Bad santa modified

There are those who believe stock markets are gossamer, economic growth is illusory, banks create money, governments steal wealth, paper assets wilt and corporations plunder. They trust nobody. They believe only in stuff they can physically control. And, sadly, a lot of them come here to vent, foam and use the can.

In many ways, this group of losers embraces most of the people you know. It’s at the foundation of our house fetish. How many friends or relatives have you heard say, ‘All I ever did was lose money on those damn mutual funds – but my house is making a fortune”? And because real estate has been bid higher by the masses, these same people end up with fat mortgages and no extra cash flow to plump TFSAs or other investment accounts. Thus, they have a one-horse strategy.

Too bad. The tide’s now flowing against them.

Look what happened on Tuesday. The latest US growth stat shot the lights out – the best performance in 11 years, an annualized 5%. That’s one juicy number. It comes after the best back-to-back quarterly growth in a decade, and makes fools of those who earlier in 2014 were trying to convince blog readers America was sliding into recession.

It’s irrefutable the US is expanding, and seems poised for the best year of growth since the 1990s. Cheap gas, more jobs, rising confidence, low rates, a strong dollar – it’s a heady mix for markets. No wonder the Dow shattered 18,000 for the first time this week, and the S&P shot to a new record, even as oil languished with the rest of the impoverished commodities, like gold.

Households account for 70% of all spending in the US, and they’re spending up a storm – ahead 3.2% annually, on everything from health care to cars. Gas is down to 2009 levels, and continues to decline. Employment’s way up. There were 321,000 new jobs in November, and the monthly average this year is more than 240,000 (last year it was 194,000). Unemployment is at a six-year low, and the federal budget shortfall’s at the best level in eight years. Even the trade deficit is shrinking, despite a stronger currency.

Globally, cheap oil will add close to a full percentage point to growth next year, says the IMF. Worker wages are now increasing in the US, Britain, Japan and Germany. Central banks have never had such coordinated monetary policy, and even the meltdown in Russia is not expected to upset an improving world economy in 2015.

All this means the Fed will indeed raise rates within the next six months. That will invoke some market volatility as the event gets closer, but the real action will probably be in the bond market, not with stocks. Yields will rise in the US, then in Canada, and then with mortgages.

Oil’s bear-market collapse is changing the game, and reinforcing a big trend this pathetic blog has been yammering about for a long time. Deflation. Oil’s collapse is deflationary, bringing consumer prices down sharply and thereby making the value of financial assets (and money) rise. At the same time, it increases the burden of debt. The combination for residential real estate can be deadly.

Look at gold as an interesting barometer of expectations. The only valid reason to hold precious metals is because you feel they’re a storehouse of wealth and paper money will fizzle. But the opposite is happening, and seems likely to continue. As the US dollar strengthens, equities shoot higher and the Fed moves closer to raising rates – making money even more valuable – there’s simply no more reason to be a metalhead. So gold and silver prices plop along with crude.

Canada, as you know, is more prone to this deflationary stuff than the States. We depend to a greater extent on oil, have a less diversified economy, more personal debt, higher taxation and have now allowed residential real estate to consume more than 25% of our GDP. Yesterday we mused about poor Alberta. But it won’t stop there.

Expect real estate to be under the same pressure as other commodities. A crash is unlikely. A melt is not. In any case, even if house prices just flatline for a while before fading, the years of giddy price appreciation are over. Taking on extreme leverage to buy a beater with 5% down will again mean extreme risk. The shakeout possible in Calgary and Edmonton will rattle a lot of people. The ripples will be wide.

Next year holds big promise for financial investors. Rocks and real estate, not so much.

This won’t be widely known until it’s too late.


#1 Shanks on 12.23.14 at 7:23 pm

(Amongst doomer gold nuts that is)

#2 Big Mie on 12.23.14 at 7:28 pm

You keep harping about how good the Americans are, well here is an excerpt from “money and markets”:

A Wells Fargo survey of middle-class Americans has uncovered that the majority have only saved about $20,000 for retirement, which is down from $25,000 in 2013. The estimated need is more like $250,000.

Thirty-four percent of working middle-class adults in the U.S. are not even contributing a dime to a 401(k) plan, an IRA, or any other type of retirement savings plan, according to this recent survey which followed more than 1,000 adults between the ages of 25 and 75 with a median household income of $63,000.

Those who are putting money away for retirement say that they are currently reserving $125 every month. Fortunately most of those surveyed — about 61 percent — say that the savings is not much of a sacrifice. Thirty-eight percent say that this long-term investment is a big sacrifice.

About 55 percent, however, say that they plan to save later since they got a late start on retirement savings.

#3 james on 12.23.14 at 7:30 pm

“The only valid reason to hold precious metals is because you feel they’re a storehouse of wealth and paper money will fizzle”

Quibble: validity is a property of arguments, not reasons.

I disagree with your assessment, although I am not a precious metals advocate. First, there is an argument that precious metals allow diversification since they are not correlated with other asset classes. Second, it is clear that precious metals have relatively consistent valuations long time periods. You know the old adage about what an ounce of gold could buy in 1913 versus today, in comparison to what 10 US dollars could buy over the same time frame. Short term fluctuations are another thing entirely.

You are right that some people use precious metals as a hedge against currency debasement and the like.

#4 JSS on 12.23.14 at 7:30 pm

If interest rates are to rise sometime next year, I’d wager that dividends for insurance companies (Power, Sun life, GWL) should begin to increase.
It’s been a long seven-year slumber for dividends for insurance companies.

#5 crowdedelevatorfartz on 12.23.14 at 7:30 pm

Smoking Man owns a Santa suit?

#6 Mr. Peabody on 12.23.14 at 7:30 pm

Is that santa Rambling Man?

#7 waiting on the westcoast on 12.23.14 at 7:31 pm

This won’t be widely unknown until it’s too late.

Garth – hilarious!

As I am going to be to busy working tomorrow to read this pathetic blog, I wanted to wish everyone a Merry Christmas however you celebrate it or not…

Garth – as your blog becomes more MSM, what topics will you cover next in order to maintain your anti-hero demeanor?

Looking forward to a chaotic 2015 – the biggest opportunities happen during the most volatile of times.

#8 Paully from MTL on 12.23.14 at 7:33 pm

Thank you.
I owe my financial standings and those of my family and friends to you.
You have saved us from financial catastrophe.
I’m 27 years old and am hopeful for my family and my future because of you.
If ever you need anything please email me.
Merry Christmas!!!
Thank you.

#9 Ketch on 12.23.14 at 7:34 pm

To you and yours Garth . happy holidays and thank you.

#10 Obvious Truth on 12.23.14 at 7:36 pm

Nobody else tells you this stuff!!

Well, very few will.

Cause it’s not in their interest.

And lets get over cad and oil. The market has spoken.

#11 MEANWHILE IN FRANCE on 12.23.14 at 7:40 pm

A merry Christmas to you and all your readers.
2015 will be even more exciting.

#12 Shawn Allen on 12.23.14 at 7:40 pm

Not everything we believe is true…

But Garth’s post above is true.

But here is another topic

I have always (until very recently) believed that corporations should be allowed to deduct interest payments as an expense in calculating taxable income. I believed it without question.

And, I wondered why dividends should not also be tax deductible for corporations. In fact dividends are tax deductible for REITS and mortgage investment corporations and used to be for Income Trusts.

But rather than make all dividends tax deductible why should we not level the field by making interest payments by corporations no longer tax deductible?

Why should debt investors receive returns from pre-tax corporate profits (EBIT) while equity investors get profits only out of after tax amounts.

Why should an otherwise profitable company be able to avoid income tax by loading up with debt? (Often debt from a related company).

Here is a revolutionary idea. Let’s stop corporate deductions for interest.

One reason to do it that there are tax-free investors. Since interest flows to TFSAs tax free then no taxes are paid EVER. Also pensions and RRSPs defer or avoid taxes for decades.

The deductibility of interest by corporations is as accepted as that fact that the sky is (usually) blue. But it does not have to be so.


#13 Kev on 12.23.14 at 7:42 pm

What do the other investors here think re betting against the real estate market? Are there any investment opportunities at all, or is it best to wait for it to happen and then pump your money into the financial sector and REITs after they’ve hit bottom? Or is it best to sit it out entirely?

#14 Holy Crap Wheres The Tylenol on 12.23.14 at 7:45 pm

Sitting here in sunny Nassau today, oh yes it was 81F! Flew the whole family down to Atlantis for a green Christmas this year. Can’t stop but think Garth you are the harbinger of bad news today! Give them something good to cheer about!
Oh well someone’s got to be the bell ringer, keep on keeping on!
Another Piña Colada by the pool, try some Smoking Man Casino Cards and conch fritters!

#15 Cici on 12.23.14 at 7:46 pm

Thanks for the great post!

#16 Shawn Allen on 12.23.14 at 7:47 pm

Real Estate Consumes 25% of GDP?

“…and have now allowed residential real estate to consume more than 25% of our GDP.”

Should that read “constitute” or account for, rather than consume?

#17 Whitey on 12.23.14 at 7:48 pm

Merry Christmas Garth and to all the blog dogs.

#18 mike on 12.23.14 at 7:48 pm


#19 Happy Renting on 12.23.14 at 7:48 pm

We filled up today at 96.9 cents. Felt ridiculously gleeful with gas under a buck. Realistically, we drive so little we’re only saving a few dollars a month, but there’s a psychological aspect that makes us feel like there’s more shekels to spend in our pockets. Multiply that by every car owner and the retailers are in for a merry Christmas!

#20 GeorgeSoonToBeRetired on 12.23.14 at 7:49 pm

Good evening Garth, and Merry Christmas to you and yours!

A small request:

Since many of us wait with bated breath for your daily musing, would you mind posting tomorrow’s blog by about 4 p.m. EST?

