Well, sometimes the Goddess of Juxtaposition is too awesome to ignore. Like Monday. Whew.
Those little Saudi devils decided to cut the cost of crude oil being shipped to US customers as a way of ensuring Arabia’s market share isn’t sucked away. North American oil output is soaring these days, thanks in part to all that fracking going on in the Northwest, and this was a pre-emptive strike to keep the dollars flowing east.
As a result, West Texas Intermediate oil plunged to the lowest level in more than two years, with futures tumbling two-and-a-half per cent on the day, taking a barrel of crude down to just above $78 US. Yikes. That’s 24% plunge since the summer, when a pot if the black stuff was fetching more than a hundred bucks. (Tuesday a.m. update – oil plunged overnight to just below $76.)
Now, at the same time slumping commodities were dragging down financial markets (gold also fell, to just $1,166) the nation’s most oil-dependent real estate market was crowing over a surge in sales and prices, especially when it comes to dewey-eyed, virginal condo buyers. Last month, as crude slid and oil sands execs passed around the Imodium, Calgary house sales racked up a 10% gain over the same time last year.
The jump in condo deals was even more spectacular, at 14%. This was the sixth consecutive month of double-digit increases. Said Cowtown housing cartel boss Bill Kirk: “Tight rental market conditions combined with low mortgage rates have supported demand growth for condominium product in Calgary. Much of this demand is coming from both first-time homebuyers and investors.”
As for single-family homes, the sales gain was just under 10%, with the average price now at $552,636 – up 9% on the year. More concerning is that less than a fifth of all detached listings – 18%, to be exact – are priced below $400,000. At the end of last month, says the board, there were only 387 available for less than that number. That helps explain why more and more buyers have been pushed into condos.
Hmm. Do Calgary buyers know something the rest of us don’t, or are they just too hormonal to pay attention? Already serious cracks are appearing in the Fort Mac market, where all the real men live and work, and the latest report from Edmonton showed a monthly decline in house prices. I would imagine, with recent financial and geopolitical events that the smart money should be selling in Alberta, not buying.
After all, the big US oil boom of late has that country barrreling towards energy self-sufficiency faster than anyone imagined. The Keystone pipeline, moving our stuff to their refineries, is in serious jeopardy of ever being built. The anti-dirty oil movement is alive and well in the States, as enviro warriors make the case against tar sands crude. That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero. And, most telling of all, two dudes on my street have purchased Teslas.
So, go figure. No wonder my pal Jim Prentice (the new preem) wonders what the hell he just did.
Time will tell if Alberta once more gives us the spectacle of a boom squandered. It may end up all those Newfies and other Maritimers who flew in to bend pipes and punch holes, sending their fat wages back home, are the real winners – while Calgarians turned opportunity into debt. They do it so well.
The biggest challenge of all, though, is deflation.
The Bank of Canada’s boss, Stevie Poloz, was driving that point home in Toronto at the same time the Goddess was mocking Cowtown. He gave a speech talking about “serial disappointment” in global growth over the past six years since the financial crisis, saying the “headwinds” we face are too great for him to be worrying about a real estate bubble right now.
If I were to raise rates to stop people from being morons and indebting themselves buying assets destined to fall in value, he said (I might be paraphrasing a little), then we’d be decimating construction and the carmakers, and trashing jobs. “Such a move would of course allow these headwinds to blow us backwards,” he actually said. “From this monetary policy maker’s perspective, that’s an unattractive alternative.”
So there you have it. The condo economy expands, even as commodities weaken and our industrial base shrinks. If you think this is the time to take on debt – just because it’s cheap – meet the Goddess of Consequences.
211 comments ↓
The status quo politicians have been winning for the last few years….gotta change…
Lots of interesting banter about QE recently in the media. Many right wingers in favour; other studies showing a disproportionate benefit of QE lands with the rich.
Niall Ferguson saying it’s too early to know. He’s a well respected historian, but tends to let his opposition to Keynsian theory drift into homophobia.
http://online.wsj.com/articles/niall-ferguson-the-return-of-volatility-is-mainly-about-monetary-policy-1414191265
Oh yeah, and the Economist thinks its too early to taper it off.
http://www.economist.com/news/finance-and-economics/21629215-ending-quantitative-easing-may-be-penny-wise-pound-foolish-early-retirement
“How you expect to run with the wolves come night when you spend all day sparring with the puppies? ” – Omar Little
So people from other countries aren’t supposed to buy real estate in Canada but Canadians can do this:
http://www.theglobeandmail.com/report-on-business/video/video-canadians-dominate-floridas-foreign-real-estate-purchases/article20637205/
Wow, what a dumb discussion. Among other things, condos in Canada aren’t more expensive than condos in Florida because they’re in “urban areas” (uh, Miami?), the Quebecois probably don’t like their hangouts referred to as ghettos, and low prices in parts of the USA aren’t ridiculous — they’re realistic. More to the point, they are the aftermath of a big, overbuilt, credit-fueled asset bubble. Except if the same thing were to happen to, say, Alberta, we’re not going to see “Latins” snapping up cheap condos in Edmonton or Fort McMurray ’cause they’re not on the beach.
Construction jobs? There are very few, and less if you are self employed. It is a cutthroat world out there.
Surely Poloz knew he would be walking into a trap?
“Such a move [raising rates]would of course allow these headwinds to blow us backwards,” he actually said. “From this monetary policy maker’s perspective, that’s an unattractive alternative.”
Sorry that you’re backed into a corner, but it’s all looking unattractive at this point.
Canadians are stupid when it comes to money.
whhoooooweeeeee!
Behold the Alberta Heritage Fund:
http://www.huffingtonpost.ca/2014/06/24/alberta-heritage-savings-trust-fund_n_5526374.html
Another example of Alta. squander. Let’s fund general programs with it to subsidize the daily lives of our provincial citizens.
Then let’s look at Norway’s:
http://www.bloomberg.com/news/2014-08-20/norway-s-wealth-fund-gains-31-billion-on-global-stock-surge.html
With about a million more people than Alberta, the Norwegians have managed to put themselves on track to be sitting on a trillion dollar nest egg.
They have screwed it up a couple of times since ’74 with bad investments but since 1998 have been on track with record returns.
How can Canada keep interest rates down while US raises its own. Is it even possible?
Would there be a way to tighten demand without touching the interest rate? Like, raising the min down payment to 10% and making insurance more expensive so more people try and commit to 20%?
Oh yeah and Norway has the most Tesla’s per capita in the world. Second only to the USA in total ownership numbers.
Subsidies. You won’t see the neocons of Alta ever doing that either.
“Energy self-sufficiency”??? Give us intelligent people a break. The US still imports 7-9 million barrels per day of oil, and even dramatic expansion in the various shales, increasingly unlikely at current prices and free cash flow levels of the sector, won’t come anywhere near filling the gap.
Yes, there are some tight times ahead in Calgary, but the origin of such will be RE declines and the RE industry facing demand exhaustion. Not the oil and gas industry, whose stock values have mostly already collapsed, laying a few people off (how many Calgarians actually work in oil and gas anyways — far fewer than work in construction and related FIRE, that’s for sure!). And besides, if you listened to the SUncor conference call the other day, Suncor, at least, is committed to keeping at least some level of activity going in their expansion plans and have hived off balance sheet resources so they continue to keep the infrastructure of O&G development alive. This is *not* a 1980s scenario where it was slash and burn everywhere, that’s for sure.
The facts in this blog today are very true and valid.
But no one cares here in Alberta and Calgary. There’s simply no fear here. Adding to the fact that the government of the day is reluctant to do anything, I’m wondering if there’s still a ways to go until we see house prices decline
Great post Garth!
Is there an inverse ETF that will go up with the Canadian Home Prices declining? If there is one available, it could do really well over the next 5 years!
Supply in Calgary is artificially curtailed, as the city hasn’t been opening new land for development, concentrating on inner city density.
Until that changes, expect more of the same. When it does change, the whooshing sound of could be intense.
Commodity corrections can be a real bitch! Sector play anyone?
the future is coming…be prepared
Most of those people were very young or not alive during the last bust. Too used to the good times, problem is, it’s a problem for everyone. The ripple effect of layoffs in the patch will be felt across the land. Can’t go back to a factory job in Ontario. We can’t get the oil to the coasts and our biggest customer doesn’t need us anymore, better start diversifying this economy quick.
Think oil settles around here soon. Don’t think it can move thus late in the year. Every pop gets sold. And like it or not there might even be tax loss selling in the stocks. Who would have thought that six months ago.
As the saying goes. Commodities are for trading. Not investing.
This oil thing hurts. The Feds have been banking on it. No plan B.
Think garth might be on to something. Just looked at the tsla chart.
Just need cramer to zip it a little on baba.
Think japan is long both?
If anybody is looking for growth in their investmest assets, India is going to (as pure matter of opinion, not an advise) perform well above ones’ risk apetite(not speculative apetite). A lot of factors always bring down an investment perspective with the emerging markets, but due deligence most of the times pays and protects.
First!
The drop in the price of oil is only temporary. Will be back up over $90/barrel by year end. Saudi Arabia has to inject upwards of 70% seawater into their wells to extract the remaining oil. They have past peak. They can only “flood” the market for so long. Worldwide demand keeps rising. China and India car sale keep increasing 20%/year. Now’s a good time to buy cheap oil stocks.
FIRST!! Again.
SM, sorry to hear about your nephew and now your mom.
We miss you.
We employ a bunch of technical people in Calgary. Traditionally, it’s been impossible to find talent so we pass on projects. Lately, it’s been getting easier. Much easier in fact. I’ve got four experienced engineers in the interview process and only one of them is currently employed. Three are seriously over qualified but still interested. I wonder how many own condos?
I’m not surprised at all to see oil price drops. More people are living near the transit hubs, ditching cars altogether. Going forward, more and more people will be driving electric cars. Good luck if you own Exxon or Chevron stocks hahaha!!!
I do believe that climate change, global warming, or hormonal imbalance is quite real.
Look at your food prices, a direct reflection of drought in the US southwest. Sure, gas is under $3 a gallon (3.89 liters for the young who can’t do English measurements) but, good steak is well over $5
The north Americans could go weeks without much food as most of us carry a back pack up front that makes a Saudi Camel jealous.
Without regard, when the prices of basic foodstuffs chokes the $1 a day subsistence humans into riot / feud/ war or maybe just starvation – we might be rather powerless to assist.
As long as we can keep driving above the posted limits, and our respective governments do not tax the snot out of us for the privilege -which they SHOULD DO- if only to build the rail infrastructure to replace the car highways in my humble opinion we will keep doing the dumb ass thing and drive those fuel guzzling shitboxes! Adding a fuel tax scheme to keep the price at the consumer level stable or even slightly growing would be smart, saving tax money with few tears by the consumer, until the pricing scheme goes away. -rant over-
Poloz said:
Canada’s household debt and housing situation is “very different from what we saw in the United States just before the (2008 financial) crisis” because of a number of steps taken by the government and the banking supervisor, and because of high-quality underwriting.
———————
(This is Canada nothing but brilliant politicians and exceptional Banksters)
Critics are asking if this lengthy period of low rates is sowing the seeds of the next financial crisis.”I might ask in response: What is it you would have us do, then?” he said
How much is this guy paid ? Poloz needs your help !
I buy fruit juice from Mexico. The store ran out of supply in June. I paid $1.50 a liter. Last week they got a new shipment in. New price $2.50/liter. Inflation due to a lower dollar. Deflation in gas prices. What a mess.
Re last post: #146 Dr.DoLittle
What I find most comical of all, is the lack of a VIABLE proposal for an alternative system. Our current one obviously isn’t working very well as we are slowly becoming poorer as a nation.
Any system you propose that does not involve the exchange of goods through MUTUAL VOLUNTARY CONSENT (free markets) will require force.
Force is violence. How can anyone support such a system? Ever notice that if you don’t comply with all the taxes we pay or regulations you get SENT TO JAIL?
Nothing conspiratorial about it. Bastiat’s the Law, Adam Smith’s Wealth of Nations, and Hayek’s Road to Serfdom are among the only works our politicians need to read to understand the truth about how an economy works.
You can ignore human nature all you want and have fantastical notions about how people are, and be blinded by your own subjective belief in your own inherent goodness – but if you design an economic system around that ignorance, pain and suffering will follow.
Humans are inherently self-interested in EVERY facet of life. Some call that greed. I call that the rational behavior of an animal that wants it’s genetic material to proliferate and succeed.
Once that is accepted (which is often difficult for the pretentious), the only economic system that leads to the progress of mankind is free market capitalism combined with the individual liberty a limited government provides. That one can only acquire wealth by providing goods and services to their fellow man – in essence, HELPING them.
It is through the cumulative effects of everyone working in this system for their own self interest that society advances. It is because their individual self interest is LINKED to providing value to others, and not simply to advancing themselves at OTHERS expense.
Everyone who advocates for government interference in these matters are advocating for various degrees of tyranny. This applies to crony-capitalists and to dictatorships and all forms of government.
I don’t need your approval. The disparity in wealth accumulation amongst nations around the world PROVES what I’m saying is correct. The west adopted free market policies FIRST, and we had a MASSIVE head start. Over the past 50 years, we have had massive government involvement in our economies. Predictably, the middle class has been slowly eroded away. All that wealth that we spent centuries toiling in the fields, building industry from nothing has been sent to other countries where capital and hard work are rewarded, not punished.
