The frenzy

FRENZY modified

Only three more sleeps until the Poloz poodles yap. Yes, kids, on Wednesday morning at ten, Ottawa time, the Bank of Canada will announce its next rate change. So, will they shave another quarter point off the key market, already at just 0.75% ?

I hope you recall the last time this happened, back in January. A weensy nip in the central bank rate was enough to send the loonie into freefall, taking it down to just 78 cents (it’s barely broken through eighty since). It flummoxed the banks, who took long days to drop their primes by only 15 beeps, to 2.85%. It was total arousal for every realtor in the land. Like Monica Manaigre in Winnipeg who, despite the distraction of stirred loins, blasted out this tweet:

TWEET

And, as you now know, it made properties in the bubble markets even more unaffordable. Housing consultant and ex-realtor Ross Kay figures that one move added $5,000 to the price of a home nationally. In Toronto it helped push a SFH to $1.1 million, and in YVR to $1.4 million ($1.9 million in the latte-sipping core). March sales numbers showed the Poloz effect – up over 50% year/year in Van, for example. Borrowing surged. The household debt level coursed to a new record high, and about $100 billion in new mortgages were written in the last ten weeks.

Like I keep telling you, the inverse relationship between the cost of houses and the cost of money is irrefutable. BoC boss Stephen Poloz and the federal government are trying to counter the job-sucking and economy-sapping effect of the oil collapse by encouraging families to borrow excessively and buy massively. So far, it’s working like a charm. The sheeple fell for it.

Cheap money has spun the house-lust needle into the red zone. Bidding wars are back. Misguided parents are giving their kidults down payments so they can experience the joy of having a mortgage. And this weekend hundreds of people were whipped into a hormonal, competitive buying orgy in the Van suburb of Surrey as they tried to buy micro-condos of 300 square feet for about $100,000 each. (A single-car garage is 308 square feet.) Actually in the entire, unbuilt 400-suite building, only a single unit was under a hundred grand. The crowd had been duped.

CONDO FRENZY modified

But the frenzied masses spent $70 million in ninety minutes, anyway. There were a few fights. Lots of pushing. It was a good example of what real estate has done to us all, stripping away perspective, and making us believe this is a one-asset world.

Anyway, what will happen Wednesday?

A mitigating factor is the latest data point on jobs. Last month Canada saw a net gain of over 28,000 positions, which was more than anyone expected but not enough to lower the unemployment rate. The bad news is we lost almost 29,000 full-time jobs and replaced them with twice as many part-time gigs. Obviously a lot of employers thought it was prudent to punt salaried workers with costly benefits, and replace them with cheap temps. Total hours worked also fell. This suggests companies are preparing for a slowdown.

So are some economists. Capital Economics’ David Madani says the oil patch layoff woes have not really hit us yet, and total growth for Canada in 2015 will be 1.5%, at best. In Toronto, the eggheads at TD Economics are also sounding concerned about the condo market, saying we’re moving into a cyclical downturn, as the supply of these boxes shoots ahead of demand – even as the real estate board says otherwise.

“CMHC estimates that 40 per cent of condos currently under construction are held by investors who intend to rent them out,” says the bank. “However, many of these units are likely to end up on the resale market – pushing the condo market further into buyer’s territory.”

In Calgary, meanwhile, Dave snapped the picture below for us. “The attached is the reason for my email, this was taken outside the entrance to a condo complex by my street,” he says. “Up until last year these were touted as prime investment properties for folks looking to make money renting to staff at the new South Health hospital in SE Calgary. They are selling slowly but I’ve seen no less than 6 signs since Christmas and I think we’re looking at 8 there right now. It’s quite the cluster of sadness.”

CALARY modified

So what do we make of all this? Condo frenzy in Surrey. Condo blight in Calgary. Condo wilt in Toronto. Runaway detached prices in YVR and 416. Fizzling sales in Halifax, Montreal and Saskatoon. And household debt bloating like a warm gland.

Well, the bankers will cut rates again. But likely not Wednesday.

When they do, stand back.

229 comments ↓

#1 Sandie Melchen on 04.12.15 at 12:20 pm

So when are we going to see a real correction in real estate? I mean 35% to start.

Will I be old and grey in 30 years when this happens?

This artificial real estate monster of all speculations does not want to relent.

#2 I'm stupid on 04.12.15 at 12:30 pm

Has anyone else noticed the following; interest on mortgages has been falling along with the rise in interest rates for unsecured debt? Interest on unsecured lines of credit are going up.

#3 NEVER GIVE UP on 04.12.15 at 12:38 pm

No kidding!

Our good government will manipulate us like puppets right up to the October Election.

Says Harper nervously while pacing the floor like Mr. Burns in the “Simpsons”… My evil plan is coming to fruition..Ha ha ha ha

#4 LL on 04.12.15 at 12:40 pm

Yesterday I was reading some comments about real estate and I realized that lots of peoples who bought a condo would prefer to rent an apartment.

There were a lady renting a 5 1/2 at $600./month and lots of peoples would like to rent a place like that!

Some begins to realized the trap buying with low interest rate (big mortage, small wallet)!

Duplex doesn’t make a return anymore.
They buying even with no return and hope the value will continue to go higher. Time changed!

I think some will have a hard wake up!

#5 Squirrel meat on 04.12.15 at 12:41 pm

The dog’s about to piss on that sign….

#6 NEVER GIVE UP on 04.12.15 at 12:43 pm

Canadians are truly “wet behind the ears”.
The next cheapest condo in that Surrey was $149,000.

Marketing to suckers 101 says if you put your lowest price in the ad. The mathematically challenged masses will have that figure in their head all the way to the kill floor.

#7 Chris on 04.12.15 at 12:47 pm

I’m using the lower interest rates to try to get rid of debt, not take on even more. My variable rate is at 2.15% now; sure hope the BoC decides to drop it still more!

#8 Ozu Yasujiro on 04.12.15 at 12:48 pm

Good Morning

#9 LL on 04.12.15 at 12:52 pm

…”BoC boss Stephen Poloz and the federal government are trying to counter the job-sucking and economy-sapping effect of the oil collapse by encouraging families to borrow excessively and buy massively”…

And they complain that Canadian have any saving!
They encouraged Canadian not having saving!
Double talk……..
What a joke…

#10 Bobs ur uncle on 04.12.15 at 12:52 pm

Another cut might make for a nice distraction from a certain ‘PEI-based’ senator’s trial.

#11 Smoking Man on 04.12.15 at 12:57 pm

He might still pull it on Wed, get it over with.

Last night a random couple warmed up to me at the bar. Really nice people. Turns out they own the below wine joint. Said come on down, we will give you a free case.

Wondering if they were blog dogs, cause I dident ask , he got me a double JD.

This is there place.

http://www.palatinehillsestatewinery.com/site/home

#12 A Canadian Abroad on 04.12.15 at 12:59 pm

Well, back to Calgary we go from Houston we go.

While we could easily buy a home in Calgary, my risk tolerance isn’t that high to buy right anything right now (I’m in 10 international ETF’s and a diversified Canadian MF though) so we are renting a DT sub-penthouse and will sit it out.

What madness in Canada will we be descending into? Have Canadians completely lost their minds with debt?

#13 Mean Gene on 04.12.15 at 1:00 pm

The Calgary photo would have been truly poetic if the the dog was pissing on the “For Sale” sign.

#14 Nemesis on 04.12.15 at 1:02 pm

#MillionDollarHeifersHoofers…

https://youtu.be/ZixgIE3WShk

#15 Retired Boomer - WI on 04.12.15 at 1:11 pm

Let your glands boil, and swell. If YOU own them not a worry in the world, but if your gland is mortgaged, best sell it while you can. Before the bust, and wilt-without smile.

As for me, no RE cares. The portfolio continues to burp, fart, back up, and puke forward. Always up much like RE in that regard, but can be liquidated with a mouse click if desired, besides it pays ME to own it. Try that with a house!

#16 Drill Baby Drill on 04.12.15 at 1:18 pm

Dear Pathetic Blog ;
Is the only thing stopping this low interest rate insanity a future weakening in demand for USA government bonds ?

#17 takla on 04.12.15 at 1:28 pm

check out ‘the Red Brick Condo” project currently selling{trying} by Amacon Construction in Burnaby B.C

Current incentives to buy include….

No mortgage payments for 1st yr

No stata charges for 1st yr.

No tax’s for 1st yr…

Lack of buying traffic is deafening…The desperation begins…

#18 Mark on 04.12.15 at 1:35 pm

“And they complain that Canadian have any saving!
They encouraged Canadian not having saving!”

Canadians have plenty of savings. It was savings that actually funded the RE bubble. The tragedy is that the government’s industrial policy, effectively implemented through the CMHC, created a huge set of incentives to invest in housing, rather to invest in forms of longer-term job creation.

Examples are a’plenty historically that when government gets involved, usually they’re doing it contrary to the normal actions of the free market. And in doing so, thus introducing inefficiency to the capital allocation process.

#19 Senta on 04.12.15 at 1:37 pm

Required reading for moist virgins.
http://www.canlii.org/en/on/onca/doc/1997/1997canlii976/1997canlii976.html
Ontario Court of Appeal case against builder of purchasers trying to get out of purchases made following the 1989 real estate crash in the GTA.
The trial judge said:

A picture emerges of anxious purchasers waiting in long lines for up to seven hours in the frigid cold; and then, for up to three hours in the hot, crowded sales pavilion, before seeing an agent; and of harried realtors, unable to handle the crowds, affecting a demeanour sadly lacking in courtesy or candour.

The majority of the purchasers signed their agreements of purchase and sale during the three-day grand opening held from February 24 through to February 26, 1989. The agreements provided for closing on May 21, 1991 or as that date might be advanced or extended. The agreement was a complex document of several pages in length with some 32 sections in small type.

#20 Mark on 04.12.15 at 1:39 pm

“Has anyone else noticed the following; interest on mortgages has been falling along with the rise in interest rates for unsecured debt? Interest on unsecured lines of credit are going up.”

I’ve noticed this. It is largely a function of the credit-worthiness of the average Canadian borrower, which is becoming increasingly poor. Like they would to a drunk in a bar, the waitresses of credit in the Canadian economy, the banks, are starting to cut Canadians off.

#21 Squirrel meat on 04.12.15 at 1:40 pm

Dogs vs cows

https://www.youtube.com/watch?v=e9VIvmc_Qhw

https://www.youtube.com/watch?v=uQNJJtPkc3E

https://www.youtube.com/watch?v=L-hWFsM_3m0

#22 Obvious Truth on 04.12.15 at 1:49 pm

Helped a friend move yesterday. To a condo. Lots of units for rent. Building looks great from the outside but I’ve never seen anything built that cheap. My first job was in construction and my boss would have fired me for that kind of work. And most of the material was paper in disguise. It’s seems like there is a new grade of ultra low density extra thin and warpy engineered board.

These things could drop 50% and keep going as the building ages. I know a lot of people have been saying this but I haven’t personally been in any kind of new build for over a decade.

Anyway. A friendly realtor on site was kind enough to tell us that investors were renting these for mortgage cost only. Eating maintenance and taxes. The noise from the units into the hallways was horrific.

Id rather live in a trailer park. And definitely rather be dating the lass in yesterday’s pic. Sorry FF. But I get your angle.

#23 Obvious Truth on 04.12.15 at 1:50 pm

Great time of year for sports and outdoors.

Time for a ride in the sunshine.

Enjoy the day folks.

#24 The frenzy | Realties.ca on 04.12.15 at 2:00 pm

[…] Source: http://www.greaterfool.ca/2015/04/12/the-frenzy/ […]

#25 cd on 04.12.15 at 2:16 pm

Thing I don’t understand is how naive/gullible canadians are with any type of marketing out there. I have worked with various smart people, but they have no idea how to spend their money. Either they can’t see through the marketing lies, don’t know how to be efficient with their spending, or just don’t use their brains. I don’t get it.

#26 Randy Randerson on 04.12.15 at 2:23 pm

Man, our economy sure is going down the toilet. I bet investing in the US hasn’t been this popular since 2009. I’m quite happy to have left YVR and not be bombarded by daily idiocy that’s broadcasted by MSM, paid for by realturds.

Just exchanged some CAD to USD last week, will put USD to some good use.

#27 1drs on 04.12.15 at 2:29 pm

WOW ! Paid advertising on Garth’s blog. By Smokey no less. I never thought I’d see the day. Seems to me he can be bought cheap. Just a double JD and here is the ad you asked for.

#28 ShawnG in TO on 04.12.15 at 2:36 pm

spring has just arrived. it’s still early in the reason. the mad will only get madder.

then a fall they can’t forget.

(mean well, the stock market is still doing better than RE. remember: balance, diversify)

#29 Sheldor on 04.12.15 at 2:38 pm

How about updating the rules around foreign ownership as a way to cool the market, or at least provide clarity on whether foreign investment is a significant factor in the Vancouver and Toronto markets decoupling from the rest of the country. I’d propose the following:

1) require federal registration of residential property ownership, and declaration of owner residence status
-foreigners are still entitled to purchase and own residential property; hopefully this is less costly than a gun registry
2) mandate that every residential property resident owner declare household income in Canada, even if not all members of the household work in Canada. This does not apply to foreign owners.
– basically this is just an update to the definition of a resident for tax purposes
– abuses where declared incomes are less than property taxes will be easily flagged by revenue Canada, and subject to audit, if such abuses would exist.
– this gives a family with foreign income the choice of registering as a foreign owner, or potentially paying more tax in Canada – depending on tax rates and tax treaties in place
3) implement a withholding tax of 30-50% on foreign property owner capital gains, so that they are a benefit to Canada. Residents owners would continue to declare capital gains on non-primary residences
– the idea is that residential real estate is too basic a necessity to open it to excessive foreign speculation
4) provide foreign ownership data to municipalities so that municipal taxes can be adjusted for foreign owners, at the discretion of each municipality
-In reality it would be municipalities that would need to provide this data to CRA in the first place
5) close loopholes, such as declaring exorbitant realtor fees to hide capital gains, or foreign transfers not declared as income for residential resident property owners, etc.
-large foreign transfers prior to a resident purchasing real estate should also be scrutinized as possible foreign income, even before a property is purchased. However, legitimate income sources, such as inheritances from family abroad should be exempt with proper documentation

(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth

#30 TurnerNation on 04.12.15 at 2:39 pm

Smoking man why not write ChickLit.

Like: “His hands roughly inched towards my flower bed.”

