Get ready

Let’s get ready for next Wednesday.

For the third time in just half a year the central bank will raise interest rates. This is entirely consistent with what the American central bank (the Fed) has done, where the cost of money has popped four times in a year. Remember how this macho but gender-sensitive blog told you our guys follow their guys 92% of the time? Bingo.

In anticipation of the next increase the Canadian dollar has puffed (up 11% in the past year), and now the bond market’s in tumult. Yields in both Canada and the US are shooting higher since the world is inflationary, Trumpian and expanding, throwing off more jobs plus profits and higher rates.

Here, for example, is the 5-year Justin Bond yield. Yup, looks just like the Rockies.

Click to enlarge.

This chart means five-year mortgage rates will be rising, since bonds finance home loans. Meanwhile a central bank rate increase will add another quarter point to the cost of variable-rate mortgages, which float with bank prime. Also about to change are personal lines of credit (typically prime plus 2% or more) and secured home equity lines, or Helocs, usually priced at prime plus a half. Of course, business loans and credit card rates will also be adjusted.

It’s worth reminding that most LOCs secured by residential real estate are demand loans – so the bank can call at any time and demand payment. That may be unlikely now, but not so much if rates continue to rise and house equity declines. It’s also a weird but true fact that four in ten people with home equity loans don’t actually make any payments. The lines just get fatter as additional interest is tacked onto the available principal. Makes you wonder how long this goes on before the lenders want their money back.

Well, six out of six major banks now (as of Monday) say the cost of money will go up next week. The boffo jobs numbers of last Friday convinced most economists the Bank of Canada can wait no longer. Over 78,000 positions were created in December when only 1,000 had been expected. The 2017 jobs total was almost 425,000 and the last 90 days brought more hiring than at any time since 1976, when it was still okay to be a man.

All further doubt of a hike on Wednesday was removed with a survey of businesses, released by our central bankers. It showed widespread plans to invest and hire (50% of corporations will be creating jobs), putting pressure on the labour pool and likely leading to a shortage of workers. That washed away any further doubt we’re on the same path as those craven Yankees.

But unlike Americans, families on this side of the line have been steadily piling on more personal debt and are now massively vulnerable to rising rates. While over-borrowed homeowners think ‘the government’ will keep rates low in order to protect them, it’s not happening. Unfortunately a lot of people will be rate road kill over the next three years.

But could central bank boss Stephen Poloz choke, answering the prayers to thousands of slanty-semi owners with $900,000 mortgages?

Maybe. You never know. But no rate hike next week would surprise the markets, certainly leading to a big dollar bust. A cheap loonie is unhelpful when Ottawa’s wrestling a pig over the NAFTA deal, and seen by the Trumpians as an unfair trade advantage. So, the mortgaged are sacrificed on the altar of trade. Did they think they were special?

Lock in your mortgage. Money is still plentiful and cheap by historic standards.

Buy short bonds, which are not so impacted by rate increases.

Buy rate reset preferreds. They’ve been tracking higher along with the cost of money and provide insulation against central bank tightening.

Watch that home equity line. The cost is rising, and so will minimum interest charges. If you live in an area where house prices are wobbly, you could get The Call.

Don’t buy real estate. Not yet. Too much uncertainty between mortgage costs, the stress test and markets falling into a serious imbalance between the number of listings and lookers. Buyers of one year ago are licking their wounds, praying for a market advance. Many won’t make it. Then you can pounce.

207 comments ↓

#1 Stan Brooks on 01.09.18 at 5:07 pm

Central bank boss?

The guy can not manage his own crap/verbal diarrhea.
Rates should have been 5 % by now.

#2 crossbordershopper on 01.09.18 at 5:07 pm

if the 5 year cdn bonds closed at 2.013%, i think it will rip upwards to 3% during the year, a far cry from .7% a year ago. so if the spread is 1.5% a 5 year fixed is 4.5%, so the stress is 6.5%. later in 2018 and into 2019 we will turn over and head into a recession, rates will rise to say 4-5% on the 5 year, with the usual spread and the stress test. we havent seen stagflation in a generation, its time.
dont trust the numbers there all cooked, inflation is everywhere, you think paying some kid 15 bucks is not inflationary.
oil will rise to 70 bucks since the saudies need it at 75 wti to float their share offering. they will make it happen.

#3 conan on 01.09.18 at 5:14 pm

“Many won’t make it. Then you can pounce.” – Garth

What kind of discount on today’s prices would get you back in to the Toronto market? Vancouver? Kenora?

Steve Bannon……… shooed away like a pesky fly by Trump. Time to load up on life insurance. I would not want to be this guy.

#4 HouseCry on 01.09.18 at 5:17 pm

Rate should be 5%, not 1%. Watch inflation spikes sharply. Oil going to 70.

#5 The Limited Sage on 01.09.18 at 5:21 pm

It amazes me the amount of Canadians with their heads still in the sand over rate hikes.

Ignorance really is bliss.

#6 Screwed Canadian Millenial on 01.09.18 at 5:30 pm

“The 2017 jobs total was almost 425,000”

Just keep in mind we brought in about 320,000 and we still have about 1.2 million Canadians unemployed. Not to mention all those under-employed and dropped of the labor force. This is not racism, just economic facts.

Also keep in mind that TFWs are added to those job creation figures which is crazy.

“But unlike Americans, families on this side of the line have been steadily piling on more personal debt and are now massively vulnerable to rising rates.”

That’s because wages for workers go up in America. Not so much in Canada. Unless mandated of course by Wonderful Wynne or Nice Notley. Nice to have such great women in charge of Ontario and Alberta.

Canadians’ Real Wages Are Shrinking. Is That Why We’re Falling Into An ‘Endless Debt Cycle’?
http://www.huffingtonpost.ca/2017/07/11/canadians-real-wages-are-shrinking-is-that-why-were-falling-i_a_23025302/

#7 ETFingGoodTime on 01.09.18 at 5:32 pm

guys and/or gals, I have HPR right now for my preferreds. Should I sell for ZPR laddered rate-resets?

any other single ETF cover rate-resets better?

Cheers!

#8 Roial1 on 01.09.18 at 5:33 pm

Eat snow all you out there.

(Sent from the beach in Belize)

THANK YOU Garth for the sage financial advice.

Al

#9 paulo on 01.09.18 at 5:38 pm

people whom bought last year with first mortgage money
in the [email protected] yr fixed range will be facing 9 to 11% at renewal 5 years out, in addition the reality of a loss of 40 to 50% of mark to market actual value.
speckers and armature landlords are toast, best advice: get out now the initial loss is always the lowest.
thinking of buying: take a cold shower and give your head a shake. revisit the real estate market in late 2019
and reap the rewards of patience!.

#10 The Technical Analyst, CSTA, CPD on 01.09.18 at 5:39 pm

I’ll just add one thing for those watching the market:

Get ready for a 5+% dip coming up (before end of February), buy the dip.

#11 'Then you can pounce ' on 01.09.18 at 5:43 pm

On what ?

Instead of paying $1,200,000 for a blah home in Vaughn we’re to pay $975,000 ?

Ship sailed

#12 Andrewski on 01.09.18 at 5:44 pm

…”weird but true fact that 4 of every 10 HELOC-holders don’t actually make any payments”! WTF!

Is financial illiteracy so rampant that 40% of HELOC-holders are just burying their heads in the sand?!

Wow. Sad.

#13 Jungle on 01.09.18 at 5:47 pm

Yup and if wcs recovers say hello to a big boost in gdp, oil jobs in Alberta.

Inflation will be higher than expected because of gasoline, food and minimum wage increase.

#14 Poloz sees no inflation on 01.09.18 at 5:48 pm

Newsflash: Poloz will NEVER, EVER, EVER HIKE interest rates BECAUSE THOUSANDS OF YUPPIES (Urban professionals for you youngins) depend (no pun intended) ON that 85 FLOOR CONDO TOWER at BLOOR ONE to be completed, sold, and speculated by investors by the end of this year!!!!

Raising interest rates will only cause sales to decline at nearby Swarovski, Tiffany’s, Reitmans, Harry Rosen, D & G, Gucci, Hermes and Louis Vuitton!!!

#15 Bob Dog on 01.09.18 at 5:50 pm

73% of homes in the lower mainland of shitish columbia are over $1 Million dollars. Thats pretty strong evidence that the government of Canada is a terrorist organization receiving orders from a criminal banking cartel.

I suppose the puppets had to jack minimum wages. Young Canadians are one reno-eviction away from burning politicians at the stake.

#16 Smartalox on 01.09.18 at 5:50 pm

BC assessment figures out last week, and already the words around the water coolers are about how people’s assessments went DOWN (the first time that’s happened to some in quite a while).

Given that assessments in January 2018 are based on values taken at July 2017, values have been steadily declining for the past 6 months, and only NOW are the locals getting wind of the situation.

Of course, the debtors are always the last to know. BC Assessment, your lender(s), even the Flopper are all way ahead of them.

Get your HELOCs under control, people;

You’re poorer than you think, a lot sooner than you think!

#17 acdel on 01.09.18 at 5:52 pm

Good post Garth; yep who knows, I figure that it’s 51% to 49% that rates will rise, but???

Love that pic!

#18 Trump on 01.09.18 at 5:53 pm

Listen in…… How our corrupt Canadian politicians will destroy the economy just like they did in the early 90’s

Trump got it right!!!!!!

https://youtu.be/Rksd80-FCAw

#19 For those about to flop... on 01.09.18 at 5:54 pm

Hillary Clintons loss taught any woman who has designs on becoming the first female President of America the number one rule not to break.

Do not cackle under any circumstances…

M43BC

#20 david on 01.09.18 at 5:56 pm

How many people noticed the picture on the wall. I call that attention to detail. Nothing funnier than watching a golden and a peanut butter filled Kong.

#21 Linda on 01.09.18 at 5:57 pm

I just shake my head at the ‘weird but true’ fact about 4 out of 10 not making any payments against their home equity lines of credit. Yes, rates have been at historic lows & yes, the funds that could have made a payment could have instead been invested as it made more sense financially. I’m guessing that most of those non-payees did not invest & are working on the presumption that their HELOC will easily be paid off when they sell. Or maybe they just ‘forgot’ they owed the money?

#22 Shawn on 01.09.18 at 6:06 pm

“Buy short rate bonds” has been the narrative for the last 3+ years. Yet it has been short rate bonds that have significantly underperformed long bonds. Could this trend continue?

#23 Guy in Calgary on 01.09.18 at 6:11 pm

Reporting from the trenches. People are genuinely concerned about this. I’ve seen some nasty things lately, a lot of “too little, too late” unfortunately.

#24 Zapstrap on 01.09.18 at 6:14 pm

I dunno, mixed messages, sounds like Garth still wants to keep the dawgs at bay … and we all know it’s cats that pounce.

#25 Happy Housing Crash Everyone! on 01.09.18 at 6:18 pm

Many will go bankrupt and lose it all in the monster GTA housing crash .

Cheers everyone. Happy Housing Crash Everyone! :-)

Oh yeah

https://betterdwelling.com/81000-canadian-real-estate-buyers-failed-new-stress-test/

Its over you dirty SHYSTERS. :-)

#26 X on 01.09.18 at 6:18 pm

Not even close to when to buy RE. Patience. The toughest part will be for many home owners to get through the denial/hope stage when selling.

Also to note, also rising will be the cost of business loans…further squeeze on Tim Hortons franchisee owners…Metro (Toronto) had an article today showing the min wage hikes cost about $7000 per year per employee…factor in 10 employees…thats an extra $70,000 in labour expenses. Yikes.

#27 Howard on 01.09.18 at 6:27 pm

Oil may well go to $70/75 but Canada won’t benefit as the bottleneck continues with no relief in sight.

Thank the eco-fascist know-nothings; Saudi suppliers and supertanker operators are probably sending them love letters.

#28 Howard on 01.09.18 at 6:30 pm

Not exactly impressed with ZPR’s performance but I’ll still keep it as a small portion of my portfolio.

#29 Long Branch Apprentice on 01.09.18 at 6:37 pm

Poloz will hold, citing uncertainties around NAFTA. The real reason, of course, is there is little to no wage inflation. Unless, of course, you’re in a few select fields, dominated by handy men.

Snow in the Sahara, must be due to all the anthropomorphic CO2 in the atmosphere.

#30 YVR Housing Update on 01.09.18 at 6:46 pm

This speech from BC Attorney General David Eby says it all, the true super high cost of Real Estate in British Columbia, this is a must read:

http://davidebymla.ca/wp-content/uploads/sites/14/2018/01/Transparency-International-Speech.pdf

#31 Screwed Canadian Millenial on 01.09.18 at 6:49 pm

“Why not just make the minimum wage $1,000,000. Then everyone could be rich. All problems solved. Hmmmmmmmmmm…..” – Economist in training Ben Harper.

Do conservatives ever realize how stupid they sound when they think this is a credible argument? All it does is show the bankruptcy of their ideology and how it’s based on idiocy.

If only Steve hugged his son a little more often. Evil Robot Jr. might turn out even worse than his dad.

The absolute gall that Ben is complaining about hard working Canadians at the bottom of the economic rung making a little bit more money when his dad personally enriched himself to record levels off the public purse. Government is bad? Government sure was good to Steve Harper.

Stephen Harper Will Soon Earn His Four-Millionth Dollar As A Federal Politician
http://www.huffingtonpost.ca/2015/09/14/stephen-harper-salary-4-million_n_8137382.html

Stephen Harper was such a terrible person that Garth had no choice but to leave his beloved Conservative Party.

#32 will on 01.09.18 at 6:50 pm

Haha. Trailer park dog. Where’s Julian Ricky and Bubbles?

#33 Screwed Canadian Millenial on 01.09.18 at 6:56 pm

Such great memories. Always brings a smile.

https://www.youtube.com/watch?v=iuGq78uN5qY

#34 TheDood on 01.09.18 at 6:58 pm

#11 ‘Then you can pounce ‘ on 01.09.18 at 5:43 pm
On what ?

Instead of paying $1,200,000 for a blah home in Vaughn we’re to pay $975,000 ?