That way we’ll all still have an hour to start our Christmas shopping before stores close. Should be just about enough.

(BTW, if you are planning ahead, same thing applies on Feb 14 – please post by 8 p.m. that day so we have time to get to the LCBO to buy the annual icewine)

I know, I’m just a sentimental old fool )

#21 Cici on 12.23.14 at 7:50 pm

Oh, one more thing…I thought we were supposed to get an increase to our TFSA limit from Santa Harper…so that one didn’t pan out, eh?

As I said, next budget. — Garth

#22 Mr. Frugal on 12.23.14 at 7:53 pm

God bless America! At this rate, I might be able to retire early.

#23 Smoking Man on 12.23.14 at 7:53 pm

Good numbers.. Low dollar, low gas prices, great for GTA real estate.
I am noticing outside 416 things look flat, but it is the crapiest month for sellers.

But down here in the Southside Johnnys land.

A rundown semi was listed for 349k Sold for close to 500k

Rediculos, but happens every time they open a Starbucks..

For Cowboys, not so good news..

#24 Robert Agnew on 12.23.14 at 7:54 pm

Steve the economist Harper and his pal Joe the undertaker Oliver bet big on oil and now we pay the price for ignoring the housing crisis and Ontario manufacturing.

I hope Steve retires to the big money boardrooms of his oil pals and let the rest of us folks pay the bills.

So much for miracle Stevo and his clapping pseudo Reformer Monkey People (MP). I guess they can enjoy their pensions for life on our dime.

#25 Oh Boy! on 12.23.14 at 7:59 pm

Good news coming out from the U.S. I’m glad the U.S is on the up-swing.

My concern (and this is just me) is the speed of this ascension. I reckon interest rises commence about April next year Garth. Australia’s guts will be kicked in 6 ways to Sunday when IR increase.

#26 Goldie on 12.23.14 at 7:59 pm

Garth, your first paragraph describes me. And I’m PROUD of it. :)

#27 Setting the Record Straight on 12.23.14 at 8:04 pm

I am puzzled why it is so popular to metaphorically suggest a decline in the oil price is like a reduction in taxes. It’s not a reduction in taxes. When food prices or auto prices drop we don’t reach to take this metaphor of the shelf.

And the PTB are now discussing how income freed up from lower gasoline costs will help the economy. These are the same people that want the central bank to promote consumer price inflation. If you are in that camp, then you ought to be quite perturbed about a drop in prices.

The other issue to take note if in Canada is the openness of the economy. Oil price declines have contribute to a fall in the Canadian dollar. Imports will rise in price for Canadians absorbing a portion of the gains. And to the extent that any real gains are spent on additional imported items, this reduces the impact of these consumer expenditures on the real economy in Canada.

#28 Humbug | on 12.23.14 at 8:05 pm

[…] Source: […]

#29 Setting the Record Straight on 12.23.14 at 8:07 pm

“A Wells Fargo survey of middle-class Americans has uncovered that the majority have only saved about $20,000 for retirement, which is down from $25,000 in 2013. The estimated need is more like $250,000.”

Working middle income Americans are not middle class.

#30 Ray Skunk on 12.23.14 at 8:09 pm

#20 Robert Agnew

Steve and Joe Owe are responsible for ignoring Ontario manufacturing?

So not McGuinty and Wynne with endless rate hikes, ballooning hydro costs due to their green energy scam, bullshit such as the “College of Trades” and now the impending ORPP which will put the final nail in the coffin of private enterprise?


#31 Mark on 12.23.14 at 8:10 pm

“If interest rates are to rise sometime next year, I’d wager that dividends for insurance companies (Power, Sun life, GWL) should begin to increase.”

Why do you figure that? You do realize that insurance companies tend to have portfolios loaded with long-term bond investments which perform poorly in a rising rate environment, right?

If anything, rising rates and the rolling back of ‘financialism’ will cause incredible damage to insurance companies generally. As investment returns in relatively ‘safe’ investments favoured by insurance companies will be very poor, if not negative.

#32 Randy on 12.23.14 at 8:11 pm

How many times does lightening strike ?

#33 Roman on 12.23.14 at 8:12 pm


#34 Mark on 12.23.14 at 8:13 pm

“What do the other investors here think re betting against the real estate market? Are there any investment opportunities at all, or is it best to wait for it to happen and then pump your money into the financial sector and REITs after they’ve hit bottom? Or is it best to sit it out entirely?”

Canada’s big banks are effectively ‘short’ the residential RE market, by holding CMHC-insured subprime mortgages (ie: the equivalent of GoC bonds) instead of the mortgages themselves. Additionally, they have put options on the mortgage debt in a deflationary environment at 100 cents on the dollar, which will prove to be profoundly valuable. While retaining the ability to increase spreads.

The interval 1990-2000 proves that Canadian banks can grow their profits and share prices enormously in a RE decline environment.

#35 Smoking Man on 12.23.14 at 8:13 pm

#14 Holy Crap Wheres The Tylenol on 12.23.14 at 7:45 pm
Sitting here in sunny Nassau today, oh yes it was 81F! Flew the whole family down to Atlantis for a green Christmas this year. Can’t stop but think Garth you are the harbinger of bad news today! Give them something good to cheer about!
Oh well someone’s got to be the bell ringer, keep on keeping on!
Another Piña Colada by the pool, try some Smoking Man Casino Cards and conch fritters!

You lucky bastard.. So jealous, I’m being forced to go to no were land, Halifax on Xmas day and spend 5 damn days there. It’s hard to find something fun to do in summer. The winter.. A nightmare.

I’m going to be board out of my God damn mind.. Counting the days to New years Eve in Atlantic City… I might write a short story how shity it is there.

Play Mississippi Stud… Don’t chase and peek at the Cards of players next to you. You can get advantage over the house. Just be discrete.. I’ve been booted a few times.

Still envious, I need to talk my son to transfer to head office in Florida..

That way when miss Smokey demands to be with number 1 son, in the sun, the trip will be tolerable.

#36 Scumop on 12.23.14 at 8:13 pm

Its been decades since prices were not held artificially high by price fixing cartels. So long, people think those $100+/barrel prices were normal rather than forced.

It will be an interesting transition to a free market. Given time, we will adapt though the short term will hurt many. A little forced diversification could be a good thing. Reliance on natural resources alone is a fools game, soon to be a poor fools.

#37 Setting the Record Straight on 12.23.14 at 8:14 pm



I will address only one issue. Holders of debt instruments are in fact taxed by central banks promoting inflation.

#38 Mark on 12.23.14 at 8:16 pm


The current scheme, of integration, works just fine. The only big flaw is that the dividend tax credit is *not* a “refundable” tax credit. Hence, people who are low-income, but invest in dividend paying stocks, effectively pay a higher effective tax rate than their ordinary position in overall hierarchy of marginal tax brackets would imply.

Other than that, there is no good reason to tinker with the tax system and how it currently operates. Other than to eliminate the special preference accorded to REITs on taxable income (as you suggest) to the exclusion of taxable income derived from other sources such as the operation of an active business.

#39 Doc on 12.23.14 at 8:18 pm

Merry Christmas, Happy New Year to all. If you’re reading this then you have reason to celebrate. Canada is a nice place because of prevalent ideas about tolerance, rule of law and fair play. I welcome those who agree those are great values and I hope our elected and appointed officials keep the maintenance of those values in mind when opening Canada to newcomers. I was a newcomer in 1955. Occupation -child. I’m thankful for the advice in this blog which I have followed and though I would have been richer if I’d waited longer to act on it, I’ve enjoyed the freedom from stress that a debt free lifestyle brings. Simplify your life, connect with people in the community your in and do something for others. Garth, thanks for sharing your financial acumen and boomer humour. Thanks to the contributors here who frequently teach me something and for the fact its not always about money.

#40 Setting the Record Straight on 12.23.14 at 8:24 pm

I lied.
Actually neither dividends nor interest should be taxed.
Then we would not need TFSAS.

#41 Dominoes Lining Up on 12.23.14 at 8:27 pm

“A crash is unlikely. A melt is not.”

This is a more moderate way to express things, but I think a crash and a melt are mostly the same thing, just a matter of time and perspective. In the US, there were lots of folks denying a “crash” along the way, and there were a lot of times where it felt like only a “melt”, though in hindsight it is easy to see it as more serious.

It took the US from a peak in 2006 to prices still bottoming in 2012, a long six years, for this all to play out.

In our case, we may be now almost one year past the peak, so this could still take a while on the downside.

While we so often pat ourselves on the back, saying we are better, different from the US, I wonder if that is true.

Here’s a contrarian question for blog dawgs:

Are there any reasons to think our own RE melt/crash might be even WORSE than what happened in the US?

As a thought experiment, I can think of a few…….

1. Our economy is less diverse and resilient overall, and much less independent of one major trading partner.

2. CMHC essentially does the same bad things as subprime lenders did in the US, but we deny the effects are negative, so on balance it might be even worse than the subprime lenders because of our blindness to it.

3. Our lending laws require renewals every five years on mortgages. Americans can lock in at low rates for decades. This creates natural, predictable crises for Canadians renewing mortgages in an environment of rising rates and declining property values. More forced sales in a declining market could plummet prices more dramatically than even the US saw.

See? Whether or not you agree, it is not hard to make rational arguments that we could be in for a doozy of a correction that could make even Americans pity us.

What other arguments do blog dawgs see for this proposition, I wonder.

It makes this lady, forecasting a 90% decline seem just a bit more plausible.

My mind is still not made up, but I think we should be open to all scenarios for a crash/melt, not just the best-case ones.

#42 Setting the Record Straight on 12.23.14 at 8:30 pm


How many utilities would be bankrupt?

Why would a corporation ever issue bonds?

What would pension funds do?

