Wheels up

BROKE modified

A GreaterFool rule oft mentioned is this: buy what appreciates, rent what depreciates. Hence, it’s okay to buy a house if at the right price, in the right place. But it’s almost always dumb to cash-buy a new car.

You’d think most people would figure this out. Instead of shoveling over thirty grand for a soul-sucking minivan, they’d be far better of stuffing that money into their TFSA and investing it, and letting the dealer or the bank give them the car. After all, in ten years the TFSA money should double to $60,000. The minivan will be worth (maybe) ten thousand.

Well, seems this is academic for most folks, anyway, since they don’t have any money. Car loans have exploded, and it’s no coincidence this has happened concurrently with a housing boom and a crappy job market. Real estate continues to skim off huge hunks of household cash flow, leaving precious little for wheels, investing, or a Plan B.

Moody’s Investor Service has just tallied this. Ugly. Seven years ago car loans totaled $16.2 billion, which is a giant pile of money. Today that pile is $64 billion – an increase of 300%, or 20% a year. But it gets worse.

As you know, these loans now have terms of eight or nine years, which exceeds most marriages and is longer than the lifespan of most Great Danes and almost all Kias. And despite a stuttering economy, the combination of cheap rates and ridiculously-long pay-back periods has created a boom in car sales. The dealers are having a banner year. Plus, says Moody’s, this also has people buying more expensive rides, so they can roll around and look like rockstar realtors.

So, record car sales. Record car debt. Oh, and record car loan delinquencies.

They jumped more than 13% last year, compared to a drop in missed payments on credit cards and lines of credit. “Credit losses have been low, but could rise quickly in an adverse scenario of unemployment increases or rapidly rising interest rates,” says the rating agency. “If the economy takes a turn for the worst, we could see these loans becoming problematic for the banks.”

Well, let’s turn to jobs for a minute. There must be a correlation between the labour market and an unprecedented demand for consumer credit. A constant run-up in debt would suggest most families are not bringing in enough income to sate their spending habits, which would support the Bank of Canada’s warning that household finances suck (a technical monetary term).

This is a thesis Randall Bartlett is proving. He’s a senior economist at TD Bank which has unveiled a new measure of the job market. Finally. The StatsCan monthly employment roller-coaster has turned into a bit of a joke among the biker-economists I hang with. The swings are so wild as to cast doubt on the validity of the data, with abysmal losses being replaced by flowery gains in a matter of weeks.

So the bank’s launched a Labour Market Indicator to try and get a truer picture on who’s working, and (as importantly) the nature of unemployment. If this is a better tool, we’re a little more screwed than we all thought. Says the bank:

  • “The Canadian labour market is currently experiencing more weakness than is implied by … the headline unemployment rate alone, and has been for nearly two years.”
  • About 20% of all the people out of work these days have been that way for at least six months – the long-term unemployed.
  • The bank says the numbers of people in this group jumped during the GFC, which is to be expected – but that levels have not come down since 2009.
  • Meanwhile the number of working-age Canadians (between 25 and 54) in the workforce is on the decline, down 2% in two years. This, says TD, “is a characteristic of a weak labour market.”
  • So while the official jobless rates is 6.8%, the bank says it’s actually about 7.2%. In the US, by the way, unemployment is now 5.9%.

And Bartlett confirms what this pathetic blog has started for a couple of years – incomes have flatlined. Wage growth of about 2% is running a little below the inflation mark, which means most families are spending more and actually making less. That’s supported by the Canadian Payroll Association, which claims over 50% of us could not last a week past one missed paycheque.

This is what you get when a country opts for a condo economy. Massive spending on housing and consumer goods, supported by an historic increase in debt because a weak jobs market and zero income growth mean Joe Frontporch is treading water. Our manufacturing base has shrunk and a quarter of the economy is now centred on real estate. Were it not for low rates that allow so many to meet their gargantuan monthlies, we’d be pooched. And none of this is coincidental.

Tell me how it works out well.

231 comments ↓

#1 pwt on 10.24.14 at 5:03 pm

frist psot!

#2 view on 10.24.14 at 5:07 pm

And they all buy F150 gas sucking trucks making payments 8 years…

#3 Ferrari321 on 10.24.14 at 5:09 pm

bad car loans are the first sign … same thing happened in the US in ’08

#4 Happy Renting on 10.24.14 at 5:18 pm

It’ll work out great for the select few who can scoop up distressed assets when it all falls to pieces. Everyone else, bring Kleenex.

#5 calgaryPhantom on 10.24.14 at 5:21 pm

Just as i was thinking of buying a challenger, you write this.

How do you do this?

#6 Kenchie on 10.24.14 at 5:30 pm

#95 Sheane Wallace on 10.22.14 at 7:27 am
“https://ca.finance.yahoo.com/news/bank-canada-report-expected-measure-cheap-oils-effect-083010813.html

no interest rates increase coming any time soon.

#85 Kenchie

Are you on government payroll? As there is no other way to be that stupid and survive in the real world out there.”
———
Not entirely sure what part of #85 you are quoting, as I said nothing about interest rates. But to answer your question, no I am not on a government payroll.

And I am doing very well for myself, thanks for the concern. Hence, I am not a pessimistic doomer loser, like yourself.

#7 Spectacle on 10.24.14 at 5:31 pm

“Tell me how it works out well.”

*********************
By the fact that there is no question mark at the end of your sentence, I doubt an answer is solicited or even possible.

Thanks Garth, for the stable focus on finances, despite the public turmoil of recent.

************************
And having said that, for another calm resource amid the storm, it can be comforting and very informative to read the social blog by Nikki , posted below.

http://nikiraapana.blogspot.ca

And to all, a good night…….

#8 Kenchie on 10.24.14 at 5:32 pm

#149 Mike T. on 10.22.14 at 4:37 pm
“I have parroted the comment made by Cato at 122

You were warned all summer about ‘radicalized youth’, now MK Ultra is here to take your rights away, and most Canadians willfully comply.

Also – too much Kenchie – wow

Is this still the greaterfool blog?”

Garth makes it too easy to post. Hate the game, not the player.

#9 Kenchie on 10.24.14 at 5:38 pm

#95 Sheane Wallace on 10.22.14 at 7:27 am
“https://ca.finance.yahoo.com/news/bank-canada-report-expected-measure-cheap-oils-effect-083010813.html

no interest rates increase coming any time soon.”

Since when did you start listening to the MSM?

PS: 5-year GoC bond yields are moving back up again…
http://www.investing.com/rates-bonds/canada-5-year-bond-yield

#10 exilled on 10.24.14 at 5:40 pm

Sir Garth: In my previous life i worked for a car dealer ( used ) In that time 9 out of ten used cars on any given lot were REPO’s. Some brand new, some six months to a year old. Whatever time it took to track down the delinquint buyer.

#11 Bob on 10.24.14 at 5:42 pm

It might not be a Kia but my Hyundai turns 10 this fall :)

#12 DM in C on 10.24.14 at 5:46 pm

At least gas has gone down at the pumps. $1.064 in Calgary today.

#13 Son of Ponzi on 10.24.14 at 5:50 pm

Der Spiegel – Capital gone off the rails.
Long article from one the world’s most trusted weekly.
Worth reading every paragraph.
http://www.spiegel.de/international/business/capitalism-in-crisis-amid-slow-growth-and-growing-inequality-a-998598.html

#14 Mister Obvious on 10.24.14 at 5:51 pm

I live near most of the super high end car dealers clustered on Burrard Street and over on Terminal Avenue in Vancouver. Showrooms are full. Business is red hot.

These $120K+ cars aren’t found only in the showrooms but everywhere on the streets. Life is good and the future looks quite bright in La La Land. Stop worrying.

#15 sotiri on 10.24.14 at 5:52 pm

“Ford picks Mexico over Windsor for engine plant, union says Federal, provincial governments reject Ford’s ‘unprecedented’ financial request”

http://www.cbc.ca/news/canada/windsor/ford-picks-mexico-over-windsor-for-engine-plant-union-says-1.2811843

#16 c-los on 10.24.14 at 5:53 pm

Garth, I think you need some links on the site for us newbies here that links to your “GreaterFool rules”. Not sure what you mean by “letting the dealer or the bank give them the car”…

Wouldn’t be just as prudent to some decent research and buy a gently used vehicle in cash rather than lease or take a car loan on a new car? Big fan of the lemonade car guides from Phil Edmonston and letting someone else take the hit on depreciation of a new car.

#17 Reddy on 10.24.14 at 5:55 pm

Bob I’ve got your Hyundai beat, my accord is celebrating it’s 25 birthday next year.

#18 Montellino on 10.24.14 at 5:59 pm

Garth you are asking the wrong question.. it simply doesnt end – at all.

We learn from those before us, including parents and governments, the key is to keep kicking the can down the road. Thats my biggest fear rigjt now.. reddit finance is filled with topics of forever lasting recessions, everywhere around us people are kicking the stupid can.. basement dwellers support the mortgage, govt debt ceiling thresholds get bumped up – key takeaway is make it someone elses problem

Mid year next year when this housing situation starys flaming out the Harperites can bring back 0 down 40 yr mortgages and we should be good for another 5 years of cruizin’

#19 My Name Is None Of Your Concern on 10.24.14 at 6:00 pm

“Tell me how it works out well.” — The economy grows softer, house prices tank, I pick over the carcasses and buy plenty of cheap real estate and used luxury goods. I then smugly move to some sunny place and enjoy my retirement on the backs of fools.

#20 Kenchie on 10.24.14 at 6:02 pm

#122 Cato the Elder on 10.22.14 at 12:19 pm
“Here you go Kenchie, SEC revolving door from a liberal perspective:

http://www.huffingtonpost.com/2013/02/11/sec-revolving-door-wall-street_n_2648355.html
—————–
They are talking about the effects of the actions of people moving from regulators to private sector. But it doesn’t discuss why they are moving (i.e. higher pay). So on one hand, you advocate for people having the freedom to act in their own self-interest, but on the other hand, you rail against it when it actually happens. Talk about hypocritical…

Also, I never said that there aren’t negative issues with regulation. There always are, particularly regulatory overkill, such as specification on the size of bumpers on imported cars, or daylight-running lights, and the size of baby seats, etc.

But you have advocated for abolishing (more or less) all regulations. That has WAYYYYYY more negative consequences for the world economy than making incremental improvements as the regulator overkill becomes burdensome. If there is no OSC or SEC policing financial reporting, chances are that fraudulent reports (Sino-Forest anyone?) increases as the consequences of bad behaviour weakens.

#21 james on 10.24.14 at 6:04 pm

I always find it interesting to see how people spend as much as they can on an automobile. Families with a quarter of my income have at least one car that is three times as expensive as mine. This is particularly telling for cultures in which ‘face’ is important, although many domestic whites pimp out massive trucks with custom components that lose their value quickly.

Cars don’t pay dividends. I’d much rather have a downpayment for a retirement home in costa rica than a fancy car.

#22 Kris on 10.24.14 at 6:05 pm

Ford just announced it will open a manufacturing plant in mexico instead of Windsor ontario.
So there goes another 1000 direct + another 10,000 indirect jobs.

The sad part as i see it is that since 25% of our economy is real estate based will our feeble leaders not keep it going at all cost as it is now TOO BIG TO FAIL?????
Good grief !!!

#23 Cato the Elder on 10.24.14 at 6:05 pm

40 years folks. That’s all it took for the bankers to have free reign over every asset Canadians had toiled and struggle to erect since our inception.

This is what happens when you decouple your money from the physical restraint of a limited asset, like gold and silver.

Garth may disagree, but I think the proof is quite apparent.

Rampant debt, dependent adults, no savings, destroyed pension plans, both parents forced to work, smaller families because parents can’t afford more kids, lesser quality wares (ever notice 2 by 4s aren’t 2 by 4 anymore?).

This is the predictable consequence of allowing a business that profits from interest on DEBT to overtake your system of government.

Congratulations to everyone that allowed it to happen.

Oh, by the way, they aren’t going to give it up willingly. It’s going to be a very VERY tumultuous time ahead, especially if we make an attempt to wrest control back from these entities. The proof? Look at the militarization of police. That’s not for your protection, that’s for THEIR protection.

WAKE UP.

#24 Kenchie on 10.24.14 at 6:13 pm

#101 Nattie on 10.22.14 at 10:16 am

Awesome post. That’s positivity at it’s best. Thanks for your wisdom.

#25 #32 TEMPORARY® Foreign Prime Minister on 10.24.14 at 6:14 pm

Great advice.

Unfortunately, I couldn’t find anyone to lease me a bicycle with aftermarket apes and shotguns.

Sometimes cash rules. For everything else, there’s MasterCard.

#26 Derek R on 10.24.14 at 6:15 pm

#16 c-los on 10.24.14 at 5:53 pm wrote
Garth, I think you need some links on the site for us newbies here…

Here’s a link to The GarthFAQ. Just for you…

#27 Porsche on 10.24.14 at 6:17 pm

Are they making these condo’s big enough for raised pick up trucks now days?

If you drive a car, your looked down at in Alberta

#28 Derek R on 10.24.14 at 6:21 pm

#22 Cato the Elder on 10.24.14 at 6:05 pm wrote:
40 years folks. That’s all it took for the bankers to have free reign over every asset Canadians had toiled and struggle to erect since our inception.

This is what happens when you decouple your money from the physical restraint of a limited asset, like gold and silver.

40 years? That’s grossly inefficient! It only took 10 from bust to boom and back again in the good old days of the Gold Standard. Bring back the ’90s – the 1890s! You need a Gold Standard before you can have proper Robber Barons!

#29 Kenchie on 10.24.14 at 6:21 pm

#119 DM in C on 10.22.14 at 11:52 am
“Wow Kenchie is almost to DA level of posting levels. That’s some serious lack of life.”

What’s the “DA level”?

#30 Zed on 10.24.14 at 6:23 pm

Being invested in dividend paying companies, managed by peoples educated in big universities (probably with student debt) and who worry all the time about their own job, provides me with a good night sleep.

I diversified myself: one job for me and twenty CEOs working to bring me money every 3 months in the form of dividends.

I was always responsable to save part of my paycheques and invest it so I would not have to look over my shoulder for somebody coming after me for the money back from a loan.

Everybody has to take responsability of his/her actions.

Spend less than you earn, then invest and then collect not spend, earn and then save.

It is too bad that so many individuals only look at the now moment and not at the long term effect of their actions or inactions.

#31 My Head hurts on 10.24.14 at 6:28 pm

I think it’s actually even worse than that if you take into consideration all of the “self employed” who are scraping for contract work. Then there are the underemployed either not getting enough hours or paid wages that are to low to come close to covering living expenses.

Still a house up the street sold in less than two weeks with an asking price of 569,900 another a few blocks away took a long time but did sell. Probably built late ’50s early ’60s, agent bragged it was the original owners…..so was everything about the house, oringinal that is nothing updated, asking price 699,000 and needed to be gutted. Just down the street from the first house one sold about five months ago and they got to ripping things apart right away and just finally stopped last week. Then a new for sale sign went up, flipper I guess.

Meanwhile in the last month or so I’ve heard two get rich buying real estate commercials on the radio, one of them touting doing it with other peoples money the other saying hey you’ve been watching me do it on HGTV for years now give me some money and I’ll show you how. I don’t think he mentioned the tv show probably paid more than the basement renovations.

It all reminded me of that skinny little midwestern guy that was on tv years ago asking If you’re excited? He said he was excited and he had the same get rich quick scheme. I think I read that he was arrested and bankrupt at some point later. Ed something I think it was. Or the Asian guy with the rented boat and rented bikini clad women.

Nothing makes any sense!

#32 Steve French on 10.24.14 at 6:29 pm

Anyone at Seneca tonight?

Smokey’s in a world of pain.

He might be thinking of going off the rails. A full Rob Ford.

But that way lies madness.

Nature’s first green is gold
Her hardest hue to hold.
Her early leaf’s a flower;
But only so an hour.
Then leaf subsides to leaf.
So Eden sank to grief,
So dawn goes down to day.
Nothing gold can stay.

#33 My Head hurts on 10.24.14 at 6:31 pm

Hey Cato was that Tragically Hip song about you? You know the one, he’s 38 years old never kissed a girl.

#34 souvereigninternational on 10.24.14 at 6:33 pm

people think leasing is throwing money away (just like renting). They will only consider it if they can write it off their business. Yet while not for all situations, for most typical drivers makes much more sense. Google advantages of car leasing yourself if you’re not convinced.

Now, Garth let’s not compare US vs. Canada unemloyment without considering all the shadow statistics plain official gov. #s is akin to trusting CREA #s. If you don’t do one should not do the other as well.

Re.: #68 Cato the Elder on 10.23.14 at 11:19 pm

Great Posts yesterday Cato the Elder.
“I can’t stand that Canadian way of thinking that ‘oh well gee golly that’s the way it is!’”. I hear you man.

#35 Mark on 10.24.14 at 6:58 pm

“Mid year next year when this housing situation starys flaming out the Harperites can bring back 0 down 40 yr mortgages and we should be good for another 5 years of cruizin’”

You really think there will be any political appetite to expand the CMHC’s liability when the CMHC is incurring huge losses due to the housing downturn? LOL!

