Loaves & fishes

BABY modified

Amanda reads this blog, which means she won’t be happy in a few sentences from now.

“I’m 52, married, two teenagers and live in Ottawa. My husband and I both work,” she tells me. “He’s a contractor (no pension) while I am a secretary (small matched company RRSP). Between the two of us we earn approx $165,000 $/year. We own an almost-new home and owe $250,000 at 2.3% for three more years (paid down more than half of our original mortgage) so I think we’re doing well.  We have a total of $80,000 in RRSPs and TFSAs doing pretty much nothing. Can you help us?”

I get lots of mail like this. It makes me feel like Jesus. I’m constantly asked to turn a few loaves and fishes into a lifetime feast.

Amanda and her squeeze obviously save little, and what they do put aside has mistakenly been channeled into the mortgage. So, they have maybe half a million in net worth, of which about 85% is in one asset. They live in a market where house sales are in decline, and running consistently below the five-year average. Worse, there’ll be a federal budget sometime in the next few months (when the feds find the courage), and with the economy in an oily decline you can count on public sector jobs being sacrificed. Bad news for Ottawa houses. Not only that, but the next mortgage renewal will not be at 2.3%.

Worse, they have kids heading to college with no savings to assist them. And retirement in ten or 15 years? That’ll suck. Scant pension income. Needy children. Still with a mortgage. Hope hubs can still be building decks and hanging drywall when he’s 75.

So, what went wrong? How can these people think they’re “doing well” when they’re headed for a wall?

Simple. They have friends. Coworkers. Relatives. They all drink from the same chalice. To me this is the greatest threat our society and economy faces – the slow sleepwalk into financial torpor and failure.

There are three reasons you need to pay attention, changing your own life if it resembles poor naïve Amanda’s in any way. We have a crisis ahead because:

(a) Public retirement benefits are inadequate and likely to get worse as demographics overwhelms public finances. Already the age for OAS is being pushed out to 67, and I wouldn’t be surprised if CPP eventually follows. If you think you can survive on the government pogey, you’ll end up bitter and sad.

(b) Decent company pensions are disappearing as fast as Target and Future Shop locations. Never think that ‘matched’ taxable RRSP plans with the cash stuck in vanilla mutual funds managed by an insurance company will look after you.

(c) Your house. Society has told you to concentrate your net worth in this one thing because it’s risk-free and always goes up. But society’s wrong. Residential real estate is shelter, not a financial plan. In retirement you can always find a roof, but you can’t easily find cash flow. Our collective house lust has made us spend excessively for reasons of social status. Our financial illiteracy has us focused on paying off 2% mortgage loans, and fearing financial assets when investments earn three times that amount. Our recency bias means we think a housing boom caused by cheap money will last forever, even when rates normalize. Mostly, it’s blinded us to risk. Amanda will understand that when she runs out of money at age 68.

Don’t believe me? Fine. Good luck. But the numbers are stunning.

CIBC says at least six million Canadians will suffer a serious drop in living standards when they retire. People born between 1945 and 1970 will fare the worse immediately, since they’re not putting aside much, and have been feeding houses instead. The savings rate was almost 20% thirty years ago, and today is 3.6%. Only a third have a registered pension plan, and most of those are defined contribution (no set benefits to count on). Our investment habits are awful – 80% of TFSA money in savings vehicles and RRSP contributions fading. Most net worth sits in houses. So imagine what happens when real estate values decline – even slightly.

Scary. But we’re still doing better than the Americans, which is no consolation (as our economy is so dependent upon theirs).

About half of Yanks have zero retirement savings. Yet saving is a chore because wages are stagnant. Of those people within ten years of leaving work, only 60% have money put away – the average being $120,000. Among all Americans with retirement savings, the average is $40,000. Expressed across the entire population, per household it’s just $3,000.

Look here:

RETIREMENT SAVINGS modified

But there’s something American have that we don’t – fatter public pensions. A person who earned $80,000, retiring today, would collect $1,800 a month for life in Social Security, more than double the CPP payout.

Well, here’s the point: both the Canadian and US economies could be hobbled for two or three decades by a demographic bulge of people who blew their brains out on houses, ignored the need to save and invest, have inflated lifestyle expectations and are likely to become crotchety, Kia-driving, Costco-shopping, skinflint, penny-pinching tightwads sucking zillions in healthcare benefits and paying precious little into the system while sitting on billions in non-productive and illiquid real estate.

So, Amanda, you can become one of them. Or you can change everything.

Come to Jesus.

247 comments ↓

#1 Millenial on 03.29.15 at 12:56 pm

Hey Garth,

The Federal Reserve Bank of Atlanta is predicting Q1 2015 GDP growth to be 0.2%.

https://www.frbatlanta.org/cqer/researchcq/gdpnow.aspx

How ’bout them rate hikes?

Yellen confirmed Friday there will be an increase in 2015. — Garth

#2 First on 03.29.15 at 1:00 pm

FIRST!!!!!

#3 boom and bust Calgary on 03.29.15 at 1:00 pm

Bust in Calgary

http://www.theglobeandmail.com/life/home-and-garden/real-estate/calgary-home-sellers-trapped-in-a-down-market/article23665874/

#4 Victor V on 03.29.15 at 1:05 pm

http://business.financialpost.com/2015/03/27/janet-yellen-says-u-s-fed-rate-hikes-may-start-this-year-if-economy-continues-improving/

“I expect that conditions may warrant an increase in the federal funds rate target sometime this year,” Yellen said Friday in remarks prepared for delivery in San Francisco. She and fellow policy makers “generally anticipate that a rather gradual rise in the federal funds rate will be appropriate over the next few years.”

#5 Andrewski on 03.29.15 at 1:06 pm

Hallefreakinlujah Garth!

#6 LB on 03.29.15 at 1:09 pm

“The economy is still trying to grow against significant headwinds, and requires considerable monetary stimulus to avoid falling back into recession,” Poloz wrote. “The positive progress that has been made must be weighed against lingering uncertainty about the future.”

Poloz Says Canada Stimulus Needed to Avoid Slide Into Recession

http://www.bloomberg.com/news/articles/2015-03-27/poloz-says-canada-stimulus-needed-to-avoid-slide-into-recession

“Importantly, it has reached the point where the risks associated with a bursting global Bubble overshadow policy discussions and objectives. Policymakers now endeavor to completely repress market self-adjusting and correcting mechanisms (i.e. “quasi-Capitalism”). Bear markets and recessions have become completely unacceptable, as this historic Bubble’s “Terminal Phase” runs its regrettable course.”

http://creditbubblebulletin.blogspot.ca/2015/03/my-weekly-commentary-progressively.html

#7 Spectacle on 03.29.15 at 1:14 pm

[PDF]Psychological Benefits of Financial Planning – Research Online
ro.uow.edu.au/cgi/viewcontent.cgi?article=1385&context=aabfj

:: Hope this helps ::

Also, reading an introduction to psychology textbook will amaze you in regard to personal choices & basic human motivation ! Stunning really.

Ps :: NostyVlad; I read comments section from end backwards if they are lengthy. I appreciate your inclusion of me in the sub-group from last Fridays post (as always, appreciate your research here).
Regards,

#8 Spectacle on 03.29.15 at 1:15 pm

[PDF]Psychological Benefits of Financial Planning – Research Online

Try this link….

#9 Randy Randerson on 03.29.15 at 1:16 pm

Awfully early for a post today, GT. Glad I checked it with my morning cup of Joe. Sadly, seeing my parents struggle made me realize the importance of saving and investing. They didn’t invest, and don’t have a lot of savings. Their hopes were that me and my brother will support them, along with OAS and GIS. Thankfully both my brother and myself make good money, so it’s not an issue to give our parents money every month.

Sadly, most Baby Boomers will not have such luck, they’ll live in their paid-for house, with hardly any money left after maintenance, tax, utilities, and etc.

#10 Millenial on 03.29.15 at 1:22 pm

Yellen confirmed Friday there will be an increase in 2015. — Garth

You’re hearing what you want to hear.

If they do raise rates this year, it will ONLY be to maintain some level of credibility about the economic recovery and effectiveness of the Federal Reserve’s meddlings with interest rates/QE.

Anyways, all this focus on the actions of the Federal Reserve is silly, and shows how messed up things are.

Then stop it. The Fed will raise, and life will go on. — Garth

#11 OttawaMike on 03.29.15 at 1:26 pm

I always thought it was Moses who invested whereas Jesus just saves.

#12 saskatoon on 03.29.15 at 1:34 pm

#1 Millenial

Yellen confirmed Friday there will be an increase in 2015. — Garth

quotation…
…needed.

Not your librarian, dude. — Garth

#13 David McDonald on 03.29.15 at 1:46 pm

I like Costco. I was part of the multiethnic crowd of good natured Canadians this morning at Costco. We returned an unused purchase; no questions asked and then purchased groceries at very competitive prices (not cheap though).

There are 100000 Ontarians on the sunshine list. A lot are in Ottawa and they will keep Costco in business and prop up the property market as well. Of course Ontario is slowly going broke and the housing market is slowly sinking. Nevertheless there is no panic and few are listening to Garth’s sage advice.

#14 kommykim on 03.29.15 at 1:51 pm

RE:Only a third have a registered pension plan, and most of those are defined contribution (no set benefits to count on).

Garth,
Isn’t investing monthly in a balanced portfolio essentially creating your own “defined contribution” pension plan? Historically in retirement you could count on a minimum 4% withdrawal rate lasting indefinitely but this is not guaranteed by any means.

Registered pension plans are taxable. Non-registered portfolios are not. A 4% return is sub-par. — Garth

#15 Babblemaster on 03.29.15 at 2:00 pm

“…. you can count on public sector jobs being sacrificed.” – Garth”

—————————————————

Not true. The public sector always grows. I was in the Ontario public service and should know. There may be a short-term reshuffling of “resources”, but the long-term trend is always up, up, up. My position was terminated 3 years ago and I took early retirement. I now contract for much more money. Funny thing is, I also worked on contract (IT consultant) for the OPS (same organization) for 1 year stretch shortly after my termination doing the same work I was doing before. Same role exactly. For a lot more money. Plus my pension. Sounds strange indeed, but at least McGuinty could pretend he was a good steward of the public purse.

Bottom line is that in my 26 years of service in the OPS, I observed a lot of financial waste for the sake politics.

Oh. So you’re a parasite? — Garth

#16 Bob Copeland on 03.29.15 at 2:02 pm

Still trying to learn. If US raises interest rates wouldn’t that make the dollar stronger? Wouldn’t that hurt the rest of the world, especially oil exporting and high dept developing countries?
Then our stock market would continue to go up (no correction) and commodities (oil, gold etc.) to go down?

#17 Drunk Actuary on 03.29.15 at 2:07 pm

Post #3 “boom and bust Calgary”

http://www.theglobeandmail.com/life/home-and-garden/real-estate/calgary-home-sellers-trapped-in-a-down-market/article23665874/

Wow, so many things exasperating me with this article I dont even know where to begin. And this guy is a vice president and port folio manager for a big bank? what the tell

#18 ILoveCharts on 03.29.15 at 2:07 pm

From the Times Colonist today:
“In early 2012, a few months after she left China for a new life as an immigrant investor in the United States, Shi Lan Zhao flew to Metro Vancouver, bought a numbered B.C. company and began searching for properties in which to invest.

Flush with money that she and her ex-husband, Jianjun Qiao, had moved from China through banks in China, Hong Kong and Canada, Zhao first bought a Richmond condo, paying for it outright. A few months later, on a return trip, she bought a five-bedroom White Rock home, also paying for it outright.”

I’m not saying that foreign money (clean or corrupt,) is the sole source of our housing bubble but it is absolutely a factor.

Don’t start this again. Surely people in the Lower Mainland have better things to obsess about. You’re tedious. — Garth

#19 Retired Boomer - WI on 03.29.15 at 2:21 pm

Interesting post today, Garth. Good Luck trying to re-wire the housing instinct of Americans or Canadians.

The posted chart of US ‘families’ was rather unhelpful, as it shows ALL American families. Sure the young will have nothing, or little saved. The wrinkles better be well in that 11% of families with -much more- than a mere $250K saved for their Depends years.

The current average US social security benefit for the retired is only $1331.44 (that’s for current retirees getting a check). A non-working spouse would also get half of that figure. That brings household income to roughly 2 grand a month -oh, and a portion of it is taxable, did I mention that?

http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

The BAD NEWS is social security is scheduled to cut benefits to about 75% by around 2030 when the current “surplus” is exhausted, and the system reverts to a pay-as-you-go format. So, taking your $1800 as an example
that’s based on 80 GRAND a high figure for the ‘average’ US worker…. whack it to 75% and you are back to today’s check $1350 only you will have 2030 prices.

Yeah, can there be anything like “too much” savings for one’s retirement? American’s seem to be in denial about their benefits / needs when their work ceases.
Employers have offered the 401K plans for years, (think RRSP) and since the 1990’s a ROTH (similar to a TFSA).
vehicle. Naturally, if you put nothing in them, that is what you will get.

Your timeline and predictions seem about right for both countries. It seems America may also have a slightly higher percentage of workers with defined benefit programs, but not enough to change things statistically.

Boomers have known for years the day of retirement will come. I say screw those who had the earnings but, never thought it would affect them. Everybody could have prepared. It is a FREE country -free to fail, of course!

American’s naturally can eat their homes, they are all made out of gingerbread, thankfully.

#20 Turtle on 03.29.15 at 2:24 pm

Garth, may you consider to do this kind of posts more often (I’ve heard you have a lot of stories to share). I found this one to be very educational. Thank you.

#21 jane 24 on 03.29.15 at 2:29 pm

This is early, I just figured out it is indeed the Monday edition and also figured that it must only be about 2.30 pm right now in Ontario.

So yet another story about elderly parents who are coming up to retirement with kids still in high school. What is it with these people? By parental age 52 the kids should be long gone and you should be having literally the time of your lives. Max incomes, no debt and still have your health.

Off to watch Poldark on BBC1. Wait till it comes your way ladies of Canada. Hot Cornwall history with many wet white shirts on male bodies. Mr Darcy lives again!!

#22 Piccaso on 03.29.15 at 2:39 pm

I’ve never seen an era of people so concerned with interest rates.

What does that tell you? … People today are heavily indebted and living beyond their means.

#23 West Coast on 03.29.15 at 2:43 pm

Garth…thanks for the above A,B, C’s….so true….

#24 Ricky on 03.29.15 at 2:44 pm

Keep repeating- “Wont happen”
Australian to introduce bank account tax= SAME EFFECT AS NEGATIVE INTEREST RATES!

http://www.abc.net.au/news/2015-03-28/federal-government-set-to-introduce-tax-on-bank-deposits/6355662

By any name would smell as sweet!

My understanding is this is a tax on Australian banks, not consumer deposits – if it occurs. In any case, no negative rates here. Ever. — Garth

#25 DisgustMadeMePost on 03.29.15 at 2:46 pm

Off to watch Poldark on BBC1. Wait till it comes your way ladies of Canada. Hot Cornwall history with many wet white shirts on male bodies. Mr Darcy lives again!!

