Bombs away

BALOON CAT modified

With nary a squawk of protest, our poor dollar just slid under the 90-cent mark, shedding the better part of a half-cent in a day. It’s on the way to 85. In fact, I’m told, down under 80.

The latest credible research comes from the boys at Scotiabank, who point out the loonie sailed on through a major four-year ‘head-and-shoulder’ formation last month. Whazzat? Technical analysis, which is (simply put) the study of price and momentum, which ends up being a tracing of human emotion. After all, things (even currencies) don’t change value all on their own – they’re constantly repriced according to what people think they’re worth in light of what comes next. Houses included.

A ‘head-and-shoulders’ looks like this:

Head modified

A bearish head and shoulders forms when something tops out in value, while a reversal or inverted head and shoulders indicates a bottom. The key is to look for an asset which then breaks out of this pattern, because history tells us that three times out of four, it will form a new trend which is likely unstoppable.

The head-and-shoulders above is not a happy chart. It shows an asset that’s risen in  price (left shoulder), dropped back to a support level, jumped to a new high-water mark (head) before falling again to the point when it looks cheap, then retested its high (right shoulder) before breaking below the neckline. The greater the volume of trading on the right shoulder, the more momentum the downward move becomes. This signals a fundamental shift in investor sentiment, because at the neckline, most people no longer think the thing is as cheap as it’s going to get. – which means they’re right. Bombs away.

The same pattern in reverse tells an opposite tale, when a falling asset hits a support point (as cheap as it’s going to get – the new neckline), jumps up to a point of resistance, falls again to that same bottom level, then rises again, this time right through the resistance point. This tells you that investors have suddenly decided this thing has reached a point where it’s too much of a bargain to ignore. Sentiment changes, buyers move in, and the momentum turns decidedly bullish. The greater the trading volume, the more advance that lies ahead.

OK, so back to the loonie. What’s going on? Why does it matter to your mortgage?

The ‘head’ for the dollar a month ago was 94 cents US. It then crashed through the support level, and the momentum to the downside has been breathtaking. “As the CAD now slips below $0.90, the next major technical level of support is highlighted at $0.85,” says Scotia. And while there could be a boomerang rally, the bank says if you’re into FX (and you shouldn’t be), that would be a golden sell moment.  Because, “The completion of this major 4-year top is significant and should continue to pressure the CAD to below $0.80 over the longer-term.”

Wow. Less than eighty. I sure hope you listened to this pathetic blog two years ago when our dollar was worth $1.05 US and houses in Phoenix and parts of Florida were selling for 40% of their 2006 stickers. Sell Canada, buy America. Remember that advice? In response, busloads of haters and doomers came here to say the States is a failed, bankrupt state, and Canada’s different.

We sure are. Ten thousand jobs a week gone last month, high-profile layoffs everywhere, the economy stalled and the Big Dog bank guy warning about debt and deflation. Besides lower commodity prices and tumbling oil exports (thanks to US fracking) there’s a simple reason our currency is melting – we’re not special any more.

So what?

Two things. First, a low dollar will bring more inflation because half the crap we buy comes from China. Families are struggling enough already with high debt levels, so this will impact consumer spending, as will the rise in unemployment. And there’s nothing affected more by stressed buyers than real estate. The last thing you should do in the two months to come is equate engineered news of bidding wars in Toronto or Vancouver with a strong housing market.

Second, our sick currency and slagging economy will keep the Bank of Canada rate where it is for at least a year, and also soften bond yields – an unexpected but real development. Therefore variable-rate mortgages will stay put until the autumn of 2015, and there’ll be some cuts to fixed-rate five-year loans as well. Nothing massive, but enough to trick the lightly-read.

Have you been toying with the idea of selling your house this Spring? Brilliant.

Especially if it’s in Phoenix.

174 comments ↓

#1 seegar on 01.28.14 at 9:04 pm

FIRST !!!! YEA BABY

#2 kitchener on 01.28.14 at 9:05 pm

Hey if the currency falls far enough, they can always hike interest rates several percent like Turkey just did! That would take care of the CAD (the housing market, not so much…)

#3 Jimmy on 01.28.14 at 9:09 pm

Sinking like a sunset.
Nah nah nah , nah nah nah…
(Tom cochrane)

Oh yeah, first !!

#4 Brian on 01.28.14 at 9:10 pm

Great stuff Garth. Keep it comin!

#5 cj on 01.28.14 at 9:11 pm

garth, i was with you right up to selling my house in phoenix….why would i do that with a weakening cad dollar?

Seriously? — Garth

#6 Devore on 01.28.14 at 9:12 pm

there’s a simple reason our currency is melting – we’re not special any more.

We were never special to begin with. Ultimate conceit to believe otherwise.

#7 Adam on 01.28.14 at 9:12 pm

If you extend that dollar chart a little further, I’m sure you’ll be able to see about 6 other TA patterns that could be applied, half of which would’ve been proven right, but only in hindsight of course.

TA is total voodoo, I would’ve expected more from you. Next thing you’ll be telling us to try and time the markets…

Actually he who ignores technical analysis, as one of many tools, is a fool. — Garth

#8 jan on 01.28.14 at 9:13 pm

In south east van all the old houses with for sale signs on it have a sold sticker, no exception.
I have no idea any more what is going on here.

Shell I say numer einz |!!!

#9 Dinglenuts on 01.28.14 at 9:15 pm

I’ve got buckets for sale, they work for those drowning in debt wishing to bail out. They are however made in china, which will by virtue shortly cost you more to buy :) Act now!

#10 T.O. Bubble Boy on 01.28.14 at 9:16 pm

Agreed. I’ve been hoarding $USD since those $1.05 days, and only starting considering converting back now (did my first “Nobert’s Gambit” transaction last week, saving about $700 in currency conversion costs the process).

So, besides holding $USD, what are the other choices here?

XRB for inflation protection?

Non-currency-hedged ETFs?

Anything else?

#11 Smoking Man on 01.28.14 at 9:16 pm

No I haven’t been planning on selling the house this spring.

Psychotherapy is a different story. Not for me.

It’s on regulated in the province of Ontario, anyone can open up shop.

I can see it now Dr. Smoking Man House of Psychotherapy.

Obviously I want partners. The criteria is you need to be somewhat insane.

Who wants to partner with Smokey.

#12 Adrian on 01.28.14 at 9:17 pm

Lord Poloz, please give us real interest rates. It’s getting lonely saving any money.

#13 recharts on 01.28.14 at 9:18 pm

Your Head and Shoulders (Procter and Gable) theory applied to 5y Canadian bonds
http://i.imgur.com/SpDHn2j.png

This is how Procted and Gamble sees it:
http://news.bbcimg.co.uk/media/images/60305000/jpg/_60305667_60305666.jpg

#14 Soylent Green is People on 01.28.14 at 9:21 pm

.

We are all being betrayed by our government:
Vet press conference where the old vets are crying on TV
http://www.cbc.ca/player/News/Politics/ID/2433191909/ #cdnpoli

………………………

Colin Brown @Colin_m_Brown 6m

#CdnPoli twitterverse is exploding! #CPC @JulianFantino has managed to piss off an important segment of Cdn population: #veterans!

http://www.ctvnews.ca/politics/veterans-say-fantino-treated-them-with-disrespect-in-meeting-over-va-office-closures-1.1658981

………………

Canada: it would be very easy to stop Harper & help vets:

500 Peeps = 5 Hrs = Victory

http://www.youtube.com/watch?v=415zNUfEwWk
#cdnpoli

Stop traffic

.

#15 seegar on 01.28.14 at 9:25 pm

To CJ (comment # 5) give yourself a slap. You will sell and get paid in american dollars and you can buy 10% + more canadian dollars.
Give me a high five garth !

#16 Randy Macho Man Savage on 01.28.14 at 9:28 pm

#7 Adam on 01.28.14 at 9:12 pm

The shoulder/head/shoulder analysis has the same technical complexity as Smoking Man’s batman and camel toe indicators.

#17 Nothing to see folks! on 01.28.14 at 9:28 pm

http://www.cbc.ca/news/canada/saskatoon/record-setting-year-for-saskatchewan-luxury-housing-markets-1.2514246

It is different in Saskatoon, because it is different.

#18 Randy Randerson on 01.28.14 at 9:31 pm

@late learner

To clarify, Qtrade is online brokerage, iShares and Vanguard are fund companies who sell ETF’s and mutual funds. TD e-series are mutual funds sold by TD banks through their online brokerage.

I have Qtrade as my online brokerage, and I buy ETF’s using it. They have good customer service and reply my email quickly, so I don’t mind paying $8.95 per trade. I also buy every few months with a large sum.

TD e-series are good if you want to buy small amount every month, but with Questrade (different than Qtrade), you can buy any ETF’s for free. It’ll cost to sell. MER for TD e-series are still higher than plain vanilla index ETF’s, thus I’m inclined to go with ETF’s than mutual funds.

My personal preference is to go with Vanguard Canada’s ETF’s, as well as Vanguard US’s ETF’s. I use iShares for preferred shares ETF’s

#19 john on 01.28.14 at 9:33 pm

Looks like those outsiders who invested in Canadian housing bubble will take a bath twice. Once on falling housing values the other in currency exchange. If there ever was hot money in Canada that ship has sailed and will park in the 50% less and getting a strong currency USA. P.s I now know of four out of five realtors who have given up and went back to work. Sales are down bad but RE boards overstate sales and then revise the numbers

#20 Bill Gable on 01.28.14 at 9:33 pm

I swear that the posts by our bearded host, have taught me more about ‘real world economics’ – than I learned in 4 years at a major West Coast University.
The head and shoulders explanation alone was KILLER.
Thanks a ton.

#21 TurnerNation on 01.28.14 at 9:34 pm

A T/A post. Did Blog Dog Scott write this one?

#22 Tj on 01.28.14 at 9:34 pm

Sorry garth, but there is no statistical evidence that technical analysis works. If it did there would be a lot more successful hedge funds out there. No easy ways to time the market unfortunately….

