Panic

AUDI POTTY modified

Let’s put a fork in this week. And our national creds at the same time.

These are strange days here in Mapleville. First the feds trot out a $27 billion spending orgy to begin in six months, giving people extra cash to have kids and income-split. Then oil drops. So the finance minister cancels the budget. That was unprecedented. Then the central bank warns house prices are inflated by up to 30%. The second-in-command pledges no big moves in policy. Oil drops more. So the bank shocks everyone by cutting its rate for the first time in six years. The dollar plunges. People think money’s free and start shopping for real estate again. The prime minister says we’re cool.

Now we have (a) no budget, (b) a crushed dollar, (c) a wounded economy, (d) more house lust and (e) a government without a plan.

As economist Louis-Philippe Rochon wrote a day ago: “The (rate) move was a remarkable admission by the Bank of Canada that the Canadian economy was in far worse condition than previously believed. So much so, that they had to defy the expectations of virtually all economists, lowering rates now without any warnings.”

As you know, this pathetic blog has been urging you for a long time to have fewer of your nuts in Canada and more in the US and elsewhere. Growth here has ground almost to a halt. The oil thing is major serious. Job creation’s been horrible. The layoffs have started again. Your neighbours are pickled in debt. The whole world is slowing down. And now word of a 0.25% drop in rates that won’t actually help anyone has ignited new real estate horniness.

You think this ends well?

I don’t. Nor does Prairie Person, who left this comment last night:

“When a govt. panics, and what else can you call it when the federal budget is delayed, then there is a shocking cut in interest rates, except panic? If I were on a ship and it was having trouble staying afloat and the captain panicked, I’d be filled with fear. If the PM and his ministers are no longer in control and the best they can come up with is to lower interest rates, are we not going onto the rocks? Can you not hear the surf? This isn’t just about overleveraged homeowners. This is about the system no longer working. Does the Costa Concordia come to mind? The question is how can the blog dogs best prepare themselves to ride out whatever is going to happen? Garth, I think some serious advice and guidance is needed. Even you were taken by surprise by the rate cut. When you are surprised, I think we are in trouble.”

What can you do to mitigate the mess rising around you? I have six suggestions.

1. As deflation becomes more of a reality (and it is, or central bankers everywhere would not be doing rash things), understand this will punish real assets and reward financial ones. It’s a strong argument to have a balanced and diversified portfolio of the kind I’ve often described. What happened when the Bank of Canada shocked people? Stocks and bonds went up. It was an admission money is getting more valuable, and real stuff (like commodities) isn’t. So get with the program.

2. Expect surprises. More are coming. So never exit an asset class. A few months ago people were trashing bonds, but 2014 turned out to be a big win for people holding fixed income. After the rate cut, REITs took off, because their fat yields and stability suddenly looked irresistible. The point of having a well-built portfolio is to hold all assets in reasonable weightings because none of us can predict what’ll happen next.

3. Don’t try to time the markets. All through 2014 this blog was brimming with experts saying US equity markets were peaking. They weren’t. You are better to get invested for the long term and stop being paralyzed into non-action by the latest headline. Despite all of the crap past year – Ebola, terrorism, extreme weather, oil shock, ISIS, Ukraine, Hamas, deflation – a 60/40 balanced portfolio delivered about 9%.

4. Kill off your debt, however possible. The worst position to be in when deflation drops prices, incomes, profits, jobs and growth, is to owe money. Ask oil patch workers with McMansions in Calgary now losing six-figure salaries. No wonder listings are up 75%. They left selling too late. Don’t make the same mistake.

5. Don’t be a patriotic investor. You’ll regret being overweight in Canada. And yet, incredibly, 70% of all of us with investments have only Canadian ones. Now that oil has helped whack the economy, it should be obvious that at least two-thirds of your growth assets are better placed in US and international assets. This is part of being diversified, since Canada accounts for just 4% of capital markets and is likely to seriously underperform the US. Investing this way does not mean you have to convert your dollarettes, as there are C$-based securities available.

6. Above all, stay away from realtors. The lightly-educated and over-sexed masses may think this week’s rate cut means mortgages will never go up and housing can never drop, but you know better. A deflationary push – the very reason the central bankers panicked – is a death knell for real assets financed with mountains of debt. You can avoid that.

Or, you can believe the government.

313 comments ↓

#1 Vivek on 01.23.15 at 6:26 pm

Wow that was early…. First?

#2 CPG on 01.23.15 at 6:30 pm

John Ivison: $26B shock — Canada’s largest ever defence procurement handed off in sole-source contract

http://news.nationalpost.com/2015/01/21/john-ivison-26b-shock-canadas-largest-ever-defence-procurement-handed-off-in-sole-source-contract/

Ottawa failing to include First Nations in key employment data

http://www.theglobeandmail.com/news/politics/unemployment-stats-missing-in-areas-where-job-training-is-a-priority/article22598523/

#3 Nomad on 01.23.15 at 6:35 pm

“BMO’s Porter Says Rate Cut May Create Grotesque Canada Debt Skew”

http://www.bloomberg.com/news/2015-01-23/bmo-s-porter-says-rate-cut-may-create-grotesque-canada-debt-skew.html

“Porter predicts Poloz will cut borrowing costs again at the next meeting in March”

Ugh.

#4 Mark on 01.23.15 at 6:37 pm

“A bit premature, no?

“…If banks don’t come to the conclusion that they need to cut their lending rates, observers say the Bank of Canada may act again and slash overnight interest rates further.
“I think what you might see, if the banks don’t pass on this cut, is the Bank of Canada will just lower rates again in the spring to force them to do it,” said one banking source…”

Pretty hilarious, but the banks/lenders have Canadian retail/consumer borrowers over a barrel, and they know it. Its fairly obvious that we’ve reached an apex of credit. House prices are falling, which means that bank margins are going to have to be derived through margin expansion, not volume expansion to meet the bottom-line growth numbers. What’s the BoC or the GoC going to do about it? Pistol-whip the banks into making loans to uncreditworthy homeowners who are seeing their home equity diminish by the day?

Just reading the articles over the past day or two on the Globe and Mail and elsewhere, I am astonished at the sense of entitlement the Realtors/Mortgage Brokers seem to have to ever-increasingly lower interest rates and credit expansion. As though it is inconceivable that the orgy of abnormally cheap credit wouldn’t continue forever. These groups have quite the attitude adjustment ahead of them in the future, let’s just say that much.

#5 William of the North on 01.23.15 at 6:39 pm

Owning gold pays no interest or dividends……however, I would rather own gold than loonies.

#6 For those about to flop... on 01.23.15 at 6:40 pm

Garth ,if Canada is 4% of capital markets what is the U.S number?

#7 Mark on 01.23.15 at 6:42 pm

““BMO’s Porter Says Rate Cut May Create Grotesque Canada Debt Skew””

Doubtful. Credit-worthiness is the issue now, and banks aren’t keen to increase lending to the most over-indebted participants in the economy, residential RE borrowers.

When subprime credit expansion was severely limited in Canada on account of the CMHC rule changes, Canadian RE appreciation was pretty much stopped dead in its tracks. A measly 25bp-50bp is not going to revive the already declining market if nobody has confidence to make more loans.

Porter probably has it right, the BoC will probably cut again because the current cuts are unlikely to do anything to help against a backdrop of extremely poor credit-worthiness. We’ll probably be in a sort of Canadian QE sooner or later when they end up cutting to 0% and traditional policy tools fail.

#8 Canadian in Portland on 01.23.15 at 6:43 pm

Hey Poloz, thanks for tanking the dollar and giving my salary a raise while I work and have investments in america. Too bad you had to punish the savers in Canada to give it to me, but thanks anyway!

#9 Ontario's Left Coast on 01.23.15 at 6:46 pm

Wow, well put Garth. Sane and sage advice at a time of extreme uncertainty. All dogs would do well to retain and share with any who will listen. I know I will. Cheers to all and enjoy the weekend.

#10 happity on 01.23.15 at 6:47 pm

The financial system is so full of toxic debt that QE is continuing on a global basis.

No one wants that toxic debt, traditionally used for the global economy to function, so guess what the economy is not functioning as well.

The system will get worse and is doing so.

Why put all your stuff in a system that is now fracturing from toxicity?

Those folks are the new greater fools.

#11 zedgt87 on 01.23.15 at 6:48 pm

How can you state that the USA markets have not topped? Each high point of the last 3 has been lower then the previous one. Most indices are red YTD indicating that yes in fact the markets did top in 2014. It looks like a top to me, the next retraction will confirm it if it falls below the previous.

I guess we will see if the ECB’s QE saves stocks from their inevitable correction, but there is great risk in USA stocks right now.

#12 SashToronto on 01.23.15 at 6:48 pm

Damn, was hoping you were going to be right so I can score a property for cheap this spring. Sometimes you are forced to buy to get your kids into the right school in Toronto (address). But this interest rate drop couldn’t have come at a better time for realtors who are going to push this spring market to the top. I will still pay 350-400k for a 2 bed in North York this spring which I think is a steal for a big city on yonge st along the subway line and best schools in the area.

Agree with you comments and advice to prepare. (I don’t think the correction is coming as it was supposed to happen from 2012-2014) Up up she goes in GTA at least. :/

#13 zee on 01.23.15 at 6:48 pm

hi

can you help us understand, how deflation will happen if our imports are costing more with the lower dollar. we import everything here.

#14 Matto on 01.23.15 at 6:58 pm

The official CPI for canada was 1.95%. The stated goal of the central bank was 2%. Now all you hear is how terrible deflation is and price spiraling downward. As of now there is no deflation, in fact price are going up at 1.95% per year according to the Official CPI.

Even if we had deflation, People would not delay buying iphone and other crap if they think it will be 1% cheaper next year.

Government want inflation because they want to inflate their debt away (and your saving). They will make you think deflation is bad when it is not… Price goes down demand goes up, economics 101.

And for big asset like a house, the problem was the run up in price, not them coming back down to heart. It’s too late

#15 West Coast on 01.23.15 at 7:00 pm

Thank you Garth – no one expects you or anyone else to have all the answers. This blog’s number one merit is that it makes us all think a little harder about what we are doing with our money.
Certainly your #4 above is a big one – ‘Kill off your debt, however possible’. I have done this – and boy does it feel good.
#2 The point of having a well-built portfolio is to hold all assets in reasonable weightings because none of us can predict what’ll happen next. So true and if we think we are ‘different’ think again….
#5 … ‘growth assets are better placed in US and international assets… keeping in mind not having to convert ‘dollarettes’, as there are C$-based securities available’….Yes, we live in a big country which has a small percentage of capital markets – so what does that tell us?
Thanks again Garth …2015 should be interesting.

#16 crowdedelevatorfartz on 01.23.15 at 7:03 pm

Once again, excellent advice.
It will be interesting to see if Harper calls a Spring election before the manure hits the harvester……..

#17 bingo0000 on 01.23.15 at 7:03 pm

“Now we have … (e) a government without a plan.”

I think the only plan is to have the economy good enough to win the election. They aren’t going to let houses and economy slide and risk loosing the election.

#18 Canadian in Portland on 01.23.15 at 7:04 pm

Mark, there are plenty of sub-prime mortgages out there in Canada. In America, you could blame the banks solely for lending to unqualified people. In Canada, you can blame the institutes and developers that loaned out the 0 down payment to otherwise unqualified people.

Regardless, what matters is how much room they have to add to payments if rates increase, or other financial shocks occur. The answer: none. I do not know a single person across the country who would be able to stand an increase to their expenses. Mark, mark my words there is no money left in Canadian pockets, and debt is also running dry.

You are correct, creditworthy-ness is the issue now, and I wouldn’t lend anything in Canada without a substantial risk premium now

#19 Nick on 01.23.15 at 7:05 pm

The TSX and DJI indices move up and down in tandem, i.e. when the DJI is going up, so is the TSX and conversely when the DJI drops so does the TSX. Look at a 5 year chart–the DJI has advanced much more than the TSX but they don’t move in opposite directions. It is an exaggeration to say investors will “regret” being heavily in the Candian market. You might make more in the U.S. market but it’s a bit late now to rotate out of Canada into the U.S. with the exchange rate at 81 cents. Also, you have to consider the loss of favorable tax treatment of dividends from Canadian companies if you replace them with US dividends.

#20 Jim on 01.23.15 at 7:11 pm

The ECB is starting QE. The Swiss de-pegged their currency from the Euro, Denmark cut interest rates and Canada cut interest rates. The loonie plunged after the cut devaluing against other currencies especially the US dollar. Is it really about the price of oil or are we in a currency war to be more competitive?

#21 Cato the Elder on 01.23.15 at 7:15 pm

Garth, our dear leaders have decided to hide the very systemic problems affecting our economy (too big government, too many regulations, too many taxes, too much welfare) under the VERY FREQUENTLY used trickery of inflating the currency.

It makes everything more expensive, thus leading the illusion that things are ‘appreciating’ in value. Value is not increasing, it is the money DECREASING in purchasing power.

This is a crime of the highest order. All involved should be at bare minimum put in prison for life. I would prefer re-instating the death penalty for the theft of 30 million+ Canadians purchasing power, but that’s just me.

#22 Blobby on 01.23.15 at 7:19 pm

“Owning gold pays no interest or dividends……however, I would rather own gold than loonies.”

???

Gold has dropped more than half.. and is still dropping.

If the Loonie did that, we really will be in deep ****

#23 Karl hungus on 01.23.15 at 7:23 pm

Except owning us stuff just got much more expensive. Staying in Canada means you don’t have to play the currency war game

#24 A Yank in BC on 01.23.15 at 7:25 pm

#6 For those about to flop…
“Garth ,if Canada is 4% of capital markets what is the U.S number?”

If memory serves.. the U.S. equity markets represent almost half.

#25 Slow Canada on 01.23.15 at 7:29 pm

“The lightly-educated and over-sexed masses …”

Garth, you are a treasure. Thanks, as always.

#26 Mark on 01.23.15 at 7:29 pm

“The official CPI for canada was 1.95%. The stated goal of the central bank was 2%. Now all you hear is how terrible deflation is and price spiraling downward. As of now there is no deflation, in fact price are going up at 1.95% per year according to the Official CPI”

At some level, the BoC has to be forward looking. The CPI you’re referencing was likely calculated of measurements taken a few months ago, before oil prices fell off a cliff. And we still have a populace that widely believes, however delusional, that house prices have not declined. Some Realtors are still trying to convince the public that prices have gone up. So you could say that the Canadian public, over the past year or two, have been extremely overly confident.

As reality sets in, consumers are likely to cut back their spending dramatically (we already see this in highly discretionary areas like air travel, where prices are falling like rocks). They’re likely to hunker down, take Garth’s advice on point #4 (pay off debt), which will cause the CAD$ to appreciate significantly as spending on imports collapses and exports surge. Perhaps the CAD$ goes even much higher than par, further reinforcing falling prices. Unless the BoC gets far enough out infront of such ahead of time, it can be a very vicious cycle to break once deflation sets in.

#27 Dd on 01.23.15 at 7:30 pm

Watch for delay in interest rate rise from US. Hell, China might devalue it’s currency by 20% to compete with Japan. That will increase the U.S. dollar and massively deflationary for US.

#28 duffydawg on 01.23.15 at 7:31 pm

More adjustments, more stress ahead, common sense has been badly neglected in the last few years . . . . as a result I think I’m going to lose, lose my worried mind. This has got to be in the top 11 best songs of all time. Pour yourself a adult beverage and listen to this, it could just be the 2nd best 7 minutes you’re going to have tonight , Since I’ve been loving you.

#29 Ottawa on 01.23.15 at 7:32 pm

Maritime metaphors from the Prairies- this is getting weird

#30 Herf on 01.23.15 at 7:34 pm

#3, #7 Mark

It will be hypocritical if the BoC/Poloz coerces the banks to cut their rates, after F railed against them for offering new home buyers loans for down payments (or was it they cut their rates back then?), after he changed the mortgage lending rules back in ’12.

#31 Van Isle Renter on 01.23.15 at 7:37 pm

The only thing worse than a government with no plan is a government with a bad one. Harper may be confused, but at least he’s looking for a way out.

Trudeau and Mulcair are so ideologically petrified that they can’t see anything else other than solutions to a game that has already ended and left them both behind.

I’m now waiting for Elizabeth May’s pronouncement that “None of this would have happened if we were powered by green energy”. I guess in Greenie -nomics a 100% cut in export revenue is better than a mere 50%.

#32 Murad on 01.23.15 at 7:38 pm

“They will make you think deflation is bad when it is not”

The stupidity is amazing.

#33 Dual Citizen in Canada on 01.23.15 at 7:41 pm

It’s disheartening that the most sound advice you can get is to, “Don’t be a patriotic investor”. I grew up in this country and is saddened that we will suffer more because the trust is not there for us to save our own economy. With all our natural resources, and brain power, Canada should be self a self sufficient and powerful nation. What a shame…

#34 MSM-free zone on 01.23.15 at 7:41 pm

“…..That was unprecedented……..”

Harper might as well change his party’s name to the Unprecedented Party of Canada:

1. Contempt of Parliament (first PM in history),
2. prorogued Parliament for self-gain (x2),
3. liked about taxing income trusts,
4. lied about fixed election dates,
5. balls busted by the Supreme Court (multiple times),
6. criticized stacking the Senate, then stacked his own Senate,
7. criticized opposition omnibus bills, then loaded up his own omnibus bills, coining the new word “Harpocrisy”,
8. coined 200-page parliamentary committee disruption manual,
9. ‘In-and-Out scheme’ party riding funding scam,
10. PC logo (in-)Action Plan cheques scam,
11. total contempt for democracy,
12. (un-)Fair Election Act legalizes vote rigging and voter suppression,
13. RoboCall voter suppression,
14. muzzled Chief Electoral Officer investigations,
15. muzzled Canadian scientists,
16. muzzled the media,
17. policy announcements made overseas, too cowardly to make them here at home,
18. ‘Plagiarizing-the-Media’ bill passed to fund opposition attack ads,
19. tax audits of opposition think tanks,
20. $90,000 Mike Duffy scam,
21. $1.2 million Israel trip taxpayer scam,
22. $50 million John Baird/Tony Clement gazebo scam,
23. $100 million (in-)Action Plan advertizing scam,
24. $1.2 billion G20 scam,
25. $126 billion F35 cost overrun scam,
26. one-sided, war-mongering mouthpiece drawing Canadians into world conflict,
27. overseas photo ops with active service men and women, then
28. subsequently threw returning wounded Canadian Veterans under a bus,
29. abandoned women and a paraplegic in the face of danger for a run to a closet,
30. diverted unspent Veteran funding toward income-splitting tax cuts for the wealthy,
31. Free Trade agreements gutted Canadian manufacturing,
32. Temporary Foreign Worker Programs gutted Canadian working middle class,
33. record unaffordable Canadian home ownership,
34. one-trick resource economy,
35. no economic backup plan,
36. never held a real job in his life,
37. no courage, no compassion, no integrity, no transparency, no accountability, no democracy, no apologies, no conscience, no class.

