Down with stuff

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The stock market south of us has hit an all-time record high more than 30 times so far in 2014. Almost a third of those days came in the last five weeks. And it’s no big coincidence that the price of oil was sliding during most of that time.

Gluskin Sheff guru David Rosenberg estimates cheaper oil will give a $550 billion boost to the world economy. That’s even after the oil collapse kicks the crap out of some Albertan oil sands producers, Russia, Venezuela, Brazil and anyone planning on drilling in the Arctic. Of course, the biggest benefit will come where people use the most energy, which is the apex of consumer capitalism, the USA.

I mention this for two reasons. First, the crash in oil will ignite the States and you might want to get in on it. I’ve suggested here for some time that you underweight Canada and overweight the US in your asset allocation. It’s been a good strategy for the last two years that this pathetic blog has been recommending it. Even better now. Oil’s not going to rebound quickly since the drop is structural – growing supply, waning demand – and meanwhile the Yanks continue to advance.

(By the way, the comment section on the weekend became a drop-in centre for all of the America-hating, conspiratorial, anti-establishment, bank-dissing, anarchist, libertarian, bullion-licking, Occupy nutjobs who weren’t busy stockpiling pallets of bumwad from Costco. Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea and the US heads for social and economic collapse. Sad.)

Second, it’s more than oil. It’s about stuff. It’s devaluing. Bad enough that Murray Edwards, chairman of Canadian Natural Resource, says oil could tumble another 50%, right down to thirty bucks, but we have a widespread movement of capital from real assets to financial ones. Copper is nearing a five-year low. Gold has lost almost 40% of its value in three years. Since 2009, coal has plunged by half. Silver is a complete disaster – off almost 70% since 2011.

Outside of Canada and a few other minor nations, real estate is wobbly. Europe nears deflation, Japan is in recession. Russia soon will be. China’s housing market is falling in 100 of its top 100 cities. This is a world in which people are making money holding liquid and financial assets, and in which there’s a lot of hurt associated with things you need to shovel, burn, store or heat.

Check this out, for example:

GOLD-S&P

Not hard to see in the chart above where money’s been headed for the past five years. While gold has been turtling, the US equity market has soared. This has not been the direct result of government stimulus, currency devaluation, central bank diddling, monetary manipulation or a giant plot against precious metals. It’s because, from the ashes of the GFC, the American economy has shown remarkable resilience, adaptation and strength. The Fed’s actions worked. Now capital is streaming out of commodities, where it fled, hunkered and prospered for a while, into financial assets in anticipation of the next big story – global recovery. It will be uneven and patchy, but it’s coming nonetheless. Along the way there will be hiccups, like the kind caused by default on some US energy industry junk bonds (16% of that market), but the overall direction is clear.

Where does this leave million-dollar beater houses in Vancouver and Toronto? (Calgary’s already a write-off.)

Well, you figure it out. The Canadian resource sector under duress. Chinese real estate values in decline. A higher US dollar. Increases in American interest rates in 2015. Alberta’s boom a bust. There may be a case for demand areas in 416 to hold steady (after all, six million people live in the GTA), but as far as 905, Vancouver, Cowtown, Edmonton or Winnipeg go, not so much.

Next year should be a howler. I may have to shutter this blog, and seek protection.

216 comments ↓

#1 Suede on 12.07.14 at 4:42 pm

good timing…

Yes the US markets are in record territories. Now factor in an added 13% for currency exchange and you got an extra boost in CAD$.

DOW is well over 20,000 in CAD$

The gravy train is running full force and has plenty of room for bandwagoners.

#2 jean on 12.07.14 at 4:43 pm

Garth, if the ECB launches QE won’t this ignite European stocks like we saw in the US? And if so, don’t you think there might be better returns in Europe than the US, since the US is already a bit extended? Or do you see the US having another great year in 2015 like the past year? Just wondering if there are not a few other markets that might do better than the US relatively?

The certainty of an ECB asset-buying program is already largely built into Euro stocks. Everybody knows it’s coming. — Garth

#3 markymark on 12.07.14 at 4:51 pm

Now is not the time to guess and overweight anything……balance is best. Stick to your guns.

first………………

#4 pravchaw on 12.07.14 at 4:52 pm

Garth – You can always get asylum in the USA.

#5 Whitey on 12.07.14 at 4:54 pm

It’s a good time to be liquid

#6 CP on 12.07.14 at 5:01 pm

Hi Garth,

I would feel really sorry to see that this blog will be turned off. It has been a great source of investing and moneys management education for young peoples that have been eager to learn something not thought in schools.

C.

#7 View on 12.07.14 at 5:01 pm

I’m out in the Alberta oil fields.

No one seems to be concerned here.

I don’t say nothing!!!

#8 Larry1 on 12.07.14 at 5:04 pm

Think Rosenberg also said “Get the U.S. consumer right and everything else will take care of itself.”

US consumer discretionary, entertainment and hardware anyone?

#9 totalinvestor.com on 12.07.14 at 5:04 pm

Is that kid looking at stock market charts?

[IMG]http://i59.tinypic.com/jae1vq.jpg[/IMG]

#10 Joseph on 12.07.14 at 5:09 pm

My girlfriend works for another company owned by Murray Edwards, Ensign Energy. They sent out a letter to all employees to brace themselves and ask them to do more with less: “When the times get tough, the tough gets going…”

Despite the writing on the wall for what’s to come, the letter contained a diamond that is food for thoughts: “the solution of low oil prices is…. low-oil prices.”

#11 Conspiratard on 12.07.14 at 5:10 pm

“Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea and the US heads for social and economic collapse. Sad.”

Turner, I deeply represent those comments.

May the illuminati be with you. NOT.

#12 iforget on 12.07.14 at 5:11 pm

Always enjoy your post’s buried in home equity and glad to be receiving some of my pension in US$ My town is a grape growing region and many grapes were left on the vine
Farm Credit is underwater on several properties in the area and prices are tanking on vineyard land and wineries
Went into the bank a couple of days ago to transfer my rif to them asked the young man helping me what he thought or real estate-family is very into real estate and he just bought a rental property in Fort Mac says the rents are not what he thought he would get but says they will improve The herd is really heading for the cliff

#13 Grantmi on 12.07.14 at 5:18 pm

#7 View on 12.07.14 at 5:01 pm
I’m out in the Alberta oil fields.

No one seems to be concerned here.

I don’t say nothing!!!

It’s because they can,t see the Forrest through the trees.

#14 Cow Man on 12.07.14 at 5:23 pm

Sir Garth:

Add in the financial mess the Province of Ontario is in and the decline in the auto industry. We here in Ontario are in for a reduction in living standards.

#15 Roman on 12.07.14 at 5:28 pm

From realtor.ca website, Oakville has are 23 houses in price range 0-600k (sort of “affordable” by Canadian standards)
and 193 in the price range 1.5-10 mln

W. T. F with these suburbs?

#16 Cato the Elder on 12.07.14 at 5:42 pm

GDP is a measure of consumption. If gas prices fall, but that same money is spent in other areas, the net effect is neutral. GDP remains the same.

Therefore we must ask, is GDP a relevant metric for economic prosperity?

The answer is of course NO. GDP does not measure people’s standard of living nor their leisure time, both vital to living ‘the good life’.

What we need is higher productivity. We need more capital machinery. We need a more efficient workforce. We need to produce real things again for the lowest possible prices. We need to incentivize business hiring instead of burdening businesses with legal red tape and terrible consequences if something wrong happens. We need to stop taxing productive enterprise and people to the point where it punishes hard work and success. We need to leave people be to pursue their own version of happiness.

#17 William Bell on 12.07.14 at 5:59 pm

“…I may have to shutter this blog…”

Please don’t close this blog Garth !

#18 Halifax Observer on 12.07.14 at 6:01 pm

Halifax apartment starts down 40% and some new condos only 30% sold

http://www.innovativerealestate.ca/2014/11/apartment-starts/

Halifax housing starts down just as much

http://www.innovativerealestate.ca/2014/11/halifax-housing-starts/

Despite the drop in starts, inventory is at all time highs and sales are at all time lows. This city got ahead of itself and built housing for thousands of workers who were supposed to show up to build ships. Now we are looking at losing thousands of tradesmen who can no longer find work in construction around here (They may no longer be able to look to Alberta for greener pasture). Halifax RE prices are down around 10% over the last two years. At least 30% more to go IMHO.

#19 Smartalox on 12.07.14 at 6:08 pm

Remember Occupiers:

“it’s not that Capitalism is a failed (economic) system, it’s that Capitalism has failed YOU.”

You see, in order to play the Capitalist game, you need capital, debtors are the ‘prey’ in this scenario.

Save, invest, grow your capital, follow. Garth’s advice, balance and diversify, and you can comfortably balance wealth accumulation and risk.

Borrow, charge, and accumulate lots of shiny toys and stuff, and the rest of us will grow our capital feeding your addictions. Your choice.

#20 Londoner on 12.07.14 at 6:20 pm

US is certainly where all the action will be in 2015. We started to see the shift in capital (London -> NY) earlier this year.

Glad to see you’re finally coming around to acknowledging 416 valuations staying where they are. Toronto has more to offer then most Canadians give it credit for.

#21 Wayne2yerGarth on 12.07.14 at 6:26 pm

Garthity Garth Garth,

do you think round of growth and global recovery will have any positive effect on real wages for the average joe?

Personally, as a struggling millenial trying to save a single buck, I couldn’t give a rat’s ass if the US GDP doubles, we need to see some positive movement in real wages.

I’m going out to buy myself a copy of ‘The protestant work ethic and the spirit of capitalism’ and study up…

I can see why you’re struggling. — Garth

#22 Raincouver on 12.07.14 at 6:30 pm

In the three formations that account for 88 percent of U.S. shale oil output — the Bakken, the Eagle Ford and the Permian Basin — explorers can drill wells profitably in some areas with crude at $25 a barrel, a team of analysts led by Manuj Nikhanj at ITG Investment Research Inc. said this week.

From bloomberg. If this is true, what’s going to happen to Alberta??

#23 Mama Bear on 12.07.14 at 6:34 pm

The suggestion of another guru is we take 1/2 out of our TSX and put it into the S&P to benefit from the collapse of the price of oil. Garth?

#24 DE on 12.07.14 at 6:37 pm

When interest rates increase, I think the emerging markets get hit harder as they have taken on $US denominated debt and the cost of servicing this debt will increase, a repeat of what happened last year, but worse. When you add in the fact that Europe is stuck without a fiscal union and no growth, it would suggest that the USD and USD assets will be the place to be. The offset though will be that stock buybacks (a large component of the run the Dow has had) will slow due to credit becoming more expensive. It is important to note that when risk free interest rates rise, risk asset values must reprice lower to some extent.

However, while it is fun to guess, the best current evidence for the methodology of diversification that Garth recommends is this: few, if any, analysts predicted a 40% drop in the oil price in a matter of months. In fact energy was viewed largely as a sure thing as compared to many other sectors. The reality is we only ever get to see the tip of iceberg, never the whole thing.

#25 crowdedelevatorfartz on 12.07.14 at 6:47 pm

Excellent photos lately Garth.

#26 Nomad on 12.07.14 at 6:51 pm

Shiller thinks so too:

“It would be perhaps smarter, if wealth accumulation is your goal, to rent and put money in the stock market, which has historically shown much higher returns than the housing market,” said Shiller, who was speaking at a panel discussion Thursday.

http://money.cnn.com/2014/12/04/investing/shiller-housing-wealth/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_markets+%28Markets%29

#27 commodities on 12.07.14 at 6:56 pm

Is it normal for commodities to be plummeting at a time when demand should be sky high with a robust and ongoing recovery? If companies are selling alot, it cant be physical products as otherwise demand would be high along with prices. So much so econ 101.

#28 james on 12.07.14 at 6:59 pm

#7

The fact that no one seems concerned entails what exactly? That there is no reason to think that the oil fields are going to go into a slump?

Most people in the USA were not concerned when housing imploded, because they considered it impossible for real estate to go down.

#29 Hawk on 12.07.14 at 6:59 pm

Although its good new why are oil prices declining so much? Its not as if we’ve all suddenly stopped driving and flying all over the world? If anything growing populations in India & China are consuming more energy now and there is still no really close substitute for oil.

#30 james on 12.07.14 at 7:00 pm

so, on the topic of that chart, would a contrarian not say that it is time to scoop up some precious metals and sell some stocks?

I’m no gold bug, but when I see a trend line of that sort…

Go ahead. See what happens. — Garth

#31 espressobob on 12.07.14 at 7:09 pm

‘ I’ve suggested here for some time that you underweight Canada and overweight the US’
……………………………………………………………

Thank You! It’s a big world out there. But I do find these profit taking ‘limit orders’ are quite a nuisance when it comes to the S&P 500. It’s hell, but some of us have to deal with it!

