The quick & the dead

BIG SMALL from Geoff modified

In a funk over lousy oil-induced earnings at Caterpillar, irritating Greek people and a blizzard, American stocks shed a few hundred points on Tuesday. In fact, so far this year (all 27 days of it), the S&P is down about 1%. In Toronto, despite the oil mess and the dingdongs at the Bank of Canada, the TSX is ahead 1.5%.

This volatility worries some people, especially those who waste their youth and kill brain cells reading sites like the Zero guy. (Suicide is far more efficient, plus you can cancel your Internet provider.) Well, days like these – when you have no idea what’s coming next – show exactly why a balanced and diversified portfolio works.

It’s simple. Take an account that has 60% growth assets (such as large-cap equity ETFs and real estate trusts) and 40% secure stuff (like bonds and preferred shares). When worried money comes out of dipsy stocks, it looks for a safe haven. So while equities get squeezed, bonds get plumped – and the price rises. Or when central banker poodles drop the interest rate, money looks for the best yields, jacking REITs, for example. Or when an unproven leftie who lives in a tenement with his unemployed spouse wins the Greek election, money moves into stable companies in safer lands. The TSX gains.

Since the middle of December, the ETF holding a basket of real estate trusts, XRE, has added about 13%. Bond funds (like XSB or XBB) are ahead 2-4%. Preferreds are up 2%. It all means a balanced and diversified portfolio is positive by several points in the last four weeks despite all the financial mayhem we’re reading about daily.

In contrast, if you like despair, moaning and endless nihilism as much as the wackos who post here daily, there’s always Calgary.

The situation just keeps getting worse, now with monthly sales plunged 36% and active listings swollen by 81.4%. There are 4,500 properties for sale, of which almost 2,700 materialized in the last few weeks. And while there have been Januaries when more houses were up for grabs, this sets a record for the greatest tidal wave of panicked sellers.

No wonder. It seems a safe bet now that oil prices aren’t going anywhere, except maybe down. Goldman Sachs says thirty bucks is possible. Other smarties are projecting a cheap-oil era lasting more than 10 years, with a semi-permanent imbalance between supply and demand. It’s the worst kind of news for the Albertan oil sands, where it costs a relative fortune to dig, heat and suck a barrel of the gooey stuff out of the earth. Of course, this is just what the carnivores in OPEC were hoping for. And are getting.

Suddenly the huge run-up in house prices in Calgary, and to a lesser extent Edmonton and across the line in Saskatoon, looks speculative and rash. When job security and incomes are at stake in a deflationary environment, it matters not how cheap interest rates get or if the banks drop their primes to 2.85% and mortgages to 2%. People used to six-figure salaries now contemplating EI realize quickly how easy it was to buy a house, and what a bitch it is to sell it.

This is the worst part of deflation. Real estate gets illiquid, and the debt grows more difficult to pay. Until you have been in a situation like this – and most people have not, especially the moist Millennials now clamoring for mortgages – you cannot imagine. It’s the deepest of wealth traps.

And expect it to grow deeper, says the brain trust at TD Bank. In fact these guys believe housing prices will fall in eight of 10 provinces this year, with only parts of Ontario and BC being supported by rate-induced hormonal house lust. Even there price gains will be in the 2-3% range

As for Alberta, says TD, expect a 20% sales plunge and prices lower by an average of 3.5% amid “extreme signs of weakness in the housing market.” Of course, it could be a lot worse. And I suspect it will be, given what’s happened in the last thirty days. The layoff avalanche, it seems, has not really started rolling yet. From the hottest province a year ago, Alberta is destined to be the most frigid in terms of growth, possibly slipping into recession.

Now, you may not be able to sell a house in Calgary this month, you also can’t live inside an ETF. So the message here is simple – buy real estate you can afford, as shelter, and never pretend it’s an investment strategy. Follow my Rule of 90 (ninety less your age = % of net worth in your home). Forget mortgage rates. They don’t matter. Ten-year home loans are 1.1% in Japan, and there’s no real estate boom. People in that land have learned in a weak economy nothing beats liquidity.

So, we now have a dangerous, two-city housing bubble, with every other market about to be spanked. Meanwhile, in a world of freaking bankers, morose cowboys, crashing loonies and swooning, house-horny virgins, the dude with the balanced portfolio swaggers serenely through the financial detritus. Make my day, he says.

255 comments ↓

#1 Derek R on 01.27.15 at 6:56 pm

What, me worry?

#2 NorthOf49 on 01.27.15 at 7:10 pm

“(Suicide is far more efficient, plus you can cancel your Internet provider.)” – Best Zero guy mock I’ve heard yet! LOL.

Speaking of deflationary…

Oil major BP freezes pay in 2015 to cut costs:

http://www.reuters.com/article/2015/01/26/us-bp-pay-idUSKBN0KZ1YO20150126

That’s 80,000 folks worldwide with no bump in 2015 pay. They’d better hope the savings from filling up the Hummers and Ford Explosions takes some of the bite out of that 0% pay raise.

#3 Vancouver coastal on 01.27.15 at 7:12 pm

Hmmmm I wonder why Toronto and vancouver are the two cities left without even a hiccup in sales? What can it be that keeps these two powerhouses going especially vancouver ? Why are these places different ? Why why why?

#4 Catalyst on 01.27.15 at 7:13 pm

Although I love your delicious provocative real estate humour, I hope you made your contribution to bell let’s talk campaign…

#5 CDRH on 01.27.15 at 7:14 pm

Hey Garth,
Been following your blog for a while now. Ended up selling my house downtown TO in spring 2013 – made about $400k in profit (bought in the fall of ’08 when the market tanked). Unfortunately I had to give 50% to my ex. Anyways, dragged my feet on investing over the past year and finally had everything into a balanced portfolio (25% US equity, 25% foreign equity, 25% Can equity, and the rest split evenly between ZAB, XRB, XSB, and ZRE) since last November. As of today, it has returned 7.24%. Not bad considering all that’s f’d in the world. The hardest part was trying to figure out allocation across all the accounts… Thanks for all the reassuring advice over the past few years.
CDRH

#6 1st poached salmon for sure on 01.27.15 at 7:16 pm

Your rule of 90 rules…..

#7 Just to be clear on 01.27.15 at 7:16 pm

Which two-cities are you calling a bubble?

Nice analogy – spank doesn’t pop the balloon, just lets some air out, right?

#8 Adam on 01.27.15 at 7:16 pm

Hey Garth. Read your blog religiously. So not surprisingly, I’m a renter in Calgary. In the next couple weeks I’m about to sign a 1 year lease on a new rental. I’m a firm believer that Calgary could be in for as much as a 30% drop in sales. I guess my question is, 30% drop obviously doesn’t happen overnight, do you think I’m safe locking into a lease for another year? I have a sizeable down payment ready to go, and I do want to be ready for when the real deals start presenting themselves. I’m a relatively moist millennial, only 24, so I have plenty of time, I just don’t want to miss the boat. Am I wrong to think these things usually take years to pan out?

Keep on preachin the good word.

#9 Lillooet, BC on 01.27.15 at 7:19 pm

Never trust the “experts” to correctly forecast anything.

“Goldman Sachs says thirty bucks is possible. Other smarties are projecting a cheap-oil era lasting more than 10 years, with a semi-permanent imbalance between supply and demand.”

Did these so-called “experts” predict oil would fall from $100 down to $45? No, of course not. They didn’t see it coming because there is more going on than supply/demand. There are geo-political factors.

And now these “experts” who failed to predict the sudden drop in oil prices, are predicting oil will stay at this level for a long time. Hah! What a hoot. The experts are always make predictions on what’s already happened and project that into the future.

Well, I’ve said it before and I’ll say it again. Oil prices will not stay low for all of 2015. There will either be an OPEC meeting and they’ll jack up the prices suddenly, or there will be some geo-political, terrorist event, or war that will suddenly drive up prices, sooner rather than later.

#10 clanging balls on 01.27.15 at 7:19 pm

Isn’t the little pup-car supposed to be in the truck bed, ready to be the emergency spare vehicle?

or hanging off the back bumper?

#11 LH on 01.27.15 at 7:21 pm

Bonus check hits the bank on Friday.
Will use proceeds to zero out the loan on my primary residence. Nothing like a good old fashioned mortgage burning party!

#12 Leo on 01.27.15 at 7:24 pm

Would you vote for the Tories that got us into this mess?

Also, first!

#13 mitzerboy aka queencity kid on 01.27.15 at 7:25 pm

u got that right garth… party on 60/40 doggz

#14 zedgt87 on 01.27.15 at 7:36 pm

Garth,

You keep claiming that your readers should be holding USA stocks because of the upside potential. You still bullish on American assets? The markets are starting to clearly show an emerging bear.

Where did I say to hold stocks? — Garth

#15 JSS on 01.27.15 at 7:36 pm

CN Rail increases dividend by 25% !

http://business.financialpost.com/2015/01/27/cn-rail-beats-estimates-as-fourth-quarter-profit-rises-33/

#16 A Yank in BC on 01.27.15 at 7:36 pm

detritus. Man.. I had to look that one up.

#17 Smoking Man on 01.27.15 at 7:37 pm

#11 LH on 01.27.15 at 7:21 pm
Bonus check hits the bank on Friday.
Will use proceeds to zero out the loan on my primary residence. Nothing like a good old fashioned mortgage burning party!
……..

Don’t be an idiot, Syndicated commercial mortgages paying 10%. Quite safe.
Put your bounce there.

#18 ShawnG in TO on 01.27.15 at 7:38 pm

hi MrT

disappointed you didn’t mention the story of a guy burned by his BRA featured in MSM yesterday

I’m surprised to see the story. are realturds running out of money to pay his MSM friends ?

#19 unbalanced on 01.27.15 at 7:39 pm

To Garth or any other knowledgeable dogs out there. You mention XRE many times. Do you favor it over VRE or other Reits and why? Thanks in advance.

#20 Karl hungus on 01.27.15 at 7:40 pm

So when prices are flat in 2015 in Edmonton and not down will you let people post those numbers?

#21 Jan on 01.27.15 at 7:45 pm

DELETED

#22 JasonJ on 01.27.15 at 7:46 pm

… Let me be the FIRST to say, why the heck would one even think of buying in Calgary?

There are so many new rental listings appearing every day for 3+ bedroom houses, for a fraction of what a mortgage would cost. Just set up an alert with rent faster and watch.

Even more interesting is watching the rental listings come online for houses that were for sales just a few weeks before. In the west end of Calgary, you can rent houses that were trying to be sold for 900k+ for under 2600 a month.
Yearly rent, minus Cap gains of keeping 170k downpayment invested at 7% = 31.5k – 11.9k = 19.6k

Yearly Mortgage + Maintenance + Property Tax (assuming 20% down) minus (Home equity and appreciation, assuming a generous 3%) = 57.3k – 18k = 39.3k

Double to cost to ‘own’ vs. rent. After 25 years, renter is ahead by 1.4 million, taking into account house value.

House prices are determined by emotion and ability to pay based upon interest rates. Rents are more flexible and, and are determined by incomes of those looking to rent; i.e.) they are influenced by the renters. The deviation in Calgary between buy vs. rent has never been more stark, one simply cannot profit from buying a place (at today’s prices) and receive a sufficient rate of return.

It is as major institutions outside of Canada (i.e DB, Economist, etc) have warned. Prices relative to rent in Canada are some of the worst in the world.

With the already significant increase in rentals on the market (in Calgary), there’s no incentive to purchase at this moment. There’s a long way down to go!

Incidentally, the last time that purchasing in Calgary ‘made sense’ was 2002, when the all-in costs of ownership relative to rents was the same, after a 20% down-payment.

#23 Obvious Truth on 01.27.15 at 7:51 pm

The bank economists of course slowly come along. Like the analysts. And change their target as it becomes obvious.

As for oil. Stick a fork in it. Hope is not a strategy.

#24 Entiled union workers ruining Canada on 01.27.15 at 7:51 pm

Just heard on global bc that bus drivers don’t just get time and a half on sunday but also a bonus on top of it all.
So $35 per hour + 17.50 + bonus…WTF
Who needs a lottery ticket…LOL
Now you can all see why we have one of the lowest productivity levels on earth.
In all fairness, the loonie shpuld ne closr to 40c US.

#25 JasonJ on 01.27.15 at 7:53 pm

#9 Lilloet, BC

And how are you an expert, exactly?

There have been many shocks to oil production over the last 3 months, with negligible effect on pricing. For instance:
– Attacks in Libya, producing ~300k when they typically produce 1.8m
– Problems in Nigeria, Russia, Ukraine, Iraq, Syria… The list goes on. And in this backdrop, prices crashed.

There’s no geopolitical explanation required. Increase in supply, decrease in demand growth. Economics 101. And lots of people did predict the drop in oil prices, and profited handsomely from it. There’s a reason why so many tight oil operators hedged their oil prices to late 2015.

People see ghosts where there are none. None of this is new. The general consensus is that the Saudis are trying to cripple Iran, their longtime nemesis, more than anyone else. Russia, Canada, US Shale Oil are just side casualties.

If there’s going to be a shock, it will likely be with respect to increased production/availability. i.e.)
– successful negotiations with Iran that could release an additional 1m barrels to the market
– Stability returning to Libya, and other places

Goldman Sachs may be ‘evil’, but I’ll trust their predictions on oil prices (i.e. same or lower) over your ill-informed prognosis (i.e. it’s a conspiracy! Zerohedge/Automatic Earth/Savage told me so!)

#26 Ontario's Left Coast on 01.27.15 at 7:57 pm

#11 LH – bonus check hits the bank on Friday…

Congratulations and good on you! Not an easy achievement these days and one that should be celebrated. Enjoy all the extra cash flow!

#27 Le petit prince on 01.27.15 at 8:01 pm

The anglophones are ruining our country. At least in Quebec we have not made such a housing bubble mess. If you forget about our long winters, our lack of quality jobs, the never-ending sovereignty threat, and the endemic corruption, it is truly a wise decision to buy in Montreal an Quebec city. Merde, even Trois Rivieres is a fantastic buying opportunity! Prices can only go up, the province has been at rock bottom for so long, imagine our potential! Buy now, or be priced out of the Quebec market forever!

#28 TurnerNation on 01.27.15 at 8:02 pm

Photo depicts new Whalburger location in front of Soho Met in TO.

#29 Babblemaster on 01.27.15 at 8:06 pm

Toronto RE just keeps going up and up. It appears to be bullet proof. Anyone who ever hopes to own in Toronto should probably just pull the trigger.

