumer prices. The Bank of Canada is sacrificing a significant amount of economic potential with artificially high rates, and being behind the curve in responding to emerging deflation may be sowing the seeds of systemic crisis as Canadian RE prices continue to fall.

Eventually the creditors will unplug the stereo and the party will be over.

Very true. Credit is cyclical over the long term, and credit collapses have occurred to all fiat currencies, whether by deflation or inflation.

#83 I like cookies on 08.19.17 at 2:33 am

“Emotional people pay off cheap mortgages. Logical people invest the money, then have more to put against the loan upon renewal.” — so when I’m renewing the mortgage, I’m cashing out some of my investments to lower the principal? By how much? Why doesn’t it make sense to keep my mortgage as high as they’ll allow it and invest the difference?

#84 Much maligned oft deleted stock picker on 08.19.17 at 3:17 am

Bwahahahaha……which bank is giving out unsecured loc’s these days to bozo’s who are a half underwater already. I get deleted a lot……but that advice needs a time out.

#85 Dan.t on 08.19.17 at 4:38 am

http://www.cbc.ca/news/canada/calgary/royal-lepage-survey-millennial-real-estate-habits-calgary-tops-country-in-ownership-1.4252368

Not sure why I read that junk…notice the last comment to leave reader thinking and just to make sure it’s hammered home by the only “shyster” realturd interviewed.

“Why not own if you can save the rent that just kind of goes to waste?”

Yes, rent is such a waste, the horror, better to owe 750k mortgage, have zero money and eat cat food. At least your friends will think you are successful.

Stupid mentality. It is engrained in Canadians heads and that is why when prices make zero sense, nosebleed prices, they house horny dumb millennials will beg bank of mom and mortgage their soul to “you’re richer than you think”, for life long bank servitude vs. having to rent…oh god the horror.

Canada gov regulates every thing and yet let rental market go out of control and encourage massive speculation but that article sums up why Canadians are so brainwashed…

You can’t read any real estate article without Peter, Jane and Harry from Royal Lepage, Remax and some other vested interest putting in the last gospel comment….

“well everyone knows that real estate only ever goes up” says Peter from…

“Why waste money on rent when you can buy, its just crazy and stupid” says Jane from….

“This is just a blip, everyone wants to live in Milton” says Harry

Basically it’s always a great time to buy says the shyster who’s livelihood depends on selling you a pOS tear down for 1.3 million.

SHYSTERS get to say anything and it gets printed mainstream.

Notice how this is big bold letters middle of the article

‘They don’t want to waste their money renting’

Do Canadians notice this or are hey just sheeple to be sold POS boxes in the sky at any price?

There you go 20% of the economy Canadians selling overpriced real eastate to each other and 60% of CBC, Province “New”, Sun “News” and all other mainstream revenues coming from real estate board. Criminal.

Why can’t any other industry get away with this crap?

No wonder Canadians are so house horny…16 years of real estate truth (lies) have been hammered home by “news” day in and day out. How about an article or two about investing in financial assets…nah, no money in that.

#86 Dan.t on 08.19.17 at 5:17 am

There you go 20% of the economy Canadians selling overpriced real eastate to each other and 60% of CBC, Province “New”, Sun “News” and all other mainstream revenues coming from real estate board. Criminal.

Ok, I made those stats but who cares, that is how “news” does it and how the real estate board does it, plus it sounds better to add doctored up stats.

92% of smart people know that!

#87 Dan.t on 08.19.17 at 5:28 am

http://www.cbc.ca/news/canada/british-columbia/shopping-cart-bridge-abbotsford-1.4253637

http://www.cbc.ca/news/canada/british-columbia/sugar-mountain-water-1.4254106

Ok I know I should not cherry pick articles but having lived a while in 2 socialist European countries, I find this shocking. Maybe it has always been that way in BC?

I guess affordable housing and stable rents really is overrated.

#88 Gravy Train on 08.19.17 at 9:17 am

#1 Ian on 08.18.17 at 5:18 pm

“… US unemployment rates are hiding two very important facts: the explosive increase in part-time work which is not captured, and those who have given up completely which is also not captured. Part-time means no pension, no benefits. The true unemployment rate is likely closer to 9%.”