#32 RealistvsExtremist on 12.07.14 at 7:14 pm

Speaking of China and phoney “Murican” job numbers, what does it say when the CEO of the worlds largest company calls “Muricans” STOOOOPID?

http://www.today.com/video/today/50100299#50100299

And that “BS” he says about engines? Yes the software (engine) may be Made In Murica….but unlike the HARDWARE made in China…..you can clone the software free of charge to infinity. No jobs there.

#33 juno on 12.07.14 at 7:15 pm

#7 View on 12.07.14 at 5:01 pm

I’m out in the Alberta oil fields.

No one seems to be concerned here.

I don’t say nothing!!!
===============

Its too soon. When the first round of pink slip start being handed out. Then reality will dawn on those people.

Remember most people are reactant. Most do not plan ahead. And most Canadians plan between paycheck to paycheck

#34 Basil Fawlty on 12.07.14 at 7:21 pm

“the US equity market has soared. This has not been the direct result of government stimulus,”

According to the attached Marketwatch article, the $3.5T printed by the Fed has resulted in $250B per year in corporate stock repurchases, over the past five years. This is the direct result of government stimulus, which has driven real interest rates to the lowest levels in modern history.

http://www.marketwatch.com/story/uh-oh-stock-buybacks-are-on-the-decline-2014-08-20

And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth

#35 Canadian in Portnalnd on 12.07.14 at 7:30 pm

Seriously, anyone who doubts the economic turnaround in America has not been here over the past year. Its not just McJobs either. I work in a position on a campus since I am an international student. Two days ago, I was asked by business if i could help with data entry, starting at 14 bucks an hour. Jobs are being created exponentially, and there are not enough skilled people to fill them.

the balance of power is shifting back to labour naturally, and wages are adjusting.

Companies are reshoring their factories. Although the automation makes less labour necessary, the factory still needs managers and manpower.

Now that QE has ended, large corporations like Nike and intel are spending heavy on massive expansions and hiring.

Now that spending power is returning to labour, consumer confidence is growing, and small businesses are reaping the benefits. Banks are lending to small businesses again. Hell, all you have to do to be a successful business here is have a unique idea for a food cart.

As such, county governments are promising at least a 15 dollar an hour starting salary just to attract applicants.

With no sales tax and gas below 80 cents a litre, business is booming.

This blueprint of small business success is repeated in other economically depressed areas of America, such as Austin, TX and even Detroit.

#36 LH on 12.07.14 at 7:31 pm

Amen.
C01 and C02 will do just fine in CAD terms.
Now if only I had hedged the usdcad fx exposure….

#37 Conspiratard on 12.07.14 at 7:45 pm

#16 Cato the Elder

Agreed. GDP is merely another tool of social control that cannot be trusted.

Kind of like Garth. Did you notice what he just did?

Your post had 710 characters. Garth deliberately created a delay in the queue, not posting it until 5:42.
Today’s blog title, “Down with stuff” has 3 words in it.

710-5-42 = 666.

Never underestimate who we are dealing with, Cato.

Yours in solidarity,

Conspiratard.

#38 Conspiratard on 12.07.14 at 7:46 pm

#16 Cato the Elder

Agreed. GDP is merely another tool of social control that cannot be trusted.

Kind of like Garth. Did you notice what he just did?

Your post had 710 characters. Garth deliberately created a delay in the queue, not posting it until 5:42.
Today’s blog title, “Down with stuff” has 3 words in it.

710-5-42+3 = 666.

Never underestimate who we are dealing with, Cato.

Yours in solidarity,

Conspiratard.

#39 Freedom First on 12.07.14 at 7:49 pm

I remember Garth writing about gold and silver in 2011. He told us about the lineups to buy silver when it was closing in on $50.00/oz. , and the lineups for gold too when it was closing in on $1900/oz. When they were going downward Garth also told us a few times that he never sees any lineups anymore. Hey…….wait, Garth has also been keeping us up to date every step of the way on the lineups to buy condos, and the bidding wars on houses too as the prices were reaching record price after record price. This is all during the time when the Americans and the Europeans, et al, were getting their financial body slamming from collapsing RE prices after doing exactly what Canadians did. But the Canadians said that “we are different because of ….blah,blah,blah.”
Just an observation. American $$$$$ assets. Yes. diversified. Yes. Liquid. Yes. Balanced. Yes. Right on Garth, thanks for all you do.

#40 William of the North on 12.07.14 at 7:51 pm

0% interest rates have nothing to do with current events?

“This has not been the direct result of government stimulus, currency devaluation, central bank diddling, monetary manipulation or a giant plot against precious metals”

So if the view is that stuff is devaluing (deflation); and the agenda of the central banks, governments, and main stream economists is Inflation….(that’s the only way an economy grows; don’t you know;) why would you, Mr. Turner; expect the interest rates to rise?

I believe that was a conclusion of your previous post.

Food for thought.

#41 VICTORIA TEA PARTY on 12.07.14 at 7:52 pm

IT’S DIFFERENT THIS TIME…AND I REALLY MEAN IT!

The US economy, in the very big picture, has wrenched its way out of the once-intractable glue of the GFC.

It has emerged, inspite of record trillions in funny money printing, empirical over-reach in its various wars, winning the currency wars, overseeing collapsing commodity prices, making a hash of its Mideast policies, and picking on weaker countries including Russia, to re-emerge as the New Big Boy on the Block again.

There is no other economic story of such proportions extant, and those who’ve invested recently in securities offering stocks in American banks will be the chosen ones soon.

Those banks, which looked like death warmed over in the fall-winter of 2008-09, are now the shining beacons of Freedom, Justice and the American way. Go fill you boots, because I sure as Hell am!

Meanwhile, on the ground in America the recovery is not uniform perfection from a number of perspectives as Sunday’s Meet the Press program points out. CNBC’s A-Dog Rick Santelli is also interviewed:

http://www.zerohedge.com/article/rick-santellis-meet-press-appearance-113-trillion-future-rounding-error-and-metamorphosis-am

So, we here in the Colonies are about to get whacked again.

It’s a combination of our fault, and the fct that the Yanks with their reserve currency superiority can do wht they do and very well thankyou.

Buckle up for a horrendous ride to come.

Meanwhile China, is also benefiting from lower commodity prices and is settling in for a lower growth rate which will be good for our dreams of LNG exports to that far shore.

Silver lining in a few clouds, here…

#42 Retired Boomer - WI on 12.07.14 at 7:52 pm

Well,. I’m too crippled up to work much anymore. Good thing I was abler to retire when I did. Then started my Social Security when I decide it was time.

Garth, thank you for the “perfect” advice to a guy who had half a clue to start with, and now a more “prefect vision.”

It all started way back there, somewhere in my 30’s when a wee small voice said, “get your ass into gear, boy. You aren’t 20 anymore, and nobody gives a shit for old geezers, except old geezers who can fend for themselves.” Quite true. It all started with contribution 10% to that 401K. Later added a bit, and funded the tax free stuff as allowed. Spouse saw the value of that idea as well. Two pulling in the same direction work much better than one by the way. WE did it together, as it should be.

Regardless of what Cato offers, it is still a beautiful, though unpredictable world. Have your “FU-money” set aside, let the rest roll on a 75/25% to 60/40% split depending on your guts.

Live WELL!! Garth, if you need a place to hide, we can shelter your amazonian covered arse here in the land of cow poop & beer farts.

We can be off the mark, wall, mainstream, road, beam, grid, radar, and cell coverage. We ARE the mid-west!

#43 dd on 12.07.14 at 7:53 pm

And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth

Also, based on historic low interest rates worldwide. without is unprecedented action buyback would not be as great.

#44 Realties.ca » Down with stuff on 12.07.14 at 8:01 pm

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#45 Westcdn on 12.07.14 at 8:08 pm

I am looking at WTI oil being sub 70$us for a long time and many economists thinking this is good for the world. I see low oil prices as being a transfer of income from the wealthy to the average joe but I do not see it as an increase in global wealth. Possibly, the number of marginal oil producer debt defaults may result in less global wealth but let’s wait to see what unfolds. Be careful of what you wish for.
I have harped on the Cdn transfer payment system a few times and finally did some research to test my idealism. In 2009, Alberta was the only province to pay more to the Feds than received back (more than 50%) however Ontario basically broke even. It is unfair of me to call Ontario a welfare state. http://thoughtundermined.com/2012/07/22/a-closer-look-at-federal-revenues-and-expenditures-by-province/ Look at the second chart of Fed Gov Rev and Exp by province.
For what it may be, I think Alberta is a rising province (until recently) and Ontario is old and sinking. I see a tough year ahead for Alberta but it is not the first time. Western Cdns are sadly underrated by the central Canadian elites. That is their problem.
Procreate, be green and go in peace (sarc) – wish I could afford a Hummer to impress idiots.

#46 not 1st on 12.07.14 at 8:09 pm

#7 View on 12.07.14 at 5:01 pm

I’m out in the Alberta oil fields.

——-

Because decisions aren’t made out there. They are made in the towers of downtown cowtown and I can bet your dollars to donuts there are people burning the midnight oil there right now revising budgets, modifying plans and readying staffing cuts for the new year. The good heated souls just can’t bring themselves to fire anyone before xmas.

#47 kommykim on 12.07.14 at 8:11 pm

RE: #3 markymark on 12.07.14 at 4:51 pm
Now is not the time to guess and overweight anything……balance is best. Stick to your guns

Yes. I find it odd that Garth would advocate unbalancing our portfolios:

I’ve suggested here for some time that you underweight Canada and overweight the US in your asset allocation.

Rather than selling some of the winners (USA for example) and buying the laggards (CAD and/or EUR for example), Garth wants us to now “buy SP500 high” and “sell TSX low”???

I have consistently suggested a balanced portfolio with a heavier US weighting. Nothing has changed. — Garth

#48 Basil Fawlty on 12.07.14 at 8:13 pm

“And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth”

Did you make that up?

Here is a direct quote from the linked article:

“According to the Federal Reserve, corporate debt has risen 27% over the past five years to $9.6 trillion.”

Corporate debt for expanding, profitable enterprises is up 5% a year? Canadian homeowners should be so prudent. — Garth

#49 not 1st on 12.07.14 at 8:13 pm

The S&P 500 correlates very closely to the price of oil….maybe Garth hasn’t seen that chart.

just sayin’…

That was funny. Keep it up. — Garth

#50 Timmy on 12.07.14 at 8:21 pm

Question is how low will the CDN dollar go and when do we buy USD?

#51 not 1st on 12.07.14 at 8:24 pm

Alberta made a big bet and is going to lose.

Of course they have know about shale production increasing for the past 7 or 8 years as well as other supplies around the world and the rising risks of renewables. But their game was to get as much oil on stream as fast as they could and get it into the center of the US market and near an off shoring point, get a world price for the crude for a few years then get their operating expenses under control and hope to keep that new shale oil from displacing oil sands.

Well looks like Obama and the boys saw through that one and delayed everything just long enough for the shale to fill the gap. Americans play for self interest and nothing else. Why would they be good buddies and willingly put the nail in the coffin of their own industry. Plus an added bonus of telling the saudis to stuff it and crushing Venezuala, Russia and Iran all at the same time.

Nicely played Mr. Obama. Masterstroke.

#52 Strathcona on 12.07.14 at 8:26 pm

I’m out here in Alberta as well. I work in oilsands, on the largest projects. Our new project list dried up weeks ago. Still busy running around doing many smaller jobs. The biggest, most profitiable ones are much fewer than a year or two ago.

the other poster is wrong, that noone is concerned. Its generational. The closer a person is to about age 60 or so, the more realistic they are about the problem, and the likelihood of an impending bust.

Those higher up in management are the most concerned, which is telling. The regular worker bees keep buzzing and gaining more debt here.

Those closer to 30, tell me houses and oil always go up. ” They’re not making any more land”. Obviously, they didn’t look across the Prairie, and see there’s no lack of it here. Another common adage is “TNL @TB tells me housing debt is ‘good debt’ “. If that’s the case, then what’s a margin account on blue-chip stocks? ‘Great debt? ‘

The end of RE as a national passion is here. The next focus will be something else. I frowned a decade ago when I heard mobile internet would be hot. I was wrong. I frown again when I hear about clean water being the next hot commodity. Then I hear about the constant fires and droughts in California, and the emptying of lake Mead. I think my frown is misplaced.

#53 not 1st on 12.07.14 at 8:28 pm

chart S&P vs WTI since: http://stocktwits.com/message/28804192

I’m not laughing…

You have a funny view of correlation. — Garth

#54 Basil Fawlty on 12.07.14 at 8:30 pm

“Corporate debt for expanding, profitable enterprises is up 5% a year? Canadian homeowners should be so prudent. — Garth”

The question was where did the money come from to repurchase stock? The answer was new debt, in the amount of $400B per year, not profits

#55 AK on 12.07.14 at 8:43 pm

.#30 james on 12.07.14 at 7:00 pm
“so, on the topic of that chart, would a contrarian not say that it is time to scoop up some precious metals and sell some stocks?

“I’m no gold bug, but when I see a trend line of that sort…”

Go ahead. See what happens. — Garth.
===================================

“Dead Money” – Dude….

