The temptress

BILLS modified

Andrew took his babe to the bank. Like most 24-year-olds, she doesn’t know how to invest. TFSA in cash. High-fee mutual funds. And way too much in GICs. “We went,” he says, “to set up an on-line trading account to give the girly access to low cost index funds and ETFs.”

Perfect. That’s progress. But then [email protected] turned into a temptress. And war emerged.

“As we were finishing up, I excused myself to take a phone call.  When I came back, no more than ten minutes later, a ‘mortgage specialist’ had joined us.  My GF had disclosed that we currently rent (she left out the part about our all-in housing cost totaling 10% of our gross income).  In the span of ten minutes, the [email protected] tag team had convinced my GF that buying was not only affordable but was the only logical decision for us to make now that we lived together (throwing money away, building equity, low rates, etc.).  I practically had to fireman carry her out of there but escaped without $400,000 of debt in tow.  Longest ride home of my life.

“I do not believe that Canadian mortgage lenders practice the kind of predatory techniques that we saw in the US leading up to their housing crash.  However, I now realize that the banks have two scripts for [email protected]  I was of no interest to them but the reps we dealt with could spot a financial noob from a mile away and seemed to know that they don’t have to convince me of anything. They only need to convince an eager spouse and hormonal housing lust will do the rest.  I am astounded that after two full years of pushing my high liquidity, long-term focused, debt-free,lifestyle on the GF, it took less time than it takes to make a cup of tea to upset the apple cart.  This will be an uphill battle.

“Please keep the blog posts coming.  Our blog dog legion is growing but I will need all the ammo I can get to fight off the all-out assault from [email protected]

Canadian banks have long called mortgages, ‘relationship’ products. Once they’ve you signed up for a home loan, chances swell they’ll get your savings, TFSA and retirement account, plus sell you insurance and flog a mess of mutual funds. Besides, bankers make a spread on every mortgage – and with the amount people borrow these days, they’ll be collecting for decades. Of course, because all mortgages open after five years in Canada, [email protected] also knows even if interest rates spike in the future, constant renewals mean the bank’s always protected.

And here’s the corker: bankers can fork over a huge amount, at a stupid cheap rate, even if you’re financially hopeless and have saved nothing, because there’s no risk. Thanks to the feds, and CMHC, all high-ratio, high-risk mortgages are backed by the taxpayers. If the kid defaults, the bank still gets paid.

Think about it. Minimal down payments. Borrow from your RRSP. Or Mom. Cheap rates. No risk premium. Federal, provincial and local tax incentives for virgins. And bankers with nothing to lose. No wonder real estate’s become the opiate of the indebted masses, bloating in price. No wonder the people in the bank branch are rabid, aggressive and seductive.

So now we have horny Millennials, average new mortgage borrowing of $10 billion a month, historic heaps of household debt and detached houses costing $1 million apiece in two major cities. Should anyone be surprised what the money-lenders and governments wanted has come to pass?

And yet, CMHC is. Incredible. This week the agency published its annual report, saying it’s now worried houses in Canada cost more than in the States. “This Canadian ‘premium’ could be a cause for concern, because it may indicate that house prices in Canada are overvalued.”

You think?

The feds will be analyzing this, to understand if the giant extra amount it costs Canadians to secure accommodation (Chicago median price for all homes: $188,200; Toronto average price, all properties: $599,658) is temporary, structural or “reflective of relative overvaluation in Canada.” Yes, I know. Like Beyoncé or cold fusion, this is difficult to believe. After all, by taking away the risk that would make bankers think twice about giving $400,000 to a 24-year-old who believes a TFSA is a savings account, CHMC itself is largely to blame. They need to analyze it?

Well, the good news is the agency may be worried, but says there’s no bubble.

So relax. They got this.

183 comments ↓

#1 Blobby on 11.20.14 at 6:32 pm

It was a story VERY similar to this which kickstarted my divorce.

#2 Forzudo on 11.20.14 at 6:36 pm

It’s really the nice lady at the bank who should be concerned. Scotiabank won’t be the last financial institution with billion-dollar quarterly profits, and thousands of layoffs.

#3 Shanks on 11.20.14 at 6:39 pm

Ya they for this… Like I’m first.

#4 David W on 11.20.14 at 6:49 pm

Moral of the story…banks want to give you money because if you cant pay, your fellow citizens foot the bill. Hmmm, I wonder if ppl will get angry when they learn their tax dollars are going to pay for irresponsible lending. People should have a moral obligation not to take mortgages if their finances are crap.

#5 calgaryPhantom on 11.20.14 at 6:49 pm

It’s all planned. For last two years, CMHC, Finance minister and BoC chief, they have all come out randomly with caution about housing. It’s all the slow feeding into masses brains. They know, if this thing bursts, they would have conditioned peoples brains in thinking that we received enough warnings from the people in charge. And we did not listen. So it is our mistake.

#6 nonplused on 11.20.14 at 6:56 pm

Everything costs more in Canada because of taxes, exchange rates, and the fact that much of it is so remote. (Yes, Calgary is remote. The nearest civilization is almost 1000 miles away unless you count Edmonton.) But even all those factors don’t add up to the difference in real-estate prices between the US & Canada.

Is it really twice as expensive to build a house in Canada? And if so what are our house builders doing so wrong?

#7 Alberta Ed on 11.20.14 at 6:56 pm

This column should be stapled to the forehead of every MP, beginning with Joe Owe.

#8 80'sKid. on 11.20.14 at 7:00 pm

Why was the CMHC even created? How can the government allow private banks to make a huge profit while tax payers shoulder all the risk. I love how this country exists in this weird grey area between capitalism and fervent socialism/communism. Pick a side.

#9 espressobob on 11.20.14 at 7:02 pm

[email protected] = ‘high pressure sales tactics’. Ever quiz them? Just ask how the S&P 500 did last year? The answer is usually a blank stare.

Not that ‘fund managers’ don’t employ the same hot air? Kevin Oleary is a prime example. OGE.UN from 2008 was a ‘safe’ fund he would sell to his own grandmother! Problem was this fund underperformed over the next three years. Quarterly statements used the term ‘defensive position’ as a poor excuse! Turned out to be a ‘howling dog from hell’!

Education is the only way to go! Rant over.

#10 Kris on 11.20.14 at 7:05 pm

Talking about the [email protected] will accomplish nothing unless laws are changed.
From the looks of it, it will probably never happen.

I mean look at our big Owe, he can barely find his pre written speech in front of him…..good grief

#11 Happy Renting on 11.20.14 at 7:06 pm

Oh, Andrew. After two years of “pushing”, it’s clear your GF isn’t really interested in increasing her financial literacy or changing her philosophy. There will be a torrent of blog dogs telling you to bin her, which is extreme and reactionary (based on very little information), but I will caution that if you don’t agree on major financial matters your relationship will have substantially more conflict than if you did.

#12 A Yank in BC on 11.20.14 at 7:07 pm

But if I own the Bank preferred’s that you recommend, do I want to condemn this type of predatory behavior, or encourage it?

#13 Soused on 11.20.14 at 7:08 pm

You should have dragged them out into the street by their ties and pummeled them until Canadian consumer debt dropped below 140%.

#14 4 AM Sunrise on 11.20.14 at 7:11 pm

So this Andrew was about to barge into a (financially) burning room and risk choking on house-horniness fumes to fireman-carry his beloved away from danger. This one’s a keeper.

I knew a “mortgage specialist” back when I worked in a bank. Her own finances weren’t much to write home about – she had a huge mortgage herself and her dad (cash rich, pre-Boomer) would cover her from time to time when things got tight.

#15 Debtfree on 11.20.14 at 7:11 pm

They got this ? Oh Joe owe . Did he ever step in it this time . You must be grinning from ear to ear . $550 million for 800 jobs . Don’t worry about our economy ,they got that too. And there is no bubble in the condo market . They only make up one third of housing starts .

#16 Marco on 11.20.14 at 7:15 pm

CHMC has definitely encouraged predatory banking in this Country. Is it any wonder in Countries like Switzerland, where the downpayment is minimum 20% with no CHMC equivalent, 60% of the population rent. and since 2011 they have tightened up their mortgage rules further due to low interest rates that they see rising in the future. Bankers here are loving the insurance of a payday even if the housing market goes south. Caveat emptor.

#17 mortgagebrokeron on 11.20.14 at 7:18 pm

I know a lot of ladies and men who work at the bank, most of them are not very smart at all. The smart ones leave the bank and become independent mortgage brokers or planners. All the people at the bank really are just salespeople. They have no pull and can’t give approvals.

Most Canadians are delusional about their relationship with banks. Paying “service” fees for no service.

I kid you not. A local credit union assistant branch manager has been in the world of finance for all of 3 years. Her training? She was a used car salesperson of 8 years.

People actually value her opinion, and she has no idea or experience to give out advice. And her advice is really bad. However she is your prototypical nice lady at the bank. This is unbeleivable. And it happens all the time!!!

#18 Whinepegger on 11.20.14 at 7:20 pm

Once those millennials get house-horny there seems to be no stopping them. Am trying to deal with a daughter and SIL that have caught the fever. They even had the audacity to hint that the Bank of Mom & Dad might jump in to feed their desire. Ain’t happening. To the contrary, I’m feeding them doses of reality as to the REAL cost of ownership. Hope they can hold off until fall 2015.

Funny you should mention Cold Fusion. Been keeping up with developments since this article was published last month: http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-by-third-party-researchers-seems-to-have-1-million-times-the-energy-density-of-gasoline
Experiment was set up without Rossi’s participation. And then read that Industrial Heat has bought up the rights to Rossi’s invention. And word that Bill Gates has been to Italy to investigate and is strongly considering investing. Plus, find it very interesting that the energy from Cold Fusion will need a storage method and then, out of the blue, I read that Warren Buffet has bought Duracell. Interesting indeed. And what’s the price of oil at? I wonder what role the swelling news of Cold Fusion is playing in the price collapse? Read more here: http://www.ecatnews.net/

Now if only Industrial Heat was a publicly traded company. I’d take a flyer on that.

#19 Mark on 11.20.14 at 7:21 pm

“But if I own the Bank preferred’s that you recommend, do I want to condemn this type of predatory behavior, or encourage it?”

Preferreds are basically a senior form of common equity and would be, in a hypothetical bank failure, worthless.

Best environment for preferreds is that of deflation, and a strengthening CAD$, which is likely in the cards as the housing bubble falls apart. They won’t have the upside like the common will have, but they will be more stable during the political turbulence that will inevitably surround CMHC bailouts.

They pay a 5% dividend with a fat tax credit. Yum. — Garth

#20 JSS on 11.20.14 at 7:26 pm

If you want to profit off the mess of Canadians – buy common shares of Canadian banks, and sit on them for a decade or two.

The ‘other’ side of the table.

One day, you owe the bank money in the form of mortgage payments.

The next day, the bank owes YOU money in the form of preferred or common shares.

What side you want to be on?

#21 Dirty Debtor on 11.20.14 at 7:28 pm

Andrew, I’ve spent the last 4 weeks trying (unsuccessfully) to tell one of my babes (26 yr/o) she should forget about becoming an Amway salesperson and focus on her existing career instead. No matter how many times I try to explain to her the nature of the pyramid scheme, she refuses to believe it.

Consider yourself lucky, brother.

Thankfully, I apply the same strategy to love as I do to finance. Diversified portfolio, my friend ;)

You should seriously consider the same

-Dirty Debtor

#22 Mark on 11.20.14 at 7:31 pm

“Why was the CMHC even created? “

Primarily to “help” soldiers returning from WW2 to get into housing without the big down-payments expected from the banks that were mostly geared toward capitalizing businesses (thankfully!).

A laudable and worthwhile goal at first, but the CMHC has been abused by politicians ever since as a tool of social engineering and economic policy. The most recent example being the Liberals and later the Tories, allowing it to run amuck in an effort to bring Canada out of the depression created due to the collapse of the technology sector.

#23 Craig on 11.20.14 at 7:33 pm

The way the banks are these days are strictly about making their shareholders money, if they supply you with a mortgage you can barely afford to pay then they have done their job… They have you locked paying interest for the next 20-25 years assuming you never re finance or take out lines of credit etc, the old generation of paying off as much as you can as quickly as you can is long long out the window. Welcome to over leveraged and heavily debted millennials that will struggle for years to come.

#24 TEMPORARY® Foreign Prime Minister on 11.20.14 at 7:36 pm

“…..And yet, CMHC is. Incredible. This week the agency published its annual report, saying it’s now worried houses in Canada cost more than in the States……..”
=========================

Crocodile tears from a crocodile agency. Canadian Banks & the CMHC. Not really sure who is the host who is the parasite.

