Managing risk

BEARS1 modified

She’s early thirties, renting and saving. Big saving. “I, along with my partner have saved approx. $200k over a number of years in the hopes of buying a home with a decent downpayment,” she posted yesterday.

Of course, that makes her special, since saving’s so retro. But she says they want to buy a house when the time is right (not yet), “thus our dollars remain fairly liquid so we can be well positioned to take advantage of opportunities when/if they present themselves.”

But here’s the dilemma:

“I’m torn between making solid long term investments in the financial market and continuing to rent for the next 5+ years, or, staying liquid in preparation for housing prices to fall. I sit in limbo and end up losing on both fronts (no real market exposure = no real upside on my savings). Could you provide some insight as to what you might do if you were in my shoes? If you could discuss proper allocation strategies or parameters – even better!”

Good question. One which most financial advisors get wrong. And most young couples.

First, buying real estate without an adequate down payment means extreme leverage, which brings added risk. No, houses do not go up forever. Therefore, buying with 5% down and twenty-times leverage means a lowly 10% correction in the market would wipe out all your savings. You’d owe more than the property’s worth. If you don’t think that’s possible, come back this time next year. We’ll talk.

Then there’s the CMHC premium, which is north of 3% of the mortgaged amount for a minimal down payment. On a $500,000 mortgage, the cost is almost $16,000. Most people add this to their mortgage, so it gets amortized and effectively doubled over time. Your property then needs to appreciate an extra $30,000 just to break even. Bummer.

In short, a big down is good. This woman gets it. But what sense does it make to keep $200,000 in the tangerine guy’s shorts at 1.3%, when the inflation rate is 2.03% and all of the interest is taxable at your marginal rate? And what if house prices in your hood rise by 5% while you’re saving?

Right. Fail. That money is actually shrinking due to inflation and taxes while you sit on it. Even at double or triple the interest rate, you’re falling further behind. And if you lock the cash into a five-year GIC to boost the return to 2.8% at some godforsaken online Lithuanian steelworkers’ benevolent Manitoba credit union, it’s not available to you should a great house deal materialize in 20 months from now.

So, saving isn’t an option. The [email protected] bank is steering you wrong when she shoves you into a “high-interest savings account” or a cashable GIC. And don’t even think about one of those market-linked puppies.

Instead, invest. But in a fully-liquid portfolio with a system of checks and balances incorporated. That comes in the form of a careful balance between stable, income-producing assets, and things meant to grow. It also arises from diversification, avoiding having too many eggs in one basket.

Regular, terminally bored readers will know I favour 40% safe stuff (a mix of government, corporate, high-yield and inflation-indexed bonds, plus preferred shares) and 60% in growth-oriented assets (some REITs, plus ETFs holding large and small companies in the US, Canada and internationally). The best way for most people to achieve all of this is through low-cost, highly-liquid ETFs (exchange-traded funds). For example, a single asset can deliver a massive amount of diversification (the ETF called XSP holds 500 of the largest US corps; XIU gives you the 60 biggest in Canada).

Now, what about risk?

Novice investors hoping to buy a house in two or five years live in fear that the market will crash the day before they make an offer. This is irrational. The biggest market decline since 2011 happened a month ago when the TSX dropped 10% and the S&P shed 9%. It lasted about three weeks and at the height of the chaos the balanced portfolio was lower by 1%. Yes, a whole 1%. Then it recovered.

Why so little damage? Because as the stock component of the portfolio declined, the fixed-income part (bonds, preferreds) rose, as money flowed into safer assets. That’s exactly what a balanced portfolio is intended to achieve. Meanwhile the preferreds kept on paying dividends, the bonds paid interest and the REITs made regular cash distributions. This balanced portfolio, by the way, earned over 11% last year and delivered 7.3% a year on average over the last decade – which included the 2008-9 bust.

And what if interest rates start to rise? Won’t the value of bonds and preferred shares decline? Yes, they will. But we all know interest costs will increase slowly since the economy is weak. And the moves will be telegraphed well in advance.

Finally, remember the gains made by this portfolio are largely in the form of dividends and capital gains, not interest. So the tax payable on the growth is at a rate 50% lower than the pittance delivered by the orange guy. And if you achieve an average of 7-8% while you wait five years for house prices to correct and risk to fall, your downpayment could increase by half.

So, why wouldn’t you do this?

Because you’re scared, I bet. Then get a smart person to help you, to manage it daily, rebalance, avoid risk and shelter some gains within your TFSA or RRSP. You might just find investing beats the pants off mortgaging your future for a slanty, bug-infested hipster semi. Your father will be devastated.

About the photo: Tim writes: “When I saw the picture featuring the 2 “hunters” who killed a bear I had to send you a note.  The picture is offensive and glorifies the pleasure killing of one of nature’s most beautiful animals. Based on your previous postings I thought you had a lot of compassion for dogs and I presumed that extended to other animals – I guess I was wrong.”

My reply: “I agree. The portrayal is barbaric, and I used it is because it embodies the concept of natural revenge for human cruelty. It is about the consequences of thoughtless actions. The hunters are now the hunted.”

191 comments ↓

#1 Derek R on 11.14.14 at 7:26 pm

Good stuff, Garth. Everybody needs to know this.

#2 JSS on 11.14.14 at 7:29 pm

“a lowly 10% correction in the market would wipe out all your savings. You’d owe more than the property’s worth.”

If you like the house, planning on living there for a number of years, and are making regular mortgage payments, what’s the big deal?

Go ahead. See how it feels. — Garth

#3 Jas Girn on 11.14.14 at 7:31 pm

Great article, as usual!

#4 Cato the Elder on 11.14.14 at 7:31 pm

Who is Harper working for? The Canadian people, or bankers that want to enslave the world?

http://www.dailytelegraph.com.au/news/russian-media-releases-satellite-image-claiming-to-show-mh17-shot-down-by-ukrainian-fighter-jet/story-fniztvnh-1227123846130?nk=28754430fe535c1cd60bfab19cd445e7

The real reasons behind the Ukrainian situation are coming to light. Russia doesn’t want to be a slave to the US petrodollar anymore. Russia is buying huge troves of gold and silver, just like China is. We are heading for a day of reckoning and EVERY Canadian is vulnerable. Our politicians chose to sell off all our countries’ wealth a few years ago at terribly low prices. All part of the banking takeover of our country.

#5 calgaryPhantom on 11.14.14 at 7:31 pm

Great post Garth. Thank you!

Fast forward five years, She has made 7% every year on her investments. The housing corrects, and now she is ready to buy. ( Exactly what i envision for myself)

I have never bought a house in Canada, and if i were to, i have no idea how to approach buying a good deal on houses.Specifically, how to know if the property represents a good deal or not , where to compare with other houses and find out the last listed prices for that property?

May be next blog topic? Plz n thnx

#6 Goldie on 11.14.14 at 7:34 pm

” Your father will be devastated…”

Well, you kept your word. But don’t worry: they’ll find something else to get angry at you for (’cause that’s what they do!)

#7 EarlySpring on 11.14.14 at 7:37 pm

But I thought it was always Mom who wants me to buy the real estate????

#8 Mike S on 11.14.14 at 7:42 pm

“So, why wouldn’t you do this?”

60%/40% portfolio is not suitable for people with investment horizon of 20 months, and it can go down for more than 1% in a given year.

It is not about being scared. it is about planning for investment horizon and risk tolerance.

Not sure how this advice helps. a better advice would be to never buy a house in a housing bubble (like now) and go long term investing (completely forgetting about that house in 20 months).

#9 crossbordershopper on 11.14.14 at 7:49 pm

for 200 grand you can easily get a nice towny outside of the main toronto market. smaller city, not to far from work. what are you going to do rent all your life, and have a tone in etf’s? who cares, buy something own something. buy a lawnmower and a hammer, be a farmer, there all rich, because they own stuff. grow stuff people need, like food. cant be fired since they are sell employeed, tax benefits running your own business, write off’s ccpc tax rate is low etc etc.
either way, its not about buying or renting because in the end you will own, all normal people own, only loosers rent. trust me, i live with the little people, they all rent, because they have no job, poor health, and no money and no mommy to help them. its that simple.

#10 OnYourMarks on 11.14.14 at 7:51 pm

FIRST!!

#11 saskatoon on 11.14.14 at 7:54 pm

pigg propaganda:

http://www.thestar.com/business/2014/11/14/the_great_toronto_rebuild.html

highlights:

“What’s driving a lot of this is people’s desire to live in the city, but they want some of the same amenities as in the suburbs. East York bungalows just aren’t practical by today’s standards, even for a couple,” says realtor Pasalis.

“What we’re going through now is a regeneration of the city, which may be affecting affordability, but where the benefits far outstrip the negatives.”

This renovation and rebuilding boom is fuelled by… “a major structural shift in the consumer market for housing.”

#12 Butch on 11.14.14 at 7:54 pm

5 years? Ugh. Buying in 08′ would have been the smart move maybe?

#13 VanDammeCouver on 11.14.14 at 8:03 pm

“The biggest market decline since 2011 happened a month ago when the TSX dropped 10% and the S&P shed 9%”

The S&P500 had a series of drops in 2007 around 7-10%, before it really dropped hard in 2008 and beginning of 2009. A balanced portfolio would have gone down 12-15% during that time.

According to that logic, a recent 10% drop and recovery means were cool. I’m not sure I agree.

Market cycles are typically 7-9 years.

If it were me, I’d be closer to 25 stocks/75 safer stuff.

But that’s just my pathetic opinion.

#14 Babblemaster on 11.14.14 at 8:06 pm

In USA, post 2006, there was a massive correction in housing prices. Vast numbers of people had their mortgages “adjusted”. Obama said it was the right thing to do. Thus, people that were responsible and didn’t blow their brains out with debt were left to watch other carefree folks have their debt forgiven.

Why couldn’t that happen in Canada?

#15 Freedom First on 11.14.14 at 8:10 pm

#9 crossbordershopper.

*****Warning. Troll alert.*****

Good advice to this woman and her partner Garth. I am a regular reader, but never bored with reading your sound financial advice, always delivered with wit, plus the added comments of my fellow dawgs. And that includes #9 today too. I enjoy them all.

#16 Chickenlittle on 11.14.14 at 8:17 pm

“because in the end you will own, all normal people own, only loosers rent. trust me, i live with the little people, they all rent, because they have no job, poor health, and no money and no mommy to help them. its that simple.”

No money, poor health, family gone, abysmal employment opportunities. ..and you have the nerve to call them “loosers” (by the way it is “losers”).
I hope nothing bad ever happens to you…I wouldn’t want you to be a “looser”.

Garth rents..is he a loser?

#17 crowdedelevatorfartz on 11.14.14 at 8:23 pm

@#4 Cato the senile

OMG

A link to a story provided by the Russian “news” media.
You’re kidding right?
You think that Harper is working for “someone else” but you accept, verbatim what the Russian “news” media spews forth?
Wow! The naivity. The paranoia.
This is the same Russian media that just got a tad smaller due to the fact that Vladimir Putins govt passed a law last month where “foreign ownership” of all the news media in Russia cannot exceed 20% .
Thus crushing all remaining dissenting opinion left in that rapidly growing dictatorship.
Tatiana Lysova the editor of Vedomosti, a respected daily business newspaper was in a meeting at the Kremlin last year and was told by one Vladimir Putins advisors, “You work for a foreign state!” Due to the fact that Vedomosti was owned by three foreign companies(2 british,1 US).
Putin is suspicious of anything, or anyone, that he doesnt control.
He’s squeezing the freedom “vice” tighter.

Your assumption that “gold and silver” will save Russia and we’re doomed due to our credit backed dollar.
Dream on.
I’ll take my fiscal chances here.
Buying gold and silver wont save them from an aging population(20% over the age of 60 and increasing), a population that is unproductive, unhealthy(men die at 62 on average).
40% of Russia’s economy is oil based. Nothing like having a majority of fiscal eggs in one basket. The US embargo is having an effect. Russia’s $370 Billion dollar “rainy day” surplus fund is whittling down inexorably( $100 Billion so far).
And while the population is currently still swallowing his exenophobic diatribes against the west…..The mothers are already protesting the sons arriving home from the Ukraine( oops! There’s no Russian troops in the Ukraine? Another western lie!). But I digress. Soldiers arriving home in body bags.
I give Putin 5 more years before his head is on a pike and paraded through Red Square by his own people after a coup by one of his own trusted advisors.
Et tu Brute?

#18 DR. WAYNE on 11.14.14 at 8:27 pm

Your usual great article … the photo is disturbing …

#19 sayitaintso on 11.14.14 at 8:29 pm

according you the chart you provided a few weeks back, your “safe” portfolio lost 33% of it’s value during the 2007/8 collapse..

The balanced portfolio declined 20% in 2007-8 when stock markets fell 60%. It gained 26% in 2009 and 15% in 2010. Since then it has averaged 10.1%. The portfolio did what it was designed to do, in the worst market fall in 80 years. I do not foresee another such event. — Garth

#20 Obvious Truth on 11.14.14 at 8:35 pm

“SCARED”

Hit the nail on the head. Can’t tell you all the people that tell me that I could loose all my money in the stock market. It’s not safe.

They say this seriously and with concern.

I tell them if I loose 30 % they are likely in a lot more trouble than me.

They don’t get it.

#21 Harbour on 11.14.14 at 8:36 pm

Can Bill Gross’s $290 million bonus from Pimco be justified?

http://finance.yahoo.com/news/if-pimco-paid-bill-gross–290-million–what-does-it-mean-for-investors-183423708.html?bcmt=1416009709610-00165229-e149-4ba6-8799-7b0c88b5d4c3&bcmt_s=u#mediacommentsugc_container

Capitalism at it’s finest

#22 omg the original on 11.14.14 at 8:47 pm

#2 JSS
“a lowly 10% correction in the market would wipe out all your savings. You’d owe more than the property’s worth.”

