Mighty BeeMo will be the first bank to report quarterly earnings. That happens Tuesday. The stock is trading about where is was eight years ago at $77. In the financial crisis, when the world was ending, it plunged to $24 during a wave of moaning, gnashing and selling – almost exactly six years ago.
Any investor smart to buy on that dip has made 220%, and collected plump dividends every ninety days (the bank pays 4.14%). It was a spectacular play, as was buying into the TSX, the Dow or the S&P back when the gold nuts, doomers, nihilists and pantywaists were telling you to invest in ammo and tuna. Now they’re at it again.
I’ve noticed a bunch of people, mostly American investors, shorting the Canadian banks. (Shorting means borrowing a security and selling it, so you can buy it back later – you hope – for less. You make money by pocketing the difference. Or, if you get it wrong, you take a loss.)
This shorting has been going on for a year or so as the Canadian economy gets weaker. It’s picked up momentum as oil plunged and serious doubts were raised about the sustainability of our hormonal crush on the real estate market. At the same time, manufacturing activity slowed, the Bank of Canada blinked and the dollar tanked. Then, in November, the economy actually shrank. The shorts came in with a vengeance.
On Friday a US brokerage cut its recommended weightings in the Big Six, and said this: “We believe consensus estimates for the banks are too high and the shares will be pressured during the year as the Street moves its estimates down. While we admit that the strong dividend yields for these banks may help to provide some downside support, we do not see a positive catalyst for the group this year.”
By the way, Beemo stock topped out at eighty-four bucks last autumn, so you can see there’s been some erosion from that all-time high, because of $49 oil, blood flowing in Calgary gutters and events like Shell’s decision Monday to pull the plug on a major project outside Fort Mac. The banking sector as a whole has lost about 5% in the last three months. The shorts now point to slowing volumes for new loans and mortgages, thin margins – especially after the central bank poodles cut their key rate a quarter point – and the growing concern Alberta’s housing markets will crash.
So, what’s happening? The big six banks, obviously, form a kind of proxy for the entire Canadian economy, since they have their fingers everywhere. And the shorts are getting bolder. The Bank of Canada will cut its key rate again, they say. Maybe March. Or perhaps April. But it will come. The dollar is mired under eighty cents again, and oil has retreated below fifty bucks. Oil patch layoffs are turning into a quiet tsunami and the announcements by majors like Shell and Suncor are unnerving.
The shorts are also watching Calgary, where a year ago luxury house sales were setting new records and realtors were cocky. My, what a difference a few months make, as you can tell from this chart:
Calgary sales are currently 35% behind last year, while active listings hover in the 5,500 range. So far in February there have been only 880 sales, with the average house price starting to nose down – off about 4% to date. As local reator-statsfreak Mike Fotiou points out, the issue now is not so much new listings (they are levelling off), but rather the shocking exodus of buyers.
“The main concern now is that buyers have gone AWOL. Home sales month-to-date are down -35% from a year ago and 1/4 lower than the 5 year average. This gives rise to the question: are buyers simply being cautious and waiting on the sidelines or have they been directly affected by the economy and can’t buy? If the answer is the former then there’s a chance the market can turn around later in the year, the latter means it’s going to get worse.
“Whether too many sellers or too few buyers are the root cause for growing inventory, the net effect will be the same: a disproportionate amount of listings to sales which will drag prices down.”
By the way, last year in Cowtown one of every three houses sold at listing price or above. This year it’s about one in every ten – and the aggregate number is far smaller. Meanwhile in Fort Mac, the January sales numbers were so brutal (the locals say) that the real estate board has just disabled the link to their market update. Yikes.
So, are the banks going to wear all of this? Will the earnings numbers suck enough to pull stock values down, say, ten per cent? Is this all as serious as the shorts are making it out to be?
Let’s hope so.
Update (Feb. 24, 8 am EST): Bank of Montreal profit drops 6%.
249 comments ↓
I was short the big banks. I have already settled my position. I’ve learned to expect the unexpected, so I’ll play the speculation of the news, not the news itself.
Any chance of the Big 6 lowering their dividends?
None. — Garth
“Let’s hope so.”
I am sure you meant “Let’s hope not.”
I lived thru the 1981-84 housing price plunge in Calgary and am now watching from afar. Will history repeat?
Our banks can up the withdrawal fees on ATM’s by a buck, any weakness in economy hurting bottom line will be erased in seconds. Only 5 big boys here.
Anyone shorting Canadian Banks are idiots.
Cross-country summer driving on the way…..
I hope the banks go down 10per cent so we can all back up the truck
re photo: that plate looks like it’s from Wisconsin. Home of the GREEN Bay Packers :)
This is getting laughable – didn’t they just get their last minute reprieve on Friday?
http://business.financialpost.com/2015/02/23/greece-to-miss-monday-deadline-for-sending-reform-list-to-creditors/
I do think Greece will find a way to fail. They are the Toronto Maple Leafs of Europe.
Alberta is the next detroit. Alberta RE is so going to CRASH so hard that it will expose the RE ponzi in Canada.
Look Alberta you are finished
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/shell-pulls-plug-on-long-delayed-oil-sands-mine/article23153131/
Every day that oil is under $50 is just more losses and cancelled projects and such. THANKS to conservative stealing and wasting all that oil money Alberta is finished and will suffer economic ruin. Conservative times are hard times always have and always will be. Good choice Alberta. There is no running from this Alberta.
There can be all kinds of reasons for bank earnings to be stellar or not, and bad loan provisions are never something any bank likes to disclosure in their financial statements. Hard to believe there won’t be some impact given the problems Alberta is facing as well as the closure of retail outlets like TARGET.
Who is going to make the payments on those $80,000 truck loans in Ft. Mac? Or the homes, the rental homes, the vacation homes, the other toys. It’s still early days since this crisis broke open. Where is Juanito? Tell us what to expect after spring break up please..
Mr. Turner,
Good News!
http://www.castanet.net/news/Kelowna/133612/Financial-literacy-rocks
Raymond James is on tour.
I guess financial literacy is being taught in schools?
If you have a comment on this I would like to hear it…I think Raymond James is a great organization.
OOoo!! Realestate agents JUST knocked on my door to see if we’re interested selling! That’s weird! I’m renting a house in Vancouver Metro. Didn’t tell the agents that :)
It woukd seem that The buyers can’t leverage one home to buy two others anymore. Calgary may be the test case for the newly created real estate investor class.
Bank action could be fun. No dog in this one for me. But Where have the big six buyers gone?
Most of the ‘shorts’ are also taking a de facto CAD$ short position because they’re selling their borrowed shares on the NYSE in order to implement their shorts.
Although it may have been a profitable trade in the short term (no pun intended), the record of the Canadian banks, especially in RE decline periods, is impeccable. Most of them at least tripled and some quadrupled and quintupled in the 1990-2000 interval. Shorting the Canadian banks, backed by nearly a trillion dollars worth of CMHC subprime mortgage insurance, is like playing with fire.
I picked up some TD shares a couple of weeks ago, up 3% currently, interesting to see what happens when they report.
Keeping an eye on BMO, will snap some of them up if they tank after their quarterly reports.
And yes Garth, I know I should stay away from individual stocks, but it’s only about 1-2% of my portfolio.
Buy low, sell high, and don’t panic like the rest of the sheeple!
Garth. How low do you think the canadian dollar will go? How long will it stay low?
Thanks garth I used to be a clueless gold bug and boy what a waste of time and use of money. Btw Garth is right about the US going back to boom times. Ask anyone working in the car industry and they will tell you the car manufacturer’s can’t build fast enough or maintain the need parts to build. We are truly lucky to have someone like garth who sees at least two years ahead of everyone else (buy US and sell Canada
Does this mean that the HMS CMHC is going to begin tossing taxpayer life jackets to drowning banking CEO’s?
The tone of this blog today sounds negative.
Run!
Any setback in Calgary prices will only be temporary. As oil depletes, Calgary RE is well positioned to do very well in, say, 10 years.
Primo!
This quarterly economic forecast provides highlights of the Provincial Outlook report, which presents the short-term outlook for Canada’s provinces.
Document Highlights
The long-awaited economic improvement for Atlantic and Central Canada lost momentum as key economic indicators disappointed in the first part of the year.
The forecast, however, is positive as we head into 2015. The U.S. economy is on a strong footing and that should help spur business confidence here in Canada.
Unfavourable conditions in the agriculture sector will be holding back economic growth in the Prairie provinces this year with real GDP advancing by less than 1 per cent in Saskatchewan.
The top-performing provinces next year will be Manitoba and Alberta.
———————
Alberta! Alberta ! $#@%%^$##!@ FINISHED i say!
I like how the post ends – lets hope hope :)
But those investors are probably dumb. They should’ve been shorting apple, not beaten canadian banks. They going to sell all tuna and ammo they bought in 2008, short Canadian banks along with oil and buy Apple shares on max leverage broker would allow.
Mirror reflection of 2008.
Canadian banks are gold. As you know politicians look after the interests of the banks. They hope to get positions on the various boards of directors after their political lives are over.
I’m not too surprised…in fact I actually expected this would happen earlier…about a year ago. I’m no expert, but things look scary to me anytime the major part of an economy is only riding on two sectors, especially if they appear to be running on “borrowed” time.
First
Why does MSM continue to act as cheerleaders for the R/E industry?
http://calgaryherald.com/business/real-estate/calgary-housing-prices-trend?__lsa=b7e8-8b05
Hagerty said the current rental vacancy rate in the city remains low. That combined with some of the lowest interest rates in history and still good overall consumer confidence will keep the real estate market healthy.
“I would say based on this, housing prices should continue to see a slight positive gain. Unless there are reasons for sellers to take a substantial decrease, most would not do so. Why would you want to lose 10 per cent on your real estate value when you can lease out for a premium based on such low vacancy rates?,” she said.
Why doesn’t the Calgary Herald call up CREB and ask them why they stopped publishing last year’s stats? Why are they presenting a massive information problem to somebody pondering the biggest purchase of their life? Terrible reporting.
Hagerty fails to point out that credit worthiness is now the issue here in Alberta as the job cuts tally up and the price of oil is half of what it was 8 months ago. Low rates don’t help if you don’t have a paycheque to meet mortgage or rent commitments. Money is becoming more precious in Alberta. Expect rental rates to fall over time.
Why would anybody listen to a realtor about the status of the real estate market? Their livelihood depends on a busy market with high sales prices. Of course they will advocate that “now is the time to buy!” right until the bubble pops. And in YYC, we are definitely in a R/E bubble.
Let’s hope so.
HUH ????
Typical.
http://www.theguardian.com/environment/2015/feb/21/climate-change-denier-willie-soon-funded-energy-industry
Climate change deniers are either ignorant, stupid or criminal.
Sadly, some of the naïve greater fools on this blog pick up on the work of corrupted pseudo-scientific criminals like Soon and think it justifies their positions.
Dupes.
In other news, Broadbent Inst and PBO coming out strongly against increase of TFSA limit to $10 000 in upcoming budget. CTV Power Play, last 10 minutes.
“Will the earnings numbers suck enough to pull stocks values down,”
pull stock values down
pull their stock’s values down
We shall see if the shorts are right or give us a gift. Pretty sure I know what garth thinks.
More fun.
Breaking News: “OPEC president highly likely to call an emergency meeting if oil rout continues.”
As I predicted about a month ago, OPEC nations are getting only about half the normal oil revenue, therefore, its only a matter of time before they meet and cut production. Saudi Arabia has talked tough but the other OPEC nations are feeling the heat due to drastically lower oil revenues.
And when OPEC calls the emergency meeting, watch the price of oil (WTI and Brent) jump about $10/barrel and they quickly rise to the $80-$90 range again. Should be interesting.
http://business.financialpost.com/2015/02/23/opec-president-highly-likely-to-call-emergency-meeting-if-oil-rout-continues-ft/
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
Shorting : the upside is a double and the downside is bankruptcy.
