Sheeple

DROWNING IN DEBT modified modified

When I was in Ottawa the last time as an MP, sitting in the government lounge behind the green curtains to the right of the Honourable Speaker’s chair in the House of Commons, I first heard the expression.

“Wonder what the sheeple are thinking?” Seems to me it was John Baird who uttered the words. I don’t recall the issue of the day, but I was struck by the word. Sheeple. He meant citizens. Voters. The manipulated.

I thought of that on the weekend when I read a comment posted on this pathetic bog by an insurance guy from Ontario. “People here are so mistaken if they believe house prices will soon fall,” he wrote, “especially now that mortgage interest rates will be dropping soon.”

This is exactly what the feds (including Mr. Baird) and the Bank of Canada want the sheeple to believe. And a lot have already fallen for it, with a torrent of calls last week to real estate agents in Toronto and Vancouver. On CBC’s suppertime TV show Saturday night a woman with babe in arms said to a reporter: “It’s great they’re putting the interest rates down because we just bought a new house last month and we’re going to sell ours next week.”

Since the wheels came off the economy in 2008, this has been the government’s primary strategy – make money so cheap it’s irresistible. Then tell people things are getting better. The sheeple will respond. They will borrow to excess and spend beyond their means. So the economy will get better.

Only it didn’t. So, the manipulators have done it again, now that the oil price shock guarantees incomes in Canada will be softening, along with our overall fortunes. If the herd was that gullible the first time, they’re saying in the government lounge, it’s a sure thing it’ll happen again.

Of course, it’s not 2008 anymore. Seven years later we have houses that are far more unaffordable, an epic new level of personal and household debt, less economic growth and now the prospect of collapse in our key export industry. So it’s simply astounding what one quarter-point nip in the Bank of Canada rate can do – especially when (so far) it means not a single mortgage or line of credit payment is cheaper than it was two weeks ago.

Let’s talk about oil and real estate. And deflation. As I’ve been yammering on about for well over a year here, this is the beast you should most fear, not the absurd idea you’ll be priced out of the real estate market forever. If what’s happening in Alberta and elsewhere is an indication, real estate could end up being the black swan few expected to swoop in.

As this week begins, year/year sales are down 33% in Calgary and listings are up 79%. Last year at this time there were 2,400 properties for sale, and now there are 4,400. That may not be a big deal historically, but the rapidity of this buildup has been breathtaking. It correlates perfectly with the job losses and employment insecurity now sweeping the region. But this is not just a Calgary story, since this misery is expected to crash economic growth in all of Canada in 2015, send governments spiraling into deficit and has already nuked the dollar, sending the cost of a new Harley up 20%. The agony.

Here’s what Cowtown permabull realtor Mike Fotiou writes on his blog: “At this pace, month-end inventory will cross north of the 5,000 mark, making it the 3rd highest January level since 2006.    High inventory, low sales: too early to expect the benchmark price to be affected significantly this month but if this market imbalance persists, we’ll see price deflation.”

Of course we will. And things, says a TD economist, are destined to get worse.

According to Dina Ignjatovic, oil (now at $45), will drop to around forty bucks on average for the first half of 2015, then achieve only $53 by the final months of the year. This is low enough to roundly spank the oil sands industry, as demand for crude stays tepid while supplies pile up. (US oil inventories are at an 80-year peak.)

Officially, Calgary realtors are not ceding to reality. “People outside of our province have a much different perspective than Calgarians do. They think the sky is falling,” the president-elect of the Calgary Real Estate Board told the Toronto Star. “Don’t get me wrong, there is a lot of concern here. But people in Alberta have seen this movie before. I think they are a bit more level-headed in reacting to this.”

Well, the thousands of families rushing to the exits right now suggest otherwise. But we’ll see. Perhaps like the gullible in Ontario, Albertans will believe a small rate drop (that does not benefit them) will compensate for paying too much for housing while taking on massive debt, in a world bordering on deflationary contraction.

If so, the dudes behind the Commons curtains are geniuses.

Fleeced again.

315 comments ↓

#1 BlackDog on 01.25.15 at 1:27 pm

Didn’t you use that same picture before on another blog entry?

Actually it was another drowning person. You can never be reminded too often. — Garth

#2 Oil Is Sticky on 01.25.15 at 1:39 pm

Funny you mention Mr Baird. I don’t think it’s a stretch to say that he and Mr Harper compete for the “which Con in power do we hate the most” award.

#3 Here's the deal... on 01.25.15 at 1:42 pm

When you can’t bank on the banks…

Sooner or later the indebted will not be able to keep their heads above water…

The credit lines become exhausted…

Cash advances from credit cards will no longer be available to pay the monthly bills of other credit cards…

Cars will break down and there will be no money or credit available to fix them…

Property tax and utility bills arrive like clockwork and there is no money or credit available to pay them…

Mortgage renewals come up and there is less chance of requalifying…

Oh to belong to the “163% Club”…

What every Canadian should not want to aspire to…

#4 waiting on the westcoast on 01.25.15 at 1:53 pm

It has taken a few days for the shock to go through my system but I am ready to start some serious revised scenario planning.

I had believed that the TPTB would not let the dollar sink too far and therefore would be raising rates alongside the US. I guess I was wrong on us taking our medicine. Instead we going to take a few shots of JD or tequila so we can feel something far worse tomorrow… But will tomorrow ever come.

I am lucky that most of my income assets are US based but this strategy is all wrong for Canada. It’s a race for the bottom and it looks like our government is looking to win.

#5 Renter's Revenge! on 01.25.15 at 1:57 pm

“Didn’t you use that same picture before on another blog entry?

Actually it was another drowning person. You can never be reminded too often. — Garth”

As a testament to the effectiveness of this blog, some of us have had these images burned into our minds for eternity.

#6 EarlySpring on 01.25.15 at 2:01 pm

Hahaha that picture is awesome!!!! Laughed so hard I reinjured my neck.

#7 T.O. Bubble Boy on 01.25.15 at 2:03 pm

yup… in case you forgot: it’s always a good time to buy!

#8 Oil Is Sticky on 01.25.15 at 2:06 pm

#280 kommykim on 01.24.15 at 11:14 pm
RE: #264 Oil Is Sticky on 01.24.15 at 8:57 pm
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.

——-

I really hope you are joking. There is so much evidence it’s unbelieveable. There was no Steven Spielberg or George Lucas when people were drawing pics of ufos and people in space suits on walls thousands of years ago. People drew what they say. Its all over the bible. Old old paintings. And then of course there is all the video evidence. You cannot possibly believe that 100% of everything is “photoshopped”. I’ve been to Central and South America many times. They talk about it openly like who won the game last night. But as usual…..John Baird’s Sheeple……are brainwashed by the govt and media. Hell NASA itself says at Mission Control “We are tracking the ALIEN spacecraft”. I’m sure they did not invent this and put it on youtube just so they could mess with us so to speak.

https://www.youtube.com/watch?v=WlLN_Jcg1pc

https://www.youtube.com/watch?v=X-RPWhigpQg&src_vid=WlLN_Jcg1pc&feature=iv&annotation_id=annotation_194423

#9 seahawks on 01.25.15 at 2:06 pm

You sound more like a metal head every day hahahhaha

#10 Nemesis on 01.25.15 at 2:07 pm

#NoAnimalsWereHarmed… #AlthoughOneBorderCollie… #WasAnnoyed…

http://youtu.be/q1nHNtZ148I

#11 Boomers and trucks: suck. on 01.25.15 at 2:10 pm

Is that photo from Nova Scotia, the Canadian Capital of tubbies?

#12 Obvious Truth on 01.25.15 at 2:15 pm

We may need our own syriza type party soon in Canada. Perhaps an honesty without the communist or manipulative slant. People may soon get tired of the new boss same as the old boss baloney.

Maybe we could crowd fund a group of dogs across the country.

Online party of Canada. An idea whose time has come.

#13 Joseph R. on 01.25.15 at 2:20 pm

Didn’t you use that same picture before on another blog entry?

Actually it was another drowning person. You can never be reminded too often. — Garth

However, some aren’t as joyful in doing that task:

http://weknowmemes.com/wp-content/uploads/2011/10/hitman-monkey-finds-no-joy-in-his-job.jpg

#14 bob on 01.25.15 at 2:26 pm

What we learned in 2008 was that the government will help those in-debted at the expense of savers. I would like to think I’m not a sheeple, but those are the people who benefit the most, as is the job of the government.

On a related note – I think you should advocate in a new blog — tax consumption instead of income. I’m still bitter about the HST referendum here in BC.

#15 Slow Canada on 01.25.15 at 2:34 pm

And what, exactly, is the point of this manipulation? Where does it lead you?

That is what I don’t understand. It seems to me that our leaders would be far better off respecting people’s intelligence and trying to do the best thing for the country. As you do, Mr. Turner.

I think it’s all about gaining, and retaining, power. — Garth

#16 John Prine on 01.25.15 at 2:37 pm

– especially when (so far) it means not a single mortgage or line of credit payment is cheaper than it was two weeks ago.

Just got an e-mail from one of our credit unions saying that they are lowering their line of credit and mortgages by 1/4%

Let’s see if any banks follow suit. As mentioned previously, this would still not mean a reduction in any mortgage payments, even VRMs. – Garth

#17 Mark on 01.25.15 at 2:37 pm

“Do you see changes to CMHC right after the election?”

I don’t know about the timing, but I am fairly certain that the CMHC will continue the process of tightening. Especially as hits against its capital occur, and it feels the desire to at least attempt to be a viable/solvent organization over the long run.

Just as CMHC and the politicians were all so eager to loosen subprime credit as the housing market inflated, they will be quite eager to tighten as the opposite continues to occur.

#18 kilby on 01.25.15 at 2:40 pm

Here’s what Cowtown permabull realtor Mike Fotiou writes on his blog: “At this pace, month-end inventory will cross north of the 5,000 mark, making it the 3rd highest January level since 2006. High inventory, low sales: too early to expect the benchmark price to be affected significantly this month but if this market imbalance persists, we’ll see price deflation.”
___________________________________________
Seems like a good percentage of Calgarians are in Parksville and Qualicum Beach looking at $350k to $450k homes and there isn’t much on the market right now.

#19 FerrisWheel on 01.25.15 at 2:43 pm

Garth,

You were more than certain that we would see interest rates hike here and in the US. How did you get it wrong?

I expected no change here and an increase in the US in 2015. The latter is still on track. — Garth

#20 CPG on 01.25.15 at 2:46 pm

“The market today is Wile E. Coyote wearing his latest purchase from the Acme Company – a miraculous bat-wing costume that prevents the usual plunge into the canyon below by sheer dint of will. There’s absolutely nothing internal to Coyote or his bat suit that prevents him from flying around happily forever. It’s only that rock wall that’s about to come into the frame that will change Coyote’s world.”

http://www.marketoracle.co.uk/Article49103.html

The following link is to a 1 minute and 1 second youtube video of Wile E. Coyote’s experiences with his batman’s outfit:

http://m.youtube.com/watch?v=VEFmFMeXV3E

#21 Nemesis on 01.25.15 at 2:50 pm

#LightsOutLondon… #WhiskeyRebellionRedux… #”Baaa”…

[UK Guardian] – ‘It’s like a ghost town’: lights go out as foreign owners desert London homes: Absentee owners and the ‘buy to leave’ market are hurting businesses as housing rises up the political agenda in the capital

…”Racine is the latest victim of what some have called “lights-out London” where absentee owners push up property prices without contributing to the local economy. When Racine opened in 2002 the average price of a Knightsbridge home was £745,000; now it is £3.4m. There are an estimated 22,000 empty properties in London, partly a consequence of the city’s status as what the novelist William Gibson has called “the natural home of a sometimes slightly dodgy flight capital”. As Racine’s story shows, some businesses are feeling the effects.”…

http://www.theguardian.com/uk-news/2015/jan/25/its-like-a-ghost-town-lights-go-out-as-foreign-owners-desert-london-homes

[UK Telegraph] – Whisky crisis means drinkers may soon struggle to find a decent Scotch: Distillers say they are being ‘clobbered’ by duties and are looking to increase their exports instead of growing in Britain

…”On every bottle of whisky sold, an average of 78pc of the price is paid in tax.”…

http://www.telegraph.co.uk/finance/festival-of-business/11365440/Whisky-crisis-means-drinkers-may-soon-struggle-to-find-a-decent-Scotch.html

#22 Tony on 01.25.15 at 2:52 pm

Real estate prices are already said to be down nine percent year over year in Calgary. From January 2014 to January 2015.

Source:

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

#23 rosie "moving forward" in the knowledge that, "this won't end well" on 01.25.15 at 2:55 pm

Rather long but interesting. Might require torches and pitchforks to happen though. The charts show Australia and Canada doing well, relative to other 1st world societies, mind you an update seems to be in the works.

https://cdn.americanprogress.org/wp-content/uploads/2015/01/IPC-PDF-full.pdf

#24 Tony on 01.25.15 at 2:58 pm

Re: #19 FerrisWheel on 01.25.15 at 2:43 pm

I was one of the few that got it right at least in Canada. I also predicted TLT would hit 140 last year. I was close but it’s closing in on the 140 mark which will probably mean an interest rate cut by the FED in America this year.

#25 kommykim on 01.25.15 at 3:00 pm

RE: #8 Oil Is Sticky on 01.25.15 at 2:06 pm
#280 kommykim on 01.24.15 at 11:14 pm
RE: #264 Oil Is Sticky on 01.24.15 at 8:57 pm
——-
I really hope you are joking. There is so much evidence it’s unbelieveable.

There is a lot of “evidence” of something but most of it is blurry video and photos. You are aware what the term UFO means right?

https://www.youtube.com/watch?v=WlLN_Jcg1pc
https://www.youtube.com/watch?v=X-RPWhigpQg&src_vid=WlLN_Jcg1pc&feature=iv&annotation_id=annotation_194423

I’ve watched your videos. Not all of it though, but about 50%. The BSG sound track got my heart racing so much that I had to stop.
So, since I watched 10 minutes of your videos, please watch about 5 minutes of the one below. Start at the 1 minute mark to save time if you want. Puny humans think their planet is special and requires 15% of the video run time:
http://youtu.be/17jymDn0W6U
Space is vast. Earth is puny. There is so much more interesting RE out there for the Aliens to explore before they visit our little backwater world.

#26 Matt k on 01.25.15 at 3:00 pm

Sounds like sooner or later QE is coming to Canada

#27 Visitor Number 9 on 01.25.15 at 3:03 pm

I come to this blog for the pictures, but I stay for the fun.

#28 takla on 01.25.15 at 3:12 pm

Pic Lesson here….never take the house horny wife out for a swim after buying at the peak.

#29 JP on 01.25.15 at 3:13 pm

Remember the sales you see in the month of January are most likely people who have no option but to buy because they already signed the offer in December and paid fat deposits. February should be very interesting for Calgary real estate market.

#30 Boomers and trucks: suck. on 01.25.15 at 3:19 pm

What we all should remember, is that changing mass perception/brainwashing to suite an agreed upon agenda is performed by mixing majority truth with a small amount of lies.

This is something for all to consider and keep in mind when reading this and other blogs.

A publicly available list of current Canadian freemason members would be eye opening and very valuable in discerning the gatekeepers from good intentions.

#31 Saskatoon-Living on 01.25.15 at 3:22 pm

Listings are up 25% from a year ago in S’toon, and doesn’t look like that trend is gonna stop anytime soon. I recall u mentioning deflation Garth, but you’ve been flip flopping back and forth. You called for rates to rise all last year and look where the 10yr is. Fail.

#32 Rob on 01.25.15 at 3:38 pm

I’ve never been so bearish on Canada!

#33 Daisy Mae on 01.25.15 at 3:48 pm

“Since the wheels came off the economy in 2008, this has been the government’s primary strategy – make money so cheap it’s irresistible. Then tell people things are getting better. The sheeple will respond. They will borrow to excess and spend beyond their means. So the economy will get better.

Only it didn’t….”

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

“Only it didn’t.” So, how smart are the feds….really? Sure, they’ve hoodwinked the young naive and the plain stupid. So what?

There’s plenty of ‘stupid’ to go around — just observe the present government in action.

And now, watch the indebtedness of Canadians worsen.

Yep, real smart handling of the ‘sheeple’….

#34 kothar on 01.25.15 at 3:59 pm

Mark many people do not believe your currency calls. Perhaps your call regarding Cad vs any other currency than Usd may be true fundamentally. But the Usd is the world reserve currency in which all things are priced.

#35 BlackDog on 01.25.15 at 4:08 pm

@Garth, re: #1, You mean she drowned the first guy?

#36 vatodeth on 01.25.15 at 4:10 pm

Don’t worry! Harper says there is more to the Canadian economy than just oil!

Unfortunately the only thing that has really been going on with the Canadian economy since 2008, has been housing and mountain of personal debt to finance it. Manufacturing has gone downhill, due to the high valuation of the dollar against the USD. The Canadian dollar will continue to go down, but it will be years before the USA ramps up manufacturing in Ontario again.

Main Goal: Stay Employed

#37 BlackDog on 01.25.15 at 4:11 pm

@Visitor Number 9, re: #27, Well you know what they say, ‘More fun to the ton.’

#38 Smoking Man on 01.25.15 at 4:13 pm

Ha, Big Baird calls us sheeple.
At leased we’re not a Natanahu lap dog.

Baird realy good at sending young Canadians to fight for offshore interests, I know his type.. Talk the big talk.

If he was ever on the front line he would crap his paints, Cry for his mommy.

All these chicken hawks are the same.

I’m still voting for the party. I hate communists a bit more than I hate Neo cons.

#39 Boombust on 01.25.15 at 4:18 pm

How will the recent election results affect things in the Euro Zone and elsewhere?

#40 Boombust on 01.25.15 at 4:18 pm

…in GREECE…

#41 Marco on 01.25.15 at 4:21 pm

Pawnshop mortgage broker:

“Gerstel, the cash-for-jewellery dealer, is expanding his mortgage business after getting his brokerage license in December. He said he plans to provide thousands of loans under the name “Harold the Mortgage Closer.”

http://business.financialpost.com/2015/01/22/shadow-lenders-fuel-risk-in-canadas-hot-housing-market/

Wow.

