Down

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Another day, another factory. On Tuesday came the turn of 500 employees at a cereal plant in Ontario to learn they’re toast. Exactly 90 years after it started pumping out corn flakes in London, Kellogg’s is moving to Thailand, where the minimum wage was raised this year to $10. Per day.

One hundred and seventy clicks away, the town of Leamington is still trying to digest the loss of 740 jobs at a century-old factory turning out red sauce, which also kept 500 seasonal workers busy. In Saskatchewan, as you know, Potash is punting 1,000 workers, and in Toronto mighty Bank of Montreal quietly trashed as many positions. Sears is exiting key locations and idling hundreds, just like Sun Media, now in the process of closing 11 papers. Alberta’s Encana is losing a fifth of its workers, while Blackberry relentlessly disintegrates. And today, news that Canada Post won’t deliver the mail anymore, ridding 8,000 posties.

All companies have their own issues and the list above doesn’t mean the economy’s unravelling. But it sure makes you wonder. What’s next?

The Bank of Canada now says it’s disappointed at our export levels, recently dropped its growth forecast and worries about “downside risks” to inflation. Ditto in Europe, Japan and even Australia. For the first time in the lives of most people living, credible economists are talking about the D word. Deflation. So should we.

When economies crap out and growth fizzles, companies have a hard time getting by, especially in high-cost countries like Canada where everybody wants a $375,000 sidesplit in a regional city. So they try to cut wages (that never goes well) or simply leave. A drop in employed people means less consumer spending, which brings fewer deals at the Chrysler store. More folks compete for the available positions which are left, so bosses can offer less. After a while, goods and services are cheaper, but business doesn’t improve because less money is circulating. Real estate sales drop, as do asking prices – it’s a process which can take a year or two to ripple through a city, or a region. This is where deflation’s born.

It can be mild, last a while and go away. It can be like Japan, still in a 20-year recession. Or it can be like the 1930s. In any case, deflation has one overriding characteristic – it makes debt harder to pay. As thousands of employees at BeeMo, Kellogg’s or Blackberry are mulling over this holiday, how do you keep up years of mortgage payments when you’ve got just months of severance? It’s not like the economy is throwing off masses of new jobs.

Last month 21,400 jobs were created in all of Canada, but 28,000 were lost. Of the new ones, the vast majority were part-time positions. So far in 2013, the pace of job creation has dropped 50% from last year. We need at least twenty thousand net new jobs a month to keep up with the new kids, but have been running at only 60% of that level. Unemployment among those 24 or younger is 14%. In Ontario, 17%.

During that same period, personal and mortgage debt has risen to new heights, while average house prices have gained 8% (11% in Toronto). Wages, on average, are growing at 1.5%, and half of that was trashed by your grocery bill. Makes you wonder.

If this is indeed a precursor to years of scant growth, job stress, falling prices and a cash drought, most Canadians got it wrong. On what possible basis would house values continue to bloat, even if mortgage rates stay in the ditch? Wouldn’t it be a mistake to lock up the bulk of your net worth in an asset yielding nothing, or facing declines? In fact, do people know that residential real estate is almost always a casualty when inflation dies?

Actually, deflation seems to be stalking much of the globe. Inflation’s falling steadily in Europe. The US has the lowest rate since the crisis of 2009. Greece, Spain, Portugal, Sweden and Switzerland already have negative values. In all these places lower prices bring falling corporate profits, declining stocks and consumers who stop buying stuff because they know it’ll be cheaper in two months. Some American states and cities are rolling back pension benefits, while the labour force participation rate is dropping.

Central banks may be printing money as never before, but the velocity of it is stalling, In other words, all that stimulus spending ain’t turning into growth, jobs and inflation. Not cool. Five years of cheap money and billions in new debt have obliterated history.

As a boy I once asked my mother why she never threw out string, but added it to a ball. “You never know,” she said. Later I found my parents met in 1930 but couldn’t afford to marry for eight years. Imagine.

221 comments ↓

#1 NuisanceBear on 12.10.13 at 9:09 pm

First Baby!

#2 Smoking Man on 12.10.13 at 9:12 pm

Garth after writting you above, nice peice of work by the way.

Do you not think Prozak will cut the over night rate.

He will. Our dollar caught fire last few days.

He has no choice VRM as the great Gartho recomends

#3 mark on 12.10.13 at 9:15 pm

As a boy I once asked my mother why she never threw out string, but added it to a ball. “You never know,” she said.

Nothing wrong with that attitude. Certainly less uncertainty when you get punted from uncertain jobs.

#4 Babblemaster on 12.10.13 at 9:17 pm

“Central banks may be printing money as never before, but the velocity of it is stalling, In other words, all that stimulus spending ain’t turning into growth, jobs and inflation. Not cool. Five years of cheap money and billions in new debt have obliterated history.” – Garth

—————————————————–

That printed money makes certain that wall street can continue to pay the bonuses that are required to attract and retain the talent that helped cause the financial debacle in 2008.

#5 Nemesis on 12.10.13 at 9:19 pm

“Or it can be like the 1930s.” – HonGT

Remember how that ended?

Now you know what KeepsNemUpAtNight…

OldHabits are HardToBreak.

[NoteToSaltyDogz: Pappy RodeTheRails until UncleAdolph helped William Lyon Mackenzie King ComeUp with a NewActionPlan. With a LittleHelp from Lord BeaverBrook.]

#6 In the Cold from Toronto on 12.10.13 at 9:24 pm

Love the story about your parents Garth. As a man who grew up in a desolately poor country, I can sympathize.

Every time one of my house rich friends asks me why I don’t buy a house, I ask back: if you’d have a million dollars, what would you do: buy a detached house in this city (we live in Toronto), or move to the Caribbean for the rest of your life…

The smart ones shut up.

The others tell me that while they don’t have the money, this is not an honest question, because one needs a home to live in… and then go into the wilderness as their thoughts look for an ending…

I shrug and move on.

#7 totalinvestor.com on 12.10.13 at 9:26 pm

‘Dr. Doom’ warns Canada’s housing bubble about to burst

http://totalinvestor.blogspot.ca/2013/12/dr-doom-warns-canadas-housing-bubble.html

#8 Van Isle Renter on 12.10.13 at 9:30 pm

So then, should I just keep my Bond ETF’s and my pref shares and start to pare back on my equities? If deflation is on the horizon, that would be the smart move?

#9 Ray Skunk on 12.10.13 at 9:32 pm

Got my hydro bill today. 50% more than usual, including July – the height of the AC season.

Coincidentally, I also know why hydro charges in Ontario will be going up 42% in the next three years; not only do we have the green energy white elephant, but the A-G is reporting sheer lunacy over at OPG with a fantastic gift of staggering compensation and pension obligations (with shortfalls) nicely tied up with a nepotism ribbon.

My hydro bill for my 600sqft rented shoebox in the sky is now $50 a month (excluding heat pump rip-off, which is the landlord’s to cry over).

Good luck to all those who have stretched themselves micron-thin sinking $800k into their hydro-baseboard-heated Leslieville shacks with breezy windows and drafty doors. $200+ a month for hydro is coming your way, just in time for mortgage renewal at a higher rate.

It’s going to be painful alright.

#10 The Patient on 12.10.13 at 9:33 pm

“A drop in employed people means less consumer spending, which brings fewer deals at the Chrysler store.”
=================

Wait a sec there, Garth: wouldn’t fewer people kicking the tires bring *more* deals?

#11 Godth on 12.10.13 at 9:33 pm

Meet my English cousin…
http://www.youtube.com/watch?v=rxeEPNHKJ2k

http://www.youtube.com/watch?v=kyTPb-yOMcw

#12 pinstripe on 12.10.13 at 9:34 pm

Deflation is very good for the person will NO debt and many big $ bills stuffed in the mattress. Cash is KING.

QE was meaningful as a one shot exercise. The politicians abused the exercise. Kicking the can down the road will make a bigger and meaner consequence with each kick.

#13 econimictsunami on 12.10.13 at 9:35 pm

G:

I always knew you had just a tad of closet doomer in you.

If I look really closely at the tangle of Christmas lights, I think I see a cat…

The Most Important Economic Stories of 2013—in 40 Graphs…

http://www.theatlantic.com/business/archive/2013/12/the-most-important-economic-stories-of-2013-in-40-graphs/282193/

#14 Porsche on 12.10.13 at 9:36 pm

Don’t be buying any Kellogg’s Corn Flakes as of today… them union workers are a pissed off bunch and probably pissing and horking in them flakes.

#15 crackservative on 12.10.13 at 9:40 pm

Take a bow crack head crackservatives

#16 Smoking Man on 12.10.13 at 9:40 pm

Inappropriate behavior

So a Toronto school board gets it’s wrist slapped by the Ontario Liberals, apparently they spent an extra million on bonuses and salaries during a wage freeze.

No body asking for the loot back. No one getting fined or even chirped by the MSM

Just a teacher voice board someone going, that was inappropriate behavior.

Rob Ford suggested during an interview with Lord Black that a Toronto Star reporter creping out side his back yard may have been watching and photographing his kids, which made him think the guy was into kids. Ford didn’t use the P word

What would you think if your kids are in the yard and a creepy dude with a girly voice is hanging around watching them, cell phone built in camera.

Well the outrage from MSM again, the nerve of fat boy insinuating that. Star reporter might be into kids, reporter thinking about a civil suit.

Ha on what. I’m thinking.

I heard the reporter on the radio. Complete and total girly voice.
Not one octave of man in his tone.
His feelings are hurt. WTF

Lets face it kids, no room for testosterone in the city, girly men rule the streets.

3 Firemen lose there jobs cause they tweed some lines for tv cartons that woman found offensive. Guys who run into burning buildings.

A cop gets 45 days for beating the crap out of a Adam Nobody at the G20 but keeps his Job. Good thing he didn’t tweet he has a fantasy about spanking a hot chic.

Look at all the outrage I caused on here when I used the word feminized to describe girly men. I was schooled by the lady dogs on here, apparently the correct terminology Emasculated.

Screw that inappropriate behavior. That’s for Girly Men

Girly Men are 100% Feminized !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

They never had the nuts to be removed to be considered emasculated.

LONG LIVE ROB FORD

#17 TurnerNation on 12.10.13 at 9:47 pm

Thoughts on XRE.TO, TLT.US:

“You’ve been coolin’, baby, I’ve been droolin’
All the good times I’ve been mis-usin'”

#18 Godth on 12.10.13 at 9:48 pm

Why we’re not as smart as we think we are
http://www.marcgunther.com/why-were-not-as-smart-as-we-think-we-are/

#19 Bill Gable on 12.10.13 at 9:49 pm

In the last 5 years, Canadian Radio has shed 3700 jobs. Here in Vancouver, CORUS Radio decides to hire Australians to fill the jobs.
Worse, is the reaction from fellow broadcasters….snide comments, et al.

Think of the pain of the thousands of people that bled for the Stations they worked for and they get turfed and the Big Six (*only 6 companies own all media in Canada, bigger than a breadbox), and then they hire foreigners!

Mr. Turner, you know media intimately and so I am sure you are shaking your head. Talk about deflation?

It used to be, 30 years ago – you could work part time on the Radio in a major market like Vancouver and Toronto, and still feed your Family.

Now? There are nothing but Mcjobs…and those STILL working, have been giving new meaning to schadenfreude.

This is going to be a bleak Christmas for many in Media and I am VERY glad that I am retired, and a certain bearded, Harley driving, investment wizard, is taking care of my Family.

You have a good Holiday – and I hope you don’t have to absorb a job loss, in your Family.

For those in media that sneer at these losses – look up the word KHARMA – because what goes around, comes around.

The best of the Holidays to those among us that give a d**n about our fellow Canadians.

#20 TurnerNation on 12.10.13 at 9:50 pm

Must be a picture of Smoking man’s bung. Sign, Gone Bozzing enjoy the lights.

Did the 501 Queen St. Streetcar predict all?
Each ones’ sign reads: 501 Long Branch.

#21 pathcontrolmonk on 12.10.13 at 9:52 pm

Are you giving away any of your books to loyal blogdogs for Christmas this year?

Don’t be so damn cheap. — Garth

#22 Not 1st on 12.10.13 at 9:52 pm

How come no stories of developers going under or realtors being laid off or demand for trades falling off?

#23 [email protected] on 12.10.13 at 9:53 pm

just don’t buy cereal. eat oatmeal, many things are healthier than cereal. cereal is a product of the modern world.

#24 ILoveCharts on 12.10.13 at 10:00 pm

We’re losing some low-value jobs but we’re making up for it in the tech sector. Times change. People don’t eat cereal anymore. They eat yogurt while playing with their smart phone apps.

#25 HDJ on 12.10.13 at 10:11 pm

Rough transcription from Tuesday 10 CBC News. Jeffery Olin, Vision Capital: “In Vancouver it’s been money laundering since Expo 86, first from Hong Kong and then from mainland China. When it stops, the condo market will burst.
http://www.cbc.ca/player/News/Business/ID/2423666274/

#26 Bob Rice on 12.10.13 at 10:14 pm

Japan’s in a recession? Their unemployment rate is 4%.

I’ll tell you why we have 7% unemployment – a lot of people don’t want to work, or at least won’t accept jobs that pay less than what they think their labour’s worth.. Japanese people are proud and hard working. Too many Canadians are not. This is a fact. I work around teens; many are lazy entitled spoiled asses and I tell them that the gravy is going to dry up soon..

#27 Ripped on 12.10.13 at 10:17 pm

#24 ILoveCharts

We’re losing some low-value jobs but we’re making up for it in the tech sector

…………………………………………………………………….

Good luck competing with immigrants in the tech sector.

You are now a minority there.

#28 Not 1st on 12.10.13 at 10:20 pm

When I am in the store I see more and more people skipping the aisles with heavily processed packaged over salted over sweetened foods. Cereal, soup, frozen dinners are all what’s killing us. Heinz found out the hard way the next generation doesn’t fall for 1960s era advertising.

