Hard landing

BUG modified

Just a few days after it seemed another rate cut in Canada was a dumb idea, it’s back on the table. The reason is simple. Imagine a ‘hard landing’ at the Halifax airport – engines mashed, wings crumpled, gear torn off and nose squished. Canada is the Airbus. The runway’s reality.

The head banker termed our nation’s growth ‘atrocious’ this week. In fact the current quarter could end up being negative. One more and it’s called a recession. You certainly know why. Oil and commodity prices have plunged, household debt has swollen badly, imports are racing ahead in price and we’ve created a condo economy in which 61,572 people work in the oil and gas sector, and 108,000 people are realtors. Our dollarette is falling and 80% of our real estate markets are stagnant. Energy exports have tumbled recently and we haven’t created this few new jobs in 40 years.

This is why, two years ago, I strongly suggested you have more of your portfolio weighted to US and international assets than to Canadian ones. Right now it should be two-to-one, because Canuckistan is faltering, and another rate cut two weeks from Wednesday will sure be an admission.

Here’s the fascinating part. Most people think they’re doing great – party time in the A320 as it screams towards the power lines at YHZ.

Those irony-loving accountants at CPA Canada just released the results of a poll done a few weeks ago as the economy unravelled asking people (a) if they felt satisfied about things and (b) how they rated themselves in terms of financial discipline.

“It may be a matter of perception,” said head accounting dude Kevin Dancey. “Factors such as lower interest rates, cheaper gas and a strengthening U.S. economy may have some people thinking things are just fine. However, no matter what happens with the economy over the coming months, the lingering issue of high debt levels cannot be ignored.”

No kidding. Most people said their financial lives are great and gave themselves high marks for discipline. And this is what the survey found:

  • More than half (53%) of working households in Canada are saving nothing. Zip. The same people assessed their level of discipline when it comes to money as ‘somewhat or very strong.’
  • Over half (51%) have no money put aside if something goes wrong. But it won’t, of course. This is Canada. We’re special. Mom said so.
  • With the economy now deflating and Alberta imploding, only 16% of Canadians said they expected to be negatively affected.

Meanwhile, says Capital Economics, Canada is ‘falling off a cliff.’ “The reported declines in retail, wholesale, manufacturing and export volumes… were very disconcerting. It’s typically never a good sign when all these key indicators fall together.” The company says it is “almost unbelievable” how quickly oil and gas drilling “cratered” and that all this is reminiscent of 2009.

Here’s a snapshot of economic activity, by the way. Put your helmet on.

GDP modified

And here’s how Stevie Poloz, head poodle at the central bank just framed it:

“The first quarter of 2015 will look atrocious, because the oil shock is a big deal for us. In theory lower oil prices mean [putting] more money in consumers’ pockets, but … if an oil company cancels a project, laying off a worker, that guy will not have the money to buy a new pickup truck. That spreads pretty quickly.”

You bet. Try selling a house in Calgary, Fort Mac or Edmonton. And these are the early days of the commodity crunch – with the ripples just now spreading outward from the oil patch. No country can see its key export ripped or its currency whacked without some consequences. And yet in Canada, where 53% of families are saving nothing and carry epic levels of debt, people are cool. What’s to worry? That’s the pilot’s job. Here, have some peanuts.

The other day I said we are sleepwalking into financial torpor and failure. Some people get it, and know what to do to preserve their wealth. Others will simply blow up. Sometimes we find them both in the same family!

This guy just wrote me. He needs serious help. What’s your advice?

Hello Garth

“My Name is John and both my wife and I are in early fifties. We have a complex and emotional situation going on with our decision making. My wife wants to buy and max out on the show home mentality and I desperately want to live without a mortgage. We are both professionals and our combined income now is about 140k.

“We sold our house in Toronto 1.5 years ago and have $1,000,000 in the savings account earning 2% and we are renting (2800$/month). This was a choice as we wanted to move further north and either build new or buy ready on a larger land property. Kids are finishing high school (1 is off to university in the fall and the other has 2 years left). The kids RESPs are about $130k and earning about 5%. Our combined RRSP and TSFA are about 400K.

“The tension between us is huge. My wife is trying to convince me that rent is a waste and she is searching for the perfect home and that means about $400 to $500K mortgage, plus the $1 million down. Personally I would love to have the house to show off but I am in complete alignment with your concepts. I sense a complete economic collapse into a recession unfolding in Canada and the only way I see it for me is to sit back and watch. My wife wants to pull the trigger and buy.

“My question to you is regarding some information to convince my wife otherwise. I reference your blog on the regular basis but the tidal wave of emotions are blinding. Help.”

275 comments ↓

#1 zedgt87 on 03.30.15 at 6:11 pm

First. Glad I don’t have a wife with housing lust

#2 earthboundmisfit on 03.30.15 at 6:14 pm

A Republican, a Canadian and an Economic Failure walk into a bar. “What will you have, Mr. Harper?” says the bartender.

#3 Squirrel meat on 03.30.15 at 6:16 pm

Is this like in Playboy where you make the letters up!?

I wish. — Garth

#4 Firstivicus on 03.30.15 at 6:17 pm

The retail market sure is changing. Two very large chains Target and Future Shop, getting out on a very short notice basis. Hope I am fwirst!

#5 ILoveCharts on 03.30.15 at 6:17 pm

The solution for our friend is simple. Buy a few plane tickets. Florida. Hawaii. Venice. Rome. After seeing these places, the wife will no longer be so enthusiastic about setting down permanent roots in the frozen tundra.

#6 Yogi Bear on 03.30.15 at 6:17 pm

John.

You are screwed. If you divorce, you lose half. If you stay married, you lose half. Accept your situation and come to terms with it.

Yours,

Yogi Bear

#7 Ralph Cramdown on 03.30.15 at 6:18 pm

Hormone replacement therapy. For either one of them. Or both.

#8 reminder man on 03.30.15 at 6:20 pm

Looks like a good time for another long vacation zzzzzzzzzzzzzz

#9 Yogi Bear on 03.30.15 at 6:20 pm

I don’t think we will see a rate cut. At this point the CAD is already low enough and it will not have the kind of stimulative effect that it might in a higher rate environment.

My prediction is for now rate cut and Canadian QE, coming to a Bank of Canada near you (soon)!

#10 Jason on 03.30.15 at 6:22 pm

Wow, lot’s of cash, but no cash flow:

1. Invest the money using a balanced approach
2. Rent, don’t buy
3. If wife disagrees with 1/2, dump her, she is worse than cancer.

#11 Ray Skunk on 03.30.15 at 6:22 pm

$1,000,000 earning 2%.

Two. Per. Cent. Taxable.

I have things to say, none of them pleasant, but it sounds like John has got enough on his plate thanks to the wife. I’ll refrain on this occasion.

#12 raisemyrent on 03.30.15 at 6:22 pm

All these people writing in who can’t agree with their spouses. Some relationships they must have.
My advice is learn some constructive communication techniques and clear the air with your spouse. It’s a financial decision, so the numbers should speak for themselves. If they don’t, you have emotions which spell a relationship (not financial) problem. For free financial advice, keep reading this blog.

#13 shanks on 03.30.15 at 6:23 pm

He should get a divorce

#14 Obvious Truth on 03.30.15 at 6:28 pm

A feline named hard landing.

A one trick poodle named Steve.

And a beat up old horse named John.

This is the best we can do for animal husbandry night.

More like circus night in Canada.

#15 Peter on 03.30.15 at 6:31 pm

“Personally I would love to have the house to show off but I am in complete alignment with your concepts.”

Ah, vanity…One of the Devil’s favorites.

A million just in CPD, would generate over 3800 a month in dividend income. Could upgrade to a nicer rental for that money (without knowing what *else* is in the TFSA and have the salary left over for investing/travel. 15 years away from retirement without a massive mortgage debt sounds like a dream. Why ruin it ? More importantly, maybe retire early if you manage to avoid the housing trap.

#16 Squirrel meat on 03.30.15 at 6:32 pm

#2 earthboundmisfit on 03.30.15 at 6:14 pm

A Republican, a Canadian and an Economic Failure walk into a bar. “What will you have, Mr. Harper?” says the bartender.
——————————————–
I’ll have a double.. I always double down on the stooopid stuff.

Sadly he’s a teetotaler- likely the problem.

#17 Retired Boomer - WI on 03.30.15 at 6:33 pm

John- This question seems a no-brainer. Invest that $1,000,000 into a quality diversified portfolio. The income should just be re-invested, dude.

Pay your rent from current earnings, but bank the “phantom payment” on that rental (assume you own it) into your savings to beef up your TFSA first, then your RRSP’s. Be sure to assume you “bought it” market value 25% down include all ancillary costs insurance, taxes etc.

Then you can feel miserable, and grow financially fit at the same time.

In a decade, perhaps less, when your savings and earnings equal 2Mil take a Mil and buy your love the dream home she covets. Right now is not the “right time”

At least that’s what I would do if it were me. I would rather BE rich than just appear rich.

#18 Eurocop on 03.30.15 at 6:35 pm

Take the 1 million, and invest it in something similar to what Garth has been preaching. 60% equities (US and global, with 15% Canadian), and 40% safe in case there is a drop, to protect your investment.

If you make just the minimum 6% on it in an average year, you can rent a bigger house or start saving towards a new home or jewellery for your wife.

Dahh.

#19 JG on 03.30.15 at 6:37 pm

What a great metaphorical blog today, Garth.

I am glad I am a Westjetter!

#20 Retired Boomer - WI on 03.30.15 at 6:37 pm

Another Canadian RATE CUT? Shirley, you jest! If Poloz is ever to allow that one, well just admit you are going to be renamed shortly.

And I thought the US was the only place run by a band of idiots!!

#21 Blogbitch on 03.30.15 at 6:39 pm

This fellow’s letter demonstrates that:
1) Financial decisions are rarely as logic-driven as Garth keeps telling us they should be.
2) Relationships (and marriages in particular) are rarely logical.

So, when you put those together, you get a situation where couples learn to negotiate their decisions about money as an ongoing practice of daily living (i.e. It just never ends). John is unlikely to divorce his wife. He is also unlikely to convince her that her house-lust is ill-placed.

If John is like many married people, he may have less influence over his wife than he would like to. The more he tries to convince her, the more she’ll dig her heels into those imaginary marble floor tiles.

IMHO there’s no way around this. You can only go through it. That takes delicate negotiation, lots of listenting and quite possibly, engaging the help of others to help gently influence her perspective. There’s got to be *somebody* in the social circle willing to talk openly about money and investments. Invite them over for supper. Start hanging out with them more. Open up a dialogue about money. Get her enrolled in a personal finance planning class. Anything to get her talking to other people (other than John) who can provide another perspective.

Women in our country need more financial literacy and empowerment, not less. Give her the tools to learn to make wise decisions on her own.

But spousal financial education is almost as bad as spousal driver education. Rarely ends well. Engage others to help her learn.

#22 Mean Gene on 03.30.15 at 6:40 pm

John, if you rent a house and DON’T TELL anyone, then you can show off a better house than you could afford to buy.

You have a boatload of money, make an appointment with Garth Turner the financial guy and see what he can do for you.

#23 Mark on 03.30.15 at 6:42 pm

First (and only) time I’ve seen Garth in person, it was in the Maple Leaf Lounge. Toronto I think, maybe a decade ago, when Terminal 2 was still around.

Back then, the MLL’s were relatively quaint. Only higher-class people were allowed in them. The liquor flowed freely, and everything was nice and quiet.

Today, the riff-raff in the lounges is barely even a notch above that of the rest of the airports, entry sold for the cost of a mere few airport drinks. The planes are filled not with paying business customers, but rather, with people spending their HELOC money travelling for personal enjoyment. Airfares are now in free-fall because these customers are running into significant financial distress, their homes now depreciating and their jobs threatened. And Poloz is staring down the deflationary abyss and recently mused that he sees things a lot more dreadful than initially believed.

I guess the question I ask in all of this is what will it take to restore a vibrant business environment in Canada? Yes, low policy rates for an extended period of time are obviously necessary, as will be government austerity. But are there also other sources of friction in the economy that impede a business expansion? If so, why aren’t voters demanding the removal of such, so that their kids can get jobs? In short, its great to sit here and debate how bad the mess is right now, but how do we get out of the mess??

#24 Babblemaster on 03.30.15 at 6:44 pm

#212 bdy sktrn on 03.30.15 at 12:59 pm

Parasite

BC’s Translink and the compensation packages of their employees is a completely different issue, but don’t let that stop you from your mindless rant.

#25 Babblemaster on 03.30.15 at 6:46 pm

“Just a few days after it seemed another rate cut in Canada was a dumb idea, it’s back on the table.” – Garth

——————————————————-

Of course it’s back on the table! Low rates for a very long time is what is obvious to anyone who wants to wake up and smell the coffee.

#26 Mister Obvious on 03.30.15 at 6:47 pm

Was it only six years ago America was ‘falling off a cliff’ pulling the rest of the world along with her while Canada was proclaimed the single remaining bastion of prudent economic management? Just six years?

#27 Hard landing | Realties.ca on 03.30.15 at 6:47 pm

[…] Source: http://www.greaterfool.ca/2015/03/30/hard-landing-2/ […]

#28 Interstellar Old Yeller on 03.30.15 at 6:48 pm

Garth, do you no longer do phone calls? :) I remember you posting about calling people who wrote to you about this dilemma. Chilly initial reception, but if ever there was someone to scare an emotional spouse into a more sensible financial mindset, I can’t imagine anyone more persuasive than you (and John would certainly feel very special!)

#29 rosie "moving forward" in the knowledge that, "this won't end well" on 03.30.15 at 6:50 pm

As for advice to John. Read the blog, hire a fee based advisor, sign nothing and wait. You sought advice because you see the future and this doesn’t end well. Heed that advice for the sake of you and your family.

#30 ShawnG in TO on 03.30.15 at 6:50 pm

“Our dollarette” haha, nice touch.

#31 EarlySpring on 03.30.15 at 6:52 pm

Wwhhhhooooowwweeee!!!!!!! Buddy John here just had his wife tossed to to the blog dawg wolves tonight! Watch this poor lady get shredded in the comment section tonight………. But she kinda needs it and hopefully ole’ Johnny here can let her down easy.

#32 John of C on 03.30.15 at 6:54 pm

It’s simple cut your losses and i’m sorry you’re going to miss her

#33 Babblemaster on 03.30.15 at 6:54 pm

Hey buddy, make a deal with her to hold off buying for just two more years. Tell her you will not bother her for sex during that time. She may agree.

Unfortunately, it is so true that most men lead lives of quiet desperation.

#34 TS on 03.30.15 at 6:58 pm

I talk to people at work and their idea of financial discipline is making payments on their HELOC instead of just interest payments.

#35 cmj on 03.30.15 at 6:58 pm

Dear John’s wife,
We are in for a huge housing correction because many people are in deep debt. If you buy an expensive home, you will join the herd. What will it cost you*
*your relationship
*sleepless nights wondering what will happen when the rates go up and you are further stretched financially
*guarantee for both you and your husband to work longer for a “house”
*loss of cash flow and therefore travelling or whatever you want to do in your free time will be curtailed
*your house will require maintenance as it gets older. More of a money pit
The cost of peace of mind is priceless. You are in this state right now and not sure what the motivation is to go into debt and have a life of stress.
I suggest both of you go to a financial planner to lay out what quaiity of life would look like in your existing financial condition and what it would be like if you purchased this “over the top” home. At least a financial planner would project where you would be in 10-15 years with the different scenarios as you approach retirement. Garth would put you in good hands.

#36 Andres on 03.30.15 at 7:01 pm

The sarcastic answer is to divorce her, take the $700k you’ll get from the divorce, invest it, and rent a one bedroom for $1,400 in a nice suburb near transit. Take lots of vacations, enjoy the rest of your pre-retirement life, and retire with over a million. Become an expat in a warm, pleasant country where you couldn’t spend all your nest egg if you tried.

If that’s not a practical solution, explain to her that she wants to dismantle the economic security and good decisions the two of you have spent your entire lives working for in order to show off a nice house. Tell her to take some advice from Eckhart Tolle, who pointed out that it is impossible to give up the attachment to objects, but when you stop seeing yourself in the object this detachment will occur naturally. When she ceases to see the house as defining her success as a person she will let go of it.

#37 Forzudo on 03.30.15 at 7:01 pm

A soon-to-be empty nest means that you should downsize the square footage of the principal residence (and travel with the new cash flow).

