Lost together

SNOW DOG modified

Since this week I’ve managed to irritate parents, Millennials, Boomers, Albertans, doomers, hipsters and lefties, what’s left? Of course. Vancouver.

Angus Reid just did a poll asking citizens of Delusia to catalogue the reasons why real estate in YVR has soared past the point of rationality. Here are the results (which will come as no surprise to addicts of this pathetic blog):

  • Chinese dudes (aka ‘foreign investors’): 64
  • Rich people (from wherever): 44
  • Everybody wants to live here: 38
  • People who don’t live in houses they buy here: 35
  • Cheap money: 21%

In other words, far down the list is any cause that might actually be attached to the people who live in the city and do almost all of the house-buying. As mentioned here before, BCers are alone in Canada in having a negative savings rate (that means they spend more than they earn), the biggest mortgages and the highest real estate prices. But hey, coincidences happen. We’re just victims here!

This also flies in the face of expert industry opinion, as maligned as that might be by the #DontHave1Million crowd. The BC Real Estate Association has taken up a courageous stand opposed to what most Van realtors want people to believe, saying there’s zippo evidence foreigners account for any more than 5% of all deals. Of course, they get 100% of the media, so go figure. This is somewhat supported by verifiable stats from across the ditch in Victoria, where 1.6% of buyers are aliens. Yeah, I know, Victoria ain’t Vancouver. But data is data.

Well, odds are a lot of Van folks will learn the difference between media reality and the real thing if Janet Yellen gets her way. Which, for sure, she will. The world’s most powerful woman gave more hints this week at what the next years will be delivering. Even though YVRers put 80% of the blame on others for what’s happened to their homes, they will have her to thank for a likely trip back down.

Mrs. Yellen heads the Fed, the only central bank in the world that really matters. Eight years ago it cratered interest rates to deal with a credit crisis, and the world followed. Now the reversal is about to begin. While this blog teems with macroeconomists who say rates can never rise and economic growth anywhere is a sham, she doesn’t come here. So save it. And put your house in order since once the cost of money escalates a little, it will end up escalating a lot.

US rates will rise in order to reduce monetary stimulus which has added to corporate and personal debt, pumped some asset classes and could bring unwanted inflationary pressures. The first shoe to hit the floor was the tapering away of stimulus spending last autumn (which the geniuses on this site said would never happen), as the Fed ended its monthly bond-buying program. Starting to restore rates to more normal levels is the second shoe. It drops this autumn.

As the post yesterday showed, this is a good thing. Normalization of rates simply means enough economic growth – jobs, investment, spending, production – has been restored to properly price money. In case you hadn’t realized it, borrowing fat mortgages for five years at 2.5% is not normal, just as it is bizarre to earn 1.7% on a GIC or a negative return (after inflation) on your bank account. This is the residue of emergency interest rates brought in after the 2009 collapse, and the legacy they’ll leave in Canada is more debt than anyone could have imagined was possible.

Well, the Fed’s key policy committee met this week and did not raise rates (as expected). But Mrs. Yellin telegraphed again that we should all get ready. She said this: “The importance of the timing of the first decision to raise rates is something that should not be overblown, whether it is September or December or March. What matters is the entire path of rates.”

What does that mean?

She also made that clear in describing what she and her colleagues were planning: “The median projection for the federal funds rate continues to point to a first increase later this year, with the rate rising to about 1¾ percent in late 2016 and 2¾ percent in late 2017.”

The Fed funds rate is now 0.12%, so this means interest rates will be about 1.5% higher by the end of next year and another 1% higher the next. And to make it even clearer, she added this, “of course there’s a lot of uncertainty — but they’re projecting increases that average around 100 basis points per year.”

There ya go. This should be your base expectation – that the rate environment we’re heading into will turn 2.5% five-year mortgages into something closer to 5% by the time you come up for renewal. On a weensy $400,000 YVR condo loan that will turn the monthly from $1,791 to $2,326, an increase of 30%.

No big deal for you, maybe, but recall the Manulife Bank survey I shared with you earlier this week? It found a third of all homeowners would be in financial difficulty if their payment went up 10%, while 15% said they couldn’t handle any increase at all. Note that this has nothing to do with the ability to buy real estate – just to hang on.

Now do you see why even a well-advanced, gradual, methodical and gentle hiking of rates is so consequential? For those who are expecting rates will never change, this is a shock or no small magnitude. Janet Yellen and GreaterFool have given you at least a year to deal with it, to understand that cheap debt made stuff go up, and costlier debt will make it go down.

You still want to dump on the Chinese guy? Knock yourself out.

218 comments ↓

#1 Squirrel meat on 06.19.15 at 6:23 pm

You really really like animals.

#2 Ozu Yasujiro on 06.19.15 at 6:24 pm

Just bought a house, Yeah

#3 Brian Ripley on 06.19.15 at 6:28 pm

I created a new chart this week to see if I could understand the last 7+ years of monetary policy with respect to Canadian household debt which we all know is at record levels nationally and is the subject of lots of observations made by institutions other than our own, eg: the IMF etal.

The chart shows Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade:

http://www.chpc.biz/household-debt.html

Clearly the post 2008 credit crash period and our monetary policy coming out of it has led not only to a furious bid in real estate assets with all its consequences of draining disposable income but the gap between mortgage debt and other household debt remains high and wide relative to precrash times.

The other features of the chart show that in the decade before the crash as the commodity boom began to peak, our Foreign Direct Investment account flipped poles so that more Canadian capital was being invested offshore than offshore capital was being invested in Canada. Coming out of the March 2009 Pit of Gloom with monetary policy firmly presiding over state suppression of market interest rates, the shift in polarity in the FDI needs no reason to flip back to the 1980’s and ’90’s when more offshore investment capital came into Canada than capital leaving Canada.

Cheap Capital is in search of cheap productive Labour in an effort to realize a better return on investment from exploiting the price mismatch. Clearly this is working as our deeply negative Balance of Trade data suggest; we buy more than we sell, hence we supply net income to entities outside our “borders” financed and subsidized by our own cheap credit and our willingness to hock the future.

#4 GH on 06.19.15 at 6:28 pm

Opinion: Call this what it is: tax evasion

http://www.vancouversun.com/news/Opinion+Call+this+what+evasion/11141340/story.html

#5 ILoveCharts on 06.19.15 at 6:32 pm

We have beaches and mountains though.

#6 Nemesis on 06.19.15 at 6:43 pm

#Well,SinceYouPutItThatWay…

http://youtu.be/lKevSXL_104

#7 Godth on 06.19.15 at 6:46 pm

I think we should make Canada a formerly known as and turn it completely over to Multinational Corporations. Let’s make this land mass formerly known as Canada Ayn Rands wet dream. Get rid of Government at every level and privatize everything; from schools to hospitals to roads, absolutely everything is up for sale. Let’s do this Utopia, the corporations make all the laws, they are the owners and governors wherever they inhabit.

The first thing I would do is go and murder every big dog in my neighborhood and put a puppet in charge of my newly aquired property. Once I had my fiefdom operational, providing all sorts of essential services of course – and winning over the local population, I would conscript an army. My next objective would be to take over whatever productive assets that were immediately available, whoever previously owned them is irrelevant. I’m making the laws now. I would grow my fiefdom into a kingdom. Once that was established I would form a corporation, obviously registered in a foreign state as the state is obsolete here. Then I would go international obviously. Of course I would choose the state that was most amenable to my needs.

At some point I would have turned on my own supporters to be competitive. Child labour, no problem. Environmental controls, no problem, etc. I would suck every last ounce of energy from these peons to make myself bigger. It’s just the nature of the game, if you’re too stupid to get it – get to work bitch!

#8 dennis medeiros on 06.19.15 at 6:52 pm

http://i.giphy.com/Tx4LgFnJMorYI.gif
this is serious talent!

#9 Retired Boomer - WI on 06.19.15 at 6:57 pm

Mr. Turner-

I DO hope you, and Janet Yellin are absolutely correct in your ‘forecasting.’ Higher rates would allow 20% of my portfolio to seek a longer term with a rate of return worth getting.

Do Io believe it will come to pass? Not actually. Sure, rates might go up 25 basis points…maybe another 25 later
on but, consider the world factors here.

China is burping, Greece is about to default, unless the EU does more “extend & pretend.” Last but not least, the US has the most incompetent elected officials running things currently, with the possible exception of our northern neighbors.

Our debt is high, and not shrinking!

While a return to ‘normal’ lending rates would be welcome to a saver & investor as myself, I would doubt the great indebted could -would- adjust easily to rising rates.

Many a 30 year old have NEVER seen a rising rate environment in their short lives.

A change would be a HOOT! Can people handle it??

#10 Johnny d on 06.19.15 at 6:58 pm

What will happen to corporate bonds in all this? Will we see as large of a selloff as what will happen with government bonds?

#11 Goldie on 06.19.15 at 7:04 pm

What more can be said about HAM in these comments that hasn’t already been said? People from outside Van will continue to deny its existence, people inside will continue to accept its reality.

#12 8102 on 06.19.15 at 7:05 pm

I for one have taken your advice Mr. Turner.

#13 prairie person on 06.19.15 at 7:14 pm

Many decades ago, I was one of the first people in Canada to own a Great Pyrenees. Wonderful dogs. As gentle as they are large. My kids were around the age of the little girl in the picture. They crawled all over him, rode on him, over him.

#14 NoName on 06.19.15 at 7:14 pm

this is a best essay that I red so far this year !!

THE BAD NEWS ABOUT THE NEWS

http://www.brookings.edu/research/essays/2014/bad-news

And this;
How To Tell Stories With Data.

https://youtu.be/JBOCyfR0MR0

#15 earthboundmisfit on 06.19.15 at 7:21 pm

@#5 ILove Charts
Neither of which you can eat, drink or smoke so WTF!
And then there’s the entire province enveloped in a union mentality. And R-A-I-N. Did it for a few years. Never did see the sunshine. Pass thanks.

#16 GH on 06.19.15 at 7:23 pm

Updated chart of the total credit market debt in the United States versus its gross domestic product over the last 40 years:

https://research.stlouisfed.org/fred2/graph/?g=1iv4

#17 mitzerboy aka queencity kid on 06.19.15 at 7:25 pm

itz still git er done thinkin out here …

on ruff ryderz

#18 Macrath on 06.19.15 at 7:27 pm

Bond funds worldwide post biggest outflows in two years: BofA

http://tinyurl.com/pn33scw

#19 JSS on 06.19.15 at 7:28 pm

Bonds have been rising in price for the last 30 years. It’s’ now coming to an end. Lower bond prices, higher mortgage rates, higher GIC and bond yields, higher yields for REITs, pref shares, lower house prices, lower pricing for income properties.

Cash was/is/will be king.

#20 zee on 06.19.15 at 7:29 pm

I will believe rates going up when I see it happens….many say this wont happen and if it does its just one hike and done.

#21 David Lee on 06.19.15 at 7:29 pm

The madness continues:

http://www.theglobeandmail.com/life/home-and-garden/real-estate/vancouver-inventory-squeeze-finds-buyers-panicked-sellers-anxious/article25045218/

My motto regarding RE in YVR: “The only winning move is not to play” (i.e. I sold the house in 2011, I invest and I rent: I’m not playing).

#22 Joe2.0 on 06.19.15 at 7:37 pm

Sept Yellen ups rates say .25%
US dollar weakens.
China releases gold holdings.

Stock market reacts with a sell off because
the facade become obvious to almost everyone and continues to decline over the year.

A spooked Yellen says that FED increase on hold “for now”
Big market moves into precious metals.
Ponzi’s up US dollar DOWn

Sept is the beginning of the end for the US markets..

Sorry about your gold, pal. — Garth

#23 HJD on 06.19.15 at 7:39 pm

There ya go. This should be your base expectation – that the rate environment we’re heading into will turn 2.5% five-year mortgages into something closer to 5% by the time you come up for renewal. On a weensy $400,000 YVR condo loan that will turn the monthly from $1,791 to $2,326, an increase of 30%. Garth

So, using your example, these folks will have five years to get ready for a $535 increase in their monthly mortgage payments. I think this magnitude of increase in interest rate, from 2.5% to 5%, will hardly be noticed. Fewer condo may be purchased, but mortgaged owners will not be jumping off their highrise balconies. They’ll just cut back on other expenses and get on with life. The sky will not tumble. Neither will the real estate market – a slight decrease in property values, but that’s all.

When 47% of homeowners say they cannot withstand even a modest increase? Give your head a shake. — Garth

#24 james on 06.19.15 at 7:56 pm

It is the height of intellectual dishonesty to blame foreigners for housing woes. After all, it was not Chinese people who set up 40 year amortizations, an 80 billion dollar subsidy to the banks, down payment loans, CMHC cap increases, cheap credit, etc etc.

Foreign buyers have an impact on the market, but the bulk of purchases are by locals.

My personal take is that governments have an incentive to encourage housing bubbles in the West, because it provides a temporary mask on the fact that jobs are flowing east. Older people (who are more likely to own homes) will feel like their net worth is growing, while at the same time real wages are stagnant if not dropping in relation to the typical expenditures for housholds (e.g., gas, food).

The problem is not Chinese buyers, on the whole.

#25 My Wife Loves Garth on 06.19.15 at 7:58 pm

Just got my renewal notice from TD bank.

5yr variable closed 2.85%
5yr variable open 3.85%

A 1% spread for having a closed mortgage.
The writing is on the wall.

#26 Mark on 06.19.15 at 7:59 pm

Pretty sad comment on society when people are wiling to scapegoat an ethnic group for a situation which is entirely not even of their own creation. Thankfully we don’t have any politicians of significance with enough power to act upon the misguided views of the masses, but it certainly is inviting of the rise of whackjob populists to power.

I’m not so much concerned about ‘the Chinese’ being blamed for the RE bubble’s ascent, disgusting and misguided as it is. The trouble is blaming them for its collapse which is now ongoing. As though one ethnicity is somehow responsible to keep RE prices elevated for the masses.

