This will not end well

After most speeches I give, I talk to people who’ve asked for some time and advice. This time it was unique. All were Boomers. Most, in trouble.

The last few days reinforced what I’ve heard for months now, across the country. That retirement crisis I once forecast would hit us in 2015 is here, quiet, desperate and ugly. Can’t begin to tell you how many people I’ve sat down with across the country who are sixty, or close to it, with south of $250,000. No pensions. Some money going gangrenous in a GIC. Some dying in the orange guy’s shorts. Lots ensnared in high-cost, do-nothing mutual funds.

These are people who, until a few years ago, thought they were doing okay and, if they weren’t, they had time to recover. Now, in the wash of an endless recession, staring at a collapse in home equity, scary financial markets and the reality nobody would hire them again, they feel the icy fingers of dread. And so they should. Many are screwed.

So, this may not be common wisdom – especially among the Gen Xers and Yers who think the Boomers sucked the economy dry, inflated house prices and turned their drugged, wasted youth into affluent, job-hogging atrophy – but the financial descent of these former hippies now threatens everyone.

We know this: over 70% of us have no pension. Six in ten have no savings. Half have no RRSPs. Almost sixty per cent live paycheque-to-paycheque. And by far the greatest concentration of personal wealth has been in residential real estate.

Now, the coup de grâce. Recession.

The workplace massacre which has taken place since late 2008 is more brutal among this group than I had imagined. Early (forced) retirements. Salary reductions. Job sharing. And wave after wave of layoffs due to corporate restructuring and downsizing. I spoke to one woman two days ago who had been vice-president, corporate finance at a company which ditched 1,200 people 15 months ago. She’s 59 and has applied for 112 jobs without scoring one interview. “They look at the birth year of 1951,” she said, “and I’m goddamn toast.”

By the way, she’s divorced, owns a mortgaged condo in Surrey (worth $350,000) and received a severance of one year’s salary – $142,000.  She has $230,000 in savings and RRSPs, and a net worth just shy of $350,000.

“I thought I was doing everything right – no debt other than on my home, retirement savings building nicely, secure executive job, and at least six more years to get my act together. Now,” she told me, “I’m freaking out at night that I’ll never work again.”

And she probably won’t. Not as a v-p, anyway. Maybe serving food somewhere on 60 Ave.

Fact is, millions of people like this live in Canada and the States. Numbers here seem not to exist, but in America we know there are 2.2 million jobless Boomers, half of whom have been out of work for more than six months. The unemployment rate for this generation is 7.3% – the highest ever, and a cruel twist for those who never saw it coming. Never prepared.

Why does this matter if you’re, say, 35?

Well, it means a ton of residential real estate will be for sale over the next few years, when the market needs it the least. There’s a very good chance the price of housing will be forced substantially lower for at least an additional decade as a result. If you own property, it’s a wealth destroyer.

Second, having nine million old people worried about their finances means the engine which powered consumer spending for the past four decades is dry. Hard to imagine the loss of new car sales to Boomers will be made up by a rush on Depends.

Third, Boomers vote. In fact, they form the single biggest age-centric voting block in the country. And no political party will ignore 32% of the population – which doesn’t exactly bode well for taxes on everyone else when CPP and health care system are under assault.

But there’s some hope.

Let’s go back to the out-of-work executive in Surrey. Can she possibly look after herself for the next 30 years with no earnings and $350,000 in net worth?

Not if she does what 90% of her cohort opts for, putting her wealth in safe, secure and guaranteed assets, like interest-generating GICs. At a return of 3%, she ends up earning $18,000 a year (all of which is 100% taxable), plus about $7,000 a year in CPP after age 65. And trying living in the Lower Mainland, or in Toronto, on $25,000.

But if she invested in a portfolio of fixed income (corporate bonds and preferreds) plus some trusts and sector ETFs and equals the TSX return of the last 20 years (7%), her income would average $31,000 a year – much of which would be taxed at a far lower rate. Add in the CPP, and she’s a lot closer to $40,000.

This is called asset allocation. It’s the same $350,000 – just put in different places. It gives her an income higher by a half, along with choices and dignity.

I’ve said repeatedly the greatest risk we face is not losing money in assets that fluctuate, but rather running out of it. Never has this been truer. Galloping life expectancy and lousy habits guaranteed a problem. Now recession and real estate make it worse.

Boomers need a wake-up call. Then a kick in the ass.

176 comments ↓

#1 dmc on 09.20.10 at 9:41 pm

get on cbc radio1 internet and listen to the current review at 8pm pacific. talking debt and it’s bad. just heard it mountain time.

#2 Medic on 09.20.10 at 9:55 pm

Seems that this is the kind of scenario that Garth forecasted in “2015-After the Boom”. That was written about 15 years ago now. I guess not too many people took the advice that was dished out in that book. Too bad.

#3 mrmike on 09.20.10 at 9:55 pm

Garth, what do you think of “blend and extend”?
My wife is all over it.
our credit union is offering this and our current 5 yr fixed is at 4%. wife says we can get 3.75% if we blend and extend.
whats the deal with this? any idea?

#4 goldenfox on 09.20.10 at 10:02 pm

Are deflationists about to be proven wrong again!

snippet
“One prominent blogger in particular has been going insane, insisting day after day that Japan Is Us, to the point of psychosis—evidence to the contrary be damned. Every day, this blogger—Michael “Mish” Shedlock—bangs on the same old tired drum. Mr. Shedlock is affiliated with Sitka Pacific, whose performance leaves something to be desired. There are, apparently, a number of Sitka Pacific clients quite nervous about the direction of their investments. So it is reasonable to question whether Mr. Shedlock is ranting and raving how the U.S. is following the deflationary spiral that Japan did because he genuinely believes what he is saying, or because he is trying to convince someone—maybe his clients, maybe himself—of something that he knows in his bones might not be true. ”

http://gonzalolira.blogspot.com/2010/09/jpn-us-japan-is-not-us.html

#5 TaxHaven on 09.20.10 at 10:10 pm

All I want to know is why the issuers of these beloved preferred shares, etc., are going to keep paying out these comparatively rich returns in the face of a lengthening consumer slowdown, asset deflation & commodity inflation?

In a tax-adverse environment. In a semi-permanent slow-to-no-growth economy. Where is THEIR income coming from? How long is this corporate merger mania (driven by artificially-cheap money) going to go on?

Or are the issuers so very DESPERATE to raise cash that they are burining the furniture? If so, what does that tell us about an economy in which just about every actuarial assessment assumes 7-8% returns?

This can’t last. Non one can sustainably pay out 7% in an environment of 0-2% returns. Everyone else is busy like a beaver searching for ANY yield, to the point of stuffing every last penny into bank accounts, bond funds, and Treasuries…

Take it while it’s there but it won’t last.

#6 Dan in Victoria on 09.20.10 at 10:11 pm

Well I was doing some thinking over the weekend after I read about the 60 plus guy with the 1.4 mill being layed off.
The only way I still have a job is because I’m the boss.
I can’t lift anything over about the middle of my chest, my arm sockets are shot, back hurts like hell, Advils every night. My doctor just shakes his head.
Been too hard on yourself Dan, is his diagnois.
I put in 2 -12 hour days on the weekend putting down sub floor and hardwood.
I got thinking I won’t get laid off, It will just be impossible to do as much as I have in the past.
So really, I’m no diffrent than our friend from the other day.
Kind of sad we’ll end up the same.

#7 Real Estate Realist on 09.20.10 at 10:15 pm

Yup. What is coming is going to give Canadians the shock of their lives. The early 90’s will look like a walk in the park and the 20 somethings and 30 somethings who are still buying property and are completely clueless to the economics of what they are doing are going to be standing with mouths agape….and then crying most likely.

I’ve spoken to a few of them in the past few weeks, just feeling them out, and they not only don’t understand what a “bubble” is, but when I explain simplistically how it works and the facts and stats of today, plus what is already happening that the media is keeping from them, they say things like “but I make good money” and “it’s ok, I have a low ratio mortgage” and “I’m young, I’ll just pay it off”. I officially give up. I’m pretty good at explaining things in an easy to read (or listen) format, and they actually don’t get that the equity is like cash and it will be gone, for years, but the debt will be enormous, forever almost, so the equity may never come around again. Nuthin’. I’m one of those destructive boomers so what do I know? lol Did you hear? There’s a thing in the air about our nasty generation. Garth, do you have a young apprentice who can speak to these younger fools?

As for everyone else, the boomers in particular, I get a lot of the same thing. It seems that only people who are aware of this blog have the slightest clue, despite the fact that the red dots are everywhere, the lawn signs are growing by the day, and the retail sales (as in “pleeease buy our stuff!”) just won’t stop ~ in fact, are getting more desperate on a continual basis.

Just tell everyone you care about, pray that you’ll get through, and hope for the best.

#8 Boombust on 09.20.10 at 10:21 pm

“I put in 2 -12 hour days on the weekend putting down sub floor and hardwood…”

Salt of the earth.

Makes me SICK every time I hear/see/read about some idiot celebrity who has it all for doing ABSOLUTELY nothing.

#9 kc on 09.20.10 at 10:25 pm

109 VancouverGoinUp

“Nice to see you living off the wisdom of your wife’s family members. You see her folks bought and that’s why you can rent for 700 bucks.”

I can tell you are very new to this blog… this property was over 200 acres over 100 years ago when it was homesteaded. 700 a month goes towards the taxes and maintance. And I can see you fully missed my point…. if we were strapped to a 25-30 year mortgage, we wouldn’t be able to take advantage of the situation we are in. People who buy and need to move are basicaly screwed.

#10 Ayn Rand on 09.20.10 at 10:27 pm

Question for you Garth et al (let me know if I need to come to your TO session to get an answer and I will bring a date) –

I have a $130K variable rate mortgage due in May 2011; currently paying 0.5% below prime (my rate is 2.5% now). And a $45K HELOC at 1% above prime (now 4.0%). That LOC is really bugging me, and I also have a HELOC for $250K (well $250K-$45K) to take advantage of investment opportunities (per Money Road).

I see fixed 5 year rates at 3.6-3.7% and hear you say fixed rates could not likely go any lower. The Bank of Canada rate likely won’t go up for some time. But all rates will go up over the years.

So, should I combine the 2 now, lock in for 5 years on a 10 year amortization and pay the sucker off entirely (cost of $2,005 per month) or stay put, waiting until Jan get a 120 day preapproval to guarantee my rate and look to renew in May (and hope the rates go lower)?

My mortgage payment is my lowest house hold bill right now and I can easily afford 2-3X higher (partner quit job to stay home with kids and has been back at work for 3 years, so our circumstances changed from when we got the mortgage in 2006). This after moving from Toronto mortgage free to the “country” for 3 acres.

I’d have to pay a 3 month interest penalty to go fixed (unless my current co gives me a similar rate) but that is less than $700 for the 3 months.

Looking for good advice!. 3.6% (ING has 3.7%) is still pretty good. And I know 2016 will be challenging when I renew for the last time.

#11 Old_is_Gold on 09.20.10 at 10:32 pm

Bulldoze them Maybe they’ll do here what has been happening in the States, bulldozing of whole subdivisions. We should do that here and get rid of a lot of eyesore developments all across Canada, specially in the GTA. Shoeboxes on top of each other in the 2nd biggest country in the world – and that for 500K. What a con job!

It’s even worse in Winnipeg where the new subdivisions look a concentration camp, makes one wanna throw up their lunch just looking at them.

Sure ain’t gonna need so many houses with adult children moving back in with parents and all. All those ‘smart’ domestic and foreign investors unable to sell or rent their golden egg goose will simply walk away like they did in Alberta in the 80’s – jingle mail – dejavu all over again!

I’d say we have enough houses and condos for the next 20 years if not a single new one gets built these next two decades. Maybe Canadians will be migrating to China looking for a job, NAFTA, CAFTA – now SHAFTA, time to pay the piper has come!

#12 dave in calgary on 09.20.10 at 10:34 pm

“They look at the birth year of 1951,” she said, “and I’m goddamn toast.”

Who puts their birth year on a resume? Seriously? Perhaps the people chucking her resume in the garbage are thinking the same thing.

I was laid off for 10 months, put out well over 150-200 resumes, got two interviews, and one job. $142,000 severance! That’s a bit nicer than the $2,500 I got when laid off. Maybe put out a 100 more resumes instead of whining.

#13 mr mike on 09.20.10 at 10:35 pm

On the news today they said the recession in the US has now ended…it just ended today!

#14 T.O. Bubble Boy on 09.20.10 at 10:37 pm

Garth & The Blog Dogs: a question about Preferred Shares…

Almost all Preferred Shares in Canada are offered at $25, and most have some agreement that they can be bought back at $25/share at some point in the future (usually 5 years).

Now, let’s say that someone bought some preferred shares at $24/share, and let’s say the yield was 5.5% at the time.

If those shares increased in value to $26/share (+8.3% increase)… does it make sense to take the capital gain, and go buy some other Preferred Shares with a similar yield that are still under $25?

