OMG. Normal.

delux

What are people in the mortgage business saying?

“Bye bye low mortgages, bye bye cheap loans, hope you locked in last week :).” Comments like that were being posted over the weekend on sites where mortgage brokers hang out. It pretty much sums up a world that changed dramatically last Wednesday. That was when the US central bank boss, Ben Bernanke, let it rip that government largesse will be ending sooner than later.

In the few days since, all major banks have increased mortgage rates again. Five-year money is at 3.39% (it was 2.89% ten weeks ago) and RBC has upped its 10-year rate to 3.99% (it was 3.69% one week ago). It sure looks like there’s more to come.

This is because bond market yields are soaring and prices falling as bondholders take profits and prepare once again for interest rates that are higher than inflation. It’s a big change. A Government of Canada 5-year bond yielding 1.1% in May was at 1.7% on Friday. Yeah, .6% may not seem like a big jump, but it’s huge – a 54% move.

BeeMo senior economist Michael Gregory has some sobering words to add: “The Fed knew that the moment they started to talk more openly and clearly about stopping their purchases, the market was going to puke… Keep in mind that when you refinance a loan, whether it’s a car loan or a mortgage, you may be paying higher interest rates than you are now. Be prepared for normal.”

Normal? What the hell is ‘normal’? Interest rates have been in the ditch since 2009, and about 1,600,000 homes have sold in Canada since they collapsed as part of the emergency measures to save us from shooting squirrels and going Mad Max.

US bond yields, like ours, have also risen by half. Estimates Rémi Roger, vicepresident at Seamark Asset Management Ltd, this is all leading to those Government of Canada 5-year bonds (which the banks benchmark in funding mortgages) jumping from the current 1.7% to 4%. That would turn today’s 3.39%  five-year fixed mortgages into loans costing close to 6%. And just imagine what that would do to real estate values.

And if you really want to freak out, consider the average 5-year fixed mortgage rate from 1973 until today. According to RateHub, that’s 9.25%.

Of course, nine per cent is not going to happen. The economy would collapse. But there’s no doubt those higher interest rates I’ve been warning you to prepare for, are arriving. Anyone who has a 2.85% mortgage maturing in 2014 (when variable rates also begin their ascent) or 2015, better start working on a plan. Your choices: (a) raid savings and pay the principal down sharply upon renewal (if you have any savings), (b) extend your amortization to 30 years to try to ease the pain (but 30-year loans may soon be banned), (c) score a big salary increase (good luck with that), (d) start dealing crack, or (e) sell.

The most at-risk groups (I will repeat myself) are equityless deflowered property virgins who bought in 2011 or 2012, especially in 416,  and the house-rich, asset-poor wrinklies who ignored me and didn’t sell when the market peaked, especially in urban BC. Of course, everyone with most of their net worth in a house is also at risk, particularly if they live in Winnipeg, Saskatoon or Edmonton, where real estate was inflated far beyond the bounds of human stupidity.

“There’s a general sense that the era of low yields is over,” adds BeeMo’s Gregory.

But don’t expect mortgage rates to swell like a gland on a Friday night. Last week’s eruption may have pushed hard against the upper limit, and if economic and corporate data over the coming weeks is tepid, yields could retrace. But it won’t last. The US recovery is secure. The financial crisis irrevocably over. The return to normal’s upon us. Canadian housing has had its climax.

Still want to borrow and buy?

Then pre-approve now with the longest lock-in you can find. Consider a 10-year loan, which will look ridiculously cheap six or seven years from now. And get ready for the buyer’s market your mama said would never come.

Normal. How will we cope?

ONT MORTGAGE APPS

New mortgage apps, Ontario. Oops...

189 comments ↓

#1 City that smells like it sounds on 06.23.13 at 5:27 pm

Furrrst! Oh and still waiting for that special piece on Regina, Saskatchewan.

#2 Peter on 06.23.13 at 5:31 pm

Garth are you still consistent with continuing to hold REIT’s & preferred’s in a rising rate environment?

I like yield. Both assert classes will do just fine. — Garth

#3 Randy on 06.23.13 at 5:33 pm

It’s about time !

#4 Texasboy on 06.23.13 at 5:35 pm

It was only a matter of time…

#5 Mike on 06.23.13 at 5:45 pm

Thanks for the chart goes to Canadian Watchdog :)

Actually it is a site one should visit often. — Garth

#6 KG on 06.23.13 at 5:45 pm

I guess, you mean the US financial crisis has been “literally” papered over.

#7 Apocalypse When? on 06.23.13 at 5:46 pm

When has the Fed ever walked the talk that comes out of all sides of its mouth? Interest rates may rise but QE is here to stay. It will stop one day but only when its ever diminishing effect becomes Zero and no banker or politician can spin the effects any longer – maybe another year or two to go yet!

Dreamer. — Garth

#8 yvr2zrh on 06.23.13 at 5:50 pm

First? Did I go into a time warp or something? What’s with this 5pm posting. . . .

#9 yvr2zrh on 06.23.13 at 5:51 pm

seriously however – – – we are now about to see the change in the market caused by the reversal of 30 years of interest rate decreases – – resistence is futile — – and – – ignorance is not going to change the direction of this market. . . . . I see that there will be significant price pressures now downward so get out while you still can (that is if you have to!!)

#10 Prof ANON on 06.23.13 at 6:04 pm

Since there is essentially no over-land personal home flood insurance in Canada, any comments on how this mess in Calgary/High River/etc. is likely to affect the low/mid equity crowd? I can’t imagine that the government is going to pick up the entire bill.

#11 jess on 06.23.13 at 6:13 pm

interest rate effects on structured finance
e.g. variable rate demand bonds (VRDBs), letters of credit and interest rate swaps

http://www.alternet.org/economy/wall-street-and-municipal-fraud

#12 "It's Different Here in Saskatoon." on 06.23.13 at 6:13 pm

No, It won’t happy here. There’s no way to go for real estate but to go up. My trusted Mother In Law, My Neighbor who bought 2 $500K house (Without Down payment), $200K cabin, and a $60,000, told me that it won’t happen here in Saskatoon.

This province is exploding with riches because of the economic boom.

Everyone want to move here. “Saskatoon Shines.”

Hey Garth,

Is there any cure for delusion?

Regards,

#13 eastvan on 06.23.13 at 6:15 pm

The real housing problem

http://thetyee.ca/News/2013/06/20/Canada-Housing-Problem-Study/

#14 Freedom First on 06.23.13 at 6:23 pm

Life is good when you listen to Garth and maintain a liquid, balanced-with re-balancing, diversified portfolio according to Garth’s %formula for fixed income, RE, equities, cash. When a person/couple varies from prudent financial management like this, that is when they become open to financial ruin. And when it happens, nobody will want to listen to your woes, they will simply blame you for being an idiot. Which, of course, you are.

#15 Willow dale on 06.23.13 at 6:39 pm

Ok Garth,
How is calgary going to perform now with the flodding?
And.. What about unemployment in the Gita now?

Here in wilowdale there is no RE inventoery (houses)
And places like Richmond hill and markhamprices are holding despite the lack of subways or lack of infrastructure….

#16 Saint Herb on 06.23.13 at 6:46 pm

I preaproved a 10 year at 3.69% last week just in case the wife goes crazy and insists on buying. 1 year into renting and still no joy. If the lowere prices don’t come and the cheap money goes. I am screwed. Place your bets.

#17 T5_INCOME on 06.23.13 at 6:54 pm

Wow that chart says it all. I take solace knowing the slight beating I took in XBB.TO last week is nothing to compared to the beating those variable “how much a month” people will be taking.

Plus no matter what happens, XBB.TO throws me some cash each month.

#18 jan on 06.23.13 at 6:59 pm

People here in Vancouver are absolutely nuts.
95 % of them are positive the whole world wants to move here and buy property.
I guess for society as entitled as Canada one easily sees how brain-grey matter is not present here and it probably never will be.

As one young female told me recently, sure buying $600,000.00 condo in Van is a great deal ,after all, who care how much it costs, just take a mortgage right, she said/.

Nothing but stupid entitled people here !

#19 Mikey the Realtor on 06.23.13 at 7:05 pm

Nothing to worry about, they have attempted to move rates up a few times and they didn’t stick, this time will be no different. With equities crashing bonds are the only option for the robmarket participants.

Poor Mikey. — Garth

#20 KG on 06.23.13 at 7:07 pm

What does the percent represent in the chart ? mortgage application growth ? with the sales down over last 6 months should it not be in negative territory ?

A sales drop does not mean home-buying ceases. — Garth

#21 father on 06.23.13 at 7:10 pm

mikeys shitt’n his pants now

#22 father on 06.23.13 at 7:16 pm

garth I can’t figure how one can think 1 mil is peanuts. I have enough money to buy without any mortgage and will never pay that much for garbage

#23 Mark on 06.23.13 at 7:19 pm

If 9.25% is the average mortgage rate over the long term, and we’ve had substantial periods of far below 9.25% — that means, if there is to be mean reversion, that rates will eventually go much above 9.25%/annum.

Also, the economy most certainly would not collapse with high rates. Interest rates do not control the output of the economy. Only the distribution of wealth between savers and borrowers.

#24 father on 06.23.13 at 7:21 pm

dampvanuck 33 by 122 lots with new builds for 1.3 to 1.5 mill. I DON’T THINK SO

#25 Mark on 06.23.13 at 7:24 pm

“Since there is essentially no over-land personal home flood insurance in Canada, any comments on how this mess in Calgary/High River/etc. is likely to affect the low/mid equity crowd? I can’t imagine that the government is going to pick up the entire bill.”

CMHC will likely take a bath (no pun intended) on the houses that fall under CMHC insurance that are destroyed/devalued. And the rest will be borne by private people losing their savings.

#26 TheCatFoodLady on 06.23.13 at 7:33 pm

http://blogs.vancouversun.com/2013/05/15/the-blonde-vancouver-too-expensive-for-condo-buyers/

#27 TurnerNation on 06.23.13 at 7:34 pm

Raw footage from helicopter (independent) of floods in Calgary city centre :

http://www.youtube.com/watch?feature=player_embedded&v=vYv9BBIbwjE

#28 not 1st on 06.23.13 at 7:36 pm

Most pre-approvals are only good for 6 months. So you are saying RE carnage occurs within 6 months??

#29 not 1st on 06.23.13 at 7:43 pm

Regarding Calgary, i would think that this disaster actually puts a nail in their property run up. Think about it, probably several hundred thousand homes damaged including a lot of condos downtown and on the beltline.

