Did F screw up the banks?
Some people think so. They fear our vaunted Big Six monster banks are way less stable than in previous decades because idiot policy allowed this to happen:
That’s right – about the worst real estate bubble currently existing in the world, according to the OECD. But our bubble’s different from most countries where house prices are completely whacked when compared to rents and incomes. In Canada not only are houses overpriced, says the international body, but prices are still rising (they must believe CREA). The prognosis: people who live here are in for one big surprise.
So back to the banks. They have massive mortgage portfolios. And while I personally do not worry that a housing correction will make any bank insolvent, lesser men do. And women. In fact the very possibility of this scares the poop out of folks who believed [email protected] and stuck all their wealth in savings accounts or GICs. This has led to a nascent campaign to goose the amount of money that Ottawa will insure should a bank go assets-up.
Here is how the proponents put it, arguing that the current $100,000 cap is way too small:
$100K is not enough and sends the wrong message to Canadians that have pigged out on credit because of this current government’s policies. Mr Flaherty’s early mortgage policy changes to zero down, 40 year mortgages in 2006 caused Canadians to enter the housing market with little skin in the game. This has caused a market bubble that he claims doesn’t exist. However, Mr Flaherty over the past few years has changed the mortgage rules several times to wipe out the zero down, 40, then 35 and now 30 year terms. Weary Canadians are concerned and are fully aware of the bank bailouts and closures in the USA, Europe and Cyprus. It’s time now to show Canadians that the economy is getting better and that the Canadian banking system is sound.
So, we have a grassroots campaign underway to have the feds raise the deposit insurance limit to $250,000, as is now the case in the US. An online petition has been created, and for some ungodly reason this pathetic blog has been singled out as one of the first places it’s being publicized. Is it because we’re infested with Depends-wearing, nihilistic, bullion-licking, antisocial doomers who hoard tuna and Cottonelle? Beats me. I just work here.
As you may know (most people don’t), the Canada Deposit Insurance Corporation is narrow in its coverage. Chequing and savings accounts are protected, as are GICs of five years or less. That means if your bank fails, you are reimbursed (in theory, anyway). For investors in mutual funds, ETFs, stocks, bonds or investment accounts at brokerages, coverage comes from the Canadian Investor Protection Fund (CIPF) for at least $1 million per person in the event of a corporate kaput.
So how come investors get ten times more protection than savers?
Good question. And only F knows the answer – since CDIC coverage limits are set by the federal government. The last time protection was increased (from $60,000) was back in 2005, following a successful public petition effort. Then, in 2009, TFSAs were added – but only if the funds inside are put into dead-end savings accounts or comatose GICs.
So when the GFC hit the global economy, with deposit limits lifted dramatically in America and Europe, the feds here just blinked. The only way you can exceed the hundred grand limit is by having multiple accounts – one for him, one for her and one jointly, for example, as well as for individual RRSPs and TFSAs. It’s possible to insure a bundle that way, but only if broken into chunks of $100,000 or less, and only if the money is in a near-cash asset like a GIC.
Can this change, given the fact many people believe if a USA-style housing crunch happened here some banks might be hooped?
I asked that question of CDIC on Wednesday. “We’re well aware of this petition,” the spokesguy told me, “but we take our marching orders from Parliament. Let’s just say that the pressure brought to bear by people on the government (for increased limits) is fair game.”
Of course it is. If F can dick around with mortgages so capriciously and with such consequences, then he can damn well make the widows, orphans and GreaterFool doomy bedwetters feel more secure. Why should people with mortgages larger than the value of their homes have all the fun?
So, here it is: http://www.publicpetitions.com/petition/73/cdic-increase-deposit-insurance
Bonus: You get to leave a comment for the elfin deity. Say hi for me.
148 comments ↓
Garth. Here’s one to help you out with all the U.S. doomers. Good read.
http://www.cracked.com/article_20454_5-scary-myths-you-probably-believe-about-economy.html
The greater fool theory doesn’t just apply to real estate, it applies to the stock market as well. 30 yr cycle of easy credit coming to an end soon.
Really? — Garth
High Returns? Private Investors Funding Marijuana Revolution.
A growing opportunity
Yes..my Zen is in overdrive
#126 Doug in London on 06.05.13 at 2:19 pm
“I see that CPD and XPF are on sale this week. This is great news for buyers looking for a bargain, but why would anyone sell these shares at such a reduced price?”
——————————————————————-
Due to premature asset allocation.
Keeping the Dividend Faith
http://recharts.blogspot.ca/2013/06/to-sfh-bidding-wars-debunked-june-05.html
http://recharts.blogspot.ca/2013/06/gta-bidding-wars-debunked-june-05.html
OECD, IMF, Economists, pundits,……
Track record vs mine…… Bubble heads….
You dudes get some bonds this week. Your going to make money.
I have been calling Re, interest rates, markets and killing it on forex…..
At the tax farm, out with beers with the dudes from all over bay street who are in the press all the time.
What do they have in common, they are normal, they stay with in boundaries, they believe consensus.
Me, I’m certifiably insane but get it right most of the time, I’m a bull shitter, can smell one coming blocks away…
Most of you dislike me cause I haven’t joined the bubble head crusade…. I will when I feel it’s time.
But it’s not… 4 years ago on here I said real estate will rock here till 2014.
Im selling at the peak.. Mar 2014…
Hi garth post 2 mentioned a credit explosion and you countered with a prime rate curve. Fact is the guy is right it happens to every society at some point. History is quite clear on this. You may be right and it might not happen in our life times but I beg to differ. I happen to think that Japan may serve as the canary in the coal mne. Time will tell
He spoke of ‘easy credit.’ I showed the price of credit. Hardly easy for most of the last 30 years, as claimed. — Garth
Economists: Homeownership leads to unemployment
http://blogs.law.harvard.edu/philg/2013/06/04/economists-homeownership-leads-to-unemployment/
Damn ment Mar 2015, revised it last year.
Ave price will be 150k more than now on SFH. GTA
We have had a gradule climb, looking for a fast super spike before I unload. Probably will start in the fall of 2014.
This of course is just telepathy with the force, universal consciousness consolidator…
Just watch Grasshoppers
“So how come investors get ten times more protection than savers?” (Garth)
For the same reason investors pay less tax on their profits that savers. The system is rigged.
Garth, I’m hoping you have some time to look at the stats in Kelowna and let us know what you think.
The best way to get rid of politics and lobbyists for deposit insurance coverage by the CDIC and credit unions DICO for Ontario plus other provincial deposit insurance coverage for credit unions is to use C.P.I. inflation indexation.
The CDIC started in 1967 and the original amount covered was $20,000.Today using Canadian C.P.I. inflation indexation the equivalent and correct amount is $137,094.97.
