Don’t be so sure

SHOCK modified

Four years ago Japan was on the comeback trail. The economy was ticking higher, houses were gaining value, consumer confidence was growing and investors were making money on the stock market. Then, tsunami. Almost like flicking a light switch, the entire economy – the third largest in the world – went cold. Stocks, houses and GDP all cratered. So far, no real recovery.

Of course, the wall of water did not hit Tokyo, or even any major urban centre. But, no matter. A shock is a shock. It exacts one hell of a toll on an entire nation.

A killer tsunami, especially one taking out a nuke plant, is hardly akin to the price of oil being crushed. But, like I said, a shock is a shock. There are always consequences, usually more far-reaching than initially realized.

A year ago Alberta was firing on all cylinders, trucks nutz joyfully swinging in the breeze, powering ahead the Canadian economy. House prices in Calgary were just coming off double-digit annual gains. Unemployment was the lowest in the land and incomes the highest. The province was sending billions east in transfer payments. Oil was on its way to $90 a can. A developer announced Canada’s first luxury auto mall at Meadows Mile, featuring Ferrari, Maserati, Lamborghini, Lotus, Porsche and Rolls-Royce. All was cool.

Well, a different narrative’s quickly emerging for Canada’s energy province – and the entire national economy. Nobody should be ignoring this. Even if oil stays in the $50 range (where it sits after another rally), the country will get tens of thousands newly-unemployed people, and lose untold billions in new investment. Expect ripples from Vancouver Island, where lots of oil patch workers live, to Ontario, where plants fabricate oil-related equipment, to Newfoundland, where oil royalties make up a huge chunk of the budget.

The price of our major export has been halved, and volumes could also be sliced. The big, shiny hope of the Bank of Canada – that external demand for the stuff we sell would offset tapped-out consumer spending – is now off the table. So, in desperation, it cut rates to deceive more virgins into buying houses and crash our dollar, making exports competitive.

Now Citibank says oil could be on its way to $20, albeit briefly. Global production of the stuff has not been curtailed. The US is pumping madly, as are Brazil and Russia. The OPECers are cutting prices in Asia and supply tanks are brimming. There’s more crude in storage in the US than at any point in the last eighty years. So Citibank expert Edward Morse says twenty bucks is entirely possible, before a recovery back to about where we are now at the end of the year.

In Alberta, this is an economic tsunami. Evaporating are any illusions the 60% decline in oil would be reversed in a few months and we’d be back in the nines. Ain’t gonna happen.

Here’s what this means.

CIBC now says unemployment in Alberta will probably rise by 50% this year. The provincial economy may slide into recession, after vastly outstripping the national one. At best it will be flat and equal the performance of Newfoundland and Labrador.

The Conference Board says $40 billion in planned spending won’t happen now in the energy sector. Net migration into the province – which has been huge – could go to zero. “The consequences,” says the Board, “will be swift and severe”

Sadly, Albertans swallowed the Kool-Aid, never expected a shock, and have borrowed more money than anyone else. Says CIBC economist Benny Tal: “This means that the damage due to the weakening economy will be felt disproportionately by debt holders.” RBC economists say they are forecasting a big drop in residential construction in Alberta and a plunge in retail sales. As far as housing goes, the bank says the real pain will come next year with “more significant price declines.”

So this is why families are bailing.

A year ago there were just over 2,000 houses for sale in Calgary. Today there are 5,100 on the market with new listings materializing during the business day at the rate of 13 an hour. Sales are down 36% so far in February, compared to last year. In January they plunged 39% from the same month in 2014.

In the first week of February, according to Calgary realtor and stats nerd Mike Fotiou, 274 houses changed hands, down 35% from the 10-year average and 26% below the five-year average. New listings are the highest since the financial crisis of 2009, but sales are actually less. Detached home deals, by the way, are running below 2009 levels. Last year during this week 23 million-dollar-plus houses sold. This year the number was six.

All of this has happened with relative lightning speed. Those who think housing markets take endless months, or even years, to turn are wrong. Once confidence leaves town and fear moves in, it’s over. There is no power great enough to displace panic – something Washington found out as it wasted trillions trying to end the real estate crash to the south.

So far, people in YVR and the GTA view it all with a dash of bemused superiority.

Big mistake.

242 comments ↓

#1 alison on 02.09.15 at 6:09 pm

Excellent article. Well said.

#2 Matt Gamon on 02.09.15 at 6:11 pm

$20 oil prediction from CITI is unrealistic. With rig count falling dramatically chances are oil will rebound sooner rather than later. The downturn may last few months, but once there is a light at the end of the tunnel panic will subside and we’ll start preparing for another cycle.
I don’t see real estate in Canada crashing as long as China continues its stimulus policies.

#3 Mad Vlad on 02.09.15 at 6:11 pm

Alaska here we come…. !

http://calgaryherald.com/business/energy/alberta-looks-to-alaska-for-new-pipeline-as-keystone-xl-delays-continue

#4 mark on 02.09.15 at 6:14 pm

Interesting when you compare Japan to NZ after their consistent earthquakes. Both are a Krugman wet dream – disaster to kickstart stimulus in rebuilding, but Japan goes to hell and NZ powers up fixing things in Christchurch. Although NZ did have a trade agreement with China which pumped up its farming industry.

#5 An ill wind is blowing on 02.09.15 at 6:15 pm

Well they got the Chinook winds thing totally ass over teakettle.. but well there ya go….

http://business.financialpost.com/2015/02/09/to-be-honest-im-frightened-once-booming-oil-town-fights-to-keep-spirit-alive-after-crude-prices-dive/?__lsa=bb91-32b7

#6 Derek R on 02.09.15 at 6:16 pm

What a difference a year makes!

#7 mark on 02.09.15 at 6:18 pm

Oh and oil’s defintely going to $20

http://www.bloomberg.com/news/articles/2015-02-06/these-experts-know-exactly-where-oil-prices-are-headed

#8 frythedevil on 02.09.15 at 6:19 pm

yvr and toronto will feel the pain. No one is immune

#9 YVR_engineer on 02.09.15 at 6:19 pm

First

#10 Jimmy on 02.09.15 at 6:21 pm

First!!

Great pic. Back to Best of Garth.

#11 Malik on 02.09.15 at 6:22 pm

It does not matter what happens here in canada, only way prices going down is when interest rates go up.

#12 cubbs on 02.09.15 at 6:22 pm

Well put Garth. Thanks again for the insight.

#13 Early Bird on 02.09.15 at 6:22 pm

Early post tonight!

#14 Mean Gene on 02.09.15 at 6:23 pm

All eyes are on Calgary but this time with the perverbial pants around the ankles.

#15 Terrier on 02.09.15 at 6:25 pm

Just imagine what will happen to construction workforce when the GTA market start heading south …

#16 Offshore on 02.09.15 at 6:27 pm

Where was Morse this past spring or summer? His forecast originally was for $110 WTI and he has been revising it on the way down, always lagging the commodity. Strategists tend to overshoot in either direction (recall Goldman’s $200/bbl prediction in the summer of 2008).

#17 TurnerNation on 02.09.15 at 6:28 pm

Kicking things off.

Shurley not.

#18 calgaryPhantom on 02.09.15 at 6:29 pm

I was here in Calgary in 2006, also in 2008. For some reason, this time around, i don’t feel that level of panic in the air. Of most people i have talked to, the hope/belief is that oil prices are down temporarily and everything will be OK in few months.

#19 that guy again on 02.09.15 at 6:29 pm

frist psot!

#20 Andy on 02.09.15 at 6:35 pm

Companies are laying people off in GTA too. It is not going to be easy. I think the 1000 bucks rent I am paying is going to be a good decision.

#21 Mark on 02.09.15 at 6:35 pm

Next BoC meeting, a 25bp or 50bp cut? That is the question. I personally fall into the -25bp camp, but the BoC is likely seriously under-estimating the severity of the deflation that Canada is about to experience.

#22 ef on 02.09.15 at 6:36 pm

4 houses I was watching in Toronto all went for ask or over. Banbury, Sandfield, Hillhurst, and one in Hogg’s Hollow. All 3 are in the $3 – 4 million range.

There’s a frenzy in the high end market right now. I don’t know where all this money is coming from, but there’s a gusher of it.

#23 gladiator on 02.09.15 at 6:42 pm

Maybe it’s GDP, not GPD?

#24 Mike S on 02.09.15 at 6:42 pm

“#246 Mike. Why do you think what he wrote is so false? It’s actually true. Government printing of money lifts all prices over time. It does not mean that prices will not correct but over time prices will go up. At one time people thought a $300,000 home was crazy. Then 400k and then 500k.”

It is true that given inflation, all prices must go up (if inflation is 2% per year, everything is 20% more expensive after 10 years)

Now,
Housing prices over the long term can not outperform wages.

Let’s go with a simple example, a 1M$ detached in Toronto (that magically grew like 7% per year in the recent years, while wages stood still)

Right now this house needs a buyer with 200K$ cash and 3600$ per month, each month for the next 25 years. This is with a (very crazy) assumption, that the interest rates will never move up during that time

Let’s assume this type of house is going to grow 7% for the next 10 years. Then it will require 400K$ down and 7300$ monthly to finance that 2M$ house.

Do you really think this is a possible scenario, without similar wage increases???

So shall we assume wages will start growing like 7% per year?? Even if such trend starts to (remotely) materialize the central banks/bond markets will start the INFLATION cry, and will be quick to raise rates. When rates rise, that monthly payment will be up, and house prices will have to significantly decline to find buyers

However you look at that, there is simply no case for house price increases in Canada. This bubble has peaked, the feds may be able to keep it for a while longer (till the elections) but that will make the bubble burst so much bigger …

#25 ronh on 02.09.15 at 6:45 pm

tapped-out consumer spending – all you need to know.

#26 Ollie on 02.09.15 at 6:45 pm

No matter what is being said, Canada has always been a one trick pony… minerals. The housing market is a derivative. As all derivatives it involves leverage. And I’m not talking about the financial leverage of mortgages. That adds up too… I am talking about the subtle but large as in added risk leverage of basing such an oversized sector like housing in Canada on the well being of a single economic engine. Commodities. Canada’s economy was always among the most fragile in the world from this point of view. By far not Taleb’s antifragile.

#27 mdm on 02.09.15 at 6:47 pm

As a property manager in Calgary, the leasing agents may give us 1 rental application a week. Last fall, it was at least 3…lots of places are lowering their asking rents while the homes sit vacant…more owners telling me they want to sell. Maybe the music isn’t on loud enough for deniers to hear?

#28 frank le skank on 02.09.15 at 6:48 pm

its different in Toronto, the universe revolves around us creating a huge energy field causing a sense of well being and a rock solid housing market….. don’t bother trying to comprehend this, its above your mental capabilities!!

#29 Keith in Calgary on 02.09.15 at 6:50 pm

All this talk about BOC rate cuts……..

***NIRP***

It’ll be coming to Canada in due course…………..it’s already in a few places over in Europe………..and we’re much worse off than most of them are.

The question is simply put……..when ?? You could argue that we are already there when bank fees and what little inflation truly remains is taken into account.

#30 Sue on 02.09.15 at 6:52 pm

Don’t be sure about the confidence fairy, or the couple living at Heathrow:
http://www.newstatesman.com/martin-robbins/2015/02/story-middle-class-heathrow-homeless-couple-too-good-be-true

#31 Victor V on 02.09.15 at 6:53 pm

http://m.theglobeandmail.com/report-on-business/economy/housing/royal-bank-says-alberta-2015-home-resales-to-drop-16-per-cent/article22874723/?service=mobile

Sales of existing homes will slide 16 per cent in Alberta this year as a plunge in oil drags down the provincial economy, according to Royal Bank of Canada.

The number of homes changing hands will drop to 60,500 from 71,800 in 2014, according to a forecast Monday from the Toronto-based lender. The bank predicted in a Jan. 15 note that Alberta home sales would fall 6.5 per cent. The decline would be the biggest since a 21-per-cent drop in 2008.

“We’re in for some kind of a correction in the province,” Robert Hogue, senior economist at RBC said by telephone from Toronto. “Whether this will translate on the pricing side remains to be seen. We’ve seen in the numbers in the past few months a change in psychology in the province.”

#32 Nerf Herder on 02.09.15 at 6:54 pm

I remember reading this pie in the sky article:
http://www.calgaryherald.com/technology/Calgary+area+projected+million+2041+Graphic/10015881/story.html

Everybody was gushing that “at the current pace” Calgary was going to be over 2.1 million people.

The last lines are very apt:

If the surging economy faltered, however, there could be a major population impact, Odynak said.

“Simply a downturn in the economy and the oilpatch, it could be a horror show. I don’t think the lower population projection scenario even covers that.”

#33 JG on 02.09.15 at 7:00 pm

#18 calgaryPhantom on 02.09.15 at 6:29 pm
I was here in Calgary in 2006, also in 2008. For some reason, this time around, i don’t feel that level of panic in the air. Of most people i have talked to, the hope/belief is that oil prices are down temporarily and everything will be OK in few months.

agreed. far less panic. the belief is this is more like a pause, not a collapse.

#34 Musty Basement Dweller on 02.09.15 at 7:02 pm

omg our esteemed Joe Oliver was just on the nightly news, lecturing Greece for the “unsustainable” practice of spending more than you earn. All while ensuring at home he ups the ante by further seducing his massively indebted Canadian population into more debt via lower interest rates. Brilliant and inspiring performer, that one.

#35 young & foolish on 02.09.15 at 7:03 pm

“Once confidence leaves town and fear moves in, it’s over”

Truer words have never been spoken …. ha!

#36 crash callaway on 02.09.15 at 7:03 pm

Very insightful picture choice Garth,

All the rat kool aid pimping vermin are being exposed.
There’s no more cheese, cupboards are getting bare.
Proof that Alberta never was rat free!

The Piper cometh

#37 Calgary Guy on 02.09.15 at 7:03 pm

There is a house down the street that went up for sale a couple of weeks ago here in Cowtown and now it has a sold sign. Another greater fool drank the Kool-Aid. Maybe the seller priced it right.

#38 MSM-free Zone on 02.09.15 at 7:04 pm

“….CIBC now says unemployment in Alberta will probably rise by 50% this year. The provincial economy may slide into recession, after vastly outstripping the national one. …….”
_____________________________________

Always entertaining to listen to these smug, resource-rich, right-wing monopoly provincial governments suddenly eat crow when they lose the ability to mask their own financial incompetence without resource royalties. Not surprisingly, it turns out they have absolutely nothing to teach other provinces after all.

#39 Happy Renting on 02.09.15 at 7:04 pm

#28 frank le skank on 02.09.15 at 6:48 pm
its different in Toronto, the universe revolves around us creating a huge energy field causing a sense of well being and a rock solid housing market….. don’t bother trying to comprehend this, its above your mental capabilities!!

LOL. I’m fearful of how this will hit Toronto. Populous, unaware (because we are “special”), and with a consumeristic bent. Just by sheer number of people here there will be plenty caught swimming naked when the tide goes out. Garth, today’s post is a worthy kickoff if you want to start Misery Week 2015 (Q1).

#40 young & foolish on 02.09.15 at 7:12 pm

“Housing prices over the long term can not outperform wages”

True … the key words here being “long term”. It’s all about leverage and how without it RE would tank, permanently.

#41 Spot on 02.09.15 at 7:15 pm

#24 Mike S on 02.09.15 at 6:42 pm
Now,
Housing prices over the long term can not outperform wages.
++++++++++++++++++++++++++++++++++
New Rule. If your wages are not rising lockstep with prices the you must move to Brampton or live in basement.

Dog has spoken

#42 Getting old on 02.09.15 at 7:16 pm

Those who think housing markets take endless months, or even years, to turn are wrong. Once confidence leaves town and fear moves in, it’s over. There is no power great enough to displace panic

Well stated Garth.

Lived through it a few times, not pleasant but much learned. There is an entire generation that will have to be taught the same lesson. They have never seen the other side and just maybe some of their parents will be taught the same lesson again.

