epa02552212 Motorcycle stunt champion Chris Pfeffier (L) and model Mai-Lin perform a ‘Stoppie-Kiss’ trick at the Hamburg Motorcycle Days trade show in Hamburg, Germany, 27 January 2011. The 17th Hamburg Motorcycle Days takes place from 28 to 30 January 2011 with many exhibitions and shows. EPA/MAURIZIO GAMBARINI
Days ago the federal government, out of the blue and doing a 180, said they’ll sweeten the CPP. Sort of. If it happens, people could increase the money they pay into the system in order to get more out in retirement.
There are major hurdles with pulling this off, but never mind. We have bigger stuff to discuss today.
As you know, the Ontario left-wing Liberal government has gone down a similar road. The province is now building a pension plan taking another 2% from everybody’s income (to $90,000) which might pay about $10,000 a year in benefits in three decades. And then there’s Alberta. That province embraced a socialist NDP government promising to make the rich pay more (including higher taxes on corporations and people making over $125,000), while boosting the minimum wage in a pro-people, anti-business agenda.
In BC, twenty-five thousand people signed a petition to thump foreign investors in residential real estate. The mayor of Vancouver called on the province for a broad-based speculation tax and hundreds of thousands of #DontHave1Million tweets decreed the ‘unfairness’ of wealth inequality between the haves (Boomers) and the haven’ts (Millennials).
Spot a trend here?
These are the political reactions you can expect in a country where the economy reflects what the public wants and does. In reality, most people have been over-borrowing, over-consuming, under-saving and now increasingly realize they could be screwed. The bulk of middle-class wealth has been shoveled into a single commodity, houses, which could easily be imperiled by a faltering job market, global economic forces (like the price of oil) and, inevitably, higher interest rates. Most people are woefully unprepared for the rest of their lives, or desperately envious of those with wealth. This is the soil from whence the shoots of socialist thought sprout.
So, tax the rich. Clip corporations. Nail the speculators. Plus the Chinese. Governments have a responsibility to support the people. Even if citizens are the architects of their own situation. And so the plot goes.
As you plan your financial future, you might wish to reflect on the following six chilling charts, some of which were published by the federal government for the first time in the past few days.
1) The economy has been seriously losing altitude for an entire year. It‘s now in negative growth – shrinking, in other words. So why have real estate sales been torrid with average prices in Toronto, for example, up 10.7% since last May. Does this represent an increase in household debt and a greater concentration of wealth in one, over-valued asset?
2) Here’s how the economy is changing. And not in a good way. While overall investment is down and exports have been whacked, households have increased their spending, largely fueled by debt. Business inventories, however, are increasing showing that sales have weakened, while imports have jumped. This is not sustainable.
3) Here’s what the economy looks like when you strip out a bunch of the housing component. When businesses stop investing in equipment and expansion, where do we expect the new jobs to come from? This could help explain why we lost 19,700 paycheques in the latest monthly period.
4) House prices in Canada (red) compared to those in the US (blue). Increasingly the Canadian economy is becoming dependent on the real estate sector and industries associated with it. People in this country have convinced themselves the red line will go up forever. Guess what?
5) This explains the last chart. House values in Canada have far exceeded those in the States because we’re willing to swallow epic levels of debt to buy beyond our means. Blame it on cheap rates, greedy bankers or CMHC – but at the end of the day, this is what people have done to their own personal balance sheets. Risk, in extremis.
6) Finally, here are property prices expressed as a ratio of family incomes. This is what cheap debt and house porn does. Chasing real estate, speculating in its continued ascent, Canadians have gambled they can increase spending even as incomes fall behind.
With an aging population, scant savings and a weak economy, it’s hard to see how this ends well. Instead of diversifying or using cheap rates to trash debt, we’ve done the opposite. Never before have your neighbours owed so much nor owned so narrowly. Now they want to elect politicians promising public policy to wipe away their mistakes by taxing others and providing lifelong security.
Govern yourself accordingly.
250 comments ↓
Amazing Garth!!
I’m watching this in amazement.
Garth, could there be any political or otherwise intervention to ensure that this does somehow “end well”?
Just wanted to say thank you for sharing all your valuable insight. It all makes good sense to me, the next few years are going to be very interesting.
A friend told me recently that the only Way he expects to pay off his Fraser Valley home was a hopeD for inheritance when his parents kick the bucket. This is from someone approaching 50 and three young kids. Yikes
Sadly, the irresponsible and reckless are being encouraged and protected. Governments are intervening to prevent the collapse or correction. We keep saying this won’t end well but where is the end when we are governed by utter morons? We are all complicit in some way as even those who don’t participate in real estate madness, profit from the government caudled banking system that is whooping it up as they lend out trillions out of thin air while they punish savers by paying them nothing.
If you’re wealthy (or not), and want live in a country where it all makes far more sense, I think it’s time to get off this sinking ship of lunacy.
Garth, I’m finally glad you’ve addressed the coming Ontario pension tax. The world’s most indebted subnational gov’t has no business telling it’s citizens how to prepare for their later years. Sadly, it’s not a surprise why they got their majority: much of the support to put them over the top came from the 905 belt, and in areas that had gone PC as recently as 2011. Hudak’s abominable campaign notwithstanding, this area has experienced a boom in house prices (and almost certainly debt). Looking at it from the perspective of someone in Oakville or Brampton who’s 600 grand in debt, why not vote to keep the party going? A few billion here or there, what’s the difference? Until there’s a (small-c) conservative resurgence in this country, we’ll continue to endanger our futures.
#184 PM (Yesterday)
“I’m not saying I disagree but history is rewarding the other side.”
———————————
That’s an incomplete statement. In fact, history has recently been rewarding both sides.
On one side are the legions of deeply indebted greater fools purchasing anything they can get their hands on at any price. One the other are those who recognize ubiquitous risk and have taken steps to diversify themselves. Which side would you want to be on?
In 2006 I liquidated a recreational property in the Gulf Islands at a good return and invested the proceeds. Comparable properties have been flat since that time.
In 2010 I liquidated my Vancouver principal residence for what I would describe as insane money compared to what I paid. That money, of course, was also invested in a diversified portfolio that is professionally managed and balanced regularly.
In the last five years my average compounded annual rate of return after fees has been 7.75%. All of my capital remains in place and working for me every day. In the meantime I’ve avoided the considerable carrying costs of property ownership.
Far better to have exited a bubbly market 5 years early than one day too late.
Very nice post today Garth.
The overall economic situation in Canada when viewed in the proper context as shown in these charts, suggest that this cannot end well.
Very sobering indeed.
The fact that these ‘moist house horny millenials’ are priced out of the RE market may in fact be a blessing in disguise!
I’m sending today’s post to a few friends.
Cheers!
Canadian House Price line way above the U.S. line. What is next?
Chart 4 with the Canadians house prices and trend so far above the U.S. has appeared in these editorials many times going back to maybe 2010.
Many times I predicted in response that the two lines will likely converge more so by the U.S. line increasing rather than the Canadian line decreasing dramtically.
I then bought shares in a large U.S. home builder company in 2011 to monetize my opinion.
It was an easy bet, around that time Warren Buffett was saying that for Americans who need a house, borrowing at low 30 year rates and buying a home at the low prices was a no-brainer.
I expected some decrease in Canadian home prices but , like Garth, no crash. Instead we have all been surprised as Canadian home prices continued to surge.
The increase in U.S. home prices and home building has been happening and continues to happen.
A few things in economics are more predictable than others. Higher U.S. home prices remains an easy bet.
As to Canadian home prices, I dunno. Almost all of here have been wrong on that for seven years or so now.
I just had a talk with my old man about retirement the other day, turns out all his money is invested into real estate, no diversication at all! He thinks I’m an idiot for investing in the market with a diversified portfolio, and I think he’s an idiot for gambling his retirement on real estate. Apparently, there is no way rates can go up! I argued that even in that case I would expect housing to be one of the worst investments over the next 5 years. Only time will tell, all I know is that it takes me less than 30 seconds to pull out my phone, sign into questrade, and liquidate my entire portfolio at a cost of $25. Why would I ever give that up!
Condo prices rose 10% YoY in North Burnaby, renters are getting pushed out further to Coquitlam!! Hahahahaha
The simple answer is no. There are three choices for the federal government. Implement measures to prick the bubble now and everything crashes, wait until later to prick it and everything crashes a little harder or let it pop on it’s own and it will crash even harder still. There is no way it will be the first option with a federal election coming in fall. The second option is a remote possibility after the election hoping we recover in 4 years prior to the next election. Based on what every other government has done around the world in similar situations the third option is the most likely which can’t be far out regardless of what the feds do.
Life is about balance. Not every tax dollar should go into hospitals and schools, just like not every dollar you earn should go into savings. Some of us like to enjoy life a little.
The bubble is already popping, and has been for the past 2 years. Hence, consumer confidence in the toilet. The Tory party is imploding right before our eyes, obviously privy to either economic or poll numbers which basically show that they’re facing Kim Campbell-like obliteration when they go to the polls this fall. Delusional Realtor organizations are running around claiming price increases, but with every such claim, they’re further destroying whatever little credibility they have as everyone knows that the “sales mix” has been mostly responsible for the changes to the averages, not appreciation on the actual individual houses that real people own.
The Bank of Canada not only won’t be raising rates, but they’ll be forced into cutting and QE in the not-so-distant future. The Canadian dollar should start rising in response to rising risk premia and the spectre of consumption falling off a cliff in Canada. Almost nobody in the export community believes the low CAD$ is going to last, hence, very little to no investment is being made.
So where to go from here? Well, dust off those history textbooks and go spend some time in an old folks home talking to the little old ladies who grew up in the 1930s. A wealth of advice on the practical consequences of deflation there.
“if inflation is now the stand in for real growth and demand”
What inflation?? Prices on practically everything are either stagnant or even slightly declining at this point.
A few things in economics are more predictable than others. Higher U.S. home prices remains an easy bet.
Make no mistake, the US market is in a bubble of its own at this point, and they have another leg down in their housing market. The overcapacity in the FIRE sector wasn’t properly liquidated in the 2009 crash, and without proper liquidation of overcapacity, sustainable recovery is impossible.
The millions of houses that were empty pre-2008 crash mostly didn’t disappear. And all the QE programs, low interest rates, etc., stimulated further supply. Housing prices are going to be low for a generation once this dead cat bounce is liquidated.
I sent the charts to various younger relatives Garth.
I hope they read them.
#8 Mister Obvious on 05.31.15 at 12:37 pm
”Far better to have exited a bubbly market 5 years early than one day too late.”
at the risk of underlining the obvious-you are right…
@#13 North Burnaby
“renters are getting pushed out further to Coquitlam!! Hahahahaha……”
+++++++++++++++++++++++++++++++++++
Sold the house in north Burnaby, pocketed the cash, invested it and now rent in north Burnaby.
Doin great!
And once again I have proven you wrong :)
ahaahahahahahahahahahahahahahaahahaha
Methinks you’re a realtortroll…realtroll….realturd take your pick…….
Condo prices rose 10% YoY in North Burnaby, renters are getting pushed out further to Coquitlam!! Hahahahaha
Condo prices have been flat for 5 years. With transaction costs anyone who bought a condo in the last 5 years in North Burnaby couldn’t come close to breaking even. Rents have not risen much over the past 5 years and are not keeping up with inflation. The renters leaving North Burnaby are probably moving closer to the core after they realize North Burnaby is boring. You can rent a brand new Vancouver condo for cheaper than buying a dumpy condo in North Burnaby.
As you plan your financial future, you might wish to reflect on the following six chilling charts, some of which were published by the federal government for the first time in the past few days.
……..
Most folks just govern their lives using whatever is available to get what they need to carry-on
The federal gov makes the policies. Most people expect that the policies are the work of knowledgable, honourable people who have the data required to make the right decisions. Those charts show multi year trends. Nothing has happened overnight so as to catch the governing PC’s off guard. The current policies have been nothing short of negligent.
And you wonder why someone would be desperate to find ANYone else to vote for.
Can’t you just see the train wreck happening??
The attitude of, “How much worse can these guys be than the ones who’ve already screwed it up?” is how we get disasters. I smell more coming. — Garth
The new Alberta Government’s promise to make the rich pay more taxes and boost the minimum wage is a measured response to obscene and record-breaking wealth inequality. Garth, you’re on the wrong side.
The wealth gap has more to do with bad choices than bad luck. — Garth
My realtress struggling selling a downtown kando. It’s a nice one but too much supply is overhanging. Could this be the turn.
Yes, on Smoking man’s deprogramming theory. I go out lots, 2-3 events each week, at very nice venues often with free food or drink, and 5-star hotels and patios. 90% of people – correlating with their education level – are boring. I meet girls with masters (working on mine) and finance types. Yawn. Programmed
I’m just as happy drinking beer shooting pool listening to a rock cover band.
My group of maybe 20 people – we met going out – is a mix of 30-40s, all have in common an entrepreneurial gene. Have hustle.
I too work in the Bay St tax farm salaried, but only as I can follow trading too. It’s an end to means.
well a very interesting set of charts looks like a out of control train about to derail. some brake checks to consider:
1 Do Not Increase Taxes On Corporations We Need The Jobs They Bring and we are competing for there presence most jurisdictions are reducing taxes and fees to bring em there for my friends in alberta on this one mama put your gun away lest you shoot yourself in the foot
2 Review the cra capitol gains rules and implement a 5 year sliding tax surcharge on profits from home sales say 50% year one down to 10% year 4 /0 after 5 years
3 Rein in CHMC and take the bank of mom and dad out of the picture,i seem to recall that in years past you had to prove you saved your down payment to qualify for chmc insurance, put some of the responsibility on our fat profit machine banks to become responsible lenders, by limiting the amount of taxpayer liability to a maximum insurance of 50% appraised value, lets face it you me and the taxpayers are screwed if this whole thing goes south as its our tax dollars that will have to cover the potential epic losses CHMC would incur even if we diden’t take part in this stupidity,personally i rent ,and stuff every spare cent into the tfsa windfall, speaking of windfall heres another suggestion, for the players of lotto (aka stupid tax) why not stick that money in your tfsa and deploy is smartly, you will be a winner every time, it seems to me if you cant keep the piggies away from the trough the only answer is to remove it
Yep, whether we like it or not, you can plan on these kinds of changes happening soon.
Millennials will likely be voting in much larger numbers from now on out.
Why?
Because they’ll be voting their wallets for the first time for most of them.
They want what they feel older people got for much less. Agree with them or not, it’s a powerful sentiment that will push people to the polls. Many of their grandparents will agree with them, too.
They have also seen those other charts, about how boomers are getting way more in social transfers over their lifetimes than the younger set. So we better be careful Garth, us boomers, in calling the younger ones out – we have had and will continue to have our noses in the trough much longer and more lucratively than the younger set. They have a point, there.
And health care costs, fuelled by aging with more diabetes and cancer-causing obesity are set to explode as well.
http://www.cbc.ca/news/health/cancer-cases-projected-to-rise-40-in-15-years-as-population-ages-grows-1.3088717
So higher taxes coming, more clawbacks, TFSA kaput (at least the increase), inheritance taxes and more.
Plus we’ll still have an epic fail in real estate while this is all happening. That, we probably can’t bail ourselves out of, but time will tell.
Shrinking economy, massive debt and most importantly layoffs will put the end to this nonsense. When neighbor sell the place for 100K below asking price and others on the street follow the “trend”, sheeple will learn that “hard earned” home equity can evaporate very very quickly.
The attitude of, “How much worse can these guys be than the ones who’ve already screwed it up?” is how we get disasters. I smell more coming. — Garth
….