Dollarama’s stock notched a new high today. I was targeting 64-65 anyway.
I think this is one of those doomer stories to which you refer
http://seekingalpha.com/article/2938716-big-short-ii-can-canadas-largest-banks-absorb-increasing-defaults-from-a-real-estate-crash
I’m confused too. You want the shorts to be right, and you want a 10% pullback on bank stocks?
http://www.cbc.ca/radio_template_2012/audiopop.html?autoPlay=true&clipIds=2654274367
“giving directions in vancouver”
#12 Babblemaster
Any setback in Calgary prices will only be temporary. As oil depletes, Calgary RE is well positioned to do very well in, say, 10 years.
——————————————————————–
Oil prices have a 30 year cycle (approximately) along with other commodities. It will be 15 years before Calgary does well again. The last time the Saudis pushed the price down to kill competition was 1986, which was 29 years ago.
Now is the RIGHT time to sell baby. Calgary prices have likely a long way down ahead. Sell now or lose all your equity for ever.
http://www.bnn.ca/News/2015/2/23/If-youre-going-to-sell-your-Calgary-home-do-it-now-prices-may-drop-20-percent.aspx
Non-Remax opinion here.
No comments from the peanut gallery. Much too busy popping corn, on a hunch this is not the usual plot twist with which the front row audience has become accustomed.
#26 Lillooet, BC on 02.23.15 at 8:14 pm
—-
Must be a lot of BC bud growing up your way.
The head of OPEC is Nigeria. The power behind OPEC is Saudi. Its a meaningless meeting just for show.
The corporate heads in Calgary are girding for a multi year low price environment. They would never shelve any project if they thought prices were coming back in a few months because these things are giant construction projects that take a lot of work to start and stop and restart.
On top that you are missing the biggest factors of all. Firstly production is not stopping, so supply outstrips demand still and storage is filling up all around the world instead of halting production. Secondly, this environment is going to be played for all it can be to break Russia and Iran. Only another 6 months or so and both will be on their knees.
You have the internet right?
OPEC *might* have an emergency meeting… if not, see you in June…
If the Americans are shorting the Canadian Banks, that could mean that the value of these bank stocks have increased. Once the shorts stop, the value of the bank stocks will rise.
Once the Ukrainian crisis is over and the Saudi’s turn off the taps, oil may just go up in value again and the Alberta energy sector will get back in gear.
I always love to hear people talk down at those “doomers” that didn’t buy at the bottom of what would become the greatest bailout of the “markets” in the history of all mankind. Saw that coming did-ya Garth?
Well, the jury’s still out on whether the 25+ trillion in credit and monetary expansion will pull the world out of the depression. I remember many of the smartest guys in the room talk about new highs in the “markets” and housing was fairly valued and all those that were warning about a collapse…doomers in 2007.
5 Years from the lows of 2002 the doubling the national debt, ultra low artificial interest rates, and credit expansion never seen before had everyone sitting on paper gains feeling like geniuses. I’d say if you think this time is different than margin up and triple down.
I’ll stay with accumulating GOLD!
Yes, that’s done so well since 2011. Down $700 an ounce. Ouch. — Garth
“I rent my Toronto house, paying less than four grand a month for a $2 million pile I could purchase with cash. But with a portfolio making over 8%, why would I? The landlord’s subsidizing me bigtime.”
Hey Garth, does your landlord read this blog?
Garth does your last sentence means That if Banks are down by Say 10% it Will Be a buying opportunity?
I never explain myself. — Garth
[…] Source: http://www.greaterfool.ca/2015/02/23/the-shorts/ […]
Alberta is finished,
You need to take a breath and go out for a walk. You are borderline delusional
Why are gas prices so high, with oil so low..saw 127.9 today in Surrey
“Why does MSM continue to act as cheerleaders for the R/E industry? “
Because “MSM” is bought and paid for by advertisers who are dependant either directly on RE (ie: look at all the Realtor-sponsored pages in a typical Saturday edition!). And/or paid for by purveyors of high-priced merchandise whose demand is inflated by HELOCs and freely available mortgage credit (BMW’s, 5-blade razors, pick-up trucks that really aren’t built to go off-road, fancy foods and toys, etc.).
This is why the denials of RE dropping for much of the past 2 years can actually run so deep, despite growing evidence of such. The sheeple would rather watch TV and have it spoonfed to them, than simply trying to understand some data and the meaning of the “sales mix”.
Very interesting what #19 said about CREB and Christina Haggerty. I didn’t realize CREB removed last year’s stats. Geez. CH website pretty much dictates she is only interested in buying/selling in downtown Calgary. If anywhere is going to rent or sell, it’s there. But they’ll feel the pinch too. Who is so naïve to think sellers won’t go as low as 10% below what they could have sold for last summer? When the higher end homes are lowering their prices substantially, then WHO will want to buy from someone who isn’t? Fighting a losing battle and wasting everyone’s time letting your home fester on a market that can only go down (history does repeat itself). Thank you for the insightful comment #19. We will see if Christina H stands by her baseless prediction 6 months from now.
Observation: My trip back to Canada, first in 4 years…
Living in two different countries abroad since 2008 gives you perspective. Last week we traveled to Toronto to renew our USA work visas… what a shock.
1. The anchor store of the Eaton’s Center is gone?
2. The World’s Biggest Bookstore is Gone?
3. Much Music on Queen is Gone?
4. The Old Spaghetti Factory is being demolished?
5. The Gardner Expressway looks like a Death Star trench with so many new condo buildings?
6. I can’t see Lake Ontario anymore from the new condos?
7. The Toronto Star runs a “How much did the get” RE blog in the BUSINESS section?
8. Anyone making less than $60k/yr is in poverty?
9. Where are the jobs?
10. Outside of downtown, little if anything has changed, like the same stores, same crappy streets, same old… so much for RE wealth!
Oh, Canada you are killing me.
-A Canadian Abroad.
#26 Lillooet, BC on 02.23.15 at 8:14 pm
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
Yes, but we have the Leafs!
Oh, wait… Never mind.
Terrorists have dug an elaborate tunnel on the Pan Am Games site, already equipped with a generator. There’s sure to be more from wherever this came, that we will not find out about until it’s too late.
http://www.thestar.com/news/gta/2015/02/23/tunnel-found-near-pan-am-games-site.html
Terrorists want West Edmonton Mall and others in Canada to be attacked.
http://www.cbc.ca/news/world/west-edmonton-mall-named-in-al-shabaab-video-as-possible-target-1.2966514
And we are nowhere ready for any of this.
http://www.ctvnews.ca/canada/canada-completely-unprepared-for-large-scale-terror-attack-security-expert-1.2248877
How many terrorist attacks will it take you to reconsider going to the mall, theatre, or sporting event?
How about one and a half.
We are so screwed. So totally unprepared for what lies ahead.
The economy will recoil in fear.
This will be an economic apocalypse starting this year.
(Could be good news for courier companies though – people will find trusted agents to deliver goods rather than going shopping themselves. Follow those stocks closely)
Simple; the Canadian economy is fallings, sort of like a CHAIN FOUNTAIN. To see what I mean, take a look at these 2 videos of a chain fountain:
Fountains of Chain: https://www.youtube.com/watch?v=QTC3bKea2Yo
Self siphoning beads: https://www.youtube.com/watch?v=_dQJBBklpQQ
You see, the economy is heading down, but instead of houses heading down right away, drastically lowered interest rates are making houses go UP in value, at least temporarily, just like those beads go up first before they go down.
SIMPLE.
Test seeing if my post is still in the q, or just vanished. Damn and it was on topic for once.
Garth:
Would you care to share the performance of your typical portfolio for 2008.
thanks
Done. — Garth
‘Let’s hope so?’ I presume there is potentially a buying opportunity if the bank stocks tank or even just shrink by say 10-15 percent. Or possibly people will wise up & start taking control of their finances…..
Heard about rents on CBC (Calgary) today – one bedrooms in posh condo complexes were renting for $1,700 – $1,800 per month; one bedrooms in basement suites were going for $1,200 – $1,300 per month before the downturn. So maybe with new places coming on line higher end rents will drop to say $1,500 per month while the estimate for less expensive digs is in the $1,000 per month range. Still pricy for the basement suites but potentially a move up opportunity for the more posh places for those who rent. Other item of note in the interview was that places for rent are not necessarily being snapped up in a day any longer. Even the more desirable digs may take weeks or even months to rent whereas prior to the downturn the desired places had multiple (40-50 plus) interested parties & often rented out in less than a day.
The banks have been on my radar for a few months, CIBC looks to be the worst, broke it’s 6 year uptrend last month. TD is still good, the rest are testing the uptrend.
I suspect they will bounce up for a month or two more, then around June fall off a cliff, exactly like in 2008. Odd timing as Yellen is going to announce an interest rate hike in June.
Last time the banks broke their uptrend was 2008, Jan. Look what happened in Sept…
Shemitah year kiddies, what goes up must come down.
The problem with bubbles, is they blow up slowly, then pop in the blink of an eye. So you could be wrong 99% of the time on a call, but that 1% of time when it pops, you make your fortune.
Anyone else smell a bond crisis approaching? *Gasp*
You mean, 0% interest rates won’t continue?? *Gasp*
If the bond market ever had to attract buyers, hello 15%+, Russia done it already…
I’m one of those shorts, using options. Opened my position 2 months ago, over doubled my money since then. Someone above said he bought 2 weeks ago and is up 3%. No he’s not, I track it every day. He’s down.
Canadian banks aren’t nearly as safe as Canadians are led to believe, and anyone thinking they’ll go up from here is about to lose lots of money.
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
————-
Take an f’ing holiday dude.. visit another country! Do you have any idea how ridiculous you sound, singing the praises of Lilloet, BC?
Canadian banks aren’t nearly as safe as Canadians are led to believe
Anyone who correlates the safety of Canadian banks with their stock price is an idiot. A group of nimrods have piled in and decided to short the stocks. It’s a trend, not reality.
#21 James
Look at the work history of the author who wrote the article.
She probably has the same environmental impact as a large African village and has benefited from the highest stand of living in the history of the world and still manages to find a way to complain.
“There’s no price discovery anymore by the market… governments impose prices on the market.” – Pippa Malmgren, former member of the U.S. President’s Working Group on Financial Markets.
So who thought things were different all this time anyway?
Terrorists have dug an elaborate tunnel on the Pan Am Games site, already equipped with a generator. There’s sure to be more from wherever this came, that we will not find out about until it’s too late.
http://www.thestar.com/news/gta/2015/02/23/tunnel-found-near-pan-am-games-site.html
+++++++++++++++++++++++++++++++++++++
Maybe dug by politicians to get us behind C-51, nothing like a scared populace to get everybody’s mind off the economy. Reading about the “Enabling Act” in Germany in 1933, some sad similarities .
#26 Lilooet
“And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!”
Try to be nice to Toronto. It’s 34 C. here in Southeast Asia where I am, and will be for the next two weeks.
Our nighttime lows are 17.
Lots of interesting things to do in Toronto, and here. Doesn’t pay to be a gloater…..
People talk about “how much risk you can tolerate.”
Risk = uneducated
Garth performing heart surgery = risky
Garth giving financial advice = security
Garth going to medical school and becoming a heart surgeon and performing heart surgery = success
People becoming financially literate = little to no risk = success
The lack of knowledge about a subject is what makes it fearful or risky.
Banks do not provide services anymore. They generate fees by “allowing you” to use them. Much like the Govt “allows you” to have a driver’s licence. Well guess what, there are more and more options available than “banks and their fees” today.
Fees are the only thing keeping banks afloat. And it won’t be for much longer.