21 jane 24 on 03.29.15 at 2:29 pm

Is it the original series with Robin Ellis??
Saw it MANY years ago and LOVED it! Have the whole series in print as well….

Gee, the things you can learn on a number crunching sight…

#26 Moses71 on 03.29.15 at 2:47 pm

In reference to #17’s balk at the VP & portfolio manager’s decision–it was the interior decorator’s illiterate financial conviction it would be okay and that she knew what it’s worth was. Less of the guru other half.
Hence, balk more at the whipped dynamic of this page in the life of….

#27 Squirrel Meat on 03.29.15 at 2:49 pm

#17 Drunk Actuary on 03.29.15 at 2:07 pm

Post #3 “boom and bust Calgary”

http://www.theglobeandmail.com/life/home-and-garden/real-estate/calgary-home-sellers-trapped-in-a-down-market/article23665874/

Wow, so many things exasperating me with this article I dont even know where to begin. And this guy is a vice president and port folio manager for a big bank? what the tell
———————————————–

Crazy story.. .Calgary is just filled with this sorta stuff

#28 Loaves & fishes | Realties.ca on 03.29.15 at 2:51 pm

[…] Source: http://www.greaterfool.ca/2015/03/29/loaves-fishes/ […]

#29 DisgustMadeMePost on 03.29.15 at 2:53 pm

Should I have guilt about thinking of switching away from my financial adviser?

I mean, how does one go about this tactfully?

#30 ShawnG in TO on 03.29.15 at 2:56 pm

Mr T, one thing you haven’t mentioned lately is pending higher Canadian inflation. A number of stored have stated they have to increase their prices due to low CAD.

http://www.theglobeandmail.com/report-on-business/retailers-expect-to-raise-prices-due-to-weak-loonie/article23352136/

http://www.cbc.ca/news/canada/montreal/dollarama-could-raise-prices-above-3-1.3009741

http://www.iphoneincanada.ca/news/apple-increases-iphone-6-prices/

So, what will happen is Yellen raises rate but Poloz doesn’t? stating the obvious here: CAD will fall further; inflation will raise more, Poloz will have higher pressure to act on the Bank of Canada monetary policy #1 (http://www.bankofcanada.ca/about/)

#31 Linda on 03.29.15 at 3:00 pm

Amen, brother. I have (for now) a ‘gold-plated’ DB pension plan. As of my last statement, I would receive (if single) $2,390 per month if I retired today, after contributing to the plan for 32 years. But I’m not single & gold-plated is still plate, not solid gold. As someone who is married to a spouse with no pension plan other than CPP & his savings, my choices upon retirement are roughly $450 less per month due to having a spouse, so right now I can possibly count on receiving $1,940 per month. This all prior to taxes or benefits being taken off, by the way. Hence my continuing to work, because I’m not ready to live on less than my current net earnings. Frankly, if I ‘had’ to live on my current expected DB pension it would mean a very sharp correction in expenditures & definitely there would be no money left over for ‘extras’. I think the net would cover my expenses but frankly, I don’t want to put it to the test. I’m waiting until I can also collect CPP, which I believe will allow me to retire & not worry whether the bills will be paid. And yes, have RRSP’s, TFSA’s & not in dead end high interest savings, either. All in the market earning a decent level of return, but do not wish to touch until I absolutely have to.

#32 Marco on 03.29.15 at 3:00 pm

Lazy Sunday with Jesus, I mean Garth.

Check this graph out.

Stephen Poloz, note to self:

“Dear myself,

must maintain RE at all costs.”

http://www.otterwoodcapital.com/wp-content/uploads/2015/03/mar162.png

#33 takla on 03.29.15 at 3:02 pm

factoring in the probability of a flattening curve in the boom-bust cycles as N.American economy’s deflate going forward im not holding my breath that current ccp/oas will stay at these{high..lol} levels as garth suggests..

holding your breathe that returns in the markets will perform as they have is wishful thinking going forward as well.Deflation Will hit every every asset but will avoid the cost of consumer staples and tax’s as always..

#34 Piccaso on 03.29.15 at 3:03 pm

Dramatic fee hikes coming to real estate market

http://calgaryherald.com/business/real-estate/budget-dramatic-fee-hikes-coming-to-real-estate-market

#35 DisgustMadeMePost on 03.29.15 at 3:04 pm

Australian tax on bank deposits in federal budget to raise $500 million a year

Reported by: `Customs Today Report March 28, 2015

CANBERRA: The federal government is planning a tax on bank deposits at the May budget in a move that will raise about $500 million a year but which bankers warn could be passed on to customers.

..

My understanding is this is a tax on Australian banks, not consumer deposits – if it occurs. In any case, no negative rates here. Ever. — Garth

Tomatos/tomatoes.

#36 crazed and a little confused on 03.29.15 at 3:14 pm

Hi garth,

maybe you didnt get my question earlier in a previous post or email . i will check this loaves and fishes post everyday so i dont it . but i minteresed in the rrsp self directed mortgage. do u still recommend it and what are the pitfalls.

in all fairness i should treat you to a steak dinner in our very famous olympic village. maybe we can go up and say hi to bob rennie.

thanks

#37 ILoveCharts on 03.29.15 at 3:17 pm

“Don’t start this again. Surely people in the Lower Mainland have better things to obsess about. You’re tedious. — Garth”

Check the weather forecast. It’s raining hard today. we’re stuck inside and bound to complain a lot.

Here is another interesting story. This one from the Globe and Mail. It’s got a little bit of love for you (people using home equity loans,) and for I (foreign money.)

“British Columbians love expensive vehicles.

The 2014 sale of pure luxury vehicles came in 41.2 per cent above the overall Canadian market-share average, according to research by DesRosiers Automotive Consultants. In comparison, pure luxury sales in Ontario, the No. 2 market , came in 20.2 per cent above the national average.

Several factors account for the trend:

The international flavour of high-income people flocking to British Columbia and the Lower Mainland.
A “business-friendly” provincial government that has residents feeling flush, willing to spend money on strong automotive brands.
British Columbians are leveraging equity on their homes to help finance new cars. Residents are accustomed to dealing with a high cost of living, so why not throw a premium car into the game?”

#38 crazed and a little confused on 03.29.15 at 3:17 pm

sorry
so i do not miss your response or other bloggers upon this topic . but i am interested in RRSP self directed mortgage . I have about 95 K and i can sell my stocks for a huge down payment.

thanks

#39 bob's your uncle on 03.29.15 at 3:19 pm

G’day Garth:

What sayeth you. Retired…65 …pension+cpp+oas is about 75k/yr gross. Where am I in the retirement mosaic (or is that retirement mess) in the land of the maple leaf ? Are cat food recipes something that I should be googling ?

btw I rent

#40 Suede on 03.29.15 at 3:19 pm

“In retirement you can always find a roof, but you can’t easily find cash flow.”

Amen

…in continuing with the Palm Sunday metaphors of today’s blog.

Notes from the Field:

Vancouver and surrounding burbs are on real estate SOLD fire. This is now 10 years of bidding wars and lust.

One more rate drop and there will be a very solid hockey stick chart here in 2015.

-From a penthouse dweller

(They’re much cheaper to rent than to own ;)

#41 Another Albertan on 03.29.15 at 3:33 pm

The Q1 whisper numbers (always disclosed after a few beverages…) are looking to be pretty horrific for many Calgary energy and service companies. I’ve heard first and second-hand from sources I trust.

The expectation is that there will be significant bloodletting in the next 4 to 8 weeks. The winter drilling season ended two weeks ago and most of that iron and the associated staff will be sitting around for months. The question is how big will the deployments be for the summer season. Engineering companies that had queued work have largely worked off the backlog. It’s very slim pickings out there for a lot of firms that support the owner-operators.

Historically, it’s been 6 to 9 months after the engineers and field contractors are let go that the rest of the economy gets punched in the face. Depending on who is counting the elapsed months, we are arguably entering that next stage.

For those who haven’t wrapped their brains around the concepts of lead-lag effects on business decisions, the practicum portion of the lesson will begin in earnest shortly.

Everyone else’s mileage may vary.

#42 Herf on 03.29.15 at 3:33 pm

“Amanda reads this blog, which means she won’t be happy in a few sentences from now.”

Garth, you’re so bluntly negative (or is it “realistic”?).

I like it!!

#43 Naga on 03.29.15 at 3:34 pm

Garth, given oily situation here in Canada I am predicting that a 5 year mortgage will be close or below 2% by the time fall election is in full swing.

Also an observation about bubbles. First most economists and other experts never identify them until after the fact. So too many economists predicting Canadian RE to correct can’t be right.,..

So when eventually rates normalize some markets and individuals will feel the effect. But no collapse. Anyone remember early 80s high interest
rates resulted in frozen sales but overall market held up! Different story in late 80s early 90s drop of more than 25% in GTA.

You and others keep putting the debt problem up as a big factor for boomer generation – however we are starting to see the beginning of the largest intergenerational wealth transfer.

Why are you and your buddy Mandani not writing about this phenomenon and how Governments and financial institutions are going to try and manipulate it?

#44 Urban Yuppy on 03.29.15 at 3:50 pm

Sold my house Nov, 2013. Short closing so we decide to rent for 6 months or so before buying. Been renting now for 18 months. Stress free and enjoying the returns my money is making every month. Renting a house worth about $850k for $2,500 month. Money from my house sale $900k generating about $3,800 per month and the portfolio has grown 12%.

I may never buy again!

#45 Joseph R. on 03.29.15 at 3:51 pm

“In retirement you can always find a roof, but you can’t easily find cash flow.”

You can add that the planned cash flow will be from renting out the basement of the house or live elsewhere and rent the whole house.

#46 bubbles to bubles on 03.29.15 at 3:51 pm

Now, let’s imagine for a moment that all the horny people in Canada change their mind…

Wouldn’t that create a “rent bubble” (in 1989 there were long wait lists in TO for all decent apartment buildings) and imagine if all the RE money went into ETFs, wouldn’t we see quickly a stock market bubble, similar to RE bubble?

Wouldn’t we just move from one asset class bubble to an other?

#47 Randy Randerson on 03.29.15 at 3:52 pm

http://www.theglobeandmail.com/life/home-and-garden/real-estate/calgary-home-sellers-trapped-in-a-down-market/article23665874/

Looking at this Cowtown couple, perfectly illustrate the entitlement people feel about their house. “OMG my neighbor is selling their townhouse before we sold ours, how dare they!” Or “We felt like such a loser when we can’t sell at our imaginary price, and had to sell at a lower price and walk away with a smaller profit.”

People really need a kick to the crotch to wake them up from the dream that “RE always goes up.”

#48 4 AM Sunrise on 03.29.15 at 3:53 pm

One more for the language debate:

Ironically, enrollment in French Immersion programs is through the roof in Richmond. If you give an immigrant the choice between an English-only education and a bilingual education for the same price, of course they’ll choose “more” if it’s free. No anti-Trudeau grumblings here. I used to work in a tutoring centre and I see these parents come through the door – their English isn’t good, but sufficient to get business done with my non-Chinese bosses while I’m singing Frère Jacques with their kids in the next room.

I’ve been teaching French since I was a “kid” myself so I can go on about the drawbacks of French Immersion – yes, there are a few! What these parents don’t know is that actual fluency in French depends more on the student’s own motivations and not the program itself.

#49 Mukadi on 03.29.15 at 4:01 pm

Garth, congratulations!

I didn’t know that you were also doing miracles.

My boss is also 48, has $7000 (I mean 7 thousand- this is not a typo!) in his 401K account and a $800K house in Seattle.

Can I give him your e-mail address?

Thanks,

#50 Captom on 03.29.15 at 4:11 pm

Not sure if the demise of Future Shop is a harbinger of something bigger on the horizon but certainly the state of retail in the country is worrisome. Aside from the immediate 1,000 layoffs, downstream impact to the company’s suppliers, marketing, IT and e-commerce partners will be great. More trouble for our sputtering job market…

#51 Interstellar Old Yeller on 03.29.15 at 4:14 pm

#21 jane 24 on 03.29.15 at 2:29 pm
So yet another story about elderly parents who are coming up to retirement with kids still in high school. What is it with these people? By parental age 52 the kids should be long gone and you should be having literally the time of your lives. Max incomes, no debt and still have your health.

The timing of having kids isn’t the problem, it’s the lack of saving and investing. If you have your kids in your mid-30s, you had about a decade and a half to devote to post-secondary education, building up your career, and accumulating some net worth. I expect saving for retirement isn’t really on the radar in your 20s and early 30s, but those are useful, potentially productive years, whether or not people take advantage of them.

#52 4 AM Sunrise on 03.29.15 at 4:15 pm

I looked at the rental ads on Craigslist for the first time in a long while and I ask: hey West Vancouver, what’s up with all these full houses available for rent in the British Properties and in town? Way more than when I was looking for an apartment there back in 2013.

I hear there is a rental crunch in North/West Vancouver. I know that if I move out, the new tenant will probably have to pay some 5-10% more than what I’m paying right now.

North Vancouver real estate has a peculiar premium on it due to its perceived safety, lovely natural surrounds (if you don’t stop to think about the landslides in some parts of town), and perceived proximity to downtown Vancouver (for those who don’t mind playing bumper cars on the Lions Gate Bridge on-ramp; that is, if you manage to get on the on-ramp at all). It will be interesting to see what will happen to all those condos being built along its shores.

#53 Whynot on 03.29.15 at 4:16 pm

I’m sure Harpster and Co will safeguard RE till next election.

#54 Freedom First on 03.29.15 at 4:18 pm

Amanda and squeeze earn $165,000/year. In their situation they make enough to do well for retirement. What we have here, with this couple, is simply poor money management.

#55 bigtown on 03.29.15 at 4:25 pm

The dearth of savings is a major challenge for retired but if the damage just stopped at the door of the senior demographic in Canada there would be remorse but not major structural economic upheaval with the Canadian economy limping into a state of shabby previously successful society now seen in Argentina or France.

The wonks at the Bank of Canada are sadly mistaken if they believe the savings deficit is only at the margins and not in all nooks and crannies of wealth creation and destruction; too drunk with their own rhetoric to notice the crushing state and downward spiral inherent in Canadian mediocrity.

#56 Godth on 03.29.15 at 4:29 pm

The Fed Has Not Learnt From The Crisis
http://www.forbes.com/sites/stevekeen/2015/03/28/the-fed-has-not-learnt-from-the-crisis/

The Endgame of US Power
Collapse: a Foregone Conclusion
http://www.counterpunch.org/2015/03/27/collapse-a-foregone-conclusion/

‘Pornography Is What the End of the World Looks Like’
http://www.truthdig.com/report/item/pornography_is_what_the_end_of_the_world_looks_like_20150215

#57 silence the doubters on 03.29.15 at 4:30 pm

Garth, to stop the “interest rates won’t rise” people I think you should explain the relationship between where banks get the money to fund the mortgages (the capital market), where governments place their debt (the capital market) and central bank and commercial interest rates. Then they will see what you mean. Only suggesting this as it would save you from a lot of bleats re: interest rates will never rise, etc. Cheers – Craig

#58 Leroy Washington on 03.29.15 at 4:50 pm

Canadians are in for a world of pain in 2016 once interest rates start to rise, and your housing prices fall. Good luck with that!!!