If you like the house, planning on living there for a number of years, and are making regular mortgage payments, what’s the big deal?
————————————-

I think you are correct for long-term holders – 10% is no big deal. I live in Victoria were we have seen about a 15% drop since 2010 and nobody really seems to notice it until they go to sell.

If you have bought for the long-term its not a 10% correction people should worry about, its the 40 to 50% correction that could happen if some Canadian markets revert to the historic mean.

#23 Cato the Elder on 11.14.14 at 8:48 pm

Re: #17 crowdedwhatever

You’re a fool that has had their mind completely captured by western media.

There are 6 major companies that control 90% of US media, and almost all of them have divisions that manufacture weapons for the US military. If you had any critical thinking skills, you would suspect that it may lead to bias in reporting. Many Canadians receive their news from these very sources.

Russia is no saint, and neither is Putin. However, something that makes no sense whatsoever is to shoot down a civilian airliner when the entire world is watching. What DOES make sense is when the West is trying to create a justification for war to have an event like this evoke an emotional response from their citizenry. This is very similar to the Syrian ‘chemical attack’ allegedly purported by Assad against his own citizens, which turned out to be untrue. And I’m sure at the time, you were clamoring for intervention and denouncing his wickedness. Fool.

The regions of Ukraine that no longer wish to take part have a RIGHT to secede. They held a democratic referendum, and voted out. Ukraine does not wish them to leave, and is committing genocide in that region. Of course, when Quebec or Scotland wish to have a referendum, it is allowed. What hypocrites we westerners are.

Regarding MH17, even a cursory glance at photos of the fuselage will reveal to an amateur that it is riddled with bullet holes. Bullet holes that are impossible given the Western ‘story’ of a ground to air missile launch. It WAS destroyed by an air to air delivery system, most likely Ukrainian. There is evidence as well that Ukrainian air traffic controllers deliberately diverted it’s flight path OVER the conflict zone as well. All this despite all previous flights avoiding that area. Why is that?

I’ll tell you why. Larger events than you care to investigate are taking place right now. A new order is taking place. The US dollar reserve system that has parasitically siphoned wealth to their nation is being undermined. Countries like Russia and China are done with it. They are accumulating gold and silver to displace the US. The US only has one option to hold onto the last vestiges of this system, and it is military force. I expect many more conflicts to arise in coming months/years as they lash out in a final attempt to retain control.

But it will not work. It didn’t work for France. It didn’t work for Britain. And it won’t work for the US. Bow to your Chinese overseers – our Canadian ‘leaders’ will not be principled enough to stand tall.

#24 the Jaguar on 11.14.14 at 8:52 pm

#4 Cato the Elder – Of course the Ukrainian military shot down that plane. If the US government was able to prove otherwise or implicate Russia in any way possible they would have produced their own satellite photos months ago. But they did not. Because they knew the truth. And they are the ones who stirred up the problems in the first place. Just like in Iran, Guatemala, Chile, Grenada, etc, etc. World Hegemony is their game plan. Putin gave them their chance to come clean, but when they sicked their Australian puppet on him in Bejiing he finally lost patience. No wonder.
The flight from the US dollar as the reserve currency has already begun, so we’ll see who gets the last laugh. Fasten your seat belts. November 27th is just around the corner.

#25 omg the original on 11.14.14 at 8:53 pm

#19 Obvious Truth
I tell them if I loose 30 % they are likely in a lot more trouble than me.

They don’t get it.
——————–

And they never will. They are the people that will be pouring money into equity mutual funds in a couple years when MSM is all about how the stock market is on fire.

One thing we know for sure, there will be another 20%, 30% or even 40% correction (or several) in equity markets in the next decade followed by recovery and continue growth.

But that’s too “risky” for some people – they would rather lever-up everything on bloated real estate.

#26 Cato the Elder on 11.14.14 at 8:55 pm

Re: #20 Harbour

But what if he created more than 290 000 000$ worth of value? Wouldn’t he be worth that salary? The answer is yes.

Most people can not command that kind of salary because they don’t provide that degree of value.

In order for that kind of value to be attributed to him, he had to create a lot of jobs, and benefit his customers greatly.

He didn’t STEAL that money like politicians do. He offered his services up to the market, and they responded in kind.

If he was paid too much, his company would go bankrupt. It would go bankrupt because the salaries it was paying out would not be justified given the value they are providing to customers. This is VERY simple.

This is the tragedy of passing judgement on the economic sphere. Quit being jealous. Start being inspired by what he was able to do.

Our country will be better for it. More people like him would benefit the country.

Now, that being said, if you USE government to your advantage to acquire wealth, that is not capitalism. That is crony-capitalism/fascism. Big government passing legislation that protects your entrenched market position, or gives you an unfair advantage, is WRONG. It uses VIOLENT FORCE, or the threat of it, to enforce this.

Much of our problems can be attributed to this misunderstanding of our economic system. It isn’t capitalism and free markets. Free markets benefits everyone, including you.

#27 james on 11.14.14 at 8:57 pm

#9 crossbordershopper

” what are you going to do rent all your life, and have a tone in etf’s? ”

I suggest you go to Switzerland and preach to them about how awful renting is. 80% of them rent, and they have quite a high quality of life.

And sure, why not a ton of ETFs churning out dividends?

The only reason people like you spurn the market is because no brokerage will ever let you leverage 95%-99%, as banks and mortgage originators will do in housing.

Given that Canadians have no assets and no ability to save (which by the way is NOT independent of high housing costs), the only game they can play is housing, since it is the only investment play that can be entered with 100% leverage (e.g., cash back mortgages).

#28 Setting the Record Straight on 11.14.14 at 8:59 pm

#146 RealistvsExtremist on 11.14.14 at 2:28 pm
Still waiting for one of the many govt trolls on this website to tell me why with $75 oil:

1. I’m not paying 0.99 cents at the gas pump
2. If it’s taxes, are we really paying FIFTY CENTS A LITER MORE than the Americans? They are paying taxes as well.

Well if the Canadian Green Taliban has there way, taxes will rise to the level necessary to increase the cost of gasoline.

Let the oil companies make more money. Better than having the govt get its hands on it.

#29 TurnerNation on 11.14.14 at 9:05 pm

A noun a verb. He’d better not show his face again in this city.

http://www.urbandictionary.com/define.php?term=Ghomeshi

#30 Obvious Truth on 11.14.14 at 9:05 pm

My quick 2¥ on gold. I know it’s not a gold or useless currency blog.

Most of the stuff we use can’t go below cost of production for very long. Gold has been there for a while. Supply diminishes and a floor gets put in.

As supply dwindles we could also get a push from inflation. Gold could form this rounded bottom and be supported by both these factors. Then a rise could be sustained. That’s really my best case for the stuff. Other than unforeseen catastrophe insurance. And I never expect to collect on that.

I’ve always tried to keep a weighting myself. Over the years mostly physical and about 5%. It’s less now but mostly because equities have been on a tear. And I don’t feel like paying 1500 an ounce. Even though I love them shiny ounces. The equities seem like the better play to me right now.

Own abx and slw for disclosure. One near lows and one not quite.

Should be interesting to watch. Nobody really knows. Not even Greenspan. Let’s see where the readers can take it.

#31 takla on 11.14.14 at 9:07 pm

Those boys sure look happy with their trophy,bear sausage on the Barbie,one of my fav’s…oh don’t worry about the boar lurking in the background its obviously a fake decoy!
is this a cryptic message that the “bear market” in golds over??Gold miners up over 4% today.
garths balanced and diversified portfolio is undoubtably a good idea for those with surplus cash..but don’t forget precious metals,looks like the bottom is in back ubove 1180.00

#32 waiting on the westcoast on 11.14.14 at 9:09 pm

#20 HARBOUR re: pimco bonus

I would love more deregulation and more education in the markets. If the investors were content with the bonus structure of the fund, they buy in. If not, they walk. If they didn’t read the deal, they deserve even worse. Far too many people are not willing to learn about their investments or use a vetted professional. Again – their mistake.

#105 Lillouet from yesterday’s post: wealthy are born with it.

I know quite a large number of wealthy people. Nearly all of them are self-made. I find that some subsequent generations do preserve and build on that foundation but have seen far more estates wilt away under less ambitious spawn.

Don’t be a hater – if you truly desire more and you have the balls and energy (and luck), you can get it too. Just do it!

#33 Adam Smith on 11.14.14 at 9:09 pm

Interesting article that QE hasn’t actually ended, just changed a bit.

http://www.nomiprins.com/thoughts/2014/11/10/qe-isnt-dying-its-morphing.html

#34 Victor V on 11.14.14 at 9:11 pm

How Toronto’s renovation boom is decimating affordable housing

http://www.thestar.com/business/2014/11/14/the_great_toronto_rebuild.html

#35 joe on 11.14.14 at 9:19 pm

How does your critic “Tim” know that bear was hunted for pleasure? Seems like a leap to judge those two guys in the photo. True, they are posing with their kill, but that still doesn’t mean they aren’t skilled responsible hunters. Plants and animals are killed every day to feed the world. I’m sure that bear killed prey many times over it’s lifetime to survive.

#36 Flatlander on 11.14.14 at 9:21 pm

If I purchase XSP (S&P 500 CAD Hedged) or any other ETF made up of American components and hold it in a TFSA. Are there any tax rules or anything like that I need to be wary of?

#37 Twriter on 11.14.14 at 9:23 pm

Hello Garth,

Thank you for the post. You nailed it – I am scared. I have to praise my Mom for instilling the “retro savings gene” and encouraging me to be patient and to keep renting.

#2 @JSS – “If you like the house, planning on living there for a number of years, and are making regular mortgage payments, what’s the big deal?” – my husband and I hear that comment often and it is a HUGE deal. A 10% correction is $100k on a million dollar property (fyi a million dollar property in Vancouver = Garth’s description: slanty, bug-infested hipster semi). Sorry, but that’s half our savings!!!

Garth’s article is very appropriately titled “Managing Risk” – I’ll take smart diversified risk over concentrated leveraged risk any day of the week.

I also believe many fail to recognize the power of cash flow – a home purchase with leverage eats this away. While being in a solid diversified balanced portfolio of stocks and bonds adds to cash flow. I think I’ll stick to the one that helps my husband and I sleep at night.

Garth I recently read a book by Patrick O’Shaughnessy titled “Millennial Money” – which advocates for going global, being different, and playing the long game (catered to US residents -but worth reading). I’d like to get your opinion on geographic asset allocation – what do you recommend? Also, since you brought up ETFs – what are your thoughts on “smart or beta” ETFs – such as RUD, FDV?

Best Regards,
Twriter

#38 newbee on 11.14.14 at 9:23 pm

I don’t think the photo is disturbing, I think it’s great. All you city folks living in your man made concrete jungle like to judge others. I believe you should look at your own lifestyle and realise that you are living on land where bears and other creatures lived on for centuries just to be displaced and destroyed for your comfort.

#39 mark on 11.14.14 at 9:24 pm

Garth’s used a tasteless picture! I must automatically believe he endorses the actions displayed in the picture!

Have I done it right?

#40 Setting the Record Straight on 11.14.14 at 9:27 pm

#141 Harbour on 11.14.14 at 1:14 pm
I like the way Obama politely trashed Keystone and Canada.

Canada wants to pipe their oil through our land where we will refine it and sell.

Well we have our own oil to refine and sell.
——
Good point. I do wonder why Canada is spending money
bombing Isis when the US is trying to shut down our access to markets.

And with Amerian allies like Saudi Arabia and Turkey, I wonder why we should be there.

And since Saudi Arabia beheads individuals that have displeased them……….and exports Wahhabism…

What are we thinking?

#41 Harbour on 11.14.14 at 9:37 pm

#25 Cato the Elder

Just imagine how much Pimco made?

Capitalism at it’s finest !!

#42 waiting on 11.14.14 at 9:39 pm

#37 yes he probably does endorse the action displayed in the picture – namely, the bear in the background ready to take on the hunters …

#43 crowdedelevatorfartz on 11.14.14 at 9:45 pm

@#22 Cato the Paranoid
“Bow to your Chinese overseers ……”
++++++++++++++++++++++++++++++++++++

ahahahahahahahahahaaha

My Friday night amusement hath arrived !

When…..exactly……did you escape from the Denver Airport NWO bunker?
LINK !

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=7&cad=rja&uact=8&sqi=2&ved=0CDsQFjAG&url=http%3A%2F%2Fvigilantcitizen.com%2Fsinistersites%2Fsinister-sites-the-denver-international-airport%2F&ei=669mVOutFYnEiQKu_oGYAw&usg=AFQjCNEv2OKD7hIuKksL0pGu2fU7N8qJrw&bvm=bv.79142246,d.cGE

Yes Folks.
Cato believes in this drivel……

#44 Setting the Record Straight on 11.14.14 at 9:45 pm

#167 Linda on 11.14.14 at 7:01 pm
#85 – Straight – thanks for the definition regarding class structures. Pretty much everything I’ve read previously has indicated income levels = class. And in a way they still do, IF that income is derived from income producing assets & not just a paid salary via employment. Which means the vast majority must fall under working class, because it seems to me that if people are working at jobs they complain about that they must either not have alternate income sources to cover their expenses or possibly their other assets do not as yet produce enough income to permit them to give up a salaried position they are not happy in.

Question: what about pension income? Would it count towards being considered non-working class or would it count the same as a salary would? I ask because pension income like salary income could be reduced or eliminated at any time. For anyone who believes otherwise, talk to pensioners whose plan fell under Air Canada or Nortel.

Good question
I think if you are dependent on a company pension for your standard of living it’s somewhat like having a portfolio consisting only of one company. Not diversified.
Not in your control. But if the pension is fully funded does that eliminate the risk?

If it’s a govt pension?.

#45 LazyJason on 11.14.14 at 9:50 pm

#2 JSS on 11.14.14 at 7:29 pm
“a lowly 10% correction in the market would wipe out all your savings. You’d owe more than the property’s worth.”

