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She was shot because she’s Jewish. Because she is anti-immigrant. Because she’s too liberal. Because Sarah ordered the hit. Because the government wants martial law. Because the Tea Party urged it. Because America’s descending into anarchy.

No shortages of conspiracy theories today in the wake of the attempted assassination of Arizona Congresswoman Gaby Giffords on the weekend. As you know, she took a bullet in the brain as an idiot with a powerful weapon sprayed a meeting of constituents outside a Tucson grocery store. Half a dozen died. Giffords hangs on.

The cause of this is probably the mental condition of a whackjob young guy with the usual obsession with YouTube and death. And you can add in US gun laws. In Arizona you don’t need any permit to purchase or own a rifle, shotgun or handgun. There’s no gun registry, even for modified or heavy calibre pistols or automatic weapons, nor are owners required to obtain a license.

Think about that when you go shopping for a bargain property in Phoenix.

In the wake of the Giffords shooting there’s abundant political fallout. For example, the woman who will likely be a 2012 presidential candidate is being pilloried for running a ‘hit list’ of Democratic candidates on her pre-election Facebook page. Gifford was targeted (as were the others) with a symbol that looks like a gun site. Here is it:

And Giffords herself had this to say about Palin: “The way that she has it depicted has the crosshairs of a gun sight over our district. When people do that, they have to realize that there are consequences to that action.”

But this blog is not about US politics, absurd gun laws or the retards they let run around with weapons. It’s about our financial futures, and that’s why a Gaby Giffords matters. It’s about black swans.

Author Nassim Nicholas Taleb wrote about black swan events about a year before we ran smack into a wall of goose guts, with the financial crisis of 2008. Such an event has three characteristics: It’s a surprise and a shock. The impact is profound. Afterward, we think it should’ve been anticipated.

So, the US housing collapse which led to a credit crisis qualifies well. It shocked homeowners who thought their investments would spiral higher forever. It led to the near-collapse of the world financial system and the brink of a new Great Depression. And now every analyst with a book or a blog claims they saw it coming. (Of course, there are some pretty serious lessons here about Canadian real estate in 2011.)

Could the Giffords assassination attempt qualify? Without a doubt, had the attacker been part of a terrorist cell, you bet. Today America would be locked down and the stock market off several hundred points. Global tensions would be strained, the US economy recoiling and Obama massively diverted – just one week into the changed political landscape in Washington. Similarly, if the nutbar with the gun proves to be a card-carrying Tea Party member, then a political crisis could still grip that nation, where the president has turned out to be as much a polarizer as a transformational figure. Tucson may yet be a swan.

Here’s the question. Are you ready?

The collapse of 2008-9 should have spurred in us a sense of urgency to get our affairs in order. After all, if it can happen once, it can repeat. The gunning down of a high-profile American politician could easily morph into something with implications for families from Halifax to Delta. The economy’s already fragile and the future already uncertain, as we dangle between the forces of inflation and deflation. It wouldn’t take much of a black swan to ensure it is the latter.

Here are some questions to ask:

Know where your money’s invested?
If you have mutual funds in your RRSP, for example, are they heavy on equities and likely to tank if stock markets do? Could you withstand a big dump, especially if you are close to retirement? Have you ever actually looked at what assets are in those funds, or how they did two years ago? Have you been dicking around with an online trading account buying stuff you know little about?

Too much net worth in one place?
If a financial crisis were to revisit, housing would be a quick casualty – as it was in the autumn and winter of 2008. Then governments crashed interest rates to save it, but this time that card’s already been played. And now families are vastly more indebted than they were two years ago. The likely result: you don’t want to know.

Can you weather a debt storm?
In a new crisis interest rates could soar, making life tough for people with VRMs or lines of credit. The bond market’s already selling off with yields jumping on debt woes from Europe to Pennsylvania and California. Interest rates, after all, have only one direction in which to move. Did you take advantage of the lowest money costs in a lifetime to repay debt, or take on more?

Got balance?
When the wheels came off in ‘08-9, an equities-only investment portfolio dropped a devastating 60%. But one with forty per cent fixed income fell only 15%, and regained all lost ground within months. Last year that model went on to gain 14%, which should be all the proof you need that investing in a mix of bonds, preferreds, REITs and selected ETFs is the best defence against  uncertainty and volatility. You can’t finance your life by hiding money in the orange guys shorts. Cash is no strategy. GICs are dead money. Equities carry too much market risk. But balance protects.

Tucson should teach. The times are cruel. Swans arrive. Are you ready?

185 comments ↓

#1 Steve Lee on 01.09.11 at 10:53 pm

Cheer up, gloomy Canadians — the recession is long over and growth will continue this year, say the country’s top economists, despite a survey which has found that most Canadians believe the economy is still in a downward spiral. LOL !!

#2 rosie on 01.09.11 at 10:54 pm

Sage advice. Take heed. Sounds almost biblical.

#3 Spiltbongwater on 01.09.11 at 10:55 pm

Are swans good eating?

#4 JO on 01.09.11 at 10:55 pm

That loser who committed that pathetic crime should get capital punishment. No matter your views, violence is never an option.

When you mix extreme leverage,extreme optimism, and delusional people, you will get the same ending all the time…the only question is when. Canadian RE will drop harder than a rock.
JO

#5 HouseBuster on 01.09.11 at 10:56 pm

Gifford’s shooting is very sad and troubling. I guess that is the world we live in.

#6 Anon on 01.09.11 at 10:57 pm

Garth, you mention gun registry like it is a good thing. It is not. Canadian gun registry costs money yet it delivers absolutely no benefits to the taxpayers. Nobody is safer because of our gun registry. Most crimes are committed using unregistered, illegal firearms.

How many guns do you have? Why? — Garth

#7 Harry on 01.09.11 at 10:59 pm

What would you suggest for someone who is 24. Renting, just finished paying off student loans and I have about 11,000 in a TFSA, and I am contributing $800 a month for RRSP’s.

The RBC guy has me in monthly dollar cost averaging investing, but does that only work with mutual funds? Could I be getting low cost ETF’s with the little amount I have to offer each month?

Don’t worry, I might be young but I am smart enough to know that real estate is not the way to go.

ETFs over funds, ten out of ten. — Garth

#8 Joseph [original] on 01.09.11 at 11:06 pm

Money Magazine: Investor’s Guide 2011
Jack Bogle: ‘This is the most difficult time to invest’

http://money.cnn.com/2010/12/31/pf/investing/jack_bogle.moneymag/index.htm?iid=EAL

#9 OttawaMike on 01.09.11 at 11:07 pm

Jared the assassin made several Youtube videos deriding the federal reserve and praising gold and silver as a new trustworthy currency.

Somebody better do a role call of the dawgs here.

#10 Utopia on 01.09.11 at 11:13 pm

I just want to add another comment to my final post of yesterday in reference to the few who got booted off this site over the weekend.

Over the last while I have become dismayed by the level of extremist thought that has attempted to take over this board.

Everyone is entitled to their opinions; I stand behind free speech. However when a popular blog like this turns into an opportunity for a public stage and an outlet to hate, racism or political extremism for some individuals then it will only drive out more centrist thinkers and reasonable people.

Most here are not of the most extreme opinion. We have a contrarian view perhaps but it has always been a community of fairly like minded people with a level headed outlook. It has mostly been thoughtful dialogue peppered with local anecdotes and some well researched material.

There are many other sites out there for the social outsider and wingnut crowd. They should be encouraged to use those alternate platforms to vent their views that are clearly quite separate and distinct from the very wide range of current thinking today.

Those individuals ideas are not, in my view, representative of most of the people in this country today.

In light of the recent tragedy in the United States I want to again thank Garth for taking a stand here today and saying in essence “This nonsense is not going to be tolerated on my site anymore”.

Perhaps we should go to a system where real names are used to keep the debate level, sensible and thoughtful. Some of the posters lately have behaved poorly and written outrageous commments. All under the system of anonymity that now exists.

If they want to stand by their remarks and put them out to the public on a very popular site that is viewed by hundreds of thousands annually, then let them use their real names.

Otherwise, take your mad rants elsewhere.

#11 ontheshoreline on 01.09.11 at 11:19 pm

It was actually a 9mm Glock semiautomatic handgun but equipped with a 31 yes 31!!!shot magazine.He had two more mags but was stopped from reloading.scary stuff.
Glad I live in Canada and am happy with our gun laws.

#12 squidly77 on 01.09.11 at 11:21 pm

Don’t get me wrong, I’m no doomer but the equity markets are currently grossly over-priced. Judging by today’s values you’d think we were back in 2006 when clearly we are not, IMO there is little doubt that another major correction is coming, perhaps even more severe than the first one. Your advice is both prudent and timely.

Violence is always regrettable, the perpetrator in the Arizona shooting was obviously a nut job, but nut job aside, kicking 6,000,000 American families out of their American homes will not come without consequences. Hes not the only nut in U.S.A.
http://www.reuters.com/article/idUSTRE60D0LZ20100114

#13 phinny on 01.09.11 at 11:23 pm

I thought Jared was going on about conscience dreaming as a form of currency.

If that whack-nut barged in with a single shot rifle, hell even a lever-action, someone would have tackled him before he got close.

I’m now thinking the long-gun registry might not be the end of the world. Semi-automatic is for POLICE and SOLDIERS- because really, how many pops does it take to take bambi down.

Hope this isn’t the swan. I kinda like the status quo.

#14 TaxHaven on 01.09.11 at 11:28 pm

“The economy’s already fragile and the future already uncertain, as we dangle between the forces of inflation and deflation. It wouldn’t take much of a black swan to ensure it is the latter.”

Deflation? Don’t we face years of this now? In housing prices, currencies, pensions, salaries, yields on debt, debt-backed securities, bond yields…?

Coupled, of course, with inflation in terms of everything we really DO need and fixed costs.

What’s wrong with deflation, in the superficial stuff, anyway? Shouldn’t we welcome lower prices and an end to armchair “investors” getting rich investing in debt?

We should welcome it. It’s a LOT better than constant inflation.

Hardly. — Garth

#15 Anon on 01.09.11 at 11:29 pm

How many guns do you have? Why? — Garth

Garth, get to the point. I pointed out that your view on gun registry is wrong both from public safety and from economics perspectives. If you want to engage into a discussion, please do by commenting on the subject.

If you are bothered by whether I have guns you should also worry about whether I have bows and kitchen knives and chain saws. They are all deadly in the wrong hands. And neither one will be helped by a registry.

#16 squidly77 on 01.09.11 at 11:37 pm

phinny, its not the people that would willing register their guns that are the problem, its the criminals that don’t that need our attention. I know how most guns get into Canada, fixing that situation would be a good start. Try googling ‘gun smuggling Canada’

#17 BC Bring Cash on 01.09.11 at 11:41 pm

The current CONservative party of Harperites is quite obviously the old Reform party. The Reform morphed into the Canadian Alliance. Remember Harper was the leader of the Canadian Alliance after he beat out that loonie tunes Preston Manning. The old Progressive Conservative Party was swallowed up by these wackos. They are Canada’s version of the U.S. Tea Party movement. The old Progressive Conservatives had values that most Canadians could identify with. Harpers Tea Party has been in power for years, well ahead of the U.S. counter part.

#18 Min in Mission on 01.09.11 at 11:47 pm

Answering you question re: number of guns. One. .22 used for getting squirrels. Gotta get in practice.

#19 The Analyst on 01.09.11 at 11:48 pm

#7 Harry…

If you are investing regularly then I would suggest Inded Funds over ETF’s. You have to pay brokerage fees for ETF’s (anywhere from $5-$30/trade). Index funds charge slightly more MER fees but cost $0 to buy each fund. If you are adding money every month in ” dollar cost averaging” then Index funds are the way to go.

I suggest an Index split of 40% Bond, CDN 20%, US 20%, International 20%. TD has the lowest MER rates.

Bad suggestion. A $10 fee to buy a fund that will give you 100% liquidity and lower costs is money well spent. — Garth

#20 InvestorsFriend (Shawn Allen) on 01.09.11 at 11:56 pm

Answers:

Our RRSPs and other investments are 100% equity but yes I can withstand a big dump. (What kind of dump did you have in mind?)

Once again, I must explain it is not net worth in your house that you are exposed to but the full value. We are all exposed to the full value no matter our equity. In our case, our RRSPs are worth more than the house so Okay there.

Too much in one place. Well you know, too much of a good thing can be … wonderful.

Balance. “Yes, but not as we know it, Jim.” While our investments are 100% equity we also have the house paid for and good secure jobs with pensions and also with a side business. So, for us 100% equities is A-Okay.

Also, not all equities are created equal. Ours went down “only” 22% in 2008 and made it all back and lots more in 2009.

#21 OttawaMike on 01.10.11 at 12:03 am

Starting with the disclaimer that I am neither a gun enthusiast or owner, the gun registry is a billion dollar mistake.
Gun smuggling into Canada has become an even more thriving trade. Prohibition always creates a criminal market. Look at the illegal drug trade.
Mexico is similar with the strictest gun laws in N. America:
http://bit.ly/icKiIa

The world just has some evil people and guns are sometimes their tools.

Enough. — Garth

#22 nonplused on 01.10.11 at 12:04 am

Another good reason not to buy houses in Phoenix or Las Vegas: They are running out of water.

I think Taleb is on record as stating that the decline in housing prices in the US was not a Black Swan, as it has happened before and was fairly predictable. Asset prices go up and down. The financial problems that followed might be, but we had the S&L already too. I think he’s referring to financial events that really don’t have a precedent, like the Middle East oil embargo of the 1970’s. Even the debt crisis in Europe isn’t a Black Swan, all governments that borrow money eventually default through either default or inflation, and lots of people saw it coming.

Remember what they used to call government bonds? Certificates of confiscation. It was only once they managed to direct public and private pension funds to government debt that borrowing by government on the scale we now see became possible except in times of war. PS, you aren’t getting that money back on the same terms you thought you were. 15% government bonds and 10% inflation in the 70’s was great for new bond buyers, but the people who already had 10-30 year bonds got a huge hair cut in real terms. And it won’t be a black swan when it happens again either. As Garth is fond of reminding us, rates only have one way to go from here. And once a market turns, it usually turns decisively. Stay short term, 5 years or less.

