Defiance

BIG OIL modified

Well, no doubt oil will define this year, whether you’re caught with an unsaleable McMansion in Calgary, out of a job as an engineer, laid off in Ottawa or gassing the SUV in Mississauga. On balance, oil at fifty bucks or so will be as much of a negative for Canada as it will be a positive for the US. If these prices stick, the pain and surprise in Alberta will end up being a boon to Ontario. Who ever said life was fair?

By the way, does this have the look of a little desperation to it?

FINANCE

The feds did a weird thing on the first business day of 2015, issuing a statement with the big headline you see here: Harper Government to Balance Budget. This is suddenly a major issue in Ottawa, as oil has traveled from $106 a barrel to just $52.71 at the end of the week. Not only is this blowing an $8 billion hole in Alberta’s tax take, but the damage will ultimately be similar in Ottawa.

Consider gas. Fully 30% of the pump price is federal and provincial tax, of which a dime a litre plus GST goes to Ottawa. It’s now clear that with buck-a-litre gasoline that Canadians will spend about $12 billion less filling up in 2015 than last year. There alone is $600 million Joe Owe won’t have to play around with – and he was forecasting s surplus of less than a billion.

But this is an election year. It’s why the TFSA is going to $10,000 in the next budget, and why the Harper Government (remember when it used to be the ‘Government of Canada’?) will do whatever it must to eke out a few drips of black ink. Given the oil mess and the already-announced silliness about family income-splitting and more cash-for-kids (that starts this summer), it means Ottawa will be spending its rainy day fund.

By the way, you’ll notice the media release above says Joe will not only be slaying the deficit this year but “reducing the debt.” He isn’t. In 2004-5, it was $494 billion. This fiscal year it will be $615 billion.

So was it irresponsible pre-electioneering swag to announce a $21 billion hike in new spending and tax cuts to take effect in July, and then double the tax-free contribution in the coming budget? Only if you care about the future. But if you think people are idiots and vote in their immediate, naked self-interest, it’s great politics.

I remember running for the leadership of the federal Progressive Conservative party eons ago, and having the national debt clock shipped all the way to Ottawa so during my speech I could point at it with alarm. Nobody cared. I was squished. Apparently I never learn.

Well, the year of cheapo oil will not just make drivers smile and politicians panic, but the toll on real estate has yet to be determined. I told you days ago Calgary’s numbers have already turned negative, and 60% of the local markets in the nation are seeing lower sales or dropping prices. Now only Vancouver and the GTA remain bubblicious. So, will the ripples from elsewhere impact those markets, especially when interest rates start to edge higher in 2015?

The California-basd web thingy called Dr. Housing Bubble just offered this analysis.

Canada is housing and oil dependent. And oil just got a big kick to the shins. There was an inflexion point for US markets when household debt surpassed household income. People kept saying it was a liquidity crisis initially but it was truly a solvency crisis. People took on too much debt and were walking on a financial tightrope. In the US, this peaked above 120 percent. Canada is well on its way above 160 percent.

Basically Canadians are deeper in debt relative to their income. And a large part of this debt is housing related. A large part of the economy is also tied to oil. A large portion of Canada’s oil is also costly to extract. With oil sands for example oil would need to be at $80 a barrel to make a profit.

Fewer jobs and less money. And for a large part of the Canadian economy, much of this money has been flowing into housing. In Canada, there seems to be a cult belief that housing simply will not correct. They are full on drinking the good old tasting real estate Kool-Aid. In the US, we already lived that correction and understand that yes, housing does go through booms and busts especially when debt is used to supplement a lack of income growth.

Canada has enjoyed many years of the global commodities boom and now finds itself contending with a market full of debt and inflated housing values. Short of oil rising back up to $80 a barrel and higher Canada is likely going to face some short-term pain. The housing market is due for a correction. Those of us in California realize that booms and busts can occur all of a sudden but the events leading up to this are largely foreseeable.

Canada has their versions of $700,000 crap shacks usually in the form of condos. Hey, at least with a crap shack you don’t have to share a common wall. When you look at the Canadian housing market it makes the US look like a frugal uncle.

Remember that the US economy was brought to its knees and the middle class whacked when housing (on average) lost 32% of its value. Now the Bank of Canada is saying real estate here could be over-priced by up to 30%. And that was before the price of our single biggest export commodity fell by half.

Sp, what’ll the federal government headline will be a year from now?

203 comments ↓

#1 Perry on 01.02.15 at 7:23 pm

FIRST

#2 Ronh on 01.02.15 at 7:25 pm

Garth, best pic ever! I guess we now live in interesting times.

#3 CPG on 01.02.15 at 7:26 pm

I see Doug Noland has started up a new blog.

Credit Bubble Bulletin
— Chronicling History’s Greatest Financial Bubble

http://creditbubblebulletin.blogspot.ca

#4 Piky Papa on 01.02.15 at 7:32 pm

ouch!

http://www.cbc.ca/news/canada/edmonton/td-bank-client-devastated-by-17-000-mortgage-penalty-1.2790108

#5 eric on 01.02.15 at 7:36 pm

It tastes good being the first. Or not?

#6 Iwantobuyahouse afterthecrash on 01.02.15 at 7:43 pm

Always enjoyed your blog Garth..Keep up the good work.

#7 macduff on 01.02.15 at 7:47 pm

In BC, the real estate assessments have been released, and “most have seen increases in their house values”; this is a market set to correct, yet many are woefully unaware, complacent with their newly assessed homes. This will not end well, as has been said often on this blog.

#8 mitzerboy aka queencity kid on 01.02.15 at 7:49 pm

poor cold Saskatchewan … not again

#9 Mark on 01.02.15 at 7:50 pm

The true tragedy of the Harper Conservative government is that it came to power supported by a power base that believes in government cutbacks and austerity. And then it proceeded to, once in power, do practically anything but. Government continued to grow, at a rate faster than inflation and that of economic growth, throughout the Harper reign. Thus drifting from most principles that Conservatives tend to hold dear.

Even worse, as pointed out by Garth many times, is the interference with free markets, by way of expanding the role of CMHC in the subprime mortgage insurance market. What should now be an orderly pause in the O&G sector that only affects the relatively few in O&G, is now turning into a broad-based decline in the entire Canadian economy. The CAD$ is currently selling off, mostly on USD$ strength, but as this picks up, a deflationary quagmire, with a much higher Canadian dollar is quite likely.

Proably the most worrysome is that the capacity to create growth in other sectors has been severely truncated. Canada’s technology sector, the saviour of the economy in the 1990s oil downturn, has been decimated and is in shambles. The sleeping giant of Canada’s role in the gold sector might be our ace in the hole, but even that’s an awfully “iffy” bet at this point. And certainly, even if the sector does take off in response to global debt deflation, benefits of such will only accrue to a very small number of Canadians.

#10 mark on 01.02.15 at 7:52 pm

Good luck when you take the advice of newspaper share tips. Stick to the ETFs.

http://www.idiottax.net/2015/01/the-australians-dopey-stock-picks-for.html

#11 Mark on 01.02.15 at 7:57 pm

“ouch!
http://www.cbc.ca/news/canada/edmonton/td-bank-client-devastated-by-17-000-mortgage-penalty-1.2790108

Did these people benefit from the benefits of lower interest rates and its effect on pushing up house prices, or not?

The role of the IRD is to protect the lender against loss in purchasing power of the lender’s investment if a borrower terminates a fixed term contract early.

If the couple walked away with >$17k of un-earned “appreciation” in the house (perhaps paid to Realtors as commission), but are whining about the $17k IRD, then why should we have any sympathy for them?

I think the expectation that houses will have a higher return than the cost of financing them, is a poor one indeed, and will eventually be resolved with financing explicitly costing more than a house’s total return. In other words, leverage in the form of mortgage credit makes houses *less* affordable, not more affordable. Too bad the youngsters buying today don’t seem to understand that they’d reach their goal of mortgage-free home ownership by saving up and avoiding the mortgage in the first place! Keeps the nice dividends in my bank stock rolling in I guess though.

#12 S. Bby on 01.02.15 at 7:59 pm

Business as usual in the lower mainland.
Assessments up overall.

http://www.news1130.com/2015/01/02/metro-vancouver-home-values-continue-to-rise/

#13 Mr. White on 01.02.15 at 8:03 pm

The low oil prices are a result of the Saudi’s and some other Gulf States putting their own economic sanctions on Iran and Russia in the wake of the U.S. extending talks with Iran on November 25. On November 27, OPEC announced it would not reduce production to support prices.

If anyone imagines that the Saudi’s et al are interested in oil prices below 100 bucks I have some wells for sale here in Alberta.

There is no oil glut. The swing lift is about 1 million barrels per day. At 100 bucks or a bit more, the Saudi’s, with a bit of help from Qatar or Oman will cut back production by 2 million per day and the price will recover.

The Saudi’s don’t sell much oil to the U.S., the U.S. is not self sufficient in oil and the Bakken will be drilled out completely in 4 years. The Saudi’s could care less about resource plays. They know that at an average depletion rate of 75% per well, that fracking is a short lived phenomenon. They also know that resource plays are an invention of the finance industry and are essentially a stock moving scam.

So, as soon as the Russians and the Iranians really feel the economic pressure at home and the folks start getting restive, the price will rebound.

It will rebound probably at the end of quarter 1 and certainly before the 3rd quarter of 2015.

#14 Lillooet, BC on 01.02.15 at 8:12 pm

Yes, real estate in the large cities across Canada is overvalued, the exreme cases being Vancouver and Toronto. In small towns and rural areas of our great nation, house prices are at or below market value. In my small town, houses are undervalued by about 30% – the exact opposite of the large cities.

I believe the collapse in oil prices is due to the following: the US and NATO countries wanted to punish Russia for invading Crimea and parts of the Ukraine. So they imposed economic sanctions. Also, since the US calls the shots in Saudi Arabia and Iraq, they told their oil ministers to “open the taps” to temporarily flood the market, collapsing prices, crushing Russia’s oil export revenues.

How this might end is Russia will quietyly back out of Ukraine and NATO will tell the Saudis and Iraq to turn the taps back low and the price of oil will rise. Who knows how long it will take, weeks, months?

#15 Retired Boomer - WI on 01.02.15 at 8:13 pm

As an American, I thought when elected the Harper regime would govern as a “conservative” party.

To be fair, I thought the same for George W Bush.

Bush hardly delivered a ‘conservative’ agenda, and so it appears to dare neither has Harper.

The people would seem to demand a bit more ‘truth in advertising’ of their elected officials.

2015 in Canada, 2016 here in the US are election years.
Good grief, just look at the new congress we elected here that will be sworn in shortly! It LOOKS more conservative, and if true to form, will perform otherwise.

What we don’t need: more “help” to homeowners, past, or future. In house trouble? Sell the thing!

We don’t need lower interest costs -we need HIGHER interest costs…. MUCH HIGHER to choke credit use!

We don’t need lower taxes, or school loan rates, or more help for the geezers.

That might look like a “conservative agenda” for most…but is it?

#16 Happy Renting on 01.02.15 at 8:15 pm

I’m sure we’ll only hear after the election how “surprise” lower tax revenues from lower oil prices torpedoed the balanced budget.

#17 West Coast on 01.02.15 at 8:18 pm

http://www.fcac-acfc.gc.ca/eng/resources/publications/mortgages/Pages/Borrowin-Emprunte-1.aspx

I would love to see the stats regarding HELOC loans etc. in Canada. It seems to me that people are able to borrow a very large percentage of the ‘assessed value’ of their property.
We will all be paying big time if the property market changes abruptly. Seems to me it will be the tax payers bailing these borrowers out.
I am watching properties in the Vancouver suburbs – White Rock / South Surrey etc. I’ve seen a number of foreclosures in 2014 that haven’t been snapped up – even though they have been greatly reduced. 2015 will be interesting. Remember things fray first at the edges……

#18 FormerSaskie on 01.02.15 at 8:20 pm

I hope the headline a year from now reads ” Esso Welcomes Stephen Harper – formerly of the Harper Conservatives – Back to It’s Mail rooms”

#19 Debtfree on 01.02.15 at 8:21 pm

Jan. 02 2016

Harper government buys one hundred F35s

#20 Cash is King on 01.02.15 at 8:22 pm

What will the Federal Headlines be a year from now?

Justin will state that “We had no idea how bad the countries finances were in. OR

As a result of the poor financial management of the previous Conservative government, it is necessary to raise the HST by 1% OR

As a result of the poor fiscal condition that our once great country is now in, we will have to delay our election promises.

#21 Musty Basement Dweller on 01.02.15 at 8:29 pm

For the longest time we have followed US trends by about 10 years. Looks like for housing we will be right about on track with that.

#22 Mark on 01.02.15 at 8:30 pm

” In small towns and rural areas of our great nation, house prices are at or below market value. “

How does this make any sense? House prices are “market value”.


In my small town, houses are undervalued by about 30% – the exact opposite of the large cities.”

And how did you compute this? Why should house prices in, say, Lilloet, BC, be any greater than the cost of construction heavily depreciated for the age and condition of the structure? And further discounted for the lack of growth in the community?

Care to share any metrics on how you arrived at a 30% undervaluation?