Ship sailed
__________________________________________

I don’t think so. Shrinkage will be a whole lot more than that. The upward surge of rates + stress test + shrinking wages (due to higher taxes) place huge numbers of potential buyers on the sidelines. If you think all these people who bought overpriced RE they couldn’t afford in the first place will be able to hang on in the years to come, think again. Maybe some will, but most won’t be able to. The market will correct to whatever people can afford to buy. There are few people in Canada who can afford an 800 or 900K house, never mind 1 mil +. In two or three years, those homes in Vaughn will tank to half (probably less), mark my words. Be patient and take advantage of the investment landscape, double digit opportunities are everywhere – except real estate.

#35 Guy in Calgary on 01.09.18 at 6:58 pm

The unfortunate part in this is that if people were able to keep their other spending in check, they’d be able to afford their homes. Mortgage payments on their own are manageable, as is calculated when they first qualify. Unfortunately, there’s a scary amount of unsecured debt floating around out there that seems to have been incurred post home purchase. Combine that with gradually raising rates and we have some issues.

An awful lot of denial out there I think.

#36 Raincouver on 01.09.18 at 7:03 pm

DELETED. Once more and you’re gone.

#37 Andrew Woburn on 01.09.18 at 7:06 pm

America is the greatest country in the world, if you can afford it. And who cares about the poor anyway cause its their own damn fault. For them “Freedom’s just another word for nothing left to lose.” – Kris Kristofferson.

“American kids are 70 percent more likely to die before adulthood than kids in other rich countries. A new study ranks 20 wealthy countries on childhood deaths. The US comes in last.”

https://www.vox.com/health-care/2018/1/8/16863656/childhood-mortality-united-states

#38 Hoopla on 01.09.18 at 7:10 pm

Housing prices can go to the moon for all we care. No dip of any kind will ever make Toronto or Vancouver homes prices even remotely accessible to the median income. That ship sailed in 2011 and will never return in this lifetime or the next.

Even in 2011 the prices were already ridiculously out of reach to the average Torontonian…and then the pricing went to a whole next level no one ever imagined. Done. Kaput. Finito. Sayonara.

#39 People Listing Haven't Gotten The Memo on 01.09.18 at 7:10 pm

Ridiculous, greedy GTA sellers still listing for insane prices for dumps. I am so tired of these greedy, delusional sellers, I personally will be happy when they get smashed. Have been going on mongohouse to view solds in the GTA, so far not many. . .looks like a chilly January indeed for these greedy sellers and greedy realtors. Happy Housing Crash 2018!

#40 Andrew Woburn on 01.09.18 at 7:12 pm

Live by the mouth, die by the mouth.

Goodbye, Sloppy Steve, banished from Breitbart.

Let’s hope this is a precedent for populist nutbars.

https://www.axios.com/bannon-steps-down-from-breitbart-1515531865-997e7908-962a-4e4b-b8b9-5319eacdbb35.html

#41 JSS on 01.09.18 at 7:13 pm

When the bank “calls” the line of credit, what happens if you don’t have the money?

It’s secured, remember? – Garth

#42 Real Estate Greed Is Ugly on 01.09.18 at 7:14 pm

These delusional sellers, with their maxed out credit cards, jumbo mortgages and HELOC’s don’t realize – all the dummies that want to hang themselves on monstrously huge mortgages can no longer get access to the funds! Hello Stress Test, Hello Higher Interest Rates.

#43 The Limited Sage on 01.09.18 at 7:16 pm

Hey SCM, you moron.

“Wonderful Wynne, Nice Notley?”

http://www.macleans.ca/opinion/wynnes-minimum-wage-math-doesnt-add-up/

“Another argument advanced for raising the minimum wage is to keep pace with inflation. Here, every provincial government has massively overshot the target.

With a look back as far as the data goes, here’s what the 1965 minimum wage would be today in every province after adjustments for inflation (and which ranged from 70 cents to $1.05): Newfoundland and Labrador: $5.41; New Brunswick, $6.18; Quebec and Manitoba, $6.57; Saskatchewan, $7.34; Ontario, Alberta, British Columbia and Prince Edward Island: $7.72; and Nova Scotia, $8.11.

In short, if that’s your argument, time to find a new one. In general, the focus on the minimum wage skips two useful issues:

First: Is it the best way to help the working poor? Answer: no, because the policy ignores the need for productivity gains and cash flow if wages are to be raised; it also ignores how targeted help is always better than virtue-signalling by governments using other people’s bank accounts.

Second: If politicians really wish to help those with minimum skills and poor job prospects, here’s some advice: stop killing blue-collar employment relative to the geographic or natural advantages that exist in those same provinces.

That includes manufacturing jobs in Ontario killed off by ever-higher power prices and well-paid resource sector jobs in B.C., Alberta, Quebec and in Atlantic Canada—oil, gas, mining and forestry exists in all those places—that get killed or are never created in the first place because of government policy and/or chronic opposition to development.”

Jobs of which both Wynne and Notley have destroyed.

#44 You Had Me at Rate Hike! on 01.09.18 at 7:16 pm

Oh baby, I love myself a good ol’ rate hike. Hike it baby, hike it!

#45 PastThePeak on 01.09.18 at 7:18 pm

We’ll see what Poloz does. It is even odds at best. This guy does not like to do what is expected of him. First thing he did in office was cut twice when no one thought it necessary. Then sat on his hands during the 2nd phase of the great bubble, until raising twice quickly when again not expected he would. And standing pat again. Odd.

So now that every analyst thinks he should, do you really think he will follow the advice? Maybe the data is so overwhelming he has little choice, but if he does, you can be sure he will hate every minute of it.

Like many central bankers, he can hide behind the “official” inflation numbers while talking concern over the high dollar and NAFTA. He would sooner have to play catch-up to inflation (and surprise everyone!) rather than raise moderately. And he wants a dollar below 70c anyways.

#46 Burn Baby Burn on 01.09.18 at 7:18 pm

Looks like the rooster is finally coming home to roost! This should be fun. A lot less Audi’s on the roads lately, I LikE It!

#47 For those about to flop... on 01.09.18 at 7:18 pm

Smartalox on 01.09.18 at 5:50 pm

Of course, the debtors are always the last to know. BC Assessment, your lender(s), even the Flopper are all way ahead of them.
///////////////////////////////

Yep,when a dumbo from Tasmania is ringing the alarm bell ahead of people who should know better ,then lookout.

Everything that I have seen suggests that Vancouver is 15 months into a stealth correction.

To say that this correction has been extremely uneven is an understatement to say the least.

In between the different segments and the different locations ,2017 saw a lot of market compression.

The immediate area that surrounds the house that I live in is down 10/20% ,depending on if it’s in knockdown condition or ready to move in.

And yet maybe 15/20 blocks away houses on Fraser st are being gathered up and sold to developers at record prices which of course keeps the numbers up for the rest and the illusion to anyone not paying attention that nothing has changed.

I believe I did open a few peoples eyes on here even if it took me a couple of thousand posts.That was also part of the plan,to gather addresses at different stages and see if any patterns emerge.

There was a lot of conjecture,especially at the start of 2016 as to what was happening and so I knew it was going to take more than just a few houses to convince people that the problem was more widespread than my neighborhood.

There are a couple of people on here that I’m not particularly fond of ,but overall a pretty good bunch and as much as we can we should try to look out for each other.

You can get sick of too many opinions but you can never have too much verified information…

M43BC

#48 Chaddywack on 01.09.18 at 7:21 pm

Totally believe the stats that a large portion of people don’t pay any principle on their loans

I remember going to a local Lower Mainland of BC credit union who shall remain nameless and the rep signed me up for a line of credit.

Anyway he told me “All we require is interest only, most people just max their LOCs out at $10k or $20k and just pay the interest because why not. The interest is just the price to have a good life.”

I couldn’t believe what I heard…..I wonder how many of these time bombs are sitting around in HELOCs.

#49 Give Me My $14 Bucks! on 01.09.18 at 7:22 pm

Greedy Tim Hortons, give me my $$$$

Greedy Sellers, keep your crappy houses!!

Starving Realtors, give back your Audi’s**

Milton, keep your faux brick exterior and beige 12oz carpeting!!

#50 yes on 01.09.18 at 7:23 pm

“Buy short rate bonds” has been the narrative for the last 3+ years. Yet it has been short rate bonds that have significantly underperformed long bonds. Could this trend continue?

………..

never fails with prognosticators. Keep in mind some were saying to decrease USA exposure mid 2017. How did that one work out?

i don’t bother with noise anymore, other to chuckle. The prognosticators always remind us of their right calls. Some can never detach from ego, even whislt playing the foll

#51 crowdedelevatorfartz on 01.09.18 at 7:33 pm

Got an interesting email from the Feds today.

Seems if you’re a private contractor and have to update your security clearance to work on federal jobs…..
They have now changed the security clearance rules to include…….a credit check.

Seems people with huge debt and or bad credit are assumed to be a “security risk”…..
Last time I checked most Canucks were living pay day to pay day with huge debt.
Apparently someone forgot to point that out to Public Works Canada
Should be fun seeing how many people lose their security clearance…….

#52 earlybird on 01.09.18 at 7:36 pm

Great post, as always. I think he will wait on the January hike…the excuse will be the stress test..

#53 PastThePeak on 01.09.18 at 7:37 pm

That $7k / employee impact for Tim’s seems quite high. I realize it is not just the $14 min wage – there is increased CPP for those over 18, and the impact of paying some leave days (2) and vacation – but again not for the students.

A Tim’s has about 35 staff, but only at the busiest times would that approach 10 total working. Overnight it is 1, and during late evenings often 2 (maybe 3). So maybe average of 4 over a 24 hour day. For 364 days (they close on Christmas for most), the $2.6 increase is ~$90k a year increase in costs. Or about $2.5k/employee. That assumes everyone gets the increase. Hard to see how other changes are double. So let’s keep to something closer to reality.

Now, ~$100k in increased costs is HUGE!! An average Tims might clear between $200 – $300k for the owner, AFTER 5+ years of funneling all that into debt payments. So you are talking a huge impact to the bottom line. Let’s see if any salaried guys here would tolerate even a 10% haircut without screaming bloody murder.

No wonder the bus owners will cut other costs. Anyone would.

My brother in-law owns some Tim’s in Alberta, and my son works at one here in Ottawa, so yeah, I know real shit (unlike some on this blog)…

#54 FourInTen on 01.09.18 at 7:38 pm

Garth,

What is the source for the “4 in 10” homeowners not paying anything on their LOC fact?

#55 crowdedelevatorfartz on 01.09.18 at 7:40 pm

@#181 Oprah not Opara you Idiot!

I dunno.
Opara has a nice ring to it…..sounds more exotic in a weird sorta way.
President Opara. President Opara.
Yup.
Works for me.

#56 Alessio on 01.09.18 at 7:42 pm

Dude. SHIP HAS SAILED. If anyone wants to buy a house let them. Prices won’t go up or down substantially. If they do my money is on prices going up. If we waited 10 years still no crash why wait another 2 years for 5% off? If they even come down. And I’m not talking about a 2.5 million $ Home being reduced. Who cares about those. I mean a 1.2 million coming down to 850k ain’t gonna happen.

#57 LivinLarge on 01.09.18 at 8:10 pm

“Is financial illiteracy so rampant that 40% of HELOC-holders are just burying their heads in the sand?!”…in a word, YES.

If you have read the comments here for as little as a few weeks then I am surprised you ask the question even if rhetorically.

95% of people are wrong 95% of the time. That’s what makes “common sense commonly wrong”

I applied for a tax reassessment 8 months ago and got it today but the data entry gnome put part of the changes in the wrong line i.e a credit rather than into income AND then applied double the actual income change in another year.

This is why we don’t want the lowest paid CRA employees being the ones doing the basic entry work at minimum wage.

And since the help lines are no longer actually manned at CRA, what used to take a phone call to correct, now takes another letter (at least one likely) and another 8 months plus to hopefully correct. Garbage in… garbage out.

#58 Danny on 01.09.18 at 8:10 pm

When economists are so off on projections :

“Over 78,000 positions were created in December when only 1,000 had been expected”

Garth does this not make you wonder and question these so called forecasters ?

We would not listen to weather forecasters if they were this far off.

These economic forecasters of course never release their detailed forecast models and numbers and have no accountability to the public.

Very much like the real estate boards…..making promotion statements without showing their research numbers and again not accountable to any public scrutiny for their basically ” sales pitches ”

Sounds like Pathetic Trump…….using toddler vocabulary to constantly try to sell himself…..with nothing from him to back up his sales pitch. Just believe superlative me, he says ” I’m the greatest, I’m the best, I’m the smartest….blah, blah, blah, blah……BLAH.”

At least Garth you use and shows us facts before you draw conclusions and why I keep following you and why you are so interesting and encourage feedback from us less informed.

I am encouraged by Obama saying that we should engage with others outside of our slanted bubbles .

#59 salmon rear end arm on 01.09.18 at 8:23 pm

When the bank “calls” the line of credit, what happens if you don’t have the money?

It’s secured, remember? – Garth

LOL

#60 Doug t on 01.09.18 at 8:24 pm

Take the profits 2018 has to give and then get ready to exit stage left

RATM

#61 SimplyPut7 on 01.09.18 at 8:32 pm

Maybe 2018 will be the year Canadians learn some basics that were taught in Intro to Business/Economics/Accounting:

1) You can’t expect to raise business expenses by 21% and think that there won’t be any unintended consequences.

2) You can’t remove cars from one of the most prosperous streets in Toronto to save less than 3 minutes of traffic. We are not Denmark, very few people aside from couriers and food delivery services, use bikes in Toronto in winter when it’s very cold and/or there is snow on the ground. Cars are still a dominant mode of transportation to get across the city of Toronto. And the reliance on cars increases the further away from the city centre you go.

http://www.cbc.ca/news/canada/toronto/toronto-mayor-john-tory-king-street-pilot-project-1.4478974

3) You need to have savings to buy things. You are not Tesla or Netflix who can have shareholders fund their negative cash flow. If you have a lot of debt you are vulnerable to interest rate hikes. And no one will come and rescue you.