They can’t be sold in that condition and will need to be first fixed up from the owners own pocket. Once they have committed 10s of thousands in repairs they still might have to lower the sale price because the previous damage puts a stigma on the place, like a grow op, or the home is legitimately on a flooding area and should have never been built there; cough New Discovery. They definitely will be unable to raise prices to cover the repairs, hence lots of people will be staying put.

Its not hard for buyers to find a satellite map to determine if an area was flooded.

#30 Harry Wilson on 06.23.13 at 7:44 pm

(Get ready to make fun of me; I’m talking GICs.)

How long, or what factors, does it take for these types of rate increases to affect GICs? Would the current trend of mortgage rate increases indicate a comparable GIC rate increase by the end of 2013?

Thanks.

#31 Oceanside on 06.23.13 at 7:47 pm

MSM News…Michael Campbell the “finance” expert on Global Vancouver was commenting on the market correction, bonds etc.. this morning and summarized with the fact that this is long overdue and interest rates are now on their way up and we should be prepared.

Was looking at housing stats for Central Vancouver Island yesterday . Over the last three years the sales in April, May and June are down just a bit but sales prices are down around 15% and often more from 2011/2012. Lots of action on good homes in the mid $300,000 range and and under. Over $500K is pretty much dead, the higher end homes have to be at that magic “$499,000″ if they really want to sell. The fall market will be interesting.

Looking at Penticton and Summerland in the Okanagan, LOTS of homes on the market for 200 to over 400 days and oddly enough hardly any price reductions, peculiar how one area can be so deluded as to wait for “things to get better” with what is pretty obvious to most…

#32 Keith in Calgary on 06.23.13 at 7:55 pm

“The US recovery secure”………ROFL !! Are you channeling Bernanke now Garth ? In the last 5 months I have spent a week in Detroit, Clio, Eau Claire, Delaware, Osseo, Minneapolis, Butte and in 2 weeks I am off to Anchorage…..then Las Vegas…….there is no “US recovery” Garth…….just utter misery and hanging on.

There is a US election cycle coming up for the Democrats……and Bernanke has his eyes on nothing else, except for how he will be written up in the blogs of 2050 after he retires this year. He wants to appear to be the guy who saved the world in 2008 and “responsibly” started reducing QE…….of course duly realising, he cannot do so, for the moment they do, the world will in fact end, and if they continue, as they must, the world will eventually end.

They’re screwed, blued, and tattooed……..we all are…….but it’s easier and less controversial to lie, isn’t it ?

My Brasilian colleagues finally got it this week…….what we’ve seen is but a taste of what is being prepared. An appetizer, or more appropriately, a petisco, if you will……..

All my bonds are sold, I am 100% cash, and for the last month I have been visiting my metals vendor every Friday, buying either 5 ounces of gold one week, then 30 ounces of silver the other…….I’m averaging down as it drops and when I’ve got about 1/3 of my cash in moved over to metal I am stopping. The rest of it will sit in cash for now. All paper is potentially worthless, but I don’t have to pay any fees to spend cash.

Typical metalhead. Sad. — Garth

#33 Netcentric on 06.23.13 at 8:14 pm

If you don’t live in Ontario and want to see the CanEquity graph for your province or city go here
http://www.canequity.com/stats/canadian-mortgages/

#34 DaleFromCalgary on 06.23.13 at 8:16 pm

Most of Calgary houses are up on the plateau or foothills, plus insurance doesn’t cover overland drainage, so I doubt there would be any carnage in the equity market. Downtown core was hit hard by lack of electricity since transformers have to be dried out first. LRT tracks washed out by Stampede grounds. Saddledome is definitely out of action.

Will house prices fall on the floodplains? In the long run it will be irrelevant because everywhere people knowingly live on floodplains or beachfront houses in hurricane zones, then are surprised when they get washed away. Look at High River, which has been flooded every five years or so for a century, yet 12,000 people live there.

I said it before: if you are an unemployed tradesman elsewhere in Canada, come to southwestern Alberta this summer. Lots of reno and repair work for you.

#35 Sask Girl on 06.23.13 at 8:22 pm

I’m with #1 City that smells like it sounds. I’m starting to think things are different here….or Regina isn’t even worth a post.

#36 Sebee on 06.23.13 at 8:44 pm

Hey virgins…chart says you have work to do!

#37 MikeytheRealtard on 06.23.13 at 8:45 pm

#21 .. Oh mikey…. Proving again he is a typical realtard… Telling all his clients, I mean client, sorry, his mother, that these rate hikes won’t hold and 2.89% mortgage rates are coming back soon…. Hahaha ha… Dream on mikey and get that resume printed for burger flipping at McDonald’s! Gonna be a looonnnnngggg lineup with the rest of your pathetic realtor pals!

#38 robert james on 06.23.13 at 8:46 pm

Regarding the flooded basements in Calgary ,,apparently if your basement is full of water and you pump it out too quickly the basement walls may collapse.. The ground around the house is saturated and the basement walls may not take the pressure.. I finally got through to some friends in Calgary this morning as their phone was out to warn them about this.. The water in their basement was only thigh deep so not too bad but they knew of another house close by that had a collapsed basement probably from being pumped out too fast..

#39 Tony on 06.23.13 at 8:47 pm

Re: #27 Mark on 06.23.13 at 7:24 pm

That’s why it makes sense to own a house or estate on a hilltop with a million dollar view. The poor people live in those little shoeboxes on 50 foot lots. If you have to buy, buy a palatial estate and never worry about floods.

#40 NFN_NLN on 06.23.13 at 8:47 pm

#12 Prof ANON on 06.23.13 at 6:04 pm

Since there is essentially no over-land personal home flood insurance in Canada

Is that true?

#41 espressobob on 06.23.13 at 8:50 pm

#32 Harry Wilson

Used to hold GICs some time ago. Thing is you pay full tax rates on the profit and the damn things are locked in.

Opened a non-registered account and currently hold a couple of ETFs in prefered shares. The yield is better and dividend are taxed at a much lower rate through the ‘dividend tax credit’. And these holdings are liquid (can sell them on a dime). Might want to bounce that off an advisor.

#42 Babblemaster on 06.23.13 at 8:53 pm

Bernake is full of crap! Almost as much as Mark Carney was. There is ample evidence that Bernanke says one thing, and does another.

#43 Ralph Cramdown on 06.23.13 at 8:54 pm

#12 Prof ANON — “I can’t imagine that the government is going to pick up the entire bill.”

A tone-deaf prime minister, battered by spending and entitlement scandals was about to face his Western base and try to explain to them how the product of the Reform movement had drifted so far off target. Now all he has to do is call the army, write a few cheques, put on his vest and flip pancakes. He’ll write the cheques. Just like Romney complained when Sandy hit that it gave Obama “a chance to look presidential,” Harper will now get a chance to look Prime Ministerial. Even in that vest.

#44 DV01 on 06.23.13 at 8:54 pm

“The US recovery is secure. The financial crisis irrevocably over. The return to normal’s upon us.”

Stage 1 is Denial…by the time you reach number 5, Acceptance, it’ll be much too late. Good luck with your journey.

#45 Smoking Man's Old Man on 06.23.13 at 8:55 pm

18 Saint Herb

You just don’t get it, you’ll never win. Even if you get the house do you really think she’ll be content… After a few months this or that will need upgrading because that is how people’s minds work. She’ll never be content, things will never be enough… Sorry for the bad news

#46 peter on 06.23.13 at 8:56 pm

If the thought of gradual FED withdrawal causes such market upset, obviously this rally is liquidity driven. Bernanke and Janet Yellen will not withdraw any stimulus and I would bet they start adding more liquidity before they withdraw a dime. Japan is roasting the Yen, while the Eurocrats play a game of extend and pretend. Bernanke missed the housing bubble and Greenspan’s excessively low rates are now understood to have been the culprit. Central bankers haven’t got a clue.

#47 Tony on 06.23.13 at 9:05 pm

Re: #34 Keith in Calgary on 06.23.13 at 7:55 pm

Bernanke could care less about America. His only goal is to patch everything over until he’s out of office. At that point in time America will implode and achieve third world status. In the meantime should America put all the lies to rest we’d see the biggest bond market rally since the fall of 1982.

#48 DreamingInTechniColour on 06.23.13 at 9:22 pm

8-9% mortgage rates will happen as soon as depositers wake up and demand higher interest rates on the money they have deposited. Why they have subsidized people to buy houses by seeing their rates of return diminsh to almost zero is beyond me. In the mid 1970’s – they would have been making 10% on their deposits

#49 Alex K on 06.23.13 at 9:27 pm

#17 Willow dale,
Try checking MLS but Willowdale Ontario, lots of listings (houses) .
BTW, you’re right no houses for sale in Willowdale Mars

#50 Alex K on 06.23.13 at 9:37 pm

#21 Mikey the Realtor
Hey Mike obviously not much to do these days except blogging here, here’s one for you and a chance to earn some commission — Listing #N2655079 in Richmond Hill,Ont for sale since about April 2011 right after the present owner won the bidding war, I’m ready to buy this joint for $450,000 without Any conditions- go get him and let me know- just like you said this can be good for both of us> can’t wait

#51 Nemesis on 06.23.13 at 9:48 pm

@Ralph/#45

TooRight. You would have done RatherWellIndeed in the ‘DarkArts’. Had you been so inclined.

Next…

“Normal? What the hell is ‘normal’?” – Hon. GT

You have no idea how many MathsWeenies and their AlgorithmicFrankenstein CrayWunderKinds are trying to resolve that very question. Really.

On the BrighterSide… TheWeenies don’t always win, you know. Sometimes… TheOrdinaryG[r]eeks do.

I know that because, “A very wise OldTurk once told me so.”

http://youtu.be/uS5zp5Z46I8

#52 Russell Olausen on 06.23.13 at 9:54 pm

Mr. Turner, you are pure Toronto, the one guy allowed to rent but still be of Toronto. Say the Mayors job became available, would you buy so you could take a shot at a real job?

#53 JSS on 06.23.13 at 9:57 pm

“everyone with most of their net worth in a house is also at risk, particularly if they live in Winnipeg, Saskatoon or Edmonton”

How different is the real estate market between Edmonton and Calgary? Is it because Edmonton is a government university and manufacturing town, its real estate market is riskier and vulenrable to economic swings, than say Calgary which is a corporate mecca?

#54 Donald Trump on 06.23.13 at 10:13 pm

Ben Bernanke, could, in theory become Canada’s next BOC Governor, Minister of Finance, and/or Prime Minister ( if he goes to the proper counter at Canadian Tire and seeks asylum..political or otherwise)

#55 Post Haste on 06.23.13 at 10:27 pm

Well, I am sleeping well – we have our mortgage locked in at 3.09% and in 2 years this puppy will be paid in full(as I wrote yesterday and scolded by many). Geez, strangers freaking out on a guy they don’t know –

I have thought on selling – take the cash, park it into some investment vehicles Garth has mentioned but one nagging concern always comes up.

