READER ADVISORY: If yesterday’s post made you suicidal and consider coming back as a Labrador retriever, don’t read the following. This is your only warning.
Well, here we go. The latest news.
New housing construction in Canada is tanking. The rate of new-builds was at the lowest level in almost a year last month. In fact, it fell 6.5% from November. This is not welcome news in a country (as I showed you yesterday) where 7% of the entire workforce is employed building condos – twice the rate in the US, where they apparently learned a few things when real estate blew up.
Here’s what TD’s economists made of it:
Looking ahead, the downward trend in housing starts seen in the latter half of the year appears likely to continue. Although interest rates are expected to remain low through 2015, their impact on the housing market will decline as pent-up demand is run down. Moreover, the sharp decline in oil prices since the summer of last year is likely to have an impact on areas that are reliant on the resource sector. In particular, Calgary, Edmonton, and other cities in the Prairies are likely to see additional softening in 2015.
Speaking of jobs, these number suck. The economy lost 58,000 part-time positions last month, which wiped out all the new jobs created. The net result was that 4,300 fewer people are working than a month ago, and this comes atop a loss of 10,700 jobs in November. Economists had been expecting a big jump in employment, which says a lot.
Meanwhile in the US, a dramatically different story. The American economy turned out 252,000 jobs in December, in addition to the 353,000 in November, to cap the best year for employment growth in 15 years. The jobless rate is 5.6%, which means it’s almost halved since the financial crisis. During 2014, almost three million more Americans found work. The combination of 3,000,000 additional paycheques and a plunge in gas prices could be a major catalyst in 2015.
So, Canada ends a dismal year for jobs, with the weakest employment growth since 2009, and now the oil plunge is about to kick. The States, however, has added more than 230,000 a month, every month, and cheap energy is a giant economic tailwind. I guess you know how to skew your portfolio. As I told you two years ago, keep the Canadian portion of your 60% growth assets to no more than 17%, which includes REITs. Recovery is not on the horizon.
One of the first major oil-related blood-lettings is taking place in the oil sands. Shell says it will punt up to 300 people, or a possible 10% of its workforce, in a general restructuring. That’s worse than a layoff, of course. Meanwhile word in Calgary is that most of the oil patch guys are planning the worst for March or April, at which time it should be crystal that the price of crude isn’t going to rebound as supply continues to swamp demand and the OPECers play rough.
By the way, here’s how Calgary real estate shapes up at the end of the first week in January: Sales are down 29.3% from this time last year. New listings have jumped 27.25%, and total active listings continue to bloat – now up 47.7%. The average price has dropped 2%. Lots more to come.
And oil? It finished the week just twenty-five cents above the $48 mark. Look at this chart. No words required.
There’s a direct link between the above – lost jobs and the oil slide – and the Canadian dollar. It finished the week at just a bit over 84 cents US, and has shed 9% of its value in the past year. Says Scotiabank: “The outlook has deteriorated, in tandem with falling oil prices, with commodity prices remaining the key risk to our currency forecast.” A lower dollar means higher inflation and an increase in the price of new Harleys.
“Is there no good news, you depressing but mildly addictive old dog?” I hear you cry. And, yeah, there is. Things are bad enough now that the Bank of Canada may further delay following the Fed when it raises interest rates in the next few months. Most bankers, after this week, expect the first round of central bank increases here in a year.
But can cheap money save your bacon or, specifically, the value of your slanty semi if the economy continues to fade? The experience of other places suggests, no. Like Japan.
This week major Japanese banks cut mortgage rates once again, following more stimulus measures by the Bank of Japan to get people spending and buying houses. The 10-year rate has now fallen to 1.15%, down from 1.45%. Yes, no typo. One per cent.
Sound great? It’s not. This is what happens to a society when deflation stalks the land. The average price of a new condo is now 50.7 million yen – which is the same as it was in 1992, right after the Japanese real estate bubble burst. Worse, wages are 4.3% lower than they were a year ago, and have declined for 17 consecutive months. The most recent tumble is the steepest since 2009.
Dreaming of cheap rates and cheaper houses in Canada now that the wheels are coming off? Careful what you hope for. And pity the poor, indebted guy across the road in the big illiquid house you coveted a year ago.
There, but for the grace of blog, go thee.
219 comments ↓
Furst!
Great way to end the week.
Yes, there indeed was I going, but for the grace of the lord (oops, this blog).
And, first this time I think.
Just one thing:
If ” The economy lost 58,000 part-time positions last month, which wiped out all the new jobs created. The net result was that 4,300 fewer people are working than a month ago”
then it also means 53,700 full time jobs have been created, right ?
This changes a little bit the perspective right ?
That fewer people are working? Ask them if they feel better. — Garth
Go U.S.A.!
See what happened to Barrick Gold shareholders last year? Brutal.
And oil? Sheesh.
The commodity super cycle is over.
The giant U.S. economy awakens!
#ThatActuallyHappenedToMeOnce…
http://youtu.be/24DWK42u5gE
#BonusPython #RareAudioSample:PantingSmokingMan
http://youtu.be/nxNyoAMqRXQ
A lot of US construction and oil patch workers crossed the border in 2009 to 2013, sending money home at par (or better) while the US economy languished. Now it’s our turn: a couple of years collecting US paycheques and changing them to Canadian dollars will help take the sting out of this reversal of fortunes. Glad I’m not tied to this country, that’s for sure.
There, but for the grace of blog? Yes, you DID try to warn people! Some listened, and averted heartache.
Here gas was $1.99 a gallon today. Wow, been quite a while since gas competed with milk prices! (Yeah, it’s a WI thing. Don’t try to make sense of it).
People locally all smiles for now. I wonder when the guys in the sand mines (frac sand mining) will hear of a slow down? Since I live within earshot of the CP mainline, I can tell you rail traffic has not seen any slowdown that’s discernible. Of course most all downstream action after the wells are sunk, and working.
Oh well, everyday brings new news, and its never all good.
Whats up with common shares of the big six Canadian banks? They keep tumbling. And tumbling.
RBC all-time high, $83 in November, $78 now. That’s ‘tumbling and tumbling’? Sheesh. — Garth
Can’t wait to visit Calgary next summer.
Hmmmm… great job news from the US? I don’t know.. I mean I know this is zerohedge but can they just be out and out lying? Seems unlikely:
http://www.zerohedge.com/news/2015-01-09/labor-participation-rate-drops-fresh-38-year-low-record-929-million-americans-not-la
And also… duh, of course they aren’t raising interest rates. Told you that ages ago. The “what-rates-are-the-banks-pushing” tell is no-fail. They were offering a ‘better rate’ on the fixed. You’ll know rates are headed up when they switch back to pushing variable. it’s obvs.
Getting hitched next year and probably will start looking at houses soon after in the GTA. Any chance Calgary’s RE market takes down Toronto along with it?
Of course with portfolio returns the last few years, we’re in no rush to buy.
Well, this slo-mo meltdown has taken a tad longer than I expected ( figured a year ago was primetime) but its here and it’s gonna be ugly.
Thanks for all your hard work and constant reminding Garth.
You’ve saved some of the great unwashed.
IT has endless shortage of normal people. Even in Canada, duh.
Situation with IT in US though is beyond wildest imagination.
Much of what you say makes sense Garth. I’ve been consulting with a US company for a year now because I can’t find a job (at my level) here. I’ve had a few interviews but either the job got canceled or it went to someone else. Oh well the US gig has been super interesting, good people as well, and it pays the bills. And I get paid in US dollars (Yay!)
But I don’t understand how a restructuring is worse than a layoff. Is it because there is no hope of rehire? Most people who get laid off never return to that job. They have to find something else usually before the job comes back. Seasonal construction being one exception.
I don’t think I’ll commit suicide and come back as a Labrador but I have a Shepard/Collie cross who likes to cuddle and play catch so maybe he can cheer me up.
How is the US picture rosy when….
Two major US department store chains, JC Penney and Macy’s, have announced plans to close stores and cut thousands of jobs.
http://www.bbc.com/news/business-30737748
Layoffs at Coke and McDonald’s
http://www.usatoday.com/story/money/business/2015/01/08/layoffs-coca-cola-coke-mcdonalds-icons/21437759/
US Steel to Fire 756 Workers, Idle plants in Texas and Ohio as price of oil slumps.
http://www.ibtimes.com/us-steel-fire-756-workers-idle-plants-texas-ohio-oil-prices-slump-1775694
Everyday seems to bring news of layoffs.
Layoffs are at the lowest level since 2009. But, believe what you wish. — Garth
My Shepard/Collie also likes to play soccer with me and the boy. He even uses his feet and is a pretty good dribbler. But he doesn’t get the passing or scoring thing, he thinks the object is to have the ball.
Here’s a little something to cheer everyone up:
https://www.youtube.com/watch?v=DvwA7BK4-6A
#6 Smartalox
Was talking to an RBC Bank USA staffer about trends six months ago. She noted an increased number of Canadians headed for the US oil and gas industry. Some were warning that the writing was on the wall for the oil sands, and they were getting out while the going was good.
I am eagerly anticipated the flood of repossessed pickup trucks that will make its way into Washington state courtesy of young Albertan oil sands workers who over-extended themselves. My new Ford F-150 lacks torque, and I would be happy to vultch on the poor decisions of some 20 year old who bought a pimped out F-250 diesel. There are increasing numbers of such cars bought at auction by US dealers from distressed Canadians.
Here in Eastern Ontario, we’re told that the lower dollar will help manufacturing. Unlikely, since it all went south twenty years ago.
The effect may be to choke off the boom in cross-border shopping and mail order from the U.S. They just got over the last-but-one crash in Ogdensburg, N.Y. (finally bulldozed the old empty mall from the 90’s).
Canadians love their shopping!
Filled up my care at Superstore yesterday in Alberta at .73/litre. with .07/liter off to make the price .66/litre. Garth, maybe time to buy a Hummer or a Truck with balls? geeeez….I been living in Alberta for too long.
Living the good life in Alberta, renting, balanced, liquid, diversified, income streams, cash, cash flow, debt free, and I always live alone. Many Canadians are about to learn the value of always putting their freedom first. Especially men, because when the paycheque disappears, so does she. Seen it all before. Fact.
I said before … housing implosion won’t be triggered by interest rate hike but because many, many people will lose their jobs. I agree with you Garth … spring will be a bloodbath.
Buy Low… Sell High
About three years ago the house prices in the U.S. were screaming bargains and the Canuck buck was around par.
It was a golden opportunity to buy in the U.S. or even move there. Not for everyone, but it made a lot of sense for snow birds who were already spending a lot of time in the U.S.
Garth said, Sell Canada, Buy America
Many did.
But many on this blog were sure that U.S. house prices would continue on down, the U.S. was broke, trillions in debt, trillions printed and etc. They were wrong, at least about house prices.
If oil related assets are cheap now, it may be time to buy. Certainly at some point it will be time to buy oil assets. At that time (which may or may not be now)most will be afraid but some will buy. Worse, as a necessary part of the buy process, some will sell to the buyers.
Also one does not need to catch the exact bottom. One could take a small position in oil stocks now and simply buy more if the price keeps dropping. By being patient and buying slowly over time, things are likely to work out well.
oh so rate increase is pushed to 2016? did the tinfoils not say “rates going nowhere” and u blasted them? get used to crow my friend…. oil is screwed and all bets are off
The Fed rate and mortgages will still rise. The BoC was always expected to lag. — Garth
One might ask a question here. Why is the Canadian economy so reliant on commodities in general, and crude oil in particular? Why aren’t things more diversified?
Good to see Garth is coming around to the idea that the BoC is going to be “on hold” for a long, long time to come. While credit-worthiness increasingly will be the issue, particularly as house prices continue their decline.
Now it’s our turn: a couple of years collecting US paycheques and changing them to Canadian dollars will help take the sting out of this reversal of fortunes.
The problem with that ‘theory’, or the theory of the US economy ‘recovering’ or “doing well” is that the number of employed people continues to drop despite the alleged job creation. Compensation isn’t growing either, which is another big problem. So doubtful that many Canadians will be welcome down there since they can’t even take care of their own.
The central bank is not on hold ‘for a long, long time.’ Stop being extreme. — Garth
the fed wont be raising in 2015 either, their camp is already talking about delaying into the fall , which will drag into 2016, madame cleo is lying to you my friend stop calling those 1 900 numbers.
In more positive news, the Financial Times thinks our Canadian job numbers far outshine the US numbers:
http://ftalphaville.ft.com/2015/01/09/2084132/canadian-job-market-still-outshining-the-us/
“US triumphalists who focus on faster growth rates or lower headline unemployment rates should keep this […] in mind. Canadians, on the other hand, may want to stand a little taller — unless the job engines in the west start to stutter.”
I think they’re calling you a US triumphalist.
Garth said: “…Canadian dollar… It finished the week at just a bit over 84 cents US, and has shed 9% of its value in the past year.”
I just updated my CAD housing in USD chart:
http://www.chpc.biz/canadian-housing-in-usd.html
In December 2014 the CAD USD spread continued to widen and an average priced single family detached house in the hot metros of Vancouver, Calgary and Toronto are now 13% cheaper if purchased in USD as opposed to CAD.
At the March 2009 Pit of Gloom, prices were 21% cheaper in USD.
I found this blog post oddly comforting – like listening to sad songs after the breakup.
I wonder if LH has assessed his CO1/CO2 portfolio’s sensitivities for duration and convexity wrt to interest rates.
I’ve the Derivatives designation but no application thereof never working in fixed income space.
Bearded old goat?!
Yes, Calgary prices down 2%… two days ago it was 6.7%, what a miraculous recovery! not. this is why sample size is important.