Smoking man….. Wonder what you think of this trading technique
http://dilbert.com/series/62-Boss-gives-Asok-investment-advice
#3 calgaryPhantom, #29 aL pacino & #61 Linda
Yes, we’re hoping BMO tanks 10% or more so that we can buy it cheap! You want to buy financial assets when they are on sale.
I remember when the BMO dividend yield went above 10% in 2009 and thinking, this is a once-in-a-lifetime opportunity to get a big five Canadian bank stock at a double-digit yield. But then I thought what about their US exposure, maybe Harris Bank is sitting on a lot of subprime, blah, blah, blah. Turns out my first instinct was right. I do think bank stocks are heading lower again so I’m not going to buy right now but I’m keeping an eye in those yields – they could get tastier over the next few months.
#28 Former Fool on 02.23.15 at 8:04 pm wrote:
Hagerty fails to point out that credit worthiness is now the issue here in Alberta as the job cuts tally up and the price of oil is half of what it was 8 months ago. Low rates don’t help if you don’t have a paycheque to meet mortgage or rent commitments. Money is becoming more precious in Alberta. Expect rental rates to fall over time.
Rents are already falling in Calgary’s furnished rental market. When all those contractors went home, it left a lot of empty short-term furnished rental units. The unfurnished rental market is a bit slower to react but give it another few months…
pete # 18 Please when bragging about car sales remember that it is sub prime credit driven and a lowering of standards that is driving sales right now and not any kind of organic recovery. My advice wait a couple of years and get a good used deal on a repo car. Think of it this way if a homeless dude found a credit card and started buying stuff, would you think he was doing well?
Shorting the banks, eh! BEEMOE shares DOWN 9.1% in a couple of months. All dividends paid in Canadian Loonies down over 20%+ from peak the other year against the USA buck. Gas prices down. Jobs limping along and crashing in Alberta. In other locales, rock assaying crushed @ one location down 200 staff from 500 or 40% cut. Let’s hope Canadians aren’t playing with leveraged assets payable in US dollars. Oops! Maybe we’ll have to re-tool what is important in life and do a ‘radical simplification’ on our ‘needs’ and ‘wants.’ Waiting for the next phase —- the pink slips.
So, are the banks going to wear all of this?
—————————————————
I have been watching Canadian banks for 25 years.
Rule of thumb is – Canadian banks don’t lose money – they just raise fees.
NEVER bet against the Canadian banks as a long term, fat dividend paying investment.
#64 Sean on 02.23.15 at 8:54 pm
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
————-
Take an f’ing holiday dude.. visit another country! Do you have any idea how ridiculous you sound, singing the praises of Lilloet, BC?
Passed through Lillooet on a motorcycle ride from Whistler to the Cariboo. Not a lot there but it is beautiful country, not much work I imagine but probably a peaceful place to live.
Everybody in Vancouver, Calgary and Toronto are always going on about how great their cities are so it’s nice to see somebody happy about their small town.
Lillooet=shithole
Only good thing is the sturgeon fishing
Alberta Today: My ear to the ground front row seat on the Alberta economy.
The tide has gone far enough out now in Alberta it is getting easy to see who has been swimming naked. People laid off are hurting and worried. Hours are being cut back everywhere. Many people still working are living on the edge and worried now, and the fear is showing in people’s demeanor not only in how they are talking but how they are looking. The worried people living on the edge are noticeably aging in front of me. I have seen it all before and I hate to see it happen to people on one hand, even though it has always been when I have made the most money. I have learned to keep a low profile as people are prone to envy and jealousy, as not everyone is going to be happy that I am happy. I learned that fact many years ago.
#51 Karl hungus,
I agree with you that Alberta is finished is a bit extreme. Alberta will not be the next Detroit. However, I wouldn’t be so quick to call his views delusional as long as you continue to maintain your rose coloured view of the Alberta market. You’re not as delusional, but you’re delusional none the less.
So my son calls me at noon, he’s down 45k…. I took over. Only luck saved our ass today.. Ended up 10k.
Kids forex is like playing Russian Rollet if you don’t know what your doing, and don’t follow a strategy.
Full story on my blog.
This isn’t as easy as I make it look. Never try this with out years of practise, and a good feel for financial news and physic powers.
He has one more emotional, coin flipping trade, closing out the account, he’s preventing me from making loot.
Yesterday’s comments where all like Let’s high five as we pay off virtually free money (2.25% mortgage) and dump it all into 2.25% GICs.
Yay us.
I agree with Garth’s premise that it is unwise to have your total economic future depend on one strategy, and not at least have a viable “Plan B”. This is why I am flummoxed at the casual state of affairs the Western Economies have with respect to “Rare Earths”. NO ELECTRONIC device can operate without “Rare Earths”, including smart phones, computers, flat screens, automobiles, wind turbines, GPS, Nuclear Submarines, Fighter Air Planes, Aircraft Carriers, the whole shebang! The Western Economies have virtually NO capabilities to mine and refine “Rare Earths”, in particular the “Heavies”. They rely virtually 100% dependant on China’s good graces to export this stuff. This is a HUGE political and financial leverage card China has over the rest of the advanced world economies with the threat to with hold “Rare Earth” exports. (The irony of the US Military Machine is it requires China’s permission to exist)
Goodness me.
Belarus has banned the import of Alberta beef because of Bovine SpongeBob Encephilosophy.
http://calgaryherald.com/business/local-business/more-countries-ban-canadian-beef-due-to-bse-fears-tally-now-at-five
I think they meant Bellagio. That single hotel would be a bigger importer than Belarus.
Woe is us.
If Obama can do this maybe Harper can do something about realtors and their voodoo economics.
“President says conflicted advice is costing Americans billions and must be removed from retirement plans
President Barack Obama on Monday directed the Department of Labor to move ahead with a proposal that would raise investment-advice standards for brokers handling retirement accounts.
In a speech at AARP in Washington, Mr. Obama said there are many financial advisers who receive “back door payments or hidden fees for steering people into bad retirement investments that have high fees and low returns,” reducing retirement nest eggs.
“These inducements incentivize the brokers to make recommendations that generate the best returns for them, but not necessarily the best returns for you,” Mr. Obama said at the event that also featured Sen. Elizabeth Warren, D-Mass., and other lawmakers.
http://www.investmentnews.com/article/20150223/FREE/150229979/obama-directs-labor-department-to-move-ahead-on-fiduciary-rule?
#21 Babblemaster on 02.23.15 at 8:01 pm
Any setback in Calgary prices will only be temporary. As oil depletes, Calgary RE is well positioned to do very well in, say, 10 years.
==================================
There is a chance that you might be optimistic. If U.S. Oil shales gut the Canadian oil industry like U.S. natural gas shales gutted the Canadian natural gas industry post-2008, any energy based recovery might be suspended indefinitely.
To see the effect of U.S. gas shales on natural gas price, just look at the U.S. prices in the midst of a monster winter in the heavily populated US northeast. We are sub $3.00/mcf, a level unimaginable before the gas shale boom permanently broke the natural gas market in 2008. Pre-2008 pricing of $15-$17/mcf in the teeth of such a winter would have been easily achieved. US gas shales vaporized about 80-90% of the value of the Canadian natural gas producers.
Luckily, back in 2008 most Canadian energy companies had a mix of oil and gas in their portfolio and executed “Plan B” which was a shift to oil or liquids rich plays and abandon natural gas altogether.
This time, the Canadian oil patch there is no “Plan B”; the Canadian oil patch will live or die on the WTI oil price. And the US oil shales will set that price.
I’d say that there is a 25% chance that there will be no Alberta recovery, even if oil prices go back into the $60’s. IMHO.
I’ve got a ‘put’ on BNS. No US exposure but lots in commodity producing South America. Then I read this in the financial release of my REIT MRG.UN. Can you believe the competition to lend money now?
“January 31, 2015, the REIT refinanced a multi-unit property in Kitchener, Ontario, the amount of $45,500,000 at an interest rate of 2.25% for a term of 10 years.”
#49 Jas on 02.23.15 at 8:31 pm
Garth does your last sentence means That if Banks are down by Say 10% it Will Be a buying opportunity?
I never explain myself. — Garth
It means Garth is shorting today’s prices.
#51 Karl hungus on 02.23.15 at 8:35 pm
Alberta is finished,
You need to take a breath and go out for a walk. You are borderline delusional
___________________________________
Lol Alberta is the pillar of economic success and strategy that should be modeled around the world. How to steal and waste hundreds of billions of dollars should be the conservatives campaign. I have to laugh how the CONs have just robbed you and laughed in your faces while telling you its all the public workers fault. I can imagine harper and his con buddies laughing at the stupidity of Albertans. I can see the one good hearted worried con asking….. but king steven won’t the people figure this all out and harper LOL.. are you kidding me? these people are so stupid I’ll just blame the civil servants. LOL LOL king Steven you are so smart. Norway just made albertans look like fools with their high union rates, high pay and $759 billion dollars saved. Alberta is finished.
I by no means endorse this horse betting. Garth is a highly paid professional who knows the game. It is an exclusive club and your not in it.
Buy real assets and sit tight, be right.
Here is why houses are so expensive in Canada, why there will be no American support of Ukraine, and why Obama will be re-elected as president:
For those of you who wonder why houses are in such demand here in Canada, the answer is simple: Women. Or more correctly; the values that women hold, and the politicians that cater to the desires of women in the hopes of getting elected by them.
With more and more women working and making ever greater incomes, the politicians have realized that the best way to get elected is to give women what they want. Men also have learned this thing and it is summarized by the saying “HAPPY WIFE, HAPPY LIFE.”
So buy the wife a house no mater if the mortgage payments are 300% of what you earn, and therefore your wife will remain happy. That pretty much summarizes why houses are booming here in Canada. And when the crash finally does come and millions of people lose their homes, well, those women won’t be happy, and normally divorce rates SKYROCKET when women are NOT happy with their hubbies.
That brings us to another weird twist on this theme: OBAMA and UKRAINE’s War.
Obama brought in Obamacare. You see, women want to have babies, and extremely high cost of health care is something that tends to get in the way of having babies, so by bringing in a twisted form of universal health care for the masses, he is making women happy ( happy wife, happy life), and as a result he gets VOTES from those women. In decades gone by a president would have gone to war to stop a country from being taken over because those are the views that MEN HAVE = they want to see the right thing done in the world. But ask any woman if we should go and protect a country on the other side of the planet and you will get her talking about the high cost of baby formula or something like that instead. If you tell a woman that you will have to tax her more to bomb some other invading country, you have instantly lost a woman’s vote because to her you are taking food out of her baby’s mouth. So Obama cannot go to war with another country because women HATE WAR. He has to make sure he gets votes from the women because that is how a politician today gets elected. So don’t worry everyone, there is not going to be any American weapons going to Ukraine, instead we will soon begin to hear of new government initiatives to help bring down the cost of the above mentioned ‘Baby Formula’ for the average working mother.
The real concern is Canada is heading into a recession or maybe a depression.What is needed is to stop immigration until our economy improves.Over the the years this high immigration policy is just about votes and is a severe burden on all workers.Lower wages,more on call part time with no benifits.Its truly sad for everyone.In Victoria for every low paying job their is over 100 applicants.For higher fulltime work its in the 100′ or 1000’s.No lie its the truth.
Stop immigration, and you will learn what a recession is really like. — Garth
#4 Ron on 02.23.15 at 7:41 pm
I lived thru the 1981-84 housing price plunge in Calgary and am now watching from afar. Will history repeat?
*********
Has human nature changed?
From the blog comments alone my opinion is shorts will win this battle. I see trapped longs.
And oil longs clinging to any hopeful news. Haven’t got the memo yet.
The Sun and the Wind are competing to be the true marginal barrel of oil.
Companies have agreed to a use agreement where they have to prove themselves to each other each day. Its an electrifying battle. There is a legend in there somewhere. Hydrocarbons can only watch in inadequate disbelief.
