The shock (4)

SHOCK 1 modified

Later this week realtors in Toronto and Vancouver will pop numbers showing that you can, in fact, fool enough of the people most of the time. Even when there’s one giant, gnarly elephant in the room.

That little interest rate nip by the Poloz poodles in recent days didn’t actually drop mortgage rates, but it seems certain to increase debt. My realtor-biker friends tell me moist Millennials have been racing their Hyundais and Kias from listing to listing in the past week, rekindling bidding wars for beater houses on wasted streets and even making the condo salesguys smile.

The central bank said it was buying some “insurance” against serious economic consequences of the oil collapse. But the kids heard otherwise. They think interest rates “are going down”, and that means houses “will be going up.” So they have to buy. Now.

This was exactly what Bank of Canada boss Stephen Poloz wanted, in his little black heart. With oil and other commodities recently crushed, layoffs mounting, tax revenues plunging and stores closing, reducing the price of debt was a cheap and quick fix. People are so predictable, after all. Surveys have shown most of the kids don’t even consider mortgages to be debt. So why not trick them into thinking they must buy now, or buy never?

In a day or two, we’ll see the early results. Meanwhile, I sure hope those virgins know what’s coming.

While oil bounced a little in the last few days and Toronto stocks roared higher, it seems clear one of Canada’s major industries has been seriously whacked. About 25,000 have lost their jobs in the patch, with more to come. The hit in Calgary over the last five weeks was about what you’d imagine. It’s a stampede for the exits.

There are now 113% more houses for sale in Cowtown than at this time a year ago. New listings continue to pile up, and sales are heading lower – down consistently each week by 35% to 40% from 2014. Last year there was a single month’s worth of properties to choose from. Now it’s more than five months. For condos, it’s seven months. Sales are at the lowest level since 2008, and listings are close to historic highs. The reversal from a few months ago is dramatic. And telling. A growing number of homeowners can’t get out fast enough.

In fact local realtors felt compelled to issue a statement this week: “A lack of recovery in oil has many concerned about their employment status and this concern is reflected through the weaker sales activity in Calgary’s January resale figures,” said the local board’s chief economist. And this, from the president: “Consumers are concerned about what will happen to Calgary’s economy and their personal exposure to this risk.”

Things aren’t any better this week. Last February 45 houses sold on the first day. This time, just ten. The media price as of Monday was down 6.9%. And this is just the start. Wait until all those new listings roll over in 60 or 90 days, with price reductions attached to them.

But, cry the metrosexual latte-sipping hipsters from Leslieville and Kits, this ain’t Calgary. We don’t care!

And they don’t. Stevie Poloz made sure of that, by dazzling them with the drug of cheaper debt. For this, he deserves some GreaterFool fire ants in his shorts.

What knocked Calgary housing into the ditch? Not oil. That was just the catalyst. Instead, it’s a run on confidence caused by fear of the future, wrapped up in job loss and lower incomes. This is a shock to people. Like the 416 and YVR hipsters, they expected the immediate past to dictate the future – rising house equity, more net worth, ever-greater demand for their real estate, guaranteed profits and a one-asset investment strategy that made them special and smart.

But a lot of families have found out how quickly that can change – and spread. So not only have listings exploded, but the buyers have gone. It’s a classic property play that always happens when markets are shocked by unexpected events. Sadly, gobs of today’s homeowners – who took on massive debt to buy in – have never seen it happen. How could this be, they must wonder? I bought my house in a bidding war, and now nobody wants it?

Yes, Calgary is not Toronto or Vancouver. But we’re seriously connected. Oil’s the biggest Canadian export, and it’s in trouble. It contributes massively to public revenues. The federal government is now too chicken to even bring down a budget. The country went into negative growth in November. The last jobs numbers were revised cruelly downward. In one week we lost 20,000 retail workers. And our central bank choked.

So, keep it in perspective when the big-city realtors tell you the market’s on fire. Risk took a giant notch up when the rate came down. It’s been eighty years since we were this close to deflation. The last time, those with houses and debt desperately wished they could trade it for cash and choices.

There are many tonight who know what I mean.

272 comments ↓

#1 Muffintop on 02.02.15 at 7:35 pm

First

#2 Randy on 02.02.15 at 7:35 pm

Great. I’d like to leave Ontario and move out west

#3 Yogi Bear on 02.02.15 at 7:37 pm

GG Poloz for kicking the can down the road.

Idiot.

#4 crowdedelevatorfartz on 02.02.15 at 7:39 pm

80 years ? 1935 ……a la the depths of the Depression?

#5 Babblemaster on 02.02.15 at 7:39 pm

Those are the facts Garth. Logic doesn’t matter in this RE market. You should stop calling for lower prices in Toronto. It isn’t going to happen. The Feds will make sure of it as they will do everything in their power to keep it propped up.

#6 Smoking Man on 02.02.15 at 7:41 pm

Garth, finally, God damn it you finally get it.

It’s the Herd… How many damn years did it take me to turn you.. Through away the slide ruler of Debt to Income..

Well glad you see it now.. And I suspect now that you put more weight behind herdonomics, your prediction call ratio will improve substantially.

Smoking Man
PhD Herdonomics.
UOG.

#7 Rob on 02.02.15 at 7:42 pm

Geez Garth give it up. You blogged about the Rolling Stones but you’ve been singing the same song for years. You have been correct about gold, US real estate and reits but you have been so wrong on canadian real estate. I don’t think Calgary will affect Toronto or Vancouver.

#8 Oceanside on 02.02.15 at 7:48 pm

Housing deals falling through and job losses in Alberta are already affecting sales here on Vancouver Island, much faster than we thought….

#9 Not everyone wants to be first on 02.02.15 at 7:49 pm

No sweet .. we got mayor of the world in charge!

http://calgaryherald.com/news/local-news/naheed-nenshi-crowned-world-mayor-2014

#10 Fowler McVicar on 02.02.15 at 7:51 pm

Oil is moving up, perhaps there will be less job cuts in the energy sector after all? Maybe housing will bounce back with what looks like a floor in WTI Oil. Or is this just trader-gamesmanship?

#11 King Nenshi on 02.02.15 at 7:51 pm

How can ya not like that cheesy grin

http://www.calgarysun.com/2015/02/02/calgary-mayor-naheed-nenshi-named-2014-world-mayor-from-host-of-municipal-leaders

#12 Alison on 02.02.15 at 7:52 pm

Having gone thru the housing crisis in the states…it is not fun. I put down 25 percent, and it was gone in a flash. If you are going to buy in the future, and there are two people working, do it on one income or not at all. Thankfully the prices are back up a bit, but it is not a fun ride. Calgary – hate to say it- you are not that special!!!

#13 Dominoes Lining Up on 02.02.15 at 7:53 pm

No clip available yet Garth, but today on radio in the GTA there are ads from TREB boasting what a “great investment” real estate is.

The ad compares a suburban property price of 2004 with 2014, applauding the “64%” increase in price.

(Almost equal to the 63% that it is overpriced.)

http://www.bnn.ca/News/2015/1/8/Canadian-home-prices-are-overvalued-by-63-Deutsche-Bank-says.aspx

#14 TurnerNation on 02.02.15 at 7:53 pm

Yesterday’s photo: I can’t get no Stratisfaction?

#15 Steve-0 on 02.02.15 at 7:54 pm

#399 james on 02.02.15 at 6:58 pm
Rebecca #396

If someone cannot work at 65, or at 80, or at 30, they deserve help.

—————————————————————–

You are not helping yourself.

What a bitter, condescending, judgmental attitude you have.

—————————————————————–

James, you seem to be the bitter and judgmental one. What Rebbeca describes is responsible socialism. Well off retires collecting OAS is no better than jobless dirt bags drinking their welfare checks on their front lawn most of their life.

#16 Joe2.0 on 02.02.15 at 7:57 pm

The cartels aka Banks, RE board, TV and print will lie or fudge numbers.
Too much money involved.
They have a death grip on the consumer.

#17 John on 02.02.15 at 8:01 pm

THIS SUCKER’S GOING DOWN!

#18 Bodenby on 02.02.15 at 8:07 pm

Thanks for including Hyundais in with the Kias….they’re everywhere too!

#19 Conrad on 02.02.15 at 8:11 pm

Meanwhile in Victoria we have the lowest new listing count in a decade and the lowest active listings in 5 years.

Don’t really know where the strength in this market is coming from but bidding wars are back on anything decent with a suite (according to realtor friend).

#20 Julie K. on 02.02.15 at 8:11 pm

For years, I have checked Realtor.ca daily keeping a close eye on RE in my neck of the Canadian woods (I have interests in the North Vancouver & Gibsons, BC, markets). For fun today, I searched new listings only (2/2/15 ~ 4 pm PST) posted for Vancouver, Toronto, Calgary, Edmonton, Markham (my old haunt until ’91). Data was filtered for freehold+houses only. Can’t confirm the geographical area the map displays scaled identically to each metro area (so I am not suggesting this exercise is at all scientific — just fun remember) but here is what I observed:

Vancouver (incl North & West Van) = 2 (both in North Van)
Edmonton = 40 (scattered around the city)
Calgary = 47 (ditto)
Markham = 6 (5 of them north of the 407)
Toronto = 133 (stretching between Pickering & Oakville & points north)

As an aside, why are actual sold/sale prices not published as readily as list price? I follow a few local (BC) realtors who do publish sale/sold numbers on a weekly basis but this hard, fact sharing is a rarity it seems. Why?

#21 downtown renter on 02.02.15 at 8:11 pm

Since the tar sands and related industries only represent roughly 2% of our GDP can anyone explain why the price of oil has such a disproportionate impact on our economy?

Energy is 8% of GDP. — Garth

#22 We're #1 on 02.02.15 at 8:13 pm

Well Van is the SF of Canada, Toronto is #1 in the world, and Calgary has world’s #1 mayor…. so there is no problem.

#23 PG on 02.02.15 at 8:17 pm

I have a feeling the lost oil revenues will be collected somehow. Maybe with property taxes or some other transportation tax. And when oil goes up, the extra tax will stay and become a part of our daily lives.

#24 DG on 02.02.15 at 8:19 pm

Exit Rule for Bubbles: you only get out if you panic before everyone else does.

Canadian real-estate at these stratospheric prices should be viewed as a game of musical chairs with a progressively contracting number of greater fools.

This game viscous game has just begun in Calgary, however the absence of negative consequences to date in the Vancouver and Toronto real-estate markets has led everyone from the average debt serf, investor, politician, and central banker to erroneously believe that those consequences simply will not emerge. Calgary is the canary in the coal mine warning of something wicked this way comes.

Those who heed this advice and panic first have a chance of getting out ahead of the herd. Those who wait and panic with the herd will get trampled.

#25 Roger_Home_Inspector on 02.02.15 at 8:20 pm

It’s true- when the rate decrease was announced, our phones began to ring off the hook. At the same time, our corporate facebook page (which is comprised mostly of realtors and mortgage brokers) exploded with ads suggesting that there’ll never be a better time to buy or refinance so call now! I’ve been to this circus a few times before so I now see a plethora of “houses” in my professional future that I wouldn’t let my dog live in as young couples attempt to “get into the market”. Not only are these nice folks at a significant financial risk due to the potential down side in the market or a rise in interest rates, but they’ll be on the hook for potentially significant repairs and upkeep on a slanty semi. Also, they likely won’t be able to sell that rat trap if things go south as what buyers are left if the shf become incredibly picky as such events simply create a strong buyer’s market. Also a lot of real estate “professionals” pushing rental properties as a sound component of any financial plan. Just the thought of this made me throw up in my mouth a little…

#26 A Yank in BC on 02.02.15 at 8:26 pm

This past Sunday, a Realtor was holding an open house in my neighborhood. Out of curiosity, I walked over to take a look inside. Naturally, the Realtor started a conversation with me trying to assess my interest in buying. When I told her that I was renting a house a few doors down, and really didn’t expect to live in the area any more than another year or so before moving away from the area, she immediately suggested that I buy a house (from her of course) and sell it in a year’s time when I move, and “make a little money”, she said. As God as my witness.. she actually said that. I laughed out-loud (just couldn’t control myself) and wished her a nice day.. and left. She seemed startled that I thought her advice was any less than a great idea.

#27 First Time Poster on 02.02.15 at 8:28 pm

Spoke with a realtor here in Edmonton about listings vs sales over 2014. He bluntly stated that sales have dropped and listings spiked same as Calgary. The conversation was rather amicable as he was well read, was aware of a variety of economic and political events that would affect real estate and pulled no punches.

As far as mortgage rates – it didnt take long for our mtg holder (first national) to announce rate cuts across the board – .15% less than 2 weeks ago.

#28 Marco on 02.02.15 at 8:32 pm

@ downtown renter

It isn’t just oil taking a hit.

“But a commodity bust will have a far wider impact than just in Alberta. Close to half of all Canada’s exports are tied to commodities, while oil and gas alone account for roughly 20 per cent.”

http://www.macleans.ca/economy/economicanalysis/what-the-commodity-bust-means-for-canadas-economy/

#29 Fatima Llewellyn on 02.02.15 at 8:33 pm

Canadian real estate agents are slime.

Honk if you agree.

FL.

#30 The shock | Realties.ca on 02.02.15 at 8:35 pm

[…] Source: http://www.greaterfool.ca/2015/02/02/the-shock-4/ […]

#31 Piccaso on 02.02.15 at 8:37 pm

The shock…

I went to see my doctor for a prescription refill and he says… Your an old man, you should start getting regular health checks.

I never thought about getting older and medical or financial issues. Then suddenly I was older and I’m thinking… wow did that happen fast.

#32 ANON on 02.02.15 at 8:37 pm

Buy oil to sustain the economy, because buying houses destroys the economy? Buy houses to sustain the economy because oil is gross and smelly? Tax someone more? Tax someone less? Spread the debt around a bit? To all levels? Let only the 1%-ers hold the debt? Start a union? End the unions? Only private? Only public? Average weighed? Median weighted? Many solutions in yesterday’s comment section …
Start a marketing campaign spreading FUD about how any other oil except Pure Canadian AB-AAA will give you Alzheimer’s? I think we can have a winner with this one.

#33 Entrepreneur on 02.02.15 at 8:40 pm

I guess “bidding wars” is a good clue to stay away from housing, buying with emotion not with brains. How don’t know how some realtors can sleep at night. It all comes around.

#34 CPG on 02.02.15 at 8:41 pm

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

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

http://credit.bankofcanada.ca/householdcredit

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

http://credit.bankofcanada.ca/businesscredit

#35 TS on 02.02.15 at 8:42 pm

I remember growing up in Toronto when Leslieville was just a sh*t hole right next to the Sewage Treatment plant that smelled really bad.

Does Dundas still stink when you get a nice north wind coming off the Lake? :)

Can’t believe this is a sought after neighbourhood…

#36 neta on 02.02.15 at 8:42 pm

Interest cut of 2009, if I am not mistaken, was 300 Bp. On top of it, the Federal Government has bought $75 bn of most toxic mortgages off banks hands, that eventually grew to $120 bn. And in top of that, the deficit spending pumped another $175 bn to fill the pit. And on top of that, the massive printing (that we called Stimulus) all around the world promptly resulted is huge spike in prices of commodities, including Oil, as a hedge against the feared hyper inflation.
Needless ti say what this commodities run has done to Canada. The looney shoot up, Canada suddenly became the example of prudency and financial stability, causing huge inflow of capital from all around the world. All Chinese, Iranians, Russians…, you name it, wanted to either move to Canada, or at least park their money in this safe harbor, buying house along the way.
Fast forward into 2015. The external shock that Mr Carney was working us about is on our door steps. And welcome the consequences..
There is no too for significant rate cut left any more, just 25-50 Bp. The looney is crashing, and investors are getting edgy about perceived safety if Canadian bonds and housing market. The Great White North Short movement that is getting against Canada is getting mainstream. Predatory hedge funds has been shorting Canada for the last 8 months, and now the process becomes self-enforcing. The ability of Canadian government and BoC to resume pumping money is nowhere close to where it was 6 years ago.
Can Canadian consumer pull it one more time? Well, U wouldn’t be surprised if it try, taking even more debt along the way, but it just cannot be on the same scale ad in the past, and the half life of it is getting shorter and shorter.
By the way, low looney, although beneficial to productive economy as a tool to boost exports, is not gonna bring the material relieve gas enough to stop the avalanche that is rolling on us right now, but in the immediate future it will have a very negative impact on prices and our ability to balance household books.
It is interesting ti see how things going to unfold, and I don’t think it will take much time for the trend ti establish itself. My prediction? – U am not optimistic.