It’s a tool. The value is in the hands of the craftsman. — Garth

#23 Nick on 01.28.14 at 9:37 pm

Love your work, Garth, but you lost me here.

If head-and-shoulders patterns were real and reliable, technicians would be millionaires yacht owners by now.

#24 jan on 01.28.14 at 9:44 pm

#11 Smoking Man on 01.28.14 at 9:16 pm
No I haven’t been planning on selling the house this spring.

Psychotherapy is a different story. Not for me.

It’s on regulated in the province of Ontario, anyone can open up shop.

I can see it now Dr. Smoking Man House of Psychotherapy.

Obviously I want partners. The criteria is you need to be somewhat insane.

Who wants to partner with Smokey.

I do I do I do
Heat me up SM, i am as crazy as they come… ;-)

#25 juno on 01.28.14 at 9:45 pm

They could of stopped this over a year ago, yet they keep feeding fuel into the fire.

Govt is too scare to raise interest rate, cause it will collapse the overbloated debt in the housing market.

But in doing so they will sacrifice the poor with the lower dollar and high cost of living. Too bad most of the Canadian fools did not take position in the US dollar.

BTW I wonder who will buy canadian bonds collecting next to nothing. When they know the dollar will be devalued another 10 to 20 cent over the course of time.

I remember some fool on your blog mention that goldman sacs was wrong and the dollar would stay strong. Well like Garth said, never bet against the US, I say never bet against the ULTRA-RICH, especially when they are the ones making all the rules!

#26 Freedom First on 01.28.14 at 9:47 pm

I hope you’re feeling better Garth!

The layoffs are becoming more than just words in the media and on your blog now Garth. I am now regularly running into people who have been recently laid off. The squeeze is on in Canada. This will be painful for many, while for others, it will be bottom feeding time. For the people who are balanced, diversified, liquid, and debt free, vision will be 20/20 when the time is right. Patience, and read Garth’s blog. His vision is 30/20.

#27 tigerbaby on 01.28.14 at 9:47 pm

> Sales are down bad but RE boards overstate sales and then revise the numbers …

have to keep those course and membership fees coming right?

#28 Cici on 01.28.14 at 9:48 pm

So which side is the TSX on?

#29 juno on 01.28.14 at 9:52 pm

6 Devore on 01.28.14 at 9:12 pm

there’s a simple reason our currency is melting – we’re not special any more.

We were never special to begin with. Ultimate conceit to believe otherwise.
===========

Yes we are special ! “SPECIAL NEEDS”

#30 Don't Believe The Hype on 01.28.14 at 9:52 pm

#20 Bill Gable

Not sure if you’ve considered it, Garth, but would be nice to be able to click on a ‘Like’ or ‘Thumb up’ button for such a cool comment about your head and shoulders explanation. Just a suggestion

But I don’t care. — Garth

#31 Smoking Man on 01.28.14 at 9:53 pm

Nick its not just head and shoulders, or just batman and camel toe, I’m not narked up on pain killers so I ain’t giving up fear and greed for free.

Unlike or host who in the last week has given up way to much free Intel.

Perhaps he has visions of herds of naked barbie dolls chading and chanting your not worthy. Stoking his ego. Hes lost the vault.

#32 Tj on 01.28.14 at 9:53 pm

Nonsense. There is no evidence that TA works and you know it. Search YouTube and you’ll find many “craftsmen” who will teach you the magic of TA….for only $2000 of course

#33 Ben on 01.28.14 at 9:55 pm

The uk gap dropped 20%. It made property cheaper for foreign buyers. They won’t raise rates like turkey because the will use some QE variant further impoverishing the poor and middle class. Check the uk run book.

#34 Ben on 01.28.14 at 9:55 pm

Damn auto correct gbp not gap.

#35 ZED on 01.28.14 at 9:57 pm

Garth,
with your comment on Phoenix’s real estate, are you telling us that:
1. RE prices there have peaked or
2. it is time to transfert back from u.s. $ to CAD based on cheap value of CAD (15% gain in value of u.s. $) or
3. both?

Is it too late to buy u.s. $ with CAD or still a better value long term?

#36 shane on 01.28.14 at 9:57 pm

Garth, so will housing keep going up?

#37 Nemesis on 01.28.14 at 9:57 pm

NoteToRalph: Ah yes, Stuart Leslie Goddard [possibly better known as Adam Ant]…

Personally, I always preferred, “Stand & Deliver”… but GoodyTwoShoes was brilliant in context.

I’ve no idea where AA is now… but in the 90’s he used to enjoy taking his morning espresso in a quaint little rural English village well known for it’s sculptural homages to Winston and FavouriteHomeBoy, General JamesWolfe [not far from a modest shack called CheveningHouse that her HM maintains for the express pleasure of the DeputyPM and the ForeignSecretary – speaking of which, Hague would unquestionably be the more ambitious & AdamAnt of the two].

Hmmm… TA? I’m quite certain that I used to know one of them.

Ah! GotIt. Good Old Dr. Kioni… He’s doing so much better with his new “HooDoo” on youToob now than he ever did in TheCity.

http://youtu.be/mU7mCqtMYSo

#38 Smoking Man on 01.28.14 at 9:58 pm

#24 jan on 01.28.14 at 9:44 pm

Can you imagen . an office staffed with loons, getting paid by other loons. To give them loony advice.

Oh man I so see it. We can hire herb as the receptionist he hits the pager. Dr Smoking Man your patient is here. As he rolls his eyes as he swipes there visa.

#39 Cici on 01.28.14 at 10:05 pm

#17 Nothing to see folks!

You’re not serious are you? If you really believe that drizzle, here’s some more to keep you entertained:

http://www.cbc.ca/news/canada/hamilton/news/hamilton-sets-new-record-for-high-end-home-market-1.2513914

#40 tigerbaby on 01.28.14 at 10:07 pm

> There is no evidence that TA works …

TA is a bunch of individuals all trying to front run each other … like a stampede. Don’t have to follow one, but don’t stand in front of one either …

#41 Cici on 01.28.14 at 10:07 pm

#18

Good advice Randy :-)

#42 jan on 01.28.14 at 10:18 pm

Just in from global tv in Vancouver.
Luxury home sales explode in west van and west side of Vancouver across the board.
Remax realtor said, the luxury segment will not slow down and will in fact explode with international buyers snapping up properties between 5-10 million.

With high immigration level in canada rhe market has only one way to go and that up,way up.

He said, it has nothing to do with local canadian buyers
Irs all about out of country buyers.

Are you in a bidding war on the Westside? No? Then why care? — Garth

#43 Piccaso on 01.28.14 at 10:22 pm

No mention of a melting loonie in Alberta 6:pm news

Just a record amount of luxury homes being sold.

lol

#44 Exrealtor on 01.28.14 at 10:24 pm

Hi Garth. Spoke to you about a year ago. I had a small real estate team. We chatted about insurance and the future of the insurance industry and the future of the real estate industry. You gave me some great advice. I bought a small agency, multi line and left the real estate world. Thanks for your advice.

#45 P Van Winkle on 01.28.14 at 10:28 pm

Technical analysis? What did those doctors give you to smoke?

Same stuff as the BNS research department. — Garth

#46 TEMPLE on 01.28.14 at 10:29 pm

Actually he who ignores technical analysis, as one of many tools, is a fool. — Garth

Technical analysis is only believable if the Efficient Market Hypothesis is true. Which is isn’t. It’s pretty apparent that technical analysis suffers badly from hindsight and confirmation bias (and no small dose of ridiculousness).

It is never about anything except value. And maybe momentum once in a while.

TEMPLE

#47 Piccaso on 01.28.14 at 10:38 pm

Sounds like the realtors are doing an all western Canada advertisement with the record amount of luxury homes being sold story. lol

#48 Rick on 01.28.14 at 10:38 pm

This is not particularly bad news for my family: I, an American, married a Canadian. I work for an American bank (egad – the enemy!) and every hundred dollars I pull into the country costs me 91 cents (1% exchange fee until I get a SIN). My contract ended, but new work is on the horizon.

We sent her income into a now-maxed TFSA and plunked a bunch into an RRSP. When I start again, we’ll live on her check and bury mine into ETF’s and REIT’s and other Garth-Sponsored crap down south. My few investments down there drew a tidy 22% after fees last year – we’ll keep riding that wave.

It’s not what you know, Garth. It’s not who you know. It’s who you know and who you marry, dude.

#49 OttawaMike on 01.28.14 at 10:41 pm

I believe Smoking Man might be the captain of the Yugoslavian Cannibal Rat Ghost Ship :
http://metro.co.uk/2014/01/23/lyubov-orlova-position-hungry-rat-ship-heading-to-britain-4274017/

Also the correct name for man purse is Murse. I like mine, just got one for Christmas although it’s low key nylon not leather and keeps me semi-organized.

#50 Mr Reality on 01.28.14 at 10:46 pm

And meanwhile the Dow and S&P 500 are setting up the second shoulder. Watch what another 10 billion in QE withdrawal will do to EM’s. That hangover will drag the US indices with it, finishing off that H&S pattern pefectly.

#51 Meck on 01.28.14 at 10:46 pm

Article in T.O. Star tonight – another house expected to go $200K over asking

http://www.thestar.com/business/real_estate/2014/01/28/roncesvalles_house_is_among_the_best_and_worst_on_market.html

I may be horrible, but I really want this market to blow up big time before any more suckers get taken.

#52 BurstThatBubble! on 01.28.14 at 10:47 pm

Do I see water in that balloon?

I predict one of the 9 lives will be used up here.

#53 Gary on 01.28.14 at 10:53 pm

Keep up the good work Garth!
Hey should be able to get a RSP loan below prime?

#54 Suede on 01.28.14 at 10:54 pm

“Be careful, rates are going to rise”
-Carney 2011,2012,2013

“Watch your debt load, rates are heading higher”
-Flaherty 2011, 2012, 2013

“Bla bla bla, Pink Floyd, bla bla bla, $CAD will fall, bla bla, Poloz may actually lower rates”
-Smoking Man

Oh brother, what is this world coming to!!