And investors get companies that create something from nothing, soup to nuts. Yield co included.
Go green indeed.
Why do people still use the big 5 and pay fees when PC Banking is no fee and just as functional?
Re: a previous poster’s link: Sherry Cooper saying Calgarians that want to sell should sell now as prices ‘may’ drop 10-20% in the months ahead. This could become a self-fulfilling prophecy. If I were a potential buyer reading that, I would just hold out for that 20%. A desperate seller would blink first, setting off a chain reaction.
After 6 long years of intense study I finally understand the future.
http://www.theautomaticearth.com/
A blog to suicide by! — Garth
RE:#85 RayofLight on 02.23.15 at 9:56 pm
They rely virtually 100% dependant on China’s good graces to export this stuff. This is a HUGE political and financial leverage card China has over the rest of the advanced world economies with the threat to with hold “Rare Earth” exports.
There are plenty of “rare earths” outside of China. China undercut prices of rare earths in the 1990s which shut down mines in other countries. This will change with any shortage imposed by China. There will be lag, so therefore prices could spike before new mines come online.
If the CMHC could be ‘shorted’…the Americans might have something. But like the dummies they are, they don’t understand the Canadian financial system…at all. Banks have exposure to HELOCs….not mortgages. The banks don’t even hold the consumer loans they issue….those are all out to subsidiary peripheral insurers and holding companies. Banks have little risk in the oil patch….the loans are less than equity issuance and all have long term duration. I think ‘the shorts’ are likely paying the media to drum up some fear. The ‘shorting’ argument doesn’t hold water.
I have held the TD Bank since buying at $14 dollars 25 years ago….done quite well ..thx. I will buy regardless and hold….for a retirement withdrawal plan that is still decades away. Let the ‘Americans’ play silly buggers….but don’t forget that TD, RY and BNS get a high percentage of their revenues…from the Americans.
“Any investor smart to buy on that dip has made 220%”
– You make me laugh Garth.
what about the stock humping looser who bought it for $77 at the top of the curve.
He is barely back to where he started from.
Good Joke though.
That guy has made a boosle in tax-reduced dividends, sailed though volatility and owns a quality asset. — Garth
#4 Ron on 02.23.15 at 7:41 pm
I lived thru the 1981-84 housing price plunge in Calgary and am now watching from afar. Will history repeat?
Was the lead-up to the 1981 decline similar to the lead-up today? Or was it more sudden? From left-field?
#93….and the liberals complained that Bush would usher in the new world order. If you’re seriously suggesting Obozo will run again….you’re talking revolution…not women’s liberation.
Seriously…I know you made a flub. Not to worry. The whole attack on oil and attack on Canada will be over once the Great Obozo is out of office in 22 months. You can buy tickets for his continued dog and pony shows at Ticket Master soon.
Don’t forget…the Canuck banks have ‘bailouts-R-us*’ on speed-dial too.
*Canadian taxpayers
“Without the bailout, the Canadian banks wouldn’t have been able to pay their bills. It’s as simple as that.”
[T]he TD Bank received a $26 billion bailout, 69 per cent of the bank’s value at the time. Scotiabank got $25 billion, 100 per cent of the bank’s value at the time. RBC received $25 billion, 63 per cent of the bank’s value at the time. CIBC got $21 billion, an astonishing 148 per cent of the bank’s value at the time. And BMO received $17 billion in bailout money, 118 per cent of the bank’s value at the time.
http://tinyurl.com/m2ox98l
http://tinyurl.com/mp9hg72
——————————————–
‘The drinks flow
People forget
That big wheel spins, the hair thins
People forget
Forget they’re hiding
The news slows
People forget
The shares crash, hopes are dashed
People forget
Forget they’re hiding.
…Behind an eminence front’
http://tinyurl.com/kx966uf
Speaking of shorts, Garth do you ever wear yoga pants while writing these blogs, in order to awaken the inner contrarian fem-beast within you.
Stop immigration, and you will learn what a recession is really like. — Garth
——————————————————————————
Based on what fundamentals???
Sorry Garth, I completely and respectfully disagree with your statement.
Or perhaps I’m more than a little confused.
Is overcrowding and crushing the infrastructure of our 3 major cities, driving up the cost of living, further bloating the public sector and ignoring over 2 million currently unemployed/underemployed Canadians, REALLY that economically lucrative?
Shouldn’t we at least substantially reduce immigration until our economy regains some true strength that isn’t based on bank loans, pressed cornflakes, BS make-work programs and consumerism?
Please excuse my comment #86 tonight. I was just joining the hyperbole crowd namely #91 Alberta is Finnish (yes, Jari Kurri was the second best right winger in the history of Alberta behind Danny Smith who played for the Wildrose) and #35 Lilliput, B.C.
There is no BSE in Greeley, Colorado.
https://www.youtube.com/watch?v=HyL3INa3rb0
Dissecting the military narrative at Jackhead Manitoba. Canada’s Roswell.
We were having a military drill, that thing you saw going strait up, was a plane. It was your angle of view that confused you.
We are only at the Indian reservation doing drills.
Hum, so when was the last time the military had a drills on native land in Canada.. Hum.
Never.
Why is the chiefs house sorounded. Why has all communications to the town, including Internet, and cell phone service been cut off.
I tweeted Harpo asking him.. So if this is my last post, and they find me dead, suicide with 3 bullet holes in my head.
I guess I did it.. Jack Daniels flowing nicely.
Why don’t these shit, bad liers higher me for bull shit that actualy sticks when tossed…
They are imagination less..
Grasshoppers all of them.
Not so sure the banks are in such a great position as they have been. You may want to re-think “they can just raise fees”. I kind of have to agree with former blog dog Mark Carney (ya that guy) that the banks are prime for an “Uber” moment. https://mukeshbalani.wordpress.com/2015/02/01/mark-carney-is-worrying-about-an-uber-type-situation-in-banking/
#110 kommykim
I understand the point and the saying just fine. It is a clever way of saying “a penny saved is a penny not spent”, which is really what it means. This kind of lazy “wisdom” is what leads people to believe that paying off a loan is the same as earning equivalent interest in investments. It is not. Who needs to invest, when you can just buy a house and “pay yourself”, right? The interest paid needs to come from somewhere, and it sure isn’t coming from the house.
> … Shouldn’t we at least substantially reduce immigration until our economy regains some true strength …
see http://en.wikipedia.org/wiki/Population_pyramid
http://m.thestar.com/#/article/business/economy/2015/02/23/moodys-says-ontario-has-a-spending-problem.html
Moody’s credit rating firm is the latest to urge the debt-ridden Ontario Liberal government to rein in spending.
Moody’s Investment Services’ report released Monday noted that Ontario’s debt burden has gone up every year since 2009 and compared that to Quebec where debt has remained stable.
“Given such high levels of planned spending, it is our expectation that there will be non-significant reductions in Ontario’s debt burden for the next five to 10 years,” said the report, which explained that Ontario’s borrowing is driven by infrastructure spending.
2014 Q4 will still be fine for the big 5, well 3 anyways. If the news is as I expect, nothing much will change unless the shorts decide to cover.
Sold both my TD and RY stock last month and replaced with Enbridge, Metro, Saputo, QSR, and CNR.
Still own financials through ETF holdings but between low rates, slowdown in lending and increased fees for compliance / regulatory, don’t think the banks can continue to grow as they have in past.
GLTA.
Re #93 by MGTOW
Wow. And here I thought I was bad. LOL. Yikes.
#35 Lillooet, BC on 02.23.15 at 8:14 pm
Breaking News: “OPEC president highly likely to call an emergency meeting if oil rout continues.”
As I predicted about a month ago, OPEC nations are getting only about half the normal oil revenue, therefore, its only a matter of time before they meet and cut production. Saudi Arabia has talked tough but the other OPEC nations are feeling the heat due to drastically lower oil revenues.
And when OPEC calls the emergency meeting, watch the price of oil (WTI and Brent) jump about $10/barrel and they quickly rise to the $80-$90 range again. Should be interesting.
http://business.financialpost.com/2015/02/23/opec-president-highly-likely-to-call-emergency-meeting-if-oil-rout-continues-ft/
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
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And surrounded by forest fires – smoke in the summer. We all know what happens when we get an early summer.
The supply side will keep it from rising too high, price grows up the fracking wells go back into production. Lower start up costs when you already have the know how. I suspect it will be a more balanced price in the future. As news improved forms of alternative energy become widely available and people’s attitudes slowly change. Things will happen – horse to car…..wood to coal to oil to nuclear ???
By the way it was 14 today in Victoria, pollen count is plain nasty, golf courses are mushy, as are fields and there is a damp cold in the air – not the normal brisk cold. It’s not Hawaii.
Re #88 Ex-Cowtown
I don’t think the people of Alberta are understanding how serious the situation is and what it all means for Alberta. Alberta is facing a world of financial pain and what could of been a life line to plan B (oil money) has been stolen/wasted by the CONS And the people are oblivious. Alberta has no plan B because then think plan A will be booming again. That’s not going to happen again and Ex-Cowtown explained it.
#39 Paully on 02.23.15 at 8:20 pm
I’m confused too. You want the shorts to be right, and you want a 10% pullback on bank stocks?
8******************
Buy low sell high or take the opportunity to rebalance and make more money later.
Lesson 1 from the University of GT
#93 MGTOW
“Here is why houses are so expensive in Canada, why there will be no American support of Ukraine, and why Obama will be re-elected as president:”
—————————————
Just wondering… does the term “lame duck” mean anything to you?
#39 Paully.
Why not? If the banks are healthy, a 10% pullback is a great opportunity to load up on shares and receive a higher dividend yield. The banks will always do well long term.
#35 Lillooet, BC on 02.23.15 at 8:14 pm
Breaking News: “OPEC president highly likely to call an emergency meeting if oil rout continues.”
As I predicted about a month ago, OPEC nations are getting only about half the normal oil revenue, therefore, its only a matter of time before they meet and cut production. Saudi Arabia has talked tough but the other OPEC nations are feeling the heat due to drastically lower oil revenues.
And when OPEC calls the emergency meeting, watch the price of oil (WTI and Brent) jump about $10/barrel and they quickly rise to the $80-$90 range again. Should be interesting.
http://business.financialpost.com/2015/02/23/opec-president-highly-likely-to-call-emergency-meeting-if-oil-rout-continues-ft/
And by the way, Lillooet, BC reached a high of +12 C today. Toronto’s high was -16 C (-26 C with the windchill). Love it!!!
********************
I suspect they are already breaking their production quotas, a meeting will have no impact. The crude oil story is mainly weak demand, with over supply making it even worse. I suspect even if they actually cut and stuck to it, demand will fall faster. See this video: https://www.youtube.com/watch?v=oTbLKIc3JA8
#80 No debt on 02.23.15 at 9:43 pm
Lillooet=shithole
Only good thing is the sturgeon fishing
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Vancouver is a shit hole – Lillooet is a nice simple town with former mills and rail jobs. Still a beautiful place to live, the mountains, rivers, lakes, farms etc. Paradise when you really think about it.