#35 john on 01.23.15 at 7:41 pm

Many questionable Government of Canada policies can be traced to flaws in the Parliamentary democracy political system. A political party can form a majority government with only 38% of the popular vote and rule as a dictator. What would prevent the present government from doubling the immigration by granting status to anyone that will buy RE half for million, and keep the RE party going. Don’t be surprised if it happens, the building industry have been lobbying the government for moths. There a lat of unsold condos in TO. Bravo to Quebec for not letting the Feds ruin their habitat.

#36 Greg on 01.23.15 at 7:44 pm

#13 zee

We import everything, but we export even more. On balance we are ahead

#37 BoC rate cut a bad thing on 01.23.15 at 7:48 pm

Canada faces a world of hurt and the rate cut will mean nothing. Higher prices for everything due to weak Canadian dollar will leave people stretched. Add the fact people are losing their jobs left and right which will slow the economy even more. Canada RE is going down. No ifs ands or buts.

#38 Calgary Boomer on 01.23.15 at 7:48 pm

Thanks Garth. On investing in the US, even with Can $ based securities, wouldn’t we be buying with a weak dollar and get creamed when the dollar improves, even though that may be years down the road (which should be the case investing)? I mean, aren’t we too late? And the US market seems so toppy now like a correction is due, I feel like I missed the boat on two fronts and I’d be buying closer to the top than the bottom. And so (thinking longish term) wouldn’t it be better to buy some Canadian stocks on sale now? You even mentioned that a while back, that getting in now for the long haul wouldn’t be a bad idea “at these levels”

Thanks again.

#39 Steph on 01.23.15 at 7:51 pm

Looks like the feds are preparing us for something. My bet is on QE and an orgy of spending in infrastructures among others… They have a plan, no panic.

#40 Tremblant110 on 01.23.15 at 7:55 pm

It has been a good week thanks to your advice. Interest rates drop and ETF bonds rise, US dollar ETFs in RRSP are worth more Cnd dollars and some hi tech keep climbing. Keep up the advice on maintaining a diversified portfolio.

#41 Alberta Redneck on 01.23.15 at 7:55 pm

Q: if you already have a load of USD, what about converting them now? CAD is way below where it has been for years. Is that equivalent to buying low?

#42 Marco on 01.23.15 at 7:57 pm

Thanks muchly Garth,

#13 Zee,

That’s also a question I have in regards to deflation. If consumer confidence ebbs and prices come down on the big ticket items, like houses and cars, but we are still paying more for the essentials, like groceries, due to the lower dollar and imports, would this be considered a deflationary market as a whole? That’s the longest sentence I’ve ever written.
Cheers.

#43 Sue on 01.23.15 at 7:59 pm

#35 Greg: We import everything, but we export even more. On balance we are ahead

Is that why Canada is running a $40bn annual current account balance? Minus, that is.

Source: The Economist Jan 10th 2015.

#44 For those about to flop... on 01.23.15 at 8:00 pm

If this crap goes on much longer i am going to have to change my name from “For those about to flop…” to
“Those who would have flopped by now if it wasn’t for government interference …”
Thanks for nothin’

#45 Paralyzed into inaction in Cowtown on 01.23.15 at 8:07 pm

Well, time to plop some money into RRSPs and such … except I have just taken a 20% haircut compliments of powers that be. It is slightly less frightening to think this has to do with not poking the crazy housing bubble in the election year … than just plain old cluelessness. My liquid funds are getting ripped off either way.

Pretty clear US and intl equity ETFs is where growth segment might be – but what to about currency?
CAD denominated US equities – do they not get more expensive with CAD dropping just the same as buying US denominated US funds?

Guys at canadiancouchpotato say currency hedging isn’t worth the trouble…

Garth, Blog Dawgs any advice??

#46 Flatlander on 01.23.15 at 8:11 pm

So.. I don’t own any American equities.. Is it too late to get into the game?

#47 mitzerboy on 01.23.15 at 8:11 pm

thanks garth for the blog that has the most dog

#48 Blacksheep on 01.23.15 at 8:12 pm

Mark # 233,

“That quote is correct, from the BoE”
———————————————
Here is your big chance to show your banking brilliance and my blatant ignorance.

Please focus on ‘Commercial bank money creation’ only, if you can, cause it seems your easily distracted.

This is the opening statements from the Bank of England’s doc. Please read carfully.

• This article explains how the majority of money in the modern economy is CREATED by commercial banks making loans.

• Money CREATION in practice differs from some popular misconceptions — banks DO NOT act simply as intermediaries, lending out deposits that savers place with them, and NOR DO they ‘multiply up’ central bank money to CREATE new loans and deposits.

• The amount of money CREATED in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by SETTING INTEREST RATES. The central bank can also affect the amount of money directly through purchasing assets or ‘quantitative easing’.
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

#49 Mr. Reality on 01.23.15 at 8:19 pm

http://wolfstreet.com/2015/01/22/what-does-the-bank-of-canada-know-that-we-dont/

Interesting article stating 35% of all Alberta mortgages are non-recourse loans. If true that a wonderful little tidbit of information to ponder.

Interesting indeed

Mr. R.

#50 mark on 01.23.15 at 8:19 pm

How long does it take to get some truth back in the real estate speak? Half a decade of crappy returns seems to do the trick.

http://www.idiottax.net/2015/01/good-guys-in-real-estate.html

#51 Ray Vasquez on 01.23.15 at 8:20 pm

Insurance companies rely on interest investments so if we are in a deflationary spiral and Japanese style economic malaise, ultra low, falling bond yields and rates, auto insurance, home insurance, mortgage insurance, life insurance, business insurance and all types of other insurance will increase in 2015, 2016, 2017 etc.

You did not think that low interest rates were free? By the way, pension contribution amounts will be going up as well.

I hope you like paying thousands more over the next few years on all this stuff!

#52 crowdedelevatorfartz on 01.23.15 at 8:21 pm

@#34 MSM free zone

Ummmm, mind if I copy and paste that little list and forward it on…….. TOO LATE!

#53 nej jen on 01.23.15 at 8:23 pm

exactly what i’ve been seeking in the last few days – thank you! holding fast….

#54 Cow Man on 01.23.15 at 8:24 pm

#22 Bobby

You might want to check your data. Compare CEF in CDN dollars to the dollar against the US $.

#55 ronh on 01.23.15 at 8:25 pm

If everybody does number 4, who will buy?
Aren’t we a consumer economy?
Dive..Dive

#56 Blacksheep on 01.23.15 at 8:28 pm

Shawn A. # 272,

If money creation is “no secret” why would the bank managers response not simply be: “Yes..commercial bank money creation, what would you like to know, sir?”

What..it’s above their pay grade? They run the friggen bank, but they don’t know where the money for the loans comes from?

Yes…that sounds reasonable…

#57 Cow Man on 01.23.15 at 8:28 pm

#23 Sue:

Are you not referring to historical data? How much of those CDN exports were oil related? At the current price what is our surplus now?

#58 jess on 01.23.15 at 8:31 pm

over skilled ? thought we were unskilled. “Let them eat credit?” and then go take it from their low wages!

=============
The Long Life of Debt

The way lenders and collectors pursue consumer debt has undergone an aggressive transformation in America. Collectors today don’t give up easy, often pursuing debts for years. It’s now routine for companies to sue debtors, then seize their wages or the cash in their bank accounts. For many people, these changes have profoundly affected their lives.
13 Stories in the Series. Latest:
Senator to Hospitals: Stop Suing Poor Patients

by Paul Kiel, ProPublica, and Chris Arnold, NPR,
Yesterday, 5 a.m.

….”The governor (mark carney) said he was optimistic about the benefits of technological advances but added that there would be a period of adjustment while societies adjusted to the disruption caused. Technology’s ability to displace white collar jobs was part of the reason for the squeeze on wages, he added. “Many people are over-skilled for the jobs they are are doing, which keeps wages low.”

Carney said the importance of social capital had been underplayed during the period leading up to the financial crisis, when it was thought that markets provided the solution to every problem. Financial innovation, not all of it good, had allowed consumption to grow even while incomes were not rising. “One of my colleagues at the Bank dubs this the “let them eat credit” approach, Carney said

Davos: Mark Carney calls for tech sector to show ‘responsibility’ over tax
The Guardian‎ – 14 hours ago

#59 Captain Francesco Schettino on 01.23.15 at 8:31 pm

Il Duce Gartho,

I can barely express my disgust with “Prairie Person” insulting my glorious ship and heroic crew by comparing us to your pathetic national leaders!

Basta! Mi fa cagare!

When the Costa Concordia was in trouble, my crew and I ran to make sure the lifeboats were all in working order. I even climbed aboard one to test it for waterproofness personally.

What does your mascara and lipstick wearing national leader do when faced with a challenge? He hides in a closet, and drags that poor old man Joe and the rest of his femminuccia cabinet in with him.

Che schiffo!

Stephen Harper would not qualify to clean toilets on my ship, let alone stand on the bridge like a real man. (For a while)

Please remove that comment. It offends all such as myself who know what true heroism and honor are all about.

Grazie, Signor Turner.

#60 Mark on 01.23.15 at 8:37 pm

“Here is your big chance to show your banking brilliance and my blatant ignorance.”

Do you have a question for me beneath all of that stuff you’ve quoted? I think the article makes it clear — banks borrow to fund their operations and their lending, but they borrow at interest, and lend at interest. The profit of a bank is hence the difference between their cost of capital and their return on capital invested, net of expenses and defaults.

As for showing blatant ignorance, well, seems pretty pointless. We all make mistakes from time to time, and sometimes there’s more than one way to look at things and still arrive at a correct result.

#61 Mark on 01.23.15 at 8:43 pm

“Is that why Canada is running a $40bn annual current account balance? Minus, that is.”

You gotta be careful with terminology here. A current account deficit or surplus also includes investment inflows or outflows. Outflows of Canadian dollars overseas are perfectly acceptable, if not to be expected, as Canadians acquire foreign assets in excess of foreigners acquiring assets in Canada.

The more relevant metric to use for the long-term direction of a currency relative to the rest of the world (on a trade weighted basis) is the trade surplus/deficit. And such has been strongly positive, in Canada’s favour, for a significant period. Particularly with respect to our largest trading partner, the USA. Therefore, the implication is, the CAD$ should strengthen against the USD$ over time, but perhaps weaken against currencies to which Canada is a chronic net importer (ie: China).

In the long run, exports make a currency stronger. Imports weaken a currency. But in the short term, various market forces, including that of cyclicality, can create distortions to such. I would submit that we’re just at one of those short-term distortions with the weak CAD$/USD$ pair.

#62 ron on 01.23.15 at 8:45 pm

In that pic, is that a porto toilet on an Audi? It must be a Realtor on their way to a condo. Will place the Porto toilet into the bedroom and now the condo has 1.5 bathrooms. Can now ask for an extra 75k.

#63 Joe2.0 on 01.23.15 at 8:47 pm

Stay away from realtors they will be busy with the US,
Chinese, Indian, Persian and Euro buyers taking advantage of the 75 cent dollar.

You guys don’t get it.

Canadians ( not new canadians )are no longer the target market.
The hundreds of thousands of people who will gravitate to our barren lands are.
Future landlords, from distant populated lands with too many problems.

Reality Check there’s loads of people and money out there.

Realtor scare tactics 101. — Garth

#64 Tom on 01.23.15 at 8:48 pm

Poor Jim flaherty will be spinning in his grave once banks lower the 5 yr fixed below 3. Oh well, atleast he won’t have to clean up this mess.

#65 Balmuto on 01.23.15 at 8:49 pm

# 34. MSM-free zone

Wow, now that is hands-down the best and most succinct takedown of Harper I’ve ever read. That is what is known as a Philippic. Cicero, is that you?

#66 Retired Boomer - WI on 01.23.15 at 8:50 pm

Glad I didn’t make ANY moves off my balanced portfolio.

I have been watching Canada and Europe coping with the new realities of recent weeks. Deflation hurts those indebted ones more than anyone else. Depreciating money in the face of imports IS a “price increase” on that particular item.

Someone asked what % is the US of total world GDP?
A Wkipedia sample listing by %

1. EU 23.7%
2. USA 22.4
3. China 13.3
4. Japan 6.1
5. Germany 4.9
5. France 3.7
6. UK 3.7
7. Brazil 2.9
8. Italy 2.7
9. Russia 2.7
10. India 2.6

Don’t know what this tells any of us. Does it matter? What matters is what goes forth in our respective homes.

Debt Free, diversified, and convertibly liquid is the way MY house will be playing the unknown game being played just now!

#67 ANON on 01.23.15 at 8:51 pm

Panic indeed.
All the signs of danger are here, and the members of society more inclined to rise their heads, rotate their ears, sniff the wind, and act nervously, are already doing it, both online and IRL.
L.I.Q.U.I.D.I.T.Y. until you drip. That’s what the doctor ordered.

#68 palebird on 01.23.15 at 8:51 pm

#11
Look back at 1929, read a little history, the US market is going to climb as will the USD as they are going to be deemed “safe havens”. What is safe? Safer, so they think, in an increasingly unstable environment. Currency wars are already beginning. This will all become wilder as we tick along. History repeats itself repeatedly.

#69 DreamingInTechnicolour on 01.23.15 at 8:53 pm

“Running On Empty”

By Jackson Browne:

Looking out at the road rushing under my wheels
Looking back at the years gone by like so many summer fields

In sixty-five I was seventeen and running up one-o-one
I don’t know where I’m running now, I’m just running on

Running on – running on empty
Running on – running blind
Running on – running into the sun
But I’m running behind

Gotta do what you can just to keep your love alive
Trying not to confuse it with what you do to survive
In sixty-nine I was twenty-one and I called the road my own
I don’t know when that road turned onto the road I’m on

Running on – running on empty
Running on – running blind
Running on – running into the sun
But I’m running behind

Everyone I know, everywhere I go
People need some reason to believe
I don’t know about anyone but me
If it takes all night, that’ll be all right
If I can get you to smile before I leave

Looking out at the road rushing under my wheels
I don’t know how to tell you all just how crazy this life feels
I look around for the friends that I used to turn to to pull me through
Looking into their eyes I see them running too

Running on – running on empty
Running on – running blind
Running on – running into the sun
But I’m running behind

Honey you really tempt me
You know the way you look so kind
I’d love to stick around but I’m running behind
You know I don’t even know what I’m hoping to find
Running into the sun but I’m running behind

#70 Joe2.0 on 01.23.15 at 8:54 pm

#-34
And no power, he’s just doing what he’s told.

#71 Bubble popping on 01.23.15 at 8:55 pm

I live in edmonton since 2006

This is my real storie

Arrive in june 2006
Buy a bungalow @ 292000 in september in the crazy year of 2006 in Alberta (at this time i was a bullish)
6 month later home reach 350000 yes 58000 of free money but i was still a bullish … Until credit crisis start to ko the wti

First month of 2009 the inventories was at the highest level in only some week the gimmick to get free money was destroy bang my home has fall around 270
I have been lucky i have wait some month with free punch bowl my as recover a little once able to refund the mortgage i sell and bye

Since this i’m a renter and i’m waiting for a crash 1982 still 38%

#72 TheAwakenedOne on 01.23.15 at 8:57 pm

” Or, you can believe the government. ” – Sir Garth

” Do not believe in what they say, but look at what they do ” – Anonymous –

I am patriotic, and I’m serving Canada for 15 years & counting. But I have a very hard time believing Stevie & his “poodles”. Let us look at some actions Stevie & his pet buds have done:

– Wasting $500+ millions in tax payers’ $ on the absolutely useless F35 fighter monopolistic procurement programme… while smothering any domestic potentials to build a home-grown Canadian fighter. We did it with the Avro Arrow… what stops us now?

– We still fly the Sea King helicopter… (I’m glad Prince Williams did fly it uneventfully though… and lives on to make royal babies! )

– Short-changing service veterans… thanks to Fantino – Mr. Harper’s right hand puppet. How much did you save last 3 years by short-changing CF vets out of their benefits & pension, hhmm Fantie?? Oh you cute poodle!! I wish I had a cute poodle like you! Enough to scape for this new budget with Joe Owe ??

– While a mad terrorist storming the Parliament Hill, what did our brave PM Stevie H. do as the fearless leader of Canada ??

You remember this, don’t you? Yeah, exactly my point: Shiver my timbers !!

I’m proud that some politicians still got balls, ballsy enough to sharpen flag poles and ready to defend themselves and their hopelessly frightened colleagues… while Stevie trying to save himself & his mojo in some dark closet corner….

– Now they got the money poodle Poloz to drill more holes in a sinking boat.

– Do you feel a sense of de javu here? Or just moi ?

Methinks, we Canadians:
to pee, or not to pee
our pants in exasperation
and nightmarish fear….
that is the real question.
for thee Canadians
who vote and love
the gang of Steven:
Believe, or not believe
O true North strong & free,
please get rid of Steven!
Bring out the hairy beaver:
and build me some timbers
Just a roof, and four walls
Simple, real, affordable
Let me live in peace…
O True North strong & free.

