Extreme

HORSE modified

Guess where single-family home sales dropped last month? Yeah, Calgary. And whether you wear pointy-toed boots like me or not, this should concern you. We’re teetering on the edge of change.

After all, six of 10 regional real estate markets in Canada are already seeing declining sales or soggy prices. (Sellers in places like Halifax and Regina grow more desperate by the day.) Up to a few weeks ago, we had just three cylinders firing – Van, Cowtown and 416. Now you can start writing off Alberta as a bottomless pool of housing horniness. Calgary listings just shot up 22%. No doubt about it. Change.

The catalyst is oil, as you might imagine. And while the price of a barrel has bounced off the low-sixty-dollar mark in the past couple of days, nobody sees a quick recovery. Obviously. US production remains at a 30-year high while Europe fights deflation, Japan and China battle recession and OPEC decides to keep pumping. It’s classic. Too much supply, too little demand. Plus, a strong US dollar. The result? Just be glad you didn’t buy a Calgary McMansion last month.

Even the Calgary Real Restate Board, bastion of cowboy machismo and realtor hyperbole, admits it. “It was a relatively strong month,” says CREB’s fetching chief economist Ann-Marie Lurie, “but definitely one that’s moderating.”

There’s a lot more moderating to come, if history’s any guide. Past oil prices drops have brought near-panic to the market, with a corresponding plop in sales and prices. This time, after an historic and nearly-hysterical run-up in prices since 2009, the odds of a meaningful drop seem higher.

Adds Ann-Marie: “If an energy downturn forces companies to cut jobs, Calgary’s housing market will take a hit. It has to be a prolonged period of low oil prices before companies start to change some of their investment decisions. So if falling oil prices continue, there’s no question it will start to influence employment growth … and that will start to influence our housing market.”

Some see that happening sooner than later, since it’s people – not oil – that buy houses. Soon there will be fewer of them, at least fewer newcomers. BMO’s Bob Kavcic says Alberta’s economy will be no star next year, and immigration into the province could be chopped by 50%. At the same time, other provinces (like Ontario) are likely to grow stronger (cheap gas sure helps), also cutting the urge to fly West.

This isn’t good news in Calgary or Edmonton where developers have been throwing up new housing as fast as possible, and even rock star carpetbaggers like TO’s condo king, Brad Lamb, have been blasting ahead with massive new slabs. Looks like a lot of that could come to market just as demand is shrinking faster than a gelding’s desire.

And then there are those who are screaming at Calgarians to get the hell out. Now. Which brings us to ex-realtor and outspoken housing analyst Ross Kay. His latest analysis is dire enough to have Calgarians hammering in the For Sale signs.

“Calgary is in a classic over-sold condition where more and more buyers are purchasing their future home without having their existing home sold under contract,” Kay warns.  “Calgary has been in over-sold territory since July 2013, the longest period in its history.  Calgarians’ previous unfaltering faith in the housing market appears impacted by concerns of leading economists about the Calgary economy.   While it is outside our area of expertise to comment on anything outside the Realty Market, evidence has surfaced that Calgary’s bull market in housing may have come to an end. Calgary remains under our NO BUY warning and SELL NOW recommendation.”

And here is his handy summary:

Realty Market Status – Over Sold
Pace of Sales – Decelerating
Current Pace versus Peak Pace – 89%
Year End Projection – 25,705
Year to Date Fail to Sale Ratio – 51.3%
November Fail to Sale Ratio – 49.9%
Buyer Risk – EXTREME
Seller Risk – Low
12 month Price Prediction – Negative

Now here’s more to worry about (this is a full-service blog, after all): the Bank of Canada and interest rates. While there’s a meme that the cost of money will never go up again because the government couldn’t afford it or the real estate market would croak, it will. As mentioned, the US Fed will begin to tighten next year, the bond market will react and fixed-rate mortgages will bloat.

But it also appears the BoC may pull the trigger next year, causing the prime, lines of credit and variable-rate loans to pop. This week boss Poloz says the economy is stronger than expected and excess capacity is being reduced at a faster clip. “Canada’s economy is showing signs of a broadening recovery,” the bank sayeth. “The hoped-for sequence of rebuilding that will lead to balanced and self-sustaining growth may finally have begun.”

To Bay Street economists this sure sounds like stage-setting for a rate hike. The betting: it all starts in the third quarter of 2015, which would be several months after the Fed pulls the trigger. So, get ready.

By the way, the bank also says the amount people are borrowing, “poses a significant risk to financial stability.” So higher rates will curb it. Guess what that does to real estate?

Call your agent.

171 comments ↓

#1 highway61 on 12.03.14 at 7:05 pm

Guess what that does to real estate?

unfortunately, in Calgary that means +3% in 2015.

#2 Harbour on 12.03.14 at 7:05 pm

On BNN every person in Canada owes $21,000

Not including mortgages

#3 Mark on 12.03.14 at 7:06 pm

“But it also appears the BoC may pull the trigger next year”

Very doubtful. The ‘trigger’ the BoC may pull next is to drop the rate as the economy will be unable to move forward in the environment of falling housing prices. Effective rates are as low today as they’ve ever been, yet prices are falling. Which is, in and of itself, keeping inflation quite under control.

Risk premiums on mortgage loans may very well expand in the coming years, as equity recedes. But I wouldn’t look for any rate increases from the BoC for a long time, especially since its pretty obvious that the housing market has rolled over in a decisive manner and will be a drag upon aggregate demand for many years to come.

Rates, of course, will not be falling. Save your breath. — Garth

#4 @crazyfasteddy on 12.03.14 at 7:08 pm

Edmonton didn’t get the memo; unchecked hedonism continues… http://edmontonrealestateblog.com/2014/12/november-greater-edmonton.html

#5 calgaryPhantom on 12.03.14 at 7:08 pm

After the real estate market pops ( which seems likely now), what happens to your blog? Will you shut it down?

(hint) I come here to get financial knowledge, not real estate predictions.

Then I can finally focus on bad photos and double-entendres. — Garth

#6 earthboundmisfit on 12.03.14 at 7:09 pm

One more “shot” and I’ll have done with you. You can delete or ignore as you choose. The guy in the picture….that’s what you deserve for driving a “dummer”. Nothing personal, as I still admire your work.

#7 Gary on 12.03.14 at 7:10 pm

Harper giving away wheat board assets to large US corporation
Rabble.ca

#8 calgaryPhantom on 12.03.14 at 7:11 pm

After the real estate market pops ( which seems likely now), what happens to your blog? Will you shut it down?

(hint) I come here to get financial knowledge, not real estate predictions.

Then I can finally focus on bad photos and double-entrendres. — Garth

————————————————————–

Wohooooo!!!

That works too.

#9 crowdedelevatorfartz on 12.03.14 at 7:12 pm

Toronto, Calgary, Vancouver.

…and then there were two…….

#10 Cato the Elder on 12.03.14 at 7:15 pm

Interest rates will not deliberately be raised. If they do rise, it will be the result of an international calamity foisted upon them. I have no doubt that is fast approaching – we are in the midst of witnessing an empire collapse.

A 1% increase would mean over 180 BILLION DOLLARS in additional interest the US would have to pay on it’s debt (that’s about half of what Canada’s government actually SPENDS in a year!). A return to normalized interest rates would destroy the US in very short order.

It’s estimated by 2024 interest rate payments will total almost 1 TRILLION dollars. This dwarfs every other payment the government makes. And that doesn’t even include PAYING DOWN THE PRINCIPLE!

http://mises.ca/posts/blog/government-interest-payments/

What can we expect as a result? More price increases. Stagnant wages. More impoverishment. Less middle class. Higher food prices. Enrichment of the banking class.

We are on the road to serfdom folks – stick your head out the window and enjoy the breeze. Jefferson tried to warn us about paper money, and we’re getting what we deserve!

#11 Harbour on 12.03.14 at 7:19 pm

Energy affecting real estate lagged the energy sector on the TSE but it’s now time to catch up.

#12 Mark on 12.03.14 at 7:28 pm

“A return to normalized interest rates would destroy the US in very short order.”

No, but it would induce a pretty significant de-valuation in the insanely over-valued USD$. A de-valued USD$ would decrease domestic consumption dramatically, and fire up the USA’s export industries.

The upside is that such would probably be the death of the FIRE industry and big government. Given the size of both, obviously a profound change, but I wouldn’t view such a change as being negative.

#13 Snowboid on 12.03.14 at 7:29 pm

Just checked the Calgary listings, and the place I called home as a young whippersnapper is still hovering around the $ 2 million mark – after over 3 years on the market!

Of course, it’s probably getting a bit creaky being 102 years old, and given my folks paid around $ 18K for in 1960, it’s probably not worth more than a million!

#14 Piccaso on 12.03.14 at 7:31 pm

#3 Mark

Your living in a dreamworld…

The Fed tried to curtail the real estate addiction in this country by reducing the amortization from 40 to 25 years and by increasing the size of down payment. It had no affect and you think they’re going to drop interest rates further when the rest of the world is raising interest rates in coming years?

#15 Pete on 12.03.14 at 7:32 pm

In November, Oakville just suffered its 4th consecutive Y/Y monthly unit sales decline. The number of units sold in Nov. 2014 is the lowest since Nov. 2009, which itself was a blip. Ignoring 2009, it looks like unit sales are now the lowest they have been for more than a decade.

However, the recent Y/Y average and median sale prices are significantly higher. It also seems that in all price categories > $1M there has been an increase in unit sales, so the weakness looks like it is in the < $1M end of the market.

This adds some credence to Mark's oft-stated assertion that in fact higher sales prices reported are the result of a changing sales mix, rather than actual price increases for similar houses – at least in this area.

#16 Renter's Revenge! on 12.03.14 at 7:33 pm

RBC profit up 11%.

Yee haw! as they say in Toronto.

#17 pravchaw on 12.03.14 at 7:42 pm

Great photo – painful to see. Where do you get this stuff?

