What could go wrong?

Fcandy

Let’s get this out of the way first. Sure the US government shut down, but it’s thanks to 40 whackjob Tea Party radicals who hate too much. So, there’ll eventually be a compromise. Stock markets won’t crash over this shutdown, nor the debate over increasing the US debt ceiling. It’ll all get fixed. No defaults. No crisis. But even maybe an opportunity.

On average, US stock markets have gained a serious 11% in the twelve months following each previous politically-inspired government shutdown – and it’s happened 12 times since 1976. Without fail, indexes were higher two years later.

Want more reassurance? Gold. The metalheads had been wringing their little hands in anticipation of this week. After all, the Tea Partiers are almost all God-guns-&-gold nuts, believing that rocks you dig up and imbue with value are ‘real money’ while the paper you actually buy useful stuff with, like assault rifles, is fiat trash.

Gold tanked below $1,300 an ounce on news India has stopped buying gobs of the stuff. It recovered, then wilted again. The losses this year have been remarkable – well over 20%. If anyone seriously thought the follies in Washington might lead to a default on American debt, bullion would pop. But nobody credible does. And neither should you.

If you want to worry about an economy, I’ve got a good one for you.

The Bank of Canada this week slashed its forecast for growth for the next three months by about 40%, trashing the last forecast made just sixty days ago. The bank’s vexed that while consumers continue to borrow their buns off and spend copiously, business investment and exports badly lag. A major gap is developing between the house horny and those who move large amounts of capital in support of corporations. While the bank wants business and exports to be growing together at about 4%, they’ve actually added ziltch.

The condo economy

So what we’re got is a condo economy. That was reaffirmed this week by the latest GDP numbers showing construction gains leading the pack. It’s now estimated about 25% of the entire economy is directly related to real estate – selling, building and financing houses. It far outstrips either the manufacturing or oil and gas sectors.

Cheap money is at the heart of it, as you know. And the BoC is now in a classic Catch-22. If it doesn’t raise rates and keeps money cheap, the borrowing binge will continue and house prices further bubblify – leading to a painful correction. But raising rates now ain’t an option, since a higher prime would douse the whole economy.

But look at this: a new Nanos Research poll asked people a few days ago about house prices – now at record high levels – in their neighbourhoods. Just under 40% said they expected them to increase. This delusion has helped push Canadian consumer confidence to a two-year high, rekindle house sales (September saw a big rebound in Vancouver, for example, from dismal year-ago levels) and also make retailers’ cash registers vibrate.

All of this comes under the media category of ‘good news.’ It makes people do insane things. I spent part of Tuesday night talking to a 50ish couple recently emigrated from Europe who have iffy jobs, and a grand total of $130,000. The wife has just succumbed to the Canadian dream, and made an offer on a $700,000 house in the nether reaches of the GTA. Poof. No more savings. No retirement fund. And a $600,000 debt on a property seized at the worst moment. The greater fools live. They surround us. Consumption’s an addiction. And for all its demurring protests, the central bank is the ethicless pusher.

Daily, realtors and those indelibly invested in real estate come to this miserable blog to poke and jab and look for flaws in me or my arguments. There are many. I admit it. Predicting when lemmings in suicide vests will relent is an imprecise art. Five years ago few would have forecast that bug hotels in Toronto’s west end, or semis just blocks from the Van’s East Hastings druggies would be luring first-timers for seven figures.

But that’s the world we’re in. What a powerful argument to be balanced, diversified, liquid, and heavily uninvested in Canada.

184 comments ↓

#1 Locko on 10.02.13 at 8:41 pm

First in the list

#2 Mark on 10.02.13 at 8:45 pm

do you think interest rates will fall or rise in the coming months?

Neither. — Garth

#3 condopoor on 10.02.13 at 8:47 pm

Predicting when lemmings in suicide vests will relent is an imprecise art.

Exactly. What you provide, Garth, is a realistic viewpoint in an unrealistic world. Those who mock you for predictions of timing should be ashamed.

The rest of us need you.

#4 Jf on 10.02.13 at 8:47 pm

FIIIIIIRRRRSSSSTTTT !!!

#5 shanks on 10.02.13 at 8:49 pm

wut? fist!

#6 Franco on 10.02.13 at 8:50 pm

Seems all the empty land in downtown Toronto has all been built up and now you have to go east or west where the dumps are, but not for long. I thought the sane thing five years ago, it sure seems so long ago now. Sometimes it seems that madness is just about to stop and then it again picks up steam. Where are all these people coming from to buy all this real estate? This has to be the longest upswing in RE in my life.

#7 tkid on 10.02.13 at 8:51 pm

Garth, how do 40 senators in a House with 435 seats shut down 800,000 government jobs? The math doesn’t add up.

Oh, not furst!

#8 ZED on 10.02.13 at 8:52 pm

Does that mean that more that 50% of my portfolio should be invested in the U.S.? Or just anywhere but Canada and the canadian $?

#9 Mark on 10.02.13 at 8:53 pm

Garth,

Hope all is well.

Do you advise prospective home buyers to lock into fixed or variables mortgage at this point?

Done, and done. — Garth

#10 AK on 10.02.13 at 8:53 pm

#1 Jf on 10.02.13 at 8:47 pm
“FIIIIIIRRRRSSSSTTTT !!!”

.#2 shanks on 10.02.13 at 8:49 pm
“wut? fist!”
====================================

2 SELOH$$A

#11 murrdawg on 10.02.13 at 8:54 pm

It’s like gold in India is just like Halloween.
They have got no more Ghandi.

#12 Drill Baby Drill on 10.02.13 at 8:54 pm

I truly fear for our delusional 40ish and 50ish house horny spendthrifts here in Calgary. They are spending record amounts for housing which is in high demand due to the influx of immigration. The majority of the net migration to Alberta is from Ontario. This is putting the squeeze on rental housing as well. Even though oil prices are in the low 100’s the Alta crude differential is $30+ per barrel. There will be blood and all it will take is an interest rate spike or oil price drop. Remember the oil differential it is indicative of what the producers in western Canada are really getting. I work in engineering and the producers are demanding that we workshare with 2nd and 3rd world engineering offices in order to bring the blended engineering rates down. Other than Melbourne Australia, Calgary is the highest cost centre for engineering in the world. But hey it is different here.

#13 P-Gizzle on 10.02.13 at 8:56 pm

“Golden Week” this week…. supposed to be super busy in real estate. If it’s slow, may accelerate real estate’s downward course.

#14 minor fool on 10.02.13 at 8:56 pm

You stand no chance against a whopping 25% real estate portion of the economy.
Trying g to win this is like trying to beat a well advanced cancer in a terminal patient.

#15 Sherwood Park on 10.02.13 at 8:57 pm

“Slashed its forecast for growth for the next three months by about 40%”

Yes your math is correct (in a Toronto Sun lets hit them with a big number that will sell more papers sort of way) but it’s sensationalist. It’s like saying the temperature dropped 50% in one hour when in fact all it did was drop from 2 degrees to 1. Really not a big deal now is it.

Leave the funny numbers for CREA!

Seems you do not grasp the magnitude of the revision. — Garth

#16 rockstar on 10.02.13 at 8:57 pm

Oh Vancouver…you pricey crazy minx

#17 CrowdedElevatorfartz on 10.02.13 at 8:59 pm

I think I’m going to fly to Cowtown and buy a Rolex.
Not only are they a multi-generational asset.
A new way to diversify my “mattress money”.
They’re works of art!

Haiku over.

Epic fail.

:(

#18 AK on 10.02.13 at 8:59 pm

“On average, US stock markets have gained a serious 11% in the twelve months following each previous politically-inspired government shutdown – and it’s happened 12 times since 1976. Without fail, indexes were higher two years later.

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

Correct. Wall Street doesn’t Care About Government Shutdown.

#19 Silver on 10.02.13 at 8:59 pm

Hey Garth… heres one of the sales in Mission

Couple just bought the property across the street in Mission…
moved from a nice rental in Anmore Village… I actually know the house.

They told me they were looking for a sound investment and were tired of throwing their money away on rent.

$600,000+ grand later… here they are….
asked if they liked it…
said was a little pricey but a good deal.
I say pushing resources by that phrasing…

house build was started in 1942.

I paid $270,000 a 9 months ago across the street……………..

wish them well……………
Silver

#20 Cleric on 10.02.13 at 9:00 pm

WHEN WILL GOD LAY THE SMACK DOWN ON CANADIANS AND BANISH THEM TO ETERNAL HELL FIRE GARTH?

#21 Smoking Man on 10.02.13 at 9:04 pm

“Bond King” Bill Gross, the widely-regarded manager of one of the world’s largest investment funds, called for interest rates to remain lower for “decades to come” in his monthly economic commentary on Wednesday.
……………………………………………………………………..

I bet there are a few sneaky buggers on Bay Street that hang on every word I say. And bet big…..:)

My call for Rates to stay low forever has gone main stream now . The great Bill Gross is now following me.

1 2 3 years ago when peddling that call, It made me look insane.

I’m still insane but as always right.

Canadian Benchmark Bonds.

You all remember when I said BATMAN on bonds yields a few weeks ago.

Here you go……

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Never bet against a smoking man.

#22 Drill Baby Drill on 10.02.13 at 9:10 pm

Alberta taxpayers need a rebate check from all of the other provinces for taking in all of their past, existing and future welfare recipients and general dole hanger-oners. Alberta has been doing this since the mid-70’s. I say we prorate it, lets start with Ontario at $4 Billion, NFLD at $3 Billion and send that NFLD check directly to Ft Mac so that they can build a new hospital etc.

#23 AK on 10.02.13 at 9:12 pm

“On average, US stock markets have gained a serious 11% in the twelve months following each previous politically-inspired government shutdown – and it’s happened 12 times since 1976. Without fail, indexes were higher two years later.”

====================================
Wall Street doesn’t Care About Government Shutdown

#24 Babblemaster on 10.02.13 at 9:12 pm

Garth, you used to say, “Of course, interest rates will rise.” Well, you now intimate that a rate rise is an unlikely scenario for a long time. Lot’s of folks believe that for a very long time. As such, you have to admit there will be no great downward pressure on Canadian RE.

