Hoovered

Roxanne would be a princess in a normal town. No debt. Quarter of a million in the bank. Thirtysomething. Hot. Making $250,000 a year along with her BF. She’d have it all.

But Roxy lives in a city where the average SFH costs a million and Global TV keeps warning people about the dangers of falling Asians. “We’ve given up trying to buy a piece of real estate in this crazy place,” she says. “But we need to find a home for all this money we’ve saved.”

It’s a popular problem for princesses these days. Inflation is 3% yet bank accounts pay half that. Stock markets plunge or soar daily. Gold just laid the biggest egg since 1983. Mutual funds have all the appeal of Duran Duran. And who the hell can understand the bond market?

In fact, what comes next seems to be perplexing a lot of people. Even the geniuses in Ottawa. The prime minister has summoned Brother Carney and his trusty elf, F, to his office for a Tuesday afternoon meeting (rare) on what to do.

The debate is stark. Will Harper keep preaching austerity, take a leaf from the Tea Party puritans, and cut government spending as we trundle into another recession? Or will the feds try to counter falling growth, rising unemployment and wavering confidence with more government stimulus? Will F tell Carney to drop interest rates as much as possible to make Global BC happy, and keep horny young couples lined up outside the Mattamy Homes in Milton? Will Ottawa encourage people to borrow even more to rescue the economy now, nicely screwing the future? Or will the PM  just turn the tap off, and damn the consequences?

Word has it Harper and the F want less. Carney wants more. And some people are worrying the Tea Partiers will win.

Like economist Sherry Cooper. For a real estate pumper, she nailed this one: “The misplaced belief that the road to economic prosperity is paved by near-term fiscal tightening, as espoused by our own Prime Minister Stephen Harper and British Prime Minister David Cameron last week, shows we have learned nothing from Herbert Hoover’s response to the Great Depression,” she wrote BMO clients this week. “We are in danger of repeating the deflationary policies that caused the 1929 stock market crash and the Great Depression.”

And, your highness Roxy, there’s little doubt deflation is already stalking the land – at least the turf just across the border. New home sales in the States have crashed again – bad news for Canadians who sell lumber. The average new home price crumbed another 7.7% in the past year. Resale prices are 5.1% lower. And here’s an interesting number – 29% of all American real estate deals are now in cash. No financing. You know what that means? Right – no debt.

But I digress.

“We went to visit a ‘fee only’ financial advisor who basically suggested spreading our savings into I-shares ETFs,” Roxanne writes. “ETF’s are touted as being simplistic and save havens – It sounds strange but I would feel more confident about putting our money in housing, purely as I understand the economics (although not in this crazy town, so don’t worry we are not going to be getting into the Vancouver Real Estate market any time soon), but with the world’s financial markets in turmoil again, is now the time to get in?  The logic in me says “yes” given that prices are low, but the “emotional side” is wavering! We are in our mid 30’s so have a long work life ahead of us (joy!) so should we get in and see what happens?? Are ETF’s the safe haven, simplistic investing tools that everyone seems to suggest?”

Good questions, princess. ETFs, or exchange traded funds are like mutual funds but without an overpaid manager. So they’re cheap to buy and effective to own. They’re typically made up of scores of companies (never buy the derivative or leveraged kind), pass through dividends and provide tons of diversification. So the idea is to get growth, with far less volatility than owning individual stocks. All good stuff.

Are they simplistic and a safe haven? Of course not. There are hundreds of ETFs to choose from these days, covering everything from bonds to preferreds, emerging markets, various sectors, large caps or micro companies. Some are boring and relatively risk-free, some extreme.

But ETFs are just a way of packaging financial assets, so buying ten of them is not exactly a strategy. More important is what you’re trying to accomplish, and the times in which we live. Strikes me that a high-flying couple in the mid-thirties would not be looking for a “safe haven” as much as long-term growth. After all, if you get an average of 7% over two decades, you’ll have $1 million before you’re 55. That could double by age 65 – even without investing any new money.

But isn’t investing risky? Hmm. Compared to what? I’d say putting a mill into a Vancouver bung right now constitutes unadulterated risk. There is no interest, no dividends, no net income and a 100% chance of loss.

In comparison, large amounts of risk have just come off the table on financial markets. A young couple should be stoked to take advantage of that, but at the same time ensuring you protect yourself by getting balance. That means corporate and government bonds, real return and high yield bonds plus preferreds, as well as REITs, PMs, and ETFs – covering key sectors, Canadian, US and international economies, including large, medium and microcaps.

This is not an easy thing to construct, even for royalty. It’s why advisors crawled out of the primordial muck. Sounds like you should shop around for a guy who does more than throw iShares brochures at ya.

So, Roxy, would I invest my money at a time like this?

In a heartbeat, m’lady.

195 comments ↓

#1 AG Sage on 09.26.11 at 9:05 pm

One of the ETFs I own is run by Deutsche Bank. In the fine print it says, if DB goes down, the ETF is wiped out. In these times, something to consider . . . that is, diversifying across who runs the fund and what else they do for business.

#2 mississaugasold on 09.26.11 at 9:17 pm

This past week has taught me SO MUCH re: the market. Love the recent posts.

Thank you.

#3 WI BOOMER on 09.26.11 at 9:21 pm

Yes, that’s why I stroked a cheque for $900 Sat morning to my favorite brokerage. Wow some of those funds were nearly 25% OFF. Ask me later if it was an error, but I’ll probably be smiling. Next time maybe Gold if it falls below its next level of support. I have never owned an ínvestment that is just designed to sit there, and gains value on fear. At least vultched RE with a decent renter earns a decent return.

#4 Moneta on 09.26.11 at 9:24 pm

I did not know that there were dark channels through which public servants are able to siphon off private sector profits to fund their pension plans. Please let us know how this is done so we can get it changed
————-
Let’s say you’re a public servant with a guaranteed pension. Your pension is invested 60% in equities most traded on TSX.

Company executives, to keep shares and dividends up, cut costs. Pension fund gains, public servants are happy.

Unfortunately, to cut costs company executives are keeping employee wages low and cutting pensions. So on top of paying taxes to prop up underfunded plans, they are taking in lower wages and benefits that better the public pensions.

#5 KRMCD on 09.26.11 at 9:34 pm

ETF’s can be a great way to diversify your entry into the market, although they are usually used only for specific place in a portfolio, rather than having ETF’s as the portfolio itself.

I am using the iShares China ETF to get Asian exposure, where this would normally not be efficient to directly from Australia.

One of the things to be careful of with ETF’s is that they can have exposure to foreign exchange changes. Eg, the iShares China is in US currency, and therefore has lost a significant amount in $AUD over the past 18 months, although the underlying investments have performed relatively well.

#6 Ludwig Von Mises on 09.26.11 at 9:41 pm

We need someone of the caliber of the late great Canadian economist John Kenneth Galbraith at the helm to get out this mess! Barring that, Garth Turner back in Ottawa to talk to Carney and company on what to do with this mess.

#7 Krista on 09.26.11 at 9:45 pm

Krista here, the ‘greedy, fearful’ reader Garth profiled a couple of days ago. In the interest of what’s true, I thought I’d drop in to correct Garth on his bold assumption. Twasn’t greed wot did me in during the tech crash, but the good counsel of a paid advisor. A paid advisor who had taken me on as a client at the age of 12, and who had been doing my bidding with power of attorney.

See, when the tech crash happened folks, I was but a whelp still in University (arts, not economics). And though I may have been guilty of neglecting what my paid advisor had invested my funds in, I was certainly not guilty of greed. Youth, yes. Naivety, definitely.

But, never ruin a good story with the details, right Garth ;)

On the other hand, am I afraid? Not as much as the BBC, the CBC and their government patrons would like:

http://www.youtube.com/watch?v=aC19fEqR5bA

Grow a little skin, Krista. You blame too much. BTW, this guy sure has a lot of credibility. — Garth

#8 Steevo on 09.26.11 at 9:50 pm

There is a dramatic change in the air – everyday people are frightened. I haven’t posted too many things here over the past few years – but here goes.

The fear may be a result of the recent stock market declines; however, the fear I’m seeing is at the retail store owner level (which is obviously related but another story).

Something is up and people are seeing a dramatic downturn in spending.

(1) The people that sell me firewood are ecstatic that I’ve called them back. They are even happier when I offer them $40 to stack it – when they only asked for $20/$30?!?! (ya, I’m stupid but it’s a lot of wood – I’m not going to vultch (sp?) someone for honest labour)

(2) I’ve been the only person in my local dry cleaner three times this week – at different times of the day. “Oh, we are so happy to see you!”?!?!?!?

(3) My neighbour, a confident med-size business owner, is asking me if I think that there will be more stimulus money?!?! (everything was totally fine 4 months ago)

(4) My local Druxy’s (in the financial district of Toronto) used to have six or seven people in line for a bagel/toast in the morn. I’m the only one now.

I live in an up-scale Toronto suburb….something has changed.

Well, I’m glad I bought the Bear Gold ETF. My predictions as follows:

(a) Volatility rules – if there is a major stimulus/bailout package introduced in Europe (or elsewhere), stock markets and gold will head higher for a time.

(b) If no stimulus, you better hold onto that bronco. It’s going to be rough.

This is going to be a tough decade. Peace to all.

#9 Smoking Man on 09.26.11 at 10:00 pm

Success what is it? That is the question?

A kid fascinated by worms, as a hobby he picks them, grows up and becomes a professional worm picker, happy as hell..

You’re the CEO of a bank you hate your jobs but you can’t resist the 7million a year, and people kissing your ass all day long, while knowing they are harboring contempt and jealousy. Ya you have the Car, the boat, the house and that fn wife………….

What is my drunken point, hum……………..?

You go to school with a young hard drive on your shoulders, you are taught to memorize regurgitate and obey, so that one day you can make your mark and be a success doing something you hate but its ok you have it all.

Kids when I had my mfg company was making anywhere from 6 to 12 k a day. Hated it.

Picked up a skill learned to program, had my company as productive as humanly possible. Sold it and retired at 42.

As a hobby coder I went pro- although 1200k a day may make most off you go wow, it’s poverty wages. Vs what I make trading or mfg’ing So why do I do it……Why do I take a train down town with the peasants……………

I’m f-en demented that’s why, Nothing gives me a bigger chabo than making a PHD math dudes go holy fk how did you do that……………where did you learn that….

You see we are all on a road to maggot food, we have but a blink in the eye of time to enjoy ourselves, eat, drink, smoke, and ladies of the night, and be marry……….

Do what you want to do, never be afraid of being judged cause the day will come fast when you are on your death bed. And when that day comes while on your back looking at the crack in the ceiling all you want to say is

Ya baby it’s been fun.

I Toast to all the worm pickers of the world……………..

Not going to be posting much righting a book on writing……….ba hahahahahahahha

#10 Robert Dudek on 09.26.11 at 10:00 pm

Well, I’m glad I bought the Bear Gold ETF.

You won’t be glad if you hold it for a few more months.

Every time there is a correction in gold the gold bears come out and say “I told you so”. It makes me laugh – can people really be that blind? QE to infinity!

#11 renters rule on 09.26.11 at 10:01 pm

Hey Krista — details seem to be your shortcoming!

The Economics Dept is IN the Faculty of Arts…. ;-)

#12 East Van on 09.26.11 at 10:02 pm

Trader on the BBC says Eurozone Market will crash :

http://www.youtube.com/watch?v=aC19fEqR5bA

Read his web site. He’s a showboat looking for speaking gigs. — Garth

#13 TurnerNation on 09.26.11 at 10:06 pm

This is not a Boomer Singles Blog! ;)

#14 Steevo on 09.26.11 at 10:10 pm

Robert Dudek – have fun.

#15 Keeping the Faith on 09.26.11 at 10:13 pm

I said to my girlfriend on the weekend, “Things in real estate must really be starting to change because Garth is now posting daily, he’s almost gone Manic” LOL

She just smiled. She silently thanks you every day since selling her place 5 months ago to rent and missing the impending real estate drop. It was your blog that finally made her listen to her inner voice that something isn’t right and it allowed her to get out with a healthy profit after only a few years of ownership.
We now talk about ‘work optional’ plans that are only a short 10 years away with healthy monthly investment contributions, well balanced portfolios with generous bond representations and a positive outlook on life.

Thanks for another Great Post Garth!

#16 BPOE on 09.26.11 at 10:15 pm

Roxy made a UFD. Unrecoverable Financial Decision. Not buying years ago she now must pay for her sins on a meagre salary. Not meagre by Canadian standards but certainly by the standards of the creme de la creme of this fair City. That’s why a house on the west side will cost you a cool 2 mill plus and not 1 million. In fact people who make 250k would never consider living east of Cambie street. So what to do. Well first off get yourself into a house because a 250k a year Canadian ain’t renting for 1000k a month more like 2500k. Multiply that by a few decades and you get the picture. Don’t forget the shame factor. 250k income earners friends generally make the same and they ain’t renting. Suck it up by the house and the rest goes into gold.

#17 Steevo on 09.26.11 at 10:15 pm

Robert Dudek – “Every time” there is a correction in gold the gold bears come out and say “I told you so”. It makes me laugh – can people really be that blind? QE to infinity!

– You are obviously the blind one (long in gold).

#18 T.O. Bubble Boy on 09.26.11 at 10:17 pm

The Tea Party already won… at least the Windsor, Ontario rock band from 1995 with the $1M website:

http://www.thestar.com/business/article/1057015–stakes-are-high-in-online-name-game

#19 len on 09.26.11 at 10:20 pm

I had a question for the gang. The warning from the bank regulators regarding poor underwriting standards because of margin squeeze. Now, in Canada the banks have very cozy relationships with the government and it is not unreasonable to assume that the regulators do the bidding for whoever makes the law – right – the lawmakers.
And given the very few relationships (like 8?) they have to manage, why a public warning? Don’t they usually just call the banks in to the little table for tea or something?

