Was it only two days ago I warned you about deflation? Hmm. Two days later a lot more people are yakking about it. For example, when stock markets plopped on Thursday, this is what US investment fund manager Jordan Irving was saying to the boys at Bloomberg:
“The huge fear is deflation. The U.S. could have inflation creeping in here and there, but the rest of world’s deflation can snuff that out and that’s the concern.”
You probably noticed markets have been wildly emotional this week. Big dive on Tuesday. Big rally Wednesday. Big dump on Thursday. If you’re a day trader making money on volatility, it’s totally sweet. But if you’re normal, it’s a Tums moment. Especially if you don’t understand. And that’s why God made this pathetic little blog.
First, some context. Despite this week’s wild swings, US stocks are up 6% for the year and almost 19% over the last twelve months. The Toronto market’s okay, too – ahead 8.5% in 2014, and 17% since last October. Of course, gains like that mean investors are highly likely to take more money off the table if they think things are unwinding – and profit-taking could certainly erase market gains for the entire year in a few more sessions like we saw Thursday.
The IMF said earlier this week stocks are frothy compared to the actual global economy, and that was a good call. Nobody should be surprised if we lose 15% from the record close, which was less than a month ago. Given that yields are ridiculously low on most other asset classes, cheap shares in good companies will probably end up looking like bargains. After all, where else is money going to go?
So, sell-offs are not bad things. They restore better valuations. You just don’t want to be the last guy in before the plug’s pulled. There’s a valuable lesson here for people who recently bought a condo in Liberty Village, a baronial pile on the Westside or anything in Calgary.
Okay, why this turmoil this week?
The stock market is a leading indicator, stuffed with money trying to find future profits. Investors react not only to current events, but what they think those events and trends will bring. Right now, they’re seeing deflation – at least the potential of it. So investors sold when the IMF lowered its growth targets and commodity values fell, because a less busy world will bring lower corporate profits.
The next day investors bought when the US central bank hinted interest rates might stay lower longer (because the world economy is swampy) – which would help companies profit from cheap money. And on Thursday they fled again. This time things looked more serious and consequential. Oil has entered a bear market with the price of crude down at $85 a barrel, and more declines loom. Poor Alberta.
Europe’s a mess. The head central banker, Mario Draghi, said the euro zone’s economic growth is slowing and inflation is now “excessively low.” No kidding. At least three countries are in outright deflation, with falling prices and wage. Even Germany is sputtering. You already know about Russia, which is paying a heavy price for being run by a body-building, ex-secret police, jingoistic, country-grabbing egomaniac.
Meanwhile it’s earnings season, as big corporations report their Q3 numbers, and the expectation is profits of the biggest US outfits moved ahead 4.9%. Three months ago the forecast was for almost 8% – which reflects slumping commodity values and a rising US dollar.
Okay, so what about us?
The dollar has just dropped to the 89-cent level, and oil played a role in that. Despite the 10% erosion in our currency, the latest trade numbers suck. And you know about job creation, which has been a big disappointment (notwithstanding today’s surprising number). Household debt levels are rising again after a small lull last year. Youth unemployment is in double digits and family finances are more than tenuous. I gave you some of those numbers yesterday.
A quarter of the economy is based on real estate, where we have $1.2 trillion in mortgages. Houses are selling for ten times incomes in Vancouver and seven times in Toronto. Three times is viewed as affordable. Canadian real estate, in other words, is far frothier than the S&P, the Dow or the TSX. Leverage is extreme with rates at all-time lows. Instead of using cheap money to escape debt, we’ve used it to augment our servitude. The average down payment is 7%, and yet house prices have been rising in Calgary at five times the inflation rates, and in Toronto by four times.
What markets have been saying lately is that interest rates can go to zero, and it’s won’t matter. What the future needs is higher incomes, economic growth and jobs. Not more debt, and certainly not the Canadian model where people think they’re rich selling each other homes at ever-higher values, using borrowed money. The condo economy is not sustainable.
For two years the D-thing has been a topic here. If it does materialize, expect lower prices and falling incomes. No matter what the interest rate, debt will be harder to pay. Meanwhile frothy home equity will blow away. A temporary stock market rout will look so damn innocent.
166 comments ↓
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Yesterday was certainly the hockey stick formation Smoking Man always describes… Exciting times. I didn’t take any Tums today, is there anything at the pharmacy to treat mild dismay?
BE AFRAID OF THE GIANT D!!!!!
Good summary and commentary on things to come.
Is investment in growth economies like INDIA an option at this time .
on the ‘independent’ journalism:
http://www.youtube.com/watch?v=yp-Wh77wt1o
Housing as a consumption driver is dead. For at least the next decade, maybe two or three. Bonds, just like housing, are in a bubble and overvalued.
So what’s left? Stocks that have positive correlation to interest rates are likely to suffer. Figure that much of the US stock market is dependant on ‘consumer’ consumption and cheap credit. That leaves the negatively correlated Canadian stocks as a pretty good bargain. Doubly so with the below-average P/E ratio of under 15. And it leaves the precious metals emerging as an alternative to bonds and fixed income as being symbolic of ‘savings’ for those not willing to take business investment risk.
In other words, dollar cost average into a good TSX index fund such as XIU don’t look at the statements for a few years, and you’ll be very pleased. And don’t get too out of balance just in case I’m wrong.
Ok, another try:
1. Deflation would be fantastic.
2. Debtors could think of a better way to service their debt like complementary erotic massage on demand.
Putin is a counterbalance in this world that stands up to the West and its MSM. He’s logical in his actions and doesn’t let bullies make his decisions for him. That’s why the West vilifies him; because they fear independent thinking. The egomaniacs are the ones here in the West. Just listen to their attitude when they talk about the rest of the world.
. . . . . . . Price Increase/Decrease. . . . . . . .
. . . . . . . . . August 2008 – 14. . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+36%. . . . . . . . . . . . . . . . . . . . . . . .x. . .
+34%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+32%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+30%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+28%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+26%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+24%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+22%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+20%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+18%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+16%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+14%. . . . . . . . . . x. . . . . . . . . . . . . . . .
+12%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+10%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+8%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
+6%. . . . . . . . . . . *. . . . . . . . . . . . . . . .
+4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
+2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
..0%. . . .x *. . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . . . . . . . . . . . . . . .*. . .
————————————————————————-
. . . . . . .Aug. . . . . May . . . . . . . . . . Aug. .
. . . . . . 2008. . . . .2010 . . . . . . . . . .2014. .
* = Victoria
x = Winnipeg
We are back to 2007 prices in Victoria!
As of August 2014, house prices in Victoria were 5.6% lower than in August 2008. In contrast, house prices in Winnipeg increased 36.1% from August 2008 to August 2014. (Based on Brookfield’s index data)
August 2014’s index level was only slightly higher than August 2007’s index level. (link)
This index data also shows that:
* prices are lower year-over-year in Victoria
* prices are lower now than at the end of 2013
This chart makes it clear that many near-peak buyers are stuck with underwater mortgages in Victoria.
Why are prices lower now than they were in 2008? Many Victorians will tell you that Victoria’s economy weakened in 2010 and hasn‘t improved since then. Many people have lost their jobs and left Victoria in search of employment in other parts of Canada. The housing market reacted in a predictable way – sales slowed dramatically and prices have fallen significantly.
Comparisons to the US housing market:
* In the US, house prices in the top 9 bubbliest cities (San Francisco, San Diego, Los Angeles, Las Vegas, Phoenix, Tampa, Miami, Washington and New York) peaked and began to correct first (think Victoria). Note that Boston and Denver were not among the bubbliest US markets.
* Of the US markets that the Case-Shiller Index tracks, the top 7 warmest cities are included in the group that began to correct first. Again, think Victoria.
* This group of 7 warm US cities that began to correct first all ended up being among the elite group in terms of the biggest overall price declines as the 2006 US housing bubble deflated. Once again, think Victoria.
About 2 years into the US price correction, interest rates were slashed from near-normal levels to historically low levels. Without this massive injection of stimulus, house prices in the US would have fallen significantly more than they did. This extreme rate drop is also a big part of the reasons that prices in the US have rebounded.
The same thing will not happen in Canada. As house prices fall across Canada, it will be impossible to slash rates nearly as much as they did in the US (rates are currently at rock-bottom levels in Canada). Without the option of a massive rate drop to provide a major source of housing market stimulus, prices in Canada will fall for a longer period of time and deeper than in the US. Also, prices in Canada will not rebound after reaching bottom the way they did in the US.
(continued below)
I look for stocks with a forward price earnings (FPE) less than 15, a price earnings growth ratio (PEG) less than 1,( preferably less than .7). The stock has to be in a long term upward trend ( 2 yrs regression mean), and be in an sector I believe has good growth potential for the next 2-5 years. This correction is providing more selections as the FPEs drop into range.
the temporary stock market route is a symptom of over valuation ,as is declineing oil price,its all part of the new “normal”.
The continueing quest for inflation by central bankers has hit its peak.As ive said before ,unless the bankers start dropping money from helicoptors we are deflating,the consumer couldn’t be any more stressed financialy then they are now….theres NO money left outside of the central banks!
SO…no growth,deflation until TPTB release all that printed money and it hits the system.
then we get the hyperinflation.Unfortunatly i believe I will live to see this…..