It’s too bad we couldn’t establish a small tax free zone on bare ground in this country. In under a couple decades I can guarantee you that if it were properly managed, the average person working in that zone would be significantly wealthier than anywhere else in Canada. An amazing feat, given the head start every other area of the country would have over that zone. The best part is, it would provide a very simple example to people like you that freedom works.
**************
Re last post: #149 Mike S
Alberta doesn’t have to depend on oil for their economy. It’s very simple – massively slash government spending and taxes and regulations simultaneously.
Governments and politicians can’t predict nor run businesses properly. All they need to do is get out of the way and various industries and capital will pour in.
This, of course, is very difficult politically. It is difficult for politicians to recuse themselves from a problem they have created, because they have been elected to ‘fix’ it. Many of them also clamor for the credit when things go right, so they can’t defer to others for the success of the economy. Of course, they run in the opposite direction when things go wrong.
“How can Canada keep interest rates down while US raises its own. Is it even possible?”
Easy. A housing-led deflating domestic economy, while the US increasingly suffers inflation due to insufficient fixed investment and those “reserve” dollars coming back from overseas claiming US produced goods and services.
Canadian monetary policy isn’t as tightly tied to the US as you may think.
#9 OttawaMike on 11.03.14 at 7:33 pm
When you mention Norway, one more thing “smart money” is doing in the world. Just adding another perspective to my call at #21
http://www.bloomberg.com/news/2014-10-29/norway-wealth-fund-gains-2-3-billion-in-quarter-on-bond-advance.html
There are also rumors as of late, there are certain upheavals starting to take the wage scale in China upwards to the point where MNCs (Multi-National-Corporations) small and medium are looking forward to shifting to regions in India. Some have already done so.
Garth,
Oil does this every two to three years and ALWAYS pops back up.
Total buying opportunity here for Energy Funds……..
@#24 RB-WI
“The north Americans could go weeks without much food as most of us carry a back pack up front that makes a Saudi Camel jealous…..”
+++++++++++++++++++++++++++++++++++
Classic.
The only thing funnier than Garths’ comment
“as crude slid and oil sands execs passed around the Imodium,……..
Yup, as deflation takes hold the only thing that will rise will be the cost of fresh California produce…..
We can’t get the oil to the coasts and our biggest customer doesn’t need us anymore, better start diversifying this economy quick
Our ‘biggest customer’ buys, and will continue to buy as much as we can possibly produce, oil-wise, and actually ship to them. The US will never be, barring a complete economic collapse or a major technological revolution, energy self-sufficient. Canada will always be an integral part of the supply mix. Claims of Canada’s oil being not needed are highly exaggerated.
Last comment from me, and it’s purely anecdotal. Maybe someone else has noticed this as well, though…
Last two weekends, I have seen many many Open House notices for local condos. Also, some for SFH’s. I live near Yonge and Eglinton, and I have never seen so many condos for sale. Anyone else in the Den of Iniquity seeing a disproportionate number of open house signs lately?
Re: #24 Retired Boomer WI
Be careful about believing too much of what you hear in the news, especially from American news stations.
The US is deluged under a MASSIVE blanket of propaganda on a daily basis. Look how often we’re hearing about excuses nowadays: pig diarrhea disease explaining rising bacon prices, drought explaining rising fruit prices, winter weather explaining reductions in industrial output, etc. This is EERILY SIMILAR to what went on everyday in the Soviet Union as the leadership made every excuse for their worsening situation.
Regarding global warming, so what? I am a huge environmentalist, but I also understand DOGMA when I see it. I am also SKEPTICAL of the big business+big government symbiosis and know that everything they do harms the average person. I encourage you to do your own research, but here are some things that I have discovered that soured me on the whole thing:
-most recycling is environmentally detrimental because it takes more money/energy to recycle many things than to build new (don’t believe this? look it up!)
-all north american garbage for 1000 YEARS could fit in a single garbage pit that is 25 square miles (that’s right – so quite worrying about how many bags you put out)
-in winter, the earth tilts SLIGHTLY on it’s axis and 1/4 of the world is immersed in freezing temperatures. Maybe the SUN HAS THE BIGGEST role in our climate! Hot and cold spots on the sun can last decades and can impact our climate significantly.
-big polluters lobby for environmental legislation. Yes, you read that right. As I’ve written about before, much of this is a PLOY TO BURDEN THEIR SMALLER COMPETITORS WITH EXPENSIVE REGULATIONS. This is called ‘regulatory capture’
-there is more GREENERY than ever before (according to NASA!). Why? Plants love carbon dioxide – they need it to grow!
-This one is my personal favorite: We’re in an ICE AGE! That’s right, most of earth’s history there were NO POLAR ICE CAPS! Again, look it up. If the earth is warming, that is NORMAL.
Regarding food, prices aren’t rising – the value of money is DECLINING. It is declining because it is being diluted through massive printing. This is making us ALL poorer. This is obvious because food is not the only thing rising in price at a rapid pace, everything is.
Understanding free markets, price anomalies and shortages don’t last long without interference. The drought is a result of poor government policy and interference in the PRICE DISCOVERY mechanism. I’m sure there are many industries or homes in California that receive subsidized (reduced) or free water. This is the cause of the shortage.
All that needs to be done to resolve this is simple. Remove all regulations and taxes on water production and distribution. If prices rise, that is a GOOD thing – it promotes only the EFFICIENT use of water and reduces waste. It also encourages more companies to come in to supply new sources, which brings the price down and quality up.
The only thing I worry about, and what we should all worry about, is the government sticking it’s nose into all these ‘problems’. Everytime they do that, it delays the solutions from being implemented, and we all suffer. Sometimes, the solution NEVER gets implemented because of how entrenched these interventions become, and the situation gets worse in perpetuity.
With more and more people living near transit hubs, we are becoming even less dependent to those oil giants
That license plate is ironic.
Stevie Poloz is an idiot.
A strong Canadian dollar will contribute to a stronger economy.
Housing is non-productive investment, money waisted for the profit of the banks. Infrastructure projects is what we need – roads, highways, high speed trains, R&D incentives.
Garth the reality is many have made off like bandits selling there house at all time highs and moving into smaller digs instead of moving up the property ladder…
Why don’t you ever share any of these stories?
The last time, this weblog unwittingly called bottom in $CAD to the day. I will buy USO.US in the coming days.
As they say…commodities are for trading, not for investing…
nice pic. i’d love to own a model S , charged by PV, and thumb my nose at them all.
guess who’s buying up portugal?
http://www.bloomberg.com/news/2014-11-03/portugal-sees-chinese-do-90-of-bids-at-property-auction.html
you’ll notice that even vancouver gets a nod in this article.
hamtastic!
Never underestimate the stupidity of Albertans. Not only did they completely ignore new oil field developments like Bakken years ago, but the government spent like drunken sailors and managed to rack up deficits without saving anything for a rainy day.
I won’t even mention the fact that they seem to believe that a socially liberal, fiscally liberal party devoted to keynesian economics, importation of foreign workers (and which just signed an impossibly stupid investment treaty with China) is ‘conservative’.
“#22 Lillooet, BC on 11.03.14 at 7:43 pm
First!
The drop in the price of oil is only temporary. Will be back up over $90/barrel by year end. Saudi Arabia has to inject upwards of 70% seawater into their wells to extract the remaining oil. They have past peak. They can only “flood” the market for so long. Worldwide demand keeps rising. China and India car sale keep increasing 20%/year. Now’s a good time to buy cheap oil stocks”
What you fail to understand is the Saudies have enough cash in the bank to keep oil prices low for 6-8 years. That means they have enough money to make up the revenue short falls for that period and play hard ball with the rest of the worlds exporters primarily Russia and Venezuela. The US does not care about the squeeze because their domestic market relieves imports, always a good thing.”
They leverage the pain Putin is feeling with depressed prices (US loves that) in exchange for US and NATO intervention in the middle east to meet their needs ie. Syria.
Read a book on geopolitics
Mr. R.
#24 Retired Boomer
You are so correct. Wiarton and Keddy stocker sales October 30th set record prices. Feeder calves 500 to 600 pounds sold for over $3 a lb. live weight. This is a 30% increase over 2013 prices. Just wait 18 months until these cattle are on the grocery shelf. Your $5 steak will be $11. Cattle dress out at 40% of live weight. Corn is up 10% on the WEEK as are soybeans. Canadians are about to face food price increases like never before. That will effect everyone not just Tesla drivers.
p.s. garth, thanks for not filling your site with a bunch of crap that lags my old browser. nice lean sites like this are becomming more and more rare.
#43 Mr. Reality on 11.03.14 at 8:45 pm What you fail to understand is the Saudies have enough cash in the bank to keep oil prices low for 6-8 years. That means they have enough money to make up the revenue short falls for that period and play hard ball with the rest of the worlds exporters primarily Russia and Venezuela.
——————————————
Yup. Ditto for Kuwait, Qatar and probably a couple of others to.
They may have to run a temporary current account deficit but their cash reserves and investments will tide them over for a long time.
OIL PRICES AND THE ALBERTA ECONOMY
Companies make investment decisions based on future expectations of oil prices, not what has happened in the last 3 months. Investment decisions do not turn on a dime.
Oil companies as of yet have not markedly changed longer-term expectations for oil prices so investment plans have not changed. Projects would have been stress tested at a number of price scenarios to make sure they made sense over a range of prices.
Mothballing a project not only looks bad but can cost millions of dollars.
Prices will have to stay in the $70s for months or fall more for oil companies to reconsider investment decisions.
Then we will see some excitement in the Cowtown housing market.
With such a weak and long “recovery”, why was oil so high in the first place? As for Calgary RE…too many specs and filppers…at the moment.
#Oil!?! #WeDon’tNoStinkin’Oil![OrRoads]… #WeMayHaveNoSaguaros… #ButWeDoHave… #Mr.Fusion!
http://youtu.be/fCjsUxbNmIs
Hey Retired Boomer – WI you sure have an interesting new best friend. You should encourage him to turn off the computer, leave his mom’s basement and go out and look around the real world though.
I think you know who I mean, if not ask Mark he knows everything. I haven’t even clicked submit yet and he’s already getting part of this in bold for a response.
Womp womppp…
“Atlas Mugged”
http://www.vice.com/en_ca/read/atlas-mugged-922-v21n10
@#35 North Burnaby Inn
‘With more and more people living near transit hubs, we are becoming even less dependent to those oil giants……”
++++++++++++++++++++++++++++++++++
If it keeps raining like it has been. The Holdem/Lougheed skytrain station is gonna start floating. Still Creek is over flowing and we’re supposed to get rain ALL WEEK LONG.
i hope your wrong…nothing good will come from this roubini says we are a four engine plain running on one engine…this guy is not stupid…it’s not just oil ang gold everything raw material wise is dropping
Garth,
Speaking of dark liquids, albeit of a somewhat less viscous nature, surprised you didn’t comment on the article/trend below
http://business.financialpost.com/2014/11/01/chinas-growing-thirst-for-wine-draws-chinese-investors-to-okanagan-valley/
Does this mean the traditional wine and cheese party be replaced by the ham and cheese party?
“Energy self-sufficiency”??? Give us intelligent people a break.
———————-
The US views Canada as essentially a domestic source of oil.
US self sufficiency calculations includes whatever they can import from Canada.
#34
interesting post, lots of smart people on here. I’ll stick to being schooled by y’all and homebrewing. I do like a break at the pump though. Smoking man, I need a good drinking buddy sometime, miss you man. I’m looking pretty good for retirement, just hope I make it, maybe get a few good years off the investments before I leave it to the missus, won’t bother me much to leave this world, I want to see the plaid skies of Smokin man’s world.
The US of E is still importing lots of oil.
The pain is being passed onto Mr Putin.
#22 Lillooet, BC
What does that even mean? What’s the other 30%? What did it used to be before they used seawater?
“Never underestimate the stupidity of Albertans. Not only did they completely ignore new oil field developments like Bakken years ago,”
Ignore? You are aware that those Bakken wells are very high depletion rate wells, and the all-in cost of production is a range similar to that of the tarsands?
You see, the oilsands assets are very long lived assets. Drill the wells and build the facilities once, and they produce for 50+ years. Perhaps even longer. While with the shale oil wells, they’re basically on a perpetual treadmill of having to drill more, to even keep production flat. And much of the supporting infrastructure effectively becomes stranded as the fields deplete relatively quickly.
That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero.
+++++++++++++++++++++++++++++++++
The only game changer would have been if the UN would have acknowledged the reality that global temperatures haven’t budged in 18 years, thereby making all of their pronouncements of doom and gloom just so much poppy cock.
WRT to Tesla’s battery powered cars, and “sustainable” energy of all types, I just read a very sobering discussion on the comparison of total energy expended in capturing, storing, transporting and using various energy resources.
Long and short of it is that supporting a modern society such as ours requires extracting 7 units of energy out for every unit of energy put in.
Oil gives us 30 units output for every unit of input. This explains why Western society has been so prosperous; we have lots of energy to do everything from growing food to supporting the likes of Andy Warhol and the Counting Crowes.