#18 Realties.ca » Extreme on 12.03.14 at 7:45 pm

[…] Source: http://www.greaterfool.ca/2014/12/03/extreme-2/ […]

#19 bigbuff on 12.03.14 at 7:52 pm

While hucksters in Calgary continues to sell snake oil….
http://www.korerealestate.com/blog/

#20 North Burnaby on 12.03.14 at 7:57 pm

Great news everybody! Canada’s new millionaire visa scheme ‘will only accept 50 applicants per year’ !!!!!
Hooray!!! The real estate collapse is finally here :)
http://www.scmp.com/news/china/article/1654749/canadas-new-millionaire-migration-scheme-will-only-take-50-applicants

#21 not 1st on 12.03.14 at 7:59 pm

Garth, the US fed kept interest rates low for 7 years while the bubble worked itself out. That was a lot of insulation for the American people.

So Canada is going to do just the opposite and let rates spike rise overnight and shock the entire economy? Surely this can’t be under consideration?

Rates have been artificially low for six years. The result is record debt. This regime will end next year. — Garth

#22 CalgaryBoy on 12.03.14 at 8:02 pm

I always enjoy your posts, especially ones about Calgary! The ones about Calgary always seem to spark a lot of responses and a lot of fire!

I hope the real estate market takes a deep nose dive here. People here are way too arrogant. They believe houses will never go down, and oil will always stay high. My co-workers are mostly married to someone who works in oil and gas and have bought $700, 000 houses! Their monthly payment is $4000!!!

You tell them prices will correct here and they will laugh at you and then gang up on you and tell you how stupid you are to waste your money renting. It’s true. There might be one out of 100 people that will agree with what you’ve been saying.

I hate to see their rich husbands lose their jobs. But they don’t know any of the history with this province, especially in the early 80s. We are all around 30, and these are people that have been buying these $700K houses. And I get people who are constantly telling me to buy something. No thanks. Not in this crazy market. I’ll wait until prices go down.

“That’s not going to happen” is all I hear from them. Well, get ready, it’s happening!

I’ve been noticing some price drops on MLS, around $20-25K. With the price of oil taking a nose dive, it looks like there will be more sales coming soon. And from what I’ve been reading, it will take about 6 months to notice these changes. Well, I’m noticing them NOW!

And from what’s out there, it looks like oil will continue to decline in price and stay there for at least 2 years. They still haven’t found a bottom yet. This is gonna get very interesting soon!

#23 Smoking Man on 12.03.14 at 8:03 pm

Garth you know I love you man.

Buy did you not see the Bloomberg screen..

Wage increases in the USA tanked…

Rate hike.. South of boarder
.
Not going to happen bro…

And our export eccentric boc governor will do nothing that pumps up the dollar..

#24 For those about to flop... on 12.03.14 at 8:03 pm

Re#8
Vancouver is getting soggy around the edges,and I,m not talking about the rain!

#25 Marco on 12.03.14 at 8:05 pm

Thanks Garth, very informative.
A 22% increase in listings in Calgary, wow. That in itself should set off alarm bells. Gives new meaning to the Calgary Stampede…

#26 Harden on 12.03.14 at 8:16 pm

when rates actually do go up next year all those pre-approved greater fools will rush in

#27 Joe Schmoe on 12.03.14 at 8:18 pm

I live in Calgary, and think this place is overpriced by about 2x. Big paycheques equal big payments in Alberta.

in 2008 I thought I had a handle on the potential outcome for a correction, now I have no clue. My humble abode went up $500k in “market value” but all it did was weather for 6 years. And the kids ate some holes in the drywall.

I wish everyone well, but know it won’t be the case.

Oil will recover, there will be a new normal. $100+ oil was not a norm, just an long term overvalue…like RE…

#28 takla on 12.03.14 at 8:24 pm

higher rates…Hellaluya,,,,Another optional place to park my excess funds after us Canadian savers have been bitch-slapped by zirp.
Oh the fond memories of 8,10,12 % return on deposites back in the 80’s when the wife and I sold our 2nd house….was so nice to make money off the bank instead of the other way around.
Rid yourself of mortgage debt and park some cash with the [email protected] and position yourself for juicey Interest rate increases!

#29 Rob on 12.03.14 at 8:24 pm

Garth I agree with nearly everything you write about but I respectfully disagree about interest rates going up. The US dollar is getting stronger every month and that’s a huge problem. Especially if the US were to follow the rest of the world into a recession. Raising rates in the face of a too strong dollar is the last thing the US fed will do. Right now they are talking the interest rate talk. That gives the appearance that “normal” is right around the corner. It isn’t. The G20 is still in crisis mode 5 years after the crisis supposedly ended. Talk is all they got. They have been talking rate hikes “any day now” for 4 years. I figure 4 more years of talk is coming.
Because of Western society’s debt saturation, the only way rates will go up is for a debt crisis event that destroys the world’s faith in endless government printing. A real sovereign debt crisis. Then the market will force it and destroy everything in its path. I don’t see that happening in the next 5 years but who knows.
The stock market is not reflecting economic reality but rather endless trillions of money creation. The best market money can buy. This won’t stop. QE ends and Japan begins the next day. Coincidence? Sure. The markets are going to rise until something breaks. I’m in it and taking advantage but my “sell” button is within easy reach. I hope I won’t need it for a few more years.

#30 Happy Renting on 12.03.14 at 8:24 pm

It will be interesting to see the change in RE sentiment, from the boomers who currently insist that houses were their best investment (and will be yours, too), to young people who don’t believe RE will ever go down (so everyone must buy now), to everyone parroting the nonsense that rent is throwing your money away and paying someone else’s mortgage.

A bit sorry to see anyone experience hardship, but winter was inevitable. It wasn’t always going to be cool to be a grasshopper, lame to be an ant.

#31 vancouver right? on 12.03.14 at 8:25 pm

when is it vancouver turn ? it took eight years for calgary to show a hint of a slow down, interest rates have such a far climb back up to “normal”…… i’ll believe it when i see it

#32 Mr. Frugal on 12.03.14 at 8:42 pm

Oil is oversold. It will recover. At the current prices, I would much sooner own the major oil companies than the Canadian Banks.

#33 Mark on 12.03.14 at 8:50 pm

“Oh the fond memories of 8,10,12 % return on deposites back in the 80’s when the wife and I sold our 2nd house….was so nice to make money off the bank instead of the other way around.”

Sure, you got 8%, but you had much higher tax rates “back then”, as well as inflation. What really matters is the real after-tax rate of return. And typically such return is poorer in a high rate environment. Low rate environments tend to deliver higher real after-tax rates of return to investors than high rates.

For this reason, ZIRP has been the saviour of seniors and cash savers everywhere. Sure, the interest rate isn’t very high, but at least the purchasing power of money isn’t being eroded by inflation or taxes in the low rate environment.

#34 JSS on 12.03.14 at 8:52 pm

Is it safe to assume layoffs in Calgary, will occur after Christmas and New Years?

#35 Linda on 12.03.14 at 8:56 pm

#22 CalgaryBoy – you’ve obviously read your history & learned from it. We bought our house in 1984, several years into the bust that the O&G industry was experiencing in Calgary. Up to that point, we’d pretty much given up on purchasing as there was no way we could afford even a downpayment when interest rates were as high as 22%. Nor could we understand why everyone around us was able to purchase when we could not do so – DINKS (double income, no kids) with NO debt. Then the boom busted & pretty much everyone lost their jobs. The banks ended up re-possessing literally thousands of properties, since they were all of them mortgaged to the hilt & the only thing keeping the party going was the high income via O&G jobs. If the bust comes again it is going to be one ugly lesson for all your acquaintances to learn…..

#36 Drill Baby Drill on 12.03.14 at 8:57 pm

Dear Pathetic Blog; the only person dumber than someone who buys a home at the top of the market is a person who “purchases their future home without having their existing home sold under contract,”

#37 Blobby on 12.03.14 at 8:57 pm

I have a line of credit with TD (at prime + 1). It was originally there to kickstart my business, and is now there for emergencies (It’s no being used for anything)

Yesterday I got a letter saying they’re moving it to prime + 3.

No reason was given. But I wonder if the banks are getting worried, and increasing their own rates ready for a shift?

#38 Paul on 12.03.14 at 9:05 pm

#6 earthboundmisfit on 12.03.14 at 7:09 pm

Well you got your name right

#39 Drill Baby Drill on 12.03.14 at 9:08 pm

I am Old enough to remember in the mid eighties that people in Alberta could walk away from their homes by selling them for $1. Many did this due to an old and archaic law allowing anyone under water on their mortgages to just walk away.

#40 not 1st on 12.03.14 at 9:08 pm

#32 Mr. Frugal on 12.03.14 at 8:42 pm

Yup, it will touch somewhere sub $50 and then rebound, to about $70. There is no way it sees $100 until someone capitulates and OPEC has said they are in the price war for at least another 6 months.

Meanwhile supply in storage increases, cars get more efficient, solar advances.

#41 Uh Oh Canada on 12.03.14 at 9:09 pm

In my neck of the woods I’ve noticed more foreclosures than in the previous years. So is the economy really improving as they say?

#42 boopsie on 12.03.14 at 9:11 pm

#15 Pete
Did you find in your G&M today a glossy supplement
from your friendly REMAX realtor Invidiata in Oakville?
Great hulks up to $8mil…funny thing is; they all look unlived in.

#43 Mark on 12.03.14 at 9:14 pm

“Yesterday I got a letter saying they’re moving it to prime + 3.”

Similar deal here. Barely drawn LOC. Never missed a payment. Own a multiple of the LOC’s value in TD stock though. I don’t mind, as it will drive a new era of profitability and dividend growth in the absence of balance sheet growth, but it is fairly obvious that the risk profile of consumers is weakening.

Historically “prime” was only a rate available to business customers, and high quality ones at that. Not retail/consumers. Loans at prime, or even less than prime to residential retail borrowers are quite historically unusual. Just a reversion to historically normal risk premia will have far more of an effect on consumer behaviour than the probably-to-be-non-existent BoC rate hikes over the next 5 years.

#44 joblo on 12.03.14 at 9:16 pm

Higher Interest Rates:
Bozo Poloz, jack those babies high and mighty.
Safe bond yields puking cash, bargains galore on cheap RE and those arrogant Buy Buy Buy homeowners get what they deserve.
Whats not to like!

#45 Sean on 12.03.14 at 9:18 pm

The scenario of a BOC rate rise as a response to a Fed rate rise, or chasing the bond market, is at least plausible. Unlikely, in my opinion, that the Fed will actually move.. given the reality of this supposed US “recovery”.