The Bureau of Labor Statistics publishes six alternative measures of labour underutilization monthly. So no one is hiding anything from anyone.
https://www.bls.gov/news.release/empsit.t15.htm

U-3 is the official unemployment rate, and for July 2017 is 4.3% with seasonal adjustment. U-6 is the measure you’re describing, and for July 2017 is 8.6% with seasonal adjustment. So your estimate isn’t too far off the mark.

#89 Ponzius Pilatus on 08.19.17 at 9:31 am

#40 Dragonslayer on 08.18.17 at 8:07 pm
#23 When Will They Raise Rates

Here’s a simple guide to sorting out who’s who:

Fascists are on the far right. As are neo- cons. Nazis are fascists.

The left includes socialists and the far left (alt- left, if you will) includes communists.

———-
A Nazi was a member of the National Socialist German Workers’ Party.
Not as simple as you think.
Time for a history refresher.

#90 Dissident on 08.19.17 at 9:38 am

#20 Pretentious Hipster Bicycles on 08.18.17 at 6:47 pm

That would be correct. If you’re talking about the “Asia Pacific” region, in the last couple years, 25% of immigrants are from China, 25% are from India, roughly 20% from Philippines (that’s higher than I expected), and 10% from Pakistan. The rest is a mix of ‘other’ which includes South Korea, Sri Lanka, Vietnam. Toronto receives the highest number of new immigrants, Vancouver is second.

China and India have some of the highest populations in the world, so it explains that percentage. These are referred to as “economic immigrants” because they are opportunists seeking “a better life, economically”, better job, better lifestyle, etc. in Canada, rather than refugees fleeing a war-torn country.

However, with the rising tensions between China and India on their shared border in the last couple days, and the weird stuff going on in the Philippines, and the weird stuff in the Korean peninsula…they might have reasons other than ‘economic opportunity’ to leave…

This is worthwhile reading. — Garth

#91 Ponzius Pilatus on 08.19.17 at 9:41 am

#66 Smoking Man on 08.18.17 at 10:34 pm
DELETED
—————-
Uncanny.
Appears that every night a around 10:30, Smokie reverts to his Alian state.
Almost like a reverse Dracula.

#92 Ponzius Pilatus on 08.19.17 at 9:53 am

#88 Gravy Train on 08.19.17 at 9:17 am
#1 Ian on 08.18.17 at 5:18 pm

“… US unemployment rates are hiding two very important facts: the explosive increase in part-time work which is not captured, and those who have given up completely which is also not captured. Part-time means no pension, no benefits. The true unemployment rate is likely closer to 9%.”

The Bureau of Labor Statistics publishes six alternative measures of labour underutilization monthly. So no one is hiding anything from anyone.
https://www.bls.gov/news.release/empsit.t15.htm

U-3 is the official unemployment rate, and for July 2017 is 4.3% with seasonal adjustment. U-6 is the measure you’re describing, and for July 2017 is 8.6% with seasonal adjustment. So your estimate isn’t too far off the mark.
————-
And U-2 is an Irish Rock band.
Sorry, could not resist.

#93 saskatoon on 08.19.17 at 10:12 am

garth et al,

what will be the effect of residential market price decline on residential rents?

#94 Steve on 08.19.17 at 10:14 am

@ Leo Trollstoy

“What has two thumbs and said deflation wouldn’t be a problem?”

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

You come on here making bold predictions with ZERO explanation, disagreeing with people with no reasoning..

But hey Leo, something you might have said in the comment section of a blog in the last 2 years has come through… Congratulations, we all really care!

#95 NoName on 08.19.17 at 10:40 am

Interesting read

China new restrictions on investments outside of China, restrictions include investments in defense, gambling and sex industry.

Funny thing is they are one of biggest developers o casino and resorts around…

http://mobile.reuters.com/article/amp/idUSKCN1AZ07H

#96 rainclouds on 08.19.17 at 11:09 am

Interesting report on Vancouver RE. Blame is reserved for the Gutless, greedy politicians (at every level.)