…back to eating popcorn and watching my US assets grow in value

At least the gold humpers are happy – Gold is $1378 Canadian now! saaaaaaay whaaaaaat

#55 raisemyrent on 01.28.14 at 10:55 pm

#42 jan
haha good thing you rely on global to inform you what happens in your own metro area. immigrants buying such houses, what drivel… wait months on a points system to come and buy property. yes, that’s how rich people work. there’s nowhere else in the world to go but lovely Vancouver for the rich, right? house = investment, right?

btw, luxury homes = wood + paper.

***paging Dr. Smoking Man***

#56 Smoking Man on 01.28.14 at 11:03 pm

http://mobile.bloomberg.com/news/2014-01-28/chinese-homebuyers-thronging-sydney-create-mini-bubble-frenzy.html

Hum. ? Jan you maybe onto something. Your in re clinic..:)

#57 So Crash When? on 01.28.14 at 11:06 pm

Why am i being censored? What am I saying that’s so wrong? All i’m saying is housing is worth more today than jan 2013.

You are being punted for past indiscretions. Nothing dies on the Internet. — Garth

#58 Smoking Man on 01.28.14 at 11:17 pm

#55 raisemyrent on 01.28.14 at 10:55 pm

I can’t respond at the moment, getting a lab coat fitting.

Dr Smoking Man I like it.

#59 Porsche on 01.28.14 at 11:18 pm

All the boomers will die of old age before this bubble blows.

#60 nomad on 01.28.14 at 11:18 pm

I kept US money I earned working in the US in 2008, thinking the strong CAD wouldn’t last forever. A rare good call on my part. Now this $PFF preferred shares ETF producing 6% just got a lot more delicious. Why didn’t my past self not exchange a load of CAD to US. Wasn’t it obvious? Sniff.

#61 TheCatFoodLady on 01.28.14 at 11:18 pm

Down here near the butt ugly bottom of the socio-economic ladder, it matters. Matters a lot. Through sheer luck, as I hadn’t been watching the dollar closely enough, we vulched just about every consumer item we needed & a few we wanted earlier in January, A lot of it was made in & presumably bought from – the US.

Grocery run tomorrow & Thursday – great sales on this week & I’m carefully filling in the holes when it comes to think that are sensitive to currency fluctuations. Thankfully, not a whole lot needed.

A few minor clothing items to buy this spring, bike tune ups & other than that, stay the course.

Seeing worrying signs here that the economy is hurting. Other tenants are having hours cut, a few genuinely fear being downsized. Shopping is waaaaaaaaaay down. Phone solicitations are way up. I’ve ‘won’ 17 cruises since the 15th. My cable company & bank, under the guise of surveys, quickly segue into sales pitches. High end rental buildings are seeing higher vacancy rates & have been reduced to offering deals. It’s the dead of winter with few moves or house sales but boy, the incentives are getting juicy.

Tough times.

#62 Smoking Man on 01.28.14 at 11:29 pm

#49 OttawaMike on 01.28.14 at 10:41 pm

I can fix your man purse problem, so far me and Jan will be opening the phycotherapy clinc.

Your therapy will include lap dancers, bozze, a bit of gambling. And if all else fails. The quads from back page.

#63 Chickenlittle on 01.28.14 at 11:31 pm

#17 Nothing to see folks!, #39 Cici, #42 Jan, and #47 Picasso:

Something smells rotten….

#64 Ronaldo on 01.28.14 at 11:39 pm

Guess where this one is heading?

http://web.tmxmoney.com/charting.php?qm_symbol=^COMPX:US

#65 jan on 01.28.14 at 11:43 pm

#62 Smoking Man on 01.28.14 at 11:29 pm
#49 OttawaMike on 01.28.14 at 10:41 pm

I can fix your man purse problem, so far me and Jan will be opening the phycotherapy clinc.

Your therapy will include lap dancers, bozze, a bit of gambling. And if all else fails. The quads from back page.

Don’t forget doobies, lots of far doobies. LOL

#66 Too late for HRM on 01.28.14 at 11:46 pm

HRM luxury housing sales drop — report
BRUCE ERSKINE BUSINESS REPORTER

http://thechronicleherald.ca/business/1182784-hrm-luxury-housing-sales-drop-report

#67 45north on 01.29.14 at 12:04 am

Meck: 145 Galley Avenue: 900 meters south of Sorauren Park where I can say that the neighbours don’t scrimp on their kids’ strollers.

#68 groovin123 on 01.29.14 at 12:05 am

All “emerging market” currencies are being hammered at the moment. Apparently the loonie somehow gets lumped in there.

Turkey’s response was to raise their overnight rate by 425bps – that’s a 4.25% jump in interest rates – or more importantly, a 50% rate hike to buoy their sick currency.

Hmmmmm?

#69 quebec economist on 01.29.14 at 12:06 am

While many above have called you to reason regarding technical analysis. I shall do my share.

1. I am a mathematician/statistician by training

2. I play with technical analysis with my fancy trading software and my three computer monitors

3. I am a avide stock trader.

I agree with you garth that technical analysis is a tool, but a very bad one. Even the best craftman with TA is no better then an astrologist, studies have shown this…similar to those PSI debunk test. TA does not work, it is fun to play with…. Simple graphs with common sense is worth milions more then TA. Good post anyways, I predict 0.85 will be the lowest using gut instincts.

#70 Scully on 01.29.14 at 12:06 am

@#42
I work in the fire industry. I am not a realtor but like I said I work in the industry and let me just say I don’t know what Global is talking about. I am not saying we won’t have a spring market but I think this is all stirring the greed frenzy ahead of Chinese New Year. I’ve even overheard “the herd” aka Global’s followers say the planes are full of Chinese coming over to Canada with cash in hand for Chinese New Year. How in the hell do they know that? They don’t. It’s amazing what you hear at Starbucks.

#71 experienced.optimist on 01.29.14 at 12:12 am

On the issue of possible interest rate hikes, I believe it is in the quite possible realm. If I remember my financial news history correctly , if the B of C raises interest rates it can put some kind of floor under our dollar. Why would Poloz do this. Again , a little hindsight. It seems that whenever the US raises it’s interest rates , Canada eventually follows. Even if the Bank of Canada and the government of the day states that Canada has an independent monetary policy. Yeah, Right.

Why would the US start raising interest rates sooner than later? Perhaps there is a possibility of inflation getting further ahead of the US Fed than they realize.

“Aneta Markowska, chief U.S. economist at Société Générale, writes in a note to clients that “Could the Fed hike rates in 2014?” is one of the top questions that has come up in recent meetings with investors. “

http://www.businessinsider.com/is-the-fed-falling-behind-the-curve-2014-1

Also with our dollar now literally crashing in the past few weeks it may become a bit of a political hot potato for the government. If the dollar keeps going down and really starts inconveniencing the Canadian public, especially the core of the Conservative party, I would expect Poloz/Flaherty to start increasing rates to keep some sort of floor for the dollar. There will be some room to move if the dollar gets to low.

#72 Capt. Obvious on 01.29.14 at 12:12 am

Technical analysis is awesome as a form of abstract art.

#73 Bob Rice on 01.29.14 at 12:14 am

Help me here; if inflation increases, don’t rates go up?
And, if US rates head upwards, doesn’t the BoC have to follow suit otherwise risk a further bleeding of investment in the country?

#74 Snowboid on 01.29.14 at 12:27 am

#35 ZED on 01.28.14 at 9:57 pm…

In the last couple of months there has been a definite slowdown in sales down south. Our agent says it’s because there are so many listings, it’s shifting towards a buyers’ market.

We have neighbours who have listed about 15% too high and one hasn’t had a single showing (listed 3 weeks ago).

Our agent suggested a fair selling price for our place, which would see us net (after capital gains) nearly $ 80K, of which $ 30K would be exchange based on an 1.15 rate.

Tempting (and a good return for three years of ownership), but since we would still want to winter down here for at least 8-10 more years, it isn’t worth it. Rents for our area during the peak months Nov-Apr run around $ 2200-2500 a month (based on properties with similar value to ours).

We did anticipate the drop in the CAD and moved enough cash down south to handle a couple of years of expenses (plus a buffer cause I thought I might buy a vintage car this year – didn’t pan out).

We discussed the idea of selling last week (hence the visit from our agent), but despite the potential of incurring the wrath of the esteemed Professor, we are staying put.

Besides, the prices in Canada for almost everything don’t start looking good until the loonie drops below 70 cents.

BTW, relatives finally sold their McMansion in Alberta, took a $ 350K bath on a home worth $ 1.2 million two years ago.

#75 Bob Rice on 01.29.14 at 12:36 am

And one more question; does this put an end to deflation now?

#76 Macrath on 01.29.14 at 12:48 am

Technical analysis, modern haruspicy for the digital age.

TA detractors fail to understand this is fundamentally a tracking of human emotion. That changes not. — Garth

#77 The Greatest Fool on 01.29.14 at 1:06 am

“Two things. First, a low dollar will bring more inflation because half the crap we buy comes from China. Families are struggling enough already with high debt levels, so this will impact consumer spending, as will the rise in unemployment. ”

And the vicious cycle self perpetuates. We look for more cheaper imported crap, another Walmart opens, ten decent smaller family run retailers close their North American suppliers close and throw more out of work who then seek cheaper import goods because they no longer have decent income…………..

Sad how much of all this we’ve done to ourselves with our greed.

Hope your recovery is going well Garth. By the way back from his whirlwind taxpayer funded campaign to get his name in the history books as an international statesman the right horrible prime minister remarked, regarding your injury, well look (because he prefaces everything with well look) I told him years ago to stop writing that blog and that it was going to hurt him. Then told that it was nothing to do with the blog Harper said Nigel Wright has taken full responsibilty and Duffy has been punished for it as he should be. A puzzled media wandered away.

