Seriously

TARGET1

“I am a huge fan of your blog, I read it every morning,” says Kellie, who (unlike Sophie) did not send me a sultry, steamy selfie. “Thank you for telling it like it is….our media crazy, propaganda world seems more interested in unbelievable headlines than truth.  For instance, Calgary CTV news put this article as their leading story this morning……check it out.  How are Canadians supposed to be making informed decisions when this is ‘news’?”

Well, Kellie wasn’t the only one who choked and inhaled their Tim’s this week when they learned of the latest realtor propaganda. Royal LePage actually just said this about Calgary’s housing market: prices will go up in 2015. Seriously.

Says LePage spokesguy Ted Zaharko: “There remains a structural imbalance between the availability of homes and number of eager homebuyers.”

Eager buyers, Ted? Sales this month have collapsed 29% from last year, on top of that 7.5% dive last month.

“Inventory availability remains a major issue across the city, as frustrated buyers are chasing a limited number of homes.”

Ted, dude. Your nose is getting strangely longer. Looks like a zucchini in heat. New listings have jumped 36% in the last few weeks, and there are now 55.06% more sellers looking for buyers than a year ago.

“While we expect price rises may moderate in 2015, the upward trend we’ve seen over the past few years is unlikely to reverse without a meaningful increase in inventory. Oil is a major economic influence in Calgary, so the recent price drop is worrying. While we believe there may be some immediate term impact on the local housing market in the form of slowed appreciation, there would need to be prolonged low oil prices for any spillover into the housing market to be significant.”

Prices are down 4%, sales are off by almost 30% and supply is 55% higher. Is that significant, Ted? If not, just wait. Major layoffs have already been announced, with stock markets and analysts now signalling they think oil will stay cheap for a long time. All of 2015, likely. Maybe years. Say, is that a giant banana on your face?

Pete lives in Calgary, and has for all of his six decades. Sadly he comes here and reads this blog.

“We are in our early sixties, no debt and both still working, after 35+ year careers in the oil and gas service business and staying put here in Cowtown as well traveled, native Albertans.  When top of range Audis are driven by people who barely shave it is worrisome. We have been through some rough goes in the patch over the years, some where activity simply ceased overnight. This is shaping up to be a dilly. More drilling programs being cut daily. CAODC.com for active rig numbers if you are interested. Appreciate your columns and your snarky wit and what I believe is logical contrarian wisdom.”

In other words, where did Royal LePage come up with a 2.5% growth in prices in the one city in Canada where a 50% collapse in oil will have the greatest impact? Easy. They made it up. But now because it’s been published in every major newspaper and stuck on TV, it becomes true. This is how the media works. First, lay off most of the print reporters. Second, run hand-out PR releases as news. Third, use unpaid interns to do research for Amanda Lang. Fourth, hear it as fact on the CBC.

Of course, the responsible thing at this point would be to warn people. And not just in poor Calgary. Not just about oil.

There’s growing evidence that deflation I warned you about months ago is gaining a big foothold. Commodity prices have collapsed. Look at this:

COMMODITY INDEX

Copper prices have taken a dive – a big deal since this seems to be a barometer of global economic health. Inflation in Europe is kaput. In Britain it just tumbled so seriously that Blog Dog Carney is on the carpet. Japan is in recession, and sinking. Russia’s headed for toast status. In a world of sinking expectations, the US now stands out as being the anomaly. But even that mighty economy is not enough to stave this gathering slide in prices and wages.

As stated a couple of weeks ago, Calgary may become our symbol of deflation as jobs, incomes and prices fade. When that happens, money becomes more valuable, as do liquid financial assets and anything generating income. Houses are worth less and debt gets way harder to pay, no matter how low rates are.

After six years of rock-bottom interest rates, government incentives, massive stimulus and an epic buildup in debt, it’s astonishing we’re at this point. Just ask the Target dudes, today dumping 133 stores and 17,000 Canadian employees.

But it’s not all bad. Royal LePage says it’s a great time to buy. Care for a throbbing cucumber?

257 comments ↓

#1 Rainclouds on 01.14.15 at 7:08 pm

Dear Tubby: I know you are busy as the smartest guy in the country (until the giant economic turd you created gets deposited)

But in the meantime: How about a truth in Real Estate Act…….

http://www.vancouversun.com/business/Decline+price+affect+real+estate+2015+according+Royal+LePage/10728179/story.html

#2 gulnar on 01.14.15 at 7:11 pm

With all the oil parties having benefit in having a higher price. I feel there will be a partnership coming between shale producers and sheikhs.
May be Sheikhs are already buying all shale producers in this period?

#3 Victoria Real Estate Update on 01.14.15 at 7:11 pm

Garth, your in-depth coverage of the Calgary market with frequent updates is appreciated. It appears that prices have peaked and started to decline in that city. That price decline will last for years and will probably be quite deep.

I’ll be posting another Victoria real estate update tomorrow, as I usually do on Thursdays.

#4 JSS on 01.14.15 at 7:12 pm

Today I did the unthinkable, and bought some more common shares of RBC, TD, and BMO. Risky, but I think these are good prices if you’re holding for the long run.

#5 Happy Renting on 01.14.15 at 7:13 pm

Ted Zaharko, graduate from the Iraqi Ministry of Information Academy.

#6 Ronaldo on 01.14.15 at 7:19 pm

Gas in Red Deer today 67.4. I guess that’s good news. For the gas guzzling doollies with the dangling nuts anyway. At least for those who still have a job.

#7 Sylar on 01.14.15 at 7:20 pm

Saw the same online as front page news for the Vancouver Sun. Should be criminal really… but perhaps greater fools exist because they are too lazy to think for themselves.

#8 Neta on 01.14.15 at 7:22 pm

It looks like our hopes of becoming an Energy superpower is going up in smoke.
Since our industrial power was hollowed-up and sacrificed to chaise the energy ghost, the only thing we have left to boast about is being a Real Estate Superpower.
I wonder, for how long it will last?

#9 Kuato Lives on 01.14.15 at 7:22 pm

Royal Lepage has a new spokesperson.

http://cdn.meme.am/images/300x/163347.jpg

#10 Van Isle Renter on 01.14.15 at 7:23 pm

I just look at Dr. Copper. It tells you all you need to know about the world economy. It sucks. No need for copper if we aren’t building stuff, and there is no OPEC-equivalent in the copper market.

Nor is there a Yellen to speak and drive the copper markets higher. I find the 4 part economic recovery in the U.S. S&P hilarious and pathetically predictable. It has nothing to do with earnings or profits:

1. U.S. markets left to their own devices are steadily dropping.

2. Yellen speaks, markets soar.

3. Yellen stops speaking, markets drop.

4. Repeat as necessary

It’s the Fed Stoopid!

#11 Robert Agnew on 01.14.15 at 7:23 pm

What could possibly go wrong with Steve the economist Harper and Joe the undertaker Oliver I charge.?

I have said this many times – Harpero is a disaster for this country. It will be a long slow recovery due to this so called Reformer and Conservative

#12 A Yank in BC on 01.14.15 at 7:27 pm

Gosh. An awful lot fewer Alberta license plates wintering on Vancouver Island this year. I estimate less than a third of what we normally see.

#13 batt519 on 01.14.15 at 7:27 pm

2015 will not bring rate increases in the USA or Canada. Quite the opposite.
Regards.

#14 TurnerNation on 01.14.15 at 7:31 pm

Bottom’s in oil boys. Start buying. Beep beep.

#15 polecat on 01.14.15 at 7:31 pm

No problem here in Halifax either man, they keep building and coming up with new proposals. What the hell? I don’t see the jobs or population to go with it. Well, we’re etting a new convention centre and maybe build a few ships, that will save us. I think we’re at about 2 years inventory in HRM. Guess all the peeps workin out west put in spec builds a year ago. I certainly don’t want to see the jobs lost, anywhere, not jealous of people makin a good wage in the patch, buoys us all when oil is up. Cheap gas is great but how long can it rally last? I’m just old enough to remember the 80’s and was front row centre for the early 90’s, laid off from a couple good jobs, so I know the feeling. Luckily I rented and could follow the work.

#16 calgaryPhantom on 01.14.15 at 7:32 pm

That means US companies will take the heat and report lesser revenues due to sucky economies around the world?

Time to sell US stocks and take profits.

#17 North Burnaby on 01.14.15 at 7:34 pm

Looks like properties in cities in Australia that are dependent on natural resources already fell like 28%. Real estate in Alberta will suffer big time! But Australia showed us that real estate in cities like Sydney and Melbourne continued to increase regardless.

#18 Chickenlittle on 01.14.15 at 7:34 pm

“Care for a throbbing cucumber?”

LOL!!!!!!

Did you find out who is behind your catfish, Garth? I would seriously consider sending the GF swat team to check out Brad Lamb’s laptop.

#19 Derek R on 01.14.15 at 7:37 pm

Deflation is where it’s at for Canada in 2015 unless the Canadian government does some serious deficit spending. There’s so much private debt and so little private CAD to pay it with. Things were rosy when the foreign money was coming into the country in exchange for the oil but without that it’s up to Ottawa to fill the monetary gap.

If they don’t there’s going to be a world of hurt in election year.

#20 JSS on 01.14.15 at 7:44 pm

There’s more rumbling about interest rate cuts in Canada. Any thoughts out there?
I’d like to see a cut, as I have a variable rate mortgage :)

#21 Ronaldo on 01.14.15 at 7:45 pm

#9 Van Isle Renter –

You can bet that at these prices, China is buying up all they can get. Did the same back in 08 when prices dropped then. They’ve been loading up on gold, silver, and many other commodities since prices have collapsed. Why wouldn’t they buy when they are on sale. They have long term vision.

”There is no evidence that its appetite has been satisfied and the copper purchases are expected to continue well into 2015, according to a Hong Kong-based trader at a metals trading firm.”

Read article attached for full story.

http://www.wsj.com/articles/chinese-state-agency-buys-up-copper-keeping-floor-on-prices-1416373839

#22 Mike on 01.14.15 at 7:56 pm

#13 TurnerNation
Bottom’s in oil boys. Start buying. Beep beep.

And you are basing this on the short covering rally today ? :) Won’t last too long, we will see $40 or lower sooner than $60

#23 Extron on 01.14.15 at 7:56 pm

Will the “throbbing cucumber” fit in the pickle slicer ?

#24 Joe2.0 on 01.14.15 at 7:57 pm

ReMax= pumping cucumber.

#25 Alberta Ed on 01.14.15 at 7:57 pm

I nearly gagged when I heard the CBC’s ‘business reporter’ pontificating about Calgary RE and giving mortgage advice this afternoon. The MSM is whistling past the graveyard.

#26 Seriously | Realties.ca on 01.14.15 at 7:57 pm

[…] Source: http://www.greaterfool.ca/2015/01/14/seriously-4/ […]

#27 Obvious Truth on 01.14.15 at 7:58 pm

Me thinks buying canada is years out. Have a whole crappy cycle to go through. Recession, deficits, capital flight, asset price/wage resets and political uncertainty. We have seen it all before.

Way to early to buy anything canada in my opinion.

The green back move looks like it’s for real and maybe n the early stages. It may want to get to euro parity. Nobody cares about canada. Seriously. 30M people.

Wonder what pseudonym carney uses?

#28 rate-ebate on 01.14.15 at 7:59 pm

no comments on this piece today garth?

http://business.financialpost.com/2015/01/14/markets-eye-bank-of-canada-rate-cut-for-first-time-as-oil-rout-damage-deepens/

with all this deflation around and the world piling into US treasuries…how are BoC rates going to rise in 2015?

#29 Arfmooocat on 01.14.15 at 8:06 pm

Where’s a link(s) to this story, be nice to make a comment or two.
Probably no comments allowed on these real estate pump stories. lol

#30 Retired Boomer - WI on 01.14.15 at 8:09 pm

In uncertain times such as these, it is prudent to ask yourself: If my income were to drop 10% what impact?
Do the same for 20% drop 30% drop etc…

If my income were to drop say 30% could I “get by”?

These little “what ifs” gives us a perspective of what type of margin we have built in to our lifestyle.

I would HOPE most could withstand a 20% drop largely offset by deferred savings, and a modest cut back in life style. Not major pain in that. Usually any cuts beyond that level means major pain, job replacement, selling off stuff, relocation – life upheaval.

With uncertainties all around,. practice this exercise for your own lives, you might be surprised -or alarmed- by what you find.

23% loss seems my personal ‘pain threshold’ these days, hope you do better!

#31 For those about to flop... on 01.14.15 at 8:13 pm

As an Australian/Canadian with money invested in each country all I can do is wonder which country is going over the cliff first.
Both rely heavily on resources,both have 3 city housing bubbles and both have an ageing population putting stress on an already struggling healthcare system.
They are both beautiful countries in their own ways but this what happens when you have weak leadership.

#32 Honest Realtors on 01.14.15 at 8:14 pm

Garth your post about renting on Sunday was pretty harsh on realtors but we all know you secretly yearn to get in on the buy side.

We’re here to help.

This place has your name all over it (read the description) and you can surely afford it from what you told us all the other day.

Only $4,975,000

http://www.realtor.ca/propertyDetails.aspx?PropertyId=14931004

Our commission would only be $124,375 and we’ll donate half of that to the puppy charity of your choice. Or to a seniors charity that buys Depends for superannuated Harley riders.

What more could Garth want?

Garthmore!

#33 Freedom First on 01.14.15 at 8:24 pm

Thank you for adding Royal LePage to your growing list of people/corporations that have become new fans of your Blog for your never ending generosity of supplying free publicity for them. Perhaps you could devote a day on your Blog, Garth, where you show us the grateful thank you e-mails you have received from various Politicians, Bankers, Condo Kings and Queens, etc. Although from the # of people/Corporations you have publicly named on your Blog, with their corresponding written articles/information, such as Royal LePage just did , it could take up a whole month of your Blog, Garth. I know I really appreciate your publicly naming them all with exactly how they have been, and are continuing to service the bent over Public.

#34 Ashley on 01.14.15 at 8:24 pm

Phil Soper is a douche.

#35 Washed Up Lawyer on 01.14.15 at 8:29 pm

Zaharko was truthful in one thing he said. He said:

“There remains a structural imbalance between the availability of homes and number of eager homebuyers.”