Then there’s the bond market which isn’t expecting a hike any time soon.
I dunno, taking everything in consideration I just don’t see any big changes yet. Even the drop in oil is being mitigated somewhat by the low dollar.
23 A Yank in BC on 01.09.15 at 8:05 pm
One might ask a question here. Why is the Canadian economy so reliant on commodities in general, and crude oil in particular? Why aren’t things more diversified?
====================
One reason is that Canada is a long thin ribbon of 30 million people along the US border, sort of like a horizontal Chile. The US has an integrated market of 300 million people permitting huge manufacturing economies of scale. Most places in Canada are closer to a major US distribution center than they are to another major Canadian city so it is both cheaper to make stuff in the US and cheaper to deliver it across the border. Canadians can and do compete on high value added technology goods, software and services but not on consumer manufactures.
#23 A Yank in BC:
“One might ask a question here. Why is the Canadian economy so reliant on commodities in general, and crude oil in particular? Why aren’t things more diversified?”
I dunno. Could it be because we’re a resource-rich country with a (relatively) high standard of living and open trade borders with other countries?
Could it be that government policy hasn’t done much to help such diversity?
Could it be that some business owners in Canada have the exit plan to sell their business and retire to Florida or Thailand?
We’re a bunch of entitled, lazy, aging slackers?
A conspiracy by the lizard overlords?
Canadian and US central banks will not increase Interest rate. These are democratic countries and these economies will behave just like Japan for years and years. Canada needs drastic but democratically unpopular policy measures (to recover and then strengthen the economy) which no government will like to pursue.
Brian Ripley – what difference does it make when most ppl get paid in Cad$$ ?
if you priced it in roubles, Canadian housing would look awesome
I for one will never accept that in one week our host has gone from fetching and manly to depressing and mildly addictive.
A reasonable read on predicted things to come in the Alberta job market:
http://www.edmontonjournal.com/business/energy-resources/Layoff+fears+loom+energy+sector+despite/10716394/story.html?__lsa=0585-f926
In another article, Cenovus and CNRL stated they intend to retain current staffing levels. Nonsense. Were they to state that layoffs were around the corner, it would not exactly help the esprit de corps.
Retired Boomer – Alberta’s frac sand is imported, in the main, from the US. So it is not just the likely decline in the drilling of tight or shale wells down there that will affect how often you sing “I hear the train a comin…”
Also, remember that when there is a gold rush, it is not the miners who make the money. It is the businesses that sell picks and shovels that get rich. Caterpillar, US Steel, fabrication plants. Speaking of fabrication, the biggest single module ever to arrive up here is coming up Highway 63 through Ft. McM tonight for the Suncor Fort Hills mine at 30 km per hour. It was made in Oxbow, Sask. Modzilla redux.
“Carthago delenda est!”
“Carthage must be destroyed” – Marcus Porcius Cato (234 – 149 BC)
Hate to see the value of my condo go down, but for the sake of our kids, for the sake of Canadian economy on the long run, this Real Estate Carthage must be destroyed!
Interest rates are not going to rise…. on either side of the border.
You said the same thing last year; it didn’t happen.
[…] Source: http://www.greaterfool.ca/2015/01/09/careful-what-you-wish-for-5/ […]
Hi
I have not posted in a really long time.
In Japan the average includes the greater Tokyo area. While in that area prices have gone up and they have inched up in the other two areas (Osaka and Nagoya) most areas are still falling. Yet living here (I have been here for 20 years in Kobe) things still seem stable on a day to day basis. Though, the debt levels show that the writing is on the wall for the future. Working in higher education (as an Associate Professor) the dramatic decline in student population is amazing to see on a year by year basis.
“Economists had been expecting a big jump in employment, which says a lot.”
Says a lot alright?
Either they have been
1. drinking the kool aid
2. forced to print the kool aid articles
3. are incompetent in their jobs (appointed through the old boys club and probably shouldn’t be in the position in the first place).
OR ??? just plain not grounded in current conditions.
Time to get competent people running our public institutions not the other guys/gals.
One has to wonder!
Of course
“IT has endless shortage of normal people. Even in Canada, duh.
Situation with IT in US though is beyond wildest imagination.”
Are you kidding? IT is amongst the most glutted profession (or cluster of professions) there is in the world right now. Even basic jobs are getting 50-100 applications, and IT jobs with brand-name companies can receive thousands of applications. Even high-spec professionals can go years without an interview if they happen to be unemployed in the sector. The problem with all the people displaced from Nortel and other tech companies in Canada is, over a decade, nowhere near resolved, and most in IT just struggle to keep their jobs, nevermind actually obtain raises to keep up with the cost of living.
Andrew Woburn keeps knocking it out of the park with an economy of style in his writing. Many thanks.
But we’ll never hear H criticizing our oil buddies. We’re living in a democracy, wink wink. Look at what he stands for.
I’m sure this week’s performance increased his poll numbers. Rational actors.
http://www.cbc.ca/news/canada/montreal/raif-badawi-flogged-in-saudi-arabia-for-activism-amnesty-international-says-1.2895392
50 Million Yen is still half million canadian!
Been a reader of this blog for 4-5 years and first time I wanted to post something.
Yesterday I heard a co-worker talk about how he currently live with his girlfriend’s parents. He then said that he is saving up money with his girlfriend to buy “an overpriced condo in downtown Toronto.” And he said that bit with a rather cheeky smile.
So it seems like there are definitely people out there who realize how overpriced RE is in Toronto, but continue to buy into them and do nothing else about it. It’s definitely all about the emotions!
Oh, and fun fact: we both work for a residential construction company. Yep, I know I’m going to have to bail out of this industry soon.
Hi Garth.
How much do you think our loonie will get slaughtered in the next 1 year that the rates are staying put ?
Btw – I always new rates were not going up in Canada in the foreseeable future.
One might ask a question here. Why is the Canadian economy so reliant on commodities in general, and crude oil in particular? Why aren’t things more diversified?
In Canada, we really don’t like taking risks. Successive series’ of central bank governors have raised interest rates far too quickly, starving the economy of the capital needed for speculative investment and organic commercialization of products. An entire generation of entrepreneurs has grown up with the belief, based in evidence, that in order to obtain funding or a reasonable sale valuation for their company, that they need to move to the United States as soon as possible. Additionally, there is still a lot of socialism/communism embedded into the way that government operates, for which none of the mainstream parties are committed to tackling (the Reform Party had some great ideas, but it was killed dead and the current government has abandoned most of its tenets).
After a while, it becomes a self-fulfilling prophecy. Risk isn’t rewarded in Canada (heck, on the stock market, there’s been no equity risk premium for the past 35 years!!), hence, people aren’t willing to take risks, and so on and so forth. Lately with how badly private sector compensation has lagged the public sector, we aren’t even seeing the top grads aspire for private sector jobs (which mostly don’t exist, but that’s another story!). The collapse in housing prices might shift the environment back to legitimate business risk taking and an acceptable realized equity premium, but the down-cycle has been fairly significant.
“How much do you think our loonie will get slaughtered in the next 1 year that the rates are staying put ?
Btw – I always new rates were not going up in Canada in the foreseeable future.”
I personally believe the loonie will be back at par soon enough, as oil finds its bottom and deflation sets in. Rate hikes are not needed to strengthen the Canadian dollar. Only a downturn in domestic consumption caused by housing and consumer debt deflation.
The US housing bubble, which has been partially reflated, is far smaller in comparison, so they’re far closer to a weaker USD$ and rate hikes than Canada is.
Any news on Edmonton? The local board says house price went up and thst is where they will continue to go.
Good to see Garth is coming around to the idea that the BoC is going to be “on hold” for a long, long time to come. While credit-worthiness increasingly will be the issue, particularly as house prices continue their decline.
—————————
Canada is a tiny economy and a price taker when it comes to interest rates – we only control rates to the extent the world bond market lets us.
If the US starts to increase rates it puts pressure on rates around the world – you either pay more interest on your bonds or let your currency adjust down.
So for the BOC defending the value of the Canadian dollar will become an issue – nothing worse than a 70 cent dollar in an election year. (Well actually a housing meltdown might be worse.)
I agree with #18 – Sue.
Other than lower retail gas prices which might increase discretionary spending for consumers ( when they should be paying down their debt, I might add..) how will Ontario become the new economic engine of the country? I am having trouble reading this in the tea leaves.. Some economists also say that housing in the US is not recovering due to disenchanted millennials who are skeptical of homeownership and who have too much student debt. There is just so much drama going on in the world these days it’s hard to know which horse to bet on. Where is the next Seabiscuit?
Yes I’m sensing from you bastards a confident marshmallows bon fire, basement dweller happy dance featuring the fat lady…
Not going to happen in 416
I’m pissed, after a dental visit, were I lied said I dident drive in , give me the gas, allergic to the freeze neddle, an other lie.
I decided to drive to Senica in Salamenca to destroy some crab legs. I fought a crazy snow storm, taken all the back roads cause highways were closed.
Due to low vacancy rates we’ve shut down the buffet… Bastard, I risked my life for crab…
I demanded the presidential suit…
I got it…… Only a Smoking Man can pull a move like that….
Douchebank is alarmed! We are in a mess. 63% overvalued housing. We owe 1.63$ to every buck we make and oil is apparently whatever now.
Now what happens? Serious question. Does it violently blow up, or just fart out of a rip in the gas bag for months?
What happens to various types of jobs? Am I going to be selling panda bear meat out of a suitcase at the greyhound terminal again? Will my daughter be able to stay in school and finish her degree in embalming?
Why does some German bank jerk always come along and scare everyone just when things are going wrong?
Let people fail in peace for Pete’s sake. Everything’s fine! It’s snowing in the Middle East, kangaroos are melting to the outback, kids in diapers are holding up the Kwicky Mart. What the hell is wrong with that?
Don’t judge “our way of life” just because were in a waltz of death with Math whilst inextricably financially linked to all other economies. It’s hurtful, like being stared at for no other reason than barfing a gut load of circus doughnuts on the pirate ship ride. It’s not fair.
Whatever you are saving at the pump is likely being offset by the higher cost of imports due to the $0.85 dollar.
#43 “most in IT just struggle to keep their jobs, nevermind actually obtain raises to keep up with the cost of living.”
Whatever you’re smoking – puff puff pass dude…
“Speaking of jobs, these number suck. The economy lost 58,000 part-time positions last month, which wiped out all the new jobs created. The net result was that 4,300 fewer people are working than a month ago, and this comes atop a loss of 10,700 jobs in November. ”
Does anyone really believe these stats? Job losses? Really? There is a skills shortage in Canada. Because of the booming job market, a new Express Entry Immigration Program has been introduced by the government. There is a draw for this ‘job based’ program on January 26. I believe there are 40,000 applications being accepted that day (means 40,000 job openings).
http://www.cic.gc.ca/english/express-entry/draws.asp
It means nothing of the sort. The draw is to get into a pool of names from which some will be admitted based on the matching of skills and openings. — Garth
I think the gas us still going, mix in some pino grezo, a few hits of JD honey.. I’m mm….
Through on the ear buds, Handsome Family, weightless again,, it’s got a good beat, so I’m pacing the the casino floor, my left heal hits the carpet with every, clang of the symbols in that song..
A man, a Smoking Man getting weird looks…. No other place to be..
I love life…
lower interest rates in Japan are due to the huge debt, BOY (bank of japan) buys ALL the government debt.
And there is no deflation in Japan these days but some severe inflation due to Yen free fall.
This is what is coming – inflation, zero interest rates. Due to debt.
“It means nothing of the sort. The draw is to get into a pool of names from which some will be admitted based on the matching of skills and openings. — Garth”
With all due respect Garth,
To get into this pool of candidates, you need a job offer in the form of a letter and commitment from an employer. This job offer is worth 600 of the total 1200 points when you are ranked.
For example, say 75,000 people submit applications into the program each with job offers. This quarter on Jan 26, the government will select 40,000 applicants to come to Canada.
So out of the 75,000 job offers, 40,000 will be filled this quarter. So are these jobs not counted by Stats Canada??
Chum for Alberta Doomers
For those wanting more evidence that Alberta house prices are falling or will fall. (For those on this blog that are not in that camp, my apologies to both of you.)
I spoke to a Filipino lady working at a Subway sandwich shop. I brought up the topic of Temporary foreign workers having to leave Canada (She herself has been in the county seven years and is in the process of getting citizenship).
She said she knew of a number of TFWs who are being sent back to the Philippines and who in the process are walking away from credit card debt, car loans and even mortgages. And who could blame them for walking away from the debt in that circumstance? Maybe the last charge on their credit card will be the plane ticket home!
Anyhow, all else equal that would put a bit more pressure to the downside on home prices. And sure not many TFWs own homes, but for sure they all lived someplace and if they get sent home (and are not replaced) that pushes vacancy rates up which directionally would push down on home prices. And banks that get stiffed on credit card and car loans start to tighten up on lending standards.
I was surprised to learn that China taxes its citizens on their world income just like the US. The New York Times reports:
China Wants Taxes Paid by Citizens Living Afar
“China’s tax officials are now demanding that citizens start reporting exactly how much money they earn overseas.
In asking for this information, national and municipal tax agencies in China are quietly beginning to enforce a little-known and widely ignored regulation: Citizens and companies must pay domestic taxes on their entire worldwide incomes, not just on what they earn in China.”
http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html
Undoubtedly tax enforcement is another powerful hammer in China’s anti-corruption campaign, especially since other governments are likely to see it as in their interest to share tax information. This is not helpful to high end Vancouver R/E prices in the longer term.
Does anyone have recommendatons for ETFs or cocompanies to make up the 83% of my portfolio that’s supposed to be non Canadian as Garth suggests?