They are partly right CDIC is under insured by $37,094.97 in inflation adjusted dollars.The $250,000 they are pushing for is just trying to match the U.S. FDIC deposit insurance coverage for banks.
We need more deposit insurance like we need a hole in the head. Remove one of the last shreds of market regulation in our banking system and soon we’ll be talking to [email protected] Gosbank.
[…] via Too late? — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]
Too many people want to have their cake and eat it too.
Where do these people think the interest on their savings comes from?
I propose a petition to lower the deposit coverage limit, and institute a law that forces a minimum participation rate in IPOs.
Anyone interested?
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After 120% increase in housing prices, and now dire economic conditions, we have a fall in prices of about 6% and we see a rise in building permits for four months straight and the price of condos continuing to rise. This “correction” is taking a long time to happen
Absolutely no discussion on TREBs miracle May numbers? After being down 12.5% at the half, they come in slightly down YoY and zero discussion about that?
How are those numbers possible? Jobs are still down, homeownership in the GTA is pushing a record high and personal debt continues to climb off the charts. Who the heck is buying these places?
I’m disappointed that you didn’t address the numbers head on Garth. Would have appreciated your thoughts on today’s news vs today’s post.
That means if your bank fails, you are reimbursed (in theory, anyway).
In other words, taxpayers would be increasing their own liabilities by giving our government the right to bailout everybody. Brilliant.
Speaking of liabilities. Government bond issuance is heading off the charts and now running at 7% y/y growth rate.
There's no turning back now. FTW. Keep printing and praying.
“Is it because we’re infested with Depends-wearing, nihilistic, bullion-licking, antisocial doomers who hoard tuna and Cottonelle? Beats me. I just work here.”
Yyyhaaa…That’s me bro, except i pass the tuna and Cottonelle. Stick to Vodka instead. And babes dude :)
What you say well… well.. it’s well. What you’ve got wrong, it really doesn’t matter. We love you bro…just keep putting up babe photo contest and all it’ll be well :)
Cheers ..
What Garth is trying to say this evening is to stay the hell away from Canadian bank equities (etfs and common shares) and buy gold.
why limit to $250,000. cash deposited to banks for safe keeping should be 100% protected otherwise it safer under my pillow. why should any of depositor’s money be at risk? in the first place.
The “Chris and Kelly” part of the video is hilarious.
Who are these guys ? Oil Barons ?
lol
#11 HDJ
You take the risk, you get the rewards. Wanna stuff your money in the bank? the choice is yours.
Meanwhile the Vancouver Province today ran a story with a headline saying the bottom has been reached…. *lol*
It seems to me there may be a way to sidestep the current hundred grand limit on bank deposits/GICs. What about having $100K deposits in more than one of the big six banks. And if that works, what about credit unions as well?
So the market has had a couple of bad days. I lost about $14,000 thus far, but it is a mere paper entry.
I don’t owe the bank on any market leverage, and I am not selling real estate. By the way, I’ll bet my numbers look better in a few months than most Canadian Real Estate numbers.
The markets move UP then DOWN then UP then flat for a while then DOWN, then UP….. look at the longer term history there. Where does RE go from nose-bleed levels?
If I open a US brokerage account in Canada, and fund it with US dollars will the Canadian Investor Protection Fund (CIPF) cover that account to 1 million CDN too?
SIGNED AND SHARED
………………
InfoAlerteBot @InfoAlerteBot
WE KNEW @brentrathgeber WAS TROUBLE THE MOMENT WE LET HIM HAVE HIS OWN BLOG. REMEMBER WHAT HAPPENED WITH GARTH TURNER?
https://twitter.com/search?q=%40brentrathgeber&src=typd
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Deposit insurance should be *reduced*, not increased. After all, this would encourage the public to be more careful in their “investment” of funds with the banks, and to consider carefully the solvency and credibility of their bank before entrusting them with so much money.
Hi Garth. I’ve read your blog for four years, this is my first post. Perhaps you or one of your blogdogs could figure out how some cities home sales have increased or more likely decreased over the last few years when accounting for the change in that cities population. All I ever see from realtors is that home sales are up or down x% compared to last year, or sometimes compared to a five year average. Shouldn’t home sales be expected to constantly increase, as the population increases? So even if home sales are stagnant, they are then probably down on a per capita basis. Have a good day.
very stupid video, yeah right Canadians have that kind of cash in their banks. Give me a break.
ACTUCALLY NOT TOO LATE, NOT LATE AT ALL
The Canadian Bankers Association has finally gotten around to spitting out the mortgages in arrears figure for February. In fact they just posted an updated that gives us the February and March figures.
It’s business at usual. According to the bankers VERY few Canadians are more than 90 days late on their mortgages, just 0.032% or 1 in 312 Canadians with mortgages are 90 days late.
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
So not only are the banks insured against nonpayment of most mortgages, but it seems that there are very few cases of non-payment.
I believe that to some extent the arrears are artificially low because in many cases the bank will allow you to skip payments. And if you skip three payments with permission then you are not in arrears!
Another reason for low arrears is that Canadians almost all have positive equity. If they lose their job they can sell the house which almost invariably has risen in value. No point defaulting.
Arrears would tell a different story if house prices start dropping or we get a major recession. But so far, so good for mortgages and the banks and CMHC.
Cottonelle? No, stock Costco’s Kirkland; Kirkland is the best tp.
Hi Garth, I signed the petition with the good reasoning making it a well thought out and justified petition. Even though many home owners are against it as they are jealous and resentful of people who are actually invested in diversified assets and have a large “Fixed Income” portion in their balanced, liquid, debt free, and diversified portfolio, versus their “Debt wealth” and 1 asset portfolio.
Sorry Garth, I couldn’t say hi to F for you…..as I didn’t want to get in the way of your friendship with the little elfin deity:)
Blair Mantin V.P. at Sands and Associates is on the Province website under their ‘mortgage’ section saying the last 6 months have been the busiest he has seen in years. They deal in bankruptcies. Suprised the MSM would even report something like that. Harbinger?
Flaherty was interviewed tonight on the subject on CBC.
Here’s his response :
“That’s why I say, I, like every Canadians I’m speaking with, we’re ill about this position that we have been put in where it is the tax payers looking to CDIC coverage limits, but ultimately, what these CDIC limits does is help those who are concerned about the healthcare reform that is needed to help shore up our economy, helping tho— it’s got to be all about job creation too, shoring up our economy, and putting it back on the right track, so healthcare reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Canadians. And trade, we’ve got to see trade as opportunity, not as— competitive— scary thing, but one in five jobs being created in the trade sector today, we’ve got to look at that as more opportunity. All those things under the umbrella of job creation. These CDIC coverage limits are a part of that”.