The way I see it, the gain is already above what the yield would have provided for an entire year, and a buyback at $25.00/share is always a possibility at some point, so why not “lock in” the gain?

Yes, Preferreds are purchased for income (not capital gains), but when the potential capital gain is 1-2 years of income if you realise it buy selling, wouldn’t it make sense to trade down to a “cheaper” stock offering a similar yield?

#15 VancouverGoinUP on 09.20.10 at 10:46 pm

In Vancouver we call it “shaking out the weak hands” No worries 1 billion Chinese knocking at the door wanting to get into Vancouver. These investors are going to mop up the weak bids and housing will continue to soar (Note: in Vancouver not the rest of Canada). When you make huge salaries and pay 10% tax it’s not hard to save. There is no recession in Vancouver – That’s right no recession. Don’t take my word for it, hop on a plane and come down. The Sold signs are everywhere and high end cars including the High School parking lots will amaze you. Now for your average born and raised Canadian making 50 grand a year – yes they have problems – These are not the people that World Class Vancouver caters. It’s called Vanhatten for a reason.

#16 Confused in Victoria on 09.20.10 at 10:51 pm

My mother-in-law needs demtia care. She is 82. Her living expenses have gone up from a $3,000 a month independent living suite to $6,000 a month care facility. As she declines (and she will) she will have to move again to about $8,000 – $10,000 for a private care dementia home.

I have friends that are in their middle late 40s who think they will be okay because they will inherit their parent’s money – think again. People are living longer. Alzheimers is on the rise. It will all be wiped out people.

People really think they will be fine because of their prudent hard working parents who are now in their 70s and 80s. Give me a break.

#17 Peter Pan on 09.20.10 at 10:55 pm

Not that I go out of my way to help Boomers with career advice (they’ve had their snout in the employment/benefits trough long enough), but tell this lady to get the reference to her birth year – 1951 – out of her resumé. It’s employment Kryptonite…

There’s a good article which came out in today’s NY Times… I’m sure the Globe and Mail is editing a Canadianized pale-imitation at the moment…

http://www.nytimes.com/2010/09/20/business/economy/20older.html?_r=1

#18 Basil Fawlty on 09.20.10 at 10:56 pm

“On the news today they said the recession in the US has now ended…it just ended today!”
What a joke, did industry suddenly decide to bring their factories back from China? No, that’s not it, there is an election coming up and the US economy is falling off a cliff. So, it’s time to stoke up the propaganda machines.

#19 junius on 09.20.10 at 11:00 pm

I had a fascinating discussion today with a Vancouver realtor. He is very bright and respectable. I ask him his take on the market. He said, “it is a great time sell.” I laughed and said that I had heard the drivel about the buyers market ending and how I didn’t believe it. However then he made his point.

He said that now is a great time to sell compared to a few months or years from now. In his view prices are headed down however most sellers don’t believe it. He has had a number of listings expire or be pulled.

His advice is to list the property and drop the price to something that will get it sold. There are very few listings and many remain over priced.

Made sense. Then I asked him what he thought of the long term market. He said it would be screwed for at least 5 years and probably longer. From that perspective I understand the position that it is a “seller’s market.” Except a realistic seller you must be.

#20 Mean Gene on 09.20.10 at 11:01 pm

The maximum CPP payout per month is $934.17 ($11210.04 PA) and OAS is $521.62 ($6259.44 PA) for a MAXIMUM total of $17,469.48 for a single person before income taxes.

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/rates.shtml

Assuming the 59 year old doesn’t work between now and 65, she should get more than $7000.00 PA in government benefits… Mr T, what am I missing???

The average CPP payout is $505 a month. You have to be in rough shape to get the max. — Garth

#21 Industrial Guy on 09.20.10 at 11:05 pm

Old_is_Gold # 8
“Bulldoze them Maybe they’ll do here what has been happening in the States,”

You’re a little behind the times …..

The City of Brantford Ontario is demolishing about a third of the downtown area. Over 40 buildings.

http://www.youtube.com/watch?v=fsm6H7H1TcM

#22 blase on 09.20.10 at 11:10 pm

You think the houses in GTA and Winnipeg are bad? Do a search on creb.com to look at houses in Calgary. Search $250,000-$350,000. U-G-L-Y, ugly! Now add in 15 foot wide lots, no garages in a climate where -40 winters are expected, where you have to plug your car in or it may not start. Stucco, brown, no trees. But you get paid $20,000 more than the median in other cities. Big deal, you lose that just on what you have to pay on a house, and you are stuck in the middle of bald ass prairie much, much farther than the eye can see.

#23 Debtisforever on 09.20.10 at 11:12 pm

And this morning on CBC radio’s The Current, silly Sherry Cooper was admitting that while Canadians have tons of debt, it’s all okay because we have our houses! And lots of equity in them!
Oh silly Sherry Cooper…someone needs to buy her a beer and have a nice, long talk about what happened in America when they had lots of debt but lots of nice, big houses.

#24 nonplused on 09.20.10 at 11:12 pm

Well, there are a few options

– Extend the mandatory retirement age. If people are living 20 years longer why can’t they work 5 years longer?

– Gradually phase down CPP. Part of the reason so many people don’t save is that they have to pay all this CPP premium while working and thus expect to get paid back while retired. So phase out both sides. No more mandatory CPP (could go into forced retirement accounts instead, like a locked in RRSP or something), and then pay out only to the most needy using general revenue, like social assistance does. It wouldn’t be perfect because RRSP’s are not guaranteed to perform, but it would reduce the moral hazard that comes from a government run system.

– Spread the message: “Government funded retirement was based on an assumption of continuous population and economic growth at levels that did not materialize, therefore it will fail.” Hopefully this will encourage those who can avoid becoming dependant on it from doing so.

– Cut government spending. Harshly. Maintain core services like defense (of this country! Not the world!), police, and the judicial system. Education could be liberalized (more on line home schooling, more private schools) and the unions banned. And they must bring public employee compensation and benefits in line with the private sector. Even if the wages have to go up in the short term, the retirement packages are unsustainable and way out of line with the private sector. Even EMS and the fire department needs to be scrutinized. 90% of the country’s land mass is served by volunteer fire services. Cities need to rethink how many professional fire fighters they really need, whether they should be sitting in a fire hall doing nothing most of the day, paid by the call out from home, volunteers, or some combination of all 3.

– Stop building $25 million foot bridges where a $5 million one will do, and don’t build any if there are already to others within a mile. Sorry, 1.4 km in Canada.

– Stop spending money on airports. If the airline industry really is viable (it isn’t), they can build their own damn airports.

– Rezone cities to be denser and build more light rail transit. This moves people around at a lot lower cost than our current freeway and auto structures do.

– “Nice to have” programs like the gun registry should be scrapped. It’s not that they are all bad ideas, but the “return on investment” isn’t there. Why spend $1.5 billion dollars a year to know which legal guns everyone has when you already know through the FAC program who can legally have a gun? If the gun or owner is illegal the registry does nothing to help. Also, cheaper systems like simply recording in a data base who is buying what ammo probably tells you all you need to know. Make the sports stores post the info over the internet and it could all be automated. All the police need to know is who bought what ammo on what date. Simple. Actually, they don’t even need to know that, since you need an FAC to buy anything, but if they want a database let’s make it cheap and enforceable.

– Get rid of all the “Commissions” and “Boards”. We have a judicial system for a reason and all the commissions and boards are just a way for the government to circumnavigate the courts.

– Simplify the tax code and lower taxes that impede economic activity.

– Simplify the rest of the codes too. Do you really need a permit to renovate your bathroom? I think not. Are garages permitted in your community? Then why do you need a permit to put one up? The simple fact that the city can make you tear it down if you build it out of spec is plenty of deterrent.

– Privatize Unemployment Insurance with oversight. UI should not be a political tool used to gather votes. Some people have no need of the program. They should be able to opt out. Some abuse the system. They should pay higher rates like a reckless driver would for auto insurance. The rest would find market rates that account for the real cost of providing the service. Plus, these sorts of programs also provide a moral hazard. No one who has their “weeks” in cares if they loose their job and they don’t get another until the benefits run out. The only people who care if they get fired for non-performance are highly paid; UI doesn’t compensate them adequately to fund their lifestyles.

I could go on and on. The long and the short of it is that the “New Deal” was a “Bad Deal”. Some government involvement in the economy is unavoidable but we’re at levels now that would make most socialist blush. The deal is going to change, and it’s going to sound a lot more like “self reliance” with a hint of “charity”.

The alternative is, of course, collapse. Anything that cannot go on, doesn’t.

#25 Timing is Everything on 09.20.10 at 11:15 pm

“We know this: over 70% of us have no pension. Six in ten have no savings. Half have no RRSPs. Almost sixty per cent live paycheque-to-paycheque. And by far the greatest concentration of personal wealth has been in residential real estate.”

>>>Sucks to be them.

—————————————————————-

#8 Old_is_Gold on 09.20.10 at 10:32 pm

“Bulldoze them. Maybe they’ll do here what has been happening in the States, bulldozing of whole subdivisions. We should do that here and get rid of a lot of eyesore developments all across Canada, specially in the GTA. Shoeboxes on top of each other in the 2nd biggest country in the world – and that for 500K. What a con job! ”

>>>Agreed…Every Canadian citizen could be allocated their 2 acres of arable land…
I had to buy mine, although it was relatively cheap at the time.

#26 T.O. Bubble Boy on 09.20.10 at 11:18 pm

@ #15 VancouverGoinUP:

“sold signs are everywhere”?

I guess you haven’t visited the Olympic Village recently.

#27 Foggy on 09.20.10 at 11:19 pm

There is hardly any tax payable on an income of $18,000 per year. CPP is also available to her at ages 60–>65. The penalty is 6% for each year prior to age 65. And she can easily move to a cheaper area of the country. And she has cash. She’s way ahead of a lot of people around her age. She doesn’t need to be poor in a large, crowded city. There are many alternatives.

The fact you think she’s better off than lots of other people her age proves my point. This will not end well. — Garth

#28 Bigboy on 09.20.10 at 11:24 pm

17meanjean—-Garth I don’t understand your statement “you have to be in rough shape to get the max”. CPP max of $934 is paid because you have worked long enough and have paid the max CPP contributions. Were you maybe referring to guaranteed income supplement (GIS) which is paid to those receiving OAS and have income under $16,000 per year?

Too many think they can live off CPP/OAS payments. As I said, the average CPP payout is $505 a month and the OAS average is $490. That’s $12,000 a year. Enjoy. — Garth

#29 Patz on 09.20.10 at 11:27 pm

#9 Ayn Rand (is that an aptly chosen moniker?)

Pardon me if this sounds rude Ayn—you don’t mind if I call you Ayn do you? But you don’t want much from a free blog do you? If I were Garth I’d say sure come to the Toronto seminar—with your checkbook. But I’m not Garth, so maybe he’ll take you to Le Select for lunch and dish out free advice. :)

#30 pablo on 09.20.10 at 11:28 pm

First to mrmike re blend/extend, careful to weigh the interest savings over the new term versus the fees and costs to do this, unless the credit union is willing to eat all the costs to keep you tied up. Secondly; this blog resonates with me as it’s a frigg’n big boat with alot of us in it; and i’m a long way from 65 never mind the long life span…….golden years my ass. oh and for dave in calgary; grow a heart or at least develop some empathy.

#31 Old_is_Gold on 09.20.10 at 11:37 pm

#24 nonplused on 09.20.10 at 11:12 pm

You are talking sense but what makes you think that politicians want to do anything sensible? Here’s a little secret! They have an agenda that does not include the welfare of the citizens, period, end of story. Yes, they do have an agenda…

_____________________________________________
Bill (Peterborough) / the last link won’t work, try this one!

E-mail

#32 mr mike on 09.20.10 at 11:39 pm

#18 Basil Fawlty
I know, these guys are buying up there own bonds, monetizing their own debt, and the recession has ended?
It is a joke. I just wish i didn’t live next door to these guys.

#33 wes_coast on 09.20.10 at 11:40 pm

Garth said:
But if she invested in a portfolio of fixed income (corporate bonds and preferreds) plus some trusts and sector ETFs and equals the TSX return of the last 20 years (7%), her income would average $31,000 a year

While I agree with most of Garth’s outlook on economics, it seems very ‘un-Garth’ to assume a 7% return from the TSX just because the last 20 years gave us that. This is no different than the housing market giving us steady returns for 20 years. Those days are over.

The stock market grew in tandem (like all asset classes) with the growth of credit. People are now saturated with credit. They placed risky bets because they thought the well would never dry up and there would always be a ‘greater fool’ with even more credit to spend.

Stock markets, like the housing market, are not going back to the way things were. We are in a paradigm shift. The old way is dead. There will be a new way eventually which will come from creating tangible innovations that propel society forward – versus the old way of creating credit to stimulate the masses to consume like a massive parasitic outbreak.

The problem with the stock market returns of the past, is they were all built on the parasitic model and now the body we infected is in full rigor.