#29 Nemesis on 12.10.13 at 10:22 pm

@HommeDuTabagisme/#16…

If you’re ever going to mature as AWriter…

You’ll have to learn how to, “Kill your Darlings.”

That would include ‘FatMan’ infatuations. So to speak…

#30 gladiator on 12.10.13 at 10:24 pm

1. Hundreds of billions pumped into the world economy on monthly basis everywhere – US, Europe, Japan, China and with no effect – where is all this money going?

2. Dropping labour participation rate keeps the officially-estimated unemployment rate artificially low. Otherwise, it would be at around 15% and had been there for years now.

3. After the GFC (great financial crisis) of 2008-2009, the food stamp program in the US is hiding the true extent of the disaster in which the land of the free is. If people stood in lines to soup kitches like they did back in the 30s, we’d be shocked to see every 6th US person (citizen or not) waiting for food on a sidewalk. Over 50 million on food stamps and rising – with all the stimulus currently in place. Funny, but good news are now scary to financial markets because that would mean tapering the stimulus. Basically, Wall Street is a stimulus junkie and doesn’t perform its original purpose of providing liquidity to markets, of serving as a source of financing for companies’ new projects, of being a place for hedging transactions of commodity producers, etc. The only thing that Wall Street keeps its eyes on is government money aka the stimulus. This doesn’t instill confidence in the US, does it, Garth?

#31 Count Flipalot on 12.10.13 at 10:27 pm

At #24 ILoveCharts : We’re losing some low-value jobs but we’re making up for it in the tech sector. Times change.

Are you kidding ?, it’s manufacturing and these so called low-value jobs that keep most people employed, especially for small Canadian communities.

The tech sector employ remarkably few people, and it will only get worse in the future as the technology improves and displaces more people through automation.

As an example : from “The World in 2014” Economist magazine page 34, “With a market cap of $290 billion, Google is about six times bigger than GM but employs only around a fifth as many workers.”

#32 penguin on 12.10.13 at 10:28 pm

My US based company disbanded the entire IT department last week in our GTA office resulting in 20 jobs lost including myself. That coupled with another round of layoffs earlier in the year and consistent with an average of two rounds of job cuts per year since 2008. To put that in perspective in 2007 our global workforce was 6,500 but now under 3,000. That is consistent with our GTA office which had over 600 employees in 2007 but under 300 now. Only because of the hokey magic of Fresh Start Accounting this company was able to stay solvent in 2008 and actually makes decent profits now.

Yesterday I found out a colleague recently purchased a huge McMansion with a massive mortgage. She has not managed to sell her current house yet and the new house closes end of January. Godspeed to her. So glad I resisted the temptation of upgrading to a bigger house where I am outnumbered 50-1 from people (the herd) who think I was crazy for not upgrading. This blog is my only reassurance I am doing the right thing by waiting for the inevitable housing correction. Thanks Garth for the great work from a former gold bug/GIC holder transformed by your pathetic blog.

#33 Smoking Man on 12.10.13 at 10:28 pm

Business is afraid of the liberals, you risk, you invest, you hire slaves.

No indexed pensions for Smoking Men.

Balls bets and fingers crossed hoping for return. Then when you see what the wack jobs at Queens Park are doing, protected by the tree huggers at the star and most MSN.

Why risk anything, bad enough fighting other smoking men for market share when people void of IQs legislate themselves your loot.

Star now lending a hand, blaming high cost of power on OPG.

Unbelievable….

This is going to be worse than 2008.

Unless we get a guy like Ford at Queens Park. There will be a fire sale on bikes and yoga mats.

Smoking Men will be fine blogging from the islands.

#34 NorthOf49 on 12.10.13 at 10:30 pm

Cereal is just too damn expensive for what you get. I’m always looking for the healthier stuff but I ain’t paying $7 a box for it. So I make steel-cut oatmeal now, or Irish oatmeal as some call it. If you’ve never had it, you don’t know what you’re missing. Loblaw used to carry it but I haven’t seen it in a while. I get it at Bulk Barn cheap, a couple of bucks worth lasts 2 weeks. Its from Saskatchewan so its not as good as the stuff from Ireland but its also not $8 bucks a tin. Aside from the great taste and texture its got tons of soluble fibre so it sucks the cholesterol right out of your system. And get this, it also boosts testosterone, need I say more!

#35 Freedom First on 12.10.13 at 10:31 pm

Like WB says “Leverage is fun on the way up, on the way down, not so much”. In our consumerist society, I believe spending money is an addiction. Looks like few can be debt free, and maintain the discipline to keep cash always at the ready to take advantage of good deals. I have always believed that a certain amount of cash is very good for my peace of mind, and does pay huge dividends when there is blood in the streets. I also like another WB quote: “Cash is like oxygen, you always want plenty of it around”. Diversify, balance, liquidity, cash, income streams, and no debt works for me. Find your own comfort level. Garth gives a very good Template for the %’s of distribution to have in each asset class. I think if you always have 10% cash instead of 5%, Garth will forgive you. A little variation won’t hurt you from Garth’s formula, but a lot of variation will take you DOWN, nice title Garth, very apt.

#36 zee on 12.10.13 at 10:31 pm

hi Garth,

House prices are not coming down in gta because a few lost their jobs in london. Until there is major layoffs in gta or significant higher mortgage rates, there will be no correction in the housing market in the gta.

#37 TRON on 12.10.13 at 10:33 pm

#19 Bill Gable

Media is changing so fast you can’t even see it change. Radio, TV and newspapers are dying. Why? Because people have alternatives that corporations can not control content for the sake of advertisers .

Today I get 70% of my entertainment, information, research and news from the internet. Over the next few years it will be 100%.

One of my kids will graduate from the Radio and Television program at Ryerson in a year. They know their future is in blogs, Netflix, HBO and streaming media.

Too bad all those folks lost their jobs but so did so many others who’ve worked in this changing and exciting world we live in.

#38 Ripped on 12.10.13 at 10:36 pm

#31 Count Flipalot

As an example : from “The World in 2014″ Economist magazine page 34, “With a market cap of $290 billion, Google is about six times bigger than GM but employs only around a fifth as many workers.”
……………………………………………………………………..

All high tech things, chips, circuit boards, telecom, routers, etc, etc.. are made in China.

Google and all other tech companies use made in China

#39 Old Man on 12.10.13 at 10:37 pm

Just a memo about all these people being thrown out of work, as they are going to get a shock about the status of their pension funds concerning options, as they have no clue what they will be facing. It is called one hell of a mess, and they will be freaking out.

#40 Ripped on 12.10.13 at 10:39 pm

Kellogg workers weren’t low paid

They were union workers and making good money

Hence Kellogg goes to Thailand where they get to keep more of the profits.

#41 NoName on 12.10.13 at 10:43 pm

Sign of the times

2015 ford Mustang deflated down to 4cyl. engine again , but this time with whooping 300+hp. I guess market and growth is elsewhere not on this continent…

http://youtu.be/G2jRxHfrvqk

#42 Tiger on 12.10.13 at 10:47 pm

Smoking man !
During a race, smoking man comes in, in first place!
Thing is there was only 1 in the race:)
Yes you are a winner fur shure!
Yup

#43 Love this Blog on 12.10.13 at 10:47 pm

Garth, a small correction.

PCS indeed cut 1045 jobs, but only 440 of them were in Saskatchewan.

240 jobs lost at PCS Lanigan, 165 jobs lost at PCS Cory (including a relative and a friend), 25 jobs lost at head offcie and 10 jobs at PCS Patience lake.
Still, this has huge ramifications. The typical mining job , at a mine not in an office, pays 80-100G per year.

Those people won’t find replacement jobs of that caliber in the small communities they live in.

For example, Town of Lanigan has 70 residents who lost jobs there. Lanigan is about 500 people.

So that is likely 200-220 people who may leave that community., as there are no comparable jobs available there.

There are currently 24 houses for sale in Lanigan.

I will update in a couple months, using MLS.

It is going to be very, very painful.

#44 Love this Blog on 12.10.13 at 10:48 pm

Correction to the above Garth. Lanigan is about 1500 people, mistyped.

#45 High Plains Drifter on 12.10.13 at 10:52 pm

On a cold night in Edmonton, I look out over the river and can see a couple of refineries, smoking up a storm. Rumour has it, the owners are thinking about going all in. The Encana thing is being spoke of as a labour shuffle. Any body that sells cheap around here most likely couldn’t tell a “Mexican standoff” if they were in the middle of one. When Redford gets back from Africa, will we know more?

#46 world view on 12.10.13 at 10:53 pm

The view that Japanese deflation was bad for their economy does not seem accurate. The yen soared from 135 to 80 per USD, until Abe decided to destroy it. During this time, there was hardly any job loss (partly due to the work-culture). Despite all the deflation talk for decade and half, the japanese unemployment rate is about 5%. The Japanese consumer had more for the same yen and prices of good fell thereby increasing the purchasing power. Sure asset prices fell and companies’ profits were lower. But If economy is to serve the people , then the deflation actually helped everyone especially the old savers. The only big problem in Japan is the stimulus (borrowing) that Japanese govt embarked, supported by BoJ taking bond prices to extremely high levels. And Now the Japanese are targeting 2% inflation. With debt levels 225% of GDP What would happen to the old savers who hold JGBs through institutions. They also face a Current account deficit now that will make it harder to finance the govt debt. Seems like killing the currency only caused essential prices (energy etc) to rise for Japanese without creating any significant growth.

Deflation is a strong medicine for distorting the economy. IT is steep and kills the indebted and over-extended very fast. And then the economy grows again within a few years, if the government does not fight it. Inflation is a slow poison. No policy should encourage inflation or fight deflation.

#47 economictsunami on 12.10.13 at 10:54 pm

#26 Bob Rice:

“Japan’s in a recession? Their unemployment rate is 4%’

Much like several European countries, it was and continues to be rather tough to shed Japanese workers.

Labour Reform is one of the so called 3 arrows in Abenomics quiver.

Your take on young people being lazy must have came right out of a speech once given by Prime Minister Bennett at a leadership convention…

#48 John in Mtl on 12.10.13 at 10:55 pm

“A drop in employed people means less consumer spending, which brings fewer deals at the Chrysler store.”

Oh no, they’ll have to drive Garth’s favourite car brand, Kias :)

#49 Julia on 12.10.13 at 11:00 pm

SM… At least the nice girly feminized emasculated cops aren’t beating the crap out of people on the street… Just saying…

In other news… As condos go up in TO, these areas need more shopping, but what’s happening? Shopping centres and grocery stores are closing to make room for, you guessed it, more condos. Our No Frills closed in the summer and my friend in the west end just told me her Value Mart is the site of a new development. This city is out of control.

#50 Mister Obvious on 12.10.13 at 11:00 pm

I know a lot of folks who, if they thought about economics at all, would probably welcome deflation because… like… stuff will cost less, eh?

They haven’t the remotest clue. To them inflation of any kind is just a side effect of human greed and they fail to recognize controlled inflation as an essential ingredient of a healthy capitalist economy. You know. The kind of economy we Canadians are privileged to enjoy (except, of course, the ‘healthy’ part).

This much is certain: there is no good deflation. Maybe read that again.

Where does stuff come from? Is it manufactured and distributed by the greedy captains of industry who aspire to perpetually gouge the working class. Or is it produced mostly by ordinary people willing to take large capital risks to supply goods and services to a fickle marketplace?

And once one has overcome great odds to establish a successful business should one be willing to get involved in a race to the bottom selling things for more than they cost to make while simultaneously paying out historical wage packages designed over decades of inflationary times? No wonder they just move operations to Southeast Asia or even Kentucky where there is far less labor militancy these days

People need to think carefully about such things. But as tonight’s post says, there are few Canadians among us who have ever seen the nasty opposite side of the inflation coin.

You need to go back one or two generation before the boomers to find any witnesses at all. But those who are still with us are old and tired with little desire to talk about bad old memories.

That is a lesson in itself.

#51 Rural Rick on 12.10.13 at 11:01 pm

LONG LIVE ROB FORD
Seriously?
We all know that’s not going to happen. I’m betting heart attack. Anybody want to take motor vehicle accident? Cerebral haemorrhage? How about found dead in a hotel on Jarvis St? He is a lousy mayor and those who support him are seriously deluded. Yup sounds like the big smoke will re-elect Rob.

#52 Smoking Man on 12.10.13 at 11:07 pm

#29 Nemesis on 12.10.13 at 10:22 pmIf you’re ever going to mature as AWriter…

You’ll have to learn how to, “Kill your Darlings.”

That would include ‘FatMan’ infatuations. So to speak
…………….

Ha, he don’t need my help. Actually don’t like him that much. But he pisses of the folks who through ignorance are destroying everyone’s future.

And they don’t have the foresight to see it.

The fact he so easily upsets them.

Well I like that. I like that a lot.

#53 Fifty on 12.10.13 at 11:09 pm

I took a fifty percent pay cut in October 2012, a day which for me completely changed my life outlook from “rosy” to “murky”.

#54 Lieberals do it again... on 12.10.13 at 11:13 pm

Unreal how this party keeps the lies and wasted spending going…. Ontario will be like Greece / Spain soon….

http://www.torontosun.com/2013/12/10/auditor-generals-report-to-take-aim-at-ontario-power-generation

#55 Ralph Cramdown on 12.10.13 at 11:14 pm

#31 Count Flipalot — “As an example : from “The World in 2014″ Economist magazine page 34, “With a market cap of $290 billion, Google is about six times bigger than GM but employs only around a fifth as many workers.”

Without arguing the broader point, Google probably isn’t representative of the tech industry as a whole, nor is GM’s market cap representative. Ford, Honda, Daimler, BMW, Volkswagen and Toyota are all bigger than the General by market cap.

#56 Vamanos Pest on 12.10.13 at 11:15 pm

My younger brother found out today that the house that he rents is being foreclosed.