Where have all the gold bugs gone?(from this website), with apologies to The Searchers 1963 ‘Where have all the Flowers Gone’ https://www.youtube.com/watch?v=Ek_Vso6Lu1g
Did they crawl back under the rock (gold I hope) that they crawled out from? BTW my favourite gold bug movie sequence. The Fall of the Roman Empire (1964) producer Samuel Bronston ne Bronshtein. Douglas Wilmer as Senator Niger goes from Rome to suborn the Northern Army with the gold stripped from the temple roofs on the orders of Emperor Commodus. ‘Gold, Gold, Caesar has sent gold for the for the soldiers of Rome, gold, gold, gold, gold, gold, 3,000 dinars for each man – in gold’
A great movie. I’m sure it’s a personal favorite of Eric Sprott, John Embry, Rick Rule, Jim Sinclair, and last but not least Jim Willie.
What happened to the REITS this last week? iShares CDN REIT Index Fund (TSX: XRE) down 5.79%. GRT.UN down 6%, D.UN down 6%, REI.UN down 7.5% (measured using closing prices on TSX May 28th to June 5th). This is a nasty surprise given that the decline is higher than the pre-tax yield(before and even after the gap down). Bernanke’s May 23 hint of ‘tapering off bond buying’ is the catalyst. Any withdrawal of stimulus and retreat from artificially managed low interest rates will hurt REITS and bonds. I think we are just seeing the first evidence of this. Lets look on the bright side though. Now at least the reinvested income will command a better yield.
Prices just keep going up, up, up, up, up in Toronto. I guess you can all buy in Hamilton or belleville.
PROTECTION LIMIT FOR INVESTMENT ACCOUNTS
Imagine you have two million dollars in stocks invested through a brokerage which goes bust. How much might you lose?
The answer is (probably) absolutely nothing because the reality is that the brokerage does not really have your stocks or have your two million in assets at all. The other investors whom you bought your stock from through the broker and through the exchange got your $2 million. The central registry of stocks has electronically noted that you own those shares but that you own them via the broker. Your shares are in street (broker) name in trust for you. If the broker went broke there would be a process whereby your ownership of the shares would get transferred to another broker or perhaps the central registry of stocks would register the stocks directly into your name and await your instruction.
The only way the value of your stock is at risk in this bankruptcy is your broker was a total scammer and never bought the shares at all but kept your $2 million and only pretended to buy stocks for you.
I suppose also a scammer broker could sell your shares without your authorization and keep the cash.
In the absence of a real scammer broker you have little or no risk in regard to a brokers bankruptcy. You are not a creditor of the broker.
Without the investor protection fund you would however be at risk for cash held in your brokerage account.
This is why most people feel more confident going with a big bank broker since it is extremely unlikely they would go broke.
And there’s NZ right beside Canada on the graph, and also put in the rare, overvalued and still increasing camp. I was interested to see Australia in the overvalued but decreasing category. Little sign of a turn-around in the Auckland property market – I wonder if we can reach the same heights as Vancouver, the memes are certainly the same here.
Underwater properties starting to show up:
Bought in 2012 for $630,000
Tried to sell a few months later for $719,500
A bunch of price drops, and it is currently at $599,000
Quite a loss for a little over a year…
Considering the $11,000+ for the closing when purchased, and the ~$30,000 for Realtor costs if sold for $599,000, then they would loose ~$70,000, and that is assuming no more price drops. Also not considering mortgage interest payment losses (est $15,000 to $20,000) or investment income losses. That may push it past the $100,000 mark in losses.
http://www.viewpoint.ca/property/cutsheet/00050203?no-nav=1&no-footer=1
WHY A DEPOSIT LIMIT?
Supreme Commander at 23 asked: why limit to $250,000. cash deposited to banks for safe keeping should be 100% protected otherwise it safer under my pillow. why should any of depositor’s money be at risk? in the first place.
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Your deposit is at risk absent the insurance because when you deposit money with a bank you effectively lend your money to the bank. Like all loans you face risk.
In order to have decent profits banks need to be leveraged heavily and are therefore inherently risky.
(What bank would lend to a business that has only 10% equity and 90% debt like they do?)
Governments found that in order to promote banking which is absolutely necessary for a market economy they need to offer deposit insurance. But because even governments don’t want to take on unlimited risk, the deposit insurance is capped.
A true believer in free markets might suggest no deposit insurance which would cause depositors to not make deposits at weak banks.
#23 Supreme Commander
If you don’t understand the most basic of banking fundamentals, then don’t comment on a financial blog.
DOES THIS BLOG HATE GOVERNMENT OR NOT?
It seems like 90% of the people who post to this blog hate government and think it a gross deadweight on the real economy.
So surely none of those people will vote for higher government deposit insurance limits?
Surely you don’t expect the taxpayer to protect you from your decision to put $250,000 on deposit with your village credit union? or with a very tiny bank like one that exists called Bank West?
Loved the flying pigs in the CDIC video. Feeling more confident now.
#16 Renter’s Revenge!
Where do these people think the interest on their savings comes from?
_____________________________________________
What interest on savings are you talking about? Oh, wait…0.35%? “Savings” accounts, c’mon now really, what a joke!
#10 Smoking Man
“Avg price will be 150k more than now on SFH. GTA.
This of course is just telepathy with the force.”
—————————-
You’ve done well, Lord Smoker. And now I sense you wish to continue your search for young Highwalker.
http://www.commondreams.org/view/2013/06/05-5
What do you think Garth? The guy isn’t even flogging a book.
The site solicits money. Fear sells. — Garth
What could be better than living in a Socialist State where
Communist Chinese Managers are parking their blood money in Canadian Real Estate and taking advantage of the free education for the offspring?
Garth,
That video was mind numbing. I think I just lost a few IQ points watching it. I think it may have contained subliminal messages.
In any case, I’m getting the impression that this CDIC thing is a hoax/scam to get more people to pour their hard-earned cash into “safe, government insured” vehicles like savings accounts and short-term GICS. What better way to prop up an industry reeling under the weight of its mortgage portfolios than to trick scared doomers into cashing out of their mutual funds and other “non-insured” assets and instead pour it all into the banks’ vaults.
The Real Estate Pig will be Broiled here in Canada soon enough. And the global Currency Markets are being Devalued everyday & we have ran off the Cliff. When the next 08′ happens, but bigger, the Banks won’t be bailing out anybody. Game Over & a New Monetary System will end the day with Gold & Silver being the winners. You’ve got almost 2 years before the Derivatives Market Blows us all to Hell. Do you still wan’t to hold Paper Assets? A lot of people will indeed become even Greater Fools than they are on this blog today.