#42 Smoking Man on 01.25.15 at 4:25 pm

25 kommykim on 01.25.15 at 3:00 pm
Space is vast. Earth is puny. There is so much more interesting RE out there for the Aliens to explore before they visit our little backwater world.
……..

Your wrong, earthlings are a demented spices.. We watch atrocities around the globe, human on human destruction.

Humanity very close to developing interstellar space travel technology.

Reverse engineering of some downed craft..

We are here watching.. We’re not letting you animals off this planet till you mature a bit more..

#43 For those about to flop... on 01.25.15 at 4:29 pm

Isn’t it time we change the rules about how long one person can be Prime Minister .
Along the lines of the 8 year max in the States?

#44 Sheeple | Realties.ca on 01.25.15 at 4:31 pm

[…] Source: http://www.greaterfool.ca/2015/01/25/sheeple/ […]

#45 1drs on 01.25.15 at 4:31 pm

The point of the 1/4% drop in the BoC rate is to save the election win for the CPC. They “saved” the economy once this way and they hope to fool the sheeple one more time. Garth,your predictions would be correct but you fail to take into account Stevies “power at any cost “philosophy. Many of the dogs have seen this in action and talked about it here. The sad part is that there are so many sheeple that they may win yet. This may be the worst government this country has ever seen, but , it may become worse. This country does not have a surplus in its budget. Its military bases sit idle because there is no money to maintain anything.With the oil price drop you know the deficit is going to be massive and they won’t produce a budget because no one will believe the lies they need to tell to sell it as a “surplus”. I think they may even call a snap election without a budget because , with a budget they stand no chance.Is there anyone out there that can save this country? I don’t think so. We will suffer for the sins of the CPC till our debts are paid. I just hope the sheeple remember this longer than they remembered the legacy of Mulrooney.

#46 TurnerNation on 01.25.15 at 4:31 pm

Until H gets re-elected we will be seeing more newz reports like the one breathlessly claiming a small Quebec town’s websites were possibly hacked by “islamists”. Omg omg now grandma Mabel cannot check her bridge scores online. Why do they hate our freedom so. Yet not even a firecracker set off in our malls. About what I’d expect from a “sophisticated international group” who are they du jour… Al someone or Is-no-good? I’d guess 80% of international newz is fabricated for our consumption.
My new water filters must be working. ..

#47 Smoking Man on 01.25.15 at 4:37 pm

I expected no change here and an increase in the US in 2015. The latter is still on track. — Garth

I aggreed with you up until today, look who’s winning in Greece..

Bye bye, Euro dollar….

Now your an airline, you got a choice between Boeing and Airbus.

Well before the USA rate hike. And after today. airbus all of a sudden cheaper. After a rate hike.. It’s going to be Airbus all the way.. boeing who..

Dogs a wee tip.. Bombardier is cheap… Load up. C- series a remarkable wee plane.

#48 David McDonald on 01.25.15 at 4:40 pm

Following Garth’s advice I am heavily US weighted and so far so good. However clearly I am not the only one worried what the ultimate effect of QE may be. Bill White is a very good economist and he is worried: http://www.williamwhite.ca/
I think I will sell in May and go away.

#49 Entrepreneur on 01.25.15 at 4:49 pm

As my Dad would say “You can lead a horse to water but you can’t make him drink.” You have spread the word out, over and over, but this time is different.

I think people are wondering why lower and not higher rates like the realtor said “buy now before the interest rates go higher.” MMMMMmmmmm…what is really going on? Unaffordable debt, rising house prices, job insecurities with less money with higher priced bills.

Long-term debt/credit housing game is not the way to run an economy.

#50 Sue on 01.25.15 at 4:50 pm

Yes, that’s why I read your blog; I read “Sheeple”.

The thing is, the really bad thing is, that the political elites have actually got a pretty good understanding of the psychology of most people. They appeal to our greed, and foolishness; our minimal attention spans; our lack of long-range planning and our love of gambling – not to mention bribing us with our own money.

That’s it, isn’t it? The vampire squid wrapped around humanity’s face sucking with it’s blood funnel isn’t just Goldman Sachs, it’s us.

#51 Guy on 01.25.15 at 4:59 pm

I have long thought that the politicians consider us sheeple. The unfortunate thing about this is that the politicians will lead us into economic collapse. What ever happened to ethics and social conscience? Talk about taking advantage of peoples trust in our elected officials!

#52 Albertarded on 01.25.15 at 4:59 pm

To all Canadians,

Please forgive us for pushing the country over the real estate cliff. We’ll be first to go but you’ll all be following us very soon.

And to the Norwegians, who have had a similar oil resource and built it into a huge cash reserve while our right wing nutbar politicians have incompetently squandered ours, enjoy the laughs at our expense. Our hockey teams are still better than yours and we have the City of Champions.

(..er…maybe scratch that last bit…)

#53 Fuzzy Camel on 01.25.15 at 5:00 pm

Sheeple have done pretty damn good the last two decades. Buy a house with hardly any money, borrow to the max. Many of them now have houses worth 300% what they borrowed.

Only thing going to stop this party is interest rate hikes or government austerity. Until then, 5% down and the easiest money you will ever make.

If the Fed ups interest rates 1%, well that will be the end of it all so keep that in mind.

#54 Herf on 01.25.15 at 5:03 pm

Coincidentally, here’s a blurb I stumbled across a few minutes ago on another blog that describes the author’s observations of the latest happenings in the U.S. housing:

http://www.againstcronycapitalism.org/2015/01/the-house-rich-movement-and-the-woe-of-aftermath/

The follow-on linked article (embedded link from Bloomberg at the end of the above article) painted a less than upbeat future for U.S. housing.

#55 TurnerNation on 01.25.15 at 5:04 pm

The unspoken motto of our regime and military junta leaders is, Hate us but Fear us.
As I said I am trusting of good and evil, equally so.
Each does exactly as promised. It’s easy. Get to know their moves. It’s in all of us. Your choice.

#56 dosouth on 01.25.15 at 5:05 pm

#18 kilby on 01.25.15 at 2:40 pm
…………………..”Seems like a good percentage of Calgarians are in Parksville and Qualicum Beach looking at $350k to $450k homes and there isn’t much on the market right now.”

——————————————-

More like the cost of building lots in the Parksville/Qualicum area. Might get a patio home in a park for those prices you quote. Not saying prices won’t fall but not to those levels while boomers keep hoping to make a killing on their perceived land and home values. Just sayin”…..

#57 pinstripe on 01.25.15 at 5:06 pm

IMO, since 911 the political drive was promoted for the sheeple to buy, buy, buy. the plan is on track.

There is more money injected into the economy by the borrowers buying whatever they want, whereas the savers are buying only what they need. The savers have absolutely no political clout, whereas the borrowers hold debt as their power base. The financial istitutions are doing ok with that.

Interest rates have a lot of room to go down (.75%). the sheeple expect this to happen and the money printing press will continue to fill the void. The elected officials have no choice.

A borrower able to pay the monthly minimum of the loan is living within their means. declaring bankruptcy and starting over again is a fall back position. Many 1% use this formula.

where I live in north central alberta, many listings were taken off the market and relisted at double the price for this new rush in real estate.

renters and money savers are screwed.

#58 Vancouver coastal on 01.25.15 at 5:07 pm

#26 Matt k on 01.25.15 at 3:00 pm

Sounds like sooner or later QE is coming to Canada
—————————–
You got it , QE 4 in the USA…or at least no rate increase in 2015 or 2016 , world is drowning and the US can’t keep it afloat on McJobs and 50 million on food stamps

#59 Mike on 01.25.15 at 5:08 pm

I think that when talking about housing, each blogger should make a distinction between 80% of Canada and 20% that make up the Toronto and Vancouver housing markets.

Come to think of it – kind of sounds like that 80/20 rule that never fails.

When it comes to freeholds, the 20% of the market (Toronto + Vancouver) will see prices continuing to rise regardless, with the remaining 80% of the Canadian market stagnating and even decreasing – regardless of how low interest rates go. From what I can tell, the majority of bloggers really care about these two markets anyway, and quite frankly wouldn’t consider living anywhere else. When it comes to the 416, here is why:

– Job opportunities (not the greatest at this time) but still far better variety than 1or 2 -industry towns
– Somewhat functioning public transportation, which allows people to save a few hours/day in dreaded commutes. Allows for huge savings in time and money. Plus, sharing economy is already picking up pace here.
– Universities, restaurants, plenty to do an see
– Guess where people will flock to now that oil is in the 40’s?

Bottom line: Rents to go up, freeholds to go up, condos near the subway/universities/key areas to go up, condos not near these areas – perhaps smaller increases in price, any condos build before 2000 – to keep stagnating and potentially decrease in price.

Don’t be surprised if we see another 0.25 cut or two before the above starts to materialize. Of course, by then, a small cup of coffee may also run you $4.00, so it’s all relative.

#60 BigM on 01.25.15 at 5:10 pm

@12OT We may need our own syriza type party soon in Canada. Perhaps an honesty without the communist or manipulative slant.

You must be kidding.

Syriza’s ‘pillars’ include writing off over half of the Greek debt, and addressing the ‘humanitarian crisis’, which means lots of gov’t spending. Oh and stay in the Euro and ask for more money.

No one in the EU is going to buy this huge pack of lies that they put forth, but the Greek people did;
they are they real sheeple, and they are going to be in for a big shock.

#61 Herf on 01.25.15 at 5:12 pm

#20 CPG

Don’t buy a batman suit made in China.

#62 Herf on 01.25.15 at 5:16 pm

#20 CPG

Don’t buy a batman suit made in China.

Or from the Acme Aerospace Company.

#63 Jimmyboy on 01.25.15 at 5:18 pm

DELETED

#64 EvilMagpie on 01.25.15 at 5:22 pm

There’s one school of thought that $50 is now the ceiling for oil prices, and not the floor; in the period of 1986 to 1998, oil was generally trading in the $20 to $50 range, adjusted for inflation.
http://www.project-syndicate.org/commentary/oil-prices-ceiling-and-floor-by-anatole-kaletsky-2015-01
I wonder if this is the “hidden” information the BoC took into consideration?

#65 Olive on 01.25.15 at 5:23 pm

What affect does the 0.25% BOC rate cut have if it doesn’t influence LOC’s and mortgage payments?

Sheeplenomics. — Garth

#66 Setting the Record Straight on 01.25.15 at 5:29 pm

From yesterday
“#299 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.”

I am curious about taxation issues for this type of etf.
My understanding is that Vanguard Canada would purchase the corresponding Vanguard etf in the US.

Now if I purchase the US etf directly in my rrsp I do not suffer the U.S. withholding tax of 15 percent on dividends.

But what happens if I purchase the Canadian clone.
Would not Vanguard USA withhold the 15 percent since they would not know anything about whether it was going to a registered or non registered acct.

What about a non registered account. If I buy a U.S. ETF then I get dinged 15 perepcent but receive a tax credit for this amount. But if I buy the Canadian clone what happens? If. Vanguard US deducts the 15 percent from the distr to Vanguard Canada do I still see that on meta forms and get the tax credit?

#67 mustafa on 01.25.15 at 5:34 pm

Wolf in sheep’s clothing

#68 Wildrose nutter on 01.25.15 at 5:37 pm

A man’s a man for a’ that.

#69 Andrew Woburn on 01.25.15 at 5:38 pm

2 Herf on 01.25.15 at 5:16 pm
#20 CPG

Don’t buy a batman suit made in China.

Or from the Acme Aerospace Company.
==================

You didn’t get the press release. Acme was a pioneer in outsourcing to China.

#70 Mike T. on 01.25.15 at 5:39 pm

I generally do not have a very good opinion of politicians, but that has to be said with the acknowledgement that not all of them are working for the globalists. Good politicians still exist, they just don’t get very far.

It also bears mentioning that ‘successful’ politicians have often been subject to ritual abuse, or have been blackmailed and that deserves some compassion and understanding.

I used to get upset at the elites, then when you figure out who they are and what they are doing, and how they are doing it….well it all changed to a curious fascinating feeling of being impressed.

I am a lot further along on the soul journey thanks to our precious leaders and I don’t think that was a consequence they considered.

Also

RE ALIENS

former Canadian Minister of Defense Paul Hellyer has some fascinating ideas….

https://www.youtube.com/results?search_query=canadian+defense+minister+says+ufos+and+aliens+are+real

not only are they real, they are already here….
obviously

#71 Alberta Economist on 01.25.15 at 5:43 pm

Caution IS appropriate in comparing Calgary to Vancouver or Toronto. RE prices are driven up by demand exceeding supply at existing price levels. In Calgary’s case: 1) There are no geographical (water, mountain) or international border constraints on growth. 2) The transportation system provides major arterial access in all directions outside the city to facilitate perimeter development. 3) The City has engaged in urban containment efforts, but in light of one and two and the absence of a restrictive green belt, the efforts are to limited effect. 4) Demand for the construction trades was stressed in the last 18 months by government assisted renovation and replacement efforts for over 10,000 residence owners in Calgary and (ex) suburbs. 5) Real estate industry people on the ground do not report any significant flow of foreign money flowing into high end real estate. 6) Calgary lacks an external appeal to immigrants such as geographic beauty, large ethnic populations, or the amenities of an international city. At the end of the day, the main driver intermediate and long term has been energy industry employment demand. As it fades, so does the tendency of demand for housing to exceed supply at 2014 prices.
Arguably, Vancouver and parts of Toronto are very different situations.

#72 gladiator on 01.25.15 at 5:47 pm

Agree with you, Garth.
The financial effect of the 0.25% rate cut is puny compared to the psychological effect it had on the masses. They had to send a message that all is good in Can-hood, so that the party goes on till they win the elections. And they succeeded, considering the sheeple’s reaction to this news.
Don’t be surprised if they have a landslide win this year – 70% of the population own homes and will happily vote for those who helped them “get rich” via house appreciation. Conservatives know how to play the game. It’s a macabre game for us small people, mind you, but for them anything goes in order to keep their powers.

#73 BlackDog on 01.25.15 at 5:53 pm

These people who call themselves Canadians might actually win their lawsuit against the government. Then what? All earnings from our US investments will be wacked 30%?

http://isaacbrocksociety.ca/2014/10/22/97975-more-needed-to-make-the-february-1-2015-payment-for-canadian-fatca-iga-lawsuit-il-nous-reste-97-975-a-ramasser-pour-notre-poursuite-judiciaire/

#74 not 1st on 01.25.15 at 5:58 pm

#22 Tony on 01.25.15 at 2:52 pm

I like how the developer in the video says, well we just cant stop building cause demand is going to be higher in 2 years.

How on earth can they make that determination. Oil might be low for 5 years. People move to cities for jobs and if jobs are waning, so is the in-migration and then so is the demand for housing.

#75 HeavyD on 01.25.15 at 5:58 pm

Silly Garth…. Interest rates will never go up. The banks have lent so much that increase would collapse they system. #Notgoingtohappen

#76 Mike Le Pard on 01.25.15 at 6:00 pm

Predictive Human Behavior, especially when fear or financial loss comes in.

It’s one of the lessons I’ve learned in my Financial Trading courses.

Calgary RE Investors panicked in the 80s RE bust, they panicked in the 2008 bust, they will do so again. After all, the bumper sticker of Alberta is:

“Please God, give us another oil boom, we promise not to piss it away this time.”

…and that should tell you everything you need to know about that.

#77 johnsaccy123 on 01.25.15 at 6:02 pm

Garth, suggest you give a shout out to your attorney. I believe you have a lawsuit coming for slandering (albeit it is likely to be true) the semi-dictator Minister Johnny Beard.

Please count on your blog dogs for donation for legal fees. We cannot afford to lose our daily dose of entertainment and reality check if you would be busy with the case.

#78 Wildrose nutter on 01.25.15 at 6:03 pm

No churchman am I for to rail and to write,
No statesman nor soldier to plot or to fight,
No sly man of business contriving a snare,
For a big-belly’d bottle’s the whole of my care.

The peer I don’t envy, I give him his bow;
I scorn not the peasant, though ever so low;
But a club of good fellows, like those that are here,
And a bottle like this, are my glory and care.

Here passes the squire on his brother-his horse;
There centum per centum, the cit with his purse;
But see you the Crown how it waves in the air?
There a big-belly’d bottle still eases my care.

The wife of my bosom, alas! she did die;
for sweet consolation to church I did fly;
I found that old Solomon proved it fair,
That a big-belly’d bottle’s a cure for all care.

I once was persuaded a venture to make;
A letter inform’d me that all was to wreck;
But the pursy old landlord just waddl’d upstairs,
With a glorious bottle that ended my cares.

“Life’s cares they are comforts”-a maxim laid down
By the Bard, what d’ye call him, that wore the black gown;
And faith I agree with th’ old prig to a hair,
For a big-belly’d bottle’s a heav’n of a care.

#79 not 1st on 01.25.15 at 6:05 pm

Garth, you might as well face facts and realize your call on the US is wrong headed. The fed is too scared of its own shadow to even think about touching rates especially when every other country dropped theirs. US might be a big economy, but one economy cannot power the world.

In the next jobs report you will see for yourself because it will contain all the layoffs and cut backs in the patch. All that capital spending being cut will eat into GDP as well. China slowing down means the west isn’t buying as much of their crap so retail will notch lower.

US is probably already under stealth QE program. Maybe you can understand the PM hoarders a little better after this past week.

Energy-related employment is 1% of the US labour force. The next jobs report should show nothing more than seasonality. — Garth

#80 Andrew Woburn on 01.25.15 at 6:09 pm

Watching the news of the Saudi royal succession I was struck by the fact that everyone in the family seems to have a really black beard, They’re all the same whether septua-, octo-, or even the late nonagenarian Abdullah. I suddenly realized what fabulous DNA Dad had bequeathed them.

Yes, you cynics will say it’s Grecian Formula, but come on people, we’re talking Lions of the Desert here. You’re the kind of people who wouldn’t believe Steven Harper if he was standing in a closet right in front of you.

#81 Mister Obvious on 01.25.15 at 6:11 pm

#51 Guy

“I have long thought that the politicians consider us sheeple.”
—————————–

What behavior has the Canadian populace ever demonstrated that would cause a politician to think otherwise?