Your Nom de ‘Bloom’: A. Gardiner.

#31 LL on 04.12.15 at 2:48 pm

Mark #18 – It was savings that actually funded the RE bubble.

Some had some saving but lots did not.
That’s why couple of years ago we could bought a house – or what ever – with 0 downpayment and that’s why subprime mortgage has been created.

Anyway..the bubble is not just in Canada..it’s worldwide!

#32 JO on 04.12.15 at 2:51 pm

the BofC and the govt along with the senior execs in the FIRE sectors have helped setup what will be an epic collapse over the next 4-5 yrs. it is a classic debt bubble. Historic bubbles are ALWAYS followed by crashes.
This is a cruel joke on the masses. In the early 2020 s we will be prosecuting bank chairman and former BofC governors
Look for the BofC to start Canadstan QE by early 2016 at the latest
Jokers
JO

#33 Brian Ripley on 04.12.15 at 2:53 pm

“CMHC estimates that 40 per cent of condos currently under construction are held by investors who intend to rent them out,”

My not so empirical study on units for rent already bears this out: http://www.chpc.biz/6-canadian-metros.html#Rentals

I updated my Census page:
http://www.chpc.biz/census.html

…and it includes the 2014 Van lines Migration graphic as well.

“Alberta …went from being balanced to outbound”

If you rent you can easily move to a better employment market.

#34 Blacksheep on 04.12.15 at 2:55 pm

Raging # 282,

“I saw an interview with Paul Volcker recently – he of the 20% interest rates when he was Fed chairman in the early 1980s.”

“He expressed profound dismay over the modern belief that central banks and governments can act to “fix” the business cycle.”

“He said in his day, if the economy went into recession, the Fed did not take on the responsibility of getting the country out of it. Their job was price stability. Period. They provided a solid monetary base, and the economy would have to work itself out.”

“What we don’t need is government pretending they can fix economic growth. They can’t. Recessions are something to be toughed out, not “cured”. The first do no harm principle seems to have been lost completely.”
——————————————————
100 % agree. I posted on this a few days back.

It seems the western world pivoted after 9/11 and no politico has allowed recession on their watch. Trouble is repeated intervention, eventually reaches saturation, losing it’s effect, so we get the malaise we are now experiencing.

We cannot expect, real expansion (western growth), until we accept real contraction (western recession).

This is why rate increases, beyond minor symbolic moves, will not happen.

But what would Paul V. do?

#35 westcanguy on 04.12.15 at 2:55 pm

That picture of the for sale signs in SE Calgary certainly isn’t just in that area. I live in the NW that was supposedly voted the most desirable subdivision in the city… or so they say… and the condo complex I’m living in has had 7-9 signs up all Winter. We’re down to 6-7 now.
Retail is still strong in Calgary but I’m thinking the next 90-120 days will be the most interesting and telling about where our economy is going.

#36 Sheldor on 04.12.15 at 3:01 pm

(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth
——————————————————-
Would be much easier to educate Canadians once we have some hard data. The anecdotal arguments on the topic of foreign ownership are tiresome.

#37 TurnerNation on 04.12.15 at 3:07 pm

I mostly skip by Mark posts. A rehash of econ and finance courses. Which I care to forget.
It’s about buying and selling, life. No one got rich from education, alone.

#38 JG on 04.12.15 at 3:13 pm

#2 I’m stupid on 04.12.15 at 12:30 pm
Has anyone else noticed the following; interest on mortgages has been falling along with the rise in interest rates for unsecured debt? Interest on unsecured lines of credit are going up.

I am glad you pointed this out.

it is very strange. Happened to me on 2 LOC’s… the % went up 2 points on each ( who says the banks are in bed with each other?). When I asked for an explanation I got, both times, “It’s not you, it’s us ( sounds like my ex’s). You are not the only one…….from time to time we re-evaluate our blah blah blah……”

I immediately closed all accounts with these fool banks.

This is indeed a warning of things to come. IE..One May GMAC sent me a letter saying they were no longer in the car leasing business, at least not until further notice. 4 months later .. Kaboom..the US housing market blew up.

I see this as a warning/sign of things to come. I mean, if rates are going down, why are unsecured LOC’s going up? The bankers have their reasons and I am sure the news is not good.

#39 Mark on 04.12.15 at 3:29 pm

“1) require federal registration of residential property ownership, and declaration of owner residence status”

Already happens, the RE industry and the financial sector has very specific rules they must follow, including reporting, when dealing with non-residents.

) mandate that every residential property resident owner declare household income in Canada, even if not all members of the household work in Canada. This does not apply to foreign owners.

Already is the case. The Income Tax Act applies to all who meet the tests of residency in Canada, including non-citizens.

implement a withholding tax of 30-50% on foreign property owner capital gains, so that they are a benefit to Canada. Residents owners would continue to declare capital gains on non-primary residences

Already is the case, a withholding tax on disbursements to non-residents. You seriously need to get out more and actually talk to professionals who deal with this stuff.

provide foreign ownership data to municipalities so that municipal taxes can be adjusted for foreign owners, at the discretion of each municipality

There is no legal doctrine in Canada that allows municipalities to discriminate on the basis of foreign ownership. Additionally, municipalities should welcome foreign ownership as “foreign” owners pay taxes but don’t make much if any use of services like the library and the swimming pool.

close loopholes, such as declaring exorbitant realtor fees to hide capital gains, or foreign transfers not declared as income for residential resident property owners, etc.

Such loopholes do not exist, and exorbitant transactional fees are subject to audit by the CRA and adjustment. Additionally, if large Realtor fees were paid, they were likely paid to a Canadian, and this is taxable income.

“-large foreign transfers prior to a resident purchasing real estate should also be scrutinized as possible foreign income, even before a property is purchased.”

No evidence that these are even taking place in any meaningful quantity. Canada’s RE is levitated by domestic actors using domestic sources of leverage.

#40 LL on 04.12.15 at 3:30 pm

(7) It is writing everywhere in newspapers that foreigners help real estate market to go up (in certain area).

By the way, government have a program to encourage immigration.

#41 Retired Boomer - WI on 04.12.15 at 3:44 pm

What ARE the chances Poloz will cut the Prime rate again? How much? How soon?

If he does, the BIG Dollarama question is – What’s Left?

#42 Marco on 04.12.15 at 3:45 pm

Yep that’s the one Garth.
“Actually in the entire, unbuolt 400-suite building, only a single unit was under a hundred grand. The crowd had been duped.”

So, they are able to say you can buy in for 93,000 even if only one suite is priced that low.

That 93,000 unit must be a broom closet.

Thanks for the roving reporting and reality check Garth.

Cheers.

#43 jsan on 04.12.15 at 4:11 pm

So how in the [email protected]*!# does driving up the incentive to take on more debt and lowering the incentive to save help a country where it’s citizens are already wallowing so deep in debt any little future rate increase will crush them?

Allow me to put on my tinfoil hat. I swear, it’s almost as if they are trying to destroy this country economically. What they are doing by allowing a generation to take on such a massive amount of debt thanks to a government sponsored program (the CMHC) will cripple this country economically or double Canada’s debt by the wave of CMHC insured defaults that would sweep the nation if rates jumped higher. Seriously, what are they trying to do, purposely destroy the economy to allow them to usher in a North American union? It really sometimes makes me wonder???

#44 paddler on 04.12.15 at 4:12 pm

I thought I would never say this but YVR is different at least for the time being. With all the doom and gloom I heard and read over the past few years where real estate is heading nothing has materialized except in Calgary and that is due to the drop in the oil price and layoffs. Nobody could foresee the drop in oil coming either. Nobody can predict the future. Some home owners in Vancouver will laugh all the way to the bank with their financial windfall from the last 30 years owning a home in YVR. Who would have guessed. People paying thousands of dollars over the asking price in desperation, just ad more fuel to the real estate market. Some day when this all ends it won’t be pretty. The same people that buy in desperation now will try to sell in desperation as well. Good luck when the tide eventually turns.

#45 the jaguar on 04.12.15 at 4:16 pm

David Madani is correct. The oil patch layoffs have been done in ‘waves’ and it doesn’t appear they are over yet. Those that got sacked can survive for many months on the packages they received from their employers. and their credit cards and lines of credit. But retailers are suffering now. It’s evident. It will be interesting to observe what happens this spring and summer in the BC interior, backyard playground of Alberta money. As Malcolm X once said, “The chickens come home to roost”. All those big boats and second recreational homes. Silver Star already has a glut of listings.

#46 Smoking Man on 04.12.15 at 4:22 pm

#30 TurnerNation on 04.12.15 at 2:39 pm
Smoking man why not write ChickLit.

Like: “His hands roughly inched towards my flower bed.”

Your Nom de ‘Bloom’: A. Gardiner.
……
Your Smoking weed again , aren’t you. Stay away from the Cheap Dollar brands.

#47 Van Doom on 04.12.15 at 4:24 pm

With all the private sector bail outs and lucrative contracts and hey rampant IT inflation which is making outsourcing to India a viable choice.

And you want to talk about earning your keep, try working in the forest products business as an owner/operator of a saw mill. You want productivity, hard work, value for money. You sit there in your comfy chair and code or play with infrastructure and do your just build worthless video games.

If you are not happy with your current situation, then grow a pair and change it.

You wouldn’t last one week in my former work environment. But instead you hide behind a screen and shout stupidity at others. Last time I even care to respond to your rantings unless you can form an argument

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

Name the time and place anywhere public where lots of people can listen and I will debate you VERY publicly about how GOVT is destroying Canada and the world Don.

All those bailouts? They were given to billion dollar companies by the dictators that run this country who after they QUIT (that dog John Baird) they go running to the companies that got all the deals. In Baird’s case…..ZERO investigation into RE money laundering. Go check out who Baird is working for now…..

Anytime anywhere Don……and public.

#48 Waterloo Resident on 04.12.15 at 4:27 pm

Okay, the Bank of Canada rate is now at 0.75%
So lets say it drops to 0.5, then to 0.25% What after that? Lets say it then drops to 0.00% Then it drops to – 0.1% and the Canadian dollar goes into a free-fall.

So that’s the bottom of rates ( -0.1% ) and after that mistake the BOC has to raise rates back up to 0%.

With no jobs being created by retail, jobs being lost by oil, and by then even the real estate industry will have topped out and start to lose jobs, where will the job growth come from after we hit negative rates, then bounce back to zero?

If jobs are not being created, then the real estate PONZI scheme will quickly fall apart at the seams; there won’t be anything to hold up the economy and it will be like a domino effect = one sector’s decline making other sectors fall even quicker, and those sectors then affecting the first one, rinse and repeat again and again.

I know that every few years ( every 7 to 10 years ) Canada enters a new recession without fail. So lets see, 2008 plus 7 or 10, that would mean we enter the next recession somewhere between 2015 and 2018. So if the Canadian economy will be dead and losing jobs going INTO the recession, and interest rates will already be at zero, then what will the government do to jump-start the Canadian economy when the next recession starts?

Nothing that’s what. Think Japan’s 20-year depression, that’s what Canada has in store for it after the next recession begins. I’d hate to be a young person looking for a job when the next recession hits, there won’t be anything for them, not even volunteer jobs.

#49 Freedom First on 04.12.15 at 4:28 pm

Yes, you can see the frenzy in the faces of the people lining up to buy. For myself, I’ve only bought RE when nobody else was around, the property met all of my conditions on the contract, and my new neighbor can’t believe the price I got the house for. In selling the same houses, I have enjoyed the open houses and the speed with which the property sells. Right now, renting is a gift. We are going to see a SHTF scenario spreading from Alberta outwards. It has begun, but many Canadians are unaware and unbalanced. Fact.

#50 Van Doom on 04.12.15 at 4:28 pm

Even after exchange…….gas is still 82 Cents a liter in WA. Here in Van Doom its $1.24 with most going to tax after tax after tax after tax.

#51 Vanc-Jing resident on 04.12.15 at 4:31 pm

DELETED (Anti-immigrant)

#52 Freedom First on 04.12.15 at 4:39 pm

#22 Obvious Truth

No worries. No harm, no foul.

Plus, I enjoyed your Post and have had the same experience of seeing the trash built today, both condos and houses. I too know what to look for. Enjoy the day everyone.

#53 Jjredick on 04.12.15 at 4:48 pm

Banks are not evil? If every dollar that exists in the world comes into existance as debt and this loan needs to be paid back + interest and that interest goes to PRIVATE individuals- how can this NOT be evil.???
The primary share holders of the PRIVATE federal reserve are the morgans, seifs, lazzards, kuhn loeb, morgans, rockefellers, rothschilds!
Your a disinfo agent. Money lent at interest eventually moves all assets into the hands of a few through default due to interest that is charged on the debt that must always find new borrowers to inflate the money supply of ever increasing debt levels.
Mike maloney-secrets of money
“Oh canada- money”
U obviously can’t read or comprehend.

#54 X on 04.12.15 at 5:07 pm

When rates are lowered, somebody for the love god, please tighten RE regulations/lending standards. Most people are too financially ignorant to know where these levels of debt will lead them….

#55 Karma on 04.12.15 at 5:13 pm

“The Budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome become bankrupt. People must again learn to work instead of living on public assistance.” – Cicero, 55 BC
—————————————————————
So, evidently we’ve learnt bugger all over the past 2,070 years

#56 Terrier on 04.12.15 at 5:18 pm

I work for a mid-size technology company that shed more than 25% of jobs in the past 6 months. Since last summer, I was thinking of replacing my 9 year old car ’cause the thing is slowly giving up. Considering the job prospects, in case if my position is terminated, I decided to keep fixing the “big blue” until wheels come off. No choice really. Makes you think about sheeple going a million and change under in times when uncertainty and risk dominates …

#57 Karma on 04.12.15 at 5:19 pm

#183 crowdedelevatorfartz on 04.11.15 at 12:56 pm
“@162 Carly
Last time I checked. This was a financial site.
Its no secret single moms are usually a financial black hole.
So men are misogynists for avoiding a financial black hole?
Wow, in the Age of Political Correctness now even my hard earned money isnt mine.”
———————————————————

Got this in an email and thought it was fitting…

The definition of “Political Correctness” by Harry Truman, POTUS at end of WWII:

“Washington, D C 2120-September 1, 1945

To: D A MacArthur/C H Nimitz

From: H S Truman

Political Correctness is a doctrine, recently fostered by a delusional, illogical minority and promoted by a sick mainstream media, which holds forth the proposition that it is entirely possible to pick up a piece of shit by the clean end!”