I don’t disagree, Garth.
But can you imagine the scenario of an abusive relationship where you DON’T try to get out? People start to wonder why you’d go back for more.
I commend Canada for beginning to juice up the CPP. It is about time, but geezers -don’t you expect to see the benefits of an increased CPP- that benefit will accrue to your kids -they’ll need it after losing the house…
As for the concept of being able to “TAX” people into prosperity, per se – nothing I have ever heard is more ridiculous!!
Yes, I believe every wealth strata needs to pay TAXES whether it is on your unemployment / welfare benefit or your a 1% er. The percentage of your TAX impact should also increase from the bottom of the 99% to the upper crust of the 1%.
Figuring the impact of all those dam TAXES is tricky though. Here in the United Snakes, we have devised this bullshit system where the poor, say living on $18,000 a year pay low federal taxes say 15%, maybe a few points in state taxes, but then from 0 sales taxes to as much as 10.5% if you live in the wrong state. OH, then lets add in those employment taxes 6.75% FICA (social security).
Earn over a $110,000 that 6,75% goes away for you, and your employer. Earn passive income from long term investments you pay a MUCH lower rare of tax than a working stiff. Structure it right, and you pay less taxes than if you ‘earned’ the money via wages.
Yes, we have found great ways to screw our poorer neighbors alright. That is one way Warren Buffett can honestly claim he pays lower taxes than his secretary.
DISCLAIMER: I have been saving money for years, and now converting some taxable money to my tax ‘free savings’ account, though I have been retired now over 3 years. Yes, I pay 15% on the conversion amount up to my tax bracket $70,800. Next year, rinse & repeat.
Either I pay my uncle SAM 15% now, or maybe 25% later when it is forced to come out after age 70.
I didn’t make the rules, I only need to understand them, and manipulate them the best I can to benefit my family.
When the rules change, my strategy might change too.
Oh, by the way, after paying those Fed income taxes, state income taxes, sales taxes, property taxes, fuel taxes, YOU need to save something from what is left to fund your retirement!! Yeah, WHO said it was going to be easy.
AND with the provincial governments deciding THEY know how to spend your money better than YOU do….
Think carefully what you wish for.. AND vote for….
“The economy … losing altitude for an entire year… now in negative growth”
Last Friday I published a chart of Canada’s Current Account since 1946:
http://www.chpc.biz/history-readings/state-of-war
For +/- 30 years since end of WWII , Canada’s Current Account was noticeably flat hugging the net zero line, ie: balance of trade and foreign financial balances netted out to +/- zero. From the mid ’70s our national consumption began to accelerate beyond our production, a trend that has accelerated into the widest negative margin ever, only interrupted by the relatively brief global commodity boom that rose out of the 2000 collapse of the dot.com mania. Canadians have traded production and employment for consumption and subsidy – and the chart shows no sign of any pending change in trend.
Tongue twister: say SIX CHILLING CHARTS sixteen times as fast as you can.
Churchillian tone: “Never before have your neighbours owed so much nor owNed so narrowly.”
(Churchill: “Never have so many owed so much to so few.”)
(British voters sent Churchill packing after the war.)
FDR’s Good Neighbour Policy: The only good neighbour is a dead neighbour. [I got that one in a bar on Penn Ave.)
Mrs. Churchill: “You’re drunk!”
Churchill: “And you’re ugly. In the morning I’ll be sober and you’ll still be ugly.”
Canadian economy – drunk and ugly and comatose.
Canadian candidate: “Folks, what could be more fun than taxing others, eh?”
Canadian voters: “Tax them! Tax them! Tax them!”
#22 HJD “The new Alberta Government’s promise to make the rich pay more taxes and boost the minimum wage is a measured response to obscene and record-breaking wealth inequality. Garth, you’re on the wrong side.
“The wealth gap has more to do with bad choices than bad luck.” Garth
The 1% will soon have more wealth that everyone else combined. Attributing the wealth gap to bad financial choices made by the 99% is kinda lame. Power and control is in the hands of the wealthy – that’s why there’s a thriving 1%.
When people have plunged themselves into debt to buy assets at inflated values, personal responsibility is a factor you cannot dismiss. — Garth
#ThePerilsOfStrolnokoff!!! #&DecadentUzbeks… #ASocialistPrimer…
http://youtu.be/ZMUCnCUbm-U
It’s getting tougher for renters to stay out of the market when rent is on the rise. A big chunk of their income is flushed into paying rent down the toilet.
Garth, keep in mind that those #donthave1million protesters are renters. Home owners are sitting happily on their greatest wealth creating asset in the world.
Don’t scare us so.
#20 BS
Dude, youre out of touch with reality.. Good lucky trying to rent a new condo in Vancouver. Your monthly salary isnt even enough to pay for it!
They are not negligent. The policies are deliberate. The objective is to get reelected as a majority. Inflated housing = wealth effect and more jobs which gets votes as long as it lasts. It worked the last election. I wouldn’t be surprised if it works for the next election.
Unfortunately no other party has come forward with a different housing policy. For example has anyone said they would change CMHC, etc? Nope.
The only thing I hear from other parties is they will spend more money on social programs and raise taxes. That has yet to be a good recipe for success for any economy, especially a struggling one. Although, those policies may inadvertently speed up the housing correction with all the business closures and job loses. Any extra money going to social programs gets more than used up by the increase in unemployed people who now need more social programs and the net government tax revenues end up lower even with tax increases as the tax paying base contracts.
Life, Death, TAXES….
We go through life. Whether university educated, or a dedicated tradesmen. Both are valuable. Both have needs and desires (wants). Taxes come to all.
Satisfying one’s needs is basic, satisfying one’s wants usually involves delay, or debt. Debt depends on length, and cost. 15 years on a reasonable home, reasonable debt.
Today the world is changing faster with climate changes whether man made or normal cycle it is to be dealt with presently. Job creation, destruction off shoring or on-shoring, beyond our control generally.
Political spending of tax payer funded projects seems more directed to the ‘bread and circus’ crowd today than community NEED. (Here we are spending 200 million for a new basketball stadium of WI tax dollars to a private company)-WTF?? Higher taxes for this???
sorry had to RANT…
Latest Toronto live has 30-yr-old couple going over budget with 705k for a stinking semi in Leslieville needing 50k of renos. First accurate reno budget?
Living in its basement during.
#toomuchhouse
My monthly salary has nothing to do with how much money you bleed every month with your North Burnaby condo and how much of a loss you will take when you sell it.
Kind of sucks, you are screwed either way. Keep the condo and lose money slowly every month, sell it and take a huge loss all at once.
RE:Spot a trend here?
Yea. The trend is that people no longer buy the Conservative clap-trap that corporate tax cuts equal more jobs. They are slowly realizing that trickle down economics don’t work. That off shoring your neighbours’ job only works in the transition phase until your own job is eliminated. That free trade isn’t the end all be all. That we have screwed ourselves with our own shortsightedness by focusing on short term economic gains and ignoring the long-term vision of our country’s future.
I have a friend that owns a restaurant the last time they raised the minimum wage. He needed to cut workers so instead of the wait staff having Three to four tables they had to work Five tables, plus the kitchen needed to step it up.
Before you think he’s a greed sob, the business went from 1.8 million in sales to 1.5 million and all he can take for himself is 600 a week
> … Now they want to elect politicians promising public policy to wipe away their mistakes by taxing others and providing lifelong security.
for most of the population, isn’t CPP/CPP+ as close to a 1% fee based adviser (that you recommend) as they can get?
plus isn’t it better to have the money in a diversified portfolio like CPPs than in RE down payments, which is what most people would do?
@Terrior
“When neighbor sell the place for 100K below asking price and others on the street follow the “trend”, sheeple will learn that “hard earned” home equity can evaporate very very quickly.”
So true. Is it any wonder why the realtors don’t want a resource like Zillow.
Cheers.
Those Charts DO say the Canadian economy is getting a cold.
Household Consumption UP
Capital Formation DOWN
General Gov. consumption DOWN
Hmm government not growing, savings & investment not growing, household spending is… FAIL
So, we increase taxes on the ‘wealthy’?
Is that defined as anybody making more than $40,000 in the ‘new’ ideal? or, maybe $50,000??
Those numbers tells me that’s where the government is going to HAVE to look.
Egads, what loon-acy awaits us in 2016? Our politicos tend to watch what has been going on around us.
You guys are giving them wild-ass BAD ideas!
Act One
(phone rings)
“Global Financial how may I help you”
“Hi, It’s Vlad, I like to check the status of my portfolio”
“We’re not aware of any ‘portfolio'”
(click…..dial tone)
The End
” Canada’s Current Account was noticeably flat hugging the net zero line, ie: balance of trade and foreign financial balances netted out to +/- zero. From the mid ’70s our national consumption began to accelerate beyond our production”
Careful there. “Current account” refers to flows of currency, not to flows of goods and services. Canada has, over the long term, run a trade surplus. That is, we’ve been producing more than we consume.
There are outflows, of course, but much of that is investment by Canadian firms and Canadians overseas. Since Canada has been a chronic net producer, and since investment opportunities in Canada haven’t been all that significant, most Canadian firms have been acquiring production and assets overseas.
#33 North Burnaby
If houses are such great assets why do people need property tax exemptions to keep such great piles of wealth.One quick call I get my cash,it’s my cash I don’t pay interest to a financial institution to borrow my own wealth.Lose your job and see how easy it is to get your wealth lol,my brother was unemployed for a few months and as soon as the bank found out no more Heloc,being
unemployed he was suddenly a huge credit risk Didn’t matter how much “wealth” was in the house.He is now putting his cash into liquid assets having learned his lesson that the only way to access his wealth was to sell.
Thanks for the charts Garth. Reinforces where my outlook is on the Canadian economy. Like I said before, Canadian rates going down before the election, maybe .5% .
New Title for today’s Post, “Canadian Economy In The Crapper Now Ready To Flush Canada’s Debtaholics”.
#41 – I have a friend that owns a restaurant the last time they raised the minimum wage. He needed to cut workers so instead of the wait staff having Three to four tables they had to work Five tables, plus the kitchen needed to step it up.
Before you think he’s a greed sob, the business went from 1.8 million in sales to 1.5 million and all he can take for himself is 600 a week
————–
This is the industry in a nutshell.
Those charts show their isn’t enough $ to go around. I see it in my hood. Bars everywhere with low volume.
I have neighbours that never leave the house. New owners with zero at the end of the month my guess.
The car moved once this week. The TV flickers all night.
“Homebody” is the new way of saying “frugal”
@#33 North Burn-a by
My rent hasnt risen in the 2.5 years ive been here.
But I bet you condo fees have.
Is your condo leaking yet?
BWAHAHAHAHAHAHAHAHAHAHAHAHAAHA
See the direction of the Canadian economy?
That’s the direction of the CAD.
Down.
#31 HJD
Blaming 1% of the population for the mistakes and financial ignorance of the 99% is very lame.
This is blind bigotry. Blame asians, blame Harper, blame the rich….but don’t look in the mirror and figure where the mistakes come from.
Watched a colleague brag about his 7 TVs while complaining his wife was laid off.
Totally the 1% fault. Tax them more!
#33 North Burnaby on 05.31.15 at 2:32 pm
It’s getting tougher for renters to stay out of the market when rent is on the rise. A big chunk of their income is flushed into paying rent down the toilet.
Garth, keep in mind that those #donthave1million protesters are renters. Home owners are sitting happily on their greatest wealth creating asset in the world.
My rent did not increase two for years now and counting. As far as flushing the rent money down the toilet I would say that is a matter of math and risk. Everyone needs a shelter(home) and they do not come for free. We are all making a choice on how to obtain the use of home(shelter) and associated financial implications of such decisions. You are at fault if you believe paying rent to the bank (mortgage) is smart and only way to obtain use of shelter(home). In time you will learn this lesson I am just afraid the price you will pay might be too great. In any case I wish you good luck.
BTW I am renting four bedroom beautiful house for $2200 per month and rent is still very affordable in Vancouver.
Increasing minimum wage does nothing to help the average person. It’s like giving everyone $1millon dollars, if everyone has a million things will rise and balance out. Then you’re going to be left with the same concentration of wealth just on a larger scale. Increasing the minimum wage in Alberta will only hurt its economy because in a global environment manufacturing will move out of province. Brick and mortar stores will increase prices because the cost of wages has gone up and the profit margins need to increase to pay the extra wages. Other jobs that paid higher than minimum wage will need to offer more money because employees will demand it. What will be left is a province with negative employment growth.
What needs to be done is what Germany does. Education is based on needs. What’s the point of turning out 5 million doctors if the country only needs 100k? The millennials complain about being over educated and under employed but what good is a degree that is useless?
Hi Garth
Contrary to popular belief (and notably yours), Albertans didn’t elect the NDP as a way to ‘punish the rich’.
Rather, Albertans were fed up with the continued degradation of our public education and health care system, where it seems if you weren’t part of the ‘Me’ generation, then you get screwed.
Anyone in Alberta can make 15$/hour….McDonald’s advertises that as a starting wage…for the day shift. Not sure a 15 dollar minimum wage will change anything here….Just a photo op.
Thirst for walls.
Thirst for yield.
To be fair to house assets, cheap money had effects elsewhere. Pipeplines and rail companies are great examples. Those used to be valued 40% less than now. The thirst for yield.
#17 Mark
“no inflation” ?????
Please take a look at the costs of fruits and vegetables in Safeway this spring and tell there is no inflation. Inflation is very much alive and well with almost all foods especially the imported kind.
Also gasoline per litre has edged up again in the $1.20 or more range.
Last summer when oil was $105 USD/bbl gasoline avg in Canada was over $1.35/litre yet we at 89% of last year price per litre but a barrel of oil is only 57% of $105 WTI USD.
Chart 6 tells you all you need to know. From 1989 to about 2002 house prices kept falling. That’s almost a generation.
DELETED (Anti-Chinese)
“….The wealth gap has more to do with bad choices than bad luck.” — Garth
_________________________
Can’t argue with that.
I have three siblings:
– one of them gets it even without having ever read this blog,
– the other two are complete financial morons even after having hitting bottom and having been shown multiple excerpts from this blog. Instead, they prefer reality TV, HGTV, and monthly payments; perpetual feedstock for the Big Six banks.
Today’s blog is definitely another keeper in my IE Favourites. As they say, pictures are worth a thousand words for anyone without the patience to read.
Have to disagree on the whole Alberta/Ontario embracing socialist governments, though. Ignoring the whole leftwing/rightwing thing, that was nothing more than pitchforks and lanterns rejecting self-absorbed arrogance, something we’re about to witness federally this fall as well.
I plan to hold my nose and vote accordingly as well.
One of my priorities is to enjoy life. Last time I was in an ER it looked fine and all the medical clinics I have been to are great. 50:1 class sizes and converted cargo containers for schools do not exist near me. If they did I would address it by cutting teachers salaries by 20% and put that money into schools and reducing class sizes. Should we have a plebiscite to cut teachers salaries in order to improve schools and cut class sizes? I bet that would pass.
#48 Mark
Current account deficit means money are leaving Canada and this is what matters.
Yes you can make money (even though we post currently trade deficits that is increasing lately) but when the money is leaving it does matter, you have generally less investment, less productivity and lousy economy.
#56 I’m stupid
I absolutely agree, look at what the germans and the chinese are doing. The future is theirs.
#48 Mark
It is not Canadian investing abroad, it is profit taking by investors here.
Somewhere the ghost of Jim Flaherty is smiling just a little. Better late than never.