#37 Red Deer Rob on 02.02.15 at 8:46 pm

Somebody wrote a book on this kind of manipulation of the markets, it’s called The Road to Serfdom.

#38 Edward on 02.02.15 at 8:48 pm

There was an obvious shock to the system in Calgary and Fort Mac, since the bulk of the population either works for the energy industry or caters to the ones who do.

But Edmonton hasn’t had such a dramtic rise in listings or a substantial drop in sales.

The economy is a bit more diversified there. It seems to be more business as usual.

#39 TS on 02.02.15 at 8:49 pm

Garth,

Oil is back at $50, US domestic production is down, the TSX is back up closing in on all time highs, and people who knew bought some tasty Oil Stocks at a steep discount in December (Suncor at $31 etc with a 3.34% dividend)

Glad I didn’t buy US like you said. Canada has had way bigger upside in 2015 so far.

I suggested a larger US weighting in 2013. — Garth

#40 IslandGirl on 02.02.15 at 8:50 pm

We have been patiently watching the market in the hopes to eventually buy in (current rental has mold and a leaky roof) since current available rentals don’t allow furbabies. And there is still a lot of denial here. I hear people telling me, it’s all about location and everyone wants to live on Vancouver island because of the climate and cost.

I’m not sure what glue their sniffing, no work on the island (everyone next to me on the plane seemed to be going to Fort Mac), but no one wants to budge on their prices. Hoping the next few months prices head in a better direction for us.

I credit Garth for getting us out of home ownership when it was wrong for us. We may be renters but we’re headed in the right direction financially!

#41 José on 02.02.15 at 8:52 pm

#8 Oceanside
“job losses in Alberta are already affecting sales here on Vancouver Island, much faster than we thought….”
———————-
I’m not sure where you’re getting your info from, but in both Victoria and Nanaimo, sales are ahead of last year and listing are way down.

#42 Hexagon on 02.02.15 at 8:53 pm

a good friend of mine here in YYC just got a notice from his lanlord today that he will sell his condo once the lease expires in April… I guess a lot more inventory is coming to the market this spring. If oil doesn’t recover soon, it’ll be a bloodbath indeed.

#43 Freedom First on 02.02.15 at 8:57 pm

Debt is not wealth. Debt is the Plane behind you on the highway.

Through my life the people who thought I was crazy have come to wish they had put freedom first. I know most of the Blog dogs are wealthier than me, but being in the top 10% is not painful. Never no planes. And I’ve been self supporting since 17, as circumstances beyond my control forced me to learn fast how to work and value money for what it truly is. Many many many people from every generation have been financially ruined by debt. I’ve seen it. And from all walks of life. Better than debt: thinking, learning, and creativity.

#44 TurnerNation on 02.02.15 at 8:57 pm

Our Reich leaders are carrying out orders to get our assets on sale for pennies on the dollar. See who will swoop upon AB’s muddied assets. It’s important work. In fact in the last (3rd) era corporate workfare mastermind Albert Speer was spared the squad finale and instead released after years in prison. Rewarding work.

#45 neta on 02.02.15 at 8:59 pm

#7 Rob
As soon as the perception if Canada being a safe harbor start to change among the investor community, both Vancouver and Toronto will see the consequences pretty fast. And it start changing already.
Please keep in mind that the internal Canadian capital market is too small to support that kind if prices and that level of demand. Ultra low long and medium term Canadian bonds that are feeding 75% of our mortgages are supported by foreign appetite for Canadian Bonds. And this appetite is beginning to subside.

#46 DV01 on 02.02.15 at 9:03 pm

“It’s been eighty years since we were this close to deflation”

Doomer-come-lately.

Another subtle stick save.

Amazing

#47 Not a Realtor on 02.02.15 at 9:07 pm

The oil drop could be considered a black swan event because it happened so fast and was so severe. Many people in Calgary are worried about there jobs and we’re seeing the fallout.

Oil falling won’t have this effect on other parts of the country like Vancouver or Toronto, even if the Federal government experiences a drop in revenue.

Keep trying Garth.

#48 John Prine on 02.02.15 at 9:09 pm

#19 Conrad on 02.02.15 at 8:11 pm
Meanwhile in Victoria we have the lowest new listing count in a decade and the lowest active listings in 5 years.

Don’t really know where the strength in this market is coming from but bidding wars are back on anything decent with a suite (according to realtor friend).

3090 active listings, 66 new today, 22 off market, 21 price changes and 35 sales completed. Your realtor friend is doing better than most in the Greater Victoria area.

#49 Rebecca on 02.02.15 at 9:09 pm

Bottom line: keep renting and investing in financial assets instead.

Would like to have a place I own some day so I can do crazy things like paint murals and install decent appliances, but this is a gut emotion that too many people base their financial decisions on. In the long haul I’d rather have liquid assets sufficient to support myself. Tragic that the government is capitalizing on the impulses of the moment and helping my generation mortgage their futures away.

#50 ANON on 02.02.15 at 9:09 pm

#42 Freedom First on 02.02.15 at 8:57 pm
Debt is not wealth.

_______
It truly is.
However, the trick here is holding last man standing’s debts, and not biting more than you can chew.

#51 Good news from Canada on 02.02.15 at 9:12 pm

DELETED

#52 Smoking Man on 02.02.15 at 9:12 pm

#44 neta on 02.02.15 at 8:59 pm
#7 Rob
As soon as the perception if Canada being a safe harbor start to change among the investor community, both Vancouver and Toronto will see the consequences pretty fast. And it start changing already.
Please keep in mind that the internal Canadian capital market is too small to support that kind if prices and that level of demand. Ultra low long and medium term Canadian bonds that are feeding 75% of our mortgages are supported by foreign appetite for Canadian Bonds. And this appetite is beginning to subside.
……….

And that appetite will become a ravenous hunger when oil goes back up, and Bond investors will want to make the currency play.

See why I’m rich..

I see the obvious.

#53 Not a Realtor on 02.02.15 at 9:14 pm

New Toronto condo sales soared back in 2014 with developers across the GTA recording their third-highest level for sales ever.

So far in 2015, condos sales are keeping up this pace.

#54 Sue on 02.02.15 at 9:24 pm

#39 Island Girl

You have my sympathy about the mold etc. However, if you had bought a place (or when you buy a place) you may be confronted with a similar problem.

So, think about mold control and try to fix or mitigate at least some of the problem if you can’t get the owner to help.

It can be pretty horrible for your health and that of your pets, depending on the type of mold.

#55 just noticed on 02.02.15 at 9:28 pm

Garth — you’ve run out of unique post titles?

#56 For those about to flop... on 02.02.15 at 9:31 pm

I NEED HELP!
I have never made a RRSP contribution but I get the gist of it…..deferred taxes and such.
What I need help with is what is the ramifications of contributing to much to soon.
I have 50k of room,should I put in as much as possible or just put 10k a year or whatever is left after TSFA.
I would appreciate some help on this matter.

#57 Edith on 02.02.15 at 9:33 pm

The reality in Vancouver is that there is not an over supply of new construction, building starts are down, listings of existing homes are way down, sales are very strong, interest rates are extremely low and will be for a while yet, the economy (in BC) is projected to be one of the best in Canada, unemployment is down, immigration is going up, the fall in oil is good for drivers, the drop in the Loonie is good for tourism, forestry and the film industry. Heck there might even be a bit more investment in residential real estate by foreigners since the Loonie is giving them a big discount, but we can’t talk about that.

#58 screwed on 02.02.15 at 9:34 pm

Calgary real estate hype

Doubtful all the sellers are motivated to taking a hit on their equity. Not all sellers have to worry about their income. Sure, some will want to cash in at the top.
BUT they still have to live somewhere.

Sales are off by 40% but that means 60% are still buying from the peak of last year.

Who is buying and why?

Wake me when half the city is losing their jobs and there are NO transactions to report.

Banks will not foreclose on Alberta en masse. In the event of mass layoffs, the banks will rework the mortgages and roll over at near 0% with longer durations and interest only payments.

The template was the US market where the banks had access to near interest free capital from the Fed and then rolled over mortgage debt to allow people to keep their homes. Banks were begging for the mortgagees to stay put and make whatever payments they could afford. Easy to say when the CB has got your back with free money.

#59 crowdedelevatorfartz on 02.02.15 at 9:34 pm

Anyone else heard about this Court case?

Canadian govt loses case on appeal re; Bank of Canada Govt Bonds?

http://market-ticker.org/akcs-www?post=229803

Mainstream media asked not to report on this story by the govt.

#60 Bill Gable on 02.02.15 at 9:34 pm

I will NEVER forget my Grandmothers words, uttered when I was a wee kid, of about 8.

“If we didn’t have a Garden in the Thirties, we would have starved”.
Uh, kinda stark for a little lad to fathom, but the look in her eyes when she said it, shook me up.

Many of my friends have no clue what awaits. One friend says he has bought another condo for “Investment purposes” – that will be built in 2 years – and get this – he put the DP on one of his many credit cards.
He is already running up his HELOC on his Yaletown shoebox, because he had to have that new Lexus.
He makes great money in streaks, as a contractor, and seems oblivious, to the gathering clouds.

I think Poloz wins the Darwin award for the stunned move of cutting rates. Just wait until the United States raises theirs, the Chinese unleash the REM, and the Ukraine dissolves in a pile of cordite.

No time to get fancy.

#61 boonerator on 02.02.15 at 9:35 pm

This triumph of belief over upcoming reality reminded me of one of my favorite Monty Python sketches:
“Monty Python: Mystico and Janet – Flats Built By Hipnosis”
https://www.youtube.com/watch?v=1ujRE2IkEIo

The flats are very cheap and last a long time…. as long as you believe in them.

#62 Victor V on 02.02.15 at 9:41 pm

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/02/02/calgarys-housing-market-under-pressure-as-new-listings-inventory-soar&pubdate=2015-02-02

Doug Porter, chief economist with Bank of Montreal, noted Calgary saw the largest percentage increase in prices, among major cities, in 2014.

“By some measures it was the hottest and the tightest market in Canada,” said Mr. Porter. “The change is beyond dramatic and about as quick as you can say oil prices plunged, we are going to see this go from a sellers’ market to a buyers’ market.”

How bad will it be? Mr. Porter says nowhere near as bad as 2008. “We had a global recession. It won’t get that bad, but we will see a correction in Calgary and probably Edmonton as well,” adding Alberta’s capital could face even more difficult circumstances if the provincial government starts “swinging the axe” – cutting jobs – which would make the city even more vulnerable than Calgary.

#63 Linda on 02.02.15 at 9:42 pm

Good heavens, the wailing, doom & gloom is just a wee bit over the top here. So oil has slumped. Been there, done that & more than once. House price dip? Check. Investors heading for the exits OR bulk buying stocks on the cheap? Check. Panicked house sellers who suddenly see a drop in household income due to one or more layoffs in the family? Check. Interest rate cuts to stimulate the economy? Check.

At the end of the day, people have to live somewhere. Homes may be repossessed if the current occupants can’t pay the mortgage & the banks foreclose. The economy may need a boatload of Viagra stimulus to reassure the populace that the sky is not falling. Eventually however the price of oil will recover (sorry, no readily available, marketable energy source is yet available to replace said resource & yes, global warming is happening but not enough for Canadians to all of them be able to live in grass huts) & BTW, oil is in a lot of stuff you use every day. Like plastic, asphalt, carpet, soft ice cream, even the cash one might choose to carry from time to time in place of that little plastic credit or debit card.

So calm down already, breathe & instead of panicking, take steps to minimize the fallout. Cut or eliminate debt asap. Only buy what you truly need (yes, this will also affect the economy in a negative fashion until the supply/demand adjustment occurs) & if you are so fortunate or astute enough to grab the bargains as they become available shop wisely & well.

#64 Mike T. on 02.02.15 at 9:46 pm

#43 TurnerNation

You’ve seen this movie before eh?

It’s amazing that we keep falling for the same scam. Build it up, burn it down.

It’s so predictable that our masters can have ‘their’ rock bands sing about it and it fazes no one….

https://www.youtube.com/watch?v=dxytyRy-O1k

it’s not a good song, that’s not the point…

♬ ♬’We’re building it up
To break it back down
We’re building it up
To burn it down’♬ ♬

#65 Mylar Jolerspoon on 02.02.15 at 9:50 pm

@ #55 Use the TFSA first and RRSP later. Invest in very high quality ETFS like XRE and XSP. Enjoy saving for your future and I hope your investing goes extremely well!

#66 West Coast on 02.02.15 at 9:52 pm

#60 boonerator – thanks for the Monty Python sketch – made my day and oh so true….How about??
“Do you believe in magic in a young girl’s heart
How the music can free her, whenever it starts
And it’s magic, if the music is groovy..etc. ”
https://www.youtube.com/watch?v=mDYNuD4CwlI
I’m sure one of us blog dawgs can rework these lyrics to capture Canada’s collective real estate madness. How about it?

#67 Sue on 02.02.15 at 9:53 pm

#48 Rebecca

If the appliances in your rental really bother you, and depending on your time horizon, could you buy your own and install them?

I know it’s a pain (moving the old ones, storing them, landlord etc), but it’s a lot cheaper than buying a whole house just to get a nicer fridge and stove.

#68 Nerf Herder on 02.02.15 at 9:54 pm

There are quietly lots of layoffs happening in Calgary, on such a small scale that they aren’t being picked up by the media. 40 here, 60 there….. It doesn’t take long for that to add up.

#69 Burnaby604 on 02.02.15 at 9:55 pm

Yepp bidding wars breaking out again…..it is mass mentality here, it’s like religion and renting is sin, it’s a positive feed back loop , the only thing that will stop this market is quick and sharp rate increases , that’s not goin to happen. So the music keeps going , has there ever been a meaningful correction in vancouver since the 80’s ? The boomers are right real estate has been a great investment

#70 Daisy Mae on 02.02.15 at 9:56 pm

“This was exactly what Bank of Canada boss Stephen Poloz wanted, in his little black heart.’

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

Well, he’s being controlled by Herr Harper, of course. It’s unbelievably sad that so many naive young people have been lured into massive debt by this government. There will be heavy consequences. Always are.

#71 HD on 02.02.15 at 9:56 pm

#48 Rebecca on 02.02.15 at 9:09 pm

Bottom line: keep renting and investing in financial assets instead.

Would like to have a place I own some day so I can do crazy things like paint murals and install decent appliances, but this is a gut emotion that too many people base their financial decisions on. In the long haul I’d rather have liquid assets sufficient to support myself. Tragic that the government is capitalizing on the impulses of the moment and helping my generation mortgage their futures away.

—————————————-

Admittedly, I used to desire RE before I knew any better. I currently rent and have a decent balanced diversified portfolio à la Garth.

Even if RE were to correct 50-60% in Vancouver where I live, I wouldn’t purchase any. Why bother? In my case, 30 yrs old, not married, no kids and not planning to change this anytime soon if ever.

I really don’t want to deal with maintenance, upkeep, upgrades and have most of my wealth stuck in one asset….not my thing.

Well, to each their own.

Best,

HD

#72 No Canada, No on 02.02.15 at 9:58 pm

Canadian banks are indicators what’s going to happen
http://finviz.com/quote.ashx?t=RY&ty=c&ta=0&p=m

Keep an eye on those 5 puppies, they’ll tell the story.

#73 Silver on 02.02.15 at 9:59 pm

Supreme Court
COMER VS BANK OC CANADA
January 26 th 2015

Bank of Canada and the banks
lost the 3rd appeal

COMER wins… Period…..its over…
no more secret Public Private for profit deals…
no more lending the banks our capital so they can lend it back to us with interest…
user fees are dead…

Waiting to see the final court document
but
banks lost bigtime….. in overtime…
Thoughts…. anyone
Silver

#74 Sue on 02.02.15 at 10:01 pm

Sorry for yet another posting but the TorStar’s style maven has come out against real estate:

“And this is what I mean about porn. Real estate runs on hunger and taste, just like the sex industry.”

http://www.thestar.com/news/insight/2015/01/16/real-estate-profit-is-the-date-whos-too-pretty-for-you-mallick.html

#75 For those about to flop... on 02.02.15 at 10:02 pm

Myler ….read the post again.
I am asking about taxes on RRSP.