#36 Mr. White on 10.24.14 at 7:06 pm

Garth, the claim that the U.S. unemployment rate is significantly different than ours is unsupportable. One need only look at the differential in employment participation rate to see much of the difference. People who have quit trying to find jobs and live no on poggie may lower the unemployment rate, but they do not alter the number of people who are making a living by means of income from non-employment sources.

#37 JO on 10.24.14 at 7:06 pm

Hey Garth, I hear what you are saying about cars. I see it all the time. People spend way to much.
Paying cash for a 2-3 yr old car in good condition and driving it into the ground is the best. Issue is most don’t have the cash up front. So they finance or lease.
Leasing still makes you pay for the depreciation despite the lower loan payment. So you pay for it in lost cash flow you could have put in into a tfsa or rsp if your retirement income is projected to be low.And of course you have nothing to show for your payments at gbd end of lease.
Using a long loan is a poor choice. You still miss the cash flow you should have put into a tfsa or rsp. And if you are dumb enough to sell before the loan is up well you are going to have to pay for the difference.
Bottom line in my view is it is best to spend the least possible and pay cash or use a LOC and pay it off within 2-3 yrs

Needs vs wants
JO

#38 joe schmoe on 10.24.14 at 7:07 pm

My truck’n’nutz get no respect on this forum.

In a past life I had about 12 direct employees, 150 total under my reign of terror.

We had a company defined contribution with match…up to 6% of salary. I would say 20 people used the full 6%. 40 used some of the match. Leaving 90 or so who wouldn’t take any of the free moola. Our HR person said those ratios were common in Canada…expect a 25% of max hit on pension costs.

But they pretty much all had nicer cars than me.

My nuts are shinier though. Gilded.

#39 Habs76-79 on 10.24.14 at 7:08 pm

All I can say to start here is OMG!

This is what you get in a consumer society when people by a monthly payment and not a product with the understanding of totals cost of ownership and the bringing forward monies that you have yet to earn.

When I was younger, I too for a while bought a couple of new cars all based on the monthly payment. Back then the max. loan you could get was 60 months and even then I hated it.

Today with longer terms people as noted in Garth’s post buy a more pricy vehicle and only see the circled on the bottom sales sheet MONTHLY PAYMENT! and IMO THEY ARE ALL STUPID BEYOND ANY SANE REASONS!

We are as a society gonna take it across our proverbial chins. The pain is coming and it need not have to be. But then again the last generation that truly knew suffering in this land, lived through the 1930’s depression and WWII. They are mostly dead now. I guess the only way most of a society’s masses learn is the hard way by having the proverbial crap kicked out of them.

TOUGH WAY TO LEARN!

#40 Van Isle Renter on 10.24.14 at 7:12 pm

14 Mister Obvious on 10.24.14 at 5:51 pm
I live near most of the super high end car dealers clustered on Burrard Street and over on Terminal Avenue in Vancouver. Showrooms are full. Business is red hot.

These $120K+ cars aren’t found only in the showrooms but everywhere on the streets. Life is good and the future looks quite bright in La La Land. Stop worrying.
+++++++++++++++++++++++++++++++++++

A ten square block defines your known universe. Interesting concept.

No wonder Canada is pooched; if you can’t see it out your front window, it doesn’t exist.

Whatcha’ have here is called sampling bias.

#41 Dominoes Lining Up on 10.24.14 at 7:18 pm

And apparently interest-fuelled car sales don’t require much advertising, in print anyways.

Ouchh!! This is a crushing report on the collapse at PostMedia. Ad revenues down 21%!!!
http://www.talkingnewmedia.com/2014/10/24/postmedia-network-reports-lower-revenue-net-loss-in-q4-report/

Here’s hoping that PM bought out the garage-sale Sun chain this month on a 96 month payment plan, no interest.

Seriously, though, Garth, with all this – do you think the National Post will survive another year? Two?

#42 Villagemoron on 10.24.14 at 7:19 pm

Just picked a shiny, well loved and cared for 15 year old luxury car with low miles for $ 1, 500 cash.

Again, one for the money & two for the show – it really sucks to be car dealers and their vulture lender friends in my world.

#43 Smocking Man on 10.24.14 at 7:22 pm

Ground Hog Day…

Dogs thanks for the kind words on my blog.

Last Friday when I asked God to give me a challenge, well I dident expect what followed.

He took my nephew on Saturday, not giving him back to us till Wendsday of next week. Talk about tourchering his parents. They jumped on a plane today to go see him.

God the prick throws another curve ball, been doing the nursing home sleep over for the last four days. He wants my mom too. She lost conciounes this morning. We’ve said our good byes, I brought her favorite grandson from Halifax to say bye to her too. She lit up, I’m not hang here any more. What’s the point, we can’t talk, she straped in ready for the trip, not talking anymore..

Last night I was between dream state and awake. I spoke to mark, my beloved nephew. He was busting my balls. Uncle Smokey you and I are the same, we both live life for enjoyment, we take risks, we’re careful but love a thrill. I had bad luck on Saturday , and you might too one day, until then have as much fun as you can, we only get one shot here. Don’t let fear stop you.

Every picture he’s ever been in, he’s smiling, me too.

I’ve got a driver and a limo at Seneca Tonight waiting, just incase I need to leave at moments notice. But I took marks advice. Thank you mark.

If mom makes it to midnight, happy 56 anniversary.

But know this God, is that all got…

#44 PVS Inquire on 10.24.14 at 7:23 pm

Car buying tip… it’s OK to lease a new car that has excellent residual and reliability over the long term. As long as you keep the car (be it a Toyota/Lexus or Honda/Acura) for 2-5 years post lease, you can still get a good dollar for the vehicle and then rent again.

This strategy provides peace of mind while keeping you from the extremes of the car buying spectrum- those who always need the most updated (and costly) car in the driveway and those who think keeping a minivan for 10 plus years is wise (again costly and far from the 10 grand value you mention Garth).

#45 Kenchie on 10.24.14 at 7:24 pm

#93 Cato the Elder on 10.22.14 at 11:17 pm
“Re: #81 Casual Observer

Yet another casualty of our public indoctrination (schools) system.

Switzerland’s neutrality allowed them to save more European Jewish refugees than almost all other countries in the world COMBINED. Re-read your history, and get the truth from unbiased sources.”
—————–
Jewish populace in German held Poland during WWII emigration routes:
~300,000 to USSR
~30,000 to Switzerland (~20,000 turned away)
~30,000 to Spain
~16,000 to Turkey (on route to Palestine)
http://www.ushmm.org/wlc/en/article.php?ModuleId=10005470

#46 Smoking Man on 10.24.14 at 7:24 pm

Got a new phone, don’t know why it’s putting in smocking, I’ve corrected it.

#47 OttawaMike on 10.24.14 at 7:25 pm

Ben Rabidog issuing a public apology and retraction to Fortress Realty on Twitter today.

Greater Fool published similar blog posts doubting the accuracy of their claimed return on investment.

Are they also threatening to sue you back to the bronze age or do you just have better legal advisors than Ben?

#48 Kenchie on 10.24.14 at 7:27 pm

#93 Cato the Elder on 10.22.14 at 11:17 pm
“Re: #81 Casual Observer

“So maybe the west should have minded their own business after the conclusion of World War 1. Maybe, like many other European wars, they should have been more civil at it’s conclusion.”

Soooooo easy to say from the vantage point of an anonymous keyboard 95 years after the fact.

#49 r on 10.24.14 at 7:28 pm

Any idea where to find this repossessed cars

#50 deaner on 10.24.14 at 7:28 pm

Average marriage length in Canada is about 14 years. Most data is on the US, which is 8 or 9. So there.

http://www.economist.com/blogs/graphicdetail/2014/02/daily-chart-10

Maybe marriages last longer here because Canadian men have better houses?

#51 Kenchie on 10.24.14 at 7:29 pm

#93 Cato the Elder on 10.22.14 at 11:17 pm
“Re: #81 Casual Observer

ALL WARS ARE BANKER WARS. They don’t care who wins. All they care about is that as many people as possible GO INTO DEBT.”

And you probably believe the Rothschilds financed the French Revolution.

#52 b on 10.24.14 at 7:29 pm

Garth,

What will this holiday season’s consumer sales look like in your opinion? I imagine if people have saturated credit the season could be weak. Would like to hear your thoughts.

#53 Kenchie on 10.24.14 at 7:35 pm

#98 Sheane Wallace on 10.22.14 at 11:30 pm
“Let’s be clear here: Who created radical Islam? Reagan and Zbigniew Brzezinski so they can counter the soviets in Afghanistan and Saudi Arabia.

Winning over Soviets was sweet.
Now we all pay for it.”

No, those true believers in Wahhabism in Saudi Arabia spawned them (and continue to do so). The US just used them for their own purposes. And it’s backlash isn’t a recent phenomenon.

Going back farther, blame the Brits for giving power to the House of Saud after WWI in Arabia.

#54 takla on 10.24.14 at 7:40 pm

30 billion dollars…that’s what the 5 big Canadian banks made in fiscal 2013 and are on track for bigger profits this year,Meanwhile back on mainstreet Joe frontporch has saddled himself with max debt he’s barely able to service,with a riseing unemployement outlook and our greater economy continues to tread water on the verg of another large housing correction

We need a modern day Robin Hood to steal from these rich #%$&ing bankers/elite and give to the stuggleing tapped-out middle class….history is riff with examples of paupers riseing up when the so called privaledged few preditate on their middle class….could that be in our future???

#55 the Jaguar on 10.24.14 at 7:42 pm

There are vehicles and then there are ‘rigs’. What does this mean? It means trucks. Big ones. Loaded up with all kinds of goodies. Crew cabs that carry workies to oil and gas sites. These cost lots of money. Think 80-90 thousand. Think Fort Mac. The kind of money that houses used to cost in days gone by.
Where is High Plain Drifter and some the O&G guys on this site? They know what I am talking about.

#56 Kenchie on 10.24.14 at 7:45 pm

#100 Cato the Elder on 10.22.14 at 11:31 pm
“Re: #81 Casual Observer

Here’s another one that ought to blow your mind, if you’re intellectually honest or a critical thinker of any kind:

If we went to war against the Nazis because they were ‘killing millions of innocents’, how come we were allied with the Soviet Union?

Think about that for a second.”

The information coming out of the USSR was almost non-existent pre-WWII, so there was not much information at hand to say that they were doing evil things to their population in the Siberian gulags. On the other hand, Germany is smack right in the middle of the European continent. Information was much easier (still hard though) to get compared to USSR.

Furthermore, the United Kingdom (and her empire) and France had given Poland a guarantee of independence against Germany. And the Molotov-Ribbentrop Pact publicly was about Japan aggression in the East. The European portion wasn’t made public until 1989. http://www.chathamhouse.org/sites/files/chathamhouse/public/International%20Affairs/2011/87_3wedgwoodbenn.pdf

“Could it have anything to do with the fact that Nazi Germany wasn’t playing ball with western bankers? That maybe western bankers were upset that their MASSIVE incomes from reparations weren’t coming in anymore?”

By that thought process, don’t you think USSR would play even less ball with Western bankers? Also, you probably know that the paper they paid back the reparations with became worthless a long time before 1939…

#57 Kenchie on 10.24.14 at 7:47 pm

#29 Kenchie on 10.24.14 at 7:45 pm

“The truth is it had nothing to do with morality. If it did, why side with the Soviet Union, which were MUCH BIGGER monsters, against Germany?”

Technically, the West and USSR didn’t have an alliance (due to mutual interests) until Germany invaded the USSR in 1941.

#58 Kenchie on 10.24.14 at 7:51 pm

Sorry to those blog dogs that don’t appreciate my comments. Have a good night.

#59 Strider on 10.24.14 at 7:52 pm

“So while the official jobless rates is 6.8%, the bank says it’s actually about 7.2%.”

…and if you add in unemployment among First Nations on reserve, the official unemployment rate would be far higher.

#60 Shouldn't people be buying used cars? on 10.24.14 at 7:54 pm

Let someone else take the depreciation and buy a vehicle that’s used.

Most millionaires drive cars that a 10 years old.

Don’t waste your money on a new car to impress someone, because nobody gives a damn…better to invest that money.

#61 Chaddywack on 10.24.14 at 8:01 pm

Lots of really expensive cars in my Vancouver neighbourhood. I always thought they were owned by rich foreign investors who pay cash :)

#62 W on 10.24.14 at 8:04 pm

Doesn’t the U.S. measure the unemployment rate differently than us? It’s not an apples to apples comparison, is it?

#63 Prairieboy43 on 10.24.14 at 8:09 pm

@#22 Cato, I agree with you. Wake Up! Edmonton wants another 400 police.
They are going to have to fight off the 20-30 yr old millenials working in mining operations. Who drive F350 8″ lifted Mexican made trucks. $80,000.0 trucks, that you cannot even drive their HD Fatboy into the box. Insurance must be crazy for these guys.

#64 Gg on 10.24.14 at 8:10 pm

So while the official jobless rates is 6.8%, the bank says it’s actually about 7.2%. In the US, by the way, unemployment is now 5.9%….

So then what is actual US UI rate? 6.3%? I see weekly take home is US was a $1 less than 2007 and participation rate still falling.

#65 dave c on 10.24.14 at 8:12 pm

If you can borrow all the money you want for almost free, there is no problem.

It’s smarter to buy the big purchases now at almost 0% than wait a 5 to 7 years when rates may be higher.

Is it jealousy because older folks couldn’t afford such nice cars 20 years ago???

Accumulate your wealth now when it doesn’t cost anything to do so other than the item cost itself.

It’s all the others that had to pay interest on their loans that were wasting money on interest.

#66 Linda on 10.24.14 at 8:18 pm

#53 Takla – buy bank stocks. Those big profits go to shareholders (at least in part). If you can’t beat them, join them & get your share of the bloated corporate profits you denounce. BTW, remember that the rich corporations are sources of jobs/income for many. No money, no life (Oriental proverb). All those who want to ‘share the wealth’ need to understand that there is no law saying the wealthy ‘have’ to share with those less wealthy. Though many seem to think that is a moral law/high ground. One thing about free market capitalism, you too can get rich. Or lose your shirt, which many rich people have done. Or as one sage put it – ‘the difference between you & me, son, is that I know I can earn a million dollars because I’ve done it before’. The sage in question had ‘lost’ everything, but knew he could ‘win’ it back again – the younger person he was advising had not yet ‘earned’ enough to ‘know’ he could do it in the first place.

#67 OffshoreObserver on 10.24.14 at 8:32 pm

Great article in “The Economist” on deflation: http://www.economist.com/news/briefing/21627625-politicians-and-central-bankers-are-not-providing-world-inflation-it-needs-some

#68 Cici on 10.24.14 at 8:37 pm

#12 DM in C

Bastards!! We’re paying $1.24. I haven’t seen that level since 2010 ;-)

#69 Retired Boomer - WI on 10.24.14 at 8:44 pm

CAR DEBT? Boy, bad enough when you finance your house for anything more than 15 years. IMO you can write the 25 yr mortgage but get the 15 year amortization table and make those higher payments. Can’t do that -you can NOT afford the dump.

The car. Why finance a depreciating asset? If you feel you MUST finance a shit-box, look for a car you CAN pay for, insure, and maintain based on a 36 month contract. No need to go further, upside down in a contract when you get in a wreck.

This old boy likes to find those low mile luxury boats like the 1993 Caddy this year with 57,000 miles on it. No salt damage either. Cheap to insure, gets 24 mpg on the road, and everything works! Price? Less than a pack-a-day habit for a year!

Why do people enslave themselves needlessly with DEBT?

#70 east van on 10.24.14 at 8:50 pm

I thought chairman Harper gutted environmental law and muzzled scientists and charities to make Canada an “energy super power”. Alberta is broke, Canada’s economy stinks, and we are destroying our environment and losing the respect of the rest of the world. The party of sound fiscal and monetary management better have a plan b.

#71 X on 10.24.14 at 8:51 pm

After the great recession, I get that there was some pent up demand for autos, as nobody was buying cars for about 2 years. What is most concerning now, and directly related to low rates, and long financing periods, is that everyone is replacing their Kia that got them through the great recession, with Acura’s and BMW’s.

#72 prairie person on 10.24.14 at 8:52 pm

At one time I worked for a credit rating company. Got to see the truth behind the gloss. People with lots of glitter and businesses on the verge of bankruptcy. Business people committing suicide because the suppliers wouldn’t give them any more credit. All their money and years of work down the drain. Big problem, people starting a business opt for image over fiscal prudence. The m ost expensive furniture, high rent, spiffy vehicle. They think the image will impress potential customers and, sometimes, it does. The kind of customers who don’t ask what are the books like? Who equate glitter with success. He must be successful, look at that car, look at that house, look at those clothes, that office–all done on credit. The repo guys come and clean them out. People with big mortgages often have big car payments, big credit card bills, big entertainment bills, big business expenses. First flash, then crash.

#73 peter on 10.24.14 at 9:00 pm

Never bought a new car.
Currently driving a 97 Ford 4 cylinder 5 speed bought for$2000 6 months ago.
Forgot how much fun a little 4 banger with a standard transmission is.And it was paid for when I drove it away.

#74 Habs76-79 on 10.24.14 at 9:00 pm

#65 Dave c

Is it jealousy because older folks couldn’t afford such nice cars 20 years ago???