But a BOC rate rise as a result of Canadian economic strength is completely ridiculous. Maybe they are just trying to talk the C$ higher.. or stop the bleeding. Collapsing oil, a collapsing currency, crap employment numbers, and an imploding credit bubble.. these are not the hallmarks of an economy that needs cooling.

#46 Drill Baby Drill on 12.03.14 at 9:22 pm

The old Social Credit Party of Alberta in 1939 enacted a new mortgage law which allowed people underwater in their mortgages to just walkaway if sold to a dollar dealer who then rented the homes out until the sherrif showed up usually 1 – 2 years later. In the 1980s, Alberta’s economy slid into a recession. Property values declined dramatically. Mortgagors started to abandon their properties in unheard-of numbers because in Alberta, mortgagees were “restricted to the land.” Since judgments on the covenants were unavailable against individuals, many whose property values dropped below the amount owing on their mortgages simply abandoned their properties. “Dollar dealers” then arrived on the scene. These dealers would offer to assume the mortgages and take title to the property for a nominal sum. By selling to a dollar dealer, a mortgagor could walk away from his or her property and avoid the damage to his or her credit rating that a foreclosure action might create. The dollar dealers would assume ownership but make no payments on the mortgages, for the only remedies available to mortgagees was to foreclose and take the property.

#47 Sean on 12.03.14 at 9:25 pm

For this reason, ZIRP has been the saviour of seniors and cash savers everywhere. Sure, the interest rate isn’t very high, but at least the purchasing power of money isn’t being eroded by inflation or taxes in the low rate environment.

——–

C’mon Mark! I enjoy your persistently contrarian views, and often share them. But to suggest that ZIRP has helped savers and retirees is a bit much. Agreed, it is the real after tax return that counts.. but when it is essentially zero, it is essentially zero! Meanwhile, we have seen a coordinated global bubble in asset prices, and the growth in wealth inequality since 2008 is unprecedented.

So ZIRP hasn’t helped everyone… only a true imbecile, the likes of a Krugman, would make that case.

#48 Victor V on 12.03.14 at 9:26 pm

http://business.financialpost.com/2014/12/03/canadas-economy-is-in-serious-trouble-without-a-radical-shift-warns-ed-clark/

Canada’s economy could be in serious trouble if we don’t radically re-evaluate our strengths and priorities, said former TD Bank Group chief executive Ed Clark.

Speaking at The Canada Summit conference hosted by The Economist magazine in Toronto Wednesday, Mr. Clark joked about his gloomy outlook, but said there are opportunities for turning things around. He cited Ontario’s wild swing from surplus to massive deficit over about a decade and the loss of manufacturing jobs to the U.S. as examples to back up his concerns.

#49 Spectacle on 12.03.14 at 9:27 pm

#20 North Burnaby on 12.03.14 at 7:57 pm
Great news everybody! Canada’s new millionaire visa scheme ‘will only accept 50 applicants per year’ !!!!!
Hooray!!!
http://www.scmp.com/news/china/article/1654749/canadas-new-millionaire-migration-scheme-will-only-take-50-applicants
***********************
Darn, I was going to apply for it. I thought it was a new Credit Card !
: )

#50 Strider on 12.03.14 at 9:29 pm

Tom Bradley over at the SteadyHand Investment Funds blog had a good post yesterday where he analyzed the Canadian housing market:

https://www.steadyhand.com/industry/2014/12/02/in_depth_look_at_cdn_housing/

Definitely worth a read.

#51 Mark on 12.03.14 at 9:34 pm

“Collapsing oil, a collapsing currency, crap employment numbers, and an imploding credit bubble.. these are not the hallmarks of an economy that needs cooling. – “

Indeed, although the ‘collapsing currency’ part isn’t all that likely to stick with us much longer. After all, as the banks turn off the consumer credit taps and mortgage credit taps, there will be a significant reduction in imports. Wouldn’t want to be an airline or a vacation operator hawking foreign vacations to over-indebted Canadians right now, that’s for sure.

CAD$ weakness is likely transitory at best. Debt deflation, or at least a cessation of debt expansion is profoundly supportive of the value of a currency. As are low interest rates. Energy prices alone have fallen enough that it is likely that the next CPI print will be zero or negative.

I personally see the CAD$ eventually going to $1.6 USD$. Although it probably will take a gold bubble to do that, as a sort of complete inversion of the US tech bubble in the late 1990s and the resource depression that accompanied such. Decoupling from the US is very likely.

#52 Mister Obvious on 12.03.14 at 9:34 pm

#31 vancouver right?

“when is it vancouver turn ? it took eight years for calgary to show a hint of a slow down”
————————–

Vancouver’s economy is now based entirely upon fairy dust. What could go wrong?

#53 Mister Obvious on 12.03.14 at 9:40 pm

#22 CalgaryBoy

“My co-workers are mostly married to someone who works in oil and gas and have bought $700, 000 houses!”
—————————-

We should be so lucky. $700K buys you a tool shed in East Burnaby.

#54 Spectacle on 12.03.14 at 9:50 pm

#17 pravchaw on 12.03.14 at 7:42 pm
Great photo – painful to see. Where do you get this stuff?

***********************
Sir Garth has a time machine!
He took a photograph of the last man leaving Calgary , following the Herd out, in 3rd quarter of 2015.

…and the Herd hit back. Yikes

#55 not 1st on 12.03.14 at 9:51 pm

I had coffee with a couple friends in downtown cowtown and its fair to say most people are walking around with one and half butt cheeks clenched these days.

Bonus season expected to be scary and then after xmas the real reaper comes. Lots of 55-60 yr olds just trying to cash out on the fumes of the boom so they can waltz into their retirement. Not going to be as easy as that.

#56 80'sKid6$4 on 12.03.14 at 9:57 pm

#53 Mister Obvious

31 vancouver right?

“when is it vancouver turn ? it took eight years for calgary to show a hint of a slow down”
————————–

Vancouver’s economy is now based entirely upon fairy dust. What could go wrong?
———————————

Totally, the 2.6 Million people who live in the GVRD all work in the patch or are stay at home moms. Not a very desirable place to live compared to that sprawling subdivision wasteland called Calgary.

#57 Spectacle on 12.03.14 at 10:02 pm

On a more serious note. Regarding tonight’s posting:
“this is a full-service blog, after all)” GT

Does any body have any fresh advice for the future generation; keeping in mind the “full-service nature ” and content of Garths blog.

The other day when others were footballing etc, I spend the entire game in hospital with my beautiful wife (4 months now) . It’s confirmed, if all goes well into the next 7-5 months, we will have a cherished little one !

I recall how my grandmother gave each child upon our birth, a pretty nice lump sum, and she invested it. Problem was, she listened to the :!)\€{^#% Lady @the Bank, way back then. Very unimpressive how little it earned after tax in 20 years!

Any cool ideas to set our newest one up, and can we do a TFSA etc pre-birth?

Regards all

#58 RealistvsExtremist on 12.03.14 at 10:04 pm

Tonight on Coast to Coast AM – Global Cooling

http://www.coasttocoastam.com/

The most listened to MSM radio station in the evening. Never mind the millions of youtubes from people posting. I’m saying this pre-emptively before the trolls come out and dismiss C2C. Although I am sure someone will say “Only tin foils listen to C2C” which is REALLY getting old. What the “name callers” really mean is “We are losing our propaganda war against people who are waking up”.

#59 Debunking Cato, Vol.1 Issue 6 on 12.03.14 at 10:09 pm

#10 Cato the Elder

“It’s estimated by 2024 interest rate payments will total almost 1 TRILLION dollars. This dwarfs every other payment the government makes.”

There you go again.

Linking to Mises Institute bumf that compares projected 2024 US government interest payments to the 2014 costs of a bunch of penny-ante departments but doesn’t even mention military spending or social security? That’s just not worthy of your check-and-recheck-the-facts style. We expect better.

#60 Tony on 12.03.14 at 10:20 pm

Re: #28 takla on 12.03.14 at 8:24 pm

The only thing you’ll see is interest rate decreases. You should have bought strip bonds in this country or something like TLT. It looks like it will take longer than I thought for TLT to hit the 140+ mark that it should have hit this year.

#61 Freedom First on 12.03.14 at 10:26 pm

The “Extreme” photo of today’s Post says a lot. A kick in the Gonads to a cowboy at a Rodeo is eerily similar to the financial kick in the Gonads an over leveraged homeowner receives when the RE bubble is eventually pricked. Both kicks are ‘Extremely” painful, and neither person saw it coming. But it is something neither will forget.

#62 Tony on 12.03.14 at 10:32 pm

Re: #52 Mark on 12.03.14 at 9:34 pm

I fully agree with you on the Canadian dollar longer term. It’s a simple reflection of the long term debt to GDP ratio in both countries. It’s much lower in Canada so longer term the Canadian dollar without a doubt will outpace the U.S. dollar.

#63 Observer on 12.03.14 at 10:32 pm

Vancouver….it’s freezing here…-2 degrees c.
I can’t stand it…skin drying out…had to actually turn the rear window defroster on…slipping on ice in the parking lot….how do you easterners handle this all winter? You’re nuts.

#64 Ronaldo on 12.03.14 at 10:34 pm

#33 Mark –

”For this reason, ZIRP has been the saviour of seniors and cash savers everywhere. Sure, the interest rate isn’t very high, but at least the purchasing power of money isn’t being eroded by inflation or taxes in the low rate environment.”

You are joking, right?

#65 Happy Renting on 12.03.14 at 10:38 pm

#58 Spectacle on 12.03.14 at 10:02 pm

Congratulations to you and your wife!

You have to be 18 years old for the TFSA, but get the RESP application papers all filled out (except name and date of birth), ready to send as soon as kiddo is born and has a name, along with $2500 to contribute in the first year (to get the $500 govt matching.)

It would be cool to open a non-reg account for your kiddo (don’t think you can do it in junior’s name, pre-birth) and buy a chunk of XUS or VUN (or something else covering a broad range) and see where it is in a few decades. (Blog dogs, tax implications of this? Will baby need to fill out tax returns if the ETF does a capital gains distribution?)

Other than that, start reading Garth’s posts to your wife’s belly? Make some board books explaining concepts like the Rule of 90?