“Canada’s national housing agency says it’s now insuring a record low 50 per cent of new residential mortgages, and it doesn’t intend to let it drop any further.
Canada Mortgage & Housing Corp. Chief Executive Officer Evan Siddall said that after years of cutting its share to reduce taxpayer risk to the $1.2 trillion mortgage market, the agency plans to hold firm. CMHC’s stake of the new mortgage-insurance business has dropped from about 90 per cent during the 2008 financial crisis, and a pre-crisis low of 57 per cent.”
http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-goes-from-insuring-90-of-new-mortgages-to-only-50-and-thats-as-low-as-it-plans-to-go
Geriatric crooks… That’s why folks have stopped saving for retirement.
http://business.financialpost.com/personal-finance/retirement/they-used-to-play-golf-now-senior-citizens-are-staging-heists-and-robbing-banks
Hi Everyone-
We all know there are expantion and contractin phases
in world demand.Oil drives the Canadian economy.
Chinese demand is down Saudie rigs up 14%, to crush frachers.
Us dollar up comodeties down.
This starting with q.e. in the.states. The us dollar as low as the yen.
Then usd uncouples as the carrry trade lowest devalued dollar,
when q.e. ended. This is all currenct wars that are out of Canadas
control.
Great move by Harper with supprize move to lower interest rates
time before last. Kept asset prices up as everyone was shorting
oil and the loonie under pressure.Just enough not like Russian going
to 14 or 15% and the world dumping their currency.
The next big move will come from this transpacific freetrade deal.
Need to know how Canada will fit in.Oct 22 imf looking at China to give
reserve currency status. This is why u.s. hurrying with eastern free trade.
If Yemen war gets out of controll or the war in Iraq ,causing a threat
to Saudie Arabia, oil prices will jump andCanada will be back in the
drivers seat, relative to this new trans pacific agreegemt
#15 BS on 05.31.15 at 1:34 pm
Here in Regina we are building a $300 million dollar outdoor stadium to host 9 football games and misc tractor pulls. What we really needed was another hospital and a handful of new schools.
Life is about balance. Not every tax dollar should go into hospitals and schools, just like not every dollar you earn should go into savings. Some of us like to enjoy life a little.
&&&&&&&&&&&&&
Tax dollars should go into none of the above.
I guess Poloz was right when he said the economy is atrocious.
RE: #52 crowdedelevatorfartz on 05.31.15 at 3:43 pm
@#33 North Burn-a by
My rent hasnt risen in the 2.5 years ive been here.
But I bet you condo fees have.
Is your condo leaking yet?
BWAHAHAHAHAHAHAHAHAHAHAHAHAAHA
It get even worse when someone farts in the crowded elevator of the leaky condo he just bought.
As always, interesting commentary.
the Root Cause to ALL the financial doom and gloom in Canada is linked directly to the fed policy makers. The policy makers are manipulating the economy and are getting exactly what they want for their political reasons only. These same policy makers need to Look into the Mirror as to who to blame. The sheeple did what the sheeple were allowed to do. How can a politician preach responsibility and accountability when their own house is littered with corruption. Anyone need an example, follow the finance behaviour of the Senate, and now there are indicators that many MPs follow the same business model.
In Alberta the PC leader told Albertans to Look in the Mirror. We did and many Albertans decided that it was time to throw these Liars and Crooks out the door. We were successful and now Albertans are learning that the financial hanky panky was worse than expected.
to date Rachel is being open, honest and transparent. Doing what is necessary to provide a balance between big corps and Albertans. The gap is vfery wide between what the big corps and big government say and what they do. The big corps and big government will use many resources to instill fear-mongering onto the sheeple.
In alberta the present day ndp is not the CCF of the old days, but todays PCs is a new breed too.
In alberta many people decided thaat Enough is ENOUGH. Hopefully that trend will continue to the fall fed election.
Is the last chart house price to annual income? Gross or net?
just saw an article on Zero, this time I am actually serious about it.
Titled “Will A Robot Steal Your Job?” it’s just the latest robot vs job talk popping up everywhere.
The conclusion is that major robotic installation is more likely to happen in time of loose monetary policy. IE now. That makes since robots are not (yet) cheap.
Looking around, the Americans and the Chinese are installing robots to increase their productivity, and the Canadians are buying expensive RE. We are going to be left behind even more. On the plus side (for the Canadian capitalists), the workers are locked in their jobs for the next 15-25 years, in fear of losing their houses. That should keep the wage down.
@21
……..
Most folks just govern their lives using whatever is available to get what they need to carry-on
The federal gov makes the policies. Most people expect that the policies are the work of knowledgable, honourable people who have the data required to make the right decisions. Those charts show multi year trends. Nothing has happened overnight so as to catch the governing PC’s off guard. The current policies have been nothing short of negligent.
&&&&&&&&
To think bureaucrats and politicians are knowledgeable and honourable is foolish. To think that knowledgeable and honourable people can look at data and make the “right” decisions is delusional.
Will Pole-oz cut rate next?
Is the Dope cathartic?
I am thinking of voting Conservative even though they are not conservative because the socialist and communist commenters are scary with their unethical thinking; greed, envy, jealousy, ignorancy of economics and selfishness. Do they not study French revolution and other communistic failures? If they get power economics will be worse.
I read comments for a couple months to get a measure of it.
I just cannot get passed Conservative-Stasi spying and loss of liberty (bill S7,C51) and the Afghanistan (never conquered in history), Libya (muslim brotherhood caliphate forming by commie Obama), Ukraine (a Russian/Ukraine ethnic problem, like Quebec), and nearly-Syria(Canada lied about gassing) … all wrong wars. And the baby killing and homosexual marriage/child adoption anti-Christian concession of all parties.
I wrote to stop them, thinking that was more important than my vote, but they do not listen to conservatives. They think conservative fiscal policy is sufficient, not social ethics, so they can win in this return of ancient pagan practices indoctrinated by leftist athiest TV. Linda said weeks ago and the National Citizens Coalition says, go fiscal only.
Why win if your foundation is as unethical as the NDPers and Liberals?
So I make 6 figures, live in Vancouver. I’m not interested in buying an 800 sq ft condo and being a slave to it but doing nothing except saving $2K+/month is kinda boring. I should be living a little. Would it be stupid to take advantage of interest rates and buy a new car? Nothing crazy, maybe 30K, just better than my economy subcompact I bought a few years back?
Am I being foolish or is it okay to take on debt once in awhile even for a depreciating asset that puts a smile on your face.
#54 Joe Schmoe on 05.31.15 at 3:51 pm
#31 HJD
Blaming 1% of the population for the mistakes and financial ignorance of the 99% is very lame.
This is blind bigotry. Blame asians, blame Harper, blame the rich….but don’t look in the mirror and figure where the mistakes come from.
++++++++++++++++++++++++++++++++++++
So your suggesting that the fact that here in Vancouver where we pay 60% in taxes for the privilege to own a home and drive a car is out fault? The “people” tax ourselves into the stone age?
It was also suggested that we make poor financial choices. Pretty hard to make poor choices when there is no money left after being taxed into the stone age.
Because “we” don’t ask for more and more and more and more taxes……govt does that all on its own without our permission. And it does not “matter” who you vote for. They all keep doing it. And it’s taxes that are preventing people from getting ahead. We can’t all be million dollar business owners and google engineers. If that were the case, where would the labour come from? I don’t count govt wages as everyone knows they are massively overpaid for menial work and very very poor productivity. This is where most of your (increased) tax dollars go. Govt wages. Govt is destroying itself all over the world. The end game is not the 1% as rightly stated, its Govt. And it’s going to be biblical.
Mark, cost of living is going up, not down. That’s inflation, not deflation. Get over your Phillips curve/Keynesian view of the world. That’s just the way it’s taught in Econ 101. Study economics a little further and you realise there is much more to it. As Garth has said, we will likely see consumer price inflation coupled with asset price deflation, which will be a most unpleasant experience.
The US shrank in Q1 as well; no rate increase this year, but they have to keep pretending. QE has been handed off to the Europeans for a while, and the Japanese never stopped. We will see more Fed intervention before a rate increase.
QE was wrecking the duration matching of the big insurance companies. They had to pause.
Canadians are PLAIN. AND. STUPID.
That is all.
lw
Six chilling charts, and the 7-th, the Greatest Wonder of the World, the Miracle of Compounding Promises.
Behold … The Creation of Wealth (not sarcasm):
http://www.macleans.ca/wp-content/uploads/2014/12/Macbeth-debt.png
https://research.stlouisfed.org/fred2/series/TCMDO
My redneck friend (one of the few Conservatives I know) a few months ago said that British Columbians were morons for ever electing NDP governments and that if they ever got back in he would move back to Alberta where everything is free…….
Lots of changes coming in Canada.
govt and corp. are at fault for people working hard and not having a decent life style
so, it’s simply natural to enforce TAXATION on the ones making too much $$$ and probably too easy….after-all if they don’t like it – can let a piece of the pie to someone else
BANKS PROFITS (after expenses, salary for the [email protected]) coming from DEBT CREATION aka out of nothing should BE TAXED 100% because they launch new Canadian electronic dollars from thin air and devaluate the exiting currency – add to wealth of money on market, raising or sustaining prices (like housing) that should fall otherwise (banks & govt. do not allow the economic laws to rule the economy), and the proceeds distributed to all Canadians, inverse with their income. For what it can be no peace without JUSTICE.
govt and corp. are obviously at fault for people working hard and not having a decent life style – just compare wages and prices with 15 y ago and get enlighten – stop lying to yourself or others
so, it’s simply natural to enforce TAXATION on the ones making too much $$$ and probably too easy….after-all if they don’t like it – can let a piece of the pie to someone else (work less hours, teach the young)
BANKS PROFITS (after expenses, salary for the [email protected]) coming from DEBT CREATION aka out of nothing should BE TAXED 100% because they launch new Canadian electronic dollars from thin air and devaluate the existing currency – artificially adding to the pool of money on the total market, raising or sustaining prices (like housing, food) that should fall otherwise (banks & govt. do not allow the economic laws to rule the economy), so all the proceeds distributed to all Canadians, inverse with their income.
For what it can be no peace without JUSTICE.
No matter what capitalistic greeders want, the democracy will return power to the masses.
Yet most people only need to see Chart 6 to decide that RE is the only way to riches. Screw diversification, screw population change, screw stale income. Foreign investment will save us, think most Canadians.
Deus Ex Machina.
If people think the minimum wage is all good if rises.
Anyone in business will tell you it’s not just wages it’s the burden as well ie. Health care,Vacation, workers comp., EI.
Mat leave, sick time, stat holidays,
We all get it people need a living wage. But you can’t even try to hire and train workers @ $20 and hour.
#56 I’m stupid on 05.31.15 at 3:51 pm
Agree. Also in Switzerland too, if someone in high school isn’t too keen with university but is good with his/her hands, they’re diverted to trade school. Not everyone can be a doctor, but sure as hell we need mechanics.
For simplicity and clarity:
The government policy makers set policy to Reward the Spenders and Punish the Savers.
What consequence can be expected from this policy?
to make more money in this situation, a person will be rewarded multi fold by being debt free with a lot of money in the pocket. There are FSBO appearing because the owner needs cash NOW. these are the same owners who hold title to their house but have a lot of debt on toys and high living.
The rich know how to get richer.
OTOH, as an old geezer I still demand my government entitlements because I am responsible and accountable for my actions.
Garth posted a chart showing the housing price disparity between Canada and the US. Comparing actual listings of similar homes in Canada and the US makes it clear that the price disparity is much worse than what the chart shows.
Let’s compare:
House criteria:
* MIN. 1,800 sq. ft.
* MIN. 3 bedrooms (only bedrooms main floor and above will be listed)
* MIN. 2 bathrooms (only bathrooms main floor and above will be listed)
* 2005 or newer
* Attached double garage
Canada (small towns and cities far from major cities):
— $ 460 K, Tisdale, SK — (3 beds, 2 baths, 1,670 sq. ft., built in 2009, attached double garage)
** Listing # 535184 **
** Only 1,670 sq. ft. **
Location on map
— $ 400 K, Dauphin, MB — (3 beds, 2 baths, 1,550 sq. ft., built in 2015, attached double garage)
** Listing # 1412926 **
** Only 1,550 sq. ft. **
Location on map
— $ 500 K, Taber, AB — (3 beds, 2 baths, 1,868 sq. ft., built in 2008, attached double garage)
** Listing # LD0051040 **
Location on map
— $ 430 K, Creston, BC — (3 beds, 2 baths, aprox. 1,800 sq. ft., built in 2009, attached double garage)
** Listing # 2404662 **
Location on map
US (major cities):
$ 101 K, Coolidge, AZ (Phoenix) (4 beds, 3 baths, 2,306 sq. ft., built in 2006, attached double garage)
$ 102 K, Decatur, GA (Atlanta) (4 beds, 2.5 baths, 2,306 sq. ft., built in 2005, attached double garage)
$ 127 K, Jacksonville, FL (4 beds, 2 baths, 1,922 sq. ft., built in 2007, attached double garage)
$ 123 K, Forth Worth, TX (3 beds, 2 baths, 1,888 sq. ft., built in 2005, attached double garage)
Lemmings
Warren Buffett has noted that while lemmings as a group have a bad reputation, no individual lemming has ever received bad press.
People feel safe doing what the group does.
What a grand self distructive life I lead. It brings me so much joy. Mothers pray your kids never grow up with a low boardom tolorance.
Game Theory, I could go with the cooperative strategy and save my job at the tax farm…not that I need it.
Can’t do it.. Even if I wasn’t a zillionaire.
Little duchbag managers in IT, making a complete mess off things, I’ve protected them , lied for them, saved their asses zillions of times. I’m the best in my feild, 40 thousand hours of experience. Malcome Grommel says it only takes 10 thousand for guru status. I’m god at my game.
All my shit running like a swiss watch at the tax farm.
Now I could if I was a nice guy, warn them what’s coming down the pipe, how it will screw everything up and they will all get fired as a result.
But I’m choosing to say nothing, have my good bye drinks at the duke, then spend the rest of the summer on lake Ontario. Then in the fall, LA, maybe Newport Beach.
My spy’s will give me play by play that will give me metal orgasums, then they will need to hire atleased 50 off shore head bobing wizzards to cover me. Which will eat there bonus.
There is only one Smoking Man…
I want to say to them bet accordingly, not this time.
Banks are Misunderstood
Paul – call your bluff on 05.31.15 at 6:45 pm
BANKS PROFITS (after expenses, salary for the [email protected]) coming from DEBT CREATION aka out of nothing should BE TAXED 100% because they launch new Canadian electronic dollars from thin air and devaluate the existing currency – artificially adding to the pool of money on the total market, raising or sustaining prices (like housing, food) that should fall otherwise (banks & govt. do not allow the economic laws to rule the economy), so all the proceeds distributed to all Canadians, inverse with their income.
***************************************
Paul I agree with your comments that the rich can stand higher taxes.
But you wrong about banks.
If “money” is the ability to spend then anyone creating debt or offering credit creates money.
Banks are in the business of creating credit and credit is completely vital for the economy.
A 100 years ago an upstanding citizen could write a “note” good for payment in 90 days. That was passed around and spent like money.
Money is created all day long by EVERY lender and it is a vital part of the economy.
It’s difficult to explain it all but poor people are most certainly not poor because of banks.
Poor people line up to borrow money.
Without credit people with jobs but no money can starve.
Buy bank shares if you think it is such a fountain of wealth
Stop reading doomer sites.
Why do I bother… what a waste of time.
“QE was wrecking the duration matching of the big insurance companies. They had to pause.”