I said 17% of the growth portion, not of the entire portfolio. Most of the fixed-income is maple. — Garth
#56 Bobs ur uncle on 01.09.15 at 9:53 pm
#43 “most in IT just struggle to keep their jobs, nevermind actually obtain raises to keep up with the cost of living.”
Whatever you’re smoking – puff puff pass dude…
……..
Most IT dudes are useless, I keep trying to get fired, before my contract renal, I demand a 100% increase, target, 50%..i got it… And sadly every dime goes to the Treasury of the Canadian government.
Shit you need to do to keep yourself from drinking every waking moment..
I love all the, Indian guys at the tax farm, they don’t solve problems,, they just forward them to the incredible Smoking Man…. Who’s solves them all..
It’s mostly marketing, I have a shit load of buddy’s, smart buddies who are good who solve the problem, I just take credit..
Not fair, that’s life.. They all have a shit load of obedience certificates… But no brains..
There was a study recently done.. The Schooled are the leased likely to ask for a raise.
The worced were shrinks… They never ask for one…
Again my point, Anyone taking up shrinkology, screwed up, they take the course to find out why…
Many many excellent points in the blog tonight. Low rates are not the sign of a healthy economy. They imply that credit cannot expand because the landscape is saturated with debt. Central bankers would love to be able to raise rates in order to give themselves some wiggle room during the next recession. They just can’t. After a certain point when rates get too low risk goes vertical. The monetary equivalent of driving down an icy mountain road with no brakes. If the bond market forces a tiny rate increase from 1% to 2% it would be Armageddon. 1% sounds like nothing but it represents a near doubling of the cash flow required to service the debt for a levered to the gills business or house virgin. Not that we have any of those in Canada (sarcasm off). I hate to say it but this has the makings of a train wreck.
“Canada is a tiny economy and a price taker when it comes to interest rates – we only control rates to the extent the world bond market lets us.”
I disagree. Canada controls its own currency, and investors do not look for higher interest rates — they look for price stability, and the ability to ultimately convert their currency into goods and services. Canada has built a robust series of export-related industries to do this, particularly in the resources sector, so the Canadian dollar should naturally rise over time compared with countries which are chronic long-term net importers (ie: USA).
Yes it is true that currency traders can whip the Canadian dollar around quite easily, and that’s exactly what they’re doing at the moment. But in the end, fundamentals always win out, and fundamentally the Canadian dollar is one of the stronger currencies in the industrialized world.
Rate hikes, IMHO, would be an admission of rising domestic inflation. And inflation is always, by definition, bad for the value of a currency. As it stands, deflation is the very serious problem in Canada and just watch as it gets much worse in the weeks/months ahead, especially as everyone gets worried about their future/jobs/retirements and starts pulling back on the spending.
#58 Mr Stats
these are the people that will take our jobs for less money with no commitment to Canada.
Welcome to harperland.
You mean the people who risk all to come here, as opposed to the home-grown whiners? — Garth
If you want to make Garth happy, then cheer for the US economy and repeat after me!
“U.S.A! U.S.A! U.S.A! U.S.A! U.S.A!”
Who will win the market tug of war? The bulls or the bears?
I told you this would happen. It did. — Garth
Just checked out skilled/labour adds in Craigslist Vancouver for the first time in awhile.
Lots of want adds. Clearly this was letting go of part time seasonal’s and hiring full time labour for the spring ramp up.
““most in IT just struggle to keep their jobs, nevermind actually obtain raises to keep up with the cost of living.”
Whatever you’re smoking – puff puff pass dude…
“
Not smoking anything. The IT job market is abysmal. I get emails looking for new grads for literally $13/hour every week or two now, and little else. IT salaries mostly haven’t advanced in the past 15 years either.
#50 Mark
loonie will go to seventy something pretty soon,
based on level of debt Canada is the closest candidate to follow Japan on the path of high inflation (dollar down 10 % in very short time frame) and zero interest rates. And the loonie is not the world reserve currency.
US will be OK, we are screwed.
Oil Supply and Demand and Prices
In Economics 101 we learned that as prices drop the quantity supplied to the market will also drop and demand will rise. We learned that supply and demand are always equal and that the price adjusts to make it so.
But that was, I believe, at equilibrium.
Someone here mentioned that the actual reaction of suppliers to lower prices has been to INCREASE supply and production. And that is understandable. If the price drops by half you need to produce twice as much to maintain your revenue.
If you have a product that has a low marginal cost of production and you can ramp up production you might do that in reaction to lower prices. Though that does beg the question why you did not already ramp up at the higher price. Well perhaps you were not as desperate at that time.
The point is lower prices WILL lead to lower supply but it could take a while.
I recall some company announced they will cut back on capital spending from about $1.6 billion to about $1.3 billion. Another would cut back to “just” $750 million. Well that is still a heck of a lot of investment. Maybe the end game will be when many oil companies announce they will cut out ALL discretionary capital spending. If that happens, then things would be ugly in Alberta. So far, we are miles from that. But who knows.
“Whatever you are saving at the pump is likely being offset by the higher cost of imports due to the $0.85 dollar.”
What higher cost of imports? Prices are down in the US as well as the economy continues to weaken. And transportation, a big part of the cost of importing goods to Canada, is obviously cheaper as well.
The Christmas sales were a disaster. A lot of inventory still has to be blown out. China and Europe are likely in consumer price deflation at this point. The CAD$ might be falling, albeit temporary, but don’t look for it to show up in higher prices as the pricing power just isn’t there. This could very well be the straw that breaks a few marginal retaillers’ backs.
BE CAREFUL WHAT YOU PREDICT
The world has a way of being unpredictable.
Greetings from Quebec, where it costs 3k to heat your house up for the winter. Looking back at the mere 5 years where Canada was elevated above the U.S., I’m thankful that I was able to do a few things right thanks to our CAD being at par:
1) Take some really nice, cheap vacations
2) Invest in the US and make $ on my US funds
3) Stock up on cheap clothes/material goods
4) Shop at Target in Canada before they leave
5) Rent and save money on Hydro/property tax, etc. and stay out of debt
Well, I feel like 2015 is the beginning of austerity for all of us. For every beginning has an end and every end has a beginning.
I am going to shut up in a minute. Just one more point. This blog – great-an other addiction for this washed up counsel. When this blog ends and a detox centre opens for us K9s, I want to join Steve and SM at the daily lunch of fried baloney, eggs and gravy.
Never seen so many so interested in interest rates
Definite sign of some heavy debt out there
the beginning of a very rough time in this country.
I for one will delay buying another year or two if my lady agrees
Canada has experienced a classic but historic debt bubble. It will end in tears. No doubt about it. Canada is a neo liberal heaven.
My bet is on a short term pop up in US stocks followed by a 10-20% drop and then in late 2015, as the fed delays rate rises again and again, the greatest U.S. stock bubble of all time as money panics out of Europe and Japan and bonds. Canada’s market could offer some bargains by mid year. Then after the major stock bubble, a global catastrophic currency and bond market collapse 2017-2020
Pity the recent homeDEBTRENTER
In Kanadstan
But we will survive and come back better. It will be an ugly road though.
#36 Montellino “Brian Ripley – what difference does it make when most ppl get paid in Cad$$ ?”
re: my post at #28
The chart of Vancouver, Calgary and Toronto SFDs being 13% cheaper if purchased in USD as opposed to CAD is just a way to express the widening spread developing in the USD/CAD.
The effect will be that Canadian householders earning CAD will be spending less of them because a lot of the stuff we buy is priced in USD. (you already notice it in the grocery store)
Our spending is someone else’s income. As we spend less (due to widening FX spread & aging demographics etal), we begin to change our view as to what has value in our CAD.
Those $600-$800-$1000 per sq.ft. condos will look much less attractive than when the USD/CAD spread was narrow.
A rising US Dollar Index will change sentiment globally and force a lot of short covering. A lot of global debt has been created in USD and has to be repaid in kind.
Deflating commodity prices and a rising USD will have profound effects in our Canadian psyche and our pocket books.
Perhaps we will see more U.S. buyers of Canadian real estate this year.
Looking at my Vancouver housing chart, I suggest the high end will be the first sector to change its sentiment on value:
http://www.chpc.biz/vancouver-housing.html
The high end may have money to spare, but they also have accountants, paid advice and a network of wealthy associates on their speed dials (sentiment changers) and they are a lot more mobile than the rest of us in the trenches.
#63 Mark on 01.09.15 at 10:16 pm
““most in IT just struggle to keep their jobs, nevermind actually obtain raises to keep up with the cost of living.”
Whatever you’re smoking – puff puff pass dude…
“
Not smoking anything. The IT job market is abysmal. I get emails looking for new grads for literally $13/hour every week or two now, and little else. IT salaries mostly haven’t advanced in the past 15 years either.
……
Grads don’t know shit, they are not even worth 1 dollar an hour,, if your a highering… Offer them 100 bucks an hour if they can hack your servers…
Never found one, that was even a challenge…
But I went to the university of Google.. Not, university of bend over bitch and give me 100k, and watch your mouth.
#21 Shawn Allen
…
Also one does not need to catch the exact bottom. One could take a small position in oil stocks now and simply buy more if the price keeps dropping. By being patient and buying slowly over time, things are likely to work out well. …
==================
Finally, someone that gets it!!!
Booming U.S. job growth yet the labour force participation rate keeps falling?
http://data.bls.gov/timeseries/LNS11300000
Ever heard of demographics? — Garth
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Garth/Blog Dogs
We’re in the middle of trying to balance our portfolio at 60%/40%. Retirement is not that far away. Do you recommend including the NPV of our CPP as “fixed”?
Thanks in advance for any input,
CO
If you have to include your CPP in your portfolio, you’re in big trouble. — Garth
“The effect will be that Canadian householders earning CAD will be spending less of them because a lot of the stuff we buy is priced in USD. (you already notice it in the grocery store)”
No, not noticing anything of the sort in the grocery store. Actually a lot of stuff appears to be getting cheaper, especially premium foods, as the demand just isn’t there and competition is more significant.
Just because something might be ‘priced’ in USD (which is, itself, a fallacy — anything can be priced in any currency you want, there is no such thing as any good that is exclusively “priced in USD$”) doesn’t mean that its price remains static. Especially when demand is down. Additionally, transportation costs are a significant chunk of the price of putting goods on the shelves of Canadians, and we know that the price of transportation is dropping like a rock right now along with fuel.
#50 Mark
There is no way the Canadian dollar is going to par any time soon. Money is flowing to the U.S. from all corners of the globe. That’s driving up the U.S. dollar and driving down the yield on U.S. bonds. If the U.S. raises rate it will only accelerate the inflows of cash. Hopefully, a lower Canadian dollar will kick-start the economy. So, sell Canada and buy the U.S. I wonder where I’ve heard that before.
@ #55 Steve
Blows up violently.
BTW, keep’em coming :) You should blog or write a book. Although I suspect you do something like that IRL.
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“Booming U.S. job growth yet the labour force participation rate keeps falling?”
Pretty hard to argue that its even job growth. If it were truly a demographic driven shift, then we wouldn’t be hearing, constantly, of employers receiving thousands of job applications for a single job. We wouldn’t be hearing of college grads unemployed on a significant basis. Demographics just don’t explain it, and would only explain a reduction in the participation rate if, and only if, unemployment were low and demographics were a legitimate constraint on the size of the available work force.
As it stands, there’s no growth in wages. The only alleged growth in employment is in low-end service sector positions. Life is not getting better for most workers. The dreadful situation in the labour market in play for much of the past 10-15 years is not meaningfully turning around, and the US is staring straight into a second round of a housing and stock market abyss.
You are abysmally wrong. Net US employment growth for 2014 was 2.95 million. — Garth
A Friday night delete, only Gartho knows.. One to the right, said, ya, one to the left reluctantly said yes..
Tonights going to be a good good night, I got a feeling…
“There is no way the Canadian dollar is going to par any time soon. Money is flowing to the U.S. from all corners of the globe. That’s driving up the U.S. dollar and driving down the yield on U.S. bonds.”
That’s been the trend for the past few years, but for how much longer can it go on? Do you really want to chase a dying trend, or find something that actually isn’t overly played out?
If the U.S. raises rate it will only accelerate the inflows of cash.
Rates rise because of inflation. Now who exactly wants to invest in a currency that is devaluing? The US is attracting capital precisely because it has been able to, thus far, maintain ZIRP without raising rates. As rates rise, capital will likely flee the US.
Hopefully, a lower Canadian dollar will kick-start the economy.
Doubtful. The Canadian economy has an enormous amount of deflation ahead of it, and it is likely that Canada will have to engage in USA-style QE and ZIRP for many, many years to come. I personally fear the BoC is way behind the curve in recognizing the extent of deflation in Canada’s future, especially since so much future consumption has been pledged, as household debt, to the lenders. Lenders who, as a group, generally are not big consumers.
So, sell Canada and buy the U.S. I wonder where I’ve heard that before.”
If you want to make money, doing the opposite, but staying well clear of overvalued RE and bonds in Canada, would be a good idea.
LOL!
Train wreck. Perfect storm.
Oil Price Slump. Falling Canadian Dollar. USA recovery. Interest rates going up. Epic consumer debt in Canada. $1,000,000 SFHs. 5% down. Unemployment rising. Deflation.
Ha ha ha…
LOL!
We will be the laughing stock of the world for years to come.
Ha ha ha…
Gartho must be drinking JD tonight it brings out aggression, beilive I know.
The satisfaction of God like power, hum,
Garth doesn’t just press the delete button, he’s got a gavel, he raises it above his head when he gets in this state..