Wind power and solar photovoltaic, when combined with battery storage produce 1.3 units of energy output for every unit of energy put in. In other words, they all fall far short of the 7 units needed to support our lives, schools, hospitals, etc. The only reason wind or solar power exists is due to the massive energy subsidy of fossil fuels.
In short, there is no free lunch. “Sustainable” energy will not support anything above a Medieval lifestyle. Unless of course, you’re the King.
I don’t know how many Michealangelo’s or Einstein’s there are in Africa. My guess is that there are quite a few, but we’ll never know as they are spending their lives walking miles to find and haul firewood. That is what energy poverty looks like. Not sure why the Greenies find it to be their goal in life.
#34 Cato,
read Naomi Klein’s This Changes Everything. You don’t have to read much of it – the first 50 pages define you as an “ideological warrior”.
#RespectTheBoomingRetireesOfWI… #Or,PayingAttentionToIconoclasts… #MayTakeYouFar… #”SnowVember”…
[ABC] – ‘SnowVember’ Kicks Off With a Winter Blast
http://abcnews.go.com/US/snowvember-kicks-off-winter-blast/story?id=26663121
[NoteToGT: You have no idea how much I miss Mr. Jennings… Ted[K.]… and Pierre [S.]. BackInTheGloryDayz.]
#60 Van Isle Renter aka clueless: “That is what energy poverty looks like.”
What about Garth’s two neighbours with the $100k Teslas? Is that the energy poverty you speak of?
Thanks for condolences and kind words dogs.
One more funeral and I can drink again.. Seneca on Friday.. Ground hog day.
I do understand now, the purpose of religion.. Not that I will ever sign up. But I’ve used it, words, to remove the daggers out of brother and sister in laws heart. No one can ever repair the hole or stop the bleeding of losing a son.
Mom had a good life, we took care of her well. I was going to play preacher at her funeral. But she was a woman of faith. Decided not a good idea, the faithful might think I’m insane.
I got her 3 greek orthodox preachers for her send off.
See you dogs on Friday… Haven’t had a drink in two weeks. Should be a good one..
Garth, I know for a fact that people in the patch in Calgary are expecting $100 oil again by xmas.
“That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero.”
I wonder if India and Chinese media had this on their tv stations every ten minutes like we did in Canada?
#13 Mark
““Energy self-sufficiency”??? Give us intelligent people a break. The US still imports 7-9 million barrels per day of oil, and even dramatic expansion in the various shales, increasingly unlikely at current prices and free cash flow levels of the sector, won’t come anywhere near filling the gap.”
—————————————-
As has often been the case, you’re not seeing the forest for the trees, Mark.
Yes, the U.S. imports some 8.5 M barrels/day of crude.
The U.S. is now exporting some 3.7-4 M barrels/day; mostly refined petroleum products. So, this looks kind of not quite so gloomy, yes? Import mostly crude, and export mostly value-added refined and processed product.
The import trend has been downward via-a-vis total production; the value-added export trend has been increasing.
The Saudis demonstrate better intelligence than do you, and dropped their price accordingly. No break for you, Mark!
#60 Van Isle Renter on 11.03.14 at 9:31 pm
You are severely misinformed about energy. Yes, a energy dense hydrocarbon is needed for manufacturing, industry, agriculture and heavy transport. It is not needed for people to get to Walmart in their Kias or to power their PCs and iphones. That can easily be offset with solar. Thats 50% of our oil usage right there.
On top of that there are tons of energy efficiency gains to be had all over the world. A ton of energy is wasted out of the roof of your home in the winter. If we gave people a little grant to improve their energy usage would be money better spent than opening up some more oilsands leases.
In addition, there are lots of discretionary energy savings to be had too such as telecommuting, work from home, video conferencing etc.
A barrel of oil has about 1500 kwh equivalent energy content. Once burned its gone forever. Instead use that energy to make a solar panel that lasts 35 years and you will produce energy from the original barrel of oil a thousand fold.
#34 Cato The Elder
We all live under a mass of propaganda and advertising, that’s why I still enjoy English SW (shortwave) broadcasts from around the world. Today you can use the internet also. Interesting to hear how other places really feel about us. As for “American News” it must be digested with more immodium than swallowed in ALL of Alberta’s oil operations. Big Government today has been subjected to Corporate Capture – old news, Cato.
Yes, winter weather did decrease some production, yes pig diseases did decrease pork production, and the years before that low prices made it unprofitable to expand the herds. Supply, and demand my Cato. (don’t eat bacon until prices subside, similar to buying a home in some places). Regulatory capture is mainly an illusion, if an idea has merit financing will always find it!
Finally food prices ARE rising. My energy costs have been mostly flat, (electricity up 3.2% in 3 years) my insurance costs flat, my entertainment costs flat, diamonds mostly flat, gold, silver falling as we speak! Where is the inflation, or decrease in money value, other than food? supply & demand.
Recycling, some commodities are wasteful. Aluminum is not. Driving a fuel efficient vehicle for years is not either.
Taking garbage across country to your 25 sq mile hole is unsupportable non-sense! Bury / burn it right here. In winter it gets dam cold here. Most efficient heat is natural gas, we have plenty, and the infrastructure IS in place. Thanks! Before there were ice caps there was no record of humans, perhaps the same answer when are no polar ice caps again?
Having never lived in the Soviet Union I have no point of reference to their uses of excuses for their failed economic model.
There is no such a thing as a “FREE MARKET” it is an illusion. They are only as good as fallible humans can make them, and that’s not perfect. Never has been, never will be! When you start demanding free markets you will assuredly get screwed by the people providing the dam thing – an illusion.
Cato stop smoking that cheap weed!!
Fracking, up here in dawson creek b.c. it is all about fracking, that has nothing to do with oil production, it is all about natural gas and releasing it from the earth.
Fracking for oil……..never heard of that. House prices in dawson creek b.c and fort st john keep soaring and this is oil and gas country and no we are not hurting like fort mac like some write.
#60 Van Isle Renter
“Long and short of it is that supporting a modern society such as ours requires extracting 7 units of energy out for every unit of energy put in.”
That may be true but all oil isn’t created equally. There are conventional and non-conventional sources. This is what peak oil is really about. At 7/1 units we may be able to maintain some semblance of modernity but there wouldn’t be much growth, if any.
http://www.peakprosperity.com/blog/88380/energy-economics-crash-course-chapter-19
#61 Herb
Garth can be considered an ideologue too, making such assertions:
“After all, the big US oil boom of late has that country barrreling towards energy self-sufficiency faster than anyone imagined.”
It’s a little more complex than this nonsense. In any case we’ll all know the name Ghawar at some point, even if we still don’t know the name Cantarell. You may have noticed Mexico is a narco-state these days.
Property taxes will go through the roof in all of Alberta putting an end to the entire real estate market. Chances are increasing for a provincial sales tax. As for the people still buying condos it gets very cold in the winter when you live on the streets. This is the future for the present day condo quote owners. The taxpayers will be on the hook for a fortune. Another reason why I’m on this blog is because in January some poster (name withheld) declared I know what to buy Gibson Energy. When I read that I knew it was the end of oil and should have also been the end of the stock market in general. Oil finally is falling and I’m still waiting on the stock market indexes.
Another day another factory set to close in Brampton. This time it’s Rothman’s, laid off half their employees and sent the work to Mexico, tick-tock for the rest.
Garth et al:
Let’s see:
Crude 1980 – 21 per barrel
Crude 1990 – 20 per barrel
Crude 2000 – 27 per barrel
Crude 2010 – 74 per barrel – Nice jump here
Crude 2014 – 78 (ie now) – Was much higher
Looks like a bit of bubble to me…could be wrong.
Here is the link:
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A
To me it looks like things have been tapped out…or people tapped out. Economy slowing, etc.
Flow of money is critical to the economy. Price of fuel too high, kills the economy, since it sucks the cashola out of every “joe” in the country. Eventually, “joe” stops spending…and the economy stops.
Price of oil is going downward…deflation is coming…just as the wise old Mr. Garth has said.
Might go lower…we shall see.
Tar is the last resort. It’s what you burn when the cheap(er) stuff is not available. However, right now there is plenty of the cheaper stuff around.
Maybe wait until the tar economy out West crashes due to lower oil prices, then go buy some tar lands before the shale boom in the US crashes, which would then restart the tar economy.
Didn’t we see a movie like this before? Alberta: The Prequel?
BTW, even at 78 Federal Reserve Notes per barrel, crude is still far above its long-term historical average. Is the recent decline truly deflation, or just a bit of give-back/adjustment on the massive inflation of the 2000s? Let’s keep things in perspective.
On another note: Cheap(er) oil can really restart the global economy if supply continues to outpace demand (unless something else “blows up”, like Japan, or France. I know, I know… it won’t happen because we don’t want it to). But remember: it’s all about energy. Even debt is about energy. For those who don’t see the connection, I don’t feel like explaining right now. Just think about it.
Re: #71 Godth on 11.03.14 at 10:17 pm
We heard the same line about peak oil (by a different name) 40 years ago back in 1974. Oil kept on falling in price until around 1980.
Well interesting times indeed, I work in the oil patch while living on the wet coast in my modest house with a tiny mortgage. I am just getting set to go back after 14 days off, as much as it sucks flying to work, 14 on 14 off is not a bad deal these days. Anyways it will be interesting to see what’s happening there with oil now under 80$ I am sure there will be lots of people starting to squirm.
Let’s face it though the fracking for oil and gas in the US is not a long term solution to energy independence, its unsustainable and will be short lived, wells will dry quickly and that’s not even accounting all the other damages associated with fracking. How about drinking water? Either way Alberta will be fine, however lots of people who overbought and borrowed big will not, and I personally know lots. Lets just say I will avoid real estate conversations at work at all costs, unless I know we are on the same page.
We are now going to witness one of the greatest events in history, not being a doomer just being real, money printing, colossal debt, climate catastrophe, Nano-technology, food, water shortages and the dumbing down of society in general; I see a perfect storm brewing. I used to waste a lot of time and energy consumed with all of this, but I have now learned to only share knowledge with those who are keen to listen and also share, and I know it sounds harsh, but for my own sanity forget all the rest, smile and nod. Despite all the losses there will be plenty of opportunity in the future as well.
Thanks Garth for all the free advice and modest approach to things
Cato for PM, I know its ridiculous, but you make more sense the rest of the ‘leaders’ we have to vote for
The year 2005… Peak conventional oil,Peak global GDP,peak American car miles,peak growth on a finite planet.
Re: #63 Herb
I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!
************
Re: #71 Retired Boomer WI
The increase in prices for food is not because food is becoming scarcer.
It is because your money is being devalued. This is happening worldwide as EVERY government the world over attempts to paper over previous debts and obligations with inflation and money printing.
You say your energy prices haven’t gone up – are you sure it isn’t because you’re using less? Maybe your car, house, or other energy using devices have become more efficient. If you were using the same amount as 3 years ago, I can GUARANTEE you it has gone up. I don’t even need to see the bills. And besides, do you know how much energy it costs to grow food and transport it? A huge component of its price is energy.
Printed money has a way of working its way through an economy and building up in different areas at different rates. Food may be the most impacted today, just as real estate has been for 10 years, and tech stocks before that.
Gold and silver has been well documented to be manipulated by NAKED shorting by major financial institutions. That means they’re selling gold and silver THEY DON’T HAVE. This is ILLEGAL in every other commodity, EXCEPT gold and silver.
China and Russia are taking massive advantage of our stupidity of abiding by this system. They are buying up all the physical gold and silver stores.
Some day soon they will announce to the world what they have done, and it will be game over for the west.
Many people like to dismiss golds impact in the world, but it has never changed.
Re. #36 Cato the Elder on 11.03.14 at 8:20 pm
Cato, you seem like an expressive if somewhat verbose individual. However, I was very surprised to see you mention that
“-in winter, the earth tilts SLIGHTLY on it’s axis and 1/4 of the world is immersed in freezing temperatures.”
Can you provide us with the exact date that this tilt takes place? Could this explain why all my dishes mysteriously slide off the table every December?
The media noise against oil is paid for and intentionally misleading…pretty much a desperate attack against success in Canada’s final plan to export Alberta crude globally by the ‘green blob’. Any one who follows the fundamentals of the companies in the oil patch is loading up…not selling.
Anyone with an education going back to the Brundtland Document on sustainable development and the creation of carbon tax modeling to pay for ‘reparations’ to the third world understands that ‘the death of oil’ is just an advertising campaign. ….chimera…illusion…bull flop.
As a professional investor and certified analyst of 40 years I can’t count the number of acquisition cycles I have seen. Big companies will buy…China will stockpile…prices will dive while they do…..until they don’t….and the distribution cycle hits…..surprise….who will own all that stock? The smart money of course….dummy.
Don’t get sucked in…long and strong. Don’t get your investment advice from the gossip colums….read a companies annual reports instead…The world is not coming to an end…..global populations are exploding….they all want cars and fridges…..not tee pee’s quinoa and tofu. Remember what Adam Smith said about the ‘invisible hand’.
Me too Smokey, sorry to hear about the tragedies which have touched your family as of late.
Stay strong and take care of your remaining family members.
#65 frogblender on 11.03.14 at 9:57 pm
#60 Van Isle Renter “That is what energy poverty looks like.”