Your bank/private lender never cared about you, low rates were due to where we were in the economic cycle and competition with non-bank lenders, which B-20 will destroy. The credit unions who are still pumping low mortgage rates, will get what’s coming to them as soon as the savers they rely heavily on to finance mortgages given to subprime borrowers, realize big banks (and alternative banks owned by big banks) are raising their saving rates in relation to the rate hikes; and the credit unions are decreasing or refusing to raise their savings rates to maintain the minimum net interest rate spread they need, at the expense of savers, to prevent people they should have never given money to from defaulting on their debt.

The realtors, flippers, and speculators have seemed to disappear from the comment section (except for people pumping Vancouver real estate). Are you in hiding from your creditors or the buyers/sellers you told to buy homes now or wait to sell because home prices go up forever?

Good luck with that $1 million mortgage and the $400,000 investment condo sitting on your credit line.

#62 tccontrarian on 01.09.18 at 8:33 pm

What’s that smell?

Is it…’panic’? You mean RE doesn’t always go up?
2018 is going to be good year:

1. pot stocks, then
2. gold, then
3. energy, then
4. all short, then
5. all cash – probably in that order.

In 2019-20, I will think about buying back into RE, …
we’ll see.

TCC

#63 the Jaguar on 01.09.18 at 8:34 pm

“”@ #35 Guy in Calgary on 01.09.18 at 6:58 pm
The unfortunate part in this is that if people were able to keep their other spending in check, they’d be able to afford their homes. Mortgage payments on their own are manageable, as is calculated when they first qualify. Unfortunately, there’s a scary amount of unsecured debt floating around out there that seems to have been incurred post home purchase.””

Couldn’t agree more. And if you are a ‘Guy in Calgary’ you also know that two out of every three vehicles that cruises down your Calgary streets is a big fully loaded pickup truck or other massive SUV, all of which cost 75,000 and up, partly due to the lien on the existing vehicle that needs to be paid out as part of the new financing. If people think housing debt is beginning to look like quicksand, take a look at big auto debt. Or big RV debt. Boats, too. Big debt on depreciating assets as the world moves in the direction of electric cars, self driving cars, car sharing, or maybe just ditching that car for a Harley in the summer and a southern climate in the winter. Squeeze in a little public transit in between and there is money to be saved and otherwise invested. The scary amount of debt you refer to that seems to occur after the home purchases is ‘part deux’ of keeping up with the Jones’s. First the purchase of the home that really isn’t affordable for the income level, then comes racked up credit cards and lines of credit for new furnishings (cause the old stuff doesn’t work anymore don’t ya know and there are people who need to be impressed), landscaping, basement development, new kitchens and baths, paying back the bank of mom for any downpayment provided, or maybe just a boob or bum lift to feel one is truly living the Kardashian lifestyle.

Until that moment, as Garth alludes to above, when…
“the Call” comes.

#64 Brunett43 on 01.09.18 at 8:40 pm

Thanks to Garth, and the advice I’ve taken from him since I became an adult (many moons ago) I am mortgage free and over 75% of my assets are invested and diversified as per Garth’s ratio’s.

Life is Good!

#65 Leo Trollstoy on 01.09.18 at 8:47 pm

#58 Danny on 01.09.18 at 8:10 pm

Now this person is self-aware!

Anyhoo I called inflation and higher interest rates as well. USDCAD under pressure cuz Canadian economyand job creation is awesome!

You’re welcome.

#66 Brian1 on 01.09.18 at 8:48 pm

Trump held a meeting today which debunks Michael Wolf’s book.Even the left wing media was astounded
with Trump’s performance. What a change.

#67 ANON on 01.09.18 at 8:49 pm

US 10 year treasury at 2.555%, trend lines broken in 10Y and 5Y. Time to tighten the chinstraps and evaluate the popcorn stash.

#68 Currency Man Ip You Later on 01.09.18 at 8:50 pm

If he doesn’t raise the rates this time then it will be pretty obvious that Canada is a currency manipulator.

Although the real reason they don’t want to raise rates is because they know it will inflict pain on the idiotically indebted populace. Canada is a GHS – Global Housing Superpower, without it Canada wouldn’t have an economy. Sad!

#69 conan on 01.09.18 at 8:51 pm

As far as I know Timmies competitors are going to raise their prices and pay the new wages. So, Timmies is putting their foot down and reducing in other areas( benefits and breaks) so that they can be cheaper then the rest of the coffee in a paper cup market?

I will just go to the other coffee places. You lost me Timmies.

#70 Invesrx on 01.09.18 at 8:56 pm

FINALLY the “bond market forces” will push up interest rates this blog was expecting years ago.

This broken clock will be correct! Congrats.

Rates have been rising for more than a year. – Garth

#71 Smoking Man on 01.09.18 at 9:01 pm

Bonds away!!!!

If you didn’t sell the dead cat bounce in Oct you’re doomed.

By spring every 4th house will have a for sale sign on the lawn. Unless your a civil servant with a coshy job and pention.

This with the massive attack on small business by T2 and Wynee will have massive negative consequences on the economy.

#72 Screwed Canadian Millenial on 01.09.18 at 9:04 pm

#53 PastThePeak on 01.09.18 at 7:37 pm

God I love how you people do math. Such lying, twisting, SOBs.

First of all what Tim’s has 35 full time employees? NONE.

You got your numbers from some franchise organization and just took their word for it. That’s the thing about you boomers. You always bow to authority don’t you. Without ever questioning anything. You never thought to run the numbers yourself?

Pretty simple.

$2.40 x 40 x 52 = $4992

Add about 7% for CPP and EI. $4992 x 1.07 = $5341.

Nowhere near the 7k you’re claiming.

So they did the math based on a full time employee then claimed the average Tim’s has 35 full time employees which is a load of crap. Wouldn’t be surprised if it’s 20 part timers which let’s say is the equivalent of 10 full time positions.

That’s an extra $53,410 in costs.

Average Tim’s franchisee was making $265,000 in NET PROFITS in 2008. Probably much more now. Most boomers/conservatives don’t know what profit means. That means AFTER expenses including rent, interest, royalties, wages, etc.

https://ca.news.yahoo.com/tim-hortons–always-profitable.html

That’s before counting the extra revenues they’ll be making thanks to workers having more money in their pockets.

So don’t worry, they’ll be just fine. These franchisees aren’t hurting. The greedy pigs have been stuffing their pockets on the back of cheap labour for far too long.

Let’s not forget, these are the same franchisees that cried there was a labour shortage so severe that they needed TFWs.

I hope Tim Hortons crashes and burns and a better coffee franchise opens in its place. I should start a Screwed Canadian Millennials Coffee Co. We only hire Canadian. Starting wage $15 and I don’t have a foreign conglomerate to answer to.

#73 Screwed Canadian Millenial on 01.09.18 at 9:06 pm

#69 conan on 01.09.18 at 8:51 pm
McDonalds has better coffee, they haven’t raised their prices (they may and that’s fine), they’re not bitching publicly like Tims and their employees look to me to be local and happy. I’ll never buy from a Tim Hortons again.

#74 Manpreet on 01.09.18 at 9:10 pm

@Smoking Man
I disagree. Justin Trudeau is an economic guru. He is highly intelligent and will make Canadas economy soar like an albatross over the snow capped peaks of Patagonia. Canada is lucky to have such a steward with such economic intellect and prowess. Canadas housing market is a gem and a miracle and must be celebrated. Tremendous wealth has been created.

#75 Nonplused on 01.09.18 at 9:13 pm

Rising interest rates, stubbornly high oil prices that still aren’t high enough so that oil companies can make money, rising taxes, the new squeeze on small businesses, rising carbon taxes, and price pressure from rising minimum wage laws. Where do they think all this money is going to come from?

It is certainly clear that passing high school math is not a prerequisite for politics.

I predict, well I am not the first so how about I say I agree with the predictions, that we are entering into a “long emergency” based on the fact that energy is no longer cheap and the economy cannot sustain growth without energy. More of it. More every year. Right now we are scrambling just to keep up with where we were. If energy could ever be cheap again, we wouldn’t need to frack shale. That’s expensive business.

Wind and solar are no solution, because they won’t scale to the mass required. But they help a little bit.

Energy conservation helps, but there are limits to that. A car can only be so efficient and so small before it ceases to be a car. The thermodynamic limit for an expansive gas process is 50%, and combined cycle gas fueled power plants get pretty close, but an internal combustion engine will only ever “approach” that efficiency, and will certainly never exceed it.

Insulation helps, but it takes years and tons of investment to retrofit the older housing stock to more efficient standards. Replacing older furnaces with high efficiency models helps, but even here you can’t go beyond 100% efficiency and we’re already at 95% for the most efficient models.

Electric cars don’t help anything because you have to generate the electricity to charge them and then carry around all those batteries. Extra weight means less efficiency. Electric cars are probably the transport solution once we find a way to generate the electricity required, but not before.

Nuclear is probably the only long term viable solution that will scale. However with current technology the spent fuel is nasty stuff and I can’t see how it doesn’t eventually kill the whole planet. Some people see great potential in Thorium fueled reactors (because the spent fuel wouldn’t be as nasty) but I’d like to see one get built and running before passing judgement.

In short, I believe we are wandering straight into the worst crisis mankind has ever experienced, as the global fossil fueled battery becomes increasingly more expensive to exploit. We’ve always known this would happen eventually, but eventually seemed like a long ways away. But I think it started in 2006. It’s not a process that happens all at once though, it’s not like a car running out of gas which runs fine until the tank is empty and then just stops. It’s more like it costs more to fill the tank each time until you can’t afford to do so anymore.

And then to pile carbon taxes on top of it all! It’s literally sinister, something only the devil could devise. Especially when it’s fricking cold out there! How does Nutley expect me to heat my house? She really is evil personified. It won’t work. People don’t have the money to pay an 80% tax on heat.

It also makes a joke of the new $15 dollar minimum wage. In addition to making a lot of basement dwelling teenagers into taxpayers, because they didn’t raise the personal exemption, a good portion of the raise will just go right back to the government in the form of carbon taxes, because every single thing you buy is supported by the consumption of fossil fuels in it’s manufacture. Yes, it is. Even a bag of Doritos is mostly spent carbon fuels. The farmer that grows the corn uses diesel to run his tractors and irrigation pumps. Then he ships the corn using a diesel truck. Then the plant uses natural gas to dry and fry the corn. Then the cheese type flavoring comes from a whole other line of production involving lots of fuel. Then it gets put in a plastic bag made from natural gas (ethane). Then another truck drives the bags to the store. The store then has to be heated and lit. Finally it gets to you. That tasty Doritos is 5% corn and 95% fossil fuels. Yum! And now it is all Carbon taxed! Anyone who taxes Doritos is just pure evil.

And I use Doritos as an example, but a potato is the same. Maybe it’s raw when you buy it but it still came from a farm with a tractor via a truck, and then you cook it, carbon taxes all the way along. Carbon taxes are an evil, sinister plot devised by the devil herself.

And carbon taxes are extremely regressive. The poor spend a much higher portion of their income on things like heat, Doritos, and potatoes than the rich do.

Ever wonder why, when fueling your car in Calgary, it is still $1.24 a liter when oil is only $40/bbl in Alberta? Carbon taxes (and all the other taxes). Wait until oil goes back to $80, you are going to $hit your pants filling up. Which is a shame, you won’t have the money left to buy new ones.

#76 For those about to flop... on 01.09.18 at 9:20 pm

#66 Brian1 on 01.09.18 at 8:48 pm
Trump held a meeting today which debunks Michael Wolf’s book.Even the left wing media was astounded
with Trump’s performance. What a change.

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

Even a ratbag like myself can behave for one hour ,once a year…

M43BC

#77 Rick on 01.09.18 at 9:20 pm

Love little T. Keep charging and adding to our debt, we love it. Someone else will pay for it.

#78 mike from mtl on 01.09.18 at 9:23 pm

#7 ETFingGoodTime on 01.09.18 at 5:32 pm
guys and/or gals, I have HPR right now for my preferreds. Should I sell for ZPR laddered rate-resets?
////////////////////////////////////////////////////////

ZPR is full RR preferreds that’s the one to get. On the upside it’s great but when rates fall that one is brutal.

Something like PFF on the US is different as they tend to issue perpetuals which are mostly unaffected by bond rates. However it pays in real dollars, great in an RRSP due to no withholding tax.

#79 When the Whip Comes Down on 01.09.18 at 9:34 pm

“no rate hike next week will surprise the markets” Poloz is the King of market surprise, does it all the time doesn’t he? We’ll see if he does the right thing next week.

#80 Fulcrum on 01.09.18 at 9:41 pm

Simple question: with the US raising rates as frequently as they have over the past year + why is it that the value of the US dollar pegged to the other global currencies has fallen 10% over the same time frame.

If you can’t answer that question then maybe there is some other things going on that you aren’t considering.

#81 paracho on 01.09.18 at 9:43 pm

Great advice once again .

#82 The Boulder on 01.09.18 at 9:43 pm

Fair housing plan + stress test for insured + rate hike + stress test for uninsured + more rate hike. If the market still survives, it would mean we have no understanding of the forces driving the GTA/GVR markets.

#83 Lorne on 01.09.18 at 9:47 pm

DELETED

#84 karlhungus on 01.09.18 at 9:47 pm

Lock in your mortgage as in call in and lock in your current variable? Or if you are renewing lock in ?

#85 paracho on 01.09.18 at 9:50 pm

Garth et all…

Any good Canadian rate resets you recommend … Looking to rebalance my rrsp portfolio and looking for more preferred alongside the ones I own already.
Thanks

#86 Screwed Canadian Millenial on 01.09.18 at 9:56 pm

#80 Fulcrum on 01.09.18 at 9:41 pm
>Simple question: with the US raising rates as frequently as they have over the past year

Inflation. Which is accelerating.

http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

>why is it that the value of the US dollar pegged to the other global currencies has fallen 10% over the same time frame.

Deficits. Trump is running $1 trillion a year deficits and he’s not exactly known to be good with money.