#58 Karma on 04.12.15 at 5:27 pm

#187 Van Doom on 04.11.15 at 1:17 pm

“Take pride in what? Fleecing the country?

Fast Cat ferries that don’t work
Billion dollar “software program” to register guns
5 billion dollars to “administer” the gas tax
tens of billions in the Dept of Indian affairs with most natives living in poverty…..

The list is hundreds of lines long……Govt pisses away money. And yes….the Govt Workers are very good and dedicated hard working money pissers……..”
————————————————————–

You’re blaming the engineering behind “Fast Cat Ferries” on government employees? Blame the politicians, if anything. Also, the “Fast Cat Ferries” did work… they just cost too much for what they were, which again should be blamed on politicians.

It’s funny that you blame individuals for things that if you were in their position you wouldn’t blame yourself…

#59 Squirrel meat on 04.12.15 at 5:41 pm

#55 Karma on 04.12.15 at 5:13 pm

“The Budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome become bankrupt. People must again learn to work instead of living on public assistance.” – Cicero, 55 BC
—————————————————————
So, evidently we’ve learnt bugger all over the past 2,070 years
————————————————

Well it did take a few more years for it all to go south.. we’re ok for a while yet!

#60 Don on 04.12.15 at 5:43 pm

47 Van Doom on 04.12.15 at 4:24 pm

With all the private sector bail outs and lucrative contracts and hey rampant IT inflation which is making outsourcing to India a viable choice.

And you want to talk about earning your keep, try working in the forest products business as an owner/operator of a saw mill. You want productivity, hard work, value for money. You sit there in your comfy chair and code or play with infrastructure and do your just build worthless video games.

If you are not happy with your current situation, then grow a pair and change it.

You wouldn’t last one week in my former work environment. But instead you hide behind a screen and shout stupidity at others. Last time I even care to respond to your rantings unless you can form an argument

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

Name the time and place anywhere public where lots of people can listen and I will debate you VERY publicly about how GOVT is destroying Canada and the world Don.

All those bailouts? They were given to billion dollar companies by the dictators that run this country who after they QUIT (that dog John Baird) they go running to the companies that got all the deals. In Baird’s case…..ZERO investigation into RE money laundering. Go check out who Baird is working for now…..

Anytime anywhere Don……and public.

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

Why don’t you talk to Harper, and your Provincial and municipal leaders first – instead of trying to belittle all the workers who have no option but to take direction from their superiors both in the private and public sectors.

I am moving on now – no more time for your nonsense.

Hope you have a good life!

#61 Chaddywack on 04.12.15 at 5:51 pm

I grew up in Surrey……and have since moved on (even though I rent).

Mark my words, give those condos 5 years and they will be a ghetto. That neighbourhood is very likely to attract drugs and crime, along with cheap rent and you have a mess….some “investment.”

Glad I got out of the hood.

#62 Mark on 04.12.15 at 5:57 pm

“Lets say it then drops to 0.00% Then it drops to – 0.1% and the Canadian dollar goes into a free-fall. “

Canadian dollar would actually go up if they cut to zero or less. Why? Banks would, instead of lending, would merely warehouse cash in their vaults. Thus little credit would be available to the economy, and thus, consumers wouldn’t be able to consume. Little consumption = low imports = higher Canadian dollar.

Not sure where you get the idea that the CAD$ would go down if rates went down. Its quite backwards.

Considering the job prospects, in case if my position is terminated, I decided to keep fixing the “big blue” until wheels come off.

Exactly, profoundly deflationary. Which causes austerity which pushes up the Canadian dollar as you are precluded from buying an imported car.

#63 jrochest on 04.12.15 at 6:02 pm

Saskatoon now has more properties listed on the MLS than any time in the service’s records: 1875 showing today, although Norm Fisher has it pegged at 1826. Most are in the new developments outside of Circle drive. This will not end well.

#64 Mark on 04.12.15 at 6:06 pm

“What ARE the chances Poloz will cut the Prime rate again? How much? How soon?”

Poloz doesn’t control the “Prime” rate. “Prime” is set in the sole discretion of private sector banks. What he does set is the Bank of Canada policy target for overnight lending between banks, and I believe its fairly likely that additional cuts are on their way, as soon as this week.

How much? Eventually down to zero. But not really sure if this will be of much help to RE-backed borrowers, who are now facing significant credit-worthiness issues as RE prices decline and equity recedes.

When I asked for an explanation I got, both times, “It’s not you, it’s us ( sounds like my ex’s). You are not the only one…….from time to time we re-evaluate our blah blah blah……”

There’s a few factors at work. First, if the bank has old information on you, there is the perception that old information = riskier information. After all, few people, when they lose their jobs or start running into declining equity get on the phones to notify their bankers that they are now more risky credit.

Secondly, the way that banks look at credit profiles changes over time. Banks use tools far more sophisticated than merely “credit scores” to evaluate credit quality.

Thirdly, some banks, as business policy, simply rely upon people becoming increasingly distanced from changes to their accounts. If they raise the LOC rates on 1000 credit-worthy people for which no real justification exists, 500 might complain, but the other 500 might not even be in-tune enough with their finances to understand. Considering that a good chunk of the population has very poor financial literacy, but might take action on a headline like, “0% interest for 18 months” (on a car that is 10% overpriced relative to its cash price!), this is entirely plausible.

#65 Karma on 04.12.15 at 6:07 pm

#200 Shawn Allen on 04.11.15 at 2:48 pm
“Bank deposits are counted as money. Banks together with their customers create deposits all day long. Blacksheep has provided links to the bank of England demonstrating this.

Ergo, it appears that you are wrong.”
————————————————————-

Are you sure banks don’t just transfer capital from their treasury accounts to the individual borrower’s chequing account? That doesn’t exactly “create” a deposit.

Capital allocation by banks doesn’t create new money out of thin air, as you are implying. The treasury department can choose to buy high yielding bonds rather than approving a mortgage. Their goal is to maximize profits from the investible funds (i.e. deposits above their reserve requirements) while maintaining diversification.

#66 Nagraj on 04.12.15 at 6:10 pm

” . . . encouraging families to borrow excessively and spend massively.”

What’s the policy alternative? It’s the only song they know. And it’s not all that different from calls for fiscal stimulus – which is encouraging gov’ts to borrow excessively and spend massively.

” . . . companies are preparing for a slowdown.”

About time, eh?

I’m one of those – pessimists – who believes that gov’t can only react to a failing economy, and that the foremost motive of reactionary policy is to maintain the social status quo, to preserve the wealth of those who have it.

The great Canadian housing bubble, the great Canadian debt bubble, and Canada’s youth unemployment crisis will resolve themselves this way: debt that can’t be paid back won’t be paid back.

I’m not comfortable with dividing the nation into “the sheeple” and “the non-sheeple”. Both sorts are simultaneously subject to THE HEMLINE INDEX. And for BOTH sheeple and non-sheeple that proverbial hemline has been up around the neckline.

#67 Van Doom on 04.12.15 at 6:18 pm

I am moving on now – no more time for your nonsense.

Hope you have a good life! – Don

*******************************************
You’re blaming the engineering behind “Fast Cat Ferries” on government employees? Blame the politicians, if anything. Also, the “Fast Cat Ferries” did work… they just cost too much for what they were, which again should be blamed on politicians. – Karma

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

PUBLIC debate – anytime anywhere……so dont tell me Im hiding behind a keyboard. Ill film it and put it on YOUTUBE. Put your Taxpayer Salaries where your mouth is.

#68 Nemesis on 04.12.15 at 6:27 pm

#DedicatedHardWorkingMoneyPissers… #It’sABankerThang… #ImportanLessonsAboutThe’Private’Sector… #FromTheWayBackMachine

…”They started by spending a relatively modest £64 on beer and champagne. When they reached the table they ordered a 1982 Montrachet for £1,400, followed by three different vintages of Petrus – a 1945 at £11,600 a bottle, a 1946 at £9,400 and a 1947 at £12,300, and finished with a dessert wine that cost £9,200.”…

…Barclays was said to be enraged by the bad publicity it received in the aftermath of the dinner, which came shortly after it announced thousands of job losses from its banks.”…

http://www.telegraph.co.uk/news/uknews/1385830/City-dealers-lose-their-jobs-over-44000-wine-binge.html

[NoteToGT: Way more fun than lunch in HogTown… Trust me on that… By the way, don’t waste your tears over the dismissals… They landed on their feet: http://www.telegraph.co.uk/finance/markets/2815859/Why-Northern-Rock-was-doomed-to-fail.html – OK, maybe not… Still, my inner Impresario thinks “DedicatedHardWorking MoneyPissers” may yet have some life left in it as the working title for a garage band of investment banking punk rocker revivalists… Wouldn’t you agree?]

#69 Randy Randerson on 04.12.15 at 6:33 pm

Question for the blog-dogs here. If I transfer $500k of a balanced portfolio to another bank, will I receive preferential treatments as well as LOC at prime?

I don’t think in this day and age, a buy-n-hold portfolio will do much good for a bank’s bottom line, especially since it’s more of a liabilities than anythings for the bank. My head says NO but my heart hopes for a YES.

#70 Marco on 04.12.15 at 6:41 pm

To # 38
Had 2 LOC increase rates. On one the increase went from prime plus .9 to prime plus 4. The other went to plus 7. I have a 800+ credit score. When I asked why the increase, I received the same answer. I also closed my accounts.

#71 Nemesis on 04.12.15 at 6:50 pm

#SoundtrackAddendum… #TheClash?….

https://youtu.be/EfK-WX2pa8c

#72 Randy Randerson on 04.12.15 at 6:52 pm

Holy shitsnack, look at the people all lined up, ready to be figuratively slaughtered by realturds.

http://www.huffingtonpost.ca/2015/04/12/surrey-condo-sales-hundre_n_7048666.html

#73 Drunk Actuary on 04.12.15 at 7:03 pm

Mark # 62

“Canadian dollar would actually go up if they cut to zero or less. Why? Banks would, instead of lending, would merely warehouse cash in their vaults. Thus little credit would be available to the economy, and thus, consumers wouldn’t be able to consume. Little consumption = low imports = higher Canadian dollar.

Not sure where you get the idea that the CAD$ would go down if rates went down. Its quite backwards.”

Seriously, I don’t know what youre taking but that’s looking like some serious good stuff.

#74 LALA LAND on 04.12.15 at 7:35 pm

(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth

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

Really, what happened to your previous line……OF COURSE THERE IS SOME INFLUENCE..

#75 Daisy Mae on 04.12.15 at 7:40 pm

#69 Sheldor: “(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth”

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

Actually, Garth is correct. Canadians didn’t have to allow themselves to be led down the garden path. They all — kidults and parents — COULD have used common sense. But they chose not to….

#76 Daisy Mae on 04.12.15 at 7:45 pm

#36 Sheldor: “Would be much easier to educate Canadians once we have some hard data. The anecdotal arguments on the topic of foreign ownership are tiresome.”

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

In general, people will not wade thru ‘hard data’….

#77 Mark on 04.12.15 at 7:48 pm

“Seriously, I don’t know what youre taking but that’s looking like some serious good stuff.”

Is there something you disagree with? I laid out the case for what I believe fairly clearly. I’m certainly willing to have a debate with you if you want to challenge the assumptions made, such as banks hoarding currency rather than lending such out at a negative rate of interest.

In a nutshell, both excessively high rates, and excessively low interest rates lead to exxagerations in the risk premia associated with credit, and ultimately to a contraction in credit. Which is why deflation and hyperinflation typically cannot be broken with traditional monetary policy tools.

#78 kommykim on 04.12.15 at 8:02 pm

RE: #62 Mark on 04.12.15 at 5:57 pm
“Lets say it then drops to 0.00% Then it drops to – 0.1% and the Canadian dollar goes into a free-fall. “
Canadian dollar would actually go up if they cut to zero or less.

See the 2nd bullet point:
http://en.wikipedia.org/wiki/Currency_appreciation_and_depreciation

Gee… Another site which disagrees with you.
See part “2. Differentials in Interest Rates”:
http://www.investopedia.com/articles/basics/04/050704.asp

It goes on and on:
http://www.economicshelp.org/macroeconomics/exchangerate/factors-influencing/

Mark is so wrong on this it’s not worth responding. But good effort. — Garth

#79 Mark on 04.12.15 at 8:03 pm

“Question for the blog-dogs here. If I transfer $500k of a balanced portfolio to another bank, will I receive preferential treatments as well as LOC at prime?”

Most banks will lend against investments at some pre-determined discount of their full value. You can take it one step further and go to a broker like Interactive Brokers who will lend to for even less than “Prime” on eligible securities that make up a balanced portfolio.

#80 Mark on 04.12.15 at 8:12 pm

“Mark is so wrong on this it’s not worth responding. But good effort. — Garth”

Oh really Garth? Why hasn’t the USD$ crashed to zero under ZIRP? Why has the Yen spent much of the past few decades gaining strength under ZIRP? There are plenty of examples of currencies strengthening under zero percent interest rate policy, and no reason to believe Canada will be any different. I’ve explained why quite thoroughly.

Money flows to where it earns the best return and prospects of capital preservation. If rates here decline further while the US tightens monetary policy, you can count on a weaker loonie. Why would foreign investors bid up the currency of a country with an economy so limp it has to loosen policy while its neighbour and dominant trading partner moves in the opposite direction? What happened in January blew up your argument. You are wrong. — Garth

#81 Inadequate on 04.12.15 at 8:21 pm

#62 Mark

Just wondering where did you go to high school? I will make sure that my kids stay away.

#82 Babblemaster on 04.12.15 at 8:22 pm

“Like I keep telling you, the inverse relationship between the cost of houses and the cost of money is irrefutable.” – Garth

——————————————————–

Other irrefutables besides the “POLOZ Effect”:
– CMHC insurance
– Immigration (especially HAM)

#83 Fed-up on 04.12.15 at 8:23 pm

#75 Daisy Mae on 04.12.15 at 7:40 pm

#69 Sheldor: “(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth”

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

Actually, Garth is correct. Canadians didn’t have to allow themselves to be led down the garden path. They all — kidults and parents — COULD have used common sense. But they chose not to….
—————————————————————————–

As much as I agree with all of this, Canadians are also victims of having their country sold down the river by our governments, through lax lending and foreign ownership standards, market manipulation, greedy banks, corrupt developers, CMHC and real estate associations. I know that many can choose not to buy and rent, but seriously why should they? Why do we live in a country where putting a roof over your head poses a potential financial catastrophe anywhere near where decent jobs can be found?