What about Garth’s two neighbours with the $100k Teslas? Is that the energy poverty you speak of?
+++++++++++++++++++++++++++++++=+
Teslas are rich man’s bangles. Without massive fossil fuel subsidies in producing, transporting, mining of raw materials and producing the power that they use it would be impossible to make or market the Tesla.
You cannot get the energy required to even build a Tesla from “sustainable” energy resources, let alone drive one.
My prediction? Tesla will be the next Bre-X.
You notice Poloz doesn’t abolish CMHC and make the banks take some responsibility for the loans they are handing out.
That’s because he knows the banks will raise rates for high risk loans. Actually these aren’t hi risk loans they are Extremely Risky loan. Which probably will never be paid ever and will default. The banks knows this and doesn’t care because they don’t have any skin in the game if the loan ever defaults.
Poloz is doing all he can, “KICKING THE CAN DOWN THE ROAD”
For the retards who are still buying in Alberta, think about this
There is an oversupply of oil out there. The biggest consumer of Canadian Oil is the USA and they don’t need our oil anymore. (cutting back). Eventually the oil companies will have to cut back because it will cost more to produce oil than the price of oil (sell at a lost)
They will simplily stop production and sell what they have. Lots of job losses there. Also note the revenue (taxes) canada gets from oil. At 120 a barrel to 78 is an 40% cut in revenue. Add less taxes from job losses, and a payout in EI and more social services.
That is what we will face in the nearby future
#62 Van Isle Renter
Net energy efficiency of “alternative power” is pretty low. EV cells take lots of energy and exotic materials (incl rare earths and silver) to produce, and their efficiency drops off over time quite noticeably, not that it’s all that good to begin with. Batteries are made up of toxic chemicals and are very heavy, and also degrade over time. Windmills are massive hunks of steel. Hydro is a huge construction undertaking, which radically reshapes its immediate environment through flooding and waterway impacts.
To be truly usable, they all require storage mediums, the aforementioned batteries. Even the top of the line Tesla with extra battery packs will only drive you 500-600 km. Electric cars for regular people struggle to break 100. It’s hard to beat energy density and efficiency of gasoline. There really needs to be an order of magnitude improvement in battery technology. This is where much more research and investment should be happening.
The “LOL OIL” guy probably does not appreciate the irony, he’s most likely happy feeling good, as a Responsible Environmentalist(tm) should. His new toy is charging with electricity mostly produced from fossil fuels.
So Poloz wants to spend somebody else’s money to keep certain trades employed. By what standard is this not a theft?
Poloz, stop stealing from savers!
#JustForSmokingMan… #Isabel…DoesGreatOrtho,Too… #’TheTreeOfLife’…
http://youtu.be/qqmudgbJlAs
I called my buddy in Calgary this weekend. He didn’t even know oil fell. To be fair, he doesn’t work in the oil industry. He hates that industry and is happy that production will be cut.
I started asking other friends if they knew oil fell. They didn’t know it fell THAT much, when I told them the percent value. Maybe house buyers are told that oil prices will come back in 1 year? Maybe they don’t know?
Some energy companies can tolerate current prices for 6 months, but after that, it’ll get ugly for half of them. Job cuts, dividend cuts. And before that happens, we’ll see stock downgrades. Surge, Whitecap, Precision Drilling, Tourmaline are all good candidates.
I know of a lot of oil projects have been cancelled and other projects are now scaling down. Crashing RE will be just one major problem in Alberta. Look out below cause it’s going to get nasty.
#77 Inglorious Investor
“Cheap(er) oil can really restart the global economy if supply continues to outpace demand”
Of course it’s easier (short term) for supply to keep up with demand when demand fall. I empathize with your reluctance to try to explain the relationship between energy and the modern economy. Most are baffled by B.S., and hey, maybe I am too. It’s obviously intimate and intensive though.
#78 Tony
100/1 isn’t the same as 5/1.
#83 Bad Bill
“The world is not coming to an end…..global populations are exploding….they all want cars and fridges”
Please let us know where the extra couple of planets are that you’ve been hiding. We need to strip search them now.
#85 Van Isle Renter
#87 devore
You two more or less answered each others questions. Put your heads together and you’re talking Vaclav Smil (among many others).
I know that when you drill a conventional oil well you get around 20 to 30 years of production from it, but these fracked wells in hard shale rock, how long will they be producing oil before they taper off?
#19 polecat –
It wouldn’t make any difference even if we could get our Alberta oil to the coasts. We missed the “diversify the economy” boat back in 2007 when HarperCo was busy cutting the GST rather than investing in education and skills development, and goosing the economy with US of A style 0% down 40 year mortgages.
not 1st: On top of that there are tons of energy efficiency gains to be had all over the world. A ton of energy is wasted out of the roof of your home in the winter.
Jonathan yesterday provided a link to the CBC program The Current:
Alter: “glass clad has the insulation value of a sheet of corrugated cardboard”
http://www.cbc.ca/thecurrent/episode/2014/11/03/frank-gehry-most-architecture-today-has-no-sense-of-design-no-respect-for-humanity/
these are serious allegations: glass clad condos are not energy efficient. I don’t have to believe in climate change to believe in winter.
Mark : “How can Canada keep interest rates down while US raises its own. Is it even possible?”
Easy. A housing-led deflating domestic economy, while the US increasingly suffers inflation due to insufficient fixed investment and those “reserve” dollars coming back from overseas claiming US produced goods and services.
Canadian monetary policy isn’t as tightly tied to the US as you may think.
okay “A housing-led deflating domestic economy” means that house prices steadily decline – in spite of interest rates remaining low – what’s going to drive house prices down?
okay what about the bond market? if Canadian bonds yield less than US bonds then nobody is going to buy them. The Canadian Government – governments really including Ontario have to borrow – it’s not like they can take their ball and go home.
it’s much easier to believe that Canadian rates must follow US rates. Rising rates collapse the housing market.
#46 Cow Man on 11.03.14 at 8:46 pm
“Just wait 18 months until these cattle are on the grocery shelf. Your $5 steak will be $11.”
Then let it sit on the shelf, Colon’s everywhere say Thank you!
Oil, gas, water, trees are all resouces that are being depleted from Mother Earth. Have respect for Mother Earth or else!
Sometimes I agree with Cato the Elder. I do agree that the middle class and small business are in trouble. Treating small business like a “dime a dozen” does not help. I agree with Fuzzy Camel on “How the heck can we compete with China/India.” I think our local politicial leaders are not speaking up for us, after all we are a dime a dozen, next.
Our hearts go out to you Smoking Man, also to your bother and sister-in-law. Hard times.
#81 Cato The Elder
My nat gas, water, sewer have not gone up in three years!
Electric went up 3.2% in 3 years. Useage remain constant here. Auto and home insurance has gone DOWN over the same 3 year period same 1.5 million coverages for liability $500 deduct for collision & comp. Same carrier for the past 2 of 3 years.
Food at home, as well as restaurants have increased.
My business was transportation, and fuel & drivers wages have kept pace with inflation 2-3% year ave.
We tend to eat locally produced meat & veggies. Some fruits (bananas) are imported or grown elsewhere. YES farm input costs have risen, taxes here have been flat or below inflation for 3 years.
Remember, this is NOT Canada and our state has done a better than average job reducing its tax bite on us of late. So has the local school district. I will give credit where it is earned!
At the same time, incomes here have not increased much more than inflation. All things have been relatively…CALM. Food & energy not included, energy (gasoline) has dropped of late…but… Food is up probably overall 7-10%
certain items way above that, and they are not cartel driven, nor government interference.
There has been no ‘deflation’ in money. My investments over the last 3 years have far outpaced inflation, almost doubling overall. No, until recently it was NOT a 60/40% balanced portfolio. I read the scene, guessed right on the investments, and cashed in. Now, not much of a reason for me to ‘gamble’ on any venue, but rather own the total market via an index fund.
It will have ok years, bad, and tremendous ones ahead of it. Me, not so sure anymore! ok for the present, but…
my crystal ball is broken.
Keep up your idealism, but do come reality from time to time. Yeah, it might suck, but it prevents neuroses.
#56 dilwin on 11.03.14 at 9:10 pm…
From what I heard from Chinese visitors last year, they love the Okanagan, but the wine is too expensive compared to similar or better quality wines from California, Europe and South America.
This article sounds all too familiar, similar to the phoney HAM stories out of Vancouver.
I must admit I do have an addiction to some local Okanagan wines, and I buy Summerhills’ Ehrenfelser by the case – but when I taste a $ 3 bottle of wine from California in the nearby AZ wine store I’m amazed at the quality for that price point.
Makes me wonder why I continue to pay $ 20 a bottle for my favourite Okanagan wine!
BTW, regular gas is down to .79 CAD at our nearby AZ Costco!
Well Garth, you are a smart guy and I’ve followed a lot of you advice, some successfully and some not. For example I sold after Greater Fool came out and probably didn’t save anything buying back in. But I do have a financial guy now building a diversified portfolio and followed your rule of 90, although I don’t know how to stay on track because the house is going up while the portfolio is, well, new. I’d have to downsize the house but it was in the rules when I bought it and now it’s up. And it works for us.
But on the oil and gas thing I am going to have to pull rank. I spent some years as an energy cost analyst and I think I got fired for saying the obvious. Costs are not going down. There is a reason Canadian and American producers don’t have any free cash flow. They are spending more on drilling than they get in revenues from the wells. They are dying. Sure they get lots of funding from the banks but it’s a lot like Apple and the iPhone. Something better than the iPhone will one day make all that borrowing unplayable. Technology last 5 years, ask Blackberry. (ReM I guess.)
But with oil and gas, the situation is a lot easier to explain than a new gadget. If the Saudis keep pumping oil into the US to drive down oil prices, horizontal drilling will not survive. Energy independence will be a myth. It’s predatory pricing at it’s finest. Unfortunately, I read today an analyst who thinks the Saudis could keep it up for almost 8 years, hardly affecting Russia but killing US horizontal shale plays. 8 years is a long time to keep a money loosing venture in business.
The US oil boom is over with a 7 handle. Just watch. Sell Alberta, but before you do sell North Dakota and Nebraska. And most of Texas.
“That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero.”
————————————————————–
Thanks Garth, for the corroboration of what I was feeling about this on Sunday. (I know, I know, I may have annoyed some doomer-deniers here, but my sentiments were genuine, and still are)
Wow! Wow! Wow! Looking at the releases on that report, I am thunderstruck at how powerful the body politic at the international level has switched directions. This rarely, if ever, happens in international politics.
http://www.diplomatie.gouv.fr/en/french-foreign-policy-1/sustainable-development-1097/21st-conference-of-the-parties-on/
Some more background:
http://www.huffingtonpost.com/2013/04/23/2015-climate-conference_n_3140679.html
Mark your calendars: Nov 30 – Dec 11, 2015
http://unfccc.int/meetings/unfccc_calendar/items/2655.php?year=2015
(my three posts on this start at: 168 Dominoes Lining Up on 11.02.14 at 11:27 am – Greater Fool)
I was stunned, and still am, by the new and obvious resolve coming from the UN, whereas for years it has mostly been plaintive blather.
This really is different, people.
The Paris conference in 12 months and twenty days will utterly doom Alberta’s status quo economy. Get out now if you are a homeowner there – rent!!
If Albertans, and Harper with them, don’t get it, the world will leave us behind and feel that we deserve it.
And since too many, like the deniers here, will say that we should do nothing….
Alberta real estate is in for an awful, epic crash.
READ the Information, folks! Don’t just bleat out typical denier crap.
The international consensus against carbon (which also effectively will mean against Alberta and Keystone) is really something to behold in this.
The world has one too far down the wrong path, and
we are finally starting to deal with that when it comes to carbon and oil.
But as Garth points out, the wilful blindness of Poloz may be even worse for us. I think this is what Garth was referring to when he talked yesterday about…
“It’s too bad a worse event, therefore, is brewing.”
People, we simply do not have the leadership in place, anywhere to mitigate, let alone prevent what is coming our way.
Get OUT of real estate now, especially in Alberta, Toronto and Vancouver, for heaven’s sake.
Be liquid and prepared for what is coming.
#71 Retired Boomer – WI on 11.03.14 at 10:10 pm
“My energy costs have been mostly flat, (electricity up 3.2% in 3 years) my insurance costs flat, my entertainment costs flat, diamonds mostly flat, gold, silver falling as we speak! Where is the inflation, or decrease in money value, other than food?”
For comparison:
I used to pay (all up, all in) less than 11 cents per kWh in 2004. Today the cost is over 15 cents per kWh. That’s a 42% increase in ten years or about 3.5%/year. Not hyperinflationary by any stretch, but keep in mind that we are now on time of use rates and we try to run high-kW appliances during off-peak hours, where the lowest rate is 7.5 cents. The peak rate is 13.5 cents. In 2004, the flat rate (no time of use) was 4.7 to 5.5 cents.
In 2005-06, my home insurance premium was $399. In 2013––before I did a major reno––so same house, same coverage, the premium was $808. That’s an over 100% increase, or roughly 9% annually.
Other stuff like nat gas has come down in price right? The raw cost of the commodity may be much lower, but in 2004 I was paying (all up all in) about 61 cents per cubic metre. Today it costs me 69 cents.
