Ted sells steel in Alberta. “This is brutal,” he says. “Layoffs every single day. And I have no idea why none of it is getting reported. Our business has tanked.”
Gary McLean sells real estate in Calgary. He says this is the fastest crash he’s seen in 28 years. “These layoffs or potential layoffs are also hitting homeowners with large mortgages, lines of credit and credit card debt,” he told a MSM reporter. “I believe that a large percentage of the rush to market may be caused by this group of people trying to sell their homes.”
You bet. Albertans are more indebted than anyone. And what happens in Calgary won’t stay in Calgary, as this becomes a national real estate story.
Since this blog amped up the melodrama and started the Cowtown Death Watch® six weeks ago, just about everything predicted has come to pass. Falling oil begat layoffs which are killing housing which, in Canada, is built on a foundation of debt. Here’s the latest:
- One of the major banks (the green one) now predicts Calgary house sales will plummet this year by half, after rising 12% in 2014. A stunning turnaround.
- So far this month sales in Cowtown are down 38%, after a 39% drubbing in January.
- When 2015 opened there were just over 2,000 properties for sale in the city. Today there are almost 5,500. There’s never been such an explosive inventory buildup before.
- The average house price has fallen 5% – just the start. TD Economics figures 10% is reasonable, but the momentum is building for twice that amount.
- If trends hold, it will be the worst February in almost 20 years.
- Sales of properties listed for more than $1 million are down by more than 50%.
- It’s not just Calgary, of course. In Edmonton listings are swelling and sales have dropped by a third. The same is happening in Saskatoon. And Regina. In St John’s, too, where oil also matters. There detached home sales have fallen 8% while listings have jumped 15%.
- BeeMo economist Doug Porter is sounding the alarm about real estate in general. Sales are now stagnant or declining in 15 of the biggest 26 cities. In a month or two, despite mortgage rates falling as low as 2.1%, rot could be evident in all but four or five.
- Across Canada there are 6.5 months’ worth of homes, says CREA, the most in two years. The ratio of sales to new listings has fallen to below 50 for the first time since 2013. Says Porter: “While CREA still suggests that the market is balanced, there’s little doubt that the swift chill in the prior market-leading cities has cooled the broader national trends.”
- Says TD Securities macro strategist Mazen Issa: “What is interesting to note about the housing measures is that there is a clear sense of panic.”
Draw your own conclusions. But when the major lenders trot out their eggheads to tell you about plunging sales forecasts, spreading real estate contagion and panic, you should probably pay attention. After all, when was the last time you heard such talk?
Also remember US interest rates will be rising this summer for the first time in six years. The consensus is that the Bank of Canada – even if it drops its rate another quarter point this spring – will reverse course by the end of the year and restore those cuts. Between now and then we have many months of layoff announcements, negative year/year sales stats and falling prices. Nobody expects oil to bounce back or buyer confidence to return to Alberta. Hell, we even have a federal finance minister too spooked to bring in a budget. What does that tell you?
Remember that cheap oil is an accelerant for the US, just as it’s a drag for us. In fact, the S&P passed through yet another milestone on Tuesday, while 76% of major companies announced robust profits and the latest three-month employment gains were the best in 17 years.
Every lesson I’ve ever tried to teach on this pathetic blog – to diversify, shun debt, stay invested, avoid a home-country bias or a one-asset strategy while loving balance and liquidity – was for a reason.
This is it.
235 comments ↓
I would like to hear predictions on how long it takes for Alberta real estate contagion to take hold in markets like Toronto and Vancouver.
A) 6 months
B) 1 year
C) 2+ years
D) Never
Go.
From the chart it shows Calgary looking worse than Edmonton. Why? Considering Calgary has more white collars jobs compare to Edmonton.
Have you heard that the RCMP are declaring that some people to protest petroleum in Canada might be a “threat to national security”…?
We are owned.
Glad I didn’t quit my job to head west 2 years ago. Lot of buddies did and this thing is blowing up. How long can low oil last? I don’t work in the industry but it is still scary that we are that dependent on it. Might be a goodtime to start diversifying the economy. You are too right Garth, this thing spins out all over the country, from coast to coast. Starting to feel like early nineties again.
Interesting how in these economic environments in Canada, The Toronto stock market continues to do well..I wonder why this can be with such low oil?
Umm
Brent Oil formed a triple top and has now broken through. Heading ABOVE the break out
Last night I was in a town in USA. I went to bed, gas prices at THREE stations in front of my hotel was $1.89 a gallon. There was a line up. And it was – ALOT outside.
I woke up today and its $2.19. Yes. that fast.
Goldman and Citi have ben frantically putting out article after article trying to explain why they feel oil will go to $10.
Of course its to profit from the trade (positions) they took.
What they missed was the speed the rigs were dropped in the US. What they missed was Iraq is about to fall. What they missed was how fast a 1.7% oversupply vanishes.
There have been so many bad calls on Oil over the years there should be a website devoted to posting these banks and analysts calls.
Like Shillings “$10” call on oil.
Why not say “$0”
WTI (reversed course headed up today)
Brent Crossing key technical at $63. Next key resistance is $67
I listened to you Garth.
No debt. Check.
Balanced portfolio. Check.
Liquid portfolio. Check.
Now where’s my prize?
BC budget says everything is good! No worries, right?
“Why? Considering Calgary has more white collars jobs compare to Edmonton.”
Calgary was home to a much larger RE bubble than Edmonton (despite popular opinion, not that many people in Calgary actually work in the O&G industry!). And the people who do work in Calgary in the O&G industry tend to be involved with longer-range planning and engineering, rather than short-term operational and construction-related matters.
Calgary RE prices have been falling for the better part of 2 years now, but there is a much greater stratification in terms of housing cost in the city compared to Edmonton. So the RE board in Edmonton, compared to Calgary, hasn’t been able to hide behind a changing ‘sales mix’ in its claims that prices have been rising.
thanks garth
About time Calgary market for to be “stabilized”
Never seen so many uneducated people making over $100k/yr
Is it these who are dictating the Calgary market?
Pleeeas
Hey Garth – where can we get those home sales to listing ratio graphs?
“Interesting how in these economic environments in Canada, The Toronto stock market continues to do well..I wonder why this can be with such low oil?”
A long overdue cyclical rotation is occurring. Speculative money is leaving housing and is piling into other assets. TSX earnings, ex-oil have actually been quite well over the past few earnings reports. The low CAD$ is making stocks of solid Canadian firms “cheap” to US investors, and such firms with US/foreign diversification are seeing the repatriated profits of their foreign subsidiaries significantly augmented just on currency exchange alone.
What we are witnessing is a dead cat bounce in Realestate. When The BOC is forced to raise rates, watch out because it’s going to get nasty. As I’ve said before its a race against time. The Conservatives are trying to keep this thing going until the election and will do what ever it takes so they can ride into another majority.
“The world has not seen this quick a collapse in RE. It’s astonishing. They don’t know what to do about it.”
——————————————-
Where? Toronto/Vancouver/Calgary prices have only been falling minorly over the past 2 years. Hardly a ‘collapse’ by any means. Which is why the RE boards have been able to, at least temporarily, even convince the gullible that prices have been rising.
————————————–
Was in response to 223 and leaving cowtown out of the statistics. So after today there is no doubt about the speed of what is happening. Economists from the big six will follow it down. Nothing can be done. Things can only go bad for RE from here on in as far as the eye can see.
I’ve maintained that this is a total disaster for Canada. No doubt about that. But it’s the people that will feel the monetary pain. Then the real story begins as the effects on lives and families stretch far beyond that.
I have never seen as many ads on Facebook for debt relief & bankruptcy as has been the case the past weeks.
Today, on my transit commute to downtown Toronto, an entire subway car section’s ad units were dedicated to promoting one such debt relief company.
Something tells me their phones are ringing off the hook.
Garth,
Your just the same as housing bubble deniers, in your case its USA financial assets. Its very clear that the US stocks are currently in bubble territory, its no different this time. Propping up assets with stimulus has the same ending, a crash.
@George De Frun – Because outside of Energy, which takes up a fair bit of the TSX, we also have Financial, Natural Resources, Manufactured Goods, and a tiny slice of “Tech”. The growth or rebound is nothing on the scale of the US S&P 500 and, in my portfolio, the Canadian market trailing my bonds and investments in the UK (also heavy in Financials)
I imagine when Energy started taking a massive hit last year, fund managers panicked and started dumping their Energy stocks and doubled up on Financials (or god forbid real-estate in the form of REITs). It’s a guess but the banks have a lot less volatility than energy right about now.
Might want to check that economic accelerant comment cause the facts on the ground are a little different…
http://www.businessinsider.com/gas-savings-spent-on-gas-and-savings-2015-2
once upon a time , a wiseman said :
“Fools learn from experience. I prefer to learn from the experience of others.”
“Hell, we even have a federal finance minister too spooked to bring in a budget. What does that tell you?”
—————————————————————
Show some respect, Turner.
Joe is currently in the closet as we speak, picking out the new shoes Finance Ministers traditionally wear for a new budget.
But it’s dark in here, so things take a little longer.
(You will never be invited in here, so you wouldn’t understand)
‘And what happens in Calgary won’t stay in Calgary, as this becomes a national real estate story.’
*****
More fear mongering. It’s so well written I’m surprised Harper gave you the chop.
Oh shoot … is the TSX about to tank now since so much of it is financials and energy?
Stand there with ones bare face hanging out, has never been more true, when it comes to Calgary.
Garth, all we need to know is that house price are up 3% to 4% from a year ago according to CREA. It just keeps going up…
Just focus on the good news, ignore the bad news like in the US and all is rosy!!!
Garth you make it sound like this will spread to Toronto? Why would that be? When US real estate crashed it didn’t hurt toronto. I live in Toronto and life is the same as when oil was at 90 a barrel. Just go back 6 months, 1 year or even 2 years on your blog. Read what you wrote then. Same thing as now. Don’t get me wrong I agree with you for the most part but it is impossible to predict and i don’t think the oil drop will hurt Toronto.
from last day’s post …
“Take the cash as return of capital. The mix of dividends, interest and cap gains will fluctuate over time. — Garth”
Does this not lead to depletion of the original investments?
Why would it? — Garth
Add HSBC to the likely downsizing parade:
http://forums.redflagdeals.com/future-hsbc-canada-1675199/#post21646465
“….When all is said and done, by the end of this year or next, I expect you’ll see HSBC with between 75-105 branches in Canada (down from 139 in Canada currently). 34 of those 139 will likely be outright branch closures. The remaining 30 would likely be sold to strategic buyers, i.e. credit unions and/or Canadian Western Bank/National Bank of Canada.
…”
Sounds pretty authoritative to me…
Well all my builders are reporting sold out sub-division, 150 home subdivisions sold out for the summer on just one of 20. Ontario is going to boom this summer.
Immigration and low interest rates is a helluva way to run an economy, but here we are so ‘deal with it’.
David Stockman has an interesting warning about the markets this summer.
Sales are down 39%?
I can’t believe it’s that low.
Who the hell is buying when things will be even cheaper next month and the next month and the next mo…
#1 Yogi Bear on 02.17.15 at 7:09 pm
I would like to hear predictions on how long it takes for Alberta real estate contagion to take hold in markets like Toronto and Vancouver.
A) 6 months
B) 1 year
C) 2+ years
D) Never
==================
You obviously missed my centre of the universe comment the other day…. the answer is D.
Meanwhile, on the west coast, 200k over asking in five days.
http://www.househunting.ca/vancouversun/buying-homes/Modern+touches+boost+heritage+home+appeal/10812278/story.html
Garth, you are predicting a move up in Canadian interest rates. If that move happens in the next six months, and it’s a quarter point, do you expect some markets in Canada will get busy as people are motivated to get in before rates go up further? (last gasp of the market)
All is well here In van we don’t care if a buncha rig pigs are laid off, Mercedes are flying off the shelf realtors cruise around in 7 series bimmers laughing all the way to the bank. Still a great time to buy yourself a nice 60 by 120 lot, the sky is the limit when the PRBOC has your back , only suckers rent in van
http://business.financialpost.com/2015/02/17/canadian-home-sales-drop-3-1-as-sense-of-panic-sweeps-western-markets/
According to Mike Fotiou, associate broker at First Place Realty in Calgary, there were only 580 MLS sales in the city between February 1-14. That’s a 35.8% drop from the same period in 2014. Sales are also off by 35% from the 10-year average and by 25.7% from the five-year average.
Fotiou said it’s the lowest February level month-to-date going back to 1996.
The average MLS sale price is down close to 5% so far this month to $465,861.
Fotiou said the Calgary luxury market has also slowed significantly, with only 15 homes selling for $1 million or more, compared with 36 for the same period last year.
““Take the cash as return of capital. The mix of dividends, interest and cap gains will fluctuate over time. — Garth””
There’s been a few questions about this, and many of us seem to be relatively unsure of how we can accomplish the ‘return of capital’ on a (re)-balanced portfolio without triggering gains, particularly in appreciated investments.
Could you please do a post on some of the ‘mechanics’ of such?