#43 TEMPORARY® Foreign Prime Minister on 12.23.14 at 8:34 pm

“…..They trust nobody. They believe only in stuff they can physically control…..In many ways, this group of losers embraces most of the people you know….”

Losers? A little harsh so close to Christmas, don’t you think?

Can you really blame them for not trusting anyone, considering none of those who deliberately orchestrated the biggest financial implosion of the middle class since the Great Depression are doing any jail time?

I’m getting you Reynolds Wrap for Christmas. — Garth

#44 Entrepreneur on 12.23.14 at 8:38 pm

Group of losers…that broke my heart. I thought we added spice. Merry Christmas, Garth and all the blog dogs. Love you all.

Glad to hear the U.S. is picking up, knew they could do it. As for Canada, too many taxes but the price of gas is coming down which helps. Ontario’s HST is scaring the businesses away. The Liberals promised to get of the GST but once in they said it was too hard to remove. What was the PM’s name?

Think of the system on this earth as in a complete circle which we should respect.

#45 RealistvsExtremist on 12.23.14 at 8:38 pm

In many ways, this group of losers embraces most of the people you know.


Pretty arrogant calling people that take the time to do “real research” and not regurgitate the sewage fake stats called “govt statistics” losers. I’ve read hundreds and hundreds of well thought out posts from people. Surely they are not all “conspiratorial BS”. But calling people “losers” is your right in our dictatorship called Canada. Soon enough……technology will prevail and totalitarian govt/corporations will be revealed for the slime they are. Time is on our side.

Merry Christmas from a loser.

#46 SWL1976 on 12.23.14 at 8:39 pm

I hope you are right Garth. However, one needs not dig very deep to find a completely different story.

Quite a bipolar world we live in these days. All safe bets are off

Thanks for the sound financial advice

Everyone stay safe and enjoy this holiday season

#47 John Doe doe on 12.23.14 at 8:49 pm

I bought my detached house in midtown Toronto in August 2000 for $337,500.00 it is now valued at 1,250,000 and lived in it for 14 years. My investestment accounts have had no where near the same appreciation and I could not live in them! So if the market goes down 30 percent so be it! I would never want to be fearful tenant and paying off the Landlords mortgage like most of negative resentful crowd that hang out and whine here!!!
Merry Christmas everybody

I rent in Toronto. I sold my big house. I’m not fearful, negative or resentful. If you have truly made such a capital gain in 15 years, then you’re the fool for not crystallizing it. — Garth

#48 Smoking Man on 12.23.14 at 8:50 pm

For heavens sakes dogs, tomorrow is the day for all the good wishes, bla bla bla. Not today..

We are still in chirp, and debate mode…

Let’s not waste it

#49 Mark on 12.23.14 at 8:51 pm

“Are there any reasons to think our own RE melt/crash might be even WORSE than what happened in the US?”

You basically covered off all of what I was going to suggest, namely, that the cyclicality in Canada runs deeper, subprime is far more prevalent in Canada than it ever was in the USA, and housing inventory requires far more active “upkeep” in Canada due to the temperatures/snow than in most of the USA.

However, Canada, and Vancouver/Toronto more specifically, do have proverbial “aces in the hole”, and that is, they are home to the headquarters’ of the extremely and deeply out of favour gold/silver miners.

If a Silicon Valley-like bubble were to be induced in the precious metals mining sector, Vancouver/Toronto valuations today actually would look fairly reasonable, and participants in such a bubble probably could place a meaningful floor underneath prices at current levels. Now I’m not talking of the PM stocks going up just 10X, I’m thinking more along the lines of the stocks going up 100X.

Not to say that such is in the future, but if it were to happen, prices in Vancouver/Toronto would likely have considerable merit.

#50 Yuus bin Haad on 12.23.14 at 8:55 pm

That being said, Garth, I still like jingling my junk (silver, that is).

#51 Sheane Wallace on 12.23.14 at 9:01 pm

Great GDP numbers. But where is the interest rates increase to support them?

How come growth was 2-3 % but interest rates much higher – 5-6 % in the 80-es?

As I said, it is not coming any time soon, at least not in 2015. or 2016. maybe 2020?

#52 Republic_of_Western_Canada on 12.23.14 at 9:02 pm

The pointlessness of real estate fascination and the absurdity of shoveling salary and debt into it aside, there seems to be some confusion about what deflation is.

Deflation is less money chasing a basket of goods. Less money either means high savings rates (old-age Japan) or less $$ in circulation. North America is not renowned for brutally high savings rates, and European savings don’t change much from one decade to the other, so deflation would have to mean fewer bucks in circulation.

Our monetary system is based on an infinitely-increasing modest rate of inflation. That’s for it to sustain itself, to pay interest on previous debt. (Ever hear of paying off the national debt? Ain’t gonna happen.) So deflation will be temporary, and probably due to the Fed trying to sop up all that excess QE money it issued trying to jump-start U.S. consumerism.

The drop in oil prices is due to amphetamine-swilling commodities speculators getting a whiff of high inventory levels, as much as it is to inter-tribal antagonism in the middle east or U.S. shale frackers gone berserk on cheap bond money. But that doesn’t cause deflation, unless the Fed and subsequently bankers close off money taps to the Bakken junkies. That hasn’t happened yet.

So much of the U.S. & Cdn consumer base has its back to the wall financially, that a decrease in gas or oil-product prices will not be used in a discretionary manner. The same behavior will continue. Slightly lower Jet-A prices at best will prompt some airlines to remove carry-on luggage fees, or to hire one more aviation mechanic for regulatory maintenance to help out the guy that’s been worked to death. But consumers will not suddenly fly to South Africa because of that, or drive to San Diego on vacations en masse just because the gasoline price dropped.

However, laid-off workers (whether due to normal completions, or decreased maintenance intensity, or postponed projects) will have a contributory effect to RE price cooling. And anyone with cash savings will certainly get better returns in financial markets. Especially with energy stocks of well-run companies bought at the low end of their cycle.

#53 Freedom First on 12.23.14 at 9:04 pm

Times are good for people who are liquid, diversified, balanced and debt free. Keep in mind that for me personally it is how I enjoy living my life. Too each their own, but I always put my own freedom first. I also believe helping others is the 2nd most important thing for me to do. And how I do it is to truly help people, and not by enabling or rewarding any financially insane behavior that will do more harm than good in a myriad of ways.

Garth often mentions recency, and it bewilders me too that people will borrow their brains out on a one asset strategy, or any piggish consumerism, like big trucks with nutz. The thinking that because interest rates have been low for so long, or will stay low for this or that reason forever, is disturbing, and will cause many many people to be changing their address and/or losing their nutz. And not by choice. Change, or change ill be forced upon you. Thanks Garth, I appreciate your ongoing blog very much in contributing to my sanity in an insane world.

#54 Scott in Gibsons on 12.23.14 at 9:07 pm

Oops! You forgot a few things. What effect do trillion dollar annual deficits have on the US economy and do you base your predictions on this continuing forever? What effect has shale oil/gas production had on the US economy and how will sub $60 dollar oil affect this going forward? How much did Obamacare affect the GDP number and is this really good for the US economy? How will you expain your mistake if you are wrong?

The US budget deficit in November wax $56 billion, which is less than half of last year’s $135 billion. — Garth

#55 Corban on 12.23.14 at 9:07 pm

Oh Garth, so naive! We all know the Diversified Doomer is into gold, canned tuna, and shotguns. Gold may be flat since 2010, but Highliner is up >400%, and Sturm, Ruger, and Co is up >250%. The end is nigh!

#56 Shawn Allen on 12.23.14 at 9:09 pm

Corporate Tax fairness

Tax integration rules provide for lower taxes on dividends and capital gains as compared to odrinary income to avoid double taxation.

Paying interest out of pre-tax corporate money was okay when investors paid tax.

But slowly we have introduced too many non-taxable or at least tax-deferred investors (primarily penaions and , RRSPs and now TFSAs). This leaves tax integration in shreds and is costing the government treasury money.

It needs to be fixed by eliminating any operating profit flowing out of corporations to debt and equity investors without the corporation paying tax or by eliminating some or all of these free-loading tax-assisted savings vehicles. (As an investor I benefit from these, as a citizen and as a free-thinking observer, I know they are unfair subsidies to the richer.)

#57 Terrier on 12.23.14 at 9:09 pm

Maybe it’s not that dandy down south …

-In the United States today, the number of payday lending locations is greater than the number of McDonald’s and the number of Starbucks.

-One recent survey found that about 22 percent of all Americans have had to turn to a church food pantry for assistance.

-This year, almost one out of every five households in the United States celebrated Thanksgiving on food stamps.

-The rate of government dependence in America is at an all-time high and approximately 60 percent of U.S. households get more in transfer payments from the government than they pay in taxes.

-According to a report that was just released by the National Center on Family Homelessness, the number of homeless children in the U.S. has soared to a new all-time record high of 2.5 million.

You copy-and-paste just as well as other great thinkers. — Garth

#58 Holy Crap Wheres The Tylenol on 12.23.14 at 9:11 pm

#35 Smoking Man on 12.23.14 at 8:13 pm hey it ain’t so bad you going to be with some of your family. Halifax any place doesn’t matter. I just couldn’t fly my family out to Hawaii that’s what the wife really wanted to do. My one daughter is a doctor and she just cannot take that much time off of work. So Nassua it was it short sweet and warm. The grandchildren are all here all four of my children are here. If it was Halifax I’d still be happy. That’s what Christmas is all about being with your family. Although I have to admit it is sure as hell nice being 80° and sunny!
See Smoking man my plan is to do nothing except spoil my grandchildren at the beach during the day and the children at night in the Casino and restraunts!

#59 Albertaguy on 12.23.14 at 9:19 pm

Filled up the tank at $1.99 per US gallon in PHX today. 65, sunny and sat around the pool enjoying a beverage!