Leviticus 18:17 “Do not have sexual relations with both a woman and her daughter. Do not have sexual relations with either her son’s daughter or her daughter’s daughter; they are her close relatives. That is wickedness.”

Americuh!!! God bless the U. S. of A.!

#59 Mister Obvious on 03.29.15 at 4:59 pm

#3 boom and bust Calgary

Thanks for the link. This quote from the wife in article says it all:

————————
“I know the value of this home. I designed it. … We didn’t get as much for it as we could have or should have.”
————————–

Wow! What an arrogant attitude of entitlement. The home sold for exactly what the market would bear on the day it was sold.

More telling, the husband is a portfolio manager who describes himself as a ‘numbers guy’. Maybe so. He seems to know that a higher number is better than a lower number when selling a property. Good insight.

But he’s certainly not much of a ‘risk management’ kind of guy. Hint: that’s not the kind of guy you want to have overseeing your portfolio.

#60 DM in C on 03.29.15 at 5:02 pm

Jane 24 “By parental age 52 the kids should be long gone and you should be having literally the time of your lives. ”

You would think, but we have a lot of ‘geriatric’ pregnancies these days. Both my brothers & wives are in their 40’s and each have newborns. At 52 those kids will be 8 years old. Ours will be 27 and 22. At 44 we already have one out the door, and a 15 year old — but we started in our early 20s. My parents were already grandparents at 43.

It’s a different world now. A lot of kids these days have pretty old parents compared to historical norms.

#61 Andrew Woburn on 03.29.15 at 5:05 pm

#328 Rainclouds on 03.29.15 at 11:45 am
At Metrotown, drop off neighbours mother to shop (she speaks only Mandarin) Wife speaks bumpkin dialect of Cantonese, I speak bad English exclusively.
————————-
I don’t think many Canadians understand the ethnic diversity of China. We were trying to help a Chinese friend find a job in Vancouver but he spoke only Fujien. He couldn’t even get a job at a Chinese bank since they wanted Cantonese then. If it weren’t for a common written language (character set) the place would probably be ungovernable.

I finally got it when a Chinese buddy took me to a New Year’s do put on by the Chinese consulate. A hotel ballroom absolutely full of people with very distinct features, as different as Norwegians and Spaniards. It is worth remembering this when criticizing the Chinese government. It’s not like running the US. It’s more like trying to get Europeans to march in step.

#62 Squirrel Meat on 03.29.15 at 5:05 pm

#45 Leroy Washington on 03.29.15 at 4:50 pm

Canadians are in for a world of pain in 2016 once interest rates start to rise, and your housing prices fall. Good luck with that!!!

Leviticus 18:17 “Do not have sexual relations with both a woman and her daughter. Do not have sexual relations with either her son’s daughter or her daughter’s daughter; they are her close relatives. That is wickedness.”

Americuh!!! God bless the U. S. of A.!
——————————————–
You would know!!

This pathetic blog is just hilarious most days.

#63 Mister Obvious on 03.29.15 at 5:17 pm

#58 Leroy Washington

Man, who let you in here? Anyway, you forgot one:

“Do not have sex with a wretched bible-thumping troll for that is unclean and apt to spawn bigoted lunacy”

#64 Squirrel Meat on 03.29.15 at 5:18 pm

#56 Godth on 03.29.15 at 4:29 pm

The Endgame of US Power
Collapse: a Foregone Conclusion
http://www.counterpunch.org/2015/03/27/collapse-a-foregone-conclusion/

“Ben Debney is a PhD candidate in the School of Politics and International Relations at Deakin University, Melbourne. He is researching moral panics and the political economy of scapegoating.”
———————————————
Yup I’ll take his word for sure on the end of the world…….. a PhD in panicking.

#65 Nagraj on 03.29.15 at 5:20 pm

GT: “How can these people think they’re doing well?

They all drink from the same chalice. To me this is the greatest threat our society and economy faces – ”

In the Spring of 1918, following the success of Operation Michael, Germans were convinced the war was won. Hindenburg was awarded the highest military honour. Hindenburg of course knew otherwise; after the ceremony he went home, slumped in an easy chair, and grumbled to his wife – heck, I’be very happy if we could just end this honourably.
When the end came, the Kaiser was horrified, the opposition party leaders had to be called to the palace and told. They too had no idea. The population as a whole couldn’t believe it.
Germany was NOT invaded during WWI. That went a long way in reassuring the public. Economic privations due to the British blockade and military requisitions (railway stock, horses and manpower) were bearable. The one thing that raised doubts was the endless list of casualties, but expressions of defeatism were, understandably, universally verboten.

How can Canada think it’s doing well? How can Canadians think this country won’t go the way of Portugal, Ireland, Italy. Greece and Spain?

GT: ” . . . end up bitter and sad.” You got that very wrong, GT. Nagraj says it should read: . . . end up very angry.

As a knowledgeable Canadian quasi-aristocrat you’re certainly provoking the palace press.
(Revolutionary Nagraj thinks you’re not defeatist enough.)

Of course my metaphor is a stretch, but you have, and very well too, raised the issue of of how normalcy can be collectively misperceived. Even in Canada.

#66 Andrew Woburn on 03.29.15 at 5:26 pm

Bad news for lumbersexuals. Your wives want children. You will move to (gasp) The Suburbs. If you are nice, the wife might let you keep the beard. Aging happens. Even to you.

“With the recession’s impact fast receding, Americans are finally returning to the suburbs—and beyond.

The population of U.S. counties that represent the “urban cores” of large metropolitan areas—inner cities and dense, inner suburban areas—grew just 0.73% between July 2013 and July 2014, down from a growth rate of 0.90% the previous year, according to an analysis of new data from the Census Bureau by William Frey, a demographer at the Brookings Institution. The year before, this growth rate also dropped, from 0.97%.

Suburbs of large metro areas, by contrast, are seeing their growth rates increase. The population of newer suburbs grew 1.20% last year, Mr. Frey’s analysis shows, up from 1.11% and 1.01% in the two prior years.

Perhaps most interesting: So-called exurbs—the peripheral parts of metro areas far from inner cities—saw population growth of 0.87% last year, up from 0.56% the previous year. This rate is now higher than the growth rate for inner cities. (Mr. Frey studied U.S. counties in metro areas with at least 500,000 people.)”

http://blogs.wsj.com/economics/2015/03/26/recessions-ebb-fuels-a-slow-return-to-the-suburbs/

#67 crowdedelevatorfartz on 03.29.15 at 5:32 pm

@#58 Leroy

Would you like to go for an elevator ride with me?
I promise not to talk.

#68 Squirrel Meat on 03.29.15 at 5:37 pm

They seek you be their personal Jesus….

https://www.youtube.com/watch?v=u1xrNaTO1bI

#69 Victor V on 03.29.15 at 5:39 pm

http://business.financialpost.com/2015/03/27/arizona-condo-costing-a-small-fortune-for-this-woman-jeopardizing-retirement/

A lady we’ll call Lucy has made a good life working as a data manager for a company in Saskatchewan. At 53, she has take-home income of $5,245 a month. A single mom divorced for many years, she raised two children to their mid-20s and built up $663,300 in net worth. Her plan – retire at 63 and travel a bit on what she hopes will be sufficient income.

There is a problem with her plan, however. It’s a condo in Arizona she purchased in 2011 for $105,000 in Canadian funds. She uses it for a few months of the year and rents it out for three to four months a year for about $9,000 (all figures in Canadian dollars) in total revenue before costs. She estimates that it has a $125,000 market value.

The rental income does not cover her costs of ownership and operation, based on finance costs of $550 a month she carries on a line of credit without regular paydown of principal and $1,040 condo fees and property taxes. That’s $19,080 a year. She is running a net annual loss of $10,080 a year, eroding her savings and ultimately her retirement plans.

#70 not me on 03.29.15 at 5:40 pm

#317 Eaglebay on 03.29.15 at 10:26 am

“Hookers and drug dealers don’t take Visa. You can always get better deals with cash.”

So they have hookers and coke at the grocery stores now? What’s the lollipop cash discount? lol

#71 Andres on 03.29.15 at 5:41 pm

@ 4 AM Sunrise

North Vancouver’s Marine Drive looks starkly different than even four years ago but I can’t imagine who is buying all those new condos you mentioned. Spending $500k for an 800 sq ft. wood framed apartment that looks out onto a noisy and permanently congested road? I just can’t figure it out.

#72 A Yank in BC on 03.29.15 at 5:45 pm

#3 Bust in Calgary

http://www.theglobeandmail.com/life/home-and-garden/real-estate/calgary-home-sellers-trapped-in-a-down-market/article23665874/

Man.. they sure drink the Kool-Aid in Calgary.

Poor woman. Classic narcissistic sense of entitlement with a good measure of arrogance to boot. I’m so sorry that “The whole situation irks” her. The world should obviously be run for her benefit only.

#73 NoName on 03.29.15 at 6:01 pm

@Leroy Washington

KJV
Romans 13

1 Obey the government, for God is the one who put it there. All governments have been placed in power by God.
2 So those who refuse to obey the laws of the land are refusing to obey God, and punishment will follow.
3 For the authorities do not frighten people who are doing right, but they frighten those who do wrong. So do what they say, and you will get along well.
4 The authorities are sent by God to help you. But if you are doing something wrong, of course you should be afraid, for you will be punished. The authorities are established by God for that very purpose, to punish those who do wrong.
5 So you must obey the government for two reasons: to keep from being punished and to keep a clear conscience.
6 Pay your taxes, too, for these same reasons. For government workers need to be paid so they can keep on doing the work God intended them to do.
7 Give to everyone what you owe them: Pay your taxes and import duties, and give respect and honor to all to whom it is due.
8 Pay all your debts, except the debt of love for others. You can never finish paying that! If you love your neighbor, you will fulfill all the requirements of God’s law….

repent for your sins now!

#74 not me on 03.29.15 at 6:07 pm

So when one writes to Jesus, one must not forget to insert the “private & confidential” clause.

#75 Ponzius Pilatus on 03.29.15 at 6:30 pm

#11 OttawaMike on 03.29.15 at 1:26 pm
I always thought it was Moses who invested whereas Jesus just saves.
———————-
Saw on an old billboard:
“Jesus saves, but Phil Esposito scores on the rebound”

#76 Diversified in Oakville on 03.29.15 at 6:37 pm

#29
I had to “fire” my financial advisor in December. Best financial decision I ever made.
An honest phone call letting them know that you choose to put your money elsewhere.
Just make sure you have your plan first!

#77 Irwin on 03.29.15 at 6:44 pm

What’s with all the obsession about the time of day that Mr T makes a blog entry?

Did you get sucked into an Apple watch or something? ha!

#78 4 AM Sunrise on 03.29.15 at 6:46 pm

#60 DM in C on 03.29.15 at 5:02 pm

Here’s a winner from my tutoring days: my 8-year-old student, totally unprompted, suddenly blurted out, “my dad is SO OLD! He was born in 1942!” (Background math: his father was 62 years old when he was born.)

Older than my parents, kiddo. Older than mine.

#79 TS on 03.29.15 at 6:49 pm

“We own an almost-new home and owe $250,000 at 2.3% for three more years”

I love how buying something with credit is the new definition of “owning” :)

#80 betamax on 03.29.15 at 6:52 pm

#64 Squirrel Meat: “Ben Debney is a PhD candidate”

Means he’s a grad student at some podunk university.

#81 Marco on 03.29.15 at 6:53 pm

@ A Yank in BC.

That Globe and Mail article is cringe worthy.

Have a feeling when this goes awry here in Canada there will be a lot more whining like this then in the States.

“With Mr. Wong’s and Mr. Onslow’s combined knowledge of oil-price plays and the current upturned market, there was every reason to be optimistic. ”

Lol. Combined Knowledge of oil – price plays.

#82 Sydneysider on 03.29.15 at 6:55 pm

You can now watch Sydney’s house auction of the week live or at your leisure:

http://www.dailytelegraph.com.au/news/nsw/auctions-in-sydney-watch-the-hammer-drop-live/story-fni0cx12-1227281376822

Unlike most Maroubra houses, this one is in good condition to live in, but only on a half-sized lot. A typical price lately for a shack on a full-sized lot would be $1.2m, so the land value is at best $0.6m…

#83 Andrew Woburn on 03.29.15 at 6:56 pm

Why interest rates are low, and why they won’t always be.

“Dead and buried – but how soon will inflation rise again?”

http://www.telegraph.co.uk/finance/comment/rogerbootle/11503183/Dead-and-buried-but-how-soon-will-inflation-rise-again.html

#84 Alberta Reality on 03.29.15 at 6:58 pm

Got word of yet another Grande Prairie layoff yesterday at Halliburton. I fully expect that by May the Alberta Government will be screaming recession. The hotel and restaurant parking lots are showing more and more pavement these days and the day of standing in line for a meal is disappearing. I am also told the banks have tightened their lending policies for O&G employees implementing a risk profile based on job security. IMO we are just now beginning to feel the pain in Alberta and this promises to get much worse than any imagine. If a deal is struck with Iran this week my guess is the price of oil will move very quickly below forty dollars. Add to this the price of natural gas which looks very likely to breach $2.00 and Alberta will find itself on its butt. The Energy Equities begin reporting first quarter this week and this could easily tip those investors who chose to catch the falling knife. Its ugly and very painful! I certainly feel for all the families whose lives will be tipped upside down. I hope i am wrong!!!

#85 Snowboid on 03.29.15 at 6:59 pm

#69 Victor V on 03.29.15 at 5:39 pm…

Good example of someone who didn’t do their homework before purchasing an investment property.

It could have easily been a story about someone buying a vacation condo in Kelowna, only the losses would be much higher.

In contrast in our area many Canadians have done it ‘right’, we just welcomed new Canuck neighbours a few doors down from us.

Now four Canadians couples in one block!

Too bad none of us have pools (too much maintenance) as it’s 37C today!

#86 Raj on 03.29.15 at 7:06 pm

The condo vacancy rate in Toronto is more than 10%
From the mouth of a realtor

http://landlordrescue.ca/what-is-torontos-condominium-vacancy-rate-not-1-thats-for-sure/

#87 Tom from Mississauga on 03.29.15 at 7:07 pm

Had a 3% match RRSP. Took 10 years to get a year’s gross income in there. Would last tops 2 years if I walked instead of taking the bus.

#88 John on 03.29.15 at 7:09 pm

Based upon Friday’s extra, unexpected public announcement by U.S. Fed Chair, Janet Yellen, they’re going to pull the punch bowl, as Garth warns us. Given that this extra, read between the lines, public announcement smelt of panic, panic squirming like the Fed is losing control, it likely means that Janet just blew the air horn announcing that the waters have parted and the escape route has been trumpeted. Car. Wall. No one is walking on water on this file.