#9 mark
There will always be a “greaterfool.”
What’s also incredibly foolish: in Calgary thus far for Feb, there has been 614 sales where 83 of those people paid ‘at or over list price’!!! And someone paid $29,000 above the asking price!!!
Someone please do a cognitive assessment on these greater fools.
The best thing to do is NOT BUY ANYTHING for the next 3 years!!!
Agreed! A friend of mine also sells steel in Edmonton, he says sales are about as pooched as truck-nutz in Europe.
A lot of welders and fitters will be headed home to the east coast and Ontario, driving down the wages there too as they all scramble for work. So much for Harpers hands-on trades program…
Toronto and Vancouver house prices may not be as strong this year.So much wealth have been made in real estate in these 2 cities that it may be time take your huge profits and run.Buy oil stocks on the pullback and trade stocks using charts.
In my cognitive assessment:
“You’ve been reading articles about the fall of oil and listings for houses sky-rocket in Calgary. Experts predict there will be a housing correction. In the past when this had happened, houses dropped between 38-50%. What do you do?”
The price of oil won’t stay this low for long… but it will stay low long enough! I think 2-5 years. 1 year minimum. And the effects it will have on capital availability in the future will be long term.
One thing that strikes me always when I read the comments section on this blog is how hard of a time people have connecting the dots, even when Garth has already connected them for everyone.
For example, the business of Toronto is to finance Canadian industry, and that’s about it. Canadian industry is mostly about resource extraction and it’s all in the tank, not just oil. Thus, with a lag, Toronto will suffer too.
Vancouver doesn’t do much but export coal and trees (and pot). What if there are no buyers? (Well I am sure pot is safe.)
Something foul is afoot.
Good news for the gold bugs though. It actually worked as a pretty good hedge against the Canadian dollar recently. But still, stay diversified.
Rising rates, rising rates, rising rates. No, no ,no . Not here and not in the states. The US has over 16 trillion dollars of public debt. Why would they want to make it more expensive to carry it?
Yay!
How to accomplish “return of capital”:
1. Sell your ETF units or shares.
2. Some of the proceeds will be gains, the rest will be your original investment.
3. Capital returned.
Money Is Bailing Out of Canada, The Floodgates Opened In December.
http://investmentwatchblog.com/money-is-bailing-out-of-canada-the-floodgates-opened-in-december/
Wonder if anyone in AB is selling their $70k Harley or $100k Diesel trucks as well.
What is going to stop the 604? 40,000 people move into vancouver proper every year , 180,000 into the lower mainland , transit is freaking out over population growth and is currently trying to hike sales tax to pay for more infrastructure, people are renting basement suites for an average of $1200 to $14000 , is this what the day of reckoning looks like ? I guess we didn’t get the memo
Not good.
http://calgaryherald.com/business/local-business/canada-must-reassure-nervous-trading-partners-that-its-beef-is-safe-expert-says
http://calgaryherald.com/business/real-estate/calgary-mls-sales-forecast-to-plunge-nearly-50-this-year?__lsa=a6f7-5d91
Calgary MLS home sales are forecast to plunge by nearly 50 per cent this year amid a climate of declining oil prices and an uncertain economy, according to a report by TD Economics.
The report said the “oil-driven” housing market in Calgary has “already experienced a sudden and abrupt turn.”
According to the analysis, “A significant softening in job markets will set the stage for a second major housing correction in Calgary” since 2008.
http://www.edmontonjournal.com/Layoff+notices+2015/10820069/story.html
Jim Blok, a heavy equipment operator and truck driver who lives near Thorhild, was laid off this month after five years working for a company that sells special sand used in hydraulic fracturing.
Frac sand sales had dropped off and there wasn’t enough work at the plant, Blok said. With a wife and four teenagers depending on him, he needs to find work soon. He’s applying for jobs online and advertising his skills on Kijiji.
“It’s a son-of-a-gun to get laid off at 55 because it’s harder to find work,” Blok said. “Everybody wants the young people.”
Economists predict Alberta’s low unemployment rate will rise this year — from 4.5 per cent in January to around six per cent, or higher.
“There’s no question we are going into a labour market downturn,” said ATB chief economist Todd Hirsch, who isn’t ruling out a recession.
Attn. Yield Hounds. Why you stick to ETFs for the long term:
WesternOne income fund (ticker WEQ) gave 5 years of rock steady distributions. Then, this year, shat the bed – in local (Western) parlance.
It’s almost into penny stock territory.
Divvy and jobs are historic info. now.
I went into the Stockhouse website to try and find some information why the share value of a company I owned soared today. (ok – rpi.un) It turns out an analyst on BNN recommended the company as a top pick. Personally, I think many of the analysts pay BNN to be guests so I would be careful about their advice.
In fairness, if I was always right – I would be a billionaire by now.
I decided to poke around and came across this link which gives monthly statistics on the number of people and flights into Fort Mac. http://www.flyymm.com/media/facts-and-stats
Since most of the people flying in and out are oil patch workers, I think this link may give some insight with job losses at the oil sands.
The Ukraine concerns me and I like to hear both sides of a story. So I found this article: http://vineyardsaker.blogspot.ca/2015/02/yet-another-monumental-failure-for-junta.html
I find both western MSM and Russian news sources to be biased. Facts are facts, I just don’t like them being withheld from me. I think the easiest way to manipulate people is to withhold information or be given the pen to write history.
I some trouble with the submit button, Garth could you please delete the copies if I actually sent them. Thx.
[…] Source: http://www.greaterfool.ca/2015/02/17/deal-with-it-2/ […]
Took a cab from Calgary International Airport late sunday evening and the driver told me he has had large numbers of passengers who have told him they have lost their jobs….this won’t end well.
This is exactly why environmentalist extremists shouldn’t be listened to. At all. EVER.
We had a solid decade to plunder everything we could from those oil sands. But first nations tribes, green activists, and irrational politicians did everything they could to get in the way.
Those exact same people are the ones that turn around and complain that there are no good jobs.
It’s unfortunate that so many people with such poor critical thinking skills exist on this planet – especially in decision making positions. That CAUSE and EFFECT can not be properly linked up in the minds of many is a tragedy.
There’s no reason Alberta can’t survive this. But, the government there, while ‘conservative’ in name, will do all the wrong things, as usual. They will increase government spending, go into more debt, and increase taxes.
Wrong, wrong, wrong.
What they should do is massively slash PUBLIC spending, slash taxes, and slash regulations. This will encourage capital to FLOW into Alberta, instead of fleeing from it. There’s no reason the cost of production of oil in that region can’t come down through productivity gains. Productivity gains can only come from capital investment into infrastructure and equipment – something scared companies won’t do when the tax man is hungry for a revenue source.
Listen, or die. Free market capitalism is the only thing that gave us any semblance of wealth. If you disagree, you deserve the impoverishment that is being bestowed upon us by our benevolent ‘leaders’.
Oh, and the whole oil ‘scarcity’ thing is a farce. Oil is PLENTIFUL and ABUNDANT. Saudi Arabia has so much oil, and at such cheap extraction costs, that it could maintain prices at this level for the next 50+ years. It’s all a ruse. And you’ve been duped. Alberta might as well play along, when prices are high, and get in on the scam.
Jimmy loves Bud Light commercials.
Hey Gartho, Wazzzzuuuuup!!
#11 “Never seen so many uneducated people making over $100k/yr.”
This one comment speaks volumes of an uneducated attitude….
Any idea how this will affect the maritimes in homes priced in the 100 to 200 range? I’m looking to buy affordable but don’t want to jump the gun? Any idea what homes in this range could fall too in the next year or two?
> … slash taxes, and slash regulations. This will encourage capital to FLOW into Alberta … Saudi Arabia has so much oil, and at such cheap extraction costs, that it could maintain prices at this level for the next 50+ years …
who would move their capital to the oilsands when the Saudis can maintain prices at this level for the next 50 years???
I see 5 consecutive green candles on dailyfx.com/crude-oil
Sure, some of them are more like tea lights, but Texas Tea is recovering. It was in the 43 handle and now in the 53 handle. Is this why a drilling company was up almost 4% today? Why would there be buyers when an analyst calls for $10 oil? Probably because these analysts have a vested interest, and the algos know it and want to catch all the shorts off-side! Ohh this will be interesting to witness how it plays out!
Garth Canadian rates will only go up after a quarter of positive trade balance. And good job growth, up to now, we’ve been getting the opposite.
By the way dogs, twice now like a drunkin idiot I’ve posted the book cover. And no I wasn’t in it.. Well maybe, probably on the next drunk I’ll do it again.
Kid report, he made 20k this week, after I brought him back from the dead, a huge loss of 40k . He’s been identifying the trend reversals but has been exiting to early, today alone have he followed the script he could have made 16k..
Baby steps.
Those who care know where the pic is.
You guys all got to read The Day After Roswell.
Find out where.
Night vision
Lasers
Silicon chips
Kevlar and Carbon fibre.
Solid circuits
Computers
All came from.
To all who care about the Montreal market, I found the article I was referring to on yesterday’s blog, and indeed, way back in 2006 they were worried about a two-year oversupply, a lack of buyers and the influence of “foreign promoters.”
http://www.ledevoir.com/non-classe/123322/la-schl-lance-un-nouvel-avertissement
#54 Cato the Elder
“Free market capitalism is the only thing that gave us any semblance of wealth.”
If you think we have ‘free market capitalism’, you are completely ignorant of history.
In a capitalist society there are no bailouts, welfare programs, patents, stimulus packages, etc etc. If our society was EVER capitalist, I’d love for you to point it out. We have a mercantilist society, and always have. Our banks and telecom companies are a cartel, for instance.
“If you disagree, you deserve the impoverishment…”
So this is basically an argument ad baculum. How intelligent.
Agree about slashing public spending, taxes and all teh rest. However, Alberta cannot will itself out of its two big problems. First, oil can be produced more cheaply elsewhere. Second, it is headed for a MAJOR problem with water supplies. Alberta has traditionally been far drier than in the last two centuries, and scientists think it is about to revert to the mean.
#32 Keith on 02.17.15 at 8:02 pm
Meanwhile, on the west coast, 200k over asking in five days.
http://www.househunting.ca/vancouversun/buying-homes/Modern+touches+boost+heritage+home+appeal/10812278/story.html
———————————–
1.7M for dirty drive lot. house is a stunner tho.
standard 33′ – location is a too close to the drive – but sbux is next door – RECORD HIGH PRICE for east van std lot.
prices are CONTINUING to elevate in vacouver- this house was roughly 1.3m in 2012. 1.1m in 2010.
buddy added 600k tax free by not selling back in 2010.
nice move.
wow.
east van is coming into its own – expect strong demand/supply imbalances for 10 more years.
Off topic……
Asian homes being targeted in break-ins: police
Money, jewellery and luxury goods have all been reported stolen
News1130 Staff February 17, 2015 3:35 pm
VANCOUVER (NEWS1130) – Asian families living in Vancouver are the target of a specific warning by police following a series of break-ins.
Since the end of January, at least 17 homes have been broken into when nobody’s home.
The culprits are getting inside by smashing a window or prying open a back door. They’re taking money, jewellery, and luxury goods like designer handbags.
Officers are asking you to look at ways of making your house more secure, and to report anything suspicious.
http://www.news1130.com/2015/02/17/asian-homes-being-targeted-in-break-ins/
Alberta is a house of cards built on the harper conservative stupidity. Bet you wish you had kept Garth on the team Mr. Jealous/ harper. The house of cards is falling so hard as Alberta is going in for a hard crash as many will go bankrupt. It’s couldn’t of happened to a more closed minded province.
“Nobody expects oil to bounce back or buyer confidence to return to Alberta.”
____________________________________________
To be fair, that red bank (CIBC) is indeed claiming that the recession in Alberta will be mild and short-lived, with oil and growth bouncing back by early 2015.
http://www.timescolonist.com/business/cibc-predicts-mild-short-lived-recession-for-alberta-1.1765480
So, does CIBC have vested interests in the Calgary market?
Not only is Alberta oil worthless but Alberta beef industry is finished as I won’t eat Alberta beef for at least a year or two. Tough times are a coming and many will go bankrupt.
Re #185 from yesterday by DisgustMadeMePost
Ok, truly getting disgusted at the frightened men posting about how their lives are ruined by women.
Your worst fears have been realized.
You don’t have a functioning set.
Now can we move on?
——————————————————————My equipment works just fine, thankyou. I keep it holstered with the safety on. Right where it should be. Not in a designer purse that I probably would have paid for.
Warren Buffett dumped his shares in ExxonMobil:
“The billionaire investor sold 41.1m shares in Exxon Mobil, worth almost $3.9bn, as well as 471,994 shares in fellow US oil giant ConocoPhillips in the last three months of 2014, filings released on Tuesday showed.”
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11419200/Warren-Buffett-sells-stake-in-worlds-largest-energy-company-after-oil-price-collapses.html
Unusual move for a man that preaches “buy and hold forever” philosophy.
He did, however keep his stake in Suncor Energy.
