The analyst

ANALYST modified

Here are six things you should reflect on this weekend, prior to taking whatever action you feel is necessary Monday.

The latest jobs numbers speak loudly.
The US economy is now throwing off jobs in a way not seen since the end of the 1990s, and this will probably have a material impact on your life. Last month alone another 248,000 positions were created, which means an average of 227,000 every thirty days so far in 2014. The unemployment rate in America is now below the 6% mark for the first time in six years. It’s the best job performance since 1999 and, significantly, people are working more hours.

Says Deutsche Bank’s chief US economist, this one factor means the economy added the equivalent of 600,000 new workers in September alone. American factories just had their best quarter for production in three years and consumer confidence is rising while house price gains are moderating. Meanwhile the federal deficit has shrunk to the lowest level in eight years.

There’s no doubt about interest rates now.
So, rates will be rising in the US earlier than thought – at least that’s what the bond market was saying on Friday. Yields were shooting and prices tumbling, because investors anticipate the cost of money will pop. It’s a fair assumption. The Fed will end its stimulus spending in a few weeks, which means $85 billion-per-month in 2013 will turn into zero. And yet the economy continues to improve and jobs are the proof.

So the Fed will drop the next shoe, and start normalizing rates. It won’t happen quickly, but it’ll be relentless once it begins, with the cycle lasting a few years. The same people who poured on to this blog to tell you stimulus spending would never end, will tell you rates will never rise. I hope they have day jobs. And I trust you locked in your mortgage.

Our economy’s in the ditch. Love your job.
The US is improving. We’re not. Job creation sucks here, and our one shiny thing – a surplus of exports over imports – is lost. There was a big deficit last month,  troubling when our dollar has faded almost 10% and should be helping to sell stuff to the world. The Bank of Canada had been hoping a big surge in exports would make up for the dismal mess we’ve made of household finances.

But, alas, not to be. Family debt levels are rising again each month after a brief pause, and the latest real estate board numbers from Vancouver, Calgary and Toronto help explain why. With cheap mortgages people just can’t help themselves. Our savings rate is negligible and spending is extreme. Incomes are flat and unemployment is now more than a full 1% higher than the US – which we mocked in 2010.

Commodities are being crushed. Poor gold. Poor Calgary.
On Friday as the US stock market and currency took off, our dollar was whacked again. It’s now worth 88 cents, in part because commodity prices are sinking faster than Doug Ford. As the American greenback accelerates, with demand from Europe and China weak and US production rising, oil is tanking. It’s now mired below $90 a barrel, and could lose another ten bucks. Suddenly the oil sands don’t look like money anymore. The cost of production may exceed the value of the crude.

Meanwhile gold and silver are squished with the yellow metal below $1,200, for a 37% loss in 36 months. So while the US stock market gained 200 points Friday, the TSX limped ahead less than thirty. Sure hope you rebalanced a month or two ago.

What the dollar says. Beware.
Here’s what this suggests. Higher US rates in the next few months, and swelling bond yields means fixed mortgage rates will soon increase followed by variable rate loans later. The lower dollar translates into higher inflation since the cost of all those exports just went up. At the same time we have a credit/asset bubble caused by absurdly low interest rates thanks to a weakening economy and your house-horny family members.

Consumer debt is excessive, houses cost too much already, and lots of people are idiots. As a leading US investment banker told a Toronto conference last week about Canadian real estate: “You have an overvalued asset that can correct orderly or disorderly – and the longer we keep rates this low, and the more we accumulate debt the higher probability it gets disorderly.” Houses here cost at least 20% too much, he said. That could go to 30%. “Then you have a swathe of people with negative equity on their house. You have all the kinds of problems we have down here in the U.S.”

In other words, given the choice between a weak economy and a housing crumple, it’s a no-brainer for the central bank.

Stay invested.
There are times when being liquid and flexible makes sense. This is one of them. Seems a fair bet that equity markets (especially in the US) will be higher in a year than they are now, even with swelling rates. Bonds and preferreds might lose some capital value, but will continue to pump out more interest and sustained dividends. Commodities have further to fall as the American dollar gains ground, and we know what that means. Well-balanced and diversified investors will do fine. Far better than our economy as a whole.

Will house values in Calgary, Vancouver and Toronto continue to thrive amid rising debt, higher rates and structural unemployment? Ask around this weekend. Tell me we’re not pooched.

223 comments ↓

#1 calgaryPhantom on 10.03.14 at 6:11 pm

Over the weekend, can i tell my wife that, finally, we will be buying a home in next 3 years?

#2 not 1st on 10.03.14 at 6:16 pm

Interesting analysis, but no comment about Europe or China? Seems like they could have an impact somewhere.

#3 saskatoon on 10.03.14 at 6:17 pm

but garth,

how many full-time jobs have been lost in as much time?

#4 rory on 10.03.14 at 6:20 pm

I don’t get the positives about the US job market …this from … http://jessescrossroadscafe.blogspot.ca/

“Stocks in the US came off support with a sharp rally based on ‘better than expected’ headline job additions number from the Non-Farm Payrolls Report.

The actual number of jobs estimated to have been added exceeded expectations at 248,000 vs. a consensus of 210,000.

The jobs that were added were weak, being low paid jobs being taken primarily by older people in the 55+ category service industry.

Wage growth fell short at “zero” as in stagnant, and losing ground in real terms.

There is no recovery. The financial sector continues to skim the life off the American economy.”

I believe Jesse’s comments on the job #’s but are you telling us to ignore this because perception not reality is what counts in the markets or that Jesse is way wrong. I am confused, still.

Jesse looks like a metalhead, so he’s confused, too. — Garth

#5 Piccaso on 10.03.14 at 6:21 pm

I haven’t played the Canadian markets for years.

The U.S. markets only.

#6 Derek R on 10.03.14 at 6:21 pm

Looks like October is going to be interesting.

#7 Diversified in Oakville on 10.03.14 at 6:26 pm

Hello Garth,
First time commenting on your great blog! I have been a faithful reader for about a year. Always great insight from your posts, and entertaining commentary from the Peanut Gallery.
I had my Financial Advisor rebalance about 6 months ago, waiting for the correction that appears to be here.
I read a few blogs ago about someone who paid for their home cash and took out a HELCO and invested it. Sound reasoning, so I plan to do the same when my 2.6% mortgage comes due in April 2015. Question for you or one of your readers: What are your thoughts on Wealthsimple.com? I have gone so far as to set up an account with them, but would love to hear some feedback on one of Canada’s first “Robo-Investment” companies. Thanks so much!

#8 CPG on 10.03.14 at 6:34 pm

Check out the top line in both of the following data tables from the Bank of Canada:

Latest household credit numbers in Canada (to the end of August, 2014)

http://credit.bankofcanada.ca/householdcredit

Latest business credit numbers in Canada (to the end of August, 2014)

http://credit.bankofcanada.ca/businesscredit

#9 Millenial on 10.03.14 at 6:34 pm

‘Meanwhile the federal deficit has shrunk to the lowest level in eight years.’

Ok, great. But when interest rates go up how is the US Government gonna pay the increased interest on their near $18 trillion dollar loans. I mean, yes, it’s good the federal deficit is shrinking, but it’s still a DEFICIT.

http://www.usdebtclock.org/

#10 Tailings pond bird on 10.03.14 at 6:36 pm

If I may reply to a couple of your points Garth.
Firstly, I don’t think it is so bad currently for those under appreciated oil companies as they are paid in USD.
Secondly, soon I don’t think the bank will have to decide between a housing bubble and a weak economy.

#11 TEMPORARY® Foreign Prime Minister on 10.03.14 at 6:37 pm

“…..Our economy’s in the ditch. Love your job.
The US is improving. We’re not. Job creation sucks here, and our one shiny thing – a surplus of exports over imports – is lost…….”
=========================

How repeatedly painful it always is to witness this country’s federally elected MP’s totally abandon their sworn patriotic principles, and prostitute themselves to the narrow-minded philosophies advanced by a group of self-serving lobbyists.

#12 jas on 10.03.14 at 6:38 pm

We are pooched!!!

#13 500 Days on 10.03.14 at 6:40 pm

Spot on, Garth.

We are indeed pooched. And by the time we see the death rattle of the 2016 spring market in about 500 days, it will be much worse than imagined.

I think you will even be revising your oft stated prediction of a slump rather than a crash.

Way too many people are over their heads in accumulated debt to survive this without financial catastrophe.

#14 sleepy Moncton on 10.03.14 at 6:41 pm

..and for a moment I thought I was missing something not living and working in T.O. or ‘out west’…. you’ve helped me and my family Garth.. you may not not it or care but you have. Thanks…. balanced and diversified in Moncton.

#15 harbottle is god on 10.03.14 at 6:42 pm

firrrrrrrrrrrrrrst

#16 sleepy Moncton on 10.03.14 at 6:42 pm

Know i

#17 sleepy Moncton on 10.03.14 at 6:44 pm

Frigging Spell check… and we’re rocking the the of 90…. yes cryptic, but you get it.

#18 View on 10.03.14 at 6:46 pm

Should I quit my oil n gas job and run for the hills Garth?

#19 T.O. Bubble Boy on 10.03.14 at 6:47 pm

So, what does well in the U.S. with a rising rate environment?

Insurance Companies? (who invest in bonds)
Consumer Discretionary? (since employment is high)
Industrials?
Short Duration Bonds?
others?

#20 Arfmooocat on 10.03.14 at 6:48 pm

Nice older millennial next door living with his dad, probably closer to 30 then 20…

… anyways he gave me a vehicle boost on my jimmy as it had been parked a month without driving cause of (company car) and we talked…

… he had a house, sold it and moved in with his single dad because in his own words. I JUST SAT IN THIS HOUSE I BOUGHT BECAUSE I HAD NO MONEY LEFT, F_ UK THAT !!!

#21 Figmund Sreaud on 10.03.14 at 6:49 pm

The US economy is now …
______________________

Yes! But, …. the U.S. Census 2013 Income and Property Report shows that real median income was 8% below the amount in 2007, the year prior to 2008 recession and has declined in the level to 1994:

http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf

Now, … this is not a very good news, or is it?

F.S.

#22 VICTORIA TEA PARTY on 10.03.14 at 6:49 pm

AND THE MEEK SHALL INHERIT THE EARTH?

Those would be the renters in a lot of places, of course.

Everywhere they go they will have soon the licence to brag to their hand-cuffed-to-the-real-estate-monster friends and relations, just how nice it is to BE ABLE to cut and run to a better job, a place to live, or to just plain breathe several sighs of relief!

At the other end of their trip all they need do is to rent again!

Smart people, very smart.

AS FOR…
…those who’ve been “buying” their condos and SFHs, and so on since 2009 let’s say, stand to lose their financial heads, so to speak, if they’re buying with zero down and so on.

The thing about the US Fed, that is worth remembering, is that it is relentless once it decides to move, in whatever direction.

We’ve seen three QEs since 2008, along with other “protections” for the US banking system.

And now, Grandma Yellen is spinning the wheel on the Good Ship Fed and is about to storm off on a new heading all the way to Normal Interest Rate Land.

Like St. Garth of I-Told-You-So-A-Thousand-Times, this voyage will take a few years. Sure hope she’s stocked up on enough water and sea biscuits!

So to all, a Bon Voyage as a new financial reality begins to take hold.

For some of you, please, hold on tight.

#23 blue steel on 10.03.14 at 6:51 pm

But…..but……real estate writers can only create bubbles.

#24 Happy Renting on 10.03.14 at 6:52 pm

Thanks for the up-to-date analysis of where we’re at, Garth. Your December advice still looks great:

http://www.greaterfool.ca/2013/12/13/choices-6/

#25 Robert Agnew on 10.03.14 at 6:54 pm

Remember folks it’s better with Harper.
Joe the undertaker Oliver is on the job as Finance minister .
Enjoy your tax cut in the soup line.

#26 Alberta Ed on 10.03.14 at 6:55 pm

Staple this to Gary Marr’s forehead.

#27 Eatin' Bonbons on 10.03.14 at 6:58 pm

Scary stuff ahead.
I have a fee advisor (relatively recent rel’p) who looks after the investments. Too complex for me to do it properly. I make sure to ask about balance, different sectors and markets, opposing investments so that if some get hit, others do well. I do my best to be informed and be prepared at the meetings, yet I still lose sleep about what’s ahead, and how much of a hit will come if the portfolio is not balanced and varied enough.
Where could I inform myself on what else can I do, or ask to be sure that things are as balanced as possible especially within the individual companies and selections?
Would paying a completely different advisor for a second opinion and suggestions on the Portfolio make sense or would that be nuts?

#28 Jan on 10.03.14 at 7:00 pm

Im sure realturds will just say, hey, lower dollar will attract a bonanza of overseas real estate investors from China for whom our houses are dirt cheap.
And so on and so on and so on …………………………

#29 NostyVlad the Snugglebombed on 10.03.14 at 7:02 pm

“Analyze This, Analyze That and and lots of people are idiots.” That’s a fair assessment of life in general.
*
#66 Smoking Man on 10.02.14 at 10:24 pm — “Now from a smoking man prospective all you need to do is blend in with the bastards, take there money. They are gullible as shit…”

Speaking of such, SMan, be truthful now — Is this you in the next worlds, the spiritual or after-life? (Two clips, start and end). Or we could join The Dull and Boring Men’s Club, where nothing ever happens!