Then this pearl of wisdom:
“The first six months of this year and the GDP, even with the fake inflation numbers, will be negative. The decline is so strong now that they can’t hide it anymore with manipulated numbers. So, we are going to go into a recession. How do you get out of it? I can’t see any way for them to get out of it, so, it will worsen. I think it will head into a depression.” Dr. Paul Craig Roberts PHd. Economics & Former U.S. Assistant Treasury Secretary.

Oh, and this penny just dropped. The Aussie Fed Government intends to table ‘deposit taxes’ on bank accounts in their up and coming ‘fall’ budget.

Any wonder why Joe O. can’t get off the pot! And if the big O can’t suck it up, how the heck are the rest of us to make plans and get the message, since he refuses to lay the no trump cards on the table. Wussy toy poodles!!!

Somehow it looks like we peasants are about to be Bambi crossing the meadow.
Oh, well Garth will help us keep it together.

#89 John on 03.29.15 at 7:11 pm

Heh, if food prices inflate by 20% in the next 12 months, how does that stack up against an 8% return on balanced portfolios? Just wondering.

#90 Drill Baby Drill on 03.29.15 at 7:17 pm

DELETED

#91 Drill Baby Drill on 03.29.15 at 7:25 pm

#41 Another Albertan
Having 35 yrs + experience in Oil and Gas engineering in Alta you are correct with your statement about layoffs yet to come. The engineering houses in Calgary have been laying off now for more than a year and the O&G service sector now that spring breakup has arrived are idling their crews and equipment for what will be a significant period of time. All oil companies are currently overproducing and show no signs of cutting back so this means downward pressure on crude prices. Unless there is a wreck in the middle east this downdraft on oil pricing will last a couple of years.

#92 Hicksville Alberta on 03.29.15 at 7:31 pm

#84 Alberta Reality

Doubt that the Alberta Government will even acknowledge let alone scream recession. Their heads are so far up their arses they will never see reality because it’s too dark down there.
The budget for the most part just mostly taxes the one’s that aren’t in the big club while the big club just carries on.
Meanwhile there is continuous serious erosion in the field and there should definitely a lot more to come.

#93 Waterloo Resident on 03.29.15 at 7:33 pm

I don’t know if I am right or not but I’m going to tell everyone my feelings about what I’ve been seeing the past 6 months, and it ain’t pretty. Just before Christmas I noticed that Canadian Tire was empty, at a time when it should have been full of shoppers. And I noticed about half of everything had these little SALE stickers on them, listing things from 10% to 40% off. Now, a few months later almost EVERYTHING has those stickers and its now 30% to 80% off. I told my sister that something really bad is happening to the economy, and I’ve never seen it so bad for as long as I can remember (I’m 50). I was talking about Target shutting down and how Radio Shack (‘The Source’) or Sears will probably be next to go. Now for those of you who say that the online shopping is stealing sales away from retailers, well, what does Canadian Tire sell; can you find those things online? I don’t think very many people are buying new brake pads or crowbars and wheelbarrows online at Ebay. Last week I bought a $165 wheelbarrow on sale for only $49, it was the 5 th price mark-down for that thing and they had 20 of them in stock. I talked to the sales manager of that department and he told me that the whole damn store is having a going-out-of-business sale, its just not being advertised that way. So don’t be surprised if some time over the next few months you find all Canadian Tire stores across Canada are shutting down. I’m beginning to get the feeling that Canada is going into a mighty bad recession, and with our insane amount of consumer debt out there, it just might become one of the worst recessions we’ve ever had. I just hope and pray I’m wrong about that.

#94 Drill Baby Drill on 03.29.15 at 7:39 pm

#90 Drill Baby Drill
“Deleted” ?? I am not un American, I work with and for Americans. I am just against the American idiot who is constantly posting insults to us Canadians.

#95 Squirrel meat on 03.29.15 at 7:45 pm

#58 Leroy Washington on 03.29.15 at 4:50 pm

Canadians are in for a world of pain in 2016 once interest rates start to rise, and your housing prices fall. Good luck with that!!!

Leviticus 18:17 “Do not have sexual relations with both a woman and her daughter. Do not have sexual relations with either her son’s daughter or her daughter’s daughter; they are her close relatives. That is wickedness.”

Americuh!!! God bless the U. S. of A.!
——————————————
Candy’s got it.

https://www.youtube.com/watch?v=1bXzFY72wbs

#96 Jan Mc Masters on 03.29.15 at 7:46 pm

RE 15

“Oh. So you’re a parasite? — Garth”

Slippery slope G…by definition…all civil servants are parasitic. They produce nothing of economic value.

What is truly reprehensible is the fact that civil servants inc cops and teachers et al are doing this retire and contract back’ double dipping waltz and keeping hundreds of thousands of young grads out of the job market.

#97 omg the original on 03.29.15 at 7:47 pm

REMEMBER ALL THE FORECASTS 10 YEARS AGO ABOUT HOW THE BOOMERS WILL BE RETIRING THEREBY OPENING UP GOOD JOBS FOR OUR KIDS

It has not happened and will not happen for some time.

Because most BOOMERS I know simply are broke – they have kids in university, upgraded to a bigger house/mortgage, always need a couple of recent model SUVs, and have little in the way of retirement funds.

Even my former FAT GOVERNMENT-PENSIONED collegues are hanging on until the bitter end.

Likely won’t see the start of the big exodus for a another 5 years.

#98 Nora Lenderby on 03.29.15 at 7:49 pm

#89 John on 03.29.15 at 7:11 pm
Heh, if food prices inflate by 20% in the next 12 months, how does that stack up against an 8% return on balanced portfolios? Just wondering.

Er…if you are presently spending all your income on food, I suppose that will present a difficulty.

OK, how about you go out and buy a package of lettuce seeds ($1-$2 for 100). Sprinkle them on some earth in a box. Water them every day and pretty soon you’ll have some fine lettuce seedlings that you can sell for $4 a dozen.

Keep them for another six weeks or so and you’ll be able to sell lettuces for $4 each. Or you can eat them and save your grocery money.

Next week’s lesson: Animal husbandry – it’s great until they catch you at it.

#99 Squirrel meat on 03.29.15 at 7:49 pm

#93 Waterloo Resident on 03.29.15 at 7:33 pm

Last week I bought a $165 wheelbarrow on sale for only $49, it was the 5 th price mark-down for that thing and they had 20 of them in stock.

————————————————-
Hey, you only got ripped off by $39 dollars!

#100 Drill Baby Drill on 03.29.15 at 7:49 pm

The Bank of Canada I think will hold off raising interest rates until after the federal election some time later this year. The upcoming federal budget will be an easy touch but watch out if there is a majority PC government then it will get ugly in 2016. Interest rates will rise and public sector employees will be let go.

#101 John on 03.29.15 at 7:50 pm

So our Loonie has been defeathered by over 20% against the US buck. Does that 8% gain in a balanced portfolio mean we’re getting ahead? Or, is it that we’re just taking longer to go down for the count?

Bet, some Toronto and Vancouver $2.2 million dollar 600 Sq.ft. owners must be squeezing the cheeks…. until the rates rise and their jobs disappear. Just can’t comprehend average folks jumping into that almost incomprehensible amount of debt!!! Even more wild, they think we’re all losers for not going Wyle E. with’em!

There are so many folks around the world just watching Canadian house prices and almost holding their breath. But most Canuckie folks I know just ignore the whole thing and turn on netflicks or TSN.

They think Garth is a ranting wrinklie, Jeramiah. No offense Garth. But if I say “Garth T says”… they roll their eyes. Sad really. Just pity them. Horse. Water.

#102 FTP - First Time Poster on 03.29.15 at 7:52 pm

Praise be Brother Garth….praise be.

#103 Squirrel meat on 03.29.15 at 7:54 pm

Hey Leroy, mange mes briefs

https://www.youtube.com/watch?v=cC1f2e6Kk7c

#104 omg the original on 03.29.15 at 7:58 pm

S’TOONER VS ARIZONA RENTALS

My brother-in-law has sold some of his farm land outside of the S’tooner for a ridiculous price.

So now he’s looking for someplace to park it and just got back from Arizona looking at multi-unit rentals. He says its like shooting fish in a barrel down there compared to S’tooner properties.

Lots of choice around Phoenix and the rentals actually have a positive cashflow. Even on some individual condos and houses.

From what he has seen in S’tooner, unless you want to run a boarding house or can afford a 100 unit building its extremely hard to get bona fide positive cashflow.

Countering the crappy S’tooner returns is the fact that he lives just outside S’tooner – so owning there would be a lot easier than owning in the US.

#105 Babblemaster on 03.29.15 at 8:00 pm

#15 Babblemaster

“Oh. So you’re a parasite?” — Garth

——————————————————–

Not at all. You’re being purposely obtuse (and sarcastic). I take great pride in earning my pay. I’d say at least 25 – 35% of public servants do as well. The real problem is the mandarins and politicians that waste money for the sake of political posturing. There are many examples. The one I tried to highlight is is the axing of civil servants to purportedly save money (doing more with less, blah, blah) when in fact, what they save in salary dollars, they more than make up for in contract dollars. Or, another example, they freeze salary dollars for all positions for several years. Then they circumvents the rule by hiring many of the existing employees into new higher positions at a higher salary. Yeah, real savings for taxpayers.

In the short term will be pain for some public servants in Ottawa, but the long term trajectory is always for their numbers to go up.

#106 46 and 2 on 03.29.15 at 8:04 pm

#71 Andres on 03.29.15 at 5:41 pm

North Vancouver’s Marine Drive looks starkly different than even four years ago but I can’t imagine who is buying all those new condos you mentioned. Spending $500k for an 800 sq ft. wood framed apartment that looks out onto a noisy and permanently congested road? I just can’t figure it out.
====================
It’s actually not that hard to figure out….For whatever reason Vancouver is on THE list of the best places to live on the globe and Vancouver being in Canada makes it all the better. The wealthy of the world pick and choose where they are going to buy and the world has a ton of mobile cash whereas Vancouver has no land. As long as the immigration dollars pour in the prices will continue to increase in the lower mainland REGARDLESS of what is happening in the rest of the country.

#107 Nora Lenderby on 03.29.15 at 8:06 pm

#58 Leroy Washington on 03.29.15 at 4:50 pm

You’re bit late posting today, Oh furry one. I’ll see your Leviticus 18:17 and raise you a Leviticus 19:27:

“Ye shall not round the corners of your heads, neither shalt thou mar the corners of thy beard.”

You see folks, square cut beards are in the Bible!

#108 Trojan House on 03.29.15 at 8:08 pm

“My understanding is this is a tax on Australian banks, not consumer deposits – if it occurs. In any case, no negative rates here. Ever. — Garth”

Yes, it is on the banks but it is being called a tax on deposits banks hold. Of course, the banks said if it happens, they would simply pass the cost on to the consumer. The s&%t always rolls down hill.

It will not reduce yields, as was contended. — Garth

#109 kommykim on 03.29.15 at 8:20 pm

RE: Registered pension plans are taxable. Non-registered portfolios are not. A 4% return is sub-par. — Garth

They are both taxable. They are just taxed differently. Those dividend tax credits and capital gains taxes have nothing to do with a RRSP or TFSA.
The 4% I was quoting was the after inflation return that you can safely count on for longer periods (decades). You know, the old conservative 4% rule. It’s for people who want to retire early and never be forced back to work.

A non-reg portfolio, if large enough, can provide income as return of capital, non-reportable, so benefits are not clawed back. Income from a registered plan is fully taxed at your marginal rate. And 4% is sub-par. — Garth

#110 kommykim on 03.29.15 at 8:32 pm

RE:#29 DisgustMadeMePost on 03.29.15 at 2:53 pm
Should I have guilt about thinking of switching away from my financial adviser?
I mean, how does one go about this tactfully?

Why worry about it. You are paying for a service. If you are not happy with the service you are receiving and you have given them a chance to correct this, then leave. It’s your money.

#111 mitzerboy aka queencity kid on 03.29.15 at 8:39 pm

trust in the lord …all others pay cash

aint got nothin tu do with money or religion

#112 kommykim on 03.29.15 at 8:41 pm

RE:A non-reg portfolio, if large enough, can provide income as return of capital, non-reportable, so benefits are not clawed back. Income from a registered plan is fully taxed at your marginal rate. And 4% is sub-par. — Garth

Please tell me the name for this type of investment vehicle. Last I heard, money earn from income trusts became taxable in 2011.

As I have explained many times, an array of assets, carefully weighted and appropriately rebalanced. — Garth

#113 John Mc on 03.29.15 at 8:45 pm

And 4% is sub-par. — Garth

Garth you are missing his point. The 4% he is referring to is not the return on investment, but the ol’ 4% withdrawl rule. Arguments go back and forth but the gist is if you have the proper savings invested you should be able to withdraw and live on 4% indefinitely, or at least for a normal retirement. (Assuming 4% gives you enough to live on).

I get it. Archaic thinking. — Garth

#114 Ernest on 03.29.15 at 8:46 pm

Garth, i have tried hard but don’t see what could be wrong with buying at Costco? Good quality for sure.
Could u please clarify?
What alternative do u have?

#115 DisgustMadeMePost on 03.29.15 at 8:55 pm

Going to rename myself.. IgnorantButTryingToLearn..

By non-registered, are we talking investments other than such like RRSP’s?

And how large does large have to be?

Yes, and seven figures would be good. — Garth

#116 Calgary Retiree on 03.29.15 at 9:00 pm

#73 NoName

That’s what this blog needs. Some good ol bible thumping, KJV no less.

But wait, if the original JC was executed by the authorities, does that not mean he was guilty as sin – according to Romans 13?

#117 Gary on 03.29.15 at 9:03 pm

DELETED (Anti-immigrant)

#118 Notagreaterfool on 03.29.15 at 9:18 pm

The last two years, when pressed the politicians stated a soft landing was underway in the housing market. we now a have degrading economy where even lowers rates are required while job losses mount. Is the call for soft landing still true? I see a lot less talk by politicians about a soft landing now. Are we heading for a hard landing?

#119 SWL1976 on 03.29.15 at 9:19 pm

Well, here’s the point: both the Canadian and US economies could be hobbled

That sounds about right. However, more accurately the words “could be” should be replace with “are being” to truly reflect our present state.

For everyone out there who thinks the Fed will not raise rates as the economy is not strong enough to handle it… Think again, and remind yourself just who the Fed serves? Their whole plan has always been to take down America from within.

Perhaps they want to kill the dollar to force the sheep to accept their new fate… Complete control and servitude.

The nut bar’s and tinfoil hatter’s seem to have a better grasp of what’s really happening than many many formally educated people

At this point in the game with all the information available at our finger tips… If you can’t see where this is heading you are either ignorant or most likely still in denial.

#120 Leo Trollstoy on 03.29.15 at 9:25 pm

I love how buying something with credit is the new definition of “owning.

Well _somebody_ has to pay for property taxes, insurance, and maintenance.

#121 nonplused on 03.29.15 at 9:34 pm

Retirement was always a myth or Ponzi scheme. It is for the rich who had the good sense to save and invest and government employees only.