Garth, looks like you’ve changed your mind and are staying….plenty of fodder now…
and be sure to invest in USA sunglass companies…
#65 & #66 Alberta is FINISHED
The negative part of reading this blog is having to put up with moronic statements like the ones you have just made. Please get educated on Alberta’s track record of pulling itself off of the mat when it is down. Alberta has always improved after oil price collapses. I have lived thru 5 such events since mid 70’s.
#54 Cato the Elder — “What they should do is massively slash PUBLIC spending, slash taxes, and slash regulations. This will encourage capital to FLOW into Alberta, instead of fleeing from it.”
Hey, what a great idea! It’s been tried before, and the results are in.
http://en.wikipedia.org/wiki/Kansas_Senate_Bill_Substitute_HB_2117
http://research.stlouisfed.org/fred2/graph/?g=11ed
Buy US blue chip, dividend paying stocks–it’s not too late…
#68 Joseph R.
Re Buffett dumping his holdings in Exxon and ConocoPhillips. He did not lose faith, it is just an ethical divestment. Suncor produces ethical oil. Just ask Ezra.
CIBC predicting a mild and short recession in Alberta. I think they meant winter. Now that would be good news.
Probably at least another year before we see a significant correction in Toronto. Until we see the bottom of the interest rate cycle and/or a real hit to the all-important finance sector, the party will most likely continue. If the big banks start posting bad profit numbers on oil it could be an early trigger for a correction but we haven’t seen that yet. First quarter
results due out next week…
Garth, Garth, Garth. Why are you so off in regards to house sales? I mean, how the hell can you expect anyone to get out to buy a house when the temperature every where east of the Rockies is below -40 or so deep in that white sxxt that one needs a periscope and a snorkel to get out the front door.
Just wait for the thaw. Then you can comment on house sales.
All stats are year/year. It was cold last Feb, too. — Garth
You are convinced the Americans will raise interest rates this summer. I’m not so convinced.
According to a large new poll (sample size 3205):
Only 39% put any money away for retirement in 2014
30% have not even started saving
61% fear they will run out of money (Ya think!?)
http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/most-canadians-did-not-set-aside-retirement-funds-in-2014-poll/article23023550/
Want to bet most of these people are counting on real estate to bail them out?
This should work out just fine.
#65
So much hate for AB!!
“I pointed out that while living longer is a very high-quality personal problem to deal with, if your pension plan doesn’t live as long as you do, that could be an issue. Some pension plan managers approached me afterwards to talk about this issue, and it is apparent that others are confronting it head on. Matt Botein, global co-head and CIO, BlackRock Alternative Investors, later talked about how he helped pension funds to hedge their “mortality risk” (the odds that pensioners will live longer) by buying a large life insurance company. The value and profits of a life insurance company will rise if the people they have insured live longer. That is a very creative way to deal with the exposure that pension funds have to the obligations imposed by longer lifespans.”
(This is a long article)
Read more: http://www.businessinsider.com/dont-be-a-pension-fund-manager-2015-2#ixzz3S3Ykvq00
Berkshire Eliminates Exxon Stake Amid Plunge in Oil Prices
Wow, that didn’t last very long did it?
Gasoline is now above $1 per liter in the GTA, $1.03 in Burlington. I can see gas hitting $1.35 again by summer.
Sad to see that cheap gas go, oh well.
So don’t worry, the layoffs in Calgary are only temporary, oil will be back over $100 / barrel by summer.
Anyone wanting to make 50% over the next 6 month = buy CLO.TO (Toronto stock exchange).
As for housing prices; who knows.
Awesome BG budget…. $879 m surplus, tax rollback next year for >$150K income.
#1 Yogi Bear
I’m gonna have to go with Yogi Berra on this one…”It is extremely difficult to make Predictions, especially about the future.”
I”m pretty sure this is what Garth is talking about in his last two paragraphs on today’s Post. One Asset strategists are unable to comprehend the Facts of prudent financial management. I am ok with that, as the important thing is that I get it.
BC and Vancouver will be just fine. After all, the Province just had another headline story about how 1 million jobs are coming! The Province and the BC Liberals would never lie about that!!!! Besides, we have tons of money, we can pay 2 CEO’s for Translink now, and they think we should give them more!
I think the BC gov’t is trolling the people of BC this point. As a general population, we’re so stupid that we keep voting them in, we think we have no other alternative. Why shouldn’t they just lie to us and do whatever they want?
Tricks realtors use to sell homes
http://www.moneysense.ca/property/tricks-realtors-use-to-sell-homes
Polar Vortex, buy now or never, terrorist threats, climate change, recession, rape culture (that one annoys me the most) and so many more “scary” things that we are threatened with by the media and our leaders.
Honestly, when did a cold front become a “polar vortex”?!? Are we all going to get sucked up and deposited on Baffin Island?
This is why people cannot make rational decisions about RE, investing, ANYTHING. We are constantly inundated by scare tactics from our government and the media and the wacky groups the media gives lots of air time to. I suppose it’s easier to control a scared population than a secure one, but enough already!! Most people will do whatever the government tells them, stupid idea or not.
Senator Rand Paul is using the Fed as a whipping boy for his presidential aspirations.
“In his op-ed, Paul claimed that “[t]he Fed has $4.5 trillion in liabilities and only 57 billion dollars in equity. It is leveraged at 80:1, nearly three times greater than Lehman Brothers when it failed.”
In fact, the Fed has $4.5 trillion in assets, mostly Treasury bonds and mortgage-backed securities guaranteed by the Federal government. It has only $57 billion in equity because it sends most of its profits to the U.S. Treasury, a total of around $500 billion over the past decade.
And it actually has no “leverage” in the traditional sense of the word because it does not borrow money like Lehman Brothers did before it went bankrupt. Instead, the Fed creates money, as all central banks do.
“The capital of a central bank has very little importance relative to a private institution. The deposits cannot run. They are created by the central bank through asset purchases,” said Donald Kohn, a former Fed vice chairman now at the Brookings Institution. “There is essentially no credit risk on the Federal Reserve’s balance sheet right now, and I don’t know of any institution in the United States that is subject to more oversight.” In other words, the chances of the Fed blowing up like Lehman are nil.”
The above makes sense to me but leaves questions. When interest rates go up, the value of the Fed’s assets will decrease. The Fed can simply hold them to maturity but private corporations in this situation would have to write down the values to market. Will the Fed have to do this?
The Fed’s liabilities are assets on the books of major banks. If the value of the Fed’s assets are impaired by interest rate changes, will the commercial banks have to reflect this on their books? We could be looking at very large numbers.
Read more: http://www.politico.com/story/2015/02/rand-paul-wall-street-2016-elections-115226.html#ixzz3S3erwQdT
Poor deluded Alberta who have to hope that oil will some how go back up but it won’t. Why do you think lay offs in 2009 were none existent in 2009 while in 2015 they are very real and wide spread in large numbers? The suits got the word from the big boys in the US that they are shutting canadian oil sands down. Why do you think big hedge funds are shorting Canada? It’s game over Alberta as you will look like Detroit in a few years. Mad cow is going to crash your province even harder. Keep hoping everything will be ok just because. Lol Alberta is finished.
Can I bother you dogs with another short comment?
Years ago I put myself through university with summer jobs on the ranch of one of Calgary’s most successful oilmen. He made a vast fortune.
He lent me a book about the early wildcatters in the US in Texas, Oklahoma and California. It is called “The Greatest Gamblers”. A good read. Go bankrupt 2 or 3 times with dusters, raise some more capital and then hit it big.
These days the best place to find oil is on the floor of the stock exchange. I know it is completely contrary to the sage advice of Garth to try and pick stocks for us DIY’S but in the last few weeks CNRL (CNQ on TSX) up ~25% and Surge Energy (SGY on TSX) up ~50% in about two weeks.
Wild eh? No place for amateurs!!
#6
Please stop. It was massively oversold. And it’s likely going to break your heart. Two weeks of technicals are for traders only.
If the economists and others are saying that the shock that is hitting Alberta may result in a price drop of 5 – 20 pct, then I don’t know what possible shock could hit BC and Ontario to match that range. What do the rest of the blog dogs think?
http://globalnews.ca/news/1826781/uncertainty-hangs-thick-over-canadas-job-market-this-year/
At a meeting with Finance Minister Joe Oliver last month, provincial premiers including Ontario’s Kathleen Wynne were pushing for billions of dollars in federal funds to be plowed into public works — a move that would spark job growth across the country.
The premiers received an economic briefing from Kevin Lynch, a vice chair at BMO Financial Group. Chief among Lynch’s recommendations was the need for “accelerated investments in infrastructure.”
Oliver said he’s not prepared to fund a deeper commitment to public works, wary of taking steps that could disrupt the Conservatives’ goal of producing federal surpluses.
“This is precisely the wrong time to launch a massive deficit program that would undermine investor confidence, erode our credit standing, weaken our ability to withstand further international shocks, add to our debt burden, reduce our ability to support social programs and burden our children with our expenditures,” the minister said in a Jan. 30 statement.
A political fight looms, experts say. Meanwhile more dire challenges will confront many Canadians in the months ahead: the fight for a living, to make mortgage payments and keep food on the table.
“You have a low-growth economy, you’re going to have low employment growth, especially for newcomers,” Prof. Gomez said. “That means any person graduating school, any immigrant or anyone who loses their job, it’s going to be tough out there.”
#89 Washed Up Lawyer on 02.17.15 at 10:29 pm
———————————————————
Definitely wild….it’s called gambling.
Why would anyone gamble as an investment strategy?
#32 Keith
Meanwhile, on the west coast, another clueless realtor underprices a listing by $200k.
#93 Bottoms Up –
”Why would anyone gamble as an investment strategy?”
Why would you not buy when something is on sale. Buy low and sell high. That’s the way to make money.
“What does that tell you?”
That the bozos who professed to have things under control never did.
Ignore all the noise; the important take-away is: “Every lesson I’ve ever tried to teach on this pathetic blog …”
#67 Calgary Car Guy on 02.17.15 at 9:16 pm
…..
I guess that means you’re thankful your dad couldn’t keep his holstered.
Nice chart today.
It’s on the CBC, so it must be true..!
http://www.cbc.ca/news/business/alberta-n-l-to-face-recession-in-2015-cibc-predicts-1.2960305
#14 I’m stupid
+1
Completely agree. Cons trying every trick in the book to puff this epic RE gasbag up juuust long enough to make another majority. I think the tide is already halfway out however, and Harper forgot his speedo. I’m not sure they can outrun the RE / Oil Correction Snowball in time to slide into power once again.
#16 Victor V
Same happening in YVR. Radio ads all day long, prime-time TV ads all evening (expen$$$ive airtime) for sub-prime lenders, credit-counselling, debt consolidation services, reverse-mortgages, creative financing, helocs, etc. I have not seen such marketing saturation on this subject in my adult lifetime, until recently, (at least in Canada). Business must be booming to justify that kind of advertising budget. SO many local households are leveraged to the nines, only surviving by annual re-financing their home equity, rolling consumer debt onto helocs. This has been going on since “emergency” interest rates began. The unwinding that is now beginning to occur will not be pleasant.
#84 barnz0rz
Yep. Everyone under retirement age needs to put down the bong (briefly) and actually VOTE in the next provincial election, for the love of dog and voila! No more awkward Crusty problem.
#93 Bottoms_Up on 02.17.15 at 10:49 pm
#89 Washed Up Lawyer on 02.17.15 at 10:29 pm
———————————————————
Definitely wild….it’s called gambling.
Why would anyone gamble as an investment strategy?
………
As the biggest gambler on this pathetic blog I’ll ad my two cents.
Gambling has higher returns and way more risk, it’s not for everyone.
The secret to successfull gambling is supreme intelligentsia, pratice, and knowing how to separate the bull shitter from the truth. We are bombard with Bullshit every where we turn.
The vast majority have had that natural skill set removed by the educational industrial complex. Replaced with fear and self dought. Your mission after you take the blue pill, fitting in.
One needs to lose the mind completely before you can get good at this game called gambling.
I don’t consider my gambling on forex or the markets is not gambling to me, I have system thats right more than wrong. Years of self study.
It can’t be taught.. Sorry..
For those of you who think teachers are cool, 19 dudes with box cutters brought down three building with two planes.. A diversified portfolio is you your only option, hire a good advisor.
For those of you who think I’m cool, do the same thing..
Really, I got these weird premonitions that magically come true.. UCC
An Alien thing I’m convinced.
#92 Victor V
Excellent points. Precisely why I believe in the near to mid-term there may be “surprise” immigration policy tightening, perhaps sooner than many expect, even though the Cons are historically pro-wage suppression policy, with loose immigration rules being an easy policy tool to achieve that end.
Which would kind of blow a hole in that ad-nauseum Van & Toronto meme that endless ravenous hoardes of newcomers will drive RE prices up forever here…
One simple policy tweak to appease a local pitchfork-wielding mob, in the name of political self-interest, and bye-bye perceived RE price floor in the big Metro Centres. Not all that far-fetched now, is it?
The average price of new homes in China’s 70 major cities fell 0.4% in January from the month before, marking the ninth consecutive decline.