If you like the house, planning on living there for a number of years, and are making regular mortgage payments, what’s the big deal?

Try renewing when you’ve got a negative LVR. Seeing as high ratio mortgages are the result of not having enough cash available for a downpayment, just where would you get the lump sum payment needed at renewal time in order to bring your ratios back in line?

#46 A Yank in BC on 11.14.14 at 9:51 pm

#20 Harbour

Justified? Obviously his employer thought so.

You don’t have to do business with Pimco if you don’t want to. Or it’s owner, Allianz SE. That’s the beauty of Capitalism.. free choice.

#47 Harbour on 11.14.14 at 10:03 pm

#45 A Yank in BC

Pimco…. bonds…. QE

ha ha

#48 Blacksheep on 11.14.14 at 10:07 pm

Cato,

I want to throw my support behind your comments.

I would tone down the “Chinese overlords are coming”
thing, but for the most part, your bang friggen on.

And yes, of course a fighter shot down MH-17, I work with metal and own firearms.

One look at the cockpit fuselage made this obvious.

#49 pretentioushipsterbicycles on 11.14.14 at 10:15 pm

Nothing barbaric in that photo… just two hunters posing with their kill that will likely be turned into good, healthy, organic food for their families.

The barbarism lies with the city folk who buy plastic wrapped chicken and beef that has been pumped full of drugs, maltreated and never seen a day in the wild, let alone a piece of pasture.

#50 Hawk on 11.14.14 at 10:15 pm

“The hunters are now the hunted.”

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

Wonder will a day come when we can apply that to our public officials. The latest water bill has a 9% hike approved by city scoundrels upon a hike just a short while back.

In the country with the largest supply of fresh water on the planet we have to pay exorbitant amounts of money for water, so that a bunch of people can keep awarding themselves ever higher paychecks and perks, at our expense.

I wonder just how long people will sustain, what eventually on current trajectory is not sustainable.

#51 Mark on 11.14.14 at 10:18 pm

“If you like the house, planning on living there for a number of years, and are making regular mortgage payments, what’s the big deal?”

Negative or minimal equity = demands for higher risk premia from the banks for holding the debt = higher interest rates. As simple as that. Which makes it, obviously, even more difficult for one to extricate themselves from negative equity. Banks have been treating people with kids gloves for the past decade, but things are a’changing. Gone will be the days of freely available ‘mortgage holidays’ if a job is lost, or there’s some temporary one-time bills need to be paid. The future is all about the banks getting tough on borrowers, particularly those with diminishing credit-worthiness. Meanwhile, the wind is at the backs of those who invest in Canada’s severely underpriced equities in the manner as described by Garth — ie: XIU.

#52 Nemesis on 11.14.14 at 10:21 pm

#NeverF***WithBears… #However,AccidentsDoHappen… #OnTheBrighterSide,TheyMayNotBotherYou… #IfYouQuicklyAssumeTheFoetalPosition?…

http://youtu.be/um3tlxmK7Cg

#BonusZenForSaltierBackWoodsMen… #Hint:Flower&ButterflyMayInsistOnForestNamesFirst…

http://youtu.be/xG6V0I6_ZP8

#53 lee on 11.14.14 at 10:23 pm

Garth,

I’m just wondering, how do you think a balanced portfolio would have done in the early nineties when interest rates were 15 per cent? How does one protect against that?

Same as a zombie attack. — Garth

#54 Mark on 11.14.14 at 10:26 pm

“If I purchase XSP (S&P 500 CAD Hedged) or any other ETF made up of American components and hold it in a TFSA. Are there any tax rules or anything like that I need to be wary of?”

Yeah, you’re missing out on the importance of currency diversification. While many of us have strong views on where the USD$ is going (I believe its topping and is likely to drop soon), if you believe in diversification, its important to do it not only in terms of the securities in your portfolio, but also in terms of the currencies. Hedging tends to damage portfolio returns over the long run.

#55 SWL1976 on 11.14.14 at 10:28 pm

Solid advice. Great pic!!!

I got it right away and it made me chuckle

#56 Rick Jolly on 11.14.14 at 10:29 pm

About the photo:

If legal hunters don’t waste meat, they are no worse than an omnivorous human, perhaps better. Most people eat meat. How many consider that an animal died to provide their meal? Is a domesticated animal’s life worth less than a wild animal’s? Hunters that I know are conservationists and they appreciate the animal that died to feed their families.

Hunting is managed for sustainability. There is no danger to bear populations, and that is in the best interest of everybody – including hunters.

#57 Baz on 11.14.14 at 10:32 pm

Garth- I was waiting for this post – thx !

#58 Cato the Elder on 11.14.14 at 10:46 pm

Re: #48 Blacksheep

Don’t underestimate the depths to which politicians are willing to stoop in order to enrich themselves.

http://www.newsweek.com/new-treaty-allows-china-sue-canada-change-its-laws-270751

No foreign nation will ever conquer the North American mainland. It’s going to be eaten away from the inside.

Many people are naive to think that we will recognize once it’s here – that storm troopers a la Star Wars are going to be patrolling the streets.

The changes are going to be imperceptibly tiny over many years. Already the average Canadian pays 50%, or spends have the year, as a slave to taxes. A hundred years ago, there would have been a violent revolt if that was imposed on the citizenry. Not today.

#59 Cato the Elder on 11.14.14 at 10:48 pm

Re: #41 Harbour

How exactly does one acquire wealth in the capitalist system?

Once you’ve figured that out, you will realize it is the only moral system thus devised by man.

How exactly does one acquire wealth in a big government cronyist state?

Once you’ve figured that out, you will realize it is, and always has been, an immoral system based on theft and violence imposed by the state.

#60 bigtown on 11.14.14 at 10:57 pm

Apparently gas is under $2.50 per gallon on the 75 South so all you boomer kids heading to your condos down on the Florida Gulf Coast can breath a sigh of relief. Ah cheap gas…of course that bottle of wine is like $3 compared to $8.50 at the LCBO but that is the price required to keep this Canadian show on the road.

#61 Happy Renting on 11.14.14 at 11:07 pm

Down just 1%, huh? No wonder you laughed and rolled your eyes at all the commenters freaking out mid-October.

And yes, scared. But rationally, what Obvious Truth (#20) said.

#62 wallflower on 11.14.14 at 11:18 pm

#60 bigtown on 11.14.14 at 10:57 pm
I am here for many months. Now buying gas for 2.77 per gallon. Bought my favourite Portuguese white wine for $4.49 (was almost $11 in Vancouver in October and typically sells for arounde $9 in Ontario).

I keep coming back to this blog for the humour. This guys is humourous, too:
http://davidstockmanscontracorner.com/take-cover-now-they-dont-ring-a-bell-at-the-top/

#63 wallflower on 11.14.14 at 11:20 pm

oops;
a few typos;
see that’s what happens when the wine is half the price you pay back home!

#64 45north on 11.14.14 at 11:29 pm

The issue has remained controversial ever since, with many northern residents blaming nuisance bear problems on the cancellation of the hunt.

http://www.sunnewsnetwork.ca/sunnews/canada/archives/2014/04/20140429-182848.html

I spoke with a man from Kirkland Lake who complained that the hunt had been cancelled.

#65 SWL1976 on 11.14.14 at 11:52 pm

#43 Mr Fartz

Yes Folks.
Cato believes in this drivel……

——————————————————————

Perhaps instead of carrying on like a child perhaps you may be better served by looking at things with an open mind?

The stage has been set and one would be quite foolish to regard all of the geopolitical happenings as of late as drivel.

Putin is far from a saint, but he has played a very cool hand in all of this on the world stage, and in my opinion the west looks dumb. But hey, no one in the west will notice with the new fall TV line up in full swing

The saddest part of all this, should the petro dollar fall, the US will not step away gracefully as the holders of the world reserve currency, they will kick and scream like a spoiled little child who didn’t get what they want for their birthday. They will ensure everyone is miserable because their ship is sinking

I know its foolish to bet against the US but look at the big picture. The school yard bully is having a hard time keeping up their image these days

If you don’t think the people who are in control on the world stage are insane than you may want to check your own sanity

#66 Mike S on 11.15.14 at 1:21 am

“Garth I recently read a book by Patrick O’Shaughnessy titled “Millennial Money” – which advocates for going global, being different, and playing the long game (catered to US residents -but worth reading). I’d like to get your opinion on geographic asset allocation – what do you recommend? Also, since you brought up ETFs – what are your thoughts on “smart or beta” ETFs – such as RUD, FDV?”

Garth,
do you see what I mean?

Most people are not prepared for serious investing. One day they hold 200K in cash and the other day they are talking smart beta

Twriter,
My recommendation is either find a good adviser, or (if you really into it) invest real time into studying the subject

#67 Mike S on 11.15.14 at 1:27 am

“Negative or minimal equity = demands for higher risk premia from the banks for holding the debt = higher interest rates. As simple as that. Which makes it, obviously, even more difficult for one to extricate themselves from negative equity.”

We still have the CMHC. negative equity doesn’t matter as long as you make the payments. when you stop, the tax payer takes care of the rest

#68 Cici on 11.15.14 at 2:02 am

About the photo: I guess Tim overlooked the big black bear lurking in the background. I almost did too…it took me a couple of seconds to register…it’s been a long, hard week.

#69 Bottoms_Up on 11.15.14 at 2:04 am

I don’t think Tim saw the bear in the background. He should know that Garth’s pictures are usually (always!) deeper than first glance.

#70 yourmon on 11.15.14 at 4:35 am

You talked about record corporate profit in the US, have you looked at the record corporate debt

#71 davikk on 11.15.14 at 7:30 am

Don’t you worry about raising interest rate, another financial crisis is coming soon, interest rate may remain record low for many years to come:
http://investmentwatchblog.com/why-stocks-are-soaring-even-though-the-fed-stopped-quantitative-easing-major-corporations-have-been-spending-almost-all-their-profits-on-buybacks-and-dividends/

#72 maxx on 11.15.14 at 8:11 am

#5 calgaryPhantom on 11.14.14 at 7:31 pm

“I have never bought a house in Canada, and if i were to, i have no idea how to approach buying a good deal on houses.Specifically, how to know if the property represents a good deal or not , where to compare with other houses and find out the last listed prices for that property?”

Excellent question. IMHO, based on a LOT of research, there is very little to NO value in Canadian housing. Value is a word most realtards hate. Overwhelmingly, prices are still far too high and often multiples of municipal evaluation.

One of the worst places in which to put your hard-earned savings. Including interest, many end up paying double the price.

#73 Sean on 11.15.14 at 8:35 am

To all the folks that think Bill Gross’s bonus is appropriate, and that it is just good old fashioned capitalism… well, not exactly! There is the not so small issue of corporate governance… and the not so small problem that it is broken. CEO pay has gone off the charts, and in most cases it has nothing to do with performance. For that matter, no performance would be worth that sort of money. Shareholders own companies. They take on the risk, they get the reward. If Bill Gross’s payout was based on his ownership stake.. then great. The worst example in recent memory was greasy little Bill Grasso, who thought his $50M or whatever was justified when he left the NYSE… the biggest justification was that he got the exchange open after 9/11… big F’ing deal! you did your F’ing job! yeah, here’s $50M!

OK, that was off on a tangent. The problem is that there is a total disconnect between stakeholders… shareholders are not actually in charge, though they are the owners. In most cases, the board and management, along with bondholders, are skimming one hell of a lot off shareholders.

#74 bigrider on 11.15.14 at 8:43 am

Is every brick licking ,house humping ,home renovating guy an Italian ?

http://www.thestar.com/business/2014/11/14/the_great_toronto_rebuild.html

If Italians didn’t live in the GTA I think house and condo prices might be half of what they are today ..LOL

#75 Obvious Truth on 11.15.14 at 9:03 am

#36

How about you look that up and tell us. Google it.

It’s what I’ve been telling my sister to do.

I’m not saying it in a mean way but why get a second hand answer. Let us know what you find out and maybe ask others here what their experience with it is.

#76 };-) aka Devil's Advocate on 11.15.14 at 9:10 am

We bought a HOME.

While it didn’t and doesn’t really matter to us if the price goes up or down the fact is the investment we made in our first home in 1982 has grown in value over the years such that it is now worth ten times that. During that time our home has provided a roof over our heads under which we raised a family that, even though they are grown and now have homes of their own, continues to consider this ”home” a stabilizing anchor for us all in a sea of uncertainty. I guess that’s what they refer to as “roots”.

Either you get it or you don’t. To each their own.

A home is where your family is. The physicality of it is meaningless. — Garth

About the photo It doesn’t matter whether or not I can run faster than the bear as long as I can run faster than you.

#77 David McDonald on 11.15.14 at 9:26 am

I was disappointed in Obama’s reaction to congressional approval of the Keystone pipeline. If he believes the oil should forever remain locked in sand because of the danger of global warming then he should say so. If not, all other aspects of the project are positive. It is clearly much safer and more efficient to move oil by pipeline than by train. It also provides the US with energy security.

Taking the necessary steps to prevent climate change will be very hard if not impossible. It is hard to make painful decisions based on theory and this leads to moral ambiguity ( I accept the theory but still own Suncor stock). Probably nothing short of an energy revolution like cheap fusion and capacitor batteries can save us.

#78 Paul on 11.15.14 at 9:40 am

I have no doubt that home prices are unsustainable at present. To me there is no question that the debt bubble will burst at some point, delivering financial pain to many greater fools. All it will take is a moderate rate increase for some folks to bleed out completely.

I fully understand the benefits of a regularly balanced portfolio.

What I have not seen you address Mr. Turner, is the effect on the markets that a real estate downturn will cause. Perhaps I missed that post?

Clearly, if people default on their mortgages in large numbers, spending on other things (even so called “necessities”) will be curtailed since you can’t spend money if you don’t have it anymore. This will impact on nearly every segment of the equity markets.