#56 Joe Average, Vancouver on 12.07.14 at 8:44 pm

I went to a little trip to EU last week….two things that have got my attention in general in every town :
1. Houses and condos for sale all over the place, so were completed up to two years ago and never occupied
2. On every major street you’ll find a cash advance place and a drug store

Real estate is caput and folks are short on cash.

#57 AK on 12.07.14 at 8:45 pm

#50 Timmy on 12.07.14 at 8:21 pm
“Question is how low will the CDN dollar go and when do we buy USD?”
====================================
The busch league loonie is heading down to 0.60 cents.

#58 espressobob on 12.07.14 at 8:55 pm

#49 not 1st

The S&P 500 has about 9% weighting in energy. The TSX Composite roughly 22%. Diversified?

#59 Uh Oh Canada on 12.07.14 at 9:02 pm

“I’ve suggested here for some time that you underweight Canada and overweight the US in your asset allocation. It’s been a good strategy for the last two years that this pathetic blog has been recommending it.”

Yes sir. I did exactly just that when our Canadian money was at par. So far, stocks are growing and I get an extra 14% too- thanks Garth.

Also, I was and still am one of those ‘crazies’ that believe in the fall of Capitalism, thus the U.S. But I am still a Capitalist at heart and believe that there is even money to be made during the fall.

#60 Karlhungus on 12.07.14 at 9:03 pm

So you talk about rebalancing and then in the same breath talk about going overweight in a market that just went up 40%. Not very consistent

Pay attention. The balanced portfolio I published here over a year ago was overweight US, underweight Canada. For a reason. — Garth

#61 Tony from Calgary on 12.07.14 at 9:07 pm

@ Timmy,

“Question is how low will the CDN dollar go and when do we buy USD?”

I believe the answer to “when do we buy USD” is… 2012 – 2013.
Hope you’ve got your time machine all fired up :)

@ Garth,

Don’t close the blog – where would all the unquestioning / unthinking blog dogs go to be told how to “invest” in their futures? If you close the blog, you risk allowing them to slide back into the grip of Realtors and the garbage we’re fed by CBC, BNN, Blomberg, etc. every day. And then all your hard work is for naught…

Regarding markets I would hazard a guess that US equities may continue to hit record highs heading into 2015, especially once the Euro falls apart and western economies around the world start imploding (where can you hide save for the USD, US treasuries and US equities?). But I hope people would be wise enough to realize that it would be best to get out too early than to stick around and be too late (which is looking to be September/October 2015, give or take?).

Canned beans and toilet paper, folks – best to stock up while cheap oil helps bring down the prices (along with your wages, job security, and dreams for the future)! ;)

Cheers,
TFC

#62 Millenial on 12.07.14 at 9:10 pm

‘(By the way, the comment section on the weekend became a drop-in centre for all of the America-hating, conspiratorial, anti-establishment, bank-dissing, anarchist, libertarian, bullion-licking, Occupy nutjobs who weren’t busy stockpiling pallets of bumwad from Costco. Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea and the US heads for social and economic collapse. Sad.)’

Hey Garth,

Who in the comments section said capitalism is a failed idea? On the contrary, I think most people who visit your site believe capitalism is a perfect idea; however some of us think what’s called capitalism today is a gross distortion of the term. I don’t believe governments should be dictating interest rates or printing money to purchase their own debt and mortgage-backed securities, just as you don’t believe that the government should be involved in insuring mortgages in Canada. Value gets distorted.

There are points and counter-points to be made regarding the strength of the American recovery. The labor force participation rate (http://www.cnsnews.com/news/article/ali-meyer/labor-force-participation-remains-36-year-low-0) is just as powerful a data point as any jobs report you highlight. Black Friday weekend sales sucked (http://time.com/money/3612641/black-friday-cyber-monday-sales-best-prices/), and the apologists are out making excuses. Are the excuses valid? Maybe, maybe not. Is it a coincidence that Black Friday weekend suddenly become irrelevant in 2014? I’m honestly not sure.

I lived in the US for 7 years: most of my best friends are American, and I owe my entire career to the American educational system (and my hard work). To me, the suggestion of anti-Americanism in the context of the comments section in this blog smacks of McCarthyism.

#63 The Patient on 12.07.14 at 9:18 pm

“And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth”

And revenue generated by selling corp bonds, arbitraging ZIRP for stock buybacks. Duh.

#64 karlhungus on 12.07.14 at 9:20 pm

Thats why i dont really see the point in rebalancing. If you were advocating to go overweight in US you are suggesting that you can time the market, you are no different then mutual fund managers.

It’s been evident for at least two years the US economy would outperform ours. I have detailed the reasons many times. So, US weighting on the growth side has been 18%, while Canada was 16% and international 17%. In portfolios of sufficient size, there are several sub-categories (large cap vs small cap, for example, or completion and emerging market ETFs). Be wary of home country bias. Over 70% of Canadians with equities as 100% invested in maple. — Garth

#65 Jsan on 12.07.14 at 9:25 pm

Yes, it makes so much sense. Green shoots (remember that one) everywhere, stock market hitting all time highs because the economy is taking off like a ……….what? Well if the economy is so rosy how come retail sales stink, how come commodities especially Oil are crumbling, how come bond yields are at all time lows etc. etc. All of the above is more a canary in a coal mine for a shi##y economy, not a strengthening economy.

The Stock market is about the only game in town the Central Bankers can help juice that gives the “perception” that happy day are here again. When the media trumpets “Dow and S&P hit new all time highs” the masses all in unison begin to believe that things must be good, after all, the markets are soaring. Phhhhhhhtttt, yeah the markets are soaring because absolutely rock bottom interest rates and bond yields have left the whole world now chasing returns and the only perceived safe place to do that is the US market…..for the time being. When the whole economy makes absolutely no sense when you look at it from the ENTIRE picture, maybe now is a good time to start buying GOLD. After all, isn’t the old saying the best time to invest in something is when the sentiment is at it’s worst and hate for it is at all time highs.

A Matter, It Seems, Of Faith

“The juxtaposition could not be more fitting with all that is transpiring at this moment in economic history. On Monday, the headlines were filled with, Black Friday Fizzles as Sales Tumble 11% and ‘Black Friday’ Fades as Weekend Retail Sinks 11%. Then the “employment” report comes out and now the headlines are, More Jobs and Higher Wages: U.S. Recovery Starts to Hit Home and Hiring Surge Gives U.S. Expansion a Lift Into 2015. The problem is one of mutual exclusivity as both narratives are totally inconsistent with each other even when factoring any kind of shift in consumer buying patterns.”

The number I focus on: 321,000 new US jobs last month. Over 2,000,000 this year. This is a meaningful, if imperfect, recovery. — Garth

#66 ronh on 12.07.14 at 9:25 pm

So Garth, thinking of shutting this blog down? Maybe with your new spare time you could create a high school course in finance/investing. Think of it as your legacy.

#67 Jsan on 12.07.14 at 9:27 pm

Forgot the link to previous post.

A Matter, It Seems, Of Faith

http://www.alhambrapartners.com/2014/12/05/a-matter-it-seems-of-faith/

#68 Horse Hockey on 12.07.14 at 9:29 pm

“…. things you need to shovel, burn, store or heat”

LOL, that’s a great description of the BS/manure proselytized by some of the posters and purveyors of “wisdom” on this otherwise fine blog!

#69 Daisy Mae on 12.07.14 at 9:29 pm

” Next year should be a howler….”

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

You really pack in a message. Thank you. We appreciate your candor.

Whereas ‘Joe Blow’ says abit about nothing….

#70 RealistvsExtremist on 12.07.14 at 9:34 pm

According to the attached Marketwatch article, the $3.5T printed by the Fed has resulted in $250B per year in corporate stock repurchases, over the past five years. This is the direct result of government stimulus, which has driven real interest rates to the lowest levels in modern history.

http://www.marketwatch.com/story/uh-oh-stock-buybacks-are-on-the-decline-2014-08-20

And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth

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

Because not a penny came from the trillions printed in QE. Whoops !!

#71 Retired Boomer - WI on 12.07.14 at 9:36 pm

WHY would anyone try to “time” an exit from the stock market? Unless you see stupid things like Banks giving out ‘liar loans’., and extending half-million dollar home loans to janitors, and maids based on false loan documents, oh wait, I already saw that movie it was late 2007…

Well, non-coventional oil loans look to make up about 16-17% of junk debt loans. That will hurt some sectors should oil stay low long enough for defaults. Elsewhere, low oil helps most sector values.

Besides, having a balanced portfolio is exactly for the day when markets head to the popper. BALANCE is for buoyancy, not to never have a loss. Stay the course is the motto where I invest, so will do just that. Doomers do what you wish, and best of luck.

#72 Sheik Yerbouti on 12.07.14 at 9:45 pm

“Pay attention. The balanced portfolio I published here over a year ago was overweight US, underweight Canada. For a reason. — Garth”

Garth, does this mean you are an insider at OPEC and/or can accurately forecast Oil price movements….if so, when is the next meeting and what are they going to decide. I see a second career for you here as a global geo-political/energy uberguru par excellence!

Canada has under-performed the US for two years. How was that not obvious? — Garth

#73 Debunking Cato, Vol.1 Issue 7 on 12.07.14 at 9:47 pm

#16 Cato the Elder on 12.07.14 at 5:42 pm

“GDP is a measure of consumption. If gas prices fall, but that same money is spent in other areas, the net effect is neutral. GDP remains the same.

Therefore we must ask, is GDP a relevant metric for economic prosperity?

The answer is of course NO. GDP does not measure people’s standard of living nor their leisure time, both vital to living ‘the good life’.”

Taking your sentences one at a time from the top:
– The ‘P’ in GDP is for Product, as in production.
– This is different for each country. A net oil exporter whose consumers buy imported goods with the money they’re saving on energy will see its balance of trade deteriorate, and vice versa for a net energy importer whose consumers buy more domestic goods and services.

Although GDP is notoriously difficult to measure accurately, and leisure time that doesn’t involve spending is unaccounted for, most people who peruse a list of countries by GDP, e.g.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita

…would agree that those at the top of the list are desirable places to live or emigrate to, and those near the bottom are shitholes.

For all you talk about how less government and lower taxes are required, you’re still here. Why not move to one of the countries near the bottom, whose taxes and laws are primitive and poorly enforced, and whose governments don’t accomplish much?

#74 Entrepreneur on 12.07.14 at 10:01 pm

The unions down in the States are not as strong as in Canada…correct me if I am wrong. Our turn will come in time. Looks like we have to hit rough roads to rise.

We learn more from our mistakes.

#75 Chickenlittle on 12.07.14 at 10:05 pm

Smoking Man:

I didn’t have time until now to tell you that I enjoyed the two articles you posted last Thursday or Friday. They were excellent and I have them bookmarked.

#76 Fartingly Yours on 12.07.14 at 10:06 pm

#61 Tony from Calgary on 12.07.14 at 9:07 pm
“Canned beans and toilet paper, folks – best to stock up while cheap oil helps bring down the prices”

You might find an direct correlation between the quantity of canned beans consumed and the amount of toilet paper used, not to mention the un-pc contribution to global warming with those greenhouse grasses emanating from your dorsal vent…..

suggest you check on this lady’s hygienic tips and saving cash while in the “loo”

http://nypost.com/2012/10/16/she-loves-ew-york/

#77 Canadian In Portland on 12.07.14 at 10:08 pm

#65 Jsa

black friday sales were down 11% ,but cyber monday sales were up 17%…

You can cherry pick statistics on sales all day all you want, but the reality is people are working good jobs, with good pay, and disposable income is increasing. Also, people aren’t in a hurry to trample others in a Walmart line up anymore, knowing they can shop online at any time

#78 Dominoes Lining Up on 12.07.14 at 10:09 pm

“There may be a case for demand areas in 416 to hold steady…”

`May` is the operative word here.

I think you are bending over backwards to be optimistic and reasonable Garth.

Demand areas like C01, C02 and C03 in Toronto were absolutely crushed in the 1990s real estate meltdown, losing up to 50% for over a decade and I have friends still bearing scars from that.

If anything, the underlying Toronto economy is more precarious today. So many are barely holding onto SFD homes and laden with debt in less stable jobs. And much more condo density will drag down the neighbouring detached properties as condos decline even more rapidly.

It will be a howler though, as you say.

#79 Sheik Yerbouti on 12.07.14 at 10:11 pm

“Canada has under-performed the US for two years. How was that not obvious? — Garth”

Garth,

Hindsight is 20/20…..I need to know what is gonna happen before it happens, not after….give us some soothsaying puh-lease!

#80 Rex on 12.07.14 at 10:14 pm

The entire US financial system is a fraud where massive theft from the middle class is no longer a crime. The US is a failed state and failing to realize it is sad.

#81 Financial Freedom at 40 on 12.07.14 at 10:19 pm

#52 Strathcona
—-
There is an ETF for you – CWW.