Decides,, your post lives,, yours…. Boom it comes crashing down..
Booze is so cool
..
Lots of talk about IT folks today, but last I looked it was still a pretty good profession. Not quite as good as engineering, but then what is?
But then I suppose, as Bill Gates once said, “You have to be very careful who you let write code.” And this coming from the man who crippled us with Windows Vista and Excel 2003. Sheesh. Follow your own advice Bill!
Anyway, I think IT folks like DBA’s have no worries. It’s all the jobs they are eliminating with their fancy programs I would be worried about.
#91 Anon
I hope it’s a long protracted event. Like slowly lowering yourself into lava. I’m a metal fabricator. I failed English in high shool. Unfortunately I work in aviation and I’m slightly concerned about all of this.
Aviation is a weird bird. It can be a dead end, or be so overloaded you want to quit. If I suggested four hundred years ago that man could fly I would have been burnt at the stake with my little airplane chained to my chest. Now if I suggest man can’t fly, my boss calls me upstairs and freaks out. I can’t win.
Well just have to bide our time. This time next year I could be dead. Or independently wealthy. Or dead. Anything could crappen
Attention, to you two dead terrorists in France..
No virgins yet, what no God… Man did you f-ks bet wrong, your memories, your beliefs, your aspersions, just good worm food now..
Should have followed the Smoking Man, you would still be alive, taking loot from idiots, Short term rental bliss..
But no, your beilive system, the what ever, the who got to you, still alive, and you’re worm food..
That’s nature….
As it stands, there’s no growth in wages. The only alleged growth in employment is in low-end service sector positions. Life is not getting better for most workers. The dreadful situation in the labour market in play for much of the past 10-15 years is not meaningfully turning around, and the US is staring straight into a second round of a housing and stock market abyss.
You are abysmally wrong. Net US employment growth for 2014 was 2.95 million. — Garth
+++++++++++++++++++++++++++++
Chinese Jobs – Making Iphones, laptops, hi tech clothing and back packs, washers and dryers, boats and cars, watches and tablets – lots of high tech stuff.
US Jobs – burger flipper, coffee server, missile technician, tank technician, fighter BOMBER technician, mexican food server, walmart shelf stocker – high tech stuff if you like killing people in the middle east otherwise shit jobs.
Moronic. — Garth
Shawn Allen : I spoke to a Filipino lady
She said she knew of a number of TFWs who are being sent back to the Philippines and who in the process are walking away from credit card debt, car loans and even mortgages. And who could blame them for walking away from the debt in that circumstance? Maybe the last charge on their credit card will be the plane ticket home!
pretty funny
Sideshow Rob : Low rates are not the sign of a healthy economy. They imply that credit cannot expand because the landscape is saturated with debt.
If the bond market forces a tiny rate increase from 1% to 2% it would be Armageddon. 1% sounds like nothing but it represents a near doubling of the cash flow required to service the debt for a levered to the gills business or house virgin.
I hate to say it but this has the makings of a train wreck.
I hate to say it but a prolonged period of low interest rates is a sign that the Bank of Canada is scared. Very scared.
train wreak, yeah it could be
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#68 Sheane Wallace on 01.09.15 at 10:14 pm
#58 Mr Stats
these are the people that will take our jobs for less money with no commitment to Canada.
Welcome to harperland.
You mean the people who risk all to come here, as opposed to the home-grown whiners? — Garth
__________________________________________
I live in Vancouver. People come here so they will not get bombed or shot with American, British or Canadian bombs and bullets. They have told me this. And it’s fair that they take our jobs? Pretty hard to phone a “govt office” and not get a $35/hour accent meanwhile homegrown person need not apply. Come to Vancouver and TALK to people sometime Garth.
You sound like a bigot as well as a moron. Go dump on someone else’s blog. — Garth
so, Average home price in Japan 50.7M Yen
= CAD$503,452
… Not too Shabby
Japan is 3% the physical size of Canada and has 100 million more people. But the point is (of course) that 2015 house prices are at 1992 levels. Where did I put my crayons? — Garth
I drove to the east side of Montreal today to buy some performance diesel parts for my F250.
The shop that had my parts was a father/son(fils de pere) affair who dabbled in all sorts of machinery. On the shop floor were a matching pair of shiny Case 821 wheel loaders. These are one of the largest of this type of construction machine that Case makes and had been purchased by bid directly from a European bank who’s name escapes me now.
Both loaders were repo’d, one in Spain and the other in Belgium. Even with shipping, the price of all this kit was half of N. American comparables.
Seeing this makes me think that the Euro zone is still living like it is 2009.
#49 Mark on 01.09.15 at 9:34 pm
In Canada, we really don’t like taking risks.
========================
I’m not sure I would agree that Canadians are really all that pusillanimous. First of all the settling and development of Canada involved huge personal and business risks such as building a transcontinental railway with 19th century technology. It may be that our long established reputation for caution reflected our ingrained awareness of the constant potential for disaster.
Most people in most societies are not financial risk takers. Those Canadians who were adventurous were always welcome in the US and moving there was easy, so they did. Why mess around in a tiny,logistical nightmare of a market when there was so much potential less than a hundred miles to the south. Younger dogs might find this hard to believe but we used to drive into the US all the time on a whim with no identification. As soon as the border guards heard your Canadian accent, they waved you through. If you could get a job there, you just went. There was virtually no border.
The analogy I suggest is Scotland and England. Scots were supreme risk takers, not least in building Canada. The character “Scotty” from Star Trek is a homage to all the Scottish engineers who travelled the world in the age of steamships. Yet Scotland doesn’t have a strong diversified economy (especially after the oil meltdown). So what happened to all the aggressive, entrepreneurial Scots. They go to London, because they can. If they had to stay at home to make it like, say, Finns, Scotland would have a very different sort of economy.
#96 Visitor 9
so, Average home price in Japan 50.7M Yen
= CAD$503,452
… Not too Shabby
—————————-
Traveled around Japan last March and sent a couple of comments here to this blog.
There are central areas of Tokyo such as near the Asahi Brewery headquarters in the Asakusa where modern condos in the 600 ‘ range can be had for $500,000 CAD.
On the west side of the isle of Honshu, a lovely little town called Tokuyama, which is much like an interior BC town, has modern homes on 1/2 acre lots for $350,000 CAD.
It astounds me at how people try to compare Canada’s RE prices to Japan’s to justify this moronic bubble we have going.
I’m so hammered, I can’t stand, nytris oxide I’m thinking…
The honey JD a factor… I’m numb, it feels so good.
We should have a national holiday.. Around March 15th….get losers drunk.
Why does that date, keep waking me..
That chart shows that the crude oil price is going to reach $0-$5 by March-April 2015.
Get ready for a free oil economy folks – it’s coming!!
Mark:
I work in the FX dept of a major bank. Sorry Mark, but you know nothing about FX. FYI, CDN-USD has gone down about 10% over the last year while you have been saying the opposite.
Stick to English and Fiction.
#73 Shawn Allen
“Why “Bottom of the Barrel” Oil Prices Won’t Last”
‘A factor that should push oil prices higher is one of the economics profession’s most basic principles—the best solution to the problem of low oil prices is … low prices.’
‘Bottom Line: Enjoy gas at 95 cents a litre or less, but don’t get too comfortable with it.’
http://tinyurl.com/o3z6wyz
———————————————
#75 Shawn Allen – wrt ‘Predictions’
“Low wages, inflation should keep Fed on hold: policymakers”
Slow wage growth and low inflation are prompting two top U.S. Federal Reserve officials to call for deferring interest-rate increases until next year…
http://tinyurl.com/lzrmax4
http://tinyurl.com/klmvsby
This comes up every time US job numbers come in. Apparently, more people working is simply not impressing anyone any more, unless they’re full time 6 figure jobs.
Nobody ever bothers to ask the people who did not have a job last month whether they think they’d be better off without a job, but I think that would rhetorical.
If it’s already been posted sorry to busy to read all.
Global News tonight said Vancouver housing overpriced 63%
My question is why would they air that.
These pumpers of RE.
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Forget the headline. Internals of canadian jobs report are not good. Most hiring in public sector and resources. Most layoffs in manufacturing. Yikes.
Deficits and oil prices could turn those numbers quick.
Error is high on these. So trend is likely more important.
#13 No Canada, No
No shortage of resumes for anything we post. Go figure.
There is definitely a very acute shortage of IT people willing to work for peanuts, which is what is being offered due to viable offshore competition. That just means wages will come down over time, but not too much, because offshoring is not all it’s cracked up to be.
What it does NOT mean, however, that there is a need to blow open the gates for TFWs and H1Bs. Plenty of local talent, both freshly graduated and experienced in anything you wish to do.
94 Smoking Man on 01.09.15 at 10:57 pm
…. one to the left reluctantly said yes
,,,,,,,,,,,,,,,,,,,,l
How the hell can somebody spell “reluctantly ” correctly, yet still spell “least” so horribly wrong at every attempt?
Go smokey!
Ps a short bat-analysis of the current dow and tsx charts please, if you don’t mind. Any spelling is okay.
I see lower highs and lower lows on tsx. Ugly.
Maybe rates will rise before the sun explodes.
OK. I can’t shut up. Hazard of the profession. Lawyers love to hear the sound of their own voices. After all, we get paid to talk.
Can you imagine sitting around a 75 foot Birds Eye Maple boardroom table discussing the Final Investment Decision on pulling the trigger on an $11 billion decision to build an oil sands mine.
60 executives with 240 obedience certificates and the items on the agenda start with:
1. Nature Magazine says our assets are stranded.
2. The Pope hates us.
I’d rather fork a bronc I know nothing about. I am no Larry Mahan and I have been throwed many times. I suppose a $4 million dollar bonus eases the decision.
#93 Mark
That’s interesting. Presumably, these low-end service sector jobs pay minimum wage, or at least below national average. So lets see, fewer full time jobs (which should lower wages) and more part time and service jobs (which should also lower wages), and yet (real) wages are flat for basically the last 35 years? I don’t know how this math works.
Thanks for your weekly insight Garth!
I’m enjoying a lack of stress while the rest of Calgary tanks and fights with their spouse.
http://www.theglobeandmail.com/globe-investor/meet-the-man-whos-selling-canada-short/article11585150/
Also bank of America is shorting Canada.
Thats what you get for keeping those interest rate low. Its too late now, Harper and poloz should of raise the rates 18 months ago to stop the debt frenzy when it was at 140. But now the US is hot hot hot. Canada is done. Keep rates low, stop the real estate bubble from bursting, but kill the dollar and let the hedge fund guy beat the living snot out of the dollar, and government can’t raise funds. unless it raise rates. humm are we different than GREECE.
Or raise the rates, have real estate collapse, which will destablize the dollar. Then the Hedge fund guys will beat the snot out of the dollars
Either way you look at it, its not going to end well. That is why I’m 65% invested in us companies or in american $$$. It was a no brainer. Believe in the charts or believe in a real estate agent, I’ll go with history and statistical charts, not a smoke and mirror sooth sayer
“I drove to the east side of Montreal today to buy some performance diesel parts for my F250.”
——————————————————-
No shit…couple days ago in Abby I saw an F-350 dually with a big chrome Cummings C on the front fender.
Makes me laugh, owning a 03 Dodge Cummings HO 6 spd. pre cat, dually. Yew Ford guy….those things turbos blow up like clock work on six month intervals. There cool trucks, but your better lease em cause their disposable.
Smoking Man…how many have you tipped back tonight? All this talk of JD have you tried 40 creek?
Too bad more people didn’t live within their means and care less about the jones’s…we’d all be so better off. Greed wins. A nest egg is great but don’t underestimate the value in working at some capacity well into retirement, a great supplement to your portfolio. Dementia will take over sooner than later otherwise…
Garth, repeat after me:
US WILL NOT RISE INTEREST RATES ! :)
..unless market FORCE them to.
I drink Finlandia, bottle that you should feel free to send me once the southern gringos are coming with a QE4 or similar by late May (this year :) )
Great blog as usual Garth…thanks for sharing your wisdom, humour and insights ;-) Awesome nightcap!
“Lots of talk about IT folks today, but last I looked it was still a pretty good profession. Not quite as good as engineering, but then what is?”
Calling engineering a ‘good profession’ employment-wise is a pretty big stretch as well. As only 1/3rd of graduates are even able to work in the profession — most of the rest becoming significantly unemployed or underemployed.
http://c.ymcdn.com/sites/www.ospe.on.ca/resource/resmgr/DOC_advocacy/2014_DOC_Crisis_Labour_Marke.pdf
IT, especially at the high end, is even worse. Sure, if you don’t have much invested in your training, and can work for cheap, its still possible to get hired for relatively mundane positions like help desk. But higher-end IT positions that require CS and/or other forms of engineering degrees — the field has been decimated for quite a while now, the result of a combination of collapsing demand, excess supply (*huge* numbers of students chased the bubble 10-15 years ago), and heavy outsourcing.
The RBC fiasco, where high skilled workers saw their jobs outsourced to India, but merely couldn’t walk across the street and find new jobs is just one of many very visible examples of such.
Anyway, I think IT folks like DBA’s have no worries. It’s all the jobs they are eliminating with their fancy programs I would be worried about.
DBA’s are actually some of the most vulnerable positions out there, as the Indian outsourcing firms train DBA’s in Oracle, SAP, etc.-type DBA work by large quantities and actively seek a lot of that work out. With those platforms as commoditized and as standardized as they are, replacing people isn’t perceived to be all that difficult.
Markets go insane before they collapse. The fracking industry managed to monetise a commodity like sand.
http://davidstockmanscontracorner.com/why-the-stock-market-casino-is-dangerous-the-case-of-looney-tunes-in-the-sand-dunes/
One does not have to be a perma bear to realise that the Canadian economy is going to hit some massive air pockets in 2015. Defensive investing is so chi chi.