Lettuce is not food unless covered in dressing, preferably with bacon and parmesan too.

#122 Fuzzy Camel on 03.29.15 at 9:35 pm

Rates are going up in June or July.

Deal with it. This is going to change the way the economy has been running for the last 30 years.

There is going to be a lot of pain, unwinding an economy addicted to ZIRP will hurt. Hedge accordingly because once the deleveraging starts, your tears won’t put out the flames.

#123 No Canada, No on 03.29.15 at 9:36 pm

Spectacular, $165,000/y is basically a poverty level in Canada.

#124 will on 03.29.15 at 9:45 pm

Went out to Calgary this past week to visit my buddy. I’ve gone out there about this time of year for the past 3 years. I’ll never forget our walk last year through the Plus 15. That’s the overhead walkway that connects all the big office buildings downtown. Wave after wave of office workers coming at you. It was quite fascinating. This year went again through the Plus 15. And you know what? You guessed it. I bet you those crowds were about 2/3 LESS. I read in the G&M recently that the equivalent of about two of those office towers got laid off. More evidence that province and people are so screwed.

#125 NoName on 03.29.15 at 9:50 pm

#116 Calgary Retiree

“original JC”
was there a fake one?

#126 kommykim on 03.29.15 at 9:52 pm

RE: #112 kommykim on 03.29.15 at 8:41 pm
RE:A non-reg portfolio, if large enough, can provide income as return of capital, non-reportable, so benefits are not clawed back. Income from a registered plan is fully taxed at your marginal rate. And 4% is sub-par. — Garth

Please tell me the name for this type of investment vehicle. Last I heard, money earn from income trusts became taxable in 2011.

As I have explained many times, an array of assets, carefully weighted and appropriately rebalanced. — Garth

Yes you have. So how do you turn a balanced array of assets (Bond, equity, and preferred ETFs) into a tax free income stream generated in a non-reg portfolio?

Non-reportable, not tax-free. — Garth

#127 OWSJ on 03.29.15 at 9:54 pm

#124

So Will, you walked through the hamster tubes at exactly the same time of year and same time as last year to come to that conclusion? You must be very astute in scientific methodologies.

#128 d on 03.29.15 at 9:56 pm

Ah, I think I see, at least a bit.

Since only 50% of capital gains are taxed… that would be less than the marginal rate.

But how much income (non-reportable) can you make before it is reportable?

I have never had to be concerned with any real amount of money for investment… it was always tied up in the house.

Gonna try and find some rules…

Good idea. And return of capital has nothing to do with capital gains. — Garth

#129 Keith in Calgary on 03.29.15 at 9:59 pm

“My understanding is this is a tax on Australian banks, not consumer deposits – if it occurs. In any case, no negative rates here. Ever. — Garth”

—————————

The Aussie banks have already stated that they will have to pass this cost on to the depositors. I’ve never seen a financial institution with a sign out front that said “United Way Savings Bank”………….

As for NIRP here in Canada, we’re already there. Open a basic chequing or savings account and do the math at the end of the month, By the time the hidden theft…..errrrr bank fees…..have been calculated versus your interest (if you get any that is)….you’ve been NIRP’d.

#130 lala on 03.29.15 at 10:03 pm

The credit is the problem and the world is a mess. Well Sunday again, lala have no problem with it, i sleep like a sheep on Mondays as I don’t have to wake up early, no mortage, or debt. If lala don’t have money lala don’t buy that’s the secret. Tip. Why buy in frozen Toronto when you can buy in sunny thessaloniki for 10 times cheaper. I feel sorry for Canadians with one passport.

#131 Squirrel meat on 03.29.15 at 10:11 pm

#125 NoName on 03.29.15 at 9:50 pm

#116 Calgary Retiree

“original JC”
was there a fake one?
————————————–
Yes, Jim Jones

#132 Frank Blood on 03.29.15 at 10:12 pm

Re: 21 Jane 24. “So yet another story about elderly parents who are coming up to retirement with kids still in high school. What is it with these people? By parental age 52 the kids should be long gone and you should be having literally the time of your lives. “. Pretty harsh comment… Maybe this couple played the cards they were dealt… Met each other late? Second marriage? Fertility problems? Maybe they just wanted to enjoy life free of kids while they were young..

#133 Ralph Cramdown on 03.29.15 at 10:16 pm

A bit more on that Calgary couple profiled in the Globe and Mail…

As expected, he’s not a VP “at the bank” (a somewhat rare title), but at CIBC Wood Gundy. He’s not managing the bank’s portfolio, he’s a stockbroker doing enough business to get the VP title.

https://www.cibcwg.com/web/butler-onslow-group/our-team

Two things I like. They list the combined designations of their partners behind the partnership’s name… cute. And under “products and services” they list “Alternative Investments” (partnerships in dry oil wells, non traded REITs and leveraged losses, no doubt).

The money quote from the Globe is “With Mr. Wong’s and Mr. Onslow’s combined knowledge of oil-price plays and the current upturned market, there was every reason to be optimistic.” So the real estate agent was bullish on housing and the stockbroker was bullish on energy. Wonder what the broker’s account was full of? And his clients?

Now on to the wife…
Look at this page:
http://www.newwestluxuryhomes.com/our-team/
…and scroll all the way to the bottom. I don’t want to put too much weight on her being the last listed on the page, but it isn’t in alphabetical order. If I was that luxury homebuilder (in business only 3 years) and business went soft, by the looks of things I’d start crossing off from the bottom of the list.

Others have commented on the absolute idiocy of buying a house that you know you’re going to have to sell in 2 years because you’ve already contracted for an even more expensive house and can’t afford to carry two…

But I think this couple may be holed below the waterline. His assets and income may well be way down, and she’s on the bubble at work. Plus they lost a chunk of coin on house #2, and the price of #3 was set two years ago. And that two year builder mortgage…

N.B. His partner shares a last name with her boss. Coincidence?

#134 Rexx Rock on 03.29.15 at 10:17 pm

A Vancouver realtor told me last week that he’s seeing a trend of couples with no kids that bought houses in the 90’s are selling and retiring with there huge gains.The funny thing is the couples are in their late 40’s.I guess you can call Vancouver lotto SFH.

A realtor source. Take that to the bank. — Garth

#135 Smoking Man on 03.29.15 at 10:20 pm

#123 No Canada, No on 03.29.15 at 9:36 pm
Spectacular, $165,000/y is basically a poverty level in Canada.
……

So true. What is money anyway.
Its labour credits. You have some , you can purchase some labour with it.

Withhold labour.Then Money is worthless.

When your govt sells bonds, its selling your future labour. A bond is a pledge by your elected officials to guarantee you will work, pay tax

We are all owned bitches.

7 years of weekly Casino Visits. Ha. I’m not so owned anymore. But a true confession will land me in the pen..

Would love to do a death bed confession. You guys would really appreciate it.

You’re going to have to wait a bit, but not long.

#136 will on 03.29.15 at 10:24 pm

Hey OWSJ #127

Yeah no science. It’s all anecdotal. But everyone knows the Alberta and Calgary story. What I think I saw was confirmation of opinions that are more scientifically based than mine. As much as I can’t stand the Globe & Mail writers, I have no reason to dispute their statement about layoffs in Calgary’s downtown core.

#137 MP2U on 03.29.15 at 10:25 pm

#99 Squirrel meat on 03.29.15 at 7:49 pm
#93 Waterloo Resident on 03.29.15 at 7:33 pm

Last week I bought a $165 wheelbarrow on sale for only $49, it was the 5 th price mark-down for that thing and they had 20 of them in stock.

————————————————-
Hey, you only got ripped off by $39 dollars!
————————————————-

I don’t think he got ripped off, a couple of years ago I live next to a factory in China that produced garden tools including wheelbarrows. The unit costs were about $28 to $66 for one wheeled models they made that were suitable for export.

Wow, after reading this blog for a few months. I never expected my first post to be about wheelbarrows.

#138 Financial Freedom at 40 on 03.29.15 at 10:26 pm

112 kommykim on 03.29.15 at 8:41 pm
RE:A non-reg portfolio, if large enough, can provide income as return of capital, non-reportable, so benefits are not clawed back.
———
So I have my delightful pile of T3s and T5s for the non-registered account and some forms are indeed blank in all the numbered boxes and lists return of capital on a separate line. My understanding it is reducing my adjusted cost base, thus increasing capital gains when I sell the investment. It defers tax, but strikes me as a pain to calculate.

That is a distribution which is a return of capital from a security held which does indeed alter its ACB capital value. It is not the principle I referenced. — Garth

#139 ozy - hakuna matata on 03.29.15 at 10:27 pm

hakuna matata! happy life says the grass hopper!!!

no worries, BOC will run wave its hyper-hyper wand (inflation) and there will be enough $$$$ in our retirement in Canada

What I really worry about – is 99% of the ants working too hard and not having the FUN ;) needed to carry them in retirement :)

#140 OttawaMike on 03.29.15 at 10:29 pm

Where’s Smoking Man?

Must be still on last night’s hot date with Jack Daniels.

#141 prairie person on 03.29.15 at 10:32 pm

It has started. Friends are paying 1200 on their mortgage, had to move, best they could get for rent was 550. Big subsidy for the renter. The renter is living well. They aren’t. Country places are starting to feel the pain. It isn’t just the big centres.

#142 Nosty, etc. on 03.29.15 at 10:37 pm

#7 Spectacle on 03.29.15 at 1:14 pm — “I appreciate your inclusion of me in the sub-group from last Fridays post (as always, appreciate your research here).”

No trouble. In particular. two links — the new French drone and the USAF — re: the new lasers (plus new undersea drones), instead of the usual boring bombs, along with the advent of artificial intelligence show how fast the technological and evolutionary aspects of life are moving.

With all the negative Iran rhetoric being spewed forth, it is noteworthy to remember that Iran (first) has a good-size Jewish population, and (second) has not invaded another country for over two centuries now, whereas Israel and America (through their govts. of the day) regularly interfere with other countries’ rights, then passing the buck to some other patsy.

With a nod to Frank Zappa and the Mothers of Invention (Just Another Band from L.A., c. 1971 or thereabouts), this planet is now in such a mess that it is clearly under the dastardly, evil influence of the frozen beef pie from Ralph’s!

Anyhow, here’s a few items of interest for you — Russia — Not Just Tanks, The new P2P Economy, Yemen is Obama’s Vietnam (more Soros’ color revolution), The Destruction of the Gulf, Greece, Oz, Russia and plenty of others shifting toward China’s new AIIB and China’s NWO.

#143 Obvious Truth on 03.29.15 at 10:38 pm

#123

Good point. I never thought of it that way.

The jar lady would love to have someone like you to work with Amanda. 165k is a good place to be starting from. But a rethink is probably in order.

Personally I’m looking forward to animal husbandry night. Thinking fresh eggs and goats milk. Perhaps aquaculture.

You can do this Amanda. We can help..????You know what they say. Give a man a fish…..

Clearly this blog isn’t just for dogs anymore.

And the divine touch is nice too.

#144 Hawk on 03.29.15 at 10:41 pm

#13 David McDonald on 03.29.15 at 1:46 pm

Yeah the sunshine list. Ontarians must be mad, ….literally mad, ….not to have voted in Tim Hudak this time.

#145 Financial Freedom at 40 on 03.29.15 at 10:43 pm

P.S. This was helpful to me on Return of Capital
http://www.moneysense.ca/columns/tax-efficient-investing-with-etfs

Again, this is not the principle upon which non-reportable retirement income from a portfolio is based. It refers to RoC distributions which affects a security’s ACB. — Garth

#146 Squirrel meat on 03.29.15 at 10:45 pm

#133 Ralph Cramdown on 03.29.15 at 10:16 pm

A bit more on that Calgary couple profiled in the Globe and Mail…
—————————————

Amazing detective work Cramdown….

#147 46 and 2 on 03.29.15 at 10:47 pm

#15 Babblemaster on 03.29.15 at 2:00 pm

Oh. So you’re a parasite? — Garth
======================
Tad harsh for someone who is expressing an opinion.

Actually he was sucking and blowing, and deserving of the term he blanketed on others. — Garth

#148 mathman on 03.29.15 at 10:48 pm

RE: Waterloo Resident – could not agree with you more, the retail sector is going to be in real trouble, real soon. I tend to base my opinions on observation. Live in the west end of Toronto. Future Shop(Best Buy)/Golf Town/Staples etc, for 18 months or so you have been able to count more employees then customers.

It’s not retail that I worry about it is the down stream or peripheral impact. IMHO within 5 years or sooner big box retailing will be dead. Retail Jobs, REIT’s unable to lease the square footage, IT, cleaning, security, suppliers etc.

Future shop is not going to be the last. It’s not if but when for many others. We need innovation to survive in this country, not low paying services sector or public sector work that adds zero economic benefit, as a previous comment mentioned.

#149 Obvious Truth on 03.29.15 at 10:52 pm

Wondering if we could get a little nugget from the realtor and portfolio manager on where the price of oil is headed. And the trajectory of Alberta RE.

#150 Smoking Man on 03.29.15 at 10:53 pm

#140 OttawaMike on 03.29.15 at 10:29 pm
Where’s Smoking Man?
Must be still on last night’s hot date with Jack Daniels.
…..

Working on my book, feel like I’m running out of time.

Nothing serious , but the god damn Ucc is sending out some troubling messages.

Its telling me to , switch from wine and JD to water, cigaretts to celery.

Fk the UCC

#151 46 and 2 on 03.29.15 at 10:53 pm

DELETED (Sexual content)

#152 Mark on 03.29.15 at 11:02 pm

“no worries, BOC will run wave its hyper-hyper wand (inflation) and there will be enough $$$$ in our retirement in Canada”

Doubtful. Inflation destroys the value of most ‘retirement’ plans out there which tend to be over-weighted fixed income, RE, and equities positively correlated with interest rates. Relatively few investors own truly inversely correlated assets. Which is how the relative lack of wealth creation in the “western world” will ultimately manifest itself in the real portfolios of the public.

#153 Waterloo Resident on 03.29.15 at 11:06 pm

I know that the only sectors holding up the Canadian economy right now is the consumer and government sectors, and that is retail jobs, construction jobs, and government jobs. The government cannot hire any more workers so that’s out of the question. The retail sector is dying a slow death. So the only thing left is home and industrial construction. But you can forget about industrial construction, it’s been dead for years now.

On the weekend I went searching for a photo developing store here in Kitchener (my sister needed an old ‘one-time-use’ camera developed for her kid), a photo place I never went to before, and I got lost, passed right by it, and found an industrial mall complex with over 50, maybe 100 huge and ‘FOR LEASE’ industrial buildings, each one of them multiple times as large as a typical ‘Future Shop’ store, and all of them empty for at least the past 4 years. The industrial area must have been about 1 mile by 3 miles in size: huge. I was blown away, so much available space, so little demand. It’s like those Chinese Ghost City videos you see on YouTube, except its right here in Canada. And just like those Ghost Cities in China, every single one of those buildings was 100% empty. Weeds were beginning to grow up in cracks in the parking lots, they have never been used.

