Over they go

STUPID modified

Tuesday am update: Oil drops under $45, more to come?

Cowtown Death Watch: While nobody relishes tough times for others, this was so predictable. Oil started a serious slide last autumn, just when the Calgary Real Estate Board was telling locals all was good. Keep buying:

“Recent price gains have encouraged listings growth and, ultimately, supply in all sectors, said (board economist Ann-Maria) Lurie. “However, citywide inventory levels continue to remain below historical norms, and current demand levels continue to point toward healthy absorption rates,” she said.

Well, so much for Ms. Lurid. 2015 has started out being the weakest for Calgary house sales since the financial crisis of 2009. Luxury home sales have dropped by more than half. The price of oil’s now plunged under $50 and – admits local agent-blogger and permabull Mike Fotiou – “House prices are next.”

In fact, they’re already fading.

This is the toll the crude prices are taking today:

  • Total sales are down for January 34.3%, massively widening a drop of 7.5% in December.
  • New listings have swollen by 21.64%.
  • The number of total active listings has erupted 50.27%. Gulp.
  • The average price is running 5.8% below this time last year.

Crude, as you know, lost another 4% on Monday, and sits at $45.68. Where it heads is utterly unknown, although if a barrel can travel from $106 to $46 in half a year, it can go to twenty – at least for a while. That’s improbable, of course, but fifty-buck oil for the rest of 2015 is now entirely reasonable. If that is the case, there’ll be a wide and deep wave of layoffs rumbling through Western Canada.

Meanwhile the dollar has plunged along with the black stuff, and just hit 83.5 cents US. That drop of more than 10% in the last year is highly inflationary, so as gas gets cheaper, lettuce and Audis don’t. If the currency continues to weaken at this velocity, the Bank of Canada will be into the forex market, spending our reserves. If that doesn’t work, higher rates will. (Looks now like the Fed will pop by June.)

Some people think the same oil-induced misery will happen in the States, what with the explosion in fracking that’s occurred there and all the new, high-paying jobs related to oil. But the numbers say otherwise.

In fact, there are 931,000 Americans working in the energy business, says Scotiabank, out of 140,000,000 in the labour force. Yeah, less than 1%. They could all be lost (an absurdity) and the national unemployment rate would still be in the 6% range (now at 5.6%). It’s also worth remembering that US economic growth went into overdrive last summer as oil prices faded because, simply, half-price oil is nectar to America, the biggest consumer of it on the planet.

Meanwhile 22% of the Toronto Stock markets is tied directly to energy. Oil and gas account for about 9% of the entire economy and our exports hit 3.25 million barrels a day in October, before being crushed. Relative to the economy there are twice as many oil & gas workers in Canada, and the average wage is $130,000. The trouble is that 8% of the entire Albertan workforce is in the industry, and many more feed from it.

Late last year, as oil started its precipitous decline and Calgary house prices hit another peak, home ownership in that city crested at 72.4% – the highest in Canada and, it appears, in North America. In response, the realtors’ chief economist said nobody should worry about buying into a one-horse boom town:

“As one of the strongest performing economies in the country, Calgary has generated significant growth in employment. For many consumers, the positive outlook in terms of employment prospects can encourage them to pursue ownership. Furthermore, fundamentals have supported the recent growth in the housing sector, easing consumers concerns over the risks associated with ownership.”

Well, apparently there are 50% more people concerned with the future and wanting to bail out of Cowtown real estate than at this time last year. Hard to imagine that listings will decline or sales increase any time soon. Like realtor Mike says, first go oil prices, then go house prices.

It’s just too bad the herd had to hit the cliff first.

221 comments ↓

#1 Derek R on 01.12.15 at 7:26 pm

Yup, exciting days in Calgary. Ride ’em, cowboy!

#2 CPG on 01.12.15 at 7:32 pm

Check out the top line in both of the following data tables from the Bank of Canada:

Latest household credit numbers for Canada (to the end of November, 2014):

http://credit.bankofcanada.ca/householdcredit

Latest business credit numbers for Canada (to the end of November, 2014):

http://credit.bankofcanada.ca/businesscredit

#3 Kothar on 01.12.15 at 7:33 pm

I have a question regarding CAD. Lately our miserable currency has plummeted like a stone vs USD. In the past currencies were stable but ours is whipsawing all over the place last few years.

1)When I see the CAD worth 0.835 USD why do I need to pony up $1.20 to get 1 USD? It should be 1.165 as 0.165+0.835=1.

2)Who is buying or selling our dollar and where are those dollars going? If there are so many dollars around how is the value determined by buying and selling them. Do they simply vanish and then reappear?

3)Why can no one get any kind of call right? There is one guy on here saying that CAD will go right back up, but hordes of others saying it is going down down down. And all these “economists” that work for banks and whatnot, they can’t get anything right either. Their calls were all wrong, about oil, about our currency. So if they are all wrong, why believe them!

#4 Ex-Cowtown on 01.12.15 at 7:34 pm

To quote Peter Sellars in “The Party”;

“Bang hardy, Pardner!”

#5 Rainclouds on 01.12.15 at 7:35 pm

As someone mentioned yesterday Cow town is a transitory work camp, albeit with bars…………

Still remember the early mid 80’s when people were fleeing “back home” and empty houses sat and sat.

Longest 3 months of my life were living in that dessicated treeless excuse for a city.

Yeeeeee Hawwwww

#6 For those about to flop... on 01.12.15 at 7:41 pm

Hello all out there in blog land …
I was thinking yesterday about the renting vs owning debate and about choices we make and I started thinking about how we are all different.
I am a scaredy cat when it comes to investing and was wondering what percentage of net worth any of you with two minutes of spare time can work out you have invested in the stock market.
I don’t want to know how much money you have or any of that ,just the amount in percentage you have invested.
I’ll go first…
PERCENTAGE OF NET WORTH INVESTED= 35%
I just want to see what the average is.
Over to you…

#7 Nemesis on 01.12.15 at 7:42 pm

“It’s just too bad the herd had to hit the cliff first.” – HonGT

#TheLakotaUsedToHostEventsLikeThat… #ThereWasMuchFeasting… #Dancing,Too… #WolvesOptional.

http://youtu.be/pTVbL5iMNO8?t=1m33s

#8 DV01 on 01.12.15 at 7:45 pm

“But the numbers say otherwise”

U.S.eh

Good luck with that…but your subtle US growth disclaimers do not go unnoticed.

Again, good luck with that meme.

#9 Taylor Nugent-Hopkins on 01.12.15 at 7:48 pm

I generally agree with you Garth; however, I have to disagree with your comment that “nobody relishes tough times for others…” I am a somebody (maybe not a big somebody, but a somebody nonetheless), and I do, in fact, relish tough times for others. Not everybody, just my stupid fellow Canadians who stupidly bought houses during the last stupid 10 years. Truly stupid. They get what they deserve. Stupid is as stupid does.

#10 jimmy on 01.12.15 at 7:48 pm

Great picture!
Hey, I could have sworn that yesterdays stop sign didn’t have the STOP letters showing underneath the GO written in snow. And now it does! Did a swaparoo occur or am I losing it?

#11 RayofLight on 01.12.15 at 7:49 pm

I believe oil prices will continue to decline for awhile. I think there were many fracked wells just on the verge of production, and the most economical strategy would be to complete them and produce the oil. The decline in the shale business may have to wait until the existing producing wells start to see output decline, and the decision to drill new wells is delayed. I would watch Saudi Arabia to look for the oil price bottom. When they start to reduce production to salvage the price, that would be, to me, the start of the bottom. Until then, there are way better trends to participate in. 2015 will most likely be a volatile one for the markets. A thought would be to watch the VIX index for the buy & sell signals. Buy when the VIX is above 20; sell when it is below 12. Repeat,repeat,repeat!

#12 Raj on 01.12.15 at 7:54 pm

Oil down , World war 3 situations on the rise . Looks like gold will be booming back … Your comments ?

#13 ronh on 01.12.15 at 7:55 pm

Isn’t a lower dollar good for us? Inflation will add fuel to the fire. Not good.

#14 Charles Ponzi on 01.12.15 at 7:55 pm

The Fed is set to stick with its narrative of the US economy doing so well they just have to raise interest rates. It’s for the Wall Street banks, don’t you know. That narrative, in this case, is “Ignore transitory volatility in energy prices.”

The Fed expects sufficient mayhem to happen in emerging markets to lift the US, and for enough dollars to ‘come home’ to justify a rate hike that will shake the world economy on its foundations but will leave the US elites relatively unscathed and even provide them with more riches.

If anyone wants to get richer, it’s the rich.

#15 Brian Ripley on 01.12.15 at 7:56 pm

PURPLE RAIN

I have my Monthly Absorption Rate & Months of Inventory charts updated:

http://www.chpc.biz/mar-moi.html

Calgary’s Monthly Absorption Rate (purple plot line) drops to 25%-ish from the near term peak 8 months ago at 55%-ish.

#16 Stephen on 01.12.15 at 7:57 pm

Tried to explain to family and friends that this will eventually trickledown to the 604 & 416 areas, but has fell on deaf ears thus far

#17 robert james on 01.12.15 at 7:57 pm

“Skier Bob” has been very quiet, as of late..

#18 Leaving Cowtown on 01.12.15 at 7:59 pm

Well I feel lucky to be avoiding whatever comes next in Calgary and Alberta. Good luck to the good people of the province.

Too bad that wherever I go we’ll still have another year of Harper as PM. Anyone catch this today?

http://www.nytimes.com/2015/01/13/us/politics/obama-is-faulted-for-not-attending-rally-in-paris.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

How about that? A leader admitting to making a mistake!

What do we have in Canada? A small minded, lipstick and blush wearing control freak who employs thugs like Fantino to bully our veterans and never admit wrongdoing no matter what.

No wonder America is world class and we still aren’t.

#19 Obvious Truth on 01.12.15 at 7:59 pm

Garth keeps coming on here with more and more potential knock on effects of what is happening in the canadian economy. His list is surely longer.

It’s very serious stuff. The speed of it is scary. And I think the boc tries to defend 80.

The good news is that the most oil can go down further is $45. The worst is over.

#20 Smoking Man on 01.12.15 at 8:01 pm

Not as bad as you make it out Gartho

Yes oil is down, dollar is down, so the cost of getting out in CAD so cost are down, while revenue in USD. Still bad but not end of the world.

Now as far as rates going up to support the dollar, damn, you’ve lost your mind, is this you trying to steel my shtick of being the loon.

Prozac is in his glory, and you and anyone who’s been hear for a while knows , inflation to Bankers is when wages rise, not price of things..

Rates won’t go up 2015 gauranteed..

You seen the bond yields today old chap…

All these head lines of Canadian Real Estate are trying to remove demand from Toronto and BC market, both poised to take off into the stars this spring…

It’s crazy…. What’s about to happen.

I don’t blame em for talking it down..

#21 Correlation or Causation on 01.12.15 at 8:04 pm

Actually you’re understating the importance of the O&G sector in both Alberta and the U.S. You’re talking about direct employment but fail to mention the multiplier. U.S Bureau of Economic Analysis uses a multiplier of between 7-9 (depends on location), meaning for every 1 person directly employed in the sector generates between 7-9 indirect jobs. You may need to gain 100 wal-mart minimum wage jobs to equal the purchasing power of 1 rig worker. Evidence – last Friday’s U.S jobs report indicated employment growth yet avg. hourly earnings decrease. Realize that the U.S is the world’s #1 producer of oil & oil equivalents. To say that it is for sure positive to the U.S economy that oil has halved is not entirely true.

#22 Smoking Man on 01.12.15 at 8:11 pm

Oh, and for the dog who asked about Batman…

Why are you asking, pull up a five year chart, tell me what you see.

Da Na Na Na Na Na Na Batman.!!!!!!

#23 Lala on 01.12.15 at 8:11 pm

@5 Flop
30% physical gold
30%usd
30%stocks
10%cad cash, I have a feeling I’ll use it as toiled paper soon.11

#24 Paul on 01.12.15 at 8:13 pm

18 Leaving Cowtown on 01.12.15 at 7:59 pm

You did not hear the leader admit to a dam thing.
Never have never will

#25 Baz on 01.12.15 at 8:13 pm

Hi Garth,
What do I do with the CAD cash that I have (~150k) , shall I convert that to USD $ and buy stocks in the US market ?
or do u suggest to hold on to what I have until BOC fixes the currency ?
Other suggestion will be to invest in TSX and government bonds ?

I really need some advise from you.

#26 realtor are useless and liars on 01.12.15 at 8:14 pm

realtors are uneducated high school drop out shysters. Not only are they uneducated but they are lazy people who won’t do a real days work. They offer zero value and should not be paid more then $10 an hour or $1000 for a sale.

#27 Financial Pain to hit Alberta HARD! on 01.12.15 at 8:19 pm

Get ready for a world of financial pain and a wave of bankruptcies to hit Alberta like a tsunami as the house of cards gets washed away.