#83 Mr Frugal:
“#21 Shawn Allen
…
Also one does not need to catch the exact bottom. One could take a small position in oil stocks now and simply buy more if the price keeps dropping. By being patient and buying slowly over time, things are likely to work out well. …
==================
Finally, someone that gets it!!!”
I see absolutely no reason to buy any energy stocks right now. Why waste your time and money. Oil could just as easily go to $20/brl as rebound to $70. There is no trend anymore that can be relied on. When Saudi Arabia starts to constrict volumes to support prices, then pile in energy. Until then, there are more reliable trends to take advantage of.EG US Housing so look at Canadian lumber companies (IFP.T or HWD.T). Another trend is Autos, so look at auto component manufactures (MG.T, LNR.T). The “Internet of Everything” is a good trend, so look at
Chip makers (AVGO.N, SWKS.N, MU.N, NXPI.N, or MEI.N). All of these companies have relatively low forward price earnings coupled with and good growth potential.
Don’t average down, average up!
Garth/Blog Dogs
We’re in the middle of trying to balance our portfolio at 60%/40%. Retirement is not that far away. Do you recommend including the NPV of our CPP as “fixed”?
Thanks in advance for any input,
CO
If you have to include your CPP in your portfolio, you’re in big trouble. — Garth
============
If you receive $1,000 a month in CPP, isn’t this like $240k in preferred shares or a REIT?
Let me rephrase – how do you account for defined benefit pensions in the n60/40 split?
CO
Breath…
The past four decades of globalized economic capacity expansion built the globe up with 500 trillion in assets (buildings, roads, factories, bridges, ports, autos, aircraft, etc).
Deflationary pressures are relative/demographic, cyclical and necessary. Lower bond yields to revalue all asset classes one more time. The EU is about to surprise most.
Hi Garth.
I might be being dumb here, but this is how i understand things – can you please correct me if i’m wrong?
If the feds raise their rates – wouldnt that raise the value of their dollar more, and ours will go down against it even more?
Then with our unemployment rate, etc.. that will also cause our dollar to tank… Which will cause the exchange rates between the 2 countries to get a fairly big gap again 70c to the dollar or lower?
Right so far?
Considering the amount of “base goods” (cant remember the correct name) we get from the states where our inflation rate is calculated from.. Wouldn’t this cause our inflation rate to sky rocket?
Houses deflating, but everyday goods inflating?
If so.. I thought the purpose of the overnight rate was to stave off that sort of inflation (by raising value of our dollar). If this scenario happens, wouldnt they be forced to raise rates here?
(regardless of the rest of the economy?)
Higher rates attract capital and bolster the dollar. — Garth
Unfortunately, there are very, very, few DIY’s who have 20% or less of their growth assets in the Canadian sphere. I suggest that this is the result of four things: first, the broad and stubborn home-bias component to investing; second, using the dividend tax credit as the horse leading the cart rather than what should be the opposite; third, for those seasoned enough to remember, the fading reality of what used to be a 30% maximum foreign content on RRSPs; and finally, not knowing or understanding the value of hedging in reducing the impact of currency risk on foreign investments.
I was very impressed with this Edmonton Realtor’s honest assessment of the real estate market in Edmonton
http://edmontonrealestateblog.com/2015/01/weekly-update-forecast.html/comment-page-1#comment-70711
I wonder what will happen when there are no jobs anywhere for anyone….
“The average price of a new condo is now 50.7 million yen”
So in Canadian dollars that equal to an average price of $500,000…
Japan has no growth, no inflation, aging population, lower gdp per capita, etc… So why is it that Canada’s real estate is overvalued but Japan’s average condo is $500,000 CAD and ours in Canada is closer to $250,000.
Meanwhile you’ve got outfits that Garth quotes all the time talking about Canada being overvalued by 63%?
Can someone explain why Japan isn’t overvalued?
Sure: 3rd biggest economy in the world, 130 million people, size of Nova Scotia. — Garth
#129 RayofLight – Thanks for the tickers to do some research on. I was talking with a co-worker yesterday about ‘The Internet of Everything’ and it does sound quite interesting. Although I have absolutely no interest in being wierd up like that, the herd will and with the herd there is always money to be made. I’ve heard Blackberry also has their fingers in this pie with Ford
But the point is (of course) that 2015 house prices are at 1992 levels.
_______________________________
that is price stability, not deflation.
Japanese CPI has been stable for 20+ years. not deflation.
So, go buy a $500K condo in Tokyo that costs you money to own and has no capital appreciation for 23 years. — Garth
#167 I’m stupid on 01.09.15 at 4:41 pm
Getting screwed over!
I’ve been insured with the same company for 15 years. Last year I hit a patch of ice and went into the guard rail. 5 months later and someone hit my car and took off. Now they won’t insure me. I called around for quotes and it turns out I’m a high risk driver and my premium is going to go up from $2200 a year to $7000 a year.
++++++++++++++++++++++++++++++++
My insurance coverage has a rider that lets me off with first accident, no premium hike. In the winter I drive and old beater and if another driver really pisses me off then I will just ram them with my car. No premium hike.
Honeybooboo
At #104: RealistvsExtremist, you’re so full of sh*t, I can smell your breath through this screen. American do NOT move to Vancouver and take jobs. Did you know that as an Amrican, I am not even permitted to work in Canada unless the role cannot be filled by a Canadian of the same qualification? As a matter of fact, Americans as a group are singled out in Canada with greater restrictions than other groups of people. Believe me, in general Americans do NOT want to nor do they ever move to Canada, especially when looking for work. Statistically, per capita Canadoans move to the U.S. for work at a rate that is SIXTEEN FOLD of Amerocans going your direction. That speaks volumes in itself. Yet, Canadians can and do come to the U.S. with open arms and are welcome to work in what we job or capacity you chose with the proper visa. Such hypocrisy. In fact, I don’t know of a single Amerocan friend living in Canada who even has a job there. They’re retirees if, in fact, they decide to go to Canada at all. Also, the BS comment about bullets flying was quite comical. Where do you idiots come up with this stuff?
@#104 reality vs stupidity
“I live in Vancouver. People come here so they will not get bombed or shot with American, British or Canadian bombs and bullets. They have told me this. And it’s fair that they take our jobs? Pretty hard to phone a “govt office” and not get a $35/hour accent……”
++++++++++++++++++++++++++++++++++++
What in the hell are you babbling about? You live in Vancouver so that makes you an immigration “expert”. Or just a xenophobic lard head. Quit whining about what is the new reality of a global , mobile workforce. People need jobs and are willing to move half way around the world to earn them. Im sure there are plenty of unskilled Saudi ditch diggers that are bitching about the Canadian engineers taking their jobs.
Get educated and then go find a good paying job.
It worked for me.
review this one from 2012
http://www.rollingstone.com/politics/news/the-big-fracking-bubble-the-scam-behind-the-gas-boom-20120301
==========
http://www.therecord.com/news-story/5251191-former-motivational-speaker-fined-in-oil-lease-sales-scheme/
from wiki:
“always remember the weak, meek and ignorant are always good targets.” [72]
http://en.wikipedia.org/wiki/Charles_Keating
Listened to a talk show radio interview yesterday – local RE spokesperson being interviewed on what is ahead for RE prices in Calgary. What a tap dance. Basically the RE spokesperson said oil & gas prices have a six month lag effect on home prices. Did (after much prodding by the interviewer) admit ‘we are moving into a buyer’s market’ but was hugely reluctant to admit prices are dropping now. Held to view pricing would take six or more months to drop & would only drop IF oil & gas prices were still at current levels (or less) six months from now.
Mark and Devore are absolutely correct when it comes to the IT job market.
There is no shortage of talent in Canada or the US. The execs at these companies just don’t want to pay for it, so they cry to the gov’t that there’s a lack of people for these jobs and that they need to import a bunch of them. End result is wage depression and increased unemployment.
I’m in this industry. I see it happen. I also see the results. Quality drops significantly. When the cheap, imported (or off-shored) labour becomes good at their jobs, they realize they’re underpaid and they jump ship or demand higher pay (and get replaced instead by low paid, under-qualified workers). Back to square one.
Nobody seems to care though. We’re all being conditioned to accept shoddy products, poor workmanship, and inferior after-sales service. As long as the price is cheap, people will complain a bit, but nobody will actually do anything about it. Until they do, don’t expect companies to care about paying for highly skilled employees either.
If the exchange rate breaks below 80cents the BoC will have to pay attention. A much weaker C$ is a loosening of monetary conditions and they will have to tighten sooner rather than later because of the inflationary impact of a much weaker dollar.
Sure: 3rd biggest economy in the world, 130 million people, size of Nova Scotia. — Garth
————————————————–
Plus–Don’t forget that much of that land mass is towering granite that is basically impossible to build on. Then there is the matter of being geographically spread north to south from a climate resembling Alaska to one representing Tahiti.
@144
You would think that all those IT guys would buy now dug out all garbage and stupid loopholes and policies they can find and flood internet, to exposed all levels of gov. They dont have to hack the just have to search…
#144 EJ – Its a race to the bottom my friend. I care, but there is little I can do about it other than sink or swim. I prefer to swim and protect my family and loved ones the best I can.
Soft Despotism – Look it up and do a little research, but be warned. Our goevrnments and all their institutions will never look the same again
If it is on the internet, it must be true!
Dana Senagama, a housing market analyst at the Canadian Mortgage and Housing Corporation (CMHC), predicts that houses will continue to be a hot commodity, especially in Toronto, Vancouver and Calgary, where the demand outpaces the supply of affordable homes.
“Ownership is still a favourable option with lending rates as they are now,” says Senagama. She forecasts that there may be a levelling out in late 2015, as mortgage rates are expected to rise.
Interest rate hike: 4 ways Canadians should prepare
But until then, “the market will remain strong,” she says.
Senagama suggests that in some areas, the new Canadian population is driving the housing markets.
“The immigrants who came two to three years ago are now your potential home buyers,” she says. Although immigrants are driving much of the high demand, she says, almost everyone dreams of owning a property in the city.
Even if a house is a tear-down, Senagama says the land in Canada’s largest markets will always retain its value.
Indeed, Arturo and Ivette see home ownership as an investment.
Arturo is imagining how prices will appreciate in neighbourhoods near new subway lines, and believes prices will only continue to rise regardless of interest rates because of the scarcity of land downtown.
Even so, this couple has a strict price ceiling — and that cute west-end house ended up exceeding it, selling over asking at $509,499.
And so their hunt continues.
137 SWL
#129 “RayofLight – Thanks for the tickers to do some research on. I was talking with a co-worker yesterday about ‘The Internet of Everything’ and it does sound quite interesting. Although I have absolutely no interest in being wierd up like that, the herd will and with the herd there is always money to be made. I’ve heard Blackberry also has their fingers in this pie with Ford”
The examples I suggested have Forward Price Earnings (Current Price / 2015 Earnings Est.) below 15, and Long Term Growth of their earnings (LTG) large enough to produce a Price Earnings Growth (PEG) below 1. I use Thomson Reuters for the Earnings projections. Blackberry (BBRY) has relatively poor to negative earnings projected going forward, so I personally would not buy it.
Hey Smoked Meat….ever been sober long enough to watch a MTV series called “Catfish”.
It’s about people who pretend to be someone they are not on the internet.
Surely must sound familiar ?
You babble on about your 34 fans you have accumulated in 5/6 years but the truth is Linda got more fans in one post by calling you a “bumwipe”
The taxman is watching.. http://business.financialpost.com/2015/01/10/how-a-woman-who-flipped-6-properties-in-2-years-fell-afoul-of-the-taxman/
“That’s interesting. Presumably, these low-end service sector jobs pay minimum wage, or at least below national average. So lets see, fewer full time jobs (which should lower wages) and more part time and service jobs (which should also lower wages), and yet (real) wages are flat for basically the last 35 years? I don’t know how this math works.”
A relatively small group of people in the US have, over the past 35 years, received awfully huge raises. Particularly in FIRE, government, and healthcare. Professions that mostly paid average middle class wages, but are now paying upper class wages.
Leaving the rest, as you point out, to fight over an increasingly small pool of scraps. Leading to an overall average of effectively no real wage growth.
The falling Canadian dollar is helping companies compete in the USA.
Sure, it’s startling slowly. The good news is …… We have all the infrastructure in place. Ontario is kinda like a buffet waiting for the guests to arrive.
As oil prices fall, the Canadian dollar falls, Alberta’s economy stumbles and Ontario’s economy grows. Oh. I know, Western Canadian politicians (Federal and Provincial) bristle whenever someone suggested that the oil industry hurt the manufacturing economy of Ontario. Of course, many of them think the World ends at the Manitoba / Ontario border and Ottawa? That’s where the tax thieves live ….. cause, as we all know …. taxes are theft.
At 96 cents to the US dollar, plants were closing on a daily basis. At 84 cents, news of plant closing are much less frequent and the word expansion has returned to the vocabulary of many business owners. I visited a company in Elmira which recently held a job fair. Imagine that! They’re hiring!
Their US export business is up, way up and they needed fabricating staff for a plant expansion. Many of the companies I work with have reported similar increases in exports to the USA.
It was reported on the news Friday that Chrysler (Windsor) needs 200 electricians right now!
I guess this is a clear demonstration that the Bank of America / Merrill Lynch called it right last year. Their report claimed that there was evidence to support the belief that Canadian case of “Dutch Disease”.
So, let’s all support the Ontario economy and buy a house in Windsor. OK, maybe not yet.