And food? I dunno, my wife does the shopping.
#92 Godth on 11.03.14 at 11:40 pm
“Most are baffled by B.S., and hey, maybe I am too.”
I think perhaps you’re simply baffled.
Those higher sales in Calgary can be explained easily enough. Too many people arriving & not enough housing of any sort to house them all. Rental market is practically zero & people have to live somewhere, so the alternative is to buy. Flood damage didn’t help, neither did the massive conversion of former rental digs to condos. Something like 40% of the current occupants of homeless shelters in Calgary (as per news reports) are gainfully employed, just haven’t managed to find an alternate place to live as yet & not from lack of trying, either.
Regarding global warming. I think it is real. What I question is how much is the result of mankind’s activities & how much is just a natural cycle. Last time this puppy dropped by our ancestors were most definitely neither industrial enough or numerous enough to make a difference – yet the climate changed regardless. I think our modern day activities exacerbate the cycle, but are not the sole cause of it. Otherwise this would never have previously occurred, yet they have plenty of evidence to prove it did do & more than once. I’m not saying don’t try to clean up our act, find better ways to exist without destroying the environment. I’m saying that even if we all of us stopped producing greenhouse gas that climate change will still occur.
Landlords charging viewing fees
http://www.cbc.ca/news/canada/calgary/apartment-viewing-fees-shock-calgary-woman-looking-to-rent-1.2822050
Yikes….how much cash outlay before one finds the right place to rent?
“okay “A housing-led deflating domestic economy” means that house prices steadily decline – in spite of interest rates remaining low – what’s going to drive house prices down? “
Oversupply, and widening risk premia. Tighter credit standards (ie: CMHC’s changes to subprime loan guarantee rules). Which is what we’re now seeing, which is why house prices are declining.
okay what about the bond market? if Canadian bonds yield less than US bonds then nobody is going to buy them.
Not so. Yield is only one part of the equation, currency stability and purchasing power in a given currency is another. The Canadian dollar has all the elements of an incredibly stable, and strengthening currency. Especially with declining house prices and stable to declining domestic consumer prices.
High rates do not make for high real, after-tax bond returns, especially if the currency in question is weakening. Quite the opposite in fact, as I demonstrated the other day in a post.
it’s much easier to believe that Canadian rates must follow US rates. Rising rates collapse the housing market.
Rates on Canadian dollar denominated bonds won’t be rising for quite a while, although there is likely to be an inversion in credit spreads between the corporate stuff, and the mortgage-backed bonds. Due to credit-worthiness issues.
Canadian rates will eventually follow US rates, but with quite a long lag. Perhaps 6-8 years worth of lag, since Canada has the huge housing bubble to liquidate (figure 5-7 years), while the US bubble has been mostly liquidated in comparison. In the intermediate term, CAD$ policy rates could even fall as the housing price declines experienced thus far accelerate further.
So while the moldy s in our basement make wages about
the same as me in the late 80,s.We wonder why?
It is hard to win out there..
It can be done but its in no way as easy as I (Old fart)
remember. Wages went up. Price,s went up.
Now wage,s go down and only the things you need go up.
Sure some things come down but stuff you can leave on the self.
“So Poloz wants to spend somebody else’s money to keep certain trades employed. By what standard is this not a theft?
Poloz, stop stealing from savers!
”
Poloz is not stealing from savers. Quite the opposite, low policy rates are actually keeping the economy going, providing output from which dividends can be paid to savers. Additionally, “savers” have benefitted enormously through abnormally high bond returns over the past decade.
I don’t know why every time the topic of low interest rates comes up, someone chimes in and claims that ‘savers’ are being robbed. When evidence points to low rates creating quite robust returns for “conservative” savers and investors. Nobody is owed a risk-free, short-term return anyways, especially when risk takers have been getting little to nothing for so long now (just look at what the TSX-V has been doing!!!! risk takers in Canada have been killed!)
or shelve
“You notice Poloz doesn’t abolish CMHC and make the banks take some responsibility for the loans they are handing out. “
Poloz is the Governor of the Bank of Canada. He has no authority, whether by fiat, or legislative, to change anything at the CMHC.
If you recall, David Dodge actually left the BoC as he understood the folly of the CMHC engaging in subprime mortgage guarantees, but lacked the mandate to do anything about it.
Poloz isn’t the OSFI nor a bank examiner either. So no authority to impose regulatory capital rules on the chartered banks.
I know people want to blame the BoC for the state of the economy, but they’re really, really the wrong people to blame. There is no evidence to suggest that they’ve done anything other than stick to their stated inflation targeting mandate.
Everyone compares Alberta to Norway, and rightfully so. They could have way more dough in the bank. Having said tha, I’m sorry, but the Saudis are full of doo doo. Their “proven reserves” remained essentially static between 1997 and 2012 despite having exported billions of barrels per year in that time. A monarchy with 2,000+ princes that buys off its citizens with 16 cent gas in 2014 is always going to protect its #1 producer reputation until the day it runs out because, lets face it, there is no plan b.
The public is in the dark about what the shale revolution actually represents long term. I wouldnt write off alberta next to saudi Arabia or the US just yet
“Can Condo Buildings Get So Old, They Have To Be Torn Down? ” –
http://www.slaterealestate.ca/can-condo-buildings-get-so-old-they-have-to-be-torn-down/
But….
http://www.santacruzsentinel.com/ci_18690108?source=most_viewed
Oh, to be 50 years younger…
Sorry devore #87 you don’t know what you are talking about. I’ve driven a Nissan Leaf since 2011 in Surrey BC. My home electricity bill went up $30 per month and I drive round trip to west side Vancouver from Surrey at least twice a week no sweat. I have taken my Leaf to Victoria numerous times without any problems whatsoever including range problems. I just had my car in for it’s check up at the dealership and there is not any noted deterioration in the battery life. All this driving on electricity produced from hydro. Hubby and I are looking at solar panels if electricity rates get crazy. When the battery needs to be replaced in seven years we figure it will cost about the same as an engine rebuild in a gas engine. The car will pay for itself in gasoline savings in late 2015. So my challenge to you is to site your information source when you make broad statements like “Electric cars for regular people struggle to break 100”. I am telling you that has not been my personal experience over 3 years. Please quit spreading this miss-information. Thank you.
WTI oil or light sweet crude oil as they call it will drop another 20% in the next 3 to 6 months to 58 to 60 U.S. dollars per barrel. It may even drop to 50 to 53 U.S. dollars per barrel.
It will not last long though, probably a 3 to 4 month window at the most. Remember when oil prices dropped to 30 to 35 U.S. dollars per barrel I believe back in 2009.
Canadian retail gasoline prices were 65 cents to 70 cents per liter. They did not stay down too long.
We will be lucky to see $1.05 to $1.10 per liter this time around.
Re: #92 Godth on 11.03.14 at 11:40 pm
Bad Bill doesn’t even know stockpiling oil actually will increase the price.
Norway has been #1 on the World Prosperity Index for the past 5 years. They have a national oil investment fund of around $800 billion. Canada is slipping down the Index.
Norway is a Unitary country with 5 million people. (but with quite a few counties.) Without naming provinces that consistently mishandle oil revenues (Alberta), we might do better as a Unitary country with no provinces and less headaches. Just saying.
http://en.wikipedia.org/wiki/Legatum_Prosperity_Index
Good time to buy in edmonton. Especially compared to Calgary. Nice price jump coming in the spring. My guess is 10% for 2015.
As a result, West Texas Intermediate oil plunged to the lowest level in more than two years, with futures tumbling two-and-a-half per cent on the day, taking a barrel of crude down to just above $78 US. Yikes.
+++++++++++++++++++++++++++
Anyone know where the $78 USD equivalent in Gas Prices are? Should be under a $0.99 a liter. Its $1.26 where I am.
Smoking Man,
My empathy for you and your family in your time of grief from losing your loved ones. No one told me it would hurt so much. Take care and look forward to your return. Freedom First.
This is a really good article about deflation:
Why Deflation is Such a Big Worry for Europe
http://www.npr.org/blogs/parallels/2014/10/31/360186496/why-deflation-is-such-a-big-worry-for-europe
Hi,
As I’ve said before it’s too early to tell if rates will rise in 2015 or later. Central banks have been citing global economic risks as a reason for keeping loose monetary policy for a while now (it’s not news).
You’re being too hard on Poloz. Fyi – he’s not the finance minister so he doesn’t have any control over CMHC. He’s also not stealing from savers. If anything he understands that introducing shocks to the housing market is the last thing Canada needs right now. The country needs consumer spending on housing to fill the gap in GDP.
I hate to be the one standing up for central bankers but too many people on here have their facts mixed up.
If were stuck with oil no matter the price, why can’t we refine more of our own here? Build some refineries, create jobs and be more self sufficient until the really smart people figure out something better. Also comment above somewhere, retrofitting and energy efficiency go a long way and create jobs too.
A man only needs so much money, the rest is just for showing off.
During the night oil fell another 3.7 percent to $75.84 a barrel.
Stocks will move instantly at 10am.
Real-estate prices won’t move instantly, of course. How long it’ll take will be interesting to watch. In 6 months, when the oil-hedges expire and companies cut production, jobs will get cut. So maybe in 12 months we’ll see news about it. For prices declines, 18 months. Unless sentiment changes for the worst before that.
#113 SurreyMom on 11.04.14 at 2:12 am
Sorry devore #87 you don’t know what you are talking about. I’ve driven a Nissan Leaf since 2011 in Surrey BC. My home electricity bill went up $30 per month and I drive round trip to west side Vancouver from Surrey at least twice a week no sweat. I have taken my Leaf to Victoria numerous times without any problems whatsoever including range problems. I just had my car in for it’s check up at the dealership and there is not any noted deterioration in the battery life. All this driving on electricity produced from hydro. Hubby and I are looking at solar panels if electricity rates get crazy. When the battery needs to be replaced in seven years we figure it will cost about the same as an engine rebuild in a gas engine. The car will pay for itself in gasoline savings in late 2015. So my challenge to you is to site your information source when you make broad statements like “Electric cars for regular people struggle to break 100″. I am telling you that has not been my personal experience over 3 years. Please quit spreading this miss-information. Thank you.
++++++++++++++++++++++++++++++++++++
I’m glad that an electric car works for you. But taking it to Victoria from Van isn’t much of a test as most of the way you’re being hauled by a fossil fuel burning ferry. I have no doubt that there are very specific market niches where it makes sense. However, I live up-Island, with long distances to drive. It wouldn’t work for me. On the Prairies it would make even less sense, as a cold snap would wipe out your batteries in a heartbeat.
Electric cars are a minor niche filler and can be no more than that. Besides, the recharge draw would wipeout the grid if more than a handful of people used them.
Electric cars are the Blanche Dubois’s of the auto industry; they’ve always relied on the kindness of strangers. And in their case the strangers are the mud covered, hard hat wearin’, steel-toed boot totin’ workers in the energy industry.
Here is the problem
Banks lend money to home buyers cheap. 2.4%. They get these loans insured, so risk free lending.
Business loans don’t have this risk free lending, so the rates are much higher.
Home loans slow consumer spending because of home expenses. While business loans make jobs.
We need to get rid of cmhc and start lending to businesses. Big and small business.
If we rely on a fire economy, we are done for.
Garth has stressed that job losses are more critical than interest rates in propping up RE.
http://www.theglobeandmail.com/report-on-business/scotiabank-to-cut-1500-jobs-close-about-1500-branches-amid-writedown/article21436642/
Scotiabank chopping 1000+ jobs in Canada….
…..because its Caribbean operations are not doing well…..
…..because Canadians (and others) are so tapped out and debt-ridden that they are not travelling south to prop up those tourism-based economies……
The connections become clearer, don’t they?
———————————————————–
#104 Linda said:
“Regarding global warming. I think it is real. What I question is how much is the result of mankind’s activities & how much is just a natural cycle.”
No disrespect Linda, but do you realize how unbelievably ignorant and stupid this sounds?
Don’t sit there and opine like an ignorant blowhard. READ THE SOURCES!!!
In the UN report there is a 95% consensus among the world’s best scientists who DO read and study and experiment, that GHG climate change is human caused, and that the results are on track to be devastating if we do not get levels down to zero.
(YES – That is ZERO, “0”,…… also known as Stephen Harper’s EQ, and Stephen Poloz’s Courage Score )
Your denial is incredible. People like you plug your ears, and go “la, la, la, la, la, la……..”
This one is just for you Linda.
https://www.youtube.com/watch?v=3O1_3zBUKM8
#102 Inglorious Investor
Ouch! Those Electric rates HAVE zoomed upward!
I just looked at a recent (Sept) electric bill 728 KWH at 12.6750 cents per KWH for “summer rate.” Their “winter rate” is .113650 which begins with October billing period. We have an interruptible AC agreement which gives us a $6 credit per month in summer to interrupt the central AC during peak demand times.
I will assume most of your electric is generated from Hydro, whereas ours is mainly served from coal, wind and wood waste by-product. Sorry, I do not know the current mix of each.
As for the home insurance yours has increased rather dramatically! I was able to switch 2 years ago to a different provider, same coverage for less money. They have maintained the same rates for the 2nd renewal.