——————————-

Um no, jealousy has nothing to do with it as “nice cars” is a relative term. Today I’d happily drive a 1994 BMW 3 series over a 2015 Nissan Versa.

There were in all relativity as nice cars in all price points 20-30-40-50+ years ago as there are today.

One has to compare relative value of product to money borrowed or spent to what was realistically available.

For say argument sake, many folks longer in tooth and maybe with more wisdom now, that 1971 Mercury Cougar at oh say $5,000.00 was as awesome and beautiful of a car as say a $60,000+ 2015 Cadillac CTS is today. IT’S ALL RELATIVE!

My first new car for me was a nice for its day Dodge Shelby Charger. It was my first new car and I loved it. I as I said earlier here though bought it mostly on the cost of the monthly payment and not the real price of ownership which is IMO stupid but the car was great to me as a youngster.

So no buddy, jealousy has nothing to do with it. My dad also had some very nice cars back in the day when I and my sibs were just wee tots. Most of his cars were nice used ones but he too bought a few new cars and because credit was not so easy and cheap and back then a 48 month loan term was long, he bought the nicest new car that made sense. But like me he too has learned that new cars are LOUSY BUYS.

If you are a person who likes NEW CARS the best way to go is to lease one.

For me I’ll stick with good used cars and pocket my cash a saved.

#75 Godth on 10.24.14 at 9:04 pm

I think there’s some interesting psychology at play here.

We’re living in a time when economics is counted in trillions and now a quadrillion dollars. What the hell does that even mean? It has no relevance from any earthbound perspective. We’re never going to settle those abstractions in any real way.

A parallel can be seen in theoretical physics.
Is Nature Unnatural?
http://www.quantamagazine.org/20130524-is-nature-unnatural/

What the hell does any of that mean? Who the frac knows, it’s meaningless in any real way. A not so fun-house of distorted abstractions, like economics. Elegant mathematics perhaps, but does it actually mean anything?

Cars have a real meaning to people, so do houses. Who cares about the numbers as they don’t mean anything anyway. Can I afford the payment? Can I discuss these things (cars, houses) with friends and family? We said to hell with tomorrow a long time ago anyway. Besides, if people didn’t expand debt with conspicuous consumption the whole system would fall apart. That’s the way the system is designed these days.

Is this rational? What’s rational about applying a quadrillion of anything to this world? There goes a fallacious assumption that economics holds as truth – people are rational, sure. No wonder they don’t make any sense. Infinite growth on a finite planet – tell me another one.

#76 young & foolish on 10.24.14 at 9:08 pm

Don’t worry, stocks are up … thanks to buy-backs and financial engineering. Nowhere to hide (at least not for long).

As for RE, well, almost half the population lives in a handful of cities. And the world continues to urbanize (for now).

#77 Strathcona on 10.24.14 at 9:09 pm

It’s a special type of person that buys a new car. That’s what the car salesman will tell you. Just like a barber will always tell you you need a haircut.

I’ve always bought used cars and trucks, private sale, cash, already depreciated, a few years old, with the money already out of them.

And, guess what, I was always able to find $100 somewhere for a mechanic to put it on a hoist, and tell me if it was a good buy or a lemon, pre-purchase.

I’d take several months to renove them, new brakes here, new shocks there. All the work done myself, supervised by one of my buddy mechanics. I’m 34, and have owned 7 vehicles. Only one was a lemon, and it was bought from my dad for very little.

I’ve never made a payment on a vehicle. North America is awash in used late model vehicles. Millions of them.

If I lived in somewhere like Egypt, or Russia, a new vehicle would make more sense, as there would be far fewer good used one.

Man up a little.

#78 young & foolish on 10.24.14 at 9:13 pm

I’m beginning to like Cato the Elder ….

#79 Montellino on 10.24.14 at 9:18 pm

@Mark #35

which losses? you are assuming they will let it get to the end game scenario before trying to screw us over a few more times. Real estate is the bulk of the economy, and now that oil is at break even it will get even tougher not to depend on the RE.. whatever it takes – kick the can down the road

#80 young & foolish on 10.24.14 at 9:26 pm

Freedom today seems to mean giving Joe Frontporch a loaded gun so he can shoot himself in the foot.

#81 For those about to flop... on 10.24.14 at 9:34 pm

Hi Garth,got my TSFA maxed out ,but I am getting next to no interest.In your posts you always talk getting a good return ,what am I doing wrong?

Collecting interest. — Garth

#82 view on 10.24.14 at 10:04 pm

Smocking Man? So fancy… https://en.wikipedia.org/wiki/Smocking

#83 West Coast on 10.24.14 at 10:19 pm

#77 Strathcona …..gotta agree with you….the last time I made payments on a car (used) I had just finished university (waaaaay back when) and was required to have a car for my first job. No money – hence payments.
My current used car is a 2009 Hyundai which I am very happy with. It is an ICBC write-off with very low Ks which checked out just fine and is serving me well.

Hmmmm ..upon rereading the above…I couldn’t help remembering the country where I was born…and thought you might all enjoy this joke:

“Donald McPherson, who always looked after his money very, very carefully, was looking for a gift for a friend. Everything was too expensive except for a broken vase, which he could buy for almost nothing. He asked the store to send it, hoping his friend would think it had been broken in transit. In due course, he received a letter of thanks from his friend. “Thanks for the vase.” it read. “It was thoughtful of you to wrap each piece separately.”

http://www.rampantscotland.com/humour/blhumbawbees.htm

#84 Retired Boomer - WI on 10.24.14 at 10:26 pm

Joe Front Porch is having a tough time. Go easy on the guy. Employment security is definitely lacking in Canada, and the US. If he is employed he hasn’t seen much of a raise beyond inflation in years! If unemployed, maybe he will stay that way awhile before he finds something.

Whether he bought his house, or rents he has the monthly dues associated there. He probably has debt on at least one of his two vehicles, as well as some installment debt.
The guy is short on funds for retirement, too.

This seems a “western disease” this “affluenza.” Not really HIS fault, but it is indeed, HIS problem. The cure, not as easily dissected here on a blog. I can assure you, doing the same things he has done will not cure what ails his finances. Does it end well? Unknown, these are rather uncharted times.

Growth going forward they say comes from the emerging under developed countries. Where does that leave the aging US and Canada will hordes of Boomers on the cusp of retirement? Neither countries young are universally “thriving” are they? Can they compete with the new rising manufacturing centers? How about the technology areas?
Ides here, they get implemented in products elsewhere.

Cato The Elder – where are your thoughts on the big picture?

Ford to make engines in Mexico? Any reason why they are not expanding in Canada? Why not Brazil, or Germany, or Estonia? Heaven forbid Cleveland either. Wonder what extortion Ford wants from the “lucky” country. Similar to pro sports teams when they deem a new facility is needed.
They want Booty, or we’ll relocate!! Not hard to figure this one.

#85 Ray Skunk on 10.24.14 at 10:37 pm

#49

Any idea where to find this repossessed cars

Why would you care to know? Do you want to buy one? How much maintenance do you think a cash-strapped delinquent performed on the vehicle if they can’t even make the payment? Not to mention if they knew the repo man was coming they probably beat the shit out of it in the final few weeks.

As for me, happily caring for and driving my 28 year old car. I don’t drive it every day, but it’s no garage queen either.

My neighbour gives me funny looks when he sees me washing and waxing it at least once a week, regardless of how much use it has seen. He seems perplexed when the hood is up as I keep my fluids measured and topped-up.

His rotting, dented 5-year-old vehicle has never seen a soapy sponge, and the only time the hood has been up is when the battery died last week. He tried charging it for three days in a row before finally cluing into the obvious and reluctantly buying a new one.

I remember when I was a kid people would save hard for their new car, which would be expected to last them a good few years. They’d take good care of them, show a little pride. Times have changed. Now it’s use-up-and-replace every few years while making payments in perpetuity. A shame.

#86 AACI Home-Dog on 10.24.14 at 10:43 pm

Still ride a 2000 Chrysler 300M…sweet ride still, 190 km., 30k new…good in winter…blah blah blah…fuel prices down 12.5% already in Washington state, I see…
tgif all.

#87 RealistvsExtremist on 10.24.14 at 10:49 pm

#51 Kenchie on 10.24.14 at 7:29 pm
#93 Cato the Elder on 10.22.14 at 11:17 pm
“Re: #81 Casual Observer

ALL WARS ARE BANKER WARS. They don’t care who wins. All they care about is that as many people as possible GO INTO DEBT.”

And you probably believe the Rothschilds financed the French Revolution.

++++++++++++++++++++++++++

Why don’t you tell us who financed it? As well as Wellington’s army? If it was not the Rothschilds (on both sides).

#88 Cato the Elder on 10.24.14 at 11:05 pm

Re: Kenchie

Look, I’m not going to argue with you about every single thing you bring up, because you seem intent to pick fights.

All I’m going to say is the truth: capital seeks a stable environment.

Have a policy of neutrality in Switzerland ensures that capital FLOWS there, instead of RUNNING from it. Many western countries from the US to France have a huge capital outflow problem. Government is chasing it to where it is wanted. Switzerland can’t be held responsible for making wise decisions while the rest of the world is being stupid. They shouldn’t feel pressured by politically correct idiocy to comply with everyone else.

In WW2, there was no moral justification for Switzerland picking a side and subsequently having their citizens blown up to hell. They did the best they could to help the most people they could. Of course they did business with both sides, that’s what being neutral means. The ‘allies’ committed many atrocities as well (remember Hiroshima?) so I think their policy was practical and proved very prescient. We could learn a lot from them. We really ought to be taking a more neutral stance in the Russia affair, rather than being the willing lackeys of the US as we were in Afghanistan.

Neutrality benefits the citizens in those respective regimes that practice it. Our media demonizes them, calling them ‘tax-havens’.

What makes our media or government feel they are entitled to someone else’s hard earned money in the first place? This is what happens when a government gets out of control with spending – they want to blame anyone else for their recklessness.

If someone earns money legitimately (not through fraud, or government graft) they shouldn’t have to share it. That money was earned by PROVIDING VALUE TO THEIR FELLOW MAN. They DESERVE that money because they brought happiness to people through their goods and services. That money isn’t going to be wasted – they’re going to invest and spend it, creating more jobs. If they earned that money in the first place, they must have some traits demonstrating their superiority in capital allocation vs the average person.

We ought to establish a society that rewards that as much as possible. However, I would say the majority in Canada feel intent on attacking wealth. If they understood the role that others’ wealth had in bettering their own lives, rather than giving into pity jealousy, they would embrace it. They would be better served using other people’s wealth as a noble goal to achieve, rather than a seering pang.

We need lower or NO taxes on everything for EVERYONE including the rich. Let capital flow here. We will have a middle class again if we provide the right environment. There is nothing divine about nations, only the laws that govern them. When they become anathema to capital, wealth is destroyed. When they embrace it, wealth grows.

#89 Red Deer Rob on 10.24.14 at 11:13 pm

@ 55 the Jaguar

Yup, plenty of my coworkers making payments on trucks but hardly have a penny to spare. I’m sure these guys question me for driving a 4 cylinder car and for renting an apartment. It hurts the ego but FTW, I value my financial freedom and mobility more so then their approval.

#90 idiotcalling on 10.24.14 at 11:18 pm

If you pay more than a few thousand dollars ($2k) MAX for a car you are getting screwed. Up until recently, I had never owned a car that cost more than $500.

Craigslist is your friend people. As long as the engine sounds ok and the transmission shifts and doesnt leak you are good to go. There’s nothing that a few hundred dollars won’t fix on most cars.

#91 Raging Ranter on 10.24.14 at 11:26 pm

Given the vastly different methodologies used to calculate unemployment rates in Canada & US, you can’t directly compare the numbers. One must either take 1% (at least) off the Canadian rate, or add that much to the American rate. A 5.9% US unemployment rate equates at least 6.9% in Canada, and likely more. A 6.8% rate here is equivalent to 5.8% or less in the US. It is entirely inaccurate to compare the numbers head-to-head.

#92 Raging Ranter on 10.24.14 at 11:39 pm

@ Kenchie, thanks for correcting at least one of Cato’s more egregious errors (he’s made several). His bilious ramblings, written in his distinctly know-it-all style, were getting tiresome. The supercilious tone with which he delivers his alleged wisdom would be tolerable were it backed up by actual content in his posts. But it isn’t.

#93 Cato the Elder on 10.24.14 at 11:44 pm

Re: #83 Retired Boomer

Ford is making rational business decisions. They will build wherever it is most profitable for them to build.

Businesses aren’t charities. Anytime they do engage in charitable activities, it is always with a cost/benefit in mind (ie if we donate x amount to charity, how much will that generate in future sales from the advertising?)

Manufacturers are being run out of Canada through massive regulations and taxes and an unstable dollar. The only ones that are able to survive are large firms like Ford that benefit from government privilege bestowed upon them by lobbying.

Now, Ford can’t be blamed for lobbying. But our government can. Government shouldn’t be picking winners and losers. There should be a level playing field allowing everyone to compete equally and without so many restrictions on what they can do.

Now, on the dollar side. Having a weak dollar is bad for manufacturers. It’s bad because it increases the cost of raw materials. Our politicians get confused because they think a weak dollar makes our exports cheaper – but that only works for current inventory. The moment the manufacturer goes to buy raw materials to make the next batch, their prices have to go up. This unstable environment makes long term planning like plant and machinery upgrades difficult to calculate in terms of ROI, so they generally avoid it. THAT’S why middle class jobs are disappearing – businesses can’t make long term decisions in terms of investments, and that includes investing in quality workers.

Taxes are a whole other ball game. Again, large companies like Ford generally receive preferential treatment, with a lot of write offs for hiring workers. But that still bears large costs for the industry in terms of lawyers, accountants, etc. that have to ensure compliance with such a complicated tax code. These are unproductive jobs that don’t lead to an increase in the standard of living of Canadians – regulatory compliance has a huge parasitic effect on wealth because it’s wasteful.

See below for my idea of the bigger picture.

**********

Re: #83 Retired Boomer

I don’t want to be alarmist, but given recent trends (over 20 years) I would say the big picture in my mind is this:

More laws. More regulations. More taxes. More restrictions on civil liberties. More militant foreign policy (this one is common in collapsing economies as politicians attempt to cover up their mistakes by blaming a foreign enemy).

This will continue to happen unabated for the simple fact that we have an infinite feedback loop in government.

Corporations, which donate the majority of funding to politicians, will continue out of RATIONAL self interest to lobby for more special privileges. These privileges include corporate welfare, tax loopholes, and burdensome regulation that restrict competition.

Nothing can stop this trend. Our politicians are not principled enough nor smart enough to realize that these policies are harmful. Nor is the population, who cry out for many of these same policies.

The impact these policies have increases every year, creating an exponential effect of wealth destruction. This happens because old laws aren’t repealed – they just keep getting added to. Small and medium sized business, as well as the middle class, are being squeezed to the periphery as big business continues to expand.

Not only is this having an economic effect, it is also starting to carry over into the social realm as well. Freedom of speech and the right to assemble are under attack. They’re under attack because big business doesn’t want any possibility that someone could undermine their business. They want laws passed that restrict upstart competitors. An upstart competitor might speak to customers and point out why they are better than the big business alternative – that’s why it’s dangerous to them.

The only two things that can stop this are:
1. A massive, co-ordinated popular uprising demanding real free-markets and not cronyism
2. A complete financial collapse as the productive aspect of the economy can no longer support the parasitic elements

Because number 1 is impossible due to decades of big government indoctrination in our schooling, number 2 becomes the only way this can end.

Unfortunately, I don’t have a lot of faith that number 2 will result in anything good. I’m skeptical people will suddenly be shocked into learning the truth of what has happened – I think there’s just going to be pandemonium as old age pensions no longer buy anything at the grocery store etc. because of massive price increases.

I suspect the very culprits that led to this mess are going to be active in proposing the solutions, and Canadians are just gullible enough to believe them. Those solutions will be bigger government and less freedom, as usual.

So, my suggestion is plan on getting out. As Garth said, be careful about investing in things like RRSP. Look into ways you might be able to get your money out of the RRSP with a minimal penalty, before it’s too late. The increasing burden of the social safety net is massive, and demographics are turning the tide. Because our politicians engaged in the practice of this fraudulent ponzi scheme, those shortfalls are going to have to be born by everyone who was financially responsible.

Speculatively, in the event of a massive financial crisis (not like 2008, much bigger. Like the destruction of the dollar):

One thing I can see happening possibly is a massive bailout coming from China. Of course, those bailouts will come with conditions. Conditions like ‘sure, we’ll take care of your old people, but we get to run your country. That means all mineral rights. That means we get to police your citizenry’. I think if that happens, no one would even object because they’d be afraid at the state of the economy. I hate to say it, but people are selfish. Because older people make up the majority of the population, and they want security in their final years, they won’t care about selling out us young folk.

And there you have it. A century of gradual enslavement. A generation that voted themselves in massive benefits, was irresponsible, overspent, placed the burden on the next, and finally sold them out. Sounds about right. Only time will tell, but I suspect I’ll be closer to right than wrong in these predictions.

As for a timeline, I’m not sure. All I know is all the wealth is in the East now. China makes everything. They are busily acquiring all the world’s gold and silver, while we fumble with debt.

The big moves will start to happen once they’ve acquired most of the world’s gold reserves at these low Western manipulated prices. They’re well on their way and there are many estimates that they already have more than anyone else.