Insurance companies have an excess of assets over liabilities, as they are required to by law (ie: solvency on a mark-to-market basis is required by the regulators). Lower interest rates and QE was actually helping insurance companies/pension funds. If you look at the past 30-35 years of falling interest rates, insurance companies, among other financial firms, were some of the best performing companies of the S&P500. Pension funds have become so wealthy from excess returns, particularly in the fixed income space due to falling interest rates that they’ve been able to afford to lavish extravagant compensation packages on their management and employees.
Its the rising rate environment which causes losses when duration of assets exceeds duration of liabilities that the insurance companies need to fear. But right now, insurance and the rest of the financial sector is severely over-bloated as a proportion of the economy. The amount of money the insurers have conjured out of literally nothing over the past few decades has been enormous relative to investors in real plant and machinery who have struggled to even eke out a profit in the environment of falling inflation, and now, deflation.
#60 Drill Baby Drill on 05.31.15 at 4:04 pm
#17 Mark
“no inflation” ?????
Please take a look at the costs of fruits and vegetables in Safeway this spring and tell there is no inflation. Inflation is very much alive and well with almost all foods especially the imported kind.
Also gasoline per litre has edged up again in the $1.20 or more range.
Last summer when oil was $105 USD/bbl gasoline avg in Canada was over $1.35/litre yet we at 89% of last year price per litre but a barrel of oil is only 57% of $105 WTI USD.
…..
Ahem. Just paid 134.9 in Van. I WISH I could pay 1.20.
Pure gouging. What a racket.
Its funny,the Nikkie is at all time highs,Japan’s unemployment at 5.5%,qe,very low rates just like USA.
As for Canada,it will have zirp even when the boomers are long gone.The system is broken and it can’t be fixed.
We’re broke so ask the socialists to run the country?
The story so far. One party screws up so badly, or accumulates so much baggage that we elect the other party. That party screws up and accumulates yet more heavy duty luggage. Then we switched back to the first party again (or at least the remains of it). They screwed up and have been hateful, horrid and nasty to boot. Now we’re all going to try out the NDP.
Seems fair, really.
I’d settle for competent administration at this point, but Mr. Mulcair does have a very fine beard. Perhaps I’ll get an orange lawn sign.
Eh, Garth… Re: Ontario Pension item.
Ontario’s Finance Minister said, in the Legislature on record, that the banks/insurance companies will run a person’s company or individual pension plan……… This does not seem to be an everyone into the same pot run by folks your pension plan employs so to speak, but a provider, multiple providers…….. Something smells here, when a banker buddy tells us we have to let a bank/insurance Co. handle the goodies… What da’ ya think?
You are not referring to the same scheme. See my additional comment. — Garth
Finance Min. Charles Sousa: “The purpose of the Pooled Registered Pension Plans Act, 2015, is to provide a legal framework for the establishment and administration of PRPPs in Ontario. It would apply to individuals employed in provincially regulated businesses and the self-employed in Ontario, as well as individuals employed in federally regulated industries in Ontario whose employers do not offer PRPPs.
Bill 57 largely adopts the federal framework, but this proposed legislation, Bill 57, includes Ontario-specific features where provincial law and/or processes are required to apply or where additional provisions are required for added clarity or consistency with Ontario’s minimum pension standards legislation.
In practice, we might expect PRPPs to work as follows: Employers who choose to offer PRPPs to their employees would be responsible for selecting and entering into a contract with a third-party PRPP administrator such as a bank or insurance company. The administrator would then be responsible for managing PRPP investments and for communicating with plan members on matters relating to their PRPP.”
Ontario Legislature – Hansard…
I did not reference the voluntary pooled pensions plans, which will likely fizzle, but the mandatory Ontario Pension Plan, the premiums for which are being deducted from incomes. — Garth
#94, I hear ya. But tptb are only interested in the cheapest of the outsourced, quality be damned. Good luck to you, and I’ll be envying you your summer off.
#83 LeeeeeRoooy
U are back. We missed your insightful well articulated commentary. Keep up the good work!
Do you live in a condo in N Burnaby?
“In reality, most people have been over-borrowing, over-consuming, under-saving and now increasingly realize they could be screwed…..”
******************
It’s amazing. I see it all around me. People don’t ‘get it’….and they don’t WANT to ‘get it’. I give up. Glad Garth isn’t. It’s scary and quite depressing…sad.
#30 Nagraj on 05.31.15 at 2:21 pm
…
Mrs. Churchill: “You’re drunk!”
Churchill: “And you’re ugly. In the morning I’ll be sober and you’ll still be ugly.”
Not Mrs. Churchill. Possibly to a female socialist MP, but more likely just a story:
http://quoteinvestigator.com/2011/08/17/sober-tomorrow/
These makes him sound like Mr. Smoking Man’s previous incarnation:
“My rule of life prescribed as an absolutely sacred rite; smoking cigars and also the drinking of alcohol before, after and if need be during all meals and in the intervals between them.”
“Play the game for more than you can afford to lose… only then will you learn the game.”
#5 Former: “A friend told me recently that the only Way he expects to pay off his Fraser Valley home was a hopeD for inheritance when his parents kick the bucket. This is from someone approaching 50 and three young kids. Yikes”
*****************
Anxiously waiting for his parents to die? He may be in for a surprise. Parents don’t owe their kids an inheritance.
#54 Joe Schmoe
#31 HJD
Blaming 1% of the population for the mistakes and financial ignorance of the 99% is very lame.
This is blind bigotry. Blame asians, blame Harper, blame the rich….but don’t look in the mirror and figure where the mistakes come from.
Watched a colleague brag about his 7 TVs while complaining his wife was laid off.
Totally the 1% fault. Tax them more!
……………………………………………………..
Joe, You’ve been brainwashed by Garth.
Well they may as well tax the rich more because the poor by definition don’t have any money. Desperate times call for desperate measures.
However, wherever they apply the tax it affects the final cost of goods and services for everyone. For example let’s take a sole-proprietor operating a convenience store and say his after tax income is $150,000. So he now has to pay 2% more on $25,000 dollars. What’s he going to do? If the market will bear it, he’ll raise prices by a little bit. Since the corporations he competes with are all getting a tax increase as well and likely raising prices, the market probably has no choice to bear it and prices will rise for the rich and poor alike.
No matter where you point the tax finger everybody pays. If you tax the rich disproportionately they just increase their prices passing the “expense” (which is what it is from their point of view) on to everyone else.
Ever wonder why it costs $140 an hour to hire a plumber or an electrician when the guy doing the work maybe gets $40 and hour? Taxes, paperwork and compliance. All of that is government induced. Sure there is some profit for the owners of the business but they have to eat too. I’ve left out the cost of the van and tools, but that is less than the cost of the employee so you can still see the point. And the van and the tools are way more expensive than they need to be because there are taxes all the way along there too.
I had an interesting conversation with a friend the other day who is a proponent of a flat “sales tax” of 20% and the elimination of all other taxes. I said it couldn’t be done. The reason we have corporate taxes, dividend taxes, income taxes, sales taxes, sin taxes, property taxes, and so on ad nauseum is to prevent leakage and move taxes to today. In theory a flat single point of tax would work since all money earned or invested eventually get spent, but it has 2 problems. First, people saving rather than spending wouldn’t be taxed until they went into retirement and started spending down their saving (you could eliminate RRSP’s with a flat sales tax). Second, the poor would realise they are paying the tax. They are now through hirer prices via taxes on the rich, but they aren’t smart enough to know it.
On to government pension plans and I can do this in one word: “Ponzi”.
Ok, now a word about minimum wages. Increasing the price of a good or service always results in a decrease in demand. So higher wages equals lower demand. That’s econ 101. Raise the price of a waitress/waiter to $15 an hour? Now you have an iPod on every table, you put your order in yourself, and the only servers are the folks bringing the food out. Even McDonald’s is experimenting with these self serve kiosks. A&W at Pearson’s has one too, check it out next time you go through. Most people prefer the cashier, but at $15 an hour there isn’t going to be any cashiers. Your fast food restaurant will increasingly resemble an ATM. They are working on automating the kitchen as well.
Teacher’s unions are a great example. They constantly argue for hirer wages but also smaller class sizes and fewer working hours. Well, you can’t do all that without driving the cost of education up exponentially and everybody pays for that somehow through property taxes on homes and businesses alike. But what happens then when the internet replaces the classroom? The technology is already there and so is the curriculum for some grades, you can do high school from home. And the kids already have the computer to play MineCraft. I have a niece that is doing grade 8 this year from home just to avoid the bullies on the playground, proving it could be done and has some intangibles.
But what about PE? Unfortunately the PE program in schools has been so watered down as to be useless. You can’t even play dodge ball anymore! So many parents are enrolling their kids in soccer, hockey, baseball, club basketball as opposed to school, heck even football is available now outside the school system. My kid is only 9 and he is on the soccer field 4 times a week, sometimes 5. That is where the fitness is coming from, not the school. Sure, it is a competitive environment by nature, which some parents and most teachers dislike, but hey it’s a competitive world. And I guarantee you the soccer kids or especially the hockey and football kids are not being bullied. They stick together and understand competition. I only hope they don’t become the bullies but hopefully the “sportsmanship” that is supposed to go with sports (but often doesn’t) helps.
Bad moon rising.
When they automate the Bank of Canada, U.S. Federal Reserve, Bank of England, ECB, Bank of Japan and all other central banks worldwide it will be too late!
Ontario is about to reap what it has being sowing for over a decade.
Welcome to the New Poverty.
#10: “I’m sending today’s post to a few friends.”
********************
Good luck. No one “can handle the truth”.
Garth,
Nobody bought Maurice “FSBO” Vellacot’s house and he did what he said and listed it at $450,000.
He may be a conservative, but he’s a man of his word!
http://www.realtor.ca/propertyDetails.aspx?PropertyId=15733406
Maurice Watch in full effect…..
I don’t disagree with the idea of beefing up CPP by having people pay in more. Frankly, this should have been done 40 years ago, when the huge baby boomer generation was young, frisky & earning their way. CPP is a defined benefit pension plan, portable to any employer in Canada. Unless you do the cash under the table thing, you pay into CPP.
A lot of people have pension envy – many disparaging (at best) comments about the rich DB pension plans others (usually government workers, though there are still some private companies out there who do DB plans) that basically boils down to ‘if I can’t have what you have, you should not have it either’. An enriched, everyone in the pool CPP would potentially get rid of that pension envy, especially if it were ‘the only’ pension plan. In other words, you might have employer RRSP matching contributions or some other way of rewarding staff for long service, but the only pension plan, universally paid into, would be CPP.
However, this is not reality today & enriching CPP, while an excellent idea for the rather large percentage of those who could not save for retirement for whatever reason is not enough to help those people now. All those baby boomers (& yes, there are a lot of them) who could not or would not save for retirement are now facing a grim reality – work regardless of health because you can’t live on what you’d get on CPP, even with OAS & GIS thrown in – or if you can not work due to ill health, hope you don’t live too long, because life is about to become very unpleasant indeed. Charles Dickens famous character Scrooge put it very well, in that happiness lies in the hands of those whose income exceeds their expenditures while misery is the lot of those whose income is insufficient to meet their expenses.
#99 Nora Lenderby on 05.31.15 at 7:29 pm
We’re broke so ask the socialists to run the country?
The story so far. One party screws up so badly, or accumulates so much baggage that we elect the other party.
======================
Could be that a professional civil service manages politicians and maintains its policy direction no matter what. Curiously if you want to see democracy in action, try Nebraska.
” What’s up with Nebraska?
The state is among the nation’s most conservative, with Republicans controlling all of state government. But by the time the legislative session had ended last week, lawmakers had repealed the death penalty, legalized licenses for certain immigrants brought to the country illegally as children, raised the state fuel tax and come close to approving a medical marijuana bill.
The liberal-leaning list of accomplishments has left some shaking their heads, but others say it’s not unprecedented in a state with a strong populist streak and an unusual legislative system that gives power to individual lawmakers at the expense of political parties.”
http://hosted.ap.org/dynamic/stories/U/US_NEBRASKAS_SURPRISING_GOP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-05-31-11-48-22
#67 Andrew Woburn
they lie.
Get the government out of the housing ‘insurance’ business and BOC out of interest rates manipulation.
““no inflation” ?????
Please take a look at the costs of fruits and vegetables in Safeway this spring and tell there is no inflation.”
There was a big spike in the winter, because of the shock and awe of the USD$/CAD$ pair shifting value. But contracts have been renegotiated, and prices have come down considerably, at least at the Loblaws-owned grocery store that I shop at.
Meanwhile, prices on most goods are stable to down. Fuel prices are down considerably. The only exception that stands out on a day-to-day basis is beef. But for what I’ve saved on airfares alone this summer versus last, a few bucks more for hamburger or steak is no big deal. And even then, chicken prices have come down nicely over the past year or two.
Debt Money
Money created from a bank loan is created not from thin air but from the promise to repay the loan.
Credit and the ability to consume today and pay tomorrow has been around since earliest man said to his cave-mate. Share your catch with me today and I will repay you when my hunt is successful tomorrow.
There is NOTHING inherently wrong with debt. It’s how we share from those with to those without.
The alternative of never consuming until the full value is saved up would be FAR worse. It’s never been tried in human history actually because it is unnatural and inefficient.
#83 Leroy Washington on 05.31.15 at 6:17 pm
Canadians are PLAIN. AND. STUPID.
That is all.
lw
—
Leeroy!!!
https://youtu.be/LkCNJRfSZBU?t=1m58s
That video sums it all up.
Creatively , sucked dry by your teacher , they want you to draw a pic of harmony. But real life Is a bit more complicated .
I have so much to teach, but my mandate is to keep you bastards from inter galatic power an technology.
Can’t let you bastatds go beyond Pluto. Your all Killers.
When my tribe , Nectonites wanted slaves to serve.
The orders where splice poodle DNA with ours.
Hugo our main scientists loved his pit bull.
I give you humanity, it sheds , it kills.
Your not allowed off this planet.
#95 Shawn
credit can exist in full reserve banking. It is the degree of fractional reserve system debt over utilization that could brake the camel back.
Define mandatory reserves over 30 % and start moving towards full reserve banking, removing central banks from manipulation of interest rates.
Institute non-deficit budget and allow the government to borrow/print in limited quantities interest free in case of urgency.
Then enjoy price stability and growth, not theft from savers.
#117 Mark
You have eyes and yet you refuse to see.
Food prices are increasing significantly, seasonality is a noise, tell me one item that is cheaper today than compared to a year ago.
Thanks for the clarification on the pooled pension plan and finance minister Sousa’s comments. It seems then that folks could have a CPP pension deduction and a ‘company’ pension OR an Ontario pension deduction…. Does that mean that KD is the new diet?…. Bandit’s dish is starting to look good.
#5,
What about if his parents need the money for nursing homes? I hear doctors are, doing wonders today keeping people barely alive for years and years even if they don’t want to be alive. Five years under nursing care will eat up a couple of hundred thousand. OHIP helps to keep you alive but it doesn’t really help you die.
At the end of the day
The people are too weak to take the pain. Especially a generation who had everything given to them and didn’t have to bare knuckle anything to save or struggle to get things.
They will continue to pamper them until they can’t. Then we will all fall.
That is why I can’t see the Canadian Dollar being a bit stable. We will hit the wall just like Greece and then and only then will we face the consequences
Mark, please stop embarrassing yourself.
http://www.tradingeconomics.com/canada/food-inflation.