The robosigning thing on the other hand, could cause some big turmoil that few people really thought through. The possibility here is that the states might stick the bank with a total loss on the entire mortgage if they cannot produce the documentation, or the US government is forced to abrogate contract & property law. You want to talk banking collapse? We haven’t seen anything yet.

#4 JO,

Isn’t capital punishment just state sponsored violence? I’m not saying I have a better idea and I agree sever punishment is in order, but I’m not so sure capital punishment is the answer. It certainly isn’t any cheaper than locking the guy up for life in the US experience.

We have to be careful, when passing out justice, that we don’t weigh down our decisions with too much revenge, or we will turn the state itself into the same sort of criminal we are trying to judge. Besides, the state hasn’t proven to be too good at ensuring everyone they put away is actually guilty. In this case it’s pretty clear, but there have been enough blunders to make me cautious about entrusting the state with life or death decisions. The state is irrevocably incompetent in almost everything it touches.

Garth, what’s your point on #6 Anon? OK, then, how many guns do you own, and why?

Fact is Anon is correct, the Canadian gun registry doesn’t do much to fight crime except keep the honest people honest, and at great expense. We already have a stringent FAC program, and I think you can assume everyone who bothered to get an FAC has a gun. And we already tightly regulate anything that isn’t a hunting rifle or shotgun. Even those have strict limits on the number of rounds they can hold and cannot be automatic. Fact is the gun registry is a giant boondoggle worthy of an incompetent government that misunderstands the problem. A database of who holds or has held an FAC is all they would have needed, and that they already had. You can assume anyone who has an FAC and has ever drawn a deer tag has a 30 odd 3 with a scope and it’s been sighted in.

#9 OttawaMike,

That has got to be the dumbest argument I have heard in a while, if indeed it could be construed as one.

Should they lock up Ron Paul now, based on the fact he supports gold backed currency and questions the role of the Federal Reserve? How about Peter Schiff?

Folks, this thing in the US was an absolute tragedy, but let’s not loose our heads. It was probably a whack job acting alone and because of it in 9 responses we’ve had a call to murder the guy, a call to ban all guns, and a call to put all gold bugs in a mental ward. It’s utterly shocking. But I guess that is how crowds react.

#23 Aussie Roy on 01.10.11 at 12:05 am

Aussie Update

Where all our swans are black.
Taleb is but the student of the master, Benoit Mandelbrot.

http://en.wikipedia.org/wiki/Beno%C3%AEt_Mandelbrot

Tropical Islands for sale.
http://www.news.com.au/money/property/for-sale-slice-of-paradise/story-e6frfmd0-1225984575401

New Credit laws in Australia.
http://delusionaleconomics.blogspot.com/2011/01/credit-not-so-easy.html

Listings up, prices to fall.
http://www.smartcompany.com.au/economy/20110110-44-jump-in-property-listings-points-to-price-falls-in-2011-expert.html

http://www.theage.com.au/victoria/melbournes-phantom-developments-20110109-19jvh.html

#24 squidly77 on 01.10.11 at 12:14 am

There’s lots of good places to put your money, this is one of my preferred (excuse the pun) http://finance.yahoo.com/q?s=NXY-PB

Its just a little pricey right now, this one is a buy whenever Oil tanks.

#25 Hoof Hearted on 01.10.11 at 12:25 am

Vividly recall the Montreal Massacre in late 1980’s.

A real tragedy.

However, the ” incident ” created a ripple affect to where the politicians had to ” not look impotent “. The long gun registry was created, and as per usual, the initial promises are it is not going to cost very much , only a few million.

Regardless of that blatant lie , what many Canadian cannot grasp is the usurption of their civil rights. If they follow the so-called “law”, they have effectively allowed the police to not only enter their house , but the police are allowed to engage in such other activity as search one’s computer files. If you have any incident at your home whereby the police are called , you are already red flagged and the police may arrive locked and loaded.

However, if you don’t register, the police have no cause to enter your house without a search warrant.

Old Trudeausky talked about the sanctity of the bedroom…..but another Trudeau acolyte drew up a draconian vote buying Bill C-68 catering to Urbanistas so the whole house is fair game.

IMHO, I have seen far more gun related crimes since the long gun registry was enacted.

Whether I have projectile firing devices of any kind…slingshot or otherwise…… is NOYFB.

http://en.wikipedia.org/wiki/Gun_politics_in_Canada

” As of 2006, while legislation is still in place, the government is no longer asking long gun owners for a registration fee and an amnesty (now extended until May 16, 2011) temporarily protects licensed owners of non-restricted firearms (or those whose licences have expired since January 1, 2004) from prosecution for the possession of unregistered long guns ” .

Debate on this topic is over. — Garth

#26 Lead Paint on 01.10.11 at 12:26 am

Black Swan is a terrible book – you did a great job of summarizing all the salient points in a single blog post. The book reiterates the same points over several hundred repetitive pages. It’s the Malcolm Gladwell school of authorship: a simple, catchy premise is repeated ad nauseum. These ‘intellectual’ books don’t actually challenge any power structures, or teach you anything you don’t really already know, and are thus celebrated and promoted by book chains and corporate media.

A much better book to explain the rage, despair, and violence of the middle class, poor and wackos out there is The Death of The Liberal Class by Pulitzer prize winning author Chris Hedges. Pumpers and dumpers alike will gain from his history of how ‘we the people’ lost control of the media, academia and government. No conspiracy theories here, it’s all researched, documented and prescient. The best book I’ve ready in years.

http://www.nationbooks.org/book/217/Death%20of%20the%20Liberal%20Class

#27 Alex on 01.10.11 at 12:27 am

#15 Anon…

Seriously? Wow. There are massive differences between a gun and a kitchen knife (used to disect food, not people), a chainsaw (used for cutting down trees, not people), and a “bow” (used for slow and deliberate hunting).

Let’s look at it another way: How many people would this nimrod have killed had he attacked with any of the above instead of his fast-shooting pistol? One? None?

BTW, methinks Garth *did* get to the point. That point was: “How many guns do you own? Why?” He was about as direct as he could be, dude.

#28 VICTORIA TEA PARTY on 01.10.11 at 12:30 am

#280 cellar dweller

Your point about the power of the Internet is so right on.

This is where traditional political debate meets the monster of the current age: a person’s private opinion instantly transmitted EVERYWHERE and with little thought to the consequences thanks to an overwhelming technological “highway” sans traffic lights, stop signs, rules…

Ah, yes, rules; so few of them and so much angst out there to shove the few rules onto the back-burner because we all need to be heard, but not seen.

It’s long past due that “we can do something about this,” because we can’t since the genie is not only out of the bottle but it broke the damn bottle in the process of getting out!

So, good behaviour is required when we write. We bring our own rules of civility to the public “square” of this Internet.

Otherwise the discourse eventually becomes barbaric and we all get shoved down the rat-hole a little more than we have been already.

Your post is excellent in every regard.

#29 Nostradamus Le Mad Vlad on 01.10.11 at 12:31 am


Are You Ready? Apparently, the judge in question for the state of Arizona was assassinated less than three days after he made a critical ruling against Obama’s plan to begin the confiscation of their citizen’s private retirement and banking accounts in order to stave off the US’s imminent collapse, and after having the US Marshals protecting him removed (so it may have been pre-planned).

Methinks there is a lot more to this than meets the eye, as the WH administration was openly talking about swapping 401K’s and IRA’s for T-Bills a few months ago.

PDF file For argument’s sake, just say that if Obama is already ruling by decree so had asserted for himself powers contained in EO 13528 he signed nearly a year ago (01/10/10) creating a Council of governors chosen to rule the US in place of its elected representatives when their next “disaster” (FF) strikes and orders them to begin “synchronization and integration of State and Federal military activities in the United States; and other matters of mutual interest pertaining to National Guard, homeland defense, and civil support activities.”

How will that affect Canada and Mexico, with the NAU / SPP still alive and kicking in some dark basement? A black swan event? You bet, and there will be plenty more 9-11’s happening frequently, and this — Dictatorial Powers is one of them.

How do those explosions In Maryland last week rank against this shooting? People are collateral damage damage, that’s all. Check with the elite to see what their six-month agenda is. Are people ready? Unlikely. Most can look after themselves and their own, not much more than that.
*
1:25 clip Naughty language. 1960s car salesman; the ad was (presumably) never shown on TV.

War Games US and China.

Wot’s In Yer Wallet? US govt. spending, which goes with this.

Socialism is where Obama and Soros are taking this continent.

Get a load of this clock!

Alternative Media Anything is better than m$m rubbish.

Stuff from Mish all over, and Bunny Bernanke.

#30 Carp Coyote on 01.10.11 at 12:31 am

Anon,

A large number of police forces and cops would disagree with you. It`s politicians spreading election BS and stirring up the little people to win seats.

I think there are better sites to discuss the gun registry topic … Seriously, go find them since you seem to have your convictions and should keep at it in the right forum.

#31 UrbanCowboy on 01.10.11 at 12:34 am

The U.S debt climbed another trillion in the last 6 months. Even Hank Paulson is warning of deep do do if this is not brought under control. And the talk is the housing crisis is moving into its next leg down, which would be like a second heart attack for the economy.
Would these be classified as extreme views, or just reality? I know we don’t want to turn this blog into an armagedon sight but you could imagine the restlessness among the middle class as more and more get thrown out of their homes due to foreclosure, another 6 million families?!?! as squidly reported above. The U.S is never defaulted and the world economies wouldn’t allow it, but anyone with a game plan as to how to stop it? How about lowering interest rates, oops that card is already been played…..

#32 specuskeptic on 01.10.11 at 12:36 am

@#4 Jo
“That loser who committed that pathetic crime should get capital punishment. No matter your views, violence is never an option.”

Irony much?

#33 Wildroseblogger on 01.10.11 at 12:37 am

#13 Phinny- I’d rather risk the odd nut job with a Glock than grant exclusive rights to semi auto weapons to the cops and military. You misguided fools think that just because your safe in your homes now and have been for the past 75 years that the days where the government, through the police and military, might try to usurp your most basic personal freedoms are gone permanently. An population armed such that it is capable of either defensive or offensive assault against its democratically elected leaders is the best insurance of continuation of that democracy. 75 years is a blink of human history- never stop your diligence and preparedness to defend against tyranny. If you don’t have the tools to protect your rights, you will soon find yourself with nothing to protect. Every clear thinking adult in this country should own a firearm and know how to use it. Alternatively, you can rely on the beaurocrats to protect you. Good luck with that. I think I’m going to clean the Glock.

I let this post stand as a reminder that Canada has as many wingnuts, closet vigilantes and newcon thugs as the US. This dink actually defends potential “defensive or offensive assault against democratically elected officials,” which I guess would include putting a bullet in the Congresswoman’s head. You disgust me. — Garth

Additional comment: I have just discovered you may be a high school teacher in Camrose, Alberta. Now you sicken me. — Garth

#34 Republic_of_Western_Canada on 01.10.11 at 12:38 am

#15 Anon –

How many guns do you have? Why? — Garth

Garth, get to the point. I pointed out that your view on gun registry is wrong both from public safety and from economics perspectives. If you want to engage into a discussion, please do by commenting on the subject.

If you are bothered by whether I have guns you should also worry about whether I have bows and kitchen knives and chain saws. They are all deadly in the wrong hands. And neither one will be helped by a registry.

Precisely. It’s nobody’s business what count of ‘guns’ he has Garth, certainly not yours.

No wasteful, ridiculous gun registration scheme

DELETED. The gun registry debate is over. Find a blog that cares about your opinion. — Garth

#35 nonplused on 01.10.11 at 12:43 am

#13 phinny

The long gun registry does not apply to the sort of gun used in the US tragedy, which were already illegal in Canada. It applies to rifles and shot guns, which are utilitarian devices for hunting and controlling coyotes and gophers. Sure, if you point one at a person, it’s bad news for the guy on the other end, but these are not assault rifles.

The fact of the matter is that the guns of choice for criminals are non-registered and illegal. The gun registry did nothing, not one single stitch, to change that. The government does not understand the problem, and they incompetently complicated the lives of the honest citizen to pander to the fearful masses.

The one other thing a long gun is useful for is it is better than nothing in the hands of a militia. Perhaps this was the real purpose of the registry? To disarm the populous and then declare martial law? That’s crazy talk I know but it serves no other practical purpose, so it is either the result of gross incompetency or malicious intent. Personally, I am going with gross incompetency. It’s government after all. Let the farmers shoot their 22’s at coyotes and the hunters shoot shot at geese and forget about it. Gangs and assassins don’t use legal guns.

#18 Min in Mission

Better get a compound bow because Garth doesn’t want you to have a squirrel shooter. I bet he has one though.

My experience is that crossbows are way easier to shoot, but compound bows are more accurate once you put in the time. Both are deadly at close range up to about 200 lbs, if the shot is accurate. Oops! I shouldn’t have said that! Next thing you know we are going to have a “bow registry”. Maybe even an “Air Riffle Registry”. Oh wait, if it shoots faster than 500ft/second, you already have to register your air gun through the long riffle registry! What comes after that? A “Pepper Spray Registry”? Pretty soon you’ll have to register a sling shot.

#36 kc on 01.10.11 at 12:48 am

253 Canned Goods and Buckshot on 01.09.11 at 6:00 pmKC 128

In which part of the country are you gardening?

Maple Ridge BC

#37 The Apocalyptic One formerly Old is Gold on 01.10.11 at 12:49 am

#10 Utopia on 01.09.11 at 11:13 pm

Those individuals ideas are not, in my view, representative of most of the people in this country today.
__________________________________________________

I peruse this blog occasionally and comment infrequently but I would have to say that Garth’s contention is that the most of the people in this country are delusional, and I would dare say that most of his readers would agree.