#154 Karma on 03.29.15 at 11:09 pm

#123 No Canada, No on 03.29.15 at 9:36 pm
“Spectacular, $165,000/y is basically a poverty level in Canada.”

Only for idiots who can’t control their spending. Discipline is usually what separates successful people from unsuccessful people.

#155 Squirrel meat on 03.29.15 at 11:10 pm

#137 MP2U on 03.29.15 at 10:25 pm

#99 Squirrel meat on 03.29.15 at 7:49 pm
#93 Waterloo Resident on 03.29.15 at 7:33 pm

Last week I bought a $165 wheelbarrow on sale for only $49, it was the 5 th price mark-down for that thing and they had 20 of them in stock.

————————————————-
Hey, you only got ripped off by $39 dollars!
————————————————-

I don’t think he got ripped off, a couple of years ago I live next to a factory in China that produced garden tools including wheelbarrows. The unit costs were about $28 to $66 for one wheeled models they made that were suitable for export.

Wow, after reading this blog for a few months. I never expected my first post to be about wheelbarrows.
————————————————————

And the ones that weren’t suitable for export were sent to Canadian tire :)

Isn’t this blog great. RE, Bebe Jesus, animal husbandry, aliens, tinfoil, and chinese wheel barrows – all in one.

#156 Spaccone on 03.29.15 at 11:12 pm

#39 bob’s your uncle on 03.29.15 at 3:19 pm
G’day Garth:

What sayeth you. Retired…65 …pension+cpp+oas is about 75k/yr gross.
:::::::::::::::::::::::::::::::::::::::::::::::::::

My father is a touch over 65 and makes about 34k (before 9.3% effective tax rate) from CPP, Union pension, and OAS, with the added costs of living (with my not-retired mother) in a fully-owned near $1mm house (ie to start…close to 6k in property taxes).

#157 Obvious Truth on 03.29.15 at 11:24 pm

Enough of the Canadian doom and gloom stuff. We all know it’s a ness. And central bank predictions; nobody cares anymore.

Lets finally break that s and p out and make some $.

#158 Linda Pearson on 03.29.15 at 11:39 pm

Loaves & fishes
March 29th, 2015
Garth, you go too far. Deleted (blasphemous)

If you wrote in the same way of the spiritual Lord of any other religion – Muslim, Jewish, Shinto, Animism for instance – you would be soundly, and rightly, criticised. As a Christian, I expect the same treatment.

Though you may not share my religious views, and many (most?) here will not, please accord me the respect you would give to some of the others…even if I won’t declare a fatwa against you.

#159 45north on 03.29.15 at 11:48 pm

regarding the US Fed raising interest rates:

“let it come”

http://www.americanrhetoric.com/MovieSpeeches/moviespeechamistadjqadams.html

#160 Nagraj on 03.29.15 at 11:49 pm

Most impressive and deservedly memorable words written by any current Canadian analyst:

“So, what went wrong? How can these people think they’re ‘doing well’ when they’re headed for a wall?
Simple. They have friends. Coworkers. Relatives. They all drink from the same chalice. To me this is the greatest threat our society and economy faces – the slow sleepwalk into financial torpor and failure.”

Where’d ya read that, folks?

No, it aint Pierre Berton, he’s dead.

Did ya hear it first thing on “The National” read by an authoritative Knowlton Nash?

A United Church sermon? Not likely.

A transcript of Witte yelling at Nicholas II as rendered by Trotsky? (The cadence of the words at least fits that bill, actually.)

Private words of Norman Bethune?

A transposition of a thought recorded by Hannah Arendt?

I’ve been reading this blog for a few years and only recently decided to comment, I don’t comment anywhere else. The quote above puts the author in a league of his own. I don’t agree with GT on a number of points but that’s chaff in the wind. This man delineating the greatest threat facing Canadian society deserves undivided and grateful attention.

Blogdogs, we may consider ourselves as exclusively blessed as students who got tickets to a rare guest lecture by – fill in the blank. I can’t think of a comparable Canadian analyst.

GT is – unfortunately – not an academic. I submit he lacks the conceptual framework to adequately express himself in terms acceptable to the PoliSci community. At 65 it’s not too late to learn new words. Still, “slow sleepwalk into financial torpor and failure” is perhaps prophetic. We know about prophets and their popularity at home – “a prophet is without honour in his own country” –

#161 Babblemaster on 03.29.15 at 11:51 pm

#147

“Actually he was sucking and blowing, and deserving of the term he blanketed on others.” — Garth

——————————————————–

Actually, I didn’t blanket anything on “others” at all. I was simply relating my observations of how organizations like the Ontario government work. Rife with politically motivated waste. Garth, you can be really intolerant of those that challenge any of your positions or statements. Prickly.

#162 Squirrel meat on 03.29.15 at 11:54 pm

DELETED (Libelous)

#163 canuck in hk on 03.29.15 at 11:59 pm

I’ve read Jim Rogers before on the rate hikes… he expects the Feds to raise it a little, like .25-.5%, and then market screams and throws a huge tantrum and rates will be on hold/lower again.

Is it possible that we are entering a new era of another perma-rate decrease as in previous cycles? I mean rates in 80’s and then 90’s were cut to “historical lows” and never returned to those levels after.

IMO, at most we would see 2% (more likely 1%) and rates will be slashed to 0 again.

#164 wallflower on 03.30.15 at 12:06 am

Fallacy: It’s a different world now. A lot of kids these days have pretty old parents compared to historical norms.
= = =
In the 1800s, women had children WELL into their late forties. It’s just that by that age, there was a generation between their first and their last child.

#165 Bottoms_Up on 03.30.15 at 12:12 am

#158 Babblemaster on 03.29.15 at 11:51 pm
——————————————————
In defence of Garth, your blog post felt like an attack on public servants, ‘wasteful’ because it ‘always grows’ and ‘long term trend is up up up’.

You then go on to say how you left the public service, and are charging the tax payer “much more” to do the same work that you were doing as a public servant. That is oh so nice of you, to contribute to that ‘long term trend’. So Garth is correct, you are a parasite.

And speaking of that ‘up up up’ trend, here are the numbers for federal public servants, you’ll note that the current size of the core administration is now roughly the same size as it was in 2007, and represents 0.5% of the population.

http://www.tbs-sct.gc.ca/res/stats/ssa-pop-eng.asp

#166 SealTeam0 (So secret I'm not sure I exist) on 03.30.15 at 12:19 am

“#58 Leroy Washington on 03.29.15 at 4:50 pm ”

I believe, when you read through this nonsense, That the message Leroy is trying to convey is that while all of these things are wrong, he is completely justified in having sex with his sister as all of his realtives before him did. It is long established that this is how developmentaly challenged people like Leroy are created.

#167 Entrepreneur on 03.30.15 at 12:22 am

The States have more people and their economy supports small businesses; so therefore, moving ahead.
Oh, I believe they also have the right-to-work in place.

In the sixties on Vancouver Island a person hardly saw a big box store. Future Shop and others are probably experiencing the days parents shopped for the kids but now they are older but no family of their own. Also, the States is very attractive for businesses.

My mother had her last child at the age of 38, the elderly lady next door at 39 and many other women in those days. Now many are not having children, the family image is disappearing.

#168 SealTeam0 (So secret I'm not sure I exist) on 03.30.15 at 12:28 am

You should watch this Leroy. Please realize that they are being sarcastic. You can look up the meaning of that word here http://www.thefreedictionary.com/sarcastic or have someone explain it to you slowly.
You need to turn on your speakers for this. https://www.youtube.com/watch?v=U1mlCPMYtPk

#169 millenial1982 on 03.30.15 at 12:28 am

Hallefreakinlujah Garth!
.#6 LB on 03.29.15 at 1:09 pm
“The economy is still trying to grow against significant headwinds, and requires considerable monetary stimulus to avoid falling back into recession,” Poloz wrote. “The positive progress that has been made must be weighed against lingering uncertainty about the future.”

Poloz Says Canada Stimulus Needed to Avoid Slide Into Recession

http://www.bloomberg.com/news/articles/2015-03-27/poloz-says-canada-stimulus-needed-to-avoid-slide-into-recession

“Importantly, it has reached the point where the risks associated with a bursting global Bubble overshadow policy discussions and objectives. Policymakers now endeavor to completely repress market self-adjusting and correcting mechanisms (i.e. “quasi-Capitalism”). Bear markets and recessions have become completely unacceptable, as this historic Bubble’s “Terminal Phase” runs its regrettable course.”

http://creditbubblebulletin.blogspot.ca/2015/03/my-weekly-commentary-progressively.html

———————————–

I suspected this one coming and asked Jesus on the 26th his input. Paying attention to his disciple smoking man is paying off!

I remember the last round of stimulus…2009 or so. Seems to me a good chunk went to infrastructure and programs related to “housing”. If that’s the case again, count on every tom dick and harry to take on more debt for a kick back related to their housing upgrades. Sure, for components on the fritz or beyond repair this works. But for others upgrading components that are fine thinking they are going to get their investment back, like windows, are buying into the marketing. But hey, this is real estate in Canada, can’t go wrong!!

#170 Herf on 03.30.15 at 12:32 am

#133 Ralph Cramdown

Good diggin’ Ralph! Seems kind of fitting that the first few letters of the credential shown next to her name are “Dip” (cf. “dip-stick”).

#171 Psalms Amendment on 03.30.15 at 12:33 am

Although I may invest in the valley of the shadow of death. I shall fear no market evil. This blog doth comfort me and leadeth me to green pastures…

#172 bdy sktrn on 03.30.15 at 12:46 am

rebalancing, cowboy style.
buy oil 45 and under
sell oil 51 and over
for now.

will trend lower (30’s) as storage creeps upward.

below 36 buy like crazy.

#173 air canada days since last crash - 0 on 03.30.15 at 1:17 am

GT is – unfortunately – not an academic. I submit he lacks the conceptual framework to adequately express himself in terms acceptable to the PoliSci community. At 65 it’s not too late to learn new words.
——————–
rest assured he knows the big words, you silly twat.

he can do, therefore he need not teach.

he does do, then he teaches for fun and free, and is far more influential than any 5 profs in the country combined.

#174 westjet days since last crash on 03.30.15 at 1:25 am

over 7000 days and ZERO crashes, ever.

#175 Cyclist on 03.30.15 at 1:37 am

153 waterloo – can you send the lat/long from google earth for that complex? I wanna do a streetview.

#176 Max on 03.30.15 at 2:16 am

Just spent a few minutes on the phone with a nice fellow in India who noticed my computer was doing illegal things on the Internet. How nice of him to call me about that. Regardless, the phone connection was somewhat poor and I tried to convey that to him, but he just wanted to reinforce the aspects of my computer’s illegal activities on the Internet. Oh well.

I suggested that he buy property in Vancouver. He said thank you and hung up. Wish I got his name so that I could pass it along to the starving realtors on this site. He did seem very sincere.

If you happen to also have a computer doing illegal things on the Internet and get a call from this nice fellow – please get his name and number. I’m sure that he wants to move his family to Canada, own a BMW, and set up a call centre in Surrey BC. Ah, such are dreams.

#177 explain on 03.30.15 at 2:48 am

Why do they call credit cards “credit cards” when they are really debit cards and “debit” cards are really credit cards. Can somebody anybody explain. Smoke man?

#178 Mountain Man on 03.30.15 at 3:47 am

Stop obsessing about retirement and spending the best years of your life, your youth, your health, piling up money for when you’re older.

Enjoy life when you’re young! Take vacations, travel, be frugal where possible, but don’t deny life’s pleasure for forty years just to have a pile of money sitting in the bank when you’re 65. Because you may not live until 65, or if you do, you might not want to travel anymore.

Besides, many people who reach retirement age decide not to retire because they get too bored sitting around drinking booze down at the Legion six days a week. They want to keep working, part time and generating income or managing a small business.

#179 earthboundmisfit on 03.30.15 at 6:16 am

Sure, you can divorce her Leroy, but she’s still going to be your sister.

#180 Nick Roerich on 03.30.15 at 7:04 am

Americans will never exceed a certain level of wealth generation because of this:

The USA: Military Arm Of The New World Order
http://stateofthenation2012.com/?p=6115

The cost of maintaining empire eventually becomes crushing as well as counterPRODUCTIVE.

#181 4% WR??? No? on 03.30.15 at 7:19 am

Garth you are missing his point. The 4% he is referring to is not the return on investment, but the ol’ 4% withdrawal rule…you should be able to withdraw and live on 4% indefinitely, or at least for a normal retirement……

I get it. Archaic thinking. — Garth

Dear Garth – Please, please, please write more about 4% withdrawal rate as archaic thinking. My future depends on it.
Thank you!

#182 Ray Vasquez on 03.30.15 at 7:49 am

Americans have more choices for cheaper, lower cost of living options that are at warmer climates than us, Canadians.

This is a big difference where in Canada, we don’t have these choices plus they have basic pensions from Social Security and other match contributions programs for 401K’s, 403B’s, workplace Roth IRA’s, etc.

I have a friend that sold a house in Atlanta for $300,000 net and bought a similar house in a smaller city in Atlanta for $140,000 net.

This $160,000 was put in corporate bonds and U.S. Treasury bonds yielding together 4.5%, $1,800 every quarter.

This boosted his total investments by 25% from $640,000 to $800,000.

#183 Ray Vasquez on 03.30.15 at 7:51 am

My above post I meant to say much larger Social Security pensions.

#184 maxx on 03.30.15 at 7:59 am

#6 LB on 03.29.15 at 1:09 pm

Excellent article in link two. Peppered throughout are repeated references to risk, at all levels of lending such as:

China Bubble Watch:

“March 27 –Bloomberg: “China’s biggest banks are accelerating cuts to their dividend payouts as bad debts pile up from struggling exporters in the Pearl River Delta, coal companies in the nation’s west and manufacturers in the Bohai Rim near Beijing. Three of the nation’s four largest banks… this week cut their payment ratios for 2014 by the most in three years. ICBC’s fell to 33% from 35% a year earlier… Rising charges for bad debts — ….”

March 27 –Bloomberg: “China’s second-largest loan-guarantee company has halted operations and replaced its chairman as managers probe past deals for evidence that it took on too much financial risk,….”

March 21 – Reuters (Kevin Yao): “China will take steps to rein in possible risks from short-term local government bonds,….”

March 24 – Bloomberg: “Bonds of 11 Chinese companies now yield more than 15% as investors brace for the nation’s second onshore default…….Political, economic and regulatory factors are converging to make defaults more likely…. ”

Risk, risk and more risk. All attributable to ZIRP and market manipulation.

Pity those with no savings, no investments and negative net worth.

Most of the world’s lives are on hold or worse…..

#185 fancy_pants on 03.30.15 at 8:35 am

another great post Garth

I think the reason savings is down so much is there are a lot of vanilla people who are very very risk adverse and prefer vanilla savings and when the rates are so low there is little/less motivation for saving. So for them, the mentality becomes why save when your dollar may be worth less next year.