This is from the BBC. There comes a time when lower interest rates don’t work. It is like governments, wanting to keep the economy going, hold out the candy of lower and lower interest rates, but people can’t take it because low rates drive up prices to unaffordable levels, there is a rise in unemployment that not only affects those who lose their jobs but those still employed as they no longer feel secure. Confidence is lost. I would not want to be a worker in Canada (particularly in the oil fields) with a large mortgage and an uncertain work future. Much confidence has come from rising house prices. One can be careless about taking on a large mortgage when one believes that rising prices will make everything all right. In China, apparently, a lot of housing was financed to create employment for country workers coming to the cities, that led to a lot of speculation. Now, people with four or five condos are faced with falling purchases and prices. Sound familiar? You don’t care? Really? Coal prices have tanked, oil prices have tanked. China has been the engine of the world. People on hear regularly blame HAM for high house prices in Vancouver. If HAM demand takes a serious drop then so will Vancouver house prices. If you are retired or going to be retiring soon, remember that some pension plans in 2008 dropped fifty percent. Open borders are good? Personally, I believe a ship with water tight compartments has the least danger of sinking. Keep an eye on China. It could send a tsunami.
Hmm green bank just unilaterally upped my LOC credit limit by a third. What are they trying to tell me.
Hello, anybody paid any attention to this pathetic blog? Economics 101, buy low, sell high. The 99% buy into the top of the market when its ready to do a downward spiral. Garth spews the same day in, day out, so few get it.
Oil is likely gonna hit 20 maybe less. As i said last week the saudis will ensure it. They can trump anyone. Money doesnt matter to them. If they dont keep their oil flooding the market their dependants will go ape [email protected]#t.
After the CIA funded the moderates in the Arab countries, the unemployed men with families to feed in those countries are easy to convince to fight for whoever. Hence ISIS.
Ten dollar oil starts to look realistic now.
I thought it was red pills that real men need.
“Excellent points. Precisely why I believe in the near to mid-term there may be “surprise” immigration policy tightening, perhaps sooner than many expect, even though the Cons are historically pro-wage suppression policy, with loose immigration rules being an easy policy tool to achieve that end.”
The “immigration policy tightening” may very well be the immigrants themselves realizing that coming to Canada isn’t a way to helping themselves to an enormous amount of un-earned home equity (by taking out a CMHC subprime mortgage as soon as they’re eligible, and, as in the past decade, just watching the equity build). And service sector jobs are probably not far behind the high-paying O&G jobs to be cut as the country goes into austerity mode.
So no, I wouldn’t expect a lot of ‘policy’ change to be necessary to make Canada a much less attractive place for “economic” immigrants. And without home equity appreciation, and the spectre of significant depreciation now upon us, a lot of the immigrants may very well want to go home instead of face the ordinary consequences of buying assets in Canada at top dollar.
Why are there so many blog-dogs who question whether or not the U.S. Federal Reserve will raise rates this year? The Fed itself has sent the markets just about every sign possible that they will.. so much so that the actual tightening itself will be a non-event. They are not in the head-faking business.
#93 Bottoms Up
I think that to a great extent you and I are in agreement. Some stock pickers think they have spotted a bottom, can read a balance sheet and charts. Not my game. Nor would I ever advocate it at any time. I am an amateur and that is why I said “No game for amateurs.” Just pointing out that some pros have made some significant advances. For me, Garth is right.
DELETED
#7 LazyJason on 02.17.15 at 7:18 pm
I listened to you Garth.
No debt. Check.
Balanced portfolio. Check.
Liquid portfolio. Check.
Now where’s my prize?
*******************************
Jason, you worked hard, paid off debt, and balanced your liquid portfolio. Those are your prizes and good on you for winning them!
Warren Buffett increases his position in Suncor. Once Obama is out of office ,and the current US Govt’s hissy fit against Canadian Oil is over, companies like Suncor will appear once more to be a “No Brainer”.
http://www.theglobeandmail.com/globe-investor/inside-the-market/warren-buffett-buys-more-suncor-stock-becomes-his-top-energy-holding/article23037816/
and dont forget $10 oil
http://www.bloombergview.com/articles/2015-02-16/oil-prices-likely-to-fall-as-supplies-rise-demand-falls
#1 Yogi Bear on 02.17.15 at 7:09 pm
I would like to hear predictions on how long it takes for Alberta real estate contagion to take hold in markets like Toronto and Vancouver.
As long as our corrupt govt continues to look the other way as to proof of income and residency the answer is:
D) Never
Same happening in YVR. Radio ads all day long, prime-time TV ads all evening (expen$$$ive airtime) for sub-prime lenders, credit-counselling, debt consolidation services, reverse-mortgages, creative financing, helocs, etc. I have not seen such marketing saturation on this subject in my adult lifetime, until recently, (at least in Canada). Business must be booming to justify that kind of advertising budget. SO many local households are leveraged to the nines, only surviving by annual re-financing their home equity, rolling consumer debt onto helocs. This has been going on since “emergency” interest rates began. The unwinding that is now beginning to occur will not be pleasant.
Yes even that blow bag Bill Good is doing Refinance Commercials now…….
#60 smoking man
Smokey…I’m a graphic designer with a book design portfolio…if you a book cover design, I can help!
Points to consider:
1. Crash in USA in late 2016 after the Democrats try to bag the next election in Nov 2016. Before that they’ll try to keep things going one way or another.
2. Similarly here in Canada, the ruling party will keep the RE party going until the next election, whenever it is going to be, 2017 perhaps.
Let me have your take on these two points.
Why is RE dropping faster in Calgary? Well… a while ago a good friend of mine asked me what the difference was between living in Calgary and living on Vancouver Island (been on the Island for a few years now).
I told him that in Calgary, if you want to fit in, you have to pretend to have $$$. On the Island, if you want to fit in have to pretend to be broke.
$50 oil is death to Cowtown pretending. Just think of all the Porsches and Ferraris that are put on LOC’s. Check out the Autotrader; its a Yard Sale. Everything Must Go!
Hey Westcdn #51!
we have some things in common! I own rpi.un – a great (ie. boring) company. Chugs out those dividends month after month after month. I like that! I like the price action today but I hope the company doesn’t get bought out. I’ve lost lots of diversification by having great companies like this bought out and taken away from me.
Also, vineyardsaker is a great blogger. I read it religiously every day (though AFTER I religiously read Garth). anyone turned off the MSM’s coverage of Ukraine should give it a read.
cheers!
yeah Garth there’s something wrong with the submit button.
I would like to hear predictions on how long it takes for Alberta real estate contagion to take hold in markets like Toronto and Vancouver.
It is 8 months this time.
Don’t forget that two thirds of all debt is private and this is the Achilles heel. The US individuals were forced to deleverage over the past 5 years while here in canda the party was on. The party is over imminently and not just in Alberta. This private debt is also corporate bonds used to buy back shares. This is a gauranteed fracking default like Greece around 2016. Let seen how long your employer can borrow to give you a paycheck in many cases.
#88 Alberta is FINISHED on 02.17.15 at 10:22 pm
——————————————-
Right on dude, keep it coming, you are on fire tonight! And speaking of coming, I bet you’d find more time to compose even more of your fine literature if you jerk off a little less to Albusta porn between posts. Seems like many here can’t get enough of Albusta porn, but this is getting out of hand. Perhaps you could consider taking serious steps to cutting it back just as others are carefully considering the seriousness of your comments…
Great post Garth. Glad I sold my house in Calgary over the summer of 2014. Happily renting now and enjoying being liquid!
Question for the blog dogs…
Do you consider a line of credit an appropriate emergency fund in the event of job loss? I have a year of living expenses myself in a high interest account (don’t worry, have TFSAs maxed, but RRSPs aren’t). Thinking of the opportunity cost of not investing that year of living expenses in something. But in the event of job loss, I’ve heard the bank is able to detect that you haven’t received a payroll deposit, and can then call you up and ask you if your employment status has changed, to which you must be truthful (otherwise it’s fraud). And when you don’t have a job, they can call your line of credit or crank up the interest rate.
Also, Garth posted about using a RRSP as emergency cash in the event of job loss. Maybe I misunderstand, but anything above $15k is penalized at 30%, and then you are taxed on that entire amount (i.e. no tax credit for that 30% withheld). Am I mistaken?
Look forward to reading some thoughts on LOCs as emergency cash in the event of job loss. And for some clarification on early RRSP withdrawal. Thanks in advance!
Unless you invested in all the right issues….a balanced portfolio is doing nothing but hanging on by it’s fingernails. If that’s success….I don’t know. Bonds are down…Europe is down…emerging markets are down…country funds are down. The only thing that is making money is individual stocks….it’s a stock pickers dream. Several of my stocks jumped almost 10% overnight…yay for donuts, burgers and trains.
If you got yourself in debt over a mortgage, Heloc, consumer debt…then you’re just a bozo and deserve to get whipped. Houses are worth nothing in a falling market….non….fungible….more people should learn that. Don’t count real estate as part of your net worth….when it has zero value unless sold. All the fancy furniture and fixings in the world won’t change that.
When the big guy loses his job you find out very quickly how much the bank will loan you….fat nothing. Stock pickers win…chumps get pummeled…it’s natures law.
A 60/40 balanced portfolio is up about 4% so far this year and added 8.5% last year. Bond prices have increased, as has the S&P (2%) and the TSX (4%). Obviously you don’t have one. — Garth
#62 James
” . . . ad baculum.”
#101 Vanecdotal
” . . . ad nauseam . . . ”
#11 Moses71
“Never seen so many uneducated people . . . ”
and #56 PVS Inquire
informs Moses71 that his comment “speaks volumes of an uneducated attitude.”
The number of trucks in any given jurisdiction is inversely proportional to the number of Latin scholars on the road.
Can you say Mega-Crash Toronto. Bigger than 1994.
For those who believe HAM will save us all, uh oh Vancouver:
http://www.scmp.com/news/world/article/1714514/canada-extends-millionaire-migration-deadline-scheme-appears-flop-rich
“The axing of the 28-year-old IIP was followed by Hong Kong’s decision to shut down its own Capital Investment Entrant Scheme last month. The schemes had been criticised for helping drive up property prices in Vancouver and Hong Kong respectively, the two most unaffordable housing markets in the world.”
Those who have arrived previously, and purchased in recent years are already “priced in” to the market, so to speak.
How long can this last gasp of (often highly-leveraged) local builder/speculators out-bidding each other for million $ tear downs continue to justify the stratospheric 604 RE pricing, especially in SFHs?
Who will keep buying the “luxury” homes that replacing the once affordable-by-local-incomes housing stock? Average local buyer (owner-occupier buying based on local income) is almost entirely priced out of SFH market in Greater Van.
– Risk of rising interest rates beginning to rise within the year
– Risk of China continuing to crack down on corruption and capital outflows with help from the Feds
– Risk of oil patch layoffs (just beginning to be felt locally) causing a cascading wage-suppression effect that ripples throughout the entire BC economy
– Risk of BC’s LNG Pipe Dream with 100k promised high-paying jobs disappearing overnight with depressed natural gas prices
– Risk of increased yoy net provincial out migration (exceeding immigration) as the unemployed and family, (and young professionals, recent graduates, skilled labourers, recent immigrants, and retirees, etc.) pack up and leave for lower cost of living jurisdictions
–
That is a lot of RISK. Not a wise time to have all your eggs in one basket imho.
Some nice fat price drops on recent “Brand-New” luxury White Rock SFH re-lists this week… and developer Lots for Sale / Assignments also popping up. Seems some may be getting nervous, taking their chips off the table? Are there still enough chairs still for everyone when the music stops?
to think 3 years ago the PC could of stopped the bleeding and put some rein on CMHC, and CREA. But instead they super charged them and let them punder the nation with continuous lies.
Now look at the mess we are in.
But on the flip side, there will be ample opportunities for guys with the hard cash. Once again Cash will become KING
If this downturn is gonna be similar to the 2008/2009 one then then real estate will just see a temporary blip in prices, with the exception of Alberta taking much longer to correct. Government will pull out all the stops along with the bank of Canada playing its role in manipulating interest rates to favor real estate.
Hardly. A downturn would be more akin to 1990. I gather you were in Huggies then. — Garth
#122 Former Fool on 02.18.15 at 2:46 am
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I think you worry too much.
You should put more weight on the legitimate worry of actual loss of 6% on your money every year, rather than of hypothetical banks snooping you and pulling your LOC. And yes RRSP makes sense to fund a wage-free year as you will ultimately pay less tax on the money.
Alberta is FINISHED
You post like your 15 years old
http://www.theglobeandmail.com/report-on-business/careers/career-advice/some-sage-advice-for-oil-sands-workers/article22988490/
Anyone who works in the oil sands industry knows that his or her job security can go up and down with the price of crude.
That doesn’t make the current uncertainty caused by the dramatic drop in oil prices easier to stomach.
At least 1,000 workers in the oil industry across Alberta have already been laid off in recent weeks, while more are bracing to receive layoff notices. Just last week, for instance, Precision Drilling Corp. and Cenovus Energy Inc., said they would be laying off up to 2,000 workers combined.