Get used to this story: the owner/landlord is in financial crisis, while the renter, well, he just moves out.

#57 Nick on 12.10.13 at 11:15 pm

With all these manufacturing jobs going overseas I thought I would see if you could put a plug on your blog for the TFW protests happening in Edmonton Alberta.

It’s become an epidemic, well paying oil / gas construction jobs going directly overseas. With new legislation these jobs don’t even need to be advertised locally.
It used to be they had to advertise for 180 days, then about a year ago it was changed to 3 days and now direct overseas hiring.

The main objective is to lower our wages.
The southern states have had several of these TFW programs destroy their wages throughout history and we aim to stop that happening here.
Next rally is on dec . 20th and we have a half page ad running in the Edmonton sun next week.

https://m.facebook.com/canadianemploymentfirst?__user=507090466

Thanks,
Nick

#58 erick on 12.10.13 at 11:16 pm

At #24 Count Flipalot

Market cap does not matter.
It’s more the revenue per employee: 39 B for GM versus 15 B for Google (per quarter), so Google is half of GM in revenues and a fifth in the number of employes – not a bad ratio after all in terms of providing jobs compared to more traditional industries (well they bought Motorla which is not very efficient in terms of revenue generated per employee compared to the rest of Google)

#59 Hicksville Alberta on 12.10.13 at 11:17 pm

Garth there are a few more you can add to your list (see http://www.dailyjobcuts.com )

Blackberry – another 80 today
Royal Bank – 1,129 since July ( see December 7th)
Big Lots/ Liquidation World – All 75 or so stores and Canadian operations by February 2014. They lost over $38 million on these so far)

Guess it really doesn’t matter though as “They” can just keep adding more and more and more Government jobs at all levels as they are doing now and forever and we can just keep supporting the “Grift”.

I think i would take a bullet before i got back in business in this country again.

#60 JohnL on 12.10.13 at 11:17 pm

Hey come on now, everyday low prices, price roll backs, deflation’s what it’s (Walmart’s) all about who doesn’t like that.
But have no fear, I understand throwing money from helicopters is a sure fire way to beat deflation. Hope some falls in my back yard!

#61 Nemesis on 12.10.13 at 11:19 pm

Parables don’t go Deeper than this…

http://youtu.be/c3uatcJqt54

[NoteToGT: A refreshing ChangeOfPace for AnthonyP.]

#62 Spongerob on 12.10.13 at 11:25 pm

Great post Garth. The world is trending towards deflation and everyone seems to have made a one way bet on inflation. Something has to give.

#63 Basil Fawlty on 12.10.13 at 11:26 pm

All deflation is not bad, if one describes it as falling prices. Electronics and computers have fallen dramatically in price based on technological improvements. In regards to real estate, we created a bubble through direct government policies of interest rates below the rate of inflation and a massive Harper ordered increase in the CMHC loan book. If prices were to fall back to the mean, is it really deflation, when the increases were just a massive misallocation of capital?
Just asking.

#64 Ralph Cramdown on 12.10.13 at 11:31 pm

#46 world view — “The view that Japanese deflation was bad for their economy does not seem accurate.”

On the other hand, you could look at the data.
http://research.stlouisfed.org/fred2/graph/?g=pRU

#65 Vandamcouver on 12.10.13 at 11:33 pm

Garth what gives? Somewhat despondent tone to today’s post… What’s the solution? Surely if the majority of the Western world is looking not so great, there must be an upshot somewhere? Some hope?

#66 Tiger on 12.10.13 at 11:35 pm

Just a note,when you think your the best!
You are a dinosaur!
Never stop learning,ore you will become a smoking man dinosaur !

#67 Drill Baby Drill on 12.10.13 at 11:36 pm

Garth is right we are reaching critical mass in Canada EH?! I have children who are 27 and 26 yrs old and I do not see them being able to afford the same standard of living that I do. As a matter of fact I do not dare bring this up for fear of a family feud. We are in for serious economic retrenchment in Canuckistan and even though I am an aware individual most do not see. I am worried er in Calgary.

#68 OlderbutWiser on 12.10.13 at 11:37 pm

The company I work for is a Canadian owned multinational corporation and has just let over 4,000 employees go. The word from the CEO was to replace high priced help (code for Boomers) with younger workers that cost half the price. The company was willing to take the short term cost for the long term benefits.

This company had already outsourced most of the accounting functions to India. I am seeing this everywhere including at our advisors (legal firms; accounting firms that have outsourced their compliance work to emerging market economies)

I have no idea where the younger generation of today is going to find entry level positions at the corporate level.

The devastation to individuals is heartbreaking to see. I get a sick feeling in my stomach as I watch those around me get the axe. I also thank my lucky stars that I went into a field (I am the VP of tax) that cannot easily be outsourced to an emerging market economy.

All those with “secure” positions, count your blessings and say a prayer for those less fortunate at this time of year.

#69 not 1st on 12.11.13 at 12:02 am

#45 High Plains Drifter on 12.10.13 at 10:52 pm

—-

I think the powers that be realize the writing is on the wall. Either we get some dominant infrastructure in place and discount our product at the oil hubs of the world that most of that in oil sands is going to stay in-situ permanently. They are likely ramping up billions to make this happen. Its a bit bet to be sure.

If we could have slipped Keystone through 5 years ago like was planned and had a pipeline to the coast underway, we would be made in the shade. But that scheme was blocked and U.S. shale, Iraq, Iran and even China shale and renewables and fuel efficiencies are about to offset a lot of exported crude.

#70 ryan on 12.11.13 at 12:05 am

A little off topic but those 2.5 billion dollar gas plant cancellations are just the start. Apparently another company just got the ok to sue Ontario for a cancelled wind turbine. This is just the start many more suits to come I’m sure. So this is why McGuinty ran off into the sunset.
http://www.ottawacitizen.com/life/Wind+power+company+Trillium+gets+Ontario/9166322/story.html

#71 Old Man on 12.11.13 at 12:09 am

#56 Vamanos Pest – I am sure you mean a P.O.S. and if your younger brother has a lease document have him try to register such against the title to mess things up a bit, as he might be paid off for some green.

#72 experienced.optimist on 12.11.13 at 12:12 am

Garth:

New writer to your blog but a long time reader. Always enjoyable to see the many diversified opinions on your site and also on the other news sites I read. We are a varied lot are we not. I have been thinking of writing in for a while, but you finally got around to using the big “D” (Deflation) word that has always interested me since 2008. Although you just touched on it today, hopefully you and your readers will have more discussions on this issue as time moves forward. There were some insightful comments expressed today. Yes , the eventual melting down of house prices will be a part of this but so will a lot of other assets be affected, including the human cost for us all. I am a boomer whose parents came of age during the 1930’s depression and some attitudes of my parents are still with me.

I especially enjoyed the “Love this Blog” report as I live in the town he reported on. That person is pretty well spot on. One just has to research a bit of history into the the expansions and the bust of the potash industry in the world to see that expectations never met demand , especially when the cartels collapsed, and the deflationary downward spiral of potash prices world wide. Maybe the cartels will gain the upper hand again , but the damage is done here for now.

Concerning the QE that has been going on in the United States and now possibly going expand into Europe next year, I believe that Ben Bernanke has studied the great depression of the 1930’s and is probably doing his darndest to prevent another recurrence.Whether it works or not, only hindsight will ever tell us.

#73 eddy on 12.11.13 at 12:13 am

if you want a secure job try Toronto city hall, you know,
the place where Freemasons, freeloaders, and freebasers work hand in hand with their relatives

#74 heineken on 12.11.13 at 12:19 am

everyone on this site is being fed a line of bull.
wheres the deflation? computers, tvs, crap from wallmart.
my car insurance went up, my home insurance went up, my food bill went up, gas keeps going up, my heating and cooling bills up, property taxes up, car repairs and mtce up, a cup of coffee at starbucks up, good luck trying to hire a tradesperson, my water bills up, lawyers fees up, dinner costs up, ttc fares up, a cold beer at the local pub up, buying a lousy Toronto sun is up, maple leaf tickets up, rock concerts up , cdn wonderland tickets up, hotel rooms up, …….

I asked my wife if our thanksgiving turkey dinner went up, she laughed at me. yet that same day, I read an article put out by Ontario gov’t agriculture division stating that the cost of a thanksgiving meal had gone down by 4%. what a pile of bull shit.
the gov’t propaganda is in full swing, lying and conditioning sheep.
wake up, inflation is here! don’t believe the deflation bull.

#75 heineken on 12.11.13 at 12:27 am

#73 eddy on 12.11.13 at 12:13 am
if you want a secure job try Toronto city hall, you know,
the place where Freemasons, freeloaders, and freebasers work hand in hand with their relatives
_____________________________________

interesting comment.
unfortunately OPG is rampant with freemasons. by joining this cult, the masonic member is quickly promoted into supervision. he is a controlled individual.
the the teachers and administration staff with the Toronto board of education is also top-heavy with masons.
what a surpise all the gov’t institutions are freemasons.

you want a job join the lodge!

#76 Bikini Bottom on 12.11.13 at 12:46 am

#34 @NorthOf49
I definitely heart me some oatmeal. Perhaps the mushy stuff is the secret sauce for combatting those “FEMINIZED MALES” SM is always casting aspersions on.

Cornflakes, on the other hand; Kellogg’s cure for overly libidinous individuals.

#77 fisheman on 12.11.13 at 12:54 am

Hey Old Man #71. That’s a good one. A lease don’t mean “dick” unless it’s registered. A trick us old commercial R/E players learned, “probably the hard way”,

#78 not 1st on 12.11.13 at 12:54 am

I think that Garth will discover that his exuberance for global economic recovery will have been misplaced as we enter the next couple years. Too many inefficiencies in the system that will correct themselves including the stimulus experiments around the globe.

The U.S. may even stabilize but somewhere in the 1.5-2.0 GDP range with QE of some form always in the background. A full one third of the U.S. population is on some sort of gov’t assistance such as welfare or food stamps. They aren’t going to be leading any sort of recovery.

#79 As Is Old Man on 12.11.13 at 1:16 am

Swedish Housing Surges to Unsafe Value as Debt Soars

http://tinyurl.com/or9l69k

#80 not 1st on 12.11.13 at 1:21 am

Manufacturing….it ain’t coming back, at least not like we have known.

Read on;

http://www.newsweek.com/now-you-can-3-d-print-your-guns-metal-223860

#81 rory on 12.11.13 at 1:25 am

Since this is a real estate blog I thought I would mention that you really never own your home in Canada. The government can expropriate it in so many ways including by you not paying your ridiculously high and outrageous and continually increasing property taxes. Well to bad and so sad for you the gov’t will say. But the city workers that shut off your power, turned off your water, will be sad for you as they force you out but they will still collect their overtly generous pay packs while their politicians use force and coercion to get even more money into the their coffers – a big circle jerk. And the teachers unions will still be saying it’s for the kids. Welcome to deflation government style. Too bad, so sad private citizen.

Demand an end to public service unions. Demand an end to unaffordable public service pension plans. Demand smaller gov’t. Demand an end to political favors and all subsidies. Think local, take responsibility. Don’t be a sheeple. And please don’t think Trudeau is going to be anything but a disaster for this country. Think an Obama – notice the difference. Me neither.

Yes, this is how I really feel.

#82 conan on 12.11.13 at 1:26 am

Hello Garth, Are you currently positive or negative on corporate bond funds? Also, what effect does this deflation effect that you are predicting have on government bond funds and real return bond funds?

Thanks

bard

#83 SmallTownTokenBrown on 12.11.13 at 1:36 am

#70 ryan

Don’t worry, Conservatives will have the same issue with the cancelling of public transportation contracts under Rob Ford.

#84 Hollywood on 12.11.13 at 1:41 am

#26 Bob Rice
“Japanese people are proud and hard working. Too many Canadians are not. This is a fact. I work around teens; many are lazy entitled spoiled asses and I tell them that the gravy is going to dry up soon”
Although, I “somewhat” agree with your statement. The reality is that has been mentioned probably in your time as a teen ager and mine. I recall coming out of Uni in the early 90’s in a recession and that was the typical comment. Overall presently in 2013, there are more issues going on in Canada’s economy – lack of good job creation, historically a low job participation rates, and also it takes the average worker almost to the end of their EI payouts to find a job in comparison to 2007 (approx. 15 weeks according to Globe and Mail Article). I think majority of people would like to find a job quickly. So yes, you do have “some” valid points on the young generation. However, I think there are bigger macroeconomic issues that are in play at the moment. We were all considered “lazy” teens during our time. That has never changed.

#85 straight 6 on 12.11.13 at 1:43 am

Kellogg’s… Thailand??
I’m out.

I’m going back to bacon n eggs.
at least there’s no shortage of pigs in this country.

#86 takla on 12.11.13 at 1:58 am

G your moms string story brought back a story my dad told me when I was young about life on the prairies in the dirty 30’s,as dirt poor farmers his dad would squat near farms when he landed a seasonal job,and build their little one room shack and every yr or two they;d have to move along and his dad and the kids would have to dismantle the little shack and move it to the next farm where he could get seasonal work.Every nail was pulled and reused, had to be accounted for as well as every board carefully disassembled,fireplace rebuilt!There were 11 kids in that family and the family home was moved @ least 5-6 times before he left home to work @15!!People today don’t know the meaning of hardship,but its comeing!!

#87 Waterloo Resident on 12.11.13 at 2:45 am

All this government stimulus has not been going into the everyday economy. Instead it’s gone to the big banks and most of that money has been funneled into the stock market. There is talk that due to the great job numbers in the US, there might be a fed tapering as early as December 20. Most economists think it will be in January. Whatever the case; if the FED’s Q.E. is stopped, you can easily see the stock market sink fifteen to twenty percent in just a month or two. That’s what’s scary, something most people don’t seem to know about.

#88 Chaostrology on 12.11.13 at 3:17 am

Apollo H. Christ…what a mess. A guys takes a year off and it all goes to Mars on a roller skate.