#11 HDJ
Investment dealers are not lenders. Any risk an investor assumes is inherent in the securities themselves which are NOT secured. The CIPF is protection from misappropriation of funds and investment fraud, a necessary pool of insurance which has little to no effect on the behavior of investment dealers. The CDIC is the exact opposite. It’s effect on lenders and the general economy is a major part of our debt problem.
Getting ready for bail-ins? You bet…. depositors in Canada beware.
“Is it because we’re infested with Depends-wearing, nihilistic, bullion-licking, antisocial doomers who hoard tuna and Cottonelle?” – Hon. GT
OldPol, you do realize that I plagiarize your best scribblings for my CenturyCity/Burbank DevelopmentDeal ElevatorPitches?
[StrictlySpeaking, CorpHQ’s in Philadelphia – but I’d sooner visit my MotownSouthHomies than journey to Pennsylvania.]
I am looking for the greaterfool glossary. My wife has started reading the BLOG and she would like to know what F, HAM, CHMC, HELOC, Elfin Deity, etc mean. Someone posted one a while back.
LOL!
SilverMeridian Greater Ottawa surReal Estate Market Update
http://www2.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx
The May market cools as the heat picks up
Ottawa, June 5, 2013 – Members of the Ottawa Real Estate Board sold 1,804 residential properties in May through the Board’s Multiple Listing Service® system, compared with 1,890 in May 2012, a decrease of 4.6 per cent. The five-year average for May sales is 1,802.
“The Ottawa market is still on par with average sales since 2009, and 233 more properties were sold than the month before,” says Ansel Clarke, Immediate Past President of the Ottawa Real Estate Board.
The summer is finally here and along with it is a fresh fishy smell in the air. While Ottawa Real Estate Board is claiming a solid 1,804 sales in May 2013, graph on the Canadian Real Estate Association website is showing quite different picture. According to this http://creastats.crea.ca/otta/images/otta_chart01_hi-res.png actual sales activity in May 2013 was way less then 1,804 and only around 1580 sales. The only time it was anywhere close to 1,800 mark was in May of 2010 (again, according to the posted graph).
While it could be a simple mistake on the part of CREA who had posted wrong graph, it just shows a danger of concealing actual raw sales numbers both organizations are famous for. Both Ottawa Real Estate Board (OREB) and Canadian Real Estate Association (CREA) are notorious for concealing actual monthly Real Estate stats, which makes it very difficult to make sense of what is actually going on the local Real Estate market.
As for other stats, that OREB traditionally “forgets” to include into it’s monthly News Release, here is a some more info for your consideration:
* Residential New Listings are up by 500 units in comparison with May 2012
* Residential Active Listings are up by 1000 units in comparison with May 2012
* Residential months of inventory is all the way up to 4.6 in May 2013 in comparison with 3.8 moths in May 2012
* Residential Average Price is slightly up in May 2013 in comparison with May 2012, but taking into the account that the only houses being sold are the houses in the higher prices range vs. former grow ops or circa 1945 specials in the $350K price range that need to be demolished, this is not surprising.
Fix your act OREB, start publishing actual stats like other Canadian regions do! If you guys can’t do the job may be it’s time for you to retire and let others to get things right! Just think about it.
All is good in B.C. because credit union deposits are 100% protected, regardless of amount!
Suck on that banks.
Everyone should move their savings into a credit union account!
Then again, how good is the promise of a government that does not have its own central bank.
#17 Tom Vu on 06.05.13 at 10:06 pm
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Truth causes much holistic pain….
(but is tax deduckbill)
“So how come investors get ten times more protection than savers?”
—
To encourage people with over $100K in cash to put their money to work.
Gord. Why do you continue to fuel the complete nonsense that F created this mess: he did not. this is not partisan talk, but the truth. You, as a former cabinet minister, should know first hand the limits to the authorities of even finance ministers over crown corporations for which they are not responsible: not under the FAA, not under any other piece of legislation. Karen Kinsley started this whole thing in a race to the bottom with the US insurers. it reflected the crazy shit going on in the US. do you really thing david dodge would know nothing about a finance mininster somehow creating a huge financial stability issue. please. stop already. F brought in 40 year ams and zero down. do you seriously think so?? some history. the liberal party was in power when they gave CMHC a commercial mandate. that was back in 1996. pilot projects with lower standards started before harper even won the first election. it took years for a minister not responsible for CMHC to convince a PM and cabinet that action was needed. if you want to blame, then the outgoing president of CMHC is your first target. She never spoke to F, not once, never ever ever, before doing what she wanted as a commercial enterprise crown corp. he didnt know, dodge didnt know and they both had not authority to control it until legislative changes were made. have fun finding a single official document that support this BS notion that F started it. it was the market that started it. it was a rogue crown corp with a commercial mandate that started it. please….
To Mr. TON OF US CASH #29
You have to open an account with a Canadian investment dealer or brokerage company registered in Canada.It has to be in a Canadian account.You can have different investments in any currency like U.S. stocks,bonds,ETF’s etc. in that Canadian account but what CIPF told me is that they only protect 1 million Canadian dollars per type of account but it does not have to be in Canadian dollars.www.cipf.ca
They go by the exchange rate of U.S. to Canadian dollars.For example,you have $1 million in U.S. dollar investments today but the U.S. dollar has strengthened from 2 years ago and now is worth 1.0352 versus Canadian dollar so it’s now worth $1,035,200.You are not covered for the $35,200.
When the U.S. dollar was 90 cents versus Canadian dollar a few years back,the $1,000,000 U.S. dollar investments were worth $900,000 Canadian dollars.It was more than covered.
“Is it because we’re infested with Depends-wearing, nihilistic, bullion-licking, antisocial doomers who hoard tuna and Cottonelle? Beats me. I just work here.”
Hilarious! No wonder I keep coming back to this website …
Pretty awesome that one of them has 30k in cash in the TFSA. Either they over contributed or they recently turned their non insurable investments into cash just in time for the commercial since there’s no way that even putting in the full amount in Jan 1 in cash would have got you that much interest…..
#25,
Yes if you take the risk you get the reward, but why does that come with preferential tax treatment? That’s why he said the system is rigged to make people take risks in the stock market instead of make income on loans or actual work. So basically you set up a system where it’s in people’s best interest to take massive risks. You hit it big and you’re on easy street. You strike out and your share holders lose and / or the government bails you out. Either way you get to play again. Ya that’s a stable system.
One word for you Garth.
Rehypothecation
Nothing is what it seems in the world of western big banks, nothing. This you will discover over the coming years.
It’s official!! Cameron Muir says, “I’m calling this a transition year. I think we’re about to embark on another upswing.” Nanaimo sets sales records on “seasonally adjusted” prices.