What will happen to corporate bonds in all this? Will we see as large of a selloff as what will happen with government bonds?

Corporate bonds are an interesting case. In theory, their credit quality is less than government “risk-free” bonds, but corporate bonds of solid issuers have the upside of, in a default, of recourse to the assets of the corporation by way of a debt to equity swap. While if a government defaults, there is a complete loss with no conversion to equity (ie: creditors to government don’t get to seize equity in government assets!!)

In the last episode of a deflationary implosion, ie: the 1930s, government bonds raced higher. But in the era, government was not a significant borrower (national debt was negligible!!), so it was rational that the bond market participants sought out the highest quality bonds possible, bidding government bonds higher on account of their superior credit quality. Corporations and consumers were heavily indebted, so bonds prices fell and rates rose for such borrowers.

This time around, its the corporations which have the highest credit quality. Governments and consumer borrowers the least. So you may very well see corporate bonds of high quality issuers with solid assets, high cash positions, etc. holding up well in the future, as a reflection of their quality. The traditional model in finance of government being the least risky borrower, the quintessential “risk-free” borrower might not stand up in the way that we’ve experienced in the past.

#27 MSM-free Zone on 06.19.15 at 8:00 pm

No worries, middle-class Canadians, in order to make home ownership more ‘affordable’ for you, the Action Plan figurines who currently run Parliament Hill are already primed and lobbied up for your return to 40 year mortgages:

400,000 at 2.5% over 25 years: $1,791/mo
400,000 at 5.0% over 40 years: $1,951/mo
…a monthly payment increase of just 8.9%.

(Kindly ignore our 379.00% increase in total amortization interest cost from $137,000 to $519,000 over the life of your mortgage. After all, it’s really just about the monthly payment, isn’t it?) – CREA

#28 GAV on 06.19.15 at 8:03 pm

You can make it as politically correct as you like Garth. The fact is, the property bubble here in the lower mainland is fueled by money made in Asia, not Canada.
Your warmings about interest rates, oil, bank of mom & dad, blah blah blah is all meaningless.
The people driving this collect properties like you collect blog comments. They couldn’t give a damn what happens economically here.
And it is pointless to cite statistics because there are no indepedent statistics. Learn the phrase “astronaut parents”.
We locals can see what is going on. We don’t need someone fromToronto to tell us.

#29 David Lee on 06.19.15 at 8:09 pm

Conflict of Interest? Angus Reid on Bob Rennie:

In the expanding debate over unaffordability, Reid also finds it “ridiculous” Metro Vancouver’s major condominium marketer, Bob Rennie, is taken so seriously by the media, Vancouver city council and the B.C. Liberals, the latter for whom Rennie functions as chief fundraiser.

“I don’t know Bob Rennie well. But it is pathetic that a major developer (sic) should be driving policy on an issue that’s this important in this community.”

http://www.vancouversun.com/opinion/columnists/Douglas+Todd+Angus+Reid+unchained/11151170/story.html

#30 Godth on 06.19.15 at 8:12 pm

#16 GH on 06.19.15 at 7:23 pm

lol, but car sales are up dude.

#31 Mr T's More Eloquent Cousin on 06.19.15 at 8:12 pm

Heed the advice of the bearded oracle or thoust shall suffer the fate of the greater fool. Thou must pity such a fool; I for one pity the fool who is greater than thee.

#32 Scumop on 06.19.15 at 8:13 pm

Today’s testimonial:

If rates increase it will be more annoying to us than painful (half way paid off). I guess that makes us members of the 53 percenters.

Although I am not in the 6-digit club, I have stuffed a few coins into etfs via a tfsa. I expect to retire by age 80. Would have been “never” a decade ago. Thanks, Garth, for the push to etfs.

Being a mortgage owner is less thrilling every day. The only thing preventing us from renting is 3 cats, a large dog, and around 200 fish which the cats have no interest in eating.

#33 Sheane Wallace on 06.19.15 at 8:14 pm

Sorry about your gold, pal. — Garth

———————–

Why? It does not rust and will make nice ring 1000 years from now.

Much more durable than the glass condos.

#34 Jimmy on 06.19.15 at 8:14 pm

Garth Rocks.

New season of True Detective on Sunday!

Is SM still in Vegas? Update us on the scenery situation.

#35 Hh on 06.19.15 at 8:15 pm

“As expected”. You are too funny.

Rosenberg – lift off March 2016 if at all.

Fed CHOPPED GDP massive this week.

#36 Andrés on 06.19.15 at 8:23 pm

Vancouver can’t sustain a playhouse, a symphony or an opera (the Vancouver Playhouse is dead and the other two are following). Thirty years ago false creek was full of log books and moldering warehouses. It is and will always be an international backwater undeserving of the high cost of living.

#37 waiting on the westcoast on 06.19.15 at 8:24 pm

#23 HJD on 06.19.15 at 7:39 pm
“So, using your example, these folks will have five years to get ready for a $535 increase in their monthly mortgage payments. I think this magnitude of increase in interest rate, from 2.5% to 5%, will hardly be noticed. Fewer condo may be purchased, but mortgaged owners will not be jumping off their highrise balconies. They’ll just cut back on other expenses and get on with life. The sky will not tumble. Neither will the real estate market – a slight decrease in property values, but that’s all.”

Not only does it affect the rates paid by people that renew in 5 years, it lowers price point that new buyers can afford. Downward price pleasure causes speculators to exit and look for other asset classes that will be moving up further eroding prices.

In addition, what about those homeowners that are sitting in $1M+ homes and owe 700-900k… It is further magnified. Products like LOC, 2nd/3rd mortgages, etc, all get more expensive.

As Mark says, this will put significant deflationary pressure on the country. However, i think this will cause a flight from the CDN$. Foreigners don’t invest in deflationary countries, thereby reducing capital flows and a growing interest rate differential will magnify this as capital will seek a higher and equally safe return in the US putting further pressure on us with our largest trading partner. We will raise rates to help preserve the dollar… But it will harm the housing market over time.

#38 Jake Sandinsky on 06.19.15 at 8:30 pm

To #9 Retired boomer WI

Over the last 5 years we have seen GIC and government bond yields fluctuate to between 2.5% to 3.5% to as high 2.5% to 4.75%.

I am talking 2-5 and even -7 year GIC’s, Canada bonds, Canada strip bonds on the lower end to the higher end U.S, provincial bonds, provincial strip bonds.

In looking at the past interest rate cycles, shorter term rates will rise faster than longer term rates.

I would not be surprised of a see saw type movement in rates, yields as the last 5 years. This has happened at least 3 times since 2010.

We still are not as high as 2010 when bond yields were close to 4.00% on the U.S. 10 year and 4.75% to 4.8% on the 30 year U.S. bond long end.

This is if we don’t see some bad, terrible economic financial hit to the U.S. and world economy and then it is down again for rates, yields.

If they can sustain higher rates, bond yields in the Canada, U.S. economy.

A 2.00% Bank of Canada rate and 2.5% U.S Fed rate would be the new normal and bond yields for Canada would be 2.75%, 3.00% is stretching for a 10 year 3.5% to 3.75% for the U.S 10 year.

Longer term 30 year bond yields Canada, U.S, probably 3.75%, 4.25% to 4.5%.

#39 armpit on 06.19.15 at 8:30 pm

I know a young millennial living transplanted from Halifax (sold his house and made a profit) to Vancouver. He has been there for about 8 months. He gets paid to attend University there, and works in his field consulting online. He rents a room near the University.

He just bought a used V.W. van with that he can sleep in (didn’t we call them “shaggin wagons”?) and travel anywhere on the weekends snowboarding.

He has travelled to Calgary, Whistler Mountains, and Seattle.

He likes Vancouver, stating the City is beautiful….but there is something about the people there that are different, compared to Halifax, Calgary and Seattle.

Millennial couldn’t point his finger on why.

Maybe Garth has shaken them up?

#40 Washed Up Lawyer on 06.19.15 at 8:31 pm

“Since this week I’ve managed to irritate parents, Millennials, Boomers, Albertans, doomers, hipsters and lefties, what’s left? Of course. Vancouver.”
**********************************

I am 5 out of 8. You did not irritate me a bit. Loved every word.

#41 Investorz on 06.19.15 at 8:35 pm

“It found a third of all homeowners would be in financial difficulty if their payment went up 10%”

And that’s why Poloz will choose to have the canadian dollar at 70 cents. He’ll keep the overnight lending rate at 0.75%-1.25% for years.

Why not?
It’ll hurt impots but help exporters and create jobs.

It’ll hurt renters like myself, but that’s the way it is. The mass votes, not a the few savers.

#42 Steve French on 06.19.15 at 8:41 pm

DELETED (Anti-Chinese)

#43 sockeye sam on 06.19.15 at 8:45 pm

“But, But, But, the whole thing’s going to crash”, I keep telling her.She says “I’m not selling”. I’ve been telling her the same thing for the last fifteen years. I hate being wrong that much. Over here on the west side of Vancouver It’s like a run away train. In the twenty five years I’ve lived here I’ve never seen this many sold signs and excavaters . Anyone want to get into the demolition business? There’s a fortune to be made. Bring those idle machines in from Alberta.

#44 bigtown on 06.19.15 at 8:49 pm

The Mike Duffy study has cost the government over $23 million to ferret out approximately a questionable sum of less than one million. Why Mike Duffy would leave a media gig paying $250,000 per year for the senate paying less than half of his former media job is bizarre. In Canada it seems money is in oversupply in some corners.

The Toronto Star did an expose on folks making minimum wage last month showing how people hang on in situations that are truly not fair. The first low wage earner was a 60 year old single boomer lady who was an immigrant to Canada and had worked at a furniture manufacturer for over 11 years at the same minimum wage on the night shift. God let us pray for such decent mortals.

The next expose was a single middle aged mother of three who took care of the horses at Woodbine for the past eight years for minimum wage. Each day she gets up before dawn to get to the stables. People in Ontario have very little truck with such great souls and the Mike Duffy’s of the world are beyond any capacity to consider a $15 minimum wage.

#45 Andrew Woburn on 06.19.15 at 8:53 pm

Rosenberg: Get ready for rising U.S. labour demand

“The lags from years of Fed easing always play out this way, it’s just that the timing can vary from cycle to cycle. But the process of events remains the same.

First comes the asset inflation (stocks, real estate).

Then comes the commodity inflation (this came and went already).

Then comes the credit inflation (check out what bank lending is doing).

Then comes the consumer inflation (oh yes, this has started).

And now, as is the case in every cycle, when the deflation/disinflation to reflation to inflation gets entrenched, then comes the wage uptrend. This is in its infancy stage and always is the last part of the pricing cycle to take hold because there is no other market other than labour that responds to reflationary policy measures with such a long lag.”

http://www.theglobeandmail.com/report-on-business/economy/labour-will-be-the-next-sector-to-see-inflation/article25030346/

#46 amazon girl on 06.19.15 at 8:54 pm

GARTH
I KNOW YOU LOVE DOGS ,BUT YOUR SENSITIVE TO CHILDREN ESPECIALLY TO GIRLS, WHICH MAKES ME MELT, CRY AND ROLL OVER ….

#47 TRT on 06.19.15 at 8:54 pm

DELETED (Anti-immigrant)

#48 Smoking Man on 06.19.15 at 8:57 pm

#34 Jimmy on 06.19.15 at 8:14 pm
Garth Rocks.

New season of True Detective on Sunday!

Is SM still in Vegas? Update us on the scenery situation.
……

Scenery crazy with the EDC on this weekend, a beautiful freek show. People are going to die. The asphalt is a 160 degrees, temps 115 , kids with cheap drugs, and dehydration.

Been getting hammered to early and going to bed tovearly to take in the past midnight freeks.

Redbulling and gator aid till 10pm then the drinking. Should have some observations in the am

#49 BS on 06.19.15 at 9:03 pm

I think this magnitude of increase in interest rate, from 2.5% to 5% will hardly be noticed.

It will be noticed in the sale prices of housing. Whether current property owners can hold on after a rate increase is irrelevant. The price of housing is set by what a new buyer is willing and able to pay. Prices go down because first time buyers and move up buyers mortgage payments go up which means they cannot get as big of a mortgage. We will likely also see tightening of lending in general. Then add in the general direction of the market going down instead of up and you lose all the urgency of first time buyers getting in, flippers cannot make money so they disappear and investors can no longer hope for capital gains to offset the lack of rental yield. All the factors that drove the market up, go in reverse along with prices.

#50 Nemesis on 06.19.15 at 9:11 pm

#Meanwhile,BackAt… #RennieMarketingSystems… #Dr.EvilHatches”PreparationH”,Or… #”OnTheWhole”…

http://youtu.be/EOfiXyJjZ-0

#51 Freedom First on 06.19.15 at 9:17 pm

I am not upset, but then again, I have to watch what I say when I am in contact with people in every face to face social setting. I don’t argue with insanity in my own head so why on earth would I want to argue with the insanity coming out of other people’s heads? Live and let live. Enjoy your large mortgage/foreclosure/bankruptcy.

Low interest rates have paid me well, as the higher interest rates will also pay me well, the same way they did in the past.

My view of the world in relation to my finances puts me at the top of the food chain when it comes to living the Freedom First lifestyle I love and enjoy.

Lastly, I think the west coasters must have wet brain from all the rain they put up with. It has distorted their thinking. I have lived through winters in 2 of the eastern provinces, and 2 of the western provinces, but I gotta tell ya, winter in Vancouver, what with the constant rain, combined with the windy days, is hell on earth in the misery index, and easily make it the coldest feeling winter in Canada. I do love the mountains for skiing though.

#52 Dale Weise on 06.19.15 at 9:27 pm

Garth, you’re a plug like me.

#53 ed on 06.19.15 at 9:30 pm

RE #5 ILoveCharts

“We have beaches and mountains though.”