#87 down_boy on 01.09.18 at 10:05 pm

Get ready is right. Get ready to duck and cover. Buy ‘Marican, you say?
https://www.reuters.com/article/us-usa-trump-weapons/exclusive-trump-to-call-on-pentagon-diplomats-to-play-bigger-arms-sales-role-sources-idUSKBN1EX0WX
Yeah right, all for jobs. What’s in your ETF?

#88 Long-Time Lurker on 01.09.18 at 10:11 pm

#111 Ardy on 01.08.18 at 11:11 pm
Garth, novice question you or the blog dogs can hopefully answer – when referencing performance of a balanced approach vs other conservative/aggressive approaches, is the performance results for an invested amount at the start of the period over said period, or is it for an initial investment plus regular (weekly/monthly/quarterly/yearly) investments?

>Try asking Ryan Lewenza on a Saturday. He can answer your question well if he feels like it.

My shot: The single investment or accumulative don’t matter because the asset allocations remain the same in either (say 60%/40%) and the performance will remain the same (say 7%). The only difference is the amount of capital in play.
You can go from aggressive to risk reduction by decade 70/30 for the first ten years then 60/40 for the next ten years, etc. but I wouldn’t recommend it. I’d say a 70/30 aggressive/safe is a bad idea now that everyone is factoring in a correction. I’d go with Garth’s 60/40.

>By the way, all the smart money is saying the same things right now which is the same as what Garth has been saying.

#89 LivinLarge on 01.09.18 at 10:11 pm

“Lock in your mortgage as in call in and lock in your current variable? Or if you are renewing lock in ?” Does it really matter? A variable resetting is effectively renewing a mortgage mid term only the real term remains the same and the payment remains the same thus pumping your principal portion owed at full term renewal time. If you have a few years to go to full term renewal then get it fixed ASAP but if you only have a few months to go to full term renewal then nt much benefit.

The underlying point Fearless Leader is making is “DON’T HAVE A VARIABLE RATE MORTGAGE IN A RISING INTEREST ENVIRONMENT” or you’re gonna get screwed.

If I an speaking out of turn Fearless Leader, forgive me.

#90 For those about to flop... on 01.09.18 at 10:14 pm

Pink Snow falling in Burnaby.

The Twitter feed that Lost…but not leased pointed out to me has done some Burnaby addresses.

I picked out the two below to follow.

Some of the others are off the market and others like Morley and Ramsay have already been run on here by myself before.

Whatever happened to Flopper Fan?

Do you think they secretly wanted me to fail…

M43BC

6008 6th st ,Burnaby.

Paid 2.42 Feb 2017 asking 2.58

https://www.zolo.ca/burnaby-real-estate/6008-6th-street

2230 Kensington Ave,Burnaby

Paid 1.4 May2017 asking 1.54

https://www.zolo.ca/burnaby-real-estate/2230-kensington-avenue

#91 karlhungus on 01.09.18 at 10:24 pm

I would love to watch SCM start a company. I give the over/under 3 months for bankruptcy

#92 Hugh Janus on 01.09.18 at 10:25 pm

Trust me on this one. 1980, may have been 1979, dont recall but doesnt matter. Went to the red bank to renew my mortgage and damn near crapped myself. The [email protected] said no problem all done your new rate is 21%!! Holy shit i had to sit down. Talk about fongo (fear of not getting out).

To keep to a short story, nobody gives a rats ass about stupid people. Stupid doesnt set the interest rates as garth explained. If you go in over your head there isnt any department of feel bad for stupid people that you can apply to for help. You will have to figure it out yourself.

Best to be on the sidelines for this one coming up. If not, take advantage of low rates and pay that shit off!

#93 ETFingGoodTime on 01.09.18 at 10:27 pm

#7 ETFingGoodTime on 01.09.18 at 5:32 pm
guys and/or gals, I have HPR right now for my preferreds. Should I sell for ZPR laddered rate-resets?
////////////////////////////////////////////////////////

ZPR is full RR preferreds that’s the one to get. On the upside it’s great but when rates fall that one is brutal.

Something like PFF on the US is different as they tend to issue perpetuals which are mostly unaffected by bond rates. However it pays in real dollars, great in an RRSP due to no withholding tax.

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

very cool. I think I’ll sell my HPR for ZPR tomorrow, unless anyone else has a recommendation for a better preferreds ETF going into 2018? Anyone… Bueller… anyone?

#94 toronto1 on 01.09.18 at 10:30 pm

#38 Hoopla
#56 Alessio

I believe that you are mistaken, actually i know you are mistaken.

think you will be shocked at how fast interest rates rise this time around, what that effect will be on prices.

any takers on what a 5-6% interest rate does to housing (with a qualification of 7-8% with B20) ?

expect banks to lessen the discount on their spreads as rates rise- as total new mortgage dollar amounts decrease due to lower demand and prices, banks will adjust their spreads to maintain profits.

its over- 2017 prices will not be coming back for 15-20 year, 2017 was 1989 in the GTA market, it took buyers 13-14 years to break even from 1989 onwards on a inflation adjust basis…..

that window of selling while breaking even or taking a small loss is closing very fast- 1-3 months left at max- after that the first phase of panic and fear will set in and the desperate will sell dropping prices- after that wave- the holdouts will sell 3-6 months later realizing that hope is not tangible- from there on out it will be bleak

#71 Smoking Man on 01.09.18 at 9:01 pm
Bonds away!!!!

If you didn’t sell the dead cat bounce in Oct you’re doomed.

Your not the only person that saw that………..

#95 S.Bby on 01.09.18 at 10:34 pm

$998,000
MLS® Number: R2229937
6227 PORTLAND STREET, Burnaby, British Columbia V5J2S3

A house on the Burnaby south slope for under $1 million and way under assessed value. This is unprecedented.
Assessment $1,221,100

These are bailing speculators…

#96 Mark on 01.09.18 at 10:40 pm

“Simple question: with the US raising rates as frequently as they have over the past year + why is it that the value of the US dollar pegged to the other global currencies has fallen 10% over the same time frame.”

Higher rates are needed to compensate for a falling currency. So rising rates imply currency weakening. I know, this might not work as a ‘small signal’ model (so don’t go trade on it!), but over the longer term, the strongest currencies in the world are the ones for which the interest rates are the lowest.

The problem with the US economy is that despite their enormous GDP, the economy isn’t productive enough, in actual productivity to cover its consumption. Hence, the giant trade deficits.

Canada, however, has developed a robust productive capacity in the area of exports, and thus will have a structurally strengthening currency for many years, if not decades to come.

There is ample historic precedent to believe that a rising rate environment is toxic for the US economy (ie: the 1960s and 1970s could serve as no better example), while on a comparative basis, such is dramatically better for Canada. Conversely, falling long-term rates imply a rise in “financialization” and the rise of intellectual and consumptive industries which has proven to be extremely lucrative for the United States since the early 1980s relative to Canada.

#97 Classical Liberal on 01.09.18 at 10:44 pm

Sometimes I think that maybe, just maybe, SCM is a satirical poster. That she’s simply a caricature of what a triggered, entitled, regressive millennial is.
….
Nah, she’s actually that obtuse.

#98 VicPaul on 01.09.18 at 11:00 pm

#28 Howard
Not exactly impressed with ZPR’s performance but I’ll still keep it as a small portion of my portfolio.
_______________

When Garth suggested CPD eighteen months or so ago, I started buying – spins a nice 5+ cent monthly divvy, has steadily gone up from mid-twelve dollar range and is presently kickin’ ass! What’s not to like?

#99 and the budget will balance itself on 01.09.18 at 11:04 pm

can anyone recommend a safe country to live, low cost of living, universal healthcare and great weather. Im done with PONZI HOUSING NATION

#100 Ace Goodheart on 01.09.18 at 11:05 pm

Yeah this bull housing run in Canada is finished.

But in the States there is a new housing bull run just getting started. US banks stand to benefit from this as the US bull housing run is happening in a rising interest rate environment. Sort of like if you discovered a way to make water run uphill…..

#101 Fulcrum on 01.09.18 at 11:07 pm

#86 “>why is it that the value of the US dollar pegged to the other global currencies has fallen 10% over the same time frame.

Deficits. Trump is running $1 trillion a year deficits and he’s not exactly known to be good with money.”

Not really. That would imply that other nations are running a surplus. All nations are running deficits….global debt is skyrocketing. Europe still has stimulus.

The traditional western structures that protected the reserve currency status of the US dollar are failing. Read up on the demise of the Peter dollar and more recently other financial systems in the eastern world that are systematically unwinding the dependency on the US dollar.

#102 Screwed Canadian Millenial on 01.09.18 at 11:07 pm

#91 karlhungus on 01.09.18 at 10:24 pm
I would love to watch SCM start a company. I give the over/under 3 months for bankruptcy

——————–

All I need is a small loan of $1 million from daddy.

Hell when I bankrupt 6 companies, I win the jackpot and can run as a pro-business conservative. A bunch of morons would make be President in a heartbeat.

#103 bobswzain on 01.09.18 at 11:10 pm

Going to cash for 2018. Expecting a 25% drop in market and possible black swan event.

#104 Smoking Man on 01.09.18 at 11:19 pm

#97 Classical Liberal on 01.09.18 at 10:44 pm
Sometimes I think that maybe, just maybe, SCM is a satirical poster. That she’s simply a caricature of what a triggered, entitled, regressive millennial is.
….
Nah, she’s actually that obtuse.
…..

She’s defiantly a chic, writing style gives it away. If she put 1/2 The effort she does on here coming up with business plan and executing it she would become rich.

She good.

Unfortunately she won’t get there for a long time. The damage her communist teachers did to her brain needs a lot of therapy and time.

I bielve she will make it one day and look back at this moment and think. What the hell was I thinking back then.

#105 45north on 01.09.18 at 11:36 pm

Smoking Man: By spring every 4th house will have a for sale sign on the lawn. Unless your a civil servant with a cushy job and a pension.
This with the attack on small business by Justin Trudeau and Kathleen Wynne will have massive negative consequences on the economy.

you’re right – the number of listings in the GTA is about to explode. You sold at the peak – the peak is gone and it ain’t coming back.

325 Perth Avenue sold for $848,625 in 2014. Let’s say 10% appreciation a year – it should be worth $1 million. Easy. So there’s going to be a hundred houses for sale – very comparable – and they’ll all want $1 million but nobody’s going to buy them – but there’s somebody who owns his house outright – no mortgage – he sells because he has to – $700,000 minus 5% commission.

http://www.greaterfool.ca/2014/01/23/the-wars/

#106 PastThePeak on 01.09.18 at 11:41 pm

#72 Screwed Canadian Millenial

SCM, f*ck but you are a stupid moron! You really shouldn’t comment on stuff you know nothing about (assume it would be pure silence then). First you didn’t even read my post where I was saying that the $7k figure was way too high).

But I think my kid who works at Tim’s knows how many staff work there more than you, dumb ass. It is about 35-40 total staff, almost all part time. Only a store manager is full time fool!

The increased expenses are how many staff hours are worked – not how many full time staff there are, you idiot.

You clearly know absolutely nothing about this, so why don’t you keep your lazy millennial leftist trap shut.

#107 april on 01.09.18 at 11:49 pm

# 16 – condo assessments are way up, at least in the Lowermainland bc. People are the upper end are having their property taxes reduced while the people at the lower end are going to be paying alot more for their taxes according to Ross Kay.

#108 ozy - Hail Trump lol on 01.09.18 at 11:54 pm

Hail Trump lol

here’s another mandate coming…. wondering who’s gonna be called to the throne in 7 years? Is gonna have to fill in HERO size shoes … :))

#109 april on 01.09.18 at 11:57 pm

#90 Flop, now that people are looking at their huge assessments, well at least on condos, we think many are going to relist at a much higher price hoping people will be gullible enough to buy their home?? Some will and soon to regret.

#110 Smoking Man on 01.09.18 at 11:58 pm

Trump going to Davous WTF

Ha. The heart of the globalist agenda.
My call. He’s going there to lay down the law.

#111 ozy - ENGINEERS PLS STOP on 01.10.18 at 12:00 am

Real fun to see all of those born financial “engineers” play with numbers and various “logical” scenarios. like total incompetent but cute babies I mean :)

wake-up kids, no one makes $$$ following the ‘correlations’ ….duh duh – the real $$$ bambinos is made by finding a way to reject the logical arguments this article and commentaries are full of.

Happy that I’ve found a way and will be laughing shortly as the foolness gets exposed

#112 NV Landlord NO MORE on 01.10.18 at 12:32 am

I learned a new expression today:
“tdlr” – means too long to read!
gotta love it
some of these posts are just tldr!

BUT what is B20? I missed several weeks of postings, I cannot figure this out unless it is merely the reference to the now income / mortgage stress test.
Thanks everyone for posting but especially the SHORT posts.

#113 Yorkville Renter on 01.10.18 at 12:35 am

#72 – troll comment “probably more now”…

do you mean expenses? like property tax, hydro, garbage collection, insurance (business and building), repairs, accounting, technology, new equipment, store refresh, supplies, materials, uniforms, snow removal

or do all these expenses stay the same?

what about the manager who was making $14/hr – do they get a raise?

your ignorance is showing…again

#114 Bring on the Inflation on 01.10.18 at 12:41 am

Timing has been great! Bought first home in 2003 (4.54% for 5 years). Never would have guessed that this would be “peak rate” over the amortization as family was happy we got a great rate for the time. Moved up the housing ladder in 2008 (rolled the dice and won) and went variable for the first time. Saved a ton of interest due to falling rates for 8 years (prime minus 0.80) and then locked it in Nov 2015 at 2.54%. Balance will be paid on or before 2020. Hope rates are through the roof because it’s time to do even more serious investing! I know many that feel paying down a mortgage when rates are low is the wrong move but it sure feels right when you see rates rising and know that all debts will be paid and investments rising in a nice balanced portfolio .