#20 OH Boy!!! on 09.26.11 at 10:21 pm

http://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded

#21 Herb on 09.26.11 at 10:22 pm

#4 Moneta,

I’m have a problem trying to follow your logic.

So public service pension funds invest in the stock market and gain from cost-cutting improvements and the distribution of higher profits. So does every private pension fund and individual jackass who invests in the stock market.

It may be great political ideology to blame public pensions for low private wages and pensions, but it will take better facts and logic to prove the point.

#22 April on 09.26.11 at 10:23 pm

From Yesterdays post: How not to Invest.
Bill Gable #153 – Good for you. I’ll sign your letter and mail it in too.

#23 disciple on 09.26.11 at 10:23 pm

That homeless guy has shinier shoes than me, life’s not fair, man.
I just googled the meaning of hoover. You are either one sick puppy…or are beginning your trek to the inner universe:

Hoovered
Successfully blackmailed back into a romantic relationship by someone who used serious threats of suicide, self-harm, or threats of false criminal accusations. This act is often associated with people suffering from Borderline Personality Disorder and other personality disorders (see hoover)

#24 T.O. Bubble Boy on 09.26.11 at 10:26 pm

How’s the Bear Gold ETF doing tonight?

Pre-Market shows gold up 2.3%, Silver up 3.4%:
http://www.cnbc.com/id/17689937

(yes, it was that predictable)

#25 Taipan on 09.26.11 at 10:30 pm

Hell yeah drop interest rates!

But if you do that, require 20% deposit for housing and a maximum term of 25 years.

The issue is that too much money has been used to fuel speculative assets.

That will continue to happen unless you put in place constraints to direct that capital to productive assets.

#26 len on 09.26.11 at 10:33 pm

Here is the link to the article Watchdog warns banks about easy credit

http://www.theglobeandmail.com/globe-investor/osfi-warns-banks-on-lending/article2180290/

#27 Tim on 09.26.11 at 10:36 pm

Of course Harper will preach austerity, anything to reduce the size of government. The mean-spirited PM will do the opposite of what should be done. He’ll turn off the taps when people and companies need a boost. Just like the Europeans are doing. Cutting off any chance of recovery by withdrawing stimulus. Of course he tries to take credit for Canada’s performance, but he has done virtually nothing to deserve credit. Commodity prices have saved our asses. Paul Martin brought things under control and Harper has been lucky to walk into an econony that was well managed. What has he done for the economy? The home renno tax credit? lol by encouraging people to spend 30 grand on their kitchens so they can have granite counter tops? How does this make us more competitive? What has he done to improve education or encourage research or innovation? He’s done his best to destroy it by encouraging rampant speculation in real estate.

#28 Zamphir on 09.26.11 at 10:37 pm

To keep your ETF investing simple, and diversified you only need 3.

http://www.theglobeandmail.com/globe-investor/investment-ideas/the-three-dimensional-portfolio/article1232112/

#29 Krista on 09.26.11 at 10:39 pm

@garth – you miss the point, entirely.

#30 Kilby on 09.26.11 at 10:42 pm

#4 Moneta

What are you talking about? “dark channels” I would love to get in on them. Maybe as an ex MP, Garth is swimming in one?

#31 JSS on 09.26.11 at 10:48 pm

Check out Claymore Canadian Financial Monthly Income ETF.

Trades under “FIE.A” on the TSX.

$6.20/share
7.62% dividend
monthly distribution

Made up of the big 5 Canadian banks, RioCan, Power company, Brookfield Asset Mgmt, Great West Life, etc.

#32 Nathan in Van on 09.26.11 at 10:51 pm

I really hope that one of these days Garth outs whoever this BPOE scumbag really is.

#33 Krista on 09.26.11 at 10:54 pm

@ Garth – you missed my point entirely. That being just because someone has a platform and calls themself an expert, doesn’t make it so.

@ renters rule – thanks for the info smothered in sarcasm. It actually explains a lot about the current conditions. I’m sure I’m not the only one who assumed economics had something to do with math.

#34 Boombust on 09.26.11 at 10:56 pm

“Barring that, Garth Turner back in Ottawa…”

Only if he doesn’t run as a Tory…

Rhino. — Garth

#35 Waterloo Resident on 09.26.11 at 10:58 pm

For those of you who are shorting gold , or would like an insider tip on when to buy gold, take a look at these charts:

http://stockcharts.com/h-sc/ui?s=HBU.TO&p=D&yr=3&mn=0&dy=0&id=p12162736285

http://stockcharts.com/h-sc/ui?s=UGL&p=D&yr=3&mn=0&dy=0&id=p76617469088

To me it looks as if the price of HBU.TO ( $CDN ) and UGL ( $USD ) will start to rise pretty soon, so maybe it might be time to by, soon, like maybe near the middle of this week?

#36 John on 09.26.11 at 11:03 pm

I used to like Duran Duran.

#37 Onemorething on 09.26.11 at 11:05 pm

Sherry Cooper blows with the wind! When this MS economist starts talking this way the gig was up so 12 months ago for RE!

Make sure your ETF is trading in the right currency!

#38 Snowboid on 09.26.11 at 11:14 pm

#17 BPOE on 09.26.11 at 10:15 pm…

Practicing for your set at ‘Yuk Yuks’, right?

#39 Alex on 09.26.11 at 11:19 pm

Damn. Garth, does anyone write you these days who *doesn’t* make north of $100K annually?

It’s getting awfully difficult identifying with blog stories when those stories focus on folks just raking in the dough. $250 large a year? Geez, we should all be in such quandaries.

#40 Honas Wagner on 09.26.11 at 11:21 pm

“That means corporate and government bonds, real return and high yield bonds”

There are some that think the only bonds that belong in your portfolio are short term government bonds: a) because you capture most of the yield curve, b) because they are less sensitive to interest rate moves, c) because default risk is low (with apologies to Greek government bond holders). The theory is that an efficient portfolio is one that has a mix of short bonds for safety and stocks for growth, with stocks spread about between small, large, value, international and domestic. (If you want to make things interesting, throw in REITs for real estate exposure, throw in gold due to low correlation with other asset classes. Real return bonds can be interesting, but at current prices perhaps not.) Garth, what say ye? Why fiddle with the corporates?

Yield. — Garth

#41 westcanguy on 09.26.11 at 11:28 pm

Would you be entertained by widespread want and sorrow in your own community? — Garth
___________________________________________

No Garth….. It wouldn’t be any more entertaining then the widespread want, greed and sense of entitlement we’ve all witnessed over the past years. I’m sure you understand that we all have to pay to play…for every action there is a reaction..blah, blah, blah….and it’s time to pay now.
Kicking the can down the road isn’t going to get us out of this. The sooner the shit hits the fan, the sooner we get back to sanity.
Some will barely notice it. Some will have difficulty but suck it up and other will lose everything..or most everything. Get on with it and lets get it over with.

The Tea Party whackjobiness is alive and well here today. Simple minds adore simple solutions. — Garth

#42 Ryan on 09.26.11 at 11:28 pm

Roxy should move. Only sissies do not consider this option. Vancouver is nothing special. No excuses, load up the U-Haul

#43 Midas on 09.26.11 at 11:35 pm

Will the USA make owning gold illegal ?

#44 Andrew on 09.26.11 at 11:35 pm

#9

“Would you be entertained by widespread want and sorrow in your own community? — Garth”

Garth, Garth, Garth… When society lives on borrowed wealth for an entire generation, future misery is unavoidable; it’s simple arithmetic. I will never understand the mentality of people who believe that a society that got itself into a financial crisis by spending borrowed money on home renovations and bigscreen TVs can get itself out of the crisis with even more borrowing and spending.

Consuming gives us a prosperous present, but not a prosperous future. Production gives us a prosperous future. It just blows my mind that the vast majority of Canadian economists completely disagree with this.

Read the comment I responded to. There is no solution in creating hardship for most in a voting democracy, only far more problems. — Garth

#45 JohnnyBravo on 09.26.11 at 11:37 pm

If the economy does not grow fast enough to outpace the rate of debt expansion, all the stimulus in the world will do little bu devalue the currency.

In order to service debt in the aggregate (let alone retire debt), you need real wealth. If that were not true, the government could just send everyone a million dollars and tell them to go nuts spending and paying down debt. The economy would burst wide open for a while, but in short order a bag of milk would cost about $1,000 . Then once the money is spent, the economy will crash harder than ever. See, you can’t just spend your way to prosperity. You have to earn it.

Look at the US. Since about 2008: tax rebates, cash-for-clunkers, home tax credits, payroll tax credits, umemployment benefit extensions, “food stamps”, tax cut extensions, ZIRP, TARP, TALF, QE1, QE2, Operation Twist, and on and on and on… What did they get? No jobs and 45 million or so in poverty.

This is giving Keynes a bad name. But people forget that Keynes never said the government should just spend and spend and spend until some of the money you throw sticks to the wall. Keynes prescribed that in good economic times the government should save up (like, you know for a rainy day) and then use the extra cash to step in and create demand when demand/spending in the real economy shrinks.

But the Western world is in a balance sheet recession. We need to repair the balance sheet before we can get on with the great economic times ahead. That means somehow getting rid of enough debt (much of it bad) to repair the balance sheet.

What they have been doing is spreading the pain by devaluing the currency against a deflating debt bubble. So money is simultaneously being destroyed and created at alarming rates. The result is real costs for stuff go up, while debt financed assets (read houses) go down. If the economy does not grow (cue the US) they can print/borrow all the money in the world, it won’t help.

It’s time to stop pretending. The piper is losing patience. Or do you want to become Japan where deflating old ladies became day traders just to try and survive in a desperate search for yield and income?

Cheap money has already turned nations of somewhat prudent savers into desperate gamblers, all looking for a score, not to get rich, but just to keep from falling behind. First of all, there is not enough wealth to provide everyone with the returns we need. But more importantly, when a nation needs “stimulus” just to stay afloat, the ship is already sunk.

Time to build a new ship?

#46 Soylent Green is People on 09.26.11 at 11:47 pm

So when someone deeply familiar with the collapse of the Soviet Union writes about how the States is headed in the same direction, we might wish to pay attention. Even greater cause for concern is that he has been doing so since 2005, and his predictions have been proving true at alarming accuracy. That, combined with a crushing national debt hovering over Washington D.C., means there is a prescient need for people to hear from those experienced with “superpower collapse.”

Dmitry Orlov writes not for fame or fortune, but to provide a book with which you can smack your friends across the head when they state, “No one could have seen this coming.” He moved with his family from the USSR to the U.S. as a kid, but his career allowed many opportunities to travel back home and catch glimpses of growing collapse. Though the USSR had been falling apart slowly, it wasn’t until Yeltsin uttered the words “Former Soviet Union” that it seemed to happen all at once. The world’s first superpower collapsed because its founding myths of technological progress and “bread for all” had failed to match reality.

http://cluborlov.blogspot.com/

……………………………………

Reinventing Collapse by Dmitry Orlov
Share your recipe for Superpower Collapse Soup

http://www.newsociety.com/forums/Reinventing-Collapse-by-Dmitry-Orlov
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#47 Victoria Tea Party on 09.26.11 at 11:48 pm

THINGS ARE STARTING TO ROLL IN AMERICA’S NASCENT WINTER OF DISCONTENT

HISTORY IS HAPPENING NOW (listen up here, #9 Conflicted Pumper)

To start, I refer to some prescient lines from Buffalo Springfield’s song written in 1970…”Somethin’s happenin’ here; it ain’t exactly clear; there’s a man with a gun over there…”

That something, in 2011, is the ongoing anti-US banker protest on Wall Street and environs.

And on Monday night it got a zillion bucks worth of free PR from US filmmaker Michael Moore guesting on CNN’s Piers Morgan show (as I mentioned in a earlier posting, on Monday, this demo has legs).

During the program, Morgan’s producers ran some video of Moore talking to those protestors moments before he arrived in the studio for the live session.

History, generated by 2008’s financial debacle, is being NOW being made by thousands of ordinary Americans. The TV documentaries and the commentaries having seemingly run their course, the average Yank is starting to move. So watch out! This train’s startin’ to roll, Pilgrim!

“Gonna spread across the country…this is gonna grow,” was Moore’s assessment of the potential reach of this so-far two-week long protest.

The young people there, “have come out to reclaim their lives” now that they’re in hock for decades because of college tuition fees and no jobs to show for all that sweat.

Sensing the nation-wide potential effects, Moore added, the system “can just put the boot down on the necks” of people for “so long.”

He said there is “no accountability” amongst those in charge on Wall Street. “We got so lost” during the recent age of greed, he observed. Of course we did.

GOLD BUG SPEAKS

When dealing with history, #9, gold always shows up for the show.

So, while this demo starts its national trek, well-known capitalist and gold bug Dave Galland has this to say about the future of our Western industrial debt-encrusted fiat-based currency system, in his blog:

“…Present day – Sovereign debt crisis. Desperate, debt-laden governments around the globe – the bulk of their reserves composed of fiat US dollars and euros at risk of going up in smoke – turn to the only thing they know, printing more money and issuing yet more debt. The global monetary system cracks and heads toward failure with no workable alternative on the horizon…

…Social unrest spreads, with the public paradoxically demanding that governments do more, not less…

…As the monetary system moves inexorably toward…collapse, the results will be catastrophic for the unprepared…the collapse of a monetary system doesn’t happen in a flash. It is a progression (he suggests buying gold! Mais oui!).

YESTERDAY’S HISTORY, BTW

#9. What brought the world out of the Great Depression was WW2, nothing more, nothing less. Governments had by 1939 so gummed up their economies that there was simply no way out.

We can’t afford a similar violent remedy to our current malaise. The gold bugs know this; the Wall Street protestors know this. And the rest of us are beginning to know this, too.

TUESDAY’S OTTAWA MEETING

In rendering decisions that could be viewed as being historic, Mssrs. Harper, Flaherty and Carney had better be on the ball.

This could be one of those wide-viewed historic Churchillian moments, or a more timid Chamberlain-style “peace in our time” ill-conceived kind of disasters.