#78 Having a senior moment on 01.29.14 at 1:14 am

Forget about the “Bears”,

“Cats” are the real problem, so many sharp little claws, so many balloons to pop.

#79 Happy Renting on 01.29.14 at 1:15 am

http://ca.news.yahoo.com/mixer-mortages-vancouver-home-ownership-possible-012422399.html

This might work for some, but sharing that much living space with another family would drive me batty.

#80 Marco Polo on 01.29.14 at 1:21 am

I agree with poster #2.

I suspect there is the risk of the currency lagging further, many independent currencies outside the US dollar have fallen as much as ours. I predicted this devaluation as national policy, but sadly, it isn’t.

There may be a time, in the next year or so, when our government may have to use interest rates to prop up a falling loonie, interest rates most new homeowners can barely afford.

Garth’s right, prices for all our imported goods will increase. I counter that how many of these cheap goods do we actually need? When i’ve travelled overseas, I’ve found many poorer countries repair far more of their appliances, equipment, and vehicles than we do. They also keep their smaller homes and yards more tidy, and ‘updating’ is using fresh paint they can afford.

It used to be more like this here several decades ago. And really, all you need to live in Canada is shelter, heat, and food. Few of those things you can develop for yourself in a condo. You can only burn the ikea funiture on your designer hibachi once every ice storm!

#81 Blobby on 01.29.14 at 1:34 am

Sometimes I’m not sure I understand as much as I think I do, and this is one of those times.

If the dollar drops too much (say down to below 80), wouldn’t the feds then be forced to raise the base rate to stave off inflation, and increase the value?

Or am I being dumb here?

Impossible without further tanking the economy. — Garth

#82 Marco Polo on 01.29.14 at 1:36 am

Wouldn’t a rising US dollar, with other currencies falling, potentially cause commodity prices, like oil, gas, wheat, gold, to fall in value, as competing foreign bidders accepted lower prices to gain hard currency?

I watched on CBC news today how great a falling dollar will be on tourism. Great. We’ll be like Cuba then. Instead of producing things in factories, we’ll all now serve foreigners drinks with small paper umbrellas…

#83 Son of Ponzi on 01.29.14 at 1:39 am

Head & Shoulders.
My favorite hair shampoo.

#84 Andrew Woburn on 01.29.14 at 1:41 am

Apparently insensitive, racist Australians not only notice that some house purchasers are Chinese, they even talk about it.

“Chinese Homebuyers Thronging Sydney Make Mini-Bubble Frenz”

http://www.bloomberg.com/news/2014-01-28/chinese-homebuyers-thronging-sydney-create-mini-bubble-frenzy.html

#85 Al on 01.29.14 at 1:50 am

I’m confused about the Phoenix thing too. Why would it be reasonable to transfer that back into Canadian currency that is only going to go lower?
#Newbie

#86 World According To Garth on 01.29.14 at 2:23 am

Maybe Jan would like her kids to be able afford a house in the place they grew up with after taxes are paid unlike the tax less dollars coming from ChIranUssia buying up everything in Raincouver.

Sure is going to be interesting to see what happens when the big deflation dump comes.

#87 Wow on 01.29.14 at 2:30 am

So how about the ” mixer mortgages ” from van city advertised by cbc today??? 2 families living in a vancouver house sharing kitchen. Yeah right. Home ownership is not that important!!

#88 jane24 on 01.29.14 at 2:53 am

Surely if the Canadian dollar is going down then many international buyers will not be buying as if and when they wish to bring their money back home, they will have lost on the currency exchange.

For example my friend moved from the Uk to Burlington, Ontario last year and got $1.60 ish for each pound he took over. Brought a house too, the twit. If he decides to move back now the he will have to pay $1.85ish to re-buy each British pound.

Or am I missing something.

#89 Anonymous ahead on 01.29.14 at 3:03 am

To the commenter that wants a like button: I only scroll the comments looking for the italics that indicate Garth has replied. That means he likes the comment – or more often than not has something contrary to say. I don’t read this blog to like Garth or be liked by him. I read it for the knowledge he shares. And sometimes what he doesn’t share counts even more (like the names of specific ETFs he recommends to his paying clients). The rambling, fighting and firsting – I couldn’t give a crap either.

#90 RainCity on 01.29.14 at 4:06 am

This caught my attention tonight: http://www.cbc.ca/news/canada/british-columbia/mixer-mortgages-make-vancouver-home-ownership-possible-1.2514737

Good lord. The stupidity never ends.

#91 Waterloo Resident on 01.29.14 at 4:07 am

Quote: “Ten thousand jobs a week gone last month, high-profile layoffs everywhere, the economy stalled.”

SORRY, IT’S A BIG LIE; THE ECONOMY IS BOOMING I TELL YOU.

I just chatted with an engineering professor from Conestoga College here in Kitchener-Waterloo and he assured me that the job market was BOOMING ! He said that there are tons of jobs and there is no shortage of GOOD EMPLOYMENT opportunities for today’s new grads, and if a new grad cannot earn $60,000 upon graduation then it’s only his/her own fault for not applying himself / herself.

When I asked if he thought housing prices might crash due to job losses, he GOT ANGRY AT ME, he said:
“Didn’t you hear a word I just said to you? I told you that young people today have never had it so good, so why on God’s Green Earth do you feel that housing will fall? Are you Daft?”

He was quite pissed off at me, really.
This is a guy with a PHD in Engineering, so he’s not dumb or anything, what he said must hold some water, right?

#92 late learner on 01.29.14 at 4:08 am

#18 Randy Randerson on 01.28.14 at 9:31 pm
@late learner

To clarify, Qtrade is online brokerage, iShares and Vanguard are fund companies who sell ETF’s and mutual funds. TD e-series are mutual funds sold by TD banks through their online brokerage.

I have Qtrade as my online brokerage, and I buy ETF’s using it. They have good customer service and reply my email quickly, so I don’t mind paying $8.95 per trade. I also buy every few months with a large sum.

TD e-series are good if you want to buy small amount every month, but with Questrade (different than Qtrade), you can buy any ETF’s for free. It’ll cost to sell. MER for TD e-series are still higher than plain vanilla index ETF’s, thus I’m inclined to go with ETF’s than mutual funds.

My personal preference is to go with Vanguard Canada’s ETF’s, as well as Vanguard US’s ETF’s. I use iShares for preferred shares ETF’s
________________________________________
Thanks Randy,
Yes I was very confused and now you made it much more clearer. Thank you so much. So, just to make sure i understand correctly opening an Questrade account will give me an access to all of Vanguard Canada and Ishare’s etfs?
I am planning to just add money for few years. my car is paid off and i have no debt. Only thing left is buying a house which i am not doing anytime soon. At this is point I dont even have a plan.
I know i am doing a right thing, but still doing yourself is very overwhelming and scary. But have to take a leap of faith.

#93 in Germany on 01.29.14 at 5:59 am

#59 Porsche

“All the boomers will die of old age before this bubble blows.”

Harper will pump the market as long as he can and then hand the mess to Justin, hoping it doesn’t burst on his watch.

#94 Rob on 01.29.14 at 6:57 am

Whatever. It was bound to happen after a 30% romp last year. And the correction will run its course before stocks stabilize and grow again.

Excellent call Garth, any thoughts on if the TSX will follow the same route.

Also I have to admit, I had the chance to move quite a bit if money from CDN to US dollars but for a variety of reasons which would take too long to explain I didn’t.

Bit bummed about that.

Good news is I rebalanced a while back into REITS, nothing like getting stuff on sale:)

Currently sitting on quite of bit of cash waiting to see how the next quarter plays out

Rob

#95 ☢☢☢ Fake bidding wars in Toronto ☢☢☢ -please forward on 01.29.14 at 7:52 am

☢☢☢ Fake bidding wars in TO: i.imgur.com/jzXzh3K.jpg Let’s fight the misinforamtion campaign started by real estate agents. Please retweet.

Please use Twitter,FaceBook,Google+ whatever you want to

#96 jerry on 01.29.14 at 8:19 am

What is FX?

My Bonds yields drop but prices rise. Why would lower loonies contribute to that?

(Time for another Money Road ahead book…….now that my kids can both read and understand..you would have 3 sales!)

#97 Smoking Man on 01.29.14 at 8:33 am

Going to add to my busness card

PhD. sa. UOG

Remeber kids FOMC at 2

Yes I can see the bulls in the room now.

To tapper or not to tapper. Ha.

As they look at thier port folios on their Black Berry’s. before desiding.

#98 Bill on 01.29.14 at 8:43 am

Actually the Chief FX Strategist from the Scotiabank came out with a report today that said the Cdn $ is very close to fair value. We may see a little bit of short term weakness.

But the the Cdn $ will stabilize and there will be strength in the currency in the second half of the year.

http://www.scotiafx.com/Chart_Feed/FX1.pdf

It’s refreshing a company with 83,000 employees can have analysts with slightly differing opinions. — Garth

#99 say it ain't so on 01.29.14 at 8:44 am

Technical analysis? What did those doctors give you to smoke?

Same stuff as the BNS research department. — Garth
_____________________________________

i wonder what the TA boys at BNS have to say about stocks. ….

i’ll wager they’re pressing the sell buttons …any honest technical analyst would be screaming to sell stock right now.

#100 T.O. Bubble Boy on 01.29.14 at 9:09 am

@ #91 Waterloo Resident on 01.29.14 at 4:07 am

A few notes on your story:

First – a college professor? Most tech companies in K/W would be looking for UWaterloo Engineers with Co-op vs. 2-yr college grads I would think.

Second – even if there are many entry-level jobs for new grads because of tech startups etc., how does that help the general population of Kitchener-Waterloo? Is everyone in the area an Engineer now? And – are there jobs for that 30- or 40-something person with children and 2 cars and a mortgage, or just for 20-yr-old college kids?