#84 Babblemaster on 04.12.15 at 8:42 pm

“Only three more sleeps until the Poloz poodles yap. Yes, kids, on Wednesday morning at ten, Ottawa time, the Bank of Canada will announce its next rate change. So, will they shave another quarter point off the key market, already at just 0.75% ?” – Garth

———————————————–

It’s on it’s way to “ZERO” in the not-to-distant future.

#85 CREIT on 04.12.15 at 8:46 pm

@2..Has anyone else noticed the following; interest on mortgages has been falling along with the rise in interest rates for unsecured debt? Interest on unsecured lines of credit are going up

The above happened to me several weeks ago. My LOC with CIBC whent from prime +1 to prime +6.

Excellent credit……I guess it’s a sign of the times.

#86 Obvious Truth on 04.12.15 at 8:51 pm

#37 Turner Nation

Amen.

#87 Chris on 04.12.15 at 8:54 pm

Lowering the interest rate is not stimulating the economy. It is merely doing two things 1) pushing up the price as we import almost everything and most of them priced in USD 2) Infating the housing bubble. These two things both squeeze further the already stretched public. So why would BOC even think about lowering it again, other than for political reasons? It is obviously not working economically.

#88 Leo Trollstoy on 04.12.15 at 8:58 pm

I mostly skip by Mark posts. A rehash of econ and finance courses. Which I care to forget.
It’s about buying and selling, life. No one got rich from education, alone.

Very true. And an exact description of Mark. His crying of being a penniless, underemployed engineer on RFD were legendary*.

*Until he was banned for trolling by spreading anecdotal, xenophobic and incorrect opinions. All with no supporting source links.

#89 Leo Trollstoy on 04.12.15 at 9:01 pm

Some day when this all ends it won’t be pretty. The same people that buy in desperation now will try to sell in desperation as well. Good luck when the tide eventually turns.

Amen.

#90 Montellino on 04.12.15 at 9:04 pm

What are the prices in Calgary like these days? YoY -5%??

#91 will on 04.12.15 at 9:07 pm

That picture of the bidding frenzy is revolting. It’s like they want to give the impression of the stock exchanges in the old days or the trading pits at the Chicago board of trade. Except that in this case all the people are probably actors. What a turn off.

#92 Leo Trollstoy on 04.12.15 at 9:09 pm

Seriously, I don’t know what youre taking but that’s looking like some serious good stuff.

Lol! That’s why we should all pray for a rate cut. Amirite?? ;)

#93 Nora Lenderby on 04.12.15 at 9:12 pm

#38 JG on 04.12.15 at 3:13 pm
#2 I’m stupid on 04.12.15 at 12:30 pm
Has anyone else noticed the following; interest on mortgages has been falling along with the rise in interest rates for unsecured debt? Interest on unsecured lines of credit are going up.

This has been going on a while. It must be three years or so since TD pulled our (unused, lowish rate, unsecured) line of credit and said we could have a higher rate secured LOC for more interest (secured on our house). It’s hard to see any pattern to it.

Since we live well within our means we haven’t much use for the LOC…I dunno, emergencies?

#94 Leo Trollstoy on 04.12.15 at 9:14 pm

#78 kommykim

Nice links. Unfortunately you can’t convince a poor deluded person that they’re wrong. That’s the definition of being poor and deluded. ;)

#95 Franco on 04.12.15 at 9:14 pm

David Madani has been consistently wrong.

#96 Leo Trollstoy on 04.12.15 at 9:17 pm

Money flows to where it earns the best return and prospects of capital preservation. If rates here decline further while the US tightens monetary policy, you can count on a weaker loonie. Why would foreign investors bid up the currency of a country with an economy so limp it has to loosen policy while its neighbour and dominant trading partner moves in the opposite direction? What happened in January blew up your argument. You are wrong. — Garth

Quit while you’re ahead Mark. You don’t want to get into this with Garth. You’re out of your depth here. Especially on this specific currency topic.

Stick to things that you’re better at. Like investing in gold and gold miners. Or Toronto RE sales mixes. Or rainbows and unicorns.

#97 Nora Lenderby on 04.12.15 at 9:19 pm

#83 Fed-up on 04.12.15 at 8:23 pm
…Why do we live in a country where putting a roof over your head poses a potential financial catastrophe anywhere near where decent jobs can be found?

Decent jobs can be found all over the country.

#98 young & foolish on 04.12.15 at 9:22 pm

Relax Blog Dogs …. the other day Garth said there will be growth (I guess sometime in the future) … but probably not until this entitled generation has been fleeced.

#99 TS on 04.12.15 at 9:26 pm

I don’t even understand how Garth has people who think he’s wrong on this sorta thing.

-The Rule of 90 is so smart
-His balanced portfolio models of REITs, Preferreds, ETFs, 60/40 split is great advice

If more Canadians read this blog, we wouldn’t have people screaming about OAS being raised by 2 years

#100 Pathetic bubbleheads on 04.12.15 at 9:28 pm

#94 Leo Trollstoy on 04.12.15 at 9:14 pm
#78 kommykim

Nice links. Unfortunately you can’t convince a poor deluded person that they’re wrong. That’s the definition of being poor and deluded. ;)

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

reading the greater fool blog !!!

#101 Setting the Record Straight on 04.12.15 at 9:34 pm

@88
*Until he was banned for trolling by spreading anecdotal, xenophobic and incorrect opinions. All with no supporting source links.

#######
Mark was banned for having xenophobic and incorrect opinons. I take it that if had held either xenophobic opinions or incorrect opinions he would not have been banned.

So Mark has an irrational fear of the foreign?
I doubt that. Or is your idea that any criticism of the foreign is xenophobic.

As for incorrect opinions, damn that must be a very intellectual group.

#102 Leo Trollstoy on 04.12.15 at 9:37 pm

Some perspective about money:

http://qz.com/380342/the-global-economys-bizarre-problem-too-much-money/

Good luck Canada!

#103 Fed-up on 04.12.15 at 9:41 pm

#97 Nora Lenderby on 04.12.15 at 9:19 pm

#83 Fed-up on 04.12.15 at 8:23 pm
…Why do we live in a country where putting a roof over your head poses a potential financial catastrophe anywhere near where decent jobs can be found?

Decent jobs can be found all over the country.
——————————————————————————

Like where? Lillooet?

If that’s true then why does nearly 60% of this country’s population stuff itself into 4 metropolitan regions?

Nice try though.

#104 Alberta Boy on 04.12.15 at 9:43 pm

Coming from Alberta, you get continual amounts of news stories in regards to oil and real estate. With that said, the longer oil remains at below 65 dollar i.e. 2 or more years, the more damage will occur in real estate. Another interesting statistic is the USA has about 2500 wells that are capped and with no fracture stimulation and basically sitting idle for anticipation of higher oil prices. I wonder how many similar situations exist throughout the world. This tells me this will keep the price of oil below 65 dollars for awhile. There are many “gas wells” that are sitting idle throughout AB for about 10 years similar to oil at the present, someone I know has 4 quarters and his land has 3 gas wells capped (the oil company continually pays the yearly rent). How much longer will those wells stay idle, oil could be similar, all comes down to price and economics? I recall the downturn of 98-01 (4 years), this downturn could be similar. Anyways, a long story short Real Estate is certainly going to be under pressure in AB going forward. I say a needed 25 percent correction. The good side of it all, this may help get the kids out of the parents basement.

#105 Smoking Man on 04.12.15 at 9:51 pm

Back in the day….

Mellenials this is why you missed,

Can you imagen this being played today, the femanazis would be all over it.

Nastalaga Boomers.

20 Minute Workout 2-1 (Arlaine, Holly, Bess): https://youtu.be/RA1Y6ks2OPw

#106 Setting the Record Straight on 04.12.15 at 9:53 pm

http://globaleconomicanalysis.blogspot.ca/2015/04/former-fed-governor-thomas-hoenig-says.html

#107 young & foolish on 04.12.15 at 9:53 pm

“What we don’t need is government pretending they can fix economic growth. They can’t. Recessions are something to be toughed out, not “cured”. The first do no harm principle seems to have been lost completely.”

Volker was “old school” … the current leadership pushed him aside. This entitled generation will not be made to drink their medicine. Big corporations don’t seem to care about the “health” of the 1st World consumer any more (too bad Mr. Ford) …

#108 Linda on 04.12.15 at 9:59 pm

I confess I do not get the feeding frenzy thing for the condo buy. I have to hope that all the frenzies? have a secure income stream of some sort & that this not yet built building is truly going to be a work of art, with quality construction, concrete not wood, sound barriers, granite etc. (truthfully, I have a hard time swallowing that last one but if one MUST fantasize, may as well go all the way).

Even so, spending $100,000 plus for some 300 square feet that one will then be paying condo fees, taxes etc. on in perpetuity makes me wonder how many of those people were really buyers. As per the blog post, they all were & all I can say is this will not end well, unless those buyers can somehow get out of the contracts they just signed. I’d also want proof the deposits are safely tucked into a fund that can’t be raided by the condo builder, with or without the aid of a lawyer. How did that case turn out anyway? Last I heard the money was gone & there wasn’t much hope any of it would be recovered……

#109 OttawaMike on 04.12.15 at 10:04 pm

This blog needs less Mark and more cowbell.

#110 crash callaway on 04.12.15 at 10:06 pm

Future trend prediction!

Houses will be sold on Amazon.ca and drones will deliver them.

#111 45north on 04.12.15 at 10:14 pm

BoC boss Stephen Poloz and the federal government are trying to counter the job-sucking and economy-sapping effect of the oil collapse by encouraging families to borrow excessively and buy massively. So far, it’s working like a charm. The sheeple fell for it.

Stephen Poloz et al demonstrate a craven attitude that I don’t feel. What is needed is strength and courage.

I am inspired by the following passage:

11 I am the good shepherd: the good shepherd lays down his life for his sheep.

12 The hired man, since he is not the shepherd and the sheep do not belong to him, abandons the sheep as soon as he sees a wolf coming, and runs away, and then the wolf attacks and scatters the sheep;

13 he runs away because he is only a hired man and has no concern for the sheep.

14 I am the good shepherd; I know my own and my own know me,

http://www.catholic.org/bible/book.php?id=50&bible_chapter=10

#112 Wildnutter on 04.12.15 at 10:14 pm

#105 Smoking Man on 04.12.15 at 9:51 pm

Back in the day….

Mellenials this is why you missed,

Can you imagen this being played today, the femanazis would be all over it.

Nastalaga Boomers.

20 Minute Workout 2-1 (Arlaine, Holly, Bess): https://youtu.be/RA1Y6ks2OPw
——————————————————
So SM has the hots for retro Jane Fonda…

Millennials didn’t miss anything…they have porn 24/7 on their phones..

This of course has lots to do with RE since it is meant to be in your home workouts for stay at home moms.. to work up a sweat before the pool boy arrives.

#113 Blacksheep on 04.12.15 at 10:27 pm

Mark # 62,

“Banks would, instead of lending, would merely warehouse cash in their vaults. Thus little credit would be available to the economy, and thus, consumers wouldn’t be able to consume. Little consumption = low imports = higher Canadian dollar.”
——————————————–
That right there…is some very f—ed up reasoning.

#114 Statsfreak on 04.12.15 at 10:28 pm

Drop amortization to 20 years.
Up minimum down payment to 20%.
Sit back & watch.

#115 Mark on 04.12.15 at 10:37 pm

“Money flows to where it earns the best return and prospects of capital preservation. ”

Return is a combination of currency appreciation (depreciation), and the interest rate applicable. Capital gains or losses are also factors in determining total return, although for short term instruments (ie: T-Bills) we can ignore this.

Deflation implies that money is getting more valuable, which is exactly the reason why policy rates in Canada are falling, and will continue to fall. The return that isn’t paid in “interest” thus occurs as currency appreciation.

You are right that capital attempts to flow to the highest return, but a low interest rate does not necessarily mean a lower return. In fact, if you look at low-rate currencies such as the Yen, the US dollar, they have experienced superior returns to that of the “high-rate” currencies. It is actually high rates that drive currency depreciation, as the issuers of the currency are effectively obligated by the markets to pay higher interest in order to compensate for currency depreciation.

Deflation implies strong demand for currency to repay existing debts which become more expensive to service on account of rising risk premia. This is what is going to push the CAD$ up as RE prices continue to fall.


If rates here decline further while the US tightens monetary policy, you can count on a weaker loonie.

I disagree. Higher USD$ rates will only occur in an environment of USD$ currency depreciation (ie: rising inflation), and will only, at best, compensate for loss of purchasing power in the USD$. High rates, not low rates, are associated with currency depreciation.


Why would foreign investors bid up the currency of a country with an economy so limp it has to loosen policy while its neighbour and dominant trading partner moves in the opposite direction?

Most activity in the Canadian dollar is by Canadians, not foreigners. Additionally, as Canadians go into severe austerity in response to falling RE prices, imports to Canada will be significantly attenuated, while there will be a significant surplus of domestic goods available for export. Thus trade flows will increasingly favour inflows to Canada. Additionally, a currency that has strengthening purchasing power, as is typical in deflation, is definitely very attractive for foreign investors. In contrast with the USD$ which is most likely close to, or at is peak and is ripe for a fall with higher interest rates.


What happened in January blew up your argument.”

Not at all. Crude oil losing 50% of its value in a very short time drove the CAD$ down, but it has actually been quite strong given the sheer severity of the drop and is now strengthening. Further rate cuts will continue to strengthen the CAD$ as domestic consumer confidence wanes, CPI continues to trend negative, and the resource sector gets a bit of a lift as speculators start to position to the long side for the inevitable comeback.

When you’re stuck in a hole, stop digging. — Garth

#116 Smoking Man on 04.12.15 at 10:39 pm

Mark , your getting you ass spanked by the dogs.

I suggest if you want to regain some credibility follow this dues advice…

https://youtu.be/MTPxWkBgW6U

#117 Fuzzy Camel on 04.12.15 at 10:53 pm

#48 Waterloo Resident

Yes, that is what I’ve been saying. If we start having deflation at 0% interest rates, there is no more ammo to stimulate the economy. And Yellen is talking about raising rates in the summer, which is going to make things 1000x worse.