#28 Waterloo Resident on 01.12.15 at 8:21 pm

Want to see a scary chart of oil prices over the past 3 years, a chart that will have you scratching your head and asking “What the heck is going on?”

Here it is, look at this and ask yourself; how low is it going to go?

http://stockcharts.com/h-sc/ui?s=$BRENT&p=D&yr=3&mn=0&dy=0&id=p95696037966

#29 saskatoon on 01.12.15 at 8:21 pm

from yesterday’s #266 DM in C

indeed, though i prefer the word “thieves”.

if services provided by taxes are so essential and logical…then let them be voluntary.

otherwise, it is theft.

#30 Happy Renting on 01.12.15 at 8:23 pm

http://www.greaterfool.ca/2015/01/06/could-be-worse-2/#comment-343285

So, aside from this commenter (#3), anyone else in Calgary sell at the top? (Or willing to admit they bought at the top?)

#31 Mike T. on 01.12.15 at 8:24 pm

‘why do I need to pony up $1.20 to get 1 USD?’

the place you get the 1USD is a business with costs
ie wages heat and such

they need a profit to exist for you

I am sort of disappointed that needs pointing out

#32 Financial Pain to hit Alberta HARD! on 01.12.15 at 8:28 pm

Obvious Truth on 01.12.15 at 7:59 pm
Garth keeps coming on here with more and more potential knock on effects of what is happening in the canadian economy. His list is surely longer.

It’s very serious stuff. The speed of it is scary. And I think the boc tries to defend 80.

The good news is that the most oil can go down further is $45. The worst is over.
___________________________________

LMFAO. Another delusional and or hopeful realtors/home owner desperately trying to sell before Alberta sinks. Oil under $60 and Alberta will be hurting. Anything under $50 and it’s game over for Alberta. Oil is going to $25-30. It’s going under $40. :)

#33 Leaving Cowtown on 01.12.15 at 8:31 pm

I meant to add this – the picture tells a thousand words, I think you’ll agree.

Stephen Harper – respected world leader at the UN:

https://twitter.com/bfaparsons/status/515293757932326913/photo/1

#34 North Burnaby on 01.12.15 at 8:33 pm

Gartho~ Will you be buying real estate after the major collapse in the Canadian real estate market?

#35 palebird on 01.12.15 at 8:33 pm

#3
Good questions.. the Cdn $ is not falling as such. It is a relative value thing. The USD value is rising. It is the reserve currency for the world like it or not and , in times of great uncertainty, that is where the money goes. People are scared all around the world. Happened before, happen again.

#36 hohoho on 01.12.15 at 8:36 pm

> … fundamentally there’s no reason why the CAD$ shouldn’t strengthen as debt deflation sets in …

don’t bet the farm on your FX theory Mark … fundamentally, there’s no reason why a currency should strengthen because of mis-allocation of resources by a misguided populace …

#37 Retired Boomer - WI on 01.12.15 at 8:40 pm

#6 For Those About to Flop

About 75% of our “Net Worth” is in the market. 60% of that 75% is in widely diversified equity holdings (stocks) and 40% of that 75% is in Bond type “debt” instruments of varying lengths for fixed income.

We keep a relatively small cash horde at a local credit union for the so called “emergency fund” where it earns a piddly 2.25% a year.

About 25% of “Net Worth” includes our paid-for home 4 br 3 pooper house, 3 cars, and the personal junque.

#38 PeterfromCalgary on 01.12.15 at 8:45 pm

Calgary house prices are going to crash and burn. If they go down far enough I might look into buying another revenue property.

I did pretty good on the place I bought in 1998 back when oil was around $11 or about $17 when adjusted for inflation.

#39 Suede on 01.12.15 at 8:46 pm

Latest assessments in BC have skyrocketed.

People feel richer than they think.

Funny my place couldn’t sell for what it’s assessed at. Not even 5% below it. Oy!

#40 Washed Up Lawyer on 01.12.15 at 9:00 pm

We will have to continue to call it Cowtown. Head-Smashed-In Buffalo Jump is already taken. (a UNESCO World Heritage Site down by Fort Macleod – well worth the visit).

#41 ALBERTASTROPHE on 01.12.15 at 9:01 pm

It is indeed here. Everyone is sobering up after the holiday hangover. Lots of grim talk and shrugs. Don’t be surprised to see stubborn reduction in sales for a while, then a rush to the exits by late summer that could see prices drop by up to a third if oil stays down.

#42 Nemesis on 01.12.15 at 9:05 pm

#LeavingCowtown!?! #MeretriciousNavigationalNOTAM!… #GoSouthYoungMan,GoSouth!…

“A small minded, lipstick and blush wearing control freak…”… – LeavingCowtown

http://thetyee.cachefly.net/Opinion/2015/01/09/Clark_Plane.jpg

#BonusThematicZen:

http://youtu.be/pCtxIVcB6os

NoteToGT: Meretricious? Do you have any idea how long I’ve been waiting to introduce that word to you know who’s lexicon?… As for the video… MyBad… Someone gave me a MadMagazine for Christmas and adolescent predilections are still wreaking havoc with my FinerSensibilities… &OneMoreThang just for the inquisitive (NoNotYou,LosCapitanesBillyBob&HolyCrappyTylenol): http://en.wikipedia.org/wiki/NOTAM

#43 Over they go | Realties.ca on 01.12.15 at 9:07 pm

[…] Source: http://www.greaterfool.ca/2015/01/12/over-they-go/ […]

#44 hohoho on 01.12.15 at 9:12 pm

> … if services provided by taxes are so essential and logical…then let them be voluntary …

isn’t it voluntary?? you pay the price as tagged for living in this society. if you don’t think it is a good deal, there are many other societies to choose from.

#45 Ronaldo on 01.12.15 at 9:14 pm

Just fueled up in Leduc. 72.9/ltr. I recall 68.9 back in 08. Not much farther to go now.

#46 Pooh on 01.12.15 at 9:17 pm

Garth/dogs, in a scenario where house prices have declined to a point where an individual’s home is worth less than what they owe (perhaps… the recent 5% down payment folks in Calgary), what are the implications for those individuals at renewal time?

#47 Timmy on 01.12.15 at 9:18 pm

Come on Garth, housing will hold up in Calgary. Economic weakness will not by itself cause housing to tank. The city is scenic, it has great architecture, world class museums, culture, diversity, nice weather, lots of trees and beautiful landscaping. You think people just move there for the work? Besides, after three booms and numerous reports they have diversified their economy so they aren’t reliant on oil and natural gas. They’ve saved so much from record oil production that they can easily weather a downturn in prices. In fact, they don’t even need a provincial sales tax.

#48 takla on 01.12.15 at 9:21 pm

The realestate Lemmings are headed for the cliff,just how far will they fall?How many will survive given the poisonous cocktail of falling values and riseing interest rates.U.S 10 yrs bond rate 1.89 and keeps falling.Stocks @ 2008 highs and faltering ,geopolitical volatility seems the new norm and gold catch’s a bid.
Interesting times forsure.

#49 ANON on 01.12.15 at 9:28 pm

Any “Dear God we promise not to piss it away” bumper stickers sightings yet?

#50 Harbour on 01.12.15 at 9:30 pm

Alberta renter and hope it hit’s us hard. Doesn’t the rest of Canada wish they could get hit with something?

#51 Obvious Truth on 01.12.15 at 9:36 pm

SM’s first post is likely true except that banks are breaking to new lows. And there are no five year double bottoms in anything. The light at the end of the tunnel is probably a train.

I think the big city spenders have empty pockets. As they say out west. Big hat no cattle.

#52 Ret on 01.12.15 at 9:38 pm

If the CDN $ goes to .75, will Ontarians be dancing with Kathleen Wynne in the streets?

For some reason, I don’t think so.

#53 damien on 01.12.15 at 9:38 pm

#3

1) It is a rate, if you want to switch you just inverse. So if CAD/USD at 0.8361, to get the USD/CAD you do 1/0.835 = 1.197. That’s the spot price. If you want to exchange money you will have to pay the middleman.

2) The money does not vanish. There is always someone willing to buy CAD, just at a lower price at the moment. When you are a foreigner and want to invest in Canada you have to use CAD for the transactions.

3) Don’t listen. Most of them are just here to animate the market. They need the masses to become emotional and buy or sell all the time. That creates activity in the market (ups and downs). That’s when traders can profit the most.

#54 Danno on 01.12.15 at 9:40 pm

Hohoho. Why do I need to move? I was born here.

#55 Fx dude on 01.12.15 at 9:43 pm

#3 Kothar – it’s the math

Think of it this way. $0.835 US cents buys $1 Canadian dollar. And $0.165 US cents buys $0.20 Canadian cents.

Add them up. $1 US dollar = $1.20 Canadian dollars. It’s not for heat etc for the business selling CAD. Lol

#56 I am the rock on 01.12.15 at 9:45 pm

I’m a newbee investor and i have a question !!

I recently followed Garth’s advice and set up a balanced portfolio. I have approximately 17.5% in REIT (XRE.TO more precisely).

In the case of a huge market turnover (or crash) in Canada will this part of my portfolio take a huge hit ?

You certainly did not follow my advice. — Garth

#57 B.O.B. on 01.12.15 at 9:48 pm

Striking similarity of circumstance these days regarding 1985 when the Saudis acted to curb dwindling market share, the result of non-OPEC expansion.

#58 José on 01.12.15 at 9:50 pm

Garth,

There’s a good chance of a correction in the greater 416 & 604.

But you’ve said in the past that single family homes in West Vancouver, Shaugnessy, Kitsilano, etc… will feel less pain. Do you you still feel that way?

#59 Bubu on 01.12.15 at 9:50 pm

5-10% down in Calgary is not a big deal for 2-3 years… I told you to buy in Edmonton.. more gov. jobs, less oil exposure… Edmonton is still doing ok….

#60 HD on 01.12.15 at 9:53 pm

#56 I am the rock on 01.12.15 at 9:45 pm

I’m a newbee investor and i have a question !!
I recently followed Garth’s advice and set up a balanced portfolio. I have approximately 17.5% in REIT (XRE.TO more precisely).

In the case of a huge market turnover (or crash) in Canada will this part of my portfolio take a huge hit ?
You certainly did not follow my advice. — Garth
——————————–

Which part of “re-balancing” don’t you understand?

Best,

HD

#61 I am the rock on 01.12.15 at 9:56 pm

You certainly did not follow my advice. — Garth

Well with all due respect in your post from November 21st you said :

“So divide the TFSA money into five piles, putting equal amounts into ETFs (exchange-traded funds) that mirror (a) the S&P 500, (b) the TSX 60, (c) a basket of preferred shares, (d) real estate investment trusts and (e) a Canadian bond index. You can use iShares products, or Vanguard”

“For example, using iShares, you’d buy XIU (Canadian stocks), XSP (US stocks), XPF (preferreds), XRE (real estate trusts) and XSB (short bonds).”

What did i do wrong ? Thanks

Seriously, 17% of your portfolio in one REIT security is too much. I gave proper weightings previously. Keep the REIT exposure to half that, at best. — Garth

#62 not 1st on 01.12.15 at 9:57 pm

#46 Pooh on 01.12.15 at 9:17 pm

—-

They kick in the difference either at sale or at renewal. Debt sure is a b*tch on the way down isn’t it.

#63 Jimmy Sausage on 01.12.15 at 9:57 pm

Money velocity is at a 55 year low and the labour force participation rate is at a 36 year low. So how is the US economy hitting on all cylinders? Lol!

It’s hitting a lot more than we are. — Garth

#64 Nemesis on 01.12.15 at 9:57 pm

#PropheticAfterThoughts… #”Flash!”… #”WhatCanWeDoToCombatThisMenaceFromAnotherWorld?”,Or… #EvenKlaatuHadAnObedienceCertificate…

http://youtu.be/JwRXQylkpwg

#65 GS on 01.12.15 at 9:57 pm

Interesting story from Brazil:
http://www.forbes.com/sites/kenrapoza/2015/01/08/brazil-housing-bubble-deflates-but-still-quite-large/

I’m sure there will be similar stories from Australia, Norway, etc soon.

As a Calgarian who is renting, I’m excited for potentially lower houses prices, the double edged sword is staying employed.

To all the Calgary bashers…. It is actually a very nice city by comparison to many urban centres. Albeit it loses out to Vancouver for scenery, Toronto for urbanism, Montreal for culture…. but I think it might be tied with with Ottawa.

#66 Freedom First on 01.12.15 at 9:58 pm

Love the photo for today Garth. Got me thinking how people want what they want when they want it. Then, when the SHTF like it has done world wide with RE, the crying and the whining starts over their own financial decisions which cost them the family jewels. Everybody wants to do as they please, and damn the fundamentals, but nobody wants to suffer the consequences of their financial insanity. And it is always the financially illiterate buyers who suffer.

Thanks Garth, your financial advice helps many people, as being liquid, balanced, and diversified always keeps the “fun” in fundamentals.