#115 NoName on 01.10.18 at 1:09 am

#66 Brian1 on 01.09.18 at 8:48 pm

Brian you disappointed me…

Wolfy as sleazy he is, he is not stupid, many things he wrote in a book he has it on tape, and other stuff might be overegzaturated but it’s probably close to truth. Why all of sudden ban on cellular phones.Way administration acted on a news regarding a book it gives it more legitimatemacy that it should have…

#116 Vanecdotal on 01.10.18 at 1:09 am

Re: #30 YVR Housing Update

Saw that speech link on Eby’s site yesterday, agreed it’s a must read to explain how we got here. Smells a lot like *forward guidance* re: 2018 BC Budget. He strikes me as a principled dude, I think rooting out fraud/corruption/tax evasion may become his cause célebre, good on him.

His reddit Q&A “Ask me Anything” from @ a year ago is lengthy but very enlightening. This is the most transparency I’ve ever noticed thus far from any politician, (regardless of stripe).

https://www.reddit.com/r/vancouver/comments/4pcd1e/im_david_eby_mla_for_vancouver_point_grey_and_bc/?st=jc7ct88o&sh=3e29735f

His background as a lawyer for Pivot Legal Society points to someone who walks the walk re: general injustice, fighting for the downtrodden, i.e. not in the legal profession, nor politics for the money.

#117 kiwiSaver on 01.10.18 at 1:12 am

How can you tell if your preferreds ETF is “rate reset”?

I have the iShares S&P/TSX North American Preferred Stock Index ETF (CAD-Hedged) – But can’t see this specified in the fact sheet…

#118 Sue on 01.10.18 at 1:17 am

Our governor for the bank of canada, i prefer “the boy that cried wolf” Lost all credibility. Then theres our finance minister…God help us

#119 Ray on 01.10.18 at 1:28 am

#80 Fulcrum on 01.09.18 at 9:41 pm
Simple question: with the US raising rates as frequently as they have over the past year + why is it that the value of the US dollar pegged to the other global currencies has fallen 10% over the same time frame.
If you can’t answer that question then maybe there is some other things going on that you aren’t considering
—————————————–
I think it all comes back to Trump. If investors lose trust in Trump, they lose trust in the USA, and then they lose trust in the $USD. The irony is Trump wants a lower $USD for better exports, but I doubt he would want it because global investors believe he is loony. I believe everyone who associates with Trump will always have a stink about them, no matter how much they wash afterwards.

#120 Dee on 01.10.18 at 1:31 am

Totally agree with post #94. I think end of February is the last chance to exit before everyone realizes and a bit of panic sets in.

Also, love him or hate him, smoking man has made some of the best calls on housing over the years

#121 Dolce Vita on 01.10.18 at 1:36 am

Yes, yes, we believe you Garth.

The REAL OTHER story this year will be NAFTA getting torn up.

That will impact our Banks as much, perhaps worse, than the value of their RE assets going down. All those uninsured loans the Banks have been making for RE will come home to roost.

Write-downs coming by mid-year…of course if Assets go down; thus, so must Liabilities + Equity (the latter case in point).

Blame Luca Pacioli.

#122 Vanecdotal on 01.10.18 at 1:42 am

Interesting link from David Eby’s reddit Q&A, posted by Eby:

From 2011, straight from the mouth of Mark Carney, former BOC Gov. http://www.bankofcanada.ca/wp-content/uploads/2011/06/sp150611.pdf

Pg. 6 “Domestic demand factors are not the only forces at work. Some Asian wealth is being invested in selected international housing markets as those investors seek out diversification and hard assets. This has become a familiar phenomenon in this city. Partly as a consequence, the average selling price of a home in Vancouver is now nearly 11 times the average Vancouver family’s household income, a multiple similar to those seen in Hong Kong and Sydney cities that have also become part of a more globalized real estate market. Such valuations are extreme in both Canada and globally (Chart 16).

Given such developments, one cannot totally discount the possibility that some pockets of the Canadian housing market are taking on characteristics of financial asset markets, where expectations can dominate underlying forces of supply and demand. The risk is that expectations become extrapolative, prompting the classic market emotions of greed and fea. Greed among speculators and investors, and fear among households that getting a foot on the property ladder is a now-or-never proposition.”

Note the chart: http://www.bankofcanada.ca/wp-content/uploads/2011/06/sp150611.pdf

#123 jane24 on 01.10.18 at 2:22 am

I have also noted in the last few weeks that our regular RE pumpers have dropped off the radar except for the Vancouver ones. When agents are quiet, you know it is bad as I have been one. You either pump in the good times or stay silent in the bad ones. Says it all. We are just sales people, we need to sell to earn and not financial experts after all.

I think that your horrible winter will be the nail in the coffin as folk will just get out of the habit of competing for houses and do something else with their free time. Plus sales have been brought forward from Spring 2018 to Fall 2017 due to B20. Same people can’t buy twice.

Always makes me laugh when Audis are held up on this blog as luxury cars. They are made by VW and sell in Britain and Europe for the similar prices. Just basic German family cars. Used a lot in Britain along with Mercedes as jobbing police cars.

#124 Fake News Again on 01.10.18 at 2:22 am

If we are going to re-cap the “Jobs Report” lets remember that 30% of said jobs…..were Govt Workers….which means when you include “higher pay” than us plebs, benefits, pensions and overhead….the other 70% of jobs that pay income tax – lets say 35% – are going to keep the taxpayer underwater. Yet again….another phoney statistic as the parasite called Govt grows and grows and grows.

#125 Tony on 01.10.18 at 2:32 am

Re: #96 Mark on 01.09.18 at 10:40 pm

New economics?

For thousands of years in the past when interest rate rose so to did the underlying currency.

#126 slick on 01.10.18 at 2:57 am

#7 ETFingGoodTime

I’m looking at ZUP, US rate reset pref’s.
5% dividend.

#127 Tony on 01.10.18 at 3:10 am

Re: #79 When the Whip Comes Down on 01.09.18 at 9:34 pm

It won’t surprise me.

#128 T on 01.10.18 at 3:31 am

#72 Screwed Canadian Millenial on 01.09.18 at 9:04 pm
#53 PastThePeak on 01.09.18 at 7:37 pm

God I love how you people do math. Such lying, twisting, SOBs.

First of all what Tim’s has 35 full time employees? NONE.

You got your numbers from some franchise organization and just took their word for it. That’s the thing about you boomers. You always bow to authority don’t you. Without ever questioning anything. You never thought to run the numbers yourself?

Pretty simple.

$2.40 x 40 x 52 = $4992

Add about 7% for CPP and EI. $4992 x 1.07 = $5341.

———

Here you go shooting your mouth off again like you know something.

You are missing eht, wsib, +++.

Your lack of knowledge is astounding.

#129 Waiverless on 01.10.18 at 3:52 am

#95 S.Bby on 01.09.18 at 10:34 pm
$998,000
MLS® Number: R2229937
6227 PORTLAND STREET, Burnaby, British Columbia V5J2S3

A house on the Burnaby south slope for under $1 million and way under assessed value. This is unprecedented.
Assessment $1,221,100

These are bailing speculators…

—————————————————————
Don’t think these are speculators unless the house was bought quite a while back. It’s not showing up on bcassessment as a sale in the last 3 years. The listing information says the house in unlivable and uninsurable. Likely the reason for lower price point as you’re basically buying the lot and have to tear it down

#130 Stan Brooks on 01.10.18 at 5:27 am

Let’s hope that the expected warmer weather unfreezes the brains of the Canadians/deeply frozen apparently due to the extreme cold, wind chill and political fog.

It is very easy for politicians to institute higher minimum wages. They are not paying for it.
Businesses do.

For the Business salaries is expense, so they have to either increase prices or cut expenses in order to maintain profit margins which are already very, very thin for majority of small Businesses.

Increase of prices is not easy due to market conditions/competitions/restrictions by franchises.
It could easily lead to lost revenue and damaged reputation. People have no money anyway to handle increases, they will most likely cut purchases.

So cost cutting is the only option, short of going out of Business.

Let’s not forget that small Business were hit in addition by the incompetent and ethically challenged liberal federal government.

So for incompetent at best provincial liberals to dump this crap on the shoulders of the small Businesses and then the most hated woman (?) in politics to claim that the Business are the villains and she is defending the poor is at the height of arrogance and outright insult to
whatever intelligence is left in Canadians.

Harper Junior is is in a way correct (I hated Harper and Flaherty big time, before the liberals came into power), you can not create wealth by decree.

Of course the intend is to spur further inflation, but what the incompetent rules refuse to acknowledge is that the only way to achieve this, while maintaining current levels of consumption is to institute large QE.

It is impossible to exit peak credit without QE, with increased taxes!

So we will achieve severe stagflation:
1. Significant inflation
2. Less consumption as indebted serfs have to pay higher interest on loans.

Next few years will be the best time to dump anything, any assets priced in Canadian dollars beside maybe commodities and to diversify/move all of it out of the reach of the thieves.

#131 Stan Brooks on 01.10.18 at 5:55 am

#75 Nonplused on 01.09.18 at 9:13 pm

Great post.
Pretty much aligns with my view.

The fight is for a piece of ever shrinking pie with government – pensions, benefits, debt, the wealthy looking to preserve their benefits and profits at the expense of the population.

The 3 horsemen of apocalypses:
automation
gloalization
the coming energy crises

will transform this world.

Carbon taxes are a practical step towards it, all the gender, political correctness stuff is just the noise – political fog to distract you from seeing the reality.

As you won’t like it.

Marginalized future for the masses – taxes, inflation, luxurious dream life – french villas, private islands, low taxes on stock options and dividends from public corporations for the elite – it is just a repetition of the middle ages.

At least you can live it someplace warmer.

#132 Sohan on 01.10.18 at 6:00 am

I fully agree with most of the comments. Real estate is not going to survive any longer.it’s just happy days if you are renting.

#133 Old Ron the Realtor on 01.10.18 at 6:41 am

@ SOHAN:
” Real estate is not going to survive any longer.”

Prompting a new HGTV show REAL ESTATE REPO MADNESS ?…not likely.

2017 was a wash. Huge gains in the spring that were eliminated by December 31. The market was speculatively driven.

Now the specs are on the sidelines, trying to hide those undeclared flips from the Canada Revenue Service.

My hunch is about 75,000 homes will change hands in 2018. A quiet market compared to previous years, but still surviving. Prices about the same or slightly lower.

#134 dharma bum on 01.10.18 at 7:09 am

#42 Real Estate Greed is Ugly

Hello Stress Test, Hello Higher Interest Rates.
——————————————————————–

Hah. It’ll be just like the (fictional) story of Sodom and Gomorrah.

https://www.google.ca/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwjukuXPrc3YAhUH44MKHW4UC34QjRwIBw&url=http%3A%2F%2Fwww.patheos.com%2Fblogs%2Fformerlyfundie%2Fsodom-gomorrah-a-story-about-us-and-not-for-the-reasons-you-think%2F&psig=AOvVaw0xrfke7hPwuu-RXoxWG609&ust=1515672235214780

#135 LivinLarge on 01.10.18 at 7:12 am

“It is very easy for politicians to institute higher minimum wages. They are not paying for it.”…lovely platitude but of course they pay for it and right quick too if it causes the widespread destruction so many here think it does. Nothing sours a voter in a parliamentary system like an economic armageddon attributed to a single government policy.

Stan, “Less consumption because indebted serfs have to pay higher interest on loans”…oops, the exact opposite until interest rates are multiple time higher. Over all, consumption actually increases a little, just not on the stuff you need term loans for. Those big ticket items you’re paying the banks interest on may take a sales hit but the rest of the day to day consumtion increases. When people have more coin in their pockets they have always spent more too. “Trickle down from the top” economics has never worked but “Trickle out from the middle” economics has worked since, like forever. Also, price increases are actually far easier to impliment across a franchise system than with independent operators. The master franchisor can simply order it and it is done and since master franchisors always get their royalty from gross incomes rather than net, there is a huge incentive to just order a cross the board price increase. And, if it’s impossible to exit peak credit without QE, what QE was implimented in the late 70s when credit really did peak.

Slick, why not just be in good industrial Canadian REITS yielding 8%?

Tony, “for thousands of years when interest rates rose so too did the underlying currency”…another “opposite is true”. Until the explosion in consumer credit in the 70s, interest rates only went up after the currency demand increased its value.

#136 LivinLarge on 01.10.18 at 8:32 am

“Real estate is not going to survive any longer.it’s just happy days if you are renting.”… “The rumors of my demise are greatly exaggerated” Mark Twain. Same thing here. RE isn’t going anywhere long term. Up and down like a toilet seat every decade or so? Sure, because humans are capricious, avaricious bottom feeders but wholesale collapse? No way.

#137 NYCer on 01.10.18 at 9:06 am

God I hope this is finally happening again. I hope our CDN continues to rise again against the USD, need to do some USD currency spending lol.

So glad we were aggressively paying down the mortgage. Bring on the hikes, we will be debt free in 2020.

#138 Stan Brooks on 01.10.18 at 9:49 am

#135 LivinLarge on 01.10.18 at 7:12 am

Increase of credit drives consumption up. Pulling forward future demand/consumption.

Contraction of credit limits consumption. We are at peak credit even twice peak credit due to government ‘guarantees’ in the form of ultra-subprime mortgage insurance largesse of incompetent finance ministers.

It is clear that credit can not grow further at the same pace.
In addition government wants to effectively increase taxes.

So people have less savings, due to inflation and zero rates, (credit is overblown which drives inflation, so peak credit causes peak inflation in absence of real QE), have to pay up peak credit while rates increase…

In addition money flowing through the system/due to deficits go to the wealthy, not to the middle class or the poor.

Bottom line – purchasing power of consumers will decline, government is looking to boost artificially inflation which means less consumption at higher prices.

Expect extreme stagflation.

THEY are that stupid to deliver it.

Just look at the french villa/ethically challenging leaders.

In this situation people implement aggressive QE and REDUCE taxes on Business, instead of increasing them.

But hey, this is Canada and we are far from normal.

#139 Stan Brooks on 01.10.18 at 10:01 am

#137 NYCer on 01.10.18 at 9:06 am
God I hope this is finally happening again. I hope our CDN continues to rise again against the USD, need to do some USD currency spending lol.

So glad we were aggressively paying down the mortgage. Bring on the hikes, we will be debt free in 2020.

————————

You won from the Lotto, congratulations.

