In case you missed it, Wall Street exploded higher on Thursday (421 points), but oil resumed its slide ($54.11) and the layoff notices are flowing in Calgary. This is the kind of world this pathetic blog told you to be on the lookout for. And prepare for. It’s a world in which you want to own financials, not stuff. More US and less Canada.
In the ‘stuff’ category is houses. And it’s started.
Home sales in the first two weeks of December didn’t really move from last year. Says local perma-bull realtor/pumper Mike Fotiou, in awe: “Sales could fall below year ago levels. Falling sales is a precursor to falling prices.” And listings are bloating while sales stutter, showing lots of cowboys have decided to absence is the better part of valour. New listings have spiked 35% and active listings are up by a third compared to last year.
Says Mike, now on a Prozac-and-JD diet, “If sales drop off in 2015 as many expect, inventory will continue to grow and result in depressed prices.”
Ex-realtor and housing consultant Ross Kay, who has the same relation with CREA that Sony does with Kim Jong-un, says he saw this coming. “Calgary went negative on December 15th,” he tells me, “and Toronto went negative on December 16th, a week earlier than we predicted.”
That means, according to his numbers (which weed out the usual realtor number-massaging) that Calgary sales are down about 1% from last year, while Toronto’s are flat. “As of December 17th sales volumes in both Calgary and Toronto are now in the negative, comparing apples to apples.”
Of course, most people haven’t heard this, because they get their news from the MSM, which gets it from the real estate boards. According to the Toronto cartel, sales increased by 1.9% in the last two weeks (over the same time last year), and “Greater Toronto Area households remain upbeat about buying a home, as evidenced by the increase in sales compared to last year.” The board also says the average price is 8.6% higher than a year ago, but fails to mention it’s $24,259 lower (a decline of 4.1%) than in April.
Meanwhile, more and more souls are starting to discover this dichotomy between financials and bricks. The Bank of Canada now warns houses are inflated, joining the IMF, World Bank, The Economist, Morningstar, most US ratings agencies, Robert Shiller and Demographia (among others). I gave you a hunk of a column by CBC editor Don Pittis the other day saying similar. Now pesky little Rob Carrick at the Globe is back on board.
“The ugly stuff going on in the stock market lately could happen in housing,” he warned the other day. “So follow the same 10-year rule as a home buyer that you should as an investor. If you can’t wait a decade or more for your transaction to make financial sense, don’t do it.”
Did he clear that with the advertising department, I wonder? Or the dinglenuts on the city desk who use words like ‘hot’, ‘torrid’ and ‘steamy’ to describe every realtor release? (Now I’m a little aroused.)
Apparently not. “It’s time to start getting real about housing – the longer it keeps rising, the sharper the ensuing adjustment will be. We live in a jittery, news-saturated financial world today that can take shifts in sentiment about assets such as oil or stocks and amplify them into wipeout trends. Houses don’t have immunity. They are financial assets, just like stocks, gold bars and gallons of oil, which is to say prices move both up and down.”
Absolutely. But the trouble is, with 49% of all real estate buys now being done by virgins, many of them weren’t even little wrigglers when the last housing wipeout occurred in the early 1990s. They have no idea that 10% or 20% of their equity can be blown off in a few months, or that interest rates weren’t always 3% (and soon won’t be, again).
Worse – as the wise people now flooding realtors’ offices with listings in Cowtown know – real estate can get colder than you spouse when you buy her a Dyson Cyclone Upright for Christmas. Houses become illiquid astonishingly quick. The slower sales get, the more listings accumulate and the more reticent buyers become. Only meaningful price hacks can entice the brave to buck the trend and buy. Wait. You’ll see this is so.
Meanwhile, why did investors storm Wall Street this week? Because cheap oil, that’s hurting Calgary (where houses cost twice what they do in Houston), will accelerate growth by increasing the disposable income of millions who now spend less on gas and home heating. Ditto in Europe, Japan and China. All the leading indicators are green, and 2015 looks to be one promising mother of a year for financials.
No surprise here, though. How many times have people been told that with epic debt and a single, swollen asset, all we needed was one economic shock to change everything?
Looks like it landed.
195 comments ↓
Speaking of “going negative”, Switzerland’s official policy rates are now going explicitly negative:
http://www.bbc.com/news/business-30528404
This is likely in Canada’s future as the deflationary abyss facing the Canadian economy deepens. And, actually far fairer to the economy than US-style “QE” which sprayed money at very specific asset classes, to wit: mortgages, and government bonds, with little reference to their true market demand.
“Did he clear that with the advertising department, I wonder? Or the dinglenuts on the city desk who use words like ‘hot’, ‘torrid’ and ‘steamy’ to describe every realtor release? (Now I’m a little aroused.)”
Wait! I thought I was dinglenuts? This is AWESOME
cheap oil……will accelerate growth by increasing the disposable income of millions who now spend less on gas and home heating.
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YESTERDAY SEVERAL PEOPLE PONTIFICATED THAT the saving from gasoline and heating would be used to PAY DOWN debt , rather than being spent.
HA.
If there is one thing history has shown, give an American a buck in his hand, and he’s off to BEST BUY or AMAZON to buy something. Or she’s renovating the bathroom.
Sorry DOOMERS and GLOOMER, America is back, as will be Europe and Asia soon. Just do yourselves a favour and buy some SPY so you can feel good about it.
FIRST……COULD NOT HELP MYSELF..
Right on Garth. There is going to be a lot of for sale signs buried in the snowbanks all winter long now. They will be visible again in the spring when the house will be even more overpriced. Good luck with that
Houseageddon is here!!!
Got your advice Sir and bought new stock QSR Tim’s+King. I went ballistic 31 k on TFSA, guess what…. I make +$3200 in 4 days. Am I first.
Garth I just want to say thank you for your blog this year. You’re writing is poignant, hilarious, and so consistent (6 days a week, every week)
So here’s an early Merry Christmas from yours truly. Thank you for educating me and my wife, and I wish you all the best over the holiday season good sir!
Sincèrement,
Jean-Claude VanDammeCouver
“It’s GO time”
Hi Garth
I’m sitting on nearly 100k in cash and my investment advisor hasn’t bought anything since October. What should I do?
you make Prozac-and-JD diet sound like a bad thing…
I think this coming spring GTA and Vancouver will have their final good spring. Spectacular spring, in fact. Then a sharp downturn from there. The capitulation, the final hurrah. There are still some moists out there. They (and their parents) just don’t get it until it smacks them in the wallet.
Given you have a long term investment horizon, why would you sell Canadian now to buy American instead of just performing the usual rebalancing, and therefore buying more of the cheap Canadian assets?
“real estate can get colder than your spouse when you buy her a Dyson Cyclone Upright for Christmas.”
SH!T!!!!
um……I mean, D’Oh!!!!!
I just spent $600 on that Garth. Now what the heck do I do? I already got Marge a new washer for our 25th.
Text me at Moe’s if you have an idea. Thanks for nothing, why you little……..
( :(
2015 should be a regular riot Alice. I’m glad I found someone eight months ago to take on over 200,000$ Of debt for me. Oh and they also gave me a gift of tens
Of thousands of dollars on top of that. Totally Rad! Now I’m debt free and renting a sweet 2800sf house in kelowna with a lakeview from nearly every room. For 1500$ a month lol! Now that I’m all hunkered down I sure feel ready. Thanks Garth!
A friend in Calgary has now dropped the price on his house by 50 grand. I wish him luck.
I think today’s storming of Wall Street was more to do with good old Janet saying no interest rate increase for another three months.
Vancouver real estate market will not get affected as these laid of people from Alberta will move to BC
Garth, you just don’t see the real deal out there;
Toronto is more expensive than New York because its world class with rich immigrants.
Calgary is more expensive than Houston because we have oil.
Vancouver is more expensive than Seattle because we have the mountains and ocean.
And Saskatoon is more expensive than Miami because of potash.
I moved to a lake community in Calgary about 18 months ago. At the time, I would go to work and see a for sale sign outside a house. When I would come home it would be sold. As a single income making about 80k gross a year I knew I couldn’t afford any of these places and didn’t mind renting. Flash forward to today, I’ve seen houses, town homes, and condos with for sale signs popping up everywhere and they are not moving. Now that I’ve built up a decent savings and paid debt I cant decide whether to go full force with investing through my TFSA come the new year or buy a place. Calgary is nice. The people are great but they have to realize property is not a ‘right’ (nor is a Beamer or Mercedes) but everyone has one whether they can afford it or not. Both can be obtained through hard work but with interest rates so low the ‘now’ generation isn’t willing to compromise or hold off. They buy what they want when they want. Calgarians really are kind, thoughtful, caring people, they are just a bit too spend happy (total stereotype I know). Alberta needs a bit more East Coast and less Texas when it come to fiscal financial responsibilities.
“The board also says the average price is 8.6% higher than a year ago, but fails to mention it’s $24,259 lower (a decline of 4.1%) than in April.”
What is the significance of April? Are you saying that April 2015 will also be 4.1% lower? Because I highly doubt that, I think it will be higher. With low rates Toronto is looking at another good spring market.
DELETED
Some parts of Calgary are dipping into 2008 pricing. House buy house.
Funny you don’t like rob carrick Garth he preaches the same things you do and has warned about an overheated housing market in numerous articles, he even has some pieces about reinting vs buying that suggest renting…. Maybe you can ask him for a feature piece?
Where did I said he’s unloved? — Garth
Too hedge or not to hedge? I’m a bit fuzzy on this topic and most of the websites I’ve looked at don’t give the greatest info. I’m not sure if I should be buying VUN or VUS.
your saying all indicators are green but buying as the markets are sliding south is tough with so many saying this is a big world wide long term depression with extreme volatility should i wait a few weeks or go hide in the woods i don’t have much money to risk and naturally trying to maximize advice from all directions its no wonder substance abuse is popular thanks for your blog have a great holiday
#132 Mister Obvious on 12.18.14 at 3:32 pm
There isn’t really any ‘tax free compounding’. All compounded gains are subject to tax at withdrawal time or when the estate is settled at death.
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Let me do the math for you. Assume portfolio yield is 10% interest, and marginal tax rate is 50% for simplicity. You save 200k of your gross employment income (before tax).
RRSP Scenario : You invest the full 200k. After one year you have 220k (10% increase). You withdraw it all: you net 110k after tax.