#76 Mark on 02.02.15 at 10:06 pm

“Banks will not foreclose on Alberta en masse. In the event of mass layoffs, the banks will rework the mortgages and roll over at near 0% with longer durations and interest only payments.”

I agree that generally the banks do not want the houses back. However, this time around, the CMHC is the backstop for the loans, so there is no real incentive for the lender to “negotiate”. The banks will make an offer, probably the posted rate (which is quite a shock interest-rate wise to most borrowers accustomed to heavy discounts). If the recipient of such offer doesn’t like it, and can’t qualify for a loan elsewhere, the foreclosure process begins.

With $900B of Canada’s $1.2-$1.3T mortgage market under CMHC insurance, there will be no ‘negotiation’. Its a “take it or leave it” proposition. The bank is fully protected, in most ‘at-risk’ cases, against default. And trust me, no “near 0%” loans will go out, period.

#77 Andrew Woburn on 02.02.15 at 10:07 pm

#340 Apocalypse2014 on 02.02.15 at 2:32 pm

“Billionaire Tells Americans to Prepare For ‘Financial Ruin’”
(Plus, The Donald has better hair than you, Garth. Just sayin…)
————-

“Politics is show business for ugly people”- describes the Donald to a “T”.

#78 Brian Ripley on 02.02.15 at 10:09 pm

DG at #24 above may have a point:
“Calgary is the canary in the coal mine warning of something wicked this way comes.”

Calgary & Edmonton SF Houses peaked a year before Vancouver and Toronto SF Houses and then they all bottomed together into the March 2009 Pit of Gloom.

http://www.chpc.biz/6-canadian-metros.html

#79 drydock on 02.02.15 at 10:15 pm

The big picture is that years of cheap plentiful high quality oil has created the conditions for the 7 billion people and growing population.
Now we have junk oil that is not cheap .
Uh oh.

#80 Washed Up Lawyer on 02.02.15 at 10:16 pm

#63 Linda

Good comment.

Another oil price shock. An oil price shock is not a Black Swan event.

#81 rebel on 02.02.15 at 10:19 pm

12 Alison on 02.02.15 at 7:52 pm

Having gone thru the housing crisis in the states…it is not fun. I put down 25 percent, and it was gone in a flash. If you are going to buy in the future, and there are two people working, do it on one income or not at all. Thankfully the prices are back up a bit, but it is not a fun ride. Calgary – hate to say it- you are not that special!!!
==============

No they are special . SPECIAL NEEDS!

Been through the 80’s interest rates shop up in a flash. Government couldn’t sell any bonds, could raise capital to feed the government money burning machine.

Line ups for jobs were several blocks long just to get an application.

Calgary is getting hit soon those paychecks will be turn into ei checks may 1000 per month. How can you go from 20,000 to 1000 and still make payments on you mortgage. go figure. Ontop of that the canadian dead duck is taking a dive soon it would be work 70 cents and the price of the basic will shoot through the roof.

Notice the price of rice and vegi’s up up and up

Also Gasoline is back over a buck. Yeah, its the dead duck effects.

Next is the Banks foreclosing properties. (humm) landlords aren’t all too bad when you got the badazz banks bullying you

#82 CJ on 02.02.15 at 10:20 pm

My favourite kind of Calgary basher is the one who has had his hands out for years collecting equalization payments.

#83 fancy_pants on 02.02.15 at 10:24 pm

engage tongue in cheek.

deflation will occur this Thursday until close of business. http://www.cbc.ca/news/business/target-canada-liquidation-sales-this-thursday-will-be-like-black-friday-1.2940552

remove tongue from cheek.

last one out, turn out the lights.

#84 Smoking Man on 02.02.15 at 10:26 pm

The shock.. How’s this one.

Foreign Affairs Minister John Baird will resign from his position in the Harper cabinet as early as Tuesday, CBC News has learned.

Inside scoop sir Gartho.?

#85 peter on 02.02.15 at 10:27 pm

I have told more than once and I will tell one more time….house prices in GTA will flatten. House’s price won’t increase, it won’t drop. Few people are going to suffer if they really have to do a quick sale. RE will behave different than before.

#86 Apo-collapse Now on 02.02.15 at 10:30 pm

Garth,

Cant’ help but hear Jim Morrison, crooning “this is the end” while reading this dire forecast on the loonie….
http://www.bloomberg.com/news/articles/2015-02-02/loonie-seen-reaching-record-low-of-60-u-s-cents-oil-drop

#87 Andrew Woburn on 02.02.15 at 10:31 pm

Why doesn’t the Eurozone work? This article finally nailed it for me. The Germans really, really don’t do debt.

“Even to visitors, it’s immediately apparent that Germany has a distinctive approach to spending and borrowing. It’s hard to imagine an IKEA in North America not accepting credit cards, as is the case in Berlin (cash and debit cards only, please).

Cash is still used for more than half of all transactions in Germany, according to the latest available figures from the Bundesbank. Even when cards are used to pay for items, they are predominantly debit cards. (Indeed, the whole concept of credit cards is different in Germany: usually the balance is automatically debited from a person’s bank account on a given date, with no automatic – and costly – extension of credit.)”

http://www.theglobeandmail.com/report-on-business/international-business/european-business/at-heart-of-new-euro-crisis-germanys-obsession-with-debt/article22740448/

#88 365 Days and Counting on 02.02.15 at 10:33 pm

Happy Groundhog Day.

Well here we are. It was, I figured, about 500 days in September til the real estate meltdown hit all over Canada. Time flies faster than shuttle planes leaving the oilsands.

It has hit, hard, in Alberta and will get worse there. I did not think the plunge would be so sharp anywhere by this time. Shows you just how fast, how bad, things can turn.

House horny fools egged on by an unethical industry will be suckered one last time, for a while, in 416 and 604 this year. Wile E Coyote moment off the cliff.

The rest of the country is fast settling into a new reality of lower prices and demand.

One year from now the silence will be deafening across the whole country. The spring market will be dead in Toronto and Vancouver as well by 2016. Fear will replace house lust.

It will be Groundhog Day for a long time for people who have piled onto the bandwagon. With no kisses and happy endings for those who have jumped aboard real estate and a single asset strategy recently. Too many personal tragedies will conjoin with a national economic one.

https://www.youtube.com/watch?v=M628DuIEZ_o

#89 Marco on 02.02.15 at 10:40 pm

@ 69 Daisy Mae,

Yep,

All in the name of votes.
They needed to pump the market up in 2009, as it started to correct, so they could get their majority. Looks like they pumped it up a bit much though.
They have to keep it aloft if they have any chance of a majority next election.
They are running out of ammo.

#90 TRT on 02.02.15 at 10:42 pm

Oil is back up to $65 CND.

Couple this with 0.25% interest rates in the summer and housing goes vertical.

Debt will surely go up.

Good. Then 2 choices in the future:

1) Keep RE ponzi scheme going with ZIRP and/or Increased Immigration

or

2) Crash

Sorry Garth, no “slow growth” scenario plausible anymore. The Conservative government really screwed this up. Going forward, the people with money will want this to crash after people are in maximum debt. Got to love crony capitalism.

#91 Ralph Cramdown on 02.02.15 at 10:46 pm

#72 Silver — COMER wins… Period…..its over…
Thoughts…. anyone

I think you’re WAY out of your depth. It appears plaintiff COMER has partially won a second appeal (and cross appeal) of a granted motion to dismiss.

Want to know how it’s going to end? There’s precedent:
http://en.wikipedia.org/wiki/Jarndyce_and_Jarndyce

#92 crowdedelevatorfartz on 02.02.15 at 10:47 pm

@#57 Edith
Gas prices jumped 9 cents per liter from Sunday to Monday ($ 1.10 per liter this am for regular gas in the “Best Place on Earth’) and the local Mayors want voters to vote “YES” in a referendum for ANOTHER transit tax increase.
Pray tell are you a realtor par chance?
But we cant talk about that.

#93 polecat on 02.02.15 at 10:48 pm

We are screwed. How many people come to this blog as a ratio to our population? I’m just a guy who went to war a couple times in the name of our country to come back and see what I do this for. Scares the poop out of me, really, we live in one of the best countries on earth. i think we messed up, fellow Canadians. I just want to vote for a true leader(Garth). I do not envy the life of office, you did your best, and still doing it. Stay well and keep doing this, you are one of my links to sanity. To everyone else, do not engage in generational wars, we are Canadians, be proud of that at least…

#94 Ollie on 02.02.15 at 10:49 pm

Wait until the first hard-headed Canadian figures out that if he lowers the asking he might get a bid before his neighbour. That’s when the real fun starts.

I need a bigger bag of popcorn.

#95 Nemesis on 02.02.15 at 10:53 pm

“It’s a stampede for the exits… There are many tonight who know what I mean.” – HonGT

#FunnyYouShouldSayThat…

#TomMixReallyWishes… #HeHadn’tBought… #TheAuldCaldwellPlace…

http://youtu.be/oda4JlSxngI

#&SonOfThePioneers… #PresentTheirYYC… #2015PropertyForecast…

http://youtu.be/UDuNgVqUgVs

#96 Ralph Cramdown on 02.02.15 at 10:54 pm

“Foreign Affairs Minister John Baird will resign […]”

There was only room for one in the closet.

#97 Mark on 02.02.15 at 10:54 pm

“Couple this with 0.25% interest rates in the summer and housing goes vertical.

Debt will surely go up.”

Not a chance. RE prices were already going down even with oil at $90. The peak was reached almost 2 years ago. And as we have seen, the banks have no interest whatsoever (no pun intended) in passing on policy rate cuts to customers.

Its all downhill from here for the housing market, but some other asset class may very well surprise us going forward.

#98 Mylar Jolerspoon on 02.02.15 at 10:57 pm

For #74 Ramifications would be that you are lowering your taxes to the point of paying less taxes in a lower bracket (which you don’t want, you want to lower taxes in the highest brackets). If you have a lot of RRSP room and make $400,000 per year, your taxable income would be lowered all in the top bracket. But if you make less then only invest into your RRSP the amount which takes you to your desired income bracket. Daryl Diamond has a book on this your retirement income blueprint. It’s one of my favorite books on Canadian Finance.

#99 Mike on 02.02.15 at 10:57 pm

But, cry the metrosexual latte-sipping hipsters from Leslieville and Kits, this ain’t Calgary. We don’t care!

That’s exactly it, isn’t it. 416 is where it’s at – and where people want to live, work and play.
Seems like everyone from latte sipping hipsters to international multimillionaire investors, have figured this out years ago – except the greater fools on this blog.

Look, it’s as simple as (yes it really is) – people want to live in TO and are willing to pay to own. How much more? Enough to squeeze out a few remaining fools (who want something for almost nothing) out of this market for good. Well I suppose, there’ll still be a few dilapidated 70’s condos at the edge of Scarborough to choose from at somewhat affordable prices. If you have been on the fence about buying (house or a newer condo), run through this list:

– 30% down ready (if not, get back to work and stop complaining, daydreaming, wishful thinking and most importantly wasting time)

-5-10 min walking distance to the subway
-5-10 min walking distance to Starbucks
-Descent neighbourhood (not necessarily down town) that doesn’t make the news for all the wrong reasons

You are golden.

#100 Smoking Man on 02.02.15 at 10:58 pm

The way I see the Brird resignation.

Either he’s to much of a NeoCon, mad that Harpo wasn’t enough of one.

Or he was a ambitious fake NeoCon, a Spartan of sorts, tired of kissing the ring of power.

Or, NSA had his calls recorded, black mailed him.

Or he’s tired of all the shit and chirps I flung His way on Twitter.

Or, he found the secret of life, only found at the bottom of an empty bottle of Jack Daniels…

#101 Not A Realtor on 02.02.15 at 10:58 pm

Vancouver January y/y stats.

Sales up.

Listings way-way down – especially SFH’s. The lowest in several years.

#102 Joe 2.0 on 02.02.15 at 11:00 pm

Immigration will fuel the housing market.
Locals will fuel the rental market.

#103 Sheane Wallace on 02.02.15 at 11:01 pm

Garth, I know what you mean and I knew it for a while.

Truly enjoyed your post today.

#104 aL pacino on 02.02.15 at 11:08 pm

#22 We’re #1 on 02.02.15 at 8:13 pm
Well Van is the SF of Canada, Toronto is #1 in the world, and Calgary has world’s #1 mayor…. so there is no problem.

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

Yup, instead the silicon valley in van city we have excessive immigration as the first industry followed by resources, a little bit of tourism,dope and marijuana.
Yup, some Sf this shit^%le is…LOL

#105 Ktown on 02.02.15 at 11:09 pm

As I wise old account once told me…never bet against the consumer.

#106 Andrew Woburn on 02.02.15 at 11:10 pm

#59 crowdedelevatorfartz on 02.02.15 at 9:34 pm
Anyone else heard about this Court case?

Canadian govt loses case on appeal re; Bank of Canada Govt Bonds?

http://market-ticker.org/akcs-www?post=229803

Mainstream media asked not to report on this story by the govt.
==============================

If this information is correct, the MSM in Canada should simply disband as unfit for purpose. The government had already lost potentially one of the most important cases in Canadian financial history. This is the appeal from that loss and yet none of us has heard a word about. The implications are staggering.

Meet your new national hero, Rocco Galati. In the US, he would have likely “disappeared” a long time ago.

“The lawyer who challenged the Harper government and won”

http://www.theglobeandmail.com/report-on-business/careers/careers-leadership/rocco-galati-is-always-fighting-for-long-shots/article20176185/?page=all

#107 Joseph on 02.02.15 at 11:10 pm

What Garth is missing here is that when the USA does well economically, Canada also does well. We are joined at the hip. Whatever temporary hit we take economically from the oil price crash will be more than made up by the ripple effect a surging US economy will have on the rest of our “free trade” bilateral relationship with the USA. A huge amount of cross-border trade is now intra-company trade with North American product mandates producing for the entire Canada-U.S. market. Western Canada will suffer somewhat. Eastern Canada will rebound.

How’s that working out so far? — Garth

#108 Rebecca on 02.02.15 at 11:12 pm

#66 Sue

This year I’m splurging for an air conditioner to avoid getting roasted by these sexy and impractical window walls. If I’m still around next year, maybe a new refrigerator.

#109 Mike on 02.02.15 at 11:13 pm

#49 Rebecca

Don’t worry Rebecca – your generation will be offloading their 700 sq foot 1+Dens at what will look and feel like at fat premium 5-10 years from now, when you are good and ready to buy. Wait until 325 sq ft no parking units become the new starter walk-in closet, uhm, home in the 416 over the next few years.

#110 EJ on 02.02.15 at 11:17 pm

#59 crowdedelevatorfartz on 02.02.15 at 9:34 pm

Indeed. Saw this one earlier today. For the past few years all the news I saw about policy change was 99% bad news. Everything taking a turn for the worse, gearing up to shovel more money into the bankers and politicos hands at the expense of the people.

This is the best news I’ve seen in a long time. Finally some common sense rulings to steer this country back in the right direction. My sincere gratitude to all involved in fighting for this cause. These folks are true patriots.

I just can’t shake this feeling that certain parties are going to try to sabotage this thing no matter what it takes. Some shady 11th hour back room deal where they re-write the rules to make their despotic visions law again.

#111 Nattie on 02.02.15 at 11:22 pm

@For Those About to Flop: it depends on a lot of factors, but the biggest one being your earned income. If you had a high income in 2014, put in the 50k and write it off. But if you only earned 50k in 2014, your marginal tax rate will be much lower so you won’t be optimising your tax return – in that case, it’s best to spread it out over a number of years.

If you use a software for filing your taxes, play around with it to see what return you’ll get back with different submission amounts. Remember you can put the 50k in your RRSP and just write it off 10k every year. (If you’re naturally spendy, this is a good way to save cash.)