The Word of the Day is delusional. The 99% will do what ever their masters want them to do, because the 1% creates the propaganda and controls the distribution of the message.

Tonite, there are 1 million Ukrainians(they live here on earth) protesting on the streets of Kiev. Did we get anything about it on the National? on Global? or Those other guys? No. It’ll wait until tomorrow. Today, they are too busy immortalizing a guy that they wanted to crucify 40 years ago. He’s like Apollo H. Christ in the 21st century, soon this guy will become a deity for the masses to pray to. It’s all about control.

The Uranian revolution continues(every where but here), Neptunian delusion is gushing out from the media like a blown oil well in the Gulf of Mexico and famous people and corporations continue to die and by extension kill others, literally and figuratively from the power of the death planet, Pluto.

You think that you’re in control…you’re not…

I must tell y’all that spent much of this past year in a Hospice helping other human being on their death beds.
Un-categorically…not one of these people wanted to buy another house…they just wanted another bowl of ice cream before they cashed in their chips.

Seriously.

Anyhoo…Happy Mandellamas…and Happy Auld Lang Syne…we’ll never see the like of those times again.

#89 Canadian Watchdog on 12.11.13 at 3:28 am

Check out Australia's investor versus first time home buyer loan approvals. Chart

Now you know why Canadian organized real estate doesn't want to release data on foreign purchases.

#90 alf on 12.11.13 at 4:03 am

Ironic!

Smoking man, you can blame the emasculation of north american men on John Harvey Kellogg.

#91 rosie on 12.11.13 at 5:18 am

victim of the finical down turn, lost job of not fault of there own in high tech manufacturing, qualifies for unemployment, has a couple month s left of benefits get job offer in different province, moves to new job to keep generation have not lifestyle. but has many months of rental lease left even after ei beniftis run out. landlord wont allow victim to break lease, cra only allows the cost of breaking a lease tax deductible. but if one cant break the lease what should one do.

#92 rosie on 12.11.13 at 5:28 am

hopefully someone smarter on here has advice for this unfortunate everyday Joe. this Joe who cant afford two rents on one income, and still eat.

#93 Observer on 12.11.13 at 5:49 am

Its all common sense. The problem with Canadian is they don’t have a clue about accounting and how businesses are run

Its a no brainer, Higher real estate = Higher property taxes = Higher Lease and rental cost = meaning higher fix cost

Expenses : rental, hydro, employees.

Yeah us whiners complain for higher wages because housing and expenses are too high. Well who caused that in the first place. Take a good look in the mirror and our government who was too weak to take the hit back in 2008. Instead they super charged the stimulus leaving us with a massive hangover.

problem is Once Companies leave and get established. they may never come back. Look at Detroit. Low real estate government is enticing companies to come back. But “NO-can-do”. Some have come back but not much.

Oh about our job number we created part time jobs. Probably because FTE with decent wages got canned and now work part time as walmart greeters!

#94 Brian Romanchuk on 12.11.13 at 8:00 am

Japan has not been doing too badly, when you keep in mind the context. Yes, it’s been rough for equity investors. But the level of the CPI is roughly where it was 15 years ago; hardly deflationary.

But unlike North America, the average person has seen a rising real wage. GDP growth has been held down as a result of demographics, and the fact that they used to have 6 day work weeks as late as the early 1990s. The transition to a 5 day workweek cuts hours worked, and hence total output.

#95 Raven on 12.11.13 at 8:38 am

Deflation deflation is coming for our Nation!

Barnanke’s Doctural Thesis was on the “cause” of The Great Depression. His opinion was that the Depression was caused by the removal of stimulus in 1933.

I wrote to Barnanke in 2010 ( no reply to date ) as to his opinion on if the Depression was caused by the creative destruction associated with deflation, or the unwinding of stimulus? Can economies, re-flate themselves once trapped in a deflationary spiral? Did QE only prolong the enivitable deflation?

I think the jury is still out on that as we have yet to see the full effects of long term Q.E,and if this is truly, the path twords sustainable long term growth. Only time will tell if our little Kenyesian experiment will yield its promised true rewards.

” Learn from the past, set vivid detailed goals for the future and live in the only moment of time over which you have any control: NOW! “

#96 economictsunami on 12.11.13 at 8:55 am

For far too long consumers, businesses and governments at all levels, have put off making the tough decisions.

Our lifestyles have been mainly built on the quicksand of loosening credit standards and debt driven over consumption.

The Great Financial Crisis should have awoken everyone to the fact that the Emperor has no clothes but our leaders responded (as in the past) by lowering rates further and making credit even easier to access; then ominously warning us of the possible perils of both their actions and our blind reaction.

Many have hit the proverbial credit wall and will now have to deal with the consequences of our fool hearty debt focused behaviour…

Weak demand to blame for productivity slump, research shows:

http://www.theglobeandmail.com/report-on-business/economy/weak-demand-not-productivity-to-blame-for-slump-research-shows/article15831712/

Canadian labour hit by wave of layoffs, plant closings:

http://www.theglobeandmail.com/report-on-business/economy/jobs/canadian-labour-hit-by-wave-of-mass-layoffs-plant-closings/article15854738/

#97 Ralph Cramdown on 12.11.13 at 8:58 am

#91 rosie — “landlord wont allow victim to break lease, cra only allows the cost of breaking a lease tax deductible. but if one cant break the lease what should one do.”

Break the lease. The landlord is obligated to mitigate his losses, i.e. to find a new tenant ASAP, and the old tenant ought only to be responsible for the difference between what the landlord would have earned and what he was able to get.

#98 Rob on 12.11.13 at 9:00 am

Deflation? Congrats Garth now you have this blog convinced that there is deflation. First you convinced them not to buy real estate ( as real estate surges all over the world). the government constantly adjusts what is in their basket to measure inflation. Any one that lives day to day knows we live with inflation. Gas, rent, taxes, real estate, taxis, food, farmland, sports entertainment and anything that matters is going up. What a bunch of suckers.

(a) Real estate has not surged in most of Europe, the US, Britain or great swaths of Canada, for that matter. (b) Price inflation can co-exist with deflation. It’s not fun paying more for groceries knowing your employer’s in trouble. — Garth

#99 Smoking Man on 12.11.13 at 9:19 am

Mom saves kid from the machine.

He will be home schooled from here on in.

His crime, mom said ok son, beat up the bullies who keep hitting you.

Kid was Suspended.
http://news.nationalpost.com/2013/12/10/special-needs-son-suspended-after-pummelling-school-bullies-mother-says/

Apparently some shrinks, mostly females with perfect nail polish, clip boards and Starbucks Lotti got together every now and then and invented a new disorder for the DSM.

They do this with no lab work, no science, just a  opinions of people who have mastered memorizing and regurgitating. Void of any real world problem solving skills.

They labeled the kid with:
Oppositional Defiant Disorder (ODD) described by wiki.
“Common features of oppositional defiant disorder (ODD) include excessive, often persistent anger, frequent temper tantrums or angry outbursts, as well as disregard for authority. Children and adolescents with ODD often purposely annoy others, blame others for their own mistakes, and are easily disrupted. Parents often observe more rigid and irritable behaviors than in siblings.[2] In addition, these young people may appear resentful of others, and when someone does something they don’t like they prefer revenge over more sensitive solutions”

 

 

For anyone blessed with it I give you!!!!

The Makings of an Entrepreneur.

 

What is wrong with disregard for authority?

What is wrong with revenge when someone is messing with you?

What is wrong with punching out bullies that pick on you?

What is wrong with critical thinking?

What is wrong with going against machine manufactured politically correct consensus?

What is wrong with being a real man?

 

Nothing.

 

Perhaps the shrinks should invent a real disorder for normal people;

 

I’m thinking most suffer from. (BOB) Bent Over Bitches.

 

Any shrinks out there, come debate me publicly, I have a bad case of ODD and I think you are all full of shit.

 

#100 Paul on 12.11.13 at 9:39 am

#71 Old Man on 12.11.13 at 12:09 am

#56 Vamanos Pest – I am sure you mean a P.O.S. and if your younger brother has a lease document have him try to register such against the title to mess things up a bit, as he might be paid off for some green.
***********************************************Typical
Let’s see there is blood in the water of the guy that bought and rented out a dwelling for less than what it carried for.
Which means the landlord subsidized the tenant’s lifestyle, Now the mortgage is in arrears which may mean the tenant is behind with the rent so instead of moving on with your life and enjoy it lets see if we can muddy things even more because there might be some ‘green’ in it for me. I never enjoyed green I didn’t work for.

#101 Incubus on 12.11.13 at 9:50 am

Speaking of deflation

http://www.businessinsider.com/albert-edwards-market-based-pce-deflationary-2013-12

“Deflation can be a very scary thing that is very difficult to reverse. Falling prices cause consumers to hold back purchases, which in turn causes prices to fall further. This leads to falling profits, falling wages, falling everything. “If the market had any idea that we were starting to register zeros on this measure, I think there would be panic aplenty,” said Edwards.” Exactly. — Garth

#102 RVP on 12.11.13 at 10:02 am

When I was a kid in the 1980s, I was taught that Canada was the bread basket of the world. Now that sounds like a bit of an exaggeration since they also have large grain fields in the USA and Russia. But seriously, I remember my social studies text book in the 1980s said that Saskatchewan grew so much grain that it was known as the bread basket of the world. I remember seeing pictures of fields of grain that seemed to go on forever. Now I am all grown up and when I go into the grocery store I am perplexed the a box of cereal costs upwards of $10–probably even more at some of the higher end grocery stores. Why does boxed cereal cost so much? I have also noticed that the big bulk boxes of cereal are thinner now and hold less cereal–but the price didn’t go down, it went up! I bet if you tracked the retail price of a boxes of cereal and calculated unit prices to the gram you would see inflation way higher than the official numbers the government is giving us.

#103 Penny Henny on 12.11.13 at 10:18 am

As a boy I once asked my mother why she never threw out string, but added it to a ball. “You never know,” she said.
———————————————————
An admirable lady. But Garth if someone was to live like that today, or clip coupons, or shop around for better deals you would accuse them of not living.

#104 RVP on 12.11.13 at 10:27 am

@ #50 Mister Obvious

“This much is certain: there is no good deflation. Maybe read that again…You need to go back one or two generation before the boomers to find any witnesses at all. But those who are still with us are old and tired with little desire to talk about bad old memories.”

You are saying that people who lived through the Great Depression in the 1930s have bad memories of deflation. Undoubtedly, that is true–and if we interviewed these people who are still alive, surely we would hear many heartwrenching powerful stories that back up your claim that deflation in unpleasant.

But all I can think about is the young people in their 20s and even 30s who have been priced out of real estate markets and how they are struggling to find full-time jobs that pay enough and have the benefits to allow a lower middle class lifestyle. What these people are going through is not pleasant either. What is the alternative to deflation? Permanently high prices and a permanently distorted economy based on flipping houses? That is not pleasant for the young people who are left out.

Let’s remember that people did make it through the Great Depression in the 1930s–it wasn’t the end of the world. Many of these who survived the Depression went on to prosper in the 1950s and 1960s. The Great Depression helped pave the way for the enormous growth of the mid-20th century from which the baby boomers benefited so much. Of course, the baby boomers were born after the depression–but many of the baby boomers’ parents made out very well after enduring the depression. Look at who the richest people in North America are–a lot of them are old fogeys in their 80s and 90s–a lot of those old people are way richer than most baby boomers. Those old people lived through the Depression, learned how to survive, and then acted smart and benefitted when the economy was doing well in the 1950s-70s. How would things have turned out differently if there had been no Great Depression, no dreaded deflation? Would those old people who lived through the Depression have been better off if there had been no deflation in the 1930s? Maybe if there had been no correction/deflation in the 1930s, then those old people would have known what today’s young people feel like with being priced out of markets forever and jobs that pay so low compared to the cost of living that it is hardly worth working. For people who were born in the 1920s, as painful as the Great Depression was for them, I think they were better off having gone through it, than if the bubble of the 1920s had just continued along forever. The Great Depression/deflation, after more than a decade of pain and hardship, paved the way for the riches and strong economic growth that followed in the middle decades of the 20th century.

#105 economictsunami on 12.11.13 at 10:36 am

The data the Fed pays the most attention to and the alternate chart…

ALBERT EDWARDS: If People Were Paying Attention To This Obscure Inflation Chart, There Would Be Panic

http://www.businessinsider.com/albert-edwards-market-based-pce-deflationary-2013-12#ixzz2nB288zwM

#106 -=jwk=- on 12.11.13 at 10:41 am

@#34
hi Garth,

House prices are not coming down in gta because a few lost their jobs in london. Until there is major layoffs in gta or significant higher mortgage rates, there will be no correction in the housing market in the gta.

la la la la la la la la keep your fingers in your ears until it is too late. The box producer for the London plant is in missauga. layoffs. the printer who printed the boxes is in Toronto. layoffs. the trucking firm that shipped the boxes to london, and the goods all over the country? head quartered in Toronto. layoffs. Get the picture?

#107 RVP on 12.11.13 at 10:47 am

Vancouver has been dealing with sub-zero temperatures since last week and the heat doesn’t work at a new condo building in the Olympic Village (ironically built for the WINTER Olympics!). The Olympic Village is LEED-certified and is a very green development. The building uses an experimental new heating system that is meant to conserve energy as the system relies on waste from people’s toilets. But the system has not been working, which is leaving many residents in the cold in this current cold snap. Residents have been told to use portable space heaters. Portable space heaters are not an energy efficient way to heat your home so it is doubtful that these green heating systems are really better for the environment than traditional heating. From Metro News:

“A problem with the much-lauded heating and cooling system in the buildings constructed for the 2010 Winter Games has left some residents without heat since the beginning of Vancouver’s cold snap, condo owner and resident Tomasz Rutkowski said Monday…Rutkowski reported the problem a few times to the property manager and strata council, but said he was told that the system is “just a weak system.”