#101 Martin Freed on 01.29.14 at 9:12 am

I’m curious about how that curve goes on… I was actually thinking about buying a property this year so I went through some tips for best Canadian realty blogs and found you, Garth, I’ll stay with you!

#102 2cntsCdn on 01.29.14 at 10:11 am

I don’t know if many of the readers realize it but 95% of what is imported into Canada (including the Walmart’s, the Target’s, the Cdn Tire’s, the Costco’s and most Mall stores etc) ….. is bought with US dollars. China is paid in US dollars. A negative 15 or 20% exchange rate is way too much to absorb by Canadian importers in these days of skinny gross profit margins. So if the Cdn dollar sticks at under 90 cents US for more than a month or two …. retail prices (on almost everything) will (have to) go up. Any company that doesn’t raise their prices accordingly will struggle (lay offs?) or go out of business (lots of lay offs).

On the bright side ….. Canadian manufacturers who sell in US dollars (outside of Canada) will do better (hiring?) and they will also be able to compete better in our own country against companies importing products into Canada who are buying in US dollars (more hiring).

Economists argue this is what Canada needs to start selling goods outside our country and bring in outside dollars. And maybe slowly get the country off of this internal RE based non sustainable economy we’ve created the last 6-8 years.

There will be pain with a lower Cdn dollar (higher prices for most stuff). But it’s a better pain with future upside compared to what will happen to Canada if we do nothing and just let the clock tick.

#103 Shawn on 01.29.14 at 10:14 am

RRSP refund is a mere loan

Retail Investor at 159 on yesterday’s blog (it’s the last post there) explained this correctly. It’s must read material.

#104 Ralph Cramdown on 01.29.14 at 10:22 am

TA detractors fail to understand this is fundamentally a tracking of human emotion. That changes not. — Garth

I believe TA probably works for individual stocks, and the smaller the better, because I can understand the fundamental basis of it — individual investors who either regret not buying when something was cheap or not selling when the price was high. Also, no matter how many people believe in astrology, the stars are going to move according to the laws of physics, but if enough buyers and sellers of stocks believe in TA, it becomes a self-fulfilling prophesy.

The further you move from thinly traded individual stocks, the less likely TA is to work. Most buyers and sellers of CAD are doing it for business and hedging reasons, not because they’re individual gamblers who saw a track sixer get off on track five showing some camel toe and thought it bullish.

Good luck.

#105 ozy - BAD NEWS - DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN on 01.29.14 at 10:56 am

BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN, and masivelly

You have not thought of that, but with 60% or more immigrants in GTA and counting a weak currency, CAD, will give them a OBESE down payment. And if the mayor keeps his promise to slash LTT – I bet my hood will see another 100000 price increase in 2014. Already decided to sell when the 750000 house becomes 1.3 million in a few years, currently at 875000 with only 25000 spent in upgrades. Most of the buyers are smart, seasoned, business-like oriental flocks that do not socialize much…I guess goal oriented. Now with CAD dropping like a dead shoe….imagine the bidding wars…

GOD SAVE US!

#106 pbrasseur on 01.29.14 at 11:00 am

There was/is no need to buy US real estate to profit from the falling CAD.

In recent years I bought a lot of (individual) US stocks, not only they went up a great deal, but the dividends went up as well and now the currency! Wow!

Example, how about GE for 16 bucks at near parity in 2010! Pretty soon just the divident on that investment will be 5% CAD, and growing! And there are many others, BAC (Bank of America) for 6.88 UDS for God sake! Also JP Morgan, Goldman Sacks and many others.

Too bad soo many missed those wonderful opportunities…

#107 Penny Henny on 01.29.14 at 11:15 am

#84 Andrew Woburn on 01.29.14 at 1:41 am
Apparently insensitive, racist Australians not only notice that some house purchasers are Chinese, they even talk about it.

“Chinese Homebuyers Thronging Sydney Make Mini-Bubble Frenz”

What is with this world when reporting the truth is apparently insensitive as Andrew would say above.

Sorry Andrew, I think this is a case of you being too sensitive.

#108 Daisy Mae on 01.29.14 at 11:17 am

CBC alert: “Liberal Leader Justin Trudeau is removing senators from the party caucus and forcing them to sit as Independents.”

#109 Rational Optimist on 01.29.14 at 11:19 am

Nothing is an unadulterated good or evil. The falling Canadian dollar is not all doom and gloom: an 80 cent loonie will do a lot to preserve good jobs and bring some back that left years ago. It will make our products more affordable, and make imports less affordable. That’s bad in the short run for the Canadians who have been masking their declining living standards with cheap-in-all-senses products from Asia, but good in the long run for almost all of the rest of us.

It will also help to allow the Bank of Canada to raise interest rates when the Americans do. By that time, their economy will have proceeded further in its advance, and our weak dollar will have helped us tag along. Interest rates will go up slowly and surely to help keep our new inflation in check, which won’t be a problem because the North American economy will be chugging along. And only the most over-leveraged among us will be crunched.

I don’t see the problem at all.

#110 Ret on 01.29.14 at 11:20 am

Re: #102

“I don’t know if many of the readers realize it but 95% of what is imported into Canada ….. is bought with US dollars.”

Check out the labels in the grocery store. Most of the frozen pizza, President’s Choice line, condiments, canned goods,,, the list is endless, are not made in Canada.

A devalued dollar only benefits economies that can produce goods desired by other countries. Canada quit doing that years ago.

Simply building more universities and hospitals won’t fix the economy either. Didn’t work in Detroit and it ain’t working in Hamilton.

While politicians fixate for the next year on important national issues like the Senate, it’s time for you to take more meaningful action to do what’s best to protect your family’s standard of living.

Invest now in US “commodities.” Load up the freezer with $3.99 Delissios. The prices of imported food products have only one way to go.

#111 3 monitors on 01.29.14 at 11:21 am

#69 quebec economist

You have THREE monitors? OMG, that is crazy.

#112 Daisy Mae on 01.29.14 at 11:29 am

#30 Don’t Believe The Hype
#20 Bill Gable

Not sure if you’ve considered it, Garth, but would be nice to be able to click on a ‘Like’ or ‘Thumb up’ button for such a cool comment about your head and shoulders explanation. Just a suggestion

But I don’t care. — Garth

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

Excellent retort. Garth knows what he’s talking about. If people don’t want to believe him, that’s their problem.

#113 20something on 01.29.14 at 11:45 am

I just received my statement from my former employer’s pension plan–RPP with standard life. It’s made a pretty amazing overall return at nearly 11% since my contribution started 4 years ago. My U.S. equities net rate of return last year was 40%. Since I’m no longer with that employer, I cannot continue adding to the plan but I could create a similar account with similar investments using a TFSA.

What do you guys think about these TFSA products?

http://www.standardlife.ca/en/individual/solutions/tfsa/

#114 Cowpoke on 01.29.14 at 11:53 am

Canada and its citizens getting ‘sold out’ again! and again! and again!

#115 Doug on 01.29.14 at 11:54 am

Bought a house in Florida Nov 2012 after converting over $400k at $1.01 exchange rate. Now talking to RBC US about taking a mortgage on it to convert $250k back to Canadian funds using a gambit once the dollar sinks below $0.85.

And I could sell the house for $50k more than I paid for it as property values in my neighbourhood are jumping. DOM down significantly and number of listings is way down due to sales activity increasing.

Thanks Garth – your blog helped convince me to make this move and its paying off. In total I have about $600k tied up in US funds so this dollar drop is a good thing for us.

#116 Rusty Venture on 01.29.14 at 11:56 am

Meanwhile, the Feds are trying to set up a ‘dating site’ to match immigrants with vacant jobs.

http://www.cbc.ca/news/politics/skilled-immigrants-to-be-matched-with-vacant-jobs-in-2015-1.2514673

Why is it the Cons never reveal where these job vacancies are so Canadians can train for them?

#117 Cowpoke on 01.29.14 at 12:01 pm

“The only way to be a part of the Liberal caucus is to be put there by the people of Canada.”

By a ‘real’ majority!

Nice going! Dude.

#118 broadway skytrain on 01.29.14 at 12:11 pm

bbry moving up strongly today

too bad sm’s call was so late , 7 was the price to get in, rather than 10.

either way 15-18 is coming if the company can show the bleeding is slowing

and fwiw i took up running within days of being discharged from hosp for a heart attack – got into the best shape of my life. as a diy guy i took my kid to school and drove downtown to st pauls while having said attack. just laid on the horn and blew all the red lights!

#119 Macrath on 01.29.14 at 12:17 pm

TA detractors fail to understand this is fundamentally a tracking of human emotion. That changes not. — Garth
————————————————————————-

US trading is 70 per cent algorithmic trades by emotionless artificial intelligence. TA most likely fulfills a need for confirmation bias in the psyche. Can it accurately predict the future or just reflect the past ? It is however creating much needed jobs for craftsmen, soon to be unemployed by Technical analysis software . I just hope its open source.

#120 recharts on 01.29.14 at 12:26 pm

#105 ozy – BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN on 01.29.14 at 10:56 am
BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN, and masivelly

You have not thought of that, but with 60% or more immigrants in GTA and counting a weak currency, CAD, will give them a OBESE down payment. And if the mayor keeps his promise to slash LTT – I bet my hood will see another 100000 price increase in 2014. Already decided to sell when the 750000 house becomes 1.3 million in a few years, currently at 875000 with only 25000 spent in upgrades. Most of the buyers are smart, seasoned, business-like oriental flocks that do not socialize much…I guess goal oriented. Now with CAD dropping like a dead shoe….imagine the bidding wars…

GOD SAVE US!