Otherwise, you’ll tempt your offspring to return after they have finished undergrad.

#38 Cici on 03.30.15 at 7:02 pm

Hey John, I know exactly how you feel. My significant other, who is usually smarter than me, is also extremely house horny right now…in fact, he’s the horniest guy I know, but he’s hornier for RE than he is even for sex.

We’ve been renting for the last three years, but he’s been whining and complaining about wanting to buy for the entire duration. And why? Because all of his friends are buying, and they get so much positive reinforcement for it…like suddenly they are considered to be so successful, just because they’ve dumped everything they own into mortgaged particle board and faux everything.

Anyways, he’s getting more and more cranky and emotional about it, and it’s causing a lot of distress in our relationship.

Here’s my plan: If he insists on buying next year, I’ll insist that he takes the mortgage out in his name, and I’ll pay him rent for the priviledge of living with him. If RE tumbles sometime thereafter, he can deal with his decision and I’ll deal with mine ;-)

#39 JustMe on 03.30.15 at 7:02 pm

A neighbour here in Calgary is on Shaw’s layoff list for shutting down the call centre. He has a job until end of the year. The full effect of layoffs has not yet been realized. Ditto with oil. More to come.

#40 Arthur on 03.30.15 at 7:04 pm

1 million in the bank in a SAVINGS ACCOUNT?! Financial literacy IS the problem.

#41 A Yank in BC on 03.30.15 at 7:04 pm

Garth,
Admittedly a stretch.. but if both Joe Owe and Poloz resigned tomorrow, and you were appointed to fill both roles, what would be your first and second actions to deal with this mess? What very bad-tasting medicine is required?

#42 Whynot on 03.30.15 at 7:04 pm

No way harpster gonna let RE crash on his clock, don’t be surprised if rates drop to zero.

#43 Frustrated Kiwi on 03.30.15 at 7:06 pm

My thoughts/advice. Why, when about to be empty nesters, do you need a $1.5 million dollar home? Is she searching for the “perfect home” for right now or the perfect home for the next 30 years? Hopefully the latter but I suspect the former. With no mortgage and no kids you will be free to travel, with a $500k mortgage (which takes how long to pay off?) you won’t. What about early retirement – is that attractive? With $1.5mil in investments (as now) and serious saving (by renting) over the next few years, you should be able to retire soon. Her argument that rent is dead money is completely spurious and there are lots of links around to combat that one. Perhaps you can negotiate at least a delay – surely with all the economic news put up by Garth there is at least a 20% chance of house prices falling over the next year. Wait until kid number 2 is out of the house then pick a place that will be suitable for the long term. Buying a house to show off to your friends makes no sense – why don’t you really show off in a few years by being able to take regular vacations all around the world. How many can afford those?

#44 GeorgeSoonToBeRetired on 03.30.15 at 7:07 pm

We had an interesting dinner on the weekend with some folks from high school days, they live and work in Ontario cottage country. Three family members run boutique real estate firms specializing in cottage properties.

They told us they have seen the writing on the wall and are quietly shuttering their businesses this year and early next, the dad taking an early retirement and the son and daughter coming to the city where their spouses both can work in health care.

They told us the traditional level of interest in cottage real estate is dropping badly and the idea of simply renting cottages short term, not buying, seems to have really taken hold. More and more people are apparently now comfortable with renting on Air BnB and the like rather than investing in such expensive properties. People are realizing how little they use their cottages and finally the word has spread that at the current crazy prices it makes no sense to own. These folks don’t want the headaches and lower returns of being cottage property managers, which has been the most common inquiry they have received over the winter from cottage owners. Properties are too spread out, with too much travel and logistical work for relatively low returns compared to selling commissions, which have also been dropping for two years.

Cottage markets have been sluggish for a while, but it will be interesting if they pull a Calgary and start tipping over as these folks believe. I wouldn’t be buying one now, that’s for sure.

#45 Ben on 03.30.15 at 7:07 pm

Sadly the imprudent aren’t just causing problems for themselves. They bid up assets forcing others to pay a premium that wouldn’t be there without:

1. greedy idiots
2. banks lending to greedy idiots

#46 Freedom First on 03.30.15 at 7:07 pm

Dear John,

Sorry, I can’t help you as it is too late for you. I always put my Freedom First.

Good luck, respectfully, and with gratitude.

#47 Lilyflor on 03.30.15 at 7:07 pm

As a wife and woman, I recommend you do what your gut tells you, you’re wife will thank you later!

#48 Nagraj on 03.30.15 at 7:08 pm

Most people, myself included, think juridically, not mathematically.
So if the survey question is, How do you rate yourself in terms of financial discipline? the answer will be: In so far as I’m an honest person doing the best I can I’m just fine.
Put another way – debt is not considered immoral, even if the level of debt is unsustainably high. There is no shame attached to owing any amount of money. The worry about being able to pay it back is not a moral issue; that’s a material concern.

When the money is borrowed for moral purposes, like adequately feeding, clothing and comfortably housing the kids, the loan is viewed a moral imperative. No shame, no guilt. Failure to seek a needed loan becomes an instance of a lack of financial discipline. A lender denying the loan application will be judged as immorally self-interested.

(Margaret Atwood has a tome out entitled “Debt” but I don’t like her writing so I haven’t read it. Maybe I should.)

#49 Ronh on 03.30.15 at 7:09 pm

RBC is giving employee priced mortgages. Need I say more.

#50 Sheane Wallace on 03.30.15 at 7:10 pm

our dollarette is a piece of trash that will be bellow 0.7 pretty soon.

With zero interest rates that means 30 % hear cut for the bond holders for just few months.

So who are you saying will buy our bonds and at what rate?

#51 Sheane Wallace on 03.30.15 at 7:11 pm

hair cut

#52 Mark on 03.30.15 at 7:12 pm

“Otherwise, you’ll tempt your offspring to return after they have finished undergrad.”

And what would be wrong with that? That unfortunate German pilot in the recent France crash lived with his folks. Unemployment for graduates is high enough that most of them either have to go into crushing debt or live with their folks. Extended families living under one roof are the norm of many cultures, including some of those cultures that are allegedly responsible for RE prices being high in Vancouver (hint: they can drive BMW’s and Mercedes not because they are bringing money from overseas, but rather, because they are thrifty here at home!). Not sure why there’s such a stigma against mainstream Canadians, most often without good paying jobs, returning to live “at home” once they graduate.

In fact, given how horrifically overpriced houses are in Canada, simply letting the kids live “at home” a few years rather than forcing them out into probable debt servitude and negative equity, may very well cumulatively be worth literally hundreds of thousands of dollars saved in debt service costs. r

#53 Financial Poodle on 03.30.15 at 7:12 pm

Amazing. I am speechless. How blind can she possibly be to the situation? I can understand her wanting the “bigger, better” whatever, but at what cost?!?
Have you explained that the two of you need to retire at some point? I absolutely DREAM of being in the financial state you are.

Slip the million into a balanced and diversified portfolia, a la Garth, and keep working. In a few years, retire. NO MORE WORKING. You get to enjoy the fruits of your life-long labour! Keyword there being “ENJOY”.
Live, man. And tell your wife to give her head a shake.
-Mike.

#54 omg the original on 03.30.15 at 7:13 pm

I sense a complete economic collapse into a recession unfolding in Canada
———————-

If Canada goes into recession it WILL NOT be a “COMPLETE ECONOMIC COLLAPSE”.

And it is questionable whether Canada will go into recession given our major trading partner, the US, continues to show economic strength, and we will be dragged along with that.

THE ONLY CATALYST THAT WILL CRATER THIS HOUSING MARKET IN A MAJOR WAY WILL BE A MEANINGFUL INCREASE IN INTEREST RATES.

#55 dosouth on 03.30.15 at 7:14 pm

To the guy in the corner…..just offer to give her half to do what she wants with once she signs on the dotted line and you can rent a nice place, probably nicer than what you (or she) wants to buy now…..DIVORCE, it’s the only answer in a terminal case like this.

#56 Sheane Wallace on 03.30.15 at 7:14 pm

1.5 mil for a house in the frozen tundra? OMG.
for 200 k buy nice house in Spain, rest – 1.3 mil will bring 70 k annually that you can’t literally spend in Spain. Did I mention their weather?

#57 myadvice on 03.30.15 at 7:17 pm

My advice to the anecdote with the 1 mil in the bank: Cut costs, save more, wait a few years.

140k…. amazing. 90k more than i raise a family of 3 on. The interest at 2% on that 1 mil is 20k a year. Enough to more than cover my rent.

#58 Sheane Wallace on 03.30.15 at 7:17 pm

the time to get rid of the Ca house and invest you money abroad is now. The best time was actually a year ago with loonie close to parity.

The window of opportunity is rapidly closing and in a year or two your real house value (as measured by international dividend bearing stocks for example) will be much less and will keep declining.

#59 Randy Randerson on 03.30.15 at 7:20 pm

Garth, reading those letters must be painful. The answer is obvious, “Don’t buy, rent. And use the cool mil to invest for cash flow.” Yet you know your advice will fall on deaf ears, because no amount of logic will defeat a wife’s nesting/show house/house horny instinct. To tell John to act like a man is impossible when his wife holds his balls in her purse. Must be frustrating in your line of work.

I’d probably tell John to divorce her, take his rightful half and run.

I sometimes wonder, what do you do after work to de-stress? A couple of glasses of single malt scotch, bourbon, or rubdown by the harem of Amazonesses?

#60 Batt519 on 03.30.15 at 7:22 pm

Leave her. Take your half and buy a place in Paris ON and invest the proceeds as the host here says.
Or you can stack $ilver bar in that same small town.
Good luck to you. Your other half is going to have her pocket picked by Mr Market.

#61 bobknusa on 03.30.15 at 7:24 pm

re: Personally I would love to have the house to show off

this is what Canadians have become

a bunch of show offs

when this market turns no sympathy for you whatsover

#62 bobknusa on 03.30.15 at 7:24 pm

re: showing off

talk about shallow

#63 Get back Loretta on 03.30.15 at 7:25 pm

I’d buy her a mani/pedi, and when she came home from that glorious experience pour her a nice glass of chardonnay, which you’ve just bought a case of. While she’s sipping Ontario’s finest, ask her what her dream home looks like.

After she’s described it in detail, with your input as well, start searching for that place to rent.

Once you’ve found some great options, and have taken her out for a nice dinner, return home to the next bottle of chardonnay and lay out the plan. Rental home, investment, retirement.

Rinse, chardonnay, repeat.

#64 Apathetic on 03.30.15 at 7:27 pm

Hi, my name is Bob and I’m a recovering Kool-aid-aholic. Today I looked at a mortgage payment calculator and my knees went weak, my heart rate increased and I felt short of breath. I had to sit down. Except I was already sitting down. The urge is overwhelming to buy a house. Trying to stay strong. Even the 10 year fixed rate looks delectable. I think I’m going to pass out. Lord give me strength. I’m afraid I’m going to drink the Kool-aid. It would be so easy. Those tiny monthly payments. Ooooh, it’s so tempting, it’s right there and the MLS red dots beckon me – they mock me. I could spend my weekends at home depot and bond with neighbours over hot tub estimates. I am having a very weak moment today. Had to reach out. Gotta stick together.

#65 Jeff B on 03.30.15 at 7:30 pm

My advice? Hold off until you’re both retired and can move far away from the rat race. The only safe real estate is in high-occupancy-rate areas where rich students must live to attend university. That $1M could easily be $2-3M in 15 years, giving you much more choice than you have now. Also, you may not be the same people then, might see your retirement in a different light, and could be going quietly insane in whatever prison you lock into now. For now, help your kids out, enjoy the time you have together, and wait.

#66 Keith in Calgary on 03.30.15 at 7:30 pm

Here’s what you tell her………..

If we buy a $1.5MM house today in all likelihood it will be worth $1MM in about 3-5 years……..so, I will divorce you if this happens, and we’ll walk away with about $250K each……..

On the other hand, if you insist in buying today and the best financial minds cannot convince you otherwise, I am going to divorce you today (after you withdraw your $500K that is, leaving her $500K as well) because I will be better off by twice as much dollar wise, and you will still be stupid, and sooner than later, broke, because you will still run out and buy a house and probably lose it all.

Seriously…….read her the riot act.

#67 HD on 03.30.15 at 7:30 pm

@ #35 Andres on 03.30.15 at 7:01 pm

Eckhart Tolle, jogging on False Creek seawall…

Attention mesdames et messieurs, we have a true Vancouverite in the house! ;)

Best,

HD

#68 Mountain Man on 03.30.15 at 7:33 pm

Do what your wife wants and don’t argue with her. Divorce is too expensive. Repeat after me:

“Yes, dear. You’re right honey. OK, sweetie.

You’re richer than you think. You so house-horny. Me love you long time.”

#69 E3 on 03.30.15 at 7:33 pm

A million at 2% !!??

He’s poised to make 20K in growth on an entire year.

I’ve got 240K in a couch potato balanced portfolio.
I’m up 18K in the first THREE MONTHS of this year alone.

(and March was a dud, prior to today’s grand finale to the month).

Get that money working for you!!

#70 Greedy pig on 03.30.15 at 7:36 pm

Sounds like the wife is a greedy pig! It never ceases to amaze me that simpletons like this have access to that much cash, and have no clue how to handle their own affairs. that he has to go whinning to Garth speaks volumes about how pathetic his life is even with a huge wad of collateral. Sad really sad!!! how does this guy dress himself in the morning?

#71 johnnny on 03.30.15 at 7:36 pm

#22 Mark – a couple of years ago,I was in Wabush NFLD
for a flight.They called for elite,super elite,ultra elite, etc… to board first.I was the only one left to board after that.(yeah,I know ,small plane).
Soon,I also will be elite.With all the credit cards for flight points,who will be left to board,even on large planes?

#72 Questions on 03.30.15 at 7:37 pm

#4 ILoveCharts on 03.30.15 at 6:17 pm

Spot on! Nothing like a trip far away from Canada to realize how “not special” we are.

I wish I knew how to buy properties abroad without fretting about it.

In the meantime, airbnb!

#73 AfterTheHouseSold on 03.30.15 at 7:38 pm

John,

Might I recommend the white powder and failing that, the poison mushrooms.

#74 Leroy Washington on 03.30.15 at 7:40 pm

Canadians are generally very strange people when it comes to personal finances, in my opinion. All Canadians who are buying homes in the current environment are truly disturbed individuals who have limited understanding of basic arithmetic.
While I shouldn’t have to quote this chapter and verse, Samuel 17:46 says it best – This day will the LORD deliver thee into mine hand; and I will smite thee, and take thine head from thee; and I will give the carcasses of the host of the Philistines this day unto the fowls of the air, and to the wild beasts of the earth; that all the earth may know that there is a God in Israel. This is what Canadian real estate is like.

America!!!! Hallelujah!!!!

#75 omg the original on 03.30.15 at 7:41 pm

HOUSING LUST – THE LURKING MENACE

How easy it is to be SEDUCED by a house.

I was out for a walk yesterday and passed by an OPEN HOUSE (on St Ann St for those of you in Oak Bay). So OK, I figure should have a look. It was a great little house, raised and completely rebuilt from the studs up in 1986. And seemed to be a good price (for the grossly, morbidly over priced market of Victoria).

I started picturing our family in the house and mentally doing the numbers.

Then I did a reset and asked myself “WHAT THE F**K AM I THINKING”.

The mortgage even at the best variable rate and with 25% down would be about $300 more than the rent we pay now for a bigger house in a better location.

Taxes and municipal fees would be about $550/m.

The house is essentially 30 years old, its in immaculate condition but will need a new roof, furnace, water heater, fixture upgrades, new appliances, etc, etc, over the new few years.

Then there is the lost investment income from the downpayment.

But what was really AMAZING to me was how easily it was for ME, a HOUSING BEAR in Victoria since the early 2000s, to be SEDUCED by a house. I can just image if my wife were pushing for it.

Younger generations with no experience of a normal market and of market corrections have no chance against the HOUSING LUST.

THEY ARE DOOMED to make the same mistakes we all make when we are younger and start investing/speculating.

And buying a house in Victoria, TO, YVR, or even S’tooner at these historic high multiples is investing/speculating.

Unfortunately, while most of us cut or teeth on a losing a few thousand dollars, today’s real estate purchaser will be taking a 10s or 100s of thousand dollar bath.