If you look at the early days of the stock market circa WW1 you would see price earnings ratios in the single digits. Today the average sits around 20 times earnings (during the largest jobless recession since the Great Depression). Before the great crash of 2007/2008 they were much higher. This is simply a reflection of too much captial chasing too few resources. Typically this would have registered inflation and subsequent market mechanisms would have kicked in to balance out the market. Something went wrong. The guage said we were at 30,000 feet yet the clearing fog shows us hurtling towards a mountain side straight ahead.

The question is: Is a rush to stocks, bonds, preferreds now the same as the early vultures who will rush in after the initial drop in housing? Will they rush in expecting the same ride the TSX gave us 20 years ago? There is no simple solution to 4 decades of absolute disregard for risk.

Nice speech, but the market reflects economic growth and corporate profits. Both will obviously shock you over the next few years. — Garth

#34 604genX on 09.20.10 at 11:42 pm

September MLS sales for Greater Vancouver area are looking ugly – continuing the trend of July and August as Garth predicted.

Projection for September, 2010 based upon data to September 20th.

Sales = 2,042 (-42.6% YoY)
New Listings = 4,439
Current Sell/List = 46.0% for September

This is the second worst performance in 10 years (only 2008 was worse when the wheels blew off in June).

#35 Old_is_Gold on 09.20.10 at 11:46 pm

#16 Confused in Victoria on 09.20.10 at 10:51 pm

“I have friends that are in their middle late 40s who think they will be okay because they will inherit their parent’s money – think again. People are living longer. Alzheimers is on the rise. It will all be wiped out people.”

_____________________________________________
Remember that scene from ‘Soylent Green’ where the Edward Robinson character watches horses racing in the meadows before before the State gently helped him move into the great beyond (with dignity!) There won’t be too may 80 year olds with Alzheimers around in another decade or so. Can’t you see the Brave New World Order is coming, rather it’s already here?

Another asinine and insensitive comment like that and you are snuff. — Garth

#36 Elmer on 09.20.10 at 11:47 pm

Garth, quit knocking mutual funds. They perform just as well as your precious preferreds and sector ETFs (who cares about high MERs, what I get net of the MER is all that matters), they are just as liquid, and they are easier to set up and to maintain for someone who knows little about investing.

The Eighties called to thank you. — Garth

#37 mr mike on 09.20.10 at 11:48 pm

#30 pablo
Its a $100 fee and they will bring the rate to 3.59% down from 4%…I thought it was 3.75% but its turned to 3.59% now.
We renewed back in oct 08 when the sky was falling for 5 yr fixed at 4%
What am i missing here?
This seems to good to be true?

#38 JET on 09.20.10 at 11:51 pm

Garth,
What’s the chance of these “near-mature” boomers hatching out of their mcmansions earlier than the due date? I mean they are affected by the trend as anyone else aren’t they? If they perceive a downtrend, would they not want to eject earlier? Just wondering if there’s any chance the onslaught of boomer properties will come earlier than 2015, given the dim employment prospects for some of these folks.

#39 bullion.bunny on 09.20.10 at 11:55 pm

Nice speech, but the market reflects economic growth and corporate profits. Both will obviously shock you over the next few years. — Garth

Not really……..the market is reflecting credit growth, nothing more. Corporate profits are due to massive layoffs and cost cutting, these will backfire next year.

Wrong. Check out balance sheet cash. — Garth

#40 bullion.bunny on 09.21.10 at 12:04 am

Wrong. Check out balance sheet cash. — Garth

Garth,Garth,Garth……credit markets lead the stock market lead the economy. Those so called corporate profits can evaporate just like they did in 2008. As credit contracts further so will corporate profits. Sorry it’s the way it works and always has.

#41 Taxpayer like everyone else on 09.21.10 at 12:13 am

24 Non-plused

“Privatize Unemployment Insurance with oversight”

An interesting but simple concept I have thought about for years. Not sure if you have to truly privatize, but yes make it more like true insurance.

#42 Mark on 09.21.10 at 12:22 am

How does a lady who can get herself into a $142k job manage to have no savings by the time she’s 59?

#16, are you on strong drugs or something?

#43 Grandpa Grinch on 09.21.10 at 12:23 am

Boomers? How bout everyone needs to wake the hell up! There are only a handful of sectors that wont feel the brunt of the the boomer wave – mainly health care, pharma, retirement props (assisted living) & energy. Every other industry is going to take it in the nuts when Boomers go income oriented and stop buying plasmas, cars & appliances. Everyone in the service industry is going to take a massive pay cut or get EI.

Those I work with in their 30’s and 40’s who assume they have forever to save for retirement are royally screwed. Not only will their homes become worth less for the foreseeable future, but their LOC’s, BMW’S & golf vacations have resulted in their axing future saving.

Mrs. Grinch & I make more than double the average household income and save 1/4 of our after tax income and we’re still concerned, despite my amazing returns. 2012-16 will be good vultching years.

#44 Peter Pan on 09.21.10 at 12:25 am

@#34 604genX

MLS sales for Greater Vancouver area are looking ugly – continuing the trend of July and August as Garth predicted.
—————-
According to GVREB, Vancouverites are still out on vacation, at the cottage or on their boats, enjoying the great weather…

Seriously, I wonder what lame excuse GVREB will come up to explain these feeble stats… All I know is the Vancouver Sun will publish these lame excuses as Gospel Truth…

#45 Nostradamus Le Mad Vlad on 09.21.10 at 12:32 am


“Hormones. Most, in trouble. Many are screwed. Now, the coup de grâce. Recession. Never prepared. This will not end well. — Garth”

I notice a distinctly darker tone in the latest post. Is reality finally beginning to settle in, as a lot of bloggers have been saying for a couple of years now?

I do have compassion for the lady in question, as being bumped out of a well-paid job then trying to find something equivalent does not portray a happy life. It truly is a dog-eat-dog world out there, and all comfort zones have gone.
*
Our beloved PM in all his glory. Plus this. By controlling the m$m (as he claims), Cdn. sheeple are none the wiser for what is happening.

A good time to spread The Gospel According To Garth!

We cannot see the forest for the trees, and maybe that is why Harper holds the m$m in such contempt by trying to get Sun-TV up and running. He doesn’t want us to have to face reality.

From the English rags, so it must be true!

Den of Vipers It appears there is more than meets the eye to the RE mess.

Passing the buck. After all, the cycles are moving from west to east.

Avoid vaccinations altogether; instead, plenty of Vitamin D, D3, fresh air and a reasonable amount of exercise (blogging and thinking only burns a few calories!).

This could be where the CPC gets its junk / drivel from!

#46 Real Estate Realist on 09.21.10 at 12:39 am

#15 “VancouverGoinUp”

I can’t take it anymore. I did my time in BC, Victoria and Vancouver, all the while paying strict attention to details ranging from demographics to real estate to weather to the psychology of the people to infrastructure to how each level of government operates. That’s just what I do. It ain’t no accident and it ain’t casual.

Vancouver is going DOWN and it is long, long overdue. And were you the one who said recently that it is the greatest city in the world? Well, other than the coming economic demise, how about the fact that it rains for appx 8 months a year and there is no sun for 9 months? How about the fact that the gridlock, due to the worst infrastructure I’ve ever seen in my life, makes Toronto look like a one horse town, even in rush hour? Trust me people, you’d have to experience both on a consistent basis to see the difference between oh, let’s say it like this: huge city with large population vs. TINY city with TOO large a population, in conjunction with endless roads to escape the gridlock vs. NO roads to escape the gridlock.

I could go on, there are volumes to tell, but I’ll stick to the attractiveness of the city in economic and structural terms. The most grossly overpriced real estate in the country, terrible weather, terrible gridlock with not even alternative routes to compensate, lackadasial business practices and people who think BC is God’s gift to mankind.

I rented (Buy? Can you say insane?) part of a $1.5 million house (from 04-06, probably went ridiculously UP since then) in lovely Arbutus (little section of streets between Kitsilano and horse covered Shaughnessy) that was a typical looking 2 level BOX , on a street where the average was well over a million and the boxes were full of high income “suits”. It had, as they all did, an unattractive, flat, stucco facade. The framing inside was so weak I could only imagine what an earthquake (you know, the big one that is coming) would do, the basement was also typical (low ceilings, practically no insulation but illegally turned into a basement suite, also typical), very shoddy construction all around (know a thing or two about inspection), brown grass all summer, only green is in the winter when it rains every…..single……..day for months, (then eases into almost every day until the end of June, starts agin in September until June…yadadada) and people have to spend a fortune to have their lawns professionally aerated just so the grass can survive from year to year. Oh, and then there’s the precarious water supply. Yeah, that’s a good one. Scary as hell.

I won’t get into the business climate or real estate market in Victoria. It’s bad, but Vancouver is much more multi-dimensional and not in a good way. I’ve also spent a lot of time over many parts of BC, understand what’s coming, and why. I can’t watch you promote BC as a place with untouchable real estate, not even acknowledging the shoddy construction practices, the weather, the infrastructure problems, etc, etc, etc. God forbid someone from another place listens to you and buys in BC today.

The most amazing thing of all, as an astute observer of such things, is that even as the economy collapses around everyone, most will still not take it in. Canadians are slow to react unfortunately. Here nor there because the correction (weak word I believe) that is long overdue in this country, but especially in BC where the properties are not only overvalued but the “what you get for your money” is beyond ridiculous in a lot of cases, is going to be so game changing that present values will NEVER return. Some will survive financially, most won’t. Actually, I think the present values returning anywhere is a long shot, but definitely not in BC.

p.s. You may love your Asian investors’ money but guess what? They aren’t stupid. You’ll see. Actually, I’d bet the farm that there is much going on that you AREN’T seeing. Like, um, who many of the sellers are right now? Many also got in on Phase I or Phase II of those condo developments and are long, long gone. Sold off to greater fools.

#47 csharp on 09.21.10 at 12:58 am

Falling asset prices and rising cost of living. There’s a term for it: biflation.

http://balancejunkie.com/2010/09/20/are-you-ready-for-biflation/

#48 Crash Callaway on 09.21.10 at 1:03 am

#24 nonplused

– Then there’s the fix for hospital bed shortages…
put in bunk beds!

– Make the old farts work till their 70 and then implement death panels to off them as a way of saying thanks!

I could go on and on but that would take away all the surprises of the New World Nazi Regime waiting down the road.

#49 604genX on 09.21.10 at 1:34 am

#44 PP, the dim-witted journalists at Vancouver Sun/Province will lap up whatever Cameron Muir and the other industry fluff girls throw at them. The real estate section in the papers are stuffed full of ads and CanWest needs every cent they can hustle from local developers trying to flog inventory under construction.

My favourite story lately explaining July/August’s sales collapse was that it was “Ghost month” in the Chinese calendar (apparently the 7th lunar month each year is an unlucky month to buy real estate).

#50 604genX on 09.21.10 at 1:41 am

A prediction from a real estate banker: Keep your eye on suburban rental vacancy rates. Those cheap-ish condos were bought by people who had no business over-extending themselves (and could not afford to buy closer to town). These rocket-scientists also have little cash reserves. As vacancies slowly open up downtown it will suck in renters, and leave those suburban investment units vacant for 2-3 months. Since the owners can’t afford to carry them long, they will bail out and put them on the market. Together, like lemmings off a cliff.

The vacancy and pricing pressure rolls in after that. Apparently this happened in 1989.

And why will vacancies open downtown? On top of too many units already built, it will be made worse by developers who can’t sell new units will choose to rent them for a year or so. This allows avoidance of HST since previously occupied units do not trigger HST when sold. That explains why so many developers are switching their projects to rental now.

#51 dark sad person on 09.21.10 at 2:02 am

I’ve said repeatedly the greatest risk we face is not losing money in assets that fluctuate, but rather running out of it. Never has this been truer. Galloping life expectancy and lousy habits guaranteed a problem. Now recession and real estate make it worse.

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

Maybe-just maybe G–you are looking at tomorrow-without factoring in the positive effects of the Deflation-you are calling for–
Yes–taxes will be a killer-but-if-deflation is the future-then-people in low yield “safe” investments “could” be just fine-with 250k or whatever–

Here’s what smokes in Deflation (without a lot of risk)

Government Bonds-Cash-short term Treasuries and Gold will be about the only things that do not get slaughtered–
Cash in deflation increases in buying power-
Its yield-will increase–for those who can see–
What is the guarantee-that any of those Company’s preferred shares-will be cash rich enough to pay out-those yields?
I like cash–i especially like US cash-
I like Gold too-but-don’t want to trigger anyone’s PMS-

The dollar today-will be a stronger dollar tomorrow-unless-it blows up–which is why i really like Gold-but-
wont try and sell that here–but-
in Deflation-everything deflates against Gold–but–
don’t want to push that one–

#52 Kilt on 09.21.10 at 2:10 am

Hey Garth.