If the price of oil doesn’t rebound soon, corporate profits in the sector could fall by as much as 30 per cent, Capital Economics economist David Madani predicted in a recent note, “prompting further cuts in business investment and staff payrolls above and beyond those already announced.”
What happened to the chatter about a new book from this weblog’s publishing grotto?
Surely tome is where the heart is.
Alberta is FINISHED’s posts are great.
Scratch beneath the oily patina in “King Ralph” land and you’ll find many soon-to-be-bums. Why can’t they all just get jobs as the refrain goes.
#124
In ad curate.
There’s no better vehicle than the f150.
#115 Grasshopper 604 on 02.18.15 at 12:25 am
#60 smoking man
Smokey…I’m a graphic designer with a book design portfolio…if you a book cover design, I can help!.
……..
I was just going to hit UOG..
Contact me here grasshopper.
[email protected]
interesting how we each take particular variables and treat them as expected future constants and plug those constants into our crystal balls to concatenate seemingly decisive outcomes. ex.many treat these as assumed constants: cheap oil, rates will rise in US, Leafs suck (well maybe not that one) etc.
it’s a crapshoot. WW3 is being fought already – it just happens to be playing out in the economic arena. all is fair in love and war, aka. expect the worst and hope for the best.
“Also, Garth posted about using a RRSP as emergency cash in the event of job loss. Maybe I misunderstand, but anything above $15k is penalized at 30%, and then you are taxed on that entire amount (i.e. no tax credit for that 30% withheld). Am I mistaken? ”
You are mistaken.
#209 Smoking Man on 02.17.15 at 4:46 pm
#202 Holy Crap Wheres The Tylenol on 02.17.15 at 4:25 pm
Dude McCain is losing it, keep him away from big red buttons..
You ever read the day after Roswell. By Col Phillip Corso. He reported to General Trudeau, back in your flying days..
Like to know your take on it.
____________________________________________
Lt Gen Arthur Trudeau was Army and he retired in the early sixties, I was in the USAF in 1970. As for Roswell and the whole incident “no comment”.
On the bright side have my place for sale here in Oakville, two days after listing have an offer. $1.45M. I’m probably going to take it. Now to look for a smaller nest with less responsibilities. Probably a small town-home near the harbor so I can walk to the boat!
On the sad side I fear that my home is destined for McMansionville. Its a big lot!
What is going on in Barrie, north of Toronto? After years of seeing marginal increases in house prices while Toronto skyrocketed the Barrie market is suddenly hot? Two separate people I’ve talked to in the last two days say they are amazed at suddenly how expensive homes are in Barrie, and how homes they are considering are selling out from under them in two or three days.
Can a minimal interest rate cut spook the Greater Fools so much? Is Toronto so overpriced that people are now looking North?
I am not a RE pumper. Just a surprised home owner.
#128 John
There was no 2008/2009 real estate downturn. Prices violently dipped on the charts for about two weeks, then the government instituted emergency policies.
The news of a downturn usually comes long after it’s already happened and this one was so short that the news arrived long after it was over.
After the 1990s downturn people were sick of housing, the thought of owning, and the incredible losses made real-estate toxic for years.
Nobody expects oil to bounce back or buyer confidence to return to Alberta. Hell, we even have a federal finance minister too spooked to bring in a budget. What does that tell you?
____________________________________________
Alberta will bounce back and oil will recover. I’ve seen this same chart over and over. The question is when will it bounce? If I knew well I would be a Billionaire! The oil companies can wait this out but oilfield service providers, drillers, well service firms and trucking companies are going to take it in the rear.They will all have a long haul back to Eden!
Ha, Alberta is FINISHED just can’t afford truck nutz and never will.
Haters gotta hate.
ExxonMobil is now the most active driller in the US…not by attrition, but by increasing activity….think they know anything about O&G? They increased drilling activity 17% since Jan 1. 56 Rigs currently drilling away.
Interestingly, they had a very low rig count when oil was $90+
People should read what Assets XOM/COP have relative to Suncor to better understand the Buffet stock dump…diversification maybe? Why hold large values of the top two heavy oil producers?
Garth is still promoting the US stock markets while the likes of Shiller and Goldman are advising investors to get out and move to European equities.
http://www.cnbc.com/id/102434722
http://www.cnbc.com/id/102434715
Your misinformation never stops. I do not promote stock markets, but believe smart investors should have appropriate exposure to the US economy. That can come by having about a third of the growth component of a balanced portfolio split between large, medium and small cap US ETFs. An equal amount should be international. Slightly less, Canadian – same split, plus about 8% REITs. Do this again and you are out. — Garth
whoever voted for this POS deserves whatever curses come their way
http://news.nationalpost.com/2015/02/18/kelly-mcparland-kathleen-wynne-dances-her-way-out-of-sudbury-mess-with-a-master-class-in-political-footwork/
122 Former Fool on 02.18.15 at 2:46 am
“Do you consider a line of credit an appropriate emergency fund in the event of job loss? I have a year of living expenses myself in a high interest account.”
That’s too much cash moulding away. Yes, an LOC should be your emergency source of funds, not a savings accounts. Emergencies happen rarely, by definition. You do not need that much cash available when you have access to a line of credit.
“Also, Garth posted about using a RRSP as emergency cash in the event of job loss. Maybe I misunderstand, but anything above $15k is penalized at 30%, and then you are taxed on that entire amount.”
RRSP withdrawals of $5,000 and under are subject to 10% withholding tax. You can make multiple withdrawals. If you need more, go to the bank the next day and withdraw another $5,000. The full amount is taxable at whatever your rate is and owed at the end of the year, but only 10% is withheld upon withdrawal.
http://www.businessinsider.com/investors-are-fleeing-canada-2015-2
With foreigners bailing out of Canadian securities and with Canadians taking their money and investing it in foreign securities, the total outflow of funds from the Canadian economy for December reached C$27.4 billion.
The turn came suddenly: in the prior months, foreigners were still busily buying Canadian securities. But the December outflows dragged down the entire fourth quarter. With total outflows of C$15.7 billion, it was the worst quarter since Q4 2007 as the Financial Crisis was worming itself into the system.
The December outflows also dragged down the fund inflows for the entire year to $3.4 billion. It was the seventh year in a row of net inflows, but the lowest since 2008 during the Financial Crisis.
Perhaps these investment decisions were based on the assumption that the US economy would be strengthening, which has been predicted for years. But maybe the assumption is that this time, the predictions would actually come true.
Or maybe a bitter whiff of a toxic mix is worrying these investors.
Back in July, ratings agency Fitch had already warned about Canada’s housing bubble and “high household debt relative to disposable income” that “has made the market more susceptible to market stresses.” In September, the Bank of Canada too warned about the housing bubble and what an implosion would do to the banks. Then in January, oil-and-gas data provider CanOils found that “less than 20%” of the top 50 Canadian oil companies would be able to sustain operations with oil at US$50 per barrel.
#16Victor V
#99 Vanecdotal
I also saw several shots of Alternative lender (located in North Vancouver) TV commercials during Super Bowl this year.
Re: #62 James
You’re right, we don’t have free market capitalism. But we need to head in that direction, instead of constantly heading towards more big government+big business partnerships (corporatism/fascism). However, the few elements of free market capitalism that we DO have, are the only reason we have ANY wealth at all, however minor. The middle class is a historical anomaly, it didn’t exist until the late 18th/early 19th centuries, after works like Wealth of Nations were popularized.
Regarding production being cheaper elsewhere, you’re right. So let’s create an environment in Alberta conducive to bringing capital in. That capital can be used on equipment to bring the cost of production down (increase productivity). As I mentioned in my original post.
However, that isn’t going to happen as long as taxes, green initiatives, meddling politicians, and idiotic regulations stay in place. All the liberals out there can continue to complain about poor job prospects while ignoring their own self-inflicted problems of big government.
It’s amazing how many people argue just for the sake of arguing. Nothing I’ve said is wrong, sorry. Keep trying to find fault with it though, it’s entertaining.
*********
Re: #71 Debunking
Proving yourself ignorant once again. Everytime you show up, you take what I say out of context, or you fail to do adequate research in your attempts to undermine what I’m saying.
In the article you showed on wikipedia, it clearly says:
“A forecast from the Legislature’s research staff indicated that a budget shortfall will by emerge by 2014 and will grow to nearly US$2.5 billion by July 2018.”
And what did I say in my original post? Government SPENDING has to DECREASE as well. Everytime the government spends a SINGLE DOLLAR it has to come from somewhere: debt, money printing, taxes, whatever it is. That means that an obligation that harms the private sector is incurred.
So, as usual, even ‘conservatives’ in the US don’t get it. You can’t slash taxes while maintaining current spending habits. BOTH must be cut.
To simplify, for you and others with poor critical thinking skills, think of it if it were your own household. You couldn’t slash your income, while also continuing your present spending habits, could you? Of course not. People who pretend countries are any different are ignorant of economic reality.
http://www.businessinsider.com/investors-are-fleeing-canada-2015-2
It’s hard for realtors and the people of Alberta to deal will the coming crash. Alberta is simply finished but thee rest of Canada’s RE is going to take a pounding. Money is flowing out of canada like crazy.
#147 Cato the Elder on 02.18.15 at 11:17 am
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Right, Cato, slash taxes, slash spending and then what? The links provided proved that slashing incomes taxes for the rich and abolishing corporate taxes does not lead to the economic gains that are so often epoused by conservative (think Mitt Romney for example).
Next you’ll probably write about bank deregulation….
Dear 416 alarmists
there is nothing to buy here
people are not listing
upgrading iz too expe nsive
Victor V: Oliver said he’s not prepared to fund a deeper commitment to public works
public works is a enormous and confusing subject. The biggest problem is the public’s attention-deficit. For example:
Cato the Elder: What they should do is massively slash PUBLIC spending, slash taxes, and slash regulations.
As a counter I would propose the twinning of Highway 63 in Alberta as a good bet. For sure it will employ people and likely serve to bolster Alberta’s economy when the price of oil goes up.
http://www.cbc.ca/news/canada/edmonton/highway-63-gets-money-for-twinning-completion-1.2785514
on the other hand, public spending is too-much influenced by political correctness. I have written about my own experience in the Federal Public Service:
The ruling effectively means that if blind people cannot see it then nobody can.
http://www.greaterfool.ca/2015/01/02/defiance/#comment-342790
Cici: To all who care about the Montreal market, I found the article
Je l’ai lu
Prairie Person: The average price of new homes in China’s 70 major cities fell 0.4% in January from the month before, marking the ninth consecutive decline.
the effect on Canada may not be what you think: I think political instability in China is leading a flight of wealth to Canada.
Re: #148 Alberta
As I was saying, and as is obvious to anyone that possesses basic critical thinking skills, why invest money here?
There are PLENTY of places around the world that don’t vilify investors, or the wealth, or the entrepreneurial. Places that don’t charge income tax on the most productive in society and let you keep what you earn.
Why send it somewhere with an aging population, clamoring democratic mob, entitled youth, overburdened social welfare, and meddling politicians?
Send that money to Dubai, Switzerland, Hong Kong, anywhere but here.
Prepare for the ‘people who try to leave Canada or don’t spend money here or don’t invest here are unpatriotic’ argument.
How do I know this will happen? When politicians, faced with the prospect of economic reality, and having no other outlet to blame, will fall on emotional arguments.
“Garth you make it sound like this will spread to Toronto? Why would that be? When US real estate crashed it didn’t hurt toronto. I live in Toronto and life is the same as when oil was at 90 a barrel. Just go back 6 months, 1 year or even 2 years on your blog. Read what you wrote then. Same thing as now. Don’t get me wrong I agree with you for the most part but it is impossible to predict and i don’t think the oil drop will hurt Toronto.”
True, Toronto correction is long overdue, and it will correct despite the price of oil
However, Oil price will hurt Toronto indirectly by:
– Tightening/lack of easy credit because of loses in Alberta
– less employment in the financial sector (to finance ROC)
Once these two domino pieces fall, Toronto will have to deal with its own problem which are overbuilding/overcapacity in the FIRE sector and very high RE prices
“Excellent points. Precisely why I believe in the near to mid-term there may be “surprise” immigration policy tightening, perhaps sooner than many expect, even though the Cons are historically pro-wage suppression policy, with loose immigration rules being an easy policy tool to achieve that end.
Which would kind of blow a hole in that ad-nauseum Van & Toronto meme that endless ravenous hoardes of newcomers will drive RE prices up forever here…”
You don’t need to wait, as it has already happened.
The new 2015 express entry program currently accepts only new immigrants with a job offer
Also for temporal students/workers it became much harder to become permanent residents than it used to in the past:
http://www.ctvnews.ca/canada/top-shelf-workers-students-left-behind-by-new-immigration-rules-lawyers-1.2232553
Re: #149
If you read that link, it showed that they DIDN’T slash spending…
Man, you guys just don’t get it, do you? The economic system that has provided you with EVERYTHING courtesy of hard-working, tireless, THANKLESS entrepreneurs, and you have nothing but disdain for it.