That provider also has the cars and -strangely- their rates have been static as well.
Trust me, it has not been my history with insurers, and I diligently “shop” every 12 month renewal period to make sure I am getting a fair deal. A new carrier has to come in below 87% of the current price if I am going to make a change.
WI is one of those goofy states where car insurance is NOT mandatory. If you cause a crash, you are required to be financially responsible, to the point of losing your home, car, etc if you are uninsured, or underinsured. That law also makes it a highly competitive environment as insurers WANT your business, assuming you have a decent driving record. Got 5 speeding tickets? Well, nobody wants your business, and you will pay through the nose for coverage.
If one has a wreck and was uninsured, or lost their license due to points you must file proof of coverage with the state or no license. Get caught with no license, no car either! They do not screw around with the scofflaw. Our rate of uninsured people remain the same as other surrounding states, while our rates are one of the lowest in the US – go figure- I believe it is because it is NOT mandatory.
Cheers!
$1.12 for gasoline. Awesome.
Saudis are making a big mistake. Americans will seek ways to produce for less. They will end up punishing themselves.
Still think it settles in around here.
Canada has relied heavily on o and g for growth and revenue. It’s a big blow.
Our Feds ripped off investors many years ago. We could have got 10x these prices for all that stuff in the ground.
Another slow bleed for the canadian economy. Money is cascading out of this country right now.
Why have a penny in canadian stocks when your own government works against you?
Good job USA:
http://www.bloomberg.com/news/2014-11-04/u-s-deficit-decline-to-2-8-of-gdp-is-unprecedented-turn.html
@#123 DAA
“man only needs so much money, the rest is just for showing off”.
++++++++++++++++++++++++++++++++++++
Nicely put.
Unfortunately most realtors dont fall into the human side of the evolutionary scale.
Present company excepted, of course.
“Those little Saudi devils decided to cut the cost of crude oil being shipped to US customers as a way of ensuring Arabia’s market share isn’t sucked away.”
It is more than that, I guess the americans have told Saudi to do that in order to hurt Russia and Iran.
The target is Poutine.
I am skeptical of electric vehicles. But I do have high hopes for them.
Here’s the thing: it takes a given amount of energy to move some mass from point A to point B. Basic physics.
So, a gas-powered car and an electric car that have the same mass, Cd, etc. will both require the same amount of energy to drive the same route.
The difference is, electric motors are far more efficient than combustion engines––less energy is wasted as heat. That said, in order to compare overall efficiencies and costs properly one had to take into account the full fuel cycle and all the energy inputs required to generate and distribute the energy source in question to get it from source to car.
I don’t know if/when electric cars and other alternatives will go mainstream, but I applaud Elon Musk and Tesla for at least shaking up the industry and getting people interested. Hopefully his current success is based on real technological advances and not just on being able to successfully tap a niche market by re-positioning the same old technology with a new package. While that is a big accomplishment unto itself, it’s not what alternative vehicles are really about.
Of course if gasoline gets cheap again, most people won’t care anyway until electric cars are competitively priced.
@#113 Surreymom
So Devore states that the average “range” for an electric car is about 100km between charges.
Your statement that “you drive from surrey to west side of Vancouver at least twice a week”
Wow . Twice a week. The horror…..
Distance? 50k each way? And you plug your car in when you get home? As for “driving to Victoria from Surrey? Whats the distance to the BC Ferry terminal inTsawwassen? 20km?
There are people on this blog writing in from all across Canada. Cold weather affects battery life.
That is a fact.
An electric car fully charged in -40 Calgary, -40 Winnipeg, -30 Toronto, -30 Montreal, -20 Halifax isnt going to have the same range as a fully charged car in 4 deg Cel Surrey.
Tires spinning in snow, ice, etc. will also drain battery life regardless of the temperature
I think 100km per charge is a reasonable average assumption for year round Canadian commutors. Not people living in the mild, spring temperatures of the lower mainland.
Or do you trust car manufacturors’ advertisments that promise xx mileage per gallon and they always have a disclaimers at the end. Im sure battery life and distance claims are no different.
Unless of course, you would like to drive your car to Calgary in January during a -40 cold snap and see just how far you car battery will last before dying. Now your stuck in -40 with a dead car.
A life threatening proposition.
Just sayin.
“Hayek’s message for victorious Republicans”
http://www.bloombergview.com/articles/2014-11-03/hayek-s-message-for-victorious-republicans
128 Retired Boomer – WI on 11.04.14 at 9:12 am
The bulk of electricity in Ontario (about 75%) is generated by nuclear and hydro. Go figure. “Too cheap to meter” my butt.
Home insurance premiums have been a bit more stable the last couple of years. Like you I check competitors every year, but we get a corporate discount so I’ve not found anyone cheaper yet.
In Ontario car insurance is mandatory but it seems many drivers don’t have it anyway. Illegals? Too expensive? Ontarians currently pay the highest premiums in the Great White North. Whatever… these days when you get into an accident you just can’t assume the other guy is covered. A place to stand, a place to grow, Ontary-ary-ary-oh!
Gas is Sumas, WA and a couple Bellingham stations is $0.728/L US.
Who needs an electric car now??? Bring on the Dodge Hellcats!!!!
It’s funny how people complain so much about regulations strangling small companies, yet here comes along Xiaomi (founded in 2011) and it is now the 3rd largest phone maker by volume in the world.
http://www.businessinsider.com/samsung-v-apple-smartphone-sales-and-profits-2014-10
“If I were to raise rates to stop people from being morons and indebting themselves buying assets destined to fall in value, he said (I might be paraphrasing a little), then we’d be decimating construction and the carmakers, and trashing jobs.”
*****************
Scotiabank just cut 1500 jobs and 120 branches across Canada, so job loss continues…
After all, the big US oil boom of late has that country barrreling towards energy self-sufficiency faster than anyone imagined. The Keystone pipeline, moving our stuff to their refineries, is in serious jeopardy of ever being built. The anti-dirty oil movement is alive and well in the States, as enviro warriors make the case against tar sands crude. That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero. And, most telling of all, two dudes on my street have purchased Teslas.
____________________________________________
As far as I’m concerned all these tree hugging bullshitters can kiss my ass. They all line up at their conferences and protests stating how evil oil is and especially tar sands. Well how the hell did you get to you dam conference? In a car, bus, plane. Holy shit we all use and need oil. Free clean energy isn’t here yet. When it is I’ll be the first to embrace it. Until then go protest against killing unborn baby’s, violence against woman, world poverty of for that matter any other important issue. The fact is we need oil, oil of any kind, otherwise you protesters will be hoofing it to your conferences via horse and buggy whilst freezing on a January day! Try sitting around a fireplace and talking louder instead of using electricity to amplify your voices!
BTW What is the environmental difference between tar sand and fracking? Fracking isn’t clean either! While this is a form of alternative energy, it also has harmful environmental implications, influencing local air pollution, earthquakes and, especially, clean water supply.
Rant done, feel much better now.
Garth dont you realize there are no rental controls in Alberta? Do you understand exactly what that is? If your landlord decides to raise the cost, he/she can.
Buying of a place has zero to do only with wanting a place. Is there peace of mind in knowing you must move your family if the landlord decides to raise the rent?
This isnt a simple equation of just investment. It contains many variables related to peace of mind.
Rents in Calgary are still in many cases higher than mortgages.
Would I rent if I could? Not likely given the cost of rent vs. buy. For those people that are older or want to move then of course renting would make more sense.
Easy to give advice to rent when you yourself in fact own properties and have that to fall back on.
Please paint a more balanced picture of consequences of renting vs. buying. Both options have good and bad consequences and that should be looked at province by province, city by city. But chances are you dont know, and you should admit that.
Once all costs of ownership are considered, including the missed opportunity cost of the downpayment, renting’s cheaper. The only advantage, over time, is capital appreciation. And those days in Calgary may rapidly end. — Garth
Sounds like a commie plot to me.
http://www.vancouversun.com/business/Opinion+Kowtowing+communists+wrong+approach/10339438/story.html
Mark : what’s going to drive house prices down? “
Oversupply, and widening risk premiums. Tighter credit standards (ie: CMHC’s changes to subprime loan guarantee rules). Which is what we’re now seeing, which is why house prices are declining.
I’ll buy that but then you’d expect to see more tightening of CMHC rules?
Canadian rates will eventually follow US rates, but with quite a long lag. Perhaps 6-8 years worth of lag, since Canada has the huge housing bubble to liquidate (figure 5-7 years), while the US bubble has been mostly liquidated in comparison.
the Canadian Government would deliberately drop housing prices? This is quite radical. I mean the policy up to now is just the opposite. Could they do this surreptitiously?
Re: #117 Karl hungus on 11.04.14 at 2:53 am
You just don’t get it. Property taxes will increase every year at the rate of ten plus percent due to the fall in the price of oil. The Canadian inflation rate is running at 2 percent or less. Condos in Edmonton fell 40 to 50 percent from the summer of 2007 to the fall of 2008. They have barely recovered 10 percent since that time. If the prices were too low they would have gone up many years ago.
Garth I’m pretty sure you wrote this article a year or two ago:
http://www.torontolife.com/informer/features/2014/11/04/the-bank-of-mom-and-dad/?page=all#tlb_multipage_anchor_1
“I don’t know why every time the topic of low interest rates comes up, someone chimes in and claims that ‘savers’ are being robbed. When evidence points to low rates creating quite robust returns for “conservative” savers and investors. Nobody is owed a risk-free, short-term return anyways, especially when risk takers have been getting little to nothing for so long now (just look at what the TSX-V has been doing!!!! risk takers in Canada have been killed!)”
You are confusing short term with long term
true decreasing yields generated extra gains for bond investor during the last several year, but going forward it seems that 10 yr Canada government bond investor can expect ~2% YoY return + interest increase risk. for new savers just out of college it is a significant hit
Was asked to transfer to Edm to increase sales. I said no and was laid off. I’m ok with that as it was nutty management anyways. They are betting on Alberta. I’m not. My sales calls in Cgy/Edm and all points in between showed “slowdown/decline/static” – thank you $90 a barrel. The next 24 months in Alta will be “softer” than today. Looked at an Edm 3 bedroom condo listed at $145K – passed as the monthly condo fees were $450 a month – a unit in a 3 story brick with 15 other apartments.
Love the commentary (as usual) today on Alberta. I’ll say Calgary “lags” when real estate in the rest of Canada drops. Christmas 2015 could be very quiet for retailers and even quieter for paycheck to paycheck people.
“Home loans slow consumer spending because of home expenses. While business loans make jobs.
We need to get rid of cmhc and start lending to businesses. Big and small business”
Exactly! You hit the nail right on the head! So much potential and job creation simply doesn’t happen in Canada because speculative credit and investment is overwhelmingly only available to one sector, housing.
I have lamented many times in comments on this blog that Canada’s largest telephone company, Canada’s largest railway, etc., with literally hundreds of billions worth of assets diversified across many industries and across the country pay higher rates to borrow for job creation than “Joe Sixpack” does on his mortgage. No wonder the economy is in bad shape, when consumer mortgage credit is given, by the CMHC subprime mortgage insurance, a credit preference over job creating firms.
“Scotiabank just cut 1500 jobs and 120 branches across Canada, so job loss continues…”
This won’t show on October unemployment numbers
Also this seem to be insignificantly correlated with their lending operation. When credit growth stops (and it will) the other banks will have to adjust their head count (in loan operations) for the diminishing business. We are only talking direct jobs here, the affect on indirect employment will be far bigger
Normally I would see that as normal adjustment to the business cycle, but we are lucky enough to simultaneously have dropping oil prices and irresponsible government policies
At least we have Garth to guide us through this mess. Other countries weren’t that lucky
#127 Dominoes Lining Up on 11.04.14 at 9:07 am
————————————————
Other contributors to green house gases (water vapour, carbon dioxide, methane) include animal (cow) burps, animal life exhalation/defecation/decay, volcanoes, forest fires, thawing permafrost, and any other natural sources.
Today’s dose of RE insanity:
http://www.ratehub.ca/mortgage-blog/2014/10/team-case-study-on-winning-and-losing-bidding-wars/
Couple who originally wanted a condo end up bidding on houses.
They went all-in on a place (presumably maxed out their budget) and then increased their office twice again on further rounds of bidding.
Comments?
“Congrats guys!!”
“Awesome job. Sounds like your real estate agent was a real star!”
Staggering.
“Regarding global warming. I think it is real. What I question is how much is the result of mankind’s activities & how much is just a natural cycle.”
—-
It doesn’t matter whether its real or not. Its in everyone’s long term interest to be efficient and protect our environment and if we let technology do its thing and knock a few lobbyists around, we will emerge the better for it.
The problem is that people don’t want to have displacement technologies because they haven’t got a plan B when their oil job or oil stocks implode.
Oil stocks are not only cheaper now than they were a few months ago, they are also less risky. This might not be the bottom for oil. But, this is looking like a good entry point for oil stocks. What are the chances we will stop using oil? What are the odds that the oil companies will cut production and force prices back up? Plus most of the oil companies pay a very generous dividend. This looks like a buying opportunity to me.