(Excellent post today. Should be mandatory reading every time a teen first acquires a driver’s license, followed by a fun-read bumper sticker on every newly purchased car on the stop-and-go 401. Televised edu-ads on all those Moxie’s bathroom LCD’s would go a long way to preventing a Canadian from blowing his financial brains out, as well. )

#25 Cato the Elder on 11.20.14 at 7:40 pm

Re: last post #197 Mike T

Keep taking the blue pill. I don’t think your mind can handle the reality of how the system really works:

https://www.youtube.com/watch?v=fOj_xp2jHl0

This is from New Zealand but it’s the same everywhere.

Your thinking is how it would work if banking was HONEST. But it isn’t. Banks are not required to have 100% reserves. Nor are they required to have their money based on anything in reality – they can create as much of it as they want.

Mortgages are NOT derived from people’s savings. They are created out of thin air. Member banks pay a small interest rate to the central bank in exchange for the money they print. Member banks are largely in control of how many mortgages they want to issue, so they control how much money is printed indirectly.

And saying ‘print’ is a EUPHEMISM for creating money out of thin air. It doesn’t mean they run printing presses with tons of ink. A digital entry into a computer has the exact same effect in the economy as a whole.

You think all this inflation is NORMAL? When banks do this, that money they created enters the economy and starts chasing goods. A 500 000$ creation means 500k$ is now going to chase lumber, wire, etc. all the other things associated with building a house – this is what bids prices up.

Instead of arguing me, which I imagine is mostly out of shocked disbelief, why don’t you read about the system yourself? Or watch videos on it on the internet, like the ones I put in my last post. It’s well known to many people now thanks to the internet.

This system has enslaved many nations and peoples over centuries, but it’s losing it’s control thanks to the internet.

#26 JSS on 11.20.14 at 7:49 pm

#12 A Yank in BC on 11.20.14 at 7:07 pm
But if I own the Bank preferred’s that you recommend, do I want to condemn this type of predatory behavior, or encourage it?

A bank and its shareholders should always encourage this behaviour.

#27 Tony Warren on 11.20.14 at 7:49 pm

Keep on the path you are on. If your girlfriend can’t get it you will find plenty of other women when you are 50, retired and have a lot of income and no house dragging you toward the abyss. I wish I was as smart as you when I was your age.

#28 Mark on 11.20.14 at 7:52 pm

“Nor are they required to have their money based on anything in reality – they can create as much of it as they want.”

On Garth’s wishes, I won’t participate in the further pollution of his blog responding to banking conspiracy-theorist nonsense. However, just ask yourself this, if banks can create money out of nothing, what actually limits their ability to do so? And why do they even bother to acquire deposits and pay interest on them? Why don’t they operate a little lemonade stand on the street and emit only loans?

You keep bringing this ‘revelation’ that (commercial/retail/chartered, non-central) banks create money out of nothing, but you can’t really explain why half their business is necessarily dedicated to the task of borrowing money from customers and from the market. It would make no sense to me why they would bother to do this, if they could merely “create” money!

I believe you, and the other theorists, are confusing the systemic effect of leverage, with the roles of individual participants in the economy, such as banks, in being leveraged investors.

#29 Cato the Elder on 11.20.14 at 7:52 pm

Re: #18 Temporary

The middle class is the host.

The central banking system sucks every bit of wealth out of a country, then moves on when there’s nothing left. They don’t care who gets hurt in the process.

It’s next meal ticket is the east. They’ve worked hard over decades and have a 20% savings rate in China.

Once they’ve destroyed the US dollar they will have no problem completely focusing their attention in China and ravaging that country.

That’s if we make it that far. Good chance that they want a ‘smokescreen’ to cover up their actions. Fomenting a war with Russia and in Syria is a good way to do that. See, many people in the west are starting to wake up and realize what’s happened. The last thing they want is for the right people to get the blame.

1. Convince country that a privately owned issuer of national currency is a good idea
2. Rampantly issue currency and encourage debt and speculation
3. Recessions are created as a result of resource misallocation caused by excess currency issuance
4. Buy up assets at hugely deflated prices
5. Rinse and repeat 3 and 4 until…
6. All momentum is lost. Debt issuance no longer has any real effect. Foment a war to cover up your actions or to impose the system on another state.

You think Iraq, Libya, Syria, etc. has anything to do with ‘evil’ militants? Those nations were/are trying to sell their oil in currencies other than the USD. That’s why.

Predictions? Saudi Arabia is in the cross-airs. Yes, believe it or not. Saudi Arabia was where most of the 9/11 hijackers came from – a conveniently ignored fact. Now, there’s all kinds of movements to get redacted/classified information released to the public from the 9/11 report that made these connections. It’s not a coincidence. It’s a warning to Saudi Arabia: don’t go off the USD or we will release the info. The American people, while tired of war, will certainly be livid and willing once they find out Saudi Arabia’s culpability.

#30 gladiator on 11.20.14 at 7:54 pm

guy, she is not good wife material if she can be convinced so easily by some strangers to behave contrary to your principles that make a lot of sense (and I imagine you explained this to her).
In this case, she basically threw away everything you told her before. Does she respect you and does she value your intelligence? Think about it very hard before you register your relationship. Life will provide many more situations in which someone will go out of their way to get your hard-earned money away from both of you and if she is so easily manipulable, you might have a hard time keeping the dough in the family.

#31 Adam Smith on 11.20.14 at 7:59 pm

Can somebody please explain to me why we have CMHC? As far as I can tell, it just takes away any reason to borrow or lend wisely. Do most countries have an equivalent?

#32 LS in Arbutus on 11.20.14 at 8:06 pm

I think what is very scary is that most peddling financial products has a very rudimentary understanding, or extremely little understanding of them.

I have twice had cold calls from RBC asking me if I want to discuss my retirement plan/finances with them. Seriously? With someone from a call center? OMFG, unbelievable.

#33 Londoner on 11.20.14 at 8:11 pm

Blaming banks for selling mortgages and GICs is like blaming Porsche for selling Panamera’s. If there’s demand for a product then companies will continue to sell it.

Of course CMHC is not going to go out and say houses are overvalued in one quick news release. The housing market is very sensitive to consumer sentiment. The Feds don’t want house prices to collapse. They want prices to moderate until incomes catch up. Managing existing debt levels or even increasing debt levels is sustainable as long as economic productivity and wage inflation can keep up. That’s why the BoC is willing to look past it’s 2% inflation target. It’s the fine balancing act that every nation wants to achieve.

#34 David McDonald on 11.20.14 at 8:12 pm

The American housing bubble was caused in part by CDO’s, collateralized debt obligations. This instrument was designed to distribute risk and thus enable borrowing and was a marvelous idea. In theory that is because CDO’s removed the link between lenders and borrowers and this created a moral hasard for mortgage sellers.

Garth is right; the CMHC is on a parallel course. It was a great idea at first but lax practices have created a huge moral hasard for the banks. They can’t help themselves but take advantage of a head’s I win and tail’s you lose situation even if it will lead to a public disaster.

#35 Porsche on 11.20.14 at 8:19 pm

At RBC they talked me into opening up TFSA because it would save me the $7 a month fee on my Chequing account.

So I did and put $10 in it.

#36 Londoner on 11.20.14 at 8:21 pm

#32 LS in Arbutus

I have twice had cold calls from RBC asking me if I want to discuss my retirement plan/finances with them. Seriously? With someone from a call center? OMFG, unbelievable.
_________________________________________

FWIW – as a summer job, while I was at university, I used to work for a major Canadian bank cold calling clients from a call centre. I used to sell GICs, mortgages, lines of credit and do warm transfers to private banking for people with more then $250k to invest. There was no shortage of people willing to talk to me.

#37 Porsche on 11.20.14 at 8:24 pm

#35 Porsche

I forgot to mention I made .01 cent in the last year on that $10 dollars

Tax Free Interest man !!!

#38 Blacksheep on 11.20.14 at 8:28 pm

Ref: #199 Blacksheep on 11.20.14 at 5:41 pm

“What an interesting, useless, debate you are engaged in. You worry about the creation of capital. You should worry about having more of it. — Garth”
—————————————
Garth, do you think I’m worried:

That commercial banks, create money from nothing?
That Mark is mistaken and I must correct him?

As a strong proponent of MMT, I realize 75 % of what’s discussed here in regards to sovereign debt, currency valuations, import and export consequences, employment possibilities, the purpose of taxation, or even what causes interest rates to move, is simply bullshit.

Things are not as they seem and in many cases UP is truly DOWN, when compared to the public narrative. Did you pickup on the context of my last few comments?

I distract myself by foisting the truth on some troll with an agenda, and watching them squirm, while my business hums along, making me money.

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

These days, I worry about very little.

#39 Mark on 11.20.14 at 8:33 pm

“Can somebody please explain to me why we have CMHC? As far as I can tell, it just takes away any reason to borrow or lend wisely. Do most countries have an equivalent?”

Fannie Mae/Freddie Mac/the FHA perform a similar role in the United States. However, their exposure to subprime mortgages isn’t anywhere near what it is in Canada. Fannie/Freddie were, at their largest, $5T entities combined. They did not insure anything less than 20% down, or over ~$450k (above such $$ amount was considered a “Jumbo” loan not eligible for Fannie/Freddie). In comparison, the CMHC is a $900B entity (insurance + reinsurance) and a significant chunk of its portfolio is overtly subprime (ie: <20% downpayment). If you figure a typical 1:10 ratio between the USA and Canada, you can easily see just how much larger CMHC is in comparison.

Of course, we know that the US mortgage finance system ultimately left the country's mortgage borrowers in ruins when it collapsed. No reason to believe the outcome will be any different in Canada.

#40 tkid on 11.20.14 at 8:37 pm

Andrew,

bin her. She regards all of your advice and viewpoints as directly equivalent to garbage. That’s the only reason why she could be so easily swayed by strangers.

It’s one thing to find out how much mortgage one qualifies for because one is curious, it’s another thing to have to be dragged out of an office by one’s significant other and then to give him/her hell on the drive home.

Set the gf free to find the schmuck she so profoundly desires (translation – someone she can mold to her own will). And I’m a chick giving you this advice.

#41 Mark on 11.20.14 at 8:37 pm

“That’s why the BoC is willing to look past it’s 2% inflation target. It’s the fine balancing act that every nation wants to achieve.”

Only problem is, if they actually do it, it will cause a dislocation in the bond market, and the borrowers will pay doubly for borrowing because of increased inflation expectations.

If the BoC loses credibility on holding the 2% target and moves to 3%, what is to stop them, in the minds of investors in GoC bonds and CAD$ obligations, from moving to 4%?

A very, very slippery slope indeed. I’m getting the feeling that Poloz really, really doesn’t know what he’s doing lately. His predecessors did — that’s why they got out of Dodge (no pun intended) before it blows up.

#42 Arfmooocat on 11.20.14 at 8:39 pm

I learned my lesson today playing U.S. stocks for dividends

I had 4,500 shares of NKA that had a .35 cent dividend

This is what my account says….

21 Nov 2014 NKA – NISKA GAS STORAGE PARTNERS LLC DIST ON 4500 SHS REC 11/12/14 PAY 11/20/14 NON-RES TAX WITHHELD
DIVIDEND Not applicable Not applicable 951.30 USD 21 Nov 2014

So the U.S. withheld $951.30 non-resident tax on that dividend.

#43 Daisy Mae on 11.20.14 at 8:41 pm

#1 Blobby: “It was a story VERY similar to this which kickstarted my divorce.”

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

MONEY — the management of, or the lack of, will cause untold divorces in the future.

#44 JacqueShellacque on 11.20.14 at 8:42 pm

I always take care to ensure that when I actually *do* need to deal with [email protected], they think I’m a total richard by the end.

#45 Practical_Logical on 11.20.14 at 8:46 pm

From Van perspective:

It’s time to ignite the flames of a class war of Gen X and Millennials to put the baby boomers out of business for good!

For example you have 2 white boomer mayors in power for almost 2 decades in Richmond and Burnaby all comfy and warm in developer’s pockets. The Richmond Mayor, was actually against banning Chinese Language only signs ignoring a 1000 sig. petition for 2 years. His challenger, a Chinese Canadian was firmly against the Chinese Language Only signs and still lost. Go figure!

#46 espressobob on 11.20.14 at 8:46 pm

#37 Porsche

Love the sarcasm! RBC Direct dude.

http://www.rbcdirectinvesting.com/services/onlineinvesting/account-open-or.html?WT.srch=1&AFFCODE=4922&CAMP=9918&utm_campaign=Open+Account+-+EN&utm_source=bing&utm_medium=cpc&utm_content=phrase&utm_term=rbc+direct+investing&V_TID=62557&ProspectID=260FF8776C044DF49936142AD161D5CD

#47 Daisy Mae on 11.20.14 at 8:47 pm

#10 Kris: “I mean look at our big Owe, he can barely find his pre written speech in front of him…..good grief”

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

And we have an election coming up in 2015. *sigh*

#48 Practical_Logical on 11.20.14 at 8:50 pm

This war against the boomers can start with price controls when they try to sell their moldy one million dollar shacks that they bought for 25 grand in the 70’s and 80’s.

You want to sell your house boomer? It will be taxed so most of the profit goes to taxes designated for affordable housing in Vancouver Lower Mainland.