Government gives you NOTHING. It must first TAKE it from someone that has created it. All government can do is ‘redistribute’ which is essentially handing out stolen goods. All the while, they take a huge chunk out of it for unproductive purposes like their cushy pensions.
Regarding what would happen in the scenario I outlined, the private sector would swell. It would perform EVERY SINGLE function that the government currently does, but more efficiently and with better quality. Why does this work? Because those companies that are not providing VALUE that customers demand would quickly lose market share and go bankrupt to those that do. When government conducts a business, there are no alternatives to which you can go, and poor practices are continued indefinitely.
Take the garbage union strike in Toronto a few years ago. Private companies started springing up allover the place, offering to take peoples garbage for a fee. And remember, this was WHILE people were still paying their property taxes – imagine how much faster the industry would have grown if homeowners could have kept that cash instead! Why didn’t the council just recognize that the market was beginning to solve this problem, and destroy the union? Instead, now they have a recurring annual problem in terms of a disgruntled union.
Freedom is the ultimate solution. Government is there to mediate conflict – NOT involve itself in the dissemination of services/goods. Enforce contracts, and punish those that violate them or the rights of others. The countries around the world that recognize this and implement it the most concisely are the wealthiest. That USED to be western countries, but more and more it is the east that has caught on (Singapore, Hong Kong, etc.)
Re: #151 45North
If a highway is a good idea, the private sector will provide funds for it. Politicians are very poor planners and spenders because they base their decisions on short-term re-election strategies.
Like I said, slash regulations, taxes, and spending. In slashing regulations, a private company that may wish to build a road can now do it without hassle if it is deemed economical (with the permission of property owners of course). Those same private companies will also have more money to spend on it due to lower taxes.
Your ‘thinking’ that it’s a good idea doesn’t make it so. That’s the SAME problem with politicians, they think they know better. The market is more powerful than you or anyone else. The profit incentive, and the EVIDENCE of an enterprise turning money over again and again, are the only proof there is.
I myself lost my job last fall. No doubt it has not been easy given the market is so poor for management level jobs, but I sold my house about two years ago, rent and have no debt. I can not imagine losing a job and holding a mortgage/credit line..etc. I know many people who have very little equity in their homes. Either they put very little down when they bought, or they simply over spent on their credit lines. I just read today in the Toronto Star about a guy with a $375K house, with only $25K left in his mortgage – but has a credit line of $250K. He basically just spent away his house. Make no mistake, there are tons of people like this out there, and although people who are bullish will rationalize that people won’t accept lower prices when they sell, what difference does it make if you lost your job and can’t make payments?
In the mean time – Kijiji ads in Fort Mac are exploding…
Anyone wants to take over a lease on a well appointed F350 (free truck nuts included!)
Or a skidoo, quad or speed boat collection?
The whiners and doomers on this blog that don’t have a huge portfolio are simply on the wrong side of the equation. Debt is a zero sum game. Either you are in debt/no RE assets or you have made huge gains in this boom. :)
Garth I just turned 30 and through the good fortune of riding the Alberta boom I am about to be mortgage free on a house I paid 200,000 for 10 years ago. It is now worth at minimum, twice that.
My dad is a CA and has been leaning on me quite hard to have the house appraised to secure a large HELOC to use as an investment vehicle. He has made some poor financial decisions in the past, so I am not so quick to buy into his ideas.
Is this is any way a sound idea or am I better off politely stalling him until I either sell the place to upgrade as my relationship moves toward marriage, or is this an idea I should buy into?
regards,
#148 Cato the Elder
dude, you aren’t going to win an argument against socialists using historical evidence, statistical data.
there are stats and figures to prove any point of view–and you will venture down a dark rabbit hole.
the only winning argument comes from first principles:
if stealing (through violence) is wrong, then it is ALWAYS wrong–even when done by the benevolent state to “help the poor”.
get the socialists to admit that they promote theft and violence–but only to the extent that it doesn’t affect/involve themselves.
at least they can then be honest about it–and, if they choose to continue down that political path, know what their ethical position really is.
#124 Nagraj
“The number of trucks in any given jurisdiction is inversely proportional to the number of Latin scholars on the road.”
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Perhaps we are not worthy of you. But I just thought I’d pass along that my Brother-in-Law has a Phd from Yale, speaks 5 languages fluently, and has taught courses in Latin. His daily drive? An F-150. Just leased a new one, in fact.
#157 Cato the Elder on 02.18.15 at 12:13 pm
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You are so caught up in your singular argument that you can’t see the forest for the trees.
Private sector is motivated by money.
Public sector is motivated by providing a service to society.
This difference in motivation is the key reason why we need a healthy public sector. There are countless examples of greed in the private sector that has been very harmful to people. Good examples include:
1) Healthcare (or lack thereof) for the poor (or those with ‘pre-existing conditions’) in the United States.
2) Private fighter fighters that drive past your house when it’s ablaze because you missed last months payment
3) Drug companies that produce medications that kill people, or companies that produce toxic products or foods
4) False advertising, false product claims. Mislabelled store shelves. Lack of clarity on credit card statements. Robocalls to your house during dinner.
5) Deregulated banking that almost brought down the world economy.
The list is endless for ways the private sector needs to be kept in check.
A robust public sector is needed to protect people, to ensure some level of equality and morality in our society.
#162 Puzzled Alberta Boy on 02.18.15 at 1:02 pm
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Yes within reason Garth is an advocate of that approach.
It makes sense to set up a portfolio with a large lump sum up front, and then your monthly payments are used to pay off the principal or LOC. I think the bank will give you a HELOC up to 80% the value of your home, so quite possibly you could be starting with an initial portfolio of $320,000. At 7-8% return per year, it will churn out $2000 per month. Your LOC/mortgage payment might be $1400 per month, so you’d be positive cash flow each month of $600.
That’s $7200 per year extra cash flow that you would have if you use this approach. The only caveat is you need the right portfolio. With over $300,000 to invest I’m sure Garth would help you out.
#162 Puzzled Alberta Boy on 02.18.15 at 1:02 pm
This post gave me gut pain.
Why don’t you sell it (if you can) and buy it back for 200 again in the near future?
Just a thought. Then you don’t have to worry about owing more than your house is worth as house prices drop.
“Do you consider a line of credit an appropriate emergency fund in the event of job loss? I have a year of living expenses myself in a high interest account (don’t worry, have TFSAs maxed, but RRSPs aren’t). Thinking of the opportunity cost of not investing that year of living expenses in something. But in the event of job loss, I’ve heard the bank is able to detect that you haven’t received a payroll deposit, and can then call you up and ask you if your employment status has changed, to which you must be truthful (otherwise it’s fraud). And when you don’t have a job, they can call your line of credit or crank up the interest rate.”
Like always it totally depends on your situation. For instance if you have 500K invested in the diversified portfolio, you probably have like 3-5% of that in cash (I.e. high interest saving account), which might make like 15-25K and is easily accessible during emergency (+ don’t forget that 500K portfolio yields you like 3% per year in income/dividends)
Also if your spouse is employed in a different (and perhaps safer) job, it brings your risk down
Using that RRSP makes sense if you don’t work for the most of the tax year (like maternity leave/continuing education and such)
#152 45north on 02.18.15 at 11:45 am
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Good link — it’s a shame there might be so much lost. Not sure why there isn’t an uproar in losing this publicly funded data.
Cato # 148,
“To simplify, for you and others with poor critical thinking skills, think of it if it were your own household. You couldn’t slash your income, while also continuing your present spending habits, could you? Of course not.”
“People who pretend countries are any different are ignorant of economic reality.”
———————————————————–
Scene opens: Morpheus sits with Cato…in a dimly lit room.
Morpheus: Do you want to know………what…it…is?
Cato: Nods, reluctantly.
Morpheus: MMT is everywhere…it is all around us, even now….in this very room…..
You can see it when you look at your fiat money, or when BNN’s on your television.
You can…feel it..when you work more than necessary…when you go to the church of The Greater Fool…when you pay your unnecessary taxes.
It is the real monetary world that has been pulled over your eyes, to blind you from the truth.
Cato leans forward: What truth?
Morpheus leans in: That you are a slave Cato…like everyone else you were born into a lifetime of unrecognized indoctrination…
born into believing sovereigns must constrain their $ spending or face certain currency collapse and that you must, pay your share of federal taxes, or a national bankruptcy would occur.
Lighting cracks in the distance.
Morpheus sighs: uhh…..Unfortunately no one can be…told what Modern Money Theory is……you have to research it for yourself.
Morpheus leans, offering two pills: This is your last chance…after this there is no turning back.
You take the BLUE pill..the story ends, you continue to post angry comments on economic blogs and believe…whatever you want to believe.
You take the RED pill, you stay in MMT land….and I show you how DEEP the rabbit hole goes.
Long dramatic pause:
Remember….all I’m offering is the truth, nothing more.
https://www.youtube.com/watch?v=68vVlN3D80Q
https://www.youtube.com/watch?v=zE7PKRjrid4
Blacksheep Productions Inc.
#86 ChickenLittle wrote:
“Honestly, when did a cold front become a “polar vortex”?!? Are we all going to get sucked up and deposited on Baffin Island? ”
I often laugh when I read the comments on this blog but this is one of the funniest comments I have seen in a long time. Really enjoyed this.
#147 Cato the Elder — “Government SPENDING has to DECREASE as well. Everytime the government spends a SINGLE DOLLAR it has to come from somewhere: debt, money printing, taxes, whatever it is. That means that an obligation that harms the private sector is incurred.
There’s three points here:
1) Government spending in Kansas has decreased. Note State payroll:
http://research.stlouisfed.org/fred2/graph/?g=11id
Note spending cuts:
http://www.newrepublic.com/article/121068/kansas-tax-cuts-deplete-budget-brownback-proposes-more-cuts
2) Arthur Laffer said the tax cuts would pay for themselves. This is akin to what YOU said in your original post, viz “What they should do is massively slash PUBLIC spending, slash taxes, and slash regulations. This will encourage capital to FLOW into Alberta, instead of fleeing from it.” If capital is flowing into Kansas and earning a great return, why are their tax receipts below projections?
3) Everytime the government spends a SINGLE DOLLAR it has to GO somewhere. Government spending is private sector income. This should hardly be news, but your arguments appear as if you think the government just sets fire to the cash leaving no tangible income or assets behind. You are (unless you live in a cave) surrounded by the results of government spending. We call it “civilization.”
“Everytime you show up, you take what I say out of context, or you fail to do adequate research in your attempts to undermine what I’m saying.”
I bring facts to my arguments. Cold hard numbers, cases, histories. You do a lot of arm waving. If places with smaller government and lower taxes are so much better, why don’t you show us with numbers and case studies, or move there yourself? Bring facts with your response, or don’t bother.
$10 oil? $20 oil? Who cares really? Let it ride back up to $100 per barrel for all I care.
With most of the country still paying over a buck per litre while oil is off over $100 per barrel from its historical high, it’s not like the Canadian consumer is benefiting to any meaningful extent.
Canucks ALWAYS get shafted by big business and their corrupt governments at all levels and accept it all like good and compliant little sheeple.
With 250,000 unnecessary fresh victims arriving each and every year, Canadian banks are foaming at the jowls while they chomp at the bit to lend them more government backed billions. These poor souls overcrowd 3 or 4 cities that don’t have anywhere near the resources, housing and infrastructure to accommodate them as our once pleasant cities are re-colonized.
Yay Canada.
Re: #165 Bottoms
You’re wrong about the free market and how it functions, as well as the proper role of government.
Yes, private companies are motivated by money – so are governments. Government’s are self-interested, just like people are.
We need an economic system that UNDERSTAND human nature – that all people are self-interested – and harnesses that FOR GOOD.
How does one acquire wealth in a free market? By providing goods and services to their fellow man. That’s it.
And all the various things you mentioned, pharamaceutical companies, etc., hurting people…those types of companies don’t last long. Why would a company want to kill it’s own customers? Would you buy from a company that conducted itself that way?
Businesses that survive and prosper do so by being honest with their customers and giving them value for their dollar. The ones that don’t die.
Yes, there is no perfect system. There will always be scammers, cheaters, and those willing to do harm for short-term gain. But take those very same evil people, and put them in a free market, and they get overrun very quickly. Give them the reigns of an all-powerful government with no competition, and they will wreak havoc over MANY more people for MUCH longer.
#87 Andrew Woburn on 02.17.15 at 10:18 pm
The above makes sense to me but leaves questions. When interest rates go up, the value of the Fed’s assets will decrease. The Fed can simply hold them to maturity but private corporations in this situation would have to write down the values to market. Will the Fed have to do this?
The Fed’s liabilities are assets on the books of major banks. If the value of the Fed’s assets are impaired by interest rate changes, will the commercial banks have to reflect this on their books? We could be looking at very large numbers.
Commercial banks don’t have any exposure to the treasuries and mortgage backed securities held at the Fed. The entire point of the Fed purchasing them was to remove them off balance sheets of the commercial banks.
Fed liabilities are largely commercial bank deposits. Rising rates has no impact on the USD value of these deposits.