#43 Ben Furlaich on 02.09.15 at 7:17 pm

The thing about oil is that if it gets to $20, will everyone suddenly be long and it will get back to $40 in a heartbeat. Instant doubles for the liquid investors who back up the truck at $20. A good reason to be adding to cash right now, a once in a decade opportunity.

#44 Smoking Man on 02.09.15 at 7:24 pm

I can’t comment on Vancouver. But Toronto, hell ya. Good luck with a softy re market here. The Herd here is truly different. No cowboys, except maybe in Long Branch. Hell that even sounds Western.

The men here talk in high octaves, it’s woman only horny for Granite.

Non have heard of Zero guy, or greater Fool.

The men in this town will capitulate, will buy that house for there bi annual roll in the hay…

These hipsters are wierd… They are schooled, thus are smart.

Not to mention, 2000 desperados hit the GTA every week.. It’s cold out side..

Need to hang a cowboy hat some where.

#45 juno on 02.09.15 at 7:24 pm

#24 mike

Played squash with a reality. She says the market in Vancouver is HOT HOT HOT. She thinks that the lost of jobs in Alberta only means higher demand in Vancouver/ Burnaby region. Because they all need a place to live and Vancouver is the IN thing.

To me, I don’t see it, all I can see a lost in jobs in alberta, mean living on wealth fare. As for increase in wages, more supply for a static number of jobs means someone with more experience will be will to work for next to nothing for your current job.

This happened in the IT industry. Some of our teams has 70% of the people working off shore somewhere in Russia or India.

Forget about higher wages, Canadians are already overpaid. Once a company figures out how to move your job offshore, they will

#46 Lillooet, BC on 02.09.15 at 7:24 pm

“Now Citibank says oil could be on its way to $20, albeit briefly. Global production of the stuff has not been curtailed.”

It simply amazes me at the utter stupidity of the so-called experts, the latest from Citibank who are forecasting $20 oil. Not gonna happen. Did they forecast $20 oil last year? No. Did they forecast $20 oil 6 months ago? No. Because the supply/demand curve doesn’t support it. Half the world’s daily oil costs $45 or more to produce, so anything below that shuts down production, as we have dramatically seen in the past two months. OPEC just stated today that consumption is increasing and demand is higher than they expected. And oil has already risen above $53 and shows stability with moderate increases.

I challenge the jokers at Citibank that oil will be above $90 by year end and will never see $20 again. Ever.

#47 young & foolish on 02.09.15 at 7:27 pm

“tapped-out consumer spending – all you need to know”

Of course this, and job losses will put a final nail in it. The world is awash in debt and now slowing demand.
Nobody wants to pay you for your “savings” any more since everybody’s printing. So, what will retain it’s value in such circumstances?

#48 ALBERTASTROPHE on 02.09.15 at 7:29 pm

Nerf Herder objected to me pointing out how awful a 50% increase in unemployment is.

I beg to differ. It is awful to contemplate.

This will be huge.

Add to it, Prentice is about to declare war on the public sector in Alberta.

Discord, plummeting oil prices, crashing real estate prices (worsening, much, into 2016) plus labour discord and strikes and people fleeing the province.

U G L Y

#49 TS on 02.09.15 at 7:33 pm

As long as money keeps flowing to Ottawa, AKA the land of Government Workers and Defined Benefit Pensions, I’m okay with Alberta Suffering :)

#50 young & foolish on 02.09.15 at 7:35 pm

“I think the 1000 bucks rent I am paying is going to be a good decision.”

You bet!

#51 A Yank in BC on 02.09.15 at 7:35 pm

#18 calgaryPhantom

Such is human nature. After the shock comes denial, followed by anger, then grief, and finally acceptance. Most of Calgary is likely just now entering the denial stage.

#52 Smoking Man on 02.09.15 at 7:36 pm

Unbelievable, was out having a smoke, nursing home calls, I crap my paints every time the caller ID it’s my screen.

I think, it’s dad, he’s dead.. After all he’s 97.

Mr Smoking Man, we had another incident.. The F-en Serbs.. Pops popped another resident that took his cake in the lunch room.

My biggest fear they send him to the loony side. Then I’ll be getting these calls everyday..

So I split the tax farm and did some sweet talking..

Just so you know what we are dealing with.

I sent him to my cottage to take deliver of some shingles he was about 82.

Delivery was on Wend, me and some pals planed to go up on Saturday to do the job.

We get there, it was done.. Without a ladder. Pops used the antenna steps.

Man is a beasted… I’ll post a pic of him on my blog.. It’s him at 97..

#53 Mark on 02.09.15 at 7:39 pm

“So shall we assume wages will start growing like 7% per year?? Even if such trend starts to (remotely) materialize the central banks/bond markets will start the INFLATION cry, and will be quick to raise rates. When rates rise, that monthly payment will be up, and house prices will have to significantly decline to find buyers”

High inflation will absolutely kill house prices as lenders will generally refuse to lend without a very substantial risk premium. I think a lot of people are absolutely mistaken when they think of real estate as a sort of ‘inflation’ hedge. And you’re right about what the bond market will do as well.

“The question is simply put……..when ?? You could argue that we are already there when bank fees and what little inflation truly remains is taken into account.”

NIRP isn’t likely to help home-borrowers as credit-worthiness will be the very serious issue du jour. But being able to borrow at 0% (including spread) to speculate on stocks could be very powerful.

#54 Brian Ripley on 02.09.15 at 7:43 pm

re: “RBC economists say they are forecasting a big drop in residential construction in Alberta”

I just updated my Canadian Housing Starts Charts with the January Data:

http://www.chpc.biz/housing-starts.html

On the long term chart (data since 1955) the trend (down) is easier to see. Housing starts in Canada peaked in the mid-1970’s. Ditto in Ontario. Alberta peaked twice; in mid 70’s and in 2008.

On the short term:

MONTHLY Housing Starts JAN 2015
Canada down 13% M/M
ON down 10% M/M
AB up 20% M/M
QC down 48% M/M
BC down 22% M/M

ANNUALIZED Starts JAN 2015
Canada up 28% Y/Y
ON up 13% Y/Y
AB up 23% Y/Y
QC up 79% Y/Y
BC up 16% Y/Y

#55 young & foolish on 02.09.15 at 7:48 pm

The excellent point brought up in tonight’s post is about the speed at which conditions can change in today’s environment. Information travels faster than ever, and alert people are skittish. It’s enough to scare ordinarily clever people into making big mistakes.

#56 Nerf Herder on 02.09.15 at 7:55 pm

#48

Just to clarify, I don’t mind mind opinions such as yours – in fact, I agree with you. It’s reporters from supposed ethical newspapers who want attention grabbing headlines.

It’s the same when values are heading up… “Surging house prices” etc

#57 amazon girl on 02.09.15 at 7:58 pm

@44 Lillooet,BC very well spoken.
@Smoking Man .wow about your dad maybe you will follow his foot steps.
Care to give your view on the oil prices…

#58 Ex-Cowtown on 02.09.15 at 8:00 pm

#11 Malik on 02.09.15 at 6:22 pm

It does not matter what happens here in canada, only way prices going down is when interest rates go up.

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

When you lose your job, interest rates could be 0% and you’ll still get foreclosed on. Broke is broke. And prices crater. No income, no house. Interest rate is meaningless.

Also don’t forget that the vast majority of people got sucker punched by low interest rates. They thought that the low rates meant that they could just go out and borrow more money. Not even a clue how much trouble they were getting into.

Albertans, I’m sure, all had a plan right up until they got hit. Then the plan went out the window and panic set in.

Whats more concerning is that VAN and TO don’t really think that oil prices affect them. Ignorance is bliss.

#59 Alex on 02.09.15 at 8:04 pm

LOL

I have been waiting for the rug to be pulled from under us for years … waiting patiently on the sidelines to pounce on the devalued assets of the less fortunate. NewsFlash … Real estate will either sustain or increase in values as long as our interest rates are where they are at … Too much built up equity combined with a banking system very eager to lend to the minions will ensure real estate keeps rising (speaking of Ontario) as clearly Alberta has other, more severe, issues as is with all 1 trick ponies. Soon enough you will have 1000’s, is not tens of thousands, of Albertans (just as in the early 80’s) migrate over to Ontario, driving the vacancy rate to an almost ZERO level, driving up rents, buying furniture, groceries, etc etc … A cycle all to familiar for me as this is EXACTLY what happened to my family in the early 80’s.

I have been listening to doom and gloomers for the last several years and the 2 things I learned is that they are rarely ever right and that opinions are like “you know what”, everybody has one. They haven’t been right over the last several years, certainly were not right in Jan (rate cut) and would put my $ on the possibility that they will not be right again, anytime soon. It’s an all too familiar tactic used for purposes of population control as far back as the beginning of human civilization … Instill fear of the unknown in people so you can not only better predict their actions, but manipulate them.

Wake up people!

#60 Ex-Cowtown on 02.09.15 at 8:04 pm

The day Toronto exports a tankerload of condos to Oklahoma and gets paid in USD will be the day that I believe that the condo market is something other than time bomb waiting to go off.

#61 For those about to flop... on 02.09.15 at 8:05 pm

[email protected]#48
Your use of the word ugly reminded me of an old song lyric that could be used to sum up real estate in Canada.
It went something like…
U.G.L.Y. you ain’t got no alibi ,your ugly ,your ugly.
Sang to a cheerleaders tune.

#62 not 1st on 02.09.15 at 8:10 pm

#46 Lillooet, BC on 02.09.15 at 7:24 pm

Good thing there is no oil to be found in Lillooet.

Listen, take it from someone who has been in the patch as far back as 97, there will be no rebound in prices until some existing active production is stopped. Rig counts, storage etc are all meanless. The supply demand curve is demanding a reduction in current production, not new drilling or newly completed idle wells.

Right now its a big game of chicken cause nobody is cutting active production anywhere. Just the opposite, everyone is pumping hard to see who will blink first.

Oil will not be at $90 for at least 5 years.

#63 nonplused on 02.09.15 at 8:11 pm

Oil has always gone through boom and bust cycles. This is because of the long lead times for infrastructure development on the production side and usage adjustments on the demand side, and poor forecasting abilities by everyone involved in planning.

So the cycle goes like this. The economy in the 70’s was ticking along fine with oil in the teens. Then the cheap wells that provided that oil started to decline and OPEC and what not and boom! An oil boom as $40 was required to bring on the North Sea, Alaska, and some smaller project like the tar sands. But the economy didn’t work so good at $40 so fuel efficiency became the word of the day and blam! Back down we go. The 80’s oil bust happened even though the marginal production cost was now $40+.

Well with no new projects eventually oil went back through $40 and on towards $100 in the 2000’s. This cause a surge in new projects and the so-called “shale revolution” (really just scrapping the bottom of the oil barrel). But at those prices even the new, more fuel efficient economy couldn’t take it so bam! More demand destruction and reduced growth. Now where we will be for a while is more oil supply than the economy can use as it finds it’s way to even better efficiency and alternative fuel sources until what’s been built goes into decline. At that point prices will rise again.

But what will be different next time is there will not be unlimited capital for marginal production. Too much good money has been destroyed on this time to be forgotten.

There are a lot of different factors that go into the above simplification but it’s not possible to cover them all here. A couple of highlights though.

One of the ways the economy moved away from oil especially in the 2000’s was off-shoring production to China, where the primary fuel is coal. This enabled the US to shut down most of it’s oil consuming power plants. Many of them are still there, but they only run in distressed situations. For example in the US North East last winter in several locations it was cheaper to make electricity from oil even at $100 because they could not get enough gas at any price. So anyway moving production to China was one way the world reduced oil demand by switching to coal. Of course if you live in China the smog that resulted is a not so pleasant side effect, but there was no choice for the world economy at that point.

The “shale revolution” is another interesting dynamic. As oil prices again began rising in the 2000’s due to economic growth in excess of what traditional oil plays could deliver to, it suddenly seemed economic to produce oil and gas from the source rock. However because the EROEI (energy return on energy invested) is so low on shale it wasn’t long before the economy again had to reduce demand growth, this time through demand destruction rather than off-shoring. Shale wells simply aren’t energy intense enough for the way we use energy. You have to put too much steel, cement, and labor in the ground for what they produce. In other words they are not productive enough as an energy source. But a lot were drilled and prices will stay low until they begin to decline.

Another long term factor than is starting to rear it’s head is automation. From one way of looking at it replacing office workers with computers doesn’t look like energy reduction because those computers require electricity. But a computer that can replace 4 or 5 office workers may only use 75 watts of electricity. Know how much energy those 4 or 5 workers’ cars use every day? It is much more efficient to leave the workers at home watching TV, with their cars idle in the driveway.

But if their cars are idle, how often do they need to replace them? Not as often is the answer, causing the auto industry to contract and use less energy too. (“Cash for clunkers” and more cheap financing was the political response to that. In the US they actually paid people to destroy perfectly good cars to save the auto industry under the guise of fuel efficiency. It was anything but. A car represents a huge investment of energy, to destroy one that still works a huge misplacement of funds.)

Peak “cheap oil” happened in 2006 (as was predicted by several geologists). Cheap oil is many years behind us now. What the future will hold is a shortened boom-bust cycle until the economy finds other sources of energy and becomes more energy efficient. Things like work-from-home, automation, and public transport are the current waves of the near term future. 30 years from now the only reason anyone will drill for oil & gas is to make plastic and chemicals. It’ll be too costly to extract as an energy source. But the ride from here to there will be extremely bumpy. A boom and bust every 5 years as opposed to 10 to 20 years as in the past.

All these things are tied together, and many more factors as well, which is why it’s so hard to make predictions. But one prediction is pretty easy to make as long as you don’t put a timeline on it. Oil and Gas are non-renewable. Therefore, one day (who knows when), there won’t be any left worth getting out of the ground. This applies to coal as well, and also to iron, gold, silver, any mined product. The difference is metals are infinitely recyclable so you don’t need to replace them. In the US the major source of steel has been scrap for years, not new mined ore. So the non-renewable nature of metals is not a problem, they don’t get used up, only transformed. The non-renewable nature of oil, gas, and coal as an energy source very much is a problem.

Trees are another good example of looking at what you have and using it appropriately. If you build a house that lasts 30 years out of trees and replant the forest, 30 years later when you need a new house, guess what? You have new trees. But if you use it as a primary fuel source it is wholly inadequate to do the job. Sure you can burn scraps as a secondary fuel source but we can’t heat all the houses that way or there will be no trees to build house out of.

#64 Zen on 02.09.15 at 8:20 pm

Wholeheartedly agree with your article, Garth.

Lenin once said that, “there are decades when nothing happens and there are weeks when decades happen.”

Nothing bad happened in the Canadian economy in the last decade, in fact even while the US was suffering it’s epic housing meltdown and financial crisis, real-estate in Canada remained relatively stable and the Canadian banks were lauded as paragons of financial strength, virtue and stability.

Oh, the difference a decade makes …

We are entering a time for Canada where it appears decades of debt, indulgence and leverage will unwind in weeks … or months, not years.

For all those who believe the unwinding of the real-estate market in Calgary will remain contained in Calgary, I challenge you to research the origins of the US housing debacle.

Early 2006 a few ambitious hedge fundies recognized severe cracks in housing market in the midwest rustbelt. The crowd saw this as well but believed it would remain contained as a midwest problem.

Kyle Bass, John Paulson, and a few others bet the ranch that the problem in the they saw would NOT remain contained and it was but the canary in the coal mine. By 2008 their big short on US housing was paying them billions. And the entire country looked like Detroit.

The lesson? The crowd is ALWAYS wrong!

Vancouver and Toronto …hang onto your knickers, cuz you are about to get whacked!!!

#65 mortgagebrokeron on 02.09.15 at 8:24 pm

Toronto people are special, they vote in Provincial Liberals, they can’t balance their checkbook. Province is in deficit, (People in toronto, that means spending more than you take in)

People in Toronto think that the government will take care of them forever so house prices will always go up.