The availability of homes has gone through the roof and there are no eager buyers. Hence a structural imbalance.

Irony up here in the boreal forest. I note the comments of Dogs buying gas in the $.60 per litre range elsewhere in Alberta. Here in Ft. McM prices dropped under a buck per litre for the first time this week. Now at $.959. I can see the steam plume from the Suncor plant from my office.

#36 Mark on 01.14.15 at 8:37 pm

“There’s so much private debt and so little private CAD to pay it with.”

Precisely. And as the deflation picks up steam, incredible demand for CAD$ to repay debt will ensue. Which means that private Canadians will be forced to, for instance, sell their Arizona properties, buy Canadian dollars, to pay back their domestic mortgages (or help their adult children who are in a major state of distress!).

I’ve been pounding the table for this, but deflation is profoundly currency positive, and the CAD$ will be no exception.

#37 Brian Ripley on 01.14.15 at 8:39 pm

Garth said: “There’s growing evidence that deflation I warned you about months ago is gaining a big foothold.”

My “real” interest rate chart bears out the deflation scenario: http://www.chpc.biz/real-interest-rates.html

As CPI falls, real rates rise, and the chart shows a bottom that’s been tested is in place now.

What looks a bit odd on the chart is the action in the TSX Real Estate Index which was following the real rate trend prior to the blowout into the March 2009 pit of gloom. After that event… real estate and stocks and bonds (and commodities until the 2011 peak) seemed to “decouple” from the real rate action. Real estate continued to hockey stick with or without real rates.

It’s even more pronounced on the Calgary Housing chart: http://www.chpc.biz/calgary-housing.html

After the pit of gloom, housing prices in Calgary were a runaway-train as the TSX Energy Index attempted twice to scale the July 2008 peak but failed and in hindsight that index was really in a downtrend especially after the 2011 top in the commodities index.

We knew the disconnect was happening, and yet we kept on bidding up real estate.

#38 Miles Mobin on 01.14.15 at 8:40 pm

[email protected]

#39 james on 01.14.15 at 8:43 pm

29 Retired Boomer – WI

Good questions to ask.

Sadly, 51% of Canadians don’t have 2k in liquid savings.

#40 lawboy on 01.14.15 at 8:45 pm

And on Toronto CTV news tonight, they had a report that the falling oil prices are good news for home prices here, because people will ‘feel richer’ spending 20-30$ less on a tank of gas.

(I thought proximity to transit was the selling point for Toronto homes these guys usually push??)

#41 blue steel on 01.14.15 at 8:48 pm

Know what’s a fun game to play with Real Estate salespeople? Try getting them to admit something negative…….or them to say no. The song and dance they put on is remarkable. There should be an app for this

#42 Prairieboy43 on 01.14.15 at 8:51 pm

Is there a Lie detector APP for my Crackberry? If so I should download and take to Remax.
Went for a drive today, checking out RE in Sherwood Park, Edmonton, Fort Saskatchewan ( Refinery Row). Saw some new for sale signs. Mostly owners trying to sell privately. Will take a tour in Early April see what the market is like then. Deflation here we come.
Noticed many < 30 something humans driving Beemers, Cadillac, Audi. Where did we as Canadians go wrong training the next generation? Modesty, Respect not in the cards.
I am a Big Brother and see some these kids, they are modest. Most of the boys I have been paired with, are sharp, quick, happy to have a big brother. They keep me young, and allows me to understand how the younger generation think and operate. Most do not have parents. They are either raised by grandparents or single mothers. Not how Retirement was planned.

#43 Lala on 01.14.15 at 9:04 pm

@4 JSS dude are you serious, worst time to buy Canadian banks, sell before it’s late,all that money invested on oil and real estate…..

#44 John in Mtl on 01.14.15 at 9:13 pm

Wall Street Journal doesn’t seem to think Canada’s oil sands will tank anytime soon. New projects, yes, but what exists can produce on the cheap and for decades. Think long-term. Some companies are even expanding!!

Maybe people are having an initial knee-jerk / panic reaction before the dust settles and business resumes “almost as usual”.

http://www.wsj.com/articles/as-oil-slips-below-50-canada-digs-in-for-long-haul-1421114641

#45 Van Isle Renter on 01.14.15 at 9:16 pm

#14 TurnerNation on 01.14.15 at 7:31 pm

Bottom’s in oil boys. Start buying. Beep beep.

+++++++++++++++++++++++++++++++++++

Yeah…. not so much…. the bump in oil price was due to options expiry. Don’t expect the universe to have changed. Nothing has been shut in yet, so the supply has not changed.

#46 Mr Buyer on 01.14.15 at 9:21 pm

So my son asked to play hockey this year after returning to Japan from Canada. Many of his friends in Canada played hockey so he thought it was something he should get into for what ever reason. After playing house league hockey for 10 years with a brief double A stint and a few games of Bantam All-stars it is safe to say that I have been entirely indoctrinated into the hockey way of life but I have been away from it for 35 years now. Well we have a rink 60km from us in one direction and another 60km from us in another direction. One of the rinks sits among what is likely the highest concentration of commercial nuclear reactors on earth but the ice surface is nice. This rink is all painted up like a hockey rink but it is really a figure skating rink. Hockey is this brutish thing practiced by a small group of social misfits at strange hours. The skating here is some of the best I have seen anywhere but I could only cross my legs one way going forward for the entire 10 years I played hockey. I did finally figure out how to cross my legs forwards and backwards both ways so I could teach my kids but I will likely never use the new found talent in game play. Anyways 8 weeks into hockey life and we have dumped a huge amount of money into equipment, we have put over 2000kms on our brand new toyota hybrid mini van since the end of November and I am waiting on a skate sharpening machine to arrive from Canada because I have to spend $100 and a week to get our skates sharpened not so well after shipping them to some city 5 hours from here. My Japanese wife had no idea what this hockey thing was all about, she just thought it was cool. I think I will soon be living in a bachelor pad with my skate sharpener judging from the way she is looking at me lately. I should mention though that after 5 days of 6 hour a day public skating the two older kids can cross their legs both ways forward and almost there going backwards and the youngest can walk around the rink for a full hour now without asking to get off and play his DS. In short life is all good.

#47 Tony on 01.14.15 at 9:22 pm

DELETED

#48 Van Isle Renter on 01.14.15 at 9:22 pm

21 Ronaldo on 01.14.15 at 7:45 pm
#9 Van Isle Renter –

You can bet that at these prices, China is buying up all they can get.

++++++++++++++++++++++++++++++++++++

Doesn’t surprise me. Companies need to replace all that fake multi-hypothecated copper that is supposedly backing up their bank loans.

I also remember friends of mine stocking up on Bre-X at $100 because it used to be $240 and Nortel at $30 because it used to be $120.

#49 Jimmy Sausage on 01.14.15 at 9:23 pm

America is Rome & we all know what happened to Rome.

#50 ANON on 01.14.15 at 9:23 pm

Math to Ted: no.
Earth to Royal LePage: Start selling squirrel recipes.

#51 Smoking Man on 01.14.15 at 9:25 pm

The revenge of the Urbanites lead by the fearless teacher lady Wynne, ready to pounce on Cars again. Carbon Tax, save the trees.

So finally small business, big business, young families living in the boonies finally catch a break, cheap gas.

The phyco-spend-o-hallic libs are moving fast to slap us with a carbon
tax, on gasoline.

These commies sure know how to make the province attractive for investment and business..

I finally understand why Toronto Real Estate is so expensive.. It’s inhabitants are just plane stupid.

I don’t really care, pops not doing so good. So this is probably my last winter in this shit hole land of stupidity.

California, Arizona, Nevada, or maybe join Old Man in Mexico.

#52 Nobleton Bill on 01.14.15 at 9:31 pm

#20 JSS on 01.14.15 at 7:44 pm

‘There’s more rumbling about interest rate cuts in Canada.’

Can you offer us some information about where you have heard this? It’s news to me that this is common news. Thanks

#53 Alex on 01.14.15 at 9:33 pm

@ Mark

“I’ve been pounding the table for this, but deflation is profoundly currency positive, and the CAD$ will be no exception.”

Interest rate differentials drive 90% of currency moves. You don’t think a BoC cutting and a fed holding the line won’t drive capital out of Cdn bonds into US for the higher yields? Think about it.

#54 not 1st on 01.14.15 at 9:34 pm

#4 JSS on 01.14.15 at 7:12 pm

You do know that the bank of america has shorted our entire banking sector due to its exposure to oil and housing. You sure you want to be in there?

Our banks are rocks, with dividends. — Garth

#55 Daisy Mae on 01.14.15 at 9:36 pm

Royal LePage has a booth set up in Orchard Park Mall in Kelowna, BC, manned by no one. All computerized….gotta save costs! No REAL PERSON on sight. Just “touch the screen…” ;-)

#56 Charles Ponzi on 01.14.15 at 9:37 pm

Everything is formed in the mind first. Every creation starts with the spark of an idea. As everyone knows, before we can change anything in our lives the first thing we have to do is change our thoughts.

How we think about real estate is about to change. More people will start thinking about houses as a place to live that provides shelter rather than as an investment.

We really do create our reality on a collective level.

#57 Ret on 01.14.15 at 9:39 pm

If the $20-25 a week that I now save on gas would change my family’s lifestyle, then this family has a problem.

#58 Daisy Mae on 01.14.15 at 9:40 pm

“…In Britain it just tumbled so seriously that Blog Dog Carney is on the carpet…”

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

Awww….that’s SO sad.

#59 Mark on 01.14.15 at 9:41 pm

“Interest rate differentials drive 90% of currency moves. You don’t think a BoC cutting and a fed holding the line won’t drive capital out of Cdn bonds into US for the higher yields? Think about it.””

BoC cutting would push the CAD$ up. Interest rate differentials imply that currencies with low rates appreciate and currencies with high rates depreciate, so as to create relative consistency in terms of total return.

By your ‘logic’, any banana republic that simply raises its interest rates could have a currency that goes to the moon. We know it doesn’t work like that, and currencies with the high(er) rates tend to be the ones that weaken. Russia’s Ruble is a recent example.

And I disagree with your claim that “90%” of currency movements are explained by interest rate differentials. Can you back that up with anything?

#60 TurnerNation on 01.14.15 at 9:45 pm

Mike, son, are you arguing against me or oil price? Won’t be long.

#61 Deflation will be averted.... again. on 01.14.15 at 9:50 pm

I FINALLY realize that the governments of this world will never allow a true market correction. They believe must protect the greater good (and their own skin.)

I feel like the only kid in class who had their homework done, and upon realizing there would be no assignments handed in, the teacher decided to give an extension to everybody, as they simply can’t give the whole class F’s.

I really wish they would just allow this deflationary collapse to play out instead of punishing those who prepared themselves for it. My tax dollars will now be used to pay down more debt which I’m not responsible for.

FOR THE LOVE OF BLOG, just let the chips fall where they may, and I’ll take my chances, thank you very much.

It just doesn’t pay to go against the herd….. *sigh

#62 Dadeedum on 01.14.15 at 9:52 pm

#36 MARK

“I’ve been pounding the table for this, but deflation is profoundly currency positive… ”

So let me think about this: What you’re saying is that when prices go down, a dollar can buy more stuff?

Whoa. Deep.

Seriously Mark, you sound like someone who tries very hard to impress (“profoundly” currency positive?) but who hasn’t read the class notes yet.

#63 nonplused on 01.14.15 at 9:56 pm

I got a house price index report (Terrant or something) that said basically Toronto is the only place prices are still rising, even Vancouver is on a mild downslope.

I know Canada is mostly about the oil, but don’t we sell copper too? And all the other commodities basically.

I wouldn’t cry too much for Russia just yet, the collapse of the ruble has meant that they are able to redeem a lot of rubles at much less than they sold them for. I suspect that the bigger impact long term will be in Europe as exports to Russia are no longer economic. Russia has a long history of becoming significantly independent when necessary and riding out the storm.

If oil and the ruble stay low for an extended period, one might want to short German car manufacturers.

And let’s hope to Dog that Russian companies don’t start defaulting on US/EURO based debt. That, combined with the PIGS (Portugal, Italy, Greece and Spain) will probably finish off most of the European banks.

Back here in Cowtown I don’t sense a lot of fear in the streets just yet. Everyone seems pretty complacent. But if oil stays at $50 I think the province will literally shut down. We don’t have much oil left you can produce at that price. In fact I think many producers will have trouble paying their debts at these prices.

#64 TurnerNation on 01.14.15 at 10:06 pm

With yesterday’s B&W photo of wannabe ersatz blog dogess in mind…

http://www.boredpanda.com/men-use-instagram-like-women-bros-being-basic/#post0

#65 Nomad on 01.14.15 at 10:10 pm

I’m proud, my wife who was risk averse bought her first shares:

XEG ETF at 12.44 today.

Oil went up 6% at the end of day. Will it last? No.

#66 Mark on 01.14.15 at 10:12 pm

“So let me think about this: What you’re saying is that when prices go down, a dollar can buy more stuff?”

Not really. What I’m saying is that when people are borrowing, they’re in effect ‘shorting’ or selling a currency. Canadian dollars are exchanged for ‘stuff’. Houses. Cars. Vacations, etc. The currency goes down.

When the debt has to be repaid, there’s strong demand for currency to repay the debt. Strong demand for the Canadian dollar causes deflation, and causes currency appreciation. Basically the process in reverse.

The speculators who are causing the CAD$ to be weak, albeit temporarily, are playing with fire. As there is nothing that fundamentally would support a weaker Canadian dollar at this point, especially with the spectre of debt deflation hanging over the economy like Damocles’ sword. 2002-2005, 2009-2011, showed that reversals to the upside for the CAD/USD$ pair can be extremely strong, but this time around, the CAD$ may not stop at $1.10 before going much higher than that as the deflationary forces are stronger than ever, and the US is heading into a path of inflation and higher rates.

#67 quebec economist on 01.14.15 at 10:14 pm

I liked:

“Looks like a zucchini in heat” and the “throbbing cucumber”

love gardening ;)

#68 Smoking Man on 01.14.15 at 10:14 pm

You dogs ready for 5 year fixed mortgages at 2.5%

Ouch for savers.
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

#69 Washed Up Lawyer on 01.14.15 at 10:15 pm

Question for BC canines.