If then ‘most of the people in this country today’ are delusional about financial matters because of MSM indoctrination, why would you want to side with them on any issue? People who add 2+2 to be 5 or 7 or 10, do these people really have a handle on any matter of import? If the media subtly and not too subtly influences the masses about financial matters, might they also not influence them on matters of greater significance such as individual rights and why gun ownership for individuals matters?

We have not yet seen the full picture of what this Arizona event was all about, just remember JFK, RFK, and Martin Luther King and many others were also assassinated by ‘lone gunmen’ – or not! I would withhold judgment on what this story is all about for a few months when the real story may surface – or not! Gun ownership is a touchy subject and I do not own a gun nor do I plan on owning one but when the only guns in town belong to the sheriff, sooner or later the sheriff ends up owning the town. Tools to fight tyranny, which sadly include guns, must be available to all citizens in a free country or that country will not remain free for long!
Just ask the Russians – read what Solzhenitsyn had to say about handing in guns to the government!

#38 Rasputin on 01.10.11 at 1:02 am

I seriously doubt the shooter is a tea party member. His facebook page has listed as his favorite books, among others, Mein Kampf, and the Communist Manifesto…he is a lefty idiot…yet another.
My prayers for the Gaby Giffords and her family.

#39 Min in Mission on 01.10.11 at 1:09 am

Gotta agree with Garth. This is not really the place for ongoing discussion about firearms.

I drop by to try and find a way to preserve my ‘way of life’ into retirement, financially speaking. Many of the ideas are beyond my current level of understanding, or financial ability. Doesn’t stop me from dropping by. I don’t drop by to talk about firearms.

#40 Patz on 01.10.11 at 1:15 am

Excellent and sobering post by our host today! Could it be a black swan event, yes it could in ways we may not know for some time. It could for instance be the death knell for Sarah Palin’s besotted campaign to be pres.

But today I’m gonna trip the light …

Yesterday on Big life #214 a prairie dawg said:

#187 Nostradamus Le Mad Vlad

Usually I like your stuff Vlad, but I have to call you on this one. I’m cursed with the math gene.

“There are about 20 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:”

20 million times 1 million>

1000 millions is a billion
1000 billions is a trillion
1000 trillions is a quadrillion

x 20 = 20 quadrillion dollars

$20,000,000,000,000,000.00 fix

Sorry but this fix even makes Harper look good.

Now pd I know this is picky but you had to go and say you were “cursed with the math gene.” But did you know it was defective?

20 million X 1 million is 20 trillion, not a quadrillion. Big enough, but a difference of 3 more 0s. 20 trillion gives you 13 zeros. 20 quadrillion gives you 16 zeros.
Here’s a table for you: http://www.jimloy.com/math/billion.htm

#41 Siddelly on 01.10.11 at 1:15 am

I am still reading The Black Swan and happen to enjoy his philosophical point of view. It seems that a few people on this blog do not have the time for deep or critical thinking and would prefer to have easy black or white answers to the worlds problems. Chaos: Making a New Science by James Gleick is a great way to get interested in Talebs Mentor, the amazing Benoit Mandelbrot, and I highly recommend it to the motivated learner.

#42 Elmer on 01.10.11 at 1:16 am

Actually Garth, it’s Canada’s gun laws which are absurd.

In some US towns you can walk into a grocery store and half the people in there will be wearing a gun on their hips, and these towns have nowhere near the crime rate of Toronto.

Speaking of weapons, major defense contractors (Raytheon, Northrop Grumman, etc) are great stocks to own.

#43 doc on 01.10.11 at 1:16 am

Thoughtful post and seems disturbingly prescient to me Garth. I’ve been reading this blog for a while and love the captions and your sense of humor which helps so much to keep the seriousness of the subject matter from being overwhelming. I did take your blog advice a few months ago and took the rather large step of selling my home in the Vancouver west side which I loved, and moved to a modest bungalow in semi-rural okanagan. The relief of getting out from under a million dollar mortgage is feeling great to this 60 year old and my gray haired honeybunny. I read your most recent book this weekend and see I have a number of investment errors to correct while there is still time. Please don’t be discouraged and do continue to blog. There must be many like me who have never thanked you publicly for the service you provide. My life is now immeasurably better for having “caught on” to some of what you’ve been teaching. Change can be very hard but peace of mind is so worthwhile. Thank you

#44 False Facade on 01.10.11 at 1:25 am

I am creating a recipe for black swan jerky.

#45 Hoof Hearted on 01.10.11 at 1:27 am

I’d guesstimate since about Kennedy’s day, politics has denigrated to a PR knockout blow. They say Kennedy won versus Nixon via the TV debate….whereby Nixon appeared pale and sweaty and Kennedy far more fit and dashing.

Ford lost based on (Democrat)Chevy Chase’s SNL “character assassination” of Ford as a klutz ( though Ford was acknowledged as one of the better athletes of all Presidents), and Chase gleefully took pride in this in a recent interview.

Carter was a hick, handled Iran badly…. and not savvy enough to beat Reagan.

Bush Sr. beat Dukakis ..”soft on crime via Willie Horton ad”

Bush Jr beat Al Gore again via more savviness.

In Canada, we had Robert Stanfield’s missed kick-off ,…Mulroney’s “You had a choice ” to John Turner, and the Tories incompetence to turf the Chretien Liberals that many were already tired of.

As One wag says…..in politics, you can be a 3 out of 10
and win if everyone else is a 2.

#46 Jane on 01.10.11 at 1:27 am

And now back to today’s topic… Thank you for a great post. So many of my friends and family seem to have the attitude that there is nothing that they can do to help themselves in these unsettled, and unpredictable economic times. Yet they all know that debt is hard to repay, but must be repaid (unless you choose to default). But there is a sense of entitlement that is too prevalent, and is more prominent the younger the person is. Our provincial and federal governments are failing us badly (not that they are the only ones responsible). The Feds may have given us cheap money, but people are taking it of their own free will.

The questions in your post should be taught as prerequisites for both high school and post secondary graduation. Whether we have a financial/housing disaster as harsh as the US or not, too many here are going to get burned, and the consequences will be felt by all of us.

#47 dark sad person on 01.10.11 at 1:28 am

Tax Haven is right–
Deflation is a good thing-except for politicians-
They cant steal your savings via inflation-
They can’t borrow and spend their way into winning elections-
They generally can’t do much at all in deflation-
That is a really good thing-

Why wouldn’t lower prices that accompany real deflation-not be a good thing for cash strapped people who have to try and make ends meet?

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

#226 InvestorsFriend (Shawn Allen) on 01.09.11 at 1:17 pm

Number 210, BC Bring Cash

You don’t like the sale of “our” assets to the highest foreign bidder.

The notion that citizens collectively own anything is not very realistic and is rather communist.

If YOU own it you can sell it.

If YOU don’t own it, the sale is none of your business.

If YOU think you own a portion of crown assets, you don’t. If you do go and try to collect your dividend on it or sell your share. you can’t

******************
Typical well groomed canadian socialist remark-
Separate the people from the state so that only “government/crown” holds the riches of the land separate from any citizen input-
Then they can run the country into bankruptcy by buying votes off the clueless populaces-
So now- when there’s nothing left we can let the rich world bankers control and reap the wealth from our land-

Canada has no worry of IMF interference when we need a bailout down the road-
They’ve will have already sold/given our wealth away to them and we have so many here like Shawn {{the investor}} cheering it on–
All the while preaching free markets-
The free market bankrupted banks–
Governments intervened-
How does saddling the tax payer with banker debt coincide with your totally selective and delusional picture of what free markets are?

#48 Jamie on 01.10.11 at 1:33 am

In 1994, the national guard did nothing to protect Korean shop owners in LA during the infamous riots. They were more concerned about making sure that the violence didn’t spill over onto Beverly Hills and other well off suburban zones in the greater county of LA. The only shops in Koreatown which weren’t pillaged were the ones where the owner had a firearm and fired warning shots into the air to keep rioters at bay. Thus, I wouldn’t solely rely on law enforcement for security. Gun Control and such is a way of dis-empowering regular income local citizens from self-defense. Realize, money can buy private police details, private ex-military security guards, etc. The average citizen can’t afford to pay for a private army.

#49 OttawaMike on 01.10.11 at 1:39 am

Nonplused @22

I wasn’t really making any argument other than some of our gold obsessed blog leprechauns are a little kooky at times. I’m glad GT is clamping down on it as I was getting tired of wading through those repetitive posts.

I’ve noticed some of your posts have been out in left field as well lately. Cabin fever getting to you out there in wind swept Alberta?

#50 Hoof Hearted on 01.10.11 at 1:43 am

I’d submit that what we see globally is simply history repeating itself, namely the collapse of empires, except on a far grander scale.

Detroit(aka “Whats good for GM is good for America”) has been on the decline since the 1950’s. It seem that once any economy becomes too prosperous via the creation of a large middle class, it’s sustenance almost begins to doom it. Cheaper options seem to be pursued to the point the middle class is continually undermined. Many muse about Wal – Mart, when compared to other major retailers…but in hindsight see it’s success was inevitable in the bigger picture.

What role does the US have that keeps it a player on the world stage ? It’s military….

IMHO, the economic problem is global….one big integrated economy. Western economies, hundreds if not thousands of years old, are going flush, imploding, based on lies and snake oil perpetrated to hide the real cancers.

China is the last man standing.
When it sneezes, everyone else gets to ER ASAP.

#51 Bill Grable on 01.10.11 at 1:47 am

To naive Canadians who have not been paying attention – we live on a Continent that is suffering through a gruesome Civil War (Mexico) – and believe me, as a person who lived in Mexico for a number of years and has deep contacts in the Mexican newspaper, and TV business – this is a WAR.

30,000 people have been killed. *I lived in Estadio Guerrero – look at what just happened in Acapulco.

WE also share the Continent with a Country that sold 14 million firearms and over a BILLION rounds of ammo in the last 12 months – *Time Mag. That is the legal count. What about the illegal trade?

Are you ready?

Mr. Turner’s greatest gift to our Family and to us fellow blog dawgies is his HONESTY. NO BS. No hyperbole. Just the facts, ma’am.

When I read Mr. Turner today’s brilliant post, my heart sank to my size 11 Reeboks.

I realized that we are on the edge. A thin ledge, overlooking, I am not sure what.

There is an old saw in sailing. If you have the feeling that there is a storm in the offing, you put a reef in the mainsail.
Time to pull down the jib and reef the main bro’ – because we have some very bumpy months and years ahead.
Bernanke admitted it will be YEARS before the US economy recovers.

We are tied at the hip to a Country in extremis and another Country that is at War with itself.

Go ahead. Keep ringing up the debt, stuffing the RRSP so you can get taxed at the full rate. Party on, dude.

The only way we will get out of this mess, is if we start using some of the rationale that Mr. Turner, and a few other bright lights have been trying to drill into our wee heads.

Here in my adopted home of Hawaii – this morning, all the breakfast chat at my favourite Cafe came down to a sentence that echoes what one Dawgie mentioned.

I heard it a number of times.

“If Giffords’ shooter is a Tea Party member, all heck will break loose”.

I may live in the States for part of the year – but boy am I glad that I am able to come home to Canada, because America is in great stress.

Oh, and you wouldn’t believe how brutal the RE business is here on Maui. Business in Lahaina is DEAD.

The desperation is palpable.

Oh, yeah, we rent here, too. Buy? Are you nuts?

Simplify. Get out of debt.

Oh, and watch out for Swans carrying Glochs.

#52 Sea Wave on 01.10.11 at 1:49 am

This study highlights the reasons the big banks have hosted secret meetings with Flaherty, and Carney’s become increasingly forceful and dire with his admonishments regarding Canadian debt levels:

http://www.bis.org/publ/bppdf/bispap21d.pdf

As noted in, “Housing Price Bubbles – A Tale Based on Housing Price Booms and Busts”:

“Borio and Lowe (2002) note that asset price booms tend to go hand-in-hand with credit booms. This partly reflects normal behaviour of credit, which tends to be pro-cyclical … credit booms have also been associated with financial deregulation … this was found to have been an important factor behind some of the housing price boom-busts of the 1980s, … credit booms tend to coincide with housing price boom-bust cycles … housing price busts have strong and fast adverse effects on the banking system and its capacity to lend … in some cases, banks are affected by solvency problems after housing price busts … all major banking crises in industrial countries during the post-war period coincided with housing price busts …”

Canada’s house price boom has coincided with a massive credit boom and marked financial deregulation (such as alteration of down payment and mortgage amortization requirements).

A read of history suggests the likelihood of an eventual sizable banking crisis in Canada.

Be prepared.

#53 Sea Wave on 01.10.11 at 1:50 am

Read Reinhart and Rogoff’s, “This Time is Different: Eight Centuries of Financial Folly” if you think Canada’s magically immune from a sizable housing correction … and quite possibly a coinciding banking crisis.

Follow the link below and scroll down to Table 10.8 for a look at the magnitude of decline in house prices that have historically accompanied major banking crises in both advanced and emerging economies:

http://tinyurl.com/2ueh5k7

During prior house price busts and concurrent banking crises, the advanced economies of Finland, Japan, Norway, Spain, and Sweden incurred 31 to 50 percent declines in house prices.

During prior house price busts and concurrent banking crises, the Asian economies of Hong Kong, Indonesia, Malaysia, Philippines, South Korea, and Thailand incurred 20 to 59 percent declines in house prices.

Historical data suggests that house price downturns typically last for between 4 and 6 years after the peak (anybody want to wager on 2015?).

Ireland, Spain, the UK, the US, Iceland, and Hungary are all currently progressing right on target.

You can be sure that it was entirely “different here” in all of the above noted countries … right up until the moment it clearly wasn’t.

#54 Soylent Green is People on 01.10.11 at 1:50 am

Re 6 Anon on 01.09.11 at 10:57 pm

And the reason why Bill Blair’s ass was the only one left out to dry from the police abuses at the G20 and not little Steve Harper, his RCMP man Phonse MacNeil and his new senior buddy Fantino ????