In addition, there are sooo many who are feeding their overweight mortgages that there simply is no extra $ to tuck away after food is bought and bills are paid.

But as prophetic as you are, I lack faith when you say “even when rates normalize”. Call me doubting Thomas but I think low rates are the new norm – too many have gorged (including govt’s) and the masses rule.

#186 fancy_pants on 03.30.15 at 8:42 am

#177 explain on 03.30.15 at 2:48 am

I took a little accounting in university so…

credit card is like a liability account. when you credit a liability account you have increased that account; aka. borrowed more. You then are indirectly debiting an asset account with the goods purchased. and tada, the accounting works

#187 Ralph Cramdown on 03.30.15 at 8:56 am

#182 Ray Vasquez — “This $160,000 was put in corporate bonds and U.S. Treasury bonds yielding together 4.5%, $1,800 every quarter.”

I love this site. Comments like this sure get the gears grinding. What percentage Treasuries, I wonder? And what’s the rest of the portfolio?

Ask FRED about a barbell strategy:
http://research.stlouisfed.org/fred2/graph/?g=15SW

That’s 50% 10 year treasuries, and 50% junk bonds. There are a few times in the last two years when you could have bought that portfolio to yield 4.5% plus. But it isn’t what anyone would call a conservative bond portfolio. And that’s wholesale. Anyone buying several issues with only $160k total is probably going to pay some pretty fat commissions to his broker.

Maybe he went longer term on the treasuries, or they made up a much smaller slice of the portfolio. Still, it’s pretty hard to see how anyone could have recently constructed a portfolio to yield anywhere near that without a significant part of it being junkety-junk-junk. And junk is an area where you REALLY want to be well diversified, which implies a fund, which means more fees and a lower yield.

It’s hard not to think your friend would have been better off with some quality dividend paying stocks.

#188 Mike in Toronto on 03.30.15 at 8:57 am

#178 Mountain Man

Agreed… life’s too short to worry about this stuff. Once you’ve got your head screwed on properly, control your debts and live within your means. Just relax. Not everyone makes it to retirement.

As an aside, I have to budget to *spend* money, else I live too cheap.

#189 RHSSI on 03.30.15 at 9:19 am

ReLJohMc @ 113
When it comes to “archaic thinking – Garth” I think you are both heading in the same direction because of the same kind of thinking.

That you can draw on seemingly unknown entities, companies and clients, in order to extract an income from the effort of others is indeed archaic and almost feudalistic.

It says little for our general direction of exploitation, and the thinking of most investors and polititions. The greedy and the blind leading the blind and greedy.

For the want of a better entity “heaven help this mother earth”

That had the whiff of anarchy to it. Money should make money by being set to work within the economy. Nothing greed or blind about that. — Garth

#190 Julia on 03.30.15 at 9:56 am

#185 fancy pants

“I think the reason savings is down so much is there are a lot of vanilla people who are very very risk adverse and prefer vanilla savings and when the rates are so low there is little/less motivation for saving. So for them, the mentality becomes why save when your dollar may be worth less next year.”

I personally don’t think there is that much thought into it. I think it’s more that people are overspending, trying to keep up with the Jones’ and saving does not even cross their minds. Cars, toys, restaurants, entertainment etc…

Have you seen the prices to go to a concert or sporting event? Insanely expensive and good events (even the Leafs that suck) are usually sold out. Who can afford to do this regularly? Not me.

#191 Holy Crap Wheres The Tylenol on 03.30.15 at 9:59 am

So, Amanda, you can become one of them. Or you can change everything.
Come to Jesus.
____________________________________________
So if Amanda comes to Jesus does she get a direct connection to God? If so is Garth God? Perhaps Amanda should call the mother-ship and beam out!

Jesus answered, “I am the way and the truth and the life. No one comes to the Father except through me.
John 14:6

#192 Steve French on 03.30.15 at 10:00 am

Smoking Man:

So in the space of 2 months my Dad died and my friends’ Dad died.

I’m at the cusp of middle age, when parents start dropping like flies.

God and Jesus have a lot to answer for.

And I know you got a bone to pick them those 2 as well.

#193 Steve French on 03.30.15 at 10:01 am

“Life is infinitely great and profound as the immensity of the stars above us. One can only look at it through the narrow keyhole of one’s personal experience. But through it, one perceives more than one can see.

So above all one must keep the keyhole clean.”

-Kafka

#194 BottomsUp on 03.30.15 at 10:23 am

This just came out minutes ago
http://business.financialpost.com/2015/03/30/bank-of-canadas-stephen-poloz-warns-oils-effect-on-economy-will-be-atrocious/

Governor Stephen Poloz said in an interview with the newspaper that the central bank still had many options to help the economy if needed. These included pledges to keep interest rates low for a prolonged period of time — a practice known as “forward guidance” — as well as asset purchases.

“When the oil shock came, it was clear we would no longer be able to close the output gap by 2016, but by 2017,” the governor said in the interview. “Since we had some firepower, we took some insurance and cut rates.”

“The manufacturing sector is turning around nicely. We were losing a lot of the auto parts manufacturing to Mexico. That calculus has shifted,” he added.

Nothing on housing but seems BOC is going to stand pat on interest rates.

#195 FQ on 03.30.15 at 10:25 am

#178 Mountain Man on 03.30.15 at 3:47 am

“…be frugal where possible, but don’t deny life’s pleasure for forty years just to have a pile of money sitting in the bank when you’re 65. Because you may not live until 65…”

Wise words.

Spend your youth saving for old age vs. save nothing and suffer later… wow.

There’s a middle ground that way too many people overlook.

#196 Squirrel Meat on 03.30.15 at 11:04 am

Another rate cut…

http://www.theglobeandmail.com/report-on-business/economy/stephen-poloz-warns-of-atrocious-first-quarter-economic-growth/article23681442/

#197 Squirrel Meat on 03.30.15 at 11:08 am

#180 Nick Roerich on 03.30.15 at 7:04 am

Americans will never exceed a certain level of wealth generation because of this:

The USA: Military Arm Of The New World Order
http://stateofthenation2012.com/?p=6115

The cost of maintaining empire eventually becomes crushing as well as counterPRODUCTIVE.
——————————————

That was a gem…………..

#198 Joseph R. on 03.30.15 at 11:11 am

Ben Bernanke, former FED Chairman just posted his first blog. He is now Senior fellow at the Brooking Institution and shares his thoughts on current financial events on his “Ben Bernanke’s Blog”:

http://www.brookings.edu/blogs/ben-bernanke/posts/2015/03/30-why-interest-rates-so-low

#199 cramar on 03.30.15 at 11:22 am

107 Nora Lenderby on 03.29.15 at 8:06 pm
#58 Leroy Washington on 03.29.15 at 4:50 pm

You’re bit late posting today, Oh furry one. I’ll see your Leviticus 18:17 and raise you a Leviticus 19:27:

“Ye shall not round the corners of your heads, neither shalt thou mar the corners of thy beard.”

You see folks, square cut beards are in the Bible!

—————–

Leviticus is instruction to the priesthood. They are being instructed not to follow the customs and practices of Egypt and other surrounding nations, whose priesthoods were trimming their hair and beards in certain ways in worship to their gods.

Contrary to popular opinion, this blog’s author is not in the priesthood—even though some may consider him the high priest of financial independence.

#200 NoName on 03.30.15 at 11:36 am

http://www.cbc.ca/m/news/business/austerity-budgets-of-provinces-will-offset-75-of-ottawa-s-tax-cuts-bmo-1.3014714

Self canceling tax brakes, wonderful!

#201 Squirrel meat on 03.30.15 at 11:53 am

Why pay mortgages ..

http://www.nytimes.com/2015/03/30/business/foreclosure-to-home-free-as-5-year-clock-expires.html?hp&action=click&pgtype=Homepage&module=photo-spot-region&region=top-news&WT.nav=top-news&_r=0

#202 Oil Is Sticky on 03.30.15 at 12:09 pm

Grabbed some text from Squirrel Meat:

“The USA has been known for years not to take care of their poor, their homeless, their war veterans, their single moms, their mentally handicapped, their physically disabled, their medically uninsured, their unborn. Basically the most vulnerable and powerless in American society have always received short shrift. Except now that predicament is about to be extended to an entire demographic(s). From baby boomers who cannot be supported by a shrinking tax base to recent college grads who can’t even get a job, and who are living with their baby boomer parents. All because the USA is used as the military arm of the World Shadow Government.”

Yup – recovery USA full steam ahead

#203 Jib Halyard on 03.30.15 at 12:13 pm

I keep hearing hopeful noises about a “soft landing” scenario for Canadian real estate. Does human nature even permit such things?

#204 Bytor the Snow Dog on 03.30.15 at 12:22 pm

@Westjet #174- Now you’ve done it!

PS- As a long suggering municipal employee, I’m tired of the bashing. If you want to know what the problem is,people, you need to look in the mirror. All of the laws, legislation, bylaws, and programs require people to run them.

These people cost money. Public employees have the same right to make a living as you do. The cost of living is the same whether you work for a govt agency or not. Don’t give me any crap about lazy overpaid employees etc. You will find those in EVERY WORKPLACE.

You can have cheap taxes or govt programs. You can’t have both. Less programs, laws, legislation, bylaws and all of the delivery and enforcement costs thereof will mean less employees.

You decide what you want.

#205 Van Doom on 03.30.15 at 12:26 pm

Meanwhile the chinese money laundering continues in Doomcouver

http://www.huffingtonpost.ca/2015/03/29/east-vancouver-house-half-million-over-asking_n_6963164.html?utm_hp_ref=canada-british-columbia&ir=Canada+British+Columbia

The article says: “The new owners are a middle-aged local couple, Eviston told Metro.” You personify what is making Vancouver ugly. — Garth

#206 Mister Obvious on 03.30.15 at 12:35 pm

A few days ago I bought a good quality office chair via craigslist. It normally retails new for $550+tax. I paid $120 used. Built with durable materials, its solid, comfortable and infinity adjustable. Immediately I noticed it lacked that overall ‘patina of cheapness’ you often see on imports.

The big surprise came when I turned it over. There it was, big as life: “MADE IN CANADA”. Not Korea, China, Indonesia, India or Mexico.

None of the above… made in Canada!

Somehow, that just gave me a real warm glow. It doesn’t take that much, does it? My wife says I’m a very appreciative fellow. If she makes me a sandwich for lunch, I’ll be dancing in the streets.

Exactly. It’s the little things…

#207 Victor V on 03.30.15 at 12:36 pm

http://www.theglobeandmail.com/report-on-business/gm-oshawa-plant-closures-would-have-profound-impact-union-study-says/article23678531/

The closing of two General Motors Co. assembly plants in Oshawa, Ont., would wipe out about 30,000 jobs, slice more than $5-billion out of Ontario’s gross domestic product and cost the federal and Ontario governments $1-billion in lost revenue.

Those are among the conclusions of an economic impact study of the two plants, which was prepared by the Centre for Spatial Economics on behalf of Unifor, the union that represents hourly paid workers at the two factories.

#208 Babblemaster on 03.30.15 at 12:36 pm

#165 Bottoms_Up

“Public servants wasteful” – You “felt” I said that? I never did. I didn’t even intimate that. I can’t help what you feel or read into things. I made the point that the mandarins and politicians are the ones that are wasteful. They come up with initiatives to cut the public service for political posturing and end up costing taxpayers more money.

“Left the public service” – I stated that my position was terminated and that I took the retirement option. It was NOT a voluntary move on my part.

“Charging the taxpayer much more” – That’s the point exactly. As a lowly public servant, I had no say in the matter of my job termination. But the mandarins, at the behest of McGuinty, terminated positions that were doing required work. So, they then had to hire consultants to do the same work. “Nice” has nothing to do with it. I had nothing to do with that firing and hiring decision. I’m now a contractor and my agent found the contract for me. Why shouldn’t I take it? If I didn’t, someone else would. I was more qualified for it than anyone else as I worked in that environment for 26 years and knew it better than other consultants coming in off the street. Not having a learning curve, I was more efficient doing that work than most would be. Besides, it was only a one-year contract for me, but there are many other contractors doing work that could be done at a lower salary by “permanent” staff. Doesn’t this seem like a crazy insane situation? To reduce salary dollars and make political hay out of it while increasing contract costs even more?

“And speaking of that ‘up up up’ trend” – I know the stats that PS jobs are not that much higher, but as I’ve pointed out, there are many contract positions in the public service. More than in the past. They are NOT counted when calculating employee numbers. Another trend, that helps to keep public service numbers down, is work that was previously done in-house is now “outsourced.” Believe me, there are no savings with outsourcing.

“Parasite” – Well, all I can say is that I don’t stoop to personally attacking and calling people hurtful, derogatory names.

#209 Squirrel Meat on 03.30.15 at 12:46 pm

Good job Calgary… there is hope. Carry on.

http://calgaryherald.com/news/local-news/calgarians-honour-earth-hour-with-imperceptible-change-in-power-use

#210 Randy Randerson on 03.30.15 at 12:48 pm

Ralph Cramdown @133

Nice sleuthing! The newspaper has as much fault as the couple, portraying them as something they’re not.

#211 jess on 03.30.15 at 12:50 pm

“The government recently appointed a “financial literacy leader” to create a national strategy.”

literacy ?…
===============
Mr. Monbiot asks a good question, “is fleecing the public is an aberration – or the business model. ”

“Would there still be commercial banking sector in Britain if it weren’t for corruption? Think of the list of scandals: pension mis-selling, endowment mortgage fraud, the payment protection insurance scam, Libor/currency eschange rates ,bid rigging, insider trading and all the rest. Then ask yourself whether fleecing the public is an aberration – or the business model.”

http://www.monbiot.com/2015/03/18/hard-graft/

see- investor “rights” chapter in CETA http://eu-secretdeals.info/ceta/

“Portrait of an Arbitrator
http://europa.eu/rapid/press-release_SPEECH-15-4624_de.htm
Brussels, 18 March 2015

Cecilia Malmström – Commissioner for Trade

http://www.arbitration-icca.org/about/governing-board/ADVISORY-MEMBERS/Karl_Heinz_Bockstiegel.html

#212 Squirrel meat on 03.30.15 at 12:57 pm

Mcmansions are going be lead anchors after a while.. just live in a shipping container.

http://www.trueactivist.com/a-shipping-container-costs-about-2000-what-these-15-people-did-with-that-is-beyond-epic/

#213 bdy sktrn on 03.30.15 at 12:59 pm

parasite is accurate.

listening to translink beg and plead for more tax money, then hearing an translink employee tell all about his gold plated benefits including free braces for the kids.

who in the private sector has a plan that covers 100% of ortho?

leave it to the working stiffs with no plan to pay for the fat wasteful greedy govt pay packages.

#214 Van Doom on 03.30.15 at 1:05 pm

Meanwhile the chinese money laundering continues in Doomcouver

http://www.huffingtonpost.ca/2015/03/29/east-vancouver-house-half-million-over-asking_n_6963164.html?utm_hp_ref=canada-british-columbia&ir=Canada+British+Columbia

The article says: “The new owners are a middle-aged local couple, Eviston told Metro.” You personify what is making Vancouver ugly. — Garth

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

That’s why its called money laundering Garth. Your unwillingness to see the truth has no bounds as I have been reading.