Sam on 10.09.14 at 8:39 pm
Putin is a counterbalance in this world that stands up to the West and its MSM. He’s logical in his actions and doesn’t let bullies make his decisions for him. That’s why the West vilifies him; because they fear independent thinking. The egomaniacs are the ones here in the West. Just listen to their attitude when they talk about the rest of the world.
Seconded!
John
Garth….My dog is FUNNIER…
https://www.youtube.com/watch?v=Uzv2CidycGM
Today’s chart clearly shows that it has been better to rent than buy (with a minimum down payment) in Victoria since 2008. Basically, some degree of price appreciation is needed in order to break even after buying, even with rates at historically low levels. Housing bulls always leave out the following points when arguing that buying is better than renting:
* Maintenance costs for houses (a new roof could easily cost you $20 K or more) and special assessments for condos (I know of a girl in Victoria who was recently hit with a special assessment of $80 K that she must pay).
* Bulls assume that historically low mortgage rates are permanent. This is simply false. As rates rise (and they will), your monthly payment will increase.
* With compounding interest on a 25-year mortgage and a minimum down payment, you will end up paying for your house 2.5 to 3 times by the time it is paid off. Think of all the price appreciation that would be needed in order to offset that cost.
* You lose the ability to invest your down payment money and earn more money with it. Garth has explained this on his blog.
* If your have an underwater mortgage and need to sell your property, you will have to pay the bank the amount that you are down on your mortgage as well as an additional (costly) penalty. The other option would be to claim bankruptcy. Turning down a higher paying job in another city because you are stuck in your home prevents you from earning more money.
Victoria’s housing bubble is massive. The loosening of mortgage lending standards, beginning in 2000, resulted in the inflation of Canada‘s (debt-fueled) housing bubble. This is no different than what happened in the US from 2000 to 2006.
Debt-fueled price increases in Victoria from 2000 to 2010 were not matched by gains in incomes or rents and the situation remains basically the same today. Incomes have stagnated in Victoria for years (14th chart). Stagnating incomes do not give home buyers any additional buying power. As for rents, anyone who has rented in Victoria for more than 2 or 3 years knows that rent increases have been minimal for years. I know several people who are paying less rent now than they were 5 years ago.
House prices have rebounded in the US since hitting bottom, but are still much cheaper than in Victoria and the rest of Canada. Houses in several warm US states are available for (literally) a fraction of the cost of a similar house in Victoria. The following examples prove it.
Florida:
$217 K, West Melbourne, FL (5 beds, 3 baths, 3,045 sq. ft., built in 2014, attached double garage)
$250 K, Port St. Lucie, FL (5 beds, 3 baths, 3,264 sq. ft., built in 2005, 10,000 sq. ft. lot, attached double garage)
$281 K, Riverview, FL (6 beds, 3 baths, 3,009 sq. ft., built in 2014, attached double garage)
Nevada:
$223 K, Las Vegas, NV (5 beds, 3 baths, 3,200 sq. ft., built in 2006, attached 3 car garage)
$237 K, Las Vegas, NV (5 beds, 3.5 baths, 3,247 sq. ft., built in 2006, attached 3 car garage, HOA (homeowners association fee): $18 per month)
Arizona:
$192 K, Maricopa, AZ (7 beds, 4 baths, 3,920 sq. ft., built in 2007, attached 3 car garage, HOA fee: $57 per month)
$223 K, Buckeye, AZ (5 beds, 4 baths, 4,021 sq. ft., built in 2006, attached 3 car garage, mountain view, backyard pool)
Girls and guys, prices have steadily declined in Victoria since 2010 even as interest rates fell. Prices will not stop falling now that interest rates have hit bottom. Obviously this means that rates do not have to increase for prices to fall more. Clearly, lower prices are on the way.
Rent for now, save more money and buy when houses are cheaper. This will do amazing things for your financial future. Buying a house now in Victoria would be financially foolhardy.
Until next time – Cheers!
#7 Sam
He is very reasonable guy and the ‘leaders of the free world’ could very easily settle with him, they just need to treat him with respect as partner, not as slave.
But they are arrogant and all we will pay dearly for their stupidity.
Why should we care? Because as a result of their stupidity we would be ruined and then managed by the Chinese (and I mean no race but mentality here) which would be nasty.
#69 Kenchie from yesterdays post Oct 8, The Unthinkable, asking for a link. Here you are: Whispers from the Edge of the Rainforest Oct 7.
#2 Happy Renting on 10.09.14 at 8:31 pm
You got to admit, I’m pretty God dam good. But an idiot all the same..
A JD induced post on face book, post will surely get my wee Scottish wife, to kill me.
Her family is Fkd….. I just sabotaged a come back of sorts..
Only child syndrome I’m thinking… Works for me..
#LunchGoneMissing? #ItWozTheCatWotDoneIt.
http://youtu.be/QiNdubxfLdE
Let me explain to everyone what’s REALLY happening here:
– A few months ago the Federal Reserve started scaling down their purchases of bonds.
-Since then the market was running up on momentum.
– Now, with a slight time delay, the market finally realizes that there is a lot less cash sloshing around in world because the Fed is not buying so many bonds, and as a result the stocks are now starting to reflect this slowing down of the Fed’s bond-buying.
– Its the exact reverse to when the Fed STARTED buying bonds; back then the stock market did not start to take off until a few months AFTER the Fed started buying bonds in huge volumes.
– This could easily become a huge correction. The big problem is that China is slowing down, Europe is slowing down due to the effect of Russian sanctions there, and the last recession was 7 years ago and we always get a NEW recession every 6 to 8 years, so if a big recession is due in a year from now then the stock markets will PREDICT this by crashing 9-12 months ahead of time, like the way they are doing right now.
“……And you know about job creation, which has been a major disappointment……….”
=========================
Au contraire, the current Prime Minister has excelled in job creation (just not job creation for Canadians):
Globe and Mail, May 2 2014:
“..By that measure, the number of temporary foreign workers has grown from 181,794 in 2002 to 491,547 in 2012……”
I dident start off as an only child, few suicides, stuck my with the family language..
I got it… What doesn’t kill you makes you stronger.. And I’m one supper hard ass.
Apparently one of the reasons oil might be taking a dive is because some new fusion technology has been validated by third-parties as being the real deal. Which could mean huge changes to energy production and hence life as we know it. Which would mean oil losing its importance. Here’s an article regarding Blackrock (largest hedge fund in world) going short on oil futures after the release of the fusion technology report today…
http://www.lenr-forum.com/forum/index.php/Thread/694-BlackRock-Inc-investment-managemen-%C3%A0-1357-billion-dollar/?postID=1331#post1331
“You probably noticed markets have been wildly emotional this week. Big dive on Tuesday. Big rally Wednesday. Big dump on Thursday.”
====================================
Welcome to a typical October in the Stock Market…
Let us Hope Janet Yellin ends QE on schedule. Money and markets will determine the interest rate ahead. It may be higher (less forward demand), it may be lower (perhaps more forward demand) or, it could remain the same.
As for me, I’ll hold onto the investments I have in solid world wide companies that make a product, or service to sell at a profit. Sales (and profits) may go down, they may go up, or they remain the same. So might their stock price yet the dividends usually keep on trucking’ to my wallet.
I don’t need gold, or silver as an investment -they just sit there they pay no dividend. There value is based on what a greater fool might pay for them.
Wait, are we talking Real Estate here? No. we’re talking shiny rocks.
CHMC could save the taxpayers a whole lot of trouble, simple by reducing their mortgage coverage to 3 times the salary average in the jurisdiction of any property being purchased with such insurance. (Boy, that would peeve a lot of recent buyers, but stop price nonsense going forward).
http://www.leaderpost.com/business/Unsold+housing+units+slow+market/10274787/story.html
Bye-bye bubbly Regina housing market. 400 units, wow, whatever few buyers are left should be smelling the blood in the water right about now.
Here’s more on the cold fusion technology for context…
http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-by-third-party-researchers-seems-to-have-1-million-times-the-energy-density-of-gasoline
Today is an anaversury. 8 years ago today.. I couldn’t put in a full day at tax farm…
Double fishing Jd, one for me… And one for my little brother.. God damn bueaty..
I’m selling my car and today put half of that futur cash into ZIN ETF. Industrials. ftw.
It’d be fun to be a fly on the wall in Harper’s offices these days. I wonder what they think of the oil bear market. Good for weakening the currency, but how about taxes? Isn’t it going to reduce massively the tax they get from the oil industry? Less production…
I hope ZEB catches up with the fall tomorrow. It’s hanging on too well. No bargain.
Much of Germany’s woes are self inflicted due to their ill conceived push to convert their economy into a “Green Energy Economy”. Their myopic and ideologically driven grovelling to Greenpeace, the Sierra Club, the WWF and the IPCC have caused energy costs to skyrocket for both homeowner and corporation alike. Two of their largest utility companies are now in dire straits, with one likely bankrupt and the other fighting for survival. Other corporations are packing up and leaving. I guess no one gave Angela Merkel the memo that cheap energy is a good thing.
So how did following the totalitarian dreams of a cadre of young Marxist-Leninist eco loons work out for them? Not good.
And Ontario is warming up on deck for their turn at bat. BATTA! BATTA! BATTA!
Anyway, sorry about the rant blog dogs, but I’ve got nothing else to do. I’ve got a diversified balanced portfolio, cashed out of my oil and gas stocks in summer and I’m getting primed to do some vultching in both the stock market and later, in real estate.
***Yawn***
Funny how you mentioned there would never be another crash like 2008 in your lifetime and no hard landings not so long ago. Will you buy everybody a round if you are wrong?