—————
You mean you have gravel pits on sewage lagoons. And don’t forget monsoon rains, mold, slugs, blatant anti-Chinese racism, a population so brain-dead by repeated pot use they can’t tell the difference between asset (investment) and liability (house), grow ups, arrogant self-satisfied metrosexual yuppies…

#54 joe calgary on 06.19.15 at 9:34 pm

Im not saying Chinese guys from Guangdong are driving the YVR housing market higher, Im saying that there are too many Chinese guys in YVR period. We need immigration reform.

Too many people living in Canada who don’t look like you? You’re now banned. — Garth

#55 Bigrider on 06.19.15 at 9:34 pm

I’ wont dump on any Chinese guy but I will dump on you Garth ( with all due respect of course)

Me thinks the upward trajectory of rates will be have a direct, negative correlation to the financial markets in a very immediate way, but not so much with houses, as the love affair Canadians have with them wil have them selling children and organs to keep them.

In addition, as an advisor who promotes financial assets, you have much to fear if said interest rate increases materially affect house prices, as Canadian will redeem what little they have , in order to make mortgage payments.

Heck, I see red light districts in the suburbs as soccer moms sell their bodies for mortgage money…LOL

Financial markets long ago priced in higher rates. Unlike Canadian homeowners. — Garth

#56 Irwin on 06.19.15 at 9:36 pm

Published on 19 Jun 2015

“A look at the still abandoned areas of High River, two years after the June flood.”

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

Watching this, it struck me that had these people been listening to Sir Garth – renting instead of owning, they would have lost possessions but not most of their net worth.

Of course, in order to be able to rent, there has to be someone to rent from. So I dunno.

#57 Has anyone seen this? on 06.19.15 at 9:44 pm

http://craigandterrence.com/our-market-update

#58 Chaddywack on 06.19.15 at 9:45 pm

My downstairs neighbour is a realtor. I heard her out on the patio today talking about entering “bidding wars, with a 2 week close and NO subjects!”

She then stated to her friend “I like made almost $150k last year, that’s like more than a doctor. Glad I didn’t go to med school, how useless would that have been!”

I really don’t know what else to say….. :)

#59 Love my Kia on 06.19.15 at 9:51 pm

Since this week I’ve managed to irritate parents, Millennials, Boomers, Albertans, doomers, hipsters and lefties, what’s left? Of course. Vancouver.
——————————
Yes, but you must have learned something valuable from the dialogue from the rest of us, no?

#60 lee on 06.19.15 at 10:03 pm

How is one supposed to invest in U.S. Etfs with our dollar so cheap? You lose twenty percent going in.

So buy ones in C$. — Garth

#61 Bigrider on 06.19.15 at 10:13 pm

#55 Bigrider on 06.19.15 at 9:34 pm
I’ wont dump on any Chinese guy but I will dump on you Garth ( with all due respect of course)

Me thinks the upward trajectory of rates will be have a direct, negative correlation to the financial markets in a very immediate way, but not so much with houses, as the love affair Canadians have with them wil have them selling children and organs to keep them.

In addition, as an advisor who promotes financial assets, you have much to fear if said interest rate increases materially affect house prices, as Canadian will redeem what little they have , in order to make mortgage payments.

Heck, I see red light districts in the suburbs as soccer moms sell their bodies for mortgage money…LOL

Financial markets long ago priced in higher rates. Unlike Canadian homeowners. — Garth
=======

Perhaps you are correct on financial markets having priced in higher rates but you conveniently omitted addressing the second part of my post.

If Canadians are willing to sell their relatives into slavery and their souls to the devil for hardwood and exterior stone, surely they will sell every meagre financial asset they own to keep their precious houses.

Just replace the ring in J R R Tolkiens for a house and you get the average Canadian acting like a possessed hobbit.

Don’t worry about me or the folks I work with. They get it. — Garth

#62 Jackie on 06.19.15 at 10:18 pm

Minimum wage-kinda unrelated to today’s topic:
Whether in Alberta or not, any minimum wage hike benefits those working 2 full time jobs to make ends meet-I see it everyday…Now they only need to work 1 ft & 1 pt job
Too bad for those who say they need to close shop because of it. Guess you don’t have the know how to stay efficient. Now you may have an opportunity to work for others at crazy low wages. Then it will make more sense.
Minimum wage needs to match inflation…sorry!!!
It’s called weeding out the cheapskates & labour gougers

You have never owned or operated a business, have you? Ever created a job? — Garth

#63 Panhead on 06.19.15 at 10:21 pm

#51 Freedom First on 06.19.15 at 9:17 pm

Lastly, I think the west coasters must have wet brain from all the rain they put up with. It has distorted their thinking. I have lived through winters in 2 of the eastern provinces, and 2 of the western provinces, but I gotta tell ya, winter in Vancouver, what with the constant rain, combined with the windy days, is hell on earth in the misery index, and easily make it the coldest feeling winter in Canada. I do love the mountains for skiing though.

————————————————————
But, man, we don’t get winters here anymore …

#64 Time is #1 on 06.19.15 at 10:23 pm

#19 JSS-There is always an asset class that is better than cash

#36 Andres-Those are all indoor activities, YVR is an outdoor city.

#43 Sockeye Sam-Same in White Rock/Ocean Park, swacks of cash pouring in.

#53 ed-please keep telling everybody in Toronto that so they will stop moving here:).

#65 pete on 06.19.15 at 10:25 pm

“The BC Real Estate Association has taken up a courageous stand”

ROFL, you’re kidding me right? On an individual level realtors are talking up foreign buyers, but on an official industry wide level someone’s got to continually talk it down to ward off the off chance of regulation. It’s a chalk and cheese approach, but it plays perfectly in an information vacuum.

And you’re right, Victoria ain’t Vancouver. So it’s meaningless to quote their stats.

I don’t get why people are howling about it anyway. You couldn’t pay me a million to live in Vancouver. It’s hell.

#66 Jackie on 06.19.15 at 10:31 pm

Hi Garth, no I haven’t owned my own business nor created work. But I have sure worked for enough of them who do. They “adjust their prices” to inflation accordingly, though, to inflation.
Too bad they choose to ignore their most important “commodity”
Now that I’m making triple the average female here in Alberta as a migrant -(from Toronto), I swore to myself I would never forget how many times I had to take owners to the labour board, & others, for ripping me off for my measly wage. They were not starving, let me tell you.
How about while at the same time we match minimum wage to inflation, we send small business owners to take courses in humanitarian issues and ethical foundations and how to better manga their businesses?
Think I may have hit a chord with many there.
Match inflation like their prices do…that’s all I ask

I’m relieved you do not work for me. — Garth

#67 Andrew Woburn on 06.19.15 at 10:37 pm

#53 ed on 06.19.15 at 9:30 pm
RE #5 ILoveCharts

“We have beaches and mountains though.”

—————
You mean you have gravel pits on sewage lagoons. And don’t forget monsoon rains, mold, slugs, blatant anti-Chinese racism, a population so brain-dead by repeated pot use they can’t tell the difference between asset (investment) and liability (house), grow ups, arrogant self-satisfied metrosexual yuppies…

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

Dude, the term, “Yuppies”, is like, so Eighties. Only cranky old farts even know what it means any more. You’re not one of those, are you?

#68 Western Observer on 06.19.15 at 10:44 pm

Vancouver is unstoppable!

Dear Garth, with all due respect, interest rates will not be rising with any significance.

One year from now rates will still be relatively the same.

Are you willing to wage a “farmers bet” ?

Single family dwellings in Vancouver are on a sustained rise in value and will not be stopping anytime soon.

The world is just discovering Vancouver.

It is the most beautiful city in Canada. It has the mildest climate of all the major cities in Canada. You can come here from anywhere in the world and be accepted. You will find your culture, food, religion , community and be safe.

It is a world class city in its infancy. It is only 129 years old.

Hong Kong is 2236 years old, Paris -2067, London -1972, Singapore- 716, New York – 391, San Fran – 239
LA – 234, Sydney – 227.

Vancouver is just getting started.

To all the haters:

If you don’t live here,then your opinion doesn’t count ,as you know not of what you speak.

#69 Andrew Woburn on 06.19.15 at 10:47 pm

Call me cynical, but I think this is good for a 50% drop in the birth rate. Maybe we’ll be glad of all those nice robots.

“The male Pill is coming – and it’s going to change everything”

http://www.telegraph.co.uk/women/womens-health/11646385/Contraception-Male-Pill-is-coming-and-its-going-to-change-everything.html

#70 JSS on 06.19.15 at 10:55 pm

Telus to invest $1 Billion in tech infrastructure in Edmonton. Over 1,500 jobs to be created in Edmonton

http://www.edmontonjournal.com/touch/business/billion+fibre+optic+investment+will+make+Edmonton+Canada/11151467/story.html?rel=847766

#71 JSS on 06.19.15 at 10:57 pm

# 64

True that, but cash gives you options

#72 Franco on 06.19.15 at 11:03 pm

All speculation. The Feds have been saying that rates will be rising for the last whatever years and so far nothing, except that rates dropped further in Canada. Even when the rates do rise, it will be so slow that it will be a lot more than 5 years for rates to go 5%.

Today I bought a house with a down payment of 25% and a 2.44% 5 year fixed rate. I cannot wait anymore as I am getting too old.

#73 Henry on 06.19.15 at 11:03 pm

“Don’t be a renter!”

http://business.financialpost.com/personal-finance/eternal-truth-of-personal-finance-no-4-dont-be-a-renter

#74 Rich Gerdinly on 06.19.15 at 11:14 pm

Garth,

I wonder if the recent political turmoil in Hong Kong is driving more safe haven money to Canada..and then there is this…

http://www.theglobeandmail.com/report-on-business/economy/housing/trophy-homes-a-must-have-for-affluent-asian-investors/article24615638/?service=mobile

Hogtown is mentioned but not Vancouver…I wonder if it could be renicknamed Hamtown, though HAM-iltonians might not be happy!

#75 Mr Buyer on 06.19.15 at 11:19 pm

So I stumbled across a video from 1984 when I worked at Wilderness Tours. It was made by a National Film Board film maker over the course of the season. That was an epic few seasons back then with high water stretching well into July. If you want to have a blast go there in high water when they are doing “two guide hockey stick runs” in Coliseum (we called them 2 man hockey stick runs back then but I digress). Here is the link down memory lane…
https://www.youtube.com/watch?v=UEtoHw7qTwU

#76 Leo Trollstoy on 06.19.15 at 11:22 pm

Why? It does not rust and will make nice ring 1000 years from now.

Gold is irrelevant.

Just like everybody here, 1000 years from now.

#77 Ptarmigan on 06.19.15 at 11:40 pm

Sooooo…. Explain to me why it is better to invest rather than paying down a mortgage at an accelerated pace while the rates are still so low? This logic still perplexes me.

#78 Timing is Everything on 06.19.15 at 11:41 pm

Ever created a job? – Garth

Yup. Every time I purchase a good or service.

Part 1
http://tinyurl.com/qecvw38

Hey Pitchfork Pete, ironically, you’re gonna be joining the 1%!

Part 2
http://tinyurl.com/ks9g8lg

#79 Jaded on 06.19.15 at 11:44 pm

I couldn’t think of buying in Victoria anytime soon, it would be financial suicide. In the past year my apartment has gotten a complete makeover all for free. New deck, sliding glass door, hallways painted with new carpet, with zero cost to me. Up next, granite-like counter tops and cupboard doors at no cost, all with a 180 degree view of Victoria all for $1300 a month with 1100 sq ft and five minutes or less from downtown. Who said you throw away money on renting, when I can invest the extra $1000 a month in my
TFSA ?

#80 Rexx Rock on 06.20.15 at 12:05 am

Just because the U.S. will raise rates doesn’t mean Canada will follow.We’re independent from them just like Japan will not have to raises rates.Canada will follow Japan, so there is nothing to worry about.Yes house prices will fall one day when no new buyers can afford it.Simple economics,supply and demand.One good thing out of this is many people will retire early and free up good jobs for the young.

#81 Bby604 on 06.20.15 at 12:34 am

https://www.steadyhand.com/industry/2015/06/18/the_big_disconnect/

Great piece hard to argue with , lets get on with it Janet …
——-
Also what gona happen to the Canadian dollar if they raise rates? Currency war is on

#82 Spacco on 06.20.15 at 12:35 am

#5 ILoveCharts on 06.19.15 at 6:32 pm
We have beaches and mountains though.

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

And double the crime rate of Toronto. When I read Vancouver news websites I feel like I’m reading the Great North version of Brazilian crime-packed news.

#83 The "job creator" fairy tale on 06.20.15 at 12:56 am

You have never owned or operated a business, have you? Ever created a job? — Garth

=======

Garth, stop that “job creator” nonsense.

Business buys labor as needed for the operation – the same way as energy, material, equipment is purchased.

There is not a single business owner who has the goal to “create jobs”.

Have you ever seen a single business plan with the goal of “creating jobs”?

I bet you didn’t.

Why would any business want to do that? It cost money.

If anything, the economic interest of a business is to reduce labor cost as much as possible. Just like any other cost.

In fact, most innovation aims to increase productivity by reducing or eliminating the need to purchase labor.

The most cost effective, ideal business would have zero labor cost.

Labor is bought and sold – just like any other commodity or service.

No magic job creator fairy is involved in the financial transaction.

Why do grown-ups need job creator fairy tale?

“Creating job” is a political spin on purchasing labor, with the aim to qualify for some sort of business subsidy, handed out by politicians, who sell “job creation” for political capital to buy votes.

#84 Steve French on 06.20.15 at 12:58 am

Hey GT my posting above was not anti-Chinese, it was a real quote from The Dude, saying that the Chinese are not the issue here.

You know…

Or, “El Duderino” if you’re not into that whole brevity thing.

#85 IKnow on 06.20.15 at 1:24 am

Do we know the real estates valuation in Hong Kong?
300 sqft “2 bdrm” flat in a bland neighborhood worths $1M Cdn or more.
Poor men specials micro condos are $500k Cdn.
Then the reasoning is by that valuation a single family house in YVR selling at $3M must be a bargain.

The house lust virus is bringing Hong Kong type valuation to Vancouver.

YVR ethnic Chinese are afraid to be priced out forever.
Others are riding along the momentum.