#60 the Jaguar on 12.23.14 at 9:25 pm

Garth, If you are getting #43 Temporary Foreign Prime Minister Reynolds Wrap for Christmas could you get me some, too? We mostly have Alcan foil in western Canada, and Reynolds is a far superior product. Very hard to find out here.

Merry Christmas, Garth

#61 Lumberjack arch on 12.23.14 at 9:28 pm

Garth, with so many bullish US reports and predictions is this not classic market euphoria?
Contrarians, ( what all index investors are when they rebalance) should be wary…..Dow just broke 18000 an all time high …..

Yeah yeah long term horizon, 7 percent even with 2008 , still no one likes waking up to a portfolio that just sh!t the bed

And why would that happen? Worry about your house, as I am sure you have more market exposure there. — Garth

#62 Leo Tolstoy on 12.23.14 at 9:29 pm

Garth is right. The US economy is getting stronger by the quarter. Commodities like gold and oil and the businesses associated with them have been worthless for awhile now.

Any currency has value if the market decides to give IT value. Whether it’s paper, a shiny rock, or a digital coin. And right now, the market is throwing away rocks and embracing paper. And the USD is the King of paper. And paper beats rock. All day.

I feel bad for anybody who invested in gold and oil these last couple years. They’re watching their portfolio get wiped out. In slow motion.

#63 economictsunami on 12.23.14 at 9:34 pm

I love numbers.

They can be both juiced/massaged/ manipulated and still they can be presented with a straight face as actual hard data and carry an air of truthiness. This practice has been increasingly used with impunity by governments, their agencies, business and individuals; especially come tax time. (From this one can mold a plausible narrative construct positive headlines to drive algos and the market.)

As for the 5% GDP reading:

In the grand scheme of things we are at the back end of Q4, so what great importance does the final reading of Q3 have anyway?

A slight problem also arises in regards to incongruity with other economic data and this is precisely why the Fed is having such a tough time raising rates.

If their bullshit metre hasn’t been piqued, then the question of sustainability invariably creeps into the equation.

It is quite amusing that the same tactics used against people who spoke out against the false economy excesses pre 2007, are dusted off and being reused once more to make fun of those that fail to fall for this “recovery” over 6 years (and counting) in the making.

Losers of the world unite!!!

Don’t take the brown acid and wash it down with the Wall St/ MSM Kool Aid…

Wolf Richter: Already Crummy US Economy Takes a Sudden Hit:

Watch T. Boone Pickens rip CNBCs Joe Kernen a new one on oil:

#64 nonplused on 12.23.14 at 9:34 pm

Well banks can’t create money but they can create loans and they don’t need a lot of money to do it. For the most part when they write a mortgage they just create and entry in both sides of the ledger, the mortgage being an asset and the money being a liability from their point of view. They then transfer the liability to wherever the money is going and have the asset. But I’m not sure it’s a bad thing as long as the loans are solid, either backed by assets or good credit scores.

In the mortgage example you could think of it as the bank is “monetizing” a house. So long as the borrower is good to pay it back I don’t think it’s a problem, and in any case the bank retains the right to liquidate the house if necessary, so all that has really happened is the value of the house has been put into circulation, but with a solid agreement by the borrower to service the debt which also takes the money back out of circulation over time.

Same thing sort of happens with government bonds. The government just prints those up, but in theory they are obligated to pay them back so it’s just a time transfer of cash. None of it is exactly the same as printing unbacked money. In theory the interest rate on both mortgages and bonds acts to serve as a balance that accounts for the time value of money.

When interest rates are high I think it means that the perceived demand for money now is greater than in the future so people pay a premium to borrow. On the other hand when rates are low it means people don’t see much difference between the value of a buck now and in the future. Hey wait a minute…

#29 Setting the Record Straight

People only need $250,000 to retire? That’s crazy. At 2% interest (assuming retired people need very safe investments, not the growth mix Garth talks about which I think is more suited to people who are still working), that’s only going to generate $5,000 a year in income. I spend that much on booze! I think that person is going to run out of money before they run out of life, as Garth likes to point out. Even if they only need an income of $25,000 a year beyond CPP and all that, which is not how I want to live I’ll tell you that, they have something like 12 – 13 years of money. So if they retire even a late as 70 they better not make it past 83. Oh well I guess their final investment can be a big ol’ bottle of sleeping pills. Or maybe their kids will help them out (ha ha ha ha ha!)

#65 John Doe doe on 12.23.14 at 9:37 pm

Garth if you were to buy back your big house now it would probably cost you a few hundred more now! The new owner is not the greater fool on this one!
Merry Christmas!

Want to bet? — Garth

#66 omg the original on 12.23.14 at 9:53 pm

The Myth of Efficient Market Theory (EMT)

I made the point a couple weeks ago about how irrational it was that world stock markets were down in sympathy with oil prices.

My point was that, in fact, cheaper oil would be a major boast to non-producer economies, and that markets should be up, not down.

It just highlighted that markets are about EMOTION as much as RATIONAL thinking.

Now 2 weeks later the market has caught up and is reaching new highs in the US.

What has changed in the last 2 weeks that would cause a rational observer to radically alter their views of world economies. Not much really.

What has changed is that markets are getting comfortable with the lower oil prices and feeling good about the prospects of growth as a result.

Ultimately what all this means is that those individuals that can keep a rational view of things when calamity happens will have an advantage over flighty Mr Market.

#67 Lumberjack arch on 12.23.14 at 9:55 pm

Ahh c’mon Garth I’ve been reading this pathetic blog since the beginning ….. I rent

Then you should be in a better mood. — Garth

#68 Mark on 12.23.14 at 9:56 pm

“It needs to be fixed by eliminating any operating profit flowing out of corporations to debt and equity investors without the corporation paying tax or by eliminating some or all of these free-loading tax-assisted savings vehicles.”

Shawn, interest rates are now so low that flows out of corporations to the debt investors where it escapes tax in the hands of non-taxable investors is minimal.

And its pretty hard to argue that government isn’t making a boatload off of Canadian corporations in terms of corporate income tax, even after tax-deductible interest has been paid.

I’m personally not a fan of expanding tax shelters like the TFSA because of the rather narrow nature of their scope. But tax leakage is likely quite minimal.

Additionally, if such non-taxable investors can bid up debt (ie: suppress its non-taxable returns), then returns to equity should, over the long term, be expected to be higher. Which is great for someone who can take risk and invest in equities. Since returns to equity are always taxed at the corporate level, the whole matter of excessive non-taxable debt is somewhat self-correcting with excess returns to taxable equity. And vice versa.

#69 Lumberjack arch on 12.23.14 at 9:59 pm

Be fearful when people are greedy and greedy when others are fearful …. Merry Christmas

#70 omg the original on 12.23.14 at 10:01 pm

#61 Lumberjack arch
Garth, with so many bullish US reports and predictions is this not classic market euphoria?


Markets are not wildly overvalued.

If they were trading at say 3 to 5 times normal historic valuations (like say Vancouver housing) then maybe we should be worried.

#71 Mark on 12.23.14 at 10:02 pm

“assuming retired people need very safe investments, not the growth mix Garth talks about which I think is more suited to people who are still working”

Garth’s balanced portfolio is far safer than a single un-diversified “2% savings” account which has an enormous amount of issuer risk and currency risk.

Its not reasonable for someone to expect a good return without taking risk. And if the economy isn’t growing, a non-risk taker shouldn’t expect any return over the long term. Which is why savings accounts usually destroy value over the long term.

#72 Ronaldo on 12.23.14 at 10:04 pm

#62 Leo Tolstoy on 12.23.14 at 9:29 pm

”I feel bad for anybody who invested in gold and oil these last couple years. They’re watching their portfolio get wiped out. In slow motion.”

If you were a Buy and Hold investor that may be the case. There have been great opportunities for great profits in those sectors over the past couple years and more to come.

#73 Obvious Truth on 12.23.14 at 10:08 pm

Different tone on the blog. House humpers are defending
themselves while those with the portfolios are living it up.

Doomer percentage is constant.

Forget toronto or vancouver escaping this. The masses there are by far the poorest. People in small towns can pay the mortgage with some extra babysitting.

The correction is classic. Started in suburbs and smaller centres first. It’s always the same.

You guys in warm climates are making me jealous. Enjoy.

#74 Ray Skunk on 12.23.14 at 10:12 pm

John Doe doe:

Congratulations on the huge capital gain. Are you going to sell and buy another place for $338k, or are you going to sit there rubbing your groin with smug satisfaction as you look at local RE listings?

Ah, forgive my cynicism. I’m just a resentful tenant paying off my landlord’s mortgage. I’m guessing you never paid any interest on your mortgage? You know, since mortgage interest is something you’ll never get back either.

Since we’re at year end, here’s my contribution to the pissing contest:

Money I’ve saved this year: $53,613
Money I’ve thrown away on rent: $9,000
Money spent on hydro, property taxes, maintenance: $0
Return from investment portfolio: 9.1%

Fourteen years if your timeline you say?

Hmm, $53.6k per year, for fourteen years, compounded at 9.1%…

…with no 5% to the Realtor to get my hands on that.

Merry Christmas indeed!

#75 Gold Finger on 12.23.14 at 10:18 pm

The US budget deficit is $56 billion (not one trillion), which is less than half of last year’s $135 billion. Yes, tell me about mistakes, won’t you? — Garth

Really – WSJ begs to differ:

The annual deficit for fiscal year 2014 fell 29% to $483.35 billion, the Treasury Department said Wednesday. That was slightly less than the $486 billion forecast last week by the Congressional Budget Office and was the lowest deficit since 2008. The federal fiscal year starts each Oct. 1.