Tell me this isn’t so, and I’ve missed the boat???
http://www.nanaimodailynews.com/sales-look-promising-for-nanaimo-and-area-1.312782
Deposit insurance should be *reduced*, not increased.
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I have a safety deposit box at TD and was warned that it is against the law to keep cash in it.
They can’t keep electronic money safe, they can’t keep physical cash safe, they don’t pay reasonable interest, they over charge fees… parasites.
Demographics is the leading indicator of what is about to go down, and if some Belgium pencil pusher agrees, then look out!
I’ve covered my baby soft behind by getting involved in a business that not everyone can get involved in. It’s only for beautiful people, like you!
http://www.youtube.com/watch?v=xqCprT4RVGs
Comment?
http://business.financialpost.com/2013/06/05/evidence-mounts-of-soft-landing-for-canada-housing-market/?__lsa=60c0-5170
Interesting video, Garth. So it looks like as long as you break up your funds and spread them around you can be covered for a fair bit. But what is interesting is that foreign currency is not covered. So if I have a CAD savings account and a USD savings account both at a Cdn bank, only the CAD account would be covered, even if the total of the two accounts came to 100k or less? So if banks start to teeter, move the cash out of a USD account into the CAD account, and if you will exceed the 100k limit, then open a CAD account at another bank and put the money there? Correct?
To clarify your point about distributing funds to increase overall CDIC coverage. There is no additional coverage for RRSPs. If an individual has 10K in a savings account, 25K in a eligible GIC and 95K in an eligible RRSP all in the same bank and the bank fails that person will receive 100K from CDIC (in theory at least).
Probably in 100s which though uncomfortable as a mattress “would” fill the room with an ersatz sirop d’erable essence.
http://www.cdic.ca/Calculate/RRSP/Pages/default.aspx
Kind regards…Ross
#57 EW on 06.06.13 at 12:25 am asked:
I am looking for the greaterfool glossary. My wife has started reading the BLOG and she would like to know what F, HAM, CHMC, HELOC, Elfin Deity, etc mean. Someone posted one a while back.
That would be me. Here it is…
The GarthFAQ
Funniest comment I’ve read here in awhile !
“Is it because we’re infested with Depends-wearing, nihilistic, bullion-licking, antisocial doomers who hoard tuna and Cottonelle? Beats me. I just work here.”
I have a question: Are RRSPs through your bank covered by the CDIC or the CIPF? Or, does the content of the RRSP determine the coverage?
Only if there are in savings-type accounts or GICs. No mutuals. — Garth
the hive miners take but does it pay?
Jaron Lanier: the digital pioneer who became a web rebel has begun to warn of the likely fallout from the headlong rush to a new technological future. Here he explains why he has become a dissenting voice – and what worries him most
http://www.guardian.co.uk/technology/2013/mar/17/jaron-lanier-digital-pioneer-rebel
“Cash” – what a quaint notion. I have some 00s on my online banking web site, which get reset each month. I don’t keep a penny in the banks.
CIPF all the way.
Cheap money? If needed, two credit cards have for years now offered me anywhere from .9% to 2% balance transfers or cheques (can write to self) with or without a processing fee. Good for up to 6 months. Rinse and repeat. One into the other. Like rolling covered calls over.
Careney and the bank of Canada lies to you, a couple years now, telling you they are going to raise interest rate. Witch they never did. Once a liar always a liar. Interest rate will go lower. Japan style!
Yes, watch those witches. — Garth
Garth
I have some mutual funds and stocks.
How do i know if my investments are CIPF protected by IIROC???
The institution holding them needs to be a CIPF member. Ask. — Garth
Is F gunning for plum retirement appointment to, say, CMHC, BOC, or even IMF?
(Nice to see the illegitimate CON govt.’s coming apart at its seams. Another caucus sucker has quit.
The trifecta is falling apart. Tim “Who Dat?” sits watching Netflix awaiting his next cue card line. (“A Culture of Change” – how about that one?)
Never forget the war is against us. We are its targets. Did you think this house of card would not fail? I didn’t:
http://www.greaterfool.ca/2012/02/03/wrinklenomics/#comment-149380
” Toronto’s CON Mayor Ford’s henchman’s campaign words:
-A lot of people have the impression you ran a dirty campaign. What’s your reaction to that?
” The fact of the matter is, all your downtown champagne-sipping socialists can’t understand how some kid from Windsor came in and kicked the shit out of them. It happened. They should get over it.””
Number 70 NFN sauys
They can’t keep electronic money safe, they can’t keep physical cash safe, they don’t pay reasonable interest, they over charge fees… parasites.
*******************************
So shop around there are actually many banks in Canada or open your own bank. There are a few very tiny banks that have opened.
Can Chris and Kelly from the video adopt me, please?
Ok, that’s one creepy video. $200K in CASH in trust for their kids? Chilling.
>73
>74
B.C. Credit Unions, like Vancity Credit Union cover USD deposit guaranteed by B.C. provincial government. “Unlimited”. Same, unlimited coverage for CAD deposit, too.
CDIC covers up to $100K single name non-registered, and another up to $100K joint name non-registered, and another up to $100K Registered (RSP, TFSA, RIF, RESP) as Garth says as long as it is in GIC or Savings.
So, if you mean $10K savings & $25K GIC are in non-RSP, plus $95K in eligible RSP, you get $130K covered.
TD has several ‘banks’ in its GIC / Savings selection.
TD Mortgage Corporation (TDMC), TD, Canada Trust CT), TDPMC, etc. Each up to $100K, even in same TD Bank branch deposit.
Same for RBC, Scotia, BMO, CIBC.
But if you have several of 100K dollars, time to go to Wealth Management section.
Yes, Canadian houses are overpriced. That is obvious. The problem not addressed is that rentals are also very unaffordable. So all the investing nonsense aside, it is a good idea to look at short and long term: Again, over and over, if you are living long term in Calgary, it makes sense to look at owning the mortgage. Things move really slow in Calgary, so unless there is a crazy crisis, it is unlikely there is a 1980’s style crash. There is lots of speculation on this blog about housing crashing, and since 2007 I was following this blog and the mls.ca site as I was saving. There werent many price changes and just speculation about what may happen, and the prices didnt move much. I remember going to see this dude Sheldon Wolf at rent to own or something and this guy was a crook, stay away from rent to own, whether this attainable homes thing is ok, remains to be seen, some of these places if you have kids they will be on a bus for 2 hours if that is ok with you.http://attainablehomescalgary.ca/
More bad news for REIT’s
http://www.cnbc.com/id/100793087
US article about US REITs. Canadian offerings a better choice. — Garth
Never mind real estate! Global TV ad of female jock as a ‘Dad”, we are definitely now ‘f…k’d for sure in this country.