Perhaps you could provide your perspective on the effect that a moderate real estate downturn will have on equity markets?

Seems to me that a RE market drop will likely have a pretty profound impact on earnings across equity markets. Even banks will take a hit in spite of the CMHC/Bankster deals.

Sadly, THIS is one of the many things that makes people shy away from adopting a proper investment strategy and instead shovel gobs of cash and (leveraged) debt into a money pit called a house.

The thing is, you regularly advise people to invest in a balanced portfolio but I have not yet seen you directly dissect the effect of a RE downturn on that balanced portfolio.

Obviously income investments (bonds etc.) will not be affected the way that equities will. But even a BALANCED portfolio will suffer in a housing crunch (unless of course the portfolio is balanced with international equities that are not directly affected by the Canadian markets).

I’d appreciate your perspective.

Nobody expects large-scale mortgage defaults. That is an extreme position. Rather equity will drain and family net worth be erased. The economy will remain slow, and possibly recessionary for some time. But the impacts will be intensely personal, more than societal. — Garth

#79 espressobob on 11.15.14 at 10:08 am

#36 Flatlander

The link below should help.

http://www.tfsa.gc.ca/thingstoknow-eng.html

Enjoy the ride.

#80 liquidincalgary on 11.15.14 at 10:38 am

cato says :

Already the average Canadian pays 50%, or spends have the year, as a slave to taxes. A hundred years ago, there would have been a violent revolt if that was imposed on the citizenry.

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

during the 30’s, wasn’t the tax rate 90% ?

A hundred years ago there was no universal health care, no public pension plan, no social assistance and only the wealthy could afford higher education. The life expectancy was 48. Yes, a utopia. — Garth

#81 David on 11.15.14 at 10:44 am

#36 Flatlander

The CRA only cares if you exceed your contribution limits. All you need to do is monitor your contributions and withdrawals.

But see Mark’s point about hedging.

#82 Paul on 11.15.14 at 11:02 am

Al least the bear had a chance.People kill things and hopefully eats what they kill. People consume meat nasty but if you want to protest don’t use any animal products.
But as long as it’s wrapped in plastic and they do not get bloody hands it’s okay.
http://www.vegetarismus.ch/bilder/eindex.htm

#83 Frankie on 11.15.14 at 11:19 am

[Garth] but the American middle class has paid off more mortgage debt than we have outstanding in the whole country.

Nonsense. They (US homeowners) defaulted on mortgages (about 10 million foreclosures). That means they **didn’t ** pay off their mortgage, which is different than you saying they have.

Of course defaults were involved, but less debt of $1.5 trillion is less debt of $1.5 trillion. My point stands. — Garth

#84 Daisy Mae on 11.15.14 at 11:30 am

#35 Joe: “I’m sure that bear killed prey many times over it’s lifetime to survive.”

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

Right — to survive. And we kill for pleasure.

#85 Daisy Mae on 11.15.14 at 11:40 am

#50 Hawk: “In the country with the largest supply of fresh water on the planet we have to pay exorbitant amounts of money for water…”

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

Right! And costs will continue to rise until we get the message. We DON’T have the right to waste water.

#86 HogtownIndebted on 11.15.14 at 12:00 pm

NDPer Mulcair is on the radio this morning talking of how he will quickly change retirement benefits from 67 to 65. This is now an official campaign plank.

http://www.nationalnewswatch.com/2014/09/07/ndp-to-unveil-key-platform-planks-this-fall/#.VGdqSM50x9A

With boomers so tapped out and house-indebted it is hard not to see this as a big vote getter. This should easily pull 5-10% away from the conservatives next election with the only question being how that gets split between the opposition parties.

—————————————————————–

Here is something very interesting I have come upon – I wonder if anyone here has heard or thought about this.

A friend asked me this question this week :

What do tapped out, house-indebted middle class types spend when they run out of cash, LOCs and credit card room?

Points, of course.

My friend has worked for years in finance and marketing of consumer loyalty programs, all those programs that give you points for travel or free stuff to reward you for buying other stuff that you probably didn’t need (especially if it was on the boss’s credit card)

He tells me there are big trends in the field over the last year and more which point to broader problems in the economy.

Redemption levels for flight only “freebies” are down a lot, presumably because people lack the cash to pay for other associated costs like airport fees and hotels.

Redemptions for cash, gift cards and “stuff” are way, way up, he says. The biggest trend involves redeeming points for…….gasoline and grocery store cards.

Overall redemptions have been up by over 50% this year and accumulation has been reduced by about 50% across most loyalty programs, he tells me.

The program managers like the fact that this takes liabilities off their balance sheets, but there are already fears of layoffs in this field to deal with reduced future business. They are already also figuring in the benefits (for them) of higher rates of point expiration and account closures from consumers too poor to participate anymore.

Will this be the Christmas of gift cards for everyone?

And with HELOCS maxxed out, LOCs maxxed out, credit cards maxxed out, the Bank of Mom and Dad maxxed out and afraid of retirement expenses, and loyalty points maxxed out and withdrawn, where will people look for liquidity next before taking a long, sober look at their housing “assets”?

Lemonade stands?

#87 Mark on 11.15.14 at 12:16 pm

“We still have the CMHC. negative equity doesn’t matter as long as you make the payments. when you stop, the tax payer takes care of the rest”

With the $600B limit to CHMC subprime lending authority, the time is approaching where CMHC is no longer the lender (or guarantor) at the margin. And there will be intense pressure within the CMHC, and politically, to reign in a loss-making organization as claims against the CMHC accelerate. Hence, higher rates as applicable to retail residential real estate borrowers, particularly those with relatively weak stats.

A few people have suggested that the CMHC or the GoC could start to play hardball with the banks, imposing special taxes upon them, or denying CMHC subprime insurance claims on defaults on relatively minor technicalities. Guess what that would do to interest rates as applicable to government-insured loans? Diminish the government guarantee in any way, shape, or form, and the lending community simply will pull away from giving those loans good rates.

#88 Vladimir Putin on 11.15.14 at 12:16 pm

Stephen Harper, you are a stupid zalupa. And very rude.

I told you. We are not in Ukraine.

We are here, on Garth’s blog.

Next time, put on a Gi and say that to me like a man, you mascara-wearing Yeban’ko maloletnee.

#89 OKInvestor on 11.15.14 at 12:18 pm

#4 Cato the Elder on 11.14.14 at 7:31 pm
Who is Harper working for? The Canadian people, or bankers that want to enslave the world?

Well said Cato. Below is an interview by Doc Willie that supports the world’s current affairs referred by you and at the 14 min mark he mentions Canada. Also at the 29 min mark Fort Knox is discussed that brings back memories of Ian Fleming’s efforts to warn the public in the 1960s.

http://investmentwatchblog.com/addendum-18000-gold-u-s-becomes-third-world-jim-willie/

ADDENDUM: $18,000 Gold & U.S. Becomes Third World | Jim Willie

November 11th, 2014

#90 Mister Obvious on 11.15.14 at 12:26 pm

#78 Paul

“What I have not seen you address Mr. Turner, is the effect on the markets that a real estate downturn will cause. Perhaps I missed that post?”
—————————-

You’re forgetting that the only RE market we are talking about here is the Canadian one. The Americans have already had their RE correction and it was simply brutal. But for them, its over. We are still working at bringing ours to completion.

A diversified investment portfolio casts a net much wider than Canada. True balanced investment involves seeking out opportunities worldwide. Those who expect their severely overpriced Canadian homes to carry them financially are dreaming. It’s a pleasant dream, but a dream nonetheless.

The coming Canadian housing funk will have little effect on the sophisticated world investor.

#91 TurnerNation on 11.15.14 at 12:41 pm

It’s true. During last rout my workplace RRSP with its choice of middling mutual funds shed only 1% of its value.

I use three lately: TSX monthly income fund, Fidelity Global Real Estate fund (I hope this follows IYR.US) and PH&N Bond fund.

Return For the past 1 year 11.8% .

#92 crowdedelevatorfartz on 11.15.14 at 12:44 pm

@#65 SWL1976
“Perhaps instead of carrying on like a child perhaps you may be better served by looking at things with an open mind?”
+++++++++++++++++++++++++++++++++++

An open mind for paranoid drivel? Sorry.
The conspiracy theorists have been blathering on about the “end days” , The New World Order, The Bunker under the Denver Airport,a Masonic Moon base, Vapour trails to control the population, etc.etc.etc for years now. Still havent seen proof ( and please dont bombard this site with ridiculous links to other unproven paranoid internet loony sites with unsubstantiated “claims”), its a waste of time. It wont convince me.)
As for my childish carrying on. You havent figured it out yet?
Next time you’re on an elevator…..breath deep through your nose…..if there is a horrible smell…..It was one of my legion of followers…..and they’re watching you.

And if you believe me….thats called paranoia.

#93 crowdedelevatorfartz on 11.15.14 at 12:46 pm

@#86 Hogtownindebted

Interesting observation.

#94 CdnFlier on 11.15.14 at 12:54 pm

Fools. So, you read some conspiracy theory websites and you ‘know’ the airplane was shot down. You work with metal and own firearms and you’re an expert? Fools. The plane was shot down by a pro Russian soldier using Russian weaponry. This is a fact and has been proven. Do you know how surface to air missiles work? They use proximity fuses. When is gets close to its target, it blows up. The resulting shrapnel goes through the aircraft. To a layman, the holes may look like bullets holes, but don’t let the facts get in the way of a good story.

#95 Smoking Man on 11.15.14 at 12:56 pm

#77 David McDonald on 11.15.14 at 9:26 am

You’re a passionate man made climate change advocate.
Where, and how did that belief get planted.

I don’t see it. Not enough humans around to even compete with one big solar flair..

I do want to learn the techniques used that went into your programming.

#96 Cato the Elder on 11.15.14 at 1:08 pm

Re: #80

A hundred years ago there was no universal health care, no public pension plan, no social assistance and only the wealthy could afford higher education. The life expectancy was 48. Yes, a utopia. — Garth

********

Life expectancy in Canada wasn’t 48 in 1914. And I’m not saying improvements haven’t been made – they were and IN SPITE of huge increases in government size. I don’t want the technology from 1914, I want the freedom of 1914. The ability to fail and suffer the consequences is vitally important – when you bail people out, it encourages a perpetual cycle of poor decision making.

No one believes our healthcare system has been on the up and up for a long time. It’s in shambles with stinky hospitals and long wait times. Go to almost any dental office or vet clinic and you will see shorter wait times and better conditions – all because market forces are allowed to function.

And before anyone goes harping on how the US has a ‘capitalist’ healthcare system : you’re wrong. The US has massive gov involvement in healthcare from Medicare to regulations. All these serve to do is protect big insurance companies – it’s crony capitalism not free market capitalism. The US used to be the envy of the world and had the best in everything until they adopted socialism.

And Garth are you really justifying all this ‘assistance’ for higher education? It’s a proven failure. More kids than ever before with degrees flipping burgers. Except now they’re saddled with debt! And they’re not learning anything useful anyways except how to group think and be reckless financially and endorse socialism. What a waste.

**********

Oh and about the taxes – almost no one paid any. There was no ‘withholding tax ‘ for a very long time. Employers didn’t confiscate people’s earnings it was sent in with a lump sum – many people chose not to do this. There were also many more deductions available. And when I said 50% was what people pay, that includes the burden of regulations, consumption taxes, and everything else that people didn’t pay back then. It’s a well calculated number put out by professional organizations like the Frasier Institute.

You’re right. Life expectancy was 50. — Garth

#97 Ole Doberman on 11.15.14 at 1:12 pm

Garth is right – oil slicing through $75 is uber bad news for Cowtown.

This could be the end of oil as we know it, here have a read:

http://armstrongeconomics.com/2014/11/14/a-new-world-order-the-end-of-oil/

#98 BigM on 11.15.14 at 1:18 pm

NDPer Mulcair is on the radio this morning talking of how he will quickly change retirement benefits from 67 to 65. This is now an official campaign plank.
With boomers so tapped out and house-indebted it is hard not to see this as a big vote getter.

@86HTI

Boomers won’t care, they weren’t affected by the change.
The ones who got screwed with that were the 50 and under crowd; mostly Gen Xers, like me.

Fortunately, most Xers aren’t dumb enough to vote NDP,
so it will remain a hot air mean nothing promise.
FWIW, almost every Western country has raised the retirement age to 67; which won’t matter, because we are seeing way too many people not retiring at 65 already.. because they can’t afford to.

#99 LP on 11.15.14 at 1:18 pm

A home is where your family is. The physicality of it is meaningless. — Garth
************************

Someone famous once said of home, “It’s the place where, when you go there, they have to take you in.”

#100 SWL1976 on 11.15.14 at 1:26 pm

#92 crowdedelevatorfartz

——————————————–

Though I have never met you I have a feeling you summed yourself up quite nicely with that post

Enjoy your weekend fart man

#101 LP on 11.15.14 at 1:28 pm

#98 LP on 11.15.14 at 1:18 pm

I just searched out who defined “home”. It was Robert Frost in his poem, The Death of the Hired Man.
A good read, if heart-breaking.

#102 Mark on 11.15.14 at 1:31 pm

“Redemption levels for flight only “freebies” are down a lot, presumably because people lack the cash to pay for other associated costs like airport fees and hotels.”

I don’t know if this is the reason for such. The airlines (Air Canada and WestJet) are running at record load factors. Meaning that Aeroplan redemptions have become incredibly hard to make, because Aeroplan redemptions are designed almost never to displace a paid revenue seat.

I personally have a few hundred thousand Aeroplan points, but they’re next to useless to me as every itinerary I need to fly in the next year or two is pretty much unavailable, or the service charges approach that of a revenue ticket (ie: you can buy a seat sale fare to London cheaper than you would pay to do an Aeroplan redemption on the route).