In 2008-9 markets dropped 55%. This correction has yet to hit 5%. Yes, I’m buying. — Garth
Right on Garth.
As said a few times already, I re-balanced in Dec/Jan and went overweight cash. Last couple of weeks I said I began to nibble, however, as I commented lat winter when I re-balanced, I said this Oct. will be time to feast on the ETF deals that are coming. I need a bigger drop to buy, not time yet, but I can smell panic fermenting. If I am wrong, I don’t care. This is the 1 advantage the retail investor has on salespeople selling stocks/mutual funds, we don’t have to be investing during market highs, and we can wait for juicy corrections. Opportunity is always endless. Balanced, diversified, Liquid, and debt free is always calming and keeps ones financial vision in HD clarity. Freedom First, my favorite ideal. Always satisfying.
#7 Sam:
“That’s why the West vilifies him; because they fear independent thinking.”
While I do not like Putin, I do agree with you on the West hating independent thinkers.
“The search for stand-alone mechanical solutions also avoids the need to ask why some individuals break the rules and points away from examining the social conditions which may contribute to violations and the possibility of changing those conditions.”
I watched “The 90s” on TV last weekend. Whatever happened to the anti-globalization protests?
Just watch and see what happens in the next few years with technology and our way of life. Facebook is just the beginning of the behaviour monitoring technology coming soon to a city near you.
http://web.mit.edu/gtmarx/www/techandsocial.html
Bought a new snow blower with cash at a well known retail chain back in August. Thought I would get the best deal when everyone was still using their pools. Two weeks later it dropped by 300 dollars. Went back in and got a refund on the difference. Two weeks after that, it dropped by another 150. Went back in and got another refund.
If this is what I can expect out of deflation, I’m all for it!
If you buggers are drinking tonight, lift your glass, too Steve.. I’ve done it a lot tonight…
But the show must go on… Two more, then I can go back to the stars…
Putin is merely today’s opportunistic ruler of a corrupt ande kleptocratic oligarchy. He’s a nobody and nothing special. If Ronald Reagan was president Putin would be sweeping floors in the local MacDonalds. Obama had more to do with the making of Putin than Putin did.
God the bastard, won’t take me down in storms, I smoke, I drink, I drive fast.. But no… The bastard keeps me here to torment me…
It’s not going to be a good day for him when we finally meet..
I played hockey…. Never list a fight…..
#34 Shawn on 10.08.14 at 9:11 pm
Bye for Now…Some of you will be glad to know I am swearing off posting here until at least December 1
=========================
I give him until the end of this long weekend. Tops.
Have we as Canadians ever gone through something similar to what we’re seeing now, i.e. deflation? Is there a specific year or few years back in time that can be used as a reference?
#28 Van Isle Renter on 10.09.14 at 9:09 pm
Brilliant, nice to know some don’t sleep from birth to death.
F-en tree huggers.. I looked at my Toronto Hydro bill
Peek hours, in other words bend over..
You would thick, when royal plastic was having the injection moulds going 9 to 5 that’s when the bastards would bitch slap you with a premium..
Nope.
It’s 5 to 9 when the little tax farm slaves are cooking and washing away yellow armpit stains..
MoFo’s
#11 Mark
Bye-bye bubbly Regina housing market …….
Interesting to note the very history of Regina ( named after the Queen of England, her last name) .
When Clifford Sifton was building the railroad across Canada, they required places , railroad towns for shipping, locating main stations, servicing trains etc.
They couldn’t figure out why the land they selected in Saskatchewan was so expensive per acre. Great gravel base, stable for the railroad trains weight . Turns out some politician bought the land a few hundred miles east of Regina , which had been purchased in advance by some greedy opportunistic politician.
To spite this opportunistic guy, they moved the railroad to what is now location of Regina. The ground is called “loon shit”. It absorbs moisture in winter, crushing your homes walls in and pushing up the basement, every year! In summer , the ground recedes 2-6 inches from the home. Natures hammer.
There really is no basis, apparently, for Regina even to exist.
Fun fact……
Thanks for the great blog effort Garth!
#24 Mark on 10.09.14 at 9:06 pm
http://www.leaderpost.com/business/Unsold+housing+units+slow+market/10274787/story.html
Bye-bye bubbly Regina housing market. 400 units, wow, whatever few buyers are left should be smelling the blood in the water right about now.
_________________________________________________________________________
I like how this article says that builders will simply “take their foot off the gas” when it comes to building, so to let demand catch up to supply. One simple problem… Stop building = putting scores of tradespeople out of work, effectively making it impossible to pay their mortgages. Time to watch these dominos fall.
I remember in early 2000’s ,co workers would brag every year how their houses went up $40,000 to $50,000 according assesments.They all laughed that they made more money every year then their annual salary.No more bragging anymore.Another worker who said to me recently I hate my house because my house value has lost $40,000 and it takes all our family money to own it.
Looking at posts from SmokingMan, I think it’s a random text generator. At least those I speed-read through.
I love the volatility. you are right, ETF’s rock. These are my favorites, UVXY NUGT DUST TZA TNA. Hope u have a few :)
Earth to Smoking Man… earth to Smoking Man.
Come in Smoking Man.
SM’s hittin’ the JD hard again folks…
He’s back on the bottle!
To Smoking Man:
hey hey, is that the nude selfie you talked about?
on a more serious note:
“oxygen mask”… need I say more? can we believe anything from authorities anymore?
general comment:
I use DRIP, so I expect to pickup some bargains automatically.
while sell high is key to successful investment, buy low is just as important. opportunity is here, will you grab hold of it?
“What the future needs is higher incomes, economic growth and jobs”
—-
Ahem, maybe I missed something but where on earth is that going to come from??
jingoistic – thanks again Garth for my word of the day (year).
What correction? I don’t smell any blood! Waiting.
@ Sam Steele:
Shorting oil because of new fusion technology is a short-term strategy at best. Electrical energy is mostly produced by coal, hydro power and nuclear fusion, not by oil, so if we (hopefully) find a viable way of producing clean electrical energy using nuclear fusion (as opposed to fission), then oil prices should not be affected in the long run. In the short run, emotions and over-reacting might affect oil prices, until investors realize that oil has almost nothing to do with generating electricity.
sorry, the first “nuclear fusion” was supposed to be “nuclear fission”.
Cheers!
Garth…you’re about to be very right about housing prices (finally! ;D) The flipside, is your rising rates meme is dead in the water…oh, and the meme about the “strong” US economy fueling stock prices….
The only thing that fuels stock prices is the Federal Reserve…check out the chart of the Fed’s Balance sheet vs the S&P 500….nobody cares what the IMF says…no more POMO means no more upside. simple.
Best way to ride the markets out? Buy stocks in pharmaceuticals that sell antidepressants. Not complex math!
The consistent message is this:
Central bank monetary interventions have created an unstable environment that whipsaws the major economies between inflation and deflation.
Now that the latest version of QE is supposedly coming to an end this October, the deflationary bias is taking over just as it did in late 2008, and following the ends of QE1 and QE2.
Without additonal monetary intervention, asset prices will fall and debts will become increasingly harder to service. Governments, being the largest debtors of all, will resist any deflationary period for long and the next major move will be to soon embark on a new round of QE by the Fed.
The playbook has been clearly revealed by their own words and actions in the past.
….then there’s the 90 cent dollar. We’re all paying the exchange-rate “hidden tax”, as we all pay more for imports with our weaker money. I assume the govt wants it this way or they would raise rates to bolster the dollar. Imagine how popular it would be if they raised our taxes by that much…and that quickly, in plain view…
Remember that mortgages do come to an end when they are paid off.
On the other hand, paying rent goes on forever.
Alwyn
There is a time to rent, a time to own. With landlords subsidizing tenants and properties over-valued, guess which this is? — Garth
Our consumer centric economy has been almost entirely based on cheap/ plentiful debt, thereby driving the wealth effect by driving & distorting prices of various asset classes.
Rates for too low for too long have clearly diminishing returns for the real economy; with it’s mis-allocation of capital into further over capacity.
The same can virtually be seen almost everywhere worldwide…
Europe in danger of another ‘lost decade’: Ifo’s Sinn (video & text)
“The euro zone’s main problem over the last decade has been that savings have been shifted into southern European nations that have “eaten up” that capital rather than using it to increase productivity in their economies, he said.
“If you take the pain anyway it won’t happen,” he said. “The financial crisis is still beneath the carpet and could at any time reappear in the open.”
http://www.cnbc.com/id/102072762?trknav=homestack:topnews:5
Would that Germany’s problems were just from trying to go green. That can be fixed quite easily. The problem is that Germany has been buying crappy bonds from other EU members so that they can keep buying German goods.
That has resulted in high employment in Germany while other countries are forced into austerity in return for the loans/bond buying. Think of it this way. You have a store. You need customers. The people from the various neighbourhoods can’t afford what you have for sale so you extend them credit. You have a fortune on your books but no one is paying. You demand that they cut back on goods and divert money to you. They do it for awhile but then say nuts to that. We have to buy food, pay rent, etc. Everything operates around you because you’ve got the savings, except you’ve loaned out all this money and they’re turning into bad loans. If you go out of business, the whole scheme collapses. Germany goes down and we’ll see a financial disaster. We’ll have deflation in spades and the US won’t be able to stop it. People from all over Europe have flocked to Germany because that’s where the jobs have been. Their wages have been sent home to keep their families from starving. German jobs disappear and all those families depending on German money are going to be in dire straights.