#66 hohoho on 12.03.14 at 10:38 pm

> … So Canada is going to do just the opposite and let rates spike rise overnight and shock the entire economy?

who says rate spikes? it will be a slow boil to eventual default for many who try to hang on …

> … when rates actually do go up next year all those pre-approved greater fools will rush in …

pre-approval is not a loan contract and can be revoked, especially if the 5 year rate increases …

#67 Westcdn on 12.03.14 at 10:41 pm

Poor Alberta – ha. Things are going to be tougher for a while; about time to get prolific government spending under control. I have no doubt we are in for tax increases. In my opinion, RE in Alberta has just gotten past 2008 pricing so I don’t expect a big decline as apparently big oil jobs are few. The pain of low oil prices will be felt mainly by government and marginal engineering firms. There will be fewer big paying jobs. Surprisingly, I think the loss of marginal oil related jobs will be felt in other provinces as many prefer to travel to this province for work.
I would worry more about Ontario as GM looks to close production due to high wages needed for high housing prices. Another handout would delay the issue. A reduction in transfer payments from Alberta is in the cards. Government jobs – a good thing for now but don’t count on it. No signs of price declines in my hood yet but it has happened before. Mark is right, sales mix keeps the illusion alive. I am expecting the condo market to collapse first. In Alberta we call SFH as detached homes – might even get a garage.
I was down in Tucson last week – I was surprised their everyday prices were the same as mine. Mind you real estate and gas prices are cheap plus I got some great jeans at a great price on Black Friday. Funny, I didn’t see much difference between AZ and AB except for the temp and big cactus. God, summer must be hell there. I heard a story about a man who was killed by a saguaro after a gunfight – Darwinian winner.
PS. I am doing lousy in the equity markets this year.

#68 JSS on 12.03.14 at 10:42 pm

Mark – what dividend paying Canadian companies do you recommend currently investing in? Name a few…

#69 Sydneysider on 12.03.14 at 10:49 pm

“The catalyst is oil, as you might imagine. ”

The catalyst is the onset of winter – happens every year at this time. We’ll have to wait until spring until we see what is really happening.

#70 OttawaMike on 12.03.14 at 10:52 pm

#33 Mark

..For this reason, ZIRP has been the saviour of seniors and cash savers everywhere. Sure, the interest rate isn’t very high, but at least the purchasing power of money isn’t being eroded by inflation or taxes in the low rate environment.
————————————————-

Yeah right Mark. Tell that to a senior who has seen their investment income from GICs reduce their incomes significantly these past 8 years.

#71 randman on 12.03.14 at 10:57 pm

Least there be any doubt that the US and NATO has been meddling in the Ukraine

Meet Your New Carpetbagger Technocrats

Natalie Jaresko, a U.S. citizen and chief executive of private equity group Horizon Capital, will take over as “Finance Minister”. She has worked in Ukraine for more than 20 years after holding various economic positions in the U.S. State Department.

Read more at http://globaleconomicanalysis.blogspot.com/2014/12/enter-carpetbaggers-ukraines-new.html#4ocQgGzIgwCgA0ud.99

#72 Happy Renting on 12.03.14 at 11:07 pm

#125 Retired Boomer – WI on 12.03.14 at 3:14 pm

I’m doing a similar dance, though only looking to pull out about 10% of your figure. I’m in a lower tax bracket than usual this year due to being on leave from work, so thinking I’ll liberate a couple of bucks from my RRSP at the lower marginal rate, then reinvest, knowing that at least on that amount I got the tax shifting benefit (because who knows what rates will be decades from now, at actual retirement!)

#73 Mike S on 12.03.14 at 11:09 pm

“Dear Pathetic Blog; the only person dumber than someone who buys a home at the top of the market is a person who “purchases their future home without having their existing home sold under contract,”

Yet lots of people are doing it. Sometimes keeping their original house for years (until the builder finishes)

#74 Mike S on 12.03.14 at 11:11 pm

“No reason was given. But I wonder if the banks are getting worried, and increasing their own rates ready for a shift?”

At least BMO seems to see more risk at residential mortgages & HELOCs (from yesterdays report). TD bank report is not out yet …

#75 Ray Skunk on 12.03.14 at 11:19 pm

For anyone who read Garth’s description of Ann-Marie Lurie as “fetching” and wanted to investigate further, don’t bother rushing to Google images to clarify.

Ugh. *shudder* What has been seen, etc.

Please don’t pique my interest and subject my eyes to anything like that again, Mr. T.

#76 Arfmooocat on 12.03.14 at 11:21 pm

Some guy whose screen name is Mark has a wife whose hairdresser’s friend at the dog park has a neighbor whose uncle had some dividend paying stock tips…

#77 Mark on 12.03.14 at 11:22 pm

“Mark – what dividend paying Canadian companies do you recommend currently investing in? Name a few… – ”

XIU mainly, the TSX (60) index tracking ETF. Although the extremely high bank exposure is rather unnerving. Have been adding shares of the large-cap gold equities (“large-cap” is pretty relative these days given the decimation in the sector, but the sector has been amongst the worst performer on the TSX over the past few yeas).

After all, the banks are nearly 40% right now. Yes, they can probably grow more, but the rest of the stock market eventually needs to catch up.

Yeah right Mark. Tell that to a senior who has seen their investment income from GICs reduce their incomes significantly these past 8 years.

But the seniors haven’t had their principal eroded much by contemporary inflation (ie: 1-2%) compared to the usual 3-4% rate. The low rate/low income environment has also minimized taxes payable. Seniors tend to have very high marginal tax rates on account of the plethora of income tested benefits they receive.

An absolute disaster for seniors would be to have 10% rates of interest, but 8%/annum inflation and their typical income tax rate (let’s assume 30%). 10% – 8% = 2%, but subtract 30% of 10% for taxes, so that’s a real after tax return of -1%/annum.

ZIRP has also floated the boats of most assets that seniors own except for stocks, so they can sell assets at pretty high valuations with ease if they want to. ZIRP has probably served to act against the valuation of Canadian stocks. Last, but not least, ZIRP has significantly enabled governments’ ability to offer a plethora of very costly freebies to seniors including healthcare.

#78 CHRIS on 12.03.14 at 11:28 pm

Poloz says “the economy is stronger than expected…” Wonder what is he smoking or was his expectation just too low?

#79 crowdedelevatorfartz on 12.03.14 at 11:30 pm

Heard an interesting opinion on the falling price of oil yesterday.
The Saudi’s are pissed at Iran and Syria.
Russia is backing both Syria and Iran.
Russia, and Iran are major oil producers.
Saudi Arabia is the biggest boy on the ‘Oil” block soooooo, screw Russia , screw Iran, and inadvertantly screw Syria(a frightening exporter of jihadists).
For Saudi, its a win. America loves cheap oil. China, Japan, India, Indonesia, Canada ( gas is 118/liter in Vancouver today! Wooooo Hooooo)

Gotta love geoplolitical backstabbing on a macro economical scale.

#80 Big Gail on 12.03.14 at 11:34 pm

#10…..Cato…”We are on the road to serfdom folks – stick your head out the window and enjoy the breeze. Jefferson tried to warn us about paper money, and we’re getting what we deserve!”

Your post is so correct….there is no way the % rate is going up any time soon. The government(s) can’t afford to pay the debt they’ve borrowed. 18 trillion and counting in the US…..Canada doesn’t reveal the real debt as it is cleverly disguised on many levels…..but generally assumed to march in lock step at 10% of the US. That’s a real national debt of 1.8 trillion in Canada.

I rec everyone read Cato’s post…twice.

Cato is a tediously repetitious ideologue who thinks silly statements mature if you say them enough times. Of course rates will rise and sovereign debts will be serviced by growing economies. — Garth

#81 Cato the Elder on 12.03.14 at 11:37 pm

Re: #60 debunking

The article never said it was comparing to everything the government spends.

And you’re right – it’s omitting other MASSIVE obligations. All that shows is even at 1 Trillion dollars, it is HUGELY understating the extent of the problem.

My point being that the US is toast, and you’re reinforcing that point under the guise of undermining it.

The US is going to be a military dictatorship within the next 10 years, if Rand Paul doesn’t get elected. 50 million people on food stamps are going to tear the country apart once the world stops accepting US reserve dollars.

Now I actually feel sorry for you. — Garth

#82 devore on 12.03.14 at 11:38 pm

#65 Ronaldo

You are joking, right?

I don’t know how he figures that either. Surely a lengthy post is incoming.

Low rates are set and maintained by central banks around the world. The effect of their policies has been anything but low inflation. Sure, prices of imported trinkets are steady, but prices of all necessities that are priced domestically are rocking forward. This is a disaster for seniors and retirees, who buy few imported consumer goods, and spend their money on local services. Health care. Insurance. Transportation. Housing. Food. Electricity. Debt service. What does a senior’s CPI basket of goods look like? Not too many iPads and flat screen TVs I’d wager, although they might wish they were edible.

#83 crowdedelevatorfartz on 12.03.14 at 11:39 pm

@#20 North Burnaby
“Great news everybody! Canada’s new millionaire visa scheme ‘will only accept 50 applicants per year’ !!!!! – ++++++++++++++++++++++++++++++++++++
Geez, where will next years students for North Burnaby High come from?( LOVE the Viking statue)
The “People’s Republic of Burnaby” will have to open new shops in Brentwood Mall (after the 70 story condo is complete in 2020?) that have Telus english only stores?
I wont hold my breath

#84 Cato the Elder on 12.03.14 at 11:40 pm

Re: #74 Mark

Zero interest rate policy is simply a confiscation of wealth from savers (pensioners, fixed income, laborers etc.) to the elite in the banking system.

This is very simple, and yet most Canadians haven’t got a clue about what’s going on. All they know is their standard of living is rapidly declining and that they blame ‘capitalism’.

The grand conspiracy of all these banker elites is actually quite clever. First they undermine the foundations of an entire country through a century of money printing, then the population turns against their only saving grace: entrepreneurial capitalism. Great way to hide their actions, while also enhancing their power, all with the complete complicity of the masses.

I would join them if I could. I hate being a part of the rabble.

#85 JSS on 12.03.14 at 11:43 pm

Enbridge Announces 33% Dividend Increase.