#82 Setting the Record Straight on 01.25.15 at 6:13 pm

BlackDog on 01.25.15 at 5:53 pm
These people who call themselves Canadians might actually win their lawsuit against the government. Then what? All earnings from our US investments will be wacked 30%?

http://isaacbrocksociety.ca/2014/10/22/97975-more-needed-to-make-the-february-1-2015-payment-for-canadian-fatca-iga-lawsuit-il-nous-reste-97-975-a-ramasser-pour-notre-poursuite-judiciaire/

*******
I have raised this issue in the past on this blog. It never generated much interest. I think it is important. Not sure if ADRs are considered US property.

One suggestion was made to me that if the lawsuit was successful, the individual banks would voluntarily comply.

#83 45north on 01.25.15 at 6:14 pm

“Wonder what the sheeple are thinking?” Seems to me it was John Baird who uttered the words. I don’t recall the issue of the day, but I was struck by the word. Sheeple. He meant citizens. Voters. The manipulated.

Poloz said that the cut in interest rates was “insurance” against deflation and he might buy more. The cost of this insurance is a lower dollar. It’s also a further expansion of the housing bubble. As the chinese guy at work says “you pay later”.

Here’s an article by Michael Shedlock talking about housing affordability in the US and Canada:

http://www.financialsense.com/contributors/michael-shedlock/housing-affordability-how-bad-is-u-s

the thing I notice is US housing is much more affordable than Canadian housing – the US can afford to raise interest rates and will do so when it’s in its interests. Canada may be forced to follow. The article shows that there are big differences among Canadian markets. Vancouver is the least affordable market. Much less affordable! There are those who say that Vancouver is sustained by Chinese money. I say it damned well better be!

#84 Andrew Woburn on 01.25.15 at 6:16 pm

For some reason, I don’t really remember the Sixties. Apparently, we were having the conversation about automation and unemployment then. Fifty years on we don’t seem to have learned much.

“What can we learn from past anxiety over automation?”

http://wilsonquarterly.com/stories/theres-much-learn-from-past-anxiety-over-automation/

#85 Greybeard nutter on 01.25.15 at 6:18 pm

Beards go grey when yer 22.. the house of saud is a fraud.

#86 Ollie on 01.25.15 at 6:21 pm

Most of the problems of this world are caused/maintained by seemingly innocent but deep rooted psychological problems of individuals, repeated over and over in all of us. It adds up…

One of them, apparent adults never mature, they need a father and mother figure. This makes us extremely vulnerable to even dimwit predators.

See politicians… With very few exceptions (and i mean VERY FEW) the politicians are actually criminals, sociopaths, thugs, even actual child murderers (see what is covered up in england now). Our problem is we constantly need the father there and only find small dents in their image. And we call them corrupt, immoral, seldom amoral, etc. When, in fact, they actually are horribly hostile entities. We cannot possibly rid ourselves of the constant father figure starting point from where we drop a little just to find reasons to come back, drop some more, then come back to “better” feelings.

Mother figure? Don’t even start me. Most damaging of all. You know what I mean…

#87 Smoking Man on 01.25.15 at 6:25 pm

Son’s an idiot, he chickend out, unloaded his positions, still nice wee profit.. No guts no glory..

Evidence on my blog… P’s, not unloading my positions for a while. I’m sitting on a 10 big figure cushion.. Oh wait make that 11.

#88 Assis Ongigi on 01.25.15 at 6:34 pm

IBM is about to get hit with a massive reorg and layoffs

One-quarter of the company could be let go in the next month.

http://www.itworld.com/article/2875112/ibm-is-about-to-get-hit-with-a-massive-reorg-and-layoffs.html

#89 Fed-up on 01.25.15 at 6:35 pm

Oil down to $45 per barrel and gas prices go up 7 cents per liter in the past week in T.O. And they were still at least 15 cents per liter too high to begin with.

Where are the positives in low oil prices again? Someone please remind me.

What a country.

#90 CalgaryBoy on 01.25.15 at 6:39 pm

The sky IS falling in Calgary! I’ve never seen such numbers in my life! +78.45% in inventory!!! -36.96% in sales!!! The month isn’t even over yet! The stats are still rising!

The weather in January here in Calgary has been amazingly warm this year!!! It’s +16 today! People are out and about in t-shirts and shorts! So sales should be UP, but there they are not. That’s a huge sign Calgary is in trouble.

There are a lot of articles out there to calm the masses. There are also a lot of articles that says oil will bounce back up to $80 to $100 by the end of the year. Not with this much inventory and the inventory is building day by day. No one is cutting production. The supply will continue to build up until companies can’t make any money and will be forced to shut down due to bankruptcy. Even if oil stays down for 3 years, it will do a lot of damage to Calgary’s housing market. It took roughly 3 years for Calgary to lose 50% in the 80s. I see it being the same this time around.

Sure, interest rates were high in the 80s. What good are low interest rates when people lose their jobs and don’t have money to pay their mortgages? Plus, add on the fact that Alberta has the highest debt to income ratio!

This will not end well in Calgary.

#91 Marco on 01.25.15 at 6:40 pm

@81 Mister Obvious

#51 Guy

“I have long thought that the politicians consider us sheeple.”
—————————–

What behavior has the Canadian populace ever demonstrated that would cause a politician to think otherwise?

Garth’s Blog.

#92 MSM-free Zone on 01.25.15 at 6:42 pm

#38 Smoking Man on 01.25.15 at 4:13 pm
“……I’m still voting for the party. I hate communists a bit more than I hate Neo cons……..”
______________________________________

Why not vote for a party somewhere in the middle between the two extremes?

#93 BlackDog on 01.25.15 at 6:43 pm

@SettingTheRecordStraight #82 re: “I have raised this issue in the past on this blog. It never generated much interest. I think it is important. Not sure if ADRs are considered US property. One suggestion was made to me that if the lawsuit was successful, the individual banks would voluntarily comply. ”

My understanding is that if the lawsuit is successful, for Canadian banks to comply to US FATCA law will violate Canadian law. This is the point of the Intergovernmental Agreement’ with the USA – i.e. to make it legal for Canadian banks to discriminate against Canadians born in the USA. If the lawsuit against the Canadian government is successful, Canadian banks will have to decide whether to violate Canadian law or risk the 30% withholding from US financial institutions. Damned if they do, and damned if they don’t if this group wins.

This ;lawsuit will be REALLY INTERESTING. I suggest all BlogDogs who are highly invested in the USA, should pay attention.

#94 Obvious Truth on 01.25.15 at 6:44 pm

#60 Big M

Everyone in Europe knew syriza would win. Alex the great has already met with the rest of the European crony elite.

What are they going to do. Half the people could leave Greece and move to Germany. Who would pay the bill then. You guessed it.

Print baby print. $70 billion a month into markets. Maybe keep an eye on db. Perhaps it will give us a clue about how this could play out long term.

It’s always about how it looks politically. And dealing with lingering war issues all over Europe.

#95 Ret on 01.25.15 at 6:45 pm

#65 “What affect does the 0.25% BOC rate cut have if it doesn’t influence LOC’s and mortgage payments?”

It devalues the currency. You just got a “pay cut” on anything imported or priced in USD, when you thought that you got a rate cut! Have a nice day.

#96 BlackDog on 01.25.15 at 6:48 pm

@SettingTheRecordStraight, my understanding is that EVERYTHING held in an American financial institution counts.

#97 Obvious Truth on 01.25.15 at 6:49 pm

Always count on politicians to be politicians.

#98 MSM-free Zone on 01.25.15 at 6:55 pm

“…..Wonder what the sheeple are thinking?” Seems to me it was John Baird who uttered the words………”
______________________________________

A the time, Baird was probably pondering which federal department he could steal $50,000,000 from to prop up his old Harris-era buddy, Tony Clement.

#99 Sebee on 01.25.15 at 6:59 pm

I think the game now is just to stretch this into the election and not let things go into the dump before.

Do you think they will pull it off?

#100 Vancouver coastal on 01.25.15 at 7:06 pm

I’ve kinda noticed the “when rates go up everyone’s screwed “message has been quietly dropped from this blog ….I think Garth is coming around …the metal heads mite see their luck changing pretty soon as lost confidence in central banks begins to pick up speed, Garth mite wana do an updated re-write of “after the crash “

#101 Ollie on 01.25.15 at 7:07 pm

Tonight is movie night for me. Zorba the Greek.
I hope the Greeks pull an Iceland onto the bankers.
I hope the whole world wakes up and quietly turns their back to the thugs.
No violence is needed for freedom. We can just look away.
Just another false lesson of the so called history taught in school.
They are weak. Puny inbred retards. They will just wither and blow in the wind.
You will see.

#102 Smoking Man on 01.25.15 at 7:12 pm

#92 MSM-free Zone on 01.25.15 at 6:42 pm
#38 Smoking Man on 01.25.15 at 4:13 pm
“……I’m still voting for the party. I hate communists a bit more than I hate Neo cons……..”
______________________________________

Why not vote for a party somewhere in the middle between the two extremes?
……

Last time I checked, no libertarian parties in Canada. So I’m stuck with the neo cons.

#103 West Coast on 01.25.15 at 7:21 pm

http://www.theguardian.com/world/live/2015/jan/25/greek-election-syriza-confident-of-victory-live-updates

http://www.wsj.com/articles/syriza-poised-for-victory-in-greek-election-1422168982

Let’s see what Syriza will do for the Greeks……will the Euro return (2001) to par with the USD?
………just thank our lucky stars that we can devalue the CAD and retain our economic sovereignty…no longer an option for any of the southern/eastern European countries in the Euro.

#104 Lillooet, BC on 01.25.15 at 7:22 pm

Dropping interest rates won’t automatically make houses more affordable because any money someone could potentially save on their mortgage will be negated by the increased price of real estate. In other words: cheaper loans == higher house prices.

Oil prices won’t stay low for very much longer. There are too many geo-political instabilities that could trigger the next uptick in prices. Also, how long before the OPEC countries put pressure on the Saudis to return back to normal production/pricing levels? Oil revenues in OPEC countries have been cut in half and it won’t be long before the disenfranchised put pressure on their ministers to return the price of oil to normal.

#105 Figmund Sreaud on 01.25.15 at 7:22 pm

“Wonder what the sheeple are thinking?” Seems to me it was John Baird who uttered the words.
____________________________

Well, … Baird and his ilk are no dummies! There is a fundamental problem his ruling gaggle is facing, … the rule is unattainable in the real world, … hence the panacea needed: … the necessity of lies, deceptions, trickery, bribery!

F.S. – Calgary, Alberta.

#106 Linda on 01.25.15 at 7:26 pm

If deflation is going to strike here next (& in effect, has already begun) then even rate cuts won’t save us. Japan has had historically low rates for 20+ years but property values in Japan (according to the news) are what they were 20 years or more ago. Of course, Japan also has by far the largest percentage of elderly of all the nations surveyed – every graph I’ve seen, Japan leads the pack. Not saying deflation is due to an increasing older population, but can’t help but think that prices in North America as a whole are going to drop as more people retire & try to sell the big family home to finance their retirements…..

#107 DisgustMadeMePost on 01.25.15 at 7:27 pm

Euro going down.. More money fleeing to the US.

Martin Armstrong has been predicting this for a while. Also, 30-35 $ oil.

Must admit that in my desperation to understand how to survive this next few years, I’ve started reading everything!! So far I still have a job, no debt (thanks Garth!) and a being your own thermos lifestyle. But I have never been more afraid of the future.

#108 LazyJason on 01.25.15 at 7:30 pm

With our dollar tanking, should bond yields be going up and with them mortgage rates?

#109 Ollie on 01.25.15 at 7:31 pm

Mr. Panos:

https://www.youtube.com/watch?v=Zvl9N9GdraQ

#110 bdy sktrn on 01.25.15 at 7:32 pm

oil trading opens with a plunge to new lows 44.6

#111 Have a drink on 01.25.15 at 7:35 pm

Oh my name is Jock Stewart
I’m a canny gaun man
And a roving young fellow I’ve been
So be easy and free
when you’re drinking with me
I’m a man you don’t meet every day

I have acres of land
I have men at command
I have always a shilling to spare
So be easy and free
when you’re drinking with me
I’m a man you don’t meet every day

So come fill up your glasses
of brandy and wine
Whatever it costs I will pay
So be easy and free
when you’re drinking with me
I’m a man you don’t meet every day

Well I took out my dog
and him I did shoot
All down in the county Kildare
So be easy and free
when you’re drinking with me
I’m a man you don’t meet every day

#112 DION on 01.25.15 at 7:37 pm

Mr Baird

LOL – he is nothing more than a loud mouth. Nothing else there at all – just a thug in a suit. A glorified political cheerleader, lacking character and most importantly morals. Nothing more than an insecure lackey whose only chance is to misled hones folks. A used politico salesman.

#113 jean on 01.25.15 at 7:39 pm

It’s even worse Garth. Right after the interest rate cut, they are floating the idea of QE in Canada.

“They are going to try to keep some ammunition, but I think they will be out of bullets by the end of the year if the economy takes longer to recover from lower oil prices,” Mr. Roberge said. “That’s why in 2016, there could be a case for QE in Canada.”

http://business.financialpost.com/2015/01/23/why-qe-in-canada-may-not-be-such-a-longshot/#__federated=1

#114 Retired Boomer - WI on 01.25.15 at 7:50 pm

Well, BLESS them Sheeple, who need healthcare, buy gas, pay utilities, owe money, and buy those consumer staples.

Yup, invested in them ALL, either in sector ETF’s, or the broad total market fund. Don’t forget the commercial bonds. $49,892.05 Y-O-Y interest & market gains.

That’ll buy me brandy & smokes.

Yup, it pays to feed that TFSA RRSP or in my case the ROTH and 401K.
Time now to enjoy the fruits of that $30 a week (increased from that initial $14,522 pathetic salary).
Do the math it is the ratio that mattered, and time, and a 4% match.

Recency believes we will have a good year. Will we? I am not totally sold on that concept, but not panicked. There are unstable elements overseas, and war is not off the screen either. Will do, and live as planned, vote the idiot of my choice when the time comes. Why worry??

Hope my XOM and CVX recover soon, and suffer no dividend cuts. Que serra, serra whatever will be, will be.

nice re-run photo, Garth but hey, it’s a re-run world!

#115 DION on 01.25.15 at 7:51 pm

# 18 kilby on 01.25.15 at 2:40 pm

Seems like a good percentage of Calgarians are in Parksville and Qualicum Beach looking at $350k to $450k homes and there isn’t much on the market right now.

********************
They move out to the region, built build houses…their all time custom dream homes, 4-5 bedrooms in case the kids want to visit _ but never do. Lots of fly in and out in the area, more than half my friends, who are expecting layoffs at Spring break up. Most of they went nuts and bought big houses, trucks, toys, vacations, miscellaneous because they are living like kings and then theirs the drugs.

Who will buy all these retirement properties, on the wet coast…yes no snow…but damp, rainy and a bone chilling wet cold.

Yes most houses will not fall too much in value until the retirees start to slowly evacuate the earth and head off to Shangra-la. Thing is…most will hit an age and the mass extinction so to speak will commence. Can’t stay old forever. But the area is beautiful and welcoming.

#116 live within your means on 01.25.15 at 7:54 pm

#2 Oil Is Sticky on 01.25.15 at 1:39 pm

Totally agree.

#117 Freedom First on 01.25.15 at 8:01 pm

Always hope for the best but plan for the worst. Garth forgot his ex-coworkers always castrate and shear their livestock, however and whenever they wish. It’s nothing personal, just part of the job.

#118 DION on 01.25.15 at 8:02 pm

#31 Saskatoon-Living on 01.25.15 at 3:22 pm

Listings are up 25% from a year ago in S’toon, and doesn’t look like that trend is gonna stop anytime soon. I recall u mentioning deflation Garth, but you’ve been flip flopping back and forth. You called for rates to rise all last year and look where the 10yr is. Fail

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

LOL – fail…I guess if things don’t happen on your timeline it is a fail OR are you just so impatient and far sighted. Here’s an experiment for you.

Take round stone, 10 pounds to make the point. Through the stone immediately above your head and as high as you can and see what happens.

#119 kommykim on 01.25.15 at 8:07 pm

RE: #70 Mike T. on 01.25.15 at 5:39 pm
RE ALIENS
former Canadian Minister of Defense Paul Hellyer has some fascinating ideas….

Just because he was once Minister of Defence, doesn’t mean that he still has all his marbles.

#120 Setting the Record Straight on 01.25.15 at 8:08 pm

#92 MSM-free Zone on 01.25.15 at 6:42 pm
#38 Smoking Man on 01.25.15 at 4:13 pm
“……I’m still voting for the party. I hate communists a bit more than I hate Neo cons……..”
______________________________________

Why not vote for a party somewhere in the middle between the two extremes?
……

Last time I checked, no libertarian parties in Canada. So I’m stuck with the neo cons.

+1

Or better still.
Don’t be a sheeple Don’t vote!

#121 kommykim on 01.25.15 at 8:09 pm

RE: #80 Andrew Woburn on 01.25.15 at 6:09 pm
You’re the kind of people who wouldn’t believe Steven Harper if he was standing in a closet right in front of you.

Which begs the question; When is Harper going to come out of the closet?

#122 Works for me on 01.25.15 at 8:10 pm

The lowering of Interest rates this week made me some money. I’m happy. I’ll return the favour to the government by donating handsomely during the election campaign.

#123 aL pacino on 01.25.15 at 8:31 pm

#53 Fuzzy Camel on 01.25.15 at 5:00 pm
Sheeple have done pretty damn good the last two decades. Buy a house with hardly any money, borrow to the max. Many of them now have houses worth 300% what they borrowed.

Only thing going to stop this party is interest rate hikes or government austerity. Until then, 5% down and the easiest money you will ever make.

If the Fed ups interest rates 1%, well that will be the end of it all so keep that in mind.

*******************************************
WRONG.
What needs to happen is a uptick from 1.5 to 5 years exemption from capital gains and the flipping ends overnight.
In Van city flipping is crazy alive and the house across the street changed hands 3 times in the last six years.
Approx 450,000 six years ago to 1.2 million today with the fourth listing.
THE END.

