cyprus 1

Exactly four years ago my retired cousin did three things. She called the financial advisor I’d found for her three years earlier. “I want out,” she said. Then she went to his office, collected a cheque and put her money in a CIBC savings account. Finally, she called me. Empathetic as always, I told her she was an idiot.

Despite having a balanced portfolio with just a fraction of the stock market’s volatility, her investments had declined by 22% while the Dow tanked 60%. Completely mesmerized by CNN and ignoring the advice of her financial guy, she bailed. A year later it was evident this had been the bottom. So I told her again she was an idiot.

I no longer get a call on my birthday.

People do this repeatedly, and never with good results. They buy high. They sell low. They scoop up unknown mining shares on a tip and have their asses handed to them. They think every market hiccup’s a 2008 redux. They gamble instead of invest. They never sell stuff that goes up because it’ll go higher. They turn into yield pigs. They take investment advice from relatives who drywall for a living. They panic instantly. They buy socks on sale, but never stocks on sale. They trust no one. And most fail.

Now we have this. Here’s Kate.

With  banks confiscating depositor money in Cyprus and legislation on the books to do the same in several other countries, how do I protect my RRSPs? There are rumours that the US gov’t. may force all IRA holders to buy government treasuries. Do you think this might happen in Canada? Also will holding my mortgage in an RRSP protect me, as long as I am paying my monthly payments on time. Would it be a safer option than holding stocks and bonds in my RRSP that the government may try and control?

She sent this to me yesterday amid the latest news of Europe’s bailout of the sad little state of Cyprus. The headline news is that in return for a $13 billion bailout, which will save the country from bankruptcy (of its own making after having built an economy based on dodgy banks), large depositors will be slammed along with bank shareholders and bondholders. In fact, the second-largest Cypriot bank will be forced out of business.

Typically, media coverage is focused on people lining up at ATMs where daily withdrawals are limited to a pathetic $130. Bank branches are closed for a week, which is better than the alternative (forever). People with big bank balances, including businesses and lots of rich Russians, will lose 20% to 40% of their funds in a one-time tax. Without the EU bailout, of course, a currency collapse might mean double the losses.

The bank being shuttered, called Laiki, will be split into two, one holding protected deposits under 100,000 euros, the other holding larger balances which will be taxed. It’s estimated about $31 billion in Russian money is being held on an island of only 800,000 people, which should tell you something about how Cyprus has been run.

The implications? If you have a fortune stashed in a bank in Slovenia, Spain or Greece, or own some of its bonds, then pay attention. Uninsured depositors are now fair game. This could certainly encourage some people to take all their money out, so they can feel safe before being mugged on the way home. Any bank runs or bond market selloffs would, of course, makes these stuttering states even weaker.

Ironically, though, the attention messy, conflicted little Cyprus is getting could ensure that European leaders never repeat this tactic. After all, bailouts and austerity measures don’t work when there are riots in the street.

But back to poor Kate, who’s obviously been wasting time reading that damn Internet. There is no legislation now passed to steal bank deposits in other countries. The US would never force retirement money into 1.7% government bonds. There is zero threat to private wealth, investments or savings in Canada. No government in a major country could ever control the stock or bond market. There is no contagion. There will be no financial collapse. No Canadian bank will fail. Nobody’s after your RRSP.

Still worried? Some days ago I wrote about what $100,000 deposit insurance covers (CDIC), and how investors are covered for at least $1 million in the event of a financial institution crumble (CIPF). The best protection, however, is the kind of portfolio I keep writing about – broadly diversified and carefully balanced between growth assets and safe stuff. The biggest risk for 90% of people remains the same. It’s not losing money, but running out of it.

Ask my idiot cousin.


#1 TurnerNation on 03.25.13 at 8:09 pm

When Bandit attacks?!

#2 TurnerNation on 03.25.13 at 8:11 pm

No I’ve got it. The Squamish Sasquatch!

“Draft budget shows 12 per cent tax hike
Squamish Chief-Feb 28, 2013

Squamish property owners are facing a tax hike of more than 12 per cent … if they want to whittle down the projected 12.1 per cent tax increase, “

#3 tomavitch on 03.25.13 at 8:11 pm

I love the pic! That shouldbe enough to scare her forever more.

#4 guelphstudent on 03.25.13 at 8:11 pm

Apparently there was a loophole and many Russians were able to move their money out of a Cyprus according to ZH

#5 AK on 03.25.13 at 8:12 pm

#182 Macrath on 03.25.13 at 8:04 pm
“I think there is an enhanced couch potato, some core indexes and satellite investments. I don`t think auto pilot is a good strategy. You have to stay focused and involved with your investments.”
Personally, I don’t believe in the couch potato approach.
I follow the Warren Buffett model, I look for value and hold for ever.

#6 The Man From Nantucket on 03.25.13 at 8:15 pm

Dialled in early on a whim to read yesterday’s comments….maybe I am the guy today….first?

Thanks for putting Cyprus, and it’s impact on this side, into perspective.

#7 Vago on 03.25.13 at 8:15 pm

Doesn’t the Fed control the markets, in other words don’t fight the fed!

#8 JO on 03.25.13 at 8:16 pm

Great post need to panic. Taxes will rise sharply, gov’t will get pushy, but we should make it through with some bumps and bruises. If you really do lose a lot of sleep worrying about this low risk possibility, you can put in place some modest but prudent practices in place to provide a hedge against the unlikely event we go Greek or Cypriot:
-keep only savings/GICs under the 100K
-if you really need to have more than 100K in safe and liquid stuff, look at buying short term Tbills
-watch the custodians of your ETFs and funds…Canadian custodian should be fine and even US, but if you hear a lot of bad news about your custodian, then bail. It is not likely anything would happen as your assets are not suppose to be comingled but it is possible (MF Global anyone ?)
-if you have a large NW, consider putting a small part of it in bluest of the blue chips and hold the shares in certificated form which means you are the registered owner and the shares are not held on your behalf by the broker
-hold 5-10 % of your NW in physical gold/silver
-make sure any long term debt is fixed rate
-pay off your house eventually
-keep a month of food and money and candles and back up power, etc.

#9 Observer on 03.25.13 at 8:21 pm

No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors.

#10 NOTHING SURPRISES on 03.25.13 at 8:23 pm

Mr. Turner has some emotional sensitivity resulting in a personal bias against certain people attempting to insert monetary facts into this blog.

Ask him!

However, in all probability no one will see this posting.

#11 Steve on 03.25.13 at 8:24 pm

Hey Garth,

Suppose I have 1/3 in Fixed Income, 1/3 in Growth Oriented Common Equity (Some emerging and some developed) and 1/3 in Other Suff like commodities, REITS and Preferreds. Where is it optimal to keep each asset class if I have 1/3 RRSP, 1/3 TFSA and 1/3 Non-registered?

#12 Smoking Man on 03.25.13 at 8:24 pm

What I find halarious

People freek at the tought of the govt taxing deposits. They cry murder, theives basterds..

Yet when they take 20 to 47% of your loot on a pay check. well it is what it is.

The herd funny arent they….

#13 Andrewski on 03.25.13 at 8:26 pm

The World is rife with Cypress-to-be stories, yet through all this and more, it’s most important to set-up your own online investment account, or solicit pofessional advise if you’re suffering time poverty. As many before have said, “it’s not timing the market, but time in the market”.

#14 Brunette on 03.25.13 at 8:26 pm

Kate sounds like my mom!

#15 dorano on 03.25.13 at 8:28 pm

First! Second? lol

#16 Ann on 03.25.13 at 8:29 pm


#17 LSC on 03.25.13 at 8:30 pm

What will be the impact on stable economies like the US, Canada, Australia etc….when depositors start moving money out of Spain, Italy, Portugal etc ?
Will rates drop even further?

#18 not 1st on 03.25.13 at 8:45 pm

That being said, think about what the non local govt can do with a stroke of a pen and all govt investment vehicles are fair game.

Do what the 1 percenters do cause the govt will never risk offending them. They buy equities instead of bonds and keep cash in corporate shells and companies, not in personal bank accounts.