Our home is shelter – pure and simple – I didn’t buy to flip and paid little attention to what home prices have done, not naïve – just felt it wasn’t worth my concern. I wanted my kid close to schools, a neighbourhood that didn’t have gun fire going off each weekend and where I can take my kayak out and in the water less then 5 minutes from my home.

So the question – sell, then rent – and what if – okay – legions are gonna jump down my throat once again – but what if – a serious flaw lerks in the financial system, we all know how truthful governments and businesses are. What if my investment gets caught up in some major upheavel and I have this worthless piece of paper. Printed are many numbers but meaningless – or, a home that keeps me dry when it rains, warm when its cold – I don’t understand why some think our system is built on such a steady platform when the world seems to have lost it’s mind both financially and spiritually – just a simple guy making a simple statement – peace to all!!

#56 Alex K on 06.23.13 at 10:49 pm

#57 Post Haste
WOW! never seen so many ifs but often wondered myself what if my aunt had balls? I guess she would have been my uncle

#57 Min in Mission on 06.23.13 at 10:56 pm

Garth – and the house-rich, asset-poor wrinklies who ignored me and didn’t sell when the market peaked, especially in urban BC. Of course, everyone with most of their net worth in a house is also at risk,

Have you had the Amazons checking out my bank? Was that some of my info that got leaked by Snowden?

I am thankful that my place is mine, and, I bought it cheap enough that there is still a looong way to go before it gets down to the original price.

#58 Yitzhak Rabin on 06.23.13 at 11:14 pm

“The US recovery is secure.”

You are wrong about this just as much as you are right about Canadian real estate.

Higher assets prices in homes and stocks, on the back of zero percent interest rates do not mean an economy is healthy.

With rising rates, US home sales, values, and car sales will tank. Governments will be forced to borrow or tax even more. QE cannot be ended because QE is the economy. The “weath effect” is going in reverse.

Why hold REITs and bank shares when both their profits are poised to fall and financing costs are sky-rocketing?

You’re a voice of sanity on Canadian real estate, but sound like a CNBC bobble-head from 2007 when talking about the US.

Economic data will falter heavily for the rest of the year. The next move will be to greatly expand QE. Where has that gotten things the last 5 years. The same spot with mountains more in debt.

You have much to learn about macroeconomics. The US is just fine. Worry about yourself. — Garth

#59 Old timer on 06.23.13 at 11:31 pm

Just some insight to the USA housing market. I am currently a real estate consultant on a new $800,000,000 project in the USA. In Denver developers are stealing carpenters and electrician, plumbers etc and paying double right now.Not that this is happening everywhere but it is not uncommon.The industry is not booming yet but gaining lots of momentum.

#60 valleyrenter on 06.23.13 at 11:34 pm

Went to a 1yr olds b-day party today,real estate came up (of course it did!)…buddy of mine has a condo in Surrey,knows that now is not the time to sell…wants to buy a presale with his dad financing the down…others chimed in saying it’s a great idea (especially cause he might be able to get a unit overlooking some park that Dianne Watts wants to have concerts in/and be a shining jewel for the city)…didn’t even chime in,not worth it,probably same result as talking religion!Whalley, all the buzz…to quote Butthead ‘you can’t paint a turd’…home to where I came across a dead body one morning…bet they don’t hand that one out in the glossy flyers!

#61 Unknown Marketer on 06.23.13 at 11:38 pm

I am on the road tonight in south america and it is different here. It also gives me a different perspective of home. We Canadians are an interesting bunch I am pretty much in agreement with Garth and I actually think he may be a little conservative…I think we may be in for a bigger S..t storm than he portrays here. What I find the most interesting is that if you believe what Garth says..why are you NOT taking his advice.. I am out of my last piece of real estate and in a lot of cash and just renting..( a nice place ) but now can hug my dough. ( I will figure out what to do with it soon )…. but the average person in Vancouver has no way of wrapping their brain around that…they will hug that real estate all the way to the bottom. That to me is far more interesting trait of human nature and one I really wish to understand. We have few Canadians that have the balls to publish this type of blog…even with a busy life I hit refresh a few times a day…what will he say next..awesome

#62 FATHER on 06.23.13 at 11:50 pm

my cousin in the US just bought a property for 300 000 just 1 year ago, now it is worth 400 000 before the crash it was worth over 1 mill. His mortgage, taxes and so on are way cheaper than here and he says people are feeling a lot more confident so his small grocery store is starting to get busier so to sum it up I believe garth on his US outlook, but not on the Canadian one about just having a correction, I feel we will have a housing crash here

#63 JUNO on 06.23.13 at 11:57 pm

8 Apocalypse When? on 06.23.13 at 5:46 pm

When has the Fed ever walked the talk that comes out of all sides of its mouth? Interest rates may rise but QE is here to stay. It will stop one day but only when its ever diminishing effect becomes Zero and no banker or politician can spin the effects any longer – maybe another year or two to go yet!

Dreamer. — Garth
====================

Its not the Fed who decides, its the Market. You know supply and demand. EG

What happens when the US raise rates, lets say to 4% / 5%. Can canada still sell its bonds and GIC’s paying 1%. No freakin way, its either they match it or start to QE like heck. (If they QE, it devalues the Canuck Buck, its a catch 22 either way they are done!)

I know I would be dumping my canadian dollars to buy US. Then it will cause a run on the banks, because I’m sure you already know the bank may keep about 5% Cash on hand and hedge the rest. So where are they going to come up with the $$$ to pay everyone. Duh!! I repeat DUH!!!

The only reasonable solution to follow and match, Anyways I don’t think big gov or the Banks care about the average poor ass Debt Slave. Their business model is to suck the life line out of them not to nurture them and make them rich!

#64 Jon B on 06.24.13 at 12:00 am

This post suggest we are pulling out of an economic phase that saw a ton of cash being printed by governments in an effort to keep the world’s economies stable. One of the legacies of these actions will certainly be the huge contribution to the growing canyon between rich and poor. QE and other bond buying sprees have surely made a very very small number of people very very rich.

#65 VIVE LA FRANCE on 06.24.13 at 12:11 am

One more choice to look at.

Sell off overpriced assets, invest wisely, downsize your wants, move to Europe and live for a while. Rent for a year. See if you like it. If so, buy in. If not, go back.

Here is a small space that we renovated for less than the price of a Japanese Minivan. (Even though labor is “expensive” over here)

http://theceliachusband.blogspot.fr/2013/06/a-transformation.html

#66 Dean Mason on 06.24.13 at 12:55 am

The U.S. 30 year bond is 3.607% right now.The U.S. 10 year is 2.589% right now.We will see this week’s economic data on U.S. GDP,U.S. housing sales and U.S. sentiment.

#67 James on 06.24.13 at 12:59 am

#1 City that smells like it sounds on 06.23.13 at 5:27 pm

#37 Sask Girl on 06.23.13 at 8:22 pm

Same here, what about Regina Garth? The silence on it makes me think it really is different. I got hold on 3.69% 10 yr last week due to possible decision to buy. Rental vacancies at 1.6%, rents comparable to rents in Toronto for similar place. Could really use some guidance here. Why the avoidance of talking about Regina?

#68 Dean Mason on 06.24.13 at 1:08 am

#25 Mark

You will die an old man and still not see a 9.25% 5 year fixed mortgage rate.In 2000 when the U.S. had a 3.90% unemployment rate and the U.S. economy was red hot with 400,000 to 450,000 a month U.S. jobs reports,payrolls did not give us a 9.25% 5 year fixed rate mortgage.In Canada,we were at 8.00% to 8.25% and that lasted maybe 3 or 4 months tops.

The last time we saw a 9.25% 5 year fixed rate mortgage was 1996.A whole 17 years.They know how to control interest rates.

#69 B. Spring on 06.24.13 at 1:08 am

>>The US recovery is secure.

Not according to the real data. You need to spend less time watching MSM propaganda and more time looking at the charts.

#70 KommyKim on 06.24.13 at 1:10 am

RE: #57 Post Haste on 06.23.13 at 10:27 pm
So the question – sell, then rent – and what if – okay –

I don’t think Garth has ever said not to own real-estate. Rather that you shouldn’t have 100% of your money tied up in it. It sounds like you are doing OK and will have extra cash flow soon once your mortgage is paid off. Use that extra cash flow to build a bigger investment portfolio. Hopefully you have already started and can accelerate investing when the mortgage is done.

#71 Dean Mason on 06.24.13 at 1:15 am

GIC rates are not being raised as banks,lenders are delaying long enough to make sure these bond market yields rising are there for good and are not a short term jump.

If bond yields keep rising, a 2.85% to 3.25% 5 year GIC will be probably a good estimate by the end of 2013.You have to shop around for the best rates.Right now a 2.50% to 2.85% are the highest 5 year GIC rates available in the market.

I think that 5 year GIC rates will peak at 4.00% and drop again.When this happens and for how long I don’t know.

#72 Harry Wilson on 06.24.13 at 1:17 am

Thanks for the forum, Mr. Turner, and the advice, Expresso Bob.

The taxation rates aren’t really an issue for me, as I am terminally unemployed, and just trying to make my $100K last the seven-plus years until I hit Old Age Security. Every December, I take enough out of my RSP to bring my taxable income to just below the $10,800 level, which is where I would start paying income tax.

While I am looking for a little more yield, my main concern is protecting my principal; that’s why GICs are still an option for me. I believe I’ll make 65, but it would be nice to have a little extra to play with.

Until then, I’ll just bide my time here in my basement apartment in sunny Alberta. What can possibly go wrong? (Checks sky, for the 247th time today.)

Thanks again.

#73 Suede on 06.24.13 at 1:20 am

#57 Post Haste

No need to sell your shelter. Just take some of the tax deductible cash hidden in its walls and invest it. Problem solved.

#74 Dean Mason on 06.24.13 at 1:23 am

#50 Good luck with that.The 8% to 9% GIC is gone for good.You will lucky to get 3% to 4% and then they drop again.They are playing GIC investors,depositors on a wait and rape savings game.Why would the bank,lenders want to give you 10%,they can issue shares,bonds at 4% to 5%.

They know GIC investors are not smart enough to figure this out.Now I am seeing at least4,-5 articles the last 3 weeks about MIC’s.mortgage investment corporations that they are promising 9% to 14% annual returns for 18 month to 24 month term investments.They are getting desperate now with real estate and anything real estate related.