> … I suspect they are already breaking their production quotas …
see http://en.wikipedia.org/wiki/Prisoner's_dilemma
i bought BMO and CM on Dec 29, 2008 (30$ and 49.47$), i also called a BB short at 110$ in 2008 but was too much of a wimp to do it.
when i bought the banks i sold all my mutual funds that i never wanted to buy in the first place. i figured it gave diversity and low risk, and i had more risk by buying nothing and the tsx going to 20,000. i am still real unclear how my resource fund went down 50% when its listed holdings only ever went down 20-30%, plus i get no tax credit. I am fairly sure this is fraud. the bank told me i was selling low and locking in my losses, self directed is the only way to play.
anyone who thinks ETF’s are a good idea is a fool for the same reason. the tsx is not a weighted benchmark, its composite holdings can and are adjusted by the big players, aka banks. if not for manipulation of BB holdings in the composite the tsx would be at 12000 today and not 15000(which puts a lot of comments on return over time out to lunch). if you can manipulate a composite up you can certainly manipulate it and the etfs down.
as for homes until people under 40 get jobs don’t expect house prices to rise. youth unemployed and wages should be the number one issue in this country but i think it will have to wait one more election, and cause a more drastic swing in policy.
i am up 50% since sept 2012, but i think telling people they can expect any returns at all is unreasonable. 3% if you are lucky and you should expect losses, what you gain is an inflation hedge and nothing more.
“back when the gold nuts, doomers, nihilists and pantywaists were telling you to invest in ammo and tuna”
Garth, I recall you were pushing generators at the time, and buying/installing your own….
so you seemed a bit caught up, probably a few cans of squirrel meat left in your larder….
I have had a standby generator for 25 years. — Garth
#93 MTGOW
A quick google search confirms – Big O not eligible to be reelected for a third term (22nd Amend.).
Geez, a lot of the comments seem to be from the island (Vic, Nanaimo,Courtney, CR). We should bust up a graph of the national “density of dawgs”….you know, colourful bar type…a visual depiction of followers of the Gospel of Garth(TM pending)…….ah, forget it.
Canada banks will do fine. Canadians are so brainwashed that RE is their true path to wealth and enlightenment, even in the face of RE crash or slow decline, they’ll continually pump any disposable money into their ginormous mortgages instead of their retirement vehicles (RRSP/TFSA). Seventy percents of homeownership means 70% of Canadian households will be bank slaves for the next 5-30 years. I recommend buying any of the Big 5 if there is any sort of correction.
Personally I’ll keep adding money to my HXT, 25% of it is the Big 5 anyway.
“In other news, Broadbent Inst and PBO coming out strongly against increase of TFSA limit to $10 000 in upcoming budget. CTV Power Play, last 10 minutes.”
Heh, that’s kind of my consolation prize if Harper manages to retain power. Don’t take it away from me :).
BMO stock denominated in US Dollars (on the NYSE) is actually trading at the same price as it was in 1998.
For someone collecting tax-reduced dividends, how can that be a bad thing? — Garth
And what of bank preferreds?
#52 Dave on 02.23.15 at 8:37 pm…
Gas prices are also up at our local Phoenix area Costco – to .656 CAD a litre.
At 1.279 CAD a litre in Surrey methinks some folks are getting ripped off!
“I have had a standby generator for 25 years”
I can only afford a gerbil on a treadmill….
you’re the man….
#35 Lillooet, BC on 02.23.15 at 8:14 pm
And when OPEC calls the emergency meeting, watch the price of oil (WTI and Brent) jump about $10/barrel and they quickly rise to the $80-$90 range again. Should be interesting.
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Man give it up, you have been wrong on oil.
http://www.bloomberg.com/news/articles/2015-02-23/oil-continues-to-fall-and-opec-isn-t-helping
What $1 million buys you in various U.S. markets:
http://www.marketwatch.com/story/what-a-1-million-home-looks-like-in-different-markets-2015-02-23
Maybe Van. is not so different. The LA and Arlington places look similar to ones I’ve seen in Windsor for 1/10 the cost!
My Canadian Couch Potato has been performing pretty well during the last few weeks.
It makes me feel uncomfortable, like I’m due for a big loss anytime soon.
I just glanced at the charts of the big 5 banks. They all look pretty similar. Then I looked at the chart for Canadian Western Bank. And THAT, folks, is your Alberta short.
#12 Mike T. on 02.23.15 at 7:54 pm
Of course Raymond James is a great organization. The fine print on the bottom of this page says that Garth is affiliated with them. This means we can put in requests for Garth to come to our town and rawk out, right? Maybe he can do a better job on Sweet Child o’ Mine than Stephen Harper. Leather pants totally optional (but pants of some sort are required) (insert kilt joke here)
Don#116
Nigeria is going to call an emergency meeting? Lol yeah they can call and claim whatever they Saudis are going to continue to pump oil into the market. OPEC members don’t trust each other. You are grasping at straws . Alberta is finished as even if the price goes up which it won’t but if it does US shale oil will make sure canadian oil sands remain worthless.
99Kommykin:
“There are plenty of “rare earths” outside of China. China undercut prices of rare earths in the 1990s which shut down mines in other countries.”
The real issue is the separation and refinement. The elements involved are all beside each other in the Periodic Table, and are usually found along with radio-active elements. The purification process is a technology that is not obtained overnight. I’m not sure these processes can be duplicated as quickly & easily as you suggest.
Mike T.
….ummm Garth is a Senior VP there.
The FOAM is running down yer chin.
I’m with the guys who short the stuff. I have played the stock market for a long time and given the amount of risk involved in shorting(theoretically infinite) if the stock goes up, they usually do not make mistakes. The bad numbers might not be reflected in yet but a changed guidance of the coming year will propel traders to add more shorts. Let’s see what happens tomorrow!
#110 devore
Before you think I’m just being anal, hey wouldn’t be the first time, there’s a point I am trying to make.
This is the kind of thinking that leads to an unhealthy relationship with debt, and misunderstanding what debt is and how it works. It leads people to believe mortgage debt is “good debt”, and sometimes, that it’s not even debt at all.
#35 Lillooet,BC
Falling oil prices in Nigeria are making it difficult to avoid disintegration,add in the Boko Haram whack jobs plaguing the country and you can see why the president of OPEC wants an emergency meeting. Nigeria does not pose a threat to the Saudi Kingdom or Saudi allies–Iran does both militarily and religious differences. If there is a meeting it will come down to nothing more than lip service!
#93 MGTOW
Just… WOW. There’s so much wrong (everything?) with that post I don’t know where to start? PLEASE. Put down the pipe and use your Big Boy voice when commenting.
Were I to substitute “men” for “women” as the root of all the 1st World’s problems in your diatribe I would (rightfully) be declared a Rabid Feminazi / Flaming Mangina, and subjected to an immediate beat-down-by-keyboard here.
You may crawl back under your backwater rock now Jethro.
“Paddle faster, I hear Banjos…!”
Canadians at record debt loads, duh the banks own you, all they have to do is raise rates on their own to maintain margins, and they are doing so daily. Best stocks out there!
#52 Dave on 02.23.15 at 8:37 pm
Why are gas prices so high, with oil so low..saw 127.9 today in Surrey
……..
Yup… Pretty galling really, isn’t it? They have been 122 in Vancouver . So much for all that extra money in our pockets that we’ll be able to spend elsewhere! Harrumph!
Do we have the drop in our dollar to thank? Thank-you Groucho and Harpo!
#121 Will…it is not only the ‘concern over budgets’ that has the 90++ nations…population 5 Billion + voicing protests over Obama’s war on oil through his Arab proxies…the Saudi’s.
http://www.ft.com/cms/s/0/669d962a-bb62-11e4-a31f-00144feab7de.html#axzz3Se0nEWnM
People in those countries are already starving…the governments are seeing unrest breaking out…social order breaking down…they are expecting revolution and conflagration as mass starvation sets in. Nigeria has seen mass defections form the armed forces. Venezuela is in full revolt…..countries that are desperate for revenue fear political turmoil will set back decades of progress.
This attack on oil and the attack on Canada is an attempt by Obama to cement a ‘legacy’ for this twit. He has no concern for the starving and the dying…just as long as his self centered green blob donors keep filling his coffers and showing up for his speaking tours.
A few failing mortgages has Canadians all worked up? Wait till millions rush the EU borders and wars break out sending floods of refugees into Canada.
You like Obama’s attack on oil….you think it will create a ‘green economic miracle’…..don’t be naive. African governments don’t want windmills…they want to feed their kids before the parents attack the UN AID warehouses.
Anyone thinking this will be a ‘local bump in the road’….is pretty short on scope.
To all those who are blaming immigration for their own perceived 1st world problems….
How can you blame people for trying to make a better life for themselves and their families?
Do you realise this continent was built on immigration and that white people weren’t the first to live here?
Do you understand that Canada would have negative population growth if it were not for immigration?
How is this kind of policy working out for young Japanese male grass eaters?
Canada is a world leader in true multiculturalism in a way that’s not replicated anywhere else on Earth. As a rich country, we have a legal (UN) and moral obligation to help our fellow brothers and sisters (all humans on Earth) – eventually this will make it’s way to all living beings (the horrible way we treat cattle, pork, and chicken). Screw the fish
#93
As soon as you wrote “Obama will be re-elected” you lost your point. Anyone discussing Obama’s re-election in 2016 clearly has no idea what they’re talking about.
P.S. I am not advocating for a bigger nanny state.
Technological advancements are coming exponentially faster and our humanity better keep up or else it’s gonna get ugly out there.
I have hope in technology and our humanity. Except the boomers (minus Garth)
‘Bucolic’. Had to search the word. The learning never ends. I rent in the city/own in the country, too. Living the dream mortgage free.
A conundrum for the numbers people, if it amuses the host…
I owe 20k on a line of credit with more available.
Lots of room available in an rrsp.
I have 5k cash on hand
If I put 5k cash and 5k from LoC into rrsp, I will get back 5k total tax refund, convenient, which I will put back on the LoC.
I will end up with: same 20k in LoC, no 5k cash, but a shiny new 10k in rrsp.
Or should I use the cash and any refund to pay down the darn LoC percolating at 6% and forsake the rrsp and larger refund this year?
Any figuring/shots in the dark would be greatly appreciated. Thank you.
#93 MTGOW
For a man that’s going his own way, you appear pretty wrapped up in what the ladies are doing.
My dear fellow fools
high yield implies that the market does not trust the issuer. Dividiend yield is always at its peak just before the company goes bust.
Or, high yield implies that a company cannot grow its business or revenue in a meaningful way (eg a local power plant).
Garth’s favorite preferreds are hybrid securities. Kinda in between a debt (bond) and equity (ownership in the company). In case of insolvency you lose everything, you are behind bond owners in case of restructuring. Garth assumes governments won’t let the big banks fail, which seems smart, but high yields without some risk is not possible.
No bank will fail. Period. — Garth
GT: “The big six banks, obviously, form a kind of proxy for the entire Canadian economy . . . ”
Hi, Proxy, how ya doin’ ?
Do you mean the big six banks’ stocks obviously act as a CONCURRENT Canadian economic indicator?
The people shorting Canadian bank stocks probably think . . . LAGGING indicator.
[Rule of thumb: the BKX LEADS the SPX, “as go the piggies so goes the poke”. (Todd Harrison).]
#135 BG on 02.24.15 at 1:05 am
My Canadian Couch Potato has been performing pretty well during the last few weeks.
It makes me feel uncomfortable, like I’m due for a big loss anytime soon.
—————————-
Are you serious??????
The whole point of the “couch potato” portfolio is to set it and forget it.
It’s not an fng trading vehicle, it’s a LONG TERM plan.
Why do you care what happens on a week to week basis?
https://ca.finance.yahoo.com/news/alberta-release-3q-budget-numbers-covering-period-oil-090008009.html
EDMONTON – Alberta’s finance minister is expected to deliver more bad news today when he presents an update on this year’s budget.
Robin Campbell is releasing third-quarter numbers, which will take into account the collapse of oil prices into the US$40 a barrel range.
Campbell and Premier Jim Prentice have already said the steep plunge in prices has turned this year’s anticipated surplus budget into a $500-million deficit.
Prentice says the drop has dug a $7-billion hole in the treasury.
The premier is promising next month’s budget for the upcoming fiscal year will provide a long-term blueprint to get Alberta off the roller-coaster of oil and gas revenues.