As the consumer economy legitimately turns down, I fully expect that the airline load factors will drop, and more Aeroplan seats will become available. But it would appear that consumer spending, at least on discretionary stuff like airfares (most air travel is personal/consumer, not business these days!), is stronger than ever. And obviously due for a significant fall as the housing malaise continues to accelerate.

#103 Lineman for the county on 11.15.14 at 1:52 pm

#4 Cato the Elder. Cato. We all know and love your daily diatribes against bankers. But have you ever considered calling yourself Cato the Welder? That way you wouldn’t sound so pompous and it would help us love you even more.

#104 HogtownIndebted on 11.15.14 at 1:53 pm

#98 BigM

Boomers won’t care, they weren’t affected by the change.
The ones who got screwed with that were the 50 and under crowd; mostly Gen Xers, like me.

Fortunately, most Xers aren’t dumb enough to vote NDP,
so it will remain a hot air mean nothing promise.
FWIW, almost every Western country has raised the retirement age to 67; which won’t matter, because we are seeing way too many people not retiring at 65 already.. because they can’t afford to.

—————————————————————-

I agree with you that many are slowly accepting they will have to work longer. Will they be able to is a question worth asking, however. (Think health and employment challenges)

And you are partly right about the age groups, depending on how you define ‘boomers’. I should probably have used terms like Gen X/Y and millennials. I think those born after 1961 are the ones who have to wait until 67 right now for full benefits. Those are indeed the late end boomers or Gen X, as you say.

But you say people will vote against an earlier pension plan?

I don’t think so, not at all.

Remember – Kathleen Wynne’s promise to bring in an improved Ontario pension supplement to the CPP almost certainly gave her the last election.

People are already thinking seriously about this stuff and realizing they don’t have enough for retirement.

The NDP has a winning issue here, but will the vote go to them, or be split with Liberals on this, is the question. Trudeau would be smart to mirror this promise quickly.

#105 Mark on 11.15.14 at 1:56 pm

‘Garth is right – oil slicing through $75 is uber bad news for Cowtown.”

You’d actually be surprised at how *few* people in Calgary actually work in Oil and Gas. A far larger local industry is RE speculation, and being in the business of supply to RE.

More money from Alberta’s oil and gas industry likely ends up in GTA-based shareholders’ pockets (or accrued to their equity position in their shareholdings), than is actually spent in Calgary by the O&G industry.

But you’re right, the fall in O&G prices will likely be blamed for the continuation of price drops in Calgary RE.

#106 Mark on 11.15.14 at 2:06 pm

“The Americans have already had their RE correction and it was simply brutal. But for them, its over. We are still working at bringing ours to completion.”

Its not “over” in the United States by any stretch of the imagination, as the speculators still haven’t been fully liquidated, and societal attitude remains that RE will continue to rise over the long term. Long-term interest rates have yet to meaningfully rise. Come back and make your claim when the 30-year mortgage rates are in double-digits and RE is officially the “worst investment ever” and all the phraseology used to attack gold and silver today, is used against RE in common thinking.

#107 Twriter on 11.15.14 at 2:30 pm

#66 @ Mike S

“Most people are not prepared for serious investing. One day they hold 200K in cash and the other day they are talking smart beta

Twriter,
My recommendation is either find a good adviser, or (if you really into it) invest real time into studying the subject.”

Thanks for the tip Mike S – how do you think I was able to save so much at such a young age without investing real time into studying the subject?

I’m mostly liquid now but haven’t always been. Part of my success has been from recognizing that I do not have all the answers (probably never will) and seeking out the opinion of others, as well as doing my own research.

I’ve spoken to advisors – the good ones seem to require a minimum of $500k+ in my experience. I was simply asking for an opinion on smart beta – do you have one you’d like to share?

Thanks

There are talented advisors who will give you full service for a 1% fee with a portfolio of $150K. — Garth

#108 crowdedelevatorfartz on 11.15.14 at 2:31 pm

@#100 SWL1976
“Enjoy your weekend fart man”
++++++++++++++++++++++++++++++++++++

Thank you, I shall.

Im just heading out to buy a few ingredients for a wonderful curried chicken recipe.
The elevator rides are epic.

#109 crowdedelevatorfartz on 11.15.14 at 2:33 pm

@#94 cdnflier
“…….but don’t let the facts get in the way of a good story…..”
+++++++++++++++++++++++++++++++++++
Truer words were never written

#110 Harbour on 11.15.14 at 2:47 pm

#59 Cato the Elder

I don’t have to figure anything out…

Like I said, it’s capitalism at it’s finest

#111 Mark on 11.15.14 at 2:50 pm

“I’m just wondering, how do you think a balanced portfolio would have done in the early nineties when interest rates were 15 per cent? How does one protect against that?”

Certain asset classes benefit from the high rate or rising rate environment. Some are hurt by such. The whole theory behind a balanced portfolio is that you have a mixture of a number of asset classes, and such are rebalanced periodically to take advantage of the inverse correlation between asset classes.

For instance, long-term treasuries have performed excellent over the past 35 years. Gold has performed terribly. A balanced portfolio would have a person gradually selling some of their long-term treasuries and buying gold, to take advantage of being able to sell treasuries at a high price, and buying gold at a relatively cheap price. When gold goes back up, long-term bonds are likely to fall in price, so the rebalancing process would effectively do the reverse. Over time, this builds wealth. And if you look at balanced portfolios, they often outperform even the weighted average returns of each of the individual portfolio constituents over time. At significantly less risk it should be added.

In the early 1990s, obviously the short-term bond component of a balanced portfolio did well. Towards the middle of the 90s, due to CAD$ devaluation, US stocks did well. Canadian stocks did well in late 1990s. Someone who had a balanced portfolio of RE, stocks, bonds, and gold, in the 1990s, probably didn’t even feel much of an impact from the RE crash that took place through much of the decade.

#112 Hottomalis on 11.15.14 at 3:06 pm

Why does everyone have this incessant need to own a home? Talk about a failed business plan. It’s more likely to BTK, your ass. Or “bind torture & kill YOU financially & emotionally.”

#113 Emma Zaun - GreaterFool Unpaid Intern #007 on 11.15.14 at 3:16 pm

Mr. Turner

Do not think our recent silence means you are off the hook for your deplorable antediluvian employment practices. We have been patiently awaiting the outcome of our sisters’ struggle in New York to determine our next steps.

http://www.nydailynews.com/new-york/strippers-10-million-minimum-wage-suit-article-1.2011119

We are inspired! When we are done with you sir, $10 million will seem like peanuts. You’ll be back in Harper’s caucus and delivering his morning paper just to buy flavourless porridge to survive on.

You ask us to put in ever longer and more meaningless unpaid days, for what?

Since Cato the Elder started posting here, our daily editing duties have increased by 30% and three Amazons have suffered second degree burns when the bullshit meter overloaded and short-circuited. (And no, tossing them a dollar store plastic bandaid and saying ‘now rub my head’ is hardly a compassionate response to such workplace trauma)

We will be in discussions this week around certification with the union representing the Rick’s Cabaret and similar workers here in Canada, CUPE*. (Canadian Union of Peelers and Exhibitionists*) Their name will be on the first legal papers you are served with.

And what about your continuing attitude towards interns?

Let’s just say, Poloz and Ghomeshi are enlightened compared to you.

#114 chapter 9 on 11.15.14 at 3:24 pm

#92 crowedelevayorfartz
Conspiracy thinking is what happens when trust in a public institution fails. Remember the so called “nut jobs” that were saying the government is spying on us all. Edward Snowden familiar with that name? He was belittled for saying that the gov’t has the ability to spy on anybody in the US in real time, in there home, turns out he was right.
Do you know what a “dirtbox” is? It is a device attached to an aircraft that gathers data from every cell phone below. Sounds like some wild “conspiracy” doesn’t it. It is happening as you read this.
As long as these agencies lie to the courts,to the media,to congress, to the citizens, people will always want to find out the truth!!

#115 Prairieboy43 on 11.15.14 at 3:50 pm

See why huntings fun. You never know what is going to happen. She (Bear), looks a little upset in the background. Probably Yankee hunters. Canadian guide is taking picture.
Foreshadowing as to what is about to happen to Real Estate in Canada. American taking picture.

#116 Blacksheep on 11.15.14 at 3:57 pm

CdnFlier # 94,

One doesn’t need websites or expert opinions to see the obvious. Parties resort to name calling, when logic has failed.

#117 Detalumis on 11.15.14 at 4:07 pm

#98, study your boomer history, they lumped 18 years of people together into one demographic and the bumping of OAS to 67 actually includes the peak of boomer births which was actually the late 50s to early 60s.

Anybody born in 1958 and over gets hit so the majority of boomers, the second half who didn’t get all the good jobs and such are just as screwed as Gen X or whoever follows. The unemployment rate for this cohort was a lot higher at graduation than it is today but you would never know it. It’s like they were totally invisible supposedly had an easy peasy life.

#118 crowdedelevatorfartz on 11.15.14 at 4:37 pm

Ho hum.
Another day, another story linking Mr Putin to backdoor financial deals with his friends.
New York Times

http://www.nytimes.com/2014/11/02/world/europe/putins-friend-profits-in-purge-of-schoolbooks.html?WT.mc_id=D-NYT-MKTG-MOD-76862-11-15-HD&WT.mc_ev=click&WT.mc_

A very well researched article.
And for all you Putin lovers out there …..the truth sucks doesnt it?
Enjoy

#119 crowdedelevatorfartz on 11.15.14 at 5:24 pm

One wonders which country Putin with decide requires “annexation” next?
Merely to “protect” the Russian citizens of course. Strategic importance has nothing to do with it.
Estonia? Latvia? Belarus? Kazakhstan par chance? The seperate country where Russia launches all its rockets into space?
Kazakhstan’s citizens are getting a tad fed up with Soyuz Proton rockets self destructing all their toxic fuel over head( 4 rockets in 14 years). Rumours abound of Kazakhstan tearing up the cosmodrome agreement( either party can cancel with only 1 years notice).
Putin seems to be annoying all his border neighbors with the exception of the dictators he has propped up.
Its a shame that the Russian people will reap what he has sown long after he’s gone.

#120 Cato the Elder on 11.15.14 at 5:43 pm

Re: #96 Garth

You’re right. Life expectancy was 50. — Garth

********

Closest I’m getting is 60 but that is besides the point:

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health26-eng.htm

And if you take out infant mortality, the figure is probably closer to modern day 75ish levels. Once you make it past the age of 10 life expectancy rockets upward.

Again though, improvements have been made in technology and health. The profit motive is what drove those improvements, not government. A farmer plants not to prevent famine, but to sell their crops.

Something that is often overlooked is leisure time. Back then, women could stay home and raise a family. That means a nearly 50% increase in leisure time amongst the population! Could our economy support that today? The answer is of course no. We no longer have savings and have shipped all our capital abroad and replaced it with debt. GDP figures are misleading because it leaves out a crucial component of societal happiness which is free time.

Bear in mind, free time can’t be legislated. If it were, there would be job losses and price increases. Free time must be a result of productivity increases. If it took a day to make a widget, and now it takes 1 hour, you have the capacity to allocate more hours of your day to leisure. This is simple and yet our politicians don’t get it – especially in France where there are a myriad of holidays and 25%+ unemployment.

Earlier, I didn’t even touch on the massively underfunded pension plans instituted by our government that you mentioned.

Governments can’t be trusted to manage anything. There are too many temptations from less scrupulous individuals than yourself to underfund or plunder the coffers.

As you have so often pointed out, the CMHC is insolvent. Like all other poorly implemented and managed government bureaucracies, it will rely on productive tax payers to fund. This is why we are getting poorer – we are chasing productivity and capital overseas.

Capital is not patriotic. It doesn’t care what the noble intentions are of government officials. It will go where it is wanted and where it can grow. That is the East today, as they are becoming more capitalistic and we are becoming more socialist.

If you had to be somewhere for the next hundred years where would it be? In 1800 it would be Britain. In 1900 the US. Why would you want to stay there where there’s over 100 TRILLION in obligations? The place to be is China. They’re already richer than the US if not for their military. Soon, the world will know it.

The CPP is not underfunded, and China is the poster child for wealth inequality. You are so full of it. — Garth

#121 Blacksheep on 11.15.14 at 5:45 pm

Cato # 58,

“Many people are naive”

You think to rigidly.

How’s that saying go: If I owe the bank 30 thousand $’s, it’s my problem, If I owe the bank 30 million $’s, it’s the banks problem. This thinking applies to the 2 trillion $ US, that China holds as they will be told to metaphorically pound sand if it became necessary.

Why are the Republicans (party irrelevant) pushing through the Keystone XL Pipeline? For $. Really? Obama says the oils just going through the US, for foreign export.

They just want to help the nice Canadians? Bullshit.

Going down the middle of the US, it will make an excellent distribution manifold, when needed. Why is the Mexican border so dammed porous and why is Obama’s naturalizing illegal’s? Why is Canada playing war in Syria, in an overt offensive action, with 6 aged CF-18’s that are in danger of falling out of the sky.

Cause the US needs our air support?

BEFORE the US rolled over for China or any one else, we would see the formation of a North American Union.

Mexico provides cheap labour, Canada provides resources and the US provides technology and military. Half a billion people, sharing one large perimeter secured continent.

These three sovereigns would create an economic, resource and geographic power house. The union would of course use post US$, SDR’s.

I’m not making predictions, simply stating the obvious.

#122 I'm stupid on 11.15.14 at 6:01 pm

I really don’t like doomers. In history there has always been kings and peasants. Today is no different, it’s just that the empires have changed. In the past the empires were countries and territories that the king controlled. Today they are huge multinational companies the Kings own. I am a peasant, just like everyone else who comes to this pathetic blog, Garth included. Sure some of us have some money but none of us control the lives of
50 000 or 100 000 people. You can come here an bitch and complain all you want but a king you shall never be. So deal with it. The Doomers all have the same underlining theme, they’re angry that they aren’t kings and hope the world falls apart so they can be kings.