#49 Sign of a RE apocalypse? on 11.20.14 at 8:51 pm

After months of construction and then more months of no activity, a new Four Front Mortgages / Mortgage Alliance store opened near Downtown Vancouver.

I had a peek through the window last nite, and it looks like the agents’ cubicles are barely wide enough for a keyboard & mouse. No room for coffee & donuts on the desk-top, let alone a Rules & Regulations binder. I’ve seen more desk space in boiler rooms using folding card tables.

At least there’s a Tim Hortons next door to meet clients & do the contract signings.

#50 nonplused on 11.20.14 at 8:54 pm

Responses to yesterday’s responses:

#135 HD

It doesn’t happen often.

I may have recommended looking at the Westborough church at some point but I don’t think it was recent. For me, the frightening point of the whole thing is that the WB members don’t really hold beliefs that are all that much different than the whole of the evangelical movement, they are just more passionate. Scary.

#139 Mark

Well I get the APEGA salary surveys. Granted its self reporting so they may exaggerate. I also was at one time part of the compensation team and our 10 year engineers were in the $140 range. Now when I say 10 year engineer I mean someone fully trained with good reviews and 10 years experience.

That firefighters get a good deal I will not argue with. But they have to do a lot of training too, just not until after they start work.

Garth on #170

How are all people made better when the successful are penalized for being so? — Garth

Exactly. There is a whole science (although not a very successful one) around motivation. You can’t get someone out of bed in the morning if he’d be better off in bed. Doctors and dentists make more than most people because most people either can’t or just won’t do all those years of training and then have to stick their fingers in peoples orifices all day. They need higher motivation, and those who would take it away risk having to drill their own cavities.

#51 Porsche on 11.20.14 at 8:58 pm

#46 espressobob

I have Action Direct and on it from 7:30 am till 2:00 pm everyday

As for TFSA’s or RRSP’s, I don’t need to hide any capital gains until I eat through 200K of capital losses.

#52 Daisy Mae on 11.20.14 at 9:00 pm

#17 Mortgage: “People actually value her opinion, and she has no idea or experience to give out advice. And her advice is really bad. However she is your prototypical nice lady at the bank. This is unbeleivable. And it happens all the time!!!”

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

It appears that most people are basically stupid….

#53 james on 11.20.14 at 9:02 pm

“If your girlfriend can’t get it you will find plenty of other women when you are 50, retired and have a lot of income and no house dragging you toward the abyss.”

——–

Oh yes, but those women will have 3 kids and baggage with their ex(es).

Go to Mexico, Peru (etc)… you’ll find a nice 30 year old who appreciates you not only for your financial acumen, but for maturity and education. Plus it is warm, cheaper, etc.

#54 ppsez on 11.20.14 at 9:02 pm

If you want a trading account why would you go to bank, can easily get one from home with Questrade. Bank will not loose a chance to do their business.

#55 mark on 11.20.14 at 9:05 pm

And when it all blows up they’ll be the first to scream “we coulda never seen it coming”

Or they’ll use the more derisive “no one credible saw this coming”

#56 Freedom First on 11.20.14 at 9:05 pm

Garth, and fellow Blog dawgs, I have a question and would appreciate your valued opinion(s), please?

I am currently underweight Canadian Financials, and in light of the debt being carried by mortgaged to the eyeballs of Canadians, and even though it is backstopped by the taxpayers(us), I have been undecided if this is a good time to buy the ETF-CPD on the TSX. I have a diverse Portfolio, 0 debt, liquidity, cash, and steady income streams.

Whether I am answered or not, nothing will change in my appreciation of Garth’s free Blog, and the regular Blog dawgs. Thanks.

[email protected] No surprise here. I have had girlfriends, or girl friends ask me to negotiate certain financial deals for them. I will do it for them on 1 condition. She stays outside the room until the deal is ready to sign. The reason? I don’t eat $$$$$$hit from tag teams. It’s what they all do with a woman in the room.

#57 Suede on 11.20.14 at 9:06 pm

I’m torn.

On one hand, i am a bank shareholder – Thus i’m happy when they push products to people that make them and ( then in turn to a lesser extent) me money in the form of capital gains with the expectation of future growth and dividends.

On the other hand, so many people have no idea they’re signing their life away for all these products just to be cool and “own a house”

#58 prairieboy43 on 11.20.14 at 9:08 pm

Bankers are sales people. That is there business. Andrew when you pay off your loan, they will ask if you want to upgrade to a bigger, better house.
You are in a situation that requires decision.
Your girlfriend should be scared of taking out a huge loan. There is your evidence.
Change her out.
Saving/ Investing are is a genetic trait. You have it, or you don’t.
Next!!!

#59 nonplused on 11.20.14 at 9:09 pm

#40 tkid

Spot on.

When I was getting divorced I spent a lot of time on the MarriageBuilders.com site (hope I got that right, too lazy to check). It’s a Christian site but still had a lot of good advice that was sadly too late for me or impossible to implement because the ex wasn’t interested. One of the points that stuck for me was that in a marriage type relationship neither party should do anything without the explicit, unrestrained consent of the other party. So if you are going to buy a house (or a car, or a sports bike), both spouses should think it’s a good idea or it’s a non-starter.

A lot of women are still even in this day and age conditioned to think that when they get married they “acquire” the man and his resources are now hers. Not only that but the man is obligated to achieve the lifestyle she “requires”. Seen so many divorces based on this simply no longer reasonable attitude.

Gentlemen, if you feel compelled to do something you don’t want to by your woman (actually this applies to both sexes), do them a favor and let them find someone else who will.

#60 Chickenlittle on 11.20.14 at 9:10 pm

What happened to the Cat Food Lady?

#61 Musty Basement Dweller on 11.20.14 at 9:12 pm

House horniness of my ex and the associated lack of math skills that complement the hormones of house lust in this nation ended my marriage too. Couldn’t be happier to not have to listen to the house nonsense anymore.

#62 Daisy Mae on 11.20.14 at 9:14 pm

#30 gladiator: “guy, she is not good wife material if she can be convinced so easily by some strangers to behave contrary to your principles that make a lot of sense (and I imagine you explained this to her).”

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

She’s 24 — naive and gullible. Give Andrew some credit. They both can discuss this and come to an agreement. Geez!

#63 crowdedelevatorfartz on 11.20.14 at 9:19 pm

@#60 Musty Basement Dweller
“Couldn’t be happier to not have to listen to the house nonsense anymore….”
+++++++++++++++++++++++++++++++++++
You did get a divorce ?
There isnt another reason for the “musty” smell in the basement is there?

#64 Sheane Wallace on 11.20.14 at 9:20 pm

They WILL analyse this?

So they have no clue what is happening while they are the cause of the problem?

Oh my, oh my.
This is going to be spectacular,

Financial Minister has no clue, BOC has no clue, CHMC has no clue, why in hell are they receiving government salaries and benefits?

Are we managed by idiots?

#65 crowdedelevatorfartz on 11.20.14 at 9:21 pm

@#60 Chickenlittle
“What happened to the Cat Food Lady?”
++++++++++++++++++++++++++++++++++++
Never mind about her, we’ll take care of it….you just worry about the sky falling!

#66 crowdedelevatorfartz on 11.20.14 at 9:26 pm

@#64 Sheane W.
“Are we managed by idiots?”
+++++++++++++++++++++++++++++++++++
I live in the Lower Mainland of BC and ….yes……yes we are.
I cant speak for the rest of the country so perhaps the rest of you blogdogs would care to comment on the intellectual and mental state of your politicians?

#67 Ole Doberman on 11.20.14 at 9:26 pm

Gartho – since buying and holding seems to be a dead strategy in stocks, what are your thoughts on swing trading?

Seems that’s where the real monies at.

#68 espressobob on 11.20.14 at 9:34 pm

#55 Freedom First

Why focus on ‘Canadian financials’? Sector play? Canada is roughly 4% of the world economy. Global index ETF’s provide more diversification. And potentially better returns.

Keep in mind that Canadian equity (inc. pref’s) are taxed favorably in a non-registered account!

#69 Mark on 11.20.14 at 9:40 pm

“Gartho – since buying and holding seems to be a dead strategy in stocks, what are your thoughts on swing trading?”

Dead strategy? Are you kidding?

How many traders really add value in excess of long-term buy and hold strategies? Almost none. Most end up destroying substantial value.

#70 Happy Renting on 11.20.14 at 9:46 pm

#60 Chickenlittle on 11.20.14 at 9:10 pm

She has been MIA for a few months now. Hope she and her family are okay. I miss her comments and she seemed like a really decent person.

I miss Ralph Cramdown (Effluence Greasy)’s comments, too.

#71 Victoria Real Estate Update on 11.20.14 at 9:53 pm

This chart shows that prices have fallen significantly in Victoria since 2010. This price decline has taken place in a heavily stimulated Canadian housing market complete with historically low (emergency level) interest rates.

. . . . . . .Price Increase/Decrease. . . . . . .
. . . . . . . . Since October 2007. . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+50%. . . . . . . . . . . . . . . . . . . . . . x. . .
+48%. . . . . . . . . . . . . . . . . . . . . . . . . .
+46%. . . . . . . . . . . . . . . . . . . . . . . . . .
+44%. . . . . . . . . . . . . . . . . . . . . . . . . .
+42%. . . . . . . . . . . . . . . . . . . . . . . . . .
+40%. . . . . . . . . . . . . . . . . . . . . . . . . .
+38%. . . . . . . . . . . . . . . . . . . . . . . . . .
+36%. . . . . . . . . . . . . . . . . . . . . . . . . .
+34%. . . . . . . . . . . . . . . . . . . . . . . . . .
+32%. . . . . . . . . . . . . . . . . . . . . . . . . .
+30%. . . . . . . . . . . . . . . . . . . . . . . . . .
+28%. . . . . . . . . . . . . . . . . . . . . . . . . .
+26%. . . . . . . . . x. . . . . . . . . . . . . . . .
+24%. . . . . . . . . . . . . . . . . . . . . . . . . .
+22%. . . . . . . . . . . . . . . . . . . . . . . . . .
+20%. . . . . . . . . . . . . . . . . . . . . . . . . .
+18%. . . . . . . . . . . . . . . . . . . . . . . . . .
+16%. . . . . . . . . . . . . . . . . . . . . . . . . .
+14%. . . . . . . . . *. . . . . . . . . . . . . . . .
+12%. . . . . . . . . . . . . . . . . . . . . . . . . .
+10%. . . . . . . . . . . . . . . . . . . . . . . . . .
+8%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+6%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+4%. . . . . . . . . . . . . . . . . . . . . . . . . . .
+2%. . . . . . . . . . . . . . . . . . . . . . . . . . .
..0%. . . .x *. . . . . . . . . . . . . . . . . .*. . .
———————————————————————–
. . . . .October . . .June. . . . . . . . October
. . . . . .2007. . . . 2010 . . . . . . . . .2014. .

x = Winnipeg
* = Victoria

(source: Brookfield’s index)

From October 2007 to October 2014, house prices in Winnipeg increased more than 49% while prices in Victoria fell 1%. (link)

Victoria’s data also indicates that:
* Prices in Victoria were lower in October than in any other month since August 2007 (even lower than 2009’s lowest point).
* We would have to go back to 2006 to see October prices this low in Victoria.
* Prices in Victoria were lower by 4% year-over-year, lower by almost 1% month-over-month and lower by approximately 3% year-to-date (since the end of 2013).

If emergency level interest rates can’t stop Victoria’s price decline, what will?

Victoria’s weakening economy has had a lot to do with Victoria’s falling housing market since 2010. Victoria’s economy has weakened enough since 2010 that it hasn’t been able to support house prices despite historically low mortgage rates. Everything points to a continuation of Victoria’s price downtrend that has frustrated and angered sellers since 2010.

As prices continue to fall, more and more near-peak buyers will be stuck with underwater mortgages. There are many (once happy) first-time buyers in Victoria who are probably not so happy now, knowing that they owe more than their properties are worth. Many are probably angry that they followed the “buy now” advice of those who earn a living from the sale of houses. Some may be in denial that the value of their properties have declined significantly. Some may even think that prices will suddenly turn around and head higher soon, but that won’t happen.

It’s normal for those with underwater mortgages to experience unpleasant emotions (see chart). As prices continue to fall in Victoria, more and more potential buyers will develop a negative attitude toward taking on massive debt to own a mortgage in a falling market when they could easily rent for less and wait for cheaper prices. This will add significant downward pressure on prices.

On the other hand, those Victorians who have put their buying plans on hold since 2010 are probably happy they did and many probably realize that lower prices are on the way. Some of them may have followed Garth’s blog since 2010.

Victoria’s housing bubble is following the same general blueprint of deflation that hundreds of housing bubbles worldwide followed in the past. In a general way, there really isn’t anything new happening here as Victoria’s bubble deflates, although it can probably be said that no two housing bubbles deflate in exactly the same way.