Don’t you have an open house to host? — Garth

#30 Zorik on 01.27.15 at 8:06 pm

Today contractors and employees
got a letter for reduction of salary between 7%-10%
in EPCM company in Calgary. We have over 1000 people who work for engineering consulting company.
It is called deflation. Things is getting worse every week
In spite that reduction we have employees who get laid off every week.
Alberta is screwed

#31 Bobby on 01.27.15 at 8:10 pm

#12 Leo,

What’s the present government got to do with the price of oil. Nothing.

If you want a chuckle, ask Justin what he would do to right the economy? Is that a deer in the headlights look I see?

#32 Darryl on 01.27.15 at 8:11 pm

That car would fit in the trucks nut sack .

#33 José on 01.27.15 at 8:11 pm

The Poloz critics are really gathering now. From Bank economists, analysts and even Blog writers. He and his under qualifyed assistants are turning the Loonie into a joke and are not instilling confidence to potential investors into Canada. Harper, fire him or you’re going down with the ship as well.

http://www.bnn.ca/Video/player.aspx?vid=539483

#34 Boombust on 01.27.15 at 8:16 pm

#3

For some weird reason, Vancouver is always the last man standing. This has happened before with recessions, etc.

Beats me as to why…it’ll happen, though.

#35 Roland Michael Mail on 01.27.15 at 8:17 pm

Garth, did you see the Peter Schiff interview on BNN today? He states that, and I’ll paraphrase here..”Canada will raise interest rates before the USA does, and the oil workers in the patch may lose their jobs, but Miners will be hiring as a new gold rush will come to Canada.” Could these very low oil prices help Gold producers save money on energy to mine precious metals? I know you are not a metal head but why not add some XGD for diversification in this unpredictable world?

Because holding XIU gives you all the exposure you need. — Garth

#36 south park....Canada can go back to being an honest ethical shitty thundra on 01.27.15 at 8:19 pm

As far as your bike living in a space bigger than 350sf..
Does that mean we should all rent like real losers despite bank of canada telling us otherwise???

#37 takla on 01.27.15 at 8:20 pm

zero hedge and king world news have to be taken with a grain of salt,known for makeing both bad and good calls on whats around the next bend.Nobody can predict the future of markets/economies as this blog has pointed out repeatedly.

Tsipras seems the unlikely candidate to lead a euro country ,admittedly young and green behind the ears but he has a PAIR and the people of Greece are feed up with austerity and the realizeation that their debt is unrepayable.He’s looking to deal down that debt,courts out on that one.If successful there will be other euro countries lineing up to do the same.

Closer to home I think Van and T.O are going to feel some pain here in the months ahead as these hi prices just aren’t sustainable without an influx of international ,deep pockets.

#38 Canada is just shitty frozen tundra on 01.27.15 at 8:20 pm

Yes, yes ,yes..renting rules…lol
As far as your bike living in a space bigger than 350sf..
Does that mean we should all rent like real losers despite bank of canada telling us otherwise???

#39 Freedom First on 01.27.15 at 8:23 pm

“swaggers serenely & make my day”.

To live in a way that a person avoids making insane decisions is not only positive for ones financial well being, it also allows a person to stay calm and enjoy life in a world full of insanity and chaos. The insanity is always there, and if a person lives in it, the chaos will follow. No exception. I feel blessed.

#40 4 AM Sunrise on 01.27.15 at 8:26 pm

“Dingdongs” at the Bank of Canada? Ding Dongs are chocolately pucks of hydrogenated palm oil goodness with a creamy centre inside. I guess that creamy centre is whatever’s inside their skulls, too.

#41 Jimmy on 01.27.15 at 8:27 pm

Balls to the wall boys!

Brass, cad, black, copper
pliers and clamps

Skin pins…

Bucking up.
Bang bang bang.
Again and again and again.

No pop type for me.

Now that’s fun.

#42 sideline sitter on 01.27.15 at 8:32 pm

Wahlburgers is tasty, but so overpriced… burger, fries and beer is $25!!!

#43 Saltspring on 01.27.15 at 8:32 pm

Vancouver coastal post#3

Do you want to be deleted?

#44 The quick & the dead | Realties.ca on 01.27.15 at 8:35 pm

[…] Source: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/ […]

#45 H on 01.27.15 at 8:37 pm

Goldman: Get Ready For Oil Prices To Go Back To $147

Aug. 6, 2009, 10:58 AM

http://www.businessinsider.com/goldman-get-ready-for-oil-prices-to-go-back-to-147-2009-8

__________________________
Then it went to $35.

The this call:

Jan. 19 (Bloomberg) — Goldman Sachs Group Inc. commodity analyst Jeffrey Currie said he expects a “swift and violent rebound” in energy prices in the second half of the year.

Oil prices may have reached their lowest point already, after falling to $32.40 in mid-December, and are expected to rise to $65 by the end of this year, the analyst said. There is scope for a “new bull market” in oil, Currie said.

World oil demand is likely to fall by about 1.6 million barrels a day this year, the Goldman analyst said today at a conference in London. That’s bigger than the reduction expected by the International Energy Agency, which last week forecast a decrease of about 500,000 barrels a day, or 0.6 percent, this year.

_______________________________

So explain how we are oversupplied by the SAME amount and this time its to go down.

Riiiiight.

#46 Saltspring on 01.27.15 at 8:40 pm

Post #24

“Just heard on global bc that bus drivers don’t just get time and a half on sunday but also a bonus on top of it all.
So $35 per hour + 17.50 + bonus…WTF”

Thats nothing!

Over the weekend, The Provincial Lieberals and the Port of Vancouver created 1450 Container Truck Licences for use in the ports. This new system is just like the decades old taxi system.

The companies and owner-operators who got the new licences just hit the $$ jackpot over the weekend. Each licence will be allowed to be sold on the market. Current estimated value is $1 Million (close to taxi license value). So $1.45 BILLION created out of thin air over the weekend.

A friend’s brother in law held a party Sunday…It was Blur Label all around! Who else are the lucky ones?

http://www.portmetrovancouver.com/docs/default-source/port-users-trucking/update-on-new-tls-applications-application-process-completed.pdf?sfvrsn=0

#47 Steve on 01.27.15 at 8:40 pm

Serenely swaggering through detritus? You just summed up my job. I’m literally shaking. It’s so…true

#48 Leo Tolstoy on 01.27.15 at 8:41 pm

Rates fall. As I predicted. Just like how the CAD $ will continue to plummet.

http://business.financialpost.com/2015/01/27/rbc-cuts-prime-lending-rate-to-2-85-from-3-after-surprise-bank-of-canada-cut/

#49 Lala on 01.27.15 at 8:43 pm

Diversified what!!!! All in or all out for me, love everything on sale, went all in on BBD last week at 2.60. Maybe some Microsoft but its still early, and I love Sundays evening as I don’t have to work Mondays. Sleep like a sheep.

#50 earlybird on 01.27.15 at 8:43 pm

There have been quite a few more layoffs here (Cowtown) than you read about. Word is Opec wont cut alone, and coordinating Nationalized Oil companies to cut production is one thing, it wouldn’t be possible to convince private companies to cut themselves off voluntarily, so the market will force it. I think people are in denial out here, or don’t care or don’t know what to expect….native Calgarians do. Its getting too busy, too expensive, too crowded, and waaay to inflated, egos and trucks….the people buying RE in cowtown better be very long, and WTH is up with the useless rate cut, and what is it saying?

#51 Ralph Cramdown on 01.27.15 at 8:48 pm

#31 Bobby — “What’s the present government got to do with the price of oil. Nothing.”

Nothing to do with the world oil price. But after a decade in power, and with an avowed priority of getting Canadian crude to tidewater, the Harper government has nothing to show for it. A pipe to any of three oceans or the Gulf of Mexico would have gone a long way toward reducing the WCS discount to WTI, but apparently snubbing/ignoring the Premiers, POTUS and people concerned with the environment isn’t the most efficacious way of getting pipe in the ground. Who could have known?

The man’s a failure according to his own avowed goal.

#52 TnT on 01.27.15 at 8:48 pm

#36 takla on 01.27.15 at 8:20 pm

Closer to home I think Van and T.O are going to feel some pain here in the months ahead as these hi prices just aren’t sustainable without an influx of international ,deep pockets.

Here’s your influx of international, deep pockets….

Thousands of millionaires who had been waiting for permanent residency under the program sued the federal government after it wiped out the backlog of applications.

http://www.cbc.ca/news/politics/60-millionaire-immigrant-investors-to-be-offered-permanent-residency-1.2932616?cmp=rss&cid=news-digests-canada-and-world-morning

These Thousands of millionaires are just the ones we know about….

#53 Saltspring on 01.27.15 at 8:54 pm

@51 TNT

Doesn’t matter. Everyone is doing it.

http://www.antimoneylaunderinglaw.com/2014/07/how-canadian-and-us-immigrants-from-china-hong-kong-move-billions-of-dollars-overseas.html

#54 Calgary Retiree on 01.27.15 at 8:56 pm

The Calgary Real Estate Board (CREB), in a desperate move, hired Kevin O’Leary – Canadian financial guru, self appointed Prophet and blowhard – to to a YouTube interview on their web site http://www.creb.com/

This is the same Kevin O’Leary who urged Canadians to sell our banks when BMO’s dividend yield reached 10% in 2009.

According to Prophet O’Leary there is pent-up housing demand in Calgary and he foresees no major price reduction. Go to the 4 minute mark and hear his pontifications from there.

Meanwhile, Calgary sales are down 36% and total listings are up 81% over last January.

Perhaps basic economics are not a strong point with O’Leary.

#55 Timing is Everything on 01.27.15 at 9:00 pm

Bank’s prime down too, more to come.

Hey Garth, your buddy says rate wars possible. Ha!

http://tinyurl.com/pc9y9ht

Thoughts, comments?

Never trust the storyteller. Only trust the story. – Neil Gaiman, “The Sandman”

#56 Eric on 01.27.15 at 9:02 pm

Garth,
Joe has no work and a big mortgage in Calgary.
What are the options?
Thank you,
Eric

#57 Smoking Man on 01.27.15 at 9:03 pm

I’m calling FOMC goes, ah rates will rise, just not yet, very close but not yet.

Traders don’t beilive the bureau of fudge and revise statistics department. The whole motivation for spiking is to show the markets, and the herd, look, we wouldn’t do this if the economy wasn’t on a rush.

Can’t beilive Boeing not saying to em.
Drop the rates you idiots, your going to kill us.. Can you not see there’s a brutal currency war on…

#58 Andrew Woburn on 01.27.15 at 9:03 pm

Professor Derek Scissors is a China watcher for the American Enterprise Institute which, in the spirit of full disclosure for our new Marxist colleague, is one of the running dogs of capitalism. Funny how that phrase has disappeared from Chinese discourse. I also miss “capitalist tool”. I guess its hard to say that with an inscrutably straight face when you have billions in your Bermuda bank account.

He is a tad skeptical about PRC official statistics. Other observers have tried to correlate published GDP figures with numbers that are harder to fudge such as energy use. Dr. Scissors cuts through (sorry) the statistical persiflage by comparing GDP to growth in the Chinese money suppy.

In econospeak, M1 is money ready for immediate use such as chequing accounts while M2 is money you are not planning to spend soon such as savings accounts and GIC’s. Dr. Scissors is a bit snippy about government stories of 7% GDP growth. He thinks if the Chinese were actually spending enough to support 7%, there would be a lot more M1 action and less M2. He concludes:

“The collapse in M1 growth is new news. It translates to Chinese monetary policy being progressively rendered useless – the horse is being led to an ever larger lake of liquidity (M2) but still refuses to drink (M1). Monetary stimulus is incessantly discussed but is essentially impotent.

What matters far more are the fundamentals beneath today’s report, and they appear weak. In addition to rising debt, China is aging. It suffers from both land scarcity and low land quality. The obvious solution is productivity improvement, but productivity may actually be falling.

The Party can report positive GDP results indefinitely. The preponderance of evidence, even using official data, is that economic conditions are considerably worse than these numbers show.”

http://blogs.ft.com/beyond-brics/2015/01/20/guest-post-chinas-real-gdp-is-slower-than-official-figures-show/

#59 bigtown on 01.27.15 at 9:06 pm

It is true real estate in the province of Quebec is depressed and prices are at least 40% below where they should be. Only when Quebecers understand how important and how lucky we are to have them will they be free of that discount. Quebec is our saving grace in Canada and until they get they are our Switzerland…no one wins. I worship Quebec but I live in Toronto because I can be an unadulterated Anglophone even though I am French and prefer most things French. Le Petit Prince is correct.

#60 Ray Vasquez on 01.27.15 at 9:10 pm

Where is Warren Buffet now on how long bonds are the most dangerous investment.

Nobody questions these so called Gurus. He should stick to stocks, equities.

He can be the vulture capitalist and bottom feed on others.

#61 Vanecdotal on 01.27.15 at 9:13 pm

#51 TnT

“Thousands of millionaires who had been waiting for permanent residency under the program sued the federal government after it wiped out the backlog of applications.”

… and lost their case. Ruled in Cdn. Govn’t’s favour last June. As stated in the closing paragraph of the article.

The new more sensible and discretionary (hopefully) IIP coming into effect with an initial 60 test cases total allowed (for now). We’ll see how that may affect local RE over the next year or 2.

#62 Smoking Man on 01.27.15 at 9:13 pm

I love how MSM are saying, the surprise BOC rate cut. Using the word surprise is a way out for not doing there jobs.

It was obvious if you profiled Poloz. Pulled there heads out of the sand, and looked around the world, exports make Jobs, low currency makes exports.

Poloz wanted to pull the trigger for awhile, the oil cave him a good excuse.

Now how do I bet the FOMC tomorrow.
depends where the S&P are at, at about noon. If there down big.. FED can change its mind at a moments notice.

Probably going to sell USACAD in a huge way.

My son, band from trading on days like this.

#63 Keith in Calgary on 01.27.15 at 9:14 pm

Update on one of my co-workers trying to sell their house before they take possession of their new one.

They received an offer yesterday at 10% off………..they countered back high………….guy came back and moved up $4K………..they stuck to their guns and the guy walked.

Told her listings were up 80% today and sales down 30%………and that my prediction was a 20-40% price drop over 5 years.

They’re freaking…………I mean………..who offers on something and then walks ? Isn’t it a game, don’t they want to play ?

#64 ANON on 01.27.15 at 9:18 pm

Notes to self:
Don’t earn too much while in a union, you will be blamed for being a leech.
Don’t earn too much without being in a union, you will be blamed for being a pig.
Don’t earn too little, you will be blamed for being a deadbeat.
Don’t immigrate with too much money, you will be blamed for blowing a bubble.
Don’t immigrate with too little money, you will be blamed for getting into debt.
Don’t issue fiat money, you will be blamed for making money out of thin air.
Don’t blame the issuance of fiat money, you will be blamed for not liking what was made possible by fiat money.