#124 stage1dave on 01.25.15 at 8:34 pm

Left wing, right wing, neo liberal, neo-con, libertarian, communist…WTF? Who cares about labels? Sheeple indeed…

Why all the fuss about aligning one’s self with a correct brand of political (or anything else) belief system? If a given system is not functioning for the benefit of the people it is supposed to serve, who gives a damn what political beliefs are held by it’s directors?

People show what they are by what they do with what they have…period. Any serious degree of critical thinking will get past the above “sheeple” labels pretty fast.

Incidentally, any party and/or belief system, once defined & codified & organized will revert to a chain of command structure…which it has to in order to expand & consequently survive. And that’s most of the problem…the endless saga of interpersonal relationships, power struggles, & ego gratification will simply take over.

As a few of us have figured out, most of these systems aren’t supposed to work; or they’re working just fine for the opposite purpose to which they were supposedly designed. Try turning your telescope around, it’s easy…

Btw, perhaps someone on this forum can explain to me what an actual “communist” is? Other than: a) our omnipresent enemy; b) something you shouldn’t be; c) someone who says things you don’t want to hear.

By textbook definition, the only “commies” I ever met were always trying to get me to do what everyone else was doing…act, talk, dress, like all these other people; show up on time, do yer job, don’t stick your head up or talk out of turn…fit in…hmmm…kinda like every self perceived authority figure; teacher, banker, manager, boss, etc…seems they all wanted me to be just like them. (sorry Bob)

Which, ummm, seems to be like most of the people I’ve ever met…or hung out with…or worked for…or with…& that’s before I read about the latest “free enterpriser” or “private corporation” looking for a handout. Hey, did I just go full circle here?

(Guess individualism is wonderful as long as you live in a vacuum & don’t run out of money)

At least I can put off buying a house for a few more months so I don’t have to “fit in”…haha

#125 Daisy Mae on 01.25.15 at 8:39 pm

This is the present governments’ opinion of taxpayers…

‘Sheeple’ — People unable to think for themselves. Followers. Lemmings. Those with no cognitive abilities of their own.

#126 Daisy Mae on 01.25.15 at 8:41 pm

…just in case anyone needs clarification.

#127 Ollie on 01.25.15 at 8:41 pm

Tonight oil changes direction…

#128 Alpen McLert on 01.25.15 at 8:42 pm

The time for entering Canada’s largest and most stable energy companies at $30 Oil for a long term investment could be the investment of a lifetime? How much to speculate on an ETF like XEG? 5% of one’s holdings at $30?

#129 Calgary Car Guy on 01.25.15 at 8:43 pm

Re/#52 ALBERTARDED
Thanks for your post tonight. I’m still laughing—especially over your name. And I’m as Albertan as you can get, LOL!

#130 Ronaldo on 01.25.15 at 8:44 pm

#34 Kotbar

”But the Usd is the world reserve currency in which all things are priced.”

Don’t be so sure about that. E.G. Russia recently signed a 400 billion dollar deal with China on energy which will be priced in Yuan. Others have as well including Canada just recently. The trend is to move away from the US dollar.

#131 Julie K. on 01.25.15 at 8:50 pm

It’s not really Sheeple. It’s more Heeple. But what ever. Way more to worry about these days than simple inequality.

#132 Daisy Mae on 01.25.15 at 8:53 pm

#3 Here’s the deal: “Cash advances from credit cards will no longer be available to pay the monthly bills of other credit cards…

Cars will break down and there will be no money or credit available to fix them…

Property tax and utility bills arrive like clockwork and there is no money or credit available to pay them…”

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

Yes. You are correct. Now….are the feds listening?

#133 Ronaldo on 01.25.15 at 8:57 pm

#53 Fuzzy Camel –

”If the Fed ups interest rates 1%, well that will be the end of it all so keep that in mind.”

They don’t even need to do that. Just change the CMHC rules back to $500,000 insurance rather than the current 1 million. Then watch prices fall. Of course that won’t happen because the banks wouldn’t have anyone left to lend to.

#134 dan on 01.25.15 at 8:57 pm

Hey Garth, more good news.

IBM is expected to go through a massive reorg next month that will reportedly see 26% of its 430,000-strong work force let go, or 111,800 people.

http://www.itworld.com/article/2875112/ibm-is-about-to-get-hit-with-a-massive-reorg-and-layoffs.html

You’re weird. — Garth

#135 Daisy Mae on 01.25.15 at 8:58 pm

#11 Boomers and trucks: “Is that photo from Nova Scotia, the Canadian Capital of tubbies?”

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

LOL She’s totally oblivious to what she’s doing to this poor schmuck…..he’s drowning. In debt?

#136 nonplused on 01.25.15 at 8:58 pm

Well the price of used Harleys are going to go up too.

When the loonie first ran up, people flocked to the US to buy used cars, houses, even used aeroplanes, because they were cheaper here than there. Heck I even bought a US build RV as the Canadian RV builders were going under.

The reverse will happen now. Used Harleys will all make their next big ride south.

They won’t want our Jap bikes though, they are already practically free state side.

So, but the one thing I can’t figure out, diesel is still more expensive, actually way more expensive than gasoline. Here in Alberta you can get gas about $0.75 a litre and diesel is still around $1.08. Diesel has historically been cheaper than gas, which is why they use it for heavy transport. You can make a semi truck that burns gas, actually they use to make big trucks (not that big, say to 5 tons) that burned gas. It all went diesel because it was cheaper. Trains run on diesel because it was historically cheaper. Why is it so expensive now?

I can think of a few reasons:

Here in Alberta big rigs and big frack spreads really increased the demand for diesel. That was a fact and it caused a shortage, but that should be going away.

Diesel is also very similar to Kerosene (ie. jet fuel), so someone might be stock-piling it (ie. war-mongering governments).

Diesel is used to run a lot of military hardware like tanks and smaller ships, and Humvees, so someone might be stock-pilling it.

Maybe Dodge just sold too many Cummins 3500’s, so the demand is huge.

Or it could be that natural gas liquids are the reason, they produce liquids up to usually pentane, which goes in gasoline, but very little diesel.

Anyway, when I bought my Dodge-Cummins, part of the thought was diesel is usually about 90% what you pay for gas. Now its 125% or better. Something is going on. With gasoline at $0.75 a litre, diesel should be running at best $0.65 – $0.70 a litre. Something is up. I think the military might be fueling up for something.

#137 Ronaldo on 01.25.15 at 9:00 pm

#57 Pinstripe

”IMO, since 911 the political drive was promoted for the sheeple to buy, buy, buy. the plan is on track.”

That’s when the problems began alright.

#138 salonist on 01.25.15 at 9:01 pm

depiction
idiot,repugnant

#139 Daisy Mae on 01.25.15 at 9:01 pm

#15: “I think it’s all about gaining, and retaining, power. — Garth”

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

In other words, it’s all about Harper.

#140 Andrew Woburn on 01.25.15 at 9:02 pm

My wife and I have recently enjoyed front row seats at superb live performances at the UK National Theatre and also at the New York Metropolitan Opera. It didn’t crash our travel budget as we only had to drive ten minutes to our local multiplex in Nanaimo. Believe it or not, the last Met performance was sold out. Yes, I know. Nanaimo: still seen in many eyes as the spiritual home of the Hell’s Angels.

My wife was badly conflicted about retiring to Nanaimo and losing direct access to the symphony and the opera. To her, culture only happened in cities. Everywhere else there is only the tracks left when knuckles and truck nutz are dragged over the barren ground. Now she is so thrilled by the “best seat in the house” accessibility of world class events here, she is seriously wondering whether she wants to haul butt and drop serious coin to see what can only be, by comparison, a second rank event in Vancouver.

The point of all this is not to dazzle you with our elitist/stupid (pick one) tastes in entertainment. The point is that live streaming of major cultural events is still in the pioneer stage and will undoubtedly spread into off-broadway plays, concerts etc. One of the major reasons retirees say they want to downsize into an urban condo is to access a diverse cultural life. For many, the new cultural options opening up may tilt their decision towards smaller, comfortable and affordable cities.

#141 H on 01.25.15 at 9:12 pm

Energy-related employment is 1% of the US labour force. The next jobs report should show nothing more than seasonality. — Garth

This is absolutely false.

Example. US Steel laid of 700 people. Steel pipe. Are they part of the 1%?

The employment tied to oil and gas is massive.

Engineers. Lawyers, Medical, Transport, Raw Materials, the list goes on.

There will be substantial impacts to the employment picture.

#142 Hell cometh to the debted on 01.25.15 at 9:16 pm

I come old friend from Hell tonight
Across the rotting sea
Nor the nails of the cross
Nor the blood of Christ
Can bring you help this eve
The dead have come to claim a debt from thee
They stand outside your door
Four score and three
Did you keep a watch for the dead man’s wind
Did you see the woman with the comb in her hand
Wailing away on the wall on the strand
As you danced to the Turkish song of the damned

You remember when the ship went down
You left me on the deck
The captain’s corpse jumped up
And threw his arms around my neck
For all these years I’ve had him on my back
This debt cannot be paid with all your jack

And as I sit and talk to you I see your face go white
This shadow hanging over me
Is no trick of the light
The spectre on my back will soon be free
The dead have come to claim a debt from thee

#143 Farmboy on 01.25.15 at 9:19 pm

That ain’t no sheep….. a hefty heifer it is – taking it down.

#144 Ronaldo on 01.25.15 at 9:27 pm

#104 Lillooet BC

”Oil revenues in OPEC countries have been cut in half and it won’t be long before the disenfranchised put pressure on their ministers to return the price of oil to normal.”

What would you consider to be normal?

#145 cgc on 01.25.15 at 9:29 pm

A bit off topic, I admit, but one shouldn’t believe everything they read on the internet; a second opinion is always nice. As someone who has worked as an MP with the Conservative government with Steven Harper at the helm, what do you make of this:

https://citizenactionmonitor.wordpress.com/2015/01/02/stephen-harper-is-the-most-vindictive-politician-ive-ever-met-someone-who-i-think-is-ruthless-to-the-bottom/

#146 Bob knows.... on 01.25.15 at 9:37 pm

You may be a construction worker workin’ on a home
You might be livin’ in a mansion, you might live in a dome
You might own guns and you might even own tanks
You might be somebody’s landlord, you might even own banks

But you’re gonna have to serve somebody
Yes you’re gonna have to serve somebody
Well, it may be the devil or it may be the Lord
But you’re gonna have to serve somebody

#147 Fed-up on 01.25.15 at 9:41 pm

#110 bdy sktrn on 01.25.15 at 7:32 pm

oil trading opens with a plunge to new lows 44.6
———————————————————————————-

Ooops, better raise gas prices in Canada then. Or wait 3 days then drop the price 1 cent.

Heading to my home in Scottsdale this Friday, 51 Cents CDN per liter.

Anyone care to explain how many parts of Canada are paying nearly double that price?

#148 Washed Up Lawyer on 01.25.15 at 9:42 pm

#140 Andrew Woburn

You know by now that I enjoy your comments.

There is an initiative currently underway in Ft. McM to revitalize its downtown area. Like all Canadian cities looking at invigorating a downtown area, the first idea they fixate on is building a new hockey rink.

That way they can attract a Tanya Tucker concert.

#149 Keith in Calgary on 01.25.15 at 9:47 pm

I work with a bunch of the folks Garth is referring to……

Example “A” – 25 year old girl who just got married and bought a new $500K house with hubby. They have had their $350K one listed for 3 months and it is “still not sold” and there realtor wants them to drop the price. She’s freaking out because they have $50K of equity that is now evaporating before there very eyes……between a listing price drop, and sales, commissions, plus the inevitable discount that will now be demanded on probably every single property sale in Calgary, she might be lucky to net $10K.

They take possession of their new place in a week. Gonna start paying 2 mortgages, probably for months……ahhhhh wedded bliss is wonderful….isn’t it ? They’re screwed.

Example #2 – It’s a 30 year old gal who just moved into her new $400K house with the BF (not even married, only dating a few months)……..need I say more ?

#150 Ronaldo on 01.25.15 at 9:49 pm

#140 Andrew Woburn

”For many, the new cultural options opening up may tilt their decision towards smaller, comfortable and affordable cities.”

I totally agree. Prices in Nanaimo have moved very little since the GFC. For a small city it has an incredible array of facilities for sports and entertainment.

#151 devore on 01.25.15 at 9:54 pm

But people in Alberta have seen this movie before. I think they are a bit more level-headed in reacting to this.

I don’t understand what there is to be level headed about. The only level headed thing to do is to cut your living expenses to match your newly-decreased income. This may include selling the house, if prospects remain dim, or if you’re already overstretched.

The worst thing you could do is to deny reality, and keep living in the debt fairy land where money grows on trees.

Yeah, people in Alberta have seen this movie before. Then they went to see the remake several years later, and were shocked. shocked! by the plot.

#152 Yuus bin Haad on 01.25.15 at 10:02 pm

Economists. Is there anything they don’t know?

#153 AfterTheHouseSold on 01.25.15 at 10:03 pm

#92 MSM-free zone
“Why not vote for a party somewhere in the middle between the two extremes?”

Because here in Ontari-owe we have no recent experience with a “middle” party. At the provincial level it’s NDP/Lib OR Cons. On the left, McGuinty, now Wynn has never seen a billion that she can’t piss away.

There is no reason, so far, to expect any different distinction at the fed level. Therapist couch patting Justin is preoccupied with trying to understand the “root causes” of terrorists. Doe eyed Justin would be better suited to making mascara commercials.

So again, a gaping void in the “middle”.

#154 Vanecdotal on 01.25.15 at 10:05 pm

#120 Setting the Record Straight

“Or better still.
Don’t be a sheeple Don’t vote!”

While I certainly empathize with the lack of (any) decent leadership contenders to choose from, to choose NOT to exercise your democratic right to vote is almost always, statistically speaking, a vote for the incumbent.

Far better to do your own DD, educate yourself on the candidates, parties, and platforms, hold your nose, and vote your intent than not vote at all, unless you intend to vote for the incumbent.

I.e. in this case, the CONservatives get the equivalent of one freebie each from all those abstainers.

Someone else here (sorry forget who), said it best, “Our choices are Dumb, Dumberer, or Dumberest.” It is only a matter of personal opinion in which order the 3 candidates fall.

It would be nice to see a federal (and provincial) Libertarian party get off the ground… Garth for PM 2019…? Hint-hint?

#155 Industrial Guy on 01.25.15 at 10:13 pm

“Since the wheels came off the economy in 2008, this has been the government’s primary strategy – make money so cheap it’s irresistible. Then tell people things are getting better. The sheeple will respond. They will borrow to excess and spend beyond their means. So the economy will get better.”

No one was prepared for the wipe out of the manufacturing sector in SW Ontario.

A lot are borrowing just to keep a modest roof over their heads (either owned or rented) and to feed their families. They come to my office looking for work all the time.

They’re 50 ish, ex auto workers, the plant closed with almost no notice, EI ran out the first year. They landed a job paying 1/2 of their old salary. Credit cards and lines of credit kept them out of a basement apartment in the crappy part of town. They drive a 2003/2004 Cavalier. Sold the second car so the kids could have something at Christmas. I’m not making this up. That guy is now a QA technician where I work. He was lucky.

They want to be called the Harper Government. It used to be the Government of Canada. Shows you what they thought of us the “Sheeple” of Canada.
Harper the economist, bet on a quick and vigorous rebound of the US economy to drag us out of the recession. It’s slowly happening now. For a lot it’s damn slow and too late.

To what extent we will benefit from the falling Canadian dollar and the new economic strength south of the border is a good question. Protectionism is running a fever pitch in the USA. Right to work laws have lowered wages and benefits as unions disappear to become a footnote in American History.

The real effective exchange rate (REER), adjusted by US manufacturing unit labour costs, has depreciated by 30% since 2001, and 17% since 2005. China’s low-cost advantage is slipping and America’s competitiveness is growing. Matching US wages is going to be painful, even with a 70 something cent Canadian dollar.

I was recently at the Boeing Dreamliner plant in North Charleston, South Carolina. Starting pay is around $14.00 / Hr., almost half what it pays in Everett, Washington to build the exact same aircraft. It no wonder the IAM (international Association of Machinists) is so optimistic about organizing the plant. It will be an odd victory for the union since South Carolina’s Right to work laws outlaw the “Rand Formula”. You need 50% plus one to organize, but once you do ….. membership is voluntary and no one is compelled to pay union dues. Non-union staff get get all the benefits without paying any dues or participating in labour actions.

The Governor of South Carolina Nikki Haley has a near psychotic hatred of unions. It’s not surprising that South Carolina has no minimum wage. This kinda explains why only 3.9% of workplaces are unionized.
That’s who we are competing against in more and more US States.

#156 AfterTheHouseSold on 01.25.15 at 10:15 pm

#140 Andrew Woburn
“…live streaming of major cultural events…new cultural options opening up may tilt their decisions towards smaller, comfortable and affordable cities.”

My thoughts exactly!

#157 Kenchie on 01.25.15 at 10:17 pm

#79 not 1st on 01.25.15 at 6:05 pm

“The fed is too scared of its own shadow to even think about touching rates especially when every other country dropped theirs. US might be a big economy, but one economy cannot power the world.”
——————————————————

I always find comments like this funny.

The Fed doesn’t have an obligation to “power” the global economy. It never has and never will. The US economy is the most internally powered economy in the world. Exports and imports as a % of GDP in the US is 13% and 17%, respectively. Much lower than Canada’s 30% and 32%, and most European big economies.

The appreciation of USD vis a vis the EUR, GBP, AUD, JPY and CAD (Conveniently not the CNY!) will not stop the Fed from hiking rates, albeit, slowly. The number of jobs dependent on exports is quite low in the US, and with lower cost imports from other developed countries (not China though!) it will be like another tax cut for them, and excess profits for importing companies.