Here is the statistics on the yearly bases by statistics Canada that has bias to under-report inflation (as this results in higher GDP and less inflation adjustments in CPI related income)
“Personal responsibility” by everyone would be great. Doesn’t look like we will get there soon. Maybe we could start with a system that curbs excesses rather than exacerbates them – the people you are absolving are the architects of the current system.
I’m staring to think Garth is in negotiations to run
What food inflation stats is telling us is that the purchasing power of ‘money’ as measured in real stuff (food) is declining thanks to BOC manipulation of interest rate, which is de-facto theft and stupidity.
#64 BS
Should we have a plebiscite to cut teachers salaries in order to improve schools and cut class sizes? I bet that would pass.
………….
Should we have a plebiscite to cut YOUR salary in order to improve schools……I bet that would pass!!
Where is The American today? We want more of The American! Besides Garth’s infinite wisdom the only reason my wife and I visit here is to read The American’s views. He or she is a great read without all the sugar coating. We get the eloquence of Garth and direct pointedness of The American. Garth is The American an alter ego of yours so you can really say how you feel? It is our favorite way to spend an evening. Thanks Garth!
Most people are woefully unprepared for the rest of their lives, or desperately envious of those with wealth. This is the soil from whence the shoots of socialist thought sprout.
——————————-
I have money and I am a socialist. I drive a KIA because I choose to spend my $ on what appreciates, not what depreciates.
That being said for the naysayers, my family came here from countries where there was a lack of balance in society and war was the ultimate outcome. A socialist society would still have ‘haves’ and ‘have nots’ but I prefer to live in a society where people have what they NEED, not necessarily what they WANT.
On the topic of how much more responsible a conservative government is, well, how can you explain how an Alberta conservative government having 20+ years of oil boom not being able to put a dime in the bank for those rainy days? Not enough infrastructure, health funding, etc to meet the NEEDS of all its citizens when the rainy day arrived?
People are too worried about the now and forget and disregard the lessons history is always trying to teach us. We are going down a dangerous path if we dont think about the health of society.
America virtually invented statisics and “big data”. Yet, according to the Washington Post, no one knows how many people are killed by US police every year.
“Fatal police shootings in 2015 approaching 400 nationwide” http://www.washingtonpost.com/national/fatal-police-shootings-in-2015-approaching-400-nationwide/2015/05/30/d322256a-058e-11e5-a428-c984eb077d4e_story.html
According to a less reputable, but not necessarily wrong site, “U.S. Police Kill More Civilians in March than UK Police Killed in 100 Years”
http://libertyblitzkrieg.com/2015/04/07/u-s-police-kill-more-civilians-in-march-than-uk-police-killed-in-100-years/
You could reasonably object that this has nothing to do with a financial blog, but, at some point, the US is going to have to deal with this or face severe financial consequences as investors rethink their belief that America means liberty and justice for all.
Although I was around when Selma, Alabama was a current issue, I somehow believed that the good side of America would prevail and everything would get better. My hopes were dimmed by events in Baltimore, a city run by Democrats, many of whom are black. My hopes were crushed by the following article written by a black police officer. Does America have a race problem or a class problem? If it is class, the coming wave of white unemployment could trigger a revolution.
Is this what it is really like to be black in America?
“A young man about 18 years old answered the door, partially opening it and peering out at my partner and me. He was standing on crutches. My partner accused him of harboring a suspect. He denied it. He said that this was his family’s home and he was home alone.
My partner then forced the door the rest of the way open, grabbed him by his throat, and snatched him out of the house onto the front porch. She took him to the ledge of the porch and, still holding him by the throat, punched him hard in the face and then in the groin. My partner that day snatched an 18-year-old kid off crutches and assaulted him, simply for stating the fact that he was home alone.”
It gets worse. Much worse.
http://www.vox.com/2015/5/28/8661977/race-police-officer
In follow up to my previous post, I for one am more than willing to pay a premium to live in a country where there is peace and enough prosperity to share with those for whatever reason (and there is a wide variety) don’t have it.
#117 Mark on 05.31.15 at 8:45 pm
““no inflation” ?????
Please take a look at the costs of fruits and vegetables in Safeway this spring and tell there is no inflation.”
There was a big spike in the winter, because of the shock and awe of the USD$/CAD$ pair shifting value. But contracts have been renegotiated, and prices have come down considerably, at least at the Loblaws-owned grocery store that I shop at.
Meanwhile, prices on most goods are stable to down. Fuel prices are down considerably. The only exception that stands out on a day-to-day basis is beef. But for what I’ve saved on airfares alone this summer versus last, a few bucks more for hamburger or steak is no big deal. And even then, chicken prices have come down nicely over the past year or two.
————————————————
You seem to live in some sorta parallel universe of anti-reality.
Smoking Man:
You should do motivational speaking sessions at local public schools to children.
Steve-O
Best video I’ve seen on how the economy works. We’re right at the point of taxing the rich.
https://youtu.be/PHe0bXAIuk0
We just bought a house on the East Coast at 2.5 times our income – a ratio we could well afford. This purchase was made despite the protest of many family members who felt we could go much higher (wifey and I ignored the white noise and kept emotions in check).
I found that the scariest detail about the last chart is for those of us who stayed within the age-old affordability benchmark (thus below the current average), there must be several who are much higher than the new normal average (!) of 5 times income.
Unbelievable.
#176 The American on 05.30.15 at 11:34 pm
……. evil and tyrannies of the U.S. Military, yet they’ve never lifted a finger to touch Canada. The delusion is beyond hilarious.”
What about the War of 1812?…. and then you got your butts handed back to you…..better to say nothing and be thought a fool than to open yer yap and remove all doubt!
#132 Andrew Worburn.
—-
Race is a problem but in May there were 40 black on black murders in Baltimore
Nice charts by Garth today. Shows Canadians obsession with cheap debt and overpriced real estate. Shows that Canada’s economy doesn’t really produce anything and generally sucks. The Canadian peso. Coming soon to a business near you.
You seem to live in some sorta parallel universe of anti-reality.
He lives in a place called underemployed poverty.
Eaga Beava, Canada wasn’t even a country then. So, perhaps you should reconsider Canada was fighting on behalf of the British as a colony. The U.S. never lifted a finger on Canada as a nation. Remember this. So, perhaps you should consider being EDUCATED first before spewing more propaganda you’ve been fed since you were 3 days old
Mark, please stop embarrassing yourself.
Nice source. I enjoyed reading it.
Poor Mark. No sources. Just opinions that turn out to be factually incorrect. Gotta rationalize why he isn’t making any $ I guess
Insurance companies have an excess of assets over liabilities, as they are required to by law (ie: solvency on a mark-to-market basis is required by the regulators).
Completely incorrect blanket statement.
The law cannot compensate for poor underwriting standards across all insurance companies.
I think I know why Mark can’t a crack 6 figure salary. He’s not smart. But pretends to be. That’s why.
#142 The American on 05.31.15 at 10:01 pm
Suggest you focus on invading countries like Grenada…..wouldn’t want to bite off more than you can chew!
As Garth has said, we will likely see consumer price inflation coupled with asset price deflation, which will be a most unpleasant experience.
Bang on.
That’s why Garth is in the 1% baby.
The Ontario Pension Plan is a flat out tax grab. The funds go into general revenues, the current government won’t have to deal with it EVER. Expect epic mountains more of this in the future.
#108 Non-plused
“… But what happens then when the internet replaces the classroom? …”
Exactly this, in that there’s a plethora of learning material out there. For example, Khan Academy is better than didactic classroom teaching because the students can learn concepts at a self-selected pace in order to build a solid foundation for higher concepts. More over, it’s better to teach problem solving, critical analysis over rote memorization of facts. I actually learned a lot myself and reviewed some subjects that I no longer employ in my day to day work life.
“Completely incorrect blanket statement.
The law cannot compensate for poor underwriting standards across all insurance companies.
“
Poor underwriting standards? What are you talking about? The insurance industry has done an excellent job of underwriting and is amongst the most profitable sectors, in the past 30 years, of the major market indicies in which it is represented.
All insurance companies must have positive shareholder equity, that is, assets (ie: investments) exceed liabilities.
I think I know why Mark can’t a crack 6 figure salary. He’s not smart. But pretends to be. That’s why.
“
Nice try troll. Stop making up a bunch of nonsense. Its really undermining whatever little credibility you had.
“Nice charts by Garth today. Shows Canadians obsession with cheap debt and overpriced real estate. Shows that Canada’s economy doesn’t really produce anything and generally sucks. The Canadian peso. Coming soon to a business near you.”
Couldn’t be anything further from the truth in your statements. Canada is a prolific producer and long-term net exporter. Huge amounts of export capacity in the O&G, but also in the uranium, Potash, agricultural products and other industries has been built over the past number of years which has more than fully made up for losses in manufacturing. We’ve become a prolific importer recently because of the housing bubble and the huge demand to fill the new houses with imported stuff from abroad. But as housing prices continue to fall, even those imports will be significantly truncated.
“You seem to live in some sorta parallel universe of anti-reality.”
Not really. And the over one thousand bucks I saved on airfare just on one summer trip alone compared to the same trip last year for me and my significant other can easily have me eating steak for most of the year — the only item which has really risen with any significance.
If there’s all this inflation, I’m not seeing it. Nor is the bond market, which would have long ago freaked out if inflation truly was at the sort of levels the trolls here claim.
I do agree that staples are likely to rise probably faster than headline CPI going forward, but its down, down, down for any sort of middle-class luxury goods or services that formerly would have been heavily purchased on credit, mortgages, HELOCs. As house prices are declining and the equity to support such lending just doesn’t exist like it used to. Employment quality is also in the crapper and is set to get much worse.
#13 North Burnaby on 05.31.15 at 1:04 pm
“Condo prices rose 10% YoY in North Burnaby, renters are getting pushed out further to Coquitlam!! Hahahahaha”
Not at brentwood. Been flat since 2010.
“I found that the scariest detail about the last chart is for those of us who stayed within the age-old affordability benchmark (thus below the current average), there must be several who are much higher than the new normal average (!) of 5 times income.”
Of course, but a lot of it shows up in ways that you might not immediately imagine. For instance, it was previously verboten for a banker to write a loan that did not fully amortize before the expected retirement age of a borrower. Today, its commonplace, and organizations like the CMHC, ostensibly due to age discrimination laws, don’t bat an eye when approving such loans.
It only took a very minor tweak to CMHC subprime mortgage insurance, in Budget 2013, to mark the peak of the Canadian housing market. Can you imagine what sort of tightening will occur once the defaults really start rolling in over the next few years? Rising equity can no longer cover things up. As Calgarians are seeing, liquidity has disappeared. Even in Vancouver/Toronto, condo units are having significant troubles requiring heavy discounting by vendors, and SFH’s have gone a few years without appreciation. A huge swath of the economy had grown entirely dependant on continuous price increases and rising equity — and now we’re seeing decimation of that delusion.
124: From your link:
Food inflation over the past year is below its historical average according to your source.
There is more to inflation than just food. Stats Can consumer price index all items is 0.8% over the last year which is way below average.
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/cpis01a-eng.htm
#35 North Burnaby on 05.31.15 at 2:35 pm
“#20 BS
Dude, youre out of touch with reality.. Good lucky trying to rent a new condo in Vancouver. Your monthly salary isnt even enough to pay for it!”
Actually, you’re out of touch with reality.
Rents are not that high in Vancouver relative to other cities. In downtown Van, my buddy rented out his fully-furnished 1 bed by the Library for $1950 (about $2.50 psf) in Feb. Not that high on a per square foot basis. My parents have 2 condos in Yaletown. Rents gone up 20% over the course of 9 years (to about $2.50 psf). That’s not very impressive over nearly a decade. In North Bby, my buddy rented out his 1 bed this month for $1300 (less than $2 psf). That’s very low for relatively new condo product.
Calgary and Edmonton saw average rental growths of 7-8% for several years. Now that’s impressive.
In Toronto, full rental apartment buildings are going up seeking +$3.00 psf for 1 beds.
London, I get ₤3.35 psf, or close to $6.30 psf, or about over 2.5x compared to downtown Van. I have friends that pay even more…
In other words, Vancouver’s not very impressive when it comes to investing in rentals…
#73 pinstripe “In Alberta the PC leader told Albertans to Look in the Mirror. We did and many Albertans decided that it was time to throw these Liars and Crooks out the door. We were successful and now Albertans are learning that the financial hanky panky was worse than expected. ” I agree with your statements, most people were strong supporters of the PC for 40 years. In my opinion the last 4 years were brutal in AB with all the scandals and entitlements. The negative news coverage on a daily basis on the PC’s was some of the worst I’ve experienced in a long time in AB in politics. The part that I found the most bothersome was unable to balance the budget since 2007, every year since then AB has run deficits. It was always blame this or blame that and yet there were many years from 2007 onwards where oil prices traded above 100 dollars. I deeply believe new leaders were needed as to try and get AB to run a surplus. Whether the NDP can do – time will tell. Anyways, change is good and look forward to a new government in AB. AB needed to clean house, start fresh with new ideas and new people. That is what most companies in the corporate sector/sports teams do if there is a continuance of deficits or poor performances.
“And is it any wonder that the monkey’s confused”
–Roger Waters, Amused to Death
Yes, there was inflation, alas now BigD is in da house, so we get to see where those cumulative pocketed percentages were really coming from.
Those complaining about inflation, and stealing savings, and “The They”, and “TPTB”, and the lizards, and the MOTUs, and the aliens, and the Rothschilds, and the Rockefellers, and Da Fed, and Da Creature from Jekyll Island, are going to finally realize how inflation fondled them, and what this deflation thingy is all about. A Huge surprise, methinks.
#151 Mark
Couldn’t be anything further from the truth in your statements. Canada is a prolific producer and long-term net exporter. Huge amounts of export capacity in the O&G, but also in the uranium, Potash, agricultural products and other industries has been built over the past number of years which has more than fully made up for losses in manufacturing. We’ve become a prolific importer recently because of the housing bubble and the huge demand to fill the new houses with imported stuff from abroad. But as housing prices continue to fall, even those imports will be significantly truncated.
—————————
Uranium will do very well, Potash and grain production will do fine. But that is very little in the grand scheme of things.
Unfortunately our trade balance will deteriorate further as we import most of the produce which is getting more expensive, we produce almost nothing except cheap goods for US that can be made elsewhere.
If we can convince the world that the CA dollar is strong somebody might decide to hold it as part of their reserves, balancing somehow the worsening trade and account deficit.
But as the stupid in charge of BOC talks it down, nobody will hold currency of a country with economy of a colony (some resources + labour, everybody has cheaper labour these days)
We need innovation as Germany, we can not compete with the rest of the world with cheaper labour and we are becoming less and less productive,
Never before have your neighbours owed so much nor owned so narrowly. Now they want to elect politicians promising public policy to wipe away their mistakes by taxing others and providing lifelong security.
it’s not going to work. Two men I know, pretty sure they earn above average. Way above. Emigration is a plane ride away.
http://www.merriam-webster.com/dictionary/emigrate
#130 – So I’m not the only one who always enjoys reading the American. I agree fully with your analysis. “Garth’s wisdom and the American’s directness. I always enjoy reading both. Keep it coming American !! Canadians need a good shake up.
“we produce almost nothing except cheap goods for US that can be made elsewhere. “
You lose a lot of credibility when you make statements such as the above. Canada has a plethora of high-value exports which have contributed to a long-term trade surplus. Yes, there’s some cyclicality, so the numbers don’t look so good at this precise moment, but on average, Canada has a nicely positive trade balance which has been accretive to the Canadian standard of living.
Much of this vibrance has been reflected in the housing market over the past decade, but as past experiences show us, housing market vibrance eventually gives way to stock market vibrance as there is significant inverse correlation between Canada’s housing market and its (TSE/TSX) stock market.