#73 Joe2.0 on 01.23.15 at 8:59 pm

#58
Realtor scare tactics….
It’s bang for your buck.
Business sense.

#74 Daisy Mae on 01.23.15 at 9:01 pm

#33 Dual Citizen in Canada: “…I grew up in this country and is saddened that we will suffer more because the trust is not there for us to save our own economy. With all our natural resources, and brain power, Canada should be self a self sufficient and powerful nation. What a shame…”

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

Yes, it is — a real shame.

But then, Harper DID promise we wouldn’t recognize Canada when he got thru with it….

#75 Obvious Truth on 01.23.15 at 9:04 pm

#58

Hilarious.

Reminded me of the Greek poster on specific ft Mac pricing.

#76 asp on 01.23.15 at 9:06 pm

The BoC is not the government. It is independent.

I’ve been in government. Have you? — Garth

#77 Panic | Realties.ca on 01.23.15 at 9:06 pm

[…] Source: http://www.greaterfool.ca/2015/01/23/panic/ […]

#78 Visitor Number 9 on 01.23.15 at 9:08 pm

The Stephen Harper Governmen doesn’t have a plan?
Pfffffft…
C’mon,

Hasn’t anyone heard of the Canada Action PLAN ??

#79 Timmy on 01.23.15 at 9:09 pm

Now’s not the time to load up on US stocks with a 20% premium due to currency. If the CDN dollar goes up, you’ll take a big haircut.

Why didn’t you do it two years ago when I suggested the weighting? — Garth

#80 asp on 01.23.15 at 9:09 pm

The government (not the BoC) has the tools to limit consumer debt and overheated housing.

They are either economically illiterate or they want consumers to load up on housing debt.

#81 Smoking Man on 01.23.15 at 9:12 pm

One good day then my idiot son thinks he’s a trader..

Lost all discipline. Broke formation. Made the rules up as he went along. Anyway he learned a lesson.
At one point he was down 9k..lucky he’s bet on the long term trend.

Kids do not try this.. Seriously..

#82 espressobob on 01.23.15 at 9:19 pm

#45 Flatlander

So.. I don’t own any American equities.. Is it too late to get into the game?
………………………………………………………………………..

It’s never too late to diversify ones portfolio. You can buy the S&P 500 in USD or hedged to CAD. Your choice. Good luck.

http://www.etfs.bmo.com/bmo-etfs/glance?fundId=72049

#83 Mr. Frugal on 01.23.15 at 9:23 pm

A lower dollar isn’t all bad news. Canadian lumber stocks have done quite well. Interfor is up 24% over the past 3 months.

#84 Daisy Mae on 01.23.15 at 9:25 pm

#69 Joe2.0: “#-34 And no power, he’s just doing what he’s told.”

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

WHO is “doing what he’s told”? No one tells King Harper anything. He rules Canada, didn’t you know?

#85 Just Saying on 01.23.15 at 9:26 pm

“As you know, this pathetic blog has been urging you for a long time to have fewer of your nuts in Canada and more in the US ”

btw did you catch that Earth is literally disappearing under most of Fracking USA. So Yea, go nuts and invest your nuts in the USA. Sign of things to come, comrade.

I have a feeling this will not end well. Just Saying.

#86 Brad on 01.23.15 at 9:27 pm

Investment advisor scare tactics vs realtor scare tactics. Is there really any difference…..everyone sells something.

A fee-based advisor sells no products and collects no commissions. I’d say that’s a reasonable difference. — Garth

#87 Vancouver coastal on 01.23.15 at 9:30 pm

There is a problem in canada and it’s not a cyclical one it is structural. What has happened can’t be turned around or hit a soft landing , all they can do is kick the can down the road and were running out of road

#88 AK on 01.23.15 at 9:32 pm

#13 zee on 01.23.15 at 6:48 pm
“hi

can you help us understand, how deflation will happen if our imports are costing more with the lower dollar. we import everything here.”
===================================
You just answered your question.
The loonie got hammered with the lowering of the interest rates. By having a lower dollar and since Canada imports more than exports, this will create massive inflation down the road. Which will then start the vicious circle all over again…. :-)

#89 MSM-free zone on 01.23.15 at 9:32 pm

crowdedelevatorfartz on 01.23.15 at 8:21 pm
@#34 MSM free zone
“….Ummmm, mind if I copy and paste that little list and forward it on…….. TOO LATE!…..”

Balmuto on 01.23.15 at 8:49 pm
#34 MSM free zone
“…..Wow, now that is hands-down the best and most succinct takedown of Harper I’ve ever read……”

Feel free to share the love, especially for trolling ConBots with limited volatile memory.

An informed voter is a patriotic voter….

#90 Porsche on 01.23.15 at 9:42 pm

My parents are 90 years old (God bless them both) and are in a seniors condo.

They sold the house about 4 years ago and put the money in their bank savings account (old school and don’t understand finance)

Well they are getting absolutely squat in interest on that money and the amount keeps going down as they keep needing to withdraw money to live.

So, change it for them. — Garth

#91 randman on 01.23.15 at 9:42 pm

Don’t try to time the markets. All through 2014 this blog was brimming with experts saying US equity markets were peaking. They weren’t.”

Hope you’ve all crystallized those gains!

It’s called rebalancing. — Garth

#92 Leo on 01.23.15 at 9:45 pm

Simple question: would you vote for this government?

#93 SWL1976 on 01.23.15 at 9:46 pm

#34 MSM-free zone – Thanks for summing that up. I always knew Harpo was a snake in the grass. First clue for me was when he had a hard on to go to war in Iraq the first time.

If I may, I’d like to add 38 – Giving Garth the boot

It’s going to be a wild ride folks. All this talk of deflation being such a horrible thing bothers me.

Deflation, having your money worth more… Hmmm sounds terrible…

Oh that’s right it is for the indebted including governments who have run up debts that can never be paid back without massive inflation, so this is what we are stuck with. Governments and central bankers want to inflate, I’d like to say their debts, but they are really our debts, away and pay them back with money that is worth less. Inflation.

A government without a plan? Perhaps there is plan that the masses don’t know about and things are going according to plan. Ever think of that one

The ‘crazies’ seem far less crazy these days. I know the people who used to dismiss a lot of what I say as ridiculous 5-10 years ago are suddenly much more involved in the conversation these days

#94 Harper is a threat to every Canadian on 01.23.15 at 9:48 pm

MSM-free zone on 01.23.15 at 7:41 pm
“…..That was unprecedented……..”

Harper might as well change his party’s name to the Unprecedented Party of Canada:

1. Contempt of Parliament (first PM in history),
2. prorogued Parliament for self-gain (x2),
3. liked about taxing income trusts,
4. lied about fixed election dates,
5. balls busted by the Supreme Court (multiple times),
6. criticized stacking the Senate, then stacked his own Senate,
7. criticized opposition omnibus bills, then loaded up his own omnibus bills, coining the new word “Harpocrisy”,
8. coined 200-page parliamentary committee disruption manual,
9. ‘In-and-Out scheme’ party riding funding scam,
10. PC logo (in-)Action Plan cheques scam,
11. total contempt for democracy,
12. (un-)Fair Election Act legalizes vote rigging and voter suppression,
13. RoboCall voter suppression,
14. muzzled Chief Electoral Officer investigations,
15. muzzled Canadian scientists,
16. muzzled the media,
17. policy announcements made overseas, too cowardly to make them here at home,
18. ‘Plagiarizing-the-Media’ bill passed to fund opposition attack ads,
19. tax audits of opposition think tanks,
20. $90,000 Mike Duffy scam,
21. $1.2 million Israel trip taxpayer scam,
22. $50 million John Baird/Tony Clement gazebo scam,
23. $100 million (in-)Action Plan advertizing scam,
24. $1.2 billion G20 scam,
25. $126 billion F35 cost overrun scam,
26. one-sided, war-mongering mouthpiece drawing Canadians into world conflict,
27. overseas photo ops with active service men and women, then
28. subsequently threw returning wounded Canadian Veterans under a bus,
29. abandoned women and a paraplegic in the face of danger for a run to a closet,
30. diverted unspent Veteran funding toward income-splitting tax cuts for the wealthy,
31. Free Trade agreements gutted Canadian manufacturing,
32. Temporary Foreign Worker Programs gutted Canadian working middle class,
33. record unaffordable Canadian home ownership,
34. one-trick resource economy,
35. no economic backup plan,
36. never held a real job in his life,
37. no courage, no compassion, no integrity, no transparency, no accountability, no democracy, no apologies, no conscience, no class.
____________________________________

Wow you might of even missed some things. Harper is horrible for Canada

#95 Porsche on 01.23.15 at 9:48 pm

#45 Flatlander

So.. I don’t own any American equities.. Is it too late to get into the game?

………………………………………………………………………

Not at all and the choice of stocks, ETF’s, REIT’s, etc etc
to invest in is absolutely endless compared to Canada

#96 45north on 01.23.15 at 9:48 pm

As economist Louis-Philippe Rochon wrote a day ago: “The (rate) move was a remarkable admission by the Bank of Canada that the Canadian economy was in far worse condition than previously believed. So much so, that they had to defy the expectations of virtually all economists, lowering rates now without any warnings.”

I was alarmed a week ago with this statement from Jeff:

“I am an engineering executive in the energy sector. Because of position and proximity, I see a lot of information before it becomes public. Project cancellations, budget curtailments, and layoffs are currently significantly under-reported in the media.

Harper knows his base and it’s Alberta.

$1 Cdn = $0.80 US

a year ago it was

$1 Cdn = $0.90 US

so I guess my house is worth 10% less than a year ago

#97 45north on 01.23.15 at 9:50 pm

oh yeah here’s Jeff’s link:
http://www.greaterfool.ca/2015/01/18/the-awakening/

#98 Ken Nash on 01.23.15 at 9:52 pm

I am so worried about my two, twenty something kids future. Both in university. I watched the Bank of Canada’s Polloz news conference. The anxiety and sticking page snafu foretelling more. Most telling to me, was when he said, “A lower Canadian dollar should help exporters. Though export assets have greatly diminished over the past decade” I’ve seen it upfront and personal in my career of corporate equipment finance. Easily over 2,000 manufacturers I once financed are gone now. From Tilley, the past 100 years leather goods manufacturer, giving one last kick at the can with computerized cutting tables in 2000. Then crushed by a high dollar. To Ontario’s favourite 28 store chain of burger places throwing the towel. Two small for the rates they needed to compete with the multinationals. At least they gave the stores and signage to their franchisees. Helping companies build was fun. Watching them fail, threw events beyond their control, brutal.

Next up this government will throw Black Berry under the bus to Samsung. So it can report exports are up $7 billion. On this onetime sale of family heirlooms.

I live in Durham. General Motors is a big employer. Naturally, the local paper quickly contacted GM to see if the weak Canadian dollar would save jobs at the Oshawa plant. GM didn’t even bother to obscure the reply. It was a resolute “NO”

How can a country which had so much promise in the 1950s squandered so much?

Me? I’ve followed the blog, read the books, sold the big house 4 years ago, a rental place two years ago and a condo rental four years ago. I’ve always had a balanced portfolio being a fan of Benjamin Graham’s Intelligent Investor, somethings don’t change with time. Popular Delusions and the Madness of the Crowd and house lust 150 years later. But that’s me. What about my kids.

Will my university educated son ever get a job out of retail? His friends are envious of his job at Sobey’s and the 30 hours a week he gets. But his skill, education and knowledge is being squandered.

I’m angry, pissed off and filled with despair. Whatever.

#99 Immigration will save Canada on 01.23.15 at 9:52 pm

Canada’s population grew by almost 500,000 last year. Almost 400,000 was due to immigration both temp and permanent. Mostly going to cities.

The TSX will crash well before the RE market ever does in the big cities.

Immigration at less than 250,000 people, or 0.8% of the population, has not changed for a decade. — Garth

#100 Hiker on 01.23.15 at 9:53 pm

Regarding :”C$-based securities available” – how to search for them?

#101 CPG on 01.23.15 at 9:54 pm

Saw the following article over at Vancouver Condo Info yesterday:

Central bankers just keep filling the punchbowl

http://www.theglobeandmail.com/globe-debate/central-bankers-just-keep-filling-the-punchbowl/article22565264/

#102 Rob on 01.23.15 at 9:56 pm

“And now word of a 0.25% drop in rates that won’t actually help anyone”

Well, uh, actually it will – the “poor” banks. I see where they all have decided to hold the line on their existing mortgage rates to all those horny RE virgins out there and instead pocket the Fed’s rate decrease to help beef up their thin margins. So not until the Feds decrease the rate again (probably in the next few months) will anyone see any cheaper mortgage loans being offered to the unwashed masses. Not exactly what the Feds had planned but, well, so what else is new?

#103 Porsche on 01.23.15 at 9:56 pm

So, change it for them. — Garth

………………………………………………………………………

You’ve never dealt with my father… old feels safe stuck in their ways.

You have an obligation. — Garth

#104 devore on 01.23.15 at 9:58 pm

#36 Greg

We import everything, but we export even more. On balance we are ahead

Are you sure?

#105 randman on 01.23.15 at 9:58 pm

Here is an excellent analysis of our banking system…
from IA securities in Toronto

Since the world ended Bretton Woods and the decoupling of the US$ from Gold in August 1971 currencies have embarked on wild rides. A better description might be “gross instability”. The current rise in the value of the US$ against the major currencies is just another example of currency instability. At some point the value of the US$ should become too high and there will once again be a clamour by American business to bring down the value of the US$. Wild and rapid currency movements are not a sign of a stable economic system. It is the sign of a financial system becoming increasingly destabilized.”

http://www.321gold.com/editorials/chapman_d/chapman_d_012415.pdf

#106 down goes the canadian dollar on 01.23.15 at 10:02 pm

All this stuff happening is pretty concerning to the point where I would also suggest to start collecting seeds. You cant eat paper money once it becomes worthless.

#107 lee on 01.23.15 at 10:05 pm

When it comes to real estate, sell now or sell never.

#108 Porsche on 01.23.15 at 10:06 pm

You have an obligation. — Garth

……………………………………………………………………….

Sorry I brought it up, but at 93 years old it don’t really matter anyways.

#109 Cici on 01.23.15 at 10:07 pm

Great post Garth.

Now, I have to wonder, wasn’t the supposed goal of the rate cut to encourage lending to businesses and business activity in an effort to bridge the gap left by the stinking cratering of oil, rather than to encourage more subprime lending?

I’m thinking that even if these cuts are eventually passed on to indebted homeowners and mortgage hopefuls, it will only provide a temporary benefit to the housing sector, but ultimately sound the death knell of that entire sector of the economy. Honestly, can we continuously spend our way out of debt? Doubt it.

#110 devore on 01.23.15 at 10:10 pm

#97 Immigration will save Canada

Canada’s population grew by almost 500,000 last year. Almost 400,000 was due to immigration both temp and permanent. Mostly going to cities.

By just around 400,000, actually. The 2 decade old Liberal immigration target of 1% has never been reached, staying below 300,000.

Maybe you and Greg above should get together and practice using Google.

#111 Rob on 01.23.15 at 10:12 pm

Tim Hortons planning significant layoffs next week.

http://business.financialpost.com/2015/01/23/tim-hortons-inc-planning-significant-layoffs-at-head-offices-next-week-sources/

#112 Cici on 01.23.15 at 10:12 pm

#68 DreamingInTechnicolour

Great song/great artist! Gonna listen to that now.

#113 RayofLight on 01.23.15 at 10:16 pm

I would not be surprised at all if the $CDN/$US was in the mid sixties a year from now. The commodity cycle is over, and Canada’s main support for a higher dollars is over also.

http://business.financialpost.com/2015/01/23/world-bank-warns-of-extremely-rare-decline-in-all-9-commodity-sectors-this-year/

#114 Mike on 01.23.15 at 10:16 pm

All the financial news hitting us these days would be confusing, if it wasn’t schizophrenic. Turn off the TV. Now put down the remote. Go for a walk in your neighborhood, downtown, the mall near you – what do you see?

Here is how I see it in the 416 – the microcosm of Canada:

The Neighborhood:
Hardly any sales signs at all. When they do come up on occasion, Sold sticker is slapped on in but a few days. Still plenty of condos up for sale though. Beamers, Benzes, Audis galore. Jaw shattering potholes too, but hey at least premium is well under a buck and these are SUV rides we are talking about. Local Starbucks is humming, lines a dozen deep every single morning. People still queue up at the drive through at the local fast food join, with 15 minute waits – idling the entire time. Too much effort just walking in, placing an order and walking out in under 3.

The Downtown:
Hipsters with $700 mobile devices, $150 data plans and an occasional Canada Goose uniform to complete the look. Salad places are all the rage – $7-$8 for 10 leaves of spinach and a cucumber. Add another $5 for an all organic option. Uber rides picking up passenger at every corner. Good ol’ cabbies still have issues finding directions or accepting a credit card… The subway is getting a bit better – one day at a time. The homeless greet you with creative signs, each outdoing the other. The one that stood out a few days ago “Don’t bother with change. I only take $10’s”,

The Mall:
Eatons, Yorkdale and Bayview Village are booming and the later 2 expanding. The rest are doing so-so, some are in decline. In many respects, it’s get the wallet at Holts go to Wal-Mart for shorts – economy.

In summary – there is plenty of fat to trim..almost too much for some you can argue. This may sound outrageous, repulsing even – but we need these people to keep doing what they are doing to sustain the economy. They are but one group of players in this game. Just do your best not to be one of them.. On the other hand there is a huge, but silent minority generally responsible and accountable, but sh*t scared of seizing an opportunity. Try your best to understand that you are a player in this game. If you don’t start playing an active role in this game the game WILL play you. So how will you spend your Monopoly money?

#115 Happy Renting on 01.23.15 at 10:20 pm

#12 SashToronto on 01.23.15 at 6:48 pm

Before you buy, ensure your children are eligible to attend your target school (and that the school has space for them). My other half’s coworker reported that some kids living at Yonge & Sheppard are being bused to schools further away, as the local schools can’t handle the growth in the area’s population (condos).