#118 Mark on 04.12.15 at 10:55 pm

This has been going on a while. It must be three years or so since TD pulled our (unused, lowish rate, unsecured) line of credit and said we could have a higher rate secured LOC for more interest (secured on our house). It’s hard to see any pattern to it.

So TD was basically providing you a standby facility, for which they were receiving no compensation, that would basically only be drawn at a time of significant financial distress on your part — and you’re wondering why they pulled out of the arrangement?

Also, usually secured lines have lower rates than unsecured lines for obvious reasons. If TD wrote you an unsecured line for a rate less than the going market rate on a secured line, then it is perfectly logical that they move to rectify that situation.

#119 Nemesis on 04.12.15 at 10:57 pm

#CousinFrankie&LeeIaccoca… #WereWellPleased… #EssentialMadMenAmericana….

http://youtu.be/zwC1icvy4mg

http://youtu.be/OGduTvbiUpo

#120 Fuzzy Camel on 04.12.15 at 10:57 pm

#105 Smoking Man

Love the 80’s workout shows. I was maybe 6 at the time, but I found it very stimulating in a way that was confusing to me at the time. And yes, the feminazi’s would throw a fit over it. Apparently showing women exercising is objectifying them and fat shaming women or some god awful cultural marxism non-sense they come up with.

#121 Smoking Man on 04.12.15 at 11:00 pm

#112 Wildnutter on 04.12.15 at 10:14 pm
#105 Smoking Man on 04.12.15 at 9:51 pm

Back in the day….

Mellenials this is why you missed,

Can you imagen this being played today, the femanazis would be all over it.

Nastalaga Boomers.

20 Minute Workout 2-1 (Arlaine, Holly, Bess): https://youtu.be/RA1Y6ks2OPw
——————————————————
So SM has the hots for retro Jane Fonda…

Millennials didn’t miss anything…they have porn 24/7 on their phones..

This of course has lots to do with RE since it is meant to be in your home workouts for stay at home moms.. to work up a sweat before the pool boy arrives.
….

I always found watching it good for my heart. Especially if no one was around.. Good point about the pool boy. Funny my kids resemble the bastard.

The good old days when Bruce Willis and me had hair.

#122 Really Fed Up! on 04.12.15 at 11:04 pm

Fed up # 83

As much as I agree with all of this, Canadians are also victims of having their country sold down the river by our governments, through lax lending and foreign ownership standards, market manipulation, greedy banks, corrupt developers, CMHC and real estate associations. I know that many can choose not to buy and rent, but seriously why should they? Why do we live in a country where putting a roof over your head poses a potential financial catastrophe anywhere near where decent jobs can be found?
__________________________________

The Canadian government is ruining people’s lives. Why does the Canadian government reward the financially foolish and forcing the financially prudent to either become foolish or put their lives on hold? Is the Canadian government planned to destroy Canada? I’m sick of putting my enjoyment of life on hold but to go into massive debt and financially ruin my life isn’t really a good option . I can’t believe I fell for NA propaganda of democracy and free markets. There is no such thing in canada and realtors on this blog opening laugh.

#123 Really Fed Up! on 04.12.15 at 11:15 pm

Speaking of uneducated realtors. You have to see this. Read the description part where they talk about the property. You can’t make this up. Realtor smokingman is this you? lol Yeah realtor have high school education…lmfao

Spotles 2Br Split Plan~new Bath~ovrlokng Beutful Gardns~grante Cuntrs & Island~stanles Stel Aplancs~2 Renovatd Baths~westrly Exposur~enjoy Stuning Sunsts~stps To Sunybrok Prk/Edwrds Gardns~nature Trals~mints To Dwntwn~d.V.P~eglnton Bus~great Prkng Spot (Near Dor)~games Rm~exrcis Rom~guest Suit~car Wsh Bay~enjoy 11.5′ Balcony~wlkwy & Gazbo~maintnanc Includs Evrythng Excpt Cable Tv/Phone~new Bathrom In Mstr Bdrm~new Paint~new Vanity In 2nd Bathrom…

http://www.remax.ca/on/toronto-real-estate/305-1103-leslie-st-treb_c3158369-lst/

The listing is taken from MLS where there is a word limit. It actually takes literary skill to drop so many letters and yet impair no meaning. — Garth

#124 Van Doom on 04.12.15 at 11:23 pm

The Canadian government is ruining people’s lives. Why does the Canadian government reward the financially foolish and forcing the financially prudent to either become foolish or put their lives on hold? Is the Canadian government planned to destroy Canada? I’m sick of putting my enjoyment of life on hold but to go into massive debt and financially ruin my life isn’t really a good option . I can’t believe I fell for NA propaganda of democracy and free markets. There is no such thing in canada and realtors on this blog opening laugh.

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

All empires blow up. Now that we are globally connected we are going to have something which has never happened on earth which is a global destruction of all Govt soon. They do it every time as Govt only thinks of itself, how it can enrich itself and how it can remain in control of the plebs.

Get ready……

#125 Nemesis on 04.12.15 at 11:32 pm

#SmokingManBruceWillis… #EnjoysFondReminiscences…

http://youtu.be/82ZhZULZxvM

#126 SydCixel on 04.12.15 at 11:39 pm

Were you riding one of the many Harleys that I saw on the 400 and 401 today?

#127 Bottoms_Up on 04.12.15 at 11:46 pm

#108 Linda on 04.12.15 at 9:59 pm
—————————————————-
They’re probably all investors. Let’s say 5% down and they owe $110,000 on the unit, which carries for about $500/mo these days. Add fees and property taxes, perhaps $750/mo.

What would these units rent for?

#128 Bottoms_Up on 04.12.15 at 11:50 pm

#106 Setting the Record Straight on 04.12.15 at 9:53 pm
——————————————————————
I wonder if ‘The American’ knows the state his banks are in:

According to the Fed’s main measure, capital at the eight largest American banks averaged 12.9 percent of assets at the end of 2014, well above required regulatory minimums.

In contrast, Mr. Hoenig’s calculations show that capital at those same banks averaged only 4.97 percent at the end of 2014.

In a recent speech, Mr. Hoenig noted that under American accounting rules, derivative holdings add $300 billion to the balance sheets of five top banks — JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley. Under international rules, the holdings would add $4 trillion.

Read more at: http://globaleconomicanalysis.blogspot.com/2015/04/former-fed-governor-thomas-hoenig-says.html#ZZPKPKoXrCyj1mUL.99

#129 waiting on the westcoast on 04.12.15 at 11:51 pm

#83 Fed-up on 04.12.15 at 8:23 pm
“#75 Daisy Mae on 04.12.15 at 7:40 pm

#69 Sheldor: “(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth

…snip…

As much as I agree with all of this, Canadians are also victims of having their country sold down the river by our governments, through lax lending and foreign ownership standards, market manipulation, greedy banks, corrupt developers, CMHC and real estate associations. I know that many can choose not to buy and rent, but seriously why should they? Why do we live in a country where putting a roof over your head poses a potential financial catastrophe anywhere near where decent jobs can be found?”

My Dad once asked me… ‘if all of your friends jumped off a bridge… Would you?’.

I said no and meant it.

It is too easy to rationalize why you should do something stupid. Of course, you need to feel comfortable knowing your friends will think you’re an idiot for not doing what they do…

#130 Bottoms_Up on 04.12.15 at 11:56 pm

#97 Nora Lenderby on 04.12.15 at 9:19 pm
————————————————–
That is true, but it is naive to think that anybody can just uproot and find that ‘decent’ job elsewhere.

Where would a research scientist find adequate employment? You would need to be at one of a handful of university towns. You can’t quite go to ‘any’ city/town and find equivalent employment in that field. And it is likely similar for a lot of fields.

#131 Former Fool on 04.13.15 at 12:00 am

Was having dinner tonight with the parents and siblings. Eventually the conversation turned to how I apparently made a mistake of selling my house and investing the proceeds into a balanced portfolio. Apparently, houses always go up without an upper bound and I’m dumb for selling mine and renting. I simply told the family I’d given up trying to talk finances and investing with them, as they establish their views through traditional cultural views (R/E good, stocks bad, renting waste of money) and pretend math (no lost opportunity cost on a downpayment on a house, you need to live somewhere).

On another note, this one’s directed to Mark. Buddy, I think you’re quite an intelligent and articulate guy, and your posts are well thought out, even if I disagree with you sometimes. What I don’t get: where in the world do you find the time for all of your posts? It must take some considerable time to read the posts, everyday, pick out the ones you find interesting, and then post your own thoughts on each poster’s subject.

Not trying to insult you Mark, just saying, I have no idea where you find the time to hammer out those posts. Hopefully you have time because you don’t have to work, as a result of a nice nest egg giving you enough to live on every month. In which case, comment on that nest egg, I’d like to learn more on building it. ;-)

#132 Bottoms_Up on 04.13.15 at 12:01 am

#85 CREIT on 04.12.15 at 8:46 pm
————————————————–
The banks are trying to please shareholders in the face of a lower loonie and lower mortgage interest rates. Hence them jacking interest rates on LoCs. Poor choice of action though, I think it’s a great way to lose customers.

#133 waiting on the westcoast on 04.13.15 at 12:02 am

Mark – for your own benefit, I would suggest you keep your posts to the more tactical side of finance. You have some solid answers about portfolios, real estate, etf’s, budgeting, etc.

You seem to be a good guy and god knows how you have the time to answer or refute so many posts. But take some more classes on macro-econ. It is a disservice to speak with such high authority when you don’t thoroughly understand the breadth of the concept.

You keep focusing on one concept/variable when there are often 10+ at work. If macro was so formulaic, there wouldn’t be so many economists who miss their predictions.

That said, I have had a few predictions not come through as well but at least I think I come across that I ‘believe’ that X will happen by Y.

Good luck!

#134 Rexx Rock on 04.13.15 at 12:04 am

The Canadian government is fueling real estate and indirectly creating capital controls.With the cad depreciating rapidly it stops people investing else where.The tyranny of this government will continue because they know Canadians are bunch of milk cows and beef cows if needed.Our government has decided that we will have Japanese style rates forever.The best you can do is get out of cad and have a variable mortgage for the rest of your life.

#135 Bottoms_Up on 04.13.15 at 12:15 am

(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth
————————————————————
Garth I would change the emphasis on that, prices are what they are by a confluence of factors, including, as you have bleated on about:

1) CMHC
2) low interest rates
3) long amortizations
4) minimal down
5) raiding RRSPs
6) cash back mortgages

Most if not all of these stem from government policy (either direct policy as in CMHC, or indirect as in not preventing cash back mortgages).

So, it’s not really ‘Canadians’ that are responsible for stupid house prices, but government policy that has been enacted (or not) for the ‘betterment’ of our economy without input from the average Canadian. In fact, you have said yourself you had voice opinion in opposition to some of these policy measures. A lot of good that did.

#136 Waterloo Resident on 04.13.15 at 12:19 am

How can our youth be so smart yet so stupid at the same time?

– Never before have such a generation been so overly-educated yet so under-employed.

Go into any community college and sit in on a class for a few days, a class that you yourself might have taken when you were in your 20’s, and you will be totally blown away by how much more today’s students have to learn and memorize compared to what it used to be in the 1980’s.

Today students literally have to memorize phone books of information, something my older generations never had to when they were learning their stuff.

But in the 80’s there were jobs and houses were affordable. You could actually have a ‘GOOD’ life on what you were earning in a job back then. Now the new grads first have to go get a volunteer job before they even begin college, then work as an intern DURING their college years to show employers that they have a good work ethic, and then due to a lack of jobs they have to continue to work in 2 or 3 more stints as an unpaid intern after they graduate, all in hopes of building up enough experience to land a real part-time paying job some day. And those ‘paying’ jobs are getting harder and harder to come by with each passing year.

So why on Earth do these same kids buy such expensive condos they cannot afford? Because they all believe that buying condos/houses is the ONLY WAY to make money in today’s world, because jobs sure as heck won’t give you an income you can survive on.

So that’s the main reason why you see such mania in houses, its because to a whole generation its a way to make an income to live off of, sort of like a second job for them.

I really feel sorry for today’s youth, they really do want to participate in the economy, they are incredibly smart (brilliant actually) and so extremely over-educated for working in Dollarama stores and the like, yet they have been given such a crappy lot in life, with huge student debt, no employment prospects, and in a few years massive economic crash as our country will start to imitate what Japan has been going through these past 20 years.

So many of the less intelligent among us were shown the fact that there were no jobs for them in today’s hyper-competitive job markets, so they went out to Alberta to get jobs in the tar-pits. Now they are losing those jobs too and there is nothing for them, nothing. I really do pitty today’s newly unemployed workers, it has never been so hard to get a job, not unless you go back to the 1930’s that is.

#137 east van on 04.13.15 at 12:22 am

Garth, as a former cabinet minister could you please tell us: how independent is the Bank of Canada Governor? Does the PM actually make rate decisions?

#138 Squirrel Meat on 04.13.15 at 12:35 am

International carbon credits in BC

http://www.theglobeandmail.com/news/british-columbia/bc-ndp-alarmed-over-farmland-lost-to-tree-planting-for-carbon-credits/article23893267/

#139 Leo Trollstoy on 04.13.15 at 12:43 am

Mark insists on getting schooled.

Grab the popcorn.

http://www.blippitt.com/wp-content/uploads/2011/03/Popcorn-02-Stephen-Colbert.gif

#140 Rabbitt One on 04.13.15 at 12:43 am

Speaking about currency and interest rates.

Deflational environment tend to push its currency higher in long term.
In old days, emerging market’s high interest rate, inflational environment, pushed their currency lower relative to USD over time.

In Canada’s situation, as Garth said, CAD currency would not rise with further interest rate cut.

One of the factor is Canada’s massive debt, as a nation and individual.
It worked as discounting inflated assets by currency deflation.
JPY strengthen after their bubble time, USD strengthen last six month or so, not merely due to their ZIRP policy, it is also to do with their debt level.

Money will not flowing to Canada because of rate cut. Period.
This, in my opinion, is a catastorophe.

#141 Brydle604 on 04.13.15 at 12:45 am

#115 Good one Garth.
The Law of Holes
If you are in one, stop digging.
Rules to live by for the indebted.

#142 liquidincalgary on 04.13.15 at 1:00 am

speaking of suffering retail:

safeway/sobeys may be having some difficulties.

service techs are going unpaid. some stores (safeway) are without ingredients/product for at least a month.

the electronic ordering system, ushered in by sobeys, is a system formerly used by safeway, get this, in the 1980’s!!