I live in Ontario, outside of GTA, boggles my mind how bad our government is.

Oh yeah i also do mortgages, and teachers are the ones who need second mortgages, they are the worst with their money.

Ontario is screwwwwwwwwwwwwwwwwwwed too. Let’s not be too smug about Alberta, things aren’t really that hot out here either

#66 Don’t be so sure | Realties.ca on 02.09.15 at 8:32 pm

[…] Source: http://www.greaterfool.ca/2015/02/09/dont-be-so-sure/ […]

#67 Anything you can do ... on 02.09.15 at 8:33 pm

Those who think housing markets take endless months, or even years, to turn are wrong.
– Garth
=================

This quote by Rudi Dornbusch generalises Garth’s comment: “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”

Meanwhile, back in Australia: Perth = Calgary, and Sydney/Melbourne = Vancouver/Toronto.

Perth is rolling over slowly, as Western Australia’s iron ore = Alberta’s oil/gas.

Meanwhile, Sydney/Melbourne property sentiment remains delusional, as seen at: http://www.propertyobserver.com.au/finding/residential-investment/sales-and-auctions/40022-sydney-s-weekend-cheapest-but-big-bounce-back-for-canley-vale-offering.html and http://www.propertyobserver.com.au/finding/residential-investment/sales-and-auctions/39982-sydney-s-weekend-auction-clearance-rate-soars-to-82-but-port-hedland-highlights-who-the-might-can-fall.html.

Australia’s main export product – iron ore – has also seen its value cut in half, and the consequences won’t be too long in coming. Already, Perth commercial vacancy rates have soared to 15%, a twenty-year high (see http://www.abc.net.au/news/2015-02-04/perth-office-rental-vacancies-at-20-year-high/6070438) as mining and exploration-related business get hit.

Alberta and Western Australia are joined at the resources hip, as we’ll also see at the state budget level soon.

#68 ANON on 02.09.15 at 8:40 pm

Headlines on BBC openly stating that UK prepares for Greece to exit, yet no apparent worry on the surface. Deadlines, headlines, even the high priest “who saved the world” admitting openly it is inevitable Cried wolf too many times? Now its at the door and nobody notices. Everyone’s sure “They’ll think of something”. “They” always do.
A fitting photo for today’s post, that’s how I always pictured BigD: nothing personal, just the way the world is.

#69 Shane on 02.09.15 at 8:42 pm

I bought 4 months ago. After rates go to 0.25%, will the government write down mortgage loans based on individual household incomes. I hope they do as Canada is 70% owners. Otherwise the financial industry would fall apart in Canada.

Shane

Please tell me that was not a serious question. — Garth

#70 Ray Vasquez on 02.09.15 at 8:45 pm

To Mark #21

It does not matter they do. If you don’t have at least $750,000 to $1 million dollars in investments and are debt free, their actions are meaningless.

I would rather have annually $30,000 to $40,000 income from fixed income investments and have no debt than benefit from paying $1,000, $2,000, $3,000 a year less in interest on mortgages, debts.

#71 H on 02.09.15 at 8:49 pm

Garth,

You should honestly post the calls of these analysts. Past calls.

Same for the analysts who have been forecasting rising rates here in Canada.

That, would likely be useful.

As for the oil prices. Lets wait till Wednesday at 1PM Eastern to determine where this is going.

I believe that is when you will see the contango drop like a stone, and experts diving all over each other to predict $80 by summer.

As mentioned in earlier posts. January, 2009. Oil $36. Prediction was $20. Same set of issues.

By June it was $76 with the predictions of $150.

But this time its different…right.

#72 Mark on 02.09.15 at 8:49 pm

“I bought 4 months ago. After rates go to 0.25%, will the government write down mortgage loans based on individual household incomes. I hope they do as Canada is 70% owners. Otherwise the financial industry would fall apart in Canada. “

Hell no. But you’ll be stuck paying back the principal on such a loan in commensurately more valuable money. That’s what a lower interest rate means — it doesn’t mean that the burden of debt service is reduced, it just means that the burden of debt service will be in the requirement to repay more valuable money, rather than paying a higher interest rate, but repaying in depreciated money.

Lenders make loans to make money. They are not your charity. If they’re willing to lend to you for 3%, that means they think they’re better off lending to you at 3%, rather than actually buying a house. With houses going down in price over the past 2 years, this has been borne out as being true. A 3% return for a mortgage loan is a lot better than losing 5-10%/annum on owning a house, that’s for sure.

#73 HJD on 02.09.15 at 8:53 pm

This blog has become mired in negativity and pessimism, a place to visit for those who need their daily fix of bad news and grim forecasts. The sky over this website is always falling.

What in the article was untrue? — Garth

#74 TheLaughingCON on 02.09.15 at 8:56 pm

To my nemesis Smoking Man and all Toronto-centric housing RE bulls (immigration based)

Today, Feb.9 Stats Canada released the “Income of immigrants: Ontario, 2012”

You are more than welcome to check it out here:
http://www.statcan.gc.ca/daily-quotidien/150209/dq150209b-eng.htm

and do not forget to take a look at the attached CANSIM tables: 054-0013

2005 – 92,865 / 72,740 with income (median $23,000)
2006 – 84,500 / 65,015 with income (median $22,000)
2007 – 76,345 / 58,650 with income (median $22,000)
2008 – 76,735 / 58,365 with income (median $21,000)
2009 – 75,520 / 56,895 with income (median $19,700)
FY201,11,12 not available

Sure they will buy a lot of houses and condos.

Oops, I forgot that the Business immigrants (principal applicant) do that:
2005 – 960 / 755 with income – 15 of them welfare
2006 – 925 / 715 with income – 30 of them welfare
2007 – 820 / 635 with income – 15 of them welfare
2008 – 1,010 / 835 with income – 15 of them welfare
2009 – 990 / 840 with income – 10 of them welfare

Sure they bought a lot of houses.

#75 Pulp Faction on 02.09.15 at 9:00 pm

To the ill-informed…….oil could totally hit $20 /bbl.
It is not a market-driven price decrease, it is a political one. Cheap oil derails North American energy policies that were designed to achieve energy independence from the middle east. Goodbye Keystone XL, goodbye Northern Gateway, until better times. Good bye to a large swath of domestic drilling, exploration, production, etc. until it becomes profitable. At production costs of $45 – $68 per bbl for our oil, it is better left in the ground right now. The Saudis can pump all day long for $20/bbl and they don’t need the money, just the control and power over larger nations.
They will not relinquish this control in favor of profits.

#76 Cici on 02.09.15 at 9:06 pm

For all of you who were looking out for whispers at the edge of the rainforest, it seems he or she is still out there tweeting: https://twitter.com/village_whisper/with_replies

hmmm, maybe the whisperer has retired from his or her blog because tweeting is just easier? Or maybe he or she is taking a break from the blog to follow the temporary? oil glitch and its impact on real estate-associated borrowing?

#77 lala on 02.09.15 at 9:09 pm

Jobs, housing, money seriously…. I was in Thessaloniki Greece last summer No jobs no money no taxes no goverment, only uzzo, bouzouki, beautiful girls dancing till 5:00 am, 8 days a week and then come back. Took the flight from Vienna to Pearson, depressed at the airport when I got a taste of Toronto from people waiting. Women that look like men and men that look like women, dressed very bad with that stupid attitude in their faces. Next flight one way.

#78 Smoking Man on 02.09.15 at 9:10 pm

#57 amazon girl on 02.09.15 at 7:58 pm
@44 Lillooet,BC very well spoken.
@Smoking Man .wow about your dad maybe you will follow his foot steps.
Care to give your view on the oil prices…
…..

I don’t belive it’s going to 20, but I bet that way… Down 60k from today’s trades.

I think the group mob vs Putin dident realize how much shooting one self in the head felt like..

Oil will rebound. I’m a phyco, can’t stand losing. But Im more logical that emotional.. I’ll figure out a counter trade.

I always do when I fk up…

#79 Smoking Man on 02.09.15 at 9:14 pm

#74 TheLaughingCON on 02.09.15 at 8:56 pm
To my nemesis Smoking Man and all Toronto-centric housing RE bulls (immigration based)
…..
I thought after all these years we could be pals.. Getting hammered at south side Johnnys telling lies to each other..

Damn

#80 notagreaterfool on 02.09.15 at 9:29 pm

Garth,

You have long stated rates will go rise this year and when they do the prices of homes will start to descend. When that starts a long slow thaw is expected.

How does the oil and the loonie tanking impact these positions?

Sounds to me like you are suggesting rates will drop and prices will drop too now – this year.

I said US rates would rise this year. They will. I expected our rates to remain the same. They did ‘t. This is bad news. — Garth

#81 Not a Realtor on 02.09.15 at 9:32 pm

#44 Smoking Man
“I can’t comment on Vancouver. But Toronto, hell ya. Good luck with a softy re market here. The Herd here is truly different. No cowboys, except maybe in Long Branch. Hell that even sounds Western.”
—————-
Amen SM. Toronto and Vancouver aren’t going to see a decline anytime soon, no matter how many cowbells freeze up temporarily.

#82 Another Albertan on 02.09.15 at 9:40 pm

Some food for thought from downtown Calgary:

Rush hour is decidedly lighter than 6 months ago. It would typically take me 12 to 15 minutes to drive home at 5:30. Now, it’s 5 to 7.

There is a certain office building at the intersection of 5th Avenue and 8th Street SW that is notionally empty. Anecdotally (from our commercial real estate broker), the engineering company that occupied a lot of space told the landlord to the effect “We are leaving immediately and are breaking the lease. You can take 1 year of rent or you can sue us.” The landlord took the rent.

We posted our extra space on the open market, but we’re not expecting any calls. There are hundreds of thousands of square feet of sub-lease space available for immediate occupancy. With all the A and AA space coming on the market in the year or so, it is driving down the price for the B and C on the periphery of downtown.

It is still very difficult to get into a good lunch spot. This is because people can still gently use their expense accounts (for the time being). Those same locations where we’d transact in the past over dinner are ghost towns at supper time.

We see excellent resumes come in every week. Our executives are contacted incessantly on LinkedIn by job seekers and recruiters. We are seeing seasoned industry veterans with 25+ years experience slashing their asks when applying for positions.

The major owner-operators’ supply chain management teams have started calling in the last 2 weeks. They aren’t asking for a token 10%. They are looking for 20, 30, and 40% cuts. This is a variation of the Saudi situation – how low will you go in order to maintain market share?

We are hearing consistent anecdotes of field service companies cutting rates 30% just to get basic work. These smaller players are hemorrhaging cash. They’ll do anything to keep basic cash flow in order to pay the bank to keep the lights on and to prevent the trucks from being repossessed. We’ve heard of carnage in the small town service depots, to the point where the auction dates are being set for the heavy equipment.

The father of a colleague is a retired lawyer. He was at the west side Y in the change room when he overheard a number of realtors/developers going on about how we’ll be back above $80/bbl by Stampede. He wandered into the conversation and explained to the group what happened to him and his developer friends back in the early 80s in the matter of a few months… how they lost entire sections of land west of what is now 69st SW literally overnight. After 15 minutes of holding court, he left the now-silent group. The silence was broken by one of the developers exclaiming “I think I’m going to go throw up.”

In the last 40+ years, the general rule has been that the engineers go first a downturn. 6 to 9 months later, the wrecking ball hits everyone else. If we aren’t designing and procuring, then nobody is fabricating and constructing down the line. Save a very few large mega-projects, no owner is going ahead full-steam on new projects. Many are being slow-walked, and many have been delayed. The ones that are being delayed have a knock-on effect. The owners push out third-party staff from those field jobs and assign their own staff from a cancelled or delayed project. We saw those orders come through last week.

There are some who believe that stable $55 to 60 oil is just around the corner. This may be true. Or it might not. One caveat is that the recent swings are largely due to computerized trading – buy/sell programs doing everything from covering shorts to moving money out of the Swiss Franc as it collapsed. As a result, I’d argue the market is still hunting for the stability point for the price of oil. We are still in price discovery mode. If one has the means, intellect, and stamina to actively trade in this environment, more power to them. It’s your money, so place your bets.

For what it’s worth, I’m the “Jeff” that Garth quoted in his Sunday post a few weeks ago. There is the potential for an incredible amount of “creative destruction” to occur in Alberta in 2015. For those with long views and cash, there are and will continue to be plethoras of distressed assets. Not everything is a pig with lipstick. The long and short is that major structural changes are occurring in Alberta right now. Some are good. Some are bad. It is entirely dependent on where you are standing and on your ability to move.

Everyone else’s mileage may vary.

#83 Washed Up Lawyer on 02.09.15 at 9:41 pm

From Ft. McMurray, I want to compliment Maestro Garth on his dandy blog tonight while keeping in the cowboy vernacular.

Whoa is me.

#84 Ron on 02.09.15 at 9:41 pm

Smoking Man,

Still big on Bombardier? I’m jumping in on your guidance.

Ron

#85 Smoking Man on 02.09.15 at 9:48 pm

#82 Ron on 02.09.15 at 9:41 pm
Smoking Man,

Still big on Bombardier? I’m jumping in on your guidance.

Ron
……

Dude I’m a drunkin idiot who thinks he’s an Alien from Nictonite, are you sure?

#86 Ollie on 02.09.15 at 9:50 pm

#69 Shane on 02.09.15 at 8:42 pm
I bought 4 months ago. After rates go to 0.25%, will the government write down mortgage loans based on individual household incomes. I hope they do as Canada is 70% owners. Otherwise the financial industry would fall apart in Canada.

>>>>>>>>>>>>>>>>>>

This is so sad. First I thought you were sarcastic… then I spent the time to look at many of your posts back to May ’14. Then, it stoned me … (https://www.youtube.com/watch?v=hX8nAZftZL4)
It’s for real. This is DEMOCRACY. It’s the rule of majority… the appeasement of it…

Well. I tell you. Good luck with that. This 30% won’t subsidize you! I will find a way no matter any capital controls to get my own and be on my way out of here.

#87 aL pacino on 02.09.15 at 9:52 pm

#47 young & foolish on 02.09.15 at 7:27 pm
“tapped-out consumer spending – all you need to know”

Of course this, and job losses will put a final nail in it. The world is awash in debt and now slowing demand.
Nobody wants to pay you for your “savings” any more since everybody’s printing. So, what will retain it’s value in such circumstances?

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

HOUSING.

#88 Reader not a Poster on 02.09.15 at 9:55 pm

#73 HJD
“This blog has become mired in negativity and pessimism, a place to visit for those who need their daily fix of bad news and grim forecasts. The sky over this website is always falling.”

What in the article was untrue? — Garth
——————
Wow, you said it HJD. This blog is the epitomy of pessimism and most of the nightly followers and commenters are also Debbie Downers.

No there was nothing untrue tonight Garth, but you just focused on the most negative stories of the day. There were also stories today by other bank economists forecasting that the downturn in Alberta might not be so bad.

Like Offshore said earlier “Where was Morse this past spring or summer? His forecast originally was for $110 WTI and he has been revising it on the way down, always lagging the commodity.”

Fadel Gheit from Oppenheimer today forecast that he believes the bottom of $44 in oil is in. He’s much more credible because he’s been calling for WTI oil to trade between $60-$80 for 2 years now – never changing his view. He now thinks it will drift to $60 by the end of the year until supply demand balances correct.

#89 PVS Inquire on 02.09.15 at 9:57 pm

#77lala “Jobs, housing, money seriously….”

Thanks for putting things in perspective. I enjoy this blog but it’s becoming somewhat “the boy who cried wolf”. I don’t doubt we’re heading for plenty of trouble; maybe I just need a break from the blog and need to partake in something more worthwhile at the moment… Planning a nice trip to Europe. At least they know how to enjoy the finer things in life. Money will eventually fail us all, whether we’re rich or poor..

#90 H on 02.09.15 at 10:02 pm

“Average Albertan”

I am in the industry you speak of. Down in Houston as well.