Do you remember the “booze runs” from BC to Alberta? Our pal Ralph Klein set a fixed dollar amount of tax on a 26 ounce bottle of spirits hence the tax was the same on any jar irrespective of price. Hence a bottle of “rotgut” (JD) had the same tax as that delightful smoky, peaty jar of Talisker.

Is that still the case? If so, I am buying a Dodge Challenger. Stars & Bars across the hood.

#70 BC_Doc on 01.14.15 at 10:17 pm

Energy cratering. Real estate next. Get ready for the Canadian version of a Panic. We got lucky and ducked the bad things in 2008/2009. Time to batten down the hatches. I hope I’m wrong, but I fear I’m right.

#71 Andrew Woburn on 01.14.15 at 10:18 pm

#161 Washed Up Lawyer on 01.14.15 at 12:00 am
2. One my law firm actually did on a filing with a securities commission on an IPO which was called “Initial Pubic Offering”. This won the “Chump of the Year Award” at our annual banquet.
====================

Love it. Were you financing a Sharon Stone movie?

It couldn’t have been the BC Securities Commission. They read everything and bitch about every misplaced comma. Or maybe I’m just on their watch list.

#72 Harbour on 01.14.15 at 10:18 pm

#44 John in Mtl

Makes me want to buy an oil stock

#73 dontcallmeshirley on 01.14.15 at 10:29 pm

I wonder if these publicized predictions from realtor bodies exposes them to civil suits for fraudulent misrepresentation?

Any lawyers or clever lay-people care to chime in?

#74 Smoking Man on 01.14.15 at 10:33 pm

Nat gas prices to explode higher.

Putin plays another check move. Cuts off gas supplies via Ukraine in the coldest month.. Many European countries affected. Who dident see this coming, who never took advantage of this. I sence the Ruble will rally, who needs crude sales when you control gas supply. And anyone sitting on long futers contracts on nat gas will have a great January.

Our leaders stupid.

Big Grin Here=)

#75 Ben on 01.14.15 at 10:35 pm

It’s out there Garth, even in the gold toting suburbs:

http://www.zerohedge.com/news/2015-01-14/canada-crude-contagion-calgary-home-prices-drop-most-2-years

#76 Washed Up Lawyer on 01.14.15 at 10:35 pm

#71 Andrew Woburn

“It couldn’t have been the BC Securities Commission. They read everything and bitch about every misplaced comma. Or maybe I’m just on their watch list.”

Reminds me of a conversation of one of our lawyers with a securities lawyer on the other side of the deal. Laboriously in a drawn out phone conversation over a 700 page document with the other lawyer saying “… a comma here, two lines down a comma here, next paragraph a comma there…”

Our lawyer finally said “Tell ya what. I’ll give you 10,000 commas. Put them any damn place you like.”

Nobody in Alberta reads prospectuses.

#77 Ocean Park BC on 01.14.15 at 10:37 pm

I went through four major financial corrections in my life, one divorce and a lawsuit. We lost two houses in that deal; ask me how I like real estate when a lawyer has a writ on your house. I moved from Windsor Ontario after the auto industry tanked could not handle the negativity and snow anymore traded it for rain. I rent a house with a partial ocean view for $ 1,700 a month from a woman who lives most of the time in Hong Kong. She owns three or four houses here in Ocean Park BC. The average house here starts at $650K (tear down) to 5M taxes around 700 a month. It’s a joke coming from a place where you can buy a decent 5 bedroom for $ 300,000 but not with the same view. People here do not think there is a bubble and they expect price increases every year they are special and I am real fun at dinner parties when it comes to talking about real estate. I am a sales rep for a US fortune 500 company; my co-workers in Alberta are having a cow at this moment. Most of them are in their forty’s with 65 to 80 percent of their net worth in real estate and are trying to go liquid good luck panic mode. I get the do you know what it’s like to wake up one day and find your net worth is 30 to 40 percent less. Cry me a river been there done that I came from a place where the real estate dropped – 6% a year and it’s just starting to recover. I am the poster child for bad real estate investments and buy default this time I am sitting back to see how this all plays out. My wife and I have good paying jobs with no debt and no real estate never been happier.
Keep up the good work Gath read your blog every day.

#78 economictsunami on 01.14.15 at 10:37 pm

QE, whether it be from the Fed, PBoC, BoE or ECB, is successful at chasing away safe haven money from sovereign bonds but cannot control (misallocated) global capital flows; where it’s sole intention is to inflate (distort) asset values.

For the real economy nothing but desperate, (as in Japan’s case) temporary, wealth effects…

Jim Clifton Chairman and CEO of Gallup: American business deaths now outnumber business births…

http://www.gallup.com/businessjournal/180431/american-entrepreneurship-dead-alive.aspx

The global deflation shock – how big and how bad?

http://blogs.ft.com/gavyndavies/2015/01/11/the-global-deflation-shock-how-big-and-how-bad/?

#79 Sheane Wallace on 01.14.15 at 10:46 pm

Mark,

BOC reports inflation, not deflation. Check on their web site.

You have eyes but refuse to use them which is worse then being blind, at blinds recognize their limitations.

Ca dollar declined 15 % recently, I pointed to few articles and there are many more on inflation of imported goods.

Your view of the monetary system is pathetic, there is no way you could have any business degree, certificate or degree in economics.

To state that there is deflation coming at a time of peak debt and zero interest rates means only one thing: Default on debt. Accompanied with perpetual depression. The future ‘growth’ to take us out of the mess is nothing but empty hope in that case.

Of course any sane person would know what default on debt would mean.

The other practical path is inflation through suppression of interest rates, which is the most likely long term outcome. With all the consequences for the currency. And you can’t use the new plastic notes as toilet paper either.

The example that you gave that decrease in interest rates drives currency up is sufficient to put you in a mad house for financial illiterate.

#80 Smoking Man on 01.14.15 at 10:50 pm

#71 BC_Doc on 01.14.15 at 10:17 pm
Energy cratering. Real estate next. Get ready for the Canadian version of a Panic. We got lucky and ducked the bad things in 2008/2009. Time to batten down the hatches. I hope I’m wrong, but I fear I’m right.
……..

No you don’t renter, you’re revealing in thought of these arrogant home owners pricks getting crushed.. Revenge of the basement dweller.

Forget charts, forget logic, learn how to read the herd. Understand culture, figure out emotion, only them can you win on almost any trade..

After I finish my Fiction story, I might do a book on Herdonomics. But that would be dumb, I will lose my advantage.

Silly thought..

#81 NoOneOfConsequence on 01.14.15 at 10:55 pm

I know you occasionally take issue with the “zero-guy”…but I have to say this was a very good read…kind of chimes with your blog post today too!
http://www.zerohedge.com/news/2015-01-14/canada-crude-contagion-calgary-home-prices-drop-most-2-years

#82 Sheane Wallace on 01.14.15 at 10:55 pm

#36 Mark on 01.14.15 at 8:37 pm
“There’s so much private debt and so little private CAD to pay it with.”

Precisely. And as the deflation picks up steam, incredible demand for CAD$ to repay debt will ensue. Which means that private Canadians will be forced to, for instance, sell their Arizona properties, buy Canadian dollars, to pay back their domestic mortgages (or help their adult children who are in a major state of distress!).

I’ve been pounding the table for this, but deflation is profoundly currency positive, and the CAD$ will be no exception.
——————————

You can bang you head in the wall all you want but will never get it.

Demand for dollars means higher rates! Period.

And not increased rates are the reason for a currency to collapse, they are action to stop the decline of a currency already in free fall and to stabilize it!

It is really embarrassing to display such ignorance, I am honestly ashamed that I have to read your posts, please go get some financial education, at least some formal introductionary course.

#83 SWL1976 on 01.14.15 at 10:56 pm

Easy. They made it up. But now because it’s been published in every major newspaper and stuck on TV, it becomes true. This is how the media works

———————————————-

That is how the media works, and it baffles my mind that so many smart people can not see that it is not just limited to real estate. Big media and American media in particular is owned by big business who are not in the business of being honest or telling the truth. They’re not lying about real estate but they are spoon feeding the masses lies and no one should be buying it, yet very intelligent people do

The Federal Reserve is the root of evil and is not owned or controlled by the American people like the name might lead one to believe. Yet when they say jump, we say how high?

#36 Mark – I’m listening, and while I am no financial genius I know how to think for myself and I think you make some good points

#49 Jimmy Sausage – Yuuuuuuuup. It’s only a matter of time and how messy it will get

#84 Mark on 01.14.15 at 11:07 pm

“Demand for dollars means higher rates! Period.”

Not at all. Demand for dollars (to repay debt) means deflation. Deflation means falling prices and falling CPI, strengthening CAD$. This all implies lower rates.

Don’t feel bad, almost nobody really understood how debt deflation worked prior to the 2008 collapse in the USA either.

#85 Mark on 01.14.15 at 11:13 pm

“To state that there is deflation coming at a time of peak debt and zero interest rates means only one thing: Default on debt. “

Of course there will be default on debt. That’s a given. Consumer debt especially, since that’s what’s extremely over-extended in Canada.

And why wouldn’t deflation come after peak debt? After all, when people no longer borrow as much, they can no longer spend as much, and hence, the (relatively fixed) output of the economy becomes cheaper, which makes the cost of servicing the debt even more expensive, and so on and so forth. A spiral of long-term increases in prices, gives way to a spiral of long-term decreases in prices.

Tell me this, if the value of your main asset, probably most of your net worth, loses 50%, as housing is in the process of — are you going to spend more, or are you likely to try and repay as much debt as possible and save more? For most, it is the latter, whether they like it or not. A huge chunk of consumption thus is removed from the economy and devoted to debt service. Sure, the lenders will have more money to spend as they’re paid back, but savers usually don’t turn into spenders over-night, and people didn’t get to be in the position to lend without being savers to begin with! This is why deflation is such a hard thing for central banks to break once it sets in. And I personally feel that the BoC is way, way behind the curve in lowering policy rates to match the deflationary reality we are facing in Canada.

#86 Nemesis on 01.14.15 at 11:19 pm

#ItHasNoBrain!… #ItKnowsNoFear!… #NightmareCukesOfTheAbyssal!

http://youtu.be/wXf_YodWw40

[NoteToGT: Admit it, for a moment there you were really afraid that I was going to link to an ‘action’ clip of REDACTED™ in a HotTub…]

#87 Leo Tolstoy on 01.14.15 at 11:20 pm

Precisely. And as the deflation picks up steam, incredible demand for CAD$ to repay debt will ensue. Which means that private Canadians will be forced to, for instance, sell their Arizona properties, buy Canadian dollars, to pay back their domestic mortgages (or help their adult children who are in a major state of distress!)

Lol! Clown.

So wrong so often.

#88 SWL1976 on 01.14.15 at 11:23 pm

#81 Smoking Man – Herdonomics

——————————–

I think you coined that one. I like it

#89 Andrew Woburn on 01.14.15 at 11:24 pm

A return to oil at $32 a barrel is no longer unthinkable –

http://qz.com/325794/oil-at-32-barrel-is-no-longer-unthinkable/

#90 Leo Tolstoy on 01.14.15 at 11:24 pm

Interest rate differentials drive 90% of currency moves. You don’t think a BoC cutting and a fed holding the line won’t drive capital out of Cdn bonds into US for the higher yields? Think about it.

Mark has been wrong about Toronto real estate, interest rates, the price of gold, gold mining stocks, Blackberry stock, and the Canadian dollar. He was ruined by the Nortel crash and was unable to find gainful employment as an engineer after graduation. Do you think he will admit to being wrong about this? Think about it.

#91 Sheane Wallace on 01.14.15 at 11:24 pm

#69 Smoking Man on 01.14.15 at 10:14 pm
You dogs ready for 5 year fixed mortgages at 2.5%

Ouch for savers.
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

………………………..

That is very interesting and typical for post-housing crash situation where there is room for more debt and the government decides to save the banks with interest rates suppression and with the cost of taking on new debt.

It is the medication for a housing crash hangover in the forma of a case of beer in the morning after heavy drinking provided you can handle it.

We used all our medication prior to the crash to get high, we drunk everything, including the case of beer and now we have no options to:
1. Grow further debt as we are firmly at peak debt
2. Decrease rates as they are already at 1 %, well they can go to zero and it seems this is what the bonds market is showing, one can easily make 12-15 % on bonds from now on but then…

The situation we are in could be worse than Japan as at least their debt is domestic and there are significant savings to offset it while ours is not.

The final stage is always the destruction of currency and combined with the oil decline we might get there faster then the Japanes. Despite these bond rates.

#92 Ole Doberman on 01.14.15 at 11:25 pm

Looks like sub prime lender Home Capital Group continues to crater.

HCG.TO

#93 45north on 01.14.15 at 11:27 pm

Ronaldo : You can bet that at these prices, China is buying up all they can get.

that’s not what I hear:

Iron ore inventories at ports in China fell below 100 million metric tons for the first time since February as the holdings in the world’s largest buyer dropped for a seventh week to post the longest run of declines in two years.

http://www.bloomberg.com/news/2015-01-13/iron-ore-holdings-at-china-s-ports-drop-below-100-million-tons.html

it sounds like China is slowing down. A lot.

John in Mtl: from your link: “It’s not well understood just how robust the oil sands are. If you stopped expansion of the oil sands tomorrow, you would have no decline in the production base for decades,”

that makes sense to me so I’m thinking that the long term outlook is bright for Calgary

Here’s a piece by Mike Shedlock: What About Canadian and Australian Real Estate?

Pettis states “The demand for real estate may or may not abate at some point in the future, given the size of Chinese demand to hold assets in a safe place – a demand which is not likely to drop with slower Chinese growth but rather to speed up.”

Demand to get money out of China will likely speed up. However, and in a rare (albeit slight) disagreement with Pettis, I suggest demand for real estate is likely to plunge once real estate investment is no longer considered a safe haven.
Read more at http://globaleconomicanalysis.blogspot.com/2012/11/how-sustainable-are-chinas-copper.html#vfkjqsue6prH2JZy.99

Mike Shedlock sees Chinese money as significant in Canada but Garth doesn’t. The CMHC survey of Canadian properties showed that off-shore money was insignificant. Mark makes a good point that if there was significant cash flowing into Canada then you would expect that the ratio of debt to housing cost would be lower.