I said rates are unlikely to move soon. And most RE is cooked regardless. — Garth

#25 1977 Francisco Franco Crime Annesty on 10.02.13 at 9:15 pm

Just look to Spain for a microcosm of politics and economics gone awry. And you know nobody wants to remember the past. Just bury it, it doesn’t officially exist. In Valencia a wall where 2,300 were shot lies forgotten, riddled with fascistic bullet holes. In Toronto it would be a heritage site safe from condos..

#26 Drill Baby Drill on 10.02.13 at 9:17 pm

Alberta taxpayers need a rebate check from all of the other provinces for taking in all of their past, existing and future welfare recipients and general dole hanger-oners. Alberta has been doing this since the mid-70′s. I say we prorate it, lets start with Ontario at $4 Billion, NFLD at $3 Billion and send that NFLD check directly to Ft Mac so that they can build a new hospital etc.

#27 pinstripe on 10.02.13 at 9:19 pm

Garth, the autumn weather and high humidity took a lot of shine off your crystal ball.

I posted many times on this blog that interest rates will stay LOW for a long time.

All levels of govt are holding too much debt. They have NO choice on this matter.

Real estate will continue the upward trend. This time next year, add 5% increase.

Anyone renting is losing money.

The US economy is bordering on yet another recession.

Mortgage rates increased 1% this year, and there is no US recession in sight. Don’t give up your day job. — Garth

#28 HAWK on 10.02.13 at 9:19 pm

One day when the shit hits the fan I cannot help wonder whether the government will cut interest rates to zero to save Real Estate or alternatively do a “Cyprus” on the rest of us…….the too big to fail justified nonsense.

This then begs the question, will those of us that struggle to live within our means, defacto become the “greater fools”?

#29 Bob Rice on 10.02.13 at 9:22 pm

Sure, many will continue to be lured into the housing market, but one caveat exists that may very well prick this balloon; if the Canadian economy does continue to perform poorly, shouldn’t we expect layoffs? It could be the poor economy combined with high indebtedness that could finally do this RE bubble in..

#30 dosouth on 10.02.13 at 9:23 pm

Looking for a great deal on homes. Everything north of Victoria is on sale.

VIREB stats released today. Sales up by 57% in Nanaimo but Average YOY prices down %5. Cowichan which is closer to Victoria even higher.

Patience will bring more value for your dollar!

VIREB September 2013 sales stats

But of course Vancouver is so much more different – I believe you predicted this report yesterday Garth? (I could be wrong…)

Home sales in Vancouver up 64 per cent from a year ago

#31 HotInHere on 10.02.13 at 9:24 pm

Garth,
you are wrong:
if the US defaults, bullion would not pop, it would tank.

#32 2CentsCdn on 10.02.13 at 9:25 pm

There is no making sense of Canada’s current RE craziness. Such a bizarre mix of inter-tangled factors (villains and victims) creating self spawning ridiculousness. One thing is for sure ….. it is WAY out of wack based on income to debt to price ratio’s (from any time in any country … ever!). And the argument “it must be ok because it hasn’t collapsed yet” is just the last few puffs of vapor of hope. Anyone who thinks this won’t all gravitate back to reality without wide felt hardship is dreaming in technicolor.

#33 Max Jones on 10.02.13 at 9:26 pm

The money was flowing on the West side of Vancouver in September. MLS statistics show that 147 detached properties changed hands at a median price of $2,194,000. And 71 detached properties in West Vancouver with a median price of $2,195,000.

Don’t expect that the CMHC was involved in any of those sales.

#34 TooBigToTaper on 10.02.13 at 9:39 pm

Garth…simple question: Will Fed taper in 2013? If no, in 2014 do you think that QE will be less than or greater than $85 B a month? You seem to gloss over the facts by saying US is fine…but the fact remains that when you are only producing 170 K jobs a month with the vast majority being minimum wage service industry ones, the Fed can’t allow interest rates to rise because the cost of servicing their massive debt would overwhelm their anemic 2% GDP growth.

Tapering will occur, but US rates are stuck until 2015. — Garth

#35 James on 10.02.13 at 9:40 pm

Hi Garth. Long-term reader. I guess I’m more pessimistic than most regarding the soft landing as the same emotions which drive prices irrationally up will take them irrationally down. i.e. a 10% correction isn’t possible as people will panic making it more like 30%+. Anyway now to my question: I know the government has already eliminated CMHC insurance on homes north of $1M, and since you’ve pointed out why raising interest rates isn’t a viable solution for the government at the moment, why doesn’t the govt eliminate CMHC insurance for all purchases? Wouldn’t that force the banks to be more responsible in their lending as they’d now be on the hook for the full loan? They’d probably raise interest rates on mortgages while the BoC wouldn’t have to. Where is the hole in this line of thinking? What am I missing?
Thanks, James

#36 Deb on 10.02.13 at 9:42 pm

For the last couple of days, Harry Truman has come to mind, when he said, “If you want a friend in Washington, get a dog.”

#37 Editor on 10.02.13 at 9:46 pm

#31. it is WAY out of w[h]ack based on income to debt to price ratios (from any time in any country … ever!).

Say it, brother or sister. Amen.

It’s turned pathological.

#38 Catalyst on 10.02.13 at 9:52 pm

You’ve almost come full circle garth – Acknowledging how large a percentage of CDN GDP RE makes up. Once you make the next step , realizing that they will do ANYTHING to keep this party going, you realize there is no RE correction coming.

In reflection where modern economies (1920+) went wrong was with this whole idea that GDP must go up every year or make drastic monetary policy changes to reinflate it. Why shouldn’t bread & milk & gas be the same (or cheaper with all our modern day efficiencies) as when my grandparents purchased these staples. Will a loaf of bread be $20 in a decade?

The whole reason an inflation target is set is so that governments can devalue your dollars and the debt they owe. When they ran up the first 100million in debt they knew there was no hope to pay it back so they run it up to 16 trillion. In 20 years it could be 50 trillion. This monopoly money game must end for the economy to make any sense anymore.

#39 Post Haste on 10.02.13 at 9:53 pm

Mr.Turner, your comment about the tea party members, all 40 of them being whackjobs, really. So in our democratic society, does one not have the right to challenge those who’s policy may bring short term gain but long term pain. I applaud the tea party in trying to put the brakes on Obama’s blatant spending spree. Funny how in our society, you can call one group a whackjob and its “socially acceptable”- call another group the same name and you are an outright terrorist, anarchist or racist.

So if it means little to nothing about the debt ceiling limit, why even have it – lets just print like there is no tomorrow, hell – print you’re way out of this mess – appears Mr.Turner believes its the right thing to do –

Judge them by their actions. — Garth

#40 Jasmin Pilon on 10.02.13 at 9:59 pm

Hey Garth,

Why settle for being just a few blocks from East Van. druggies when you can pay half a mil. for a downtown MTL condo that shares a floor – of better yet a terrace – with units leased by pimps and prostitutes!

http://www.lapresse.ca/actualites/dossiers/montreal-capitale-du-sexe/201310/02/01-4695580-les-lieux-du-vice.php

Marc in (thankfully not downtown) Montréal

#41 ILoveCharts on 10.02.13 at 10:04 pm

Re

#15 Sherwood Park on 10.02.13 at 8:57 pm
It’s like saying the temperature dropped 50% in one hour when in fact all it did was drop from 2 degrees to 1. Really not a big deal now is it.

Nope you are wrong.

First, your example is completely invalid. A drop from 2 degrees to 1 degrees should never be stated in percentage unless the units are kelvin. (And if the units were in kelvin, a drop from 2 to 1 would be a big deal.)

Second, anyone who understands numbers has the ability to properly interpret them and this is the number that carries the most information and the most important information. The only way to convey the same information would be to provide two numbers and then ask the reader to do the math.

#42 Harry Wilson on 10.02.13 at 10:08 pm

Mr. Turner, you mentioned above (comment #2) that you didn’t see interest rates doing much in the coming months. This may be a magic eight-ball question, but do now you see any substantial bump, say 1 percent, sometime in 2014?

I’m not thinking so much about mortgage rates, but about G-I-YouKnowWhats. (Don’t make me say it; I hate myself enough already.)

Thanks, and sorry for pushing the issue.

GICs are dead money. Get over them. Returns will not even pace inflation. — Garth

#43 KommyKim on 10.02.13 at 10:12 pm

RE: #21 Drill Baby Drill on 10.02.13 at 9:10 pm
Alberta taxpayers need a rebate check from all of the other provinces for taking in all of their past, existing and future welfare recipients…

Wasn’t it Ralph Klein who gave free bus tickets to Alberta welfare recipients so that they could move to BC?
Your post is so typical of right (wrong)-wingers spreading misinformation.

#44 45north on 10.02.13 at 10:13 pm

The wife has just made an offer on a $700,000 house in the nether reaches of the GTA. Poof. No more savings. No retirement fund. And a $600,000 debt on a property seized at the worst moment.

an offer it’s just an offer, she was off her meds, held captive without food for 72 hours before she signed besides which she cannot complete the sale because she has just been elected to the European Parliament which specifically prohibits all real estates transactions with 90 days of appointment.

#45 H on 10.02.13 at 10:13 pm

Garth

I like you when you talk about anything else but I hate you when you say that S&P is up 8% etc etc. That is B$, with all this respect!

When most of the economies around the world are in trouble where does this 8% increase come from?
I am ignoring the yo-yo that has been going on for the last two years (at least) on the stock markets, let’s say it stays up there are 8% …is this credible? Please clarify the source of these gains…

Obviously not your portfolio. — Garth

#46 Mister Obvious on 10.02.13 at 10:14 pm

#6 Franco

“This has to be the longest upswing in RE in my life.”
—————————-

When was the last time in your life the BOC interest rate was at 1% (or lower) for almost 5 years running?

Never happened. Not even close. We are breaking brand new ground. Might as well put up a condo tower while we’re at it.

Fascinating times ahead.

#47 Party On Garth on 10.02.13 at 10:18 pm

You are quick to call people racist or hateful or other names. It’s a pathetic political tactic and not flattering.

Be better Garth.

#48 Retired WI Boomer on 10.02.13 at 10:24 pm

“god-guns-and gold nuts…”

Garth, that about sums-up the “tea-party” mentality.
Where did the Nelson Rockefeller Republicans of the mid 70’s go? We have had wild spending, and inadequate taxation for YEARS! How do you think we amassed that 16 T debt bomb?