#143 BS on 04.13.15 at 1:10 am

88 Leo Trollstoy.

Until he was banned for trolling by spreading anecdotal, xenophobic and incorrect opinions.

Banned for spreading anecdotal and incorrect opinions? LOL.

Leo, obviously you have a inferiority complex when it comes to Mark. Try to offer some ‘correct opinions’ instead of trolling.

#144 BS on 04.13.15 at 1:24 am

The Canadian government is ruining people’s lives. Why does the Canadian government reward the financially foolish and forcing the financially prudent to either become foolish or put their lives on hold? Is the Canadian government planned to destroy Canada?

The Canadian government is not ruining peoples lives. People are free to make their own decisions. Buying a house is not a necessity when you can rent similar housing at a fraction of the cost and risk.

There is no reason to put your life on hold. Renting is not ‘on hold’ and in many respects is better than owning. Get over it.

The Canadian government is trying to get elected again. The housing bubble got Harper a majority last time and by keeping it inflated it will probably get him another majority. Blame the voters. I don’t hear the Federal Liberals or NDP coming up with policy changes that would deflate the bubble or change CMHC policy. They are critical of Harper on pretty much everything but housing. Clearly the majority of the voters want high housing prices. If either alternative party was elected there is no indication anything would change with respect to government policy on housing.

#145 Matt on 04.13.15 at 1:41 am

Quick question for you Garth: CREB.com shows that 580 homes have sold in April so far in calgary and there are currently 5955 active listings. It also says that “days on market” sits at 39. With nearly 6000 listings and only 580 sales in 15 days, how can the days on market be only 39?

#146 Matt on 04.13.15 at 1:42 am

Sorry, 12 days.

#147 Nagraj on 04.13.15 at 2:41 am

Me to Frankie the Cat: Frankie, are you afraid of Ebola?

Frankie: Wozzat?
– a giant mouse from Africa
Frankie: I fear no rodent.

– are you afraid of Avian Flu?
Frankie: Cats are immune to Revenge of the Chickens disease.

– Swine Flu?
Frankie: Get’em kleenex.

– Mad Cow Disease?
Frankie: Paging Dr. Freud!

– West Nile Virus?
Frankie: I fear no insect. (But toads make me gag.)

– the oceans drying up?
Frankie: I hate getting my incomparably beautiful coat of fur wet.

– how about
Frankie: You, Rockefeller, are beginning to bore me.

– the ozone layer falling?
Frankie: Look, person, the fact of the matter is that these PHOBIAE you speak of are a consequence of IDIOT CERTITUDE, two sides of the same coin. People (thanks be to the Great Cat God in the sky that in not one of my 7,433 previous lives was I ever reduced to homo”sapiens”hood) who are so sure that house prices will always go up and interest rates never, will be afraid of ANYTHING. Wotta laugh. Neverneverland by day, sneaky little nightmares by night. Purrr.

#148 Van Doom on 04.13.15 at 3:42 am

Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…….

https://www.youtube.com/watch?v=kU4FTn-8EPI

#149 Mountain Man on 04.13.15 at 4:07 am

Another dog photo.

#150 Drop to Drink on 04.13.15 at 6:08 am

GE pulled the plug ahead of everyone. Smart bunch.

No US Fed increase, perhaps never. It keeps getting pushed out, over and over. Maybe by 2020.

#151 Julia on 04.13.15 at 6:44 am

# 135 Bottoms up
“So, it’s not really ‘Canadians’ that are responsible for stupid house prices, but government policy that has been enacted (or not) for the ‘betterment’ of our economy without input from the average Canadian. ”

It is still people that make the choice to buy or not, bidding wars and all. Nobody if forcing people to borrow or buy.

#152 Bottoms_Up on 04.13.15 at 7:13 am

#145 Matt on 04.13.15 at 1:41 am
————————————————
1 of 2 reasons, they may be actually calculating ‘days on market’ for the homes that actually sold (instead of taking into account all stale listings).

Or, they are pulling listings prior to them selling, and ‘relisting’ them, to make them look like a fresh listing.

But you’re right, anyone with two firing neurons can see the actual days on market is closer to 130.

#153 Ralph Cramdown on 04.13.15 at 7:35 am

#145 Matt — “CREB.com shows that 580 homes have sold in April so far in calgary and there are currently 5955 active listings. It also says that “days on market” sits at 39. With nearly 6000 listings and only 580 sales in 15 days, how can the days on market be only 39?”

DOM is how long it took to sell the average property that sold. Unsold properties have no effect on it. Also, if a property sits for sixty days with no action, is relisted at a lower price and sells the next day, its DOM will be ‘1’.

#154 Ralph Cramdown on 04.13.15 at 7:44 am

Funny how the big debate is whether the Bank of Canada will lower rates this week, and the blog is full of stories about credit lines pulled and rates raised, and we’ve all gotten those notices with our credit cards about the new higher penalty rates. What are you, a bunch of deadbeats? :-)

And yet the banks have moved back into condo construction lending after an absence of a few years, are writing as many guaranteed mortgages as they can get, but didn’t lower prime by as much as the BoC’s cut last time.

Welcome to the world of pushing on a string. Central bank easing being ignored, or even overwhelmed by commercial bank tightening.

#155 Victor V on 04.13.15 at 8:11 am

https://ca.finance.yahoo.com/news/bank-canada-keep-rates-hold-153007150.html

OTTAWA/BENGALURU (Reuters) – One rate cut is probably enough for the Bank of Canada, which is no longer expected to follow up January’s surprise move and instead is likely to see if the economy recovers after a rough start to the year, a Reuters poll showed.

The latest consensus forecast from economists marks a shift from a Reuters poll in February, when most anticipated the central bank to trim rates once more by midyear.

The median forecast of about 40 economists found rates would stay at 0.75 percent through the first half of next year. They expect the next move to be a rate hike, to 1 percent in the third quarter of 2016, ending next year at 1.25 percent.

#156 maxx on 04.13.15 at 8:22 am

#55 Karma on 04.12.15 at 5:13 pm

“If we ignore history…..”

How does this gene manage to survive?

#157 Karma on 04.13.15 at 8:54 am

Expect more articles like this:

“Downsizing Seniors take the money and run”

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/downsizing-seniors-take-the-money-and-run/article23880518/

#158 The American on 04.13.15 at 8:59 am

At #128: Bottoms_Up, I do know the state of American Banks. They’re using common sense that was abandoned in the Bush years. I also know Canadian banks have been in a push of their balance sheet, creating the mother of credit orgies in the entire G20. Canadian banks also received, ounce for onnce, a bail out that was nearly 60% larger than those in the U.S., and at the expense including the American tax payer (thank you, you’re welcome). Yes, they received “liquidity support” (that’s a bullshit Canadian way of saying “bailout,” especially when you consider many of the Canadian banks received monies that totaled more than the collective value of the entire company).

Add it all up, and it is why your so-called “profitable” banks are trading lower than their U.S. counterparts today. U.S. banks are more attractive, more prudent, and more sound than Canadian banks. Everyone knows its a bullshit scam, dude, for Canadian banks, and the party is Canada is O V E R. As I’ve always said, Canadians seem to be the last to know about what’s *really* going on in their country. Its not surprising when your entire three stations and media outlets are all government-backed. Keep on drinking that Kool-Aid, Bottoms_Up! Let us know how it ends for you. Ever read a paper? No? You should learn.

http://www.wallstreetdaily.com/2015/01/14/canadian-banks-dangerous-yield/

http://www.theglobeandmail.com/report-on-business/rob-magazine/perils-of-the-caribbean/article23199267/

http://www.huffingtonpost.ca/2014/04/01/too-big-to-fail-canada_n_5068508.htmlca

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

#159 David W on 04.13.15 at 9:04 am

Re Surrey micro-condos. There’s a sucker born every minute. This is from their “Advertorial” at http://www.vancitybuzz.com/2015/04/evolve-surrey-west-village-condos/.

“Working together with their lenders and Macdonald Realty Platinum Project Marketing, WestStone Group recently announced a promotion for the first 200 purchasers at Evolve. Buyers are looking at an entire first year’s worth of mortgage payments being offered at as little as a dollar a day—or $30 a month. While mortgage payments range from $1 to $30 a day depending on the unit size and type, 90 per cent of the homes are available for under $20 a day for the first year.”

#160 Holy Crap Wheres The Tylenol on 04.13.15 at 9:10 am

#148 Van Doom on 04.13.15 at 3:42 am

Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…….

https://www.youtube.com/watch?v=kU4FTn-8EPI
_____________________________________________
Smoking Man will not forgive you for adding fodder to his perusal list. Now he has to read it. “The Money Mafia”

#161 Canada is a Money Laundering Haven on 04.13.15 at 9:16 am

Have talked to several lawyers in Toronto telling me they know of many incidents of money laundering using Toronto properties. Values being inflated huge because of this.

#162 waiting on the westcoast on 04.13.15 at 9:26 am

Mark – this will help….

http://www.bloomberg.com/news/articles/2015-04-12/dollar-s-rise-reshuffles-global-economy-into-winners-and-losers

#163 Hot Albertan Money on 04.13.15 at 9:33 am

I don’t think I fully understand what you mean by using low interest rates to trash debt, but at the same time you say we should invest instead of making lump sum payments on our mortage (see: http://www.greaterfool.ca/2015/03/15/insulation/)

We have a mortgage, TFSA’s, RRSP’s, and RESP’s… and still find ourselves with some extra money at the end of the month. What should we do with the extra cash?

Thanks

Invest it in a joint non-registered portfolio, of course. — Garth

#164 Cory on 04.13.15 at 9:42 am

#56 Terrier

What kind of car give up after 9 years. Must be poor maintenance. Mine is 13 yrs with 365K and still looks great and just keeps on driving.

#165 Capt. Obvious on 04.13.15 at 9:44 am

Seldom is it so easy to call a better investment option. We’re at the point where everything would need to turn out perfectly right for someone purchasing today to make money over the next ten years. Equivalent to buying growth stocks with stratospheric P/E ratios.

#166 ian calderwood on 04.13.15 at 9:57 am

We stepped back from the Cowtown market last summer. We sold two years plus ago and have been renting since. Spouse was getting house horny. This summer it was multiple offers and ease up on the inspection requirements. So we walked. Well, the Mrs. walked with me pushing her, I ran.

After three months of travel to avoid winter we return to Cowtown only to find places we looked at in early December still on the market…and some at reduced prices. We figure the real downturn in prices will come in Sept/Oct. But it will probably not be enough to make this happy renter bite.

Earning considerably more after tax on our equity investments over the past 30 months than we would have if we still owned the shack. With much less risk and far greater flexibility. And this does not even take into account the substantial drop in our monthly costs-actual and opportunity costs. One of the benefits of being empty nesters.

#167 Bottoms_Up on 04.13.15 at 10:18 am

#165 Capt. Obvious on 04.13.15 at 9:44 am
——————————————————-
It is not suppose to be normal to make money in real estate (unless you’re a builder, agent, banker or landlord).

House prices are suppose to rise with wage inflation. Along the way, you spend on maintenance and repairs, property taxes, utilities. If you break even at the end of the day you’re lucky.

#168 Bottoms_Up on 04.13.15 at 10:23 am

#158 The American on 04.13.15 at 8:59 am
——————————————————
Ok, do your banks have $300 billion or $4000 billion in derivatives?

Which one is it eh?

#169 Bruce M on 04.13.15 at 10:29 am

Garth I only see two white guys other than the salesman in the buying frenzy photo above. Are you sure only 5% of the buyers are HAM in Van?

HAM = Hot Asian Money (from Asia). It does not mean Canadians of Asian heritage. Comments like yours divide people by how they look. That’s called racism. — Garth

#170 what a bubble? on 04.13.15 at 10:38 am

I don’t know if you noticed but Manufacturing PMI significantly dropped in March in Canada (48.7) . Money doesn’t go to the real sector of economy. Conservatives can cut rates further – too bad – it won’t help manufacturing in Canada.

#171 Squirrel meat on 04.13.15 at 11:08 am

Well that’s likely to be swell for manufacturing in Ontario

http://www.theglobeandmail.com/news/politics/wynne-unveils-ontarios-plan-to-join-emissions-cap-and-trade-system/article23895069/

#172 Bottoms_Up on 04.13.15 at 11:11 am

#164 Cory on 04.13.15 at 9:42 am
———————————————
You would not believe cars these days. Those Toronto dudes on CP24 that talk cars say if you get 3-5 yrs ‘without problems’ from a NEW car you are LUCKY.

http://www.cp24.com/talk-shows/auto-shop

#173 Chris in Nanaimo on 04.13.15 at 11:29 am

So what’s the advantage of joint non registered investment accounts over single then? Seen this mentioned a couple of times.

More tax efficient I presume?

(a) Income-splitting. (b) Estate planning. — Garth

#174 SWL1976 on 04.13.15 at 11:31 am

#43 jsan

Seriously, what are they trying to do, purposely destroy the economy to allow them to usher in a North American union? It really sometimes makes me wonder???

You have your finger on the pulse but the rabbit hole is much much deeper

#148 Van Doom

Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…….

https://www.youtube.com/watch?v=kU4FTn-8EPI

Thanks for the link. Never heard of this guy until now, but he sure does have his finger on the pulse.

Reality is that Canadian RE is cooked and now just so happens to be a perfect distraction to keep the enslaved too busy to put the pieces together, all while keeping the smart ones busy bickering about it.

Look at the big picture folks. Many people are too focused in on a small problem close to home… But in order to see where this is going stand back and refocus to see the big picture… Its pretty clear

Something big is going down this summer… Do we have what it takes to unite and overcome the banksters or are we going to simply going to bicker amongst ourselves all while the banksters and ‘elite’ seal or fate?

I guess that is the trillion dollar question…

#175 Squirrel meat on 04.13.15 at 11:32 am

Freedom 30!

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/three-lessons-you-should-learn-from-a-30-year-old-retiree/article23891290/

#176 Daisy Mae on 04.13.15 at 11:33 am

#89 Fed Up: “Canadians are also victims of having their country sold down the river by our governments, through lax lending and foreign ownership standards, market manipulation, greedy banks, corrupt developers, CMHC and real estate associations…..”

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

Agree totally. Lots of blame to go around…and it started with idiotic government policies.