I donno. The Chinese people that I know are invested in Canada and in Canadian real estate. Heavily invested. I must say that I am impressed with them: hard working, clever, tough.

#94 Sheane Wallace on 01.14.15 at 11:27 pm

#86 Mark on 01.14.15 at 11:13 pm
“To state that there is deflation coming at a time of peak debt and zero interest rates means only one thing: Default on debt. “

Of course there will be default on debt. That’s a given. Consumer debt especially, since that’s what’s extremely over-extended in Canada.
………………………………..

If I forward this to the government you might be investigated for a crime. Stating that our banking system is in jeopardy is a criminal offence and subject to prosecution.

#95 Jason Milchen on 01.14.15 at 11:29 pm

Canada’s 30 year bond is 2.13%. This is lower than the bottom on interest rates in July-2012 which was 2.19%.

We were never to see this again. Never say never, right!!!

#96 Leo Tolstoy on 01.14.15 at 11:29 pm

It is really embarrassing to display such ignorance, I am honestly ashamed that I have to read your posts, please go get some financial education, at least some formal introductionary course.

This is why he was banned from Red Flag deals. He created 100 nonsense posts a day.

He’s an embarrassment to this blog. And that’s saying something!

#97 Sheane Wallace on 01.14.15 at 11:30 pm

And why wouldn’t deflation come after peak debt?

Because that means perpetual depression, reduced economic activity and crash in the financial system. I would love to have deflation. Read Bernanke on the topic. Why do you think BOC talks down the dollar?

#98 Sheane Wallace on 01.14.15 at 11:32 pm

I expect significant tax cuts and rampant inflation in the next year or two. Much faster than anticipated due to oil prices decline.

Just watch it. it will unravel very quickly

#99 Washed Up Lawyer on 01.14.15 at 11:37 pm

Garth et al:

I promise that I will send no more stupid lawyer stories. I can’t face the prospects of being banned.

Even though they are “Shaggy Dog” stories. I know you like shaggy dogs.

After all, my graduating class voted me “Most Likely To Be Disbarred”.

#100 Sheane Wallace on 01.14.15 at 11:40 pm

#85 Mark on 01.14.15 at 11:07 pm
“Demand for dollars means higher rates! Period.”

Not at all. Demand for dollars (to repay debt) means deflation. Deflation means falling prices and falling CPI, strengthening CAD$. This all implies lower rates.
——————————————–
You will never get my Ca dollars for less than 6-8% as there are much better alternative investments. What you are getting is the savings of the suckers courtesy of the central bankers. It will work until the sheep runs for the exit. An then….

#101 omg the original on 01.14.15 at 11:43 pm

Well, Kellie wasn’t the only one who choked and inhaled their Tim’s this week when they learned of the latest realtor propaganda. Royal LePage actually just said this about Calgary’s housing market: prices will go up in 2015. Seriously
——————————-

Possibly one last gasp of the Greater Fool Theory in action.

#102 len on 01.14.15 at 11:43 pm

Deflation, far from being the horrible monster stalking the land, is an excellent driver of efficiency. Look at the consumer electronics – no one would argue that people will stop buying hi-tech products because they will cost less in the future. Rather, innovation increases so that today we have amazing consumer products at a fraction of the cost. We accomplish more with less.

The elites are the holders of debt – deflation is a nightmare for them but it is a good news for the average working person. Given wage stagnation for the working classes, deflation is a good news.

As a society, deflation makes us nimble, inflation makes us lazy. Deflation is also crucial to the survival of our planet and us in it.

Deflation is a nightmare to the debt payers, not the debt holders. Where prices fall, so do incomes. The worker is crushed. The monied get richer. — Garth

#103 Bottoms_Up on 01.14.15 at 11:45 pm

#263 Victor V on 01.14.15 at 4:44 pm
———————————————
Ok, let’s take a hypothetical situation.

Purchase price $500,000. 5% down bringing it to $475,000, but let’s say CMHC insurance is added to the mortgage, so the buyer owes $490,000.

They make payments for 5 years at an interest rate of 2.79%.

That brings their mortgage owing down to $417,000.

Let’s say prices crashed 20% overnight after they bought the place (bringing the value of their home down to $400,000). Then let’s say home prices flat-lined for the next 5 years (in a 2% inflationary environment), resulting in an effective extra 10% loss in value in their home over that time.

Total effective real estate loss = 30%

Upon renewal, they owe $417,000 on a $400,000 house.

The bank will be looking for a source of funds to cover the difference. The bank may consider lending them the difference in the form of a line of credit.

Yes it’s possible they might be forced to sell and realize a loss (they’d owe $17,000 to the bank and $20,000 to sell), but even in this fairly nasty crash situation they still have a fighting chance.

#104 Smoking Man on 01.14.15 at 11:45 pm

This is Jack talking.

I think back, few years ago.

The best day of my life. It was the day I discovered the meaning of a blissful existence.

I was not with then, and I was not with us.

It was a great day…

May you dogs have luck and go down that cliff one day, it feels so good.

#105 juno on 01.14.15 at 11:47 pm

I read that article today garth, if you read further down, there is a bunch of disclosure. sounded like if the world stop rotating then the price will continue to go up. but if more layoff and the economy go to crap then the bs they wrote on the top won’t hold its ground.

Listened to a guy representing oil in alberta ft mcmurray. The guy is an idiot! he said well the falling prices won’t hurt ft mc. They will just pump more oil to cover the cost. Well thats introducing more supply to an over supplied resource. That in turn willjust knock the price even lower.

Anyway your wrong the layoff are just beginning, in several months your going to see the impact intensify, and make its way to other businesses such as the coffee shop and eventually retail because everyone is going to be so freakin broke the Canadian Peso won’t buy you anything.

#106 Bottoms_Up on 01.14.15 at 11:48 pm

Damn, I think the truck nuts just shrunk 3 sizes.

#107 Oil Is Sticky on 01.14.15 at 11:49 pm

I have a very hard time believing that with today’s sophisticated computer modeling knowing that everyone around the world had straws in the ground could not predict a glut in oil. This makes me think this was done with ill intent.

#108 Bottoms_Up on 01.14.15 at 11:50 pm

#30 Retired Boomer – WI on 01.14.15 at 8:09 pm
———————————————————–
Yes, a 20% drop in income is a disaster, yet a 55% increase in housing supply is inconsequential to Teddy boy.

#109 JimH on 01.14.15 at 11:54 pm

#66 Nomad on 01.14.15 at 10:10 pm
“I’m proud, my wife who was risk averse bought her first shares: XEG ETF at 12.44 today…”
==================================
Oh come on, man! She’s not risk averse at all!

She married a bottom feeder like you, didn’t she?

I can’t think of a worse way to introduce a “risk averse” spouse to the markets than to “be proud” of her diving into an equity in a downtrend so easy to discern that a US Border Patrol Agent could spot it a mile away… even with his pantalones down around his ankles…

If you want to teach her to gamble, flights to Vegas are at rock bottom!

#110 Sheane Wallace on 01.14.15 at 11:58 pm

#95 Bottoms_Up

absolutely, until the interest rates go north of 6 % and this is coming much faster than you think.

#111 Suede on 01.15.15 at 12:00 am

http://www.amazon.com/gp/aw/d/1118799941/ref=redir_mdp_mobile/177-4681338-6580600

Smokey,

Not sure if you’re into reading books but this one sure details how much smarter Putin is than our leaders. He is a tactician

#112 Jester on 01.15.15 at 12:03 am

#88 Leo Tolstoy on 01.14.15 at 11:20 pm said in response to Mark #36:

Lol! Clown.

So wrong so often.

————

Or put differently, “Often in error, never in doubt”.

Then again, cut him some slack, if I had shorted the USD with loonies, I’d be tempted to come up with novel economic theories too … but I’d probably keep’em to my lonesome.

#113 crossbordershopper on 01.15.15 at 12:10 am

deflation? with the lower canadian dollar i see a lot of prices going up, sure gas at the pump is lower, no one ever talks about disel. trucks and tankers run on that, and prices havent moved much at all.
all the little people pay more for everything, in real money. cash, the little cash the goverment gives them or big corporations pay their staff.
so prices of real estate in calgary go down, who cares, 600 to 500k, your all wealthy people with a mortgage or not. fancy trucks, vacationing in cuba etc etc, oh ya its tough out their when your portfolio goes down.
people are dying in toronto because they are sleeping outside and freezing to death, ya best country in the world. people talk about their dogs like there people while we dont look at the old bum who has mental illness that will freeze. humans come first.

#114 Jester on 01.15.15 at 12:18 am

#243 Sheane Wallace on 01.14.15 at 2:38 pm
#249 Mark on 01.14.15 at 2:49 pm
#271 Sheane Wallace on 01.14.15 at 5:10 pm

Sheane, to understand Mark’s assertions, you have to realise that:
* he is to his admission short the USD and
* he is talking his book (probably deathly afraid of the loonie sinking much further)

Mark would do well to think hard about Garth’s advice not to embarrass himself with … his unique commentary.

#115 Jester on 01.15.15 at 12:19 am

#249 Mark on 01.14.15 at 2:49 pm said:
“Not seeing higher food prices, clothes are cheaper than ever, as are cars. Imported stuff is getting cheaper or remaining stable, despite the weaker CAD$, because there is very little demand either in Canada, or around the world.”

———-

Would this be on Smoking Man’s planet? Because down here on planet Earth, specifically in a country in the northernmost reaches of North America, prices of food, clothing, etc. have been going up and accelerating in at least the last six months.

#116 Mike on 01.15.15 at 12:35 am

#60 TurnerNation
Mike, son, are you arguing against me or oil price? Won’t be long.

Sorry dad, I didn’t know it was you.
I’ll still tell mom though that you are now spreading your usual BS on this blog. Come home so mom can spank you.

#117 ozy - the secret is out... on 01.15.15 at 12:44 am

the bank of mom and dad, my question is, don’t they ever run out of $$$, is not like they can print it!!

http://www.torontolife.com/informer/features/2014/11/04/the-bank-of-mom-and-dad/?page=all#tlb_multipage_anchor_2

#118 willworkforpickles on 01.15.15 at 12:45 am

The Saudi’s will likely keep oil prices low for two and a half years thereabouts to choke out future US fracking development …at which point they can raise oil prices again for a few years before trashing prices again.

They may even effectively control the world market out of reach to the rest of most world oil producers from that angle indefinitely.

#119 Mel on 01.15.15 at 12:56 am

Sorry Derek R:

According to your ” Ottawa to fill the monetary gab” statement gave me a menopausal flash.

Who exactly do you think will pay for that ” monetary gab”? Let me help you, YOU AND ME!

We should take Japan, and future Europe as an example. More debt, will not solve DEBT PROBLEM.
Sooner we start living within our means, save, pay down debt…. only then can we have long lasting economic progress.

Until then, all we are doing is chasing the impossible dream.

#120 Washed Up Lawyer on 01.15.15 at 1:07 am

The spike in Blackberry today should lead to prosecutions and a cease trade order if there is any integrity in the market. Where was the continuous disclosure?

As Michael Miliken said:

“If you are not trading on inside information, why are you trading at all?”

#121 Leo Tolstoy on 01.15.15 at 1:22 am

Or put differently, “Often in error, never in doubt”.

Then again, cut him some slack, if I had shorted the USD with loonies, I’d be tempted to come up with novel economic theories too … but I’d probably keep’em to my lonesome.

Good point. Marks for creative writing? Pun intended.

#122 Chris in Nanaimo on 01.15.15 at 1:40 am

Garth…..still advising to hold real return bonds during a deflationary period?

#123 Second Class on 01.15.15 at 1:44 am

I work in oil and gas have several years worth of after tax pay invested. Im not getting laid off anytime soon. I hope to pick up a house and some cheap canadian equities over the next 5-10 years. The only downside is the low Canadian dollar is going to hamp my spending on all those american purchases and trips to Vegas.

Oh well…. The downside of being a 1% er.

#124 screwed on 01.15.15 at 1:47 am

you amuse me

“After six years of rock-bottom interest rates, government incentives, massive stimulus and an epic buildup in debt, it’s astonishing we’re at this point.”

C’mon don’t be daft. This is not rocket science. All CBs have gone lock, stock and barrel with the program after Humpty Dumpty splattered all over the pavement and none of the tens of trillions of money from thin air could put HD back together.

But it has allowed a few to amass so much paper wealth that they are now holding and looking to buy up the world on the cheap. As long as their paper wealth is kept at “faith value”, they can pull it off.

Deflation is allowing these canards with the biggest balance sheets from thin air to get everyone else by the balls.

Say you didn’t see this coming?

What a wonderful paper game! Blow up the balance sheets of your own banks. Blow up the debt of marginal players, drive as much paper from thin air into commodities (the demand was never there) as to create the illusion of a growing and prospering world economy. Then pull the rug, collapse the commodities and see that the whole world gets flushed into a black hole.

Buy the world for cents on the almighty and everlasting King Dollar.
The script is old and if we’re lucky, someone is going to whack the shit out of the US and teach them a valuable lesson that’s long overdue.

You may erase my post but believe you me, there are many in the world who share my opinion and that number is growing.

#125 Larry1 on 01.15.15 at 2:02 am

In a deflationary env., Joe the plumber’s mortgage goes underwater. His house is worth less, his payments are harder to make. He repays in real dollars that are worth more than when he took out the loan. In tears he walks away from the debt and goes bankrupt, resets his life and never borrows again.

#126 Black Gold on 01.15.15 at 2:03 am

Anyone know where there are any empty oil tanker ships for rent ? Thinking of filling up on cheap oil and setting the anchors until the price rises against

#127 NoName on 01.15.15 at 2:19 am

@mike

take a look at this chart
goo.gl/aY1k6U

#128 Grasshopper 604 on 01.15.15 at 2:37 am

#100 WUL
—————–
Keep your spirits up! I’m somewhat of a newbie here (5-6 months) but I really enjoy your posts, shaggy dog or not!