In general, the bubbliest markets in the US weakened and peaked first in 2005-06. Examples include: Los Angeles, San Diego, Las Vegas, Phoenix, Tampa and Miami. At first, prices in these cities declined slowly. The rate of price decline in these cities increased dramatically by mid to late 2007 when markets across the entire nation joined the price correction extravaganza. Victoria is one of Canada’s bubbliest markets and it weakened and peaked first. Victoria’s rate of price decline will likely speed up when housing markets across the entire country join Victoria in correction mode. In October, prices were also lower year-over-year in Saskatoon, Regina and Halifax (link).

Comparing prices in Victoria to prices in several US cities makes it clear that Victoria’s housing market is in a bubble (Canada and the US have similar household income levels). Examples:

Texas:

$160 K, Fort Worth, TX (6 beds, 3.5 baths, 3,305 sq. ft., built in 2005, attached double garage)
$170 K, San Antonio, TX (5 beds, 2.5 baths, 3,218 sq. ft., built in 2006, attached double garage)
$170 K, Cypress, TX (Houston) (5 beds, 3 baths, 3,206 sq. ft., built in 2005, attached double garage)

Florida:

$179 K, Jacksonville, FL (5 beds, 3 baths, 3,079 sq. ft., built in 2008, attached double garage)
$179 K, Jacksonville, FL (5 beds, 3 baths, 3,717 sq. ft., built in 2006, attached double garage)
$200 K, Tavares, FL (5 beds, 3.5 baths, 3,186 sq. ft., built in 2014, attached double garage)
$185 K, Winter Haven, FL (5 beds, 3 baths, 3,050 sq. ft., built in 2014, attached double garage)

Arizona:

$165 K, Maricopa, AZ (Phoenix) (5 beds, 3 baths, 3,277 sq. ft., built in 2008, attached 3 car garage)
$191 K, Phoenix, AZ (5 beds, 3 baths, 3,182 sq. ft., built in 2006, attached double garage)

Girls and guys, buying a house near the peak of a major housing bubble is always a bad idea. Most of you who are reading this probably know others in Victoria who bought from 2008-13 (or even this year) and are now stuck with underwater mortgages. Don’t let this happen to you. Stay out of Victoria’s housing market until houses are cheaper and keep reading Garth’s blog.

Until next time – Cheers!

#72 BG on 11.20.14 at 9:58 pm

Freedom First says it best: “I put freedom first”.

Fortunately for her, my girlfriend got used to the idea that I’m not buying real estate in this market.

#73 espressobob on 11.20.14 at 10:04 pm

#51 Porsche

Take it from someone who’s done the dumbest and most stupefied trades imaginable, Get over it!

Learn from those ‘Uhm’ errors.

#74 B Braddock on 11.20.14 at 10:06 pm

The dude needs to dump the girlfriend and see if [email protected] is available……if she’s a cougar, even better. Andrew may even get free extra-curricular worldly schooling as an add-on to the endless financial knowledge/advice……remember, ya gotta game the system, or the system is gonna game you.

#75 Mike T. on 11.20.14 at 10:08 pm

‘Mortgages are NOT derived from people’s savings’

No they are not. I never said they were. The bank HAS TO SELL the mortgage. That’s where the money comes from. From other people; you, me, other countries, wherever. We buy it because it pays us to buy it.

The mortgage gets sold in the bond market. If the bank did not pay its bonds, no one would buy them would they?

That is a far cry from creating money ‘out of thin air’. Which you claim happens. It does not. There is an obligation created by the bank.

I think you need to separate the monetary system from the banking system.

#76 Ray Skunk on 11.20.14 at 10:15 pm

One of the few (the only?) advantages of Mrs Skunk not being particularly wealthy is that she alone can’t get into a mortgage. To do so would require me. And that won’t happen. And she knows it.
We therefore live a modest but happy, peaceful and argumentless existence.

One of the posts above (#14) resonated with me regarding [email protected] pontificating investment advice while being utterly crap at managing their own money.

Mrs Skunk’s pal is a feisty 35-year-old. She lives with her parents. Her pastimes include copulating with various males of questionable reputation, smoking copious amounts of green substances and being nearly $60,000 in debt.
Yep, that’s right – she’s been in the workforce for fifteen years and all she has to show for it is a seen-better-days Ford Focus and some clothes.

What does she do for work?

She sells Mutual Funds for one of the big four. I shit you not.

100% gospel truth, on my mother’s life.

#77 omg the original on 11.20.14 at 10:18 pm

This week the agency (CMHC) published its annual report, saying it’s now worried houses in Canada cost more than in the States.
———————-

Of course Canada has a premium on housing prices, we are sooooo different.

1/3 of our workforce works for the volatile resource sector
1/3 works for government and government agencies,
1/3 works for branch operation of US companies,

Entrepreneurship in Canada ends at building condos or flipping house.

And of course we are Canadian, so much smugly smarter than our Neanderthal cousins to the south.

So why shouldn’t housing in Vancouver cost twice what it does in Seattle……. or Toronto housing cost 7X what it costs in Buffalo?

Why would anyone think that’s out of whack.

#78 Nemesis on 11.20.14 at 10:22 pm

#Josephine&Clara… #TemptressesThroughoutTheAges… #ACuratedRetrospective… #EspeciallyForHD… #BewareTheBananaDance!

http://youtu.be/FgVLvug2YjU

#79 Nomad on 11.20.14 at 10:27 pm

I see price reductions for single family houses in the best areas of Quebec City. Montreal, I haven’t chcked but I hear there are price reductions too.

More interesting is that while house assets massively increased in price over 5 years, lenders and mortgage insurers like HomeCapital, Genworth, Timbercreek are valuated at a discount and pressured by short sellers. Investors are not buying it. If real-estate was looking good, you’d think canadian bankers would be willing to invest in those companies, picking up their shares like hot buns, but, they don’t.

I invest in those as a hedged to not owning a house.

#80 omg the original on 11.20.14 at 10:27 pm

#71 Victoria Real Estate Update
From October 2007 to October 2014, house prices in Winnipeg increased more than 49% while prices in Victoria fell 1%.
———————–

The prairies have been on fire since 2006 (it has slowed in the past couple years).

Prices for new builds in S’toon are not far off what you would pay for something similar in the western communities of Victoria (Colwood, Langford).

A decade ago Victoria was on fire and easily the priciest small city in Canada. We were going to become, as the real estate agents would say, the San Diego of Canada.

Got to love salespeople they always have an angle.

Now I hear them saying we are going to be the next Kitsilano.

#81 NoName on 11.20.14 at 10:36 pm

this is one funny study and interesting read. what gen XY, middle-income consumers with liquid 500k would like banks and banking experience to be or bee…
and it is interesting what an banks executives think what genXY wants.

http://thefinancialbrand.com/33476/what-gen-x-gen-y-really-think-banks/

#82 Anne on 11.20.14 at 10:37 pm

# 4 … People should have a moral obligation not to take mortgages if their finances are crap.

Some bankers have left their careers, because they felt it was morally wrong to pressure people who couldn’t afford mortgages to take them. Proof? My son left. He gave up a career with good benefits and now works for a company where he receives NO benefits. He feels morally better, but not financially better. No medical, no sick days, no holidays, no pension. and poor pay…
frustrating…

#83 Vangrrl on 11.20.14 at 10:41 pm

http://business.financialpost.com/2012/03/23/the-social-change-of-women-in-investing/

I’d be impressed by any 24 yr old who is already investing, either female or male. I have female friends who are hopeless at finances and others who are brilliant and set on course to have a nice retirement savings (funny, those gals tend to be single and happy). It was my mum who taught me to shun debt and a female friend who introduced me to Greaterfool, online brokerage accts, etc.

#84 Sydneysider on 11.20.14 at 10:43 pm

#18 Whinepegger

Scientific reality check – Rossi is a con-man, and his followers are deluded about his ECAT reactor. The nuclear reactions between ALL hydrogen isotopes and ALL Ni isotopes were experimentally mapped out long ago for all collision energies you can think of.

Nonetheless, the ECAT bubble will continue to expand until Rossi has sold a few units and moved to Pitcairn Island.

#85 curious on 11.20.14 at 10:44 pm

Plot these figures against the rise in home prices over the same period; something doesn’t add up here:

http://www.leaderpost.com/business/Saskatchewan+percenters+income+drop/10397203/story.html

#86 Mark on 11.20.14 at 10:44 pm

“More interesting is that while house assets massively increased in price over 5 years, lenders and mortgage insurers like HomeCapital, Genworth, Timbercreek are valuated at a discount and pressured by short sellers. “

They’re selling at a discount because those firms are likely worthless. Along with the CMHC.

#87 Mark on 11.20.14 at 10:49 pm

“No they are not. I never said they were. The bank HAS TO SELL the mortgage. That’s where the money comes from. From other people; you, me, other countries, wherever. We buy it because it pays us to buy it.

The mortgage gets sold in the bond market. If the bank did not pay its bonds, no one would buy them would they?

MBS are one way of the banks selling mortgages, but by far, the vast majority of mortgages in Canada are held directly on the balance sheets of the originating institutions. As discussed earlier, these assets have to be funded by bank borrowing, in the form of deposits, borrowings, and shareholder equity.

There is no absolute requirement for a bank to sell mortgages into MBS, although certainly doing so can be a way that banks can raise funds from investors to write new mortgages. While still enjoying relatively risk-free income from servicing/collecting the payments and remitting them to the economic owners of the mortgages in a timely/orderly fashion.

Securitization, in and of itself, does not alter the fundamentals of housing finance, and that is, investment in mortgages must be made in order for mortgages to be written and ultimately funded. It is just a way of transferring risk and returns.

#88 omg the original on 11.20.14 at 10:49 pm

6 TOP REASONS NOT TO MOVE TO VICTORIA

At this time of the year all you BOOMERS freezing your asses off in other parts of Canada start thinking how nice it would be to move to Victoria.

Here is old OMG’s reality check for you.

1) Victoria’s housing market is still massively over priced. Houses still trade for 6 to 10 time earnings depending on area, pre 2000 you could still buy a decent house for 3-5X

2) The weather is awesome, absolutely awesome – in the summer. In the winter be prepared for days on end of rain and overcast, or if you are lucky just overcast. Be prepared for 8 months of that.

3) City taxes and mandatory city fees are out of control. Taxes and fees are up about 80% in the last 8 years. Fees are mandatory like taxes but split off so city politicians can pat themselves on the back by keeping taxes to a modest 3% annual increase (meanwhile fees are up 7% annually). So for a modest little 1200 sq ft bungalow in Victoria city you will be paying $5000 to $5500 annually in fees and taxes. And that is before the proposed sewage treatment plant and big blue bridge (which will add another $600 to $1000/yr)

4) We are a smugly stand-offish people out here so do not expect us to bring you over muffins when you move in. Actually you will be lucky if you even see us as we are so busy working to pay for our homes. And if you are from Alberta trade the Suburban for a Prius before you get here and make sure the beef you BBQ (if you must) is organic free range from within 100 miles of Victoria.

5) Everything costs more here. OK food and retails goods are pretty much on par with other cities, but for any service figure on spending another 30% After all we got to pay for our $800k housing and $6k tax bills.

6) And be prepared for lots of maintenance on your house. Remember that it rarely freezes so everything is wet all winter long. Imagine having standing water on the outside of your property for 8 months solid each year.

#89 X on 11.20.14 at 10:50 pm

Andrew’s GF: Just b/c you can, doesn’t mean you should. Buying RE when it is overpriced can be done, yes you will have more ‘equity’ in 25 years, and your net worth will be more. But the same can be said for stamps and hockey cards as everything rises due to inflation. Your house won’t pay you anything then, but it will cost lots between now and then.

Investing for your future, buying when you have minimum 20% down, all things that you should do. A balanced portfolio will exceed that of RE over 25 years, especially when you RE buy now.

Buy low, sell high, not the other way around.

#90 omg the original on 11.20.14 at 10:52 pm

“Gartho – since buying and holding seems to be a dead strategy in stocks, what are your thoughts on swing trading?”

Dead strategy? Are you kidding?

How many traders really add value in excess of long-term buy and hold strategies? Almost none. Most end up destroying substantial value.
———————————–
And paying taxes if they gains are made outside of a registered account.

Luckily for frequent traders there usually are lots of losing trades to offset any winning trades.

#91 Spectacle on 11.20.14 at 10:58 pm

Great reading for a greatfull blog-dog.

Re:
#33 Londoner on 11.20.14 at 8:11 pm
Blaming banks for selling mortgages and GICs is like blaming Porsche for selling Panamera’s. If there’s demand for a product then companies will continue to sell it.
****************
Hah! Thanks for the laugh. Reminds me of the Predicament of people who ask why , why do these developers build such crap, and sell it for millions of $ to us?

The few seconds of silence , and the only response possible : Same reason you people continue to buy it!

The Panamerica and Cayenne ( Franken-truck-SUV’s) saved Porsches bottom! To build the real car, the 911….