Non-registered Scenario : You invest 100k (remember this is now after-tax money). After a year you have 110k, on which you owe 5k of tax. You net 105k after tax, which is lower than the RRSP scenario.
Compound this effect over several years and you are clearly better off inside RRSP than outside. Granted you lose the capital gain 50% exemption inside RRSP but over time the tax-free compounding will crush the non-reg portfolio regardless. Not even close.
The best way to convince yourself is to do the math.
Garth,
I bought a house in 2010 with 5% equity and it’s gone up by about 30% in value so I have about a 100,000 to play with.
I’m thinking about taking about $75,000 off my home equity line of credit and buying Suncor Stocks.
Good idea?
I could make a killing right?
The Purpose of Having an Advisor
Number 8 I’m stupid asked:
Hi Garth
I’m sitting on nearly 100k in cash and my investment advisor hasn’t bought anything since October. What should I do?
******************************************
You should blame your advisor. That is what advisors are there for.
Clearly YOU knew you should have been buying on Monday. But your advisor was too clueless.
Given this, you ought to change your handle to “You’re Stupid, and I’m not.”
32 years old and just sold my car board box in the sky in downtown toronto ( university and adelaide) and pocketed 140 g’s. I’ve passed time on realtor.CA or browsing home mags ever since i scrapped together enough coin to actually start thinking about purchasing. I was looking to buy a house up here in hamilton and realized the 140 I made off my place downtown toronto which I bought 3 years pre sale and held for another 4 could only get me into a home I desired here in hamilton that I felt was 80 -100 g’s overpriced. Needless to say renting isn’t all that bad right now. I was checking out some pre sale condos downtown hamilton when I realized my dream home wasn’t in the picture yet and came across a 2 bedroom, 800 Sq foot 21 floor cono for 330000. Where can a downtown hamilton condo go from there? After rate hikes? Yuk
#15 North Burnaby
“Vancouver real estate market will not get affected as these laid of people from Alberta will move to BC”
Glad to see the RE cartel’s “digital influencers” are hard at work… Denial is not just a river in Egypt.
Well, the ones that flocked to the oil patch from BC may be back sooner than planned to be unemployed here, instead of the frigid tundra of Alberta, that much is true.
Or if they’re really lucky they might find work in a same/similar field eventually by undercutting their highly-skilled out-of-work peers (competing for the same jobs in a recessionary economy in the 2nd most unaffordable place to live on the planet when cost of living is compared to average incomes), and taking a substantially lower-paying job just to keep food on the table, thereby driving everyone elses wage lower over time. Welcome to BC, the Epicenter of Wage Suppression.
That whole collapsing-oil-price-driven-Alberta-economy thing will have serious implications for BC RE as well as all other regions where that oil money flowed until recently. Combined with other negative economic factors building here in BC, aside from perhaps a few highly localized RE markets popular with foreign investors, BC RE is facing a lot of downward pressure in the months / years to come.
P.S. Obviously I am the original Shawn but someone above has taken my name.
That’s okay, I will be posting under my full name from now on.
I have always wondered why 99% of posters use fake names. Perhaps because they are posting while at work?
I (like Garth) stand behind what I post and have no need to hide. And I will post only on days off.
Garth & #11 Homer….
What are you guys talking about??? My wife loves her new Dyson. She raves about it every Tuesday and Saturday when I vacuum…
Mark – you appear to think that Canada operates in isolation and the BoC will do what is best based on our own internal metrics but I think the need to prevent the $$$ from sliding to far south will outweigh the internal pressures. Rates will rise (likely less than but in parallel to the US) as they have done historically.
Yesterday my timing system did not yet give a buy signal but I started seeing the Latin American ETF (ILF) rocket higher, and the TSX was rocketing again higher, plus the venture composite index ($CDNX) started rising dramatically. I said to myself “OH OH, holly crap”, so I took half my cash and plunked it down on a mix between UPRO and SPXL) just in case the markets started to take off. Well take off they did, and both went up over 7% in just one day. At the opening of the markets today everything was up about 5% and waited till noon to see if things would cool off and nope, they didn’t, so I invested the other half of my savings into a mix of UPRO and SPXL once again. The funny thing is that there STILL is no buy signal from my timing system because it only works about 90% of the time when the volatility is fairly low and the massive swings of the past few days is that 10% of the time when my timing system doesn’t work and i have to rely on hunches and hope my instincts are correct.
Today’s move was caused mostly by something called a SHORT SQUEEZE. It is caused when big traders place a bet overnight that the markets have bottomed and when the market opens in the morning everyone else who is small and placed margin calls betting that the market would continue to fall suddenly find themselves having to switch direction and buy the quickly rising stocks to cover their short bets they made the previous day. I never short stocks, I only go long or go cash, and that has saved my butt so many times i lost count.
Garth is correct that while the jobs in the U.S. might be the crappy low-security minimum wage types, that doesn’t matter, what does matter is that corporations are making a killing in profits and that is showing up in stock valuations on the U.S. indexes (Canadian indexes not so much.)
So if anyone wants to make a lot of profits over the next 2 years, invest your cash in U.S. equities, that’s pretty much a safe bet.
As for housing in Canada? Who knows. My feeling is that in Toronto housing will continue to rise about 3% per year because on TV all there are is housing shows so people are brainwashed into thinking that housing is the only place to invest these days. So if you live in Toronto then go ahead and spend $4 Million on a 200 year old 2-bedroom sh!t-box, it will probably go up 3% per year anyways, but everywhere else; DON’T, it will probably fall by 2 to 5% over the next 3 years as interest rates slowly begin to rise both in the U.S. and in Canada.
#15 North Burnaby
Vancouver real estate market will not get affected as these laid of people from Alberta will move to BC
————–
Sooooo…just wondering….not trying to be negative or anything…… but……what exactly will they do in Burnaby?
Not a lot of $140k/yr welding jobs in Vancouver currently.
More likely I think they will be moving back to their parents’ basement in Lethbridge and going on pogey.
#24 JustmadeaKilling
I’m thinking about taking about $75,000 off my home equity line of credit and buying Suncor Stocks.
Good idea?
I could make a killing right?
——————————-
Seriously you guys kill me – the way you say that with such a straight face.
Prices across Greater Victoria have continued to fall through 2014. As of eight days ago, Brookfield’s Canadian housing price index data showed that:
* Prices in Victoria were down 4% year-over-year.
* Prices were down approximately 1% month-over-month.
* Prices were down approximately 3% year-to-date (since the end of 2013).
* Prices were lower than in any other month since August 2007 (even lower than 2009’s lowest point).
(see first chart, comment #51)
Sales of single family homes across Greater Victoria in 2014 have been extremely weak. So far in 2014, single family home sales are 27% below Victoria’s long-term average (January through November).
(see second chart, comment #51)
In that chart, 2007 represents an average year for SFH sales in Victoria.
SFH sales in Victoria have been extremely weak since 2010 and the following facts make that clear:
* 2012 had the lowest SFH sales total since 1982.
* 2013 had the second lowest SFH sales total since 1984.
* 2011 had the third lowest SFH sales total since 1984.
(source: Victoria’s board)
Limiting a comparison of 2014’s sales to sales in 2013 only is, obviously, extremely misleading.
I would like to point out that if any revisions or changes have been made to any of Victoria’s price data or price charts (from any of the several websites from which Canadian housing price data is available) over the past week, it obviously wouldn’t be reflected in any chart that I have posted on Garth’s site over the past several weeks or months. Note also that I have made no accusations in this comment and that I have not pointed a finger at any specific source of housing price data. There are obviously several sources of housing price data available for Victoria, including, but not limited to, Victoria’s board, Teranet and Brookfield.
Continuing on, it hasn’t taken rising interest rates for prices to fall significantly in Victoria (since 2010) and it won’t take rising rates for prices to continue to fall.
We all know that interest rates will rise and that this will be a major source of downward pressure on (already falling) prices in Victoria.
If (today’s) historically low (emergency level) interest rates can’t stop Victoria’s price decline, what will?
Many of Victoria’s near-peak buyers now understand that buying a house always comes with significant risk (prices might fall) and that an underwater mortgage always brings major financial problems to those families who are stuck in this extremely stressful situation. This is a story shared by millions of our American friends.
The latest Case-Shiller house price index data shows that prices in the US are still lower than they were ten years ago in December 2004. These numbers prove that it certainly wasn’t a good idea to buy in the US near the peak of the 2006 US housing bubble, even with the (unusually strong) price rebound that was fueled by slashing interest rates from near-normal levels to emergency levels as prices fell in the US.
When prices across Canada are in decline, it will be impossible to slash interest rates in Canada from near-normal levels to emergency levels to slow the price decline (and fuel a US-style price rebound) since rates in Canada are already at emergency levels. There simply will be no US-style price rebound in Canada.
Let’s take a look at house prices in the US. This always reveals how extremely overvalued Victoria’s housing market is.
Florida:
$113 K, Palm Bay, FL (3 beds, 2 baths, 1,865 sq. ft., built in 2005, attached double garage)
$119 K, Jacksonville, FL (4 beds, 2 baths, 1,862 sq. ft., built in 2014, attached double garage)
$120 K, Pensacola, FL (4 beds, 3 baths, 1,824 sq. ft., built in 2004, attached double garage)
$84 K, Inverness, FL (3 beds, 2 baths, 1,990 sq. ft., built in 2007, attached double garage)
Arizona:
$102 K, Coolidge (Phoenix), AZ (5 beds, 3 baths, 2,287 sq. ft., built in 2006, attached double garage)
$110 K, Florence (Phoenix), AZ (4 beds, 2.5 baths, 2,220 sq. ft., built in 2004, attached double garage)
$115 K, San Tan Valley (Phoenix), AZ (3 beds, 2 baths, 2,150 sq. ft., built in 2007, attached double garage)
$128 K, Buckeye (Phoenix), AZ (3 beds, 3 baths, 1,874 sq. ft., built in 2004, attached double garage)
Girls and guys, Victoria’s housing bubble has deflated a little, but not nearly enough to justify buying a house at this time. Continue to rent in Victoria (cheaply and completely risk-free) for less than the monthly cost of owning while prices continue to fall.
Forget about buying a house in Victoria until prices are lower. Buying now would guarantee years of extreme financial stress for you and your family and could leave you broke or bankrupt (with an extremely limited ability to obtain credit for over six years). Does that sound like a solid plan to you?
Until next time – Cheers!