It wasn’t that long ago the talk among “experts” was that oil prices would keep going up, up, and up forever and ever because we passed peak oil. Now that it’s dropped below $80, the talk is that it’s going to keep going down, down, down. I heard all of this before in 1998, and we all know what happened after that year. Today I was driving my GASOLINE powered car around a city with a lot of other GASOLINE powered cars, I saw some trucks and buses driving around with DIESEL engines, and got stopped at a level crossing while a train, pulled by 2 DIESEL locomotives went by. I also saw many planes flying over, fueled by JET FUEL or AVGAS. Thanks for reminding me, my GASOLINE fueled car will need an OIL change soon. Meanwhile more people in emerging markets like China and India are trading in their bicycles for cars, and over here the sales of trucks and SUVs (including the Cadillac Escalade where you need to have a fuel truck following you around everywhere you go) have seen sales increase. Yup, I’m getting ulcers and having trouble sleeping worrying about the future of oil. Relax, it’s probably a temporary drop. Better yet scoop up some energy company shares while they’re still on sale. I’ll sign off now and scoop up more XEG, seeing as the Black Friday sales are early this year.
With all this talk of oil prices going down more and more I’m getting sucked into the time tunnel back to 1998. I think I hear Bittersweet Symphony and Lucky Man by The Verve, as well as Space Lord by Monster Magnet playing there. I’m also having fond memories of paddling the Main Channel of the Ottawa River in mid July of that year. Great fun!
Gwynne Dyer says 82 % of U.S. production will make money with 60 dollar oil.
are his figures right? and that fusion reactor?
we live in interesting times for sure.
http://gwynnedyer.com/2014/oil-blind-sided-by-technology/
http://gwynnedyer.com/2014/fusion-power/
During the night oil fell another 3.7 percent to $75.84 a barrel
____________________________________________Ouch looks like Alberta is going to crumble. OIL under $80 and Canadian Oil sands = LOSSES = JOB LOSSES = housing prices to fall 50-70%.
#104 Linda said:
“Regarding global warming. I think it is real. What I question is how much is the result of mankind’s activities & how much is just a natural cycle.”
No disrespect Linda, but do you realize how unbelievably ignorant and stupid this sounds?
Don’t sit there and opine like an ignorant blowhard. READ THE SOURCES!!!
In the UN report there is a 95% consensus among the world’s best scientists who DO read and study and experiment, that GHG climate change is human caused, and that the results are on track to be devastating if we do not get levels down to zero.
++++++++++++++++++++++++++++++++
Really? Worlds BEST scientists huh? Because the UN and Govt always tell the truth right? And uh…..about that “thousands of GOVT SUPPORTED” scientists number? 31,487 other scientists beg to differ with you……
http://www.petitionproject.org/
Awesome! Poloz lecturing canuckleheads’ adult kids
http://www.bloomberg.com/news/2014-11-04/poloz-sees-kids-in-the-basement-as-recovery-barometer.html
Re: #82 Obliquitous
I am legitimately concerned at your lack of understanding of why we have seasons. That concern may only be rivaled by your sarcastic reply which implies your ‘superior’ reasoning skills. It scares me that anyone with whom I share equal voting power would think that seasons are just some random occurence without basis. Read this and educate yourself:
en.m.wikipedia.org/wiki/Effect_of_sun_angle_on_climate
I also suggest you read this to understand why your plates don’t slide around:
en.m.wikipedia.org/wiki/Gravitation
Nextime just assume I know what I’m talking about. I don’t make blanket statements, nor do I subscribe to any particular belief without employing the scientific method of attempting to disprove myself.
@crowdedelevatorfartz, post #134:
You are quite right. I lived in Timmins for many years, where nights of -30 degrees or colder are common. It’s just as well I didn’t have an electric car there. If I did, then it’s a good thing most of the inner city is compact as I would have been doing a lot of walking, bundled up of course or riding the bus. In the foreseeable future electric cars will be a small niche market and not have a big effect on oil consumption.
Obvious Truth on 11.04.14 at 9:20 am
$1.12 for gasoline. Awesome.
Saudis are making a big mistake. Americans will seek ways to produce for less. They will end up punishing themselves.
Still think it settles in around here.
Canada has relied heavily on o and g for growth and revenue. It’s a big blow.
Our Feds ripped off investors many years ago. We could have got 10x these prices for all that stuff in the ground.
Another slow bleed for the canadian economy. Money is cascading out of this country right now.
Why have a penny in canadian stocks when your own government works against you?
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The Harper government HATES Canada and Canadians. I can’t wait until that sellout gets kicked out of office. Conservative voters have ruined Canada and have proven to be self hating Canadians.
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Really? Worlds BEST scientists huh? Because the UN and Govt always tell the truth right? And uh…..about that “thousands of GOVT SUPPORTED” scientists number? 31,487 other scientists beg to differ with you……
http://www.petitionproject.org
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Probably a better idea to use sources that don’t have roots going back to Exxon if you want a comment to be taken seriously.
“I’ll buy that but then you’d expect to see more tightening of CMHC rules?”
CMHC rules have been tightening over the past 4-5 years. Starting with the elimination of the 0% down option. The 40-year amortizations are gone. Premiums have risen. The $1M limit to a CMHC insured loan was enacted. Etc., etc. Things will continue to tighten as the politicians have made clear there will be no increase to the $600B limit of their subprime mortgage guarantee authority.
These changes, in particular, the ones implemented in Budget 2013, have had a profound impact on the market. In fact, Budget 2013’s changes marked the top of the market in most of Canada and prices have been on the decline ever since.
the Canadian Government would deliberately drop housing prices? This is quite radical. I mean the policy up to now is just the opposite. Could they do this surreptitiously?
No, the government has no control over housing prices in the long run. The market will liquidate the excesses in the sector by creating lower prices. Which is exactly what has been happening over the past year or two, albeit not at a very rapid pace, but very likely to accelerate in the coming months/years.
In order to shut down the production of excess houses, prices have to drop below the cost of production. Which means that prices have a long, long ways to fall.
#113 SurreyMom on 11.04.14 at 2:12 am…
While I applaud the Leaf, it’s had problems in hot and cold climates as others have pointed out. It’s not practical as a summer car in Arizona or a winter car outside of a few cities in Canada.
We looked at the Leaf here, but with AC on and maintaining freeway speeds the range was only about 100km – not practical when say a round trip from our place to the nearest Ikea is about 130 km. In colder climates like the prairies the range is also around 100 km.
There is a battery replacement program here in AZ because of the poor range in the 2011-2013 models, but it’s $ 5500 US plus installation. Maybe that’s why there are quite a few for sale around $ 15K US.
One of the problems is keeping the batteries in the ‘sweet’ zone around 15-24 Celsius.
The Leaf uses outside air to cool batteries, whereas others use AC cooling.
So unless you are living in an area where the temperature is mild, or can live with a 100km range, it’s not a practical alternative to fossil fuel vehicles!
But overall the move towards electrics is positive, and will get better as batteries improve and prices fall.
#149 Mike S on 11.04.14 at 12:24 pm
“Scotiabank just cut 1500 jobs and 120 branches across Canada, so job loss continues…”
This won’t show on October unemployment numbers
Also this seem to be insignificantly correlated with their lending operation. When credit growth stops (and it will) the other banks will have to adjust their head count (in loan operations) for the diminishing business. We are only talking direct jobs here, the affect on indirect employment will be far bigger
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This follows my theme of how companies are “making lots of money” but what you don’t hear about is the cuts, firings, closing of stores etc etc to make said profits. Its a false “recovery”.
“You are confusing short term with long term
true decreasing yields generated extra gains for bond investor during the last several year, but going forward it seems that 10 yr Canada government bond investor can expect ~2% YoY return + interest increase risk. for new savers just out of college it is a significant hit”
Hopefully “new savers just out of college” aren’t buying GoC bonds for anything but a trivial amount of their portfolio. Hopefully they get themselves to see someone like Garth or someone similarily knowledgeable and trustworthy and get themselves into a portfolio that is suited towards the sort of long-term investment that actually can earn money. Practically any sort of diversified business investment is better than buying government bonds in the long run.
Nobody should expect to “save” in GoC bonds and accumulate much of anything on such. After all, government produces nothing. The past few decades’ returns on bonds, government bonds especially, have been quite abnormal.
And those days in Calgary may rapidly end. — Garth
May indeed. But will not. Real estate is a religion here.
#160 Kenchie
RE: Poloz lectures
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This is the best advice this guy can give.
UnFreakingbelievable!
Scotiabank axing 1500 jobs, two-thirds of them in Canada and oil is trading at 76.60.. You do the math.
#158 RealistvsExtremist
Well your moniker is half right – the second half.
You are spooky dumb. But now irrelevant.
The UN report, and what lies ahead, makes all the conspiracy nuts in their underwear tapping on the keyboard irrelevant.
Progressive leaders in the world are now moving forward. (this does not mean it may not be already quite late for action, but what else to do)
Enough evidence is in.
BTW – gawd, yer dumb….your petition is “easily-debunked propaganda”
http://www.huffingtonpost.com/kevin-grandia/the-30000-global-warming_b_243092.html
“So unless you are living in an area where the temperature is mild, or can live with a 100km range, it’s not a practical alternative to fossil fuel vehicles!
But overall the move towards electrics is positive, and will get better as batteries improve and prices fall.
“
I personally suspect every last Tesla owner also has a petrol-fired vehicle sitting in their garage/driveway as well.
So what’s the “real” cost of a Tesla? The $90k? Or $90k + $40k for a suitable “backup” vehicle? And likewise, plates on a second vehicle probably, for most people, end up being just as much as the petrol allegedly saved by driving a Tesla.
Until these things are mature enough, and have sufficient range, they’ll be, at best, rich mans’ toys.
“This follows my theme of how companies are “making lots of money” but what you don’t hear about is the cuts, firings, closing of stores etc etc to make said profits. Its a false “recovery”.”
Scotia cutting all those jobs is actually a positive sign, that they realize that the future in Canadian banking is larger financing deals to business – not the nickel and dime stuff to ‘consumers’ in the branches.
Business credit, not consumer credit, actually creates jobs in the long run. Hopefully the other banks follow suit and similarly trim their consumer/retail-focussed operations as creditworthiness is rapidly diminishing in that sector. The home equity gravy train has come to an end, so there should be decent growth in the collections and insolvency sector as well. If anyone knows any investment opportunities in the bankruptcy trusteeship business, please let me know :).
For the Saudi government oil exports make up about 85% of their total revenue. Right now they are sitting on $735 billion in cash reserves and have an outstanding credit rating.
What is the current balance in the Heritage Trust Fund in Alberta $12 billion. They can play this game for a long time. Could be interesting!!
How baby boomers are propping up (and maybe even destroying) Toronto’s real estate market.
http://www.torontolife.com/informer/features/2014/11/04/the-bank-of-mom-and-dad/
Interesting twit pic: inventions in the iPhone
https://twitter.com/MazzucatoM/status/529551153567395841/photo/1
How do you like my forecasting Garth?
BoC and the Finance ministry will sacrifice the CDN dollar. They all have their $$ in USD.
#164 Dean on 11.04.14 at 1:25 pm
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Really? Worlds BEST scientists huh? Because the UN and Govt always tell the truth right? And uh…..about that “thousands of GOVT SUPPORTED” scientists number? 31,487 other scientists beg to differ with you……
http://www.petitionproject.org
……………………………………………………………………….
Probably a better idea to use sources that don’t have roots going back to Exxon if you want a comment to be taken seriously.
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Like Govt and the UN should be taken seriously?
Enough evidence is in.
BTW – gawd, yer dumb….your petition is “easily-debunked propaganda”
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Let’s snowboard down the pyramids this winter and discuss this further. Or how about let’s go ice fishing when the great lakes completely freeze over….again. Actually the best one is lets sail a boat through the non-frozen over North West Passage and discuss this in greater detail. Oh wait……Facts are Facts Jack.
I know that it’s common knowledge among Canucks that we consume so much energy because it’s such a big country, and it’s so cold here. American sitcoms only mention the country when making fun of it for being cold, so it must be so. And so we couldn’t possibly adopt electric cars- country’s just too damn big.
Apologies in advance for helping facts get in the way of a perfectly good prejudice, but the average Canadian commute is less than ten kilometres, and the average temperature at Toronto Buttonville last February (a cold winter) was -9.2. Plus, 3.5 million Canadian homes have attached garages, not to mention the detached kind. So I’m not sure where the range anxiety and paranoia over “-40” (whoops- Saskatoon never did quite hit -40 last winter) come from.
Tony,
Let’s hear your prediction for Edmonton real estate for 2015. I’m all ears
We haven’t seen anything yet reg. crude. If $71.67 gets breached, look out below! There no strong support below that. Poor greater fools buying real estate in Calgary, you almost have to feel sorry for them. Crude could prove to be a great buying opportunity, if it drops another 50%. Not touching a falling knife otherwise.
HVU looks great. Been buying since Friday. Hope it goes to low 14s/ sub 14 today so I can get some more. If S&P didn’t go anywhere significantly past the previous high following Japan’s latest QE announcement, not much can move it higher (ECB told to stay put for now).
Come on closing rally! Let me get some more cheap HVU baby!
#117 Karl hungus on 11.04.14 at 2:53 am
Good time to buy in edmonton. Especially compared to Calgary. Nice price jump coming in the spring. My guess is 10% for 2015.