#116 Dual Citizen in Canada on 01.23.15 at 10:21 pm

You have an obligation. — Garth

……………………………………………………………………….

Sorry I brought it up, but at 93 years old it don’t really matter anyways.

I took over my parent’s finances a year ago when they were content with GICs paying back 1.2%. With education and trust, they have seen the light. I intend to pass this knowledge to my kids, family and friends. Knowledge is power. Teach, don’t tell. There would be less people in debt today if they bothered to listen and learn. Garth is the messiah.

#117 Obvious Truth on 01.23.15 at 10:22 pm

Of course tonight we see that the same strategy garth continually trumpets works again. If you used it and never read the news you wouldn’t care. It protects you from governments and central banks.

Forget the boc. There will be a couple of trillion usd give or take 500 billion moving into financial markets.

Canada is at best a 4% sideshow and shrinking.

Do we think anyone in the us or the uk or Asia for that matter knows the TSX exists. Seriously.

#118 Smoking Man on 01.23.15 at 10:23 pm

Looking at the ice cubes in my glass, floating in liquid aggression and evil.

When they melt my liver gets a reprieve of sorts.. If you only see the terror in eyeballs of those cubes, Jack Takes no prisoners..

Ah, another Friday night a Seneca, Johnny Cash on the buds, Folsom Prison as I type.. Hotties walking by, I’m oblivious, trying to type something to make you pathetic bastards laugh.

I live life, only until, a few of these, then I’ll wanto fight..

To old for this shit…

#119 West Coast on 01.23.15 at 10:26 pm

http://www.cbc.ca/news/canada/manitoba/top-10-economic-predictions-for-2015-1.2891318

Economist – Louis-Philippe Rochon – Top 10 economic predictions for 2015

interesting read…might want to revisit in Jan. 2016…

#120 Happy Renting on 01.23.15 at 10:33 pm

Thank you, Garth, for the deflation preparation “to do” list.

Blog dogs, one last point (from this deflation-related post a year ago): “if you have a job, keep it”.

http://www.greaterfool.ca/2013/12/13/choices-6/

(The above post is great for it’s description of deflation and the compelling call to action for anyone sitting on the fence with a pile on undeployed cash.)

#61 Ron – you win comment of the night!

#121 45north on 01.23.15 at 10:34 pm

Ken Nash: How can a country which had so much promise in the 1950s, have squandered so much?

Ken I remember the 50’s. In Toronto. Manufacturing employed a lot of people. Canada had just won the Second World War, it was one of the few countries in the world with an intact infrastructure, skilled motivated immigrants flocked here to build their lives. There was a consensus, the country had just come through the depression.

Squandered is not the right word. The population has increased three fold. Welfare has become entrenched. Collectively we have lost sight of the fact that we have to earn our daily bread. There was a time when our leaders could say “look tough times are coming and here’s what we have to do”. I believe this is no longer possible. The people are in no mood to hear about tough times. Well too bad, it looks to me that ready-or-not tough times are here.

#122 will on 01.23.15 at 10:38 pm

Hey Nick #19:

Excellent comment!

#123 Wildrose Nutter on 01.23.15 at 10:39 pm

Woah.. smoking man!

#124 Mark on 01.23.15 at 10:39 pm

Now, I have to wonder, wasn’t the supposed goal of the rate cut to encourage lending to businesses and business activity in an effort to bridge the gap left by the stinking cratering of oil, rather than to encourage more subprime lending?

Of course, that’s the goal. Only problem is, how many businesses will take up the cause and invest going into a significant downturn? Not many, I would suggest, unless they have something that’s really in demand. Examples of which are few and far between these days in Canada.

This is why I believe that the recent cut will ultimately be followed on by additional cuts. And ultimately a program of quantitative easing. Effectively the BoC is “pushing on a string”. RE demand is fully depleted in Canada with prices falling. Subprime credit has peaked and there’s no political appetite for expansion of the CMHC subprime guarantee limit. The fact that the banks have decided to simply keep the BoC rate decrease for themselves and not pass such onto consumers is prima facie evidence that the banks perceive Canadian consumers to be quite increasingly un-creditworthy.

#125 Wildrose Nutter on 01.23.15 at 10:40 pm

Magic shrooms for the smoking man

#126 Washed Up Lawyer on 01.23.15 at 10:41 pm

I will try to be brief. A couple of weeks ago, within two days, two co-workers up here in the taiga of Ft. McM discussed their real estate plans.

The first said she was trying to sell her house (let’s assume average of $750K) and she received, in her words, a “stink bid” of $50K less than list. The offer was rejected. This week she dropped the asking by $30K.

The second said he was thinking about renting out his existing house and buying a second.

They are both younger than me and have families.

I thought for a moment I should recommend the Greater Fool but I decided not to. I felt it was none of my business. They were not seeking advice.

Did I fail to observe a moral imperative?

#127 Mark on 01.23.15 at 10:42 pm

“Do we think anyone in the us or the uk or Asia for that matter knows the TSX exists. Seriously.”

Such a pity, because the amount of value available in a wide plethora of TSX-listed firms, particularly in the energy and precious metals mining sector, is enormous.

How enormous? Well most of the PM miners are good for at least 5-10X returns even if the PM prices just return to their 2011 levels. And there’s a good possibility of going much higher. Sure beats the returns implied by overvalued and deflating consumer or real estate stocks, that’s for sure.

#128 bigtown on 01.23.15 at 10:46 pm

Parents worried about getting kids into best schools is the wrong PLAN….the best plan is to spend the first five years of the child’s life teaching him how to read and write and speak. You as the parent are the main determinant of the kid’s future. You as the teacher in the first five years of life make the difference. My sister grew up in a poor area of New Brunswick but became one of the Superintendents of the a major city in the Prairies. Another offspring is one of the best realtors of Canada and a highly paid real estate speaker. It comes from the parents and a good Christian church not Toronto schools.

#129 @Devore on 01.23.15 at 10:48 pm

Devore said, #97 Immigration will save Canada

Canada’s population grew by almost 500,000 last year. Almost 400,000 was due to immigration both temp and permanent. Mostly going to cities.

By just around 400,000, actually. The 2 decade old Liberal immigration target of 1% has never been reached, staying below 300,000.

Maybe you and Greg above should get together and practice using Google.

Listen Devore. I my info from BC stats and Statistics Canada. Not Google as you say. Close to 500,000. I stand corrected. Say, how did your interest rate prediction work out?

#130 Blacksheep on 01.23.15 at 10:49 pm

Mark # 59

“I think the article makes it clear —banks borrow to fund their operations and their lending”
—————————————————–
Mark…your arrogance astounds, insulting the Dogs this way.

You assume the Dogs are either:

1) To lazy to actually click on the BoC link and see truth in the first paragraph.
2) Simply to stupid to comprehend the links very basic language.

Because we both know if they did, they will quickly realize, your just plain lying and any credibility you have here, will be gone.

From BoE link:

“• Money CREATION in practice differs from some popular misconceptions — banks DO NOT act simply as intermediaries, lending out deposits that savers place with them, and NOR DO they ‘multiply up’ central bank money to CREATE new loans and deposits.”

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Commercial banks, do not borrow to lend, as you claim.

Commercail banks, create credit to lend.

I know it. They will know it and whatever you claim, is no longer relevant

#131 @Garth on 01.23.15 at 10:51 pm

Immigration at less than 250,000 people, or 0.8% of the population, has not changed for a decade. — Garth

Really?

http://www.cic.gc.ca/english/resources/statistics/menu-fact.asp

Really. — Garth

#132 Vancouver coastal on 01.23.15 at 10:52 pm

Garth, with all this deflation in the world and central bankers from Norway to Japan all easing, how can the US fed raise rates this fall? If they do won’t the usd rocket higher and cause deflation already complimented by lower energy costs? Enlighten us

#133 El Barto on 01.23.15 at 10:52 pm

So glad I used some of the options Garth clearly pointed out in his past rantings; balanced out on US preferred ETFs (PFF:US), bought some US ETFs hedged to Canadian dollars (XSP), some international stuff (ZDM), some REITs (D.UN) and (ZRE) ETF, a sliver of Canadian Equity(XIU), some real return bonds(ZRR) a little XBB to sweeten the pot, some laddered bonds (CBO), and laddered Canadian Preferreds (ZPR), a little cash, and just change the oil once or twice a year. Averaging out 7-9% with a combo of monthly cheques and capital growth. It’s such a simple plan with a fee of about .40 percent or lower, what’s not to get? Life is good, I don’t get beat up for my lunch money by Mutual Fund Salesmen, and now chicks dig me. :)

#134 will on 01.23.15 at 10:53 pm

Hey MSM free zone #34:

couldna said it better! the frauds are definitely NOT conservative.

#135 Harbour on 01.23.15 at 10:57 pm

#116 Smoking Man on 01.23.15 at 10:23 pm

Pretty easy to wright drivel…

Looking at the clouds through my sunglasses, floating in liquid aggression and evil.

When they fade my eyes gets a reprieve of sorts.. If you could only see the terror in eyeballs behind those sunglasses, Jack Takes no prisoners..

Ah, another Friday on the beach in Boracay, Johnny Cash on the bud lights, Folsom Prison as I type.. Hotties walking by, I’m oblivious, trying to type something to make you pathetic bastards laugh.

I live life, only until a few of these, then I’ll want to have a fiesta

To old for this boring shit…

#136 will on 01.23.15 at 10:58 pm

Hey Calgary Boomer #38

Read Nick #19 on this. I’m with him.

-will

#137 John in Mtl on 01.23.15 at 10:59 pm

#117 West Coast on 01.23.15 at 10:26 pm
interesting read…might want to revisit in Jan. 2016…

Love the quote at the end of that article:
“The only function of economic forecasting is to make astrology look respectable.” – John Kenneth Galbraith

#138 Smoking Man on 01.23.15 at 11:05 pm

Amazing, you walk into a bar, Stir.. They got seats reserved for others.. The waitress, says where ever you want sit Smokey..

I got a bad habit of giving a 20 for a ten dollar drink.

It’s not because I’m being kind, hell no. Trying to find my pocket to put the change in after is too much work.

That’s my legasey. Kind of sad actually..

But as long as I can take a breath, I will be happy.

My next first fight is with God, and I’m out of shape..

#139 Steve-0 on 01.23.15 at 11:07 pm

#114 Dual Citizen in Canada on 01.23.15 at 10:21 pm
You have an obligation. — Garth
……………………………………………………………………….
Sorry I brought it up, but at 93 years old it don’t really matter anyways.
……………………………………………………………………….

I understand where you are coming from, but you shouldn’t try and “time people” any more than you should try and time the markets. It is completely possible they could live for 10 – 15 years longers.

Sometimes I think I should take up smoking.

#140 Smoking Man on 01.23.15 at 11:11 pm

#133 Harbour on 01.23.15 at 10:57 pm

Drivel? , I thought it was pretty good. F-en renter I’m thinking.

#141 saskatoon on 01.23.15 at 11:13 pm

William White – the brilliant economist who called the 2008 crisis well ahead of time, who is head of the OECD’s Review Committee and former chief economist for BIS (the central banks’ central bank) slams QE:

“He deplores the rush to QE as an “unthinking fashion”. Those who argue that the US and the UK are growing faster than Europe because they carried out QE early are confusing “correlation with causality”. The Anglo-Saxon pioneers have yet to pay the price. “It ain’t over until the fat lady sings. There are serious side-effects building up and we don’t know what will happen when they try to reverse what they have done.””

#142 will on 01.23.15 at 11:14 pm

Hey Ken Nash #96:

what’s wrong with retail? find out if sobey’s has a stock ownership program for employees. if they do that might be a better education than your son’s university.

#143 Mark on 01.23.15 at 11:15 pm

“Garth, with all this deflation in the world and central bankers from Norway to Japan all easing, how can the US fed raise rates this fall? If they do won’t the usd rocket higher and cause deflation already complimented by lower energy costs? Enlighten us”

Short of some sort of systemic event to create demand against the US economy, you’re right, they won’t need to raise, and they probably will be looking at reviving their QE program.

However, “tail risk” appears to be rising dramatically. A chronic net importer, as the US is, cannot expect to rely upon a strong currency perpetually to suppress domestic inflation. The sheer vitesse of the fall in oil prices tells us that something very, very bad is happening somewhere in the world economy.

If I had to take a guess, perhaps significant selling of US Treasury bonds by the middle eastern oil producers (to fund their shortfalls in oil revenue), and by China/Japan (because we’re not buying as many of their exports) will create demand in the US and push down the USD$? Or it could be a more extreme event. Go watch that Jim Rickards video link posted by someone yesterday for a discussion of some USD$-negative scenarios (although keep in mind that Rickards is a gold bug, and he is talking his book).

#144 Smoking Man on 01.23.15 at 11:16 pm

#128 Blacksheep on 01.23.15 at 10:49 pm

Forgive Mark, he’s just trying to prove how it’s so cool to be in possession of an obedience certificate. It’s what he was impregnated with..

God thank you for giving me a broken brain…

#145 DisgustMadeMePost on 01.23.15 at 11:17 pm

More jobs going… Was in Richmond today at the Rmd centre mall. Sears, which has been in that location for 60 years (I asked the sales lady) is closing. Not due to financial issues, but because the lease was up and Cadillac Fairview wants a more high end retailer in the spot. I asked a few employees if they would retain jobs either at another Sears or with the new store and was told ‘no’. First Target and now the Sears employees… Richmond is going to have a lot of unemoyed hitting the streets. I’m doubtful these folks will be shopping at the new high end place.

#146 Canuckinoz on 01.23.15 at 11:25 pm

#33 Dual Citizen in Canada

What Garth keeps reminding us is that patriotism and sweaty emotions shouldn’t factor into our investment strategy. I’m a born and bred Canuck and living in Oz. Both Canada’s obsession with oil and houses and Australia’s obsession with iron ore and houses mean that I have to look elsewhere in order to appropriately invest. I’m sorry (I am so Canadian) but whether or not you are disappointed with Garth’s advice, he is speaking the unfortunate truth. The markets don’t care what flag you are flying.

Garth- with that being said, we are relocating back to Canada this year after seven years away. I’ve been shifting money back to the motherland when it was in my favour but it is just in a dumb orange account. Can I open a TFSA before I return to Canada for residency purposes or should I wait until I’m back on home soil? I am also going to replicate your balanced portfolio strategy with my Aussie superannuation as it is now locked in until I am 60 regardless of whether I live in Oz or not.

#147 Fuzzy Camel on 01.23.15 at 11:34 pm

This is a foreshadowing a currency war. Canada is purposely trying to devalue it’s currency. Swiss jumped, and this is going to become a phenomenon this year.
Oil at $45USD /barrel, to our government that is roughly $56CAD.

The lower our currency goes, the more $$ the government makes, as oil is priced in USD. If Harper and BoC take our looney to $0.50, our oil fetches $68CAD /barrel.

Easy to balance the budget by throwing your citizens under the bus right?

I work with an older guy who wanted to buy a condo in Florida, he has $500,000 sitting in his bank. He just lost $100,000 in terms of purchasing power the past few months.

#148 Bottoms_Up on 01.23.15 at 11:34 pm

#38 Calgary Boomer on 01.23.15 at 7:48 pm
—————————————————
I think the point is that long term US growth will be better than in Canada, therefore your money grows at a greater rate. This is independent of strength of our dollar, and as a long-term investor you should be buying assets yearly so it should average up/down anyway over time.

#149 ANON on 01.23.15 at 11:36 pm

#96 Ken Nash on 01.23.15 at 9:52 pm

Ken, you seem genuine. I feel your anguish. I’ve lived it, and I’m still living it. Hell, I’ve lived almost all my live in a depression (Eastern Europe first gen immigrant). A whole generation of engineers with no engineering to do. Anger, despair, the full Monty.
I hoped it would be different here. It is not, and it will be no different when the chips are called in, with chimerical interest adding on top of chimerical interest in an exponential manner.
This problem is much deeper than ideology, but ever so simple even a high school student can understand it. I have mentioned it here a few times, I won’t bother mentioning it anymore. We have a saying in our culture, that the priest does not sing twice for a deaf follower.
You have already done what you could, and that’s more than the majority has done. Good luck. You have no idea how lucky you were and are.

#150 Marco on 01.23.15 at 11:37 pm

@118 happy renting

Thanks for the link to Garth’s blog : Choices – Dec 2013

“Instead, it appears we’re entering an age of contradictions most people just won’t get. This blog reflects that. I talk about the undercurrents of deflation, but all many people see is inflation in their rising cable bill. It’s time to understand the cost of living may well rise, but your ability to afford it will drop, along with the value of your home. Deflation is when the economy stops being efficient, there’s more production than demand, companies take a profit hit, and the pain’s passed on to workers. Eventually spending falls, prices follow, and things get worse.” – Garth

#151 hohoho on 01.23.15 at 11:38 pm

> … Commercial banks, do not borrow to lend …
Commercial banks, create credit to lend …

how did banks get into a liquidity crisis if they can simply create money??

perhaps the word “money” means different things to you vs the BOE?

#152 Leo Tolstoy on 01.23.15 at 11:41 pm

Garth is right again. The U.S. is where you should’ve been and the CAD is a turd and will stay down for the count. Now, more than ever, is it absolutely ridiculous to put all your faith in a single Canadian asset called the house.

#153 Andrew Woburn on 01.23.15 at 11:53 pm

The US economy will save us. Or will it? Two rather downbeat articles on US real estate.

On the commercial R/E market, the author says the apparent national improvement in office space is driven by new buildings in a handful of hot markets. Most older buildings are struggling to find enough tenants. Worse, the bill for the speculative binge before 2008 is now coming due.

“In this December report, Morningstar made it clear that the major issue over the next three years will be the huge number of maturing office loans which will need to be refinanced. In 2015, $67 billion in performing office loans will be maturing. In the two years after that, the problem will peak. The 10-year balloon loans that financed the craziest bubble-era purchases of 2006 and 2007 will mature in 2016 and 2017. The total for just those two years is nearly $230 billion.”