#129 David on 01.15.15 at 3:34 am

Mr. Market showed up in Calgary and Toronto this week with a big frown on his face.

http://davidstockmanscontracorner.com/david-stockman-theres-no-free-lunch-from-lower-gas-prices/

#130 4 AM Sunrise on 01.15.15 at 3:52 am

The CREB also told people that the effect of falling oil on real estate this time around won’t be as bad as it was when oil last tanked in the 80’s. That’s like saying, “be glad that there’s no zombie apocalypse coming to town!”

#131 ANON on 01.15.15 at 6:13 am

#95 Sheane Wallace on 01.14.15 at 11:27 pm
“If I forward this to the government you might be investigated for a crime. Stating that our banking system is in jeopardy is a criminal offence and subject to prosecution.”

How about if you forward them your own “love of deflation”, which would mean “perpetual depression, reduced economic activity and crash in the financial system”. (on 01.14.15 at 11:30 pm )
Would that be persecuted under the same law as stating the mathematical impossibility of paying back more than what has been emitted, or under another law because it is an extreme *desire* for a crash of the financial system, reduced economic activity and misery for all?
Food for thought before posting around midnight :)

#132 I'm stupid on 01.15.15 at 6:44 am

Deflation is the economy’s way of trying to balance supply and demand. The reason it’s a hard cycle to break is because borrowers, who are the primary movers in a consumption economy, are tapped out. Prices come down to create more demand but it usually fails for 3 reasons.

1. The savers are the only ones that can spend and they don’t for obvious reasons
2. The spenders are tapped out and can’t take on more debt
3. Everyone starts looking for even lower prices

Deflation cannot be reversed without job creation or repayment of debt and central banks are incapable of doing either. That’s why they sweat at the mention of it.

#133 Sheane Wallace on 01.15.15 at 7:40 am

#132 ANON

No, because it can and will be addressed through inflation. no bank failures. I never said there would be default.

#134 TurnerNation on 01.15.15 at 8:55 am

Here at the lowest level of the pyramid-structure why must the next level above, our Glorious Leaders, continually have men armed with small arms and sandals attack us, then thump their chests and reminds us we are in democracy? Why the constant sell job? As for loss of life, as the Rumsfeld Regime said Ya gotta break a few eggs to make an omelette. “Acceptable losses”.
Made-for-tv-events replete with shaking and breathless cell phone videos. It must be true.
Every free thinking country gets it turn. Every few months. Duck and cover indeed.

What’s most important is, the “Economy” – wink wink.

#135 Victor V on 01.15.15 at 8:59 am

Ottawa still plans to balance budget, fulfil commitments, despite cheap oil

https://ca.finance.yahoo.com/news/ottawa-still-plans-balance-budget-fulfil-commitments-despite-012056348.html

VANCOVUER, B.C. – Federal Finance Minister Joe Oliver says the government still plans to balance the budget and keep its commitments despite the collapse of oil prices.

Oliver’s remarks follow recent expert warnings that the steep slide in crude prices could erase the government’s projected $1.6 billion surplus for the 2015-16 fiscal year…

“We remain confident that we can in fact balance the budget and we will do so,” Oliver said.

“The commitments we have made, we will honour.”

#136 robert james on 01.15.15 at 9:28 am

Fort Mac layoffs affect BC as well.. http://www.calgaryherald.com/news/metro/Collapsing+prices+residents+working+Alberta/10729938/story.html

#137 Mark on 01.15.15 at 9:36 am

“Mark would do well to think hard about Garth’s advice not to embarrass himself with … his unique commentary.”

Actually you’re the one embarrassing yourself by resorting to the personal attacks, rather than actually attempting to understand how deflation works, ie: that it is profoundly supportive of currency.

I’m not embarrassing anyone by pointing out the facts, that high interest rates generally are not accompanies by currency strength, and that in a deflationary environment, debt is extremely difficult to repay.

I think a few here are under the unfortunate delusion that the BoC will be able to just magically devalue, incomes will increase in a nice straight line, and debt will be repaid in an orderly fashion, coming out of one of the biggest consumer credit bubbles ever known to mankind.

The analogy with the plumber, and his eventual refusal to touch debt again, if he can extricate himself from his existing debts, as someone posted above, is spot-on.

#138 Dominoes Lining Up on 01.15.15 at 9:40 am

I believe this is yet another domino starting its fall, which will be part of a major economic and especially real estate correction in Canada.

Target is folding its Canadian operations.

http://www.thestar.com/business/2015/01/15/breaking-target-to-pull-out-of-canada.html

17,000 jobs lost.

More to follow.

#139 Mr Yukky Pants on 01.15.15 at 9:43 am

I guess I’ve been around the investing scene too long. I’m starting to remember things. Here’s what I’ve noticed in 40 or so years. Every once in a while commodities get too expensive…then there seems to be a huge ‘black swan’ event and the media joins in to create a panic…..then we watch as inventory gets scooped on the cheap by major industrial companies and stored in Shanghai and London.

When the news of the inventory build up hits the markets..prices explode upwards…and the whole thing starts again. I follow low level things like the insider trading stats…I see that CEO’s and Directors are buying with both fists while retail guys are puking up stocks because the media tells them that the sky is falling and it’s be ugly ‘forever’.

OK…so I’m a buyer…call me stupid….but I’d rather follow the smart money rather than chase the dummies.

#140 Mark on 01.15.15 at 9:44 am

“Upon renewal, they owe $417,000 on a $400,000 house.
The bank will be looking for a source of funds to cover the difference. The bank may consider lending them the difference in the form of a line of credit.

As I wrote in a previous post, the bank probably won’t actually force them to take out a LOC to cover the difference (ie: the negative equity). But the interest rate spread (the difference between the benchmark bond yield, and the actual rate offered at a given point on the yield curve) as applicable to the debt will adjust, if not on an individual basis, then on a systemic basis, to reflect the decreased credit-worthiness of the borrower (or all residential mortgage borrowers more broadly).

Canadians are *very* hooked on “discounted” rates, and most pay a 2-3% discount over the so-called “posted rate”.

When borrowers are trapped, in negative equity or even minimal equity, all a lender need do, to increase his profits, is only offer the “posted” rate for renewal. The borrower is trapped, and has little choice other than to accept the offer.

#141 Incubus on 01.15.15 at 9:46 am

Target has stunned the Canadian retail community by announcing it’s planning to close all its stores in Canada and file for creditor protection.

The announcement Thursday deals a huge blow to Target Canada’s 17,600 employees.

Target Canada said Thursday that to ensure fair treatment of its employees, nearly all will receive a minimum of 16 weeks of compensation, including wages and benefits coverage for those employees not required for the wind-down period.

All of Target Canada’s 133 stores will remain open during the liquidation process.

Read more: http://www.ctvnews.ca/business/target-pulling-out-of-canada-after-failed-expansion-1.2189973#ixzz3Oti16yiy

#142 Nemesis on 01.15.15 at 9:47 am

#”Oooops”….

Target Will Abandon Canada After Racking Up Billions in Losses

http://bloom.bg/1576BPT

#143 More grim news on 01.15.15 at 9:47 am

Target pulling out of Canada. That didn’t take long.

#144 Mark on 01.15.15 at 9:54 am

“Ha you really believe the greatest RE bull run ever recorded in Canada will simply just end with a whimper and slowly decay, hardly there will be just as much fire works on the TSX as we as witnessed in 2008-2009 S&P south of the border.”

There are a few reasons to believe that it might not be as rough in Canada.

1) TSX-listed firms are mostly inter-listed in the USA/NYSE, and there is a significant amount of foreign ownership.

2) Most TSX components are closer to the lower-bound of their ranges, rather than the upper bound.

3) The TSX tends to be inversely correlated with interest rates, on account of its significant resource exposure, and nature of the banks’ businesses.

4) Exposure to the homebuilding sectors, home supply retaillers, housing manufacturers, etc., in the TSX is practically non-existent.

5) The CMHC and most of Canada’s subprime sector has the explicit backstop of the Government of Canada, while during the US financial crisis circa 2008/2009, Fannie Mae/Freddie Mac were not guaranteed. There was considerable uncertainty as to the nature of the guarantee.

6) The TSX hasn’t gone anywhere in 7 years now, and is dramatically more supported with assets and retained earnings than it was in 2008. P/B, P/E, etc., has already undergone a significant level of compression.

#145 rosie "moving forward" in the knowledge that, "this won't end well" on 01.15.15 at 10:02 am

Target going, 17600 jobs as well.

#146 fancy_pants on 01.15.15 at 10:03 am

some of these posts are beginning to scare me, and I’m representative of the mortgage free homeowner with a healthy rainy day fund.

Traditional economics says do this: action monetary policy towards deflation to reset the pendulum back towards savers. However, since govt’s have walked the poisonous path towards economies driven by debt + inflation, they too would have to swallow the same pill. I think economies are too far gone now. too late for rehab.

since the 60’s the Canadian and US economies has been give some andrenaline shots for boosts now and then. Hey good stuff! bumps along the road resulted in shots of increased quantities and at some point became the new normal. Economies (sheeple) expected more and more and soon these shots morphed into stronger drugs. In 2008/09 we fell of a high ledge, but gave the economic cadaver a heavy shot of heroin. picked it up and sent it along again. heading for a cliff but as any addict, in complete denial. but hey, with another shot or two, we can fly right?

Savers and debtors stuck in the same economic cadaver and once it falls of the cliff, we are all toast. But no, I don’t offer this as the truth. As mainstream media tells me, everything is fine. Keep the rose coloured glasses on. you are special. you are entitled to all life has to offer. just put it on credit. hugs and high fives. tomorrow never comes.

#147 Mark on 01.15.15 at 10:14 am

“Target going, 17600 jobs as well.”

Shhh.. I hear a hissing sound. Is that the sound of the hot air and over-inflation coming out of Canada’s shopping mall REITs???

Leases to be honored or bought out. — Garth

#148 Smoking Man on 01.15.15 at 10:22 am

Missing in MSM

5 year mortgages. 2.25%

Very doable at current Benchmark.
How low will it go.

I suspect the Swiss will be looking to put money anywhere but home.

-0.75 negative yields.. Ouch

#149 Dominoes Lining Up on 01.15.15 at 10:26 am

Target closing is a major perception changer for our overall economy.

Target has huge square footage prime locations in some of Canada’s newest malls. Who will fill those spots? Walmart? Not likely, as their profits are slim even though Target did not affect them much here. The Bay? Too expensive for indebted consumers.

Consider, there are Zeller’s locations that are still vacant two years after closing.

If you have been to places in the southern hemisphere, you will know what it’s like to go into a shopping mall and find vacant store spaces all around you, with the centre courts turned into flea markets because the landlords are hoping for bigger tenants who never come. By the end of 2015, parts of Canada may start looking like that.

I expect more shutdowns and layoffs very soon, in retail and restaurant/hospitality sectors.

Could be an ugly and painful winter.

#150 Daisy Mae on 01.15.15 at 10:31 am

News Alert
U.S. retailer Target to close all 133 stores in Canada

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

#151 Van Isle Renter on 01.15.15 at 10:31 am

#100 Washed Up Lawyer on 01.14.15 at 11:37 pm
Garth et al:

I promise that I will send no more stupid lawyer stories. I can’t face the prospects of being banned.

Even though they are “Shaggy Dog” stories. I know you like shaggy dogs.

After all, my graduating class voted me “Most Likely To Be Disbarred”.

++++++++++++++++++++++++++++++++++

So are you a Criminal Lawyer or a Criminal. Lawyer. ?

Better Call Saul!!!

#152 Sam Worthington on 01.15.15 at 10:38 am

Garth,

Topic for todya’s post, a big one:

Target to pull out of Canada, close its 133 locations

https://ca.finance.yahoo.com/news/newsalert-target-pull-canada-close-133-locations-133016878.html

The U.S. based retail company has 133 Canadian locations and 17,600 employees across the country.
Target Corp. will also record about US$5.4 billion in pre-tax losses in its fourth-quarter, mostly related to the Canadian operation.

#153 Mark on 01.15.15 at 10:41 am

“Anyway your wrong the layoff are just beginning, in several months your going to see the impact intensify, and make its way to other businesses such as the coffee shop and eventually retail because everyone is going to be so freakin broke the Canadian Peso won’t buy you anything”

Actually the problem is likely to be, the “Canadian Peso” will buy you a whole dumptruck full of goods and services. Except that few actually have many of them to spend, as they’re needing to pay back increasingly expensive-to-service debt.

Why will debt be expensive to service when interest rates aren’t going anywhere? Because credit-worthiness is the issue. With house prices declining, no longer can lenders rely upon home equity and other collateral as the backstop to debt. Hence, people who would have been borrowing relatively cheap on a mortgage, are now increasingly going to be finding their consumer financing options limited to what is often known as subprime credit.

As another poster pointed out, without wage growth, you cannot have inflation, and the environment today is not supportive of wage growth at all.

Anyways kids, buckle up, the BoC announcement today could create a lot of turbulence. Whatever it might be (I expect either a cut, or language pointing to a cut).

#154 Andrew on 01.15.15 at 10:41 am

Garth you mention massive stimulus. Can you explain the stimulus in Canada? I was expecting a boost to infrastructure spending but since the 2008 crash there has been very limited money going into much needed infrastructure especially in Calgary. I find it hard to believe there was ever any stimulus provided.

#155 Mark on 01.15.15 at 10:43 am

“Leases to be honored or bought out. — Garth”

In case you didn’t catch the news, the Canadian subsidiary is filing for bankruptcy protection under the CCAA. If the intent was to pay everyone in full, there would have been no need for that.

Do not jump to that conclusion. — Garth

#156 Toronto CA on 01.15.15 at 10:45 am

Well, that escalated quickly. The holiday shopping numbers must have been very dissapointing for them to pull the plug on Target after repeating that they would keep trying to turn a profit here before abandoning. A $5+ billion dollar write-down is nothing to take lightly for a CEO.

If I were a betting man, I’d say Sears Canada is not far behind.

#157 cramar on 01.15.15 at 10:45 am

Ah, give Royal a break! Maybe they closed their doors in Calgary, and just have a janitor maintaining things. He was asked for a statement and pulled a prediction written 6-months ago out of the files. Yup! That’s prolly what happened. The alternative is less palatable.

#158 Obvious Truth on 01.15.15 at 10:46 am

Lots of fuss about the dollar. It’s good to know some basic economic theory although it is just that. Theory. Scholars and economists would be the wealthiest people around if it worked like textbooks say it should.