Used to be that people aim to have the mortgage paid off in 5 to 10 years.
Now people accept a mortgage is for life and to be paid with multiple incomes + rental suite and spare bedrooms.

South east of the Fraser river land is still very cheap by YVR average standard.
But no most Chinese won’t go, and where Chinese fever is contained the price is far more bearable.

#86 millenial1982 on 06.20.15 at 1:45 am

The slow but steady ascent of interest rates along with the perpetual boomer retirements will be an interesting story to watch unfold. Looked at the local demographics of our small city. The boomer decades literaly double the population of the ones to succeed them. Garth is right. Soon we will have only what… 2 or 3 people working for every person retired?We are already having issues keeping a balanced budget with our local hospital and shit hasn’t even hit the fan. Beds being closed, sections being merged, cutbacks…. you name it. It’s only starting and the cracks are emerging. So many homes for sale on the lake more than the average family can even afford. They will only continue to sit, and as rates rise qualified buyers will dwindle. This isn’t GTA here or YVR…people aren’t lining up for three days before midnight to move here and get in.On the brighter side….lots of jobs up for grabs as the wrinklies retire.

#87 fisheman on 06.20.15 at 1:55 am

We Vancouverites can take the slagging on our city cause we got big shoulders. However, lets leave out the derogatory slights on the “rain”or “mold”aspects of our fair domicile. For the uninitiated the whole thing starts in Siberia & Canada’s arctic when huge cold lows come rumbling out of the Bering Sea & down towards Hawaii. (Pineapple Express)Picking up billions of gallons of water they run out of energy & start heading for B.C.,picking up more water all the way till they reach our mountains. That’s it: Thats why B.C. is or soon will be the richest most important part of
Canada. The mostest & cleanest & bestest water in the world. And it just keeps getting scarcer. Someday, maybe this winter with a big Sou’easter pounding our coast I’ll tell you about the U.S. Army Corp of Engineers & their little survey trip on the mighty Fraser & Columbia back in 1922. Just an” extension of elevations” whats that? Can you say “Thirsty Americans”
I hear that if western Sask. doesn’t get any rain soon, alcohol, divorce, & kids leaving home to join the circus will become rampant. Wish I could say somethings coming; but its not. Some of us old-timers are starting to mumble about saying a few words of entreatment to a higher power, so at least if you can’t pray, don’t talk a jinx on us.

#88 Chinese on 06.20.15 at 2:06 am

Garth, I really wish you would do a write up regarding the following definitions:

Canadian / Canadian citizen
Immigrant
Permanent Resident / Landed immigrant
Local
Foreigner
Foreign Investor
Foreign Money

I’ll take a stab, but may not be 100% correct.

**** Canadian / Canadian Citizen
A person who is recognized by the government as belong to Canada. Obviously, if you are born here, you are a citizen. But you can obtain citizenship through permanent residency.

**** Immigrant
A person who has migrated from another country.
An immigrant may or may not be a Canadian Citizen.

**** Landed Immigrant
Canada doesn’t use this term. See Permanent Resident.

**** Permanent Resident
A person who has been granted by the government to work and live in Canada. Pretty much do most things a citizen can, except vote.

**** Local
A person who lives in a city and forms a “community” with other.

Question: How do you measure this quantitatively?
If one works in the city, that is a good passing test. But what if they are retired and travel frequently? Or perhaps they are unemployed and forced to travel for seasonal work?

**** Foreigner
A person who is not a citizen or a permanent resident.

**** Foreign Investor
A foreinger who “invests” (i.e. purchases assets) in Canada.

**** Foreign Money
Money that is spent in Canada but not earned within Canada. Often, we talk about large amounts of money used to buy real-estate.

————

Yes, it is understandable that we are against Foreign Investors buying property in our city. But we often here anecdotal evidence of realtors and neighbors saying the Chinese are buying up all the real-esate in Vancouver. But we have to be careful. Since some 40% of the population in Vancouver in chinese, that may not mean much, especially if they are citizens or residents.

I would love data.

I think the other problem is foreign money, and even harder to solve in a global ecomony and free trade.

e.g. Here is a common scenario among some Chinese families. They have permanent status, and possibly even Canadian Citizenship. The head of the household works in China while the other spouse looks after the kids who go to school here. They pay very little taxes (relatively) compared to their public tax consumption (e.g. schools, healthcare)

#89 liquidincalgary on 06.20.15 at 2:10 am

Jackie said:

Too bad for those who say they need to close shop
because of it. Guess you don’t have the know how to stay efficient. Now you may have an opportunity to work for others at crazy low wages.

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

i am one “of those who may have to close up shop”. not to mention the nine wages that are paid out bi-weekly. but do not worry about me, i have a trade, another eight of those employees do not, no skills.

you are an ass.

#90 Carpe Diem on 06.20.15 at 2:12 am

#68 Western Observer

Dude, whatever.

I live in Vancouver 13 years. Mostly Yaletown and it was awesome.

Then came the family.

Richmond it was.

Screw that! I moved provinces.

Ontario. City Ottawa.

Why?

Beaches are plenty on the Ottawa River.
Sailing the River is fun.
Like mountain biking? Plenty of places in the Greenbelt or need hills … Gatineau hills rules and then you can jump in Meech lake for a refresher!
Kayaking … lots of lakes and rivers.
Camping … lots of places for this as well.

Salary … on average more in Ottawa than Vancouver and lots of folks in Ottawa get pensions in the end!

Prices of home … can’t compare other than folks in Vancouver are IDIOTS.

If you are young … go have fun in Vancouver, Whistler, etc.

When you are older, do what is right for your kids.
Vancouver ain’t in.

#91 liquidincalgary on 06.20.15 at 2:14 am

Jackie also said:

I would never forget how many times I had to take owners to the labour board, & others, for ripping me off for my measly wage. They were not starving, let me tell you

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

and now let me tell you, hon, i have not written myself a pay-cheque in almost a year.

#92 Love my Kia on 06.20.15 at 2:19 am

I’m relieved you do not work for me. — Garth
——————————
Sounds like #66 Jackie doesn’t want to work for you either. You become part of the problem when money becomes the only thing that matters.

This blog is getting nasty.

#93 Nagraj on 06.20.15 at 2:31 am

OSCAR NIGHT

Alex: “And the award for Best Performance in a Leading Role goes to (opens the envelope) JANET YELLEN for ‘The Hunchbacked Grandmother of the Good Ship Lollipop’ ”

– theme music, applause, Janet (with Shirley Temple hair) is carried to the podium because her legs are too short to manage the steps

After Janet’s demure thank you speech, co-host Vanna engages Janet in a bit of dialogue.
Vanna: “Well, Janet, the Oscar isn’t the only award you won this year. You also won the Miss America 2015 pageant, an Emmy for the remake of ‘Jailhouse Rock’, the Mario Draggy Best Friends prize, both the G7 and G117 dance competitions, and . . . ”

Janet gently interrupts: “But you know, Vanna, I think I treasure the GT Award for Most Powerful Woman in the World more than almost any other.”

– she is then carried back down the steps, blowing kisses all around

[In the audience Jane Fonda was heard muttering, “Midget circus clown.”]

#94 Joe2.0 on 06.20.15 at 3:24 am

Re Garth- “sorry about your gold, pal”
I do hold precious metals.
Have for years, got in at 400 oz.
Also own silver.
No regrets.
When things unravel and reset I beleive metals will be the barometer, once again.

#95 Julia on 06.20.15 at 6:47 am

#66 Jackie
“I’m relieved you do not work for me. — Garth”

I was thinking the same thing.

#96 no skills on 06.20.15 at 7:35 am

#89 liquidincalgary
#91 liquidincalgary

i am one “of those who may have to close up shop”. not to mention the nine wages that are paid out bi-weekly. but do not worry about me, i have a trade, another eight of those employees do not, no skills.

and now let me tell you, hon, i have not written myself a pay-cheque in almost a year.

======

Your business is built on your trade skills, plus work and the work of 8 employees with no skills, you have not written a pay-check yourself for a year, yet you are “liquid”.

Does not sound like a great, viable business with a future in the knowledge-based economy where we have been for a while and where we continue to move.

It’s not the cost of minimum wage that will drive your business out of existence, but your competitors, who rely on skills to create value for the customers.

Would you write that comment if you were one of his 8 employees? What an elitist dork. — Garth

#97 John on 06.20.15 at 8:18 am

At some point, we’re told, interest rates will move higher. Seems reasonable since they’ve never been lower. If the economy was actually romping, though, Janet wouldn’t be stalling. So hedging this spin, how do the masses come up with $300 more a month to pumping into the interest rate hopper? So $3,600 a year +/-…. a) only buy used cars b) ditch the Cuban vacation c) eat cheaper meat d) hit up the Bank of Mom e) buy cheaper presents f) get a job closer to home g) fill up the tank less h) visit your backyard more often i) don’t buy a big dog with vet bills j) eat in not out k) get cheaper hobbies l) cut kid’s expensive lesson pkgs: cheaper sports, fewer lessons, ferret out cheaper choices m) Library not Chapters n) Expensive daycare is at about $18,000- try Grandma etc. o) cut Cable bills p) go back to a landline and ditch the iphone (ouch) q) learn to bake r) don’t use drive thrus ever s) discover Stay-cation t) cut annual landscaping extravaganzas u) swap kids cloths v) bunk beds and fewer bedrooms w) forget a finished basement project x) forget the backyard fencing y) minimalist furniture Kijji etc z) read food flyers then shop … Outa letters. Full Stop.

#98 Bigrider on 06.20.15 at 8:19 am

#66 Jackie..

Pretty sure you are a teacher.

You fit the whiney mold of one anyway.

#99 Scott on 06.20.15 at 9:01 am

I think this blog ought to be called ” My Contradictions In Reality.” Or, “Cognitive Dissonance Isn’t So Bad After All.”

I don’t which foot I’m supposed to land on?

Economy doing great yet can’t withstand a quarter point increase?

Robust consumers spending on cars yet totally dependent on zero bound interest rates?

Zero down, zero percent financing, no income required. 1/3 of “sales” are leases, 1/3 or subprime (fog this mirror drive off the lot) the other 1/3 a combination of fleet sales and normal turn over.

Every half a percent increase in mortgage rates is followed by a crating housing market. Liftoff of another housing recovery in the US. Did I mention that affordability or better said unaffordability is at near bubble levels.
https://research.stlouisfed.org/fred2/series/COMPHAI

Economy doing great in the US but tied exclusively to asset price inflation brought about by ultra-ultra-forgettaboutit monetary policy: Yet, can continue without it.

25++ trillion in global monetary and credit expansion FREE OF CHARGE. No repayment required by said beneficiaries.

Well, I be looking forward to when you ring that “top” bell so we can get off the rollercoaster and get in line at the bottom for another ride.

Weeeee!

P.S. The central bank in the US has been telegraphing a rate increase for 3 YEARS! But this time the economy was built different and the central bank has learned its lesson…right? Keep waiting for that rate increase and maybe like a stop clock is right twice a day, you’ll be right.

One last question if I may: Who is going to buy these many trillions dollars of junk and near junk bonds when they are repriced when even the smallest EXPERIMENT in rate increases are made? I let the question of the effect of the repricing corporate stocks whose prices are largely the result of stock buy backs done at all time highs for another time.

So many fallacies lumped into one comment. But you should know equity market values are based on corporate earnings, not buybacks (that is fav, but lame cry of the disenfranchised) and this is directly related to economic growth, as is the labour market. The world is not perfect, but neither is it ready to implode. For those seeking opportunities and the ability to finance satisfying lives, they exist in quantity. Or, you can bitch and moan. – Garth

#100 jess on 06.20.15 at 9:41 am

Center for Public Integrity
5 days ago – Few states set any limits on what hospitals can charge. … the effect of charging the highest prices to the most vulnerable patients and those with the least market power. …. In one of his reports, he showed that Humana charged patients $143.25 for needles it bought for 80 cents—a markup of 17,806 percent

http://www.publicintegrity.org/2015/06/15/17474/profit-hospitals-mark-prices-more-1000-percent-because-theres-nothing-stop-them
http://www.prwatch.org/comment/34576#comment-34576

======
Makes one wonder why there is seems to be so much health care fraud committed by ” professionals.”
Health Care Fraud Takedown
243 Arrested, Charged with $712 Million in False Medicare Billings

06/18/15

More than 240 individuals—including doctors, nurses, and other licensed professionals—were arrested this week for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.

The arrests, which began Tuesday, were part of a coordinated operation in 17 cities by Medicare Fraud Strike Force teams, which include personnel from the FBI, the Department of Health and Human Services (HHS), the Department of Justice (DOJ), and local law enforcement. The Strike Force’s mission is to combat health care fraud, waste, and abuse.

https://www.fbi.gov/news/stories/2015/june/health-care-fraud-takedown/health-care-fraud-takedown

#101 ANON on 06.20.15 at 10:08 am

“Ever created a job?”

Because of trying to keep out of debt as much as possible (for my own sake, nothing on a grand scale), I did not, either. Is it a sign I’m selfish or morally reprehensible?

Neither. It just prevents you from calling out small business people exploitative or measly, as did the legacy commenter. — Garth

#102 Herb on 06.20.15 at 10:23 am

#83 The “job creator” fairy tale,

good point. Just another example of the “communications” eyewash we are subjected to.

When I worked (briefly) in the business world, corporations had “Personnel” departments and employees were “personnel.” Then someone considered it progress to call employees “human resources”, and everybody got on board.

The Latin expression nomen est omen certainly fits: employees became another resource to be used and bought at minimum cost.

#103 Herb on 06.20.15 at 10:34 am

#92 Love my kia,

you have a point on both counts –

Money has become “the only thing that matters”. Too bad, but hasn’t it always been thus? We are the apex of civilization so far. Pity.

Blog dogs do snarl at each other, but that’s part of the unpoliced internet. And Garth does get testy now and then, but that’s understandable when you do something 24/7 for years for little recompense/thanks. That’s almost as bad as being a “human resource” on a work treadmill.