Here is the reason:

The head of the Canadian Association of Chiefs of Police says members at the annual meeting have endorsed a national firearms strategy that includes a recommendation for a public relations campaign to explain the value of the long-gun registry — a program the Conservative government is trying to scrap.

“A resolution for its adoption as the official policy of the CACP was put before the members and that resolution was passed without a single dissenting voice,” Toronto police chief and CACP president Bill Blair told CBC’s Power and Politics with Evan Solomon.

Read more: http://www.cbc.ca/politics/story/2010/08/23/gun-registry-police-chiefs.html#ixzz1Abkg1h6P
.
.
.
.
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#55 LB on 01.10.11 at 1:54 am

#4 JO

You comment that “violence is never an option”,but then go on to say that the perpetrator in the Tuscon incident should be subjected to “capital punishment”.This is contradictory and illogical reasoning.

The fact that authorities knew beforehand that this man was unstable, but was not confined to a mental health facility AND the fact that someone like this had access to, and possession of, a gun are the real issues which need to be examined and addressed as policy,going forward.

#56 pablo on 01.10.11 at 1:58 am

I think we were all shocked when this story broke, I read an article that accessed this wackjob’s rants on the internet,this guy is one sick f***. He may have had an accomplice.
This could’ve been a lot worse if he and his cohorts had used something more appropriate to the task, a 9mm pistol, no stopping power only good for squirrels and rabbits.
Now then, all that aside, I’ve been studying the tiny/small house architecture movement/phenomena on the internet and while I can’t see living in 90 sqft trailer. I can see living in 800-1000 sqft if intelligently designed.
How big is your bunker property Garth, any room in the backyard for a small cottage? No guns, I don’t need them, I’m married.

#57 AG Sage on 01.10.11 at 1:59 am

I was thinking the other day that the floods in Australia certainly don’t lack for black feathers. Not that inventory levels, per Aussie Roy’s link, were not already signaling that the first spatters of rain were coming down on the hot coals of the barbie.

#58 Chris in Langley on 01.10.11 at 2:02 am

#10 Utopia,

Someone got kicked off this blog? Who? They must have been way over the line cause Garth gives people a lot of latitude.

#59 Team OMG on 01.10.11 at 2:04 am

Mr Turner,

I believe there are some 100+ ETFs traded in the TSX. Would any of the following be an example of the type of ETF that could be recommended for someone who is relatively young, and has only recently entered the workforce and opened an RRSP account?

FIE-T Claym Cdn Fin Month Inc E.T.F.
CDZ-T Claym S&P/TSX Cdn Div E.T.F.
XRE-T iShares S&P/TSX Capped REIT
XFN-T iShares S&P/TSX Capped Financl

Are these an example of an investment vehicle that protects both against volatility and inflation? When I use the term ‘inflation’, I think about historical rates of inflation while growing up, remembering some talk of Mulroney’s “6&5” speeches on TV and what my parents consider “normal” interest rates of anywhere from 5% to 8%.

I think there’s too much doom & gloom on most message boards where I lurk, and not enough really good reasoning put forward as to why something protects against inflation, or crazy market gyrations.

Thanks in advance (hoping you can answer!)

I cannot ethically recommend any specific investments without knowing if they might be suitable for you. You can contact me directly. — Garth

#60 Wildroseblogger on 01.10.11 at 2:05 am

Wow, Garth, I think you totally misunderstood my post #33. I don’t advocate violence in any way as a replacement for democracy. My intent, although perhaps poorly worded, was to convey my annoyance with people who believe that the state is the only one who can protect them and who believe all power should be given to the state because it is too dangerous for individuals to have any. Again, my comment was not a general comment on the situation in Tuscon- Democracy took a grevious wounding the minute that sick SOB decided to circumvent the legitimate democratic process- but instead was a very specific reply to ppost #13. I don’t know how I could have made that more clear, but I’m feeling a little sheepish that you took it as some sort of support for shooting duly elected politicians. So I’ll say it again, maybe more clearly: I think banning semi automatic weapons would not prevent people like this guy in Tuscon from doing their evil deeds, but I think it would lead to the impotence of the law abiding public and their inability to defend themselves against against potential tyranny. Do I think we’re anywhere close to that in this country or the US? Not at all. But I’m not so naïve as to think it can NEVER happen, and if you allow your rights to be stripped away, you are unprepared to protect the freedoms millions have died to obtain, whether that time comes in 100 years or 1000. I stand by the intent of my post, if not the wording. When I said I was going to polish the Glock, I meant it as a metaphor for opposition to people like #13, not as as support for wastes of skin like that kid in Arizona. I can see how you misunderstood that however, so I apologize for the wording.

By the way, definately not a teacher- I have no reason to lie, so be careful about the rumors you start lest they damage someone’s reputation that you didn’t intend.

Do you own guns? — Garth

#61 Patz on 01.10.11 at 2:07 am

BTW I could write the line for the campaign to Swift Boat Sarah.
Sombre voice: “Sarah Palin’s reckless campaigning contributed to the atmosphere that resulted in 9 deaths in Tucson. Can America afford to have her finger on the nuclear trigger—can the world?”
Final shot, mushroom cloud. Worked against Goldwater.

#62 Jody on 01.10.11 at 2:09 am

I’m sick of all the gun bashers, Nazi Germany had strict gun control as well, that turned out great didn’t it? If guns kill people then pencils misspell words. The nutjob who shot the yank politician is a nutjob, a nitwit, he pulled the trigger on the gun, it didn’t pull itself. He is what happens when society goes from family and community to one of relying on the government. It’s to bad but he’s just the beggining.

Just wait until states and cities halve their budgets and everyone with a state pension is told they no longer have it beacuse the state can’t afford it, oh boy, talk about SHTF time.

I like how the media is saying he is a teabagger, he is in fact a liberal, a left wing kook. Just like when Obama was on the campaign trail in Arizona and the media reported a white supremist was in the parking lot with an automatic rifle, it was in fact a black man in the parking lot with an automatic rifle, but of course we can’t have the truth come out, that left or right, them yanks love their guns. This shooting did not happen because of America’s lax gun laws, it happened because of it’s polarized and screwed up society. Ask yourself why Switzerland doesn’t have massive amounts of gun crime, even though every male between the ages of 18 and 40 has a fully automatic assault rifle sitting at home, why, hmmm? Or look into how much freedom individual cantons in Switzerland have in regards to laws and regulations, you’ll soon find out that an armed society that lives and lets live is a polite society, unlike the ever increasingly facist North America and Western Europe/Australia. Give up our guns, give up our rights and freedoms, because some ass in a government office will keep us safe, yea right.

#63 Jeff Smith on 01.10.11 at 2:19 am

Hmmm…

http://www.moneyville.ca/blog/post/917662–why-i-have-2-credit-lines-but-no-credit-card?bn=1

#64 LB on 01.10.11 at 2:20 am

#37 Apocalyptic One

Your presumption is incorrect.The tools that most effectively fight tyranny and obtain and maintain freedom, have nothing to do with guns, “sadly” or otherwise.

Just read what another Russian,Tolstoy, had to say about that.

The reality is,the LESS a society uses,relies on or legitimizes armed force, the more we define it as being MORE secure, free, advanced and democratic. Logic dictates,therefore,that in a more evolved and truly free society, NO ONE can be armed.

#65 race against time on 01.10.11 at 2:20 am

Although I understand that there is a butterfly effect linking politics, society and finance, I don’t come to this blog to read about conspiracy theories or peoples opinions on guns, capital punishment, abortion, veganism, aliens, free masons, or trans fats.

I come here to learn about prudent fiscal strategies. I also come here to find evidence of coming market fluctuations that may not be reported by the main stream media. If you have something specific to add to this discussion, please do.

If you want to hear yourself talk, do it somewhere else. It is boring and exhausting looking through 150 comments of crap to find the one or two contributors that actually say something pertinent.

Please restrain yourselves before Garth has to shut this thing down. I’m sure he’s got better things to do than police a goddamn 6th grade class.

#66 kitchener1 on 01.10.11 at 2:20 am

WTF?? all the pro and anti gun crowd find this blog today??

Canada’s laws are very restrictive compared to the US and very lax compared to Europe. Either way the status quo has served us well and will continue to do so into the future.

regarding post #276 Hoof hearted from previous blog

Im not pushing Rob Ford, just saying that his message is the one that got the vote out and it hits home with a lot of people.

Garth is right on– Everyone should prepare and take responsibilty for their own nest egg once they retire (or not)

Its totally immaterial what politicans want to spend when there is no tax base to support it. We as a collective country bash the boomers (myself included) but lets face, it was that tax base that built a lot of the infrastructure we have.

Because of when they were born, they lucked out as taxes were low(er) because there were so many of them. Gen X, Y etc.. will have to pay higher taxes and govt funding will have to be cut. You guys all forgot that the Liberal govt under PM Martin was the most conservative in terms of spending.

It matter not what side of the spectrum politicans are on. It what the populace wants and can afford, that gets done.

Higher taxes, less spending. get used to the idea now so when it happens its not that much of a shocker.

#67 Dan on 01.10.11 at 2:24 am

As an American, all I can say is this type of thing is just our national pastime. A country that starts unprovoked needless and criminal wars, meddles in the affairs of countries by killing foreign leaders and undermining governments it doesn’t like, should expect chaos at home.

#68 Jody on 01.10.11 at 2:32 am

And in regard to gun crimes, people should really have the guts to want serious consequences for those who use guns to commit a crime, like how about the families of the shooting victims deciding the fate of the shooter? If they want to skin him alive why not? Would that not be a deterrent?

If people use guns to rob someone then put them away for life and by life I mean in jail until they die. People who smoke weed get put in jail longer than nutjobs who use guns to commit crimes. Now on all the news shows they are trying to blame the internet for this tradegy, coincidence that Obama recently said he wants a unique internet ID for all Americans, it’s the internets fault!!! A sick society is getting sicker.

http://www.cbsnews.com/8301-501465_162-20027837-501465.html

#69 Robert Dudek on 01.10.11 at 2:38 am

Overvalued US real-estate/subprime mortgages were only the first domino that caused the meltdown.

The next domino was heavy trading of subprime derivatives, which included outright fraud (rating CDOs with trash in them as AAA).

The third domino was the collapse of Lehman Brothers, which if you recall, was allowed to fail (unlike LTCM in 1998, which would have caused a similar meltdown at that time if its creditors had not been saved by the Fed).

Full story in the book “E-Conned” by Yves Smith.

It was only after Lehman’s demise led directly to the freezing of global liquidity that the bailout happened.

Do you think it will happen like this again? No. If it did it would not be a “black swan” i.e. it would not be a surprise. It will happen differently next time.

But because all these Wall Street jokers are still at it, it will surely happen again.

And for this reason, you should have at least 10-20% of your assets in precious metals.

#70 Burnaby Boy on 01.10.11 at 2:39 am

I think I am finally beginning to understand how Garth uses everyday events to teach us how to think economically. Today, Garth, as is the media, focused on the politician amongst the six dead as most of us focus on housing as an investment, not realizing that there are other ways to go. It truly is amazing how a politician gets all the attention when it should be focused on the child (the next bubble) who never had a chance at life. That is the true crime – the child.

#71 Brad on 01.10.11 at 2:41 am

I am a fairly young guy 28, currently renting investing my money I save and was wondering if any one knew what is a good price to income ratio to buy a house?
I think its a interesting question.
What were previous generations paying or what the long term average is? Something tells me grandpa probably wasnt paying 10 times his yearly income for a house in Vancouver or a 5:1 ratio like the current one in Edmonton. Either of which I can’t justify paying.

#72 Patz on 01.10.11 at 2:46 am

Here’s a thought for Sunday night: Murphy’s Law says what can go wrong, will go wrong. Simple and profound. Look around at the world today in the process of a ‘recovery’ that some in our government call ‘fragile.’

See anything that can go wrong?

#73 Dark Sad Monster Bunny on 01.10.11 at 2:50 am

Well Garth, I can say there have been comments that
make me angry.

I can also say I’ve read comments that worry me.

Now I can say there are comments (and commenters)
that truly frighten me. Back to my rabbit hole I go….

#74 Fritz on 01.10.11 at 2:56 am

So how can Arizona State law bypass the BATF Form 4473? I thought Federal law always trump State law concerning matters such as firearms? Having lived in Washington State and California it was required one having lived in that particular state for a minimum of three months before you could purchase any firearm and you still required either a state drivers licence or a state ID card.

#75 The Original Dave on 01.10.11 at 3:19 am

this isn’t a good topic for this blog. Bad idea G Man. It’s going to get too heated. It’s a story/topic that is too close to home for too many.

The topic is being personally prepared for unknown events. — Garth

#76 Blobby on 01.10.11 at 3:20 am

I’ve been away on a camping/ski holiday for the weekend, i get back and catch up on this insanity of news! Seems if you rhile up enough people, sooner or later you’ll find one idiot who’s prepared to go one step further (especially if said idiot is allowed to own a gun in the first place)

And I hadnt even considered the economic consequences of this! Thanks for the post garth this has got me thinking (time to call up my rrsp manager tomorrow i think).

PS: Feel free to edit this bit out (as i agree with you about some of the comments).. But in answer to #15 – anon.. The difference between guns and kitchen knives? Try doing a drive by with kitchen knives…

#77 Roial1 on 01.10.11 at 3:28 am

Additional comment: I have just discovered you may be a high school teacher in Camrose, Alberta. Now you sicken me. — Garth

Garth, time to read Andrew Fletcher. Politician and patriot (Scotland) 1653 – 1716

I truly believe that he was right. And still is.

Please look him up. Wikapedia is a good start.
You might see that Switzerland has followed his writtings.

#78 Roial1 on 01.10.11 at 3:31 am

A Discourse of Government relating to Militias

This is what I read and think should be the path followed by Canada.

#79 Randman on 01.10.11 at 3:44 am

Jared the assassin made several Youtube videos deriding the federal reserve and praising gold and silver as a new trustworthy currency.

Somebody better do a role call of the dawgs here.

What are you trying to say Ott Mike?

That those of us who advocate and believe in PM’s
are one silver maple away from shooting people?