Now you have 2 options
1. Cash out and move out with the winnings

2. Stay with the paid house and slowly bleed all the ‘gains’ due to increased property/carbon/increased Business/CPP/ more to come.. etc. taxes.

Don’t forget that the house (pretending to be an asset) will not feed you (on the contrary it will require you to pay taxes, utilities, maintenance) and at some point this country will run out of idiots renting basements.

GTA electricity is the most expensive in North America.
It will get worse.

And if you include automation, outsourcing it gets worse.

Enjoy the moment.

#140 Bradley C on 01.10.18 at 10:10 am

The majority of the population can’t handle rate increases at this time, the only benefactors will be the top 10%(90% of us will be hurt by any increase)but who cares about the general population, the government claims to want to protect the lower and middle classes all they are doing by increasing taxes and rates is killing us.

#141 SimplyPut7 on 01.10.18 at 10:44 am

#104 Smoking Man on 01.09.18 at 11:19 pm

I also think SCM is female. The xenophobia while off-putting and more characteristic of alt-right, straight white males; the writing style is passionate but not overtly violent or sexist.

SCM reminds me of Occupy Wall Street, but like many angry pro big government, large social systems ideologists, there has to be one leader/voice to work together to solve the world’s problems – but everyone wants to lead so divided they fall.

SCM will realize there are easier ways to get your point across than squatting in a tent in front of a large financial institution or protesting in front of a mom and pop Tim Hortons e.g. encouraging other millennials to vote, so that the changes they want can be implemented

SCM stay woke!

#142 Ronaldo on 01.10.18 at 10:52 am

#114 Bring on the Inflation on 01.10.18 at 12:41 am

Good job. Few will have done what you did.

#143 Nut on 01.10.18 at 10:53 am

So in 1965 minimum wage was a buck, and inflation calculator makes that 7.71 today. So 15 min wage is about double.
but what about in relation to housing? In 1965 I think the average TO house was about 11500. Annual minumum wage=2080. So average house was 5.5 X’s annual minimum wage. Gee not a bad ratio. Wonder if my figures are wrong.
today 15 an hour is about 31000. 5.5x’s that is 171600. What can one buy for 171600 in TO?
In relation to housing, minimum wage has fallen way behind.

the main factor in housing is not outsiders buying, but interest rates. Rates go down, the value of all assets goes up. Rates go up, the value of all assets goes down. Its that simple. For example, When oil crashed 2-3 years ago BOC reduced rates apparently to prevent a recession. It wasn’t long after that house prices adjusted to their new value and peaked in 2017. With higher rates house prices will stagnate, and or trend down.

#144 IHCTD9 on 01.10.18 at 10:54 am

#75 Nonplused on 01.09.18 at 9:13 pm
Rising interest rates, stubbornly high oil prices that still aren’t high enough so that oil companies can make money, rising taxes, the new squeeze on small businesses, rising carbon taxes, and price pressure from rising minimum wage laws. Where do they think all this money is going to come from?
______________________________

They think the money is going to come from us. They’re right too, we’re the only income they’ve got, plus we’re the ones putting the big spenders in power. Anyone that earns in any way via any entity and subsequently spends said earnings is going to be progressively skinned alive.

The tax situation in this country is going to become insane if folks keep voting for more spending and more debt. This guarantee is why I am divorcing government as much as possible.

I’m working hard again this winter to bring my plans to fruition: Driving to work, but using no conventional fuels. Beating back the -30 temps using no conventional fuels. Electrical generation will be on standby for later when Wynne’s debt for “discount” plan expires and prices again go parabolic even worse next time.

I like to keep my forecasting simple and accurate. They will tax as required to keep the ship upright with no ultimate regard for their affordability by the taxpayers until:

1. Voters have had enough and vote in Mike Harris #2
2. Revenues stop rising no matter what they do.
3. Financial implosion followed by a generation of austerity.

They will tax/fee what you can’t easily avoid. Income, Property, electricity, heating fuels, transportation fuels, cigs, booze, weed, and more – you already know what those things are.

Everyone should be formulating a plan to steer around these unnecessary costs right now. There is no debate about where we’re headed – it is an iron-clad certainty.

#145 IHCTD9 on 01.10.18 at 11:24 am

For 2018:

The completion of two pcs of equipment I have been working on, these will be parked next to the unit I bought (used for peanuts) and rebuilt (labour by me) last winter.

Commencement on the last few remaining pcs of equipment required to kick off fuel production.

More stuffing cash into RRSP’s to get my income taxes back

More buying used, but like new – and paying no taxes.

More specialized labour completed by myself saving the cost of Pro’s and the taxes paid for same.

The last of the last misc stuff in the shop to sale on Kijiji. Just about all my collectables are gone now. The balance is what no one seems to want. I will keep some of it, and junk the rest.

I may start looking at collecting fuel sources for the grand plan as well. If no charge stock becomes available, I already have the means to collect, transport and store. I’m close enough to start building a stockpile.

#146 aa5 on 01.10.18 at 11:38 am

I view the government doing the right thing on monetary and fiscal stimulus.

When they came to power there simply was not enough money in the hands of the people. Lots of debt sure but not pure cash that they could spend.

So the Liberals increased the deficit from near balanced budget to $30 billion deficit a year. My friends were skeptical but I said just watch, the economy will take off with this. As I knew how much unemployment and surplus capacity we had.

So the economy did of course take off, to an economic strength we haven’t seen in several decades. And when does the government stop the fiscal and monetary stimulus? When inflation heats up.

Which is what they are doing now. Interest rates are normalizing. The amount of new mortgage debt is being reduced by changing the government insurance rules. New rules on income tests for mortgages.

For the rich they should see a bit higher interest rates on their bonds and savings. And a strong consumer economy means more profits and higher share prices on their stock portfolios. On the other hand if their $3 million Vancouver house declines by 20% that is a $600,000 decline in paper equity.

#147 LivinLarge on 01.10.18 at 11:45 am

Stan, “In addition money flowing through the system/due to deficits go to the wealthy, not to the middle class or the poor.”…so you really are sitting way over here on the left side of the Canadian dinghy with me. Not much love from the right side passengers.

Maybe high indebtedness “should” contract spending and maybe it even does contract it for large ticket consumer durables but contracting spending for the bulk of the spending spectrum has historically increased unkess coupled with high unemployment, which we don’t exaxtly have right now. So, low unemployment means more people with at least some discretionary spending capacity and historically people with more coin spend more coin.

When I was a child in the 60s I was taught a very reliable lesson, “the rich got rich by not spending their money and stayed richby not spending THEIR money” true then as now.

BTW, common stock dividends are far from the tools of the wealthy. At least for 150 years in Canada, dividend paying common shares like BMO have been a safe repository of average Canadian’s savings. And what drives your ire against French villas. They certainly aren’t wonderfully appreciating property and they do cost a fortune to maintain, repair and heat but they are pretty nice places to flop.

#148 Victor V on 01.10.18 at 11:52 am

Buffett on cryptocurrencies: ‘They will come to a bad ending’

https://www.bnn.ca/buffett-on-cryptocurrencies-they-will-come-to-a-bad-ending-1.964070

Warren Buffett said he’s no fan of cryptocurrencies like bitcoin and is confident that the run up in their value is fleeting.

“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,” Buffett said in an interview on CNBC on Wednesday. “Now when it happens, or how or anything else, I don’t know. But I know this: If I could buy a five year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”

#149 Renter's Revenge! on 01.10.18 at 11:57 am

#117 kiwiSaver on 01.10.18 at 1:12 am
How can you tell if your preferreds ETF is “rate reset”?

I have the iShares S&P/TSX North American Preferred Stock Index ETF (CAD-Hedged) – But can’t see this specified in the fact sheet…

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

The iShares website has a link to CPD’s “Portfolio Characteristics” which shows the breakdown by structure (Perpetual, Rate Reset, etc.):

https://www.blackrock.com/ca/individual/en/literature/product-brief/cpd-characteristics-en-ca.pdf

Unfortunately, they don’t seem to have a link to a similar document for XPF.

#150 take crazy elsewhere Stan on 01.10.18 at 12:01 pm

Don’t forget that the house (pretending to be an asset) will not feed you (on the contrary it will require you to pay taxes, utilities, maintenance) and at some point this country will run out of idiots renting basements.
…………..

why wont they rent basement apartments? You need to get out, so you can SEE what’s happening

pays my mortgage and then some. Had multiple offers . Crazy. People can’t afford houses. They NEED a roof over their head. Im sorry

#151 For those about to flop... on 01.10.18 at 12:03 pm

I feel the need,the need for speed…

M43BC

“Transactions Speeds: How Do Cryptocurrencies Stack Up To Visa or PayPal?

Cryptocurrency bag holders often boast that their network transaction speeds are faster than mainstream payment methods, such as Visa or Paypal. As cryptocurrencies continue to rise in popularity, it will be important to determine which blockchain payment networks could eventually become the “new Visa.” While both sides continue to debate their arguments, we jumped through the hard data and created a unique visual to highlight transaction speeds across several different payment networks.

We chose to compare the transaction speeds of some of the largest cryptocurrencies by market-cap relative to Visa and PayPal. Each payment network is ranked largest-to-smallest based on the size of their balloon, which equates to the number of transactions per second. The larger the balloon, the more transactions their payment network can process per second. This allows for a clear and concise visual to show once and for all how some of the most popular crytpocurrencies stack up to more traditional payment methods.

Ripple Shows Potential, But Visa is Still the King of Speed
As you can see, Visa still has the fastest transaction speeds over any other payment networks measured, with 24,000 transactions per second. It was surprising to see Ripple come in second and beat out PayPal by a whopping 1,307 transactions per second. This shows that Ripple may have the capability to be a viable payment solution on a much larger scale.

PayPal had 218 million active users during the third quarter of 2017. PayPal is still among the most popular and well-known digital peer-to-peer platforms out there, but Ripple’s transaction speed dominance could be the key to a next-generation peer-to-peer payment platform that is not only faster, but also safer.

Our data shows that Bitcoin Cash has the second fastest transaction speed of the major cryptos. Maybe this will finally give Bitcoin Cash the proper respect and recognition as the second most viable crypto for transaction speeds. To be fair to Charlie Lee (Litecoin creator) and his loyal Litecoin followers, four transactions less per second is a close margin of speed and does deserve recognition.

Those of us who are actively vested within the cryptocurrency space are not shocked to see Dash, Bitcoin and Ethereum bringing up the rear. Crypto traders are consistently hit with transaction delays when they go to transfer their Ether or Bitcoin, as their growing popularity outpaces their network’s processing capabilities.

Here is a breakdown of the chart, which includes each network’s number of transactions per second data results:

1. Visa: 24,000 transactions

2. Ripple: 1,500 transactions

3. PayPal: 193 transactions

4. Bitcoin Cash: 60 transactions

5. Litecoin: 56 transactions

6. Dash: 48 transactions

7. Ethereum: 20 transactions

8. Bitcoin: 7 transactions

Overall, Visa continues to have one of the fastest transaction speeds across several different payment networks. Keep in mind that cryptocurrency and blockchain technology is still in the very early stages. Visa was founded in 1958 and has had 60 years to improve and grow its payment network capabilities. Imagine if we give Ripple, Bitcoin Cash, Litecoin, and other cryptocurrencies 60 years to develop their networks, the data may not be so skewed in Visa’s favor. For now, cryptocurrency pioneers continue deeper into uncharted territory in search of faster speeds, improved network stability, and user adoption.”

https://howmuch.net/articles/crypto-transaction-speeds-compared

#152 Glenn T on 01.10.18 at 12:09 pm

“But unlike Americans, families on this side of the line have been steadily piling on more personal debt and are now massively vulnerable to rising rates.”

Really?

Government: Low interest rates have enabled the Federal government to increase their total debt by 113% since 2008, yet interest payments have risen by only 5%.

Corporations: Corporations have borrowed huge amounts of debt to fund stock buybacks and increases in their dividends. Today, nonfinancial corporate debt is 79% higher than it was in 2008.

Households: The New York Fed’s latest quarterly report on household debt showed that US households have a total of $12.96 trillion in debt outstanding. That’s $280 billion higher than the previous all-time peak in Q3 2008.

Jeff Gundlach on US debt.

#153 NYCer on 01.10.18 at 12:14 pm

#139 Stan Brooks on 01.10.18 at 10:01 am

Unfortunately we want to call Toronto our home. Our home is not an investment to us and we don’t expect to use it for retirement.

We do have a retirement plan and hopefully it will work out.

We also of course have other vehicle for investing, TFSA, RRSPs and pensions plans as well. It’s certainly not easy for the majority of people but we live pretty frugal as well so our needs are pretty simple/basic.

#154 Ogopogo on 01.10.18 at 12:31 pm

Fingers crossed for a relentless series of rate increases over the next 2-3 years. It’s the single most important catalyst of popping our toxic housing bubble. As to the overleveraged crying out in impotent rage, we will say: “Where is your arrogance now, snowflake?”

Schadenfreude is a dish best served cold.

#155 ETFingGoodTime on 01.10.18 at 12:35 pm

regarding HPR, I may just hold onto this sucker. It’s performance has beaten everything else recently due to its active management, more than the added MER. I originally choose it for that. They should be adjusting going into this rising rate environment.

http://www.newswire.ca/news-releases/horizons-active-preferred-share-etf-surpasses-1-billion-in-assets-612484863.html

from the link:

Unlike with index-tracking strategies, the portfolio management team can be selective in the types of issuers the ETF holds and can adjust its exposure to different sectors and product structures – such as rate-resets and perpetual preferred shares – to potentially generate better risk-adjusted returns compared to index strategies.

“The benefits of preferred share investing are well-understood; they provide, on average, higher yields than Canadian corporate bonds which are taxed as Canadian eligible dividends. They are a tax-efficient way to generate an attractive yield for an income portfolio,” said Mr. Hawkins. “What’s not as well understood are some of the product structures within the preferred share market and the different types of yield features, liquidity and covenants associated with different issuers. This is really where an expert portfolio management team like Fiera Capital can add a lot of value for investors.”