#104 Franco on 06.20.15 at 10:46 am

Time is passing Garth, stop this nonsense before you go crazy. How may more years of life do you think you have left. Life is too short, tell it like it is, you reach a lot of people and make a difference.

#105 Prairieboy43 on 06.20.15 at 10:50 am

Jackie #66, Do you read? “Try Starving the Monkeys”, By Tom Baugh. Might help you.
PB43

#106 no skills on 06.20.15 at 11:04 am

#96 no skills on 06.20.15 at 7:35 am
#89 liquidincalgary
#91 liquidincalgary

i am one “of those who may have to close up shop”. not to mention the nine wages that are paid out bi-weekly. but do not worry about me, i have a trade, another eight of those employees do not, no skills.

and now let me tell you, hon, i have not written myself a pay-cheque in almost a year.

======

Your business is built on your trade skills, plus work and the work of 8 employees with no skills, you have not written a pay-check yourself for a year, yet you are “liquid”.

Does not sound like a great, viable business with a future in the knowledge-based economy where we have been for a while and where we continue to move.

It’s not the cost of minimum wage that will drive your business out of existence, but your competitors, who rely on skills to create value for the customers.

Would you write that comment if you were one of his 8 employees? What an elitist dork. — Garth

——–

Running a business that relies exclusively on unskilled employees has no viable future in 2015 in Canada.

Call me an elitist. Keep the dork out of the dialogue.

#107 jess on 06.20.15 at 11:07 am

What effect would this have on Vancouver?

Airbnb Inc., the online room-sharing business, is drawing more customers from China, Chief Technology Officer Nathan Blecharczyk said.

“The future of international travel is really the Chinese tourist,” Blecharczyk said at the Bloomberg Technology Conference Monday in San Francisco.

#108 gut check on 06.20.15 at 11:07 am

#25 My Wife Loves Garth on 06.19.15 at 7:58 pm
Just got my renewal notice from TD bank.

5yr variable closed 2.85%
5yr variable open 3.85%

A 1% spread for having a closed mortgage.
The writing is on the wall.
___________________________________

Like you, I follow the banks’ sales pitches for clues to what their behind the scenes knowledge is versus what the public presentation of the future is.

More interesting than what you posted, I think, is that we were sold hard on the Fixed rate, closed at 2.67%.

Lower than the variable rate.
“Rates are likely going to go up” she says.
Since I know she knows who butters her bread (and it ain’t me or the other customers) I can only surmise that it would be less profitable to the bank if we took her advice.

Rates are not going anywhere – possibly down – for at least two years. That’s what this tells me.

But I’m only basing this on the wisdom of thousands of quants, algorithms and financial actuaries I’ve never met and the stated mission of the corporations for which they work.

#109 gut check on 06.20.15 at 11:08 am

*** OOPS, should have read “Less profitable to the bank if we IGNORED her advice”

talk about completely screwing up my own point. :)

#110 waiting on the westcoast on 06.20.15 at 11:26 am

Jackie and no skills re: small business

Wow – try not to be a victim. You really need to try starting a business. Lots of learning in store for you.

It’s funny how people say it’s exploitive to hire people for low wages yet no one points out that employees participate in this bargain. If they feel they are worth more or can provide more value, they will either decide not to take that position or quickly push for what they desire. If the market value is higher (ie the majority of the oil of workers available are only willing to work at a higher pay level, the businesses owners will be forced to pay more.

Why are truck drivers making 6 figures in the oil patch? They are pushing for more $$$ because they desire it, recognize the businesses need them, and understand that the business can support higher pay.

Many smaller service businesses like fast food restaurants do not have that luxury. Low prices demanded by consumers have put pressure on all key inputs (including labor) in that space.

As Liquid in Calgary mentions, the owner eats last. For the past year, he had been keeping the business afloat and not taking a salary even though he is the most valuable employee. No one cares that he may have sunk his life savings to start his business, weathered many setbacks and retains his team while paying no payment to himself. But they line up to complain when he makes above average income when times are good.

I like the hunter analogy – if you don’t like you’re portion size or the quality of the meat you are given, you can always go out and hunt on your own. But my experience is that very few are willing to risk life and limb (cash modern equivalent).

BTW – Being liquid is not dependant on immediate cash flow (although it helps get and stay that way).

#111 Drill Baby Drill on 06.20.15 at 11:31 am

#97 John
Very well summed up on how to tighten belts and adjust to the upcoming reality for many in Mold Town, Cowtown and Hogtown. However most will have to bail on their homes because the skills required to make the changes needed are just not there. They are so special that they have never had to learn how to make do.

#112 Marco on 06.20.15 at 11:41 am

Bank of Mattress:

http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

“His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.”

Cheers.

#113 crowdedelevatorfartz on 06.20.15 at 11:56 am

@#58 Chaddywack
Re your Realtor neighbour

“She then stated to her friend “I like made almost $150k last year, that’s like more than a doctor. Glad I didn’t go to med school, how useless would that have been!”

I really don’t know what else to say….. :)
++++++++++++++++++++++++++++++++++++

You should have piped up, “Next time you need an enema…..see a realtor…”

#114 devore on 06.20.15 at 12:03 pm

#102 Herb

The Latin expression nomen est omen certainly fits: employees became another resource to be used and bought at minimum cost.

Buyers want to pay the lowest price, sellers want to receive the highest price. Don’t pretend like there’s only one side to this equation. Only those sellers whose product is in oversupply get to accept what is offered. Get some in demand skills, improve yourself. No one owes you a living just for existing.

#115 crowdedelevatorfartz on 06.20.15 at 12:04 pm

@#66 Jackie
“How about while at the same time we match minimum wage to inflation, we send small business owners to take courses in humanitarian issues and ethical foundations and how to better manga their businesses?”
+++++++++++++++++++++++++++++++++++
O..M…G…..

So if inflation were to reverse into “deflation” you’d be ok with a minimum wage cut? Right?
One question. If the the small business owners are busy completing those wonderful courses….who’s running their business? They don t call them “small” for nothing…..
Go back to university and learn some more theoretical drivel that has zero basis in the real world.
Or. better yet.
Start your own small business and run it into the ground.

#116 Conor on 06.20.15 at 12:04 pm

DELETED

#117 Nemesis on 06.20.15 at 12:14 pm

#FromTheSublime… #ToTheRidiculous… #YourSaturdayPotPourri…

#TheHumanCostOfPoliticalFailure…

[LAT] – For many in Greece, the economic crisis takes a major toll: their homes

http://www.latimes.com/world/europe/la-fg-greece-crisis-homelessness-20150620-story.html#page=1

[WAPO] – Why teachers are fleeing Arizona in droves

http://www.washingtonpost.com/blogs/answer-sheet/wp/2015/06/19/why-teachers-are-fleeing-arizona-in-droves/?hpid=z4

#WhatDreamsMayCome…

“It is dangerous to mix godlike technology with megalomaniac politics but it might be even more dangerous to blend godlike technology with myopic politics.” – Yuval Hurari

[NewStatesman] – Who owns the future? How the prophets of Silicon Valley took control: In an era when politics is bereft of grand visions, bioengineers and Silicon Valley tech geeks are claiming the mantle of leadership and prophecy. But what do they want and where are they leading us?

http://www.newstatesman.com/lifestyle/2015/06/who-owns-future-how-prophets-silicon-valley-took-control

#WhoseWaterloo?,Or… #Wellington’sWinkyShouldBeSoLucky…

[Independent] – Waterloo 200 years on… and the strange journey of Napoleon’s penis

“Wow, the stuff you find in New Jersey.”

http://www.independent.co.uk/news/world/europe/waterloo-200-years-on-and-the-strange-journey-of-napoleons-penis-10333605.html

#118 Prairieboy43 on 06.20.15 at 12:14 pm

Having a coffee with wife this morning. A couple of her colleagues are buying homes. Newly married, children (young). Wife wants house. I told her, did you say anything to them about AB economy. Answer, Yes!! They are taking possession next month. Millennials!!!

#119 Mister Obvious on 06.20.15 at 12:18 pm

#97 John

Dude. You sure know how to throw a wet blanket on the ‘wealth effect’. What good is it to own a million dollar home if you can’t also spend like a drunken sailor?

What kind of sad economy is it that can’t raise itself by its own bootstraps? Get with the program. At least until after the next election.

#120 Cyrusg on 06.20.15 at 12:26 pm

Hi Garth,
Last week CanadaLand interviewed South China Morning Post’s Vancouver correspondent Ian Young on the impact that Chinese immigration is having on Vancouver, especially its real estate “freak show” (his words). He attributes some of the high real estate prices to Chinese buyers entering Canada through Quebec’s immigrant investor program. Would these buyers mask the impact that Chinese investors are having on the market as maybe they would not be seen as “foreign investors” but Canadian residents? Anyway it’s an interesting interview: http://canadalandshow.com/podcast/hongcouver

#121 Julia on 06.20.15 at 12:52 pm

#110 waiting on the west coast

I think that in theory people do not have to accept to work at a low wage if they feel they are worth/deserve more but the reality is much different. When you need a job, you need a job.
What I have trouble with is consumers demanding the lowest price possible while also demanding higher wages. True that higher prices will not necessarily translate into higher wages but downward pressure on prices will certainly be reflected in lower wages.

There is a cost to low prices.

#122 BlackDog on 06.20.15 at 12:59 pm

@Chinese, re: #88 “Canadian / Canadian Citizen
A person who is recognized by the government as belong to Canada. Obviously, if you are born here, you are a citizen. But you can obtain citizenship through permanent residency.”

Not quite accurate. I have been a Canadian since the day I was born, but was not born in Canada.

#123 Leo Trollstoy on 06.20.15 at 12:59 pm

You really really like animals.

And dogs too.

#124 Leo Trollstoy on 06.20.15 at 1:04 pm

All these posters bitching about things in which they have no experience or success. Investing. Running a business. Economics. Finance.

Hilarious. Also explains why they’re poor wage slaves.

#125 bdy sktrn on 06.20.15 at 1:10 pm

No one owes you a living just for existing.
—————————–
now you have done it, the communists here will not be happy with you for daring to point this out.

#126 Don Derc on 06.20.15 at 1:13 pm

Want to know the future of interest rates? Here’s a cut and paste clue:

“Just got my renewal notice from TD bank.

5yr variable closed 2.85%
5yr variable open 3.85%

A 1% spread for having a closed mortgage.”

Answer: a 5 yr closed will never be higher than 2.50% over the next 5 years or else the house will lose money. The rates will continue to be fudged to keep the casino operating. Remember, the super committee a few years back raised the debt ceiling, but didn’t solve the problem. $60 a barrel oil was devised by the Yanks and THEIR masters, the Saudis. Oh, and we never saw that coming!

I’ve always said it is not the Cdn Gov’ts call on rates – other countries (China/EU) will call the shots on that one. Things will be manipulated when oil/lumber/potash/molybdenum/coal gets too pricey to buy from Canada. Economies will be manipulated when we get too good for our competition. It’s happening now.

No mortgage, no debt, and a good cash position….or else I buy your ATV/house/speedboat for pennies on the dollar in 2016….

Hey Gringo how mucho for de girl….

Sometimes this blog makes me despair. How did so many people get led so astray? — Garth

#127 Randy Randerson on 06.20.15 at 1:21 pm

#58 Chaddywack on 06.19.15 at 9:45 pm

That’s some funny shit from a realturd. I make $150k last year…in 7 months, and I help people. What do realturds do?

#128 triplenet on 06.20.15 at 1:56 pm

The Bank of Canada rate:
1920 – 1960 – ~3%
1960 – 2000 – ~5%
2000 – 2015 – ~3%

Of course there are peaks and valleys in this ~100 year span…..but what is the normalized rate we should all be expecting?
4% ?

The BoC rate does not determine fixed-mortgage costs, the 15-year average of which is 8%. — Garth

#129 Realtor007 on 06.20.15 at 2:02 pm

#73 Henry on 06.19.15 at 11:03 pm
“Don’t be a renter!”

http://business.financialpost.com/personal-finance/eternal-truth-of-personal-finance-no-4-dont-be-a-renter

———————————————

Most renters will never be able to own because they can’t keep up with paying rent and saving for a down payment as housing increases, it’s just a downward spiral, if one has a dp now it’s best to buy a free standing house or free hold townhouse and pay yourself first instead of the landlord.

Generalized, self-serving and useless advice. Because people (like me) rent does not mean they lack wealth (I don’t). Renters who have invested in liquid assets have equaled or surpassed the returns of those who bought real estate, plus having liquidity, mobility, more cash flow and choice. Both renting and owning are valid options. The only ‘downward spiral’ will be in your career when the housing market erodes. — Garth

#130 Washed Up Lawyer on 06.20.15 at 2:15 pm

Hey Toronto, the Argos open their season next Saturday in Fort McMurray. The Double Blue are the home team. What a wacky country. I do not expect the TV cameras will scan the crowd with only 4000 tickets sold to date.

With luck, the TV broadcast will feature a fly over of the metropolis, a mine site, a shot of a $4.5 million haul truck with $480K worth of tires and the serene beauty of the mighty Athabaska River.

To return to topic, I am somewhat mollified by the Calgary Real Estate Board statistics. Calgary is where my corporeal hereditament is. We are one month away from the anniversary of the commencement of the big slide in oil prices, July to January and the mild recovery to sixty bucks now.

Yes, the 2.5% fixed fivers helped and we have a long stretch of rough logging road ahead of us but Alberta is not finished. I am not discounting the possibility of this being a long, slow slide downward but there has not been a run on guns and ammo.

#131 Nemesis on 06.20.15 at 2:35 pm

“I am not discounting the possibility of this being a long, slow slide downward but there has not been a run on guns and ammo.” – WUL

#Meanwhile,BackInFortMac,Or… #WhatAlbertanFrontiersPeopleDo… #WhenThey’reReallyBored…

https://youtu.be/rlxmevufILI

[NoteToGT: Small wonder they can never find anyone who wants to play BallHockey with them, eh?]