#19 AK on 03.25.13 at 8:49 pm

#7 Vago on 03.25.13 at 8:15 pm
“Doesn’t the Fed control the markets, in other words don’t fight the fed!”
You got that right. I learned that in 1987. Same year I learned not to bet against America.

#20 AK on 03.25.13 at 8:51 pm

“Ask my idiot cousin.”
Speaking of idiot cousins, I have a cousin who is holding a large sum of euros in the National Bank of Greece on Danforth ave. I am trying to figure out a reason.

#21 Arse on 03.25.13 at 8:58 pm

Mister Garth Turner is the greatest Canadian in some people’s eyes.

#22 Chickenlittle on 03.25.13 at 8:58 pm

My uncle did this to me when I was four!! I just realized that was 30 years ago now…wow time flies.

SM: That was actually hilarious! You are so right! No one offers even a peep when Uncle Steven takes a huge chunk of your income, but a pox upon the lot of you when someone suggests that the government MIGHT tax some of your savings in the near future!

BTW: They already do. They’re called RRSPs.

#23 AK on 03.25.13 at 9:00 pm

#8 JO on 03.25.13 at 8:16 pm
“-hold 5-10 % of your NW in physical gold/silver”

#24 Who Cares on 03.25.13 at 9:12 pm

Why would I ask your idiot cousin? I’ve got about forty idiot cousins of my own.

#25 DDCorkum on 03.25.13 at 9:13 pm

#11 Steve on 03.25.13 at 8:24 pm (quote shortenned)

Suppose I have [some] fixed income, common equity, and other stuff like commodities, REITS and preferreds. Where is it optimal to keep each [between] RRSP, TFSA and Non-registered [accounts]?


Since RRSP withdrawls are taxed at full rate, you might as well concentrate your fixed income there.

If your tax bracket is low, you can take full advantage of the dividend tax credit by concentrating dividend producing companies in the non-registered. As you move up into higher tax brackets, the formula begins to shift in favour of investments that produce capital gains.

Don’t forget that tax may be withheld on your foreign investments. This isn’t an issue for non-registered accounts since you can claim it. Its also not an issue for RRSPs if you are investing in the USA or other countries that we have a tax treaty with. However, TFSA accounts can have a sort of “limbo” status where foreign tax might be withheld and it cannot be claimed.

Final note: don’t try to be extreme and concentrate things 100% into each of these categories. You won’t be able to easily adjust or rebalance your portfolio if you treat these guidelines as gospel.

ie, suppose your bonds do well. Are you going to withdraw them from your RRSP just to rebalance them to equity because equity belongs in a TFSA? That would be a silly move!

#26 Nemesis on 03.25.13 at 9:15 pm


EnglishLiteratureMajors ought to know better than to dabble in absolutes…


#27 The Affluent Boomer on 03.25.13 at 9:16 pm

Well said Garth

A diversified stock portfolio designed within one’s risk profile the best protection.

#28 Cash is King on 03.25.13 at 9:20 pm

Could have been worse. Your cousin could have withdrawn her portfolio and bought a Kia.

The Kia “Portfolio”. It does have a catchy name.

#29 Nemesis on 03.25.13 at 9:21 pm

#30 Cypriotitus — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 03.25.13 at 9:22 pm

[…] Exactly fours ago my retired cousin did three things. She called the financial advisor I’d found for her three years earlier. “I want out,” she said. Then she went to his office, collected a cheque and put her money in a CIBC savings account. Finally, she called me. Empathetic as always, I told her she was an idiot. Continue reading → […]

#31 Observer on 03.25.13 at 9:24 pm

The Cyprus rescue package – under which bank customers will have a chunk of their cash seized to bail out troubled lenders – could become a template for dealing with other creaking banking systems, Jeroen Dijsselbloem suggested.
The remarks from the head of the eurozone’s finance ministers contradicted days of assurances that the Cyprus bank deposit raid was a ‘one off’.

#32 Steady Eddie on 03.25.13 at 9:25 pm

When you put money into a bank it is a loan to the bank. if it ever came to the point where CDIC had to actually pay the insurance for depositors, I would shudder to think of the purchasing power of the dollar at that point in time… basically, depositors insurance is a scam. To my first point, as the bible says, consider a loan a gift.

$1MM Zimbabwe dollars is useless, it is not the quantity of money, but it’s purchasing power over time.

Can it happen in Canada or the US? Sure, just look at what happened to the German export powerhouse of Europe in the 20th century.

It’s all about cycles, changes in economic and political policies. The question is, are we headed for a Renaissance or the Dark Ages…

Without equality before the law….. I don’t even want to think about it…

#33 Kaganovich on 03.25.13 at 9:27 pm

#177 Shawn Allen

How does stock dilution fit into your theory?

#34 Al-Berta on 03.25.13 at 9:30 pm

Even better than gold and silver is to have your own place that is self sufficient, with neighbors that are not property speculators but a member of a community ( and also those who don’t hold passports of convenience).

Grow your own fruits with the best high tech thermal techniques. Spend your money on your own greenhouse, study health and medical knowledge. Take a course on a useful skill.

These are the things truly of value keeping in mind that currency will continue to debase.

Or, have lots of money, which is easier. — Garth

#35 Big Al New on 03.25.13 at 9:39 pm

“Do you think this might happen in Canada?”

“The government proposes to implement a “bail- in” regime for systemically important banks.This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes it’s capital, they can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital” page 146 of the Federal Budget 2013. So I guess the answer is yes!

That is not a quote from the budget, and the answer to “might it happen here” is certainly no. — Garth

#36 NOTHING SURPRISES on 03.25.13 at 9:46 pm

You did allow my post to be listed.

Thank you.

Will you prevent my original facts I attempted to post last night to be posted tonight?

#37 Smoking Man on 03.25.13 at 9:47 pm

Was watching the TV show the following, the bad due killer was talking to his minion about screwing up the job to get his wife…

Don’t worry sir, I have ‘2 constitutional extremist to do the job’

The machine at work, demonizing constitution loving Americans.

What the machine don’t know yet, is most people that witnessed that feel the way I do… It’s old tricks no longer work, so plan B, Fima camps

#38 Alyce in Wonderland on 03.25.13 at 9:48 pm

If you have a fortune stashed in a bank in Slovenia,
Oops, Slovenia is far safer place than one could imagine. You are probably mistaken with Slovakia. Slovenia is next to Italy, beautiful and rich country.

#39 Smoking Man on 03.25.13 at 9:50 pm

Smoking Man for the leader of the resistance…

Na, too much work, rather be the play by play guy.

#40 Waiting and waiting on 03.25.13 at 9:51 pm

That’s a very good tip.
If you don’t want to get phone calls, call them an idiot repeatedly.

#41 Smoking Man on 03.25.13 at 9:55 pm

While I’m on thus crazy delusional Fama camp rant.

I figured it out, it’s for the boomers, no money for retirement, and kids making no money to pay taxes to support this, FIMA Camps are nursing homes of the future for boomers.

#42 CrowdedElevatorfartz on 03.25.13 at 9:58 pm

Soooooo did the “Yeti” get to scare the pee out of his poor victim?
Like the Cypriot banks have done to their clients?

#43 AK on 03.25.13 at 10:00 pm

Insight: Money fled Cyprus as president fumbled bailout

#44 rosie "moving backwards" on 03.25.13 at 10:00 pm

“It’s not losing money but running out of it”. Who-all remembers that catchy sing song we all did on the banana bus going to school. You too could relive those mythical days.

#45 blok existentialist on 03.25.13 at 10:04 pm

#13 … nice quote, but doesn’t begin to compare with ‘They buy socks on sale, but never stocks on sale.’
I may have to commission this as a needlepoint so I can hang it over my laptop.

#46 GirthTurner on 03.25.13 at 10:07 pm

Oh mighty master Garth, what does your crystal ball see in store for the canadian stock market in the rest of this year? Any particular segments pointing out?

#47 Big Al New on 03.25.13 at 10:10 pm

Page 144-145 reference the page numbers and not the PDF page number.

#48 moon shot on 03.25.13 at 10:11 pm

Pay taxes?
Go in the red take out a heloc and buy gold.
Stick it to the man.

#49 Good Authority on 03.25.13 at 10:20 pm

The man walks into the room and calls out his “idiot cousin” who unfortunately has been taken by the banksters. The retort from the man to give the “idiot cousin” comfort is –“trust me, I’m from the government”.