I dont expect the newly minted Bolsheviks will be any different. Nobody wants the hot potato…..doesn’t matter, implosion can happen regardless

http://siteeconomics.com/

#97 akashic records on 08.19.17 at 12:18 pm

#90 Dissident on 08.19.17 at 9:38 am

#20 Pretentious Hipster Bicycles on 08.18.17 at 6:47 pm

That would be correct. If you’re talking about the “Asia Pacific” region, in the last couple years, 25% of immigrants are from China, 25% are from India, roughly 20% from Philippines (that’s higher than I expected), and 10% from Pakistan. The rest is a mix of ‘other’ which includes South Korea, Sri Lanka, Vietnam. Toronto receives the highest number of new immigrants, Vancouver is second.

China and India have some of the highest populations in the world, so it explains that percentage. These are referred to as “economic immigrants” because they are opportunists seeking “a better life, economically”, better job, better lifestyle, etc. in Canada, rather than refugees fleeing a war-torn country.

However, with the rising tensions between China and India on their shared border in the last couple days, and the weird stuff going on in the Philippines, and the weird stuff in the Korean peninsula…they might have reasons other than ‘economic opportunity’ to leave…

This is worthwhile reading.
http://www.statcan.gc.ca/pub/11-630-x/11-630-x2016006-eng.htm

— Garth

Have the ingenious people of this land ever been consulted?

Will they ever be?

That’s worth discussing.

#98 akashic records on 08.19.17 at 12:22 pm

Indigenous people of this land…

#99 comender on 08.19.17 at 12:37 pm

Last

#100 For those about to flop... on 08.19.17 at 12:46 pm

I don’t care what the Jaguar says ,the only thing that can sweeten up this thread is some Pink Lemonade…

M43BC

#101 akashic records on 08.19.17 at 1:33 pm

#89 Ponzius Pilatus on 08.19.17 at 9:31 am

#40 Dragonslayer on 08.18.17 at 8:07 pm
#23 When Will They Raise Rates

Here’s a simple guide to sorting out who’s who:

Fascists are on the far right. As are neo- cons. Nazis are fascists.

The left includes socialists and the far left (alt- left, if you will) includes communists.

———-
A Nazi was a member of the National Socialist German Workers’ Party.
Not as simple as you think.
Time for a history refresher.

====

Hitler’s The National Socialist German Workers’ Party created a totalitarian political system banning all other political parties.

Hitler’s political party also denied members of the banned political parties to switch side and join them.

With one exception: members of the banned Communist party were welcomed and accepted.

Love for totalitarian political system was overriding the other differences.

Ironically Communists gained similar totalitarian power within three years after WWII in Europe by accusing political opponents for being fascist or fascist sympathizers.

Shortly after Stalin’s Red Army deliberated the slaves owned by the Fascist German state, the Communists started to capture men randomly on the streets of Easter-European cities, transporting them to Russia to serve as slave labor to rebuild the USSR.

The last surviving of slaves of the Soviet Communist state were released about 100 years after America abolished slavery in the US.

#102 Tinfoil Hatter - Comrade Detective on 08.19.17 at 1:37 pm

DELETED

#103 Don't rush to buy it on 08.19.17 at 1:52 pm

DELETED

#104 Why are you afraid ??? on 08.19.17 at 1:55 pm

DELETED

#105 Renter's Revenge! on 08.19.17 at 1:56 pm

#94 Steve on 08.19.17 at 10:14 am
@ Leo Trollstoy

“What has two thumbs and said deflation wouldn’t be a problem?”

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

You come on here making bold predictions with ZERO explanation, disagreeing with people with no reasoning..

But hey Leo, something you might have said in the comment section of a blog in the last 2 years has come through… Congratulations, we all really care!

[ ] not rekt
[x] rekt
[x] really rekt
[x] tyrannosaurus rekt
[x] parks and rekt
[x] star trekt
[x] school of rekt
[x] catcher in the rekt
[x] great rektspectations
[x] rekt it ralph
[x] the shawshank rektemption
[x] forrekt gump
[x] finding rekt
[x] rektal exam
[x] shrekt
[x] rektium for a dream
[x] erektile dysfunction
[x] rektroom
[x] continental brektfast
[x] Brektzit
[x] rektipe for success

#106 Go get a life but display my post first on 08.19.17 at 2:11 pm

DELETED

This blog is being spammed today by anti-immigrant posters. So sad this disease is spreading among us. — Garth

#107 Fake News Again on 08.19.17 at 2:20 pm

DELETED

#108 Fake News Again on 08.19.17 at 2:26 pm

DELETED

#109 For those about to flop... on 08.19.17 at 2:27 pm

Pink Lemonade stand in North Vancouver.