Confusing things, pyramids schemes, they make everyone right at the same time. Oh, and on topic, be quick to learn these notes to self. Or you will be blamed :)

#65 nonplused on 01.27.15 at 9:18 pm

Nope, not 10 years. Shale wells are pretty much spent after 2 years so now that capital isn’t available US oil production will go into a steep decline. Eventually. Not right away it’s still rising.

OPEC is right to keep production flat. Why should they stop producing oil they can get for $20 a barrel so that the US can produce $80 oil? In all mining businesses you exploit the cheap stuff first. Even in forestry you cut the trees close to the road first before you head up the mountain.

Side note: Ever wonder why farm houses are so close to the highway when they could put them at the back of the ranch? Because driveways and power lines are expensive. Think about it.

I’m still not sure why Garth is so against the Zero guy. The website is huge and has 100’s of contributors. They cover everything. Yes, it can be depressing but it’s better to be informed than to watch the MSM. Maybe Garth is just sad they won’t carry his missives. They have commented on Canadian real estate but it’s just too small of an audience to be included daily.

Zero is a fountainhead of overstated factoids and sheer misinformation. — Garth

#66 its OVER for Canadian oil sands on 01.27.15 at 9:20 pm

People of Alberta can keep their heads in the sand but reality is going to hit so hard and for so long that Detroit is the future of Alberta. Your houses will be worth $50k. Oil will go back up because of bla bla bla. Lol keep telling yourself that. People are rushing for the RE exit looking for anyone stupid enough to buy and lose it all.

#67 its OVER for Canadian oil sands on 01.27.15 at 9:24 pm

If I was buying in Alberta I would know 2000 sellers now have two mortgages and need to sell before they go bankrupt. I would off 30-40 % below asking or more knowing they have to take a huge loss or go bankrupt and lose it all. IMO Alberta RE will in 5-10 years be worth the price of a truck.

#68 TakingResponsibility on 01.27.15 at 9:27 pm

#25 JasonJ on 01.27.15 at 7:53 pm in response to #9 Lilloet, BC

Very well articulated response!

There are a ton of really interesting stories about why oil prices are correcting or undergoing “price discovery” – most of them are wonderfully entertaining stories – And, most of the storyteller’s stories are Calling on the evil Saudi’s or OPEC to Just Stop It!!!

Couldn’t be globalized supply and demand – way too simple!

The aggressive producers? Check the graph!:
http://blogs.platts.com/2015/01/02/opec-call-price-collapse/

^One of the better analytic articles I’ve read.

PS. I do think the housing correction will also bring forward many interesting stories… : )

#69 lou on 01.27.15 at 9:28 pm

I think you should move your office to Calgary so you can keep a closer eye on the market there….

#70 JSS on 01.27.15 at 9:32 pm

Re. it’s OVER for Canadian oil sands

__________________

Gotta love this guy!!!

#71 dance...dancetotheradio on 01.27.15 at 9:32 pm

I was just a kid back in the early eighties when interest rates were sky high.
I imagine that housing was just as illiquid then.
It seems logical that between these two extremes – zero interest rates and twenty percent there is some sort of curve, like a laffer curve that could indicate what the optimal interest rate should be.
I’m wondering what that rate would be in this day and age.

#72 Oil Is Sticky on 01.27.15 at 9:37 pm

#24 Entiled union workers ruining Canada on 01.27.15 at 7:51 pm
Just heard on global bc that bus drivers don’t just get time and a half on sunday but also a bonus on top of it all.
So $35 per hour + 17.50 + bonus…WTF
Who needs a lottery ticket…LOL
Now you can all see why we have one of the lowest productivity levels on earth.
In all fairness, the loonie shpuld ne closr to 40c US.

– See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/#comments

——

And it gets better…they want to raise the PST by 0.5% to pay for the entitled public sector workers. Meanwhile how is the private sector doing?

#73 Andrew Woburn on 01.27.15 at 9:40 pm

Who knew that guarding the flame of dialectal materialism could pay so well?

“Not many locals in a predominantly black neighborhood of St. James Parish — halfway between New Orleans and Baton Rouge — know that Wang Jinshu, the Communist Party Secretary for the northeastern Chinese village of Yuhuang and a delegate to the National People’s Congress, is the man at the helm of a $1.85 billion methanol plant to be built in their town over the next two years with a $9.5 million incentive package from the state.”

The really distressing thing is we taxpayers of BC have been paying large to send Christy Clark on endless business development junkets to China and she misses this guy. Maybe he can scrape up another couple of billions for an LNG plant.

China’s Louisiana Purchase: Who’s building a methanol plant on the bayou?

http://america.aljazeera.com/articles/2015/1/26/chinas-louisiana-jindal-methanol-plant-environment-racism.html?

#74 Happy Renting on 01.27.15 at 9:47 pm

#62 Keith in Calgary on 01.27.15 at 9:14 pm

Ouch. They need to re-contact the offeror and agree to the $319k price (or even the 10%-drop price). Tail between your legs (and just breaking even) may be a faraway dream in a few months when lowball offers go deeper than 10%.

They could also unload the new $500k house (perhaps it’s more desirable and will attract close to what they paid?) If either has job worries, the mortgage on the smaller house will be easier to carry. An expensive lesson, but may better their chances of financial survival.

#75 Bobs ur uncle on 01.27.15 at 9:47 pm

Plenty of madness still. Here in BC ski town, our landlord listed the house at 10k under assessed. He then accepted an offer a week later, prob. for just a little less, tho not sure. He’s owned it for quite some time. But now a week after that, appears there may be issues with the financing. Buyers are, not surprisingly, from Alberta. Wondering how this will play out. Thankfully, we’ve already lined up a much better place for March.

But it was interesting and refreshing to hear the realtor talk about lowered interest rates. He thought it would push some people to stretch just that much more beyond their means. At least one out there with some integrity.

#76 Oil Is Sticky on 01.27.15 at 9:48 pm

#52 Saltspring on 01.27.15 at 8:54 pm
@51 TNT

Doesn’t matter. Everyone is doing it.

http://www.antimoneylaunderinglaw.com/2014/07/how-canadian-and-us-immigrants-from-china-hong-kong-move-billions-of-dollars-overseas.html

– See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/comment-page-2/#comment-348472

——

HAM and HSBC (convicted money launderer but no jail time of course) all in one article. Interesting.

#77 industrial Guy on 01.27.15 at 9:49 pm

#24 Entiled union workers ruining Canada

Percentage of worker represented by Labour unions
Denmark ( 80%)
Norway (70%)
Switzerland (51%)
Netherlands (81%)
Sweden (88%)
Canada (33%)
Finland (91%)
Austria (95%)
Iceland (88%)
Australia (43%)
Germany (31%)

We have one of the lowest union participation rates in the Western World. How come many of these countries are doing better than we are? The Harper Government?

#78 Walter Safety on 01.27.15 at 9:50 pm

The guy that drives that truck swaggers too.

#79 From Zero to... on 01.27.15 at 9:50 pm

I think Zero Hedge is a mixed bag – some exceptionally fast, finger-on-the-pulse, trading information, and some juvenile, anti-establishment, tin-foil-hat contributions.

BTW, the “exceptional weakness” in the TD report referred to Saskatchewan’s housing market, not Alberta’s.

Thanks for the blog.

#80 Rob on 01.27.15 at 9:52 pm

Garth,

That last paragraph on tonight’s blog is probably one of your best ever!

Cheers from Mexico

#81 LOL Canada on 01.27.15 at 9:54 pm

GoC is trying to prevent something scarier than a housing bubble or inflation. They are trying to prevent deflation. The problem is that everyone is too over extended.

Heard that there are so many repossessions in cowtown, that they have no place to store all the vehicles. The houses will be next. Should be able to get a house in AB soon for pennies on the dollar.

#82 Oil Is Sticky on 01.27.15 at 9:54 pm

Thats nothing!

Over the weekend, The Provincial Lieberals and the Port of Vancouver created 1450 Container Truck Licences for use in the ports. This new system is just like the decades old taxi system.

The companies and owner-operators who got the new licences just hit the $$ jackpot over the weekend. Each licence will be allowed to be sold on the market. Current estimated value is $1 Million (close to taxi license value). So $1.45 BILLION created out of thin air over the weekend.

A friend’s brother in law held a party Sunday…It was Blur Label all around! Who else are the lucky ones?

http://www.portmetrovancouver.com/docs/default-source/port-users-trucking/update-on-new-tls-applications-application-process-completed.pdf?sfvrsn=0

– See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/comment-page-2/#comment-348477

——-

This is Uber unfriendly Scamcouver. What’s new?

#83 sam on 01.27.15 at 9:56 pm

http://www.thestar.com/business/real_estate/2015/01/27/builder-quietly-cancels-condo-complex.html

#84 Washed Up Lawyer on 01.27.15 at 10:01 pm

#67 TakingResponsibility

Thanks for the link. Good article. Also your shout out to # 25 Jason is something I wanted to do. I am trying to become more patient here and make one comment instead of two.

The article lead me to say “Ergo Bingo”.

#85 Smart car is an oxymoron on 01.27.15 at 10:02 pm

Just saying about the picture the so called smart car carries 2 people squashed in like sardines and the big truck carries 6 people and carries a heavy load and is a heck of a lot safer than a dumb car! So how many dumb cars compare to the truck?

Another issue I’m a small business owner internet based, it is illegal for me to solicit customers at their place of work, i can’t phone them, i cant fax them now i can’t email them because of casl what am i supposed to do because i could get a get this 10 million dollar fine for sending 1 unwanted email! Jobs are scarce and entrepreneurs are screwed. What are the options?

#86 straight six on 01.27.15 at 10:03 pm

re 62, Keith in Calgary
the smart car is cleverly stalking it’s prey.. the next offer will be even less, followed by a swift kick in the diff.
There’ll be a mashing of gears from the big guy as he goes down.. and then silence.

#87 A Conservative on 01.27.15 at 10:06 pm

I’m an Albertan and have been voting for over 30 years. I’ve voted for the Conservatives in every provincial and federal election. A few times I had to hold my nose while doing it.

But Harper and his newest under qualified “tow the party line” stooge – Poloz – will make me abstain from voting or vote for someone else in protest. He’s made me poorer and worse off like most Canadians.

I’ve also stopped donating to the Conservative Party of Canada.

#88 Josh in Calgary on 01.27.15 at 10:09 pm

#8 Adam,
My advice to you would be to value this well earned freedom and flexibility. There’s no rush to buy. Heck take time off to travel before you tie yourself down with too many possessions, wife and kids, etc. if you see a better job across the country (or in another country) take it. The time to buy is when you are certain you won’t be going anywhere for 5+ years. Don’t bother to try and predict when the next housing boom might start. Your financial assets should more than keep pace with house prices.

If/when you notice governments loosening mortgage rules and dropping interest rates again then you can rush to buy. But over all you should buy when you value staying in one spot over flexibility.

#89 TnT on 01.27.15 at 10:20 pm

#60 Vanecdotal on 01.27.15 at 9:13 pm

There are 118,000 millionaires in Toronto and 25,000 millionaires in Vancouver

http://www.huffingtonpost.ca/2013/05/11/richest-countries-cities-world_n_3254976.html

___

45,000 Chinese millionaires left hanging as Canada ends wealth-based immigration scheme

http://www.vancouverobserver.com/news/45000-chinese-millionaires-left-hanging-canada-ends-wealth-based-immigration-scheme

___

The overall queue for federal investor visas included 57,308 applications lodged in Hong Kong and Beijing, according to an Immigration Department spreadsheet obtained by the Post, dated January 8, 2013. That is more than 75 per cent of the whole queue, and separate provincial arrival data indicates about 99 per cent of the applicants are mainland Chinese.

Census data shows 96 per cent of all recent Chinese immigrants to British Columbia live in greater Vancouver and the proportion among the wealthy is even higher

http://www.scmp.com/news/world/article/1423370/exclusive-vancouver-facing-influx-45000-more-rich-chinese

___

There are more Chinese millionaires identified via these applications that want to live in Vancouver than there are actual known millionaires that currently live in Vancouver.

Like I posted many times – at some point New York City flipped from being attainable to unattainable and I can see this is the case for Vancouver and Toronto….

#90 Boombust on 01.27.15 at 10:21 pm

#86

Nice to hear that our sociopathic PM Harper won’t be getting your next vote.

The man is dangerous and a menace.

#91 Victor V on 01.27.15 at 10:28 pm

http://business.financialpost.com/2015/01/27/tim-hortons-inc-confirms-head-office-layoffs/

Scores of Tim Hortons head-office employees were laid off on Tuesday, the expected fallout from the iconic Canadian coffee chain’s merger with Burger King last month.

“We have had to make some difficult but necessary decisions today as we reorganize our company to position ourselves for the significant growth and opportunities ahead of us,” Alexandra Cygal, spokeswoman for the recently formed Restaurant Brands International Inc., said in an emailed statement.

No firm numbers were given, but the layoffs, first reported in the Financial Post last week, were expected to affect hundreds of employees…

Onlookers outside the company’s Oakville, Ont. headquarters on Tuesday described a scene with higher-than-usual security as employees exited the building holding envelopes and boxes of possessions.

#92 waiting on the westcoast on 01.27.15 at 10:29 pm

#84 Smart car is an oxymoron

“Another issue I’m a small business owner internet based, it is illegal for me to solicit customers at their place of work, i can’t phone them, i cant fax them now i can’t email them because of casl what am i supposed to do because i could get a get this 10 million dollar fine for sending 1 unwanted email! Jobs are scarce and entrepreneurs are screwed. What are the options?”

Really??? Internet suggestions only – Pay Per Click advertising on Google/Bing/Facebook/LinkedIn. Sponsor blogs (not Garth’s) or just put your URL in your post (GT will give you a slap on the wrist), create some cool social media and go viral, create some funny (or informational) videos featuring product/service…

Just google “online advertising tactics”

#93 sydcixel on 01.27.15 at 10:29 pm

I came here today hoping to get the inside scoop on the number of layoffs at Tim Horton’s.

#94 Vancouver coastal on 01.27.15 at 10:35 pm

#42 Saltspring on 01.27.15 at 8:32 pm
Vancouver coastal post#3

Do you want to be deleted?
—————————-
For what? Don’t be such a geek, not your blog,go eat some granola

Ps.I get deleted all the time

#95 Musty Basement Dweller on 01.27.15 at 10:43 pm

Garth the results of my balanced portfolio concur with what you are saying in your post today. They have risen steadily through all of this, with the odd daily bump. Thank you so much because you provided the impetus for me to go this route a couple of years ago.

It’s very sad that so many take the real estate cartel bait hook, line and sinker.

#96 Just Saying on 01.27.15 at 10:44 pm

@#14
Where did I say to hold stocks? — Garth

And what Sir, Do the equity ETF’s have in them: Dingleberries ?