I suggest you retract your retarded remark so as to salvage what’s left of any credibility you posses

#80 Pat on 01.10.11 at 4:08 am

#275 Dark Sad Monster Bunny wrote:

“274 Pat – LWYM can just put things outside to freeze.”

Sure. Or even better – use a pressure cooking pot. 15 min cooking time, no need to freeze, no need to defrost.

Know your thermodynamics :)

#81 Mike Litoris on 01.10.11 at 4:10 am

Giffords was shot because average Americans such as Jared are slowly but surely going BATSHYT as they witness the blatantly rampant corruption of our government leaders and their insane determination to openly tranfer our collective national wealth AND individual savings over to their corporate buddies.

Add to the mix the fact that most Americans have developed an almost psychopathic (though arguably justifiable) fear of being spied upon by their own government along with easy access to weapons and the recipe for disaster is quite clear;

Expect even MORE shootings as progressively growing numbers of Americans become increasingly disgruntled and reactionary. And THAT, ladies & gentlemen, will be the one and only REAL “change you can believe in” that this goddamn administration -or any other to follow it- will ever deliver.

We now return you to your national economic collapse, there will be no further commercial interruptions.

#82 Willa on 01.10.11 at 4:31 am

I’m reading Taleb’s book about black swan events.

It’s not rocket science, this idea that unexpected events change human fates more than trends and movements. But the book forces you to consider whether you (or your country) are anchored against those kinds of disaster while still keeping itself/yourself free to react and adapt quickly.

This is (I think) Garth’s point. Buying indexed funds or putting all your wealth in nonliquid assets is like planning to go down with the ship if it hits an iceberg.

#83 Yank on 01.10.11 at 4:40 am

“It was actually a 9mm Glock semiautomatic handgun but equipped with a 31 yes 31!!!shot magazine.He had two more mags but was stopped from reloading.scary stuff.”

Actually, he did re-load – only the spring didn’t work in the second magazine & that’s when the two men tackled him. If that spring didn’t jam the carnage would have been a lot worse. 31 additional bullets –

He bought the gun legally, even though it was very clear that he was crazy to many, including students and teachers. (no background check, ect.)

It’s much safer in Canada because of the gun laws.

#84 Sandy Landers on 01.10.11 at 5:05 am

The suspect in the terrible murders today was trying to reload his Glock and two people nearby assisted by a person with a gun on his belt, held the suspect until police arrived. What would have happened if the assailant overpowered the brave bystanders? More tragedy. But a citizen who was wearing a handgun was ready to end the problem. By the way, the perpetrator was also wearing a combat knife. The knife was not meant for chopping his breakfast. So lets also have a knife registry…and a brick or rock registry. Nutburgers can kill anyone with anything that is handy from shoe laces to a frozen lamb chop. Once we have restrictive laws, will we be safe? I would compromise on gun laws if we had a MANDATORY death sentence for anyone who used ANY weapon in the commission of a felony! This law would be uniformly applied to all “protected classes”. So gang members would not get 30 days for murder like today. The former California State Assembly speaker’s gang member son (The Hazard Crew–T H C) was found guilty of stabbing a college student and was sentenced to 17 years on a plea deal to avoid a 30 year sentence. Our Governor tries to pardon him! But the uproar, caused him to relent lowering the penalty for the STABBING to 7 years. So…register guns…and I will be happy with DEATH penalty for murderers NO PARDONS by politically correct politicians!

#85 Calgary REality on 01.10.11 at 5:37 am

A terrible tragety for sure. My heart goes out to all those who died.

Can I say here that I’m in favor of education over gov’t restriction?

Education can provide a much more ethic and moral (not to mention cheaper and more simple) solution than gov’t involvement and restriction.

—-

RE and Investing:

Garth has excellent points. I’m in 99% cash in the bank, I’m looking to put some money into ETF’s end of the year but right now with the financial unstability worldwide it’s just more liquid (I do not have to sell anything off, ETFs, bond, stocks, RE, anything) to get immediate access to my money. Also I do not have to worry about my investment at night. That to me is worth the “insurance” cost of a lower return.

#86 Anon on 01.10.11 at 6:02 am

Garth, you are being irrational. You started this discussion about gun registry and then you are getting upset that people react. You did not even explain what your own view of the gun registry is. I get the part that you are upset when people think they might have to use firearms against people. I agree that when people acquire firearms with the goal of one day aiming them at other people it is wrong and those people should not be allowed to own firearms.

Anyway, if you think the debate over gun registry is not relevant then just admit that you made a mistake by making a reference to it in that particular context of your post.

This post is not about gun registry Garth. It is about keeping you honest.

I did not write about, mention or reference the Canadian gun registry. — Garth

#87 Utopia on 01.10.11 at 6:03 am

#37 The Apocalyptic One formerly Old is Gold wrote:

“I peruse this blog occasionally and comment infrequently but I would have to say that Garth’s contention is that the most of the people in this country are delusional, and I would dare say that most of his readers would agree”.
———————————————————-

Are we reading the same blog?

I think the message here has been pretty consistent. It is not, as you contend, that Canadians are delusional.

The message as I see it has been that public policy, regulation and interest rate decisions have worked in unison and have in aggregate resulted in a myriad of undesired impacts and distortions in our economy while simultaneously leading many Canadians into perilous financial circumstances for which they seem ill-prepared.

And where did I ever mention guns?

#88 Kaganovich on 01.10.11 at 6:51 am

Dawgs,

Here is a post that is relevant to today’s topic, please read:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8249181/Deepening-crisis-traps-Americas-have-nots.html

#89 Kaganovich on 01.10.11 at 7:32 am

Here is a nice little essay on idiocy and how us Dawgs may be able to transform ourselves. In the wake of the senseless attack in Tucson, we should engage in a bit of self-criticism and reflection. Enjoy:

http://neithercorp.blogspot.com/2010/11/fuzzy-logic-of-useful-idiots.html

#90 unbalanced on 01.10.11 at 7:59 am

To Nonplussed.

Really enjoy reading your posts and many other contributors out here. Could you please explain to me your comment about bonds in the 70’s? I thought interest rates were very high ranging upwards to 18%. A 30 yr. bond giving 18% would have been great wouldn’t it. Not trying to ruffle any feathers here, just trying to learn.

By the way Garth, great post today.

unbalanced

#91 T.O. Bubble Boy on 01.10.11 at 9:02 am

@ #42 Elmer

Actually Garth, it’s Canada’s gun laws which are absurd.

In some US towns you can walk into a grocery store and half the people in there will be wearing a gun on their hips, and these towns have nowhere near the crime rate of Toronto.

Nice theory… but not even close to reality.

Alaska is the #2 U.S. State in terms of firearm deaths, and Wyoming is #4:

http://www.statemaster.com/graph/cri_mur_wit_fir-death-rate-per-100-000

Notice New York is #46, and California (L.A.) and Illinois (Chicago) are #30 and #31… so, big cities may have a higher NUMBER of gun crimes, but percentage-wise they are below many rural/small town areas for gun deaths.

#92 Moneta on 01.10.11 at 9:26 am

Most here are not of the most extreme opinion. We have a contrarian view perhaps but it has always been a community of fairly like minded people with a level headed outlook. It has mostly been thoughtful dialogue peppered with local anecdotes and some well researched material.
——
FWIW, WTSHF in the US, comments became extreme. It’s a sign that people are getting nervous.

The bubble cycle:

Peak: Euphoria
Anxiety
Denial
Fear
Desperation
Panic
Capitulation
Trough: Despondency
Depression
Hope
Relief
Optimism
Excitement
Thrill
Peak: Euphoria

Canadians are spread out between euphoria and fear.

#93 DARLENE on 01.10.11 at 9:27 am

Since gold and gun post have overrun the comments for the last couple of days,

http://www.youtube.com/watch?v=FRtd8ArvH_s

is it ever gonna be enough?

#94 Aussie Roy on 01.10.11 at 9:30 am

Siddelly on 01.10.11 at 1:15 am

Chaos: Making a New Science by James Gleick is a great way to get interested in Talebs Mentor, the amazing Benoit Mandelbrot, and I highly recommend it to the motivated learner.

I owe a successful career as a currency and commodity trader to Mandelbrot and his work in the 60’s in the US cotton market. Many of the basic tools for picking a bubble can be found in his cotton market work. Taleb picked the bubbles which made him a weathly man using what I call “Mandelbrots basis”. This is what I’ve used for years to risk manage and market make in the Australian grain market.

That said, its one thing to know when an asset or commodities price has exceeded its value, it is another thing trying to tell when a revision to the mean is going to happen.

For the Austrian economics school followers much of his work compliments their thinking. In later years if my cadet traders had an economics degree, it took some work convincing them that many things they had learnt must be forgotten, in particular the market is always in equilibrium rubbish and the madness of price is value. This curiosity of what was being taught lead me to Steve Keen, who at the time was looking at Aussie house prices, I’ve been a global bubble watcher ever since.

Aussie Update

As school leavers hit the job market December unemployment jumps 88,000 to 903,000 (7.7%, up 0.8%) & Underemployment is up 216,000 to 1,028,000 (8.8%, up 2.0%) Now 1.93 million (16.5%) Australians are Unemployed or Underemployed

http://www.roymorgan.com/news/polls/2011/4622/

Any wonder why the retail sector is suffering. As a side note, the Aussie house bubble has a sister, commercial RE. Using some crude measurements its somewhere between 30% and 60% over value. Retailers rents are some of the highest in the world. Should they own their own premises the return on capital (just based on the buildings price) is close to the lowest in the in the world.

No wonder we have a current TV commercial telling us to get out there and shop.

#95 pbrasseur on 01.10.11 at 9:34 am

When it comes to investment what really matters is quality, this is true more than ever.

I was 100% stocks before the crisis, I’m still 100% stocks and doing just fine, better than before the crash and poised for solid gain.

There is no trick, just common sense, if you buy a business you want a great business with good numbers and great management. The same goes for stocks.

#96 Moneta on 01.10.11 at 9:36 am

If they want to stand by their remarks and put them out to the public on a very popular site that is viewed by hundreds of thousands annually, then let them use their real names.
——
In the US, when people finally understood the tide was turning, posters started lashing out at anonymous posters calling them cowards.

Banning anynomity is just as extreme. It slows the exposure of truth­.

There is no black or white solution in this world. The trick is to control extreme comments.

#97 Moneta on 01.10.11 at 9:37 am

The trick is to control extreme comments.
—-
Should hav eused manage and not control.

#98 Bastiat79 on 01.10.11 at 9:39 am

To me, the facts look like:
– Whack-job or not, this was a political, desperate act against *perceived* tyranny
– No gun registry in Arizona would have stopped this

I personally appreciate when discussion about the facts is not censored.

#99 Moneta on 01.10.11 at 9:42 am

Violence is always regrettable, the perpetrator in the Arizona shooting was obviously a nut job, but nut job aside, kicking 6,000,000 American families out of their American homes will not come without consequences. Hes not the only nut in U.S.A.
——
I agree. With 300 million people in the US, and using the law of large numbers, there are more than just a few nuts that’s for sure.

You can blame it on a nut but the writing was on the wall. When you play with people’s feelings and livelihood, you can expect some anger whether you like it or not.

Bankers never put human sentiment in their fancy models because they think they can buy protection.

#100 David B on 01.10.11 at 9:49 am

Very good overview postscripted with sound advice.

Thank you Mr. Turner

#101 bigrider on 01.10.11 at 9:51 am

Garth, Eric Sprott recently went on record stating that he expects the next ten years to be pretty much the same as the last ten in terms of economic performance. He went further to state that he expects indexes to close lower than today by the close of the decade. In other words more catastrophic doom.

Do you have an opinion on when you believe economic conditions will once again turn bullish? Will we ever see a repeat of the boom times experienced between 1982 to 2000?

Expect a range-bound market with lots of volatility within the band. This is why active management and balance are essential to achieving growth plus capital preservation. — Garth

#102 Ben on 01.10.11 at 9:54 am

#7 Harry and #19 The Analyst:

I agree with #19 that TD e-Series index funds, with MER’s in the 0.4 range, are the way to go for a young investor with less than $50k. Using the allocation #19 suggests, the MER would be 0.42%. No cost to buy or sell these funds – the only fee is the MER.

Yes, ETF’s have slightly lower MER’s, perhaps averaging 0.3% for a diversified portfolio. But, each trade will cost $9.95 at most of the brokerages. On a small portfolio, even if only rebalancing a few times a year, that trading cost will more than eat up the savings in MER.

50k, ETF’s with occasional rebalancing.

You ignored my main point. Liquidity. Events of the weekend show this is a far larger concern than a few bucks in trading costs. — Garth

#103 Moneta on 01.10.11 at 10:01 am

The Original Dave on 01.10.11 at 3:19 am
this isn’t a good topic for this blog. Bad idea G Man. It’s going to get too heated. It’s a story/topic that is too close to home for too many.

The topic is being personally prepared for unknown events. — Garth
——-
It’s the elephant in the room.

Like the immature teenager it is, the US refused to deal with these issues and look at where the Americans are today.

#104 BDG-YYC - on 01.10.11 at 10:07 am

.#40 Patz on 01.10.11 at 1:15 am
#214 a prairie dawg said:
#187 Nostradamus Le Mad Vlad

The 20,000,000 question.
Come on … you can’t be seriously arguing the math on that silly post. Amazing how adding up the numbers and checking spelling, punctuation and grammer passes off as a substitute for critical thinking.

Please riddle me the math on this …

If there ar 34,000,000 people in Canada, and 15% of the population is 14 or younger (about 5 million) and 16% of the population is over 65 (about another 5 million) … and “IF” 20million of the remaining (workforce) population was claimed to be over 50 but not yet 65 then … how many of the remaining 4 million people (11%) who would be between the ages of 15 and 50 would be thinking some fool was pulling numbers out of their ass?

#105 Cassandra on 01.10.11 at 10:09 am

Except that firearm purchases in the US require an FBI criminal background check, which Loughner passed. And that democrats used a map with bullseyes to target republicans, and that the democrat blog Daily Kos “targeted” Giffords for not being liberal enough. And the cities in the US with the most gun crime have the strictest gun laws.