See, they’ve gone through centuries of bullying by Western powers and they’re not going to take it any longer. They still harbor resentment at the British for the Opium Wars, and against the Japanese for WW2. Should make for interesting times – I hope no one acts too rashly, because it could jeopardize humankind.

#94 Cici on 10.24.14 at 11:46 pm

#29

DA = Devil’s Advocate

#95 earlybird on 10.24.14 at 11:50 pm

As always…fantastic post. I swear this is one of the most sane reads out there….peanut gallery is great too. They need to get the rates up to shake out the malinvestment, debt and speculators, in all markets. Money saved is penalized too much…how perverse is that?

#96 Cici on 10.24.14 at 11:53 pm

#70 East Van

Couldn’t have said it better myself ;-)

#97 Waterloo Resident on 10.24.14 at 11:58 pm

A car is just a metal box with 4 wheels on it, think of a car that way and you will enjoy life so much more.

The used car market these days is a mess; curbsiders everywhere trying to sell broken down cars for as much as new cars cost, and of course people are buying that old garbage because they’ve got it in their heads that buying a 6 year old car at half the price of new is somehow a ‘good deal’. Well let me tell you something about those old cars; 20% of them have been in really bad accidents and their repairs only so-so. Those used wrecks are going to huge amounts of expensive maintenance in a few years when they approach the end of their lifespan and when you add up the original cost of the used car, the extra ‘very expensive’ maintenance expenses on it vs a new car, you will find that the 6 year cost of buying a 6 year used car (to make it last up to 12 years) will actually be MORE than the cost of buying a brand new car and spending only a small amount of maintenance on it. That plus the hassles of frequent break-downs on the side of the road make used cars a no-no these days.

But at the same time Garth is correct; a minivan is way too expensive for what is available in the job market these days. My advice is this; buy a compact car and shove your family into that instead.

A new Hyundai Elantra GL (with Auto) is an excellent car (the 1.8L engine is more fuel efficient than the newer 2.0L design.) and you can get a new one for only $21,300 (with all taxes and fees added).

The Toyota Corolla is very cheap too, and you can get a CE (with Auto) for about $23,000 new (that is with all taxes and fees added to the cash price).

I know for sure that you will be able to drive both of those cars up to 300,000 kms and 10-years with minimal maintenance costs.

Now lets compare how much a Sienna minivan will cost you by comparison (data from http://www.toyota.ca):

A new Sienna V6 van will set you back about $37,000. That’s a full $14,000 more than the Corolla. So do yourself a favor; buy the Corolla, have everyone lose some weight so they can fit into that smaller car, and don’t spend yourself into bankruptcy. Even better yet; rent a nice place close to your work and take the bus instead and avoid having to buy a car in the first place.

Here’s more bad news on the labor market: The Owens Corning fibreglass plant in Guelph is moving a significant portion of its production to Tlaxcala, Mexico, cutting 70 per cent of its workforce. So 120 workers are being let go. I’m hearing news like that almost every week now.

The good news is this: The Ebola outbreak in North America is being kept in check by this really great stuff called “ZMAPP”, a tobacco plant-based anti-viral agent. Unfortunately it has low funding and only 1000 doses per year will be available by year’s end, so its not something that can cure the entire population. Its just a spot treatment plan. This is the drug that is being given to all the people being isolated in U.S. hospitals right now, but the media is keeping a lid on the fact that this is the drug being used, all they are allowed to say is that the patients are “under treatment.”
Read more about ZMAPP here, its really fascinating.

http://america.aljazeera.com/watch/shows/america-tonight/articles/2014/10/24/the-creator-of-theebolaserumis99certainitworks.html

But if Ebola gets out of Africa and it spreads to Europe then all bets are off, there won’t be enough ZMAPP drug available to treat everyone and it will grow exponentially until everyone is … well, lets not go there.
People are working on a vaccine for Ebola but its a virus and you know how well that search for a vaccine for the AIDS virus has being going, right = zero progress, so don’t hold hope for a vaccine against Ebola anytime soon. The best hope will be to use blood plasma taken from the few survivors to help newly infected patients’ immune systems to battle the virus, that’s about the only thing that will work in an all-out outbreak. (only 28% of infected patients survive on their own without treatment.)

Imagine in 10 years time from now what Europe would look like with only 30% of their population alive? Imagine your city with 70% dead and only 30% of the people still alive? Who would collect the garbage once a week, who would change the burned out street lights, who would be around to keep the nuclear power plants running, who would plow the streets in snow storms? As you can see, it would not be a pretty picture.

So for now ZMAPP and 1000 doses per month is keeping the $hit from hitting the fan, but if more than 1000 new infected patients fly into Europe and North America each month then all bets are off, and we are so screwed.

#98 Smartalox on 10.25.14 at 12:18 am

For what it’s worth, 50 with-collar high 5- and 6-figure jobs cut this week in Vancouver.

One of them was a family man who traded his 2 year old Kia Soul in for a 2014 Mustang Convertible (in purple, with a 6-cylinder engine) just 6 months ago. The Ford dealer was nice enough to let him roll the remaining payments on the Kia in to the balance owing on the Mustang.

I’d say he lost more than his (Kia) Soul in that trade,

Alex

#99 Retired Boomer - WI on 10.25.14 at 12:21 am

It is amazing that President Clinton raised taxes (on everybody) early on, and we prospered, and deficit and debt went down. Bush cut taxes a couple of times, started 2 war fronts (Iraq & Afghanistan) financed both, debt bloomed, the wealthy benefitted the most from the tax cuts, the economy died. Tax Payers were picked to pay for the folly, except they’re broke.

We are a debt ridden mess! We might maybe start paying down our debts but, it won’t be pretty. The young say it’s not my debt, but it is your debt, as much as it is mine.
Welcome to life! When we get our spending under control, then, and only then should we talk of reducing taxation. Until then we need to increase the tax rates, as needed.

MY opinion only. Feel free to disagree, but you better have a valid argument.

#100 Kenchie on 10.25.14 at 12:42 am

#86 RealistvsExtremist on 10.24.14 at 10:49 pm

“#51 Kenchie on 10.24.14 at 7:29 pm
#93 Cato the Elder on 10.22.14 at 11:17 pm
“Re: #81 Casual Observer

ALL WARS ARE BANKER WARS. They don’t care who wins. All they care about is that as many people as possible GO INTO DEBT.”

And you probably believe the Rothschilds financed the French Revolution.

++++++++++++++++++++++++++

Why don’t you tell us who financed it? As well as Wellington’s army? If it was not the Rothschilds (on both sides).”

I have no opinion on who financed it. I brought it up because, years ago, I read a very fascinating tale about the Rothschilds and how the mother of the sons of Mayer Amschel Rothschild said “without my sons, there would be no wars”. I wanted to see if Cato read the same thing.

#101 Nuke on 10.25.14 at 12:46 am

Car loans are exploding as technology allows for remote engine killing and GPS location services. Behind a week in payments. Zap! your car is dead. Whether you need it for work or getting to the hospital. Tough.

#102 gladiator on 10.25.14 at 12:53 am

Cato, you’ve got a faithful follower here – me.
You cannot make 100% of the readers of your posts to agree with you, so there will always be Nones and Kenchies who will challenge you.
Please do not waste your efforts on replying to their trollish posts that are meant to challenge you. Keep on posting your ideas, because they are so well thought and articulated and reflect an unfortunately bitter truth, but it is something we need to read and know.
I have been reading your posts since you were just “Cato”, not “Cato the Elder”. And was always looking for them. So, just ignore the trolls. It looks like they still have a lot to learn and did not reach the level you are at.
Sincerely, gladiator.

#103 Mark on 10.25.14 at 1:31 am

“which losses? you are assuming they will let it get to the end game scenario before trying to screw us over a few more times. ”

The losses to the CMHC subprime “insurance” fund that are inevitable as RE prices continue to decline.

#104 Westcdn on 10.25.14 at 1:37 am

I bought a 2007 Hyundai Sonata (built in NA), V6 and dressed out. My former spouse wanted a taupe Mercedes so I went golden bronze as a colour against other choices – thought it might make it acceptable to her as a second car; oh well. I like the car and will drive into the ground. I plan to have it for another 10 years as I am not a big time driver. I bought it under a 7 year 0% interest plan which I thought was amazing at the time. However, at the end of the day, I will pay about $200 a month plus gas, insurance and maintenance for something that will have l any value after 12 years. If you want to save money, take a close look at your ride and decide how much you want to impress. PS: I read an article that my 2007 era car was a favourite of gay guys – sh*t !!!

#105 kommykim on 10.25.14 at 1:45 am

I don’t know if it’s the same in the rest of the country, but I’ve noticed a new car sales tactic here in BC. They no longer quote the monthly payment in 200pt font. Now it is the WEEKLY payment in 200pt font.

#106 Juno on 10.25.14 at 1:51 am

So why does Beemo and the other Canadian Banks keep on loaning to these Debt Addicts.

Simple, because we have CMHC and the US no longer had Fanny and Freddy.

They keep on saying its going to be a soft landing, but the politicians will not stop the gravy train, until the train crashes on its own. They simply don’t have the balls to be the one to slow it down and cause even a minor hickup. (they could of raise interest rate last year to slow it down or stop funds to CMHC to which is increasing the bubble.

That what happened in the US. That is probably whats going to happen here.

So enjoy it while you can

#107 Kenchie on 10.25.14 at 1:58 am

#87 Cato the Elder on 10.24.14 at 11:05 pm
Re: Kenchie

“Look, I’m not going to argue with you about every single thing you bring up, because you seem intent to pick fights.”

It’s very frustrating to see you make unsubstantiated claims so often. I’m fine with you using your opinion on things that are debatable on principle and morality, because everyone’s different and can have their own opinion. But when you make broad statements on shaky premises and twist history and/or numbers to suit your purposes, that’s when I step in. It’s apparent that others do too.

“Switzerland can’t be held responsible for making wise decisions while the rest of the world is being stupid. They shouldn’t feel pressured by politically correct idiocy to comply with everyone else.”

If it was that easy, I would agree with you. But Switzerland depends a lot on the good graces of its neighbours and the European Union, generally. It was conquered by Napoleon, and if Hitler wanted to he could have too. Also, IMO, serving both sides, generally, shows a lack of a backbone and principles during some disputes. For example: Kurdish oil traders that have been buying oil from ISIS-controlled oil facilities, which finances their attacks on Kurds: http://www.bloombergview.com/articles/2014-10-24/make-islamic-state-go-broke
————————–
“What makes our media or government feel they are entitled to someone else’s hard earned money in the first place? This is what happens when a government gets out of control with spending – they want to blame anyone else for their recklessness.”

Totally agree on this point. It’s taking things for granted, which I don’t like in individuals, let alone corporations or governments (Alberta and BC in oil and LNG, respectively). IMO, gov’t should not take any form of revenue for granted as it can fall quickly (as in 2008-09). And governments and economists should not put much credence on the metric of deficit as a % of GDP. I prefer the metric of deficit as a % of revenue because it becomes more shocking and real.

On another note, I dislike the phrase “hard earned money” because what defines “hard”, is it number of hours worked, is it the nature of physical labour, is it commission, is it salary, etc? It’s a catchall phrase that can be very meaningless, IMO.
—————————-
“However, I would say the majority in Canada feel intent on attacking wealth.”

Canada’s fine. The the next fed gov’t isn’t going to raise income taxes any time soon. On the other hand, Europe, US, Japan, Korea, China and Hong Kong (and many other countries too) are more vocal about inequality than here.
—————————-
“If they understood the role that others’ wealth had in bettering their own lives, rather than giving into pity jealousy, they would embrace it.”

Nature is nature. Humans want what others have, and humanity will never change. IMO, this type of issue falls into the 10-80-10 rule where 10% will not care about what others have (no jealousy); on the other side of the spectrum, 10% will care an irrationally high amount about what others have and covet it, and 80% will be in the middle, on an inclined scale between the two extremes. Either accept nature for what it is, or keep wishing.
—————————-
“We need lower or NO taxes on everything for EVERYONE including the rich. Let capital flow here.”

This is not a panacea. It won’t do anything for what ails the middle-class. It won’t cure the skills shortage for the 21st century economy, won’t stop trade with lower wages nations that are beginning industrialization, won’t stop the need for denser cities that have to pack people into “shoeboxes in the sky”, won’t automatically provide wage growth because of no taxes, won’t do a thing for keeping inflation stable. If anything, it may lead to more inflation as more capital bids up the prices of assets, goods and services. Also, more capital leads to more lending to those fools Garth rails against. Also, as capital increases in an economy, the marginal rate of return decreases, thus it goes to other economies where its RoR will be higher.

This continent does not need more capital. It has enough capital as is. What the continent is lacking is enough good ideas to get that capital moving to where it “needs” to be to attain socially “desirable” outcomes. And IMO, the status quo is fine because the owners of capital can do as they please with it (unless it was ill-gotten).

#108 Kenchie on 10.25.14 at 2:10 am

#43 Smocking Man on 10.24.14 at 7:22 pm

“He took my nephew on Saturday, not giving him back to us till Wendsday of next week.”

“God the prick throws another curve ball, been doing the nursing home sleep over for the last four days. He wants my mom too. She lost conciounes this morning”

Deepest condolences for your family’s loss. It’s one of life’s greatest tragedies when parents have to bury their child. And I’m sure your mother was an amazing lady. I hope she made it to midnight.

All the best,
Kenchie

#109 Observer on 10.25.14 at 2:22 am

@ Mister Obvious
I live near most of the super high end car dealers clustered on Burrard Street and over on Terminal Avenue in Vancouver. Showrooms are full. Business is red hot.

You can always check out the Flea Market across the street on Terminal Ave…

https://maps.gstatic.com/m/streetview/?panoid=XYnqAua6Tdd2RTz4Utzw5A&cbp=0,279.3235917784913,,0,0

#110 Fisheman on 10.25.14 at 2:35 am

In Van town the time honored pursuit of pump & dump is alive &well. No Martha it didn’t go away when the Pez went to a better place. The boiler rooms morphed into the Internet with millions instead of thousands of suc er clients. Now a lot of these players got west side R/E and no T4’s. They live off their equity till their horse comes in. You can get 8-10% off these guys with a 1st or 2nd, max 2 years. Quite the sport watching somebody go down while the lawyer is grabbing the house(it takes about a year). First the kids cars,then the wife’s, club dues,mistress, private schools,wife’s card,mortgage payments, his cards & always last is the lease payment for the Benz or whatever fancy ride. Howe Street cowboys,if you ain’t got the horse you got nothin.

#111 Rural Rick on 10.25.14 at 3:01 am

All my vehicles are old enough to vote. Replace radiators, tires, and stuff when they are due. Change the oil. Wash every week in the winter. Cheaper than car payments. Hey my rides are not flashy but they are reliable.

#112 Nemesis on 10.25.14 at 3:09 am

#JoeFrontPorchGet’sPooched… #JustKidding… #It’sTheOldArmyGame [RealityEndsWayBetterThanThisParable]:

http://youtu.be/6dy1HArmERs

#113 Nemesis on 10.25.14 at 3:50 am

#JustForMenInSmocks… #FindTheJoy…

http://youtu.be/iioBwO6vnEs

#114 Huge Friggin Headache on 10.25.14 at 4:23 am

Enough Cato. You constantly contradict yourself. You have some simple and ridiculous view of how the world works, just stop it. Go read something that is not found on the conspiracy theory section of the internet.

I have a family member like you, says all of the same kind of things, for a while he didn’t but then he decided that the side effects of the medication were to much and stopped taking them. I am not even trying to be mean here, it’s a serious issue. I constantly worry about that family member and I’m sure your family does the same for you. Get some help for gods sake.

#115 liquidincalgary on 10.25.14 at 4:46 am

11 Bob on 10.24.14 at 5:42 pm

It might not be a Kia but my Hyundai turns 10 this fall :)

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

it may not be a Hyundai, but my Audi turns 13 this year

#116 liquidincalgary on 10.25.14 at 4:56 am

cato the elder says:

(ever notice 2 by 4s aren’t 2 by 4 anymore?).

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

did you never take ‘shop class’? they never were 2 by 4

d’oh !

#117 };-) aka Devil's Advocate on 10.25.14 at 8:32 am

#114 liquidincalgary on 10.25.14 at 4:46 am
11 Bob on 10.24.14 at 5:42 pm

It might not be a Kia but my Hyundai turns 10 this fall :)

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

it may not be a Hyundai, but my Audi turns 13 this year

It may not be a Hyundai or a Kia but my BMW lease is up next year and then I get another new one with full warranty including oil changes and a loaner whenever it is in for maintenance and a wash. };-)

#118 Edward on 10.25.14 at 8:35 am

“So while the official jobless rates is 6.8%, the bank says it’s actually about 7.2%. In the US, by the way, unemployment is now 5.9%.”
—————————————————————–

Actually the real unemployment rate (the U6) in the States is actually 11.8%

http://www.cnbc.com/id/102055126

Also, if Canada reported unemployment the same way the States does, we would actually have the same rates of 5.9%.

http://www.cbc.ca/news/business/canada-s-economy-adds-74-000-jobs-jobless-rate-drops-to-6-year-low
1.2794839

And, the States has the same auto loan problem that we have. The news is filled with stories as such.

http://www.cnbc.com/id/102049575

That is not the “real” unemployment rate. Rather it is “total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.” Seems clear enough. No need to exaggerate. — Garth

#119 Edward on 10.25.14 at 8:38 am

Sorry, here is the link again to the CBC article telling the unemployment rates in Canada and the States if reported in similar manners would be the same.

http://www.cbc.ca/news/business/canada-s-economy-adds-74-000-jobs-jobless-rate-drops-to-6-year-low-1.2794839

#120 Mixed Bag on 10.25.14 at 8:42 am

#115 liquidincalgary

Actually they were. When we reno’ed our basement, we noticed the original 2×4’s were, in fact, 2×4.