“They just told us, buy portable heaters,” he said, adding that’s a poor solution for his condo with floor-to-ceiling windows. “This is supposed to be environmentally friendly, now they’re telling us to get those heaters…

“These are high price suites, we should have at least heat during the coldest months,” he said. Two-bedroom condos in the building start at $750,000, according to real estate listings.”

http://metronews.ca/news/vancouver/879575/olympic-village-residents-steamed-over-busted-heating/

#108 Steven on 12.11.13 at 11:14 am

Ten dollars per day or ten dollars per hour what difference does that make to a working man in Canada?
At those rates there is no way he could ever live in Canada except if he lived with his parents and didn’t have to pay rent or a mortgage and it is really chancy if he would ever be able to start a family. Cheap employers,politically correct special interest groups, the real estate market, multinational corperations ,banks and the existing form of government are not part of the solution, they are the problem. They got to go!

#109 NoOneOfConsequence on 12.11.13 at 11:17 am

I don’t understand how you can have such a different point of view Garth.

The Province newspaper printed a story with respected economists calling for unprecedented increases in sales and valuations. Their data shows that real estate is not collapsing, but galloping forward in every manner. The story re-iterates the FACT that off shore buyers purchase 50% of high value real estate in Vancouver and Toronto. It also points out that interest rates will remain near these lows for at least another 2 years or more.

Face it man….real estate is the ONLY place to invest to see fabulous returns.

Your balanced portfolio “theory” is safe and interesting (boring?)…but those returns pale in comparison to an exciting portfolio of condos, water front and single family homes.

http://www.theprovince.com/business/Vancouver+area+real+estate+market+looks+healthy+2014/9270980/story.html

Sarc off now? — Garth

#110 Daisy Mae on 12.11.13 at 11:35 am

CBC: “Canada Post to cut 8000 jobs over five years….”

There’ll be no more door-to-door delivery.

#111 HogtownIndebted on 12.11.13 at 11:44 am

Wow, Canada Post – 8000 jobs, Kellogs, Heinz,, BMO, Sears…..

I see a wave coming in. Put all this together and this could really change our economic mindset and the notion that real estate is different here.

I just found out a department in an old place I worked is being shuttered for lack of funds.

Who will not have a friend or neighbour affected by such changes soon? be grateful if it’s not you.

http://www.theglobeandmail.com/report-on-business/canada-post-delivery/article15868531/

#112 Ralph Cramdown on 12.11.13 at 11:52 am

#102 RVP — “Now I am all grown up and when I go into the grocery store I am perplexed the a box of cereal costs upwards of $10–probably even more at some of the higher end grocery stores. Why does boxed cereal cost so much?”

Because your neighbours will pay it. Your friendly neighbourhood grocer doesn’t just apply a 20% markup to the wholesale price of everything in the store. He and the computer at head office try to maximize the overall profit that the store generates with a combination of store layout, high margin regular prices on some goods, low margin regular prices on others, and advertised specials. They know what the marginal consumer is price-sensitive to and what goes in the cart every week regardless.

Also, a box of cereal takes up a lot of space on the shelf and in the truck. Production cost has little to do with the final price.

#113 rosie "moving forward" in the knowledge that, "this won't end well" on 12.11.13 at 11:55 am

# 104 RVP

False analysis. You neglected to factor in World War 2 in your argument. Surely WW2 had some impact on the modern world.

#114 Waterloo Resident on 12.11.13 at 11:58 am

Want to check the chart showing the VELOCITY OF MONEY? Then go here:
http://www.nowandfutures.com/key_stats.html

Since mid 2008 the velocity of money has been on a downward trend line, and nothing the FED has done has changed things one bit.
I think that the Fed’s action has only made banks rich, not the common man. For that reason alone the FED should be ABOLISHED ( disassembled, and gotten rid of.)

#115 Smartalox on 12.11.13 at 12:01 pm

Wow. Canada post will lay of up to 8000 people, more jobs vapourized in one announcement than were announced by all others to date.

Now something for the conspiracy theorists: why is it that the people accept that government entities copy and read their electronic communications, but would riot in the streets and man the barricades if the government did the same with their (actual) mail.

It’s also interesting that people rely so heavily on private courier companies to deliver goods and other objects of value. If these packages are lost, stolen or tampered with, the company fires the employee, and the employee goes on to find another minimum wage job. Big deal.

If a postal worker loses, steals or tampers with the plain old boring mail, they go to jail.

#116 Daisy Mae on 12.11.13 at 12:02 pm

#102 RVP: “I have also noticed that the big bulk boxes of cereal are thinner now and hold less cereal–but the price didn’t go down, it went up!”

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

Same thing happened when Canada switched to metric, remember?

#117 Stickler on 12.11.13 at 12:06 pm

@ #68
“This company had already outsourced most of the accounting functions to India. I am seeing this everywhere including at our advisors (legal firms; accounting firms that have outsourced their compliance work to emerging market economies)”

——————–
Yup, that’s the trend.

No one spoke out when it was just general call centers…then IT maintenance & testing work…but then flowed out all other aspects…and onto to all outer industries with routine work…accounting, legal, finance, etc.

Sad but true.

#118 Daisy Mae on 12.11.13 at 12:07 pm

…and have you noticed breads are ‘thick-sliced’? So we consume a loaf twice as fast. And off we go to the market to buy more. ;-)

#119 Snowboid on 12.11.13 at 12:09 pm

As we sit on our deck watching the ocean waves lap at the shore, with the bare shell of an abandoned condo complex across the bay, this blog post made us contemplate the situation back home.

We are spoiled rotten, that’s for sure!

To put it in perspective, here the minimum wage was raised this year to almost $ 6 a day! No sick leave, paid vacation, health benefits – nothing. Most of the people we have met are hard-workers and proud. While the economy may suffer back home, at least there are some social safety nets left – here it’s basically nothing other than local charities.

We have learned through some local charity contacts and the bomberos (firefighters who do make about $ 900 a month CAD) that half the population of this sleepy tourist town live in poverty. 1 in 10 don’t get enough food for proper sustenance.

While we sit in our luxury beachfront condo, two miles away families live along the railway tracks in homes made of cardboard and scrap metal with dirt floors.

One charity (out of Tucson) builds small 375 sq ft homes with concrete floors, stucco walls, a door and windows for about $ 250 CAD. All volunteer labour, no power tools used in the construction.

An orphanage north of town sends their children into the barrios and poorer colonias once a month with food for those worse off – even though there are times they don’t have enough food themselves.

As we sat in a cantina yesterday, met another snowbird from Salmon Arm, and talked about our experiences.

We concluded that while the economy back in Canada suffers, and even with the recovery in the US, the effects are multiplied a thousand times down here.

The US housing crash had a serious effect on RE here, there are still many high-rise condo complexes sitting abandoned or partially finished.

You can complain that Mexico is corrupt and dangerous, much of which is a MSM creation, but we see a nation trying to break out of the third-world designation. But that’s tough to do when half the city lives in poverty.

Talking to some of the high-school student volunteers last week, we were amazed at their grasp of issues and their perfect english.

These are the future leaders and entrepreneurs – confident in the ability to change the face of Mexico.

We are doing what we can to help, knowing that our donations go a long way here, but still feel a contradiction in terms living in luxury so near to abject poverty.

#120 Pete on 12.11.13 at 12:16 pm

Looks like a rapidly declining Canadian dollar is inevitable. The BOC is in a trap – they know that if they raise rates it will bring this whole rotten edifice of a housing market down around our ears. If the U.S. grows more rapidly than us and raises rates in the first quarter of next year, which looks likely, and the BOC does not keep pace, this will crush our dollar. The job losses we are seeing indicate an uncompetitive workforce – solution = depreciate the dollar. Our balance of payments is in increasingly negative territory, which means exports are uncompetitive – solution = depreciate the dollar. The economy needs a dose of inflation, what better way to get this that a rapidly declining currency. I can’t see any other outcome.

#121 not 1st on 12.11.13 at 12:18 pm

#110 Daisy Mae on 12.11.13 at 11:35 am

There’ll be no more door-to-door delivery.
—-

Hasn’t been door to door delivery here out west for more than 15 years.

Untrue. Door-to-door mail delivery has always been grandfathered in all locations while new addresses were served by mailboxes. A third of all home (about 3,000,000 have mail delivery). — Garth

#122 Rainclouds on 12.11.13 at 12:20 pm

All good according to REMAX, Gonna get BETTER! So parrots the national fishwrapper where journalistic integrity is paramount.

http://business.financialpost.com/2013/12/11/remax-forecasts-exceptionally-healthy-real-estate-market-in-2014/

In othe news: pesky heating prob with the LEED built olympic Condo’s in false creek. “Use portable heaters” shout Van council……….nice

#123 Everybody is screwing the buyer on 12.11.13 at 12:21 pm

It looks like the conditions for FTHB are becoming more difficult. More clouds above the condo fartket.

http://www.torontorealestateboard.com/market_news/release_market_updates/news2013/nr_homeBuyer_proposal_1213.htm

#124 Wow...Wynne/McGuinty totally Useless on 12.11.13 at 12:22 pm

OPG, 100% owned by taxpayers, has a $555 million pension deficit. Ontarians are contributing up to $5 to the OPG pension plan for every $1 contributed by OPG staff, five times higher than for other civil servants.

Its five top executives will get pensions of up to $760,000 annually at age 65.

OPG is top-heavy with senior management, up 58% since 2005, compared to an 8.5% drop for other workers.

Bonuses for non-union staff range up to $1.3 million. Overtime is out of control, with the number of employees earning more than $50,000 annually above their base salary doubling since 2003.

OPG ignored the Liberals’ so-called two-year wage freeze in 2010, raising average salaries by 7% to $109,000 annually between 2010 and 2012.

#125 sciencemonkey on 12.11.13 at 12:30 pm

Hasn’t someone on here previously mentioned the idea that QE would be better done as direct handouts to every man, women, and child in the US? I calculate that 90 billion a month is about $250 a month for every US citizen. Sure to some people it wouldn’t be a big deal, and they would likely throw it in an investment account, but a lot of people would funnel 100% of that cash into lattes, couches, furnaces, mcdonalds, PS4s, etc. Seems like a better way to boost the economy.

@104 RVP
Your sentiment rings true with me. I’m a 30 yr old employed in the private sector. While I have a lower middle class lifestyle, I’ve been in a funk because I worked so hard to train for a technical field where I thought I would have an upper middle class lifestyle. The last 3 years of my life have been a litany of downwardly managed expectations.

#126 Canadian Watchdog on 12.11.13 at 12:31 pm

#101 Incubus #105 economictsunami

The data to watch is the one that shows more money going towards services and taxes, GDP expenditures (quarterly y/y) and the big daddy of them all, the bond yield curve.

Prices are heading higher, not lower.

#127 Steven on 12.11.13 at 12:33 pm

One thing is for sure when the watering hole starts to dry up the animals get down right intolerant. It is a natural thing when the survival of the species is at stake like it is now. When you strip away all the propaganda put forth by the media, business world and government there is only one basic truth and that is that the nation and its founding peoples must survive individually and collectively. Everything and everyone that works against that is by definition an enemy, parasite or a predator. During periods of prosperity it is easier to overlook that but now this problem is coming into clearer focus and the trouble makers incharge don’t like that because it exposes them and their practices and teachings to criticism and demands for change. In this world you either do it right or you are lunch. That is the law of the jungle and it applies to all the critters. It also applies to politicians and they find out the hard way from time to time.
There is a way businesses that are not loyal to Canada can be punished and that is for Canadians to abstain from buying their product. The same principle could be applied to banking,real estate, the media, people and government.
If you want to sell your product in Canada you will have to make your product in Canada and be loyal to Canada.

#128 Mixed Bag on 12.11.13 at 12:36 pm

Garth,
How will deflation affect our investments? (ETF’s, funds, REIT’s, stocks, bonds, etc.)

Thanks.

#129 world view on 12.11.13 at 12:40 pm

# 64 Ralph Cramdown

If you still measure how the people of a country are doing using just one number like “Real GDP growth” , then I cannot argue with you.

This is just like saying that the “US household networth is at all time highs”. Except one does not realize the distribution of that networth. If one does not account for the distribution ( mathematical distribution), then how can one say whether the people of the country in general are doing better or worse.

One should dig deeper into the numbers.

#130 Godth on 12.11.13 at 12:46 pm

Reading the comments here I can see that this orgy is going to turn S&M, flagellation isn’t my thing. Entirely predictable. Maybe I’ll move to Iceland, the only country that has shown any intelligent response to this delusional nonsense.

It’s like watching people ride around in carriages with square wheels and even when shown a round wheel they refuse to adopt it.
http://www.youtube.com/watch?v=Lpe5OZ8F3Vk
http://www.youtube.com/watch?v=00iY4cpEQDY
https://www.google.ca/#q=debt+the+first+5000+years
We’re told we’re educated, it’s clear we’re trained.

#131 Kilby on 12.11.13 at 12:54 pm

Just rambling…..Having breakfast cereal made from wheat and corn coming from Thailand is beyond comprehension….For what it is worth we will NEVER buy any Kellogg’s products again and I hope that message is sent by many others, this is corporate greed at it’s worst.

Our leased 2 bedroom bungalow (1,000 sq. ft.) with new BC Hydro “Smart Meter” is running an average of $8.50 a day in costs. We keep the bedrooms heat off and doors closed and don’t use the dryer a lot, this is going to hurt a lot of young workers, families and seniors on fixed income.

#132 Ogopogo on 12.11.13 at 12:55 pm

#123 Rainclouds on 12.11.13 at 12:20 pm
All good according to REMAX, Gonna get BETTER! So parrots the national fishwrapper where journalistic integrity is paramount.

http://business.financialpost.com/2013/12/11/remax-forecasts-exceptionally-healthy-real-estate-market-in-2014/

Ah, you beat me to the punch! This “article” had me in stitches this morning. At least most of the comments are relentlessly mocking it, including my own.