@ #140 The American says:
in general Americans do NOT want to nor do they ever move to Canada, especially when looking for work
==========================================
tsk tsk. such hyperbole.
do you know where the largest population of WORKING americans is, outside of america??
right here in calgary. in fact, you make up about 10% of our city’s population
#144 EJ
You just hit my hot spot. Crappy products at whatever cost.
First, EJ I have been wandering this gas bag we call earth for 63 years. I have seen used, and thrown out a lot of consumer items over those years.
Cars, electronics, appliances, furniture clothing yadda yadda. Of all these items that wear out electronics are the single item that irritates me the most, followed by appliances.
Your TV, radios, record players made 20, 30,40,50, even 60 to 70 years ago still have parts available to restore them to new life. 1.Either you need, or know someone with the knowledge to do the work. 2. Be willing to pay the freight.
There is the rub. Who wants an old B&W TV, or a crappy Thompson electronics RCA set from the early 1990’s? That said, there is nothing better than the sound of a good AM/FM table radio from the 50’s or 60’s. Ditto for the record players if you like vinyl. Want to download or CD’s current electronics.
Appliances are rather similar. Newer ones ‘might’ be more energy efficient, but less serviceable.
I would rather pay a premium price for premium quality assuming I can find it new, or find a decent vintage product that it will pay to restore. So what do the retailers offer me? Cheap import garbage. No mfg was immune from putting some planned obsolescence into their goos, then or now.
I just wish we would re-think the mfg of items from cars to appliances, and electronics for our own good!
-RANT over-
“Sure, it’s startling slowly. The good news is …… We have all the infrastructure in place. Ontario is kinda like a buffet waiting for the guests to arrive.”
Only problem is, nobody actually believes the low dollar is here to stay for any significant length of time. Certainly not the bond market. Any economist worth his salt recognizes that debt deflation and a normalization of oil and gas prices back to the mean will, sooner or later, drive the Canadian dollar back up to par and beyond. Without significant new investment in manufacturing, at best, the Ontario manufacturers may be able to run their existing factories a little bit harder, assuming they have any market for their products. But sustainable growth will be difficult.
It takes more than just infrastructure to be competitive. It takes low tax rates, and a favourable labour environment. Neither of which exist in Ontario.
Even in the 1990s, when a so-called manufacturing renaissance occurred, if we dig deep, much of it appeared to be confined to, and the result of the high tech industry. The culmination of a few select Canadian companies having invested heavily in high-end products years earlier, and the market turning extremely in their favour. One relatively small factory in Calgary, for instance, that produced CDMA cell phone base stations and employed a few hundred people at best, contributed over a billion dollars per year to Canada’s trade balance. In that case, Nortel would have sold their heavily-in-demand products to the world no matter what the price of the Canadian dollar was — Nortel had leading products and a virtual monopoly in that sector.
My overall points are, corporations don’t generally act upon short-term trends (ie: a weaker CAD$, largely the result of speculation, not fundamentals), and the matter of inducing manufacturing growth runs far deeper than just having a suppressed Canadian dollar.
#140 The American on 01.10.15 at 11:41 am
At #104: RealistvsExtremist, you’re so full of sh*t, I can smell your breath through this screen. American do NOT move to Vancouver and take jobs. Did you know that as an Amrican, I am not even permitted to work in Canada unless the role cannot be filled by a Canadian of the same qualification?
++++++++++++++++++++++++++++++++++
First of all…..when I said accent…I was not referring to Texas drawl or Boston. I was talking the middle east and other places where bombs and bullet are continually flying.
Second. No your full of shit. With NAFTA you absolutely can work in Canada. You just need to apply for the correct VISA.
Please learn to research.
DELETED
Higher rates attract capital and bolster the dollar. — Garth
Right – so therefor Canadian rates will have to rise, regardless of the rest of the economy? Otherwise we’ll have some quite heavy inflation as the US dollar rises against us?
It was a statement of economic fact.. Two equal economies will see money migrate to where it receives a better return. Duh. — Garth
“If the feds raise their rates – wouldnt that raise the value of their dollar more, and ours will go down against it even more?”
No, a raise by the Fed, either on their own, or forced by the market, would be an admission that inflation is rising. Rising inflation is profoundly negative for a currency, by definition (inflation is the weakening of a currency relative to goods and services).
A theory exists in economics that states that all returns in a given asset class will, adjusted for risk, converge to similar levels. So if the US Fed raises rates, the implication is that the currency will weaken.
Then with our unemployment rate, etc.. that will also cause our dollar to tank… Which will cause the exchange rates between the 2 countries to get a fairly big gap again 70c to the dollar or lower?
Doubtful. If anything, rising US interest rates should be good for the Canadian dollar. Especially as Canada is forced to lower rates and engage in stimulus in response to the significant amount of deflation, particularly in housing and the rest of the currently overheated “consumer economy”.
I know various people will scream up and down claiming that low rates cause currency weakening. To that, I would tell them to look at almost every country over the years that has tried to use higher rates to strengthen their currencies. Invariably, they almost always fail at doing so, and currencies weaken further when the higher rates are applied, as investors in long-term bonds fear devaluation (devaluation necessitated by the high interest expense) and panic out of the currency. The Russian Ruble is a recent example, BTW.
Time to retire, Mark. You have totally lost it. This is by far your most embarrassing and off-base post – in at least four hours. — Garth
Wow the elites have us taking to the streets again expending our energy globally against straw men.
I trust good. I trust evil. Each does exactly as promised.
#JustapositionalSaturdayAfternoonSnark….
#FromTheSamePeopleWhoBroughtYouPhoneHacking…
[UK Independent] – Sunday Style magazine forced to apologise over ‘sexist’ advert that used woman in underwear to advertise intern positions
http://www.independent.co.uk/news/media/sunday-style-magazine-forced-to-apologise-over-sexist-advert-that-used-woman-in-underwear-to-advertise-intern-positions-9969855.html
#What,NoLingerie!?!…
[G&M] – Feds used hundreds of unpaid interns since ‘08; few hired for paid jobs
http://www.theglobeandmail.com/news/politics/feds-used-hundreds-of-unpaid-interns-since-08-few-hired-for-paid-jobs/article22390862/
#”Unique”VancouverStudiosForRent?… #Well,SinceTheCutbacks… #It’sNotLikeTheyWereActuallyUsingThem…
[CBC] – The CBC Vancouver Broadcast Centre is open for your business – feature films, TV series, commercials, music videos, small and large recording sessions, rehearsals, concerts, special events, galas and meetings.
http://www.cbc.ca/productionfacilities/vancouver/#igImgId_17967
#SinophilesFood&BeveragesAlert!… #QuCouldAskForMore!?!,Or… #SomeMenNeverLearn… #JustAskRupert[Murdoch]…
[CBC] – Analysis: Vancouver Mayor Gregor Robertson, Wanting Qu and wanting more
…”Robertson’s office issued a curt statement saying it won’t comment on the mayor’s personal life this week after Early Edition columnist Frances Bula reported an alleged relationship between the mayor and 31-year-old pop star Qu.”…
http://www.cbc.ca/news/canada/british-columbia/vancouver-mayor-gregor-robertson-wanting-qu-and-wanting-more-1.2894517
#Who’sYourGranny?,Or… #Unemployed,BankruptSingleMother&BenefitScrounger… #Granted15MillionMortgageFor’InvestmentProperty’…
[BBC] – Prince Andrew and Sarah Ferguson buy luxury chalet
…”The prince has a modest naval pension and is funded out of his mother’s private income.
His ex-wife once had debts of five million pounds.
Together, they’ve managed to secure a mortgage and buy a Swiss chalet worth millions.”…
http://www.bbc.com/news/uk-england-30759303
#ContextualTittleTatler…
http://www.dailymail.co.uk/femail/article-2018375/Duchess-York-Sarah-Ferguson-cleared-debts-thanks-Prince-Andrew.html
http://www.independent.co.uk/news/fergie-debt-and-the-bank-that-cant-say-no-1324679.html
When Jon Stewart was asked on his show ” What do Americans think about Canadians?” ,the reply was “They Don’t!”
So painful… Mark you really need to get a better understanding of how rates work.
Regarding IT, I have done some hiring recently and I can tell you there is definitely a lot of people out there looking… but 99% are crap. That is the problem with IT, it is relatively easy to get in as there are a lot of entry jobs that don’t require lots of technical knowledge or even language or people skills. But once you require something better it can be tough to find, even if the pay is good.
More and more is on MSM news dudes sporting British Accents..
During the world, Jrs a limey was talking hockey. What a joke..
Yet you never see an anchor sporting a Mississippi, or Louisiana accent..
The perception of, Smart vs Stupid.
My theory on this, the herd sees the British accent as truthfully athorative.
And if you cross it, consequences..
The machine at work people, working on your sub conscious..
Not mine, I just discovered it and shared.
#165 Stop Lying
“…currencies weaken further when the higher rates are applied, as investors in long-term bonds fear devaluation (devaluation necessitated by the high interest expense) and panic out of the currency. The Russian Ruble is a recent example, BTW.”
The Russian Ruble didn’t weaken because their Central Bank raised interest rates. They raised interest rates because the Ruble was weakening.
In other words, they raised rates in order to restore stability and strengthen the Ruble.
Big difference.
Ooops. Hit Submit button in error. Ignore it. It was pointless and dumb anyway.
Moving on, a tip of the cap to the Saudis. The lineups at my Timmies in McMurray are shorter. Thanks lads. Cheerio.
Depressed from yesterday’s post, you ask? Or from the projected demise of Cdn RE?
Let me tell you what is depressing. I’ve followed this blog for years, and fully agree with the message, and have preached it to everyone I know for years. I’ve even followed some of the advice regarding the Cdn housing outlook, and, while there were many other factors that affected my decision, I sold my house in 2012 thinking we might be near a peak, which I believed could only yield positive consequences.
So I gave up (sold) my 1600 sq ft, 3 bdrm, 2+1/2 bath, master 4 piece ensuite, garage + work bench, full basement + work bench2 and seemingly unlimited storage, 20×15 deck I built with my bare hands, fenced yard, double driveway, and just generally being proud of owning a nice house that I only paid $215K for in 2006…..and moved into a box-in-the-sky shithole 1200 sq ft 2 bdrm, with a balcony I can barely fit 3 chairs on, and a storage locker in the basement that is 4’x2’. And I said to myself at the time “but this will pay off for you, you watch and see”. I sold for $250K, by the way (basically mid $230’s after commission/penalty, etc)….so in other words, barely broke even after 6 yrs.
Now, in only the 2 yrs since selling, while living in the box, similar houses in the old neighborhood are selling for $280K, new builds by the same exact builder with the identical model are base $290k (meaning $310K with the upgrades I had).
So now I live in the box, scrape the snow off my car every morning and weep, do my laundry in the basement with coin operated laundry machines and weep, fight with the elevator, have nowhere to store my hunting/fishing/outdoor gear, have no work bench and gave away all my tools to my brother….while knowing I’ve lost almost $50K in equity (against which I could borrow to invest if I wanted), while house prices continue to rise here in London with seemingly no end in sight, and now I would have to take on a massive load of extra debt just to get myself back to where I was 2 yrs ago!
Or, wait another 2 yrs for interest rate hikes to actually affect delusional Canadians and yield lower prices, while wasting 5yrs of my life in a box-in-the-sky that I despise. And the depressing part is that the oblivious no-money-downers live grand for those 5 yrs.
Where’s the payoff Garth? I need it soon before I go insane (which might have already happened).
First, accept responsibility for your own actions. A decision to sell your house for no capital gain was questionable. Likewise renting an apartment, when you could have stayed in a house – why did you do that? And did you invest the house proceeds as I suggested? If so, you would have made larger gains than local London real estate has delivered, whose performance you exaggerate. Blame a blog, if it makes you feel better. But stop whining. You are no victim. — Garth
#165 stop lying on 01.10.15 at 6:00 pm
So painful… Mark you really need to get a better understanding of how rates work.
Regarding IT, I have done some hiring recently and I can tell you there is definitely a lot of people out there looking… but 99% are crap. That is the problem with IT, it is relatively easy to get in as there are a lot of entry jobs that don’t require lots of technical knowledge or even language or people skills. But once you require something better it can be tough to find, even if the pay is good.
……
So true, all the good ones are taken, even allowed to be raving loons.. Hello.
Learning to code requires a mad mind, the learning curve is flat for years, then if you have an addictive personality, and you stick to it, the later part of the curve goes strait up, like long branch real estate prices…
I’m the best in the world in my specially.
Apart from yoda.. But he don’t count, a Freek of nature I’m thinking.
The business gets hood winked, it’s easy, the unless with a good pitch can milk em for years…
In my case, three offers a week from head hunters, 100 to 200 per hour…
I’m staying put, why…. Dudes I work for, I like them, plus I’m rich…
I don’t need to give Harpo govt.. Any more than they get…
My entire check goes directly to cra. Then at end of the year, I still need to write one more…
Having no self control, it works for me.. I leave the house at 5:30 am, get home at 6:30 PM.. I last, force myself to not drink till 9pm..then I go nuts between 9pm and Midnight…..
It works for me… If I quit, I would be hammered 24-7
#155 liquidincalgary
right here in calgary. in fact, you make up about 10% of our city’s population
—————
This is true….. BUT it’s only because the Houston head office wants to make sure that their investment is being handled properly.
AND…. even though I am 100% Canadian, even I have to admit that the USA is the land of opportunity. Yes, the crime rate is higher, etc, but it is also full of good a decent folks just trying to make their way in the world.
I would eagerly move to the States if there was an opportunity. In fact, I am actually thinning the scenario as it stands right now is similar to the Brain Drain in the 90’s. A powerful economy down south that wants our talent.