#23 RayofLight on 01.02.15 at 8:39 pm

#14 Lillooet—
“I believe the collapse in oil prices is due to the following: the US and NATO countries wanted to punish Russia for invading Crimea and parts of the Ukraine. So they imposed economic sanctions. Also, since the US calls the shots in Saudi Arabia and Iraq, they told their oil ministers to “open the taps” to temporarily flood the market, collapsing prices, crushing Russia’s oil export revenues.”
Why didn’t the US “call the shots” in 2008 to Saudi Arabia to reduce the price of oil from $140-$150, rather than allow this “small issue” to cause the collapse of the economy and usher in the “Great Financial Crisis”?
Just Saying

#24 Saskatoon-Living on 01.02.15 at 8:42 pm

Are you calling for rates to rise this year Garth??? Lmao.

#25 SWL1976 on 01.02.15 at 8:44 pm

Having the debt clock shipped to Ottawa… No wonder you got the boot. You’re not one of them, but I do like your style.

Harper’s Canada disgusts me. I would like a competent Canadian government that is capable of doing business on a global scale. Unicorn’s I tell you

I’m not sure who I would rather see karmic realignment strike first… Stephen Harper or Gordon Campbell

Greed in politics. Yuck

#26 Glen B on 01.02.15 at 8:49 pm

Re: Smoking Man Comments from yesterday #7 & #18
SM – Just read your comments from yesterday. You are such a breath of fresh air. Thanks man!

#27 omg the original on 01.02.15 at 8:55 pm

VICTORIA – NOT WITH A BANG BUT A WIMPER

Funny thing the Victoria housing market.

On fire for much of the 1990’s and up to the late 2000s, it has basically sunk back to 2007 prices.

But here’s the thing, nothing really much has changed in Victoria to cause this.

The economy in Victoria runs off of government, tourism and people moving here from elsewhere. Sure tourism has been hurt by the great recession but has been coming back slowly but housing continues to sink.

From a fundamental perspective housing prices in Victoria should have been robust over the past 5 years given record low interest rates and record high prices in the other areas of Canada that people relocate from (mainly the prairies – which includes you Alberta).

But no, year after year prices have dropped, not a lot but 3 to 5% annually. Word is out today that the average Victoria tax assessment for 2015 will be down 4.4% versus 2014. That’s a chunk of change when you are talking an $800K Oak Bay bungalow or $950K Songees condo.

Ands its not that the market is moribund – if a house is
priced well it will sell within the week. If its priced under market there will be multiple offers.

Myself I think its just that prices have gotten to a point that are unaffordable to most people and the market is collapsing under its own weight. Add to that the fact that taxes are increasing at 2 to 3 times the inflation rates.

So people that might normally buy here are keeping their money for other things or just looking elsewhere.

Throw in a couple other wildcards like interest rates rising or the western Canadian economy falter (yes I mean you Alberta) and you have the recipe for a major disaster in the Victoria market.

BTW – do not read any of this to mean that the Victoria market has become a buyer’s market – it is still morbidly overpriced versus long-term income to price ratios. People who have bought over the past 6 to 7 years are losing 10s of thousands if they have to sell (on a $550k investment condo bought in 2010 people are routinely taking a $40,000 to $75,000 loss after rental losses, commissions and fees)

#28 Joe2.0 on 01.02.15 at 8:58 pm

How about this headline.

Immigration requirements eased to help offset the declining price of oil.

#29 Obvious Truth on 01.02.15 at 9:04 pm

Nobody in countries that doesn’t produce vast quantities of oil cares.

Get over it!

You can power a large cottage in northern Ontario entirely off grid. Imagine the possibilities in warmer more sunny climes. This dirty disgusting fuel will be obsolete. The sooner the better.

Fort Mac could be a ghost town within a generation. They as we’ll be making typewriters.

#30 Harbour on 01.02.15 at 9:05 pm

Okay Mark, make yourself useful… Of the past oil boom busts where was the bottom and how long did it stay at the bottom before booming again.

Thanks

#31 Not An Economist... on 01.02.15 at 9:06 pm

I’m curious as to how this will affect municipal budgets as property tax values lower. Looking at the City of Victoria budget forecast for 2014 to 2018, they are forecasting nearly a 5% increase in property taxes every year. I would imagine some of this is due to growth within the city, however, much of it must be based on increasing property assessment values. 56% of the City of Victoria’s 2015 annual budget is coming from property tax revenue, if we see a housing correction, which I believe needs to happen, what kind of changes can we expect on a municipal level to support any budget shortfall? I’m no economist, but would cities increase property tax rates to offset losses from assessed values, as well as trim staff?

On a side note, our suite that we rent, which is two years old, had its sewer pump crap out on us today. Just barely missed flooding the entire basement with my own excrement if I hadn’t had checked the sump pump for whatever weird reason. One call later to the landlord and they dealt with it. Out of my hands completely, and it costs me nothing. Just goes to show that even newer homes have unexpected repair bills. Glad I rent and save almost two thirds of my monthly income…

#32 Freedom First on 01.02.15 at 9:06 pm

Yes, $$$$$hit happens, and the majority never see it coming in every country. Most unfortunate that the whistle blowers world wide who warn people of the dangers of a leveraged to the neck while bent over 1 asset strategy, are mocked and ridiculed by the financially insane who will be the very ones to suffer the consequences of their leveraged wants. The people/corporations who feast on the profits from knowingly bleeding the foolish consumer horny of every last possible $$$$$ will walk away without a care in the world, unless they too had believed their hype.

I am glad Garth (with the help of his allies like Ross Kay) is now the msm of truth in Canada. Pity that Garth has to turn to the American sites like Dr. Housing Bubble, The IMF, and international credit agencies for more of the truth. But can we believe Garth and others after what the Harper Government just released today about the balanced budget and economy information? I know I agree with Garth. TSIHTF and right now.

#33 BizzarroCanada on 01.02.15 at 9:10 pm

> Musty Basement Dweller

OMG I’m not the only one who noticed! Now if the past holds true which it rarely does, we will elect our own Bizarro Obama (Trudeau, I would guess).

It’s eerie, I’ve been following US politics since about 2000, and came across the realization that we’ve sort of been mirroring America but with a time delay.

#34 Smoking Man on 01.02.15 at 9:26 pm

#26 Glen B on 01.02.15 at 8:49 pm
Re: Smoking Man Comments from yesterday #7 & #18
SM – Just read your comments from yesterday. You are such a breath of fresh air. Thanks man!
………

Fan base is growing, wohoo 31 now.

Back to real estate. I can’t comment on cow town. Don’t know the herd.

I can comment on long branch, famous burger joint called Woody’s Brownsline and Lackshore.

Full of Hipsters, they’re moving in. A Starbucks opened. More commercial development.. This hood will stay hot.

As for USA

I did Atlantic City for New Year 4 years ago, and a few days ago.

What a difference.. Every hotel booked solid, last minute Smucker’s paying 700 a night. Granted less completion now but still. 10 times more people this year than four years ago.

Big bets on Craps, Mississippi stud. And Rollet.

USA picking up strong.. Garth is correct.

#35 Defiance | Realties.ca on 01.02.15 at 9:28 pm

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#36 Republic_of_Western_Canada on 01.02.15 at 9:28 pm

Garth.

That is an itty-bitty eastern rock mining truck. Nothing to do with oilsands. Ya should’a photoshopped a decent-sized 797B instead.

Anyway, the mentioned spendthrift promises of family crap are just an attempt to warm up to the Lie-beral tax-and-spenders. Those Fiberal gun-grabbers will again attempt to sell the country out at a rate that will make QEIII look like Basel III.

At least the Saudis preempted NEP II for us.

#37 Ret on 01.02.15 at 9:31 pm

So much for Democracy. Harper in Ottawa, Wynne in Ontario, and complete clowns running the thriving not municipality of Hamilton.

It is a Curly, Larry and Moe trifecta. This is what Canadians wanted and voted for. Politicians don’t destroy a country, voters do.

I wonder why so many people do not bother to vote? “None of the above.” should be a choice on every election ballot.

#38 Washed Up Lawyer on 01.02.15 at 9:33 pm

The Harper Government headline one year from now:

Stephen Harper Appoints Former MP and Conservative Cabinet Minister, Garth Turner, To Head Royal Commission Into Collapse of CMHC

“Today in Ottawa, the Prime Minister named Garth Turner as the Head Commissioner to lead the inquiry into the causes of the $300 billion smoking crater which exists where the CMHC once stood. Mr. Turner has announced his panel will be rounded out by two previously unknowns, Smoking Man and a retired boomer from south of the 49th. The latter will bring to bear his experience in Milwaukee real estate following the 2007-2008 collapse in America. The preliminary witness list discloses an Italian who loves real estate will be the first witness.

Opposition MPs decried the whole endeavor as pathetic.”

#39 Ben on 01.02.15 at 9:36 pm

#24

Rate rises are decided by the US. TD wanted to know if I wanted to open a USD account. You know what – I do.

#40 Don't Panic on 01.02.15 at 9:37 pm

What goes up Goes down – and VICE-VERSA

JAN 2011:
In one section of Phoenix (Zip code 85009), the median home price declined from $160,000 in 2007 to $30,000 today. That’s 81%.

Just checked today – Median Price is $110,000

Don’t Worry, Be Happy.

#41 Cow Man on 01.02.15 at 9:45 pm

Sir Garth:

Federal Government headline one year from now:

“Trudeau Government Legalizes Marijuana to reduce deficit.”

#42 Mark on 01.02.15 at 9:47 pm

“Okay Mark, make yourself useful… Of the past oil boom busts where was the bottom and how long did it stay at the bottom before booming again.”

1993-ish (after the end of the Gulf war) through 2000 was awfully painful. I wouldn’t take it for granted that demand is magically going to return to the market in excess of supply. There is still an enormous amount of cost rationalization that can take place in both the oil sands and the shale patch, and debt ensures that production from existing facilities will remain at full blast.

Throw in the likelihood of full-on debt deflation and economic contraction in both the USA and China, and where’s future demand growth supposed to come from anyways?

I personally believe the most apt comparison to what’s unfolding is the 1930s. With industrial demand having collapsed. Government bond prices through the roof. Etc. Figure out the sort of investments that worked well in that era and invest accordingly as the parallels are striking.

#43 Sheane Wallace on 01.02.15 at 9:49 pm

Garth does not like el duche?

Wow!

#44 Blobby on 01.02.15 at 9:49 pm

And it makes me wonder, if another party replaces the tories this year… Whether they’ll get the blame for this as it all blows up come 2016…

#45 Ronaldo on 01.02.15 at 9:51 pm

#27 OMG the Original –

”If its priced under market there will be multiple offers.”

The selling price will be the market price and that won’t be known until it is sold. I find this statement very odd. I can see saying something like, if it’s priced below appraisal that would make more sense. Same thing if you say something is sold above market price. You can put any price you want on something but its the sale or purchase price that determines the market. What an identical item sold for a certain price one day may not sell for the same price a day or a week later. Those of us who were around and remember the 1973 to 74 period when average homes were rising at the rate of $1000 per month in some areas of the lower mainland will understand what I’m getting at. Mark made a similar comment in a previous post and I totally agree with him.

#46 Bucky on 01.02.15 at 9:55 pm

#27 omg the original

Having lived in Victoria for a few years I agree. I think this is the so-called a soft landing, no big crash but stagnation and small average price drops compounded with erosion in value in real dollar terms.

I actually think this is the best case scenario, as you point out the local economy is way out of whack with the housing market. There are some dads around the ice rink who do the rotation to Ft. Mac and have cash, but most folks working locally are pretty tapped out.

#47 Westcdn on 01.02.15 at 10:00 pm

I didn’t write this article but could have…
http://www.msn.com/en-ca/money/topstories/ontario-is-number-one-god-help-us/ar-BBhsiiU

The following is a copy and paste from another blog host that resonates with me as I do push against the status quo to achieve change/reform. I admit I favour bloggers who break from the herd and have sane opinions:

“Hate is cancerous and spreads like wildfire. Be careful about planting seeds of dissent, hatred, and disbelief in others, for you might regret it later on. It’s fun to talk about conspiracy theories and faux lunar landings; but there are some of you out there who become obsessed with such things and it stifles productivity. I am talking about Federal Reserve, gold bug, Illuminati, New World Order, Bilderberg Group, World Bank, Zionist conspiracy theorist lunatics.
When you dive into that wormhole of dissent, disbelief, you will see everything through a different prism. Some of you believe these “truths” need to be exposed. I contest that if exposing said truths doesn’t have a material positive affect on your lives, you’re better off doing something else.
Believe in people. Believe that there is good to offset the treachery around you. There is a whole world of innovation, competence, creativity and compassion out there. Choose to focus on that, instead of the stuff that will drive you to store gold bars and f-ing dried food in your nuclear bomb shelter. Don’t waste time.”

I add, you never get wasted time back, unless you are special and wonderbar. (blah, what a fantasy to spin onto others)

#48 greyhound on 01.02.15 at 10:01 pm

Garth has an unlikely ally today at Zero Hedge — http://www.zerohedge.com/news/2015-01-02/guest-post-oil-looming-canadian-housing-bubble-crash

#49 Ford Prefect on 01.02.15 at 10:05 pm

Odd that no one has pointed out that this blatant Harper Government™ advertisement is put out under the aegis of “The Department of Finance” meaning that all of you blog dogs are paying for it.

#50 JP on 01.02.15 at 10:19 pm

Just rebalanced my portfolio today, thanks to this blog I’ve been following religiously for the past 3 years. And also received “Sheeple” in the mail today. Looking forward to 2015!