Nasty.

#76 Yogi Bear on 03.30.15 at 7:42 pm

http://www.macleans.ca/society/life/the-inheritance-wars/

I like plugging boomer bashing. This is my weekly submission.

#77 The real Kip on 03.30.15 at 7:43 pm

The BoC will cut rates not once, but twice before the federal election in October, and you can take that to the bank!

Keep the Ponzi going!

#78 The other Keith in Calgary on 03.30.15 at 7:47 pm

That must have been some poll done by CPA Canada. Probably the same group that thinks their driving skills are above average.
In other news from Calgary, downtown is being called ghost town now in certain circles. You can even get a cab.
As for John. You guys won the house lottery once. Take the money and run. The chances of doing it again are trivial. Like the flat earthers, and the ones that think landing on the moon was a hoax, there is no convincing your wife with facts. You can stand firm and simply not sign anything related to buying a home. Good luck there buddy. Horses, water, you know. Somehow, you need to lower the pressure, and get out of the way after you create the circumstances to let her discover what is driving the emotional pressure. I admit to not liking the odds you face.

#79 Heisenberg on 03.30.15 at 7:48 pm

There’s nothing wrong with buying a house. The problem is that people lust after the best house in the best neighbourhood.
With a million dollars, they can buy at least one house in any part of Canada (yes, even Vancouver), and not have a mortgage.
Will the price drop? Yes. It will also go up again. It’s called a business cycle. As long as you’re not mortgaged to the limit of your income, then you’ll survive.
Better yet, buy outright and save yourself a ton of fees.
I’ll always invest in real estate over anything else. You can always live in a depreciated home that you own outright, but you can’t live in some “investment vehicle” that exists only in paper in some company that’s here today and gone tomorrow.

#80 Llewelyn on 03.30.15 at 7:49 pm

Over the past few weeks your blog has included a number of letters from Canadian families that have a combined income of more than $140,000 per year and have more than $1,000,000 in various assets to invest. Quite a toilet Canada has become when compared the your hero the USA where 25% of all incarcerated citizens in the world reside. Bashing the Canadian economy and discouraging investment in Canadian companies is not in the interest of Canadian citizens who are struggling to keep their head above water.

I realize your blog is aimed at Canadians with capital to invest but try and be a touch more positive about our potential to overcome adversity.

#81 omg the original on 03.30.15 at 7:49 pm

#47 Apathetic
The urge is overwhelming to buy a house. Trying to stay strong. Even the 10 year fixed rate looks delectable.
———————–

So not sure if you are serious, but…….

Really depends on where you are in Canada – there are some markets in south west Ontario or the east coast that are normal markets. Normal in that buying a house for your family to live in does not mean paying two to four times the historic normal and living house poor.

But if you live in TO, YVR, Victoria or even S’tooner try using one of the online RENT VERSUS BUY calculator. When all costs are accounted for, the delectability of the a house purchase in these market turns sour.

#82 Prairieboy43 on 03.30.15 at 7:50 pm

1) Cancel HGTV.
2) Cancel HGTV.
3) Long vacation Just two of you. Kids get working ( summer job, ex. Fighting forest fires, Smoking man investing), Get living now!

#83 Peter on 03.30.15 at 7:50 pm

Reply to #17:

“60% equities (US and global, with 15% Canadian), and 40% safe in case there is a drop, to protect your investment.”

What’s considered “safe” for a Canadian investor today?
Bonds (even with a rate change)?
Cash (little to no interest, being outpaced by inflation)?

#84 screwed on 03.30.15 at 7:51 pm

Why are there power lines in the airport’s surrounding area to begin with? Nevermind the story about the airport’s authorities completely failure to evacuate the passengers and care for them. Heads should be rolling at YHZ over this.

My advice for John the millionaire doormat. Buy a nice place at a fraction of the cost. A house is a shelter. If your wife cannot live in a more humble abode, take her on a missions trip to Africa. In fact more Canadians should go there for a glimpse of what brutal reality is like to many millions of people in this world.

Canada desperately needs a reality check and soon. That crash landing at YHZ was a wake up call to many in Nova Scotia at least. So soon after that weird one in France and the same plane. Uh oh.

#85 screwed on 03.30.15 at 7:56 pm

#76 The real Kip
I can only encourage Canadians to open up USD accounts and start converting. Best is to try and save in USD as this swirling of the bowl could potentially be the end of the Canadian currency. Doesn’t matter how cheap the manufacturing is here. It is always cheaper in Mexico or China.

#86 Obvious Truth on 03.30.15 at 7:56 pm

Just for the record. I agree with freedom first on this one. It’s not about selling the house. It’s about buying one for $1.5M. A cool half mil at least as you enter your wrinkly years.

You obviously made the promise and she is already decorating and having a house warming. Has told all her friends. I could go on. But why.

This is not about money as many have already said.

You’re screwed.

#87 Victoria Real Estate Update on 03.30.15 at 7:58 pm

For those of you who might be interested, scroll down to see one of my regular updates. If it isn’t posted tonight you will find it tomorrow.

Cheers!

Was that a commercial for a blog comment? You’ve lost it. — Garth

#88 Jason on 03.30.15 at 8:00 pm

John,

You absolutely cannot give in to this. Insist that before you even consider buying a $1.5 million house, your wife reads every single post on this blog for the past year or two. Only then can a rational conversation about finances be had. To be blunt, if your wife would risk your and her future financial stability simply in order to own a “show home”, then she needs to give her head a shake. If she would divorce you over this, then you’re probably better off. DO NOT RELENT. Stay strong, and good luck!

#89 Linda on 03.30.15 at 8:01 pm

A million cash in a high interest (2%) savings account. Holy Hannah. First & foremost, invest the majority of that puppy. Buy hard core dividend paying stocks, like bank stocks or stuff people truly ‘have’ to have, like food (groceries), utilities, health care & the like. Forget the glamor babe stocks with the come hither, high rate of return cause like a hot babe in red (either male OR female), the danger is clear. Might be fun to do but the cost is likely more than you can afford.

Second, keep back say 10 or even 20 percent & use that cash to upgrade the rental digs. If your wife wants the pretty mansion with the cool pool (or whatever is the thing these days) find that upscale manor & rent it. Try before you buy, is how you sell it to your lady. If she has any practical in her at all she’ll see the sense of that. After all, if you score a very upscale place for a decent price you can do all those fancy things & not have to lay awake at night wondering how you are going to pay for it. If you have old, worn out furnishings then upscale them. Lots of consignment shops where you can score some uber upscale stuff for less & if your wife or you don’t want to sit on someone’s old stuff (try the antique angle, always good) then re-upholster that piece or get it refinished to your taste.

For sure hold off on buying. I still don’t think the apocalypse is going to occur despite the current gloomy economic outlook (the 80’s in Alberta were rough – some 25,000 homes were repossessed over a 5 year period) I do agree that there will be some serious pain, possibly even a reprise of the 80’s in Alberta but this time nation wide. Depends on how long the oil glut goes on & how much a currently robust US economy keeps our Canadian one afloat by osmosis as it were. I depend on the middle East having yet another crisis that cuts into the currently over robust oil supply, along with lots of travel & other consumption by the US economy.

If the landing is hard, nasty & prolonged, like the dirty 30’s you might be able (as cash is king during said times) scoop up some incredible deals for way less. I’ve seen some very swanky places get scooped for many millions (I did say swanky) less than the original asking price. Though from my practical viewpoint I don’t really see why I’d want more room than I have now. I suppose one can hire household staff to impress family & friends along with the swanky new digs but I like my privacy, don’t need or want staff to be on hand to witness my less than stellar moments. Plus I am domestic by inclination – love to cook, don’t mind cleaning & actually enjoy ironing. Plus love to garden, though I always forget over the winter how much work it really is.

#90 james on 03.30.15 at 8:02 pm

The wife is clearly a delusional idiot, and a menace to his long term financial stability.

My father was the same way. He had house lust in his eyes all the time. He moved every year, trying to upgrade to a bigger and better home. My mother argued in vain, telling him that each time he bought and sold he was losing massive amounts of money in transaction costs.

Eventually she dumped the idiot. It was the right call.

You might wish to mull that over. Or a hitman.

PS: I was just over in eastern europe, where there are plenty of fashionable, educated and intelligent single 40-50 year old women in great shape (thanks largely to the lack of American carb-heavy diets). Your current wife might cost you more than a divorce and a few trips to Hungary or Ukraine to find a more sensible one.

#91 Greedy pig on 03.30.15 at 8:03 pm

Well we know who wears the pants in the family as the saying goes! John why don’t you man up, you think a whinny little letter to garth is going to change your greedy old wife’s mind. If you have to beg for someone to take control to help you handle her your life is so pathetic, you are pitiful! All that money and no peace!

#92 Jason on 03.30.15 at 8:06 pm

One more thing, John. Understand that it is actually you who created the problem in the first place, years ago, by not setting very clear boundaries about what is and is not acceptable to you in terms of finances in a marriage. Sounds like your wife is used to getting her way and now that there’s hesitation on your part, she’s turning up the heat. Find your backbone, and do not be swayed.

#93 What about CMHC? on 03.30.15 at 8:07 pm

“Fools buy houses; wise people rent them”

#94 Smoking Man on 03.30.15 at 8:07 pm

Dear John.

Do it, you’re in your 50s, you need to keep your prostate active, she might shut down the therapy. You’ll get cancer and die.

The bonus, the wife won’t need to speak anymore, all that effort of conniving and scheming to prove you’ve made it won’t be necessary.

She can let her things and possessions do the talking for her. Sit back and watch the other ladies go, wow, this house is spectator, even though secretly hate your guts perception of success to present.

It’s a big effort for a 50 plus chic to feel she’s worthy. They may say it, but don’t feel it.

Do it man, you can’t take it with you.

Just make sure you leave a bit of loot on the side, for on the side therapy. Just in case.

#95 NoName on 03.30.15 at 8:09 pm

who remember this john?

https://youtu.be/bSNT4Y6-5fI

#96 joe schmoe on 03.30.15 at 8:12 pm

My wife too wants the upgrade house. The one we are currently in is nicer than I ever thought I would live in. I think the house I grew up in is smaller than our garage.

She makes good money and doesn’t need my pittance for the upgrade, so I am tire kicking to keep the pressure off.

I find I compete with a local RE Agent more than anyone else, he keeps overspending and redeveloping/re selling…every time I sniff at something, it seems he is all over it.

Last month I offered 28% less than his current listed price for a home to be finished in Sept 2016…and he had to take mine at some indexed market value as trade…he laughed a month ago but called me back this weekend….I figure I will scoop it up in Oct for 40-45% off 2014 market $ easy.

Crap. Then I will have met my marital obligations! My wife won’t know what to do!

RE is fine if you don’t over extend…timing can be everything in the long term return however…

#97 gladiator on 03.30.15 at 8:16 pm

Dear John’s wife,
I hope you realize that by showing of a gorgeous house, you will have short-term gains and long-term losses, and I don’t even mean money. You will feel like a winner when people will be visiting you and will be seeing your house (and, of course quietly envying you) – that’s the gains part, and they are short-term because guests usually don’t stick around for long.
The losses part is that all that envy will turn your friends and relatives into your enemies and the more times they visit your beautiful house, the more they will hate you.

Plus, I honestly do not understand people who live for someone else: is you life really about impressing others? Is this the only way you can get satisfaction from life?

John: dump the wife. You will lose half now, but most importantly, you will get rid of the money-waster that your wife is, so your irrational expenses will end now. You never know who she will want to impress next, after you get the house. There’s always someone richer than you.

Just my 2 cents.

#98 Bobs ur uncle on 03.30.15 at 8:17 pm

#37 Cici on 03.30.15 at 7:02 pm

” If he insists on buying next year, I’ll insist that he takes the mortgage out in his name, and I’ll pay him rent for the priviledge of living with him. ”

This is what I was thinking. If the SO is so convinced it’s such a good idea, let them take the risk with their 50%. Although it might get a little lonkey when you’re retired while they’re still shackled to the mortgage.

#99 joe schmoe on 03.30.15 at 8:17 pm

Sorry I meant Sept 2015 in my last post…

Also interesting to see the stats on our national wellbeing…

How can we fall off a cliff when Oil only made up 10% of our GDP (I am throwing darts at this number)? And Albertans only make up 11.5% of the population?

Ah, there is more to this than oil…..oil prices are just the last straw that was holding this mess together.

Those who think this is isolated are in trouble.

$500K haircuts off interior BC luxury housing this week.

#100 Bobs ur uncle on 03.30.15 at 8:17 pm

lonely…

#101 Smoking Man on 03.30.15 at 8:19 pm

Jesus Christ, its only 8, I’m in the presidential suite at Seneca.

I’m halfway through a 26 oncer JD and then don’t even have a buzz yet.

My wife sends my a text today.

I was watching Dr OZ they had experts on , said if you have more than 3 wines per night your a raving alcoholic. The drinking stops tonight..forever.

I call up my host, I want the big room tonight. OK sir smokey.

I call my wife, hey Andrew called me, he’s offering the big room, said it slow and he misses us, you in I said.

I’ll start packing she joyfully agrees ….

Everyone has a weakness.

Ha, drinking ain’t getting run over by a transport this evening.

What do I try tomorrow is the question . Vegas on a private jet?

Dudes I got game..

#102 Vancouver on 03.30.15 at 8:21 pm

The canada wide slowdown didn’t quite make it to the coast, so busy in the 604 rite now, robson and Granville are thumping, I don’t think we got the memo Garth!

#103 PharmBoi on 03.30.15 at 8:21 pm

It will take time and patience to convince John’s wife that renting is not a waste of money. So why not set up a small position in a couch potato portfolio for let’s say 25% of that money. Look at things again 6 months from now and compare the results. A fancy graph of theoretical investment income just doesn’t have the same effect as seeing one’s own portfolio in the green on a discount broker’s website. John can buy time by planning a vacation with his wife to relax, and one where they have an open agenda for sight seeing. Don’t restrict vacation choices to pre-packaged vacations and all-inclusives. The travel bug is hard to shake. Besides, vacation photos and unique souvenirs in the house are better for showing off than an actual house ;)

The most important thing in any relationship is communication, especially when it comes to finances. My girlfriend has always questioned why I feel that renting my current apartment is better than building equity in a property. She’s slowly coming around after I’ve set up a couch potato for her. The TD advisor was blown away by the growth in the account, and it’s really just a couch potato. I’m glad the girlfriend is beginning to think critically about her own finances than believing the first word that comes out of mutual fund sales people and realtors’ mouths. I love that woman!!!

#104 Porsche on 03.30.15 at 8:25 pm

I’m suffering withdrawal from no gloom and doom links tonight.

#105 Obvious Truth on 03.30.15 at 8:26 pm

#69. For who?

#106 calgarytrooper on 03.30.15 at 8:30 pm

It seems wife is an egotistical manipulator. Maybe some counseling for both husband and wife for self esteem. Also, some financial counseling for both (wife needs it the most).

#107 Van Doom on 03.30.15 at 8:34 pm

#103 Porsche on 03.30.15 at 8:25 pm
I’m suffering withdrawal from no gloom and doom links tonight.

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

You live in Canada right? Dats all you need

#108 Smoking Man on 03.30.15 at 8:35 pm

Boom it hits me. The secrit of life, better tryp this fast, starting to feel the kick.

IS doing what you want, while making others around you agree and join your cause.

It takes skill and craftsmen ship.

Oh PS the taking to my phone and it types isent working that good for some reason.

I’m the one thumb bandent. Tonight.

I hate Dr Oz…he’s such a goof, doesn’t kno shit, the ladies love him.

Why, he’s got loot..

#109 Leo Trollstoy on 03.30.15 at 8:37 pm

“My question to you is regarding some information to convince my wife …”

You can’t convince an affluenza addict.

#110 Tigger on 03.30.15 at 8:38 pm

Step 1) Man up and diversify your finances (2% is for kittens… and people that can’t do math…).

Step 2) Take the family on a long trip to another country (paid for by first few MONTHS of dividends). Spring time is the worst; she just needs to focus on something else and gain some perspective…Do that a few times and all will settle down.

#111 Drill Baby Drill on 03.30.15 at 8:41 pm

Poor Bastard. Get a no fault divorce quick then put your half far from her lawyer. You are going to lose 1/2 anyway might as well live it up as a single dude.