The US is not Canada. It seems Canadians forget about this…

IMO, I have a feeling (no empirical evidence to back it up) that Yellen has more cojones than Bernanke or Greenspan…

Depreciation against the USD from July 28, 2014 to Jan 23, 2015:
CAD = -12.92%
GBP = -11.68%
EUR = -16.58%
AUD = -15.77%
JPY = -13.44%
CNY = -0.68%

#158 Sheik Yerbouti on 01.25.15 at 10:17 pm

One unintended consequence of the economic mismanagement and inflated real estate market is that the sheeple can no longer afford to travel out of their sheep-pens.
http://www.theprovince.com/travel/British+Columbians+unhappy+campers+rates+fees+rise+while+income/10758542/story.html
Looks like everyone will have to stay in and keep repeating the mantra about how rich they are in their cubicles, while watching re-runs of Canadian outdoors programming on the Discovery channel

#159 Vanecdotal on 01.25.15 at 10:17 pm

#147 Washed Up Lawyer

Dude you’re giving our gracious host a run for the money in the Ascerbic Wit Dept…. and that’s a tall order.

Appreciate the wry Fort McMinion anecdotes. Keep the lolz coming. “…That way they can attract a Tanya Tucker concert.”

That sh*te’s priceless.

#160 Andrew Woburn on 01.25.15 at 10:18 pm

#145 devore on 01.25.15 at 9:54 pm

Yeah, people in Alberta have seen this movie before. Then they went to see the remake several years later, and were shocked. shocked! by the plot.
===============

A couple of days ago, a friend who lost a house in Calgary in an earlier debacle was telling me about his son and spouse who have been pulling in north of $350K in Fort Mac. Huge mortgage, many toys. His parents warned him but he wouldn’t listen. What do stupid old people know anyway? Can’t happen to me.

I’m wondering if the coming slump won’t be worse for long term consumer psychology than the Great Depression. Lots of people lost everything then but most had relatively little to lose and few, apart from farmers, had a lot of debt. If you lose your million dollar McMansion and both Audis but you are still paying for them, what are you going to teach your children about debt?

#161 CPC Party Whip on 01.25.15 at 10:23 pm

Mr Turner

Should this naïve and foolish MP turn up on this website as we suspect he might given your own foolish past proclivities, please direct him back to National Headquarters for reprogramming prior to the spring election.

http://www.thestar.com/news/canada/2015/01/25/maverick-conservative-mp-michael-chong-fights-to-reform-parliament.html

(He should know better after what happened before. Our great and fearless leader is only giving him this bit of rope to appease him before sabotaging his re-election chances. No way will this bill pass, LOL!)

Maybe later he can start a blog too!

LOL!! – Losers or Liberals, as we say in Steve’s caucus ;)

#162 OttawaMike on 01.25.15 at 10:27 pm

#136 nonplused on 01.25.15 at 8:58 pm

Why is diesel so expensive?

Taxation: US and Canada added extra road taxes the past 20 years.
Low sulphur formulations:Refineries have tooled up to produce clean diesel and are recovering their investments.
Demand:Diesel exports out of NA are at an all time high. World demand and a shortage of refineries to supply the new low emission tier 3/4 engines.

Remember that diesel has more energy per litre than gasoline and although diesel is simpler to refine, the oil cos. are charging for energy BTU’s.

#163 Mr Average on 01.25.15 at 10:30 pm

current S&P 500 p/e ratio= 19(roughly)
historical average= 15(roughly)
27% overvalued

Gold current price=1300USD
average price inflation adjusted=$900
31% overvalued

Can’t find a recent real estate info adj chart but it’s safe to assume we are just a smidgeon overvalued in that department.

Crude current=$45
avrg price infl adj.=$42
7% overvalued

Overly simplistic but maybe people should stop seeing this as a “crash in oil prices” as opposed to oil prices simply reverting closer to their long-term mean. Prices have been under 42$ A LOT more often than over!

Pick a fight with the law of averages and see who comes out on top.

As a Canadian investor, what major asset classes or commodities aren’t overvalued at this point?

#164 Retired Boomer - WI on 01.25.15 at 10:33 pm

Recency bias. It has worked this way in the past, why can’t I sell my house on demand now? Just because it did then, don’t mean it will now. History never repeats, though it DOES rhyme.

Speaking of rhymes, tonight’s posts are full of interesting prose.

Interesting, that people expect repetition in life. Don’t usually work that way. Oil won’t be cheap forever, houses won’t be ‘frozen in place’ forever. The Loonie won’t be worth .82 forever. Harper’s reign is not forever.

It merely FEELS like forever!! Where is the snow??

#165 Saskatoon-Living on 01.25.15 at 10:37 pm

LOL – fail…I guess if things don’t happen on your timeline it is a fail OR are you just so impatient and far sighted. Here’s an experiment for you.

Take round stone, 10 pounds to make the point. Through the stone immediately above your head and as high as you can and see what happens. -DION

——————————————————————-

LMAO!! If you invested on the theme of rates rising DION at the beginning of the year(2014), you got creamed. Look where TLT is. You obviously need to re-read this post by Garth, it’s all about you……sheeple.

#166 Ollie on 01.25.15 at 10:39 pm

Let’s see… the Greeks start “tough” negotiations with EU to reduce the debt. That would give enough time to the unbelievers to empty the ATMs. Merkel cannot be bothered with any concessions, or everyone would want some, and ze germans would eat her with sour kraut. The Greeks reluctantly default into the Russian arms. A starving market opens for olive oil, feta cheese and ouzo. Get oil in drachmas and gas through Turkey. They become a hub for gas to EU (the irony). The Russian politicians get a place to bake in the sun this summer. The Chinese start shopping for Mediterranean islands real estate. Forget Van and MarkHAM. Greece rebounds in two years. Goldman places big order of nail guns. Toronto gets great lease rates on beemers, now that Poloz is a berliner.

Everything is awesome.

#167 Boomer prose! on 01.25.15 at 10:42 pm

May God bless and keep you always
May your wishes all come true
May you always do for others
And let others do for you
May you build a ladder to the stars
And climb on every rung
May you stay forever young
Forever young, forever young
May you stay forever young.

May you grow up to be righteous
May you grow up to be true
May you always know the truth
And see the lights surrounding you
May you always be courageous
Stand upright and be strong
May you stay forever young
Forever young, forever young
May you stay forever young.

May your hands always be busy
May your feet always be swift
May you have a strong foundation
When the winds of changes shift
May your heart always be joyful
And may your song always be sung
May you stay forever young
Forever young, forever young
May you stay forever young.

#168 Joe2.0 on 01.25.15 at 10:46 pm

Nice to see that you are awakening to the idea that conspiracy can also be fact.

The Banking Cartel with the Political Cartel with the RE Cartel and the Media Cartel all have one agenda.

Milk the Sheeple to the last drop.
Rinse and repeat.

#169 Partying like it is 1999 on 01.25.15 at 10:48 pm

Hey Garth,

I can’t believe you are still firm on your thesis of the US increasing rates this year. Please get over it, all the evidence points to QE4. I highly encourage you to follow Martin Armstrong, from Armstrong Economics, he has developed a computer model that has been insanely accurate.

The market is not about fundamentals, it is about capital flows and human nature. Mr Armstrong has developed a model that is multidimensional, not the single dimensional commentary we get from the main stream media.

QE4 is coming, please listen to several of the blog dogs, they see it coming too.

Thanks for your RE analysis, I enjoy this blog.

#170 Lennie knows too.. he sees far... on 01.25.15 at 10:53 pm

DELETED. Enough with the lyrics. — Garth

#171 New songs for the streets of Oilberta on 01.25.15 at 10:55 pm

Let me tell you how it will be
There’s one for you, nineteen for me
Cos I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all
Cos I’m the taxman, yeah I’m the taxman

If you drive a car, I’ll tax the street
If you try to sit, I’ll tax your seat
If you get too cold I’ll tax the heat
If you take a walk, I’ll tax your feet

Taxman!
Cos I’m the taxman, yeah I’m the taxman

Don’t ask me what I want it for (Aahh Mr. Wilson)
If you don’t want to pay some more (Aahh Mr. Heath)
Cos I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
Cos I’m the taxman, yeah, I’m the taxman

And you’re working for no one but me
Taxman!

#172 Aaron on 01.25.15 at 11:00 pm

truly, hate the picture, love the blog

#173 TurnerNation on 01.25.15 at 11:00 pm

#154 Industrial Guy , she’s very attractive. Dark good looks which a mixed culture can provide.

But one think I noticed…one of my signs for
spot-the-mis-truther is when people speak and lift their eyebrows which makes lines/creases in their forehead.

Try it. Then you can say anything. It must close up the “3rd eye” or connection or something. I don’t know its mechanics.

See second, third photo here and others:

http://tinyurl.com/lvh3olh

Fifth photo looks menacing.

– Reminds me of Governor Bobby Jindal who I spotted as a ‘neo con’ right away.
Look, same crinkled forehead lines when saying ‘trust me’ and some really menacing shots here. The eyes have it. These are also brilliant people.

http://tinyurl.com/l7lkuu5

Now try Baird…

#174 Everybody knows on 01.25.15 at 11:05 pm

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died

Everybody talking to their pockets
Everybody wants a box of chocolates
And a long stem rose
Everybody knows

#175 anon on 01.25.15 at 11:11 pm

“But people in Alberta have seen this movie before.”

Less than half I would say, considering how few were here last time around.

#176 Max Jones on 01.25.15 at 11:20 pm

Robert Burns was born January 25, 1759 in the house built by his father, William Burness, 2 years earlier in Alloway, South Ayrshire, Scotland. It is a simple two-roomed clay and thatch cottage. The cottage still stands and is now a museum in his honour – 257 years and not yet a tear down. Really, what more does a man need?

Tip your glasses and hum a few lines:

Should auld acquaintance be forgot,
and never brought to mind?
Should auld acquaintance be forgot,
and days of auld lang syne?

For auld lang syne, my jo,
for auld lang syne,
we’ll tak’ a cup o’ kindness yet,
for auld lang syne.

#177 Happy Renting on 01.25.15 at 11:20 pm

#107 DisgustMadeMePost on 01.25.15 at 7:27 pm

I understand. I’m a worrier by nature. During the GFC I wrung my hands, a lot. I wasn’t in a bad place, but young, inexperienced, and had fewer supports than I do now.

Garth’s Friday post gives you a to-do list. I’ll flatter myself and say hard work and smart choices means this time around I’m in better shape to weather a crappy economy (incidentally, last time I wasted a good worry. Everything ended up just fine.) If you rely on employment income from one source, cultivate a second, unrelated income stream to give yourself some stability. Frugality + patient, low-volatility investing.

Don’t let fear misdirect or paralyze you. Take actions to safeguard yourself and your family. Commit that if you fall on hard times, there’s no honest work you’re too proud to accept in order to support yourself. And as far as reading everything goes, don’t get sucked into pessimism porn addiction:

http://nymag.com/news/intelligencer/53858/

And for when nothing else comforts you, just remember: the end of the world will only happen once.

#178 The bards know on 01.25.15 at 11:29 pm

But wisdom, the wisdom of the bards… must be recounted..
So my damn Oilbertan neighbours will stop buying granite, n toys, n cottages, n vacations… and take us all down down down.

It’s all been said if they would only read….

#179 USD on 01.25.15 at 11:32 pm

If I think US bond yields are going to go to zero or negative, which ETF should I purchase?

#180 For those about to flop... on 01.25.15 at 11:36 pm

Happy Australia Day!
What emotion do I feel? Nothing.
Does that mean I’m just a Canadian taxpayer now ,instead of a dual citizen ?

#181 Happy Owning on 01.25.15 at 11:42 pm

Be happy!, it’s all we got.

#182 Smoking Man on 01.25.15 at 11:47 pm

#88 Assis Ongigi on 01.25.15 at 6:34 pm
IBM is about to get hit with a massive reorg and layoffs

One-quarter of the company could be let go in the next month.

http://www.itworld.com/article/2875112/ibm-is-about-to-get-hit-with-a-massive-reorg-and-layoffs.html
………

My money is on USA workers chopped first. They are 25% more expensive than Canadians at the moment. And once the fed, idiots, spike the rate and make Canadian workers 30% cheaper..

Let’s face it.. In any big organization, 60% of the people redundant.. Only a few go to dudes that everyone rides.. Rest are dead weight..

Currency wars, Swiss, Danes, Canada.. Who’s next…

#183 chapter 9 on 01.26.15 at 12:24 am

#104 Lillooet,BC
“Oil revenues in OPEC countries have been cut in half.”

Saudi,UAE,Quatar,Kuwait have $2.3 Trillion in cash so they are down $50 plus billion- coffee money!

#184 ShawnG in TO on 01.26.15 at 12:25 am

# Slow Canada

I think it’s all about gaining, and retaining, power. — Garth
———–
a professional politician’s Only job is to stay in power.

We could have a politician who does the right things. Keep the budget balanced for the long term. People would complain the life is too hard. This politician would probably get a minority government or even lose power.

We have politicians who hide the truth, manipulate the press (or lie to public using certain presses), and spending huge amounts of public money in key ridings. We call them Ontario Liberals or the Harper Government. They stay in power and gain majority status.

There are even politicians who are corrupt. Don’t say we never had them in Canada.

The bad guys can’t fool the majority of blog dogs here. Just too bad we are the minority.

#185 Retired Boomer - WI on 01.26.15 at 12:32 am

No more lyrics?

Gotta try lyrica. Use as directed, the voices in your head will direct you…

Sheeple Sorta like people with that over medicated smile…

#186 It's all gonna slide on 01.26.15 at 12:32 am

Armstrong is a gold boy.. enough said.

#187 stage1dave on 01.26.15 at 12:41 am

I cannot resist…

Get myself a steady job
some responsibility
Can’t even feed my cat;
Social Security

Hidin’ from the rent man;
make my wanna cry
Sherriff knockin’ on my door
Ain’t it funny how the time flies

I got holes in my shoes,
And I’m way overdue

Down payment blues

No I ain’t doin’ much’
but doin’ nuthin’ means a lot to me…
Got myself a Cadillac
but I can’t afford the gas it burns

I got holes in my shoes
And I’m way overdue

Down payment blues…

(c/r 1978 Young Young Scott)

Been listening to that tune for 35 years & those are STILL the only lyrics I can make out…riffs great tho…plus it’s great for tunin yer guitar; open strings!

Might be hearin a lot of this in AB in 2015…not the song, the down payment blues part :(

#188 Setting the Record Straight on 01.26.15 at 12:42 am

#153 Vanecdotal on 01.25.15 at 10:05 pm
#120 Setting the Record Straight

“Or better still.
Don’t be a sheeple Don’t vote!”

While I certainly empathize with the lack of (any) decent leadership contenders to choose from, to choose NOT to exercise your democratic right to vote is almost always, statistically speaking, a vote for the incumbent.

Far better to do your own DD, educate yourself on the candidates, parties, and platforms, hold your nose, and vote your intent than not vote at all, unless you intend to vote for the incumbent.

I.e. in this case, the CONservatives get the equivalent of one freebie each from all those abstainers.

Someone else here (sorry forget who), said it best, “Our choices are Dumb, Dumberer, or Dumberest.” It is only a matter of personal opinion in which order the 3 candidates fall.

It would be nice to see a federal (and provincial) Libertarian party get off the ground… Garth for PM 2019…? Hint-hint?

******
Why would you want Mr. Turner for Pm and a Libertarian party? Garth seems to be a Keynesian. See his comments on the Mises institute.

As to your other suggestions
……. “The lessor evil is not necessarily marginally acceptable.”

#189 Freedom First on 01.26.15 at 12:45 am

Love that pic. Reminds me every time I see it exactly why I live alone. Women can visit, but no key.

#190 PeterfromCalgary on 01.26.15 at 12:47 am

So glad I switched all my retirements saving from 75% TSX index ETFs to 100% US SP500 index ETFs during the Christmas Holiday. Thanks Garth I took your advice to sell Canada and buy America a little late but obviously not too late benefit from the falling dollar.

Garth when will I know it is time to be a Calgary real estate vulture?

#191 CalgaryBoy on 01.26.15 at 12:48 am

http://www.realtor.ca/propertyDetails.aspx?PropertyId=15196596&

Holly man! This house has been dropping in price and FAST!

It was $649K to $625K to now…$599K! Keep dropping, baby!

#192 debtified on 01.26.15 at 12:48 am

Garth, two blog entries in a row alluding to how the recent major events in Canada may just be all about politics?! Gotta admit it, Stevie is good. He knows how to win regardless of what cards are thrown at him. Sucks to be us! But what can you do? One of the competitions is going for popularity contest and the other is happy to spend other people’s money until they run out of it. Stevie will win again. Once more, sucks to be us!

I agree with Smokie, we could use a libertarian.

I didn’t tell you this but I think you know I live in Alberta (IP address). I work for one the the major O&G players. At work, people are not desperate but definitely uneasy, to say the least. A few silent and unannounced lay offs and unscheduled retirements. Some coworkers have million dollar homes in Ft.Mc. and Calgary that come with equal amount of mortgages and they worry the most. My own take on this: companies are taking advantage of the opportunity to cut costs. It’s too early to tell for sure if the price of oil will continue to be suppressed for a long time but most have already made their moves.

Tonight, my retired mother who lives with me, who has always criticized me for “just renting” made a comment about our neighbourhood: “There are a lot of houses for sale these days.” Of course, like all the sheeples, she takes it as a sign for “a great time to buy”. I remarked that maybe these people can’t afford to keep their houses anymore? Pause. She can’t seem to appreciate how nimble we are and how I am able to finance her $5,000+ a year “fun fund”. Our living expenses is less than 15% of my income, I save at least 25% of my income and we live quite well. My siblings have huge houses and fancy cars but they avoid taking care of her. I have no debt, live life to the fullest, and have highly liquid and diversified investments. Thanks to you, Garth. You have been a great mentor. Please don’t go back to politics.

Smoking Man, dude, thank you for the comic relief and for telling it like it is. You are Garth’s second best creation – after http://www.GreaterFool.ca. I’m am especially amused by how you refute those that attack you. Man, those guys are miserable and some of them don’t even know it. Thank you for Y a while back. I made a killing on it. I think you are right about BBD also (despite it currently being in the dog house). My gambling fund is bloated partly because of you. Cheers!