Realtors: Canada’s full-time comedians.

#133 Kilby on 12.11.13 at 1:05 pm

Hasn’t been door to door delivery here out west for more than 15 years.

Untrue. Door-to-door mail delivery has always been grandfathered in all locations while new addresses were served by mailboxes. A third of all home (about 3,000,000 have mail delivery). — Garth
——————————————————————-

In 35 years in many residences in BC we have never had door to door delivery, always a box in smaller towns, community boxes in the burbs and lobby boxes in Vancouver…We will survive just fine…

But 8,000 families won’t. Not that you care, obviously. — Garth

#134 Godth on 12.11.13 at 1:12 pm

#126 sciencemonkey

Even if the gov’t’s were spending the QE money on real things like infastructure it would make sense. Instead the insolvent shadow banking sector must speculate.

We live in a world where 8.5 trillion can go unaccounted for by the largest war dept. on the planet and people say things like “Dude, it’s all good”. To paraphrase Ralph Cramdown.

Ubi solitudinem faciunt pacem appellant
A failed experiment. The search for intelligent life continues.

#135 Daisy Mae on 12.11.13 at 1:12 pm

#109 NoOne: “Ross McCredie, president and CEO of Sotheby’s International Realty Canada, sees the market for single family homes remaining strong for 2014 as demand exceeds supply.”

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

And you believe Sotheby’s International Realty Canada? What ELSE are they gonna say? LOL

#136 happity on 12.11.13 at 1:14 pm

“Actually, deflation seems to be stalking much of the globe.”

And not just starting today, for quite a while, there never was a USA economic renaissance.

“In other words, all that stimulus spending ain’t turning into growth, jobs and inflation.”

Finally! It keeps the light bulbs on while corporations buy back their stock and bankers continue to ramp up the trillions in derivatives gambling.

Don’t worry though, the fed speech almost a decade ago to fight inflation leaves one bullet left, and that is a currency reset, but given global deflation it will likely be a global reset.

It will happen sooner than you think.

#137 TnT on 12.11.13 at 1:15 pm

#127 Steven

There is a way businesses that are not loyal to Canada can be punished and that is for Canadians to abstain from buying their product. The same principle could be applied to banking,real estate, the media, people and government.
If you want to sell your product in Canada you will have to make your product in Canada and be loyal to Canada.

**********

This is now a global economy and community.

In real life only the strong survive and if a Canadian company cannot compete then get out of the way.

I’m sick of how Canadian companies ripped us off for generations. Monopolies and price fixing, lack of varieties for everything from Services to food to clothes and electronics.

Bending the rules to favor anyone only weakens the gene pool and stifles choices…

Ingenuity is created when there is a will to survive this globalization and the writing is now clearly on the wall for all Canadian families to see….

Better tighten belt people… there’s a storm slowly creeping in and the landscape in its aftermath will be changed forever….

#138 DM in C on 12.11.13 at 1:24 pm

Add another to the list: Canada Post is cutting 8,000 jobs.

http://news.ca.msn.com/top-stories/canada-post-changes-mean-8000-fewer-jobs

Given the experience we’ve had in the last month with them (stolen cards, packages taken more than a week to ship expedited from Canmore to Calgary), I can’t imagine it’ll be better for Canadians.

Who uses mail much anymore anyway?

#139 Victor V on 12.11.13 at 1:28 pm

Price of stamps going through the roof. Big changes coming to urban delivery, and ‘changes’ coming to cost of labour that are surely not going to be in the interest of employees.

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

5. Addressing the cost of labour:

With its current labour costs, Canada Post has a much higher cost structure than its competitors have. This is simply not sustainable. The company will continue to bring the cost of labour in line with its competitors through attrition and collective bargaining over time.

These five initiatives will help the Corporation to better serve the emerging needs of Canadians, and fulfill its mandate to remain financially self-sufficient and avoid becoming a burden on taxpayers.

The implementation of this plan means Canada Post can return to financial sustainability by 2019. Once fully implemented, four of the five initiatives are expected to generate financial benefits with an estimated combined worth of $700 million to $900 million per year, with more savings to be addressed through future rounds of collective bargaining.

http://www.canadapost.ca/cpo/mc/aboutus/corporate/ap.jsf

#140 Ralph Cramdown on 12.11.13 at 1:28 pm

#130 world view — “One should dig deeper into the numbers.”

Yes, world view, YOU should. If you learn anything, report back to us.

#141 Spiltbongwater on 12.11.13 at 1:47 pm

Untrue. Door-to-door mail delivery has always been grandfathered in all locations while new addresses were served by mailboxes. A third of all home (about 3,000,000 have mail delivery). — Garth

Canada Post has been reduced to delivering pizza fliers and 10% ers from politicians. I leave my mail box full with all the junkmail they deliver, and because they won’t/can’t sort out the junk, they store it in the post office then throw it out every 10 days. Better them then me tossing out my junkmail imo.

Oh and logged into the Orange Guys shorts today for first time since getting divorced 4 years ago. There is 3 thousand dollars in there. I am richer then I thought.

#142 Beach Girl on 12.11.13 at 1:48 pm

Well, I feel sorry for the younger generations. This is one clusterfuck. When I was young and stupider, I had 22 jobs in one year. After that, I ran a successful company for 25 years, that employed 10 people, by myself. Also, heavily invested in rentals at the time. Made my money in RE, can’t do that today. My Daddy always told me, you can never get rich going to work. He was right. No jobs, no money, less hope.

#143 jess on 12.11.13 at 1:52 pm

Transparency

Open access to public information helps taxpayers hold elected officials and the people who provide public services accountable. AND THAT SHOULD INCLUDE for-profit companies that take over these public services. Organized by failures in transparency,accountability, shared prosperity and competition, these stories will show how hastily and ill conceived outsourcing deals fail to protect taxpayers and the public interest.This report highlights the failed experiences of cities and states across the country that recently experimented with outsourcing in a variety of sectors.

http://www.inthepublicinterest.org/sites/default/files/1213%20Out_of_Control.pdf

#144 Shawn on 12.11.13 at 2:21 pm

R.I.P. Canada Post

Private courier companies deliver to the door.

Fedex charges only about $22 per box on average to devliver a box by overnight flight to the door within the United States.

Canada Post is cutting its service which is not the path to prosperity.

Canada Post labours under insane rules that charge the same price no matter how far a letter travels in this country.

I can pretty well guarantee what Kevin O’Leary will blame this on: Unions. He may be right. He may also balame government. Right again.

I still get home delivery to my door. I am confident that I have been a profitable customer for Canada post since I get a lot of mail (mostly fan mail, as you can imgaine) and so it’s cost effective.

Fedex uses “independent” contractors drive their trucks (the contractor may oen the truck). I suspect a fedex contractor can earn more than a letter carrier, perhaps substantially more.

#145 ILoveCharts on 12.11.13 at 2:22 pm

http://www.theprovince.com/business/Vancouver+area+real+estate+market+looks+healthy+2014+experts/9270980/story.html
McCredie pointed to immigration from Asia as a bullish factor that will press single-family home prices higher across Vancouver and into Burnaby.

While official data on rates of foreign investment is difficult to track, McCredie believes that in Greater Vancouver foreigners account for about 50 per cent of purchases above the $2-million price range.

McCredie said Vancouver’s market is driven by almost twice the rate of foreign investment as Toronto, the next most popular Canadian market for offshore buyers.

“The reality is that even wealthy Canadians are priced out of Vancouver markets now,” McCredie said. “We see a lot of foreign demand in very specific neighbourhoods like Point Grey. And we think in 2014 you will see continued demand east of Main in Vancouver, and even out to Burnaby.”

#146 Godth on 12.11.13 at 2:25 pm

#138 TnT

In real life only the strong survive and if a Canadian company cannot compete then get out of the way.
———————

Patently false. Start with “too big to fail” and keep looking.

If we can’t even recognize simple untruths we’re doomed. Repeating a lie doesn’t make it true, despite popular beliefs.

#147 gquestion on 12.11.13 at 2:34 pm

Garth, I’ve the following question for you and I mean it seriously.

Would you like to find your way to be a Finance Minister of this country?.

For the first time in my life I will have a full trust in a politician work really wants to do something for the people.

Meantime I’ll keep looking at them with suspicious mind.

#148 Louis on 12.11.13 at 2:35 pm

Deflation is easy to fix, just print money and give directly to individual. Print 350 billion and send 10k$ to every canadian. Don’t “borrow” it and prentend it will be paid back.

Of course that would lower the value of the dollard and favor the spenders at the expense of the savers, but that is what is wanted anyway.

The really bad point is that it would show the herd just how phoney our money really is.

#149 EB on 12.11.13 at 2:42 pm

#138 – TNT – This is now a global economy and community.

Indeed, and nobody should have any delusions about what that means for the middle class. Garth said it himself. $10 per day. It was inevitable, they told us.

Canadians can’t compete with that, and things are going to continue declining until they can.

Third-world conditions are coming, and nobody in the 1% gives a rats ass if your grandkids end scrabbling around in a garbage dump.

#150 economictsunami on 12.11.13 at 2:46 pm

#127 Canadian Watchdog

I was just passing on a link to an article about what data The Fed watches closely.

I do not completely agree with their assessment of the data. Actually, I find most data to be somewhat unreliable and of a questionable nature; considering inputs of things such as artificially low rates, QE and government/sectoral induced incentives, used to distort various marketplaces.

“Prices are heading higher, not lower.”

Although I agree wholeheartedley with your above statement, it makes me wonder what prices/markets would look like without these deceptive supports.

Many scripts and narratives are written to justify why higher prices for some goods/ services; at a time when capacity/ supply is high but final demand is sketchy.

Scarcity of goods & services, wages and velocity of money is what I tend to watch closely…

#151 Tnt on 12.11.13 at 2:48 pm

#147 Godth

In real life only the strong survive and if a Canadian company cannot compete then get out of the way.
———————

Patently false. Start with “too big to fail” and keep looking.

If we can’t even recognize simple untruths we’re doomed. Repeating a lie doesn’t make it true, despite popular beliefs.

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

Unfortunately repeating “The Lie” does make it true in the sense it becomes the new reality.

Our whole system is a big “Lie”

Bell Canada charges $49.95 for standard phone service where Fongo charges $4.95 and you get more…

Rogers charges $50 for standard cell service where Virgin Mobile charges $30 and you get more…

Rogers charges $80 for Internet where Tech Savvy charges $50 and you get more…

Eggs and Bacon breakfast is Public Relations mind trick on the masses

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

Canadians were hand-picked and placed north of the 49th parallel to farm the resources for Britain, then USA and now Asia. The originals were docile and lacked ingenuity as to not have another revolution like those south of the new boarder.

Ce Nada (nothing here) was written on the top part of the oldest maps of North America from Spain and Portugal long before we called it Canada.

Be a Red Pill popper and let’s move on shall we?

#152 Knickerbockers Knosty on 12.11.13 at 2:50 pm

SMan, Nemesis, Suede, shanks et al — this one’s 4 U!
*
A country preacher had a teenage son, and it was getting time the boy should give some thought to choosing a profession.

Like many young men, the boy didn’t really know what he wanted to do, and he didn’t seem too concerned about it.

One day, while the boy was away to school, his father decided to try an experiment. He went into the boy’s room and placed on his study table four objects:

A Bible
A Silver Dollar
A bottle of Jack Daniels
And a Playboy magazine

“I’ll just hide behind the door”, the preacher said to himself, “and when he comes home from school this afternoon, I’ll see which object he picks up”.

“If it’s the Bible, he’s going to be a preacher like me, and what a blessing that would be!

“If he picks up the dollar, he’s going to be a business man, and that would be okay, too.

“But, if he picks up the bottle, he’s going to be a no-good drunkard, and Lord, what a shame that would be.

“And worst of all, if he picks up that magazine, he’s going to be a skirt-chasing bum”.

The old man waited anxiously, and soon heard his son’s footsteps as he entered the house whistling and headed for his room.

The boy tossed his books on the bed, and as he turned to leave the room, he spotted the objects on the table. With curiosity in his eye, he walked over to inspect them.

Finally, he picked up the Bible and placed it under his arm.

He picked up the Silver Dollar and dropped into his pocket.

He uncorked the bottle and took a large swig while he admired this month’s centerfold.

“Lord have mercy”, the old preacher disgustedly whispered,

“He’s going to be the next mayor of Toronto!”

#153 Toronto_CA on 12.11.13 at 2:51 pm

http://www.huffingtonpost.ca/2013/12/11/canada-housing-overvalued_n_4425462.html?utm_hp_ref=canada-business

Deutsche Bank estimates that house prices in Canada are overvalued by 60 per cent. That’s an average of two different measures: Home prices compared to rent (88 per cent overvalued) and home prices compared to income (32 per cent overvalued). The analysis compares house prices to historical norms.

“Based on their analysis, anyone in the market for property might want to avoid Toronto or Vancouver,” writes the Wall Street Journal

We’re #1! We’re #1!

The hubris exhibited by this country thinking they are different and special is mind-boggling.

#154 Iconoclast on 12.11.13 at 2:52 pm

re: 110
> There’ll be no more door-to-door delivery

About time they got rid of door-to-door. But watch, there will be huge rows over where to put the supermailboxes in old neighbourhoods. (e.g. not on my lawn, but not too far away!)

The 50% increase in postage is going get some people upset.
But a buck is not a bad deal if you really have to move a piece of paper from one end of the country to the other.

If you have to move a million pieces of paper, that’s different…

#155 Ralph Cramdown on 12.11.13 at 2:58 pm

Instead of moaning about whether your Cornflakes’n’ketchup are local, dream a bit bigger.

Start a company that makes artisanal, small batch local organic steel-cut oatmeal, and sell it for $12 for 12oz. Get a show jumper and his horse to endorse it, and get distribution. Sell it by mail.

Start a company that makes clothes. Make ’em in Canada, and convince people to pay far more for them than the perfectly serviceable asian-made clothing they can get for less. Sell the company.