#88 “US article about US REITs. Canadian offerings a better choice. — Garth”
Nevertheless, I’m sure this has and will have an impact the image of Canadian REIT’s
REITs on sale. That’s a good thing. — Garth
#70 NFN_NLN
I have a safety deposit box at TD and was warned that it is against the law to keep cash in it.
They can’t keep electronic money safe, they can’t keep physical cash safe, they don’t pay reasonable interest, they over charge fees… parasites.
Was it the TD bank in Canada or US told you that?
They lied to you. — Garth
ozy – i am against insuring more than 100000, i do not have more than that in the bank, so what gives???
People with that 100000 or more: go travel the world, you do not need to save like dogs – it wil be inflated anyway -that’s why the gov. has an inflation reading, because they promote inflation.
And it’s not gov. fault afterall, in a society infested withn parasites, work faking and mouth-full talkers, only inflation can keep it going. How much % of workforce actuallt produce something we export and out of that % how many work with dedication and provide true value for the wages???????????
inflation, rain it baby!
Garth here’s a new article idea: why canadians don’t move to US?
like jews feeling egipt, kanadians can flew house-slavery here. what stops them? they already got the prophet (has a beard, if you think about it) lol
so, what stops kanatian immigrating en-masse to the country full of the consumerism shit they can’t have enough? are they just too LAZYYYY?
well, if that is the answer, then don’t expect house prices to drop very soon
The chart is man-made. This world is not driven by chart.
I have an investment account and two banks, and there is not enough money in both banks at any given time to insure; leave a float monthly at one for $100 as am a good customer, and the other becomes my spending money. Never much there either, as live month to month on a budget, so could care less about insuring my bank deposits. :)
Plenty of greater fools left to prevent a serious correction any time soon:
http://business.financialpost.com/2013/05/22/5-22-13-gold-space-now-a-buyers-market-barrick-ceo/?__lsa=3b2c-cd83
#63 tellthetruth on 06.06.13 at 1:15 am
Gord. Why do you continue to fuel the complete nonsense that F created this mess: he did not. this is not partisan talk, but the truth. You, as a former cabinet minister
———–
apologies for the bashing stlye comment but c’mon man
GORD?
who is GORD?
did you have a bit too of much of grampas cough medicine again?
so what I am hearing here is the depositors face risk, govt(taxpayers) faces risk (CMHC), but the banks(investors) really sidestep the risk and rake in all the profits.
IMO it should be the investors that hold the risk, not the depositors.
Are depositors paid out before investors (preferred or otherwise) in the face of bankruptcy?
Listen, everything is negotiable. You know that don’t you? You get yourself in a position of power, real or imagined and you tell that person exactly what you want.
http://www.youtube.com/watch?v=Odd8Zdhuj9o
Yeah, that’s right. University of Smoking Man B.A Honours!
It all good in the Vancouver economy and for real estate. So, says this Global video/article:
http://globalnews.ca/news/618233/big-boost-in-building-permits-good-news-for-b-c-economy/
Hi Garth. You are likely already aware of this story:
http://www.cbc.ca/news/canada/edmonton/story/2013/06/05/edmonton-brent-rathgeber-resigns-conservative-caucus.html
If not, I’m sure you can relate to what this current MP is going through. Meanwhile with MP’s like Shorty Devinder, its business as usual:
http://canadianonlinenews.net/2013/06/04/bmo-settles-with-most-in-alberta-mortgage-fraud-lawsuit/
A couple topics off topic I’m watching as it has ugly potential:
http://www.cbc.ca/news/health/story/2013/05/28/bird-flu-h7n9-tamiflu.html
As well as this slow moving train wreck (this is another one that won’t end well):
http://www.youtube.com/watch?v=PduUO2Ez2rU
http://thinkprogress.org/health/2013/06/05/2096901/monsanto-stops-trying-to-force-feed-europe-after-massive-anti-gmo-protests/?mobile=nc
Hey Garth –
Ivey Purchasing n.s.a. came out this morning through 70 and the s.a. clocked in at 63.1
This doesn’t sound like an economy running out of steam. CAD is up almost a full cent, oil and gold prices are rising and small wonder the real estate market here is highly-valued. Your precious American economy, with that arrogant and incompetent leftie Barack Obama at the helm will likely show disastrous jobs numbers tomorrow whereas the True North will likely shine on and on. Sorry to burst your bubble.
Yes, watch those witches. — Garth
what kind of witch watch do you have Garth… I might be in the market for one.
I was looking at a ‘macbeth’ but you have to buy three of them. seemed an extravagance….
RE crash means economic disaster for Canada.
They will do all they can to stop that disaster, as clearly illustrated.
Look at Carney, going to UK, where RE pumping efforts are all the rage as well. Prices up in UK, right? RE is the answer to GDP growth that all countries seek, now that they all distroyed their manufacturing.
Everyone knows that smart money goes with the “Sell in May and go away” mantra glad I followed my advisors words looking at the DOW ,S&P500 ,Nikkiei etc……. seems like he knows what the smart money are doing
Is there an explanation for the carnage occurring in REIT ETFs?
Relax. — Garth
The key to getting your offer accepted in this white hot Edmonton and Calgary real estate market is to get a realtor to send you exactly what your looking for then use the listing agent to check it out and then make the offer.My agent was to slow and not motivated.The listing agent gets full commision and that makes it a lot better for both of you.Thats what happening.
Can’t help noticing that if 6 other brave CPC souls were to join Brent Rathgeber, they’d hold the balance of power in a minority gov’t…
So thus the impetuous fools should carefully fritter away your shekels under that mattress. Here are the reasons why.
A. You get to keep an eye on your mountain of gold (cash) just like Smaugh! It is also fun to literally sleep on a mountain of cash!
B. Your investment is safe. Always keep a loaded weapon nearby; you never know when investment-stealing Zombies might arise from the dead!
C. Your cash is close at hand, just in case you need to withdraw fast, There is always someone selling really nice speakers out of the back of their van and you just can’t let an opportunity like that go by!
D. The government can’t tax you on it. It is like having an account in the Cayman Islands. No one knows where it is or how much you have!
E. Lastly you are going to earn just about the same amount of interest as you would in the bank! Well actually perhaps a little more if those of you are not wearing Depends then you could strain out the uric acid and sell it as a profit! Who said your pissing away your money when you’re actually pissing on it at night!
What’s the point of raising the limit if it is currently underfunded?
http://en.wikipedia.org/wiki/Canada_Deposit_Insurance_Corporation
According to the CDIC’s 2012 Annual Report, CDIC protects $622 billion CAD in total eligible deposits, and has $2.44 billion CAD in assets to meet insurance claims.[4] This amount represents 0.39% of total eligible deposits. The CDIC is also authorized to borrow up to $18 billion if necessary from the federal government or the financial markets, and may request further funds from Parliament.