Is the Commercial Office Market Recovery a Mirage?

http://econintersect.com/b2evolution/blog3.php/2015/01/21/is-the-commercial-office-market-recovery-a-mirage

On the housing side, this author says US banks have tightened up dramatically on mortgage credit to the point that the overall market is stalling.

“By necessity, banks remain selective about the mortgages they’ll underwrite, having paid huge penalties for originating and selling bad mortgages pre-crisis. Banks are also being careful to avoid the high cost of mortgage defaults now that they must repurchase loans with underwriting defects.”

“As you can see, the federal government is trying mightily to spur housing activity. But don’t expect this small but volatile sector to move the economic needle anytime soon, even as 30-year mortgage rates drop. The headwinds from consumer debt, high down payments, unforgiving credit-score standards and worries about another swoon in home prices are too strong.”

Nothing Is Going to Save the Housing Market

http://www.bloombergview.com/articles/2015-01-23/housing-weak-even-with-government-programs-and-big-bank-interest

However you have to like the bit about “having paid huge penalties for originating and selling bad mortgages”.

#154 Entrepreneur on 01.23.15 at 11:54 pm

#34 MSM-free zone…that list does not feel like democracy in our system.

Another point: Brought in Bills to bypass issues and the environment. Used the word streamline to avoid facing environmentalists even to the point of suing us if we say anything.

The Liberals are the same; they follow the Conservatives. Our MLA(Liberal) and MP(Conservative) both are on the same page. They follow the leader on issues, not the constituents.

So much for our so-called democracy, controlled and streamlined.

#155 Bottoms_Up on 01.24.15 at 12:06 am

#92 Harper is a threat to every Canadian on 01.23.15 at
————————————————————–
I can think of a couple more:

1) saying he was 100% behind Nigel’s actions of giving $90,000 to Duffy

2) muzzling/controlling his MPs

3) Feeding his parliamentary secretary to the wolves

4) Not attending the First Ministers’ conference (multiple years in a row!)

5) Not attending UN summit on climate change

#156 Grasshopper 604 on 01.24.15 at 12:12 am

thanks for this, Garth… Sometimes (lately) I’ve taken printouts of your advice (or at least referred to them) to my TD Wealth advisor guy…I don’t want to freak him out, but I have alluded that he should read the blog…he’s doing a good job for me, but it doesn’t hurt to push a few buttons!

#157 HappyJack on 01.24.15 at 12:18 am

Hi Garth: I`m finding some of the posts rather depressing. So here`s some good news !! It has been confirmed that your old buddy, Inky “The Rebel” Mark will be running in the forthcoming federal election as an independent !! I like rebels, so I think I`ll vote for Inky !!!

Keep Smiling.

#158 Grasshopper 604 on 01.24.15 at 12:18 am

#18 Canadian in Portland on 01.23.15 at 7:04 pm
The answer: none. I do not know a single person across the country who would be able to stand an increase to their expenses.
______________________________

Beg to differ… I am currently putting away about 25% of gross income for the last couple of years to tfsa & rrsp, in spite of condo assessments, pay off my credit card every month, etc…doesn’t pay to generalize!

#159 Bottoms_Up on 01.24.15 at 12:20 am

#144 DisgustMadeMePost on 01.23.15 at 11:17 pm
————————————————————
Sears also left the Rideau Centre in Ottawa. Supposedly it’s the highest-traffic mall in Canada. If they can’t make it work there….

A year ago I ordered men’s winter boots on-line…and instead I received a pair of woman’s leather boots. Not easy to return it to Sears (had to do research to find a location), didn’t receive a ‘sorry’ at the desk, and didn’t receive anything for my troubles driving to and fro.

Canadian customer service at it’s best. If you don’t look after your customers, your customers won’t look after you.

#160 Nomad on 01.24.15 at 12:27 am

Other than the forestry stocks (West Fraser, Interfor, WEF), the Canadian market doesn’t seem in a position to profit much.

If you want to invest in the US here’s two ETFs:

1- HXS by Horizon
– Affected by USD / CAD changes

2- ZUE by BMO
– Unaffected by USD / CAD changes.

#161 Bottoms_Up on 01.24.15 at 12:28 am

#130 @Garth on 01.23.15 at 10:51 pm
———————————————–
Garth’s correct:

http://www.cic.gc.ca/english/resources/statistics/facts2013/permanent/01.asp

#162 juno on 01.24.15 at 12:33 am

next is a downgrade of the Canadian Dollar

How can S&P get it so wrong. How can they give a junk currency named the looney an A+ rating. At best it should be C+ and now getting closer to junk

#163 Bottoms_Up on 01.24.15 at 12:40 am

#114 Happy Renting on 01.23.15 at 10:20 pm
—————————————————–
So do urban planners and those that approve building permits consider the population explosion and need for more infrastructure, amenities and schools in the area?

#164 Washed Up Lawyer on 01.24.15 at 12:42 am

#152 Andrew Woburn

Thank you for the link to the commercial real estate article. Makes me think about cheap sublet space about to become available in Calgary. I might hang up the shingle again and bone up on the law relating to airplane repos.

#165 Bottoms_Up on 01.24.15 at 12:49 am

#107 Porsche on 01.23.15 at 10:06 pm
—————————————————
You have multiple reasons to properly look after that money and your parents. For starters, you have no clue how long they will live, and you should want them to live as comfortable as possible with as many amenities as possible. Number 2, if you look after their money properly, at some point it will become part of their estate, that may be passed to you or your family. Why would you want to squander your own money or your children’s money? It’s your family…protect it.

#166 Bottoms_Up on 01.24.15 at 12:57 am

#97 Ken Nash on 01.23.15 at 9:52 pm
—————————————————-
4 decent options for fresh grads:
1) broaden scope of job search across Canada (be willing to work anywhere, including Ft. Mc)
2) Pursue higher education
3) Move to the USA
4) Pursue a trades degree, work for a few years to learn the trade, then start your own business

#167 Bobby on 01.24.15 at 1:07 am

The smarter ones will see this rate cut for what it really is; the economy is in the toilet and hopefully won’t get a lot worse. The less financially astute will see it as an opportunity to take on a bigger mortgage, because remember real estate always goes up.
But oops, a house I have been watching here in Victoria, just dropped their price 5%. I guess they didn’t get the memo.
Like Garth, my well diversified portfolio was up +9% last year. Love it.
Undoubtedly, the economy will become an election issue. Who do you vote for? Of course you can always choose the NDP and see rising taxes or the Liberals, who I understand supposedly have a plan. We’re told that anyways.

#168 NoName on 01.24.15 at 1:17 am

for all immigrant haters
http://youtu.be/LAwhYbik3bg

#169 I'm Still Around on 01.24.15 at 1:25 am

Great advise tonight Garth!
You said it so succinctly.
The BOC and the Conservatives panicked. That’s exactly what happened.

#170 Longterm on 01.24.15 at 1:44 am

#89 Porsche on 01.23.15 at 9:42 pm

My mid-70s parents sold their house in 2011 and their $340k sat in a 1% GIC until I sat down with them and made a plan.

With a bit of work and convincing over a few months I got them set-up with fully maxed TFSAs invested in a diverse portfolio and the balance in a non-registered account heavy on CDN dividends, REITs and preferreds tossing off income. Each year in Jan they move $5500 each from the non-registered into the TFSAs I handle all of the paperwork and account administration for them as they aren’t really internet users nor have much of a clue about investing.

They were relunctant and uncertain at first having never really invested beyond some crappy mutual funds in a bank RRSP but the proof is in the pudding and they are convinced. 2014 closed with their portfolio up about $12k in capital and having generated another $14,500 in income, basically tax free due to the dividend tax credit. They add this money to their CPP and my dad’s modest but adequate work pension [which will pass to my mum upon death] and it pays for about 60% of their rent in Calgary. The portfolio is managed to preserve capital and to help finance my mum until she’s 100 [her mum died at 98]. In her later years if she needs/wants to spend some capital in a draw down then so be it and if at any time they want to splash $10k on big trip then they do so without much worry.

You need to talk to them about this and get on it.

#171 Blair Witch on 01.24.15 at 1:59 am

I don’t think the short term hike will effect the push in Real Estate prices. They will remain flat liner prices, as it is so over valued, 30% ,or more, who could afford them anyhow. Living in BC is like living in a black hole if debt. The good old days are over, and I don’t think they

#172 live within your means on 01.24.15 at 2:01 am

#22 – Totally agree.

#173 live within your means on 01.24.15 at 2:04 am

OOPS – My comment should have referred to #34.

#174 Blair Witch on 01.24.15 at 2:07 am

I don’t think the short term hike will effect the push in Real Estate prices. They will remain flat liner prices, as it is so over valued, 30% ,or more, who could afford them anyhow. Living in BC is like living in a black hole of debt. The good old days are over, and I don’t think they have smarts to figure it out. Alberta will be hit hard, but they will muster through. This year will be a year of change …… The world is changing, so volatile, it will affect Canada and the USA no doubt. But, there is a bright side with the Canadian dollar taking a dive, if you have USA dollars it is on a positive note …. $$$$$$$$$$

#175 Happy Renting on 01.24.15 at 2:24 am

#125 Washed Up Lawyer on 01.23.15 at 10:41 pm

I don’t think so. You said they were coworkers. If you were in a position where you owed them a duty of care (mentor, advisor, supervisor, friend) then you could have gently introduced another perspective, but otherwise, I find sex, politics, religion, and finance to be too heavy for casual office conversation (especially if they weren’t seeking advice.)

Appreciate your ear to the ground in Fort Mac, BTW. Way better than MSM or “my friend heard” rumours.

#176 wrinkly on 01.24.15 at 2:29 am

Well, well, I’m going to vote for Mr Harper. He’s great, steady and managing much better than the others would.

#177 aL pacino on 01.24.15 at 2:37 am

Harper might as well change his party’s name to the Unprecedented Party of Canada:

1. Contempt of Parliament (first PM in history),
2. prorogued Parliament for self-gain (x2),
3. liked about taxing income trusts,
4. lied about fixed election dates,
5. balls busted by the Supreme Court (multiple times),
6. criticized stacking the Senate, then stacked his own Senate,
7. criticized opposition omnibus bills, then loaded up his own omnibus bills, coining the new word “Harpocrisy”,
8. coined 200-page parliamentary committee disruption manual,
9. ‘In-and-Out scheme’ party riding funding scam,
10. PC logo (in-)Action Plan cheques scam,
11. total contempt for democracy,
12. (un-)Fair Election Act legalizes vote rigging and voter suppression,
13. RoboCall voter suppression,
14. muzzled Chief Electoral Officer investigations,
15. muzzled Canadian scientists,
16. muzzled the media,
17. policy announcements made overseas, too cowardly to make them here at home,
18. ‘Plagiarizing-the-Media’ bill passed to fund opposition attack ads,
19. tax audits of opposition think tanks,
20. $90,000 Mike Duffy scam,
21. $1.2 million Israel trip taxpayer scam,
22. $50 million John Baird/Tony Clement gazebo scam,
23. $100 million (in-)Action Plan advertizing scam,
24. $1.2 billion G20 scam,
25. $126 billion F35 cost overrun scam,
26. one-sided, war-mongering mouthpiece drawing Canadians into world conflict,
27. overseas photo ops with active service men and women, then
28. subsequently threw returning wounded Canadian Veterans under a bus,
29. abandoned women and a paraplegic in the face of danger for a run to a closet,
30. diverted unspent Veteran funding toward income-splitting tax cuts for the wealthy,
31. Free Trade agreements gutted Canadian manufacturing,
32. Temporary Foreign Worker Programs gutted Canadian working middle class,
33. record unaffordable Canadian home ownership,
34. one-trick resource economy,
35. no economic backup plan,
36. never held a real job in his life,
37. no courage, no compassion, no integrity, no transparency, no accountability, no democracy, no apologies, no conscience, no class.

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

BANG ON !!!

#178 Babblemaster on 01.24.15 at 3:04 am

Garth, stop telling people that RE can drop. It can’t. Not in Toronto. The feds have obviously demonstrated that they will do everything they can to keep it inflated. They have many more things they can do. Such as; drop rates further, offer housing grants, increase immigration, increase amortization periods, increase CMHC coverage, etc.

#179 Babblemaster on 01.24.15 at 3:08 am

Garth, why advise people to reduce their debt? Anyone who has used debt to buy assets the last few years has profited handsomely. They will continue to do so in the coming years. The saver (like myself) are the idiots. As rates will continue to fall and the dollar gets skewered, we’ll have to eventually bail in the banks.

#180 Blobby on 01.24.15 at 3:10 am

The Harper Government ™ will do, and tell you – anything and everything to get you to re-elect them.

Regardless of whether it’s actually good for you, or the country, or not…

Even if it means damaging our economy long term, to boost things short term (lowering rates), as.. at the end of the day.. Who cares about long term? They only care about the next 4 years…

#181 Blobby on 01.24.15 at 3:14 am

To #63 Joe2.0 :

I hope they can do math, because the ONLY reason they’d do that is if they thought the local population could pay the rent to make that “investment” worthwhile..

#182 Blobby on 01.24.15 at 3:15 am

#79 Timmy : If the CDN dollar goes up…

LOL!

#183 Freedom First on 01.24.15 at 4:10 am

Interesting. The Americans, Japanese, Europeans were all served up a RE and economic $$$$$hit sandwich, financially castrating their citizens, while at the same time, and afterwards, Canadians kept on binging on consumer and mortgage debt like pigs at the trough. The world and foreign agencies were warning Canadians of their skyrocketing gluttonous debt on overpriced RE, and all other forms of credit, but were ignored by Canadians. Canadians could see nothing dangerous ahead for them. Stupid is as stupid does. This, is going to get really really ugly and smell just like $$hit.

I am happy, and I like where I am sitting, but I hated watching the world’s citizens sucked into getting their financial screwing, as I am already hating watching the people in Alberta who are getting their financial gonads harshly removed, and it is happening, and right now.

#184 David on 01.24.15 at 4:13 am

The housing bubble has lasted way too long. The party is now over. I found an essay from two years ago that sounds as fresh as if it were written yesterday.

http://canadianawareness.org/2013/01/the-canadian-housing-bubble-has-begun-to-burst/

#185 BigM on 01.24.15 at 4:17 am

@145 CO

TFSA for residents of Canada only, you need to become
a resident again first.

#186 JL on 01.24.15 at 5:18 am

In regards to Prairie Person’s comments.

Garth, as the former Minister of National Revenue, will confirm that the Bank of Canada is INDEPENDENT from the legislature. This is intentional so that central bankers will not let the political and election cycle influence them on decision making. The Bank of Canada’s primary mandate is to keep inflation between 1-3%. As Garth points our we are seeing potential deflation. In that case BY DEFINITION the Bank is supposed to cut rates.

Now in regards to the budget, what is the problem with the Finance Minister simply delaying the budget so they can plan better by having a better sense of what their revenues will be. It’s not like the budget is some major time sensitive thing. The price of oil has crashed, the Federal government derives a huge amount of revenue from the price of oil, so they are delaying the budget to wait until (hopefully) the revenue picture is a little more clear.

WHAT IS WRONG WITH THAT??

#187 JL on 01.24.15 at 5:35 am

Regarding the Calgary market, people really need some perspective, which (at this point) Garth is not providing.

1. When I first got into real estate several years ago there were over 8000 listings on the market. Today there is a little over 4000 AND the city has grown by 100,000. Yes listings are up significantly from last January, however last January was an anomaly and abnormally busy for sales.

Am I bearish about Calgary real estate? Yes, very much so, have been for some time now. However we can be bearish on the market without CHERRY PICKING THE DATA. If we sell 1000 properties this month, (seems likely) then we’ll have 4 months of inventory. That’s still a balanced market, slanted in favour of the seller.

By the way at the end of January when Garth will no doubt post the sales number for this January (which will likely be down 20-30%) from last January, what do you think the chances are that Garth will post the average number of properties sold in each January for the past 6 years? (Hint, that number is 1123) here are the numbers for each year since 2009.
(769, 1184, 1037, 1078, 1233, 1441).

When we sell about 1000 properties this month, that will be 10% below the typical number of properties sold in January over the past several years. However we all know that Garth will point out that it’s approx. a 35% drop from last year.

The 10% drop is significant in of itself. It would just be nice to see some honest analysis.

You realtors are not used to negative numbers, obviously. — Garth

#188 TRT on 01.24.15 at 6:34 am

@Blacksheep,

Mark is clueless. Ignore him. His dollar trade predictions render him incompetent or deceitful.

And you know how the world works better than most on this blog. Just be aware that views on this blog are filtered and are not the mainstream reality view.

#189 Doug in Thailand on 01.24.15 at 8:54 am

So here I am in tropical paradise Koh Tao in Thailand and I’m visiting and commenting on this sad blog. Yes, I know that’s quite pathetic but my excuse is I’m waiting for an overnight ferry. Uncle Garth makes a good point about not having all your investments in Canada, but some are doing well like my CAR.UN REIT. Strange, it’s up to about 28 bucks while it was down to 20and change in 2013. All those people who were selling REITs in 2013, why didn’t they wait until now so they would get a better price?

#190 Ontario's Left Coast on 01.24.15 at 8:58 am

#81 Smoking Man on 01.23.15 at 9:12 pm
One good day then my idiot son thinks he’s a trader..

Lost all discipline. Broke formation. Made the rules up as he went along. Anyway he learned a lesson.
At one point he was down 9k..lucky he’s bet on the long term trend.

This is straight-up gambling, not investing… Sounds to me that your offspring has been ‘schooled’ by an idiot.

#191 Nobleton Bill on 01.24.15 at 9:15 am

***SMOKING MAN***

I dedicate this to you. I guess this is how I picture you when I read your comments.
https://www.youtube.com/watch?v=4TAixFYnDh4

I like your posts btw. cheers

#192 dd on 01.24.15 at 9:30 am

#180 JL The Bank of Canada’s primary mandate is to keep inflation between 1-3%. As Garth points our we are seeing potential deflation. ….

Get those idiot out of setting rates. Inflation at 1-3%? What? My food bill and rent going up while my wage is flat to down is good?