#132 Realtor007 on 06.20.15 at 2:50 pm

Generalized, self-serving and useless advice. Because people (like me) rent does not mean they lack wealth (I don’t). Renters who have invested in liquid assets have equaled or surpassed the returns of those who bought real estate, plus having liquidity, mobility, more cash flow and choice. Both renting and owning are valid options. The only ‘downward spiral’ will be in your career when the housing market erodes. — Garth
——————————————–

You’re being disingenuous with saying you ‘rent’, yes you rent in the city but you also told us you own property on the outskirts so you’re not exactly the typical renter.

Comparing someones stock return vs RE returns is not even comparable, RE is bought with leverage, a $500k a house can be bought with 5% down, tell me who’s going to lend me $475k to invest into the stock market without tangible collateral?

As for my career, I wouldn’t worry about it, I’m a warrior and will always survive, lived in 3 countries before the age of 10, three years of that without my parents. Thanks for another ad hominem show.

Not sure why I wasted typing this out as it will never see the light of day, have a good one.

There was nothing ad hominem in my response. But the kiddie stuff was illuminating. — Garth

#133 bs on 06.20.15 at 2:57 pm

e.g. Here is a common scenario among some Chinese families. They have permanent status, and possibly even Canadian Citizenship. The head of the household works in China while the other spouse looks after the kids who go to school here. They pay very little taxes (relatively) compared to their public tax consumption (e.g. schools, healthcare)

How do you know how much income tax a person or family pays? CRA does not release this information and CRA is the only agency who has the information. The only numbers available are those by voluntary census survey or other survey which are not accurate. Do you think an immigrant spouse who fills out a census knows the family world wide income claimed on CRA tax returns and even understands the survey question? I know I wouldn’t report my total income on a census survey. I might list my salary but would not be putting down other taxable income such as my business income paid through dividends, investment income, etc. on a census survey. Only the CRA gets this information on a tax return and as noted they do not share it with anyone.

But even if the wealthy immigrant were paying no income taxes as you claim, they still pay taxes that more than covers their consumption of government services and then some. They actually would pay more than their fair share compared to the average BC resident who pays income taxes. An average resident may pay $20K per year in total taxes most of which goes to the federal government in income taxes. Schools and health care are paid for by mostly by property taxes, provincial consumption taxes and provincial fees. Things like property purchase tax, provincial sales tax, annual property taxes, sin taxes, fuel taxes and fees such as MSP are being paid by the wealthy immigrants at a much higher rate than the average resident. They spend more money which means they pay more taxes. All of those taxes, which are collected by the provincial and municipal governments, go directly towards schools and health care. The annual property taxes paid on a multi million dollar house, consumption taxes paid on cars and other goods, spin off income taxes from business that supply goods purchased, etc. would far exceed the $20K per year an average person may pay.

But I guess when you have an agenda then you can’t look at things objectively and have to grasp at anything that may cast an immigrant as bad even if it is patently false.

#134 bs on 06.20.15 at 3:06 pm

But I have sure worked for enough of them who do. They “adjust their prices” to inflation accordingly, though, to inflation. Too bad they choose to ignore their most important “commodity”

It would be fair to peg your wage to profitability of the business as long as you don’t mind taking a pay cut if profits drop. Would you be willing to work for free if the company made no money for a period of time?

#135 Jane Dickerson on 06.20.15 at 3:06 pm

The BCREA represents the sale persons in the biz…no one else….of course thay have nothing to say that would hurt their lobby….duhhhhhhh !!

I’m shocked you would list these legal malcontents and statistics cheats who ban information on sales data from public dissemination as a practice to be your prime source of opinion.

“The BC Real Estate Association has taken up a courageous stand opposed to what most Van realtors want people to believe, saying there’s zippo evidence foreigners account for any more than 5% of all deals. ”

Garth…either stop drinking or give yourself an enema….somethings clogging your once articulate mind with PC crap. If the BCREA sold heroin it would advertise it’s benefits and fight to have the negatives made public.

If the BCREA said foreign money was the cause of high prices you’d be genuflecting to Cameron Muir. Poor Jane. — Garth

#136 waiting on the westcoast on 06.20.15 at 3:34 pm

#121 Julia on 06.20.15 at 12:52 pm
“I think that in theory people do not have to accept to work at a low wage if they feel they are worth/deserve more but the reality is much different. When you need a job, you need a job.
What I have trouble with is consumers demanding the lowest price possible while also demanding higher wages. True that higher prices will not necessarily translate into higher wages but downward pressure on prices will certainly be reflected in lower wages.
There is a cost to low prices.”

When you need a job, you should be relying on savings and taking that lower paying job while continuing to look for the high paying role.

The reality that I see often by my employees is that they want wage increases without value being added. And if they feel they have extra skills, they often are not ambitious enough to test the market to see if they can get that higher value. As Trollstoy points out, they are wage slaves.

When I find the ones who are ambitious, I help them get more skills and give them more responsibility and they deserve/earn more money. I have often helped them migrate into their own businesses or taking small equity positions in mine.

While I know that we are all dealt a hand when born, when you are eighteen you can make your own decisions and decide to do what is right for you. It may be hard to see if you have been programmed to be a wage slave… But you can.

Most successful people I know are self-made and they used their families struggles as motivation to build their empire. But it ain’t easy…

#137 4 AM Sunrise on 06.20.15 at 3:35 pm

Let’s look at the top 5 causes again:

Chinese dudes (aka ‘foreign investors’): 64
Rich people (from wherever): 44
Everybody wants to live here: 38
People who don’t live in houses they buy here: 35
Cheap money: 21%

I wanna see the rest of that survey! Because here’s my beef: the first 4 items are all variations on the same theme. Chinese with money love the Vancouver lifestyle though they don’t live in the houses they own most months of the year, blah blah blah. Wouldn’t it be a fairer survey if the choices were mutually exclusive and you could only pick one? Was the Bank of Mom & Dad even on the list of possibilities? I want to believe that they know what they’re doing down at Angus Reid, but if they take what the sheeple already believe about real estate, break it up into 8 separate choices out of, say, 12 in total, and then tell people “select all that apply”, then of course the prevailing sentiment will win out.

Bah, even if the choices were mutually exclusive, it wouldn’t change the result anyway.

#138 observer on 06.20.15 at 3:38 pm

Interesting

I did a poll just like yours

Ask how many will be in trouble if interest rates goes up.
55 and up – 20 %
45 … – 58%
20 .. – 85%

But the killer is the young age group does believe interest rates will ever go up. Because for heaven sake if it did they will be toast and the government will never allow it

#139 observer on 06.20.15 at 3:42 pm

128 triplenet on 06.20.15 at 1:56 pm
The Bank of Canada rate:
1920 – 1960 – ~3%
1960 – 2000 – ~5%
2000 – 2015 – ~3%

Of course there are peaks and valleys in this ~100 year span…..but what is the normalized rate we should all be expecting?
4% ?
=========
I remember in school it was always the rule of 8 years to double your savings @ 8%.

Average Mortgage rates were always around 9 %.

Your charts are skewed because you can’t count the emergency rates as of 2007. You got to go to normal non emergency times

#140 New guy on 06.20.15 at 3:47 pm

But data is data.

^^^^^^^^^^^^^^^^^

What data, we have data now ?????

#141 John on 06.20.15 at 4:03 pm

Referring to my post #97. Glad it got a few folk’s attn. Every boomer lived in such a household with parents who could rock every cent. They lived happy and fulfilling lives in modest homes and had quite full social lives. Try a few adaptations, even if you got the cash to carry on… re-tool what’s great about life. Garth’s a 1949er. Wisdom. Dogs as buddies. Kids as your greatest achievement. You know, granite wasn’t a kitchen counter and each home had one black phone on the wall ……… simple. We might even remember how to talk to each other again, in person. Big, honking trophy homes bigger than Prince William lives in….. such a pathetic life achieving bench mark. Change gears folks, or Janet Y will do it for ya’. Keep up the good work Garth.

#142 TurnerNation on 06.20.15 at 4:05 pm

Smoking man, others. Check out this little unspoiled water (ahem channel) front gem just east of downtown.

http://www.keatingchannelpub.com

Was there first time, contrast to this week’s glad handing and back slapping at Vertical and Bymark patios. Here, all the Track 6 or 905ers padding expense accounts – waiting for last train to darksville – try avoid 1 hour trip home to little screamers and kids.

#143 New guy on 06.20.15 at 4:13 pm

DELETED (Language)

#144 TurnerNation on 06.20.15 at 4:23 pm

Jess I always enjoy your posts keep em coming. Social Economics.

#145 SWL1976 on 06.20.15 at 4:31 pm

#130 WUL

A coworker here in the dust cloud was at the preseason game at the new stadium last week. He mentioned that there were about 15k in attendance, but perhaps he was talking up the Mac cause he lives there. Maybe there were though as April Wine was playing and who wouldn’t want to see a show like that under the late evening sun in the taiga.

A good friend of mine who is an avid hunter who packs his own shells was telling me gun powder was in short supply these days due the the US military buying it up. However, that was on Vancouver Island which is a long way from Cowtown.

To add to the Vancouver Island reneck debat. Yes we do have our share of rednecks, but so does every where in this great country. Rednecks know no boundries and share common values such as ignorance and not being able to see past their front porch.

The county, township, or district may change but the redneck ideology does not.

#146 Mark on 06.20.15 at 4:33 pm

“Of course there are peaks and valleys in this ~100 year span…..but what is the normalized rate we should all be expecting?
4% ?”

Yeah 4% sounds about right, ie: the rate of long-run nominal GDP growth. However, as with any mean reverting process, there will be periods spent above the mean for periods spent below the mean.

Of course, 4% is just for overnight borrowing. For longer-term borrowing, the bond market ascribes a premium associated with interest rate risk, inflation risk, etc. Additionally risk premia are assigned to individual types of credit on the basis of their credit quality — which itself changes over time as credit-worthiness of a particular asset class offered up as collateral increases or decreases with the business cycle.

For instance, when houses were rising in value, lenders weren’t very worried about being paid back. Worst case scenario was that they foreclosed on someone who forgot to make payments, and they sold the appreciated house for a small profit which would not only cover the debt, but other costs.

Now that houses are depreciating, risk premia is rising because equity is, at the margin, no longer enough to cover off losses. This trend will deepen as the housing market continues to accelerate into decline. I believe it will be the market, not the Bank of Canada, over the next 5-10 years that actually increases mortgage rates — a simple reflection of housing being in oversupply, and the market needing to charge more against riskier lending.

The low BoC rates (and probably going lower) will end up being reflected in the cost of credit to other asset classes. For instance, Canadian corporations are fairly under-leveraged these days relative to historic metrics. Some sectors have minimal access to credit. Low BoC policy rates, and higher risk premia in housing implies that risk premia probably will drop in other sectors. Eventually over time this should create jobs and personal income gains vibrant enough to arrest the decline in housing prices.

“Now that houses are depreciating, risk premia is rising because equity is, at the margin, no longer enough to cover off losses.” Crap, as usual. There is no risk premium in Canada with home loans because mortgage principals are CMHC-insured. That is exactly why virgins with zero equity can access money at the same rate as a 50-year-old with a 75% down payment, and why we have inflated values. Do you just make this stuff up? (Rhetorical question.) — Garth

#147 New guy on 06.20.15 at 4:41 pm

This should be your base expectation – that the rate environment we’re heading into will turn 2.5% five-year mortgages into something closer to 5% by the time you come up for renewal. On a weensy $400,000 YVR condo loan that will turn the monthly from $1,791 to $2,326, an increase of 30%.

****************
Right, and rents never go up in vancouver right GT.
Like form $850 -$2200 after renovictions 9 months later ?

#148 Mark on 06.20.15 at 5:08 pm

“Crap, as usual. There is no risk premium in Canada with home loans because mortgage principals are CMHC-insured. “

Of course there’s risk premium in Canada with mortgage loans. You can’t obtain a mortgage as a retail customer for the same rate as the GoC can issue debt. Therefore there is a risk premium which is plain obvious for anyone to see. You can see it as an investor as well by simply bringing up the yields on GoC bonds versus the yields on Canadian MBS at similar points on the yield curve. This risk premium enlarges or contracts over time, as a reflection of the marketplace’s enthusiasm for lending against a particular asset class.

I agree that the risk premium is abysmally low at the moment, largely driven there by the CMHC — but to say that it is non-existent or will perpetually remain non-existent isn’t consistent with the long-term facts. If prices fall enough and the CMHC has to pull back on its activities or place some limits on its guarantees — watch out, that risk premia is going to expand significantly.

Comparing what a retail customer and a government can borrow at it disingenuous, and useless. And you know it. You stated: “Now that houses are depreciating, risk premia is rising because equity is, at the margin, no longer enough to cover off losses. This trend will deepen as the housing market continues to accelerate into decline.” This is false. There is no rising risk premium due to market conditions, and when rates do increase it will have zero to do with lender risk and everything to do with the cost of funds. — Garth

#149 Maxine on 06.20.15 at 5:47 pm

You insulted most everyone except the gold bugs!! You’re slipping! Maybe next post? Cheers..

I am mellowing. — Garth

#150 saskatoon on 06.20.15 at 5:50 pm

#66 Jackie

“Match inflation like their prices do…that’s all I ask.”

This statement is so vastly perverse and ignorant…

gotta be trolling.