They build and sell crap, to line their pockets. [email protected] , mtg, insurance ebrokers , realtors ( yikes ) …feeding off you if you play into it all.

#92 Cato the Elder on 11.20.14 at 11:19 pm

Re: #75 mike

Who is the primary buyer of bonds? Central banks. As a matter of fact, in the US the entire market is being bought up by the Federal Reserve. China is no longer using it’s large trade surplus to subsidize that market. Most of that inflation is now being borne domestically in the US now instead of being taken on by their former creditors.

The monetary system and all debt are linked. Mortgages can’t be separated from that. You clearly haven’t watched the videos I posted from yesterday despite them being under 10 minutes. The explanation is very clear about how this all works. Instead you are intent on believing what you want to believe – or maybe it was what you were taught and don’t want to unlearn which can be mentally taxing. Either way it is very different from what we have today.

It can be difficult to learn the truth of this system. It is all encompassing and infects every place on the planet. Unless you barter, you can not escape this debt servitude. If you acquire assets, they will eventually be taken from you through inflation. You can only ever hope to stay slightly ahead by constantly running on the treadmill that the system is. Central banks are the greatest evil ever perpetrated on mankind.

#93 Larry Laffer on 11.20.14 at 11:30 pm

Maybe I’m a lucky guy, or the foolest of all [yeah, that’s probably more like it], but I actually have no problem with my [email protected] Perhaps it’s because she actually listens to my instructions without trying to sell me crap she knows I won’t be interested in. Actually, she encouraged me to withdraw all those unproductive savings and go with a self-directed trading account. Beside, she is totally gorgeous, a perfect match of beauty, kindness and intelligence. She’s almost as good as my wife.

The bad thing is that I likely won’t be seing her again, as my unproductive saving account is now completely empty. Oh well, too bad those self-directed trading accounts don’t include a nice lady too. You can’t have everything, can you?

#94 Jim on 11.20.14 at 11:35 pm

Andrew left his GF alone with [email protected] sharks for a phonecall? On their home turf he left his GF outnumbered?

Who called?!?!

#95 Burnaby is best on 11.20.14 at 11:38 pm

#45 practical-logical

Your an idiot what does being white have to do with beiing mayor?
Burnaby is one of the best run city’s in canada corrigan won a landslide victory receiving 7 outa 10 votes. That’s a pretty clear mandate . in developers pockets ? I think your talking about vancouver buddy … Burnaby doesn’t waste millions on bike lanes and methadone. I’m guessing your mayor choice would.

#96 CanadianOne on 11.20.14 at 11:43 pm

Just wondering if this “taxpayers’ will end up footing the bill” mantra is code for a bailout/in how ever we name is. Would most people still have their jobs for making a loss at work. I think not. They would be staring at their pink slips. In the case of lenders, it ought to be red ink. There shouldn’t even be an aura of anybody bailing out anything with taxpayer monies. Least of all banks.

#97 Smoking Man on 11.20.14 at 11:52 pm

The Temptress.

Have I got a story for you.

Out having a smoke with a fellow tax farm slave, a couple walks by, old bastards at leased 60, arm in arm with a 35ish cutie.

She says hi Smokey, damn , it’s a chic I rode the train to long branch with.

She was going thought a divorce last year.

After they walk by I tell my pall , cool she’s young hot and poor, looks like she got a sugar daddy.

Ha ha.

As the cherry on my smoke reaches the filter she pops out behind the corner.

That was my lawyer , finalizing my devorice.

Let’s go for a coffee and catch up.

Showing off to my pall I said ok..

Well after coffee she wants to go for drinks.

I said no…

It would have happened. Half my age , killer body, and I’m weak.

That is a disaster waiting to happen. I’ve seen it so many times..

Short term rentals are the way to go.

They’re paid to go away…

#98 David W on 11.20.14 at 11:55 pm

Mr. Turner,

You should do a piece just on preferred shares, I think many would benefit

#99 pearl on 11.21.14 at 12:04 am

Garth: where was this insight from you in 2010?!!!

“Think about it. Minimal down payments. Borrow from your RRSP. Or Mom. Cheap rates. No risk premium. Federal, provincial and local tax incentives for virgins. And bankers with nothing to lose. No wonder real estate’s become the opiate of the indebted masses, bloating in price. No wonder the people in the bank branch are rabid, aggressive and seductive.”

But, you have been right about stocks going up in your book 2020. But so wrong on real-estate. Me too.

It’s not over yet. — Garth

#100 Dave on 11.21.14 at 12:11 am

Great blog!

What is [email protected]?

#101 Rural Rick on 11.21.14 at 12:20 am

This would be a good tune for the Greater Fool documentary

http://www.youtube.com/watch?v=I98KeKV_F9g

#102 Obvious Truth on 11.21.14 at 12:34 am

Feel your pain andrew and have had too many of the same situations. Hard to beat rainbow and unicorn sales pitches.

Agree with freedom first. They turn to the female if they feel they aren’t getting anywhere. Sad but true.

#103 Porsche on 11.21.14 at 12:36 am

[email protected]

The Nice Lady @ The Bank

#104 Mark on 11.21.14 at 12:36 am

“But, you have been right about stocks going up in your book 2020. But so wrong on real-estate. Me too.”

Canadian RE peaked in the 2nd quarter of 2013. I think most of us under-estimated how long the bubble could go on, but the stock market is now solidly outperforming the declining housing market. The interlude between the peak, and the mass realization of the peak was approximately 2-2.5 years in the USA. The US Realtors ran the same scams as the Canadian ones are now running in terms of presenting increasingly narrow stats, and failing to account for a sales mix significantly shifted away from the subprime segment of the marketplace. Like Garth or not, what he’s been saying is pretty solid.

#105 Cato the Elder on 11.21.14 at 12:37 am

Here is what WILL happen folks:

Banks will get bailed out. Of course, a direct tax on citizens won’t be levied – that would engender too much anger.

Instead, the bailout will come in the form of massive printing. That will dilute the purchasing power of all your money, and prices will go up. We will all be poorer as a result.

The coming collapse of the US dollar system is going to make things VERY apparent that we DO NOT LIVE IN A FREE SOCIETY.

We live in a society that is run for the banks. When they want your money, they get your money. When they want war, they get war. When they want limits on civil liberties in order to protect themselves from criticism, they get it.

The next 10 years are going to be very scary. I don’t for a second have any confidence in our leaders to stand up to the lobbying effort of these institutions to plunder the middle class. I also have no confidence in the middle class to actually figure out what’s happening – they will probably demand more government power.

We are already seeing that with the IMMEDIATE proposal for more spying power on Canadians after the attack in Ottawa (it wasn’t a terrorist attack – it was lunatics committing murder. Terrorism is against civilians in order to achieve political gains). We saw it during the G20 meeting in Toronto where they were arresting people WITHOUT CAUSE as ORDERED by the Ontario government for simply being near the worldwide oligarchs. We saw it with the bailouts during the 2008 crisis. We’ve been in the middle east for no reason with our army fomenting hatred towards us – something we never had. We see it coming with CMHC approved taxpayer theft for the banks.

I hope as many of you as possible have your assets hidden away as far as you can from the confiscatory powers of a desperately underfunded government. The precedent has been set with Harper sneaking legislation in whenever he can (taxpayer ‘bail-in’ to banks, which is essentially direct theft from your savings account, and a law that allows Chinese companies to sue in SECRET your provincial governments if they interfere with them! You can’t make this stuff up!).

http://www.theglobeandmail.com/report-on-business/ottawa-clears-up-confusion-over-bank-bail-in/article10697667/

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

We’re being run by people who don’t give a damn about our well being. They only care about their juicy benefits package at the end of their stay in government (which comes as a well paid role as a ‘consultant’). As much as I’m against violence, in the past, when people rose up in rebellion, at least it ‘culled’ the system of these people. Now, once they’ve done their bidding and destroyed huge swathes of the middle class, they just get to saunter off and make large sums of money with no punishment!

#106 Mark on 11.21.14 at 12:42 am

“Just wondering if this “taxpayers’ will end up footing the bill” mantra is code for a bailout/in how ever we name is. Would most people still have their jobs for making a loss at work. I think not. They would be staring at their pink slips. In the case of lenders, it ought to be red ink. There shouldn’t even be an aura of anybody bailing out anything with taxpayer monies. Least of all banks.”

The government made the decision to offer the CMHC subprime mortgage insurance. Banks and their customers purchased the subprime mortgage insurance. Its the government’s fault that they were stupid enough to let the CMHC run amuck. The government will now suffer the consequences of such, which will result in a significant wealth transfer from the public, to the owners of Canadian bank stocks. Anyone with some savings can purchase Canadian bank stocks. There’s nothing particularly exclusive about owning them. Banks tend to be smarter allocators of capital than government, so maybe we’ll actually have a higher quality economy if the private sector is allocating the funds instead of pensioned public servants with little long-term interest in moving the Canadian economy forward.

Personally I believe there’s gonna be a lot of political turbulence though, and incumbent governments tend to fall because of this sort of stuff.

#107 Count Flipalot on 11.21.14 at 12:49 am

Garth, I would like to quote your writing on October 23rd, 2014 titled “It Works”. The below statement was the most profound description I’ve recently read of the political agenda in regards to the real estate bubble in Canada.

“It’s been deliberate. Pushing real estate’s been a key policy initiative of governments which are financially strapped, strangled by election cycles and bereft of other ideas. By pushing citizens into borrowing and spending massively, politicians don’t need to pare spending, enact stimulus programs or reform taxation, especially when the economy turns south. They just get the fool voters to do it. Simple. It works.”

#108 Suburbanguy on 11.21.14 at 1:16 am

You missed advising (warning) your readers that bank employees are commissioned. …and if they don’t sell a certain number of “products”, they’re gone. My sis need $5,000 to buy a car till her husbands bonus cheque came in. Visited her maid of honour, a bank manager. Signed her up for $500,000 unsecured line of credit–because it would give her a bigger bonus!! (Yes, sis’s husband makes good money.)
Bottom line– bank employees as bad as real estate agents and life insurance salesmen.

#109 Lillooet, BC on 11.21.14 at 1:22 am

I couldn’t agree with you more, Garth. Good post, as usual.

That’s why the banks stocks keep going higher and higher …

#110 nonplused on 11.21.14 at 1:39 am

#101

Nice flashback.

I’m only confused how we made it this far beyond the inception of the nuclear age. I somewhat believe Fukashima might have started the global melt down that explains why there are no aliens in space. If this thing is out of the bottle then soon much of Japan will be abandoned along with all the other reactors nearby.

But why didn’t any bombs go of after WWII (except test)? Well I think the various governments that have them realise that even if you could fire your own without any coming back that’s the end. And it’s not the bombs, it’s the reactors. Let’s say the US managed to launch a full scale surprise attack on Russia and stop all retaliation with the missile shield. Well, there are reactors in Russia too, a lot of them, and they are all going to go Fukashima once the workers are dead and they are no longer connected to the grid. The fallout will kill everybody in the northern hemisphere.

Nuclear war is a scare tactic. Everyone whose thought about it knows it’s the end. Even JC can’t fix that shit. And there is no saving yourself with a bomb shelter. You’d have to be able to survive in there for 100,000 years to have a chance.

#111 chapter 9 on 11.21.14 at 1:54 am

#92 Cato the Elder
The fed’s bond purchases have left the big banks with $2.6 trillion in excess cash on deposit with them.The banks will use this cash to buy bonds instead of the fed. When they burn through this money they will find another reason to start QE again. One hand washes the other.

#112 Practical_Logical on 11.21.14 at 2:30 am

@#95 Burnaby sucks.

This anglo baby boomer’s (Corrigan’s) $300 000 campaign comes exclusively courtesy of developers and specific unions.
For comparisons, another party’s candidates had a $15 000 budget.
17 years in power and quietly in the developers pockets.

I have yet to see premiers and prime ministers with almost two decades of rule like these municipalities who control the lucrative property tax windfalls with all this condo growth. This includes Mayor Brodie of Richmond.
The problem is voter turnout is less and less each election.
Their number one task to please the developers to line their pockets.
Everything else they do is smoke and mirrors to obfuscate and fulfill this task.

#113 Bailing in BC on 11.21.14 at 3:44 am

Dave

[email protected] = The nice lady at the bank.

Time for the list of definitions and FAQ?

Who was the keeper of those?

#114 SWL1976 on 11.21.14 at 3:47 am

All this bank talk is making me dizzy, and that is exactly what the banks want, dizzy people. Our modern monetary system is like a simple schematic for a basic toilet, but by design they have made most people believe that this simple schematic is that of a complex time machine.