The risk here is that if rates do rise, commercial banks may wish to deploy these deposits elsewhere to provide a greater return on capital (thus increasing the “real” money supply).
The Fed (as part of the 2008 emergency measures enacted by the US government) was given the ability to set the interest rate on excess reserves. This is how the Fed has almost quadrupled the money supply in a short period of time without stoking hyper inflation. Most of the money printed is sitting on the Fed’s balance sheet.
The real danger here comes when the Fed tries to unwind its balance sheet. Someone has to take these assets off the Fed’s books and who wants to buy trillions of dollars of essentially no-yield, long-term bonds or toxic, mortgage backed securities?
If they can’t find enough buyers the Fed is forced to continually monetize US government debt until the growth of the real money supply triggers an inflationary event.
I would bet one of the reasons the Fed will raise rates (even if the macro data suggests it should not do so) is to cause capital flight into bonds… particularly the bonds on their balance sheet.
“Can a minimal interest rate cut spook the Greater Fools so much? Is Toronto so overpriced that people are now looking North?”
It is not about the interest rates. This is just a continuation of the trend that started a few years ago, and you can also see it in the (very) far suburbs of Toronto:
People out-priced of Toronto core -> They bid for suburban Toronto and Townhouses/Condo in the Toronto core -> Prices go up in these assets -> builders respond with more supply (as there is no constraint of these types of RE) -> No buyers in Toronto core + oversupply in other RE types -> Bubble bursts
Eventually the bubble does burst because one or (most likely both) going to happen:
– Oversupply in the housing market outside the Toronto core detached
– No need for further construction, and all the construction jobs lost (creating less demand)
Garth, is it typical for the big-5 banks in Canada to charge interest on cash held inside investment accounts if the cash falls below a certain % of the account’s value?
Well I guess party on it is… jump in!
http://www.theglobeandmail.com/report-on-business/top-business-stories/torontos-housing-surge-prices-jump-10-borrowing-costs-ease/article23045404/
Canadian banks will win no matter what.
If the bank rate falls, they gain a bigger spread from their lenders. If the bank rate rises, they have an excuse to jack up their rate across the board. If a home-owner can’t pay their mortgage, CMHC usually picks up the tab, otherwise the bank takes all the equity, pays the legal bills, flips the house, and recoups a nice tidy profit. If the homeowner pays the mortgage, the bank has a nice slave feeding them money.
Banks also make a nice profit off charging 18% credit card fees, fees on RRSPs and other investment “products”, fees paid to their financial advisors, fees selling mutual funds, fees helping corporations through mergers and acquisitions and bankruptcies. Fees, fees, fees. Banks win no matter what. And they outsource their IT staff the the lowest bidder, pay tellers slave wages.
Banks win no matter what.
Do you consider a line of credit an appropriate emergency fund in the event of job loss?
I do this.
But you could lose your LoC at any time for any reason so you should only rely on the LoC if you have other liquid assets that you can access in a hurry.
If the price of oil doesn’t rebound soon, corporate profits in the sector could fall by as much as 30 per cent, Capital Economics economist David Madani predicted in a recent note, “prompting further cuts in business investment and staff payrolls above and beyond those already announced.”
P/E of majors is so ugly right now it’s just bout as bad as tech stocks at the height of the bubble. Either their stock valuations need to collapse of the price of oil needs to return to $100. Or some combination of the two.
#175 Yogi Bear — “The real danger here comes when the Fed tries to unwind its balance sheet. Someone has to take these assets off the Fed’s books and who wants to buy trillions of dollars of essentially no-yield, long-term bonds or toxic, mortgage backed securities?”
I agree with much of what you say, but not this. Those assets are only no-yield if the Fed sells them at a price near what was paid for them. If the Fed sells at a loss to yield at the market… then what? Who is out of pocket and needs to make up the loss?
#179 “Canadian banks will win no matter what.”
That’s actually not bad, as long as you are a shareholder.
#138 Holy Crap Wheres The Tylenol on 02.18.15 at 10:09 am
On the bright side have my place for sale here in Oakville, two days after listing have an offer. $1.45M. I’m probably going to take it. Now to look for a smaller nest with less responsibilities. Probably a small town-home near the harbor so I can walk to the boat!
On the sad side I fear that my home is destined for McMansionville. Its a big lot!
————
Well, I like walking to the Leamington Marina.
http://www.leamington.ca/en/discover/resources/GLCC_Habour_Image_July_11-16_2014.jpg
I was told by U.S. members of the GLCC (Great Lakes Cruising Club) that it is the finest marina they have been too.
Don’t know what kind of house you are looking for, but if you sell for that figure, you could probably get your ideal place, pay all boating expenses for years, and still have $1 million left to invest. Enjoy!
166 Bottoms_Up on 02.18.15 at 1:20 pm
My dad has made all those same arguments, and they do sound good on paper. But my issue with it is that 1400 a month, that’s more than I’ve ever paid for my mortgage, or anything really. I’ve never been close to that much in debt.
I have MS so I worry if my health were to go south I would suddenly have the prospect of the bank seeing a disabled person no longer able to work with 320,000 on the books.
#167 DisgustMadeMePost on 02.18.15 at 1:23 pm
I don’t expect the part of Alberta I’m in (Lethbridge) to experience a decline like the upward was. But anything is possible. The only reason the property tax value has gone so far up is that schools, a shopping centre etc. have been built walking distance from it.
I wouldn’t sell unless it worked for me, since its a 4 bedroom with lots of room for little ones to run around when they start to appear. Its a corner lot so I think the people that would be interested in buying it would be tearing it down to turn into a multi-unit infill to rent to university students (its walking distance to U of L).
#174 Cato the Exhausted (Elder)
Where is that magical “free market” that “UNDERSTAND human nature – that all people are self-interested – and harnesses that FOR GOOD”?
In which country, in which industry?
In Edmonton, I have noticed we have 4126 ads for houses for sale, up 200% since december. Crazy! Maybe the average price will correct to me realistic levels, just saw on TV that the average person is savings ZERO for retirement partially because of the overinflated rent and housing costs, rent and housing needs to decrease. For the sake of society.
I saw a two bedroom condo on MLS selling for 444, on Avenue and St-Clair. I thought was a reasonable price for Toronto.
Of course there’s was something…the fee…. … 1700$ per month. Try to sell that. I expect 24/7 on-call special massages for that high of a fee.
This city is mad. Lots of condos with fees that exploded to $750-1100/month.
“no rush to hike” – fed
ok , maybe in 2016.
I have to agree with FED UP #173.Its planned since the early 1970’s.Divide and conquer.The best you that you can do is accumulate wealth and leave to a more affordable ,sunny and warm country.
Its very sad that we have 1,400,000 people out of work and it lets in over 250,000 a year.Not to mention it worsens are already deplorable health care and infrastructure.Travel the world and try to find your ideal place to live.I met a 29 year guy in Bali and lives there 8 months a year.He works only 4 months a year and says he loves living this way.
#170 Blacksheep on 02.18.15 at 1:29 pm
That was hilarious.
Best,
HD
Fed just blinked. On the wire now.
There
Fed Minutes released. As you can see….NO RUSH TO RAISE RATES IN US.
Can we now go back to “next year rates will raise” please?
That’s in line with the last 7 years and lines up with my prediction of Canada and USA doing the same thing as Japan.
““Take the cash as return of capital. The mix of dividends, interest and cap gains will fluctuate over time. — Garth”
Does this not lead to depletion of the original investments?
Why would it? — Garth”
Well, if you keep withdrawing your gains, then your investments would never grow! And in low growth years, your would be selling your principal, no?
Fed hiking rates may not be as slam dunk as garth would have everyone believe.
http://www.nytimes.com/2015/02/19/business/economy/fed-january-policy-making-meeting-minutes.html?partner=socialflow&smid=tw-nytimes&_r=0
#179 Lillooet, BC on 02.18.15 at 2:02 pm
Canadian banks will win no matter what.
If the bank rate falls, they gain a bigger spread from their lenders. If the bank rate rises, they have an excuse to jack up their rate across the board. If a home-owner can’t pay their mortgage, CMHC usually picks up the tab, otherwise the bank takes all the equity, pays the legal bills, flips the house, and recoups a nice tidy profit. If the homeowner pays the mortgage, the bank has a nice slave feeding them money.
Banks also make a nice profit off charging 18% credit card fees, fees on RRSPs and other investment “products”, fees paid to their financial advisors, fees selling mutual funds, fees helping corporations through mergers and acquisitions and bankruptcies. Fees, fees, fees. Banks win no matter what. And they outsource their IT staff the the lowest bidder, pay tellers slave wages.
Banks win no matter what.
…………
So my question is, why don’t you own them..
Re: #172
I’m not going to delve into all the follow-up articles you post. The first one you posted from wikipedia clearly stated that they were going into deficit.
Here’s the thing – how badly would the economy have suffered WITHOUT those tax cuts? Probably far worse. It is impossible to predict what may or may not have happened, but economic history has shown time and time again that tax/spending cuts help an economy. This can be seen by the top countries in the world, which all have relatively smaller governments:
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita#List_of_countries_and_dependencies
What should be done with the money instead? Give it to bureaucrats who have no emotional attachment to its’ proper allocation? Or allow those that EARNED it in the first place to keep it and spend it how they want? I say the latter. Especially business owners – if they were smart enough to earn the money in the first place, they will know what to do with it, and will most likely use it to grow their business further – employing people, buying and selling things.
http://freedom-school.com/money/how-an-economy-grows.pdf
If you read that comic, you’ll be more educated in the realities of true economics than almost any Keynesian PhD on the planet (including nobel prize winning idiot Paul Krugman).
Every time the listing go up one house in Alberta, that was one family that all on their own were forced to accept a new reality. That’s hard to see behind these numbers sometimes. A mom in tears, a dad with nothing left to say. Scared kids wondering what’s wrong. That’s what bothers me about this crisis.
#162 Puzzled Alberta Boy on 02.18.15 at 1:02 pm
This post gave me gut pain.
Why don’t you sell it (if you can) and buy it back for 200 again in the near future?
Just a thought. Then you don’t have to worry about owing more than your house is worth as house prices drop.
++++++++++++++++++++++++++
OR how about……
sell it, then go back in time and repurchase it for $200k, do this about 5 or 6 times and then retire in Mexico with$2.4 Million!!
“Canadian banks will win no matter what. “
That’s basically been my view, and I’ve expressed it for years. In fact, the banks at this point may very well *want* price decreases on RE, as it gives them justification to increase the risk premia they charge on all residential real estate backed loans. Including the recent event of refusing to lower the bank-set “Prime” rates to reflect the full BoC policy rate cut.
Ordinarily, banks would fear default and would work with customers to avoid default, even if such meant restructuring loans, holding the line on punitive interest rate increases, etc. But with the CMHC in the picture, with the subprime mortgage insurance, the banks have zero incentive whatsoever to ‘negotiate’.
However, one big risk with the banks is that the government pushes back. Whether through the CMHC, or in regulations/taxes. Given what happened to the Canadian banks’ stocks in wake of Paul Martin’s decision not to allow bank mergers in the 1990s, this should not be trivialized.
“P/E of [oil] majors is so ugly right now it’s just bout as bad as tech stocks at the height of the bubble. Either their stock valuations need to collapse of the price of oil needs to return to $100. Or some combination of the two.”
P/E’s can remain high on out-of-favour cyclicals for a considerable period without anything bad happening to their stocks, or oil prices returning to their highs. However, technology companies, particularly mature ones, don’t have anywhere near the same benefit of cyclicality. Most don’t even have enduring assets to back them, and few contemporary high-flying tech companies have significant barriers to entry in their respective businesses.
So the comparison really is a bunch of nonsense, IMHO.
“Is this is any way a sound idea or am I better off politely stalling him until I either sell the place to upgrade as my relationship moves toward marriage, or is this an idea I should buy into?”
Its a minefield if your spouse is not fully on-board. And leverage is something that should never be ‘pushed’ by someone, whether a relative, or by a financial advisor, upon an individual investor.
Having said that, with your metrics, a relatively conservative program, with perhaps 20-30% (tops) of your home equity, probably could be appropriate. Much more than that is very risky, and quite unnecessary. Any investment you buy, in and of itself, should be able to support the credit itself (ie: don’t buy assets that are illiquid and you can’t obtain credit against the asset itself!). Assets with strong correlation to the housing market (ie: bonds, REITs, etc.) should be avoided.
Do lots of research, and take it slowly would be my advice.
This is rather ridiculous! I wonder if he means this year……….
http://business.financialpost.com/2015/02/18/joe-oliver-says-federal-budget-could-come-in-may/
Steve#197
The only people that should be worried are the ones who over extended themselves .
The people who put down a decent down payment and were living responsibly will lose a paper gain but after this correction will still come out ahead .
I sympathize with family’s having to move but not with greedy people.
Garth – never any mention on Mtl or QC, show some love!!
#184 Puzzled Alberta Boy on 02.18.15 at 2:46 pm
What are rents worth in Lethbridge?
Maybe with health concerns you’d do better to sell, rent and invest the 400k.