#112 Blair on 03.30.15 at 8:42 pm

Dear John,
Stay the course, don’t change, fight the urge and pressure to buy a house.

Dear John’s Wife,
For crying out loud, invest the $1M that is in the savings account. If it earned 7% annually, it gets you 70K which pays the rent, maxxes out each years’ TFSA limit, gets you a nice holiday or two and a few big ticket Christmas gifts each year.

Let the kids finish school without moving. Looks like most, if not all, undergrad education costs are covered after high school.

Actually one of you could even retire right about now – that’s how good you got it right now. Bet all of your friends can’t pull that off. Not everyone has all the above going for them.

You will regret in the long run a new house purchase both financially and relationship wise. Not worth it.

You’ve clearly lived within your means for so long and reaped a nice windfall on the home sale. You should be commended. A fine example for your kids. Don’t throw it away.

#113 joblo on 03.30.15 at 8:43 pm

#35 Andres

“Become an expat in a warm, pleasant country where you couldn’t spend all your nest egg if you tried.”

Please enlighten us on this place or places, is it a myth?

#114 RayofLight on 03.30.15 at 8:43 pm

2%, are you kidding me?
Get with the program !, 10% min with a little bit of homework.

#115 lala on 03.30.15 at 8:45 pm

John dude, don’t buy anything….it doesn’t matter how cheap it is or it gets, this country it will eat you alive. With your cash you live like king in some other parts of the planet, where people work to live and not live to work. Blog dogs you all sucks me included. lala the last joker.

#116 johnny d on 03.30.15 at 8:49 pm

It’s hopeless. Rates will stay low forever. Don’t be shocked when they bring back the 0 down 40 year mortgage. All people care about is the perceived price of their houses. No matter if a loaf of bread costs $30 CAD and they make $18 an hour.

#117 Ryan on 03.30.15 at 8:49 pm

John,
Just wait a few years and than buy all of the friend’s houses that she is dying to impress, because she feels left out. You’ll purchase them for practically nothing. Then be like who is the man? Wife will be like I bow oh King John. All of your friends will have to pay you rent now after you bail them out. She will feel like a dominant Queen and love you forever.

#118 Bslow on 03.30.15 at 8:54 pm

Dear John:

The plan was to sell and move north where you would build a new home. Now that it’s time to follow through it sounds like you are getting cold feet and trying to back out.

Perfectly okay to insist on not taking on another mortgage. Not okay to renege on the plan and insist on renting.

Figure out what makes sense financially and stick to the plan that you made with your life partner.

If it all goes down the shitter at least you will have a beautiful, new build that’s paid for!

Good luck!

#119 Sean on 03.30.15 at 9:01 pm

#22 Mark on 03.30.15 at 6:42 pm

but how do we get out of the mess??

————

It’s a great question. My own thoughts, as an expat watching from afar, is that the problem runs very, very deep. I read an article about the LCBO the other day, and it got me to thinking… the very notion of a legal substance, being regulated by government due to little more than historical accident… combined with interprovincial trade barriers, etc.. and this is one industry only. Another read was about some CRTC deliberations… should Canadians be allowed to decide individual channels versus bundled options… and this again an institution in existence largely as an historical relic.. hint, there really is no more “broadcasting” anymore, certainly not in the sense that broadcasting in any way limits our choice of what to consume.

And I guess my thought is… okay, change this regulation, limit that institution.. and then what? The root problem is that Canadians don’t see these things as THE PROBLEM! We are running a backward looking, haphazard collection of increasingly socialist policies… and we don’t recognize this as THE PROBLEM. Canadians just don’t seem to care. We don’t seem to be rooted in the sort of principles that would in fact be consistent with stronger growth, and a truly leading economy. Our progress has largely been tied to, again, historical accident… i.e. our simple “resource extraction” model of an economy works well IF we happen to be undergoing a resource boom. Absent that, it is the same old story in Canada. A fairly un-dynamic economy… and a public that is unwilling to embrace the principles that lead to a dynamic economy.

My two cents.

#120 M on 03.30.15 at 9:03 pm

Either drop the broad or take her in a 3 years vacation in tza islands. When you’re back, great white north will be in such a depression that would be obvious to her you are a hero.
Very insensitive advice but so very true.

#121 Real Reason on 03.30.15 at 9:05 pm

The real reason John’s wife wants house is to show her future Daughters in law (and their extended families) that her Sons’ parents have nice pricey house. Also she feels deep down that her Sons will not get Girl Friends/Future Wives if they are renters. No matter what culture it is – Eastern/Western/South Asian – All women think the same way – about house.

#122 Smoking Man on 03.30.15 at 9:07 pm

All you pathetic patrons of the comment section, you all think the holly grail of life is money, ha, its fake feeling,. You need to find someone that loves you and you get to love em back.

Then your set.. Everyone, everything else are instermenrs of fun.

Take it from a drunk who’s got 30 or 40 million..I think..not really sure.

You all behave with the goal of pleasing some master..your master should only be you..and the one trying to shut down yourself destruction… Its sweet on her part…

But really, I hate this world, if I left it today, could care less. Another adventure.

But god damb, I wish there was a god, i would love to give the prick cut eye as he trys to banish me to hell.

Rules are hell, compliance is hell.

A free spirt that flicks cigarette butts at his fence all winter then hires a handy man to pick em up…

Gives life meaning ..

#123 Mark on 03.30.15 at 9:15 pm

“The root problem is that Canadians don’t see these things as THE PROBLEM!”

Agree 100% with your post, and the examples you cited are also examples I would have cited as well. Too many parasites not only leeching off of the productive class, but also damaging the ability of the productive class to produce.

#124 bullshitallergy on 03.30.15 at 9:17 pm

That was no hard landing. . . the word is crash.

#125 Dual Citizen In Canada on 03.30.15 at 9:21 pm

Pull the trigger. Just remember, people need to fail to learn life’s hard lessons. And you will both be held accountable for your decisions. There will be no one to blame but yourselves.

#126 MTVmademedoit on 03.30.15 at 9:23 pm

#122 Smoking Man
A multi -millionaire who wastes countless minutes writing drivel on this blog then to banter with his detractors? I’d have a lot better things to do besides frequent a comments section while I smoke and drink low quality american whisky in the bowels of Canada. You actually just depressed me a little bit.

I call bullshit.

#127 Nora Lenderby on 03.30.15 at 9:23 pm

#234 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”

There was another poster called Sue, so I renamed myself in homage to Click and Clack, the Tappet Brothers of Car Talk.

The other alternative was the name of the head of their working mothers’ support group, Erasmus B. Dragon. But Nora seemed more appropriate for this blog.

#128 Andres on 03.30.15 at 9:29 pm

@ #113 joblo

When I was down in Ecuador there were a ton of ex pats living what looked like really nice lives in the small beach towns. They’re safe (unlike Quito which also has a lot of expats), warm and full of great people. Costa Rica would be another good pick.

#129 Donn on 03.30.15 at 9:29 pm

Dear John,
For your sakes go to a financial adviser, our host would be more than fine. 7% total return would bring you 70 grand a year, with tax efficiency you would net out pretty high. Rent a palace for $4000 and continue to use some of your high incomes to save a bit more. Your set! DON’T ^%$#@^ IT UP!!!! Sincerely, been there and did it. Retired 6 years ago and still younger than you.

#130 Brew on 03.30.15 at 9:32 pm

They should buy the house. She wants it and John does too. He just thinks it is the wrong thing to do.

Down payment should be 25% and carry a $1.1 million or so mortgage. The payment would be similar to their monthly rent.

Invest the remaining $600k along with the other $400k in a balanced portfolio generating 7% per year.

They are still making 140k working and add the 70k spun off from their investments. Doesn’t matter what happens to house prices.

They live happily ever after and by the time they reach 65 should be worth well over $2 million not counting the house.

#131 golden retriever in black on 03.30.15 at 9:41 pm

#37 Cici on 03.30.15 at 7:02 pm

” If he insists on buying next year, I’ll insist that he takes the mortgage out in his name, and I’ll pay him rent for the priviledge of living with him. ”

‘privilege of living with him’? You should let him know that as a ‘landlord’, he is to fix all craps that break/leak in the house, no complaints, no extra charges, should never complain if you are in the shower too long, or the heat is too high in winter, or u turn on the A/C in summer time.

back to John, I am amazed that the wife wants to put the family’s life time saving into a house and then some more mortgage. oh wait I bet she wants to take out some HELOC to give juniors some down pmts later on. I must say you are a great father and husband.

#132 bubu on 03.30.15 at 9:42 pm

I don’t know what you are are talking about Edmonton but the sales are on par with last year, price is higher… I’m not even talking about the price vs what was in 2013… Prentice announced no cuts for the public jobs so Edmonton is doing ok…. Not boom time but still good.

#133 JSS on 03.30.15 at 9:43 pm

John,
Just pretend you lost your hearing.

#134 Canucklehead on 03.30.15 at 9:44 pm

John,

I was in a similar situation. Sounds like its about impressing the friends as much as it is about buying. The best advice I’ve read so far is take her on some nice trips to divert her attention and show her what’s possible with economic freedom. In our case, two years ago we pulled the trigger on a small place of our own (in CALIFORNIA). For what you could get down there compared to Vancouver it was a no brainer. And the sunshine is golden……

#135 45north on 03.30.15 at 9:51 pm

John, BlogBitch has good advice: IMHO there’s no way around this. You can only go through it. That takes delicate negotiation, lots of listening and quite possibly, engaging the help of others to help gently influence her perspective.

I’d say talk to anybody who’s not selling real estate. Problem is she’s taking a huge risk but doesn’t figure it’s a risk.

cmj: We are in for a huge housing correction because many people are in deep debt. If you buy an expensive home, you will join the herd. What will it cost you:

your relationship

which could well cost you the house

there’s a thought John, in the context of financial planning, can she keep up the house in case you die? Just say you want to provide for your family in case anything should happen to you. You know like you get on the wrong airplane.

Cici: Anyways, he’s getting more and more cranky and emotional about it, and it’s causing a lot of distress in our relationship.

I’m thinking the same question: “can he keep up the house in case you die? ”

A Yank in BC: Admittedly a stretch.. but if both Joe Owe and Poloz resigned tomorrow, and you were appointed to fill both roles

it’s quite a stretch, the one precludes the other. I mean appointment to the one position precludes appointment to the other.

George: Three family members run boutique real estate firms specializing in cottage properties.

They told us they have seen the writing on the wall and are quietly shuttering their businesses, the dad taking an early retirement and the son and daughter coming to the city where their spouses both can work in health care.

for some time I’ve sensed that cottage life is no longer attractive. I remember the 1950’s. Everybody went north to Muskoka (we went to Sundridge). There were no cheap flights to Cancún.

screwed: talking about Air Canada 624: Why were there exposed power lines in the landing approaches to begin with?

kind of funny, in an ironic sort of way. In case of a crash, you also have to deal with a power outage.

#136 Darren on 03.30.15 at 9:52 pm

John is *screwed* (technical economic term)
Housing can be a great asset but not always a great investment. The fact that in their 50’s his wife wants to put approx 100% of their net worth into a home to show off to her friends is *nucking futs* (technical economic term)
Here is the source for the bit below….
http://www.ryharv.com/2011/11/on-buying-a-house-with-your-girlfriend/
I owned my last house from 2005 to 2007, during the greatest bull market for houses that has ever existed. After accounting for opportunity costs, I did not make a dime. The math went roughly like this:

Bought house for $225k (purchase price — with 20% down this would be $45k actual cash outlay); sold it for $325k. Gross profit = $100k.
Had to dig a new sewer line. Subtract $8k.
Had to repair chimney. Subtract $12k.
Had to pay buyer’s & seller’s realtors. Subtract $20k.
Lived in it for about 4 years, at a total monthly cost, including mortgage, taxes, and net of mortgage interest tax deduction, of about $1600. Prior to buying the house, I was renting an apartment for $600. Had I stayed in the apartment, I could have saved $48,000 over that time period.
The heating bill for the house was about $200 a month more than it was for my apartment, averaged over an entire year (total $10,000 over four years).
My net profit is now down to $10,000. I’m certain that I spent at least $2,500 a year on the incidentals associated with owning a house. Things like gas & a higher car insurance bill for my longer commute, lawnmowers, plants, various repair items, etc.

So, to recap, I owned a house during the greatest housing bull market in history. My “headline” investment return on the down payment was more than 220%! But after considering all the real costs, I made no money. I would have been at least neutral, from an investment perspective, staying in the apartment and saving the rest of the cash flow I wasn’t spending. Do you see housing prices appreciating by 50% in the next four years? That’s what it takes to break even, based on my experience.

#137 Larry from ON on 03.30.15 at 9:53 pm

Garth,

Would John be a candidate to buy a home, borrow against the equity and use the funds to invest in a balanced portfolio? With the $400k in the RRSPs and TFSAs, plus home equity-backed portfolio, could John and his wife generate enough to return to quickly pay off the mortgage, and build up the rest of the portfolio to provide good income for retirement?

#138 charles on 03.30.15 at 9:56 pm

My Dearest John,
I can help you with you with this small problem if you can just give me a moment of your time that will allow you to sasticfy your wife’s wildest desires. My father is the rightful heir to a small kingdom in the north of Africa. In order to claim what is rightfully his our family must post a $1.5 million deposit which will secure untold riches for my proud family and you, our distinguished sponsor. I can place in your hands today a sworn promise notarized in my country by the highest officials to return the small loan 10 times over.
Thank you for your kind attention to this matter and thank you Garth for introducing us to this intelligent and obviously wise individual.

#139 SWL1976 on 03.30.15 at 9:57 pm

…as will be government austerity. But are there also other sources of friction in the economy that impede a business expansion? If so, why aren’t voters demanding the removal of such, so that their kids can get jobs? In short, its great to sit here and debate how bad the mess is right now, but how do we get out of the mess??

It is a good start to discuss and enlighten those who may not see the mess we are in, but readers here for the most part get what’s going on. Garth with this blog and those who contribute are a great source of information, but it is also like preaching to the choir. Lots of people on here seem to get it but as the stats go we are the 1%

I think we are well past the point of simply voting for change. The system is set up pretty good to ensure the sheep have little say and really don’t matter. Voting is now just a feel good front to pacify the masses

I wish there was more I could do, but honestly between working, paying taxes, saving, and living I don’t have a lot of gas in the tank for much else at the end of the day, and I’m sure there are lots of people who feel the same.

Without a mass awakening this ship is going to run its course. I love Garth’s optimism and am planning for the future with a balanced portfolio. I do hope to be pleasantly surprised in 25 years, but I also won’t be shocked and devastated if my accounts get raided, and the corrupt elected officials hang us all out to dry.

Enjoy life and enjoy each and everyday, educate yourself and others to what is going on and try to see through the smoke and mirrors. I find it interesting that many can clearly see how the MSM completely skews real estate numbers, but fail to see that the same deal is happening on a much much larger scale in regards to real world news

Truth is stranger than fiction these days

John,

Take your family on a nice vacation where houses cost what they should for a reality check

#140 Smoking Man on 03.30.15 at 9:59 pm

#126 MTVmademedoit on 03.30.15 at 9:23 pm
#122 Smoking Man
A multi -millionaire who wastes countless minutes writing drivel on this blog then to banter with his detractors? I’d have a lot better things to do besides frequent a comments section while I smoke and drink low quality american whisky in the bowels of Canada. You actually just depressed me a little bit.
I call bullshit.
….

Of course.

Go to CNN , CFTO, FOX for the truth..

Did I replay to this before.

#141 Mark on 03.30.15 at 9:59 pm

“screwed: talking about Air Canada 624: Why were there exposed power lines in the landing approaches to begin with?”

If you want to talk about AC 624, the question to ask is why is the Canadian economy so un-committed to productivity and efficiency improvement that a 24-year-old aircraft without the latest in avionics (ie: NAV/GPS/GNSS capability) and only rudimentary LOC / DME approach capability flown on such an approach? Into one of the worst airports in Canada in terms of low visibility.

It goes back to the systemic problem of a lack of commitment to investment in technology and productivity that besets the Canadian economy. Policy makers need to start looking at why Canadian businesses aren’t, and haven’t been aggressively investing in the latest in technology for quite a while now. The high cost of capital, and a dis-preference for business credit due to the induced preference for consumer credit certainly can feature prominently in such discussion.