Cato de elder that’s for you!

#123 Setting the Record Straight on 11.15.14 at 6:04 pm

The quote and article confirm my contentions about who is wealthy and who is not. If anything I have been too optimistic in suggesting 20 million makes you wealthy.

The bottom 90 percent of the top 10 percent are middle class.

“According to a recent paper by the economists Emmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics, almost all of the increase in American inequality over the last 30 years is attributable to the “rise of the share of wealth owned by the 0.1 percent richest families.” And much of that rise is driven by the top 0.01 percent.”

See
http://www.nytimes.com/2014/11/16/business/another-widening-gap-the-haves-vs-the-have-mores.html?_r=0

The notion that the middle group of income earners –measured like a bulge in a python– are middle class is just propaganda

A tiny group of upper class , followed by a larger middle class followed by a much larger working class followed by a lumpen proletariat is the pyramid of wealth.

#124 Cato the Elder on 11.15.14 at 6:04 pm

Re: #110 Harbour

Typical. I must admit I would find myself quite embarrassed to argue about a subject of which I have no or limited knowledge. Most people aren’t like that and have a false sense of righteousness which is precisely why our species progresses so slowly.

Your understanding of capitalism is wrong. You only acquire wealth by providing a good or service to your fellow man that voluntarily purchases it.

You and others are suffering today because that exchange of value makes up a small portion of commerce today. Most is divvied out from government to their pals that has been stolen through taxes.

If you fail to understand this, the problem will persist. It will persist because you will continue to vote for politicians that promote more intervention and more power for themselves.

Do as you wish. It’s too bad people with that line of thinking couldn’t self govern themselves and leave the rest of us alone. Would only take a few years before they looked over the fence and complained at how ‘unfair’ it was. Unfair that productive people working with free market forces had surpassed them by a humongous margins. But it’s not unfairness. It is simply the truth of human nature. Humans are inherently self interested – some call this greed. This has been and always will be. Upon recognizing that, it is commensurate upon all critical thinkers to recognize free markets is the only system that can harness our nature in a positive manner.

If you are evil, mean spirited, and unlikeable, you can still only acquire wealth in free markets by helping your fellow man. If the same person is given the power of governments’ confiscatory power, all sorts of problems will arise.

I can only do so much to reverse what I can only imagine is decades of pro big government propaganda. If you are interested in hearing the other side so you may determine of your own volition what is right, instead of parroting oft repeated television dribble, I recommend you read the following:

The law by Frederic bastiat
Wealth of nations by Adam smith
How an economy grows and why it crashes by Irwin Schiff

The last one is the simplest to read and the shortest. You could get through it all in under an hour. It’s in comic book form so even children can understand it. If you read it and absorb what it says, you will be more knowledgeable than most PhD economics grads (especially Bernanke and Poloz).

#125 SWL1976 on 11.15.14 at 6:04 pm

#121 Blacksheep

SDR’s

————————————————-

Yes they are on their way, the only surprise is going to be how they are implemented, but that’s still just a nut job conspiracy at this point

————————————————-

Remember the so called “nut jobs” that were saying the government is spying on us all

————————————————-

Remember all the nut jobs who thought the earth ended at the horizon?

Human nature. We sure have come a long way

#126 Cato the Elder on 11.15.14 at 6:21 pm

Re: #120 black sheep

China isn’t buying US treasuries anymore. If they dumped them on the market tomorrow, the US would be toast. That implicit threat allows them to extract concessions in their favour such as free trade deals in the US while they still charge import duties on foreign made goods.

Yes, China too would be hurt by dumping US debt. But who would recover faster? The manufacturing centre of the world with almost all the gold reserves and a middle class with savings, or the US with massive trade deficits, debt, and liabilities over 100 trillion?

Oh and it is readily apparent to anyone that is not under he assumption that politicians are angels that Obama has blocked Keystone to benefit his large donor Warren Buffet. Buffet has large holdings in railway that transport oil and would suffer from a pipeline. This is why crony-capitalism is so dangerous. The pipeline is much safer and cheaper for oil transport than rail and yet politicians are blocking it for their own gain. They gain, we lose.

**********

The CPP is not underfunded, and China is the poster child for wealth inequality. You are so full of it. — Garth

**********

I’m not saying China is perfect. But they are headed in the right direction. Western countries are headed in the wrong direction of more debt and bigger government, while they are reforming there’s and downsizing it’s role in the economy. They are even beginning to discuss relaxing political controls, while people like Obama are discussing regulating the internet and Harper wants to expand domestic surveillance powers.

I remember even when I was a kid I asked myself why third world countries could grow at 8-10% a year and yet we were stuck at 2-3%. The reason is they were pairing back on government and free markets were filling the void. Western governments have nestled themselves in every knock and cranny and explains why we can’t grow at the same rate. When was the last time Canada innovated something? Blackberry? Look what happened there – hubris. Why aren’t there more success stories?

#127 Harbour on 11.15.14 at 6:23 pm

#124 Cato the Elder

I don’t even know what your rambling on about, but I started it with posting a link.

I’m finished, you can play with yourself.

#128 Cato the Elder on 11.15.14 at 6:34 pm

Re: #122 stupid

You’re wrong. The past 200 years have given rise to something unique in world history: a middle class. A middle class derived not from government benevolence, but in spite of it’s interventions and confiscations. We have enlightened minds like Smith, Jefferson, Bastiat, and Madison to thank for that.

The middle class is a product of free markets. It is slipping away because for the past few decades western governments have been growing immensely. Resources are not allocated properly by government and it often goes instead to well connected friends. These funds don’t reach exactly who they need to.

Juxtapose this to the free market allocation of resources. Provide a good or service to your fellow man that may voluntarily choose to buy it. Charge too much, provide too poor a service, and you make no money. Does that sound like how the government operates? No, they just raise taxes and force you to participate, regardless of the value they provide.

Competition in a free market keeps product quality improving, prices decreasing, productivity rising, and employees earnings growing. We have the opposite on almost every one of these today.

Only in areas where government involvement is limited do we see all of the above, such as in computer technology. Growing wages, improving products, prices falling all happen in that space.

Endorse freedom. Get the government out of the way. Watch the boom happen.

#129 Cato the Elder on 11.15.14 at 6:55 pm

Re: 127 harbour

Thank you for unwittingly proving my first paragraph in #124 as a correct characterization of yourself.

Made me smile. Also made me sad that intellectual curiosity – the desire to learn how one could be wrong and why – is not a widespread trait.

#130 devore on 11.15.14 at 7:17 pm

Speaking of “managing risk”. Vito Corleone’s house is for sale. The historic property can be yours for less than the price of a west Vancouver teardown.

#131 Steve French on 11.15.14 at 7:22 pm

Australia is driving 150 km per hour right into a major recession for 2015.

The rubber is flying off and the wheels are wobbling on their axles… it’s inevitable that this economy is gonna slow right down to a crawl!

2015 recession is baked into the cake. There’s nothing that can be done to stop it.

Now it’s more a matter of thinking through what comes after the banks, dirt, and houses economy.

http://www.sbs.com.au/news/article/2014/11/14/economist-expects-recession-2015

Ah….Mr. Wong’s fortune cookie say….not so lucky anymore… eh Mr. Aussie?

#132 Setting the Record Straight on 11.15.14 at 7:28 pm

@128
“You’re wrong. The past 200 years have given rise to something unique in world history: a middle class. A middle class derived not from government benevolence, but in spite of it’s interventions and confiscations. ”

I disagree with this contention. What was unique was the emergenceof a prosperous working class post World War II. Capitalism raises standards of living and that’s a good thing. But the iconic representative of the so called middle class was the UAW auto worker. Not middle class but middle income.

#133 Herb on 11.15.14 at 7:32 pm

#124 Cato,

“Your understanding of capitalism is wrong”, my dear fellow. Have you ever heard of marketing/advertising?

You acquire wealth by providing a mirage of “a good or service to your fellow man” to persuade him to “voluntarily” purchase it. The “capitalism” you extol exists in the same separate reality as the Tooth Fairy.

#134 crowdedelevatorfartz on 11.15.14 at 8:06 pm

My conspiracy theory.

Cato is actually an alien from the Planet Brilliant in the star cluster Ego and has an IQ of 9000…..
You Earthling’s unique experiences will be assimilated and added to his rapidly expanding vocabulary.
He may occasionally explode in Turrettes-like profanity but thats’ the price one pays for a superior intellect
Silly hu-mans.

#135 Obvious Truth on 11.15.14 at 8:10 pm

#122 I’m stupid

Perhaps Cato on #128 made some sense here. Maybe kings and peasants control only when we let them.

If we get them out of the way do we live better?

So who are today’s kings?

#136 Tony on 11.15.14 at 8:13 pm

Re: #120 Cato the Elder on 11.15.14 at 5:43 pm

China was just a pawn on a chessboard, they were just there to make America rich. America pulled all the strings at the time. China will revert back to their roots of third world status I can assure you. Everything backfired on America in the last 30 years. Switzerland is the place.

#137 crowdedelevatorfartz on 11.15.14 at 8:27 pm

Cato .
The curried chicken is almost finished.
The frightening result aproximately 1 hour after the consumation of the meal is a gurgling miasma in my lower digestive tract. The ofaculatory “offensiveness” is merely up to the person in the elevator.
Some are heartier than others.
Some scream and faint. Some glare at my wide eyed “it wasnt me” shake of the head. Still others, the truely evil, ADD to the stench. As if two cadavers are better than one…..only a vulture could answer that question with any real certainty, but I digress.

I take you for a fainter.

#138 Retired Boomer - WI on 11.15.14 at 8:35 pm

#128 Cato the mis-informed history reader

The “Middle Class” in the U.S. began to arise after the trust-busting presidency of one Theodore Roosevelt.
It expanded a bit with unionism and socialistic causes through WWI and through the roaring 20’s. Despite some silly ideas like alcohol prohibition in the US – which actually was the founding idea of an income tax to replace the lost liquor taxes.
My Grand father – a gardener, & bootlegger about 90 miles northwest of Chicago, an immigrant from the early 20th century from Eastern Europe was part of the ‘fun’
They did what they NEEDED TO DO to survive the depression of the 30’s. Most Americans did during those times.
FDR president from 1932 through his death in 1945 indeed, saved Capitalism. He saved it by sharing more of the fruits of capitalism from the top toward the bottoms of the economic ladder. That brought in old age pensions, and unemployment insurance, workers’ compensation to those injured on the job, the list is rather impressive.
At the close of WWII we had the largest DEBT in our history. Through higher taxes we paid a big chunk of it off, but starting in the 1980’s -cue Reagan- Tax cuts, defense spending have now altered the scales.
Now, we pay less in FED Taxes, but have less with larger deficits. We no longer impose a duty on imports a so called “free trade” idea which is largely bullshit.

I might suggest you study “middle class” economics from say 1960 through today, and after inflation adjustments see how far backwards the ‘conservative’ ideas have taken us.

This is just MY opinion, and opinions are like rear-ends we each got one. I lived this one, graduated high school in 1969 worked from age 15 to 60 when I had enough to call it quits. No, not all results will be equal, that is the beauty of a free market, and free choices. You gets to takes your chances, makes your choices, and pay your dues!

Hey, I am personally doing just fine, I don’t ‘need’ a dam thing. I would also like to think I make some ok choices along the way

#139 Nemesis on 11.15.14 at 8:45 pm

“It’s a well calculated number put out by professional organizations like the Frasier Institute.” – ElderlyCato

#TheFrasierInstitute

http://youtu.be/XBYCZKFQShA

#BonusZen… #SeparateRealities&CapitalistToothFairies,Or… #SoonerOrLaterAllVirtuousEmmaZauns… #GetToBossTheRock:

http://youtu.be/YuJb1VG4VFw

#BonusBonusNonSequiturZen… #BaldingBoomersBrandishGuitars… #SomeWhereInGatedArizona?…

http://youtu.be/ST7JZffUwV0

#140 JimH on 11.15.14 at 8:49 pm

#132 Setting the Record Straight

Good post!

The middle class was most certainly NOT a gift of any “free market”! Nor was it in any sense a simple by-product.

The middle class truly emerged and began to proper only after much blood, bitter tears and aching tears were shed by awakening workers!

It is no coincidence that the spectacular rise of the middle class in western industrialized societies corresponded with rise of the trade union movement.

And, as that movement has been gutted and and its numbers decimated, so too has the middle class been steadily shrinking. (The unions themselves can shoulder at least a portion of the blame for this themselves).

#141 Pulp Faction on 11.15.14 at 9:34 pm

While I disagree with hunting for trophies……many people hunt black bears for the meat and discard the hide. Black bear meat makes excellent sausage, as well as hams, bacon, and chops.

Just so you know all the facts.

#142 Lafleur coming out rather gingerly on the right side on 11.15.14 at 9:38 pm

Silly notions of unfettered capitalism leading us to nirvana are just that – silly. No human system has ever been developed that can run on auto-pilot. The price of freedom is always eternal vigilance. Capitalism is terribly flawed and without vigorous regulation leads to social and environmental catastrophe, and always has.

Any social and economic proposals must always pass this test IMHO.

http://en.wikipedia.org/wiki/Veil_of_ignorance

#143 Pulp Faction on 11.15.14 at 9:40 pm

The lady in the article should buy Money Road, read Money Road, and follow Money Road. She will have no more questions.

It’s only twenny bux, I have bought several for friends and they all love it, and many more are asking for a copy.

I doubt the author is getting rich off the book sales at a royalty of a buck a copy, it’s almost free and it’s more of a gift.

You make money on books selling millions of copies, not thousands. I doubt the financial rewards compensate the author for countless hours of writing, editing, publishing, etc.

A lot of thought and effort was obviously put into this book, and it is well worth the time to read it.

As far as the cost of it goes, you’re only paying the cost of someone printing you a copy of it.

It pays in pride only, and it will save your financial life from your bad and uninformed, uneducated, unknowledgeable decisions.