“Buy stocks in pharmaceuticals that sell antidepressants.”
Nearly all the antidepressants on the market are generic medications now with minimal margins for the purveyors. So nice try!
Diabetes drugs producers probably are a better longer-term bet as lord knows the atrocious dietary habits around the world produce enough of that.
Re Putin: “That’s why the West vilifies him; because they fear independent thinking.”
===================================
My god… by god… what in anyone’s name is wrong with you Putin sympathizers? Can any of you silly little bitches read… anything of substance? Anything of worth? Anything over a kindergarten-level web site?
Vladimir Putin (AKA Владимир Путин) bumped and manipulated (and worse; much worse) his way up the ladder from USSR KGB officer rising to the rank of Lieutenant Colonel (would look great on your resume now wouldn’t it?). Can you morons imagine what the pay grade of a Lt. Col. in the KGB was? (about the starting salary of a Saskatchewan schoolteacher).
Shortly after the fall of the dysfunctional and bi-polar USSR, he jumped into politics in his old stomping ground of St. Pete. This was around 1991, I believe. He was elected mayor. The ensuing shark-fest made him a millionaire (in dollars, that is… Rubles were of no interest to him then, never have been, and are of even less interest now, as any blind man with a belly-button and an a$$hole can attest … excuse me; I digress).
By 2000, he managed to overcome a stable of political nags to be elected president of the Russian Federation. He has since managed to surmount several roadblocks and is once again at the helm of the rotten corpse.
After a mere 23 years of gleefully porking the vodka-swilling masses he once spied upon and abused, this “independent thinker” is now worth $70 Billion (US); that’s $78.36 CAD these days… but I doubt he’s any more concerned than you are).
BTW, Warren Buffet is ‘only’ worth ~ $58.5 Billion today.
==================================
Changing the subject, as for the current downturn, that many were sure had ended yesterday, we’re not quite done yet.
Watch oil; when it starts to break, then a rally will ensue. Not before.
As for all the “Money Printing” in the US (that never happened), do you goofy trollops know the difference between “Money Printing” and an “Asset Swap”? I didn;t think so.
If the EU had modified the US Fed example 5 years ago to make it suit their own circumstances, maybe… just maybe… they wouldn’t be in the fix they’re in today.
In 2009, many of you mongrels were so damned sure the US was dragging the whole world into a vortex. You were 100% wrong. Today, Europe and China have become the world’s problem children.
Have a nice day. You’ll know the bottom is in when you see the markets and oil rising above their 5 and 15 DMA’s and forming higher lows; not one day before. But of course, you have other blogs with much, much better advice.
Putin is an independent thinker? I seriously doubt that. He is a drab little functionary who landed in the right place at the right time. Right now, he enjoys wealth and power, but sooner or later, he’ll come to a sticky end when his people turn on him. A short sharp coup, or a drawn out civil war.
I wonder if the remaining mutual fund salespeoples even bother to promote BRIC funds anymore? Personally, I think I could make more money going through blue bins looking for beer and wine bottles than I could at Investor’s Group right now.
JimH beat me to it, before he began abusing all of us goofy trollops. I identify more as a silly troll, but I like the direction he went in.
Anyway, if you want to know more about Putin, you could do worse than reading this bio by Masha Gessen: http://www.amazon.ca/Man-Without-Face-Unlikely-Vladimir/dp/1594486514/ref=sr_1_1?ie=UTF8&qid=1412909557&sr=8-1&keywords=the+man+without+a+face
I remember when we could looks at earnings and economic indicators, instead of hanging on every vague word or phrase some central bureaucrat comes up with. If global growth does slow dramatically causing another recession then it will be a ‘considerable time’ before we trust them again I hope. After every QE there has been a trending downturn, which is why QEs have numbers and ever greater stimulus (there was only supposed to be one if people recall). Lets hope it’s different this time.
“What the future needs is higher incomes, economic growth and jobs.”
yep. that’s what we’re all saying, come to think of it. You know one way to get there? Divest from companies that believe cutting wages & jobs or importing TFWs = productivity.
Betcha you won’t.
RE: #35 Van Isle Renter on 10.09.14 at 9:16 pm
Obama had more to do with the making of Putin than Putin did
Fact check:
Reign of President GW Bush = 2001 to 2009
Reign of Putin = 2000 to present day
Look at the happy couple holding hands in this cute picture:
https://img.4plebs.org/boards/pol/image/1393/96/1393969647505.jpg
“You already know about Russia, which is paying a heavy price for being run by a body-building, ex-secret police, jingoistic, country-grabbing egomaniac.”
Always amusing when people express opinions on subjects that I have good knowledge of. There seems to be a strong correlation between projected self-confidence and shallow understating.
Garth,
Re: plunging oil prices,
Should one be buying major Canadian energy stocks like Suncor for example?
Thanks
Continued ZIRP and QE to infinity. Welcome to the proverbial box canyon.
This is what current real estate, stock and bond valuations are based on.
How tough are things, on the street, here in Vancouver? Here in a City where people think some chipboard and 2×4 palace is worth a million bucks plus?
“Plans for a family-friendly New Year’s Eve celebration in Vancouver this year have fallen through because organizers were unable to raise enough money from corporate sponsors.
A spokesman for the Vancouver New Year’s Eve Celebration Society said Thursday that after nearly a year’s work, organizers fell $100,000 short of the $300,000 they hoped to raise for the gathering with musical performances, fireworks and a food-truck festival.”
Link: http://tinyurl.com/l3cczj5
#29 Van Isle Renter on 10.09.14 at 9:09 pm
Much of Germany’s woes are self inflicted due to their ill conceived push to convert their economy into a “Green Energy Economy”. Their myopic and ideologically driven grovelling to Greenpeace, the Sierra Club, the WWF and the IPCC have caused energy costs to skyrocket for both homeowner and corporation alike. Two of their largest utility companies are now in dire straits, with one likely bankrupt and the other fighting for survival. Other corporations are packing up and leaving. I guess no one gave Angela Merkel the memo that cheap energy is a good thing.
So how did following the totalitarian dreams of a cadre of young Marxist-Leninist eco loons work out for them? Not good.
——————–
Germany has been written off so often during the last 70 years, it’s not even funny.
East Germany is just coming to it’s own.
Berlin is a young entrepreneur’s Mecca.
Only 50% are homeowners, so the coming RE crash will cause barely a ripple.
Never bet against the Weltmeisters.
Do I detect some “Germophopia” in some of the posts today?
No need. Learn from them and prosper.
If this ebola continues to spread the markets are going to Crash.
Ka boom.
Talk about velocity of money. Every couple of weeks in a community yard sale, we all sell the contents of our garages to our neighbours – seems to be working so far.
Re: #22 Sam Steele on 10.09.14 at 9:05 pm
Gee I wonder if it had anything to do with the future price of oil being worth 20 percent less than the spot price of oil at the start of this year?
Victoria Real Estate Update (#9 + #14)
Thanks for the notes on the Victoria Market. I don’t chart that market but it is interesting that you show sales prices are back to 2007 in some instances. My Vancouver housing chart shows that strata prices here have been in a narrow channel since 2007 as well:
http://www.chpc.biz/vancouver-housing.html
SFDs of course are a different matter.
I think 2007 is probably the first major stair step down.
Re: #38 JSS on 10.09.14 at 9:27 pm
The dirty thirties (The 1930s).
“They all laughed that they made more money every year then their annual salary.”
————————–
Of course, no one makes squat until they sell. Then they must go shopping for another place to live within the inflated market in which they have ‘profited’.
They must either seriously downsize, move to a cheaper locale or start renting if they expect to actually benefit from their windfall.
That part doesn’t get too much mention.
“We’re all paying the exchange-rate “hidden tax”, as we all pay more for imports with our weaker money.”
But global demand is so weak that the minor depreciation in our currency vs. the USD$ is offset by cheaper USD$ prices for imports. Additionally, while the CAD$ has minorly weakened against the USD$, the CAD$ has held its own quite nicely against that of many other economies that we trade with.
So “hidden tax”, hardly. Canada has extremely stable consumer prices, and as housing continues downwards, deflation is going to be an even larger headline issue. The BoC will be hard pressed to even keep policy rates as high as they are.
Sam Steele,
The reality of fusion has been known to Marty Mcfly and Doctor Brown for 30 years. It’s going to be everywhere in 2015, so right on time. Make sure you put some money into this company:
http://backtothefuture.wikia.com/wiki/Fusion_Industries
Sorry guys, but Garth’s take on Putin is pretty much dead on the money. Go talk to some Russian expats and ask them what they think of him. He’s popular at home, where he controls almost all media, but hated abroad by Russians once they escape his influence.
Buy the dips, my watch list is growing fast
“Meanwhile frothy home equity will blow away. A temporary stock market rout will look so damn innocent.”
Bring it on.
This re and market froth is the result of serial dumb decisions to support FIRE at the expense of the economy at large.
A decent correction will revert prices to the mean and money will once again flow at a sustainable rate and support the entire economy, not just re. It’s time the realturd industry got a shakeup on so many levels anyway.
There is no quick fix solution, nor is there a magic curative event just around the corner. Waiting, therefore, does absolutely no good. It does the opposite.