#167 Blacksheep on 10.03.14 at 2:21 pm — “Well…other than, North Amercan Ebola, faux war on PJ ICEASS Ninja dudes, HK protestas, stalling global economy (USA excluded) and those silly climate weenie’s.”<

Do I hear higher taxes in the offing? Yes! The gentleman in the back is correct! BTW, there are some truly delusional and dysfunctional walruses in the world!

Back To The Future Chart is interesting, esp. for the two years — 1929 and 2012. One town in California is now completely out of water, and this is happening in Hawaii.

A couple of months ago, Brazil, Holland, Germany and Argentina were in the World Cup semi-finals. Now, German / Dutch bank bail-ins, Argentina and Brazil defaulting, but Holland has got some hooker’s knickers in a twist.

#30 Peter on 10.03.14 at 7:02 pm

Re: US employment numbers.
Ok, this from ZH; which I admit that is perhaps not the most reliable source in the world. However…
“And while according to the Household Survey, 232,000 people found jobs, what is more disturbing is that the people not in the labor force, rose to a new record high, increasing by 315,000 to 92.6 million!”
http://www.zerohedge.com/news/2014-10-03/labor-participation-rate-drops-36-year-low-record-926-million-americans-not-labor-fo

#31 Smoking Man on 10.03.14 at 7:06 pm

Ground Hog Day again….

This Friday night loop never ends…

Trade balance in the negative, job creation soft in Canada.
Sure bond market sold off a bit.. But for the last week it’s been on fire…

Relax owners, almost. 100 million people out of work in the USA, and 80% of jobs where min wage..

What we have is shiny new icing on a rotten cake South of boarder…

Maybe we should worry about the crumbs here. — Garth

#32 High Plains Drifter on 10.03.14 at 7:24 pm

Canada puts it’s big toe in the head chopingest place in the world, should be worth a scratch of the old money making noggin. G.W. Bush fought a big money making war, for the few who played it right. Pst. i hear jets are having new anti-grav units installed to cut fuel use by 88%.

#33 Helen on 10.03.14 at 7:31 pm

#4 Rory

Here’s another look at the US economy from a more reputable source. It’s an easy read and clears a few things up.

http://www.marketplace.org/topics/economy/whiteboard/phillips-curve-and-jobs-numbers-explained

#34 Happy Renting on 10.03.14 at 7:35 pm

#27 Eatin’ Bonbons on 10.03.14 at 6:58 pm

You could post your circumstances and allocation here in a comment and let the blog dogs (some very experienced and knowledgable) weigh in, for free. Garth doesn’t put up a new blog post on Saturdays, so they’ll need something to do.

#35 waiting on 10.03.14 at 7:38 pm

I found this interesting on several levels …
Ben Bernanke (former federal reserve chairman) can’t refinance his own mortgage.

He’s 61 years old, bought his house in 2004 for $839,000 and has refinanced twice, the last time for $672,000 in 2011. He makes a LOT of money – I can’t believe he would even make public the fact that he’s looking for re-financing.

http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tough-market-when-ben-bernanke-can-t-refinance.html

#36 Nemesis on 10.03.14 at 7:40 pm

#Pooched? #Oddly,That’sWhatCharltonSaid,Too… #TrueLiesOfSpecialInterestToJamieLeeAficionados. #ItEndsWell… #AfterATenseEncounterOrTwo.

http://youtu.be/LkWoqRlGqNQ

#37 Freedom First on 10.03.14 at 7:59 pm

I think being diversified, balanced, liquid, and debt free is always a good place to be at any age. I see debt as being either taken on by the 3 deadly mental twists of the I want it now mentality or by the just as deadly twins of fear and greed. Debt is like a contagious disease in our society as it has become acceptable/normalized by the masses. I always put my freedom first.

#38 Nemesis on 10.03.14 at 8:03 pm

#Erratum… #iOS8.02Cut&PasteFailure. #CorrectLink:

http://youtu.be/F_mvf6k-QnM

[NoteToGT: Just between the two of us, though… The accidental first link does afford a rather amusing and revealing look at a former member of the House of Lords. Small wonder Conrad Black was so desperate to enjoin that AugustBody. Yikes! My CP-140 Aurora has just arrived… ToBeContinued…]

#39 Ben on 10.03.14 at 8:13 pm

Hi Garth – I’m genuinely confused by this part:

“In other words, given the choice between a weak economy and a housing crumple, it’s a no-brainer for the central bank.”

Do you mean they will hold rates low? I ask as this is what the UK did and we have yet to have a crash and I’m sure they will continue to keep them low which will see GBP tank and inflation rocket.

#40 Smoking Man on 10.03.14 at 8:13 pm

Maybe we should worry about the crumbs here. — Garth

Dude, I pick pennies off the ground, and will eat icing where ever I can get it.. Even though a bit of a zillionaire.

That first bankruptcy.. Taught me alot..

#41 Innumeracy Chick No More on 10.03.14 at 8:15 pm

I’m feeling confused. So what do I sell/buy to rebalance? :(

Here is portfolio:

http://www.google.ca/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1412381147884&chddm=75854&chls=IntervalBasedLine&cmpto=TSE:ZDJ;TSE:ZRE;TSE:XIN;TSE:CPD;TSE:ZLB&cmptdms=0;0;0;0;0&q=TSE:XBB&ntsp=0&ei=LzcvVIj9Dcf1qAHT3IGoCg

I’m thinking I sell some Canadian equity and buy more US equity….but the rest I’m confused?

#42 Don Derc on 10.03.14 at 8:19 pm

A slow down / reduction in pockets only! And it has already happened in certain areas of the country….slowly and quietly. It will be a slow thud but no crash. Ontario has taken the brunt and will continue to do so. It’s Cdn Mfging Month in Canada and tours of Vcr OEMs show robust 2 shift – a – day activity. Yes Edmntn is one shift a day and eerily quiet. I don’t see the Cdn gov’t letting too much pain into the marketplace. Call it QE, call it Gov’t budgetary welfare but 2016 will be the time when “the horsemen draw nearer”….a slow painless ride to the bottom over 24 months…..

#43 Bob Copeland on 10.03.14 at 8:30 pm

#9
The US deficit might be going down but our debt isn’t. It has grown from $16.7 trillion to $17.7 trillion in the last year. The difference I understand is off budget items such as our wars.
Out of sight, out of mind.

#44 Dr. Mike Hunt & Nurse Pat Magroin on 10.03.14 at 8:31 pm

“#22 VICTORIA TEA PARTY on 10.03.14 at 6:49 pm
AND THE MEEK SHALL INHERIT THE EARTH?”

We’ve taken care of everything
The words you hear the songs you sing
The pictures that give pleasure to your eyes
It’s one for all and all for one
We work together common sons
Never need to wonder how or why

We are the Priests of the Temples of Syrinx
Our great computers fill the hallowed halls
We are the Priests of the Temples of Syrinx
All the gifts of life are held within our walls

#45 mortgagebrokeron on 10.03.14 at 8:34 pm

#7 Diversified in Oakville ….. why don’t you just put a Heloc behind your first mortgage today? You can get them sometimes for prime or prime plus .25%….

If you qualify, you can put it up to 80% of the value of your home now….

#46 Terrier on 10.03.14 at 8:35 pm

Although I agree we’ll have a massive housing correction in Canada IMHO the US economy is not doing so well either. Latest reports indicate there are almost 100 million unemployed Americans. Likely this number doesn’t includes those poor souls that just gave up on job search. Anyway, at least they’re adding jobs rather than shedding like us …

#47 Sheane Wallace on 10.03.14 at 8:38 pm

Weak CA dollar was expected. It will decline further the long term trend is down. What other way to maintain the ridiculous asset valuations than for the currency to decline?

Pull pack in commodities was expected but it will be short lived. Might be good time to buy on 10-15 % decline in energies. Long term trend is still up.

Gold and specially silver valuations are ridiculously low but the interesting part is that there could be further 20-30 % decline in both. If that happens it would be a good opportunity to buy some at these lower levels.

Euro might decline temporarily but will rebound.

US dollar would have temporary strength but the long term decline trend will continue.
All these jobs in US are highly questionable (read Paul Craig Roberts) and are ultimately low paid service jobs.
But US large internationals would thrive.

Interest rates increases would be only symbolical, not meaningful.

Despite the upbeat tone the fundamentals (decline of manufacturing, peak debt levels, outsourcing) are not changing, the reality of two economies – one booming for the rich and the other – shrinking for the poor is becoming more and more evident courtesy of the central bankers. We need fairness and market interest rates, not suppression and theft from the savers.

People on fixed income are doomed.

#48 Sheane Wallace on 10.03.14 at 8:42 pm

And by the way staying invested makes sense but for totally different reason, mostly as inflation protection vs. the ‘booming economy’ bull crap.

We are in structural depression (as there is no other way to handle the fallout of extraordinary credit expansion) but masked by inflation still through expansion of credit.

Normal interest rates are not possible, The future is of stagnation and high inflation to render the debt and the savings irrelevant.

I would expect higher taxes at the end as somebody need to pay for baby boomers.

#49 Jan on 10.03.14 at 8:48 pm

to decide between a housing bubble and a weak economy.

WHAT DOES THAT MEAN.

#50 Trojan House on 10.03.14 at 8:50 pm

35,300 new retail trade jobs.

16,000 new construction jobs.

500 new jobs in heavy and civil engineering.

6,000 new jobs in architectural & engineering.

4,900 computer systems jobs.

81,000 professional & business services jobs of which 60,000 are administrative & waste services, primarily temporary help services.

22,700 healthcare & social assistance jobs, of which 63% consist of ambulatory health care services.

7,200 performing arts & spectator sports jobs.

20,400 jobs in bartending & waiting.

22,000 jobs in state governments.

230,000 of the September jobs, or 93% of 248,000 jobs created were filled by those 55 and older.

Employment of prime working age of 25-54 years old declined by 10,000 jobs.

#51 x-moose on 10.03.14 at 8:56 pm

Great employment numbers, yet just below the surface is this: (curtsey of http://www.zerohedge.com/news/2014-10-03/hiring-grandparents-only-230k-september-were-added-55-69-age-group-10k-lost-prime-25)

The further one digs into today’s “blockbuster” jobs report, the uglier it gets. Because it is not only the participation rate collapse, the slide in average earnings, but, topping it all off, we just learned that the future of the US workforce is bleak. In fact, with the age of the median employed male now in their mid-40’s, the US workforce has never been older. Case in point: the September data confimed that the whopping surge in jobs… was thanks to your “grandparents” those in the 55-69 age group, which comprised the vast majority of the job additions in the month, at a whopping 230K.This was the biggest monthly jobs increase in the 55 and over age group since February!

What about the prime worker demographic, those aged 25-54 and whose work output is supposed to propel the US economy forward? They lost 10,000 jobs.

Of course, don’t expect any of this to be mentioned on any financial entertainment outlets: it would spoil the party of today’s “surging” jobs day.

#52 Shawn on 10.03.14 at 8:59 pm

Deficit down but debt up?

Bob Copeland says

The US deficit might be going down but our debt isn’t. It has grown from $16.7 trillion to $17.7 trillion in the last year. The difference I understand is off budget items such as our wars.
Out of sight, out of mind.

**************************************
Debt continues to rise as long as annual deficit exists. Debt rises slower with smaller deficit. Mystery solved.

U.S. debt is likely declining now as a percent of GDP.

Don’t worry about U.S. debt, worry about yourself. It’s your job to do so.

#53 Shawn on 10.03.14 at 9:00 pm

Trojan House at 50 on U.S. jobs figures

Probably sees a cloud in every silver lining.

#54 Trojan House on 10.03.14 at 9:13 pm

#53 Shawn

Not saying the numbers are bad or good. Just providing them for people. You assume that by me posting them, I’m trying to point out what you are obviously assuming, by your comment, to be bad job numbers.

#55 Blacksheep on 10.03.14 at 9:18 pm

“Canada had been hoping a big surge in exports”
————————————-
Can’t speak for the nation, but in my little Machining / Repair business is hopping. (my manufacturing customers, sell to the now busy, US)
————————————-
“On Friday as the US stock market and currency took off, our dollar was whacked again. It’s now worth 88 cents”
————————————-
All right, 8 more cents to my target.
————————————-
“Meanwhile gold and silver are squished with the yellow metal below $1,200, for a 37% loss in 36 months.”
————————————-
Yes! This day just keeps getting better. Single digit silver, here we come.
————————————-
“Tell me we’re not pooched”
————————————-
Well…I can’t speak for we, but I know I’m not pooched and of course, that’s what matters (to me).

#56 Dirty debtor on 10.03.14 at 9:34 pm

Notice the spike in jobs just as the US announces long term action to take place again in the Middle East ?