#51 prairie person on 01.02.15 at 10:25 pm

Not sure what to make of this but after three years of my house assessment falling, it went up this year. In the past, the fall of the Canadian dollar brought Americans to the islands. Cheap cottages in safe desirable places. Well, not cheap but they can be bought for less with the exchange rate the way it is. No evidence to support the rise in assessed rates. Would be interesting to know what the rising rate rise is based on. Anybody know?

#52 El Barto on 01.02.15 at 10:30 pm

Great article to start the new year! I am constantly amazed when (in otherwise rational and professional) financial forums people say, “I feel this particular stock market is at its peak,” or “I have a feeling that bonds will crash and burn”. “Feel”? They have a feeling and go with it? Others will often support their decision saying gut feelings are often correct. Hell, in my mind this is math–feelings don’t give you a correct answer, calculations do. There shouldn’t be any emotion involved at all when calculating numbers and percentages.

That’s why a balanced diversified portfolio wins EVERY time. For most people to get that amount of diversification at a low cost, it means ETFs in US, EAFE, Canada, and fixed income real return bonds, preferreds, and REIT ETFs.

You can’t beat math and logic, you can argue against it, but you can’t beat it.

Who would you trust with your math? A gypsy fortune teller or Mr. Spock? I’ll go with the Vulcan every single time.

“My guess doctor, would be meaningless. I suggest we refrain from guessing and find some facts. Spock out.”

#53 KWkid on 01.02.15 at 10:31 pm

“And that was before the price of our single biggest export commodity fell by half.”

Smug self-satisfaction that we are smarter than Americans. Oh wait OIL sorry I always get those two reversed.

#54 45north on 01.02.15 at 10:39 pm

They are drinking the Kool-Aid. In the US, we already lived that correction and understand that yes, housing does go through booms and busts especially when debt is used to supplement a lack of income growth.

well we’ve had every chance to learn from the US. Every chance. I was in Wolfville Nova Scotia. I talked to a man who said he watched oil-change places opening up in California. He came back here and started Mr Lube.

Mark : Proably the most worrysome is that the capacity to create growth in other sectors has been severely truncated.

the biggest example is Nortel. Corporate suicide. Nothing to do with Stephen Harper. What about all the people who protest and impede the building of pipe lines? It’s sort of like government, whenever the possibility of growth appears there are people who want to stop it.

Mr White : The Saudi’s don’t sell much oil to the U.S., the U.S. is not self sufficient in oil and the Bakken will be drilled out completely in 4 years. The Saudi’s could care less about resource plays. They know that at an average depletion rate of 75% per well, that fracking is a short lived phenomenon. They also know that resource plays are an invention of the finance industry and are essentially a stock moving scam.

that got my attention

Lillooet : Yes, real estate in the large cities across Canada is overvalued, the extreme cases being Vancouver and Toronto. In small towns and rural areas of our great nation, house prices are at or below market value. In my small town, houses are undervalued by about 30%

I think we all have the idea that small towns and rural areas are virtuous whereas large cities aren’t. Sort of like the Waltons.

http://en.wikipedia.org/wiki/The_Waltons

virtue is the expression of interior worth, it’s not geography

#55 Joe2.0 on 01.02.15 at 10:43 pm

Just read a Peter Schiff article in which he forecasts QE4 later on in 2015.

#56 will on 01.02.15 at 10:51 pm

Hey Lillooet BC #14:

I agree with all of your ideas except the part about Russia backing out of Ukraine. Russia can’t BACK OUT of Ukraine because Russia is not IN Ukraine. The frauds in Ottawa would like you to believe Russia is in Ukraine and they obviously have the full backing of the MSM. Russia is not in Ukraine. Please stop reading so much MSM. Other than that, have a great day!

love,
Will

#57 will on 01.02.15 at 11:07 pm

Garth, if we get the $10,000 TFSA I’ll take it and max it. But if the frauds in Ottawa think this is a way to get votes they can forget about mine. I will be voting for a conservative party. So obviously that excludes the current frauds who claim to be conservative.

#58 Pete on 01.02.15 at 11:09 pm

Headline next year will probable be : ‘Canada house price up 7% in 2105’

It’s ridiculous but it would not surprise me

#59 devore on 01.02.15 at 11:13 pm

#4 Piky Papa

ouch!

http://www.cbc.ca/news/canada/edmonton/td-bank-client-devastated-by-17-000-mortgage-penalty-1.2790108

That’s what happens when you’re only concerned with the monthly payment. Cheap mortgage = restrictive conditions and high penalties.

There is an endless stream of whiner stories in the media when people discover they did not get a Cadillac for the price of a Fiesta after all.

Big Business(tm)(r) is SOOOOOO greedy! Wahahh!

#60 -=jwk=- on 01.02.15 at 11:21 pm

@ #11 Mark. I laugh when people twist themselves into pretzels trying to justify the IRD.

Let me finish this thought for you:

The role of the IRD is to protect the lender against loss in purchasing power of the lender’s investment if a borrower terminates a fixed term contract early. ,/i> because the bank was too stupid to price that risk into the rate they charge, and also banks should not have to bear ANY risk AT ALL, EVER. Banks should be 100% guaranteed all their profits, no matter what. They are special that way.

Fact 1: There is nothing like IRD in any other country, anywhere in the world. Nothing. Somehow banks elsewhere manage to account for this risk without it.

Fact 2: the IRD calculation is never revealed to mortagees. It is considered a trade secret and you will never know how that 17k was calculated. They will not tell you, ever

#61 Ben on 01.02.15 at 11:25 pm

It’s a soft landing *until* rates raise. This is being priced into USD.

Rate raises flush the bowl. Until then yes most can hang on at near ZIRP rates. But not after.

#62 kommykim on 01.02.15 at 11:30 pm

RE:Consider gas. Fully 30% of the pump price is federal and provincial tax, of which 12% goes to Ottawa. It’s now clear that with buck-a-litre gasoline that Canadians will spend about $12 billion less filling up in 2015 than last year. There alone is $1.4 billion Joe Owe won’t have to play around with – and he was forecasting s surplus of less than a billion.

Ummm… Isn’t the Federal Excise tax calculated at $0.10 per LITER??? So the price of gas will not effect the federal government revenues as much as you’d think. Only the GST of 5% will be effected, yielding a drop of $600 million in federal government revenue due to a drop of $12 billion in gasoline sales. The Feds may even collect MORE of the excise tax due to people driving more and stupidly going out and buying F350s with duallys.

#63 Smoking Man on 01.02.15 at 11:30 pm

From yesterday.

#30 BG on 01.01.15 at 10:25 pm
# 21 Smoking Man

Nobody cares about your off topic posts, the sordid details of your life or your flawed philosophy.

You are a nuisance on this blog.
……..

Dude, obviously you don’t see the brilliant significantness of my contributions.

God would be nothing without the devil.

Batman with no Joker, an idiot in a black suit.

Super Man void of Lex Luther, just a clown with red briefs.

Show some damn respect… Mark can word Smith you to sleep. Read his shit, skip my posts. If you can..

#64 stop lying on 01.02.15 at 11:34 pm

Hard to criticize Harper economically when Ontario is so much worse. Although it doesn’t stop your average Star or Globe commenter.

#65 Nomad on 01.02.15 at 11:37 pm

If real-estate does get hit hard here, we’re going to look like the greatest fools on the planet, for years. Imagine, after all the attention we got and the warnings we were given.

For canadian financial stocks, I’m not going to pretend it wouldn’t be painful if home prices fall or defaults happen. Look at what happenned over the last 3 months for $TD, $NA and company. Just the possibility that they could get hit by low oil caused a rush for the exits.

That’s why I buy US financials from now on. Investors wouldn’t sell US bank stocks if Canadian real-estate takes a plunge, but investors in CAD financials would likely sell.

Can’t wait for closure on this whole story.

#66 SWL1976 on 01.02.15 at 11:38 pm

#46 Westcdn

Believe in people. Believe that there is good to offset the treachery around you. There is a whole world of innovation, competence, creativity and compassion out there.

————————————————-

Good post, and good points. I agree. I would estimate 95% of the people in the world are good people who just want to live in peace and be happy. But, people without a doubt are a product of their environment.

I believe that the truth does need to be told but not focused on. The ones who can have a rational conversation about these problems are far more productive than the ones on the opposite end of the spectrum. With so many good, honest, caring, compassionate, smart, competent, and innovative people on the planet… Why must we be coerced and conspired upon by so few?

The people are not the problem. The problem is the system that is controlled by a few and enforced by many. Talking about it is a great start. The ones who can really make a difference are not our ‘leaders’ but everyday people, people like you and me, readers of this blog, law enforcement, CRA employees, mayors, town councils, judges, public sector workers, trade unions, teachers, bankers, stock brokers, day care workers, real estate agents, waiters, waitresses, Zamboni drivers, everyday people making a difference and doing what’s right and not what they are told by the 1% or trying so hard to be the 1% that they sell and lose their soul.

There’s always hope and there’s always reality

I don’t believe our leaders are bad people, but they have lost their way and are out of touch with the people they are elected to serve.

The universe always has an interesting way of sorting things out…

#67 Mark on 01.02.15 at 11:40 pm

“Fact 1: There is nothing like IRD in any other country, anywhere in the world. Nothing. Somehow banks elsewhere manage to account for this risk without it.”

Specifying the quantum of liquidated damages for early termination of loans is a common feature of loans around the world.

So not sure what you’re talking about there. If one breaks a contract, expect to pay for it. Some contracts are designed to be broken early — they’re typically floating rate loans where all of the interest rate risk is downloaded onto the borrower.

Essentially borrowers who poo-poo IRD’s want a sort of “heads, I win, tails you lose” proposition with the lender. Except that the lender is the one who really is playing the cards as the owner of the money. Isn’t there a famous biblical verse that says, inter alia, “the borrower is servant to the lender”?

#68 stop lying on 01.02.15 at 11:44 pm

btw, once again the BoC comment on 30% is mentioned without context. He said 10-30%. After those comments he also said:
“We don’t think we suddenly became over-valued in a bubbly-type way. We don’t think of this as a bubble in any way.”
In other words, unless rates go crazy (not likely) and unemployment goes crazy (more likely, but still not if Ontario reaps the rewards of low dollar and low oil).

#69 Mark on 01.02.15 at 11:49 pm

“For canadian financial stocks, I’m not going to pretend it wouldn’t be painful if home prices fall or defaults happen. Look at what happenned over the last 3 months for $TD, $NA and company. Just the possibility that they could get hit by low oil caused a rush for the exits.”

Care to elaborate on what you’re talking about? TD’s stock price today is $55.22, which is within spitting distance of an all-time high of $58.20. Most larger-cap TSX components only can dream of having performance as good as TD over the past decade, and even over the past few months. Doesn’t look like a rush out of TD stock at all to me, but rather, quite the opposite.

#70 Mark on 01.02.15 at 11:53 pm

“Ummm… Isn’t the Federal Excise tax calculated at $0.10 per LITER??? So the price of gas will not effect the federal government revenues as much as you’d think. “

You’re forgetting the billions in personal income tax collected on the hoardes of O&G and supporting employees who are about to see their jobs lost or their overtime eliminated. Most often at the highest tax brackets, and then GST in addition to such. Corporate income tax collections are likely to fall as well.

Its not ‘just’ direct taxes on consumer energy products to be worried about by any means.

#71 AuAg on 01.02.15 at 11:56 pm

#14 lillooet
Please people do some research Russia did not invade Crimea.
The people voted 96% in favor to reunite
Russia also is not in Ukraine its a Langley coup , and they also did not have anything to do with MH 17. What Putin has done is reject the Dollar for Oil ( Think Sadam and Muammar ).
USSA debt increased 100 billion on the last day of 2014 to 18.14 trillion
92 million have no job
50 million on food stamps, EBT card
Over 50% receieve a cheque from Uncle Scam.
So who is hurting ? Sell USSA .

#72 Mukadi on 01.03.15 at 12:06 am

Canada is exceptional and is immune to the following crap:

“Houston energy company slashes 2015 budget in half”

and

“Houston-based Civeo (NYSE: CVEO), a workforce lodging company for the oil and gas industry, expects to decrease its 2015 budget from $260 million to $280 million this year down to $75 million to $85 million as it anticipates dropping demand.”

http://www.bizjournals.com/houston/morning_call/2015/01/houston-energy-company-slashes-2015-budget-in-half.html

#73 Bby604 on 01.03.15 at 12:07 am

……Dr housing bubble? From a guy who trash talks every media outlet other than globe and mail. pretty ironic

#74 Derek R on 01.03.15 at 12:14 am

#54 Joe2.0 on 01.02.15 at 10:43 pm wrote:
Just read a Peter Schiff article in which he forecasts QE4 later on in 2015

Nine times out of ten Peter Schiff can safely be ignored but this is that one time where I think he might be right.

There’s a lot of conspiracy talk at the moment about why the price oil is low. “It’s the Saudis putting the boot into the Iranians”, says one group. “It’s the Americans telling the Saudis to shaft the Russians”, says another. Well maybe. But I’m a great believer in Hanlon’s Razor, “Never attribute to malice what can be explained by stupidity”, or in other words, “Assume a cockup before a conspiracy”.