Buy the book. Listen to the author. It’s all good advice.

#144 Mike S on 11.15.14 at 10:08 pm

“I was simply asking for an opinion on smart beta – do you have one you’d like to share?”

Eventually it comes down to taking greater risk to try achieving greater return. Let’s take the etfs you mentioned. Why do you want to pay bigger management fees to hold less equities?

#145 45north on 11.15.14 at 10:34 pm

bigrider : If Italians didn’t live in the GTA I think house and condo prices might be half of what they are today

the big influx of Italians was in the 60’s. Woodbridge was farms.

HogtownIndebted : where will people look for liquidity next before taking a long, sober look at their housing “assets”?

my in-laws sold in Toronto, last month, at what I believe is the height of the market. A lot of people are going to take a long sober look and find that they have to write a cheque to sell.

Mark : Diminish the government guarantee in any way, shape, or form, and the lending community simply will pull away from giving those loans good rates.

or more simply pull away

Mark : Aeroplan redemptions are designed almost never to displace a paid revenue seat.

makes sense to me

#146 Mike S on 11.15.14 at 11:06 pm

“Thanks for the tip Mike S – how do you think I was able to save so much at such a young age without investing real time into studying the subject?”

I don’t know. How were you able to save?

“I’m mostly liquid now but haven’t always been. Part of my success has been from recognizing that I do not have all the answers (probably never will) and seeking out the opinion of others, as well as doing my own research.”

What changed now? You don’t need to know all the answers, but you need to be able to define a financial plan that suits your goals and be confident enough to follow it (I mean confidence that comes from understanding, and not fake overconfidence), or just find an adviser

Most people don’t have the desire nor time to study the subject. Even if they do their true risk tolerance may vary from what is suitable for 60% / 40% portfolio.

This is perfectly fine in my opinion. unfortunately we have a housing bubble made by irresponsible politicians, and this is why “normal” plan of “buy a house and put the rest for retirement” won’t work, causing great pain to many people

#147 Derek R on 11.15.14 at 11:20 pm

#135 Obvious Truth on 11.15.14 at 8:10 pm asked:
So who are today’s kings?

Well, #122 already gave you a good idea but let’s take another look. In the old days the kings and the aristocracy owned most of the land. And the peasants worked for them. Nowadays the kings and the aristocracy own most of the mortgage debt for the land. And the peasants work for them.

So things are completely different. It used to be that the aristocracy were the people who owned the land. Now they are the people who own the debt.

#148 Sheane Wallace on 11.15.14 at 11:24 pm

Harpo little boy is completely lost. so stupid little boy. idiot.

#149 45north on 11.15.14 at 11:28 pm

Retired Boomer – WI : They did what they NEEDED TO DO to survive the depression of the 30’s. Most Americans did during those times.

The Great Depression of the 1930s was characterized by the scarcity of jobs and money. Entire families – husband, wife, children – all sought some means of earning an income in a tight job market. The taking of piece work to be completed at home, then returned to the factory or shop from which it came, was a universal industrial practice of the period. On the Lower East Side, lace-cutting was the most common type of piece work, which provided employment.

The Building 1928-1956, Seymour N. Harris, chapter 4

#150 Dominoes Lining Up on 11.15.14 at 11:30 pm

More on why our condos suck. Good video discussion.

http://www.theglobeandmail.com/video/globe-now/video-in-15-to-20-years-owners-of-glass-condos-will-be-in-trouble-sustainability-expert/article21571875/

#151 SWL1976 on 11.15.14 at 11:32 pm

#89 OKInvestor

———————————–

Thanks for the link. I think the interview touched on lots of good points with what is really going on on the world stage that the MSM will not touch. Ever.

Am I happy with the way things are going? No.

Am I proud of how our leader represented us at the G-20 this week? No.

The west right now is about to be starring in the face what 5 decades of corruption, greed, mismanagement, theft on a grand scale, and general arrogance towards the rest of the world, will get you. By you I mean us.

Do I want this to happen? No.

Do I wish the west had played fair on the world stage for the last 5 decades? Yes.

I knew when I was 10 that there was something wrong, but I was 10, I didn’t know what that was yet. Besides having a grade 12 obedience certificate, and a trade certificate by 21, I am not and educated man. I consider my post graduate degree to be very unorthodox, a degree in life. I have spent the greater part of my adult life trying to figure out the problem I noticed when I was a child.

When one looks at things in a very analytical way without emotion, one will see how the pieces fit. The internet has been and is a fantastic research tool. This strategy is not vastly different from how an economist analyses charts to see where the markets are going. Without emotion.

One only needs to do a little research with an open mind, ask uncomfortable questions, and answer them without emotion to see which way the wind is blowing

I am not a doomer, I do have hope, but am often discouraged by peoples ignorance.

Ignorance is bliss, but its still ignorant

#152 Sheane Wallace on 11.15.14 at 11:34 pm

conversation translated:

Harpo told Putin: stop the BRICS bank. My bosses are not happy

Putin said: get lost.

#153 Blacksheep on 11.15.14 at 11:37 pm

Cato # 126,

People see what they want to see.

“Obama has blocked Keystone to benefit his large donor Warren Buffet.”
—————————————————
Obama is irrelevant on Keystone, it’s going through sooner or later, for the reason I pointed out.

“That implicit threat allows them to extract concessions in their favour such as free trade deals in the US while they still charge import duties on foreign made goods.”
—————————————————
100,000 US lobbyists ensure a duty free runway for American corps repatriating Chinese made crap, nothing more. What the does the US make any more and why the hell would the Chinese want to buy it. I thought China was the manufacturing centre of the world?

“with almost all the gold reserves”
————————————————–
Now your just making shit up. USA 8,000 tons. China 1,000 tons.

http://en.wikipedia.org/wiki/Gold_reserve

Clearly your well read, but it seems some emotional bias may be creeping into your assessments.

#154 Sheane Wallace on 11.15.14 at 11:39 pm

mind blowing comments on CBC.

http://www.cbc.ca/news/world/stephen-harper-at-g20-tells-vladimir-putin-to-get-out-of-ukraine-1.2836382

#155 45north on 11.15.14 at 11:55 pm

talk about managing risk:

A man tried who tried to hold up a bar in Bruderheim, Alta., with a fake gun has died in hospital, two days after the robbery was thwarted by patrons who intervened.

https://ca.news.yahoo.com/bruderheim-bar-robbery-botched-patrons-174017583.html

She handed about $500 in cash to the man, who she estimated was in his fifties or sixties.

so maybe the guy was not in great physical shape, maybe was a nervous wreck

got punched out

died

#156 tanned and sassy on 11.15.14 at 11:59 pm

Hows the Polar Vortex going guys? Greetings from sunny Thailand…..it just keeps getting better and better. No surprise that more foreigners are putting down roots here every year. It takes about tn minutes to forget all about the bitchy Canadian bitch fest and down tools with a cold one beside the pool. Many other benefits…but this is a family show. Real estate crash…what real estate crash…no one cares.

Got a Plan?

#157 cynically on 11.16.14 at 12:27 am

To Cato the crotchety old man : your constant diatribes are becoming ridiculous. You post more than any other individual on this blog and your postings consist of the same anti-establishment opinions or invective against those who question them or those like me who are tired of them. There may be some “truth” in what you are espousing but your manner putting forth these views as fact when they are just your opinions has become very tiresome. You are obviously angry at something some government or head-of-state has done to you personally or in legislation the way you continue to hammer at Canada and the US governments or their leaders. Give us a break.

#158 Hawk on 11.16.14 at 12:27 am

#85 Daisy Mae on 11.15.14 at 11:40 am

===========

Waste water?……basis for that strange assumption?

Most people (including me) don’t water their garden too often.

Most people (including me) don’t have swimming pools in their house.

Perhaps you should think things through more carefully. The technological cost of transporting water does not increase 9% year over year. But its well know that salaries and compensation packages for public workers and particularly Toronto Hydro workers are very high. That and not wastage is what’s responsible for the fleecing of the citizenry.

#159 twriter on 11.16.14 at 2:33 am

#144 @ Mike S

“Eventually it comes down to taking greater risk to try achieving greater return. Let’s take the etfs you mentioned. Why do you want to pay bigger management fees to hold less equities?”

The ETFs I referenced are 100% equity and cost approximately 50bps – not sure you are familiar with the ETFs I’m asking for an opinion on.

You might want to try this link which helps break things down:
http://www.investopedia.com/articles/investing/022714/building-better-mousetrap-smart-beta-etfs.asp

#160 Taco The Regurgitator on 11.16.14 at 3:15 am

Hi everybody, I just wanted to introduce myself. This will be a short post but I intend to post very long, tedious, repetitive essays soon. At present I’m reading every conspiracy theory site that I can find and will certainly absorb them and then do everything possible to force those views upon all of you people as soon as I can.
It must be understood that I’m only doing this for your own good as I’m so much smarter than you and therefore compelled to pass along my vast knowledge and then reinforce the same through monotomous repetition. As you can clearly see it’s for your own good that I do this.
Thank god the side effects of all of those medications made me see the light and throw them away so that I am free to spread my knowledge to all of you.
Until next time, rules are bad there shouldn’t be any. There should be no tax and health care should be vastly improved and remain free. All of those criminals should be rounded up and put in prison especially the ones who have been making all of these rules and increasing the size of law enforcement agencies. Good god wake up people why can’t you see what I’m telling you.

#161 twriter on 11.16.14 at 3:22 am

#146 @ Mike S

“Thanks for the tip Mike S – how do you think I was able to save so much at such a young age without investing real time into studying the subject?”

I don’t know. How were you able to save?
—————————————————————–

I invested real time into studying the subject of saving and investing, I looked for opinions from people I know to be successful. Sounds like you are looking for a financial advisor Mike S. I have had an advisor in the past – and he unfortunately provided bad advice. Finding a good advisor can be challenging. Even if I do find a great advisor – that doesn’t mean I shouldn’t be asking the opinion of others and growing my investment knowledge. Which is what I’m trying to do here on this blog. I welcome your opinion on geographic allocation, asset allocation and products such as ETFs – thank you!

#162 Rexx Rock on 11.16.14 at 6:24 am

#156

Come to join you in Thailand to relax part of the Winter than in Sh!tt hole Canada.To expensive for me.Live good for $800 a month,not a bad idea.To the rest of you canuckleheads ,work and slave to pay off the house and in 30 years you can also live like a king.

#163 Leaving Cowtown on 11.16.14 at 9:23 am

My self employed work in IT can be done anywhere and my wife already has offers to be a nurse in two provinces. We have smelled the tea leaves and put our place in south Calgary up for sale two weeks ago. If no deal this week we will lower the price enough to make it happen. We are gone by January and will take a nice break and get a great deal somewhere else in the winter market or maybe rent for a year.

This news today makes us feel how right we are.

http://www.cbc.ca/news/world/g20-summit-u-s-eu-override-australia-to-put-climate-change-on-agenda-1.2836741

Friends and neighbours are all so happy with their property values now. It hurts to think of what they will be facing soon.

#164 Sheane Wallace on 11.16.14 at 9:56 am

#157 cynically

Canada is about tolerance. If you don’t like Cato’s posts don’t read them. If you think you can enforce your conformism on others you are wrong.

#165 joe on 11.16.14 at 10:23 am

Most bears killed are baited during the off season to attract them to the same spot where macho neanderthals sit in tree’s out of harms way waiting to shoot it. Some use deer cams set up beside the bait to watch from a distance to make sure they have something to kill when they get there…..hunting….I don’t think so.

#166 Tony on 11.16.14 at 11:18 am

Re: #163 Leaving Cowtown on 11.16.14 at 9:23 am

Why not just rent for the next for the next 10 to 15 years? Home prices can only fall and the bottom you can be certain of is at least a decade away. Remember a flat market with positive inflation each year is still a falling real estate market.

#167 Tony on 11.16.14 at 11:31 am

Re: #160 Taco The Regurgitator on 11.16.14 at 3:15 am

At least you’re learning, I state my own theories right here on this blog but I do read other theories. 99 percent of the other people on this blog are “lost in the twilight zone” and are 100 percent clueless. I’m mostly here to read what the other people say and do the opposite.

#168 rosie "moving forward" in the knowledge that, "this won't end well" on 11.16.14 at 11:34 am

Thailand, yea right.

http://www.telegraph.co.uk/travel/destinations/asia/thailand/11228849/Thailand-most-dangerous-tourist-destination-claims-book.html

#169 Marco Polo on 11.16.14 at 12:16 pm

Things seem to be taking a turn here in Alberta. Myself, and others I talk to, are seeing a change in engineering, planning, and oilfield development companies in past weeks.

Companies and managers are now far more careful of spending, and of identifying who is billable, and who isn’t.

Home prices are falling slowly here in Edmonton. Houses and condos listed only two or three weeks ago are now being repriced 20k lower. This speaks to the greed and desparation of some sellers, who still demand May prices in November.

As I have said to friends over the past two years, I would be a seller of Canadian RE, not a buyer. Several months of lethargic $70 oil could do that. My suspicion is that Russia won’t alllow that, and will trigger further invasion in Ukraine to boost their global oil price.

I see many greaterfools on this forum, who follow these illusions of MH17 conspiracies via the Ukrainian airforce. I think the internet promotes these lies, in this case, Russian state propaganda via RT. I suggest if someone is so interested, go see how great this Russia is, live in some small town and live on the local wage. You’ll find Canada a place you’d want to return to. Trouble is, these talent-less posters have never been to Ukraine nor Russia, and need to leave their sofa before making predictions of MH17 conspiricies and alien abductions.

I’ve

#170 Mike T. on 11.16.14 at 12:34 pm

#122 I’m stupid on 11.15.14 at 6:01 pm

“every man a king, if no one wears a crown”

Huey Long

http://en.wikipedia.org/wiki/Huey_Long

#171 Mike T. on 11.16.14 at 12:40 pm

Cato

Don’t fall for the East vs West false narrative

China is on the right track? Yikes!
You want to be ‘saved’ by the BRICS?