I am disappointed that QE wasn’t placed on a taper diet until it was gone. Even 5% reduction would have been seen as a “serious” effort. If interest rates went up 50 to 100 basis points who -other than bond holders- would even notice?

As for speculating on tomorrow, who knows? You may have a crystal ball that works, but mine is broken.

With no debt, investments, and a government pension is that secure? As stated previously who knows?

We could find serious politicians who want to run the country, or idiots who are lining a doggy bag for parts unknown. Who knows.

All I can control is me, and even that gets difficult at times

#49 not 1st on 10.02.13 at 10:26 pm

The US govt had to take a 60 billion dollar loan from AIG to survive for a few weeks. Yeah, what could go wrong?

Its amazing for what passes as a robust economy these days.

No such loan. — Garth

#50 X on 10.02.13 at 10:26 pm

F needs to limit more financial idiots from taking on any more real estate debt. At least then people will continue to borrow their brains out to buy ‘stuff’ that will help other aspects of the economy.

#51 KommyKim on 10.02.13 at 10:29 pm

RE: #34 James on 10.02.13 at 9:40 pm Wouldn’t that force the banks to be more responsible in their lending as they’d now be on the hook for the full loan? They’d probably raise interest rates on mortgages while the BoC wouldn’t have to. Where is the hole in this line of thinking? What am I missing?

Here’s one of the reasons:
http://www.parl.gc.ca/parlInfo/Pages/PartyContributionBank.aspx
It would be interesting to see the figures for 2004-2013.

#52 Canadian Watchdog on 10.02.13 at 10:30 pm

Here comes the left wing Treasury showing Republicans two can play financial weapons of mass destruction game. You shutdown our gov't and debt limit? We'll crash the stock market.

U.S. Treasury Says Money Managers May Pose ‘Herding’ Threat

The Treasury Department said money managers could pose threats to the U.S. financial system when reaching for higher returns, herding into popular asset classes or amplifying price movements with leverage.

Somebody has to flinch first, or not.

#53 45north on 10.02.13 at 10:34 pm

James: I know the government has already eliminated CMHC insurance on homes north of $1M

the change to eliminate CMHC insurance on houses over $1 million was a politically shrewd maneuver basically cutting the NDP off at the knees – for whom was Brian Mulcair going to plead the buyers or the sellers? Eliminating CMHC completely would be the end of the Conservatives. It’s the third rail of politics once you step on it you’re done.

#54 James Bond in Goldfinger on 10.02.13 at 10:41 pm

Garth keeps preaching how Canadian RE is bad because of all the debt. But then turns the other way and defends the US saying debt ceiling rises and a mega 17 trillion national debt is no big deal. All the while printing 85 billion a month. Sheesh. You’d think a shill would make a more convincing argument on his stance.
Garth’s in bed with Obama.

When you learn how sovereign debt differs from personal debt, come back. — Garth

#55 broadway skytrain on 10.02.13 at 10:49 pm

condos, condos, condos , as far as the eye can see!
—————————–
Concord Pacific unveils massive new Vancouver development near BC Place

Read more: http://www.vancouversun.com/Concord+Pacific+unveils+massive+Vancouver+development+near+Place/8989658/story.html#ixzz2gci5j2yD

#56 Retired WI Boomer on 10.02.13 at 10:55 pm

Garth-

Seems the blog dogs are restless tonight, eh?

It’s everybody else’s fault. US debt, foreigners, overseas money running up RE prices. Sheesh.. even you are being pelted. What’s in your water??

#57 MEANWHILE IN EUROPA on 10.02.13 at 11:28 pm

Maybe it’s time to take a time out. Tell your boss you need a break. Go see a different part of the world and see how they get by. How they live without constantly worrying about the sky falling.

You’ll feel better about your life back in Canada. Second best place in the world.
Rent a place like this for less than a dinner for two at Earls and recharge your batteries.

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

#58 bah on 10.02.13 at 11:30 pm

…but how high can a debt ceiling go before it tumbles?

#59 Questions on 10.02.13 at 11:51 pm

This is a bit of an aside, but related. I dream of manufacturing in Canada, let’s call it patriotism. Sure.

If someone in the world looks on the back and sees “mad in Canada”, will their initial confusion turn to confidence or just stay confused?

Sad, eh?

#60 Questions on 10.02.13 at 11:52 pm

*made not mad

#61 Hollywood on 10.02.13 at 11:55 pm

The puzzling part of high real estate in major markets in Canada is people still need to make monthly payments. The house could be 400-700k but people need to finance for those prices. The average wage in Canada would leave very little disposable income unless huge down payment and empty out their savings. It was not long ago where you could buy a house for one third the price i.e. 140k 2000(Edmonton) vs. 400k at present. I don’t think wages tripled on average in that time frame. Houses should be 250k in relative terms and last I checked there is more land/water available in rural areas in Canada to house more people than the United States. Interesting world we live in Canada – must be wearing rose color glasses.

#62 espressobob on 10.03.13 at 12:02 am

When all those ‘We buy your gold’ locations go belly up, reality sets in!

#63 naysayer on 10.03.13 at 12:07 am

Garth, are you always so arrogant that you can’t allow a BLOG critic to go unanswered? This must really be tempting you to respond.

Try a little humility. Nobody likes a egotistic prick.

I don’t remember making you come here. — Garth

#64 TheRealTruth on 10.03.13 at 12:09 am

Some of you may remember me from years ago posting here but got deleted to oblivion for my views. The views were:

1) USA Rates wouldn’t go up at all before Dec., 2014. That is when all the ARM’s reset. So ALL people can lock in low mortgage rates for the next 15/30 years.

2) Canada will not raise rates before the USA. Canada will let its currency devalue when the USA starts raising and not follow.

3) Concentrated Immigration Growth in Cities in Canada is creating tremendous demand for detached houses in Toronto and Vancouver. Add to this TFW and Foreign students mostly concentrated in the cities.

Hope I’m not deleted into oblivion…

All economists agree the Fed will move in 2015. Mortgage rates here rose 1% in the last five months. And there’s been no increase in immigration. So much for the real truth. — Garth

#65 what bubble? on 10.03.13 at 12:11 am

When you learn how sovereign debt differs from personal debt, come back. — Garth

… but government debt and personal debt have one thing in common: they need low interest rates to reduce debt service cost

#66 Alberta Guy on 10.03.13 at 12:14 am

Come on F, grow a set and start tapering canuck style. Increase the down payment requirements and reduce maximum amortization periods pronto and repeatedly until we tame this beast!

#67 Sask Girl on 10.03.13 at 12:20 am

Hi Garth,

I know you’re not a fan of GIC’s, but I’m wondering what you think of the market growth GIC’s TD offers.

https://www.tdcanadatrust.com/GICs/GICTable.jsp

#68 Yitzhak Rabin on 10.03.13 at 12:26 am

There will be no tapering of the FED bond buying program, but rather an increase. The Fed balance sheet is getting scary, soon they will not be able to sell as the mark to market losses would wipe out their entire capital. One excuse after another will come. This is QE Infinity territory.

Gold, Silver, base metals and oil and gas are where the money will be made. US stocks are crazy over-valued and interest rate sensitive stocks have peaked.

China is accumulating massive reserves of gold at these low prices to both diversify their swollen US dollar reserves and partially back the yuan with gold.

What killed gold in 1980 was 21% interest rates, those will not be coming back.

Money printing, deficit spending, trade deficits and a sick, cheap money casino driven US economy will support gold.

Deutsche Bank just raised their target on Barrick Gold from $18 to $30. I wonder if they are “credible” when they forecast lower prices but “not credible” when forecasting higher ones.

#69 Tony on 10.03.13 at 12:33 am

Re: #2 Mark on 10.02.13 at 8:45 pm

You’ll find out this Friday in America when the bottom falls out of interest rates and the U.S. dollar. Like i said when Bernanke is out of office it’ll be revealed America is basically in recession.

#70 Oceanside on 10.03.13 at 1:15 am

3 P-Gizzle on 10.02.13 at 8:56 pm
“Golden Week” this week…. supposed to be super busy in real estate. If it’s slow, may accelerate real estate’s downward course.
++++++++++++++++++++++++++++++++++++
What the hell is “Golden week” I know realtors have not heard of this, out west at least….

#71 D-Dawg on 10.03.13 at 1:25 am

#40 ILoveCharts
First, your example is completely invalid. A drop from 2 degrees to 1 degrees should never be stated in percentage unless the units are kelvin. (And if the units were in kelvin, a drop from 2 to 1 would be a big deal.)

What are you talking about?

A change of one degree kelvin is the same as a change of one degree Celsius. It is the same magnitude of change regardless of the units involved.

It is completely valid to state a change such as this regardless of whether it is on an absolute scale or a relative one.

…and why would a change from 2 to 1 Kelvin (clearly) be a big deal where as the same change recorded in Celsius not be.

The entire rebuttal to #15 is nonsense. No shortage of experts on tonight’s post.

#72 Nomad on 10.03.13 at 1:28 am

Office conversation today ” We just got a house in Vancouver for under a million, it’s a steal!”

Fleeced is right ….

#73 Carpe Diem on 10.03.13 at 1:45 am

#7 tkid

Here is a nice article about the subject
http://www.baltimoresun.com/news/opinion/oped/bs-ed-schaller-government-shutdown-20131001,0,682998.column

#74 Bailing in BC on 10.03.13 at 1:45 am

I keep a spread sheet of RE data from Squamish BC. There seems to be some jiggery pokey going on in the inventory numbers. The total number of listings on the MLS has always differed slightly from the sum of all the individual categories (SFH, TH, condos etc) but now it has completely detached with a difference of 21 listings. I have no explanation for this. I can’t see a motive for wanting listings to seem higher than they are, so it’s a mystery to me. Perhaps someone else can come up with a plausible explanation?

http://vancouverpeak.com/showthread.php?tid=479&pid=5716#pid5716

#75 Mister Obvious on 10.03.13 at 1:45 am

#37 Catalyst

“Why shouldn’t bread & milk & gas be the same (or cheaper with all our modern day efficiencies) as when my grandparents purchased these staples. Will a loaf of bread be $20 in a decade?”
—————————–

I used to think that way. Why couldn’t stuff just cost the same forever?