#156 Where's The Money Guido? on 01.10.18 at 12:43 pm

Re: #110 Smoking Man on 01.09.18 at 11:58 pm
Trump going to Davous WTF

Ha. The heart of the globalist agenda.
My call. He’s going there to lay down the law.
++++++++++++++++++++++++++++++++++++++

My take is they’re going to tell him to conform or end up in a pine box via Killary’s death squads. She needs to add to her grand total since she hasn’t turfed anyone since around last election. She has to keep her skills fresh…..

#157 Stan Brooks on 01.10.18 at 1:14 pm

Now it is getting interesting.

Thinking it can not get any worse?

Kissing HAFTA Goodbye?

https://ca.yahoo.com/finance/news/newsalert-canada-launches-global-trade-153534955.html

#158 Ed. on 01.10.18 at 1:14 pm

The following excerpt is from a rag called “The Economist” in an article entitled “Many Happy Returns” (Jan 6/18).
I am not sure if only subs can access it so here’s a piece of it. Maybe we can argue about something else now?

The new research, published as an NBER working paper in December 2017, fills in quite a few gaps. It is the work of five economists: Òscar Jordà of the San Francisco Fed, Katharina Knoll of the Bundesbank, Alan Taylor of the University of California, Davis, and Dmitry Kuvshinov and Moritz Schularick, both of the University of Bonn. (Messrs Jordà, Schularick and Taylor have spent years building a massive collection of historical macroeconomic and financial data.) For each of the 16 economies, they craft long-term series showing annual real rates of return—taking into account both investment income, such as dividends, and capital gains, all net of inflation—for government bonds and short-term bills, equities and housing. Theirs is the first such data set to gather all of that information for so many countries over so long a period.

As such, the authors establish some new basic economic facts. They conclude, for instance, that over the very long run it is housing, rather than equities, which provides the best return (see chart): both asset types have yielded about 7% a year on average over the 145 years, but equity returns are much more volatile. It is important to note that, though homeowners might cheer this news, it is not necessarily a reason to leap into the housing market. Rental yields account for about half of the long-run return on housing, and owning a diversified portfolio of rent-yielding property is not the same bet as borrowing to house the family.

#159 Chelsea on 01.10.18 at 1:15 pm

Well you are right, Garth in stating to hold off buying Real Estate. Waiting to hear from the BC NDP Financial Budget in February, seems more tax reform, and a speculation levy/tax coming our way. Pleased to hear of the interest hikes, good for our portfolio, for a change. Looks like 2018 will be a better, profitable year, given a chance to purchase a fair and reasonably priced home, and money to live on. We are retired now, so its about time we have good news!

#160 WileE Toronto on 01.10.18 at 1:17 pm

#105 45 North

If you are going to use 325 Perth ave , which was overbid in 2014 for 848 K in 2014, you may be wrong.

The area has continued to climb, 115 Perth just sold for
1.1 million plus and it is inferior to the 325 house. The area is improved by the UP express, and filling in of empty lots with new town homes and business projects.

The new ARCH lofts church project was just completed and small breweries and artists are taking hold of the area.

I grew up in the area , will continue to improve , if you are looking for declines , you may want to look else where. Just my take.

M47On

#161 IHCTD9 on 01.10.18 at 1:21 pm

#97 Classical Liberal on 01.09.18 at 10:44 pm

Sometimes I think that maybe, just maybe, SCM is a satirical poster. That she’s simply a caricature of what a triggered, entitled, regressive millennial is.
_______________________________

That’s just your brain trying to explain the unexplainable.

It’s like trying to understand how altruism escaped natural selection. It makes no sense at all, but your brain insists on understanding it somehow.

Unfortunately, You’ll either fry your brain trying to figure it out, or end up with an answer you don’t want to hear.

Best to categorize along with UFO’s and Zombies and leave it at that.

#162 Victor V on 01.10.18 at 1:47 pm

Luxury home sales plummeted in Toronto last year

https://www.blogto.com/city/2018/01/luxury-home-sales-plummeted-toronto-last-year/

Houses worth more than $1 million were anything but hot in Toronto over the past six months, according to Sotheby’s International Realty Canada.

A new report from the real estate broker shows that, while the luxury home market was booming during the first half of 2017, those sales tapered off by a whopping 56 per cent in the second half of the year.

Houses between $2 million and $4 million saw the steepest drop at 62 per cent in late 2017.

#163 Screwed Canadian Millenial on 01.10.18 at 1:51 pm

#113 Yorkville Renter on 01.10.18 at 12:35 am

You proved my point. You people don’t understand what profit means.

#164 Newcomer on 01.10.18 at 1:59 pm

#140 Bradley C on 01.10.18 at 10:10 am
The majority of the population can’t handle rate increases at this time, the only benefactors will be the top 10%(90% of us will be hurt by any increase)….

————

That’s true in a way, but it would be more accurate to say people have been hurt by the low rates and government-back debt. Raising rates will discourage new debt and lower the price of housing, which are both good things. It’s kind of like how banning heroin seems hard on heroin addicts, but is good for society in general.

#165 Screwed Canadian Millenial on 01.10.18 at 2:02 pm

#128 T on 01.10.18 at 3:31 am
EHT is about 2%. WSIB is about 2%.

So take the $4992 base and multiply by an even 11% to cover CPP, EI, EHT and WSIB.

That’s $5541 instead of the $5341. Still nowhere near the $7k you made up.

You’re the gullible one who believed that the average Tim Hortons location has 35 full time employees. Have you ever been inside a Tim Hortons?

What else ya got?

You’re not entitled to cheap labour.

You know, if you boomers didn’t repeatedly demand tax cuts on capital gains, dividends and corporations, maybe governments would not have had to make up the difference on payroll taxes. I hate payroll taxes and would gladly see higher taxes on big corporations and on dividends to lower payroll taxes.

#166 Doug in London on 01.10.18 at 2:22 pm

I’ll just patiently buy more short term bond ETFs as they go on sale with rising interest rates, like XSB-T and TLT-NY.
Worth mentioning, I like that ceramic figure of Spuds Mackenzie on the top shelf in the background!

#167 Benjamin49 on 01.10.18 at 2:31 pm

Garth, if you got a low rate in the last 3 months (2.49) would it make sense to put as much money towards the mortgage principle in the next 5 years while rates are still low, or to keep any $ made in a portfolio

Why pay off a 2.4% debt when invested money has been earning double digits? Of course, it all depends on your circumstances. – Garth

#168 it burns on 01.10.18 at 2:31 pm

Another one for your flop file in case you haven’t seen it.

Originally listed to 1.599 now down to 1.398 what they paid for back in 2016.

2891 Pandora Street, Vancouver

https://www.bcassessment.ca/Property/Info/QTAwMDAwMlFZVQ==

https://www.zolo.ca/vancouver-real-estate/2891-pandora-street

#169 chopstix on 01.10.18 at 2:37 pm

Vanecdotal on 01.10.18 at 1:09 am
Re: #30 YVR Housing Update

Saw that speech link on Eby’s site yesterday, agreed it’s a must read to explain how we got here. Smells a lot like *forward guidance* re: 2018 BC Budget. He strikes me as a principled dude, I think rooting out fraud/corruption/tax evasion may become his cause célebre, good on him.

His reddit Q&A “Ask me Anything” from @ a year ago is lengthy but very enlightening. This is the most transparency I’ve ever noticed thus far from any politician, (regardless of stripe).

https://www.reddit.com/r/vancouver/comments/4pcd1e/im_david_eby_mla_for_vancouver_point_grey_and_bc/?st=jc7ct88o&sh=3e29735f

His background as a lawyer for Pivot Legal Society points to someone who walks the walk re: general injustice, fighting for the downtrodden, i.e. not in the legal profession, nor politics for the money.
———————————————————
agree wholeheartedly.

David Eby seems like the real deal for a politician:
hope the sleazy larger system he’s now attached to won’t water down his fight.

#170 Steve on 01.10.18 at 2:38 pm

#167 Benjamin49 on 01.10.18 at 2:31 pm
Garth, if you got a low rate in the last 3 months (2.49) would it make sense to put as much money towards the mortgage principle in the next 5 years while rates are still low, or to keep any $ made in a portfolio

Why pay off a 2.4% debt when invested money has been earning double digits? Of course, it all depends on your circumstances. – Garth

DO BOTH. Invest it for the next 5 years, and then use it to pay down the mortgage principle at renewal.

#171 For those about to flop... on 01.10.18 at 2:50 pm

It burns pm
Another one for your flop file in case you haven’t seen it.

Originally listed to 1.599 now down to 1.398 what they paid for back in 2016.

2891 Pandora Street, Vancouver

https://www.bcassessment.ca/Property/Info/QTAwMDAwMlFZVQ==

https://www.zolo.ca/vancouver-real-estate/2891-pandora-street

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

Hey Burnie ,at first glance I thought I had it ,but I think I am thinking of the case below just down the road.

I will keep it just in case and thanks for the assistance.

These guys are pretty much in the same boat.

There’s a sea of disinformation out there and I’m in it in a leaky rubber dinghy holding a torch trying to be a lighthouse…

M43BC

2712 Pandora Street, Vancouver paid 1.29 asking 1.55 were asking 1.39 way back in May 2017

Apr 11:$1,588,000
May 2: $1,399,000
Change: – 189000.00 -12%

https://www.zolo.ca/index.php?sarea=2712%20Pandora%20Street,%20Vancouver&filter=1

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

#172 Stan Brooks on 01.10.18 at 2:56 pm

And here it is.

https://ca.finance.yahoo.com/news/exclusive-canada-convinced-trump-soon-191711454.html

the greatest achievement of the batsh$t stupid global liberal elitist and the drama teacher who never worked a day of real work in his life.

Now you can kiss work in US goodbye.

P.S. Canada could have had NAFTA extended as bilateral agreement with very beneficial terms for Canada but the idiot liberals choose to play in Mexico’s court and include transgender agendas in the negotiations.

Well Canada, we got what we deserve.

And this is just the beginning.

#173 Penny Henny on 01.10.18 at 2:57 pm

#143 Nut on 01.10.18 at 10:53 am
So in 1965 minimum wage was a buck, and inflation calculator makes that 7.71 today. So 15 min wage is about double.
but what about in relation to housing? In 1965 I think the average TO house was about 11500. Annual minumum wage=2080. So average house was 5.5 X’s annual minimum wage. Gee not a bad ratio. Wonder if my figures are wrong.
today 15 an hour is about 31000. 5.5x’s that is 171600. What can one buy for 171600 in TO?
In relation to housing, minimum wage has fallen way behind.
/////////////////

Think about this for a second.
In 1965 I was 1. Now I am 53.
That’s inflation alright.

#174 Stan Brooks on 01.10.18 at 3:01 pm

Breaking news:

Hate to break it to you but this news – NAFTA breakdown alone is much more important than the stupid discussions on overpriced cardboard and glass condo real estate in the middle of nowhere.

1. we lose our ability to work in US. pretty much assured, so we remain slaves to the stupid.

2. just watch that dividend tax on your US RRSP holdings coming back as tax on foreign national.

Cheers!
You can send thank you letters to T2 and Freeland.

#175 InvestorsFriend on 01.10.18 at 3:04 pm

I Get Dressed Down

#155 LivinLarge on 01.09.18 at 11:04 am dressed me down yesterday as follows:

“Solving the Mutual Fund high MER problem

See number 86 where Garth responded to me:”…wow, this is at least the second time in a week you where you have felt compelled to state “Garth responded to me” rather than just use quotes like everyone else.

You’re either starved for validation in your home life or work OR you’re using this blog to validate or justify your “ideas” to potential investment clients and based on your screen name, I’m going with the latter. Geeze, that’s tacky.

If you’re using Fearless Leader’s blog to further your career then you really should be paying him a promotional fee for the help.

**************************************
LivinLarge, who may have just been in a nasty mood, said there were only two possible motivations for my posts here.

Actually, I don’t think either hit the mark.

I have been posting here since the very start of this blog always under my actual name, Shawn Allen or my other handle InvestorsFriend.

I do it primarily because I am somewhat addicted to the chance to discuss matters and I think I have a valuable contribution to make in educating people about investing as I have spent a lifetime getting educated about investing myself. I prefer not to be anonymous.

Yes, I have a website and I don’t mind if I get a bit of traffic from here to there. But I have not posted a link to my web site here in years nor do I even mention it except I use my corporate name. I am not sure what level of traffic I ever get. Some to be sure. But without a link probably not very much. It’s not in anyway my main motivation to post here.

I feel like I have contributed to the discussion here/ Many people come here for the comments and to see the debates the regulars have with each other and the often pithy responses from Garth. I don’t pretend for a minute that the blog would suffer from my absense but as a regular I think I do make a contribution.

If Garth would prefer that I not use InvestorsFriend as my name he can let me know.

Getting a bit insulted from time to time is to be expected on a blog like this. But it’s also to be expected that the insulted can defend themselves. That really is part of the allure of this blog for those who comment.

#176 Stan Brooks on 01.10.18 at 3:11 pm

Watch the action in the looooooooooooooonie

crazy.

#177 n1tro on 01.10.18 at 3:12 pm

#148 Victor V on 01.10.18 at 11:52 am
Buffett on cryptocurrencies: ‘They will come to a bad ending’
https://www.bnn.ca/buffett-on-cryptocurrencies-they-will-come-to-a-bad-ending-1.964070
Warren Buffett said he’s no fan of cryptocurrencies like bitcoin and is confident that the run up in their value is fleeting.
“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,” Buffett said in an interview on CNBC on Wednesday. “Now when it happens, or how or anything else, I don’t know. But I know this: If I could buy a five year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”
———————
Warren says he doesn’t invest in anything he doesn’t understand (sic). He missed the boat on google IPO so how is it different this time with blockchain?

#178 Stan Brooks on 01.10.18 at 3:41 pm

#153 NYCer on 01.10.18 at 12:14 pm
#139 Stan Brooks on 01.10.18 at 10:01 am

Unfortunately we want to call Toronto our home. Our home is not an investment to us and we don’t expect to use it for retirement.

We do have a retirement plan and hopefully it will work out.