#121 waiting on the west coast on 10.25.14 at 9:08 am

#69 Retired Boomer -WI

I totally agree. After keeping my Honda Civic for 12 years (bought 6 months old at a step discount), I only sold out to my eldest who had just received his license. Great car and never leaked oil.

So I was turned on to a couple of sites where you can pick up cars on lease when people need to get out of them. swap a lease and lease busters.

I bought my last car through it after a guy had overbought and could no longer afford the payments. He gave me cash to take over the lease and threw in an extra set of tires and rims as well. He also ate his initial deposit with the car company. Net effect – I got a car that was 20 months old / 27k kms at half the price of it new. I have been driving it for almost two years and could sell it for what I bought it for (those extra tires and rims added about 3k to the value). I tell my friends to do this and they say they want to have the “new car smell”….

#122 Mr Right on 10.25.14 at 9:35 am

Takla 54…”We need a modern day Robin Hood to steal from these rich #%$&ing bankers/elite and give to the stuggleing tapped-out middle class….history is riff with examples of paupers riseing up when the so called privaledged few preditate on their middle class….could that be in our future???”

Yes, his name is Stephen Harper and in 2016 he will have a majority in the SCOC.

#123 The American on 10.25.14 at 9:52 am

At #91: In turn, I would ask you to support your claim you made in post #90, stating it would be inaccurate to compare Canadian statistics to the American statistics, based on differences in methodologies of the way they are calculated. I think it is fair to state that nearly every country will have a different methodology, but what drives you to say the U.S. unemployment rates would/should be 1% higher when compared to Canadian?

#124 T.O. Bubble Boy on 10.25.14 at 9:53 am

Interesting article on 401(k) plans in the U.S.
http://www.nytimes.com/2014/10/25/your-money/401ks-and-similar-plans/combating-a-flood-of-early-401-k-withdrawals.html?_r=0

Looks like a big percentage of people withdraw retirement funds when leaving a job (some because the company makes them do it).

“…Fidelity revealed that 35 percent of its participants took out part or all of the money in their workplace retirement plans when leaving a job in 2013. Among those from ages 20 to 39, 41 percent took the money.”

Now, you could look at this and say “wow – these people really get it… retirement funds are not about creating a giant tax liability” (like Garth preaches), but I highly doubt that is what is happening here. More like people just need the money to get by, and aren’t even considering how to pay for retirement down the road.

#125 crowdedelevatorfartz on 10.25.14 at 10:09 am

@#108 Observer

Good one.
However, Mister Obvious has a distorted view of the world around him.
Hence my nomination for his name to be changed to
“Mr. Oblivious”…….

Fellow Blog Dogs?

#126 crowdedelevatorfartz on 10.25.14 at 10:13 am

The only part of Garth’s comment today that I disagree with is
“If the economy takes a turn for the worst, we could see these loans becoming problematic for the banks.”

It’s been my experience that the car manufacturers have jumped hook line and sinker into the money loaning quagmire. Its rare for a bank to loan money for a vehicle these days.
The repercussions of deflation and delinquent loans could be a double whammy that the car companies wont be able to “deal” with. (“deal” “car” ..god Im amusing).

That was Moody’s comment, not mine. — Garth

#127 Mr Right on 10.25.14 at 10:20 am

Kommy 104….dude where have u bin?

“I don’t know if it’s the same in the rest of the country, but I’ve noticed a new car sales tactic here in BC. They no longer quote the monthly payment in 200pt font. Now it is the WEEKLY payment in 200pt font.”

Cars haven’t advertised a cash price for years. The car companies have taken full advantage of this little trick and raised auto prices 100% and more over the same time frame. No one cares if the car price has gone from 30K to 60 when they’re making monthly payments. Fools abound.

#128 Kenchie on 10.25.14 at 10:27 am

#13 Son of Ponzi on 10.24.14 at 5:50 pm
“Der Spiegel – Capital gone off the rails.
Long article from one the world’s most trusted weekly.
Worth reading every paragraph.
http://www.spiegel.de/international/business/capitalism-in-crisis-amid-slow-growth-and-growing-inequality-a-998598.html

Thank you for sharing. It’s very interesting, particularly the 2nd page about reality in Switzerland.

” No other country has as many major shareholders, financiers and investors, and in no country is as much capital concentrated in so few hands. The assets of the 100 wealthiest Swiss citizens have increased almost fivefold in the last 25 years.”

“When a Swiss business owner died recently, his two heirs inherited an estate worth as much as all single-family homes and owner-occupied flats in the Canton of Appenzell Innerrhoden.”

#129 jess on 10.25.14 at 10:39 am

Unseen Toll: Wages of Millions Seized to Pay Past Debts

by Paul Kiel, ProPublica, and Chris Arnold, NPR, Sep. 15, 5 a.m.

A new study provides the first-ever tally of how many employees lose up to a quarter of their paychecks over debts like unpaid credit card or medical bills and student loans.

At the request of ProPublica, ADP, the nation’s largest payroll services provider, undertook a study of 2013 payroll records for 13 million employees. ADP’s report, released today, shows that more than one in 10 employees in the prime working ages of 35 to 44 had their wages garnished in 2013.
http://www.propublica.org/article/unseen-toll-wages-of-millions-seized-to-pay-past-debts

#130 Daisy Mae on 10.25.14 at 10:40 am

#12 DM in C: “At least gas has gone down at the pumps. $1.064 in Calgary today.”

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

Kelowna/West Kelowna is holding firm at $1.259…

#131 Dominoes Lining Up on 10.25.14 at 10:44 am

It seems a new tactic has emerged for car retailers. This supports the idea that used car sales are getting very difficult now with all these crazy long term low interest offers on new cars.

Consignment selling of used cars. The dealers do it for a fee. Conveniently, all the risk is downloaded onto the sellers, however.

Dealers know what is really happening in their market.

This won’t end well.

This is one ad that has been all over GTA tv stations this week.

http://www.youtube.com/watch?v=Gb0w3iHnLj4

#132 Kenchie on 10.25.14 at 10:48 am

#13 Son of Ponzi on 10.24.14 at 5:50 pm
“Der Spiegel – Capital gone off the rails.
Long article from one the world’s most trusted weekly.
Worth reading every paragraph.
http://www.spiegel.de/international/business/capitalism-in-crisis-amid-slow-growth-and-growing-inequality-a-998598.html”

Daron Acemoglu, interviewed on the fourth page, wrote the book “Why Nations Fail”, which talks about the “extractive processes”. I mentioned it on this forum once before. It’s a very worthy read on history and political economy, and very easy to digest. My only complaint is it can be a bit repetitive.

#133 Mark on 10.25.14 at 10:58 am

“Cars haven’t advertised a cash price for years. The car companies have taken full advantage of this little trick and raised auto prices 100% and more over the same time frame.”

Mostly good observations in the rest of your post, but I disagree with your claim that car prices have gone up. Adjusted to 2% inflation, they seem to have gone down in price, and there’s been significantly more features included in the average car than ever before. Remember windows that required a crank to open them? Non-power windows used to be an expensive add-on, now its practically impossible to buy a new vehicle without. 5-airbags are fairly standard on pretty much everything sold. Various forms of traction and stability control/anti-skid systems on every car. Even very sophisticated event recorders now are standard.

#134 Mark on 10.25.14 at 11:03 am

“They simply don’t have the balls to be the one to slow it down and cause even a minor hickup. (they could of raise interest rate last year to slow it down or stop funds to CMHC to which is increasing the bubble.”

Actually F’s Budget 2013 included a substantial crack-down on the issuance of CMHC subprime mortgage insurance. And the government made it abundantly clear that there would be no expansion above the CMHC’s $600B authority to provide subprime mortgage guarantees.

This event coincided with the peak of the Canadian housing market, and prices across the country have mostly been falling since, on such account.

#135 Mark on 10.25.14 at 11:07 am

“It is amazing that President Clinton raised taxes (on everybody) early on, and we prospered, and deficit and debt went down. “

Don’t forget the massive spending cuts that took place under Clinton, especially in the Military and even throughout the rest of government. Large numbers of base closures and defense spending cuts in the wake of the collapse of the Soviet Union. Turns out Reagan/George H.W. Bush really weren’t all that “conservative” after all when it came to excess government spending.

#136 Babblemaster on 10.25.14 at 11:13 am

“Our manufacturing base has shrunk and a quarter of the economy is now centred on real estate. Were it not for low rates that allow so many to meet their gargantuan monthlies, we’d be pooched. And none of this is coincidental.” – Garth

—————————————————–
Don’t forget the massive immigration as a factor. They certainly create housing demand and help to prop up RE prices in the major centers.

Immigration is 0.8% of the population annually. Hardly massive. — Garth

#137 Karl Hungus on 10.25.14 at 11:17 am

Leasing is for chumps. Rent a depreciating asset? What, for the rest of your life? Lets say you own a vehicle for 20 years, you can pay it off in 5, but your suggesting to have payments for the full 20 because you lease. And the payments are usually the same. Rarely makes sense to lease.

#138 Makes sense on 10.25.14 at 11:22 am

Cars are not made in Canada anyways. All the parts are made overseas and just assembled in Canada.

#139 Retired Boomer - WI on 10.25.14 at 11:22 am

#92 Cato The Elder

I mostly agree with the scenario, especially option #2.

DEBT, well managed, can be a servant, but out of control a cruel master! We will see….the US has the bigger problem

As for cars, they are to be your servant. Do not let them own you!

#140 liquidincalgary on 10.25.14 at 11:22 am

#116 };-) aka Devil’s Advocate

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

you completely missed the point of the above exchange

#141 Kenchie on 10.25.14 at 11:23 am

#67 OffshoreObserver on 10.24.14 at 8:32 pm
“Great article in “The Economist” on deflation: http://www.economist.com/news/briefing/21627625-politicians-and-central-bankers-are-not-providing-world-inflation-it-needs-some

Thanks for sharing. It’s a great read indeed, as it answers many questions on the problem of deflation that Garth warns us about.

#142 liquidincalgary on 10.25.14 at 11:28 am

#118 Mixed Bag on 10.25.14 at 8:42 am

#115 liquidincalgary

Actually they were. When we reno’ed our basement, we noticed the original 2×4’s were, in fact, 2×4.

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

here ya go…https://en.wikipedia.org/wiki/Lumber….scroll down to the chart (nominal/actual)

#143 Patricia on 10.25.14 at 11:50 am

Why does the Immigration Dept keep bringing in 80,000 immigrants a year and Minister Of Finance and others complain about the high unemployment numbers. Confusing.

#144 Drill Baby Drill on 10.25.14 at 11:51 am

“After all, in ten years the TFSA money should double to $60,000. The minivan will be worth (maybe) ten thousand.”

Dear Pathetic Blog you are being truly nice today. The value of that minivan after 10yrs maybe 2K if there are 4 new tires and no too much Alabama chrome (duct tape).

#145 Kenchie on 10.25.14 at 12:01 pm

#84 learningfromyou on 10.22.14 at 10:50 pm
“Why Do We Fall
http://www.youtube.com/watch?v=mgmVOuLgFB0

In sad moments like this one I just wish to see a whole nation together and stronger, our actions will be the legacy to our kids, they sleep now without knowing that their peace involve pain and sacrifice, they should learn that part too.

RIP soldier, you were giving the best for the country.”

Absolutely amazing video. Thanks for sharing. Doomers of this world should heed its advice. Success is a product of resilience and positive mindset.

Here is one of my favourite proverbs:

Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; it becomes your destiny.
—Lao-Tzu

#146 B. skytrain on 10.25.14 at 12:05 pm

Immigration is 0.8% of the population annually. Hardly massive. — Garth
………………….0.8% of total cdn pop, yes.
But virtually all of those people move to urban van and tor where the pop is about 1/10 of the total.

8%/yr in urban 604 and 416 is a massive influx and explains perfectly why the prices in those two areas are
Uppa every month and so detached from the rest of the country .

#147 DML on 10.25.14 at 12:06 pm

Poor credit,no problem,just don’t miss a payment.

http://dealbook.nytimes.com/2014/09/24/miss-a-payment-good-luck-moving-that-car/?_php=true&_type=blogs&_r=0

#148 chapter 9 on 10.25.14 at 12:11 pm

#113 Huge Friggin Headache
There seems to be reluctance or outright denial of some people to come to grips with the fact that they are being profiled by government agencies.
The federal government just spent $1 billion dollars for a new building only for CSEC (Communications Security Establishment Canada) this is the most expensive project ever under taken by our government and this does not include operating costs.
And what do they do? The same as the NSA but they also work with CSIS,RCMP as well.
With this amount of taxpayers money being spent on one project you would think that parliament would be aware of their activities but that is really not the case.
Maybe it is time for a public debate!
Oh, have your cell phone handy?Nosey,Tracker,Dreamy,Paradoid Smurf those are programs that control your I-phone and Android devices they turn on your microphone,tracking locations and power.

#149 B. skytrain on 10.25.14 at 12:14 pm

Re the new Benz dealership across from the fleamarket.

What was a fleamkt and a patch of industrial wasteland is now a fleamarket, the biggest Benz shop you have ever seen, a big new porsche dealer, and a third unknown (but high end for sure) under construction. Mercedes has also just built a huge new facility at bdw/bndry a gigantic new shop in richmond. Sales must really suck!

#150 Cato the Elder on 10.25.14 at 12:16 pm

All these discussions about which puppet in the oval office raised taxes the most are moot.

The real tax is SPENDING.

The moment the government spends 1 dollar, it is a tax.

They either have to borrow it (at interest), tax you directly, or print the money.

Each one of these has a detrimental effect on the economy and you.

If you borrow it, you end up owing more than just the principle, and what they spent the money on must generate at least the principle+interest in return. This is often not the case as the government is very inefficient in it’s allocation of resources.

If you tax someone, that means that they can’t invest the money or spend it on improving their lives in some fashion.

If you print it, everyone who holds Canadian dollars will see the value of their purchasing power eroded. If you hold a dollar, but now it only buys 99.999991 cents worth, that is a tax. This is the most sinister tax we have (called the inflation tax) because it hurts the poor and those on fixed incomes like retirees the most. It’s also the tax politicians love to use most because it’s relatively hidden.

Demand less spending from government. We can manage ourselves. The ultimate form of democracy is what we do each and everyday when we spend our own money. It’s essentially a ‘vote’ we place at each store. You vote for whoevers’ product you believe gives you the most value. In that sense, whoever gives the most value receives a ‘mandate’ to continue due to profits, and those that weren’t catering to your needs receive losses and are forced to stop.

#151 Godth on 10.25.14 at 12:28 pm

#98 Retired Boomer – WI

When are you older guys going to tell us about the extra planet or two you’ve hidden away? We need them now so we can strip them of their resources to pay down all these paper positions.

#152 Retired Boomer - WI on 10.25.14 at 1:22 pm

#150 Godth

Wish all that federal spending by the ‘government’ had been something I could see, drive on, or help my kid.

War is very expensive. DEBT has gone up every year since Reagan. We are not paying it down. We got closest under Clinton, but still no cigar. (pun intended)

So, when does the rest of the world start saying ‘screw you guys, your credit level is too high.’ I can’t see it yet, we’re still the best looking pig, as for the other planets, try a curb side pharmacutical. Worked in the 60’s.

As for denuding the planet of resources, we are almost done stripping this one. Wait for the whimper…

#153 Nick on 10.25.14 at 1:31 pm

Re:#26

Derek R. Damn dude! That’s a crazy Google Doc you have there. Are you Garth’s assistant, disciple or stalker?
I kid! Props to being so organized.

#154 Joe2.0 on 10.25.14 at 1:38 pm

DELETED

#155 dave c on 10.25.14 at 1:40 pm

Waterloo Resident – bang on post about new cars nowadays being great value.

All these people on here reminiscing about their “great 1971 Delta 88”, “my $500 luxurious Ford escort”… are the greater fools – as Garth puts it.

For less than 25k, out the door, you can get a new car with a min. 5 yr warranty, backup camera, power windows, locks, air conditioning, multi-air bags, great sound system, cruise, bluetooth, heated seats, and more.

What does your 1971 Mercury Zephyr have? Maybe power steering???

Borrowing money is FREE. F-R-E-E !!! You’d be stupid not to take advantage of this now rather then wait until 2025 when rates are higher.

If we rolled back 25 years to the 90’s and dropped interest rates to 0%, all the same blowhards here would have changed their tunes.

Anyone over 40 years old complaining about the 20-somethings buying nice items is just an old jealous, cranky, sour, salty, over ripe potato looking back and wishing they had no interest rates when they were young.