Wait, are U.S. REITs bad? Should we be betting against America? the slow recovery seems perfect climate for REITs to show steady growth.
Yes, everything is supposed to go up forever, contuously. LOL. — Garth
To all those going crazy about REIT’s and XIU getting sold off heavy in recent days, brokers are shorting it.
How do I know? Because the TSX and TSX-V have made them no commissions and their client base is dwindling. Playing with margin in shorts and options is their only money maker (and loser) and I was asked to join in.
That’s for other cowboys to try…
Balanced portfolios are the new yoga pants in town, aand you all have a late spring clearout sale on some good assets out there.
lookback
Thursday, June 6, 2013
Bill Black: How Elite Economic Hucksters Drive America’s Biggest Fraud Epidemics
This article is part of an ongoing AlterNet series, “The Age of Fraud.”
Read more at http://www.nakedcapitalism.com/2013/06/bill-black-how-elite-economic-hucksters-drive-americas-biggest-fraud-epidemics.html#iOvKTQxoCkhVWARZ.99
#111 – “Yes, everything is supposed to go up forever, contuously. LOL. — Garth”
I’m a little disappointed Garth. You used LOL.
Sorry, I assumed you were a Little Old Lady. — Garth
Is there an explanation for the carnage occurring in REIT ETFs?
Relax. — Garth
Like i said before sell high buy low
So what’s with all this bellyaching about the drop in price of REITs? I just checked, and XRE is ON SALE at $16.35, and CAR.UN is also ON SALE at only $23.25 per share! Wow, I didn’t know you could have Boxing Week sales in June! When the share price drops that means the percent yield increases, that’s awesome! Time to load up on more REITs at these dirt cheap prices!
Well Garth, Have you sent Mr. Rothgerer his “I told you so” yet?
# 106 – “Is there an explanation for the carnage occurring in REIT ETFs?”
“Relax.” — Garth
———————————————–
Honestly Garth. Would you be buying Canadian REIT’s right now?
You mean when they cost less? What a dumbass idea. — Garth
98 fancy pants asked:
Are depositors paid out before investors (preferred or otherwise) in the face of bankruptcy?
******************************************
Yes, absolutly, depositors have the first and highest priority in the event of liquidation. That is the law.
In the U.S. banking crisis many shareholders lots tons of money. Very few if any deposits were lost as most failed banks were folded into larger banks. But a I believe a few did simply liqidate and a few deposits above the FDIC limts were lost, I understand. Some bank debt investors lost money too.
@Gotthardbahn, post #102:
Strange how the U.S economy is recovering nicely with, as you say, that arrogant and incompetent leftie Barack Obama at the helm after almost going over a cliff in 2008. If anything, the performance of the U.S. economy in bouncing back from the abyss is a fine example of good leadership of Barack Obama’s government. It sure beats the “leadership” of the previous government, which got the U.S. into such a mess in the first place.
Bloomberg: JPMorgan's Dimon sees "scary world" as interest rates return to normal
Yep. Time to scare the horses to sell, now that banks (smart money) are well positioned on the other side of this unwinding USD/JPY trade; while the dumb money (remember those dividend chasing yuppies?) jumped all in, too late.
Same routine folks. Stocks plunge, then Fed conducts another round of open mouth operations by hinting QE4 (really QE5).
Yes, everything is supposed to go up forever, contuously. LOL. — Garth
OK Garth I like your blog about realestate but you were saying that not to bet against america and there will be no such thing as 2008, now your comments will be like the one above if we might get a collapse (just maybe a collapse ) how about advising people that its ok to take some profits after a nice run just like you told the gold bugs a while back to do so with their gold .
(a) There will be no collapse. (b) How many times do I have to write about rebalancing? — Garth
(a) There will be no collapse. (b) How many times do I have to write about rebalancing? — Garth
May I ask did you rebalance your REIT ETF before of after the carnage taking place or did you take some profits on the top and buy back today
Rebalancing should be automatic when asset weightings exceed their targets. It’s so boring. And it works. — Garth
TrustNet leaks
Money trail leads home to New Zealand
NICKY HAGER Last updated 05:00 07/04/201310
http://www.stuff.co.nz/business/money/8515361/Money-trail-leads-home-to-New-Zealand
=
fraud accelerator crooks colliding with idiots
http://www.nakedcapitalism.com/category/australia
By Richard Smith, who would be a member of the International Consortium of Interfering Bloggers, if there was such a thing.
http://www.nakedcapitalism.com/2013/04/new-zealand-pseudo-financial-companies-and-gt-group-both-still-going-strong.html#h0yH531lvCSpqyZv.99
“An asset-allocation model to follow”
http://www.bankrate.com/finance/investing/asset-allocation-model.aspx
New BOC Gov Stephen Prozac does not see dangers of low rates at moment….
Translation, the X exporter supporter shooting for a low dollar…
See Financial Post
Hi Garth,
Just a quick question, how often should my investment advisor be rebalancing the portfolio? Had lots of gains this month and lost then today… I get that it’s a long term thing and hindsight is 20/20 but I feel like he should have rebalanced last week… I guess this is why the markets dropped now.. lots of rebalancing.
Also, I’m still with you on the housing thing. Things are beyond over valued. Today I got an add where the seller of a condo will finance the maintenance costs from the closing until the end of the year. I’ve also seen lots of offers for decorating etc. No matter what anyone tries to tell me… I hear more and more people talking about how house poor they all are. We are comfortable where we are with a paid for home and lots of investments but wondering how to get further ahead then we are, since so many people we know made such easy money in real estate… sometimes you feel silly for being cautious.
Last I checked the REITs are still holding the same assets. Paying the same dividends. Same debts. Same cashflows. So why do some people insist that a drop in price has somehow INCREASED the risk of further price drops. If you liked’em before, you should love them now that they’re on sale. If you’re looking for a different opinion then you won’t sneak it out of Garth
Mortgages gonna crash the banks?
No, it’s the off balance sheet derivatives, like when Manulife reported a loss of billions a short while back and whined that they couldn’t mark to fantasy like the US Americans do. Canadian banks are not just exposed to Canada – they have significant global operations and messy marriages like between RBC and Dexia (billions in bailout money in 2008 and in 2011 the first casualty of the EU debt crisis). Canada TBTF banks do not operate independently from the rest of the world, they are fully integrated.
If there is a bail-in party, it will be a tax so it just doesn’t matter how high CPIF or CDIC coverage goes – tax is not covered, and in a systemic event all your investments are fair game for the taking.