And in this case there is an explanation for the low price of oil based on stupidity. Or to be more exact, based on the unintended consequences of the end of QE3. Take a look at the graph in this article and read the article. It makes a good case. And if it’s correct, the price of oil won’t be going back up any time soon.

So QE4 might well be on the cards, if the oil lobby and their financial backers are convinced by this explanation.

#75 garthturnerbull on 01.03.15 at 12:25 am

Last year I liquidated my real estate, came out with a cool 250k after being invested for 6 years. I now rent a bedroom for 350 a month waiting for the day rates shoot up and banks beg for me to purchase again. Until then I’ll sit on the sidelines and watch these fools extend themselves to the gills with HELOCS and mortgages and scoop those babies up for a fraction. I’m not old enough to have been around in the early 90s but I have read lots of books and have done my due diligence. Thank you Mr turner for being a black sheep and guiding those willing to listen!!!!

#76 jimmy on 01.03.15 at 12:32 am

Smoking Man,
Since you recommended True Detective many months ago, I recommend to you The Bridge (Scandinavian version) and also an Australian series called Rake.

#77 John in Mtl on 01.03.15 at 12:50 am

#59 -=jwk=- on 01.02.15 at 11:21 pm
Fact 2: the IRD calculation is never revealed to mortagees. It is considered a trade secret and you will never know how that 17k was calculated. They will not tell you, ever

Sorry Dude, that’s not right, at least not in all mortgage contracts. I had a mortgage with Scotiabank a few years back and the IRD calculation was plain written right in the contract and you could calculate it yourself. I wanted to leave condo hell so I sharpened my pencil… bank too greedy, 12K penalty; I toughed it out for the following 4 years.

There’s no excuse really, for not reading a contract and asking for explanations on clauses not understood.

#78 kommykim on 01.03.15 at 12:50 am

RE: #51 El Barto on 01.02.15 at 10:30 pm
Great article to start the new year! I am constantly amazed when…..(SNIP!)

Very interesting….. Edward….

#79 OMG on 01.03.15 at 1:16 am

DELETED

#80 Shane on 01.03.15 at 1:19 am

Is the correction done since the Canadian dollar has fallen 15% so far?

My friend says that it’s done because everything is measured in US dollars because we are in a globalized world now.

But I’m confused why no inflation as we import everything. Is the Bank guys lying to us?

Shane

#81 Across the Pond on 01.03.15 at 1:28 am

“So, what’ll the federal government headline will be a year from now?”

——————————————————–

I am going to bet it reads “Trudeau Marijuana Tax Projections Doubled by Economic Analysts”

#82 DV01 on 01.03.15 at 1:35 am

#34 Smoking Man

“USA picking up strong.. Garth is correct.”

A) Solve: v_esc=sqrt(2*G*M/R)

2) Define: Risk & explain how it’s currently priced into assets around the world.

D) Discuss: “InterDependance” within a world of weakening (vulnerable) growth…with rising geopolitical tensions…whilst buried under mountains of debt…with scarce (finite) real “things” to back it up. (Ignore NPL’s, Yen carries & off-balance sheet debt)

Bonus Question 1: True or False: War is the logical conclusion to financial entropy.

Bonus-er Question 2: Who said it: “If you repeat things enough, everyone will believe them. It is the qualitative shift in the market participants’ belief systems that literally flips a switch overnight. If you suppress volatility long enough, then when the ‘event’ happens it is greater than the sum total of all the suppressed volatility over time. These shifts happen so fast that you will never get hedged or out of the way in time.”

‘N’GDP …or bust. It’s all the US has….maaaaaybe.

“Risk happens fast” ~ said everyone joined at the hip.

#TimeStamp

#83 Smartalox on 01.03.15 at 1:36 am

I understand that the last Federal Conservative government to leave Canada’s books in better shape than when they found them was Sir Charles Tupper, (though to be fair he only led for 3 months) in 1896.

For more than a century, Conservative governments have mainly been pre-occupied with transferring the wealth of the nation into private hands. It’s how Conservative governments keep getting elected.

Liberal governments get elected when their leaders point out the graft and wanton corruption. When the public senses that “enough is enough” the tide turns.

It’s the circle of political life.

#84 Setting the Record Straight on 01.03.15 at 1:38 am

Yesterday Mark wrote
“Logically a firm will not pay a dividend if they can identify, internally, opportunities for re-investment with returns that exceed the cost of equity capital”

I would think that logically the management of a public corporation would invest from internally generated funds if doing so would enhance their (personal) returns more than paying out dividends even though the returns to the firm were less than the cost of capital. While their are limits to this, management can do well relative to the shareholders they supposedly represent.

This is a logical reason to prefer higher dividends, other things equal.

#85 Peter The Great on 01.03.15 at 1:47 am

14 Lillooet & 23 Rayoflight

Interesting. However, perhaps the US did call the shots in 2008. The Russia Georgia war in August 2008 took place when oil was pushing 150 dollars a barrel. Well 4 months later oil was selling for 34 dollars. Coincidence or another lesson in geopolitics.

#86 David on 01.03.15 at 2:36 am

Falling oil prices are hardly an economic stimulus any more than zero interest rate policies or the central banks pressing the currency print button. A Loonie in petrocurrency free fall might not be a big blessing either.

http://wolfstreet.com/2015/01/02/oil-price-plunge-triggers-layoffs-in-the-us-businesses-shutter/

http://www.alhambrapartners.com/2014/12/12/the-nature-of-oil-stimulus-is-strictly-imagined-math/

#87 nonplused has lost it (again) on 01.03.15 at 2:41 am

I just can’t take it anymore, stock prices, war, oil is up, oil is down, gold is in the ditch, drought in California, central banks, default risk, housing, what is this world coming to??? And how do you get through???

So I’ve decided to open a brothel. Good steady income in the world’s oldest profession. As such I’m looking for a really good lawyer, an accountant, a piano player, a couple bartenders and cooks (we’ll have good food) and of course lots sex workers (both sexes, money doesn’t discriminate!) Base salary plus commission! If you are a former realtor or CRA agent this may be the job for you! Also accepting applications from laid off oil workers if you look good in a corset.

Desperate times, desperate measures. I think I’ll start it out as a home based business.

#88 Rabbit One on 01.03.15 at 2:45 am

#4, #11, #59
re: Mortgage IRD charge

IRD is like price discounting when you try to sell bonds prior to maturity. (but you never get premium pricing in this case)
No IRD if you are in variable rate mortgage for the same reason.

In terms of IRD calculation, there is a formula and you can ask your bank for.
That is never a secret.

Also, if you are in conventional mortgage (not HELOC), it is assumable – transfer to other, but paying IRD, you are likely in mortgage term which is higher than current mortgage rates.

In this paricular case featured in cbc articles, I am not sure how banks can grant exception unless something wrong with the mortgage agreement they signed.

This mortgagee is doing wonderful thing in Haiti, but that is 100% their personal circumstances, not the contract breach from bank side.
You can’t abuse ‘Go Public’ just because you don’t want to pay some fees.

#89 Something you don't see every day on 01.03.15 at 2:51 am

I was awoken by the dog (again) from my peaceful slumber when low and behold a young lady was at the door with a septic pumping truck. I had called them of course, time for a clean, but no idea a 20-something lady would show up to do the job. She got it done just fine. But I don’t think you’d ever catch many women doing that kind of job. Good for her though, I am sure it pays pretty well and she knew what she was doing. And I am really in favor of girls chipping in, and men dumping women who want a free ride. Maybe she’ll own the business one day. Seems recession proof. I’ve tried corking my dungbe but it doesn’t work.

It was another example of a woman proving that if men don’t want to work, women don’t need them. And vice-versa.

#90 R on 01.03.15 at 3:02 am

I’m two payments away from paying off a loan and just transferred a grand into my tfsa to start off the year. What mortgage? I rent a sub $1k apt and my line of work in Ontario stands to benefit from cheaper oil and increased disposable income from happy people paying less for gas.

Life in the have not Province!

#91 Babblemaster on 01.03.15 at 3:05 am

Rates are NOT rising. It they did, I’d be very happy, but they’re NOT. Canada simply cannot afford higher rates. Garth stop telling us that rates will rise. The Feds would rather let the Cdn dollar sink into oblivion rather than raise rates. And the bond market obviously doesn’t care either.

#92 Something you don't see every day on 01.03.15 at 3:10 am

Well and here is another pumping truck story that also happened. I was renting a place, and the septic system needed a pump an low and behold Santa blessed us with a burnt out pump on December 27, water backing up in the basement and alarm not functional. Luckily it was bath water.

So I call my landlord but he’s in Mexico and says “can you get a truck to pump it out, I’ll get the pump fixed and I’ll pay for everything”.

So I call around and some of these guys want $2500 to come but I was thinking “that seems a little high” (turned out highway robber but I didn’t know). I eventually went with an oil services company that had emergency services, but the only reason it was so high total cost was that we had trouble getting the truck in through the snow. Still a LOT less than $2500.

Anyways, none of that was funny. His story was. He’d just recently done a house across the way and when they opened the lid there were all these condoms floating at the top. The owner was an oil guy who worked in the middle east a lot. He looks at them and turns to the pumper guy and says “well I sure hope that’s my daughter!”

So the long and short of it is if you are on septic don’t flush condoms or tampons down the toilet. Dad (or hubby) will find out.

#93 RealistvsExtremist on 01.03.15 at 5:34 am

#46 Westcdn on 01.02.15 at 10:00 pm
I didn’t write this article but could have…
http://www.msn.com/en-ca/money/topstories/ontario-is-number-one-god-help-us/ar-BBhsiiU

The following is a copy and paste from another blog host that resonates with me as I do push against the status quo to achieve change/reform. I admit I favour bloggers who break from the herd and have sane opinions:

“Hate is cancerous and spreads like wildfire. Be careful about planting seeds of dissent, hatred, and disbelief in others, for you might regret it later on. It’s fun to talk about conspiracy theories and faux lunar landings; but there are some of you out there who become obsessed with such things and it stifles productivity. I am talking about Federal Reserve, gold bug, Illuminati, New World Order, Bilderberg Group, World Bank, Zionist conspiracy theorist lunatics.
When you dive into that wormhole of dissent, disbelief, you will see everything through a different prism. Some of you believe these “truths” need to be exposed. I contes
++++++++++++++++++++++++++++++++++

So if all of this is “BS” why don’t you tell us how we got here Professor? I have been waiting for someone who is so totally “Anti-Conspiricy” forever. They never do….

Folks……when are people REALLY going to wake up and understand that Govt, it public sector employees and the crony capitalist banks and corporations that inevitably BUY the govt are the ONLY REASON economies have failed since the day MAN picked his knuckles off the ground. Every single time. Govt Govt Govt.

Until we drastically reduce the size of govt and use technology to make decisions democratically from our smart phones as a whole country and not an elected party dictator like the system we have now…….nothing will change. Ever. We have the technology. We need to start using it. Or as they say……you aint seen nuthin yet.

Wake the Eff Up……..

#94 RealistvsExtremist on 01.03.15 at 5:40 am

#40 Cow Man on 01.02.15 at 9:45 pm
Sir Garth:

Federal Government headline one year from now:

“Trudeau Government Legalizes Marijuana to reduce deficit.”
++++++++++++++++++++++++++++++

Unlike Dictator Harper who would like all our police to be multi-cam solider looking M-16 carrying thugs chasing down kids with joints and a few bags of weed. Oh man the crime. Oh man the horror. A few bags of weed. Lets spend 10 billion on soldier looking police with automatic weapons to hunt down these wasted mellow criminals……

Yes….that would be much better than legalizing it.

#95 Waterloo Resident on 01.03.15 at 5:58 am

Remember how a few weeks ago I said that if gas was less than 99 cents a liter then I would be dancing in the streets?

Oh yeah, I’m a happy guy now !
Just filled up on gas at $0.91 and I have a huge smile on my face. LIFE IS GOOD.

Happy New Year everyone !

#96 Free and easy on 01.03.15 at 6:16 am

Canadians disposable income is going up with lower transpo costs. That means real estate will go up because monthly mortgage pmts are suddenly ‘more affordable’.

However…in lockstep the local govs have raised taxes at the same time.

Can’t have citizens walking around with money in their pockets can we?

I ‘m considering moving to Taiwan…..safe, respectful people, fantastic subway system, free healthcare..inc dental. and pharma….for $30 bucks a month. 5% income tax if you stay more than 6 months !!!

Very low cost of living…great food….extremely pretty girls…it never snows. And you’ll never have to listen to blubbering Canadian politicians ever again. Win win.

People ask me in Asia about life in Canada. I say “stay away”. Canada is an awful place to live….there is no life…because people are moaning and groaning about being broke. They envy each other and covet ones things. All you hear about is corruption and petty scandals.

Life is so good here in Thailand. I tell people they should get their heads examined for thinking about going to Canada to be a debt slave.

#97 Free and easy on 01.03.15 at 6:21 am

PS #64 Nomad. Look up the percentage of profit growth TD , RY and BNS get from foreign businesses…especially in the US. It’s highly unlikely any CDN bank will fail because of their PLC’s. Don’t forget that TD etc owns no high ratio mortgages….they farm those all off to the CMHC….100%….it’s your problem not theirs.

#98 Honey Dripper on 01.03.15 at 6:40 am

US GDP growth predicted at 2.5% this year. After all that QE this is it? Not good, protect yourself!