#193 Robert Agnew on 01.24.15 at 9:33 am

Well folks Steve the mail room econonomist Harper and Joe the Undetaker Oliver have no clue. Their party of ONE, neocon tax cuts for the rich and war on science , pseudo eye for an eye Christianity,24 hour election agitpop election campaigns on the government dime with Action Plan ads , boutique tax cuts, and tough as jell0 big brother permanent war campaign on nutbar radicals is getting a little long in the sabre tooth.

Time to bail on sweater guy and try the shiny pony.
The status quo stay the course titanic is not working.
We should have taken our lumps in 2008 – QE means 20years of misery unless USA can lead world out of the mess.

#194 Catalyst on 01.24.15 at 9:49 am

It certainly has been a glorious past 2 weeks for my portfolio. With the shift in currency I am thinking it might be a good time to take some profits but part of me thinks this slide could go to 70 cents as the government seems unwilling to protect our CAD currency.

Can you provide some specific advise for us earning petro dollars and looking to adjust our weightings?

For the discussion with mark (re: commercial lenders) – Commercial banks are not creating money as someone suggested. Mark has it correct that they source their capital from depositors, inter bank lending etc. They come up with a cost of capital and apply their spread. In the commercial space lending is typically prime plus 0-3% or B/A 30/60/90 with 1.5%-2.5% stamping fee. Commercial banks closely look at risks, both qualitative and quantitative and price accordingly. I for one, look forward to the day when the same magnifying lense is used on a retail client applying for a $800K mortgage as a commercial client is today. (It’s much easier for retail)

#195 ALBERTASTROPHE on 01.24.15 at 9:55 am

Everyone still thinks the downside is limited here, and we’ll return to the upside soon.

Wrong. The pain is just beginning.

As Garth wrote:

2. Expect surprises. More are coming.

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/td-expert-tells-canadian-oil-producers-to-brace-for-a-second-shock/article22611335/

#196 I'm from the most racist city in Canada on 01.24.15 at 10:11 am

Only white snow is allowed here. Other precipitation colours, stay away.

https://www.facebook.com/MacleansMagazine/photos/pb.8529948949.-2207520000.1422108556./10152956092513950/?type=1&theater

(Expect to see more shock stories like this in media that cannot rely on the real estate industry for advertising. The dumbing down of our national discourse bodes well for a Harper re-election)

#197 Nobleton Bill on 01.24.15 at 10:21 am

Question: Can anyone vouch for the rates posted on http://www.ratespy.com/

I knew 5yr Variables were around at 2.20%-2.25% but not 2.05%-2.10%

#198 CalgaryRocks on 01.24.15 at 10:23 am

#81 Smoking Man on 01.23.15 at 9:12 pm
One good day then my idiot son thinks he’s a trader..

Lost all discipline. Broke formation. Made the rules up as he went along. Anyway he learned a lesson.
At one point he was down 9k..lucky he’s bet on the long term trend.

Dude! First thing they teach at SwiftTrade is money management!!!

You had to get out at break even (-.14 transaction fee). Losing 1 penny/share (on a trade) was acceptable, losing 2 pennies, you had write an e-mail to your manager telling him what went wrong.

Lose 5 pennies and he’ll automatically send you home. Get sent home for a few days and he’d ask you not to come back.

Yes it’s gambling and it’s better done by algos nowadays. That’s why Swifttrade is no more.

#199 yyc on 01.24.15 at 10:53 am

@186 JL

There has only been 600 sales to date in January in calgary. I don’t think getting another 400 this week is very realistic. Inventory is up at 4500. Creb.com front page.

To your point of cherry picking stats,I never see realtors posting the 5 year trends etc when prices/inventory/listings are going up up up.

#200 Tony on 01.24.15 at 11:21 am

Firstly, the American dollar long is the most crowded trade in existence. At some point in time (like I said before) America will have to tell the truth about unemployment, GDP and corporate profits and or loses. Europe will soon find out QE doesn’t work at all unless you lie about everything like America does. So QE won’t work at all for Europe.

#201 Tony on 01.24.15 at 11:30 am

Re: #186 JL on 01.24.15 at 5:35 am

Better watch this video prices are already down 9 percent year over year in Calgary.

http://www.theglobeandmail.com/life/life-video/video-ctv-calgary-sliding-condo-market/article22571895/

#202 Tony on 01.24.15 at 11:44 am

Re: #169 Longterm on 01.24.15 at 1:44 am

Your parents should have bought strip bonds like I did in 2011. As a side note all the crap you got your parents invested in will leave them begging for spare change on the streets. Good work!!

#203 Daisy Mae on 01.24.15 at 12:00 pm

#92 SWL: “A government without a plan? Perhaps there is plan that the masses don’t know about and things are going according to plan. Ever think of that one”

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

You’re right — Harper does have a plan. The plan benefits only him.

#204 Herb on 01.24.15 at 12:14 pm

#175 Wrinkly,

for how many years have you been unconscious?

#205 Marco on 01.24.15 at 12:17 pm

@186 JL

Isn’t it all about consumer confidence regardless of inventory?

Cheers.

#206 Nomad on 01.24.15 at 12:23 pm

Watch on BNN Max Fawcett (Alberta Oil Magazine).
People in Alberta are realizing that the drop in oil price isn’t a temporary thing. There isn’t a panic in Alberta yet but it sounds like it’s getting there.

http://www.bnn.ca/Video/player.aspx?vid=537376

#207 Raven on 01.24.15 at 12:29 pm

Global Economic Forces Vs Quantatative Easing

What has the world gained by the trillions spent “easing”? Have we fed billions, solved global warming, built massive infrastructure? Na…but we almost have 2 percent inflation!

Are we on the cusp of a truly Global Capitalist Economy?
Na….not till the playing field is leveled, from China to the Hewer Nations, reset is almost upon us. Deflation is the economy telling us we can’t buy our way out of this!

Our Governments are not able to fight the forces of too much debt by supplying more debt. Like a balanced portfolio, structural rebalancing is what is required, with a heavy dose of deleveraging. Interest rate cuts mean nothing if you don’t have a job! The current spread between bank rates and inflation is why traction is so elusive! Lowering the bank rate only narrows this spread and removes another arrow from our arsenal!

Governments view of our economy: if it moves tax it. If it keeps moving regulate it. And if it stops moving, subsidize it!

#208 Marco on 01.24.15 at 12:34 pm

@146 Fuzzy Camel.

Tanking the dollar to make more on a barrel of oil. It will be Interesting to see where the bottom is with oil. Considering the over supply in the market, and how cheap the Saudis, and other middle eastern countries, can produce a barrel and still make a profit.

#209 Cow Man on 01.24.15 at 12:34 pm

Sir Garth:

US economy may be stronger than Canada; but not what we hope. John Deere announced yesterday it is cutting 900 jobs due to week agricultural market. Those jobs would pay a lot more than Target.

https://www.secure.bmoinvestorline.com/ILClientWeb/client/marketToday.do

#210 TurnerNation on 01.24.15 at 12:49 pm

What’s happened around us is all planned. Simulated first using most powerful computers with brilliant minds behind it. No gasps of “How could they!?” please.

We know how the elites feel about us the herd. For a while they openly sterilized “undesirables”. Camps and wars do the same. Today, it’s economic control. Can’t afford to have kids? A de-facto one-child policy is here.

In the same way a few men on horses or collie dogs herd and control a huge number of cattle or sheep we, too, are led. Smaller, higher levels of a pyramid type structural set.

The solution is, a balanced portfolio. The elites need their funding sources and a good panic is simply buying assets for pennies.

I bought a ticket to the Princess Margaret Cancer lottery. I like funding solutions to man-made toxins!?

“A newly published study in Harvard’s The Lancet weighs in on the toxins causing autism and ADHD (attention-deficit hyperactivity disorder). Researchers from the Harvard School of Public Health (HSPH) and the Icahn School of Medicine at Mount Sinai (ISMMS) say that along with these numerous environmental toxins, fluoridated water is adding to the higher incident of both cognitive and behavioral disorders.”

https://www.minds.com/blog/view/365260523635216384/new-harvard-study-says-fluoridated-water-is-causing-cognitive-disorders

#211 Setting the Record Straight on 01.24.15 at 1:00 pm

As long as governments and central banks are supposedly “responsible” for the state of the economy the problems will persist.

#212 Mike T. on 01.24.15 at 1:07 pm

isn’t it nice that gas is (basically) free?
at least psychologically.
at least for me it is.

#209 TurnerNation

favorite quote I’ve seen in a while

the pharmaceutical business exists so society can deny it’s own illness and put the blame on you

no one is cleaning up the water, air, soil….just make excuses for it

ever see where ships go to die?

https://www.youtube.com/watch?v=RaJWVEJ9MSk

#213 TurnerNation on 01.24.15 at 1:22 pm

(I thought we could get though one week with no mention of fiat or fluoride on this blog…)

Business ideas: The Mile Low Club.

Any leads on a surplus submarine? Dive dive…

#214 Nemesis on 01.24.15 at 1:29 pm

“Or, you can believe the government.” – HonGT

#NeverTrustTheManagement,Or… #MattDamon’sTakeOnRealpolitik…

http://youtu.be/VcKVgWYkZa4

#215 Roy on 01.24.15 at 1:31 pm

In the Calgary Herald yesterday

Calgary MLS listings soar while sales plunge
http://calgaryherald.com/business/real-estate/calgary-mls-listings-soar-while-sales-plunge

#216 For those about to flop... on 01.24.15 at 2:14 pm

#66 Retired boomer -wi.
Hey Boomer thanks for trying to answer my question at #6.
Is GDP THE SAME AS CAPITAL MARKET SHARE though?
Also did you catch my NFL joke the other day?
What’s the difference between the New England Patroits and the Bank of Canada?
The New England Patriots know how to let the air out of something slowly!

#217 Hicksville Alberta on 01.24.15 at 2:27 pm

Oilpatch in the field layoffs are all over the place. Ten and twenty year consultants being dismissed like they are training rookies. Like they had never worked there before. “turn in your (field) computer, your gone”…….. just like that. I am getting some good field stories from some good people and there’s lots more to come.
The sense is that this is the immediate type of things happening but things are expected to get much worse.
Once again, i think this will be way worse than the 1980 NEP trashing by miles.

#218 Ralph Cramdown on 01.24.15 at 2:31 pm

#209 TurnerNation — “A newly published study in Harvard’s The Lancet weighs in on …

The gullibility of people who nod their heads sagely at articles such as these, rather than instantly recognizing that Harvard and The Lancet have no relationship, and writing off such news sources as crap?

#219 Obvious Truth on 01.24.15 at 2:43 pm

Oil patch is hooped folks. Penn west used to be a good sized player. A goner. Here come the dominoes. There’s always ecotourism. I have had the privilege of visiting old abandoned coal and gold mining settlements out west. Why not tar sands ghost towns.

Boc modelling $60 oil. Next rate cut because this won’t happen and they know it. Basically set us up for it with that target.

The marginal producer is now alternative. Silicon Valley is dethroning the heads of oil states. The young guns of the USA truly think different. Innovation wins every time. We get to live right beside it and have unending opportunity but most homers just complain.

Sell oil as fast as possible cause in a decade it could be $10 could be the new Middle East mantra. Many have been preparing for it.

All very serious for canada. But they will talk everyone down slowly. Nobody is even talking about the east coast effects. Dollar may be going lower for longer than most think.

#220 Suede on 01.24.15 at 2:56 pm

Be careful with home country bias

Garth says Canadian markets are 4%, this guy says 5% (close enough).

Yet Canadians have 65% of their wealth in Canadian markets.

The Aussies look to be even worse off.

https://twitter.com/MebFaber/status/557280488210333696/photo/1

#221 ALBERTASTROPHE on 01.24.15 at 3:01 pm

Alberta will go to the polls soon. Desperate times call for desperate measures.

http://www.theglobeandmail.com/news/alberta/alberta-premier-prentice-hints-at-snap-election-for-spring/article22616537/

Too bad this province has basically been a fascist backwater of neocon stupidity and economic incompetence for fifty years. Not likely to change, there just is so little cultural and political diversity here to suggest voters might have the brains to take a risk anywhere else.

Prentice will just dress up some numbers and try to pick fights with working people.

That’s how the crash goes in Canada’s dumbest province…….

#222 Porsche on 01.24.15 at 3:12 pm

#169 Longterm

Actually there’s more to it. They sold the house I admit a little to soon but age doesn’t time the market. My sister’s name is also on the bank account so when my parents pass we don’t have to go through all the beneficiary taxes, lawyers, etc..

#223 Blacksheep on 01.24.15 at 3:17 pm

Catalyst #193

“Commercial banks are not creating money as someone suggested. Mark has it correct that they source their capital from depositors, inter bank lending etc.”
————————————————
Prove it.

Show me the source, more credible in the global banking world than the Bank of England? Here is the source, that I am quoting.

Link 2014 BoE doc:

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Your opinion (that’s all it is) 100 % contradicts what the BoE has stated from there website as fact. When this Monetary Analysis was released buy the BoE, it shocked the world in it’s surprising disclosure and was all over the net and economic papers.

Sorry, but the ‘Cats out of the bag’

What the Dogs should remember here is, this is not my opinion. I’m just a stubborn messenger that’s quoting indisputable evidence.

Disclaimer: As I said to Shawn yesterday, now that I have the better understanding of how ‘Commercial Bank Money Creation’ works, I actually see it as pretty smart way to facilitate lending.

So Catalyst, I will assume that you just don’t know better or have yet to read the basic language in the BoE document, so it’s all good.

But we all know Mark, is clearly an economically educated guy. He answers everyone’s question in great detail, usually with out even being directly asked.

So how is possible, that the shining star of class, seems simply incapable of understanding what already been accepted globally as fact, in any economic forum?

I let you guys come to your own conclusions……

Now I’m off to the 2015 Bike Show : ]

#224 Daisy Mae on 01.24.15 at 3:30 pm

#158 Bottoms_Up: “Canadian customer service at it’s best. If you don’t look after your customers, your customers won’t look after you.”

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

Yes. Without consumers, business can’t and won’t exist. Amazing what we can live without, if need be.

Better be nice to us! ;-)

#225 Nemesis on 01.24.15 at 3:33 pm

#SillySaturdayPotPourri… #RalphLives!

#$CDN18MRoomWithAView… #KeepTheChange… [#Warning:NativeAdvertising/BrandedContent]

[G&M] – Vancouver developer shows how to build a tower of luxury

“In the downtown core, there were only 79 $1-million-plus condos sold in 2004; by 2014, that number had grown to 484, according to Landcor Data Corp.”…

http://www.theglobeandmail.com/life/home-and-garden/real-estate/vancouver-developer-shows-how-to-build-a-tower-of-luxury/article22605118/

#NoPrivateToiletForYou!…

[Xinhua] – China restricts government office sizes

…”Officials shall have lounges and private toilets in their offices so far as such offices are not bigger than the above-mentioned standards, but deputies shall not have private toilets, according to the official document.”…

http://news.xinhuanet.com/english/china/2015-01/24/c_133943883.htm

#Shocked!SimplyShocked!… #QuoteOfTheDay…

“We don’t like it when people of that ilk represent us… We all have cards that say we’re Realtors. It should have our pictures.” – Ray Harris, President VREB

[CBC] – Craigslist rental scam: Vancouver real estate agents warn about impersonators

http://www.cbc.ca/news/canada/british-columbia/craigslist-rental-scam-vancouver-real-estate-agents-warn-about-impersonators-1.2930402

#Wonders&Miracles… #ImmaculateConception?!?…

[UK Independent] – Nun gives birth to surprise baby after complaining of stomach pains

…”The nun, who came to Italy from South America, belonged to an order called the Missionary Sisters of the Love of Christ in Macerata, located in the Italian region of Le Marche.”…

http://www.independent.co.uk/news/world/europe/nun-gives-birth-to-surprise-baby-after-complaining-of-stomach-pains-10000320.html

#226 Daisy Mae on 01.24.15 at 3:43 pm

#175 wrinkly: “Well, well, I’m going to vote for Mr Harper. He’s great, steady and managing much better than the others would.”

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

Oh, goody. Harper can depend on at least ONE vote…

#227 Blacksheep on 01.24.15 at 3:48 pm

Ho #150,

“how did banks get into a liquidity crisis if they can simply create money??”
————————————–
The bank alone cannot create money. It is the credit of the customer combined with the charter of the bank, that facilities the creation of funds.

No customer signing for a loan, no new money. I will post something later that helped me rationalize this process.

Gotta love smart phones.

#228 NoName on 01.24.15 at 3:58 pm

cost of raising kids 40% up in last 10yrs.

http://boingboing.net/2011/09/22/cost-of-raising-middle-income-child-in-usa-increases-by-40-in-ten-years.html

#229 Waterloo Resident on 01.24.15 at 4:00 pm

Imagine the Alberta economy with oil at $30 ???

#230 jess on 01.24.15 at 4:35 pm

Perhaps this is the future mr. schiller was referring to

bot narratives

Can an Algorithm Write a Better News Story Than a Human Reporter?

http://singularityhub.com/2014/03/25/more-news-is-being-written-by-robots-than-you-think/

Narrative worked with trained journalists to help the software determine an angle.

story generation system–called an Open Story Generator–that can generate stories in an unknown domain. Our system, Scheherazade, (a) automatically learns a domain model by crowdsourcing a corpus of narrative examples and (b) generates stories by sampling from the space defined by the domain model.
https://research.cc.gatech.edu/eilab/open-story-generation

Robot Journalist Finds New Work on Wall Street
http://www.technologyreview.com/news/533976/robot-journalist-finds-new-work-on-wall-street/
Software that turns data into written text

Trained, Not Programmed

Baxter takes a revolutionary approach to programming, with an entirely manual training process that non-technical, in-house staff can master in very little time. With Baxter, the robot is the interface, with a sophisticated yet simple GUI that empowers employees to train or modify the automation themselves
humans need not apply
https://www.youtube.com/channel/UC2C_jShtL725hvbm1arSV9w

what is your diagnosis dr. watson?