#142 palebird on 03.30.15 at 10:07 pm

#84

The issue was not the power line, it was the fact that they landed short of the runway..pilot error it looks like..we will see. Both this and the German/French accident had nothing to do with the type of aircraft. It looks like they were both pilot induced.

#143 The non-cowboy on 03.30.15 at 10:13 pm

A little Vancouver real estate mirth. But not far from the truth.

https://www.youtube.com/watch?v=wcAMtvNfp78

#144 OffshoreObserver on 03.30.15 at 10:22 pm


#113 joblo on 03.30.15 at 8:43 pm
#35 Andres

“Become an expat in a warm, pleasant country where you couldn’t spend all your nest egg if you tried.”

Please enlighten us on this place or places, is it a myth?

I have a 7 figure, diversified investment portfolio. I live with my 28 year-old GF in Vietnam. [No commonlaw in Vietnam.]

We just rented a 5 bdrm house a block from the beach for USD300/month. Gave GF $10,000 to furnish it.

Now, I want to downsize to $100 – $200/month because I don’t need so much space.

Cost of living is absurdly low: Biggest items in my budget are flying home to Vancouver to visit my Mom a few times a year and to file tax return.

Fibre Optic Internet just went in to our house: $25/month.

Had a stubbed toe last year so GF took me to hospital. Two doctors and 5 nurses. They gave me a tetanus shot. Cost $25.

Teeth Cleaning and check-up at Dentist: $15. GF laughs and says it only costs her $5, because she’s a native.

Beer $.3 a can, but $1 on beach-side restaurants. GF buys cheaper at store and brings to restaurant. They don’t mind, but she buys coconut.

Took GF to Singapore and Bali for a month. Air was cheap, TigerAir, Singapore Airlines discount carrier.

Now have taken her to Hanoi for three days before my return to Vancouver. First Class hotel $60/night–top floor with large balcony, LED TV/monitor. GF wants to overstay in Hanoi but will downsize hotel to one for $12/night.

Temperature range where I live on the Central Coast: 25 to 30 Celsius.

Next analysis–AND GARTH you might comment on this, too–the pros and cons of expatriation from Canada.

#145 BS on 03.30.15 at 10:32 pm

John:

we are renting (2800$/month)…My wife is trying to convince me that rent is a waste and she is searching for the perfect home and that means about $400 to $500K mortgage, plus the $1 million down.

You are making a common error John. You are under-renting. What I mean by that is you are renting a place which is not as nice as the place your wife wants to buy. Big mistake.

Simple solution though. Rent the trophy house that looks just like the one the wife wants to buy. Sure, you may have to cough up $5000 per month rent to get the $1.5 million house but that is nothing compared to what it will cost to buy. Factor in you will be giving up the investment income on the $1 million, plus paying a mortgage, then the other expenses like property taxes and maintenance and finally the capital depreciation that is inevitable and that $5K per month rent is chump change.

Look for a nicer place to rent ASAP, sign a 3 years lease and the wife will be happy and you will get to hang on to your hard earned money.

#146 Mukadi on 03.30.15 at 10:37 pm

Financial suicide is an option – just ignore the imminent economic crash and sink your pile of cash in one asset that is going to be depressed for the next 10+ years in order to please her.. There are still millions of $1million underwater homes in the US 8 years after the big REIT tsunami!!!

#147 Scotrand Russell on 03.30.15 at 10:45 pm

I was trying to explain a passage from the Gospel of Garth to the Misses, that the key is to not run out of cash in the long run, when she quipped back “Don’t you quote Garth Turner to me, he’s the reason I don’t have a house!”. That maybe, and the fact I keep seeing large capital loss carryforwards on seniors notice of assessments that I surmise can only be real estate losses from ancient times. Like in the movie Braveheart I keep saying to myself “Hold… Hold…Hold…”

#148 John on 03.30.15 at 10:48 pm

One John to another:
1) “Personally I would love to have the house to show off but I am in complete alignment with your concepts.” This sentence is a complete contradiction because someone who is in alignment with the Garth Meme does NOT buy a house to “show off,” ever. Think: a modest home viewed as shelter with a balance of investments. Can’t have it both ways. So get off the fence. This isn’t about your wife, it’s about you.
2) “I sense a complete economic collapse into a recession unfolding in Canada and the only way I see it for me is to sit back and watch.” So, stall. The wife will soon be surrounded with the economic mess at every corner. Both of you should take the day off and go sit at the nearest Canadian Human Resources Office and observe. This rude awakening should make you both count your blessings – reeeaaaalllll quick. After that trauma, book yourselves a little vacation get-away. Borrow Bandit, if Garth can handle the separation anxiety.
3) “I desperately want to live without a mortgage.” “DESPERATELY”??? Rent or buy something for cash. Guidelines: 1400 square feet or less. No repairs. No condo fees. Mature trees. But only after the youngest is off to UNI in 2 years or so…… then review the situation and you might find a quiet spot…………… Heh, retire to Wasaga Beach and take up Curling – better than kitchen granite.

#149 BlackDog on 03.30.15 at 10:56 pm

@SWL1976 #139 re: ” I find it interesting that many can clearly see how the MSM completely skews real estate numbers, but fail to see that the same deal is happening on a much much larger scale in regards to real world news.”

Agreed.

#150 Nat Jobs on 03.30.15 at 10:56 pm

All these dudes with no chutzpah dealing with their domineering wives…need to come up with a modern financial romcom screenplay for this….maybe entitled Nad-less in Seattle…or maybe Hog-less in Hogtown

#151 OffshoreObserver on 03.30.15 at 11:00 pm

Further to my initial post above:

1/ I am 61; and

2/ a great site with succinct information of how and why to implement GT financial strategy: http://www.taxtips.ca/stocksandbonds/recommendedstocks.htm

#152 Spiteloz on 03.30.15 at 11:06 pm

Forget about oil, debt, house lust, jobs, financial illiteracy etc. The boc and poloz are solely out to spite YOU, Garth. Whatever you say, they’ll do the opposite.

#153 will on 03.30.15 at 11:07 pm

1 mil will net you fifty grand in dividends a year, more if you push the yield envelope. how much do you need? get a life by getting out of RE.

#154 Suede on 03.30.15 at 11:17 pm

John,

You have no chance.

Probably been married for 20 years and never put your foot down.

You guys are financially killing it.

So…

Buy the house, keep her happy. Take HELOC, invest $500k and ride off into the sunset on a portfolio.

I get off easy…

A trip for her to Vegas or Scottsdale here and there with her friends or a shopping spree twice a year with my visa and she’s happy.

If it looks good on Instagram, it’s good enough for the millennial women of today.

If any of you tip her off about this strategy, i’ll be p7ssed

#155 Jon B on 03.30.15 at 11:23 pm

I feel compelled to contribute. She’s nuts.
Kids leaving the nest = freedom.
Renting and living off your savings = freedom.
Not worrying about house maintenance, taxes and other ownership costs = freedom.
Buying RE at these prices while blowing your entire wad = servitude.

#156 NoOneOfConsequence on 03.30.15 at 11:27 pm

Actually, what John’s wife wants to do is perfectly valid – all you property haters just fail to see it.

The rates will drop again – Poloz will crumble under political and public pressure.

The commensurate drop in interest rates will push valuations even higher and the dollar lower. Asset prices will respond.

By leveraging their 1 Million into 1.5 million – I would imagine another pop of 5-8 percent immediately, turning their million into 1.2 million almost overnight.

War in the middle east turns nasty – Yemen detonates a nuke they smuggle into Saudia Arabia, and oil jumps to $140 a barrel almost overnight.

The oil sands recover, oil industry recovers, and John and his wife live happily ever after, bragging it up to all their friends and family.

Oh…and gold goes up to 5,000 per ounce, hereby finally justifying all the stackers so they can say “see! told you!”……after like…300 years.

Ta Da!

PS: past performance does not guarantee future returns.

#157 CalgaryBoy on 03.30.15 at 11:37 pm

Why is it that the wife is always the crazy one?!?

#158 omg the original on 03.30.15 at 11:37 pm

“#76 Yogi Bear on 03.30.15 at 7:42 pm
http://www.macleans.ca/society/life/the-inheritance-wars/
———————–
Quote from the article…..

“Environics Analytics, a Toronto-based marketing consultancy, has calculated the average liquid assets of Canadians 65 and over at $440,561 per household—and that doesn’t include fixed assets, such as houses and cars.”

$440K liquid assets plus a house – seems pretty high to me?? Throw in a modest house and you’re at $700 to $800K. And they must mean Canadian households over 65 or it just gets plain ridiculous.

And that’s the average!

Given all the destitute seniors I know there must be a lot of seniors with well over $1 million liquid assets.

Time to curtail the Smitty’s senior’s discount.

#159 Julia on 03.30.15 at 11:38 pm

“Would love to have a house to show off.”
Well, there’s the problem. We want the house to show off, the fancy car to show off, take better vacations than our peers and show off pictures on social media etc…

We are teaching financial literacy to our child. One of the first comments was: My friends’ parents have bigger houses, nicer cars (actually more than 1 car, unlike us), they go to Hawai etc… They are richer than we are. On to explain that having “stuff” does not mean being rich.
That is what kids see and that’s where it starts.

#160 Nagraj on 03.30.15 at 11:38 pm

About half of working Canadian households save absolutely nothing, but these same people rate their financial discipline as somewhat or very strong.

Well, unless one wants to conclude that all these people are, in a body, dumb f stupid, one will have to revise one’s preconceived notions of how people think.

This revising is not easy.

The great Canadian housing bubble, and the great Canadian consumer debt bubble both still exist absent collective moral censure. (On the other hand, government deficits are supposed to be the work of the devil himself.)

The roles of both Reason and Common Sense are vastly overrated in the resolution of the plot of “Murder of Denial”, eh?

#161 jean on 03.30.15 at 11:40 pm

John can buy the house, lose half his wealth through lost opportunity and dwindling, or he can refuse to buy the house and lose half his wealth in the divorce courts. His outcome is the same either way. Guess it really comes down to much he likes his wife whether he buys or not.

#162 Marie in my Twinnette on 03.30.15 at 11:44 pm

After yesterday’s salvation-based closing line “Come to Jesus” , maybe we can brainstorm for some future blog headlines here,
how about

“investor, heal thyself”

or maybe

“Let them eat cake, and real estate”

#163 Victoria Real Estate Update on 03.30.15 at 11:45 pm

CONTINUED SLOW SALES.

How weak have single family home sales in Victoria been so far in 2015 (January and February combined)? Let’s take a look at the facts.

Consider SFH sales in 2007 and 2012, two recent years that are important for comparison to this year.

* 2007 was an average year for SFH sales in Victoria.
*** 2015’s SFH sales pace is an extremely disappointing 26% below 2007’s (average) sales pace.***

* 2012 had the lowest SFH sales total since 1982 in Victoria.
*** 2015‘s SFH sales pace is only 3.5% higher than 2012’s (record-low) sales pace. ***

(Sales were adjusted for population increases since 2007 and 2012 for fair comparisons.)

In recent years, SFH sales totals in Victoria have been record-low or close to it. Consider the following facts:
* 2012 – lowest SFH sales total since 1982.
* 2013 – second lowest SFH sales total since 1984.
* 2011 – third lowest SFH sales total since 1984.
(Sales were not adjusted for population increases.)

This chart says it all: SO FAR IN 2015, SFH SALES HAVE BEEN WELL BELOW VICTORIA’S LONG-TERM AVERAGE.

. . . . . .January + February SFH Sales. . . . . . . . . . .
. . . . . . . . . . Greater Victoria. . . . . . . . . . . . . . . .
. . . Compared to 2007 (an average year). . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007…************************
2015…***********
2014…******
2013…**
2012…**********
2011…***********
2010…**************
2009…****
2008…*******************
2006…*************************
————————————————————————————
. . . . . . -40%. . . . . . -20%. . . . . . 0%. . . . . . +20%

(Source for the above sales data: Victoria’s board)

As I said, 2015’s SFH sales pace is an extremely disappointing 26% below 2007’s (average) sales pace.

WHAT MAKES 2015’S SLOW SFH SALES PACE MUCH WORSE IS THAT INTEREST RATES IN 2007 WERE MUCH HIGHER THAN THEY ARE TODAY.

IF RECORD-LOW INTEREST RATES CAN’T BRING SFH SALES IN VICTORIA BACK TO NEAR-NORMAL LEVELS, WHAT WILL?

The answer to that question is obvious – much lower house prices. The good news is that this problem is being addressed with the continued deflation of Victoria’s housing bubble.

Girls and guys, don’t take the (buy now!) advice of realtors and others who gain financially from the sale of houses in Victoria. Prices are falling and will continue to do so. Victoria’s price decline is nowhere near bottom.

Victoria’s price plunge could turn into a price crash. Nobody can predict whether or not that will happen.

Girls and guys, it makes no sense at all to become a first-time buyer and take on a dangerous mortgage at Victoria’s current bubble prices. Consider the advantages renters have right now over first-time buyers:

* Renters take on no risk. Your family’s financial future will not be torn apart by Victoria’s falling housing market.
* Rent is cheap in Victoria. Let your landlord continue to subsidize your rent.
* If you’ve let the housing industry and media convince you that granite, hardwood and stainless are important to you, then you must remember that whatever you can buy you can also rent.

Until next time – Cheers!

#164 Fuzzy Camel on 03.30.15 at 11:48 pm

An expensive wife only gets more expensive with time. Then they divorce you and take whatever you have left. So you have to plan to lose from the start. I suggest offshoring your nest egg, hidden, and let her mortgage herself to the moon. Take up drinking and smoking drugs, and look poor, but help her out a bit. Then when this thing blows up you won’t be in divorced court having your life savings looted.

This housing market is a ticking time bomb.

#165 popeye the sailor man on 03.30.15 at 11:49 pm

Those convinced against there will are of the same opinion still.

#166 Love my Kia on 03.30.15 at 11:53 pm

Why does this gal suddenly feel thrilled to be single? Owns nice but modest home outright, good job w/good salary, investments bringing in 7-10%….sounds like an attractive ad for plenty-o-fish now that think about it. Nah.

#167 phreedom phirts on 03.30.15 at 11:54 pm

Hey Everyone!!? Let’s get FF a girlfriend!!! (or boyfriend if he swings that way) That way he can actually participate in a well-rounded life instead of merely surviving disappointment; and realize it is not ALL about money and being alone. Maybe then he’d stop dispensing terrible embittered advice to men who love their partners and are truly interested in reaching a solution regarding obtuse financial stalemates. SM got it right. Finding someone to love who loves you back. Way to go Smokey.

I kinda feel sorry for the guy (FF, that is). He sounds so very bitter and empty even when he is attempting well-rounded respectability and counsel.

Kinship. Ability. Choice… or..
A person to love. Health. Money.

All three are necessary for a good life.

#168 coastal on 03.30.15 at 11:59 pm

Don’t be a wuss, tell the woman to take a hike and take your half. See what happens to people even when they do everything right ? Bankruptcy for owner(senior) and previous owner because of leaking oil tank.

http://vancouverisland.ctvnews.ca/video?clipId=581513

#169 Nosty, etc. on 03.31.15 at 12:02 am

#39 JustMe on 03.30.15 at 7:02 pm — “A neighbour here in Calgary is on Shaw’s layoff list for shutting down the call centre. He has a job until end of the year.”

Apparently, Kelowna’s Shaw layoffs will be in summer, a few months hence.

#170 saltpony on 03.31.15 at 12:20 am

John?
Do nothing. Sometimes doing nothing is the best solution.

Regarding the pending showhome purchase? Don’t sign. Don’t argue your side. Just listen and make sympathetic noises. Be kind to her; listen to her opinion, but don’t engage your side. Don’t fight. Ask questions why she thinks buying is the right choice. Explore her opinions. Listen-listen-listen and then Do Nothing.

Regarding divorce? DON’T! — you will get screwed beyond anything you’ve ever imagined.

Regarding the 1M? Get it earning more. 2% on a 1M is a joke and you are a fool to have it parked there. It’s like you’re walking past a $60,000 pile of cash sitting on the sidewalk once ever 365 days. Retain Garth or someone like him to manage it for a flat fee. 1% is the going rate I believe.

Regarding the lack of intimacy you are no doubt facing? Go on a business trip and enjoy yourself if the freeze is longer than a year. Life is meant to be lived.

Good luck Buddy.