HELLO seniors….. the VCR is gone, your 200lb 26” TV is a boat anchor – get with the modern era. I bet the complainers don’t even own a cell phone, they probably still have a 48MHz two channel cordless phone still.

Times are changing fast and unfortunately the older set (over 40) can’t keep pace and have to slander and ridicule the successful younger group who know how to put todays technology to good use and gain from it.

We ARE maxed out on our TSFA’s, Garth’s own survey proved it. Garth with trot out stats that say one thing one day and then his own survey shows otherwise. You can’t have your cake and eat it too – unless there’s an app for that.

So chill out seniors, maybe talk to someone younger for some advice. Or are you too proud to admit that you may have fallen behind the times??

I think that many don’t even know they’ve fallen out of touch with the modern era so they argue moot points. And NO, I’m not talking about myself as I’m sure some of you oldies are going to try to say!!!

If someone is giving away free money, take it now before it starts costing something. Simple.

You oldies really need to learn from the new generation about technology and the new era.

I’ll end with the fact that you oldies will end up being driven off the roads because as you drive around in your great $500 Dodge Shelby’s and Tempo’s, our self driving cars will be running circles around you and eventually you’ll be banned from driving as your cars can’t keep up to the “car hive”. Have fun on your bicycles.

#156 Godth on 10.25.14 at 1:41 pm

#151 Retired Boomer – WI

Where is reality; can you show it to me?
http://www.youtube.com/watch?v=xLqrVCi3l6E

#157 Bottoms_Up on 10.25.14 at 1:53 pm

It works out well by at least another decade of a flat-lined housing market, steady low interest rates, and Canadians paying back debt rather than accumulating it.

It is possible….not great for economic growth, but possible.

#158 Bottoms_Up on 10.25.14 at 1:58 pm

#142 Patricia on 10.25.14 at 11:50 a
———————————————
Because the people they’re bringing in are doing the jobs that unemployed Canadians don’t want to do.

#159 Joe2.0 on 10.25.14 at 2:02 pm

Don’t ever buy new be patient shop around and buy used.
All you need is a good mechanic to check it out, loads of used vehicles still under warrenties at a fraction of the initial cost.
Bought a used 2004 Lincon Navigator-65k new.
Low milage-70k all the bells and whistles.
Paid 9k.
There are great deals out there just be patient.

#160 Nomad on 10.25.14 at 2:06 pm

I bought shares of Autocanada ($ACQ.TO) at around 60.0 a share. They buy car dealerships.

Canadians *should* keep buying cars as long as the money is cheap. An interesting thought: if there is a downturn, people will ditch their mortgage before their car, because you need a car to get to work, however, you can always downsize or rent.

#161 SWL1976 on 10.25.14 at 2:07 pm

I tried to sell my car last for 4g last year after buying a small truck. I thought that was a very reasonable price for a car only 5 years old with low k’s, but that’s when I realized most people can’t even come up with 4k, they would buy the same car at a dealer for 8k on monthly payments

Oh well in the end I kept the little car and glad I did, its cheap to operate and I will drive it now till the wheels slowly deflate and it starts rolling backwards

#162 SWL1976 on 10.25.14 at 2:19 pm

#78 young & foolish

I’m beginning to like Cato the Elder ….

I’m telling you Cato for PM, sure would beat this ‘steady hand on the wheel’ we have now

Really Harper, steady hand on the wheel? Even on a crash course???

Also…#80 young & foolish

Freedom today seems to mean giving Joe Frontporch a loaded gun so he can shoot himself in the foot.

Now that’s good

#163 Smudgekin on 10.25.14 at 2:28 pm

If your single, live & work downtown. Folding bicycle for the apartment and commute. TTC or walk in winter. You’ll be glad in an ice/snowstorm. Screw having a car – the dealer & insurance Co, big oil etc. Join an autoshare program for big box jaunts. Never look back. Let others enjoy driving Toronto and throwing depreciation in the road.

Renting a car to go to Costco, and hoofing through the winter slop. Ah, that’s the life. — Garth

#164 Berniebee on 10.25.14 at 2:40 pm

#96 Waterloo Resident

” That plus the hassles of frequent break-downs on the side of the road make used cars a no-no these days.”

OMG, absolutely correct. May I add: “When you buy a used car, you’re buying other people’s problems.”

Please everyone, buy a new car today. Make it small. Air conditioning is good.

Four or five years from now, you will, of course, be driving a used car. You know what I mean. The kind that gets sympathetic looks from elderly ladies. You will be facing a 20% chance of a really bad accident-with so so repairs. Huge amounts of expensive maintenance costs looming ahead. It’s so well outlined in post #94 above.

That’s when I would be happy to take it off your hands.
Please, no thank you’s. It’s my way of giving back to the community. Remember: Small, with airco.

#165 ronh on 10.25.14 at 3:01 pm

Lets talk about the economy.

http://wolfstreet.com/2014/10/24/global-consumer-products-giant-really-tough-out-there/

#166 waiting on the west coast on 10.25.14 at 3:10 pm

#154 dave c

Too funny… Although I am over 40, I am a technophile and ahead of the tech curve of many millenials. But I don’t see any logic in acquiring a rapidly depreciating asset even if someone lends me cheap money.

Maybe save some energy on the rant and use it to learn about the opportunity cost of investing capital in a depreciating asset. On the other hand, everyone spends money on things that others find wasteful so no need to spank others justifying your purchases.

#167 Habs76-79 on 10.25.14 at 3:38 pm

#136 Karl Hungus

Leasing is for chumps. Rent a depreciating asset? What, for the rest of your life? Lets say you own a vehicle for 20 years, you can pay it off in 5, but your suggesting to have payments for the full 20 because you lease. And the payments are usually the same. Rarely makes sense to lease.

——————–

Wrong Karl. If you are one who feels a need to have and drive a new car every few years, leasing is the only way to go as you only pay for what you use. BUT! if you are one who wants a car and to drive it till it’s say ground down then YES! buying is worlds better than leasing. But buying new is silly in terms of financial reasons as even with FREE MONEY as Dave c. ignorantly cries out here. it’s NOT FREE! You probably wind up buying more car than you should if credit was not so easy and that means you PULL FORWARD much more money from your future, for longer terms, up to 84 months is growing more typical now and thus HAVE LESS available for you tomorrow.

On top of that, the money you borrow and because credit is easy and upfront looks cheap or free (NOT!). That means you have LESS money to use to possibly invest with for your future that may pay a real return.

See, that $50,000 you borrow to get say your over sized new pickup truck to which you probably only load up a coffee and doughnut in with you daily means that you not only have to REPAY that $50,000 loan over 84 months even with little or no interest but you no longer have $50,000 to invest with over the next 84 months. So you may pay $500 per month payment even at 0% interest (BTW that is only if you have the BEST CREDIT RATING) for 84 months for a new truck that is in reality wasting away in value. If you were to put $500 per month in an investment of some sorts that avg. 6% over 84 months you will have over $60,000.00 after 84 months waiting for you. So by buying into the crap sham of FREE (NOT) money to borrow for probably an over priced and likely duped into buying too much new car, you will not only pull forward $50,000 of your future income even at 0% interest, more if you actually do pay interest on said amount but could lose possibly another $60,000 or more in lost investment gains. A differential of -$110,000.00 ALL JUST TO BUY A NEW VEHICLE AT FREE (NOT) CREDIT SOLD TO YOU!

So no, IT’S NOT FREE and buying a new car is a poor financial choice. Buying used is better in terms of your money spent, even if you have to borrow said money as you will borrow less of it and likely over a shorter term. But if your vanity says “YOU MUST DRIVE NEW!” then leasing will be the least costly.

#168 Detalumis on 10.25.14 at 4:00 pm

Your comments to #162? what’s with that. Many city people don’t bother with Costco, you buy what you need when you need it. Guess what, there’s no better way to say in shape than by hoofing it. Walking on uneven ground and through ice and snow is better than a thigh master and preserves something that is missing in older people – agility.

The life-long hoofers are a whole lot healthier and look a whole lot better. There’s an 80+ Swiss lady in my neighbourhood that walks the same as a 25 year old would. You don’t see them shuffling along with mincing little steps or thinking their lives are over when they give up their licence. You don’t see them killing a child or two by driving through the Costco doors or driving with Alzheimer’s, cataracts and strokes.

#169 Retired Boomer - WI on 10.25.14 at 4:04 pm

#155 Godth

Reality? I think, therefore I are? Maybe what I see out my door each day, a walk to the river, or the woods. That is reality for the past dozen lifetimes I’ll barely comprehend.

The 506 people with whom I share this small town. Each has their own story, from the young business owner, the retired mill worker, the disabled solider, the families here who work in nearby towns at their various posts. All varied, but with their own ‘realities.’ Good stories mostly, some heartbreak, the early deaths, divorce you get the drift, mainly good stories. Good people too. Trying as best they know to make their ways in an uncertain world.

Oh, do they get drunk at the local gin joint on Fri nights yes, some do. An escape. Some probably do drugs, I don’t know. 40 years ago I’d share a doobie with ya.
Might alter reality, it doesn’t change it.

Tomorrow the same challenges await us all, right. Most of us were born with nothing, and most of us have a lot of it left. We work, we complain, we save, maybe we retire, we die. The circle of life complete.

Most will never leave much of a ‘mark’ on history to show we were ever here. That’s OK!! If you have a few friends who will cherish you for your being here, that’s plenty, or family that won’t regret knowing you.

Sorry, Godth, that’s the BEST I can do to show you MY reality, today. How do you define yours?

#170 Casual Observer on 10.25.14 at 4:14 pm

Cato the Elder

I’ve resisted responding to your multiple posts over the last few days, partly because the last time I did, I allowed myself to be drawn into a debate about the neutrality of Switzerland and the root causes of WWII (on a RE blog, no less), and partly because our ideology is not as far apart as you might think.

What I have a problem with is when someone holds a different opinion than you do, you immediately argue that they are weak minded, non-critical thinkers who have been “brain-washed” by the gov’t, the media, the public school system, or whatever.

There are many things I do not know. I can, however, say with a fair amount of certainty that you do not hold a monopoly on critical thinking.

Your “black and white” statements and conclusions give the impression that most of what you have learned in life has been out of a text book. Real life is not like that. It is full of “grey areas”.

Every action (or inaction) has unintended consequences. You appear very capable of seeing from A to B, but don’t seem to think about what comes next, when those actions lead to C, and then to D?

When you say things like, “We need lower or NO taxes on everything for EVERYONE including the rich.” Think through the consequences of that statement.

How do we pay for the strong national defense that you also advocate, if there are no taxes being paid on anything or by anyone?

What your posts lack is the foresight to see the eventual consequences of some of the policy solutions that you propose. A small dose of humility couldn’t hurt either.

You come across as a smart, well-read individual, and appear to have built yourself a fan following on this blog. I am just a “Casual Observer” offering an unsolicited opinion.

Some will agree with me, while others will not. You are, of course, free to take my advice, or ignore it as you see fit.

#171 Ronaldo on 10.25.14 at 4:26 pm

#168 Retired Boomer – WI on 10.25.14 at 4:04 pm

You summed it up quite well.

#172 Porsche on 10.25.14 at 4:29 pm

Report Warns of Capex Crisis for Oil Majors

http://energypolicyinfo.com/2014/10/report-warns-of-capex-crisis-for-oil-majors/

#173 Italians love real estate on 10.25.14 at 4:30 pm

#145 B. skytrain on 10.25.14 at 12:05 pm
Immigration is 0.8% of the population annually. Hardly massive. — Garth
………………….0.8% of total cdn pop, yes.
But virtually all of those people move to urban van and tor where the pop is about 1/10 of the total.

8%/yr in urban 604 and 416 is a massive influx and explains perfectly why the prices in those two areas are
Uppa every month and so detached from the rest of the country .

Yes , my observation as well.

By the way , if you are going to use the word “uppa” coined by a long time original poster , Bigrider, than give him credit where credit is due.

Where are you Bigrider ? Making home made vino?

#174 Mark on 10.25.14 at 4:36 pm

“” That plus the hassles of frequent break-downs on the side of the road make used cars a no-no these days.””

Modern cars are incredibly reliable, and many can go 160k (100k miles) with little more than 2-3 oil changes and literally nothing else done to them. The 2nd and 3rd 100k mile intervals often need a little bit more in terms of maintenance, but we’re not talking a lot. Tune-ups are a thing of the past. Maintenance is often/usually included in a lease as part of the all-in cost of the package, so used cars off-lease are incredibly reliable. And unlike in the past, the computer controls significantly limit even the ability of a vehicle operator to ‘abuse’ the engine and/or transaxle.

For most cars these days, the true life-limiting component is the steel body, which invariably experiences corrosion and damage from traffic accidents that cannot be economically repaired. True mechanical in-service break-down of non-rotable components (ie: not tyres, nor batteries!) is exceedingly uncommon.

#175 Mark on 10.25.14 at 4:41 pm

“Canadians *should* keep buying cars as long as the money is cheap. An interesting thought: if there is a downturn, people will ditch their mortgage before their car, because you need a car to get to work, however, you can always downsize or rent.”

Car loans aren’t exactly cheap. Most are at 5-7%. “0% financing” just means that the vendor jacked up the price of the car up-front, and will collect the equivalent of 5-7% interest capitalized into the payment stream.

The in-service vehicle fleet seems to be newer than ever these days, with even the high school student parking lots full of relatively newer cars, not the old barely running junkers typical of the past. So just like houses, very little ‘pent-up’ demand for new vehicles, especially with so much excess credit in the sector.

#176 Russ L on 10.25.14 at 4:48 pm

Smoking Man on 10.24.14 at 7:24 pm
Got a new phone, don’t know why it’s putting in smocking, I’ve corrected it.
……………………………………..

It’s a smart-phone. ‘ knows the “S” is silent.

#177 Godth on 10.25.14 at 4:49 pm

#168 Retired Boomer – WI

How do you define yours?

That’s the question, along with how is it being defined for us? I define mine as loosely and changeably as possible.

You’ll note that those are questions that Heinz asks in the documentary above (one of my favourites).

It seems that we’ve led ourselves into a hall of mirrors that’s a dead end. Waiting for the the technological Jesus to save us before finite limits are imposed.

The whimper can already be heard. There may be a bang yet though.

#178 kommykim on 10.25.14 at 5:52 pm

RE: #126 Mr Right on 10.25.14 at 10:20 am
Kommy 104….dude where have u bin?

My point was they are now advertising weekly instead of monthly payments to make cars appear cheaper to the average dumbass. What’s next? Daily payments?
Some dealers here DO still quote the cash price in small print along with the “cash incentive” in 200pt font.

The only thing I’ve ever bought on “credit” was my house in 1992.

#179 Retired Boomer - WI on 10.25.14 at 5:55 pm

#176 Godth

About halfway through the documentary… very interesting, and good!! Thanx

I’ll probably have to revisit parts 3-4-5 times to understand more thorough….maybe??

#180 bigtown on 10.25.14 at 6:07 pm

I leased a Ford Focus for under three years and paid close to $10,000 in all when I returned the car in very good condition with low miles..that was a real bad deal as I could have bought the same Focus and kept it for another three years. Lesson learned.

So I studied the best used car to buy back in 2008 was the Ford TAURUS BASICALLY most folks hated the Taurus and I bought my 2008 Ford Taurus for $3,600 taxes included and it still runs nice.

Now you need to study the car market closely to know which used car to buy and for how much. Always a good idea to buy the ugly duckling most folks hate with a passion but runs good and be ready to hound the used car dealer to death so you don’t overpay.

#181 Setting the Record Straight on 10.25.14 at 6:12 pm

http://www.zerohedge.com/news/2014-10-25/deutsche-bank-lawyer-and-former-sec-enforcement-attorney-found-dead-apparent-suicide

#182 Gottlieb Stanbly on 10.25.14 at 6:26 pm

Eat cheese and watch the Packers – you’ll do fine. Doesn’t take much to live on with that strategy.

#183 TurnerNation on 10.25.14 at 6:37 pm

Lately, this comments section is as much fun as visiting a gas station washroom.

#184 Son of Ponzi on 10.25.14 at 6:44 pm

I’d still drive my Pinto had it not been rear ended and exploded while parking on the street.
Or I could have given it to our military helping them fight ISIS.
Strikes terror into the heart of the enemy anytime.

#185 Cato the Elder on 10.25.14 at 6:51 pm

Re: #169 Casual Observer

See, I don’t think things need to be complicated. They get complicated only when human emotion gets involved and the law is applied unequally. It is often applied unequally because someone has an emotionally vested interest in seeing something succeed that should die, whether it be due to an inner attachment to see it succeed or some form of indirect bribery.

It SHOULD be black and white. Run a business, if it succeeds, you keep the profits. If it fails, you lose the money. No bailouts. This is where the problem arises – big business lobbies the government to privatize their gains, and socialize their losses on the taxpayer (CMHC anyone?).

I believe low taxes should apply across the board. I don’t believe we should have a property tax at all. If you have a property tax, you never truly own your property. It can be seized from you in spite of paying for it your whole life.

Why should the rich be taxed more than anyone else?

I’m not anywhere near rich. However, I understand that wealth can’t be multiplied by dividing it. Think about that statement.

Divvying up a pie doesn’t make MORE pie.

A baker makes more pie. Business owners are bakers.