Hey! Maybe this guy is just a nut and is nobody’s fault or responsibility but his own!

#106 dark sad person on 01.10.11 at 10:09 am

49 OttawaMike on 01.10.11 at 1:39 am

Nonplused @22

I wasn’t really making any argument other than some of our gold obsessed blog leprechauns are a little kooky at times. I’m glad GT is clamping down on it as I was getting tired of wading through those repetitive posts.

**************************
Well then Ottawa Mike-

Dazzle us with your brilliance in economics-minus any talk of gold-
From what you’ve posted so far-all i see is someone who ass kisses G-for the flavor of the day-

Try it some time. — Garth

#107 Young Old Fart on 01.10.11 at 10:11 am

#66 kitchener1 on 01.10.11 at 2:20 am

WTF?? all the pro and anti gun crowd find this blog today??

Who do you think would have shown up if the people had been shot in front of say, an abortion clinic?

It is the topic of the day…..

My 2 bits? I have 5 guns. Properly registered as soon as it was required. I can hear the question, why 5. Every one is for a different type of hunting. You would not take a Cadillac up a 4 wheel drive track. I never understood the big deal about registering my guns. If the police want to come and take them they can. But as long as I remain the law abiding citizen I am, do I really need to fear that? For the record, they are properly locked away in a safe. The bolt mechanisms locked away in yet another hidden location. Safe, proper gun management.

Thanks for letting me wade in my opinion Garth…..

Now back to the important stuff. My question is Bond mutual funds. Is it time to pull out of those and purchase something else? I have a premium long term fund and a short term bond fund. They are in one of my rrsp’s and represent approximately 30% of my portfolio. Thanks.

#108 Moneta on 01.10.11 at 10:12 am

Now I can say there are comments (and commenters)
that truly frighten me. Back to my rabbit hole I go….
——-
An eye opener. It just goes to show how different we Canadians are! As if…

#109 dark sad person on 01.10.11 at 10:34 am

God how i love those Icelandic people-
Lead the way Iceland-you rock!

****************
The Telegraph reports Iceland offers risky temptation for Ireland as recession ends

Iceland has finally emerged from deep recession after allowing its currency to plunge and washing its hands of private bank debt, prompting an intense the debate over whether Ireland might suffer less damage if adopted the same strategy.

Iceland’s budget deficit will be 6.3pc this year, and soon in surplus: Ireland’s will be 12pc (32pc with bank bail-outs) and not much better next year.

The pain has been distributed very differently. Irish unemployment has reached 14.1pc, and is still rising. Iceland’s peaked at 9.7pc and has since fallen to 7.3pc.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8187476/Iceland-offers-risky-temptation-for-Ireland-as-recession-ends.html

#110 Moneta on 01.10.11 at 10:35 am

Hey! Maybe this guy is just a nut and is nobody’s fault or responsibility but his own!
—–
Maybe but everyone with a cause will use his actions to make their point.

#111 Carruthers on 01.10.11 at 10:41 am

“this isn’t a good topic for this blog. Bad idea G Man. It’s going to get too heated. It’s a story/topic that is too close to home for too many.”

“The topic is being personally prepared for unknown events. — Garth”

You mean being personally prepared by owning a gun Garth?

Haha. Just sh*ting you Dude. Trying to lighten things up a bit around here today. Ooooookkkk.

#112 Marty on 01.10.11 at 10:42 am

Another swan event which is just a matter of time before it plays out (although it could still take a few year): The US government’s road to insolvency. In a letter from Timothy Geithner, the US Secretary of the Treasury, to Congress on Jan 6, 2011, he asked for the debt limit to be raised – otherwise the US could default on its debt.

His own words were:
“Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States.”
(see http://www.treasury.gov/connect/blog/Pages/letter.aspx)

This is clearly unsustainable. They can only keep kicking the can so many times down the road until it becomes overwhelming: http://www.lewrockwell.com/rozeff/rozeff338.html

#113 bridgepigeon on 01.10.11 at 10:43 am

Garth, as you believe that the US will not default, and the economy has to push forward, is this not an ideal time to buy some US dollars?

A year ago I said the dollar would rise to par. It has. Now it will likely stay there for some time, which makes it a good time to buy all things American. — Garth

#114 Moneta on 01.10.11 at 10:46 am

Young Old Fart on 01.10.11 at 10:11 am
——-
Look at charts on page 6:

http://dir.rbcinvestments.com//pictures/account-ds.publisher/commentary.pdf

I’m not sure Cdn rates can stay much lower than US rates for much longer in a weakening environment. Carney has been telling us short rates will be coming up. This means Cdn curve will probably be flattening or moving up. Not good for long bonds on short-term basis.

#115 Ben on 01.10.11 at 10:46 am

True, I did ignore liquidity. But, aren’t we only talking about a matter of days, comparing speed of liquidating mutual funds to cash, vs. ETF’s to cash? Provided a solid emergency fund is on hand, what’s the difference?

Not trying to play games here – really would like to know what you see as the liquidity drawback of a mutual fund.

Simple. MF companies have the right to suspend redemptions, and will (and do) if too many people try to cash in. ETFs are traded on an exchange and therefore far more liquid. — Garth

#116 pjwlk on 01.10.11 at 10:58 am

Building permits plunge unexpectedly:

http://www.vancouversun.com/news/Building+permits+plunge+unexpectedly/4085265/story.html

#117 P F Murphy on 01.10.11 at 10:58 am

I hear a report that said the gun was a 9 mm Glock which I believe is a semi-automatic hnadgun – semi b/c it requires a trigger pull to fire each shot vs. a fully automatic which requires only one pull to empty the whole magazine, but is normally fired in short bursts. “Retardation” is a continuum which starts slightly below the normal IQ of 100 and goes down into profound retardation where little interaction is possible. I don’t think the young murderer was retarded. And JO “violence is never an option” but the young murderer “should get capital punishment” ???? To show that violence is always an option, maybe?

#118 Mike on 01.10.11 at 11:07 am

Brilliant post, really – thanks.

#119 Prufrock on 01.10.11 at 11:11 am

#9 OttawaMike:

You beat me to it. This event reveals that a lot of the paranoiacs out there (and here) have the potential to be Manchurian Candidates for the far right. That this guy was able to refer to Hitler and Lenin with equal approbation (as the press is reporting), shows that we should now identify a new ideology: Conspiracyism–a powerful world view (or illness) that transforms every phenomenon into evidence for the global reach of nefarious, omnipotent cabals.
Beware!

#120 boomer62 on 01.10.11 at 11:13 am

#67 Dan on 01.10.11 at 2:24 am

Dan,
You may be an American, but I doubt your sentiment reflects the majority of your fellow country men and woman. Everything you say is nonsense. Are you sick today or retarded?

America has done more good for this planet in the last 100 years than any other in the previous 1000 years.

This weekend’s shooting in Arizona was an isolated event from a very sick individual. Only a social psychopath would try to spin it into more than that…get help.

Now, for all the gold bugs….a little wake up call…

– lottery tickets are probably a better ‘investment’ than buying bullion, certainly better entertainment and,

– for those whom buy gold shares…read your prospectus’…now tell us what you have really purchased…did you buy tech shares in the late 1990s too?

Turner,
The class has gotten way off topic…please get back to RE.

#121 Devil's Advocate on 01.10.11 at 11:23 am

#52 Sea Wave on 01.10.11 at 1:49 am

Canada’s house price boom has coincided with a massive credit boom and marked financial deregulation.

Or possilbly;

Canada’s house price boom is the consequence of a massive credit boom and marked financial deregulation?

On guns
I’m not against guns.

I do not own a gun but I always conduct myself as if the other guy does and has it in his possession.

I do support the right to bear arms, not so much to hunt with or protect private property but to take back a government gone awry or keep it from doing so.

When the day comes, and it will, if I am still alive I will find a gun as circumstances then warrant need of one. Be it to defend our boarders against invasion by another government or my and my neighbours home by our own. And quite frankly I do believe I hear their footsteps already too near. But as you all know I am a bit of a “nut job” myself. ;-)

#122 Gord In Vancouver on 01.10.11 at 11:27 am

As bearish as I am on Canadian real estate, I don’t think our market will tank to the level that America’s did.

If; however, the Canadian loonie continues to spike and unemployment here rises, our country’s “kind, compassionate, and tolerant” image could take a beating.

We don’t need a US-style collapse to feel a lot of hurt. — Garth

#123 BDG-YYC - on 01.10.11 at 11:33 am

Write this one off Garth.
Blog’s been hyjacked for the day by the Agendatistas. Funny how the richeous head for the moral high ground safely out of range from the nearest hill top and bring out the artillary without considering that they are simply raining destruction on the valley below. The noise is exciting though.

Why does moral high ground always seem to come in pairs ?

#124 boomer62 on 01.10.11 at 11:41 am

#70 Burnaby Boy on 01.10.11 at 2:39 am

Are you on something?

#125 Not Wondering Anymore on 01.10.11 at 11:44 am

Garth re: your comments to Ben #115 about Mutual Fund companies having the right to suspend redemptions if too many people try to cash them in.

That comment should be expanded to include the fact that banks can do the same thing if too many people try to withdraw their cash, and companies can do something similar when they impose across the board “haircuts” on shareholders” dividends, while governments can also do the same thing by making across the board cuts in pensions,payouts and services while increasing taxes for all taxpayers.

Therefore, when it comes down to it, to have true “liquidity” ,one must possess actual cash IN HAND (NOT gold) and your advice to achieve and maintain financial independence and solvency in uncertain times should include this recommendation as an integral part of your “balanced” approach.

Cash is not a strategy, since it loses value daily due to inflation and taxes. Assets with 100% liquidity (like ETFs) which still augment, are an essential hold. — Garth

#126 Moneta on 01.10.11 at 11:50 am

Should they own their own premises the return on capital (just based on the buildings price) is close to the lowest in the in the world.

No wonder we have a current TV commercial telling us to get out there and shop.
———-
I’ve talked to a few boomers who sold their businesses in the last couple of years. All the value came from real estate. The business itself was basically worthless.

Multi-millionaires now though! LOL.

BTW, Aussie Roy, thanks for your comments on Australia. Always good to keep an open mind!

#127 Chris no longer in England on 01.10.11 at 11:59 am

Warning for UK homeowners – how to avoid the “dreaded 7 per cent club” …

http://www.dailymail.co.uk/property/article-1345753/Low-equity-Stand-seven-cent-rates.html

#128 phinny on 01.10.11 at 12:01 pm

As a gun owner and hunter (and not some lazy, ripping along lease roads firing from the truck ‘so called hunter’) and proud card carrying Alberta Conservative – I no longer think having to register my .22 and 3030 was a big deal.

As for the military taking over… been there for a decade. they’re just regular guys. Young ones want to have an adventure somewhere far away, the old one’s wanna get away from there and see their kids. I’ve never heard talk of a coup. I think that would get you 4E’d, or whatever designation that is.

As for semi-auto weapons… you practice enough with that .22 you’ll be fine when the zombies.. I mean, sorry, the aliens – or no – the military takes over. Whatever- all the same camp. Semi-auto puts far too much firepower in the hands of ordinary citizens- who may very well be nut whacks and have a beef with the kid flippin’ burgs at McDona
lds.!

#129 No crystal ball... on 01.10.11 at 12:06 pm

Giffords’ reference to Palin : “The way that she has it depicted has the crosshairs of a gun sight over our district. When people do that, they have to realize that there are consequences to that action.”

Let’s hope so.

Whether the nut job shooter took any cues from Palin’s redneck call to action or not, Americans should not tolerate her message any more than they tolerate Bin Laden calling for terrorist acts against the US.

The buzz word in the media today is “civility” and until all people really understand what that means, there is no hope for the government (left and right) to save their sinking ship of a country. Financially or otherwise. And the undercurrent will be strong enough to pull Canada down too.

#130 boomer62 on 01.10.11 at 12:17 pm

#42 Elmer on 01.10.11 at 1:16 am

What are they afraid of? or is it a 1980s fashion statement? Have you bought your house there yet?

#131 Mr. Plow on 01.10.11 at 12:59 pm

#4 JO…

If “violence is never an option”, what exactly is capital punishment?

#132 GregW, Oakville on 01.10.11 at 1:09 pm

Hi Garth, Nicely said.

article from ‘Your Money’.

Embrace your TFSA http://blog.yourmoney.ca/2011/01/have-you-embraced-your-tfsa.html

ps, thanks for the gentle shake. Heading out side for another walk.

#133 OttawaMike on 01.10.11 at 1:13 pm

Randman and Dark Sad Person,

Yawn.
It seems the mosquitoes are still out in January.

#119 Prufrock
What I was trying to convey but you said it way better.

#’s 88,89 Kaganovitch
Great links and commentary as usual.

#134 Devil's Advocate on 01.10.11 at 1:14 pm

What I will say is that as a young boy I grew up in a time and place when did our own Canadian/British Columbian version of a “walk-about”. Maybe not such a formal right of passage but an exercise which taught lessons and respect of the outdoors none-the-less. A gun was a tool often carried in that adventure in addition to always a knife.

We do live in Disneyland, make no mistake. Our lazy reliance on these comforts we take for granted, as so many other societies have learned, can easily and very quickly be taken away. Is it going to happen? In your lifetime; chances are minimal, but eventually yes as we certainly are no different and not immune.

Insurance… always be prepared and never be surprised for as Garth warns ” Such an event has three characteristics: It’s a surprise and a shock. The impact is profound. Afterward, we think it should’ve been anticipated.”

#135 Hoof Hearted on 01.10.11 at 1:16 pm

If not mistaken…didn’t Canada sign some sort of agreement that allows the US military into Canada under certain sets of circumstances ? I think this was brought up during the Olympics.

I highly doubt our military could handle internal revolt, they’d probably join us.

#136 OttawaMike on 01.10.11 at 1:23 pm

I posted a link here a couple of days ago about a long term strategy of buying the S&P on the last day of every month and selling on the first.
Over 10 years this would have resulted in 13% returns on average.