In theory Garth is right.. In reality the charts are useless… GDP is down, oil is down, Alberta is loosing good paying jobs but house price in Edmonton is up:)
Buy now or AB prices will be like in Vancouver in 3 years… $15/h means even higher prices…. I told you….
inflation is rampant in the price of food. anyone who shops knows this. unless of course, you eat garbage out of a dumpster.
the price of chicken has not come down
the price of beef has not come down
the price of pork has not come down
the price of lamb has not come down
the price of fish has not come down
the price of cheese has skyrocketed
the price of nuts has skyrocketed
nothing has come down in price.
Blame it on cheap rates, greedy bankers or CMHC – but at the end of the day, this is what people have done to their own personal balance sheets.
____________________________________________
blame the addict or the drug dealer?
the bank of canada and the government have told people to purchase homes, given 30-35-40 year mortgages, no money down, rates at 2-3%
and you blame people for taking on this debt?
What’s to say the same thing that happened in Vancouver won’t happen in Toronto? The prices are already over $1M. Who says it won’t catch up and stay at $1.5 like in Vancouver. I don’t see a melt or correction in the cards for another 10+ years until the boomer retire. Until then it looks like the renters are SOL. I don’t see houses dropping 50% in value, which is what it’d take for prices to get to when you started preaching.
Let’s be honest. Mark is a talking head who has an opinionated and unsubstantiated answer for everything. In my experience there is no such person that exists. Any thoughts from The Anerican would be appreciated. Give it to him and give it to him hard!
#64, #148
The two of you can solve the problems with education and teachers. Let’s get rid of public education, fire the teachers and hire student advisers (at a fraction of teacher salary) to check up on students while they use the computer to teach themselves the skills needed to be good and productive citizens in our society. I’m sure parents will be more then happy to assist in the process and become the “teacher” their old teachers never were.
#153 Karma
Nope, not at all. Rents are much higher in many places around the world, even in Canada. In no way do rents in Vancouver justify prices. Any rental price index will show rents in Vancouver pacing or even trailing inflation. My own personal situation is that my rent hasn’t gone up in over 5 years, in fact I presented and received a DEcrease a couple years ago.
In Hong Kong, for example, rents are about double. At those rents (and generally high incomes of people who rent nice apartments), the high prices there suddenly make much more sense.
On the topic of how much more responsible a conservative government is, well, how can you explain how an Alberta conservative government having 20+ years of oil boom not being able to put a dime in the bank for those rainy days? Not enough infrastructure, health funding, etc to meet the NEEDS of all its citizens when the rainy day arrived?
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Clearest paragraph today..Well said.
I don’t disagree with the idea of beefing up CPP by having people pay in more. Frankly, this should have been done 40 years ago, when the huge baby boomer generation was young, frisky & earning their way. CPP is a defined benefit pension plan, portable to any employer in Canada. Unless you do the cash under the table thing, you pay into CPP.
&&&&&&&@@
Is the CPP a defined pension plan? You would appear to agree with Mr. Dodge when he objected to calling the CPP premiums a tax.
However legally I suspect it’s a tax. The courts in the U.S. I believe have ruled it a tax, and therefore you cannot sue for breach of contract.
Your friendly local Federal government can walk away, change the terms, make you pay more, give you less. Does anyone believe the actuarial terms are ones that all workers would agree to if presented with a choice? Do you think for a moment a private pension plan would use the same criteria for payments as the CPP?
Not that I am suggesting you hand over your retirement savings to your employer.
All pension funds should be private and be linked directly to the beneficiary.
I would point out again it was the generations preceding the boomers that were successful rent seekers when it comes to the CPP. They invested little and earned enormous rewards.
Why do canadians blame the politicians – they are not independent in their policy thinking and only follow the party line but they are YOU! Do you want the senate abolished, obviously not but neither do they but they have a good reason for they might be appointed one day to that cushy, irresponsible , undemocratic ‘job” for the rest of their lives and your reason?
Remember, Albertans didn’t vote in the NDP, they voted out the Conservatives. A big difference. Much the same that happened with the so called Orange wave in Quebec in the last federal election.
Recall that Margaret Thatcher once said that socialism ends when the other guy quits paying. If the lefties think that taxing those that make good decisions is the key to rewarding those who fail, they are setting themselves up for a major failure. The key to saving for retirement is starting early, not just before you retire.
I give the NDP in Alberta a year before people are counting the days until the next election.
I think I know why Mark can’t a crack 6 figure salary. He’s not smart. But pretends to be. That’s why.
So what’s the reason you can’t make any $ Mark?
Oh yeah, Toronto SFH prices are rising according to Google. How many more years do you think this can continue?
#124 lee: “Five years under nursing care will eat up a couple of hundred thousand.”
For two people, yes.
My late mother spent the last seven months of her life in a nursing home close by. The staff, especially the TFWs, were terrific. The cost was outrageous (granted I could’ve spent less). The wards where the less fortunate were kept – had something Dickensian about them.
In a conversation with the “head mistress” I asked her what the biggest problem was in the place. She said “Theft”, meaning some of the kids with PoA were robbing their parents and paying for their care with money they really had no right to. I didn’t inquire further about that topic.
A few days before she died I was reading “Rapunzel” to her. Mom: “I zink zat Prints is heffing sex wiz zat Rapunzel.” Oh surely not, Mom. “Ja! He is heffing sex wiz her.” Well whaddayaknow Rapunzel gets pregnant. Mom: “I told you so. You should lissen to your mosser.”
Hey Garth,
A couple of days ago you had said (either directly in your blog or a response to a comment) that Canada is still in for a soft landing. Is something you still believe will happen or do you think there is still the potential for a crash in some or all of the Canadian market(s)?
Great blog, thanks for the insight.
Michael
Nobody knows the resolution of the unrealistic markets in the GTA or Vancouver. The rest of the country is gently deflating, but we should reasonably expect a more consequential event where delusion runs rampant. — Garth
Friends in Richmond Hill, Ontario are selling of there houses, cashing in while the going is good, rents are going up as the rental market is very tight as people are trying to cash out on their rental property and exit this market
#10 When will they raise rates? on 05.31.15 at 12:53 pm
Good point, however that would be far too sensible a solution to the current retail hell. And it will worsen as long as the BOC elephant squats on rates.
Why, raising rates would spread the economic pie more equitably (horrors!) and kick-start the real economy.
But business kicks and screams to government and msm any time raising rates is, well, raised.
In the mean time, our family budget and it’s savings will be respected and protected by renting, sourcing goods “off-grid”, and bargaining for everything. Everything.
I’d wish retail luck, but it would be a waste of breath.
If government wants people to spend more at the retail level, raise the damned rates!
Great post, all the charts reveal the painful medicines required but not administered. Not expecting them to administer any soon.
Continue to enjoy low rates while the show goes on. They are in a catch-22 now where the economy relies on the prop. QE, low rates and debt are the drugs of choice that won’t flat line the monitor. Barring any unforeseen events or circumstances, that is the hand they will continue to play.
#19 Crowdedelevatorfartz on 05.31.15 at 1:43 pm
@#13 North Burnaby
“renters are getting pushed out further to Coquitlam!! Hahahahaha……”
It’s obvious that the future is way dull for realt/a/u/rds when they start getting hissy with savers and the fiscally astute.
The ultimate schadenfreude will be seeing a high percentage of them doing a double-double on the work front at the local coffee shop. Check your change.
“Now they want to elect politicians promising public policy to wipe away their mistakes by taxing others and providing lifelong security.”
Of course they will vote for that, but it wont work because poor people “thinks” that rich people will work harder to compensate for additional taxation.
Rich people, will just give up (retired or move away) and the remaining economy will implode and more people will lose their job .
This is already happening in Québec, nobody wants to invest there because of taxation and regulations unless the business is heavily subsidized
@#161 rampant inflation
“unless of course, you eat garbage out of a dumpster”
++++++++++++++++++++++++++++++++++++
It’s do-able
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&ved=0CCkQFjAC&url=http%3A%2F%2Fwww.cbc.ca%2Fnews%2Fbusiness%2Ffood-waste-costs-canada-31b-a-year-report-says-1.2869708&ei=3E9sVZCpAY_YoATZ84OYAg&usg=AFQjCNH-pMppfXbJiUyrK37IVEnbpFVBzg&bvm=bv.94455598,d.cGU
and ya might save a few cows in the process…….
@#176 max
“The ultimate schadenfreude will be seeing a high percentage of them doing a double-double on the work front at the local coffee shop. Check your change…..”
++++++++++++++++++++++++++++++++++++
Good one.
However, Starbucks is no longer the #1 retail industry in Lotusland. Apparently there are more marijuana dispenseries than Starbucks in Van.
Good advice though…..I’ll pay with debit.
http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=9&cad=rja&uact=8&ved=0CFkQFjAI&url=http%3A%2F%2Fcalling1out.com%2F2015%2F03%2F15%2Fvancouvers-war-on-drugs-is-over%2F&ei=AVFsVf3OAdXhoATjzoG4Dw&usg=AFQjCNFcAffVZM81cSQwwuSwhAs7o_KMBQ&bvm=bv.94455598,d.cGU
I’m surprised that nobody did a correction on the Corvette factory info. on yesterday’s post. GM is spending $439Mil on just a new “paint shop” for the Corvette, not a whole new factory. Don’t get it though, my 14yr-old ‘vette (just sold), had absolutely flawless paint. How can they improve on it?
Eaga Beava
What about the War of 1812?…. and then you got your butts handed back to you…..better to say nothing and be thought a fool than to open yer yap and remove all doubt!
*********************************************
Dipshit! Take your own advice! That war was over 200 years ago. Why are you bringing that up in this way? You resemble a fool. The American is correct in his as response to you; America is our greatest partner and we need to remember who will back us up because it will not be our military when things get very tough.
April
So I’m not the only one who always enjoys reading the American. I agree fully with your analysis. “Garth’s wisdom and the American’s directness. I always enjoy reading both. Keep it coming American !! Canadians need a good shake up.
*********************************************
April we love The American in our home to. I’m a guy. Only because I can remain anonymous I can say I secretly have a huge man crush on him. I imagine he is a right sexy specimen, late 40s early 50s, silver fox. Reading his thoughts sometimes makes me emotional. I shake my head that anyone has the guts to be so direct with a roomful of angry Canadians and tell us where and why Canada is headed the way it is. He is totally spot on. I start my morning scanning the comments for his thoughts and read all of them. After that I go wake up the wife and kiddies and kiss them all good morning. Yes it’s like that.
Six chilling charts that prefigure the 60 cent loonie.
Blah blah blah, house prices in GTA will be up 10-12% by this time next year….draw all the charts you want, with CMHC driving this bus there is only one way to go!
#142 The American on 05.31.15 at 10:01 pm
Eaga Beava, Canada wasn’t even a country then. So, perhaps you should reconsider Canada was fighting on behalf of the British as a colony. The U.S. never lifted a finger on Canada as a nation. Remember this. So, perhaps you should consider being EDUCATED first before spewing more propaganda you’ve been fed since you were 3 days old
________________________________________
Yes technically “The American” is correct, Canada was still a British Colony. The war of 1812 was a wash as for winners or losers. Nothing was gained and quite a lot was lost. When I was a teenager growing up in California we were taught that Canada, not Great Briton lost the war of 1812 which was incorrect for two reasons. Canada was not officially a country until 1867 and as I later learned in more detail in university the whole war was mostly due to the British and their blockade of US merchant ships and The U.S. went to war over British maritime policies which restricted U.S. trade with countries under the dominion of Napoleon, and the British practice of impressing American merchant seamen into the Royal Navy. Canada was the means to achieve concessions on the maritime issues as the US could only hope to win a war on land being the that their navy was one tenth that of Great Briton.
The peace treaty of Ghent, which ended the war, largely returned the status quo. However, in Canada, the war contributed to a growing sense of national identity. The real losers were the native peoples living east of the Mississippi River. They were pushed off their lands, driven west of the river and in some cases forced onto reservations.
Interesting factoid for the American.
Canada had an invasion plan for the US on their military books until around the 1930’s. Developed in 1921, it was called “Defense Scheme Number One,” of course it would have relied on the assistance of Great Briton.
The USA had a preclinical plan called War Code Red.
@ #170 Bobby
LOL “taxing those that make good decisions” there hasn’t been a good decision made in Alberta in 40 years. They could be Norway, flush with cash from their oil and set for the future. Instead they are broke. In one year Albertans will start to realize how badly they have been screwed over the last generation.
Oh, you meant “good for industry” decisions? yes, lots of those…
Remeber all those folks making 100k plus a year on the oil fields, they are now part of the 99%.
What Garth was saying and what is true. CHOICES,
Do not buy a brand new 75k truck because you worked for 6 months and make 10k per month, don’t buy a 500k house to match it, don’t buy 25k in The brick furniture on a monthly payment plan…. choices, then you loose your job, rality check, then start to scream TAX THE RICH,LIFE IS NOT FAIR……MOMMMMMMYYY…..
Main problem in our country is we hate on people who succeed.
I believe in fair, but people who have usually have sacrificed, and why hate on people who decide to save and invest?
Some of you blog dawgs want your cake and to have it served to you too, disappointed in you.
Even the USA Today is jumping on the bandwaggon…
“There is a grumbling suspicion among many Vancouverites that wealthy Chinese are responsible for soaring housing costs — the median price of a house here is more than 10 times the median income, less affordable than anywhere in the world but Hong Kong.”
http://www.usatoday.com/story/news/world/2015/05/31/rich-chinese-buy-up-residential-property-in-vancouver/26190745/
“The wealth gap has more to do with bad choices than bad luck. — Garth”
——————————————————————-
Garth, while I have taken your words to heart and continue to (happily) rent despite the hormonal lusting of myself and my wife, I respectfully disagree with this statement.
How did the 1% acquire their fortunes? Usually through prudent investment in a balance of assets; sound advice which you give to everyone every day on this blog. But in order to do this, they need a capital investment. A sum of money to invest and get the ball rolling.
Income from employment has cratered, as you have pointed out many times (not to mention it’s taxed at twice the marginal rate of investment income. Ever think that might have something to do with the middle class plight?), so with less income coming in, the 99% have less income to save or invest.
The 99% soon realize that there is only one asset which can be purchased with debt. Not being in the 1% isn’t the result of making bad choices, it’s the result of having no choices.
“So what’s the reason you can’t make any $ Mark? “
I do just fine, and your comments couldn’t be anything further from the truth. What’s the real reason why you are here trolling?
#94 Smoking Man on 05.31.15 at 7:10 pm
What a grand self destructive life I lead. It brings me so much joy. Mothers pray your kids never grow up with a low boredom tolerance.
Game Theory, I could go with the cooperative strategy and save my job at the tax farm…not that I need it.
Can’t do it.. Even if I wasn’t a zillionaire.
Little duchbag managers in IT, making a complete mess off things, I’ve protected them , lied for them, saved their asses zillions of times. I’m the best in my field, 40 thousand hours of experience. Malcolm Grommel says it only takes 10 thousand for guru status. I’m god at my game.
All my shit running like a Swiss watch at the tax farm.
Now I could if I was a nice guy, warn them what’s coming down the pipe, how it will screw everything up and they will all get fired as a result.
But I’m choosing to say nothing, have my good bye drinks at the duke, then spend the rest of the summer on lake Ontario. Then in the fall, LA, maybe Newport Beach.
My spy’s will give me play by play that will give me metal orgasms, then they will need to hire at least 50 off shore head bobbing wizards to cover me. Which will eat their bonus.