I can assure you, without question, you are over reacting.

The amount of rigs dropped in conjunction the decline rates kicking in as I type, are setting up a major spike.

Print this off and paste it on your fridge, because it will be a paragraph that you will look back at.

Don’t believe me? Get a subscription to the National Association of Railroads and take a peak at the oil shipment graph.

CNBC, FOX, you name it is filled by people who are paid advertisers who are talking their book.

Sachs, Citi, list goes on. They are slowly and quietly shifting short position to long while you panic.

#91 Ron on 02.09.15 at 10:05 pm

You bet Smoking Man! Mainstream is so yesterday..

#92 Ex-Cowtown on 02.09.15 at 10:08 pm

#69 Shane on 02.09.15 at 8:42 pm

I bought 4 months ago. After rates go to 0.25%, will the government write down mortgage loans based on individual household incomes. I hope they do as Canada is 70% owners. Otherwise the financial industry would fall apart in Canada.

Shane

Please tell me that was not a serious question. — Garth

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

Let me handle this one GT:

“Never happen”

#93 H on 02.09.15 at 10:08 pm

Read below. As the talking heads say oil production continued to rise. Really? Rig counts (front end) have been tanking for 4 months, now the production drop is starting. By the time the average public cues in the real money will be made:

But it may be an early warning for rail companies such as CSX, BNSF and Union Pacific, which have been resolutely upbeat despite growing expectations that booming U.S. oil production will begin to slow as soon as this summer.

Monthly lease rates for the most common of oil rail cars fell to $1,300 late last month from a high of $2,450 about year earlier, according to data obtained by Reuters from energy industry intelligence service Genscape.

The rates for cars, used to transport more than half of North Dakota’s crude, are at their lowest in about three years, said Tom Williamson, owner of Transportation Consultants.

“It wasn’t that long ago that you couldn’t find a car to lease, now I’m getting calls from brokers offering the cars,” he said, adding that he has received offers for 1,500 cars since late October.

#94 Edward on 02.09.15 at 10:09 pm

#82 Another Albertan

“He wandered into the conversation and explained to the group what happened to him and his developer friends back in the early 80s in the matter of a few months… how they lost entire sections of land west of what is now 69st SW literally overnight.”
—————–
Big difference between now and the early 80’s bust. First, inflation had been out of control for years – 7%. Second interest rates hovered over 17%. Third, there was a fairly severe world wide recession including the U.S.A

#95 Washed Up Lawyer on 02.09.15 at 10:10 pm

#82 Another Albertan

Noted. Thanks. Great stuff from boots on the ground and I appreciate the time you took to comment. Yes, I want to return to my home and family in Calgary but I may have to hang in up here in the taiga earning my income for a while.

#96 bigtown on 02.09.15 at 10:14 pm

Another Albertan’s take on OIL price being traded up looks real…if they sell BONDS surely to God they will dump oil. It smells like a fresh rat carcass…watch the tape.

#97 Rebecca on 02.09.15 at 10:17 pm

“I bought 4 months ago. After rates go to 0.25%, will the government write down mortgage loans based on individual household incomes. I hope they do as Canada is 70% owners. Otherwise the financial industry would fall apart in Canada.”

How is wiping out mortgage debt helpful for the financial industry? This is blithering idiocy.

#98 pwn3d on 02.09.15 at 10:24 pm

Honestly, who gives a frak about Calgary real estate. There’s only 2 markets anyone cares about, yvr for the ham and gta for the size. And the only issues those markets will have is variable or fixed.

#99 SWL1976 on 02.09.15 at 10:30 pm

All of this has happened with relative lightning speed.

———————————

This crash is going to be epic. I realize that housing in Canada is burnt toast, I think we all do here, with the exception of some delusional real estate folk. However, I have my eye on the bigger international picture.

The collapse of the US dollar is going to be the single biggest event of our life times and is going to effect every man, woman, and child on this planet. Some will make out like bandits others will be left in the cold to looking for lunch. It’s impossible to say how it will all play out, but play out it will. The only thing that could stop this train wreck would be honesty and integrity in politics, big business and wall street… And at this point what are the odds of a sudden change of heart?

The US dollar is backed by nothing more than confidence and just like real estate all it will take is one shock, a single catalyst to rattle that confidence. Look at all the countries in the world now trying to do business without the USD as the reserve currency. They are preparing for the inevitable. Remember the US is 20% of the worlds population and since the end of WWII they have been on easy street. Now had they played fair, we would not be in such the pickle that we are. But, play fair they have not.

So what happens when all those trillions of USD out there are no longer needed for global business transactions and the majority of the people on this planet abandon the USD? Well all of those dollars are going to come home to roost.

Now what happens when the supply of all this recently printed money is way way up and the demand suddenly falls off a cliff?

I think we all know the answer to this puzzle, even our beloved real estate agents

#100 South Okie on 02.09.15 at 10:31 pm

Whatever happened to the hedge fund that was betting on a Cdn housing crash?

#101 Humpty Dumpty on 02.09.15 at 10:34 pm

Shouldn’t you say unending consequences when it comes to Fukashima….

http://enenews.com/video-cancer-epidemic-underway-fukushima-6000-increase-estimated-head-cancer-research-center-definitely-holocaust-everything-being-swept-rug-very-very-frightening-family-members-brainwashed-g

FYI, there are still over 1k of fuel rods in reactors 4, 5 and 6. They cannot access them….

#102 Smoking Man on 02.09.15 at 10:37 pm

#89 South Okie on 02.09.15 at 10:31 pm
Whatever happened to the hedge fund that was betting on a Cdn housing crash?

…….

Working on a bull shit story, hired educated goofs to spin it. I meant schooled let’s not mix the two up.

#103 james on 02.09.15 at 10:39 pm

“Sadly, Albertans swallowed the Kool-Aid, never expected a shock, and have borrowed more money than anyone else.”

Ah, let us not forget the biggest debtors – the government.

Keynes believed in saving in good times, and spending in bad times. Modern ‘keynesians’ (such as the federal ‘conservatives’ who are decidedly NOT conservative economically) don’t bother with the ‘saving’ part. They spend in good times and spend in bad times.

Not only did Alberta’s government spend and spend, they relied on optimistic revenue predictions. They also ignored the development of US oilfields like Bakken.

#104 Ollie on 02.09.15 at 10:50 pm

Everything is awesome… the one hour version. Get your fix.
https://www.youtube.com/watch?v=cCKONHUigVk

#105 palebird on 02.09.15 at 10:52 pm

#99 crash of the usd

While I do agree with most of it the USD is the safe haven. There is nowhere else to go. Yes there was talk about another currency because people were tired of being bullied by the US but that is just talk. The BRIC’s. How are they doing? When the SHTF it will be the greenback. There is nothing else. You would not even want to contemplate the state of the world if the USD imploded. Chaos is a word that comes to mind. War..

#106 Ollie on 02.09.15 at 10:52 pm

Too much pessimism:

Lyrics

Everything is awesome
Everything is cool when you’re part of a team
Everything is awesome, when we’re living our dream

Everything is better when we stick together
Side by side, you and I gonna win forever, let’s party forever
We’re the same, I’m like you, you’re like me, we’re all working in harmony

Everything is awesome
Everything is cool when you’re part of a team
Everything is awesome, when we’re living our dream

(Wooo)
3, 2, 1. GO

Have you heard the news, everyone’s talking
Life is good ’cause everything’s awesome
Lost my job, it’s a new opportunity
More free time for my awesome community

I feel more awesome than an awesome opossum
Dip my body in chocolate frostin’
Three years later, washed out the frostin’
Smellin’ like a blossom, everything is awesome
Stepped in mud, got new brown shoes
It’s awesome to win, and it’s awesome to lose (it’s awesome to lose)

Everything is better when we stick together
Side by side, you and I, gonna win forever, let’s party forever
We’re the same, I’m like you, you’re like me, we’re all working in harmony

Everything is awesome
Everything is cool when you’re part of a team
Everything is awesome, when we’re living our dream

Blue skies, bouncy springs
We just named you awesome things
A nobel prize, a piece of string
You know what’s awesome, EVERYTHING

Dogs and fleas, allergies, a book of Greek antiquities
Brand new pants, a very old vest
Awesome items are the best

Trees, frogs, clogs
They’re awesome
Rocks, clocks, and socks
They’re awesome
Figs, and jigs, and twigs
That’s awesome
Everything you see, or think, or say
Is awesome

Everything is awesome
Everything is cool when you’re part of a team
Everything is awesome, when we’re living our dream

#107 Andrew Woburn on 02.09.15 at 11:01 pm

#256 NEVER GIVE UP on 02.08.15 at 1:40 pm

Just look at the taxi industry.
——————————————————————
Very insightful look at the industry.

– Maybe your right about the brown envelopes of money not changing hands but I am pretty sure there is a lot of financial support for whoever is in municipal office.

For the record, I was once involved in a limo business that was harassed by a city taxi inspector. When he threatened to strip our licence plates, we appealed to the mayor who promptly called off the dogs.

– And that is “Self Driving Cars”. They will be here much faster than you think.

I’m not holding my breath. Google’s cars are still not “thinking”, they are totally dependent on very detailed maps and still have severe limitations such as in fog and snow.

It might take 20 years to lose all truck drivers but we will see them start disappearing very soon. The holy grail for highway transport companies has been the ability to pull multiple trailers with one tractor. This is done in Australia in “road trains” and there are now stretches of straight controlled access Canadian highways where double trailers can be pulled. One major limiting factor in much of Canada is the ability to safely negotiate bends and hills with road trains without crushing Kia’s.

It is now technologically possible to wirelessly control two or three full size 18 wheelers from the front vehicle while maintaining enough separation to handle bends and let cars drop into the spaces between when overtaking. This is a much less complex task than programming trucks to self drive in uncontrolled spaces and provides tummy comfort to the authorities that humans will be in charge. I would be surprised if this is not widespread within five years.

All businesses want to lower transport costs but it is crucial for Canadian resource businesses since they have to compete with global prices on low margins and getting commodities to a port here can mean a very long ride. The semi-automated approach to trucking will cost jobs but it could also make resource exports from some areas of BC, for example, more cost competitive. The rule of thumb today is that rail is only really cost effective if your haul is more than 1,000 miles. If technology suddenly meant you could truck commodities say 1,500 miles at rates competitive to rail, it could result in a significant change in Canada’s economic geography.

#108 Waterloo Resident on 02.09.15 at 11:09 pm

I don’t know if this is INFLATION or not but it sure looks that way to me; A carpenter I know drives an old beat up 2006 pickup truck and he says a dealer offered him $5,000 for it a year ago. Now a year later and 52,000 extra kms rolled up onto it and the SAME dealer offers him $6,200 for the exact same truck.
Seems there is a severe USED CAR SHORTAGE here in Southern Ontario and anything that is in running condition is getting top dollar.
So don’t worry, if old used cars are selling like hotcakes, then the economy is in NO TROUBLE, it’s just fine. Relax and take it easy, by next year the economy will be booming once again.

#109 BG on 02.09.15 at 11:11 pm

#64 Zen

“The lesson? The crowd is ALWAYS wrong!”

Have you not been reading this blog, explaining how the fundamentals did not support the RE prices and still they keep rising?

The crowd is always right.
If the crowd thinks their homes should sell at 1 million, then it happens.
If the crowd panics and thinks their homes are worth nothing, then that’s what the homes sell for.

Power is where men think it is.
And it changes like the wind.

Can’t time the stock market, can’t time real estate market.
But we still can acknowledge risk and act in accordingly.
And we can buy stuff when it’s cheap.

#110 For those about to flop... on 02.09.15 at 11:19 pm

Swl1976 @99
I find it improbable that the U.S is 20% of the worlds population .
335 million out of 7.2 billion.

#111 tundra pete on 02.09.15 at 11:26 pm

Price could certainly go to 20 maybe lower. Opec made this clear several weeks earlier. The saudis are going to continue to pollute the market with scads of it simply to halt U.S. oil production as best they can. They have too much to lose if the U.S. pukes out too much of their own.

Looks good on Prentice and his ilk when they have had how many years to shore up their coffers for a rainy day. Instead they brag up cheap bitumen, con the populace to pig out on debt, now the crying begins.

#112 Harbour on 02.09.15 at 11:29 pm

Retiring MLAs to take home $5M in severance pay

http://calgaryherald.com/news/politics/retiring-mlas-to-take-home-5m-in-severance-pay

#113 Ollie on 02.09.15 at 11:31 pm

#108 Waterloo Resident on 02.09.15 at 11:09 pm

Interesting info but I don’t agree with your explanation. The used cars market is not independent, has to be taken together with the new car market. Who wants to buy a car would buy one, not two, one new one old. Either a new one or an old one. The increase in price shows an increase in demand that can be from new car market dropouts falling into the used one. That shows deflation and only a temporary apparent inflation in a sector of the specific whole market.
Waiting for the stats can new vehicle sales report, although I don’t trust the gov numbers anymore.

#114 RayofLight on 02.09.15 at 11:33 pm

#63 Nonplused:
We will never reach peak oil. Much of the oil/gas/ coal reserves will become stranded assets .The limiting factor will become the concentration of CO2 in the atmosphere. And like most trends, this will severely overshoot before it becomes apparent, and any hope of a “soft landing” recoup will be well past. But not to worry, this won’t happen in your lifespan, so things are good. In the meantime “drill baby drill”

#115 Victor V on 02.09.15 at 11:36 pm

Oil price shock sends Canadian pessimism to recession-era levels

http://www.thestar.com/business/economy/2015/02/09/oil-price-shock-sends-canadian-pessimism-to-recession-era-levels.html#

The share of Canadians expressing pessimism about the prospects for the economy has doubled from October. The difference between pessimists and optimists — at 30.4 per cent — is the highest since the 2008-2009 recession.

Canadians continue to pare expectations for home values. The share of those predicting real estate prices will fall over the next six months rose to 18.2 per cent, the highest level since May 2013 and up from about 11 per cent in October. The percentage predicting prices will rise, while up the last two weeks, remains at relatively low levels. It was 32.2 per cent last week from 44 per cent in October.

#116 Cheer up folks on 02.09.15 at 11:39 pm

https://www.youtube.com/watch?v=d-diB65scQU

#117 Zen on 02.09.15 at 11:41 pm

#100 South Okie –

That fund is the Spartan Real Asset fund and it remains short Canada housing. They must be licking their chops right now…

#118 Obvious Truth on 02.09.15 at 11:52 pm

Oil is a dinosaur now. Or is a dinosaur oil. $20 might be too much.

My recent driving in Ontario only solidified the view that alternative energy is now the marginal barrel of oil.

Why pull that dirty stuff out of the ground when large beautiful wind turbines can do the job. Cleaner and cheaper. And closer to end users.

Some quick reading reveals that there is enough potential wind power in America to fulfill 10x it’s energy needs. Add solar and Elon the gigaman I’m thinking electric cars ruling in less than 10 years.

#119 Guy on 02.10.15 at 12:01 am

From what I understand, the low oil prices are because of a deal between the Saudi’s and American’s to reduce the Russian revenues. Similar to what Ronald Reagan did to collapse the Soviet Union.

Once the Ukrainian fiasco is done, are oil prices going to go back up?

#120 bdy sktrn on 02.10.15 at 12:21 am

.#104 Ollie on 02.09.15 at 10:50 pm
Everything is awesome… the one hour version. Get your fix.
———————————
FINISHED IT!!!

i think i’m safe from becoming depressed for at least 12 months.

Strangely i have this urge to purchase some RE!

#121 Tbone Elliott on 02.10.15 at 12:24 am

I want to Convert fixed mortage with two years remaining (at 3.39) to variable (2.19). On 200k remaining in house in Toronto. Buyout is 3 months interest atm. thinking about it. Thoughts?