He has suggested a hike to personal income taxes, but says there will be no increases in corporate taxes or oil royalties.
http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/smaller-canadian-cities-grapple-with-surplus-of-unsold-condos/article23165014/
When the federal government tightened mortgage rules in 2012, overheated condo markets in Toronto and Vancouver were widely seen as the main target. But little more than two years later, it’s many smaller cities that are bearing the brunt of stricter regulations.
Winnipeg, Montreal and Moncton are grappling with a surplus of unsold condo units driven by a surge in new construction and a dwindling supply of first-time buyers in the wake of Ottawa’s decision in June, 2012, to limit mortgage insurance to amortization periods of 25 years or less from 30 years.
“No conspicuous piles of dirt could be seen around the entrance, according to CBC, indicating that its builders had taken pains to dispose of the soil at an offsite location.”
http://news.nationalpost.com/2015/02/23/mysterious-tunnel-discovered-near-stadium-amid-pan-am-games-terror-worries/
“We are in a very, very active threat environment”
Ray Boisvert, former Asst. Director Intelligence, CSIS, on CBC Toronto radio today.
Major terrorist disruption is coming to Canada this year, I am afraid. This will take the wind out of all our markets, with RE leading the way.
Are you going to the Pan Am Games? We were, not anymore. Had tickets to three events for us and the grandkids. We’ll be asking for refunds.
I might have considered going on my own, but no way would I take grandkids or kids with this kind of threat going on.
Would you?
We will also be curtailing going to Yorkdale, Eaton Centre, Vaughan Mills and any movie theatres this year, same reasons.
This will not end well folks. Prepare and protect yourselves and your loved ones.
Police press conference this morning.
http://torontopolice.on.ca/newsreleases/31176
You are such a dork. — Garth
Much Music on Queen Street is gone?! Tell me it’s not true. Please, can someone from Toronto, tell me what’s going on with the Much Music building? I love that building.
Interestingly, it appears the condo meltdown is starting at the edges and moving inwards, just like the SFH correction.
“There are now nearly 20 condo sellers for every one buyer in Quebec City and downtown Montreal, well above the long-term average, said Hélène Bégin, chief economist at Desjardins Group.”
http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/smaller-canadian-cities-grapple-with-surplus-of-unsold-condos/article23165014/
#44 not 1st on 02.23.15 at 8:23 pm
“…Secondly, this environment is going to be played for all it can be to break Russia and Iran. Only another 6 months or so and both will be on their knees.
You have the internet right?”
=================================
Russia on it’s knees???? You have no idea! You actually believe that Putin will just lay down? When…not if…when he is cornered to the wall, it is going to be, like in the words of Russell Peters:
“Somebody gonna get a hurt real bad!”
At #93: MGTOW, you said on 02.23.15 at 10:21 pm
“Here is why houses are so expensive in Canada, why there will be no American support of Ukraine, and why Obama will be re-elected as president:….”
I guess Canada really is special as we don’t have women here in the U.S. any longer, making house prices fall to a more palatable level. Get with the times! Women are smart now!
Shit, I can’t even begin to continue to make some sarcastic rhetoric in response to your drivel… Nothing you said makes any sense whatsoever. For the record, you lost all credibility with your Obama statement as to why he would be re-elected. Are you even aware he is not allowed, by law, to run for re-election again? At the end of this Presidency, he will have served his maximum of two terms. What right-wing politically inept publication are you reading to keep yourself so in the dark and stupid?
#155 Victor V on 02.24.15 at 8:11 am…
Re: Alberta budget
He has suggested a hike to personal income taxes, but says there will be no increases in corporate taxes or oil royalties.
…….
Wow, going to please everyone with that one.
Average Albertan gonna be hit from all sides.
http://www.theglobeandmail.com/report-on-business/bmo-profit-misses-estimates-on-impact-of-unsettled-environment/article23175047/
The Bank of Montreal reported net income of $1-billion in the first quarter of 2015, down 6 per cent from last year and setting up a possibly challenging period for banks, defined by an environment of low interest rates and tapped-out consumers.
BMO is the first of the Big Six Canadian banks reporting first-quarter earnings. Royal Bank of Canada and National Bank of Canada report their quarterly results on Wednesday.
On a per-share basis, BMO’s net earnings were $1.46, down 8 per cent and missing analysts’ expectations by more than 12 cents a share.
After accounting for some extraordinary items, BMO said that its adjusted earnings were $1.53 a share, down 5 per cent, also missing expectations by about 10 cents a share.
“BMO’s first quarter results reflect the impact of an unsettled environment in which we saw significant movements in oil prices, long-term interest rates and the Canadian dollar,” said Bill Downe, BMO’s chief executive.
Bank of Montreal misses expectations as profit drops 6% in ‘unsettled environment’
http://business.financialpost.com/2015/02/24/bank-of-montreal-misses-expectations-as-profit-drops-6-on-weak-insurance-business/
Terrorist attack at the Pan-Am games?
Don’t make me laugh. Only half a dozen people are planning on attending. Of course, it suits the agenda of the powers-that-be to suggest foul play as it gives them a nice justification for the absolutely ridiculous cost of security we’re all on the hook for.
Of all the potential targets for terrorism in Toronto, you think someone would break their balls for weeks on end digging a tunnel to disrupt a South American track-meet-on-tour that nobody had even heard of until five years ago?
The only way the Pan Am games threatens our financial security is via the huge cost overruns and nest-feathering adding to the already woeful financial situation Ontario finds itself in.
By the way Apocalypse2015, you are the only person I have heard of who has actually purchased tickets for this farce. Quite the achievement!
Just as Garth’s words often make so much sense, so does this guy’s: http://www.theguardian.com/business/2015/feb/20/crispin-odey-debt-deflation-downturn-predictions
Too bad he doesn’t give a magic 60/40 formula on what to do….
Garth…regarding your post from Sunday (“Fearless”)
What went into your decision making when deciding to rent your city place and buy your Small town place?
* Was it strictly financial (City house not worth the money VS. Small town place worth the money)?
* Was it work related (Hate the city, but have to live there for work VS. Love the Small town but can’t live there for work)?
* Was it emotional (City houses are a dime a dozen VS. Small town place is heaven on earth)?
Appreciate the insight
Thanks
Ever been to Toronto? — Garth
“An Oakland artist is ingeniously battling homelessness in Oakland, California: he builds small houses out of materials he can find in the streets, with each edifice costing around forty bucks.
The tiny homes are made of pallets, bed boards, washing machine doors, and other bizarre objects that catch Greg Kloehn’s attention.”
“The houses are just comfortable enough to lie down in a warmer place than a cardboard box, and the homeless in Oakland are “so happy,” Kloehn told the Independent. “One cried and got on his knees to
thank me.”
http://www.sott.net/article/292991-Tiny-houses-California-homelessness-gets-new-40-solution
#126 Vicpaul
“We should bust up a graph of the national “density of dawgs”….you know, colourful bar type…a visual depiction of followers of the Gospel of Garth(TM pending)…….ah, forget it.”
No, no, don’t forget it. We are due. Are you up to it Sir Garth?
Alberta you are finished as the CONS have lend you to a world of financial ruin. All that oil money is gone. Yes it’s all gone while Norway a socialist country and high union rates and pay managed to save $759 Billion dollars for a rainy day. Alberta under the stealing and wasting CONs saved nothing as all that oil money is all gone. Well it is not only raining in Alberta it is pouring as oil sands is shutting down and more countries are banning Canadian beef due to mad cow. No country in the world wants to get mad cow. Mad cow leads to voting conservative and look how it is serving the people of Alberta. Enjoy your economic ruin…. you voted for it.
http://www.cbc.ca/news/canada/calgary/canadian-beef-banned-in-peru-taiwan-and-belarus-over-mad-cow-case-1.2968050
#94 Rexx Rock on 02.23.15 at 10:27 pm
Stop immigration? Are you serious? Are you Canada’s Enoch Powell? He was wrong too …
At #93: MGTOW, you said on 02.23.15 at 10:21 pm
You may want to consider this annoying little detail……
The Twenty-second Amendment of the United States Constitution sets a term limit for election to the office of President of the United States.
Section 1. No person shall be elected to the office of the President more than twice.
As for the USA going head to head with Russia in Ukraine ….. That ends with World War Three …
I suggest you read the book “The Last Ship” …… Yes, it doesn’t end well.
Dear FINISHED on 02.24.15 at 1:42 am
The FOAM is running down yer chin.
LOL I am not the one with mad cow. Ask the CONs why a socialist country like Norway with high union rates and pay is doing so well?
Now that BeeMo has missed, we could see some good purchasing opportunities coming up.
#159 someone who hasn’t been in Toronto for a long time
Queen Street gentrified. The Much Music building is still a TV studio, but boring.
Yonge and Dundas has a lot of the feel, is bigger, but it’s very corporate.
It’s a completely different city than 10 years ago. A bit more European… normal people walk the streets late at night.
#20 JSS on 02.23.15 at 8:00 pm
The tone of this blog today sounds negative.
+++++++++++++++++++++++++++++++
Really? I was just thinking the opposite.
I can picture Garth writing this post in between the second and third Pinot. Mellow.
#158 Apocalypse2015 on 02.24.15 at 8:33 am
Let’s think this through ….. What will happen if we all stop going out, hide in our homes … Do you remember the “Beltway sniper”?? Just to refresh your memory …The “Beltway sniper” attacks were a series of shootings which took place over three weeks in October 2002 in Maryland, Virginia, and Washington, D.C. Ten people died …. millions were held hostage. Paranoia triumphed over sanity and all at the hands of some sociopath with a misguided belief in his twisted version of Islam.
You do realize that freedom isn’t free? There is always a cost. Sometimes a terrible one. In the end we don’t let the terrorists win by defeating ourselves.
“So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigour has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days”.
Franklin D. Roosevelt
We should have a copy of this in every closet at Parliament Hill for our prime minister to read.
71 Oil Is Sticky on 02.23.15 at 9:13 pm
“Fees are the only thing keeping banks afloat. And it won’t be for much longer.”
I was curious about this assertion, so I looked it up. Canadian Bankers’ Association claims that about 5% of income is generated from service fees. 55% is from lending; the remaining 40% is from things like wealth management, trading fees, commissions, whatever.
#93: MGTOW
You’re a fool.
So Garth, the mystery is over about that Toronto tunnel.
It was dug out by an immigrant family to the GTA, because they are DESPERATE FOR HOUSING!!
This is why you are so wrong, Mr. Turner!!
Real estate is a can’t fail INVESTMENT that will go up and Up and UP!!
People are so desperate to live in Toronto they are DIGGING HOLES to live in until their condos are completed!!!!
Now apologize, Garth.
Like this will happen in Toronto and Vancouver. The provinces that will be the economic engine of Canada.
#70 Trojan House
Well said. Never thought about it like that.
Dominoes: from your link: Montreal in particular has been grappling with a glut of unsold condos for the past two years as builders haven’t scaled back their plans in the wake of softening demand.
yeah it looks like Toronto and Vancouver are the two hot spots left.
Mike L: The Gardner Expressway looks like a Death Star trench with so many new condo buildings?
pretty funny
#177 industrial Guy
If there were sniper shootings in your neighbourhood, you’d tell your kids to keep playing in the local park as if nothing happened?
Get real.
Despite the nice weather in the Best Place on Earth, I’m not ready do bring out the shorts, unlike some parents at the rink.
Might get frost burned.
Research notes on oil biz.
“”Our people are scrambling and trying to come up for air, we are very busy looking at specific deals,” Blackstone’s President Tony James said last month.
Already, buyout groups’ activity in the oil and gas sector has picked up significantly.
They poured $31 billion into the oil and gas sector in 2014, clearly outstripping the $8 billion in investments that sponsors have invested in the sector over the five prior years, according to ThomsonReuters data.