There is only one Smoking Man…
I want to say to them bet accordingly, not this time.
__________________________________________
My first gig after my release from the Air Force I worked for a company in Silicon Valley, back then it was just the Valley. Similar circumstances to yours ran the ship like a clock, then somebody above me says new idea lets try off-shoring our production. I disagreed with him and that was that. Off-shoring back in the early 70’s was a disaster, we couldn’t depend on anything for quality control over seas. I walked across the street to another company where I lasted 2 years until I decided to go it alone. Good idea though take to the high seas for a month to chill out! By the way have someone peruse your CV before sending out. I have corrected your spelling above!
Good luck!
“Why, raising rates would spread the economic pie more equitably (horrors!) and kick-start the real economy.”
And the economic pie isn’t being spread equitably at the moment? Seems to me that savers do just fine — as Garth points out, a balanced portfolio has returned in excess of 7%/annum for the past decade.
Crashing the bond market, and further accelerating the current decline in house prices by raising rates in excess of what is dictated by the economy and market principles for supply and demand of money, is really going to create a lot of equality?? Not!
Further to my previous post towards the guy who insisted the BoC/Fed should raise rates — do you really think its the job of government to be guaranteeing a return on cash when there’s no inflation? Is it really the job of central banks to bail people out when they make the incredibly poor decision to allocate a substantial amount of their portfolio to short-term cash, rather than making long-term investments.
Seems to me that the people who are crying for rate hikes (when nothing in the real economy justifies such) basically want a sort of welfare from the government and the central banks. Or they’re, in many cases, simply too lazy to properly diversify. Why should this behaviour, that of hoarding cash, be rewarded?
“However legally I suspect it’s a tax. The courts in the U.S. I believe have ruled it a tax, and therefore you cannot sue for breach of contract”
Of course its a tax. And for a younger person, CPP’s implied return is apparently only around 5%/annum, while it was much higher for an older person. Some of the early recipients of CPP received implied returns in the double digits on their contributions.
Why should younger people, especially those who have established themselves a private account of investment savings, be forced into CPP? Especially when the young probably have other investments available to them which have much higher ROI’s than a mere 5%? Paying off credit card debt, for instance. Even the equity portion of a down-payment on a house typically has an implied return >5%. As Garth shows us on a regular basis, even during some of the worst market conditions in decades, a mere balanced portfolio has returned in excess of 7% — yet the young are forced, by fiat, into contributing to a scheme which only implies, at best, a ~5% return!
The other problem with CPP is that it is a quintessential example of government picking winners and losers. And sometimes it goes spectacularly wrong, such as the millions (billions) invested in Nortel, RIMM, etc. And more recently, the CPP has been piling into real estate close to the top of a long-term bubble in real estate. The returns on the rest of the portfolio have been good enough to forgive them for many of their sins, but eventually their luck will run out!
“How did the 1% acquire their fortunes?”
In Canada, mostly the result of either working for government, or working in an industry/investing in an industry which is heavily subsidized or protected by government.
This is a problem which needs to be tackled, that of the plethora of government programs which defy market principles and actually actively act to redistribute money from the middle class to a certain chosen few.
Similar deal in the US. Sniff at most 1%’ers income or assets, and there’s heavy government involvement. Government itself is one of the single largest forces against economic opportunity.
If you had ever worked for government you would know how absurd that comment is. Wealthy people got that way overwhelmingly through entrepreneurial activities, inheritance, or writing a free blog. — Garth
#47 a short play by Vlad on 05.31.15 at 3:09 pm
Act One
(phone rings)
“Global Financial how may I help you”
“Hi, It’s Vlad, I like to check the status of my portfolio”
“We’re not aware of any ‘portfolio’”
(click…..dial tone)
The End
——————-
Thanks Vlad for making my morning.
Smoking Man: See how it’s done.
#93 Shawn on 05.31.15 at 7:06 pm
Lemmings
Warren Buffett has noted that while lemmings as a group have a bad reputation, no individual lemming has ever received bad press.
———–
Please stop it.
You’re cracking me up.
#161 rampant inflation
of course there is serious inflation happening.
mark is wrong on this one.
“shrinkflation”.
inflation is diguised (and has been disguised for many decades) through reducing the quality and quantity of goods.
for example, not only is the price of beef higher…but the quality is worse.
meat today is different than meat 5, 10, 20, even 50 years ago.
chemicals, antibiotics, dyes, hormones, etc. have reduced quality of beef…allowing prices to decline…or at least stay flat.
the issue now…is this: the quality of the beef can no longer be significantly reduced.
“shrinkflation” can no longer occur…and, as a result…prices are now increasing.
quality control has hit a wall.
a steak (“organic”) from 50 years ago…cannot be compared to the franken-meat of today.
and, yet, today’s meat is much more expensive.
this is real inflation–and it is all over the place.
Smoking Man = Churchill reincarnate.
Makes all sense now.
Great visual.
#185 -=jwk=- on 06.01.15 at 9:29 am
….draw all the charts you want, with CMHC driving this bus there is only one way to go!
————————————————
Until there isn’t.
Re-read the charts. All 6 of them.
#190 Jeff Kowall
Not being in the 1% isn’t the result of making bad choices, it’s the result of having no choices.
Thank you for a breath of reality.
@B Riding Dirty, post 3188:
Good post, sums it up well. You’re quite right, there is a lot of resentment among Canadians of people who have done well financially. It’s one of those characteristics of Canadians, much more so than with Americans.
Speaking of Americans, here’s something I read in today’s Globe and Mail business section:
What’s holding back home sales in the USA isn’t a lack of demand, he (Brian Johnston of Mattamy Homes) says, but fear among buyers who watched as millions of their friends and neighbours ended up underwater on their mortgages. “There’s a lot of psychology in housing and I don’t think most people understand that” Mr. Johnston said.
Something to think about next time you wonder if prices in Toronto or Vancouver can keep going up and up forever and ever.
#132 Andrew W I wonder if The American will defend his socially backward country’s plantation ways. Just think what our heros are doing to them overseas and out of sight. Bag em and tag em. What beacons.
Taxi drivers protest in Toronto today. Against Uber. Remember when horse and buggy drivers did it?
I use uber 1-2 times each week. Every taxi driver is on his cell phone. Dangerous. Seen many Uturn into honking and near crashing.
Sorry, folks! I’m a busy guy, working in San Francisco today to keep these economies going strong! I don’t have a lot to say. The six charts pretty much sum it up nicely. It isn’t pretty, it is going to get a lot worse before it ever gets better (I anticipate a decade, give or take), and it’s a lot like watching an epic train wreck, but only in slow motion. Most of the passengers on the train are in denial, noses in the air saying, “We’re different!” Meanwhile the conductors of the train (CMHC, CREA, Government, and Canadian Media) do everything to speed up the train to 200 mph on a 60mph track, while asking the passengers if they’d prefer pretzels or peanuts. I will say this… Chart 1 demonstrates what I’ve been saying about the Canadian economy for a year. It’s the screaming shits. Charts 2 and 3 are my favorites. Charts 4,5, and 6 are mere icing on the cake.
#205 The American on 06.01.15 at 11:45 am
——————————————————-
Chart 1: I see 3 blue bars of good growth over the past year, and then a dismal winter. Just like in the US.
Chart 2: Of course household spending is down from the winter of hell, leading to rising inventories.
Chart 3: Business investment has been flat since 2011/2012. Why would it be expected to spike during the winter from hell?
Chart 4: Actually yes, housing prices do always go up over the long term (unless you live in Detroit). And, Canadians earn more than Americans, thus underlying some of the higher real estate prices here.
Chart 5: Ok yes, our debt is quite high, I will give you that one.
Chart 6: house price to income ratio…should probably be a horizontal line in a perfect world, but wages aren’t rising, and other forces such as low interest rates and easy lending have lead to the ramp like line.
At #204: Turner Nation, that’s rich. You mean plantation ways like these Canadian atrocities. Careful again… One finger pointing South while three pointing right back at you. The U.S. is not without fault. Neither is Canada. By the way, Canada housed several Nazi war criminals, one dying just days ago. Funny how your media reports nothing of value to your own nation, but only to the U.S.
As for your use of Uber, how is that American International company and concept treating you up there in Toronto on your 1-2 times a week you patron it. Thank you for your patronage!
http://www.washingtonpost.com/world/europe/vladimir-katriuk-alleged-nazi-war-criminal-dies-in-canada-at-93/2015/05/31/7a1b18ea-06de-11e5-bc72-f3e16bf50bb6_story.html
http://www.globalresearch.ca/canadas-devolution-from-peace-seeker-to-war-crimes/5452759
http://canadiangenocide.nativeweb.org/intro2.html
http://www.ammsa.com/publications/windspeaker/govt-canada-apologize-100-years-atrocities
http://en.wikipedia.org/wiki/Allied_war_crimes_during_World_War_II
http://en.wikipedia.org/wiki/Uber_(company)
The charts are scary and paint a grim picture of our future economy. Can’t say the rest of the developed world looks much better. And now, with the rise of the Precariat Labour Force, you can count on flat and declining wages. Governments will be under severe pressure from populations who will feel cheated and sold out to “big business” everywhere. Note the events in Greece.
Good luck with that 7%.
So typical isn’t it? During good times most people want right wing governments that preach the idea of less government intervention into their lives. Leave us alone and let us mind our own business. As soon as the cracks in the system appear, brought on by bad choices we’ve made we want more left leaning governments to come to the rescue and bail us out! The more things change, the more they stay the same.
@The American, post #205:
Good post, sums it up quite well. It’s like watching the Lac Magentic, QC train accident in slow motion.
I am afraid this blog is turning into bashing Canada. Are we that bad that we have no pride in the country? People make anything good or bad not the piece of land named Canada. I hope we can talk less and show more respect for each other, after we are not on highway 401 where rudeness shows everywhere. Maybe because that is all we have …
Whos bashing the fact is real estate in canada is grossly yes grossly overpriced. we are a laughing stock to the world there is more than enough land to make it affordable for everyone. people are paying over a million for a mouldy semi dump that in any sane place wouldnt sell for 10 to 20 thousand because of the dump it is. we got CASL the law the screws all business owners that no one talks about so that Canadian business owners are afraid to even attempt to do business in canada. I think there is either huge money laundering or something going on because a lot of the purchases just do not make sense. like the orchard I mentioned by the garbage dump 24 acres for 3.2 million SERIOUSLY??? you couldn’t live there and when will those grapes pay off… Not in lifetimes!!!
An awesome post and the stat.
Thank you Garth
#170 Bobby on 06.01.15 at 3:57 am
Remember, Albertans didn’t vote in the NDP, they voted out the Conservatives. A big difference. Much the same that happened with the so called Orange wave in Quebec in the last federal election.
Recall that Margaret Thatcher once said that socialism ends when the other guy quits paying. If the lefties think that taxing those that make good decisions is the key to rewarding those who fail, they are setting themselves up for a major failure. The key to saving for retirement is starting early, not just before you retire.
I give the NDP in Alberta a year before people are counting the days until the next election.
…….
Spoken like a die hard PC….or maybe even, Wildrose supporter! Try to enjoy the ride to respectability.
210
About Canada bashing.
You gotta bash somebody or something, but our gracious host won’t allow it.
So good old Canada is left holding the bag.
Where have I bashed my country? Ever? — Garth
#213 Lorne on 06.01.15 at 12:42 pm
#170 Bobby on 06.01.15 at 3:57 am
Remember, Albertans didn’t vote in the NDP, they voted out the Conservatives. A big difference. Much the same that happened with the so called Orange wave in Quebec in the last federal election.
Recall that Margaret Thatcher once said that socialism ends when the other guy quits paying. If the lefties think that taxing those that make good decisions is the key to rewarding those who fail, they are setting themselves up for a major failure. The key to saving for retirement is starting early, not just before you retire.
I give the NDP in Alberta a year before people are counting the days until the next election.
…….
Spoken like a die hard PC….or maybe even, Wildrose supporter! Try to enjoy the ride to respectability.
————————————————–
The PC’s squandered billions to be sure with cronyism, but the dippers are gonna drive a stake through what’s left. Red ink til the end of time on the way.
The ‘have nots’ have very good reason to blame the 1%…
“The reality is that many societies today, including the prosperous ones like Australia and Canada, face greater social inequality as the shift to a “hire and fire culture” of temporary workers lowers the chances of those toiling on low wages to move up the economic ladder.
The situation is likely worse than we think. For the “quality” of Canadian employment — meaning less job security and fewer benefits — is currently at a 25-year low, 10 per cent below what it was in the 1990s, according to the latest CIBC work quality index.”
http://www.cbc.ca/news/world/rise-of-the-precariat-the-global-scourge-of-precarious-jobs-1.3093319
Chew on that for a while…
Hi Garth, Looks like it’s time for smart prudent guys like you who have saved a few loonies (and US dollars) to start getting out of Dodge! A move to Belize or Florida might be in order before the commies finish taking over Canada! Just down own real estate anywhere – you never know when you might have to move again!!
In Canada, mostly the result of either working for government, or working in an industry/investing in an industry which is heavily subsidized or protected by government.
Are you purposefully stupid?
I do just fine, and your comments couldn’t be anything further from the truth.
It can’t be that fine if you’re envious of the salary of 28 year olds. Lol
What about the War of 1812?…. and then you got your butts handed back to you…..better to say nothing and be thought a fool than to open yer yap and remove all doubt!
Seriously? That’s your rebuttal?
That’s pathetic.
So now we add that Mark is wrong about interest rates (BoC didn’t cut) and how the 1% got their wealth.
This can go into the pile of wrong comments including (but not limited to) gold, gold miners, USD/CAD, deflation, Toronto real estate prices, how banking and insurance works. Anything else?
Bottoms_Up
And, Canadians earn more than Americans, thus underlying some of the higher real estate prices here.
——————————————————————–
Not really. I have lived and worked in both countries and I have heard this repeated to me for years. It simply is not true. Canadians earn more than Americans in some fields. By and large Americans earn more than Canadians especially in tech, medical, biotech, services industries, banking, and research. They do not earn as much in manufacturing jobs but this is no longer a core focus of their economy. Still many of these manufacturing roles have returned to the US in the last three years.
We all remember the headlines when we were called “richer” than our American neighbours. We all cheered we had beat the Americans. This is rubbish if we were to be honest. Canadians were only dubbed “richer” because of the equity in our real estate which we should all know by now is not real. That equity will erode quickly in the not to distant future.
I live in Kits and all of my friends who have purchased homes in the last five years are living on the edge. Real estate is still their favorite thing to talk about. They cannot afford to furnish their million dollar plus homes with surroundings that would befit such a price on these properties. When I visit my American friends they have homes that are a lot more luxurious and luxuriously furnished than here. I prefer watching the games on their state of the art 70″ televisions, plush seating, and theatre rooms. They actually can afford to furnish their bedrooms, kitchens, living rooms and dining. Americans also do not hold nearly the household debt we hold.
If you calculate American salaries now across all industries compared to Canadian salaries Americans earn more in nearly every category. Then if you adjust the USD to the CAD it paints a clearer portrait. They leave us in the dust including disposable income. $1 US Dollar now buys $1.26 Canadian dollars. It is frightening. Where are the headlines professing we are no longer richer? I hear crickets chirping.
Disposable income is necessary to live a quality life and to afford upkeep on these needlessly expensive homes. Maybe The American has a point that our media reports mostly what only makes us feel better about ourselves. I agree with him.
The American that’s right there’s no defense. Now put your right hand on your heart and swear allegiance. Our glorious way of life.