Because human nature being what it is, there must be a good reason to spend capital sooner rather than later. It was discovered long ago that a constantly devaluating currency (i.e. an inflationary scenario) is good for an economy. It certainly greases the wheels of capitalism. If you want take the cynical view: it gets greed working for the economy rather than against it.

If the purchasing power of a currency increased over time (i.e. a deflationary scenario) people would wait to make capital expenditures. How long? The theoretical end game is prices of zero and a halted economy. It accounts for why governments are terrified of deflation.

On the other hand, with inflation there is in theory no end game. Things just rise in price forever. That just fine if the inflation rate is controlled. After all, you can’t have the price of a cauliflower jumping by 200% overnight. Then you’re in Zimbabwe.

If you can keep inflation constant and controlled you can predict where thing are going. Two percent seems like a good target. At an average of 2% inflation per annum the cost of everything doubles in 34 years. That’s something we can live with. After all we’re not going to run out of numbers.

The only valve available to ‘control’ inflation/deflation is interested rates. That’s about it. Right now that valve seems to be cranked all the way open and its just barely enough to keep the economy on track. That’s what you should be worrying about.

You fear bread may cost $20 a loaf in 10 years. Yes, that would be excessive. It would mean 20% inflation per annum over the next decade. That surely is not going to happen. But even that might be preferable to what would happen in a true deflation. I shudder to think. BTW, at a 2% annual inflation rate a loaf of bread costing $3.50 today will cost about 20$ in 89 years.

1.02^89 * 3.50 = $20.39 I’m cool with that.

#76 BillyBob on 10.03.13 at 2:14 am

RE: #21 Drill Baby Drill on 10.02.13 at 9:10 pm
Alberta taxpayers need a rebate check from all of the other provinces for taking in all of their past, existing and future welfare recipients…

Wasn’t it Ralph Klein who gave free bus tickets to Alberta welfare recipients so that they could move to BC?
Your post is so typical of right (wrong)-wingers spreading misinformation.

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

As a long-time expat looking in at my own country, I’m always amazed at how silly people look squabbling between provinces.

I’d like to see how well Alberta would have done without the labour being flown in from Newfoundland and other parts of the country.

You’re all Canadians, get over it.

#77 Julie on 10.03.13 at 2:39 am

Let’s get this out of the way first. Sure the US government shut down, but it’s thanks to 40 whackjob Tea Party radicals who hate too much
—————————-

Yer right. It had absolutely nothing to do with 200 million Americans who don’t want Obummercare after seeing how shitty the Cdn and UK system werkz.

Cheers…….Eh?

#78 Freedom First on 10.03.13 at 2:55 am

Canadians have been duped. Exactly the same way as the multi-millions of bankrupted citizens world wide in recent years.

The record levels of debt the Canadians are carrying has the massively indebted Canadians in the proverbial pot of water over the fire right now, and the over-leveraged Canadians are going to be boiled alive. Debt kills. And you willingly got in the pot yourselves, and though you had lots of help getting in the pot, the consequences finger will be pointed only at you, as it is yourself who will suffer. I don’t like it. It is not right. But it is true. Hard way to learn how precious it is to be: balanced, liquid, diversified, and for me: always debt free. Garth has been very gentle, and he has tried his best to help everyone, and for free, but he knows what is coming. We’re screwed.

#79 JUNO on 10.03.13 at 3:44 am

http://www.maxkeiser.com/

they comically talk about the UK housing ponzi scheme. Headed by Carney

#80 Notta Sheeple on 10.03.13 at 4:24 am

“In our own branded mortgage space we are now growing faster than anyone,” said David Williamson.

All the big banks have been aggressively pursuing the consumer loan business, especially mortgages, so CIBC is hardly alone on that front. But a key reason Canada’s fifth biggest bank by assets is confident the issue won’t come back to haunt it is that CIBC has worked hard to cut its exposure to potential losses.

“We’ve got the vast majority of our mortgages insured with the government of Canada,” Mr. Williamson said in an interview with the Financial Post, referring to coverage provided by the Canada Mortgage and Housing Corp. “Probably more than other banks.”

– Financial Post, Wednesday October 7th.
=========================

“……We’ve got the vast majority of our mortgages insured with the government of Canada…..” ???

WTF?

Always comforting to know that one of the current government’s top priorities is protecting record bank profits at the expense of health care and education.

#81 jj on 10.03.13 at 6:08 am

@ #55 Retired WI Boomer on 10.02.13 at 10:55 pm

You want to know why the peltings? Because ANYONE including Gold bug sellers, Central Banks, newsletter writers, God and that includes Garth himself, Tries to predict the future they fail Fail FAIL.

Why would you even post about the forecasting from the central bank anyway, when they revise again? Meaning their ORIGINAL forecast was Wrong.

You have to clearly understand people that the only way to make money in markets is knowing when A trend turns and begins another trend in another direction and get on for the ride.

Let me give you a quote about this that defines it well;

“Every Idea about the market is fundamentally wrong, but you have to ride that Wrong trend and get off before the Idea is discredited” G Soros

There you have it, forecasters calling tops / bottoms or any other types of forecasters attempting to call markets, gold prices, interest rates or Real Estate are fooling themselves and are no less than Charlatans.

Get to know trends, when they turn, how to follow them, and you will greatly improve your portfolio.

The fact is IF house prices in Canada are still going up then they are going up higher ITS THAT SIMPLE people. If the S&P 500 is still in an uptrend the it will go higher again BE SIMPLE and follow the trend. Gold is still in a downtrend so there is a good chance it will continue down.

There you have it, but, unfortunately most of you will continue to bow at the alter of the false prophecies of phoney oracles telling you this is a top or bottom or that will happen etc.

Play the trends; no go make some Real money, and thank me later.

#82 Buy? Curious? on 10.03.13 at 6:15 am

Hey Garth! I was looking up old high school buddies via Facebook and their lax privacy settings and one them is a real estate agent. On one of his statuses (Aug 29/13) he says “Who wants to make 23% return on their money?” with the link to the property, and get this, in frickin Hamilton! I don’t want to out the guy (Snitches get stitches) but I amazed how his clients don’t ask for proof.

http://www.youtube.com/watch?v=xP1-oquwoL8

#83 The Ross Kay vs Gregory Klump dues continues on 10.03.13 at 6:40 am

Can anybody explain what Ross meant with his reply
http://www.huffingtonpost.ca/social/hp_blogger_Ross%20Kay/real-estate_b_4018891_289390259.html

he is pointing to two CREA articles but I do not see discrepancies there

June 2013 http://www.crea.ca/canadian-home-sales-improve-june
July 2013 http://creanews.ca/2013/08/15/canadian-home-sales-hold-steady-in-july-2/

#84 The Ross Kay vs Gregory Klump duel continues on 10.03.13 at 6:42 am

Damn! above I meant duel not dues

#85 Is Guva.ca dead on 10.03.13 at 6:49 am

can’t access it… what is going on? I hope they are just upgrading the site

#86 jj on 10.03.13 at 6:50 am

Wow Garth; you propagandist, only posting views that agree with you or obviously out of whack. When you get a REAL challenge like I have pointed out you don’t post it.

Shameful shameful, that is really bad and a very good sign that someone has to be “Right” and therefore only their side of the story gets noted.

You make Joeseph Goebbels proud.

Way to go /golfclap

You posted at 6:10 am, when I was walking my dog. I approved your comment at 6:50. Get over yourself. — Garth

#87 Future Expatriate on 10.03.13 at 6:53 am

So Garth you think that someone will actually talk the Tea Party off the ledge before the debt ceiling? That’s encouraging.

I don’t know. I look into their eyes and see the scene from Mel Brook’s “Blazing Saddles” where Cleavon Little holds the gun to his own head. And that drunk Leader is supposed to reel that in?

Who’s the magic man or group who’s going to pull off this miracle? They haven’t listened a bit to Wall Street so far. Nor the rest of their johns.

#88 kk on 10.03.13 at 7:55 am

Unless we see some serious degradation in the economy, people in places like Toronto will continue to spend beyond their means thinking they will ‘A’ – live forever, ‘B’ – never be effected by what’s going on in the rest of Canada. I bet in the States most people forgot about 2009 and started doing the same stupid buying habits. People are not rational.

I agree with JJ, trends are trends and most times there is no real way to know which way the wind will blow. We can try to understand it after the fact, but we aint gonna predict it.

One area where i will not agree with Garth is with metals. Holding some real gold is the only safe guard if things ever get really bad. But then again, i’m human, not rational. We can’t forget that the whole economy is made up to begin with. Somewhat like a game, and the rules change when required. The only real sound economic system is bartering, the systems we partake in with fiat money, banking systems, etc. are based on theoretical models made to reality. All these models collapse eventually.

#89 jj on 10.03.13 at 7:56 am

You suck .

;-) — Garth

#90 Ralph Cramdown on 10.03.13 at 8:08 am

#44 H — “When most of the economies around the world are in trouble where does this 8% increase [in stock market prices] come from?”

It comes from people waking up and realizing the world isn’t going to end. 8% is nothing… I bought a handful of European incumbent telephone companies and Spain’s largest bank — overall returns have been great. Sooner or later, people come to the conclusion that when they pick up the phone tomorrow morning, there’s still going to be a dial tone, unless they don’t pay the phone bill.

#91 Jimmy 5 bellies on 10.03.13 at 8:17 am

This isn’t related to today’s post but don’t you think the west including Canada has to keep increasing the value of realestate and land prices to keep up with Price gains in china and India. If Canada doesn’t places like Canada will just become cheap retirement destination. No body would have to come here and work.
What’s your thoughts on my view? Or am I way off the ball?

#92 maxx on 10.03.13 at 8:19 am

#28 Bob Rice on 10.02.13 at 9:22 pm

Great post. TPTB have been printing themselves into a corner for the past decade and counting. As jobs continue to dwindle and the economy melt, there will be less corner within which to retreat. ZIRP will continue, as will QE.

Apart from RE (which declines daily), the real economy is on life support. Just ask anyone under 30. Or pre-retirees with no savings. Or notice the proliferation of bankruptcy trustees across the nation.

#93 AgentSmith on 10.03.13 at 8:23 am

#26 – Renters are losing money
?????????????????????????????
Puuuuhlease son. Punching money into the bank to gain interest and stockpile Index funds isn’t losing money.