No different than how ww2 lifted us out of the depression, war is the best thing for a stagnant economy.

When saying grace, thank Jesus for the good fortune of being born in the west, but remember to thank Allah for keeping the food on the table.

#57 Worry About the Herd on 10.03.14 at 9:48 pm

I’m a contrarian – let’s get that out of the way.

I hear what people are saying, low quality jobs, part time, older workers….ok that’s all true.

It’s not what moves the herd. The herd was told today 250,000 new jobs, 2.5 million in the last year.

So the herd moved. You think they are being led to slaughter. A few, maybe. Most will survive and thrive.

You do not have to like the game to benefit from it.

But you should play. It’s why we are here.

As much as it pains me to type, some SM comments are valid and worth pursuing.

If you succeed at the game, you can do whatever you want, even bitch about it.

#58 WhiteKat on 10.03.14 at 9:50 pm

@ NONE, re: your comment #175 from http://www.greaterfool.ca/2014/09/30/its-not-working/

If my Canadian parents had “had me” in China, Australia, India, France, Greece, Mexico, Italy, Zimbabwe, or any other non-US state, your comment would have either been on probation or deleted.

#59 Harbour on 10.03.14 at 9:52 pm

Looks like there’s a few indebted Canadians concerned about good job numbers and economy with our neighbours?

#60 CPG on 10.03.14 at 10:03 pm

“Throughout the markets, liquidity issues are becoming a growing concern. Increasingly, operating with leveraged bets in global currency and securities markets is akin to cavorting through a minefield. Unsettled markets have arrived on U.S. shores. This week saw already weakening speculator hands lose some brawn. This ensures ongoing volatility throughout global markets – boosting the probability of a market accident. Of course, our adroit monetary authorities would never allow that. A market pundit suggested the Fed would be ready to respond in the event Ebola became a major threat. Now that’s comforting.”

http://www.prudentbear.com/2014/10/the-new-mediocre-neutral.html

#61 Randol on 10.03.14 at 10:08 pm

Whitecat, are you still trolling, I thought you were in hiding by now? Come on down to where the taxes are favorable and the sun always shines. Life is short and you worry way too much.

#62 Renter's Revenge! on 10.03.14 at 10:15 pm

“to decide between a housing bubble and a weak economy.
WHAT DOES THAT MEAN.” – #49 Jan

NOT THAT COMPLICATED. It means either raising rates and risking slowing the economy, 25% of which is based on housing (retarded, I know), or letting the bubble inflate, then crumple, dooming all of us to hewing wood and drawing water (instead of just some of us – ha!) They’re stuck between a rock and a hard place.

#63 Sheane Wallace on 10.03.14 at 10:21 pm

#55 Blacksheep on 10.03.14 at 9:18 pm
————————————-
“Meanwhile gold and silver are squished with the yellow metal below $1,200, for a 37% loss in 36 months.”
————————————-
Yes! This day just keeps getting better. Single digit silver, here we come.
…………………………
That would be absolutely fantastic.
I prefer the low single digits, maybe 3 or 4.
Ops, I forgot, that maple leaf has 5 $ monetary value after all, so it would be I guess in the higher single digits. Maybe 6 or 7. That will make a crappy bungalow in Toronto/Vancouver worth over 5 + tons of silver.

One can built solar plant of several hundreds of kilo watts with that silver. Ops, I forgot the oil and shale revolution in US, so no solar panels after all, so the price is firmly 5$ per ounce silver.

#64 Ole Doberman on 10.03.14 at 10:27 pm

Gartho, I’ve been averaging down on my gold and bitcoin investment for several months. My prediction is no market goes down forever and the commodities will be making the next leg up soon.

Thoughts?

Pooched. — Garth

#65 Smoking Man on 10.03.14 at 10:27 pm

DELETED

#66 Smudgekin on 10.03.14 at 10:32 pm

It’ll be like the 90’s again with Canadians flocking south for jobs.

#67 Inglorious Investor on 10.03.14 at 10:34 pm

# 52 Shawn on 10.03.14 at 8:59 pm

“U.S. debt is likely declining now as a percent of GDP.”

Well, here it is. Get out your magnifying glass.
http://research.stlouisfed.org/fred2/series/GFDEGDQ188S

#68 Smoking Man on 10.03.14 at 10:42 pm

I do some community service and you delete it.

You demented bastard..

What, you give wife poo the delete button.. Your not worthy of a Harvey..

#69 Smoking Man on 10.03.14 at 10:45 pm

A harley I ment. Wheres my room…

#70 LifeXpert on 10.03.14 at 10:47 pm

#57 Worry About the Herd on 10.03.14 at 9:48 pm
I’m a contrarian – let’s get that out of the way.

I hear what people are saying, low quality jobs, part time, older workers….ok that’s all true.

It’s not what moves the herd. The herd was told today 250,000 new jobs, 2.5 million in the last year.

So the herd moved. You think they are being led to slaughter. A few, maybe. Most will survive and thrive.

You do not have to like the game to benefit from it.

But you should play. It’s why we are here.

As much as it pains me to type, some SM comments are valid and worth pursuing.

If you succeed at the game, you can do whatever you want, even bitch about it.
—————————————————————

Well said, very well said

Especially “if you succeed in the game, you can do whatever you want” see it day almost everyday.

It is the way our society functions.

SM is also correct, whenever he wants to make sense :)

#71 Inglorious Investor on 10.03.14 at 10:47 pm

#56 Dirty debtor on 10.03.14 at 9:34 pm

“[…] war is the best thing for a stagnant economy.”

Destruction is good for the economy? How about we just completely destroy our cities every 10 years and rebuild. Why, we’d all be stinking rich!

It’s a fallacy that war is good for the economy. It only appears to be good for the economy when it’s the Others’ city that gets destroyed. But a generation of people get saddled with debt that was used to produce nothing of real or lasting value.

When Sandy whacked the US east coast, the smart asses on business tv said rebuilding would boost the local economy. Nonsense. While some do benefit, in aggregate it only depletes resources and does little more than pull forward future demand.

Destruction is not the basis of a strong economy. Building wealth is.

One more thing: Smedley Butler, one of the most decorated war heroes in American history, explained almost 80 years ago how war (his occupation) was a racket. It was true then, it’s true today.

#72 ozy - STAY CALM AND CARRY ON! on 10.03.14 at 10:48 pm

STAY CALM AND CARRY ON!
STAY CALM AND CARRY ON!

Don’t listen to the over-rational folks. When dealing with people….

Subjects of her Majesty! I repeat:
STAY CALM AND CARRY ON!
STAY CALM AND CARRY ON!

Garth, publish Chicago, SF, Boston top-area prices and let STUPID us make the judgement call. Apples to apples. Leaside to their Leaside, city by city.

FOLKS- 20 y from now, I feel we’ll be at 3 mil per single detached home in core Toronto.

#73 Calgary? No problem on 10.03.14 at 10:54 pm

Mortgages in Calgary are NON-RECOURSE, so people will just walk if they can’t pay anymore. Problem solved!

By the way, I’m NOT from Alberta, but just sayin’…

Nobody walks away from a CMHC mortgage. — Garth

#74 Calgary? No problem on 10.03.14 at 11:03 pm

Hi Garth,

I was very surprised to read this, but it was yesterday in an article by National Post, I believe. They were quoting Joe Owe in an interview and he said that mortgages were non-recourse in Alberta.

Are there any exceptions, say for those that did NOT go through CHMC for their loan?

#75 Retired Boomer - WI on 10.03.14 at 11:03 pm

I don’t know if Canada is “Pooched.” that may be too harsh a term, since I am not entirely certain how to interpret “pooched.”

Would you be in a better position had interest rates not bottomed so low? Had your leaders not followed the US into a man made housing bubble with longer amortization, and cheap loonies? Maybe didn’t follow the “sub-prime” idea of qualifying people whose only claim to fame was the ability to fog a mirror?

Yeah, probably. However, your politicians respond to the same forces our twits respond to money, and power. They prefer not to loose either, and to gather more of the former.

That having been said, it is YOU the individual who is in the end totally responsible for your plight. Light on the debts, with growing savings, or one of those who is loving from one borrowed pay check to the next. If you might be in later described group, perhaps the “pooched” term fits you well.

Our countries are really quite similar, its people virtually interchangeable. Only the cheese heads can identify a bubbler by its ‘true’ name, not as a drinking fountain.

#76 Nomad on 10.03.14 at 11:11 pm

Doubled my $HXS position this week on the big dips. That’s the SP500, hedged to our dollar. Also bought some more of SOCL, GEX, VFH when investor were browning their pants.

Makes sense to be optimistic about the SP500 relative to our market (40% in oil and material) and to europe.

BNN today invited Timbercreek, a canadian short-term mortgage company. Likely best to stay away. Interest rate sensitive, but also a small company. Buy US banks instead with BMO’s ZUB. That sector will profit from higher rates. Plus as we learned this week, there’re in bed with Obama’s regulators!

#77 MountainRoad on 10.03.14 at 11:13 pm

From another blog…

http://www.paulcraigroberts.org/2014/10/02/poverty-report-contradicts-gdp-claims-paul-craig-roberts/

http://www.paulcraigroberts.org/2014/10/03/bad-news-jobs-front-paul-craig-roberts/

#78 Tom from Mississauga on 10.03.14 at 11:37 pm

Is it just me or has both Harper and the Big O backed off the balanced budget thing?

#79 Mr Stats on 10.03.14 at 11:40 pm

Mortgage debt is growing by an annualized rate of 6.8%

—> means $85 Billion per year

——>means $234 Million per day!!

———>means on average 780 Homes purchased with $300,000 mortgage per day!

#80 jon on 10.03.14 at 11:45 pm

Hey Garth, if the interest rates in the US rise, wont that KILL corporate profits as several of the huge conglomerates are carrying massive debt loads and have been heavily subsidized by all the cheap money that is about to end?

Wont that have a major bear affect on the DOW?

#81 meslippery on 10.04.14 at 12:03 am

I would like to point again because Iam old.
When house,s where less than four years gross pay
and gas was 50 cents wages wore almost the same as
the min. wage now. Me thinks thats the problem.

#82 Tony on 10.04.14 at 12:09 am

Re: #19 T.O. Bubble Boy on 10.03.14 at 6:47 pm

Long term bonds as America sinks into the recession they never came out of. If anything coming out of America was true (which it is not) Ontario Canada would be benefiting. Ontario is going right down the drain.

#83 experienced.optimist on 10.04.14 at 12:10 am

An interesting take on Non_recourse loans. It’s different this time!

http://www.cnbc.com/id/100736121#.

#84 Kenchie on 10.04.14 at 12:15 am

#50 Trojan House on 10.03.14 at 8:50 pm

“230,000 of the September jobs, or 93% of 248,000 jobs created were filled by those 55 and older.”

Thanks for your breakdown of the numbers. This one above is particularly fascinating. It’s an amazing stat if you think about it. It’s, generally-speaking, more difficult for older workers to get a job as technology changes, managers may be younger, and pay may be lower than they previously had.

As unfortunate as the 25-64 stat is, I think the 55+ is a bright spot that outshines the negative in this data set. Particularly since it is estimated that about 10,000 boomers are expected to enter retirement each day (or about 360,000 per year leaving the work force).

Of course, these older workers could be doing menial jobs… but it’s still better than no growth in this cohort.

Another interesting stat I found is that the US labour force has grown by about 925,000 people in the 9 months to September, despite the roughly 300,000 per month (or 2.7 million) boomers that were expected to retire this year.

#85 Tony on 10.04.14 at 12:16 am

Re: #67 Inglorious Investor on 10.03.14 at 10:34 pm

It’s headed for 400 percent of GDP just like Japan. In 3 to 5 years they should be there.

#86 chapter 9 on 10.04.14 at 12:24 am

Garth’s view on oil prices is pretty much right on. The Saudi’s just cut the price by a buck a barrel to their Asian customers and 0.40 cents a barrel to Europe and US. Other OPEC members will have match these prices and crude inventory is high, Europe’s economy is in tank and China is slowing. And toss in the fact that these oil producing countries don’t exactly like each other-well- oil dropping into low 80’s high 70’s is a real possibility.
Alberta runs on oil!!!

#87 CPG on 10.04.14 at 12:31 am

“People will look back at this period and have a really difficult time comprehending how so many intelligent people were convinced that central banks creating Trillions of new “money” out of thin air to buy securities was somehow accepted as “enlightened” policy.”

http://www.prudentbear.com/2014/10/the-new-mediocre-neutral.html

#88 Kenchie on 10.04.14 at 12:39 am

#77 MountainRoad on 10.03.14 at 11:13 pm
“From another blog…”

GT>PCR

#89 Kenchie on 10.04.14 at 12:59 am

And for all the people who poo poo on the large number of part-time jobs that have been generated, please read this as a reminder that they are better than no job:

http://www.bloomberg.com/news/2014-10-03/payrolls-in-u-s-effectively-up-by-about-600-000-as-hours-climb.html

It’s important to realize that part-time jobs can be converted into full-time jobs without a “new” job created. Therefore, they won’t show up in the numbers on a monthly basis. It’s also much faster and easier for companies to throw in an extra hour here or there for the “underemployed” when demand picks up. Hopefully, this will continue.