“pesky little rob carrick ”
Oh I get it, it’s a term of endearment….
Dyson for Christmas? I got mine a bamboo cutting board, on sale at Canadian Tire.
The link didn’t work for this house.
$113 K, Palm Bay, FL (3 beds, 2 baths, 1,865 sq. ft., built in 2005, attached double garage)
Two properties in my neighborhood (Toronto) just got taken off the market. One of them listed for more than 7 months, 2 price reductions but still no bites … it’s getting interesting.
#101 Steve French – Yesterday’s post
Awesome excerpt! Been years since I read that
Busy weekend here lots of lottery tickets to check and sports to watch
What’s on TV tonight?
Did I read that right CTV says ‘Obesity could be a disability’ Wow talk about nanny state
First world problems
How did we become such wimps
#32 omg the original
What you think every welder in bc works in vancouver?
9 billion dollar dam breaking ground next year , I’m guessin there’s gona be a few beads to run on that one
I like the bourbon canine!
Things are very difficult to predict, especially the future.
-Dutch saying.
I like that phrase because it indicates indirectly that our understanding of the past and present isn’t all that great either, but at least we know what we think happened. We are usually wrong of course.
Cute video though.
#116 NewToETFs on 12.18.14 at 12:29 pm
#6 Lala on 12.18.14 at 8:34 pm
Garth, I think some of these people need to remember Kenny Rogers song…..cue it up pls….”you never count your money, sittin’ at the table….there’ll be time enuf fer countin when the dealings done”
I mean all this self-congratulatory back-slapping over a small paper gain from some of the biggest daily gains in recent memory could leave to irrational exuberance….
“Toronto is more expensive than New York because its world class with rich immigrants.”
If immigrants were bringing money to Canada, or Toronto, leverage would be falling, or, at the very least, under control.
“Mark – you appear to think that Canada operates in isolation and the BoC will do what is best based on our own internal metrics but I think the need to prevent the $$$ from sliding to far south will outweigh the internal pressures.”
I personally doubt the CAD$ will be much of a problem in the future. If anything, keeping the CAD$ down will be very difficult for the BoC in the environment going forward. The bond market seems to agree with me, as despite the CAD$ weakness, it has been bid back to record highs recently (ie: record low yields).
As we’re reminded almost every month with the StatsCan surveys, leverage is anything but under control.
So please, let’s put this “foreign money” myth to rest once and for all. Houses are being bought by Canadians, with large amounts of credit. This is solely what pushes up prices.
“There simply will be no US-style price rebound in Canada.”
Not only that, but the US rebound is hardly sustainable, for the reasons you point out — interest rates were slashed in the US, and the overcapacity that already existed in that sector was just made worse.
Housing won’t even be remotely interesting as an investment until long-term Canadian and US T-bonds are approaching double-digit interest rates. Until then, best to hang out in counter-cyclical asset classes.
#8 I’m stupid
I’m sitting on nearly 100k in cash and my investment advisor hasn’t bought anything since October. What should I do?
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Do the following and change your handle to “I’m Smart”
1) never take investment advice from the comments section of a blog
2) no one here can possibly give you any guidance for 2 reasons i) – there are so many things at play – is $100K 50% of your assets or 5%, what is the rest of your stuff invested in, what is your time horizon for that $100K (and other investments). ii) seriously, most of the guys here fashion themselves as gunsling traders – not the kind of people you want long-term investment advice from.
3) just ask your advisor guy what the plan is – if it doesn’t sound like what Turner keeps harping about year after year, then maybe ask your friends and family who they use as advisors.
Alberta will be better than Ontario or BC even at this price for the oil… Real Estate prices will not go up next year but they will no go down either. It’ s good to have 1 year break after a good decade…
It’s funny to see people from Toronto or Vancouver concerned with Calgary prices which are 1/2 or less of what they pay there.
I also think we should be honest:)
1. There are not layoffs in Calgary… Let’s prove if this is not true. Things like “the cousin of the cousin of my neighbor told me… ” is not data to prove something.
2. In majority of the cases the prices in April would be higher than in December same year, regardless the market….
Yes, the risks are there but nothing else at this point…
“Given you have a long term investment horizon, why would you sell Canadian now to buy American instead of just performing the usual rebalancing, and therefore buying more of the cheap Canadian assets?”
Of course selling Canada makes no sense. Canadian assets are dirt cheap, and the fundamentals highly favour both currency appreciation and equity market outperformance over the next number of years.
I think the point hammered home by Garth et al is that one shouldn’t have all of their eggs in one basket, and that diversification and rebalancing can and does produce a total return greater than the mere arithmetic weighted sum of the constituents. With usually an improved Sharpe Ratio.
Gartho – I know you normally don’t take me seriously but here’s a whopper that just crossed my mind:
If we see a sell off in the bond market then interest could spike – but that’s fixed rates, would variable follow to some degree?
Thx mang!
#16 not 1st
it’s all true.
For all the freshly-minted investing n00bs, congratulations on getting a start. While seeing a $1500 gain in one day or $3200 over four days is exciting, if you are a novice this is not the kind of performance you should be chasing or expecting as the norm. Volatility works both ways and you will likely see days with your screen so awash in red it takes your breath away. Remember, you are in this for the long haul. Moderate your emotions (good and bad) and act rationally.
Bought CLO etc today as part of my alternative sectoral part of my portfolio. In a few years I’ll tell you how it went.
#25
Play it safe…purchase an energy ETF such as ZEO or XEG for a more diversified play. You will probably have the same results to the upside – if not better – and have a much better sleep at night!
“The board also says the average price is 8.6% higher than a year ago, but fails to mention it’s $24,259 lower (a decline of 4.1%) than in April.”
Isn’t that expected? Sales are always down now relative to April? I though it was always down a lot more than 4.1%.
I think rates will move too slowly to cause any price decrease (a big enough decrease to get me interested in buying) in the GTA. However, investments should look good really good relative to house price appreciation.
I can finally say, I’m up 5% in 6 months, how about your walls?
HXS (sp500) and ZUB (banks) are up almost 2.5%. I feel good.
#31 Waterloo Resident on 12.18.14 at 9:17 pm
How are you having trouble winning over women? On your first dates, trot out the “I’m an investor/trader/whatever sounds sexy” line, tell them your five-year plan is to be a multi-millionaire (or whatever your wealth goal is), and sling out a few sentences about what systems, theories, and signals you subscribe to. These shallow women you keep meeting are sure to love a smart, rich dude, even one who rents.
Of course, you could go with Plan B and find someone who likes you for you. With that person you won’t need to discuss your net worth as justification for your worthiness as a human being/non-homeowner.
#40 That dam will not be happening anytime soon if ever.
@Mark.
I feel the same way, TSX will rise due to currency weakening. A milder Venezuela.
Why are there homeless people in this frozen country?
If you could choose a jail or a dumpster what would you choose?
Jail sounds pretty good to me… warm, mattress, 3 squares a day?
This is the first time I have ever commented on anything on the web. Probably afraid to be judged (Smoking Man is a fave of mine – I have obedience certificates) but I try to remember a saying of a fellow lawyer “Never let fear hold you back”.
I am addicted to Garth’s blog and love the dogs. I even forgive Garth for the lack of judgment he showed by serving in a Harper government. He is earning his redemption. Mark is too erudite for me to fully understand but his efforts are appreciated. The old boomer from the Dairy State (is that Wisconsin? – Go Badgers) is admirable. There are too many to mention.
Own part of a house in Cowtown. The bank owns the other part. Working in Ft. McM. Non oil related job, to the extent that any job in Fr. McM can be non oil related.
I am a poster child for the idiocy of the boomer generation. While I do own a pot to pee in, it is not a very large nor fancy pot.
Thankfully, in June I drove around Calgary buying all of the pink paper I could find at office supply stores attempting to corner the market. Risky but might pay off.
Thank you all,
WUL
#24 EmpCod
Thanks for taking the time to present your example. The situation is now clearer to me.
To summarize: In the RRSP you get to work with money that has yet to be taxed. And even though it will be taxed some day, it can grow at a faster rate than the smaller ‘after tax’ money one gets to work with in a non registered account. In fact, it grows at a rate that will eventually will swamp the disadvantage of loosing the capital gain exemption.
That last sentence I will have to take your word for until I can open my spreadsheet up and do some examples as per your suggestion.
Thanks again. BTW, the handle “Mister Obvious” is not meant to suggest that things are obvious to me, but rather that I am obvious (or perhaps transparent) to others. Obviously, you knew that.
“I feel the same way, TSX will rise due to currency weakening. A milder Venezuela.”
I almost vomited when you said Venezuela. The TSX/Canada and Venezuela do not belong in the same sentence. And currency weakening in deflation? Doesn’t make much sense either.
#56 palebird
+1
Agreed. An unpopular decision made by a very unpopular provincial government. BC taxpayers will be paying court costs for years while the “dam”-anti-lawsuits work their way through the courts. At least until the next regime change.
Emperical evidence, and Garth, says to up your U.S. exposure. How prescient. Glad to have taken the advice last week.
Thats why you are just a “Mark” and I am T5_Income.
“Thats why you are just a “Mark” and I am T5_Income.”
I live on dividends and consulting fees, so I do just fine :)
#1 Mark
Speaking of “going negative”, Switzerland’s official policy rates are now going explicitly negative:
……………………………………………………………………….
So Switzerland will pay you to take money?
#40 Lumberjack arch
What you think every welder in bc works in vancouver?
9 billion dollar dam breaking ground next year , I’m guessin there’s gona be a few beads to run on that one
————————-
Yep I hear ya, but the point is that’s not going to be a big bonus for real estate in Vancouver – maybe a few good jobs for some engineers in Vancouver.
The easiest place to access Site C is from………..ALBERTA. And other than rock and concrete most of the supplies will come from offshore via rail through Alberta.
If the oil sector is still down when site C is started, there will be lots of spare labour from the BC oil patch around FSJ. The rest will come from AB and SK.
THAT’S IF SITE C IS EVER CONSTRUCTED.
If you think building a puny pipeline through BC raised a stink wait until you see the sh*tstorm around Site C.
#15 North Burnaby
Vancouver real estate market will not get affected as these laid of people from Alberta will move to BC
——————
Your comment rings true back in a world before sane people surrendered their faculties to join the house buying frenzy.
Unfortunately in today’s world the real cost of a McMansion is loss of mobility.
People are chained to those houses now.