Change is in the air. Nothing lasts forever. Check out the 2nd paragraph for the latest social faux pas.
http://driving.ca/auto-news/news/from-truck-nuts-to-rolling-coal-these-bad-boy-offences-must-stop
@Dup, post #210:
I don’t ever recall bashing Canada, in fact I still believe I won the lottery by being born here. What we’re saying here is that due to extremely cheap interest rates, greedy bankers, the CMHC, bad decisions of many people buying more house than they can afford, as well as external factors (beyond our control) like lower commodity prices, Canada is in for troubled times ahead. Those who see it coming will manage to endure it without too much hardship, some may even take advantage of any opportunities that arise and gain from it all. Those who don’t see it coming will get burned. Does anyone here remember what happened in The States in the last decade?
#205 The American,
you didn’t catch Garth’s drift: the train wreck is the fault of the passengers!
# 163 Skeptical
“Who says it won’t catch up and stay at $1.5 like in Vancouver. I don’t see a melt or correction in the cards for another 10+ years until the boomer retire.”
If it’s all about the boomers retiring, then this wouldn’t have happened:
In 2008-09 prices in Vancouver fell at a rate of 14.2% PER YEAR (for 10 months) until EMERGENCY interest rates were brought in.
. . . . . Vancouver House Prices. . . . . .
. Percent Below July 2008 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 1%. . . . . . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 3%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . *. . . . . . . . . . . .
– 7%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
– 9%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . * . . .
—————————————————————-
. . . . . .July. . . . December. . . . May. . .
. . . . . 2008. . . . . 2008 . . . . . 2009. . .
(source: Teranet’s index)
Prices in Vancouver would have continued to fall in 2009 if rates hadn’t been suddenly slashed from near-normal levels to emergency levels.
The same can be said about Edmonton, Victoria and Calgary.
From 2007 to early 2009, SFH prices in Edmonton fell at a rate of 12.4% PER YEAR (for 21 months) until emergency rates were brought in.
. Edmonton Single Family Home Prices. .
. Percent Below May 2007 Price Level . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
. .0%. . .*. . . . . . . . . . . . . . . . . . . .
– 2%. . . . . . . . . . . . . . . . . . . . . . . .
– 4%. . . . . . . . . . . . . . . . . . . . . . . .
– 6%. . . . . . . . . . . . . . . . . . . . . . . .
– 8%. . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . .
-12%. . . . . . . . . . *. . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . .
-16%. . . . . . . . . . . . . . . . . . . . . . . .
-18%. . . . . . . . . . . . . . . . . . . . . . . .
-20%. . . . . . . . . . . . . . . . . . . . . . . .
-22%. . . . . . . . . . . . . . . . . . . . .*. . .
—————————————————————-
. . . . . May. . . . February. . . . February.
. . . . .2007. . . . . 2008 . . . . . . .2009. .
(source: a Calgary realtor‘s site)
#79 PM on 05.31.15 at 5:48 pm
So I make 6 figures, live in Vancouver. I’m not interested in buying an 800 sq ft condo and being a slave to it but doing nothing except saving $2K+/month is kinda boring. I should be living a little. Would it be stupid to take advantage of interest rates and buy a new car? Nothing crazy, maybe 30K, just better than my economy subcompact I bought a few years back?
Am I being foolish or is it okay to take on debt once in awhile even for a depreciating asset that puts a smile on your face.
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Not foolish at all to my mind.
You have to enjoy something and I think that it’s the proportion of debt to assets that counts.
We bought an RV recently, had to finance part of it. But we are renting, the rate was not bad and I still have more liquid assets than the debt and they return more than the interest rate on the debt.
Sitting at home counting your coins ala Scrooge McDuck is not good for the mental health.
The American that’s right there’s no defense. Now put your right hand on your heart and swear allegiance. Our glorious way of life.
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TurnerNation, that was childish and without thought. You must be upset to be shown we behave just the same. You are an embarrassment.
I have no problem profiting from stupidity,greed.
They’re coming to get us!. Lol duck and cover Little People must believe the t-t-terrorists are coming!
Do as I say not as I do.
http://www.nbcnews.com/id/7119752/ns/nbc_nightly_news_with_brian_williams-nbc_news_investigates/t/halliburton-operates-iran-despite-sanctions/
http://www.theguardian.com/world/2007/feb/08/usa.iraq1
How the US sent $12bn in cash to Iraq. And watched it vanish
Matt in Van you are with us or against us? I know all the sayings drummed into us. No brain required.
America ?
Who else would you want for a neighbour ? Russia
I can am amazed at the bashing that goes on we have a tenth of their population and no military in comparison.
We have lots of water, minerals, timber, with out them we would be a road Apple .
“The wealth gap has more to do with bad choices than bad luck. — Garth”
&&&&&
The wealth gap has more to do with govt…….
Not bad government since that is redundant.
#194 Mark on 06.01.15 at 10:08 am
Further to my previous post towards the guy who insisted the BoC/Fed should raise rates — do you really think its the job of government to be guaranteeing a return on cash when there’s no inflation? Is it really the job of central banks to bail people out when they make the incredibly poor decision to allocate a substantial amount of their portfolio to short-term cash, rather than making long-term investments.
&&&&&&
It’s not , or at least should not be, the job of goats/central banks to set/ influence interest rates to alter the course of the economy.
Holy Crap: The peace treaty of Ghent, which ended the war, largely returned the status quo. However, in Canada, the war contributed to a growing sense of national identity.
I didn’t know that:
http://en.wikipedia.org/wiki/War_of_1812#The_Treaty_of_Ghent
I have the theory that after the American Civil War the British needed to unify Canada to block American expansion. Here is a line from Wikipedia that supports that theory:
Finally, but by no means least significant, were fears of possible U.S. expansion northward in the wake of the end of the United States Civil War.
http://en.wikipedia.org/wiki/Canada_under_British_rule
In reality the differences between the United States and Canada have pretty much disappeared. There is a great convergence between the two.
Drunken trees and carbon bombs.
http://www.theguardian.com/environment/ng-interactive/2015/may/28/carbon-bomb-canada-tar-sands-fort-mckay-town-sold-itself
30 Nagraj on 05.31.15 at 2:21 pm
“(British voters sent Churchill packing after the war.)”
That’s not right. He was re-elected following the war, then pretty narrowly defeated, then only two years following that re-elected once again.
Truck nutz and rolling coal.. carbon flatulence – take that commie lettuce eaters.
http://driving.ca/auto-news/news/from-truck-nuts-to-rolling-coal-these-bad-boy-offences-must-stop
#180 crowdedelevatorfartz on 06.01.15 at 8:34 am
Good one.
However, Starbucks is no longer the #1 retail industry in Lotusland. Apparently there are more marijuana dispenseries than Starbucks in Van.
I can believe that, and handy-dandy for realtards, because a) they’ll need it as the increasingly laborious and competitive years roll by, and b) many of them are probably already smoking up, given the industry’s enormous disconnect with humanity. ;-D
The Ontario retirement pension plan, yikes.
Employee pays 1.9% Ouch.
Employer matches 1.9% Sounds good for the bottom line?
Self employed get hammered with 3.8%. This is a joke, right?
Yup, if you live in Ontario, good times ahead.
http://www.ontario.ca/government/ontario-retirement-pension-plan
trend?
http://financialtransparency.org/issues/country-by-country-reporting/
The Great Rip Off: Interactive Map
We’re mapping the abuse of anonymous company ownership around the world.
https://www.globalwitness.org/archive/anonymous-companies-frequently-asked-questions/
http://greatripoffmap.globalwitness.org/#!/explore/companies
#240 espressobob
“The Ontario retirement pension plan, yikes.
Employee pays 1.9% Ouch.
Employer matches 1.9% Sounds good for the bottom line?
Self employed get hammered with 3.8%. This is a joke, right?
Yup, if you live in Ontario, good times ahead.”
Wow. That is a lot of money for some people, especially if you are living paycheck to paycheck.
The site states it will coincide with the reduction in EI premiums. Are the premiums reducing that much?
It’s not , or at least should not be, the job of goats/central banks to set/ influence interest rates to alter the course of the economy.
Then what do you suggest the role of central banks be? If they aren’t going to be allowed to implement monetary policy, then what does a central bank actually do? If a fixed amount of currency was conjured into existence, and such amounts could never be tweaked through open market operations, the purported role of central banking, and that is, to smooth the economy through periods of inflation or deflation, by attenuating or accelerating monetary growth, simply could not be performed.
What’s the alternative to central banks existing? A thousand different private issuers of currency? Do you think we would have a good economy if we had to worry what the exchange rate between Canadian Tire gift cards, and Lowlaws scrip was at the moment?
I see a lot of people seem to be butt-hurt that interest rates aren’t higher — but in reality, interest rates are already plenty high for the sort of inflation experienced (ie: practically none), and the amount of economic growth actually experienced (ie: none). Historically cash does not offer a real after-tax return of anything greater than zero. A high interest rate environment usually implies a real after tax return on cash actually less than zero.
As for Trollstoy, I got two words for you, “grow up”.
Matt in Van you are with us or against us? I know all the sayings drummed into us. No brain required.
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TurnerNation, I am on the side of reasonability and balance. You are anti-American without considering thatwe behave the exact same way. Some of my best friends are Americans as I’ve lived there three different times in my life. I love Canada but I refuse to accept bashing of our neighbours who look out for us and provide us protection. Many of you will disagree but the US shares the most peaceful relationship with Canada than any other two countries. So the next time you feel like making them out to be insensitive and self righteous assholes you should look in the mirror. Are you insane to think there is another nation who would provide us better protection? We share way more in common than what we don’t have in common.
Americans are great people and contrary to popular belief above the 45 they are incredibly smart and efficient with work ethics that trump ours in general. I find my Canadian brethren to be envious of Americans and it has therefore become a favorite national pastime to bash the US amongst friends and family. It is a pathetic and narcissistic way to behave. It wasn’t this way a decade ago. When did we become so full of ourselves that we honestly believe we are superior? I watch the television constantly push statistics and stupid news stories that show how we may be marginally smarter or marginally richer or marginally ^insert variable here^.
Did you know we pay people in Canada to push Canada positive news and positive feeds to the tops of search engines while eliminating detrimental statistics and news to the back end of these engines? We do and it is a very big business that sells others on false pretenses. This is part of the CBC.
Has anyone stopped to review how we measure these variables against our cousins? We measure very differently and often in ways that would almost assuredly show a more favorable outcome for Canada. I believe this is by design so we feel better about living with less. If we used the same measure of these variables in the way the US reports many of the statistics we would look pretty lousy. Do not tempt me because my field of work involves these statistics.
I stopped buying into the dribble our news outlets constantly bang into our heads when I realized there is a whole other world beyond out there with differing political factors that drive some of the decisions and policies from the US. We hear only half the story and then go about our merry ways buying up overpriced real estate acting as if nothing ever bad will happen here because we are morally superior. That is the hard truth.
The US is our biggest ally and trading partner. We need them a whole lot more than they need us. Our sense of superiority and self importance is quite frightening and worsening by the day. I am pro Canada all the way. I am proud to be Canadian but not so proud to be blinded by the facts that we can learn from those South of the 45.
I am not with you, TurnerNation. I am not against you either. I feel sorry for you. You should enlighten yourself.
#232 Paul
America ?
Who else would you want for a neighbour? They have been a good neighbours, but they are also like that loud obnoxious friend who comes over to your house and does a lot of yelling, cheats to win games, and drinks all your beer while telling you how good they are at everything.
I can am amazed at the bashing that goes on we have a tenth of their population and no military in comparison. Sure they have the most powerful miltary in the world but at what cost? The government can no longer be trusted and the peoples freedoms have been and are being destroyed in the name of patriotism and feedom no less
We have lots of water, minerals, timber, that they are more than happy to take from us without trading fair. Cough cough softwood lumber
Both Canada andthe US have many great qualities, and many not so great qualities. While we bicker over who is better or who did what, the real people in power are setting the stage to show us all who is boss.
Let’s chage that
#194 Mark on 06.01.15 at 10:08 am
…. do you really think its the job of government to be guaranteeing a return on cash when there’s no inflation?
Why should this behaviour, that of hoarding cash, be rewarded?
______________________________
as opposed to the behaviour of deadbeat debtors?
if you are against government guaranteeing high rates for savers, you have to be against government guaranteeing low rates for deadbeat borrowers.
but you obviously are not.
government should be out of the interest rate fixing game, and let the free market determine what rates should be. but of course, government isn’t about free markets. it’s about wealth redistribution.
gagging
http://www.irishtimes.com/opinion/editorial/in-defence-of-parliament-1.2232589
Article 15.13 of the Constitution provides that members of the Oireachtas “shall not, in respect of any utterance in either House, be amenable to any court or any authority other than the House itself.” And its preceding article provides the necessary corollary of that freedom of speech – that proceedings are “privileged” so that they can be reported freely by the media without fear of prosecution.
Such privilege , described by the authoritative Erskine May, the British bible on parliament and the law, as “rights which are absolutely necessary for the due execution of its powers”, has long roots, back to the 1689 Bill of Rights, and is also enshrined in the US Constitution of 1787. It was an essential cornerstone in the establishment of the primacy of parliament.”…
#190 Jeff Kowall
Agreed, thankyou for stating this so clearly. I just invested an early pension payout of 36000, I could barely get the bank’s attention! It’s tough to get things going in the right direction without an initial good sized sum. Not that I won’t try to grow my money anyway, it’s worth a shot right? :)
@237 rational optimist
Churchill was booted in 1945 by Clement Attlee’s Labour Party. People were worn out by the war and the resulting economic deprivation. They wanted change. Among other things Attlee introduced the NHS.
Churchill was returned in 1951 and served until 1955 when he was replaced by Anthony Eden.
“as opposed to the behaviour of deadbeat debtors? “
What deadbeats? Defaults are incredibly low across most types of credit.
if you are against government guaranteeing high rates for savers, you have to be against government guaranteeing low rates for deadbeat borrowers.
Risk premia rises quite rapidly for those borrowers who are perceived by the banking system to have a high risk of defaulting. The government most certainly does not guarantee low risk premia, except for the 60% interest rate limitation in the Criminal Code.
The exception to all of this is the CMHC, which has effectively price fixed risk premia on residential RE loans. I’ve probably written hundreds of posts arguing for its abolition, so I’d have to agree with you there. However, this is an issue separate from the necessity of the BoC setting policy rates low on account of the very poor economy.
@#183 Black sheep
“I’m a guy. Only because I can remain anonymous I can say I secretly have a huge man crush on him. I imagine he is a right sexy specimen, late 40s early 50s, silver fox. Reading his thoughts sometimes makes me emotional…….”
++++++++++++++++++++++++++++++++++++
Dude.
Do you need some “alone time” to calm down after reading The American?
#250 Mark on 06.01.15 at 5:54 pm
What deadbeats? Defaults are incredibly low across most types of credit.
_____________________________________________
oh.. i don’t know….. Lehman? AIG? CITI? Fannie and Freddie? a couple of hundred other financial institutions that failed, and that now we have to subsidize the remainder with low rates…
The RE Market in the GTA is better than what it was in the late 80’s; People are now making 2 to 3 times their salary by just buying and selling homes!
@ Squirrel meat, post #238:
So that’s what rolling coal means, I wondered about that. In so doing, you not only burn more fuel but also gum up your engine with carbon, which will reduce its life as well as contaminate the oil more quickly. All of the above ends up costing you, the owner, more money. I try to keep my car running at peak efficiency to keep my costs down, being a poor single guy with only one source of income. Wow, it must be nice to have so much money you don’t know what to do with it all!