Have always done fixed in my life

(Garth and co, don’t recommend sell house, I like my house and bike ride to work)

#122 debtified on 02.10.15 at 12:25 am

Here’s a balanced analysis of Rent vs Buy from The Globe & Mail. Garth has attempted to make a similar point, several times, but this one is an illustrated video so, for some people, it might be easier to understand. It’s 8.5 minutes long and worth it! Enjoy!

http://goo.gl/4Ve2Iq

#123 Tiger on 02.10.15 at 12:29 am

Wealthy immigrant home buyers would protect Vancouver from asset bubble

http://www.biv.com/article/2015/2/wealthy-immigrant-homebuyers-would-protect-vancouv/

#124 SWL1976 on 02.10.15 at 12:42 am

#99 SWL1976 – Wow my math was way off which makes the numbers even more mind boggling

350 million / 7 billion 0.05%

#125 Zen on 02.10.15 at 12:48 am

#109 BG –

Perhaps I should have been more specific. The crowd is always wrong … in the end.

I understand your point, that in crowd psychology thinking makes it so. However this cuts both ways.

The crowd has been unanimous in their opinion that housing always goes up, this creates the demand which drives the price up further and so on. You would argue this makes the crowd right, right? What about when sentiment changes and the crowd begins running the other direction tramping over themselves in a mad rush for the exits, desperate to get out of their highly leveraged over-priced homes at any price. What would you call the crowd now? Would you call them right?

The salient point is simple. The crowd is invariably wrong at the extremes and it always pays in the long run to bet against them.

#126 chapter 9 on 02.10.15 at 12:51 am

Oil and Religion, what a combination! Saudi Arabia and their gulf allies see Iran as a religious and political opponent. Iran is dominated by Shia Muslim sect that happens to support a very resentful underclass of more than a million Muslim Shia living in the gulf peninsula,pretty much a uprising waiting to happen against the Saudi’s.
The Saudi’s are Sunni Muslims and hate the fact that Iran also supports Assad’s regime in Syria, which again is a religious connection.Iran’s economy has been hammered by corruption and sanctions and oil revenue is their ticket. Saudi production costs are low plus they are flush with cash and can easily handle 1-3 years of low prices.
In the U.S. if the frackers go broke the radical environmentalists in the Obama administration won’t be shedding any tears. Russia, Alberta,other producers “to bad,so sad” collateral damage.
So this notion that oil prices are going to spring back next week or in three months ain’t going to happen we are caught up in a “religious war”.

#127 $20 oil on 02.10.15 at 1:19 am

I am willing to put $100K bet on oil when it hits $20.

I can wait, even if it takes 1-5 years to go back to $40+

What would be the best way to play this?

#128 waiting on the westcoast on 02.10.15 at 1:38 am

#111 tundra pete on 02.09.15 at 11:26 pm
“Price could certainly go to 20 maybe lower. Opec made this clear several weeks earlier. The saudis are going to continue to pollute the market with scads of it simply to halt U.S. oil production as best they can. They have too much to lose if the U.S. pukes out too much of their own.”

The Saudi’s have not increased production. They are maintaining it. The US and Canada have increased production by nearly 5 mbd combined since 2010. That is where your excess supply is coming from. We are cratering the market – not them.

#129 Ronaldo on 02.10.15 at 1:47 am

#119 Guy on 02.10.15 at 12:01 am

”From what I understand, the low oil prices are because of a deal between the Saudi’s and American’s to reduce the Russian revenues. Similar to what Ronald Reagan did to collapse the Soviet Union.”
—————————————————

Russia’s population is just under 50% of U.S. The U.S. debt is 76 times greater than Russia’s. Russia holds enough U.S. debt that if they were to dump it, they would be able to pay off 60% of their own debt. Russia’s debt to GDP is 13% vs. Canada at 89% and U.S. at 101%. Things today are not at all like they were in Reagan’s time. Russia will come out just fine. Canada will be affected much worse than Russia will be.

#130 Crude By Gum on 02.10.15 at 3:45 am

$20 Buck Crude……yes please. I’ll leverage the farm for that sweet dip. They’ll have to cover the moon with windmills and raise taxes to 200% before the green blob can power a modern economy.

Meanwhile look for civil wars over food costs when governments can’t afford to feed the people in 90++ countries that rely on petroleum revenue.

Taxes will have to go up to 100% in western countries to feed the starving billions who will wash onto European and North American shores in desperation.

$20 Buck crude….oh yeah baby…save two of those Lambo’s for me.

#131 Grantmi on 02.10.15 at 4:01 am

#2 Gamon on 02.09.15 at 6:11 pm

$20 oil prediction from CITI is unrealistic. With rig count falling dramatically chances are oil will rebound sooner rather than later. The downturn may last few months, but once there is a light at the end of the tunnel panic will subside and we’ll start preparing for another cycle.

I don’t see real estate in Canada crashing as long as China continues its stimulus policies.

Ha ha…. China has it’s own issues. they’re not coming to rescue us!!

http://bloom.bg/1KD6Kub

#132 Mr. White on 02.10.15 at 4:22 am

Prices in Calgary in particular are senseless.

However, oil prices will be above 80 bucks this July.

#133 Freedom First on 02.10.15 at 4:53 am

Nice pic for today’s Post. Reminds me what I’ve been saying the last couple of years on Garth’s Blog. Canadians have been sleeping. Well……..”It’s Showtime!”

Canadians are very wealthy compared to many other Countries in the world. Too bad the debt laden Canadians themselves couldn’t just enjoy a nice healthy standard of living without financing themselves into being so financially vulnerable to a tragic turn of events. Of which there is many variations from world events to personal circumstances changing. Of course, no one ever sees them coming, so why on earth would anyone hope for the best but plan for the worst? I want to always be the cat. Nothing personal. I am just into personal preservation. That mindset happens when you start out on your own at 17. I live by 2 rules….a) look after me, and b) help others…..and that means help, not enable.

#134 theAwakenedOne on 02.10.15 at 6:05 am

Some think that this blog is too negative and really weeping pessimistic world view.

Sure: I do agree – it’s truthfully pessimistic.

But if we are not facing the truth, the likely & logical probability, are we ostrichs ? Should we cast the ostrich on the next toonie, folks ?

Here’s something true I observed: this winter, a bad wind storm blew through 604 area (YVR), knocked out power on several blocks of Kingsway (a major street).

What did I see ? Not A SINGLE building, including a McDonalds and some gas stations, had any back-up light – at all !

Pitch black. Not one: None, nil, zero, nada – with any back-up light source for hours.

This tells you something: in reality, people are not psychologically prepared, and are really not willing to admit anything shocking that could impact them, rendering them powerless, helpless, unprepared in the dark…

Be it a tsunami, a 911 event, a wind storm, a shoot-out inside Parliament (guess who hid inside a dark & dusty broom closet while bullets were flying… S**it, I surely wasn’t prepared to acknowledge or believe this as a Canadian)… or a real shock in our economy.

Many think I’m crazy stocking up on dry goods, water, toilet papers, medicines, a generator, fuels and some Coleman lanterns & stoves.

Guess who’s laughing then? Likely not those living without power in the winter for a day or 2 !

What have you got to weather a financial storm or a tsunami in the economy, honestly ?? Not a huge mortgage, I hope ?

To each their own…

Some might think Garth is a complete doom-and-crash loon, a fear monger, a bad black sheep… that’s why Emperor Haute Couture ordered his execution, a good whipping, and kicked him out of the palace.

But some surely do not.

#135 Jay on 02.10.15 at 6:28 am

The irony is, the conditions that come from an oil boom, expensive labour, high dollar, expensive energy prices, were cataclysmic for manufacturing.

I’m guessing that plants that were marginal at 1.10 dollar and $120/bbl oil are raking money in hand over fist right now.

#136 Bob the Nark on 02.10.15 at 6:55 am

“Some quick reading reveals that there is enough potential wind power in America to fulfill 10x it’s energy needs. Add solar and Elon the gigaman I’m thinking electric cars ruling in less than 10 years.”

Bwahahahahahahahahahaahahah….reading what….the green blob daily worker? The windmills in Ontario cost the taxpayer billions in subsidies every year. “Energy Poverty” is the new word in the Ontario consumers lexicon.

#137 SWL1976 on 02.10.15 at 6:59 am

#99 SWL1976 – Wow my math was way off which makes the numbers even more mind boggling

350 million / 7 billion 0.05%

———————————-

Doh!!!!

it’s 5% and I deserve to get chriped on this one I really do

Point still stands

#138 bigrider on 02.10.15 at 7:45 am

You speak of the “draconian thuggery” with which the real estate sales mob controls the free flow of RE sales information to the general public. A public for whom an RE purchase represents the largest and most important purchase of their lives. Done wrong can change it detrimentally forever.
People in the financial industry have to deal with ever increasing amounts of regulatory burdens not to mention the condescending introduction of CRM-2 next
year.

Yet the average dumb Canuck thinks financial investments and those who advise on them are out to ‘scam you’ and the seller of bricks can do no wrong

when will this change Garth.

#139 ANON on 02.10.15 at 7:48 am

#127 $20 oil on 02.10.15 at 1:19 am
What would be the best way to play this?

———–
20$ oil is best played with 5-10 years worth of MRE in a wood cabin in the mountains, preferably not in a -40 degrees environment. Knowledge of splitting wood, hunting, butchering, rendering fat, drying and smoking meat will also be necessary. Also known as PlanZ.
Let’s hope&pray oil price does not get that low.

#140 Doug, still in Thailand on 02.10.15 at 8:01 am

If you played your cards right, you could have made money off the drop and sudden rally in the price of oil. Earlier this year, USO-NY took a big drop so I scooped some up. Recently I’ve sold some off for a tidy profit, paying for some of the expenses on my trip. If oil goes up ore, I’ll sell more USO and XEG-T. If it drops, I’ll buy it back when on sale again. As I’ve said many times, invest like a governor that gives the engine more fuel when the speed drops, and less fuel when the speed increases.

Speaking of engines, while here I’ve seen many taxis, tuk tuks, motor bikes and mini buses that run on gasoline. I’ve also seen larger buses, ferries, trucks and the Thailand State Railway that run on diesel fuel, and will eventually fly back home on a plane that burns jet fuel. Wow, I really needed this vacation to deal with my worries about the future of oil!

#141 LOL Canada on 02.10.15 at 8:50 am

2 things

20 oil is probable. Reason being many shale producers are increasing production to stay in the black. In fact countries are increasing production, not decreasing. Demand for oil slides as well. Would you rather go bankrupt or sell more oil?

House prices across Canada are on the slide from last spring. Toronto detached touched a million, now it is at least 10% lower. Value of a dollar is 20% lower meaning foreign investors have lost money over the last year. Real estate is very fickle. We average 5000 sales in January. If sales go down 5% to 10%, this can cause huge problems.

The problem is that if our oil industry gets hit, so does most of our other industries.
Oil = 9%
Banking = 20%
Home construction = 10%

Heck, there are over 200,000 people working in real estate and lending.

As one piece falls, it may have a domino effect.

#142 BLM on 02.10.15 at 9:09 am

“So Citibank expert Edward Morse says twenty bucks is entirely possible, before a recovery back to about where we are now at the end of the year.”

This view is as extreme as the realtors who say property prices still have some ways up to go (with the recent and looming spring interest rate cuts) before coming back down to where they are now.

#143 Obvious Truth on 02.10.15 at 9:27 am

#136. Your gas isn’t free.

Getting it to you and it’s use is nothing but awful for everything and everyone. Costs are staggering.

O and g subsidies are epic. But opinions by you and me don’t matter. I don’t really have one. I just look at numbers and think why.

Alernatives including solar and wind are the new marginal barrel. The market is speaking. It’s clear but will take time and be bumpy.

Money is talking. You have to pay attention.

#144 crowdedelevatorfartz on 02.10.15 at 9:35 am

@#84
Bombardier?

You have GOT to be kidding…….

#145 crowdedelevatorfartz on 02.10.15 at 9:42 am

@#82 Another Albertan

Total agreement.
I lived in Alberta in the early 80’s. It was ugly. Moved to the coast. Watched houses go from 240k to 80k almost overnight.
Ugly doesnt even begin to describe it.
Unfortunately the kids today havent seen ugly so they have zero concept of how bad it can get.

#146 Duncan herbert on 02.10.15 at 9:45 am

the reason there is no panic in the real estate in calgary is that the drop in oil prices has not hit the stock market. Hell, even the oil stocks like sun or are within their usual range like oil is still priced at 90$.

#147 Edward on 02.10.15 at 9:50 am

“RBC economists say they are forecasting a big drop in residential construction in Alberta and a plunge in retail sales. As far as housing goes, the bank says the real pain will come next year with “more significant price declines.”
———–
The RBC report I read said that Calgary home sales will be down 16% but prices flat, only down .5%.

Ontario homes prices will be up 4.7% and BC home prices up 10.7% this year. Since we’re quoting RBC reports.

http://business.financialpost.com/2015/02/09/alberta-home-resales-to-slide-16-rbc-says/

#148 RM on 02.10.15 at 9:52 am

In Calgary at 26 St and Elbow Dr. SW., very nice and aspirational area. I saw 4 weeks ago 1 house for sale, then a week after, the next house, then the next house. In one block there are 4 houses for sale and now even the cars parked in front has “For Sale” signs. Not good.

#149 OMG on 02.10.15 at 10:00 am

#85 Smoking Man on 02.09.15 at 9:48 pm
#82 Ron on 02.09.15 at 9:41 pm
Smoking Man,

Still big on Bombardier? I’m jumping in on your guidance.

Ron
…………………………………
Dude I’m a drunkin idiot who thinks he’s an Alien from Nictonite, are you sure?

……………………………………………………………
Are you sure you are from Nictonite?
After claiming he is an extraterrestrial from the planet ‘K-PAX’, 1,000 light years away in the Lyra constellation, he is a prot who is committed to the Psychiatric Institute of Manhattan.
https://www.youtube.com/watch?v=ryBxYXeu55k

#150 Not a Realtor on 02.10.15 at 10:01 am

CMHC is also reporting a fairly major slowdown in sales for Calgary residential real estate. But they say prices will still increase about 1.6% this year and next as well.

http://calgaryherald.com/business/real-estate/cmhc-forecasting-house-price-growth-in-calgary

#151 Julia on 02.10.15 at 10:04 am

Harper should have listened to you and diversified Canada’s portfolio. Perfect example of the risk of putting all your eggs in one basket. Duh!

#152 Rob on 02.10.15 at 10:08 am

#141, If oil did hit 20 it would mean Alberta real estate would get hit big time. Many people will be moving to Toronto for jobs. Ontario will benefit greatly from lower oil prices both in the manufacturing sector and the consumer at the gas pump. US meltdown in real estate didn’t hurt Toronto. Neither did 911. As far as the foreigners being down 20% on the currency well in that case I doubt very much they will be selling at a big loss. I just do the opposite of this blog. So many Debbie Downers predicting gloom and doom. Very sad actually. Look at your track record. Even more pathetic.

#153 Ollie on 02.10.15 at 10:15 am

The whiff of incredibility associated with 20 bucks oil comes from our conditioning that money is something absolute. It’s not that you can buy a barrel with $20 but that your barrel is getting you only $20. Meaning, the bucks are scarce. If that is happening it means the last thing you wanna buy with the few 20 bucks you have left in your pocket is some slicky stuff.

#154 down and out on 02.10.15 at 10:17 am

#107 :drive the TransCanada many triple trailers with warnings on last trailer saying 117 feet long .They have a marshaling area outside Winnipeg and near Regina .Passing a double is nerving enough a triple sobering . Loblaws seems to be biggest user.

#155 Edith on 02.10.15 at 10:22 am

Most Canadian Bank Economists are now predicting another quarter point drop in interest rates in March. Just in time for the Spring real estate season.

Maybe bad for the Loonie but “unambiguously” positive for housing, especially Vancouver and Toronto.

Unambiguously seems to be the new overused word by Central Bankers, Finance Ministers, Forecasters, and Economists… So, I thought I’d use it too.