This one is borderline lemonade,but was in my Possible Pinkies folder and they have probably realized it takes more than a panoramic view to get people to spend 2.5million on an 80s build in Vancouver at the moment.

They were asking 2.29 at one point but that seems to high for everyone at the moment.

Assessment comes in at 1.81 and this will probably be their last roll of the dice this year before hunkering down for the winter until the 2018 Spring Fling ,when I expect the market to get exciting again with some motivated buyers clashing with some motivated sellers after a winter of discontent…

M43BC

2355 Panorama Drive ,North Vancouver

Apr 25:$2,398,000
Aug 17: $2,198,000
Change: – 200000.00 -8%

2355 PANORAMA DR NORTH VANCOUVER paid 1.97 ass1.81 ask2.29

https://www.zolo.ca/index.php?sarea=2355%20Panorama%20Drive,%20North%20Vancouver&filter=1

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

#110 For those about to flop... on 08.19.17 at 2:44 pm

Pink Lemonade stand in Burnaby.

These guys have played the game that a lot of the scraps decided to play after no one ponied up their asking price during the Spring Fling.

Dropped the price dramatically to get some eyeballs and then still no action, jack the price back up so that no one laughs at them at Metrotown as the person who lost money on real estate and then lower it back down so they can walk away with not much more than sore kidneys after all is said and done.

Paid 1.2 in March 2016 with an assessment that roughly agrees.

Kenny Rogers is probably the best guy to help them sell this places do would offer this time tested advice…

You’ve got to know when to Holdom ,know when to fold ’em ,know when to walk away, know when to run…

M43BC

130 N Holdom Avenue, Burnaby paid 1.2

Mar 21:$1,380,000
Jul 19: $1,088,000
Change: – 292000.00 -21%

130 N Holdom Avenue, Burnaby

Mar 21:$1,380,000
Aug 16: $1,338,000
Change: – 42000.00 -3%

https://www.zolo.ca/index.php?sarea=130%20N%20Holdom%20Avenue,%20Burnaby&ptype_condo=1&ptype_house=1&filter=1L

https://evaluebc.bcassessment.ca/Property.aspx?_oa=QTAwMDAzV1dYTg==

#111 InvestorsFriend on 08.19.17 at 2:53 pm

Betting Against America

Never bet against America. — Garth (And Buffett)

****************************************
For about 10 years many have bet against America. They thought they had good logic in terms of trillions in unfunded social liabilities. Trillions in debt. Money printing. Trade deficits. Weak banks and on and on.

So far it seems they were too clever by half.

Remember Rule Number 1: “Always assume that Buffett is correct”

In late 2008, 5 months before the bottom of the market Buffett wrote an article in the New York Times about his confidence in American stocks. Headline writers called it “Buy American, I am”. Actually, Buffett never told anyone to buy stocks in that article. He just said he was doing so and was confident of the future.

http://www.nytimes.com/2008/10/17/opinion/17buffett.html?mcubz=1

Diane Francis, for one, criticized Buffett for it and said at the time that Buffett was wrong. She was in clear violation of rule number 1. She was horribly wrong.

http://www.huffingtonpost.com/diane-francis/buffetts-wrong-stay-out-o_b_138046.html

#112 waiting on the westcoast on 08.19.17 at 2:55 pm

#80 Ace says… “I’m a multi millionaire. No debt own everything lots of cash invested. Live in a poor neighbourhood in a house I own with no mortgage. Drive a base model vw 5spd golf. Dress in rags. Look poor. Life is really, really good…”

+1 very smart

I was out with a buddy who is a successful entrepreneur. Sold a business a few years ago and had been doing volunteer projects to build the tech community. He just took a C level job to turnaround a company. He is doing awesome (7 figure portfolio and now a six figure income).