Rosenberg wrote about this phenomena today in his daily report but only for 2010 :
“It is truly the nuttiest thing ― the best days last year were the first day of each month (save for June and July) and then after that there were practically no crumbs to nibble on: These are the point changes for the first trading day of each month in 2010, which totals 134 points (as we mentioned above): December +26 points; November +1 point; October + 5 points; September +31 points; August +24 points; July –3 points; June -19 points; May +16 points; April + 9 points; March +11 points; February +15 points; and January +18 points.”
January 2011 started up 14 points as well.

#137 dark sad person on 01.10.11 at 2:06 pm

#120 boomer62 on 01.10.11 at 11:13 am

– lottery tickets are probably a better ‘investment’ than buying bullion, certainly better entertainment and,

– for those whom buy gold shares…read your prospectus’…now tell us what you have really purchased…did you buy tech shares in the late 1990s too?

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

Your head is so far up your ass you need daylight and oxygen pumped to your brain-

Yes i bought tech stocks and i made a killing on them-
Yes i bought gold stocks and yes-I’ve been making a killing on them for 10 years-
Taking profits when they’re offered-using stops and buying the dips-is how you play the game-in a bull market-

Get a clue before you ramble on about something you know absolutely zero about–

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

Thought we weren’t supposed to talk about gold here G-
Or is it ok for those who hold your opinion?
Actually they don’t have an educated opinion-they just clutch to your apron-

#138 bill on 01.10.11 at 2:23 pm

http://www.niallferguson.com/site/FERG/Templates/General2.aspx?pageid=10#livingdangerously

volume is a bit quiet…

#139 Junius on 01.10.11 at 2:37 pm

#131 Mr. Plow,

Clearly the irony of the statement is lost on this person.

Violence begets violence. It always has. Capital punishment has never been proven to be an effective deterrent. However the most violent societies are generally those with capital punishment. No contradiction there.

#140 bill on 01.10.11 at 3:09 pm

”Tucson may yet be a swan.”
according to mr ferguson the first world war caught just about everyone by surprise.
his line of reasoning went something like : if you were a bond holder in the major european governments in july of 1914 ,the wardrums should have caused you to exit these bonds . apparently there was no selloff and the declaration of war by the british war cabinet on the august bank holiday was a bit of a surprise.
the war cabinet was divided on whether they should go to war at all. a 5/4 vote for the war was the end result.
stock market didnt do so hot either. didnt reopen till the early 20’s [i think]

#141 a prairie dawg on 01.10.11 at 3:10 pm

@ #40 Patz

Doh! Make that a bad math gene.

#104 BDG-YYC

I needed to know what the total was to compare it to the amount our government has spent to date on stimulus. The math was to prove a point about which solution would cost more. Sorry if the Harper reference at the end didn’t zero that in for ya. To be clearer I’ll be sure to vet all my future posts through legal first.

#142 Mr. Lee on 01.10.11 at 3:30 pm

Reason is becoming more of rare commodity as is demonstrated by the events that unfolded in Arizona, the comments on this blog and the Canadian housing market.
Reason has been replaced with mania, raw emotion and no sense of self control. Nut bars blow away people, gun control is fought on two extreme sides of the debate and a large portion of the populace is seduced be granite and ss at prices that would make a king’s ransom blush with envy.
So in the absence of reason is it hard to fathom, house price collapses, market crashes, austerity, families being torn apart because they lived beyond their means and whack jobs whacking innocent people.

#143 bridgepigeon on 01.10.11 at 3:36 pm

120Boomer on Dan67
Re:” sick, retarded, social psychopath, nonsense”
Nice…can’t argue with that eh?
;-)

#144 grantmi on 01.10.11 at 3:53 pm

” You are now banned for life from this site!” — Garth

Nasty Jr….. YES!!!

Happy days are here again
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again

#145 grantmi on 01.10.11 at 3:57 pm

#140 Sail1 on 01.10.11 at 2:47 pm
Contractors took out $874 million worth of building permits in the Toronto area in November, down 15.7 per cent from a month earlier.

Worst in BC.

In British Columbia, residential permits fell by 51 per cent, mainly due to the reduction in multi-family dwellings.

Looking at it by the number of housing units involved — as opposed to the value of the permits issued to build them — the monthly decline was almost entirely due to a 24.1 per cent drop in multiple units centered largely in B.C., Holt wrote in a note.

Read more: http://www.canada.com/condo+swoon+drives+down+national+building+permit+numbers/4085273/story.html#ixzz1AfC5UJkg

#146 The InvestorsFriend (Shawn Allen) on 01.10.11 at 4:16 pm

Garth said at 75:

The topic is being personally prepared for unknown events. — Garth

Now the risk of home ownership has often been discussed. Erroneously, it has been stated that such risk is proportional to your equity in the house.

That would be true in a non-recourse mortgage situation.

Given recourse mortgages you are at risk for market value changes in the full cost of your house.

The main question is not; What equity do you have in the house?

The more relevant question is; What is the ratio of your house value to your net worth?

For young people house value may be several multiples of their net worth and of course that means the house is a big risk. But they are young and if they have good jobs and education that is a risk they can (maybe) handle. If their net worth goes below zero they can work their way out of it.

For older people near retirement, your house value should ideally be not more than 25 to 50% of your net worth where your net worth includes your savings and the value of your future pensions, maybe even count the value of CPP and old age.

Mainly I just want to point out that the financial risk of home ownership is not proportional to only your equity in the house but is instead proportional to the full value of the house.

Now if you have no mortgage on the house then you have a high capacity to absorb that risk. If you are mortgaged to the hilt you may be unable to handle much downside risk. The risk has not changed but your capacity to deal with risk is less the more debt you have.

P.S.

You’re Welcome.

#147 Debtfree on 01.10.11 at 4:30 pm

welcome to kelowna . There are nut jobs in every walk of life. Not just teachers .

http://www.youtube.com/watch?v=FKGyoFvpve4

#148 Viva Wikileaks! on 01.10.11 at 4:32 pm

This may sound kind of harsh (though ONLY to American ears) but the fact is that the rest of the world DESPISES the U.S. right now because of all its human rights violations, illegal country invasions, pervasive torture, wanton murder, rampant financial scams and sexual perversions (like piling naked men into pyramids and then taking snapshots of yourselves doing the thumbs-up thingy).

Face it: you’re a degenerate nation whose time has past and you’re now falling apart at the seams like a cheap woman’s summer dress under a torrential rainfall.

Good riddance to bad rubbish.

#149 robert james on 01.10.11 at 4:32 pm

Violence begets violence you say.. Check this out directly from the Best Place on earth.. Watch the short video of a RCMP kicking a Kelowna man that has surrendered in the face.. Realpaul will love this..lol http://www.castanet.net/

#150 Grrr on 01.10.11 at 4:34 pm

A note on deflation and those who see it as a positive; deflation affects all prices including wages. If wages are falling faster than other prices, then those reliant on their paycheque suffer. Less so for those on fixed income.

I’m not saying deflation is bad or inflation is good, or vice versa. The devil is in the details and inflation/deflation affects people differently.

#151 TheBigLebowski on 01.10.11 at 4:39 pm

No matter what anti gun laws are passed, a criminal will always find a way to obtain one. Guess how the shooter in Phenix what stopped ? He was taken out by a person with a conceal and carry permit. If that same incident occured in Canada, where carrying a side arm is against the law, the whole crowd would have laid on the ground defenceless waiting to be shot. What is so wrong with being able to protect ones self from a wacko ? But Garth is all for government regulation and control I forgot. Sound money, and a prosperous middle class is bad. Austerity and taxes is good. Spoken like a true socialist/Marxist. A society where there are two classes, the rich and the poor is the wave of the future, where the poor are not allowed to protect themselves from the wacko minority. A herd of sheep being led to the slaughter comes to mind where the sheep rebelling against the consumption of mutton would be more effective than what we will be left with in the future.

#152 Stevermt on 01.10.11 at 4:40 pm

i don’t think the crash of 2008 was a Black Swan event, because some people were predicting it already, except for the exact timing.
A true black swan event is on par with 9/11, where nobody saw that coming, it was a shock and people afterwards said that we should have seen it coming.
I managed to read the 1st few chapters of Taleb’s book, and that’s about what I got out of it.
This shooting is not a Black Swan because it’s not unusual to have shootings, especially stateside. The impending event triggered by this event could indeed be a huge surprise that nobody saw coming; I guess time will reveal this.

#153 boomer62 on 01.10.11 at 4:41 pm

#137 dark sad person on 01.10.11 at 2:06 pm

My chiropractor assures me that what you describe is not possible.

For someone so boastful of their own success, you seem very angry. Try giving instead of taking. You might want to consider your stock market ‘killings’ were at the expense of others.

Easy credit and the real estate bubble are also at the expense of others. Its in everybodies interest to prevent and/or minimize the human damage.

The fabric of Garth’s apron contains a great deal of social responsibility.

#154 TheBigLebowski on 01.10.11 at 4:44 pm

No matter what anti gun laws are passed, a criminal will always find a way to obtain one. Guess how the shooter in Phenix what stopped ? He was taken out by a person with a conceal and carry permit. If that same incident occured in Canada, where carrying a side arm is against the law, the whole crowd would have laid on the ground defenceless waiting to be shot. What is so wrong with being able to protect ones self from a wacko ? But Garth is all for government regulation and control I forgot. Sound money, and a prosperous middle class is bad. Austerity and taxes is good. Spoken like a true socialist/Marxist. A society where there are two classes, the rich and the poor is the wave of the future, where the poor are not allowed to protect themselves from the wacko minority. A herd of sheep being led to the slaughter comes to mind where the sheep rebelling against the consumption of mutton would be more effective than what we will have in the future.

“Those who would give up Essential Liberty
to purchase a little Temporary Safety,
deserve neither Liberty nor Safety.”

– Ben Franklin

Thought for the day. One person tries to sneak onto a plain with a firecracker stuffed down his pants. Now the entire world has to be naked body scanned to travel ?

#155 Devil's Advocate on 01.10.11 at 8:45 pm

#143 Mr. Lee on 01.10.11 at 3:30 pmnReason is becoming more of rare commodity as is demonstrated by the events that unfolded in Arizona, the comments on this blog and the Canadian housing market.nnReason has been replaced with mania, raw emotion and no sense of self control. Nut bars blow away people, gun control is fought on two extreme sides of the debate and a large portion of the populace is seduced be granite and ss at prices that would make a kingu2019s ransom blush with envy.nnSo in the absence of reason is it hard to fathom, house price collapses, market crashes, austerity, families being torn apart because they lived beyond their means and whack jobs whacking innocent people.n

nnThere is always reason as we each individually rationalize our own actions toward improving our personal existence as we seek for it to be. That is how the economy works, always has and forever will for as long as it matters anyway . There is no u201cabsence of reasonu201d only a changing reason as society is the sum of its constituents; family, community, country, world. nnChange is inevitable within in each life cycle. History may not repeat itself but it certainly does rhyme. Nothing is new. No good idea is original. Nothing begins and nothing ends, we just keep on keeping on. nnShit happens.Get used to it. Could be a lot worse and probably will be before you know it.nnu201cWhen people lose everything and have nothing left to lose, they lose itu201d Gerald Celenten

#156 Devil's Advocate on 01.10.11 at 4:54 pm

#143 Mr. Lee on 01.10.11 at 3:30 pm
Reason is becoming more of rare commodity as is demonstrated by the events that unfolded in Arizona, the comments on this blog and the Canadian housing market.

Reason has been replaced with mania, raw emotion and no sense of self control. Nut bars blow away people, gun control is fought on two extreme sides of the debate and a large portion of the populace is seduced be granite and ss at prices that would make a king’s ransom blush with envy.

So in the absence of reason is it hard to fathom, house price collapses, market crashes, austerity, families being torn apart because they lived beyond their means and whack jobs whacking innocent people.

There is always reason as we each individually rationalize our own actions toward improving our personal existence as we seek for it to be. That is how the economy works, always has and forever will for as long as it matters anyway . There is no “absence of reason” only a changing reason as society is the sum of its constituents; family, community, country, world.

Change is inevitable within in each life cycle. History may not repeat itself but it certainly does rhyme. Nothing is new. No good idea is original. Nothing begins and nothing ends, we just keep on keeping on.

Shit happens. Get used to it. Could be a lot worse and probably will be before you know it.

“When people lose everything and have nothing left to lose, they lose it” Gerald Celente

#157 LB on 01.10.11 at 4:58 pm

#147 Investors Friend

Agreed that risk should be calculated to market value over equity in real estate. However, I would go even further to argue that even if one had no mortgage, if real estate represented more than 25% of one’s net worth in all asset classes, it would be too much risk overall,especially in a declining real estate market.

#158 The American on 01.10.11 at 5:04 pm

The shooting of Gabby Giffords and those around her should not be one to poke fun at America’s gun policies and “crazies” as some would put it. Before I get there, I would like to point out the following:

Since 1989, Canada has had a total of 21 deaths created as a result of gun-related incidents in a total of 7 “spree” occurrences. Averaging 3 deaths per occurrence.

Since 1989, The U.S. has had a total of 185 deaths created as a result of gun-related incidents in a total of 89 “spree” occurrences. Averaging 2 deaths per occurrence.

Statistically speaking, the U.S. fares safer than Canada with respect to gun-related spree violence, in consideration to running population. So, I frankly do not care to read any delusional comments of the inferiority of safety within the U.S. or of the commentary of the superiority of Canada about its gun-control laws. That is absurdity and should not be used as a platform for political discussion. I consider this offensive and pathetic behavior, much like that which comes from a five year old child.

This was a senseless and hideous act, manned by a truly sick individual. Gun control or not, those who wish to commit crimes and hurt others ultimately will, regardless of the control laws that surround them. It is illegal not to register a gun in many states, the same as it is illegal to kill another human being. Those who wish not to register their gun and be in violation of the law, yet commit gun-related crimes clearly had no regard for the law to begin with. Therefore, regulation surrounding guns, chainsaws, knives, etc. have little to no effect on the overall outcome for those who have no respect for human life in the first place.