#177 Holy Crap Wheres The Tylenol on 04.13.15 at 11:36 am

#158 The American on 04.13.15 at 8:59 am
Bottoms_Up! Let us know how it ends for you. Ever read a paper? No? You should learn.
_____________________________________________
According to your previous comments Canadians are American wannabes so what’s your point. I guess Canadians are simply emulating what Americans did ten years ago. But then again what do I know as I only graduated from a university. Guess which one? “Die Luft der Freiheit weht”
Man you sure have a hard on for the welfare of Canadians by pointing out all of our foibles! “Let he who is without sin cast the first stone” What and why exactly do you care about Canadians discussing issues on a Canadian blog since we don’t count in the ? I digress, I’m sorry what where you saying?

#178 NEVER GIVE UP on 04.13.15 at 11:42 am

#29 Sheldor on 04.12.15 at 2:38 pm

(6) Educate Canadians that they have nobody to blame but themselves for stupid house prices. — Garth
—————————————————————–

C’mon Garth. We all know and you said it yourself in the preamble.
The Government is manipulating the market for political gain.
70% of the voters are homeowners and if you make them feel rich they will vote for the incumbent.

The masses don’t understand this. They don’t even know what their credit card balance is.

But in our local market we have the double factor of high foreign ownership and the Government manipulation.

One problem with Sheldors’ solution is that a large portion of foreign ownership is owned by local proxy buyers.

If you ever lived in the third world you would soon learn that all laws are to be used to keep competition out once you have learned the way to get around that law.

#179 Spiltbongwater on 04.13.15 at 11:49 am

#123,

It seems that the Realtor must have a disability because here is another of his listings

“Mgnifcnt Milion $ View R-A-V-I-N-E Proprty~spcious Detchd Hme On A Lrg 53.5′ X 113.5′ Fet Lot~quiet Stret In The Manor & A True Natur Lovrs Paradis~qulity Hrdwd Undr Carpt~new Wndws 2014~huge Cold Rom~sprte Side Entrnc To Larg Bsmnt~pride Of Ownrshp~clos To Schls-Shops-Prk-Bus To Subwy- Esy Acces To Hgwy~ New Garg Dor Opnr (Can Be Programd On Your Phone).

Extras: Fridge~stove~washer~dryer~all Elf’s~watrprofng Ne Side Of House 2011~watrprofng Se Side Of House 2013~e Side Of Roof Replacd 2012~eavstrugts 2012~new Wndws 2014~cac~2014~new Garg Dor Openr 2015~duct Clening 2012.”

#180 Blacksheep on 04.13.15 at 11:56 am

This ones for Smoking man, cause I know he’s a big fan:

http://www.torontosun.com/2015/04/13/wynne-unveils-ontarios-plan-to-sign-cap-and-trade-deal

#181 bdy sktrn on 04.13.15 at 11:59 am

The B.C. government and Providence Health Care will announce a new stateof-the-art “campus of care” will be built on 7.5 hectares of vacant land beside Pacific Central Station, near Terminal Avenue and Main Street.

The cost is estimated to be between $1 billion and $1.2 billion.
http://www.vancouversun.com/health/Paul+Hospital+move/10967245/story.html
—————————————–
buy strathcona RE (land) now.

#182 The American on 04.13.15 at 12:07 pm

At #177: Holy Crap Where’s the Tylonol, then perhaps Canadians should stop casting the first stone, right? Re-read today’s points. Bottoms_Up did his *best* by directly addressing me with a ridiculous topic @128. My response came later. I cast the first stone? LMFAO. As usual, typical Canadian delusional rhetoric coming from your side, and as usual, Canadians completely unaware to their own faults as you have this government-driven propaganda that has lead you to believe you’re without your own sins. Its pathetically laughable.

As for your second question as to why I might care about my Canadian friends? Well, I’ve explained that numerous times in previous strings. Read if you will. I guess I could say its the same reason Canadians have such a hard-on to constantly question their next steps, comparing themselves to the U.S., constantly pointing fingers, and taking very little responsibility. Ever heard of “good for the goose?” Every time you point a finger, there are three pointing right back at you.

#183 The American on 04.13.15 at 12:24 pm

At #176: Daisy Mae, you are concise and I agree with you nearly all the time. It’s nice to know there is a voice of reason out there.

#184 Squirrel meat on 04.13.15 at 12:28 pm

#174 SWL1976 on 04.13.15 at 11:31 am

#43 jsan

Seriously, what are they trying to do, purposely destroy the economy to allow them to usher in a North American union? It really sometimes makes me wonder???

You have your finger on the pulse but the rabbit hole is much much deeper

#148 Van Doom

Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…….

https://www.youtube.com/watch?v=kU4FTn-8EPI

Thanks for the link. Never heard of this guy until now, but he sure does have his finger on the pulse.

Reality is that Canadian RE is cooked and now just so happens to be a perfect distraction to keep the enslaved too busy to put the pieces together, all while keeping the smart ones busy bickering about it.

Look at the big picture folks. Many people are too focused in on a small problem close to home… But in order to see where this is going stand back and refocus to see the big picture… Its pretty clear

Something big is going down this summer… Do we have what it takes to unite and overcome the banksters or are we going to simply going to bicker amongst ourselves all while the banksters and ‘elite’ seal or fate?

I guess that is the trillion dollar question…
——————————————-

That fellow sure does have his pulse on what runs the world. Hilarious.

that “there are live ETs on Earth at this present time, and at least two of them are working with the United States government”.

#185 Panhead on 04.13.15 at 12:28 pm

Was over at a co-worker of my wife this weekend as she and her hipster hubby were showing off their new condo in Burnaby. Small but usable. Nice view of an old industrial area that “will be renewed.” no parking. I guess I shouldn’t have taken a look in the kitchen cupboards though. Look great from the outside but are so shallow they only hold side plates. Good for people on a diet I guess …

#186 cramar on 04.13.15 at 12:29 pm

#136 Waterloo Resident on 04.13.15 at 12:19 am
How can our youth be so smart yet so stupid at the same time?

– Never before have such a generation been so overly-educated yet so under-employed.

—————-

Just this weekend, I met a young man who was telling me that he is in debt with massive student loans, broke, and there are no jobs available. He went on about there are only part-time positions, giving me the real unemployment rates in his city, and how so many university grads are unemployed or working in menial jobs. He ranted on about the con-job of telling students to “get a degree to get a good job.” A lie that all levels of society including governments are perpetuating.

When he finished, I suspected something so I asked what was his degree in?

“Journalism.”

(Suspicion correct.) I then asked if he had checked out before entering university the employment prospects and whether the there would any jobs available in his chosen program—and whether this is a good career path to follow?

“No!”

Ah grasshopper, if you wish to have a better life, learn to make better choices!

#187 Balmuto on 04.13.15 at 12:44 pm

#115 Mark

“…CPI continues to trend negative…”

US CPI is also trending negative. And US inflation is lower than Canada’s:

US CPI Feb. 2015 0.2%
US CPI Feb. YOY 0.0%
CA CPI Feb. 2015 0.9%
CA CPI Feb. YOY 1.0%

That may change, of course, but your inflation differential argument is nothing more than speculation at this point.

#188 Daisy Mae on 04.13.15 at 1:11 pm

#179: “Extras: Fridge~stove~washer~dryer…”

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

He could have cut that down further — ‘frig,stov,wash/dry’. LOL

#189 Randy Randerson on 04.13.15 at 1:14 pm

In reference to Freedom First’s yesterday comment, I wholeheartedly agree. Date women, don’t get too attached. Always look out for No. 1 and you’ll find success and happiness in life.

Selfish? Perhaps. But that’s life. If you’re THAT altruistic, you can always donate one of your kidneys. Humans can live fine with just one anyway.

#190 Daisy Mae on 04.13.15 at 1:22 pm

#185 PanHead: “I guess I shouldn’t have taken a look in the kitchen cupboards though. Look great from the outside but are so shallow they only hold side plates.”

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

Yes….and I know new buyers who were shocked and have complained. Very shallow. I guess developers figure it gives the illusion of a more spacious kitchen when, in fact, the cupboards are useless if you can’t lay a dinner plate flat.

#191 Mike T. on 04.13.15 at 1:55 pm

the picture completely encapsulates what I love about Earth, life, animals, and creation

why can’t cows love dogs?

#192 Smoking Man on 04.13.15 at 2:15 pm

#180 Blacksheep on 04.13.15 at 11:56 am
This ones for Smoking man, cause I know he’s a big fan:

http://www.torontosun.com/2015/04/13/wynne-unveils-ontarios-plan-to-sign-cap-and-trade-deal
……..

No surprise. The angrey bird has no concept of business , spent her entire life on a teet , sucking the system dry. She does not understand her revenue is generated from the private sector. Who under NAFTA can go where ever they like to set up shop.

The only thing greater than her stupidity is her ego.

Only 50 sent dollar will keep mfgs here. Funny, when our MFGs leave buy the truck load , and they chirp her policies, she will call em homo phobic.

#193 Ray Vasquez on 04.13.15 at 2:26 pm

There is an article in Financial Post dated April-10-2015, titled, Hey, retirees: Say bye-bye to yesterday’s bond nirvana and hello to tomorrow’s suffering.

Basically, it is saying that retirees will have to take on more risk or deplete their capital at a much faster rate.

Rates will stay much lower than the past and those that procrastinate and do nothing will be running out of money sooner than they ever thought.

#194 SWL1976 on 04.13.15 at 2:37 pm

Squirrel meat – So so much for you to learn.

Spare us the globe and mail links already

If you don’t read the newpaper you’re uninformed. If you read the news paper you’re mis-informed – Mark Twain

#195 Oot der Hoos on 04.13.15 at 2:54 pm

It is not a mystery that creating a money-glut looks like a savings glut.

If we see the housing boom go bust, will we call it a savings glut when the Bank of Canada goes crazy creating a glut of savings and wondering why nobody wants to invest?

We should not be surprised if there are no good investment initiatives afterward. Businesses and persons get burned in the preceding boom: this time feeding the housing beast. It is like how the 1922-1929 beast preceded the depression. It damages people. It is not bizarre.

I reacted to the bizarre article. The bizarre part is Bernanke running away, pointing at his own shadow following him. Brookings should shun him and Greenspan.

#102 Leo Trollstoy on 04.12.15 at 9:37 pm
Some (mostly nonsensical) perspective about money:
qz.com/380342 the-global-economys-bizarre-problem-too-much-money

#196 Financial Planner Dude on 04.13.15 at 2:59 pm

@waterlooresident Okay, the Bank of Canada rate is now at 0.75%
So lets say it drops to 0.5, then to 0.25% What after that? Lets say it then drops to 0.00% Then it drops to – 0.1% and the Canadian dollar goes into a free-fall.

So that’s the bottom of rates ( -0.1% ) and after that mistake the BOC has to raise rates back up to 0%.

With no jobs being created by retail, jobs being lost by oil, and by then even the real estate industry will have topped out and start to lose jobs, where will the job growth come from after we hit negative rates, then bounce back to zero?

well than you get paid to borrow money

http://www.wsj.com/articles/as-interest-benchmarks-go-negative-banks-may-have-to-pay-borrowers-1428939338

#197 Blacksheep on 04.13.15 at 3:00 pm

Van # 148,

“Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…..”

https://www.youtube.com/watch?v=kU4FTn-8EPI
————————————-
Watched the entire video. Pretty on the ball, old dude.

But he lost me at the 7 minute mark when he claimed “money mafia” (commercial banks) create deposits / funds / money, from nothing and get to keep 95 % of said funds created.

100 % untrue.

They (comm. bank) keeps the interest and some fees, but since $ is really just debt, it disappears once repaid. The ledger is balanced.

This is why the unknowing, believe banks to be so heinous.

And this video displays someone with connections, experience and vast knowledge, having not dug to the bottom, to get a fundamental understanding of how modern $ functions.

I believe this ignorance to be wide spread, even in governmental and banking circles.

Quote from BOE pdf, starts bottom page 3:

“Just as taking out a new loan creates money, the repayment of bank loans destroys money”

“Bank deposits are simply a record of how much the bank itself owes its customers. So they are a liability of the bank, not an asset that could be lent out.”

“Banks making loans and consumers repaying them are the most significant ways in which bank deposits are created and destroyed in the modern economy.”

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

#198 David W on 04.13.15 at 3:01 pm

Re #157 Karma.

Thanks Karma. I’m recently retired and wanting to get out of my home town TO. TO is not the place to retire. Looked at Kingston, high property taxes and a damp and constant wind. I’ll use this article to support my move and now rent concept with my wife.

#199 Squirrel meat on 04.13.15 at 3:04 pm

#194 SWL1976 on 04.13.15 at 2:37 pm

Squirrel meat – So so much for you to learn.

Spare us the globe and mail links already

If you don’t read the newpaper you’re uninformed. If you read the news paper you’re mis-informed – Mark Twain
——————————————
Spare us the links of certifiable nutjobs who think the US government is run by aliens. It’s all going down this summer!

#200 David W on 04.13.15 at 3:24 pm

#197 Blacksheep

Couldn’t get past the 4 min mark. Germans had met little green men prior to WWII and said Germans were hired by the US after the war and then Area 51 happened with a UFO.

#201 Smoking Man on 04.13.15 at 3:26 pm

#197 Blacksheep on 04.13.15 at 3:00 pm
Van # 148,

“Never-mind oil and RE….listen to what the Hon Paul Hellyer has to say…..”

https://www.youtube.com/watch?v=kU4FTn-8EPI
————————————-
Watched the entire video. Pretty on the ball, old dude.

But he lost me at the 7 minute mark when he claimed “money mafia” (commercial banks) create deposits / funds / money, from nothing and get to keep 95 % of said funds created.

Go damn thing for me, they don’t know about Nectonites yet.

Chosen species of Aliens..

Where Paul loses me his tree hugging stance.

On UFO disclosure site, great clip today, an retired us vet, security boss. who was on the Roswell recovery spilled the beans today.

Incredabke do say the leased , could not figure out who to get the link from face book.

#202 Smoking Man on 04.13.15 at 3:27 pm

Sorry about typos, my google keyboard is possessed

#203 Hot Albertan Money on 04.13.15 at 3:47 pm

Invest it in a joint non-registered portfolio, of course. — Garth

Thanks G-dog

#204 Sean on 04.13.15 at 3:47 pm

The youth have been sold out by our government.

If I make 80k living/working in downtown Toronto and need to pay 1500-1700 to rent a 1-bedroom. Shouldn’t I be able to buy/afford a condo in a more reasonable price of say 250k or so, instead of the 350-450k range that prices currently sit?