#112 Rebecca on 02.02.15 at 11:22 pm

#70 HD

The additional benefit of renting is mobility, which helped me a lot in my career so far. I live in Vancouver, and a 50% correction might tempt me, but you’re correct that even at that price it’s no bargain. Plus I don’t like betting on the Vancouver economy in general. I’ll probably stay a renter forever, but I’d be lying if I said owning lacked emotional appeal.

#113 Pete Carroll on 02.02.15 at 11:23 pm

Garth, the situation in Canada’s real estate market is kinda like 2nd & goal at the 1. I have some experience with this sort of thing, and would like to share.

To everyone reading here:

Time to double down, borrow from your credit cards and parents and buy that condo, two if you can afford it. Leverage that into a detached or semi as well, especially in the Toronto area.

This is no time for a slow and steady ground game, people. Leadership means bold moves. Aim high.

(BTW, who is this Poloz fellow everybody keeps talking about here? I like his decision making!)

#114 Kothar on 02.02.15 at 11:25 pm

Mark aka pitz on the zero site…right?

#115 Marco on 02.02.15 at 11:26 pm

#108 Mike.

Patronizing fear tactics.

#116 Washed Up Lawyer on 02.02.15 at 11:27 pm

#90 Ralph Cramdown

Loved it Counsel. Well done. Saves me the time of reading the decision.

#117 Calling on MARK on 02.02.15 at 11:29 pm

The Canadian dollar will sink as low as 69 U.S. cents with little to drive the economy after oil’s collapse, according to Macquarie Group Ltd, joining a growing list of forecasters lowering their projections.

How does this compute against your bulish Loonie forecast?

#118 Enigma on 02.02.15 at 11:32 pm

Van was unaffordable in the 80s, unaffordable in the 90s, unaffordable in the aughts, and is even more unaffordable now…. so well I guess it is different there… can’t lose ….like an SF of Canada or something…
So what’s the appeal that leads to the endless rise? How exactly does one get a mortgage at 10:1 of salary?

#119 Klaus Von Debtinmeinhaus on 02.02.15 at 11:33 pm

“#86 Andrew Woburn on 02.02.15 at 10:31 pm
Why doesn’t the Eurozone work? This article finally nailed it for me. The Germans really, really don’t do debt. ”

You sure about that…according to these articles
http://qz.com/290183/in-2014-countries-are-still-paying-off-debt-from-world-war-one/
http://www.bbc.com/news/world-europe-11442892

“On Oct. 3, 2010, Germany finally paid off all its debt from World War One.”

some more on Weimar republic debt here,
http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic

#120 will on 02.02.15 at 11:36 pm

how bout this for a theory:

the BoC is not independent anymore. maybe the last time it was was under david dodge. ever wonder why the second in command after carney didn’t get the job? probably carney was independent but it wasn’t an issue because he was ready to do what harper wanted all along. anyway, poloz takes his orders via direct link hotline from harper office. that’s pretty obvious isn’t it folks?

so what’s next? how is it that harper/poloz is willing to do this – which seems crazy to all of us? they have a back up plan!

well what would that be?

they can’t bankrupt people en masse. we’d all freeze in the darkness. you can’t allow all those cash flows to freeze up and die.

there was talk here and there in the so-called financial crisis a few years ago of people in the states who were crying out please just let me refinance at a lower rate and I will continue making payments. and those people got repossessed. maybe up here, (where people freeze) will get such a deal when the shite hits the fan. what’s the chimp in Ottawa gonna do? let everybody freeze? and the bank mortgage cash flows seize up?

it’s crazy, but I think the chimps have a plan to keep the millions of cash flows flowing so as to make the world safe for conservatives. gwbush would have said “to make the world safe for democracy” – but it’s really about making the world safe for conservatives – i.e. – the one percenters.

I don’t like harper/poloz one bit. and maybe harper is stupider than I think. but I’m not sure yet. maybe he is stupider than I think.

love,
-will

#121 Hot Albertan Money on 02.02.15 at 11:37 pm

Last year there was a single month’s worth of properties to choose from. Now it’s more than five months. For condos, it’s seven months.

How is housing inventory calculated?

#122 Irish Stew on 02.02.15 at 11:43 pm

Still thinking of a cottage on Lake Erie…..all my products from work are sold in the US and it seems to be humming along.

DO I think it will gain a lot of value, but sometimes you gotta make decisions that make you happy also – as long as you can support yourself down the road and need be a dependent OAS person.

GARTH,
What is considered a good position to be in @ 40 yrs old? – TFSA, RESP and RRSP all maxed out and full – or should there be more?

#123 will on 02.02.15 at 11:44 pm

poloz is beyond contempt.

#124 For those about to flop... on 02.02.15 at 11:59 pm

# 110 [email protected] Those About to Flop: it depends on a lot of factors, but the biggest one being your earned income. If you had a high income in 2014, put in the 50k and write it off. But if you only earned 50k in 2014, your marginal tax rate will be much lower so you won’t be optimising your tax return – in that case, it’s best to spread it out over a number of years .

If you use a software for filing your taxes, play around with it to see what return you’ll get back with different submission amounts. Remember you can put the 50k in your RRSP and just write it off 10k every year. (If you’re naturally spendy, this is a good way to save cash.)
——————
So if I expect to earn about 4O k the next couple of years ,do you think I should put about 10k until I catch up?

#125 hohoho on 02.03.15 at 12:07 am

> … poloz is beyond contempt …

Give the man a break, he has but a couple of levers to manage a complex economy with millions of degrees of freedom.

The raison d’être of central banks is to prevent deflation, and that he will do.

I submit our RE problem is entirely due to CMHC policies and thus the Harper government.

#126 industrial Guy on 02.03.15 at 12:11 am

CBC is reporting that John Baird is quitting.
Another Harper rat leaving the sinking ship???????
Sheeple, eh!
Good riddance

#127 nonplused on 02.03.15 at 12:12 am

Wait, there are Greater Fool fire ants????? I better get some Raid.

411 comments yesterday when we were all supposed to be watching the SuperFake. the greatest circus on earth and people were instead getting a vile about OAS? What’s become of our values?? I watched the game and got drunk instead, I couldn’t care less about OAS except that it keeps my parents out of jail for shoplifting at the supermarket.

#128 Snowboid on 02.03.15 at 12:13 am

My, my, once again the esteemed professor has ruffled the feathers of the home sales folks.

Don’t they realize the more they post, the easier it is to see how bad things are about to get!

#129 Snowboid on 02.03.15 at 12:13 am

#41 José on 02.02.15 at 8:52 pm …

Victoria listings in Jan 2014 were 3489 and last month 3283 – hardly “way” down.

Of course sales are up, that’s true. Nine more properties sold last month than January 2014.

http://www.vreb.org/pdf/VREBNewsReleaseFull.pdf

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

#48 John Prine on 02.02.15 at 9:09 pm…

I would suggest his ‘realtor friend’ is doing better than all others in the Victoria area!

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

#57 Edith on 02.02.15 at 9:33 pm…

Dream on, do you wake and bake every morning?

#130 bill on 02.03.15 at 12:21 am

looks like he sold at a loss….
http://ottawacitizen.com/news/politics/the-gargoyle-nigel-wright-severs-property-ties-to-ottawa

#131 Ronaldo on 02.03.15 at 12:26 am

#31 Picasso –

”I never thought about getting older and medical or financial issues. Then suddenly I was older and I’m thinking… wow did that happen fast.”

Ain’t that the truth?

#132 macroman on 02.03.15 at 12:31 am

Turner Nation #14

Beats of Burden

#133 Ronaldo on 02.03.15 at 12:42 am

#56 For Those About To Flop

Read this:

http://www.shillington.ca/Financial_Planning/Index.htm

http://www.shillington.ca/Financial_Planning/Index.htm

#134 SquareNinja on 02.03.15 at 12:43 am

Garth, you say to keep it in perspective when big-city realtors say the market’s on fire. What’s your perspective, then, on small towns surrounding the GTA, like St. Catharines, London, Kingston?

Anyone else have a strong opinion on buying now in these outlying towns? They’ve seen some appreciation, definitely nothing add dramatic as the 416, but could they drop in a big way, too?

#135 Carousel on 02.03.15 at 12:44 am

We are going to wait a year before we purchase a home with acreage. Seems fitting as what will be going down, or should I say up as in interest rates. Will be low balling the price well below the Assessment, and why not as there is nothing to loose .. There will be some nervous Nelly seller who wants out of the RE. Vancouver, alas is too far gone to ever fish tail back its overvalued prices. Really people Vancouver is not that special, unless you like green slime on your house, roof and vehicle most of the Winter months, and one feels they should be a duck swimming in all this rain. There are better and drier places to live in BC. Homes in some areas are starting to be reduced, sure sign of a nervous RE market, and that is good news. Just be patient, save and invest, the rewards will be fruitful.

#136 Islandgirl on 02.03.15 at 12:46 am

@#54 Sue, I know what you mean by mold even in a place we own. We’re doing what we can to mitigate the mold but leaky windows and poor insulation and the roof don’t help and the landlord is more of a fix it himself kind of guy.
Although we look at buying, we won’t buy anything that costs us more than our current rent (because it’s not worth it). I know what we want is out there, we just have to be patient and save!

Oh and I agree with you on the appliance thing. We’re seriously contemplating getting a better washer/dryer set because the old things we have now are so inefficient!

#137 Ret on 02.03.15 at 12:46 am

John Baird is resigning. Now it is time for all of the Harper dislikers to tell us who they would put into that Foreign Affairs position from the Liberals or NDP.

I don’t vote, if I did it would be “none of the above,” but as I see it, it’s put up or shut-up time for the Harper dislikers. Now is your big chance. What say you???

#138 Victor V on 02.03.15 at 12:52 am

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/02/02/why-the-bank-of-canadas-rate-cut-may-not-do-much-to-bolster-the-economy&pubdate=2015-02-02

Nanos data suggest Canadians are lowering their expectations for a housing market that has been among the few recent bright spots in the world’s 11th largest economy. The percentage of respondents predicting real estate prices will fall over the next six months rose to 17.2%, the highest level since May 2013. The share predicting higher prices dropped to 31.2%. The 14.1 percentage point gap between optimists and pessimists is the narrowest since May 2013.

The Bloomberg Nanos Canadian Confidence Index — a composite measure based on four survey questions — fell for the second consecutive week, declining to 55.6 from 56.5. It reached a 19-month low of 55.1 in December.

#139 4 AM Sunrise on 02.03.15 at 12:56 am

Small independent furniture stores have been quietly closing around town, one by one – a sign of change already in progress.

#140 Ronaldo on 02.03.15 at 12:57 am

#85 peter on 02.02.15 at 10:27 pm

”I have told more than once and I will tell one more time….house prices in GTA will flatten. House’s price won’t increase, it won’t drop. Few people are going to suffer if they really have to do a quick sale. RE will behave different than before.”

Peter, why do you believe that RE will behave different than before? I would bed very interested to hear your views on this.

#141 No Canada, No on 02.03.15 at 12:58 am

Meanwhile, clowns in Australia cut the rate too:
http://www.bloomberg.com/news/articles/2015-02-03/rba-unexpectedly-cuts-rates-to-record-in-global-deflation-battle

From Bloomberg
Yet further rate stimulus risks inflating a house price bubble. The Corelogic-RP Data home value index, released Monday, showed Sydney home prices rose 13 percent in January from a year earlier. Home loans to investors also climbed to a record 50.4 percent of all mortgages in October.
“The bank is working with other regulators to assess and contain economic risks that may arise from the housing market,” Stevens said today.

Ahhh, such a comedy with these central bank assholes. They just can’t get it that its their policies and nothing else creating all these mess.

And forget about Toronto/Van – Australia is the place where houses truly insane. Proof? Go to realestate.com.au, pickup a city in the middle of continent (nowhere) and enjoy houses for 500k http://www.realestate.com.au/property-house-qld-charleville-118810823

#142 lala on 02.03.15 at 1:21 am

Garth you are using only 10% of your blog potential. You need to hire someone (or learn) to do the SEO for you. All you get is word of mouth leads but very little online leads. The problem is that you can reach and help 10 times more people if you use SEO correctly. Google the google and you will find the answers. SM can’t help you as this stuff is too complicated for him. Write something for SM, he deserve it.

#143 Keith on 02.03.15 at 1:30 am

Bidding wars as we speak, check out what 1.5 million gets you in East Vancouver. Check out mls online, no supply worth buying under a million.

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-detached-homes-spark-bidding-wars-1.2937732

#144 JSS on 02.03.15 at 1:36 am

I will drive a Hyundai Genesis Sedan. Fully loaded.
I really like it!

#145 Lillooet, BC on 02.03.15 at 1:40 am

As I’ve been predicting on this blog for a couple of months, oil has gone up, jumped 10% in the past few days. There may be one or two minor dips but the trend will be upwards, with several big upward jumps along the way. Will be back above $90 by year end.

Oil prices were manipulated downwards, probably at the behest of the Obama administration, his CIA geniuses, and the industrial-military complex (and their Wall Street traders) because they want to punish Russia for it’s continued incursions into Ukraine, and also punish Canada for denying climate change/global warming and trying to ram through the Keystone XL. So the US had a couple of reasons to temporarily push lower oil prices, so they call up the Saudis and other OPEC cohorts and tell them to “flood the market with oil” for a couple of months. Remember, the Saudis and most OPEC nations are ultimately controlled and protected by the US and its military. Now that the drop in oil prices has put the Canadian oil sands on the edge and put severe pressure on Putin, it’s time to let oil rise to its natural level.

#146 macroman on 02.03.15 at 1:52 am

Turner Nation, not sure how long it takes to moderate new comments so I hope this ain’t overkill;

When the Exile On Main Street happens a few house horny peeps will be looking for Emotional Rescue as they scream Gimme Shelter.

#147 Mark on 02.03.15 at 2:13 am

“The Canadian dollar will sink as low as 69 U.S. cents with little to drive the economy after oil’s collapse, according to Macquarie Group Ltd, joining a growing list of forecasters lowering their projections.
How does this compute against your bulish Loonie forecast?

If you followed my previous comments on the topic, I laid out the reasons for my beliefs. Obviously the Macquarie folks have theirs. The term, “perception is reality” may very well be apt here in the short term, but usually extremities in sentiment are very powerful precursors for spectacular reversals.

It may also be interesting to note that in the span 2006-2008, almost nobody had a bullish USD$ thesis, and we know how well that turned out in late 2008/2009. About the only guy who mostly nailed it was Mike Shedlock (Mish). Others correctly predicted the housing collapse and credit crisis, but seemed to conclude the medium term outcome of such was strong inflation (ie: Peter Schiff).

#148 Randman on 02.03.15 at 2:15 am

“Let people be, boss; don’t open their eyes. And supposing you did, what’d they see? Their misery! Leave their eyes closed, boss, and let them go on dreaming!”
― Nikos Kazantzakis, Zorba the Greek

Special quote for you and the dogs…..

#149 Don on 02.03.15 at 2:23 am

#41 José on 02.02.15 at 8:52 pm

#8 Oceanside
“job losses in Alberta are already affecting sales here on Vancouver Island, much faster than we thought….”
———————-
I’m not sure where you’re getting your info from, but in both Victoria and Nanaimo, sales are ahead of last year and listing are way down

*******************************
Nope sorry…I have three friends who are about to list in Victoria, some have multiple houses and need to sell one.

Nanaimo – LOL – land of the fly in fly out, same as Duncan, Courtney, Port Alberni, Ladysmith, Campbell River, Parksville, Qualicum, Nanoose etc etc. It’s a matter of time. It is inevitable even without the price of oil…sooner or later the piper comes a calling. Large debts and out of control spending is the real problem and is not sustainable.

My friend is (was) a realtor in Vic and just quit the business and got a job in accounting. Business was slow.

#150 Exurban on 02.03.15 at 2:32 am

I’m not one for hating on the Cowtown, but that Nenshi named Best Mayor in the World item is like an omen of doom. That’s the kind of thing that happens just before the elevator plunges straight down.

#151 The Happeningj on 02.03.15 at 2:38 am

YVR Vancouver

It’s happening. A week after the Harper/Poloz dropped rates.

Multiple bids with no conditions. People here have an insane amount of money buying without conditions. I don’t think they need CMHC.

#152 Vanecdotal on 02.03.15 at 3:04 am

#57 Edith

LOL! Christy Clark, is that you?!!

Realtroll™ much?