#193 Chaddywack on 01.26.15 at 12:53 am

As much as I’d like to think the BOC is independent, I really think there has to be a political slant to this decision. Rightly or wrongly there was some influence there…..

#194 Entrepreneur on 01.26.15 at 12:54 am

#144 cgc…video on “Stephen Harber the most vindictive…”

The robocall scandal was one way to cheat the electoral system, and if caught once, could they be another way.

My theory: Move the military to areas that are needed to boost votes. It is common knowledge that Ontario vote for the Liberals; it is common knowledge that families vote as their parents and grandparents.

Is this too far out there or am I near the truth?

#195 45north on 01.26.15 at 12:56 am

Keith in Calgary : Example “A” – 25 year old girl who just got married and bought a new $500K house with hubby. They have had their $350K one listed for 3 months and it is “still not sold” and their realtor wants them to drop the price.

Kay figures more than two thousand people have been left with their belts on their ankles as this oil-induced housing shock hits. “There are at least 2,500 home sellers in Calgary who have already purchased another home without their own being sold (classic over-sold euphoria),” he says, “and there are simply not enough buyers in the queue to absorb those deals. This means prices will be negatively impacted.”

http://www.greaterfool.ca/2014/12/22/cowboy-hell/

my plan is to give people who lose their houses $1000/month for a year. This would directly help them as well as inject money into the local economy. It’s the cheapest plan too.

#196 HGTV for the Sheeple on 01.26.15 at 1:05 am

HGTV should be labelled a dangerous drug or chemical and declared illegal… to spare the doe eyed ones.

#197 David on 01.26.15 at 1:07 am

Last weeks much talked about B of C rate cut was a totally useless gesture. Companies loaded up with junk debt are already failing.

http://wolfstreet.com/2015/01/25/oil-and-gas-default-wave-outright-liquidations-next/

#198 BLM on 01.26.15 at 1:28 am

The rather large woman in the photo, like the Bank of Canada, is only causing a ripple in the pool. One should instead look to the moon to see where the ocean tides will take us.

The tides tells us currencies are devaluating.

They also tell us government leaders and central bankers are determined to inflate their way out of their debt.

This is the zeitgeist of our time. It is the current will of the leaders who are running the vast majority of the developed world.

So while historical context and pessimism has its place in any decision making process, betting against the monetary policies of the G7 in this ‘new normal’ is not wise.

Housing has never been more unaffordable. Then again, US 30-year bond yields have never reached the levels they just did.

All bets are off and if you are on the fence about buying into real estate it comes down to whether you believe the G7 economies can raise interest rates in the short to medium term.

So for those who can buy real estate with little leverage, as a first-time home owner or as an investment, it is a rather reasonable time to do so.

#199 Karl hungus on 01.26.15 at 1:29 am

Guess what inventory was January 2012? 4500. Nothing to see here

#200 No Canada, No on 01.26.15 at 1:56 am

Here we go…
“US bond yields are going to go to zero”
Retails crowd is finally awaken and looking how to pile in bonds bandwagon.

You need to buy TLT (http://finviz.com/quote.ashx?t=TLT&ty=c&ta=0&p=m) and… good luck :)

#201 No Canada, No on 01.26.15 at 1:58 am

“As a Canadian investor, what major asset classes or commodities aren’t overvalued at this point?”

Dude, it’s commodities, commodities and commodities (as our friends real estate agents say).

Along with russian market (RSX)

#202 experienced.optimist on 01.26.15 at 2:02 am

I am beginning to believe that it is not only Canada but the rest of the world that may be heading to the Great Deflation. Look at the following links. And there is no ZeroHedge stuff here. Mostly from Great Britain.

http://www.theguardian.com/business/2015/jan/25/devaluation-discord-currencies-war-quantitative-easing

http://www.telegraph.co.uk/finance/mark-carney/11367570/Mark-Carney-warns-of-liquidity-storm-as-global-currency-system-turns-upside-down

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11367125/Oil-collapse-could-trigger-billions-in-bank-losses

http://www.pieria.co.uk/articles/the_risk_of_deflation_in_2015

http://www.theguardian.com/money/2015/jan/24/fears-pension-chaos-runup-election

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

There really is something going on out there. And it seems like the bankers and politicians are trying to keep a lid on it.

#203 Industrial Guy on 01.26.15 at 2:03 am

#172 TurnerNation
That’s an interesting theory you have. I don’t have anything good to say about the Governor of South Carolina. She openly discourages companies with unions from moving to her state. It’s no wonder annual household median income is $10,000 below the national average.

http://www.usatoday.com/story/money/cars/2014/02/20/no-south-carolina-union-jobs/5642031/

Unemployment in the State stands at 6.75, which is the US national average (Nov. 2014). So there’s no benefits to the people of the State. I used Boeing because it’s a clear demonstration that “right to work laws” are a direct subsidy to business. Boeing wouldn’t be there without it.

The state also threw in $900 Million to cover the building of the plant in North Charleston, staff training, tax breaks and direct cash payments. How much corporate welfare can one company swallow?

Median price for a house around the plant based on the last six months of sales is $85,000. It’s hardly a boom town.

If I was working at Bombardier Aircraft, I would be asking the Canada’s Minister of International Trade…. why are you not launching a NAFTA challenge? It’s no secret our Prime Minister hates unions and supports “Right to work laws”. The only reason he hasn’t introduced one in Canada is the Supreme court would probably overturn a direct challenge of Rand (upheld in 1991).

Your second choice Louisiana Gov. Bobby Jindal is seriously batshit crazy. He and Fox News contributor Steve Emerson both wrongfully claimed that there are “no-go” zones in Europe and the USA where authority has been ceded to Muslim immigrants. Emerson has since recanted. Jindal on the other hand has doubled down.

http://www.theguardian.com/us-news/2015/jan/20/boby-jindal-muslim-no-go-zones

Gov. Jindal recently spoke at a conference sponsored by the American Family Association (AFA), an organization classified as a hate group by the Southern Poverty Law Centre. He’s not so brilliant.

Elections matter.

#204 whitehorn on 01.26.15 at 2:27 am

#90 CalgaryBoy,

Interesting times in AB, there is a steady flow of layoffs, concerns, worries, that affects every corner of the province, and spinoffs to other parts of Canada. There are positives, more people should be able to afford a house, has gotten out of reach for many people. Companies outside the oilpatch will benefit immensely from lower fuel costs i.e. mining and forestry especially. Manufacturing should pick up due to the lower dollar. The temporary worker program will be a distant memory in AB as it made the top 5 stories in 2014 in Edmonton. I agree, real estate will definitely be affected, I can not see how it cant, when many economists are predicting AB to be in recession in 2015. Residence purchased for 130 k in 2000, has been assessed close to 400k. I wonder how much that house would sell for in 1 years time – I’m guessing 300k and more like 250k. Interesting times indeed.

#205 Jake Randinke on 01.26.15 at 2:56 am

Take all your money out of the bank and store in a place where nobody knows!

Banks are obsolete for depositing money. They can ask those that have mortgages and other debts to deposit their money!

Oh, I forgot, they have no money!

#206 An Inquisitive Mind on 01.26.15 at 4:23 am

Garth, my good man.

A hypothetical, if you will.

Imagine we’re sometime in the very near future.

Let’s say Canadian bond rates were to increase due to more demand for yield.

Let’s say that just as bond yields rise, Poloz finds it necessary to drop rates again, for much the same reasons he’s found it necessary to drop rates now.

What happens then?

What do you think, Garth?

#207 jerry on 01.26.15 at 7:09 am

Does any of this improve with a new/different government? I have not viewed any economic policy ideas that would address this or grow the economy out of this mess.

#208 Albertarded on 01.26.15 at 7:38 am

Uh oh….

http://www.nbcnews.com/science/space/mountain-size-asteroid-will-whip-past-earth-monday-n292436

Giant asteroid coming to Earth in 4.5 hours.

That’s 270 minutes. Or 16200 seconds.

All Earth will be destroyed.

But Canadian real estate will be fine. Especially Alberta.

Because it’s different here. We never crash.

Like QANTAS. QANTAS never crashed.

If you are going to the store to get emergency supplies, take me. I’m an excellent driver.

But don’t go to K-Mart.

K-Mart sucks.

4.5 hours to Wapner.

#209 Vangrrl on 01.26.15 at 8:53 am

http://www.cbc.ca/news/canada/homelife-superstars-realtor-accused-of-duping-homebuyer-of-12k-1.2928982

#210 mishuko on 01.26.15 at 9:09 am

So at dinner yesterday for my Sister’s birthday. Had a discussion about what we want to do. All of a sudden it got to the point where they were trying to ‘educate me’ on how I need to buy a house sooner or later.

I didn’t argue I just posed a question for thought (that went in and out the other side) of the economy is doing poorly as per the rate cut. How are houses so expensive? What is driving the prices? We can’t just sell the houses to each other without any true economic driving force. And compared us to the states prices.

What makes living hear better than let’s say… LA? or Seattle? They have cheaper houses and a stronger dollar.

My aunts response? I always sold higher than what I baught it for. Look at the history house prices go higher.

I had to sit there and smile. Deep down it was like rubbing my junk against a smoldering iron.

Oh well, can’t cure the sheeple. Only those willing to take the blue pill.

#211 Real Estate Ownership is Not a Sin on 01.26.15 at 9:19 am

All you people bashing realtors and homeowners here, get ready to see what the world is like with renters in charge.

New Greek PM Alexis Tsipras, a Gen Y communist like many here apparently, rents in a shabby Athens building with his wife, who has lost her job as a clerk in a Swarovski jewellery store.

“Mr Tsipras lives with his wife and two children in a flat in a seven-storey apartment block which looks onto a patch of waste ground strewn with rubbish and occupied by two abandoned cottages. ”

Good grief. Home ownership would have helped them build equity and have far better choices than peddling minimum wage retail and joining the communists.

Now he and his basement dwelling friends are going to try to undermine Greece, the Euro zone and maybe the global economy.

Renters united in their jealousy.

This should turn out well. :(

Be careful what you wish for, renters.

http://www.telegraph.co.uk/news/worldnews/europe/greece/11368269/The-flat-from-where-Greeces-Che-Guevara-is-planning-Europes-downfall.html

#212 maxx on 01.26.15 at 9:22 am

“If so, the dudes behind the Commons curtains are geniuses.”

They’d like to think so, however, the dudes behind the banking logos are the ones running the show.

….and the smoke and mirrors show in the emerald city continues….

#213 villagemoron on 01.26.15 at 9:36 am

High listings in Calgary are a signal That many home owners are preparing to receive their pink slip and lose their jobs and incomes.

Low sales volumes means everyone is waiting for the Bottom of the market before they buy.

#214 Big Brother on 01.26.15 at 10:11 am

#42 Smoking Man on 01.25.15 at 4:25 pm
25 kommykim on 01.25.15 at 3:00 pm
Space is vast. Earth is puny. There is so much more interesting RE out there for the Aliens to explore before they visit our little backwater world.
……..
Your wrong, earthlings are a demented spices.. We watch atrocities around the globe, human on human destruction.
Humanity very close to developing interstellar space travel technology.
Reverse engineering of some downed craft..
We are here watching.. We’re not letting you animals off this planet till you mature a bit more..
…………………………………………………………………

That’s my job! I am watching the planet, not aliens.

#215 TorontoBull on 01.26.15 at 10:27 am

so the euro is up vs us dollar today…Some people lost a LOT of money today (you know who you are) :)

#216 Daisy Mae on 01.26.15 at 10:28 am

Re: Signing realtor agreements

http://links.lists.cbc.ca/c/443/55acbb10a276e043d0546418398f0d60d34aef4fd9dade2f48288ab033befc2d23f1f694ea285081

#217 Daisy Mae on 01.26.15 at 10:53 am

“This is exactly what the feds (including Mr. Baird) and the Bank of Canada want the sheeple to believe.”

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

And we’re supposed to believe Harper doesn’t control the Bank of Canada and Poloz? Harper is a dictator — he controls everything.

#218 Alex on 01.26.15 at 10:54 am

Let me tell you what I know for certain.

Just when you think you have things figured out, when you think you can predict an outcome, or the future for that matter, is exactly when the rug gets pulled from under you. What I know for certain is that no one can predict with any certainty what is really going to happen.

An entire gaggle of “smart people” we’re thrown at the last BoC meeting when rates were dropped, another gaggle of “smart people” will be wronged the next one … And so on. Yes I say gaggle, because in the greater picture the majority of us are all like a bunch of geese clucking around just looking directly in front of us for something to eat … We fly south for the winter (figuratively) because it’s instinctive !! I hope you get the analogy.

I spent months researching diesel vehicles until I finally bought one because I was tired of $1.30-$1.40 per liter … Well guess what, diesel is $0.20 a liter more than regular today … I feel like an idiot and I hate diesel … Can barely find a gas station that carries it. When the tank is low and I’m in an unfamiliar area I start to get diesel anxiety knowing I will have to search for a gas station that has diesel !!!

Last summer I remember conversations with certain “smart people” at a particular gathering about oil, ecomony, etc … “It’s a finite resource” … “Price can only go up” … “Buy energy stocks” … “Buy a freakin diesel !!!!!!!” … Although half this country is broke, it’s amazing how many people like to toss in their 2 cents … I say hold on to that 2 cents, your going to need it ;-)

I’m a big listener, I don’t like adding much because I understand the likelyhood of being wrong … I can however speak my mind anonymously on this blog, which I have done 3-4 times now.

Life must be executed like a chess match … Knowing your next move is not good enough when your opponent knows his or her next 10 … Understand that you will be right very few times in your life (that goes for others as well – regardless of who they are) take Garth for example – he, as many others were, completely taken by surprise at the rate cut. Decisions that make sense today likey may not tomorrow (my diesel decision)

The weather forecaster is usually off by a margin – you never get the gas mileage stated by the vehicles manufacturer – paying big NHL salaries does not make a winning team – an apple a day does not keep the doctor away – your umbrella is usually not accessible when it starts to rain AND believe it or not, most people put their snow tires on after the first major snow fall !!!!

I sit here not knowing if real estate will increase another 20% over the next 2 years – very possible – I do not know if the int rate will drop to .5% – I KNOW that I do not know these things … Which ironically puts me ahead of 3/4 of this country who thinks they have that figured out.

If most people knew they knew nothing, that would be something … But they don’t even know enough to know that they know nothing.

#219 Daisy Mae on 01.26.15 at 10:56 am

FINANCIAL NEWS: ‘Bank of Canada’s rate cut could backfire to create ‘grotesque’ debt skew in economy…’

#220 Rational Optimist on 01.26.15 at 11:07 am

102 Smoking Man on 01.25.15 at 7:12 pm

There’s a Libertarian Party federally. They do not yet seem to have a candidate for Etobicoke-Lakeshore, so consider it. You might have fun.

There’s also the Canadian Action Party, founded by Trudeau’s former Deputy Minister, who is as someone else mentioned a believer in alien visitation of Earth.

#221 Leo Tolstoy on 01.26.15 at 11:37 am

#216 Alex on 01.26.15 at 10:54 am

Now THAT is wisdom. Great post my friend.

#222 Mark on 01.26.15 at 11:39 am

Looks like its not above at least one Realtor to take advantage of illiterate clients:

http://www.cbc.ca/news/canada/homelife-superstars-realtor-accused-of-duping-homebuyer-of-12k-1.2928982

Why is it that financial advisors that sell securities are exposed to an extensive regulatory apparatus and are practically crucified if they get unsuitable people into leveraged investments. While the Realtors push people into leverage practically all the time, and get away with it with impunity?

#223 TD Bank on 01.26.15 at 11:41 am

TD Bank just said another rate cut in April. These guys are in bed with Harper and the Bank of Canada. Canada is really a Banana Republic now.

#224 Marco on 01.26.15 at 11:41 am

QE explained:

United States:
http://m.youtube.com/watch?v=PTUY16CkS-k

Jolly Old:
http://m.youtube.com/watch?v=J9wRq6C2fgo

They lost me at printing money (digital input). Is this money backed by taxpayers ? Seems the Fed purchases their treasury bonds from Goldman Sachs not from the treasury department. Someone’s making a profit.
Cheers.

#225 Linda Pearson on 01.26.15 at 11:52 am

#216Alex on 01.26.15 at 10:54 am

Don’t be discouraged Alex. Mark Twain is quoted as saying, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

#226 BCD on 01.26.15 at 12:05 pm

IBM laying off only 110K workers. . .Garth, is this a sign of the strong USA economy you talk about?

Sign of strong competition, is it not? — Garth

#227 TnT on 01.26.15 at 12:10 pm

#216 Alex on 01.26.15 at 10:54 am

Great post Alex

Thanks

#228 Smoking Man on 01.26.15 at 12:14 pm

#218 Rational Optimist on 01.26.15 at 11:07 am
102 Smoking Man on 01.25.15 at 7:12 pm

There’s a Libertarian Party federally. They do not yet seem to have a candidate for Etobicoke-Lakeshore, so consider it. You might have fun.

There’s also the Canadian Action Party, founded by Trudeau’s former Deputy Minister, who is as someone else mentioned a believer in alien visitation of Earth.
………..

Me, in politics, are you crazy. The temptaion to take bribes, skim.. Be an absolute smoking man.

It won’t end well… I’m weak..

#229 Devore on 01.26.15 at 12:15 pm

The Big 5 banks now forecasting a low 70 cent loonie in 2016. I’ll admit I didn’t see this coming. There is also talk of 1.5% Five year fixed mortgages. I definitely didn’t see that coming.

Time to wait out this bubble for a few years at least. My portfolio is just doing fine.

#230 Daisy Mae on 01.26.15 at 12:20 pm

#153: “Far better to do your own DD, educate yourself on the candidates, parties, and platforms, hold your nose, and vote your intent than not vote at all, unless you intend to vote for the incumbent.

I.e. in this case, the CONservatives get the equivalent of one freebie each from all those abstainers.”

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

So….this is really all we can do? Vote for the lesser of two or three evils? Whata system…..

*sigh*

#231 Industrial Guy on 01.26.15 at 12:20 pm

#218 Rational Optimist
Oh, wow!!!
Sheeple
The Harper Government
Alien visitation of Earth.