I too see absolutely no need for any human being to be in possession of a semi-automatic or automatic weapon. These are the weapons that should be outlawed all together and the penalties should be punitive and make one reconsider if he/she gets caught in possession of one (without consideration whether he/she had any intention of using it legally or illegally). Making a case to rid guns all together, however, is ludicrous.

This becomes more of an argument of the penalties surrounding the usage of a gun in an illegal fashion, as opposed to who registers his/her gun. The penalties must be strictly enforced and the punishment must be fierce for those who do operate with their weapons in an illegal fashion. This is where the system has failed.

#159 (low density) Sam on 01.10.11 at 5:17 pm

#52 Sea Wave on 01.10.11 at 1:49 am
A read of history suggests the likelihood of an eventual sizable banking crisis in Canada.
__________________
I wish I could agree with you … but judging from the amount of money the banks were able to squeeze out of the government, just by pointing south of the border, if there ever is a real threat, the major Canadian banks will NOT be the ones tthat will suffer for the problems the banks, Harper/Flaherty/Carney and CMHC have creatd.

Those named above will be the last ones to pay any price whatsoever.

#160 Stevermt on 01.10.11 at 10:13 pm

I agree with you if you’re referring to Liberal democratic societies which most of the nations in the West are. If you’re talking about Liberal vs Conservative, Democrat vs Republ., then you are delusional…Harper has been spending the last few years like every other Liberal democratic government anywhere..not like a true fiscal conservative..his policies on building more prisons and locking people up forever will break cost taxpayers dearly, especially when crime rates are falling nationwide.

I think your post was just a rant about Liberals.

#161 OttawaMike on 01.10.11 at 10:14 pm

I think I’m lost, can somebody direct me to the solid gold long gun registry evil federal reserve discussion forum please?

#162 Phil on 01.10.11 at 10:21 pm

The global disintigration is in full swing. Without sounding like a conspiracy theorist, methinks we are royally screwed. I have been watching the markets with an open mind for months, and, depending who you listen to, whether it be Garth’s calm and reassuring advice, or that “gonzo Max Keiser” as Garth calls him, it seems that, unless you are a nube or just simple, it appears to me to be a rigged game. The dizzying array of stock terms…longs, shorts, options, caps, etc, etc, mean squat to the average Joe lunchbox. without professional help, which by itself is why I’m presently under the scrutiny of that lovely entity CRA, is like walking through another mine field of uncertainty. Enormous amounts of wealth are wielded by the global banks to manipulate markets with millions of electronic transactions every hour. Insider trading, black pools, crooked hedge fund managers, forces not even dreamed of are all conspiring to suck the wealth from the middle class and poor , and transfer it to the ruling elites. Thats exactly what crushed the US economy, perhaps the Global economy. Just look at wall st. The managers are getting million dollar bonuses, while austerity and higher taxes are plaguing the citizens. The lamesteam media shows us only what they’re told…just look at the underground sources. Riots and police actions all over Europe. You have a better chance of seeing a Sasquatch in Canada, as get reliable and trust worthy news. And now our band of merry Harperites are raising taxes for the workers AGAIN, while giving their corporate buddies progressively lower tax rates, to make the rich richer, and the poor poorer. All the while, our debt clock is spinning so fast you could sharpen skates on it. My friends, we are being bled dry, an insidious slow death at the hands of our “leaders”. Don’t take my word for it, I’m just a shmo from nowhere…look at people like Rev Manning, G. Celente, and yes, Max Keiser. Open your eyes people, it’s a rigged game. Like DA said..more and more people are reaching their breaking point, which will in turn encroach further into our shrinking list of rights and liberties. Bottom line, do the best you can, be good people, someday, like history has taught us, the tyrants will be brought down by their own greed, and we can start over. BTW, am I ranting???? Maybe…perhaps you should be too. Remember the famous line by Chris Plummer in Network…”I’m as mad as hell, and I’m not going to take it any more”. Somewhere along each of our paths, that line will probably apply. Still looking for the truth…any suggestions. p

#163 Jeff Smith on 01.10.11 at 10:21 pm

>#32 specuskeptic on 01.10.11 at 12:36 am
>@#4 Jo
>“That loser who committed that pathetic crime should
>get capital punishment. No matter your views, violence
>is never an option.”
>Irony much?

Oh yeah, and what about all those who were wrongly accused and put behind bars for 20 years? Only to be exonerated later? Imagin if they were executed instead? If you love capital punishment so much why not go live in the Soviet or Cuba or something.

#164 Stevermt on 01.10.11 at 10:24 pm

A Black Swan event according to Taleb:

1.The event is a surprise (to the observer).
2.The event has a major impact
3.After the fact, the event is rationalized by hindsight, as if it could have been expected (e.g., the relevant data were available but not accounted for).

So I’m not so convinced that the 2008 financial crash was a black swan, because a number of folks predicted it.

#165 Utopia on 01.10.11 at 11:08 pm

113 Bridgepigeon..

I heard just today that there were no US dollars available in Saskatoon branches of the Scotia Bank.

No US Dollars at all……Nada…none…..

The person who told me also reported that he was told there was actually a three week backlog of orders which I was stunned to hear.

Seems Canadians are snapping up greenbacks as quick as they can on the assumption parity will not last. The theory here is that our grey-haired, Winnebego RV class of Southern bound octegenarians are taking advantage of what they see as a good buying opportunity.

Will keep you posted as I learn more.

#166 Vancouver_bear on 01.10.11 at 11:38 pm

And the unemployemtn rate in the best place on meth…….drum roll….. have risen during the busiest retail season of the year when a vast number of temp position opening just before Xmas. Welcome to the JOBLESS BC…. the best place on Earth?

http://www.cbc.ca/canada/british-columbia/story/2010/07/09/bc-unemployment-rate-drops.html

#167 Utopia on 01.10.11 at 11:41 pm

#125 Not Wondering Anymore.

I liked your points and questions and how you phrased them. I think that Garth is correct in his many past statements that holding cash is a way to lose buying power to inflation erosion while simultaneously losing the benefit of interest rate or dividend growth.

However, in a time like we are now experiencing that seems unpredicatable and discordant I firmly believe that there are some very good reasons to hold some amount of cash (on hand) and it should be a part of a comprehensive investment strategy.

Actually I also believe that keeping some amount of physical cash in a safe handy location is essential in the event that withdrawals from bank machines might not be possible.

This is not insane talk either. It has happened already and it has happened right here in Canada that ATM, credit card access and the banking system all failed simultaneously when the power went out.

For this reason there is always a place for actual cash.

Disclaimer: The preceding remarks are personal opinion and should not be contrued as investment advice. Always seek professional investment counselling before embarking on any new investment program.

#168 ottawa pete on 01.10.11 at 11:50 pm

See Peter Warburton’s “Debt and Delusion” if you can find a copy. This crisis was predicted a long time ago by many people.

#169 Two-thirds on 01.10.11 at 11:54 pm

“Simple. MF companies have the right to suspend redemptions, and will (and do) if too many people try to cash in. ETFs are traded on an exchange and therefore far more liquid. — Garth”

I have always wondered if liquidity under the circumstance above (i.e., “if too many people try to cash in”) is really possible.

In a mad rush to the exits, the only ones to escape unscathed are the first few out the door. If one had to sell part of a portfolio in a panicked environment, would’t it be extremely hard to do so?

Or in other words, for an “exchange” to happen, there have to be buyers, but what if everyone is trying to sell at the same time (flashback to Fall 2008-Sprig 2009) and few or none are buying?

Liquidity in a bidless environment; is it really possible?

#170 Utopia on 01.10.11 at 11:57 pm

#137 Dark Sad Person

Your hostility is absolutely over the top some days. What is it with you anyway? If you had any real self confidence you would just post your comments knowing that you were right and never have to attack any comment that ran contrary to your own.

Lighten up a little Dark

#171 Herb on 01.10.11 at 11:58 pm

What have we here, realpaul resurrected as Polson03, or just another neandercon troll strafing us with the usual Republican BS from its cab rank position?

What a relief to know that all of the problems of the developed countries of the world are due to Liberals and their liberal policies. How reassuring that this is known everywhere in “the mainstream of Canadian opinion” except Garth’s “tightly controlled blogspace”! How terrible to be consigned to the left of mainstream consensus-builders like Small Dead Animals!

#172 Alex on 01.10.11 at 11:59 pm

“Surging” HELOCs:

http://www.financialpost.com/news/Home+equity+loans+surge+twice+fast+mortgage+growth/4087788/story.html#ixzz1AgEGGYpc

#173 bridgepigeon on 01.11.11 at 12:00 am

One of the great war journalists of our time, he’s got some talks on YouTube, beautiful stuff…

#174 Utopia on 01.11.11 at 12:01 am

Right, like a jury of our peers. Who doesn’t like elections and contests. This new format is a huge surprise though but I already like what I see. Nice

#175 Junius on 01.11.11 at 12:01 am

Great article from the Financial Post on the misuse of Helocs. Shocking how much of the money is just for investing in the market!

Here is the link:
http://www.financialpost.com/news/Home+equity+loans+surge+twice+fast+mortgage+growth/4087788/story.html#ixzz1AgEGGYpc

#176 Tim on 01.11.11 at 12:03 am

Terrible incident in the states. Thanks to the NRA and the silly “right to bear arms” that and whack of Republicans are two reasons why I’d never live in the states. The top 1% received almost 80% of the wealth increase. Apparently, if they took the money from the 50 biggest hedge fund managers, they would have enough to hire back approx 600,000 teachers.

#177 dark sad person on 01.11.11 at 12:09 am

#147 The InvestorsFriend (Shawn Allen) on 01.10.11 at

For young people house value may be several multiples of their net worth and of course that means the house is a big risk. But they are young and if they have good jobs and education that is a risk they can (maybe) handle. If their net worth goes below zero they can work their way out of it.

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

Right as usual-
eg:
If they have a 400K mortgage today and in 5 years the house is valued at 100K or even zero-on the market and the mortgage is still at 350K and their wages have been cut by 50% they can simply work their way out of debt-
Brilliant-

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

#154 boomer62 on 01.10.11 at 4:41 pm

#137 dark sad person on 01.10.11 at 2:06 pm

My chiropractor assures me that what you describe is not possible.

For someone so boastful of their own success, you seem very angry. Try giving instead of taking. You might want to consider your stock market ‘killings’ were at the expense of others.

************
My reference to making money was to this anal comment-

**************
– lottery tickets are probably a better ‘investment’ than buying bullion, certainly better entertainment and,

– for those whom buy gold shares…read your prospectus’…now tell us what you have really purchased…did you buy tech shares in the late 1990s too?

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

My wins were at the expense of someone else?

awwwwwww–that mean thief DSP

My losses?
Who stole my money?
What do you say about that?

And one more thing-
PM’s have been a winner-10 years running-

Silver up 74% in 2009
$GSCI up 85% in 2009
Gold up 26% in 2009
$HUI up 42% in 2009

http://www.resourceinvestor.com/News/2010/1/Pages/Can-gold-and-silver-warrants-repeat-2009s-tripledigit-returns.aspx

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

Now-do you see why your statement sounds so ridiculous or was it as i suspect-just a cheap shot at the people who invested in a winning trade and you missed it-yet you ridicule those who didn’t miss it as if they were losers–
Anyone with a glass eye and a tin ass could have made money just buying and holding-
You made a statement on an economics blog-that you can’t back up-
Take your medicine-

#178 Utopia on 01.11.11 at 12:10 am

#152 TheBigLebowski

Buddy, I rarely miss your comments because you often have something interesting to say and I enjoy most of your posts. You are over the top on your post #152 today though. It does not even make sense in relation to the topic today or any of the prior posts.

What got under your skin all of a sudden?

#179 Two-thirds on 01.11.11 at 12:15 am

Re: Black swans, how about a “red” one?

“China preparing for armed conflict ‘in every direction’

China is preparing for conflict ‘in every direction’, the defence minister said on Wednesday in remarks that threaten to overshadow a visit to Beijing by his US counterpart next month.”

http://www.telegraph.co.uk/news/worldnews/asia/china/8229789/China-preparing-for-armed-conflict-in-every-direction.html

:(

#180 Another Albertan on 01.11.11 at 12:34 am

#173 –

Google the article from about a month ago (Wall Street Journal?) that describes how China has fully duplicated the Russian Sukhoi Su-27 fighter jet. Not only do they have the airframe, but the avionics, electronics, and the propulsion system…

Everyone else’s mileage may vary.

#181 dark sad person on 01.11.11 at 12:36 am

#172 Utopia on 01.11.11 at 12:10 am

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

Don’t tell me how to respond to comments-

Did you elect yourself board sheriff or what?

#182 boomer62 on 01.11.11 at 12:43 am

#171 dark sad person on 01.11.11 at 12:09 am

A clear conscience is usually the sign of a bad memory.

#183 Utopia on 01.11.11 at 12:52 am

#175 dark sad person
#172 Utopia on 01.11.11 at 12:10 am

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

Don’t tell me how to respond to comments-
Did you elect yourself board sheriff or what?
———————————————————-

That is a GREAT idea. Let’s have an election.

#184 Utopia on 01.11.11 at 1:20 am

#175 dark sad person responding idiotically to:
#172 Utopia

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

Don’t tell me how to respond to comments-
Did you elect yourself board sheriff or what?
———————————————————-

You really got me thinking Mr Dark. You know, Garth is a very busy person. Mrs Turner misses him a lot too I think. Maybe I will ask his permission to become one of the boards moderators when the new sytem finally becomes a reality.

Just so I can delete your idiotic posts!!

#185 GregW, Oakville on 01.11.11 at 11:57 am

Hi #163 Phil, Yes I’ve wondered about many of the same things. I’m afraid I’m not wise enough to give you an answers to your question, but I seem to keep seeing bits of it in Garth’s words, so I keep coming back to read them. Hope you have a good day, I’m heading outside for another walk.