Beautiful…

http://www.marketwired.com/press-release/enbridge-announces-33-dividend-increase-financial-restructuring-plans-revised-payout-tsx-enb-1973952.htm

#86 45north on 12.03.14 at 11:45 pm

Rob: Because of Western society’s debt saturation, the only way rates will go up is for a debt crisis event that destroys the world’s faith in endless government printing. A real sovereign debt crisis. Then the market will force it and destroy everything in its path.

but then you say: I don’t see that happening in the next 5 years

I have the feeling that in the US, sometime around 2005, 2006 someone pulled the plug. That is someone decided that the “mortgage backed securities” were a lot riskier than advertised.

https://www.youtube.com/watch?v=4xmckWVPRaI&list=RD4xmckWVPRaI#t=98

#87 Goldie on 12.03.14 at 11:47 pm

Falling oil prices will probably help Japan and much of Europe in the midterm; Possibly even enough to lift some of those nations out of recession if prices stay low for an extended period and consumer spending picks up as a result.

#88 someone on 12.03.14 at 11:50 pm

Calling Brad Lamb a “carpetbagger” is the funniest and most appropriate play on words I’ve read in long time — f_ckin’ eh! lol

#89 crowdedelevatorfartz on 12.03.14 at 11:56 pm

Garth
Im in a quandry. Am I a closet genius or does the thought of meeting me in an elevator…give you …pause?
Rarely comments about my comments from the wise Blog overlord……..

But Cato the Inedible gets “smack downs” almost on a daily basis?

I’m not sure if I feel good or bad about that.

Im drinking tonight so Im feeling a tad ‘Smoking Mannish” (if thats even a wordS)?

#90 Drill Baby Drill on 12.03.14 at 11:57 pm

Poloz in many ways is showing himself to be a rank amateur when it comes to economic prognostication. The economy is in bad shape in the East, West and now on the Prairies (within 6 mths) with no real uptick anywhere other than lower gasoline prices which really are not that low.

#91 RealistvsExtremist on 12.04.14 at 12:00 am

#64 Observer on 12.03.14 at 10:32 pm
Vancouver….it’s freezing here…-2 degrees c.
I can’t stand it…skin drying out…had to actually turn the rear window defroster on…slipping on ice in the parking lot….how do you easterners handle this all winter? You’re nuts.
+++++++++++++++++++++++++++++

They stay warmer knowing they are not paying a phony scam carbon tax like we are.

#92 will on 12.04.14 at 12:01 am

yup. and meanwhile the dividends keep pouring in. preferreds, reits, common. dec. 1, dec. 15, dec. 31. i like that. funny how that works. how so many people seem to prefer money flowing out of their pockets as opposed to into their pockets. very mysterious. and many of them probably think of themselves as conservative. haha.

#93 Vicpaul on 12.04.14 at 12:02 am

#62 Freedom
I noticed the hoof-to-the-cojones but, it was the shat seat that really boweled me over – it moved me!

# 69 JSS
I think Mark’s been pretty clear he thinks 0&G is at Black Thursday prices and he has advocated the index following Etf’s – diversified across regions (Can., U.S., International, Emerging with a sprinkle of Pref and REITs.
My thoughts? XL will be built (like it or not – flame if you must..) TRP, CVE, and PPL have paid me well quarterly/monthly for over seven years. A couple flyers? How about YRI (sorry Garth) and STP ( if it doesn’t go broke first).

#94 RealistvsExtremist on 12.04.14 at 12:03 am

The US is going to be a military dictatorship within the next 10 years, if Rand Paul doesn’t get elected. 50 million people on food stamps are going to tear the country apart once the world stops accepting US reserve dollars.
Now I actually feel sorry for you. — Garth
– See more at: http://www.greaterfool.ca/2014/12/03/extreme-2/comment-page-2/#comment-337650
++++++++++++++++++++++++++++++++

How is “Murica” not a military dictatorship now?

http://news.yahoo.com/why-do-ferguson-s-police-officers-look-like-soldiers-184517098.html

#95 Rexx Rock on 12.04.14 at 12:08 am

No one can predict the economy anymore.The fed low forever rates,stimulus and printing money.They allowed a crime to happen ie: housing fraud and commit another crime to fix it with taxpayer bailouts and the stealing of wealth from the savers,pensioners and fixed income people.Can you trust the government to tell you the truth,I’m sorry those days are over of believing all the lies and propaganda.

#96 Piccaso on 12.04.14 at 12:16 am

Cato you okay?

#97 Cato the Elder on 12.04.14 at 12:23 am

Re: Garth

Cato is a tediously repetitious ideologue who thinks silly statements mature if you say them enough times. Of course rates will rise and sovereign debts will be serviced by growing economies. — Garth

Now I actually feel sorry for you. — Garth

***********

Garth, I know you don’t agree with me. That’s fine. I’m curious, how an economy works from the ground up in your opinion?

The most succinct, logical, well rounded, and most importantly of all – SIMPLE – explanation of how economies work from the VERY BEGINNING is this book:

How an Economy Grows and Why it Crashes (Irwin Schiff)

https://www.youtube.com/watch?v=bFxvy9XyUtg

Anyone that understands the concepts illustrated in this book will understand economics more than any of the numerous PHd’s running our countries.

I challenge you Garth to debate the central tenets of this book that advocate free market capitalism.

The Austrian economists have been right in all their predictions so far, and Keynes has been horribly wrong. Given their track record, I suspect the Austrians will continue to be proven right into the future – and that is a very scary prospect given what they’re saying.

#98 Cato the Elder on 12.04.14 at 12:27 am

Re: #90 crowded

If printing money was a way to prosperity, none of us would have to work anymore.

I think in presenting my case for free market capitalism, I am challenging prior held views by many.

Garth strikes me as an intelligent man capable of critical thought, and while he may disagree, perhaps there is a side of him that is examining the validity of my statements.

#99 Nomad on 12.04.14 at 12:30 am

Financial Post: “Inflation, which is bank’s key policy target, “has risen by more than expected,” policymakers said Wednesday. But they blamed that mainly on temporary factors — such as the weaker Canadian dollar and higher telecommunications and meat prices.”

Temporary… lol. So optimistic, they are… any argument to justify keeping rates low. Bought more Genworth and HomeCapital.

I maintain my call that the rate will be below 3.5% at the start of 2016. I know… the bond market. Still.

#100 Spectacle on 12.04.14 at 12:42 am

Re:
#66 Happy Renting on 12.03.14 at 10:38 pm
#58 Spectacle on 12.03.14 at 10:02 pm

Congratulations to you and your wife!

You have to be 18 years old for the TFSA, but get the RESP application papers all filled out ……$2500 to contribute in the first year (to get the $500 govt matching……………….

……..Other than that, start reading Garth’s posts to your wife’s belly? Make some board books explaining concepts like the Rule of 90?
*******************
Amazing response ! Thought to self ; I’m going to make finger puppets for the babies nightly story. One Looking like Sir Garth, and others of blog dogs of note. Perhaps we could all write a book to my baby (really for adults too) . Appreciate your initial input, “Happy Renting” thnx.

Ps. I’m going to put the screenshot of your reply to me into our baby keepsake book! ….and my millions I owe to a mysterious “Happy Renting” some 25 years ago…..

#101 Capt. Obvious on 12.04.14 at 12:45 am

I heard a Conservative ad on the radio today that sounded suspiciously like a campaign ad (i.e. Trudeau would raise taxes… but wouldn’t he need to win a, um, election to do that?). I think they’re really worried they’re going to be torpedoed by housing if they wait for fall 2015 and we’re going to polls in the spring.

#102 JimH on 12.04.14 at 12:46 am

#52 Mark
What a bubble-headed puddle of totally unsubstantiated and 100% speculative claptrap! Wishful thinking is a most crappy investment strategy. Rookie mumbo-jumbo!

Now, I know you’re a fraud!

#103 Snowboid on 12.04.14 at 12:48 am

#68 Westcdn on 12.03.14 at 10:41 pm…

“I was down in Tucson last week – I was surprised their everyday prices were the same as mine”

Either prices have come down in Alberta, or gone up in Tucson – but I can tell you the average ‘everyday’ prices including exchange here in Phoenix are still 35% less than BC.

Funny, I see a big difference between Alberta and Arizona – having spent the better part of seventeen years growing up in Calgary and my early working career in Tucson.

Summers are hot, I will give you that – but nothing compared to walking around for six months like an icicle.

The last two trips we made to Calgary in May it snowed – final trip was too much driving from Calgary to Edmonton in mid-May in a blizzard.

We said our goodbyes to relatives, never will we return. They do take advantage of our Phoenix winter home quite regularly however – so it’s not like we don’t see them anymore!

#104 Entrepreneur on 12.04.14 at 1:04 am

I think online shopping saved the economy, the government’s economy. Online shopping kills small businessess in your community. Some online maybe, but too much, you taking the money away.

The HST was suppose to create jobs in Ontario. That did not work as well the premiers said it would. Thank goodness BC voted no to it. A small business will not pass the so-called savings to the customers. A old friend in the furnace business said “Hell no, I am keeping that money.”

Looks like the guy in the picture had an accident in his pants. Is this coming soon to the home buyers?

#105 Longterm on 12.04.14 at 1:26 am

#58 Spectacle on 12.03.14 at 10:02 pm

Get and read and implement the portfolio strategy in The Child Millionaire by Rob West

My daughter’s portfolio is almost 4 years old now [as is she]. All universal child benefit money goes straight into it and as such there is no attribution of investment income to the parents. Look into setting up a trading account ‘in trust’ – i.e. an informal trust at a broker or go the full blown and expensive trust route if you have the cash.

Compounding over the huge timeframe all but assures that she’ll be set for life.

Put cash gifts from relatives into the RESP. This way you avoid all attribution to parents and your kid won’t pay any tax.

#106 Lillooet, BC on 12.04.14 at 1:27 am

The price of oil can rise just as quickly as it falls.

I’ve seen oil rise $3 a barrel per day for many days in a row, more than $10 in a week. There’s just too much consumption for it to stay low long.

#107 JimH on 12.04.14 at 1:30 am

Oil and natural resources/basic materials…

This time is different;

2008 can be summarized as a demand crunch.
2014 ff looks like a supply crunch.

Low demand can be manipulated far more easily and readily than over-supply.

Resource-based economies are generally slow to adapt to fundamental change. The Loonie is in for a very difficult up-hill struggle. Value-added Canadian manufacturers will do well. The resource industries not so much.