#90 Retired GenX on 10.04.14 at 12:59 am

Feel sorry for all those pro-gold and pro-gold mining company individuals. They’re pooched.

CAD goes to 0.80 USD at the end of 2015.
Gold falls below $1000 per oz.

#91 TakingResponsibility on 10.04.14 at 1:18 am

RE: “Commodities are being crushed….. oil is tanking. It’s now mired below $90 a barrel, and could lose another ten bucks.”

Awww…making me all nostalgic for the good ol’ days when every single Albertan got a $400 Ralph cheque to celebrate Oil At $40 a Barrel!!! Seems like only yesterday. 10 years ago? I know it was before 0 and 40….

#92 nonplused on 10.04.14 at 1:19 am

Although no one can argue with what oil prices are doing right now, I don’t think they stay down for long. Fracking is not all the oil companies are saying it is. Big names like Shell have already given up. Fact is the EROEI (Energy return on energy invested) is pretty crappy for fracking oil. Gas is bad too but not as bad, gas can migrate to some extent through the shale but oil pretty much cannot. Anyway not to go into the details but fracking for oil is a Ponzi scheme much worse than the oil sands and it cannot be financed indefinitely. The EROEI for solar is better, and it’s not great. So “buy the dips”, but not companies that are trying to frack in the US. Instead stick with the Exxon’s and BP’s who are exploring the arctic in Russia despite the sanctions. They know something you and the asshole who is flogging the Balkan don’t. If the Balkan was half what they say it is then Exxon wouldn’t be in Russia. They could buy the whole thing tomorrow cash.

Oh ya, buy the oil sands on dips too. But wait a while for the frackers to spend their cash on negative returns. Eventually they will have to report it.

#93 Son of Ponzi on 10.04.14 at 2:13 am

#50 Trojan Horse Guy
230,000 of the September jobs, or 93% of 248,000 jobs created were filled by those 55 and older.
Employment of prime working age of 25-54 years old declined by 10,000 jobs.
————–
This my Greek friend is the problem.

#94 Son of Ponzi on 10.04.14 at 2:15 am

Tales of Two Cities

Despite the million $ homes, Richmond is not so rich.
It’s actually a disgrace.

http://www.richmondreview.com/news/277674091.html

Richmond received a D in all health categories—including hospital bed availability and access to family doctors—and was the only city outside Ontario to receive the low grade.

The study ranked Richmond nearly at the bottom in the housing category. Only Victoria scored worse. Poor indicators included income spent on mortgage and rent, meaning the total household income spent on housing in the 2011 census year was among the worst in Canada.

Income inequality also earned Richmond a D grade. The city ranked 48th in one poverty indicator that signals a high percentage of the population is classified as low-income.

Richmond also ranked near the bottom in the study’s measure of success of foreign-born residents, comparing the average income of university-educated immigrants to that of Canadian-born residents.

#95 a prairie dog on 10.04.14 at 2:59 am

“And I trust you locked in your mortgage.”

– – –

Just made the last mortgage payment Oct 1st. :)
(13 yrs on a 25yr amortization)

And [email protected] couldn’t stop congratulating me because she said most people are increasing their debts instead of paying them off.

Current home value at 25% of net worth.

So far, so good.

#96 Waterloo Resident on 10.04.14 at 4:33 am

Its odd but even with today’s huge move up for the DOW, my indicator signals still don’t point to any ‘Buy’ signal just yet. Two of the 7 indicators are coming close so there might be an ‘all-clear’ to buy come Monday, but not yet. I have not been listening to the signals and 5 days ago I bought a lot of CP shares (the railway, but in U.S. dollars). First the prices went up, then crashed below what I bought them for and I kicked myself for NOT waiting for a ‘buy’ signal, but then the next day they shot to the moon and are still shooting higher even today. While the U.S. economy improves so should the bottom line for railways, that’s why I bought CP stock, its because I believe that the U.S. economic recovering is finally building up steam.

As for oil prices: I hope they stay down for as long as possible, it makes life easier for everyone when we have cheap fuel.

#97 Grantmi on 10.04.14 at 7:34 am

#69 Smoking Man on 10.03.14 at 10:45 pm
. Wheres my room…

It’s not big enough for your head….

#98 maxx on 10.04.14 at 8:17 am

Supercilious Canadian arrogance. Serves us right.

Time for the cb and finance ministers to store away the tutus.

#99 Sublime on 10.04.14 at 8:41 am

U.S. Participation Rate is at lows last seen in 1978. I believe their job market has a long ways to go before normalizing. Cheers Garth, I love your blog.

#100 };-) aka Devil's Advocate on 10.04.14 at 9:18 am

There are the things you can control in your life and then there are the things you can’t control. If you obsess over the things you can not control your world will become very small. If you focus on that which you can control you will find that you have control over more and more and those things you can’t control become increasingly less important.

SHIFT happens. Learn to ride the tide.

#101 Edward on 10.04.14 at 9:22 am

Garth, your comments about a housing slowdown and a stagnating economy in Canada appear to be coming true.

But also as a financial advisor, do you fear that your predictions may be viewed as an attempt to steer readers of your blog towards seeking out your services?

I’m trying yo ask that in a respectful way.

(a) My views do not change because of my day job. (b) This a non-commercial site and there’s no sell. (c) Better-informed people will make their own good choices. — Garth

#102 takla on 10.04.14 at 9:29 am

re #90 retired genex..gold falls below 1000.00
another crystal ball gazer lol .If ..big if,it does fall to 1000.00 and can.$ drops to 80 cents the gold buyer who purchased @ par with their can $ just made 20 %.As all gold /silver purchases /sales are priced in US $.
don’t you worry Genex,gold will take care of itself and follows the deflation/inflation curve and roughly gives the same value today as it did 100-6000 yrs ago…cant say the same for our fiat $$…hows that 80 cent dollar working for you??

Gold is dead money. The losses are huge. Wake up. — Garth

#103 takla on 10.04.14 at 9:40 am

re garth “gold is dead money”…whats your time line on this opinion garth?Is it dead money for the next 6 months,1 yr,10 yrs?what do you know that the gold investor/mining companies/central banks all those invested and accumulating don’t know?
You’ve never stated a reason for your opinion other than holding gold doesn’t pay you ,unless of course you bought sub 500-600 and held,in which case your up 100% @ todays price.Enquireing minds want to know!

Most people who come here want to hold assets that will build their net worth in a consistent and useful fashion, generate income, finance their lives and help them make the most of their limited time in this world. Gold cultists are hoarders, not investors. You have lost your way. — Garth

#104 Edward on 10.04.14 at 9:43 am

# 101

Thank you for response Garth. An honest reply speaks volumes. Appreciated!

#105 Edward on 10.04.14 at 9:56 am

As many in Canada, I’ve been one of those that has concentrated all my assets in one place – my house. I’ve always been a bit suspicious of financial markets. I just sold my Vancouver house. I did pretty well.

Now, I’m scared that it’s very late in the game to be building a portfolio with the proceeds. I’m confused between this and renting or buying another (slightly smaller) house.

A well-managed, diversified and balanced portfolio has averaged 10.5% over the last four years and about 7.5% over the last decade (which included the crash). So, if you walked from a Van house with $1.5 million, it means an income of over $100,000 – which is plenty to pay the rent and buy kibble. Plus, a talented advisor can construct a return-of-capital income stream which is non-reportable and will significantly reduce taxation. Go get some help. — Garth

#106 takla on 10.04.14 at 9:57 am

As a long time reader and more resent contributor I understand your premise and altho my question wasn’t answered I respect your opinion and understand the meaning behind your blog,thx…off to work now to make some more can $$’s

#107 PVS Inquire on 10.04.14 at 10:28 am

Is it reasonable to think that if prices in core overvalued areas such as TO and VAN correct (10-20%) that properties in smaller and more balanced valued areas such as Windsor and London would remain stable? As long as the general economic climate of these communities is maintained, this scenario is more likely.

For instance, a 1200 sq ft. brick townhouse in the TO could drop from $300,000 to $265,000 whereas the same property in Windsor would maintain its $190,000 value without dropping 20-25K.

#108 CdnFlyer on 10.04.14 at 11:08 am

Off to Turning stone to make a killing at blackjack. Stupid pit bosses haven’t that I’m on to them and I’ve figued out their game. I easily win 10Gs every time- too bad the misses blows it all on the one armed bandit.

#109 Basil Fawlty on 10.04.14 at 11:12 am

Well, the fiat swooners are feeling pretty smug today.
However, while the robo traders did jump into buy mode based on the maladjusted jobs numbers, one has onlt to look just a little below the surface to see the folly.
The labour participation rate in the US was 66% in 2008, while today it is 62.7% the lowest in 36 years. If your unemployment benefits run out you are no longer considered unemployed, which means those people are not part of the unemployment rate. Therefore, the figure don’t tell us much about what is really happening in the labour market.

#110 Basil Fawlty on 10.04.14 at 11:17 am

“Gold cultists are hoarders, not investors. You have lost your way. — Garth ”

So, someone who hold 10% of their investment portfolio in precious metals is now a “culter hoardest”?
I bet they also live under bridges and believe in dragons.

#111 Karl hungus on 10.04.14 at 11:57 am

Loading up on real estate in edmonton. Still needs to catch up to Calgary. Nice steady gains for the future.

#112 pinstripe on 10.04.14 at 12:10 pm

the six points are worthwhile to reflect over the weekend.

when all is said and done, the interest rates will stay low for a long time. at worst, the house prices will level off and will trend upward in the long term.

anyone having a secret formula for financial success is not sharing it with the public. when everyone knows the secret formula then it is not a secret anymore.

as a 87 yo senior, owning real estate property has really paid off over the long term. gics have served me well too.

#113 Slim on 10.04.14 at 12:25 pm

“It is no secret too that (formerly Red) China could easily overthrow the (formerly) Almighty Dollar, the main basis for America’s continuing economic supremacy. All it would have to do is dump its holdings of American bonds and currency and other financial instruments.

There are “get-out-of-jail-free” cards that come with superpower status, but they don’t always work.”

–ANDREW LEVINE

http://www.counterpunch.org/2014/10/03/illusionary-growth/

#114 Marnic on 10.04.14 at 12:34 pm

At $80 a barrel, there goes your shale revolution…

#115 Rm 23 on 10.04.14 at 12:45 pm

This is becoming more of a employment or lack off,
BoC will gladly keep overnight rate low,

a barrel of oil sells for 90$US or 101CAD

agreed that the base metals are done

#116 Al on 10.04.14 at 1:04 pm

Hong Kong Exodus #2 will boost real esttae prices in Canada big time.

What exodus? — Garth

#117 Shawn on 10.04.14 at 1:16 pm

Fed buying “securities”

CPG at 87quoted an article about:

central banks creating Trillions of new “money” out of thin air to buy securities

Some on this Board have suggested the Fed buys stocks.

The securities bought by the Fed are Treasury bonds, debt of the U.S government and also some mortgage backed securities that are backed by the government.

They own no stocks. nada.

Here is the consolidated financial statements of the Federal Reserve banks showing total assets of $4.3 trillion.

http://www.federalreserve.gov/monetarypolicy/files/quarterly-report-20140630.pdf

My main point. They don’t hold stocks.

Whether they have printed too much money by buying bonds from banks and paying them by depositing (from thin air) “money” in the banks deposit accounts at the central bank, I don’t know.

Whether $4.3 trillion is “a lot” or too much cannot be judged without looking at it in context of the size of the U.S. economy.

When you look at the Fed having $2.4 trillion of deposits from banks, my understanding is that it means that the “money” created by buying bonds sits at the Fed and not much went out to the banks to be loaned out.

The FED buying bonds has pushed down long-term interest rates. They buy a lot of long-term bonds.

What will happen when QE ends? We shall soon see.

#118 Expat Mexico Man on 10.04.14 at 1:21 pm

Garth is right the only Canadian real estate that is doing well are cities with a strong economy and higher median income like Toronto,Vancouver ,Edmonton and Calgary.With near 70 % home ownership,Canadians are confident our economy will keep chugging along. I think those 4 cities will only have 4% to 5% price increases each year for awhile.

That was funny. — Garth

#119 waiting on the west coast on 10.04.14 at 1:21 pm

Hey Smoking Man… While it has been interesting/odd listening to some of your monologues, can you please apologize to CdnFlyer so he will stop doing the re-runs… ;-)

Garth – this blog kills me! I guess we really are all pooched…

#120 Shawn on 10.04.14 at 1:28 pm

Fed Bond Buying and Selling

They call it System Open Market Operations (SOMA)
Buying selling on the open market

Side point – Coincidently SOMA was the feel good drug in the famous futuristic novel Brave New World.