A wrong move by those Ottawa laddies in that conflab and a lot of Canadians will be out protesting one day, too.

BTW, is there an ETF to insulate against total economic collapse? I’m thinking some bright fellow in downtown Europe might be tinkering a bit here and a bit there right about now.

Europe could be the first into this latest historic cauldron, couldn’t it?

It’s been there before! For history tells me so!

#48 Burnt Norton on 09.26.11 at 11:53 pm

Ya know, I wouldn’t want to pre-judge someone I haven’t met but that dude “praying” for a crash / recession / depression, well I bet if I ever met him I’d find him to be a scumbag.

#49 Onthesidelines on 09.26.11 at 11:53 pm

To #1 AG Sage

My concern exactly. An ETF is merely a unit of value issued by a particular financial. When the financial goes under because of whatever, your ETF is worth nothing.

Read the fine print folks. A govenrment bond ETF is only as secure as the financial service provider that issues it.

Better just buy the bonds themselves, methinks.

Your comments apply only to derivative ETFs, which nobody should buy. You need to learn more. — Garth

#50 Westernman on 09.26.11 at 11:57 pm

Regarding the post by Krista

Want to know why western society is going downhill like a highballing frieght train? Look no further than her post… WAY too many princesses like Krista getting college educated in ” Arts ” and then carring this Walt Disney view of the world into the voting booth. When you let overgrown 10 year olds like this start calling the shots you know your society is doomed.

#51 Nostradamus Le Mad Vlad on 09.27.11 at 12:11 am


Is ‘Hoovered’ a term used to represent Herbert Hoover? Seems to have been around for GD1.

My standard response for Roxanne, so I’m not gonna bother.

“. . . lives in a city . . .” — Men are from Mars, Women are from Pluto and Hongvouver is from Andromeda B.

“. . . all the appeal of Duran Duran.” — Great band, and like the economy, they’ve Come Undone, live in Poland. Great bass and rhythm.

“In fact, what comes next seems to be perplexing a lot of people.” — Fool ’em once (9-11). That worked okay, so continue fooling dumb sheeple.

Yep, without question I’d do the same (if I had any) — take a lump sum, invest it and get a nice monthly income. Screw owning, all the costs and hassle involved. Then again, I’m old and know diddly squat.
*
#8 Steevo — Good to hear from someone who is in the trenches. Keep ’em coming!
*
Mongolia The words copper and gold stand out; Politicos Ohhh to squander taxpayers’ money foolishly; Spending Money like it’s going outta style. President Terminator? Gold -20% in Sept. and 2008 All Over Again Except it’s the Eurozone that’s kaput (NAmerica follows).

Race To The Bottom of the Dung Mountain; Banxter’s Apocalypse At least we’re all in the same boat; Oz Mtge. stress relief and International Tensions soar. We ain’t seen nuttin’ yet; UBS May be on to something here; Post Paradise Not sure where Paradise is located; Recessions Are they born or made, and do they morph into full-blown depressions?

Doomsday On Hold Vancouver was last seen on Comet Elenin, which has now disappeared; Dog and Sheep This is what sheeple evolve into (strange but troo); Surfdog Better than being a hotdog! Soccer Player scores with a header, from inside his own half (clip in); Main thing is: Who does this benefit? China – Russia Nothing like being prepared because of US – Pakistan War? 1:53 clip BP wants back in the GoM. Is this because Russia tossed them outta the Arctic deal?

Fukushima No one knows the radiation levels, machine or man, and this; Canary Islands Shake ‘n’ Bake time; Govt. Gobbledeegook ObamaCare doesn’t care; Missile Shield Iran – China – Russia, It was bound to happen. Look for them to invite Pakistan, maybe a few others.

#52 Randis on 09.27.11 at 12:23 am

My jaw dropped after seeing that clip from your link, Garth. I smell someone is cooking up more fear so that he can benefit from it … surely a lot of credibility, like BPOE …

Garth, I gave up on this uphill ride in telling people about the troubled future of RE. I mean, when your sister-in-law is pumping it to the mother-in-law hoping the mom would buy something for her AND mom gives in and the whole family started to ignore you in conversation because you speak of a contrarary voice, you know the battle is lost.

#53 Carp on 09.27.11 at 12:36 am

AG Sage: Deutsche Bank is on the “to big to fail” list and ranked at the top followed by Goldman Sachs and JPMorgan Chase .. Stop worrying or start buying guns and generators.

#54 Derek R on 09.27.11 at 12:54 am

It’s possible to keep H, F and C happy all at the same time: it’s just not easy. H & F want balanced budgets while C wants stimulus. Are these mutually exclusive? Not necessarily. It’s possible to stimulate without running a deficit provided that you combine the right tax with the right subsidy.

The trick is to make sure that you’re handing out the subsidy to one group of people but taxing a different group who need the first group. So for instance issue a quantity of cash to women and tax men by the same amount, or issue cash to all residents and tax banks by the same amount: that sort of thing. Basically the taxed group has to have something that the subsidised group wants. Any split of that kind will lead to an increase in economic activity without breaking the government piggy bank.

Of course the drawback to that kind of stimulus is that the taxed group is going to scream “Unfair!”, so it’s important to pick the groups so that you subsidise as many people as possible and tax as few as you can.

My favourite tax+subsidy combo would be to give a subsidy to every resident over the age of 18 in the form of a tax rebate to those who pay tax plus the difference in cash to anyone who didn’t pay enough tax to make use of the full rebate. I would balance that with a tax on land value to take the money back out of circulation to prevent inflation. However rather than taxing the landowner the whole amount, I would split the burden between the landowner and the bank where there was a mortgage involved so that the landowner was only charged according to the amount of equity in the property and the bank paid the remainder from its interest on the loan. That way the people who have barely any equity or are underwater won’t drown in debt. In fact they should be better off. Moreover the majority of Canadians should come out ahead under a stimulus like that.

Fact is that H, F & C might not like my combo — you may not like it — but as I said earlier other deficit-free stimulus combos can be designed that may be more to your liking. And there’s little doubt that Canada’s going to need one going forward if we want to avoid disaster for ordinary Canadians.

#55 timo on 09.27.11 at 1:01 am

http://www.cbc.ca/checkup/main-blog/2011/09/25/can-canada-avoid-the-economic-storm-looming-over-europe-and-the-us/

The looming economic storm in Europe threatens to envelop the world and push it back into recession.

interesting radio .

#56 vyw on 09.27.11 at 1:07 am

Roxanne should rent a nice place for 3 years, buy a bond ETF ie. TLT, hold 50% cash, and save at least 50% of earnings.

Commodity prices are falling, gold is correcting – will likely overshoot and she can buy maybe 5% on the way up.

VYR houses may not have topped yet. But if credit freezes up or demand for credit dries up as demand falls or if banks decide not to lend, then prices will start to fall, followed by a bear rally, and another fall – as much as 50%, I would say. However, detached homes in choice neighbourhoods will be in demand. Don’t buy a condo.

Can Roxanne live with buying a house for $1 million, watching it top at $1.2, then fall to 900K, then bear rally to $1.0, then fall to $800. Or would she rather have peace of mind of rent and wait it out for say, 3 years. Oh, and the rent paint over 3 years would be 1/20 of the house price or lower.

#57 shanks on 09.27.11 at 1:14 am

reality son… glad im not on facebook.
this one’s for you Vlad (and proper apostrophy is for Garth)
http://www.bbc.co.uk/news/magazine-15069858

#58 Mr. Vmax on 09.27.11 at 1:20 am

What thirty something makes 250K/year…doing what? BS!!!

#59 EJ on 09.27.11 at 1:22 am

So Sherry Cooper is yet another bankonomist who thinks the road to prosperity is reached through the spending of money that we don’t have. Borrow your way out of a debt problem. Typical. None of these people learned a damned thing from the Great Depression, which is why we are doomed to repeat it.

#60 604x on 09.27.11 at 1:29 am

@BPOE “Suck it up by the house and the rest goes into gold.”

Is this why no *new* home has sold on the West Side of Vancouver this month? Nothing. Zero. Nada. Goose egg. Crickets. O. Your income this month. Zilch.

From Vancouver Condo Info blog:
“Vancouver West
New home sales
Sept 2010 / 2011
Listed 61 / 71
Sales 9 / 0 ***As of Sept 25, 2011

Van West Sept new home sales:
2008 = 4
2009 = 11

http://vancouvercondo.info/

#61 BaxterPharma on 09.27.11 at 1:55 am

Understand The World Economic Collapse In 3 Minutes
http://www.youtube.com/watch?v=Vl6FAnnRANo&feature=related

#62 Jody on 09.27.11 at 2:53 am

“Would you be entertained by widespread want and sorrow in your own community? — Garth”

and then you say people are silly for not investing now and making a ton of money. So which is it?

I don’t think anyone wants to see want and sorrow, their just tired of governments kicking the can down the road. Honestly, the quicker we get this over with the less painful it will be, the longer we kick the can down the road the greater the coming want and sorrow will be. The upside of bad times is that most communities try to come together, it doesn’t always work but sometimes wonderful things are born out of suffering.

Do you honestly think Garth that people are going to continue to accept some scum bag Gold and Sachs banker making millions every year? To say that people are pissed off right now is the understatement of the decade. Everyday it’s in our faces, someday soon people are going to slap back.

The only thing I’m actively investing more money into right now is physical stuff, like real live piggies and lambs, more farm land, solar and wind power generation, and booze to stock up the bar.

#63 Vulture Fun on 09.27.11 at 3:15 am

Steevo, I’m feeling what you’re feeling. It’s in the air. On Sunday we walked along Marine Drive in West Van and I couldn’t believe the amount of available commercial space there. I don’t recall seeing ANY vacancies at any other time over the years.

Last time I walked along Broadway, same thing. My neighbourhood in Coquitlam is similarly stricken. It could be high taxes here in the city make it impossible for small business to make a go of it, but I feel for them. And I fear for the rest of us.

#64 Mike Rotch on 09.27.11 at 6:15 am

Garth says: “………(never buy the derivative or leveraged kind (of ETFs) )….”

After another blog dog’s tip a few days ago, I’ve had my eye on
BMO COVERED CALL CANADIAN BANKS (ZWB.TO)

Its price has dropped about 15% since February, but it’s yielding over 10% at present price.

Covered calls on bank stock seem to be about as safe as derivatives get. Higher MER than your typical ETF, but still nowhere near mutual fund territory.

Is this one a possible exception, or is there a good reason not to touch this either?

#65 I'm stupid on 09.27.11 at 6:42 am

Read his web site. He’s a showboat looking for speaking gigs. — Garth

Your joking right Garth?
He’s a clown posting what already happened. Its easy to predict the past. Predicting the future is the hard part.

#66 House on 09.27.11 at 7:20 am

Apparently like all good Communists Stevie and Jim want business to take money out of there bank accounts and spend it.

#67 Evangeline on 09.27.11 at 7:26 am

A little snip I read recently was that the emergency loans made to Greece to “help” had exorbitant interest rates attached that have made Greece’s debt problem worse. That pattern is typical even with individuals who are in deep in debt — to keep up payments, they must borrow at ever higher interest rates. Imo, there should be a better way to handle extreme debt than such a terrible financial death spiral.

#68 neo on 09.27.11 at 7:30 am

Let’s see. What have we here. Silver up 23% in a little over 24 hours and Gold up almost 5%. I guess Garth’s relentless utterings of its demise were greatly exagerated. As I said, it’s pullbacks this year have been almost entirely precipitated by margins being raised at the Shangai and CME exchange. Second, with Europe rumoured to be continuing the US failed Keynesian experiment which this time involves leveraging 440 billion Euro 8 to 1, that is bullish for Gold/Silver. Garth continues to not understand the more the Central Banks/Governments print fiat currency out of the nothing the more Gold and Silver rallies. Deflation may temporarily halt Gold’s rise but deflation also puts more money in people’s pockets through a gain in puchasing power which Gold protects the other way when they print. Well, those who still have money and aren’t up to their eyeballs in debt or still have a job. Garth is alarmist about deflation but at the end of the day those jobs that were manifested through this credit bubble were never sustainable anyway and will just suck more wealth from the private sector transfer to the public sector to socialize all the bad debts/bets, which makes the ultimate correction much worse. I think Garth needs to study the 18 month mini Depression that occurred from 1919-1921 when the government in the US did nothing and there was a very sharp painful downturn. However, the excesses were allowed to be washed out and a true equilibrium and reached and the roaring 20’s began. Government intervention in the 30’s and since 2008 is what will make both Great Depressions.

#69 the_apocalyptic_one on 09.27.11 at 7:34 am

Garth – Gold just laid the biggest egg since 1983.

It seems like the egg is from the goose that lays golden eggs since Gold is well on its way to recovering lost ground and making new highs very soon.

The name of the game is volatility and as gold heads towards 2000 and then 3000 and then 5000, we will see 200, 300, and even $500 swings in a matter of days. Astute investors would look at the long term bull market in gold and not call a top every-time there is a bit of a correction, even if it is 10 or 20 percent.

Precisely why this asset class should be kept to a 5% maximum in any reasonable investor’s portfolio. — Garth

#70 Markey on 09.27.11 at 7:45 am

#10 – Smoking Man “Success what is it? That is the question?”

I paraphrase the definition of success in the autobiography of Mary Kay Ash, the woman who started Mary Kay Cosmetics. She said success had nothing to do with wealth and fame (e.g., Marilyn Monroe who killed herself). It was 1) having someone to love very much, 2) having something to do that you enjoy so much you would do it even if you didn’t get paid, and 3) always having something to look forward to.

#71 Evangeline on 09.27.11 at 7:46 am

Johnny Bravo

((…create demand when demand/spending in the real economy shrinks))

how can government create demand? isn’t the concept that governments can create demand Keynes’ basic error because in economic reality only markets can create demand? and that when non-productive government attempts to create demand in the marketplace as a bandaid, it screws up the proper functioning of the market?

#72 bigrider on 09.27.11 at 7:56 am

Papa Luigi #157 from yesterday.