What a mental fart!
Here are your fabricated bidding wars

http://i.imgur.com/SpDHn2j.png

1. they list the price well under the price of the area
2. they sell the house for less than the price of the area or near it
3. they come here like you to proclaim that the bidding wars are back , or better, they contact Ms Susan Pigg

#121 recharts on 01.29.14 at 12:28 pm

“God save us” from stupids who buy the RE TREB propaganda. And you are insulting the asians if you believe that they will buy now. They will wait till the CAD reaches the bottom. Unfortunately by then the RE market will start going down so your asian buyers will better buy in US

#122 TEMPLE on 01.29.14 at 12:35 pm

TA detractors fail to understand this is fundamentally a tracking of human emotion. That changes not. — Garth

Come on, Garth! You know that isn’t true. Charts reflect the prices of things, not human emotion. Sometimes there is collective euphoria or depression from the hive mind, but the notion that patterns can tell you very much about emotion is nonsense. There is no evidence that a “head and shoulders” pattern can predict future price movement. Technical analysis is reading tea leaves and casting bones. It’s a shame that sort of ridiculousness even makes it into the CSC manual.

Actually, technical analysis does tell us one thing about human emotion. It is a good reminder of why so many investors fail. Humans have always been pattern-seekers; unfortunately we are usually wrong about where we find them. Our persistence in clinging to imaginary patterns is a failure of critical thinking.

At best, there are some studies showing that momentum strategies can work (see the studies about relative strength). Presumably charts could be used to measure relative strength. I would argue that isn’t technical analysis, but I don’t have a strong opinion on that point.

TEMPLE

Actually I disagree. There is as strong an argument that fundamental analysis is also rubbish, since euphoric investors will happily bid up the value of a profitless company (dot.coms fit this nicely) if they feel it has momentum. TA tracks momentum, through price and volume. Nobody serious about invests ignores any tools. Being condescending is not being convincing. — Garth

#123 gladiator on 01.29.14 at 12:40 pm

Question: how do Canadian authorities estimate what amount of tax Canadians have to pay on profits for RE property outside the country (in the US, for example)?
With so many Canadians getting their toes into US or LatAm RE, I guess the Feds must have some way of tracking these profits?

#124 Calgary Rip Off on 01.29.14 at 12:45 pm

Fear this in Calgary: http://www.calgaryherald.com/business/Calgary+luxury+home+market+poised+another+record+year/9438596/story.html?tab=PHOT

Mortgage owners helping mortgage owners.

#125 maxx on 01.29.14 at 12:53 pm

#19 john on 01.28.14 at 9:33 pm

Bingo.
I shudder to think of the huge opportunity toasted by leading-edge boomers “hanging on” for every last Canadian nickel whilst watching the CAD drop daily and with it, bucket-list anything, often priced in USD.

#126 BCD (D for Doomer) on 01.29.14 at 1:09 pm

My few investments down there drew a tidy 22% after fees last year – we’ll keep riding that wave.
__________________________________
I love how 99% of people on this blog claim to make such HUGE paper profits and brag that it is “money in the bank” when the fact is that few cash out on time. If it is an investment you are bragging about than it is NOT really yours yet, and it is NOT cash. There is a big difference. I guess these people never heard the saying “a bird in the hand is worth 2 in the bush”. The fact is that greed causes most to hang on until they lose any additional pieces of pie they acquired. . .or the sheer stress of the investments negates any REAL gain in wealth.
Let me tell you a story. . .
The best way to invest is not to invest in other people’s schemes (read here: the entire financial system). The best way to invest is to invest in yourself, to learn to be frugal, to learn to live with less, to simplify ones existence so that meaning is found not in the assets/toys you own but in what you bring to the table as a person. Financial discipline is a hard thing to learn, but it is very valuable and will inevitably pay you more dividends than a balanced portfolio. I recently watched a good friend die and it struck me as incredibly odd that he was able to take NOTHING with him. After years of hard work he had been dealt a rough hand, got sick quickly, and died, and all I could think about is how he was naked in that hospital bed and without a shred of his hard work hanging to him. If you think you will outsmart the markets you are wrong, and if you make some money there is always a price to pay emotionally or psychologically. Take care of your body and mind, it is the last tool you will be left with, and even that will be taken away from you one day.

#127 TEMPLE on 01.29.14 at 1:18 pm

Actually I disagree. There is as strong an argument that fundamental analysis is also rubbish, since euphoric investors will happily bid up the value of a profitless company (dot.coms fit this nicely) if they feel it has momentum. TA tracks momentum, through price and volume. Nobody serious about invests ignores any tools. Being condescending is not being convincing. — Garth

I am not arguing that assets don’t get mispriced, I am saying that TA doesn’t do any kind of job in identifying that mispricing. It is easy to falsify the notion that patterns predict the future simply by looking at charts and identifying all the times the “patterns” failed to tell us anything. TA adherents chronically suffer from confirmation bias. That TA is an offshoot of the EMH makes it even more dubious.

You are wrong about fundamental analysis. The pantheon of successful value investors proves that fundamentals are the only game in town (and that town is Graham-and-Doddsville).

I am skeptical that TA told us anything about the dot.coms that the fundamentals didn’t. Profitless companies can go up on expectations (and/or manipulation in the case of the dot.coms)- if you want to call that “emotion” I won’t argue, but I think that is semantics. Either way, TA was after the fact in the case of the dot.coms and couldn’t predict a top. On the other hand, fundamental analysis kept plenty of people well away from that mess.

TEMPLE

#128 Shawn on 01.29.14 at 1:26 pm

Technical Analysis

I ignore it completely. I use strictly fundamental analysis and follow Buffett’s teachings. My returns have averaged a compounded 16% since and including the year 2000.

TA just does not sit my temperment nor my interests.

That’s just my expeience.

I think it may work for some people but I have zero interest in it.

#129 Son of Ponzi on 01.29.14 at 1:29 pm

Headlines in the Globe&Mail.
“Canadians spent more on housing and healthcare in 2012”.
Wow it took them over a year to notice.

“Target to open 9 more stores in Canada in 2014”.
I guess the ones that recently opened aren’t unprofitable enough. Like a drunk punched boxer coming for more punishment.

#130 Son of Ponzi on 01.29.14 at 1:33 pm

I think the best tool for forecasting the market right now is the yo yo.

#131 p on 01.29.14 at 1:41 pm

Warren Buffet on technical analysis:

«I realized technical analysis didn’t work, when I turned the charts upside down and didn’t get a different answer.»

Or another great investor, Peter Lynch:

«Charts are great for predicting the past.»

I’ll listen to the opinion of these guys over those of any blogger, as talented as they may be…

Yes the CAD is going down, but you don’t need TA to understand why. In fact as far as that’s concerned TA is totally useless.

So instead of wasting you time trying to learn about TA spend it more wisely, for example by reading The Intelligent Investor by Benjamin Graham, in Warren Buffet’s words: “by far the best book on investing ever written.”

#132 Derek R on 01.29.14 at 1:48 pm

#75 Bob Rice on 01.29.14 at 12:36 am asked:
And one more question; does this put an end to deflation now?

Nope. This is actually happening because the global market expects imminent deflation in Canada. The fall in the dollar will help to make the deflation less severe but won’t stop it.

#133 bdy sktrn on 01.29.14 at 1:53 pm

Cheapest B.C. home? $1 buys you Boston Bar heritage house—–

free houses and land in a beautiful setting a few hrs easy drive from vancouver – these are in better shape than some rehabs in van.

gut the inside , new roof , some paint and you have a sweet retirement place if you are into outdoor stuff.

or just a new roof and let the inside wait, still it’s free land for a roof job, in BC, no ferries needed.

i bet taxes are nearly free too.

#134 bdy sktrn on 01.29.14 at 1:54 pm

http://www.cbc.ca/news/canada/british-columbia/cheapest-b-c-home-1-buys-you-boston-bar-heritage-house-1.2514794

#135 Bottoms_Up on 01.29.14 at 1:59 pm

#23 Nick on 01.28.14 at 9:37 pm
—————————————
Many technical experts are millionaires, in fact one guy (forget his name) is one of the richest traders in history and he relies purely on math.

The thing is, technical analysis works perfectly in hindsight (i.e., Garth’s graph and description is about past events), but is less certain in ‘real-time’.

For example, as a trader, what would you do if the current day was right around that ‘sell’ word in Garth’s chart? Yes you think the stock is going to drop, so you might sell shares or calls, or buy puts. But what happens when the next day China releases dynamite economic news, and all stocks are up? In one day you’ve now lost out because you either sold your shares or calls too early, or your puts are now worth less. If you hold, you may turn out a winner, but many people that use these tools are in it for the quick gains. So timing becomes important. But Garth is right, T.A. is one tool that can help guide people in buying or selling ‘around’ the appropriate time.

#136 Derek R on 01.29.14 at 2:03 pm

#31 Smoking Man on 01.28.14 at 9:53 pm wrote:
Unlike our host who in the last week has given up way to much free Intel.

Hardly. He already told us all this and more in his book, Money Road. Which is available, for free, at any good local library.

#137 Victor V on 01.29.14 at 2:08 pm

Amusing recap re: Mississauga mansion auction,

http://themashcanada.blogspot.ca/2014/01/and-it-went-for-2290-saxony-court.html

#138 Derek R on 01.29.14 at 2:11 pm

Best cat picture yet!

#139 Falling dollar bad for Housing market on 01.29.14 at 2:23 pm

ozy – BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN on 01.29.14 at 10:56 am
BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN, and masivelly

You have not thought of that, but with 60% or more immigrants in GTA and counting a weak currency, CAD, will give them a OBESE down payment. And if the mayor keeps his promise to slash LTT – I bet my hood will see another 100000 price increase in 2014. Already decided to sell when the 750000 house becomes 1.3 million in a few years, currently at 875000 with only 25000 spent in upgrades. Most of the buyers are smart, seasoned, business-like oriental flocks that do not socialize much…I guess goal oriented. Now with CAD dropping like a dead shoe….imagine the bidding wars…

GOD SAVE US!
—————————————————————–

Oh no out of work and hungry for money uneducated realtor…. the falling dollar is bad but since you don’t have high school you will not understand why a falling dollar is bad for Canada’s housing bubble. HAM who bought just saw themselves losing 11% value and this without a drop in prices. Falling prices will be much bigger losses. Look out below

#140 bill on 01.29.14 at 2:27 pm

caveat felis….