#82 devore on 12.07.14 at 10:28 pm

#53 not 1st

chart S&P vs WTI since: http://stocktwits.com/message/28804192

I’m not laughing…

You can overlay almost anything on top of S&P (any stock quote site lets you compare prices like that) and get the same chart, or even better.

Besides, it doesn’t even look very correlated at all to me. What’s the actual correlation coefficient? Right, you don’t know, you’re just eyeballing some random charts, and making grand proclamations. Less reading and parroting investment tips from TraderRL23, more actual research.

#83 lee bow on 12.07.14 at 10:29 pm

Bad news is that the middle class keeps on destroying itself. Sure, things may go up a little, down a little. Is there a solid foundation under all this?

Don’t want to look like an existentialist but still.

#84 Cato the Elder on 12.07.14 at 10:34 pm

Re: #73 debunking

As I was saying:

“The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption. For instance, if a government embarks on the building of a pyramid, which adds absolutely nothing to the well-being of individuals, the GDP framework will regard this as economic growth. In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth.”

https://en.wikipedia.org/wiki/Gross_domestic_product#Limitations_and_criticisms

Failure to understand this is reflective of our overall political climate.

#85 TS on 12.07.14 at 10:49 pm

Oil will rebound by Spring. There’s not enough conventional oil out there to satisfy global demand.

Period.

As hard to reach oil goes offline because it’s no longer financially viable, there’s going to be nobody to pick up the slack.

#86 crowdedelevatorfartz on 12.07.14 at 10:49 pm

@#37,38 Conspiratard
AHAHAHAHAHAHAHAHAAHAHA . Excellent!

@#76 Fartingly yours
Excellent name but dont steal my “thunder”.

@#79 Sheik Yerbouti
The most original name Ive seen in a while. LOL

#87 crowdedelevatorfartz on 12.07.14 at 10:50 pm

@#84 Cato the Excitable

Yawn.

#88 Sheane Wallace on 12.07.14 at 10:53 pm

can we have that graph extended back to 1999?

Fifteen years? Who cares? — Garth

#89 Inglorious Investor on 12.07.14 at 10:55 pm

#27 commodities on 12.07.14 at 6:56 pm

“Is it normal for commodities to be plummeting at a time when demand should be sky high with a robust and ongoing recovery?”

The US economy may be recovering (bifurcated though it is) but the rest of world’s major economies (Japan, China, Europe, etc) are not doing so well. Also, as these other economies falter, investors are piling into the dollar, driving up its exchange-rate value and putting downward pressure on commodity prices.

It’s a global story, not just a US one. Also, as a percentage of global GDP, the US economy is shrinking. China is surpassing the US economy as the largest by output. In short, while still huge, the US economy simply does not matter as much as it once did. Add to that the fact that more countries are doing trade deals that by-pass the dollar (including Canada and China’s agreement for currency swaps), and not even the dollar matters quite as much as it once did.

#90 Inglorious Investor on 12.07.14 at 10:57 pm

“And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth”

How about corporate bonds?

#91 Smoking Man on 12.07.14 at 10:59 pm

#75 Chickenlittle on 12.07.14 at 10:05 pm
Smoking Man:

I didn’t have time until now to tell you that I enjoyed the two articles you posted last Thursday or Friday. They were excellent and I have them bookmarked.
……

Now your making me blush, the bes ones get deleted, and I never remembet writing them..

We should have a get plastered night and type on GF.

It would be intetesting.

Hey got a new pooch, handsom devil on my blog.

His name, Wyatt S Thompson.

#92 Tony on 12.07.14 at 11:06 pm

Re: #2 jean on 12.07.14 at 4:43 pm

If it happens the Euro will plunge and you’ll lose money. The European stock markets are still grossly overvalued due to the American rig job on the markets back home in America. This of course can’t go on indefinitely and the net result will be a crash worst than the ’29 crash. Falling commodity prices are the result of the world entering the depression stage from the recession stage. No mention of iron ore.

#93 Sheane Wallace on 12.07.14 at 11:08 pm

#84 Cato the Elder

Obama is lecturing the CEOs as of the record low capital investments, what an irony,
BTW Garth profits are high due to cost cuts/aka outsourcing and lack of capital investments, like cutting the branch we sit on.

#94 Nemesis on 12.07.14 at 11:18 pm

#TheEphemeralPhantasmagoricals… #BetterKnownAs”Ism’s”… #Or,”StupidStuff”… #&WhyPhilosophersAre… #SoGoodAtTuneUps…

“America-hating, conspiratorial, anti-establishment, bank-dissing, anarchist, libertarian, bullion-licking, Occupy nutjobs who weren’t busy stockpiling pallets of bumwad from Costco. Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea…” – Hon.GT

Seriously. That was a mouthful. Speaking of mouthfuls, have you ever seen the TuneUpBoyz, AuldPol!?!

http://youtu.be/VpAB-fePWOs

If there is a parable, it probably has something to do with “failed ideas”… Or, “Don’t be forgettin’… I’ve said it before, and I’ll say it again… Capitalism is a lot like IceCream… Comes in many flavours. Some are decidely more palatable than others… Accordingly, every now and again a vigourous ‘TuneUp’ helps, as it were”…

http://youtu.be/t5Yh7O9FvIc

[NoteToGT: “I may have to shutter this blog, and seek protection.” – Hon.GT… Funny you should say that, AuldPol… Still, the 21stCentury, for all its problems/travails… Well, “So far so good…” – comparably speaking: http://youtu.be/R3rnxQBizoU . Plenty of room for improvement, though – wouldn’t you agree? Oh yes, what are these, “…pallets of bumwad from CostCo” of which you speak?… I’m going there tomorrow and it sounds rather intriguing… Are they available in 12Gauge/3.5″?]

#95 Coolnik on 12.07.14 at 11:22 pm

Can someone explain how QE is injected into the economy? A link to an article would be great, Thx

#96 learningfromyou on 12.07.14 at 11:23 pm

I cannot recall who explained to me that the food prices went up months ago because of the price of oil.

Applying the analogy, the food prices should go down for the same reason in current time!!!!

No that fast ehhh?
We get used to higher prices and the stores want us to keep it forever.

#97 Retired Boomer - WI on 12.07.14 at 11:24 pm

Dec 7th

Interesting that no one has commented upon the history surrounding this infamous date.

(sigh)

#98 TheLaughingCon on 12.07.14 at 11:33 pm

Re #77 Canadian In Portland
“You can cherry pick statistics on sales all day all you want, but the reality is people are working good jobs, with good pay, and disposable income is increasing. Also, people aren’t in a hurry to trample others in a Walmart line up anymore, knowing they can shop online at any time”
====================================
Garth – ” Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea and the US heads for social and economic collapse”
====================================

The good fact are officially released here:
http://www.bls.gov/news.release/empsit.nr0.htm

Pay particular interest to table A1-and A-9

See how the unadjusted numbers by adding some spice called seasoning can perform a miracles!

And this is another eye-opening chart here:

http://demonocracy.info/infographics/usa/food_stamps/food_stamp_nation-SNAP.html

The “Canadian in Portland” – what do you think on all these selective statistics

US food stamps = Canadian social assistance. Currently 4% of Ontario families are on welfare. Life is imperfect everywhere. — Garth

#99 not 1st on 12.07.14 at 11:36 pm

#82 devore on 12.07.14 at 10:28 pm

Well the tale of the tape is in that chart if you care to see. Contrary to what Garth says, financial assets cannot exist without backing of some type and that backing is the factors of production. Capital, labour, equipment and materials.

So in that wonderful US jobs report that apparently had an increase of 321,000 solid jobs, where was the accompanying increase in the other factors of production? Did commodity and material prices go up? Nope, Did equipment orders go up? Nope. Did capital expenditures go up? nope. Any new mines or factories announced? Did the consumer get all hyped up? hardly (unless you count the 90% mark downs)

So corporate profits went up without an increase in any of the other factors tells you that its stock buy backs (QE) and operational efficiency gains, not expansion and a lot of smoke and mirrors. It tells you also the jobs are low level, unskilled and likely transitory.

So in this instance, the drop in oil price (along with other commodities and the lack of company capital expenditures) is a harbinger of slacking demand.

S&P will be lower in the spring.

#100 Sheik Yerbouti on 12.07.14 at 11:40 pm

“#86 crowdedelevatorfartz on 12.07.14 at 10:49 pm
@#79 Sheik Yerbouti
The most original name Ive seen in a while. LOL”

Don’t tell Dweezil, Moon-Unit….or OPEC

#101 Snowboid on 12.07.14 at 11:40 pm

#65 Jsan on 12.07.14 at 9:25 pm…

“…headlines were filled with, Black Friday Fizzles as Sales Tumble 11% and ‘Black Friday’ Fades as Weekend Retail Sinks 11%…”

As one who experienced the two weeks leading up to Black Friday here in Phoenix, I can assure you the ‘deals’ were available long in advance of BF this year – both in-store and on-line.

When we saw the pricing and crowds long before BF we knew then the sales on that usually crazy Friday would be down.

The MSM reported the same figures here (down on BF), but also pointed out retail sales were up over 15% in the week leading up to Black Friday – and online sales up on Cyber Monday.

#102 Joe2.0 on 12.07.14 at 11:43 pm

No worries for the rich wanting to invest in the Canadian housing market.
Just worries for the average Canadian hoping to one day be able to afford a home without donating a kidney, or should I say the best years of their lives slaving to make payments.
Immigration has out priced the market in many parts of Canada.

Prove it. — Garth

#103 devore on 12.07.14 at 11:47 pm

#62 Millenial

All Black Friday numbers show is that Americans are less willing to camp outside the Best Buy to get one of the 2 cheap flat screen TVs, and more willing to buy it online from the comfort of their own home a couple days layer on Monday. It is hardly a secret that online sales are increasing, and retail is decreasing.

Besides, it’s been shown many times Black Friday sales have zero correlation with either holiday sales or sales for the entire year. It’s basically just another sale, in a world where a deal is a click away.

#104 devore on 12.07.14 at 11:52 pm

#79 Sheik Yerbouti

Hindsight is 20/20…..I need to know what is gonna happen before it happens, not after….give us some soothsaying puh-lease!

Garth already has. When the loonie was above par, did you back up the truck and rebalance on cheap US equities, or were you in the bunker pontificating the decline and inevitable demise of our southern neighbor? If you did, add another 20% to your gains.

#105 Fartingly yours on 12.07.14 at 11:56 pm

DELETED

#106 Bobs ur uncle on 12.07.14 at 11:58 pm

And where did corporations get most of the money that smart executives used to buy under-valued stock? Oh. Profits. — Garth
*****

And credit:

“Two-fifths of S&P 500 firms are spending more than their entire cashflow on dividends, capital investment and buy-backs, thereby increasing their net debt.”

http://www.economist.com/news/business/21616968-companies-have-been-gobbling-up-their-own-shares-exceptional-rate-there-are-good-reasons

#107 O on 12.08.14 at 12:00 am

I don’t have a lot of RRSP room because I have to pay into a pension (federal, I’m young enough that I’ll probably never see it), so if I over weigh in US, I lose the tax advantages that come with Canadian holdings in an RRSP. Is it worth paying the extra tax?

So buy US exposure in C$. — Garth

#108 B Riding on 12.08.14 at 12:06 am

Just sold my last rental home on Saturday! Papers signed, I get my money Dec 31st! Could not be happier. Truth be told I excepted the lower offer even though I didnt want too after reading a blog late last week I SAID WHO CARES ABOUT 5K IM OUT!!!

#109 TheLeastInterestingManInTheWorld (AKA Taco the Wacko) on 12.08.14 at 12:12 am

Sheik Yerbouti I suspect you owe Dwezel and Moon Unit Zappa a royalty when you use that name.

#97 Retired Boomer – WI on 12.07.14 at 11:24 pm

Most people don’t know that was the Pearl Harbour attack date, even people who were alive for it have argued with me about the date. Sorry dude but I spelled it the Canadian way.

To one of you fools who commented about my obedience yesterday I can assure you you’re wrong. I was kicked out of school more times in a month for noncompliance than any of you were your whole school lives. When I had my own business I swam more against the tide than with it. None of this means that I will subscribe to stupitiy or acceptance of nonsensical conspiracy theories. I am not stupid enough to not understand why we have taxes and need them because of what they get us. If you want to talk about mismanagment of that money that’s a different story. I certainly wouldn’t tell anyone that there isn’t mismanagment and problems with the government. I will not buy into this nonsense that they are smart enough to run all of this schemes you people claim while also stating how stupid the same governments are.

A discussion about things that could be improved is very different than trying to force these Alex Jones/Jessie Ventura type conspiracy plots on people as truth is just foolishness. Even worse is then your type go to great lengths to attempt to show it’s just because you are so much smarter than everyone else that you can see it but us mere mortals can’t, you’re just trying to help us see the light. BS most of you should be on medication.

Oh and they tested my IQ to try to find out why I wouldn’t comply anf they kept kicking me out. It’s 181.