That was really funny ! I was howling over my morning coffee !

Keep posting on the ethnic delusion.

#73 Diana on 09.27.11 at 8:09 am

Interesting post Garth, and as always an excellent read.

And for all the comments that are wallowing in an excess of ‘smug’ when discussing Krista, her arts degree and her letter? I don’t see you making 250k on an arts degree in your 30s. Some perspective might do you a world of good.

#74 Herbert Hoover on 09.27.11 at 8:11 am

#24 Disciple

You have had one too many trips to your inner universe. The hoovered term his right honourable Garth Turner, future leader of the Turner Party of Canada (TPC) is referring to the hooverville shanty towns built by homeless people during the presidency of Herbert Hoover in the 1930s, aka, the great depression.

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

#75 Ludwig Von Mises on 09.27.11 at 8:13 am

#70 …with Europe rumoured to be continuing the US failed Keynesian experiment…

Keynesian economics rocks!

#76 The Apocalyptic One on 09.27.11 at 8:32 am

Folks, don’t want to scare you but the following video will make some of the doomsdayers on this blog seem like raving optimists. Prepare yourselves. This video is a blunt and assessment of the state of the world by a trader. Scary, scary stufff. Be prepared…

http://www.youtube.com/watch?v=aC19fEqR5bA

This has been posted several times here already, since the clip is being traded like porno pix by the metalheads. Try to keep up, Apocalicious. Also check out the guy’s web site to see he’s a minnow shilling for his own gain. His 15 minutes were up yesterday. — Garth

#77 TurnerNation on 09.27.11 at 8:33 am

We’re not broke, we wuz robbed. Big times!! The history books are written by the victors.

1. The US flew nearly $12bn in shrink-wrapped $100 bills into Iraq, then distributed the cash with no proper control over who was receiving it and how it was being spent. The staggering scale of the biggest transfer of cash in the history of the Federal Reserve has been graphically laid bare by a US congressional committee.

http://www.guardian.co.uk/world/2007/feb/08/usa.iraq1

2. U.S. To Hand Over Iraq Bases, Equipment Worth Billions
The giveaways include enormous, elaborate military bases and vast amounts of military equipment that will be turned over to the Iraqis, mostly just to save the expense of bringing it home.

“It’s all sunk costs,” said retired Army Maj. Gen. Paul Eaton, who oversaw the training of Iraqi soldiers from 2003 to 2004. “It’s money that we spent and we’re not going to recoup.”

There were 505 U.S. military bases and outposts in Iraq at the height of operations, said Col. Barry Johnson, a spokesman for U.S. forces in Iraq. Only 39 are still in U.S. hands — but that includes each of the largest bases, meaning the most significant handovers are yet to come.

3. On Sept 10th, 2001 Rumsfeld and Pentagon announced missing billions of dollars. Good timing…of course. Never hear of this, again. The rabbit hole goes very very deep.

#78 Stevenson on 09.27.11 at 8:54 am

ETF’s are a very good tool to invest with especially the leveraged ones like the 2X daily gold or silver. You can’t do the right job without the right tools.

Gold just popped 4% over night…. what kind of investment gives that kind of return. If you used the correct leveraged ETF you would of made 8% return or 20% on silver. Timing is everything and the same goes for real estate.

Looks like stocks ready to take off again. Hmm…maybe we going to avoid another recession. Its interesting how it takes a week to drop 10% and 2-3 days to rally way past that. Investors are not scared or lack confidence anymore. I wonder how this will affect real estate prices if economy stables again.

http://www.theglobeandmail.com/report-on-business/international-news/will-get-funds-in-time-to-avoid-default-greece/article2181354/

#79 Sky on 09.27.11 at 9:04 am

@ Krista…For what it’s worth, you have my sympathy. I know plenty of people, a generation older, who got caught in the tech wreck. They should have known better, but they didn’t. They made the same mistake you did. They trusted their advisor.

Then, some of them went on to make the same mistake over and over again ( with what remained of their money.) Couldn’t get enough punishment.

Post dot.com, a friend of mine bought Nortel at around $5 . He was up 100k, but was convinced it was going higher. Much higher. I saw Nortel crack around $13-14, told him to get out. Did he listen ? Of course not. He listened to his advisor, and rode it all the way down.

So why do invest our trust into these ” experts”? Conditioning.

We’ve been carefully groomed and conditioned to accept as valid only the information and advice received from the experts and their media mouthpieces.

Check your brains at the door, no need to question or be suspicious. Just trust us.

And these snakes profit from that trust handsomely. Who can forget Henry Blodget & co?

http://www.sec.gov/litigation/complaints/comp18115b.htm

One thing makes Blodget memorable. He got caught! But what about the ratings agencies, like Standard and Poors and Moody’s who triple A rated the subprime mortgage junk ? What was their punishment? Nada. Zip. Par for the course.

Be careful out there, Krista.

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

To some of you confused men on this forum :

A hoover is a vacuum. This device is used to suck dirt and animal hair out of carpets .Give it a try sometime.

#80 T.O. Bubble Boy on 09.27.11 at 9:04 am

Not sure if anyone posted this yet… anyone with Boomer parents should watch very carefully, as the courts may allow parents to sue chlidren for financial support.

http://www.theglobeandmail.com/life/the-hot-button/bc-woman-sues-adult-kids-for-parental-support-should-she-get-it/article2180886/

Is this the real solution to the Western World’s entitlement spending problem?

#81 jess on 09.27.11 at 9:05 am

…”Private equity firms have increasingly joined together to acquire target companies (called “club deals”). In 2007, there were 28 club deals, totaling about $217 billion in value. Club deals could reduce or increase the number of firms bidding on a target company and, thus, affect competition. In analyzing 325 public-to-private LBOs done from 1998 through 2007, GAO generally found no statistical indication that club deals, in aggregate, were associated with lower or higher prices paid for the target companies, after controlling for differences in the targets. However, our results do not rule out the possibility of parties engaging in illegal behavior in any particular LBO. Indeed, according to securities filings and media reports, some large club deals have led to lawsuits and an inquiry into the practice by the Department of Justice. Because private equity funds and their advisers typically claim an exemption from registration as an investment company or investment adviser, respectively, SEC exercises limited oversight of these entities. “…

http://www.gao.gov/products/GAO-08-885

#82 Sky on 09.27.11 at 9:06 am

BaxterPharma- # 63

Loved the link. They so get it. Only wished they’d added China into the mix- which has got to be the mother of all scams.

#83 Evangeline on 09.27.11 at 9:24 am

((Timing is everything …))

nope.

timing is gambling

#84 disciple on 09.27.11 at 9:33 am

Facebook is almost certainly either an original Mossad project, or more likely has definitely been taken over as such. The media is already introducing the idea that if you’re not on FB then pretty soon you won’t be able to participate in the economy. Fear tactics. Facebook “credits”. They infer you won’t be able to get the job you want unless the potential employer can access your facebook profile to see if you’re socially acceptable. Conspiracy nutjobs need not apply. I’m glad I am not one of those annoying dudes. (Definition of dude: Pimple on a cow’s buttocks – no kidding, look it up)

Wouldn’t it be a lot easier just to have a microchip in our bodies to buy stuff? Easily re-loadable through labour credits, etc…I mean, they’ve told you their plan two thousand years ago, it’s right there in their book, oh yeah, I forgot, it’s only been available to the masses since the 1600’s, edited by Francis Bacon of course.

Money stalks me like a demon, always calling my name, asking me to draw it closer and embrace its allure. But I know its true nature. Its pursuit is empty, its wages are spiritual death. It disguises itself as progress, achievement, and destiny, but it is none of those things. It gets the blame for being the root of all evil, but it knows that the human mind is responsible for that. We learn at a young age, that money can buy you happiness. We pretend not to believe it, but we do believe it. Our actions prove it. I wonder when my brothers and sisters will finally realize that money doesn’t exist except as a fragment of our childish imaginations? The true power of money is in it making you believe it is real. Like those demons.

Think about it. The only thing that motivates you each morning (or night for nocturnal slaves) is the imaginary concept of money. Your motivation is not your love for your work, or your love for humanity, or your love for your family. Don’t kid yourselves. You’ve forgotten the meaning of family. You are producing a generation of children that are mindless zombies, marching towards the GREAT WAR: judgement day.

This blog makes me want to hurl. — Garth

#85 Robert Dudek on 09.27.11 at 9:35 am

Basically all the gold bears have missed the best bull market of the decade, so is it any surprise they gleefully come out of the woodwork anytime there is a correction?

Let’s see:

1) Negative real interest rates? Check.
2) Massive money printing in Europe? Check.
3) Fed will avoid deflation scenario at all cost? Check.

What more do you need to know?

Gold a speculative, high-risk asset which pays no income, is subject to intense volatility, has no practical utility, stirs visceral emotions and is constantly pumped by an army of doomers, nihilists and outsiders rooting for social collapse? Check. — Garth

#86 Stevenson on 09.27.11 at 9:53 am

#85 Evageline

Timing is everything…. not gambling. Gambling is taking uncontrollable RISKS.

It is what you don’t know that creates risk, but unlike timing, it is what you know through research that reduces that risk.

Just go back to your bank and have them sell you the generic single line approach to a dumb down understandable mutual fund.

#87 Steven Rowlandson on 09.27.11 at 9:57 am

Yes fiat currency and fighting inflation by not raising peoples pay and keeping wages near minimum wage can keep payroll costs low. Combine that with speculative out of controll increases in real estate prices and pretty soon working people are getting paid nothing and can live no where. But may be this is not an economic accident and is part of a master plan. Overtime through keeping more and more people in a state of economic childhood from cradle to grave the bulk of the population can be slow killed, impoverished and sufficient reproduction prevented. Eventually the elites will have a global country club with a few privileged slaves to serve them.

Is that the plan Garth?

Works for me. — Garth

#88 Happy Renting on 09.27.11 at 9:59 am

What are your thoughts on Edward Jones? They seem to be a major investment firm in Canada.

Also, i’m told that the fees for investing in ETF’s are much higher than mutal funds and unless you have a substantial portfolio (at least 100 large) they shouldn’t even be considered. Can you clarify this Garth?

Yes, EJ has many offices. No, ETFs do not cost more than mutual funds. In fact, vastly less. Just for fun, who told you that? — Garth

#89 Wills on 09.27.11 at 10:07 am

#51 Westernman…

spoken like a true bankster wannabe. I’d bet Krista didn’t vote for our current PM. I’d bet you did. I’d bet you weren’t educated in the Arts.

Get it?

#90 Regan on 09.27.11 at 10:07 am

@Krista – I feel you. It drives me crazy when people dole out advice one day and then the complete opposite advice the next, like multiple personalities with total amnesia. A week ago the papers were arguing about how you couldn’t afford to NOT invest in stocks since they were the only thing that gave a decent return. Yesterday, some journalist noted that you could’ve sat out the last 12 years in the markets, put your money in a GIC, and been further ahead. The one thing all this advice has in common is that they use past trends to predict future results, but in fact the opposite is true.
Whatever you do with your money, it should make sense. Buy when it’s cheaper than renting and you get something out of it. Invest when you get something out of it, not because you’re following a herd of other people wanting to gamble their wealth.
There are 2 gems I’ve found true that I’m trying to use to guide myself. One is that big investors like insurance companies and pension funds, plan for a long-term return that averages 2% above inflation. Anything higher is overheated and likely to fall, anything lower may have an inherent weakness and you should figure out why and it’s remembering the inflation part that is most important. The next lesson I’ve learned was told to me by a drunk accountant – first, live within your means. Then, pay off ALL your debts. Next, maximize your income through education or whatever other moves you can make. Next, acquire assets that save you money, i.e. owning a car/house etc. instead of renting or leasing. Then, maximize your tax-deductible investments to create a secondary long-term income stream, like RRSPs and TFSAs at the same time you’re reducing your expenses. It’s like rolling snowballs down a hill. She was retired, by the way, at 43.

If she lived by her own advice, it explains the drinking. — Garth

#91 dd on 09.27.11 at 10:16 am

…Like economist Sherry Cooper….

What a clown. Didn’t cheap money get us into this mess?

#92 TaxHaven on 09.27.11 at 10:20 am

Sounds like you are an acolyte of Robert Reich and Paul Krugman. TERRIFIED of recession and deflation. And believing that more government stimulus is the answer.

Only more debt can save the economy from a debt-induced crisis?

#93 westcanguy on 09.27.11 at 10:22 am

The Tea Party whackjobiness is alive and well here today. Simple minds adore simple solutions. — Garth
___________________________________________

I do adore simple solutions. I’m also a big fan of reality and common sense. Putting lipstick on a pig still makes it a pig.
You dimiss others who share the same thoughts and beliefs I have yet you offer no alternative views on a solution. You were a politician. You ran the finances of this great country for a period of time. Perhaps you can enlighten us on how you think the powers of the world can get us out of this financial situation without sorrow and hardship.

The politics of austerity will lead to deflation, and then depression. That is a solution to nothing. If you think a sound society will rise phoenix-like from the ashes of social misery, rather than political unrest, conflict or worse, you are indeed simple. — Garth

#94 Dad on 09.27.11 at 10:34 am

Was that poster serious when he said the Great Depression lead to 40 years of propserity?

Did he forget the part in between when the world was almost conquered by the One Thousand Year Reich?

#95 disciple on 09.27.11 at 10:43 am

Let the investment banks fail. Nothing is simpler. All of you fools who invested yourselves in these empires of evil will get your just desserts. Simple.

Let’s see… hmm… this won’t affect the nine to fivers in the least. They don’t have any real jobs anyway. What they have is indentured servitude. The REAL economy will chug along just fine.

Garth, why do you obfuscate this pointed reality?