#141 father on 01.29.14 at 2:42 pm

Garth doesn’t fed tapering mean higher 5 year interest rates?

#142 45north on 01.29.14 at 2:47 pm

Scully talking about rumors of Chinese hordes buying Canadian real estate: It’s amazing what you hear at Starbucks.

pretty funny

Blobby: If the dollar drops too much, wouldn’t the Canadian federal government be forced to raise the base rate to stave off inflation?

Impossible without further tanking the economy. — Garth

the Federal government is in a bind. I mean if it boosts interest rates by 1% the Canadian dollar moves back to parity but at the same time the real estate market stops in its tracks. Mortgage rates go higher and real estate values drop.

There are people who own a house but would like to move to a new one. Someone who has bought a new house but has not sold his old one would be in a bad way if interest rates were to go up 1%!

#143 frank le skank on 01.29.14 at 2:51 pm

#105 ozy – BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN on 01.29.14 at 10:56 am
BAD NEWS – DROPPING CAD MAKES WAY CHEAPER FOR HAM TO RISE PRICES ONCE AGAIN, and masivelly

————————————–

As a foreign investor with US dollars, you will get more CAD when buying because of the exchange rate. However its a two way street and you will reduce your profit when you sell and convert back to US. IF RE prices drop you will lose a lot of $$$$. If you bought when the CAD was at par with the US you have already lost some of your profit. boo hoo!

#144 Shawn on 01.29.14 at 3:01 pm

Rich Technical Analysts

Bottoms up at 135 claims:

Many technical experts are millionaires, in fact one guy (forget his name) is one of the richest traders in history and he relies purely on math.

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

You can’t name even one it seems. On Fundamental Analysis we have Peter Lynch, Warren Buffet, Bill Ruane, Walter Schloss, Tom Knapp, Charlie Munger and others. Bill Gates also now has made most of his money outside Microsoft and is a big value Investor.

Plenty of rich value invesotes and even buy and holders, who are the rich traders?

Any rich day traders?

#145 Blacksheep on 01.29.14 at 3:08 pm

Rational Optimist # 109,

“The falling Canadian dollar is not all doom and gloom: an 80 cent loonie will do a lot to preserve good jobs and bring some back that left years ago. It will make our products more affordable, and make imports less affordable. That’s bad in the short run for the Canadians who have been masking their declining living standards with cheap-in-all-senses products from Asia, but good in the long run for almost all of the rest of us.
It will also help to allow the Bank of Canada to raise interest rates when the Americans do. By that time, their economy will have proceeded further in its advance, and our weak dollar will have helped us tag along. Interest rates will go up slowly and surely to help keep our new inflation in check, which won’t be a problem because the North American economy will be chugging along. And only the most over-leveraged among us will be crunched.”
—————————————————–
100% agree. What other option does H & F + S have?

With rates already rock bottom these three stooges are thanking their lucky stars events are unfolding in their favour, as talking the $ down only does so much. In addition, the above scenario will take the wind out of a significant, general RE correction.

I think you may realize this Garth, but have yet to accept it’s rationale.

PS: I sold my home five years ago (still out) expecting a RE correction.

#146 PoltawaDiva on 01.29.14 at 3:10 pm

#122 Temple

Humans have always been pattern-seekers; unfortunately we are usually wrong about where we find them. Our persistence in clinging to imaginary patterns is a failure of critical thinking.

___________________

Let me tell you a story:

A (blond) lady decided to spend some time in Vegas gambling. After getting $1000 in chips, she plopped herself at the roulette table and put the entire pile on number 23. The dealer looked at her dubiously, verified that was her choice and spun the wheel. Sure enough, 23 comes up, and she has a pile worth $37000 in front of her.
“You still in, Lady?”
“Of course, I’m just getting started,” and the entire pile of chips goes on the #23.
“Listen Lady, it’s really none of my business, but that is a big risk you are taking with a lot of money. Sure you don’t want to spread your bets?”
“Nope, it’s #23”
The Wheel spins The number 23 comes up. The chick is now sitting on over a million dollars. The dealer shakes his incredulously, congratulates the lucky lady.
She looks up, puts her entire winnings on #23 and smiles at him.
He shakes his head, mumbles something about the same number never coming up three times in a row in the twenty years he has been dealing, and spins. It’s #23!!!!!
The casino is broke. The owner comes out,. congratulates the winner and asks, “How did you know to put all of your money on 23?”
“It was fate. You see, when I checked into the hotel, I was given room #7 on the seventh floor. Then when I came down for a taxi, it was the seventh taxi that brought me to this casino. So, three times seven is 23.”

#147 economictsunami on 01.29.14 at 3:16 pm

Bill Mc Bride: FOMC Statement:

http://www.calculatedriskblog.com/2014/01/fomc-statement-more-taper.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

Ben stuck to his forward guidance/ taper guns.

Yellen could change her mind when the time comes.

That’s her prerogative…

#148 Shawn on 01.29.14 at 3:24 pm

THEY’RE RICHER THAN YOU THINK

Stats Canada today reports:

the 20% of households with the highest income reported spending an average of $151,506.

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

That is one in every five households are spending an average of over $150k per year.

At first I read that as 1 in five is at least at 150k, but this is just the average for the top 20%.

Maybe it is skewed by the few that spend a million?

But apparently a lot of holdholds do a LOT of spending.

#149 Enthalpy on 01.29.14 at 3:24 pm

and the stimulus cuts continue

#150 Shawn on 01.29.14 at 3:27 pm

Actually Stats Can counts paying income taxes as spending so that explains the $151k which otherwise seemed too high.

#151 bentoverpayingtaxes on 01.29.14 at 3:36 pm

In the case of the $C …TA has nothing to do with the fall of the dollar because none of the factors are market driven. The demise of the $C is purely a function of the Ministry of Finance and the hand picked meat puppet BOC using every device possible to drive down the dollar unilaterally.

The Cons focus on ‘balancing the budget’ depends on not paying back massive borrowing at market rates. Zero rates will allow the Cons to perpetuate the farce that money borrowed does not have to be accounted for. The way they are going to accomplish this is by sinking the $C and push rates back to zero to keep up borrowing at zero cost and blow the wad pandering to every special interest group with its hand out until after the next election. This gambit will only secure one thing for one Canadian….that is Mr Harper who will go down in the record books as Canada’s longest serving PM…after that…we can all go to hell.

#152 JL on 01.29.14 at 3:39 pm

The dollar tanking is great for Canada overall. Garth knows this, but he tends to be a half glass empty kind if guy.

Exporters will do better, Canada’s trade deficit will improve greatly, oil and gas and manufacturing will get a 10% boost and can continue to be less productive and efficient because of the “crutch” that is the weak CAD dollar.

Yes there will be an impact on consumer prices but it’s a one time increase commensurate with the fall in the dollar, it’s not ongoing, so it’s not as big a concern as inflation from expanding money supply which self perpetuates and creates anticipation for more inflation which alone drives up prices.

Actually higher consumer prices are a major, almost-immediate economic drag, and it will take at least a year of a weak dollar before we see any benefit from exports. The economy is 67% made up of consumer spending. Figure it out. — Garth

#153 Penny Henny on 01.29.14 at 4:17 pm

#144 Shawn on 01.29.14 at 3:01 pm

Any rich day traders?

Depends on the day.

#154 robert james on 01.29.14 at 4:19 pm

#144 Shawn You are right Shawn ,,there are probably no rich day traders.. BUT,, there are people that do their DD and take a chance.. I few months ago some one asked Garth for a ten bagger and seeing that he would not answer I did.. That was at .46 cents .. V.PTK ,,formerly V.OPL .. But don`t buy it if you are a chicken shit..

#155 Ralph Cramdown on 01.29.14 at 4:19 pm

#144 Shawn — “Plenty of rich value invesotes and even buy and holders, who are the rich traders?”

Yes, there are rich traders. Jack Schwager interviewed a bunch and published it in ‘Market Wizards,’ which every investor ought to read.

Colour me morbid, but on the off chance that I die tomorrow, I want my portfolio to keep ticking along making money until my wife can sort it out and get help. Just one more reason that I’m generally a value investor rather than a momentum trader. But it takes all kind to make a market.

#156 Victor V on 01.29.14 at 4:22 pm

I love the smell of taper in the morning.

http://www.nytimes.com/2014/01/30/business/federal-reserve-policy-decision.html

#157 AfterTheHouseSold on 01.29.14 at 5:01 pm

Jan 26 Loaves and Fishies
“Let’s wait a bit, I said and see if this truly is the correction I’ve been expecting. If it rebounds for a while, we’ll sit in a money market…”

Hi Garth,
Could you please give us an update on Jenny. Did she purchase her equities for her portfolio or is she still waiting? I think many here would be interested.

#158 Bottoms_Up on 01.29.14 at 5:10 pm

#146 PoltawaDiva on 01.29.14 at 3:10 pm
——————————————
Actually humans are very well honed into recognizing correlation (but the fallacy of humanity is that we often ascribe correlation to devine intervention). It’s enabled us to survive. Sun goes down and it gets dark. Thunder strikes, then lightning, then rain. The salmon run up the stream in the spring. The buffalo herd at X plain at Y time of year. Every close encounter with sabre tooth tigers has not gone well etc. etc.

Recognizing correlation and patterns is one thing, what each might mean is something quite different.