#110 Cato the Elder on 12.08.14 at 12:17 am

Re: #98

US food stamps = Canadian social assistance. Currently 4% of Ontario families are on welfare. Life is imperfect everywhere. — Garth

**********

Not exactly. There’s 46 million US on food stamps, up from 40 million in 2010. That’s the ‘official’ number, of course we all know the US government are liars. That’s also a little more than 4%.

http://www.fns.usda.gov/sites/default/files/pd/15SNAPpartPP.pdf

#111 Aaron on 12.08.14 at 12:17 am

New York Fed declares household deleveraging over:

http://www.marketwatch.com/story/new-york-fed-declares-household-deleveraging-over-2014-11-26

#112 Mark on 12.08.14 at 12:18 am

obs are being created exponentially, and there are not enough skilled people to fill them.”

Are you kidding? You base this on being offered some $14/hour barely above minimum wage job?

Last I heard, the high tech firms are receiving so many resumes from qualified individuals that they’re not even bothering to respond to qualified applicants. So please spare us this “shortage of qualified people” nonsense.

#113 omg the original on 12.08.14 at 12:32 am

It’s because, from the ashes of the GFC, the American economy has shown remarkable resilience, adaptation and strength.
——————-

Sorry but you US bashers are terribly wrong again and have been left behind.

You cannot see past the obvious. We came through some rough times with the GFC, but it really was not so bad compared to some other times western economies have come through.

Do you truly this this time round the crisis was worse then say:
– the Great Depression and dustbowl
– WW2
– the Cuban crisis were the world was on the break of nuclear war
– the 1987 crash
– the savings and loan disaster of the early 1990s
– the dot.com fiasco
– 9/11

Those are the highlights.

Each time we had apparently smart people telling us things were finished and we best learn how to wipe our butts with leaves – wouldn’t be no trucks delivery toilet paper.

Each time the world has recovered and advanced.

Repent of your anti-US doom and gloom (even perma-wrong Rosenberg has), and save yourself.

Embrace capitalism and all it has to offer……..

………its here to stay.

#114 omg the original on 12.08.14 at 12:42 am

#99 not 1st
S&P will be lower in the spring.
————————-

Sounds like the opportunity of a lifetime for you…..

…..so put your money where your mouth is and short the market.

You can by SPY options two year out – so that will give you plenty of time for your doom and gloom scenario to come true.

#115 VICTORIA TEA PARTY on 12.08.14 at 12:47 am

THE INTERNATIONAL BANK OF BANKS WARNS…

…the rest of us that an appreciating US dollar coupled with US central banks plans to raise interest rates next year could prove a disaster for:

–emerging markets, still borrowing US currency-based debt;

–and, non-American corporations sogged down with similarly-formed debt;

–in other words for the rest of us.

I’m not trying to contradict my previous screed, of this date, but to give it more balance because it badly needs such.

While St. Garth of It’s All Good in the USA goes on praising the US economic recovery, the bank of banks, the B.I.S. (Bank for International Settlements based in Switzerland) is greatly concerned as it tries to increase investor/government knowledge of what’s driving world economies and markets today and why.

The article finds there’s a lot to be worried about, according to London Telegraph columnist Ambrose Evans-Pritchard.

“… The BIS has particular authority since its job is to track global lending. It was the only major body to warn of serious trouble before the Great Recession (2008)- and did so clearly, without the usual ifs and buts.

It now warns that the world is in many ways even more stretched today than it was in 2008, since emerging markets have been drawn into the global debt morass as well, and some have hit the limits of easy catch-up growth.

Debt levels in rich countries have jumped by 30 percentage points since the Lehman crisis to 275pc of GDP, and by the same amount to 175pc in emerging markets. The world has exhausted almost all of its buffer.”

Here, you can read the rest of Evans-Pritchard’s piece:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11278264/Dollar-surge-endangers-global-debt-edifice-warns-BIS.html

A word to the wise should be sufficient.

So, the US economy does seem enroute to a sustained recovery.

But if it is doing so on the backs of other currencies and economies, a familiar behaviour of empires throughout history, the eventual backlash could be really quite something. Nothing much new under the sun…

Meanwhile the currency wars, the battle for currency supremacy, go on unabated, according the US economic observer James Rickards, whose opinions can be found on Zero Hedge and other blog spots.

He continues to maintain that the world has been suffering through an economic depression since 2008.

Canada is NOW for darn sure.

#116 Love this blog on 12.08.14 at 1:00 am

This just released . Sask loses 4000
Jobs last month

#117 Retired Boomer - WI on 12.08.14 at 1:12 am

#109 TheLeastInteresting…..

You dated it the “european way” 12/7/14 MDY vs DMY.

Liked the rest of the comment as well. Not often we are in the presence of a MENSA member on this blog.

#118 carousel on 12.08.14 at 1:25 am

Canada is headed for a startling awakening in the years to come in regards to jobs, the standard of life as they know it and of-course the over-inflated RE. Tough.. You say, it may be time to tighten the belt and live within your means. Look at the perspective, if you have the money buy a home, at a reasonable price that YOU can afford. The home is for living and not an investment. Alberta may be the way to go, look what happened in the 80’s. Anyhow, have a nice Christmas and a Happy New Year Garth and to all the bloggers. Next year comes what may …

#119 Debunking Cato, Vol.1 Issue 8 on 12.08.14 at 1:47 am

#84 Cato the Elder

You seem to be trying to take a fact — that GDP is imperfect by itself and prone to distortion in pyramid-building empires — and stretch that into saying GDP is useless. Wealth isn’t produced when the private sector invents the Edsel, New Coke or Iridium satellites, but GDP measures them.

Those of us who live in the real world know that GDP combined with household, government and corporate balance sheet and income statistics and the nation’s current and finance accounts paints a comprehensive picture, and we know that people are happier when real GDP per capita is growing than when it is contracting.

What about these strawmen you erect here daily? Are they measured by GDP?

#120 JSS on 12.08.14 at 2:08 am

Are shareholders of Canadian banks screwed?

#121 Linda on 12.08.14 at 2:10 am

So jobs are being added in the USA, no more QE & their stock market is roaring. Good for them. However, what about the US debt? Won’t that chicken be coming home to roost at some point? If Canada has to worry about debt, especially now commodities are taking a beating, won’t the US debt eventually weight down their economy? Surely if 40 or 46 or 50 million – I’ve read various figures – Americans are on food stamps that can’t be a good thing – that is maybe 15% of the entire American population depending on social assistance of some sort. Is it not possible that the debt will end the current US party, maybe sooner than expected?

#122 M on 12.08.14 at 2:28 am

If printing money would bring real wealth, zimbabwe would be a 1st world country.
What you see everywhere in stock markets is printed money.
Recipe for big pa-da-boom
Bets should be what big bank will collapse next :)

#123 blobby on 12.08.14 at 2:52 am

@#79 Sheik Yerbouti

.. He told us 2 years ago… Which was the EXACT thing you were replying to?

He isnt speaking from “hindsight” he’s speaking from someone who pointed this out 2 years ago!

Now you waited for proof… and now you’re saying “well, now it’s happened – that’s easy to say”.

#124 Lillooet, BC on 12.08.14 at 3:00 am

There is a simple economic law that will keep oil prices from falling much further and in the mid term, will drive the price back up: the cost of production.

Peak Oil is not about no more oil. Those who think that just don’t get it. Peak Oil is about the inexorable rise in the cost of producing oil. Peak Oil is about the cheapest oil being consumed, and the expensive oil is all that’s left. Therefore, the cost of producing the oil has continually risen the past fifteen years, from a low of $2/barrel to where it is now at $50/barrel and higher, depending on where the oil is. Some oil is cheaper to produce than elsewhere. But overall, the AVERAGE cost of producing oil is rising, and rising dramatically. Therefore, if the price of oil slides below $80, it becomes uneconomical for some sources and they stop producing. At $70, it becomes uneconomical for other sources to produce, and they shut down. And so on. The cheaper oil gets, the more producers simply stop producing, taking production off the market. Consumption is not falling. Do your research, the world’s population continues to grow last time I checked, with China and India selling record numbers of cars, trucks and motorbikes. Other countries are seeing ever-increasing auto sales (including Canada). Therefore, the price of oil will soon come face to face with the law of physics, the law of supply and demand, and will have to rise. I predict this will happen sooner than later.

#125 Known As Drew on 12.08.14 at 3:41 am

Meanwhile, in Australia, we’ve just had government inquiry into the Financial Services industry (including our four Too Big To Fail banks).

It was run by an ex banker.

You’d expect it to be complete whitewash.

You’d be very pleasantly surprised.

It was wide ranging, blunt, and highly impartial.

Unfortunately our government has proved to be in the pocket of the finance industry (just like everywhere) so we’ll see if anything comes of it.

#126 Geelong Guy on 12.08.14 at 3:48 am

Meanwhile in Australia …. this is happening to real Real Estate … coming soon to YOU.

https://www.facebook.com/OVHRepro/posts/602576163203598:0

#127 CalgaryBoy on 12.08.14 at 4:06 am

I was told that Imperial Oil Co. had a meeting to let everyone know everyone’s job is safe, there will NOT be any job cuts. They must be drinking Kool Aid.

#128 Gtrz4peace on 12.08.14 at 5:36 am

It seems that when Garth talks about the huge jobs recovery in the US, his measure of success is corporate profits, and thus, investor profits — which makes logical sense given that this is a financial investment blog, and a great one.

But corporate profits are NOT the same as “jobs” equating to a quality of life for people who were in the “middle” class and find themselves rapidly becoming the working poor. It’s that simple.

The US is still in a crisis of sorts — but it is NOT a corporate profits crisis. It is an INEQUALITY crisis. Garth Turner and this blog are in the business of investments, which depend and thrive on corporate profits. The lifestyle and social issues of HOW US corporations are making those profits, and the social weighing of a “McJob” or becoming a “permanent temporary worker” are perhaps best left to HuffPo or other lifestyle blogs.

At the same time, there IS a problem in the US, and it is GROWING, not decreasing. And the inequality can only be expected to grow under Republican rule. So, it’s anyone’s guess what we’ll be posting here a year from now.

#129 Gtrz4peace on 12.08.14 at 5:45 am

One more from the peanut gallery – Garth please do not refer to the Occupy Movement as “Occupy Nutjobs” because there are many. many brilliant people and professors who were, if not there in person showing solidarity in New York, there in spirit.

It’s an INEQUALITY issue, and if the US does not address it, all the corporate profits in the world will NOT prevent more “Occupy Nutjobs” from springing up, and civil unrest will increase over time.

I am not a doomer – that does not have to happen. I certainly hope it does not. But the US I see when I return home to visit family is NOT the “land of opportunity” I grew up in, it IS changing and in some ways 100% not for the better.

That is how I see it, as part of what was called “the middle class.”

#130 Jack Yellen on 12.08.14 at 5:50 am

Happy days are here again
The skies above are clear again
Let us sing a song of cheer again
Happy days are here again
Altogether shout it now!
There’s no one who can doubt it now
So let’s tell the world about it now
Party USA!

Happy days are here again
Your cares and troubles are gone;
There’ll be no more from now on
Happy days are here again
The skies above are clear again.
Let us sing a song of cheer again
Happy days are here again.

#131 Gtrz4peace on 12.08.14 at 6:08 am

#35 Canadian in Portlandia – us Americans from Chi-town are calling your bluff.

Jobs that pay more than minimum wage of $14/hour or may be easier to find — but try raising a family on that. On the other hand, jobs paying over $20 per hour – and jobs for older professionals in their late 40’s and 50’s are hard to come by as those folks are being forced into “McJobs”. They are also the fastest growing segment of the self-employed and those who would be entrepreneurs.

According to friends. Contractors we know who sell things like doors, and windows, for renovation and new construction, and others, are reporting having a hard time getting paid by people who are still rather tapped out.

Many skilled teachers we know also remain unemployed or under-employed due to cuts… though folks we know in Medical Services are working.

But overall, it’s just not quite as rosy as you paint — especially for middle age and older professionals.

Which is why, if you are among those as we are, being diversified with a portfolio as well as a paid-down home is a good thing no matter where you live.

DETROIT?? Detroit is a MESS, where people in need are having their water turned off, and the government led by the nutty Rick Scott is possibly becoming the first US theocracy.

But whatever you are smoking to tout the wonders of Detroit, please share.

#132 Not 1st on 12.08.14 at 7:23 am

#114 omg the original on 12.08.14 at 12:42 am

Sorry the economic basics elude you. Your pumper view has no merit. Every country on the planet is experiencing a slow down and the numbers all show it. Commodities are a bell weather. Less oil steel iron concrete all point to a slowing of economic out put. The McJobs report is meaningless. Corps have done all the cost cutting they can and so their upside of profits will be limited.