Bank failures would wipe out pensions, retirement savings, jobs and family security. Surely God told you this was nuts. — Garth

#96 Conundrum Carl on 09.27.11 at 10:48 am

The politics of austerity will lead to deflation, and then depression. That is a solution to nothing. If you think a sound society will rise phoenix-like from the ashes of social misery, rather than political unrest, conflict or worse, you are indeed simple. — Garth

Herein lies the great conundrum the world faces. The ultimate paradox if there ever was a paradox. On the one hand if consumers and governments try to reign in their spending, economic growth stalls. If govt’s and consumers continue the wild spending binge, implosion eventually occurs as well because the debt orgy cannot last forever. Arghhh what a mess…
.

#97 disciple on 09.27.11 at 10:49 am

Investment in the bond market is an exclusive club. You know it, and I know it. Same is true for its little cousin, the equities bazaar.

FACT: The largest corporations are banks, insurance companies, and investment firms. EXCLUSIVE club. Your membership dues are your soul. Anyone who believes that the REAL economy needs these charlatans is totally drinking the kool-aid.

The Canada Pension Plan is a major investor in the bond market. That’s your money. Get a grip. — Garth

#98 disciple on 09.27.11 at 10:56 am

Bank failures would wipe out pensions, retirement savings, jobs and family security. Surely God told you this was nuts. — Garth

Okay, fine, I see your argument. But as a Gen-X-er I have had not the privilege of expecting any of these, why then does your generation feel entitled? That’s not ageism, it’s just an observation.

Pension? Is that a carrot or stick? Ah yes, it was an illusion all along, methinks. Retirement savings? Who has these? And don’t get me started on jobs and family security…let’s not go there, for now.

No, my generation will care for yours, it’s only right, but that does not preclude mine from saying what needs to be said.

Trust me, if the bank failures your encourage take place, it’ll be your generation which suffers the most. — Garth

#99 Brad Mitchell in Calgary on 09.27.11 at 11:04 am

“There is no solution in creating hardship for most in a voting democracy, only far more problems. — Garth”

It’s got nothing to do with creating hardship. It’s about letting the business cycle proceed naturally, without intervention. Getting OUT of the way. Sometimes the business cycle (heaven forbid) does involve a contraction. Letting it happen naturally would be the best approach.
But somewhere along the way, it became ok to constantly meddle with this process. Why? Well, you know why. You’re still a politician at heart, so you fully understand.
Deep down, you know that intervening only makes the eventual hardship worse than it needed to be. The problem with so many people is they’re arrogant enough to believe they can control everything, and the short-term effects (dragging demand forward) actually reinforce that belief. Then, when the long term impact inevitably surfaces, the fit hits the shan, and everyone says “how did this happen?”
Because of people. Because of greed. Because of short-sighted actions. That’s how.
A great man once called it “Unprecedented Global Coordination.”
Indeed.
That coordination is creating quite the sight, and it’s only the beginning.

#100 Wills on 09.27.11 at 11:05 am

#98 Conundrum Carl

This is only a problem because governments now owe interest to private banks. If central banks were nationalized, this would go a long way to solving our current problem.

Governments can and should spend – stimulus is needed, however spending on stupidity is not the answer (like $90,000/day for a consultant on how to spend, or $1MIL on flights for a General). Spending must be directed towards business and NOT in the form of corporate tax cuts, but towards mid to small sized firms. Also, creating a REQUIREMENT for all businesses operating in Canada to keep their staff and earnings within Canada would help.

My two cents.

Here’s your change. — Garth

#101 disciple on 09.27.11 at 11:08 am

I agree that one should feel entitled to enjoy the fruits of their labour. But one faction has been stealing from you for 50 years, and now there is no fruit. Instead of correctly identifying the thief, we are tricked into robbing our children’s future. That is not right.

Here’s the problem. Your leaders have known all along that the thief has been taking your fruit, they betrayed you. Why don’t you lead the traitors to the noose and storm the thief’s compound? That would be courageous and leave a legacy for the next thousand years.

Please note, that I speak in metaphor, I’m not condoning violence, English is just such a militaristic linguistic dialectic.

You are a goat. But I speak metaphorically. — Garth

#102 disciple on 09.27.11 at 11:10 am

Trust me, if the bank failures your encourage take place, it’ll be your generation which suffers the most. — Garth

Okay, now I’m learning something new. What is your definition of “suffer”?

#103 pablo on 09.27.11 at 11:13 am

http://ca.finance.yahoo.com/news/Canadian-housing-market-loses-capress-3510474585.html

http://ca.finance.yahoo.com/news/Home-prices-climb-for-fourth-cnnm-3773739242.html

Looks like the G-Man has been right, cdn r/e cooling, and u.s r/e decline slowing. However with republicans stonewalling obama’s jobs act bill, things in the states will get ugly again before they get better, and that means is going to be really bad here in the true white north. There’s a shit storm on the horizon, fill your freezer’s with squirrel meat and load your guns, hunker in the bunker before it hits.

#104 pablo on 09.27.11 at 11:21 am

Here’s my prediction: Were going to see stock markets crashing in October 2011. This is going to be world wide, then watch then watch the panic set in, it’s going to be spectacular.

Based on the twitching in which part of your body? — Garth

#105 Matt on 09.27.11 at 11:39 am

Garth,

Please explain how more ‘stimulus’ (money printing, debt increases) will help in the long term?

This economoy is depends on debt-financed consumption – it’s unsustainable in the long run, and there’s no way to avoid some pain in the short run while it is restructured.

There’s plenty of pain. Want some? — Garth

#106 nonplused on 09.27.11 at 11:40 am

Banks suck.

http://watch.bnn.ca/#clip535962

#107 nonplused on 09.27.11 at 11:46 am

Whoa! Sucks to be europe.

http://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded

The 8th time this has been posted. Do your research. This guy just zoomed the media. Read this. — Garth

#108 Jim on 09.27.11 at 11:59 am

Wow, the nutbars are out in force today on this blog.

#109 Papa Luigi on 09.27.11 at 12:01 pm

#74 Glad I was able to bring some humour to your morning coffee!

#110 nkc on 09.27.11 at 12:02 pm

hi garth, doesnt seem like anyone on this blog has caught on that “allesio rastani” is one of the “Yes Men” satire pranksters. re-watch the video, ill-fitting suit, he doesnt know what he is talking about, and he stutters like someone whose heart is beating too fast. anyway, here is the last page of the forbes interview http://www.forbes.com/sites/emilylambert/2011/09/27/trader-or-prankster-we-called-alessio-rastani-and-asked/4/ . even the best of us are fooled sometimes, no?

Especially the doomsters. Can’t see over their blinders. — Garth

#111 nkc on 09.27.11 at 12:07 pm

btw, “allesio rastani” is an anagram for “alias relations”.

Check this out. Looks like the metalheads may just have had their bell rung. Hilarious. — Garth

#112 Siddhartha Guatama on 09.27.11 at 12:08 pm

#104 Disciple

Okay, now I’m learning something new. What is your definition of “suffer”?

To live is to suffer disciple. Cardinal part of the Buddhist worldview.

#113 Vancouver_Bear on 09.27.11 at 12:16 pm

I wonder if anyone else noticed. Realturd’s cartel started flooding radio and TV waves with their pitty ads. Are they getting desperate? I do not remember seeing/hearing that many ads from realturdos before….even during a gloomy fall of 2008. Something must be cooking in the air…

#114 pjwlk on 09.27.11 at 12:23 pm

Forgive me if this has already been posted:

Canada’s Housing Market Remains Strong – Wall Street Journal Report

#115 Soylent Green is People on 09.27.11 at 12:25 pm

Billions for Corporate Welfare.

Nothing for hungry cold kids in Canada.

Nice Canada, real nice.


http://www.news1130.com/news/local/article/281854–help-comes-in-for-teacher-with-hungry-and-cold-kids

……………….

Canada: September 2011

snip snip: Trustees with the Vancouver School Board say they’re paying attention to the problems being raised by grade two and three teacher Carrie Gelson.

She created an open letter saying her students often came to school cold, hungry, and stressed.

http://www.news1130.com/news/local/article/281854–help-comes-in-for-teacher-with-hungry-and-cold-kids

http://www.facebook.com/#!/notes/cassia-kelly-kantrow/a-letter-from-a-teacher-at-seymour-elementary-located-in-the-dtes-let-me-know-if/10150383564943980

.
.
.

.
.

#116 Aussie Roy on 09.27.11 at 12:28 pm

Aussie Update

The east China city of Wenzhou is battling its own subprime crisis after seven local business owners fled recently, leaving thousands of employees in a state of shock and enormous unpaid loans in hundreds of millions of yuan.

http://www.macrobusiness.com.au/2011/09/the-wenzhou-run-worsens/

NEARLY half of 2300 people surveyed by RaboDirect said their financial situation was worse than it was a year ago.

MORE than 60 per cent expect it to be even worse in the coming year.

NEARLY half feared running out of money.

Start of sidebar. Skip to end of sidebar.
..End of sidebar. Return to start of sidebar.

ONE in four said they didn’t manage to save last year, or have no savings.

http://www.news.com.au/money/money-matters/cash-fears-turn-baby-boomers-into-baby-gloomers/story-e6frfmd9-1226147417374#ixzz1ZAeiYa00

No topic gets British people animated like property. It goes beyond a national obsession.

The trouble is that too many of us are poisoned by past glories in this market. From the mid-nineties right up until the financial crisis of 2007, the housing market created millionaires up and down the country. And it changed us.

On Friday we looked at the characteristics of a ‘sentimental investor’. That’s an investor who is impassioned, loyal and a little bit stuck in the past. I would argue that that accurately describes the average UK property investor as well.

The trouble is that sentimental investors often come unstuck. And right now there’s a classic sentimental trap that property investors need to be wary of. Today I’ll explain what that trap is.

http://www.moneyweek.com/investment-advice/how-to-invest/strategies/the-eight-year-bear-market-in-property-55626

Todd Martin, an Asia equity strategist at Societe General SA, talks about the outlook for China’s economy and credit market. Martin also discusses global stocks and commodities.

http://www.bloomberg.com/video/75962446/

#117 bigrider on 09.27.11 at 12:32 pm

Everyone here should be buying mutual funds and sticking forks into ETF’s. Mutual funds make oodles of money…..for their purveyors. LOL

What, you want to kill another industry here? Go ahead, go buy your ETF’s you socialistic, non-profit communal commies… LMAO

#118 nkc on 09.27.11 at 12:33 pm

Like you say, people are quick to believe what they want to hear. The “Yes Men” should team up with Bob Rennie / Cameron Muir, and we would really be confused.

#119 Evangeline on 09.27.11 at 12:34 pm

((Just go back to your bank and have them sell you the generic single line approach to a dumb down understandable mutual fund.))

lol! there are other lucrative investment opportunities besides gambling, er timing the markets, and mutual funds. Do you not pay attention to Garth?

#120 Peakoilist on 09.27.11 at 12:52 pm

disciple on 09.27.11 at 11:08 am
Great posts today D. you say what many will not. that takes courage..I’ve pretty much stopped commenting here lately because of the backlash..I still read G’s posts because I agree totally with his RE synopsis…stop inflating RE..let it reset to affordable levels..which unfortunately will create a lot of suffering which apparently G loathes. But when it comes to inflating the greater economy to save Banks, etc. G takes the opposing view. I don’t get it. Maybe I’ll never get it..Does anybody really get it ?? Can we stop the inevitable?

#121 C on 09.27.11 at 12:57 pm

It is a shame the “metalheads” on here are ruining a great blog by acting so immature.

Are they Canadian at all? I didn’t think Canadians acted like this back home.

We have devolved, apparently. — Garth

#122 nkc on 09.27.11 at 1:00 pm

this is a better soundbite from a veteran societe general asian analyst citing how HAM’s are repatriating money to repay debt in china. enjoy.

http://www.washingtonpost.com/business/martin-says-china-cash-crunch-may-be-gaining-momentum/2011/09/22/gIQAXxPIpK_video.html

#123 Kayak Freddy on 09.27.11 at 1:11 pm

How on Earth does the market drop like a stone – and today its overshoots for the moon. It’s a casino – plain and simple. It’s not investing – its a crap shoot – I’ll keep my money under my mattress – at least I know its there.

How can a debt that is strangling one nation all of a sudden be fine. Someone has got to pay for it. The Greeks have made it very clear that they will not alter their lifestyle and someone else will have to foot the bill. This world has truly gone truly mad!

I believe my simple house purchase was a excellent choice. Let the world keep up with this BS – its like my brother always says, The world’s population is dangerously overpopulated – our danger in drinkable water, farm land, resources, seafood…all become scarce – but everyone tells you that it creates growth.

We slowly strangle our very existance and no one notices (or cares)…. This world is so F*&Ked!

I can relate to those who await the housing bubble pop and month after month sit in frustration. It’s all a mirage –

#124 PTDBD on 09.27.11 at 1:31 pm

In a time so not long ago. In the land of America, Euro Land and even in your land there existed a very strange, primitive economic system.

Lenders who lent money insisted on sound collateral for the loan. When the borrower was not able to repay, the collateral was collected. If the lender lent foolishly he suffeed the consequences. Imagine!

“Moving forward” to today, bad investments are hidden. When discovered, they are saved by government bailouts. These bailouts soon prove insufficient and then are magicly “leverd up” to unimaginable numbers. This restores “market confidence”, the only barometer of success and allows the holders of the questionable debt to collect.

Where will the magic money eventually come from? It comes from the only source of wealth….the individual. You. Your children.

Shouldn’t our barometer be OUR quality of life?

In a time not too long ago. One family member was able to keep the house and look after the children while the other earned a living wage that eventually paid off their home. They were able to afford that new half ton for $4,700. The wage earner was able to retire with a guaranteed pension and taxes were lower. Food was affordable. A University Student could finance an education by working summers.

This was not too long ago.

What is amazing is how quickly our young were convinced that things must change. Suddenly pensions were unaffordable. Medicare could not be sustained. Houses and Education could only be supported by huge debt. The Middle Class declined year after year and the rich-poor gap grew.

Every time I hear “moving forward”, “going forward”, “not looking backwards”…(and I hear it a lot)…I think about financeers, politicians and the common folk and who is moving in what direction.