#99 liquidincalgary on 01.03.15 at 6:55 am

just heard from my landlord, “the house is going up for sale. will give you official notice after i accept an offer, that is, if i even get one.”

my landlord is also a realtor. i think reality has finally sunk in here, for some anyway.

#100 maxx on 01.03.15 at 10:05 am

#17 West Coast on 01.02.15 at 8:18 pm

http://www.fcac-acfc.gc.ca/eng/resources/publications/mortgages/Pages/Borrowin-Emprunte-1.aspx

“….2015 will be interesting. Remember things fray first at the edges……”

yes…it’s already started, followed by fiscal deck chairs getting moved around furiously at all levels of government- Summer and Fall 2015….then watch aggregate tax loads.

#101 Armando on 01.03.15 at 10:38 am

This coming downturn in Canada could be a doozy! Even worse than Garth foresees (and that’s pretty bad). And as for the US: If the majority of the world goes into recession, don’t think the US of A will just keep humming along. The Central Banks around the world (led by the US FED) engineered the post-2008 recovery bubble, and there will be heck to pay sooner rather than later!

#102 Daisy Mae on 01.03.15 at 11:12 am

#33 BizzarroCanada: “Musty Basement Dweller

OMG I’m not the only one who noticed! Now if the past holds true which it rarely does, we will elect our own Bizarro Obama (Trudeau, I would guess).

It’s eerie, I’ve been following US politics since about 2000, and came across the realization that we’ve sort of been mirroring America but with a time delay.”

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

Yes, Canada “mirrors America but with a time delay”. Our feds can’t think for themselves, you see. And now we have a choice this year — Harper or Trudeau. Liberals can’t get anything right, either….

#103 Daisy Mae on 01.03.15 at 11:23 am

#37 Ret: “I wonder why so many people do not bother to vote? “None of the above.” should be a choice on every election ballot.”

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

Yes — ‘none of the above’ should be an option. ;-)

I don’t vote, anymore…what’s the point? And it sure as hell doesn’t have anything to do with ‘apathy’. Lesser of two or three evils doesn’t do it for me. And I can’t figure out how to circumvent that….aside from deliberately spoiling my ballet. No one gets that message, either….

#104 Meanwhile in the GTA on 01.03.15 at 11:26 am

Garth you commonly say that we should buy things when they are cheap, i.e. ETF’s, etc. Well isn’t that what Canadians are doing with credit. Interest rates have never been lower so isn’t this an ideal time to load up with credit?
An example of this would be to not pay down the mortgage too aggressively and instead take that money and invest it in a balanced account. Why pay off the 3% mortgage, better to invest and get 7%.

#105 Ret on 01.03.15 at 11:36 am

If I spend the money that I save on gas on beer, does the government have more or less tax revenues at the end of the day?

#106 Ronaldo on 01.03.15 at 11:46 am

#94 Waterloo Resident

”Oh yeah, I’m a happy guy now !
Just filled up on gas at $0.91 and I have a huge smile on my face. LIFE IS GOOD.”

So I guess that means you can drive a lot more now right?

#107 Meanwhile in the GTA on 01.03.15 at 12:03 pm

#74 garthturnerbull on 01.03.15 at 12:25 am
Last year I liquidated my real estate, came out with a cool 250k after being invested for 6 years. I now rent a bedroom for 350 a month waiting for the day rates shoot up and banks beg for me to purchase again.
++++++++++++++++++++++++++++++++=
Garth, you’ve got this poster so convinced that he won’t even splurge for a whole basement. Only ONE room. so sad :(

#108 Ret on 01.03.15 at 12:04 pm

Debt is future consumption moved forward and in the process future government tax revenues also get moved forward as tomorrow’s spending happens today.

The government keeps interest rates low to punish savers and reward borrowers to keep debt and spending at record highs and in the process much of tomorrow’s tax revenues coming in today.

We can spend those future tax revenues today and let’s worry about the future when the time comes. That is what Canadians want to hear.

#109 Meanwhile in the GTA on 01.03.15 at 12:10 pm

#89 R on 01.03.15 at 3:02 am
I rent a sub $1k apt and my line of work in Ontario stands to benefit from cheaper oil and increased disposable income from happy people paying less for gas.

you work at a gas station?

#110 Adam Smith on 01.03.15 at 12:26 pm

Ironically, the Trudeau Liberals would probably be better at balancing the budget and working down the debt since they’d have the Conservatives breathing over their shoulder and calling them out on any waste. Trudeau and Mulcair wouldn’t get the same benefit from their base in doing like-wise with the Conservatives which is what has been giving the Conservatives a free-pass to throw around fudgy numbers regarding getting back in black.

#111 Setting the Record Straight on 01.03.15 at 1:03 pm

“How this might end is Russia will quietyly back out of Ukraine and NATO will tell the Saudis and Iraq to turn the taps back low and the price of oil will rise. Who knows how long it will take, weeks, months?”

*****
Does anyone read? Do you know how Crimea became a ‘part’ of Ukraine? Leaving aside anything else, do you think Russia would allow its naval base on the Black Sea to become threatened by the forces of a government in part composed of neo Nazis and supported by
NATO? Would the U.S. allow a Chinese influenced government to run Panama? Even Kissinger thinks the West has lost its mind on this issue.

#112 I'm stupid on 01.03.15 at 1:15 pm

#11 Mark

Your article highlights the problem with MSM. They wrote a story looking for compassion when in fact they left out important details.

Does he get paid to run the orphanage?
Did he charge the Haitian interest on the $2700 loan?
Are the business going to generate money?

This couple looks more like they’re tying to profit from a devastated country. Now they’re angry because they didn’t read their mortgage contract and don’t want to pay.

#113 DM in C on 01.03.15 at 1:16 pm

“Oh yeah, I’m a happy guy now !
Just filled up on gas at $0.91”

You’re a happy guy @ $0.91 — you’d be ecstatic in Calgary for $0.78 $0.74 at Costco

:-D

http://www.calgarygasprices.com/

#114 TurnerNation on 01.03.15 at 1:24 pm

The only Zipcar available today was a Kia Rio. North Korea’s finest export. 15k on it but extensive valvetrain clatter until warmed up. Hoary engine, must row through its gears in the manumatic slushbox manually to extract even passing performance.

Rating remains Unsafe at any Speed.

#115 Jim B on 01.03.15 at 1:41 pm

“So, what’ll the federal government headline be a year from now?”

All I know is that it won’t begin with “Harper government.”

#116 Jim B on 01.03.15 at 1:42 pm

#113 enzholdings

You do realize that a hundred-pound gorilla would be really, really small, right?

#117 Dadeedum on 01.03.15 at 1:43 pm

#85 David

” Falling oil prices are hardly an economic stimulus..”

David, you DO live here on earth? In a first world country? Because oil has seeped into every single facet of modern civilization. So cheap oil = good times for people and business, except for provinces starting with an A.
(The effect of cheap oil on the environment may not be too healthy, but we are talking economic stimulus here.)

Your first link refers to job losses in and about the oil patch. Oil field workers will lose jobs with lower oil prices. If your company houses oil workers, you will suffer too. This is not news.
But don’t confuse things: Oil fuels our economy, but oil is not THE economy. We are not Saudia Arabia. How many oil workers are there in Toronto and the golden horseshoe? I would ask how these people are affected by low oil prices.

In your second link, Jeff Snider, despite his pretty good vocabulary, doesn’t have a clue. He postulates that because low oil prices and recessions happen together, that cheap oil doesn’t stimulate the economy.
He confuses correlation with causation.

He uses the great depression as an example. He holds up the low price of oil in that era, and says it didn’t help. It’s nonsense. The stock market crash, bank failures, peoples refusal to spend and other factors for that economic collapse dwarfed the effect of lower oil prices.

Finally, I have this thought experiment for you.
What if, instead of oil prices halving, prices had doubled this past fall? By Jeff Snider’s reasoning, it should not have been a problem.
You can read all about oil price shocks by googling the causes of the USA and UK’s 1973-75 recession.

#118 not 1st on 01.03.15 at 1:58 pm

Garth, here’s next years headline a year early; Boomer fossils in big trouble,

http://www.bbc.com/news/business-30592942

#119 Vancouverite on 01.03.15 at 2:16 pm

Garth mentioned this long before the article in Financial Post today:

http://business.financialpost.com/2015/01/03/layoffs-loom-in-albertas-oil-patch/

Layoffs loom in Alberta’s oil patch

“It’s been years since David Yager has seen multiple “For Sale” and “For Rent” signs in Fort McMurray, the northern Alberta city that is usually crawling with workers from across Canada looking to make a buck in the oilsands boomtown.”

#120 Renter's Revenge! on 01.03.15 at 2:17 pm

#113 enzholdings

“Just think what is the the 100 LB gorilla in the room when it comes to assets!”

My old, ratty couch that should have been replaced a long time ago?

#121 Obvious Truth on 01.03.15 at 2:23 pm

Any attempt to assess the impact of oil prices on canada can’t be done by looking at the past.

The o and g industry is huge. Facets of business and spending related to it likely multiples bigger. The banks rely on it. So do many governments. Housing is clearly on the decline. Banks and governments have also relied on it. The manufacturing sector is now quite small. They need sub 80 cents for a long time. It’s what we are likely to get. Once this glut of gas disappears prices will go up here for that too reflecting the exchange rate.

This could be long and painful as canada shifts from an economy that is very uncompetitive and was firing on low rates and oil revenues.

So called transitory inflation is on the way. If not already here. This year just curbing heloc ratios has already hurt. Imagine that businesses now have to pass n costs because of the exchange.

Misallocated assets always get wiped out and savers always win. I still feel we are looking at a serious reset with no apparent help on the way.

#122 prairie person on 01.03.15 at 2:24 pm

It has started. Banks refusing to approve changes so that they can charge higher rates. This is in England but what one banker can get away with, others will do.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11310046/HSBC-the-latest-lender-to-block-mortgage-porting.html

#123 Shawn Allen on 01.03.15 at 2:28 pm

Mark’s off the mark response

Mark at 69 responded to KommyKim at 61 as follows:

“Ummm… Isn’t the Federal Excise tax calculated at $0.10 per LITER??? So the price of gas will not effect the federal government revenues as much as you’d think. “

You’re forgetting the billions in personal income tax collected on the hoardes of O&G and supporting employees who are about to see their jobs lost or their overtime eliminated.

***************************************
Mark, the man correctly pointed out that the federal gasoline tax was flat at 10 cents rather than a variable percent and therefore that part of the federal gas tax will be unaffected by lower prices. He then went on to note that GST collected on gasoline will be affected.

The topic KommyKim addressed was JUST the gasoline tax.

You then accuse him of forgetting a different impact of lower OIL prices. The topic of his post was the impact on federal taxes of lower GASOLINE taxes.

This is typical of many of your posts where you seem to have a need to find fault and make corrections but it is your response that is faulty.

I hate to bring it up again but I suspect this sort of behavior and attitude is the reason that you (as I understand it) are not employed and have had trouble gaining employment in the past.

#124 8102 on 01.03.15 at 2:35 pm

Jeeessh,

And I always thought it was illegal to use Crown Assets to promote any single Political Party, I guess I was wrong.

Me thinks 2015 is going to be an interesting year for Stevo and the boys, what with trials going on, Saudi Arabia being defiant, Real Estate running on forward momentum and nothing else, lay offs around the corner, and looming inflation possible because of the tanked dollar, glad I followed your advice on where and how to invest Garth!

#125 Crowdedelevatorfartz on 01.03.15 at 2:37 pm

@#12 SBby
“Business as usual in the lower mainland.
Assessments up overall.”
++++++++++++++++++++++++++++++++++++

Actually it depends on which media outlet you listen to.
The 6pm Friday evening Global “News” interviewed a BC Assessment (property tax assessors)spokesperson and he mentioned that BC assessments have flat lined for the past 2 years. He also mentioned that there are pockets of increase such as areas of North Van. Areas of Kelowna, etc.

And then we have a real estate ad printed in the local rag The Province Jan 2nd Page A5 from “EpicHomes”

“No payments until 2016! For the next 6 buyers!” Buy now, move in later, and we’ll pay your first 6 mortgage payments!”

Montgomeryacres.com

Doesn’t sound like a “boom” market to me.
Apparently Maple Ridge real estate developers see the writing on the wall. Pump and dump comes to mind.

#126 kommykim on 01.03.15 at 2:49 pm

RE: #69 Mark on 01.02.15 at 11:53 pm

“Ummm… Isn’t the Federal Excise tax calculated at $0.10 per LITER??? So the price of gas will not effect the federal government revenues as much as you’d think. “

You’re forgetting the billions in personal income tax collected on the hoardes of O&G and supporting employees who are about to see their jobs lost or their overtime eliminated

Maybe you should go back and re-read my comment about Garth’s over estimation of the loss of GAS TAX REVENUE due to falling gasoline prices.
It was a specific comment about a specific subject. It had nothing to do with anything else.
I’ve even provided a link for you:
http://www.greaterfool.ca/2015/01/02/defiance/#comment-342672

#127 AK on 01.03.15 at 3:55 pm

.#13 Mr. White on 01.02.15 at 8:03 pm
“If anyone imagines that the Saudi’s et al are interested in oil prices below 100 bucks I have some wells for sale here in Alberta.”

It will rebound probably at the end of quarter 1 and certainly before the 3rd quarter of 2015.”
===================================

Don’t be too disappointed when your prediction does not come through..