#75 OkanaganInvestor on 06.24.13 at 1:28 am

Dr Willie explains very clearly what is happening with US interest rates. He concludes with the following:

“It seems the USFed has been doing an experiment, to see if the financial markets can endure a USTBond rise in yields. The reversal would qualify as a return to normalcy, but only the first of 20 to 30 needed steps up in the bond yield. To match fundamentals, the USTBond at 10-year yield would have to rise to 7% or 8% or 9% at a minimum. The first line of defense is the Interest Rate Swap on the experimental response. The second line will be the unwind of the carry trade run under USFed sponsorship. Only touching the surface, we can conclude that the USFed is conducting an experiment. They are managing a Live Stress Test. It will go badly if continued. In no way can a return to normalcy be achieved, not even part way.”

http://www.gold-eagle.com/editorials_12/willie060413.html

#76 Mister Obvious on 06.24.13 at 2:09 am

#57 Post Haste

“What if my investment gets caught up in some major upheavel and I have this worthless piece of paper”\
———————–

I understand your concern. But it’s clear from your wording that you don’t comprehend the power of capital. You say “what if my investment” as if investment were just one thing. Actually, its a house that is just one thing. Investment, properly applied, is many things. Balanced and diversified.

Never doubt there are many upheavals to which your house may also be subject. In Vancouver we have thousands of leaky condos. The buyers stuck with them did not sign on for that but must pay huge assessments regardless.

Here we live in an earthquake zone. The “big one” is due any time between tomorrow and 300 years from now. Take a look at Calgary and the grief they are having.

Roofs and water tanks leak. Foundations crumble. The character of neighbourhoods can change. Taxes and insurance rise.

Again I make the point. You should consider a house as any other investment. I agree its somewhat different in that you actually get to live in it.

But it carries no special inherent security and is subject to the same vagaries as any other asset. Further, because of it’s illiquidity, it can become a pair of concrete overshoes if one wants to (or needs to) move on.

I personally know many who are finding that out right now. Their homes are bringing them stress. My investments (note the plural here, that’s very important) help me sleep soundly.

#77 Buy? Curious? on 06.24.13 at 2:56 am

Parrrrrr-teeeee!

Great post, Garth! Just got back from a buddy’s cottage near Orillia. Well, it’s not his but his Dad’s. We all had a good time, eating, drinking and, you know what else, playing cards. I did a bit of skinny dipping as well with the wives too (just in case polygamy laws change).

What made me wonder though is how are all my friends funding their lifestyles? They have places out in Scarborough that they purchased recently, work for Telco’s and drive beemers. If you were to line us all up, I’d look like the poorest (but in the best shape. Ladies?) Am I missing something?

#78 Onthesidelines on 06.24.13 at 4:40 am

“You have much to learn about macroeconomics. The US is just fine. Worry about yourself. — Garth”

Not very reassuring at all. You consitently respond to all arguments to the contrary with these type of vague declarations and putdowns.

Sure sounds like you’re running on sheer hope, delusion and denial, not unlike the realturd industry.

#79 nancy on 06.24.13 at 5:17 am

Since the Japanese Tsunami, RE sales in Richmond BC has slowed considerably. I wonder how this Calgary flooding will affect Richmond?

#80 Tony on 06.24.13 at 5:30 am

Re: #55 JSS on 06.23.13 at 9:57 pm

As inventories in Edmonton explode to the upside prices can only fall even with a 1.2 percent vacancy rate and increasing rent costs. The same can be said for Calgary where prices will fall but at a slower rate than Edmonton. Inventories are increasing but at a slower rate than Edmonton.

#81 Binder Dundat on 06.24.13 at 6:16 am

5 or 10 yr terms? I call this is fear mongering. Banks love 5 and 10 yr terms: pay more now for ‘security’

#82 Buy? Curious? on 06.24.13 at 6:18 am

Garth,

You’re a hero! I saw that someone made a movie about how you challenged the system, and won! And, of course, you get the girl.

http://www.youtube.com/watch?v=thexPleNdQ8

Help your friends in Calgary.

#83 Mr Buyer on 06.24.13 at 6:26 am

#63 Unknown Marketer on 06.23.13 at 11:38 pm
………………………………………………………………..
Actually saving any amount of money seems to be beyond the experience of most of my Canadian friends. The challenge of actually saving any amount of wealth coupled with the need to shelter and feed oneself are pretty much incompatible endeavors in the present inflated pricing schemes. By financing the inflation of house prices the banking system has pretty much guaranteed that they will be getting a sizable piece of the inflated cost of housing. Virtually everyone must finance their house now. Talk about developing a need and then filling that need. Somebody more adept than myself should estimate the percent of GDP currently paid in mortgage interest and then the amount paid out in other personal interest payments such as automobile purchases, tables, chairs, milk, laundry soap, underwear, winter jackets and the like. I suspect that it is a staggering sum. Now I need a place to live with little or no hope of saving money and such has been the case for my entire life, well I am going to be more than a little hesitant to sell. I will find myself at the mercy of a seller that will simply come up with any old number and expect me to get this princely sum from a more than willing banker. In the end I will be saddled with a monthly nut even more unbearable than I am presently saddled with. This coupled with the all too common I lost everything investing stories and the bank’s willingness to allow home owners to gain access to their home equity (at a price) seem to form a good deal of the inertia that prevents people from harvesting their equity from their homes in anything approaching an efficient manner. I am only guessing of course. On a more important note, it is my firm belief that vaccinations are a net good by far and I have been vaccinated multiple times along with all my children with no ill effect. There are multiple independent studies showing no correlation between the onset of Autism and getting vaccinations. My remedial understanding of science leads me to fully support getting myself and my children vaccinated.

#84 bigrider on 06.24.13 at 6:40 am

I see.

More talk on an imminent decline in housing prices while the decline in equity, bond and gold prices occur simultaneously. You have been correct Garth, deflation is the force to fear.

However, I would think it more relevant to focus on how poor the equity markets have been past 13 years and counting, indices no higher than where they were in year 2000, rather than how bad a housing price decline might get, a decline we still have not seen.

My point, we may get a decline in housing, we may not, but the alternative to which you promote daily, is as attractive to people as a bad bout of diarrhea , one that has lasted 13 years.

A 60/40 balanced portfolio have averaged 7% over the past nine years (including the GFC). I’m cool with that. — Garth

#85 willworkforpickles on 06.24.13 at 6:51 am

Raised taxes and US interest rates = no US recovery.

#86 Mark on 06.24.13 at 7:05 am

“They have places out in Scarborough that they purchased recently, work for Telco’s and drive beemers.”

Good lord, telcos? Bell, Telus, and Rogers? You have any idea how little they pay their employees in those organizations?

Yeah, its all credit. Most of their workers are lucky if they could drive GM, nevermind overhyped German vehicles.

#87 T.O. Bubble Boy on 06.24.13 at 7:35 am

@ #54 Russell Olausen on 06.23.13 at 9:54 pm
Mr. Turner, you are pure Toronto, the one guy allowed to rent but still be of Toronto. Say the Mayors job became available, would you buy so you could take a shot at a real job?
________________________

Wow – imagine that Rob Ford vs. Garth Turner debate… it would make me cry tears of joy.

#88 bigrider on 06.24.13 at 7:37 am

#86-Garth to Bigrider at #86- ” A 60/40 balanced portfolio has averaged 7% over the past nine years. I’m cool with that.”

I sure hope you’re ‘cool’ with the fact that the bond portion in your asset mix, will not do for your model portfolio in the next nine years, what it did for the past nine.

Ever heard of rebalancing? Obviously not. — Garth

#89 neo on 06.24.13 at 7:53 am

Garth,

First we have Japan’s stock market taking a dump. Now it’s China’s turn, down over 5% just last night and on its way to a 20% down bear market again like Japan. So we have the 2nd , 3rd and 4th largest economies in the world all in the crapper and we are suppose to believe the U.S. is an island onto itself and have a sustainable recovery. We’ve discussed China and Japan in the past. You were wrong about their Central Bank induced “recovery” and you will be wrong about the U.S. as well. Meanwhile the 10 year is well past 2.4%, It is now 2.65%. Go ahead, continue to purchase equities as that continues to climb and you will be wrong about that as well. It is about the rate of change Garth, even more than the absolute number. The world is collectively is going into cash. US cash and it isn’t because of the “strength of their recovery”.

If the global system was going to crash it would have happened four years ago. Get over it. Every cyclical, temporary or event-driven downturn is not the beginning of the end. You must be a riot to live with. — Garth

#90 Dazedandconfused on 06.24.13 at 8:07 am

What I don’t understand is mortgage rates have gone up to date interest rates for saving accounts went down. At least at my bank it did. What gives?

Mortgages are funded where rates are rising – the bond market. Savers will not see a move until the central bank raises its key rate next year. Classic squeeze. — Garth

#91 maxx on 06.24.13 at 8:10 am

#24 father on 06.23.13 at 7:16 pm

” garth I can’t figure how one can think 1 mil is peanuts. I have enough money to buy without any mortgage and will never pay that much for garbage”

Agree completely…..but you are like that because you actually have the cash in hand. It is more real and tangible than when you borrow it, or use credit cards or debt of any sort to acquire stuff (my favorite being “touchless payment”- talk about a way to separate people from the feeling of spending).

Having cash in hand, and having earned it brick by brick usually has the effect of making you protect it the way it should be- healthy response!

Don’t change- contrary to the opinion of those who don’t give a toss about your financial well-being, you are a pillar of the economy.

Prices will come down for savers. They always do.

#92 TurnerNation on 06.24.13 at 8:12 am

I guess stocks are “on sale” again today. Back up the truck…beep beep. If only it was that easy.
Bull market’s over, in the medium term, boys.

The S&P is down 4.6% and you’re throwing in the towel? Courage is in short supply on this pathetic blog. — Garth

#93 maxx on 06.24.13 at 8:22 am

#25 Mark on 06.23.13 at 7:19 pm

“Also, the economy most certainly would not collapse with high rates. Interest rates do not control the output of the economy. Only the distribution of wealth between savers and borrowers.”

Excellent post. One thing that has fascinated me over the past 5.5-6 years is that the creative forces of capitalism don’t seem to have been allowed to operate due to government largesse in propping banks up.
I have no doubt whatsoever, that, if mark to market and a “laissez-faire” attitude by governments had been espoused we would now be much, much further along the road to recovery than we currently are.

Never underestimate corporations’ creative abilities to survive any economic conditions. Shame that this does not seem to have been considered, rather than creating enormous debt and delaying both recovery and the inevitable. What a colossal waste of time and money.