It all makes complete sense now …… John Baird is the leader of an alien force. He let his true intentions slip out here……

https://www.youtube.com/watch?v=PBFBp0VyEB4

No truer words have ever been spoken in Ottawa:

Stephen Hawking said, ” If aliens ever visit us, I think the outcome would be much as when Christopher Columbus first landed in America, which didn’t turn out very well for the American Indians.”

#232 Nutted wildroser on 01.26.15 at 12:21 pm

Hey Alex, you’ve got a friend in Rummy…

There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.

Donald Rumsfeld

#233 MoneyMyHoney on 01.26.15 at 12:24 pm

#216 Alex on 01.26.15 at 10:54 am
Excellent post! You have figured out and explained in simple terms what economic predictions are.

#234 Retired Boomer - WI on 01.26.15 at 12:24 pm

#216 Alex

Great Post.

Probabilities, Alex. We use them all the time, not always right. Your diesel purchase was on the “probability” it was the better purchase.
So with investing. So with Debt. So with life.

We can only hope we become better bettin’ men. My money says “NO”

#235 Ronaldo on 01.26.15 at 12:28 pm

#165 Ollie –

”The Greeks reluctantly default into the Russian arms. A starving market opens for olive oil, feta cheese and ouzo. Get oil in drachmas and gas through Turkey. They become a hub for gas to EU (the irony). The Russian politicians get a place to bake in the sun this summer.”

So that’s why Vlad let Obama get Cuba. He get’s Greece. Closer to home anyway. Makes sense.

#236 Kenchie on 01.26.15 at 12:32 pm

The financial problems in your head – WSJ

http://www.wsj.com/articles/the-financial-problems-in-your-head-1422148061

#237 CalgaryRocks on 01.26.15 at 12:36 pm

Check out this Interactive Brokers announcement.

Negative interest rates on CHF.

http://tinypic.com/r/6rk45t/8

#238 CalgaryRocks on 01.26.15 at 12:42 pm

#224 BCD on 01.26.15 at 12:05 pm
IBM laying off only 110K workers. . .Garth, is this a sign of the strong USA economy you talk about?

IBM, a dinosaur. Good riddance.

#239 april on 01.26.15 at 12:43 pm

#194 – If you want to go ahead but don’t expect taxpayers to do it. No one forced those people to buy another home before their principle home was sold.

#240 Greater Fool Quality Control on 01.26.15 at 12:49 pm

#216 Alex

Dear Alex,

Please be advised that displays of humility and openness to new ideas such as yours are not appropriate here among the commenting majority.

Neither are admissions of personal fallibility or willingness to admit past failures.

Please considering taking a much more confident and omniscient stance should you wish to post again. There are many good examples of this approach here everyday for you to learn from.

May we suggest, anything involving a belief in the hazards of fluoride, aliens, conspiracies in general and denial of modern science would be a good place for you to begin your next contribution. Generalized misogyny and anti-Asian sentiments will also find many fellow travellers here to support you. At least then you will be readable.

Until that time, however, you are not welcome here.

Sincerely,

GFQC

#241 Setting the Record Straight on 01.26.15 at 12:49 pm

@202 Industrial Guy
Right to work laws are a subsidy??
No go zones don’t exist?
The Southern Poverty Law Center! You take their views as definitive? Really?

#242 HD on 01.26.15 at 1:00 pm

#219 Leo Tolstoy on 01.26.15 at 11:37 am
#216 Alex on 01.26.15 at 10:54 am

Now THAT is wisdom. Great post my friend.

———————

I second that.

Best,

HD

#243 Nemesis on 01.26.15 at 1:06 pm

#It’sBetterInBC,Really… #FecalColiform,MmmmGood!,Or… #SoylentGreenIsPeople?…

[TheTyee] – Victoria’s Secret: Dumping Raw Sewage Like It’s 1915: The icky, smelly, rotten no-good political mess that could cost taxpayers a billion. (Yes, a billion!)

“We plan to undertake some field sampling to confirm the model predictions.” – Chris Lowe, CRD EnvironmentalProtectionDivision [aka “Floaties R’Us]

http://www.thetyee.ca/News/2015/01/26/Victoria-Raw-Sewage-Dumping/

[CBC] – Human composting possible option as Kelowna cemetery fills up

…”Spade says it takes about four to six weeks for human remains to fully compost.

“At that point we would encourage families to come back and take some of that compost — maybe they want to grow a memorial garden in their backyard or plant a lemon tree.”…

http://www.cbc.ca/news/canada/british-columbia/human-composting-possible-option-as-kelowna-cemetery-fills-up-1.2919951

#244 Mr Stats on 01.26.15 at 1:10 pm

No housing correction. Here’s why:

At the first sign of housing correcting, The Bank Of Canada will lower rates to 0%. Still doubt that? I don’t anymore. That will result in massive refinancing and put a medium term (5-10 years) floor under housing.

#245 Franco on 01.26.15 at 1:26 pm

#216 Alex on 01.26.15 at 10:54 am

Nailed it. The prediction game is all folly when you have no facts to back it up.

#246 Franco on 01.26.15 at 1:41 pm

But, but, interest rates were supposed to go up and not down and now they are poised to go down even further. Since oil has dropped so low and no signs of it recovering to the high levels, the BoC must encourage exporting. Get used to it folks we will be at .65 – .75 dollar and stay there, unless oil price recovers.

#247 Koshy Alex on 01.26.15 at 1:41 pm

Any idea how this Vijay Mohan’s hedge fund is doing now

http://www.theglobeandmail.com/globe-investor/meet-the-man-whos-selling-canada-short/article11585150/#dashboard/follows/

http://www.theglobeandmail.com/globe-investor/investor-community/qa-with-vijai-mohan-the-man-whos-shorting-canadas-banks/article11731134/

What he said about the loonie is coming true now, are the banks next????

#248 Victor V on 01.26.15 at 1:43 pm

Shareholders win. Savers and debtors lose.

http://business.financialpost.com/2015/01/26/one-rate-cut-the-banks-are-more-than-willing-to-pass-on-to-you/

#249 Where is Mark? on 01.26.15 at 1:51 pm

Mark, TD bank says 71 cent Loonie coming. Call them and tell them they are wrong. Use your knowledge and enlighten them.

#250 45north on 01.26.15 at 2:03 pm

Industrial Guy and TurnerNation:

The Governor of South Carolina Nikki Haley has a near psychotic hatred of unions. It’s not surprising that South Carolina has no minimum wage. This kinda explains why only 3.9% of workplaces are unionized.
That’s who we are competing against in more and more US States.

so how are we going to compete right now? Launch a NAFTA challenge? I’m not totally against it. From what I’ve heard Bombardier is in deep trouble. Bombardier is one of the few top tier companies in Canada.

What about General Motors and Ford? We’ve poured a ton of money into them. I’ve heard $1 million a worker! GM and Ford damn well better produce! I lose patience with intellectual criticisms of the auto industry – it’s like the workers should start their own car company. The barriers to entry are way beyond what individual people can accomplish – they’d be better off picking up pop cans at the side of the road.

Industrial Guy: I like your stories of individual workers: They’re 50 ish, ex auto workers, the plant closed with almost no notice, EI ran out the first year. They landed a job paying 1/2 of their old salary. Credit cards and lines of credit kept them out of a basement apartment in the crappy part of town. They drive a 2003/2004 Cavalier. Sold the second car so the kids could have something at Christmas. I’m not making this up.

Unions, Rand formula: South Carolina is eating our lunch!

#251 NoName on 01.26.15 at 2:03 pm

#240 Nemesis

@kelwonas proposal, outside of the box thinking is encouraged, but this is a bit too much. Who ever come up with this idea its time to send him back to think from inside of the box, padded one preferably.

lemons they say…
http://youtu.be/9h5mwoTwDBk

#252 Victor V on 01.26.15 at 2:07 pm

Bank of Canada’s rate cut could backfire to create ‘grotesque’ debt skew in economy

http://business.financialpost.com/2015/01/26/bank-of-canadas-rate-cut-could-backfire-to-create-grotesque-debt-skew-in-economy/

The central bank has pointed to signs of slack in the economy and labor market as a rationale for keeping the benchmark rate at 1%, rather than raising it, which would have dissuaded consumers from borrowing more. Poloz said the economy requires exports and business spending to lead the economic recovery.

“The economy just relied so much on housing and consumer spending,” Porter said in a telephone interview. “It’s become almost dangerously lopsided and this will do nothing to help.”

#253 DreamingInTechnicolour on 01.26.15 at 2:12 pm

Guess What ?

http://www.marketwatch.com/story/poor-not-to-blame-for-housings-meltdown-researchers-say-2015-01-21?siteid=rss&rss=1

#254 Moller on 01.26.15 at 2:18 pm

Can someone explain why an increase in interest rate south of the border will cause an increase in interest rate here in Canada?

#255 TurnerNation on 01.26.15 at 2:22 pm

Higher level of comments reflecting a tradable double bottom in oil.

New Ontario bumper sticker: I voted Cons now my sh_t Long Branch bung is worth a mill.

#256 Holy Crap wheres The Tylenol on 01.26.15 at 2:28 pm

#240 Nemesis on 01.26.15 at 1:06 pm

#It’sBetterInBC,Really… #FecalColiform,MmmmGood!,Or… #SoylentGreenIsPeople?…

[TheTyee] – Victoria’s Secret: Dumping Raw Sewage Like It’s 1915: The icky, smelly, rotten no-good political mess that could cost taxpayers a billion. (Yes, a billion!)

“We plan to undertake some field sampling to confirm the model predictions.” – Chris Lowe, CRD EnvironmentalProtectionDivision [aka “Floaties R’Us]

http://www.thetyee.ca/News/2015/01/26/Victoria-Raw-Sewage-Dumping/

[CBC] – Human composting possible option as Kelowna cemetery fills up

…”Spade says it takes about four to six weeks for human remains to fully compost.

“At that point we would encourage families to come back and take some of that compost — maybe they want to grow a memorial garden in their backyard or plant a lemon tree.”…

http://www.cbc.ca/news/canada/british-columbia/human-composting-possible-option-as-kelowna-cemetery-fills-up-1.2919951
_____________________________________________

Doesn’t good old Halifax dump directly into the bay if I recall. Hmmmmmm Lobster……………………….

#257 fancy_pants on 01.26.15 at 2:38 pm

Always best to pitch your tent on the same ground the gov’t does – high ground or low ground, doesn’t matter b/c they manipulate gravity. Well overdue to fold up the umbrella and climb in the boat.

Become a debtor and they will take care of you. Do as they do, not as they say. Their verbiage of warnings can be ignored, that is the only message has been broadcast loud and clear.

#258 BCD on 01.26.15 at 2:38 pm

No housing correction. Here’s why:

At the first sign of housing correcting, The Bank Of Canada will lower rates to 0%. Still doubt that? I don’t anymore. That will result in massive refinancing and put a medium term (5-10 years) floor under housing.
++++++++++++++++++++++++++++++

Yep. . .could not agree more, and considering how mad people are on this blog with a .25% decrease, what do you think 0% or -1% will do?

One of the biggest problems with this blog is that it creates a sort of “fear of motion”. Garth, you post on this blog once a day, but the economy moves so bloody slow that you could live one to two lifetimes in between significant housing devaluations. The real day of reckoning may be 20-30 years down the road–at which point the whole game in economics might change entirely making any move on housing a moot point.

I am a Marxist, so I believe in an ultimate world revolution at some stage to a communist way of distributing wealth globally (at which point I’d hate to be rich). However, this won’t happen until normal people in North America are actually starving. This could be 100-200 years or more. As long as the 1%’ers keep feeding us things will remain much the same. Cheap credit to hang ourselves, a home at any price to live in and a job that helps you scrape by.

Marxist? Who the hell let you in? — Garth

#259 Mark on 01.26.15 at 2:44 pm

“At the first sign of housing correcting, The Bank Of Canada will lower rates to 0%. ”

We’re almost 2 years into the housing ‘correction’ with signs flashing bright and red that the next leg down is going to be far more severe than what has been seen to date. Yet the Bank of Canada only reluctantly lowered the policy rate to 0.75% in reflection of the threat of a deflating economy. And even then, the chartered banks are determined not to pass on a dime of the alleged ‘savings’ of such to retail residential mortgage borrowing consumers. So the public should not expect the Bank of Canada, nor the Government of Canada to bail them out of their bad decisions in terms of buying overpriced assets in what clearly is a declining market.

#260 Nemesis on 01.26.15 at 2:48 pm

#ExecutiveLuncheonTimeInHogTown… #DoYouKnowWhereYourSheepAre?… #”Baaaa”….

http://youtu.be/tQvwiOWpj7o

#261 Mark on 01.26.15 at 2:54 pm

“Can someone explain why an increase in interest rate south of the border will cause an increase in interest rate here in Canada?”

In the short term it won’t, and Canada should expect to run policy rates lower than the USA for at least the next 5-10 years as falling housing prices, a rising CAD$, and domestic debt repayment serves to put a floor under inflation-creating consumer consumption. In the long term, Canada’s fate is somewhat linked to the US economically, hence, we are apt to have similar economic policy.

The US will have to deal with oceans of repatriated USD$ over the next number of years, while Canada’s currency is likely to see an increased weighting in foreign reserve baskets on account of our significant export capabilities. I know it might seem comical in the short term, but the biggest challenge for the BoC over the next decade likely will be to deal with the effects of a high CAD$, and keeping policy rates low is likely how such will be accomplished.

Will RE fall? Of course it will continue its descent. And RE is incredibly poor value relative to other investments available in the Canadian marketplace. But it might not be as quite doomy and gloomy as it would otherwise be in countries which relied upon external funding. The stories I have heard out of “emerging” Europe, where people were taking on mortgages in low-rate currencies such as the Yen and the Swiss Franc, only to see them violently appreciate, are absolutely devastating in comparison.

A US rate increase will impact the US bond market, raising short-term yields. Money does not know borders, thus Canadian bonds rates will follow, all other factors being equal. — Garth

#262 Rational Optimist on 01.26.15 at 2:56 pm

It’s true that South Carolina has no state minimum wage, but that doesn’t mean quite what it might sound like it means. There is a federal minimum wage- about half of the states do not set their own. South Carolina is not too special in this regard, and it doesn’t mean that an employer in South Carolina can offer someone five dollar an hour.

I agree that South Carolina is a very labour-unfriendly state, but the statement “South Carolina has no minimum wage” is a head-scratcher that might make someone less inclined to believe claims made in adjacent sentences.

#263 Blacksheepp on 01.26.15 at 2:59 pm

Where is Mark? # 246,

“Use your knowledge and enlighten them.”
—————————————————-
Yes…ahem…enlighten them, Mark.

#264 Mark on 01.26.15 at 3:07 pm

“Mark, TD bank says 71 cent Loonie coming. Call them and tell them they are wrong. Use your knowledge and enlighten them.”

TD was also steadfast in its views that the BoC would be implementing a policy rate hike. They couldn’t have been anything more wrong. This is why balanced portfolios, and not being extreme in views are important.

I’ve laid out the case why the CAD$ should settle (and overshoot) at much higher levels. The amount of bearishness right now on the CAD$ is so overwhelming that we could see a significant bounce just on relatively minor news.

#265 Nemesis on 01.26.15 at 3:18 pm

#LifeStylesOfTheSwanky&Incognito,Or… #Sinners,Winners&Hodads… #GoWestYoungRiders… #AndLoseTheHarley…

“It doesn’t hurt a celebrity to be seen on a really cool motorbike.” – Dare Jennings, Deus Ex Machina

[LAT] – Deus Ex Machina makes high-end motorcycles and loses money on each one

http://www.latimes.com/business/autos/la-fi-hy-deus-motorcycles-20150124-story.html#page=1

#266 Nutted wildroser on 01.26.15 at 3:29 pm

Way to take the long view BCD!!.. marxism coming to a town near you in 100-200yrs!
The aliens will be here by then for smoking man to chat with.

#267 Victor V on 01.26.15 at 3:32 pm

http://business.financialpost.com/2015/01/26/rbc-lowers-mortgage-rates-on-heels-of-bank-of-canadas-surprise-cut-last-week/

Royal Bank of Canada is the first major lender to lower mortgage rates Monday after five-year bond yields fell in the wake of a surprise cut by the Bank of Canada last week, according to rate-monitoring websites.

Royal Bank, the country’s second-biggest lender by assets, offered a five-year fixed rate of 2.84% on Jan. 24, down from 2.94% last week, according to rate-tracking website Ratespy.com. That’s below RBC’s posted rate of 4.84%. The bank also trimmed its three-, seven-, and 10-year rates, according to CanadianMortgageTrends.com, an industry news website.

The bank joins other lenders standing pat on its 3% prime rate, which is tied to variable mortgages and lines of credit. Prime typically moves in tandem with the Bank of Canada rate, which was cut to 0.75% on Jan. 21.

This is not a direct result of the BoC move. RBC’s 10-basis-point drop tracks bond yields. — Garth

#268 maxx on 01.26.15 at 3:33 pm

#20 CPG on 01.25.15 at 2:46 pm

Swan song and nose dive in one!

We may very well be at the point where Wile. E. is flapping his wires furiously. Thanks for the belly laugh!

#269 Rainclouds on 01.26.15 at 3:33 pm

#253 Medicine Man

“Doesn’t good old Halifax dump directly into the bay if I recall. Hmmmmmm Lobster……………………….”

Uhhh No. Take 2 Tylenol and enjoy that seafood!

http://www.dailycommercialnews.com/Infrastructure/News/2011/7/Halifax-completes-300-million-wastewater-expansion-DCN045180W/

#270 Slo on 01.26.15 at 3:36 pm

I feel like the Feds are just trying desperately to limp along until the election. Watch for more terrible long term choices by our Finance Minister so he can blame the Other Guys if the Cons get the boot.

#271 aL pacino on 01.26.15 at 3:48 pm

#189 PeterfromCalgary on 01.26.15 at 12:47 am
So glad I switched all my retirements saving from 75% TSX index ETFs to 100% US SP500 index ETFs during the Christmas Holiday. Thanks Garth I took your advice to sell Canada and buy America a little late but obviously not too late benefit from the falling dollar.