Renters can always walk… but owners wear the albatross around the neck.
Like Jacob Marley they forged their own chains one stupid link at a time.
If realtors thought the GTA market was strong and sound they wouldn’t be posting on garths blog. The fact is realtors are high school drop out shysters and no better then a used car salesman. Realtor = used car salesman.
conundrum #1 hesitating on pulling thetrigger?
conundrum #2 is this sucker rally ?
conundrum#3 do i save some of my conundrum for tomorrow?
1. There are not layoffs in Calgary… Let’s prove if this is not true. Things like “the cousin of the cousin of my neighbor told me… ” is not data to prove something.
—————————-
not yet of course – oil took its biggest dumping barely days ago, nobody is that responsive to cut staff before the work actually dries up!
my wife is HR exec for an oil and gas engineerng firm with alta and bc offices.
at 57$ oil their biggest house in cgy will see half of 300 guys booted in jan.
edmtn and bc will have much less impact as they are not purely greenfield oilsands.
more importantly, can anbody tell me that suncor and peers will have not horrendous numbers at earnings ?
Not all is doom-and-gloom in the TSX.
Fortis just increased their dividend by 6.25%. Here’s a company that’s increased their dividend annually for over 40 years. Similar to Emera, another utility company with a solid history of increasing dividends.
http://www.hydroworld.com/marketwired/2014/12/17/fortis-inc-announces-first-quarter-dividends-2015-increases-quarterly-common-share-dividend-by-6-2.html
at 57$ oil their biggest house in cgy will see half of 300 guys booted in jan.
———————————
they were overweight in a single customer who has cut capex by 75%
“They have no idea that 10% or 20% of their equity can be blown off in a few months,”
Since these virgins will only have 10 to 20% of equity in their house, it will actually blow off 100% of their equity.
“So Switzerland will pay you to take money?”
Effectively, if you borrow at the policy rate. Most, except perhaps the government, borrow at considerably higher than the policy rate. But since spreads are calculated with the negative policy rate, the cost of borrowing can very well approach zero for large highly credit-worthy borrowers.
The problem is, currencies with low interest rates tend to appreciate, to make up for the lack of explicit interest. The phenomena which has caused most Yen shorts to get scorched over the past 20 years of deflation.
“more importantly, can anbody tell me that suncor and peers will have not horrendous numbers at earnings ?”
Earnings at Suncor and peers may very well be blow-out for the coming quarters, largely on account of recognizing severe gains on hedging.
#40 Lumberjack arch on 12.18.14 at 9:31 pm
#32 omg the original
What you think every welder in bc works in vancouver?
9 billion dollar dam breaking ground next year , I’m guessin there’s gona be a few beads to run on that one
*****************************
The legal challenges, burial grounds, no immediate need, will put this project on hold. The win for a politician was that it was announced in the paper, not actually implemented as the costs increase every time the politician moves her/his mouth.
Wow, this blog becomes a gathering of traders, asset managers and experts in US corporation profits.
Great to see how Canadians are abandoning housing and embracing real values.
#67 omg the original
I’m not a geography major but last time I checked AB doesn’t have a port , so the “offshore” supplies your talking about would be coming on truck from Port of van. You cant ship oversized loads by train for obvious reasons . Do you work on a lot of dam projects?
[…] Source: http://www.greaterfool.ca/2014/12/18/going-negative/ […]
Listened to two leaders of large institutions say oil will stay low for a long time. No higher than 70. That means they will not be buyers. Which means I’m not a buyer.
Wonder where they will be putting money to work.
No need to overthink. The money flow is obvious. 40 handle follow through on volume.
#43. They are new. Like house hornies that check the mls to assess their home. Put they are doing the right thing. Congrats.
Video was hilarious.
“If we see a sell off in the bond market then interest could spike – but that’s fixed rates, would variable follow to some degree?”
If inflationary pressures presented themselves, which typically would be associated with a sell-off in some of the longer end of the curve which tends to be more sensitive to long-term inflation. Then you could see the central banks raising policy rates to conform to the 2% inflation target.
However, we have a long, long ways to go until such is the case in Canada. The US, somewhat less time.
I rebalanced away from Canadian financials and energy and into a low fee US index @ TD. Canadian business is toast next year and the Canadian dollar will continue to fall alongside commodities like gold.
…”…apples to apples.”… – Hon.GT
I like apples… always have. Always will… Accordingly…
ParableApples for SmokingMan:
http://youtu.be/gcZPWkNY6x8
&ForwardThinkingRosies WhoLove&Reference… #TheInimitableSlimPickens:
http://youtu.be/NFkryh6hC-k
[NoteToHolyCrap: Not many people realize that Lt. Lothar Zogg would later morph into DarthVader… Say, what was it really like to have eight engines, HCWTT?… I suppose only you and CaptainBillyBob really know for sure; right? NoteToGT: There’s a lot to be said for Vera and ConflictPostPoned ‘HookUps’…]
Garth:
I crossed the line in commenting on your politics. I apologize. Thanks for allowing my post. In the future I will cool my jets and stay on topic. You are doing a great service to a lot of people.
I want to introduce my son (21) and daughter (19) to your blog but I think it might be beyond them and scare them. I might start with the Wealthy Barber (albeit outdated).
Dawgs, which of Garth’s books is for beginners?
By the way, a handful of small SAGD oil sands operators are going to fall very soon. It will be an interesting experiment in the rigour of Alberta’s reclamation and remediation regime. Rusting hulks like the history of resource extraction enterprises everywhere. But as we say, the law requires them to clean up. Only five year olds actually believe that.
Out,
WUL
I watch houses in Burlington (suburb of Toronto) like a hawk. They are moving like molasses, many being taken off the market after sitting for many, many months. The ones over a million that use to be a hot commodity are suffering the worst. Here on the ground, it certainly appears that everything this blog has talked about is starting. Many sellers are having that “Wiley Coyote” moment where they don’t realize they’re standing in midair with no where to go but down (denial will only keep prices stable for so long).
“I rebalanced away from Canadian financials and energy and into a low fee US index @ TD.”
So I guess 75% more dividends, the significant probability of CAD$ appreciation, and the upside of a cyclical rotation away from housing investment and towards stocks, etc. doesn’t mean anything to you. Because that’s what you get when you buy Canada (ie: TD Canadian Index e) instead of the US right now.
Re-balancing for most with balanced portfolios would entail buying more Canada (and emerging markets) at this point, being a significantly poorer performer than the rest of the world. And lightening up on the outperformers (ie: the US) over the past year.
So you got the ‘theory’ of rebalancing correct, but the practice of such almost completely backwards.
#61 Mark on 12.18.14 at 10:39 pm
Hey not so fast….you do have a certain Che Guevara quality about you…in a strictly financial sense of course! One question though, do you wear a beret and sport a goatee, when posting on this blog…..
#69 worried GTA realtors on 12.18.14 at 11:13 pm
”The fact is realtors are high school drop out shysters and no better then a used car salesman. Realtor = used car salesman.”
I’ve only met one good used car salesman in my lifetime.
“I’m not a geography major but last time I checked AB doesn’t have a port , so the “offshore” supplies your talking about would be coming on truck from Port of van. “
The Port of Prince Rupert would be a more logical choice for the importation of stuff relating to a project nominally in Northern BC. Down Highway 16 if on truck, or on CN if it can be carried by rail.
#85 washed up
Screw Dave chiltons wealthy barber the real goods are in Garth’s flagship book “after the crash” , no sugar coating just straight facts from a straight shooting Harley riding maverick
Mark’s employment status
Mark said at 65:
I live on dividends and consulting fees, so I do just fine :)
***********************************
Translation – “unemployed”
Anyone care to tell him why?
Real life real problem
Kids one
Got another on the way
Wifes ready for bed every night at 9
We are only 31
What is my future?
PS Garth, good time to buy condo in cuba?
“Wonder where they will be putting money to work. “
They don’t have to put money to work anywhere. Just increase dividends to common shareholders and occasionally raise the spreads on the borrowers who are trapped/captive to their financing while the economy continues to deflate.
Since we know that Canadian personal and mortgage debt is off the charts, this represents a significant quantum of the indebted population.
#83 Leo Tolstoy on 12.18.14 at 11:56 pm
” Canadian business is toast next year and the Canadian dollar will continue to fall alongside commodities like gold.”
Just keep in mind that if you are investing in Canada that as the dollar drops in value, your gold value increases in Cdn $’s and likely offsetting the drop in gold value. At this moment Gold is $1386 cdn. and $1197 u.s.
I was on the realtor.ca website tonight, as I was curious to know how many “Residential” dwellings are For Sale now in ALL of “Canada”.
218,123 was the number that came up.
I selected “LISTED SINCE” from the menu to see how many have been listed since Jan 1, 2014.
Approx 214,000 was the number that came up
Then, I checked to see how many were listed since December 1, 2014.
35,474 was the number that came up.
Well…..I wonder if this means that most of the listings have been on the MLS for almost a year? And that approx 16% of the listings were listed just since December 1, 2014?
(feel free to correct my calculations, i’m not a Realtor, and i’m not the Rainman.)
RE: #22 Faith on 12.18.14 at 9:00 pm
Too hedge or not to hedge? I’m a bit fuzzy on this topic and most of the websites I’ve looked at don’t give the greatest info. I’m not sure if I should be buying VUN or VUS.
Over the long term unhedged funds are usually better due to lower costs. Having exposure to foreign currency is also a form of diversification. All my ETFs are unhedged.
Well, i don’t know about anyone else, but I’d be thrilled with a $500 vacuum for Christmas!
#86 Dave
It’s the same scenario in many areas of suburban Van. Spring re-lists and ping-pong pricing has been the norm for 3-4 years now. Common theme: “I couldn’t get my price so I’ll take it off the market and re-list next spring at same price or higher”. Then it drifts down with token price drops, but no “serious” bids, …” rinse, repeat. Just in the last few months, I’ve noticed more than a few sfh’s stuck in the $million-plus zone for several years suddenly drop in the last few months to hover at the CMHC $million dollar cut-off. As for condos and townhomes, South of the Fraser the overbuilding in these categories is absolutely staggering, with thousands more in the pipe due to complete in the next 3 years. It’s only been in the last few months I’ve observed desperate developers actually advertising massive discounts to move units completed 2-3 years ago. Lots of stale job sites in the area, with multi-phase developments growing weeds, and the first phases far from sold out. I’ve said it before, the rot starts at the edges, even in the previously “hottest” markets. As I observed watching the US RE crises unfold, it can take a period of years for it to reach the center… and the msm radar.