Interesting, how the RE industry and its accomplices has helped the masses world wide destroy their lives, recently, and throughout the past. Even just recently, hundreds of millions of peoples lives world wide have recently been financially destroyed, aided and abetted by the RE propaganda promoted leveraged and lunatic house lusting decision to buy what they want but cannot afford. It has not been easy over the years buying houses when he have dropped 50-60% amidst the suffering, but I had to. Owning became cheaper than renting. I say this without ego, as like Garth, I always go by the numbers. The numbers never lie. Numbers are big in re-balancing a financial portfolio. But who you going to believe? Garth, or the brains he was telling us look like they may have been RE_maxed.

#67 not 1st on 01.12.15 at 9:59 pm

#47 Timmy on 01.12.15 at 9:18 pm

20% of the population either works directly in the oil and gas sector or in an industry reliant upon it. Those businesses just took a 50% haircut.

You think the snow capped mountains are going to save this? Same ol boom and bust.

#68 Tom from Mississauga on 01.12.15 at 9:59 pm

Good thing I’ve got a basket of preferreds for days like today.

#69 No Canada, No on 01.12.15 at 10:04 pm

Wow, “oil & gas workers in Canada … the average wage is $130,000”
I though IT industry was a Holy Grail.

#70 Sheik Yerbouti on 01.12.15 at 10:12 pm

DELETED

#71 Tony on 01.12.15 at 10:14 pm

Re: #3 Kothar on 01.12.15 at 7:33 pm

Short term the Canadian dollar will fall but longer term will trade well above par vis-a-vis the U.S. dollar. Long term debt is much higher in America and the middle class is flat broke there.

#72 Nomad on 01.12.15 at 10:16 pm

The effect of the oil decline on some canadian financial stocks has been… impressive. From National Bank, through HomeCapital and Genworth all the way to Glusheff the money manager. Today was just impossible not to buy Bank of Nova Scotia at 61.80. Dividend is now 4.25%. Maybe I’ll regret it, but 17% below the 52-week high is a chance one can take.

While people are shaking getting their courage together to buy oil stocks at a possible bottom, I feel they are missing areas less affected by cheap oil (or profiting from it). Take entertainment like Amaya and Intertain, a trucking company like Trimac, or a company with lots of business in the USA (CCL.B).

Time to put your cash (GIC) to work.

Fear is the mind killer – Dune.

#73 Tom from Mississauga on 01.12.15 at 10:17 pm

Is the bond market calling for a recession?

Bond prices rise because capital flows from declining stocks, forcing yields lower. How hard is that to understand? — Garth

#74 hohoho on 01.12.15 at 10:20 pm

> … Why do I need to move? …

you don’t need to move, you voluntarily choose not to move. if you don’t want to shop around, you pay what the closest corner store charges.

#75 Ronaldo on 01.12.15 at 10:25 pm

Garth at work at the CBC commenting on the 87 stock market crash. Looking very young there Garth.

http://www.cbc.ca/archives/categories/economy-business/banks/canadian-financial-forecasters/garth-turner-sheer-panic.html

28 years ago, before I started growing hair and looking after my six-pack. — Garth

#76 Derek R on 01.12.15 at 10:26 pm

#3 Kothar on 01.12.15 at 7:33 pm asked
1)When I see the CAD worth 0.835 USD why do I need to pony up $1.20 to get 1 USD? It should be 1.165 as 0.165+0.835=1.
Not quite. The equation should be 1.1976 x 0.835 = 1, so you should pay 1.19 and three quarters of a cent. Which is about as close to 1.20 as you can get.

Who is buying or selling our dollar and where are those dollars going? If there are so many dollars around how is the value determined by buying and selling them. Do they simply vanish and then reappear?
People who need our dollar are buying them so they are going to them. The value is determined by haggling. People who have CAD are haggling with people who have USD. The two kinds of dollar aren’t vanishing. They’re just changing hands.

3)Why can no one get any kind of call right? There is one guy on here saying that CAD will go right back up, but hordes of others saying it is going down down down. And all these “economists” that work for banks and whatnot, they can’t get anything right either. Their calls were all wrong, about oil, about our currency. So if they are all wrong, why believe them!

Trouble is that economics isn’t like physics. There isn’t just one theory that everyone agrees on. So different economists make different forecasts because they follow different theories. Most of them are wrong, so most of the forecasts are wrong. The annoying thing is that some of the economists will be right but there is no easy way of knowing which ones. Only thing you can do is read up on the different theories and decide which one makes most sense to you. Then read the forecasts of economists who follow that theory.

#77 Smoking Man on 01.12.15 at 10:28 pm

I’ve Come realize that most of you, or a good chuck are communists.

You are rejoicing at the potential prospect of some hard working young families in Cowtown may experience some hard times.. That’s pathetic.

Many of you loath me, for the simple reason, I have a brain, I’ve never worked hard, gambled a bit and got lucky. I’M also not afraid to share, I also tell you about all the shit I face.

But I always look to the upside of everything. You pricks can learn a lot from me..

But your education keeps you from learning.

Your really bad people,

#78 saskatoon on 01.12.15 at 10:28 pm

#44 hohoho

1. just because i am in a particular place when i am robbed…doesn’t make the theft justifiable.

2. additionally, one simply can’t leave; it costs money to leave–and citizenship can only be renounced if future foreign citizenship (i.e., new theft) is guaranteed.

3. also, what if one can’t physically leave, due to illness, age, or other such issues?

perhaps the only exception is saudi arabian citizenship acquisition; but, they ain’t hiring.

#79 No Canada, No on 01.12.15 at 10:35 pm

Meanwhile, the banks are approaching or already down YTD.

From 1 year ago up to date (inc div where applicable).
Bonds (TLT): +29%
EWC (Canada stocks ETF): -3%
TD: 0%
RY (RBC): +2%
BMO: 2.2%

YTD (2015):
Bonds (TLT): +3.5%
EWC (Canada stocks ETF): -5.5%
TD: -7.5%
RY (RBC): -6.5%
BMO: -7.75%
SPY: -1.25%

Obviously Canada is under-performing.
Notice that the last time in 2007-2008 when crude was in such tailspin, Canadian banks stocks lost 2/3 of its fat. Yup, that’s 70% :)

So what we got in 2015:
Bonds – bubble. Check.
Oil and commodities – crashing. Check.
Currencies of commodity dependent nations – crashing. Check.
USD, JPY – bubble. Check
Houses prices in Canada, Australia – a joke. Check.
US stocks – bubble. Check.

Are we done with stocks, bonds and Calgary RE? Apparently not. But maybe we done with oil and Russian stocks market.

#80 ALBERTASTROPHE on 01.12.15 at 10:38 pm

Fort Mac is already dying. This will soon accelerate dramatically.

“It’s like the place has gone dead,” Ms. March says of Fort McMurray. At the downtown restaurant, she is sending servers home early, amid empty tables. “…The past couple of weeks, I’ve never seen it this bad here at the restaurant.”

http://www.theglobeandmail.com/news/national/murky-future-for-fort-mcmurray-as-oil-prices-fall/article22422885/

#81 Bobby on 01.12.15 at 10:42 pm

#46 Pooh, I’ll answer that. It’s quite simple, the bank will want some money from you so you have some equity in the property. No, 105% mortgages.
It will get ugly out there.

#82 everythingisterrible on 01.12.15 at 10:56 pm

#26 realtor are useless and liars
I agree, If they were somehow forced to relinquish control of the MLS website they’d be toast.
Lawyers have to draft up all the important papers anyways so I’m not really sure what purpose they serve nowadays.

#83 Rural Rick on 01.12.15 at 11:02 pm

So what happens to oil prices if the USA decides to make the export of domestically produced oil legal? Not that they would or anything.

I often wonder a unicorn stampede would mean to the soy crop. — Garth

#84 Leo Tolstoy on 01.12.15 at 11:12 pm

#12 Raj on 01.12.15 at 7:54 pm
Oil down , World war 3 situations on the rise . Looks like gold will be booming back … Your comments ?

The U.S. is booming. This by itself will keep a lid on gold. Gold is going below $1000 this year. Easy.

This year continues the death of commodities. Hard to feel sorry for commodity investors. Saw this coming a mile away. “Stupid is as stupid does” as one poster put it.

#85 CalgaryRocks on 01.12.15 at 11:22 pm

#15 Brian Ripley on 01.12.15 at 7:56 pm
PURPLE RAIN

I have my Monthly Absorption Rate & Months of Inventory charts updated:

http://www.chpc.biz/mar-moi.html

Calgary’s Monthly Absorption Rate (purple plot line) drops to 25%-ish from the near term peak 8 months ago at 55%-ish.

Awesome info!

#86 Washed Up Lawyer on 01.12.15 at 11:23 pm

#79 ALBERTASTROPHE

Re Ft. McM Restaurant Trade:

The article mentions Ms’s B’s. I eat there once a week or so. The BLT platter with fries and gravy is good. The restaurant is quiet now. I prefer the Kozy Korner further down on Franklin Avenue. Lower prices and free newspapers. It is quiet now. I commented a couple of days ago about the lineups at my Timmies in Ft. McM being much shorter.

Anecdotal stuff but visible.

#71 Nomad

Yes, trucking ventures might be a bet with lower fuel costs, especially if they are hauling washing machines and dryers built in Ontario to the West and south to American markets. Or are washing machines and dryers still being built in Ontario now ? They used to be great.

What does Trimac haul? Are they hauling oil, pipe, rigs, Cat D9’s? Do they have a presence beyond Alberta?

#87 squidly77 on 01.12.15 at 11:25 pm

There are still 2 massive projects on the go in Alberta. For now. My feeling is that they will still proceed, first up is Fort Hills, this is a truly gargantuan project budgeted at 17 Billion dollars.

The second is the 9 billion dollar Red Water Upgrader, 40 KM from EDM, also dubbed the NW upgrader/Diesel fuel refinery. These 2 projects will not save Alberta, not even close.

The exploration/drilling industry have been knee capped, devastating rural jobs within 100 KM of Calgary/EDM are gone. For a long, long time.

Exploration has stopped, completely.

The juniors have all been smacked over the head, some, desperately hoping to be taken over by a major.

My industry EPC (engineering, procurement and construction) is under immense pressure, mass lay offs have both happened already in Calgary, and trust me its only just begun. The MSM is reporting nothing.

The majors in the concrete towers along 4,5,6 Avenue, have already let thousands, and I do mean thousands of people go, its tragic, but it was all to predictable.

Prices always return to their historical mean, you don’t need an expensive education to know that, just common sense.

Oil should go to $35BBL from $147BBL and hold after going lower in the coming months.

Nat gas should go to $2GGJ from $15,50GGJ before stabilizing at about $3.50GGJ.

Mortgage interest should rise to about the 8% 5 year fixed level.

And house prices will drastically fall, bank on it.

Historical mean prices can not be denied. Ever.

#88 Converting Currency for Dummies on 01.12.15 at 11:37 pm

Converting Currency for Dummies:

$1 US/$0.835CDN = $1.1976 ($1.20)

But don’t forget about the Big, usually around 1.5 or 2%. This means that you’ll actually pay $1.22 CDN to buy a US dollar, but only get $1.18 CDN when you sell a US dollar.

The house ALWAYS wins.

#89 fisheman on 01.12.15 at 11:41 pm

Hey Smoking Man, In the later 70’s I got my hands on 6 tickets to a poetry reading on East Hastings By Charles Bukowski. 2nd row in the middle. I own you.

#90 NoOneOfConsequence on 01.12.15 at 11:44 pm

There are a few things that haven’t been mentioned about oil, gas and construction all across Canada.

For those of you who like to research – do a search on the amount of tax revenue collected by governments across the nation. Now look at how many provinces boast “balanced budgets”. Now project tax revenue when oil is valued at 50% less than three months ago. Now tell me how many budgets are balanced. Can you project where construction across this country is headed?

Now for the smarter of you all – do a bit of research on how debt-equity ratios are calculated for oil companies across the nation. Banks lend money based on assets. Assets of oil and gas are in reserves. When the asset drops in value by 50% – how does that affect the borrowing capacity of oil and gas companies?

The oil and gas companies that are cash rich, with little or no debt are going to make out like bandits. With just a few hours of research – one could probably come up with a fairly successful trading plan to set themselves up quite nicely.

These sudden market collapses are opportunities for us all. For reference – go check the stock values of financials and banks immediately following the GFC.

Makes you think doesn’t it…?

#91 devore on 01.12.15 at 11:48 pm

#76 Smoking Man

You are rejoicing at the potential prospect of some hard working young families in Cowtown may experience some hard times.. That’s pathetic.

Well, young boys will do what young boys do. They should stop being victims, and strike back.