#94 neo on 06.24.13 at 8:29 am

If the global system was going to crash it would have happened four years ago. Get over it. Every cyclical, temporary or event-driven downturn is not the beginning of the end. You must be a riot to live with. — Garth

Garth please. Is a free market system too much to ask for? You know full well stimulus prevented the crash from continuing 5 years ago and it’s removal now will just continue that trend since nothing has structurally been addressed. Nothing. You get over that.

Wrong. Stimulus is the crash cure. — Garth

#95 T.O. Bubble Boy on 06.24.13 at 8:39 am

Got USD? (up another 0.9 cents in pre-market)
http://data.cnbc.com/quotes/USDCAD

At this rate, Canada will again be a destination for call centres and manufacturing by August.

#96 Ralph Cramdown on 06.24.13 at 8:47 am

#80 Onthesidelines — “Not very reassuring at all. You consitently respond to all arguments [that the US isn’t recovering] with these type of vague declarations and putdowns.”

With that very same device you typed that comment on, you could’ve researched a staggeringly wide array of actual data to form your own opinion. Or you could have gone to other opinion sites which claim that the government is lying about all of their economic stats and everything is going to hell. Of course the US is in crummy shape — unemployment is at 7.5%, plus underemployment, involuntary part-timers and the discouraged who aren’t counted. The question is whether things are getting better, worse or stagnating.

http://www.crgraphs.com/

N.B.
‘[Jason] Kenney said the time for politics will come after helping with flood recovery efforts.

“We’ll have a chance to rally as a party, but right now we’re all focused — especially those of us here in Alberta — on helping our neighbours get through this really difficult time.”’

Saved by the flood.

#97 economictsunami on 06.24.13 at 8:49 am

With Bernanke’s message of possible future tightening, risk is simply being repriced into various asset classes.

He felt the need to jawbone and let some air out of his collection of manufactured, global wealth effect bubbles.

The fact still remains that The Fed continues to buy $85B/month of MBS and USTs; nothing has changed to date.

If this strategy were to go horribly wrong, better to hang it on the outgoing Chairman and not his predecessor…

#98 World Traveller on 06.24.13 at 9:06 am

ussell Olausen on 06.23.13 at 9:54 pm
Mr. Turner, you are pure Toronto, the one guy allowed to rent but still be of Toronto. Say the Mayors job became available, would you buy so you could take a shot at a real job?
________________________

Wow – imagine that Rob Ford vs. Garth Turner debate… it would make me cry tears of joy.

***

I’d rather see him debate Mr Nimby, Councillor Vaughan. Who never met a condo project he didn’t like.

#99 bigrider on 06.24.13 at 9:06 am

Garth to Bigrider at #90- ” ever heard of re-balancing, obviously not”

Yup, you are going to be re-balancing alright, right into an all out equity portfolio. Afterall, that is one of the goals of BB, to move us up the risk curve and as savers we have no option but to do so.

I wish all us investors the best of luck but it didn’t work for the Japanese either past 23 years or so.

It’s not Japan. Try not to be a woose. — Garth

#100 Smoking Man on 06.24.13 at 9:13 am

Garth, in your balanced portfolio is there a category for cash under mattress…

Cause bonds are selling off, equities selling off, commodities selling off. Natural gas going up.

Cash is an asset class. But don’t be spooked by current volatility. Equities will outperform. — Garth

#101 Ahead of the Curve on 06.24.13 at 9:14 am

Garth,

It all sounds good in the blog, but what if you renewed and locked in you mortgage for 5 years 2 years ago? Is it possible to get back to your lender and extend that period to 10 years, or is it better to break it and get a new mortgage all together? Thanks!

There is no simple one-size-fits-all answer. Depends entirely on the terms your lender is willing to ofer. But with rates rising, don’t expect charity. — Garth

#102 bigrider on 06.24.13 at 9:54 am

#101 Garth to bigrider- “It’s not Japan . Try not to be a woose”

Anyone who has the ‘cojones’ to ride a motorcycle in GTA traffic is hardly a ‘woose’ ( maybe a suicidal fool)
but not a ‘woose’

Perhaps you should take the time to explain how this is not Japan, despite all evidence in support of an ugly repeat, instead of quick, off the cuff remarks and ‘shots’ at your posters

Sheesh. You probably wear a helmet, too. — Garth

#103 Uwinsome on 06.24.13 at 10:14 am

“Honestly Garth. Would you be buying Canadian REIT’s right now?

You mean when they cost less? What a dumbass idea. — Garth”

REIT ETF’s have lost an additional 10% from when you made that call a couple of weeks ago. That would be 2 years of Dividends.

REITs are a great asset to have as one minor part of a balanced and diversified portfolio. They rise. They fall. They pay you to own them. Over time they have performed well and will continue to do so. If you want some, clearly this is a better day to buy than last May when prices peaked. I fail to see your point, unless you’re a hopped-up day trader. — Garth

#104 TheCatFoodLady on 06.24.13 at 10:16 am

Judging by stuff I’ve reading, watching & listening to, you’d think we were dead in the water. I had to stop reading the doomer websites this morning, (according to a few, the NWO, Bilderburgers, eeeeee-vil banksters, etc), were rubbing their hands in glee at the inevitable & quickly approaching demise of the average working schlepp. I stopped reading because it was depressing reading about people planning to, (those who hadn’t already), empty out their bank accounts, cash in their 401Ks, sell all equities they might hold & either buy shiny metal, lethal metal or open new accounts in the Bank of Mattress.

Most of these folks are old enough to know better so I can only conclude they’re doom addicts.

Yeah, I’m 42% in cash right this minute & that’s as a result of realizing I was badly unbalanced. So were our investments… LOL Not looking to buy in at the bottom of the bottom – I think market timing to that degree is a fool’s game – I’m not a trader. But if markets slide another day or two, it meand a better buy in.

[email protected] called me – my last GIC had matured & she had a few choices to offer me. Or a bond fund or three. Uuuhhh… no.

#105 neo on 06.24.13 at 10:19 am

Wrong. Stimulus is the crash cure. — Garth

Wrong. By definition a cure means you no longer require the medication. If you are never healthy without the treatment you are not treating the underlying condition. You are just masking it.

If the economy was cured then this global sell off we are in the middle of would be turned around by fundamentals in the economy improving. Instead I will tell you what will happen. This correction will continue until Central Banks turn the liquidity tap back on. That will occur sometime in the Fall where we will see the 10 year back to 1.5%. Again.

This is deflation at work. It hasn’t left us since 2008. The stimulus is only masking it. It isn’t curing it. Only delaying it and making it much worse than the original disease.

It is incredible that on the one hand you can have a blog about the harmful effects of stimulus as it relates to housing, however, you continue to have a blind spot as it impact elsewhere.

Not at all. The stimulus is ending. — Garth

#106 angela on 06.24.13 at 10:22 am

paging helicoptor Ben paging helicoptor Ben the big selloff has started in the 10yr usGBs looks like more printing to stave of this great deflation Garth is so concerned about is on its way but apparently deficits don’t matter nether does devaluation so everybody just keep buying the markets http://www.bloomberg.com/quote/USGG10YR:IND

#107 The American on 06.24.13 at 10:23 am

At #97: TO Bubble Boy, I enjoy reading your posts and normally I agree with what you say. Today, however, I have to say that by August there will be no return of manufacturing and call centers to Canada, at least from U.S. companies. Although the exchange rate is favorable to Canadians (the CAD be worth well less than the USD now), there are decidedly stronger forces and factors working on this side of the border that will dissuade US companies from returning. These factors include 1) Obamacare proving to cost companies now LESS than previously expected (significantly less) 2) cost of benefits in general is less expensive in the US 3) tax incentives to keep the jobs in the US 4) US companies are finding it easier to manage branches of their firms while they are close to home (despite the previous ‘savings’ they thought they were receiving, there is a cost to all decisions, and they found there was a cost to cross-border servicing and manufacturing), 5) Legislation in play that would further penalize US companies for shipping out US jobs to other nations to save a dime 6) The CANADIAN tax implications for US employers with operations in Canada are too heavy, even when the exchange rate seems favorable to Canada. 7) US companies returning operations to the US are receiving good incentives to do it and even better incentives to continue this behavior

#108 The Propeht Elijah on 06.24.13 at 10:26 am

#2 QE forever on 06.23.13 at 5:30 pm

No end to QE. No interest rate spikes. I say Mr. Bernanke will be at $120B a month by the fall.

If interest rates go up, the ability to roll over debt cheaply ends, and the financial system shudders. You know that, Garth.
———————————————————-
At the rate that everything is falling I’d say $150B/month by July 4th. Anyone need more proof the whole system is on QE life support?? Gold will reverse and soar, be ready my friends.

Unbelievable. — Garth

#109 Bigrider on 06.24.13 at 10:30 am

#104- Garth to Bigrider- “sheesh. You probably wear a helmet too.”

And you don’t. Now that would explain all . !!!!

#110 someone on 06.24.13 at 10:30 am

@ Unknown Marketer #63

Garth’s blog is a success because in this day and age, a little bit of truth goes a long way. Everywhere we turn, we are fed propaganda, spin, pablum news. It’s just refreshing to hear someone tell it like it is without cherry coating.

#111 The Propeht Elijah on 06.24.13 at 10:50 am

#46 DV01 on 06.23.13 at 8:54 pm

“The US recovery is secure. The financial crisis irrevocably over. The return to normal’s upon us.”
———————————————————
Sounds like those coming out of the roaring 20’s into the 30’s great depression.

Your bullion just called. It’s on life support. — Garth

#112 Mike on 06.24.13 at 10:54 am

#101 bigrider on 06.24.13 at 9:06 am
Garth to Bigrider at #90- ” ever heard of re-balancing, obviously not”

Yup, you are going to be re-balancing alright, right into an all out equity portfolio. Afterall, that is one of the goals of BB, to move us up the risk curve and as savers we have no option but to do so.

I wish all us investors the best of luck but it didn’t work for the Japanese either past 23 years or so.

It’s not Japan. Try not to be a woose. — Garth
———————————————————
If you actually read up on what happened in Japan, you will realize how different their situation was from ours. In some cases, properties were selling for thousands of dollars per square foot.

If you had been living in Japan 25 years ago, and been re balancing, you would have locked in tons of gains before your stocks plummeted. That is the beauty of re balancing – don’t get too greedy and take discretion out of the matter.

#113 angela on 06.24.13 at 11:00 am

The S&P is down 4.6% and you’re throwing in the towel? Courage is in short supply on this pathetic blog. — Garth

LOL Garth thats not a sale 50% off is a sale ,sell in may and go away i love my advisor cash is king now

#114 Macrath on 06.24.13 at 11:06 am

Garth, your faith in the Central Banker Goldman Sachs alumni is amusing. The record shows that they have caused more problems than they have cured. They have anticipated nothing and have caused misery for millions with their deregulation, ZIRP and austerity. You say their stimulus is the cure for the quagmire they created. Stimulus is just a fancy word for more debt . This is beneficial for a debt ridden global economy !