#156 maxx on 02.10.15 at 10:36 am

#3 Mad Vlad on 02.09.15 at 6:11 pm

“Alaska here we come…. !

http://calgaryherald.com/business/energy/alberta-looks-to-alaska-for-new-pipeline-as-keystone-xl-delays-continue

He-he….good luck……..

#157 Mark on 02.10.15 at 10:36 am

“Maybe bad for the Loonie but “unambiguously” positive for housing, especially Vancouver and Toronto”

No, not ‘unambiguously’ positive for housing at all. In fact, quite negative for housing as it implies that income to service housing debt is probably stagnant, if not falling. Vancouver/Toronto RE prices have been falling for the past 2 years almost, so claims that interest rate ‘drops’ (which aren’t even, for the most part, being passed onto retail borrowers on account of credit-worthiness concerns) would improve the markets there need to be taken with a grain of salt.

The RE pumpers can’t even get things right. First, they claim that all-cash purchases from abroad are pumping up the market. When in fact there’s no evidence of cash in any relevant quantities even being injected from foreign sources. And now they seem to be confused as to the state of the market in those two cities. But remember, we’re talking about the same RE pumper crowd who honestly believes there’s some sort of ‘land shortage’ in the GVR region, which is a myth that’s fortunately very easy to put to rest just by looking at a map or taking a flight in the area.

#158 Jimbo on 02.10.15 at 10:41 am

#77 lala on 02.09.15 at 9:09 pm

I couldn’t have said better myself. My house in Greece is 30 meters from the beach and go there yearly. Although they might not have much money, the people are happier and they do enjoy the simple things in life and take pride in their appearance.

As I cycled to one of the peaks of Mt. Taygetos, I had a little old lady offer me a Greek coffee.

Best coffee I’ve ever had.

#159 rosie "moving forward" in the knowledge that, "this won't end well" on 02.10.15 at 10:49 am

Nasty looking forecast.

http://www.bmonesbittburns.com/economics/amcharts/feb1015.pdf

#160 Alex on 02.10.15 at 10:59 am

There are very VERY few things that I know with absolute certainty and one is that oil will NEVER be $20. Comments like that are published for the naive … So that they can be herded like sheeple to run in a particular direction.

Baaaaa Baaaaa

#161 Ralph Cramdown on 02.10.15 at 11:10 am

#152 Rob — “If oil did hit 20 it would mean Alberta real estate would get hit big time. Many people will be moving to Toronto for jobs. Ontario will benefit greatly from lower oil prices both in the manufacturing sector and the consumer at the gas pump.”

I find it strange that so many (professionals as well as amateurs) seem unable to think through the impact of recent events on Ontario’s manufacturing sector.

Take Rob here, for example. He says low oil prices will benefit Ontario’s manufacturing sector. How? It doesn’t improve our competitive advantage relative to anywhere else. If anything, it improves the competitive advantage of manufacturers which are far away from their main markets and spend more on shipping.

What about our low dollar? A factory isn’t like an oil well, where you truck in a rig from wherever and three months later, you’re producing at full capacity. Nobody’s going to start relocating auto assembly or parts plants from Mexico or US right-to-work states just because our Dollar has been low for six months. I was just reading a paper on the weekend suggesting that it takes 12-24 months for a currency depreciation to flow through to exports. Oops — it could be a LONG couple of years.

#162 Victor V on 02.10.15 at 11:17 am

#146 Duncan herbert on 02.10.15 at 9:45 am
the reason there is no panic in the real estate in calgary is that the drop in oil prices has not hit the stock market. Hell, even the oil stocks like sun or are within their usual range like oil is still priced at 90$.

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

The energy index is down 25% in less than 6 months.

https://ca.finance.yahoo.com/q/bc?s=XEG.TO&t=6m&l=on&z=l&q=l&c=

#163 Victor V on 02.10.15 at 11:19 am

http://www.theglobeandmail.com/report-on-business/top-business-stories/iea-sees-end-to-oil-rout-but-warns-of-blow-to-canada/article22887164/

A major international energy group is forecasting the bottom of the oil rout, but warns that Canada will feel the pinch.

Oil output in Canada will continue to increase, the International Energy Agency said today, and money already earmarked for near-term projects will still be spent.

But new projects probably won’t get the go-ahead or will likely be stalled, the Paris-based advisory group said in its lengthy Medium-Term Market Report, which forecasts development out to 2020.

This will, of course, hit the province of Alberta, home to Canada’s oil industry, which is already forecast to suffer slower economic growth, and possibly a recession, and sharply higher unemployment.

#164 Bob on 02.10.15 at 11:22 am

Oh good…now we in Alberta can get transfer payments from the other provinces instead of the other way around. Good times.

#165 Victor V on 02.10.15 at 11:24 am

http://business.financialpost.com/2015/02/10/tumbling-canadian-dollar-blame-the-economy-not-the-bank-of-canada-says-stephen-poloz/

Bank of Canada Governor Stephen Poloz rejected speculation that he’s trying to boost growth by weakening the Canadian dollar, saying the currency’s decline reflects a deterioration in the economy’s outlook.

“I honestly reject the notion that I’m talking down the dollar,” Mr. Poloz told reporters in Istanbul, where he’s attending a meeting of finance chiefs from the Group of 20. “It’s not about what we did. It’s about how the economy has behaved.”

Mr. Poloz said that since he was appointed in June 2013, the economy has performed below policy makers’ expectations even before the decline in oil prices.

“It’s only by being open about that and people seeing it happening and oil prices declining on top of that that the dollar has moved,” Mr. Poloz said. “The oil-price move, my goodness, oil prices have got to be responsible for 99% of what we’ve seen.”

#166 Doug, in Timmins back in 1998 on 02.10.15 at 11:37 am

Wow, what the hell happened? I thought it was 2015 and was in Thailand and suddenly I find myself back in Timmins in June 1998. Hey, I just heard a good song on the radio, Lucky Man by The Verve, for the first time and just got my developed pictures back from the trip to Ishpatina Ridge (the highest point in Ontario) that I made in May 1998. Remember, I don’t have a digital camera yet. I just heard on the news the last of of the damage from the ice storm earlier this year has been repaired. How did I get here? When I read all that talk about oil going to $20 the time tunnel ruthlessly and mercilessly sucked me right in and shot me back to June 1998 when the ‘experts’ said oil (about $11 per barrel at the time) could go to $5 per barrel because there is so much surplus oil sloshing around in the world. Oh, by the way, I am writing this note from a computer in the Timmins Public Library (the old location at Algonquin and Pine) because I don’t have my own computer yet and won’t until 2001. Say, what’s that funny looking screw cap on the back of my 1987 Plymouth Caravelle? Gasoline fuel goes in there you say? Maybe there’s a future for oil after all.

#167 Bottoms_Up on 02.10.15 at 11:39 am

#153 Ollie on 02.10.15 at 10:15 am
——————————————
No, you are only looking at the ‘demand’ side of the equation. The ‘supply’ side is that the world is awash in oil.

The big picture on money is that there’s too much of it out there, hence the low interest rates (creditors are trying to get you to take as much of it as you can).

#168 Holy Crap Wheres The Tylenol on 02.10.15 at 11:52 am

#136 Bob the Nark on 02.10.15 at 6:55 am

“Some quick reading reveals that there is enough potential wind power in America to fulfill 10x it’s energy needs. Add solar and Elon the gigaman I’m thinking electric cars ruling in less than 10 years.”

Bwahahahahahahahahahaahahah….reading what….the green blob daily worker? The windmills in Ontario cost the taxpayer billions in subsidies every year. “Energy Poverty” is the new word in the Ontario consumers lexicon.
____________________________________________

Yes both Washington and Ottawa have soooooooo muchhhhh air blowing they could easily sustain our energy requirements for millennia!

#169 Holy Crap Wheres The Tylenol on 02.10.15 at 11:53 am

Mouse = world oil producers
CAT = Saudi Arabia

#170 Ex-Cowtown on 02.10.15 at 11:57 am

118 Obvious Truth on 02.09.15 at 11:52 pm
Oil is a dinosaur now. Or is a dinosaur oil. $20 might be too much.

My recent driving in Ontario only solidified the view that alternative energy is now the marginal barrel of oil.

Why pull that dirty stuff out of the ground when large beautiful wind turbines can do the job. Cleaner and cheaper. And closer to end users.

Some quick reading reveals that there is enough potential wind power in America to fulfill 10x it’s energy needs. Add solar and Elon the gigaman I’m thinking electric cars ruling in less than 10 years.

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

Too bad the real world doesn’t back up your pie-in-the sky, unicorn-farting-skittles claims. Germany has found that wind power is 16X more expensive than gas fired generation, which is bad enough, but the death-blow is that it is completely and utterly unable to deliver a static baseload. This means that there is no reliability; everything is constantly and randomly turning off and on. Imagine having open heart surgery and all the lights go off and the heart lung machine stops. That is the reality of what you are dreaming of.

Potential means nothing. How much is useable is the issue, and in wind powers case, it destroys grid reliability, making it a parasite on the system, not an asset.

Oh, BTW, I’m invested in some wind power projects in ON. As soon as I get the inkling that the ON government is starting to wake up to reality, I’m dumping my investments. The only thing that keeps me interested is MASSIVE GOVERNMENT SUBSIDIES. Without that, I’m gone.

#171 Bobby on 02.10.15 at 11:58 am

For #108 Waterloo Resident,

It’s not called inflation, but desperation. I doubt the dealer will give him just cash. Rather, it is a prospective trade in value for a newer vehicle. The 2015’s are out but still lots of 2014’s on the lots. Wow, Canadians can easily be suckered, no wonder they are mired in debt!

#172 Holy Crap Wheres The Tylenol on 02.10.15 at 12:03 pm

Listed the home in Oakville, wife wants Bahamas or the keys in the winter. Keys are running just under $1M for a home near the water, insane! I’m thinking smaller town-home in the Bahamas and rental town-home here until I permanently retire. I can deal with renting here as there is always choices while I am in unfamiliar territory down south not knowing what is a good area and such. I want to own one property only. Son number 3 is leaving his firm to come take over the company. This may take me a year to do but come next snowfall near Dec I should be sitting with my feet in the sand! Or buried in the sand!

#173 Holy Crap Wheres The Tylenol on 02.10.15 at 12:07 pm

Just talked with a friend in the oil patch down in Houston! We are about to fill all of the storage reservoirs for all of the oil we have in about 9 weeks. That is the magic number guys, nine weeks will tell if someone blinked or we all go to the wall. Interest rate will go north or south. Oh how the banks must be shitting themselves. The unknown!

#174 kothar on 02.10.15 at 12:24 pm

Poloz says he didn’t target cdn dollar. He is a liar.

#175 Mister Obvious on 02.10.15 at 12:29 pm

#134 theAwakenedOne

“(guess who hid inside a dark & dusty broom closet while bullets were flying… S**it, I surely wasn’t prepared to acknowledge or believe this as a Canadian)”
————————–

I have no trouble believing it. To be honest, I would have been in there with him. And I don’t even like him all that much.

#176 Bottoms_Up on 02.10.15 at 12:30 pm

#99 SWL1976 on 02.09.15 at 10:30 pm
——————————————-
I think you’re a little off base on this one.

“a single shock” will NOT shake confidence in the US dollar.

Conversely, we have witnessed a shock (2008 downturn), and what happened? People fled TO the US dollar.

There’s a reason why Russian mortgages are based in US dollars.

It is as good as gold. (apologies for the pun)

#177 Faja Joe on 02.10.15 at 12:31 pm

Markets in general all behave the same. Oil, U.S. real estate and stocks in 2007, the 2000 .com frenzy, Canadian real estate (soon), and many others.

THEY TAKE THE STAIRS UP, AND THE ELEVATOR DOWN.

#178 Marco on 02.10.15 at 12:33 pm

Baltic Dry Index.

http://business.financialpost.com/2015/02/09/the-shipping-news-brutal-as-per-usual/

#179 Shane on 02.10.15 at 12:34 pm

After rate go down and oil go to 20 will Bank and Canada pay down my mortgage to stop financial problems in Canada. It is democracy.

Shane

#180 JimH on 02.10.15 at 12:42 pm

#99 SLW1976
“…The US dollar is backed by nothing more than confidence… all it will take is one shock, a single catalyst to rattle that confidence. Look at all the countries in the world now trying to do business without the USD as the reserve currency. They are preparing for the inevitable.

Now what happens when the supply of all this recently printed money is way way up and the demand suddenly falls off a cliff?”
================================

What a pile of rubbish! You over dramatize and grossly overstate the 2 separate issues above.

First, about the USA and world reserve currency. Yes, the greenback will not remain as the world’s reserve currency forever.
No, a shift to another currency will NOT result in the end of life as we know it. Read some history!

1450-1530 Portugal = global reserve currency; 80yrs;
1530-1640 Spain; 110 yrs;
1640-1720 Netherlands; 80 yrs;
1720-1815 France; 95 yrs;
1815-1920 Britain; 105 yrs;
1920-present; USA 94yrs???

None of these transitions resulted in the demise/collapse/total destruction of any existing economies!

You also seem to be laboring under the illusion that there is only one currency used for global trade and exchange! This is totally absurd, as virtually ALL countries hold substantial reserves of other currencies and have ALWAYS done so and have ALWAYS used them when time and circumstance warrants! There is nothing ‘new’ about this!

You make the silly assertion that “The US dollar is backed by nothing more than confidence”. Wow! And what, exactly, do you suppose ‘confidence’ is based on? You seem to imply that ‘confidence’ is meaningless?

You also display ignorance about the nature of QE, and insist on calling it ‘money-printing’, which, of course, it is not.

QE was am asset swap, whereby the US Fed exchanged bonds for reserves. Had there been the trillions of dollars of newly printed greenbacks injected into the system, you and the doomers would have been right to expect massive, runaway inflation and the price of gold would have shot through the roof.

As you can see, this didn’t happen. It didn’t happen because an asset swap is NOT the same thing as ‘printing money’.

Finally, there is a huge dollop of anti-American bile in your rant. Perhaps you should pause and reflect on just how different life in your tiny corner of the world would be had Canada had to cope with a different neighbor on the south side of the 49th parallel; say North Korea, the old Soviet Union, China to name a few examples.

Canada has had it very soft indeed.

#181 Obvious Truth on 02.10.15 at 12:42 pm

Still lots of hopefuls and debators on oil, housing and Canada’s regional fate.

It’s hilarious. How long till everyone sees the obvious. Even our money boss poloz is telling you it’s bad. These guys don’t normally do that.

Canada has one currency and by and large the same fate throughout.

#182 Bottoms_Up on 02.10.15 at 12:43 pm

#28 frank le skank on 02.09.15 at 6:48 pm
———————————————
How to tell someone’s not from Toronto: they use the term ‘centre of the universe’.

Frank it is OK to be envious…it is, after all, the best place in the world to live.

#183 Mike on 02.10.15 at 12:44 pm

This blog needs more anecdotal posts like #82 Another Albertans instead of all the USELESS BS rambling of a lot of these posters. So thank you Another Albertan.

I’m yet another albertan, and as I said late yesterday, the manufacturing company I work for in Edmonton just laid off 25% of our shop floor work force yesterday, and this is in addition to not rehiring 50% of our office staff that have left for various reasons. We’re small potatos in the grand scheme of things but it’s started to happen.

#184 cramar on 02.10.15 at 12:50 pm

#107 Andrew Woburn

“It might take 20 years to lose all truck drivers but we will see them start disappearing very soon.”

———–

Interesting you should post this. Just noted this yesterday. America has become a nation of truck drivers. IF someone comes up with a technology to automate this, there goes the largest numbers of high-paying jobs in a service-based economy.

http://www.marketwatch.com/story/keep-on-truckin-in-a-majority-of-states-its-the-most-popular-job-2015-02-09

And what is Apple now up to? Humm!