#92 DeFrauded2 on 01.12.15 at 11:49 pm

…south of Nanjing there exist seven cities still under construction in the Jiangning district. Each city is equipped with an underground metro, universities, skyscrapers, luxury malls, golf courses, rec centres and housing for millions… Empty. This in China of course ( See Jim Richards Death of Money page 99) A colleague of mine lives in Luanda Angola and has sent me pictures of nearby Kilamba Kiaxi, another huge, and one of many Chinese mostly unoccupied urban developments capable of house millions. Think 416… Think of the madness. They can not stop the building or their economic reason to be collapses. Consider the Chinese demographic, and the African as well… The Chinese population growth has been limited by government policy, and the cities being by the Chinese in Africa will be used to house who? Maybe WHO…
Real-estate madness seems to be borderless, global in nature, and so the question is how do we fit in? Just askin’….

#93 Entrepreneur on 01.12.15 at 11:52 pm

“Love thy neighbour”…we should be helping one another. There is a reason for this as you may need help one day, big or small. It comes around.

Realtors should not have that much power. I know from experience that when something goes wrong: group together, talk it out, find experts. May not solve problems but it will soften hardships. The youth have one advantage over us oldies, you have the internet.

#94 Andrew Woburn on 01.12.15 at 11:54 pm

Reality has just stuck a pin one of the goldbugs’ favourite balloons. One of the staple claims of goldhumper websites is that China has USD 4 trillion in reserves and is just waiting for the right moment to foreclose on America. So buy gold. NOW.

Great movie script but now Bloomberg reports that the Chinese are not going to accumulate any more dollars and they are going to start spending their foreign exchange reserves on supporting commercial expansion in foreign markets. China has already announced it plans to support the development of African railways.

“China’s generation-long accumulation of foreign-exchange reserves may be at an end, reshaping monetary policy and eroding a source of demand for U.S. Treasuries.”

http://www.bloomberg.com/news/2015-01-11/-4-trillion-peak-for-china-s-stockpile-of-foreign-currency-may-free-pboc-s-hands.html

China accumulated all these reserves in keeping the yuan from appreciating against the dollar. China is reducing its reliance on exports so it can afford to let the yuan rise.

When a Chinese company got paid in USD they would otherwise sell those dollars for yuan. There would be less yuan in the marketplace and more dollars. This relative change in market availability would increase the price of yuan in dollars. To keep these dollars off the market, the Chinese central bank would print yuan and buy them from the exporter. Eventually the bank accumulated $4 Trillion.

If the Chinese wind down its USD position over a number of years it is doubtful forex markets will really notice. The dollar crash that goldbugs have been waiting for will have to keep on waiting like Godot or the Mahdi. Most of the other claims on gold sites are equally reliable and dissolve after an hour of googling. Hey, have you heard the one about how the Rothschilds secretly own the US Fed as part of their plan for the New World Order? Or was it the space alien lizards? It’s so confusing.

#95 Washed Up Lawyer on 01.12.15 at 11:54 pm

# 86 Squiddly 77

“The second is the 9 billion dollar Red Water Upgrader, 40 KM from EDM, also dubbed the NW upgrader/Diesel fuel refinery. These 2 projects will not save Alberta, not even close.”

Is this the one that the Provincial Government is a partner in? A goofy investment. Probably won’t be finished. Just like the Provincial Government’s $1.3B investment in the carbon capture and sequestration enterprise with Shell Quest.

No sane private enterprise would have fully funded either.

#96 Greg on 01.12.15 at 11:55 pm

I experienced a half-funny, half-horrifying display of house horniness in November 2014:

Waiting to get my hair cut in my neighbourhood salon in SouthWest Calgary, a nice area with plenty of $1 million+ particle board mansions. Houses that were $400k ten years ago.

In the waiting area 2 women in their 30’s trying to out-do each other about how well they are doing in real estate.
It went something like this:

Woman #1: “we got an awesome deal only paid $850,000. After we re-did the kitchen it’s worth like $1 million already. we made like $50,000! this summer”

Woman #2: “yeah we got in last year and I think we are up like $100,000 or something already. We are thinking of buying a condo downtown as an “investment” with the “equity.”

They were throwing around these numbers like the meant nothing. $850,000 here, $1 million there, etc. I don’t think they had any real sense of how much cash that is and how long an employee (even a six figure Oilpatch employee) needs to toil to save that much.

Of course they had $700 Canada Goose jackets, and 4 kids with them playing on separate Ipads, and shiny SUVs in the parking lot.

This type of mentality is rampant in Calgary. It is going to be an interesting year.

#97 Nemesis on 01.12.15 at 11:55 pm

#TheUpsideOfOkanaganLandLords… #SpoilerAlert:DoesYourRentierWearDentures?…

http://youtu.be/7IYQU0hJHNY

#98 Mark on 01.13.15 at 12:03 am

“don’t bet the farm on your FX theory Mark … fundamentally, there’s no reason why a currency should strengthen because of mis-allocation of resources by a misguided populace …”

At least Canada used such investment, or malinvestment as you would call it, to build an export capacity in a product the world needs and wants over the long term, oil and gas. The USA, they borrowed essentially to build a rather worthless and unproductive upper class, extravagant infrastructure which can no longer be maintained on the former terms, and a system of entitlements that is mostly unfunded and ready to bankrupt the country — and have only mountains of debt and a divided population to show for it.

Those who think the CAD$ belongs down in the 60 or 70 cent range don’t want to give any credit for the relatively prudent fiscal management that has occurred in Canada over the past 20-30 years. They want to give no credit for the austerity. They want to deny that there are extremely strong deflationary forces.

BTW, I practice what I preach, and the recent decline is looking to be an awesome entry point to shorting more USD$. Also, silver stocks have been on a tear lately, making up for the entirety of my CAD$ losses both on the currency and equity side of things, with even the modest allocation I have to them.

#99 Smoking Man on 01.13.15 at 12:04 am

#88 fisheman on 01.12.15 at 11:41 pm
Hey Smoking Man, In the later 70’s I got my hands on 6 tickets to a poetry reading on East Hastings By Charles Bukowski. 2nd row in the middle. I own you.
……..
Own me for what. I’ve been watching his interviews at the University of Google.

He has a bit in there about writing..

Sentences got to go.. Bing Bing Bing.

Wish he was still alive.. In my book they go Boom Boom Boom.. Action, Action Action…

No, “The sunlight reflected off the mosquitoes balls, the smell of morning dew..”

The balls part was sarcasm.. Should have read, balls should have been pond.

I’m getting good at this, until I discovered via this pathetic blog, I have real, original creative skill. I know what I want to do for the rest of my life.

Write Fiction. Un compromised by reading, which I never do.

My technical skills slowly improving.

A Hard Core Dyslexic discovers writing. That’s a story in it self.

I mean, look at the Smoking Man character I’ve created on here. Hate and loathing..

#100 Piccaso on 01.13.15 at 12:06 am

#86 squidly77

Fort Hills… that’s the one that needs $90 oil

#101 Shawn Allen on 01.13.15 at 12:07 am

The House Always Wins

Converting Currency for Dummies:

$1 US/$0.835CDN = $1.1976 ($1.20)

But don’t forget about the Big, usually around 1.5 or 2%. This means that you’ll actually pay $1.22 CDN to buy a US dollar, but only get $1.18 CDN when you sell a US dollar.

The house ALWAYS wins.

*****************************************
Simple solution, own the house (banks)

#102 devore on 01.13.15 at 12:07 am

#87 Converting Currency for Dummies

The house ALWAYS wins.

Implying currency exchange is gambling or a rip off? Sounds like a great money making opportunity for you, if you believe so.

In a marketplace, there are always TWO prices. People forget this, because they buy most things at a retail store at a fixed price, and basically never sell anything. But a retail store is only HALF of the market; the sell side.

Everything has a buy price, and a sell price. The buy price is always lower than the sell price; that’s simple logic, otherwise arbitrage would even them out instantly. The difference between the two prices is called the spread.

For this reason, there is no such thing as unsellable. There is always a buyer, at some price, just maybe not at the asking (buy) price.

Walmart buys a widget @ $2.00, and puts it on the shelf for $3.19. A currency exchanger buys dollars at $1.20, and sells them at $1.24. Seems like the house always wins, right? Easy money, yes?

Wrong. The “house” has expenses. It must stock the item you want to buy. You’d be not a happy customer if you went to the currency place, and they had no dollars to sell you. They must carry inventory. This has a cost. They must have previously bought it, at whatever the price was in the past, and carry the risk of prices going lower before they can sell it. Finally, they must make a profit for providing you this wonderful service, where you can go to a store, and at any time of day or week buy whatever your heart desires. In doing this, they also face constant competition, forcing their profit margins to the bare minimum.

But yeah, businesses are greedy and corporations are just out to screw everyone. You can think about that next time you’re perusing the Liquidation World flyer.

#103 omg the original on 01.13.15 at 12:18 am

WILL T.O. AND YVR EVEN NOTICE THE MISERY IN CALGARY

There are two kinds of bad decisions – uninformed decisions and JUST PLAIN STUPID DECISIONS.

A 30 year old buying an over inflated house in T.O. or YVR when all they have known in thier life is steadily increasing prices is just uniformed. It will be sad when they get slaughtered in the coming correction.

A 30 year old buying an over inflated house in T.O. or YVR after seeing the mess in Cowtown is just plain stupid. They deserve everything they get when markets correct.

And for anyone older than 40 who has been sucker into the YVR and T.O. markets at nose bleed prices – you are a lost cause.

#104 45north on 01.13.15 at 12:19 am

Waterloo Resident: Want to see a scary chart of oil prices over the past 3 years, a chart that will have you scratching your head and asking “What the heck is going on?”

the fall is so precipitous it just doesn’t make sense. I would have been the last one to call it.

#105 squidly77 on 01.13.15 at 12:19 am

Washed up lawyer.

Is this the one that the Provincial Government is a partner in? A goofy investment. Probably won’t be finished. Just like the Provincial Government’s $1.3B investment in the carbon capture and sequestration enterprise with Shell Quest.

I just finished a 30 month stint at Quest CCS. Red water is different but still kind of wacky, from what I understand the provincial government has agreed to accept bitumen in lieu of royalty’s, I really don’t know how that’s going to pan out. I mean what’s next, taking grain instead of taxes.

How ever, the job is proceeding and it my guess that it will come to fruition.

#106 Happy Renting on 01.13.15 at 12:23 am

#76 Smoking Man on 01.12.15 at 10:28 pm

Schadenfreude certainly isn’t “taking the high road”, but I would guess anyone indulging in it has, at one point or another, had their face rubbed in being “a have-not province”, “a lowly renter”, “someone poor from the ROC”, etc. They’re taking their turn gloating after having been gloated over.

Besides, when I express sympathy for the financial hurt people are experiencing, you’re thinking “bleeding heart” and “serves them right for being conforming, obedience certificate holding sheep, trading their time for money!”

#107 Not 1st on 01.13.15 at 12:24 am

Garth the Bank of America just shorted our banking sector. Doesn’t that scare you a little bit?

#108 Ret on 01.13.15 at 12:33 am

Gotta love the owners of multiple properties who think that there properties are special and could never drop in price.

I kinda get the love affair with principal properties that they live in but rentals, cottages, student properties, condo rentals???? If you owned multiple properties, why wouldn’t you kept the best and sell the rest?

Who ever went broke cashing out and taking their profits? Ah yes, I remember the condo meltdown in the GTA back in the 1990’s. Paradigm shifts trump black swan events like $45 oil.

#109 Ontario's Left Coast on 01.13.15 at 12:36 am

#76 Smoking Man: ”Schooled… Communists… Blah, blah, blah…

People don’t loathe you because you have a brain… They loathe you because you are an arrogant, self-obsessed toolbag completely incapable of using said pickled brain.

#110 lifelong oilers fan on 01.13.15 at 12:41 am

Lots of talk about Calgary, what about Edmonton? Please tell me my wife is wrong.

#111 Smoking Man on 01.13.15 at 12:46 am

The mayor of Niagara falls, a brain.

He figured out, gamblers, should have free drinks, and allow smoking.. Pleading with the libs, AK communists.

Gamblers, drink and smoke.. Revel, died because they banned the high rollers.. Smokers.

Will teacher wynee do what’s right for economy, the workers of the casino..

Not a chance..idiots.

#112 Carpe Diem on 01.13.15 at 12:47 am

Hey #95 Greg

I see this on the soccer pitch in Ottawa.

Bimbo’s talking shit about their realtor or construction husbands.

I’ll see how next year brings in 6 months!

I love my wife. She understands all that Jones talk is not worth a (hopefully) nice retirement.

She wants this and that. I tell her choose cause we can’t have both. I do the same for the 3 kids.

She is starting FT work this week. She understands the budget doesn’t change. The savings go up.

Let the fools have the bimbos. I got a chick 10 years younger who understands and isn’t a bimbo but one hot, smart women.

Now I need to grow up and see the kids off to work because mom is going to work after 10 years being a FT mom!

Goodnight ….

#113 omg the original on 01.13.15 at 1:12 am

#6 For those about to flop…
I am a scaredy cat when it comes to investing and was wondering what percentage of net worth any of you with two minutes of spare time can work out you have invested in the stock market.
————————-

Remember….