Carney and Harper and Flaherty are meeting today to show that the are “on the top” of the current economic situation. Are you?

#125 Bruce on 09.27.11 at 1:38 pm

“Would you be entertained by widespread want and sorrow in your own community?”

I could care less, Garth. It’s all just paper to me anyway.

Amazing how pissy the gold freaks can get. — Garth

#126 Stevenson on 09.27.11 at 1:44 pm

#123 – C

Canadians have definitely devolved, but from not much in the first place. If you compare us to other productive countries like Japan or other parts of Asia we are very slow workers. That and the unnecessary unions don’t help either by destroying a free market for employment and wage. The best thing we got going for us was RIM and look where that one is going….

I bet you there are a lot people who read this blog that consume everything it illustrates and only rely on this “one” source. That shows how simple Canadians are.

#127 Bruce on 09.27.11 at 1:45 pm

Here’s my prediction: Were going to see stock markets crashing in October 2011. This is going to be world wide, then watch then watch the panic set in, it’s going to be spectacular.

Right said, Pablo. There is nothing left to do but sit back, watch and enjoy the fireworks show. Bring it on I say. The global economy needs a good dose of turbo-lax. Garth, ever the eternal optimist over fiat money, knows this too–he just wants us to buy his book first…

And you cheer economic and social collapse so your gold will augment. Makes me ill. — Garth

#128 Bruce on 09.27.11 at 2:03 pm

“And you cheer economic and social collapse so your gold will augment”..

LOL! Who said I owned gold, or silver, or any precious metal for that matter? Here’s a suggestion. Try living on a meager paltry disability pension of $900/month. Savings, investments, or any other”assets” of considerable value are not permitted, so I’m pretty much screwed–but does it matter? Nope. When you’ve got nothing to begin with, you’ve got nothing to lose–which brings me more or less up to date: I’m friggen’ loving this spectacle. It’s great theatre, I’ll say that much. Toodles for now!

#129 shanks on 09.27.11 at 2:07 pm

#86 disciple on 09.27.11 at 9:33 am
you are getting to the point of it… dont call it their book, its just what is.

also, please remember that money is not the root of all evil, but the LOVE of money. If you have a little or a lot, it doesnt really matter, as long as you dont LOVE it. Tricky thing about money, is once you get a bit, you tend to want some more. and more is never enough, the two concepts “more” and “enough” just are not the same. This is what has given rise to this fear and greed market trading psychology.

seriously tho, watch out for trick and tracknology. Facebook, iPhone tracking, its 100% for real, and dont be suprised if the next big thing after NFC mobile phone wallets is chip implantation. Man, I really hope I am deep in the jungle before then, because that kind of life seems like hell to me.

sorry Garth for the doomer comments today, i guess its just a sign of the times.

#130 Rev on 09.27.11 at 2:13 pm

I’ve noticed that the tea party members are mostly paunchy, sagging, grey haired white people. There is an obvious underpinning of not liking “them”, your imagination can figure out who “them” are.

Fortunately white people are an endangered species.

#131 Live Under Your Means on 09.27.11 at 2:17 pm

Garth, I love reading your daily blogs, notably for your writing style and witty & cutting replies to some of the the people who ‘supposedly’ have followed your blog for awhile, yet ask such inane questions. Then there’s the ‘metalheads’ the ‘doomers’ the ‘Tea Party’ libertarians’, the conspiracy crowd, etc. Makes for an interesting, but rather discouraging world we now live in. I don’t recall such political partisanship years ago. There seemed to be more compromise back then. I miss the more simplistic world I grew up in. Was I just naive??

#132 neo on 09.27.11 at 2:47 pm

Garth,

Have you ever had a posting entitled “Hope”?

Because watching this market climb 600 points in two days on the “hope” Europe may…under the right circumstances…with the support of 17 nations…delay the default not prevent the default of Greece is embarrassing. Why even offer the investment advice in your books? When fundamentals no longer matter. Just rumour and innuendo? Time to get back to 1220 again so we can fall back to 1115 on the S&P.

Didn’t this “Hopium” get Obama elected? How is that working out.

You talk about Fear and Greed but Hope is even a more irrational beast. What ever happened to pragmatism?

The market is retracing losses caused by irrational fears. But you know all about those. — Garth

#133 disciple on 09.27.11 at 2:49 pm

Economic collapse? What would collapse exactly? Nothing at all.

In the event the Big 5 monopoly would be forced to sacrifice their imaginary profits via CMHC reform and/or admit to their gambling exposure to Europe, would Suncor stop selling us energy? Would BCE stop invading our homes? Would RIM stop sending our messages? Would Barrick’s men stop finding gold? Would Potash go kablooey?

No, the banks’ henchmen would continue to bleed this country dry of its natural resources, but the human resource would be moved away from its clutches.

#134 Live Under Your Means on 09.27.11 at 3:00 pm

Second & last comment for the day. Within 2 day rec’d 3 flyers in our mail box from RE agents offering their services. One, who has a listing on the next st. says “We request a 48 hour listing only OR a FEE Agreement signed agreeing to pay commission for a sale with no listing agreement if you desire. There will be no pressure on you to list long-term.”

She’s getting desparete I think. Plus, she’s the last one I’d every list with if we decided to sell. House behind our neighbour has been on sale (& vacant) since late May/early June. Seeing lots of ‘For Sale’ signs in our area. Some have sold. Neighbour’s S&DIL took their home off the market in the summer. They now have 2 children. But they bought a 32 ft trailer and parked it on his parent’s land at the cottage. Water & electricity is now hooked up to his parents cottage. He beemed – with a smirk on his face. He’s a VP at a big high school & she has a good job. DH is sure they loaned or paid for the down payment on their place in town.

Daughter & her DH (useless prick) moved back 6+ yrs ago as he lost is job in California. He’s an Electrical Eng. & worked for big IT co.’s in Chicago and Cal. They finally moved out of her parents place 2 yrs ago. Her Dad could stand the sight of him. She now works at a call centre & he hasn’t worked since they moved back. He’s a twit, but daughter is not much better. Neither of us like her. BUT, they do all their laundry at the parent’s place. Several of our neighbours have, IMHO, really spoiled their children – in comparison to the way my DH & I were brought up. And, I think it is really sad. My Niece has also been spoiled by her parents and her extended family. This will be the first year she’ll not be receiving a Xmas cheque from us or my sis & BIL. We’ve already cut off 1 niece overseas.

#135 Bill Gable on 09.27.11 at 3:03 pm

With some of the whack stuff I read here today, I sure hope Mr.Turner had a good supply of Tums.
Are they putting something in the water?
Man, some of this stuff makes me go “whoa”.

Tea party types scare the heck outa me!
People taking glee at a downturn that is going to cause pain and misery.

Unbelievable.

#136 Brad Mitchell in Calgary on 09.27.11 at 3:03 pm

“And you cheer economic and social collapse so your gold will augment. Makes me ill. — Garth ”

Instead of judging those people, how about criticizing those who raped our economy and caused the coming collapse. That would make more sense.

Nobody raped the economy. You need help. — Garth

#137 disciple on 09.27.11 at 3:09 pm

#131…shanks…hey, you know you’re right. The only thing that satisfies is…more. The New Testament is pagan in origin, original manuscripts we have not, but what was smuggled out of the cult of Aton (your real rulers) by the Jesus twins, who were killed, was then re-captured, mixed with untruths at Nicea and packaged into the dog and pony show we have on our shelves today. They felt that the Book of Revelations was confusing enough so they left that mostly untouched, but in it is revealed their overall plan. I’m not going to pretend to understand it, as the interpretation of the imagery is known only to the initiates of the secret groups to which I do not belong.

But this is not a religious blog. And I’m not religious.

#138 Happily Renting on 09.27.11 at 3:10 pm

“Yes, EJ has many offices. No, ETFs do not cost more than mutual funds. In fact, vastly less. Just for fun, who told you that?” — Garth

My EJ Financial Advisor, of course. There is also a video at the G&M that states this as well. Just to confirm, we are talking about the fees associated with holding these assets, not the assets themselves. Is this correct?

http://www.theglobeandmail.com/globe-investor/investment-ideas/lets-talk-investing/etfs-v-mutual-funds/article2094645/?view=picks

Also on a side note, I’m in the process of transfering my account to one with no commisions and minimal fees. EJ seems to be taking more than their share for the minimal assistance they provide.

ETFs cost money to buy – a trading fee (about ten bucks with a discount brokerage), but have virtually no ongoing management fees. Mutual funds (especially equity funds) cost you 2-3% annually in management fees, plus there’s often a front-end or back-end sales charge. No comparison. — Garth

#139 Westernman on 09.27.11 at 3:14 pm

Wills
Wrong on all counts. I’ve never for one second wanted to be a banker, I don’t vote because it only encourages them… but you are right that I don’t have an ” Arts ” degree : but then why would I want something as utterly useless as an ” Arts ” degree?

#140 Onthesidelines on 09.27.11 at 3:27 pm

Garth’s reply to my ETF comment: “Your comments apply only to derivative ETFs, which nobody should buy. You need to learn more. — Garth”

I beg to differ. Show me one ETF provider that does not state in the fine print that some of its ETFs may be trading in derivatives. Matters little if the goernment bond ETF YOU happen to be in is not trading in derivatives when they are up to their necks in other ETFs that are. The result is still the same: when the issuer goes down because of some bad bet not related to your particular ETF, your investment is toast.

Please correct me if I’m wrong.

You’re wrong. — Garth

#141 Keeping the Faith on 09.27.11 at 3:37 pm

#115 Vancouver_Bear on 09.27.11 at 12:16 pm

“Realturd’s cartel started flooding radio and TV waves with their pitty ads. Are they getting desperate?”

In 2008/2009 after the crash, the radio ads were humming with pumpers and I remember it clearly from when I was living in Vancouver. They came out of nowhere. RE pumpers probably think it worked for them then as a ’cause and effect’, i.e. radio ads=increase RE sales, not realizing it was the government bailouts that pushed RE up.

What a joke … this time it is different.

#142 disciple on 09.27.11 at 3:45 pm

#122 Peakoilist…thanks, brother… You have to read between the lines, there is only so much Garth CAN say, for obvious and not so obvious reasons. There was a specific purpose for my giving him a hard time today, which I cannot disclose directly, as it would endanger the very integrity of this forum. But, like I said, read between the lines, you just might “get it” after all.

Remember, 10% of the “fabric” of the mind is the rational conscious mind, the other 90% is the unconscious or subconscious mind – Jung.

Shout out to Siddartha also. Thanks for the insight on what suffering is, I will meditate on it tonight. Good evening, all. Look forward to the minutes of the F*C meeting this afternoon.

I think you’ve been into the holy water again. — Garth

#143 Debtfree on 09.27.11 at 3:48 pm

@130 bruce re disability pension . I have a person in my circle that is in your position . The way they/you are treated is well beyond my understanding . All of your creativity is met with punishment . We can not even say out loud how we try to help for fear of them being punished . The only thing I can say is instead of posting here . Create a site where people on dp can join forces . And if there is a site some one post it for the Bruces of canada . The only thing the gov. understands is numbers of votes at election time. The rest of the time they couldn’t care less what we think.

#144 GregW, Oakville on 09.27.11 at 3:49 pm

Hi Garth, FYI articles, Someone may be interested?

Silicon Carbide: Smaller, Faster, Tougher
Meet the material that will supplant silicon in hybrid cars and the electric grid
http://spectrum.ieee.org/semiconductors/materials/silicon-carbide-smaller-faster-tougher

Wind, Water, and Solar Power for the World
Nix nuclear. Chuck coal. Rebuff biofuel. All we need is the wind, the water, and the sun
http://spectrum.ieee.org/energy/renewables/wind-water-and-solar-power-for-the-world

Twirling for Power: New Offshore Turbine Design Can Store Energy
http://spectrum.ieee.org/energywise/green-tech/wind/twirling-for-power-new-offshore-turbine-design-can-store-energy

Core Cooling System Working at Two Fukushima Reactors
“This is part of IEEE Spectrum’s ongoing coverage of Japan’s earthquake and nuclear emergency.”
http://spectrum.ieee.org/tech-talk/energy/nuclear/core-cooling-system-working-at-two-fukushima-reactors

No. 64: Are We Addicted to our Smartphones?
A new study looks at how smartphones are designed to be habit forming
http://spectrum.ieee.org/podcast/geek-life/tools-toys/are-we-addicted-to-our-smartphones

iCandy: With the Greatest of Ease
(12+ pics with a desciption)
http://spectrum.ieee.org/slideshow/geek-life/tools-toys/icandy-with-the-greatest-of-ease

#145 wtf????? on 09.27.11 at 4:08 pm

A quarter mill won’t buy anything these days except a couple of decent hangovers. People still think its actually money…when its not……I call it ‘inflato-bucks’. The people in Zimbabwe probably felt the ‘wealth effect’ when the government started to issue zillion dollar notes.

The net effect of having a quarter in the bank these days is that you’re still a wage slave going nowhere….unless you do the Adam Smith thing and move to an economy where things are much cheaper…..for now. But inflation is rampant everywhere and there is no hiding from it. Less than a twenty percent annual return guarantee’s that you end up eating catfood or working till your dead.

BTW AU had a 200 dollar move in the last few days…….did you check out…….or in? Sellers lost a fortune…….never mind the opportunity cost. Macro never lies. 11 years of solid returns and no end in sight.

Money supply is at all time highs……..are you still wondering why house prices have gone up? Go the grocery store….so have banana’s. You don’t have equity in your house…you just have the dreams of worthless paper being the right thing to hold. Zimbabwe dollars are now tarp wrap and toillet paper…..$CDN is getting there with a net national debt of 140% over GDP.

Where did I put the razor blades? — Garth

#146 The thing in the basement on 09.27.11 at 4:21 pm

56 Derek R – no I dont see that one working. Interest paid to the mortgage holder is already taxed as income. If we were to increase that tax it would be passed onto the homeowner in the form of higher rates. Secondly, it provides a disincentive to pay off the debt, and penalizes those who wish to save or accumulate wealth.