A long post with lots of Al Greenspan pictures is long overdue!

#115 AK on 06.24.13 at 11:06 am

#111 The Propeht Elijah on 06.24.13 at 10:26 am
“Gold will reverse and soar, be ready my friends.”

——————————————————————–
Gold is returning to Pre-QE levels. What was it? $400.00 ?

#116 Keith in Calgary on 06.24.13 at 11:10 am

“Metalhead ??”……..well, hmmmmm, let me see…….I did go to Deep Purple live in concert back in the 70’s…….heh.

I am simply diversifying and realocating my assets. Something you preach and something that everyone should consider, unless they are incredibly confident in their bets (like I was over the last decade with Brasilian bonds).

Of course having 1/3 of something in one particular bucket could be risky, but when I had 85% of everything in one, I wasn’t too worried becasue I was plugged in pretty tight, so what eh ?

Look at this way Garth, 2/3 of my net worth is still liquid, and the rest is as valuable as King Tut’s treasure…….because it is made of the same thing.

I don’t see any armed guards these days around piles of thousand year old fiat currency…..do you ?

Gold has lost 15% in a year and Barrick just punted a third of its head office staff. Stocks have lost 5%. Get some perspective. — Garth

#117 Keith in Calgary on 06.24.13 at 11:11 am

Forgot to add…….we have, in the last 20 years……seen worthless Argentian bonds, worthless Russian bonds, worthless Greek bonds, and soon to be worthless bonds and currencies from many, many, other countries.

#118 John on 06.24.13 at 11:15 am

Hello Garth,

Do you have any opinion on why Shibor has spiked? If Shibor continues higher will this not have worldwide implications? Chinese RE cannot defy a liquidity crunch. If China has a sudden bank run I suspect that could be a significant trigger for RE collapse in China and Canada.

#119 Uwinsome on 06.24.13 at 11:26 am

3 105 “REITs are a great asset to have as one minor part of a balanced and diversified portfolio. They rise. They fall. They pay you to own them. Over time they have performed well and will continue to do so. If you want some, clearly this is a better day to buy than last May when prices peaked. I fail to see your point, unless you’re a hopped-up day trader. — Garth”

I agree with most of what you have said. But, when I asked you that question (whether or not you would by REIT’s today), it was based on the widely held view that REIT’s were going down. Mainly because rising rates would affect them.

Whether or not rates will affect them is not the point as you know. The market sentiment around REIT’s, Bonds and Preferred is negative in this climate. I might be inclined to wait a while – only my opinion.

#120 KG on 06.24.13 at 11:29 am

#22:

A sales drop does not mean home-buying ceases. — Garth

What does the % in chart represent ? Home buying or growth in home buying ?

#121 Canada's House bubble set to CRASH HARD! on 06.24.13 at 11:33 am

tic toc tic toc tic toc KABOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOM

http://www.thestar.com/business/personal_finance/investing/2013/06/23/low_interest_rate_party_may_be_ending.html

#122 The Prophet Elijah on 06.24.13 at 11:44 am

#120 Keith in Calgary on 06.24.13 at 11:11 am

Forgot to add…….we have, in the last 20 years……seen worthless Argentian bonds, worthless Russian bonds, worthless Greek bonds, and soon to be worthless bonds and currencies from many, many, other countries.
———————————————————
The US has 5 trillion + in US Treasury bonds held by foreigners coming home to roost as we speak, I’m not even sure Ben’s increased buy back program will be able to handle the volume. They will lose all control.

You are out of control, posting every five minutes. Go for a walk. — Garth

#123 Old Man on 06.24.13 at 11:49 am

I see we have another great market today and time to buy some more XRE. Not a bad portfolio and support is there; a slow meltdown, but no panic. I will throw in a bid and let it float to be hit.

#124 The Prophet Elijah on 06.24.13 at 11:57 am

The US has 5 trillion + in US Treasury bonds held by foreigners coming home to roost as we speak, I’m not even sure Ben’s increased buy back program will be able to handle the volume. They will lose all control.

You are out of control, posting every five minutes. Go for a walk. — Garth
———————————————————
Sorry Garth but I got the day off work cause downtown Calgary is flooded.

“2 weeks” Gartho “2 weeks” – something to think about ;)

Ok time for a walk.

#125 Mike on 06.24.13 at 11:57 am

#94
Wrong. Stimulus is the crash cure. — Garth
…………….
The Bank of International Settlements, basically the banker to the world’s Central Banks disagrees with that view based on their just released annual report.
http://www.bis.org/speeches/sp130623.pdf

It’s worthwhile reading the whole report but here’s the part I found most interesting:

“Central banks have borrowed the time that the private and public sectors need for adjustment, but they cannot substitute for it. Moreover, such borrowing has costs. As the stimulus is sustained, it magnifies the challenges of normalising monetary policy; it increases financial stability risks; and it worsens the misallocation of capital.

Finally, prolonging the period of very low interest rates further exposes open economies to spillovers that are now widely recognized. The challenges are particularly severe for the emerging market economies and smaller advanced economies where credit and property prices have been rapidly growing. The risks from such a domestic credit boom at a late stage of the economic cycle are hard enough to manage. Strong capital inflows exacerbate such risks and challenges for market participants and authorities; and they expose economies to large sudden reversals if markets expect an exit from unconventional policies, as volatility during the past few weeks seems to indicate. In short, the balance of costs and benefits entailed by continued monetary easing has been deteriorating. Borrowed time should be used to restore the foundations of solid long-term growth. This includes ending the dependence on debt; improving economic flexibility to strengthen productivity growth; completing regulatory reform; and recognizing the limits of what central banks can and should do.”

#126 Old Man on 06.24.13 at 12:02 pm

The press would have you believe that the TSX is in a sharp decline, but is only down about 1.70% on the index which is heavily weighted in loser sectors. Now, discount the losers sectors and you know what they are I hope. Like magic this is no crash for investment quality stuff.

#127 happity on 06.24.13 at 12:07 pm

That US Economic Renaissance continues to taper, S&P 500 down 2% again today…

#128 Penny Henny on 06.24.13 at 12:17 pm

it’s “wuss” not “woose”.
Woose is a female moose.

Penny Henny

Tha’s how they spell it in Vaughan. — Garth

#129 angela on 06.24.13 at 12:19 pm

#122 The Prophet Elijah on 06.24.13 at 11:44 am

The US has 5 trillion + in US Treasury bonds held by foreigners coming home to roost as we speak, I’m not even sure Ben’s increased buy back program will be able to handle the volume. They will lose all control.

You are out of control, posting every five minutes. Go for a walk. — Garth

why is he out of control perfectly good statement where do you think japan got some of its stimulus from ? by selling some treasuries and since cash is king again expect more countries to do the same selling us bonds and it will pick up speed

#130 Bigrider on 06.24.13 at 12:32 pm

It never ceases to amaze me that since the start of the secular bear market 13 years or so ago ,how much deeper and faster equity market corrections occur, as opposed to how high and the speed of there advances .

Secular bear market? You mean the one where stocks have advbnced 140% in four years? — Garth

#131 dv8 on 06.24.13 at 12:34 pm

If the Fed were to reduce its purchases of this debt paper, nobody else would buy it. The reason the Fed buys the quantity it does in the first place ($85 billion-a-month) is that nobody else would touch it at the offered zero interest rates. The US Treasury and the mortgage bundlers could only sell the stuff if they paid higher interest rates. But the US government would choke to death on higher interest rates because its aggregate debt is so huge and the scheduled interest payments so gigantic that a one percent increase would destroy even the fantasy of economic equilibrium.

#132 not 1st on 06.24.13 at 12:43 pm

Gold has lost 15% in a year and Barrick just punted a third of its head office staff. Stocks have lost 5%. Get some perspective. — Garth

=====

Have you considered what the price of gold would be had the FED been buying it to the tune of 85 billion a month for the past 3 years. Compare apples to apples before you trash any asset class.

That was hilarious. — Garth

#133 Basil Fawlty on 06.24.13 at 12:56 pm

“Wrong. Stimulus is the crash cure. — Garth”

More like the crash band-aid!

#134 JSS on 06.24.13 at 1:04 pm

“Gold has lost 15% in a year and Barrick just punted a third of its head office staff. Stocks have lost 5%. Get some perspective. — Garth”

I’ve lost 8.7% so far. I’m mostly in Canadian equities – banks, telcom, pipelines, and lots of REITs. Some exposure to US stocks, but not enough.

I wish I had more money today to buy some stocks. I’d be piling in on days like today.

#135 Old Man on 06.24.13 at 1:07 pm

I love this market as made a phone call to see if I hooped some preferred stock on the opening as went out for breakfast. Yep, as got a fill for a yield just a bit over 5%, and want more, as love those dividend tax credits when a company has a Q1 report with great figures. Who says this is a bad market? Or as the saying goes – is the glass half full or empty, and feel sorry for those gold bugs. Lets face reality as Canada is a resource based country and those sectors are toast, but fear not as Caesar knows all with his delusions of grandeur about pipelines, and blowing money on war planes, building ships, and telling the world his vision. This is Reform, and Canadians need to wake up about all this corruption, and with the next election send him a message with a vote.

#136 luke8929 on 06.24.13 at 1:17 pm

Canadian Bond Rates

2 years-1.28% one month ago : 1.03%
5 years-1.89% pme month ago : 1.375%
10 years-2.53% pme a month ago : 1.95%… May 1 : 1.68%
30 years-2.95% pme a month ago : 2.56%

And for those of you who renewed at the new rates, you still have to hold a job and your property taxes and tax rates are going up to pay for folks like Ms Lynda Cranston ex CEO of BC Health Authority, $438,630 including salary, incentives and benefits.

Remember there is no rule of law, the banks don’t play by the same rules you do, they will call your loan and offer you a nice 8-9% one instead, don’t take it and you can leave. Bank deposits, oh well we are taking anything over $100,000 Cdn, don’t like it, well to bad. Garth says it won’t happen, well lots of stuff used to be tin until now, good luck.

#137 T.O. Bubble Boy on 06.24.13 at 1:20 pm

@ #107 The American on 06.24.13 at 10:23 am
________________

Yep – that was meant to be somewhat tongue-in-cheek.

A meaningful move to Canadian-based manufacturing/services would need a lot more than just the dollar falling.

#138 Canadian Watchdog on 06.24.13 at 1:20 pm

A few words from Mish.

Day Traders Take Control of Japanese Stock Market Using 300% Leverage; What Can Possibly Go Wrong?