So, we are drinking our one beer because we both are commuting by bike that day and love it. His GF shows up and says he has to buy a car. They live together and she has a car. I say, really, I am thinking about selling our second car because we don’t really need it. She gets that “what would other people say look” and says he needs it for when the weather turns. I said, I am going to take the bus on those days.

In Victoria, you can easily have a one car household except for the judgement you will receive from the neighbours. ;-)

Oh well – I feel for him (happy wife, happy life) but it’s too bad he is going to have to buy a car to satisfy his GFs vanity (especially when he loves to ride his bike so much).

#113 Leo Trollstoy on 08.19.17 at 3:22 pm

Being a multi-millionaire and living poor and then dying with all your money in the bank involves a mental illness

Guaranteed

#114 For those about to flop... on 08.19.17 at 3:25 pm

Pink Lemonade stand in Vancouver.

These guys still have a bit of meat on the bone,but anyone that has been paying attention to what is happening on Vancouver’s Westside knows the guys that bought this tear down are possibly in trouble.Shelling out 3 million in January 2016 ,the landscape has changed dramatically since then.

As I drive to my house that I am working on at the moment I pass a couple of sites that building has started but I have not seen anyone there all summer, when traditionally it’s go-time.The logical conclusion is they don’t think the numbers will work for them at the moment to proceed.

Also while I am talking about work ,I am working a couple of doors down from a 5 million Pink Snow case and the developers I work for told me the other day that no one is presently living there, I presume they know this because they probably enquired do about acquiring the property to develop at a cut price.

The house next door to this one was only finished 3 weeks ago and already has a for sale sign out front after the owners just moved in.

The game continues….but a lot of people in this city seem worn out…

M43BC

3755 W 13th Avenue, Vancouver

May 25:$3,680,000
Aug 16: $3,380,000
Change: – 300000.00 -8%

https://www.zolo.ca/index.php?sarea=3755%20W%2013th%20Avenue,%20Vancouver&filter=1

https://evaluebc.bcassessment.ca/property.aspx?_oa=QTAwMDAwMDJYSA==

#115 waiting on the westcoast on 08.19.17 at 4:06 pm

#113 Leo says… “Being a multi-millionaire and living poor and then dying with all your money in the bank involves a mental illness. Guaranteed”

I think his point is that by living below your means he has been able live a far less stressful life. Knowing you can buy whatever you want takes the need to own it away. I find that you still buy some toys but they are the things you want rather than the expectations of our consumerized (my TM) society.

#116 akashic records on 08.19.17 at 5:08 pm

DELETED

This blog is being spammed today by anti-immigrant posters. So sad this disease is spreading among us. — Garth

Shared experience of human society is that banning discussion of any issue is not making it go away.

Never did.

Freedom of speech is the crystallization of thousands of years of experience.

That’s nothing new to you, of course.

We all sense that dark time has arrived again when one can become guilty just by accusation or “association”.

These forces are much bigger than you, me, this entire blog. It would not happen at the first time that we might be forced to do, what we never wanted to do – while things were normal.

Sadly, at this point anything can happen.
Once again, way too soon after “never again”.

I do not control society. But I do control this blog. The hate stops here. — Garth

#117 Ingrid on 08.19.17 at 5:37 pm

#115
Absolutely agree 100%.

#118 InvestorsFriend on 08.19.17 at 6:56 pm

Bank Fraud with lines of credit

#53 Ignorance Is Bliss on 08.18.17 at 9:29 pm
@Investors Friend

I work at one of the big banks. A few weeks ago a new anti-fraud requirement was instituted. We have to ask customers who are opening bank accounts what countries they are a resident of for tax purposes. The disclosure we then read about having to let us know within 30 days of a change in circumstances has to do just with that. Nobody calls us to inform us of losing a job. A couple of years ago my brother got a credit card offer around the same time he lost his job. He ran up the card then claimed bankcruptcy a little while later with no problem. He blamed the bank for offering it to him, said it looked good on them.

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

Okay right I had to promise to let my bank know within 30 days if I become a U.S. person or something. In that unlikely event I doubt anyone would remember such a promise to the bank.

On running up a line of credit on job loss. If it becomes a problem, you can bet the banks will try to cut people off on job loss. Intentionally running up a line of credit with intention to declare bankruptcy looks like fraud to me.