An ETF holding the S&P 500 is a proxy for the US economy. — Garth

#97 marnic on 01.27.15 at 10:48 pm

Zero is a fountainhead of overstated factoids and sheer misinformation. — Garth

You mean like the US economy is growing at 5%, that kind of thing?

No, that would be true. — Garth

#98 mr pepsi on 01.27.15 at 10:48 pm

A! I ‘ere dat da combine driving albertans are now getting da transfer payment from ‘da Quebec… talk about da big ‘umilation eh!

#99 OttawaMike on 01.27.15 at 10:52 pm

When the going gets tough in T.O. design a better microhouse:

http://www.slate.com/blogs/the_eye/2015/01/27/cubitat_from_urban_capital_and_nichetto_studios_is_a_compact_home_in_a_box.html

#100 ANON on 01.27.15 at 10:57 pm

http://www.google.ca/trends/explore#q=deflation
All the rage, the latest en vogue craze will create…

#101 Calgary Car Guy on 01.27.15 at 11:00 pm

Re #122 yesterday from the “it’s OVER for the Canadian oil sands guy”

Coal is energy. Alberta has a lot of it and it is very high grade. I understand most people would look at coal as old school but technology is slowly bringing it to the forefront again. I have no doubt as to its future value but I just hope they can figure out how to mine it without raping the landscape too badly. Here is a copy/paste section of one of the Alberta government links I posted yesterday in case you missed it in your haste and laughter.

“Alberta’s coal contains more than twice the energy of all of the province’s other non-renewable energy resources, including conventional oil and pentanes, natural gas, natural gas liquids, and bitumen and synthetic crude.

Coal in Alberta is generally low in sulphur and therefore burns relatively clean compared to many coals mined around the world. Leading edge technologies, such as coal gasification, coal liquefaction, carbon dioxide storage and sequestration, have the potential to allow Alberta to utilize its coal with near-zero emissions into the atmosphere.”

#102 Bottoms_Up on 01.27.15 at 11:03 pm

#86 A Conservative on 01.27.15 at 10:06 pm
—————————————————–
A smart move would be for the Liberals to offer Garth a job. Not sure he’d take it, but it would likely pull them a few thousand more votes.

ps. the reputation of Harper inside Alberta has been polar opposite to the rest of the country for years now….good to see some of that is creeping in to the homeland.

#103 Smart car is an oxymoron on 01.27.15 at 11:04 pm

‘Thanks for advice west coast but pay per click is a waste of time and money for me been there done that and only pockets that got lined was google. My market is narrow email and phoning was the optimal way to reach them and was successful for me. I deal with with high position business people they dont click google ads.

Now with casl look it up its the noose for small business. Its arguably one of the stupidist laws ever. Videos, pr successful campaigns as far as hits but no follow through buyers. Now we are scared of doing anything because of the stupid 10 million fine. Even ordinary people can get a 1 million fine if they send an email to someone who didnt ask for it and you have to supply proof! You are guilty unless you prove yourself innocent. Try operating. Business with that hanging over your head. We never had a complaint but you never know!

Facebook and twitter got it waste of time! Most of all twitter is automated crap, just like ours! Facebook seriously most of the accounts are fake aka fakebook!

Yeah i am cynical I’ve done all these tricks hired people did the whole thing boils down to do what works but now we are screwed by casl!

#104 devore on 01.27.15 at 11:12 pm

#84 Smart car is an oxymoron

Just saying about the picture the so called smart car carries 2 people squashed in like sardines and the big truck carries 6 people and carries a heavy load and is a heck of a lot safer than a dumb car! So how many dumb cars compare to the truck?

The use case that covers 90% of the big truck use is 1 guy and maybe a toolbox.

#105 Ddd on 01.27.15 at 11:13 pm

coil tubing – 60% layoff in one company. Well testing – easy 25% coming within the month.

#106 devore on 01.27.15 at 11:17 pm

#91 waiting on the westcoast

Just google “online advertising tactics”

Nah, too much work. I’d rather just spam people’s mailboxes.

#107 Dr. Pepper wildroser on 01.27.15 at 11:20 pm

Send those transfer payments back mr pepsi…….immediately.

#108 kommykim on 01.27.15 at 11:20 pm

RE:#84 Smart car is an oxymoron on 01.27.15 at 10:02 pm
Just saying about the picture the so called smart car carries 2 people squashed in like sardines and the big truck carries 6 people and carries a heavy load and is a heck of a lot safer than a dumb car!

Both vehicles in that picture are dumb because they both represent extremes. The car is too small and the truck is too damn big.
As for safety, all the truck does is ensure that the dumbass driver of it is the one who survives a collision with a normal vehicle. Also, a jacked up truck is unstable and prone to rollovers. If everyone drove the same type of truck it wouldn’t be so safe now would it?
Dumb.

#109 Big balled wildroser on 01.27.15 at 11:24 pm

We have stiff rednecks to protect us in rollovers

#110 Rexx Rock on 01.27.15 at 11:28 pm

DELETED

#111 Millmech on 01.27.15 at 11:28 pm

Neighbours son just back from Ft Mac today,fairly high up crane operator,told me that 1000 guys got laid off yesterday,no warning at all,said lots of layoffs happening but no one reports it in the media.Its not just the big names letting people go everyone is battening down the hatches.

#112 Vanecdotal on 01.27.15 at 11:30 pm

#88 TnT

Thank you for the links, but I am quite familiar with these stats.

My point is this since this issue has become a potential election issue for the current Govn’t. they have now finally backpedaled on the previous policy that ALLOWED the majority of the millionaire investors you are referencing in under the old scheme in the first place.

The ones that are already here have been already been “priced in to the market” so to speak.

Going forward, the test group of 60 TOTAL NEW millionaire immigrants (that’s a whopping sixty TOTAL for ALL of Canada) will also be under a microscope to ensure they are behaving in accordance with the new rules and are in fact providing a net economic benefit to Canada.

This is a DRASTIC reduction in quota than what was previously allowed. The 45k millionaire immigrants that are still trying to get in may have a very loooong (decades?) wait ahead of them. This policy may yet be further refined in the future as well. Sure it could loosen, or just as easily tighten further depending on the whims of TPTB.

It is a new ball game now, especially when combined with China actively seeking to repatriate unlawfully obtained income, that may have a significant effect on local RE going forward, imho.

#113 B Riding Dirty on 01.27.15 at 11:31 pm

What a shark Warren Buffett and JORGE PAULO LEMANN are. I thought it was a good thing for Canada the acquisition of tim hortons from Burger King. I thought BK was moving the head office to Canada to create jobs, and save money on tax or something…. instead I here they are slicing it right down and stream lining it 200 got fired today. Confused?.?.?

Naive. — Garth

#114 Andrew @ 306 on 01.27.15 at 11:42 pm

A whole lotta union-hating going on. Seems like some folks in the private sector need to realize that a union’s a good thing. The gov’t failures to budget to pay workers a decent salary is not the union’s fault. And anecdotes make for fun fodder in comment sections, I’m sure, but they don’t help anyone, or really lead anywhere.
If you are so hurt by other people’s salaries, perhaps you are in the wrong profession, or should look at starting a union(or joining one), if you are so slighted that the union’s collective bargaining gets you so riled up.
The management is out to protect the bottom line(whether they are government or corporate), the union is out to protect the workers. Done right, a really nice balance can be good for both.

#115 lawboy on 01.27.15 at 11:57 pm

Very interesting….

http://www.thestar.com/business/real_estate/2015/01/27/builder-quietly-cancels-condo-complex.html

#116 Smart car is an oxymoron1 on 01.28.15 at 12:05 am

A person only lives once if albertans love their big trucks… So what thats the least of the problems!

Spam people to death what a joke ever hear of a spam filter we send out once or twice a year letting our industry know what new services we are offering to stay ahead of our competition… Hardly spamming to death… The thing is you are paranoid and thing the whole world is out to get you. Or should i use snail mail and waste paper and the fuel needed to deliver the mail and overpaid postal workers only to have my letter thrown in the trash. Email is a cheap effective way for thousands of Canadians to do business… You sound like a government employee that has no clue how small business in Canada operates.

#117 Honesty is still the best policy on 01.28.15 at 12:10 am

Central Bank BS is bursting:

URL:http://moneyweek.com/paul-hodges-interview-the-great-unwinding/

#118 Kenchie on 01.28.15 at 12:18 am

You know we are in trouble when Megan McArdle opines on Canada. (She’s quite focused on her own little world)

“Will oil’s big drop pop Canada’s housing bubble?”

http://business.financialpost.com/2015/01/27/will-oils-big-drop-pop-canadas-housing-bubble/

#119 Nemesis on 01.28.15 at 12:18 am

#OnceUponATime… #InTheWest… #QuickMattered…

http://youtu.be/J0BrdMi-oyc

#120 Joseph R. on 01.28.15 at 12:19 am

#109 Millmech

“,no warning at all,said lots of layoffs happening but no one reports it in the media.”

Publicly traded companies, like Suncor, Syncrude, ConocoPhilips, Total,… will announce their layoffs in the media first, often before the employees are even notified, as they are legally obligated to publicly announce any changes in the operations that can affect their share prices. Private companies are not under such obligations.

That’s why when you heard about big layoffs in the media, you only see the tip of the iceberg. There is a snowball effect for any major layoffs due the complex and interdependant relationships existing between drilling companies and rig services providers.

#121 DisgustMadeMePost on 01.28.15 at 12:29 am

#71 Oil Is Sticky on 01.27.15 at 9:37 pm

The private sector??

I am making the same wage/hour as I made when I first joined the company almost 10 years ago!! How am I doing?? I’m cranky!!

The field I’m in suffered somewhat of a glut in this last few years and though I am expected to learn new skills and run faster, I make the same amount. Some days I’m just happy to have a job with colleagues I can call friends. But EVERYday I find I am trying to figure out what else I can do.

Retirement is probably 7 years away … With investments I might be able to coast ….

#122 Retired Boomer - WI on 01.28.15 at 12:38 am

Interesting times. There appears a world wide slow down in progress, the US will just be the last to notice it.
I am quite certain with global marketplace and crappy earnings reports from many multinationals today, yes we will notice it.
So, what? Gas is cheap, Canada may be soon seeing its “eviction notice” based on late payments for truck nuts, and Bermuda beckons on these cold January nights.
Now, Horton’s hears a WHO… Smoking Man is giving out investing ideas rather than allowing a guy piece of mind by being mortgage free – a rather RARE accomplishment these days.
Time to do something constructive, like sleep.

#123 waiting on the westcoast on 01.28.15 at 12:41 am

#102 re: spam

I noticed that you didn’t mention linkedin. If you have a compelling offer, I would suggest a sponsored update to your exact target market by geo, by type of industry and by title…

For further knowledge, I offer consulting. ;-)

#124 Victor V on 01.28.15 at 12:45 am

Smaller commissions could lead to fewer real estate agents

http://www.cbc.ca/player/News/Business/ID/2650440374/

#125 Half Full on 01.28.15 at 12:51 am

Correction: Make my day,SHE says!

#126 Victor V on 01.28.15 at 12:53 am

Falling crude prices will leave oilfield services companies ‘parked,’ may trigger layoffs

http://business.financialpost.com/2015/01/27/falling-crude-prices-will-leave-oilfield-services-companies-parked-may-trigger-layoffs/?__lsa=171c-a89d

#127 Marco on 01.28.15 at 12:54 am

@Vanecdotal

The rhetoric that they will be under a “microscope” to play by the new rules, just says to me that they let anyone in with money to buy realestate under the old program. Now they are trying to show the public they are more responsible and looking out for the overall economy. Also we have an immagration program as well as the Quebec investor immagrant program, so this 60 number screams political grandstanding.

#128 Borrower on 01.28.15 at 12:59 am

Those who rob tomorrow to pay for today are heading over a cliff. Go Albertans!

#129 Obvious Truth on 01.28.15 at 1:04 am

Canada is going to be a disaster for the forseeable future. No way around it. Hold on to your nut sac. The bad news is just beginning. This type of reset can take years. The cost in watered down dollars will be very hig. Pbo priming us for what’s coming. Blame oil of course. Not policy. Nobody in the rest of the world cares about oil. They want it to go to $10.

The question is how can perspective be lost so easily. Who will answer to this. What the hell was everyone thinking. An unprecedented drain of wealth. The opposite if what everyone thought. It’s always that way.

We now get to witness the real cost. It’s societal. Heartbreaking. There’s no saviour coming. They have your money.

#130 boonerator on 01.28.15 at 1:10 am

Just saying about the picture the so called smart car carries 2 people squashed in like sardines and the big truck carries 6 people and carries a heavy load and is a heck of a lot safer than a dumb car! So how many dumb cars compare to the truck? – See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/#comments

I’ve got a Smart and a truck and the Smart is roomier. High head clearance and lots of legroom and the metal cage that holds the plastic with airbags front and side will protect us from most collisions. Maybe not the monster truck, but there’s a good chance it will have rolled over into the ditch before reaching us.

Check out the stats on the people who thought that SUV could never harm them.

http://consumer.georgia.gov/consumer-topics/suv-rollover-accident-and-death-statistics

“SUVS are safe and real estate can never go down.” How many people who believe the first statement also believe the second.

#131 Oil Is Sticky on 01.28.15 at 1:25 am

#101 Bottoms_Up on 01.27.15 at 11:03 pm
#86 A Conservative on 01.27.15 at 10:06 pm
—————————————————–
A smart move would be for the Liberals to offer Garth a job. Not sure he’d take it, but it would likely pull them a few thousand more votes.

ps. the reputation of Harper inside Alberta has been polar opposite to the rest of the country for years now….good to see some of that is creeping in to the homeland.
——

There is no one to vote for. Absolutely nothing will change unless our whole system of govt changes. Too bad we need to see a Rome type collapse before that happens.

#132 james on 01.28.15 at 1:39 am

Good lord. Back in the GTA for the first time in a couple of years. This place is even more crowded and traffic-laden than I remember.

North York looks like something out of a soviet industrial city – the type built in some unforgiving part of Siberia. Riddled with power lines, ugly apartment buildings, cookie cutter houses, etc.

I don’t see why people would go deep into debt to live in this city. Honestly, there are better places. Not to mention that there are few signs of productive activity, as opposed to consumption (e.g., retail, warehousing, distribution, entertainment, etc etc).

#133 whitehorn on 01.28.15 at 1:49 am

I was watching BNN recently and one of the analysts mentioned the USA wants to create more house building to get adult children out of the house and more independent, as it has been challenging times for that age group since the financial meltdown. One thing in my opinion the expected decline in real estate will be very beneficial to Canada, with price declines expected for houses right across Canada. It is for our children can do the same and be able to afford a house which basically is beyond reach. I am all for houses to loose 100k or more all across Canada. It may hurt the economy in the short term, but the long term the benefits far outweigh for our future children.