Last week the Fed’s total pot of purchased securities in SOMA declined a tiny fraction

http://www.newyorkfed.org/markets/soma/sysopen_accholdings.html

I don’t see a good historical summary. This balance should be flat or shrink going forward. I believe as the bonds mature the process is that the money returns to thin air (is destroyed) and the balance shrinks.

#121 FLAWED on 10.04.14 at 2:01 pm

The latest jobs numbers speak loudly.
The US economy is now throwing off jobs in a way not seen since the end of the 1990s, and this will probably have a material impact on your life. Last month alone another 248,000 positions were created, which means an average of 227,000 every thirty days so far in 2014. The unemployment rate in America is now below the 6% mark for the first time in six years. It’s the best job performance since 1999 and, significantly, people are working more hours.

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

As pointed out by at least a dozen people, these figures are completely bogus in the big picture of the phony US recovery. Garth you really need to stop posting Govt numbers. They are always bogus. They always lie. Govt only cares about itself. Govt only cares about paying itself. This is becoming apparent all around the world with class warfare picking up. And now it’s starting to come here with the BC Teachers Strike and this:

http://fullcomment.nationalpost.com/2014/10/02/graeme-hamilton-montreal-unions-shocked-that-storming-and-vandalizing-city-hall-might-get-members-fired/

You folks aint seen nothing yet. Wait till the govt cupboard is completely bare and they have to decide….CUTS to Public Servants or INCREASE taxes to PT low wage stretched to the max and PISSED RIGHT THE HELL OFF private sector employees.

So many people hate it when the US does well. Quite amusing. — Garth

#122 Shawn on 10.04.14 at 2:23 pm

Why are long-term interest rates so low?

Could it be due to Zombie Bond Buyers?

The Fed can buy bonds to push interest rates down. But apparently many other large investors keep buying bonds at those ultra-low rates. Why? (And if they did not keep buying the FED would not be successful in pushing long-term interest rates so low.)

I believe it is because a large portion of bond buyers are zombie buyers.

Over the years various bank, insurance, pension and investment regulators decreed that buying government bonds was always a safe thing to do. Indeed often decreed risk free. Pension investment committees wrote policies requiring say 20% of their assets to be in long-term government bonds. Central banks buy foreign government bonds by rote as well.

The result is that there is a huge portion of the bond buying market that are complete zombies. They must and they will buy 10 and 30 year government bonds no matter how low the interest rates go. They are basically restrained from even thinking about it.

So there you have a good part of the reason for low long-term interest rates. Thank the Zombie Bond Buyers. In turn, thank stogy regulators who failed to change the rules when interest rates fell to levels never contemplated when their rules were made.

#123 FLAWED on 10.04.14 at 2:40 pm

The securities bought by the Fed are Treasury bonds, debt of the U.S government and also some mortgage backed securities that are backed by the government.

They own no stocks. nada.

Here is the consolidated financial statements of the Federal Reserve banks showing total assets of $4.3 trillion.

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

Hey Shawn

Care to enlighten the readers as to “where exactly” the FED gets 4.3 Trillion Dollars to purchase these treasuries?

#124 Spaccone on 10.04.14 at 2:54 pm

@CdnFlyer bahaha these are great

I have a feeling we’re going through the start of 1981. If I’m not mistaken, employment recovered, the bottom in crude fell out, Gold kept declining to 1/3 its high, markets fell about 20-25% over 1-1.5 years though div yield was on the order of 5%.

#125 Spaccone on 10.04.14 at 3:07 pm

#123 Cont’d

Forgot, USD kept rising. Eyeballed all these trends so could be off.

#126 Shawn on 10.04.14 at 3:08 pm

Where Did the Fed Get the Money to Buy Bonds?

Flawed asked

Hey Shawn

Care to enlighten the readers as to “where exactly” the FED gets 4.3 Trillion Dollars to purchase these treasuries?

******************************************
From thin air as mentioned in my post at 116:

Whether they have printed too much money by buying bonds from banks and paying them by depositing (from thin air) “money” in the banks deposit accounts at the central bank, I don’t know.

As I said I don’t know if that was a good thing or a bad thing. A lot of doomers seem pretty sure it’s very bad. They are pretty sure it creates inflation.

I am not sure how long central banks have been able to print money from thin air. Probably a few hundred years and probably even with the gold standard since not all the holders of paper dollars were ever going to come in and trade their paper for the metal.

Seems to me that the living standards in this world have done okay these last few hundred years despite any evils of money printing.

But the point is, perhaps to your surprise, I pointed out the FED buys bonds by printing money (albeit electronic money) from thin air.

You can panic about that is you wish to. I meanwhile invest in the U.S. recovery that you deem a lie.

We shall see how the world unfolds.

#127 Tony on 10.04.14 at 3:24 pm

Re: #111 Karl hungus on 10.04.14 at 11:57 am

Or conversely Calgary will follow Edmonton real estate prices and fall right off a cliff. The declining real estate market will be Canada wide.

#128 Shawn on 10.04.14 at 3:31 pm

Rebalanced Portfolios

Let’s say you run 40% various types of fixed income.

Let’s say you historically had 15% if long-term government and corporate bonds.

Now does one reduce the exposure to long-term bonds now that interest rates are so low? But oops that would stray from mechanical rebalancing into active management wouldn’t it?

Does one move more towards corporate bonds away from government when government bonds pay so little? But oops that would stray from mechanical rebalancing into active management wouldn’t it?

So will we have pure mechanical rebalancing with proportions changing only with age or will be a bit more active than that?

#129 FLAWED on 10.04.14 at 3:36 pm

As I said I don’t know if that was a good thing or a bad thing. A lot of doomers seem pretty sure it’s very bad. They are pretty sure it creates inflation.

I am not sure how long central banks have been able to print money from thin air. Probably a few hundred years and probably even with the gold standard since not all the holders of paper dollars were ever going to come in and trade their paper for the metal.

Seems to me that the living standards in this world have done okay these last few hundred years despite any evils of money printing.

But the point is, perhaps to your surprise, I pointed out the FED buys bonds by printing money (albeit electronic money) from thin air.

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

Thank you for your admission the FED buys bonds by printing money out of “thin air”. Too bad you forgot to mention they charge INTEREST on that phony money which the taxpayers have to pay back. This is the reason EVERYONE has such gargantuan debt in the world. Interest with money that does not even exist. So they need to keep printing more and more money getting the world in more and more debt. And no one says or does anything…….amazing.

Standard of living? Maybe for you. 3.5 BILLION PEOPLE live on 2 bucks a day in poverty. Why? Mostly because of BANKERS creating MONEY OUT OF THIN AIR.

Enjoy your BANKER SHARES Shawn…..

#130 FLAWED on 10.04.14 at 3:37 pm

So many people hate it when the US does well. Quite amusing. — Garth

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Except that your in the minority in that philosophy…..

Maybe in your coven. — Garth

#131 Inglorious Investor on 10.04.14 at 3:58 pm

For those who are interested in the question of the inflationary potential of the Fed’s alphabet soup of policy actions, open market operations, and various facilities, here are a couple of articles that consider the implications of the Fed’s ballooning balance, and how/if they can unwind it before massive inflation. Note that the first one is from 2009!

http://www.businessinsider.com/how-the-feds-mortgage-securities-purchases-create-inflation-2009-12

http://econbrowser.com/archives/2013/03/whats_going_to

#132 Godth on 10.04.14 at 3:58 pm

Bright Were The Halls Then
http://thearchdruidreport.blogspot.ca/2014/07/bright-were-halls-then.html

Bright were the halls then, many the bath-houses,
High the gables, loud the joyful clamor,
Many the meadhalls full of delights
Until mighty Fate overthrew it all.
Wide was the slaughter, the plague-time came,
Death took away all those brave men.
Broken their ramparts, fallen their halls,
The city decayed; those who built it
Fell to the earth. Thus these courts crumble,
And roof-tiles fall from this arch of stone.

#133 CPG on 10.04.14 at 4:06 pm

Shawn #116 you posted the following:

“The securities bought by the Fed are Treasury bonds, debt of the U.S government and also some mortgage backed securities that are backed by the government.
They own no stocks. nada.”

“My main point. They don’t hold stocks.”

I see in the consolidated financial statements of the Federal Reserve banks which you referred to in your post, I see the word “Unaudited” is used the the report’s title page and also at the bottom of almost every single page of the report.

#134 Bill Gable on 10.04.14 at 4:17 pm

I have a number of worries you addressed today, Mr. Turner – but here is my MAIN worry.

Those ‘idiots’ (polite term) that have gotten in way over their head will start screaming when things like interest rates ‘normalize’ – and they will all want some Politician to bail them out. Some Politico will seize on the issue and away we go.

That means taxes will go up = and prudent people get it in the neck, because of feckless Farley and his credit cards and fancy digs.

Revolutions have started over things like this. It’s going to be a very interesting few years.

Ottawa wants a cheap Loonie vis a vis the Greenback, so our ‘exports’ look cheap. Trouble is everyone is trying the same thing.

Canada is about to find out what the ‘real world’ is like and a whole bunch of people are going to get eviscerated.

Vancouver is a Potemkin Village. The announcement of a new 52 story Condo/retail Development, near our Burrard Bridge, was interesting. It was marketed in ASIA, before the local greater fools had a chance to put money into this looming disaster.

I dunno. Is there something in the water, that makes people reckless?

#135 Inglorious Investor on 10.04.14 at 4:31 pm

#125 Shawn on 10.04.14 at 3:08 pm

“Seems to me that the living standards in this world have done okay these last few hundred years despite any evils of money printing.”

Shawn, the number one reason for the increase in living standards, population, technology, etc. has been cheap energy. Cheap energy is also what makes finance possible.

Energy is the fundamental input for, well, EVERYTHING. It is also the fundamental input of an economy (logically). Without enough energy to create a surplus there is no modern economy. Since we’ve been living in the age of petroleum for what seems like forever (but has really been a very short time), most of us cannot even fathom a world without oil (if one has even ever thought of it). However, for most of human history, that has indeed been the case. Petroleum is an energy source unlike anything humankind ever had. Except for coal, petroleum is orders of magnitude denser than anything we used in the past (e.g. human, sun, animal, water, wind, wood). And it allowed society to develop in ways ancient peoples couldn’t even dream of.

#136 NostyVlad the Snugglebombed on 10.04.14 at 4:44 pm

#120 FLAWED on 10.04.14 at 2:01 pm — “Wait till the govt cupboard is completely bare and they have to decide….CUTS to Public Servants or INCREASE taxes to PT low wage stretched to the max and PISSED RIGHT THE HELL OFF private sector employees.”

Interesting how quickly things are happening. Friday, it was Germany, Holland and Finland that were looking at bail-ins. Today, it is New G20 Bail-ins that are taking shape.

It is not so much that Cdn. RE is pooched, it is the west looking like scrambled eggs.

#137 fisheman on 10.04.14 at 4:54 pm

Hey Spaccone, I’m getting deja`vu of 1981 too. Now is similar to the autumn 1980. Wholesale fish prices this year dropped the most year over year just like 80. Look at grains& foodstuffs other than cattle;way down. We were blowing our brains out on Van real estate at 10%in 80. Reagan got elected & the CIA came to him with a plan to starve the USSR of FX by denying them their two biggest sources,gold & oil. Gold went to $330 & oil to$19. Massive amounts of Johnsons’ Viet Nam money was returning from Asia & % rates went to 18% in early 81. Then the banks pulled 140,000 small business demand loans almost within a week (not that any of us had any thought of paying 18% + principle on an underwater asset when we couldn’t get a measly job for gas & grub & beer.) It was a slaughter out west in 81; Now there is a constant bleeding with the small business, independent contractor, tradesman, seasonal high paid guys in the resource sectors& that pressure relief valve in northern Alberta seems to be getting stuck. It probablywon’t get ghastly like 81 because they won’t double % rates overnight. Maybe 81 was better because the medicine was mercilous but over quicker; 015 could be a 81; less vicious but more tortuous drawn out pain & misery.

#138 Sheane Wallace on 10.04.14 at 4:57 pm

#90 Retired GenX on 10.04.14 at 12:59 am
Feel sorry for all those pro-gold and pro-gold mining company individuals. They’re pooched.

CAD goes to 0.80 USD at the end of 2015.
Gold falls below $1000 per oz.
………………………..
It depends when they bought.
gold was 300 in 2000 so 1000 is still solid gain. It could go even to 900.

But I can tell you that that engagement ring would always be gold or platinum. As to whether gold goes to 5 k, who knows, it could eventually go to that level much sooner than thought.

The funny thing is that with your prediction the price of gold could actually rise in Ca dollars…. while declining in US…

This is not a gold blog. I have told you this before. — Garth

#139 Arfmooocat on 10.04.14 at 5:05 pm

#111 Karl hungus

Edmonton will never catch up to Calgary… you must be a young’en

#140 calgarytran on 10.04.14 at 5:14 pm

How about non-CHMC loan with 20% down? Can we walk away?