#108 tri state pat on 12.04.14 at 1:31 am

Work for a 10+ billion a year company making heavy machinery and equipment all over the world. Got the news today that 2015 will be different than the last few years. Tiens ta tuque mon coco…

#109 OffshoreObserver on 12.04.14 at 2:11 am

More ammunition supporting GT’s thesis that the U.S. economy is on the mend and resources beginning to get better utilized.

Ergo, upward pressure, ultimately, on interest rates.

[And, I might add, it used to be said that when the US got a cold, Canada froze. The opposite is also true, so I can’t see how rising US rates cannot affect CAD ones.]

http://www.csmonitor.com/Business/Latest-News-Wires/2014/1203/ADP-US-employers-added-208-000-jobs-in-November-video

#110 juno on 12.04.14 at 4:40 am

#3 Mark on 12.03.14 at 7:06 pm

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

What planet do you come from. I only dream rates will go lower. Therefore my hedge on the Canadian dollar will be a premium.

If USA raises rate we will follow within a 3 months.
Debt is killing us, and the feds are handcuffed. But if the canadian dollar goes lower, its only hurts the poor which will face high prices across the board.

If Canadian substains, then we have a greece on our hands. Golly gee wasn t that what happened to Greece.

You can borrow Greece dollars for next to nothing to buy German marks. (a growing economy vs a dead economy for the same price) (US is growing Canada is slow) I can totally see the Hedge fund managers short Canada and Buy US.

Oh by the way, the government has to fund its money eating machine. If they cannot sell bonds where are they going to get funds.

(Remember what happened in greece, I believe their funds got back pennies for each dollar)

#111 Scott Smith on 12.04.14 at 7:50 am

To #28 Takla, don’t hold your breath about rates rising that much.

The most GIC’s at the longer term part is only around 3.05% to 3.10%, 5 years.

Even if we see rates rise by the Bank of Canada and the bond market as well pushing up rates, we will not see more than a 4.00% to 4.25% 5 year GIC in coming 3 to 5 years. Savings account rates will not be more than 2.6% to 2.85% as well.

I agree thought that debt reduction and debt elimination is necessary for savings, investments to build and grow over a person’s lifetime.

#112 Jimm Jammer on 12.04.14 at 9:03 am

First blood ….CRA intimidates the consumer.

http://www.bnn.ca/News/2014/12/4/Who-gets-audited-Advisers-demand-clarity-from-CRA-on-TFSA-businesses-.aspx

They already have a forensic analysis of what percent of people will be afraid of CRA intimidating them and will stay out of the TFSA vehicle.

Next….audits will be made very public in the media. Little guys like hairdressers and farmers will be raked over the coals for effect. TFSA is headed for the crapper…just like income trusts.

Total nonsense. — Garth

#113 pbrasseur on 12.04.14 at 9:12 am

Cato the Elder – A 1% increase would mean over 180 BILLION DOLLARS in additional interest the US would have to pay on it’s debt

This is a totally ridiculus comment, have you even checked the US budget?

Servicing the US federal debt cost 221G in 2013 and the current deficit is melting fast, a 1% interest rate increase would be quite harmless in fact, even beneficial in many other aspects.

http://en.wikipedia.org/wiki/United_States_federal_budget#mediaviewer/File:U.S._Federal_Spending_-_FY_2011.png

Relax. He makes his facts up. It’s faster. — Garth

#114 crowdedelevatorfartz on 12.04.14 at 9:22 am

@#99 Cato the Ewok
“is examining the validity of my statements.’
++++++++++++++++++++++++++++++++++++

nah, i think its more an automatic response to the absurdity of the situation.

#115 TurnerNation on 12.04.14 at 9:26 am

There is no “Canadian Housing Market”. Only a banker slave colony being fed cheap debt.

#116 Tony on 12.04.14 at 9:28 am

Re: #114 pbrasseur on 12.04.14 at 9:12 am

The U.S. debt just reached 18 trillion dollars just recently. The debt to GDP ratio is over 100 percent and we know some of that GDP is fabricated data.

No we don’t. — Garth

#117 fancy_pants on 12.04.14 at 9:46 am

Rates have been artificially low for six years. The result is record debt. This regime will end next year. — Garth

Peter only cried wolf 3 times. This is year 5 for you. Hmmm. Although, I agree, one of these years the wolf will come to feed. maybe when the greenback gets bucked as the world reserve currency, then SHTF, although still uncharted as to what will go down

#118 miketheengineer on 12.04.14 at 10:36 am

Garth et al:

Check this out:

“The primary fat type found in coconut oil, almost immediately improved cognitive function in older adults with memory disorders”
The study involved 20 subjects with Alzheimer’s disease.

Here is the link:

http://beforeitsnews.com/alternative/2014/12/one-dose-of-coconut-oil-3072098.html

Worth a try if you have anyone who is suffering from this terrible condition.

P.S. The don’t say weather they used organic, cold pressed or what for the coconut oil. Most grocery stores now carry several brands of coconut oil, making it easier to purchase.

#119 Londoner on 12.04.14 at 10:39 am

“To Bay Street economists this sure sounds like stage-setting for a rate hike.”

Which Bay Street economists are you talking to? The ones I hear from are saying GDP will be hit by lower capital investment in O&G, incomes going down, inflation going down, lower bond yields and TSX coming under pressure. Doesn’t exactly sound like a setting for rate hikes.

#120 Ronaldo on 12.04.14 at 10:50 am

#83 Devore – You hit it on the nose. Right on, good post.

#121 Funny that on 12.04.14 at 11:06 am

DELETED

#122 Cowpoke on 12.04.14 at 11:21 am

Yup! Sounds about right.

#123 IM in C on 12.04.14 at 11:24 am

Garth
According to Susan Pigg things are just rosy in 416
http://www.thestar.com/business/2014/12/04/home_prices_in_gta_surging_as_yearly_sales_approach_record.html

Advertorial. That her business. – Garth

#124 Debunking Cato, Vol.1 Issue 7 on 12.04.14 at 11:51 am

#98 Cato the Elder on 12.04.14 at 12:23 am

“How an Economy Grows and Why it Crashes (Irwin Schiff)”

See Irwin refuse to pay his taxes.
See Irwin go to jail.
See Irwin get out.
See Irwin do it again, and help others do it.
See Irwin go to jail again.
Sad Irwin, 86 years old and still in jail.
Three meals and a roof over his head for free.
This is the free rider problem.

See Irwin’s son Peter.
Peter wants to help people not pay taxes, too.
Peter does not want to go to jail.
Peter builds a money business.
He helps people make their money smaller, so they pay less tax.
His funds lag their benchmarks, a lot.
This is malinvestment.

See Cato type!
Type, Cato! Type!
But don’t get your economics advice from jailbirds.
And not from people whose funds are all rated 1 Star (that’s bad) by Morningstar.

#125 Piccaso on 12.04.14 at 11:54 am

If you’ve been invested in the pit the last 5 years, you’ve lost 50%

#126 Cato the Elder on 12.04.14 at 12:24 pm

Re: #114

A simple examination of this webpage would suggest the US is circling the drain:

http://www.usdebtclock.org/

18 TRILLION dollar debt
115 TRILLION DOLLARS of unfunded liabilities
267 BILLION interest on debt (at today’s 0% rates)

How is this going to be paid for? Federal revenues estimated at 3 trillion. Not even close to paying any of it off.

Now you might be saying ‘267 billion isn’t a whole lot Cato, you’re silly!’ – you’re right – at 0% interest rates.

But the US now has 8 TRILLION dollars of that debt in short-term securities (and they’re adding 1 trillion every year). They roll it over EACH YEAR at present day interest rates, but they no longer have big international buyers for their long term debt. That means interest rate changes will impact the debt IMMEDIATELY.

So if rates go up 1%, that’s 80 billion a year in additional interest. At historical levels of around 5%, that’s 400 billion. ON INTEREST. Not even including paying down the principle!

http://davidstockmanscontracorner.com/uncle-sams-8-trillion-annual-debt-churn-why-washington-is-pertrified-of-honest-interest-rates/

The biggest problem in the US is the politicians ARE GOING TO DO THE WRONG THING when the crisis comes. They’re going to try to cater to the people, instead of giving them the bitter medicine that is needed.

Why? More than half the population are now dependent on the US taxpayer dole. They won’t accept the reality check that comes when it’s time for them to get back to work. They’ve spent years, decades, perhaps even their entire lives on government welfare. They will NOT willingly reintegrate and become productive citizens again – they’re going to riot just like any self-entitled brat would.

#127 Mister Obvious on 12.04.14 at 12:32 pm

#105 Entrepreneur

“The HST was suppose to create jobs in Ontario. That did not work as well the premiers said it would. Thank goodness BC voted no to it.”
—————————-

To reiterate some history for those not from BC:

It wasn’t quite that simple. Former Social Credit premiere Bill Vanderzalm headed a long, hard grass roots campaign to force an after-the-fact referendum on the tax using recall legislation laws.

It was the same referendum that should have been conducted by the liberals before blindsiding the province with a tax they promised not into implement.

Had there been a referendum before the fact we might have HST in effect in BC today. Most people did not object to ‘harmonizing’ the provincial and federal taxes. Rather, they objected to the underhanded way it was brought in and false claims of revenue neutrality. It was most certainly a tax increase that impacted mostly the poor.

The killing of the HST through referendum was not a rejection of tax efficiency but an unexpectedly strong backlash against a colossal public relations blunder.

The premiere responsible, Gordon Campbell, is now universally despised in BC. He currently holds a cushy job in London England thanks to Stephen Harper who, for some reason, did not let Campbell perish under a bus as he usually does with those in whom he is disappointed.

#128 Victor V on 12.04.14 at 12:36 pm

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/canadian-oil-sands-slashes-dividend-42/article21946705/

Canadian Oil Sands Ltd. is cutting its quarterly dividend by 42 per cent as it aims to protect its balance sheet in a gloomy oil price environment.

The Calgary-based firm, whose main asset is a 37 per cent stake in the massive Syncrude oil sands mine north of Fort McMurray, Alta., said it plans to reduce its dividend to 20 cents from 35 cents when it reports its fourth-quarter earnings in late January.

Company shares dropped about 16 per cent in early trade in Toronto.