#134 Irwin on 01.28.15 at 1:49 am

Where are all the warmistas? Haven’t noticed any – but have to admit that I can’t handle more than a quick skim of the comments.

The warmistas were doing marches and protests in NYC before the cold, dark spell set in. Now they’re gone!

I sincerely hope they get a full measure of what it could be like to live without a carbon-based economy. We’re only getting a taste of what might be coming.

Never mind the few billion$ involved with burning black goo for heat and transportation. Just look around your house and office – is there ANYthing not made from the devil’s excrement?

Short, eye-opening read from ARC Financial:
http://arcfinancial.com/research/energy-charts/the-oilmageddon-of-2015/

#135 Spaccone on 01.28.15 at 2:01 am

Sounds like the kind of company one would be happy to leave anyways and will probably avoid what will become a more hellish work evironment. Is this just an American management style for exits or is this standard in other parts of the world?

> Onlookers outside the company’s Oakville, Ont. headquarters on
> Tuesday described a scene with higher-than-usual security as
> employees exited the building holding envelopes and boxes of possessions.

#136 As Is Old Man on 01.28.15 at 2:04 am

Amazing. This has to be one of the most ridiculous articles I have ever read:

“Ottawa new home sales forecast to jump 10 per cent this year”

http://tinyurl.com/kqd3rev

#137 Bobs ur uncle on 01.28.15 at 2:04 am

#100 Calgary Car Guy

“Leading edge technologies, such as coal gasification, coal liquefaction, carbon dioxide storage and sequestration, have the potential to allow Alberta to utilize its coal with near-zero emissions into the atmosphere.”

I can remember Ralph talking up this magical “clean-coal” many years ago. Straight up BS, but the public eats it up.

#138 Mark - OK, lets agree Toronto has another 20y of rising prices on 01.28.15 at 2:09 am

OK, lets agree Toronto has another 20y of rising prices, averaging 6% the actual real inflation.

So, houses are not appreciating 6% a year. They just hold value while money becomes sensibly worthless at the quality grocery stores and for any quality service or product (national or international) you require.

PROTECT YOURSELF.

#139 dienekes on 01.28.15 at 2:21 am

Building my portfolio for my E2 visa application.
Tired of the crap here.
I bet those dumb idiots at HBMS will strike this summer as well. Few steelworkers had picket signs out front today, in paper. One had written “Just practising”
Practicing for what, unemployment.
Dont these fools see Hudbay is already shipping the copper con? How long do they think it would take Hudbay to shut the Zinc plant down and ship out the zinc con?
I would

#140 Entrepreneur on 01.28.15 at 2:26 am

#84 Smart car is an oxymoron…a few suggestions: facebook etc., old-fashion mail, business card with your email so they can email you first, to get around the heavy fine.

The Conservatives and the Liberals are the same, that is my experience. They had their time; they are out-dated.

#141 Tamsen on 01.28.15 at 2:45 am

” TnT on 01.27.15 at 10:20 pm

#60 Vanecdotal on 01.27.15 at 9:13 pm

There are 118,000 millionaires in Toronto and 25,000 millionaires in Vancouver

http://www.huffingtonpost.ca/2013/05/11/richest-countries-cities-world_n_3254976.html

___

45,000 Chinese millionaires left hanging as Canada ends wealth-based immigration scheme

http://www.vancouverobserver.com/news/45000-chinese-millionaires-left-hanging-canada-ends-wealth-based-immigration-scheme

___

The overall queue for federal investor visas included 57,308 applications lodged in Hong Kong and Beijing, according to an Immigration Department spreadsheet obtained by the Post, dated January 8, 2013. That is more than 75 per cent of the whole queue, and separate provincial arrival data indicates about 99 per cent of the applicants are mainland Chinese.

Census data shows 96 per cent of all recent Chinese immigrants to British Columbia live in greater Vancouver and the proportion among the wealthy is even higher

http://www.scmp.com/news/world/article/1423370/exclusive-vancouver-facing-influx-45000-more-rich-chinese

___

There are more Chinese millionaires identified via these applications that want to live in Vancouver than there are actual known millionaires that currently live in Vancouver.

Like I posted many times – at some point New York City flipped from being attainable to unattainable and I can see this is the case for Vancouver and Toronto….
– See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/#comments

West Vancouver is total haven for rich foreigners. It’s changed so much in 25 years. Many empty homes. The other day we walked by another one with mannequins in the windows near Lighthouse Park …

#142 NEVER GIVE UP on 01.28.15 at 3:07 am

The drop in Interest rates is pure politics.

Don’t EVER believe the BOC is independent of the rulers.
Harper is hoping that by Election time the low dollar is going to produce sizable job numbers in Ontario.

The US economy on rebound and the low dollar will drive purchasers to Ontario in droves as they source manufacturers.

Another Harper Hustle.
Fool me once shame on you.
Fool me twice shame on me!
He is insidiously clever, I will give him that.

#143 NEVER GIVE UP on 01.28.15 at 3:18 am

DELETED

#144 NEVER GIVE UP on 01.28.15 at 3:26 am

Our good government is solidly CRONY CAPITALIST.
They have caved into demands from the port trucking lobby to simply kill about 500 small businesses and give all the business to large businesses.

Here is how it works.

There are about 2000 odd trucks picking up from the port of Vancouver. And for some reason they have to pay $300 per year to access the containers in the port. (another anti small business and anti right to work initiative.)

So anyway now the new deal is to get a license you have to pay $35000.00 per year for a total of up to 15 trucks to access the port.

That clearly eliminates about 500 of the independent guys who do not know how to amalgamate and become a “big” trucking company.

For example I use a company that has 10 large trucks capable of picking up the containers from the port. They just emailed me to say they are q

#145 NEVER GIVE UP on 01.28.15 at 3:29 am

Sorry accidentally hit enter:

continued from last post.

quitting the business.

So now I have to find a large company that has much less competition and I know the writing is on the wall. MORE MONEY.

It used to cost $350 to bring a can to my place in Langley.
Now it is already $450 in one year.
Soon it will be Sky high???

#146 NEVER GIVE UP on 01.28.15 at 3:38 am

BTW the reason given last year during the truckers strike for the deal was.

TOO MUCH COMPETITION!!!

WTF?

So the crybabies are too weak to get up in the morning and compete?

#147 mac on 01.28.15 at 3:42 am

There’s now a dangerous bubble in two cities? You mean the rest of Canada is no longer in a bubble after prices have flattened? That wasn’t too painful, was it?

#148 mac on 01.28.15 at 3:44 am

Vancouver Coastal: I know. I love here too. I just can’t figure it out! Whatever could it be?

#149 It's a crock on 01.28.15 at 4:03 am

Since when has ‘Goldman Sachs’ become a beacon of stability or honesty? They have been putting out press releases faster than a Taco Bell taco through my colon. Goldman is famous for trading……they might just be juicing ( scaring the pants of nervous nellies) the downside for the shorts they’ve created a market for. That’s what Goldman does….it is not a hand holding agency. Take Goldman’s ‘advisories’ with a large grain of salt.

#150 Don on 01.28.15 at 4:35 am

109 Millmech on 01.27.15 at 11:28 pm
Neighbours son just back from Ft Mac today,fairly high up crane operator,told me that 1000 guys got laid off yesterday,no warning at all,said lots of layoffs happening but no one reports it in the media.Its not just the big names letting people go everyone is battening down the hatches.
**********************************

I have been hearing stories as well, friends getting off the plane in Alberta, and a bearer of bad news is waiting there to give them their pink slips and tickets home (for regular employees).

I have also heard from a few HR personnel that the resumes with alberta experience are now starting to roll in the doors of the few remaining pulp and lumber mills.

This will be happening up and down Vancouver island. All the young men and women who spent big in the past are now coming home without pay. I hope some saved.

Can anybody verify the story I am hearing in regards to a high demand for flights out of Calgary. I hear demand is high at the moment.

To all those who think the rate decrease will save current housing values must remember that house values crashed in the US and rates were low. Consumers are over leverages for the most part. They can’t afford what is coming. Why on earth do we have to repeat the mistakes of the past over and over and over again…all while thiking it is different this time as we are far more advanced in terms of technolgoy but maybe behind the curve when it comes to learning from excessive human nature.

Makes me wonder if there is a planet out there with a population dedicated to practising common sense, based on factual data. There has to be! Ying and Yang Right!

#151 palebird on 01.28.15 at 6:47 am

#53 O Leary is a blowhard. A professional one. This is what he does. You could call him many things but it all amounts to the same. He makes a lot of money spouting whatever.

#152 Brydle604 on 01.28.15 at 8:44 am

Interesting analysis with scary predictions.

http://journal-neo.org/2015/01/27/pop-goes-the-weasel/

#153 Capital One on 01.28.15 at 8:44 am

#112 Andrew @ 306
A whole lotta union-hating going on. Seems like some folks in the private sector need to realize that a union’s a good thing. The gov’t failures to budget to pay workers a decent salary is not the union’s fault. And anecdotes make for fun fodder in comment sections, I’m sure, but they don’t help anyone, or really lead anywhere.
If you are so hurt by other people’s salaries, perhaps you are in the wrong profession, or should look at starting a union(or joining one), if you are so slighted that the union’s collective bargaining gets you so riled up.
The management is out to protect the bottom line(whether they are government or corporate), the union is out to protect the workers. Done right, a really nice balance can be good for both.

===========

Unions are out to protect unions. They kill jobs in the long run. The only place they can really exist is in the public sector where there is no competition to weed out the inefficient.

CO

#154 rosie "moving forward" in the knowledge that, "this won't end well" on 01.28.15 at 8:55 am

Amazing that this guy is the business reporter. Just figured out how money works. The same reasoning applies to virtually everything. Especially real estate. P.S. Kevin O’Leary is a whore.

http://www.cbc.ca/news/world/the-spreading-alchemy-of-central-bank-money-printing-1.2933964

#155 Victor V on 01.28.15 at 9:04 am

https://ca.finance.yahoo.com/blogs/pay-day-/boc-rate-cut-sets-table-for-another-nutso-spring-213015208.html

BMO Chief Economist Doug Porter made his bank’s rate-cut call through gritted teeth, noting the move should only fuel what’s already a frothy (economist-speak for over-valued and ultimately doomed for a pullback) housing market.

“After four years of scolding Canadians about taking on too much debt, the Bank (of Canada) has pretty much said ‘Oh, never mind, we’ve got your back’, despite the fact that the debt/income ratio is at an all-time high of 163 per cent,” he wrote in a research note.

And while former Finance Minister Jim Flaherty intervened in the mortgage wars two years ago, quietly convincing Manulife to abandon its then-unheard-of low rate of 2.89 percent, current Minister Joe Oliver has indicated he likes to leave this kind of thing up to the market.

With the current rate outlook, the market dictates mortgage prices will go down, and the season of housing bidding wars will soon be upon us.

#156 Smoking Man on 01.28.15 at 9:05 am

Breaking News

Singapore just joined the currency wars.
US treasuries on the short end of the curve on fire.

So I’m Selling USACAD.

My bet :Yellen to go soft on rate hike talk. If not, she’s a real phyco living in delusion.

#157 Mark in Perth on 01.28.15 at 9:21 am

Parallels between Australia and Canada

I was born in Edmonchuk, spent 20 odd years in Vancouver, stops in S’toon and Cowtown, have now lived in Western Australia for about 20 years. Ha, left Vancouver because I couldn’t afford RE there, now it’s the same here.

Both countries have economies dependent on commodity exports. Canada, oil. Australia, iron ore and coal. All three have dropped considerably. Such is the nature of commodity prices worldwide.

We haven’t seen the wholesale layoffs in the mines yet, but it is only a matter of time before it happens. So many young people making six figures with little more than a high school diploma, 5 or 6 years of high living but no savings when the party is over.

I’ve been following this (pathetic :) blog for several years, and I have found it useful. Comments section, not so much. So, too, with that Zero guy they’re talking about. Lots of doomers there, to be sure. But that’s the fun part of having a brain, learning to filter the gems from the gravel. Man, so much gravel to get through for each gem.

So, thanks Garth for your blog. As for Smoking Man, I giggle every time one of his posts is deleted. His posts give me cancer. I can’t be alone in this.

Lastly, finally in control of my superannuation money (I’m 51) and going to use what I’ve learned here to invest, not gamble.

#158 LH on 01.28.15 at 9:33 am

I have heard good things about private mortgages, but is there any way to make them more tax efficient? 10pct taxed at top marginal normal income is not so hot anymore.

Re smoking man 17

#159 Danforth on 01.28.15 at 9:51 am

January a bad month you say?

I’m up 3.86% in the first 28 days of the year, including yesterday’s dip. Yes, some of that may include some year end adjustments from funds and things which hit your account in January…but still, its a banner month for me.

#160 danielm on 01.28.15 at 9:56 am

Many of you live with your head in the sand. Source one! article from the zero guy that is inaccurate in any! way? Its called reality. This blog is spot-on in the realestate sector but misses the target on the massive geo-politics ongoing that will bankrupt anyone who is unaware. That’s fine, for there to be winners there must be losers. Money isn’t lost, it just changes hands. Going from weak to strong.

For the past five years, during which a balanced portfolio has been enjoying double-digit returns and the US economy has been improving, the Zero guy has been telling you to hide under a rock. Wrong. — Garth

#161 Taber on 01.28.15 at 9:58 am

http://ca.reuters.com/article/businessNews/idCAKBN0L11KU20150128

“Canada revisions show bigger job losses in December”

#162 rosie "moving forward" in the knowledge that, "this won't end well" on 01.28.15 at 10:00 am

Statistics Canada is a joke. Well done Mr. Harper. No one knows what to believe.

http://www.marketwatch.com/story/canada-december-job-losses-deeper-after-revisions-2015-01-28-84853831?link=MW_home_latest_news

#163 York_UK on 01.28.15 at 10:05 am

Canada Just “Revised” All Of Its 2014 Job Gains 35% Lower

oops!

#164 danielm on 01.28.15 at 10:12 am

CITICORPSE- $1.37 Trillion in Assets to back $70.2 Trillion in Derivatives
JP MORGUE’n- $2.0 Trillion in Assets to back $65.3 Trillion in Derivatives
GOLDMAN SACKED- $111.7 Billion in Assets to back $48.6 Trillion in Derivatives

This will turn out well for paper.

#165 Smoking Man on 01.28.15 at 10:13 am

Oh O

Abort the forex bet.. Canada just revised Job Gains lower. 35%.

A other BOC cut most definitely coming now.