What happens if the government doubles cpp payments. Then the boomers will have some fairly good income. Certainly enough to survive on, especially if they own their own home.

http://agentwill.com/weekly-stats/

Still waiting for the crash. Last weeks sales/list was looking pretty good at 32%, but this week we are back to over 50%. Supply and demand. Demand may not be strong, but there just isn’t that much supply.

Kilt.

#53 betamax on 09.21.10 at 2:10 am

#15 VancouverGoinUP: “There is no recession in Vancouver – That’s right no recession. Don’t take my word for it, hop on a plane and come down. The Sold signs are everywhere….”

I see Nostro Jr has found a new handle, maybe a new IP as well. I live in Van, and sold signs are far fewer this year, as #34 above makes clear with stats.

#54 Teach a man to fish on 09.21.10 at 2:25 am

A small problem with preferreds. I do think Garth is right here about investing in preferreds for income, not Capital Growth. But really, isn’t Capital growth just as important?

If you do not take your money out then there is no problem if preferreds lose value (share price). But isn’t that really the same as RE then which we know is a poor investment today.

Here is the catch. Ok, you buy some preferreds paying 5%, buy them for $60 a share, they go down to $40, but you are getting 5% so you are happy. Then the dividend gets cut to 4%, or 3%, maybe that isn’t enough return… now you can’t sell them (as you are down 33% in stock value), 3 or 4% isn’t “enough” to live on… now what?

I guess you can’t have your cake and eat it too, but the “don’t worry about the value of something you buy as long as it’s paying x% return a year” arguement doesn’t sit well with me.

Bank preferreds dividends were not even touched in the financial crisis. You are making this up. — Garth

#55 DW on 09.21.10 at 2:29 am

VancouverGoinup…..You must be smokin some of that B.C bud or somethin.

#56 Jay Currie on 09.21.10 at 3:20 am

As ever, Garth, you nail us boomers correctly.

(Thank God I rent!)

But I am very interested in your view of the equity markets. You are assuming growth – indeed, explosive growth. I am not seeing it. Which sectors? Why?

By your mantra the Canadian banks are essentially screwed, albeit in slow motion. You seem to believe that oil is peaking, or peaked. You are not a gold fan.

A worldwide deflation is likely to hit equities as hard as the rest of the economy. Or are things different there? Are bazillions of Chinese (who are hardly immune) suddenly going to see Blackberries as really cool? Will Brazil have a sudden hard on for Canadian potash?

I think you are dead right on houses (did I mention I rent) but I am perplexed as to equities. Yes, lots of companies have lots of cash on hand. But that suggests to me that they have no clue what to do with the stuff.

#57 Tony on 09.21.10 at 3:56 am

I’d opt for putting the money in GIC’s not in preferred shares unless you’re on the verge of declaring personal bankruptcy and can absorb a 60 to 80 percent loss in the stock market.

Fear blinds. — Garth

#58 Tony on 09.21.10 at 4:07 am

#4 goldenfox on 09.20.10 at 10:02 pm

The guy is right but America will come out of it in worst shape than Japan. When something is overvalued it eventually falls. Americans have most of their money in real estate and stocks. Real estate in America has been overvalued since 2006, stocks have been overvalued since the mid 1980’s. The second shoe will drop in the stock market over the next several years wiping out any wealth left in America.

#59 Cow Man on 09.21.10 at 6:22 am

# 35 Old-is-Gold

You are absolutely right, regardless of Garth’s admonishment.

#60 Downbytheriver on 09.21.10 at 6:24 am

@Bullion.bunny – gold is just as dependent on cheap credit to remain propped up. Interest rates should never be as cheap as they got – triggered both this stupid bubble and is ripping off the retired.

Someone near where I live in Niagara region just dropped their house listing price. It’s a decent sized house with a good lot – not too late for a boomer in the GTA or Vancouver to sell there and buy this one for cash and then some.

O/T but I missed a thread two days ago where Mr. Turner wrote about all the monster houses for sale along the waterfront in Burlington.

Well, I took a friend for a drive to gawk at all the similar abodes along the Niagara Parkway just south of Chippawa on the way to Fort Erie.

It seemed the larger the mansion, the higher the odds of a For Sale sign being stuck out front. Just amazing – it seemed nearly all of them were on the market.

#61 David B on 09.21.10 at 6:48 am

This gal has a chance ……but how many do not? I read an article where the government is about to sue the kids for not looking after their parents should they apply for welfare. There is an old law on the books it seems ….. anyone else read or listen to it on radio?

#62 Ben on 09.21.10 at 6:56 am

Just think how f uk ed boomers would be if there one and only asset hadn’t doubled in price the last 5 years.

#63 Moneta on 09.21.10 at 6:58 am

Or are the issuers so very DESPERATE to raise cash that they are burining the furniture? If so, what does that tell us about an economy in which just about every actuarial assessment assumes 7-8% returns?
——
I agree and I don’t think it’s Garth’s portfolio that’s going to save the boomers.

I’ve been in the investment business for 20 years and have never seen retail get rich by investing (apart from 1 or 2 lucky ones, and even then easy come easy go…). Heck, even the pros don’t get rich unless they get insider info, options or a bank buys them up!

The reality is that most should be happy to beat inflation. The last 2 decades of high real returns have been a historical aberration. So the masses are due for negative real returns. If they didn’t plan when times were good, tough.

What the 350K net worth boomers need to do is shrink their expectations and fast. Sell the house ASAP if their retirement depends on a downsize. But we all know that only a few will be able to do it.

Get the popcorn.

#64 bigrider on 09.21.10 at 7:00 am

I have been ensnared by the expensive mutual funds at Sprott and Frontstreet capital. Been thinking of ETF’s to save money but it seems to me that it’s like putting the cart before the horse.
Going to add on even more fees by adding funds to my investments in hedge funds. Boy, that 20% performance bonus they take in addition to the 2.5% MER really kills you when your returns exceed 330% in a given year( think Dynamic).

#65 Nancy on 09.21.10 at 7:00 am

Windsor should start marketing itself as a retirement community.

Seriously.

#66 Ben on 09.21.10 at 7:04 am

The sheeple piling into bonds

http://finance.yahoo.com/tech-ticker/bob-prechter-my-charts-say-dow-may-plummet-to-2000-535437.html?tickers=%5Edji,IAU,HYG,PHB,JNK,%5ETNX,GLD

Bob Prechter = always wrong. — Garth

#67 Moneta on 09.21.10 at 7:08 am

Garth, do you have a young apprentice who can speak to these younger fools?
———–
People think WHAT they need to think WHEN they need to think it.

Right now, all that can be done is preaching to the converted.

#68 pbrasseur on 09.21.10 at 7:25 am

Stock markets, like the housing market, are not going back to the way things were. We are in a paradigm shift. – wes_coast (#33)

O man haven’t we heard that one before!!!!!

Look. historicaly companies have grown on average about 7% per year, this isn’t likely to change, if businesses can’t make a profit here they will make it elsewhere and in the end the stock market will reflect that fact. The trick is to find a group of quality companies which will grow more than that and wait for the market to acknowlege.

As an investor there is a simple fact you should know and remember:

Companies are the only asset class that create wealth, houses most certainely do not, neither do governement or corporate bonds or any commodity including gold.

Don’t like the stock market? Think of this:

If a company raises its dividend by 10% a year (which many have done for decades) you will recoup you capital in 14 years and the yield on your iriginal investment will have almost quadrupled. Nod bad but even better when you realize many dividend paying blue chips that are exposed to the world economy are selling at hystorical lows right now.

Here’s an example of a nive portfolio:

http://dividendsvalue.com/holdings/dividend-stock-and-etfcef-holdings/

#69 Moneta on 09.21.10 at 7:28 am

Mean Gene:

If the wifey stayed home to care for the kids, she won’t get much CPP. You need to make the max to get those benefits.

As far as I know, a lot of boomer moms stayed home for a while to care for the kids. And when they went back they weren’t making the income to cap the benefits.

#70 bigrider on 09.21.10 at 7:34 am

Garth- I believe ,as you seem to as well, that corporate profitability, growth and the resurgence in demand for financial assets will outstrip current perceptions of most, especially on this blog. The stock market(s) (most) will do very well over next ten years.

If you believe this, would you not be more inclined to own common shares and participate in such growth of said company/corporation rather than curtailing yourself to the reliable 5% spew of a dividend of same?

I advocate owning bonds, preferreds, trusts and sector ETFs, as I have said a few thousand times. Typically in a 40/60 fixed-growth portfolio, preferreds would occupy 15%. Survival is all about balance. — Garth

#71 no_cost_like_home on 09.21.10 at 7:35 am

Damn Garth, please tell me more work goes into finding those kick ass pictures than writing those witty articles!
You Rock Garth!

#72 bullion.bunny on 09.21.10 at 7:42 am

Bob Prechter = always wrong. — Garth

Yes, most of the time he is wrong…….poor research, but his has been right a few times in the past.

#73 bullion.bunny on 09.21.10 at 7:45 am

#51 dark sad person on 09.21.10 at 2:02 am

in Deflation-everything deflates against Gold–but–
don’t want to push that one–

Finally…………the correct answer!

#74 Brian1 on 09.21.10 at 7:53 am

Yesterdays O’Leary gives a good summation of gold. In essence, if gold were to be king it would be a world where even a nervous nellie goldbug would not want to live in.

#75 C on 09.21.10 at 8:09 am

Garth,

So true about the Boomers now trying to crystalize their real estate gains. Just like you touched upon a few days ago, how there are many McMansions up for sale along Lakeshore Rd in Burlington. A prime area just off Lakeshore Rd in Burlington is Roseland. Tons of houses for sale all +$1M-$3M. Some have been on the market for over a year now.

I agree that everything has moved forward. I think the collapse of ’08 has wounded many Boomers and like you keep saying, Boomers are looking at their primary residence as a nice cash in. Plus too, why do you need 5 bedrooms, a 3 car garage, and 4 bathrooms when there’s just two of you left and you’re older than 60?

The property taxes on these properties are north of $10K-$15K a year. What a waste when you think about it.

All to keep up with the Joneses.

Boomers are now saying the hell with the Joneses, we’ve got to start doing the math here.

The momentum is building.

#76 LH on 09.21.10 at 8:17 am

142 grand a year to push papers and have meetings. That’s a gravy train that couldn’t last.

She knows her age is a problem, yet puts her birth date on her resume?

Ever met an employer who did not factor in a candidate’s age? — Garth

#77 Teach a man to fish on 09.21.10 at 8:26 am

#63 Moneta …I’ve been in the investment business for 20 years and have never seen retail get rich by investing (apart from 1 or 2 lucky ones, and even then easy come easy go…)…The reality is that most should be happy to beat inflation”

I’m all ears, tell me more.

The goal is not rich. It is having enough money for an adequate life. — Garth

#78 Teach a man to fish on 09.21.10 at 8:31 am

#54 Teach a man to fish “Bank preferreds dividends were not even touched in the financial crisis. You are making this up. — Garth”

Sorry Garth for the misunderstanding in my post. It was a question, not a statement of fact. :)

#79 grantmi on 09.21.10 at 8:31 am

I love Mish!!! talking about Charie Munger’s comments about we’re LUCKY that we had a bail out… and suck it up sunshine!!!!

Yet [Charles – Berkshire Hathaway] Munger wants us to “suck it in and cope” and expect to be happy that he did not get wiped out.

You know what? It would have been a damn good thing if the culture died and assholes like Munger got wiped out. Munger just proved beyond a shadow of a doubt Wall Street’s culture was not worth saving.

http://bit.ly/cs8I8r

#80 BrianT on 09.21.10 at 8:52 am

#16Confused-the reality is that a very small % of Cdns have $10000 a month to spend on any facility (likewise a small % are in line for substantial inheritances). IMO you are better off having spent your money first, rather than handing $10000 a month over to anybody. What if the bill becomes $50000 a month-eventually you have to draw the line somewhere.

#81 bigrider on 09.21.10 at 8:53 am

Garth- Why would you not advocate investing in Sprott Canadian equity fund, or front street’s special opportunities fund (others as well) for example ,when there respective performances over a 10 year+ period have far outstripped comparative benchmarks, wiped out comparable etf’s and moped the floor with low cost index products. Anyone in any of these products have been very well served. Surely they justify the higher fees would you not say?

#82 BrianT on 09.21.10 at 8:55 am

One follow up-the blog is about money but all polls show that by far the #1 fear of Cdns over 65 is Alzheimers and dementia-Buffett’s money is no good to you if you go that route.

#83 C on 09.21.10 at 9:00 am

The Baltic Dry Index ($BDI) since hitting the 200 day moving average and getting rejected, is now down 12.4% since. That’s quite a drop in only 2 weeks. A good indicator of economic activity.

As for the recession officially being declared over in the summer of 2009, I’m still waiting for them to declare the depression of 2008??? Nice timing just before the elections in November and Obama doing a town hall on CNBC yesterday.

The US is such an ass backwards country.