“…the economy (in BC) is projected to be one of the best in Canada,…’ etc, etc.

There are so many fallacies with your house humping, (and unsupported by any reliable data, links or articles) statements, oh where to start…? Pretty much the whole shebang is unadulterated broker bs.

The fact you continue to post here though does indicate you must be awfully concerned “sheeple” may actually take some of GT’s advice to heart… and that makes me all warm and fuzzy inside.

#153 Vanecdotal on 02.03.15 at 3:18 am

#60 Bill Gable

+1

“I think Poloz wins the Darwin award for the stunned move of cutting rates. Just wait until the United States raises theirs, the Chinese unleash the REM, and the Ukraine dissolves in a pile of cordite.”

Well put. Perhaps a touch dramatic, but effective nonetheless.

True, I too know a few folks living large (and leveraged) like your friend, completely oblivious to the correction that’s coming to Van. It may well end up being the last market in Canada to topple, but it will not be immune. I fear for those that truly don’t see the market forces building in the opposite (of always goes up) direction.

It’s already happening in the outer ‘burbs yet most are still clueless.

#154 Glen on 02.03.15 at 3:33 am

From bulletin posted on Stockwatch – Canadian Banks:

See In the News (C-CM) Canadian Imperial Bank of Commerce

The Globe and Mail reports in its Monday, Feb. 2, edition that Alberta’s real estate market appears to be in the early stages of a correction. The Globe’s Barrie McKenna writes that the worry is that Alberta’s problem will infect the rest of the country as the weakened economy destabilizes a real estate market that is overvalued by as much as 30 per cent. It may be hard for Canadians to imagine what a housing correction looks like, let alone a crash. The main risk in Canada is not a sudden decline in house prices. It is household finances. Falling incomes or higher interest rates would put a significant share of homeowners in distress. Lower borrowing rates in the short term may just put off the inevitable, argues Merrill Lynch economist Emanuella Enenajor. She worries the Bank of Canada will cut rates again in March, setting up the economy for “slower growth once the adrenalin shot fades.” She says the housing market is headed for a “narrow” regional shock. With incomes stagnant, it could take years for homeowners to work off their debts and for buyers to afford homes at today’s inflated prices. The Globe says the landing may be soft, but far from comfortable.
© 2015 Canjex Publishing Ltd. All rights reserved.

#155 Vanecdotal on 02.03.15 at 3:33 am

#93 polecat

That was depressing… and inspiring at the same time.

Inspiressing? The New Canadian Normal?

#156 eyes wide and frightened for the future on 02.03.15 at 3:48 am

G.. I think you give Poloz too much credit…he is neither up to date in his information or is he educated in economics to know one elbow from a knee cap.

Poloz didn’t intentionally juice real estate…it’s collateral damage to his grand plan to turn Canada back to the 1940’s…..where we export rocks and trees.

Thats why we have a dollar heading back down to fifty cents with his boot dancing on it’s neck. He thinks a low dollar will juice ‘exports’. His problem is that he really doesn’t understand that the low dollar doesn’t increase exports….in fact it decreases tham over the long term.

Canadian manufacturers can’t afford to update equipment to modern efficient competitive global standards when the equipment they must buy is in the EU or USD…..exports tumble because we are working with third world plant and equipment.

Poloz’ plan will keep Canada in the dark ages for another generation. No new skills needed for antiquated equipment…no new engineers needed to design new products…ergo….another generation of graduates headed to the US.

#157 KAC on 02.03.15 at 3:56 am

Hohoho #125 posted:
“I submit our RE problem is entirely due to CMHC policies and thus the Harper government.”

Are you talking about CMHC insurance?

“In 1996 CMHC introduced emili, an automated insurance underwriting system that moves application approval times from days to seconds – making it easier for Canadian homebuyers to obtain mortgage loan insurance.”

That was when Chretien (the Liberal) was in power. How can Harper (the Conservative) be held responsible for Chretien’s policies?

#158 Vanecdotal on 02.03.15 at 4:06 am

#101 Not A Realtor

All textbook indicators of the last gasping legs of a bubble, (regardless of asset class).

Lower listings occur as seller psychology splits 2 ways, depending on the recent action of their immediately local market:

1) “This area is HOT, price can only go up, I’m hanging on a little for an even bigger JACKPOT”. = GREED motivator

2) “This area WAS so hot for years, but lately assessments and / or sold prices are barely up/flatlining/declining. I’ll just test the market, take it off, and re-list next Spring if I don’t get my price” Rinse & Repeat. Probably into 4-5 years of No. 2 in outlying ‘burbs already. = GREED motivator now affected by DOUBT, then the first hints of FEAR.

This creates a short-term demand squeeze that forces prices up to stratospheric heights above the historic mean, a hockey stick emerges in a short period of time, then when there is suddenly (due to Govn’t rule change, immigration rule change, corruption crack down’s wherever the money is made, black swan event, job loss, net out-migration, hyperinflation due to deflating Cdn. $, etc.), no more support at that price for WHATEVER reason, those first very first sellers who NEED to sell immediately for whatever reason, will undercut their neighbour (as someone else pointed out here), to get out before there’s no more lifeboats. The new lower SOLD price is now the new comparable for every similar house in that once HOT market… and so on.

The terrible downside is so many are still willing to plunge headfirst into the burning building just as the smoke begins to turn to fire. Financial illiteracy is a very dangerous thing in this kind of lending climate.

You now have, almost overnight, a market that went from GREED as primary motivator, to FEAR. That is when the dominoes start to fall.

Nevermind all the additional economic and geopolitical unknowns in play, How many years are the chronic re-listers going to keep up the status quo before they finally realize the party’s over and capitulate? My guess is mid 2016 there will be a new normal in YVR RE and it won’t be pretty. Last one’s in are going to get spanked imho.

#159 Vanecdotal on 02.03.15 at 4:16 am

#93 polecat

…Meant to add, and Thank You for your service. We are grateful.

#160 Happy Renting on 02.03.15 at 4:26 am

#124 For those about to flop… on 02.02.15 at 11:59 pm

At $40k a year you are in the least burdensome tax bracket. If you expect that in the foreseeable future (say, next five years) your income will increase a lot (preferably up two or more brackets), you could make the RRSP contributions now but delay deducting them from your taxable income until you are in a high bracket (the contributions invested grow tax-sheltered, in the meantime.)

If you’ll be around $40k/yr for a while, investment income in a non-registered account looks pretty attractive at your marginal tax rate. Select your province then check out the second chart on that page:

http://www.taxtips.ca/marginaltaxrates.htm

Depending on your province, eligible Canadian dividends may end up reducing some of your other taxes owed, if you are in a low enough tax bracket. Explanation here:

http://www.taxtips.ca/dtc/enhanceddtc/negtaxrate.htm
If you have already maxed out your cumulative TFSA room ($36,500 as of this year), I’d look into the non-registered dividend option. More income for you and tax-efficient, to boot.

#161 Josh on 02.03.15 at 4:46 am

http://www.comicbookmovie.com/fansites/nailbiter111/news/?a=66880

Check out the story about Leah

I guarantee you once this Millenial is running Parliament this will never happen ever again.

As a healthcare professional this BS happens too often. I only wish it was secluded to the “funny books”.

Spent a decade in the military and now I’m in healthcare.

Mark my words. In the next 30 years Canada will be THE place to live.

Not sure how it’s gonna roll yet but I promise you that there will be change.

I’m 30 years old.

Explored all three ocean’s of this beautiful country. I’m an Islander currently living in Calgary and am bothered by my coworkers saying they haven’t been any further East than Winnipeg.

Blame airlines. Cheaper to fly to Mexico than it is to the maritimes.

I will make a difference in this country through leadership and understanding. While this sounds like BS please trust me, the more I learn, the more I will change. No reason for a country with the amount of resources that Canada has, has to be so expensive to live in.

In the next 30 years Canada will be THE place to be for native born and immigrant citizens. It’s not gonna be easy, but we are an awesome country and everyday I wake up to head to my job, I marvel at how lucky we all are, whether we recognize it or not.

#162 bdy sktrn on 02.03.15 at 4:50 am

#129 Snowboid on 02.03.15 at 12:13 am
#57 Edith on 02.02.15 at 9:33 pm…

Dream on, do you wake and bake every morning?
——————-
I’d say she’s bang on.
You seem off by a mile. Are you an alcoholic?

maybe you should try a toke to open your mind a bit.

#163 bdy sktrn on 02.03.15 at 5:03 am

#49 Rebecca on 02.02.15 at 9:09 pm
Would like to have a place I own some day so I can do crazy things like paint murals and install decent appliances
——————————
talk to your landlord and i’m sure you can
1. paint anything you want as long as you leave it with a fresh coat of white when you leave.
2. get new appliances too. if you want $2000 of new appliances simply offer to bump the rent by 35-40/mo. if you promise to stay 5yrs you can pick the models.

#164 gold country on 02.03.15 at 5:46 am

#122 Irish Stew on 02.02.15 at 11:43 pm
Still thinking of a cottage on Lake Erie…..all my products from work are
sold in the US and it seems to be humming along.
DO I think it will gain a lot of value, but sometimes you gotta make
decisions that make you happy also
———
We rented in lower mainland for ten years while kids were in school and banked the difference we would have spent on mortgage interest. Last year we bought an acreage–our own estate! We searched two years to get a real gem. We have a forest, our own little mountain and room to live. This will be a keeper for generations.Best decision we made. Paid cash and no mortgage. Now we are working on a second recreation getaway. The goal is to have four (one for each season).

Cities are for some, but we prefer to rent in the city and buy rural/recreational. We are also zoned business/farm/bed&breakfast which is a nice option.

Good luck, you can do it.

You can do it.

#165 DR on 02.03.15 at 6:17 am

#35 TS on 02.02.15 at 8:42 pm
I remember growing up in Toronto when Leslieville was just a sh*t hole right next to the Sewage Treatment plant that smelled really bad.

Does Dundas still stink when you get a nice north wind coming off the Lake? :)

Can’t believe this is a sought after neighbourhood…
—–

Cant believe it? Have you not being following anything going on in the city for like…ten years?

#166 Oh Canada on 02.03.15 at 7:19 am

DELETED

#167 earthboundmisfit on 02.03.15 at 8:15 am

@113 Pete Carroll
Great call on the slant pass, bud. 2nd and goal on the one, you’ve got the premier running back in the league, and you call a slant pass. You sir, are a dumbass.

#168 maxx on 02.03.15 at 8:20 am

#29 Fatima Llewellyn on 02.02.15 at 8:33 pm

“Canadian real estate agents are slime.

Honk if you agree.

FL.”

Without a shadow of a doubt. Wish I had a much louder horn.

#169 Realtor's nothing but FUD on 02.03.15 at 8:22 am

Realtors here spreading nothing but FUD. We all know the RE market is weak and crumbling under the weight of debt and weak economy. Yes the economy is so strong that once people pay their mortgage and bills they have very little to no money left for anything else. Result businesses are leaving Canada in mass. High wages needed to pay for over valued RE is another problem and cause of factories leaving. The world is now seeing Canada as a house of cards built on Lies and deception. Why anyone would believe a high school drop out realtor who have no financial understanding? To say it’s different without anything to back it up is typical of the shysters. Oh yeah rich immigrants want to move here and buy everything (FUD). Realtors have caused Major damage to the canadian economy with their FUD. They refuse to open up MLS for fear it will expose their lies.

#170 Nomad on 02.03.15 at 8:23 am

House prices are being revised down in Quebec City, my home town. In the best two areas. I check every month on DuProprio. And that city has 5.2% unemployment…

Another impact of cheap oil is foreign investors putting pressure on our bank stocks. On BNN callers are nervous about their bank stocks, which are 15-20% down from peak. No doubt some retirees sold some shares and have less income, which probably means less money to gift their kids to put a downpayment down.

But certainly, people are talking negatively about the economy. Even my hairstylist making 14$ an hour says that “people are saying we’ll go in a recession”. Negative sentiment is just as effective as higher interest rates.

#171 maxx on 02.03.15 at 8:25 am

#34 CPG on 02.02.15 at 8:41 pm

Thanks CPG. Some are certainly beginning to wake up.

#172 Victor V on 02.03.15 at 8:27 am

http://m.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/calgary-housing-market-hits-seven-year-low/article22749863/?service=mobile

Since listing her condo townhouse at about $340,000 three weeks ago, Calgary entrepreneur Susan Benoit has received only a handful of phone calls from interested buyers and just a single viewing. She purchased the unit six years ago, shortly before the market crash brought on by the financial crisis, which instantly wiped more than $100,000 off the assessed value of the home. It’s taken this long for home prices to rebound to a point where Ms. Benoit hopes to break even on selling the property, which she began renting out after she got married.

“I probably should be more worried because I have a rental property I’m trying to sell,” she said. “Right now I’m not worried. Maybe that’s naive or wishful thinking, but so many people say even though oil and gas is going down, [home] prices are still going up.”

#173 Nomad on 02.03.15 at 8:41 am

# 35 TS

Leslieville is a toilet. It smells. Locals have been uniting to put pressure on the management of the treatment plant so… there’s a problem. Same issue at Lansdowne and Wallace, except over there you have angry neighbors.

I don’t understand fellow engineers living here in Toronto. If you are THAT much into buying a house, why not use that motivation to move to a sunny US state here 700k will buy you something nice 20 minutes from an ocean view? Plus now your income would be 20% higher with the USD to CAD conversion.

What blows my mind is not just the price tag of a detached around Lansdowne, it’s the neighbors you get. Homebuyers don’t even take this in consideration. For me it’s a huge part of a home value. Take a few walks around Lansdowne subway (North, East, West of it) at different times of the day and you are bound to notice the angery atmosphere, the people with dead eyes.

And there’s the gellatin plant melting skin and producing an odor you couldn’t pay me to live next to.

#174 Smoking Man on 02.03.15 at 8:58 am

Looks like Australia just joined the currency war.. An unexpected rate cut.

Going forward, expect more.

#175 randman on 02.03.15 at 9:07 am

@113 Pete Carroll
Great call on the slant pass, bud. 2nd and goal on the one, you’ve got the premier running back in the league, and you call a slant pass. You sir, are a dumbs.”

Worse than that ….that type of pass in that area needs to be thrown at the knees ..so if the receiver doesn’t get it…no one does!

#176 TakingResponsibility on 02.03.15 at 9:07 am

#59 crowdedelevatorfartz on 02.02.15 at 9:34 pm
Anyone else heard about this Court case?
Canadian govt loses case on appeal re; Bank of Canada Govt Bonds?
http://market-ticker.org/akcs-www?post=229803
Mainstream media asked not to report on this story by the govt
**
Watching this case now. Comer vs BoC. Regardless of case outcome, Public Awareness is always good. Monetary Policy / Money creation decisions belong in the public realm and need to be democratized.
Never mind monetary policy, we must know (be aware of, at least) our Constitution!

How Did It Come To Be that we all so “devoutly believe” in what could be called the “Divine Market” – an Omniscient Omnipresent Entity that is beyond the explanation or intervention of us mere mortals – thus, we need Prophets and Predictors (Economists?) – Modern Oracles. (Oh, everyone has those grandiose dreams of Esteemed Oracle status!) The Market, it is said, has been the Market, in all its fickleness, since Time Immemorial and only the Market can Create Money. The Great Creator. Never to be questioned nor critiqued. We have become ever Faithful but Fearful Neurotic Citizen Homo-economicus’ carefully measuring out our life in dollars and cents; whilst nervously watching The Market, and zealously doing Market’s Service by acerbically Rebuking those whom have seemingly fell out of the Market’s favour or who dare to Question the Sacredness of the Market. Hence, the name-calling to said sinful “Reprobates” as Doomers, Lefties, Righties, Uppies, Downies, etc.!!
*sigh* I suppose the prevailing narrative is where so many are vulnerable to the realtor Oracle’s (maybe they are Apostles!) exhortation to “get in the Market Now.”

Personally, I love all the conflicting passionate stories of money and economy; all the conspiracies, the gold huggers, the monetary ‘realists’, all the memes – they are all great! We really are homo narrans (storytellers), just trying to make sense of seemingly fickle gods! Unfortunately…. “new” stories do seem to “Demon-ize” or find demons as much as the prevailing story we live in…

OTOH, re Comer vs BoC, I think democratized solutions come from populous awareness, discussion, and action rather than strictly legal action.
I sure do admire Lawyer R Galati’s work, though, and hopefully one outcome of this case will be more awareness and participatory discussion about the Constitution, the BoC Act, Monetary Policy, History, etc.