Trust is gone Garth. Canada’s government cannot be trusted – a billion to beat and jail innocents at G20; a billion to move a gas burning site to rig an election in Ontario all the while plunging recklessly deeper into debt every day.

I watch what the banksters get governments to do around the world. There is no reason at all to think that governments here will act differently.

#50 Angela on 03.25.13 at 10:26 pm

Now I live in the country but seems to me housing and feeding your neighbour’s thoroughbred bears for a decade in hopes he’ll buy the hay off your back field this fall? Just saying.

#51 James Wong on 03.25.13 at 10:27 pm

“There is no legislation now passed to steal bank deposits in other countries.”
There may not be legislation yet but the Canadian government has clearly stated their intention for a “bail-in” for any TBTF Cdn Bank if required.

A quote from the 2013 Federal Budget:

“The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.”

Sounds like the bank liabilities refer to unsecured deposits – the same idea that was floated by New Zealand recently for a bank bail-in.

#52 Dan from Richmond Hill on 03.25.13 at 10:28 pm

#39 Alyce in Wonderland on 03.25.13 at 9:48 pm

You would be surprised, but it is Slovenia, not Slovakia. Google a little bit and you will find more about the problems they have.

#53 espressobob on 03.25.13 at 10:37 pm

#49 moon shot

More like, heloc means more debt for you, Gold produces more losses, Oh and the taxman will be looking for penalties & interest.

Good investment decision?

#54 Joe on 03.25.13 at 10:39 pm

It’s different here.

#55 hobbygirl on 03.25.13 at 10:40 pm

What’s your take on Bitcoin currency?

#56 Sukh on 03.25.13 at 10:43 pm

What you have Garth is a lot of experience combined with knowledge. Thank you for doing this daily blog and imparting that combination to us.

#57 :):( Ying Yang on 03.25.13 at 10:48 pm

#42 Smoking Man on 03.25.13 at 9:55 pm
While I’m on thus crazy delusional Fama camp rant.

WTF????? Smoking Man you do no drink enough or ingest enough mind altering pharmacuitcles. If this is the Machine talking then the Machine needs a tune up. It’s FEMA BTW. Just for fun try posting you’re stuff while on tranquilizers we may actually comprehend what you are trying to say. A hell no forget it I like your non-sensible stuff better. Never mind!

#58 Tom Vu on 03.25.13 at 10:54 pm

Smoking Man

You leaving your brain to science?

Also : before or after kick bucket ?

#59 CarPicker on 03.25.13 at 10:54 pm

The ongoing theft of what has already been stolen. Time to buy a condo in paralia Thesaloniki.

#60 Timing is Everything on 03.25.13 at 11:08 pm

Next up (or down actually). Slovenia…

Slovenia’s Nascent Cabinet Under Pressure to Avoid Cyprus Fate

‘European Union officials are striving to contain a debt crisis that prompted Cyprus to join Greece, Portugal, Ireland and Spain in agreeing on a bailout.’

#61 Mike on 03.25.13 at 11:11 pm

Any recommendations for growth assets ETF’s or links I can read up on it?

#62 Telecon on 03.25.13 at 11:25 pm

So in one night, Cypriot depositors with $100k+ will lose 20-40% in one night. During the Great Depression, between the panic years of 1929-1933, only 4% of total deposits were lost in the United States due to bank failures. Then came deposit insurance. Thank goodness for deposit insurance, the great saviour of the financially inept. Now everybody’s financially inept and have no idea nor concern with what their bank is holding on their balance sheet. Why should they?? You’re always richer than you think.

“liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.” Andrew Mellon, 1929

#63 Uwinsome on 03.25.13 at 11:32 pm

More examples of Vancouver insanity.

#64 not 1st on 03.25.13 at 11:38 pm

Socks on sale…clearly identified to the buyer by the glaring red or yellow sticker on the merchandise the endless paper and flyer advertising, the blaring mall announcer and comparison shopping

Stocks on sale….usually accompanied by irrational panic in the overall economy triggered by politicians, day traders, central bank printing presses, sovereign debt, bank insolvency, currency devaluation, TV talking heads et al.

#65 Bazza the impaler on 03.25.13 at 11:46 pm

Never say never.

#66 Bucky on 03.25.13 at 11:53 pm

Confiscate 40% of Russian depositor money?

I bet the life insurance companies are racing to cancel the policies of the Eurocrats responsible for that move! The actuaries probably measure life expectancy of people who take money from wealthy Russians in hours.

#67 Richard and Zeus on 03.26.13 at 12:10 am

#188 bill on 03.25.13 at 8:57 pm
on richard and zeus’s website it says :
‘Government inquiries are also welcome”
it looks like richard and zeus dont want to pay the government any taxes but dont mind taking money from them…
You mean like giant corporations and banks that never pay tax? Or launder money for Mexican Cartels (HSBC). And by the way…..we will never get a govt contract in Kanaduhhhhhh…..because like most things here……all military is a monoly with Colt Canada. We are doing vey well selling in the USA though thank you very much bringing “taxable” income home to pay for your pension and govt benefits Billy.

#68 John Prine on 03.26.13 at 12:16 am

“Of it’s own making after having built an economy based on dodgy banks”

Just the bankers and politicians I assume are responsible, no one else, but they all pay the price. I think this is why a lot of small holders the world over worry as they have no control and no longer feel they can trust anyone.

#69 T.C. on 03.26.13 at 12:21 am

Ah – but you see, it’s the lemming psychology that runs the markets.

And logic works only if one has all the information.

When was the last time an investor had all the information?

Lemming behavior = fear + greed + stochastic events;

| |

Investing Logic = a + b + c + the unquantifiable.

Cyprus may very well deserve everything it gets. And the E.U. has once again completely buggered the marketing of this issue.

The Dow has topped-out. The U.S., the Japs and the E.U. keep expanding the money supply. Bubbles are deflating, wages are stagnating, and Joe Public only gets 100 bp for his GIC – which kind of suggests that the national currency is actually really worth little or nothing. At least to the lemming mind-set.

So Mr. and Mrs. Middle Class Lemming are getting vewy vewy nervous.

And thats why a bank run in a 2nd rate country with an insignificant population can be very dangerous, even when logic suggest that they shouldn’t be.

And by the way, at one time the NDP did float the idea of a 10% tax on RSPs. So Katie is not quite the moonbat she appears to be. She’s seen this before, although she can’t quite pinpoint when and where.

#70 Patient in Richmond on 03.26.13 at 12:21 am

Noticed that several Million + houses in Richmond are now showing “Sold” stickers … Very surprised by this …..

#71 mac on 03.26.13 at 12:25 am

31 Billion of foreign money being held in an island of 800,000 aye? We’ve got 600,000 people in core Vancouver and waaaaaay more than 31 Billion in foreign money being held in SFHs and condos. Puleeze. Get real.

#72 Humpty Dumpty on 03.26.13 at 12:28 am

Revenue Canada to give a pencil sharpener to all taxpayers who file early….

#73 David on 03.26.13 at 12:33 am

The amount of funds on deposit in Cypriot banks was in the order of eight times the GDP. No doubt Greek tycoons and Russian oligarchs are having some sleepless nights.
Garth is correct on this one, this contagion is unlikely to wash up on our shores.

#74 The Patient on 03.26.13 at 12:40 am

#36 Big Al New

Thanks, Big Al, for reminding this pathetic blog about how our feds are planning a “bail-in regime” in the event of a systemically important bank failure. (And thanks to JO for originally bringing this matter to light on Friday.)

Garth’s response to Big Al: “That is not a quote from the budget, and the answer to “might it happen here” is certainly no. — Garth”

Garth, true; it’s from the Fed’s Economic Action Plan 2013. But, really, it may as well have been in the bloody budget. The author of both docs is the fed govt. The point is: the fed’s are prepping for a bail-in protocol, however unlikely. Certainly can’t happen? Do you understand the meaning of “certainly”? Highly improbable, ok. Certainly not? C’mon. Pride goeth before the fall.