All the money lent out cannot be paid back. Ever. Never ever ever. Never ever ever ever. And for those who think it can? Well I’ll have what your having cause that’s a cute little fantasy

When is the crash or collapse? Who knows? It’s impossible to know when it will happen or how it will unfold, but it will. Hey maybe it won’t and I am being a drama queen, but too many things just don’t smell right these days, one would be a fool to ignore the signs

Conspiracy theories are very valid in today’s society. For those who think with all the coruption in the world that two or more persons, a group, or an organization are not out to pull the wool over you eyes and keep you indebted and enslaved… Well that is also a cute little fantasy

#76 Ray Skunk – That was Awesome

#115 waiting on the westcoast on 11.21.14 at 3:48 am

#100 Dave

[email protected] – the nice lady at the bank…

#35/37 Porsche – working name? ;-)

Let me see… $7 per month for 12 months yields $84 plus $0.01 for a total tax free return of $84.01. Wow am annual return of 740%… If only there were more deals like that our there! ;-)

#116 I'mInTotalDisbelief on 11.21.14 at 4:42 am

If half of you people half believe the crap you type here then your are at least twice as nuts as I think you are. I already thought most of you were either nuts or full of shit but some of these posts, wow.

#117 juno on 11.21.14 at 6:22 am

Why are you guys surprised at what the banks says.
They are in the business of loaning money.

Knowing they are not on the hook for a default gives them extra insentive to sell and lowering standard helps them sell more.

The banks has no risk, therefore there should be no requirements.

#118 Stupesing in Cabbagetown on 11.21.14 at 7:49 am

Isn’t it a terrible shame that CMHC changed from an organization that helped provide housing assistance to people in need to a tax-payer-backed default insurance to protect the banks?

#119 maxx on 11.21.14 at 7:55 am

“Should anyone be surprised what the money-lenders and governments wanted has come to pass?”

Shame on them all for milking insane desperation and distorting prices that damage the economy – irreparably. Young people want to start a decent life, and the carrot is unaffordable without gargantuan amounts of debt.

#120 I'm stupid on 11.21.14 at 8:15 am

It’s funny when you look at the way parents treat their adult children. What we have is a generation of bubble kids. Their parents shelter them from the world. What a shame, to be afraid of your own shadow.

Cash poor, house rich parents are providing a saftey net if the kids have trouble making the monthlies. Since the banks hand out HELOCS like money grows on trees, these parents have no problem bankrolling the kids. Combine access to capital with the shame the parents feel if the kids fail and you have a recipe for disaster.

It makes you wonder what kind of world it will be when these kids, with zero life experiences start running the show.

#121 Market Man on 11.21.14 at 9:06 am

its hard to predict the market

Facebook opened @ $35 it went down to $20 and now its 73$ (about to years)

Apple peaked at $700 went down to around 550 and now close to $800

my point… don’t expect oil to stay down

the 5 year yield hit 1.7% then a mild correction back to 1.5% and now EU, JPN, and China are worried about a slowing economy

we are two years away from even thinking about rates rising

US rates will start to increase in 2015. — Garth

#122 crowdedelevatorfartz on 11.21.14 at 9:28 am

@#95 Burnaby is Best
“corrigan won a landslide victory receiving 7 outa 10 votes…..”
+++++++++++++++++++++++++++++++++++
Personally I voted for Sylvia Gung. Her platform was for making election campaigning illegal. But what really sold me on her was her insistance on outlawing public kissing and hand holding. Now THAT is a lady on a mission!

Derek Corrigan is a good Mayor when you can get him off the golf course…

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fwww.vancouversun.com%2Fnews%2FBurnaby%2Btaxpayers%2Bbill%2Bgolfers%2F10270081%2Fstory.html&ei=tj1vVITlDcTroASk1IKQBQ&usg=AFQjCNFgPVfgNVbiJJ2xmejr1-GOGvsdfQ&bvm=bv.80185997,d.cGU

He’s been in power too long.

#123 Please stop Mark on 11.21.14 at 9:29 am

Mister Garth,

I must have missed the announcement that Mark is your co-blogger. Did he get the position because he can bold his countless posts?

Thanks for all your good work!

#124 crowdedelevatorfartz on 11.21.14 at 9:34 am

@#105 Cato the Paranoid
“The coming collapse of the US dollar system is going to make things VERY apparent that we DO NOT LIVE IN A FREE SOCIETY….
++++++++++++++++++++++++++++++++++++
Sooooo, after the “collapse” what are YOU going to do without, a job, money, Safeway, electricity, internet, toilet paper,……..Or do you have that all stockpiled in your personal “Valhalla”?

Are you gonna be the hermit living under a log in the forest that comes out to beg for food and warn us that “the end is nigh!” ?

#125 Mark on 11.21.14 at 9:37 am

Median household income in Chicago: 43,628
Median household income in Toronto: 71,210

That’s about 1.6 times greater; housing is 3.2 times. So that would explain about half of the difference right there.

I fully agree that the market is f-ed, but you tend to throw misleading statistics around about as well as TREB.

In C$, Chicago median is $52,357. US personal taxes are 30% lower, which makes it the equivalent of $68,100, plus Chicago homeowners can deduct their mortgage interest and property taxes from taxable income. So, I’d call that roughly equal family cash flow in both cities. Oh yeah, and there’s no 13% HST in Chicago. — Garth

#126 Funny that on 11.21.14 at 10:12 am

I like when Mark starts his posts with the BOLD font.
It makes it so much easier to identify his posts and skip over them.
Cato, can you please start doing the same so I can identify your posts and skip them too.
Thanks

#127 gladiator on 11.21.14 at 10:25 am

@120 I’m stupid:

you bet! I personally know a mother of 3 children who graduated from university and still are failing to launch. All 3 kids live in the 2-bedroom apartment with their parents!
The younger one is a total basket case – his mom thinks about opening an email address in his name and start sending resumes out, so that he can go to interviews.
She and her hubby are so sick and tired of the kids, it’s not even funny. The good part is, the kids have more or less ok jobs. The bad part is, they spend it all on themselves – no contribution to the food budget, utilities, etc. I suggested she kicks them out – let them rent a 3 bdrm apartment somewhere, pay rent, buy their own food, cook, do their laundry, pay their utilities so that they start learning what adult life is all about. She is afraid they will get under the street’s bad influence and start doing drugs, alcohol etc.
There is only so much I can suggest. She and the hubby are the ones who should ultimately decide what to do.

#128 Cato the Elder on 11.21.14 at 10:26 am

Re: #120 I’m stupid

I agree with you that parents are way too over protective. You have to give your kid room to make mistakes. I was always astounded at my friends and how many privileges they got like their own cars or their school tuition’s paid for.

On the other hand, it is the past 2 generations that have caused all this mess. A huge swathe of entitlements crushing the private sector. Massive money printing inflation to ‘stimulate’ things like housing. What did the millennial generation do to cause this? Nothing. Yet we are the ones suffering under it. In a sense, the previous generation should try to help, because they caused the problem.

It’s tough, because I am in support of self-reliance. But if someone else is responsible for your present crappy situation, you’re being impeded from being independent. That’s the trouble with socialism I guess. The moment you open the door, you can’t ever close it because someone is always involuntarily affecting someone else’s life in some way.

#129 Derek R on 11.21.14 at 10:32 am

#113 Bailing in BC on 11.21.14 at 3:44 am wrote:
Time for the list of definitions and FAQ?

Well, I thought it was a bit soon but okay…

The GarthFAQ for all those need to know what HAM is or whether you should fear [email protected]

#130 Tim on 11.21.14 at 10:40 am

Garth, what’s the policy reason that mortgages here have to be renegotiated every 5 years, while Americans can lock in permanently?
Is it a holdover from when rates were high and they wanted people to have the chance to take advantage of potential lower rates 5 years later?

Canada Interest Act – over 100 years old, written then to protect borrowers from long period of indenture. — Garth

#131 Daisy Mae on 11.21.14 at 10:53 am

News Alert
Canada’s annual inflation rate rises to 2.4% in October

This breaking story will appear soon at http://www.cbcnews.ca

#132 TnT on 11.21.14 at 10:55 am

#38 Blacksheep

Thanks for that link and contributions…

#133 Daisy Mae on 11.21.14 at 11:15 am

#76 Ray Skunk: “…To do so would require me. And that won’t happen. And she knows it. We therefore live a modest but happy, peaceful and argumentless existence.”

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

So…she knows her place? LOL

#134 Cato the Elder on 11.21.14 at 11:22 am

Re: #124 crowdedelevator

I’m not sure what I will do. No, I don’t hoard things. But there is absolutely nothing wrong with people that do. I find it funny, because crises, man made or by nature, have happened for millenia. I think it is you who should be laughed at if you think preparing in advance is something to be mocked.

See, I’m not in the bubble anymore. I know what’s going on. I don’t believe anything the government says. I look at WHAT THEY DO. And what they are doing is NOT beneficial for Canadians. They are catering to the whims of a few powerful groups of people that have the money to lobby continuously. Average Canadians can’t do that.

Look at the way peaceful protesters were treated at the G20 in Toronto. That’s all you need to know about what’s in store for our future. A police state.

It will continue to be a reality as long as people like you deny it’s existing emergence. I see it coming. But you are willfully ignoring the signs.

You think North America can be conquered from abroad? Never. It’s going to happen from the inside out. The US is already a police state. They already have all the laws on the books that justify killing their own citizens, indefinite detention (jail without trial), spying on phone calls/emails without warrants, torture, rendition (sending them to another jurisdiction without as many laws), civil asset forfeiture (cops taking CASH and assets off people without charge), etc. None of this is an exaggeration, these are actual laws, WITH precedent, that have already been or are being carried out. It just hasn’t been carried out on a widespread basis yet, but eventually it may be. These sorts of things are best carried out incrementally, so as not to raise alarm, and to condition people to its normalcy.

http://www.theguardian.com/world/2014/jun/23/us-justification-drone-killing-american-citizen-awlaki

http://www.huffingtonpost.com/2013/06/13/indefinite-detention-americans_n_3437923.html

http://www.theatlantic.com/national/archive/2012/02/the-torture-memos-10-years-later/252439/

https://www.eff.org/nsa-spying/timeline

http://www.theguardian.com/world/2014/aug/28/us-rendition-obama-torture-report

http://www.usatoday.com/story/opinion/2014/11/19/police-civil-asset-forfeiture-profit-drug-trafficking-editorials-debates/19299879/

And the damn lunatics in this country want that power too. Wake up.

#135 nubbers on 11.21.14 at 11:25 am

Andrew (and Blobby @1), you have my sympathy. In my case, the initial trigger was a discussion with a real estate agent at the very peak of a previous house price bubble. I’m sure she said something like ‘buy now before you are priced out’ to my then GF.

Just don’t give in. If you do, in a couple of years you will be drowning in debt and she will leave you anyway, for someone who, unlike you, is debt free and together they will buy a house at the bottom of the market. Believe me, that hurts a lot more than just splitting up at the start. Not to mention messing up the rest of YOUR life.

#136 jimmyjames on 11.21.14 at 11:41 am

@ Mark #28 – sorry you’re wrong. It’s called fractional reserve banking. It’s not a conspiracy theory, its our financial system. The conspiracy theory part comes in when people assume how its abused. Banks chase deposits because there are limits to how much money they can create based on the reserves they hold. Wikipedia will do a much better job than I do of explaining so I’ll just recommend you go look it up

#137 rosie "moving forward" in the knowledge that, "this won't end well" on 11.21.14 at 12:05 pm

Speaking of financial advice.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/bursting-the-rental-property-bubble-for-settling-couple/article21601028/

#138 rosie "moving forward" in the knowledge that, "this won't end well" on 11.21.14 at 12:12 pm

This article is badly written and funny. Figures, look who wrote it.

http://www.property-report.com/ghostbusters-target-canadas-chinese-buyers-37059

#139 rainclous on 11.21.14 at 12:24 pm

The obligatory weekly RE “news”. Van Sun parroting the latest drivel emanating from a former CMHC economist reinforced by a Geography Prof as ordered by owners/editors at forementioned fish wrapper.

Its different here…………….

http://www.vancouversun.com/opinion/columnists/Barbara+Yaffe+Vancouver+housing+prices+tied+China/10399964/story.html

#140 Mark on 11.21.14 at 12:31 pm

“Garth, what’s the policy reason that mortgages here have to be renegotiated every 5 years, while Americans can lock in permanently?”

The ability for Americans to lock in for 30-year terms is largely a function of Fannie Mae/Freddie Mac offering such a capability. Of course, in a rising interest rate environment, or even the 2008/2009 environment, significant shifts in the yield curve can render Fannie/Freddie completely insolvent. Duration mismatch destroyed the US banking system. There is, IMHO, very little desire for Canadians to buy the matching 30-year GICs that would be required to fund such. But personally I’d support changing the Canada Interest Act, dropping the 5-year limit, so that they’d be allowed to do so if they wanted to.

Mortgage rates would rise approximately 1% overnight. Not a bad development. — Garth

#141 Luc on 11.21.14 at 12:32 pm

Son lends money to mom and dad and goes bankrupt even if he makes millions. Big mistake. Read the story click the link…
http://espn.go.com/nhl/story/_/id/11908361/columbus-blue-jackets-d-jack-johnson-files-bankruptcy-parents-reportedly-blame

#142 Josh in Calgary on 11.21.14 at 12:37 pm

#127 Gladiator,
Sounds like she has no one to blame but herself. She needs to learn to trust her kids ability to look after themselves.