I consider GT’s work admirable, too, as a positive outcome is awareness and discussion and action – (individual action and zealous and/or “reproving” commenters at times, but still…all great!)

… back to the post, yes, may never-ending Plagues of Fiery Biting Ants-In-The-Pants be visited upon Poloz whose nefarious actions promote even more Sacrificing Young to Debt.

#177 Holy Crap Wheres The Tylenol on 02.03.15 at 10:08 am

This whole housing market thing is a disaster. Oh the humanity!

https://www.youtube.com/watch?v=F54rqDh2mWA

#178 bubu on 02.03.15 at 10:10 am

And oil is over $60CAD… devalue the currency a little more, oil to $60USD and everything is good when oil is over $70CAD.. including real estate in AB.

#179 honeybooboo on 02.03.15 at 10:24 am

#52 Smoking Man on 02.02.15 at 9:12 pm
#44 neta on 02.02.15 at 8:59 pm
#7 Rob
As soon as the perception if Canada being a safe harbor start to change among the investor community, both Vancouver and Toronto will see the consequences pretty fast. And it start changing already.
Please keep in mind that the internal Canadian capital market is too small to support that kind if prices and that level of demand. Ultra low long and medium term Canadian bonds that are feeding 75% of our mortgages are supported by foreign appetite for Canadian Bonds. And this appetite is beginning to subside.
……….

And that appetite will become a ravenous hunger when oil goes back up, and Bond investors will want to make the currency play.

See why I’m rich..

I see the obvious.
+++++++++++++++++++++++++++++=
Is that the reason for the inverted yield curve up to 3yr?

#180 cramar on 02.03.15 at 10:25 am

Saw one gas station at 79.9 in Windsor on Saturday. Who would have thunk it a year ago?

#181 Victor V on 02.03.15 at 10:33 am

SK in trouble too, but good thing Potash has been on fire the past months.

https://ca.finance.yahoo.com/news/wall-says-saskatchewan-faces-800-million-shortfall-due-002155778.html

#182 Daisy Mae on 02.03.15 at 10:54 am

“With oil and other commodities recently crushed, layoffs mounting, tax revenues plunging and stores closing…”

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

Bowring (Kelowna, BC), established in 1911, is closed. So there are numerous causalities we don’t hear about.

#183 Daisy Mae on 02.03.15 at 10:55 am

And John Baird is resigning end of this week? Well, well, well….second minister in a year.

#184 Daisy Mae on 02.03.15 at 10:57 am

WATCH LIVE:

http://www.cbc.ca/news/politics/john-baird-resigning-as-stephen-harper-s-foreign-affairs-minister-1.2942832?cid=

#185 Marco on 02.03.15 at 11:13 am

#101 not a realtor

Total number of Sales in West Vancouver for Detached Homes:

Month of January 2014 – 55
Month of January 2015 – 36

Total number of Sales in Vancouver Westside for Detached Homes:

Month of January 2014 – 147
Month of January 2015 – 77

#186 Grantmi on 02.03.15 at 11:13 am

#183 Daisy Mae on 02.03.15 at 10:55 am

And John Baird is resigning end of this week? Well, well, well….second minister in a year.

Don’t cry for him, Daisy! He gets 10 more years in the private sector probably racking in $250K – $500K/year or more salary..

and than rapes in $100,000 in pension from you and I at the ripe ol age of only 55.

While folks like you and I have to wait till 67 now to get our pension… and any of you young blog dogs….. well good luck! You likely won’t be getting one. You’ll be too busy working 3 jobs and till you’re 75 to pay for all us boomers living till the ripe age of 100 years old clogging the hospitals.

But thanks for your service John. Like Garth-O… there are darn few of you to step up. Personally! I couldn’t do it!

“Move on! Nothing to see here!”

#187 Grantmi on 02.03.15 at 11:18 am

#180 cramar on 02.03.15 at 10:25 am

Saw one gas station at 79.9 in Windsor on Saturday. Who would have thunk it a year ago?

Speaking of raping!!

Here on the left coast.. we’re getting raped on gas prices now! It touched 99 cents BRIEFLY for about a week,….. and now in less than a day, they are back to $1.09 and expected to go back up over $1.15.

So you Right Coast bloggers… stop your complaining!!

#188 Victor V on 02.03.15 at 11:22 am

http://finance.yahoo.com/news/north-america-divided-canadians-think-140200698.html

WATERLOO, ON, Feb. 3, 2015 /CNW/ – Over one-third of Canadians polled say it is a good time to invest in cash according to a recent Manulife Investor Sentiment Index (ISI). By contrast, investors across the border don’t agree, *six in ten say cash is a bad investment right now but feel confident about investing in stocks. The ISI is a semi-annual measure of investors’ views on a range of asset classes and savings and investment vehicles, as well as their confidence in these areas.

“It’s really interesting that over one-third of Canadians in both the affluent (34 per cent) and general population (37 per cent) segments see cash as a good investment, because consecutive ISI surveys conducted in the U.S. show cash is viewed as the worst investment – 60 per cent don’t think it’s a good time to hold on to cash,” said Megan Greene, Chief Economist, Manulife Asset Management. “Before oil prices dropped, Canadians were getting out of the market and saving cash – a non-traditional investment product. These numbers show that some Canadians don’t see cash as a high risk investment because they feel it’s more secure and readily available.”

#189 Nerf Herder on 02.03.15 at 11:26 am

The Los Angeles Times headline reads: “Oil Glut, Price Collapse Spreads Across World Economies: As producers squirm, other nations rejoice”. That headline describes the current situation perfectly, but it appeared on March 2, 1986; almost three decades ago. In a story published days later, Los Angeles Times reporter Don Cook stated “The critical issue … is the outright state of economic warfare declared by the Saudis.” Events leading up to these stories were remarkably similar to those of today.

————————————–

I’m generally a housing doomster….. but I’m also trying to learn from lessons in history. Wasn’t Expo 86 the start of the housing price boom in Vancouver?

Do low oil prices that affect Calgary, necessarily affect Vancouver?

To me it seems like we are going through a similar cycle.

#190 Daisy Mae on 02.03.15 at 11:28 am

#7 Rob: Garth said: “Yes, Calgary is not Toronto or Vancouver. But we’re seriously connected. Oil’s the biggest Canadian export, and it’s in trouble. It contributes massively to public revenues.”

#191 Snowboid on 02.03.15 at 11:38 am

#162 bdy sktrn on 02.03.15 at 4:50 am…

If you believe everything Edith wrote, then you are either another RE agent or a Christie flak.

Of course, if one has a vested interest in maintaining a facade about BCs’ economy, I can understand it.

But this blog isn’t the best place to be searching for ‘Greater Fools’!

#192 Daisy Mae on 02.03.15 at 11:46 am

#29 Fatima Llewellyn: “Canadian real estate agents are slime. Honk if you agree.”

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

I would, if I could…but the car’s in the garage. Later. Then other motorists will think I’m nuts. LOL

#193 Toronto homeowners winners us year? on 02.03.15 at 11:51 am

http://www.theglobeandmail.com/report-on-business/top-business-stories/how-the-oil-drama-will-sway-the-price-of-your-home/article22441882/ :

“The really big winners this year, the real estate giant said, will be homeowners in the Greater Toronto Area, as Ontario gains from the oil-induced depreciation of the Canadian dollar, stronger exports and higher employment.”

Another fluffer, buy-now-or-buy-never piece from Royal LePage. — Garth

#194 TurnerNation on 02.03.15 at 12:00 pm

Dawgs, on the XEG trade remember the old saw “Three days in play, take your pay.” One more to go.
Consult your Avarice Adviser.

#195 Mike S on 02.03.15 at 12:09 pm

“This was exactly what Bank of Canada boss Stephen Poloz wanted, in his little black heart. With oil and other commodities recently crushed, layoffs mounting, tax revenues plunging and stores closing, reducing the price of debt was a cheap and quick fix. People are so predictable, after all”

It is not only about the rates, but more so about cheap credit, enabled by CMHC. Frankly I prefer him lowering the rates, than the government meddling with CMHC again (like say returning the 40 yr + 0% down). At least this way the taxpayer are not on the hook …

#196 Grantmi on 02.03.15 at 12:09 pm

#194 TurnerNation on 02.03.15 at 12:00 pm

Dawgs, on the XEG trade remember the old saw “Three days in play, take your pay.” One more to go.
Consult your Avarice Adviser

agree! this is only shorts covering their arse’s. No major volume to speak of. This is not institutional buying.. this is mom and pop day traders!

http://screencast.com/t/a0DmHcABc

#197 Testing 1, 2, 3 on 02.03.15 at 12:14 pm

#178 bubu on 02.03.15 at 10:10 am

And oil is over $60CAD…

No, it is not. As of yesterday:

Western Canada Select ($C/bbl) 47.26

#198 the show must go on! on 02.03.15 at 12:16 pm

https://www.youtube.com/watch?v=xtAlzo_pqys&index=6&list=RDxnyh6i9NvmE

#199 rosie "moving forward" in the knowledge that, "this won't end well" on 02.03.15 at 12:21 pm

Is peak politician a bad sign for Calgary real estate as well?

http://news.nationalpost.com/2015/02/03/calgarys-naheed-nenshi-named-best-mayor-in-the-world-by-u-k-research-group-he-is-an-urban-visionary/

#200 Ronaldo on 02.03.15 at 12:27 pm

#145 Lillooet BC

”Now that the drop in oil prices has put the Canadian oil sands on the edge and put severe pressure on Putin, it’s time to let oil rise to its natural level.”

What do you believe that natural level to be?

#201 Mike S on 02.03.15 at 12:36 pm

“It may also be interesting to note that in the span 2006-2008, almost nobody had a bullish USD$ thesis, and we know how well that turned out in late 2008/2009. About the only guy who mostly nailed it was Mike Shedlock (Mish). Others correctly predicted the housing collapse and credit crisis, but seemed to conclude the medium term outcome of such was strong inflation (ie: Peter Schiff).”

You can’t ignore that the 2008 was a global crisis, and for the entire world the flight for safety, was buying the US government treasuries

The Canadian dollar doesn’t enjoy the status of the USD, and our housing crisis may end being a very local Canadian phenomenon. But even if you assume we will have a much bigger trouble ahead (like say China severely decelerating, driving the commodity prices much much lower) still I don’t see any argument for the CAD to appreciate

In the short term, nobody knows where the oil is going, so it is hard to predict about the CAD, but employment news in the next few months, will probably have further down pressure on it.

Does Mike Shedlock predicts appreciating CAD in the long term? If so, please share the link
(We know that Schiff does, but he either ignores, or not aware of many issues which don’t serve his beat down the USD agenda)

#202 TnT on 02.03.15 at 12:37 pm

#140 Ronaldo on 02.03.15 at 12:57 am

”I have told more than once and I will tell one more time….house prices in GTA will flatten. House’s price won’t increase, it won’t drop. Few people are going to suffer if they really have to do a quick sale. RE will behave different than before.”

Peter, why do you believe that RE will behave different than before? I would bed very interested to hear your views on this.

***********

Hey Ronaldo

30 years ago Toronto was confined to a handful of desired areas (i.e. Beaches, Leaside, High Park) surrounded by a bunch of undesired areas (i.e. Upper Beaches, Leslieville, The Junction) so when the suburbs opened up in the late 1980’s your average home buyer had to pick between undesired areas vs. new and larger neighborhoods outside of Toronto.

Real Estate is a multi-billion dollar industry with large portions of that in marketing a life style and the “herd” of Toronto are defenseless to the message. This is the start of the great flight out of Toronto’s core and they filled the GTA happily.

Now that the dust has settled and the herd has migrated north, the off-springs of the herd want back in to the city. The “new” suburbs of the 80’s are now 30 years old, they are tired, cheap particle boards with old finishing’s, no huge trees (because they can’t grow to full height in new subdivisions) PLUS the commute. To get that new fresh feeling you need to go further out and the builders have reached the outer limits for the herd to maintain migration paths in Toronto.

Builder for the last 10 years have been developing the grazing fields in Toronto’s core and marketed the new life style to the off-springs of the suburban herd.
Toronto has reversed the doughnut effect that has killed other cities in North America and the trend will be growth in the city with lots of selection.

There’s a lot of deniers here regarding the positive growth of Toronto but we keep winning top spots

http://news.nationalpost.com/2015/01/29/toronto-ranked-best-place-to-live-in-economist-ranking-of-cities-around-the-world/

Cheers!

#203 b.sktrn on 02.03.15 at 12:45 pm

bad news still good for markets ??? i thought qe was finished
—————————
New orders for U.S. factory goods fell for a fifth straight month in December, but a smaller-than-previously reported drop in business spending plans supported views of a rebound in the months ahead.

The Commerce Department said on Tuesday new orders for manufactured goods declined 3.4 percent as demand fell across a broad sector of industries.

November’s orders were revised to show a 1.7 percent drop instead of a previously reported 0.7 percent fall. Economists polled by Reuters had forecast new orders received by factories sliding 2.2 percent.

Manufacturing is slowing, constrained by weak global demand and falling crude oil prices, which have caused some companies in the energy sector to either delay or cut back on capital expenditure projects.

#204 Smoking Man on 02.03.15 at 12:46 pm

Another fluffer, buy-now-or-buy-never piece from Royal LePage. — Garth

If you where a betting Man, what do you think the herd is going to do.

Making huge money is easy, comes with risk, but you follow geopolitical adventures closely, not talking MSM for get it, your chances are better blind.

In September, Russia found an oil field in the artic the size of golf of Mexico. I told you guy oil will get crushed. So how do you make money. Forex!!!

No if you say, bought USACAD at 1.07 now say you bought 80 contracts. Right this second, hang on…….

You will be up 1,400,800.

How much real money, your own money did you need..

18k..however to place a bet like this, You need at leased 100k in account.

No if it goes to 69 or 1.31 you will be up 1.9 million ish, doing this my head.

Happy Capitalizum… :)

#205 Nemesis on 02.03.15 at 12:57 pm

#QuelleSurprises!…

[CBC] – Target Canada’s liquidation sales add to worker chaos

“I think there’s a high probability of a lot of people just walking away.” – AnonTargetManager

http://www.cbc.ca/news/business/target-canada-s-liquidation-sales-add-to-worker-chaos-1.2940749

[TheTyee] – As Postmedia Withers, Is a Newspaper-less Vancouver Imminent?

…”Postmedia revenues have plunged every year since the hedge-fund backed corporation bought the newspapers of near-bankrupt Canwest in 2010.

Revenues for the 10 newspapers were $224 million lower in 2014 than they were three years ago, a 25 per cent decline. “…

http://www.thetyee.ca/Mediacheck/2015/02/03/Vancouver-Without-Newspapers/

#OneRayOfSunshine…

[CBC] – Nelson’s downtown dog ban to be lifted, promises mayor

“I think for the first little while dog owners will be happy and we might see more dogs on Baker [Street], But for the most part people here are interested in going shopping with the their dogs.” – Mayor Kozak.

http://www.cbc.ca/news/canada/british-columbia/nelson-s-downtown-dog-ban-to-be-lifted-promises-mayor-1.2942963

#206 Karl hungus on 02.03.15 at 1:11 pm

A good lesson on risk

http://www.edmontonjournal.com/touch/business/Fort+McMurray+contractors+bearing+brunt+oilsands+cutbacks/10783457/story.html?rel=1662629

#207 Ronaldo on 02.03.15 at 1:15 pm

#145 Lillooet BC

”Now that the drop in oil prices has put the Canadian oil sands on the edge and put severe pressure on Putin, it’s time to let oil rise to its natural level.”

Also, I don’t really think that much pressure is being put on Putin when you consider that their debt of 236 billion compared to the US’s 18 trillion (76 times more) with a population just less than 50% of the US and considering that they hold 138 billion of US debt which if they dumped would pay off about 58% of their current debt.