#151 jess on 06.20.15 at 6:19 pm

Nemesis

while educators flee… investigations into charter school fraud continue

https://www.jacobinmag.com/2014/11/education-inc/

…”The federal investigation points to possible corruption at the Gulen charter network, with which Concept is affiliated and which takes its name from the Turkish cleric Fetullah Gulen. And a Jacobin investigation found that malfeasance in the Gulen network, the second largest in the country, is more widespread than previously thought. Federal contracting documents suggest that the conflict-of-interest transactions occurring at Concept are a routine practice at other Gulen-affiliated charter school operators….. quickly grown to over 130 schools in twenty-five states while employing the same business strategy: invest in lawmakers to win charter school contracts, import Gulen adherents to staff schools on H-1B teaching visas, and award school contracts to education resource firms led by former employees.”…

http://www.progressive.org/news/2014/08/187821/fbi-tracks-charter-schools
http://www.propublica.org/article/charter-school-power-broker-turns-public-education-into-private-profits
http://www.seattletimes.com/seattle-news/second-probe-launched-into-states-first-charter-school/
http://archive.freep.com/interactive/article/20140622/NEWS06/140507009/State-charter-schools-How-Michigan-spends-1-billion-fails-hold-schools-accountable

#152 Mark on 06.20.15 at 6:29 pm

This is false. There is no rising risk premium due to market conditions, and when rates do increase it will have zero to do with lender risk and everything to do with the cost of funds. — Garth

Of course risk premia rises due to decreasing quality of collateral and decreased credit-worthiness. This is one the most fundamental aspects of finance and market pricing of debt.

It shouldn’t be taken for granted that mortgages will always have low risk premia attached to them. I gave reasons why risk premia is set to expand significantly in the coming years. As it stands, we have already seen expansion of risk premia in products that don’t fall under CMHC insurance — such as HELOCS (no longer ubiquitously available at prime) and even products linked to the “Prime” rate (“Prime” itself was not lowered the full 25bp that it ordinarily would have been when the BoC cut the policy rate in January).

Spreads/risk premia, are important inputs to “interest rates” charged to consumer borrowers as the BoC policy rate and bond market benchmark yields. It is silly to focus solely on only half of the “big picture”. The BoC is nowhere near raising policy rates as the economy simply does not justify it, and will likely lower policy rates in the future. However, residential RE borrowing rates are likely to rise in the future simply because such borrowers, with declining equity, declining solvency, and increasingly poor job prospects represent significantly greater risk. Hence rising risk premia.

In the US housing collapse, a significant expansion of risk premia occurred in a slightly different way. Those who had reasonable amounts of equity and good balance sheets were able to obtain re-finances of their 30-year mortgages at record low long-term interest rates in the post-2008 collapse era. Those who were “underwater” or with very weak equity were stuck with their mortgages locked in at fairly high rates. Lenders rewarded high-quality borrowers with lower interest rates, while leaving poor-quality borrowers with fairly high interest rate loans in an economy which has experienced minimal inflation and more recently CPI deflation. The real cost of credit for the poor quality borrowers expanded significantly, while the high quality borrowers saw their real borrowing costs plummet.

“However, residential RE borrowing rates are likely to rise in the future simply because such borrowers, with declining equity, declining solvency, and increasingly poor job prospects represent significantly greater risk. Hence rising risk premia.” There is not a correct word in your reply. I have already provided the facts. You have provided the fiction. The topic is closed. — Garth

#153 Hancock Stillwater on 06.20.15 at 6:44 pm

Knock Knock

“You still want to dump on the Chinese guy? Knock yourself out.

Garth , you might be experiencing confabulation in regards to HAM. You seem to worry that HAM is interest rate driven and a part of the community, when they are not .

The main problem ( as was the case in the Australian data) is that there are tens of thousands of corrupt foreign nationals officials who happen to be of Chinese citizenship laundering stolen billions in Canadian real estate.

You’re stance on community is admirable but misplaced as foreign nationals are not Canadian citizens. Australian society is an almost mirror image of our own, with a similar experience with the same HAM issue. The one difference was that the Ozzies were honest with themselves about the origins of the problem.

Vancouver real estate is an over-priced tower of risk because of the locals, not foreigners. Excessive borrowing and house lust, not drop-ins from China, will be your undoing. — Garth

#154 Hancock Stillwater on 06.20.15 at 6:45 pm

http://www.vancouversun.com/opinion/columnists/Australia+real+estate+data+about+offshore+investment/11151872/story.html

#155 Steve French on 06.20.15 at 6:48 pm

Smoking Man are you getting ready for the new “True Detective” ?!

You’ll have to catch it on the tely down in Vegas….

#156 Unhinged Loon on 06.20.15 at 7:06 pm

Mark, if you had spent all of your time learning to code or some other marketable skills, instead of dispensing peculiar and bizarre opinions on public forums, you could have made a steady income and expanded your net worth for the past decade that you’ve diligently wasted time posting.

My investing strategy is now based on your personality: if Mark says one thing, bet the other way.

#157 Julia on 06.20.15 at 7:21 pm

#136 waiting on the westcoast

I guess we are talking about different group of employees. I am referring to the minimum wage, single parent for instance. The vulnerable. The ones for which “relying on savings” is not even a possibility. Young employees with ambition starting their career have different opportunities and flexibly.

#158 Smoking Man on 06.20.15 at 7:35 pm

What a disaster last night was….

I’m amped its Friday Night, lets face dogs. There is Vegas Sun to Thur. Zzzzzzxx
Then there is Friday and Saturday night. :)

Then through in EDC weekend. My camera would shoot 1000 pics of the best and worced of mankind. Plus give me more book food.

After an early dinner, after a day of drinking in the pool. We decide to have a wee nap at about 6pm be ready to take down this town.

We woke up at 6am… Epic Fail. We missed Friday night completely. Coffee, energy drinks, and Gator Aid no match for the sun and pool.

Won’t make that mistake tonight.
…..

One think for sure. These kids here all have money.

#159 Chinese dude on 06.20.15 at 7:55 pm

I am a Chinese dude from mainland China. I immigrated to Canada in 2000, there are some facts you guys do not know about Asian immigrants.

Most of us came to Canada with 20K or so US$, if you call that HAM.

How can we afford detached house in YYZ ? we rent out bedrooms (basement, sometimes even master bedroom), can you white folks do this ?
I know some Indian immigrants, two families buy one house and live in it together, can you white folks do this ?

I am also so sick and tired of Canadian housing market and job market, instead of pick the immigrant as scapegoat , I moved to south of the border, enjoy the better pay and lower tax and housing price.

wake up people, it is the bay street

#160 Llewelyn on 06.20.15 at 8:05 pm

I can hardly believe that there is one single person in Canada that honestly believes that $10/hour is a fair wage in 2015.

I would like one of your bloggers to explain how one covers the cost of living for their family on take home pay of $1,400/month.

Many of the jobs paying $10.00/hour are in major cities where rent for even the most basic two- bedroom unit exceeds $1,000/month. What is left after that? Not a line of credit from a bank that’s for sure.

News flash!! Working poor exist in Canada but their voices are being obscured by right wing propaganda suggesting that fair wages will extinguish all small businesses.

This self serving propaganda also allows Loblaws to justify paying workers in Bangladesh 40 cents per hour. They are happy for the work so our conscience is clear. What’s next a return to workhouses to keep jobs in Canada. How about a offering employment to children willing to work for $8.00/hour?

Here is an idea for consideration.

Instead of insuring billions of dollars in profit for our banks the Government of Canada could issue bonds paying a guaranteed rate of 4%. Proceeds from these bonds would be made available as low interest loans to existing and new small businesses that agree to hire Canadian citizens and to pay them a fair wage.

Each year the tax return filed by the small business would be reviewed to determine the return on equity invested in the small business. If payment of fair wages reduced the rate of return on equity below 7.0 % per the interest rate on the value of the government loan would be adjusted to guarantee the investors a fair return on equity.

Obviously the low interest loan would require the investors to state the proposed salaries of all employees including those of the owner(s) and family members. All claimed expenses, including wages, would be reviewed and subject to a CRA audit.

The program would only be attractive to small business that might not generate a net return on equity of 7.0% without support from the Government of Canada.

Before calling this idea socialist crap I would direct your attention to the Limited Dividend housing programs introduced by the Government of Canada to stimulate the construction of affordable housing after W. W, II.

I for one am getting a bit concerned that any blog not based on the avaricious pursuit of more wealth for the “haves” is discounted as the ramblings of a misguided soul.

Calling someone who doesn’t agree with you a dork was not really your finest hour.

Actually it was the ‘elitist’ part that mattered. Like you. — Garth

#161 Obvious Truth on 06.20.15 at 8:26 pm

If realtors and bankers call housing an investment and understand the extreme leverage aspect, shouldn’t they have some sort of fiduciary duty?

Nagraj. Loved your recent writing. Until you insulted my favourite grandma, Janet. At least I think you insulted her. You’ve got to be pretty nimble to navigate all those economic land mines. Quick feet is what I’m saying here. Probably an old school street baller from Brooklyn.

#162 Smoking Man on 06.20.15 at 9:15 pm

Epic fail number 2.

Finally after years of wanting to take my wife to a strip joint, she reluctantly aggrees. After all she read my book. There is a seen where Smokey Meets Krunt at Cheetahs. I’ve never been there. But I need have the description accurate.

We get into the Red Beast Convertible heading over for a grand entrance, the AC dies. Hot desert air melting us to pieces.

I look up to the sky and say seriously god.

Go around the block. Back to the valet attendant, who’s not happy getting into a car that’s 115 degrees.

Well, the way I see it.. Mission incomplete. Must come back again.

It’s going to be funny handing the keys back to the rental car company tomorrow.

I’m lactose intolerant, I’ll have poutine for breakfasts, If I time it just right my belly will the size of a pregnant elephant. I’ll be demanding a free rental. You see attendant , I’m allergic to heat. Your car nearly killed me. I might die any moment. What’s your attorneys tell , we have a law suit.

#163 jess on 06.20.15 at 9:16 pm

say what?

“An offshore provider in Europe has discovered a novel way of becoming fabulously wealthy: For decades, he has been pilfering the assets of his wealthy clients once they died, instead of passing them on to legal beneficiaries, so says his company’s former computer engineer.”

The Offshore Wrapper is written by George Turner, c/o Wrapper Towers
http://www.taxjustice.net/2015/04/28/the-offshore-wrapper-a-week-in-tax-justice-59/

David Marchant
How OffshoreAlert exposed one of the world’s biggest-ever frauds
Belvedere Management Group

http://www.offshorealert.com/

Belvedere Management and its $16Bn: Now Looking More Like a Huge Collapsing Scam
Posted on May 8, 2015 by Richard Smith

Back in March, Offshore Alert made some very aggressive but plausible-looking claims:
http://www.nakedcapitalism.com/2015/05/belvedere-management-and-its-16bn-now-looking-more-like-a-huge-collapsing-scam.html

#164 saskatoon on 06.20.15 at 9:28 pm

#160 Llewelyn

gotta appreciate the cognitive dissonance of the wackjob commie intellect.

fair = stealing for perceived ‘good’ reasons
not fair = stealing for perceived ‘bad’ reasons

theft is theft.

stealing is morally wrong.

fairness lies in the degree to which theft is avoided/mitigated.

#165 bill on 06.20.15 at 9:44 pm

#159 Chinese dude on 06.20.15 at 7:55 pm
funny you should mention that…
one of my old sawmill workmates did exactly that. He was from Taiwan originally
he bought a house in Kits just off MacDonald and 10th.
as I recall he had 3 tenants upstairs ,2 on the mainfloor
plus himself and the wife and I think 3 or 4 in the basement.
would you be surprised to hear that some of them were working two jobs? I bet not!

#166 Llewelyn on 06.20.15 at 10:04 pm

Elitist?? Just who is this elite you think I am part of?

Certainly not the plutocracy calling all the shots these days.

#167 gladiator on 06.20.15 at 10:04 pm

Garth, so you are going to refute what locals see and hear about (rich Chinese scooping up real estate) and ignore this outright?
I don’t live there but from what I read online, the official numbers somehow are missing the fact that HAM is a huge driver there – whether via foreign buyers or local proxies who you rightfully call Canadians, but who are used by the rich foreign buyers.

#168 hobie cat on 06.20.15 at 10:17 pm

DELETED (Racist)

#169 Herb on 06.20.15 at 10:25 pm

#160 Llewelyn,

don’t let the harassing fire from the Right bother you. You’re right.

#170 crowdedelevatorfartz on 06.20.15 at 11:31 pm

@#Llewelyn
“I would like one of your bloggers to explain how one covers the cost of living for their family on take home pay of $1,400/month…….”
+++++++++++++++++++++++++++++++++++

To be brutally honest.
ANYONE that is working for minimum wage AND is raising a family………is probably too stupid to understand why they’re poor…..
Minimum wage is generally paid to people with zero skills….OR the job could be taught to a monkey……

Seriously?
Raising a family on $10/hr? A fricken teenager living at home making $10/hr wouldnt have enough money to pay for dinner and a movie once a week. Let alone rent, food,etc. for a family so WHY would someone put themselves in that situation?

Is the govt minimum wage now responsible for every pregnant teen with a missing dad?

Do you really think raising the minimum wage to $15/hr or even $20/hr would make a difference?

No. They’d just have more kids and then bitch about how “unfair” the “system” was……
$50/hr wouldnt cure their stupidity.

Gimme a break.

#171 Steve French on 06.20.15 at 11:43 pm

“Miserable Vancouverites fed up with housing costs, want to move away: survey”

http://metronews.ca/news/vancouver/1401358/miserable-vancouverites-fed-up-with-housing-costs-want-to-move-away-survey/

#172 Hughman R. Mainz on 06.21.15 at 12:22 am

#102 Herb on 06.20.15 at 10:23 am
#83 The “job creator” fairy tale,

When I worked (briefly) in the business world, corporations had “Personnel” departments and employees were “personnel.” Then someone considered it progress to call employees “human resources”, and everybody got on board.”

In many companies, these departments are affectionately referred to as “Human Remains” …you can probably guess why!

#173 crowdedelevatorfartz on 06.21.15 at 12:24 am

@#169 Herb
keep smoking herb Herb…… eventually you’ll realize Llewellyn’s wrong

#174 Leo Trollstoy on 06.21.15 at 12:37 am

There is not a correct word in your reply. I have already provided the facts. You have provided the fiction. — Garth

This applies to virtually all of Mark’s posts.

He has had difficulty landing gainful employment and hasn’t achieved satisfactory investment results because his perspective is wrong and doesn’t match reality.

I’m not sure how we can help him.