#166 Kenchie on 01.28.15 at 10:21 am

Similarities to Canada…

“Norway Regulator raises Warning Housing Market is out of control”

http://www.bloomberg.com/news/articles/2015-01-28/norway-regulator-raises-warning-housing-market-is-out-of-control

#167 TnT on 01.28.15 at 10:27 am

#110 Vanecdotal on 01.27.15 at 11:30 pm

The 45k millionaire immigrants that are still trying to get in may have a very loooong (decades?) wait ahead of them.

The 45 000 millionaires represents 45 000 families who were playing by the “IIP application” rules at that time.

The focus here should be the vast numbers of millionaires who are actively pursuing entrance into Canada and the fact that Vancouver and Toronto have proven and well used migration paths for these new immigrants.

Money talks, rules walk…..

#168 Andrew on 01.28.15 at 10:28 am

Canada Reduces 2014 Employment Gain to 121,300 From 185,700

(Bloomberg) — Canada reduced its estimate of job creation last year as part of an update to incorporate data from the last census, saying employers added 121,300 jobs to end the year with the unemployment rate at 6.7 percent.
Statistics Canada previously reported employment rose by 185,700 last year. It reported the December jobless rate was 6.6 percent. The labor force participation rate of 65.7 percent, revised from 65.9 percent, was the lowest since 2000. The Ottawa-based agency made revisions back to 2001.
The new figures also showed that the 4,300 job loss for December is now a decline of 11,300. The next regular monthly Labor Force Survey report, for January, is due on Feb. 6.

http://www.bloomberg.com/news/articles/2015-01-28/canada-reduces-2014-employment-gain-to-121-300-from-185-700

#169 Testing 1, 2, 3 on 01.28.15 at 11:08 am

The husband of one of my wife’s good friends is a fly-in/out (Vancouver Island) contractor in the oil patch and has made well over $200k/annum the last few years. This week he was told once his current project is done (a couple of more weeks to go) he won’t have any work until at least June. And that depends on oil prices. He claims 10, 000 people have lost their jobs in Fort Crack over the last week. I have no idea how reliable that number is though.

This couple are just like all the others, living high on the hog with a big property, toys out the ying-yang and hardly any savings. Now the wife has started looking for work to help pay the bills. Sheesh.

#170 Grantmi on 01.28.15 at 11:09 am

#158 Taber on 01.28.15 at 9:58 am

http://ca.reuters.com/article/businessNews/idCAKBN0L11KU20150128

“Canada revisions show bigger job losses in December

If their lips are moving… they’re lying! Unbelievable! what a bunch of ass-clowns!

#171 Rational Optimist on 01.28.15 at 11:13 am

132 Irwin on 01.28.15 at 1:49 am

You’re right that it’s a lot more pleasant to march in June than January in the northern hemisphere. I hope you’re not suggesting that people have “realized” that anthropogenic climate change is not real just because winter arrived…

Anyway, there’s a lot of reasons to reduce our dependence on plastics besides greenhouse emissions and other atmospheric pollution. Some of these materials can persist for thousands of years if not recycled, and recycling many of them is too energy-intensive to make much sense. Hundreds of millions of tonnes of plastic (no one knows for sure) wind up in our oceans each year and do God-knows-what to the ecosystems upon which billions of us depend for food.

Don’t say to burn the garbage to capture the energy, please. I’m a proponent of that, but trash is not the best fuel in the first place, so reduction is better. Plus, the same kind of “thinking” that leads North Americans to believe that climate change is fake also has caused them to deny the cleanliness of modern incineration. So no one’s backyard is suitable for incinerators, no matter how high-tech and clean and preferable to land-filling it is.

Thanks for the link to the ARC article. Good read.

#172 claire on 01.28.15 at 11:15 am

This week on a Facebook mom group I read a thread of moms bitching there are no houses for sale, the pickings are slim in the 600k to 700k range, everything is snapped up before it is even on mls, people gettimg private offers on their house when they aren’t even looking to sell. This is an hour outside of vancouver. Hard to belive houses are illiquid. As one lady put it, house prices are “very exciting right now.”.

In another thread they all talked about where they have their resps invested. I shoildve counted up the answers. The majority were in some sort of specialized resp marketing thing, canadian security trust or something like that, recommended by a saavy friend or relative. A few were at a bamk. No one was managing it themselves.

It’s business as usualas far as I can see.

#173 G on 01.28.15 at 11:19 am

Garth, would you borrow from prime+1% HELOC to invest in a balanced portfolio of equities?

Home purchased 15 years ago in Toronto, less than 100k mortgage left, no other debt, income to service mortgage + interest rate for HELOC investment is secure. I am planning to pay off mortgage in two years – regardless of doing the HELOC investment.

Doing self-directed investment for RRSP and TFSA for over 10 years, portfolio growth was great.

Your reply is appreciated.

Leverage makes financial sense with tax-deductible interest on the loan and robust returns these days on the kind of portfolio I have described. But it also involves risk. Your portfolio must be fully liquid, well-managed, truly balanced and sufficiently diversified. If you borrow to invest, I strongly suggest you engage some professional help to manage that risk. — Garth

#174 Retired Boomer - WI on 01.28.15 at 11:21 am

Looking back over statistics, it is apparent when the workers had more control (unions etc) they got a better slice of the pie from the corporations. Workers today have lost all clout to improve their situations.

It happened slowly, over time. Today, many work for less, the myth of ‘free trade’ not managed trade led the downward spiral. Seeing all this, and then noticing the environment gets last place after all that, is quite sad.
Do you think the millenials have the earning power to right this mess? In a word – NO!

#175 Suckers born all over GTA on 01.28.15 at 11:31 am

http://www.thestar.com/business/real_estate/2015/01/27/builder-quietly-cancels-condo-complex.html

#176 Daisy Mae on 01.28.15 at 11:36 am

Re #29 Babblemaster.

“Don’t you have an open house to host? — Garth”

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

Perfect comeback! LOL

#177 Daisy Mae on 01.28.15 at 11:40 am

#31 Bobby: “If you want a chuckle, ask Justin what he would do to right the economy?”

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

Well, granted, it WILL be quite a challenge for anyone to clean up the mess created and encouraged by the present dictatorial government…

#178 Grantmi on 01.28.15 at 11:48 am

A total of 36,973 investor immigrants arrived in British Columbia from 2005 to 2012 under the former IPP, and about two-thirds of all recent federal IIP applicants were mainland Chinese who said they planned to live in British Columbia. http://bit.ly/15IDJ0y

So now Vancouver has 24,500 less immigrants moving here as compared to the last 7 years!! Ooooohhhhh Ouch!

That’s going to leave a mark! #meltdown

#179 Snowboid on 01.28.15 at 12:05 pm

The City of Kelowna has an online tool to show the effect of changed assessments on your tax bill this year.

http://www.kelowna.ca/iProperty_Tax_Estimator/Scripts/pte001.cfm

I guess there has been some complaints about homeowners who have assessments up 10% or more and that the city would tack their 3.47% on top of that.

Plugging in figures for the condo we rent show the assessed value increase of 12.6% but the taxes ‘only’ go up 11.9%

Still that’s a hefty increase considering a unit below us has been listed for a few months at a price that’s lower than last years’ assessment with no bites – go figure!

#180 Rainclouds on 01.28.15 at 12:11 pm

Uh Oh

Mayor Moonbeam and City of Vancouver planning Dept have a problem.

http://www.vancouversun.com/business/judge+quashes+land+swap+between+Vancouver+Yaletown+developer/10764762/story.html

#181 Smart car is an oxymoron on 01.28.15 at 12:14 pm

Yeah a dumb car is roomier than a big truck … Dream on!

Are you people so blind casl is a dangerous new law snuck in by the government it violates our freedom of speech and will hurt Canadian business not the guys using India and China who spam you to death get real!

Yeah i should use old fashioned mail good one thats a brainwave waste paper, power, fuel, keep snail mail alive, rather than simply send an email.

This is another reason why USA is progressing they dont enact stupid laws to hurt small business, you dont like my email opt out simple!

Seriously people how many of the so called spam is coming from small business’s canada?

If you dont like spam get off the dam internet and you use snail mail, and you dont like pollution get a horse and buggy and live off the grid in a shack!!!

#182 Reality Check on 01.28.15 at 12:15 pm

To boonerator …. Talk about being in denial….. Are u a midget or something? Dumb car is roomier than that truck …. Lol… What r u a tree hugger or something ? All ur doing is making a fool of yourself …. Besides what’s it too you what he drives …the last time I checked it was a free country

#183 industrial Guy on 01.28.15 at 12:20 pm

#150 Capital One on 01.28.15 at 8:44 am

Unions are out to protect unions. They kill jobs in the long run. The only place they can really exist is in the public sector where there is no competition to weed out the inefficient. –

You are perpetuating a myth that is disproven daily around the world. Repeating the same right wing dogma does not make it true.

There’s a myth that the private sector is the paragon of efficiency. It’s not. If it were, why all the corporate welfare? Businesses in Canada demand lower taxes. They also want Governments to provide trained workers and infrastructure at no cost to them. I thought the mantra of the right was “user pays”.

The reality is ….. many businesses in Canada have an efficiency problem that originates from the top. They focused way too much on creating short term shareholder value and not on investing in the future. Their turkeys have come home to roost.

Canada is a World class creator of technology but we oddly don’t use it . We’re very good at exporting some of the best made machinery on Earth to countries who compete with us. Then we compete with them using junk. Visit manufacturing plants across Canada
and you will see why we need a $.70 dollar. It isn’t union labour. It’s either old technology or low quality equipment imported from low wage machinery producers that wasn’t built with efficiency or durability in mind. It was made to be cheap.

The Harper Government gave us SR&ED, an R&D development program which has cost us Billions. Did all this R&D money herald a new age in Canadian manufacturing?
Nope ….. It turned into a feeding frenzy for consultants and lawyers.

#184 r1200c on 01.28.15 at 12:22 pm

FORT MCMURRAY, Alta. — The Canadian Association of Petroleum Producers is expecting oilpatch investment to drop by a third — or $23 billion — this year compared with 2014, while output is seen growing at a slower clip than previously predicted.

http://www.ctvnews.ca/business/oilpatch-investment-could-drop-by-23b-as-prices-languish-capp-1.2199116#ixzz3PUrqoQ6L

#185 Oil Is Sticky on 01.28.15 at 12:34 pm

#119 DisgustMadeMePost on 01.28.15 at 12:29 am
#71 Oil Is Sticky on 01.27.15 at 9:37 pm

The private sector??

I am making the same wage/hour as I made when I first joined the company almost 10 years ago!! How am I doing?? I’m cranky!!

—-

You prove my point. Govt is either woefully ignorant of the private sector or is so ridiculously arrogant of the amount of taxes it takes in to pay for it’s bloated self that one day the pitch forks will come. All I know is everything I read about economics around the world right now points down down down. But yet there is no end to the tentacles of govt, taxes and regulation.

#186 Oil Is Sticky on 01.28.15 at 12:40 pm

Don’t say to burn the garbage to capture the energy, please. I’m a proponent of that, but trash is not the best fuel in the first place, so reduction is better. Plus, the same kind of “thinking” that leads North Americans to believe that climate change is fake also has caused them to deny the cleanliness of modern incineration. So no one’s backyard is suitable for incinerators, no matter how high-tech and clean and preferable to land-filling it is.

——

Climate change is not fake it’s just not caused by man. It’s a slimy way for Govt to tax you and send tax revenue to their buddies in industry. We get what we vote for it seems.

#187 TnT on 01.28.15 at 12:40 pm

#175 Grantmi on 01.28.15 at 11:48 am

You are delusional to think Vancouver’s future is with less immigration from China.

Current tensions between mainland China’s government and citizens of Hong Kong is enough to see another wave of migration from Hong Kong as we’ve seen in the 1990’s before Britain handed control of Hong Kong back to China.

#188 BCD on 01.28.15 at 12:57 pm

Leverage makes financial sense with tax-deductible interest on the loan and robust returns these days on the kind of portfolio I have described. But it also involves risk. Your portfolio must be fully liquid, well-managed, truly balanced and sufficiently diversified. If you borrow to invest, I strongly suggest you engage some professional help to manage that risk.
_____________________________________________

Wow. . .am I the only one who sees anything wrong with this advice. Garth, you are advocating that many people don’t buy an overpriced home in which they will LIVE, and in the next breath you advise someone to borrow money they don’t have to invest?

This is the problem with financial “types” they all think they can turn a roll of tinfoil into a car without doing any “real” work.

Comments like this are enough to make me wish the whole thing crumbles–even though I have a vested interest in hoping stocks do well for those I know and love.

People who have put the bulk of their net worth into a home they do not wish to sell can either have it stagnate, or see it grow. Leverage, as I pointed out, involves risk. So does leaving equity in a depreciating asset. My comment was responsible. — Garth

#189 honeybooboo on 01.28.15 at 1:04 pm

And expect it to grow deeper, says the brain trust at TD Bank. In fact these guys believe housing prices will fall in eight of 10 provinces this year, with only parts of Ontario and BC being supported by rate-induced hormonal house lust. Even there price gains will be in the 2-3% range – Garth
==============================

That you for those reassuring words. Toronto, Vancouver are uppa, uppa, uppa

#190 its OVER for Canadian oil sands on 01.28.15 at 1:17 pm

I feel sorry for the people of Alberta that will lose their homes and go bankrupt. Don’t worry coal will save Alberta..lol. I also feel sorry for realtors on this blog who kick and scream about millionaires coming to Canada and they will “save” us. Rich people are rich because they are smart .Why wouldnt the rich let Canada crumble under the debt bubble and then buy everything for pennies on the dollar? California makes Canada look like a frozen tundra. Do you know what you can get for a million there vs here in Canada? The Housing bubble crashed in the US why no rich people saved them? The realtors in the US gave the exact same demented logic.

#191 chapter 9 on 01.28.15 at 1:23 pm

#27 Le petit prince
“Prices can only go up,the province has been at rock bottom for so long, imagine the potential”.

Hate to give you the bad news. But Quebec is pretty much insolvent! As a taxpayer your on the hook for total government debt-direct and indirect to the tune of $955 Billion for year ending 2011/12. And the past couple of years the provincial government has done diddly squat to come to terms with this financial crisis. So what can you look forward to, massive tax hikes,slashing of programs/services and even further reductions in internal and external investments.
And as for transfer payments from good old Alberta, they are done.
Real estate ain’t going up!!

#192 Grantmi on 01.28.15 at 1:26 pm

#184 TnT on 01.28.15 at 12:40 pm

#175 Grantmi on 01.28.15 at 11:48 am

You are delusional to think Vancouver’s future is with less immigration from China.

Current tensions between mainland China’s government and citizens of Hong Kong is enough to see another wave of migration from Hong Kong as we’ve seen in the 1990’s before Britain handed control of Hong Kong back to China.