My correction – that total is for November. Yes, the deficit fell by more than half. And he’s still wrong. — Garth

#76 Retired Boomer - WI on 12.23.14 at 10:19 pm

#26 Goldie

Sucks to be you, I guess. Have a Merry!

#77 Ret on 12.23.14 at 10:21 pm

Once the US gets into high gear, many of the businesses and factories that are still left in Ontario will probably leave to be closer to US suppliers and markets or they will re-locate to a brand new, state of the art plant in Mexico.

Food processors and auto sector related plants appear to be the most vulnerable if the past is any indication.

Once your competitors leave for more favorable business environments, you have no choice but to do the same or slowly go under.

More condos, bike lanes, wind turbines and Smart Meters won’t fix broken.

#78 Shawn Allen on 12.23.14 at 10:22 pm

Winners Win, and Losers Lose

Is it not true?

In sports and in life?

And do members of each group not tend to self identify?

The markets do not award points for degree of difficulty nor attitude. They just impartially hand out the grades… but there does tend to be a delay in getting the grades. Yesterday’s winners (such as houses) are not necessarily tomorrow’s winners. Only time will ultimately tell.

#79 olderthanaboomer on 12.23.14 at 10:23 pm

#65 John DOE do

Speaking of a big house:
Tommy Hunter (remember him?) has a big one in Puslinch or N Burlington for many months now…no action. You gotta know when to fold them, etc.

#80 Smoking Man on 12.23.14 at 10:27 pm

#58 Holy Crap Wheres The Tylenol on 12.23.14 at 9:11 PM.

The only good thing and reason I aggreed to go.. Have a client there that needs a quote on another project. Which my Corp will get.

So at leased I write off the trip.. And pick up a small 6 fig contract..

Otherwise no God damn way I would go, seeing my son was here last weekend.

Enjoy the grandkids, we’re still waiting.. We have a recent grand nice. My wife went into sax 5th Ave and came out with about 500 bucks of little outfits for her, she would will probably out grow them next month.

Once we have our oun grand kid, I’ll need a part time job, perhaps delivering pizzas. Cause she will break the bank.. No doubt about that.

#81 ANON on 12.23.14 at 10:29 pm

Garth is right!
Neither banks nor other entities create money, since money would be worthless if somebody created it.
It is the debtor who creates money when signing for a loan s/he/it cannot mathematically pay back.
Please note this is mathematically true to all loans, based on any underlying asset.

Food for though this Christmas :)

#82 Retired Boomer - WI on 12.23.14 at 10:30 pm

Yes, another good day to be an investor.

Despite all the clatter about conspiracy theories the U.S. seems to be doing better according to the people who work where I live.

Alas, they are not Wall Street types, but farmers, factory workers, sand miners, railroaders and truck drivers. As a guy who spent his life in transportation, these ARE the guys I know best, and trust most!

It would seem the old advice to live within your means just might still apply. Yeah 20% of the country has it bad-they have always had it bad. 20% of the country lives VERY well!

Which 20% would you aspire to be like? Do what the rich do, and someday you just might be one of them!

Note: ‘someday’ usually takes 30-35 years of living as you ought.
Don’t wanna do that? Enjoy the bottom 20% it’s FREE

#83 Ben on 12.23.14 at 10:34 pm

Check this out for oversupply:

Wish I had a graphic of the dots breaking out like measles over the past 12 months! Now add in rising rates. Which of these little dots *has* to sell and which don’t? We will have the answer soon.

#84 doughoward on 12.23.14 at 10:35 pm

I filled up my rental 1000cc Viva with .70 USD per liter for the next trip around Langkawi, Malaysia. Temp upper 30s. Phoenix is so Canadian I wouldn’t be caught dead in it and most Americans consider it gods waiting room for golfers.Get a life and at least hit mexico. Only low end Albertians would see Phoenix as a vacation destinations and give one reason as the price of gas.Tell me I’m wrong.

#85 Bobby on 12.23.14 at 10:35 pm

Poor old #65 John Doe doe must be a realtor. That final gasp before Christmas hoping that someone will hopefully buy. Out here in Victoria, open houses are empty, listings languish then expire and Reduced seems to be the clarion call on the posted signs. No the market is not doing well, no matter how much lipstick VREB tries to put on this pig.
Recall this is the same group that once posted, higher interest rates will lead to higher prices. You can’t make this stuff up.
Balanced portfolio up 10.9% for the year thus far. Doesn’t include today’s rise. No my house is not rising that quickly nor do I think I could find a buyer for what it is even assessed for taxes.
It’s going to get real ugly.

#86 charles on 12.23.14 at 10:36 pm

You got it here folks. Buy stawks now.
If you are weighted down by those worthless, formerly precious, embarssing rocks and thinking of tossing them I can offer to come over and take’m off your hands for some of these peices of paper valued at all time highs and going to the moon for sure.
All replies kept confidential.

#87 Not 1st on 12.23.14 at 10:53 pm

The stock market is just like Charlie brown trying to kick the football. Just as soon as you go to take a kick at it, it gets pulled away.

#88 kommykim on 12.23.14 at 10:55 pm

RE: #34 Mark on 12.23.14 at 8:13 pm
The interval 1990-2000 proves that Canadian banks can grow their profits and share prices enormously in a RE decline environment.

The increased bank profits in that period probably had more to do with the Rise of the Bank Machines and Debby Does Debit than anything else.

#89 RayofLight on 12.23.14 at 10:57 pm

Merry Christmas Garth to you and yours. I have been a consistent reader for about 2 ½ years. I have been more aggressive in rotating into US equities over the past couple of years mainly from your outlooks. Each of our TFSA s are currently pushing about $70k, and each are currently about 70% $US. I am a growth oriented stock picker and look forward to next year’s volatility to vultch (sp?) the dips.

#90 Ben on 12.23.14 at 11:03 pm

#85 Bobby – not to pick on you but if you see it as choosing housing vs stocks you are not in tune with 90% of the population.

Most people have no savings. They can barely put together a deposit. Housing gives them access to leveraged credit.

The cannot invest in stocks because they have no money.

It’s a bet but it’s the only one they have. This is why housing has gone up so much.

People have to wake up to this fact. I see this over and over.

#91 Nodebt on 12.23.14 at 11:11 pm

Hey blog dawgs, my buddy swears on the Connelly report for investing, does anyone know anything about it? Thx

#92 saskatoon on 12.23.14 at 11:18 pm

if the US economy is so rosy…

why not raise rates now?

Because low-inflationary growth is a powerful thing. — Garth

#93 LH on 12.23.14 at 11:41 pm

Merry Christmas all!
Can’t wait for Santa’s bonus check.
Hit it out of the park this year (double my budget)
Too bad industry wide revenues are down, and costs up.
I came to this industry 10 years too late!

#94 Bobby on 12.24.14 at 12:17 am

#90 Ben, no worries as I have thick skin. The problem will arise when mortgages come due and housing prices fall. There will not be enough equity to ensure a 10% deposit so the bank will want cash to make up for the shortfall. And, of course there is no cash, which means a forced sale. Saw that many times during the last downturn.
Cannot believe the lack of financial knowledge among people. It’s amazing but sad.

#95 crowdedelevatorfartz on 12.24.14 at 12:23 am

@#35 Smoking Man
“I’m being forced to go to no were land, Halifax on Xmas day and spend 5 damn days there. It’s hard to find something fun to do in summer. The winter.. A nightmare…..”
Apparently you havent discovered the Casinos on the waterfront yet. And the plethora of pubs, bars and cabarets that you can easily swill enough to destroy whats left of your watermelon sized liver.
Time to suck it up for 5 days and pretend to become a turista Smokey instead of a miserable curmudgeon that will ruin your extended family’s Christmas.
Tis the season.

As for the rest of you conspiracy theorist, gold hugging stock shunning, anal retentive, armageddon craving, whiners who have refused all my offers of free elevator rides……

Merry Christmas.

#96 Eric on 12.24.14 at 12:27 am

“A crash is unlikely” – you are wrong here Garth.

#97 45north on 12.24.14 at 12:38 am

Ray Skunk: Steve and Joe Owe are responsible for ignoring Ontario manufacturing?

So not McGuinty and Wynne with endless rate hikes, ballooning hydro costs due to their green energy scam, bullshit such as the “College of Trades” and now the impending ORPP which will put the final nail in the coffin of private enterprise?

Wynne is responsible for Ontario’s hydro costs. Who else? McGunity canceled the gas-fired generating plants for the sake of keeping Liberal seats in the Legislature. The Oak Ridge Moraine is highly over-rated.

Dominoes Lining Up: Are there any reasons to think our own RE melt/crash might be even WORSE than what happened in the US?

big reason is that Canadian debt to income ratio now is higher than the US at the peak of its housing market.

160% for Canada right now versus 120% for the US 2008

this article broadly confirms the US number:

Further, U.S. households had become increasingly indebted, with the ratio of debt to disposable personal income rising from 77% in 1990 to 127% at the end of 2007, much of this increase mortgage-related.[9]

It’s kind of hard to see this when you walk down the street but the number of payday loans joints is an indication. In Ottawa the number of such joints on Bank Street between Heron and Walkley is amazing. In a bad way.

#98 Fortune500 on 12.24.14 at 12:55 am

Thanks for doing what you do Garth. Merry Christmas to you and your family. Merry Christmas Blog Dogs!

#99 TEMPORARY® Foreign Prime Minister on 12.24.14 at 1:05 am

“…I’m getting you Reynolds Wrap for Christmas. — Garth…”

No worries. I accept your invitation to get lost. Take care.

P.S. Good luck back on the Hawg, next summer. Myself, I got hit by a drunk 1%’r a few years ago. Never stopped his Escalade to see if I was still breathing. An artificial leg hasn’t stopped me from touring on my ’07 Wide Glide, since. You’ll be fine.