#79 Lunberjack arch
I’m not a geography major but last time I checked AB doesn’t have a port , so the “offshore” supplies your talking about would be coming on truck from Port of van. You cant ship oversized loads by train for obvious reasons . Do you work on a lot of dam projects?
———————————–
Do you do a lot of economic analysis??
I thought we were talking about how the Site C dam was going to employ oddles of ex-Alberta welders and somehow save Vancouver real estate.
Exasperated sigh – yes, there will be some benefits accruing to the lower mainland – consulting contracts, some fabrication, some port throughput – but not enough that its going to have a meaningful impact on the bloated Vancouver housing market.
If Vancouver housing is going down, ain’t going to be rescue by Site C economic spin-offs, when and if Site C ever happens.
Things are slowly going down in AB. One of my co-worker’s husband will most likely be losing $200K in oil stocks through his work!
Glad to see listings sky-rocket in Calgary! Hope listings swell up for a very long time! Ka-Boom!
Prices are still very high though. I’ve seen some houses stay on the market for months and seen some houses come back on the market after being off for a few months and at the same price. LoL, must be some sick joke. But then again, there will be a greater fool out there.
All the posts about oil and gas, Calgary, AB is orgasmic! Keep up the good work, Garth!
The only way stocks rise and all commodities fall is if Fascism is on its way.
Per my previous posting….
I tried to find the “aggregate” of all the “Residential” dwellings FOR SALE now for ALL of Canada, using the Realtor.ca website.
(I also looked at the Canadian Real Estate Board Stats, which I can’t understand how to read the chart.) Anyway, my number is probably off.
However….whatever the statistical number is + all the private For Sales on the CraigsLists, GrapeVine, Kijiji and other online websites + if you add in many of Recreational 2nd homes For Sale….
all adds up to a LOT.
Let’s recap the stupid antics of Real Estate Agents in Melbourne:
http://m.theage.com.au/domain/real-estate-news/domain-takes-a-look-at-the-wackiest-stunts-and-punts-that-took-place-throughout-2014-20141219-12adov.html?skin=smart-phone
Sadly, throwing the family pet in on the deal is not beyond the moral bounds of some douche trying to close a deal.
I just had to share this true story with you all. Why? Because it is amusing and bewildering?
It was about 2009, around the time of the “Big Recession”, and a friend of mine bought a house for $3,000 (three-thousand Cdn $) that was a foreclosure, from a bank.
It was an O.K. livable house, he did some handyman stuff on it, made sure it was up-to-code, and rented it out for $700/month to some workers on a project up there, in North-Western Ontario.
Glad to hear you are aroused GT, even if only a little. LOL
Sell your house and buy real estate in Switzerland! :-) SNB just went negative yesterday in order to keep the CHF at the 1.20 Euro level. Mortgage rates here available at less than 1% fixed.
Also protects against your depreciating dollar.
#32 omg
I have no problem making that kind of money in the Burnaby area,made just over 120,000 in 2013 at my old job last year,they keep asking me to come back,asking me if I know any good tradesmen as they are short eight right now.At the company I work for now they just hired four tradesmen and are actively searching for two more,pay is close to$40/hr with overtime it’s not hard to break six figures by October.The work is there as I keep turning down recruiters for work.
The layoffs in Alberta, as I have been giving updates as to when they began, and when they accelerated, have accelerated this week again, in Ft. MacMoney and across the Province. As I said, I have lived in different Provinces over the years, from Ontario, where I was born, to Alberta, where I live now. This is word of mouth from people who have been laid off, talking directly to me and telling me the #’s of people that are being let go where they work. Why it is not hitting the MSM yet is of no consequence, and certainly no surprise to me yet, but I will tell you the layoffs began 1 month ago. Keep in mind, the people who called b.s. on my previous updates, I don’t give a $$$$hit what you believe. Like Garth, I simply tell my truth, take it or leave it. My real concern is that I am fine, but then again, I always put my freedom first.
my daughter asked me the other day , “dad why are you always reading the comments (on GF)” and the first thing that came out of my mouth was that there were smarter people than me on there and i learn from them and their diverse viewpoints.
i have a question for the dogs who are smarter than me.
its very off topic.
A person who was hired 1 month ago for a 140k job (GM of a facility – reports to nobody but a BOD) is about to be let go, as the employer has clued into the fact he is a con artist/thief.(he hired his neighbour for $500/hr to paint among others)
there is animosity and he is threatening to sue for undue dismissal (no chance as he submitted a bully letter to the BOD with demands, like more pay, or he would resign.) and claiming relocation expenses as he moved cross country for the job.
the thing is, although he told all the interviewers and BOD the story of moving cross country just prior to hiring, the fact is, he did not. (but they fell for it) He worked for a different local company in the same industry since the spring of this year. (google remembers all)If he relocated it was a least 2 jobs ago. he was likely turfed for being a conartist/thief there too.
I am the only person who knows this – the BOD is now becoming afraid of him and he will likely be escorted out permanently tomorrow morn.
they may just give him the relocation cash to go away.
i’v got a book full of proof he is full of shit on the relocation – his job included hiring and tendering and it left several dozen footprints around the web, not obvious, but i dug’em up. heck he’s still listed on old copies of his previous companies website.
if the BOD sees it he’s instantly out any chance of maybe 10k-20k in his pocket.
my question is – do i leave a copy of the document file on his car window when parked outside the facility; with a suggestion as to how he could make it go away, you know, like, for a price.
if he paid up, the BOD would still get the file too of course . i hate thieves and the facility is quasi-charity.
i am a complete outsider in this , i just happen to be getting mis-adressed emails by some strange quirk. nobody involved knows who i am or that i have this info.
**********
disclaimer
this story is completley fictional
but what would you do if it were real?
Hi Garth,
Coming back to your advice for Andres and Sarah yesterday and balance, diversity and liquidity. I get balance (60/40) and diversity (don’t go all maple). but liquidity…do you mean keeping some cash reserves for times to strike or owning stuff that trades quickly (unlike a house).
Thanks.
“Do you Want to be Right or do you Want to Make Money?”
Cullen Roche has an excellent read here:
http://pragcap.com/do-you-want-to-be-right-or-do-you-want-to-make-money
Why would anyone in their right mind buy anything, let alone a ginormous shackle of excess real estate debt, when values are clearly falling and will continue to fall for a long time? (It’s not as though you can buy small portions of re as prices drop, such as you might for investments.) Perhaps it’s that they aren’t in control of their egos, hormones, peer pressure or fear of “losing out”. These shortcomings have always been so deadly to wealth building.
Wrinklies, overwhelmingly, are set to need cash far more than potential buyers, therefore, those engaged in a silly wabbit stand-off on their price “expectations” have doomed themselves to a much lesser harvest upon capitulation……tick tock.
Buyers should take no prisoners when negotiating- none of this ridiculous sub-10% business for fear of upsetting the agent and/or owner. Go ahead, upset them! Too many sheeple care more about realtard reaction than about their personal wealth.
IMHO, attitudes on both sides of the table are currently in major readjustment mode.
The truly smart ones have already sold, and those still standing on the sidelines will need more credit to finance their bucket list of “entitlements”- if they can continue getting it- and many of those entitlements are priced in U.S. dollars don’t ya know.
The free-wheeling credit fiesta is now a much greater risk to financial institutions than ever, what with even more jobs and stability melting daily.
Those who wait haven’t missed out on anything except excess debt.
“Or the dinglenuts on the city desk who use words like ‘hot’, ‘torrid’ and ‘steamy’ to describe every realtor release? ”
Yes, and my personal favorites: “rocketing”, “searing” and blistering.
Meanwhile, more and more souls are starting to discover this dichotomy between financials and bricks. The Bank of Canada now warns houses are inflated, joining the IMF, World Bank, The Economist, Morningstar, most US ratings agencies, Robert Shiller and Demographia (among others). I gave you a hunk of a column by CBC editor Don Pittis the other day saying similar. Now pesky little Rob Carrick at the Globe is back on board.
Royal Bank CEO Says Canadian Housing Prices Could Fall Up to 15%
http://www.bloomberg.com/news/2014-12-19/royal-bank-ceo-says-canadian-housing-prices-could-fall-up-to-15-.html?cmpid=yhoo
Canadian housing prices could fall as much as 15 percent should interest rates climb, which would be “healthy” for the country’s economy, Royal Bank of Canada (RY) Chief Executive Officer David McKay said.
“There could be some price correction, particularly in a rising rate environment,” McKay, 51, said Thursday in an interview at the bank’s Toronto headquarters. “I don’t see it to the extent that the Bank of Canada does, but I do think you could have a 10 to 15 percent price correction.”
#112
Blackmail is illegal.
And along comes, what was called in the States, “The Bicycle Theory.”
I have two boys up on the patch. They’re both gagging on the idea of buying a house. Gotta have it.
Being a pathetic blog reader, their mother and I have been offering kind words, such as “what the bloody hell are you thinking?” The older, wiser, more educated of the two told me “there’s so much oil in the shale we can supply everyone for a century.” I mentioned The Bicycle Theory:
Down south when housing dipped, I mean before it completely cratered, the indicators of economic status were iffy. Kramer was on TV telling everyone we were headed for the best years ever, we’d all be living in space, times were good (he’s seldom right about anything, really).
One of the naysayers (very Garth-like) told the story: you don’t need to wipe out those “too big to fail” entities in order to have a collapse. You need to hit their bottom line by, say, 5%
Suddenly, the big employers (banks, where I was living, oil where I live now) lay off a little chunk of workforce. Just a coupla hundred.
Like my boys are possibly facing.
They both have kids, young ones who grow faster than the tall tales CREA tells. They need stuff, like new clothes, and more food, and…bicycles.
You get laid off, you can’t buy a bicycle. WalMart doesn’t care, but the bike shop on the corner? They family owned place that has a margin so razor thin their make/break is 2 bikes a month? My boys don’t buy bikes, they go into receivership.
That family now has no source of income. WalMart doesn’t care, but their piano teacher, math tutor, and others don’t get paid.
Those families now have no source of income, and so…
And so…
5%. Maybe even less, given it’s gonna get worse. Unemployment during the Great Depression was something like 20% at it’s worst, not 99% like kids think. That put the planet in a tailspin.