#141 Arfmooocat on 10.04.14 at 5:17 pm

Reuters – Fri, 3 Oct, 2014 1:20 PM EDT

Canada posts unexpected trade deficit as exporters struggle

OTTAWA (Reuters) – Canada unexpectedly posted a C$610 million ($545 million) trade deficit in August as exports dropped and imports rose by the largest amount in almost two years to hit a record high, Statistics Canada data showed on Friday.

Where’s all the lower loonie analysts? lol

#142 bigtown on 10.04.14 at 5:20 pm

The oil patch needs to research the best environmentally and financial extraction from the ground to compete with the lower oil price of under $80 per barrel.

This will give them the longevity they require for the investment they make today.

#143 FLAWED on 10.04.14 at 5:28 pm

Maybe in your coven. — Garth

Be careful…….I might have someone turn you into a frog :-)

#144 Sheane Wallace on 10.04.14 at 5:34 pm

This is not a gold blog. I have told you this before. — Garth
………………………………..
It actually seems is a gold bashing blog.

Not that I am pro gold in any way and I have told that before as well.

Just can’t resist sometimes….

#145 Sheane Wallace on 10.04.14 at 5:36 pm

I am fine with substituting gold with energy in all my relevant posts…

As Inglorious Investor is spot on.

#146 Arfmooocat on 10.04.14 at 5:51 pm

Think that new hardwood floor is made in Canada? Think again

http://globalnews.ca/news/1594346/think-that-new-hardwood-floor-is-made-in-canada-think-again/

#147 Smoking Man on 10.04.14 at 5:54 pm

Getting a bad feeling about MONDAY…

UCC keeps pinging me with negative vibe..

#148 Shawn on 10.04.14 at 6:22 pm

FED and debt and quality of life

Flawed, Inglorious and CPG, thank for the responses.

The Fed Q2 balance sheet is unaudited like just about every Q2 report. Audits are usually annual.

Federal government treasury issues bonds to banks and others and pays interest. FED buys some of these bonds from banks (with yes printed money) and collects interest and pays that to the Treasury. Not sure there is a net cost to taxpayers there.

The FED buying bonds did not force anyone into debt. Borrowers are eager to borrow.

Banking and central banking is a huge part of what has caused the stunning increase in the quality of living on this earth. Energy existed all along. The ability for savings to be pooled and invested played no small part in the whole industrial revolution and electricity revolution and information revolution.

Credit and not oil is the most important grease of the economy.

People should not be mis-led by doomer sites and those who think banking is a conspiracy. The whole idea that banks and bankers are mostly evil is almost too stupid for words.

It’s not the countries with democracy, rule of law, property rights and banking that are poor.

#149 devore on 10.04.14 at 6:26 pm

#3 saskatoon

how many full-time jobs have been lost in as much time?

Those are net numbers, ie job growth. Work week is higher, implying more full-time positions. But no implication is necessary: the jobs report is clear on the point. 670,000 full time positions created, 385,000 part-time positions eliminated. Underemployment, ie shadow unemployment, is also down.

Got any more doom and gloom for us?

#150 WhiteKat on 10.04.14 at 6:26 pm

@Randoll #61 “Whitecat, are you still trolling, I thought you were in hiding by now? Come on down to where the taxes are favorable and the sun always shines. Life is short and you worry way too much.”

Hide? No way, I’m too busy shooting my mouth off any chance I get. I even sent [email protected] (one that has lots of US branches) a link to a radio interview I did on an Ottawa CBC show recently….just testing to see how nice she really is. Since I have not had any invites to sit in the ‘nice comfy green couch’ since then, I presume she did not rat me out for having seen my red, white and blue tattoo.

I assume that the place you are referring to where the “sun always shines” is our southern neighbour, and best friend. I’ll never step foot in that country again – and not because I “worry to much.”

#151 devore on 10.04.14 at 6:40 pm

#28 Jan

Im sure realturds will just say, hey, lower dollar will attract a bonanza of overseas real estate investors from China for whom our houses are dirt cheap.

They always have a reason to beat the drum. Dollar high? Attractive to foreign investors. Low dollar? Attractive to foreign investors. Dollar flat? Hey, stability is attractive to foreign investors too! Not to mention that it is always a good time to sell OR buy real estate. Well, if you get paid on commission, it sure is.

#152 Slim on 10.04.14 at 6:56 pm

So many people hate it when the US does well. Quite amusing. — Garth

The US kind of reminds me of JR Ewing in the Dallas TV series. Most I knew loved to hate JR. Actually, he was my favorite character in the show for some twisted reason.

Democratically though the US seems to have lost its way somewhat. With many lesser countries following right behind. That’s what I think, anyway.

#153 liquidincalgary on 10.04.14 at 7:01 pm

So many people hate it when the US does well. Quite amusing. — Garth

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

which is very short-sighted; because, as the US economy goes, so goes ours

#154 liquidincalgary on 10.04.14 at 7:07 pm

sheanne wallace,

The funny thing is that with your prediction the price of gold could actually rise in Ca dollars…. while declining in US…

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

gold and silver both fell through major support levels.

the metal-heads go BOOM !

#155 Slim on 10.04.14 at 7:13 pm

Instead of dumpster diving why not move right in?

http://www.theatlantic.com/features/archive/2014/09/the-simple-life-in-a-dumpster/379947/

#156 Blobby on 10.04.14 at 7:16 pm

I got curious, i’ve never really been much of a gold bug.. But with reading how much it’s dropped ..

I decided to just go look at historic prices for gold, and it seems to me that it’s “proper” price at the moment (if it wasnt for all that fear about hyper inflation and all that nonsense), should be around $700..

Seems to me like it has a ways to go yet – especially now the taps have been turned off..

#157 devore on 10.04.14 at 7:38 pm

There is no making some people happy. Just because the news is not “fantastic”, does not mean it is not good news. A part time job is better than no job. ALWAYS. Jobs going to seniors is better than jobs disappearing. People who work have an income, they pay their bills, they buy stuff, they pay taxes, and don’t draw on benefits and assistance. I’m afraid these complainers won’t be happy until there is zero unemployment, and everyone is making 6 figures in green energy jobs and there is zero deficit and debt. Even then I bet some would find something to pick on.

#158 ozy - AMERICANS stop comenting on Toronto prices on 10.04.14 at 7:53 pm

AMERICANS stop commenting on Toronto prices until you tell us your best area prices. Do we need to research it for ya?

http://www.chicagomag.com/Chicago-Magazine/April-2014/chicago-neighborhoods/Lincoln-Park/

Lincoln Park
Population: 64,100 (82% white, 7% Hispanic, 6% Asian, 4% black)
Median household income: $92,600
Median sales price (house): $1,350,000

$950,000 for sale – 1834 W Patterson Ave, Chicago, IL 60613
http://www.zillow.com/homedetails/1834-W-Patterson-Ave-Chicago-IL-60613/3709576_zpid/

#159 saskatoon on 10.04.14 at 8:10 pm

#148 devore

ok…i’ll bite.

link?

#160 Daisy Mae on 10.04.14 at 8:12 pm

#133 Bill: “Those ‘idiots’ that have gotten in way over their head will start screaming when things like interest rates ‘normalize’…”

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

The ‘idiots’ on their own. We’ve been thru this before — remember 22% mortgages? There were then, and will be now, no bailouts.

#161 CdnFlyer on 10.04.14 at 8:58 pm

Wlaked to room but lost kye. Too much JD. Pisst pants waiting for new key. Love this hotel. Always give me a sweet cause I’m the FlyingMan. Looked in mini bar but it was empty. Who drank all the booz? My life is great I’m the smrtest person I know. You all love me.

#162 Son of Ponzi on 10.04.14 at 9:18 pm

#146 Smoking Man on 10.04.14 at 5:54 pm
Getting a bad feeling about MONDAY…

UCC keeps pinging me with negative vibe..
—————-
Same here.
Black Monday on the rise.
Sorry Shawn, too late to call your broker.

#163 Charles Ponzi on 10.04.14 at 9:28 pm

What I find disturbing is that the people not in the American labor force rose to a new record high, increasing by 315,000 to 92.6 million!

#164 Charles Ponzi on 10.04.14 at 9:29 pm

America is in the process of calling its – dollar – children home. All it needs to do is execute those three steps: QE, dollar, interest rates. That will increase its power, economic and therefore political, over the rest of the world to such an extent that many nations will effectively turn to panhandlers in Lower Manhattan.

http://www.theautomaticearth.com/grandma-yellen-and-the-mushroom-cloud-on-the-horizon/

#165 Smoking Man on 10.04.14 at 9:44 pm

God let’s another one down..

A bible thumper telling me about her book. Something about humans being fed up.

She drops 200 into a slot.. No God, no jackpot.

I jokingingly say, perhaps you should switch teams, come to the dark side..

I give her a twenty, she’s our of loot.

First pull, she hits the jackpot, 260.

I say you going to split that…

She mutters no fing way… I’m with the dark side now.

Bahaha

I love helping people, I got my 20 back.

#166 Blacksheep on 10.04.14 at 9:52 pm

Shawn,

“The whole idea that banks and bankers are mostly evil is almost too stupid for words.”
——————————————
Andrew Jackson, would have strongly disagreed:

“I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country.

Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.

You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.

Andrew Jackson”

#167 Smoking Man on 10.04.14 at 9:55 pm

#160 CdnFlyer on 10.04.14 at 8:58 pmWlaked to room but lost kye. Too much JD. Pisst pants waiting for new key. Love this hotel. Always give me a sweet cause I’m the FlyingMan. Looked in mini bar but it was empty. Who drank all the booz? My life is great I’m the smrtest person I know. You all love me.
……

Do you not have a life, an opinion, a story to tell.

Your game, mob smoking man, make fun of him. Ya I know I put myself out, vulnerable… But I give no shit. It’s called freedom.

One thing I know about you. You teach middle school.

UCC TOLD ME

#168 simple simon on 10.04.14 at 10:07 pm

Yup, energy stocks are going to zero….bonds are guaranteed to lose in a rising rate environment. We’re all gonna die. Never buy the dips…that’s proven to be a losing strategy over low yield safe returns with excessive fee’s. Real companies will stop paying dividends becaue the market has gone down for two weeks straight….oh noooooooooo !!!!!! Time to panic.

History is dead….no one will buy anything because factories are now filling orders with fart gas…so ditch copper, zinc and molybdenum. A roaring economy no longer uses ‘stuff’ to pump out new consumer durables.

I agree with you Garth….from my perch in sunny Bangkok. Now I’m going to the pool….. crying all the way to the bank.

#169 Retired Boomer - WI on 10.04.14 at 10:08 pm

#157 ozy- AMERICANS stop commenting on Toronto prices

Ozy, chill there dude. Lincoln Park is on small slice of Chicago, as Leaside is one small slice of Toronto.

Chicago prices will range from the $25,000+ at 79th and Troop to the 7-8 figures “ya gotta be kidding me” along the “gold coast” north of the loop. Oh, by the way the ‘gold coast’ is mainly condo’s & Coop’s.

I’m not certain that Toronto has that divergence. Matters not, what we have here is the ‘desirability & location factor. Chicago is a much easier town to traverse by car, as there is more than ONE main drag to get through, or across the city.

Now that’s been said, one has to wonder WHY anyone would wish to live in either big city? Not being a city lover, though I have lived in several. I need not be in one now, and chose not to be. It’s ok to be able to get to one in a couple of hours, but if I don’t ‘need’ to be there, why would I?

Cities (all that I have seen) have congestion, poor air quality, queues for dam near everything, small lots, older homes, higher home prices, more crime, higher taxes, less responsive local government, much more competition for available jobs, and the same or lower wages……did I forget anything???

So, enjoy the Big City if that is what you like.
Don’t forget to PAY DEARLY for the privilege.

#170 45north on 10.04.14 at 10:12 pm

You have an overvalued asset that can correct orderly or disorderly – and the longer we keep rates this low, and the more we accumulate debt the higher probability it gets disorderly.

Ed Devlin, at a New York conference
http://www.bloomberg.com/news/2014-10-01/pimco-says-poloz-to-renew-rate-increase-warnings-canada-credit.html

my in-laws sold their house in the GTA! Thank God!

You know it’s one thing for somebody in New York to talk about a disorderly correction and it’s another when it actually happens.

CPG : Latest household credit numbers in Canada the numbers show a steady, I would say relentless increase in consumer credit.

500 days : We are indeed pooched. And by the time we see the death rattle of the 2016 spring market in about 500 days, it will be much worse than imagined.

that got my attention

Ben : In other words, given the choice between a weak economy and a housing crumple, it’s a no-brainer for the central bank.

this means only one thing: the central bank will choose higher interest rates, housing prices will crumple. Crumple!

Retired Boomer : Our countries are really quite similar, its people virtually interchangeable

that’s my feeling too

Bill Gable : Those ‘idiots’ who have gotten in way over their head will start screaming when things like interest rates ‘normalize’ – and they will want some Politician to bail them out. Some Politico will seize on the issue and away we go.

yeah they definitely will want somebody to bail them out. But nobody is promising to bail them out. Nobody.

#171 Retired Boomer - WI on 10.04.14 at 10:13 pm

Smoking Man = CdnFlyer

Can anyone note the difference?