In the real world money shows us the way and only later do we find out why.

Fact is that the economy has been deteriorating for a while. US is good so money flows there.

When advisors and managers like garth recommend overweight US, money flows. I’m thinking even our very own banks are overweighting the US.

Then factor in worldwide investors anticipating problems in canada and the move gets accelerated. Ask Kuroda and Abe where they are putting their money. And maybe traders and algos pile on. We don’t need to know the exact problems or the exact policy responses. The ‘known unknowns’ if you will. We have had many clues to these in various statscan reports and bank earnings. All of these fleshed out on this blog. And now oil has greased the wheels. And nobody really cares about canada. We are not special. Unless being the most indebted people counts.

If money can get a better return elsewhere it will. Only if and when the ‘unknown unknowns’ get played out do we need to think of coming back. Why bother right now. All you will get is a big headache. And memories of listening to Donald Rumsfeld.

#159 cowtown cowboy on 01.15.15 at 10:59 am

Maybe Pete should ride off into the sunset and let someone younger have a chance….35+years, in their 60’s and STILL working…typical boomer narcissist that can’t take a hint that it’s time to p*ss off.

#160 The Ides of January on 01.15.15 at 11:15 am

Uh oh…. :(

http://www.theglobeandmail.com/report-on-business/bombardier-to-slash-1000-jobs-take-14-billion-impairment-charge/article22457908/

It’s January 15 – the Ides of January – “the good times are over”.

http://www.businessinsider.com/bill-gross-january-investment-outlook-2015-1

https://www.janus.com/bill-gross-investment-outlook

How many more layoff announcements today? This week?

I bet there’s at least 3 more big ones by the weekend.

Retail :(

Stocks :(

Real Estate :(

Alberta :(

Jobs :(

#161 Capt. Obvious on 01.15.15 at 11:18 am

Target just announced they’re shutting down in Canada. So, that’s bad. 133 stores and about 17,600 employees.

I liked how clean their stores were, but they always seemed poorly stocked.

#162 Henry Rearden on 01.15.15 at 11:24 am

House prices still cratering here in Nova Scotia. It’s a bloodbath out there. Timbeeeerrrrrrrrrrrr!

#163 Daisy Mae on 01.15.15 at 11:26 am

GLOBE NEWS: “Bombardier to slash 1000 jobs….”

#164 Canadian housing bubble to CRASH on 01.15.15 at 11:29 am

Uneducated high school drop out realtors are clueless to what is happening. The big boys who shorted Canada know oil jobs are gone as well as manufacturing and lots of retail like Target. Lots of unemployed people and lots of huge retail stores to sit empty. It’s going to be a HARD LANDING for canadian housing

#165 Ex-Cowtown on 01.15.15 at 11:29 am

#162 cowtown cowboy on 01.15.15 at 10:59 am

Maybe Pete should ride off into the sunset and let someone younger have a chance….35+years, in their 60’s and STILL working…typical boomer narcissist that can’t take a hint that it’s time to p*ss off.
++++++++++++++++++++++++++++++++++++

May you become in age that which you despised in youth.

Oh wait…. you’re already there.

#166 Holy Crap wheres The Tylenol on 01.15.15 at 11:34 am

Target missed the target here!!!!! —–> —–>—–>
O

Canadians where looking for US sales and prices here?
Perhaps it was bad timing?
Lack of coordination on logistics and inventory?
Lack luster sales?
Not competitive enough for the likes of Walmart?
Or perhaps the Canadian Peso has hastened their demise with a return on profit now @ 0.83% of USD before bank conversion.
Too bad, I feel bad for the employees who where shafted when they were booted out of Zellers and had to renegotiate positions with Target. Now these large locations will probably go vacant for a long, long time!
Oh crap how our malls are going to start looking like the likes of Detroit, Baltimore and so on………………..

#167 chapter 9 on 01.15.15 at 11:46 am

“You’ll pay more, one way or another,” Premier Jim Prentice. Of course we will, probably because between 2005/06 and 2012/13 the Alberta government spent $41 Billion more on programs that was warranted by population growth and inflation. Money’s that went into the trust fund during the same time $4.5 billion was cancelled out cause they took out $7.4 billion.

Maybe the saying “Please Lord if there is another boom I promise not to piss it all away” should be painted on the Alberta legislature!!!

#168 Derek R on 01.15.15 at 12:04 pm

#120 Mel on 01.15.15 at 12:56 am wrote
Who exactly do you think will pay for that ” monetary gap”? Let me help you, YOU AND ME!

That’s not how it works in the real world. When a government runs a surplus it’s making a profit. Who is it making that profit out of? YOU AND ME! When its running a deficit, it’s making a loss. Who is it losing to? YOU AND ME.

Now maybe you don’t mind the government paying down its debt by running up yours. But I don’t like it. If the government wants to make a profit, it can get the money from other countries via the trade surplus. If there isn’t a trade surplus, too bad. It shouldn’t be asking its citizens to fill the gap. We’ve got our own debt to deal with.

Maybe it’ll help to look at it this way. The government is like the bank in a poker game. When the bank is winning, we’re losing. When the bank is losing we’re winning.

Now I’d rather be in a poker game where the bank is losing money to me. I definitely don’t want to be in a poker game where I’m losing to the bank.

#169 cowtown cowboy on 01.15.15 at 12:09 pm

#162 cowtown cowboy on 01.15.15 at 10:59 am

Maybe Pete should ride off into the sunset and let someone younger have a chance….35+years, in their 60’s and STILL working…typical boomer narcissist that can’t take a hint that it’s time to p*ss off.
++++++++++++++++++++++++++++++++++++

May you become in age that which you despised in youth.

Oh wait…. you’re already there.
++++++++++++++++++++++++++++++++++++

Glad to see that you’re ‘Ex-Cowtown’…

#170 Derek R on 01.15.15 at 12:11 pm

#120 Mel on 01.15.15 at 12:56 am wrote:
We should take Japan, and future Europe as an example. More debt, will not solve DEBT PROBLEM.
Sooner we start living within our means, save, pay down debt…. only then can we have long lasting economic progress.

Totally agree with you on this. More debt will not solve the debt problem. Only more money will do that.

#171 Rational Optimist on 01.15.15 at 12:11 pm

It’s not good to get notice from a massive retailer that our market isn’t worth it to them, but those are by and large not very good jobs. I am not discounted the good corporate and logistical jobs that will be lost, too, but most of them are poorly-paid retail and a lot part-time.

Much, much worse is the news from Bombardier. Those are all good jobs.

By the way, Mark is on the record at #156 as expecting either a rate cut or language anticipating a rate cut today.

#172 Polozified on 01.15.15 at 12:11 pm

Target cutting 17,000
Bombardier cutting 1,000

It’s coming

#173 realtor are useless and liars on 01.15.15 at 12:18 pm

A world of financial pain is coming for useless realtors who’s should get paid no more then $2000 to sell a house. The time is coming realtors.

http://www.cbc.ca/news/business/real-estate-commissions-could-fall-as-new-competition-heats-up-1.2900928

#174 Toronto CA on 01.15.15 at 12:29 pm

Those Bombardier jobs are being lost in Kansas and Mexico from the article I read, related to building lear jets?

“Bombardier Inc on Thursday cut its forecasts for 2014 and said it would slash 1,000 jobs in Mexico and the United States and suspend the development of its Learjet 85 business aircraft because of weak demand.”

So, unlike Target, that won’t have as much direct impact in Canada.

#175 Smoking Man on 01.15.15 at 12:36 pm

#166 Daisy Mae on 01.15.15 at 11:26 am
GLOBE NEWS: “Bombardier to slash 1000 jobs….”

True, but don’t you read the entire story.

Job losses in Mexico and USA no losses in Canada.. It’s the lear jet production, in fact they will be adding Canadian staff shortly.. Wee new cool plane called C- series.

#176 Bottoms_Up on 01.15.15 at 12:37 pm

#170 Derek R on 01.15.15 at 12:04 pm
—————————————–
It doesn’t matter because you pay/gain either way.

‘Bank’ is winning (hopefully) means tax cuts (debt reduction) and/or more services.

‘Bank’ is losing means tax increases and loss of services.

Damned if you do, damned if you don’t.

#177 Mark on 01.15.15 at 12:39 pm

“By the way, Mark is on the record at #156 as expecting either a rate cut or language anticipating a rate cut today.”

Well not today, but the next announcement. I was unfortunately looking at a calendar of the wrong month :(. Its been a long week, lol.

#178 Bottoms_Up on 01.15.15 at 12:42 pm

#168 Holy Crap wheres The Tylenol on 01.15.15 at 11:34 am
————————————————
Target didn’t realize there’s a limit to how much Canadians will take.

We expected prices in-line with Walmart, but instead got prices more in-line with Loblaws.

I think they thought that our debt load was an indication of our propensity for frivolous spending, rather than what the truth is, that we are over-taxed and over-charged on just about everything.

A few conversations with a couple of Canadians would have given them the necessary information to succeed here (or to never come here in the first place).

#179 Dub on 01.15.15 at 12:46 pm

More facts to support that RE-industry in Canada is a fraud. Try do use the Canadian MLS app, it is horrendous compared to the American counterparts.

#180 Balmuto on 01.15.15 at 12:49 pm

Bombardier job cuts are in Mexico and Kansas:

http://www.bloomberg.com/news/2015-01-15/bombardier-pauses-learjet-program-will-cut-about-1-000-jobs.html

#181 Dual Citizen In Canada on 01.15.15 at 12:53 pm

I can see history repeating itself, once again. In the 80s and 90s it was the brain drain to the south, myself included. As a fair weather citizen of North America, I will go where life is better for me and my family. Doctors, Lawyers, Engineers, get your suitcases ready! TFWs need not apply.

#182 CalgaryRocks on 01.15.15 at 12:56 pm

#169 chapter 9 on 01.15.15 at 11:46 am
“You’ll pay more, one way or another,” Premier Jim Prentice. Of course we will, probably because between 2005/06 and 2012/13 the Alberta government spent $41 Billion more on programs that was warranted by population growth and inflation. Money’s that went into the trust fund during the same time $4.5 billion was cancelled out cause they took out $7.4 billion.

When governments do what you suggest, ie spend within their means, pay off debt, cut government and save for a rainy day they are despised, vilified and sometimes run out of town by a majority of the population, including all public unions.

#183 miketheengineer on 01.15.15 at 1:10 pm

Garth et al:

Bulgaria, Greece, Macedonia, Romania, Croatia and Turkey all reported a halt in gas shipments from Russia through Ukraine.

http://www.dailymail.co.uk/news/article-1106382/Europe-plunged-energy-crisis-Russia-cuts-gas-supply-Ukraine.html#ixzz3OuXCJCaF

#184 Grantmi on 01.15.15 at 1:16 pm

#174 Polozified on 01.15.15 at 12:11 pm

Target cutting 17,000
Bombardier cutting 1,000

It’s coming

Plus the 1,000 from Suncor yesterday!… and it’s 17,500 @ Target. (Don’t forget about those 500 spots)

Not to mention all the jobs going to be lost at all the other stores in Malls that Target anchors. Ouch ouch ouch!!! (that’s 3 ouches!)

#185 Dub on 01.15.15 at 1:20 pm

How could Target survive with empty shelves? Every-time we went there they were out of stock. And even if they had the shelves full, they did not have enough choice.
If you do not have it on the shelves, have a sticker or code on the shelve to order it on-line and receive it in store. The buyers are turned off of Target big time. No choice for us, no money for you. They had it coming.

#186 TurnerNation on 01.15.15 at 1:23 pm

Dollarama stock volume (mostly crossed) alert today. Likely a bump from Target’s miss.

#187 Ex-Cowtown on 01.15.15 at 1:36 pm

#171 cowtown cowboy on 01.15.15 at 12:09 pm

#162 cowtown cowboy on 01.15.15 at 10:59 am

Maybe Pete should ride off into the sunset and let someone younger have a chance….35+years, in their 60’s and STILL working…typical boomer narcissist that can’t take a hint that it’s time to p*ss off.
++++++++++++++++++++++++++++++++++++

May you become in age that which you despised in youth.

Oh wait…. you’re already there.
++++++++++++++++++++++++++++++++++++

Glad to see that you’re ‘Ex-Cowtown’…

+++++++++++++++++++++++++++++++++++

When oil crashed in the 80’s I was a new grad and had nothing to my name but a pile of student loans. I didn’t bitch and whine about the old guys and hoped they’d “P*ss off”. I started my first company (from nothing), and struggled for several years. I finally cashed out at just under a million $ payday and then went on and then repeated as necessary.

When you’re done you’re whining maybe try to start something of your own instead of blaming others. You should try hanging with the grey-hairs and seeing what you can learn. Once I learned that lesson things started to click along nicely.

The reason I’m Ex-Cowtown is that I saw this train wreck comin’ long ago and got out of Dodge. How did I know a train wreck was a comin’? Years ago an old guy told me what to look for. I’m now starting a software company and contemplating moving back to Cowtown once the smoke from the ruins has abated.

I guess then I’ll be Ex-Ex-Cowtown.

#188 Not Group Think on 01.15.15 at 1:44 pm

Target pulling out will increase consumer prices.

The Game changer is Swiss rates are now -0.75%. US will stay where they are. Canada may reduce to 0.50%.

Spring detached market will be in a tear in Vancouver and Toronto. I predict 2.29% 5 year mortgages.

#189 Millmech on 01.15.15 at 1:50 pm

Did anyone even read that the bombardier jobs cuts are all in the states.Seems like a bunch of chicken littles here today.

#190 Grantmi on 01.15.15 at 1:51 pm

#190 Not Group Think on 01.15.15 at 1:44 pm

The Game changer is Swiss rates are now -0.75%. US will stay where they are. Canada may reduce to 0.50%.

Spring detached market will be in a tear in Vancouver and Toronto. I predict 2.29% 5 year mortgages.

What are you smoking!!!

#191 Panhead on 01.15.15 at 1:51 pm

I bet all those people who removed their underground oil tanks in 604 are kikking themselves in the ass …

#192 Pre-Retiree on 01.15.15 at 1:54 pm

I actually enjoy reading Mark’s posts.
Not only for the well-thought arguments but also for the absence of orthographical or grammatical errors – real proof of a superior education. One wishes one could say that about every other posts on this blog.