#100 RealistvsExtremist on 12.24.14 at 1:19 am

The US budget deficit in November wax $56 billion, which is less than half of last year’s $135 billion. — Garth

Not sure if 8 TRILLION (8,000,000,000,000) in deficits in the last 10 years is something I would cheer about. Oh yes I forgot. RECOVERY !!

Anyone care to let us in on how many 100’s of years its going to take of “recovery” to pay back all these trillions? Anyone? Of course. No one cares cuz we will all be dead and leave this “recovery” debt with our kids. And grandkids and great grand kids and great great grandkids.

#101 NotAGreaterFool on 12.24.14 at 1:23 am

Garth – what changes is the Big O considering in 2015 to the housing market? Surely your group of spies has intelligence on this.

#102 Snowboid on 12.24.14 at 1:32 am

#84 doughoward on 12.23.14 at 10:35 pm…

You are wrong, low end British Columbians also see Phoenix as a vacation destination.

But as you can obviously handle high humidity, I can’t and love the dry heat.

Fuel is also .70 USD a litre here.

To each his own, so Merry Christmas, Happy Holidays, Hannukah, etc. to one and all.

#103 Why is a crash unlikely? on 12.24.14 at 1:32 am

After prices tripling.

Is it different here?

#104 wallflower on 12.24.14 at 1:36 am

In reading #85 Bobby on 12.23.14 at 10:35 pm
I decided to visit VREB for the first time. Ever.
Holeeee……………. has anyone told these moronsters that 1984 was 30 years ago?

“To analyse sale price trends in the Greater Victoria housing market, the VREB has moved away from reporting changes in average and median sale prices. In its place, we now analyse trends using a system called the MLS® Home Price Index (MLS® HPI).

At the heart of the MLS® HPI is the concept of the benchmark home, a notional home that includes the most common attributes of typical homes in a given area. By analyzing ten years of VREB MLS® sales data, benchmark homes have been defined in the single family, townhouse and condominium apartment categories for individual neighbourhoods, regions and the Greater Victoria area as a whole. The MLS® HPI model then uses a sophisticated statistical analysis methodology to determine values for benchmark home attributes in order to arrive at a benchmark price for each of our benchmark homes.”

#105 Ex-gunsliger on 12.24.14 at 1:40 am

I agree…mostly. My house is worth nothing. I can’t rent it out…..I use it as a family pied a terre. I can’t sell it because I’ll always need a place to live. I spend most of the year in hotels…it’s nice to have a place to call home after months and sometimes years on the road. So…..I’ve got a really valuable albatross? The trick is to not consider real estate as wealth….just a crash pad. Pay it off in cash and don’t think about it.

I saw the US GDP numbers….lets wait for the revisions before we go crazy. But generally yes….the macro is improving…and it is time to buy stock of all kinds….including a two year play on oil/service….thats the timeline everyone is discussing that coincides with Obama out of office.

Merry Xmas and a profitable new year ya’ll.

#106 JimH on 12.24.14 at 1:57 am

Strange as it might seem, Commercial Banks do ‘create’ money, Garth, even if they can’t print it.

The link below sends you to, “Money creation in the modern economy”, By Michael McLeay, Amar Radia and Ryland Thomas of the Bank of England’s Monetary Analysis Directorate.

This document is from the 2014 Q1 Bulletin of the Bank of England.

From the summary: “This article explains how the majority of money in the modern economy is created by commercial banks making loans.
Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.
The amount of money created in the economy ultimately depends on the monetary policy of the
central bank. In normal times, this is carried out by setting interest rates. The central bank can
also affect the amount of money directly through purchasing assets or ‘quantitative easing’.”

You may choose to disagree, as did Paul Krugman and Martinat first… but it is a good read!!!

Martin Wolf of the Financial Times makes a strong advocacy on stripping the private banks of their ability to create money here:

#107 Retired Gen X on 12.24.14 at 2:02 am

It’s good to be retired.

Happy Holidays everybody. Be safe.

#108 M on 12.24.14 at 2:07 am

Garth are an incorrigible optimist :)
You will lose two bottles of vodka very soon:
Bottle #1 : QE in the south will scream ” I’m baaaaak” :)
Bottle #2 : The mother of all stock market crashes since it’s only QE
.. I am generous and I will not claim bottle#3 : the second collapse of US housing market :) the way: I drink Finlandia. Grey Goose will also do.

One day, when you’ll be really upset, I’ll tell you how I did it :)

#109 M on 12.24.14 at 2:10 am

..about the great white north.. I fully agree: It’s toast. in..”dead man walking”

#110 cmj on 12.24.14 at 2:20 am

Thanks, Garth for all your posts over the years and educating us on the real estate market. It isn’t about a real estate crash or when it will happen. Some bloggers point out that it has been years since your prediction of a market correction. That’s not the point. What you have done over the years is awaken many of us to our chief asset – our home. Yes, our homes have gone up significantly and therefore very logically will correct. This one asset created an imbalanced financial portfolio.

When you cash out, what do we do with the money? If one is not careful, the profits could just evaporate

You answered this through your education on ETFs. It has been priceless to me and I will be forever grateful. I had a lot invested in individual stocks and mainly in Canada. Thanks to your guidance, my portfolio is now diversified with ETFs in Canada, US and globally. My son has also benefited from this knowledge and his investment portfolio is thriving along with his children’s RESPs.

You and your family deserve a very merry Christmas and health, prosperity and happiness for the new year. We are so fortunate to live in this wonderful country and be able to have freedom of speech and opportunity

#111 rentin on 12.24.14 at 3:12 am

#47 John Doe doe bird

The only thing you are right about is how long Garth has been wrong about when housing prices will top out. I sold a little too early in 2012, but switched over to stocks and made another 50% since then – you have not.

In fact until you sell your house, you haven’t made any money.

Which brings me to my point. You are holding one mother of an illiquid asset. It’s also the same reason there is some stability in the month to month house prices.

Sell my 1.2M portfolio today – click – done.

Sell your 1,250,000 house today – list, install sign and wait for that greater fool.

If you lived in 65% of Canadian markets (soon to be 80%) you wouldn’t believe I’ve been wrong about the timing or a real estate price decline. It’s here. — Garth

#112 Lillooet, BC on 12.24.14 at 3:51 am

When talking about the Canadian housing market, you have to differentiate between overheated markets like TO, Calgary, Edmonton, Vancouver and Victoria with the smaller, more affordable markets in most of the rest of Canada.

If you buy a beater house in TO or Vancouver for $800k then you’re making a big gamble that prices will go up and could lose big time just in interest payments alone. If you buy an average house in a small town for $200k then you’ve made one of the best investment decisions possible. You have a place to live and your asset will appreciate.

One thing that Garth never mentions is that $200k invested in the stock market is money “other people are using” and you get no day to day benefit for that $200k. However, if you put that $200k into buying yourself a bigger or better house, you get to enjoy the benefit of that money each and every day because it has given you a nicer place to live – more privacy, a larger yard, not having to answer to a landlord.

#113 Waterloo Resident on 12.24.14 at 5:12 am

It’s Christmas.

#114 LowFatOil on 12.24.14 at 5:33 am

I’m just curious about this upcoming/current real estate “cooling off”….so called “bubble deflating”, but not exactly *popping*.

Will it be a short dip on the graph (like 1 or 2 years cooling off).

or will the “cooling off” go on and on and on for years…… like it did during 1988 – 1994 when prices were “cooling off” for about 6 or 7 years in the GTA.

I imagine price differentials/time frames will be regional. For instance, in my view, Ottawa prices and sales started slowing down already in 2012.

Merry Mythmous everyone.

#115 Wednesday on 12.24.14 at 6:39 am

Thank you for your great blog Garth.
Wishing you and all your readers and commentors a very Merry Christmas and a safe and Happy New Year.

#116 Keen Reader on 12.24.14 at 7:57 am

Best Wishes to all for the Holidays. After retiring then taking a new job for the fun of it, this blog still provides me great financial advice, plus occasional pearls of wisdom. I am very thankful to Garth, whose books and blogs have played a big role in my freedom of choice at this stage of my life.



#117 maxx on 12.24.14 at 8:33 am

Cher Garth, many thanks for all that you do. Your blog, of noble origin, provides much financial wisdom, and is exceptionally entertaining.

Most everyone knows this, but it needs to be repeated as a way of showing gratitude for having had the opportunity to learn so much.

Happy Christmas and a very happy and prosperous 2015 to you and all of blog dawgs!

#118 maxx on 12.24.14 at 8:53 am

#41 Dominoes Lining Up on 12.23.14 at 8:27 pm

“….Whether or not you agree, it is not hard to make rational arguments that we could be in for a doozy of a correction that could make even Americans pity us.”

Whatever comes to pass, the arrogance displayed by many north of the 49th when CAD was at par and the US was struggling will almost ensure that Americans will not “pity us”.

Many who believed re rhetoric and bought high are now in for one heck of a ride down, with future wealth at retirement an impossibility.

#119 Santa Claus on 12.24.14 at 9:15 am

Ho Ho Ho Garth!

Thank you again for compiling the naughty list in one convenient location for me, Garth. It makes for less work for the reindeer knowing we don’t have to deliver to any of your posters.

Merry Christmas!!

(Your Brad Lamb bobblehead doll is on its way!)

#120 Wilted on 12.24.14 at 9:58 am

Thanks for the posts, Garth.
I have been flip-flopping the last 2 or 3 years and most recently thought about taking the dive into home ownership(for the first time). I has some serious doubts about it being a worthwhile venture financially.

Your blog has been a big help in getting me to “no” on buying, and feeling comfortable about it. It has meant some serious savings, and less stress in my life. A real gift.

So thank you again and happy holidays.