#128 Meanwhile in the GTA on 01.03.15 at 4:07 pm

#123 Shawn Allen on 01.03.15 at 2:28 pm

The topic KommyKim addressed was JUST the gasoline tax.

You then accuse him of forgetting a different impact of lower OIL prices. The topic of his post was the impact on federal taxes of lower GASOLINE taxes.

This is typical of many of your posts where you seem to have a need to find fault and make corrections but it is your response that is faulty.
++++++++++++++++++++++++++++++++++
#126 kommykim on 01.03.15 at 2:49 pm
RE: #69 Mark on 01.02.15 at 11:53 pm

Maybe you should go back and re-read my comment about Garth’s over estimation of the loss of GAS TAX REVENUE due to falling gasoline prices.
It was a specific comment about a specific subject. It had nothing to do with anything else.
+++++++++++++++++++++++++++++++++

Mark gets hit with a right and then a left. He is a bloody mess. The crowd is screaming for him to throw in the towel, it is just too grotesque to watch. But will he listen, no. When will he learn, no.
Next response from Mark will show no acknowledgement of either Shawn’s or kommykim’s rightfully placed criticism.

I hate to bring it up again but I suspect this sort of behavior and attitude is the reason that you (as I understand it) are not employed and have had trouble gaining employment in the past.–too funny

#129 Mr. Reality on 01.03.15 at 4:35 pm

If you do not want to be at the mercy of the banks don’t get a mortgage.

If you sign on the dotted line and things go south, tough. Don’t sign on the dotted line. This couple made their bed and as far as I’m concerned sleep in it and cough up the 17k.

Home owners across this country are in for a huge shock once negative equity sets in and the whining and sniveling and the “this isn’t fair” comments will be deafening.

Sheeple

Mr. R.

#130 Mark on 01.03.15 at 4:37 pm

“This is typical of many of your posts where you seem to have a need to find fault and make corrections but it is your response that is faulty.”

Shawn, I can point out many flaws in your posts (such as your recent that the stock market’s return will be dividends + GDP growth), and even in your website (where you make a similar mistake). I don’t though, as such simply doesn’t change the outcome of the analysis.

The previous poster was trying to down-play the impact of falling oil prices on GoC revenues. I merely pointed out that taxes on end-uses of gas was a drop in the bucket compared to the other taxes collected.

Pick the nits if you want, but don’t lose track of the big picture.

#131 saskatoon on 01.03.15 at 4:39 pm

#114 TurnerNation

unless you are joking: south korea.

#132 Mark on 01.03.15 at 4:40 pm

” Look to short CDN RE exposed equities! “

Have any suggestions on names? I only count a small handful that are even public. The rest of the industry either being foreign, or privately held in Canada. We don’t, for instance, have publicly traded house or condo builders in Canada. CMHC, the country’s subprime mortgage insurer, cannot be shorted.

#133 45north on 01.03.15 at 4:53 pm

Ben : It’s a soft landing until rates raise. This is being priced into USD.

Rate raises flush the bowl. Until then yes most can hang on at near ZIRP rates. But not after.

that got my attention

Nomad : If real-estate does get hit hard here, we’re going to look like the greatest fools on the planet, for years. Imagine, after all the warnings we were given.

I cannot see how we are not going to get hard. Canadian debt levels are higher than American debt levels when their housing collapsed.

RealistvsExtremist: Folks……when are people REALLY going to wake up and understand that Govt, it public sector employees and the crony capitalist banks and corporations that inevitably BUY the govt are the ONLY REASON economies have failed since the day MAN picked his knuckles off the ground. Every single time. Govt Govt Govt.

hmm public sector employees and crony capitalist banks. In a world of perfect justice you would be forced to learn more before you could post again. I hereby sentence you to study four specific areas of government this year.

Here’s an example:
https://www.ontario.ca/driving-and-roads/understanding-demerit-points

Free and easy : However…in lockstep the local govs have raised taxes at the same time.

well depending on where you live I suppose that your local government could be raising taxes – after all there are thousands of local governments. Local governments are not raising taxes in lockstep to the drop in gasoline prices.

Free and Easy – especially with your judgements!

Investing advice from Downton Abbey:

Downton’s patriarch, the Earl of Grantham, needs a little Investing 101. He loses the entire family fortune at the start of Season 3 by betting on a Canadian railroad company that goes belly up. “It wasn’t just me. Everyone said we couldn’t lose,” he protests.
His wife, Cora, sums it up best: “Why were you so heavily invested in one enterprise. Wasn’t it foolish?

http://money.cnn.com/2015/01/03/investing/downton-abbey-season-5-great-money-lessons/index.html

#134 Shawn Allen on 01.03.15 at 5:01 pm

Under the heading, why do I bother…

Mark at 130 said:

Shawn, I can point out many flaws in your posts (such as your recent that the stock market’s [long term average] return will be dividends + [nominal] GDP growth), and even in your website (where you make a similar mistake). I don’t though, as such simply doesn’t change the outcome of the analysis.

**************************************
Note I added the parts in square brackets above.

Mark, that is just the point, one does not win friends and influence people by constantly finding fault. At very least be a lot more selective.

Mark you can take that argument about GDP with Warren Buffett. I learned of that relationship from his Fortune magazine articles of 1999 and 2001.

http://archive.fortune.com/magazines/fortune/fortune_archive/1999/11/22/269071/index.htm

http://archive.fortune.com/magazines/fortune/fortune_archive/2001/12/10/314691/index.htm

Rule Number 1: Always assume that Buffett is correct

Rule Number 2: Don’t forget rule number 1

Berkshire Hathaway just completed its 50th year under Buffett’s management and the stock is up from the $14 to $18 range in 1965 to $223,600 today. That’s over one million percent. Personally, I think there was a bit more than luck and leverage involved.

#135 chapter 9 on 01.03.15 at 5:04 pm

“Although I can’t speak of the details because it is not my area of expertise,what Mr. Klein is doing in Alberta is,in principle,what governments need to do.
He is taking a look at a situation that is unsustainable financially and he is taking steps necessary through expenditure reductions to eliminate that financial uncertainty on a permanent basis with in the life of a single parliament.
This is the only way it ever gets done. Any politician who says he is going to do it over two parliaments is never going to do it.
That is the”golden Rule”

Stephen Harper June 1994

#136 NoName on 01.03.15 at 5:30 pm

#114 TurnerNation

i don’t know why everyone is beating up poor korean imitation automobile, while back in 2012, i rented kia sportage 2.0 crd for a whole month, and i was nothing but impressed with a car. Just imagine 140-ish HP and 290 ft/lbs with 6 spd, only odd thing for me in that car was low redline, comparing it to my daily driver where redline is on 8k.

maybe you car had hamster wheel under the hood instead of engine, just saying…

https://www.youtube.com/watch?v=ZYWHsOeDf3M

#137 RealistvsExtremist on 01.03.15 at 5:58 pm

RealistvsExtremist: Folks……when are people REALLY going to wake up and understand that Govt, it public sector employees and the crony capitalist banks and corporations that inevitably BUY the govt are the ONLY REASON economies have failed since the day MAN picked his knuckles off the ground. Every single time. Govt Govt Govt.

hmm public sector employees and crony capitalist banks. In a world of perfect justice you would be forced to learn more before you could post again. I hereby sentence you to study four specific areas of government this year.
+++++++++++++++++++++++++++++++++

Your comment makes no sense. We HAVE a dictator system. PORK BARRELING is exposed by media every other day. It’s no secret it happens. Public Sector Workers are behind it…….its their job. No one puts a gun to their heads and says “do your job screwing Canadians or we will kill you”. Public Sector Workers do it on their own accord. Course if you question it, it’s always the same boo hoo hoo from any union “well if I don’t screw the public how do I pay my mortgage”?

I think you need to get your head out of the sand bro.

#138 crossbordershopper on 01.03.15 at 6:05 pm

poor people dont care about debt, since they dont have any. banks dont lend money to people with no income other than government cheques. so no worry about debt to income ratio’s to worry about. wow i was stressed for a while.
so with lower oil prices the government might be running a deficit or debt is high, who cares, poor people have no money and dont pay taxes so no current taxes no future taxes, thats good i was worried for a while about them coming to ask me for something i dont have.
real estate might go down, thats ok, dont have any of that in my vast portfolio of nothing. so i am ok with that exposure unless you are talking about the breeze i keep asking the super to look after which he doesnt.
let me tell you being poor in hamilton is very stress free so for everyone out there who will be working hard this year saving your money, diversifying your portfolio and killing yourself doing it the poor little people in hamilton thank you and keep up the good work.
most people i know are kicking back relaxing

#139 crowdedelevatorfartz on 01.03.15 at 6:08 pm

Hmmmm one day after the BC Assessment(property tax) reports come out….anyone thinking we might be in a flatline or downward trend in Vancouver should think again! Trouble in the local Real Estate market?

Surely you jest!

Todays(Saturday Jan3rd) “News” headlines in the Sun are classic pumping of real estate.

Followed by the obligatory Weekend Real Estate advertisement pull out section of endless buying opportunities……..

No conflict there

#140 crowdedelevatorfartz on 01.03.15 at 6:11 pm

Yo Garth.
Heard any of the rumours that Mike Duffy may be too sick to testify?
Possibly delaying the trial until after the election?
Or he may not even testify due to life threatening “stress”?

#141 Washed Up Lawyer on 01.03.15 at 6:18 pm

Dogs:

As you know by now, I am not a member of the cognoscenti. I do learn from this blog. A couple of questions:

1. I read today that EU zone bonds are reaching a yield of zero. Is that simply a deflationary phenomenon and that at least a yield of zero will provide a return of principal only which will be higher value dollars down the road, i.e. a safe haven?

2. Is deflation contagious or is it possible for a minority of economies to remain inflationary?

Thanks.

WUL

#142 espressobob on 01.03.15 at 6:19 pm

It seems many comments are based on Canadian equity? At 4% of the world economy, why? Global Investors look at the bigger picture and ignore all the doom hype. That’s the world we live in. What’s the problem?

#143 joblo on 01.03.15 at 6:21 pm

Sp, what’ll the federal government headline will be a year from now?

Prime Minister Role highlighted today…………….

Where is Role?

#144 Nomad on 01.03.15 at 6:38 pm

I stumbled on a recent canadian real-estate forum thread that will make renters glad they rent:

“I’ve calmed down a bit now. I am leave this house today, thankfully. The smell is noticeable some times…. When i sell i will move to an apartment and keep my address private. That way they will not be able to find me if they think to sue…”

http://canadianmoneyforum.com/showthread.php/27961-house-disaster

#145 liquidincalgary on 01.03.15 at 6:56 pm

This is typical of many of your posts where you seem to have a need to find fault and make corrections but it is your response that is faulty.

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

does that sound like anyone you (ahem) know?

#146 nonplused on 01.03.15 at 7:03 pm

So just to clarify, what Garth does is “post”, what we do is “respond”. I know, it’s a technical detail and not that important.

#147 Jason in Calgary on 01.03.15 at 7:05 pm

Garth – will increased TFSA limits help the Feds with tax collections? I’m guessing for most Cdns, they simply shift from RRSP to TFSA, and therefore pay more tax now…

#148 devore on 01.03.15 at 7:19 pm

#103 Meanwhile in the GTA

Garth you commonly say that we should buy things when they are cheap, i.e. ETF’s, etc. Well isn’t that what Canadians are doing with credit.

Just because it’s cheap doesn’t make it a good buy. Price is what you pay, value is what you get. You’re buying expensive real estate with rented money. Why buy something that’s expensive to own and do so with extreme leverage multiplying risk, and rent something that’s cheap and plentiful and then pay for it over 30 years?

When the price of something goes down, demand for it increases, and vice versa. Well, except for real estate, because it’s always different, right. It’s different, because demand for real estate is not based on the price of real estate, but on the price of money, due to leverage, enabled by a government policy. THAT is why real estate is different.

Lets look beyond the surface, to see what is going on. People are responding to stimulus. The stimulus is low rates, and easy credit, a signal to borrow. The price of money is cheap. What are people buying with this borrowed money? Productive or underpriced assets? Perhaps those Canadian resource companies, so Canada can benefit from our land wealth instead of those dirty foreigners? Nope. They’re buying houses, already overpriced based on standard investment criteria, such as price-rent ratio.

They’re buying the wrong things. Either the signal (low rates) is false, or the market is misinformed about the value of houses. It was government policy that made money cheap, through central bank actions, and it was government policy that directed that money towards real estate, through removal of lending risk for mortgages and mortgages only. The market has been duped to achieve political ends.

But even though the market has been duped, is irrelevant. The masses are easy to lead. It is your job to see through it, and assess the true market conditions. It is your job to allocate your income as you see fit, and whether to purchase a house because money is cheap, or whether to hold off because houses are expensive.

#149 Andrew Woburn on 01.03.15 at 7:21 pm

I was just reading about the discovery of an ancient amulet. On it was a picture of the Greek deity, Harpocrates, who was the god of silence and secrecy.

I had the immediate feeling of familiarity as if I’d seen this movie before but I can’t put my finger on why. Did he have followers? If so were they … Harpocrits?

#150 what a bubble on 01.03.15 at 7:29 pm

#55 will
Russia can’t BACK OUT of Ukraine because Russia is not IN Ukraine. The frauds in Ottawa would like you to believe Russia is in Ukraine and they obviously have the full backing of the MSM. Russia is not in Ukraine. Please stop reading so much MSM.