The rich got rich for a reason. They are good allocators of capital. They created jobs. They created products and services people valued. They took risks and could have LOST all their money. They OUGHT to be rewarded when they get it right because when they are right, we all benefited in one way or another.

As for how we would afford things like the military, that’s easy. The government needs to quit spending money in areas it shouldn’t be involved. Electricity production. Foreign aide. Military interventionism (this isn’t defense, it’s offense). Regulating every industry under the sun. Massive bureaucracies of every kind concerned with things like wealth redistribution.

It isn’t that difficult. Decades ago none of this existed. There was a much more robust, wealthier middle class. I am young, but I have personally witnessed the damage these policies have caused. My great grandparents had 1 working father and 6 kids, no debt. My grand parents had 1 working father and 3 kids, no debt, early retirement from pension plan. My parents both HAVE to work, self-defined pension plan, will retire later in life. I am struggling to get by myself despite being financially prudent in spite of good performance at work (who the hell can afford a house today fresh out of university? Other than greater fools, I mean?).

This is the consequence of poor government policy and a loose monetary policy in concert. All industries closely tied to debt are booming (banking, real estate, home building) while the rest suffer (manufacturing, etc.).

Now, we must bear in mind that things like privatization and spending cuts MUST accompany MASSIVE reductions in regulations.

If you privatize an industry like electricity, but you keep the massive regulations in place that prevent competition, prices WILL spike and quality will suffer.

Free entry into markets without government created barriers to entry must be allowed. If there is anything I would fix today, this would be it. Governments shouldn’t be the bouncers for big business, blocking entry for small businesses that want to lower prices or bring better products to market.

Look at what happened when Wind Mobile came to Canada. Does anyone remember the disgusting treatment we were getting from the big telecoms before someone came in to shake things up? And it took YEARS for them to get in because the CRTC was blocking them – all thanks to big telecom lobbying!

Now there’s a wide array of plans available, and prices have come down and quality has gone up. Competition is good. Free markets are good. Capitalism is good.

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

On a side note, I saw Justin Trudeau’s speech about the attacks in Ottawa. First time I’ve seen him speak. I normally ignore politicians because they always say the same things.

However, I must say I was quite happy to hear him indirectly emphasizing that this should not be used as a justification to reduce the civil liberties of all Canadians.

What a shame that people like Harper can’t do the same. It should be an equally cherished value for all parties that our civil liberties are important.

I’ve heard a saying that politicians are just like diapers, they should be changed frequently, and for the same reason. Despite not agreeing with either of them, might be time to change the diaper, just so all these years of power don’t go to his head.

#186 omg the original on 10.25.14 at 6:54 pm

#35 Mark on 10.24.14 at 6:58 pm
“You really think there will be any political appetite to expand the CMHC’s liability when the CMHC is incurring huge losses due to the housing downturn? LOL!”
——–

Absolutely. If there are more votes to be gained by bringing back 40 year mortgages then there are to be lost it would happen. But that presupposes trouble in housing in Canada and that won’t happen until interest rates go up in a meaningful way (I said meaningful).

#187 Retired Boomer - WI on 10.25.14 at 7:04 pm

#176 Godth

FINISHED THE DOCUMENTARY. INTERESTING!

I would say between government, and Madison Ave ‘they’ have been doing their best to define our realities for us.

With most people ‘seeing’ 6-8 thousand advertising impressions daily, how does it not? School does this as well, with the expectations. Technology has herded many of late, where do I start there?

Great Expectations? The reality of when, where, how we live in our respective spheres is not identical, nor should it ever be. Control, is still largely in our hands.

The data mining is making it far easier to predict the trajectories of many, regardless of age, or generational difference. The common denominator here is the current generation of technology. Next gen is tomorrow. The technology can measure, but finite limits are as defined -finite limits! OOPS!

#188 Mark on 10.25.14 at 7:08 pm

“What was a fleamkt and a patch of industrial wasteland is now a fleamarket, the biggest Benz shop you have ever seen, a big new porsche dealer, and a third unknown (but high end for sure) under construction. Mercedes has also just built a huge new facility at bdw/bndry a gigantic new shop in richmond. Sales must really suck!”

And malinvestment has never, ever, ever happened in the history of the Earth? Perhaps the inhabitants of Richmond are generally smart enough to realize that housing is a bubble, and are extracting as much equity as possible (by way of credit) to enjoy consumption before the hammer slams down on the market and renders half of the lower mainland bankrupt.

BTW, every time I talk to people who actually live in Germany, they’re astonished that North Americans actually view Mercedes as a sort of ‘luxury’ brand. Or even buy BMW’s period. They’re just run-of-the-mill brands in Germany, nothing special.

#189 Son of Ponzi on 10.25.14 at 7:17 pm

For those too busy to read the whole Der Spiegel article,
here are two excerpts:
“We have a financialized, central-bank dominated casino” says David Stockman
“Harvard economist Larry Katz that US society no resembles a deformed and unstable apartment building:
The penthouse oon top is getting bigger, the lower levels are overcrowded and the middle is full of empty apartments. And the elevator has stopped working.”

http://www.spiegel.de/international/business/capitalism-in-crisis-amid-slow-growth-and-growing-inequality-a-998598.html

#190 Mark on 10.25.14 at 7:17 pm

“Absolutely. If there are more votes to be gained by bringing back 40 year mortgages then there are to be lost it would happen. But that presupposes trouble in housing in Canada and that won’t happen until interest rates go up in a meaningful way (I said meaningful).”

There already is trouble in Canadian housing, as prices have spent the past year and a half in decline. Interest rates have actually declined. So it did not take meaningful increases in interest rates to create trouble. All that was required was tightening of subprime credit at the CMHC, and demand exhaustion.

#191 Son of Ponzi on 10.25.14 at 7:23 pm

#187
BTW, every time I talk to people who actually live in Germany, they’re astonished that North Americans actually view Mercedes as a sort of ‘luxury’ brand. Or even buy BMW’s period. They’re just run-of-the-mill brands in Germany, nothing special.
——–
Pretty much all taxis are Benzes.

#192 Godth on 10.25.14 at 7:38 pm

#186 Retired Boomer – WI

Just another species that learned to exploit it’s environment… for a time. It’s one thing to build complex structures and systems, it’s another to maintain them.

EROI
Energy Economics
http://www.peakprosperity.com/blog/88380/energy-economics-crash-course-chapter-19

Expect less…and less…and less.

#193 Daisy Mae on 10.25.14 at 8:12 pm

#120 Waiting: Re ‘new car smell’….not too smart. There are health hazards:

“A two-year study released in 2001 by the CSIRO in Australia found several health problems associated with these chemicals. CSIRO research scientist, Dr Stephen Brown, reported anecdotal accounts of disorientation, headache, and irritation in some drivers of new cars. He measured pollutant levels in new cars that were sufficient to cause similar effects within minutes in controlled experiments by other researchers. Chemicals found in the cars included the carcinogen benzene, two other possible carcinogens cyclohexanone and styrene, and several other toxic chemicals.”

#194 -=jwk=- on 10.25.14 at 8:28 pm

The car in the pic *is* a Hyundai, specifically a Genesis Coupe…

#195 Casual Observer on 10.25.14 at 8:28 pm

#184 Cato the Elder

The rich got rich for a reason. They are good allocators of capital. They created jobs. They created products and services people valued… They OUGHT to be rewarded…

I agree with 90% of what you said, but it’s generalizations like this that make it difficult to agree 100%.

There are plenty of ways to get rich without providing some greater good to society. What about pimps, drug dealers, and those bankers who finance wars that you mentioned earlier? Certainly they should not be rewarded for their destructive influence on society.

What about those that inherited their wealth? What about wealth from a company whose practices included using forced child slave labour? My point is (and was) that things are not always black and white, no matter how much we would like them to be.

I don’t believe we should have a property tax at all. If you have a property tax, you never truly own your property. It can be seized from you in spite of paying for it your whole life.

A nice idea, but how do things like street lights, road maintenance, police, fire protection, etc. get paid for? The money has to come from somewhere.

Decades ago none of this existed. There was a much more robust, wealthier middle class.

Throughout history, there has typically been only two classes of people. The ruling classes and the peasants. The middle class that existed during the 1950’s, 60’s and 70’s was more of an exception than the norm.

The middle class flourished mostly because of relatively high paying low-skilled manufacturing jobs that no longer exist. These jobs disappeared in part because of companies relocating their manufacturing operations to countries with cheaper labour.

We still have a middle class, but to be part of it, one usually requires some higher degree of marketable skills.

You are correct when you say that free markets, competition, and capitalism typically bring about lower prices, but the side effect is the loss of high paying, low-skilled manufacturing jobs.

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

You said that you were young. To me, age is irrelevant. I’ve met many young people who have a better head on their shoulders than some people my age, or even older. I respect all, and try to value them on their character and actions.

I’m encouraged to see that, as a young person, you seem to care deeply about what happens to the fabric of this great country we live in. Don’t let anything I or anyone else says, discourage you from voicing your opinions.

#196 };-) aka Devil's Advocate on 10.25.14 at 8:48 pm

#136 Karl Hungus on 10.25.14 at 11:17 am
Leasing is for chumps. Rent a depreciating asset? What, for the rest of your life? Lets say you own a vehicle for 20 years, you can pay it off in 5, but your suggesting to have payments for the full 20 because you lease. And the payments are usually the same. Rarely makes sense to lease.

When you lease you pay interest (opportunity cost) and depreciation. Depreciation is given.

I need a good reliable vehicle for my business. Leasing makes sense for me. It’s a business expense just like my cell phone, my office, my stationary etc, etc.

A 10 year old Hyundai just doesn’t cut it, nor does a 10 year old BMW.

#139 liquidincalgary on 10.25.14 at 11:22 am
#116 };-) aka Devil’s Advocate
==========================================
you completely missed the point of the above exchange

I don’t think so

#197 Son of Ponzi on 10.25.14 at 9:08 pm

#194
Throughout history, there has typically been only two classes of people. The ruling classes and the peasants. The middle class that existed during the 1950’s, 60’s and 70’s was more of an exception than the norm.
—————-
I think you mean Anglosaxon history.
The German Mittelstand has been around since the middle ages. And it’s still the backbone of the German economy.

#198 Casual Observer on 10.25.14 at 9:41 pm

The German Mittelstand has been around since the middle ages. And it’s still the backbone of the German economy.

Seems like North American companies could stand to learn a few things from German companies.

#199 AB Boxster on 10.25.14 at 10:25 pm

#194 Casual observer

I disagree,

About 90% of what CATO says is nonsense.
His comments are like listening to a religious fanatic.

All they do is spouts dogma, chapter and verse with no thought to the realities of the world.
Capitalists good.
Taxes bad.
Government evil.

He always was a lot to ‘write’ but very little to ‘say’.

#200 Retired Boomer - WI on 10.25.14 at 10:26 pm

#191 Godth

Quite true. That’s part of the reason I live where I do.
Lots of relatively clean water, good ground, adequate fuel sources for winter heat. Not easily accessible to the out of towers. What you might call ‘Urban Amish’ for lack of a better modifier.
Climate, population, war can / will upset the dynamic as fast, or faster than the loss of cheap energy.
We are a long way from the stone age and have yet to run out of stone.

#201 Son of Ponzi on 10.25.14 at 10:36 pm

#197 Casual Observer on 10.25.14 at 9:41 pm
The German Mittelstand has been around since the middle ages. And it’s still the backbone of the German economy.
———–
Seems like North American companies could stand to learn a few things from German companies.
————-
First step would be copy their Apprenticeship program, which means training young vocational students until they are masters in their trade.
Unfortunately, I don’t think it will happen here, because our focus is short term.

#202 Freedom First on 10.25.14 at 10:56 pm

Talked to a friend yesterday who is working in the oil @ gas industry in Alberta for years. Said the layoffs have started, as well as in the related industries and trades, and, the affected people/industries have been told there is more coming right away. He said people are nervous, and him being only 40 with 2 young kids, this includes him.

For myself, I drive a 2005 Toyota echo, loaded, with 87,000 kms. on it. Leased it for 3 years, and paid the $8,000 cash at the end of the lease to keep it, as I like it. Great car. I use transit, 5 minutes from the train, cycle, and walk/ backpack. I agree with Garth, and I don’t walk much in the winter. A car for me is merely transportation, and I do nothing to try to impress anyone, to the contrary I prefer a low profile. I live very well and am content. I buy new, as I can afford it, and I want nothing to do with the used car market. If not financed, over the lifetime of my new economic vehicles, the average $$$$ cost per year is hard to beat.

#203 45north on 10.25.14 at 11:02 pm

Instead of shoveling over thirty grand for a soul-sucking minivan, they’d be far better of stuffing that money into their TFSA and investing it, and letting the dealer or the bank give them the car. After all, in ten years the TFSA money should double to $60,000. The minivan will be worth (maybe) ten thousand.

Drill Baby Drill : you are being truly nice today. The value of that minivan after 10yrs maybe 2K if there are 4 new tires and no too much Alabama chrome (duct tape).

Alabama chrome : pretty funny

my heroine Elizabeth Warren talks about the extra costs of today’s family. One of the big extra costs is having two cars instead of one.

Garth talked about Darwin the other day. I take this to mean does your family survive or not. I’m afraid with what’s coming up, families with two cars will not survive. I mean lots of families will not survive.

Waterloo Resident : you will find that the 6 year cost of buying a 6 year used car (to make it last up to 12 years) will actually be MORE than the cost of buying a brand new car and spending only a small amount of maintenance on it. That plus the hassles of frequent break-downs on the side of the road make used cars a no-no these days.

I found the 10 year cost of buying a car two years old to be more than buying new.

#204 Kenchie on 10.25.14 at 11:14 pm

FYI, Russell Brand’s rant on Harper’s speech.

https://www.youtube.com/watch?v=ALEaAAU3KAE

#205 Kenchie on 10.25.14 at 11:19 pm

#87 RealistvsExtremist on 10.24.14 at 10:49 pm

The aforementioned Rothschild tale I read many years ago. Interesting, but highly dubious.

http://www.iamthewitness.com/DarylBradfordSmith_Rothschild.htm

#206 45north on 10.25.14 at 11:24 pm

Cato the Elder : Switzerland, Switzerland, Switzerland. Cato, you don’t know German, French or Italian. I donno, maybe you could get a job as a cook. What I’m saying is that maybe there’s more to Switzerland than your simple explanation.

What about other countries that were neutral? Like the Ottoman Empire or the United States at the start of World War I? True they didn’t have your guiding principles or overarching intellect but why not? What I’m saying is that intellectual prowess is fairly common, what is difficult is actual power.

#207 Kenchie on 10.25.14 at 11:26 pm

#92 Raging Ranter on 10.24.14 at 11:39 pm
“@ Kenchie, thanks for correcting at least one of Cato’s more egregious errors (he’s made several). His bilious ramblings, written in his distinctly know-it-all style, were getting tiresome. The supercilious tone with which he delivers his alleged wisdom would be tolerable were it backed up by actual content in his posts. But it isn’t.”

We all have to stand up to intellectual laziness. Thanks.

#208 Habs76-79 on 10.25.14 at 11:27 pm

#196 Devils advocate.

A 10 year old Hyundai just doesn’t cut it, nor does a 10 year old BMW.

———————————-

Take either a 10 year old Hyundai, BMW, Lexus, Chevy,Ford, Ram Pickups or what have you brand out and about. Randomly pull aside 100 everyday folks and ask to see if they can properly age these vehicles. Probably 95 or more would not be able to tell you that these vehicles are 10 years old based on a visual look over.

Quite simply the status of car, suv or truck ownership has little to do with the ability to operate a successful business or to be more professional in any line of work or career. As long as the car be it new, not so new or even rather old is not BEAT TO HELL and or RUSTED OUT! If the owners of these vehicle regardless of age take proper mechanical care of them and care of keeping clean the insides and outsides, NOBODY THAT ONE WOULD DO BUSINESS WITH LIKELY GIVES A $HIT NOR REALLY NOTICES THAT YOUR CAR IS 5-10-15-20+ YEARS OLD!

It’s all in the owners of these cars own HEADS this feeling of a need for a status pumping jerk off effect. It can be a rather expensive jerk off effect of self avowed status pumping.

Those whom you think you are impressing with your fancy new car, fancy and likely quite fake looking house, big home theatre, granite counter topped kitchen or Italian marbled bathroom (aka a $hitter hole) in reality do not care too much and they are probably themselves trying to impress and rub your nose in their own status pumping crap. IT’S A RATHER SUBLIME CIRCLE JERK!

It’s also quite pathetic and a waste of one’s own limited time of life.

#209 will on 10.25.14 at 11:28 pm

are there any conservatives left? besides those who come to this blog?

#210 Kenchie on 10.25.14 at 11:28 pm

#102 gladiator on 10.25.14 at 12:53 am
“Cato, you’ve got a faithful follower here – me.”

Epic example of blind leading the blind. Watch out for cliffs.

#211 espressobob on 10.25.14 at 11:29 pm

Thank God for bourbon!

#212 Habs76-79 on 10.25.14 at 11:57 pm

To add to my previous post. I’m not saying that people should live subsistence and bland lives. I’m not saying that we all should drive the same beaters. I’m not saying that we all should live in former Soviet style apartment buildings. I’m saying that if you wish to acquire a nice thing or things, do it for your own pleasure, satisfaction and only if you can truly justify the cost of purchase and the future costs of ownership of these things.