#121 Meanwhile in the GTA on 12.24.14 at 10:11 am

#74 Ray Skunk on 12.23.14 at 10:12 pm
Since we’re at year end, here’s my contribution to the pissing contest:

Money I’ve thrown away on rent: $9,000
Hey Mr Skunk.
$9,000 on rent for a year?
$750 a month?
For you and Mrs Skunk?
Who do you write the cheques to? Your Mom?

#122 Paul Sinclair on 12.24.14 at 10:15 am

I still don’t understand how you can preach real estate doom and gloom and at the same time recommend stocks. Stock markets around the world are at all time high because of the same thing that has been driving real estate up: cheap money policy. When that ends there will be no safe heaven and please don’t think that balanced portfolio will save you.
US GDP at 5% is mostly an accounting trick. If things are so great then why are the commodities around the world crashing? It’s because the world economy is slowing. Deflation is coming

I do not preach doom, but caution. I do not recommend people buy individual stocks. As for US growth, it is hardly an illusion. In time you will regret having had the wrong world view. — Garth

#123 Danforth on 12.24.14 at 10:18 am

My couch potato portfolio in a combination of funds delivered me 11% in 2014.
There’s no reason to fear the markets.

And I have about 8% of my stuff in a self-directed account to try and outsmart the market with some of my own picks. And while I haven’t lost money, I’ve fared worse than the funds, and certainly not outpaced the market. Lesson: Trust the people who manage the money!

#124 Ontario's Left Coast on 12.24.14 at 10:30 am

Cash portfolio at an all-time high and it’s great to know there’s still some juice in the tank for u.s. and global equities moving forward.

Happy Festivus, Garth and dogs!

#125 Paul W on 12.24.14 at 10:37 am

Merry Christmas Garth

Looking forward to reading your blog in 2015…

#126 Waterloo Resident on 12.24.14 at 10:38 am

Oh oh, I think this might foretell some bad news for any Canadians hoping to get a cheaper house anytime soon.
Both Canada and Russia are ‘one-trick ponies’ with their economies centered around oil production. So what happens to Russia just might happen to Canada in a similar situation.

Everyone on this blog is expecting Canadian house prices to fall when interest rates go up here, but what if Canadian rates rise dramatically (Like Russia) but at the same time our house prices keep rising dramatically (like Russia, in this article):

((” “The rate increase hasn’t yet hurt demand,” Osipov said. “Buyers are as active as ever, despite the fact that property developers have begun to raise prices.”
Demand for homes in the second third of December “was the highest in the last six years, even as prices rose” by 5 percent to 12 percent, said Natalia Mikhna, spokeswoman for developer PIK Group. “Even those who were planning to save more for the installment payment and take a mortgage in 2015 applied.”
The central bank increased the benchmark interest rate by 6.5 percentage points to 17 percent on Dec. 16, the biggest single move since 1998.”))

#127 Rational Optimist on 12.24.14 at 10:57 am

112 Lillooet, BC on 12.24.14 at 3:51 am

‘One thing that Garth never mentions is that $200k invested in the stock market is money “other people are using”…’

That’s kind of the idea- other people, who are a lot smarter than you, are using your money for you.

#128 Delusional realtors on 12.24.14 at 10:59 am

Delusional realtors like waterloo resident, smokingman and the many other realtors who spend countless hours here. Why you may ask? The RE market is going down. Keep huffing and puffing realtors but the Re market is going down and has been for the past year. Oh yeah keep revising your fake numbers you shysters

#129 BOC says housing OVERVALUED by 30% on 12.24.14 at 11:08 am

Sorry realtors I think I trust the BOC vs uneducated high school drop out used car salesman criminal realtors. Realtors offer almost ZERO value. They don’t even have high school education and it shows with their idiotic and often clueless views on economics and reality.

#130 Sponge on 12.24.14 at 11:13 am

Merry Christmas Garth!

Thanks for the continued information on financial well being… And have a Happy New Year!

#131 I'm stupid on 12.24.14 at 11:24 am

Shawn Allen

I appreciate the compliment. I call myself stupid because everyday I learn something new. Today I’m smarter than yesterday and tomorrow smarter than today therefore I will always be stupid when compared to tomorrow.

Happy holidays everyone!

#132 Lumberjack arch on 12.24.14 at 11:28 am

#70 omg the original on 12.23.14 at 10:01 pm
#61 Lumberjack arch
Garth, with so many bullish US reports and predictions is this not classic market euphoria?


Markets are not wildly overvalued.

If they were trading at say 3 to 5 times normal historic valuations (like say Vancouver housing) then maybe we should be worried.
I was asking Garth I don’t need msm market commentary regurgitated back to me from a armchair economist …..we can all read the globe and mail here

#133 Balmuto on 12.24.14 at 11:40 am

RE: #31 Mark
“You do realize that insurance companies tend to have portfolios loaded with long-term bond investments which perform poorly in a rising rate environment, right?”

True, but you’re missing the other half of the equation: liabilities. Rising rates (more precisely, corporate bond yields) reduce the present value of the insurer’s liabilities. The average duration of the insurer’s liabilities is typically longer than the average duration of the insurer’s assets, especially for lifecos. So it’s a net benefit when rates rise: the value of the liabilities drops more than the value of the assets. Also, higher yields tend to increase profit margins on insurers’ products, as the spread they earn in the market for new business is higher.

Unless it’s accompanied by a wave of defaults a rising rate environment should be very positive for insurance companies.

#134 alister macloud on 12.24.14 at 11:49 am

Buy low, sell high.

Oil might have dived lately but my oil companies are not, dividends are flowing and there are expectations building for oil to stabilize around $ 70 next spring.
So don’t write off oil, it is a finite resource.

It is all part of diversification. Energy, consumer staples, high dividend and growth stocks in a balanced diversified portfolio, one can’t exclude a whole sector from a diversified portfolio.
Miners might be hated lately but there are some excellent long term buy and hold companies that are very cheap out there.

As for the precious metals sector 3-5 % would hurt no one in physical metal or mining stocks. Gold is holding within 1150-1220 range quite successfully lately despite the temporary plunge in oil prices.
As for the reasons to hold gold or platinum, there are many and it is naive to make strong statements on the topic. Gold is a fascinating story, people either love it or hate it with almost no neutral views, which is very, very strange.

There is no reason to hold an asset that pays no interest or dividends, is losing value, has declined 40% in three years, costs money to store and is valued by nutbars who hate banks, fear the economy and think taxation is theft. — Garth

#135 Ray Skunk on 12.24.14 at 11:51 am


Hey Mr Skunk. Hi there Meanwhile!
$9,000 on rent for a year? Yup
$750 a month? Yup
For you and Mrs Skunk? $750 each. $1500 total, we have a great deal in a nice part of Toronto. I didn’t include her spend/saves in my “annual report”
Who do you write the cheques to? Your Mom Oh my no. Our landlord. Who has just stumped up for a new furnace for the winter, bless him! He’s also freezing rent for the next two years.

Merry Christmas!

#136 cramar on 12.24.14 at 11:53 am

It seems that Stephen Roach thinks that interest rates will not rise anytime soon in the U.S.:

He’s wrong. — Garth

#137 Ronaldo on 12.24.14 at 12:42 pm

#128 Waterloo Resident on 12.24.14 at 10:38 am

If you were around in the early 80’s when mortgage rates hit 22%, you will recall that people were being interviewed on BCTV news and were being asked by he interviewer why they were rushing to get a mortgage at these high rates. Their answer was that they were afraid rates would go higher and they wouldn’t be able to get into the market.

#138 MoneyFromA$ia on 12.24.14 at 12:47 pm

Gold is measured in US Dollars. Do the conversion and you will see that it’s $1350 ish CAD!!! Still.

You can argue that the U.S. dollar is strengthening but in contrary, other currencies could simply be weakening around the U.S. dollar. If so, then our real estate is getting cheaper for foreign buyers. There has been an uptick in prices and consumption in Vancouver RE.

TSX has had two significant drops with a bounce up…corrections??.. or are the bounces back up showing further investor denial? Low interest rates are fueling investment in the markets to scrape up a return better than 2% inflation.

With an election coming, don’t expect home prices to be unsupported.

Ps. Christmas is the major consumer time of the year, is it just a coincidence that the joint oil cartels have crashed oil prices??? U.S. consumers now have extra cash saved from the pumps to buy more Chinese goods…

It’s all a joint collaboration.

#139 Doug in London on 12.24.14 at 1:07 pm

Not 1st, post #87:
In order to do well with investing in the stock market (or better yet follow Garth’s advice and invest in equity ETFs) you buy them when they are on sale. Last year REITs and preferred share ETFs were on sale, this year it’s oil and gas ETFs. Next year, it will be something else (any guesses?) that will be on sale and that’s the time to buy. So what do you do if it takes a few years for the price of those on sale investments to go back up? Simple, just sit back, relax, this time of year enjoy the Christmas and New Years festivities, and let the dividends and distributions roll in! Imagine that, actually getting paid to wait! It’s that simple.

#140 Shawn Allen on 12.24.14 at 1:14 pm

Where exactly is the Money Invested in the Market?

Rational Optimist at 129 quoted Lillooet BC as saying

‘One thing that Garth never mentions is that $200k invested in the stock market is money “other people are using”…’

Perhaps an interesting point.

What “other people’ are referred to, explain.

Do people understand who exactly now has their former money when they put their money “in the stock market”.

If a stock is trading at 10 times book value and you buy $10,000 worth how much (if any) of your former money is the company using?

What actually is the point of the above quote?

Is it meant to be some kind of revelation of something nefarious?

Why should Garth have mentioned the above?

#141 Smoking Man on 12.24.14 at 1:37 pm

#131 BOC says housing OVERVALUED by 30% on 12.24.14 at 11:08 am
Sorry realtors I think I trust the BOC vs uneducated high school drop out used car salesman criminal realtors. Realtors offer almost ZERO value. They don’t even have high school education and it shows with their idiotic and often clueless views on economics and reality.