S&P just closed at its highest level ever and has 29 straight days of going higher. Remember what Garth said. It’s not different this time. Goes for stocks too

Your ilk has been dissing the US equity markets for the last five years, during which they have advanced 170%. Get over it. — Garth

#133 SWL1976 on 12.08.14 at 8:36 am

Tony from Calgary – Thanks

#80 Rex – Nobel words, direct and to the point

Garth – You’re right, 2015 is going to be a howler, batten down the hatches

#134 GeorgeSoonToBeRetired on 12.08.14 at 8:38 am

#97 Retired Boomer

Dec 7th

Interesting that no one has commented upon the history surrounding this infamous date.

(sigh)

__________

Me too. Was looking through all 600 cable channels for any documentaries or movies to commemorate the day.

Not a single program, not even on all the US channels I get here in Canada.

Why is Pearl Harbor completely invisible this year, especially in the US?

Interesting and a bit sad. Maybe the media thinks there are so few vets left it doesn’t matter?

Are Americans really just totally fed up with anything military, Retired Boomer?

#135 fancy_pants on 12.08.14 at 9:07 am

If oil remains low, the Canadian economy tanks, US rates do rise next year and force our hand, and RE really falls out hard here, then the too early departed peckerette is going to turn in his grave. Chickens always come home to roost. MC will just blame the dead guy in his own mind, shame on him. RIP

#136 robert james on 12.08.14 at 9:16 am

#134 Pearl Harbor…. From Canadian news… http://www.castanet.net/news/World/128383/Pearl-Harbor-survivors-return

#137 davikk on 12.08.14 at 9:17 am

A global recession is closer than you think: 1. BIS warning. Fragile markets. 2. Japan’s recession worse than thought. 3. German industrial output misses forecasts. 4. China trade data miss forecasts by a mile 5. The retail apocalypse accelerates in US

http://investmentwatchblog.com/a-global-recession-is-closer-than-you-think-1-bis-warning-fragile-markets-2-japans-recession-worse-than-thought-3-german-industrial-output-misses-forecasts-4-china-trade-data-miss-forecasts/

What a trashy site you follow. No wonder you’re scared. — Garth

#138 Cato the Elder on 12.08.14 at 10:06 am

Re: #119 debunking

GDP is useless. If the government spent $1 billion dollars getting people to dig a hole, and another $1 billion dollars getting them to fill it back in, it would count as $2 billion dollars towards GDP. They’d also use the people employed as a part of their employment statistics. Of course, neither our economy, nor the people employed, would benefit from this.

Central planning is DANGEROUS. That’s why communism doesn’t work. GDP is a measure that governments love to use because it promotes their own power and highly distorts the health of the economy in their favor (their spending = good no matter what).

It has been widely proven that GDP is a very poor indicator of economic prosperity. Given that it omits things that most would associate with wealth, like abundant leisure time, would make that very clear.

Why don’t they use methods that include things like leisure time? It’s gone down by over 50% in the past few decades. Women never HAD to work. They could stay home and care for kids. That in and of itself is a 50% increase in the amount of labour hours that MUST (not voluntary choice) be worked by families in order to survive.

And I’m going to pre-emptively tell you or anyone else to shutup about ‘women’s rights’. I’m not saying they can’t work if they don’t want to – I’m saying it’s NO LONGER A CHOICE. They MUST if they want to have a family. And I’m also not talking to the higher income folks, I’m talking to the average middle or lower class person.

We are being cooked alive by our politicians and their banking system.

http://austrianeconomics.wikia.com/wiki/Economic_growth

Here’s my favourite quote from this article:

“When Sir John Cowperthwaite, who is credited for turning Hong Kong into a thriving global financial centre, was asked what was the one reform that he was most proud of, he said “I abolished the collection of statistics.” Sir John believed that statistics are dangerous, because they enable social engineers of all stripes to justify state intervention in the economy.”

By the way, Hong Kong’s economic output per person is higher than Canada’s, and they only have a measly 1100 sq. km to work with and no natural resources. Thank god for all our socialist policies or we might actually achieve something magnificent!

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

Re: #127 Calgary

Just like when there’s an emergency, they’re trying to stave off a stampede. “Please form an orderly line towards the exits. Do not be alarmed. That smoke smell does not indicate a fire rapidly incinerating your surroundings.”

#139 Cato the Elder on 12.08.14 at 10:12 am

Re: #132 not 1st

You’re right. The market is sending signals that prices MUST FALL before demand is spurred again. Asset prices are too high.

Of course, our politicians are going to do everything in their power from allowing this crucial market mechanism to function. By continuing to try to inflate asset prices, they are going to prevent demand from ‘discovering’ the right price. This will prolong the depression.

Just like FDR did when he kept trying to inflate prices of everything like wheat. He thought it was smart to destroy wheat crops (during a near famine) to try to increase prices! What a sheer and utter moron. And yet, here we are, 70 years later, doing the same things.

How incredibly dangerous it is to give power to interventionists…

#140 Mr. Frugal on 12.08.14 at 10:13 am

It’s not like we’re going to stop producing oil. Some players will get squeezed out, some will reduce their capital expenditures and production will drop. At the same time, lower oil prices will result in an increased demand for oil. At some point, supply and demand meet up and long term investors, that were smart enough to buy on the dip, will benefit (i.e. $$$). In the mean time, the airlines are really going to benefit (more $$$). I don’t see any reason to freak out here.

These clowns that are bashing the U.S. don’t get it. You can dislike the U.S. and still profit from their recovery. Wow, talk about taking idealist viewpoints to the extreme. I like those folks south of the border; they’re paying for my retirement.

P.S. Higher U.S. Rates = Higher U.S. Dollar = Lower Canadian Dollar = Increased resource exports. Think lumber and a U.S. housing recovery.

#141 Incubus on 12.08.14 at 11:21 am

“The Fed’s actions worked. Now capital is streaming out of commodities, where it fled, hunkered and prospered for a while, into financial assets in anticipation of the next big story – global recovery.”

There will be no global recovery with low oil price, it will be a global deflationary collapse.

“Ten Reasons Why a Severe Drop in Oil Prices is a Problem Posted on December 7, 2014”

http://ourfiniteworld.com/2014/12/07/ten-reasons-why-a-severe-drop-in-oil-prices-is-a-problem/#more-39431

There is no collapse coming. But feel free to dither. — Garth

#142 bdy sktrn on 12.08.14 at 11:24 am

Suncor Energy Inc. (SU)
29.95 -1.36(-4.34%)

so glad i sold all energy funds a few weeks back – as many here were saying buy.

wait for another 10-20% THEN buy.

#143 liquidincalgary on 12.08.14 at 11:25 am

gasoline @ .949/L

god i miss king ralph ‘a pump jack in every backyard’

#144 bdy sktrn on 12.08.14 at 11:37 am

with the tsx (and XIU) getting ball stomped again to levels below those of 2000, 2008 and 2011 (infl adj) you cab be certain that more canadians than ever will run screaming form equities(etfs) straight into the arms of their local realtor.

If so, it is exactly why most people fail financially. They allow emotion to rule them, and make the wrong choices consistently. This helps explain why the 1% are not the 99%. — Garth

#145 Doug in London on 12.08.14 at 11:38 am

@Hawk, post #29:
The price of oil got driven artificially high (up to $105/barrel) by speculators earlier this year, even as a lot of new supply was coming on the market. Now, the oversupply is well known so prices are dropping which is what you would expect. Just as prices overshot earlier this year, they have or soon will undershoot below where they should be. You’re quite right, oil use is going up in the world and there is no easy substitute for it. Not long ago I was on the 401 near Pearson International Airport, in bumper to bumper traffic with all those other gasoline and diesel fuel consuming cars and trucks, and hearing the roar of a jet plane taking off every few minutes. You can see why I’m a nervous wreck worrying about falling oil prices.

In the short run, oil could and probably will get even cheaper than now, but in the long run it will be a good investment. Correct me if I’m wrong, but aren’t you supposed to buy when something is cheaper and most people are bellyaching about how bad it’s doing and saying it will only get worse?

#146 bdy sktrn on 12.08.14 at 11:42 am

and oil breaks 64 rtq 63.86

#147 Junkie_man on 12.08.14 at 11:46 am

#127 CalgaryBoy Ha I remember when my parent company bought out a rival,l they were told the same thing. One month later all the V.P.’s were bought out who made the announcement and a slow layoff ensued for them, until there were ten people left of the 55. And that was just the Toronto office.

#148 Mike S on 12.08.14 at 11:46 am

“I’ve suggested here for some time that you underweight Canada and overweight the US in your asset allocation”

Doesn’t it go against the wisdom in the balanced diversified portfolio?
If one was to do it recently wouldn’t it basically mean “do not rebalance” as US held steady (slightly up) while Canada is down?

‘Balance’ does not mean an even distribution between geographies. It refers to a balance between equity-based assets and fixed-income securities. — Garth

#149 Embassy of the People's Republic on 12.08.14 at 11:47 am

“China’s housing market is falling in 100 of its top 100 cities.”

Mr. Turner, you do not have our government authority to comment on our housing market.

Your violations of our anti-pun laws we take extremely seriously.

https://www.youtube.com/watch?v=MUeOIud0q-g

Your references to Joe Owe, bullion licking and bumwad, to name but a few, have put you clearly on the path to capital punishment if this continues.

At the very least, on your next visit here you will be interned without trial for 13 months in our naked sauna facility making Christmas ornaments for Dollarama.

Your cellmates will be Brad Lamb and Cato the Elder.

Govern yourself accordingly.

That is all for Mao.

#150 Mike S on 12.08.14 at 11:50 am

“There may be a case for demand areas in 416 to hold steady (after all, six million people live in the GTA)”

Would you please share this case with us?

I’m sure interested in the hood which avoided all the recent speculative demand, and just priced to perfection. So despite all the risk (interest rates, unemployment, …) it will just hold steady in the future correction

In the past I have published a long-term history of valuations in such a 416 demand area (Leaside) showing precisely the impact on prices of major events, including the 2008-9 crash. Seems a reasonable model for any area which is dominated by high income-earners. — Garth

#151 Piccaso on 12.08.14 at 12:00 pm

The pathetic Canadian stock market keeps crashing… down another 300 points as oil breaks $64

You have a loose definition of ‘crash.’ We are not even close. — Garth

#152 Cato the Elder on 12.08.14 at 12:06 pm

Folks, if McDonald’s is struggling to make money, we’re in big trouble. Low price food should never be a difficult sell.

It’s very obvious to anyone not dogmatically adhering to official government statistics that we NEVER recovered in 2008. It’s been a long, slow decline, that is rapidly getting worse as China+Russia detach themselves from Western Monetary enslavement.

#153 LL on 12.08.14 at 12:13 pm

…”By the way, the comment section on the weekend became a drop-in centre for all of the America-hating, conspiratorial, anti-establishment, bank-dissing, anarchist, libertarian, bullion-licking”…

Garth, you forgot the “contrarian”!

(It’s not a duplicated post, I posted earlier on the wrong blog)

#154 Retired Boomer - WI on 12.08.14 at 12:22 pm

#134 GeorgeSoonToBeRetired

First, congrats on the upcoming retirement.

The US population being comprised of all ages, and experiences has no single voice. Me, age 63 had parents, uncles friends etc who were in WWII. That experience shaped them, as the Viet Nam experiences shaped my generation.
When I saw the first gulf war (George the elder) he did it right.
When I saw the 2nd gulf war (George the lesser) he did it wrong. Ditto Afghanistan war.
We are still encumbered, it is costly. George the lesser is gone, his legacies yet live. I am tired of WAR! I do not wish to unlearn the history of how a country gets entangled in them.
Those who don’t know history, tend to repeat the mistakes of history. Whether it be WAR, investing, or anything else.

I hope you enjoy retirement, and enjoy a long, and healthy run during your retirement!

#155 not 1st on 12.08.14 at 12:28 pm

Garth, my ‘ilk’ thank you for the response.

Now lets get down to simple basic economic logic. The US buys raw goods from us and it buys manufactured goods mostly from china. China buys our raw products as well.

So now the suppliers of raw products are seeing their economies slow and less demand for their products. And the manufacturers of the finished products are seeing the same. On top of that commodities of all stripes being pounded.

So when your client doesn’t need your stuff anymore, you think thats a scenario for increased economic output?

On top of that, the only industry (oil) with sizable capex and skilled employment is going to stall in a global price war.

There is no way in h*ll these are positive indicators no matter what happens on the stock market.

Twenty bucks a week off your gas fillup ain’t going to stimulate the consumer either.

#156 Pleb in the colonies on 12.08.14 at 12:43 pm

“(By the way, the comment section on the weekend became a drop-in centre for all of the America-hating, conspiratorial, anti-establishment, bank-dissing, anarchist, libertarian, bullion-licking, Occupy nutjobs who weren’t busy stockpiling pallets of bumwad from Costco. Even in the teeth of irrefutable facts on growth, profits and jobs, they continue to spread the fiction that capitalism is a failed idea and the US heads for social and economic collapse. Sad.)”

Seems fitting where this all began: the fraud, corruption, criminality (there has been no justice and the statue of limitations is about to run out) is leading the “recovery”.

Keep up the good work, as long as my portfolio grows who cares.