#193 Reddy on 01.15.15 at 2:05 pm

I’ll miss you target
I’ll miss You too Sophie

#194 Musty Basement Dweller on 01.15.15 at 2:07 pm

Since the real estate agent cartel produces both the predictions (which the mainstream media adore) As Well as the Statistics, they are in a great position to ensure their predictions come true. Their stats of price increases in Toronto and Vancouver in the past year are just plain false and manipulated.

#195 Dwilly on 01.15.15 at 2:07 pm

Hey Garth, completely off topic, but you always recommend a “completion” or “alternatives” ETF as a part of portfolio. Without making any specific recommendation, could you provide a couple of examples of ETF tickers that fit this? You thinking like XAL? Or something US-listed?

#196 The Ides of January on 01.15.15 at 2:07 pm

Uh oh……

Sony closing all stores in Canada within two months.

http://business.financialpost.com/2015/01/15/sony-corp-to-close-its-canadians-stores-all-14-of-them/

(Garth better replace his 1985 cassette Walkman pronto!)

#197 Victor V on 01.15.15 at 2:12 pm

Woe Canada: Prentice says Alberta oil crunch will hurt economies across country

https://ca.finance.yahoo.com/news/woe-canada-prentice-says-alberta-oil-crunch-hurt-003012359.html

Prentice said members of his cabinet and caucus will soon fan out to talk to Albertans about how to make up that massive shortfall, including discussions on tax hikes and bringing in a sales tax.

He is promising fundamental change to Alberta’s books, saying it’s time to get day-to-day spending off the roller-coaster of volatile oil revenues.

Prentice also said that public sector workers need to come to the table to help find a solution.

He declined to say if that involves wage rollbacks or job cuts, but noted that Alberta’s public sector makes on average more than their counterparts across Canada.

Labour leaders said that while they are all in favour of revenue reform, Prentice is cherry picking the labour issue.

They said Alberta’s red hot economy and inflation have translated into public sector wages that are on average five per cent higher than other jurisdictions, but also private sector wages that are around 25 per cent higher.
Woe Canada: Prentice says Alberta oil crunch will hurt economies across country

“You can pick any sector, any place, any job description and we’re getting paid better than anywhere else in the country,” said Mark Ramsankar, head of the Alberta Teachers’ Association.

“I’m not apologizing for where Alberta teachers are sitting.”

#198 Jester on 01.15.15 at 2:14 pm

#140 Mark on 01.15.15 at 9:36 am said:
“Actually you’re the one embarrassing yourself by resorting to the personal attacks, rather than actually attempting to understand how
deflation works, ie: that it is profoundly supportive of currency….”

————

Hey, you the man. Go ahead and short the USD some more, for all I care. Garth, economists, the guy who wrote the other day who works at an FX
trading department, and everyone else who disagrees with you must all be from the flat-Earth society, and you’re the lone Galileo here.

Just do us all a favour and please stop posting the novel economic theories. Keep’em proprietary. :)

#199 Mark on 01.15.15 at 2:21 pm

“It’s the lear jet production, in fact they will be adding Canadian staff shortly.. Wee new cool plane called C- series.”

Great plane and the specs would appear to indicate that it will blow its competition out of the water cost and performance wise. In fact, you could almost say that the C-Series really doesn’t have any meaningful competition.

The real problem is that Bombardier really hasn’t sold many. A problem that Bombardier actually had in the early 1990s with the CRJ, yet over 1000 ended up being sold. Keeping fingers crossed of course, as then, and now, they do have quite a compelling product that meets the market need.

#200 Dub on 01.15.15 at 2:31 pm

REIT’s like Rio Can will be effected by Target leaving…

http://investor.riocan.com/English/investor-relations/press-releases/press-release-details/2015/RioCan-Real-Estate-Investment-Trust-Provides-an-Update-on-Target-Canada-Corporations-Announcement-to-Withdraw-from-the-Canadian-Market/default.aspx

#201 Rational Optimist on 01.15.15 at 2:36 pm

179 Mark on 01.15.15 at 12:39 pm

Hope next week’s better for you. I was over here thinking you had an ‘in’ and knew about a surprise announcement.

By the way, I thought your post at #36 was very well-put.

#202 fancy_pants on 01.15.15 at 2:38 pm

#170 Derek R on 01.15.15 at 12:04 pm
Maybe it’ll help to look at it this way. The government is like the bank in a poker game. When the bank is winning, we’re losing. When the bank is losing we’re winning.

Interesting take on that. The problem is they direct ‘our winnings’ to buy votes from select privy organizations and inner circle friends that in turn elect them in power again. Or it could be I cimply missed the bliss of winnings from cancelled gas plants and other great gov’t investments.

You and me, your uncle Bob, my kids, your kids kids, and dear Granny Sue in Hongcouver end up with the bill in one form or another. now or later.

#203 Rational Optimist on 01.15.15 at 2:42 pm

194 Pre-Retiree on 01.15.15 at 1:54 pm

“One wishes one could say that about every other posts [sic] on this blog.”

You criticised others for their grammatical errors, and promptly made one of your own. You could have easily complimented the commenter without insulting others.

#204 Derek R on 01.15.15 at 2:47 pm

#178 Bottoms_Up on 01.15.15 at 12:37 pm wrote:
‘Bank’ is winning (hopefully) means tax cuts (debt reduction) and/or more services.

‘Bank’ is losing means tax increases and loss of services.

True enough but that’s because the government wants a balanced budget, and they don’t care how it affects us.

Anyway who’s scared of government debt? I own plenty of it. That’s what bonds are. According to Garth, everybody should own some. The government is paying me (and the other bond-owning blog dogs) more in interest and capital repayments than it cost me to buy it. So I love it. More please!

If the government debt is bigger then there’s more bonds to go around. And the extra government spending might mean that ordinary people could actually save enough money to buy them.

If the government pays off all its debt, we lovers of balanced liquid, diversified portfolios are going to be in trouble!

#205 bdy sktrn on 01.15.15 at 2:50 pm

#70 Washed Up Lawyer on 01.14.15 at 10:15 pm
….
tax on a 26 ounce bottle of spirits hence the tax was the same on any jar ‘irrespective’ of price.
————————————————-
It makes me feel all warm and tingly to hear the proper word selection, thank you.

And to any others who use ‘irregardless’, don’t.

Also it’s median , not meridian, for the center of the road.

Lastly. I’ve got $5k for anyone who can tell me the difference between “rate of speed” and “speed”.

p.s. Shocking drops in rates continue. Borrowing one’s brains out seems like the right move.

#206 fancy_pants on 01.15.15 at 2:51 pm

and on and on it goes…
http://www.cbc.ca/news/business/sony-canada-to-close-all-canadian-stores-within-2-months-1.2902094

#207 Derek R on 01.15.15 at 2:56 pm

#204 fancy_pants on 01.15.15 at 2:38 pm wrote:
Interesting take on that. The problem is they direct ‘our winnings’ to buy votes from select privy organizations and inner circle friends that in turn elect them in power again. Or it could be I simply missed the bliss of winnings from cancelled gas plants and other great gov’t investments.

You put your finger on the real problem there.

#208 Canadian housing bubble to CRASH on 01.15.15 at 2:58 pm

The big boys in the US who shorted the canadian housing bubble is now crashing the bubble. Just today sony and target said bye bye Canada enjoy your overpriced RE. Jobs jobs and more jobs will be lost. People will go bankrupt and lose it all.

#209 Holy Crap wheres The Tylenol on 01.15.15 at 3:04 pm

Now again, tell my why our federal budget will be delayed?

http://www.ctvnews.ca/politics/federal-budget-to-be-
delayed-until-april-oliver-1.2190676

#210 Mike T. on 01.15.15 at 3:04 pm

‘Target cutting 17,000
Bombardier cutting 1,000

It’s coming’

So sorry friend, it’s here.

Also add SONY it seems.

What has two thumbs and can’t wait for today’s post?

#211 Oil Is Sticky on 01.15.15 at 3:14 pm

190 Not Group Think on 01.15.15 at 1:44 pm
Target pulling out will increase consumer prices.

The Game changer is Swiss rates are now -0.75%. US will stay where they are. Canada may reduce to 0.50%.

Spring detached market will be in a tear in Vancouver and Toronto. I predict 2.29% 5 year mortgages.

——–

Bail ins?

#212 BigM on 01.15.15 at 3:18 pm

Lastly. I’ve got $5k for anyone who can tell me the difference between “rate of speed” and “speed”.

Speed is the distance a thing moves over a set amount of time.

Rate of speed tell you if the thing is going faster or slower.

#213 Oil Is Sticky on 01.15.15 at 3:20 pm

#116 Jester on 01.15.15 at 12:19 am
#249 Mark on 01.14.15 at 2:49 pm said:
“Not seeing higher food prices, clothes are cheaper than ever, as are cars. Imported stuff is getting cheaper or remaining stable, despite the weaker CAD$, because there is very little demand either in Canada, or around the world.”

———-

Would this be on Smoking Man’s planet? Because down here on planet Earth, specifically in a country in the northernmost reaches of North America, prices of food, clothing, etc. have been going up and accelerating in at least the last six months.

——-

It’s possible Mark is talking about the tissue paper clothing from Walmart and H&M. Not real clothing that should last 3-5 years not 3-5 months.

I have personally starting shopping at Value Village. Why? Easy…..they sell vintage jeans and other clothes that are near brand new that are thick and meaty. Not this tissue paper junk you find in stores now. Bought the wife a new Levi’s made in USA short jean jacket, myself some made in USA jeans and a nice dress shirt from London. All under 50 bucks.

#214 Moller on 01.15.15 at 3:26 pm

Major department stores are closing in Canada: Jacob, Mexx, Target, Sony, etc… What’s going on these days?

#215 Victor V on 01.15.15 at 3:29 pm

Since the folks at Sony won’t disclose why they are closing shop in Canada nor will they speak to the number of employees being laid off; let’s take a peek here:

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

With headquarters in Toronto, sales offices in Vancouver and Montreal and a National distribution centre in Whitby, Ontario, approximately 500 employees support a network of more than 500 authorized dealers and 14 Sony Store retail locations across Canada.

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

Sony = 500
Target = 17,600
Suncor = 1,000

And more to come…

#216 devore on 01.15.15 at 3:31 pm

#184 CalgaryRocks

When governments do what you suggest, ie spend within their means, pay off debt, cut government and save for a rainy day they are despised, vilified and sometimes run out of town by a majority of the population, including all public unions.

This is why Keynesianism will never work in our political system. No government or politician will stand up and propose to cut spending and programs during boom times as part of counter-cyclical economic policy. Modern government policy is pro-cyclical: lavish spending during booms, cutbacks during recessions.

#217 Victor V on 01.15.15 at 3:32 pm

Mexx Canada to liquidate stores before closing by end of February

http://www.cbc.ca/news/business/mexx-canada-to-liquidate-stores-before-closing-by-end-of-february-1.2900539

Insolvent fashion retailer Mexx is liquidating its 95 stores in Canada by the end of February.

By the end of this week week, 25 locations and 250 jobs will be gone.

In addition to 1,700 employees at its retail operations, the company has 85 at its head office and distribution centre, which will close in March.

#218 Daisy Mae on 01.15.15 at 3:42 pm

#190 Not Group Think: “Target pulling out will increase consumer prices.”

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

Go ahead. Canadians will simply curtail their spending even more so. Alot of us may be stupid when it comes to financial matters, but we ultimately decide what we will pay.

#219 Victor V on 01.15.15 at 3:45 pm

Avon cuts hundreds of jobs on Montreal’s West Island

http://www.cbc.ca/news/canada/montreal/avon-cuts-hundreds-of-jobs-on-montreal-s-west-island-1.2899875

Avon Canada is cutting hundreds of jobs at its distribution centre in Pointe-Claire.

The cosmetics company would not say exactly how many jobs will be eliminated but in a statement Avon Canada said it will slash the majority of jobs at its distribution centre, located next to the company’s Canadian head office.

The statement says Avon is outsourcing the jobs to Genco, a supply chain management company based in Chicago.

#220 Mike S on 01.15.15 at 3:47 pm

Like the way the Economic Action Plan starts to unravel, and just in time for the federal elections …

Garth,
You think H will starts his own blog once he gets the boot?

#221 bdy sktrn on 01.15.15 at 3:52 pm

#121 Washed Up Lawyer on 01.15.15 at 1:07 am
The spike in Blackberry today should lead to prosecutions and a cease trade order if there is any integrity in the market. Where was the continuous disclosure?
——————
Reuters did it.

The companies did nothing.
It probably happened, but Chen/Watsa said no deal, the leak to reuters was not the intentional doing of either co.

#222 Rational Optimist on 01.15.15 at 3:52 pm

I have a question which I could not answer. Let’s say this was ten years ago, and PetroCan was still a state trading enterprise. Could the PM duck away from the golf tee (or whatever) for a minute to call up the President of PetroCan and tell him to stop the flow immediately because the government of Canada was pissed off at so-and-so in some other country? What would happen if he had tried?

Or with any other crown corp. Let’s say our current PM gets sufficiently annoyed about the Russians and decides one morning to call the President of the Wheat Board and instruct him to stop loading wheat bound for Russia. Is that possible?

If so, why? If not, what is wrong with a country where that might be possible?

#223 Mark on 01.15.15 at 4:16 pm

http://finance.yahoo.com/echarts?s=CHFUSD%3DX+Interactive#

Swiss interest rates are negative. And look what’s happened now! The Swiss (CHF) shorts were taken out back and shot. So much for the ‘theory’ that low rates cause currencies to weaken, lol.

Similar thing in the works for Canada? How long will the market maintain an artificially low Canadian dollar to the benefit of Canadian exporters? Especially when everyone else around the world is trying to devalue, with far stronger fundamentals in their favour (ie: chronic trade deficits, etc.)?

#224 Clotides on 01.15.15 at 4:20 pm

http://www.cbc.ca/news/business/sony-canada-to-close-all-canadian-stores-within-2-months-1.2902094

#225 Dual Citizen In Canada on 01.15.15 at 4:30 pm

#207 bdy sktrn on 01.15.15 at 2:50 pm
Lastly. I’ve got $5k for anyone who can tell me the difference between “rate of speed” and “speed”.