Well you better gather all your peeps and vote out the CONS in the next election. no more supposed rich immigrant scammers coming here and buying a house and saying! “LOOK! I invested in Canada! Suckaaas!!”

… because.. the door is slammed Tnt!

#193 jess on 01.28.15 at 1:28 pm

tim looking for efficiencies?

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

By Len Boselovic and Patricia Sabatini

“When Cecil-based generic drug giant Mylan bought Bioniche is 2010, it didn’t simply hand over a check to the owners of the Irish pharmaceutical firm.

Instead, Mylan channeled financing through Luxembourg, a small European country that is a magnet for U.S. companies seeking ways to cut their tax bills. The transaction began with Mylan and one of its existing Luxembourg subsidiaries lending $552 million to a new Luxembourg subsidiary. That subsidiary loaned the money to yet another Luxembourg subsidiary, which loaned it to yet another Luxembourg subsidiary, which loaned most of the $552 million to an Irish subsidiary that acquired Bioniche.

Tax experts say the convoluted process generated substantial tax savings for Mylan, which last summer announced plans to reduce its tax bill even more by renouncing its U.S. tax citizenship through a tax code provision known as an inversion.

Mylan has plenty of company in Luxembourg. In 2009, Pittsburgh-based Heinz structured a complex, 16-step transaction that was used to channel approximately $5.7 billion in financing through Luxembourg as part of an initiative called “Project Summer.”

Using intercompany loans, Heinz was able to shift income from Canada and Ireland into Luxembourg, where it would be taxed at a very low rate or not at all, tax experts said.
http://www.post-gazette.com/business/2015/01/25/Leaked-documents-show-how-U-S-companies-use-overseas-to-pay-less-in-taxes/stories/201503110001

#194 DM in C on 01.28.15 at 1:41 pm

Smart car is an oxymoron

You don’t say what kind of business you’re in — is it B2C or B2B? What industry? Do you have knowledgeable marketing people?

Casl isn’t that bad — I’m the head of marketing for a smallish tech company and we’ve had no issues with it. Rather than tackle it yourself, talk to someone.

If Garth wants to broker, I can talk to you — you sound very frustrated when there’s no reason to be.

#195 Brydle604 on 01.28.15 at 1:47 pm

#183 could not agree more!
Especially climate change, however it is the scientific intelligencia. by fear mongering, who’s pockets are lined by convincing governments to invoke carbon taxes, etc.
The latest is putting warning messages on gasoline pumps to make you feel guilty.
They need to get legislation to control Volcano emissions and better control of the Sun. ha ha
There are many real things man CAN do, like cleaning up the oceans, better recycling, development of electric generation like new uranium fueled electric generation
chttp://www.forbes.com/sites/jamesconca/2015/01/07/nuclear-power-turns-to-salt/ars,
And on a lighter note the “kissing cam”
https://www.youtube.com/watch?v=51T3BX4-e60
Peace.

#196 TnT on 01.28.15 at 1:53 pm

A total of 36,973 investor immigrants arrived in British Columbia from 2005 to 2012 under the former IPP, and about two-thirds of all recent federal IIP applicants were mainland Chinese who said they planned to live in British Columbia.

http://www.biv.com/article/2015/1/immigrant-investor-program-relaunched-richer/

That’s 5281 millionaire family members mostly from mainland China arriving into British Columbia and almost all of them settle in Vancouver (as per my previous posted link).

Using the 1 child policy so widely used in China means that 1760 millionaire families arriving in Vancouver every year for 7 years.

That’s 5 millionaire families every day, 365 days a year for 7 years.

Imagine if 5 families won the lottery every day, 365 days a year for 7 years.

And this has no impact on Real Estate?

They were not all ‘millionaire’ families, by the way. And, no, this is not the reason a SFD costs seven figures in Vancouver. — Garth

#197 pinstripe on 01.28.15 at 1:54 pm

the hype about the price of oil is nothing more than hype.

the layoffs are minimum. many tradespeople are most pleased to get the layoff, giving them some time to spend several months in places like Mexico.

TWFs are guaranteed jobs because of their condition of employment.

the price of beef on the hoof has increased 45% in the past several months.

the pubs, bars, retail stores are very busy. standing room only.

nothing will change.

The industry says spending will be reduced by $23 billion this year. Yeah, nothing changes. Do you ever leave the living room? — Garth

#198 Brydle604 on 01.28.15 at 2:00 pm

#191 correction

http://www.forbes.com/sites/jamesconca/2015/01/07/nuclear-power-turns-to-salt/

#199 Mike L on 01.28.15 at 2:02 pm

The industry says spending will be reduced by $23 billion this year. Yeah, nothing changes. Do you ever leave the living room? — Garth

Garth is 100% right. It’s affecting a boat load down here in the USA, much worse than is getting to the media right now, I can assure you. Cheap gasoline is the short term gain at the cost of …well, hopefully not trillions out of the economy.

We are hoping oil goes back up, but O&G companies are cutting everything to the bone preemptively right now.

#200 TnT on 01.28.15 at 2:06 pm

They were not all ‘millionaire’ families, by the way. And, no, this is not the reason a SFD costs seven figures in Vancouver. — Garth

The Immigrant Investor Program (IIP) aims to have experienced business people contribute to Canada’s growth and long-term prosperity by investing in Canada’s economy. Investors must:

* show that they have business experience

* have a net worth of at least C$1,600,000 that was gained legally and

* invest C$800,000.

http://www.cic.gc.ca/ENGLISH/immigrate/business/investors/index.asp

I know that. Net worth does not mean cash. And a hunk has to be invested with the feds. Your exaggeration is pointless. — Garth

#201 industrial Guy on 01.28.15 at 2:19 pm

Smart car is an oxymoron
CASL, Canada’s Anti Spam law is the Harper Government demonstrating how out of touch it is with Canadian business. They sure need another administrative burden dropped on their heads.
It’s like stopping a tornado by detonating a nuclear bomb. It may work, but the cure isn’t much better than the initial problem.

What is Implied Consent ?
This one is a hornet’s nest of terminology and deadlines.
What is Express Consent?
Can I send you a emails? “Yes” ….. Done.

Is My Message Exempt?

CASL also covers software updates, malware, Net Bots and Spyware … yeppers, I’m sure all the Black Hat guys are quaking in their boots.

The Harper Government has now created a whole new bureaucracy filled with Spamocrats.

#202 Smart car is an oxymoron on 01.28.15 at 2:20 pm

We are strictly b2b o&g. We don’t need a nanny state to babysit our business. Where has our constitutional right to freedom of speech gone? Currently there are over 140,000 complaints to the casl these can include business as well as personal complaints! You are guilty till you prove you had authorization to email.

The work to maintain a list like we have is massive and extremely costly, ultimately we will have to either risk a huge fine or deal with the rest of the world which is pro small business. How sad is that, we email roughly twice a year and we are spammers what a freaken joke!

#203 Smoking Man on 01.28.15 at 2:23 pm

#155 LH on 01.28.15 at 9:33 am
I have heard good things about private mortgages, but is there any way to make them more tax efficient? 10pct taxed at top marginal normal income is not so hot anymore.

Re smoking man 17
…..
Pay off your mortgage, get a helock. Talk to account, use money in heloc for the fund. Interest is deductible.

Not a been counter. So that’s what pros are for.. I just send my shit in a few boxes to mine..

He has it for a few weeks then goes you owe this.

#204 Victor V on 01.28.15 at 2:26 pm

https://ca.finance.yahoo.com/news/canadians-not-buying-homes-cant-170156874.html

OTTAWA (Reuters) – Canada Finance Minister Joe Oliver dismissed on Wednesday the idea that interest rates are so low they are spurring Canadians to buy homes they cannot afford.

“We’re, of course, monitoring the market. It’s not a huge concern at this point,” he told reporters.

“I’ve said again and again we don’t think there’s a bubble – the Bank of Canada agrees with that, CMHC (Canadian Mortgage and Housing Corp), OECD (Organization for Economic Cooperation and Development).”

Canada escaped the housing crash of 2007 in the United States that triggered the global financial crisis, and experienced a post-recession property boom as borrowing costs hit record lows. The jump in home prices and parallel rise in household debt has caused some to warn that a bubble is forming.

#205 BCD on 01.28.15 at 2:28 pm

People who have put the bulk of their net worth into a home they do not wish to sell can either have it stagnate, or see it grow. Leverage, as I pointed out, involves risk. So does leaving equity in a depreciating asset. My comment was responsible. — Garth – See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/comment-page-4/#comment-348600
___________________________________________

BUT the equity I have in the home has grown. Where have you been? Yes the markets went up, but so did the house old boy. Or do you think that’s a bubble? But the markets aren’t bubbly? I believe this is called talking out of both sides of your mouth.

If the rest of my net worth sits in cash I don’t see that as too bad of a deal–considering massive deflation is likely on the way. . .and if the bubble bursts (which it won’t) I can buy something on the cheap like the rest of the vulture renters that come here are planning to do.

If ‘massive deflation’ comes your house is toast. Best get liquid. However, I do not recommend leverage to anyone without an abundance of safeguards. — Garth

#206 Mister Obvious on 01.28.15 at 2:30 pm

#148 palebird

“O Leary is a blowhard. [….] He makes a lot of money spouting whatever.”
—————————–

My dad spouted ‘whatever’ all his life. He never made a single dime from it. He was still a good guy though…

#207 TnT on 01.28.15 at 2:40 pm

I know that. Net worth does not mean cash. And a hunk has to be invested with the feds. Your exaggeration is pointless. — Garth

***

My “exaggeration” best explains the phenomenon of Real Estate prices in Vancouver.

#208 Weak job growth BUT on 01.28.15 at 2:45 pm

Canada posts weakest job growth since 2009. 121,000 jobs created.

That’s a lie! We had openings for 191,000 TFW and IMP applicants last year alone. There is a skills shortage.

Hahaha

#209 pinstripe on 01.28.15 at 3:00 pm

The industry says spending will be reduced by $23 billion this year. Yeah, nothing changes. Do you ever leave the living room? — Garth

————————————————————

what do you expect industry to say? Where I live, the farmers and ranchers are always complaining how tough they have it, even though they are multi millionaires and everything they do is a tax write off.

I leave the living room three times a day as a minimum, make the trip to the coffe shop and get all the updates on what is going on locally, prov, fed, global. coffee is two bucks a cup these days.

#210 TurnerNation on 01.28.15 at 3:02 pm

FED unchanged

Tags:

#Smokingman

#211 Nuke on 01.28.15 at 3:08 pm

Unions’ main and only purpose is to ensure that the surplus value created by labour is not sucked out of the enterprise by a non-engaged shareholder class. Productivity and successful business depends on a workforce that shares in the success of the firm. Unless the firm is a worker self-directed enterprise like most Silicon Valley start ups, then you have to have a union to ensure the profits are not lost. A union keeps the money flowing in the community because the employees spend their income and ensure a high multiplier. If that money is sucked out of the consumer cycle by a distorted profit taking structure you end up with the hellhole we are circling now. Unions are likely the only way to get this economy back on track.

#212 Smoking Gun on 01.28.15 at 3:15 pm

FED says watch out for rate hike in second half of 2015. Bond markets shrugged it off saying ‘Hot Air”.

That speech was to scare the sheeple a little.

#213 Marco on 01.28.15 at 3:17 pm

@TNT

The Quebec IIP program is open for business limiting a total of 1750. 1200 max from one country. If one learns French and passes a test then the number of applicants is unlimited. And no they do not have to remain in Quebec, that would be an infringement on rights and freedoms. I do not know how many applicants in total are successful. Most of them do make it to B.C. But regardless of these numbers, I agree with Garth when he says that’s not the reason houses in Vancouver are so expensive. For instance the British Properties has always been out of whack with fundamentals. I really believe it has to do with consumer sentiment and perception of how the economy is doing over all. Also how well they are doing in the economy. Followed by supply and demand.

Cheers.

#214 Toronto_CA on 01.28.15 at 3:23 pm

Stats Can’s constant errors like this are so embarrassing to the country.

“CIBC noted the Bank of Canada’s decision to cut rates last week may now look slightly less surprising.”

Yeah, now it is a bit more clear although I think the medicine could be worse than the disease. All this borrowing comes at the cost of future spending/growth.

#215 Marco on 01.28.15 at 3:27 pm

And might I add to my above post: within that safety net, low interest rates helped immensely inflate prices.

#216 Blacksheep on 01.28.15 at 3:33 pm

“Other smarties are projecting a cheap-oil era lasting more than 10 years, with a semi-permanent imbalance between supply and demand.”

“It’s the worst kind of news for the Albertan oil sands”
————————————————–
This is awesome news, if true. In our current state of global deflation, cheap oil is what’s needed most.

So Albertan’s and their RE market are f—ed, big deal. Surely oil dudes making all that huge $’s, banked major coin, having seen this movie before……right?

#217 Mixed Bag on 01.28.15 at 3:34 pm

Garth, a question:

Can one hold a mortgage in their TFSA, similar to what’s allowed in their RRSP? (Not that it would be worthwhile in this low-interest environment, would just like to know).

Thanks.

#218 TorontoBull on 01.28.15 at 3:37 pm

so Smokey did you see FOMC!!!!!
nobody’s perfect buddy…perhaps next time :)

#219 Spaccone on 01.28.15 at 3:38 pm

I know Garth mentioned it would be prescient to lighten up on preferreds several posts ago, but anyone know why they got kicked in the nuts today?


Because (as I told you) US rats will be rising. Confirmed today. However, you hold these assets for an excellent yield, Temporary fluctuations are unimportant to most serious investors (unlike the pantywaists who come here).– Garth

#220 happity on 01.28.15 at 3:47 pm

When global oil inventories reach max capacity in the coming months then oil will take another dive.

By then it will be obvious the world is in deflation and recession heading towards global depression.

All the kings horses and money printing does not create savings and capital and jobs, it just creates more debt slavery.

#221 Victor V on 01.28.15 at 3:47 pm

http://www.cbc.ca/news/business/tim-hortons-layoffs-long-time-employees-escorted-out-the-door-1.2934853

Dozens of corporate Tim Hortons workers, including pregnant women and staff who had been with the chain for 30 years, were summoned to meet with outplacement agents and then escorted out the doors of its regional offices and headquarters yesterday as part of a nationwide restructuring.

An employee who asked to remain anonymous described the scene and estimated about 40 per cent of Tim Hortons corporate workforce had been let go.

But another source familiar with the downsizing plans says the actual number of layoffs is closer to 20 per cent, representing 350-400 employees.