Debt and unemployment/weak quality jobs are putting an enormous damper on savings- especially retirement savings. Governments believe that social programs such as medical care are going to put a major squeeze on the public purse and they are correct, but only partially. Wait ’till they start getting the bill for all of the additional stress-related illness caused by inadequate income. People don’t see their dentists, they don’t eat as well, they fight, get depressed, get divorced, have more accidents, end up with disease they might not have had, turn to crime…….
…oh, I forgot, all events, according to actuaries, spin money in the economy and therefore have value.
#81 Honey Dripper on 10.10.14 at 3:46 am
“Buy the dips, my watch list is growing fast”
________________________________
You guys sound like cowboys. Wonder how that strategy worked out for the same cowboys in Japan betting on the Nikkei when it was relentlessy sliding down from 40,000….. and never came back.
Buy the dips, diversify, rebalance, harvest gains, go for dividends…. looks like everybody’s on the same page. I’m surprised taxi drivers aren’t spouting that same rock-solid wisdom yet. Works great until it doesn’t.
That is beautifully written and I thank you. God gifted you with some terrific grey matter.
Bravo.
Here you go blog hogs!
http://www.cbc.ca/news/canada/prince-edward-island/p-e-i-faces-housing-glut-1.2794727
Found this most interesting
Ellis believes if interest rates rose slightly more people would rush to buy a house before rates rise even more. But if mortgages stay cheap, and with lots to choose from, he does not believe market conditions will change any time soon
Garth’s entry today, plus two articles I came across by chance recently, made me decide to add my 2 cents’ worth.
I have an interest in bubbles, since, through no reason other than greed and a healthy dollop of stupidity, I was virtually wiped out financially by the popping of one in 1987.
One of the things I’ve learned since is that there are usually several clear warning signs that a bubble is about to burst, which if heeded early (erring, preferably, on the side of caution) can save one a lot of heartache.
One of the most dependable signs, I believe, is the phrase “panic buying”. Where this is used with some frequency in respect of any asset or market, it’s time to head for the hills.
Another is the assertion, “it’s not a bubble”, especially when uttered by someone with a vested interest in the bubble continuing to inflate.
Finally, “a record”. Records are good, especially when they’re broken by sprinters or people eating hot dogs. But when the price of an asset is continually setting new records, to the extent that this becomes the new normal, that asset is likely to have become overvalued. As the Chinese (used to) say: No tree grows to the sky.
In the case of Australian property prices, which Garth’s pathetic blog has on occasion pointed out seem to be closely tracking those in another resource-based economy in the northern hemisphere, I think we’ve now reached the point where all the bells are ringing.
Judge for yourself from the title of two recent articles: First, there is “run-down Sydney car space sells for staggering $210,000” (Oct. 2, Yahoo7 Finance), and second, “small house sells for big money” (Oct. 9, Canberra Times).
The first article refers to a car space that sold for $210,000, and points out that “while incredible, this sale is not a Sydney record, as Property Observer recalls a 16 square metre single car parking space at North Bondi sold for $240,000 in 2010.”
The second article refers to “one of inner-Sydney’s smallest and most iconic properties”, which has sold before auction for almost $2 million.
It is built on a 44-square metre site, and “only three car spaces wide”. Charmingly, this single-bedroomed gem is cloistered “in an unassuming laneway in the backblocks of Surry Hills”, and at “almost $43,000 per square metre it is one of Sydney’s most expensive houses”.
As the selling agent states, “the price was a record for a one-bedroom property in Surry Hills and was viewed by more than 250 groups in the three-and-a-half weeks it was on the market.”
There we have it: It is a record, officially. And clearly there was panic buying, with 250 groups competing for the prize. And, obviously, we’re not dealing with a bubble, since why would anyone put down 1.88 million smackeroos to buy a 200 m2, one-bedroomed townhouse spread over five levels (that’s a lot of stairs, by the way), if they had the least suspicion they might be dealing with a bubble?
No-one can time a bubble, I believe. But this kind of insanity ultimately does become self-limiting, like competing for a Darwin Award. And, yes, Darwin is a place in Australia. Might there be a town called Darwin somewhere in Canada as well?
============
Article references:
https://au.pfinance.yahoo.com/money-manager/real-estate/article/-/25162399/run-down-sydney-car-space-sells-for-staggering-210-000/
http://canberratimes.domain.com.au/real-estate-news/small-house-sells-for-big-money-20141009-113tqt.html
… and a bonus, just for people living in Vancouver:
https://au.pfinance.yahoo.com/photos/photo/-/24211984/dumps-sell-for-trophy-home-prices/
Any boomer that’s been involved in the stock market, knows nothing is different today than 40 years ago. The market goes up and it goes down. It has trended up over the last 75 years. Up, down, up, down is what it does. You can pick up a financial article from 1973, 1987, 1992, 1995, 2005, and 2011, and you’ll read the same “doom and gloom” story. Don’t even pay attention to these “financial entertainers” on Yahoo, CNBC, etc. They can rattle off ALL their statistics and STILL, they have no clue if the market is going UP or DOWN tomorrow.
As an Island resident I can attest to the fact that there are for sale signs everywhere even in the best areas like Brighton (think Rosedale in Toronto). With an aging population and little immigration, I think it will likely get worse as most of the rural folk have already moved into the “big city” of Charlottetown over the past decade.
Biggest complaint this week is the price of oil. Barrel down 20% over last 3 months (105 to 85) but IRAC raised oil rates a few weeks ago. Today they dropped it but the net result was a 1.5 cent drop. Things are going to be tough this winter if we get a cold one.
26 Sam Steele re fusion
‘…………..
Lenr looks like a joke. Or a scam.
It is a lie either way.
Here is a real fusion outfit
Generalfusion.com
Either way saying oil.futures are being driven by a technology which MAY work in 20 _ 40 years is absurd
“With the authorization of the People’s Bank of China, the China Foreign Exchange Trade System (CFETS) has announced on 29 September, 2014 to launch direct trading between RMB and Euro on the inter-bank foreign exchange market…..”
http://www.pbc.gov.cn:8080/publish/english/955/2014/20140929145638977934288/20140929145638977934288_.html
And this is how 15 years of Putin oppression looks like:
http://1.bp.blogspot.com/-YAzv8iWkIpg/U6qMsPACBeI/AAAAAAAAJVM/v05iyuAxkvo/s1600/5.jpg
Stock futures are making yesterday look pretty.
Down 2.3%. Get your guns ready.
The world… it’s all a game…which ends badly :)
Just released Stats Canada employment numbers for Sep.2014:
Canada – 2013 / 2014
Employees – 15,121,700 vs 15,288,200 +166,500
Public S. – 3,557,900 vs 3,650,600 +92,700
Private S. – 11,563,800 vs 11,637,500 +73,700
Ontari0 – 2013 / 2014
Employees – 5,824,300 vs 5,900,300 +76,000
Public S – 1,304,200 vs 1,352,000 +47,800
Private S. – 4,520,100 vs 4,548,300 +28,200
Conclusion – God saves Canada and Ontario but the RE will continue to go up thanks to the newly minted extremely well paid and uber DB pensioned “public servants”
http://www.macleans.ca/economy/business/the-new-upper-class
74,000 jobs created in Canada. Lowest unemployment since Dec 2008 – 6.8%.
For companison purposes, the U.S. jobless rate was 5.9 per cent in August, but Canada and the U.S. calculate their job numbers differently. If Canada’s numbers are crunched the way the Americans calculate theirs, the two countries have the same jobless rate — 5.9 per cent.
http://www.cbc.ca/news/business/canada-s-economy-adds-74-000-jobs-1.2794839
“What markets have been saying lately is that interest rates can go to zero, and it’s won’t matter. What the future needs is higher incomes, economic growth and jobs.”
I’m glad that you’re with the program now. Central banks have been saying that for years. Growth, jobs and higher incomes need to come before rates can rise. Inflation is what we want.
Amazing job numbers for September. Probably exception but notable one.
Canada adds 74,100 September jobs, jobless rate hits near 6-year low
https://ca.finance.yahoo.com/news/canada-adds-74-100-sept-123555788.html
If not for Poloz Ca dollar could have been at parity. We definitely need new BOC governor.
Of course most of these jobs are probably commodities (energy) driven, low paid manufacturing and service jobs and direct result of the credit bubble (construction).
But still good number worth noting.
Garth, your thoughts?
Just released Stats Canada employment numbers for Sep.2014 (CANSIM table 282-0011):
Canada – Sep. 2013 / Sep. 2014
Employees – 15,121,700 vs 15,288,200 +166,500
Public S. – 3,557,900 vs 3,650,600 +92,700
Private S. – 11,563,800 vs 11,637,500 +73,700
Ontario – Sep. 2013 / Sep. 2014
Employees – 5,824,300 vs 5,900,300 +76,000
Public S – 1,304,200 vs 1,352,000 +47,800
Private S. – 4,520,100 vs 4,548,300 +28,200
Conclusion – God saves Canada and Ontario but the RE will continue to go up for the time being.
#79 John – you may have been aware of this invention back in late 20s early 30s by Alexander Pogue. I actually saw the plans for this carburetor that were published by Pogue in a newspaper from the time. I believe it was 1930 and had been cut out and saved by my grandfather. He showed me them about 1970. He ended up giving them to some mechanic friend who thought he could build one. Imagine what getting 200 mpg would have meant to the oil companies.
http://www.newmediaexplorer.org/sepp/2003/06/07/original_blueprints_for_200_mpg_carburetor_found_in_england.htm
#61 Mr. Nihilist on 10.09.14 at 10:47 pm
”I think I could make more money going through blue bins looking for beer and wine bottles than I could at Investor’s Group right now.”