Welcome back laughingcon

#142 Quebec is Great on 12.24.14 at 1:47 pm

Re: #128 Waterloo Resident

Um, you are a twit. ’nuff said

#143 jess on 12.24.14 at 2:10 pm

shawn allen

…”The four firms insisted that they no longer sell the type of very aggressive avoidance schemes that they sold ten years ago. While this may be the case, we believe they have simply moved to advising on other forms of tax avoidance which are profitable for their clients; such as the complex operating models they offer to major corporate clients tominimise tax by exploiting the lowest international tax rates. The four firms have developed internal guidelines on where the line between tax planning and aggressive avoidance lies, but these principles do not stop them selling schemes with as little as a 50%chance of succeeding if challenged in court.

many/ few
Controversy over QCs who give ‘deliberately misleading’ tax advice
Thursday, 14 August, 2014 – See more at:

#144 Holy Crap Wheres The Tylenol on 12.24.14 at 2:31 pm

Just watched Christmas Vacation here this morning in cloudy but warm Nassua! Now Garth you will know where my handle came !

#145 everythingisterrible on 12.24.14 at 2:32 pm

#113 Lillooet, BC
That’s all well and good, but usually people live where their work is.
Are there a lot of 60k-100k+/yr job vacancies in Lillooet? You’ve made small town living work for you. Congratulations! But you can’t prescribe it as a housing solution to everyone as you so often do.
Buying a 200k house in small town canada isn’t such a great investment when the big sawmill closes down and the whole town dissolves.

#146 jess on 12.24.14 at 2:44 pm

How tobacco bonds work – capital appreciation bond or CAB.

disruptor – e ciggies ?

Bankers Brought Rating Agencies ‘To Their Knees’ On Tobacco Bonds

Wall Street pressed S&P, Moody’s and Fitch to assign more favorable credit ratings to their deals and bragged that the raters complied. Now many of the bonds are headed for default.

by Cezary Podkul
ProPublica, Dec. 23, 2014, 1:53 p.m.


#147 Retired Boomer - WI on 12.24.14 at 2:44 pm

#42 and #100 [email protected] Prime Minister

Well the US has only prosecuted 39 Banksters since the 2008 financial crisis. Lots more to choose from. Obama never misses a chance too miss a chance to have the DOJ take action.

The response to 2008 was vastly different from the response top the S&L crisis of the late 80’s. See the prosecutorial records under G W Bush I compared to Obama. just saying…..

Oh, and pass the Reynolds’ Wrap please!

#148 Joe2.0 on 12.24.14 at 3:05 pm

Mortgage rates creeped up in the US today, as Garth projected.

Canada will eventually follow so housing prices will drop and the cost of borrowing will climb.

So who wins here besides the banks.

The hopeful home owner will need a chunky down payment to take advantage.
Or parts of the Canadian housing market crap the bed while rates are low allowing buyers to “get in” somewhere.

I stick with my 2015 projection based on economic cycles war cycles previous market trends and astronomic signs, blood moons.

These indicators point towards this Oct as the beginning of a severe economic down turn with a large correction in the global exchanges thus impacting the RE markets, domestic and commercial for starters.

Pay off debt, have a nest egg and prioritize what really matters at the end of the day.

Do any of you dogs care to contribute how you think 2015 will play out?

Many of us are very fortunate to live in parts of the world that it’s impossible to go hungry and there’s a system in place to help the less fortunate.
Large parts of the world not so fortunate.

2015 could be an interesting year.

#149 alister macloud on 12.24.14 at 3:13 pm

There is no reason to hold an asset that pays no interest or dividends, is losing value, has declined 40% in three years, costs money to store and is valued by nutbars who hate banks, fear the economy and think taxation is theft. — Garth

No argument on my part.
But the generalization attempt is a cheap shot.

That asset seems to be valued by many people who are
none of the above (e.g. hate banks, fear the economy and think taxation is theft. ), for example – all women (never seen one that does not like golden or platinum ring), predominant parts of Asia and Middle east, etc.

Before declining 40 % that asset actually increased by 500. Not that it can’t decline more.

But it seems the biggest nut bars are the central bankers who still hold gold and actually are net buyers lately, unless of course they sold it out through gold leasing.
I am relly looking publicly for that anouncement that they sold the gold secretly (as no one is admitting it publicly) and then let the fireworks begin.

#150 YUUPTRUCK on 12.24.14 at 3:33 pm

Buy when sentiment is low & there is blood in the streets. But all I hear are mostly your puffed up ego’s on this blog with very little critical information to share. The baby boomers always like to pat themselves on the back. But the fun part will be me pushing you guys down the mountain without your crazy carpets. Enjoy your temporary spoils that nothing more than free credit driven markets created, not “you yourself” hero’s.

#151 Big Jack on 12.24.14 at 3:53 pm

Governments DO steal wealth. Please don’t try to argue that they don’t just because you used to work for one once upon a time. Only a real loser would make such an argument (cause they’ve got no wealth to steal).

Tell us how you feel when you need a heart valve operation. — Garth

#152 Nemesis on 12.24.14 at 4:30 pm

#NothingBeatsChristmasInMalibu!… #”MotoPanaCako!”

#153 espressobob on 12.24.14 at 4:38 pm


Sounds like you have a chip on your shoulder? Learning is your responsibility! Get over yourself.

#154 lolmarkets on 12.24.14 at 4:51 pm

Ah garth, I don’t know how all you old folks have so much optimism. I firmly fit into the loser category. Trustno1, all wealth is simply ones and zeros floating in the ether, created and destroyed from and for nothing.

Perhaps in my fifties at 2030 we will have figured out the environmental problems, inequality problems and the future will be bright. Everything I have learned in the last 30 some odd years pushes me to believe that highs always come right before the lows, humanity is too short sighted to save itself from destruction, greed is king, psychopaths are the only ones who get ahead and you will never be rich no matter how hard you work.

The harder the job you have, the less you get paid. That is the reality I have grown up in. I have watched all my relatives lose their savings in 2000 and then again in 2008 playing the market type games.

Invest in the market when it is the highest its ever been? Might as well invest in realestate at the highest its ever been! I fail to see how it is any different.
A paupers life for me. Which wouldn’t be so bad if we had some guaranteed income after 65. I never wanted to be rich in my life, am not materialistic and don’t mind working, but don’t think I deserve to be on the street after 50 years of working because I don’t want to play these financial games. There should be some government run safety net, with actual financial geniuses making these decisions, not the common man. You can’t expect every citizen to know the ins and outs of this fake and rollercoaster financial system, any more than you could expect them to know the legal system when they get into trouble with the law. These types of esoteric human created bureaucracies (global finance, the justice system) are designed to be hard to understand as a barrier for the “common folk” to entry. If you do have money, you simply hire an expert. Piecing things together from even a wonderful blog such as this, would be like representing yourself in court with internet advice. A gamble, because frankly, reading stuff on the internet does not make anyone an expert ever.

Pensions and guaranteed retirement income is not even part of the deal anymore, so you can see how younger people think things can only get worse.

What can I say? Sucks to be you. Enjoy the depression while the only life you’ll ever get, in an imperfect world, ticks away. — Garth

#155 Ronaldo on 12.24.14 at 5:08 pm

#152 YUUPTRUCK on 12.24.14 at 3:33 pm

Just because you never made it in life doesn’t mean others from your generation havn’t. At what age did your parents throw you out of the basement?

#156 Rexx Rock on 12.24.14 at 5:30 pm

Garth is right about everything except one thing.Interest rates will stay the same,mark my wordsThe fed will come up with some lame excuse,they always do.
Canadians who made great investments with buying and selling houses should get out while they still can.14 years of awesome profits ,retire in Mexico and enjoy a real free country not a police state like Canada.

#157 NME22 on 12.24.14 at 6:00 pm

+1 to #153.

Technically Government doesn’t steal wealth; they just take it and destroy it through inefficiency, incompetence and overall good intentions.

#158 HJD on 12.24.14 at 11:42 pm

Garth, You’re doing something no one else in Canada can match. Wish you a happy, healthy and productive New Year.

#159 Mrs Hubris on 12.25.14 at 3:24 am

Merry Christmas Garth. You’re the stand-alone, grown-up, Canadian antidote to vested-interest-and-nanny journalism. Newspaper editors should hang their heads in shame. Pedal to the metal in 2015…..

#160 Holy Crap Wheres The Tylenol on 12.25.14 at 2:39 pm

Just woke up to a beautiful sunrise in Nassau Bahamas. The family is all going to have brunch together on the beach today. There is nothing better than watching your grandchildren opening a few small gifts that we brought down with us. It’s worth $1 billion. This is what investing your money can get you. Not cars, non-boat, not houses, but the most important of all the time to be able to be with family and love ones.
Smoking man I thought of you last night after I walked out at the casino from dinner with my children. Have a good time in Halifax. You’ll be with your family that’s the most important thing.
P.S. Had a glass of 32 year old scotch, watched my one son play some blackjack and had fun, the wife played some slots, I still don’t get the slot thing with woman?

#161 Henry Rearden on 12.25.14 at 3:34 pm

A few comments made me laugh today:

1) Someone said if you rent you need to answer to a Landlord! More like the other way around. When I say jump, my Landlord says how high? He knows he needs to jump through hoops to keep me and the market isn’t so hot here in Halifax.

2) Love you Garth but yes, taxation is theft. If it was not, it would need no compulsion. Government ideas = so great you need to force people to do things! By the way, the health system here is not great, long, long lines just to get seen by a doctor. Meanwhile, private dental care is excellent. Strange that!

#162 My Life is a Pile of Shit on 12.26.14 at 11:03 pm

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