#84 Kaganovich on 09.21.10 at 9:10 am

For the blog doggies,

M. Hudson’s advice to Brazil as to the economic policies they should pursue in the future:

http://michael-hudson.com/2010/09/how-brazil-can-defend-against-financialization/

Good explanation of why we in North America are where we are at this point.

#85 BrianT on 09.21.10 at 9:17 am

#63Moneta-most refuse to move to a low cost city. It is simple math-if you don’t work and you are not rich, you need to reside in a low wage locale-like I said, try convincing these older boomers to move-some will, but most would rather be poor.

#86 Bill ( Peterborough) on 09.21.10 at 9:40 am

Re #35 Gold_Is_Old

16 Confused in Victoria on 09.20.10 at 10:51 pm

“I have friends that are in their middle late 40s who think they will be okay because they will inherit their parent’s money – think again. People are living longer. Alzheimers is on the rise. It will all be wiped out people.”

___________________________________________
Remember that scene from ‘Soylent Green’ where the Edward Robinson character watches horses racing in the meadows before before the State gently helped him move into the great beyond (with dignity!) There won’t be too may 80 year olds with Alzheimers around in another decade or so. Can’t you see the Brave New World Order is coming, rather it’s already here?

Another asinine and insensitive comment like that and you are snuff. — Garth

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

Unfortunatley what you say is true.

Big Pharmasutical companies create alot of these illness’s in cahoots with the food industy. Too much sodium/sugars in foods ( all in the pretense that they are preservatives. Nitrates are known to be cancer causing…

All to make money of off these illness’s. The H1N1 vaccine is proven to be detremental to certain groups of people. ( I know 2 people who have died from the vaccine, they were healthy as horses before, now some class action suites will be coming forth shortly as a result of this)

Another example of the hidden agenda’s of bigbrother / Big business was the reaserch done on a tree out of South America ( graviola leaf). The ingedients in the leaf were proven to cure alot of the cancers, but because the pharmasutical companies could not synthesise the ingredients they shelved the research.( couldn’t make money of it.)

The Elite tell us that the world population has to be culled.

There is not enough money in the government pension coffers to support the boomers.

Now they can’t outright tell us that they will try to decrease the number of boomers, this would start a revolution. Instead they start cutting back in the health care field ( all under the guise of budget cuts), especially for the elderley people…

More experimental drugs are put on our society because of the lax laws. ( just look at all these new drug commercial’s on TV playing that soft music with that nuetral voice, toward the end telling of the side effects, some of which might even kill you.

I can go on and on…..

So Garth even though Old_Is Gold comments may sound harsh they are true.

If you wish to make a comment great, I can back this since I have a few friends in the health care field in all levels… ( Doctors, Nurses, Upper level consultants, ministry level…)

http://www.youtube.com/watch?v=B4SmFxyust0&feature=related

http://www.graviolaleaves.com/

#87 jwkimba on 09.21.10 at 9:46 am

All I want to know is why the issuers of these beloved preferred shares, etc., are going to keep paying out these comparatively rich returns in the face of a lengthening consumer slowdown, asset deflation & commodity inflation?

Get educated. Suspension of dividends is a bad, bad thing for an organization. It always leads to a massive shareprice hit, and fairly often leads to collapse. Exec board is paid by value of shares. They don’t want share prices collapsing. They won’t suspend/cut dividends unless the game is up…

#88 Bill ( Peterborough) on 09.21.10 at 9:51 am

# 6 Dan In Victoria

I know what you mean, alot of my older friends say the same , some question why. Most have been budget conscious all their lives and are saying the same thing you are. Alot are starting to see the big picture. We have been lied to, cheated by the government, and the politicians individual agendas to line their pockets at our expense, in general.

Self sufficientcy will be the key to survival.

#89 pjwlk on 09.21.10 at 9:54 am

#16 Confused in Victoria: “My mother-in-law needs demtia care. She is 82. Her living expenses have gone up from a $3,000 … to $6,000 … to about $8,000 – $10,000 for a private care dementia home.”
———–
My wife and I looked after my mother for 7 years. She also suffered from Alheimer’s . My experience with that is that the only one who cares about $10,000 for a private care facilities is you or your husband/wife and not your mother-in-law. Her world will become very very small if it hasn’t already, and she will not take notice of or care about the nice decorations and fancy stuff that you think is important.

If you can’t do it yourself, you’d be far better off paying a live-in person to help out than paying $10k/month to the parasites who pretend to give your MIL the best in care. If you don’t believe me go for a few surprise off-hours visits at the facility of your choice to see how things really are. I’m certain you’ll be surprised — I was.

#90 BrianT on 09.21.10 at 9:59 am

You have to read Mish’s column today-these guys like Munger, Buffett and Madoff are all cut from the same cloth-too bad Bernie got caught-he could be pontificating from on high like this piece of garbage http://globaleconomicanalysis.blogspot.com/

#91 Bill ( Peterborough) on 09.21.10 at 10:02 am

Old_Is_Gold
Thanks for e-mail, one off Garths Blog, sent you one at 9:30 am.

#92 J from Markham on 09.21.10 at 10:04 am

Dear Garth,

I’m reading your blog almost everyday. Frankly, I don’t have any idea about investing and we only have a very minimal cash to invest. We can here in Canada early 2008. Our family income is only 72K and job is not that stable for it is due for downsizing and to be outsource in other country.

Thanks to your website, we decided not to be tempted with peer pressure of buying a house. We’re renting for $950 at Markham and only happy to see that we don’t have to fret where to get the money in paying for the utilities and other taxes.

We have an RRSP but since we don’t have any idea about it, bank had placed it in a Mutual Funds (Balance Growth). May I ask an advise if possible, how much does it need so we can start investing on what you said about: “fixed income (corporate bonds and preferreds)”. Does it need bigger amount of cash to start with? Your advise would be much appreciated.

Again, thank you for this blog.

J

#93 Weeping in Windsor on 09.21.10 at 10:10 am

#65 Nancy

Windsor should start marketing itself as a retirement community.

They already started———

http://www.retirehere.ca/

#94 JM in London on 09.21.10 at 10:12 am

#19 junius on 09.20.10 at 11:00 pm

Sounds like you have a rare and coveted honest one there. They exist, but they’re like a Exeter White Squirrel…

#95 dark sad person on 09.21.10 at 10:15 am

By the way, she’s divorced, owns a mortgaged condo in Surrey (worth $350,000) and received a severance of one year’s salary – $142,000. She has $230,000 in savings and RRSPs, and a net worth just shy of $350,000.

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

Only one question-

Is she cute and is she available–
If so–
I can help–

http://www.youtube.com/watch?v=_zz8Pk9z1YE

#96 Devore on 09.21.10 at 10:19 am

#80 BrianT

#16Confused-the reality is that a very small % of Cdns have $10000 a month to spend on any facility (likewise a small % are in line for substantial inheritances). IMO you are better off having spent your money first, rather than handing $10000 a month over to anybody. What if the bill becomes $50000 a month-eventually you have to draw the line somewhere.

“Draw the line somewhere”? I think you’re gonna need to elaborate on this one. It’s not the first time you’ve said it; you seem to advocate spending all your money before you really need it. Are you still expecting the public health care system to take care of you? Let the chips fall where they may?

#97 YEG on 09.21.10 at 10:20 am

A couple of thoughts:

1.) Maybe she puts her age on her resume because she knows it will be an issue either way so might as well broadcast it up front so if she gets an interview she knows her age has already been disclosed and is not an issue. Maybe she should become a realtor. :)
2.) I have a feeling, but don’t know for sure, that she is holding out for an executive position. My Dad was laid off in 2008 got his six figure severance. He didn’t even apply for executive positions he started his own small business and got a job as a driver for Enterprise. With that small income, his OAS and CPP, he is doing just fine and hasn’t had to touch his savings yet.
3.) I agree with Garth on this post. My parents as an example were going down this same path until their late 30’s and someone slapped them around to get them to start saving. So I can see how many did not get this slap and are now in trouble.

#98 Joel Toronto on 09.21.10 at 10:23 am

No housing bubble in Canada You can trust this guyhttp://vimeo.com/14646665

#99 bigrider on 09.21.10 at 10:28 am

On the issue of fees.

People, please consider investing in some of the high fee investment products available to you. No slight against ETF’s or index funds intended.

You might find some of them actually are worth the extra 1 or 2 % or so per year.

#100 YEG on 09.21.10 at 10:31 am

Came back from Michigan, my wife is american and has family there. We were there last summer as well and just basing this on the amount of businesses that had shut down, deserted houses etc… I would say they are worse off this year than last. They certainly are not any better.

I think the US and Canada are a LONG way away from recovery. Things certainly seemed worse there than they are here there were major intersections with deserted hotels and restaurants on each corner, huge malls with maybe 4-5 tenants and the rest empty. Parking lots covered in weeds from not having been used in years. I have not seen any of that here.

If we are all experiencing the same recession but in different ways, I would say Canada is weathering the storm much better. Obviously I may be skewed as Michigan is probably the hardest hit state in the US and that is what I am basing it on.

#101 Old_is_Gold on 09.21.10 at 10:35 am

#91 Bill ( Peterborough) on 09.21.10 at 10:02 am

Bill: Not sure why but don’t have an e-mail from you. If you prefer you can just send me your e-mail address through the comments section on the link (this is different than the one you used last time.) These don’t get published automatically, so it will come to me directly. I’ll send you an e-mail which hopefully should resolve the problem.

#102 Moneta on 09.21.10 at 10:35 am

#63 Moneta …I’ve been in the investment business for 20 years and have never seen retail get rich by investing (apart from 1 or 2 lucky ones, and even then easy come easy go…)…The reality is that most should be happy to beat inflation”

I’m all ears, tell me more.

The goal is not rich. It is having enough money for an adequate life. — Garth

————
I guess it depends on your definition of rich.

According to you, we need 1 million.

According to our government, a household with 1 million in net worth is considered rich.

#103 grantmi on 09.21.10 at 10:38 am

Again! More on Munger!! Can you believe this old coot!! (He must be off his meds)

Munger’s prescription for the foreclosed masses suggests the result would be a form of justice that does us all a favor.

Bailing out homeowners would be “shoveling out money to people who say ‘My life is a little harder than it used to be,’” Munger said.

http://bit.ly/cbTXbV

Sorry Charlie!! Tell that to folks in the US who are living in their cars with kids, who lost their homes in this financial melt down!

What a prick!!

#104 Moneta on 09.21.10 at 10:42 am

#63Moneta-most refuse to move to a low cost city. It is simple math-if you don’t work and you are not rich, you need to reside in a low wage locale-like I said, try convincing these older boomers to move-some will, but most would rather be poor.
———-
Garth’s message goes against human nature. The only ones who are able to go against human nature are the ones who are at either end of the distribution curve. And they’re not going against their nature, they are the oddballs.

#105 WINNIPEGER on 09.21.10 at 10:57 am

http://www.calgarysun.com/homesandcondos/news/2010/09/20/15407096.html

http://www.calgaryherald.com/business/Calgary+housing+starts+positive/3555694/story.html

http://www.montrealgazette.com/business/Canada+living+glass+bubble+Desjardins+economists/3550854/story.html

Comments?

#106 Sandra on 09.21.10 at 11:11 am

For all who are berating the 59 yr old lady…..her resume likely lists her academic achievements. Therefore, her graduation dates would be a dead giveaway.

#107 Bill Muskoka (NAM) on 09.21.10 at 11:13 am

Commit to SIN (Stop Inflation Now). That is the primary reason so many are so short for the remainder of their lives.

On the other hand, legalizing euthanasia may become a necessity simply out of human kindness. Used to be one could go sit on an ice floe and drift into oblivion, then the morons melted all the ice.

#108 Dose of Depression on 09.21.10 at 11:38 am

I must admit that Garth’s articles and the comments are a goldmine of interesting and useful information.

#109 Jeff Smith on 09.21.10 at 11:39 am

>#24 nonplused on 09.20.10 at 11:12 pm
>Well, there are a few options
>
>- Rezone cities to be denser and build more light rail
>transit. This moves people around at a lot lower cost
>than our current freeway and auto structures do.

I have been advocating this all along, that’s why we need to make it easier for condos to go up. Make it so that developer have more incentives for building larger condo units (i.e. 3+ bedrooms). This will allow more families to live in the city centre instead of spreading all over the suburbs. The reliance of gasoline will go down because if they are in teh city, they can just take the TTC. On that note, the TTC system must be spruced up. In the era of high gas price, this is teh most logical thing to do.

#110 OnlyTheBankersLaugh on 09.21.10 at 11:47 am

You only put your most pertinent experience on your resume for job applied for. Adding your age is definitely not required. Ageism exists, no question, but you do not have to show any dates older than 1990 and can prove you belong by getting in the door first and showing the experience you bring and then maybe they will go further as long as your salary expectations are not higher than a 30 year old (which are not low as they expect to buy that $700000 McMansion). What works against you is Jack Welch’s new HR paradigm of young kids who have no idea who have no clue as to what companies need in terms of skills to support the business so they make decisions on youthful and energetic rather than energetic, mentoring and experienced. However, I digress about Dilbertisms which are so true that it’s scary.