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LMAO
#180 Rational Optimist
Your garage is heated? There goes all that energy you just saved being “green”.
The average commute is irrelevant, because the average person drives far more than that.
Stoopud Canuckleheads!
“Canadians spend more income on housing than almost anyone in the world”
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/canadians-spend-more-of-their-income-on-housing-than-almost-anyone-in-the-world/article21369414/#dashboard/follows/
#82 Obliquitous
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Just amazed that your were unaware of
the winter and spring ‘earth-tilt’ phenomena.
Dominoes,
This isn’t even a debate.
From: M. A. Kominz, Western Michigan University, 2001.
“For example, about 20 000 years ago, great ice sheets covered northern North America and Europe. The volume of ice in these glaciers removed enough water from the oceans to expose most continental shelves. Since then there has been a sea level rise (actually from about 20 000 to about 11 000 years ago) of about 120 m.”
Glaciers cyclically melted raising the sea level 120 M (393 ft) within the last 20,000 years. 120,000 millimetres divided by 20,000 years = 6 MM rise in sea level, per year.
Here is why:
“This is just the most recent of many, large changes in sea level caused by glaciers, These variations in climate and subsequent sea level changes have been tied to quasi-periodic variations in the Earth’s orbit and the tilt of the Earth’s spin axis.”
http://curry.eas.gatech.edu/Courses/6140/ency/Chapter10/Ency_Oceans/Sea_Level_Variations.pdf
NO OIL being burnt 10,000 to 20,000 years ago = Sea level change is natural = End of conversation.
“How bad are things in Canada’s job market? Bank of Canada Governor Stephen Poloz says bad enough for young people to consider working for free.”
http://blogs.canoe.ca/davidakin/?p=108361
To all the “kids” living in their parents, and all the parents grappled with housing their base-dwelling adult children, here’s what our hero Poloz has offer:
http://www.bloomberg.com/news/2014-11-04/poloz-sees-kids-in-the-basement-as-recovery-barometer.html
If you don’t have time to check out the link, he wants you “kids” to work for free to support his condo-based economy…but just until the recovery takes hold (it’s only been what, six years and still counting?). Unfortunately, he doesn’t have any suggestions as to how you might pay off your student loans.
Talk about wasted “adult” youth.
chapter 9 on 11.04.14 at 1:49 pm
For the Saudi government oil exports make up about 85% of their total revenue. Right now they are sitting on $735 billion in cash reserves and have an outstanding credit rating.
What is the current balance in the Heritage Trust Fund in Alberta $12 billion. They can play this game for a long time. Could be interesting!!
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the Saudi government can crush Canada/Alberta with their pinky finger. Cow town is going to face a world of hurt. Those who are buying RE will go bankrupt and lose it all.
I predict that within the next 100 years about 7 billion people will die. Think about it!!
https://www.youtube.com/watch?v=p4m-lNi61Rk
Holy Crap Wheres The Tylenol on 11.04.14 at 11:07 am
After all, the big US oil boom of late has that country barrreling towards energy self-sufficiency faster than anyone imagined. The Keystone pipeline, moving our stuff to their refineries, is in serious jeopardy of ever being built. The anti-dirty oil movement is alive and well in the States, as enviro warriors make the case against tar sands crude. That UN report out two days ago on climate change was a game-changer, saying GHG emissions have to move to zero. And, most telling of all, two dudes on my street have purchased Teslas.
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As far as I’m concerned all these tree hugging bullshitters can kiss my ass. They all line up at their conferences and protests stating how evil oil is and especially tar sands. Well how the hell did you get to you dam conference? In a car, bus, plane. Holy shit we all use and need oil. Free clean energy isn’t here yet. When it is I’ll be the first to embrace it. Until then go protest against killing unborn baby’s, violence against woman, world poverty of for that matter any other important issue. The fact is we need oil, oil of any kind, otherwise you protesters will be hoofing it to your conferences via horse and buggy whilst freezing on a January day! Try sitting around a fireplace and talking louder instead of using electricity to amplify your voices!
BTW What is the environmental difference between tar sand and fracking? Fracking isn’t clean either! While this is a form of alternative energy, it also has harmful environmental implications, influencing local air pollution, earthquakes and, especially, clean water supply.
Rant done, feel much better now.
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You world polluting tar sand crazies are going DOWN and face a WORLD of financial HURT. You economy in Alberta is going bye bye as the Oil and gas stocks are CRASHING to the ground. What do you think will happen to the economy???? NO JOBS….NO MONEY?? GAME OVER
#173 Mark on 11.04.14 at 1:44 pm…
I suspect most fossil fuel vehicle owners also have a second vehicle sitting in the driveway. We had two (for two people) until we retired.
We have test driven a Leaf and a Tesla (used) here in Phoenix, and while the Leaf is neat, the Tesla is amazing – one of the most amazing cars I’ve ever driven.
Still, it would only be practical if we limited our trips within the range of their charging stations.
Petrol? Are you really Mr. Carney, and if so, when did you forget the NA lingo for auto terms?
Smoking Man, my sincerest condolences on the passing of your mother and nephew.
Canadian Oil Sands NEW 52 WEEK LOW > IF it breaks $14.89 support look out below . Here is the NASTY chart
https://ca.finance.yahoo.com/q/bc?s=COS.TO&t=5d&l=on&z=l&q=l&c=
Canadian Oil Sands Ltd (COS.TO) -Toronto
16.03 Down 1.02(5.98%
If you don’t have time to check out the link, he wants you “kids” to work for free to support his condo-based economy…but just until the recovery takes hold (it’s only been what, six years and still counting?). Unfortunately, he doesn’t have any suggestions as to how you might pay off your student loans.
Yeah, I know, unfortunate, eh? The economy was in shambles 2001-2007, and turned down again in 2008. There’s people who graduated over a decade ago with good, but out of favour degrees (ie: in the technology fields) who still haven’t gained much traction in the job market. Poloz’s comments of telling those people that they should be working for nothing are, to say the least, highly offensive. Governments, and even central bankers, have a role in ensuring that fiscal policy is set in such a way to create jobs.
At this point, with the high real unemployment in Canada, even 1% BoC policy rates seem way, way too high. And CMHC’s role in distorting savings, house prices, and investment in Canada cannot be understated.
Can it be so – government announces care giver immigration for next year. Then BofC advises young Canadians to work for free.
http://www.winnipegfreepress.com/canada/leave-folks-basement-boost-cv-by-working-for-free-boc-tells-jobless-youth-281480111.html?cx_navSource=d-more-news
How fast can we race to the bottom, and what will we do when we get there?
Jesus, once I quipped that perhaps the next bubble would be a slavery bubble. I was just kidding, but…
#193 Inglorious Investor
I’d say that within the next 200 yrs. we’ll be back to historic human population levels on the planet, about 1 billion – give or take. Then I’m also aware that I’m on planet of the apes, and that they think they’re gods, atm. The tool using monkey, having learned to burn ancient biomass (fossil fuels) thinks it can outsmart consequences. There’s nothing new about ape man competing for sex, food and power. Fossil fuels allowed us to extend our power – the ability to manipulate, deceive, control and dominate the world around us, for a time. It’s the delusions based on denial that are baffling. Ape man is pretty straight forward and nothing new.
#197 Bye Bye RE in CowTown
Look at (NKA) Niska Gas Storage Partners, it’s taken a 50% haircut the last 5 days
http://www.stockwatch.com/Quote/Detail.aspx?symbol=NKA®ion=U
“Choosing the lessor of 2 devils is still evil”. Well, easy money policy is going to continue worldwide until something breaks. My fear; revolutions or war – take your pick.
IMHO, debt = assets although the correlation varies from 1 over time. It seems to me, the QE exercises have simply been an exercise to protect debt repayment by keeping the financial sector from collapsing. Those that have lent are expecting to be repaid though savers are not considered lenders. It is sad that most people get wealthy by using other people’s money and using schemes to avoid liabilities if their ideas go bad. It is disappointing to me that income disparity took so long to become a political issue.
Our financial problems are not that the world is producing less but how the wealth/income is allocated. Too many people are overpaid – cough, elites, cough. I am not happy to bail out spendthrifts or incompetents (Peter Principal) but my blood boils at the generous separation compensation of “elite” failures/jerks. Boy, do they ever protect one another’s back. In Alberta, the Merali “vindication” makes me sick and angry enough to burn down the barn to kill the rats.
Relax, I am not in power.
As John Kenneth Galbraith observed: “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”
I will pick revolution.
#197 Bye Bye RE in CowTown
Pennwest was all the rage way back when! Natgas to the moon!
Pull up the ten year on this chart. Ouch!
http://www.nasdaq.com/symbol/pwe/interactive-chart
#200 Inglorious Investor
I may know you, but in that case Jesus would be blasphemous. Empathy and compassion are christian nonsense. hahaha
I’m quite certain I’ve met SWL1976, but only Ron would know – the aliens may have told him. lol I’m working on the clay. I may still call you for yellow cedar in the spring.
SWL1976
“There’s no time like the present.” “Expect less”. Indeed.
Involuntary Simplicity
http://thearchdruidreport.blogspot.ca/
@#152 Son of Ponzi
“All north american garbage for 1000 YEARS could fit in a single garbage pit that is 25 square miles.
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How heigh?”
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I may be going out on a limb here but I’d guess 25 miles high?
Which is quite horrific if you think about it.
A pile of garbage…
25 miles wide, 25 miles long, and 25 miles high. Imagine Toronto or Montreal buried in garbage25 miles high (actually I smiled imagining that)
Since most planes fly at about 7 miles high the garbage pile would be almost 3 times higher still than the jet you were flying on.
Nifty.
A garbage pile you would have to dodge in a jet and could see from space.
i have a better idea.
How about we create an island in the middle of the Pacific called “Gyre” and let everyone toss their garbage in it to make the island “bigger”.
Eventually we’ll have a new continent.
Kinda like this pathetic attempt at “Nation building”
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&sqi=2&ved=0CCMQFjAB&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FGreat_Pacific_garbage_patch&ei=y2NZVIq2MLD1iQLn4YDwCQ&usg=AFQjCNFUax_8BswSaPvbh0IkNU_QIMt2ZA&bvm=bv.78972154,d.cGE
Nonplussed @100 sez:
“But with oil and gas, the situation is a lot easier to explain than a new gadget. If the Saudis keep pumping oil into the US to drive down oil prices, horizontal drilling will not survive. Energy independence will be a myth. It’s predatory pricing at it’s finest. Unfortunately, I read today an analyst who thinks the Saudis could keep it up for almost 8 years, hardly affecting Russia but killing US horizontal shale plays. 8 years is a long time to keep a money loosing venture in business.”
So it’s only a matter of time until the US “figures out” the Saudis are “terrorists”? When does WWIII start?
#125 Van Isle Renter “Besides, the recharge draw would wipeout the grid if more than a handful of people used them.” and #134 crowdedelevatorfartz ” Cold weather affects battery life. That is a fact……..I think 100km per charge is a reasonable average assumption”
Again with the Henny Penny predictions based on nothing more than your bias. Electric car owners are not asking you to adopt their solutions. I am merely pointing out an electric car is a very cost effective and convenient mode of transportation for my husband and myself. In the future I fully expect to pay the 70 cents it costs the public grid to charge my vehicle if I use a public charging station. Meanwhile I’ll suck on my tailpipe if you suck on yours.
#127 Dominoes: Actually, I have read quite extensively. Both for & against. And if you have to throw insults at someone to make your point, you have already lost the argument.
Much scientific, not based on proving someone’s holier than thou point data has been compiled. Global warming/cooling has occurred many times & mankind (nope, we are not super powered beings, sorry) were not responsible. Heck, in earlier times when global warming/cooling occurred we were at best swinging from the trees.
As for dropping to zero based emissions, really? So, you propose what? No oil based economy? No gas? Can’t burn wood or coal as that releases yet more greenhouse gas. Just wear an extra sweater or three, try to keep the pipes from freezing during the cold weather we have here without using oil, gas, coal, wood? What is left – thermal! Excellent, if you happen to live where it is handily tapped at a cost the average Joe can pay. Iceland does geothermal but then Iceland is essentially sitting on Mother Natures equivalent of a big bad boom. As for all that evil oil, well, good luck with replacing all the stuff oil is used to produce & even better luck recycling all that oil based stuff without making even more of a mess. Or adding to that global warming effect.
Great picture of a great electric vehicle today.
After owning and driving an electric vehicle for over 3 years (over 50000km), I can say that I will never buy another gas vehicle again. The range of 100-175km meets our needs 99% of the time, and we simply rent a car or other vehicle for those other times.
It’s more convenient to plug in at home and charge at night. Driving about 350km in a week costs about $8 in hydro. Gas will never be that cheap! Maintenance costs are much lower (no oil changes, no emission testing, etc). I only need to take the car in ONCE per year.
As the world slowly switches to electric vehicles, the demand for oil will drop significantly in the future.
Oh, and his energy policy is on track to make the US energy independent. Compare the US scorecard with our country and we are not in the same league. I was in Calgary a couple of weeks back getting a lay of the energy investment world and the black swan event is on and they have nothing in their quiver to fight these low oil prices.
DELETED
Deleted? Really?
Really. — Garth