And some advice from newbie swing traders for all you buy and hold fundamental traders.

Swing Trading With Only $1,500 In Your Account

Help central banks hit their target. Enroll your kids now.

Is This 16-Year-Old Stock Picker the Next Buffett?

10 Year Old Stock Trader interviews with Option Trading Guru's!!

8 year old stock trader

What can possibly go wrong in the new normal?

#139 Uwinsome on 06.24.13 at 1:22 pm

Bill Gross and Jeff Gundlach don’t think interest rates are going to rise much further at all and then they will fall again. They also don’t see QE stopping anytime soon. According to them Bernanke is all talk.

http://www.cnbc.com/id/100838070

Bill Gross = market manipulation. — Garth

#140 Holy Crap Where's The Tylenol on 06.24.13 at 1:24 pm

#95 T.O. Bubble Boy on 06.24.13 at 8:39 am
Got USD? (up another 0.9 cents in pre-market)
http://data.cnbc.com/quotes/USDCAD
At this rate, Canada will again be a destination for call centres and manufacturing by August.

I don’t think so the Canadian vs US dollar has nothing to do with bringing business here. What will bring business is decent tax incentives and a healthy competitive workforce. We can compete globally but we have to stop relying on this false low dollar in order to do it. I sell my product to the world and manufacture here in Oakville.

#141 Holy Crap Where's The Tylenol on 06.24.13 at 1:25 pm

Very interesting website for condo lovers!

http://www.thestar.com/business/real_estate/2013/06/21/get_the_dirt_on_toronto_condos_using_new_review_site.html

#142 Holy Crap Where's The Tylenol on 06.24.13 at 1:31 pm

Did someone say Gold earlier? oops sorry Metalheads.

http://www.thestar.com/business/personal_finance/2013/06/24/barrick_gold_slashes_100_corporate_jobs_mostly_in_toronto.html

https://www.youtube.com/watch?v=sr0gNJ090JA

#143 No Longer Innocent Needs Advice on 06.24.13 at 1:33 pm

Any one using Questrade? What do you think?

We are on the verge of funding our account with them and I’ve hit a big fear blocker – can’t quite bring myself to give my money to a non-bank… but I cannot afford the maintenance and trading fees for my banks direct investing accounts even though we aren’t planning to do many trades each year.

What are your thoughts on the Canadian Discount Brokerages?

#144 Bigrider on 06.24.13 at 1:34 pm

Garth to Bigrider at #130- ” Secular bear market ?.You mean the one where stocks have advanced 140% in four years”

No, I am talking about the one where stocks have gone nowhere in 13 years, as evidenced by the indices.

You really should where your helmet when you ride, not just the cowboy boots.

If you buy and hold an index for 14 years even a helmet won’t save you. — Garth

#145 D.D. Corkum on 06.24.13 at 1:39 pm

It is going to be really interesting to see what this does to the auto loan industry. Will we continue to see offers for 84 months with ‘zero’ interest? I suspect a return to ‘normal’ may be unfortunate for car salesmen.

#146 mike2 on 06.24.13 at 1:43 pm

@140

“I don’t think so the Canadian vs US dollar has nothing to do with bringing business here….”

The whole film industry in Toronto and a minor tech boom was DIRECTLY the result of the 60 cent dollar. Once the industry appeared, it had staying power, but the “peso North” caused Canada to become a “strategic outsourcing” destination.

#147 David Jensen on 06.24.13 at 1:46 pm

Ok Garth, I’ll give you something to shoot at:

Turns out that when I renew my mortage in a few years, I will no longer have the 2.25% I have now. I will be forced up to…looks like 2.5% today, 2.6% from some lenders. While that change might make an impressive difference on the value of a 30 year bond, it doesn’t do much to my monthly cashflow.

Wait for the Bank of Canada to DROP the tightening bias sometime in their next few statements.

All that’s happening in this little market panic is the balance swinging back to a more normal situation where homeowners are once again better off going Variable.

#148 Ralph Cramdown on 06.24.13 at 1:59 pm

#125 Mike — “The Bank of International Settlements, basically the banker to the world’s Central Banks disagrees […]”

There’s a little bit of a difference between central banks and the BIS. Central banks are usually responsible for monetary policy in addition to their end-of-day netting and settling function for member banks, so they have staffs of economists, econometricians, statisticians, publicans etc. The BIS only has one job — tote up all the intercountry transfers, net them, and debit/credit member banks’ accounts as necessary. Who the hell cares what the accounts payable clerk thinks about corporate finance?

#149 gladiator on 06.24.13 at 2:09 pm

Garth, sorry for the offtopic: I’d like to share a link here to a source you don’t like (Zerohedge), but it’s about a matter that is important to all of us: we can be spied on via our phones – exactly what I wrote sometime ago when I said “welcome to 1984, folks”. Too bad I was right…

http://www.zerohedge.com/contributed/2013-06-24/single-most-important-step-protect-yourself-government-spying

#150 TurnerNation on 06.24.13 at 2:16 pm

Garth I don’t mean to be panicking the other blog dogs but technically speaking I forsee this routing into Q4.
Grout until then.

#151 Onthesidelines on 06.24.13 at 2:22 pm

#96Ralph Cramdown on 06.24.13 at 8:47 am

#80 Onthesidelines — “Not very reassuring at all. You consitently respond to all arguments [that the US isn’t recovering] with these type of vague declarations and putdowns.”

” With that very same device you typed that comment on, you could’ve researched a staggeringly wide array of actual data to form your own opinion.”

What makes you think I haven’t? This place is pure entertainment, and nothing much more.

#152 John Prine on 06.24.13 at 2:24 pm

#145 D.D. Corkum on 06.24.13 at 1:39 pm
It is going to be really interesting to see what this does to the auto loan industry. Will we continue to see offers for 84 months with ‘zero’ interest? I suspect a return to ‘normal’ may be unfortunate for car salesmen.

+++++++++++++++++++++++++++++++++++++
These loans have been artificially boosting sales figures for automakers and a lot of people that have purchased new cars couldn’t under normal circumstances, expect to see a drop in sales.

#153 Bigrider on 06.24.13 at 2:27 pm

#144 Garth to Bigrider- ” If you buy and hold an index for 14 years ,even a helmet won’t save you”.

I’ll make sure to tell that to Jack Bogle over at Vanguard.

After all, at his age , he must have fallen off his bike and on his head one to many times.

#154 T.O. Bubble Boy on 06.24.13 at 2:29 pm

@ #138 Canadian Watchdog on 06.24.13 at 1:20 pm
A few words from Mish.
____________________

You seem to have missed the most important Mish post of the past few weeks:

Mish Buys a Basket of Miners
http://globaleconomicanalysis.blogspot.ca/2013/06/mish-buys-basket-of-miners.html

These stocks/etfs are down about 15%-20% in the 2 weeks since he announced the purchases… more if they happen to have been bought in the first week of June.

#155 Rational Optimist on 06.24.13 at 2:30 pm

149 gladiator on 06.24.13 at 2:09 pm

God, that site is brutal. I have nothing against individuals standing up for their right to privacy, but these people are nut cases.

A few comments down from that article was this tip: “Put your cellphone in a tinfoil bag or signal-blocking case, when not in use.” Someone actually said that!

#156 Kent on 06.24.13 at 2:32 pm

As I reported here on the weekend, my neighbor, the real estate agent, contacted my landlord and told him he had a buyer for the house we’re renting. Came today with the potential buyer, even tried to make friendly with me, just turned my back and walked away. Two backstabbers.

We moved here (small town just outside of Windsor) five years ago partly because they were so keen to get a GP. She committed to working here five years then decide if we’d stay…the answer to that is now no. Where would people recommend as a good, quiet town/city in Ontario? We’ll try to rent again, but this time, we’re getting an iron clad contract.

#157 Old Man on 06.24.13 at 2:36 pm

#52 Russell – in order to qualify for Mayor of Toronto one just has to be a resident with a few other easy things, and a few hundred bucks to register in early 2014 as a candidate. Now there have been a few that has suggested this all, and Mr. Turner has not said a word, but he might be thinking about this all as a great gig to ponder.

I know all that have thrown up a flag of interest to test the waters from the far left and the right. One person from the Annex for example as worked with his daddy on elections; a great man. This will become a new game in politics, as the left and right will split the vote on end runs like a football game. The next Mayor of Toronto will run the ball down the middle with a touchdown for a new game plan with the public.

The people of Toronto are fed up with nonsense, and want a candidate who will run on a simple platform with integrity, knowledge, and put the facts on the table as what needs to be done to move forward, and they will listen with their vote, as want something very different from the past.

#158 FATHER on 06.24.13 at 2:37 pm

# 91 (maxx)
thanks for the support , putting it that way I think It makes sense. I sometimes wonder how people take debt like going for walks. when I started my biz I started small so I wouldn’t have to get help from bank’s and I didn’t. People taking on debt makes me wonder????

#159 Canadian Watchdog on 06.24.13 at 2:50 pm

Not sure to what make of these markets? Here is Oppenheimer Funds latest release to clients.

#160 Ronaldo on 06.24.13 at 2:51 pm

#48 DreamingInTechnicolour

”In the mid 1970′s – they would have been making 10% on their deposits”

Yes, but remember we had runaway inflation about that time and an average house in Vancouver as an example would have been 1/20th of what they are today. And that’s for those tear downs.

#161 RATES UP TONIGHT on 06.24.13 at 2:52 pm

Breaking news….Mortgage Rates up another 20bps tomorrow. …..

As I told you. — Garth

#162 Spiltbongwater on 06.24.13 at 3:01 pm

#157 Old Man on 06.24.13 at 2:36 pm

If Garth Turner becomes Your Worship Garth Turner mayor of Toronto, I really don’t see him inviting Grapes to the swearing in ceremony. Would make for a pretty boring swearing in without Grapes there again.

#163 Canadian Watchdog on 06.24.13 at 3:07 pm

#154 T.O. Bubble Boy

These stocks/etfs are down about 15%-20% in the 2 weeks since he announced the purchases.

He probably sees the same thing I see: you're fearful and banks are buying. Play the players, not the price.

#164 Smoking Man on 06.24.13 at 3:12 pm

149 gladiator on 06.24.13 at 2:09 pm

Have an essay on the whole topic coming up.

Who they spy on, why they spy on them, what they really afraid off and the common denominator and interest it serves, and the same cast of characters in Congress and Senate who’s primary interest is not the American public.

Lindsay Graham, Dianne Fienstien, John McCain..

Who there masters are…….

…………..

Then again I like my nexus pass, hum? , better keep my mouth shut…..