Get a grip. Last time I checked
http://www.rentboard.ca/rentals/rental_rates.aspx?locid=4617&psttyid=1

A 2 Bedroom totally maxed out price of $1200month is better than paying the bank, a realtor, gas, water, property tax, misc repairs.
ADD IN THE FACT..
that I don’t have “pride of ownership” that requires me to watch “House PRoN” on HGTV and make me want to slather my house in Granite.

I also don’t have to move to Suburbia DeerLake/Racoon Trail by MINTO and force my partner to buy a car to sit in traffic half my life.

Win and Rent. 2 Bedrooms $1000 a month plus Hydro.

Last I checked having 25K in TFSA paying dividends pays a months rent a year…

#94 To and GTA stats -final- Sept 2013 on 10.03.13 at 8:27 am

Here are the final numbers, now including the sales reported on Oct 1-Oct 3. Yes they are still reporting sales for September. TREB’s numbers should be out today

http://www.dinkypage.com/218386

Condos not looking good:
TO Avg price down 4%
GTA Avg price still up 5% but sales down 3%

SFH YoY up big time 10% !!
If this is not the sign of a downturn I don;t know what it is.
(actually this is stats skewing and it comes from a high number of sellers getting out of the market in the high end segment, properties sold discounted)

#95 Fan of the Bearded Mystic Oracle on 10.03.13 at 8:36 am

“Daily, realtors and those indelibly invested in real estate come to this miserable blog to poke and jab and look for flaws in me or my arguments.”

Well they will have to look long and hard to see any flaws in the bearded mystic oracle, all knowing, all wise, soothsayer from the east, debunker of parliamentarian peckerheads and peckerettes, financial prognosticator without equal, crystal ball gazing sage, financial tea leaf reader without peer, NYTimes bestselling author, Harley riding badass accompanied and bathed by buxom Amazonians, denouncer of real estate propagandists, fierce and stalwart opponent of real estate cartels, lone voice of financial reason crying out in the financial wasteland of Canada and last and certainly not least, an all round jolly good fellow!

You still can’t borrow the bike. — Garth

#96 fancy_pants on 10.03.13 at 8:43 am

#3 condopoor on 10.02.13 at 8:47 pm
Those who mock you for predictions of timing should be ashamed.

are you new around here? Garth has been piping the same music for the last 4 years. Since he started this blog RE has gone up at least 30% overall. Too bad his buddies on the hill are horny with pulling and pushing economic levers to manipulate what should have been a slam dunk.

Actually this blog is rife with stories of people selling homes for what they paid in 2009 or 2010. As I keep reminding, real estate is highly localized. Some markets remain frothy while others have turned illiquid. Price generalizations rarely have value. — Garth

#97 CrowdedElevatorfartz on 10.03.13 at 8:47 am

@#87 jj
“You suck .”
++++++++++++++++++++++++++++++++++++
My, how eloquent.

English Lit major from an Ivy League institution par chance?

#98 G on 10.03.13 at 9:02 am

When you say that 25% of the economy is directly related to real estate, is this really just residential real estate as you imply? Or would that number not also include commercial real estate? Just curious where this number comes from

#99 Derek R on 10.03.13 at 9:03 am

#64 what bubble? on 10.03.13 at 12:11 am wrote:
… but government debt and personal debt have one thing in common: they need low interest rates to reduce debt service cost

Nope. Personal debt needs low interest rates to reduce debt service cost; sovereign debt doesn’t have to have a debt service cost for any sovereign with a printing press.

#100 Stickler on 10.03.13 at 9:06 am

“When you learn how sovereign debt differs from personal debt, come back. — Garth”

—————–
US fed government (USA’s largest employer) – higher debt payments = less $ for government employees.

less government employees = more slack in the job market, less consumption, lower GDP

#101 Bottoms_Up on 10.03.13 at 9:09 am

Consumption is interesting…people like shiny and new, might be a consequence of our evolution (new tools helped us in ways we couldn’t imagine).

Garth, was wondering if you could commit a post to describing just why or what would happen if the BoC raised rates. Who is impacted most? Why? Pros vs. Cons. I find it quite interesting on a micro-scale individuals could likely swallow an extra $10/mo on their LoC…but how does it play out on the macro-scale?

#102 -=jwk=- on 10.03.13 at 9:11 am

” So in our democratic society, does one not have the right to challenge those who’s policy may bring short term gain but long term pain. ”

In the USA one can challenge policy in all three areas of federal government, Congress, President and Supreme court. In fact you can challenge multiple times in each of these areas. You can also challenge at the ballot box – senate votes every two years, president every four years, etc.

It takes years to get laws made but when they are finally approved they have bee challenged to death and are supported by the people.

What you can’t do is whine about something you don’t like and decide to shut down the government because of it. That’s not part of the process. Never has been.

#103 CrowdedElevatorfartz on 10.03.13 at 9:12 am

@#54 Broadway Skytrain
“Concord Pacific unveils massive new Vancouver development near BC Place…..”
++++++++++++++++++++++++++++++++++++

So they get the casino plan “nuked” a few years ago and now they’re back.
And I love the “customer base” they’re advertising to.
The endlessly repeating commercial on the 6pm “news” is ……
a 20 something male model driving in an antique Karman Gia convertable to a party “somewhere” in downtown Vancouver. He enters the party….where all eyes are on HIM as he walks in and nuzzles a blonde leggy model. She swoons and he walks away smirking…..

Wow! Where do I sign up?

Not sure who that ad is supposed to appeal too but not one asian in the entire commercial …….

#104 Bob on 10.03.13 at 9:18 am

Vehicle production in Canada is poised to slump by as much as 25 percent by 2020. Another hit for the Canadian & Ontario economic story.

http://www.bnn.ca/News/2013/10/3/Auto-industrys-shift-away-from-Canada-to-gain-speed.aspx

Big deal. We’ll just build more condos. How hard is that? — Garth

#105 History on 10.03.13 at 9:21 am

Garth,
You seem to understand deflation/inflation with regards to bond yields. However, you have no concept of the affects of the most important variable. Government influence. It’s difficult to quantify, but the history of inflation/deflation is highly correlated with the wills of government to do what they want. There are 10 easy examples in the past 80 years. Get a history lesson.

I was in government. How about you? — Garth

#106 frank le skank on 10.03.13 at 9:26 am

Looks like you have a large realtor following tonight. Don’t let them get to you Garth, your good enough, smart enough, and gosh darnit people like you!

#107 Ralph Cramdown on 10.03.13 at 9:37 am

OK, I’m at a bit of a loss. The Fraser Institute, whose members typically bend to the right, says maybe seniors with a lot of income shouldn’t get OAS.

Out comes a rebuttal from a senior policy advisor to the Broadbent institute, saying that high income seniors should continue to get those monthly cheques from the government.

Anybody else find this a wee bit odd?

http://www.fraserinstitute.org/research-news/news/display.aspx?id=20458
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/bigger-clawbacks-to-old-age-security-not-the-answer/article14644127/

#108 The Mummy on 10.03.13 at 9:41 am

All economists agree the Fed will move in 2015. Mortgage rates here rose 1% in the last five months. And there’s been no increase in immigration. So much for the real truth. — Garth
———————————————————
LMAO! How many times has the Fed said something and didn’t follow through, or clearly were wrong on the predicted outcome. Come on Garth we weren’t born yesterday.

I referenced nothing the Fed stated. — Garth

#109 UPDATE: To and GTA stats -final- Sept 2013 on 10.03.13 at 9:42 am

UPDATE: the TREB numbers are out http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_market_watch_0913.htm
Their number is -3.7% for condos. Quite close.
There is no way tosolds.ca which I use for sales raw data could be off with 200 units for Toronto!
All my other numbers for prices are quite close to theirs although the sales numbers differ consistently.
My Townhouses numbers do not include Condo Townhouses. Their numbers include that, hence a smaller average price

#110 Not 1st on 10.03.13 at 9:55 am

We have pumped up residential construction as our economic base. The US has government printing and spending as theirs. Everybody’s happy right? What could go wrong?

#111 what bubble? on 10.03.13 at 10:10 am

#97 Derek R :
Nope. Personal debt needs low interest rates to reduce debt service cost; sovereign debt doesn’t have to have a debt service cost for any sovereign with a printing press.

The aim of QE=printing money is still to bring down interest rates faced by companies and households

#112 Infused with Opiates on 10.03.13 at 10:24 am

15 Sherwood – a valid point

40 Charts – you tell 15 he is wrong, but then support his arguement

70 DDawg – you miss the point and please review the meaning of “magnitude”

#113 broadway skytrain on 10.03.13 at 10:36 am

#70 D-Dawg on 10.03.13 at 1:25 am

sorry dawg, but he’s right – must use kelvin for comparisons

deg C are more like inches over 6′ – a 6’2″ guy is not 50% taller than a 6;1″

C can be negative – hence baseline is not 0 , it’s -273

#114 Jeff in Moose Jaw on 10.03.13 at 10:46 am

Watched a TED talk with Preet Banerjee, talking about debt, inflation, interest rates… its a new video.
http://tedxtalks.ted.com/video/Why-2-5-billion-heartbeats-migh

Anyhow, I don’t comment much, but do read the blog all the time, missing few. Garth and Smoking Man are great, so are a lot of regular posters.

#115 Don Derc on 10.03.13 at 10:48 am

I disagree – you will see a full 1% BOC interest rate rise in Cda over the next 18 months – the black swan? The debt of europe and usa – ok so it’s a white swan. By the way – corporate canada say sales are down a full 10% over last year…and the forecast ain’t good. L-A-Y-O-F-F-S

#116 Joe on 10.03.13 at 10:57 am

“Did high home prices push down manufacturing employment?”
That’s research that MacLean’s is writing about on its website today:
http://www2.macleans.ca/2013/10/03/did-high-home-prices-push-down-manufacturing-employment/

Would match what Garth keeps saying, that too much of the Canadian economy revolves around real estate.

#117 Bigrider on 10.03.13 at 10:58 am

Wow a deletion of my pre 9 am post without any provocation.

What could have possibly been wrong with it?