And for those that want to see for themselves the Fed’s confessed bail-in plotting, see here:

Economic Action Plan 2013 (see p. 145-6, as it appears on the document, lower left-hand corner of each page, not the searchable PDF):

#75 Vamanos Pest on 03.26.13 at 12:45 am

“they buy mining stocks on a tip and have their asses handed to them”

Did that.

#76 Crash Calaway on 03.26.13 at 1:10 am

This morning as I wolfed down my last bowl of Prepper’s Deluxe Chipotle Chihuahua Chocolate Chip Ice Cream, it hit me like a ton of bricks.
With all that turmoil in Cyprus I’d be a fool not to go over my diversified sock portfolio.
Yeah I was getting pretty concerned about my knit worth so I called in my cousin Buford for assistance.

And it’s a good thing I did cuz Buford told me the sock portfolio was a real mess.
I had my grey socks mixed in with the argyles and I even had some socks that didn’t match.
Hell I couldn’t even remember which sock I had stashed all my pennies in.
So after spending a couple of frustrating hours going thru the books cousin Buford threw his hands in the air and shouted “I give up… this is a goddamn waste of time”
“Why don’t you just move all your wealth over to a bank”
“After all… Canadian banks are the envy of the world… they’re profitable & honest… and they give you free calendars and pens”
“Besides… It’s not like they’ll ever shut their doors, freeze your account or set up capital controls to screw you… This is Canada wise up man!”

So there I was with all my financial incompetence laid bare, and for a moment I actually toyed with taking up my cousin’s suggestion.
But the more I thought about it, the more I visualized myself standing subservient like a child awaiting his allowance… standing in a mile long lines hoping to access whatever pittance of “MY MONEY” the New World Odor allowed to be doled out.

Yeah that moment of weakness must have been the ice cream fermenting funny and I just wasn’t thinking straight.
So being a simple man I decided to bring closure to my problem.
I gathered up all my knit worth and returned it to it’s rightful place… the mattress!
I then threw Buford out on his ear and slammed the freakin door behind him.
Now that’s closure

#77 Good to be out on 03.26.13 at 1:31 am

#36 Big Al New

I read the budget and the proposed “bail-in” regime to save systematically important banks sounds like a haircut scenario to me. So definitely yes, the gov’t considers it a possibility. The concept of a bail-in seems to have a number of shortfalls, however, and like typical gov’t policy, focuses on the symptoms and not the cause of bank instability and risk management. At the end of the day its just more can kicking.

#78 M on 03.26.13 at 1:37 am

The myth of Canadian exceptionalism never fails to bring tears to my eyes,


#79 Yaletown Renter on 03.26.13 at 1:48 am

Holy crap, Big Al is correct. Garth, care to translate what “the very rapid conversion of certain bank liabilities into regulatory capital.” means?

#80 Bailing in BC on 03.26.13 at 2:15 am

#2 Turner Nation, I think the Squamish Sasquatch has scared the crap out of some of the investors in Squamish. These two properties are owned by the same “investors” They have been on the market for some time, I believe. Their realtor seems to be trying to start a bidding war to see if there are actually any buyers out there or maybe they are just trying to dump and run. check this out and this!

#81 Bailing in BC on 03.26.13 at 2:17 am

Sorry I think those may be bad links

#82 Ballingsford on 03.26.13 at 4:26 am

Thought that picture was about a little girl being scared of the boogeyman. When I blew it up it now looks like a little girl about to drop kick the taxman.

#83 Buy? Curious? on 03.26.13 at 5:10 am

Garth, is there any job satisfaction in what you do? It seems like the majority of your time is spent telling people what morons they are. I appreciate your advice, even acted on some by taking out a line of credit but some dimwits have no hope of saving themselves. I also appreciate you creating this fun forum where 25% are useful (I mean really useful in the form of links to sites) 25% is boring (not your fault Canadians are the vanilla ice cream of culture) and 50% is plain stupid (again, Canadian culture).

Keep up the good posts and I’ll continue lobbying to get Brad Lamb to run for public office.

#84 phinny on 03.26.13 at 5:56 am

#48 Big Al…

“The Government proposes to implement a ―bail-in‖ regime for systemically important banks…”

“…This will reduce risks for taxpayers.”

Well, I wouldn’t have believed it but there it is. S’pose the Gov is putting the banks on the hook if the housing market goes South? I better pull out all my deposits… Uhm let’s see… oh, well. I’m overdrawn anyway ;0).

#85 Stoopid Idiot on 03.26.13 at 6:38 am

From page 145 of Canada’s most recent federal budget (be reminded that bank liabilities = customer deposits): “The Government proposes to implement a “bail in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital.”

This is kind of interesting, basically this ‘bail in’ regime allows for a Cyprus type activity to save the big banks at the depositors expense. I read articles last year that suggested RBC bank has hypothicated it’s customers deposits (or in the case of the above statement, it’s liabilities) up to 54 billion and CIBC 72 billion.

Some of the articles have different $$ amounts, but you get the picture.

#86 Tony Right on 03.26.13 at 7:07 am

MSM is a gigantic failure. Thank goodness for the internet!

#87 World Traveller on 03.26.13 at 7:13 am


If you are going to meet with bankers or politicians in Cyprus, remember to bring a Geiger counter.

#88 T.O. Bubble Boy on 03.26.13 at 7:37 am

What’s with all the shock over the obscure budget section on an apparent “bail in” model.

Wake up people – what do you think the IMPP (insured mortgage purchase program) did? The government (your tax dollars) swapped cash for shady mortgages.

Yes – now (apparently) we’re talking bank deposits, but is it shocking in any way that this government would make this kind of arrangement?

#89 Carruthers on 03.26.13 at 7:51 am

“People with big bank balances, including businesses and lots of rich Russians, will lose 20% to 40% of their funds in a one-time tax.”

Big bank balances? 100,000 Euros is not exactly being filthy rich is it? Many hard working Cypriots are having their hard earned life savings expropriated. Russians or no Russians.

#90 TurnerNation on 03.26.13 at 8:09 am

Blog Dog Carney, at it again. Meet the new boss. Same as the old boss.

“Bond strategists cut estimates for U.K. two-year note yields at the end of this year to a record, emboldened by the potential for governor-designate Mark Carney to use new powers to pin down borrowing costs.

“The market is pricing in rates being on hold for a sustained period and if we get rate guidance that will reinforce that message,” said Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. Shorter-maturity “yields are extremely low and rate guidance will very much pin them at these levels. If fiscal risk builds you’d expect to see some steepening, with 10-year gilts leading the way.””

#91 Canuck Abroad on 03.26.13 at 8:10 am

Canadians do not need to worry. Canadian banks are among the safest in the world. If you are nervous, watch for ratings changes etc. If Canadian banks do start to head south it won’t happen overnight. There were plenty of warnings out there about the state of Cyprus banks more than a year ago. Take a look at the list below, you will see no banks from Spain, Portugal, Ireland, Malta, or Greece. Hmmm….maybe not a good idea to keep all your wealth in those countries?

This is just one list, there are lots of good resources. If you have bags of money are are keen to diversify, you could keep a little in Swiss, Australian and Singapore banks as well. But for the foreseeable future, none of you should be concerned about Canadian banks. Many other banks would have to fail first and cause global contagion. There are other things to worry about.

#92 Grantmi on 03.26.13 at 8:21 am

Or billionaires!!!

Interesting timing… Hanged himself Saturday.

Maybe he wasn’t tapped in any more with the banksters.

#93 fancy_pants on 03.26.13 at 8:22 am

I was with you until the last two paragraphs. Never say never. You would be amazed what people, corporations or countries would do when they have their backs up against a wall.

Thanks for the fuzzy warm comfort I get in knowing Canadian deposits are “insured”. Yup, being a responsible saver, I’m sure they have my best interests in mind.

#94 Steve on 03.26.13 at 8:27 am

All the outrage over the seizing of deposits seems to overlook that, up until now, those deposits were growing at a rate (interest) greater than the bank could sustain.

It is wrong to suddenly change the rules, but why is there an unstated assumption that depositors should retain their previous gains when the banks are going bankrupt, in part based on paying too much interest?

There is also very little talk about the alternatives that might have occured should the ‘deal’ not have been reached. It is resonable to believe that those involved selected the least poisonous medicine, hoping for the best outcome upon recovery…

Let’s try and think in a little more balanced fashion. Thanks Garth, for doing just that.