If you are a gal and you love Jimmy Choo high heel shoes or boots, BUY A PAIR OR TWO! As long as you can afford to and you do not deprive yourself or if you have a family of a necessity. If you are a guy and you like big truck or fancy imported car BUY IT! If you can financially justify the costs including future costs of owning such.

Do not buy anything of value to try to impress others. THEY REALLY DON’T CARE TOO MUCH!

#213 Joseph R. on 10.25.14 at 11:58 pm

#195 Casual observer

Throughout history, there has typically been only two classes of people. The ruling classes and the peasants. The middle class that existed during the 1950’s, 60’s and 70’s was more of an exception than the norm.

———————————–

You forgot to mention the Clergy: The educated, holder of knowledge and teachers.

The Middle Ages were a love triangle between the Royalty, the Commoners and the Clergy. The Middle Ages ended with the Age of Enlightenment which separated the educated men from the clergy and gave rise to the “Petite Bourgeoisie”; made up of merchants, lawyers and doctors. They were the first Middle Class” That new class would know challenge the power of the Royals (The English Civil War, the US Declaration of Independence, and the French Revolution).

The modern “Middle Class” is born from the WW2 and is a result of the economic boom and the rise of the Nuclear Family

#214 Teacher's Ass-istant on 10.26.14 at 12:05 am

“#183 TurnerNation on 10.25.14 at 6:37 pm
Lately, this comments section is as much fun as visiting a gas station washroom.”

Excellent way to put it. Do you think perhaps some of these people may have stumbled upon this blog after being uninvited from others for their long winded, off topic, nonsensical diatribes? Just a theory.

#215 Kenchie on 10.26.14 at 12:11 am

#93 Cato the Elder on 10.24.14 at 11:44 pm
“Re: #83 Retired Boomer

Ford is making rational business decisions. They will build wherever it is most profitable for them to build.”
—————
First you rail against crony capitalism, of which lobbying by firms is a main tenet, but then you blame the lobbying on govenment rather than the transgressors (firms). Sounds like you can’t make up your mind.

Then you ignore the fact that the Federal and Provincial governments both declined the request for subsidies for the engine plant (RIGHTLY SO!).
http://www.cbc.ca/news/canada/windsor/ford-picks-mexico-over-windsor-for-engine-plant-union-says-1.2811843
——————-
“There should be a level playing field allowing everyone to compete equally and without so many restrictions on what they can do.”

Only way to achieve that is to (forcibly) stop other countries from offering subsidies for companies to invest there. Mexico has been very generous over the past decade to become as welcoming as possible to large manufacturers because they have entirely too many disenfranchised adult males who turn to working for the drug cartels. In other words, this whole situation is just another form of competition.
—————–
“Now, on the dollar side. Having a weak dollar is bad for manufacturers. It’s bad because it increases the cost of raw materials….”

Regarding this rant portion, how is the Mexican peso any better than the Canadian dollar? It’s not.
——————–
“This unstable environment makes long term planning like plant and machinery upgrades difficult to calculate in terms of ROI, so they generally avoid it. THAT’S why middle class jobs are disappearing – businesses can’t make long term decisions in terms of investments, and that includes investing in quality workers.”

You’re delirious if you think Mexico is a more stable environment than across the river from Ford’s global HQ. Also, there are many multiple reasons why middle class jobs in manufacturing in Canada is moving elsewhere. Don’t focus on only one, it presents a very biased view.
——————————–
“But that still bears large costs for the industry in terms of lawyers, accountants, etc. that have to ensure compliance with such a complicated tax code. These are unproductive jobs that don’t lead to an increase in the standard of living of Canadians – regulatory compliance has a huge parasitic effect on wealth because it’s wasteful.”

Ford has previously put out a product that kills people very easily due to shoddy engineering (Read Ford Pinto history). Class-action lawsuits sometimes do bankrupt companies. As a shareholder, I would rather them spend a pittance of shareholder’s capital making sure they have the best damn legal representation in the US (i.e. they are acting in my interest). And investing in a good accountant pays many dividends over the long-run (i.e. they are acting in my interest). Productivity doesn’t just mean producing goods at a certain rate per hour, you know.

PS: Looks like you take the cake when it comes to writing the most on Garth’s blog.

#216 buddy beerbarrel on 10.26.14 at 12:17 am

Mark #133…a snippet from Wiki

“The E30’s introductory price was nearly double that of the E21 just seven years earlier.”

…there’s a lot more than 2% inflation and a few crappy electrical gadgets going on in car pricing. Monthly pmts instead of purchasing have allowed car sellers to gouge naive and debt encumbered consumers.

#217 Kenchie on 10.26.14 at 12:40 am

#93 Cato the Elder on 10.24.14 at 11:44 pm
“Re: #83 Retired Boomer

“One thing I can see happening possibly is a massive bailout coming from China. Of course, those bailouts will come with conditions.”

You really don’t know much about China, eh? I guess you never heard that they have population that is growing older before it will reach Western levels of standard of living. (Guess you didn’t read the article I posted regarding the “Perils of Deindustrialization” – which is underway in China already, at a GDP per capita level 1/4th that of the US). Their working age population is already shrinking by the millions per year…

http://www.economist.com/news/china/21570750-first-two-articles-about-impact-chinas-one-child-policy-we-look-shrinking

http://blogs.wsj.com/chinarealtime/2014/01/21/chinas-working-population-fell-again-in-2013/

http://www.cnbc.com/id/101349829

“Conditions like ‘sure, we’ll take care of your old people, but we get to run your country.”

The only thing, IMO, that will guarantee war between the US and China is that China will have to increase their social safety net, specifically pensions, in order to get people to consume more to replace exports and maintain the same size economy. This safety net will cost trillions of yuans a year and divert resources away from their military build-up.

“I think if that happens, no one would even object because they’d be afraid at the state of the economy.”

Maybe you are “afraid”, but not I. By definition, the economy adjusts over time to deal with problems. The economy today doesn’t resemble what it was 20 years ago (pre-widespread internet) and even less than previous decades before. Why would you expect this process of evolution to stop creating new opportunities for entrepreneurs in the future?

“I hate to say it, but people are selfish.”

You, perhaps, are the most selfish person on this blog. You rants are mostly about what you want. You rarely ever consider what other people want. In fact, you mentioned to Millennial Falcon (I believe) that you wish he didn’t have a vote because he doesn’t see eye-to-eye with you.

“Because older people make up the majority of the population, and they want security in their final years, they won’t care about selling out us young folk.”

As a “libertarian”, why would you rail against others acting in their own self-interest? Why should they feel a need to give “us young folk” anything? That sounds like you are advocating for their charity… Maybe you just don’t have the mental capacity to compute how your “beliefs” act in reality with what you want to think happens in reality.

#218 Kenchie on 10.26.14 at 1:34 am

#197 Son of Ponzi on 10.25.14 at 9:08 pm
“#194
Throughout history, there has typically been only two classes of people. The ruling classes and the peasants. The middle class that existed during the 1950’s, 60’s and 70’s was more of an exception than the norm.
—————-
I think you mean Anglosaxon history.
The German Mittelstand has been around since the middle ages. And it’s still the backbone of the German economy.”

The concept of the Mittelstand has been around for a long time, but doesn’t mean the wages for people who worked there developed a “middle-class” as we know it.

The Principalities that made up the Holy Roman Empire were not, by any stretch, beacons of economic development. The industrialization of Germany only kicked into high gear after the Napoleonic wars when Prussia was awarded the Rhineland-Westphalia and large sections of Saxony, which allowed it to have access to large deposits of coal and iron ore and made it by far the strongest German state. “Junkers” were still very powerful in Prussian society until the late 19th century.

And it was only after the Franco-Prussian war that all of Germany was unified, which allowed for the coordination larger amounts of resources and population to compete directly with the UK in industrial production and prosperity for its citizens. 40 years later, Germany was neck-and-neck, if not more industrialized than the UK (which gave it too much confidence, of course). That period coincided with Japan’s industrialization. Japan, starting from a lower level, had the fastest industrialization in the history of the world (only to be eclipsed by China over the past 35 years), and Germany came a close second at the time, which is a remarkable feat.

The point is the Germanic people did not independently create a middle-class before the Anglosaxon countries, and therefore Casual Observer is correct.

#219 bdy sktrn on 10.26.14 at 1:36 am

#191 Son of Ponzi on 10.25.14 at 7:23 pm
#187
They’re just run-of-the-mill brands in Germany, nothing special.
——–
Pretty much all taxis are Benzes.
——————————————–

not sure how it is today, but the only taxi in frankfurt i remember being in was a benz, it was exactly 25yrs ago.

it was radically different from the cars shipped here. bare bones to the extreme, comfort /ride(subjective)/noise levels well below my old man’s big gm lux-o-boats of the day.

a few days later berlin Wall was opened, we immed left from amsterdam to see it, we seemed to be the first and only westerners walking around a the most surreal huge empty city. big stone and big streets but maybe 3 or 4 lada type old beaters instead on 200-300cars that there was room for. almost no people either. had lunch and beer for a couple american nickels – it was weird.

a complete and total failure of an advanced socialist economy. – score one for the young elder.

#220 bdy sktrn on 10.26.14 at 3:02 am

here’s a story of a tax which illustrates everything one person may say about evils/wastefulness/sickness of too much government.

,,,,,,

low tax rates are only for essentials, it’s the ‘sin’ -type products that can justifiably rake it in, right?

make too much salary? – pay up here.
dirty smelly alcoholics and smokers?, make’em pay hard
monster trucker gas wasters? cough it up boys canadian people who are not bears or moose and need to heat their houses or die in the winter? damn you – double,no, triple tax I say!

out here in BC natural gas heats many(most?) houses and keeps most of us from freezing (not quite rock solid, but stiff and dead nontheless) in the winter. we have lots of gas here and get it relatively cheap, until the government cash furnace gets fueled, that is.

i kid you not , this is quoted from my current bill

“cost of gas 3.781/GJ” – taxed at gst rate
“carbon tax 1.4898/GJ” – also taxed at gst rate

39.4% – or – 41.4% with gst on the carbon tax part only.

41.4% EXTRA tax on the cost of gas for home heating , plus, of course gst on the original amount, from a right-wing low tax government. (a total of 46.1% but by now, who’s counting?)- we need more catos less public slugants.

to be fair it did just jump from the 31-32% range where it had been for a while. (fun fixed tax/GJ means when the cost/GJ drops the effective tax rate rises)

what other essential life sustaining product do you pay 46 % tax on?

the greenies were begging to get the shaft on this one and the govt doesn’t have to be asked twice to get a bigger sponge. (they brought the big shaft)

***including ‘midstream’ and ‘delivery’ charges which are above the ‘cost of gas’ , and are legitimate costs on the bill the rates drops way down to 18%carbon and5% for a low, low 23% tax rate

today over 1B/year of carbon tax is collected with exactly zero benefit to the polar bears, citizens or sea levels.

Nobody can piss it away like a government body.

#221 bdy sktrn on 10.26.14 at 3:37 am

By the way , if you are going to use the word “uppa” coined by a long time original poster , Bigrider, than give him credit where credit is due.
————————-
my apologies.

i mistakenly thought that the protected term was “uppa uppa uppa!” (tm Bigrider) :)

#222 jane24 on 10.26.14 at 4:04 am

… and in England most police cars are either BMWs or Menzes. Both makes are regular family cars, priced about 15% over Ford and the same as Toyota.

The amount of money that my fellow Canadians will pay for anything is staggering. Canada – the home of brand marketing.

#223 bdy sktrn on 10.26.14 at 4:06 am

#196 };-) aka Devil’s Advocate
I need a good reliable vehicle for my business. …
A 10 year old Hyundai just doesn’t cut it, nor does a 10 year old BMW.

——————————–
i have a 20 yr old SUV loaded leather etc that i just bought for about 3 days gross pay. is it reliable? i’m failrly certain it’s good for about 100-150k more with no major costs (bigger than a set of tires). that will last me 10+ years. When the MIL got in the back she asked if the smooth supple leather seats had ever been sat in before.
i see 20 or 30 round trips from bc to southern california in it’s future.

it has all the options listed by the earlier young fellow, less bluetooth and a back up cam. i put in a new bluetooth stereo for 110, and if i really sucked at backing up i could add a cam for about the same.

still under 3k and i’m good for 10-12 years with the odd evening exercising a few of my wrenches (it’s therapeutic to me)

and if by some small chance, that in 5 or 7 years a serious engine/trans failure happens, i can just replace the whole vehicle on the spot with pocket money.

you kids keep buying at the dealer though, god knows the economy needs the help.

#224 Crossboardershopper on 10.26.14 at 5:53 am

DELETED

#225 palebird on 10.26.14 at 6:13 am

#87
There are Mercedes and then there are Mercedes. Daimler is a huge company and sells vehicles all over the world. The big expensive powerful fast Mercedes are used by the very wealthy in Germany. Most of the stuff they sell in NA does not fall into that class. And yes Mercedes are used throughout Europe, the middle east and parts of Africa as well as other places as taxi’s. And very good taxi’s they are.

#226 };-) aka Devil's Advocate on 10.26.14 at 9:11 am

#208 Habs76-79 on 10.25.14 at 11:27 pm
#223 bdy sktrn>/b> on 10.26.14 at 4:06 am

Believe me, it’s not about trying to impress. A typical 10 year old vehicle will have 200,000K on it given a typical 20,000K per years use. I have not found ANY manufactures model that does not start to give problems at 200,000K.

My vehicle is a business tool and I require a reliable one. In the long run, be it a BMW or a Chevrolet, I have found they all cost relatively the same whether you buy it or lease it. And they all cost the relatively the same amount to repair. But a BMW is a lot more “fun” to drive.

On a side, the selection of what type of vehicle to drive in my business(real estate) is a delicate balancing act. You don’t want to appear too much one way or the other. But I have found that clients, by and large, are more receptive to their agent showing up in a newer clean BMW than and older beat up Hyundai.

Again it’s a business expense. You’d be surprised to see my personal off work driver which is something quite different. And I do agree, far too many place way too much emphasis of the status of what one drives. I have had many show up to view a property in an expensive set of wheels only to be turned down by the bank because they don’t qualify due to their excessive debt service ratio.

#227 liquidincalgary on 10.26.14 at 9:37 am

DA says:

A 10 year old Hyundai just doesn’t cut it, nor does a 10 year old BMW.

#139 liquidincalgary on 10.25.14 at 11:22 am
#116 };-) aka Devil’s Advocate
==========================================
you completely missed the point of the above exchange

I don’t think so

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

all hat, no cattle, eh?

typical salesman

#228 Dm in c on 10.26.14 at 9:57 am

Today, on the Cato and Kenchie show……..

#229 Funny that on 10.26.14 at 10:34 am

#183 TurnerNation on 10.25.14 at 6:37 pm
Lately, this comments section is as much fun as visiting a gas station washroom.
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Are you refering to Mark, Kenchie and Cato

#230 jess on 10.26.14 at 12:26 pm

The Cologne public prosecutor is investigating 30 people for involvement in what are called ‘Cum-Ex’ deals. Perpetrators exploit a quirk in the system that allows them to claim twice as much in tax rebates as should be allowed.

The trick works when shares are borrowed from the owner just before the dividend payout is due. Both the owner and borrower receive confirmation that the dividend has been paid, minus a withholding tax that can be reclaimed.

This allows both parties to claim back withholding tax despite only one dividend payment having actually been made.

http://www.swissinfo.ch/eng/swiss-help-germans-with-tax-evasion-raids-at-sarasin/41078438

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the “framework”

…”Justice Department’s largest criminal antitrust probe ever, and it’s not over.

The investigation was made public four years ago with FBI raids in the Detroit area.

http://economictimes.indiatimes.com/etvertical_taglist.cms?query=price%20fixing

http://cartelcapers.com/blog/auto-part-investigation-shifts-gears/

The case marks a turning point for criminal antitrust enforcement by the Department of Justice (DoJ) since Pisciotti is the first foreign national to be extradited on price-fixing charges.

#231 Cato the Elder on 10.26.14 at 4:47 pm

Re: #206 45North

A neutrality policy isn’t really a neutrality policy if you aren’t practicing it. Nations can proclaim whatever they want, it’s how they act that counts.

The US was largely neutral at the start of both world wars. They got extremely wealthy providing all sides with goods while others were being stupid and blowing themselves up. This kept their citizenry safe and prosperous. What more could you want from a government?

However, interventionist presidents that were being hounded by special interests gradually took a side. In spite of proclamations to the contrary, the cargo of the Lusitania was found to be sending huge amounts of armaments to Britain. This, in contravention to earlier warnings from the Germans to desist.

Also, prior to Pearl Harbor, the US put an embargo on Japan, thus cutting her off from vital supplies. This embargo served as a catalyst for the more militant members of Japan’s government to justify an attack.

If the US had truly stayed neutral, there would have been no embargoes, and no favorable trade to any particular side. This is a FAILURE of neutrality.

Switzerland is a good example of neutrality. Although recently, the US has been bullying the hell out of them with unjustifiably massive fines being levied against their banks. We’ll see where that leads and if their country’s institutions are strong enough to resist – ours certainly isn’t – ergo our involvement in Ukraine and now Syria.