As you note, it is very difficult to devise a tax scheme which is fair.

#147 Spiltbongwater on 09.27.11 at 4:22 pm

ETFs cost money to buy – a trading fee (about ten bucks with a discount brokerage), but have virtually no ongoing management fees. Mutual funds (especially equity funds) cost you 2-3% annually in management fees, plus there’s often a front-end or back-end sales charge. No comparison. — Garth

Garth, are ETF’s allowed to be swing traded? Last year I was buying and selling the same ETF in my TFSA. The ETF was a bear 2X natural gas fund. I would put 5K in, and sell a few days later for 5.5K, few days later I would buy 5.5K and sell again a few days later for 6K, did that about 10 times and got my 5K investment up to 9K. My online brokerage charged $28 per sale buy or sell so I paid about $350 in commision to make 4K profit. Would still be doing it, but got bored of the game. Was a really swingy ETF that moved up or down 6-7% daily, so saw the opportunity to make some money doing that.

#148 Brad Mitchell in Calgary on 09.27.11 at 4:29 pm

Nobody raped the economy. You need help. — Garth

Maybe. But I have a thick set of glasses and a thin ego. I suggest you borrow them, or get your own.

#149 JohnnyBravo on 09.27.11 at 4:32 pm

#73 Evangeline on 09.27.11 at 7:46 am

Government spending is a component of GDP, and government demand for goods/services is real demand. In other words, the government IS part of the market. (You can argue about which goods and services should be provided by the government, or how governments can crowd out private investment, or how governments can distort markets, or how inefficient governments are, but I won’t go there in this comment.)

Many people criticize “Keynesianism” today, but based on what I know, governments today are not practicing Keynesianism, as per my previous comment.

If a government is in deficit, any “stimulus” it spends must come from borrowed money, as opposed to tax revenues. That is what’s happening today. If the economy then does not grow faster than debt, rather than helping, the stimulus puts an extra burden on the economy in the form of even more debt and taxes, which reduces spending, which is the basis for the economy.

#150 OttawaMike on 09.27.11 at 4:37 pm

Seems like the crazy BBC trader was not a Yes Man after all:
http://www.yeslab.org/rastani

In Osijek Croatia headed to the Slovanian coast. Click on my screen name to see more.

#151 JohnnyBravo on 09.27.11 at 4:40 pm

Krista,

I hear you. Many, many people have suffered at the hands of so-called “financial advisors”, most of whom are little better qualified to advise you financially than a car salesman. And make no mistake, in the fund industry the word “advisor” is just a euphemism for “sales guy.”

It really is a racket. I know this from personal experience and from people that I know in the business. On a related note, just yesterday one of the insiders was interviewed on BNN. Peter Hodson, formally of Sprott, told it like it really is in the world in which he prospered. Of course, now that he is out he can, and it also helps promote his new business, but that does not mean what he said isn’t true. Check it out: http://watch.bnn.ca/#clip539227

I criticized you for whining that the system is broken. It’s not broken, but it is very (very) corrupt. Sadly, it has always been so to some degree. This happens when you put people and money together.

The financialization of the economy, which really accelerated over the last 30 years, has just made the corruption even worse because making money from money (as opposed to from wealth generation) has become the business model.

It’s indicative of an economy that cannot generate sufficient real wealth to collateralize the debt needed to keep the system growing. Remember, bank profits come from inflation.

A friend told me that her advisor kept telling her, “Pay yourself first”, meaning: save for your retirement before spending on consumption. What she really meant was, “Pay yourself first, but only after you pay me, and all the other people in the fund chain standing behind me with there hands out.”

If you are going to play the game, you better know what you are doing, or work with reputable people whose interests don’t conflict with your own (mutual fund advisors are paid on commission, after all). At the end of the day, to them funds are products, just like a car or a pair of shoes. Sadly, too many of us had to learn this the hard way. Caveat investor.

#152 Bruce on 09.27.11 at 4:45 pm

IMO, our entire global economic system is akin to a three-ringed circus. For all intents and purposes, it seems the more they do, the worse things get. Every day brings to light more information, contradicting what we just heard only a day earlier. One can’t help but wonder, are they REALLY telling us everything? Is the situation indeed more dire than they are willing to admit or let on? What’s up with the Carney/Harper/Flaherty meeting? Do they have information the rest of us don’t? Furthermore, the rally we say today basically fizzled out in the last half hour. Although we still saw a triple-digit gain, the markets were quite a bit off their session highs at the closing bell. Personally, I think it was nothing more than a dead-cat bounce, one more euphoric attempt to bolster sagging confidence in a system that’s gone stark-raving mad IMO. Does anything make sense anymore? I’ll say this much: Sooner or later, something’s gonna give. Something, somewhere at some point is going to be the final death knell. Folks, we can’t go on like this. Things have reached a crisis point. The middle-man is being priced out of EVERYTHING. Oh sure the party was fun while it lasted, but we have to admit that the coming hangover is gonna take YEARS to wear off. In the meantime, fasten your seat belts. My gut instinct tells me that next month is going to be a doozy.

Is that a leading or lagging indicator? — Garth

#153 Phil on 09.27.11 at 5:05 pm

#132 should be banned. Racism pure and simple.

#154 neo on 09.27.11 at 5:08 pm

The market is retracing losses caused by irrational fears. But you know all about those. — Garth

Do tell?

Don’t patronize me Garth. This has more to do with end of the month window dressing more than anything. The S&P 500 has been trading in a 1115 to 1220 range for several weeks now. When it gets to 1220 will will it be “retracing” gains as well? You’ve already said we are headed for a global recession. Can you “rationally” say that a global recession has been priced into the Dow when it is only down 3.34% YTD and the rest of the global indexes are down 10-20%. Are the CDS spreads in Europe continuing to widen despite all this Euro “rescue” hope irrational? Nothing has changed Garth including your hollow dismissiveness. My fear isn’t irrational. Your blind faith/hope is.

#155 shanks on 09.27.11 at 5:12 pm

humm bananas eh? i think i am going to invest!

#156 realitybytes on 09.27.11 at 5:12 pm

[neo – You talk about Fear and Greed but Hope is even a more irrational beast. What ever happened to pragmatism?

The market is retracing losses caused by irrational fears. But you know all about those. — Garth]

one says the down is logical correction of gains caused by irrational hope. the other says the up is retacting losses caused irrational fear.

I don’t think either side knows squat about future, and has but the faintest grasp of the present. But the debate between immovable objects and unstopable forces on the internet is great fun :)

#157 Moneta on 09.27.11 at 5:36 pm

Kilby on 09.26.11 at 10:42 pm
—–
Herb talked about dark channels. I didn’t.

#158 JohnnyBravo on 09.27.11 at 5:43 pm

#140 Happily Renting on 09.27.11 at 3:10 pm

I’m not going to claim to understand all the nuances of ETFs (partly because there are so many different ETFs with different structures and strategies). Also, this comment is not an endorsement of ETFs. And I’m not saying mutual funds are all bad. I just can’t stand when the media distorts the truth, whether purposely or by ignorance.

First, Dan states that mutual funds are better if you don’t have much money to invest. ETFs trade like stocks, so as far as I know, as long as you can afford at least one share of an ETF you can buy in. Yes a fixed trading fee could make such a small purchase very costly on a percentage basis, but who buys one share? It’s true that you can hold partial units of a mutual fund, and the commission is always a percentage of your invested capital, but to say this makes ETFs better on that score is a stretch to say the least.

I’m not sure I get his point about reinvesting income. His explanation seems a bit tortured or lacking detail. But he may have a point regarding some specific ETFs.

Dan’s point about fees is off the charts. Yes, you pay trading fees when buying/selling ETFS, but mutual funds also have to pay trading fees. Who do you think pays for that?

Dan says that with a mutual fund you are likely not going to incur a cost to buy or sell? WHAT?! First of all, any costs incurred by the fund––including marketing costs, 12b-1 fees, and “other”––are paid for by the investor with an MER of typically 2.5% or higher. Second, you have to pay the sales commission. You can pay now (front load) or later (deferred sales charge), but you will pay, either while holding the fund for a very long time, or if you cash out before the commission maturity date. And don’t forget that every new contribution gets its own maturity date. Meaning if you make an annual contribution, say at RSP time, you will always have a commission hanging over your returns no matter how long you hold the fund.

Some ETFs do have management fees, but they are typically far lower than mutual funds. There may be other aspects of ETFs that make them not as great they seem, but IMO they are better than mutual funds.

The shame of it is, some fund managers are damn good at what they do, but the fund industry has such a byzantine cost structure. Let’s say the fund costs you 3% per annum to hold, and inflation is 3%.That means the fund has to gain at least 6% per annum just to break even. And that’s before taxes, which you will pay some day.

#159 Cookie Monster on 09.27.11 at 5:44 pm

#138 Brad Mitchell in Calgary on 09.27.11 at 3:03 pm

“And you cheer economic and social collapse so your gold will augment. Makes me ill. — Garth ”

Instead of judging those people, how about criticizing those who raped our economy and caused the coming collapse. That would make more sense.

Nobody raped the economy. You need help. — Garth
—–
Funny, I was thinking the exact same thing just before reading your post.

Garth, It’s not a joy for seeing people suffer, it’s joy for seeing the suffering end. Hopefully once the parasites finish killing off most of their hosts the hope is the giant government parasite will struggle for survival revealing it’s vile evil exposing the true disgustingly immoral nature of our offensively corrupted and dysfunctional socialist system. I’ll take great joy in that. Ron Paul 2012!

#160 jess on 09.27.11 at 6:11 pm

Big banks targeted by IRS on tax breaks Financial Times
Sep 25 – “US tax authorities are targeting cross-border finance deals worth billions of dollars between leading US and UK banks as they step up efforts to clamp down on abusive tax avoidance, a joint investigation by the Financial Times and ProPublica, a non-profit news organisation, has found.”(tjn)

http://www.propublica.org/

Check-the-box is but one of many forms of “tax arbitrage” [4]—the art of exploiting differences in countries’ tax systems. It can reduce taxes all by itself or figure into more complex transactions. As the Financial Times and ProPublica reported Monday [5], the IRS in recent years has clamped down on what it views as abusive arbitrage deals involving foreign tax credits
Check the box rule
https://www.documentcloud.org/documents/251711-crs-tax-havens.html#document/p2/a33557

#161 Peakoilist on 09.27.11 at 6:21 pm

#155 Phil on 09.27.11 at 5:05 pm
Good call Phil..I agree..I kinda let that one slip by, but after reading it again, it is really racist..Garth should at least have given Rev a warning. Talking about other races in that manner would not have been tolerated.

I took it as sarcasm, not racism. Lighten up, doomers. — Garth

#162 Get safe on 09.27.11 at 6:25 pm

Thank you Garth for your insight. While I disagree with some of your thoughts I really do enjoy your blog and thankful that we are lucky enough to have someone like you to try and make sense this crazy world. No one knows the future and it seems very obvious world markets/economies are in big trouble. Garths main point is that housing in this market is VERY RISKY and will correct and melt. Garth also tries to educate us to get safe but also make money with safe liquid stocks that pay %5-7%. Yes the Markets can correct another 20-30% but no one knows for sure. To collect 5-7% on a stock that will fall less then a third of an overall market correction vs overvalued RE is a smart move. Keep up the great work.

#163 jess on 09.27.11 at 6:35 pm

59 shanks

That is creepy! How about this one where the message is in the medium?
http://www.bloomberg.com/news/2011-09-26/message-in-a-bacterium-may-be-next-invisible-ink-study-says.html

#164 Herb on 09.27.11 at 6:36 pm

#159 Moneta,

and Herb is still waiting for you to show how public service pensions eat private profits and keep private sector wages and pensions down.

#165 Bigwhiffa on 09.27.11 at 6:39 pm

We all (at some point) have to make one of two choices…

1. Learn the financial “game” and play it as best you can helping ensure a better/happy/enjoyable future for yourself and family.

or

2. Cry, complain and then take your ball and go home cause you got roughed up by the big kids.

Sadly most people choose to give up. Fewer and fewer people choose to learn from their mistakes and instead give up and never learn how to play the game again.

Life long learning is the name of the game and if you are ill equipped to learn you are ill equipped to survive. Natures rules, not mine.

So stop complaining, focus on what is tangible, get pumped up and learn how to flex your financial muscles.

#166 miketheengineer on 09.27.11 at 6:42 pm

Garth et al:

Valium?

Reminds me of the Clint Eastwood movie, I think it was called “A Fist Full of Dollars” where it was said….

“Valium? I don’t need no stinking Valium”…or something to that nature.

Why? Cause I am prepared…that’s why? And Garth I know you are too Buddy? And most likely much much better prepared than me or Nostradamus le mad “dude”.

Keep on Rock’n Garth. Enjoy every one of the posts and “all the comments”

Oh and that “Beach Girl” rocks too…keep it coming girl. We all need a dose of reality. Especially those guys in Vancouver.

Really, really estatic, nothing happened today. Yippie.

#167 miketheengineer on 09.27.11 at 6:48 pm

Garth et al:

Oh I forgot to mention….I need to ask a favor of your postings group….here it is

Any feedback would be appreciated.

Question:

What are the advantages/disadvantages if/when I go and work in Houston Texas in the Oil and Gas industry as an engineer in some sort of role?

I have a potential opportunity right now. And if my current employment contract ends (in GTA) before xmas, this job in Houston may turn on.

Thanks for the advice in advance.

Mike the engineer

#168 Nostradamus Le Mad Vlad on 09.27.11 at 7:03 pm

#59 shanks — G’day shanks. Interesting link. Sure glad I don’t use any of the social network programs — if I want to get in touch with someone, I use the phone (anyone remember the rotary dial?) or, in some cases, snail mail. Little slower than e-mail, but it will do. Cheers!

#81 Sky — “o some of you confused men on this forum:”

Just a guess, but wouldn’t that be all of us?!