#95 Dg on 03.26.13 at 8:50 am

Garth did you predict the stock market collapse in 08?so how can you predict there won’t be another one?

SM told me. — Garth

#96 MGTOW on 03.26.13 at 8:55 am

Why is that spammy link from The Affluent Boomer showing up all the time? It looks auto-generated.

Not any more. — Garth

#97 raider on 03.26.13 at 9:29 am

Just got up as usual and read Garth and Bloomberg…

Meanwhile south of the border:

Just to be naive here. If a similar timeline applies to Canada, we’d be in a 4-5 year decline from now before someone even dares to mention home equity again. The first people picking up the rubble will not be flippers and “neighbours”, but people who held on to income-producing assets.

#98 Freebird on 03.26.13 at 9:41 am

#94 @fancy_pants

“You would be amazed what…against a wall.”
Agreed, and this what I referred to in a comment in a previous post as desperate people do desperate things. It’s called being human.

#96 Steve

Re a more balanced view (less reflex/reactionary):

Agreed. There are always many sides to any situation…for those willing to see them.

#99 Al-Berta on 03.26.13 at 9:56 am

Garth dont you see trouble for the US dollar if the BRICS nations get their own currency and central bank ?

Trouble for them. — Garth

#100 Buy? Curious? on 03.26.13 at 9:57 am

Hey Garth! Here’s a video of Brad “Frickin'” Lamb, answering, not one but FIVE question about the Toronto City (best city in Canada! Lowest rate of losers per capita!) being lucky to have so much condo development. He said, and it’s his words not mine (I did a youtube translate), that “other cities would give their left testicle, if they had testicle, to have that type of development.” Not only does he know the benefit of condo development in a city, if you had to give up a body organ such as the testicles that only accounts for 50% of the population has (maybe less. Do self examinations to detect health problems as regularly as possible, twice if you have to) as a form of commitment, he’s so sure, maybe from experience, that you would choose the Left one to offer up. What if someone decides on the Right one? I laughed and laughed and laughed.

Here check it out! He said “Testicle”! Twice!

#101 rosie "moving backwards" on 03.26.13 at 10:15 am

Why are so many living like they’re the top 10% and I’m not? It’s not fair that it’s not fair.

#102 sciencemonkey on 03.26.13 at 10:26 am

@68 Richard: Are you the guys that make the $1000 AR? Any plans for a non-restricted 223?

#103 World Traveller on 03.26.13 at 10:36 am

Ah the stupidity, it burns it burns!!!

#104 salonist on 03.26.13 at 10:51 am

#59Tom Vu
not to fond of a dog, with their nose up someone else’s butt.

#105 Toronto_CA on 03.26.13 at 10:56 am

“Indeed, just 15 per cent of those polled by Ipsos Reid say they’ll probably buy a house in the next two years. That’s down from 27 per cent last year, and marks the biggest drop in buying intentions ever in the annual poll, now in its 20 year, done for Royal Bank of Canada.”

That bit about it being the lowest its EVER been in the history of the poll is curiously missing from the press puff release on The Star and The Financial Post.

Wonder why that is? Hmmm

#106 m g on 03.26.13 at 11:00 am

what is safe stuff Garth?

Amazing. — Garth

#107 Dr. Hoof - Hearted on 03.26.13 at 11:17 am

#71 Patient in Richmond on 03.26.13 at 12:21 am

Noticed that several Million + houses in Richmond are now showing “Sold” stickers … Very surprised by this …..


but did they sell for over Million…..

Or is it another staged event to give a false impression.

If a SOLD sticker is on , is it fraud if it is not, (ie legal title change) or more on the honour system?

Anyone Know?

#108 CP on 03.26.13 at 11:20 am

“Everything is fiiiiinnnneeee…”

#109 Mixed Bag on 03.26.13 at 11:22 am

“They scoop up unknown mining shares on a tip and have their asses handed to them.”

Ohhhh, do I know this one personally.

It was incredibly frustrating to watch a someone we know, who had come into an inheritance, squander it all away on just such mining stocks, get themselves into such a mess, so quickly.

Then come to us for a bailout.

My spouse still gets angry about it, three years later. In comparison, my brother-in-law, back home makes about ten to twenty dollars a day. What that kind of money would have meant to HIM, and how this person handled their inheritance with such disregard… that galls my spouse the most.

#110 New Realtor Action on 03.26.13 at 11:32 am

I’ve never heard of this before, perhaps you can advise. Fellow looks at a house in Duncan BC. Rented and just about to be foreclosed. 180 days on market. House is nice, under tax assessed value. Put in a full price offer matching the latest price drop. Vendor counters at +$20,000 due to cost of evicting tenant.

#111 Axxman on 03.26.13 at 11:36 am

#106 Toronto CA – I saw that too and you have to ask “what industry can withstand a 45% drop in revenue without some serious repercussions?”

#112 Richard and Zeus on 03.26.13 at 11:47 am

@68 Richard: Are you the guys that make the $1000 AR? Any plans for a non-restricted 223?
No we don’t sell junk. And yes…. We are working on a few non-restricted products. Govt is in the way as usual.

#113 dosouth on 03.26.13 at 11:55 am

#111 New Realtor Action –

It’s not called “Drunkin’ Duncan” for nothing…

#114 Ronaldo on 03.26.13 at 11:57 am

#50 Good Authority

”Trust is gone Garth. Canada’s government cannot be trusted – a billion to beat and jail innocents at G20; a billion to move a gas burning site to rig an election in Ontario all the while plunging recklessly deeper into debt every day.”

Yes, everytime I hear about the billion that was spent on the G20 security it makes my blood boild. Check out the below link to give you an idea what 1 billion can buy you. Was the money really spent on the G20? That would be my question since it does not seem possible.

So, run for office. There is nothing stopping you. — Garth

#115 dosouth on 03.26.13 at 11:59 am

#111 New Realtor Action –

It’s not called “Drunkin’ Duncan” for nothing….

#116 Dr. Hoof - Hearted on 03.26.13 at 12:13 pm

Cypriot haircuts….

As expected, Cyprus and the EU reached a new late-night bailout deal last night that will reduce the chance that Cyprus’s financial system and economy will completely implode.

The new deal is better than the last deal in one key respect:
Deposits under 100,000 euros will be protected

That’s very important. Those deposits were ostensibly “insured.” To seize them, the way the last bailout deal would have, would have been grossly unfair and would have set a truly alarming precedent.

Now, small depositors in European banks can breathe more easily. At least in this case of gross malpractice on the part of reckless bank managers, their life savings have been preserved.

Alas, the good news ends there.

Although deposits under 100,000 euros will be spared, deposits over 100,000 euros will be seized and subjected to an as-yet undetermined haircut–with the confiscated money going to bail out the gambling losses of the aforementioned reckless idiots who run some of Cyprus’s banks.

After all, never before in the history of this global financial crisis has a major banking system allowed depositors to lose money, no matter how reckless and stupid and greedy their bank managers have been. And only rarely have bank lenders–those who hold bank bonds–been asked to pony up.


Curious show down … Cyprus may be the ” poke the bear and see what happens ” ? I mean you give people haircuts…what response do you expect? Gov’ts must have a plan B ready. Can’t keep printing money….therefore best way to rob a bank is own one ?

Germany is being set up as the bad guy….it is really a colony of the Allies and used as a proxy.

#117 Piccaso on 03.26.13 at 12:15 pm

The bulls are counting their money in Edmonhole

#118 Post Haste on 03.26.13 at 12:24 pm

I would doubt that our Canadian Banking system would face the same developments – but please – deposit insurance! Really Garth – they probably don’t have enough in reserve to cover 5% of bank accounts. Our entire system is built on the “faith” system – once that’s gone – you need a police state to function.

Your first book did a number on me with getting money out while you can – now you seem to bet the farm that there is no way possible for North America to “ever” have those same issues.

Nothing is impossible – yes, the odds are remote, but there is always a chance. Our economy is at risk like any others – it just takes a few bad stumbles and a incompetent goverment (1 of 2 already in place).