My father-in-law has a saying that I agree with 100%. Your job as a parent is to work yourself out of a job.

Another saying that I like just as much is your goal as a parent is not to prepare the path ahead for your children. It’s to prepare your children for the path ahead.

It’s ok to pick your kids back up if they fall. It’s not ok to never give them the chance to fall.

#143 Josh in Calgary on 11.21.14 at 12:43 pm

Seems like a lot of people like to rail on CMHC (myself included). The basic premis is a good one. Give the banks incentive to allow people to get into homes. It’s the details that have gotten off track. The max insurable should be for a starter home ($300,000?). People should still need 20% down and should qualify for a 25 year mortgage.

If you want a bigger home then you need the credit capacity for the banks to lend to you without insurance.

This may sound harsh, but if this was the case then houses would be a heck of a lot cheaper because people would be forced to buy them with actual money.

If all CMHC would lend to first-timers was $300K, then there would be more $350K houses. — Garth

#144 SWL1976 on 11.21.14 at 12:44 pm

Canada Interest Act – over 100 years old, written then to protect borrowers from long period of indenture. — Garth

Wow, that worked out well. Good intentions anyways.

#82 Anne, I agree. The moral high road is a road that is seldom travelled these days, its probably more like a trail that’s growing over, but there, are still some, like our esteemed host, many blog dogs and readers I’m sure.

As for politics I believe the moral high road is in the rearview mirror as they seem obbsessed with racing to the bottom and getting there first. For what? I think many of us know, but its too ugly and devious for most to fully comprehend, for most, the human mind does not work this way and fails to grasp why people in control would do this to a population. I’m talking about the ones who are really in ‘control’

As for my take on inflation? I missed my connecting flight last night so 170$ for a hotel and a 19$ Burger

Update on the health of oil in right now from a boots on the ground as they say perspective. Well lets just say a little bird told me ~25% of our department has to go in the next 4 to 6 weeks. Well the good news for some they will have more family time for the holidays, but prob not without the stress. Even when the price of oil does come back big business will use this shake up to justify stagnant wages and doing more for less, happens everyday

As for me I’m just your average joe who knows how to build and fix things. Do I like flying 2500km for work? Nope, but I am going to ride it out as long as I can and do my best while I’m there, its just who I am. Would I rather be building solar panels, involved in renewable energy, or something rather than oil from dirt? Yep, but right now its bleak, but I still have hope, I am quite creative and talented, but our current system does not encourage this, I know and was almost bankrupted from an over regulated system. While our leader Steve-O on the hill has coupled or enconomy to this one trick pony of oil, well I guess there is the housing market. Ouch I think we all know here where that is heading, I think I will stay diversified, both financially and career wise…

Who knows what is next on this journey of life, enjoy the ride

#145 Cato the Elder on 11.21.14 at 1:13 pm

Re: #133 Josh

The premise of the CMHC is NOT good. Even if they insured only 1$, it is still immoral. They are putting the risk onto TAXPAYERS and letting banks PRIVATIZE the gains. Where is the morality in that?

This is called moral hazard. It is WELL KNOWN, and perhaps you can take examples from your own life, that when you take away the downside loss from a person, they make riskier decisions.

If you could bet 1000$ on a roulette table and were told you would be reimbursed if you lost, but got to keep the money if you won, how long would it take for you to abuse?

Banks should be free to set their own criteria for lending without ANY government guarantees. They would be much more diligent in who they lent to because they would be risking their own capital. This would encourage RESPONSIBILITY and MATURITY and THRIFT amongst Canadian borrowers as well as they had to save more in order to get a mortgage. Our society would be much more insulated from pricing pressure as people were more responsible with money.

The way the system is set up now, all those ‘moral do-gooders’ have actually created a MASSIVE problem for those they were trying to help like the poor – they will invariably end up losing their houses, STILL be stuck with a mortgage debt, AND have to foot the bill to bailout the banks. Great job socialists!

So just to recap, it’s really us fiscal conservatives who are compassionate. We want prices to be low, so more people can afford them. The best way to do this is through free market principles, and not government meddling, which has caused so much of these problems. Socialism will cause the poor:

1.To be homeless when they eventually default
2.To be stuck with a mortgage debt, without the home
3.To bailout the banks in the form of either taxes or higher prices due to printed money
4.To be faced with higher rents as large foreign sovereign wealth funds and banks come in to buy up all the foreclosed houses

http://www.zerohedge.com/news/2014-10-24/spanish-tenants-wake-horror-wall-street-landlord

I really think the part of the brain that raises alarm is either missing or broken in most people. Centuries of city living and not being exposed to many threats has weaned that part out of the gene pool for the most part. I guess it’s up to us country folk to point out that there are massive threats looming. But most people would rather stare at their phones.

#146 What about CMHC? on 11.21.14 at 1:14 pm

Thanks to CMHC (i.e. tax payers), banks have no problem giving you 0.8M for a house.

If you ask the same bank to give you 100K for a small business – what will they say?

#147 Nemesis on 11.21.14 at 1:19 pm

#SucksToBeA… #CaribbeanPrivateBanker… #@RBC,Today…

[G&M] – RBC to shake up wealth division and cut jobs

…”The changes come as Canadian banks struggle to turn around their Caribbean divisions. Royal Bank of Canada, Canadian Imperial Bank of Commerce and Bank of Nova Scotia – the three Canadian lenders with sizable operations in the region – have all suffered writedowns from their Caribbean arms in the past year because the islands are still suffering from a drop in tourism following the global financial crisis.”…

http://www.theglobeandmail.com/report-on-business/royal-bank-to-shake-up-wealth-management-division-job-losses-expected/article21688531/

[NoteToGT: Maybe it’s just a BrandingThang?… I mean, you know – what if RBC had a more durable, memorable spokesperson… a more compelling message? e.g. – http://youtu.be/Xv9aieNT6x0 ]

#148 TnT on 11.21.14 at 1:23 pm

I am starting to think “Cato the Elder” is a troll trying to entice some radicals out of hiding….

#149 gladiator on 11.21.14 at 1:25 pm

@JoshInCalgary:

thanks for your post.
I agree with you – I am doing exactly that with my 2 kids.
Also, I am saving the 2 quotes for my collection. Very good ones!

#150 Blacksheep on 11.21.14 at 1:29 pm

Nonplused #110,

“But why didn’t any bombs go of after WWII (except test)?”
——————————————
Every body knows about Hiroshima, Nagasaki, Chernobyl and of course Fukushima.

But have you seen this light hearted, little video:

Nuclear Detonation Timeline “1945-1998”

http://www.youtube.com/watch?v=ZWSMoE3A5DI

#151 Cato the Elder on 11.21.14 at 1:43 pm

Re: #149 TnT

The fact that anything I’m saying could be perceived as ‘radical’ is very telling of the times we live in.

Nothing radical about freedom. Yet, because we are under a deluge of big government for decades, people think there is something strange about it.

I’m just pointing out the truth. It can be shattering to people’s world view when they’ve never been exposed to it.

The steps I listed in #146 are happening in Europe as we speak. The debt bubble and crash will happen here too. The same players that use this system to confiscate the wealth of the world (banks) will do the same here.

They have no loyalty to countries. Only the pursuit of profit. In normal circumstances, that is alright. But their profits are derived from debt (enslavement). That is bad.

#152 45north on 11.21.14 at 1:51 pm

Ole Doberman : Gartho – since buying and holding seems to be a dead strategy in stocks, what are your thoughts on swing trading?

swing trading is mostly a seasonal thing, wait till spring!

http://www.amazon.com/s/ref=nb_sb_ss_c_0_13?url=search-alias%3Dlawngarden&field-keywords=garden+swings+for+adults&sprefix=garden+swings%2Caps%2C208

#153 MarketWatch on 11.21.14 at 1:52 pm

This is interesting Canadians getting comfortable with variable rate mortgages 2014 “Quote from Ratehub CEO”.

This time each year, the Canadian Association of Accredited Mortgage Professionals (CAAMP) releases their Annual State of the Residential Mortgage Market in Canada. Data in the report comes from various sources, including an online survey of more than 2,000 Canadians. Some of the statistics weren’t news to us – namely just how low mortgage rates are now compared to last year – but there’s one, in particular, we thought might be news to you.

Twenty per cent (20%) of new homeowners chose to get a variable rate mortgage in 2014; that’s up 11% from the 9% we saw in 2013. Correspondingly, the popularity of new fixed rate mortgages went down 6%, from 82% in 2013 to 76% in 2014. Why are more Canadians getting comfortable with variable rate mortgages? Perhaps after watching Prime rate sit at 3.00% for 4+ years, buyers are seeing there may not be as much “risk” to the variable rate as they once thought. Or it’s that 5-year variable rates can be found for as low as 2.10% (Prime – 0.90%).

http://www.ratehub.ca/mortgage-blog/2014/11/canadians-get-comfortable-with-variable-rate-mortgages-in-2014/

#154 Panhead on 11.21.14 at 2:00 pm

#88 omg the original on 11.20.14 at 10:49 pm
6 TOP REASONS NOT TO MOVE TO VICTORIA

Yabut it shure is a nice place to visit … had a great time this past summer. I’ll be back …

#155 JSS on 11.21.14 at 2:22 pm

Mark is one smart dude!

And Garth too.

#156 Nemesis on 11.21.14 at 2:34 pm

#FabulouslyFrivolousFujianFridays,Or… #TonnesOfFun!… #WhyBillGable’sNewNeighbour’s… #HouseWarmingParty… #Featured12Trucks…

[FT] – Chinese general caught with tonne of cash

…”When investigators searched the Beijing home of Xu Caihou, one of China’s highest-ranking army generals, they found so much cash and precious gems they needed a week to count it all and 12 trucks to haul it away…

…Gen Xu’s hoard is not the largest so far. In May, investigators detained Wei Pengyuan, the deputy head of the National Energy Administration’s coal department. It took 16 machines to count the more than Rmb200m he had stashed in his home, according to Xinhua, the official news agency. Four of the machines reportedly burnt out due to the workload.”…

http://www.ft.com/intl/cms/s/0/4883f674-7171-11e4-818e-00144feabdc0.html?siteedition=intl

[NoteToGT: Just between the two of us, not for nothing is it called the “Peoples Liberation Army”…]

#157 OMG the better one on 11.21.14 at 2:34 pm

#97 Smoking Man on 11.20.14 at 11:52 pm
The Temptress.
Have I got a story for you.
Out having a smoke with a fellow tax farm slave, a couple walks by, old bastards at leased 60, arm in arm with a 35ish cutie.
She says hi Smokey, damn , it’s a chic I rode the train to long branch with.
She was going thought a divorce last year.
After they walk by I tell my pall , cool she’s young hot and poor, looks like she got a sugar daddy.
Ha ha.
As the cherry on my smoke reaches the filter she pops out behind the corner.
That was my lawyer , finalizing my devorice.
Let’s go for a coffee and catch up.
Showing off to my pall I said ok..
Well after coffee she wants to go for drinks.
I said no…
It would have happened. Half my age , killer body, and I’m weak.
That is a disaster waiting to happen. I’ve seen it so many times..
Short term rentals are the way to go.
They’re paid to go away…
…………………………………………………………………….

Beside the fact that wify poo would crush, kill and destroy your manhood before you got a “I’m sorry Honey out of your already bloodied mouth.

Best to stick to the booze and dream smoky ………………

#158 RealistvsExtremist on 11.21.14 at 2:35 pm

#149 TnT on 11.21.14 at 1:23 pm
I am starting to think “Cato the Elder” is a troll trying to entice some radicals out of hiding….

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

Everytime I read a slag against Cato I wonder what “cushy guaranteed” public sector job they have. For now anyway…..

#159 pinstripe on 11.21.14 at 2:55 pm

I have been away from gthis blog for quite some time spending more time at the coffee shop with many farmer retirees discussing municipal, provincial and federal matters. Our discussions are similar to what Cato the Elder is presenting on this blog.

today our time at th coffee shop cut was short. Everyone was heading to a computer to read what Cato has to say on this blog.

#160 Holy Crap Wheres The Tylenol on 11.21.14 at 2:58 pm

#124 crowdedelevatorfartz on 11.21.14 at 9:34 am

@#105 Cato the Paranoid
“The coming collapse of the US dollar system is going to make things VERY apparent that we DO NOT LIVE IN A FREE SOCIETY….
++++++++++++++++++++++++++++++++++++
Sooooo, after the “collapse” what are YOU going to do without, a job, money, Safeway, electricity, internet, toilet paper,……..Or do you have that all stockpiled in your personal “Valhalla”?