I deleted nothing of yours. — Garth

#118 Rational Optimist on 10.03.13 at 11:01 am

102 Bob on 10.03.13 at 9:18 am

Thanks for the article. We’re blowing it as far as automotive goes in Ontario. It’s still very important, and will remain very important. But the last three years have been very big for the automotive sector (all of that “pent-up demand” from the recession), and Ontario was not able to capitalize.

In fact, we didn’t even try. While the automotive renaissance gained steam and the Tennessees and Georgias were getting brand new OEM plants and all of the spin off impact of them, our “leadership” was too busy complaining about the high dollar and wishing wages could be cut through currency debasement rather than labour reform.

I’m not at all saying “right to work” makes sense in Ontario. We do need to ask why we are not able to compete (wages are only part of the story, logically), and what we need to do to change that. A strong export-driven automotive sector provides high-quality jobs, and lots of spin-off benefits.

#119 Westcdn on 10.03.13 at 11:04 am

“The highly diversified CalPERS investment portfolio has an allocation target of 49 percent publicly traded stock, 16 percent bonds, 14 percent private equity, 13 percent real assets – real estate, infrastructure, and forestland – and the remaining 8 percent in smaller allocations in asset classes designed to minimize volatility and liquidity risk.”
http://www.tfmetalsreport.com/blog/5117/pension-system-failure-guaranteed
This important US pension plan is counting on a 7.75% return for decades in order to meet its pension obligations. What strikes me is the ratio of stock equity to real estate values. If they are right, I will be a very happy man. However, Bill Gross throws cold water on the plan because he believes economic growth is going to be low for decades. I agree with Bill that future economic growth and interest rates (QE or not) will remain low for a very long time. I will be happy with an average 5% return on equities over the next decades, future CalPERS pensioners and California taxpayers – not so much. But we may get a game changer when enough people realize the current game is slowly bleeding them. I like watching California as I find them a bell weather for Canadian economic trends – especially in the golden triangle of Toronto, Ottawa, and Montreal (can you say grey power?).

#120 Retired WI Boomer on 10.03.13 at 11:08 am

JJ #79

“Play the trends”…..

You have got to be kidding me? This old goat did NOPT fall off the cabbage truck last week. Are you old enough to recall the “Nifty Fifty” bcd in the 1960’s?
Or, maybe the trend to by everything with “electron, or electronic” in it’s name? How about conglomerates?
Maybe you’ll recall how well “syndicated Real Estate” worked out? Maybe the tech euphoria in the late 1990’s?
Heavily into the NASDAQ at 4,000 on it’s way to 5,000??

All Trends….All ended in DISASTER!!

Underpriced stocks PE ratio’s at reasonable multiples are a buy. Underpriced Real Estate is also a buy. Yes, there are still bargains to be had, just learn to shop well.

Here in the US I would rather own an INDEX FUND of whatever it is. It captures the market, no outperformance, but no underperformance either.

Trend….yes, INDEX funds are MY friend here.

Investment NOT Speculation

#121 Westernman on 10.03.13 at 11:16 am

Just what I’ve been saying all along – they can’t raise rates… what little is left of Canada’s phony “economy” will promptly crash…
And the mad money printing will continue uninterrupted in the U.S. because the patient is critical and has to have help to continue to live…
And lastly get this straight – the stock market – read “fixed casino”has absolutely NOTHING to do with the actual economy…
And there is the truth kids…

#122 not 1st on 10.03.13 at 11:19 am

Any Govt debt = sovereign debt = OK

ergo, CMHC = govt debt = sovereign debt = all good

Think of CMHC as our stimulus program and everyone is happy.

#123 calgaryPhantom on 10.03.13 at 11:30 am

Wow a deletion of my pre 9 am post without any provocation.

What could have possibly been wrong with it?

I deleted nothing of yours. — Garth

————————————————–

I have noted that too. Some posts of mine, which are completely innocent, never showed up ( in past few days).

#124 TS on 10.03.13 at 11:36 am

But that’s the world we’re in. What a powerful argument to be balanced, diversified, liquid, and heavily uninvested in Canada.

Argument is not powerful, market does.

#125 Arse on 10.03.13 at 11:36 am

Dow could go to 20,000. I think the real estate prices will keep going up for at least 2 more years.

#126 Canadian Watchdog on 10.03.13 at 11:39 am

WSJ: Obama to Investors: Please Panic, at Least a Little Bit

President Barack Obama and his top economic officials appear to be pushing for some market unrest to exert pressure on the GOP to throw in the towel. Asked in his CNBC interview Wednesday  whether Wall Street is right to remain calm over the standoff, Mr. Obama replied: “No.”

LOL This is how stupid it's getting.

#127 Mister Obvious on 10.03.13 at 11:48 am

#15 Sherwood Park
#40 ILoveCharts
#70 D-Dawg
#112 broadway skytrain
————————–

I love these kinds of argument. Of course, “broadway skytrain” is quite correct. I remember hearing this question posed on radio one night:

“If it’s zero degrees C in Vancouver and twice as cold in Toronto, what is the temperature in Toronto.?”

The obvious answer: -136.5 degrees Celsius

Why?

“Twice as cold” can only be interpreted a “half as warm”. (There is no ‘cold’ in physics, only varying degrees of heat). To determine what is half as warm you need an absolute scale (i.e. the Kelvin scale).

0 degrees Celsius = 273 degrees Kelvin.

Thus “half as warm” is:

273 / 2 = 136.5 Kelvin

Converting to Celsius:

136.5 – 273 = -136.5 C

I imagine by now ‘Sherwood Park’ wishes he’d never used the temperature analogy. Just a guess.

#128 Grooby on 10.03.13 at 11:51 am

If there was ever a day of comments where an up/down vote feature was required, today was it.
Honestly Garth, I don’t know how you suffer the slings and arrows of nutjobs who think they know more about economics and finance than thousands of experts who analyze, invest, or create balanced portfolio for a living.

Of course. Those so called ‘experts’ are all wrong and part of the ‘system’, because some nut on another website who truths said so.

#129 Nemesis on 10.03.13 at 11:52 am

“It’ll all get fixed. No defaults. No crisis.” – HonGT

SuchConfidence!… but I’ll go with “Maybe” [currently trending towards default/’crisis’ if Congressional/Senatorial aides are to be believed]. We’ll see.

And now for this morning’s ‘Zen’!…

…”Jack Blum, the money-laundering investigator, recounted to me a work trip to Miami two years ago, when he was stunned to see condominiums going up in the poor Liberty City neighborhood. “I was in a cab and asked the driver what was going on,” he said. “He didn’t miss a beat—he said, ‘That’s from money laundering.’ When it’s that obvious to cabdrivers, you know the situation is bad. But that’s what the city’s economy is built on, and it is a monumental challenge to fix it.”…

[TheNation] – Miami: Where Luxury Real Estate Meets Dirty Money

http://www.thenation.com/print/article/176486/miami-where-luxury-real-estate-meets-dirty-money

BonusZen/FloridianBlastFromThePast:

http://youtu.be/e_6-_fI64Rw

#130 Suede on 10.03.13 at 12:01 pm

i love it

“All Non-Essential workers in US Government forced to stay home”

wtf is a non-essential worker? the crust on bread? the white fatty part of prosciutto? The stump of a muffin?’

http://news.yahoo.com/u-government-workers-feel-sting-being-non-essential-171349675–business.html

#131 Doug in London on 10.03.13 at 12:04 pm

It seems everyone is in on the act of trying to keep this real estate bubble going. In today’s Globe and Mail, business section there’s an article that says housing sales increased 63.8% last month in Greater Vancouver.

I find myself experiencing Deja Vu from 13 years ago. In mid 2000, Nortel Networks was riding high with a share price up to $120. In November of that year trouble started to appear and the price quickly dropped to $80. Despite that drop, a lot of self proclaimed “experts” were still saying it’s still a great company with a bright future. As the share price dropped to $70, $60, $50 and lower still you heard it’s still a great company. As the share price kept dropping, the truth started to emerge of how management fixed the books to make it look better than it actually was, just like what happened at Enron about the same time. Fast forward to the present, eventually it will all come into the light about how the numbers were fixed to hide brewing problems with the real estate market, especially in grossly overpriced areas. I don’t know what will happen next, but the lawyers will likely have their work cut out for them.

#132 Musty Basement Dweller on 10.03.13 at 12:12 pm

#122 calgaryPhantom on 10.03.13 at 11:30 am
Wow a deletion of my pre 9 am post without any provocation.

What could have possibly been wrong with it?

I deleted nothing of yours. — Garth

————————————————–

I have noted that too. Some posts of mine, which are completely innocent, never showed up ( in past few days).
==============================
It’s a plot against you guys. There is nothing more fearful and insidious than an innocent post.

#133 what bubble? on 10.03.13 at 12:26 pm

#120 Westernman on 10.03.13 at 11:16 am
…and the mad money printing will continue uninterrupted in the U.S. because the patient is critical and has to have help to continue to live…

… but printing money endlessly isn’t a solution as the last five years have shown… and the economies simply will never be able to generate enough money to repay the debt… so sovereigns will be creating force majeure to free themselves from debt liability…

#134 bill on 10.03.13 at 12:29 pm

Hi Garth
Lovely morning here in van.
just got my copy of cycle world. I see there is a new ‘water cooled ‘offering from the motor company.
not sure about how the radiator in the faring looks…..care to comment?

#135 jess on 10.03.13 at 12:39 pm

40 whackjob Tea Party radicals who hate too much.

There Is No Such Thing as the Tea Party. There Is Only a Collection of Billionaires
http://www.youtube.com/watch?v=1LVOPSgR1Xk&feature=player_embedded

http://truth-out.org/opinion/item/19199-there-is-no-such-thing-as-the-tea-party-there-is-only-a-collection-of-billionaires

…”Margaret Thatcher, the UK’s conservative prime minister from 1979 to 1990 once said that “There is no such thing as society, there is only a collection of individuals.”
A similar thing can be said about the Tea Party: there is no such thing as the Tea Party, only a collection of individual billionaires and their front groups…

#136 bill on 10.03.13 at 12:42 pm

#66 Sask Girl on 10.03.13 at 12:20 am
I think he would tell you not to buy the GIC. buy the bank instead.and not the individual stock but through a ETF.
some of which are on sale…..