Wrong, actually. We are miles past 2008. It is not coming back. — Garth

#119 Ronaldo on 03.26.13 at 12:24 pm

”So, run for office. There is nothing stopping you. — Garth”

Not a bad idea but am certain that many who have run and got there, as you have, would have found that trying to get things done would be like banging your head up against the wall. After a while you would get a headache. Thanks for the suggestion just the same.

If I did only those things I knew I would succeed at, I would do nothing. — Garth

#120 brainsail on 03.26.13 at 12:44 pm

The latest on Carney’s move…

#121 Old Man on 03.26.13 at 12:45 pm

The banking system in Canada is somewhat unique, in that, there are a handfull with thousands of branches. I am going to tell you a secret as the CEO’s are all friends with each other, as one was a close buddy of mine and told me all. Now, if one bank ever gets into trouble the others will rush in to assist one way or another organized by the Bank of Canada. Worry not!

#122 Retired WI Boomer on 03.26.13 at 12:51 pm

Cyprus Banks go BUST!!

Well, could have been Spain, or elsewhere. Deposit insurance (so called) covers each depositor for a limited amount of money. 100K Euro, 250K US, etc. etc.

If you have MORE than the deposit limit., and the Bank goes bust, i.e. insolvent, broke, tits-up, can’t make its way… YOU could lose 100% of the uninsured amount.

Sort of like investing in that Dot-Bomb back in 1999 that just vaporized with you holding that newly minted stock that is now worthless, except the sign out front said “BANK” on it.

Whether you buy a stock, bond, REIT, insurance product (annuity), or merely put your money in a BANK…there is this thing called “RISK.”

You can minimize it, you can NOT eliminate it.

Every dam thing we do carries some level of risk, a job, marriage, shack-up, renting the coin-operated Smoking Man’s special, a job, education, borrowing, saving, investing…you can not get away from “RISK.”

So, if you had a million in the Cyprus Bank that went bust….you WILL lose some level of money. I will venture that the banks in the US, and Canada and anywhere else, could be in the same place at some point. You can lose money should the BANK fail…

So, What’s your level of “RISK”??

#123 dv8 on 03.26.13 at 1:05 pm

people are withdrawing money fast in europe from banks in fear of confiscation will this increase the velocity of money?

It certainly assists in the velocity of stupid. — Garth

#124 Old Man on 03.26.13 at 1:11 pm

Just a warning with deposit money at any bank in Canada, as make sure it qualifies; you would be surprised that many a bank employee gives customers the wrong advice, and will say yes all is covered. I saw a posting that someone had a euro account at some Greek bank on the Danforth for example.

#125 Ronaldo on 03.26.13 at 1:13 pm

”If I did only those things I knew I would succeed at, I would do nothing. — Garth”

Excellent quote. I like this one as well.

“If I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.

– Gandhi ”

#126 jess on 03.26.13 at 1:17 pm

learn how transfer pricing works through the tax havens

Michael Durst: “Why the OECD Transfer Pricing Guidelines Don’t Work’

Felicity Lawrence Uses ‘The Banana Case’ to Explain Transfer Pricing journalist opinion

see 2009 sixty articles over 3 week tax gap guardian
Transfer pricing in Helsinki: videos now available (26 Mar 2013)

#127 Doug in London on 03.26.13 at 1:18 pm

@not 1st, post #65:
You’re right about the first part, with socks on sale but wrong about the second part about stocks on sale. When stocks (or equity funds that invest in them) are on sale it’s more like: WOW, LOOK AT THOSE CHEAP PRICES, IT’S TIME TO BUY NOW!!! Unlike socks, stocks can actually appreciate in value and many pay dividends. When there’s irrational panic in the overall economy (in other words blood in the streets), that’s when the best bargains are to be had.

#128 Bob Zurunkel on 03.26.13 at 1:46 pm

If I did only those things I knew I would succeed at, I would do nothing. — Garth

Words to live by and an interesting reason behind some investment strategies.

#129 Bob Zurunkel on 03.26.13 at 1:46 pm

stoopid tags

#130 Old Man on 03.26.13 at 1:47 pm

Just a bit of humour with all the doom and gloom about, as went to a shopping center to get me some cash, and coming out was a rare car parked in the fire zone out front, as was a Hummer H2 in pure black. So looked it over, as don’t see this too often. This lady walked out not a day under 75 years of age, and said is that you car, as should not be parked in a fire zone. I kid you not as she said I don’t give a damn, as will park where and when I want, as life is too short to worry about laws anymore, and off she went.

#131 gladiator on 03.26.13 at 1:48 pm

“If I did only those things I knew I would succeed at, I would do nothing. — Garth” Golden…

Garth, I collect quotes and this one goes in there, along with quotes from Seneca, Roosevelt, Kipling, Confucius, Santayana, et. al.

#132 bill on 03.26.13 at 1:49 pm

#68 Richard and Zeus on 03.26.13 at 12:10 am
Gee thanks a lot for your contribution there . real good of you.
however if you sell your ”wares” to any government you are taking the taxpayers money. right?

#133 Tony on 03.26.13 at 1:57 pm

Re: #118 Piccaso on 03.26.13 at 12:15 pm

Prices have finally leveled off after 6 years of huge declines. I guess (i don’t guess i know) later this year and for the next couple of decades prices will fall again Edmonton.

#134 Dorothy on 03.26.13 at 2:00 pm

As I watch, with growing concern, world wide economic developments, I begin to realize that the price of housing is probably the least of our worries.

Like most ordinary folk, I’m not sure who, in this world of financial turmoil and conflicting opinions, should be believed. No-one, least of all the so called experts, seems to really know how this particular story is going to end. And it’s very scary.

While I do think it’s unlikely, it’s not impossible that one day the Government may decide to use a percentage of bank deposits to help bail out the banks. I truly believe Cyprus is just the test case, to see how the rest of the world reacts. If they get away with it there, it could eventually be tried elsewhere. The justification will be, as in Cyprus, that it is a choice between losing 40% now, or 100% later. But the reality is that savers will be punished and made to pay, while debtors will get off relatively scot free. While at the same time, the REALLY wealthy will be provided a loophole, just as the Russians were, to avoid having to contribute.

It stinks!

You have absolutely no justification for this comment. — Garth

#135 Richard and Zeus on 03.26.13 at 2:03 pm

Yes, everytime I hear about the billion that was spent on the G20 security it makes my blood boild. Check out the below link to give you an idea what 1 billion can buy you. Was the money really spent on the G20? That would be my question since it does not seem possible.

So, run for office. There is nothing stopping you. — Garth
There is no point. We have a “dictator” system in Kanaduhhhhhh. MPs and MLAs have no power….

But you have guns, right? — Garth

#136 Richard and Zeus on 03.26.13 at 2:06 pm

#68 Richard and Zeus on 03.26.13 at 12:10 am
Gee thanks a lot for your contribution there . real good of you.
however if you sell your ”wares” to any government you are taking the taxpayers money. right?
Billy…….unless you think police should chase drug dealers un-armed. Get a grip.

#137 Crash Calaway on 03.26.13 at 2:13 pm

#123 Retired WI Boomer

You bring up examples of $ at risk in banks that go above insured deposit amounts.

Have you so soon forgotten that insured deposits under 100,000 in Cyprus banks were initially on the table for pillaging by the bankster owned govt?

Luckily that cash grab on the lower amount accounts never happened but the thieves could revisit that option on a whim with no laws to protect depositors.

How can any sane individual put money in institutions with no security wall to keep out the criminal thieving government.
A govt that blatantly violates depositor trust by revealing their intent to use their infinite power, control and intent to establish their pirated ownership of peoples money.

The truth is finally out in plain view.
People are on their own.
There is no “real” deposit insurance
The money you believe you have is just that, a thought, a flight of fancy right up there with Santa & Easter Bunny.
You are only allowed to believe you own the money you saved until Big daddy govt casts it’s greedy eyes on it.

Hope people are doing lots of bending exercises because the screw over will be inflicted on Canadians sooner or later.