Got an email from my oldest. He says he has his eye on a bungalow in Saint Albert.
Kids these days…
#112 someone who isn’t me on 12.19.14 at 6:10 am
My advice: do not commit criminal acts. Blackmail is unethical. Leave the file on his windshield with a demand that he just quietly go away. If he doesn’t, send a copy to the BOD. If you really must profit from all this, offer your investigative services for a fee to his employer.
#157 DON on 12.18.14 at 10:51 pm
Real estate is no longer a topic of discussion at work. Things are started to sink in, people are quiet when the topic manages to surface. Concering…but expected. Unfortunately the hang over is unavoidable.
++++++++++++++++++++++++++++++++
Real Estate not the topic of the day.
Well gee, what might be on people’s minds right now? Oh yeah, Christmas.
Tell me real estate is no longer the topic after you do some schmoozing at some Christmas parties. Or better yet, wait until spring.
#92 Shawn Allen on 12.19.14 at 12:38 am
Mark’s employment status
Mark said at 65:
I live on dividends and consulting fees, so I do just fine :)
***********************************
Translation – “unemployed”
Anyone care to tell him why?
***************************************
Poor interpersonal skills???
Not 1 st
….”Vancouver is more expensive than Seattle because we have the mountains and ocean”….
or
…”Vancouver is more expensive than Seattle because we have rich emigrants.”…
Over the long term unhedged funds are usually better due to lower costs. Having exposure to foreign currency is also a form of diversification. All my ETFs are unhedged.
Yes, over the long term this is generally true. I tend to cheat and tilt a little when the CAD exchange is at an extreme, like when less than $0.7 vs USD. CAD is clearly a commodity driven currency, so at extremes expect reversion. Currently I would remain unhedged.
If foreign bonds are in a portfolio, they should be currency hedged. Bonds are supposed to be the ‘safe’ part of your portfolio. Generally the added cost of hedging defeats the usefulness of foreign bonds. Your mileage may vary.
There are no market fundamentals anymore according to USA today, but instead marketts are propped up by the fed confirmed by Yellin’s recent statement that sent markets soaring.
Empty words. The Fed stopped its stimulus spending cold turkey in October, and the economy has soared since. — Garth
With the depreciation of CAD, our $1 is now worth only $0.86. 15% of our saving just evaporated. Anyone who kept money in a CAD saving account or buying TSX stocks are probably losing big time.
I was reading the news about Russia and their rubles. One thing caught my eyes. As interest rate going up to 17% and the ruble falling half in value, people are actually going after assets like houses and cars.
My sister has been trying to sell her home in the 613 area code of Ontario (Pembroke region) for a year now. She started at $249K > $229K > $219K…….now it’s off the market because according to her realtor……”the market is dead”…….and that is in an area with high civil service employment, an enormous military base (CFB Petawawa) and no new construction for years. Apparently she was competing against 4-600 listings at the time…….in an area with little to no immigration or transition. I told her to lower the price again and blow the damn thign out (she’s getting divorced) but like we all know, it’s the only marital asset and what little equity they have left will soon be gone if they don’t smarten up.
As for me, I have to go and write up another 12 post dated rent cheques for my landlord this month……..and I’ve made $30K on the depreciating R$ in the last 4 months.
These started at $65000 for the unarmored version and up to $145000 for the armored one. I like the armored one with the cool gun. Booha.
http://www.foxnews.com/leisure/2014/12/18/first-surplus-humvee-sale-success/?intcmp=features
A shout out to Long Branch.
Look at Dollarama stock go.
My shopping is finished (has been for 3 weeks). Whatever baking that gets done around here, also done – except for hubby’s world famous shortbread, which will be done Sunday afternoon. Wrapping will be accomplished in next hour or so. Housekeeping – meh! The torn wrapping will hide lots.
But what I wanted to say to all blog dogs before the tornado descends, is Merry Christmas, Happy Hanukkah, and for those who will celebrate Kwanzaa, Habari Gani (boy, I hope that’s right!).
Don’t drink and drive!
LP
Just got time to check out the video and it put a smile on my face :-) really what’s not to like about dogs
Flew home from Edmonton yesterday and sat beside a drunk Iron worker on the plane (go figure) about 300 people he figured got their notice that day. One big meeting and… no more work. I know where I’m at after the holidays there will be cuts. About 25% and the theme for 2015 is going to be do more for less
Site C? Well I seen that on BNN and talk of how they will need power for LNG. Well I agree that liquefying natural gas does take an emense amount of electricity, I thought the LNG ship has sailed due to the way the buffoons in Victoria handled the pipe line to the coast. They should have never tried to sell a Nat gas pipe with a heavy oil pipe, the general public just does understand the difference between the 2 and mob rule after that
“Translation – “unemployed”
Anyone care to tell him why?
“
It appears that someone has a severe reading comprehension problem, as ‘unemployed’ couldn’t be anything further from the truth.
Lets see over 5 billion in spending cuts already announced and this appears to be just the start. Anyone care to estimate how many jobs will be attached to these cuts? Alberta and the Energy Sector are in full denial which is the norm. Common sense has to suggest that Alberta will see a flood of pink slips in January!!
Does anyone ever read that site “Million Dollar Journey”? It’s not my favourite, but someone told me to check it out the other day- the latest post is a “net worth update” by a real estate agent.
It’s a pretty funny read. He claims a net worth of $380,000, with $1,500 cash and $10,000 in a TFSA. He reckons on a 40% increase to the value of the rental property he bought in ’09, and a 35% increase to the home he bought two years ago.
There are people out there like this, apparently, and they are even functionally literate.
#34 Victoria Real Estate Update
Appreciate the work you are doing and your regular updates. Carry on.
http://www.theglobeandmail.com/report-on-business/inside-health-canadas-marijuana-stock-bubble/article22152087/
You may need to used “private” browsing in order to read this.
With Smitherman in the picture this is going to explode and make us the richer country on Earth.
#126 Lurker
“I was reading the news about Russia and their rubles. One thing caught my eyes. As interest rate going up to 17% and the ruble falling half in value, people are actually going after assets like houses and cars.”
I think the situation is very different. Putin is nuts and the Ruble might fall to worthlessness.
Even with Harper around and the incentive to devalue the $CAD to reduce the burden of household debt, I don’t think anything like that will happen in Canada.
…athough I’ve been wrong about a lot of things these past 8 years.
#127 Keith in Calgary on 12.19.14 at 11:09 am
————————————————-
That is a common experience in small town Ontario (outside of commuting distance to the GTA). 24,000 people…7,400 dwellings, so at 600 listings that’s 8% of the entire town for sale.
http://en.wikipedia.org/wiki/Pembroke,_Ontario#Demographics
Fire-sale would be the only way to go…prices aren’t going up……
I was at my TD branch the other day. They had a sign out that said “Lets us wrap your Christmas Gifts while you do your banking”.
They had a table set up with wrapping paper, bows and the whole nine yards.
Is that service or what! I bet that the orange guy will only offer to virtually wrap your gifts.
#115 maxx on 12.19.14 at 7:16 am
————————————-
Values are not clearly falling, and in some markets are going up.
People buy for various reasons including the fact that ownership is similar in cost as rent. Yes believe it or not this is still the case in some cities.
Tops are messy affairs.
Santa gives and takes.
“Great time to short TSX housing sensitive stocks before the meltdown begins. “
Other than the blatantly obvious (ie: the subprime mortgage companies, and the subprime mortgage insurers), and perhaps that underperforming Quebec-headquartered chain of home improvement retailers, have any ideas on which stocks specifically?
We don’t have “homebuilders” per se as public companies in Canada, so its not as simple as it was to short Toll Brothers stock as it was in the USA.
Smoking Man let us know how Christmas dinner with the famn -damily went!
Maybe I’ll try make a visit to Seneca Casino over the holidays, see if a guy named Smokey is hanging out at the bar.
I’m flying into Hogtown from a recent tour of duty in the Nam, tomorrow.
The banks are back and are stronger than ever !! Start getting ready for World Civil War I when this all falls apart starting next year. Your corrupt, purchased politicians at work:
http://armstrongeconomics.com/2014/12/19/banks-win-again-delay-repeal-volcker-rule/
Mark’s employment status
122 Mr. frugal responded to my comment on Mark’s employment status
Mark: I live on dividends and consulting fees, so I do just fine :)
Me: Translation – “unemployed”
Anyone care to tell him why?
***************************************
Mr. frugal: Poor interpersonal skills???
*****************************************
Mark at 132 responding to me:
It appears that someone has a severe reading comprehension problem, as ‘unemployed’ couldn’t be anything further from the truth.
*****************************************
I agree with Mr. Frugal, and I rest my case. Members of the jury, I think you will agree that the defendant Mark has amply proven over the past few months the reason for his (albeit denied) unemployed status.
The best advice for housing on Calgary is to read statistics and talk to people. Then work out the variables. Calgary is big. Each area is different. In my area int he NW where I acquired a mortgage in 2011 for $420 with $25K down the houses around are priced at $500K. So for right now the cost remains up. Will I requalify at a higher interest rate if the market value is less than I paid? Likely yes, because my incomes and the reality that what I pay for the mortgage each month is the same as what I was paying for rent, $1700. For many people they bought high cost places for low rates and are forced to scrimp on basic necessities like food. I didnt do this. I also dont view the house as an investment. I simply like paying money to a bank, not a a landlord, because I dont trust them(no rent controls in Alberta). Renting is easier if I were older and wanted to be able to move quick. That isnt the case for me, so I got a mortgage. Look at the MLS listings for your area, look at interest rates, assess your down payment. That will decide whether it is a good time to buy, irregardless of the market. It is better to not be reactive. If I had listened to this blog I would never have gotten a mortgage, which is not necessarily good either. There is no simple answer to the rent vs. buy question. Individual variables need to be looked at carefully so it is comfortable.
Empty words. The Fed stopped its stimulus spending cold turkey in October, and the economy has soared since. — Garth
This is factually incorrect.
1. Fed will continue to officially purchase treasuries with the interests on current bond holdings (4.5 trillions)
2. Banks will continue to use their 2.6 trillions in QE money that stay with the Fed to purchase bonds.
3. There is an agreement with Japan to use some of their QE to buy treasuries.
It buys us 2-3 years in which US needs to take over the world which is highly unlikely considering the BRICS stand and the dominant role of China in the world.
Why do you think there is this comedy with US accusing China of hacking the servers Sony can’t protect due to outsourcing of their security?