Start a company that makes (or hell, just bottles industrially produced) vodka, and get Rob Ford to say it goes down smooth.

Hell, even the 1-800-Got-Junk guy started a business with no barriers to entry (in Vancouver, a city that knows a thing or two about junk), and built it into something big just by promising professional service in an industry where that’s rare.

There’s lots to be made in providing cachet or service to people with more money than brains. Aiming for a job that pays enough to buy domestic beer is aiming too low.

P.S. It’s all good.

#156 Michael on 12.11.13 at 3:07 pm

Garth, you should know full well that after-tax corporate profits are very strong. They are up 100% in the last 10 years and up more than 500% over the last 20 years.

The people being laid-off to goose profits even more sure aren’t making 500% more than they did in the early 90s, or double what they did 10 years ago.

It’s not “companies” that are having a hard time getting by, it’s “employees”. Why do you think consumer demand is so low and household debt is so high?

#157 Roy on 12.11.13 at 3:20 pm

Canada Post 6,000-8,000 jobs phased out

Over 5 year period, that is about 1,400 Canadian jobs per year that are not coming back

So who is going to buy boomer houses. Where are retirees going to get the extra 400 grand they are apparently short of on average for retirement.

#158 Nemesis on 12.11.13 at 3:30 pm

Not a lot ‘O Zen out there today, SaltyDogz… so instead, you get a highly topical short course in International Political Economy.

‘Eat your peas.’

Dessert later.

[CounterPunch] – The New Norm: Must It Keep Getting Worse? by ANDREW LEVINE

http://www.counterpunch.org/2013/12/11/must-it-keep-getting-worse/

[NoteToSnowBoid: @SnowBoid/#120 – Gracias, Amigo… Gracias. The soundtrack featured in my #61? …was looping through someone’s portable cassette player early one morning in the Plaza Angel de la Independencia as, ensconced in the passionate embrace of a trembling debutante… the EarthShook. …and I contemplated anew the destructive forces of nature… and the countervailing, inestimable power of love …to vanquish tragedy. http://en.wikipedia.org/wiki/1985_Mexico_City_earthquake ]

#159 Fed-up on 12.11.13 at 3:31 pm

Nice huh?

http://m.theglobeandmail.com/report-on-business/top-business-stories/canadas-housing-market-most-overvalued-in-the-world-deutsche-bank-says/article15878166/?service=mobile

#160 NorthOf49 on 12.11.13 at 3:33 pm

This just in:

http://www.theglobeandmail.com/report-on-business/top-business-stories/canadas-housing-market-most-overvalued-in-the-world-deutsche-bank-says/article15878166/

We’re #1!!!
We’re #1!!!
We’re #1!!!

#161 Old Man too on 12.11.13 at 3:38 pm

Interesting article in the Huffington Post about how overvalued the Cdn RE market is. Second half of article shows how deluded ReMax is.

http://www.huffingtonpost.ca/2013/12/11/canada-housing-overvalued_n_4425462.html

#162 omg on 12.11.13 at 3:43 pm

From the totally detached perspective of economists when jobs are cut the freed-up resources (i.e. people) are redeployed, by the miracle of the invisible hand, to other productive areas of work.

Thus the economy renews itself and goes ever onward. Its been happening for millennia.

As has been pointed out on this blog numerous times much of the resources in Canada over the past decade have been allocated to residential construction. Governments and the real estate sector have happily spurred this on. It has served the economy well – Canada faired exceptionally well versus the rest of the world during the past 5 years.

Now with construction seeming to slow down we may be in for several years of redeploying human and financial capital from residential construction into other more productive areas.

That’s what happens when the government tries to pick winners – eventually the economy smacks you down and lets you know who’s boss.

#163 Vamanos Pest on 12.11.13 at 3:46 pm

#100 Paul
Totally agree with just moving on, I don’t think any other option even crossed his mind. I posted mostly because it’s interesting that one, in general, assumes that in the renter/landlord relationship, if anyone is going to get into serious financial difficulty, it would be the renter. I wonder if this becomes more common in the years ahead, as people fail to realize exactly what you said, at current rental prices and purchase prices, landlords are subsidizing the tenants lifestyle.

I disagree with one thing though: green you don’t work for is the absolute best kind!

#164 omg on 12.11.13 at 3:54 pm

#132 Kilby – the “smart meter” does not increase your hydro rates, period.

If your BC Hydro bill has gone up significantly since installation you are either using more electricity or there is something wrong with the meter.

Compare your Hydro bills before and after and really see what the change is. If its significant contact Hydro and put in a complaint about the meter. If you get the run around contact the president’s office or Minister in charge of Hydro, and keep contacting them – the message will float down to customer service – trust me.

#165 Roy on 12.11.13 at 3:56 pm

National head in the sand moment with the Deutsche Bank versus Re/Max news

#166 ROYALS on 12.11.13 at 4:03 pm

Garth, you wrote:

“Central banks may be printing money as never before, but the velocity of it is stalling, In other words, all that stimulus spending ain’t turning into growth, jobs and inflation. Not cool.”

Not to poke you with a stick aiming for your Conservative bits or whatever, but where do you suppose that money ended up Garth? I thought the job creators were supposed to be creating jobs.

Example: RBC, a proud tier 1 chartered national banking institution receives across the board tax cuts. It then (feb 2013 or thereabouts) proceeds to lay off older and highly specialized Canadian workers providing critical IT services, using the TFW program to bring in “contractors” to be trained by the people losing their jobs, before they get shipped back to India where presumably they can survive on a hundred bucks a month or thereabouts.

#167 heineken on 12.11.13 at 4:03 pm

147 Godth on 12.11.13 at 2:25 pm
#138 TnT

In real life only the strong survive and if a Canadian company cannot compete then get out of the way.
———————

Patently false. Start with “too big to fail” and keep looking.

If we can’t even recognize simple untruths we’re doomed. Repeating a lie doesn’t make it true, despite popular beliefs.
——————————————————
canadians have cornered the market on “nice”.
But, nice has a downside. While other countries measure lost productivity in terms of sick leave, Canada measures it in terms of time spent at STOP signs.

“You go first!”

“No, you go first!”

“Oops , I thought you wanted me to go first.”

“OK, you go first then.”

You could say we have turned our inferiority complex into a national identity.

lets go over to asia and attack those foreigners with our hockey sticks!

#168 omg on 12.11.13 at 4:05 pm

#109 NoOneOfConsequence

So the two “expert economists” work for the real estate industry. Hmmm – wonder why they are pitching the idea of ever upward spiralling prices and the tired old standby of offshore investors.

Do you think they would actually say they see the possibility of a 20% to 40% drop in prices over the next 5 years?? Not that they likely do – they drink the koolaide too

Its all about assessing risk, and right now Canada RE is about as risky as dot.com stocks in the year 2000.

#169 Iconoclast on 12.11.13 at 4:11 pm

Whether deflation is a good thing or a bad thing depends on where you stand.

For the Masters of the Universe, the folks who own all the banks and the governments (basically everything) now, asset deflation is a very Bad Thing. The value of the stuff they have bought goes down, while the debt they used to buy the stuff does not. Leverage + deflation == bankruptcy.
(Unless you get the rules changed like they did in 2008)

It will depress the general economy short-term by deferring demand exactly the same way that inflation gooses the economy now.

E.g.
– deflation : buy tomorrow instead of today because it will be cheaper tomorrow
– inflation : buy today instead of tomorrow because it will be more expensive tomorrow

We have had price deflation forever in electronics. We buy now what we need now, knowing it will be cheaper in 6 months. I don’t see how the same logic would be so bad if applied to cars or houses.

There would be disruption, to be sure, because we’ve become accustomed to constant inflation in all of living memory. But I think we’d get used to it.

Deflation is lethal. Be careful what you wish for. — Garth

#170 TnT on 12.11.13 at 4:13 pm

Ce Nada = Cá Nada

#171 Iconoclast on 12.11.13 at 4:14 pm

# 156 Ralph Cramdown:

> Get a show jumper and his horse to endorse it, and get distribution.

“We both love it, don’t we boy?”

Brilliant! ROFL!

#172 Godth on 12.11.13 at 4:22 pm

You just rationalized nonsense and then told me to pop the red pill? huh?
Newspeak.
http://www.youtube.com/watch?v=JvKEwr0iNA0

#173 Not 1st on 12.11.13 at 4:22 pm

It’s really hard to sheds tear for people that were making $30 bucks an hr sorting envelopes. Sorry it’s just business and economics.

#174 IM in C on 12.11.13 at 4:25 pm

Garth
My question to you is: ” what factors would prevent the collapsing of the present Canadian houing market, and indeed, allow said market to continue to flourish ?”

#175 Nemesis on 12.11.13 at 4:43 pm

Dessert:

http://www.theguardian.com/commentisfree/cartoon/2013/dec/10/steve-bell-leaders-mandela-memorial

#176 CrackHead Conservatives on 12.11.13 at 4:59 pm

Nice huh?

http://m.theglobeandmail.com/report-on-business/top-business-stories/canadas-housing-market-most-overvalued-in-the-world-deutsche-bank-says/article15878166/?service=mobile
—————————————————————–

No wonder retailers and companies are closing down and leaving Canada since people have no money and everyones income is going to pay for housing. Canada is the MOST OVER VALUED COUNTRY IN THE WHOLE WIDE WORLD. Canada also has the MOST LAND IN THE WHOLE WIDE WORLD. Wow you Crackhead CRACKSERVATIVES have bankrupt Canadians and Canada. good job morons.

#177 Ole Doberman on 12.11.13 at 5:06 pm

Garth continues to be right on the coming housing collpase. Home Capital Group broke resistance and is now set for a massive drop, nothing but air down below:

http://www.stockhouse.com/companies/quote/t.hcg/home-capital-group-inc

This blog will have to be renamed to something like the Armaggedom Blog – by Garth the Slayer

#178 Suede on 12.11.13 at 5:12 pm

#153 Nosty Vlad,

Love it!

#125 Wow,

Don’t hate the player, hate the game.

#179 CrackHead Conservatives on 12.11.13 at 5:17 pm

Canada is a house of cards. Harper with CHMC has created the BIGGEST HOUSING PONZI IN THE WHOLE WIDE WORLD.

#180 TheCatFoodLady on 12.11.13 at 5:23 pm

In Ontario, legally the tenant has the right to assign the lease. It is up to the TENANT to find a suitable person, pass the info on to the landlord for checking. The landlord can’t turn down the prospective tenant just to be pissy.

I don’t know about other jurisdictions – sorry.

The tenant can always ‘walk’ – give a false forwarding address, etc. They can get away with that with a small landlord. With a large firm/management company, that can come back to haunt them legally & in terms of credit rating.

#181 Penny Henny on 12.11.13 at 5:29 pm

Hey Ralphie boy!
Question for you.
If Canada/US start going into a deflationary death spiral, where do you put your money?

#182 don on 12.11.13 at 5:55 pm

I generally feel bad for recent immigrants. They are no longer required to “build” the country. I see them for what they are. The bottom base in our on going Ponzi scheme. When they realize what they signed up for they will be pissed

#183 Smoking Man on 12.11.13 at 6:11 pm

Ha nice one vladster

#184 dv8 on 12.11.13 at 6:12 pm

Whats wrong with this picture?
http://farmwars.info/wp-content/uploads/2013/12/goldmaneurope.jpg

#185 Smoking Man on 12.11.13 at 6:12 pm

#180 CrackHead Conservatives on 12.11.13 at 5:17 pm

Welcome back LaughingCon

#186 Bully Boy on 12.11.13 at 6:13 pm

Jesus …..It’s the Mountains and the Ocean again ….!

http://www.vancouversun.com/business/real-estate/Re/forecasts+exceptionally+healthy+residential+real/9273514/story.html

#187 Penny Henny on 12.11.13 at 6:14 pm

To heineken-
canadians have cornered the market on “nice”.
But, nice has a downside. While other countries measure lost productivity in terms of sick leave, Canada measures it in terms of time spent at STOP signs.
———————————————————-
here in Mississauga we are extra careful because we don’t know if the other driver knows what the stop sign implies

#188 Ralph Cramdown on 12.11.13 at 6:14 pm

#173 Penny Henny — “If Canada/US start going into a deflationary death spiral, where do you put your money?”

Government bonds, cash, or another country, duh.

But I question the premise. There seems to be two groups of encephalitic amateur economists; those who figure big inflation is nigh, and those who figure big deflation is nigh. What they have in common is a contempt for central bankers. And that their predictions haven’t come true for a number of years now.

Inflation is when, on average, the price of stuff goes up. Deflation is when, on average, the price of stuff goes down. Since the rich people own most of the capital stuff (i.e. real estate and equipment rather than food and consumer electronics), and they don’t want to see it decline in value, and they call the shots, I’m not betting on deflation. They own lots of non-government bonds, too, and would rather see the debtors pay than default.

#189 not 1st on 12.11.13 at 6:14 pm

Companies are not going to hire any more, they actively try to roll back wages, or lay people off in favour of automation, efficiency or offshoring.

How is deflation not a given in this scenario? By keeping my mortgage rate low I am supposed to just blindly spend like a drunken sailor. The fed has lost all perspective.

#190 not 1st on 12.11.13 at 6:19 pm

Garth, you can safely move your rate hike prediction out by a decade now. You discounted the black swan event much too easily.

Clean your glasses. It’s a crow. — Garth

#191 TurnerNation on 12.11.13 at 6:25 pm

Walking to your community mail box
(agenda 21 box ? lol) in -30 windchill in Calgary after mail delivery ceases.
#worldclass, #BPOE

Leaves you wanting for a 1200 sq foot post-WW2 bung in the NW for $550,000?

#192 maxx on 12.11.13 at 6:26 pm

#4 Babblemaster on 12.10.13 at 9:17 pm

Beautifully put.

#193 TurnerNation on 12.11.13 at 6:28 pm

Meanwhile in the commune…no whistling blowing, which would affect corporations! It’s in the model.