Are you gonna be the hermit living under a log in the forest that comes out to beg for food and warn us that “the end is nigh!” ?
_____________________________________________

Cato The Elder has shit his depends again! Fill em up Cato dude. Marcus Porcius Cato you are not my friend, where do you get all of this time to write? Holy $hit you sure can spin a good yarn! Smoking Man do not take writing lessons from this guy!
Cato enim ipse est amicus meus, vade perfodi et coever donky in stercore !

#161 Holy Crap Wheres The Tylenol on 11.21.14 at 3:04 pm

#148 Nemesis on 11.21.14 at 1:19 pm
#SucksToBeA… #CaribbeanPrivateBanker… #@RBC,Today…
[G&M] – RBC to shake up wealth division and cut jobs
…”The changes come as Canadian banks struggle to turn around their Caribbean divisions. Royal Bank of Canada, Canadian Imperial Bank of Commerce and Bank of Nova Scotia – the three Canadian lenders with sizable operations in the region – have all suffered writedowns from their Caribbean arms in the past year because the islands are still suffering from a drop in tourism following the global financial crisis.”…

http://www.theglobeandmail.com/report-on-business/royal-bank-to-shake-up-wealth-management-division-job-losses-expected/article21688531/

[NoteToGT: Maybe it’s just a BrandingThang?… I mean, you know – what if RBC had a more durable, memorable spokesperson… a more compelling message? e.g. – http://youtu.be/Xv9aieNT6x0 ]
__________________________________________

Oh to be a banker in the Caribbean, all of that so very traceable legitimate foreign cash. Where oh where did it come from and where oh where does it go?………………….
Hm mm….Oh hell so I’m unemployed and living on the beach. Well I think I’ll pick some more breadfruit and coconuts, then go lay down under a palm tree until sunset, then maybe I’ll get up, or not!

#162 Josh in Calgary on 11.21.14 at 3:04 pm

If all CMHC would lend to first-timers was $300K, then there would be more $350K houses. — Garth

Garth, are you saying that’s a bad thing or a good thing?

#146 Cato the Elder,
Spare me the “Tea Party”, get rid of all things government rant. I’m a fiscal conservative too, but I’m not so naive to think the world would be all sun-shine and lollipops if we put absolute faith in the all powerful “free market” god. You bascially pave the way for Oligarchs to run the show to the detriment to the rest of us.
The government is involved in stimulating the economy in a multitude of ways (as they should). Your type seems more than happy to accept that form of socialism, but seems to decry anything that gives the working class a fair shake.
As for the risk to the tax payer, I don’t like it either, but as long as there are well thought out limits then the risk is minimal. What I’ve proposed is drastically more conservative than the system we have in place now. There needs to be some balance. However, with any issue there are wingnuts on each side that insist it has to be all or none.

#163 Stickler on 11.21.14 at 3:13 pm

@ #56 Freedom First on 11.20.14 at 9:05 pm

I have been undecided if this is a good time to buy the ETF-CPD on the TSX.

————————————

It depends on your view of interest rate movement. If rates go up, the value of the CPD (preferred shares ETF) will go down. You will still get the tax advantaged distributions though.

Example from May 2014 (when people were worried that rates might change): share price $17.32. By Aug it dropped 9% (in 3 months). Now (6 months later) it is still down 5%.

#164 Steve French on 11.21.14 at 3:22 pm

Smokey, you fool!

https://www.youtube.com/watch?v=Ga4AGttiQSw

#165 straight six on 11.21.14 at 3:24 pm

a story within a story.
I tune in to read GT and the wisdom of Cato the Elder.
If Garth ever needs to chill.. I say, pass the helm to Cato!

#166 None on 11.21.14 at 3:26 pm

#92 Cato the Elder on 11.20.14 at 11:19 pm

Central banks are the greatest evil ever perpetrated on mankind.

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

Dude you are off the chain today.

#167 Mike S on 11.21.14 at 3:46 pm

“The bad news is that 11% of homeowners (same number as last year) took equity out to pay for other things. In total, $63 billion of equity was taken out of our homes (avg. $55,000 per person). The money was used for: debt consolidation ($20.6 billion, up from $16.6 billion), home renovations ($17.4 billion), investments ($7.7 billion, down from $15.1 billion), purchases or education ($6.6 billion) and other things ($10.3 billion).”

#168 TnT on 11.21.14 at 3:49 pm

More money coming into Canada?

Steps taken by China this week towards capital liberalization – allowing money to flow more freely in and out of China – are of potentially huge significance

http://business.financialpost.com/2014/11/21/china-financial-system/

#169 Mark on 11.21.14 at 3:54 pm

“If you ask the same bank to give you 100K for a small business – what will they say?”

Hence, why we have such a poor quality economy in terms of job creation. Not to say that all, or even many “small businesses” are worthy credit prospects, but if credit is abnormally loose for one sector due to the CMHC preference, it means that credit is abnormally tight for other sectors. After all, since we’ve previously established that credit is confined by the willingness and ability of the saving public to save and lend, there’s only a finite amount of credit.

Senior Canadian corporations are still paying net costs of new borrowing at all-in rates higher than that of “Joe Sixpack” on a mortgage. So the phenomena of tight business credit isn’t limited to small business only. We’d have a heck of a lot more jobs, and probably far more affordable house prices (on account of less speculation and higher incomes), if more credit was directed towards private sector job creators, rather than housing speculation and the public sector.

#170 Too much rain on 11.21.14 at 4:06 pm

Isn’t this what the Banks did in the US. They gave away mortgages, and let institutions like AIG insure them, knowing that they would fail. Here its CMHC.

#171 RealistvsExtremist on 11.21.14 at 4:14 pm

#167 None on 11.21.14 at 3:26 pm
#92 Cato the Elder on 11.20.14 at 11:19 pm

Central banks are the greatest evil ever perpetrated on mankind.

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

Dude you are off the chain today
++++++++++++++++++++++++++++++

And being ignorant of facts shows how the brainwashed sheeple have no clue…….

#172 RealistvsExtremist on 11.21.14 at 4:24 pm

Here is a perfect example…..if the so called “conspiracy theorists” – invented by MEDIA by the way – are so off their rockers, kooks, nut jobs then why has the so called US recovery, jobs, lots of money everywhere, everyone doing great……..turned into this:

http://www.cbc.ca/news/world/american-shakedown-police-won-t-charge-you-but-they-ll-grab-your-money-1.2760736

I’d be curious to know if any of the bored retired public sector workers have had their cash stolen by the cops of the USA police state. Maybe they could call CUPE and launch a grievance.

#173 Cato the Elder on 11.21.14 at 4:36 pm

Re: #163 Josh

You couldn’t be more wrong! Oligarchs LOVE managed democracies. Big government+big business=a winning formula for the rich!

Oligarchs capture the government through lobbying. They lobby for special privileges, bailouts, corporate welfare, tax loopholes, and regulations that limit competitors.

Guess who doesn’t get any of that? The middle class. Or new startup businesses.

They don’t want competition. What makes that so difficult to understand? REAL free markets and limited government is the WORSE thing they would want! Competition means they are under threat of losing their wealth from better businesses that offer better goods/services to customers.

The fact that so many Canadians have been taught that regulations are good for them shows how effective they’ve been at taking over the country.

Do a little bit of reading about how difficult it was for Wind Mobile to come into Canada. The CRTC blocked them for AGES and deluged them with legal paperwork. If it wasn’t for the fact that the founder was a billionaire it would have been impossible to compete here. He’s even said himself that Canada was THE MOST DIFFICULT PLACE TO DO BUSINESS from a regulation standpoint, and if he had it to do over, he wouldn’t have bothered.

And we have HIM to thank for all the plan changes and shakeup of the cell phone industry. Before, there were no pay as you go plans. The big 3 were taking us to the cleaners every chance they got. Even now our rates are still higher than most countries but it has gotten better – ALL THANKS TO COMPETITION.

***********

Re: #167 None

I take it you’ve done absolutely NO research on the matter. Why don’t you spend some time exploring whether or not I’m right?

I will gladly accept your criticism if you have spent time examining it objectively. But to dismiss it outright is just plain ignorance.

https://www.youtube.com/watch?v=qIxhsF6JLEA&index=346&list=UUD2-QVBQi48RRQTD4Jhxu8w

https://www.youtube.com/watch?v=p3_Q1SiRN-A&list=UUD2-QVBQi48RRQTD4Jhxu8w

https://www.youtube.com/watch?annotation_id=annotation_726683&feature=iv&src_vid=p3_Q1SiRN-A&v=kM7rITeNW6U

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

Watch these videos as a primer. But I warn you, if you watch them, it may upset you. If you wish to remain in your state of ignorance, you may.

But if you do, you don’t have the right to complain about price increases, depressed wages, destroyed manufacturing, higher unemployment, vanishing pensions, aggressive foreign policies leading to war, national debt, higher taxes, etc.

The money IS the problem, and all the other fundamentals issues stem from it.

#174 TnT on 11.21.14 at 4:49 pm

#159 RealistvsExtremist

Everytime I read a slag against Cato I wonder what “cushy guaranteed” public sector job they have. For now anyway…..

******

Every time I read a slag from Cato it is against the very same system for which he benefits so lavishly.

#175 TnT on 11.21.14 at 4:57 pm

#174 RealistvsExtremist

#167 None on 11.21.14 at 3:26 pm
#92 Cato the Elder on 11.20.14 at 11:19 pm

Central banks are the greatest evil ever perpetrated on mankind.

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

Dude you are off the chain today
++++++++++++++++++++++++++++++

And being ignorant of facts shows how the brainwashed sheeple have no clue…….

*********

Maybe this is the way it has to be….

Not everyone can be a CEO

We will always need “fry cooks”

Some people want to just be “fry cooks”

This is a Free Will society

All the Information is available on the NET for FREE

This is all one needs to be informed before acquiring debt.

Cato watched a bunch of tin foil hat postings and is starting his own Central Bank Witness religion.

#176 None on 11.21.14 at 5:14 pm

#174 RealistvsExtremist on 11.21.14 at 4:14 pm

And being ignorant of facts shows how the brainwashed sheeple have no clue…….

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

Get off your high horse. Just because you read the rantings of whackjobs on the Internet and watch their Youtube videos does not mean you have some special insight to the world.

I am curious, however, what Cato does for a living.

#177 straight six on 11.21.14 at 5:17 pm

re #167 None.. Cato off the chain.

Of course he’s off the chain.. Critical thinkers eschew chains! and rose coloured glasses.

#178 Mark on 11.21.14 at 5:21 pm

“Steps taken by China this week towards capital liberalization – allowing money to flow more freely in and out of China – are of potentially huge significance”

Maybe we’ll actually get some HAM in Canada then. Because there sure as heck isn’t much evidence of it existing right now.

But on that note, unlikely to help Canadian housing until the prices are much, much lower. Rich Chinese didn’t get rich by buying assets at the top, that’s for sure.

#179 Blacksheep on 11.21.14 at 7:04 pm

TnT,

Thanks for the support.

#180 Londoner on 11.21.14 at 7:08 pm

#147 What about CMHC?

If you ask the same bank to give you 100K for a small business – what will they say?
__________________________________________

They will ask you for a business case and 3 years of projected cashflows. Mortgages are secured with real assets. Business loans are backed by future cashflow.

#181 Josh in Calgary on 11.21.14 at 7:17 pm

#176 Cato the Elder,
You tell me I couldn’t be more wrong and then go on to argue against points I haven’t even made.

Just because regulation sometimes reaches too far with unintended consequences doesn’t mean the answer is to scrap all regulations. You simply adjust it so that it performs to the original intent.

Your anecdote about the CRTC proves that too much regulation can be a bad thing (maybe). It does nothing to prove that no regulation would be a good thing.

#182 Doug in London on 11.22.14 at 5:53 pm

Andrew’s not the only one with stories about [email protected] Some years ago I was invited for a portfolio review by [email protected] She suggested I buy into the bank’s energy fund as it was performing well. I said no, as I had some of that fund (bought in 1998-99 when it was on sale) and had sold the last of it recently for a tidy profit. I figured oil was in a bull market (as well as other commodities) and after a good run up it was time to take some profits. Now for the punch line, that was in February 2008 and we all know what happened after that. Now, not back then, is a good time for buying energy funds. I have moved away from the city where that particular [email protected] was located, so I have no idea if she’s promoting energy funds now but doubt it.

#183 Bob on 11.22.14 at 10:46 pm

Here’s our situation…

Late 40’s, 2 kids (both under 8)
130k & 38k annual income
500K mortgage
60k loan
No savings
50k in defined contribution pension
2,500 /month mortgage & property taxes
1,100/month consolidation loan payment
1,000/month for food
$800/month car lease payment
$800/month daycare
$200/month cable internet phone
$150/month electricity
$100/month gas
$100/month utilities

Comparable rental would be around $2,500 min
House value $550k

The wife wants to stay in the house that’s comfortable and “home” but it needs a lot of work – roof, foundation, siding, etc. etc. I want to sell, rent a cheap place in the neighbourhood and pay off debt as fast as possible and then save as fast as possible. How can I convince her that this is a good idea?