#159 recharts on 01.29.14 at 5:26 pm

#126 BCD (D for Doomer)
I love how 99% of people on this blog claim to make such HUGE paper profits and brag that it is “money in the bank” when the fact is that few cash out on time. If it is an investment you are bragging about than it is NOT really yours yet, and it is NOT cash. There is a big difference. I guess these people never heard the saying “a bird in the hand is worth 2 in the bush”. The fact is that greed causes most to hang on until they lose any additional pieces of pie they acquired. . .or the sheer stress of the investments negates any REAL gain in wealth.
Let me tell you a story. . .
The best way to invest is not to invest in other people’s schemes (read here: the entire financial system). The best way to invest is to invest in yourself, to learn to be frugal, to learn to live with less, to simplify ones existence so that meaning is found not in the assets/toys you own but in what you bring to the table as a person. Financial discipline is a hard thing to learn, but it is very valuable and will inevitably pay you more dividends than a balanced portfolio. I recently watched a good friend die and it struck me as incredibly odd that he was able to take NOTHING with him. After years of hard work he had been dealt a rough hand, got sick quickly, and died, and all I could think about is how he was naked in that hospital bed and without a shred of his hard work hanging to him. If you think you will outsmart the markets you are wrong, and if you make some money there is always a price to pay emotionally or psychologically. Take care of your body and mind, it is the last tool you will be left with, and even that will be taken away from you one day.

Best advice given here in a long time
However this is going to drop in deaf ears… most of the people around here believe that what they do is investing. It is mostly betting actually.

Here is a simple comparison:
A 300K at 8% return (Garth’s dream is what I call it ☺☺) will bring you 24K in a lucky year.
The problem is that you need to have those 300K.
No look around you, look at at you are and what you can do and see what you can do to improve your income with 24K/year by improving yourself. I assure you that it is a lot easier to go that way and the results are long term.

Another way to look at it: recently I have started looking at repeated sales in the To RE market. Guess what, there is two categories of repeted sales in a 1 year span:
-deals that did not go throgh initially -you can see them by a little change in price
-properties that sold for 450-550K and sold again for 200K more

The last sort of deals is relevant for our discussion here from two points of view:

1. I suspect that the average price is going up by renovations and resales not by appreciation as some would believe. This theory was first advanced here by T.O Condo Bubble and I believe it is true. I will be able to confirm that in a couple of months (need more data)

2. The ROI is a lot bigger in a renovation if you know what you are doing. This is a clear proof that if you use your money to invest in something that you fully control you will be fine This is what BCD is trying to tell you above.

I doubt that this will touch home for many around here but ..hey what would this world be if we all make 200K gross profit

#160 NorthOf49 on 01.29.14 at 6:04 pm

Looks like a coordinated national & local effort by the RE pumpers to promote the high-end residential market before Spring.

http://www.thespec.com/news-story/4338331–affordability-of-hamilton-drives-real-estate-market/

http://www.thespec.com/news-story/4339003-pricier-hamilton-burlington-homes-a-hot-commodity-as-toronto-money-moves-in/

The articles appear to be some of the most subjective ones I’ve yet read from the RE cartel. No mention of how many 2013 high-end sales were the result of rushed sales due to changes in CMHC limits or mortgage rate preapprovals. I suspect the intent is a big marketing push to convince sellers to begin prepping their higher-end homes for a Spring listing. Also doesn’t hurt to continue the spin with buyers that higher-end homes are still a good investment.

#161 jess on 01.29.14 at 6:09 pm

Are there etf for seaweed /burger franchises!
http://www.dutchweedburger.com/
http://www.wageningenur.nl/en/project/cultivation-of-seaweed.htm
http://truth-out.org/opinion/item/21411-the-dutch-weed-burger-vegan-fast-super-food

#162 Buy the house you can afford on 01.29.14 at 6:10 pm

My wife and I bought our first house, a small semi-detached for about $25,000, the budget we had at the time. Mortgage Interest rates were around 9%.

We preferred a small detached house overlooking the park – but, at $30,000, it was beyond our budget.

3 years later we bought our second house for $80,000; then interest rates shot up from 10.5% to a whopping19.5%. For a couple of years we had to trim our expenses and could not afford to buy even “fast food”.

8 years later we bought our third house for $300,000.

We paid off our mortgage soon after and today, 25 years later, house is worth about $1 million. (a tax-free investment, should we ever decide to sell, rent and spend the loot).

Moral: since you will always need somewhere to live, buy a home – BUT make sure it is one you CAN AFFORD IF MORTGAGE INTEREST RATES GO UP.

Lep Recon

#163 45north on 01.29.14 at 6:13 pm

Poltawa Diva: So, three times seven is 23.

I finally got it

#164 Blacksheep on 01.29.14 at 6:19 pm

“it will take at least a year of a weak dollar before we see any benefit from exports.”
————————————————-
My little Langley B.C. based business has already received new, US financed orders this month that are being manufactured on the floor, as I type. We used to do about 10% of our annual sales with this company, but in the last few years the work load dried up significantly due to competition (southern?).

The parent company of my customer that pays invoices is US based and I assume since my pricing structure hasn’t changed, they recognise our services are now 10 % cheaper than they were, six months ago.

Take this real life event and multiply it a 1000 times over, probably on a much larger scale and we can start to appreciate it’s potential impact on business, nation wide.

Low CAD is good for my business and is increasing sales today, not sometime in the future.

#165 Dean Mason on 01.29.14 at 6:28 pm

Canada bonds, 5 year is 1.57%, 10 year 2.36%, 30 year 2.94%.

U.S. bonds, 5 year is 1.50%, 10 year 2.68%, 30 year 3.62%.

The Federal Reserve cuts another 10 billion U.S. to now 20 billion U.S. a month in bond buying and bond yields fall fast and hard.

This means that the U.S., Canada economies are in slowdown mode and all this talk about bond yields rising is the same old 2 to 3 year spike that is just a short term move.

Look at a 5 year chart of these bond yields for the last 20 years, they are always lower.

#166 Stickler on 01.29.14 at 6:35 pm

@ #119 Macrath on 01.29.14 at 12:17 pm

“US trading is 70 per cent algorithmic trades by emotionless artificial intelligence. ”

———————————

You know these algorithms are just math based rules, right?

TA is too.

And who says it is not wise to use both TA and FA when evaluating a trade or investment!?

You wouldn’t use only one tool to build a house would you?

#167 bdy sktrn on 01.29.14 at 6:57 pm

#163 45north on 01.29.14 at 6:13 pm
Poltawa Diva: So, three times seven is 23.

I finally got it
——————————
HAHAHA , it’s a good one, but the first thing i thought was the non math peeps aren’t going to get it!
—————————————

My little Langley B.C. based business has already received new, US financed orders this month that are being manufactured on the floor, as I type.
————

what do you make in langley?

#168 Snowboid on 01.29.14 at 7:20 pm

#123 gladiator on 01.29.14 at 12:40 pm…

You would claim the amount you sold for (US converted to CAD) on your CRA return. Since you will already have filed your US return you would claim any capital gains paid to the US as an exemption in Canada.

Based on selling a home in the US for under $ 300,000 these costs are minimal.

In Arizona no state tax is due on the sale of real estate.

We understand that capital gains on larger RE purchases can be realized using a cross-border trust, but didn’t seem worthwhile for us.

#169 Macrath on 01.29.14 at 10:25 pm

#166 Stickler

I just don`t believe that any analysis is going to give a small fry Muppet like myself any edge in the market.

Have you see movie The Wolf of Wall Street. No math or analysis required just sales, racketeering and insider trading.

#170 Macrath on 01.29.14 at 11:03 pm

#166 Stickler
Pardon my English, that should have been “seen the movie”
This frontline report is also an eye opener.

http://www.pbs.org/wgbh/pages/frontline/to-catch-a-trader/

#171 rich young on 01.30.14 at 1:36 am

“Wow. Less than eighty. I sure hope you listened to this pathetic blog two years ago when our dollar was worth $1.05 US and houses in Phoenix and parts of Florida were selling for 40% of their 2006 stickers. Sell Canada, buy America. Remember that advice?” I just saw a realtor explain how the recovery in USA housing is simply a statistic that has been manipulated by the media with the backing of government. Foreclosures, which are usually a wreck that require funds to bring them up to liveable were flooding the market. so, in a small market 10 homes sold, liveable, $100,000 and 10 homes sold foreclosed $60,000 and required $40,000 in improvements to live in. $80,000 average price. All you need is fewer “crack shacks” and suddenly we see a price increase with no price recovery for the average owner. simply a statistic that looks good. 5 homes at $60,000 fixers and 15 homes at $100,000 move right in and the average selling price jumps 12% to nobody’s benefit.

Garth, you seem fixated on the American economic recovery which is a complete lie. Look up Palm Springs on Trulian from 100k to 130k and see how many homes you can buy… still cheap and still some bank owned. Furthermore, the stock market in the US has been propped up by cheap money and the fact that companies fail to meet expectations and buy their own shares at ballooning prices. Same thing up here. Look at RONA and they bought back a bunch of shares as you can see weeks ago a rise in stock price on big volume. now there is no one else to buy and it is going to fall a lot more. I’m short RONA 4,000 shares. I’m also long HFD.TO which shorts the CAD banks. I’m short a basket of US stocks.

Read the book by RUBIN and you will see what is coming as he thinks like me. You can’t trust a chief economist employed by a bank as he will be fired for telling the truth. So read RUBIN as he chose to write over continuing his work for CIBC.

And yes , your call to sell Canada and buy US real estate many years ago may have go a positive return but please don’t try to say that it gave you the best return on the planet. many things to invest in. right now im investing in canned vegetables and shorting stocks.

#172 confused on 01.30.14 at 4:02 am

I don’t get the last comment on Phoenix housing. Where the heck did that comment come from?

#173 Steven on 01.30.14 at 9:58 am

With all the federal deficits and the magnitude of debt in Canada it should come as no surprise that the dollarette is sagging. The dollar represents debt not equity. If the debt is too great to redeem or pay off then the currency is worth as much as the debt which means the currency isn’t worth much.

#174 ☢☢☢ Fake bidding wars in Toronto ☢☢☢ -please forward on 01.30.14 at 10:11 am

Fake bidding wars in Toronto: http://i.imgur.com/hqlqxxg.jpg Not so many in GTA. Please retweet. Fight the RE agents misinformation campaign

Follow these updates on twitter @recharts
Forward them to whoever might be interested.
Stop the RE agents from creating the false impression that there is bidding wars in Toronto!