Hard to believe the rampant ignorance and lack of confidence on display on this blog. — Garth

#138 Old Man on 03.26.13 at 2:13 pm

I have a message for the guy who more or less stated that he was engaged in tax evasion in Canada. Tax evasion is illegal which I have never done in my life, as can sleep at night, but tax avoidance using the rules is so sweet, and many of you can save a fortune, both now and in the future by retaining the services of a qualified financial advisor with an Estate well over $1 million, as it will be money well spent, and the fees are not expensive at all within the context of savings, and it might become the best investment you have ever made in your life.

#139 Ralph Cramdown Ⓤ on 03.26.13 at 2:14 pm

#133 bill

How astute of you to point that out. Krugman calls right-wing beliefs on the subject “Weaponized Keynesianism” — the belief that governments that tax and spend hurt the economy, except when they spend it on the military, because that helps the economy. I trust that’s clear?

#140 The Prophet Elijah on 03.26.13 at 2:27 pm

#100 Al-Berta on 03.26.13 at 9:56 am
Garth dont you see trouble for the US dollar if the BRICS nations get their own currency and central bank ?

Trouble for them. — Garth
Garth are you saying there could be a World War over monetary issues? We know how some like to flex their might.

#141 Dorothy on 03.26.13 at 2:33 pm

The term “systemically important banks” appears to be a new buzz word; one that I’ve now heard twice in one day.
Here’s a quote from the Globe & Mail:
“The Office of the Superintendent of Financial Institutions said Tuesday morning that it has identified Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank as “domestic systemically important banks,” or so-called D-SIBS.”
This is particularly worrying when you mentally link this with the previously referred to quote from the 2013 Budget
“The government proposes to implement a “bail- in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes it’s capital, they can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital”

Find something worthwhile to worry about. This is not even on the radar. — Garth

#142 World Traveller on 03.26.13 at 2:35 pm

Reuters reported that money was oozing out of the banks directly before Cyprus refused to comply with a eurozone idea to confiscate a percentage of deposit funds from all accounts. Large transfers of funds, said to be in the millions, reportedly left the island just before the crisis.

Sounds like someone had a call into Russia before the crisis to warn some “business people”.

#143 My thoughts on 03.26.13 at 2:36 pm

So last month realtors were complaining about too little inventory and now they are complaining about too much inventory in the 2 million dollar range? seriously wow!

#144 My thoughts on 03.26.13 at 2:39 pm

One thing that I realize… There are no shortage of homes. If you feel like there’s nothing on the market… Just wait… More listings added daily. Watching the game continue, except I will only offer what I think it’s worth. Will no longer let the realtors drive the market higher. Craziest of times!

#145 Men Who Stare At Sheeple on 03.26.13 at 2:40 pm

Here is a real history lesson! Unlike the propaganda, lies and false history that has been fed to us throughout our lives by our governments, MSM and the bogus education system.

This is a must watch 45 minute documentary. You will learn more truth in 45 minutes than you have learned in a lifetime. Please take 45 minutes of your time and learn the real hidden truth! For the people that are fully awake this is common knowledge.

For the better part of the last century young men have been sent off to war by their cowardly and lying governments to kill and die under the guise of spreading freedom and democracy! Complete bullshit! Over a hundred million people have been killed in these wars over the last century. These fraudulent wars have only benifitted and served the interests of the international central bankers and their plans for global domination!

The United States of America is the true battleground for global freedom and democracy! The criminal US government facilitated and covered up the 9/11 attacks to launch the fraudulent “War on Terror” This same criminal government is now hell-bent on disarming the American people! Many Americans are awake to this truth! Could this be why the US government has been making large purchases of ammunition through the DHS? & this

Muslims, Iran, Syria, North Korea, etc. are not the real enemy. The international bankers and their corporations are the true enemy of mankind! The people do not want war! So they bring the wars to us!

It is imperative that people around the world understand why humanity has been constantly at war for the better part of the last century! The sheeple need to awaken to the truth before we are possibly once again dragged into another World War.

It’s time to wake the flock up!

You need to know true history to understand where we are today!


Idiot! — Garth

#146 Old Man on 03.26.13 at 2:56 pm

My day has just been made in spades as there is a revolt against Caesar with the back benches who are now showing some rocks for a change to challenge Caesar.

#147 SRV on 03.26.13 at 3:04 pm

“Find something worthwhile to worry about. This is not even on the radar. — Garth”

And your initial reaction of (no way they would ever put that in writing) was because this would be nothing to worry about?

#148 bill on 03.26.13 at 3:10 pm

nice try richard.
you came to this blog and bragged that you were not paying your taxes.
I find that to be twofaced.
you say the ”screw taxes” on one hand and yet you are only to glad to accept our [the taxpayers] money to arm the police.
dont you understand?

#149 bill on 03.26.13 at 3:12 pm

#140 Ralph Cramdown Ⓤ on 03.26.13 at 2:14 pm
well its clear to me Ralph .
others I am not so sure of.

#150 NoName on 03.26.13 at 3:15 pm

How naive is this…

“Spaniards Shield Assets in Bitcoin To Avoid Bank Account Grab”

I believe that bitcoin have place in today society, but to trust someones “hard drive” unconditionally is just makes no sense. I had dispute with Paypal it took me 6 months to get my 45.95 back. Now i can only imagine dispute that involves big amounts.

#151 World Traveller on 03.26.13 at 3:32 pm

In other news Rob Ford up to his usual tricks.

“began with cocktails and a silent auction at 5:30 p.m. Dinner was set for 7 p.m. Ford was invited to the previous year’s ball but did not show up. When he arrived this year, around the time salad was being served, organizers were initially pleased.”

Probably the only time you will see salad and Rob Ford mentioned in an article.
I’m glad to hear the organizers were pleased he ate salad.

#152 World Traveller on 03.26.13 at 3:33 pm

Oh Yes, the article

This is not a substance abuse blog. Only moderator abuse is allowed. — Garth

#153 dv8 on 03.26.13 at 3:38 pm

There is no legislation now passed to steal bank deposits in other countries- Garth

yes there is it’s called the ESM

No there isn’t. — Garth

#154 Old Man on 03.26.13 at 3:54 pm

#135 Dorothy – worry not, as could not deposit my counter cheque today with the TD, and my balance is still $28.00 because the parking lot was filled with cars, as went to another bank for cash, and will try once again in a few days to make a deposit to cover my ass, but all is not lost in life, as have a huge overdraft there if needed, as the Old Man is on a depression budget from month to month, as am broke most of the time.

#155 Dr. Hoof - Hearted on 03.26.13 at 4:04 pm

#146 Men Who Stare At Sheeple on 03.26.13 at 2:40 pm

Idiot! — Garth


I don’t even remotely see where the “idiot” term applies.

I and others can appreciate a certain perspective and expertise to financial matters within a certain set of parameters, but a more holistic approach to world history would put things in a more understandable perspective and see the patterns emerge.

This is simply a pattern that has gone on historically. Previously certain countries or areas were taken out for economic reasons, especially those that tried to avoid the Central Banking system.

Does the majority even know what the US Civil War was REALLY about ?

Now its for all the marbles. Lets get real here and not dismissive.

The Civil War? That’s relevant. Just like Zimbabwe. You guys are losing it. — Garth

#156 Smartalox on 03.26.13 at 4:15 pm

Can anyone provide details of these propose bail-in schemes? Is this the thing where banks that are too big to fail are required to issue a special class of shares held in reserve, but that can be sold off to raise capital in the event that it’s needed? I know that there was talk of this.

Would this make it easier for banks to rescue each other, instead of relying on taxpayer bailouts, where inevitably, governments spend everything to bail out the first to fail, and are left with little or nothing for the failures that follow close behind?

Let the market price in risk, and if a big bank fails, have it sold off, and have its managers tossed out by the new owners, instead of giving each other bail-out sponsored bonuses?

Is that how a bail-in works?

#157 Holy Crap Wheres The Tylenol on 03.26.13 at 4:21 pm

#146 Men Who Stare At Sheeple on 03.26.13 at 2:40 pm
Here is a real history lesson! Unlike the propaganda, lies and false history that has been fed to us throughout our lives by our governments,

(Men Who Stare At Sheeple), well my friend you may think you are right, however after working in the Middle East, Africa, the Philippines and Malaysia for the last twenty years I can tell you there is an intrinsic agenda on their mind. The spread of this agenda would shock most of you who have never been to this part of the world. These proponents of the agenda want nothing more than for the western world to cease to exist. They have a saying convert or die! As for the little Prince of Poop in North Korea he is just quite a piece of work like his predecessors. As for your conspiracy theories about the US you never know! Even if you were correct you will go to you grave without any actual proof. I just mentioned an interesting book on this exact issue called Bullspotting by author Loren Collins a few days ago! But I digress it is not for you! Go have another drink!