#157 Dominoes Lining Up on 12.08.14 at 12:43 pm

Re: Will any of the 416 withstand a general RE drop?

“There may be a case for demand areas in 416 to hold steady…”

As I said before, “may” is the operative word, and events and unexpected consequences could still get so big and bad as to make the specialness of any little pockets irrelevant.

But Garth’s answer to #150 Mike S. really hits the nail on the head for good thinking on this.

Don’t look just at house prices, but people’s long term ability to finance themselves and weather any general downturn. How much do they have in other assets?

Incomes, in other words, is the best clue to this.

Leaside has household incomes of $300,000 and up. Vancouver broadly has under $70,000. Hence why they are so risky.

So in looking at Toronto, look at your maps for income levels to see which hoods might be most vulnerable to a real estate downturn.

It is an eye-opener, for example, to note that in the areas where $700-900K shacks have been flying off the shelves, the actual household incomes are pretty low still, much nearer that total city average.

So to the hipster west end and the Danforth east, watch out for a drop that probably will look more like what is coming to the 905 than Leaside. Scarborough, Etobicoke? Best to close your eyes.

Unfortunately, this does mean that most recent buyers will be royally screwed.

http://www1.toronto.ca/city_of_toronto/social_development_finance__administration/files/pdf/ct06_income_private_households_median.pdf

If you are living in a house in Toronto, look at your neighbours and their lifestyles for the answer to what will happen to your neighbourhood house prices.

For most, it’s a low-income, one asset strategy at play.

That’s trouble.

#158 Doug in London on 12.08.14 at 12:47 pm

@bdy sktrn, post #144:
Yes, while XIU is down 8% off its high, I wouldn’t exactly call that being stomped. Oil ETFs, like XEG and USO-NY are the ones getting stomped these days. Did I hear someone say buying opportunity for the above or other ETFs that are presently on sale?

#159 Jonah on 12.08.14 at 12:56 pm

I have a question for Garth:

If lets say there is a market correction and house devalue in 2015 . For houses that have not been built (completed) by builders yet but buyers have made down payments. Would the house be closed with new price or the buyer would have to purchase the house at agreed upon price? How can banks give a loan for lets say 650,000 house that has now been devalued to 450,000? Would builder be required by law to adjust the price or the buyer would have to take the loss?

#160 Mike S on 12.08.14 at 1:13 pm

“‘Balance’ does not mean an even distribution between geographies. It refers to a balance between equity-based assets and fixed-income securities. — Garth”

But do you advice to constantly adjust the distribution between geographies in the equity part, based on macro economic analysis? If so which analysis would that be?

Annual rebalancing is fine for most people. — Garth

#161 PJ on 12.08.14 at 1:24 pm

Yes, Us is recovering. Of course, how isn’t that obvious? Government Sachs and Bloomberg said it, so of course, must be true then. What was I thinking.

Typical Keynesian pro money printing nonsense.

I would much rather take my make-believe paper money and buy artificially deflated real assets that are paid for, than to buy more make-believe artificially over inflated intangible paper assets sitting at all time highs.

But hey, believe what you want to believe.

PJ

#162 Chickenlittle on 12.08.14 at 1:26 pm

Smoking Man:

“We should have a get plastered night and type on GF.

It would be intetesting.

Hey got a new pooch, handsom devil on my blog”

LOL!!!! That would be hilarious!

What kind of a dog is it? ? Who watches it when you go to Vegas?

#163 chapter 9 on 12.08.14 at 1:29 pm

#97 Retired Boomer
No media coverage about Dec. 7-odd! Here is something else that one never hears about.
Sat. July 28,1945 a U.S. Army B-25 bomber weighing 10 tons slammed into the 79 floor of the Empire State building in heavy fog. Upon impact the fuel exploded filling the interior of the building with flames all the way down to the 75th floor.Parts of this plane were embedded in and on top of nearby buildings one of the engines went across the street and landed in a penthouse. Flames were shooting out of the hole the plane had punched in the side of the building.

Did the building collapse,vaporize,implode, no, it is still here. In fact the integrity of the building was NOT AFFECTED.

So I guess in the next 30 years engineering standards just got progressively worse? After all a 47 story building with a few fires imploded in less than 7 seconds. And the twin towers were literally vaporized.
Just a thought!!!!

#164 Mike S on 12.08.14 at 1:29 pm

“In the past I have published a long-term history of valuations in such a 416 demand area (Leaside) showing precisely the impact on prices of major events, including the 2008-9 crash. Seems a reasonable model for any area which is dominated by high income-earners. — Garth”

So is buying a 3M house based on 300K family income a better idea then buying 1M house on 100K family income?

I guess you can make that point based on availability of cheap credit in the sub 1M range. However, what does it have to do with 6M people in the GTA?

So far every (recent) house/condo buyer I talked to makes the case that he just bought the special property in a special location, that will go up for sure, citing immigration/land constraints/etc

Just what I said. And houses in Leaside cost $1.25 million, not $3 million. The annual income level in that district is about $340,000. So there’s more proof the ‘wealthy’ are different. They’re more conservative. — Garth

#165 Mike in Toronto on 12.08.14 at 1:32 pm

142 bdy sktrn

The price of oil may stay down until Putin is out of power.

http://www.businessinsider.com/russia-saudi-arabia-and-oil-prices-2014-10

As far as I’ve heard the Saudi motives aren’t clear. If there was a genuine drop in demand, I would expect a drop in production to keep prices up. But Russia selling oil to Europe and militarizing the Crimea does not seem to be in Saudi Arabia’s best interest.

Collapsing the Russian oil pipeline, and crushing the Ruble may shut Putin up.

#166 Piccaso on 12.08.14 at 1:46 pm

Sorry… make that 400 points

#167 jess on 12.08.14 at 1:53 pm

In early June 2014, soon after the scandal became public, the U.S. Senate passed a $500 million aid bill for the VA
According to a 2010 VA memo, the problem of “gaming strategies” inside the VA to meet performance goals dates to at least 2008.
=======================
wiki/Charles_R._Forbes :
Charles Robert Forbes was appointed the first Director of the Veterans’ Bureau by President Warren G. Harding on August 9, 1921
During his tenure as director, Forbes ignored the needs of the wounded veterans. In the less than two years that Forbes held his position, he embezzled approximately $2 million, mainly in connection with the building of veterans’ hospitals, from selling hospital supplies intended for the bureau, and from kickbacks from contractors. The budget for the Veterans’ Bureau during his tenure was $1.3 billion in total. Forbes had rejected thousands of legitimate claims by veterans.[6]
==============================

Hiring spree @ the Department of Veterans Affairs needs thousands

SEI program
https://www.vetjobs.com/
VOW to Hire Heroes Act
http://www.veteransenterprise.com/index.php/news/categories/society-a-politics/242-employers-vow-to-hire-heroes
The IRS has released the guidance and forms that employers can use to claim the newly-expanded tax credit for hiring veterans.
http://www.benefits.va.gov/vow/
http://www.whitehouse.gov/blog/2011/11/21/president-obama-hire-veteran
=========
http://thechronicleherald.ca/canada/1255752-veterans-affairs-managers-reaped-rewards-after-cuts

#168 bdy sktrn on 12.08.14 at 1:56 pm

it’s tough being in the tsx these days! how many more ‘bottoms’ until the real one?

looks like a ‘lower high’ is in , the ‘lower low’ is 200 points below.

if oil continues to the 40’s then tsx=12k

#169 LP on 12.08.14 at 1:56 pm

#149 Embassy of the People’s Republic on 12.08.14 at 11:47 am

At the very least, on your next visit here you will be interned without trial for 13 months in our naked sauna facility making Christmas ornaments for Dollarama. Your cellmates will be Brad Lamb and Cato the Elder.
***************

Now there’s a circle of Hell Dante Alligheri didn’t foresee!

#170 Mark on 12.08.14 at 2:15 pm

“Sat. July 28,1945 a U.S. Army B-25 bomber weighing 10 tons slammed into the 79 floor of the Empire State building in heavy fog. Upon impact the fuel exploded filling the interior of the building with flames all the way down to the 75th floor.”

Right. There was a multiple of the amount of fuel on-board the 767s compared to the maximum take-off weight of the B-25, fully loaded (ie: 10,000kg). Please, if you’re going to fill the comments with nonsense, at least bother to do some basic research. A 767 fuelled for a 6 hour flight + reserves would be nearly 35,000kg of fuel alone.

#171 Cato the Elder on 12.08.14 at 2:19 pm

Re: #165 Mike

The west is at fault, not Putin. The west has moved NATO right up to it’s borders despite promises going back decades that if the USSR were dissolved, NATO would not encroach Russian territory.

The US overthrew the Ukrainian government and it was replaced with pro-EU alternatives. Those current officials are committing de facto genocide in their eastern regions which are desparate to leave the enslavement of western banking interests that have destroyed their economy.

Just to get a sense of how completely vile, disgusting, and crazy the people in charge are, they were willing to shoot down an airliner to try to foment a war with Russia.

This is VERY dangerous and we should stay the hell out of there. But Harper and his cronies are being good lap dogs for the US and endangering Canadians by being hostile.

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

Saudi Arabia is doing the bidding of the US in trying to bankrupt Russia. The US has the kind of power because they simply threaten the Saudi Royal family, and they get what they want. Do the ‘elites’ in charge of the US (bankers) care if that destroys jobs in North America (North Dakota/Alberta)? Nope. They only care about enslaving the world with debt.

Russia worked very hard after the fall of the USSR to get out from under all the debt that was piled on it. It has incredibly low national debt. They are not beholden to foreign interests like so many western nations.

And the west is doing everything in it’s power to undermine what Russia is trying to achieve. Russia is trying to get out from under the parasitic US dollar reserve system, like we should. But we won’t – too many apologists and weak willed people.

Long story short: we’re the bad guys in this story. Don’t think that’s possible? Neither did the German people when the Nazis took over. We’re the antagonists. We’re on RUSSIA’s doorstep.

How would we feel if Russia was building up a military presence a few miles away from Quebec when they held their referendum? Would we be angry? You bet.

#172 Mark on 12.08.14 at 2:21 pm

“If lets say there is a market correction and house devalue in 2015 . For houses that have not been built (completed) by builders yet but buyers have made down payments. Would the house be closed with new price or the buyer would have to purchase the house at agreed upon price? “

Agreed upon price. If they don’t have the money and/or can’t obtain credit, then the builder will have to sell the house and sue the defaulted buyer for damages, if incurred. In past housing downturns, often this ends up in builder bankruptcy, as usually buyers don’t have a lot of resources either.

#173 tom bunder on 12.08.14 at 2:39 pm

Canadians’ debt levels ‘unsustainable’ Fitch warns

Ratings agency gives banks negative outlook as rate hikes loom in 2015

http://www.cbc.ca/news/business/canadians-debt-levels-unsustainable-fitch-warns-1.2864352

#174 gladiator on 12.08.14 at 2:41 pm

@170 Mark:

Jet fuel, regardless of quantity burned, does not reach temperatures high enough to melt steel. Whether it was 10,000 or 35,000 does not matter. Also, even if you combine it with paper and office furniture, it still will not melt steel.
Please, if you’re going to fill the comments with nonsense, at least bother to do some basic research.

#175 Inglorious Investor on 12.08.14 at 2:56 pm

TSX down 10% from peak right now. 20 more to go. (?)

TSX up YTD 6%. 12-month gain 8.5% – even after the oil bath. — Garth

#176 Cato the Elder on 12.08.14 at 3:00 pm

I love all the environMENTALists. Now that they’ve held up Canadian oil development for so long, we’re experiencing a price crash.

And they’re the exact same people that complain there are no good paying jobs – well look in the mirror!

The low price could just be temporary. But it does serve as a reminder that we should develop and sell these resources as quickly as possible before we miss our window. There’s no guarantee that oil is going to be as widely used in the future as it is today.

#177 RealistvsExtremist on 12.08.14 at 3:15 pm

#88 Sheane Wallace on 12.07.14 at 10:53 pm
can we have that graph extended back to 1999?

Fifteen years? Who cares? — Garth
+++++++++++++++++++++++++++

Agreed. Because govt and sheeple are too stupid to learn anything from…..history. Exhibit A: December 8th/2014

#178 Inglorious Investor on 12.08.14 at 3:17 pm

“Morgan Stanley predicts oil prices could drop to $43 US a barrel next year”

As Russel Peters would say: “Fahntahstic!”

US in a sweet spot. Rest of world down. Causing oil prices to go down. US rising? Even if only temporary before the great zombie apocalypse, what a boost to the US economy!

Based on inflation, I’d say $43/barrel is just about right.

#179 saskatoon on 12.08.14 at 3:22 pm

early present for cato et al:

https://www.youtube.com/watch?v=8DOnAn_PX6M

honestly, i don’t know how anyone could watch even the first hour of this presentation, and not have serious questions.

enjoy (?)