+100000 very well said.

#151 -=jwk=- on 01.03.15 at 7:30 pm

@mark

“Fact 1: There is nothing like IRD in any other country, anywhere in the world. Nothing. Somehow banks elsewhere manage to account for this risk without it.”

Specifying the quantum of liquidated damages for early termination of loans is a common feature of loans around the world….

Excellent dodge attempt. I repeat: there is nothing like the IRD anywhere else in the world. Nothing. Damages in contracts? Absolutely, negotiated between the two parties and clearly spelled out in the contract. Something like the IRD? Doesn’t exist – would be a violation of contract law in every jurisdiction I have worked in.


Essentially borrowers who poo-poo IRD’s want a sort of “heads, I win, tails you lose” proposition with the lender. Except that the lender is the one who really is playing the cards as the owner of the money. Isn’t there a famous biblical verse that says, inter alia, “the borrower is servant to the lender”? So not sure what you’re talking about there. If one breaks a contract, expect to pay for it….

No, what they want is fair terms, clearly spelled out in a contract, like everywhere else in the world except here.

Canadian mortgage contracts would be illegal in USA, UK and even China!

#152 Detalumis on 01.03.15 at 7:40 pm

#139 being poor in Hamilton is oh so great, you have your soup truck, don’t need to bother cooking. You have your low income bus pass, your dental bus, lots of social housing, lots of lodges for the mental ill. So many lodges that my town with zero lodges exports all our mentally ill people to live in your city where they can stab your toddlers. You live in the methadone clinic capital of Ontario. Life is good.

Ooops one small piece of the puzzle missing, life expectancy is 65.5 not 86 if you lived someplace else so let me see, you also live your life on fast forward. It’s the teen mom capital as well, so you are a granny by 34 and a great granny by 50. You need to be because your life is 21 years shorter than the poor saps who work for a living.

#153 Daisy Mae on 01.03.15 at 8:15 pm

“….and why the Harper Government (remember when it used to be the ‘Government of Canada’?)

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

Only in Harpers’ dreams….

#154 Daisy Mae on 01.03.15 at 8:46 pm

#116 Jim B: “So, what’ll the federal government headline be a year from now?”

All I know is that it won’t begin with “Harper government.”

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

Harper is full of himself, isn’t he? LOL

#155 Daisy Mae on 01.03.15 at 8:50 pm

#113 DM in C: “Oh yeah, I’m a happy guy now !
Just filled up on gas at $0.91″

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

Have you taken the time to look at the BIG PICTURE?

#156 Ret on 01.03.15 at 8:50 pm

#154 Don’t dump on my town!
Hamilton is the unofficial power chair/scooter capital of Canada and Hamiltonians are proud of it.

Whole generations of families cruise around the downtown core getting some sun and fresh air while they have a few smokes. Each family member has their own power chair provided by the Wynne government, absolutely free.

The wife loves to play count the scooters as we roll through downtown.

For some reason, I rarely ever see these devices in Burlington or Oakville. If they were smart, they would get hooked up with a program to get free scooters too!

#157 RealistvsExtremist on 01.03.15 at 9:17 pm

I just can’t believe how people keep thinking “recovery” in the US. I guess balance sheets do not count in the USSA.

http://www.mybudget360.com/leveraged-system-total-us-debt-credit-market-debt/

How many “great great” are going to be in front of the world children to pay it off? But hey….we had a “recovery” from 2008 to 2015. Yay !!

#158 kommykim on 01.03.15 at 9:22 pm

RE: #131 Mark on 01.03.15 at 4:37 pm
The previous poster was trying to down-play the impact of falling oil prices on GoC revenues.

Since I am the previous poster, I can say that your interpretation of my post is dead wrong.
All I intended to do was point out an error in Garth’s calculations about the federal excise tax on gasoline. Nothing more.

#159 Andrew Woburn on 01.03.15 at 9:25 pm

142 Washed Up Lawyer on 01.03.15 at 6:18 pm

Is that simply a deflationary phenomenon and that at least a yield of zero will provide a return of principal only which will be higher value dollars down the road, i.e. a safe haven?
—————————-

Economists love to theorize about the “real” rate of interest as opposed to the nominal rates created by central bank action. When US T-Bills were paying a nominal 8%, somewhere between 2-3% was a “real” investment return and the rest was a compensation for loss of purchasing power. As you suggest, if your money will buy you 5% more next year, even at nominal zero interest, your “real” return is 5%. However I doubt that real world investors take that much account of deflation yet. It is more likely that they simply don’t want to take any capital risk at this point and they are all crowding into government debt thus lowering the money rental rate the governments have to pay.

Is deflation contagious or is it possible for a minority of economies to remain inflationary?
——————————-

To me that would depend on whether deflation means a general decrease in price levels driven by factors such as supply levels, technology change in addition to changes in money supply or only means a decrease in money supply.

Unless you live in North Korea, technological and production efficiencies gained anywhere in the global economy are going to drop prices in your market sooner or later. However your local monetary authority can inflate/deflate the local currency without directly affecting the rest of the world. In the middle of deflationary Europe, Switzerland has been desperately printing Swiss francs to keep its currency from appreciating and killing its export industries.

Although North America, Europe and Japan have been on the edge of deflation for years, inflation and interest rates in China, India and other emerging economies have been relatively high. China in particular has experienced significant wage inflation. Many people believe these economies have been overheated by a flood of money borrowed cheaply in the US and Europe searching for better investment returns. The flood is now reversing to chase the US recovery, leaving the third world with an increased debt load priced in higher USD. With the drying up of foreign investment and the prospect of higher debt payments to come, inflation may grind to a halt unless the affected governments try to keep printing money.

#160 Harbour on 01.03.15 at 9:31 pm

Crude Oil Price History Chart

http://www.macrotrends.net/1369/crude-oil-price-history-chart

#161 RealistvsExtremist on 01.03.15 at 9:44 pm

http://www.cbc.ca/news/canada/canada-s-weather-weekend-includes-storms-freezing-rain-extreme-cold-1.2888927

And the global warming continues 8 years later after Al Gore belched like a fire breathing dragon.

Still paying $1.02 in ScamHamMoldcouver with the Liberals and their Carbon “Bilderberg” tax. Right Gordo? You know Gordon Campbell? The guy who was given the cushiest job in the whole of the Public Sector in London complete with chef and personal driver? Right after they brought in the carbon tax and he went to the meeting to get his back patted to told he gets the cushy job. (plus 10 million in the Caymens).

http://www.canada.com/story_print.html?id=f59fd0f5-4aa1-4389-9bb8-a0edebc9e4e2&sponsor=

Democracy !!!! YAY !!

#162 Washed Up Lawyer on 01.03.15 at 10:16 pm

#161 Andrew Woburn

Noted. Thanks. Will have to re-read a few times as I frittered away my university education on history and law. I should have taken Econ 101 and Rocks for Jocks.

WUL

#163 Ret on 01.03.15 at 10:22 pm

#154 -Don’t dump on my town!

Hamilton is the unofficial scooter/ powerchair capital of Canada and Hamiltonians are proud of it.

Whole families, each person with their own scooter, roll out into the downtown core on a daily basis. Their $3000 scooters are supplied courtesy of the Wynne government, absolutely free.

Life is good. Catch a little sun, get some fresh air, have a few smokes, pick up your lottery tickets and down a few double-doubles.

Rarely do I see people with these devices in Burlington or Oakville. They need to get themselves into a program and get free scooters too!

#164 VANCOUVER #1 on 01.03.15 at 10:33 pm

Detached Average Price now $1.8 Million!!!

Most expensive sale in Dec was a home that sold for $51,000,088.00.

Yes $51 Million plus!

Damn that CMHC.

#165 SWL1976 on 01.03.15 at 10:54 pm

#163 RealistvsExtremist

The system is flawed, you know it, I know it, lots of people know it, some really care, most don’t.

It’s frustrating people believe what they want to and that’s about it. Propaganda in the main stream media is rampant and not limited to the real estate business. People would rather be soothed with feel good lies than an uncomfortable truth.

Look at some stories of 2014 within hours of MH17 going down Obama blames Russia. When in fact there is a very different story, but now very few really care. They (the MSM) got their message out first and the short attention spans of the general public no longer care about the truth or the real story as it requires critical thinking and dealing with uncomfortable lies. The MSM achieved their goal to punish Russia, now on to the next fabricated story

I have learned that it’s easier to get a point across about waking the masses in baby steps. Too much truth, and too radical of a story even if it is the truth is too much for most to take in.

I hope more people awaken and see what is happening as I have been trying to awaken the people for years, and have often come off as crazy, but not so much anymore.

People are slowly waking up be patient and most of all be rational. I would really like to do more, but have been struggling with the how to part.

Ideas? Anyone?

#166 Smoking Man on 01.03.15 at 10:54 pm

I need to revise my earlier post when I said rates won’t change in 2015..

Got a strong feeling based on UCC will be going..

Are you READY?

DOWN…

Bond buying binge from investors in Europe who now face negative yields. put a bit of Canada in the book, hoping for a Cary trade on forex if oil rebounds..

#167 Retired Boomer - WI on 01.03.15 at 11:01 pm

#143 Washed Up Lawyer

I have no clue if “Deflation” is contagious. In my personal history inflation was not. No real experience with deflation.

As for buying a bond with a zero or negative rate, my question is WHY buy it? Invest your money where it will be appreciated, nurtured, and cared for. (A brothel suddenly came to mind!) I do NOT believe bonds a good place for investment, only for stability in a portfolio. Yeah, my own bias showing here…then some bond holdings delivered rather well in 2014 go figure.

I FEAR the ravages of a deflationary environment much more than an inflationary one especially for the debt burdened. They WILL feel the pain! Not as much for the pensioners, and the debt free. Little experience with deflation over the years -lots more with inflation!

Hey rather enjoyed the fantasized headline for next year expressed at your post #38.
A hearty laugh thoroughly enjoyed!

#168 Smoking Man on 01.03.15 at 11:09 pm

I hate talking real estate on here cause my opinions usually smack on. Hence pissing off future buyers of my book.

But screw it..

Many posts here included slide rule logic, calculated models.

Non of you factor in the mentality of the herd. What makes them buy.

You all look at price to income ratio. Valid from a logical prospective.

Retarded from an emotional prospective.

The herd looks at rent, vs ownership their calculation are biased in favour of flipping the bird to the land Lord.

The presumed status of making it as a human by being mortgage slaves..

Toronto will have a record year as far as price gains and volume..

The herd doesn’t believe rates will go up and they won’t.

The owners, stubborn pricks, market goes soft, they remove liquidity, inventory.

The only thing an owner needs to worry about…

Thermo NUKE War.

The western showdow government, the guys pulling Obama and Harpo strings have gone completely mad…

They got away with 911 which gave them too much confidence… MH17 a disaster on line for them.. They don’t see yet..

Very dangerous for all of us..

#169 hohoho on 01.03.15 at 11:31 pm

> CMHC, the country’s subprime mortgage insurer, cannot be shorted.

Sure it can … simply short the faith and credit of its backer, ie. CAD $

#170 Smoking Man on 01.03.15 at 11:38 pm

Zero Hedge has it wrong on this one.

http://www.zerohedge.com/news/2015-01-03/peak-dream-death-young-american-entrepreneur

It’s the damn curriculum, no one wants to be the kid sent to the principles office.

Schools have brain washed our kids to hate losing, more than the love of winning.

On average you need to start at leased 5 business before one hits pay dirt. If your lucky first on hits you’re off to the races.

Our kids so self councils of losing , that’s why they buy condos. They become toast of the town.

No one sees, if you’re check has payroll deductions your damn stupid slave. But a happy one.

Thanks teachers..

#171 TurnerNation on 01.03.15 at 11:48 pm

I do not acknowledge our present occupying regime/junta as being legitimate.

#172 Spectacle on 01.03.15 at 11:55 pm

Regarding : 148 #148 nonplused on 01.03.15 at 7:03 pm
“So just to clarify, what Garth does is “post”, what we do is “respond”. I know, it’s a technical detail and not that important.”
*********************
Yes my son, it takes much time and thought, but you will prevail. And you will wear the mark one day, like the rest of the blog dogs here.

http://www.youtube.com/watch?v=40DykbPa4Lc

Regards,

#173 Bill on 01.03.15 at 11:58 pm

Waddda about the CARBON taxes BC folks are getting SCREWED with!!!!!!!!!!!!!!!!??????????????? Man I’m choked. Wholesale gas is .50c and Carbon crap is STILL NEAR .07 cents….Let riot!!!

#174 Smoking Man on 01.03.15 at 11:59 pm

Damn, my wife turns over a new leaf, a new years resolution. No more Casino, Drinking or Smoking.. Same every year.

I’m capped at only two glasses of wine tonight, having gone through this every new year, I stratigcaly placed JD bottles in new hiding spots in my yard at Fort Long Branch.

She’s gone to bed an hour ago.. Ready to pounce on me the second I go for the wine in the fridge. She’s awake, pretending to be asleep.

Has here Scotch highlander sord ready to chop off my head the second I approach the fridge….

Ha, honey, you have no idea of what an evil Man you share your bed with.

I’m taking out the dogs…. Is that OK..