“Hill staff asked to sign lifetime confidentiality agreements”

#194 Shawn on 12.11.13 at 6:29 pm

JOBS ARE NOT CREATED, THEY ARE BY-PRODUCS

Someone said:

I thought the job creators were supposed to be creating jobs.

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

That is a common misconception. A farmer sets out to create a crop, jobs are the labour needed to make it happen. The rational farmer tries to minimise his costs and hence labour employed.

A Hotel creates accomodation and pleasant service. Jobs are the by-product of getting to that goal.

No profit-seeking company sets out to create jobs. (Unless under the influence of government)

All government programs designed to create jobs are misguided. Industry can be encouraged. Jobs will a by-product.

If a business can make a reasonable profit by employing a worker it will tend to do so, If not it tends not to.

Adam Smith explained all in 1776.

#195 Shawn on 12.11.13 at 6:31 pm

The Luddites Called…

Companies are not going to hire any more, they actively try to roll back wages, or lay people off in favour of automation, efficiency or offshoring.

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

Stop plagarizing the luddites.

#196 Republic_of_Western_Canada on 12.11.13 at 6:50 pm

#156 Ralph Cramdown
Instead of moaning about whether your Cornflakes’n’ketchup are local, dream a bit bigger.

Or better yet, show some personal discipline and eliminate consumption of things you really don’t need, or are basically cheap junk with little lasting value.

Cereal is expensive bullshit. Buy whole-grain bread or rolls, bran products, OJ/fruit for brekkie; instead of sugar-laced factory puffed corn by-products. Go watch collegiate hockey at 5 bucks a seat, instead of NHL games broken up every 5 minutes so broadcasters can get their 3-minute advertisements in; at 120 dollars a seat plus parking.

And for some lasting value, get some financing for FEED on a local upgrader and refinery so you can rake in billions from adding value to sands-bitumen instead of just sending it to Sarnia or the Gulf Coast as cheap dilbit.

#197 TheCatFoodLady on 12.11.13 at 6:51 pm

Deflation – be careful what you wish for indeed. If, IF you don’t owe money & have cash available it looks & sounds delicious. Look at the bargains you can snap up as they become available because you have cash. You’re in a great bargaining position. Your lease is coming up & your building not only not filling vacancies but seeing more? You might be able to negotiate rent down. Or move to nicer/cheaper using marked down moving services. If you’ve got a lot of $$$, you can snap up RE bargains – housing, commercial, industrial if your pockets are deep enough or can find leverage. That all could be a bit of a crap shoot but… you have those options. Cheaper bling, cars, clothes, groceries, furniture, etc. All sounds pretty good…

But what if your job is deflated away, either directly as in: “Sorry Jack – we’re going tits up.” or as a small business owner you see your customer base disappear? What about your retirement money – are you sure your carefully chosen & monitored investments will hold their value? How about your pension fund?

Even if you’re okay, when your son comes crawling home with 2 kids, no job, no assets… gonna turn them away?

All that is just on the personal & neighbourhood level – did I mention the increased personal/property crime rate?

Then we go higher & it gets really scary.

#198 45north on 12.11.13 at 7:01 pm

smoking man: Apparently some shrinks, mostly females with perfect nail polish, clip boards and Starbucks Latte got together and invented a new disorder for the DSM.

the school boards have jumped on the anti-bullying bandwagon – I guess they did some focus groups. I heard one 10 year old accused the other girls of bullying her. Whatever.

what’s DSM?

#199 James on 12.11.13 at 7:06 pm

http://m.theglobeandmail.com/report-on-business/top-business-stories/canadas-housing-market-most-overvalued-in-the-world-deutsche-bank-says/article15878166/?service=mobile

Baloney. Comparing apples and oranges. Each country dynamics are different.

#200 Rabbit One on 12.11.13 at 7:08 pm

What USA and Canada government has been for many years is called “ABD” = Anything But Deflation.

There are many countries, eras in inflation.
In contrary, very few countries in history experienced deflation.
Now Japan is spreading deflation to developed countries all over the world.

Strange though, Canada’s inflation rates are low (manupulated?), currency is low, fixed assets value is up.

On deflational condition, your currency up (look at JPY last 20 years), inflation rate flat, and fixed assets were declining.

Canada, something (fixed assets) has to be in line, or inflation rates has to be up, currency has to be up (less value in cash)

#201 broadway skytrain on 12.11.13 at 7:10 pm

fight inflation on a personal level – defeat news paywalls – read the news for free, all the time ,any time

i’d be happy to pay 3 or 4bucks/mo for the van sun, but if they insist on 10, then i’ll just read it for free, without the java bits.

how?

1.use chrome browser
2.menu – settings – show advanced settings(at bottom)
3. under ‘privacy’ click content settings – under heading javascript click ‘manage exceptions’
4. in box ‘hostname pattern’ type in your desired site ie. http://www.vansun.com ;then select allow in the next box
5. enjoy

this is 100% legal.

you will miss some photo/interactive stuff, but the text is there.

#202 First they came for the Posties, and I didn’t speak out because I wasn’t a Postie… on 12.11.13 at 7:20 pm

[…] morning’s news, plus a list of other layoffs I read last night and the myriad identical stories from around the world, are signs of system […]

#203 broadway skytrain on 12.11.13 at 7:29 pm

Cereal is expensive bullshit. Buy whole-grain bread or rolls, bran products, OJ/fruit for brekkie; instead of sugar-laced factory puffed corn by-products.
———————–

oats at costco come in at about $0.005 per serving

here is what i do for my better half every morning

oats + water +2min in nuker
add
some broken walnuts
a few raisins
about 1/3 apple chopped
splash of maple syurp

stays hot till after she gets to work.

fresh, hot, healthy , cheap – no kellogs reqd.

(sub – rasp, strawberry,etc to mix it up.)

#204 bigrider on 12.11.13 at 7:44 pm

Inflationary forces or deflationary forces, which would you wish to face should you have to face one ?

Like a walk in a B.C forest and an encounter with the two top predators.

Which would you wish to face, a mountain lion or a grizzly bear ?

#205 live within your means on 12.11.13 at 7:46 pm

“As a boy I once asked my mother why she never threw out string, but added it to a ball. “You never know,” she said.”
…………………

Wise lady. That’s the way I and my 5 siblings grew up as well as my hubby and his family.

#206 experienced.optimist on 12.11.13 at 7:50 pm

Found these following links through one of the links posted previously. Although they are several years old, I found them quite interesting. The last link concerns a term I had never before heard, biflation, but Mr. Turner basically said the same thing above in post #98 “( (b) Price inflation can co-exist with deflation. It’s not fun paying more for groceries knowing your employer’s in trouble. — Garth “

https://www.mint.com/blog/trends/a-visual-guide-to-inflation/?doing_wp_cron=1386804189.0905869007110595703125

https://www.mint.com/blog/trends/a-visual-guide-to-deflation/?display=wide

http://www.wallstats.com/blog/quickie-economics-question-experts-needed/

#207 jess on 12.11.13 at 8:01 pm

a private project, for private profit …really?

Ciudad Real Central Airport
It was the first international private airport in Spain, costing €1.1bn to build.

Spain’s local savings banks (the cajas), were different from other banks in one crucial way – local politicians sat on the board. So companies needed political support for large projects to encourage the cajas to invest.

A BBC News magazine report suggests the airport was planned to fail by its investors, who benefited from construction contracts awarded to their own companies.[4]wiki

#208 Nemesis on 12.11.13 at 8:03 pm

@Shawn/#195…

“All government programs designed to create jobs are misguided. ” – Shawn

Seriously?

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

#209 kommykim on 12.11.13 at 8:15 pm

RE: #129 Mixed Bag on 12.11.13 at 12:36 pm
How will deflation affect our investments? (ETF’s, funds, REIT’s, stocks, bonds, etc.)

Generally speaking, equities will suffer but bonds will gain value in a deflationary environment.

#210 kilby on 12.11.13 at 8:20 pm

——————————————————————-

In 35 years in many residences in BC we have never had door to door delivery, always a box in smaller towns, community boxes in the burbs and lobby boxes in Vancouver…We will survive just fine…

But 8,000 families won’t. Not that you care, obviously. — Garth
*****************************************
Obviously you still have mail dropped through your front door…It is too bad that it is going but we do have a lot more to be concerned with than having to walk 100 metres to get mail from the “Block Box’. Losing a billion dollars a year somethings have to change .

#211 skybluepink on 12.11.13 at 8:21 pm

Now Canada Post is getting in the game too. Job losses rolling everywhere and they didn’t even wait until after the holidays.

http://www.ctvnews.ca/canada/no-mail-at-the-door-your-reaction-to-canada-post-cuts-1.1585731

#212 Van Isle Renter on 12.11.13 at 8:26 pm

#205 bigrider on 12.11.13 at 7:44 pm

Inflationary forces or deflationary forces, which would you wish to face should you have to face one ?

Like a walk in a B.C forest and an encounter with the two top predators.

Which would you wish to face, a mountain lion or a grizzly bear ?
++++++++++++++++++++++++++++++++++

If I lent out my gun or need to borrow a gun, it doesn’t matter which.

But if I’m carrying my gun, it also doesn’t matter which, but I’m the guy walking out with either a bearskin or cougar skin hat.

#213 maxx on 12.11.13 at 8:26 pm

#34 NorthOf49 on 12.10.13 at 10:30 pm

Head of the class, well done!
It’s amaizing ;-) how many items you can target this same way when it comes to much of the processed stuff we’ve been buying for ages out of sheer habit. Eliminating processed food saves a ton of money, is far more healthful and is so much greener. We call everything into question now. Anything which has added sugar or sugar substitutes, bad fats, fillers, preservatives, additives, artificial colour, etc….gets the heave-ho.
We feel better now than we did 30 years ago, and when we sometimes “treat” ourselves to a junk meal, we inevitably regret it as we end up feeling like c#@!p.

Whole food rules.

#214 Bob Rice on 12.11.13 at 8:29 pm

Guys you’re all wrong about the RE market. It’s very strong and will stay that way… the “newspaper” told me so

http://business.financialpost.com/2013/12/11/remax-forecasts-exceptionally-healthy-real-estate-market-in-2014/

#215 Nemesis on 12.11.13 at 9:06 pm

Addendum/Nemesis#5…

An Egregrious Error ‘O Omission… Notwithstanding the apocryphal quotation, “[So] What’s a Million?” attributed to him by his ContemporaneousDetractors – ClarenceD. was no less important a ‘CoConspirator’ than BeaverBrook; to say the very least:

http://en.wikipedia.org/wiki/CD_Howe#Election_and_prewar

[NoteToSaltyDogz: GrandPa1 stoked the BlastFurnaces of the RiverRouge; aka TheArsenalsOfDemocracy while GrandMa1 ‘manned’ the farm… and GrandMa2, RosieTheRiveterPersonified, forged RifledBarrels for HellOnTracks… which same, TurretEmbedded GrandPa2 would employ to LethalEffect; RemorselesslyPursuing… and vanquishing… the remnants of Heinz Guderian’s Panzers from Holland. To Victory and beyond? Evidently, not quite. Indeed, Nem could safely say… that were they still with us, all of them would be ImmeasurablyAppalled to BearWitness to OurEpochalSquander. In their later years… they were well noted for saved string, among other things, too.]

#216 conan on 12.11.13 at 10:30 pm

so is that a pair of cat eyes in the middle window or is it my eyes playing tricks on me?

#217 NorthOf49 on 12.11.13 at 10:58 pm

Looks like we’ve got a little “suck ‘n blow” economy happening in Hamilton right now….and I don’t mean down on Barton St.

Case in point, from the Huffington Post Deutsche Bank article: “Overall, 23 of 25 markets surveyed, or 92 per cent, are set to experience average price increases by year-end 2013, with Hamilton-Burlington the leader at 7.5 per cent,…”

But also announced in Hamilton today:

http://www.thespec.com/news-story/4266426-national-steel-car-to-lay-off-400-at-end-of-week/

Something tells me the 2014 spring market in The Ambitious City is going to be a train wreck…pun intended.

#218 live within your means on 12.11.13 at 11:18 pm

#34 NorthOf49 on 12.10.13 at 10:30 pm
Cereal is just too damn expensive for what you get. I’m always looking for the healthier stuff but I ain’t paying $7 a box for it.
………….

I’ve tried so many over the last several years & just get tired of them. When I grew up Mom made both porridge w/milk or cream of wheat for us, plus toast. We’d cut the toast in strips & make log cabins (lol) & then dunk them in the porridge or cream of wheat. Those were the days when nobody locked a door, etc. Ageing myself, but I remember when our milk was delivered in glass bottles at the door, etc.

#219 live within your means on 12.11.13 at 11:27 pm

#122 not 1st on 12.11.13 at 12:18 pm
#110 Daisy Mae on 12.11.13 at 11:35 am

There’ll be no more door-to-door delivery.
—-

Hasn’t been door to door delivery here out west for more than 15 years.

Untrue. Door-to-door mail delivery has always been grandfathered in all locations while new addresses were served by mailboxes. A third of all home (about 3,000,000 have mail delivery). — Garth

…………….
True – we`ve had home home delivery for years. It`s the newer subdivisions, etc. that no longer have in our area.

#220 Derek R on 12.12.13 at 11:53 am

#63 Basil Fawlty on 12.10.13 at 11:26 pm wrote:
.

Sure. And torture is not bad if one describes it as “enhanced interrogation”; slavery is not bad if one describes it as “a guaranteed job for life”.

The trouble is that deflation isn’t just falling prices. It’s falling prices caused by falling wages and loss of jobs. And while falling prices caused by technical innovation may be good, falling prices caused by deflation is just the silver lining on a very dark cloud.

#221 steve on 12.12.13 at 7:48 pm

cereal is totally refined processed carbs, raises insulin levels in the body, which leads to fat storage and lack of fat usage by the body for energy. bad for you.