Some might call it acceleration but I’m going for the word, “and”.

#226 maxx on 01.15.15 at 4:32 pm

See what happens when you bet the farm on the oil sands roulette wheel?

Yeehaaaaw!

#227 Franco on 01.15.15 at 4:39 pm

Canada slowly sinking and so are my investments. How do you buy a cheap house when you’re investments are also sliding?

#228 T.J.BONES on 01.15.15 at 4:40 pm

Sir Garth:
Things aren’t lining up!! Joe Owe and Sharper are not going to balance the budget? Because there is no budget to balance!! See CBC today! Bring on the election! But for you, Sir Garth, Sharper just pulled anougher rabbit out of the hat!! More screwed up politics and the financials, lower intrest rates here we come>

#229 For those about to flop... on 01.15.15 at 4:44 pm

I had a bad feeling about Target from the start.
My wife who seems to fancy herself as a semi professional shopper was all hyped up to go to
Target about 2 months after they opened to give them time to get their house in order ,when she came home I asked her “how was it?”,her response was as a lot of people have said”not good …no stock and not enough staff to help out”.
Why did Target come here only to do it half assed?
Why didn’t they take over from Zellers at Oakridge Mall ?
Someone should be fired for sure.

#230 Mike on 01.15.15 at 4:56 pm

#60 TurnerNation on 01.14.15 at 9:45 pm
Mike, son, are you arguing against me or oil price? Won’t be long.

Just wondering how it feels to getting back to loosing 5% a day on your oil Mr BigShot after backing up the truck on your oil purchases yesterday … I hope you didn’t sell your Swiss Francs to purchase oil …

#231 T.J.BONES on 01.15.15 at 5:05 pm

Sir Garth:
No Disrespect to you! But all the reason and logic you have bestowed upon us is useless when it comes to this government!! Sharper will do anything for power, even if it destroys the country.

#232 The American on 01.15.15 at 5:09 pm

Mark, you need to go to a *real* school and become educated. Clearly, you’re failing on nearly every offbeat claim you make. The blog dogs see it too. Sadly, econ 101 for you must be learning how to roll your pennies and use them as weights in your pocket to keep you from floating into outer space.

Just wondering… Is “Mark” perhaps the now infamous Mark C. and former Governor of BOC? Seems like he sure does see a lot of the things the exact same way. So much so that his tremendous ego is now forcing him to blog away to defend horrific mistakes in his recent past concerning monetary policy in Canada that are going to greatly adversely impact its citiznes? Oh well, just a thought…

#233 Leftymarc on 01.15.15 at 5:35 pm

Also it’s median , not meridian, for the center of the road.
#207 bdy sktrn on 01.15.15 at 2:50 pm

It is centre, not center.

#234 Mister Obvious on 01.15.15 at 5:37 pm

#207 bdy sktrn

“I’ve got $5k for anyone who can tell me the difference between “rate of speed” and “speed”.”
—————————

I’ll tell you for free.

First, some background on ‘speed’. It’s a ‘scalar’ quantity. That means it has no directional component specified.

When you add a directional component to speed it becomes a ‘vector quantity’ called ‘velocity’. Thus, if you are traveling at 30 miles per hour, your speed is just that, but… if you are traveling at 30 mph due east, your velocity is then fully specified.

But let’s forget about the directional component for now. ‘Speed’ is a rate given in distance over time. In other words, it defines how physical displacement changes over time.

But the ‘rate of speed’ specifies how speed itself changes over time. That is: ‘distance over time over time’.

Thus, you could call ‘acceleration’ although acceleration usually involves the directional component we decided to ignore above.

In the case of speed we can just assume the direction remains constant because speed is just a special case of velocity. Thus ‘rate of speed’ is, for most intents and purposes, ‘acceleration’.

Make sense?

#235 Kris on 01.15.15 at 5:39 pm

17,000 people just lost their jobs at Target.
15 Sony stores are closing as well across the country.
Yup, sure sounds like a good time to buy a house…LOL

#236 Waterloo Resident on 01.15.15 at 6:01 pm

#207:

Sorry but I cannot give you a description to what the “rate of speed” is because that phase is technically incorrect. (according to this source: http://physicsandphysicists.blogspot.ca/2008/02/rate-of-speed.html )

Quote: ((( “Have you ever heard of people using the phrase “rate of speed” before? I have, mainly on TV during one of our local news. Usually it is during a description of some vehicular traffic incident, and some vehicle was described as moving at a “high rate of speed”. What they really want to say is simply that the vehicle was moving very fast, but somehow, they think saying “high rate of speed” sounds “sexier”.

This, of course, is rather inaccurate. Typically, when say say “rate of something”, we usually mean the time rate of change. In calculus, it is d/dt of something, i.e. the time derivative. So when one say “rate of speed”, one is actually saying ds/dt, where s is speed. This is ACCELERATION!

Now there’s nothing wrong with this if the newscasters actually did intended to say acceleration (which begs the question on why they don’t just say “acceleration”?). But more likely, they wanted to say “speed”. So really, transposing “speed” into “rate of speed” is not only non-economical in terms of words to say, it is also no longer correct. ” )))

BACK TO THE REAL NEWS: in 4 to 6 months Target stores in Canada will all be closed. So if you want to see what a Target store looks like, better go shopping now.

#237 Financial Freedom at 40 on 01.15.15 at 6:03 pm

97 Dwilly on 01.15.15 at 2:07 pm
—-
Horizon has a bunch, HMF Managed Futures for example , which I believe is short on practically everything now and long on corn, wheat and treasuries.
Watch liquidity though, some trading volumes are low. Mix up a little alternative with your typical

#238 Igor Babchuk on 01.15.15 at 6:06 pm

Everyone’s worried about ISIL, Al-Qaeda, Boko Haram and Kim Jong Un. And yet, it’s the bloody Swiss that have screwed things up.

If I had a nickel for every time the Swiss did something reprehensible…

#239 Tony on 01.15.15 at 6:38 pm

#231 Mike on 01.15.15 at 4:56 pm

I tried to tell him it was options expiration and since many or most were up a fortune many took profits yesterday from their short positions on oil. Fundamentally nothing has changed and weak data out of America today helped drag oil lower.

#240 OttawaMike on 01.15.15 at 6:39 pm

Target is closing!

Target leaving Canada!

Canada through with Target!

Target misses the bulls eye!

Hey everybody, did you hear the news ? Target is closing.

Closing Target is!

How many times does this need to be posted here?? Does nobody scroll the previous postings prior to submitting??

#241 TurnerNation on 01.15.15 at 6:39 pm

Mike I strongly suspect you’ve never seen a camel toe formation anywhere.

#242 cowtown cowboy on 01.15.15 at 6:45 pm

#189 Ex-Cowtown on 01.15.15 at 1:36 pm

#171 cowtown cowboy on 01.15.15 at 12:09 pm

#162 cowtown cowboy on 01.15.15 at 10:59 am

Maybe Pete should ride off into the sunset and let someone younger have a chance….35+years, in their 60’s and STILL working…typical boomer narcissist that can’t take a hint that it’s time to p*ss off.
++++++++++++++++++++++++++++++++++++

May you become in age that which you despised in youth.

Oh wait…. you’re already there.
++++++++++++++++++++++++++++++++++++

Glad to see that you’re ‘Ex-Cowtown’…

+++++++++++++++++++++++++++++++++++

When oil crashed in the 80’s I was a new grad and had nothing to my name but a pile of student loans. I didn’t bitch and whine about the old guys and hoped they’d “P*ss off”. I started my first company (from nothing), and struggled for several years. I finally cashed out at just under a million $ payday and then went on and then repeated as necessary.

When you’re done you’re whining maybe try to start something of your own instead of blaming others. You should try hanging with the grey-hairs and seeing what you can learn. Once I learned that lesson things started to click along nicely.

The reason I’m Ex-Cowtown is that I saw this train wreck comin’ long ago and got out of Dodge. How did I know a train wreck was a comin’? Years ago an old guy told me what to look for. I’m now starting a software company and contemplating moving back to Cowtown once the smoke from the ruins has abated.

I guess then I’ll be Ex-Ex-Cowtown.
+++++++++++++++++++++++++++++++++++++

I’m hardly (at it’s spelled whinging), just wish these old farts would move on and let the younger generation have their chance. For the record I’m in my mid-40’s and run my consulting business, mostly to the big Oil downtown…when I graduated from my undergrad in ’91 my options were selling photocopiers or working for a broker for about $18k/year. My generation has constantly gotten the short end of the demographic stick. I have worn many hats in my working days and have never stopped educating myself…as for what the grey hairs can teach me, I’d it’s mostly how to squander one of the greatest economic fortunes in history..

#243 Oil Is Sticky on 01.15.15 at 6:46 pm

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

Sony = 500
Target = 17,600
Suncor = 1,000

And more to come…

——–

I wonder how many govt jobs were lost today.

#244 CalgaryRocks on 01.15.15 at 6:53 pm

#228 Franco on 01.15.15 at 4:39 pm
Canada slowly sinking and so are my investments. How do you buy a cheap house when you’re investments are also sliding?

And thus the conundrum of having your house money in the stock market casino.

This doesn’t apply to the dog blogs because they are all stock market timing, experts, re-balancing wizards AND they all rent their abodes for, at least, 1K$/month under market value.

Further, their landlord is so happy having them around that besides the 12K/year in subsidies, he will gladly do a 100K landscaping job so they can better enjoy the property.

You must be new here! ;)

#245 6,000 years and counting... on 01.15.15 at 7:03 pm

Where is the stock market brigade – Nomad, JimH, Leo Tolstoy and all the others – urgent need of new stocks/ETFs leads for newbies.

For The American – other signs of that USA recovery:
http://www.boxofficemojo.com/yearly/?view2=domestic&view=releasedate&p=.htm

Lottery sales going down too (people have so much money from all that new jobs that they do not need to play the lotteries – they all won the “cash for life”

Europe bonds markets at a glance:
http://www.investing.com/rates-bonds/european-government-bonds?maturity_from=10&maturity_to=310

US 10-years:
http://www.investing.com/rates-bonds/u.s.-10-year-bond-yield

#246 Je Suis Charlie on 01.15.15 at 7:19 pm

http://www.edmontonjournal.com/business/Canadian+Press+NewsAlert+Federal+budget+delayed+until+April/10732144/story.html#__federated=1

Federal budget delayed until April – is there anything other behind this than the dumb hope oil prices will go up again? What a sad economic leadership we have…

#247 Arfmooocat on 01.15.15 at 7:19 pm

Was having a conversation with my Dad today. I mentioned that times were getting tough here out West. He nodded and said, “I understand. When I was young our furniture was repossessed, electricity turned off, rent overdue, all of us hungry and cold. Then came the Depression.”

#248 waiting on the westcoast on 01.15.15 at 7:27 pm

#224 Mark on 01.15.15 at 4:16 pm

“Swiss interest rates are negative. And look what’s happened now! The Swiss (CHF) shorts were taken out back and shot. So much for the ‘theory’ that low rates cause currencies to weaken, lol.”

Mark – I don’t think you get it. The Swiss have been holding their currency artificially low for months and have now stopped holding it back. They were using negative rates to help them lower the value. It is not “rising” as much as the Euro is devaluing against it and they were trying to stem the flow. The Euro is devaluing because their economy is tanking.

Returning to North America where Canada has peaked and is on the road to recession and the US has dealt with a lot of its challenges and is climbing out. The Canadian dollar has been artificially high due to China/EM buying up our commodities right during the time we should have experienced the US recession. The only thing that will help us short-term is the US engine. Hopefully, the Americans can carry the whole world – at least for a while…

#249 waiting on the westcoast on 01.15.15 at 7:30 pm

#224 Mark on 01.15.15 at 4:16 pm

In addition, as the US picks up steam and it begins to consider increasing its rates – the spread will cause more investors to buy US$ and not buy as many CDN$… result is lower CDN.

#250 Dean on 01.15.15 at 7:35 pm

We spent all of our money on house, no money left for Target

#251 Mike on 01.15.15 at 7:42 pm

#242 TurnerNation on 01.15.15 at 6:39 pm
Mike I strongly suspect you’ve never seen a camel toe formation anywhere.

Watch out for that camel toe, the big foot is going to crush you soon!

#252 Mike Lee on 01.15.15 at 7:47 pm

Rising rates . . . not going to happen . . . the Fed keeps talking (just rhetoric) about hiking interest rates only to maintain the strength of the U.S. dollar to prevent capital flight from the U.S.

#253 Exurban on 01.15.15 at 7:52 pm

#114 crossbordershopper

Here in Vancouver the spread between regular grade gasoline and diesel is over thirty cents. Since regular gas is selling for right around $1 a litre, the difference is therefore a full 30%. I don’t believe I have ever seen that before.

#254 Republic_of_Western_Canada on 01.15.15 at 8:04 pm

Yesss!

Now we are definitely talking new turbocharger for the V8.
http://www.edmontongasprices.com/

#255 Republic_of_Western_Canada on 01.15.15 at 8:47 pm

#228 Franco on 01.15.15 at 4:39 pm

Canada slowly sinking and so are my investments. How do you buy a cheap house when you’re investments are also sliding?

Re-balance the portfolio. Go long puts, short calls, buy short-term junk bonds.

BTW, what is this ‘cheap house’ you speak of?

#256 jess on 01.15.15 at 9:18 pm

Saudi Arabia, Tajikistan To Join Beijing-Backed Development Bank
Gulf Business News‎ – 2 days ago
Saudi Arabia and Tajikistan will join 24 other nations as founding members of the Asian Infrastructure Investment Bank, China’s Ministry of Finance said on Tuesday

http://www.nytimes.com/2014/10/10/world/asia/chinas-plan-for-regional-development-bank-runs-into-us-opposition.html?_r=0
============

https://www.khanacademy.org/economics-finance-domain/macroeconomics/inflation-topic/deflation-infla

http://www.pwc.com/en_US/us/financial-services/regulatory-services/publications/assets/2014-volcker-rule-covered-funds.pdf

#257 viook on 01.16.15 at 12:50 am

prairie person post #129. Have to agree. Seen too many stores close in the last year. Prices are not dropping – just stores going out of business.