OMG, the last place I would be placing my hard earned dollars.
OTTAWA—Statistics Canada says the country’s economy generated 74,100 net new jobs last month, dropping the unemployment rate to its lowest level in nearly six years.
The unemployment rate for September fell by 0.2 percentage points to 6.8 per cent — its lowest since December 2008.
Economists had expected the economy to create 20,000 jobs in September and the unemployment rate to hold steady at seven per cent, according to Thomson Reuters.
Statistics Canada’s latest labour-market data found 69,300 of the new jobs were full-time work.
******************
WOW!!!
“You guys sound like cowboys…I’m surprised taxi drivers aren’t spouting that same rock-solid wisdom yet.” – 83 nobody
That’s because they’re currently spouting the wisdom of investing in real estate. Didn’t you know? Cowboys and taxi drivers are natural enemies, and always do the opposite of one another. True story.
http://blogs.wsj.com/moneybeat/2014/10/08/sears-tumbles-as-vendor-reportedly-halts-shipments/
Signs of the times. Expect Target will be next. You could drive a D9 down their isles and you wouldn’t hit anyone. Never seen a place so void of shoppers.
26 Sam Steele on 10.09.14 at 9:07 pm
Here’s more on the cold fusion technology for context…
==========================================
yeah riiiight. guess we listened to the same ‘coast to coast am’ episode last night.
#94 Sheane Wallace
“If not for Poloz Ca dollar could have been at parity. We definitely need new BOC governor.”
—————————————————————–
I completely agree. All he’s has done is to inflate the price of real estate more, raise household debt even more. He’s made imports way more expensive and exports are not going to recover just because of a few cent drop. Exporters have to learn how to be competitive using innovation, not a deflated currency – it’s not sustainable.
GET RID OF POLOZ.
“Instead of using cheap money to escape debt, we’ve used it to augment our servitude.”.
Cheap money is cheap precisely because it is in the form of debt and not in the form of income. Instead of lending to and saving businesses during the turmoil which would spread the money as income, the govt. decided to lend directly to the taxpayer. It gave instant adrenaline to the economy but we’ll suffer for it.
houses should be 4-5x family income MAX in places such as Toronto and Vancouver.
Garth, thanks for your service to the Canadian public, this blog has been very useful at putting world events into perspective.
Great job numbers today for all the ill-wishers (or they can just pretend the figures are rigged, when they’re positive anyway).
Smoking Man’s post at #39 could have been poetry. And Smokey, sorry to hear about your painful anniversary, those days are not easy.
Sometimes your advice about the stock market is similar to a day trader. Not very consistent.
Actually I did not give any advice. But long-term investors should stay invested for the long term, and rebalance regularly. — Garth
60 JimH on 10.09.14 at 10:40 pm
“As for all the “Money Printing” in the US (that never happened), do you goofy trollops know the difference between “Money Printing” and an “Asset Swap”? I didn;t [sic] think so.”
“Money printing” IS effectively happening. In fact it’s physically happening too, only not directly. “Money printing” is the Fed’s number one job. They do it in concert with the banks and the government. Read “Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion” by the Federal Reserve Bank of Chicago.
Brad Lamb has arrived in Calgary. Check out the full page article in Thursdays Calgary Herald. We are about to be saved by the condo king !!!
I wonder if folks subscribe to this blog just for those pictures… thankfully the writing and message is brilliant too. Thanks!
#45 Steve French on 10.09.14 at 9:57 pm
Earth to Smoking Man… earth to Smoking Man.
Come in Smoking Man.
SM’s hittin’ the JD hard again folks…
He’s back on the bottle!
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
Did he ever stop drinking, its like his casino habits, smoking his brains out and crow calls on the market. Sure we can all call them and be 50/50.
By the way he smokes du mauier, #$%%^ and some green stuff! (#$%%^) couldn’t tell the other night half of his drunken drug induced hazes the spelling was really off!
My wife is a real green person with all of the best of intentions on leaving a small carbon footprint. Lately she has been nudging me to scrap the gas powered MKX and go to a Volt or something. Looked at it once, looked at a Tesla, very nice car and extremely great driving range between charges. The dual motor version of the P85 performance sedan will have a top speed of 250 kilometers per hour, compared with the current speed of about 210 km/h. It will accelerate from 0-60 mph in 3.2 seconds so super fast. However $120 K starting. At $120 K I could take that money and double it in two years whereas the Tesla will immediately loose 25% as soon as I take possession of it. Well the point is I aint buyin and with oil tanking of late it was bad timing for Tesla. But then again they are based out of California with a bunch of rich Hollywood movie stars who like to be nevu green and such. I guess thats their target market!
“What correction? I don’t smell any blood! Waiting.”
Europe and Far East should be down about 10% from top
A deeper correction for all markets might happen (and I hope it does) but you never know (or rather never know when)
#40 Spectacle
Actually Regina is a Latin word.
Now Moose Jaw has an interesting history I bet.
#92 jose – I wonder how many jobs have been lost in Canada in the last yr and how many have used up their UI and have given up looking for a job?
@ Nobody, OK go ahead and panic just because everything is going on sale. You buy your coffee after it jumps up $3? If you want to buy hamburger do you pray for prices to rise? Go ahead sell everything and buy when it goes higher, I’m waiting on the other side just dripping for my chance!
Brilliantly written, Garth! Keep the fantastic work coming.
Ping a Chinese insurance company is giving loans for down payments in China for 120 multiple housing complex projects.
Creative financing undoubtably to be replicated here in the looming future once all else fails…
#69 Bill Gable on 10.09.14 at 11:47 pm
How tough are things, on the street, here in Vancouver?
I drive through a fairly new industrial area in South Burnaby every day and can’t believe the number of “For Lease” signs I pass now. These were preveously all small to medium sized businesses with employees. I think the hammer has already fallen out here on the west coast … people just don’t know it … yet.
#7 Sheanne Wallace
Erotic massage as a complement of what?
Did you mean “complimentary”? Erotic massage in place of debt payments?
There are several words for that–perhaps even one or two that would be acceptable on this pathetic blog with its faintly unwholesome undertones.
Deflation. Ok then.
Why are pork back ribs now $10/pound when only a few months ago they were $5.99, utilities are skyrocketing and my car insurance was just renewed for $20/month higher (now with less coverage!) when I’ve had no claims or tickets, ever?!
Please Garth, point out 1 item that has decreased in price. It would make my day.
#24 Retired boomer “CHMC could save the taxpayers a whole lot of trouble, simple by reducing their mortgage coverage to 3 times the salary average in the jurisdiction of any property being purchased with such insurance. (Boy, that would peeve a lot of recent buyers, but stop price nonsense going forward).”
I have had similar thoughts. Young people do not need stocks to raise a family in but they do need housing. It is unfortunate that housing has become a speculative investment to the detriment of people trying to buy a place for a HOME, as opposed to an investment. Perhaps if there were a rule which placed priority on enabling people to buy a HOME without having to compete in the market with speculators…. something along the lines of requiring a minimum of 50% down when bidding on a property which would not be your primary property (in which you live)… this might help keep prices more reasonable for the folks that just want to buy a place in which to live. There would still be real estate speculators, but far fewer, and of course there are still lots of other paces more these speculators to invest..
#111 Holy Crap Wheres The Tylenol on 10.10.14 at 11:44 am
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To be truly ‘green’ one has to look at the entire lifecycle of a product…what’s the carbon footprint on building the Tesla? (ie, lithium mining…think diesel engines, steel manufacturing etc.).
And when you think about vehicles in general…well, you must drive them on roads paved with asphalt….on tires made of petroleum rubber….and petroleum (plastic) products throughout the interior.
Heck, even your breath, and fecal output, has a carbon footprint.
I just hope she doesn’t try and sell you to move into a 300 sqft ‘home’!
#98 Grantmi on 10.10.14 at 9:48 am
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Perhaps that was to make up for the ‘error’ in the summer where only 200 jobs were created.
#12 John in Mtl on 10.09.14 at 8:50 pm
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Dude, lay off the crack, it is messing with your head. Forcible conscription, invading other countries, killing journalists and any threat to his ‘throne’…he is a true, blue, modern-day Totalitarian ruler.
‘#111 Holy Crap Wheres The Tylenol’
total greenwashing
save your $$
right now we use electricity to make light
in the proper world you add frequencies of light to produce electricity
the problem is that process is free
did you notice the Rockefellars are getting out of oil?
they are going to tell us soon they ‘own’ the sun and will start charging us for it….is my guess
#115 Honey Dripper on 10.10.14 at 12:16 pm
@ Nobody, OK go ahead and panic just because everything is going on sale.
______________________________________
Not in that game, don’t care. Good luck.
#83 nobody
But everyone is NOT on the same page. If they were, this blog would have no need to exist. If they were, we would all be value investors, stocks would be priced fairly and investment would be much more predictable, instead of having everyone chasing momentum: buy high, sell low, or chasing yield: buy it before it blows up.
#120 Re: deflation…..HDTV. couldn’t resist.