Somebody in Washington is very, very delusional and very dangerous.
Bet on ‘strong dollar’ for year or two.
After that….
Better stock up on tinfoil, Alice! — Garth
139 Meanwhile in the GTA on 12.19.14 at 12:35 pm
Damn, I really could have used this tip last night! I wrapped my wife’s gift, and even I could tell it was a fairly terrible job (the retailer wouldn’t do it for me, not even for a charge). I’d happily talk to TNL for a few minutes for that service.
“Values are not clearly falling, and in some markets are going up.”
Those markets are few and far between. I’m sure you can still find some very high enclaves in Toronto/Vancouver/Calgary that are still going up, but as time goes on, those are going to be increasingly narrow and limited. Of course, they’ll make the headlines because Realtors are desperate for the silly folks to generalize such comments over an entire region.
People buy for various reasons including the fact that ownership is similar in cost as rent. Yes believe it or not this is still the case in some cities.
But we don’t even know the cost of ownership compared to rent over a reasonable time period, as interest rates are, at best, fixed for only 5 years at a time in Canada.
Besides, usually when people do those pro forma calculations and come to the conclusion that renting and owning have the same cost, they tend to under-state the cost of long-term maintenance. They tend not to assign a risk premium for vacancy (or owner inflexibility). They tend to understate the cost of equity capital adjusted for risk. Which is why, as the tide continues to turn to the downside, housing will prove to be such a financial disaster for a wide swath of Canadians including many who can least afford it.
In honor of Yellen, we should call this the Hanukkha rally.
What they said about the banks:
http://thehill.com/regulation/finance/305575-gop-lawmaker-dodd-frank-repeal-aint-gonna-happen-
What they actually did:
http://www.forbes.com/sites/stevedenning/2014/12/12/with-dodd-frank-rollback-the-big-bad-banks-are-back/
The big banks are back folks…….and they will again be looking for your cash when they fail…..
Did you happen to notice those are US banks? — Garth
#146 To buy in Calgary?
“Renting is easier if I were older and wanted to be able to move quick.”
I think this is honestly the first time I have heard someone imply that older people desire the ability to move quickly more so than young people.
Love your blog Garth, but whenever you make month-to-month comparisons it is a bit misleading. The real estate business is cyclical over the course of a year, so valid comparisons are to compare the same month from a year ago. Comparing April to now doesn’t give much information unless you take into account the same months from previous years. April will almost always be higher than November. Keep up the good work Garth.
#139 Meanwhile in the GTA
I was at my TD branch the other day. They had a sign out that said “Lets us wrap your Christmas Gifts while you do your banking”. They had a table set up with wrapping paper, bows and the whole nine yards.
Is that service or what! I bet that the orange guy will only offer to virtually wrap your gifts.
====================================
And why wouldn’t they?
Bonus season is coming to a Canadian bank employee near you.
If one is to divide the estimates bonus ($10B+) at the number of the bank employee (available on the CBA page – http://www.cba.ca) one can get easily $30-$35k per person – average (this is not the real distribution)
Good banking music for the festive season:
https://www.youtube.com/watch?v=LxaY_mxYflg
The big banks are back folks…….and they will again be looking for your cash when they fail…..
Did you happen to notice those are US banks? — Garth
++++++++++++++++++++++++++++++++++++
Which country has the biggest economy in the world again? And the biggest influence? And military? And would cause another financial crisis worldwide if they were to fail like 2008?
Nobody’s cash is in jeopardy here. Stop making things up. — Garth
Which country has the biggest economy in the world again? And the biggest influence? And military? And would cause another financial crisis worldwide if they were to fail like 2008?
Nobody’s cash is in jeopardy here. Stop making things up. — Garth
++++++++++++++++++++++++++++++++
Making stuff up? That’s a pretty offensive comment to the thousands of available links on the internet from “reputable” sources such as the 20 page article in Rolling Stone Magazine.
Garth you like to tell people to provide links. Where are yours?
http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104?page=4
Wow. Rolling Stone. — Garth
Garth, how can you at the same time recommend stocks and tell people to stay away from housing?
Both are going up because of the cheap money policy, when the music stops everything will go down south.
There will be no safe heaven. Canadian housing will not go down until China slows down or alters its policy.
Don’t buy stocks. Have a balanced, diversified and liquid portfolio. — Garth
According to Baker Hudges Canada has lost 40 rig platforms in the last week alone (Dec.12-Dec.19)
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview
From 431 to 391 (9.3% loss) – one week only
Drill baby drill.
Garth, I finally figured out what I am going to do with my fixed income portion of my portfolio (currently only 10% of portfolio). 7.5% preferred shares ETF (ZPR), and 2.5% short term bonds ETF (VSB). Maybe when interest rates are more normal I will add another 2.5 – 5% of my portfolio in long term bond ETF.
How bad did I do?
“It’s a world in which you want to own financials, not stuff”
Wow
This is exactly what the talking heads on main stream media are saying.
They finally get it. Maybe you should. — Garth
#112 someone who isn’t me on 12.19.14 at 6:10 am
—————————————————
Not sure if I’m reading you correctly, but you’re trying to benefit from this situation?
Write to your boss, send links of the proof, and leave it at that. It’s not your decision to make. If your boss decides to reward you (or dump you for snooping) that is your boss’ prerogative.
wait…has canada ever done qe?
does the boc do this in some way now?
Mr Frugal and Shawn Allen, what hateful prejudice.
IT departments around the world depend on high functioning Aspergers. It’s a very effective method of birth control, as well.
I wonder how many smug baby boomers litter this blog as opposed to other generations?
These boomers, known collectively as the spoiled generation, who bought their houses for peanuts and profited from this 30 year housing boom, vacating Richmond, Burnaby, etc for a quick buck, profiting from HAM and disenfranchising Gen x. Millennials, and future generations.
Garth, with respect, are you am member of a freemason organization?
You mean the guys who sacrifice goats? — Garth
Mark has got a consulting job alright, he answers questions on the Greater Fool blog all day long. Even when you ask him not to.
The trouble is that the pay is like a Sonny and Cher fan.
Pro Bono.
Hey Garth,
Going away today and will be returning following season’s end. Wanted to thank you and take this opportunity to wish you and all who are close to you the best for the holiday season!
Garth for PM!!! But hey…if so, I would hold you to task =)
canada needs zillow.
any realtors out there want to break rank and start a similar website?
:)
Wow, same rhetoric as always. Doesn’t it get boring being as dramatic as the rah rah realtor crowd you’re always so critical of?
All these posters talking about a surge of listings, seeing signs popping up everywhere…. Such bull. 1,000 new listings in December, 19 days, let’s call that 52 a day. There’s about 197 residential communities in Calgary so a new listing per community every 4 days. So 4 new listings per community since December 1st. I really doubt anyone that suggests they’re “witnessing a surge” isn’t lying. I love how many posters there are who are watching their friends pull listings or drop their listings by $50k while laughing at them for being a renter. Really…. I believe you… Referring to an increase in listings as “flooding” realtor offices? For starters we know there are too many realtors in town, so their offices are never going to be flooded unless we’re talking about the bow breaking its banks. C’mon Garth, you should be better than that! Layoffs? There will be, we don’t know how many, or how bad, but your pumping out the same misinformation that you accuse the real estate industry of doing. You’ll probably end up being a little correct – but at least wait vs. make it up in advance.
And a dropping in price? Yeah probably, again, no way to guess until we see the longer term oil price and interest rates. The economic system is too complicated to say oil down, rates up = house bust. People that bought in 2009-2013 are up substantially and can weather a decline. I bought a house to live in and raise a family and am well above water. I could have sold this year but I’d have had to pack up and move and incur costs, something I’m not prepared to do for another 15 years unless I have 2 unexpected kids.
Thank you for the realtor perspective. — Garth
I suppose, anything is possible….
So Garth, are you a freemason?
Garth, with respect, are you a member of a freemason organization?
You mean the guys who sacrifice goats? — Garth
#162 Practical-Logical
”These boomers, known collectively as the spoiled generation,”
I think you have us confused with Gen X. At least we were out of the basement by age 18 or 19, not like you guys who tend to hang around til your 30’s feeling sorry for yourselves and mooching off those smug Boomer parents. You need to get a life.
“These boomers, known collectively as the spoiled generation, who bought their houses for peanuts and profited from this 30 year housing boom, vacating Richmond, Burnaby, etc for a quick buck, profiting from HAM and disenfranchising Gen x. Millennials, and future generations.”
Instead of hating on the boomers, and the HAMs (what little of them actually exist), why not expend your efforts to figure out what asset class is going to provide outsized returns to your particular cohort, and invest accordingly?
Boomers might look like geniuses for buying houses and bonds, bidding them to the stratosphere. But as the bubble continues to deflate, well, the last laugh will be on those who traded against such inflated valuations.
” Layoffs? There will be, we don’t know how many, or how bad, but your pumping out the same misinformation that you accuse the real estate industry of doing. “
Perhaps Garth or someone could assemble a list of companies already planning massive spending cuts. As such is no myth at this point.
MEG Energy, for instance:
http://finance.yahoo.com/news/meg-energy-slashes-2015-spending-163837616.html
“Oil sands developer MEG Energy Corp said on Wednesday it will slash the 2015 capital budget it released less than two weeks ago by three-quarters, as it copes with tumbling oil prices”
Some EPC out there is gonna get scorched, and the obvious outcome to such is a large number of layoffs.
#169 Ronaldo on 12.19.14 at 4:40 pm
#162 Practical-Logical
”These boomers, known collectively as the spoiled generation,”
I think you have us confused with Gen X. At least we were out of the basement by age 18 or 19, not like you guys who tend to hang around til your 30’s feeling sorry for yourselves and mooching off those smug Boomer parents. You need to get a life.
+++++++++++++++++++++++++++++++
You mean parents whom get a million dollar pension at the behest of their kids if they work for the Public Sector or other large union whose plans are unsustainable? Those parents? No that isn’t mooching. Even though that money in the form of debt will be passed on to Gen X’s and Y’s for decades to come in the form of increased taxes. That’s not mooching at all…….
Over 70% of boomers have no pensions, corporate or government, waiting. — Garth
#143 Steve French on 12.19.14 at 12:52 pm
Smoking Man let us know how Christmas dinner with the famn -damily went!
Maybe I’ll try make a visit to Seneca Casino over the holidays, see if a guy named Smokey is hanging out at the bar.