#215 Van Doom on 03.30.15 at 1:08 pm

You can have cheap taxes or govt programs. You can’t have both. Less programs, laws, legislation, bylaws and all of the delivery and enforcement costs thereof will mean less employees.

You decide what you want.

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

You also cannot have 30% of the population making huge salaries and benefits with a shrinking tax base supporting it last forever.

Cheap taxes? What country are you living in?

#216 World Traveller on 03.30.15 at 1:11 pm

The question is, will I be able to Vulch on wrinkles?

#217 Calgary anecdote on 03.30.15 at 1:23 pm

I happen to drive by one of local botox/private health care clinics. Just a year ago the place was packed with brand new high end import vehicles: 7 series BMWs, Range Rovers (non sport), all sorts of Mercedes, Porsches, Bentleys… Actually, the reason I found out this is a private care facility is because I was seeing all these vehicles, but couldn’t figure out why they were all there. Looked it up on goolge maps and it all made sense. Anyway, fast forward to today, and the place is pretty much dead: not seeing near as much parked vehicles as I used to and the vehicles look a lot more – how should I say – working class.

#218 Squirrel Meat on 03.30.15 at 1:41 pm

Slaves to be replaced with bionic ants….

http://www.theglobeandmail.com/technology/technology-video/video-bionic-ants-could-be-tomorrows-factory-workers/article23687090/

#219 dosouth on 03.30.15 at 1:54 pm

Bet you can take another 1/4 pt lowering sooner than later – to the bank

Steve P. speaks and the world….

#220 Andres on 03.30.15 at 1:59 pm

@ 46 and 2

The amount of money, and in particular immigrant money, in Vancouver is grossly exaggerated. I remember walking down the seawall in San Diego and being blown away at how many giant, new luxury yachts were parked along the waterfront. I go jogging around false creek and the yachts in the inlet downtown look like the old beater-boats the rich hand down to their 16 year olds. Vancouver is a nice place but its not some kind of amazing place – there’s no good reason to holiday here if you are super wealthy, and any investing is based purely on the insane returns. Once prices start diving any outside investment money will stop as well since it’s no longer going to be perceived as a smart place to park your cash.

#221 Ponzius Pilatus on 03.30.15 at 2:00 pm

Loaves and Fishes.
We still need more miracles to be fully convinced.
Walking on water, turning water into wine and healing a few lepers would enhance your chances of becoming divine.

#222 jess on 03.30.15 at 2:03 pm

the well tailored /disguised money laundering network – Andorra

…” worked closely with high-ranking government officials in Venezuela, resident agents in Panama, and an Andorran lawyer to establish Panamanian shell companies,” the Treasury said. BPA processed about $2 billion in transactions by shell companies related to the scheme.

Treasury said another senior official at BPA accepted bribes in return for processing bulk cash transfers for a Chinese money launderer, Gao Ping, who was arrested in Spain in September 2012.

“Through his associate, Ping bribed Andorran bank officials to accept cash deposits into less scrutinized accounts and transfer the funds to suspected shell companies in China,” it said in a statement.

http://www.cnn.com/2015/03/16/europe/andorra-russia-china-dirty-cash/

#223 Mister Obvious on 03.30.15 at 2:06 pm

#202 Jib Halyard

“I keep hearing hopeful noises about a “soft landing” scenario for Canadian real estate”
————————

I keep hearing multiple definitions for the term ‘soft landing’ with respect to residential real estate. Most of these definitions emphasize the ‘soft’ aspect and not so much the ‘landing’.

People seem to think it means a plateauing of high RE prices. If so, that should not offer much comfort. It’s only slightly better news than an outright drop. Certainly nothing to celebrate.

Assuming a crushing debt load finds justification only in the misguided belief that prices can only rise and that greater fools will always be available to pay them.

Since that is clearly not true, a soft landing will deliver just as much heartache as the hard variety in the long term.

#224 Van Doom on 03.30.15 at 2:24 pm

@ 46 and 2

The amount of money, and in particular immigrant money, in Vancouver is grossly exaggerated.

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

Another uneducated person in “money laundering”.

#225 Daisy Mae on 03.30.15 at 2:35 pm

Perhaps, of interest….

RICHMOND is a coastal city incorporated in the Canadian province of British Columbia. Part of the Metro Vancouver area, as of 2013 it is the fourth-most populous city in the province.

Richmond has an immigrant population of 60%, the highest in Canada.

Richmond is the location of Vancouver International Airport and was the site of the speed skating events during the 2010 Winter Olympics.

Richmond is located on Lulu Island at the mouth of the Fraser River, and also encompasses adjacent Sea Island and some smaller uninhabited islets to the north and south.

Neighbouring communities are Vancouver and Burnaby to the north, New Westminster to the east, and Delta to the south. The Strait of Georgia forms its western border.

#226 Nora Lenderby on 03.30.15 at 2:36 pm

#215 World Traveller on 03.30.15 at 1:11 pm
The question is, will I be able to Vulch on wrinkles?

If you mean wrinkles – sorry, it’s been done. Billions are spent on wrinkle remedies. Pharmacies are full of them so the competition is well entrenched.

If you mean wrinklies (i.e. wrinkled older persons), perhaps. They are two a penny around here so there is plenty of supply, incresing every day apparently.

Now, who is going to pay you for them? Perhaps no-one wants to actually buy them from you but you could probably get paid to hold onto them. Perhaps you can build group homes and get their government cheques?

We could call it The First Wrinklie Savings Bank of Canada. Motto: “Give us cash or we’ll let granny out!”

#227 45north on 03.30.15 at 2:43 pm

Nagraj: This man delineating the greatest threat facing Canadian society deserves undivided and grateful attention.

Still, “slow sleepwalk into financial torpor and failure” is perhaps prophetic.

I’d say prophetic but if the political leaders think the same they sure aren’t saying so.

Max: Just spent a few minutes on the phone with a nice fellow in India who noticed my computer was doing illegal things on the Internet.

I got a call from a nice fellow from India. He wanted me to login to my computer to check a few things. No thanks.

bigtown: The wonks at the Bank of Canada are sadly mistaken if they believe the savings deficit is only at the margins and not in all nooks and crannies of wealth creation and destruction; too drunk with their own rhetoric to notice the crushing state and downward spiral inherent in Canadian mediocrity.

that hurts

#228 Retired Boomer - WI on 03.30.15 at 2:53 pm

#215 World Traveler

Will I be able to Vultch on wrinklies?

Probably not so much. Why? Wrinklies have kids. Sometimes one sometimes a hit full. Usually at least one ne’r do well. They often end up living in the old folks place, either on rent, or buy on a land contract.

With the Boomers ya never can tell how they are fixed for retirement. 15% probably have it licked. 35% will do ok if they watch their spending. 50% will end up cashing out the house one way or, another. Sell, fund the retirement, reverse mortgage until the equity they can suck out is gone, or live in poverty until the call of the reaper with deferred maintenance. You might vultch the last type.

#229 Daisy Mae on 03.30.15 at 3:02 pm

#191 Holy Crap: “Jesus answered, “I am the way and the truth and the life. No one comes to the Father except through me. John 14:6”

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

Look what you’ve done by the mere mention of ‘Jesus’, Garth — opened the floodgates. Doesn’t take much! LOL

#230 None on 03.30.15 at 3:21 pm

Phew. I’m done. No more comment reading. I’m going to stick to Garth’s posts and nothing more. The hate, ignorance, and overall bitterness from a few commenters is just too much to read day after day. You angry posters really need some help, seriously. I truly hope none of you have children that you are passing your bizarre ideas of hate, ignorance, bigotry, and divisive methods on to.

#231 Squirrel meat on 03.30.15 at 3:36 pm

Garth, where were all your board appointments!

What an incestuous bunch.

http://www.theglobeandmail.com/news/politics/baird-nominated-for-board-of-canadian-pacific-as-ethics-questions-raised/article23691652/

#232 New mania on 03.30.15 at 3:55 pm

LASTTTTT!

#233 jess on 03.30.15 at 3:56 pm

March 25, 2015
TPP Leak Reveals Extraordinary New Powers for Thousands of Foreign Firms to Challenge U.S. Policies and Demand Taxpayer Compensation

Unveiling of Parallel Legal System for Foreign Corporations Will Fuel TPP Controversy, Further Complicate Obama’s Push for Fast Track

TPP negotiations, the text – leaked by WikiLeaks –proves that growing concerns about the controversial “investor-state dispute settlement” (ISDS) system that the TPP would extend are well justified.The Trans-Pacific Partnership’s (TPP) Investment Chapter, leaked today, reveals how the pact would make it easier for U.S. firms to offshore American jobs to low-wage countries while newly empowering thousands of foreign firms to seek cash compensation from U.S. taxpayers by challenging U.S. government actions, laws and court rulings before unaccountable foreign tribunals. After five years of secretive

http://citizen.typepad.com/eyesontrade/2015/03/tpp-leak-reveals-extraordinary-new-powers-for-thousands-of-foreign-firms-to-challenge-us-policies-an.html

https://wikileaks.org/tpp-investment/

#234 Holy Crap Wheres The Tylenol on 03.30.15 at 4:13 pm

#197 Squirrel Meat on 03.30.15 at 11:08 am

#180 Nick Roerich on 03.30.15 at 7:04 am
Americans will never exceed a certain level of wealth generation because of this:
The USA: Military Arm Of The New World Order
http://stateofthenation2012.com/?p=6115
The cost of maintaining empire eventually becomes crushing as well as counterPRODUCTIVE.
——————————————
That was a gem…………..
____________________________________________

That first photo in the article made me cry. I never saw this photo until 1975 way after the stateside discharge. None of us over there saw these pics.
The war machine is money, more money than any other industry out there, well perhaps the illegal drug industry. War is hell but it is big business.

#235 Nagraj on 03.30.15 at 4:20 pm

Hey, NORA LENDERBY!

How’s yer sister Ophelia?

“neither a borrower nor a lender be/for loan oft loses/both itself and thee”

Have you the primrose path of dalliance trod?

Can you assume a virtue if you have it not?

Did you know Will was a skilled tax evader?

#236 RAINCOUVER on 03.30.15 at 4:25 pm

Hey Garth,

Most of us here in the 604 DO worry about HAM. Why? because, sure they are not all responsible for the uptick in prices, however, when they can INFLUENCE prices, which they do, then it starts to reflect on prices. For example, you just need one HAM to bid up the price of one house on a block, and that’s it. ONLY ONE!!

That says a lot for the locals. — Garth

#237 Mark on 03.30.15 at 4:27 pm

“Bet you can take another 1/4 pt lowering sooner than later – to the bank”

My thoughts too. April 15 is the next announcement. Economy doesn’t seem to be getting any better and housing continues to weaken.

#238 Mark on 03.30.15 at 4:29 pm

“The amount of money, and in particular immigrant money, in Vancouver is grossly exaggerated. “

Precisely. If so much ‘money’ was being brought to Vancouver, why is debt off the charts? Fact is, most immigrants only bring enough to Canada for a damage deposit on an apartment and a used Honda. The fancy cars you see on the streets are mostly leased or bought by locals (who are of all ethnicities) on their HELOCs.

#239 Smoking Man on 03.30.15 at 4:45 pm

Poloz on economy, said “atrocious”

That sounds like a 1/2 point cut to me.

Buy your USD now.

Ah living the bungalow dream in Long Branch. Worth a million this year or next spring. That is the question.

#240 Mark on 03.30.15 at 4:50 pm

” For example, you just need one HAM to bid up the price of one house on a block, and that’s it. ONLY ONE!!”

And you only need one distress sale to push prices down on a block. But fact is, locals are doing nearly all of the buying, mostly using subprime credit. And they’ve been pushing the prices up until the apex was reached a year or two ago.

The “HAM” theory just doesn’t stand up to scrutiny, and worse, the obvious certain racist/xenophobic element to such claims are terribly unfortunate.

#241 Leo Trollstoy on 03.30.15 at 5:03 pm

Poloz on economy, said “atrocious”

That sounds like a 1/2 point cut to me.

Buy your USD now.

Ah living the bungalow dream in Long Branch. Worth a million this year or next spring. That is the question.

The Canadian economy is going into the crapper and the CAD follows the Canadian economy.

Take the money now. Money now is better than money later. Especially if it’s trapped in a bung.

#242 Broke Dick on 03.30.15 at 5:08 pm

#238 Smoking Man on 03.30.15 at 4:45 pm
Poloz on economy, said “atrocious”

That sounds like a 1/2 point cut to me.

Buy your USD now.
++++++++++++++++++++++++++++++++

My thinking was he is just trying to talk the dollar down without having to make a cut. It worked today.
But time will tell, we’ll see.

#243 Drop to Drink on 03.30.15 at 5:54 pm

Yeah, markets through the roof again!
Bonds continue to rally and so do stawks!!

Ride it out, but have a plan to get liquid fast, ahead of everyone else. That will be the trick when this market turns. Don’t be too greedy/

All we will get from the Fed is jawboning. GDP of less than 2% in Q1 will make sure of this.

#244 Drop to Drink on 03.30.15 at 5:56 pm

I have no idea how anyone can parse the Fed comments and come up with a definitive time for a rate rise. Perhaps someone who does not speak English very well.

#245 Van Doom on 03.30.15 at 6:32 pm

#237 Mark on 03.30.15 at 4:29 pm
“The amount of money, and in particular immigrant money, in Vancouver is grossly exaggerated. “

Precisely. If so much ‘money’ was being brought to Vancouver, why is debt off the charts? Fact is, most immigrants only bring enough to Canada for a damage deposit on an apartment and a used Honda. The fancy cars you see on the streets are mostly leased or bought by locals (who are of all ethnicities) on their HELOCs.

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

Because Govt lies about most stats. Easy. Especially about HAM.

#246 Daisy Mae on 03.30.15 at 7:59 pm

#233: “That first photo in the article made me cry.”

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

That first photo is ingrained in all our minds….

#247 Victor V on 03.31.15 at 6:00 pm

http://business.financialpost.com/news/energy/credit-counselling-in-high-demand-in-alberta-as-oilpatch-downturn-hits-home/?__lsa=56c3-c664

Jeff Schwartz, executive director of Consolidated Credit Counselling Services of Canada, said he saw a 38% year-over-year increase in clientele from Alberta in February. Nationwide, there was also an increase — but in the order of 10 to 15%.

Schwartz said he’s not surprised by the numbers. A report by credit monitoring agency Equifax earlier this month said Calgarians had the highest non-mortgage debt loads in the country — an average of $28,263 in the last three months of 2014. Edmonton wasn’t far behind, with average debt at $26,305.

“Albertans are in the deepest debt,” said Schwartz. “They’re used to earning big. When a boom cycle comes through, they do very well and that’s a good thing. But as part of that, they also live big.”

There was a 58.7% increase in consumer proposals in Alberta between December 2013 and December 2014, according to Ottawa’s latest insolvency statistics.