After equity investments in the software sector, oil and gas came in second on buyout groups’ shopping list last year.
“In the long-term the equilibrium point of oil prices is in the $70-85 range. The question is when is it going to get there, are we talking 9 months or 30 months? That is were the risk lies,” Warburg Pincus’ Landy said.
Investment opportunities seem abundant. Based on company filings and announcements compiled by oil and gas consultancy 1Derrick, assets worth about $112 billion are up for sale.
Half of these are North American, mostly U.S. oil and gas shale fields such as Anadarko’s Wyoming field and Reliance Industries’ Eagle Ford assets, as well as ConocoPhillips’ oil-sands operations in Canada.”
The smart money that bought up all the vacant houses in the US during the downturn is now putting their mega billions into the oil patch. Theres only one way this will end. Obama will get the boot…oil will be back…and the idea that the Saudi’s were anything but a footnote in the world economy will be proven once again to be a fact.
So Yellen just yacked….
I translated the banker speak to this conclusion. Bet accordingly dogs.
We’re definitely spiking, but we need to see some wage inflation.
Meaning how do you convince markets and consumers things are going back to normal…
Why you say your spiking rates soon. Relax, go buy something everything is getting rosey.
But the herd, and corporate America don’t beilive this.
No USA rate spike anytime soon.
US rates will rise this summer. On schedule. — Garth
People need to be knocked down a notch with their toys. Blue collar workers have no business driving new Cadillacs and Range Rovers. What is the Queen going to be driven on to be different?
World is full if self entitled show off’s that probably have holes in their underwear.
#158 Apocalypse 2015
Terror attacks at the mall! If your going to worry about anything it would be driving to the mall. The number of people behind the wheel of a vehicle talking on their cell phone,texting,playing with the dvd,laptop computers,onboard computers,eating,impaired by alchohol,drugs, sleep deprived, this is how you are going to get injured or killed, not shopping!!
#180 Logical Realtor on 02.24.15 at 11:34 am
BPOE is that you? Back after so many years?
Hot off the presses:
http://www.cnn.com/2015/02/24/europe/ukraine-russia-conflict/index.html
‘But the chaos on the ground in eastern Ukraine suggests the truce is crumbling.’
US rates will rise this summer. On schedule. — Garth
——————-
yellen “unlikely for next couple of meetings”
when is the second? the third?
looks like fall at best in her words imho.
Just saw Kevin O’Leary on the Marilyn Denis Show. He was giving tips on finances. Excellent advice. He says the same thing as Garth. Some of which I caught:
– don’t have any more than 5% of your portfolio in one stock
– do not buy a stock that does not pay a dividend
– don’t be greedy. Be content with 5% to 8% returns. Anything more and the risk for loss mounts.
– don’t buy needless consumer items. Once you buy something the money is gone forever. If you invested that money, realize what it be worth in 20 years.
I find it ironic that O’Leary is worth some $300M U.S. and doesn’t need to live by his common-sense rules, yet it is the average Joe in debt to 164% that should be living by his rules.
More here:
http://www.marilyn.ca/Finance/segments/Daily/February2015/2_24_2015/InvestFutureGain
#134 cramar on 02.24.15 at 12:55 am…
Pretty crappy homes for one million, near our winter home in Arizona here are some examples of what that will buy:
http://tinyurl.com/6257-W-Parkside-Ln
http://tinyurl.com/5671-W-Arrowhead-Lakes-Dr
http://tinyurl.com/5427-W-Misty-Willow-Ln
Maybe that’s why Marketwatch didn’t include any Valley of the Sun homes in their story!
8 fomc mtgs/yr
3 from now is still the summer, not the fall.
my bad.
I bought a new car on the weekend. The dealership says they have been busy as stink so far this year. I also asked what percentage of customers pay cash (no in-house financing) and the salesman said about 70% pay cash. I’ll bet most of that is from home equity credit lines. They also said they will only accept up to $8,000 in physical cash (remember what cash crop we grow in BC).
Check out this Castanet thread about housing in Kelowna. Typical bashing of anyone who dares to point the obvious declines in Kelowna RE for several years now. I myself have engaged in heated discussions with a realtor (or wanna-be shill) on this thread. Could it be the execrable DA?
http://forums.castanet.net/viewtopic.php?f=23&t=60624
#87 Andrew Woburn on 02.23.15 at 10:02 pm
If Obama can do this maybe Harper can do something about realtors and their voodoo economics.
Don’t think anybody should give our dictator any more power…Think for yourselves, research, be realistic about your needs and ability to pay, nobody can force you into anything, up to you in the end, nobody to blame….
To #55 Mike L:
Oh, Canada you are killing me.
-A Canadian Abroad.
___________________
All these observations are true, except for the fact that…..Toronto is not Canada.
88 Dup on 02.24.15 at 12:21 pm
People need to be knocked down a notch with their toys. Blue collar workers have no business driving new Cadillacs and Range Rovers. What is the Queen going to be driven on to be different?
World is full if self entitled show off’s that probably have holes in their underwear.
+++++++++++++++++++++++++++++++++++++
Well said, enjoy your used Toyota or Volkswagen if that’s what you can afford to run. I always wonder about people that make $1,500 every two weeks (or less) and spend $100 a week on gas. Know of an oilfield worker here in BC, laid off and has $3,300 a month mortgage payments and TWO car loans…Stay at home wife with 2 kids
Garth, you are dreaming if you think the TFSA is a no brainer. Look at the debate around it already. And what govt program was ever left untouched to infinity? None. This likely to be Income Trusts 2.0 someday.
http://business.financialpost.com/2015/02/23/even-the-fathers-of-the-tfsa-cant-agree-on-whether-to-rein-in-accounts-or-hike-contribution-limits/?__lsa=b98e-129b
#108 Smoking Man on 02.23.15 at 11:09 pm
Dissecting the military narrative at Jackhead Manitoba. Canada’s Roswell.
We were having a military drill, that thing you saw going strait up, was a plane. It was your angle of view that confused you.
We are only at the Indian reservation doing drills.
Hum, so when was the last time the military had a drills on native land in Canada.. Hum.
Never.
Why is the chiefs house sorounded. Why has all communications to the town, including Internet, and cell phone service been cut off.
I tweeted Harpo asking him.. So if this is my last post, and they find me dead, suicide with 3 bullet holes in my head.
I guess I did it.. Jack Daniels flowing nicely.
Why don’t these shit, bad liers higher me for bull shit that actualy sticks when tossed…
They are imagination less..
Grasshoppers all of them.
____________________________________________
Suicide with three bullet holes in the head is impossible, however since you are an alien mehh!!!! As for yesterdays cryptic note it wasn’t a cryptic note. Just an observation after being in service for the man I know how incidents are treated and redacted. Believe me you will never know what is real and what is fantasy.
#HummersAreForSissies,Or… #RealTeutonsDriveLeopards…
http://youtu.be/2eOrBkTDYxw
@Alberta is FINISHED
I agree, it really is ridiculous that the Alberta Government didn’t do the same.
Norway actually has 860billion. They’re going through a rough patch as well but with the rainy day fund it won’t be near as rough as Alberta.
Norway is much more socialist than Canada.
Free healthcare? We pay a monthly here in B.C. It’s not free. Yet some of us constantly rub that in Americans’ faces?
http://business.financialpost.com/2015/02/24/end-of-oil-and-gas-boom-shakes-oil-rich-norwegians-out-of-utopian-reverie/?__lsa=cfb6-1977
Just brought into BMO after it dropped 3% this morning.
Love it when the banks are on sale. Got some TD in the past as well.
Think this might be a mid to long hold.
“Stop immigration, and you will learn what a recession is really like. — Garth”
Is it really avoidable?
You mentioned a few times to expect higher taxes in
Canada and more growth in the US
Looking at Canadian demography it seems reasonable. The problem though is that already, in demand professionals (both born here or recently naturalized), are heading towards greener pastures in the US
Tax Canadians more and this trend accelerates
Expand NAFTA/US immigration reform and this trend accelerates
The immigration at current levels, is not sufficient to replace the gap in Canadian demography, nor do we have sufficient employment opportunities for them, to offset the high cost of living (of which housing is a part) and the future elevated taxation
I’d also like to know where the CRA get’s off on taxing folks who make a tonne trading in their TFSA!
If they do that I’m gonna start claiming any losses I make inside my TFSA.
US rates will rise this summer. On schedule. — Garth
——————-
“Yellen: No rate hike for next couple FOMC meetings”
http://www.cnbc.com/id/102447413
Maybe next year? Or maybe the next couple of years after that?
Next FOMC meetings – March 17, April 28, June 28. Like I said, on schedule for the summer. — Garth
As a MD who graduates this year from UBC, I have applied for residencies at US hospitals. Many of my classmates have done the same. Don’t get me wrong, I have applied to Canadian Hospitals as well. But when faced with a choice,…
If Canada decides to increase taxes, then you will be left with a country without health professionals.
Will you be repaying the subsidized portion of your medical education? — Garth
here ya go alberta is finished. Norway isnt immune.
http://business.financialpost.com/2015/02/24/end-of-oil-and-gas-boom-shakes-oil-rich-norwegians-out-of-utopian-reverie/?__lsa=c156-c365
#194 Snowboid on 02.24.15 at 1:05 pm
#134 cramar on 02.24.15 at 12:55 am…
Pretty crappy homes for one million, near our winter home in Arizona here are some examples of what that will buy:
—————-
Really impressive! Must be all that sunshine, 70° winters, and lack of dampness that makes housing so cheap there.
Are there any courses in GTA (or online) about investing, “playing the market”, understanding ETFs and such ?
I started to “cut and paste” from your comments related to investments but I feel I need to fill some of the gaps in my financial education before daring to applying what I am learning from you.
Excellent blog
So what’s the big deal with a slight drop in bank share prices? Presently XFN is about 7% off its all time high, but it was grossly extremely overpriced before and now it’s just extremely overpriced. What if it drops 20% or more? Then we would talking about a time to buy.
149 MarcFromOttawa on 02.24.15 at 4:00 am
To all those who are blaming immigration for their own perceived 1st world problems….
How can you blame people for trying to make a better life for themselves and their families?
Do you realise this continent was built on immigration and that white people weren’t the first to live here?
Do you understand that Canada would have negative population growth if it were not for immigration?
How is this kind of policy working out for young Japanese male grass eaters?
Canada is a world leader in true multiculturalism in a way that’s not replicated anywhere else on Earth. As a rich country, we have a legal (UN) and moral obligation to help our fellow brothers and sisters (all humans on Earth) – eventually this will make it’s way to all living beings (the horrible way we treat cattle, pork, and chicken). Screw the fish
——————————————————————————
You’re missing the point. No one is blaming individual immigrants wanting to become Canadians in order to live a better life. 250,000 new immigrants each and every year is no longer economically viable.
Such xenophobic junk. Without immigration our natural population ages and declines. Allowing annual immigration equaling 0.8% of the population base is modest, sustainable and economically critical. — Garth
Surplus in AB.. do we still have to send ROC $$
http://www.calgaryherald.com/news/edmonton/Alberta+still+track+surplus+despite+prices/10838926/story.html
“Shouldn’t we at least substantially reduce immigration until our economy regains some true strength that isn’t based on bank loans, pressed cornflakes, BS make-work programs and consumerism?”
Immigration has nothing to do with it. The government should stop it’s stupid policies that favor RE
For instance privatize CMHC or wind it down completely
Get your condo’s, get ’em while they’re hot.
http://www.bmonesbittburns.com/economics/amcharts/feb2415.pdf
#209 @Mike S on 02.24.15 at 2:12 pm
As a MD who graduates this year from UBC, I have applied for residencies at US hospitals. Many of my classmates have done the same. Don’t get me wrong, I have applied to Canadian Hospitals as well. But when faced with a choice,…
If Canada decides to increase taxes, then you will be left with a country without health professionals.