I’m flying into Hogtown from a recent tour of duty in the Nam, tomorrow.
……
Frenchee, going to senica sat and sun.
Then Halifax, then Atlantic city for new years..
If your around, come by Sunday. Otherwise I’ll have to come down to
Australia. That’s a hell of a long time on a plane without a smoke…
#168 Practical_Logical on 12.19.14 at 4:13 pm
I suppose, anything is possible….
So Garth, are you a freemason?
Garth, with respect, are you a member of a freemason organization?
You mean the guys who sacrifice goats? — Garth
…….
I am, what do you want to know…?
#162 Practical_Logical
“I wonder how many smug baby boomers litter this blog as opposed to other generations?
These boomers, known collectively as the spoiled generation, who bought their houses for peanuts and profited from this 30 year housing boom, vacating Richmond, Burnaby, etc for a quick buck, profiting from HAM and disenfranchising Gen x. Millennials, and future generations.”
===================================
Really? It’s you who sounds spoiled rotten, with an overwhelming sense of entitlement, looking for a convenient scapegoat and whining about the unfairness of life.
Somebody, somewhen, somehow made the mistake of teaching you that life would be fair and easy.
Welcome to reality. Grow a pair and get on with life. If that is too hard for you, order yourself a beer; go to the end of the bar; sit down; and shut up.
Real estate fraud in Calgary,notably mortgages insured by CMHC. Straw buyers and real estate sales people likely involved . CMHC once again shows it’s diligence in protecting our tax money.
Story on CTV yesterday but hard to find in MSM newspapers.
http://calgary.ctvnews.ca/video?clipId=516828
Garth,
Maybe you should put a quota on the number of comments per day per poster. I’m wearing out my thumb scrolling past all of Marks comments.
RE:#98 angela on 12.19.14 at 1:14 am
Well, i don’t know about anyone else, but I’d be thrilled with a $500 vacuum for Christmas!
That would suck!
KK
Re: #157 Steve-0 on 12.19.14 at 3:18 pm
Hedging some of your long positions in a about 2 weeks time might be an idea for that other 10 percent.
@Ronaldo #169
I’m Gen x.
I was lucky enough to have taken advantage of an opportunity and prosper, but still not (insane) enough to buy a million dollar crack shack in Vancouver, that you boomers bought for 30 grand, and proceeded to sell out Vancouver, Richmond, Burnaby etc, to HAM for the last 30 years.
Boomers like you need to get a life and depart this reality already, so we can try to fix this mess that you’ve created.
Wow!!!What a santa claus rally or short cover rally.The stock market has been great for close to 6 years.0% rates from the fed has been awesome for the speculators who took a chance just like real estate flippers.I’m positive will see 0% rates for another 2 or 3 years so load the boat on stocks and etf friends.I love it 0% rates forever but with no consequences in standard of living except the ones who buy houses in Canada.
DELETED
#180 – Practical-Logical –
”I’m Gen X
I was lucky enough to have taken advantage of an opportunity and prosper, but still not (insane) enough to buy a million dollar crack shack in Vancouver,”
Both of my sons are Gen X and both are successful business men and it had nothing to do with Luck. If Vancouver or Richmond have gotten to expensive for you, maybe you should look at relocating. There are many more desirable and affordable places to live in this province than Vancouver. You must hate your parents.
#175 jim h,
You make some valid points life is not fair , and you gotta have grit to make it. The boomers did great things but the truely smart and brave generation were the boomers parents ….They layed a foundation for prosperity which the boomers pillaged and squanderd. Bloated fed/prov debt , underfunded pensions , a looming healthcare crisis, put profits before the environment, now it’s up to the younger generation to clean up the mess , boomers can lower their nose a bit in my opinion , our standard of living in our twilight years depends on this generation doing well and feeding the tax beast. Senior politicians and heads of industry should be looking at the real problems why some in this generation have failed to launch( it’s not all their fault). No longer can you support a family on a high school education as so many of us did , education is miscalibrated and expensive, rent is high and the job market is tight with less boomers retiring due to their spending habits. We’re all in this together I think the boomers can drop the bravado it wasn’t all us. The war generation are the ones to hold their heads high…..
@ #184 Lumberjack arch
Exactly. It was the World War 2 generation that were great,laid the foundations, but unfortunately gave birth to these boomer cretins who just like spoiled children, grew up to be rotten apples, In their greed and short sightedness they sold out Gen X and the future generations.
With boomers, personal pleasure trumps all, not to mention their arrogance and self-entitlement which they proceed to blame Gen X and millennials for.
#185 Practical_Logical on 12.19.14 at 6:08 pm
Some bedtime reading for you. Enjoy.
http://punditwire.com/2011/05/26/hating-boomers-americas-last-acceptable-prejudice/
@#78 Roman Polanski
“Wow, this blog becomes a gathering of traders, asset managers and experts in US corporation profits.
Great to see how Canadians are abandoning housing and embracing real values…..”
++++++++++++++++++++++++++++++++++++
Apparently you missed Garth’s lecture on “Balanced and Diversified portfolio….”
And part of that lecture stated, there’s nothing wrong with owning a house/condo ……. just dont put all your eggs in one basket…..
If you want to buy now out of some bizarre patriotic Canuck delusion. Go for it. The Canadian realtors need as many schmuks as they can get to boost their year end numbers.
Just dont whine if the price drops 10, 20, 30 % in the next 12-24 months .
#184 Lumberjack arch & #185 Practical_Logical
IMO, it all is a matter of perspective. Sweeping generalizations about ANY generation is rather obtuse and pointless… but, again, just my opinion.
Should we castigate an entire generation because they brought us the Japanese internment, Vietnam, the Hell’s Angels, the Iron Curtain, Mutual Assured Destruction, McCarthyism, and the development of biological and chemical weapons systems?
Of course not. That would be as silly as calling them “The Greatest Generation”; a sweeping over-generalization that ignores the contributions of each and every generation before them!
I could argue that the boomers, flawed as they might be, brought you the expansion and improvement of the Interstate Highway System, the expansion of Medicare and the development of Medicaid, huge expansion of rural electrification, the majority of the National Parks, the Internet, personal computers and their operating systems, Nuclear power and so on and so on…
EVERY generation is flawed. Each and every one! So it is rather pointless (in my never-to-be-confused with humble opinion, that we attempt to weigh and balance each and every one.
I’ll stand by my main point: It is not the cards that life deals you (as an INDIVIDUAL… that is important) that matters: It’s how you play out your hand.
You can look for opportunities or you can look for scapegoats. We ALL have a choice. You can be a whining loser, or a take-the-bull-by-the-horns opportunist… a winner.
We have a choice.
#188 JimH on 12.19.14 at 7:28 pm
Couldn’t be said better.
http://www.bloomberg.com/news/2014-12-18/snb-starts-negative-interest-rate-of-0-25-to-stave-off-inflows.html
..I will slowly get out of financials during 2015. 2016 will find me with NO financials in my portfolio at all
Love the dismissal of my post as being “thanks for the realtor perspective” when I’m generally quite critical of the profession and largely think the average realtor is basically a career dropout that couldn’t do much else. I’m sure there is some good ones out there, but . . . Overall I feel the same way about them as you.
I also again agree with you on not being completely tied up in housing as I see it a bit and a few other things – just think you’ve got stuck in a rut. You sound like the guy who broke up with his girlfriend (the housing market) and just can’t stop talking about it. Yeah, bad time to buy, prices probably going down, 5-6% interest rates when they come will be very interesting. But you’ve been wrong for the better half of a decade and have a flair for the dramatic to support your point when it would be taken more seriously with a bit of a balanced view. You’re basically the extreme opposite of a housing fanboy.
Interesting how much time has gone by since 2007. In two years someone that overpaid for their house in 2007 and was conservative enough to get a 25 year amortization will only have 15 years left on it. Provided they didn’t refinance, which given what prices did followed by government rule changes it’s unlikely they’ve been able. A horny 25 year old that bought a house in 2007 will likely be able to renew in 2017 at 4-5.0% rates for another 5 years. Come 2022 those horny kids you’re so critical of will have a 10 year amortization remaining. That’s assuming they didn’t sell in 2010-2014 and buy a bigger house. I’m sure there are just as many that didn’t as did.
A more studied reading of posts published here would underscore the theme of diversification. Over-investing in real estate with a lack of financial assets is a dumb move in a volatile world in which shocks came cream the indebted. Try to be more balanced. It helps perspective. — Garth
“.I love it 0% rates forever but with no consequences in standard of living except the ones who buy houses in Canada.”
Better to remain silent……..
#186 Lumberjack arch on 12.19.14 at 5:51 pm
#175 jim h,
You make some valid points life is not fair , and you gotta have grit to make it. The boomers did great things but the truely smart and brave generation were the boomers parents ….They layed a foundation for prosperity which the boomers pillaged and squanderd. Bloated fed/prov debt , underfunded pensions , a looming healthcare crisis, put profits before the environment, now it’s up to the younger generation to clean up the mess , boomers can lower their nose a bit in my opinion , our standard of living in our twilight years depends on this generation doing well and feeding the tax beast. Senior politicians and heads of industry should be looking at the real problems why some in this generation have failed to launch( it’s not all their fault). No longer can you support a family on a high school education as so many of us did , education is miscalibrated and expensive, rent is high and the job market is tight with less boomers retiring due to their spending habits. We’re all in this together I think the boomers can drop the bravado it wasn’t all us. The war generation are the ones to hold their heads high…..
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Does anyone read?
Who do you think drank the cool aid and elected PET?
Who do you think voted for govt Medicare, CPP, OAS?
Which generation got the benefits without paying any of the costs?
Hint. It wasn’t the Boomers.
#187 Practical_Logical on 12.19.14 at 6:08 pm
@ #184 Lumberjack arch
Exactly. It was the World War 2 generation that were great,laid the foundations, but unfortunately gave birth to these boomer cretins who just like spoiled children, grew up to be rotten apples, In their greed and short sightedness they sold out Gen X and the future generations.
With boomers, personal pleasure trumps all, not to mention their arrogance and self-entitlement which they proceed to blame Gen X and millennials for.
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Geez I thought the Apple didn’t fall far from the tree.
I guess the war generation were terrible parents. But what would you expect from a generation that set up social programs that future generations would have to pay for
#190 Jim H
BEST post of the Day! Well said, Thank You!