Although, if you can swing the time machine thing, that’d be good too :))
#183 cramar on 02.18.15 at 2:46 pm
____________________________________
Leamington is in a very nice area, always loved the Lake Erie area for boating. Tons on nice towns between Fort Erie and Windsor to snug into when the nor’easter blows.
God I miss boating right now!
A new nest of hungry home buyers have just been appeased!
http://business.financialpost.com/2015/02/18/fed-officials-feared-raising-rates-too-soon-would-dampen-recovery/
I would not put too much stock in this. — Garth
P/E’s can remain high on out-of-favour cyclicals for a considerable period without anything bad happening to their stocks, or oil prices returning to their highs. However, technology companies, particularly mature ones, don’t have anywhere near the same benefit of cyclicality. Most don’t even have enduring assets to back them, and few contemporary high-flying tech companies have significant barriers to entry in their respective businesses.
So the comparison really is a bunch of nonsense, IMHO.
Nowhere did I say this was happening next week, or even next month. You said it yourself, they can remain this way for a “considerable period of time”, but that implicitly means you agree that the current P/Es are unsustainable.
So I am sorry you wasted so much time writing a completely pointless post.
187 Poutchli on 02.18.15 at 3:03 pm
$1700 fees for a two bedroom? Is that true?
I’ve never heard of such a thing. How is that possible? How old is the building?
#197 Steve on 02.18.15 at 3:32 pm
Every time the listing go up one house in Alberta, that was one family that all on their own were forced to accept a new reality. That’s hard to see behind these numbers sometimes. A mom in tears, a dad with nothing left to say. Scared kids wondering what’s wrong. That’s what bothers me about this crisis.
______________________________
awesome post.
That would be a punt…..oops.
http://www.theglobeandmail.com/report-on-business/international-business/us-business/fed-minutes-reveal-officials-worried-about-raising-rates-too-soon/article23049961/
Puzzled Alberta Boy,
In theory it makes sense to take on debt to invest. Just remember that there is always risk and leverage (debt) acts to multiply that risk as well as the potential reward.
I’m slightly risk adverse (especially with the current state of the market) and as such I would not personally take out debt to invest at the moment. You can still go secure that HELOC (costs you nothing if you don’t use it). You can then set up a small self directed account and you’re ready to act when the time is right. Just remember to stick to a balanced portfolio similar to the one Garth suggests.
A new nest of hungry home buyers have just been appeased!
http://business.financialpost.com/2015/02/18/fed-officials-feared-raising-rates-too-soon-would-dampen-recovery/
I would not put too much stock in this. — Garth
++++++++++++++++++++++++++
That’s true, you never recommend stocks.
#137 Toronto_CA on 02.18.15 at 10:06 am
“Also, Garth posted about using a RRSP as emergency cash in the event of job loss. Maybe I misunderstand, but anything above $15k is penalized at 30%, and then you are taxed on that entire amount (i.e. no tax credit for that 30% withheld). Am I mistaken? ”
You are mistaken.
This explanation is worth expanding on because it seems to be a recurring misunderstanding in the comments.
If you withdraw money from your RRSP in a year when you’re unexpectedly unemployed, the trustee must withhold a portion (up to 30% – google it). This withholding is just like the money your employer takes off your paycheque for income taxes. Those dollars aren’t your actual taxes, merely a good estimate of what your taxes will be at the end of the year. That is the purpose of completing a TD1 form when you are a new employee – so the employer withholds the right approximate amount. Only when you complete your tax return the next year do you determine your true taxable employment income. This amount should be close the sum of the amounts withheld during the year from your paycheques.
With your RRSP, the trustee is withholding on a similar basis – it is not a penalty for early withdrawal or anything of the sort. So, if I have a $100K RSP and didn’t earn a dime in 2014, I could withdraw the whole thing, but would have 30% held back. Then when I do my income taxes, I’ll figure out what I really owe and will get a refund or make a payment to balance it out! That includes my basic personal deduction + any others that apply and eventually applying the appropriate tax rates.
Just like with your employer does with your paycheque, the trustee sends the money to CRA just so you don’t get any funny ideas.
That dude needs to drink better quality beer.
http://calgaryherald.com/business/energy/oilsands-mining-future-bright-says-earthmoving-contractor
Yer submit button works 50/50 ..like many predictions on here!
Stop using your tongue. — Garth
Oil reserves are UP and the price of oil is DOWN. Alberta is finished. Oh….. if oil goes up by $25-30 Alberta will be ok. IF and that’s not going to happen anytime soon. In the mean time MORE layoffs and MORE people going bankrupt and losing their homes. Throw in mad cow and Alberta is finished.
It is true- you are not human if you do not feel for the terrible plight of your fellow man when he finds hardship. However- there have been many sign posts on the road that have pointed directly to the collapse we are seeing. They were warned if they only had ‘eyes’ to see but instead they buried themselves in hockey pools, jacked up trucks, and ridiculous debt loads. Now it is time to pay the piper and for those that saw it coming it will be their day in the sun. The game of life is filled with winners and losers- money is not created or destroyed- it merely goes from weak to strong hands. unfortunately we are not even close to the start of the calamities that will follow this year. Everyone blindly screams- “stop with the doom porn” It is not doom at all for me. Garth mentions that- “Everyone thinks they are an expert” Well there are a few on this site that are. Are still trying to warn the sheep of the emending debt bubble that will be greater then a nuclear bomb. Millions will lose everything a handful will gain it. Diversified- is for people who don’t know ‘wtf’ to do. Gold is for Kings, Silver is for Gentleman, Paper is for Sheep. Which one are you?
German broomsticks holding the line!
http://www.telegraph.co.uk/news/worldnews/europe/germany/11420627/German-army-used-broomsticks-instead-of-guns-during-training.html
#156 Mike S
Thanks for the link, that is interesting… I was aware the program had been altered, but did not know the details.
I would wager not too many inhabitants of Van or TO are yet aware of these recent immigration rule changes and the broader implications for downward pressure on housing prices in the metro centers in particular, going forward.
Like a financial instrument disclaimer “past performance may not be indicative of future performance”, just substitute “past immigration numbers” for past performance, and “future immigration numbers” for future performance, and we have a whole new ball game.
“Oh….. if oil goes up by $25-30 Alberta will be ok.”
It’ll take more than $30 to ‘save’ Alberta because even at $80/barrel, Alberta’s RE market was already quite weak. And now that confidence has been shaken, the people who make the investments are likely even more gun-shy than they were previously.
Nothing less than the long-term futures for oil being $100+ will likely revive the unconventional oilpatch. Including most of the shale producers.
I live in Edmonton. A good friend does hotshot in the oil industry. Layoffs are happening AS I TYPE THIS. It’s no joke, nor is it something fake. My buddy is severely distraught. He’s got only 20% equity in his home and is in his 60’s and felt first hand the down turn in ’82. He knows what’s coming and is afraid. No joke.
There are a number of speculators about “why” oil is falling: Russia, Saudi’s, shale…. but truth is, it doesn’t matter what the reason is because the fact that it is allowed to fall and correct so much means that fundamentals weren’t lifting it in the first place. That’s also true with real estate. Once the correction grabs hold, everyone will start to blame banks/realtors/brokers and the government, but will not look in the mirror and admit they took the housing bait.
Rona is also in deep trouble around here. Stores are closing. If that doesn’t tell you something about housing, then I don’t know what does.
#205 Holy Crap Wheres The Tylenol on 02.18.15 at 4:34 pm
A new nest of hungry home buyers have just been appeased!
http://business.financialpost.com/2015/02/18/fed-officials-feared-raising-rates-too-soon-would-dampen-recovery/
I would not put too much stock in this. — Garth
………
Well I’m not so sure.
Holly Crap Tylenol.. Your no comment re Roswell said alot.
http://business.financialpost.com/2015/02/18/mortgage-risks-lingering-in-the-shadows-from-non-regulated-lenders-says-cibc/
“The risk we are facing today is that increased regulations on major financial institutions, combined with even lower mortgage rates, may work to widen those shadowy margins,” CIBC World Markets economist Benjamin Tal said Wednesday.
There are also concerns that the growing reliance on non-regulated, non-deposit taking institutions — those offering non-prime loans, in other words, above the going rates but with less favourable terms — will stretch consumers’ ability to meet their payments.
“If you are a regulator, and you are imposing more and more regulations on those that are regulated, those financial institutions cannot do all the business that they want to do. So, if there’s something left on the table, and somebody else is taking advantage of that — and they’re not regulated,” Mr. Tal said in an interview.
‘To me, this is not a zero-sum game. In many ways, we might actually increase the risk profile in the market because more business is going to the unregulated part of the system.”
At present, so-called non/less-regulated lenders represent nearly 5% of Canada’s mortgage market, according to the CIBC study.
In Ontario, they account for just over 8% of all new mortgages.
“But so far, it [non-prime lending] is not big enough to derail anything, but maybe it will grow,” Mr. Tal said.
Forgot to mention the thing about Rona:
There is a store closing and I know the GM of that location. He told me that the way Rona tracks sales is not when someone buys a product and walks out the door, but when head office / distribution in Quebec sends the item to the store!
He said that he has 5 years PLUS of plumbing supplies at his location. He said head office kept sending him goods, which he can’t refuse. They eased the payment terms, but wanted to stoke how sales were measured, so kept sending him product that he didn’t ask for. The whole thing is a sham.
162 Puzzled Alberta boy.
Hey that’s great you are nearly mortgage free. Last thing you need is a heloc. Obviously you have extra cash flow to have knocked off the mortgage in 10 years. Take that extra cash plus the mortgage payment you no longer have and start to build yourself a garth portfolio. Enjoy the clear title and no borrowing
#218 Blowhard on 02.18.15 at 6:39 pm
Ref. your friend in his 60’s…
I find it disturbing to hear of folks in their 60’s with still a mortgage. I’ve heard of so many couples in their 50’s and 60’s who had paid-off homes, only to go buy another house and inherit another mortgage. Why? answer I’ve mostly heard – “because I worked hard and deserve it.” And also…”well I’ll keep working into my 70’s”.
WTF is a matter with us Canadians? Don’t we want to retire a mortgage no later than 50 so that the money can now be redeployed into income assets (stocks, bonds, etf’s, etc.), in order to give some monthly income?
bottoms_up: it’s a shame there might be so much lost.
the site is still up:
http://sis.agr.gc.ca/cansis/index.html
the standards police have threatened to take it down for 10 years, so far common-sense has prevailed
there should be a non-withstanding bill to exempt it from the standards
Captures what RE is becoming.
Dawgs, for those of you who may not already have seen it, your chuckle for the day:
https://www.youtube.com/watch?v=SHptn_3RyYE
#197 Steve on 02.18.15 at 3:32 pm
“Every time the listing go up one house in Alberta, that was one family that all on their own were forced to accept a new reality. That’s hard to see behind these numbers sometimes. A mom in tears, a dad with nothing left to say. Scared kids wondering what’s wrong. That’s what bothers me about this crisis.”
I am pleased to know some here feel sorry about what is happening to people.
I think that credit is addictive for many. They try it for a while and can’t stop. They are encouraged by governments, lending institutions, corporate marketing and the media to “Spend, spend, spend! – Oh and buy lottery tickets, everyone! It’s such fun!!”
There was a time when loan sharking and the numbers game was illegal for good reasons at the time.
There’s a link below to a long article by the finance minister of Greece, written a couple of years ago. Try not to blow a blood vessel when he mentions Marx, you crusties :-) Imagine how this stuff will appeal to a large number of newly impoverished fellow citizens:
http://www.theguardian.com/news/2015/feb/18/yanis-varoufakis-how-i-became-an-erratic-marxist
Here we go…! TD is on the bandwagon, now.
TD forecasts Calgary’s ‘oil-driven’ housing sales will plunge nearly 50% this year
http://calgaryherald.com/business/real-estate/calgary-mls-sales-forecast-to-plunge-nearly-50-this-year?__lsa=f61c-c71d
“Canada to pay entire cost of Detroit-Windsor US Customs plaza”
Is it possible that the U.S is looing at Canada and its smug media and apparently generally well to do populus (home owner wise anyway) , and considering that if canadians want to trade with the Americans then, “Build your own Bridge”….
After all, for 100 years 1/2 the compies that built the Ontario economy were American. That somewhat benefited U.S but was everything to Ontario Canada.
Everything has its day…
Ontario had a robust industrial economy for the last 5-10 decades but the cracks appeared 20 years and widened considerablly in the last 5 years.
I’m forcasting that the next 20 years are going to see a greater deterioration of this industry in Ontario and a positive but slow recovery to industry in the neighboring states like Ohio and Michigan.
Labour intensive industries simply can not afford to do business in Ontario with high energy costs and households requiring a salary of 60,000+ / year.
I’m getting a kick out of all these folks talking about working past 60 like it’s a walk in the park. For the most part you’re going to be a curiosity no matter how adapt your skills are. If you’ve been doing computer work for years your eyes are going to be sore and your knees won’t be the greatest either. Sure you can dye your hair and get your teeth whitened but you can’t fool the kids. I know, Im 62 and there’s no one even close to that age. Listen to Garth…