#171 LB on 03.31.15 at 12:24 am

Canadian Junk Market Freezes as Poloz Compounds Oil Collapse

http://www.bloomberg.com/news/articles/2015-03-30/canadian-junk-market-freezes-as-poloz-compounds-oil-collapse

#172 cramar on 03.31.15 at 12:31 am

John,

You are so screwed!

You have no debt, a million in cash, more cash in RESPs, RRSP, and TSFA, coupled with $140k income, AND your wife thinks “rent is a waste”!!! I.e. read, “I’m not satisfied with our lives!”

What a tough decision. Such a hard choice.

On the one hand, you are real millionaires—right here, right now! If your wife has her way, you kiss the million goodbye, and take on $500k in debt, just to “own” 2/3s of your own house. And what for?? You will be sleeping in the same bed. Eating from the same table, driving the same car. The only thing that will change is your economic freedom and future.

Man you are soooo screwed! What is your wife a professional of? It isn’t common sense!

#173 PM on 03.31.15 at 12:43 am

I don’t know how many of you have been checking your portolios but this year isn’t off to the dynamite start of previous ones.

Those of you saying “throw that million in a diversified portfolio good for 7% a year” because of the last 6 year bull run are as stupid as the people buying houses because real estate always goes up.

The bull is showing signs of running out of steam and all over the world markets are displaying signs of market-crushing deflation. It’s no more a sure thing for the next 2 years than housing is.

The 60/40 balanced portfolio I have mentioned here is up 4% after the first three months of 2015. Ahead of schedule. Obviously you do not have such a portfolio in place. — Garth

#174 Smoking Man's Old Man on 03.31.15 at 12:44 am

Marriage is like being involved in the ultimate hostage taking (complete with ultimatums and threats on non compliance). I feel really sorry for all the “Johns” out there.

My personal hostage taking ended 5 years ago and I’ve never felt better or freer. And as an added bonus you get your sanity back… :)

#175 millenial1982 on 03.31.15 at 12:44 am

Trick question here, good one Garth. Here’s the best answer for your particular situation. Key word situation.

To save your marriage and keep both of you happy here’s option #2. Agree to buy the home but one you can afford to pay outright between your cash and liquidated investments. Once that’s done negotiate a new mortgage or secured line of credit to invest the full amount into a balanced investment portfolio. Bingo! She gets the house, you get your investments plus your little man crush on the big house is satisfied as a bonus. Main point you now get a tax deductible mortgage and maintain diversification. Hire a fee based financial planner as well. Clearly you’re not ready to handle this on your own but kudos for seeking Garth’s advice. This strategy should work out well for both of your interests.

#176 Ben Yachtrite on 03.31.15 at 12:44 am

I can see a scenario where the hard landing occurs everywhere except Vancouver. Let’s face it. It’s not really Canada here in lotus land. Heck Tim Hortons was very late in arriving. The market here in YVR will be insulated by the Yuan and its foreign investment. YVR is intertwined with the wealthiest economy on the planet and it shows in record real estate prices and sales. Housing sales and development is THROUGH THE ROOF here and nothing seems to be slowing it down AT ALL.
The question is what does that mean for a nation’s sovereignty when its economy isn’t truly affected by local real world wealth? The true wealth here originates off-shore.

#177 4 AM Sunrise on 03.31.15 at 12:49 am

#38 Cici on 03.30.15 at 7:02 pm

That kind of positive reinforcement is poison. It’s sort of like how people who start doing drugs all of a sudden find themselves with lots of good-time “friends” in the form of fellow addicts and dealers.

It also reminds me of hAteRz who only praise you when you make the same bad choices that they made.

Good luck with your significant other.

#178 Dave Logan on 03.31.15 at 12:52 am

http://www.cbc.ca/news/canada/british-columbia/foreign-ownership-on-vancouver-real-estate-needs-creative-policies-david-mulroney-1.3014710

Garth – the above article is a good one. I understand that you (and many others) don’t believe that foreign investors have had any appreciable impact on Vancouver real estate prices; however, other intelligent, educated, experienced individuals disagree with your point of view. I think that it is important to have a healthy debate about the issue without it being suggested that those who disagree with wealthy offshore investors buying some of Vancouver’s housing stock unimpeded are racists.

#179 Jack on 03.31.15 at 12:58 am

More fuel to the HAM debate

http://www.vancouversun.com/touch/story.html?id=10932787

#180 Mark on 03.31.15 at 12:59 am

“$440K liquid assets plus a house – seems pretty high to me?? Throw in a modest house and you’re at $700 to $800K. And they must mean Canadian households over 65 or it just gets plain ridiculous.”

It might seem “plain ridiculous”, but all that debt that the young have taken on has to be financed by someone. Remember that every dollar in mortgage debt in Canada is actually an asset in the hands of the owners of the debt. Which, in many cases, the owners are those seniors.

As housing continues to deflate and the economy goes into a deeper deflation, expect the seniors to become even wealthier relative to the young. Eventually inflation will happen, significantly damaging the portfolios held by the elderly (ie: significantly overweighted fixed income) but it will take a lot of deflation before it does. I figure a good 5-10 years of ZIRP will be required before meaningful inflation sets in.

#181 Underhoused on 03.31.15 at 1:02 am

Dear John,

You could try to persuade your wife — and yourself –via Garth’s wonderful Rule of 90.

Houses are nice when they are affordable. But why you’d want to sink 1 mill down on a 1.5 mill house and thus lose so much liquid, potentially income-earning wealth is beyond me. You’re neither young nor rich enough to have tying that much wealth up in a house be in your best interest.

Plus, if the market crashes (i.e., takes a ~30% dive) and you had to sell, you’d walk away with little or no cash. Pretty sad outcome when you could invest your 1 mill in a balanced portfolio earning 7%, rent a multimillion dollar house for peanuts (like Garth), and have a great life.

Renting might also help eliminate the risk of basement dwelling children — the “uncertainty,” etc. The biggest problem with basement dwelling kids is that they don’t learn financial self-sufficiency: kids become adults when they are forced to live on what they make, which entails both finding a job and living on its proceeds.

#182 betamax on 03.31.15 at 1:07 am

What’s the most John will lose on the house? 30%? 40%?

A divorce is 50% off now and less income to come.

Tension is high? Buy the house, make her happy. She has a right to her expectations and ideas about what will make her happy, regardless of whether it’s the best decision financially. At the end of the day, you both should be enjoying your life, so don’t let a house or lack of one destroy your happiness. Happy wife, happy life.

If you take a big hit later, at least you can say “I told you so” and bring it up any other time she disagrees about finances.

#183 4 AM Sunrise on 03.31.15 at 1:12 am

#79 Heisenberg on 03.30.15 at 7:48 pm

I agree that “buy outright” is one option for them if they don’t plan to sell, ever. The problem is that John is contemplating a place that requires a $1 million down payment AND a $400-500k mortgage (eeek!!!) So once again the majority of their net worth will be a house in a market that everybody is calling a “bubble”.

#184 Leo Trollstoy on 03.31.15 at 1:13 am

I feel sorry for people with partners afflicted with house lust affluenza. Sucks to be them.

#185 FormerSaskie on 03.31.15 at 1:19 am

Personally I would love to have the house to show off…….

John you are beyond sad (or else a troll). A house is shelter, it is not a measure of your value as a human being.

#186 ozy - GOLDEN ADVICE HRE on 03.31.15 at 1:34 am

advice? Myself, I would not hesitate to get a super young new wife and buy her a new 500000 house

I know I’ll die wealthily and happy ;) (5 decades down the road, of course)

#187 Stomper on 03.31.15 at 1:46 am

Same old story here in Australia.

Both the economy and the house horny wife.

The former turning to sh** while the later lusts.

I’ve got until 2017 until one pops!

#188 Financial Planner Dude on 03.31.15 at 1:55 am

First off he should be congratulated for doing such a good job of wealth building, 140K in the RESP, 400K in the RSP.

Here’s the approach I’d suggest, obviously in a comment field I can’t go into much detail.

Wife looks for house
Husband “retires”
Wife continues to work and carries the load (that may change her mind)
They use the Garth strategy to slowly drawn down the taxable capital

Husband is happy, no more job pressure, wife is happy she has her house

Damm I’m good!

#189 Tom from Mississauga on 03.31.15 at 2:16 am

Take her for a month to Europe.

#190 jane 24 on 03.31.15 at 2:21 am

You’re right there Garth.

Conversations with Canadian friends and family tend to be based on financial perceptions such as:

1. My house is worth a million therefore I am a millionaire. The huge mortgage on it, is somehow an asset.

2. My line of credit against that house, likewise is not debt either, it is a cost of ownership like utilities.

Whereas I am kicking myself for not totally collapsing my Canadian RRSPs and taking the 25% non-resident withholding tax two years ago. I would have got it back in currency exchange via the collapsing Canadian dollar.
Isn’t hindsight great.

As for the nearly retired couple in today’s blog that want to take on another half million in debt, they deserve everything they get. A fool and his money are soon parted. That saying has been true for hundreds of years. At that age with kids leaving you – downsize not upsize.

At that age we sold our big 4 bed family home and brought a bungalow. Friends were aghast as we dumped lifelong possessions to fit into the new smaller spaces. They are now envious of our many trips and tiny upkeep bills.

You have to make the correct choices in life depending on your life stage. Your needs change as you go through life. Don’t buy a monster home now, just buy what you need.

#191 Ulsterman on 03.31.15 at 2:41 am

I can easily see how this guy has $1m in a savings account. He sold his house and took his $1m of equity and put it there “just until I can decide what to do with it.” I’m guessing that like the vast majority of Canadians he’s not financially sophisticated – he lucked out making all this equity. In a non-bubble economy he’d never have seen more than a few hundred grand in equity. He sits there paralyzed with indecision. The stock market has gone up a fair bit so he’s afraid of buying at the top. The only other investment option he knows is housing, and well, didn’t he just GET OUT of that? The only option is to do nothing. One week turns into a month, and before you know it it’s tax time again and he’s reporting his interest income to TurboTax and kicking himself for procrastinating.

#192 Turtle on 03.31.15 at 3:10 am

Hear me out, John!

You guys have a strong marriage, strong family. Don’t divorce your wife. RESP for kids is great! RRSP and TFSA to buy groceries (not cat food) is great too! Give your wife a credit for it. She deserved it.

About $1 million. Did you plan to stab her in a back when she helped you to sell the house? Did you plan to refuse to buy the better one? Of course not… You’ve been spending too much time on this blog and decided to change your mind. Not good.

Here is what you should do to fix it.

1. Trust your wife with $1mil for the house. She is smart if you are still around.

2. Take control of $400k (RRSP and TFSA). She is smart and will give it to you. You will invest it wisely and double soon.

Don’t break the family over the house.
Everybody needs peace now.

#193 Pedant-Sniffer General on 03.31.15 at 3:19 am

My advice to your correspondent is that he REALLY meant “the tidal wave of emotions IS blinding”. Not ARE. Only one tidal wave, see?

As for the house thing, shoot the missus.

Simples :-)

#194 4 AM Sunrise on 03.31.15 at 4:14 am

Dear John,

Let’s talk about death.

You and your wife are in your early 50’s and I presume you are both in good health. Congratulations. From what I’ve seen, the Grim Reaper starts stalking people at about age 55…even those in good health. You just never know these days. My eyes still well up when I think about ol’ F (J. Flaherty) who joined the great Cabinet in the sky shortly after he retired. What a ripoff after a lifetime of hard work!

So keeping in mind that the Reaper may knock on your door anywhere from 5 to 50 years from now (okay, let’s pretend that it’s more like 5 to 25), I ask you, and especially your wife, the following:

What will be your fondest memory? The people oohing and ahhing at your house that one night or the love you share between the two of you and your children?

Like others have said, you’re in a fortunate position to be able to rent as high-end as you want. Your potential grandchildren (fingers crossed) sure won’t know the difference – to them, it’s “grandma ‘n’ grandpa’s awesome place with the pool.”

If you’re still renting at this point, will you genuinely regret not buying? Do you have anything else on your bucket list besides “buy nice house to show off”?

And if both of you join the great drum circle in the sky before the bigger-better house is paid off, do you want to stick your children with the stress of selling your place, especially if it’s in a weak market?

Is renting really a “waste of money” if you can’t take it with you when you go? Your children’s inheritance is much safer invested, rather than locked up in an asset that is generally declining. Yes, I said “locked up” – in the mid 90’s, I saw long, pukey faces on speculators who bought condos in Whistler. I sure hope they were able to unload in the run-up to 2010.

And I think it might be prudent to have extra cash on hand just in case. I’m reminded of a university friend of a friend who was diagnosed with diabetes in his early 20’s. Healthy guy; nobody saw it coming. Although insurance did cover a lot of his costs, he was still bitter that his disease burned through money that he had set aside for an iPod. Don’t you want to be able to help out your children if they’re in a jam? Or if they’re brilliant entrepreneurs, don’t you want to be the angel investor who gets that started?

(Just please don’t be those parents who give their children a monster down payment so they can buy a particle board shack. Thanks.)

How long do you plan on working in order to feed that mortgage? If you’re salaried employees, are your jobs safe?

Taking out a mortgage at this stage of your life feels so risky. Maybe run through some worst-case scenarios with your wife. Good luck.

#195 Nick Roerich on 03.31.15 at 7:21 am

Here’s a very interesting development in the states:

Homeowners Avoid Foreclosure By Running Out 5-Year Clock

http://stateofthenation2012.com/?p=13405

#196 Tkid on 03.31.15 at 8:32 am

John, you and the missus are too old to be carrying mtg debt. Your instinct to be debt free and building savings is the correct one.

Also, you and her are not guaranteed employment – the economy is diving and jobs will go with it. If you, or She, lose your job it is nearly impossible to get another if you are over 50.

Your wife’s desire for a bigger home and another 25 year amortization is not rational. I do not see how she can be brought around. I think divorce is your only option.

Take the $700,000 you have earnt, and talk to Garth about investments. You are in a position to weather all storms – job loss, real estate crash, even ill health – and your wife is irrationally determined to throw it all away.

In cases like this all you can do is save yourself.

#197 Polozified on 03.31.15 at 8:40 am

I’m in agreement with the blog dogs who say “rent a bigger house and convince the wife to straight-up lie to friends and family”.

People who judge you by your ownership status deserve to be lied to anyway ([email protected] do it all the time!)

#198 OMG on 03.31.15 at 9:07 am

#122 Smoking Man on 03.30.15 at 9:07 pm
All you pathetic patrons of the comment section, you all think the holly grail of life is money, ha, its fake feeling,. You need to find someone that loves you and you get to love em back.
Then your set.. Everyone, everything else are instermenrs of fun.
Take it from a drunk who’s got 30 or 40 million..I think..not really sure.
You all behave with the goal of pleasing some master..your master should only be you..and the one trying to shut down yourself destruction… Its sweet on her part…
But really, I hate this world, if I left it today, could care less. Another adventure.
But god damb, I wish there was a god, i would love to give the prick cut eye as he trys to banish me to hell.
Rules are hell, compliance is hell.
A free spirt that flicks cigarette butts at his fence all winter then hires a handy man to pick em up…
Gives life meaning ..
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Ok Smoking Man I can agree with the find someone to love statement. But your BS when you are drinking is just out there. Just remember buddy we read your drivel and have memories, something you don’t have. Just last week you posted about the wife giving you shit for flicking cigarette butts on your snowbank and she made you pick them up! So I guess your the handyman that makes 30-40 million dollars?

#199 Hoser on 03.31.15 at 9:18 am

Both John and his wife want a big house to ‘show off’.
My advice to them both is get bent.

#200 NewToETFs on 03.31.15 at 9:21 am

Hire a financial advisor.

#201 cramar on 03.31.15 at 9:25 am

More than half (53%) of working households in Canada are saving nothing. Zip. The same people assessed their level of discipline when it comes to money as ‘somewhat or very strong.’

——-

This is truly shocking. Over and over again it has been expressed on this blog the tongue-in-cheek phrase, “It’s different in Canada!”

The above survey results prove that. It really is different here. Canadians have to be the dumbest, most myopic, most self-deluded nation in the G20. It really IS different here! When the fire serious starts burning, its going to be a charred and burnt land.

#202 Sheane Wallace on 03.31.15 at 9:58 am

https://ca.finance.yahoo.com/news/canadas-gross-domestic-product-fell-0-1-per-124437865.html

———————
The gains were partly offset by a drop in manufacturing and, to a lesser extent, construction.
———————–

Note that this decline is despite the understatement of inflation, loonie dove significantly driving increased costs of imports.