#89 Steven Rowlandson — “Is that the plan Garth? Works for me. — Garth”

See #81 sky above!

The politics of austerity will lead to deflation, and then depression.” — Garth” — One thing always leads to another.

The creation of the US Fed on xmas eve 1913 led to WW1 in 1914, GD1 (after a short time of partying in the ’20s) led to WW2, the great rebuild then takedown (now) will eventually lead to WW3, why do we keep re-electing these politicos – banxters, who seem to be fully responsible, yet hardly any will ever get named or charged?

It could be that I am just out to lunch on this, but there it does seem there is a clear thread running between all these.

#117 Soylent Green is People — Yep. The loonies are running the asylum, and we keep electing them. Seems like we are the greater loonies for giving these numbnuts positions of power over us.

#131 shanks — “. . . but the LOVE of money.” — Correct, which is why I appreciate disciple’s, yours and a few other posters as you’re willing to stand out from the crowd.

It is the love of money, which is nothing more than a useful tool — not too much, but just enough is all we need.
*
To cool the rhetoric, let’s have some Underground explosions and / or ‘quakes in the US.

#169 TurnerNation on 09.27.11 at 7:18 pm

#86 disciple on 09.27.11 at 9:33 am

I enjoy his posts; rightly or wrongly they make me think. And yes I am aware the history books are written by victors. Much of what we are indoctrinated into is pure nonsense/fiction.
Humans! A few generations ago we’d have burned at the stake anyone who suggested the Earth is not flat. And we are different now, how?

#170 gtrz4peace on 09.27.11 at 7:39 pm

Kudos to you Garth, for holding off the smarmy folks you call “tea baggers” (who knows what political party they really belong to or which Battle Of the Imaginary Friends being they pray to). You are CORRECT. The politics of austerity will cause political unrest that will not make the world a very nice place to be, even for the plantation owners. All those wetting their pants with post-apocalyptic horniness really need to consider that the answer to “ask not for whom the bell tolls” is “It tolls for thee.”

#171 GregW, Oakville on 09.27.11 at 7:51 pm

Hi Garth, It will be interesting to see just how far and fast change will come from the AI machine-robots and the impact on our world in the coming years.
I wonder if mankind is truly ready and wise enough to manage/control it for the benefit of all?

The first article might cause one to wonder about their own profession, but what I find really troubling is the changes coming to the military and mans ability to kill each other with the new technologies. We are all just fallible flesh and blood human being when you get right down to it after all. Machines do not care about people or take sides they just fallow code, and some times break down and kill anyone.

Are more automtic killing machines really a wise thing for mankind to keep working on?

Will Robots Steal Your Job?
You’re highly educated. You make a lot of money. You should still be afraid.
http://www.slate.com/id/2304442/

Autonomous Robots in the Fog of War
Networks of autonomous robots will someday transform warfare, but significant hurdles remain
http://spectrum.ieee.org/robotics/military-robots/autonomous-robots-in-the-fog-of-war

Robot Cannon Kills 9, Wounds 14
http://www.wired.com/dangerroom/2007/10/robot-cannon-ki/

#172 Moneta on 09.27.11 at 7:58 pm

Herb on 09.27.11 at 6:36 pm
—-
Don’t worry I have not forgotten! I was looking for stats to confirm the data that is coming from the top of my head.

From the top of my head , the public service represents 20% of the workforce and probably owns 40% of the TSX.

I found a report saying that 38% of Canadian workers are covered by an RPP. 50% of those in the public sector.

So it’s pretty obvious that a large percentage of workers in the private sector are being pushed hard to keep earnings up. Even if nothing is stopping them from investing in the TSX, many are making ends meet and don’t have any extra cash to invest. This eps maximization does not benefit them but the shareholders which are usually large public pension plans with a lot of clout.

How much longer can we ask the private side to take a smaller pay to boost earnings in order to satisfy shareholders which are largely represented by the public service?

The question I have been asking myself if what the market would look like today if decades ago, the public service had been offred DC plans. Would private workers have more share in corporate profits? I’m still pondering this.

I always aks myself these questions…

1. How does it work?
2. Who is gaining and who is losing?
3. Will there be a fight?
4. How much longer can it stay this way?

I just don,t see how public pensions can get paid out. Right now they are converting DBs to DCs but it’s not enough. They’ll have to go up the age demographics. If you’ve got a public pension, prepare for a shock because it might not be as guaranteed as you think.

#173 young & foolish on 09.27.11 at 8:11 pm

Our economy is changing with the retiring of the boomer generation …. demographics will alter this economic model ….

Something to keep in mind: It’s easier to bring the 3rd world to the 1st than the other way around (7 billion and growing).

By the way, can anyone verify this statement : “More than 100,000 people a year – a population equivalent to the city of Kingston – move into the Greater Toronto and Hamilton Area (GTHA) each year.”

#174 Nostradamus Le Mad Vlad on 09.27.11 at 8:21 pm


#169 miketheengineer — “I have a potential opportunity right now.”

Don’t think twice. Take the job, make the move, keep in touch here and enjoy yourself! Life is short.
*
Greece What if Germany says no more? Silver Weird; Knife Edge The US (thus the west’s) economy on it; Geithner “”Yee-HAAAA; now the entire world is hopelessly trapped in debt to the private bankers! – Actually, Merkel in Germany has said no to the Eurobond plan.” wrh.com which is why they will possibly say no to Greece, setting the stage for a complete western default and making us further debt slaves; John Embry “The economy is almost destroyed and what remains fights among itself with one form of wealth constantly at war with others, with all of humanity as collateral damage.” wrh.com.

14:09 clip US wars serve powerful interests, but they still don’t have any power over me; Libya Just like Iraq, destroyed for western greed (interests); 5:17 clip Police brutality. Damn right people have a right to protect themselves; Alternative ‘nets In case CSIS, RCMP, FBI and CIA try to shut down the regular ‘net; Fukushima Desolation, like Nagasaki after the second bomb was dropped; Anyone remember this from the ’70s? The fire in the North Tower was hotter than 9-11, but didn’t collapse. How strange; Organic Agriculture A threat to Monsanto certainly, but to the food chain? No.

Pakistan “War with Pakistan will mean war with China. Was Israel worth it?” wrh.com and Time of Need; Kosovo “The US/NATO Encirclement of Russia.”; Michigan and New Haven. Nuke plants not working too well; Meteorite The higher-ups are getting pissed at us; Obummer Solyndra and Evergreen Solar. First Wall St. now Shit St.; Racism from the Democrats; Space Age China begins as America finishes; Spanish parliament dissolved (in preparattion for a massive default?).
*
Chaos. disciple, shanks etc. Two min. clip — further news on Comet Elenin (another US psy-ops?).

#175 JohnnyBravo on 09.27.11 at 8:21 pm

#168 miketheengineer on 09.27.11 at 6:42 pm

Not valium. But it’s an oft-imitated line. The original is from “The Treasure of The Sierra Madre”. A group of Mexican bandits posing as Federalis, and Bogart asked their leader to show their badges… http://www.youtube.com/watch?v=VqomZQMZQCQ

Good movie. You should watch it. It talks all about gold and greed and how both can affect people. There were no ETFs in Mexico at this time.

By the way, this is also the movie that inspired this performance from Bugs Bunny…http://www.youtube.com/watch?v=VWTUntToZrM
(@ 4:30, 5:50 and 6.45)

#176 Bill Gable on 09.27.11 at 8:22 pm

Mike the engineer.

One word.

Houston.

’nuff said.

#177 ballingsford on 09.27.11 at 8:25 pm

What a farce, the markets rallied higher today because the Eurozone problems have been addressed. Also, Greece says it’s bailout is not a concern.

Gag me with a spoon! Pppllleeassee! I can’t take this crap any longer!

Who’s the major manipulator of the markets, Real Estate, and media these day anyway?

Betcha no one has the answer to that where they are able to share!

Hoodwinked?!?!?!?!

#178 TurnerNation on 09.27.11 at 8:34 pm

146 GregW, Oakville on 09.27.11 at 3:49 pm

Ohoh he is turning into another Notradamus!

This is not a Silicon Carbide blog!? ;)

#179 TurnerNation on 09.27.11 at 8:40 pm

145 Debtfree on 09.27.11 at 3:48 pm

Such a party is running in the current Ontario election:

http://www.elections.on.ca/en-CA/CandidatesAndParties/PoliticalParties/

“Party for People with Special Needs”

– And what is this one?

“Pauper Party of Ontario”

#180 Macrath on 09.27.11 at 8:58 pm

#169 miketheengineer

You will be paying a lot less taxes.The cost of living is cheaper than the US average. Maybe get some health care coverage from Canada that covers you out of country.
I`ve heard that Engineers in the States actually get some respect. You might like that. Anywhere in Texas has to be better that the GTA. Adventure awaits!

Best of luck.

#181 Suede on 09.27.11 at 8:59 pm

Clip of the Yes Men trader featured on the BBC posing as spokesman for DOW Chemical in a previous media parlay

http://www.youtube.com/watch?v=LiWlvBro9eI

#182 sam.i.am on 09.27.11 at 9:06 pm

#169 – mike

Talk to a GOOD cross-border tax accountant and US immigration attorney who specializes in dealing with Canadians. A lot of things can go wrong if you are not careful. A lot of things can go right if you are.

#183 Timing is Everything on 09.27.11 at 9:07 pm

The Canada Pension Plan is a major investor in the bond market. That’s your money. Get a grip. — Garth

Can I get MY money back (out) now and invest it myself?

#184 Timing is Everything on 09.27.11 at 9:19 pm

Hey Nosty…ya just can’t make this stuff up….’Tis a strange world indeed…albeit entertaining….

Enter sno-cone.

http://tinyurl.com/6bh2lb3

#185 Nemesis on 09.27.11 at 9:29 pm

“It is the love of money, which is nothing more than a useful tool — not too much, but just enough is all we need.” – Nostra

Forrest Gump’s Momma always said, “A man only needs so much money. The rest is just for show.”

Or as Forrest said, “Stupid is as stupid does.”

And, of course, “Life is like a box of chocolates.”

10 years from ‘page’ to cineplex.

PS to GT – “Just pucker”… Good advice. So good I may just let you ‘sweat’ TheFamilyOffice one day.

#186 John Reid on 09.27.11 at 10:23 pm

If we are discussing the potential of Ottawa Financial genius, did Carney or Flaherty call the last recession?

I did and I know of perhaps 6-9 other people who also did. None of them were financial advisers. All did their own trades very successfully for years.

#187 Macrath on 09.27.11 at 10:24 pm

#168 miketheengineer
Why? Cause I am prepared…that’s why?
_____________________________________________

Sorry Mike, my spelling is off today, must be the Valium.

Anyhow, being prepared is smart move, It does not have to be about doom and tinfoil. A lot of folks found that out during the ice storm. Freezing in the dark for way too long. Nature can get real nasty when you least expect it.

I think this guy Is from Texas.
http://www.thesurvivalpodcast.com/

#188 jess on 09.27.11 at 11:13 pm

Westerman

You said, “Want to know why western society is going downhill like a highballing frieght train?

Enlightened Western man – have you have read Oswald Spengler thoughts on that very question The Decline of the West?

#189 Derek R on 09.27.11 at 11:51 pm

#148 The thing in the basement on 09.27.11 at 4:21 pm wrote:
56 Derek R – no I dont see that one working. Interest paid to the mortgage holder is already taxed as income

Well like I said it’s just my pet solution. I could defend it but I’m not going to because it wasn’t the main point that I was trying to make. My main point was that it is possible to design a stimulus that doesn’t require deficit spending. Since you didn’t attack that, I take it that you agree.

#190 Grand Supercycle on 09.28.11 at 12:37 am

As mentioned for some time, the SP500 big picture remains bearish and despite market intervention the March 2009 lows unfortunately will be breached.

My long term indicators have continued to warn of USD strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.

Long term charts at blog.

Be careful folks.

#191 disciple on 09.28.11 at 9:15 am

#156 neo…fear is ALWAYS irrational. The fear of death, in particular, is the most irrational of all. W.B. Yeats taught me that as we get older, the loss of that fear of death leads to apathy. What I have discovered is that apathy is the first step in the next phase of self-discovery.

#192 allister on 09.28.11 at 1:38 pm

101 smokin man

oopps – just left here and read the news – YLO dividend is cancelled. So much for dividend investing.

Too bad another great Canadian company is run into the ground by Canadian business school managers.

#193 GregW, Oakville on 09.28.11 at 2:02 pm

Hi #180 TurnerNation,

I’m pretty sure Nastra is a one of a kind ;)
I actually look at his links, not that I believe them all.
I question my world view more than I once did, especially after I saw live a BBC reporter … and … (But I digress)

I through the articles were interesting. I like hearing about the potential new shinny stuff. Doesn’t everyone? Not that all new stuff works out or leads to just good out comes all the time.

If you happened to have stock in a Silicon manufacturer you might want to know for example. Not that I have any idea what SiC might do to it’s future value.

I hope you got some entertainment value from the pics at the last link anyway.

I’m assume your comment was meant to be in fun (poke). lol

#194 Rook on 09.28.11 at 2:35 pm

RE: #112 nkc

Prankster or not, that guy is a joke. Never trust a guy who dreams of a recession. You can’t expect any rational analysis from someone who hopes for a certain outcome. Obviously his predictions will always be flawed by his hopes. If he is a real trader, I think he is just hoping for another opportunity like 2009 because he completely missed the rally since then. Instead of acknowledging his mistake and accepting reality, he is hoping for a 2nd chance.

I believe that is also true for many of the doomsters who post on this blog.

#195 GregW, Oakville on 09.28.11 at 7:50 pm

Hi Nostra, This is off topic and I’m sure that not everyone is interested here, so no link. This is in yesterdays comments, which I’m assuming most readers don’t look at? I found the article interesting anyway. If your curious search “Establishment Safety Debate: Thimerosal in Vaccines vs. Admittedly Dangerous Methylmercury” by Eileen Dannemann Sept 28, 2011