#111 Jeff Smith on 09.21.10 at 11:48 am

Yesterday I called up an old friend who I haven’t spoken to in a while. She excitedly told me she recently won a bidding war against 2 other people for a townhouse out near Stouffville. Price was $415k Wowee! I quietly congratulated her on her victory. I know I will lose her as a friend if I keep up my usual; now is not a good time to buy. Luckily she said the realtore called her the next day and told her price has already went up, yep, in just one day. Sometimes you are just so helpless as an observing bystander.

#112 dark sad person on 09.21.10 at 11:49 am

So-Australian banks betting with leverage in the shady-opaque Derivative market-trying to build reserve capital in order to brace against the already realized losses-that are “off balance sheet” and the massive coming writedowns expected from European borrowers–

The exact thing that got their dumb greedy asses in a sling to begin with–

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

Austrian Banks Carry €2.6 Trillion in Derivatives –
Risk Unknown To Central Bank
Monday, September 20, 2010
Austrian banks may be sitting on a €2.6 Trillion off balance sheet derivatives time bomb and the central bank does not know how much risk is involved in these trades.
Oesterreichische Nationalbank (OeNB) governor Ewald Nowotny said in a live chat of Austrian daily “Der Standard”, he could not provide a material ad hoc figure for the actual net risk of these trades.
According to a (German language only) press release from last Thursday off balance sheet derivatives volume grew a stunning 13% to a record volume of €2.586 Trillion at the end of H2 2010 in Austria. This is roughly 2.5 times as much as the nationwide balance sum of all banks which stood barely unchanged at €1.037 Trillion in the same period.
It also has to be noted that this growth comes at a time of global de-leveraging and may indicate that Austrian banks try to make up for loan losses in Central Eastern Europe with bets on interest rates and currencies.

http://prudentinvestor.blogspot.com/2010/09/austrian-banks-carry-26-trillion-in.html

#113 JM in London on 09.21.10 at 12:07 pm

#106 WINNIPEGER on 09.21.10 at 10:57 am

*SNICKER* Hee Hee – WAH HAAHAAHAHAHAHAHAHA!!!

Does anyone remember when print media used to be the bastion of balanced reporting?

Oie Ve!!

#114 BrianT on 09.21.10 at 12:18 pm

#97Devore-IMO you have a mental block on this issue. Taking care of you? If you have dementia, “taking care of you” would be fixing your dementia, and that would be worth literally all the money you have. Putting you in a room and feeding you gruel is not “taking care of you” or your problem. Sometimes the exorbitant costs do make the relatives feel better, like spending $40000 on a birthday party for a 2 yr old.

#115 Jack on 09.21.10 at 12:23 pm

Age is a very real hiring factor (even if its illegal to discriminate), it impacts on the cost of a pension, disability, life and health insurance. Someone who made $150k applying for a position below that grade will not be considered a positive addition compared to a young hire excited about the same position and pay. Experience is not valued as much anymore. You’d have to be a real rainmaker to be employable over 50.

Schooled as an economist, I am very pessimistic about the next decade. I am so nervous, we moved into a downtown non-profit townhouse and sold the car. I don’t want to own anything that is not designed to make money. A personal residence is not an investment. I changed jobs from the private sector to the public sector. It seems to be working. I work less than 8 hours a day, with every third Friday off, plus a ton of holidays. Lots of time to sail, row and bike . I also try to live off one pay cheque per month and invest the other. As for what we invest in, I concur with Garth to invest in good dividend stocks and solid fixed income. I strayed a little for my LIRA. I put some into a Guaranteed Minimum Withdrawal Plan. As I can’t tap the money for years, this quasi-annuity looks OK. I am going to do real time tracking of this account with its high mer against my open market portfolio of preferred and bonds.

#116 MikeT on 09.21.10 at 12:25 pm

I advocate owning bonds, preferreds, trusts and sector ETFs, as I have said a few thousand times. Typically in a 40/60 fixed-growth portfolio, preferreds would occupy 10%. Survival is all about balance. — Garth
——————-

Say Garth, if you expect a strong rally in the stock market, why are you mentioning “survival”? In your opinion, is it not the time to get greedy for capital gains in the rally that you expect?

My definition of survival evidently includes more than does yours. — Garth

#117 fancy_pants on 09.21.10 at 12:30 pm

Hey I am no more a proponent of govt, RE agents or mass media than the next guy but during the blame game the finger so often and quickly points to others – blame yourself for mortgaging your ass to the hilt, not someone else. Sure the economic cards may have been dealt which enabled your lust and greed to get the better of you and some RE agent blew enough sunshine your way to make you sign the papers but if you are old enough to buy a house then you are old enough to make your own decisions and suffer the consequences.
What pisses me off is the responsible people who live within their means will ultimately end up paying for the irresponsible if/when the RE bubble bursts. I wish they would require minimum of 25% down and stop lending my savings for next to nothing (jack up them damm interest rates). When society is maxed out then lowering interest rates during economic downturn becomes ineffective – it just postpones, compounds and exaberates the credit problem.
The whole thing is just another ponzi scheme where the rich use the middle class to mop up the poor.

#118 CrowdedElevatorfartz on 09.21.10 at 12:30 pm

VancouverisGoinUp
Once again, are you NorthVan Realtor? Your writing style, the endless drivel about Asians flocking here, the constant pumping of how”its different here”.
Its nauseating.
That fact that you mention that “anyone earning less than 50k is not what World Class Vancouver caters”
That, in a nutshell, says it all about someone who has lived no where else BUT Vancouver.
I hate to bust your propaganda bubble but Vancouver “World Class” give me a break. Vanhatten AHAHAHAHAHAHAHAHA.
Ever been to New York? Paris? London? THOSE are world class cities. Not some “Turd by the Sea”.
World class traffic jams every rush hour is more like it. The transit system as compared to London, New York, Moscow, or Montreal for that matter.
“Hong-couver” was the only nick name I’ve ever hear this city called in the 30 years I’ve lived here.

#119 Bill Gable on 09.21.10 at 12:35 pm

Vancouver numbers are terrible and getting worse…but as noted by our fearless leader, Mr. Turner…there is a ton of denial in the pipeline
We have a friend who has his place listed and has been sitting on the price for two and half months and not even a showing. I suggested dropping the price and he looked at me with a horrified expression and whined….” but I have to get 450K because I have a second to pay for the Boat and the car lease…and I have maxed my credit cards, and want to pay them off…”
I felt sick.

#120 BrianT on 09.21.10 at 12:57 pm

Denninger covers the Munger garbage today-Karl is right-guys like Munger, Buffett and Madoff are sociopaths, and having them in a societal leadership role is a big problem http://market-ticker.org/

#121 TheBigLebowski on 09.21.10 at 1:19 pm

Fact is, millions of people like this live in Canada and the States. Numbers here seem not to exist, but in America we know there are 2.2 million jobless Boomers, half of whom have been out of work for more than six months. The unemployment rate for this generation is 7.3% – the highest ever, and a cruel twist for those who never saw it coming. Never prepared.-Garth

Those who never saw it coming.. What a peculiar phrase once a person plugs into reality. The facts are, during the 1990’s Council of Foreign Relations meetings they wrote and discussed what lay ahead for the West. Its all documented and open for any free thinking individual to track down. We are living through a planned economy, a script so to speak. The path we are on is not by chance. The closed door meetings consisting of the unelected think tanks like the CFR, Tri Lateral Commission, Club of Rome reveal what we are in store for. They are in charge of steering the world’s economy, and instructing governments which policies they need to create. NAFTA and GAT were think tank creations that government implemented to bring us into a post-industrial society. That is why all heavy industry and manufacturing has been dismantled and shipped to the eastern countries. Free trade , globalization, offshoring and outsourcing was not dumb luck. This has been planned for over 40 years. We are just now reaping the lovely benefits of this in the form of higher unemployment , more minimum wage jobs and higher taxes.
The average mainstream economist or media reporter will never touch on the real truth behind these events. They are only allowed to report on the pre-approved talking points to keep the public dumbed down and complacent . An informed population would take to the streets and the government can’t have this now can they. A good shepherd must keep his sheep happy and unaware that they are being lead to the slaughter. This is where we are heading. The only catch is most people are mentally unable to accept the truth and think Peter Mansbridge would never lie to them . So 95% of the population will be led through this script never understanding the magnitude of what’s really happening.

#122 Mean Gene on 09.21.10 at 1:25 pm

Maybe the unemployed Executive can find an opportunity with the United Nations:

http://careers.un.org/lbw/Home.aspx

#123 DJ on 09.21.10 at 1:31 pm

#117 MikeT on 09.21.10 at 12:25 pm

——————-

Say Garth, if you expect a strong rally in the stock market, why are you mentioning “survival”? In your opinion, is it not the time to get greedy for capital gains in the rally that you expect?

My definition of survival evidently includes more than does yours. — Garth

Did I miss a post? Garth, do you expect a strong rally in the market? I only see losses ahead, but maybe I’ve been reading too many doom & gloom blogs. I saw on the big picture site someone referring to the influx of bad news as “recession porn”. They stole your bit, Garth!

#124 super dave on 09.21.10 at 1:35 pm

2 tickets for the Garth concert in Victoria, will let them go for $50 bucks each… reply with your email and your credit card.

You cheapskate. — Garth

#125 Soylent Green is People on 09.21.10 at 1:39 pm

#24 nonplused on 09.20.10 at 11:12 pm Re gun registry

The gun registry does not cost $1.5 billion dollars a year. That was the price of the security and meals for the G8/G20.