THE STOCK MARKET IS LIKE A CASINO……..but it’s odds favour investors over the long run.

Stay long my friend and stay long for a long time.

And know your limits and strengths – I cannot pick stocks, but what I can do is hold my nose and buy when everyone else is scared. Mostly ETFs right now but some individual stocks. And no wacko stuff, like inverse or levered ETFs.

I have had 80-100% of my investable assets in the market since 2000, right now I am 90% in. I have never sold anything in any of the three meltdowns since 2000 – instead I kept averaging in more.

I also have a couple of defined benefits pensions and real estate – without those I would be a bit more conservative.

#114 Berniebee on 01.13.15 at 1:16 am

#6 For those about to flop…

For me:
40% in equity ETFs divided three ways equally Canada/USA/International

20% bonds

40% house value at a conservative evaluation.
Pretty high percentage of our net worth, but our first financial goal (Which excluded all others.) was to pay off our mortgage. We first bought when mortgage rates were in the 10-11% range. Especially when you consider that a mortgage is paid with after tax income, the interest we saved by throwing every spare dollar of cash at our mortgage was a pretty good investment at the time.

#115 omg the original on 01.13.15 at 1:22 am

The annoying thing is that some of the economists will be right but there is no easy way of knowing which ones. Only thing you can do is read up on the different theories and decide which one makes most sense to you. Then read the forecasts of economists who follow that theory.
———————-

1) do not BLAME the economists we just study the “allocation of scarce resources” – then somebody got the idea that we could ALSO FORECAST – WE CANNOT

2) those that are right are JUST LUCKY – there have been numerous academic studies done that demonstrate that forecasts are only correct by chance. If somebody gets it right one year they will likely be wrong the next. And if by chance they get it right two or three years in a row they will likely get it wrong for several years thereafter.

3) here is the only thing you can bank on – PEOPLE LIKE TO BUY STUFF and over the past few centuries there are more people buying stuff and the worlds economy goes ticking forward with growth. It may not be smooth and may stumble sometimes but does just keep growing over the long run. BET AGAINST THAT AND YOU LOSE.

4) AND FINALLY – NEVER TAKE FINANCIAL ADVICE FROM A BUNCH OF UNDEREMPLOYED GUYS ON THE COMMENTS SECTION OF A BLOG

#116 Cici on 01.13.15 at 1:38 am

Sad it is, but well, they can’t say that they weren’t warned.

#117 Mr Bashinski on 01.13.15 at 2:08 am

“the Bank of Canada will be into the forex market, spending our reserves. ”

No way…Poloz has spent his entire time in office bashing the loon…he’s just getting started.

All kinds of executives have been speaking out against his attacks…because a 1940’s loon is no good for anyone. You have to remember that Poloz was a bureaucrat with no experience in handling an economy…in the export dept. He wants a rock and trees economy….because that’s all he knows.

#118 Mark on 01.13.15 at 2:12 am

“So what happens to oil prices if the USA decides to make the export of domestically produced oil legal? Not that they would or anything.”

Nothing. The USA still has a domestic deficit of oil, to the tune of between 6-10 million barrels per day which they must import from a long list of nations including Canada. The whole issue is a big fat red herring.

Eliminating the “ban” might help resolve regional imbalances, ie: where a Canadian, Mexican, Russian, Cuban, or Japanese refinery is factually less expensive to ship US-produced oil to than an American refinery suitably configured. But it won’t fundamentally alter the price of oil.

#119 Tim on 01.13.15 at 2:12 am

Is there some financial or tax advantage to leaving a house empty for several months instead of accepting a bit less rent? We have made several offers for rentals in Vancouver below what they are asking. These places sit up rented for several months. It seems to me that they would lose less if they accepted less and got someone in the house paying something as opposed to nothing. If there is an advantage, should we be suggesting that we pay want they ask but get a month free? This would work out to be the same amount over the course of a year. Can anyone explain this to me?

#120 Fed-up on 01.13.15 at 2:42 am

#76 Smoking Man

You are rejoicing at the potential prospect of some hard working young families in Cowtown may experience some hard times.. That’s pathetic.

—————————————————————————-

No what is pathetic is people who live in the world’s second largest land mass with only 35 million people in it, rejoicing that it costs over 1 million dollars to put a decent roof over your head in its major cities and the “Toronto and BC market, are both poised to take off into the stars this spring”. Or when oil and energy costs sky rocket and you can now earn over 100k as a high school drop out working in the “patch” as you and your employer stick it to your fellow citizens.

Know what? I think we should also “rejoice” when the costs of food, transportation and other living essentials more than double in price as well. We should do so because those who are fortunate enough to be in those industries will be even wealthier and therefore, we should be happy for them. Heck, it should even be hyped by Global TV every night ORRRRR better yet, even have their own dedicated television networks airing a genre of such shows depicting how hard it is for families to scrape up enough pennies for meatloaf. “Sorry Mrs. Jones, you should have bought that ground chuck 3 years ago and stuck in the freezer as you and your family have now been priced out of the market, due to market supply and demand”.

Why not???

A nation chalk full of Kool drinking and “Smoking” idiots.

#121 David on 01.13.15 at 3:19 am

There might be blood on the streets, but maybe not enough which is frightening. This is not Alberta’s first rodeo so to speak. The carnage will be very real, capex will be cancelled, dividends will be cut, over leveraged and under capitalised junior companies will vanish and zombie investments will languish in eternal limbo.

http://davidstockmanscontracorner.com/why-oil-is-headed-below-35barrel/

#122 Corban on 01.13.15 at 3:43 am

Oh Calgary my Calgary!

I’m one of the rare a$$holes who enjoys the snowy drive. The 15 minutes I spend pounding snow here is way more fun than doing the Langley to Burnaby commute every day. These guys don’t know what traffic is.

#123 broadway skytrain on 01.13.15 at 3:46 am

oil 44.44 accelerating losses

is this not a symptom of a sick patient(world econ?)

or is this is going to be one mother of a buying opp soon.

30-35 buy with both hands

#124 Lurker on 01.13.15 at 4:15 am

“Cowtown Death Watch: While nobody relishes tough times for others, this was so predictable”

Actually I do….. but I work in the insolvency business :)

#125 Lillooet, BC on 01.13.15 at 4:32 am

Yup, the drop in the price of oil is truly unexpected and shocking. But I still don’t think $50 oil will stay for the entire year. Here’s why:

Oil companies around the world are already cutting their budgets by 20% or more, which will quickly lead to a proportional production cut. Layoffs in the oil industry are happening worldwide, while consumption rises inexorably. Record numbers of vehicles are being sold in China and India both with populations over a billion each, and growing. The 3rd world countries are seeing growth in their middle classes, and the first sign of prosperity is when they buy a car or truck.

Airplanes and airports are as busy as ever, oil is converted into a thousand and one products from paint to roofing tar, ashalt shingles, highway asphalt to casings for electronics, to fertilizers, vinyl for the siding of houses and buildings … the list is endless.

And from Kunstler’s blog today:

“The current theory is that Saudi Arabia can ride out $40-a-barrel oil because of its built-up cash reserves. But that seems mostly a schematic idea. Long before Saudi Arabia goes absolutely broke, it will face terrible internal political strife between the clans and the princes who happen not to be descendants of Muhammad ibn Saud — which represent only 15,000 of the roughly 29 million in the kingdom, and only about 2,000 of those actually in the power loop. King Abdullah is past 90 years old, a mere bit of fragile baling wire holding the whole thing together.”

Yes, Saudi Arabia can talk tough, but their oil revenues has been cut in half. The Saudis who used to get that oil revenue are not getting it anymore and will put pressure on their leadership to up the price of oil again. Saudi Arabia is not immune to the forces of greed which are dependent on the high price of oil.

So again, I predict the price of oil will rise sooner than later. And I predict it will be back above $90 before year end.

#126 Millenial on 01.13.15 at 7:16 am

#93 Andrew Woburn on 01.12.15 at 11:54 pm

Reality has just stuck a pin one of the goldbugs’ favourite balloons. One of the staple claims of goldhumper websites is that China has USD 4 trillion in reserves and is just waiting for the right moment to foreclose on America. So buy gold. NOW.

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

China, the biggest buyer of US debt, has stopped (or seriously slowed down) buying US debt. Long-term, it’s probably not good for the fiat money system when governments start refusing to buy each others debt.

I don’t know any mainstream goldbugs (Rickards, Schiff, Faber, etc.) who think that China would ever deliberately dump treasuries to tank the dollar. That would be suicide for them. Moreover, I’d argue that a lot of goldbugs aren’t focused on the US dollar, they look at it from a more global perspective with multiple currency debasements in mind.

#127 Vanecdotal on 01.13.15 at 7:19 am

#39 Suede

That would be generalizing. Depends where you live in BC. In our neck of the woods, suburban Van, SFH’s “jumped” or “skyrocketed” an average of 4-5% in value this assessment… after being down, or sideways for last few years. (they’re not even keeping up with inflation), i.e. losing value year over year even with this recent “increase”.

SFH’s over $1 million have flat lined (but are still losing value to inflation), or are assessed lower than last year for the first time in recent memory. According to assessment data, most buyers in the past year in this area actually overpaid, most by a bit, some by a helluva lot (6 figures).

That said, I agree with what you’re saying, if we had to sell anytime soon, good luck getting assessed value from a savvy buyer. Would need to definitely find a greater kool-aid drinking fool, but apparently they’re still out there. It’s the Wily E. Coyote moment in slo-mo, housing has leapt over the cliff, but it’s still hovering in mid-air puffed up by inflated assessments.

#128 Oil is going to $20 on 01.13.15 at 7:45 am

Oil is falling yet again Alberta making your costly and most dirty oil more worthless. Yes Alberta oil sands are almost worthless at current levels since profit is not possible. A tsunami of bankruptcies is going to hit Alberta HARD! Financial pain is coming.

#129 Oil is going to $20 on 01.13.15 at 7:49 am

You delusional people of Alberta with you why oil won’t be $50 for the whole year nonsense or why Saudi Arabia Can not survive $40 oil. Do you clueless and soon to face a tsunami of bankruptcies understand Saudi Arabia can produce at the cheapest production costs while canadian oil sands is THE MOST EXPENSIVE IN THE WORLD. Alberta is finished.

#130 ANON on 01.13.15 at 7:52 am

#123 Lillooet, BC on 01.13.15 at 4:32 am
Yup, the drop in the price of oil is truly unexpected and shocking.

Maybe in 2008 that would have been true. But the triangle formation in oil price has been evident for some time. What is shocking is that nobody paid attention this time around when the obvious was staring back at them.

#131 maxx on 01.13.15 at 8:38 am

#49 ANON on 01.12.15 at 9:28 pm

“Any “Dear God we promise not to piss it away” bumper stickers sightings yet?”

Excellent! Went through the ’95 job-loss nightmare and swore to save like there was no tomorrow if another good one came along. We were lucky, and for 20 years since, we shoveled into savings like coal into a furnace. No $#@&^% way we’re ever going to risk/waste it. Ever.

When people have actual savings, their immunity to realtards and salespeople is amazing. On the other hand, most who borrow have no clue as to value.

#132 pbrasseur on 01.13.15 at 9:06 am

Bank of America (a stock I proudly own) chief investment strategist is betting against Canadian banks

http://www.msn.com/en-ca/money/topstories/why-bank-of-america-says-you-should-bet-against-canada%E2%80%99s-banks/ar-AA84P9B

Those shorting banks are gamblers, not investors. — Garth

#133 Capt. Obvious on 01.13.15 at 9:20 am

Just in time, the internet archive made available many old MS-DOS games online. Included is Lemmings, offering simulation opportunities to those not familiar with the dynamics of lemming life.

#134 TurnerNation on 01.13.15 at 9:23 am

We must sent investigative blog dog Bigarider to Calgary to see why housing not go upa.

#135 TurnerNation on 01.13.15 at 9:30 am

Kinda funny how our elites give us our enemies (which shall not be ‘liberated’ by the ‘beacon of democracy’) and an enemies list (al la Nixon’s – before my time) of Cuba, Russia, N Korea, the nebulous ‘Islamic states’ and then on cue give us some made-for-TV events with no proof of alleged hacking events.
Yea I really trust the war machine’s newz output.

Ohh we will splutter and shake our fists at ‘them’! At whom? 500lbs is all it takes.
We are living in a totally fabricated media time.
Walk by a magazine rack. Every single cover photo is Photoshopped. Not one ounce of reality.

And why is the H regime buying votes and wasting our tax dollars with auto industry handouts in Ontario when capitalism dictates these cars may be made much more cheaply in (other) Second World countries?

#136 habbit on 01.13.15 at 9:34 am

Enough with the Alberta bashing please. We are in Saskatchewan and have seen the young people in the past head to Alberta for a better future. Same applies to many people from all over eastern Canada. The booms there have given many a better life and much needed tax revenues for all. My wife and I are from Ontario and settled down here in Sk. as most folks went further west. We like Alberta but a little too busy there for us. We visit the east once a year or so. Point is we have an awesome country and when an area is doing well we should all celebrate our good fortune. When others are not doing so well we need to ask how we can help. Yes Albertans can be a little arrogant but the same can be said of others. If we want to keep this great country united and strong we need to stop the envy thing.