#165 Ronaldo on 06.24.13 at 3:15 pm

#65 Vive La France – from someone who has done many renos, you did a great job. Good for you.

#166 Donald Trump on 06.24.13 at 3:26 pm

Mayor of Toronto?

Pfffttttttt.

Easy…..just try to be a slightly different clown from the other bozos and make promises you either can’t keep or will bankrupt the city.

Badabing badaboom(is not a terrorist)

#167 Old Man on 06.24.13 at 3:46 pm

#162 Spiltbongwater – the entire female population from the sororities at UofT, past and present would come out with more than grapes to give Mr. Turner a warn welcome, as he was well known on campus if he became the next Mayor of Toronto.

#168 Bill Gable on 06.24.13 at 3:47 pm

Mr. Turner – some telling numbers.

“Goldman Sachs became the latest bank to downgrade China’s economic growth on Monday, saying tighter financial conditions and reforms are downside risks for the world’s second largest economy.

The bank cut China’s gross domestic product (GDP) growth forecast for the second quarter to 7.5 percent on the year from 7.8 percent previously. It also revised full-year growth estimates to 7.4 percent for 2013 and 7.7 percent for 2014, from 7.8 percent and 8.4 percent, respectively. The official growth target for the year is 7.5 percent.”

Link: http://tinyurl.com/krgbcrf

8% is the magic growth number to keep the Chinese shell game going. It is slowing, quickly.

I wonder what the impact is going to be?

Noticing fewer freighters in English Bay – *Not counting coal barges, because of the coal port accident…hmmmmm.

#169 Donald Trump on 06.24.13 at 3:49 pm

#165 Ronaldo on 06.24.13 at 3:15 pm

#65 Vive La France – from someone who has done many renos, you did a great job. Good for you.

==================================

Yes….nice job …..but lets hear some numbers.
Labour and Materials = $ ______ (?)

Also: Know an older fellow (Canadian) whose wife is Portugese. They still have a home in Portugal they go to once a year.

However , any minor renovation requires a permit…to the point the Local Gov’t will enter homes and look for any renovations done without permits.

#170 Old Man on 06.24.13 at 4:18 pm

This is the best trading day in months, as there was no crash, and was on my speaker phone to buy and sell with a discount gal. She said you are now out of cash to buy X, so will margin the buy. I said no lets do a cross, and sell Y at the market for a huge capital gain which I did not want, and she said done, so buy the other for a cross on closing. I said what is my net cash on hand after the smoke clears; she said about roughly $20,000. I said am broke and need $2,000 to clear at midnight into my bank account, and said will margin that as it will be there tomorrow. Well what can I say as will have some cash tomorrow to pay my bills, as need to buy some groceries, as am always broke.

#171 Mikey the Realtor on 06.24.13 at 4:19 pm

Just back from my tennis game and I thought I’ll drop in for a good laugh, of course I’m never disappointed as the basement dwellers always have something comical to say.

Alex, I would suggest that you keep living with your mommy and daddy while dreaming of big things, dreams do come true at times. Also, if you need a room mate then take in my pal mikey the retard, he needs a place and love.

#172 Piccaso on 06.24.13 at 4:34 pm

Interest rates are historically low and the Fed has effectively created a bond market bubble over the last couple years. The Fed has been a drug dealer and debtors are the addicts. “Ultimately if you want to get clean, if you want to be healthy, if you want to wean yourself from this addiction of low interest rates, that have been kept artificially low by Bernanke, there’s gonna be some pain involved… Ultimately, it’s going to be a very positive thing for capital markets.”

#173 Smoking Man on 06.24.13 at 4:36 pm

#166 Shawn on 06.24.13 at 3:15 pm

No such thing is investing , it’s actually gambling, it’s all gambling, low risk gambling may be brand as investing to take fear away but it’s still gambling.

#174 jess on 06.24.13 at 5:09 pm

babblemaster

one voice speaks about pulling the number out of his “arse.”

Irish bankers ‘hoodwinked’ government over bailout, secret recordings showTaped conversations back up the view that Anglo Irish bankers knew that €7bn would never be enough to save the bank
Henry McDonald, Ireland correspondent
http://www.guardian.co.uk/profile/henrymcdonald

=======
poster graphics
or how about posters that covered the empty shop windows when the g8 came a calling!

Locals annoyed that derelict shop facelift for G8 hides their economic woes
A reported £300,000 has been used on pre-G8 cosmetic work for Fermanagh that locals believe could have been better spent on reviving a real local employer
http://businessetc.thejournal.ie/northern-ireland-g8-false-fronts-947963-Jun2013/

#175 tkid on 06.24.13 at 6:22 pm

I’m with Penny Henny, only wusses spell wuss as woose.

What’s the plural? Woosi?

#176 TurnerNation on 06.24.13 at 6:32 pm

Garth I’m seeing this rout into Q4.
Grout until then.

#177 steve p on 06.24.13 at 6:55 pm

as mr t says i pity the fool

#178 steve p on 06.24.13 at 7:23 pm

if house prices correct 33% the savings over 25 years is you would have to make close to one million dollars less in salary, just remember that folks

#179 Alex K on 06.24.13 at 7:31 pm

#172 Mikey the Realtor
Mikey you’re beyond stupid and I understand that because you’re a realtor (obviously NOT a salesman)
I’m not going to get into any details but if you were here last year you would have known that I sold in 2011 for 1.6 mil. I did make a suggestion to you before and I’ll repeat it again> go collect empty bottles and come to South Richvale where you will find plenty. What about that listing listing you looser? tell us about it

#180 Canadian Watchdog on 06.24.13 at 7:37 pm

#175 jess

Bankers looting government audio clips: Irish bankers 'hoodwinked' government over bailout, secret recordings show

By the looks of Canada's big six uninsured and MBS mortgage holdings over the last six months, I'd say our banks are very close to Akerlof and Romer-ing Canadian taypayers. 

#181 Calgary's OK on 06.24.13 at 7:41 pm

” #80 Tony on 06.24.13 at 5:30 am

As inventories in Edmonton explode to the upside prices can only fall even with a 1.2 percent vacancy rate and increasing rent costs. The same can be said for Calgary where prices will fall but at a slower rate than Edmonton. Inventories are increasing but at a slower rate than Edmonton.”

Inventories in Calgary exploding? Now, with 10 to 15 % of houses for sell and rent been taken out of active market for the next six months after the flood and with continuing influx of people into the city, how is that going to work out? On top of that, most likely City will review it’s development plans (hopefully) and stop allowing developments in the flood plains. Unlikely this is going to contribute into any kind of falling prices.

You guys been singing this song for years already, “just wait for a six months, prices will be half of what they are now”. Prices in Calgary are already lower then in most places. It’s time to get a grip of reality Tony.

#182 Penny dreadful on 06.24.13 at 8:11 pm

Garth! Have any of the metal heads asked you about soros buying calls on gdx? Do you think it’s a good idea against a falling treasury market?

#183 Alex K on 06.24.13 at 8:11 pm

Garth!
what happened to my other reply to Mikey the Realtor about the dream? Common it wasn’t that bad

Not that kind of blog, dude. — Garth

#184 broadway skytrain on 06.24.13 at 8:13 pm

It’s pansies like you we go to the islands to get away from:)
Do you leave home without a bubblewrap suit or mommys hand and a crash helmet?
pussy.
guess thats why i have acres of wfront closer to dt vancouver than most commuters drive home, wimps like you would be afraid to slip on a rock. Garbage pick up is done from the dock by the district.
Further, ocean boating vs lake seems to effectively weed out the skids and yahoos. no break ins on our island is 25 yrs.

——————————–
163 maxx on 06.22.13 at 8:46 pm
True. Cottages on islands!
Fire trucks might have a wee bit of a problem getting there- police, ditto. Response time? See what the insurance companies have to say about it.
Repairs? Stuff to dump? Lovely to schlep materials back and forth in the boat repeatedly.
What if a break in happens when you’re there? Yelling “help!” might be a waste of breath. Where do you run to?

#185 MikeytheRealtard on 06.24.13 at 8:21 pm

Mikey the realtard…playing tennis again? Makes sense when you have zero clients and it’s gonna stay that way after tomorrow’s rate hike. Must be fun paying those desk fees, treb and orea fees while getting zero commission cheques lol… You sure you can afford tennis balls right now? Lolololol! You’re probably as bad a player as Milosh in that Seinfeld episode! Hahaha!

#186 jess on 06.24.13 at 8:23 pm

Roisin Burke – 23 June 2013
http://www.independent.ie/business/irish/taxpayers-lose-millions-in-enterprise-ireland-failures-29365530.html

A state-of-the-art hub of innovation to hothouse start-ups and create tech clusters was the intention

…is for sale for circa €4m by receivers – a fraction of the €35m Exchequer-backed cost to build it”

#187 Alex K on 06.24.13 at 8:31 pm

#184 Alex
Okay got it but do you at least agree with me?

#188 Daisy Mae on 06.24.13 at 9:04 pm

#110 Someone: “Garth’s blog is a success because in this day and age, a little bit of truth goes a long way. Everywhere we turn, we are fed propaganda, spin, pablum news. It’s just refreshing to hear someone tell it like it is without cherry coating.”

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

Ain’t that the truth? We can depend on Garth, we can trust him. And I’m so grateful for this blog. There’s a lot of debate happening, but that’s alright. Discussion is good. How else will we learn? If we’re wrong, Garth will set us straight! :-)

I have a few favorites — THE AMERICAN, DEVORE, and a few others. I appreciate your input!

#189 JimH on 06.24.13 at 9:09 pm

#183 Penny dreadful
“Garth! Have any of the metal heads asked you about soros buying calls on gdx? Do you think it’s a good idea against a falling treasury market?”
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(As you directed your question directly to Garth, please feel free to ignore this)

There is something of a correlation between gold, junior gold miners, and Treasuries, but IMO, it is a rather tenuous and weak one. The time period 2/5/2010 through 7/26/2012 is a case in point; there are other examples over shorter time frames.

Yes, Soros holds some GDX, GDXJ stock and some call options, and he increased his holdings in Q1 and again recently. The metalhead blogsters are having a field day with this, while failing to note that Soros’ GDX and GDXJ exposure amounts to something above 2.7% of his entire US long portfolio. At the same time, Soros has decreased his GLD exposure by a further 10%. (He’s not exactly betting the farm on this one, is he, even though GDX and GDXJ are fantastically, phenomenally and very temptingly oversold!)

Soros is a master at profiting from quick market reversals (as are all successful hedge fund managers). I think he’d be the first to tell you that this is an outside gamble at best. In other words, I think he’d advise you to not play this one with any cash that you can’t afford to lose!

Good luck!