Deflation. Ok then. – zeeman1
Why are pork back ribs now $10/pound when only a few months ago they were $5.99, (meat has been bad lately – seasonal veg and fruit are low as ever in market – apples are better for you, ribs do taste a bit better)
utilities are skyrocketing – natgas in bc is going to drop, elec is the bad one – avoid heating w it. cut the cable. phones are 20/mo voip for 100 telus bill 10 yrs ago
my car insurance was just renewed for $20/month higher (now with less coverage!) – sounds like the slugs at icbc, shop it around otherwise – get an older car drop ALL but the liability. i just cut my home insurance (after 15 yrs of getting ripped off)by nearly 60% by learning that most every single insurer out there uses a formula to shaft many the customers much of the time. If you don’t have an accurate idea of the ratio of house/contents/costs in your policy , i bet you are getting it too.
Please Garth, point out 1 item that has decreased in price. It would make my day.——- costco hot dog has been the exact same price for 25yrs. (deflation in real terms) oh that, and i can have an incredibly powerful phone/computer/gps/wifi/etc device in the palm of my hand for under 100bucks , i remember when a half-gigabyte drive cost 5k.
look at your spending, find ways to stem the bleeders.
mnpr # 121,
“#24 Retired boomer “CHMC could save the taxpayers a whole lot of trouble, simple by reducing their mortgage coverage to 3 times the salary average in the jurisdiction of any property being purchased with such insurance.”
“mnpr: Perhaps if there were a rule which placed priority on enabling people to buy a HOME without having to compete in the market with speculators…. ”
—————————————
Sounds reasonable enough, but will never happen.
1 in 3 is employed in housing and 70% of home ownership means, its not in the best interest of the voting Cattle to do as suggested.
It will take a 2% across the board rate increase or a 2% rise in unemployment to affect serious declines in home values in Van or Toronto.
This is of course, leaving out stuff like Ebola or black swans.
I’ve learned it doesn’t matter what should theoretically happen, based on math, common sense or historic precedence. The game has been changing rapidly since 9/11 and kicked into high gear after the GFC. We have been in uncharted waters for a while now.
The systemic levers of manipulation are just to tempting to the those clinging to power.
I think of it like, “don’t fight the fed” or “don’t bet against the US”. Like it or not, if this is where the ship is heading, I get on board, to avoid being left behind.
Hi Garth. Would deflation not mean lower interest rates?
That could be ‘depression’. — Garth
Show me a retail mall that promotes inflation.
All shoppers want is sales price, deflation
so I don’t know why people think deflation is bad. Give me an item I want for 50% I’ll buy 5 of them.
129 bdy sktrn on 10.10.14 at 1:30 pm
“costco hot dog has been the exact same price for 25yrs. (deflation in real terms)”
Can you have ‘deflation in real terms’? For some reason, that doesn’t make sense to me. (It’s probably me.)
I agree with your response to zeeman1, though, fully. Can you please tell us more about the home insurance?
“You guys sound like cowboys. Wonder how that strategy worked out for the same cowboys in Japan betting on the Nikkei when it was relentlessy sliding down from 40,000….. and never came back.”
You miss the point. the market can go up and down all the time. it can stay below the top for years, and still diversified balanced investors will make money
#122 Bottoms_Up on 10.10.14 at 12:52 pm
#125 Mike T. on 10.10.14 at 1:07 pm
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Yep I know the green thing but she likes to help a little bit here and there. As far as the move into 300 ft, no freekin way, anything less than 800 square feet and a couple would be killing each other within a few weeks. Had a couple sell their place beside us and move “Downtown” into a 750 square foot concrete coffin. It lasted for one year then they bailed. They literally came close to divorce. Back out into the countryside here in Oakville. So my rule of thumb one person needs at least 500 Square feet of space! Any less and you go loony!
As for the Tesla, forget it I’m actually in the electronics industry and I don’t even want a Tesla. But they do look nice. Don’t foo yourself somebody with enough money will try to hold rights on the expressed energy from the sun one day.
@#60 JimH
Dont waste your time with #8 Sam and #15 Sheane W.
Myopic doesnt even begin to explain their view of the real world……. macular degeneration might.
As for your excellent synopsis of Vladimir Putin.
I will have to go back and talk to my intelligence committee.
They told me Putin had about 1 billion U.S. stashed in Swiss banks, not 70 Billion.
But either way, a billion dollars 10 Billion or 70 billion saved on his meager govt salary is impossible without theft on a grand scale.
I think you’re absolutely right that his own people will string him up eventually.
Kinda like the “missing” leader of North Korea, Kim Jong Un…. Under house arrest and perhaps to be executed? A fate any ruthless dictator deserves.
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=12&cad=rja&uact=8&sqi=2&ved=0CGsQqQIwCw&url=http%3A%2F%2Fwww.theguardian.com%2Fworld%2F2014%2Foct%2F09%2Fkim-jong-un-speculation-north-korea-leader-intensifies&ei=BSQ4VJ23ItPsoASnroDICw&usg=AFQjCNE3a9xwZ_Ye1P0IHPDq8nfEQuTyCQ&bvm=bv.77161500,d.cGU
I notice the silence from Sam and Sheane is deafening….search their thesaurus’s for the meaning to the word “My”
I believe you “lost them” after that
110 OMG
Hey pal, please stop using the handle I have been using for the past 5 years.
#132 deflation vs inflation
“Give me an item I want for 50% I’ll buy 5 of them.”
———————–
Unless you believe the item will be 40% next week.
But let’s face it, there is no such thing as ‘X percent off’ some ‘normal’ price. That’s an illusion. There is only a price at which the item sells.
If that price has been falling then people will wait. If it’s been rising people wont wait.
That’s why deflation is ugly for manufacturers, vendors and providers of service.
My earlier comments on CHMC insurance being reduced to 4 X average salaries in the jurisdiction of the property.
It probably would not limit speculators on property. Do CHMC rules limit the number of CHMC insured mortgages a person can hold? If not, maybe limiting the number would reduce speculators.
The entire idea is to reduce prices, or demand (which will eventually reduce prices).
As for items not (seemingly) impacted by inflation:
Electronic goods TV sets, computers in particular
Here, Auto & Home Insurance. I have bought the SAME limits or more for LESS dollars over the last 5 years!!
Dairy products have been stagnant here for quite a while
(But we are “The Dairy State” there’s a cow on every corner) Milk still $2.99 a gallon
Yes, Beef and Pork have increased.
Natural Gas rates have fallen for the past 3 years, costs less to heat the home now.
Locally property taxes have increased MUCH less than inflation the last two years. Thank you local politicians for watching the spending, keeping it in line with growth!!
“The stock market is a leading indicator”
of nothing, it’s been overrun admittedly by central banks, high frequency trading, and Goldman sacks who never looses.
“What markets have been saying lately is that interest rates can go to zero, and it’s won’t matter.”
Unprecedented money printing and low interest rates since 2008 have proven nothing but global economic deflation today. The little guy was bypassed while banksters were bailed and today are larger and more risky with more derivatives.
StatsCan:
“Adjusted to US concepts, the unemployment rate in Canada was 5.9% in September, the same as the US rate.”
very interesting, press play! (37min long)
“In his new book, Halpern takes a dive into the underworld of the debt collection industry, where having a criminal background is no barrier to entry and may sometimes be useful. He writes of a world in which batches of old, uncollected debts may be sold again and again to collection agencies and may end up being worked by two companies simultaneously.”
http://www.npr.org/2014/10/09/354846672/bad-paper-explores-the-underworld-of-debt-collection
Markets can relax now “The D.” stands for Dual Motor and not for Deflation
Dear Smoking Man, though I do enjoy your ramblings from time to time… The spelling is one word ‘Facebook’. Not ‘Face Book’… When you refer to something, please do it properly or nobody will ever want to buy your book, especially not your Face Book. (Which I think would be a book about faces)
Peace bro.
Go Riders… Oh wait, we lost Durant just like our housing market.
Smoking Man whats your position on these futures?
http://www.msn.com/en-ca/money/topstories/exclusive-us-dea-most-interested-in-us-investors-in-canadian-marijuana-firms/ar-BB8wssY
Interesting developments in one of Ottawa’s neighbourhoods:
https://www.youtube.com/watch?v=RrEBU2PO0q0&index=4&list=UUgOOu3yxg2INY-jmZfl_qdw
The new trend should be cutting public servant income…it is bananas!
Example (1 of MANY)
40 per cent of the Windsor, ON police force took home more than $100,000 last year.
Across the river, Detroit’s highest-paid police officer—aside from the chief—took home US$53,000 last year.
With a violent crime rate five times the US national average, Detroit retained its dubious title as America’s most dangerous city.
Detroit’s chief of police earned $97,697, – less than half the $205,000 of Windsor chief Albert Frederick got.
Albert earned about the same as Raymond Kelly the police commissioner of New York City.
Then on top of that, are the benefits…
BANANAS!
…and more
In Canada, the average income is $38,000, and a $100,000 income puts you in the richest six per cent of the population.
With an average income of $83,500, schoolteachers in Ontario now earn the same as the average lawyer in that province.
That’s just salary, add in the benefits!
Bananas!
…Part 3
In Leduc, Alta, a first-class firefighter with three years’ experience now earns $92,303 per year.
Meanwhile, in Ontario, 24 of Owen Sound’s 29 firefighters earned more than $100,000 last year…So did 53 of Belleville, Ont.’s 62 firefighters.
Great crews, i’m sure. And deserve a good income…but those salaries are …
BANANAS!
#139 Retired Boomer – WI on 10.10.14 at 2:52 pm wrote
My earlier comments on CHMC insurance being reduced to 4 X average salaries in the jurisdiction of the property.
It probably would not limit speculators on property. Do CHMC rules limit the number of CHMC insured mortgages a person can hold? If not, maybe limiting the number would reduce speculators.