#129 Cato the Elder on 12.04.14 at 12:37 pm

Re: #125 debunking

Irwin is in jail for philosophical reasons – not because he’s ‘greedy’ and didn’t want to pay his taxes for personal gain.

The republic of the United States of America was founded on the principle of limited government. There were no income taxes for almost 150 years. There were no taxes of almost any kind for 150 years.

He is right that you shouldn’t have to pay income taxes. It’s unconstitutional.

Unfortunately, you can’t argue with a bureaucratic state hellbent on treating it’s citizens like revenue producing assets that serve it.

The US has become a pseudo-fascist state. It is a real tragedy given their founding principles, but we must accept it for what it has become.

I pity you for your constant denial of reality. You and your ilk were probably the types that would have laughed at the Wright brothers for leaving their profitable bike repair shop to experiment with flight.

‘You’re so silly, there is no evidence of anyone ever flying before! Stop before you hurt yourself!’

All the while not realizing that all it takes is 1 time for every misheld belief in the world to be disproven. I like keeping an open mind. My mind is never closed to possibilities.

And his son Peter has been right on every call he’s made. None of the other ‘economists’ that our media frequently refers to said anything about the financial crisis in 2007. NONE. Why? They’re Keynesians and they don’t understand the consequences of their actions. They think wealth can come from a printing press and debt has no consequences.

The US has been able to bully the world since world war 2 into accepting it’s currency. That power is now being severely undermined. They are no longer the largest economy in the world. All they have left is their military might, which would explain the huge increase in military invasions in recent years.

There is no reason this will continue indefinitely. The world now has other options – different markets for goods and services like China.

Anyone that does not plan accordingly is foolish.

#130 Dual Citizen In Canada on 12.04.14 at 12:37 pm

If the TFSA was meant as a retirement plan, how do I get Uncle Sam to keep his paws off my gains in Canada? Let’s get it added to the tax treaty, eh? So bump it up to $10Gs annual contribution in 2016 and add it as a tax exemption for all us Dual Citizens.

#131 Piccaso on 12.04.14 at 12:45 pm

#126 Piccaso

Actually if you’ve been invested in Canadian Natural Resources in the last 5 months, you’ve lost 50%

#132 bdy sktrn on 12.04.14 at 12:47 pm

What a bubble-headed puddle of totally unsubstantiated and 100% speculative claptrap! Wishful thinking is a most crappy investment strategy. Rookie mumbo-jumbo!
—————————————-
regardless of whether one agrees or disagrees with the original statement , that is one ZINGER of a reply!

#133 bdy sktrn on 12.04.14 at 12:53 pm

Put cash gifts from relatives into the RESP. This way you avoid all attribution to parents and your kid won’t pay any tax.
—————————–
???
does it matter where the cash in an resp came from?

cash gifts don’t come with receipts.

#134 SWL1976 on 12.04.14 at 12:57 pm

I just want to add my 2 cents for what they are worth…

For anyone who has the stomach to research how far along the road to serfdom and totalitarian police state North America really is… Well its not pretty, much much closer to complete lock down than to a “free democratic” society. Just look around. I have researched this extensively for 15 years, and no I don’t have links and “peer reviewed” studies, but one would be a complete fool to dismiss the warnings. There is a myriad of information out there for those with the stomach to research it.

People who have been blowing the whistle and sounding alarms are not “crazy conspiracy theorist” these people are sane rational people, for the most part, trying to warn the masses before its too late

Garth, think about how you and your blog were chirped about calling real estate like it is. What 6 years ago now? Took way longer than everyone though, but sure enough the day of reckoning for most is very near.

The point I am trying to make is the plan that was set in place over 100 years ago that started with the Federal Reserve is nearing completion and the warning signs are obvious to those who have been looking. The day of reckoning is almost here, having a plan would not be entirely foolish

The US is not going to service its debt, there will be another too big to fail moment, the Fed will need a bailout and who is big enough to bail them out?

That is the question folks?

They create the calamity than come along and be the saviors of the calamity. BUT your gonna have to play by the new rules. Game. Set. Match.

Go ahead and chirp me, call me crazy, been there and heard it all before, I got thick skin.

Thanks Garth for the blog, the insight, and letting us all share our thoughts here, and thanks to all the blog dogs out there who contribute as well

#135 OffshoreObserver on 12.04.14 at 12:59 pm

I am sick and tired of my tax dollars paying for civil servants, politicians and their pensions!

These people have no “skin in the game,” as it were.

Having had to take ever so many Rolaids to endure our tax dollar paid for advertorials…CMHC and EDC coaguli.

Now, this: the cause of the whole inflated Canadian Housing Bubble preaches sweetness and light…

And not a one of them suffers one iota if they are wrong.

http://www.thestar.com/business/real_estate/2014/11/24/canadian_housing_market_not_at_major_risk_cmhc.html

#136 bdy sktrn on 12.04.14 at 1:10 pm

#114 pbrasseur on 12.04.14 at 9:12 am

“Servicing the US federal debt cost 221G in 2013” ??????

from your link

Major categories of FY 2013 spending included: Social Security ($803B or 23% of spending), Medicare & Medicaid ($760B or 22%), Defense Department ($608B or 18%), and interest($259B or 7%).

259Billion is 1.1million times your number.

he may be off by a factor of 20.

let’s not use made up numbers to refute other made up ones.

#137 SWL1976 on 12.04.14 at 1:10 pm

If the US was serious about servicing their debt, conducting an audit of the Federal Reserve would be a Nobel start

#138 bdy sktrn on 12.04.14 at 1:12 pm

correction.

i thought cato said 1.8t

at 180 billion he is quite close to the truth

#139 bdy sktrn on 12.04.14 at 1:21 pm

According to Susan Pigg things are just rosy in 416 http://www.thestar.com/business/2014/12/04/home_prices_in_gta_surging_as_yearly_sales_approach_record.html – See more at: http://www.greaterfool.ca/2014/12/03/extreme-2/comment-page-3/#comment-337699
—————————-
whats with the auto link??

and from the article, prices WAY up and this…” it appears likely sales for all of 2014 – which hit 88,462 transactions as of the end of November – will surpass the previous sales record of some 93,200 homes, set in 2007.”

does price still follow volume?

supply of detached shrinking by the day (urban) and demand only grows

#140 Panhead on 12.04.14 at 1:30 pm

Then I can finally focus on bad photos and double-entendres. — Garth

______________________________________________

Holy Cow, I don’t know what a single entendre is. Always willing to learn though …

#141 chapter 9 on 12.04.14 at 1:43 pm

#119 Miketheengineer
Coconut oil has to be organic,cold pressed and hexane free. Some manufactures use this chemical/solvent to extract the oil. Just one application of hexane is to make glue for making boots not exactly what one should be eating for brain health.

#142 glenn on 12.04.14 at 1:58 pm

“The catalyst is oil”

Oil price is the canary in the coal mine which will prove unprecedented money printing since 2008 did nothing to revive the global economy.

Still think interest rates are going up?

#143 jess on 12.04.14 at 2:41 pm

Property investors in Islington who leave homes empty could face jail
London council proposes action after revealing 30% of homes built in last six years have nobody on the electoral register

Robert Booth
The Guardian, Thursday 4 December 2014 17.15

http://www.theguardian.com/business/2014/dec/04/property-investors-islington-london-homes-empty-jail

tax abatements for lux condos
towers taking so high they are starting to block the sun out of central park!
http://billmoyers.com/episode/full-show-long-dark-shadows-plutocracy/

=

tap the gucci shoes and repeat there’s no place like home…

“I propose a full amnesty for capital returning to Russia,” Putin said. “… This means that if people legalise their resources, they get a guarantee that they won’t be bothered … won’t be asked about the sources … there will be no questions from the tax and law enforcement bodies to them. This should be done and done once.”

#144 Oil4Sale on 12.04.14 at 3:04 pm

Just had lunch with an O&G engineer yesterday who said his Calgary engineering firm is already “de-staffing” due to oil projects being put on hold.

*“Calgary is in a classic over-sold condition…buyers are purchasing their future home without having their existing home sold under contract,” Kay warns.*

Both units in the 6 year old duplex beside our home, each side sold for about $730k, still remains unoccupied after the “sold” stickers went up months ago. Pleased to see my speculation on the vacancy is likely correct.

Immediately beside the duplex is another brand new duplex going for over $1,100,000, with a sold sticker out front of one of the units that has been there for 3 months. The other unit remains unsold.

The neighbourhood is nice, but not $1m for half-a-duplex nice!

#145 TheLeastInterestingManInThe World (Stay Delusional My Friends - You know which of you) on 12.04.14 at 3:05 pm

Mannish was good enough for Howli Wolf.

#146 TheLeastInterestingManInThe World (Stay Delusional My Friends - You know which of you) on 12.04.14 at 3:05 pm

Howling Wolf. Don’t know how that happened.

#147 Mike S on 12.04.14 at 3:14 pm

“but it is fairly obvious that the risk profile of consumers is weakening”

Today’s CIBC report shows growth in the uninsured mortgages, while no growth (even a slight decline) in the insured (vs 2013)

For the uninsured mortgages/HELOCs the LTV is around 70%

What happen if the RE correction materialize (10%-20% + further negative outlook, as per Garth). Suddenly the LTV of these might go to above 80%. Does that mean that banks will demand higher rates and/or deny renewing certain mortgages?

Also, in absence of relaxing of CMHC rules (seems unlikely now) is CIBC has the most downside risk, among all Canadian banks?

#148 Arfmooocat on 12.04.14 at 3:40 pm

Get your money out of Canadian equities.

They’re falling faster than the speed of light.

#149 Mark on 12.04.14 at 3:53 pm

“Today’s CIBC report shows growth in the uninsured mortgages, while no growth (even a slight decline) in the insured (vs 2013) “

The CMHC subprime limit was hit last year effectively, so there can’t be any meaningful growth in the insured category.

For the uninsured mortgages/HELOCs the LTV is around 70% What happen if the RE correction materialize (10%-20% + further negative outlook, as per Garth).

Well presumably, CIBC (and all the other banks) were extremely selective as to who those un-insured loans went out to. Think doctors, dentists, nurses, pharmacists, etc. Also, the cities in which the uninsured loans were written are likely to be less bubbly than average (ie: RE isn’t likely to fall much in Fredericton, versus that of Vancouver!!). Hence, LTV isn’t necessarily the complete picture, even in a cyclical downturn.