Humans Need Not Apply
https://www.youtube.com/watch?v=7Pq-S557XQU

#231 SWL1976 on 01.24.15 at 4:38 pm

#97 Ken Nash – Its called ‘soft despotism’ look it up and teach your kids about it. The more people are aware of this vice on society the better chance we have of freeing ourselves.

We have been hoodwinked by big government and big business and they have zero intentions of fair play

#232 Obvious Truth on 01.24.15 at 4:50 pm

Coach B should be a central banker.

#233 Oil Is Sticky on 01.24.15 at 4:52 pm

#232 SWL1976 on 01.24.15 at 4:38 pm

We have been hoodwinked by big government and big business and they have zero intentions of fair play

——

I believe that is the definition of Fascism.

#234 Mark on 01.24.15 at 4:57 pm

“Everyone still thinks the downside is limited here, and we’ll return to the upside soon.

Wrong. The pain is just beginning.

2. Expect surprises. More are coming.”

The CAD$ going up a lot as the speculators against it are cleaned out could be this ‘surprise’. Especially as deflation takes hold in Canada and the US is forced to engage in its own measures towards devaluation. USD$ looks way, way overbought at the moment and ripe for a good fall.

Right now the oil producers are being cushioned by the low CAD$ to some extent, but I wouldn’t take it for granted that this can continue indefinitely, even in a reduced oil price environment.

#235 JuliaS on 01.24.15 at 5:06 pm

#215 enzholdings

Zero interest rates are QE.

#236 Setting the Record Straight on 01.24.15 at 5:20 pm

I can understand not voting for Harper. I cannot understand voting for a part time drama teacher or a socialist.

Actually today, I cannot understand voting.

#237 Andrew Woburn on 01.24.15 at 5:26 pm

Chris Cook is a Senior Research Fellow at University College, London. Before that he was Head of Compliance and Market Regulation for the International Petroleum Exchange. He had a front row seat to the financialization of the oil trade. In this article he explains what big money speculators did to oil prices, and why he believes the factors that caused oil price spikes in the past may not be there in future. He also makes a case that Saudi Arabia may have privately pre-sold huge quantities of oil before the price crash and is therefore not under as much pressure as we think.

“Oil crash: is this the end of a long period of inflated prices?”

http://theconversation.com/oil-crash-is-this-the-end-of-a-long-period-of-inflated-prices-36088

In the next article, Chris recounts the history of Goldman Sachs teaming with BP in oil markets. He makes the interesting observation that the Brent Crude market is relatively small in terms of the financial firepower that can now be brought to influence it. He points out that much of the major oil trading is now “off-market” so that published information is not the whole picture. This is a dense read but very informative.

“Oil: the Market is the Manipulation”

http://www.theoildrum.com/node/5606

For me there are two main takeaways from the above:

1. If you are planning to heloc you house to the hilt when oil bottoms because it “has to” shoot back to $100, do a lot more research.

2. If high oil prices were driven in part by financial engineering, a.k.a. “bets”, who is on the wrong side of those bets and how long before we find out? Does this explain some of the edginess we are seeing in central banks?

3. Do we really still have functioning international markets in any of the major asset categories?

4. Sheik Yamani, former Saudi oil minister, to the Guardian newspaper in 2001 in regard to the original Opec 1970’s price hike.

http://www.theguardian.com/business/2001/jan/14/globalrecession.oilandpetrol

‘I am 100 per cent sure that the Americans were behind the increase in the price of oil. The oil companies were in in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.’

‘King Faisal sent me to the Shah of Iran, who said: “Why are you against the increase in the price of oil? That is what they want? Ask Henry Kissinger – he is the one who wants a higher price”.’

Yamani contends that proof of his long-held belief has recently emerged in the minutes of a secret meeting on a Swedish island, where UK and US officials determined to orchestrate a 400 per cent increase in the oil price.

#238 Retired Boomer - WI on 01.24.15 at 5:33 pm

#217 FOR THOSE ABOUT TO FLOP

Yes, caught your joke – great one!

No GDP and “Capital market share aren’t exactly the same. Goldman Sachs has an interesting on-line presentation on capital market share& DEBT

see: goldmansachs.com/…inyeractive-guide-to-capital-markets to find it. Groups regions together to show their “capital market share”

caution: there are BIG numbers-

North America (US & Canada) 18,883 BN

Emerging Markets 11,200 BN

EU 9,732 BN

New Industrial Asia 5,945 BN

Japan 3,638 BN

Australia 1,288 BN

BIG numbers. Interestingly, DEBT is generally 2X for north America, EU, Japan, and the Aussies not so for east asia & emerging markets. I’m sure what that tells me, we like DEBT so, what else is new there?

#239 CalgaryRocks on 01.24.15 at 5:35 pm

#222 ALBERTASTROPHE on 01.24.15 at 3:01 pm
Alberta will go to the polls soon. Desperate times call for desperate measures.

Too bad this province has basically been a fascist backwater of neocon stupidity

..RANT..RANT..RANT

That’s how the crash goes in Canada’s dumbest province…….

If only. But in the past 10 years we’ve had some incompetent tax and spend liberals disguised into what you would call ‘neocons’.

Albertans call them financial conservatives. You know, spend what you got, keep taxes low, don’t go into debt type of guys. Weird people.

In Alberta when we see a leftwing lunatic rage at the incompetence of ‘neocon stupidity’ we know we’re doing the right thing. So rage on.

There are plenty of other provinces in Canada that are run by tax and spend left wingers where you can enjoy low wages, high taxes, unaffordable housing, high unemployment and constant morass.

#240 Washed Up Lawyer on 01.24.15 at 5:39 pm

Retired Boomer – WI

We could sure use some tourism dollars in Alberta this summer. Or have you already “Been there – Done that – Got the T-Shirt”?

Fire up the Caddy, fill the Levis with Ben Franklins, head across the Dakotas to Montana (cheaper petrol), cross into Ab at Sweetgrass, Calgary, Banfffff, Jasper, into BC, down through the Okanagan and back into the welcoming bosom of America in Idaho.

I’ll throw some Ab. beef on the bbq and spring for the Pabst Blue Ribbon (and smokes).

Our economy needs the help.

#241 Habs76-79 on 01.24.15 at 5:42 pm

#225 Daisy Mae

Yes. Without consumers, business can’t and won’t exist. Amazing what we can live without, if need be.

Better be nice to us! ;-)

———————————-

YEP! THAT’S RIGHT!

Quite simply the majority of consumer goods purchased often for all too many of the wrong and or unneeded reasons is high. One may be surprised at the crap that they buy, that they really did/do not need, did/do not really want, nor often did/do not have the money at hand to buy. Most if not all of us have been and may be guilty of such at times.

An anecdote about what one can easily adjust to in not having.

A long while ago back for me (1990’s) I decided to move from the interior of BC back down to the Fraser Valley, but prior to moving I chose to cut my cable service off while I was selling my place. I did think, how might it bother me to lose my then (mid 90’s) 15-16 cable channels to have to throw up a simple antenna to get 2 channels (CBC and CTV)? For about 3 months I only had the 2 channels and guess what? IT WAS JUST FINE! There was little if any issues, I still had on most programmes I liked back in the day. Yes, I lose the sports channels and it left me with a bit of a sports watching gap, but meh I was ok.

I found that I began to do other things, listen to more music, listen to more radio (CBC One), rented a few more movies than typical and I began to read more, magazines and books and yeah I did more things OUTSIDE in my and around my home and life around me as well as with my friends.

I SURVIVED JUST FINE! One will adjust quickly to your loss of non-neccessities.

Biggest lesson learned in my ever maturing adult life is. WHO GIVES A RATS ARSE ABOUT KEEPING UP WITH THE SMITHS AND THE JONES SO TO SPEAK!

Stop being a lemming. No, I’m not advocating going without pleasures in life, but to keep said in perspective as if the pleasures you feel you want cost you more than they may be worth then they will be more of a pain than a pleasure in the end.

If your family or friends judge you badly for not playing the stupid game of keeping up with others, trying to impress others, the silly property ladder game etc. well ask yourself what kind of family members and friends do you have?

Purchase and or add, do things to and for your life for only yourself. Keep the costs in balance to your means and you will be more well stable of mind and generally more satisfied and happy than those you may know who can’t stop playing the I’m a lemming game of being blind, silly, easy to be sold to consumers especially if they do so with mindless use of credit.

#242 Leo Tolstoy on 01.24.15 at 6:13 pm

#228 Blacksheep on 01.24.15 at 3:48 pm

The bank alone cannot create money. It is the credit of the customer combined with the charter of the bank, that facilities the creation of funds.

Blacksheep is correct.

Those who falsely believe otherwise need to cite a source for their misinformation. Don’t work too hard at it. You won’t be able to cite a source anyway.

#243 Andrew Woburn on 01.24.15 at 6:13 pm

#163 Washed Up Lawyer on 01.24.15 at 12:42 am
#152 Andrew Woburn

Thank you for the link to the commercial real estate article. Makes me think about cheap sublet space about to become available in Calgary. I might hang up the shingle again and bone up on the law relating to airplane repos.
==================

How about starting a museum of truck nuts? There should be a flood of US tourists this year.

#244 Funky on 01.24.15 at 6:21 pm

#34 MSM-free zone

Thank you very much Mr. Turner for the forum here and MSM for your great post.

Let’s not forget the “I can’t even get my friends to like me” from Harper himself. Is it any wonder!

#245 TurnerNation on 01.24.15 at 6:27 pm

Cramdown thanks for pointing that out. It’s a vast Leftee conspiracy involving Bilderbergers, aliens, shape shifting reptilians and JFK.
And straw men.

#246 ALBERTASTROPHE on 01.24.15 at 6:31 pm

#239 CalgaryRocks

You are delusional. That’s a big part of what will drag the province down, that kind of attitude and denial.

I am not left wing. I am a Peter Lougheed, Eisenhower kind of conservative. I’ll bet I am to the right of you on most economic measures.

Listen to yourself – you blame government excesses on ‘tax and spend liberals’. Huh?

I cannot stand that common sense prudence has given way to right wing excuse making over 43 years of uninterrupted rule by one party, worse than many dictatorships.

It’s just not healthy for a society or economy to have so little political/cultural diversity.

Alberta has become an echo chamber of people who would be at best politically marginal in a healthier society.

This is what dooms us all. When house values drop by over 50% soon, and the economy plunges and Keystone dies off and we have nothing left, you’ll have lots of time to think about things a little more deeply, not through the kooky lens of neocon doublespeak.

#247 DisgustMadeMePost on 01.24.15 at 6:46 pm

YES!!! To dropping cable … Can’t wait until my Telus subscription ends in a few months… A thousand channels and barely anything worth watching. No thanks! Want the money in my jeans… HATE the $167 bill EVERY month for phone/Internet/cable. More rant rant rant, but holy moly, costs a LOT to run a house.

#248 PTPI on 01.24.15 at 6:51 pm

At least that ‘re agent still has a pot to pis in, soon to lose Audi

#249 CalgaryRocks on 01.24.15 at 7:01 pm

I cannot stand that common sense prudence has given way to right wing excuse making over 43 years of uninterrupted rule by one party, worse than many dictatorships.

It’s just not healthy for a society or economy to have so little political/cultural diversity.

There is a muslim mayor in Calgary that hasn’t met a bike lane he didn’t like. We had Alison running the show (a woman) spending our money like it was her personal bank account.

At the provincial level it would be nice if the other parties would provide solutions other than the ones that have already failed in the other provinces.

Alberta has become an echo chamber of people who would be at best politically marginal in a healthier society.

You would not be able to tell apart the actions of the current provincial PC government from those of any other province.

In a blind test, you would conclude that in fact they act like every other government Canada wide. That is, spend money they don’t have, let the unions take over , raise taxes when inevitably the money runs out.

Easy to hide when the money rolls in but now we see that in fact they did not prudently and ‘conservatively’ manage the province. Simplified, but you get the idea.

This is what dooms us all. When house values drop by over 50% soon, and the economy plunges and Keystone dies off and we have nothing left, you’ll have lots of time to think about things a little more deeply, not through the kooky lens of neocon doublespeak.

I left AB in 2013 and live in NY now, but AB is easily the best province that I have lived in if you’re just an average joe without connections that just wants to work hard, play hard and have something to show for at the end of the day in terms of savings, a nice house (not some shitty condo rental), low taxes, good quality of life, great outdoors etc…

#250 Retired Boomer - WI on 01.24.15 at 7:05 pm

#240 WASHED UP LAWYER

Actually, I have never visited AB nor BC. Quite familiar with the reaches of ON and even a couple of nameless outposts in QB.

That might not be a bad idea, always wanted to tour the Canadian Rockies by car. PBR? You have better domestic beer than that!

My luck by then petrol will have returned to $100 a bbl. It will not stay down too long. Lawmakers should be looking a cutting domestic subsidies for oil, and corn farmers for ethanol, but…

I wish I knew what they were thinking, besides of course, where they are going to get their next campaign donations & support. That’s how we get the BEST politicians money can buy – ’cause it did!

It has been a frustrating week here. Those land on us all at some time, this week was my turn in the barrel.

#251 Irish Stew on 01.24.15 at 7:20 pm

Just used my HELOC to buy (4) properties in Windsor area for rentals…..at low housing rates, rental costs balance my costs for mortgage……and HELOC costs.

Land of Opportunity.

#252 Washed Up Lawyer on 01.24.15 at 7:22 pm

# 243 Andrew Washburn

Re: Truck Nutz Museum

First of all, Garth and Dogs, I apologize for submitting yet another inanity here but I cannot walk anywhere in Ft. McM today. The plus 6 temp and the rain has made walking anywhere highly risky on the skating rink sidewalks. That’s all we need. An early spring breakup.

A truck nutz museum? I have lots of experience with horses and cattle. Do trucks require an anaesthetic? Do they have to be flipped over?

I had lunch with a surface landman working for an oil major this week and he tells me that auction yards in Edmonton and region are so full of heavy equipment that they will not accept any more consignments.

Any canines in the know about this?

#253 Kenchie on 01.24.15 at 7:38 pm

Some light Sunday watching…

“Carney, Kuroda, Coerure discuss the global outlook in Davos”:

http://www.businessweek.com/videos/2015-01-24/carney-coeure-kuroda-discuss-global-outlook-at-davos#r=lr-sr

#254 Longterm on 01.24.15 at 8:07 pm

#201 Tony on 01.24.15 at 11:44 am

So says you with no justification. For the top 1000+ dividend paying paying companies in the world, represented in part of their portfolio via several ETFs, to all go bust and leave them begging for change would mean that everything is buggered. In this case you’ll be able to wipe your arse with those strip bonds.

#255 Smoking Man on 01.24.15 at 8:08 pm

Screw that, new episode of Banshee.. The absolute next best thing to True Detective.

#256 MSM-free Zone on 01.24.15 at 8:22 pm

#34 MSM-free zone on 01.23.15 at 7:41 pm
“…..That was unprecedented……..”
___________________________________

……a few late contributions from other posters:
(a.k.a “50+ Reasons to Leave Your Lover”:)

38. labeled farmer majority vote to keep Canadian Wheat Board as ‘inconsequential’,
39. muzzled Access to Information requests,
40. muzzled his own backbenchers,
41. snubbed first ministers conferences,
42. cancelled parliamentary debate following speech from the throne,
43. gutted Statistics Canada,
44. Chief Statistician Munir Sheikh character assassination,
45. Parliamentary Budget Officer Kevin Page character assassination,
46. Employment Insurance Investigator Sylvie Therrien character assassination,
47. Canadian diplomat Richard Colvin character assassination,
48. MP Irwin Cotler misinformation character assassination,
49. vetoed UN labelling of asbestos as a dangerous material,
50. takes only scripted questions from the media,
51. staged Sun News citizenship dog and pony show,
52. blind-sided by 2008 recession,
53. no economic backup plan,
54. blind-sided by 2015 one-trick resource economy,
55. no economic backup plan

#257 MSM-free Zone on 01.24.15 at 8:26 pm

Oh, yeah. One more…..

56. Garth Turner character assassination.

#258 Canadian in Portland on 01.24.15 at 8:36 pm

157 Grasshopper 604:

I said I don’t know anyone. i clearly did not say “everyone cant.”

#259 waiting on the westcoast on 01.24.15 at 8:38 pm

#253 WUL

RB auctions in Edmonton and Lethbridge are not accepting any more equipment. Lloydminster, SK appears to have room.

The Edmonton auction in the fall was the biggest they had in the region.

#260 Oil Is Sticky on 01.24.15 at 8:40 pm

Welcome to Canada !!

http://grist.org/list/28-cabbage-65-chicken-and-other-insane-food-prices-in-northern-canada-2/

#261 Oil Is Sticky on 01.24.15 at 8:47 pm

#248 DisgustMadeMePost on 01.24.15 at 6:46 pm
YES!!! To dropping cable … Can’t wait until my Telus subscription ends in a few months… A thousand channels and barely anything worth watching. No thanks! Want the money in my jeans… HATE the $167 bill EVERY month for phone/Internet/cable. More rant rant rant, but holy moly, costs a LOT to run a house.

——

We cut the cable a year ago. Got ourselves a wireless Chromecast from Google and now stream the best tv we have ever watched with NO COMMERCIALS from our cell phones/internet to the TV. Technology is a changing !!

#262 Smoking Man on 01.24.15 at 8:56 pm

Guess what dogs..

Apparently the speed of light is not a constant. It’s been slowed down, throws the whole argument of red shift in the shitter…

Like I’ve been telling you dogs for years here, the universe is shrinking.

https://m.youtube.com/watch?a=&feature=youtu.be&v=Sg3lyBUHzy0

#263 Oil Is Sticky on 01.24.15 at 8:57 pm

#246 TurnerNation on 01.24.15 at 6:27 pm
Cramdown thanks for pointing that out. It’s a vast Leftee conspiracy involving Bilderbergers, aliens, shape shifting reptilians and JFK.
And straw men.