#185 JMJ on 02.10.15 at 1:03 pm

Once fear is in the bloodstream of Albertans… And other Canadians…

Companies will downsize. Layoff staff. Cut departments. Outsource what they can cheap, as those who are in the outsource business will also feel the pinch and do the jobs for much less… It’s a spiral downwards everyone can post about, joke about, comment about…

But if it spirals swiftly, like a whirlpool… You’ll have a lot of E/I claims, a lot of unemployed, a lot of bankruptcy, and a domino effect of job loss in multiple/myriad industries.

We can have a good laugh here about this, but it will impact all of us, no matter how good are portfolios look. It’s no laughing matter. The EU is about to break apart, as well. Watch what happens with Greece. Anyone who thought are trade agreement with the EU would help our economy doesn’t is not paying attention, and hasn’t a clue as to what’s really happening on the ground, across the continent, with the “common man”.

#186 Alex N Calgary on 02.10.15 at 1:08 pm

On the hunt for a new rental, been to 7 houses so far, all but 1 were empty, unheard of here in calgary the last 5 years I’ve been looking at rentals. There is the whiff of desperation to have us rent their place, its clear. We’re going to look at a house with a crazy good location tonight, that would never have come up before.

Is it so complicated in oil? Production is way over consumption, its that simple. The US is reaching capacity on storage, so where is that oil going to go exactly? People here are optimistic about oil prices coming back quickly as the alternative is too depressing to consider. Loose job, loose house, there is not the concieving of going to Zero income with no jobs around at all, which is happening.

Construction is going to halt soon, if not already, those jobs are toast, the layoffs are in phase 1 right now, its not the end of drilling season yet. Its going to be slash-central at even 50$ bbl oil come end of march\april.

I don’t like being negative either as I work at oil and gas and am at serious concern of loosing my job too, things will get tight even with my wifes solid city job but just because reality is unpleasent doesn’t mean we should ignore it.

Then again, if you can’t do anything about it, maybe ignoring reality for a while isn’t the worse thing? Lots of dumb people who want to get rich quick here in AB, who are good people are going to suffer, I am not looking forward to that :( even if it means I can finally get an affordable house.

#187 SWL1976 on 02.10.15 at 1:10 pm

#152 Rob

So many Debbie Downers predicting gloom and doom. Very sad actually. Look at your track record. Even more pathetic.

—————————————–

I’m all for postive solutions to real world problems that are happening right now. I would love to be part of something more, something great, a monumental shift in the direction we are heading as a whole. Remember we are all in this together.

For one to find a solutions to a problem we first must acknowledge that we do in fact have a problem. Kicking the can down the road with the blinders on has got us here and I don’t see how more of the same will solve any problems.

Yeah news is a bummer right now, just don’t blame the messengers

#188 For those about to flop... on 02.10.15 at 1:15 pm

SWL1976
I wasn’t really chirping you, just pointing out a major error.
Anyway you worked it out in the end ,and I hope you have a good day.

#189 Spectacle on 02.10.15 at 1:27 pm

General reply to :

#93 H on 02.09.15 at 10:08 pm
Read below. As the talking heads say oil production continued to rise. Really? Rig counts (front end) have been tanking for 4 months, now the production drop is starting. By the time the average public cues in the real money will be made:

But it may be an early warning for rail companies such as CSX, BNSF and Union Pacific…….

Monthly lease rates for the most common of oil rail cars fell to $1,300 late last month from a high of $2,450 about year earlier, according to data obtained by Reuters from energy industry intelligence service Genscape.

The rates for cars, used to transport more than half of North Dakota’s crude, are at their lowest in about three years, said Tom Williamson, owner of Transportation Consultants.

“It wasn’t that long ago that you couldn’t find a car to lease, now I’m getting calls from brokers offering the cars,” he said, adding that he has received offers for 1,500 cars since late October.

…and….

#67 Anything you can do … on 02.09.15 at 8:33 pm
Those who think housing markets take endless months, or even years, to turn are wrong.
– Garth
=================

This quote by Rudi Dornbusch generalises Garth’s comment: “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”

Meanwhile, back in Australia: Perth = Calgary, and Sydney/Melbourne = Vancouver/Toronto.

Perth is rolling over slowly, as Western Australia’s iron ore = Alberta’s oil/gas.
************************

And that’s how to post ! Thanks guys/gals for this reality rebuttal. It’s why Mr Turner permits us all to post to his blog.

Greatly Appreciated!

#190 Ogopogo on 02.10.15 at 1:27 pm

#122 debtified on 02.10.15 at 12:25 am
Here’s a balanced analysis of Rent vs Buy from The Globe & Mail. Garth has attempted to make a similar point, several times, but this one is an illustrated video so, for some people, it might be easier to understand. It’s 8.5 minutes long and worth it! Enjoy!

http://goo.gl/4Ve2Iq

I thought this would be a good video to forward to house-horny friends, but alas it falls short of ideal. There are a number of fallacies, but I’ll just point out the two most egregious:

1) Assumes interest rates will be 3% for 25 years
2) Assumes renter will invest nothing in a TFSA

Correct these two factors alone and renting is a MUCH better proposition. Factor in all the errors and you’re laughing all the way to the online brokerage compared to your housing cultist friends.

#191 Mike S on 02.10.15 at 1:44 pm

“Many people will be moving to Toronto for jobs. Ontario will benefit greatly from lower oil prices both in the manufacturing sector and the consumer at the gas pump. ”

Are you kidding? With all the job loses in the manufacturing sector and the retail sectors recently?

Maybe you should go and check how many jobs were created in Ontario in the past 12 months?

Just wait till the Banks start their layoffs and Ontario government would be forced to tighten the belt, then let’s talk about these jobs …

—————-

Provided the CAD will be down the manufacturing sector will grow at some very distant future, but this will be post the housing crush

#192 Victor V on 02.10.15 at 1:44 pm

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/attack-your-household-debt-before-the-damage-compounds/article22882763/

Listen to these voices if you think high personal-debt levels in Canada are nothing to bother about.

“Our debt is a black cloud hanging over us,” an applicant to our Globe and Mail financial boot camp wrote us (check it out here). Another wrote: “We have had [debt] for so long, we have become numb to it.” Other boot camp applicants said debt is preventing them from buying a house, helping their kids, saving for retirement and fulfilling ambitions such as travelling. “Being in debt is holding me back from so many great opportunities,” one young woman wrote.

Economists use data on incomes and borrowing to analyze debt trends, whereas we heard directly from debtors. We casually announced our boot camp a few months ago on social media and received hundreds of responses in a flash. The issue raised by most people by far was debt. Over and over, people told us about their overspending, their impulse buying and their lack of financial discipline.

#193 TurnerNation on 02.10.15 at 1:47 pm

TLT.US chart (Bonds) looking like Oil’s lately…sickening plunge.

For the yield hounds, my TSFA contri this year been buying CCI.UN (I follow lots of debentures anyway) and PGI.UN at their recent lows.
I call them ‘fallen angels’. Keep an eye on stop levels but so far ok

#194 Mike S on 02.10.15 at 1:50 pm

“Most Canadian Bank Economists are now predicting another quarter point drop in interest rates in March. Just in time for the Spring real estate season.

Maybe bad for the Loonie but “unambiguously” positive for housing, especially Vancouver and Toronto.”

Sure let’s have it …

Do you think it is going to be Vancouver that falls first or Toronto?

Just waiting for people to start the using that phrase for a single city. Like “yeah it is bad everywhere but is on fire”

Maybe we can place bets on it in this blogs?

#195 Mike in Toronto on 02.10.15 at 1:59 pm

Looks like it’s time to change the rules:

http://in.reuters.com/article/2015/02/10/g20-meeting-poloz-inflation-idINL1N0VK14Z20150210

Maybe the new indicator can be a function of the election year, tempered by the approval rating and probability of majority.

#196 Mike S on 02.10.15 at 2:02 pm

Rob,

Look here:
http://www.statcan.gc.ca/daily-quotidien/150206/t150206a003-eng.htm

Ontario Jan 2014-Jan 2015

Labor force: +1.7K
Full time jobs: -19K

We are on fire!

#197 Holy Crap Whers The Tylenol on 02.10.15 at 2:04 pm

Say it aint so Joe, I mean Stephan!

http://www.cbc.ca/news/business/falling-dollar-stephen-poloz-tells-g20-he-isn-t-trying-to-talk-loonie-down-1.2951683

#198 Holy Crap Whers The Tylenol on 02.10.15 at 2:17 pm

So back to politics.
It appears that Eve Adams crossed the floor yesterday. Ahhh poor girl is having a pity party. Since Stephan H didn’t help her in her bid in the conservative riding of Oakville-North Burlington and she was disqualified with Natalia Lishchyna what was a girl to do? She got out of the race before the poop hit the fan due to health reasons apparently. Apparently she had a concussion, apparently? So WTF is she doing running for the Liberals? Hell if is she is that sick the Liberals can have her! Something smells fishy here Eve, oh yes due to the fact she was going to be disqualified she wouldn’t have been able to get her severance pay. Ohhhh so that’s how its done! Well good luck Justin, I’m glad you welcomed this apparently unhealthy politician into your adoring arms.
And that my friends is politics!

#199 Kris on 02.10.15 at 2:39 pm

Fundamental difference between Amer & Cdn housing – Our mortgages weren’t cut up into little pieces and sold as high leverage investments by Bay St.

Indebtedness of BANKS made the US scenario a true “house of cards”. In Canada we’re indebted as INDIVIDUALS but our banks are well-protected (courtesy of CMHC).

Of course, oil patch malaise will affect individuals. But for it to have a domino effect like in the US, we’d need to see country-wide slowdowns as in Alberta. Is that likely? Nope.

Cdn housing will slow.. I hope! But allusions to US housing are false comfort – Ours is a different beast – Individual debt, not financial-system-debt.

#200 Nemesis on 02.10.15 at 2:39 pm

#Cat&Mouse…

[SCMP] – ‘Don’t lie about your assets’, China’s anti-corruption agency warns officials

http://www.scmp.com/news/china/article/1709166/chinese-anti-corruption-agency-warns-government-officials-dont-lie-about

#GuangDongStyle…

[SCMP] – Officials unable to explain assets worth ‘hundreds of millions of yuan’

#SwissCheese…

[Guardian] – Cash pilgrims and bricks of money: HSBC Swiss bank operated like cash machine for rich clients

http://www.theguardian.com/business/2015/feb/09/hsbc-files-swiss-bank-cash-machine-rich-clients

#FinancialTherapists?… #Or,WaterboardingYourWayToWealth?…

[NYT] – Stressed by Money? Get on the Couch

http://nyti.ms/1Fq3hMl

#XFilesQuoteOfTheDay…

“To this day, it saddens me so much when I go to Vancouver that people want to talk to me about the weather, which is the most uninteresting thing in the world.” – David Duchovny

[Salon] – David Duchovny on his madcap fairy tale “Holy Cow”: We talked to the actor about the “X-Files'” return, becoming a novelist and what he really thinks about Vancouver

http://tinyurl.com/nnvab4g

#ForTheEmpiricallyMinded… #ActualYVRWeather:

http://www.vancam.ca/

#201 Oil Is Sticky on 02.10.15 at 2:48 pm

http://www.cnet.com/news/samsung-smart-tv-raises-spying-privacy-fears/

So there is a cockroach rule. When you see one….there are always many more. Blogs like this called people conspiracy theorists and tin foilers in the not so distance past. Really?

It seems like 2015 is going to be an interesting year for the “truth” movement. What is interesting is not that the truth will be revealed, but what the sheeple will do when they find out the truth about corporations and govt. In Canada? Probably nothing.

#202 davikk on 02.10.15 at 2:56 pm

Canada’s housing market is 63% overvalued relative to its historical average… Median house price to median household income is higher in Vancouver than it is in Sydney, London, and New York…Workers are twice as reliant on housing construction…

http://investmentwatchblog.com/canadas-housing-market-is-63-overvalued-relative-to-its-historical-average-median-house-price-to-median-household-income-is-higher-in-vancouver-than-it-is-in-sydney-london-and-new/

#203 Nerf Herder on 02.10.15 at 3:22 pm

#125 Zen

You are exactly right Zen. I’ve been trying to ascertain where the crowd is heading next, or is it simply too early to tell?

I know Garth says long term, balanced and diversified…. BUT, why not make a shift if you are savvy enough to spot it?? Amiright?

#204 Mr Stats on 02.10.15 at 3:27 pm

The same group we referenced here (McKinsey) a few days back said housing way overvalued.

Now a new report from them says no retirement crisis.

??

Also, StatsCan has confirmed that TFW and IMP jobs are counted in new job creation numbers. The new Express Entry will also be included.

Do the Math!

Not many jobs being created hence the participation rate stuck.

Lets not play with stats. tell it like it is.

#205 fancy_pants on 02.10.15 at 3:44 pm

No kidding eh? It’s like stepping out from an office building to advise everyone outside that it is raining.

http://www.torontosun.com/2015/02/10/canadas-economy-not-reaching-potential-bank-of-canada-bureaucrat

#206 TurnerNation on 02.10.15 at 4:11 pm

Symptom of a Down: Dollarama stock price is back at all time highs.

#207 aL pacino on 02.10.15 at 4:24 pm

I know of a Royal Pacific realturd who scammed a seller out of a $100,000 on top of his regular commission and his punishment was………can you guys guess…..
He was suspended for 2 weeks,had to take two courses on ethics and had to return the 100 geez back to the vendor…….LOL

Oh Canaduh…….

#208 meslippery on 02.10.15 at 4:24 pm

Renting?
If your a smoking man with a dog landlords don,t want you.

#209 edmontonian on 02.10.15 at 4:25 pm

We’re looking at a huge spin-down in Alberta, starting with Luxury Vehicle sales, and trickling into the housing Market by spring I suspect. My friend just bought a loaded Landcover, mint condition for $20,000 many were listed on Kijiji still for close to the $30,000 range of the same model, I saw a Lexus IS250 with only 70,000 kms for $21,000 many were listing for $30,000 for that year. The bible is bursting bad, we’ve gone form a waiting list in the high-rise I live in to several DOZEN empty suites. This won’t end well. Thanks for the warning Garth, the writing was on the wall but everyone has their blinders on.

#210 SWL1976 on 02.10.15 at 4:56 pm

#180 JimH – I don’t think what I said was rubbish, it’s just my opinion as yours is yours. I am not anti-American, they are great people mislead by government. I believe the vast majority of the people on this planet are good people even the people we are tought to fear and hate. They are good people, they are just a product of their environment. Good people under evil leadership can be ordered to do terible things, this has also been proven throughout history

Yes I realize that I live in a small corner of the world and this was made apparent to me last night when crunching the numbers of the people on this planet. I love the intentions the founding fathers had for America, but that system was hijacked long ago

There is a reason America is militarzing their police force, they are preparing for civil unrest, they are preparing for chaos and collapse, the take down of America happened from within and we up here in Canada are in the same boat my friend

I would love to here some good news about how our leaders and nations are coming together to clean up the environment, to figure out what to do about fukushima, reduce pollution, to bring back the middle class, but I fear we are going in the opposite direction

From chaos comes order and global chaos will bring a new world order.

That’s the plan and it is most certainally evil and its no big secret anymore

#211 devore on 02.10.15 at 5:02 pm

#72 Mark

Lower rates doesn’t mean you are repaying debt with more valuable money. Lower rates does does not mean money is getting more valuable. It’s just getting less valuable, at a slower rate. I don’t understand your continuing assertions regarding this.

#212 Vamanos Pest on 02.10.15 at 5:08 pm

#190 Ogopogo

Agreed. While I think it’s fair to allow for an assumption here and there when making a 25 year prediction, to assume 3% interest rates over the amortization of the mortgage is silly.

The structure of the argument is sound, but the assumptions of 3% mortgage rates for the next quarter century undermines the entire analysis.

Also, I don’t live in Toronto, but in my market, no way a 500k house gets 2100/month in the rental market. Maybe, MAYBE 1800, but I honestly think more like 1650. This also greatly influences the outcome of the resulting calculations.