Garth when will I know it is time to be a Calgary real estate vulture?

****************************************
IN YOUR NEXT LIFETIME!

#272 Lala on 01.26.15 at 3:51 pm

Got some Bombardier stocks a week ago. It’s still on sale guys…

#273 We can't all be first on 01.26.15 at 4:03 pm

http://calgaryherald.com/business/energy/alberta-economic-activity-to-grind-to-a-standstill-in-2015

#274 Vanessa on 01.26.15 at 4:12 pm

A month ago I posted a blog which was picked up by the HuffPost, on what really happens when Canadians cannot pay their mortgage http://www.routleylaw.com/canadian-housing-bubble-its-house/

There was modest traffic but nothing crazy. The past two days, there have been, shall we say, unusual IP addresses showing up as visitors to that blog post on my site.

Among them are several New York investment firms, a couple banks in Europe, and many, many hits from Dubai and UAE. I don’t know what accounts for that kind of traffic but it seems the world is looking at the Canadian housing market with much interest these days.

Please direct your $1,500 cheque for advertising your law firm here to the Ontario SPCA. — Garth

#275 For those about to flop... on 01.26.15 at 4:23 pm

I have asked this question before with no reply so I will try again.
If I have mutual fund with a MER of 2% and inflation is at say 2% ,does this mean I have to make at least a 4% return to post a profit in”real money”?
Somebody help the rookie!

If it’s in a non-registered account, even more, as the returns are taxable. So, don’t buy mutual funds with high MERs that are not tax-deductible. — Garth

#276 Rockin world it is on 01.26.15 at 4:27 pm

DELETED

#277 Industrial Guy on 01.26.15 at 4:29 pm

#259 Rational Optimist
South Carolina does not have a minimum wage.

The Federal Fair Labor Standard Act (FLSA ) minimum wage is $7.25 per hour across the USA but it doesn’t apply to everyone.

Boeing can’t pay less than $7.25 per hour .
McDonalds can’t pay less than $7.25 per hour

Sadly, yes .. an employer in South Carolina can offer someone five dollar an hour in non-regulated businesses. Doesn’t happen often (I hope).

US Federal Fair Labor Standard Act, coverage.
http://www.flsa.com/coverage.html

#278 Industrial Guy on 01.26.15 at 4:38 pm

#247 45north
Eating our lunch?
They can’t afford lunch. How would you do on $7.50 and hour?

#255 BCD
I am a Marxist too!!!! I own all the books by Chico, Groucho, Gummo, Harpo, and Zeppo Marx.

#279 calgaryPhantom on 01.26.15 at 4:38 pm

Been reading a lot of ” I told ya so ” comments lately.
When did blog’s theme changed from financial knowledge to Market prediction? I don’t know. But for sure, it’s taken turn for the worse.

#280 saskatoon on 01.26.15 at 4:50 pm

#255 BCD

most “marxists” are poor.

if they were rich…would they still be marxists?

nope.

it is an issue of logical inconsistency, spawned by jealousy and hatred.

#281 aL pacino on 01.26.15 at 4:52 pm

Just to reiterate.
The cdn Gov will never let The 1 pony trick real estate ECONOMY fall.
Even if it means 40c loonie…..PERIOD

#282 Ray Vazquez on 01.26.15 at 4:53 pm

A 71 cents dollar is not low enough, we need to be like the Mexican peso, 8 to 9 cents then we are talking.

This way inflation will be so much higher and obvious but the Bank of Canada and StatsCan will still not admit it.

This way gold will be worth thousands per troy ounce!

#283 Leo Tolstoy on 01.26.15 at 5:01 pm

#241 Mr Stats on 01.26.15 at 1:10 pm
No housing correction. Here’s why:

At the first sign of housing correcting, The Bank Of Canada will lower rates to 0%. Still doubt that? I don’t anymore. That will result in massive refinancing and put a medium term (5-10 years) floor under housing.

You are likely correct.

As the CAD$ moves towards its natural equilibrium level of $0.70 USD, the BoC will take advantage of a waking manufacturing sector to try and keep housing going. If that fails, then they will drop rates to 0% and maybe entertain the idea of QE.

#284 Leo Tolstoy on 01.26.15 at 5:04 pm

#246 Where is Mark? on 01.26.15 at 1:51 pm
Mark, TD bank says 71 cent Loonie coming. Call them and tell them they are wrong. Use your knowledge and enlighten them.

LOL!

#285 old gringo on 01.26.15 at 5:05 pm

http://www.marketwatch.com/story/down-payments-get-smaller-2015-01-26?dist=afterbell

Are these Canadian and American bankers all nuts?
3% down payment and the gov’t needs to insure these loans.
The banks need to step up and loan WITHOUT gov.t backing them if we are ever to move ahead.

#286 Sean on 01.26.15 at 5:09 pm

Garth, if you one day label a posting “Banksters”, then we will really know you have joined the bullion lickers.

#287 For those about to flop... on 01.26.15 at 5:17 pm

I have asked this question before with no reply so I will try again.
If I have mutual fund with a MER of 2% and inflation is at say 2% ,does this mean I have to make at least a 4% return to post a profit in”real money”?
Somebody help the rookie!

If it’s in a non-registered account, even more, as the returns are taxable. So, don’t buy mutual funds with high MERs that are not tax-deductible. — Garth

Thanks for answering I know your a busy man!
I am only investing inside of my TSFA ,as that is all I feel comfortable with at the moment.

#288 Michael on 01.26.15 at 5:24 pm

Garth,

Concerning MERs, check this article out which shows that there is no benefit whatsoever to deducting fees vs embedded fees. It’s an eye opener, and I suspected this all along.

http://www.advisor.ca/my-practice/are-there-really-benefits-to-advisor-fee-deductibility-172664

-Michael

The articles compares owning a mutual fund with paying an advisor 2.3% in fees. Only a fool would pay more than 1%, unless the advisor also does laundry and grocery shopping. — Garth

#289 Retired Boomer - WI on 01.26.15 at 5:29 pm

#255 BCD

He never said what “type” of Marxist he is. He could be a Harpo, Chico, Groucho, Zeppo, or Karl?

Frankly, kind of like Groucho myself, who got a call from his stockbroker, on “Black Tuesday” 1929 with the words, “the jig is up.”

Tough to top that one!

Watch the commodities though, your window on the future

#290 For those about to flop... on 01.26.15 at 5:29 pm

#275 Calgary phantom.
Been reading a lot of ” I told ya so ” comments lately.
When did blog’s theme changed from financial knowledge to Market prediction? I don’t know. But for sure, it’s taken turn for the worse.

The thing that cracks me up about all the I told you so’s is the Garth is probably more financially better off than any one on this blog so he most likely was the big winner with the recent uptick in the market.
You guys really showed him who’s boss!

#291 Nemesis on 01.26.15 at 5:38 pm

#Some’Marxists’MakeOutBetterThanOthers…

[Xinhua] – Xi stresses adherence to dialectical materialism

“We should grasp new traits in new phases of development, and stipulate guidelines in accordance with reality,” Xi said, adding ideology should be the heart of the Party.

http://news.xinhuanet.com/english/china/2015-01/24/c_133944118.htm

[UK Telegraph] – China’s incoming president Xi Jinping’s family ‘has wealth of hundreds of millions’: The family of China’s next president has amassed a fortune running into hundreds of millions of pounds, according to a hugely damaging new report.

http://www.telegraph.co.uk/news/worldnews/asia/china/9365099/Chinas-incoming-president-Xi-Jinpings-family-has-wealth-of-hundreds-of-millions.html

[NoteToGT: Small wonder that I failed that examination on DasKapital, I’d erroneously postulated that: “Partay constitutes the heart of the cadres’ ideology!”]

#292 For those about to flop... on 01.26.15 at 5:44 pm

I know ETF’s have lower MER ‘s but do you think a 2% MER on a buy it and leave it alone mutual fund is excessive ?
The fund is 60 /40 and has U.S ,Canada and international content.

Of course it is. That’s 2% you have to pay in after-tax dollars. Figure it out. — Garth

#293 @Mark on 01.26.15 at 5:44 pm

Mark said “We’re almost 2 years into the housing ‘correction’”..

LOL. Are you for real? Put your books away and take a walk around Metro Van’s neighbourhoods.

#294 espressobob on 01.26.15 at 5:48 pm

#283 For those about to flop…

You might want to look at ETFs with low MERs? Vanguard rocks.

https://www.vanguardcanada.ca/individual/etfs/etfs.htm

#295 Fred Smith on 01.26.15 at 5:48 pm

First of all, the oil price thing is temporary. A year from now it will probably be back up to mid 70’s. Calgary has always been boom/bust due to oil so nothing new there.

I am surprised the BOC was so quick to drop interest rates. It must be because they are concerned about deflation. So I agree with Garth on that one.

This delays the inevitable interest rate rise again and gives the “house prices will go up forever” crowd something to say “see I told you so” for a few more months.

#296 Mark on 01.26.15 at 5:49 pm

“when will I know it is time to be a Calgary real estate vulture?”

Most likely when housing is 1.5-2X average income, and credit is mostly unavailable. We’re a long, long ways from such.

#297 @Garth on 01.26.15 at 5:50 pm

Marxist? Who the hell let you in? — Garth

The end goal of capitalism combined with innate human greed is concentration of wealth.

Socioeconomic upward mobility is dead for the masses (younger generation). Boomers got lucky. Hopefully the young wake up and change policies… like privatize healthcare and base premiums on age.

But public education has been adulterated so not likely.

#298 For those about to flop... on 01.26.15 at 5:54 pm

I know ETF’s have lower MER ‘s but do you think a 2% MER on a buy it and leave it alone mutual fund is excessive ?
The fund is 60 /40 and has U.S ,Canada and international content.

Of course it is. That’s 2% you have to pay in after-tax dollars. Figure it out. — Garth
——————–
If I wanted a bum kicking I would have emailed my dad!

#299 Vanessa on 01.26.15 at 5:57 pm

“Please direct your $1,500 cheque for advertising your law firm here to the Ontario SPCA. — Garth”

I don’t practice in real estate law, so unless your readers are looking to Immigrate to Canada, which seems unlikely, I don’t see much PR value here.

Keep up your blog – I love to read it.

#300 Mark on 01.26.15 at 5:57 pm

“LOL. Are you for real? Put your books away and take a walk around Metro Van’s neighbourhoods.”

In any market downturn, whether the stock market, housing market, bond market, there will always be small microcosms that outperform. Even in the Great Depression, where stocks lost 90% at one point, there were still stocks that only went higher. Perhaps “Metro Van” is like this. But for most of the rest of the country, the declines have been taking place since the peak occurred in mid 2013 coinciding with Budget 2013’s changes to CMHC subprime mortgage insurance. Only masked by the Realtors’ quotation of increasingly narrow sales ‘statistics’, and a substantial change to the sales mix with higher-end housing making up a significantly greater proportion of the overall sales mix than in periods prior. The resulting drop-off in consumer demand has featured prominently into why the economy is teetering on the edge of deflation in spite of some of the most accommodative monetary policy ever in the Bank of Canada’s history.

#301 Nutted wildroser on 01.26.15 at 6:00 pm

The only way to become a 1% er is to stop paying 2%……
I’m a rocket scientist.

#302 @Mark 296 on 01.26.15 at 6:19 pm

You overanalyze.

Reason ‘rest of country’ not doing well is no population growth. Vancouver and Toronto lead the way and hence the strong housing market.

#303 Industrial Guy on 01.26.15 at 6:25 pm

#247 45north

“It’s like the workers should start their own car company”.

One of the undeniable strengths of capitalism is that some dreams do become reality. Take Elon Musk (Queens University grad) for example. He did start his own car company. His all electric coupe and the recent sedan are a very popular cars in California.

If you live in Silicon Valley, your Tesla S is your daily driver which you park next to your $1.5 million, 1000 Bhp Bugatti Veyron at night.

#304 HD on 01.26.15 at 6:36 pm

#288 For those about to flop… on 01.26.15 at 5:44 pm
I know ETF’s have lower MER ‘s but do you think a 2% MER on a buy it and leave it alone mutual fund is excessive ?
The fund is 60 /40 and has U.S ,Canada and international content.

Of course it is. That’s 2% you have to pay in after-tax dollars. Figure it out. — Garth
————–

Say you have$100K you can invest 4 different ways. How much could it potentially cost you per year?

A. Your MF with MER of 2%: $2000
B. S&P 500 ETF MER of 0.10%: $100
C. TSX ETF MER of 0.05%: $50
D. 3 Fund Couch Potato ETF MER of %0.18: $180
(http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf)

Now tell me, why would you go with option A?

Best,

HD

#305 Mr. Monday Night on 01.26.15 at 6:39 pm

#279 Leo Tolstoy on 01.26.15 at 5:01 pm

“…CAD$ moves towards its natural equilibrium level of $0.70 USD”

—————————–

I wholeheartedly agree with this statement, however much it sucks for those of us who like cross-border shopping. The party is almost over.

For those of you predicting 40 cents and lower exchange rate, get real.

#306 Sideshow Rob on 01.26.15 at 6:43 pm

#216 Alex

Great post!

#307 Mark on 01.26.15 at 6:57 pm

“Reason ‘rest of country’ not doing well is no population growth. Vancouver and Toronto lead the way and hence the strong housing market.”

There’s quite a bit of evidence these days that such is not the case. And those cities, more than most others, have a vibrant transactional activity in higher-end units (upper quartile) which can mask the declines occurring in the lower quartiles of the marketplace.

Population growth is meaningless when the local industry of housing supply has proven to be perfectly and fully capable of delivering enough supply. In fact, there has been an excess of housing supply relative to population growth for the past few years. Absorption of this supply has been predicated on moving traditionally under-represented groups in ownership, including young people, new immigrants, students, and the elderly in need of “assisted living”, into ownership instead of more traditional rental arrangements.

#308 jess on 01.26.15 at 7:04 pm

btw….Rand was on medicaid and social security

Greenspan et al. is in that sheeple category who follow the cult of Ayn Rand
http://wallstreetonparade.com/ayn-rand-the-tea-partys-miscast-matriarch/

http://www.gary-weiss.com/

#309 Alex on 01.26.15 at 7:04 pm

I find the the notion that people accept the term “sheeple” quite disturbing … Have we become that gutless, that afraid of confrontation, so content with status quo that we just accept this notion of us being herded in the directions that have been designed for us to run?

The “system” we live in is a very well designed game of control and manipulation … Case in point – RRSP’s – in theory they are fantastic – earn a return on funds you get a tax credit for (your current contributions) and defer taxes on gains and income to help build a retirement nest egg. Wow, who can argue with this? Let’s look at the flip side – by making contributions you are actually guaranteeing future tax revenue for the government of Canada, that they borrow against today – because they need to – and ensuring that you will pay a higher tax rate on that income tomorrow (because we all know taxes don’t go down) all the while, supporting an industry (financial industry) that earns fees/commissions etc on shuffling that money around and pays taxes (on avg) at the highest marginal rate. This is just one example … But it’s beside the point … And not entirely anti-RRSP, believe me, if you are a “sheeple” you need RRSP’s. But to succeed in this environment you need to become a wolf in sheeples clothing … A $250k RRSP RRIF’ed over 20 years at a 31% tax rate (avg CDN) is approx $17,250 per year !! Enjoy retirement !! Try not to eat 1 box of Mac & Cheese per day, spread it out over 2.

I guess I am more disturbed at how sheeple do not think or perhaps consider “the other side” of things and take things at face value … Maybe its a gift?

A few years back I was reading a news posting on Cisco – they had put out a forward looking stmt that was rather negative … It puzzled me at the time as it was mid quarter and You rarely see that – I just chalked it up as Cisco going to tank and internal revised sales forecasts looked so grim they found it necessary to post this. Stock fell $5/share I believe … Not too long after, they announced a stock buy-back … Light bulb went off !!!! Wow I thought to myself … Proving again, there is always a master plan at work.

My purpose for this post? To spark in readers that there is another side, yes there is a plan whether you accept it or not … You think Wall Street did not know what they were doing selling mortgage backed securities (which included 98% LTV mortgages on the most over-valued properties in the world) and then betting against them? Do you seriously think that collapse was not by design? Look for the flip side on everything and life gets a lot easier, less surprises and less wondering after the fact.

Get with the program sheeple !

#310 For those about to flop... on 01.26.15 at 7:25 pm

#300 HD.
Like I said I’m new to all this ,but I now with the help of You ,Garth and espresso bob finally understand
Thanks for the effort.cheers.

#311 Sue on 01.26.15 at 7:31 pm

#78 Wildrose nutter

It’s called doggerel for a reason!

I take it that you have imbibed copious quantities of Dr. Bell’s Strong Wine in celebration?

#312 Widlerose nutter on 01.26.15 at 7:44 pm

Only the best for the blog dogs….

#313 Nutted doggerel proser on 01.26.15 at 8:08 pm

Of course they know what they are doing.. that’s why they’re the 1%. An unknown known to the sheeple.

#314 Industrial Guy on 01.26.15 at 8:10 pm

#304 jess

The architect of the Rand Formula was the Honourable Justice Ivan C. Rand.

Rand a Justice of the Supreme Court of Canada and had quite an influential life as a university law professor. First dean of law at University of Western Ontario.

Not Ayn Rand

#315 Andrea on 01.27.15 at 2:37 am

Hello Garth. I looked up your article today after an incident in my grade 2 class that has been bothering me. We were making up survey questions and practising collecting data which would then be plotted on a bar graph for our data management and probability unit. I suggested a question about earning allowance vs. being given a weekly allowance. Not one student knew what an allowance was. I was explaining it and the children were almost disgusted. They felt they should get anything they wanted. It bothers me that millions of Canadians have a false sense of security with low interest rates for expensive new homes as well as mounting credit card debt but I didn’t realize the effect on children this was having. Is there anyone in the government that is speaking out against these measures to garner more buying? If we stopped lowering interest rates, would the economy really fall? Couldn’t we have a stricter measure that would help people restrain themselves to avoid disaster should people have to pay all this debt down suddenly? Do you ever talk about teaching children the value of money? Where would a good place be to start? Sincerely, Andrea