Cheaper dollar obviously is not helping the manufacturers.

And when construction ceases….

The thingy is starting to hit the fan, hence the smell.

#203 Retired Boomer - WI on 03.31.15 at 10:01 am

#173 PM

No, we do not KNOW where the markets, or RE are going in the future.
I have that 60/40% portfolio. It is up nicely for the first quarter of 2015. How has RE done for you in the first quarter? I live in my house, I have invested elsewhere.

Those investments today PAY for living in that house, and along with my government benefits keep me in the manner I have grown to really like!

Yeah, it took sacrifices, and modest living to get here. It is much more fun NOW to do what I want, when I want, and not have to sweat the little crap like “can we afford it?”

I like it, and it only took 25 years of doing it right to get here. 40 join in, there is still time, you CAN do it.

#204 oncebitten on 03.31.15 at 10:14 am

How about putting the mortgage into their rrsp?

#205 not me on 03.31.15 at 10:14 am

http://www.prnewswire.com/news-releases/bdo-poll-half-of-canadians-admit-to-lying-about-finances-294292281.html

#206 Moller on 03.31.15 at 10:22 am

Ghost towns in British Columbia

http://www.torontosun.com/2015/03/24/abandoned-and-forgotten-places-across-canada

#207 Grantmi on 03.31.15 at 10:25 am

#3 Squirrel meat on 03.30.15 at 6:16 pm

Is this like in Playboy where you make the letters up!?

I wish. — Garth

… and it wasn’t Playboy… it was Penthouse!

#208 Daisy Mae on 03.31.15 at 10:32 am

#26 Mr Obvious: “Was it only six years ago America was ‘falling off a cliff’ pulling the rest of the world along with her while Canada was proclaimed the single remaining bastion of prudent economic management?”

**********************
A misconception. Our government has never been a ‘bastion of prudent economic management’. Now Canadians are forced to finally acknowledge that we were also ‘falling off a cliff’, albeit a few short years later.

#209 Rainclouds on 03.31.15 at 10:43 am

#179 Jack

1:Barbara Yaffe is a RE Shill.
2:Vancouver Sun is a fish wrapper supported by RE Industry advert $
3: Concord Pacific is an Asian Development Company that has been developing land in BC for oh 30 years

More “news” from nowhere

#210 Daisy Mae on 03.31.15 at 10:45 am

#33 Babblemaster: “Unfortunately, it is so true that most men lead lives of quiet desperation.”

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

LOL Whata bunch of male chauvinists….

#211 Daisy Mae on 03.31.15 at 10:51 am

#35 cmj: “At least a financial planner would project where you would be in 10-15 years with the different scenarios as you approach retirement.”

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

This makes a wee bit more sense that advice to “Get a divorce!”

#212 Godth on 03.31.15 at 11:16 am

Steve Keen: The Deliberate Blindness Of Our Central Planners
http://www.peakprosperity.com/podcast/92208/steve-keen-deliberate-blindness-our-central-planners

#213 Van der walt on 03.31.15 at 11:21 am

Lower mainland craziness is not that crazy. If you take out the houses sold in the center of lower mainland the stats will show a clear decline. Look at surrey, maple ridge coquitlam and condos and th stay longer on the market and get price reduction, most of them selling for under 5-10pct under asking….

#214 cowtown cowboy on 03.31.15 at 11:33 am

Any particular reason why you didn’t publish my post?

Disrespectful. — Garth

#215 The American on 03.31.15 at 11:44 am

At #26: Mr. Obvious, Canada was NEVER a “single remaining bastion of prudent economic management.” Its just that your government and central banking system loved to make this claim. If they were so sound, why did they promote emergency rates, only to keep them there until, well to this very day? Also, why did your government, central bank, and banks in Canada hide the dirtiest little secret of all? Your country took a MASSIVE bailout at the same time the American banks did. Only your country took the bailout not only on your citizens’ backs, but on the American tax payers’ backs as well. Oh, and per capita, the Canadian banking bailout was significantly greater than the American one. Your country internally referred to it as “liquidity support” only because the term “bail out” would be an admission that things in Canada have been totally f*cked up for a long time. Prudent? I think not? Liars of epic proportions? Yes.

https://www.youtube.com/watch?v=9K_N0uOXkQA

http://www.cbc.ca/news/business/banks-got-114b-from-governments-during-recession-1.1145997

#216 chapter 9 on 03.31.15 at 11:48 am

John,This is a once in a lifetime opportunity for financial freedom. This is it, you have won! But you are at risk of throwing it all away. Would you go to Vegas and put a million on one number playing roulette?? You wife is literally wanting to gamble you life and future away over a pile of bricks. Don’t let it slip through your fingers cause it will haunt you every day for the rest of your life!!!

#217 4 AM Sunrise on 03.31.15 at 11:48 am

#207 Grantmi on 03.31.15 at 10:25 am

We read this blog for the pictures.

#218 Ponzius Pilate on 03.31.15 at 11:54 am

#87 Victoria Real Estate Update on 03.30.15 at 7:58 pm
For those of you who might be interested, scroll down to see one of my regular updates. If it isn’t posted tonight you will find it tomorrow.
Cheers!

Was that a commercial for a blog comment? You’ve lost it. — Garth
———————
Garth,
How can you resist. At 100 bucks per ad, you could retire and do this as a hobby.

#219 Realtor007 on 03.31.15 at 12:04 pm

Buy the house, John, they’re not making any more land, 300k immigrants a year, HAM everywhere. So many reasons to give you but my fingers are getting tired of typing.

#220 Mark on 03.31.15 at 12:07 pm

“Lower mainland craziness is not that crazy. If you take out the houses sold in the center of lower mainland the stats will show a clear decline. Look at surrey, maple ridge coquitlam and condos and th stay longer on the market and get price reduction, most of them selling for under 5-10pct under asking….”

Indeed, this shift in what is actually selling is known as the “sales mix”. And evidence is strong that the same has been occurring in Toronto and Calgary for the past 2 years as well (in hindsight, “F”s Budget 2013 and its changes to CMHC subprime mortgage insurance will be cited as the ‘trigger’ that brought down Canadian housing!). I personally spent a lot of time in California circa 2005-2008, and the same unfolded there as well.

Meanwhile, in the thick of it, all the Realtors could do is obfuscate any reasoned explanation of what actually was going on, and engage in as much propaganda as possible. Sounds a bit familiar?

#221 Turtle on 03.31.15 at 12:07 pm

John,

If buying a house is a deal breaker for you, than try this:

Make a calendar from now till the (imaginary) last day of your life. Mark down the day when you are going to retire, mark down the day when your kids are on their own, mark down everything… the more details the better.

Allocate certain amount of money to finance every day/week/month/year that you have on a calendar.

Peacefully mark your wife’s projections the same way.

Start tweaking your future plans together until you have understanding of what each of you really want in life. Start from the end and work your way backwards to the present day. And you will find a win-win solution.

#222 Grantmi on 03.31.15 at 12:09 pm

Holy Snickies……

MLS sales of single-family homes in Fort McMurray and its surrounding area have plunged this year. In February, sales were down by a whopping 66% from a year ago, at just 48 units. That followed an annual decline of 53.19% in January.

http://bit.ly/1DmqCQz

#223 Ponzius Pilate on 03.31.15 at 12:09 pm

Dear John:
You kinda lost me at “My name is John ………”

#224 cowtown cowboy on 03.31.15 at 12:16 pm

#214 cowtown cowboy on 03.31.15 at 11:33 am

Any particular reason why you didn’t publish my post?

Disrespectful. — Garth

Disrespectful??? To who? You? Or the so-called 50-something professionals making 70k/yr that have somehow managed to accumulate over $1.5million….

All I’m saying is that these posts stretch the limits of credibility.

And enough of the Cowtown bashing, things are just fine here, we’ve been through far worse. Worry more about all the Newfies, Bluenosers and Acadians who no longer have a viable means of supporting themselves.

If ever there was a city in the depths of delusion, it is Toronto. I can’t wait to head out there this summer and warn everyone I see about the impending real estate collapse!

#225 Mr. Pink on 03.31.15 at 12:18 pm

A million dollars in the bank, cash flow coming in, no debt and freedom. Dream scenario that could turn into a boat anchor of a nightmare.

Keep your money John. Final answer.

#226 wishful_thinker on 03.31.15 at 12:31 pm

making financial decisions with your heart usually leads to heartbreak

#227 Van Doom on 03.31.15 at 12:36 pm

http://www.torontosun.com/2015/03/31/york-cop-violated-g20-protesters-rights-court-rules

A win against our fascist govt. But I’m sure Harper will plug this hole somehow.

#228 Ray Vasquez on 03.31.15 at 12:43 pm

Is what they want. My uncle and aunt retired in 2009 and now with pension, interest, RRIF income, dividend income, they are able to live quite comfortable and still save, invest $5,000 a month.

However, this is bad for the economy according to the Canadian Media and Society.They are such hypocrites.

They want people to be in debt, spend, spend, spend, spend and everything will be always fine, not really!

#229 Bottoms_Up on 03.31.15 at 1:03 pm

John and wife:

a $500,000 mortgage is a monumental amount of debt to repay for a 30-something couple, let alone a 50-something couple.

studies have shown that in the face of convincing evidence, people with deep held beliefs only become more resolved in those beliefs.

Thus, my advice to you is this: John, agree that you and your wife can buy that home, BUT, you must wait 12 months, AND if that house (or similar houses) you are looking at buying now cost less in 12 months, you change your strategy (ie, you don’t want to catch a falling knife) and you re-evaluate your financial position and living desires. But be sure to track asking and sold prices on a monthly basis.

#230 Bottoms_Up on 03.31.15 at 1:06 pm

#224 cowtown cowboy on 03.31.15 at 12:16 p
——————————————————–
You do realize that that couple would have likely bought a SFH in Toronto in the 1990’s (or perhaps earlier), and therefore would have had a ton of equity (likely a million bucks) in their paid-off house? That story is fairly easy to believe.

#231 Bottoms_Up on 03.31.15 at 1:24 pm

I also don’t get why people are so quick to the ‘D’ word (divorce). No where in John’s email does he mention divorce, the closest thing to that is he says there is ‘huge tension’.

We are talking about a family of 4, likely the kids are both theirs, these people have been together for decades. Why would/should divorce be an option?

It’s ridiculous speculation at this point, and goes to show why we have such a high divorce rate in this country, many people are so quick to look for the easy way out.

#232 Schleprock on 03.31.15 at 1:32 pm

If she wants to own maybe she would like to x the continent and into the STATES for this pricey home
https://www.redfin.com/CA/San-Francisco/1644-Great-Hwy-94122/home/635970

#233 he on 03.31.15 at 1:33 pm

The dominos are starting to fall…

http://business.financialpost.com/news/energy/oilsands-producer-laricina-energy-ltd-granted-creditor-protection/

#234 The economy stimulators on 03.31.15 at 1:39 pm

More than half (53%) of working households in Canada are saving nothing. Zip.

———-

They stimulate the economy, keep your jobs alive.

If everybody was a frugal saver and savvy investor the demand side of the economy would hurt, investment vehicles would have higher cost…

Just look at the suddenly demand-dead Alberta.

You should praise the spenders every day, they subsidize your saver lifestyle. :)

#235 gut check on 03.31.15 at 1:44 pm

#210 Daisy Mae on 03.31.15 at 10:45 am
#33 Babblemaster: “Unfortunately, it is so true that most men lead lives of quiet desperation.”

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

LOL Whata bunch of male chauvinists…

———————————————————

I know, and then they have the audacity to ask why more women don’t participate in blogs like these, or finance in general. They are either stupid or know exactly what they are doing. Either way it isn’t pretty.

#236 From cycles to cyles on 03.31.15 at 1:44 pm

Everything is cycle.

You just need to find the right cycle at the right time to jump on.

Otherwise you can live the boring 40/60 slow but certain way to wealth, you wish you had when it still really mattered the most.

#237 Ponzius Pilatus on 03.31.15 at 1:46 pm

#228
My uncle and aunt retired in 2009 and now with pension, interest, RRIF income, dividend income, they are able to live quite comfortable and still save, invest $5,000 a month.
————–
So they worked and saved all their lives. And now they’re still saving.
Is it not time to enjoy the money?

#238 pinstripe on 03.31.15 at 1:49 pm

IMO, john and his wife need to ignore the misinformation and do what their own analysis dictate. interestingly their answer will be correct for them.

for everyone yelling buy, there is someone yelling sell. there is too much manipulation in the market.

I have been buying and selling sincethe 1950s. many times I have been told that my decision was very stupid and yet it turned out ok for me. I used FSBO for all my buy and selling with great success, and yet I am being told that is a STUPID thing to do.

nowadays it is difficult to get any truth from anyone. In alberta we are witnessing the biggest bunch of liars amongst the elected officials. they ask for feedback but continue on their own path. Seniors are getting clobbered and no one cares. everyone is covering their own butts.

#239 Mark on 03.31.15 at 1:56 pm

Canadian labour costs cratering:

http://www.cbc.ca/news/business/corporate-profit-margins-at-27-year-high-and-likely-to-stay-there-1.3016324

“At the same time, labour costs are softening. In 2012, Canadian labour costs rose by 3.5 per cent, but in the past year, the average increase is one per cent.

“No less than one-third of Canadian GDP last year was produced by sectors with falling labour unit costs,” said Tal.

So much for the employed getting wage increases to service the crazy debts they’ve taken on in the past decade. That ship has sailed and is long gone.

#240 Victoria Real Estate Update on 03.31.15 at 2:06 pm

“Was that a commercial for a blog comment? You’ve lost it.” — Garth

It was a heads-up for a later comment. I wasn’t trying to sell it so it wasn’t a commercial. Although that idea might work.

#241 No brakes on 03.31.15 at 2:09 pm

Google vancity springboard. If that is not subprime i don’t know what else is. In the middle of the vancouver house bonanza… ;-)

#242 Mak the investor on 03.31.15 at 2:11 pm

Here is a glimpse of the future:

Russia withdraws out of Ukraine.
Oil goes back to $100
The party continues in Canada

When?? That’s the million $ question.

So for now rent and enjoy being debt free.

#243 jess on 03.31.15 at 2:14 pm

“Ethical” Underwriters

…Hunt finally resigned, blew the whistle to the SEC and the DOJ and filed a False Claims Act against Citi for defrauding the FHA. Her case, supported by internal documents and conversations with key Citi officers was so compelling that the Department of Justice filed a complaint and adopted her suit – and Citi promptly settled, admitting misconduct. DOJ’s complaint reveals these facts. read more

http://neweconomicperspectives.org/2015/03/meet-citis-ethical-underwriters-that-tried-to-save-it-and-america-sherry-hunt.html#more-9277

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

May 05, 2010|Michael Hiltzik
Bankers trot out tired, old arguments against financial overhaul
articles.latimes.com/2010/may/05/business/la-fi-hiltzik-20100505
May 5, 2010 – Opponents of the bill before Congress sound like those who tried to derail the … the same arguments in 1933 and 1934, when Congress enacted a … of the latest reform proposal, with statements in 1934 by Richard Whitney, …

Richard Whitney (August 1, 1888 – December 5, 1974) was an American financier, president of the New York Stock Exchange from 1930 to 1935. He was later convicted of embezzlement and imprisoned – see wiki
http://articles.latimes.com/2010/may/05/business/la-fi-hiltzik-20100505

How a business “captures” its regulator, in living color
Read more: http://www.rollingstone.com/politics/news/regulatory-capture-captured-on-video-20150325#ixzz3Vz8HZgiS
http://www.latimes.com/business/hiltzik/la-fi-mh-bankers-are-complaining-20150320-column.html#page=1
http://www.nakedcapitalism.com/2014/05/sec-official-describes-widespread-lawbreaking-material-weakness-controls-private-equity-industry.html
http://www.sec.gov/News/Speech/Detail/Speech/1370541735361#.VRrda45Tvwq

#244 Yelena on 03.31.15 at 2:24 pm

I actually do not see people having trouble selling houses (it seem to be even easier to sell a downtown condo) here in Calgary. I Am also surrounded by people who are planning to buy soon. Prices: well, great – if one is selling. So far: “a mountain shook – the mouse was born”. Personally, prices would have to drop 30% before I would even consider buying a property here.