——-

I find it funny how people joke about Aliens when there is tons and tons of evidence yet we are all supposed “bend over” for religion of which there is ZERO evidence of any of these “thou shalt” dudes……

#264 slo mo on 01.24.15 at 9:05 pm

cable tv is a joke.

it costs $200 for the best HD antenna

maybe another $200-250 to have someone set it up if you can’t do it yourself.

depending on location in the GTA, you’ll get 18-40 channels in crystal clear HD from Canada and the US.

Windsor up to 50+ channels…

if you can do it yourself, even better.

#265 Washed Up Lawyer on 01.24.15 at 9:07 pm

# 260 Waiting on the Westcoast

Noted. Thanks. I will continue to supply whatever intel I can from the taiga.

#266 Marco on 01.24.15 at 9:14 pm

If house prices fall below HELOC’s, does one have to make up the depreciative difference on resigning?
Doesn’t seem like much of a stretch to suggest HELOC’s may become a problem for homeowners in a falling market with the LTV so high.

#267 bdy sktrn on 01.24.15 at 9:32 pm

#265 slo mo on 01.24.15 at 9:05 pm
cable tv is a joke.

it costs $200 for the best HD antenna…
if you can do it yourself, even better.
———————————
budget version – unbend a paper clip

works just as well if you have decent line of sight to transmitter

#268 bdy sktrn on 01.24.15 at 9:33 pm

at minimum try 7.99 rabbit ears first – good for local stns.

#269 Ed on 01.24.15 at 9:46 pm

An alternate view on home value–when a market is tanked, even the Chinese can’t help:

http://www.bloombergview.com/articles/2015-01-23/housing-weak-even-with-government-programs-and-big-bank-interest

#270 espressobob on 01.24.15 at 10:00 pm

#265 slo mo
#268 bdy sktrn

In the GTA a four bay antenna works best, cost around 40 bucks. Done this for years and put the savings into my TFSA. All those stations in HD along with the substations are more entertaining than the costs of cable.

http://overtheair.saveandreplay.com/OTA_Channels_Toronto_GTA.asp

#271 Mark on 01.24.15 at 10:22 pm

“If house prices fall below HELOC’s, does one have to make up the depreciative difference on resigning?
Doesn’t seem like much of a stretch to suggest HELOC’s may become a problem for homeowners in a falling market with the LTV so high.”

Of course. Actually HELOCs are all “demand” loans, so I would expect, in such instance, for the bankers to be adjusting the terms, ie: the interest rate, upwards substantially on HELOCs likely to be in negative equity even prior to the renewal date.

Of course, borrowers who are in negative equity have no option typically other than to pay the (much) higher rate demanded by the lender.

#272 slo mo on 01.24.15 at 10:25 pm

sure, there are plenty of options, unbent paperclip or rabbit ears… but i’m at least going to want more than a few channels, and they should be reliable.

i have an old Yagi that a friend gave me, very directional, but great distance. you can probably find an old antenna on kijiji for $10-50 depending what it is..

i get 24 channels, solid, all the time. all the big canadian and US networks, plus a bunch that aren’t available on cable (think and grow bright 17-2, grit tv 29-3, bounce tv 23-2, my tv buffalo 49-1/2)

and this is with an old antenna.

i’m sure if i was willing to spend $100, and get a real decent antenna (db4e) that number would get to 34-40 channels for sure.

it’s all a very simple set up.

#273 Smoking Man on 01.24.15 at 10:27 pm

#264 Oil Is Sticky on 01.24.15 at 8:57 pm
#246 TurnerNation on 01.24.15 at 6:27 pm
Cramdown thanks for pointing that out. It’s a vast Leftee conspiracy involving Bilderbergers, aliens, shape shifting reptilians and JFK.
And straw men.

——-

I find it funny how people joke about Aliens when there is tons and tons of evidence yet we are all supposed “bend over” for religion of which there is ZERO evidence of any of these “thou shalt” dudes…….
…………..

Aliens Exist.. 80%of the world population is religious, Hence controlled, it would all break down with full disclosure.. The power base of the shadow government would break down. The Neoconservative would lose the people that keep it in power. Humans are creechers of higher power worshippers.

The link below happend recently. On the international space station it’s live feed camera was shut down the minute a alpha sector 252 was caught on camera. It’s a Rielian ship..

http://www.al.com/opinion/index.ssf/2015/01/holy_ufo_batman_what_is_that_a.html

#274 Blacksheep on 01.24.15 at 10:35 pm

The Bike show was pretty quiet, hopefully the Taboo Sex Show tonight in Van. is more interesting : ]

#275 Joe Schmoe on 01.24.15 at 10:52 pm

I just can’t wait to see what people with assets get pounded in taxes.

Dividend tax credits already gone bye bye…earning a salary equals less tax than getting dividends (from your own company)…Although I suppose this is an EI/CPP grab.

Any thoughts on further increases in taxes on investments? Primary houses? Recreational property as an asset?

#276 Roy on 01.24.15 at 11:07 pm

On the heels of the Target blow up

Tim Hortons Inc planning ‘significant’ layoffs at head offices next week: sources
http://business.financialpost.com/2015/01/23/tim-hortons-inc-planning-significant-layoffs-at-head-offices-next-week-sources/

#277 Canuckinoz on 01.24.15 at 11:08 pm

#184 BigM Thanks! That is what I thought, but my wrinkly father was pushing me to open it before I returned. The last thing I want is the CRA harassing us when we get back.

Although we aren’t back for a few months, thanks to Garth and the rest of you dogs I’ve gotten my husband to commit to renting in the 416. He was all excited about buying his mothers house in Oakville, but I’ve talked him out of it. Hallelujah! We have enough to worry about with two small kids and dog to move across the world. The last thing I need is a monster mortgage and a live in MIL.

#278 kommykim on 01.24.15 at 11:14 pm

RE: #264 Oil Is Sticky on 01.24.15 at 8:57 pm
I find it funny how people joke about Aliens when there is tons and tons of evidence

The known universe is so large that Aliens existing is a given. But due to the sheer number of stars and therefore planets in the universe, it is unlikely that any aliens have found us in the brief time we have been in existence.

#279 Sebee on 01.24.15 at 11:40 pm

Kias recalled due to fire risk. No way we saw that coming!

#280 Snowboid on 01.24.15 at 11:45 pm

#269 bdy sktrn on 01.24.15 at 9:33 pm…

Here in Phoenix there are over 60 OTA channels available, of which 20 or so are broadcast in HD.

With an inside HD capable antenna you can get about 1/3 of those including all the major networks.

The antenna was $ 50 at Costco!

#281 Franco on 01.24.15 at 11:46 pm

People here are so mistaken if they believe house prices will soon fall, especially now that mortgage interest rates will be dropping soon.

#282 hohoho on 01.25.15 at 12:28 am

> … The bank alone cannot create money. It is the credit of the customer combined with the charter of the bank, that facilities the creation of funds.

why do banks take deposits, borrow money or issue shares if they can simply get people to sign and collect interest?

#283 Dadeedum on 01.25.15 at 12:53 am

#279 KommyKin

” it is unlikely that any aliens have found us in the brief time we have been in existence.”

But Canada has been around for over 100 years! ;-)

#284 willworkforpickles on 01.25.15 at 1:01 am

Hey Joe2.0 #63 ….best post ever posted on this blog…bang on with that one, like none other…prophetic even.

#285 willworkforpickles on 01.25.15 at 1:41 am

Rents will be going up ,way up….Vacancies will be way down….with the CAD dollar dropping, wealthy foreigners will be moving in on all the falling real estate in the next few years …. Rent controls will (somewhat) serve those who hold on to their current units ….New renters in the coming years are in for future rent shock…..The average Canadian here now is going to have to adapt to getting by on much less…..Pray for better times….or not.

#286 Kilby on 01.25.15 at 2:03 am

sp on 01.23.15 at 9:06 pm
The BoC is not the government. It is independent.

Ha ha ha ha ha ha……

#287 oceanside on 01.25.15 at 2:07 am

Realtor had an open house in Parksville today, said they had 3 parties from Alberta, 3 from Saskatchewan and 1 from Manitoba. Hardly any listings here and if under $500k are selling very quickly, maybe some Calgarians moving up that retirement sale and move?

#288 Ronaldo on 01.25.15 at 2:31 am

#282 Franco on 01.24.15 at 11:46 pm

”People here are so mistaken if they believe house prices will soon fall, especially now that mortgage interest rates will be dropping soon.”

I guess you haven’t heard that Canada is the 2nd most unaffordable place in the world next to Hong Kong.

When prices get to a point where they are unaffordable at even zero interest, what is going to make them go up further? And what is so great about housing being even more unaffordable? Who will be left to buy? We are at the point now that it does not matter whether rates fall 1/4 or 1/2 percent, they will still be unaffordable. What is it that you don’t understand about that?

#289 justeunperdant on 01.25.15 at 2:44 am

Depending how fast the Canadian dollar will collapse, will determine what will happen to the Canadian interest rate.

If the Canadian dollar were to fall at around 60 cent US, the bank of Canada might have to raise rate to avoid inflation cause by a low dollars.

Brazil interest rate is about 12% because the value of the Brazil currency has collapse and inflation is rampant.

Same with Russian. Stupid move from the bank of Canada. Expect inflation to raise dramatically by mid year and interest rate increasing by the end of the year to save the reputation the Canadian dollars.

#290 @279 Kommykim on 01.25.15 at 3:57 am

RE: #264 Oil Is Sticky on 01.24.15 at 8:57 pm
I find it funny how people joke about Aliens when there is tons and tons of evidence

The known universe is so large that Aliens existing is a given. But due to the sheer number of stars and therefore planets in the universe, it is unlikely that any aliens have found us in the brief time we have been in existence.

–> Thank you for illustrating the intelligence of people posting on this blog. Interest rtes are going to rise sounds almost as bad as what you wrote above.

Advice: First study the Fermi paradox and then acquaint yourself with Quantum Mechanics (especially action at a distance). If you understand this, then you will realize how ignorant your comment is. Its similar to “wait until interest rates rise and houses crash..”

#291 @SmokingMan on 01.25.15 at 4:01 am

Your broken brain is well below understanding ‘aliens’ so refrain from posting about topic if you want to remain at all credible.

Try to figure out why a particle at the subatomic level can
travel from point A to B WITHOUT travelling at any point in between. Try to understand Quantum Mechanics and you will realize that it is the holy grail, not star trek looking aliens.

#292 Happy Renting on 01.25.15 at 4:24 am

#162 Bottoms_Up on 01.24.15 at 12:40 am

#114 Happy Renting on 01.23.15 at 10:20 pm
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So do urban planners and those that approve building permits consider the population explosion and need for more infrastructure, amenities and schools in the area?

It doesn’t seem like it. (I know the links are to stories a few years old, but I’d rather offer that in addition to my observations).

Hospitals downtown overcrowded:

http://www.thestar.com/news/gta/2012/07/22/toronto_ers_feel_weight_of_downtown_condo_boom.html

Toronto District School Board posts notices to condo buyers advising local public schools are over capacity, cannot accept new students:

http://www.torontolife.com/informer/random-stuff-informer/2012/08/09/condo-boom-schools-full/

This article straight up quotes a local trustee who says they advise city planning that local schools are full, but the city approves new condo building anyway:

http://www.cbc.ca/news/canada/toronto/toronto-schools-too-full-for-some-condo-kids-1.1250641

It seems like the transit strategy is to simply dump everyone onto the Yonge line (build condos all along Yonge Street, feed the Eglinton LRT into the Yonge subway line). There are stretches of old track that can only handle subway trains going at reduced speed, so a trip that used to take 15 minutes now takes 20. At rush hour I already wait 2-3 trains before being able to squeeze onto one. Once all those Yonge Street condos are completed and occupied the TTC will be unbearably crowded.

I live in an area with extensive condo development planned or in progress. So far the only nod to the increased population is the promise of an additional grocery store and another liquor store. Oh well, it’s something!

#293 GreaterFoolVancouver on 01.25.15 at 5:08 am

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#294 Moi on 01.25.15 at 8:35 am

Franco, what makes you believe the banks will drop their rates while the oil patch is being decimated?

House prices will fall as people become unemployed. No job, no mtg payment, house goes on the market. Prices fall as sellers compete for fewer and fewer buyers.

There is nothing like fear and layoffs to make one think the old apartment aint so bad. ‘We will rent for another year and see how things are then.’

#295 maxx on 01.25.15 at 9:05 am

“Or, you can believe the government.”

Hahahahahahahaha….one of your funniest Garth!

It would appear that arrogant financial “savoir faire” by the current bunch won’t be doing any credible prancing on the world stage. For a long while.

It doesn’t really matter what mechanism was at play to force the latest retarded move by the cb, it is globally transparent and won’t save any sector whatsoever of this disastrous economy. Not oil, not exports, not re.

What it does is craft a people increasingly better at withholding cash from retail and the real economy. Savers will inevitably reach critical mass the longer this ponzi scheme endures. Better at saving by being far better at spending. The cohort of idiotic wealth-wasting, innumerate retards is shrinking.

Started saving at 15, with my first summer job at the golden arches. Never stopped saving and never will. Call it insurance or risk mitigation against bad government policy.

I felt this one coming- my gut had nagged at me.

Anyone who believes that government is there to protect people is grossly mistaken. It is there to collect tax, preserve the flow of money and ensure that all viable tax-paying units (that would be us) remain in acceptable working order until the age of 65.

Nothing more.

I save therefore I am. ;-)

#296 incubus on 01.25.15 at 10:04 am

Get ready for negative interest rates in the US

http://mises.ca/posts/blog/get-ready-for-negative-interest-rates-in-the-us/

More fabricated crap from the Mises cult. — Garth

#297 Victor V on 01.25.15 at 10:51 am

Investing this way does not mean you have to convert your dollarettes, as there are C$-based securities available.

https://www.vanguardcanada.ca/individual/etfs-detail-overview.htm?portId=9563

Exposure to US economy and an MER of just $0.08%.

No brainer.

#298 Smoking Man on 01.25.15 at 10:54 am

Uncle Sam woke up this morning, while having its coffee just realized..

There is a currency war on, all our talk about spiking rates to prove to the Herd and business that yes, look the economy is good has just destroyed our export market.

We better rethink this..

#299 Smoking Man on 01.25.15 at 11:23 am

As the Greek vote looms. The Fx market opens at 1pm

Got a strong feeling, having a big bet against the Eur. Will be like winning a lottery.. Tic Toc. Come on clock..

#300 Marco on 01.25.15 at 11:35 am

#27 Mark

Thanks for answering my question. I know of people with mortgages that live off their HELOC’s and use them for expensive renos. Renovations costing so much due to labour and material costs. These HELOC’s must be maxed out. They’ve lowered the
LTV from 80+% to 65%. Interesting to see if the banks will lower it again, especially with situations like in the Calgary market. Do you see changes to CMHC right after the election?
Cheers.

#301 Marco on 01.25.15 at 11:41 am

And might I add refinance LTV at 80% maximum.

Example:

Property Value = $400,000

Maximum Refinance limit 80% LTV = $320,000

Maximum HELOC limit 65% LTV = 260,000

#302 zero on 01.25.15 at 11:50 am

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#303 zero on 01.25.15 at 11:52 am

Mises crap?? Why are they already negative in Europe.- Idiot!

They are not in the US, nor will be. That was the assertion of the (crap) article. — Garth

#304 Marco on 01.25.15 at 11:57 am

Just one more question. If a homeowner maxes out their 65% LTV on their HELOC is this figured into the max refinancing? If they were to max out their refinancing + HELOC this figure would be more then the house value. In other words can one get a HELOC and still refinance their house to a combined percentage of the house. value?
Learning.
Cheers.

When you have sucked out all your equity, what do you think? — Garth

#305 Ronaldo on 01.25.15 at 12:07 pm

Great article on paying down your mortgage vs. investing, etc. Recently discussed.

http://www.forbes.com/sites/deborahljacobs/2011/12/18/the-best-investment-advice-i-ever-received/

#306 Incubus on 01.25.15 at 12:27 pm

“More fabricated crap from the Mises cult. — Garth”

Time will tell, but you were wrong about increase in interest in Canada.

Actually I said rates will rise in 2015 in the US, and they will. I expected no change in Canada. — Garth

#307 Daisy Mae on 01.25.15 at 12:33 pm

#302 MARCO: To answer your question…very risky!

QUOTE: “…Because the underlying collateral of a home equity line of credit is the home, failure to repay the loan or meet loan requirements may result in foreclosure…”

#308 Juanito on 01.25.15 at 12:33 pm

#250 CalgaryRocks

—————————

That was a well put, unbiased and thoughtful post. Unfortunately there are some can-hate-ians that live such miserable lives that seem to only find satisfaction in spreading pessimism via the web. Meanwhile, the lucky folks will still find ways to live within their means (even with $40 oil), get outdoors, ski, hike, boat, quad, sled, fish, hunt, climb, or whatever else they can do here, enjoy life, find ways to SUPPORT the government, whichever one it is and thereby avoid a pitiful life accented with disappointment.

#309 Daisy Mae on 01.25.15 at 12:39 pm

#306 MARCO: “If a homeowner maxes out their 65% LTV on their HELOC is this figured into the max refinancing?”

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

A HELOC is just as disastrous as a Reverse Mortgage. People don’t think.

#310 Bottoms_Up on 01.25.15 at 1:01 pm

#294 Happy Renting on 01.25.15 at 4:24 am
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That’s atrocious. Sounds like shortly there will be a rude awakening.

#311 Vancouver coastal on 01.25.15 at 1:18 pm

Garth maybe you could comment on the current situation of global monetary policy and how it’s diverging away from the US Feds goals , how will the US be the only one tightening ? What implications will this have on USD/CDN dollar and US treasury yields aka bond market?

It appears the global monetary easing edfort is breaking apart… Hard to see how yellen can tighten when everyone else is easing with out importing deflation the USA

#312 BigM on 01.25.15 at 1:56 pm

Looks like Syriza is going to win the Greek elections.
If I had any cahones, I would short the Euro short term.
But the EU won’t let Greece leave, it has too much invested now.

#313 slick on 01.25.15 at 8:48 pm

Me thinks harpers budget delay is either to roll out some QE, or drop a writ for an election