We also of course have other vehicle for investing, TFSA, RRSPs and pensions plans as well. It’s certainly not easy for the majority of people but we live pretty frugal as well so our needs are pretty simple/basic.

———————–

I respect that/the refusal to cash the winning ticket.

Just go across the border to Buffalo and see what NAFTA did to it. It was a city equal to GTA/Toronto in the past.

For benefits of Canada/Toronto.

Now imagine the reverse.
Chilling?

I thought so.
Now imagine what your house could be ‘worth’ 10-15 years from now.

#179 T on 01.10.18 at 3:43 pm

#165 Screwed Canadian Millenial on 01.10.18 at 2:02 pm
#128 T on 01.10.18 at 3:31 am
EHT is about 2%. WSIB is about 2%.

So take the $4992 base and multiply by an even 11% to cover CPP, EI, EHT and WSIB.

That’s $5541 instead of the $5341. Still nowhere near the $7k you made up.

You’re the gullible one who believed that the average Tim Hortons location has 35 full time employees. Have you ever been inside a Tim Hortons?

————-

Where did I say that? I didn’t.

You read what you want to read, see what you want to see. You are a complete and utter moron. Try answering my questions instead of diverting.

You alone are ruining what was once a great blog with your misinformation and attacks. It would be different if you had even the smallest clue on how things work in the real world.

#180 El presidente trumpinator on 01.10.18 at 3:54 pm

NAFTA is toast baby. Stick a fork in it. CAD is cooked. Rates going nowhere fast.

#181 AGuyInVancouver on 01.10.18 at 3:54 pm

#162 Victor V on 01.10.18 at 1:47 pm
Luxury home sales plummeted in Toronto last year

https://www.blogto.com/city/2018/01/luxury-home-sales-plummeted-toronto-last-year/

Houses worth more than $1 million were anything but hot in Toronto over the past six months, according to Sotheby’s International Realty Canada.

A new report from the real estate broker shows that, while the luxury home market was booming during the first half of 2017, those sales tapered off by a whopping 56 per cent in the second half of the year.

Houses between $2 million and $4 million saw the steepest drop at 62 per cent in late 2017.
_ _ _
Over $1 million is luxury in Toronto? That’s a resale two bed condo in Vancouver.

#182 Screwed Canadian Millenial on 01.10.18 at 4:12 pm

#179 T on 01.10.18 at 3:43 pm
I am talking about how things work in the real world. In the real world, owners suppress wages to stuff their own pockets. In the real world, Tim Hortons franchisees claimed there was a labour shortage so severe that they needed to import cheap slave labour from abroad. TFWs with no economic mobility. Tied to only 1 employer. Now those franchisees complain about higher wages. That’s the real world.

It’s you people who live in trickle down fairy tale land.

$300,000 to $400,000 in NET INCOME. These people are not hard done by. They can afford to pay their employees, you know, the ones who enable those profits.

https://www.youtube.com/watch?v=cj06ZdtEvG0&feature=youtu.be&t=162

#183 Lillooet, BC on 01.10.18 at 4:12 pm

#175 InvestorsFriend on 01.10.18 at 3:04 pm
I Get Dressed Down
**************

Stand firm dear InvestorsFriend!

I read your comments and Flop’s first, and then may browses comments from others if time permits!

Do please keep commenting here.

#184 conan on 01.10.18 at 4:18 pm

#180 El presidente trumpinator on 01.10.18 at 3:54 pm

Nope, you are going to get done in by the mid terms. We are talking WWF slam down cage event.

And then,

Lame duck à l’orange sprinkled with shredded carrot and marmalade glaze.

#185 Screwed Canadian Millenial on 01.10.18 at 4:18 pm

Tim Hortons hit by protests after cuts to employee benefits
https://www.youtube.com/watch?v=91e57pO6brc

Workers of Ontario UNITE!

#186 Howard on 01.10.18 at 4:24 pm

#154 Ogopogo on 01.10.18 at 12:31 pm
Fingers crossed for a relentless series of rate increases over the next 2-3 years. It’s the single most important catalyst of popping our toxic housing bubble. As to the overleveraged crying out in impotent rage, we will say: “Where is your arrogance now, snowflake?”

Schadenfreude is a dish best served cold.

——————————————

I’m not so optimistic that T2 will allow this to deflate.

Somehow, savers will be made to pay for the sins of the indebted. They always do.

#187 Garthisnotgod on 01.10.18 at 4:43 pm

@#151 For those about to flop

Please read about Lightning network for bitcoin, when it is implemented it can handle 1 million transaction per second. It is the next layer they are implementing over the BTC network. You need to see the roadmap not the current status because VISA has developed over a long time and BTC just started when compared to VISA

#188 SimplyPut7 on 01.10.18 at 4:58 pm

Mayor of Vancouver not seeking re-election!

Maybe someone who cares about fixing the housing crisis in the city will step forward now.

http://www.cbc.ca/news/canada/british-columbia/gregor-robertson-reelection-mayor-1.4481563

#189 Overheardyou on 01.10.18 at 5:03 pm

#91 karlhungus on 01.09.18 at 10:24 pm
I would love to watch SCM start a company. I give the over/under 3 months for bankruptcy

—–

Unfortunately I don’t think they’ll even get started even if you give them an idea, start up capital and leads.

#190 ozy - we HAVE a PROBLEM on 01.10.18 at 5:10 pm

We HAVE a PROBLEM boys, too many “educated” heads in this over-intellectualized economy…

soooo…. something’s gotta give – a complex financial disaster is underway. It will leave the world changed (for the good). Dig into your stats and prove it. Survival of the fittest. Stop believing all cute lies disguised as analysis. It’s getting to your ears because someone wants you to hear it / read it / suck it in —- and regurgitate to your fellow weaklings

THE TIME. IS COMING. The culling season began a long time ago. Ameno. Stay safe. This time is gonna blow out-of-control. On purpose.

#191 Spock on 01.10.18 at 5:15 pm

Looks like no other country is willing to take you SCM.

Anyways you enjoy your coffee at the food bank.

——

#185 Screwed Canadian Millenial on 01.10.18 at 4:18 pm

Tim Hortons hit by protests after cuts to employee benefits
https://www.youtube.com/watch?v=91e57pO6brc

Workers of Ontario UNITE!

#192 unbalanced on 01.10.18 at 5:26 pm

To Investors Friend. You are a scholar and a gentlemen. Not to many of us left.

#193 LivinLarge on 01.10.18 at 5:29 pm

Stan, “Just go across the border to Buffalo and see what NAFTA did to it. It was a city equal to GTA/Toronto in the past.” I do and have for a very long time and NAFTA had nothing to do with Buffalo’s decline. The steel mill kept Buffalo alive along with their docks and NAFTA didn’t kill that steel industry, the steel industry killed Buffalo.

Remember the early 80s when Irv Weinstein had 3 or 4 fires on the 6 o’clock news every day? Nothing much happened in Buffalo other than that. Sad but true.

Don’t get me wrong, I still like Buffalo for shopping and it’s an extremely easy drive but NAFTA didn’t have any hand in its demise but their pizza sucks and the Anchor became way to popular.

#194 NoName on 01.10.18 at 5:30 pm

@SCM you should read this!

https://www.amazon.ca/Why-Charles-Tilly/dp/0691136483

#195 For those about to flop... on 01.10.18 at 5:44 pm

Hey Lost,we will have to see what the Twitter feed you helped me out with changes it name to after the news that he won’t be seeking re-election.

Thanks also to Lilly for the encouragement.

I also get dressed down ,but then I have a shower and put fresh clothes on…

M43BC

#196 deputytaxdetective on 01.10.18 at 5:49 pm

#57 LivinLarge
“I applied for a tax reassessment 8 months ago and got it today but the data entry gnome put part of the changes in the wrong line i.e a credit rather than into income AND then applied double the actual income change in another year.

This is why we don’t want the lowest paid CRA employees being the ones doing the basic entry work at minimum wage.

And since the help lines are no longer actually manned at CRA, what used to take a phone call to correct, now takes another letter (at least one likely) and another 8 months plus to hopefully correct. Garbage in… garbage out.”

Did you know you can sign up for Canada Revenue Agency’s “My Account” service where you can amend (change) your tax return easily for yourself?

https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

I EFiled my tax return in June (self-employed) and didn’t get my refund and Notice of Assessment until 3 months later!

#197 LivinLarge on 01.10.18 at 5:54 pm

“LivinLarge, who may have just been in a nasty mood, said there were only two possible motivations for my posts here.” first, I’m livin’ large and haven’t even been close to a nasty mood since 2014 and second, I didn’t say there’s only two possible motivations just that those were the two choices that you were clearly exhibiting and from today’s sucking up it seems both are equally valid.

‘Please someone pat me on the back, dry my tears, give me a lolly and ask me to stay because nasty LivinLarge was mean to me.’ Actually, I am surprised that you are trolling for traffic to your other gig. I figured that was the less likely of those two options. Your methods however do seem rather highschool like. Just because Fearless Leader is a gentleman and doesn’t object to you using the blog to try and generate your own traffic doesn’t mean you should abuse his largesse because ou can.

So, you don’t broadcast your URL, you give your name and 5 year old can find a financial website in 2 minutes with a name. Courtesy, if nothing else dictates that you should begin each further post with a disclosure that you are in part a enterprise receiving pecuniary benefits from using this blog as free advertising.

#198 Canada 2018 on 01.10.18 at 6:07 pm

We got T2 finishing the destruction of Canada’s fabric that his father started on. The US is doing everything polar opposite that T2 is going to bat for. Worse, if or when T2 gets the boot, the NDP is winning federal to bring more of the socialist marxist crap.

Sideshow Bob a.k.a. SCM and his buddies will run the show from Vancouver to Halifax.

When they’re done with Canada it will not even be able to hold a torch against Mexico. It will be competing with Nigeria.

#199 I can't hold it in any longer on 01.10.18 at 6:14 pm

Today’s article not showing up as of 6:14pm…Will take a dump, feed my dogs, and return.

#200 InvestorsFriend on 01.10.18 at 6:52 pm

Buffalo?

Stand Brooks said:

Just go across the border to Buffalo and see what NAFTA did to it. It was a city equal to GTA/Toronto in the past.

But LivinLarge responded:

Remember the early 80s when Irv Weinstein had 3 or 4 fires on the 6 o’clock news every day? Nothing much happened in Buffalo other than that. Sad but true.

***************************************
I agree with LivinLarge on this.

I was in Buffalo only once, summer 1981 when I was an engineering student. This was my first plane trip and so it stuck in my mind. What I recall was the highway overpasses looked really old and tired already at that time. It really stood out how old the highways looked.

We were hosted by the Buffalo Forge company. This was an old time industrial company. I always wanted to go back and eat at Daffodil’s restaurant because that was the first fancy restaurant I was ever in. Just looked it up. Closed.

I don’t know what caused Buffalo’s decline but it was not NAFTA. They had a great hockey team for a while. Warren Buffett / Berkshire has owned the newspaper there since circa 1976 and made a bundle early on but not lately.
The history of Cities in the past 100 years or whatever has mostly been survival of the fattest. Top tier cities tend to grow the fastest.

Which comes first to Cities the people or the jobs?

#201 crowdedelevatorfartz on 01.10.18 at 6:58 pm

@#199 Dump and the Dog

Too much info brudda. :)

#202 Shaggy on 01.10.18 at 7:00 pm

# 122 Vanecdotal

Interesting link from David Eby’s reddit Q&A, posted by Eby:

From 2011, straight from the mouth of Mark Carney, former BOC Gov. http://www.bankofcanada.ca/wp-content/uploads/2011/06/sp150611.pdf

Pg. 6 “Domestic demand factors are not the only forces at work. Some Asian wealth is being invested in selected international housing markets as those investors seek out diversification and hard assets. This has become a familiar phenomenon in this city. Partly as a consequence, the average selling price of a home in Vancouver is now nearly 11 times the average Vancouver family’s household income, a multiple similar to those seen in Hong Kong and Sydney cities that have also become part of a more globalized real estate market. Such valuations are extreme in both Canada and globally (Chart 16).

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This is a very good point. What makes me laugh is all the people here who have been calling the market overpriced for the last 10 years, but somehow now bring up references to being right or pouncing now that we’ve had a pullback to late 2016 valuations!

Historically the avg home in Canada cost 3.5x household income, and I believe 4.5x and 6x for Toronto and Vancouver respectively, if I remember correctly. The above quote by Mark Carney is from 2011, and references Vancouver at 11x earnings being an “extreme” valuation. We’re still WAY above those levels today.

Folks, let’s face it, those of us calling the market overvalued the last 5 or so years were right by historical standards….but likely made a bad call if we sold out or sat on the sidelines. For context, the market in Toronto would have to fall another 40% just to get to 2011 valuations. The RE market was simply detached from fundamentals (because of cheap money, investor psychology or whatever other reason you want to use), and still is!

In my mind, anyone buying in now or in the near future is taking on huge risk for all the reasons that have been outlined (cost of funds increasing, tightening of qualification criteria, overstretched households).

So please, let’s refrain from patting ourselves on the back and limit any references to “pouncing”…unless you believe that late 2016 was a bargain that is!

#203 LivinLarge on 01.11.18 at 12:43 am

“I agree with LivinLarge on this.”…I’ll notify the media.

#204 Doug in London on 01.11.18 at 1:27 pm

@LivinLarge, post #193:
I’m not one for bashing Buffalo, as I’ve taken a side trip there many times while visiting relatives in and around Fort Erie, but what you said reminds me of a joke I heard many years ago. Q: 1000 UFOs fly over Buffalo, which ones does Irv Weinstein report about? A: The ones that are on fire!

#205 Andre on 01.11.18 at 3:04 pm

I am of the opinion that to experience a material decline in real estate prices we would need to wait at least 3 – 4 years with an increasing rate environment. Most people will hold on their house and avoid a fire sale until they are not able to cut any other expenses.

#206 Steven Rowlandson on 01.11.18 at 3:24 pm

Garth it is going to take one hell of a price drop before real estate buying ever looks good at $15 per hour which is what tradesmen get paid in this country.

#207 LivinLarge on 01.11.18 at 3:27 pm

Doug, cracks me up. Thanks.