She pretends to be snoring, I know the difference between a fake snor and a real one…

I’m taking down a 26er of honey JD in two gulps..

#175 45north on 01.04.15 at 12:00 am

RealistvsExtremist : Public Sector Workers are behind it…….its their job. No one puts a gun to their heads and says “do your job screwing Canadians or we will kill you”. Public Sector Workers do it on their own accord.

I worked for Statistics Canada for 10 years and for Agriculture Canada for 30. We always strived to provide value to Canadians at a reasonable cost. We were doing things that are simply impossible to do in the private sector. Such as carry out the Census or compile the soil maps of Canada. Mostly it’s civil servants trying to define projects which provide value – the waste occurs when they make projects with little or no value. The judiciary sometimes imposes projects which are wasteful. There was litigation concerning tobacco and the judiciary decreed that no government data related to tobacco should be thrown out. Cost was not a consideration. So before any computer could be thrown out, somebody had to certify that it contained no tobacco data. The Federal Government throws out 10,000 computers a year at $100 a computer times 10 years = $10 million. And that’s a low figure.

More recently the Jodhan case resulted in a ruling that all web sites had to be accessible to the visually handicapped. That includes the blind. The ruling effectively means that if blind people cannot see it then nobody can.

To comply with the ruling, Treasury Board imposed standards for government web sites. Such as the Canadian Soil Information System
http://sis.agr.gc.ca/cansis/index.html

The site is almost entirely maps and pdf reports on soils: none of which meet the standards. So the site will be shut down this year. It represents the entire knowledge of soils in Canada compiled over generations at a cost of $800 million. This is not just waste, this is loss.

These rules are now being applied across the government and so is the loss.

I personally maintained the Cansis web site. The frustrating thing is that it can be maintained and updated at a small cost but it will be shut down. Lofty visions have led to poorly considered judgements which in turn have been poorly applied.

What is needed is an informed citizenry and frankly RealistvsExtremist you’re no help.

#176 Andrew Woburn on 01.04.15 at 12:00 am

167 SWL1976 on 01.03.15 at 10:54 pm
The system is flawed, you know it, I know it, lots of people know it, some really care, most don’t.

People are slowly waking up be patient and most of all be rational. I would really like to do more, but have been struggling with the how to part.

Ideas? Anyone?
============================

We actually have everything we need already. If people nominated and voted for their own local political representatives instead of some parachuted party stooge, and if they demanded their representative vote in support of their wishes, we’d be halfway home right there. The Swiss have been doing it for a long time. It’s not magic.

#177 triplenet on 01.04.15 at 12:09 am

#153 jwk

Interest calculations on Canadian mortgages are also different than American mortgage interest calculations.

#178 Kenchie on 01.04.15 at 12:12 am

Interesting read on China’s political leadership…

“Nathan VanderKlippe on China’s man on a tightrope and the Kim Jong-un nobody knows”

http://www.theglobeandmail.com/news/world/the-world-in-2015-nathan-vanderklippe-on-chinas-man-on-a-tightrope-and-the-kim-jong-un-nobody-knows/article22275669/

#179 Bill on 01.04.15 at 12:31 am

Waddda about the CARBON taxes BC folks are getting SCREWED with!!!!!!!!!!!!!!!!??????????????? Man I’m choked. Wholesale gas is .50c and Carbon crap is STILL NEAR .07 cents!!!

#180 TurnerNation on 01.04.15 at 12:38 am

Hmm I tried submitting this subversive message Saturday night and got the error below:

“I do not acknowledge our present occupying regime/junta as being legitimate.”

——————————

Retry for a live version

Website is offline

No cached version of this page is available.

Error 520 Ray ID: 1a3482ce623d0f99

Web server is returning an unknown error

#181 Andrew Woburn on 01.04.15 at 1:26 am

What Surging Chinese Investment in Australia Says about China

http://www.worldaffairsjournal.org/content/what-surging-chinese-investment-australia-says-about-china

#182 liquidincalgary on 01.04.15 at 6:20 am

Shawn Allen (meanwhile in the gta), says:

that is just the point, one does not win friends and influence people by constantly finding fault.

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

sound like anyone (ahem) you know?

#183 NoName on 01.04.15 at 9:26 am

meanwhile in hamilton, copper theft

http://www.thespec.com/news-story/5240685-shocking-wire-theft-plunges-eastport-drive-into-darkness/

#184 NoName on 01.04.15 at 10:30 am

interesting read,

http://taxfoundation.org/blog/real-value-100-each-state

#185 Nomad on 01.04.15 at 10:43 am

DELETED

#186 Rexx Rock on 01.04.15 at 1:03 pm

House prices in Victoria average $536 000,up 1.9%.Its normalizing to about the inflation rate.I don”t think any family making under $100,000 can afford and maintain a house in Victoria.I guess that’s why many people leave here to find more affordable housing.

#187 Uh Oh Canada on 01.04.15 at 1:14 pm

#107 Meanwhile in the GTA wrote:

#74 garthturnerbull on 01.03.15 at 12:25 am
Last year I liquidated my real estate, came out with a cool 250k after being invested for 6 years. I now rent a bedroom for 350 a month waiting for the day rates shoot up and banks beg for me to purchase again.
++++++++++++++++++++++++++++++++=
Garth, you’ve got this poster so convinced that he won’t even splurge for a whole basement. Only ONE room. so sad :(

LOL. He probably moved back in with Mom and Dad. At least he pays rent.

#188 NoName on 01.04.15 at 1:29 pm

bitcoin in rear view mirror

Jan 5 2014 951$, Jan 4 2015 270$ 70% loss in value yoy
http://oi57.tinypic.com/2cse6xj.jpg
Dec 1 2014 378$, Jan 4 2015 270$ 30% loss in value last month alone
http://www.coindesk.com/reasons-behind-bitcoins-price-media-hype/
as a hype dies so does price
(http://news.yahoo.com/12-worst-investments-2014-163715515.html)
and
“state of the art” bitcoin mines
http://www.thecoinsman.com/2014/08/bitcoin/inside-chinese-bitcoin-mine/
http://www.thecoinsman.com/2014/08/bitcoin/inside-one-worlds-largest-bitcoin-mines/

#189 economictsunami on 01.04.15 at 1:31 pm

Interesting rainy day reads:

When & why central banks unilaterally decided to target a 2% inflation rate, wages were held in check and began to stagnate.

Of Kiwis and Currencies: How a 2% Inflation Target Became Global Economic Gospel:

http://www.nytimes.com/2014/12/21/upshot/of-kiwis-and-currencies-how-a-2-inflation-target-became-global-economic-gospel.html?_r=0&abt=0002&abg=0

Prepare for likelihood that many 2015 forecasts are off mark http://tgam.ca/EHLt  via @globeandmail

(Unfortunately only to subscribers. The G&M has failed to use the NY Times 3 free article model yet which would be a net benefit to their web based ads.)

If QE worked then why has it failed to kick-start inflation?

http://www.zerohedge.com/news/2015-01-02/if-quantitative-easing-works-why-has-it-failed-kick-start-inflation

Jeremy Jones (Young’s Research) notes the last time GDP was “this good” and the unemployment rate was 5.8%, short term interest rates were @ 5%….

#190 OMG on 01.04.15 at 1:50 pm

#176 Smoking Man on 01.03.15 at 11:59 pm
Damn, my wife turns over a new leaf, a new years resolution. No more Casino, Drinking or Smoking.. Same every year.

……..,,……………………………..
Nice quality Smoking Man, you’re a real winner. Lie to your wife? So why would we even believe anything you say?

#191 RealistvsExtremist on 01.04.15 at 2:06 pm

What is needed is an informed citizenry and frankly RealistvsExtremist you’re no help.
+++++++++++++++++++++++++++++++++

If I’m no help you would not have posted and identified the waste and loss. Thanks !! It’s a well known fact that if all three levels of govt cut out all the waste and canned all the useless employees we do not need we would be ahead by billions a year. But Govt is a self fulfilling prophecy. And it collapses every single time. Your a stats guy…..go look it up.

And maybe you could explain why you bozo’s say there is NO inflation when every year the govt raises taxes by 5 to 9 percent in some tax or fee. Food goes up. Fees Fees Fees Fees Fees Fees everywhere. Tolls. Environmental (theft) fee. Fuel surcharge (I don’t get one of those on my paycheck). Smaller packaging. Energy goes up (yes yes gas is down for the first time in 10 years – for how long? How do we get those ten years back and its still over a buck in scamcouver)

Would really like your opinion on the scam called STATS CANADA sir?

#192 OttawaMike on 01.04.15 at 2:45 pm

Here is an Ottawa Realtor not sticking to the party line:

http://ottawastart.com/gord-mccormick-is-it-a-1990s-replay-in-ottawa-real-estate/

Telling the public what is actually going on in the market is one of the most serious offenses and will likely lead to sanctions or ostracizing by his peers.

#193 OttawaMike on 01.04.15 at 2:49 pm

#185 NoName on 01.04.15 at 9:26 am

The MOT would be better off just handing out free meth and crack

The labour and administration costs to rewire will exceed the actual copper value 50 fold. The best news stories are where the copper thieves fry themselves in the act.
True Darwinian justice.

#194 bdy sktrn on 01.04.15 at 3:08 pm

#183 Andrew Woburn on 01.04.15 at 1:26 am

In a 2014 survey of almost 1,000 Chinese each worth over $16 million…..
Note that 90% of the 1,000 richest people tracked by the Hurun Report are either officials or members of the Chinese Communist Party.
————————————-
how can i get a Chinese govt job?

sure seems to pay well. really well. crazy well.

just like govt everywhere DIRTY money is the name of the game. the system there seems to be esp bad.

#195 bdy sktrn on 01.04.15 at 3:09 pm

but of course none of that dirty money ever makes it to canada.

#196 Smoking Man on 01.04.15 at 3:21 pm

So much for new year resolutions.

Back at Seneca…. :)

#197 Retired Boomer - WI on 01.04.15 at 3:54 pm

I am reading a rather delightful little book, filled with dire warnings about demographics, and wonderful TAX avoidance schemes.
While much of the Tax stuff won’t apply to me as I live below the 49th, there is still great insight and wisdom to confer to me as well as others. This book, while a bit dated, as a 1995 screed is well worth the S4 I spent on it from Amazon used including shipping.
More delightful is the witty author, none other than our blog host. The book “After the Boom” how to prosper through the coming retirement crisis revised 1015.

If you have not read it, try your local library or any other free / cheap source. I am not sure if it is still in publication. I’ll bet you could save enough dough to make the author proud, if not exactly make him wealthy.

Garth, good book, sir. Your words on RISK assessment are dead on!

#198 Edmnguyhere on 01.04.15 at 4:14 pm

The Current Federal & Provincial Conservatives of ALberta have created a mess! Voting NDP from now on! https://canadiandimension.com/articles/view/if-every-norwegians-a-millionaire-whys-alberta-in-hock

#199 Smoking Man on 01.04.15 at 4:34 pm

#192 OMG on 01.04.15 at 1:50 pm
#176 Smoking Man on 01.03.15 at 11:59 pm
Damn, my wife turns over a new leaf, a new years resolution. No more Casino, Drinking or Smoking.. Same every year.

……..,,……………………………..
Nice quality Smoking Man, you’re a real winner. Lie to your wife? So why would we even believe anything you say?
……

You shouldn’t, I’m a proud practisioner of the art of lying, my next book.

#200 Herb on 01.04.15 at 6:00 pm

#194 Ottawa Mike,

thanks for the link. It accords with our experience with real estate in Ottawa 1982-2011 (except that I remember the decline in realtors as more than half). Of course you won’t find any of this on the official OREB site, so what we saw was only ‘anecdotal’ evidence.

#201 Mark on 01.04.15 at 6:09 pm

“> CMHC, the country’s subprime mortgage insurer, cannot be shorted.

Sure it can … simply short the faith and credit of its backer, ie. CAD $

And get your head ripped off as the Canadian economy deflates and the CAD$ surges?

No thanks… CAD$ shorts are playing with fire.

#202 Retired Boomer - WI on 01.04.15 at 6:53 pm

#201 Smoking Man

Have you ever given thought toward running for local elective office?

I think you might be an interesting candidate. Certainly more interesting than some of the personalities I read about in the MSM.

#203 Pete on 01.05.15 at 12:00 pm

Signs of significant overbuilding here is Oakville, particularly at the high end ($1.5-3M), in areas which are not quite prime. Take this as an example (there are lots more like this), sitting empty since being completed some time ago.

http://www.realtor.ca/propertyDetails.aspx?PropertyId=14913426

There seem to be having a real struggle moving this property, in spite of open house upon open house throughout the winter.

First notice the price $2,888M. It is amazing how many high end houses here have the magical 88 in the price. Franky as a sales tactic this is laughable, except that the careless assumption that a whole ethnic group will make multi-million dollar decisions based on a contrived sales price borders on being racist (IMO).

These agents also left a big black Maserati parked on the driveway for a few weeks as a prop – then it got covered in snow and was taken away – guess that didn’t work.

The next problem with this house is that it is located about 10 feet from Lakeshore Road. So you can be lounging around your pool, listening to the constant drone of traffic just outside the fence, punctuated by the roar of batches of Harleys driven past by Garth and his pals. Not my idea of a multi-million dollar experience.

I think if many of these types of houses don’t move in the Spring we are in for a bloodbath…