World politics is like the WWF (bad analogy but it gets the point across) – There are no good guys and bad guys, just a show for us to watch.

You’ve escaped many of the traps that keep people in the dark about the truth – don’t fall for this one.

#172 Karl hungus on 11.16.14 at 12:46 pm

Gonna be a big spring for edmonton real estate

#173 I'm stupid on 11.16.14 at 2:33 pm

#135 obvious truth

Cato just rambles. He speaks of the middle class but he fails to realize that the middle class is just a higher standard of living for peasantas. I’m not knocking the middle class, a true member of today’s middle class has a wonderful life. But the Kings live better.

You ask who are today’s kings. That’s easy they’re the ones who employ thousands and who’s decisions affect the lives of their employees. Take the Waltons, they control Walmart. Walmart employees over 2million people. These people can vote for their respective gov’t but they have no control over what their masters will do. With a stroke of a pen they can close or move a distribution centre and devastate thousands.

Look at Rogers, they bought the Rogers centre (a building that cost the tax payers hundreds of millions) for $21million. Did you see a for sale sign? If I had 30million and offered it to buy it it would be rejected because Im not a king. I don’t employ thousands.

It’s just the way it is. Deal with it and move on. The best the majority of us can do is to become masters of ourselves. The only way to do that is to become financially independent. If I have enough money I can tell anyone to F off.

#174 Barry on 11.16.14 at 2:34 pm

ETF’s?

NO! See what they buy and make your own “Fund”

ie TD Bank, Johnson and Johnson,Emera, Enbridge Income Fund, Royal Dutch Shell, Procter and Gamble, Fortis. You collect all the loot, get the dividend income tax credit, and zero management fees. Get the DRIP plan for each of these yearly dividend raisers.

RRSP’s are rubbish. Sure the tax saved at 30 is great but when you MUST withdraw they are fully taxed and at age 71 I’ll be happy if I own the individual stocks and pay little in tax because of the credits. Think the health care system is going to get better when you’re that age? CDNs will still be saying “isn’t it nice to have” until they have to wait for an operation and pay their prescriptions.

If anything I’ll just spend the income and let the capital grow as price follows dividends which are increased yearly. I’ll be in charge for what I spend, not the government which is forcing me to withdraw and pay tax on X amount.

TFSA – put your REITs there. Zero tax on 8%

I’m 62 and all of this has worked INCREDIBLY well for me.

#175 cynically on 11.16.14 at 2:35 pm

To Sheane Wallace @164 — Canada is about tolerance-crap! Only the mindless have no intolerance and Canada is about free speech, tolerable or intolerable but accepted. My comment re Cato’s dozen or so postings each day was that they are too long, rambling and pedantic. He is not putting his points across to many of us I’m sure, even if he has some valid ones. Agree?

#176 RealistvsExtremist on 11.16.14 at 2:45 pm

Seems the HAM virus causing hemorrahagic house prices has crossed over into gasoline. Welcome to BC. Best place in the world – we keep getting brow beat.

http://globalnews.ca/news/1672790/gas-prices-go-up-in-vancouver/

#177 Herb on 11.16.14 at 2:50 pm

#169 Marco Polo,

bit of advice for you armchair world voyager: pick the propaganda you chose to believe carefully. If you think that propaganda is solely a Russian practice, I’ve got a great bridge for you.

Treat every claim made by any side in international relations (and politics!) with suspicion unless or until you have factual grounds to give it your intellectual assent and credence. Less than that would make you a credulous fool.

#178 Cato the Elder on 11.16.14 at 3:07 pm

Re: #169 Marco Polo

“No one is more hopelessly enslaved than someone who falsely believes they are free”

That is how I would describe your mind – and it’s quite accurate given what you have said.

Internet is FREEDOM. You think Garth could get the kind of exposure he has on this blog through television? The brilliant part about the internet is you can post ANYTHING you want. It is up to free thinking individuals to determine for themselves what is worthwhile and what isn’t.

The internet has truth AND lies on it. However, if you objectively analyze the evidence, and various sources come to the same conclusion, you can realistically come to hold it as truthful. No, I’m not talking about fringe blogs that go on long winded rants. I’m talking about the new generation of investigative journalists that do hours of painstaking research like Glenn Greenwald at the Intercept.

Television doesn’t do that. Television exists for a single purpose: to sell you things. Advertisers have a huge amount of control over news media because they don’t want to rock the boat – they don’t want their products associated with controversial programming.

Russia IS NOT IN THE UKRAINE. A region of Ukraine held a DEMOCRATIC vote to leave, and the central government there SAID NO. It is no different than the vote Quebec and Scotland held, except that Western governments don’t want to recognize it’s legitimacy.

And the regions of Ukraine like Crimea that voted to secede ARE PRIMARILY ETHNICALLY RUSSIAN. They speak Russian, they are genetically Russian, AND THEY HAVE HISTORICALLY a part of Russia.

And after they voted to leave, Kiev has been bombarding CIVILIAN populations with munitions. There is a de facto genocide happening right now, and the whole western world is ignoring it.

Your mind has been completely overtaken by a bombardment of propaganda. I’m not saying Putin or Russia are good. I’m saying we should mind our own business. Why the hell should Canadian boys and girls die over there? It has nothing to do with us. It would anger us greatly if Russia involved themselves in Quebec’s referendum – REMEMBER THE GOLDEN RULE: do unto others.

And the West is in the wrong here FROM THE BEGINNING. The US overthrew Ukraine’s government because they were taking a softer stance with Russia. Nato has been surrounding Russia for years as more and more countries join – IN SPITE OF PROMISES TO THE FORMER USSR that WE WOULDN’T DO THAT. One of the reasons the USSR disbanded is because they were given promises from the west that we wouldn’t encroach there territory – WE ARE LIARS.

How can ANYONE claim to hold the moral high ground in the west? There is no principled integrity. If we were more like Switzerland, than we could have our opinions. But we have wronged = and as long as that is true, we shouldn’t pass judgement.

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

Re: #157 Cynically

I’m not old. I’m young.

Part of my frustration stems from the fact that our country has been completely destroyed by socialism. Socialism voted for by a previous generation.

And now, me and my generation are left stuck with the bill. Can we afford to raise 3 kids, have a house and 2 cars, all paid off relatively quickly, with good leisure time and a solid pension? NOPE. Well, it’s possible but a hell of a lot more difficult, expensive, time consuming, and stressful.

I endorse free markets because when someone makes a mistake, only they suffer for it. Socialism puts that on someone else, and that someone is ME and my fellow millenials.

Not only that, but there is a HUGE ethical TRUTH in what I’m saying. It isn’t a matter of opinion. You can’t steal from someone. Why should your government be allowed to? As Bastiat said, you can’t empower your government to do something that you can’t do by yourself.

Democratic legitimacy does not grant legitimacy to their actions. Martin Luther King famously stated that everything that happened in Nazi Germany was LEGAL – and that is true. Just because your government passes a law, doesn’t mean it’s automatically the RIGHT thing to do.

And you know what? Canada isn’t that bad compared to many countries around the world. But that attitude SUCKS. Why should we ever settle for ‘it’s pretty good’ when we could be the GREATEST NATION ON EARTH. There is MASSIVE room for improvement.

If we truly endorsed free market policies, within 10-20 years, the average person could have so much wealth, and be so productive, that we could spend 1-2 days a week at work and still be richer than the rest of the world.

Who wouldn’t want that?

#179 Daisy Mae on 11.16.14 at 3:09 pm

#120 Cata: “If it took a day to make a widget, and now it takes 1 hour, you have the capacity to allocate more hours of your day to leisure. This is simple and yet our politicians don’t get it – especially in France where there are a myriad of holidays and 25%+ unemployment.”

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

Canadians are moving toward a 4-day work week. Our governments are continually dreaming up reasons to declare yet another stat holiday. Our latest is ‘BC Day’ so families can spend time together. LOL Whatever…

#180 Blacksheep on 11.16.14 at 3:27 pm

Marco # 169,

“I see many greaterfools on this forum, who follow these illusions of MH17 conspiracies via the Ukrainian airforce. I think the internet promotes these lies, in this case, Russian state propaganda via RT. I suggest if someone is so interested, go see how great this Russia is, live in some small town and live on the local wage. You’ll find Canada a place you’d want to return to. Trouble is, these talent-less posters have never been to Ukraine nor Russia, and need to leave their sofa before making predictions of MH17 conspiricies and alien abductions.”
———————————————
That…is just awesome reasoning.

Some things are so obvious, yet a lifetime of state indoctrination results in, Russia = bad, Canada / US = good and simply shutters minds to reality.

Events are far more complicated than your simplistic views portray.

#181 Cato the Elder on 11.16.14 at 3:52 pm

This is why China is the world’s number one economy and will continue to overtake the west:

http://www.reuters.com/article/2014/11/16/us-china-growth-business-idUSKCN0J00D120141116?feedType=RSSfeedName=GCA-Economy2010

They’re cutting taxes going into a recession – THE RIGHT THING TO DO.

What do our politicians do? Cry out for more regulations, taxes, and bailouts. All which serves to strangle and kill any remaining vestige of wealth creation in the private sector.

#182 devore on 11.16.14 at 4:29 pm

#171 Mike T.

You’ve escaped many of the traps that keep people in the dark about the truth – don’t fall for this one.

Us vs them, works every time.

#183 Retired Boomer - WI on 11.16.14 at 4:34 pm

#174 Barry

I agree 100%. Good dividend payers held for the long haul, better than any annuity.

RRSP sure take advantage of it when you’re 30 just remember to shift it over toward the TFSA before your mandatory spend date. We have the same thing in the US
401K tax deferred til age 70.5 or the ROTH tax free savings plans. You are limited in what you can stick into a ROTH per year while working, but you are not limited to tax shifting from a tax deferred to an untaxed account (but you must pay the income tax rate in effect at the time of that transfer). It CAN pay off if you do this correctly.

TAX rules can be advantaged if you work at it. CATO might disagree, but this IS the current regime we all operate under. Only you will benefit by taking action, when it is appropriate. A good advisor can help -assuming you can find one!!

#184 devore on 11.16.14 at 4:47 pm

#120 Cato the Elder

If it took a day to make a widget, and now it takes 1 hour, you have the capacity to allocate more hours of your day to leisure. This is simple and yet our politicians don’t get it

Sounds like voodoo economics. Increased productivity does not increase leisure time, it increases efficiency. In the case you describe, increased efficiency will lead to lower prices, not increased leisure time, as your competitors will see to it that they make 24 times as many widgets that they sell for 1/24th the price each (or whatever S-D equilibrium is reached). How much leisure time are you going to have with a tiny fraction of your income?

This is one of the reasons why increasing productivity has not resulted in a society where we work 2 days a week, and robots do everything else. Leisure time has not increased. Available time has increased, through under- and un-employment, but that’s not exactly leisure.

#185 JimH on 11.16.14 at 5:15 pm

#181 Cato the Elder

Your post seems to imply that China doesn’t do bailouts, stimulus packages, or impose more regulations at will!

No bailouts? How about their bad debt crisis bailout that saw the government take over toxic debt? Like $45 billion (US equivalent) to cover bad loans at the Bank of China and the China Construction Bank. This was the tip of the iceberg. The government has been shovelling money out to other lenders as well.

Even as you endlessly babble away, the Chinese are currently contemplating another round of QE as the massive infrastructure stimulus seems to them to be inadequate!

These facts have been reported in the Financial Times, The Wall Street Journal, Forbes, etc & etc.

Simply Google “chinese bailout” “china stimulus” etc., and educate yourself! Try following the advice you so hand out to others! You have more to learn than you can imagine!

You might also do more study into the Chinese “balance sheet recession”, as opposed to “economic recession” as you appear to make the common mistake of confusing the two. The Chinese are far far away from the quarters of negative growth that we consider recession.

When you’re done with all of the above, just for fun Google “urban dictionary: pompous ass”.

#186 chapter 9 on 11.16.14 at 5:17 pm

#169 Marco Polo
The world’s seventh deadliest air disaster took place July 3 1988 when the U.S. Navy shot down an Iranian Airbus A300 with 290 civilians on board and crew. Amongst the dead were 66 children.
Given the current situation with downed flight MH17, the U.S. is not in the best position to stand on the pulpit and chastise anyone let alone Russia.
As with anything there are always two sides to consider when making an informed decision.

#187 Herb on 11.16.14 at 5:34 pm

#181 Cato,

China may be doing what you call “THE RIGHT THING TO DO”, but they haven’t had 30-odd years experience with Thatcherism/Reaganomics.

We have.

#188 Nemesis on 11.16.14 at 7:09 pm

#It’sGoodToBeTheKing…

http://youtu.be/8z8SpgmF0sA

#Well,MostOfTheTime…

http://youtu.be/R7qT-C-0ajI

#189 A Yank in BC on 11.16.14 at 10:15 pm

#186 chapter 9

To the contrary, the US is completely justified (perhaps uniquely so) to “chastise” Russia over MH17, because in 1988 the US immediately admitted to the tragic error that was made by the crew of the USS Vincennes, and also voluntarily paid compensation to the relatives of those killed. In contrast, Russia (Putin) refuses to take responsibility for what is clearly their doing. (MH17)

Another major difference is that the Vincennes was in Int’l waters and believed it was acting in self-defense. The Russian-made Buk missile that brought down MH17 was fired offensively.

#190 Marco Polo on 11.17.14 at 12:34 am

Rather than simplistic world views, I have lived in Odessa, and Kherson. I speak both Russian and Ukrainian. Leave Ukraine to the Ukrainians, and not to your alternative world views. Do pobachennya.

#191 investinyoursoul on 11.17.14 at 1:34 pm

#23 Cato the Elder

Thanks, man, for providing some sanity amidst all that pro-ukrainian hysteria.