Just wait for the Winnipeg Jets to move again…. *sigh
Mark #161
At no point in the last 20 years (at least…) have Japanese yen rates been above Australian dollar rates. Yet the yen went up and down over time versus the aussie dollar. Returns are not equal across currencies.
Currency valuations are driven by capital flows, and not just interest rate differentials. The yen is driven by the preferences of Japanese investors, who have massive foreign currency investments. Canada is not in the same position.
If nobody wants to buy Canadian assets because the economy is in the tank, your theory about Canadian dollar strength will not work out.
Okay, these symbols [] did not display; again:
My personal algorithm for Mark is
if Mark
[scroll to backdrop=blue]
if backdrop=blue
[scroll]
if backdrop=white
[read]
#167 I’m stupid: “I called around for quotes and it turns out I’m a high risk driver and my premium is going to go up from $2200 a year to $7000 a year.”
***************
Drop the collision and comprehensive. Just be sure to have sufficient third party liability.
What is the end game to this thing called life before we turn into worm food.
More Lego bricks than the kid next door.
Why do we do the shit we do.
My biggest activement in life was developing the tools to flush the belief system down the toilet..
No Rabbi, No Iman, No preacher can get to me now…
My God, I see him every time I look in the mirror.
You, the trained and programmed, will have issue with above statement..
I forgive you, there is some one in your head and it’s not you..
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@ #4 THIS AINT OVER YET SUCKER!
RE #130 Capital One on 01.10.15 at 3:07 am
Let me rephrase – how do you account for defined benefit pensions in the n60/40 split?
Since you can’t “sell” some of the actuarial value of your “fixed income CPP fund” to buy equities when the market tanks, then it can hardy be considered as part of your portfolio’s fixed income.
Think of CPP as a separate retirement income stream and not part of your investment portfolio at all.
#127 Mark on 01.10.15 at 2:46 am
You must be a very lonely person, Mr. Know it All.
@#170 box in sky
Im curious as to where you live? The price for the house seems quite low.
END OF DEBT / CREDIT SUPERCYCLE ?
What happens to the entire world’s economy when it reaches a point similar to Europe: Where interest rates are at zero, yet the economy continue to implode because people don’t have jobs and they are no spending, even when rates are at zero?
No matter how low interest rates go, if enough people do not have jobs, and the rest of the population have way too much debt already, then the economy is stuck in mud, a form of ‘DEBT MUD’ and cannot get itself unstuck.
The people who still have some form of gainful employment say “I cannot borrow any more money to buy stuff because I am already having too much difficulty paying off the debt I already have.”
Now just imagine what Canada will be like in a few years when that exact same thing happens here? Imagine how things will be here when the economy goes into the next recession and a lot of people will lose their jobs, but at the same time the people who still have their jobs cannot borrow more money, even at zero interest rates, because they already have too much debt to pay off as it is.
Now just imagine most of the modern world being faced with just such a thing, it is quickly unfolding right now. China has a massive amount of debt from their housing bubble, Japan has been in a debt bubble depression for 20 years now, Europe is dead and rates going to zero. Soon Canada will fall into a debt depression, and when the recession gets bad enough so will the U.S. fall into a debt depression.
A debt depression is where a bad recession hits, making current extremely high levesl of debt so bad for the people that they cannot spend, they cannot buy any new stuff, even at zero % interest rates. When that happens, the economy sinks into a depression.
Now here is the really, really bad news: When enough countries around the world fall into a debt depression, it doesn’t last for more that a few years before hyper-inflation starts to break out in key spots. People begin to get scared that they are not going to get their money back so they start to demand higher rates for their risk of investing. As these dead economies borrow money at such higher rates, the cost of servicing debt at such higher rates makes it even less likely that those countries will be able to pay off their debt, so they become an even higher credit risk, and so more and more people demand even higher rates of interest. The is no stop to this, it can reach 1 MILLION % and more.
Now just imagine what happens to people amount of fear if they own $800,000 on a house in Toronto, their mortgage is around 3%, but their company tells them that job cuts will be announced next week, and then on the news you hear of Argentina’s interest rates hitting 25,000% and other countries in Europe begin defaulting on their debts and rates in those countries begin approaching 100% ? People here begin to wonder what if interest rates rise from the low of 3% to 20% or higher ? And what is they lose their jobs?
That is what happens at the end of a debt / credit supercycle, and the strange things happening with oil prices are just one of the things that tends to happen when the financial markets get turned upside down when the end of the supercycle begins to approach.
First there is a massive slowdown in spending even when rates are held to almost zero. That then tends to lead to the prices of things falling (like oil prices) and that leads to what feels like a depression. That lasts for 3 to 10 years, and then the massive waves of defaults leads to a fear of not being paid back and then a massive wave of hyperinflation takes over, and that is the true destructive wave that should be feared the most.
Just ask some of your Canadian neighbors if they are going to be doing a lot of spending this year, and see them talk about how they have too much debt already and cannot afford to buy anything new. And that is with interest rates close to zero.
Re: IT, this just came across my radar:
“IPSoft’s AI platform has an understanding of the semantics of language and can learn to solve business process queries like a human. It initially learns using the same manuals as humans – it can read 300 pages in 30 seconds – and then learns through experience and by observing the interactions between human agents and customers. ”
http://www.computerweekly.com/news/2240237767/IBM-still-a-bellwether-as-2015-hastens-end-of-traditional-IT-services-model
Bow down to the AI overlords…
80 eric on 01.10.15 at 9:22 pm
#127 Mark on 01.10.15 at 2:46 am
You must be a very lonely person, Mr. Know it All.
……
Stop busting marks balls, all of us have an opinion, non are right, non are wrong..
Personally, he puts me to sleep, but most of you put me to sleep..
Let the words flow. 99% of the creeps that read are shit will never post.
Any one that contributes in my mind us special…
Weather right or wrong, it’s the brave that post…
I will have non of this… Stop it…
Good call #174 Daisy Mae…drop the collision and comprehensive (only on an old vehicle) and the third party liability, make it a million dollars. ICBC of B.C. will only give you what the vehicle is worth according to their book(s) even though the other driver hits you and you have collision and comprehensive. The expensive vehicle that hits you will be covered by ICBC. The rick man wins again and by our system. It never use to be like that back in the seventies, when you got damage the (private) insurance company paid. The bubble is bigger and wider than you think and everyone is latching on, sucking it dry.
I say everyone who is working for the feds should switch positions with the small business owner. Make a good reality show, a reality check for many.
I think Mark Carney made a mistake by keeping interest rates low but I suppose he was saving the financial system and investors. In reality he just be saving the youth, who are strong, willing, and spirited. Oh, well, food comes from the grocery store and clothes from the big stores, hamburgers come from fast food stores. We will be just fine; we don’t need the youth.
#170 – Garth Response
….First, accept responsibility for your own actions. A decision to sell your house for no capital gain was questionable. Likewise renting an apartment, when you could have stayed in a house – why did you do that?…..
Exactly my point, it was a dumb decision. I don’t deny it.
……And did you invest the house proceeds as I suggested? If so, you would have made larger gains than local London real estate has delivered, whose performance you exaggerate…..
Yes I did invest the proceeds. My numbers for the local RE come from list prices only, so could be slightly exaggerated, but not by much.
…..Blame a blog, if it makes you feel better. But stop whining. You are no victim. — Garth…..
I didn’t blame the blog, I simply said I followed the blog, not that it MADE me sell a house. The whining is from not being able to live with the dumb decision.
#181 – Crowdedelevatorfartz
Northwest London
Bow down to the AI overlords…
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ya, but but, my AI overlord can whoop you AI overlord!
http://www.edmontonsun.com/2015/01/10/alberta-computer-programmed-to-play-perfect-poker-game
A University of Alberta research team have used artificial intelligence to unlock the secrets to winning at heads-up limit hold ’em poker.
The name of the computer program is called Cepheus. It was developed by U of A researchers .
“It was trained against itself, playing the equivalent of more than a billion, billion hands of poker,” said Bowling, in a press release. “With each hand it improved its play, refining itself closer and closer to the perfect solution. The program was trained for two months using more than 4,000 CPUs each considering over six billion hands every second. This is more poker than has been played by the entire human race.”
“So painful… Mark you really need to get a better understanding of how rates work.”
I understand how rates work perfectly fine. The empirical evidence is that higher rates do *not* save currencies, and the theory, that returns converge adjusted for risk, essentially the practical result of the arbitrage pricing theory prevails.
What I find truly bizarre is that we know that Canadian personal debt exceeds that of what was experienced in the USA at its peak. We know that deflation of such debt must eventually occur, which puts the brakes on personal consumption in Canada, the cause of most imports and foreign spending on consumption by Canadians. Yet for some reason, people still think the CAD$ is going to weaken further. It makes no sense whatsoever, but a significant strengthening of the CAD$ does.
I’ll make it easy for you:
borrowing = shorting the CAD$.
Paying back debt = un-shorting the CAD$.
A stock goes down when people are shorting (selling) it. And when people are buying it, it goes up.
Canada has tripled its oil exports to the US since the early 1990s, and the US continues to buy every drop we can ship to them. The balance of trade between Canada and the USA will remain in Canada’s favour for a long time to come, albeit with cyclical weakness (and strength). Hence, the CAD$ will exhibit a long-term trend of strengthening against the USD$.
Regarding IT, I have done some hiring recently and I can tell you there is definitely a lot of people out there looking… but 99% are crap.
That’s not true and you know it. There are so many people out there looking that firms have the luxury of not even bothering to call in 99% of the applicants for interviews. Without interviews, people can’t be judged as to whether they are ‘crap’ or not.
And besides, salaries are not rising in IT to any significant extent, so even if non-‘crap’ people are found, they’re not reaping a return on such. Which means that there’s no shortage or even significant demand for IT people. And most likely, you’re exaggerating on the quality of the talent pool out there.
That is the problem with IT, it is relatively easy to get in as there are a lot of entry jobs that don’t require lots of technical knowledge or even language or people skills. But once you require something better it can be tough to find, even if the pay is good.
“
Well I’m mostly talking about higher-end IT jobs, those that require a university background, in CS, in engineering, etc. Lower-end actually seems to do much better, the types you would expect to see in “Help Desk” roles, on account of lower expectations and employer preference for proprietary training, rather than generalist skillsets.
182
I have observed a similar cycle of credit fueled bust and eventual currency destruction
Hyperinflation, while possible, remains a very low possibility in the us or Canada.
Yes we will see high inflation and weak or no growth but hyperinflation is very unlikely
Imo, we are within 12 months of switching into the start of the global currency collapse. It is playing out exactly as expected. Trillions of Euros and Yens trapped in broke banks and government bonds of broke countries are increasingly looking for a new home to try and avoid tbe coming defaults and currency collapse. Much of this capital flow is going into US dollar assets for now.
So I expect by late this year we will begin the final euphoria stage of the blue chip stock rally we are in. Don’t be surprised if we see a nasty 10-20% decline by the summer first before liftoff
Then ideally between Sept 2016 -May 2017, we begin the acceleration phase of the final 2008-2009 x10 collapse with the ideal bottom occurring somewhere around early 2020. USD will choke the global economy as it gains too much and usd debt outside of the U.S. defaults across the board. A major devaluation of the usd triggers the last and ugliest phase of the reset. 2020s sees improved growth and inflation
May sound loony but fundamental and other methods are all suggesting this general path is most likely
As Observer mentioned, here is the article on BoA selling Canadian banks short:
http://www.theglobeandmail.com/globe-investor/inside-the-market/bank-of-americas-no-2-trade-for-2015-short-canadian-banks/article22389150/
For those who arguing about IT as overvalued, overcrowded, over-outsourced, with diminishing return field of occupancy. This is such incredible BS that only Canadian can come up with to justify own laziness and indifference.
First in Canada there are simply not enough good IT companies to create same type of professionals shortage as in US. There was Nortel and then Blackberry and then what? And even with blackberry exploding the market absorbed easily all those fired folks even if most were mediocre at best.
Sure, when you’re looking for helpdesk or oracle DBA you’ll get dozens (not hundreds!) resumes. But try to recruit somebody, not to mention assemble a descent team, to develop product using python web frameworks.
Situation is the following right now. If you have descent skill and experience with resume exposed on US job sites: you’ll get bombarded by calls and emails from US recruiting agencies. And then it becomes interesting: continue to work on mediocre projects in Canada for the banks or tsx or few insurance companies or f.g government in freezing Ottawa, or maybe if you’re lucky you find a well funded startup doing something interesting (highly unlikely to find that in Canada). Sure there are offices of almost all big tech companies, but they don’t do any serious R&D here. And that coupled with choice of 3 places: Toronto, Van and Ottawa because others are not designed for humans really to live there.
Or you get few offers from companies in US and then compare. And Canada is falling behind big time in this case, and its not only money. And then it piles up: idiotic prices on houses, ugly climate, overpriced everything, taxes – list goes on.
#182 Waterloo Resident
So I should just buy some gold? ( sarc/off)
Nice summary of our present and future.
No, a raise by the Fed, either on their own, or forced by the market, would be an admission that inflation is rising. Rising inflation is profoundly negative for a currency, by definition (inflation is the weakening of a currency relative to goods and services).
Completely wrong.
Clown.
OH OH, ALBERTA IS DEAD IF THIS IS TRUE.
I just read this article and it sends chills up my spine (sorry for any brain-fart spelling errors).