#158 maxx on 03.26.13 at 4:22 pm

#12 Smoking Man on 03.25.13 at 8:24 pm

Point taken.
However, I don’t mind contributing to society through my earnings- in fact, I rather think it’s a good thing (gold-embossed business cards and delayed eye surgeries aside).
What I absolutely and totally take exception to is taking a bite out what is carefully (and often with great sacrifice) set aside for one’s future out of what remains,…so as to minimize one’s future impact on society’s purse. Those hard-earned savings should always and forever be off limits to anyone but the owner.

#159 Dr. Hoof - Hearted on 03.26.13 at 4:29 pm

The Civil War? That’s relevant. Just like Zimbabwe. You guys are losing it. — Garth


“If my sons did not want wars, there would be none.” ~ Gutle Schnaper, Mayer Amschel Rothschilds wife

Wars are BANKERS Wars…

Peacetime = Bankers re-loading…

What is this blog about….Sheeple , their assets and their asses…. is it not ?

#160 Bill Gable on 03.26.13 at 4:37 pm

It’s D E B T, that kills –

“Three-quarters of executive chartered accountants believe the high level of personal debt among among Canadians is hurting the economy, according to a survey conducted by the Canadian Institute of Chartered Accountants.

More than half of those surveyed, 55%, also view the high debt levels as a threat to future demand for products or services at their company.

“Clearly, business leaders are uncomfortable with the high level of personal debt in the country,” said Nicholas Cheung, a director with the Canadian Institute of Chartered Accountants (CICA).

>>>How do people come up with 25% down on million buck shacks in Vancouver?


#161 rosie "moving backwards" on 03.26.13 at 4:39 pm

This one’s for all you crazy doomers, conspiracy seekers, survivalists and all round nut jobs. The latest for Spring 13.

#162 broadway skytrain on 03.26.13 at 4:43 pm

wsj —- Home Prices Post Big Rise
U.S. home prices rose in January from a year earlier, registering the biggest increase since the summer of 2006, according to Standard & Poor’s Case-Shiller. On a year-on-year basis, the 20-city index improved 8.1%.
this is why RE is safe(er). After getting creamed it comes back and goes up again, everytime. Everyone can pick a long term winner ,(10yrs) stocks , not so much. (of course ppl should not be picking stocks, but when does that stop them?)

last day of pre earnings bbry trading tomm – could be fireworks (or a big smokey bomb)

btw, eye tracking is the next ui for pc, fyi, imho.

US house prices are still 20% below 2006 levels. Stocks have fully recovered from 2008-9. Don’t get too excited yet. — Garth

#163 Blacksheep on 03.26.13 at 4:56 pm


“You have absolutely no justification for this comment. — Garth”
Agree the odds of these problems taking place in Canada are very low.

“Find something worthwhile to worry about. This is
not even on the radar. — Garth”
As a depositor with a significant sum held, this discussion involves my bank and represents the forging new policy from, my government. That makes it worthwhile to me and others like me, but this is not something to freak out about.

I advise one take note of coming changes. If your current banking format does not give peace of mind, make adjustments as to how funds are secured until
it does.

Question for you Garth:

Why put ANY Bail-in language, in the new budget
at all?

The fact this new policy was included knowing the potential for blowback, places the banks risk assessment by the government somewhere, well north of zero.

#164 jess on 03.26.13 at 4:56 pm

..”On November 16, 2009 Sergei Magnitsky, a partner of the legal company Firestone Duncan, who was a representative and legal consultant for William Browder in Moscow, having been accused in tax fraud and imprisoned for 11 months, died in prison. In 2013 it was announced that Magnitsky will go on trial posthumously.” (wiki)
By Tom Parfitt, Moscow
5:58PM GMT 22 Mar 2013

Sergei Magnitsky trial: ‘it’s not illegal to try a dead man’, says judge
A Moscow judge has refused calls to halt the posthumous prosecution of Sergei Magnitsky, ruling on the first day of the trial that it was not illegal to try a dead defendant

…is this the precedant?
Formosus (c. 816–896) was Pope of the Catholic Church from 891 to 896. His brief reign as Pope was troubled, and his remains were exhumed and put on trial in the notorious Cadaver Synod.

#165 Samantha wong on 03.26.13 at 5:15 pm

American banker says bail-in is credit negative for canada.

Read this carefully. — Garth

#166 Men Who Stare At Sheeple on 03.26.13 at 6:20 pm

Garth, so I guess telling the truth makes me an idiot!

I’m cool with it! It’s your blog and you have a right to your opinion!

Let’s just agree to disagree!

#167 Samantha wong on 03.26.13 at 6:55 pm

usa houses never have gone down on a national basis rah rah
celtic tiger
icelandic miracle
cypriot model funded by depositors best
canada safest banks in the world…

#168 Old Man on 03.26.13 at 7:02 pm

There will be no hope in Canada going forward without the younger women taking charge. I will never forget last summer at a stop light when this young girl in a scooter was beside me. She pointed to the stop light, and said it is a go which is lingo for a drag race on the green, and gave her a thumbs up. I had a car with an overdrive system with my foot down, and she hooped me on a scooter with her hand up giving me the finger, and just laughed, as left me in the dust.

#169 JO on 03.26.13 at 7:02 pm

Way to many extreme opinions on this blog…yes, no one knows what will happen..but for now, no need to worry..BTW, watch the Euro and data from Euro is reasonable to expect the flow out of Europe to slowly accelerate and when Spain and France go bust within 12 months, that will see the Euro take huge hit…a lot of the money sitting in Euros will go to US $ for some period of time…if/when gold closes below 1545 on a monthly basis, watch out ! We can easily bounce up to 1720-1750 short term but as long as we stay below 1810 on a weekly closing basis, it remains much more likely the USD will soar over the next 6-18 months and gold/commodities collapse is more likely to hit 1150 before 2000 given the current trends..this Cyprus crisis for now remains mostly USD bullish.

Defaults are extremely low in Canada but will likely pick up sharply over next 6-12 months..even then, the system is very safe as of right now..most high risk loans are taxpayer insured so the only way the banks can get hit hard for now is a major derivative loss or commercial loan loss..will happen but not anytime soon and even when it does, the system will probably make it through…stop panicking ! and if you are losing sleep, don’t keep more than 100K in the bank !

#170 Smoking Man on 03.26.13 at 7:25 pm

I have a funny feeling that huge euro loot will be hitting our backs soon.

Driving usd and cad threw the roof.

Glad I got forex account

#171 Retired WI Boomer on 03.26.13 at 7:25 pm

Crash Calloway #138

You noticed that those with deposits within the limits AARE being protected? Right. So, IF you had MORE than the deposit limits you might be getting hosed.

What’s not to understand?

Risk is RISK.

Don’t worry about the doomsayers, those nut jobs have always been wrong within my lifetime.


#172 blok existentialist on 03.26.13 at 7:59 pm

An old story for old man:
There was one parking spot left in front of a private art gallery. The showing for a hot newcomer was about to kick off. An elderly woman in a Hummer H2 was headed for the spot, but a young guy in a Kia zipped in ahead of her.
The elderly woman opened her window. “Why did you do that?” she asked.
“Because I’m young and quick,” he said.
The woman was silent for a moment. Then she revved up her Hummer and rammed it into the Kia.
“Why did you do THAT?” shrieked its owner.
“Because I’m old and rich,” she said.

#173 afraidit allmightend on 03.27.13 at 9:48 am

So you’re saying that income tax is still a temporary war measure act and will never be forced on people by government…no of course not…that would never happen….now go to sleep my little sheep….sleeeeeeepppppp .

#174 FML I AM A SKRenter on 03.27.13 at 10:22 am


Love to hear your opinion on this, the rhetoric behind it is growing:

Maybe Dundurn is the new Richmond???