#172 45north on 10.04.14 at 10:20 pm

Vanecdotal : from yesterday’s post : Financial trouble had been brewing long enough in enough households, likely for at least a few years, prior to 2006 to cause a cascade downwards in prices in a short period of time from sellers desperate to get out. This had been previously a super hot RE market right up until… it wasn’t. Sounds rather familiar… Valuations at the time were almost identical to comparable homes to the Vancouver area. I have been following our local markets carefully ever since. After hearing the recurring meme for the last 3 years amongst my peers, and our boomer relatives, of listing their homes, then de-listing, then re-listing, yet still not being able to “get their price”, so they de-list again, wait, rinse & repeat, I think we’re at the end of the cycle.

“we’re at the end of the cycle” that got my attention

Jane24 : from yesterday’s post : Garth I was a RE agent in Toronto for the late 1980’s RE dump. It wasn’t a slow decline. The tap of buyers just turned off over night. One day hot phones, the next day silence.

buyers resemble a school of fishes who instantly co-ordinate actions to act as a single entity. I mean almost instantly.

#173 Shawn on 10.04.14 at 10:30 pm

Charles Ponzi and the Labour Force
Charles says:

What I find disturbing is that the people not in the American labor force rose to a new record high, increasing by 315,000 to 92.6 million!

************************************
Labour force is everyone 15 years old and over. This is because the definition is ancient.

Did you consider how many 15 to 22 years olds might be in school?

Did you consider how many people are retired and don’t need or want to work?

Is it not a wonderful thing that most of these 92.6 million live a pretty good quality of life without working?

#174 M. Gandhi on 10.04.14 at 10:39 pm

#170 Retired Boomer – WI on 10.04.14 at 10:13 pm

Smoking Man = CdnFlyer

Can anyone note the difference?
—————————-

One goes on about a imaginary book – many year at the globe and mail and now here.

#175 FLAWED on 10.04.14 at 10:41 pm

People should not be mis-led by doomer sites and those who think banking is a conspiracy. The whole idea that banks and bankers are mostly evil is almost too stupid for words.

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

Shawn

The fact that the internet has been around for 20 years with thousands and thousands of pages with references to FACTS proving the EVILS of banks and bankers over the last 5000 years shows your ignorance and arrogance.

But hey…….you have those bank shares. Yay !!!

#176 Smoking Man on 10.04.14 at 10:47 pm

There are only a few people on this earth that I respect

Lenord Cohen
Roger waters
Johnny Cas
Fredie Mercury
Gartho

What do they have in common…

They give no shit….

We are taught to follow someone else’s script.

Those who can’t do it, are my hero’s..

#177 Smoking Man on 10.04.14 at 11:03 pm

I’m somewhere near pensilvania, Wheres my room.

I saw a sign coming here, Ellicottville, maybe we are there..

No snow, it sucks…..

#178 Retired Boomer - WI on 10.04.14 at 11:20 pm

#174 Flawed

The internet has been ‘popular’ for roughly 20 years, much older than you think.

Banking has been around much, much longer than the internet, telephone, even the printing press.

Banking (central banks) have been a HUGE boost to modern living’s prosperity. We get too carried away with credit, to our ultimate disappointments.

As for Shawn, he is quite right the Doomer sites are not quite in your best interests.

I would prefer to own (and do) Bank shares, among lots of there things. No money invested in ‘doomer products’ that I am aware. I invest much more similar to Shawn than a doomer likely does. So far, it’s working very nicely.

#179 Fortune500 on 10.05.14 at 1:05 am

On holidays in Sri Lanka and I still check this blog …. I need help. Oh, well, this one was worth it. Looks like the rain is letting up. Back to the beach blog dawgs.

#180 Happy Renting on 10.05.14 at 1:07 am

#170 Retired Boomer – WI on 10.04.14 at 10:13 pm
Smoking Man = CdnFlyer

Can anyone note the difference?

CF only replicates the craziness, SM actually generates it.

Original content > mimicry

but

silence > tedious posts of little substance.

#181 Setting the Record Straight on 10.05.14 at 1:39 am

@ Shawn
“I am not sure how long central banks have been able to print money from thin air. Probably a few hundred years and probably even with the gold standard since not all the holders of paper dollars were ever going to come in and trade their paper for the metal.”

Central Banks hate a gold standard because people can do exactly that. If you think the CB is excessively loose, you can demand your gold. Notes are merely promises to exchange for gold at a fixed rate. The public can bring the central bank to heel and so a run on the gold reserves forces the bank to reverse course.

It would also prevent the financing of useless wars so the first thing European governments at the start of WWI did was confiscate private gold holdings and go fiat.

Hundreds of years? England perhaps. The Fed came into existence in 1913. Canada did not have a central bank until 1935.

#182 Setting the Record Straight on 10.05.14 at 1:42 am

Why no discussion of closed end funds only etfs?

#183 Setting the Record Straight on 10.05.14 at 1:54 am

the Bank of Japan buys stocks

#184 CdnFlyer on 10.05.14 at 6:24 am

Minions, I told you to buy a house in 1999 in Longpointe. Did you listen? No. Now look at you, living in the basement like rats. I told you to sell BB the day before it crashed. Did you listen? No. I’ve owned 5 fortune 500 companies and know everything. Now, I work at the tax farm just for fun.

#185 liquidincalgary on 10.05.14 at 7:36 am

#160 CdnFlyer on 10.04.14 at 8:58 pm

Wlaked to room but lost kye. Too much JD. Pisst pants waiting for new key. Love this hotel. Always give me a sweet cause I’m the FlyingMan. Looked in mini bar but it was empty. Who drank all the booz? My life is great I’m the smrtest person I know. You all love me.

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

Smoking Man’s other nom de plume

#186 Sheane Wallace on 10.05.14 at 8:25 am

DELETED

#187 Randol on 10.05.14 at 9:52 am

FLAWED and Son of Ponzi should start a self-help group. Such bitterness and anger is not healthy.

Oh, and please take DA with you. He needs a reality check.

#188 Inglorious Investor on 10.05.14 at 10:13 am

#147 Shawn on 10.04.14 at 6:22 pm

“FED buys some of these [government] bonds from banks (with yes printed money) and collects interest and pays that to the Treasury. Not sure there is a net cost to taxpayers there.”

The liabilities of the central bank are ultimately the liabilities of the tax payer. The fact that the Fed kicks back funds to the government is small potatoes and just part of the deal. Before they kick back those funds, the bankers have already made much much more.
——————-
“Banking and central banking is a huge part of what has caused the stunning increase in the quality of living on this earth.”

Credit is essential for a thriving economy. And one could argue central banks perform a valuable function, at least as a way of creating a national standard for currency, and a national clearing system. But your obsequiousness toward banks and central banks goes too far. Read history and learn. Central banks were established as a partnership between private banks and governments. The deal was to create inflation. It’s a old as governments themselves. Governments use inflation as a hidden tax and banks use it as the basis of their profits. In other words, both of them use it as a way to clandestinely skim wealth from the economy and make people believe that their monetary debasement is as natural as the sunrise. But neither governments nor banks actually create wealth. They can facilitate the creation of wealth by the actual producers, and there is a cost for doing this, but they have gone too far. As history shows they always do. The system, such as it is, is a huge scam.
———————

“Energy existed all along.”

This is where you are just out to lunch. Wealth depends on output. Output depends on energy. Before the age of petroleum, the average, annual per capita energy consumption in Europe was about 23 gigajoules. Today, it is about 153 gigajoules. That’s greater than six and a half times more. Compared to ancient Roman times it’s more than ten times more.

There has always been credit in every sophisticated society, right from ancient times. But credit relies on future output. The higher the future output, the more credit can be issued. Therefore, more credit requires more energy. Without the vast amounts of cheap energy available today to support the current credit bubble, the financial system collapses like a house made of bond coupon clippings in a hurricane.
—————————

“Credit and not oil is the most important grease of the economy.”

Credit is the grease. Oil is the fuel.
———————

“People should not be mis-led by doomer sites and those who think banking is a conspiracy. The whole idea that banks and bankers are mostly evil is almost too stupid for words.”

Banking is not a conspiracy. But it is a scam the way it’s practiced today. But wherever money flows greed grows. The bankers are not your friends, Shawn. You obviously suffer from a form of Stockholm syndrome whereby because the bankers throw you some crumbs, you love them. What you don’t see is how much more they are taking from you, your family, and your fellow man.

#189 Nemesis on 10.05.14 at 10:17 am

#WeekEndMischief… #SchoolForScoundrels&… #RevengeOfTheHosers,Eh!…

[BBC] – School with dog subject of TV documentary

…”A school in East London is the subject of a new TV documentary for its pioneering approach in teaching teenage boys who have been excluded from mainstream education.

Ian Mikardo High School has no uniforms, no detentions, and no punishments – but it does have its own school dog.”…

http://www.bbc.com/news/education-29496081

[CBC] – Canadian pub opens in unlikely Chinese city: With fewer than 10 Canadians in Wenzhou, hoser bar gives a taste of home

“We’re trying to make Caesars but you can’t get Clamato here,” Nathanson said. “We have to make the Caesars with actual clam juice. It’s kind of hard to get the portions right.”

http://www.cbc.ca/news/canada/british-columbia/canadian-pub-opens-in-unlikely-chinese-city-1.2787545

#190 Mic on 10.05.14 at 10:33 am

Smoking Man @166 – Your response made me smile and it reminded me of this: http://www.youtube.com/watch?v=G7BtGKhbSpE

Just may be the sweetest apple on the tree. ;-) Cheers!

#191 Tony on 10.05.14 at 10:52 am

Re: #157 ozy – AMERICANS stop comenting on Toronto prices on 10.04.14 at 7:53 pm

Population 64,100

That’s like comparing Rosedale or Forest Hill to Toronto in general.

#192 Blacksheep on 10.05.14 at 11:29 am

Inglorious Investor #187,

“Banking is not a conspiracy. But it is a scam the way it’s practiced today. But wherever money flows greed grows. The bankers are not your friends, Shawn. You obviously suffer from a form of Stockholm syndrome whereby because the bankers throw you some crumbs, you love them. What you don’t see is how much more they are taking from you, your family, and your fellow man.”
———————-
Well said.

Actually it was drivel. Without today’s banking structure your standard of living – income security, public safety, essential services, job and personal prospects – would be seriously diminished. The system works. — Garth

#193 Son of Ponzi on 10.05.14 at 11:30 am

#188
Canadian pub opens in unlikely Chinese city: With fewer than 10 Canadians in Wenzhou, hoser bar gives a taste of home.
—————
Canadian pubs?
All the Canadian pubs I’ve ever been to, are Irish.

#194 Son of Ponzi on 10.05.14 at 11:34 am

#186 Randol on 10.05.14 at 9:52 am
FLAWED and Son of Ponzi should start a self-help group. Such bitterness and anger is not healthy.
———–
Thank you for your advise.
We’ve already started such a group.
At our first meeting we had Andrew Jackson as guest speaker.

#195 Setting the Record Straight on 10.05.14 at 11:36 am

Go here to see employment and participation rates for
Prime working age adults 25 to 54

This takes out the influence of demographic shifts on overall employment and participation rates Its not pretty.

http://davidstockmanscontracorner.com/september-jobs-some-numbers-they-didnt-mention/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday

#196 Shawn on 10.05.14 at 11:51 am

The Self Help Group – Bitter at Banks Anoymous

Inglorious Investor, check post 186 for the next meeting of the self help group. Flawed and Son of Ponzi have already been referred. Blacksheep would be another candidate.

It’s for anyone who feels especially bitter and angry towards banks and central banks. Other symptoms likely include a lack of sufficient savings and wealth for one’s age. A strong desire to fondle gold might be another symptom.

#197 Shawn on 10.05.14 at 11:54 am

I am The Banker

Inglorious said:

The bankers are not your friends, Shawn.

***************************************
I own bank shares and I have no debt. Therefore I am the banker. No wonder you love me so much.

#198 Kenchie on 10.05.14 at 12:09 pm

This doesn’t look very convincing, but the “evidence” from the other point of view is even less convincing.

http://www.addictinginfo.org/2014/10/05/antarcticas-ice-changed-gravity/

#199 Blacksheep on 10.05.14 at 12:48 pm

“Actually it was drivel. Without today’s banking structure your standard of living – income security, public safety, essential services, job and personal prospects – would be seriously diminished. The system works. — Garth”
———————————–
Jackson realized the extreme danger in a central bank (second bank of the US) almost 200 years ago.

Of our national debt, what % is actually principle?
———————————————-
“A 1993 Auditor General report said that of the accumulated net debt of $423 billion, only $37 billion was principal – the rest was due to the ‘magic’ of compound interest.”

link: http://www.greenparty.ca/convention-2012/voting/motions/g12-p13
———————————————-
We need A, banking system, we don’t need THIS, banking system.