#222 Smoking Man on 01.28.15 at 3:58 pm

#207 TurnerNation on 01.28.15 at 3:02 pm
FED unchanged

Tags:

#Smokingman
………

Oh they changed, bullish for a rate hike. I always thought the herd in the USA are idiots. Seems its elite are just as dumb.

But I’m the dumbest, I took over my kids FX trading account today.

On announcement, p & l shoot up 1000, by time in got to my exit window. Hit close out. I’m down 1000k.

It moved that fast. But look at the TSY’s
Bond Market calling Yellen a Bull Shitter.

Maybe she’s testing the waters. Equities got crushed up to 2:30 till fed started buying it up.

Although the markets is manipulated, shouldn’t stop us from trading, just figure out what they will do next.

#223 Porsche on 01.28.15 at 4:03 pm

The ruble breaks .80 cents today

#224 Nemesis on 01.28.15 at 4:05 pm

#FunnyAuldWorld… #VoxEclectica…

#NoHomeDeliveryForYou!…

[CBC] – Canada Post cuts hit Abbotsford and Chilliwack this fall: Fraser Valley communities will be among the first to lose door to door service

“We have 23 routes altogether. With a 45 percent [reduction in staff] we’ll be looking at maybe 12 routes.” – Canadian Union of Postal Workers Local 741 President Peter Butcher

http://www.cbc.ca/news/canada/british-columbia/canada-post-cuts-hit-abbotsford-and-chilliwack-this-fall-1.2934651

#AndNoCanadaHomeForYou!…

[SCMP] – Chinese millionaires given just two weeks in scramble for Canada investor visas: Sharp cut-off raises concerns over Ottawa’s new migration scheme, as language rules are said to weigh against Chinese applicants

…”A maximum of 60 applicants will then be approved, after a lottery decides which of the applications will be assessed. Canada previously said about 50 applicants would be chosen, surprising many with its tiny scale.

The deadlines and selection rules were revealed on Saturday when immigration minister Chris Alexander’s instructions on the IIVC scheme were gazetted by Citizenship and Immigration Canada (CIC).

Wealth migration to Canada has recently been dominated by mainland Chinese millionaires, who made up a large majority of applicants under the now-defunct Immigrant Investor Programme. But the IIP was shut down last year after a massive backlog of tens of thousands of mainland Chinese applications developed at Canada’s consulate-general in Hong Kong.”….

http://www.scmp.com/news/world/article/1693465/two-week-deadline-wealth-visa-race

#PeterLiuThinksOtherwise…

“There will be 10,000 Chinese moving into Richmond every year in the next 10 years.” – Peter Liu, RichmondFirst

[ChinaDaily] – Peter Liu: On rise in Richmond politics

http://usa.chinadaily.com.cn/world/2015-01/02/content_19222823.htm

#HowTheWestWasWon,Or… #TheQuickDrawAndTheWellFed…

“Cute girls with guns. How can you lose?”

[LAT] – At Shooters Grill in Rifle, Colo., servers carry pistols as they work

“I wouldn’t walk into a place like this in New York City though,” he said. “They probably can’t shoot straight.”

http://www.latimes.com/nation/la-na-shooters-grill-20150128-story.html

#225 BREAKING NEWS on 01.28.15 at 4:05 pm

DOLLAR BREACHES 79 CENTS.

#226 Republic_of_Western_Canada on 01.28.15 at 4:05 pm

#181 r1200c on 01.28.15 at 12:22 pm

FORT MCMURRAY, Alta. — The Canadian Association of Petroleum Producers is expecting oilpatch investment to drop by a third — or $23 billion — this year compared with 2014, while output is seen growing at a slower clip than previously predicted.

That’s good news, because no additional new infrastructure is needed at this time.

They’ve accomplished enough for now. It’s time to put all that new plant to work and produce. As I’ve noted before, the building of mines and plants (or housing) is not the main event. It’s the use of those to produce hydrocarbons and downstream value-added goods that is the whole point of construction and investment.

The key takeaways here are that they are still intending to spend $46 billion THIS YEAR (not a trivial amount), and will still increase production indefinitely with all that sunk cost.

No producing, debottlenecked plants are going to be shut down. Not in this lifetime, at least.

#227 Macrath on 01.28.15 at 4:07 pm

“Preferreds are up 2%.” ?????????????????
____________________________
CPD and ZPR
http://tinyurl.com/ohx2xz9

“It was carnage for the Canadian preferred share market today, with PerpetualDiscounts down 32bp, FixedResets losing 87bp and DeemedRetractibles off 7bp. A very lengthy Performance Highlights table is suitably dominated by losing FixedResets. Volume was high.

For as long as the FixedReset market is so violently unsettled, I’ll keep publishing updates of the more interesting and meaningful series of FixedResets’ Implied Volatilities.”

Hymas Investment Management Inc.,
http://prefblog.com/

Correct as written. Most investors do not buy preferreds for capital appreciation but for an excellent and tax-efficient yield. — Garth

#228 Mike S on 01.28.15 at 4:15 pm

Fed closer to raising rates, means the bond yields going down???

#229 bdy sktrn on 01.28.15 at 4:16 pm

CBOE Interest Rate 10 Year T No (^TNX) -Chicago Options
1.7240 Down 0.1010(5.53%)
————————————–
is this not the market telling ms yellen that it thinks she is full of hot air?

#230 For those about to flop... on 01.28.15 at 4:18 pm

Re 209.
So when interest rates go up ,bond yields typically go down?

#231 Mark on 01.28.15 at 4:21 pm

“Unless the firm is a worker self-directed enterprise like most Silicon Valley start ups,”

That used to be the case, but these days, the SV startups are mostly VC funded. As the cost of doing business, any business, in the SV is so prohibitive relative to the meagre savings that engineers are able to accumulate on the mere pittance of salaries paid by the employers.

In the 80s and 90s, when costs were considerably less, and salaries considerably higher (in real terms), the ‘startup’ model worked, and worked well. But those days are long gone.

#232 Cdn Flier on 01.28.15 at 4:24 pm

Smart car is an oxymoron:

Democracy is a bitch. The majority of Canadians don’t want to be spammed, so our democratically elected government did something about it. Sorry about your business, but adapt, or fade away.

#233 Mike S on 01.28.15 at 4:24 pm

“FED says watch out for rate hike in second half of 2015. Bond markets shrugged it off saying ‘Hot Air”.

That speech was to scare the sheeple a little.”

Not a lot of value there in the bond market.

5 yr Canada government bond yield is 0.69%
1 yr GIC you can still get 1%

Who would buy bond now?

You don’t buy bonds for the yield. — Garth

#234 bdy sktrn on 01.28.15 at 4:25 pm

oil breaks 52wk low

#235 Hicksville Alberta on 01.28.15 at 4:27 pm

Canadian dollar just broke the 80 cent level. Next attractor would likely be 75 cents.
Spot US dollar just over $ 1.25 Canadian which means if you’re going to San Francisco you will definitely need to wear more than flowers in your hair.
Bet your friendly bank charges about $ 1.30 for a US buck. Their spreads keep getting wider and wider as their piggy tails get curlier and curlier.
Meanwhile oil made it back to the $44 range.

#236 BCD on 01.28.15 at 4:30 pm

If ‘massive deflation’ comes your house is toast. Best get liquid. However, I do not recommend leverage to anyone without an abundance of safeguards. — Garth – See more at: http://www.greaterfool.ca/2015/01/27/the-quick-the-dead/comment-page-4/#comment-348618
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Yeah but here is the deal Garth–I can still live in my house while I save ducats and ride out the economic storm with cash. I can’t live in a portfolio. After the SHTF and when things recover fine, if they don’t fine, I buy another residence on the cheap and double down on real estate (my kids will need a place to live anyway).

The market pumpers are as bad as the real estate pumpers. Trying to tease every last cent out of the public before they pull the carpet out from everyone once again.

Greece on a collision course with the EU. Oil in decline. I am calling a big correction in the market this Friday, and certainly by February end.

End of debate as you are spinning into orbit. I have always counseled people against a one-asset strategy, be that a house or an ETF. — Garth

#237 Oil Is Sticky on 01.28.15 at 4:31 pm

There will be no rate hike…..

http://www.cnbc.com/id/102376795?trknav=homestack:topnews:2

#238 calgaryPhantom on 01.28.15 at 4:31 pm

Please help me understand this rule of 90.

90 – {age} = % of your {net worth} in house.

Considering houses on average in Calgary cost 450 K. That would mean a 30 year old must have a networth of 750 k ?

( 90 – 30 = 60% of 750 k – is 450 k )

Who has that kind of money at that age??

#239 BCD on 01.28.15 at 4:42 pm

http://www.cbc.ca/news/business/loonie-drops-below-80-cents-us-1.2935186
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Another psychological barrier is breached. The house of cards is unraveling fast.

What do you think Garth? Time to start stockpiling toilet paper and salt to barter with the zombie hoardes?

#240 its OVER for Canadian oil sands on 01.28.15 at 4:45 pm

Canadian oil stocks taking a severe pounding. It’s does not look good for Alberta where houses will be worth $50k in 5 years.

#241 Franco on 01.28.15 at 4:50 pm

People love doom and gloom. You sure have become very popular since the oil price crashed and the lowering of interest rates.

I thought it was because you came here. — Garth

#242 aaron on 01.28.15 at 5:03 pm

Folks, it is the FED won’t raise rates this year. Two reasons:

1. Core inflation will continue to slide.
2. No wage inflation

#243 A bit of star stuff on 01.28.15 at 5:15 pm

It’s coming…
http://www.nytimes.com/2015/01/29/business/federal-reserve-rate-decision.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

#244 its OVER for Canadian oil sands on 01.28.15 at 5:18 pm

New 52 week low for COS dropping 85 cents or 10.87% to $6.97 . ECA fell 92 Cents or 6.73% to $12.75 on the US exchange. This is very bullish for the oil sands. The average drop was 6% or greater drop for the other crumbling oil sand companies. The Canadian dollar dropped to under 80 cents US which is somehow bullish to demented realtors and other vested interests. Btw COS was trading at $24 six months ago with idiots calling the bottom @ $18, 15 ,13 ,11 ,9 and I am sure more bottom callers at $7. Don’t worry the millionaires are coming to save us since we are so special. Lol demented realtors

#245 its OVER for Canadian oil sands on 01.28.15 at 5:31 pm

http://www.cbc.ca/news/business/canadian-dollar-slump-hikes-cost-of-u-s-imported-goods-1.2898150

More good news? Demented realtors

#246 Vancouver ,,,really ??? on 01.28.15 at 5:47 pm

Loonie down again almost a full cent…lol
Are you still ripping on Zlotych Garth?
I’d rather have zlotych than shitty loonies any day.

#247 Ray Vasquez on 01.28.15 at 5:54 pm

Canada 30 year bond is now 1.93%. Even equities are starting to fall now.

Dow Jones down almost 5% in the last few weeks. Japan’s Nikkei 225 is still down 54% since 1989.

Nasdaq is a mini Japan with a 8% loss in 15 years 5 months.

A lost decade could be coming globally in 2015 to 2025.

The Dow is Dow 3.4% this year and up 10.4% in the last 12 months. Get some glasses. — Garth

#248 Vanecdotal on 01.28.15 at 5:54 pm

#125 Marco

I completely agree. Horse…. barn, too little, too late, a last desperate politically motivated attempt to try and soothe the irritated average working folks. Better late, than never however.

#249 Kilby on 01.28.15 at 5:55 pm

#208 Nuke on 01.28.15 at 3:08 pm
Unions’ main and only purpose is to ensure that the surplus value created by labour is not sucked out of the enterprise by a non-engaged shareholder class. Productivity and successful business depends on a workforce that shares in the success of the firm. Unless the firm is a worker self-directed enterprise like most Silicon Valley start ups, then you have to have a union to ensure the profits are not lost. A union keeps the money flowing in the community because the employees spend their income and ensure a high multiplier. If that money is sucked out of the consumer cycle by a distorted profit taking structure you end up with the hellhole we are circling now. Unions are likely the only way to get this economy back on track.

Makes sense, no decent pay, no new cars purchased, no holidays to Banff, the Okanagan, Vancouver Island, the Kawarthas etc…, We all need to recycle money to keep any sort of economy going. So many begrudge families a living wage, so short sighted.

#250 Vanecdotal on 01.28.15 at 6:08 pm

#138 Tamsen

Yes, I am a believer. Spent almost 2 decades living in West Side Van until a few years ago and watched my old ‘hood transform before my very eyes into the eerie zombie shell it is currently.

To clarify, I’m not defending/excusing/denying foreign speculation has drastically altered Van in the last decade in particular, at all, although it has definitely also been in combination with easy access to historically cheap (prolonged historically low interest rates) money as well.

The point I keep trying to make here is there is only just NOW a rule change finally in effect that limits the previously (nearly) unfettered access to permanent residency for high net worth immigrants, and this will have SOME KIND of effect on Van RE going forward. How much, or how little effect remains to be seen.

#251 Vanecdotal on 01.28.15 at 6:19 pm

#180 industrial Guy

+1

Incredibly well put.

#252 eric on 01.28.15 at 6:31 pm

The Dow is down 3.4% this year and up 10.4% in the last 12 months. Get some glasses. — Garth

And house doubled in Toronto too since 2008. What are you saying?

That made absolutely no sense. — Garth

#253 For those about to flop... on 01.28.15 at 6:46 pm

#247
#138 Tamsen

Yes, I am a believer. Spent almost 2 decades living in West Side Van until a few years ago and watched my old ‘hood transform before my very eyes into the eerie zombie shell it is currently.
————————-
Yes I know there are a lot of empty condos in Vancouver but in my everyday life I work on 5 to 12 million houses on the west side and I don’t think you can blame the foreigners for turning it into a zombie shell.
The reason I give for this is that over the last 12 years of working on the houses the families that buy them consist of 2/3 kids and a lot of the time the grandparents and a nanny.
So your looking at 8/9 people in each house with 2/3 cars . The west side is defiantly busier since I got here.

#254 For those about to flop... on 01.28.15 at 6:48 pm

Should read” definitely”.

#255 Smart car is an oxymoron on 01.28.15 at 9:54 pm

Re cdn flier thats funny majority Canadians dont want spam really do you think so!!!! And what the majority of the rest of the world does…

Do you even know what spam is what we do is hardly spam but according to the new stupid rules of casl we are lumped in with the rest.

According to casl sending an email to friend who says they dont want to know how i am can be considered unwanted spam subject for the personal fine of 1 million.

Are people in this country so asleep you don’t understand the implications of this stupid new law????? Wake up the constitution guarantees freedom of speech or did we turn into a communist country???

What about junk snail mail i dont want it why discriminate fine them all for 10 million for wasting paper, fuel my time to open it etc… Fine some old friend for sending a postcard 1 million i didnt want hear from them why discriminate that is how stupid it is!!!!