A better (and more market-orientated) idea would be to limit the size of a mortgage on a house to 15 times the annual rent that could be charged for it.
That would put buy-to-let investors and first-time buyers on a level footing. It would also encourage people to save up a bigger down-payment so that they could beat their competition in any bidding war.
Mah-kets got killed today at the close.
A short bear rally is due, then a nice multi-percent drop in a relatively short period. Just study how bubbles pop.
Where’s that squirrel soup booklet I had a few years ago?
Personally, I hope the loonie falls back down to the 70 or so cents on the (American) dollar that it was about 10 years ago. It’s great for tourism and it’s great for exports.
Sure, it makes imports more expensive and imported consumer goods will increase in price, somewhat mitigated by deflation (which has been happening, I would argue, since probably 2008). But consumers are tapped out as it is, and collectively we shouldn’t be buying any more crap anyway.
We’ve had a banner year in Whistler, BC, where I live, and a lower Canadian dollar will only make Whistler, and the whole of British Columbia and the rest of Canada a more attractive destination for tourists.
Bring on the crumbling dollar, bear market in oil & gas, and deflation!
#138 Mister Obvious
It’s bad news for a consumer driven economy.
In times of inflation, if you want something, you buy it, because you will still want it tomorrow and the price will be higher.
In deflation, you wait until you pretty much need it before buying. You need a new refrigerator, because the old one is broken, not because it’s lacking in stainless. You need a new bathroom, because the tiles are falling off in your shower, not because you saw something on HGTV. You need a new car, because your old one is costing too much to maintain, not because it doesn’t have Bluetooth. You need a new TV, because the dead pixels are obscuring the score, not because your neighbor bought one that is 2 inches bigger. Etc etc.
#75 Brian Ripley
Indeed, that Victoria is back to 2007 prices is a milestone on the way to much lower prices.
The most interesting thing about it is that this happened while:
* interest rates were falling and then reached record-low levels
* house prices in all other major Canadian markets showed price gains (prices skyrocketed in some cities)
* Canada’s household debt-to-income ratio continued to increase
Keep tracking.
“A better (and more market-orientated) idea would be to limit the size of a mortgage on a house to 15 times the annual rent that could be charged for I”
Why not just do away with the CMHC altogether and allow the market to do all the borrowing and lending, on terms that they find mutually agreeable?
There’s no imperative for the government to be involved in the mortgage business.
“In Leduc, Alta, a first-class firefighter with three years’ experience now earns $92,303 per year. “
Part of the fundamental flaw in public sector compensation is the whole idea that more ‘experience’ should bring higher pay. After all, is a 5-years-on-the-job police officer really delivering a different or a more valuable service than a 20-years-on-the-job officer? Or is a 3-year firefighter better than a 10-year firefighter in putting out a fire?
#30 Lyin Brian on 10.09.14 at 9:11 pm
“Funny how you mentioned there would never be another crash like 2008 in your lifetime and no hard landings not so long ago. Will you buy everybody a round if you are wrong?
In 2008-9 markets dropped 55%. This correction has yet to hit 5%. Yes, I’m buying. — Garth”
I’ll grab a few pitchers. We all need beer.
re home insurance
it was time to renew – took a look a the policy, see the following (using round #’s)
house 500k
contents 400k
detached structures 50k
expenses 150k
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total 1.1m
const costs are high in vancouver so i’m ok with the house part. 500k
our ‘contents’ dont consist of any 100k wine collections or bags of diamonds, just about everything in it can be had at costco for less than than 10yrs ago – i figure we need maybe 150k tops.
detached structures – a 600 dollar vinyl shed , no coverage needed
expenses – 3k/month rent for a year and we would be fine. say 40k/yr
so in total i need 690k if it all burns to the ground.
i call up the [email protected] (insurance broker) and ask for the coverage i need ($410k less than current policy)
“oh no you can’t do that” – pardon me? – ” we have a formula”
contents – 0.8*house
detached – 0.1*house
cocts – 0.3*house
no choice in these amounts – they are automatic
i did have a choice – find someone else.
turns out all the others do the same thing. i was pissed. kept at the google to find out why this has to be – eventually found a company who said ‘buy only what you need’ – did exactly that , online in 10 mins i had a policy for 800 instead of 1700.
#56 The end is coming
Remember that mortgages do come to an end when they are paid off. On the other hand, paying rent goes on forever.
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There is a time to rent, a time to own. With landlords subsidizing tenants and properties over-valued, guess which this is? — Garth
Yes, I agree that timing is important and after 5 or 6 years it seems that your forecasts are getting closer to being borne out.
The truth of my statement still stands.
— Alwyn
#148 Stickler
i tend to agree with you, but don’t at least a portion (if not some of all) of the benefits come from gross pay deductions?
#147-#149 Stickler
Assuming your quotes on Canadian earnings ARE correct, it appears your public sector is more highly compensated than what I have seen here in the US mid-west area.
Assuming those are just wages, and not “total compensation” packages that include fringe benefits.
Big assumptions.
One thing I have noticed in the US. Pay varies widely by jurisdiction. Example: State Patrol officers in WI (state employees) often make less than county sheriff, or city PD officers. Never assume ALL jurisdictions are paying top shelf wages.
Take heart, the more you make, generally the higher your tax bills.
#148 Stickler on 10.10.14 at 3:57 pm…
Actually if you look at the Stats Canada link below, you will see the average salary in Canada for July 2014 is almost $ 50,000 a year.
Educators across Canada averaged $ 52,312 a year.
Best average salary in Canada was in mining, quarrying, and oil and gas extraction at $ 106,548 a year.
http://www.statcan.gc.ca/daily-quotidien/140925/t140925a001-eng.htm
I can’t find any stats you quoted online such as the average Canadian income as $ 38K or the average Ontario teacher at $ 83.5K.
Links?
#157 bdy sktrn on 10.10.14 at 4:48 pm
Excellent posts, and very helpful. Well done on the insurance- same thing happened to me a while back. I despise cheap, jargon-slinging brokers, so I told him to go fly a kite and never looked back. I wish everyone did.
Regular folk are being bled dry by unjustifiable price increases of all sorts and it’s time these money-for-fresh air industries were as well- beginning with insurance, banks, and realturds.
Individual Retirement Accounts:
Preliminary Information on IRA Balances Accumulated as of 2011
GAO-14-878T: Published: Sep 16, 2014. Publicly Released: Sep 16, 2014.
What GAO Found
For tax year 2011 (the most recent year available), an estimated 43 million taxpayers had individual retirement accounts (IRA) with total reported fair market value of $5.2 trillion. About 99 percent of those taxpayers had aggregate IRA balances (including inherited IRAs) of $1 million or less. As shown in the table below, few taxpayers had aggregated balances exceeding $5 million as of 2011. Generally, taxpayers with IRA balances of $5 million or more tend to have higher adjusted gross incomes, be joint filers, and 65 or more years old. The Internal Revenue Service (IRS) statistical data GAO analyzed may not provide a precise estimate of the number of taxpayers or other quantities when the number of taxpayers in a particular reporting group is very small. Even assuming maximum contributions sustained over decades and rolled over from an employer plan, it would take an aggressive stock market investment strategy to accumulate an IRA balance over $5 million. There is no total statutory limit on IRA accumulations or rollovers from employer defined contribution plans. An individual who made the maximum contributions every year since 1975 to a traditional IRA could have accumulated about $303,420 achieving investment returns equal to the average annual Social Security interest rates.
http://www.gao.gov/products/GAO-14-878T
314 with >25m.
=====
The 314-Member Club — With $81 Billion in their IRAs
…”Senator Ron Wyden, Chair of Senate Finance Committee Taking Testimony on Retirement Plans for Americans…”IRAs, said Wyden, “were never intended to become tax shelters for millionaires – they’re designed to help typical Americans save for retirement.”
By Pam Martens and Russ Martens: September 17, 2014
http://wallstreetonparade.com/2014/09/the-314-member-club-with-81-billion-in-their-iras/
“You already know about Russia, which is paying a heavy price for being run by a body-building, ex-secret police, jingoistic, country-grabbing egomaniac.”
I got to hang out, drink, and shoot the sh*t with Laurence Wilkerson last night, the Chief of Staff to Colin Powell in the lead up to the Iraq War. He was actually the one who designed the slideshow to be shown at the UN although he was pretty upset when he found out they knew they were getting him to “fix the facts to the policy.”
Talking with him, he makes it clear that Putin has in no way acted erratically up to this point. The US involvement in Ukraine and NATO’s movement east justifiably made Russia nervous and defensive. Wilkerson is now actually worried though because Putin has just threatened the Baltic states and the sanctions may have made things so hard for him at home with the oligarchs that a jingoistic invasion may be the only thing to save him.
One other interesting thing I learned from him, that part of the reason the US/Russian relations fell apart after they helped with Afghanistan was that Larry Summers helped protect some guys who fraudulently stole $80 billion dollars from Russian when it had to privatize its assets. Apparently was the main reason he got canned from Harvard.
Follow ups:
Wages:
According to the globe and mail:
The median individual income in Canada was $29,878 in 2010, – which means half the population had an income above that level and half below. Yes that data is a bit old, as was the Macleans data i quoted previously.
Re Pensions it varies. In 2013, Ont teachers will contribute an average of almost 12% of their annual salary to the pension plan. The Ontario government and other employers match total annual member contributions. (so only 1/2 is paid by the teacher)