#213 Whinepegger on 02.10.15 at 5:14 pm

I smile when I read all the comments about the highs and lows of oil prices. The herd does not see the real tsunami coming and will be overwhelmed by it. What tsunami? The one that makes oil obsolete. You think I’m a fringer that may have toked one too many? I’m not the only one thinking this way. Allow me to illustrate.

Were you aware that in 2014 every Norwegian citizen became a crown millionaire because of their rainy day fund that has been established as a result of their oil industry? http://www.reuters.com/article/2014/01/08/us-norway-millionaires-idUSBREA0710U20140108

And are Norwegians concerned about where the price of oil is going? You bet! But not for the reasons we Canadians are. They are seriously looking at the future and the ramifications when LENR (cold fusion) overwhelms the world. Oil’s done in the not too distant future and Canada is in for dark times.
http://www.e-catworld.com/2015/02/06/cold-fusion-if-this-is-true-the-oil-becomes-worthless-norwegian-tu-magazine/
A functioning 1MW plant is already up and running and a company called Industrial Heat has bought the rights to the technology and is already in the process of determining the best way to mass market the product. A little research will show you that Blackrock, Bill Gates and others are investing in this form of energy and will be in on the ground floor. Canada? Just grounded.

#214 LTL_FTC on 02.10.15 at 5:24 pm

http://www.cbc.ca/news/business/retirement-on-track-for-83-of-canadians-mckinsey-survey-1.2951518?cmp=rss

So basically this report says that if you ate cat-food during your working years, you can comfortably expect to eat cat-food in retirement. That IS a relief!

#215 The World According to MARK on 02.10.15 at 5:27 pm

#157 Mark

“Vancouver/Toronto RE prices have been falling for the past 2 years”
—————-
Yet another made up piece of crap by Mark.

#216 Holy Batman on 02.10.15 at 5:35 pm

SWL1976 and Whinepegger.. please step away from the internet.. that is all.

#217 The World According to MARK on 02.10.15 at 5:38 pm

# 157 Mark

“We’re talking about the same RE pumper crowd who honestly believes there’s some sort of ‘land shortage’ in the GVR region, which is a myth that’s fortunately very easy to put to rest just by looking at a map or taking a flight in the area.”
——————
I guess you fly in and out of the Abottford airport. Not much land shortage out there and East.

Increasing density in Vancouver, West Vancouver, North Vancouver, Burnaby, Richmond, etc… Is the only way you’ll bring more affordable housing to Vancouver. Condominiumizing the area will lower the price of the avearge condominium, but it will only increase the price of Single Family homes of which the inventory is continuously shrinking.

#218 Sell the oil stocks! on 02.10.15 at 5:55 pm

#213 Whinepegger – cold enough in the peg is it.. slowed down the neurons… that’s the only thing cold.

“Andrea Rossi launched the first commercial E-Cat plant, a 1 MW thermal power plant in Bologna, Italy on October 28th, 2011 which was tested and certified as being acceptable by an agent for an unknown customer. Rossi has stated that the customer is a military entity that does not want to be identified.”

Looks like a website to market yoga pants….

#219 Mark on 02.10.15 at 5:57 pm

“Lower rates doesn’t mean you are repaying debt with more valuable money.”

That’s typically what it implies. If a lender is willing to accept a very low rate of interest (ie: let’s say, 0%), the lender believes that a return will be accorded on their money through appreciation in purchasing power.

For example, an investment at 0% is actually a very good return if the alternative is, for example, a GTA or GVR house depreciating at 5%/year.


Lower rates does does not mean money is getting more valuable. It’s just getting less valuable, at a slower rate. I don’t understand your continuing assertions regarding this.”

Well, high rate environments are those to be feared for cash savers/cash investors, as not only are such typically associated with a weakening in the value of the currency, but the government applies income tax to nominal, not real income.

“Yet another made up piece of crap by Mark.”

What an uncalled for cheap shot. You should apologize.

#220 Mark on 02.10.15 at 6:03 pm

“Increasing density in Vancouver, West Vancouver, North Vancouver, Burnaby, Richmond, etc… Is the only way you’ll bring more affordable housing to Vancouver. Condominiumizing the area will lower the price of the avearge condominium, but it will only increase the price of Single Family homes of which the inventory is continuously shrinking.”

Nope. Simply build on the abundance of farmland or light industrial in the GVR area. Build east of No. 6 road in Richmond north of the Westminster highway. Or in South Richmond. Build on the CMHC lands east of North Vancouver. Build in Link it all together with a reasonable mass transit system. Problem solved. 5 minutes on Google Maps will easily show you where there can be lots of building if legitimate market demand existed for such. Of course, there’s no demand since rents are reasonably affordable in the GVR, and the bubble is almost entirely finance-induced.

#221 Victor V on 02.10.15 at 6:08 pm

Halliburton cutting up to 8% of workforce amid oil collapse http://natpo.st/1zHRY1m

#222 Musty Basement Dweller on 02.10.15 at 6:59 pm

Having lived in the lower mainland all my life I say Mark is right on the money with his assessment of the RE market here. I haven’t bought into the common booolsh#t pumped by the cartel about the lack of land.. Etc

#223 Don't bet against the Skunkworks on 02.10.15 at 7:09 pm

Oil is dead.

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

Bitchez……

#224 For those about to flop... on 02.10.15 at 7:26 pm

Mark,I still think your crazy as a coconut but I do see the Canada line being extended to the tsawwassen ferry terminal with densification in south Richmond and throughout that corridor.
Might be in 20/30years though.

#225 The World According to MARK on 02.10.15 at 7:31 pm

#220 Mark

“Simply build on the abundance of farmland or light industrial in the GVR area. Build east of No. 6 road in Richmond north of the Westminster highway. Or in South Richmond. Build on the CMHC lands east of North Vancouver. Build in Link it all together with a reasonable mass transit system. Problem solved.”
—————-
Most of the land in Richmond that you talk about is Part of The Agricultural Land Reserve. Not a chance of rezoning that.

There is a huge push in Vancouver to protect what ever commercial and agricultural real estate they have left.

The CMHC lands east of Mt Seymour have effectively been down zoned by the District of North Vancouver to prevent any development. Anyway, most of the 640 acres are not developable because of terrain issues.

Developing a mass transit system is long term and very costly endeavor that is always many steps behind the need. Much of the funding for the lines currently being built were funded by the federal and provincial Gov’t. Something tells me future funding won’t be easy to get. And, as soon as mass transit is announced, the values of nearby land skyrocket. Check out what happened in Burnaby and the Cambie Street corridor.
———-
“Of course, there’s no demand since rents are reasonably affordable in the GVR”

Another piece of crap by Mark.

#226 Zen on 02.10.15 at 7:39 pm

#203 Nerf

Generally I agree with Garth and others in the mainstream asset management community and financial planning fields. A well diversified portfolio allows you to weather most any storm. But that approach makes a big assumption. It assumes the world we live in today is the same world our parents grew up in. The theory of the “properly diversified portfolio” is solely predicated on the assumption that we free markets. Unfortunately we don’t have free markets today, therefore I do not believe the markets are investable nor do I think the old rules apply.

I’m not trying to time the market … I think that’s a fools game … I’m out because the markets are rigged and there is no possible way to determine what the fair price of anything is anymore.

Today central planners in cooperation with federal agencies like the US Treasury and Plunge Protection team in partnership TBTF financial institutions, brazenly manipulate and rig the markets, thereby destroying the sanctity of them. They pervert the price discovery mechanism, have broken the discounting process and undermining the economic foundation of the country by destroying the free market which is no longer free or able to move without government intervention, thereby turning the markets into a corrupt state run casino.

The biggest problem we have today is peoples lifetime experience is no longer a reliable guide to the future. This is a moment in history when the things that have been true for our entire lifetimes may have ceased to be true.

#227 Victor V on 02.10.15 at 7:51 pm

Norway oil sector braces for 40,000 job cuts amid downturn

http://business.financialpost.com/2015/02/10/norway-oil-sector-braces-for-40000-job-cuts-amid-downturn/

#228 bdy sktrn on 02.10.15 at 8:12 pm

A functioning 1MW plant is already up and running and a company called Industrial Heat has bought the rights to the technology and is already in the process of determining the best way to mass market the product
——————————-
how can people KEEP getting fooled again and again?

don’t take my word for it – trust google.
after you tyep in”e cat is” google’s best comeback is “a hoax”

read a bit and don’t fall for scams… iter,NIF (livermore), Generalfusion.

#229 bdy sktrn on 02.10.15 at 8:28 pm

“Yet another made up piece of crap by Mark.”

What an uncalled for cheap shot. You should apologize.
——————————–
mark , i gave you lots of time to hear out you ideas but you are losing it today.

http://www.yattermatters.com/2015/02/vancouvers-east-side-hubbub/#more-38453

Eastvan detached
today 1.108M, 2 yrs ago .908M – 22% UP in the last 2 years.

that is 200k tax free. while i was out boating and golfing. when many SCREAMED to sell 2 years ago.

you know what else everyone said 2 yrs ago?
“Volume leads price” Seems they stopped saying that.
You better not scroll down in that link to see today’s volume (of listings) because it sure looks like a shortage to me.

#230 The Fuzzy Camel on 02.10.15 at 8:42 pm

Deflation is here, and at near 0% interest rates BoC is out of tools to fight it.

When real estate prices stop going up, investors will try to liquidate.

Guess what happens next?

#231 jess on 02.10.15 at 8:46 pm

who knew ?
http://www.theguardian.com/news/2015/feb/11/denials-continue-despite-mps-hearing-of-hsbc-tax

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/uc1371-iii/uc137101.htm
persian

He who knows not, and knows not that he knows not, is a fool; shun him.
He who knows not, and knows that he knows not, can be taught; teach him.
He who knows, and knows not that he knows, is asleep; wake him.
He who knows, and knows that he knows, is a prophet; follow him.

========
http://www.smh.com.au/world/chinese-billionaire-mining-tycoon-liu-han-is-executed-over-his-links-to-a-mafiastyle-gang-20150209-139w2z.html

#232 Cici on 02.10.15 at 8:46 pm

Where is Garth…I need a Greaterfool nightcap (Cici lets out an audible, melodramatic sigh).

Ollie, could you please break out another song to fill the miserable void and entertain us while we wait for the prophetic words of the great bearded one?

#233 Mr Stats on 02.10.15 at 9:18 pm

@Mark

Serious question. Do you even realize how delusional your posts are?

Especially yesterdays comment where you have no idea what the ALR in Vancouver is.

#234 Tony on 02.10.15 at 10:47 pm

Re: #63 nonplused on 02.09.15 at 8:11 pm

Wrong, after oil bottomed at just under 35 dollars a barrel it was manipulated upwards with zero fundamentals just like that phony stock market in America. Oil should have never traded higher than the 30 dollar U.S. range just like the stock market should still be trading at 1993 levels today.

#235 Don on 02.11.15 at 5:59 pm

#186 Alex N Calgary

I agree with you.

#236 Don on 02.11.15 at 6:00 pm

#185 JMJ on 02.10.15 at 1:03 pm

YUP! Nice to see some logical comments on here.

#237 Don on 02.11.15 at 6:03 pm

#179 Shane on 02.10.15 at 12:34 pm

After rate go down and oil go to 20 will Bank and Canada pay down my mortgage to stop financial problems in Canada. It is democracy.

Shane

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

Your are just joking right? If not – watch out for the blog dogs they will eat you alive with that comment.

YIKES!

#238 Don on 02.11.15 at 6:08 pm

#194 Mike S on 02.10.15 at 1:50 pm

“Most Canadian Bank Economists are now predicting another quarter point drop in interest rates in March. Just in time for the Spring real estate season.

Maybe bad for the Loonie but “unambiguously” positive for housing, especially Vancouver and Toronto.”

Sure let’s have it …

Do you think it is going to be Vancouver that falls first or Toronto?

Just waiting for people to start the using that phrase for a single city. Like “yeah it is bad everywhere but is on fire”

Maybe we can place bets on it in this blogs

************************
If Vancouver has a greater percentage of fly in / fly out laid off workers – it will be Vancouver first. They make enough to pay and support stupid prices on real estate and vehicles. Vancouver first – Toronto has a more diverse economy than Van – at least I believe at the moments. Just taking a gut feel here. China is slowly down – on an anti corruption (money) tangent. Most likely will have an affect confidence all around. Forest industry won’t help much at the moment we ship more raw logs then lumber. Such a shame!

#239 Don on 02.11.15 at 6:14 pm

#199 Kris on 02.10.15 at 2:39 pm

Fundamental difference between Amer & Cdn housing – Our mortgages weren’t cut up into little pieces and sold as high leverage investments by Bay St.

Indebtedness of BANKS made the US scenario a true “house of cards”. In Canada we’re indebted as INDIVIDUALS but our banks are well-protected (courtesy of CMHC).

Of course, oil patch malaise will affect individuals. But for it to have a domino effect like in the US, we’d need to see country-wide slowdowns as in Alberta. Is that likely? Nope.

Cdn housing will slow.. I hope! But allusions to US housing are false comfort – Ours is a different beast – Individual debt, not financial-system-debt

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

Too bad individuals won’t be able to handle their ongoing debt with loss of jobs. These people live in every community (fly in / fly out). It only takes a few to start the lack of confidence and forced sales game.

It is a catalyst – sure things will unfold differently the point is when consumers and homeowners are tapped out US or Canadian the slightest negative adjustments can initiate the downward trend. It is call a catalyst.

#240 Don on 02.11.15 at 6:17 pm

201 Oil Is Sticky on 02.10.15 at 2:48 pm

http://www.cnet.com/news/samsung-smart-tv-raises-spying-privacy-fears/

So there is a cockroach rule. When you see one….there are always many more. Blogs like this called people conspiracy theorists and tin foilers in the not so distance past. Really?

It seems like 2015 is going to be an interesting year for the “truth” movement. What is interesting is not that the truth will be revealed, but what the sheeple will do when they find out the truth about corporations and govt. In Canada? Probably nothing.
**************************

I informed my boss a while back at the possible consequences – needless to say she watches tv in bed….but is aware now.

#241 Don on 02.11.15 at 6:20 pm

#203 Nerf Herder on 02.10.15 at 3:22 pm

#125 Zen

You are exactly right Zen. I’ve been trying to ascertain where the crowd is heading next, or is it simply too early to tell?

I know Garth says long term, balanced and diversified…. BUT, why not make a shift if you are savvy enough to spot it?? Amiright?
**************************

I’m looking for places they can get instant gratification with little thought or work. Anti-aging products ??? and of course anti aging stocks. it is the boomers next worry.

#242 Don on 02.11.15 at 6:22 pm

#213 Whinepegger on 02.10.15 at 5:14 pm

I smile when I read all the comments about the highs and lows of oil prices. The herd does not see the real tsunami coming and will be overwhelmed by it. What tsunami? The one that makes oil obsolete. You think I’m a fringer that may have toked one too many? I’m not the only one thinking this way. Allow me to illustrate.

Were you aware that in 2014 every Norwegian citizen became a crown millionaire because of their rainy day fund that has been established as a result of their oil industry? http://www.reuters.com/article/2014/01/08/us-norway-millionaires-idUSBREA0710U20140108

And are Norwegians concerned about where the price of oil is going? You bet! But not for the reasons we Canadians are. They are seriously looking at the future and the ramifications when LENR (cold fusion) overwhelms the world. Oil’s done in the not too distant future and Canada is in for dark times.
http://www.e-catworld.com/2015/02/06/cold-fusion-if-this-is-true-the-oil-becomes-worthless-norwegian-tu-magazine/
A functioning 1MW plant is already up and running and a company called Industrial Heat has bought the rights to the technology and is already in the process of determining the best way to mass market the product. A little research will show you that Blackrock, Bill Gates and others are investing in this form of energy and will be in on the ground floor. Canada? Just grounded

*****************************
I’m with you – I am sure people back in the day thought cars were a fantasy.