Of course, as equity recedes, the amount of capital the banks will have to devote, for regulatory purposes, to those loans will rise. Banks themselves may face increased borrowing costs. Hence, the rates are likely to rise, independent of any BoC policy action.


Suddenly the LTV of these might go to above 80%. Does that mean that banks will demand higher rates and/or deny renewing certain mortgages?

Yes. Some borrowers at the margin will certainly find their renewal circumstances to be increasingly dire. Coincident with a loss in equity. That’s what makes investing in interest rate correlated assets so terrible at low interest rates. The “tailwind” that helped prices go up in the falling rate environment, absolutely destroys the investor in a rising rate environment.


Also, in absence of relaxing of CMHC rules (seems unlikely now) is CIBC has the most downside risk, among all Canadian banks?

I’d say the Credit Union sector would take that title, with the end-game being that failed credit unions are ripe for acquisition by the Schedule 1 Bank Act banks. A scenario where the government(s) strong-arm the (Sched 1) banks to take over the CU’s at a loss to avoid loss of depositors’ money is one of a number of “political risk” scenarios that should be considered. As is the “political risk” scenario of a future government threatening to reduce CMHC insurance claims payout. Higher perceived risk in the banking sector will increase the cost of capital to it, and hence, drive up retail lending rates, again, independent of BoC policy action.

#150 Mike S on 12.04.14 at 4:06 pm

“Get your money out of Canadian equities.

They’re falling faster than the speed of light.”

Still above levels of mid October.
But didn’t you hear? People don’t have any money in equities anymore. Everything is invested in houses

#151 Arfmooocat on 12.04.14 at 4:08 pm

Better trash the Canadian stock markets tonight Garth

I don’t want to read about some 25 year old and her TFSA

Cheers

Investors ruled by emotion and short-term moves usually lose. Like the 25-year-olds. — Garth

#152 calgaryPhantom on 12.04.14 at 4:15 pm

Get your money out of Canadian equities.
They’re falling faster than the speed of light.
—————————————————————-

Shouldn’t it be the other way round?

#153 Entrepreneur on 12.04.14 at 4:20 pm

#128 Mister Obvious

The harmonizing of both federal and provincial taxes to the hst brought in more taxes on certain items that were not taxed before and doubt about more jobs, more money for the consumer, less taxes for the big corporations.

As the way it was approached to B.C. was through Gordon Campbell at election time saying that he would not bring it in and just two days after his winning, he didn’t care what we thought.

We had to process all of this, figure what would be the best for us taxpapers. The hst had disadvantages that did not warrant it to pass. Ontario ex-premier said we will get all the benefits which, right now, does not seem the case.

The hst is good for paperwork but make it work for the consumer.

#154 Nomad on 12.04.14 at 4:25 pm

TD down 4.5%.

Norman Levine on BNN: “TD expenses got out of line.”

It looks like the easy times are over. Will TD do layoffs?
Afterall, that’s what Scotia did. Financials being so huge in downtown Toronto, I could believe that we’ll get some condo price drops.

If I was a new grad in Finance and just bought to live close to my employer, I’d sell.

#155 Doug in London on 12.04.14 at 4:28 pm

@Mr. Frugal, post #32:
My thoughts exactly. I’m not even going to try to make any exact psychic predictions about the price of oil (my crystal ball is made of black ebony and has the name Brunswick on it) but it is most likely oversold. The present low price will 1) eventually slow or stop development of new oil production and 2) cause demand to steadily increase. Oil may not go back up to $100/barrel anytime soon, but it probably won’t stay at the present price of $67/barrel for long either. It’s time to buy more XEG, I scooped up more today at $14. It’s, as you say, a much better deal than buying Canadian banks.

I’m having another flashback to 1998 (when oil was cheap) again. As I drive in my PETROL/GASOLINE fueled car later today, I’ll be listening to that first and only album by The Verve. Maybe I’ll request local station FM96, London’s Best Rock, to play Space Lord by Monster Magnet. Great nostalgic stuff.

#156 Doug in London on 12.04.14 at 4:35 pm

@Observer, post #64:
For those who live outside the overpriced GTA, with the money we save on housing we go on winter getaways. Last year I spent 6 weeks in Australia, where it was summertime and hot. During the time we’re here, we adapt. If you watch Autoshop, a program on CP24 TV, the host Mohammed Bouchama recommends using snow tires, again paid for by the money we save on housing.

#157 Cato the Elder on 12.04.14 at 4:38 pm

…and this is how the western banking cartel takes over a country:

http://www.zerohedge.com/news/2014-12-04/fight-breaks-out-parliament-when-ukraine-learns-it-has-quietly-become-newest-us-stat

They just ‘appointed’ 3 new representatives to the Ukrainian parliament. That’s right folks – the people did not get to vote for this! It was determined by the upper echelons of power in back room dealings.

The European Union is a pseudo-dictatorship whereby the elected members don’t get to propose legislation or repeal it! All that they get to do is vote on it, but it’s all created by the unelected European commission! All the European nation states now have over 50% of their laws determined by this body – they are not democracies any longer.

This is our future folks. It’s going to be coming here soon – and we best prepare to understand the signs when it does.

#158 Doug in London on 12.04.14 at 4:42 pm

@calgaryPhantom, post #154:
Makes sense to me. As I’ve said in previous comments, investors should behave like a governor that gives the engine more fuel (cheaper fuel at that lately) when the speed drops below the desired speed setting. The more the speed drops, the more it opens the throttle to deliver more fuel. It’s all so ridiculously simple. Excuse me now, while I sign off and check the latest price of XEG before the trading day finishes.

#159 Arfmooocat on 12.04.14 at 5:05 pm

Investors ruled by emotion and short-term moves usually lose. Like the 25-year-olds. — Garth

Canadian markets are a one trick pony – resource

They have lost a lot and will lose more

#160 Mike T. on 12.04.14 at 5:12 pm

TurnerNation

‘A weaker loonie and rising wages for its employees are making it harder for Dollarama to do business, the company said in releasing its quarterly results on Thursday.’

What should I be doing next week oh wise one?

Good call, you even beat the ‘experts’.

#161 villagemoron on 12.04.14 at 5:18 pm

http://www.bloombergview.com/articles/2014-12-04/back-to-inflated-realestate-appraisals

#162 Mike S on 12.04.14 at 5:20 pm

“Well presumably, CIBC (and all the other banks) were extremely selective as to who those un-insured loans went out to. Think doctors, dentists, nurses, pharmacists, etc. Also, the cities in which the uninsured loans were written are likely to be less bubbly than average”

Are you sure?
Think GTA couple of high income earners, with average/low job security (aren’t doctors, and not in the government), year is 2014.

They are approved for uninsured mortgage (loan > 1M so no CMHC). To service the debt they both are required to keep the salaries at all times.

Assuming successful sale of the previous house (asking is above market), the LTV is going to be around 75%. Also have 0 invested anywhere else (no TFSA, RSP went for first home buyers plan, no GIC, no stocks …)

Is it prudent lending by the bank?

#163 TurnerNation on 12.04.14 at 5:26 pm

Hit the exits boys. TLT.US to 130 before this is over.

#164 espressobob on 12.04.14 at 5:47 pm

Do I sense a whiff of fear in the herd? Nothing is sweeter than panic!

#165 Mike S on 12.04.14 at 5:57 pm

Is it winter yet?

Just saw the asking price for a detached house going down by about 3%. still too high in my opinion, but just decreasing another 3% (As many houses slightly below asking – at least for summer/autumn season) + realtor fees, and we are looking at 10% loss instead of 7% gain (claimed by TREB) from a year ago. All this assuming it is actually going to sell now

#166 papawhiskeytango on 12.04.14 at 6:06 pm

I was under the impression ‘over sold’ was a positive indicator for buyers. am I now supposed to wait for things to be ‘over bought’ to buy? huh?

#167 Robert Agnew on 12.04.14 at 6:18 pm

With Steve the economist Harper and Joe the undertaker Oliver running things all is well in Reformville.

I can’t wait for Christmas!

#168 Apostle on 12.04.14 at 6:59 pm

Garth needs to chill out a bit. He is becoming more and more arrogant in his comments and has little respect for dissenting opinions.

Dissenting is fine. Demented is something else. — Garth

#169 Marcus on 12.04.14 at 7:37 pm

http://www.zerohedge.com/news/2014-12-04/here-oils-next-leg-down

Sub $50 per barrel oil is here.

#170 Victoria Real Estate Update on 12.04.14 at 8:29 pm

. . . . . . . . . . . . .House Prices. . . . . . . . . . . . . . . .
. . . . . . . .(Compared To October 2013). . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+14%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x . . .
+13%. . . . . . . . . . . . . . . . . . . . . . . . . . . x. . . . . .
+12%. . . . . . . . . . . . . . . . . . . . . . x. .x. . . . . . . . .
+11% . . . . . . . . . . . . . . . . . . . x. . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 9%. . . . . . . . . . . . . . . . . . x . . . . . . . . . . . . . . .
+ 8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 7%. . . . . . . . . . . . . . . .x . . . . . . . . . . . . . . . . .
+ 6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . x . . . . . . . . . . . . . . . . . . . .
+ 4% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 3% . . . . . . . . . . .x. . . . . . . . . . . . . . . . . . . . . . .
+ 2%. . . . . . . . . x . . . . . . . . . . . . . . . . . . . . . . . .
+ 1%. . . . . . . x . . . . . . . . . . . . . . . . . . . . . . . . . .
..0%. . x*. x*. *. . . . . . . . . . . . . . . . . . . . . . . . . .
– 1% . . . . . . . . . *. . . . . . . . . . . . . . . . . . . . . . . .
– 2% . . . . . . . . . . . .* . *. . . . *. .*. .*. .*. . . . . . .
– 3%. . . . . . . . . . . . . . . . . *. . . . . . . . . . . * . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . .
—————————————————————————————
. . . . .Oct. . . . . Jan. . . . . April. . . . . July. . . . . Oct.
. . . . 2013. . . . 2014. . . . .2014. . . . .2014. . . . 2014.

#171 Doug in London on 12.05.14 at 4:42 pm

@Marcus, post #171:
You have one guess what that’s going to do to high cost producers, such as those in the Bakken Shale, and what effect that ultimately will have on the price of oil in the long run.