Here is he article about the fall of oil and how the parallel to Alberta is so eerily similar:
http://www.thetruthaboutcars.com/2014/12/ur-turn-truth-oil/
Here is a quote from the article: ((( “To put this in some perspective, on January 3, 1986 a barrel of WTI was $26.00 – that would be $56.33 a barrel today, adjusting for inflation (remember this number, it will be important later). This was at the start of the 1986 oil crash, where the price for WTI would bottom out at $10.83 on July 23, 1986. Today as the Great Recession fades behind us, you can drive through the fringes of Phoenix, Las Vegas, or along the Treasure Coast of Florida and find grass growing through the cracks of subdivision roads for homes never built. In 1996 you could do the same in Houston, with blighted neighborhoods spotted with abandoned homes falling into ruin. The Gulf Coast economies were devastated, and it took Houston and the surrounding area more than a decade to recover financially.” )))
Wait, if oil at today’s $56.33 is equivalent to $26 in 1986, and Saudi pushed the price of oil down to $10.83 back then, then that would mean an equivalent price of about $23.46 in today’s dollars.
So if current trends hold true, we should be seeing oil in the mid $20 range sometime this summer.
Now what do YOU think that is going to do to the Alberta’s economy, their jobs in oil production, and their booming housing market that is connected to all of those high-pay oil-producing jobs ?
@#159 Realist vs Angriest
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bwahahahahahahahahahahahahha
Hello Mark I don’t know which Ontario you were talking about in the 1990’s. I have lived in Ontario and worked in the industrial sector since 1989.
“Even in the 1990s, when a so-called manufacturing renaissance occurred, if we dig deep, much of it appeared to be confined to, and the result of the high tech industry. ”
Wrong!! You may have dug deep but, you stuck manure ….. The manufacturing renaissance you’re referring to was not driven by Nortel, or RIM. It was driven by stamping metals, casting metals, welding, plastic molding …. basically the auto parts and the vehicle assembly industry. We were selling record numbers of cars to the USA. Of course, we still had the “Auto Pact” in place. It ended on Feb. 19, 2001.
Canada has tripled its oil exports to the US since the early 1990s, and the US continues to buy every drop we can ship to them. The balance of trade between Canada and the USA will remain in Canada’s favour for a long time to come, albeit with cyclical weakness (and strength). Hence, the CAD$ will exhibit a long-term trend of strengthening against the USD$.
Terrible logic.
Hideously ignorant.
“It takes more than just infrastructure to be competitive. It takes low tax rates, and a favourable labour environment. Neither of which exist in Ontario. ”
Mark – Oh brother! Where do I start?
Infrastructure is a very important part of the formula in developing a competitive economy. Many transplant companies left Mexico and returned to USA and Canada after they discovered that Mexico had poor roads, expensive transportation regulations, part time utilities and limited access to clean water.
One of the biggest problems Ontario has is we’re competing with U.S. companies. We may think NAFTA is a good idea but, very few south of the border do.
Another issue is “right to work” states. Study after study in places like the Carolinas and Mississippi clearly demonstrate that these workplace laws are nothing more than a union busting subsidy to businesses. It should be be challenged through NAFTA but, I wouldn’t hold my breath. It simply won’t happen because the Harper Government supports “right to work” laws. In the recent Ontario election, Tim Hudak had to back pedal feverishly from his support of right to work laws. No one believed him.
Taxes? In my 25 years of working in Ontario’s industrial sector, I have never heard of a company closing because of taxes. Burger King bought Tim Hortons and moved their head office here to escape US business taxes so ours must not be so bad..
Unions, yes. One very profitable company in London closed its doors and moved to a “right to work” state because the union refused to accept a 50% wage cut.
Mark, is your your formula for success one where businesses don’t pay taxes and everyone gets paid the minimum wage of Tennessee in order for us to be competitive? Oooops sorry, Tennessee doesn’t have a minimum wage. Interferes with competitiveness you know.
Box # 170
“I sold my house in 2012 thinking we might be near a peak, which I believed could only yield positive consequences.”
“Or, wait another 2 yrs for interest rate hikes to actually affect delusional Canadians and yield lower prices”
“I’ve lost almost $50K in equity”
—————————————————————-
I too sold my residence, in the summer of 2008 believing it was going crash. The market started to correct hard, but the system intervened to keep housing prices up. I invested proceeds and made out pretty good. Rented a big old house on five acres.
By spring 2013 I had decided to buy another house for the following reasons:
1) I believed the Canadian $ was headed for 80 cents US, significantly softening the chances of RE correction and decreasing wage discrepancy, between US / CAN.
2) A 70 year debt super cycle had reached saturation. With inflation and wage pressure not happening, rates are not going up significantly, for a long time.
3) I discovered do to systemic manipulations, I could not predict which way the ship was headed, so I decided to get back on board and am now just enjoying the ride.
I first made a verbal offer, 40K below asking. The listing agent laughed and said no way the seller would go that low. I ended up buying it, the following January, for below the verbal offer I made, the previous summer.
Did I mention no one else was viewing RE at X-mas.
Or that it was a divorce sale that had languished for eight months?
In the end, I came out way ahead, even having paid the cheap rent for over five years. Mind you, the market stayed pretty flat in the Fraser Valley, so I got lucky.
When we think of inflation as putting off the purchase of a Harley it doesn’t seem so bad. But in reality it means much higher grocery prices (again) for the seniors and working poor that will more than wipe out any savings cheap gas will bring.
Seniors are already starving, thx to the ZIRP. It’s only going to get worse. I think Mr Poloz has an idea of the Canadian economy in the 1940’s, where extended families huddled together and men worked as farmers, wood cutters and meaningless laborers.
Inflation is written in pain when children are sent to school hungry. The highest number of food bank dependants are seniors whose savings have been wiped out decades earlier than planned…remember Freedom 55, Bwahahahahahahahahaahhahahahaha. The secong and fastest growing client base is working families. Schools are reporting record numbers of hungry kids…nothing to be proud of.
#170 Box-in-sky-renter
________
I have sympathy for what you are going through, but I think if your house went up by only 35k over six years, that is far from the huge bubbles that we see in other cities in that period with prices doubling or tripling in price. I do believe that this blog has some responsibility to make sure people understand which markets are the subject of the blog, as from my calculation it was something like 2-3% gain a year which cannot be a bubble.
I think if you have a stable job and want to live in London for the foreseeable future, you are better off buying back especially at these prices. They seem very affordable and you will build equity in no time.
It’s not like Toronto where now the home ownership is nothing but a dream.
Bet you’ll find him in Vancouver or somewhere in BC.
http://finance.yahoo.com/news/may-just-witnessed-first-truly-171855787.html
# 172 GS
BUT it’s only because the Houston head office wants to make sure that their investment is being handled properly.
==========================================
source??
#170 Box-in-sky-renter
I’m sure your not the only one that believed the sky was falling scenario that Garth painted at the inception of this Blog. How does the old saying go, if someone told you to jump in the lake, would you? You can’t take everything you read on this blog at face value, including what Garth writes. I have had family members that thought the same and had sold even earlier. They however have no clue who Garth Turner is. Should we blame Garth for their decisions. Your a grown man I imagine, take the responsibility for your decisions bad or good and don’t believe everything your read regardless of the source.
#WhatWouldJesusSay?…
“We thought, ‘We’re sitting on some very valuable property and we could leverage that into something that would give us a bigger facility.’ – Rev. Smith
[G&M] – Vancouver churches unlocking their land value
“In Metro Vancouver, as we are facing escalating house prices and land constraints, and we thought that it would be an interesting opportunity to engage with churches because they do often hold key sites in fantastic areas that could benefit from having a more urban use.” Mr. Nick Paolella, MarconDevlopment
http://www.theglobeandmail.com/life/home-and-garden/real-estate/vancouver-churches-unlocking-their-land-value/article22381262/
#194 Waterloo Resident
==========================================
$10 oil and SDI (strategic defense initiative), were nails in the coffin, of the iron curtain, pounded home by Reagan
remember? or were you too young?
#176 Smoking Man
What is the end game to this thing called life before we turn into worm food.
More Lego bricks than the kid next door.
Why do we do the shit we do.
My biggest activement in life was developing the tools to flush the belief system down the toilet..
====================================
You do realize, don’t you, that a lot of us learned the same lesson by the time we were 18? We then proceed through new experiences and higher education to circulate among others who similarly wanted to challenge the status quo, and that has informed our lives ever since.
You appear to have spent an entire adult life cycle, only to “learn” in your late 50s that the earth is not flat, which you attempt to proclaim him in a proudly drunken stupor as some kind of revelation that you picked up from the internet. Yet you use all that you have “learned” simple to pronounce upon and support the worst excesses of the status quo. How predictable. BORING.
Zzzzzzzzzzzzz.
For anyone else’s life, I’d consider that a very large waste, but in your case it appears there was probably little to waste from the beginning.
You hear that, Smoking Man? It’s the sound of thousands of readers to this blog, with one hand clapping for your “achievement”.
What a pathetic loser and bumwipe you continue to be.
The IT market has changed. For the better, at least for people with experience. Salaries are out of this world in the US, and now, a 20% bonus for Canadians.
The local US border office is starting to recognize me, now, that I am on my 3rd TN these past 2 years.
But we all know, that there are some applicants in the IT sector who’s CV is as much fiction as Harry Potter.
People with real experience need to compete with these guys as if they were real. It’s unfortunate. But they clog up the application pipelines and this is why you need to think outside the box when looking for something.
Fortunately, if you’ve got real skills, they are easy to demonstrate. And people will find you in that case.
Linda, stop feeding the troll — the more attention you give it, the bigger it gets.
I should emphasize that this is for short term consulting where the hook is specific industry skills AND IT skills.
Plus, you can add personal projects to fill the holes in the schedule. Over the long term, the personal projects will, hopefully, provide much of the cash flow.
I would have to change careers if my only option was to work in the IT department of your average big corporation. Never seen anything so depressing in my entire life.
#206 Linda
———————–
why all the anger? (scroll wheel broken?)
you let a pathetic [email protected] get you all worked up, what does that say about you?
#189 JO – I don’t think it sounds loony at all. I believe that the US pasted the point of no return long ago about actually being able to pay back their debts. Now they are just putting in place all the CYA stuff for defult and collapse. Bills like marial law, indefinite detention of citizens, confiscation of private property, the militarization of local police forces, control of the internet, are all set in place for when TSHTF
It will be a long slow recvery from the grip that they have slowly and methodically been ratcheting up on their own citizens and citizens of other ‘free’ country’s around the globe
Prepare accordingly its all happening now and happening fast
Go Linda.
You think it’s easy to post while in altered
States of consciousness. Try it once yourself, you’ll either come across mad , or happy.
Depends what you drinking.
Sincerely,
bum wipe..
#203
As I work in O&G for a company with a head office in Houston, and I’ve observed this in others as well. You get a lot of US execs who get placed in Canadian leadership positions.
And as a Calgary “insider” I can tell you that Christmas spending was still high because the attitude was “let’s have one last nice Christmas before we worry.”
But I do think you’ll start to see people pulling back their spending now. There’s acknowledgement that the growth here has been too much, and everybody is hopeful that they can stick handle employment during this downturn.
BUT, I think most only see the downturn lasting a year or so, and just a needed flushing out.
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@ linda
dont worry about smoky, if there was no internet noone would know that he exist.
once he was asked a question and he froze… that was funny!!!
behind all his grotesque wisdom, he is hiding his own underachievement, over his own expectation. Sometimes when he is “drunk” in his post it can bee seen that his internal clarity was never clear and he will reveal that in his opinion he was given low score on in his social scorecard.
and he is not nowhere near top decile, that is why he come here daily!!!
http://goo.gl/CbluIA
#200, actually not true about starving seniors. The Daily Bread Food Bank in Toronto would have about 4% of people over 65, so they are the least represented of all demographics. A 65 year old with no money or savings in Ontario would get 40% more in welfare money aka GIS, OAS and GAINS then a disabled 50 year old would.
In my area we have a huge waiting list for social housing, well over a 30 year wait meaning you will never get to the top of the list. The only group they build units for is the one that has a wait time of less than one year – guess which age band that is – BINGO the 65+.
Mark wrote …. “One might ask a question here. Why is the Canadian economy so reliant on commodities in general, and crude oil in particular? Why aren’t things more diversified?”
Ah yes Mark,
The hewers of wood and drawers of water question. Where were you in the early 1970’s? Canada was once called the richest underdeveloped country on Earth and our growing economy was “like feasting on empty calories.” One might argue, it hasn’t changed that much.
You may want to Google Professors James Laxer, Mel Watkins and Kari Levitt. They all asked the exact same questions. As a supporter of Conservative dogma, you will not like their findings. Please consider reading Professor Levitt’s book, “Silent Surrender”. You may find the answers you’re looking for in there.
Foreign ownership of corporations and protected, risk adverse banks are part of the problem. The concentration of wealth, even then was a problem in Canada.
In addition, our R&D programs are a joke. Barry McKenna at the Globe wrote a really interesting piece on SR&ED in 2011. The SR&ED Program has turned into a feeding frenzy for consultants and lawyers. There’s a lot of tax rebates but very little real R&D. R&D drives secondary industries. Just ask the folks at RIM about how important keeping your product fresh and innovative is …..
http://www.theglobeandmail.com/report-on-business/flawed-rd-scheme-costs-taxpayers-billions/article577870/?page=all
Industrial Guy, excellent point.
These R&D programs is a joke.
I remember RIM was getting millions from government because of bogus R&D programs only defined by employees filling in time sheets with “research, development” items.
Once they were unable to submit request on time, because few folks didn’t fill the timesheets, so they lost millions in government help in that quoter. The hell broke loose and they made sure everybody fill idiotic bogus time sheets after that.
What smaller companies doing with R&D is not even funny. Complete waste of resources – but so Canadian.