#137 Mike in Toronto on 01.13.15 at 9:49 am

#128 Oil is going to $20

It’s a shame that Harper didn’t have somebody in his cabinet who could advise on this scenario.

Any idea who’s going to clean the tailings ponds now that the oil is gone and Alberta’s bankrupt?

#138 TurnerNation on 01.13.15 at 10:07 am

Traders. Do not harden your hearts. Look for signs. Mostly saying horray for our side.

#139 Obvious Truth on 01.13.15 at 10:47 am

#124

What if the Saudis sell twice as much oil at 40 as they would at 80. Point is that they don’t have the monopoly they had and are now competing on price.

All the stories you hear are just people looking for something to say. Price tells the story every time. It’s telling you traders would like to put a 20 on it. And nobody is paying more than 60 two years out.

Saudi budget deficit stuff is ridiculous. You could say the same about Brazil Russia Venezuela canada and a whole lot more. Nobody cares about these places.

Europe japan china and India benefit the most. And that’s where most of the worlds people, economic activity and political clout lie.

People in Alberta have been told they are special. Garth has had a few signs lately to remind you that nothing is special. Today’s sign should help too.

Personally I feel terrible for people who work hard and want to raise families. It’s going to get very tough. But the kind of bs that tells them oil and house prices will always go higher is not what they need to hear. Thats what caused the problem.

#140 someone in BC on 01.13.15 at 10:59 am

@habbit #135

“Yes Albertans can be a little arrogant but the same can be said of others. If we want to keep this great country united and strong we need to stop the envy thing.”

Albertans deserve to have their noses rubbed in this crash! I live in BC and for the past 15 years all I’ve heard from people in Alberta is how much better it is there (which may be true, but you get tired of hearing about it). The smugness was just too much. Anytime someone would talk about an economic problem in another part of the country, there would always be someone from Alberta there to say: Move to For Mac and all your problems and the country’s problems will be solved. Albertans, especially those online, have not seemed to care one iota about economic problems in other provinces, like BC or Ontario. In fact, as manufacturing in Ontario took a hit, some Albertans online seemed to rejoice in Ontario’s economic woes. I agree that unity is important but the Albertans started this fight. It’s the Albertans over the past 15 years who have been laughing at the rest of Canada and rubbing in their successed and reveling in our struggles in other provinces. So now it’s rest of Canada’s turn to laugh at Alberta. Sure glad I didn’t move to Fort Mac!

#141 Mike on 01.13.15 at 11:06 am

In Edmonton sentiment is changing FAST! 2 weeks ago everyone was “Oh oil will bounce back to $70 in a couple months”. Last week all you could hear was Gulps and backsides puckering up. This week it’s “$50 oil is going to be here for at least a year”, and there’s already rumblings of a sales tax. My company (of course directly related to the oilsands) is already discussing laying off employees. Our Q1 sales are supposed to be about 1/3 of what we were originally projecting. The big sites are using up their parts inventories and (so far) not placing orders to replenish. I’ve been trying to jump ship since August with no luck (and my profession is supposed to be in high demand)

#142 :):(Ying Yang on 01.13.15 at 11:32 am

#110 Smoking Man on 01.13.15 at 12:46 am
The mayor of Niagara falls, a brain.
He figured out, gamblers, should have free drinks, and allow smoking.. Pleading with the libs, AK communists.
Gamblers, drink and smoke.. Revel, died because they banned the high rollers.. Smokers.
Will teacher wynee do what’s right for economy, the workers of the casino..
Not a chance..idiots.
…………………………………………………………………….

Can always go to Seneca Smoking Man, that’s why I did I can smoke there.

#143 cramar on 01.13.15 at 11:34 am

The Detroit Auto Show reflects that business plus optimism is booming in the U.S., and “excess is back in fashion.”

http://www.forbes.com/sites/joannmuller/2015/01/13/want-proof-the-economys-booming-check-out-the-detroit-auto-show/

#144 pbrasseur on 01.13.15 at 11:55 am

Those shorting banks are gamblers, not investors. Garth

Sure enough, but I still find it interesting that a chief strategist at a major American bank would say that about Canadian banks.

Besides there are plenty of ways of NOT being an investor and shorting a stock is not the worse. Not if you think the intrinsic value of something is much lower than its current market value, which is apparently what Bank of America thinks about our banks. In this case the speculating aspect comes from the time limit which forces you to time the market, you can tell something is overvalued but can never tell when the market will acknowledge it.

I will not short them, but I wouldn’t touch Canadian banks stocks with a 10 foot pole!

#145 Rusty Venture on 01.13.15 at 12:11 pm

@habbit
I agree. Far too much schadenfreude here when it comes to Alberta’s problems.

However, present government’s should heed this lesson and try to nurture a diversified economy. The Harperroids expended far to much political capital on the oil sands and neglected manufacturing and farming.

#146 Grantmi on 01.13.15 at 12:21 pm

Even Deutsche Bank getting into the Musical Chair call on Canadian housing. http://read.bi/1KG0uCO

But to me.. this is the Elephant in the room. http://screencast.com/t/pIKJWMS2j

#147 waiting on the west coast on 01.13.15 at 12:22 pm

#126 Vanecdotal on 01.13.15 at 7:19 am

“It’s the Wily E. Coyote moment in slo-mo, housing has leapt over the cliff, but it’s still hovering in mid-air puffed up by inflated assessments.”

Perfect visual!

#148 waiting on the west coast on 01.13.15 at 12:26 pm

#142 cramar on 01.13.15 at 11:34 am
The Detroit Auto Show reflects that business plus optimism is booming in the U.S., and “excess is back in fashion.”

I invested in a software company that is at the show. They said that while the show is “ON”, the local economy is still in bad shape.

Be careful of how things are portrayed by the media/local politicians. The people of Detroit have obviously pushed through the worst of it but an event is an event. Burning Man reflects a lot optimism and energy but then disappears for a year without a trace in Nevada.

#149 Ronaldo on 01.13.15 at 12:26 pm

#135 Habbit –

”If we want to keep this great country united and strong we need to stop the envy thing.”

Good luck with that.

#150 waiting on the west coast on 01.13.15 at 12:29 pm

142 cramar…

Or I could learn to read and notice they were talking about the US economy in general… ;-)

#151 Smoking Man on 01.13.15 at 12:35 pm

Savers Alert… Told ya.

http://m.theglobeandmail.com/report-on-business/top-business-stories/some-market-players-now-think-bank-of-canada-could-cut-interest-rates/article22423591/

#152 Iconoclast on 01.13.15 at 12:43 pm

The chinese have announced they’ll not be accumulating USTs. (treasury bonds)
The Saudis are going to be liquidating savings to keep their gravy trains rolling. All USTs.

Who is going to buy the trillion dollars worth of bonds to keep the US government rolling?
Belgium?

I smell a rate increase *and* another round of QE coming.

#153 kabloona on 01.13.15 at 12:51 pm

Little chance of federal budget surplus in 2014-2015: TD report

http://www.cbc.ca/news/business/little-chance-of-federal-budget-surplus-in-2014-2015-td-report-1.2899104

“The federal government will likely face a budget deficit for the next two fiscal years, before returning to surplus in 2017-18, TD economist Randall Bartlett says.

Bartlett`s research note released Tuesday morning flies in the face of the government’s repeated assurances that a $1.6-billion surplus is on the way.

In mid-December, Prime Minister Stephen Harper said there was “no doubt that the government will balance its budget next year.”

“Even with dramatically lower oil prices,” said Harper, “we will balance the budget.”

According to Bartlett, those dramatically lower oil prices are the reason a surplus is unlikely…”

#154 Mike in Toronto on 01.13.15 at 12:58 pm

#101 devore

Currency exchange isn’t so hard when you’re not buying physical money. Norbert’s gambit or similar methods of moving money are intentionaly made difficult by many of these online brokers.

#155 Rates Up on 01.13.15 at 1:27 pm

The Fed has already begun to tighten

http://www.marketwatch.com/story/the-fed-has-already-begun-to-tighten-2015-01-13?link=MW_home_latest_news

#156 haha on 01.13.15 at 1:35 pm

the dept of finance in our fed gov…. have they been totally oblivious to what has been happening for the past 18months ???
raising interest rates should have took place years ago, but instead, they have elected to leave as is, to ‘f’ all consumers and benefit all the banks… snafu… and to top it off, the chinese calendar designates 2015 as the year of the ‘sheep’ … how fitting is that !!!

#157 Milk in the Cowtown on 01.13.15 at 1:40 pm

Hey Garth….someone mentioned earlier, and I have a similar question….

Can I make money off the misery in Calgary? How far would the RE market have to drop to consider purchasing for rental properties?

Thanks.

Why would you do that? — Garth

#158 SWL1976 on 01.13.15 at 1:53 pm

#134 TurnerNation

We are living in a totally fabricated media time

——————————————

True that. Fairy tales and pixie dust is all I see on Tee Vee these days. Even the CBC is becoming a lame duck with the news they are reporting

Not like the good old days when Garth was there.

Thanks for the link #74 Ronaldo

Garth, did you ever think that this blog would become the living beast that it is when you started?

I think we all learn lots here and have our thoughts challanged regularly which is good for society

Thanks to everyone who contributes and a big thanks to you Garth for churning through and filtering our comments daily

#159 Republic_of_Western_Canada on 01.13.15 at 1:55 pm

Fooey!

In the run-up to the dot-com boom, oil was about 11 bucks a barrel. In the eighties and nineties it bounced around 20, maybe peaking once at 30.

And Suncor’s dividends still kept steadily increasing, and they had multiple stock splits.

That was not so long ago, and you never heard nearly as much yodelling and howling then as you do now – with present WTI prices twice as high. People still got their groceries, downtown clubs were full and happy places, houses still got built and bought, and there was no bleeding heart saturation-immigration from the 3rd world like there is now.

$30 oil? Hell, bring it on.

#160 Sponge Rob on 01.13.15 at 2:09 pm

#138 Obvious truth.
Thanks for the great post. Lots of truth there.

#161 For those about to flop... on 01.13.15 at 2:18 pm

Thanks to the people who kindly responded to my # 6 post.
I was hoping for a bigger sample size but I guess everyone is to busy nowadays !
I just thought it would be cool to talk about risk tolerance,instead of how many toys we have.

#162 Smoking Man on 01.13.15 at 2:26 pm

#154 Rates Up on 01.13.15 at 1:27 pm
The Fed has already begun to tighten

http://www.marketwatch.com/story/the-fed-has-already-begun-to-tighten-2015-01-13?link=MW_home_latest_news
……..

Who cares what the USA does, Bank of Canada has interests, like having interest rate policey that will create more tax farm slaves that contribute to the tax farm.

Canadian rates 2015, neutral or maybe even lower, see my above link..

#163 Happy Renting on 01.13.15 at 2:47 pm

#111 Carpe Diem on 01.13.15 at 12:47 am

What job did your wife land after being out of the workforce for ten years? We haven’t ruled out one parent staying at home for a few years, should we have a second or third kid, but the big worry is how employable that parent will be after a few years out of the job market.

#164 Republic_of_Western_Canada on 01.13.15 at 2:47 pm

#79 ALBERTASTROPHE on 01.12.15 at 10:38 pm

Fort Mac is already dying. This will soon accelerate dramatically.

“It’s like the place has gone dead,” Ms. March says of Fort McMurray. At the downtown restaurant, she is sending servers home early, amid empty tables. “…The past couple of weeks, I’ve never seen it this bad here at the restaurant.”

That’s totally misleading sensationalism.

The huge activity in Fort Mac was mostly due to construction of big new oil sand mining/extraction. But construction is supposed to be TEMPORARY. (Either with oil sands plants or housing by the way). It’s not like working on a permanent assembly line. Once new plants are mostly finished, that kind of worker goes away and does other things elsewhere, leading to a natural population drop in the region. And the massively-increased new production from all the completed new plants starts up with a small number of operations and maintenance workers.

Now we don’t need any more big new mining/extraction plants. Therefore no more big waves of construction and associated personnel for that. So the guys who made the big bucks building can invest those savings in the operating companies which produce. A dream from the sixties and seventies come true – minimize labor in a nasty dirty robotic environment but depend on proceeds from it to live a creative and fulfilling life.

Expecting construction of either mines or housing to continue to infinity is absurd. At some point, enough is enough and you can run with what you’ve got.

However, what we really need now is to refocus on local refining, upgrading, and petrochemical plant builds (or renovation). Instead of building any new unnecessary new housing or mines. And instead of shipping out unfinished product to foreign places like the Gulf Coast or Sarnia. That will re-allocate construction resources to build higher value-added industry locally. As any economist knows, it’s totally necessary for regional economic survival to manufacture ever-higher value product.