#137 jess on 10.03.13 at 12:53 pm

The case is Motors Liquidation Co. GUC Trust v Appaloosa Investment Limited et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-09802
http://www.reuters.com/article/2013/10/01/gm-bankruptcy-settlement-idUSL1N0HR1B120131001

The agreement ends complex litigation in which hedge funds affiliated with John Paulson and Paul Singer’s Elliott Management agreed to reduce the amount they said they were owed in the bankruptcy of “Old GM.” The agreement was reached on Friday.

=
rate loading/
http://www.rte.ie/news/business/2013/1001/477669-anglo-accused-of-overcharging-clients-by-500m/

irish banks
Under the 2009 rules the three banks will pay tax on at least half their future Irish profits, no matter how big their historic losses were.

THE Government may change tax rules in the budget to let bailed out banks use more of their past losses to reduce their future tax bills

http://www.independent.ie/business/irish/budget-2014-government-could-change-tax-rules-for-bailedout-banks-29631747.html

=

…”Dr Schaeuble blamed Ireland’s collapse on “a hypertrophied and damaged banking sector” that left Ireland “with a bill they could no longer honour”.

Despite this, Dr Schaeuble writes that “a mandatory bail-in regime would ensure that those who fund the banks would have to share the costs of their mistakes in the future – and would know this before they invested. Chances and risks had to be reunited, wrong incentives to be stopped.”

http://www.independent.ie/business/world/schaeuble-rules-out-any-retrospective-help-over-bank-bailouts-29630540.html

#138 Quebec turning off Crea on 10.03.13 at 12:58 pm

The Montreal Board says they have had enough of broken promises and want to end their working relationship with the Canadian Real Estate Association (CREA).  After 16 months of dispute over fees and services, the Montreal board are annoyed that out-of-province brokers are allowed to list Quebec homes on realtor.ca and MLS.ca. Following an agreement between the Competition Bureau and CREA in 2010, homeowners can sell their properties on realtor.ca by paying a broker a flat fee. Unlike other Canadian provinces, Quebec brokers have to verify that the listing information is correct. The Montreal board,  under the guidance of President Patrick Juanéda, has asked CREA to respect its own Brokerage act and take down the listings which they call ‘illegal.’The fallout between the two boards arose in July 2012 with Montreal threatening to leave the national association if they did not cut members’ expenses. It has not turned into a war of words between the two. Montreal says CREA has failed to deliver on its promises, and they will make a final decision on whether to remain a member by mid-December. CREA, on the other hand, says they remain ready to engage in conversation with all Quebec boards. 

#139 Derek R on 10.03.13 at 12:59 pm

#110 what bubble? on 10.03.13 at 10:10 am wrote:
The aim of QE=printing money is still to bring down interest rates faced by companies and households

Obviously. But that’s another topic.

#140 Ralph Cramdown on 10.03.13 at 1:21 pm

#132 what bubble? — “… but printing money endlessly isn’t a solution as the last five years have shown… and the economies simply will never be able to generate enough money to repay the debt… so sovereigns will be creating force majeure to free themselves from debt liability…”

You should spend more time doing your own thinking and less time letting other people do your thinking for you, or at least choose BETTER thinkers if you insist on outsourcing.

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

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

The US could hike taxes to a level still lower than Canada’s and have the entire US debt paid off in well under twenty years. But what would be the point? US government debt is a product that’s in demand. Rational people have even been known to pay more than face value for it recently. GE and IBM don’t have any plans to become debt free any time soon, either. THINK!

Now ask yourself who benefits from the idea that US government debt is out of control and unsustainable. If a 30 year old individual (who faces certain mortality and hopefully a retirement) took out a mortgage for 74% of his income, would you say that he’ll never be able to generate enough money to pay it back?

#141 Dupcheck on 10.03.13 at 1:26 pm

Debt is a security buffer that rival countries have in order to keep each other in the loop. It will always exist if you want peace. If US wanted to pay off the debt they would have done it by now, but they choose not to, in order to keep China and the rest of the lenders at their toes. It’s all games.

#142 Form Man on 10.03.13 at 1:28 pm

#120 westernman

Your ignorance of macro economics is only exceeded by your malevolent misogyny. Have fun hiding in your sad little trailer, wallowing in juvenile rage.

In the meantime some of us will continue to grow our investments as Obama slowly cleans up the mess left by the neo cons.

I do agree with you that Harper and Flaherty have screwed up royally. Hopefully the Liberals will take power in time to reverse the idiotic policies of Harper’s ideological morons before Canada is truly hooped…………

#143 Debt Ceiling on 10.03.13 at 2:05 pm

Ultimately the debt ceiling will be increased (or removed). The real issue may be the lending ceiling, especially if QE increases (Fed members are already saying they are ready to do more if there are any signs of weakness). Lenders will not lend forever to an indebted entity even if it can print, and they will impose the rules, not US leadership. See Europe for more details.

#144 HAWK on 10.03.13 at 2:14 pm

LOL – “Only in America”

Still I’m glad, the little guy’s fighting back in whatever form against the bloody banking criminals.

It’ll get more interesting yet.

http://www.zerohedge.com/news/2013-10-03/meet-monster-housing-market-presenting-vampire-reos-which-65-americans-live-mortgage

#145 broadway skytrain on 10.03.13 at 2:19 pm

30 Doug in London on 10.03.13 at 12:04 pm

I find myself experiencing Deja Vu from 13 years ago. In mid 2000, Nortel Networks was riding high with a share price up to $120. ……how the numbers were fixed to hide brewing problems
————————————–
some similarities, but mostly different.

nt went to 0. land can not even approach zero.
nt was a 2-3 ppl lying about secretly held numbers.

RE is nothing like that – its an open market (mostly) , sure info will be spun , but it’s a nuisance, not fatal – many thousands of individual decisions

i assume that EVERY LAST ONE of the 10’s of thousands of hot new condos in DT van is selling, since the king builders round here (concord) are going in for a Billion to build another batch.

#146 broadway skytrain on 10.03.13 at 2:22 pm

just got my copy of cycle world. I see there is a new ‘water cooled ‘offering from the motor company.
———————
Tesla could sure use a little of that today…

#147 happity on 10.03.13 at 2:22 pm

70% of stocks are high frequency traded by 5 banks, that is the market, and 2 of those banks are the plunge protection team and all were involved in developing the bail in plan.

Ron Paul, Jim grant, Paul Roberts, Jim Rickards etc say the market does not reflect reality. But hay, what do I know, sell your house and put all the proceeds into digital vapor that represents 500 large companies that

#148 old gringo on 10.03.13 at 2:40 pm

Garth,
“The greater fools live. They surround us.”
You forgot to mention “they are also breeding”.
This is like a bad soap opera, you know whats coming and it ain’t good.
Life is either a daring adventure or just “wasted time”.
Gotta go…..happy hour starts

#149 Buy? Curious? on 10.03.13 at 2:41 pm

The picture, I don’t get it.

#150 Holy Crap Wheres The Tylenol on 10.03.13 at 3:02 pm

Another shooting for authorities in Washington there a problem now. Who do you call? Everyone’s off work today? Idiot congress.

http://nbcpolitics.nbcnews.com/_news/2013/10/03/20805397-us-capitol-placed-on-lockdown?chromedomain=usnews

#151 charlotte on 10.03.13 at 3:13 pm

hi garth,

if someone were to buy a home. how much mortgage do you think is appropriate to take out based on family income of 150k/year?

#152 ponerology on 10.03.13 at 3:20 pm

@144
“land can not even approach zero.”
Sure it can under the right set of circumstances: Chernobyl as an extreme example but also places like abandoned mining comunities. Things are only worth what people are willing to pay for them. If no one wants to give you cash for something than it’s worth zero (in monitary terms).

@146: even if that is true, if one were to focus on dividends for blue chips rather than capital gains, one would still getting a percentage of their take which is often higher than a GIC %. As long as certain companies continue to make huge amounts of profits to which the shareholders get a decent cut then it’s all good in a way.

#153 Westernman on 10.03.13 at 3:44 pm

Form Man @ 3 141
Where did I mention Harper?
And I have news for you- Canada is already “hooped” as you goofs would describe it…
As far as you growing your investments I suspect the only “investment” you are growing is your mountounous pile of empties…

#154 ss on 10.03.13 at 3:46 pm

Just finished talking to a mtg broker, any pre-approval except 5 year fixed term needs to be qualified at bank of Canada’s rate – 5.34%. Only the 5 yr fixed term needs to be qualified at the actual obtained rate – currently posted is 3.84% (b4 any discount)!

#155 earthcallinggarth on 10.03.13 at 3:51 pm

The US election was decided by 2 million votes out of a pop of 330 million….obviiously there are more than 40 Tea Party Advocates. I live in the US and can tell you that the liberty-centric party is alive and well.

-gold has gone down 20%….but so have prefered shares and many REITS…..so talk apples to apples. The quantities of gold bought by soverign goverbnments is increasing every year and dispacing India as a factor.

Gold pays no interest, no dividends, and has delivered only losses for two years. Dead money. — Garth

#156 Penny Henny on 10.03.13 at 4:01 pm

#148 Buy? Curious? on 10.03.13 at 2:41 pm
The picture, I don’t get it.
————————————————–
maybe you’re supressing memories

#157 torontorocks on 10.03.13 at 4:09 pm

So if prices rose by 50pc between 2002 and 2013 and then fall by 10pc (say the 416), big deal? You’re still priced out if rates rise bc no-one has to sell.

#158 jess on 10.03.13 at 4:10 pm

the road to thrall dom
http://www.businessweek.com/articles/2013-10-03/eike-batista-how-brazils-richest-man-lost-34-dot-5-billion#r=rss

http://www.bloomberg.com/news/2013-05-07/fire-sales-risk-requires-repo-market-reform-n-y-fed-paper-says.html

hubris syndrome
http://www.dailymail.co.uk/health/article-2442574/Thatcher-Blairs-egos-reflected-language-says-expert.html
http://en.wikipedia.org/wiki/Hubris

stopping other paychecks while receiving theirs
http://www.truthout.org/buzzflash/commentary/item/18232-gop-tin-foil-hat-caucus-get-paychecks-for-putting-millions-out-of-work

#159 Ralph Cramdown on 10.03.13 at 5:01 pm

#146 happity — “Ron Paul, Jim grant, Paul Roberts, Jim Rickards etc say the market does not reflect reality.”