#180 bdy sktrn on 12.08.14 at 3:23 pm

suncor -7.1%
oil to cross 63 imminent – wow

#181 Inglorious Investor on 12.08.14 at 3:37 pm

#171 Cato the Elder on 12.08.14 at 2:19 pm

There are no ‘good guys’ and ‘bad guys’ in international relations/politics/war etc. Only self interest. Everyone is competing in whatever way they can to gain money, power and control. You were a Roman consul, you should know that.

#182 jess on 12.08.14 at 3:39 pm

the other activists… the “unlockers of value”
When the company has little debt and an overfunded pension plan….makes its balance sheet “ripe for a sale.”

http://www.nytimes.com/2014/12/07/business/timken-bows-to-investors-and-splits-in-two.html?action=click&contentCollection=Middle%20East&module=MostEmailed&version=Full&region=Marginalia&src=me&pgtype=article

#183 Harbour on 12.08.14 at 3:42 pm

Morgan Stanley says $43 oil

#184 Inglorious Investor on 12.08.14 at 3:43 pm

DELETED

#185 Toronto Builders shutting it down on 12.08.14 at 3:54 pm

They know whats coming , just look at these numbers…

http://www.huffingtonpost.ca/2014/12/08/toronto-calgary-housing-starts-building-permits_n_6289018.html?utm_hp_ref=canada-business

#186 gladiator on 12.08.14 at 3:55 pm

DELETED

#187 NoName on 12.08.14 at 3:56 pm

@cato the proverbial dead horse bitter

so Mr/Mrs or what ever you are Cato the Elder, i do read all of your posts, and i have to admit; there is some truth in what you are saying but, man it do us and do yourself a favour, power down a bit.
https://www.youtube.com/watch?v=xgxa0UbYLZw

tsx retracting so what, bigger drop, bigger future returns!!! i personally would love to see it around lot more lower than this. but that just me.
http://youtu.be/B1RhAWzUCsc?t=16m2s

@Gtrz4peace
you cant play with my toys !!!
https://www.youtube.com/watch?v=oDNcL1VP3rY

#188 Inglorious Investor on 12.08.14 at 4:01 pm

You delete my comment on 911 but you allow a link to a 911 video that is exactly in line with my comment thru?

Not a 911 blog. Do it again, you’re gone. — Garth

#189 Mark on 12.08.14 at 4:02 pm

“Jet fuel, regardless of quantity burned, does not reach temperatures high enough to melt steel. “

Not true. They don’t design aircraft engines with exotic alloys and provide elaborate internal cooling systems just for the fun of it. And combustion of liquid hydrocarbons, ie: jet fuel, most certainly can be used/can act to weaken and/or melt steel. So please spare us the conspiracy theory nonsense.

#190 Alberta faces a world of financial pain on 12.08.14 at 4:09 pm

Many in Alberta will lose it all, job, house and family. Oil going to $55 and Alberta is finished. Housing going to crash 50%

#191 Mike S on 12.08.14 at 4:10 pm

“TSX up YTD 6%. 12-month gain 8.5% – even after the oil bath. — Garth”

I want a nice correction, is negative YTD too much to ask for?

#192 Cdn Flier on 12.08.14 at 4:31 pm

174 gladiator on 12.08.14 at 2:41 pm
@170 Mark:

Jet fuel, regardless of quantity burned, does not reach temperatures high enough to melt steel. Whether it was 10,000 or 35,000 does not matter. Also, even if you combine it with paper and office furniture, it still will not melt steel.
___________________________________________

Yes it will

#193 Mark on 12.08.14 at 4:31 pm

“Many in Alberta will lose it all, job, house and family. Oil going to $55 and Alberta is finished. Housing going to crash 50%”

Housing was still going to crash, even if oil didn’t go down. Simple oversupply, relative to demand. If anything, housing should be cheaper in a location with abundant local investment opportunities because investors have places other than housing to invest. Why keep your money in a house with a 3%/year return (ie: P/E = 35) when, for instance, you can invest in a plethora of oil and gas businesses for a P/E of 10?

#194 astronaft on 12.08.14 at 4:35 pm

#171 Cato the Elder

It’s all nonsense about Russia. This half drunken bear needs to be brought to its knees.

#195 HAM money pouring out of Canada on 12.08.14 at 4:35 pm

Oh Oh realtors how are you going to spin that into a good thing as not only is Canadian energy crashing but Canadian RE will get hit HARD!. Look for SHARP drop in prices in the three big cities over the next year. RE is going to be DEAD.

#196 Harbour on 12.08.14 at 4:41 pm

TSX loses half of 2014 gains

12-month gain is 9.6%. What disaster? — Garth

#197 Doug in London on 12.08.14 at 4:54 pm

@Cato the Elder, post #176:
If it wasn’t for environmentalists holding up development, there would be even more oil production and prices for oil would have fallen sooner and even more than they have. We need MORE environmentalists holding up development to keep oil prices up!

#198 bdy sktrn on 12.08.14 at 4:57 pm

TSX up YTD 6%

i get 3.98% real time after todays bathing.

At the close: 6.57% up on 2014. — Garth

#199 TurnerNation on 12.08.14 at 4:58 pm

The exits have been hit.

#200 Smoking Man on 12.08.14 at 5:05 pm

#162 Chickenlittle on 12.08.14 at 1:26 pm
Smoking Man:

“We should have a get plastered night and type on GF.

It would be intetesting.

Hey got a new pooch, handsom devil on my blog”

LOL!!!! That would be hilarious!

What kind of a dog is it? ? Who watches it when you go to Vegas?
……….

Its a toy poodle, family watches the dogs, but hotels are becoming pet friendly, so we can take them the next Alien hunt adventure.

#201 Doug in London on 12.08.14 at 5:08 pm

@Mike S, post 3191:
If negative YTD is what you want then buy oil stocks or ETFs. XEG is down about 24% to date, and USO-NY is down 31% to date. Could they go lower? Of course they could. If you buy now, in the next 1 to 6 months you may look like a fool but 2 to 3 years from now you’ll probably look like a genius.
I think I’ll Email my neighbour who went to Bangkok last week. How did he get there? On a jet plane, of course. Tell me, are these jet planes powered by inexhaustible energy from the sun, much like gliders that ride thermals?

#202 Harbour on 12.08.14 at 5:10 pm

Ways to play the Canadian Energy sector

Short it

#203 Holy Crap Wheres The Tylenol on 12.08.14 at 5:18 pm

#97 Retired Boomer
No media coverage about Dec. 7-odd! Here is something else that one never hears about.

__________________________________________

It was covered duhhh. It was called Pearl Harbor!
As for the building issue your sounding like Smoking Man when he is drunk.
The two buildings are completely different construction methods and materials.
Oh and yes it was covered but in a smaller print back in 1941.

#204 Cato the Elder on 12.08.14 at 5:19 pm

Re: #190 Alberta

It really is a shame. It’s a shame because we don’t need to rely on one particular industry to fuel our economy.

If we had free markets, less regulation, less taxes, and less bureaucrats presiding over us, capital would flow to new projects that grow the economy.

But that won’t happen. Politicians, who receive their bread and butter from taxes, have a lot of trouble in reducing them. It requires a special breed of person to admit that their profession should really be eliminated, or at the very least, curtailed significantly.

No, they always want MORE power and to intervene MORE. All that in spite of thousands of years of history to draw on about what works and what doesn’t.

Keynesian economic policy is flawed – it doesn’t work, and causes suffering for millions. Austrian economics is the only economic school of thought that CLEARLY and concisely explains how an economy grows and functions from the very beginning (a subsistence economy). It also clearly explains why we have recessions.

What would happen if Alberta slashed all taxes down to zero? Eliminated all regulations? Let the market function. Protect property rights, enforce contracts, police fraud. All governmental interference should be retrospective – not involve prior restraint and holding people back.

I’ll tell you what would happen: all kinds of industries would spring up there. Even manufacturing ones that are based in Ontario would pick up and leave.

Huge natural resources only give us a natural advantage. It does not confer a guarantee at economic prosperity – that relies on smart policy.

Look at Hong Kong and Switzerland for examples of how to run a better country, in spite of geological/geographical constraints.

God, but you’re tedious. — Garth

#205 CalgaryRocks on 12.08.14 at 5:25 pm

#50 Timmy on 12.07.14 at 8:21 pm
Question is how low will the CDN dollar go and when do we buy USD?

Who knows.

You buy a bit every time it drops. And sell a little bit every time it goes up. The ranges & lot sizes are up to you and your risk tolerance. I use around a 10day ADR

I’ve been doing this for years at interactivebrokers.ca because they have a .00005 (5$ on 100K$) spread and a 2.50$ commission whether you trade 10K or 100K+. So basically it’s free trading.

And you should use their scale trader to automate it all. Literally makes money for you. (Since a lot of the moves are after the London UK open which you would sleep through if were doing this manually)

#206 Bill Gable on 12.08.14 at 5:25 pm

I would hate to lose this Blog! One of the best sources of real investment advice in this Country and beyond, IMHOP.

Keep up the sterling work, Mr. Turner.

You are saving people from a grisly end – if they pay attention.

Cheers.

#207 Mike In Toronto on 12.08.14 at 5:32 pm

#171

“The US[sic] overthrew the Ukrainian government”

I think you meant USSR. The rest, like my own position on this, is speculation.

Fun to have beer over, but too long to discuss on a blog.

#208 Paul on 12.08.14 at 6:00 pm

HAM money pouring out of Canada on 12.08.14 at 4:35 pm

Oh Oh realtors how are you going to spin that into a good thing as not only is Canadian energy crashing but Canadian RE will get hit HARD!. Look for SHARP drop in prices in the three big cities over the next year. RE is going to be DEAD.
———————————————————-
The good ones get them going in and going out.
The marginal ones just fade away = less competition

#209 robert james on 12.08.14 at 6:09 pm

The beginning ? http://calgaryherald.com/business/energy/eog-resources-closing-canadian-hq-in-calgary

#210 Retired Boomer - WI on 12.08.14 at 6:16 pm

#203 Holy Crap Where’s The Tylenol?

Have no clue what you are referring?

Check your meds.

#211 Mike S on 12.08.14 at 6:22 pm

“If negative YTD is what you want then buy oil stocks or ETFs. XEG is down about 24% to date, and USO-NY is down 31% to date. Could they go lower? Of course they could. If you buy now, in the next 1 to 6 months you may look like a fool but 2 to 3 years from now you’ll probably look like a genius.”

I want negative YTD in the entire TSX. If in the meanwhile the S&P can go up, it is even better, this will create a great opportunity to re-balance.

Don’t understand people who get upset by minor corrections

#212 Smoking Man on 12.08.14 at 6:22 pm

For those of you that bought the official narrative, regarding trade centers..

I have a business proposal, find out , research how building 7 came down at free fall speed by a few small fires.

Think of how rich you can become. No wiring, no explosives, no software.

Just start the fires in the right spot and in a few hours a 48 story building goes cleanly down at termal velocity.

How can you lose….

#213 Victor V on 12.08.14 at 6:39 pm

https://ca.finance.yahoo.com/news/harpers-flawed-10-000-tfsa-150000674.html

It’s now a foregone conclusion that Prime Minister Stephen Harper will increase the annual contribution limit of the Tax-Free Savings Account (TFSA) next spring when the Tories balance the budget, likely boosting it to $10,000. It’s a political move-engineered to bolster his re-election bid-and at first glance it’s great news for wealthy Canadians looking to tax shelter more of their investment earnings. But some tax experts are worried that it’s too good-that the government is giving up so much revenue, the tax break might not be sustainable over the long haul.

Now where did you read that first? — Garth

#214 Doug in London on 12.08.14 at 6:53 pm

@Mike, post #211:
Back in my school days English was one of my weaker subjects, and it still shows today. Whenever I see the words minor correction, I instead read the words buying opportunity. Whenever I read the words major correction, I read it as great buying opportunity. Do I just need new glasses or is there a bigger issue here? Anyone else here have these same symptoms?

You’re quite right, if the S&P goes up more and the TSX drops more, it will be a good time to rebalance. XIU below 20 bucks? Bring on those early Boxing Day sales!!!!!!!!!

#215 Doug in London on 12.08.14 at 6:55 pm

@Harbour post #202:
The time to short the Canadian Energy Sector was 6 months ago, when XEG was at $21, not now.

#216 Derek R on 12.08.14 at 7:36 pm

#204 Cato the Elder on 12.08.14 at 5:19 pm wrote:

What would happen if Alberta slashed all taxes down to zero? Eliminated all regulations? Let the market function. Protect property rights, enforce contracts, police fraud. All governmental interference should be retrospective – not involve prior restraint and holding people back.

I’ll tell you what would happen: all kinds of industries would spring up there. Even manufacturing ones that are based in Ontario would pick up and leave.

Nope. What would actually happen is that rents and land prices would rise until they were sucking just as much money out of the economy as taxes were formerly.

Oh yes, and then Alberta’s infrastructure would start to collapse because of all the money that was being spent on rent and mortgages instead of on taxes to enforce property rights, to fight fires and to keep the roads in good shape.