We are getting screwed massively by having to pay an investors mortgage because we don’t want to take on insane 300k+ in debt to live in a shoebox with dim hopes of raising a family in one of the tiny and tinier units they keep building.

Why can’t anyone explain who exactly these investors are that are buying up half the condos that go up and keeping the prices at insane levels. If you actually lived in a condo you’d see how insane it would be to put your trust in some amateur board for a lifetime of debt.

#205 TurnerNation on 04.13.15 at 3:52 pm

Who else sees Batman on Dow.

#206 JimH on 04.13.15 at 3:59 pm

#194 SWL1976 on 04.13.15 at 2:37 pm
“Squirrel meat – So so much for you to learn.
Spare us the globe and mail links already

If you don’t read the newpaper you’re uninformed. If you read the news paper you’re mis-informed – Mark Twain
=================================
What a strange post!
A kind of reverse “Argument from Authority”; i.e.: if it comes from the Globe and Mail, it must, by some sort of ‘guilt-by-association’, automatically be ‘mis-information’.

What a wonderful window into the way you think, SWL1976!

You are so uncritically eager to throw the baby out with the bathwater when it comes to the MSM, yet you gulp down the kool-aid with an equal lack of even a modicum of skepticism when ‘the truth’ is offered up by your internet sources when it comes to global banking, markets and “chemtrails”. It would appear that to you, ‘truth’ is characteristically defined simply by its distance from any form of scientific, peer-reviewed data as well as distance from the MSM!

What’s even weirder is the fact that you quote a man who was the epitomy of the skeptical, critical thinker of his age!

Perhaps Twain was thinking of you when he said;
“But I have seen several entirely sincere people who thought they were (permanent) Seekers after the Truth. They sought diligently, persistently, carefully, cautiously, profoundly, with perfect honesty and nicely adjusted judgment- until they believed that without doubt or question they had found the Truth. That was the end of the search. The man spent the rest of his hunting up shingles wherewith to protect his Truth from the weather.”

#207 TRT on 04.13.15 at 4:00 pm

Negative mortgage now being offered to clients in Europe.

They pay you monthly to take out a mortgage.

Link? — Garth

#208 SWL1976 on 04.13.15 at 4:01 pm

#197 Blacksheep – The major point you are missing with the banks is about the interest they charge. The bank creates 100$ to be paid back with interest, but they only ever created 100$ the interest charged was never created and therefore never existed. So, eventually with this ponzi scheme someone is left holding the bag of debt that never existed in the first place.

Its really quite simple.

#209 TRT on 04.13.15 at 4:03 pm

@financial planner dude:

Have you not heard. We are in special times. A 40 cent loonie would be good for Canada (and make me millions ;)

It’s all rigged. In favour of those that have enough money to play the game.

#210 What about CMHC? on 04.13.15 at 4:13 pm

Remember Missy Bunny from 2010? http://www.greaterfool.ca/2010/11/03/consequences/

Dozens of University City condos are renting for excellent rent/own ratio. Poor buyers!
Check kijiji ads. http://www.kijiji.ca/b-apartments-condos/calgary/university-city/k0c37l1700199

#211 Holy Crap Wheres The Tylenol on 04.13.15 at 4:16 pm

#182 The American on 04.13.15 at 12:07 pm

At #177: Holy Crap Where’s the Tylonol, then perhaps Canadians should stop casting the first stone, right? Re-read today’s points. Bottoms_Up did his *best* by directly addressing me with a ridiculous topic @128. My response came later. I cast the first stone? LMFAO. As usual, typical Canadian delusional rhetoric coming from your side, and as usual, Canadians completely unaware to their own faults as you have this government-driven propaganda that has lead you to believe you’re without your own sins. Its pathetically laughable.

As for your second question as to why I might care about my Canadian friends? Well, I’ve explained that numerous times in previous strings. Read if you will. I guess I could say its the same reason Canadians have such a hard-on to constantly question their next steps, comparing themselves to the U.S., constantly pointing fingers, and taking very little responsibility. Ever heard of “good for the goose?” Every time you point a finger, there are three pointing right back at you.
__________________________________________
No pointing here buddy. I may not have been born in America but I grew up there, was schooled there, graduated with a degree there, fought in an unpopular war there. I was once one of the unquestioning believers that a communist was around every corner. Then I watched dozens of my best friends die for America, just as I would have. I was lucky and came home with a new plan. The USAF gave me a 0-3 pay grade as long as I could take orders and execute without prejudice. Don’t hate America or Americans and cant stand Canadians that bash America for the only reason that its America. It also goes visa versa with Americans. It just appears that your highly motivated on proving them wrong on every issue and much like a puppy you appear to enjoy rubbing their faces in the piss after an accident. Oh well don’t give up its entertaining to say the least.

#212 Funny Money on 04.13.15 at 4:18 pm

#197
Are you suggesting that for every Dollar loaned out, there is a Dollar in the bank’s vaults? LOL

Banks create money and yes, when debt gets repaid money is destroyed.

Trouble is… debt never gets repaid. Global debt has risen like never before. Banks earn income from making loans upon loans upon loans.

Do you think there’s perhaps a correlation between massive amounts of debt and massive banking profits in Canada (and elsewhere)?

What’s the ratio now? 10 Dollars loaned out for every 1 Dollar in deposits (cash and equivalent)? Who knows, who cares anymore?

Eventually it will crash back down anyway.

#213 Holy Crap Wheres The Tylenol on 04.13.15 at 4:21 pm

#192 Smoking Man on 04.13.15 at 2:15 pm

#180 Blacksheep on 04.13.15 at 11:56 am
This ones for Smoking man, cause I know he’s a big fan:

http://www.torontosun.com/2015/04/13/wynne-unveils-ontarios-plan-to-sign-cap-and-trade-deal
___________________________________________

Another Liberal idea. Add on more taxes to an already overburdened overtaxed province. Good job Wynne! I’ll just have to increase my prices for my products or become more competitive. So how do we cut out you and your cronnies? Oh yes next election!
BTW I still want my billion dollars back for your two election constituencies.

#214 Exurban on 04.13.15 at 4:22 pm

You’ve got a kindred soul in South Carolina Garth!

Woman Stabs Roommate for Refusing to Stop Listening to The Eagles

#215 Mark on 04.13.15 at 4:38 pm

“Why can’t anyone explain who exactly these investors are that are buying up half the condos that go up and keeping the prices at insane levels. If you actually lived in a condo you’d see how insane it would be to put your trust in some amateur board for a lifetime of debt.”

Investors are buying up the condos for the same reasons that investors bought up Nortel shares — the desire to participate in a speculative bubble, and to sell such to a ‘greater fool’ for additional profit. There’s little to nothing rational about what’s happening. Unfortunately a good chunk of the population is vulnerable to either the whole ‘idea’ that RE prices go up forever. Many believe RE is a perpetual money machine because they’ve seen others take advantage over the past 35 years from prices which were far more reasonable, and don’t understand that it has been mostly changes in long-term interest rates responsible for gains — not some inherent ability of RE to earn more money than other asset classes.

The other thing I’ve seen out there, RE-psychology-wise, is a deep distrust of “the stock market”. Phrases such as, “you can’t live in a stock”, “stocks are paper assets”, “rent is throwing money away” are common. And there’s even a significant mis-trust of the accounting used for the businesses that make up potential investment universe stock-wise. For instance, on the RFD forums, one of the trolls insisted that gross cashflows from real estate should be compared to the dividend yield from stocks. Despite the fact that dividend yields from stocks are derived from net earnings (ie: after taxes, after expenses, etc.) and typically only represent 1/3rd of the earnings of stocks at the moment with the rest re-invested! A dozen posts of mine later, and he was still claiming that his personal 4% CAP rate on Toronto RE was superior to a 3% after-tax dividend yield from a Canadian corporation that had a P/E of 12 and a long-term track record of growth.

#216 Keith on 04.13.15 at 4:46 pm

Garth,

The signs at the end of the street for condos are very deceptive. And always a complaint for residents.

When I lived in Ottawa, we’d have, at any given time, 2-5 units on sale in our 128-unit complex. However, because each realtor put up their own sign (instead of one post with several hanging signs), and often didn’t take down their signs weeks or months after the property was sold, it ended up looking like far worse than reality. Residents regularly complained about it.

8 units for sale? Is that out of 50 units in total or 200 units? That’s my question.

#217 Mark on 04.13.15 at 4:50 pm

If you refer to RBC’s balance sheet, for instance, they What’s the ratio now? 10 Dollars loaned out for every 1 Dollar in deposits (cash and equivalent)? Who knows, who cares anymore?

Actually 1 dollar loaned out for every 1 dollar in deposits. After all, bank Assets = bank Liabilities. However, the banks must have equity to back such.
have $52.6B of shareholders’ equity backing a total balance sheet of $940.5B. So leverage at RBC is equal to 17.8X.

(source: http://www.rbc.com/investorrelations/pdf/ar_2014_e.pdf , pg. 188)

This might seem like a lot, considering that us mere mortals are typically limited to 3.33X leverage if we use a margin account and invest in stocks. But keep in mind that RBC has a highly diversified investment portfolio, the portfolio is mostly invested in relatively low-risk fixed income investments (mortgages, loans, etc.). The portfolio is effectively duration matched. A good portion of the mortgage portion of their portfolio is covered by CMHC insurance. And they have discretion on a significant chunk of the portfolio to adjust the interest rates or even demand additional collateral at their sole discretion.

#218 45north on 04.13.15 at 4:56 pm

BS: I don’t hear the Federal Liberals or NDP coming up with policy changes that would deflate the bubble or change CMHC policy.

I guess they’ve done their focus groups and decided to just lay low.

#219 PM on 04.13.15 at 4:59 pm

“any believe RE is a perpetual money machine because they’ve seen others take advantage over the past 35 years from prices which were far more reasonable”

35 years isn’t a bubble.

#220 Obvious Truth on 04.13.15 at 5:04 pm

#205 Turner Nation

Maybe some small pullbacks but it looks like breakouts coming on major indexes from where I sit.

Here’s hoping.

#221 Hicksville Alberta on 04.13.15 at 5:17 pm

#193 Ray Vasquez

“Retirees will have to take on more risk or deplete their capital at a much faster rate.
Rates will stay much lower than the past and those that procrastinate and do nothing will be running out of money sooner than they ever thought.”

Exactly, and the most simple answer to all of that is just sell down and live in a quieter cheaper place and stop spending money.
There are so many great quieter communities to live in any part of this country in good housing for comparable peanuts and it’s not only easy to stop spending ( i.e. – wasting ) money that many have become accustomed to in this consumerist throw away economy, it’s a sign of good leadership to your children as well.
Tune In; Turn Off; and Drop Out……… and Stay Out.

Every $10,000 you don’t spend (waste) is like a interest on a million dollar term deposit.

#222 David W on 04.13.15 at 5:20 pm

Was looking at Bonds but then I saw “Hey, retirees: Say bye-bye to yesterday’s bond nirvana and hello to tomorrow’s suffering”

Then went to “http://www.bloomberg.com/markets/rates-bonds”

Lord help us all.

#223 Mike S on 04.13.15 at 5:26 pm

Bought the new book by Hilliard Macbeth several weeks ago

Went back to indigo to add my review, and seeing the price is up. In fact it is a whopping 44% percent gain in less then 1 month!

Furthermore, even the used price in Amazon.ca is more than what I’ve paid …

Can this be considered a successful short on Canadian RE?

#224 Mark on 04.13.15 at 5:31 pm

35 years isn’t a bubble.

In terms of long-term interest rates, it takes on the order of 60-80 years to go from low rates, to high rates, and back to low rates. Long-term rates bottomed in the 1930s, peaked in the 1970s, and again bottomed in the 2010s so one full cycle took roughly 80 years, or basically the lifetime of an average person.

Its just dangerous, IMHO, for people to extrapolate their experiences with half the cycle (falling rates), to the other half of the cycle (rising rates) where things are likely to be very different in nature.

#225 Obvious Truth on 04.13.15 at 5:40 pm

#204. Sean

I’ve just witnessed that you can get a 2 bed for less than that. Brand new.

Listing at 1550 and can wiggle a c note off. At least.

But I’m no expert. Maybe this is recent because of the large supply.

#226 waiting on the westcoast on 04.13.15 at 5:40 pm

#204 Sean on 04.13.15 at 3:47 pm
“The youth have been sold out by our government.”

Sean – those “investors” are your parents, uncles, aunts, etc.

If it makes you feel better, that’s your inheritance that they are investing… Keeping you out of the market right now and eliminating your nest egg when it finally corrects…

Learn to enjoy it!

#227 Dean McCallum on 04.13.15 at 5:45 pm

The last bit of that got cut off..

“Keep calm and buy Real Estate”.. Income Trusts”

Yes we will!!

#228 Mark on 04.13.15 at 5:54 pm

“Was looking at Bonds but then I saw “Hey, retirees: Say bye-bye to yesterday’s bond nirvana and hello to tomorrow’s suffering””

Sounds about right. A bubble in debt also means a bubble in bonds. Thus it seems logical that both will deflate in value over time relative to the economy.

The worker to retiree ratio is trending lower over time due to demographics, yet retirees own debt that ostensibly entitles them to an enormous amount of the output of the economy. It only seems logical that the retirees’ bond holdings will have to be devalued in order to satisfy the logical constraint that workers simply won’t work unless they are able to enjoy a substantial chunk of the fruits of their labour.

It logically follows that as the bond bubble deflates, either due to deflation, or due to significant inflation, debt supported assets must also deflate in kind.

#229 Predictions2015! on 04.13.15 at 10:45 pm

Hi Garth,

You’re very patient with Mark but I have to hand it to Mark for his perseverance and consistency in his countless posts. Sooner or later we’ll find out what will result from all this central banking madness. Speaking of which, everyone should prepare themselves for the eventual correction in the stock market and real estate market, which I expect will occur before the end of 2016.

The upcoming economic indicators (job creation, real wage growth, inflation, GDP) for the U.S. will reveal the truth behind the much anticipated US recovery and interest rate hike. As for Canada, the show must go on for now, either with an interest rate hold or drop this Wednesday. Either way, prepare accordingly and heed to Garth’s wisdom in being diversified, balanced, and liquid.

As for Mark, have you ever considered working in one of the Big 5 Canadian banks in Toronto? We need more people like you on Bay Street. There are too many questions and not enough answers. Cheers.