If that’s your attitude, please leave.
Health care is in a global boom phase right now. A bust phase will come and almost every developed part of the world is going to get hit hard – you won’t be able to escape it unless you want to live and work in say, Vietnam (not a bad option actually, but much too low brow for someone of your immense stature).
The current revenue/expenditure mix is unsustainable due to demographic trends. Not only will taxes everywhere increase in the future, but the expenditure side of the equation is going to get gutted. The public sector as it is today, should enjoy it while they can – in 20 years public sector workers will refer to today as the “good years”.
“They will NEVER have negative interest in north america” garth
“By any name would smell soo sweet”
http://www.marketwatch.com/story/jp-morgan-to-start-charging-big-clients-fees-on-some-deposits-2015-02-24?link=MW_popular
Wake up. Who are the sheeple?
…Without immigration our natural population ages and declines. Allowing annual immigration equaling 0.8% of the population base is modest, sustainable and economically critical. — Garth
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Garth, its not 1910 anymore and the past is no longer a template for the future. You are assuming more working people pay for services for others and generally increase the GDP.
If it was 1980 I would agree with you, but many immigrants are unskilled and end up in very low paying jobs that are ripe for automation which is coming full force that will affect more than 40% of workers.
You need to imagine a different society. One that has a lot more social welfare or a guaranteed minimal income supplement because thats what these displaced workers will fall into. There is a level of equilibrium where our current GDP can only support so many people, especially if 25% are unemployable.
Wait! I thought (from this blog) that all immigrants were millionaires buying Westside mansions with their brats driving Lambos. Now they’re all unskilled peons? This is a shock. — Garth
#214 Fed-up on 02.24.15 at 2:48 pm
149 MarcFromOttawa on 02.24.15 at 4:00 am
To all those who are blaming immigration for their own perceived 1st world problems….
How can you blame people for trying to make a better life for themselves and their families?
Do you realise this continent was built on immigration and that white people weren’t the first to live here?
Do you understand that Canada would have negative population growth if it were not for immigration?
How is this kind of policy working out for young Japanese male grass eaters?
Canada is a world leader in true multiculturalism in a way that’s not replicated anywhere else on Earth. As a rich country, we have a legal (UN) and moral obligation to help our fellow brothers and sisters (all humans on Earth) – eventually this will make it’s way to all living beings (the horrible way we treat cattle, pork, and chicken). Screw the fish
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You’re missing the point. No one is blaming individual immigrants wanting to become Canadians in order to live a better life. 250,000 new immigrants each and every year is no longer economically viable.
Such xenophobic junk. Without immigration our natural population ages and declines. Allowing annual immigration equaling 0.8% of the population base is modest, sustainable and economically critical. — Garth
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Are we not all immigrants to this land? I sure as hell know that my ancestors were not here 500 years ago or for that matter 5000 years ago. My ancestors left a crappy future in their homeland and for that matter all of the baggage that came with it to start anew here.
BTW the only original Canadians are the natives! So there ya go!
“The main concern now is that buyers have gone AWOL. Home sales month-to-date are down -35% from a year ago and 1/4 lower than the 5 year average.”
Garth they haven’t gone AWOL, they have just gone home!
Back to the ROCK, Ontario, BC, and any other place where they can wait out this downturn. They will be back, like lemmings to the cliff.
http://www.youtube.com/watch?v=AOOs8MaR1YM
#148 Jump Dick on hunger and unrest breaking out…
Don’t worry, it won’t happen here. Christy Clark will flood the farmlands of Peace River and build Dam C plus get some freight or pipeline for the LNG (Liquid Natural Gas), ship it to the world. Not to worry, we are in good hands. Even Hillary Clinton on Mansbridge said LNG is clean. Gulp. Nothing to worry about???
As for Alberta, the leaders should look at a solid foundation which it did not. Farmers were rudely pushed aside when complained about their well water been contaminated. When taking out oil for the purpose of our lifestyle should not be exploited to extremes like it is today or we (everyone) will suffer the aftermath.
Food, we don’t need food; we buy it from the grocery store. The leaders are so wise. They know how the globe of earth operates in the universe. Don’t worry.
Keystone Kaput
Obama veto’s it today, we all knew that anyways.
Interesting that the Fed Chair said she is going to give plenty of warning when the rate hike happens; impossible. It will have to come out of nowhere. Has she not heard of front-running? That is why the SNB gave no notice of the Euro un-peg.
When it happens, no warning. Some food for thought.
Canada’s population would not decline in the absence of immigration.
Anyone that disagrees is misinformed or not telling the truth.
Actually it will. — Garth
http://www.theglobeandmail.com/news/world/obama-keystone-pipeline-decision/article23180005/
#93 MGTOW
Obama will not be reelected because of this little thing called the US Constitution.
Your comment about women makes just as much sense. I guess house prices in US are lower because there are no women there? BTW, gender demographics in Canada favor males. This is not China, where there are millions of men who have no hope of ever knowing a woman’s touch.
The rest of your comments are totally delusional.
Obama sicks it to our little closet hiding leader on Keystone.
Unfortunately Harper had it right on Keystone, now crude will continue to move by rail. Ask the folks of Lac Megantic how safe that is.
I suspect there is more to this veto than the ENGO’s wanting it stopped. Follow the money and see if the US frackers want CND crude competing with them.
karl hungus on 02.24.15 at 2:21 pm
here ya go alberta is finished. Norway isnt immune.
http://business.financialpost.com/2015/02/24/end-of-oil-and-gas-boom-shakes-oil-rich-norwegians-out-of-utopian-reverie/?__lsa=c156-c365
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Are you people from Alberta ignorant or just fools? The difference between Norway and bankrupt Alberta is that Norway saved up $830,000,000,000.00 that’s 830 BILLION dollars while the CONs managed to steal and waste all the oil money that came in. Norway will be fine with 830 billion dollars. Alberta is Finished. If Norway is in trouble as per the CANADIAN newspaper propaganda then Alberta is in total economic ruin. Alberta is FINISHED.
The republicans pushed and got the 22nd amendment to the constitution bringing in term limits for presidents. The limit is two terms or 8 years. This was a reaction to the Roosevelt 4 term presidency, although he died early in the fourth mandate. Truman was made president and served that term out, got elected in 1948 and declined to run again in 52 even though he could have. The republicans later regretted their amendment when Ike got elected in 52 and 56. He probably could have won in 60. Reagan could easily have won in 88 as could Clinton in 2000. I would venture to say the Obama could easily win in 2016. Maybe term limits are a good idea.
KEYSTONE VETOED.
As predicted.
http://www.cnn.com/
Note in this story – very little chance Republicans can overturn this decision.
“Will you be repaying the subsidized portion of your medical education? — Garth”
Garth,
Given a choice, very few people will choose to stay put and pay higher taxes. If nothing else, moving abroad for a few years, can be used as a strategy to wind down the RRSP before the retirement years (while continue working)
Real Canadians are moving to the US today, increasing taxation is not realistic
#211 cramar on 02.24.15 at 2:24 pm…
Also note the DOM of those homes, methinks you could get them for much less than asking!
But I can only imagine the electric bill in the summers to keep 5000+ sq. ft of home cool!
We did have the bottom end of a cold front hit us today, so only 68F – a big drop from the high 70s and low 80s of the last three weeks.
I will have to pull out my parka and toque, for sure!
#207 Chris in Nanaimo on 02.24.15 at 1:49 pm
I’d also like to know where the CRA get’s off on taxing folks who make a tonne trading in their TFSA!
If they do that I’m gonna start claiming any losses I make inside my TFSA.
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good luck with that homie
“Wait! I thought (from this blog) that all immigrants were millionaires buying Westside mansions with their brats driving Lambos. Now they’re all unskilled peons? This is a shock. — Garth”
Canada could get skilled immigrants because they were employable in Alberta and they have no better opportunity given the deadlock between Congress and Obama on Immigration issues
Now we don’t have these jobs in Alberta
In time the US will sort out its immigration policy and Canada, given the economic headwinds, will be in less demand
Then what?
232 dr. Mike s.
Aside from the moral issue you need to see an accountant. I don’t think you are aware of how you will be taxed in canada. or about moving to the us and possible tax implications of working n both countries.
You have won the financial lottery. Yes you will work hard. Stop whinning, get some good advice and start giving back.
Wait! I thought (from this blog) that all immigrants were millionaires buying Westside mansions with their brats driving Lambos. Now they’re all unskilled peons? This is a shock. — Garth
rekt
Garth schools the idiots again.
#135 A box in the Sky
Are you serious??????
The whole point of the “couch potato” portfolio is to set it and forget it.
It’s not an fng trading vehicle, it’s a LONG TERM plan.
Why do you care what happens on a week to week basis?
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Any investment plan is pretty much long term, not just this one.
And what’s wrong about watching it. It beats a few other hobbies…
Will you be repaying the subsidized portion of your medical education? — Garth
Out of curiosity….do Canadian trained MD’s who can’t find work here, and relocate to the US have to repay the subsidized portion of their medical education?
Why should I have to pay back a part of my ‘subsidized’ education?
Then everyone that leaves the country should have to pay for their subsidized hospital stays, transit, etc. the list can go on.
And the future is private medical care in Canada. The system won’t be able to support a private model due to demographics (aging population) and technological advances (ie. Hepatitis C cute costs $100,000 and is not covered).
Let’s not kid ourselves. Healthcare will be privatized. I did not go into debt of $200,000 solely for altruistic reasons.
#194 Snowboid
Loved the three housing examples. I noted that the property taxes for each house are under $6000/yr.
I bet that they have lousy public transit and no bike lanes. How do people live like that?
I’m paying almost $4000/yr. to live in a 1945, 1580sf hovel in Hamilton that might as well be in a third world country.
If it wasn’t for the “free” health care here, I would sell everything and be living in the US. It is too late for me, but young people with skills need to consider the US as an option IMHO.
Garth we are waiting for tonight’s blog from you. You are late. We all crave your insight.
#242 UBC MD on 02.24.15 at 7:27 pm
Why should I have to pay back a part of my ‘subsidized’ education?
Then everyone that leaves the country should have to pay for their subsidized hospital stays, transit, etc. the list can go on.
And the future is private medical care in Canada. The system won’t be able to support a private model due to demographics (aging population) and technological advances (ie. Hepatitis C cute costs $100,000 and is not covered).
Let’s not kid ourselves. Healthcare will be privatized. I did not go into debt of $200,000 solely for altruistic reasons.
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Oh ya it’s all about the money these days baby.
You’re missing the point. No one is blaming individual immigrants wanting to become Canadians in order to live a better life. 250,000 new immigrants each and every year is no longer economically viable.
Such xenophobic junk. Without immigration our natural population ages and declines. Allowing annual immigration equaling 0.8% of the population base is modest, sustainable and economically critical. — Garth
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There are no figures to remotely back your statement Garth. If it was so “sustainable”, Toronto wouldn’t have the worst traffic in North America causing billions in losses annually. There’s actually economic data that supports that.
And what part of my comment was xenophobic???
Immigrants cause traffic? Just go away. — Garth
There are no figures to remotely back your statement Garth. If it was so “sustainable”, Toronto wouldn’t have the worst traffic in North America causing billions in losses annually. There’s actually economic data that supports that.
And what part of my comment was xenophobic???
Immigrants cause traffic? Just go away. — Garth
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No. not just newly arrived Canadians, too many people for our inadequate infrastructure is the cause. You claimed that without immigration, our population would shrink.
Going away now…
Mike S… any money you save in taxes you will be using to cover your insurance premium in the states… They are much higher than in Canada. Make sure you investigate that before you go. It may not be worth it…just saying…
When one shorts a div paying stock, they are on the hook for paying the div
Could be a very expensive position