http://www.thestar.com/article/863960–mcquaig-registry-no-threat-to-freedom

from article: Simple rationality calls for keeping the registry, especially now that the initially costly program is operating for less than $4 million a year.

~~~~~~~~~~~~~~~~~

If Canada’s Prime Spender Stealin’ HarperCon tries to do something, common sense dictates you should do the opposite.

http://www.facebook.com/group.php?gid=292671928599&ref=ts

#126 Soylent Green is People on 09.21.10 at 1:42 pm

I would give anything for $12,000 a year. WOW!

(please note “anything” does not include working for money).

#127 TheBigLebowski on 09.21.10 at 1:43 pm

#116 Jack
Much respect for making some tough but good decisions. I know as a schooled economist that you would have been taught very little about gold. Economics views gold as a vampire views a holy water bubble bath. My advice to you is to at least move into that venue in some capacity. Central Fund of Canada ticker CEF.A is a fund you can buy as a stock and hold physical gold/silver and is audited monthly. It is legitimate. Sprott also has a gold fund. Avoid ticker symbols GLD and SLV, those etf are not audited and have no gold backing imho. A good pm mutual fund would be a nice addition going forward too. here is a link
http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=18215

#128 dark sad person on 09.21.10 at 1:56 pm

Wow–anyone see that wicked reversal in Gold?
Gold smells something-
Gold sees something–
Gold knows something–
Gold “knows all”
It hears nothing–

#129 Soylent Green is People on 09.21.10 at 1:58 pm

re #69 Moneta on 09.21.10 at 7:28 am

Oh great, I get penalized for making and keeping alive future tax payers FOR FREE? That’s right, at no cost to the goverment, they receive a free tax payer I created.

Great! That’s what you get for producing a miracle from your body.

And they say it’s a man’s world. No kidding…

#130 CTO on 09.21.10 at 2:10 pm

#15 VancouverGoinUP are u just a trole? or are u the BC “Gobles”?!
That is the biggest pile of @#!*&%! CRAP!

#131 bullion.bunny on 09.21.10 at 2:10 pm

#122 TheBigLebowski on 09.21.10 at 1:19 pm

Been listening to Alex Jones too long.

#132 dark sad person on 09.21.10 at 2:27 pm

Here it is–

WASHINGTON (MarketWatch) — Federal Reserve policymakers on Tuesday said they were worried about deflation and were prepared to ease monetary policy if necessary to ward off the danger. In a statement, Fed officials said inflation is below levels consistent with price stability. “The FOMC will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and return inflation, over time, to levels consistent with its mandate.” The Fed kept its benchmark interest rate at a record low level between 0-0.25% for the 20th consecutive month. The central bank made no change to the key pledge to keep rates “exceptionally low” for an “extended period.” Thomas Hoenig, the president of the Kansas City Federal Reserve Bank, dissented for the sixth straight meeting in favor of getting rid of an “extended period.”

http://www.marketwatch.com/story/fed-worried-about-deflation-and-prepared-to-ease-2010-09-21

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

In a statement, Fed officials said inflation is below levels consistent with price stability.

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

And these idiots are what hope people have of “leading” us out of the Recession-

Prices are “falling” so–they do everything they can-to keep them elevated above affordability and then gasp as Velocity continues to collapse-
This is Keynesian economics for you–
Pump money-keep prices high-with the deluded expectations-that-sooner or later-people will start to spend–

We’re hooped-

#133 Netbiz on 09.21.10 at 2:40 pm

” was laid off for 10 months, put out well over 150-200 resumes, got two interviews, and one job. $142,000 severance! That’s a bit nicer than the $2,500 I got when laid off.”

Same for me. I was laid off after 5 and a half years with the same company, and got around $2,400 severance. Now I make my living on the internet. I refuse to work for anyone again. It’s a huge waste of the precious moments of my life, and there’s zero security anyway.

By the way, if you’re 45 like I am, and are lucky enough to live to be 80, that’s a grand total of 420 months, or 1820 weeks left on planet earth. Life is short, and then you die. Don’t forget to have fun! :)

#134 BrianT on 09.21.10 at 2:50 pm

#133Dark-at this point, only the extremely ignorant or deluded believe that the goal of the Fed is a strong US economy (a record % of Americans have finally seen through this nonsense). The goal of the Fed is to transfer wealth to members from non members-at this goal they have been quite successful.

#135 rory on 09.21.10 at 2:53 pm

Hey all …can anyone spot the problem?

Scroll down past the video for the article.

http://fairpensionsforall.blogspot.com/2010/09/extraordinary-offer-for-taxpayers.html

#136 Moneta on 09.21.10 at 3:05 pm

130 Soylent Green is People:

But in Quebec is you had more than 2 and went back to work you get alittle more QPP!

;)

#137 Bill Gable on 09.21.10 at 3:11 pm

>>Want to know how your CPP is behaving during this mess? Mr. Turner will love this – “Lets invest in RETAIL SPACE…”

The CPP Investment Board, which invests funds for the Canada Pension Plan, said Monday it has acquired total or majority interest in eight Canadian shopping centres, including two in British Columbia.

The acquisitions represent a total equity investment of $230.5 million.

The gross purchase price was $335.5 million including the proportionate assumption of $105 million of debt.

In B.C., CPPIB acquired the 431,000-square-foot regional mall Hillside Centre in Victoria for a purchase price of $113.5 million from the Ontario Pension Board, the pension plan for Ontario public employees.

As well, CPPIB acquired 100-percent ownership of Pine Centre Mall in Prince George, increasing its stake from 80 per cent.

Peter Ballon, CPPIB’s vice-president and head of real estate investments — Americas, said in a statement that Canadian regional malls seldom come on the market and that it was an excellent opportunity to invest in prime assets in key markets.

“Hillside Centre represents our first investment in Victoria and increases our presence in B.C.,” Ballon said.

Read more: http://www.vancouversun.com/business/buys+malls+Victoria+Prince+George/3554456/story.html#ixzz10CCXYyvs

#138 VancouverGoinUp on 09.21.10 at 3:14 pm

Even the downtown east side poorest neighbourhood is going up. Rents are going up while the cost of ownership goes down overtime. Get yourself a home off Main Street with a 2 bedroom mortgage helper and there’s 1000 bucks in your pocket every month!!
VANCOUVER – Only 12 per cent of privately owned hotel rooms in the Downtown Eastside are rented at welfare-friendly rates this year, down from 29 per cent in 2009, says an annual housing report obtained by The Vancouver Sun.

Of the 3,500 private hotel rooms in the low-income area, the number renting for the welfare rental subsidy rate of $375 fell to 362 rooms in 12 hotels, down from 777 rooms in 19 hotels last year, the third annual report by the Carnegie Community Action Project (CCAP) says.

“Gentrification of the [Downtown Eastside], spurred by Woodward’s and market housing development, is a major cause of the rent increases, which will also help to push low-income residents out of their … community,” says the report Pushed Out: Escalating Rents in the Downtown Eastside, to be released today. “It is crucial that Single Room Occupancy (SRO) hotel rooms, the last stop before homelessness, stay open and affordable until replacement housing is built.”

The housing advocacy group’s report estimates there are 10,000 Downtown Eastside residents who can ill afford monthly rents of more than $375, as well as about 700 homeless people.

The report acknowledges recent work of the provincial and municipal governments on the social housing file, noting “2010 was a really good year for newly built units and provincially owned hotel rooms opening up.”

However, the report argues the 220 newly renovated rooms in previously empty provincially owned hotels and the 150 new units in Woodward’s do not make up for the 67 rooms lost by the closure of two private hotels (Argyle and Lucky Rooms) plus the 415 extra rooms that CCAP says are renting this year for more than $375.

Governments often challenge the conclusions in the CCAP report.

A report prepared for city council this week argues the total low-income housing stock in the downtown core remained relatively stable between January 2003 (11,390 units) and January 2010 (11,340 units). It noted that by 2013, more than 1,100 non-market housing units will be added due to the construction of new government-owned buildings.

The CCAP report rejects the city’s numbers, alleging they are artificially inflated by including units that were not empty before the government renovated them (and therefore can’t be considered new) and by units that are not self-contained (such as ones without private kitchens and bathrooms).

The CCAP report makes a number of recommendations, including enacting rent controls; making “low-income housing” affordable to people on welfare; raising welfare rates; buying land for new social housing units; and stopping condo development for a decade while new social housing is built.

The report is to be released in front of the Columbia Hotel, where CCAP says rent was increased from $375 per month to $600.

[email protected]

#139 Brad on 09.21.10 at 3:18 pm

#122 TheBigLebowski on 09.21.10 at 1:19 pm

The world is too complex for that. You can’t just pull a lever and have an expected outcome – the Fed is just learning that now. Also, there are too many elites, they are already fighting with each other (i.e. Lehman Brothers collapse). Sure, you can ask Peter Mansbridge what he was doing at the last meeting, but in the end, does it really matter? From the Shock Doctrine you can see that there are enough disasters going on for the elites to profit from. Your time would be better spent working on solutions to the economic crisis for yourself, family and friends.

Here, I got one for you. Hubbert came up with the peak oil theory in 1956, but the first Bilderberg meeting happened in 1954 (and included dutch royalty, the owners of Shell, who Hubbert worked for). Therefore, peak oil was orchestrated by the elites to control us…

Oh and… the Haiti earthquake was caused by HAARP so that the US Army coulrdcontrol Haiti because there is a secret stash of oil there that the US has been not telling anyone.

#140 grantmi on 09.21.10 at 3:26 pm

http://bit.ly/cQ7Qoj

I love this dude… Governor Christie from New Jersey!!!!

(reminds me of you Garth… no bull!!)

#141 Bill ( Peterborough) on 09.21.10 at 3:35 pm

Re # 122 TheBigLebowski

Keep Em Coming.

Unfortunately most people will not get it until it’s too late.

Sort of like that commercial for dog treats ( Bacon bits). The owner is talking to the dog. All the dog here’s is ‘Blah, blah , blah BACON BITS, blah blah blah.

Society in general has been precondition to the point of not accepting the truth even when put it right in front of their noses, no matter how much proof you show them.

They will read about how some people defraud older people out of their life savings,and believe this , being a dispicable crime.

However when you tell them step by step how the Banking Cabals are perpetuating the greatest preplanned fraud against mankind( to enslave us)orchestrated through business monopolies: which they have controlling interests in, through bought and payed for governments. They say what are you crazy?

How these same people create wars , which they finance on both sides.

The same people who create famines, then tell the public to donate to all these causes, which they own as well.

Same people who own the Pharmasutical companies, which now are pumping toxic presriptions onto the public . ( While the laws are rewritten to protect them from any legal recourse)

The same people who control the food industry , who are slowly killing us with their toxic chemicals on the labels.

They do this so cleverally through so many tentacles that the average person can not, will not comprehend this.

In order to understand this you have to actually think like them.

This truly Malicious, Self Serving, Blood Sucking, Mostly Inbred, Parasitical Spieces does exist.

Food for thought;

http://www.apfn.org/APFN/fed_reserve.htm

#142 Got A Watch on 09.21.10 at 3:39 pm

# 4 – Lira is still smarting from the down to the woodshed whupping Mish laid on him last week, in relation to Gonzalo’s post about how hyper-inflation was supposed to start. Except his analysis was ripped to pieces by many others than just Mish (including me) who perceived he has little actual knowledge of how markets really work, and found his long and tedious chain of events (1 causing the next) to be highly imaginative, at best.

Read the comments at Zero Hedge on that thread, where even committed inflationists had to admit that Lira’s scenario was rather fanciful. Probably the best comment thread ever at ZH, no ad hominem attacks, just some serious debate.

We may well get strong inflation or even hyper-inflation one day, but it is highly probable it won’t happen the way Gonzalo says it would.

The fact is, Mish got to be a “prominent Blogger” by being right, time after time, about the economic outcomes, since 2005. Leave his other political views aside, that is what I value in an economist, making predictions that are proved right down the road. Lira is a late comer with an unkown track record, and he is not very authoritative, nor does he seem to know of what he speaks to any perceivable extent.

So, I’ll take Mish’s predictions any time over Lira’s. At least his supporting arguments have some merit. That does not mean Mish is always right, but he is usually. Predicting the future is a tough go, and so I find I have much more time to listen to those who have been accurate in the past.

Lira is left making personal attacks, as he does not have much intellectual ground left to stand on. Mish is a superb debater, if you want to take him on you had better have all your ducks in a perfectly straight row or he’ll make you look pretty stupid. That comes through loudly in the tone of Lira’s post you quoted.

#143 Lonely Limey on 09.21.10 at 4:00 pm

Looks like we’re not the only ones that should be concerned.

http://tinyurl.com/3ysvcmt

#144 jetfixer on 09.21.10 at 4:23 pm

http://www.counterpunch.org/hudson09202010.html

Pretty much how financialization of everything has ruined the world. Thank neoliberals for that.

#145 grantmi on 09.21.10 at 4:25 pm

Yup! The Recession ended in June 2009!!!!

++++++++++++++++++++++++++++++

Unemployment rises in 27 states, worst showing since February, as hiring remains weak

WASHINGTON (AP) – More than half of U.S. states saw their unemployment rates rise in August, the largest number in six months, as hiring weakened across the country.

The jobless rate increased in 27 states last month, the Labor Department said Tuesday. It fell in 13 and was unchanged in 10 states and Washington, D.C. That’s worse than the previous month, when the rate increased in only 14 states and fell in 18. It’s also the most states to see an increase since February.

http://bit.ly/9qdqo6

#146 UrbanCowboy on 09.21.10 at 4:31 pm

#15 VancouverGoinUP
“In Vancouver we call it “shaking out the weak hands” No worries 1 billion Chinese knocking at the door wanting to get into Vancouver…..

Uneducated & no skill chineese labourers coming in by the droves, just what Vancouver needs. Then we’ll sign’em up for $400k+ mortgages, and gettin buy BMW’s on credit working for minimum wage. Problem solved, you betcha!

#147 This is Wonderland on 09.21.10 at 4:40 pm

#65