Categorically wrong, you gold-pumper. — Garth
Is the same quality in Toronto CONDOS!?
http://www.liveleak.com/view?i=72a_1370535686
According to this animated CDIC propaganda all Canadian financial institutions are hanging by a thread. Very appropriate imagery.
#120 Doug in London
“@Gotthardbahn, post #102:
Strange how the U.S economy is recovering nicely with, as you say, that arrogant and incompetent leftie Barack Obama at the helm after almost going over a cliff in 2008. If anything, the performance of the U.S. economy in bouncing back from the abyss is a fine example of good leadership of Barack Obama’s government. It sure beats the “leadership” of the previous government, which got the U.S. into such a mess in the first place.”
Yes, recovering so nicely that the barest hint that the Feds might SLIGHTLY scale back QE at some undisclosed point in the future caused markets to take a big dive.
Nice.
And totally anticipated. — Garth
Garth, I can understand rebalancing works assuming one has the right balance in terms of asset allocation. However, picking that balance and adjusting it over time to take into account all kinds of circumstances is much more difficult, agreed? With many large economies being in some sort of trouble and policy changes and factors that could influence political and financial stability being in more and more constant flux, how does one decide on a good asset allocation mix, and how to proceed adjusting it over time?
What? You want my secret sauce? — Garth
That 100K CDIC insurance is per account. If you have more $$ you want protected you can open up another account. Maybe add your wifey or child as an account holder if you have too. That account would be separately insured for 100k. I think even each type of account is again insured up to 100K. Open up accounts with other banks if you need an extra 100K insured.
#59 SilverMeridian,
I sold my 3000 sq foot newer home on a 60 by 200 lot in a small southern Ontario city and moved to Ottawa in January 2012. The money I got for my house was 320K – the cost of a townhouse out in Farhaven. I know its Ottawa, but even in the burbs a comparable home to what I had sells for almost twice as much.
Anyhow, our family of 5 found a smallish 3+1 bedroom, 2 bath house in south Ottawa for 1400 a month rent plus utilities, and are planning to sit out of the market for awhile.
I agree with you. Things are not as rosy in Ottawa as the realtors would like us to think. Patience is a virtue. In the meantime, renting is starting to grow on me. The landlord is awesome and good about keeping up with repairs. Hubby no longer spends 100’s a month at Home Depot which leaves us with more disposable income for things inside the house (furniture, electronics, etc). Also we have more free time since we are not endlessly working on expensive home improvement projects. Now I just need to follow Garth’s advice and figure out how to properly invest the 320K.
#67 Josh in Calgary
Investing some of your money in the stock market is now “taking a massive risk”?
Really? I’d love to know how you figure that.
#77 & #81 -mutual funds.
The MFDA IPC has coverage in the event of a dealer insolvency. See http://www.mfda.ca/ipc. However, it does not offer protection in the event of a mutual fund company going belly-up (e.g. Norshield) or if the dealer is not registered (e.g. An Earl Jones situation).
@zeeman1, post #133:
Yes, recovering so nicely that the barest hint that the Feds might SLIGHTLY scale back QE at some undisclosed point in the future caused markets to take a big dive.
————————————————————-
Thank you very much, Feds, for creating an excellent buying opportunity of assets that are on sale now like REITs, utilities, and preferred share ETF’s. The rationale must be that by making these assets cheaper more people will be able to afford them. That way they will have more money to spend which will further stimulate the economy because 1) they saved money on the initial purchase price, and 2) these investments pay good dividends. Keep up the good work Feds!!!!!!
What does everyone think of TD banks free galaxy promotion ? Why are the banks offering so many freebies ?
Rebalancing is Not Maket timing
confused says:
I get that it’s a long term thing and hindsight is 20/20 but I feel like he should have rebalanced last week…
******************************************
You are not asking for rebalancing (unless you want it done each and every month end) you are asking for market timing and expecting 20/20 hind sight.
Most investors are too quick to freak about market declines and should not even be in equities
Garth,
what kind of protection, if any, is there for RRSPs? They are neither chequing nor saving yet there can be cash in them — as well as GIC, funds, stocks, , etc
#38 A Nightmare on Bay Street
Masterful Newz Speak from F there.
Healthcare reform
Job Creation
Right Track
Tax Relief
Tax Reductions
When have ANY of these talking points every held true?
#39 john: It ain’t time to buy until REITa MacNeil is singing.
#131 Carpicker on 06.06.13 at 4:24 pm
Wow. That clip makes me sad….
#105 angela on 06.06.13 at 12:10 pm
“Everyone knows that smart money goes with the “Sell in May and go away” mantra glad I followed my advisors words looking at the DOW ,S&P500 ,Nikkiei etc……. seems like he knows what the smart money are doing”
——————————————————————–
Wrong. The smart money stays invested in the Market.
The QE beatings will continue until the economy improves.
Printing the stock market back into a economic renaissance.
Sell your house, your gold, and ride along the stock market, because the FED has never been wrong before.
Anyone who thinks a bailout will happen will be sent to central planning reeducation, it won’t happen, it can’t happen, it’s different here.
You know what I’m noticing from this chart, Garth? That almost everywhere that houses are overvalued in relation to income, they’re more over-valued in relation to rent. And also almost everywhere that houses are undervalued in relation to rent, they’re more undervalued in relation to income.
Maybe income is a bad metric. Income’s been growing faster than that Case-Schiller trendline was (inflation + 0.4%) before house prices got wonky. Maybe 2-3 years’ income worked as a good baseline in the days of the boomers and the people who had to put up with the boomers when they were insufferable kids, but now, it looks like a small reduction is finally beginning to show up.
Adjust that optimum income range downwards until income meets rent, and then maybe we’re in business, which means about 20-30 months income should be buying a house, not 24-36, as was the case when paycheques were even sadder than they are today.
Maybe I’m a house doomer, but I’m also an uncredentialed economist, different from an uncredentialed MD, as Paul Krugman can tell you, and I can see trend lines.
The old baseline of 2-3 years’ income is probably dead as a legitimate metric for the new normal. We’re looking at 20-30 months now.
@129 “Last I checked the REITs are still holding the same assets. Paying the same dividends. Same debts. Same cashflows. So why do some people insist that a drop in price has somehow INCREASED the risk of further price drops. If you liked’em before, you should love them now that they’re on sale. If you’re looking for a different opinion then you won’t sneak it out of Garth”
I hope that’s true. I can’t fathom why REITs are so cheap (and falling) when their returns are so high. The only thing I can assume is that people are anticipating greatly diminished returns and I was missing some bit of info which will be “obvious” in a month. I didn’t buy these things for capital appreciation, I just don’t like seeing 1-2% daily chunks coming off them.
As long as we don’t find out that they secretly making money by converting rentals into condos, we’ll be okay. The sucky part of indices is that it’s hard to follow what the members are doing.