#245 Van Doom on 03.31.15 at 2:27 pm

#242 Mak the investor on 03.31.15 at 2:11 pm
Here is a glimpse of the future:

Russia withdraws out of Ukraine.
Oil goes back to $100
The party continues in Canada

When?? That’s the million $ question.

So for now rent and enjoy being debt free.

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

Parallel universe?

#246 Gimjack Johnny on 03.31.15 at 2:29 pm

Bwahahahahahaa…The Poloz Plan has failed. Gov Poloz has a vision for Canada…..back to the 1940’s…and he means to orchestrate that by crushing the expectations of all Canadians.

But….reality is fighting back. His ‘push to increase manufacturing by crashing the dollar’…is a complete misdirection. There is no manufacturing…as pointed out by a bright spark on BNN this morning to the deputy economist..BOC.

The slap caused the BOC rep to kneejerk and state that the plan now was to ‘tax that reserve’…apparently to bring the numbers under the manufacturing numbers so that the Poloz Plan doesn’t look so bad.

1) Energy and production up

2) Manufacturing down.

#247 Sheane Wallace on 03.31.15 at 2:56 pm

House prices in certain areas in Toronto and Vancouver have increased 3.5-4.5 times in the last 15 years.

Correction over 60 % is overdue. Unless they kill the dollarette – I expect 35-40 cents range.
Of course this will not revive the manufacturing which is gone forever but instead will result in nasty increase of imported food and goods.

How does 150 % increase in imported food prices sound like?

#248 Sheane Wallace on 03.31.15 at 2:57 pm

#246 Gimjack Johnny

exactly, the Poloz id.ot lives in parallel universe.

#249 Blacksheep on 03.31.15 at 2:59 pm

American # 215,

“Your country took a MASSIVE bailout at the same time the American banks did. Only your country took the bailout not only on your citizens’ backs, but on the American tax payers’ backs as well.”
—————————————————
I think one needs to reconsider the use of the word ‘country’. My country, your country, what does it really mean? Anyone still wondering why the gov. has extended their (soon be expanded) middle eastern offensive? Or why an oppressive bill like C-51, is being rammed through. Come now, this type of behaviour doesn’t seem very canadian?

Sovereign labels serve to keep the Cattle distracted with the ‘us VS them’ paradigm. Whether it be religion, the olympics, political circuses or straight up asset acquisition (wars), all the system does is wave a flag and like P-lov’s dog, the masses chant, we’re number one!

Patriotism….the affliction that stupefies.

The reality is, very large corporations helmed by a relatively small number of men guide the socioeconomic fate of the globe.

Such is life and life is short.

I just wish they would quit pretending our cultural identities are so damn precious and just drop the friggen borders in North America already.

Vancouver may be # one on the list, if one is land locked inside the great white north, but it doesn’t even break the top twenty when compared to US Options.

#250 boonerator on 03.31.15 at 3:09 pm

Invest that million in a balanced portfolio and get way more than 20K per year.

Use that extra income to rent a castle, i.e. the most expensive mansion in the area. It sounds like the wife is status obsessed and he could sell the idea by explaining that they could rent a much better show home than they could buy, a much flashier house to impress her friends.

#251 devore on 03.31.15 at 3:20 pm

#15 Peter

Ah, vanity…One of the Devil’s favorites.

It ticks off a good portion of the 7 deadly sins, which whether you’re religious or not, is a pretty good moral framework.

#252 Mark on 03.31.15 at 3:23 pm

“But….reality is fighting back. His ‘push to increase manufacturing by crashing the dollar’…is a complete misdirection”

What makes you think Poloz has had anything to do with the recent weakness, mostly speculatively driven, of the Canadian dollar?

You do realize that Canada is at best a smushed bug on the windshield of global finance, right? Today the speculators are all lined up (rather irrationally I might add) against the CAD$ In the not so distant future, they won’t be able to buy enough of them to not only repay their short positions, but also take advantage of Canadian deflation.

Manufacturing isn’t coming back to Canada because nobody has any confidence that the CAD$ weakness is anything but temporary. Fundamentals support a dramatically higher CAD$, that’s for sure

#253 devore on 03.31.15 at 3:23 pm

These people are crazy. They’re already living the dream, and she wants to throw that away? Don’t buy, and retire early, how’s that for a plan?

#254 Mister Obvious on 03.31.15 at 3:25 pm

#215 The American

Thanks for your comment and the links provided. My comment was certainly somewhat facetious. I hoped it might elicit a response such as yours.

Perhaps it comes down only to semantics. Is there any essential difference between a ‘bail-out’ and a ‘back stop’? The American doesn’t think so. I’m not really in any position to argue the point.

Any blog dogs here care to dispute The American or further this discussion?

#255 Ralph Cramdown on 03.31.15 at 3:30 pm

#224 cowtown cowboy — “Disrespectful??? To who? You? Or the so-called 50-something professionals making 70k/yr that have somehow managed to accumulate over $1.5million…. All I’m saying is that these posts stretch the limits of credibility.”

The posts aren’t meant to be representative. Just as the Agony Aunt isn’t going to publish “we love each other, he’s perfect, he doesn’t cheat on me, we’ve got enough money and our families are just fine with us as a couple,” Garth isn’t going to publish letters from people with no money or assets for which nothing can be done, or from good money managers with diversified assets and on track to a successful retirement. He showcases the rich (or credit-worthy) and stupid. If you’ve got no money, try blogs like “Gimme Back My 5 Bucks,” “Mr. Money Moustache” or the jar lady.

“And enough of the Cowtown bashing, things are just fine here, we’ve been through far worse.”

Evidence doesn’t support that.

– A government that had been through worse would have held back on construction in the boom, taxed and saved, and been ready with infrastructure spending in the bust.

– Junior oils whose managers had been through worse would have been strengthening their balance sheets by raising capital when their share prices were high, not diluting the hell out of shareholders AFTER things had cratered, in a desperate attempt to stave off sale, BK or restructuring, and save their own jobs.

– Senior producers who’d been through it before would have kept enough in escrow to bus their contractors’ labourers back to civilization in the event the subs went BK, to avoid looking like the turds with name recognition who left their labour to hitchhike back to Ft. Mac.

Remember the Alberta stockbroker/decorator couple caught long two houses when they could only afford one, and barely? If they’d been through it before they wouldn’t have done that. If her employer (luxury homebuilder in business only a few years) had been through it before, he wouldn’t have this many spec homes to sell:
http://www.newwestluxuryhomes.com/luxury-custom-homes-for-sale-calgary/
If that builder’s banker had been through it before, less credit would have been extended, avoiding what appears to me to be a likely bankruptcy.

Sure, the province has been through it before, in theory. But as the place with the youngest population most likely to be from elsewhere (the inexperienced risk takers, in other words), Alberta is made up of lots of first timers. Sure there’s grizzled veterans who’ve been prudent this cycle (possibly because they were burned before), but there’s also the ones who went BK last time, and the ones who weren’t there last time. The latter group adds to the boom and the bust, making it worse even for the prudent ones.

Toronto? Hell yeah we’re delusional. There’s a theory here that the Western oil bust won’t affect us, even though supplying and financing the Western boom has been our stock in trade.

#256 pinstripe on 03.31.15 at 3:37 pm

I encourage the young people to think for themselves. That is the way I was brought up in my young years. the old folks that helped me were those who went through the depression, and there were many examples of success and failure jto witness. study history and learn the ropes and choose wisely. I swas always aware that those who said they knew a lot were those that lknew the least in the long term.

do not let someone else make the decisions for you.

#257 LTL_FTC on 03.31.15 at 3:44 pm

A lot of sexist bias showing thru here today. Consider a couple points:

Garth changes names to protect the unwitting, so maybe John is actually Joanne and it is the husband with the home-buying urge? All those ‘be a man’ comments then look pretty silly.

Second, while they’re both apparently professionals, maybe John brings in $40K and the spouse $100K – the letter doesn’t say. Again, those take charge and be a man comments begin to sound like pure sexism.

I bet Mr. Turner is thankful he doesn’t know a lot of the commenters on here personally.

#258 Capt. Obvious on 03.31.15 at 3:48 pm

#79
You can always live in a depreciated home that you own outright, but you can’t live in some “investment vehicle” that exists only in paper in some company that’s here today and gone tomorrow.

Unless your thesis is that one should invest in one company’s stock for one’s portfolio, your comment is illogical. People can and do generate enough income from an investment portfolio to pay for their accommodations.

#259 Nagraj on 03.31.15 at 4:25 pm

When, after tryin’ really hard, a Catholic missionary fails to convert the loin-clothed and grass-skirted heathens, he may be pardoned on grounds of INVINCIBLE IGNORANCE. Meaning: the the loin-clothed and grass-skirted heathens (who are always hootin’ n hollerin’ and obscenely dancin’ in circles) are TOO STUPID to be brought to Jesus.

An objective observer, however, might note that, actually, the half-naked merrymakers aren’t the least bit unintelligent; it’s just that they’re preferentially faithful to their own Great Dick In The Sky.

Mr. Turner, in this blog, preacheth to the choir (on the whole) but, obviously, his message has gloriously failed to have any commendable impact on the House Worshippers of Hogtown. (Despite his failure, Mr.Turner is nonetheless the object of intense, murderous hatred among the local shamans, medicine men, and witch doctors referred to locally known as “realtors”.)

To complicate matters, the island (known as Happy Dreamland of Fornicating Loons) is clearly sinking into the sea, thusly making the matter of saving savage souls ever more urgent.

The Pope sends this message to his loyal labourer via carrier pigeon: it starts with an old Italian proverb: “Garethus, It is better to say ‘Here he ran away’ than ‘Here he was killed’. Get your butt outa that place. Deus vult.”

#260 Alberta is FINISHED on 03.31.15 at 4:41 pm

Alberta is in for a HARD crash. They are so finished.
http://business.financialpost.com/news/energy/oilsands-producer-laricina-energy-ltd-granted-creditor-protection/

#261 Babblemaster on 03.31.15 at 4:41 pm

#235 gut check

I know, and then they have the audacity to ask why more women don’t participate in blogs like these, or finance in general. They are either stupid or know exactly what they are doing. Either way it isn’t pretty.

——————————————————

What isn’t petty is that John is struggling sooo hard to keep his pants on, and I think he’s losing the battle.

#262 Mark on 03.31.15 at 4:48 pm

“Senior producers who’d been through it before would have kept enough in escrow to bus their contractors’ labourers back to civilization in the event the subs went BK, to avoid looking like the turds with name recognition who left their labour to hitchhike back to Ft. Mac.”

Yeah I know, good lord, how much can it be to charter a few buses or even contract with Jazz or another charter airline to fly ’em to Edmonton? Maybe literally the cost of an hour or two’s worth of tradesmans’ time? Of course, maybe the plan is to make tradespeople so pissed off over time that they have ample cover to claim “no workers available”, and hence, bring in TFW’s.

#263 Alberta is FINISHED on 03.31.15 at 4:48 pm

Wow they are so finished.

http://business.financialpost.com/news/energy/credit-counselling-in-high-demand-in-alberta-as-oilpatch-downturn-hits-home/#__federated=1

#264 Squirrel meat on 03.31.15 at 5:21 pm

A wonderful way to break this rule of 90 stuff… just keep living. She’s like a negative bond now!

http://www.edmontonjournal.com/life/year+Lila+Lofts+nurtures+lifelong+love+affair+with+home/10934963/story.html

#265 jess on 03.31.15 at 5:24 pm

i wonder what the newly revised mission statements will say? If a company is guilty how does this work with the investor disputes?

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, March 31, 2015
Robert Bosch GmbH Agrees to Plead Guilty to Price Fixing and Bid Rigging on Automobile Parts Installed in U.S. Cars

Robert Bosch GmbH, the world’s largest independent parts supplier to the automotive industry, based in Gerlingen, Germany, has agreed to plead guilty and to pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the United States and elsewhere, the Department of Justice announced today….The charge against Bosch is the latest in the department’s on-going investigation into anticompetitive conduct in the automotive parts industry. Bosch is the third European-based company charged in this investigation.

Including Bosch, 34 companies and 29 executives have pleaded guilty or agreed to plead guilty in the division’s ongoing investigation into price fixing and bid rigging in the auto parts industry and have agreed to pay a total of nearly $2.5 billion in criminal fines.
http://www.justice.gov/opa/pr/robert-bosch-gmbh-agrees-plead-guilty-price-fixing-and-bid-rigging-automobile-parts-installed

#266 jess on 03.31.15 at 5:31 pm

Citibank Whistleblower Wins $31 Million

Sherry Hunt began working in the mortgage business in 1975 at the age of 18. Almost 30 years later, she joined Citigroup as a vice president in the mortgage division in 2004. Hunt was responsible for evaluating loans that Citibank was interested in purchasing from other lenders to see whether the risks met the bank’s standards. This includes reviewing and ensuring all paperwork is properly signed and completed, verifying the income of the borrower, and determining whether the appraisal of the property is realistic.

By 2006, Citibank was buying loans that had fake tax forms, appraisals, and missing signatures. Hunt did her job, and repeatedly reported these defects to her supervisors. Yet Citigroup’s only response was to demand that Hunt decrease the number of loans she was classifying as defective. Finally, in 2011 Hunt decided that Citi was clearly never going to fix the problem on its own, so she decided to file a whistleblower suit…..
http://www.whistleblowerrecovery.com/citibank.html

#267 Squirrel meat on 03.31.15 at 5:35 pm

#263 Alberta is FINISHED on 03.31.15 at 4:48 pm

Wow they are so finished.

http://business.financialpost.com/news/energy/credit-counselling-in-high-demand-in-alberta-as-oilpatch-downturn-hits-home/#__federated=1

—————————————————–
Do you hop up and down like a little kid when you spew this silly stuff everyday? What sort of dirtbag would ever relish the difficulties of others.

#268 Obvious Truth on 03.31.15 at 5:44 pm

#257 Who cares. Just replace the name or pronoun.

I think there was a gentleman who said the situation was reversed in his family. Same result.

You’re screwed Joanne.
Is that better.

Joanne migh have got some invites to Thailand or various South American lawless zones.

#269 gut check on 03.31.15 at 6:06 pm

#261 Babblemaster on 03.31.15 at 4:41 pm

What isn’t petty is that John is struggling sooo hard to keep his pants on, and I think he’s losing the battle.

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

see, there’s your trouble. trying to keep your pants ON all the time.

that was some free advice there, you should make use of it if you’re lucky enough to have a spouse.

#270 Arthur on 03.31.15 at 6:09 pm

#263 Alberta is FINISHED on 03.31.15 at 4:48 pm

Wow they are so finished.

http://business.financialpost.com/news/energy/credit-counselling-in-high-demand-in-alberta-as-oilpatch-downturn-hits-home/#__federated=1

—————————————————–
#263 Alberta is FINISHED on 03.31.15 at 4:48 pm
Do you hop up and down like a little kid when you spew this silly stuff everyday? What sort of dirtbag would ever relish the difficulties of others.

—————————————————–
I think it’s more vindicating than it malice. It’s genuinely hard to get told on a regular basis (by financial illiterates) that not owning a home is irresponsible or stupid.

#271 screwed on 03.31.15 at 6:51 pm

#265 Jess

Robert Bosch GmbH, the world’s largest independent parts supplier to the automotive industry, based in Gerlingen, Germany

****

Still a private company and justice.gov is a branch of Wall Street which wants to own this piece so badly.

Unless you understand how us.gov and Wall Street are connected, you don’t know anything.

US banks own us.gov

I hope Bosch pays this quickly and moves on. I’d rather see Bosch enter a M&A agreement with a Chinese co. then get sold to Wall Street crooks.

#272 screwed on 03.31.15 at 6:54 pm

@ Alberta is FINISHED

Dude, if AB is finished then QB is finisheder. Quite frankly, I’m not sure where Ottawa is going to pull its funding from with the decline in royalties.

Maybe royalties on Quebec Maple Syrup is going to make up the shortfall?

Get a life.

#273 John Mc on 03.31.15 at 6:54 pm

What sort of dirtbag would ever relish the difficulties of others.

Umm a good percentage of people on this blog if you haven’t noticed…

#274 maxx on 03.31.15 at 8:27 pm

#42 Whynot on 03.30.15 at 7:04 pm

“No way harpster gonna let RE crash on his clock, don’t be surprised if rates drop to zero.”

He hadn’t intended oil to crash on his watch either.

#275 crowdedelevatorfartz on 04.01.15 at 6:39 pm

@#273 JMc

Good one!