#208 For those about to flop... on 02.03.15 at 1:20 pm

#160 Happy renting and 133 Ronaldo ,thanks for trying to help out,I read the links.
As a 40 year old is it worth starting a RRSP figuring it will be about 20 years before I start to wind it down to make it tax efficient.
Or just invest in a non registered account and pay capital gains as I go.
Any thoughts?

#209 Victor V on 02.03.15 at 1:22 pm

http://www.torontolife.com/informer/toronto-real-estate/2015/02/03/the-chase-gta-no-condos/

The buyers: Biao Liu, a postgrad marketing student at George Brown, and Sharon Liu, an instructional designer at the Metrix Group consultancy, both 26.

The story: Sharon’s father is a big believer in property ownership. “Owning a piece of land is part of Chinese culture,” Sharon says. So when she and Biao got married in July, there was no question that they’d be looking to buy. They set a budget of $400,000 and told their agent, ­Robert Atkinson of Century 21, that they’d consider anything, anywhere in the GTA, as long as it wasn’t a condo. After checking out places in Markham, Aurora and Richmond Hill, they decided there was nothing decent for $400,000 that wasn’t a condo. Since they were going to have to up the ante, they opted to limit their search to Markham, which they liked for its Chinese restaurants and grocery stores—and Sharon’s dad liked for the investment potential.

#210 pinstripe on 02.03.15 at 1:24 pm

all the talk on this blog about bubbles, jobs, oil, gold, prefs, ups, downs are overblown.

Where I live in alberta, the sun rises and sets as any other day and the same thing occurs in any other part of theworld.

some of the trades that get laid off in the winter months get the same lay off each year. that is their work routine. they still end up with a 200 grand paychewue at the end of the year.

most of the people at the coffee shop are not interested in the price of oil, and don’t care. the response is the usual – we have been there before., it goes up and it goes down.

this blog is wasting money and time attempting to educate the masses. the masses are too stupid to be educated. leave the masses along, they will self destruct on their own.

#211 Panhead on 02.03.15 at 1:27 pm

#187 Grantmi on 02.03.15 at 11:18 am

Here on the left coast.. we’re getting raped on gas prices now! It touched 99 cents BRIEFLY for about a week,….. and now in less than a day, they are back to $1.09 and expected to go back up over $1.15.

Drive down to Point Bob … .55 USD.
Don’t forget to pick up Canadian beer at almost half price too …

#212 Victor V on 02.03.15 at 1:31 pm

http://www.theglobeandmail.com/report-on-business/top-business-stories/will-the-bank-of-canada-slash-interest-rates-to-the-bone/article22757793/

In a new projection today, HSBC Bank PLC predicts the central bank to trim its benchmark rate again in the current quarter to 0.5 per cent, and then again in the second quarter of the year to just 0.25 per cent.

It was just last week that Bank of Canada Governor Stephen Poloz and his colleagues surprised the markets with a cut of one-quarter of a percentage point to 0.75 per cent, fuelling speculation that they could move again.

Indeed, Mr. Poloz, calling the cut an “insurance policy” amid the oil slump, said he was prepared to act further if need be.

David Watt, HSBC’s chief economist in Canada, said the central bank will in fact have to “remain cautious” for the rest of the year.

“The Canadian economy is going to be vulnerable through the first half of this year,” he added.

#213 NEVER GIVE UP on 02.03.15 at 1:32 pm

Shame on the Main Stream Media
Sitting in the corner sucking their thumbs, cowering in fear.

https://www.youtube.com/watch?v=40Jz0LPQAQY

Nobody cares because this is a non-event. You have been suckered (as are many others). — Garth

#214 Bottoms_Up on 02.03.15 at 1:35 pm

#20 Julie K. on 02.02.15 at 8:11 pm
———————————————
Because by keeping the information secret it:

#1) ensures you hire a realtor in order to get that information

#2) by selectively controlling which bits of information you see, you can be misled as to what the actual ‘market value’ is and therefore be willing to pay more or sell for less, thus ensuring the deal gets done and the agent gets paid.

Now, I’m not saying all agents would be selective in the data they show you, but as your original question was posed, ‘why [else] would they hoard this information?’

#215 Pre-Retiree on 02.03.15 at 1:37 pm

@#56 For those about to flop..

It depends on your situation. RRSP is not good for you if you expect to have a high income in retirement. If not, you probably need both RRSP and TFSA. Consider them both together for asset allocation because US dividends and holdings are better in the RRSP account where the 15% tax on US dividends is waived, and the Canadian holdings in the TFSA. Read books as it was suggested to you on other days…This way, you will not have to rely on others who could mislead you. It is not very difficult to understand and execute if you keep it simple.

#216 Victor V on 02.03.15 at 2:00 pm

https://ca.finance.yahoo.com/news/fort-mcmurray-contractors-bearing-brunt-oilsands-cutbacks-130340505.html

FORT MCMURRAY, Alta. – Roman Skowroniski would go back home to British Columbia if he thought the job prospects there were any brighter.

But, for the time being, the heavy equipment operator will keep trying to make a go of it in Fort Mac.

“Right now the economy’s very, very slow,” he said. “The situation has started to get from bad to worse.”

Most of the time, Skowroniski is able to land short-term jobs through his union, but he’s had little success lately.

“Our job board — it’s equal to zero right now.”

#217 Mister Obvious on 02.03.15 at 2:02 pm

210 pinstripe

“most of the people at the coffee shop are not interested in the price of oil, and don’t care. the response is the usual – we have been there before., it goes up and it goes down.”
————————————-

I don’t blame you for comforting yourselves in any way you can, but I expect it goes a bit deeper than that.

Why did the government postpone its election year budget? Why did the BoC lower interest rates? Why is there a consensus that they will do it again before long? Why have listings in the Calgary housing market jumped so high so fast?

Perhaps its different this time.

#218 Mark on 02.03.15 at 2:05 pm

“The Canadian dollar doesn’t enjoy the status of the USD, and our housing crisis may end being a very local Canadian phenomenon. But even if you assume we will have a much bigger trouble ahead (like say China severely decelerating, driving the commodity prices much much lower) still I don’t see any argument for the CAD to appreciate”

I gave the argument in my previous posts, domestic deflation, and intense domestic demand for CAD$ to repay debt (remember, taking out a loan and buying something with it is “shorting” a currency, repaying debt is the opposite!). And unlike the USA, which has oceans of USD$ sitting abroad waiting to return to the USA to draw upon US-manufactured goods and services, there is little of the sort in Canada. Canada’s dependence on external debt markets is minimal because we have had the great fortune of having run trade surpluses for most of the past 20 years. Even during the deepest darkest days of the commodities depression in the 1990s, Canada still was able to keep its trade balance from going severely negative.

Its exactly the same argument as Mish used to predict a strong USD$ in the 2008/2009 collapse. And no, I am not aware of any comments by Mish on the CAD$.

#219 Mark on 02.03.15 at 2:10 pm

“Blame airlines. Cheaper to fly to Mexico than it is to the maritimes.”

That’s because Mexico is closer to you than Halifax:

http://www.gcmap.com/mapui?P=YYC-MEX,+YYC-YHZ,+YYC-YYT,

So what’s the complaint?

#220 boonerator on 02.03.15 at 2:11 pm

#49 Rebecca

We rented last August after selling and our rental had a crappy fridge which I complained about for a few weeks.
Then, well duh, I could buy my own and take it with me or sell it if I go from here to the home. That’ll be the least of my worries when that time comes.

#221 Rational Optimist on 02.03.15 at 2:11 pm

202 TnT on 02.03.15 at 12:37 pm

“no huge trees (because they can’t grow to full height in new subdivisions)”? Do you mean very new subdivisions- 3000 square feet homes on 40’ lots, with some townhomes mixed it? I always still think of suburban builds being on more generous lots. I’m really curious about this: why can’t trees grow to their full height?

#222 Daisy Mae on 02.03.15 at 2:11 pm

Westside Weekly, Tuesday, Feb 2, 2015 — “under the current pension plan a MP who retires with 9 years of service will be entitled to receive an annual pension of $46,036….the MP would have contributed roughly $11,665 per year over the 9 years for total just under $105,000…taxpayers would have contributed roughly $68,641 over 9 years for a total paid in excess of $617,000….referred to as ‘gold plated’…introduced in the 1950s….”

What an unfair imbalance. A revised system is contemplated and the contributions will be split equally…. which will save taxpayers $2.6 million over the next 5 years. About time?

#223 Bond Junkie on 02.03.15 at 2:13 pm

Batman in full effect on mar WTI

you see it too smokie??

#224 Randis on 02.03.15 at 2:16 pm

http://www.bnn.ca/News/2015/2/2/Macquarie-sees-loonie-touching-69-cents-after-oil-drop.aspx

Macquarie just forecasted 69 cents loonie … with decreasing currency it usually means inflation. But then as Garth keep mentioning, deflation is more likely in Canada … Its just one of those crazy time that cannot be explained with conventional economic knowledge I guess …

#225 Daisy Mae on 02.03.15 at 2:21 pm

CBC News Alert

ISIS video purportedly shows Jordanian hostage burned alive

#226 CP on 02.03.15 at 2:29 pm

For your perusal Garth:

http://www.torontorealtyblog.com/archives/monday-morning-quarterback-did-urbancorp-steal-their-condos-back/12026

#227 Westcdn on 02.03.15 at 2:32 pm

I thought this article had a gem regarding the stickiness of RE prices. No one wants to sell their home at a loss. http://wolfstreet.com/2015/01/26/i-have-a-mineral-royalty-in-texas-and-this-is-what-happened/
“I lived in Oklahoma City when oil prices collapsed in 1985. We started to see a lot of foreclosed houses by 1987, and very low prices by 1987 as well. I bought some houses in 1987-1992 (the bottom of the price trough) for less than 10% of their previous mortgage balances. Part of this was due to the S&L Crisis, which happened around then. But much of it was due to the fact that a lot of jobs evaporated in 1985-1988 or so, and it took a few years for people to lose their homes.”
I think Albertans can hang tough for a couple of years if need be.
I believe the US$ WTI price of oil will be above $70 by June 2016. I know – a shot in dark but if I am right, Alberta RE prices will fall less than 10% and set up a rebound. The silver lining may be that moving on up in Calgary RE will be a little cheaper. Speaking of discounts, I am seeing Alberta based companies at fire sale levels. Too early for me to commit – I need to see WTI at 55 US$ holding or above by the end of June 2015 and more crying by OPEC members. The Saudis just raised the stakes by announcing more government spending.

#228 Mike L on 02.03.15 at 2:33 pm

#213 NEVER GIVE UP

https://www.youtube.com/watch?v=40Jz0LPQAQY

Nobody cares because this is a non-event. You have been suckered (as are many others). — Garth

I have to respectfully disagree with you Garth, it’s a big deal here in the USA as well. From what we understand it is the Canadian Gov’t has been borrowing money at interest vs getting it at 0% since 1975 and now pays $18.8 Billion in interest a year now.

Americans are PROUD of Canadians for standing up for themselves. Heck as a Canadian living in the USA, I’m proud too.

Non-issue. Going nowhere. You have been duped. — Garth

#229 ronh on 02.03.15 at 2:42 pm

#87 Andrew Woburn

Back in 2011, we are in Hungary. Changing CAD to Forint at CITI bank.
On the wall is a poster for Mastercard. Interest rate on card is 49.5% Sign me up!

#230 Mike in Toronto on 02.03.15 at 2:43 pm

#207 Ronaldo

The devaluing of the Ruble upsets the Russian oligarchs. These are people who Putin needs to retain power. National debt isn’t an issue. If Putin actually cared about the fate of the people or nation, he’d challenge the oligarchs.

It’s still a conspiracy theory, but a fun one. Personally if it is true, I don’t think oil will go up until Putin is gone, in which case, this is a temporary blip in price.

#231 Not a Realtor on 02.03.15 at 2:48 pm

#185 Marco

“Total number of Sales in West Vancouver for Detached Homes:

Month of January 2014 – 55
Month of January 2015 – 36

Total number of Sales in Vancouver Westside for Detached Homes:

Month of January 2014 – 147
Month of January 2015 – 77”
——————-
So Marco,

Where would you be gettin your numbers from. Mine came from REBGV and this site which reports early numbers.

My numbers are for all of Vancouver.

http://www.rebgv.org/news-statistics/home-buyers-remain-active-despite-reduced-selection

http://www.yattermatters.com/2015/02/sparks-fly-in-vancouver-real-estate/

#232 jess on 02.03.15 at 2:50 pm

…”if austerity was a clinical trial it would have failed long ago.”

why austerity kills?

….”a triple suicide was reported in the seaside town of Civitanova Marche, Italy. A married couple, Anna Maria Sopranzi, who was 68, and Romeo Dionisi, [who was] 62, had been struggling to live on her monthly pension of around 500 euros [around $650 a month], and had fallen behind on rent.

“Because the Italian government’s austerity budget had raised the retirement age, Mr. Dionisi, a former construction worker, became one of Italy’s esodati (exiled ones)—older workers plunged into poverty without a safety net. On April 5, he and his wife left a note on a neighbor’s car asking for forgiveness, then hanged themselves in a storage closet at home. When Ms. Sopranzi’s brother, Giuseppe [Sopranzi, who was] 73, heard the news, he drowned himself in the Adriatic.”
=====

Amaia is a former city council member in a town—the town of Barakaldo in the Basque Country. And her case is especially tragic because she actually didn’t share just how bad off the situation was even with her husband. So, most people had no idea that there was a whole—there had been a repossession and an eviction process. She was so desperate and so ashamed of the situation that she jumped out of her balcony, her fourth floor apartment, as court employees came to evict her. This comes two weeks after police found a man dead in his apartment as they went in to evict him from his home after repossession.
=============

“We’ve been studying how recessions affect people’s health over the past decade, looking at the Great Depression through the East Asian financial crisis, right through to the present Great Recession. And what we found is that recessions hurt. Unemployment, job loss, foreclosure, unpayable debt are risks to health. But what ultimately matters is how politicians respond. And when they make large cuts to social supports, social protections, they can turn recessions into severe epidemics.

How Austerity Kills
By DAVID STUCKLER and SANJAY BASU
Published: May 12, 2013
From Greece to U.S., Crippling Economic Policies Causing Global Health Crisis
http://www.democracynow.org/2013/5/21/why_austerity_kills_from_greece_to

#233 highway61 on 02.03.15 at 2:51 pm

oil heading up to 60 today

#234 saskatoon on 02.03.15 at 2:54 pm

#213 NEVER GIVE UP

thanks for this video.

garth is correct: this push will most likely be shot down by the supreme court; however, to call it a “non-event” is not only insulting to those who love liberty, but is also rather naive.

Liberty has nothing to do with it. A legal non-starter. — Garth

#235 jess on 02.03.15 at 2:59 pm

pipelines vs mobile Vermont
mobile compressed gas at 4000 psi delivered in carbon lined trailers to industrial sites without access to the Vermont Gas pipeline

…”Evslin explained that the price of pipeline oil and natural gas had always stayed in “exact lockstep” as power plants that could burn either switched between them as prices fluctuated. If oil got high, the plants switched to gas, and vice-versa. That kept the prices of the two energy sources close. The gas boom changed all of that. A company spending $2 million annually on oil could reasonably expect to cut as much as $800,000 from its energy budget.

“All of a sudden the abundance of gas way overwhelmed the market,” Evslin said. “Everybody who could switch to natural gas did, and gas was still pouring out of the Marcellus and other shale fields. Now there is nobody left to switch to natural gas because they’ve already done it, so the price keeps coming down. The lock that’s lasted 30 or 40 years gets broken.”
http://www.burlingtonfreepress.com/story/news/local/2014/09/18/ng-advantage-lowers-energy-costs-vermont-manufacturers/15794459/

#236 Not a Realtor on 02.03.15 at 3:11 pm

So I extracted the numbers from the specific areas you reported. Unfortunately, REBGV has different numbers. So again, I don’t know where you got your numbers. Here are the real numbers:

Total number of Sales in West Vancouver for Detached Homes:

Month of January 2014 – 44
Month of January 2015 – 47

Total number of Sales in Vancouver Westside for Detached Homes:

Month of January 2014 – 117
Month of January 2015 – 100

http://www.rebgv.org/sites/default/files/REBGV%20Stats%20Package%2C%20January%202015.pdf

#237 Nattie on 02.03.15 at 3:14 pm

@ #124 For those about to flop: Happy Renting & Pre-Retiree both have great advice (figuring out what to put where is a whole other story.) Personally, I didn’t contribute anything to my RRSP until I earned in the 60’s. For ultra-general advice, I would recommend no more than 5k a year if your earnings are around 40k (if you’re planning on a 0 earning year soon, ie. unpaid parental leave, maybe you can do more.) Definitely max your TFSA account first, think about dividends for unregistered, and maybe put a few bonds into your RRSP?