Building and training slow and steady with the regional population which already exists is the best way to build a solid financial and social infrastructure. Even if corporate and governmental support (i.e. reinvestment) is needed to do that.

#165 TurnerNation on 01.13.15 at 3:00 pm

Ok Dollarama’s stock price topped out at 60. Plunging lately.

Dollarama stores mean never running out of anything again. I love it. Ain’t too proud to beg.

#166 hohoho on 01.13.15 at 3:01 pm

> … activity in Fort Mac was mostly due to construction of big new oil sand mining/extraction …

I wonder how much it will cost to close these oil sand mines when the time comes …

#167 Nemesis on 01.13.15 at 3:09 pm

#TittleTatlerTuesdays,Or… #Shocked!SimplyShocked!… #ToFindThatGamblingIsGoingOnInHere!… #ManagementQuote’OTheDay…

“[It is] ludicrous to suggest that our journalism can be bought by an event’s sponsor.” – CBC

[G&M] – CBC denies ‘sabotage’ allegation against business anchor Amanda Lang

…”The CBC, still dealing with fallout from the Jian Ghomeshi scandal, is defending one of its highest-profile personalities against a report that she attempted to “sabotage” a 2013 story about a bank that had sponsored some speeches or events at which she spoke.

CBC News Editor-in-Chief Jennifer McGuire said in a memo to staff Monday that the allegations about business reporter Amanda Lang’s involvement in the story on RBC’s use of temporary foreign workers were “categorically untrue.”…

http://www.theglobeandmail.com/news/national/cbc-denies-sabotage-allegation-against-business-anchor-amanda-lang/article22422638/

#BonusTatler… #FrontierBanditryFoiledByHuskyResponse!

[G&M] – Nanaimo Police seek suspects who fired shotgun into liquor store ceiling

…”Mounties and a dog team arrived within minutes but believe the trio left the area in a waiting vehicle.”….

http://www.theglobeandmail.com/news/british-columbia/police-seek-suspects-who-fired-shotgun-into-liquor-store-ceiling/article22419766/

[NoteToGT: Just between the two of us… the Nanaimo Detachment’s insistence upon traditional methodology could explain why it continues to be viewed as a hardship posting: http://tinyurl.com/pcgrpq3http://tinyurl.com/27mssy ]

#168 M on 01.13.15 at 3:09 pm

Garth mano, repeat after me:

“Southern Fed will NOT raise interest rates unless forced by massive bonds sale. They will come up with QE4 by late May”

:)

Now… Northern Fed WILL hike interest rates. If oil hits 30 bucks a pop canadian peso will be 72c to their pesso so the great white north will have to jack up the interest rates. then we can write “Fin”.

#169 jess on 01.13.15 at 3:18 pm

Kothar
perhaps answers to your questions are here: float of the loonie

Remarks
Stephen S. Poloz – Governor
Société de développement économique de Drummondville
Drummondville, Quebec
16 September 2014

…”But trying to control the loonie is off the table, as far as we are concerned at the Bank of Canada. A floating loon is a thing of beauty, and so is a floating loonie, at least from this economist’s perspective.”

http://www.bankofcanada.ca/2014/09/float-of-the-loonie/

#170 Mr. Frugal on 01.13.15 at 3:23 pm

I wonder if Warren Buffet is selling his Exxon and Suncor shares. No, I would bet he is busy buying more. It’s all pretty simple; buy good companies at a good price and reinvest the dividends. Sounds pretty easy but how many people actually do it?

#171 Prairie Girl on 01.13.15 at 3:25 pm

#6 For Those About to Flop:

OUR PORTFOLIO:
59.5% Vanguard ETFs: VDY, VCE, VSP, VEF
17% iShares Bond ETF: CLB
23.5% Cash (we are moving this amount into the funds mentioned above, by making small bi-monthly re-balancing purchases).

Other helpful info: My husband and I are approaching our mid-30s, rent, have 2 children, and 0 debt. We don’t own any significant assets other than 2 vehicles, handyman tools & modest house contents.

What are your thoughts?

#172 DM in C on 01.13.15 at 3:34 pm

Speaking to employment lawyers about an HR issue today, they anecdotally mentioned how they are now contracted to work on massive layoffs here in Calgary. They are talking thousands in O&G, and have been contracted to help it occur, “smoothly.” It’s chilling how matter of fact they were about it — but again, lawyers.

Our company is nowhere near the O&G market — in fact, we’re flush with USD and the US market is heating up again. But I feel for our adopted city. A little.

#173 Obvious Truth on 01.13.15 at 3:43 pm

#135 habit.

All true.

Problem is that the money is spent and we are now going to have to figure out how to pay the bill.

And who should pay.

#174 Sponge Rob on 01.13.15 at 3:44 pm

#169
Suncor is selling for close to the same price it did when oil was at $75. Good company? Absolutely. Good price? Not even close. Wake me up when it hits $20

#175 For those about to flop... on 01.13.15 at 3:46 pm

#prairie girl 170
I come here to learn things and have a laugh at the same time but I will say at first glance you appear to be running your own race and living within your means which is what I try to do.
Good luck to you.

#176 Spectacle on 01.13.15 at 3:53 pm

#118 Tim on 01.13.15 at 2:12 am
Is there some financial or tax advantage to leaving a house empty for several months instead of accepting a bit less rent? We have made several offers for rentals in Vancouver below what they are asking. These places sit up rented for several months. It seems to me that they would lose less if they accepted less …. should we be suggesting that we pay want they ask but get a month free? This would work out to be the same amount over the course of a year. Can anyone explain this to me?

*******
Hi Tim,
Yes, it is now competitive, but people would rather hold out ( dreaming?) for that ever more difficult to find perfect renter ( Garth…) . The disdain slum landlords have for “those renters” is stunning to me. My professional perspective is very close to rental owner/landlords of all sizes and shapes.

Many if not most landlords have to show growing revenues now, as they are accountable to someone called, their bank. Once the slippery slope of price reductions begin ( and they have begun to lower since 2009..) it is that escalating race to the bottom.

As discussed many times about human nature on this blog, people hold thoughts about where they wish to see their dream property grow in revenue, value etc etc. Many here know that is not going to happen: knock -knock, hello Alberta ! 1979 wants its rental prices back!

Rentals will follow real estate values, will follow commodity values……..

What’s your guess

Regards,

#177 Kevin on 01.13.15 at 3:58 pm

@Pooh (#46):

in a scenario where house prices have declined to a point where an individual’s home is worth less than what they owe (perhaps… the recent 5% down payment folks in Calgary), what are the implications for those individuals at renewal time?

None. Banks do not do appraisals on simple renewals.

If you wanted to move the mortgage to another bank, or modify the terms of the mortgage (for example, reamortize to reduce a payment increased by rising interest rates), then an appraisal would likely be done, and the homeowner would be expected to make a lump sum payment to bring the LTV back down below 100%, and CMHC would be required to be paid again.

#178 jess on 01.13.15 at 4:01 pm

the law of lender liability
http://jpmadoff.com/chapter-5/

http://www.bloomberg.com/news/2015-01-08/losing-faith-in-jpmorgan-two-churches-claim-self-dealing.html

#179 kabloona on 01.13.15 at 4:06 pm

#166 – Nem, thanks for the link about intrepid CBC Reporter(?), Amanda Lang….hadn’t seen that one.

#180 Porsche on 01.13.15 at 4:06 pm

Billion dollar put bought on the VIX this afternoon spooked the market and turned it south

#181 Nuke on 01.13.15 at 4:15 pm

How many Western tears were shed when Ontario’s manufacturing was gutted due to high CAN$, expensive oil and cheap imports?

#182 Brett on 01.13.15 at 4:27 pm

why do I need to pony up $1.20 to get 1 USD

Someone needs a refresher course on basic math. With two equivalent fractions, a/b = c/d, the following rule is true axd = bxc. Now let’s plugin numbers, we’ll do american on bottom, CAD on top. First fraction 1CAD/ 0.835USD == XCAD (value to find, so variable X) / 1 USD
1 x 1 = 0.835 x X
Divide both sides by 0.835, and there you have X = 1.197604…

No wonder we have a huge housing bubble in this country.

#183 kabloona on 01.13.15 at 4:37 pm

Amanda Lang, taxpayer-funded shill…. (heh-heh!)

http://canadalandshow.com/article/amanda-lang-took-money-manulife-sun-life-gave-them-favourable-cbc-coverage

(Hat-tip to Nemesis!)

#184 Holy Crap Wheres The Tylenol on 01.13.15 at 4:52 pm

Calgary market and for that matter all the rest………….
Lemmings man, lemmings that’s all I can say. Little fury creatures with really big balls!

#185 Josh in Calgary on 01.13.15 at 4:53 pm

#139 someone in BC on 01.13.15 at 10:59 am,

It doesn’t matter where you go in the world there will always be a smug idiot and usually he talks loudly and doesn’t know very much.

So you have a choice …. you can be the better “someone” … or you can take cheap pleasure in rubbing someone’s nose in it (likely not the smug idiot who started the whole thing) and in doing so become what you hate.

#186 Holy Crap Wheres The Tylenol on 01.13.15 at 4:54 pm

#173 Sponge Rob on 01.13.15 at 3:44 pm

#169
Suncor is selling for close to the same price it did when oil was at $75. Good company? Absolutely. Good price? Not even close. Wake me up when it hits $20
____________________________________________
Agreed, Suncor excellent choice, definitely watching that one.

#187 Holy Crap Wheres The Tylenol on 01.13.15 at 5:05 pm

Our dollar crushed and Apple is nickle and dime-ing us for it.
http://www.bloomberg.com/video/the-price-of-apple-apps-going-up-20-cents-in-canada-eczBPs8BT4GZA5SwuQu_vg.html

#188 Sam on 01.13.15 at 5:09 pm

Not sure when this market will correct. This one in Burnaby got sold for $860,000. Almost 60000 ove asking price:
http://www.realtylink.org/prop_search/Detail.cfm?areatitle=&ARPK=&ComID=&agentid=&MLS=V1098084&rowc=2&rowp=1&BCD=GV&imdp=11&RSPP=5&AIDL=260&SRTB=P_Price&ERTA=False&MNAGE=0&MXAGE=200&MNBT=0&MNBD=0&PTYTID=5&MNPRC=200000&MXPRC=900000&SCTP=RS

#189 Holy Crap Wheres The Tylenol on 01.13.15 at 5:12 pm

As America starts into the summer Va-cay mode demand will rise exponentially based on the already ridiculously low price of oil. Ive talked to so many Americans lately that already have the summer vacation plans in place as fuel is approaching half of what it was a year ago. They think it will even go lower and stay there! As demand goes up so will the price of oil! Faster than you can say Bubbling Crude, Oil that is Black Gold, Texas Tea! I’m banking on a second to third quarter upswing on oil.

https://www.youtube.com/watch?v=QtvTE3m5jpM

#190 bdy sktrn on 01.13.15 at 5:14 pm

booo amanda.

something about her never sat right.

seems the attitude vs intelligence ratio is off kilter.
garth has twice the attitude but is 4x smarter. (maybe if you went blonde , garth, you could get her spot!)

#191 Holy Crap Wheres The Tylenol on 01.13.15 at 5:17 pm

#136 Smoking Man on 01.11.15 at 10:56 pm

Damn, should have went to Hollywood as a kid, but I started out as a rivet bucker. I had a choice, go to Hollywood and become a movie star.. Or.. Become the best rivet bucker in the world, I chose rivets.. Rick who was the best when I started, ego maniac, I had to beat him. The demon of competitiveness, and addiction. Held me back..

If you all go to West Toronto secondary school, you will see, three years in a row, my name on the tennis drama award, my name… Best actor of the year. 75 to 78.
_________________________________________
One of my engineers went to your school around the same time frame, he’s 55 years old. I mentioned it to him and he said your school doesn’t exist anymore. He said what the hell is a tennis drama award?
Anyway you hate school so why did you excel in it?

#192 Cici on 01.13.15 at 5:19 pm

Uh-Oh, Smoking Man got arrested today:

http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/us-charges-canadian-man-with-stock-price-manipulation/article22431831/

#193 Porsche on 01.13.15 at 5:24 pm

Alberta’s mortgage debt highest in Canada.

#194 Victor V on 01.13.15 at 5:43 pm

Blame oil: Cheap crude seen putting Canada’s recovery and surplus hopes at risk

http://business.financialpost.com/2015/01/13/blame-oil-ottawas-promised-1-6b-surplus-to-morph-into-deficit-for-the-next-two-years-td-says/

The central bank’s deputy governor Timothy Lane told an American audience Tuesday that if cheap crude prices persist, they will significantly discourage investment in the oil sector, which he said accounts for about three per cent of Canada’s gross domestic product.

In prepared remarks of his speech in Wisconsin, Lane said lower oil prices produce benefits such as putting more disposable cash in consumers’ pockets and helping to cut costs for other sectors, like manufacturing.

But, Lane predicts the gains will be more than outweighed by the losses because lower incomes in the oil patch and along its supply chain will hurt the rest of Canada’s economy.