So? Reality is kicking Ron Paul’s ass. Here’s his portfolio:
http://beta.streetauthority.com/energy-commodities/revealed-inside-look-ron-pauls-portfolio-460339
Equal weight, the gold and silver miners in his portfolio are down 55.88% in the year to today. The top two by market cap are down 55% and 45%.

I think the moral of the story is don’t ask an obstetrician for investment advice.

#160 Form Man on 10.03.13 at 5:14 pm

#152 westernman

Harper has done immense damage, but Liberals are clever. It is possible to fix it.
No mountainous pile here. My drinks are delivered on a tray and the empties are carried away in the same fashion. Presumably they are being recycled appropriately.
We still have an opening for you at our Estevan site, so gather up your little pile of belongings and prepare to become a functioning, productive citizen. Who knows, maybe you will even attract a member of the opposite sex eventually ( unless you prefer your own kind, we are an equal opportunity employer, so no worries…….)

#161 Harry Wilson on 10.03.13 at 5:38 pm

re #66 Sask Girl

About market growth GICs, I just wanted to ensure that you noticed that their “maximum returns” are for the life of the GIC, not per annum. This means the maximums are 4-5% per year, not a lot more than a regular GIC, and potentially a lot less. See note 2 in the boilerplate at the bottom of the page: “Maximum Return is equivalent to the total return over the term of the investment (i.e. not an annualized rate).”

Scotiabank offers a similar product, and is silly enough to have a page of their historical returns on three year “Stock-Indexed” GICs, from 1999 to 2013. The past is not the future, but this will give you some idea of your chances for success. Look at the right hand column, “Actual Return Paid”, and divide by three to see the annual rate. A few people made out like bandits, but just as many are sorry they got into this game.

Once again, remember that all of these numbers are total return, not annual. Don’t get dazzled by big numbers. Here’s the link:

http://www.scotiabank.com/ca/en/0,,2945,00.html

P.S. For further advice on GICs from a wiser source than I am, see the response to comment 41.

Thanks, Mr. Turner, for letting me use the G-I-C-word twice in one posting.

#162 Pulp Faction on 10.03.13 at 5:45 pm

“Nanos Research poll asked people a few days ago about house prices – now at record high levels – in their neighbourhoods.
Just under 40% said they expected them to increase.”

Translation: 40% are COUNTING on the prices to increase or they are screwed, because that is their sole long term investment plan. Never thought it would rain.

#163 Doug in London on 10.03.13 at 6:16 pm

@broadway skytrain, post #144:
While it’s true that real estate won’t go to zero, it could correct enough to leave a lot of buyers under water for a long time and cause more people hardship than when NT collapsed. The similarity is in how real estate is being promoted in a way that hides troubles brewing, and that is reminiscent of NT. I’m glad I don’t have a house, or worse yet a condo, in Toronto or Vancouver. If I did, I would have sold it by now. The only real estate I own is REITs (yes, they are still on sale), and don’t have plans to change that any time soon.

#164 Westernman on 10.03.13 at 6:37 pm

Form Man @ # 159
Your drinks are delivered in a cardboard box 12 at a time…
You have no Estavan “site” and as far as becoming a productive citizen in the conventional sense I think not since that would entail paying taxes and that only supplies you and your ilk with further social assistance checks…
I’m all finished with paying for bums like you…
Maybe your “Liberal” saviors will pay for you, if they haven’t run out of other peoples money that is…

#165 Harry Wilson on 10.03.13 at 6:53 pm

re #160 Harry Wilson

Hey Sask Girl:

The Scotiabank link in my comment above went wacky, probably due to the commas in the URL, so try copying and pasting the full line into your browser’s address bar. Alternatively (if I did it right), just click on my name at the top of this comment.

#166 Smartalox on 10.03.13 at 7:06 pm

VREB says sales are up in Vancouver. Looks like property taxes are set to rise, too, somewhere between 2 and 4 per cent. My landlord is going to hate this, his margins are razor thin as it is!

http://m.news1130.com/2013/10/03/taxes-going-up-in-vancouver/

#167 bill Gable on 10.03.13 at 7:16 pm

Todays line “lemmings with suicide vests” is one of the funniest shots I have read in years.
Thanks, Mr. Turner – a great, informative and yes, funny, post.
They just keep getting better. Great work.

#168 Canadian Watchdog on 10.03.13 at 7:16 pm

The only GTA RE chart that matters right now. chart

Watch how fast sales plunge when mortgage rates head lower.

#169 Ann on 10.03.13 at 7:24 pm

165 Smartalox on 10.03.13 at 7:06 pm
VREB says sales are up in Vancouver. Looks like property taxes are set to rise, too, somewhere between 2 and 4 per cent. My landlord is going to hate this, his margins are razor thin as it is!

You will to when rent goes up it’s a no win.

#170 broadway skytrain on 10.03.13 at 7:31 pm

VREB says sales are up in Vancouver. Looks like property taxes are set to rise, too, somewhere between 2 and 4 per cent
——————————

about the only thing cheap in vancouver is prop tax.
an 800k assesed, 1M mkt sfh pays about 3600/yr

3% increase is about 100/yr or 8-9 bucks/mo. whoopee.

bsmt rent is 1075/mo – when the tax goes up i’ll hike the rent by 25/mo – problem solved.

#171 Steven on 10.03.13 at 7:36 pm

The world of finance,politics, MSM, fiat money,the real estate market and political correctness is a sickness of the mind and of society as a whole.

It has got to be stopped before sanity and progress can be restored.

#172 Form Man on 10.03.13 at 7:53 pm

#163 westernman

Look, we cannot have you on the Kelowna site, so Estevan it must be.

There was a noticeable ommision in your reply which can only lead to one conclusion, so I feel compelled to provide some assurance :

” its ok. we are equal opportunity. you don’t have to pretend to hate women anymore………..”

#173 D-dawg on 10.03.13 at 7:57 pm

#112 broadway skytrain sorry dawg, but he’s right – must use kelvin for comparisons

No you do not. #70 ILoveCharts said: “if the units were in K, a drop from 2 to 1 would be a big deal”

A change in temperature of 1 Kelvin is the same magnitude change as change in temperature of 1 Celsius. Therefore, temperature changes measured in K or in C can be compared directly.

Why would such a decrease be a ‘big deal’ in one case and (implicitly) not so in the other case? It represents the same change in the amount of something (thermal energy in this case) regardless of the scale chosen.

Of course the *percentage* changes depend on the scales chosen because of the mathematics of that calculation. But that isn’t what was challenged in the #40 post (although I did say the entire rebuttal was nonsense which isn’t true – it is partly nonsense).

Oh and by-the-way #111 Infused: ‘magnitude’ as used herein, to compare the relative size or extent of two things, is the proper usage. Nice try, buds.

#174 espressobob on 10.03.13 at 8:02 pm

#160 Harry Wilson
#66 Sask Girl

GIC’s are a waste of time! One percent return, really?!?! And that ‘gain’ is fully taxable at your marginal rate! Salt in the wound? Fair enough maybe in your TFSA? Again, complete waste of capital!!!! Cash is better! Hit the books!!!!

#175 jess on 10.03.13 at 8:07 pm

this was the question listen to what the people said

Do you agree with obama care or affordable care act?

http://mashable.com/2013/10/01/obamacare-jimmy-kimmel/

#176 espressobob on 10.03.13 at 8:17 pm

#170 espressobob

Correction, Market growth GIC’s? They still suck!

#177 Old Man on 10.03.13 at 8:26 pm

Forget the free candy in life, as had this woman who knocked on my door that made me a batch of what is called saltwater taffy, and said thank you. Guys never accept a gift of food at the door, as this is bait for a woman that wants control, and never again, as there are women in life that will try all sorts of tricks to hook a man that is single in life especially if they know you have money. Daisy Mae is going to trash me for sure :)

#178 Smoking Man on 10.03.13 at 8:29 pm

#167 Canadian Watchdog on 10.03.13 at 7:16 pm
The only GTA RE chart that matters right now. chart

Watch how fast sales plunge when mortgage rates head lower.
………………………………………..

See what happens every time you include Brampton in the data.

#179 jj on 10.03.13 at 8:47 pm

Dam you Garth, I knew you had it in you! I knew it! I was just testing you with that whole poed thing you know (eyeah right right?)

Thanks for posting, my faith in censoring on you blog has hugely improved.

I openly apologize for being an ass earlier, so my apologies to you Garth Turner.

JJ

#180 Westernman on 10.03.13 at 9:18 pm

Form Man @ # 171
You don’t have any sites…your just a drunk with delusions of grandeur…

#181 Nemesis on 10.03.13 at 9:34 pm

@OldMan/#176

TrulyWords’OWisdom… ‘Tis why I perpetually feign poverty and disinterest.

Oh yes… Jess – this is for you and all the other SaltyDogz who are curious about l’actualité viz. AffordableCareAct…

[NSFWcorp] – Obamacare: The Gift To Insurers That Will Keep on Giving

https://www.nsfwcorp.com/dispatch/obamacare-ker-pow/359e5a731b99056380572a07d0bbac6f923b8570/

[That link’s only good for 23HRS… better read it now]

#182 Form Man on 10.03.13 at 9:58 pm

#179 westernman

Now now, don’t be sullen.

#183 Infused with Opiates on 10.03.13 at 10:49 pm

172 D-Dawg – a change of temperature from 2C to 1C is not of the same magnitude as a change in temperature from 2K to 1K.

The first is a drop of about 0.36%. The second is a drop of 50%.

Do we agree on this?

#184 Harry Wilson on 10.04.13 at 2:02 am

@ ILoveCharts, Obvious, Skytrain, Infused, et al:

Just for the record, #15 Sherwood Park didn’t specify the temperature scale, and may well have been talking about degrees Kelvin (ever been in Sherwood Park in January?).

You may argue that Celsius was implicit in his statement “saying that the temperature dropped…”, since saying anything at 1 or 2 degrees Kelvin would be difficult if not impossible, but I would counter with the hypothesis that it could have been someone on Earth discussing a particularly chilly evening on Omicron Persei 14.

But as for 1 degree Celsius being 50 percent of 2 degrees Celsius, yeah, no.

This is fun!