Actually Nancy there is a town just 20 minutes South of Windsor called Amhurstburg. Its a pretty little town with lots of history surrounded by Wineries. In the past few years Amhurstburg has gone through some changes trying to attract the retired crowed. It has gone from a town living off of the car industry to a tourist and retirement centre. Housing is very cheep, zero crime (except for the odd drunk who is found past out on the side of the county rd) and everything is within walking distance to shops and resterants including a Walmart Super Store. For someone who is living in the Toronto area and would like to down size you can get a lovely new home for 200 thousand; no problem. You can spend your day going on day trips with the local clubs to Wineries or watch the ships go by. My husband and I lived along the Detroit River in a gorgeous century home that sat on almost half an acre, we sold it for 350 000 about 2 years ago just before everything went belly up. My parents really miss visiting the town and often talk about moving there. I know I sound like an advertisment but if your ever in Windsor follow the lake South and you will fined yourself in one of the prettiest town in Ontario.

However if your young and need a solid job, and a future not a good place to re-locate to.

#148 dark sad person on 09.21.10 at 4:46 pm

#146 Got A Watch on 09.21.10 at 3:39 pm

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

You’re right-Mish would rip that anal hyper-inflationists face off-in a debate-

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

137 BrianT on 09.21.10 at 2:50 pm

#133Dark-at this point, only the extremely ignorant or deluded believe that the goal of the Fed is a strong US economy (a record % of Americans have finally seen through this nonsense). The goal of the Fed is to transfer wealth to members from non members-at this goal they have been quite successful.

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

I think very few have a clue to what’s actually happening or has happened-
People are only starting to wake up to the fact-that they’re f-ked-
They have no idea why or what happened and why it’s still happening-or how to fix it–
If they did-you would see mass protests-every time Ben mentioned QE-

You are correct about the results of the “fix” so far–
Simply–a transfer of wealth-to banks-from Tax-payers-
The Fed want’s nothing more-then for Credit to start flowing again-but-he misjudged Sentiment-so sad-
People are becoming a “bit” more angry lately-
*******************

Some interesting comparisons to today–

As Nero always said-

“the people that once bestowed commands, consulships, legions, and all else, now meddle no more and longs eagerly for just two things — bread and circuses.”

Those scornful words “bread and circuses,” panem et circenses in Latin, become more meaningful when you understand that Roman citizens became increasingly addicted to free distributions of food and the violent gladiatorial and other contests held in the Coliseum and the chariot races of the Circus Maximus. He felt that Romans had lost the capacity to govern themselves so distracted by mindless self-gratification had they become.

Thus, bread and circuses, is a phrase now used to deplore a population so distracted with entertainment and personal pleasures (sometimes by design of those in power) that they no longer value the civic virtues and bow to civil authority with unquestioned obedience. Bread and Circuses has also become a general term for government policies that seek short-term solutions to public unrest.

http://www.thomasjamesmartin.com/breadcircus.htm

#149 jess on 09.21.10 at 4:51 pm

In Operation Money Fish, the Bonanno crew manufactured counterfeit payroll checks.

…”The crew’s most lucrative scam, though, came from “boiler rooms”—bogus telemarketing operations that are rampant in South Florida. A dozen people working the phones out of someone’s condo can generate big profits. A popular pitch now involves the resale of time share properties. The criminal telemarketers claim they will help people resell their time share, or the fee charged will be refunded in full. Unsuspecting victims on the other end of the line—mostly older people unable to sell the properties on their own—send in the $5,000 or $6,000 fee, and that’s the last they ever see of their money. No services are rendered, and none were ever intended to be….”

http://www.fbi.gov/page2/september10/checks_091710.html

#150 Brian1 on 09.21.10 at 4:58 pm

I have decided that it shall be law that you must hire 2 babyboomers for every 5 hirings in a company. There now, will you stop complaining about how no one will hire you. This shall begin in the States.

#151 Brian1 on 09.21.10 at 5:04 pm

I have decided that there will be a new subway built in Toronto through my new stimulus program. I also declare that Rob Ford shall take the credit for all my hard work, because he is the best choice of the worst candidates. They all want to take the credit.
Say Rob, instead of having fewer secret meetings why not have none.

#152 Potato on 09.21.10 at 5:28 pm

#54 Teach a man to fish: the payout on the preferred is usually all-or-nothing. Cutting back from what’s laid out in the prospectus (a fixed payment, or some spread relative to some benchmark) is tantamount to default. If a bank had to do it, they’d cut it all the way. It’s highly unlikely with Canadian banks.

Preferred dividends aren’t the same as common dividends.

There will be no cuts in Canadian bank preferred dividends unless an asteroid hits. Then it won’t matter. — Garth

#153 Mister Obvious on 09.21.10 at 5:35 pm

On Ageism:

Now retired, I once worked in engineering. Real-time motion control. Laser applications. Complex machine firmware. Super high tech, time critical software. Malfunctions could cause arms to be torn off or retinas to be scorched. I was fortunate to work with some extremely skilled and experienced engineers. Some of them are now out of work and quite subject to ageism in their present job searches.

Employers don’t deny that some of my former colleagues could run circles around newly-minted engineers. But it’s difficult to get them to work 65 hours a week for wages below what their huge practical skill sets dictate. That fact that they work infinitely more efficiently and autonomously than their younger counterparts is somehow forgotten.

Most employers will gamble instead on inexperienced grads. They might often have to do the same piece of work twice over, but they think it will only cost them half as much each time. Oh those silly, silly bean counters and their false economies.

#154 JoeCalgary on 09.21.10 at 5:36 pm

Recession ended in June 2009 = Mission Accomplished

#155 CrowdedElevatorfartz on 09.21.10 at 5:38 pm

#143 VancouverGoinUp
yup, definitely NorthVan Realtor under a new name.
“Vancouver the Best Place on Earth… You heard it here first” !
Gag.

#156 Reasonfirst on 09.21.10 at 5:56 pm

#143 VancouverGoinUp

your too funny

#157 Wildroseblogger on 09.21.10 at 5:58 pm

#5 Taxhaven:

Wise words. I’m not an expert- nor even a competent amateur- when it comes to financial instruments, but it seems patently illogical for anyone to pay out 6 and 7% yields when they could borrow this money cheaper. With big bank GIC’s running at 2%, I’m sure that preferred shares in a major bank could be offered at much less than 6% and still find eager buyers. Your other point, that it doesn’t make sense to borrow money at 6% when there is no greater return to be had in investing that money, is also spot-on.

“If something is too good to be true, it probably is” probably holds true here. Why are the banks offering such great dividends? Is there a risk of a capital loss they are trying to offset? Is there more risk than meets the eye?

Garth will tell me I’m suffering from that other poison emotion, FEAR, but caution is a useful tool.

You are poisoned. A high-yield bond fund I invest in paid 23% last year. Good trusts based on class A buildings routinely pay double digits. Even garden-variety corporate bonds of high quality are available for north of 4%. So what is so special about a bank preferred yielding 5.8%? All of these are fixed-income vehicles, which have little or no correlation with equity markets. Get out of the bank branch and smell the air. It’s full of opportunity. — Garth

#158 just wondering on 09.21.10 at 6:03 pm

The cost of hyrdro (in Ontario) should also be factored into the rising costs. A friend of mine who is currently renting who pays the hydro had an increase of 50% the last 2 months (hydro increase + HST charges). Was paying $100 for 2 months and now $150. She’ll be moving into her new home next month. I’m sure the cost of hydro for a home will be much highter than the apartment.

Anyway, the cost of everything is going up but our wages aren’t. Something’s gotta give.

#159 Charty on 09.21.10 at 6:07 pm

Here’s a chart that should tweet your twitters.

http://politicalcalculations.blogspot.com/2010/09/biggest-issue-of-2010-in-one-chart.html

Anyone know where to get the federal spending numbers for Canada?

I’d like to make a Canadian version of that chart to see how we’re doing.

#160 Nostradamus Le Mad Vlad on 09.21.10 at 6:13 pm

#48 Crash Callaway — Interesting post. Depopulation?

#86 Bill (Peterborough) — ” Big Pharmasutical companies create alot of these illness’s in cahoots with the food industy. Too much sodium/sugars in foods ( all in the pretense that they are preservatives. Nitrates are known to be cancer causing…All to make money of off these illness’s.”

Correct, and big pharma had a major victory in Europe the other day when herbalists were declared illegal, paving the way for Monsanto and big pharma to shove their stuff down our throats.

Did anyone notice that two young children (twins) died within minutes of taking a flu shot (laced with the H1N1 garbage) a few days ago? This is the stuff they tell us will keep us in good shape.

It’s easy to understand why they want control of the ‘net — remove all the health food supplements so everyone becomes reliant on the govt., big pharma and the like.

A revolution is coming and whether we like it or not, we’re already part of it.

#135 bullion.bunny — Good post and great link. See above, as that is where a lot of us are headed. We have become as mad as hell, and have nothing to lose anymore.

I don’t want anything to do with that little tin god, control freak Harper. He doesn’t give a damn about us; we are free to return the compliment!

BTW, what happened on the markets today? Have TPTB finally decided to pull the plug on us sheeples?

#136 Netbiz — “Don’t forget to have fun!”

Right on! Life is way too short to be encumbered by all this ‘making lotsa money’ stuff. That’s for the bozos!

#144 Brad — Great post! HAARP was probably instrumental in the fires in Russia, flooding in Pakistan (don’t forget that Pakistan, India, North Korea and Israel are the only four non-signatories to the NNPT), the Chilean ‘quake and if the WH wants to get rid of the west coast, the easiest method is use HAARP and cause the SAF to do the shake ‘n’ bake.

Violence is the only thing the US has left to offer.

#161 dd on 09.21.10 at 6:47 pm

#57 Tony

…I’d opt for putting the money in GIC’s…

Your risk is great and guaranteed. It is called loss of purchasing power.

#162 dd on 09.21.10 at 6:51 pm

#33 wes_coast

…Nice speech, but the market reflects economic growth and corporate profits. Both will obviously shock you over the next few years. — Garth…

Half right. The market can also reflect government policy (Quantitative easing).

#163 Bill Gable on 09.21.10 at 6:59 pm

46 Real Estate Realist – your reporting of Vancouver climate is as pathetically off base as your biased rant against La La Land. I love how you call yourself, modestly, astute.
You must be a Tory.

#164 prairie gal on 09.21.10 at 7:50 pm

#24 nonplused: your fantasy is being played out in countless broke-ass towns and cities south of the border as they cut services and staff. Why don’t you move down there to join them in their libertarian paradise?

#165 Bill ( Peterborough) on 09.21.10 at 7:53 pm

Re#165 Nostradamus Le Mad Vlad

A revolution is coming and whether we like it or not, we’re already part of it.
——————————————————————–
110% correct.

food for thought:

http://www.youtube.com/watch?v=gOups0dfdwM

#166 Vichy/Petain kids colouring book on 09.21.10 at 8:02 pm

Isn’t vice-president usually some family favour?

#167 Roy Stacey on 09.21.10 at 9:17 pm

Enjoyed your books, Greater Fool, and After the Crash.
I’m a US boomer, and the same issues lurk. Want to see where the US goes? Look at Japan… As for me, home paid for, ditto the 3 cars, no credit card debt, and a tad over $550K in retirement funds. Living in Wisconsin -cow country- my fully impropved 1/4 acre lot in a small town was $11 grand when we built. BIG difference from GTA prices. Still a budget is requisite, so is knowing when enuff is enuff. Plan on retiring on my 60th birthday next year.

#168 Taxpayer like everyone else on 09.21.10 at 9:18 pm

142 Bill – OK if you had $100B or so kickin’ around, what would you invest in?

#169 Daystar on 09.21.10 at 11:07 pm

#24 nonplused on 09.20.10 at 11:12 pm

If you don’t mind nonplused, I thought I’d take a half to contribute a lil’ feedback on your pontifications.

Well, there are a few options – nonplused

Lets remind ourselves that options is all they are for now.

Extend the mandatory retirement age. If people are living 20 years longer why can’t they work 5 years longer? – nonplused

Pro’s: – experienced workforce working longer.
– saves taxpayers on 5 years of CPP for every senior who is now ineligible until the age of 70.
– hard to prove, but its possible that working lengthens lifespans, depending on the kind of occupation.

Con’s: – Many impoverished seniors who don’t have a job won’t be eligable for pensions including widows until they reach the age of 70, although most contributed to the CPP program all this time. The costs of provisions to seniors between 65 and 70 who would have normally relied on CPP will be forced to use social assistance to get by. It is likely that poverty with seniors overall will increase as a result.
– Prolonging the careers of experienced work force may hit a wall concerning productivity as physical health declines between the ages of 65 and 70. While lifespans have increased, overall health may have actually declined. Accurate stats are needed to look into health stats of seniors to see if seniors are in fact, physically fit enough overall to work until the age of 70.

Note: The remainder of this post was deleted, due to length – 4,200 words. I love your stuff, Daystar, but this web site’s real estate is at least as valuable as a Van crack shack. — Garth

#170 Real Estate Realist on 09.22.10 at 10:07 am

#96-Dark sad person – be here in 3-5 yrs, I might go. I did it before and if you’re cute….. lol

#171 Real Estate Realist on 09.22.10 at 10:20 am

#168-Bill Gable – You’re right, bad word, misused actually. In context, the replacement should be “full time”. (and no, that doesn’t mean that I thought “astute” was a synonym for “full time”) ; )

As for the myths, quit promoting them. It’s not fair to the innocents.

#172 WINNIPEGER on 09.22.10 at 10:51 am

http://www.taipanpublishinggroup.com/tpg/taipan-daily/taipan-daily-092210.html

Comments on Canada & Australia housing bubble waiting to POP!

#173 WINNIPEGER on 09.22.10 at 12:59 pm

http://money.ca.msn.com/video/?cp-documentid=3322f768-edb0-4dc0-9c8d-8f682931fede

WOW!

#174 dark sad person on 09.22.10 at 1:04 pm

#177 Real Estate Realist on 09.22.10 at 10:07 am

#96-Dark sad person – be here in 3-5 yrs, I might go. I did it before and if you’re cute….. lol

**********************
If you are a chick–
I’m damn cute–
Problem is–
A bidding war-could break out-between now and 3-5 years-
Best if you shorten the time frame a bit-

http://www.youtube.com/watch?v=8clnxViHdp8

#175 Jack on 09.22.10 at 1:26 pm

Big Leboski.

I certainly should have some gold, or gold index. A research project I did in the late 70’s early 80’s tracked indexes back a hundred years and we tested passive asset allocation. Gold made a big impact on keeping the portfolio’s floor price up. Only needed about 5-8% weighting. Due to the leverage, it was the gold stocks that really had the massive fluctuations. But that is what you need when hedging.

#176 Daystar on 09.22.10 at 2:49 pm

#176 Daystar

4,200 words. I love your stuff, Daystar, but this web site’s real estate is at least as valuable as a Van crack shack. — Garth

4200… wups! Got a lil’ carried away there…. its just… so easy for me to do, especially when it comes down to systems of government. I get passionate about it sometimes as you well know and thanks for the compliment (although I’m sure you and I would both agree that some of it isn’t so lovable, lol).

I’ll try to keep it down to a 1,000 or less.