#238 Kilby on 02.03.15 at 3:22 pm

#29 Fatima Llewellyn on 02.02.15 at 8:33 pm
Canadian real estate agents are slime.

Honk if you agree.

FL.
What an ignorant statement, maybe you should change the realtors that cause you pain. All car salesmen are slime, all roofers are slime, all plumbers are slime, all electricians are slime, all financial advisors are slime…….We have had good and bad in all these categories . You are in control of your own financial well being, realtors just facilitate what their clients want. Knowing quite a few realtors that are not slime, I wouldn’t wish that career on anybody based on some of the stories I have heard about buyers and sellers and their expectations and actions.

#239 Oil Is Sticky on 02.03.15 at 3:31 pm

#213 NEVER GIVE UP on 02.03.15 at 1:32 pm
Shame on the Main Stream Media
Sitting in the corner sucking their thumbs, cowering in fear.

https://www.youtube.com/watch?v=40Jz0LPQAQY

Nobody cares because this is a non-event. You have been suckered (as are many others). — Garth

——

At least the Govt and Media would like you to think its a non event anyway. Too bad they are wrong.

#240 Teach and I will learn on 02.03.15 at 3:34 pm

Hey, I found this video interesting but I don’t understand why you consider it a ‘non-event’ and that it is for suckers… Garth; can you please explain your comment?(as cited below).
I dont see the world as clearly, and require some help understanding why this is BS. Thanks

https://www.youtube.com/watch?v=40Jz0LPQAQY

Nobody cares because this is a non-event. You have been suckered (as are many others). — Garth

Because it is. Minor legal issue. Going nowhere. The tinfoil people got ya. — Garth

#241 happity on 02.03.15 at 3:41 pm

George Osborne has warned that the standoff between Greece and its international creditors could derail Britain’s recovery, describing the deadlock as the biggest threat to the global economy.

Yup, tiny little Greece.

With the world in deflation and soon depression no one will be paying off their debt.

Things are gonna get real ugly soon…

More crap from you. The Greek position has moderated. It is in nobody’s interests to have a debt standoff. — Garth

#242 Daisy Mae on 02.03.15 at 3:43 pm

#157 KAC: “That was when Chretien (the Liberal) was in power. How can Harper (the Conservative) be held responsible for Chretien’s policies?”

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

No excuse. Harper has had ample time to change policies that don’t work.

#243 everythingisterrible on 02.03.15 at 3:54 pm

#238 Kilby
Charging thousands of $’s for not really doing anything besides unlocking doors and telling people to take off their shoes? Forwarding all the important paper work to lawyers? Black balling other realtors who want to offer a more reasonable fee (1% Realty). Pretty Slimey.

#244 Victor V on 02.03.15 at 3:59 pm

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/02/03/edmonton-housing-sales-down-nearly-26-in-january-from-a-year-ago&pubdate=2015-02-03

Edmonton realtors maintained Tuesday the influx of new listings the market faced last month is good news for buyers facing tight inventory levels.

But the Edmonton Real Estate Board’s monthly figures shows sales in the Alberta capital were down almost 26% in January from a year ago and 13.5% from a month ago. New listings jumped almost 30% in January from a year ago and 148.5% from a month ago.

#245 TnT on 02.03.15 at 4:12 pm

#221 Rational Optimist on 02.03.15 at 2:11 pm

why can’t trees grow to their full height?

*****

Processing a new sub-division involves removing the top soil around the whole area to level out the neighborhood. What’s left behind is the sub-soil that is extremely compact and void of nutrients. The leading roots of a tree are as fine as the hairs on your arm and they cannot penetrate the compact soil and expand as they could in normal growing soil. This will stunt the growth of any tree.

The selection of “street trees” used in these areas are a smaller species to limit future maintenance but those who want a 40’ tree in their new sub-division backyard will not be happy after 20 years.

#246 For those about to flop... on 02.03.15 at 4:14 pm

Thanks Nattie# 237
So in summary ….max out TFSA
Go easy on RRSP contributions
US dividends are not taxed in RRSP ,what about TSFA?
Buy growth products for non registered?
Anything else I’m missing.

#247 Marie on 02.03.15 at 4:17 pm

Interesting post by Paul Krugman, he is discussing the US recession; however, the charts he uses look a lot like what Canada is experiencing now…very worrisome. https://webspace.princeton.edu/users/pkrugman/ECO348.2.2.15.pdf

#248 Smoking Man on 02.03.15 at 4:20 pm

Not yet, only see one ear or one lip depending on how your holding your phone.

#249 Chew on this on 02.03.15 at 4:28 pm

Wrigley’s gum closing Toronto plant 375 jobs gone

#250 happity on 02.03.15 at 4:28 pm

More crap from you. The Greek position has moderated. It is in nobody’s interests to have a debt standoff. — Garth

The Greek state was effectively bankrupt even before the 2010 bailout, and that the massive amounts of debt piled upon it thereafter was essentially a fraudulent conveyance by the EU.

The derivatives written for that debt was backed by fictitious funds. Why do you think Bernanke had to bail out the world due to tiny Lehman, it’s called global cascading failure.

#251 For those about to flop... on 02.03.15 at 4:42 pm

Why is it being recommended to do riskier investing in TSFA and more solid investments such as bonds in RRSP ?

#252 Reddy on 02.03.15 at 4:59 pm

I think it’s important to point out all the comments , issues and worries written here are first-world problems. Consider that poor person who was burned alive … We have a lot to be thankful for.

#253 devore on 02.03.15 at 5:21 pm

#219 Mark

Mexico is also a tourist destination, and travel agencies have pre-sold or guaranteed volume arrangements with airlines and resorts that sometimes results in liquidation-level prices, because getting some money or breaking even is better than losing money.

#254 Realtor destroying the economy one lie at a time on 02.03.15 at 5:31 pm

#249 Chew on this on 02.03.15 at 4:28 pm
Wrigley’s gum closing Toronto plant 375 jobs gone.

____________________________________

Good going realtors another factory closing. It’s your lies that have caused the destruction of the GTA and Canada. Realtors are a financial threat to the stability of Canada

#255 Snowboid on 02.03.15 at 5:47 pm

#187 Grantmi on 02.03.15 at 11:18 am…

Fuel has gone up a tad in Phoenix, sitting at .535 CAD a litre at our local Costco.

Now that SB fever is over we can once again head out on some day trips, and it’s back to BBQ weather at 27C this week!

#256 jess on 02.03.15 at 5:48 pm

250 happity on 02.03.15 at 4:28 pm

Grexit’ leverage could help country stay in the eurozone with better treatment
February 2, 2015 2:00AM ET
by Dean Baker @DeanBaker13
http://america.aljazeera.com/opinions/2015/2/greece-needs-an-exit-option.html

==from wiki:
London Agreement on German External Debts

An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction.[3]

The agreement significantly contributed to the growth of the post-war German economy and reemergence of Germany as a world economic power. It allowed Germany to enter international economic institutions such as the World Bank, International Monetary Fund and World Trade Organization.

Some of the agreement included debts to be paid after the reunification of Germany. Over decades it seemed unlikely to transpire, but in 1990 another 239.4 million Deutschmark of unpaid coupons were revived. On 3 October 2010 the last payment was made of 69.9 million euro.[4] This is considered to be the last payment by Germany on all known debts resulting from both world wars.

#257 give it a rest dude on 02.03.15 at 5:50 pm

#254 Realtor destroying the economy one lie at a time on 02.03.15 at 5:31 pm
Good going realtors another factory closing. It’s your lies that have caused the destruction of the GTA and Canada. Realtors are a financial threat to the stability of Canada
—————————-
you forgot the ‘uneducated , drop out’ part.

you are damn persistent, i’ll give you that. put that skill to a better purpose.

#258 Mike S on 02.03.15 at 5:56 pm

“I gave the argument in my previous posts, domestic deflation, and intense domestic demand for CAD$ to repay debt (remember, taking out a loan and buying something with it is “shorting” a currency, repaying debt is the opposite!)”

You yourself said that most of the government is on the hook for most of the subprime debt (via CMHC). It is not hard to see the government debt expanding to more than offset any consumer de-leveraging, especially, if you consider provincial debt (Ontario for instance didn’t have any meaningful surplus in the last 30 years)

Anyway I don’t know what is going to happen with the CAD long term, but I sure see it trading in tandem with oil prices, and goes lower anytime there are bad employment/economical news for Canada

#259 Fergus on 02.03.15 at 5:58 pm

http://www.usatoday.com/story/money/2015/02/03/opec-sees-oil-prices-exploding-to-200-a-barrel/22800331/

#260 jess on 02.03.15 at 5:58 pm

“The Iraq and Afghanistan conflicts, taken together, will be the most expensive wars in US history—totaling somewhere between $4 trillion and $6 trillion.

http://www.globalresearch.ca/us-wars-in-afghanistan-iraq-to-cost-6-trillion/5350789

=

In 2014, countries are still paying off debt from World War One

http://qz.com/290183/in-2014-countries-are-still-paying-off-debt-from-world-war-one/

#261 Mark on 02.03.15 at 6:05 pm

“Mexico is also a tourist destination, and travel agencies have pre-sold or guaranteed volume arrangements with airlines and resorts that sometimes results in liquidation-level prices, because getting some money or breaking even is better than losing money.”

Indeed. I actually booked a trip this summer, from Prince Rupert to St. Johns, NL. And threw the distances into that calculator. Surprising myself to find out that it actually was a shorter flight to England from where I live, than it was merely to traverse our vast and great country.

The point is, airlines are not particularly expensive in Canada once you control for the factors you state, and add in the airport fees and taxes. Fees and taxes which contribute to sustainable infrastructure. Not the debt-laden, infrastructure worn out airports that we see in so many other places in the world.

#262 bdy sktrn on 02.03.15 at 6:09 pm

Come on dogs, we need more macro petro market discussion here. With a swelling of reserves to be reported tomorrow is it straight back down?
At the rate crude is rising AB will need everyone back by the end of next week.

A single bat ‘ear’ is not much to go on!

Oil must stay down much longer to inflict any real harm on producers.

the current price, 64CAD, will keep suncor very busy.

#263 Mark on 02.03.15 at 6:09 pm

“You yourself said that most of the government is on the hook for most of the subprime debt (via CMHC). It is not hard to see the government debt expanding to more than offset any consumer de-leveraging, especially, if you consider provincial debt (Ontario for instance didn’t have any meaningful surplus in the last 30 years)”

In that case, its a matter of the debt moving from one balance sheet (that of the banks), to another balance sheet (the GoC). CMHC insurance claims are neutral from that perspective.

As for surpluses or deficits, I was referring to trade surpluses/deficits. Of course, government finances aren’t great, but are nowhere near as bad as in the United States (they have nothing like a fully funded CPP there, in contrast to their “Social Security”). And most CAD$ debt is held by Canadians, so again, its just a matter of shifting the numbers around internally.

However, the “take-away” point is that as RE continues to deflate, and people scramble to pay back debt, consumer consumption is going to be severely truncated. And that is profoundly supportive of the currency. Who knows, there could be other external factors, such as the USD$ peaking/dropping, that give the CAD$ a nice tailwind as well. The point was made earlier that CAD$ isn’t a ‘reserve’ currency, and that’s precisely one of the reasons why it has room to move higher when global currency reserves are inevitably rebalanced.

#264 Nattie on 02.03.15 at 6:16 pm

@For Those About to Flop – sounds like a good plan (ideally, Canadian dividends in non-registered and high growth, no/little dividend in TFSA. I’m not going to comment on what to do with US funds because I’m a dual citizen/double filer and have different rules to follow.)

It is generally recommended that riskier (ie. potentially higher-growth) assets go into TFSA’s because you get to keep your gains tax-free. Since you will at one point in time be paying tax on your RRSP, you don’t want to risk those gains being taxed at a higher marginal income than they were when you earned the investment dollars. (RRSP’s, when cashed out, are taxed like income, not like investments.) Interest earned on bonds and GIC’s are also taxed like income, not investments, so putting them in the RRSP makes more sense.

And remember to always re-invest your tax return! :)

Here’s a link that should help: http://canadiancouchpotato.com/2010/03/05/put-your-assets-in-their-place/

#265 Mike S on 02.03.15 at 6:20 pm

Mark,
One more thing. As more and more factories close here in Canada, we import more and export less. This is by itself not supportive for CAD. Take this quote from the Globe (“Canada’s fruit, vegetable prices to rise sharply in 2015: report”):

“The university notes cereal imports rose by more 8 per cent in 2014, a year in which Kellog Co. shut its factory in London, Ont.”

If as you say the CAD is going to quickly appreciate (1.5 USD per CAD?), most of our exporters will be shut down, which means even less exports, more imports (The necessities) and it makes high CAD environment unsustainable

#266 Paul on 02.03.15 at 6:21 pm

#254 Realtor destroying the economy one lie at a time on 02.03.15 at 5:31 pm

#249 Chew on this on 02.03.15 at 4:28 pm
Wrigley’s gum closing Toronto plant 375 jobs gone.

____________________________________

Good going realtors another factory closing. It’s your lies that have caused the destruction of the GTA and Canada. Realtors are a financial threat to the stability of Canada
———————————————————-
Some of my friends are agents and they all chew gum.
It’s not there fault

#267 TurnerNation on 02.03.15 at 6:24 pm

For late-day traders I see a nice inverted batman on natural gas. Was good enough for me.

#268 Oot der Hoos on 02.03.15 at 7:01 pm

Bill Still is wrong to say Bank of Canada buying gov’t debt at 0% is “debt free money” because the Bank of Canada creates an asset and a liability when that cash is made available to the gov’t.

Thus it is the same as USA doing QE, quantitative easing, at 0%. I think Bill Still did not study accounting nor banking.

I also think yields offered on GICs and bank bonds, and preferred offerings would be lowered by banks to compensate for their lower profit opportunity leveraging gov’t bonds.

Somehow the investor/taxpayer/saver will lose if the gov’t pays 0% on debt.

A better idea is to stop gov’t deficits and borrowing and stop paying taxpayers to not save; eg. GIS OAS CPP the new Ontario-PP.

#269 KAC on 02.03.15 at 8:44 pm

Daisy Mae #242

#157 KAC: “That was when Chretien (the Liberal) was in power. How can Harper (the Conservative) be held responsible for Chretien’s policies?”

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

No excuse. Harper has had ample time to change policies that don’t work.

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

Ah, okay, now I get it.

If an arsonist (Chretien) sets your house on fire and the fireman (Harper) fails to put it out, it’s all the fireman’s fault. Well I’m glad you explained that to me. Thanks.

#270 Andrew Woburn on 02.03.15 at 9:42 pm

I went off half-cocked yesterday after viewing the Bank of Canada court case video. A bottle of good red will do that to you as SM can attest.

Today I went belatedly looking for the evidence. I found the COMER site at http://www.comer.org/content/COMER_FederalCourtDecisionApr2014.pdf

I conclude that Ralph Cramdown is right. If you can understand WTF they are talking about, your legal skills far exceed mine.

I assume the litigants keep company with those who assert the Income Tax Act is invalid and the others who have absolute proof that the Rothschilds secretly own the Fed.

#271 SpongeBob on 02.04.15 at 1:14 pm

As the Canadian economy contracts, it takes the Canadian dollar down with it.

See what happened to the US dollar during their housing crash? Well that’s exactly what is happening here. The Canadian dollar hits 70 cents US dollars easily.

#272 Matt on 02.04.15 at 2:19 pm

Hi Garth,

Noticed that the Jan price in GTA and 416 was up across the board. Detached house price in 416 up 7% yoy. Guess the mid jan numbers improved.

http://www.torontorealestateboard.com/market_news/market_watch/2015/mw1501.pdf

The average detached 416 house costs less than it did last April. I have a bridge to nowhere to sell you. — Garth