“Despite the mitigating factors I enumerated, lower oil prices are likely, on the whole, to be bad for Canada,” Lane said.

#195 Porsche on 01.13.15 at 5:49 pm

In oil boomtown Fort McMurray, ‘it’s like the place has gone dead’

http://www.theglobeandmail.com/news/national/murky-future-for-fort-mcmurray-as-oil-prices-fall/article22422885/

#196 Porsche on 01.13.15 at 5:50 pm

Suncor slashes 1000 jobs

#197 jess on 01.13.15 at 5:51 pm

non bank mortgage servicer

computer-driven dialogue engines indeed!

http://www.dfs.ny.gov/about/press2014/pr141021-ltr.pdf
http://nypost.com/tag/bill-erbey/
http://www.dfs.ny.gov/about/press2014/pr140804-ocwen-letter.pdf
included backdating letters to distressed mortgage holders, self-dealing within the related companies , pushing homeowners into foreclosure.

…”investigation into force-placed insurance revealed that mortgage servicers were setting up affiliated insurance agencies to collect commissions on force-placed insurance, and funneling all of their borrowers’ force-placed business through their own agencies, in violation of New York Insurance Lawsection 2324’s anti-inducement provisions.The Department discovered thatservicers’ own insurance agencies had an incentive to purchase force-placed insurance with high premiums because the higher the premiums, the higher the commissions kicked backby insurersto theservicers or their affiliates. The extra expense of higher premiums, in turn, can push already struggling families over the foreclosure cliff. In light of this investigation,the Department last year imposed further prohibitions on these kickbacks to servicers or their affiliates….”

#198 Porsche on 01.13.15 at 5:54 pm

Oil price plunge could put Alberta into recession, Conference Board says

http://www.cbc.ca/news/business/oil-price-plunge-could-put-alberta-into-recession-conference-board-says-1.2899167

#199 Grantmi on 01.13.15 at 5:58 pm

#179 Porsche on 01.13.15 at 4:06 pm

Billion dollar put bought on the VIX this afternoon spooked the market and turned it south.

Link????

#200 jess on 01.13.15 at 5:59 pm

191 Cici on 01.13.15 at 5:19 pm

$14 million penalty is the SEC’s largest against a national securities exchange and the first principally focusing on stock exchange order types
http://www.sec.gov/news/pressrelease/2015-2.html#.VLWDQMlTvwo

#201 Gulf Breeze on 01.13.15 at 6:04 pm

#12. Raj,

There are already proxy wars and covert nation destroying programs working their ‘magic’ across the globe. I don’t know if any of the NATO countries are willing or can afford to do any more boots-on-the-ground wars of aggression. As long as Raytheon and Lockheed Martin and other war profiteers are funded to build drones and surveillance systems, it’s all good….unless your politics, religion, place of birth are out of favour.

Gold will benefit, in Canadian dollars, as the Canadian dollar weakens–like audis and lettuce. I started accumulating bullion between 2003 and 2007 to hedge against a weakening American dollar. I am surprised that it is working as a hedge against the Canadian dollar now. Weird, but I get it!

#202 Porsche on 01.13.15 at 6:08 pm

LOL…

OK folks: I’m selling two ridiculous-looking jacked-up trucks (Newfoundland flag decals, of course), a Mustang, jet-ski, two quads, a side-by-side, my cabin, motor-home, and trailer. Need to sell ASAP as I don’t have my high school diploma and I was living paycheck to paycheck driving a bus on site for $140,000 a year, and the mortgage payment on my $3 million home is coming up!

#203 Deadman Walking on 01.13.15 at 6:15 pm

Cutting is started:

http://www.bnn.ca/News/2015/1/13/Suncor-to-cut-1000-jobs.aspx

#204 old gringo on 01.13.15 at 6:20 pm

#136 Smoking Man on 01.11.15 at 10:56 pm

Wouldn’t it be easier just going down to your nearest post office to see an actual photo of “smoking man”, then
your name only?

just thinking………

#205 Porsche on 01.13.15 at 6:26 pm

#198 Grantmi

It was on BNN

#206 AlberTA IS GOING TO FEEL FINANCIAL PAIN on 01.13.15 at 6:27 pm

you have to love Canadian propaganda down playing the economic pain that Alberta is going to face.

http://www.theglobeandmail.com/report-on-business/suncor-cuts-1000-jobs-takes-1-billion-out-of-2015-budget/article22434787/

#207 Mark on 01.13.15 at 6:27 pm

“in a scenario where house prices have declined to a point where an individual’s home is worth less than what they owe (perhaps… the recent 5% down payment folks in Calgary), what are the implications for those individuals at renewal time?”

As correctly pointed out, they don’t run around doing individual appraisals. However, lenders, based on macroeconomic trends, have a pretty good idea what sort of financial position borrowers are in. Being the prey that they are, they will see a perfect opportunity to swoop in, and deliver you a renewal offer only at a relatively high ‘posted rate’. Or worse. And without equity, good luck getting a new lender to take on the loan.

Since most mortgage borrowers, as the housing bubble inflated, were quite accustomed to receiving significant discounts against the ‘posted rate’, paying the posted rate, or even being forced into an explicit subprime loan renewal(not just the CMHC subprime stuff….) can be quite a shock to the finances.

BTW, this can all take place, and likely will take place, against the backdrop of the BoC cutting policy rates. Mortgage credit has been abnormally inexpensive in Canada for a *long* time now, and credit spreads are always cyclical over the long term. I think a lot of people will be shocked to realize that the BoC/GoC/CMHC isn’t a’chargin in with the cavalry this time to ‘save’ them from their bad decisions when it comes to buying overpriced housing. Like they did back in 2008/2009.

#208 Transplant on 01.13.15 at 6:43 pm

#186 nickel and diming

A 20% price increase is not “nickel and dining”.

#209 Transplant on 01.13.15 at 6:44 pm

sorry: should read “diming”

#210 Republic_of_Western_Canada on 01.13.15 at 7:09 pm

#180 Nuke on 01.13.15 at 4:15 pm

How many Western tears were shed when Ontario’s manufacturing was gutted due to high CAN$, expensive oil and cheap imports?

Dude, Onterrible’s manufacturing was not gutted by the extraneous factors/excuses you’ve listed.

It was gutted by massive inefficiency, self-entitled attitude, lack of competitive innovation, organized crime, residual colonialism, and a social mindset that paper-shuffling was more profitable and desirable than skilled labor and engineering. Same as in the U.S. of Hey.

#211 western observer on 01.13.15 at 7:11 pm

re#163 Republic of Western Canada

There are some big holes in your theory- unless I am missing something

“that kind of worker goes away and does other things elsewhere”

Where is this worker going to work on other big oil projects – who will be building?

“So the guys who made the big bucks building can invest those savings in the operating companies which produce.”

The guys that made the big bucks bought big mortgage houses, vacation trailers, quads, vacations. They don’t have any money – they are in debt

“And the massively-increased new production from all the completed new plants starts up ”

Why would they start up the plant when they need $90/barrel and the price is $45?

#212 The American on 01.13.15 at 7:32 pm

At #70: Tony, you’re a funny blogger. Always manage to make me laugh outlaid… literally! Canadians are and have been way more indebted (long term, i.e.. mortgages) than Americans for many, many months now. That’s not going to change for years to come. Here is a little chart for your eyes from 18 months ago. Canadian household debt has only gotten worse since this chart. Want to try me?
http://www.businessinsider.com/canadians-more-indebted-than-americans-2013-6

As for the CAD??? That’s going to continue its slide for a while. It won’t be trading anywhere near par with the USD for a long, long time. Might want to get your mind around that today. It will serve you better in the future with your investment strategies.

Also, Bank of America (and other banks, mind you) are indeed shorting Canadian banks. Just something I’ve been saying for over a year now. Canadian banks did a decent enough job of hiding and lying to the public for long enough. Cat’s out of the bag now. OUCH! Wait and watch what comes out in the next 60 days :-)

#213 Nemesis on 01.13.15 at 7:36 pm

#AnotherFineGreaterFool… #Gratis!EducationalFeature… #Today’sLesson:TennisDramaAwards

“What the hell is a tennis drama award?” – BlessedTylenolCrapola

http://youtu.be/A8b5hj86Ug4

#214 Westcdn on 01.13.15 at 7:42 pm

I was watching Jim Prentice today on BNN and thought he should decide as leader what is best for Alberta and take his chances at the polls. I can guarantee no one wants to pay more taxes but I think it is necessary at a provincial level. I do remember civil servants who would split when then said Klein.
The Municipal leadership of Calgary confounds me. I remember moving to this city 35 years ago where aldermen were part time. Now they are overburden bureaucrats requiring support budgets. My alderman was elected on an austerity promise – he has been pretty quiet recently.
I think life is easier when you are spending some else’s money without notifying the owner.

#215 Nemesis on 01.13.15 at 7:45 pm

#RiddlerAfterthoughtsExclusivelyForKabloona…

Q: “How is Amanda Lang like RBC’s outsourced IT professionals?”

A: “They’ve both been ______ by RBC’s board.”

#216 CalgaryRocks on 01.13.15 at 7:45 pm

#209 Republic_of_Western_Canada on 01.13.15 at 7:09 pm
#180 Nuke on 01.13.15 at 4:15 pm

How many Western tears were shed when Ontario’s manufacturing was gutted due to high CAN$, expensive oil and cheap imports?

Dude, Onterrible’s manufacturing was not gutted by the extraneous factors/excuses you’ve listed.

It was gutted by massive inefficiency, self-entitled attitude, lack of competitive innovation, organized crime, residual colonialism, and a social mindset that paper-shuffling was more profitable and desirable than skilled labor and engineering. Same as in the U.S. of Hey.

Exactly.

Losers always want the other to fail rather then them making the effort to succeed.

So many right now are kicking Alberta when it’s down.

Which doesn’t change the fact that they’re still losers. Except, now, even bigger because they don’t have Alberta to blame for their own shortcomings.

#217 Republic_of_Western_Canada on 01.13.15 at 8:02 pm

#210 western observer on 01.13.15 at 7:11 pm

re#163 Republic of Western Canada

There are some big holes in your theory- unless I am missing something

“that kind of worker goes away and does other things elsewhere”

Where is this worker going to work on other big oil projects – who will be building?

Few tradesmen and engineers spend their entire careers working on a single project or plant to be constructed. Many go into similar work in other industries, or maintenance when the project is done. Many will have a second discipline. In the past oil business most laborers came from farms which they ran in the summer, but worked rigs through the winter.

In the Alberta case, it would be optimum to use that manpower bulge to build higher-value-added plants such as refineries and new petrochemical which are sorely needed to create critical economic mass. This is becoming the perfect time too. Imminent low labor/engineering costs, deflating materials costs, an uptick in the export (US) market, and low $CDN make for much more viable plant builds at this time. Additionally, much cheaper feedstock and historically low systemic interest rates provide excellent financial conditions.

Normally you can’t and don’t have massive crowds of trades and engineers sloshing around the country, and brought into the country through immigration, for a few big projects and then expect them to disappear into the general population. That’s why slow local development and training of the population, but only temporary importation of workers at peak times, must be mandatory. That is a lesson learned and known in many parts of the world. I guess it’s not politically-correct enough for our voting population.

“So the guys who made the big bucks building can invest those savings in the operating companies which produce.”

The guys that made the big bucks bought big mortgage houses, vacation trailers, quads, vacations. They don’t have any money – they are in debt

Not all are in debt. Those that got pressured into overpriced chipboard doghouses by their wives and co-workers, or bought a half-dozen quads and HD TVs, will have to take the hit. That is what society has to teach. Not that the government will cover for every financial screw-up you make. It’s a cultural problem which has to be fixed. That same government though also has to keep global multinationals on a tighter leash.


“And the massively-increased new production from all the completed new plants starts up ”

Why would they start up the plant when they need $90/barrel and the price is $45?

They don’t need 90 bucks a barrel. Those numbers so glibly tossed around include long-term amortized construction costs going in to greenfield projects. Once built and debottlenecked, viable product prices are much lower. That’s how Suncor made big money for a quarter century when nominal prices were under 20 bucks.

#218 Daisy Mae on 01.13.15 at 8:05 pm

News Alert
Suncor cuts spending again, says 1,000 jobs going by end of 2015

This breaking story will appear soon at http://www.cbcnews.ca

#219 Exurban on 01.13.15 at 8:17 pm

Amusing material on reporteress Amanda Lang. Geezers like me and Garth remember her daddy Otto. When he was a minister in P.E. Trudeau’s 1970s government he once expensed $750,000 for travel in a single year. In the 1970s, that kind of money was probably worth $3 million of today’s loons. Now that was a trougher who knew the way to the feed bag.

#220 kabloona on 01.13.15 at 8:35 pm

#214 — hee-hee! ;-)

#221 Chris on 01.13.15 at 10:52 pm

Hi I’m a new reader, is there one article that I absolutely need to read/start with?