#200 Basil Fawlty on 10.05.14 at 12:51 pm

“Actually it was drivel. Without today’s banking structure your standard of living – income security, public safety, essential services, job and personal prospects – would be seriously diminished. The system works. — Garth”

The system does work, but it works better for some.
How can a system be considered workable for all, when the value of the US currency has dropped 98% since 1913? The amount of currency printed has far exceeded the increase in GDP, which amounts to a hidden tax on savings.

And we all live far better than in 1913. — Garth

#201 Basil Fawlty on 10.05.14 at 1:37 pm

“And we all live far better than in 1913. — Garth”

True. How about since 1973?

#202 Cow Man on 10.05.14 at 1:50 pm

#199 Basil Fawlty

Did Harper ditch Garth because he was blogging, or was it because Garth is a closet socialist?

“And we all live far better than in 1913. — Garth”

You’d better explain that. — Garth

#203 FLAWED on 10.05.14 at 1:52 pm

The system does work, but it works better for some.
How can a system be considered workable for all, when the value of the US currency has dropped 98% since 1913? The amount of currency printed has far exceeded the increase in GDP, which amounts to a hidden tax on savings.

And we all live far better than in 1913. — Garth

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

Man was advancing “Just Fine” before the evil’s of the Private Federal Reserve came around in 1913 thank you very much.

Humans are the reason we live in a better world. NOT evil bankers.

Without adequate and constructive access to capital the quality of human life would be impacted. Life expectancy in 1913 was 50.3 for men, and today it is 63% higher. You don’t have a leg to stand on. — Garth

#204 FLAWED on 10.05.14 at 1:56 pm

#186 Randol on 10.05.14 at 9:52 am
FLAWED and Son of Ponzi should start a self-help group. Such bitterness and anger is not healthy.

Oh, and please take DA with you. He needs a reality check.

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

Perhaps all the banker lovers should start their own cult called “Death by Banking”. Would you like 5000 years of stats? I could post them for about a year everyday on this blog there are so many…….

#205 Cow Man on 10.05.14 at 2:02 pm

#201
You’d better explain that. — Garth

Redistribution of wealth is not the same as creation of wealth.

In 1913 we had a largely agrarian society with no social safety net, no health care, no pensions and where men lived to be 50 years old while a third of women died in childbirth. Get a grip. — Garth

#206 FLAWED on 10.05.14 at 2:07 pm

Here’s a good start. And the patience of people around the world is quickly running out ace…….

https://www.youtube.com/watch?v=WYeDOSL6avo

You have a problem. — Garth

#207 Cow Man on 10.05.14 at 2:28 pm

#204

In 1913 we had a largely agrarian society with no social safety net, no health care, no pensions and where men lived to be 50 years old while a third of women died in childbirth. Get a grip. — Garth

Actually you and Harper have more in common than I thought. You are both always right.

On this one, absolutely. — Garth

#208 Harbour on 10.05.14 at 2:40 pm

I’m a Baby Boomer and I remember as a little boy asking my father what “Made in the U.S.A.” mean’t? It was on every toy I had…

I’ll never forget that conversation… Well son, it’s a big country next to us….

Country? What’s a country?

LOL

#209 Blacksheep on 10.05.14 at 2:47 pm

Why did sovereigns in control, (US / CAN , not PIGS), not retain control of $ creation ?

Why does a sovereign pay interest on $’s, that at one point, only said sovereign was legally, allowed to create?

Why does the sovereign not lend $’s to banks and collect interest for the benefit of the people?

Would love to hear others opinions on why this injustice was allowed and continues to, occur.

#210 Omg on 10.05.14 at 2:52 pm

#cowman

People always love to talk about how much better things were in the past.

But we are living in the best of times in North American. Pollution is at a century low, health care is better than ever and people that need help and actually seek it out can get it.

Try being a single mother back in the “happy days” of the 1950s, or getting that appendectomy back in the 1920s, or calling your kids across the country back in the 1970 when calls were $2/minute, Or communicating ideas across the country and continents on a strangely obsessive financial internet blog.

Yep things were so much better than now.

#211 not 1st on 10.05.14 at 3:02 pm

Lets address the HAM again. Chinese people are only allowed to take $3,200 out of the country. So is foreign capital finding its way here?

You bet, through Macau.

Las Vegas annual revenues – 6 billion dollars.
Macau annual revenues – 45 billion

“…rich patrons can use a service called a “junket agent” to receive a huge line of credit in Macau casinos’ VIP rooms, thereby evading the $3,200 limit on the cash that Chinese citizens can bring over the border. After it has been gambled, the money can be exchanged back into “clean” foreign currency, or moved to Hong Kong to be reinvested in property or put into offshore accounts.”

#212 Harbour on 10.05.14 at 3:22 pm

Also remember as a BB… having my tonsils and appendix taken out as a boy.

Don’t see that now?

#213 Flawed on 10.05.14 at 3:32 pm

Man was advancing “Just Fine” before the evil’s of the Private Federal Reserve came around in 1913 thank you very much.

Humans are the reason we live in a better world. NOT evil bankers.

Without adequate and constructive access to capital the quality of human life would be impacted. Life expectancy in 1913 was 50.3 for men, and today it is 63% higher. You don’t have a leg to stand on. — Garth

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

Let’s try again…..I did post my leg an hour ago and you did not post it. So here it is again. HYGIENE keeps people alive longer, not bankers or vaccines. This has been proven by many studies. Why do you think the rich nobles live to be old? They were clean.

http://healthimpactnews.com/2012/study-shows-soap-may-be-more-effective-than-vaccines/

Let’s hope Shawn and his banker buddies do not try to get a monopoly on soap.

I was trying to be humane to you by deleting this. But…your choice. — Garth

#214 Bottoms_Up on 10.05.14 at 3:34 pm

#204 Cow Man on 10.05.14 at 2:02 pm
———————————————–
If you’re not a fan of redistribution of wealth, I suggest you move to Haiti, Somalia or North Korea…they’re always looking for citizens and I hear their economies are really booming.

#215 Shawn on 10.05.14 at 3:36 pm

Blacksheep – you ask why certain things are not done at 208. But then, without knowing the answers you judge failure to do these things an injustice which is allowed to continue.

Meanwhile the people of Western countries live with the highest standards of living in history.

If you have not yet achieved success in life it is not because of bankers or the monetary system.

We all have opportunities in life.

Those who are most successful in life do not sit around railing about the injustice of banking or blaming others.

Change your thinking and actions to change your outcomes.

Sadly, a number of people who regularly post here are probably beyond help. In any case, if they are to be helped, they must help themselves and stop hurting themselves. The banks and monetary system are not their enemies. They are the enemies of their own success.

#216 Flawed on 10.05.14 at 3:59 pm

Sadly, a number of people who regularly post here are probably beyond help. In any case, if they are to be helped, they must help themselves and stop hurting themselves. The banks and monetary system are not their enemies. They are the enemies of their own success.

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

http://www.mcclatchydc.com/2009/11/01/77791/how-goldman-secretly-bet-on-the.html

Your right Shawn. Those people who are so madly in love with bankers who sell swill around the world and destroy the lives of millions of people – really need help. Which hospital are you going to check yourself into?

#217 Sheane Wallace on 10.05.14 at 4:02 pm

#214 Shawn

Thanks to cheap oil. Enjoy it while you can. Once is over all these goodies would simply disappear.

#218 withheld on 10.05.14 at 4:25 pm

Great analysis of the economy, until you started saying something about how wonderful everything is in the US and talking about the “job creation”??? Drill down on your statistics maybe? They’ve been playing with the numbers, big time, deliberately leaving out larger and larger numbers of people who the government feels are “no longer taking an active role” in the workforce. That 6% number has a strange definition, as far as most rational people would understand it, and if you add in all the other segments back in, our US unemployment rate is closer to 20% or higher, right where is has been the entire time, it’s actually worse than it was in 2008, or 2004, actually when all of this started, it only became headline news when the banks started complaining.

#219 withheld on 10.05.14 at 4:39 pm

And they weren’t going to let this get to mainstream media and spoil W’s chances of being re-elected, while they were trashing Kerry’s war record? They waited until 2008, when W was on his way out.
Just like W told us, the strategy to the war on terror, our “patriotic duty” is to go out there and “keep shopping” (?)
I was brought up with the motto “Question Authority”, good to remember. Question the government, the media, especially corporations, because none of them have your best interest in mind if you think about it.

#220 Inglorious Investor on 10.05.14 at 5:28 pm

The cognitive dissonance is palpable and red herrings apparently can fly on this blog. Where do I begin.

“Without today’s banking structure your standard of living – income security, public safety, essential services, job and personal prospects – would be seriously diminished. The system works. — Garth”

It’s a system that is designed to debase money––worse, it is a system that MUST debase money. It is a system that requires debt expansion ad infinitum in a basically finite world, and the only way out is either collapse or outright wealth confiscation. It is system that robs the people of wealth clandestinely. And sometimes not so clandenstinely, e.g. bail ins, now getting set up in Canada. It is a system where laws are changed retroactively to legalize criminal activities by the banks. It is a system where the so-called regulators essentially work for the benefit of those they are supposed to police. It’s a system where wealth can be physically confiscated when the gov deems it necessary (e.g. the gold confiscation in 1933). It a system where consumer debt is structure to extract the most wealth from people but the debt that people can purchase is structured to return far less. It is a system where profits are privatized but losses are socialized. It is a system where chartered banks can legally counterfeit money.

The system works?! Yes. Absolutely. For the bankers.

——————

“It’s for anyone who feels especially bitter and angry towards banks and central banks. Other symptoms likely include a lack of sufficient savings and wealth for one’s age. A strong desire to fondle gold might be another symptom.’

You obviously prefer fondling bankers. Contrary to your arrogant beliefs, not all people who think the system can be improved are bitter or lack savings. I’m doin’ just fine, thank you very much. Got a net worth of 1.6 million and just bought an apartment building. And I own the banks. So yeah, I know how to use the system for my benefit. I just don’t lick their boots.

—————————

“Without adequate and constructive access to capital the quality of human life would be impacted. Life expectancy in 1913 was 50.3 for men, and today it is 63% higher. You don’t have a leg to stand on. — Garth”

First of all that stuff about life expectancy is nonsense. Natural life spans were not lower in 1913. Modern medicines and technology are what have increased life expectancy. And to argue that banking is the reason for higher life expectancy is like arguing that melons help airplanes fly because pilots like melons.

——————————-

“In 1913 we had a largely agrarian society with no social safety net, no health care, no pensions and where men lived to be 50 years old while a third of women died in childbirth. Get a grip. — Garth”

Again, what does this have to due with our banking system? However, it is interesting that the “New Deals” in the US and Canada that inaugurated this current social safety net came after the banks collapsed in the US and had to go on “holiday.”

————————-

To be clear. I am not arguing life was better in the past. And I do believe in socialism, but only if EVERYBODY pays and EVERYBODY benefits.

But my original point, and one that cannot be refuted, is that while credit is important, and perhaps even essential, without energy there is nothing. And credit does not have come into existence via counterfeiting. Credit can come from actual savings, such as when a pension fund lends money for productive enterprises.

We need banks. Banks can be boons to society. But right now our system is rotten. When a system extracts wealth from society rather than expands it, that system has to go before it consumes everything.

Those who deny it either work for the corrupt system, benefit from it, are lying, or just ignorant. They likely suffer from cognizant dissonance. How do I know I do not. Because, as I said I am working within the system to my benefit. But that doesn’t mean I can’t see how things can be better.

#221 Entrepreneur on 10.05.14 at 5:32 pm

“American factories just had their best quarter for production in three years and consumer confidence is rising…”

Maybe our Canadian leaders can learn from the States and start promoting factories soooo people can have joooobs.

When we do not learn from our mistakes, do not correct them, then we are in a control environment. We have come a long way from 1913, BUT our system needs to be updated. Time for a tune-up.

#222 Juno on 10.06.14 at 1:53 am

In the US they are practically giving land away to the big companies so they can build their factories and create jobs.

But in Canada the land cost alone ties down any new companies from laying down roots. As a result US is creating oodles of jobs where Canada has screwed themselves and is loosing jobs. Factories moving to the states. More will come until the governments stops messing around with the real estate markets and suppessing interest rates.

Rate will go up in the US. Canada should follow, cause at the end of the day the ecomony will have to start to bounce back with real jobs and real industries and not the fabricated real estate facade.

#223 None on 10.06.14 at 1:40 pm

#58 WhiteKat on 10.03.14 at 9:50 pm
@ NONE, re: your comment #175 from http://www.greaterfool.ca/2014/09/30/its-not-working/
If my Canadian parents had “had me” in China, Australia, India, France, Greece, Mexico, Italy, Zimbabwe, or any other non-US state, your comment would have either been on probation or deleted.

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

Why? Same issue – you would have just been made at *insert name of country you were born in* and then blame Canada for not protecting you from your parent’s mistakes. I appreciate you are upset about having American citizenship but in the end, not Canada’s problem. Why would we want to “fix” this for you? You were an American first (by birth) a Canadian second by parentage, and you there has *always* been a method to give up your American citizenship. You just don’t like the process or the cost. Again, not Canada’s problem.