#175 Leo Trollstoy on 06.21.15 at 12:43 am

Do you just make this stuff up? (Rhetorical question.) — Garth

lol

The problem is that some of the newbies may read Mark’s delusions and be mislead.

It’s one thing that Mark has had poor employment and investing outcomes, but it’s another thing to purposefully damage the financial standing of others.

It’s wrong and immoral. Fraudulent behaviour.

#176 waiting on the westcoast on 06.21.15 at 1:38 am

#136 waiting on the westcoast

I guess we are talking about different group of employees. I am referring to the minimum wage, single parent for instance. The vulnerable. The ones for which “relying on savings” is not even a possibility. Young employees with ambition starting their career have different opportunities and flexibly.”

Choices and sometimes unfortunate circumstances… At the end of the day, you need to evaluate where you are at, decide what you want and make a plan to get there. It might involve a lot of extra work to raise oneself out of such a precarious position. BUT – it can be done if you are determined.

Maybe they need to work two jobs. Make sure that one has skill development as a possibility. Maybe he/she finds another person who is a single parent and offer to child mind for each other so they can each take a class that helps improve their skills.

With respect to my mostly young employees, they often have had some challenges and have made some bad choices. What is interesting is that they spend a lot of time talking about what they want and very little time working towards it. They would rather go for a beer or play video games or take their girl to a movie. So – they stay stuck because they are not up to the efforts that are required to get them to a better place. A few years of extra effort and they will be in a far better place for the rest of their lives.

The funniest story I have seen was when I was 19 heading to a job on Granville street. Passed a kid who was my age begging for money. I stopped and asked him why he didn’t try to get a job at McD’s, etc. He said that he made more money begging + welfare. I told him if he worked at McD’s, he could work his way up or even go to another company within a year and make more money… Some people don’t get it.

#177 Nagraj on 06.21.15 at 4:24 am

clarification for #161 Obvious Truth

What got me goin’ was not Janet Yellen the person. I don’t presume to know a thing about Janet Yellen (other than that she’s even homelier than Greenspan). It was Garth’s mind-blowing accolade that she’s “the most powerful woman in the world” that threw me.
There is of course no such thing. Anymore so than “most powerful man in the world” or “most powerful weasel in the world”.
Garth is a quick writer and what he meant, I dare suppose, is that Yellen holds the most influential office in the world of finance. Which may well be true.
But the way he put it was hilarious, as if he were about to re-issue a new ACTION COMICS issue, perhaps THE NEW BARBARELLA which is why Jane Fonda was so pissed off . . .

[Note that I myself did not raise any gender issues – but since you invoked “old school Brooklyn baller” (what sports stadiums do you hang out at?) . . . You don’t suppose she could be a midget Jenner type?]

Tolstoy went to some lengths to point out that Napoleon was the crest of the wave – not the wave. The Janet Yellen story is still under construction.

Able as I ere I saw Elba.

#178 Nagraj on 06.21.15 at 4:26 am

typo
it’s: Able was I ere I saw Elba

#179 Steve French on 06.21.15 at 8:02 am

DELETED (drunken posting)

#180 jess on 06.21.15 at 8:32 am

#170 crowdedelevatorfartz on 06.20.15 at 11:31 pm

Beware of monkey’s with sharp darts. Especially when the “skilled” are replaced by algo’s — increasing the population in need of a cull.

#181 Herb on 06.21.15 at 9:01 am

Gee, I thought I heard something on my right, but it was only a smell.

Ah, crowdedelevatorfatz at #173!

#182 Dee on 06.21.15 at 9:12 am

#142 TurnerNation

That pub’s pretty great. As soon as the GO hour ends it’s basically about half folks in work clothes from the surrounding industrial area and half east enders (like me) avoiding the downtown crowd.

Great patio, as long as the poop fog from the Coxwell sewage plant isn’t rolling in.

I try not to talk about it too loud. Don’t want the Distillery crowd spreading southeast.

#183 Llewelyn on 06.21.15 at 9:18 am

To Crowdedwhatever

“too stupid to realize why they are poor” Really this is your response to the working poor in Canada.

Wake up and smell the future for hundreds of thousands of Canadians employed in sectors of the economy that are contracting. Imagine what might happen in General Motors and other employers in the auto sector trot off to foreign lands.

Check out the value of student loans these days and how many of these loans the Government of Canada had had to write off (hundreds of million by the way) because the students could not find a job paying enough to meet their debt obligations.

We a now looking at a world where hard work and a good education guaranteed a well paid job in our rearview mirror.

You may have reached your destination but try and show a little concern for those who are just starting out.

#184 Honey Dripper on 06.21.15 at 9:26 am

Happy Fathers Day!

#185 LP on 06.21.15 at 10:02 am

#170 crowdedelevatorfartz on 06.20.15 at 11:31 pm

Your response to another poster seems to illustrate a point made last night at dinner by my son. He said, in reference to the story out of S. Caroline this week, that nowadays no-one “mildly disapproves” anymore or even slightly angry.

No, nowadays anger escalates immediately to outrage, to blind vengeance, and ultimately in some cases to what we saw with the Roof person.

Many posters on this blog write (anonymously to be sure, so perhaps it’s just posturing) in that vein just as you seemed to do late last night. You might to dial it back just a tad.

#186 JimH on 06.21.15 at 10:03 am

Mark, for the benefit of other honest, genuine, enquiring, readers and posters with integrity, my allusion to Stephen Hawking’s famous remark the other day is worth repeating.

“It’s not ignorance that is the greatest enemy of knowlege and understanding; the greatest enemy is the illusion of knowlege.”

Some people just know what they know; some people are aware of how much they don’t know; and then there’s folks like you who have absolutely no idea just how much they don’t know, but just the same pose as one with encyclopedic knowlege and deep understanding.

Like the emperor who had no clothes, you’ve been pretty well disrobed here as a charlatan-poseur, an unrepentant fraud and a shameless and compulsive liar.

I suggest all readers take your posts with a large grain of salt and do their own research.

#187 LP on 06.21.15 at 10:04 am

Of course, in my judgement of you, I made grammar errors.

Should be, IS even slightly angry; and, might WANT to dial it back…

#188 Ganondorf Rules on 06.21.15 at 10:10 am

Taxes and Income Spliting cont’d

1. Shift taxation within your life.
This is easy. During years when you are gainfully employed, contribute to an RRSP, deduct this amount from your taxable income, get a refund and invest that outside your plan. Then during those times of your life when you are fired, laid off, punted, outsourced, severed, displaced, rightsized or just general screwed by The Man, you can cash in the RRSP, live off the money it contains, and pay little if any tax while doing so. What you’ve done is build up your own emergency reserve, and at the same time shifted the tax burden from the years of employment to the period of freedom.

2. Split income with your spouse
Now, here’s an excellent use for your spouse. If you earn more than him or her, or your spouse plans on taking time off, or is older and due to retire sooner, or a babe still in school, then open a spousal plan. The law allows you to contribute into a plan for your spouse up to your own contribution limit. You get to deduct the funds from your own taxable income, but they become the property of the other person. After three years in there, the money can be accessed by your spouse (so choose carefully) and used for whatever, and is taxed at their rate – presumably lower than your. So, you have income-split. Just be careful no money is taken before the three years or it will be attributed back to you, and cause a giant, ugly domestic dispute.

3. Finance a kid
Speaking of a spousal plan, one of the best uses of RRSP money is to pay the household expenses during a mat leave. If a spousal plan is in place, your squeeze can cash it in (ensure each withdrawal is less than $5,000 to minimize the withholding tax), and use the money to replace lost income. Of course, to make this work efficiently, you will need to plan the pregnancy at least three years in advance with the mat leave commencing on January 1st. Piece of cake. Here’s a calendar.

4. Upgrade your skills.
Rules also permit you to raid your RRSP to go to school, or send your spouse there. The Lifelong Learning Plan allows $10,000 a year to be taken, to a max of twenty grand (or forty between two spouses). Then, after school’s done, you have 10 years to put the money back into your plan. If you don’t, it will be added to your taxable income annually. This sure beats paying a bank interest on a tuition loan. Plus, you can put money into your RSP, get a tax refund for doing so, then turn around and take it out for school.

5. Buy a house (dubious), and lever your downpayment (better).
Ditto for the Homebuyers’s Plan. Up to $50,000 can be taken from the RRSPs of you and your spouse for the purpose of buying your first home. Then you have 15 years to repay it, starting in the second year after the withdrawal. Don’t make the annual payments, and the bucks will be added to your income and taxed at your marginal rate. While buying a home is a bad idea right now in many cities, and while the HBP actually has no inherent benefit to it, it does allow you to lever a bit. For example, if you both took your $50,000 down payment and RRSP’d it, leaving it there for just 90 days, you might get a refund of $15,000 which can be used at closing to reduce the mortgage. But, knowing you, it’d go into a hot tub upgrade.

6. Generate a tax refund which you promise not to piss away in Aruba.
That should be obvious. Invest extra cash in an RRSP, get a refund cheque and put the money into investments inside your TFSA. This is called revenge. It tastes good.

Bonus thing to do with an RRSP: retire.
Yes, I know this is exactly why the thing was invented 60 years ago, and I’m quite aware the mama of all retirement crises is now just a few years away, since seven in ten people no longer have a viable company pension. But the TFSA is emerging for anyone under 35 as the retirement vehicle of choice – so long as you keep it fully funded each year, and invested for growth. Still, there is a role for RRSPs, since money can grow inside these suckers tax-free until you turn into a hideous wrinkly with glass ankles. Then you can bitch and moan about the tax you pay collapsing them.

Here is the source of your posting. — Garth

#189 Godth on 06.21.15 at 10:15 am

#170 crowdedelevatorfartz on 06.20.15 at 11:31 pm

What to do with the stupid people superior one? Should we bring back eugenics? We could send them for an elevator ride with you? Maybe we should set up reserves and make them wards of the state?
Dear Canada: First nations don’t want to be wards of the state
http://www.theglobeandmail.com/globe-debate/dear-canada-first-nations-dont-want-to-be-wards-of-the-state/article7028879/

#190 crowdedelevatorfartz on 06.21.15 at 10:44 am

@#183 Llewwellian

So now under utilized university graduates are the new “working poor”?
Well. Like many other life choices such as “procreation” ,these students chose the subjects to study. Regardless of whether there were actual jobs waiting for them after graduation or not.
And we are supposed to raise the minimum wage to inflation cringing levels to help them pay off their loans? To “raise them out of poverty’?
Sorry, but some people couldnt keep a piggy bank full of nickels even if their parents were feeding them, clothing them, and sheltering them for free…..
Even after the aforementioned “education” . They have the financial acumen of a Gnu about to be hit over the head with a brick. Which is to say, a wide eyed ignorance of all things financial.
Do I feel sorry for them?
Perhaps, in a sad , head shaking, migraine induced, sort of way. Because they will never, ever learn how to manage their money no matter how much they are paid….
But even minimum wage types gotta have their cell phones in one hand and their $5 Starbucks in another as they wander off to the tattoo shop for another AWESOME $500 “tat”.
Because unaffordable baubles and trinkets are a “right”….
Perhaps thats why record numbers of Canadians are drowning in record levels of debt

#191 crowdedelevatorfartz on 06.21.15 at 10:46 am

@#189 Godth

ladies and gentlemen.

God hath spoken.

And he lisps.

#192 I'm stupid on 06.21.15 at 11:00 am

Most people are where they are in life because they deserve to be there. I’ve created jobs and helped people that worked for me to start their own businesses. I’ve had some real losers work for me and some real winners. I get satisfaction from watching a 20 years old kid become a responsible man, and enjoy a nice life. I could have been really wealthy in life if I was an asshole but I’m just not built that way.

I’ve worked for minimum wage in my life. That’s how I paid for school. I’ll tell you that those days where tough but some of the happiest in my life. When you have no money it forces you to be creative. It builds character and motivates you. The only thing increasing minimum wage does is increase the startup costs for businesses. The first few years of any business are the toughest and that’s when they usually fail. If you’re 40 working for minimum wage the only person to blame for it is you, unless you have a disability. You wanted to float threw life and expected things to work out and now you have zero employable skills and a terrible work ethic and you think you deserve a million dollar home and 2 Ferraris in the drive way? Well good luck with that!

#193 devore on 06.21.15 at 11:01 am

#147 New guy

Right, and rents never go up in vancouver right GT.
Like form $850 -$2200 after renovictions 9 months later ?

The price changes because it is a new, more valuable product. If the price is too high, find something cheaper. When rate goes up and your mortgage increases, there is no new value for you, just higher payments.

BTW, 5+ years in, and still no rent increase, a decrease actually. Because professional landlords know when they have a good tenant, not like amateurs who pull numbers out of their ass in a panic to try to cover their costs.

#194 crowdedelevatorfartz on 06.21.15 at 11:07 am

@#185 LP
“Your response to another poster seems to illustrate a point made last night at dinner by my son. He said, in reference to the story out of S. Caroline this week, that nowadays no-one “mildly disapproves” anymore or even slightly angry.

No, nowadays anger escalates immediately to outrage, to blind vengeance, and ultimately in some cases to what we saw with the Roof person. ”
++++++++++++++++++++++++++++++++++++

Sorry that I dont “buy in” to the niceties of the new millenia and the politically correct way to tell people that are raising a family on minimum wage that they are ….well….. stupid.
Perhaps I shouldnt have “escalated” my diatribe and I should have said, ” they were mercifully devoid of the ravages of intelligence and were lacking in all the basic skills needed to make even the most simplest of financial decisions”………..
Nah, while “stupid” is a tad cruder….it makes the point .

As for comparing my “rant” to an insane loser gunman who slaughtered innocent people?????

Who’s “escalating” now? Thats quite a segway.
Take a look in the mirror

#195 crowdedelevatorfartz on 06.21.15 at 11:15 am

@#181 Herb
excellent re-butt-al.

#196 SWL1976 on 06.21.15 at 11:29 am

Mr Elevator,

Funny how you can easily spot ignorance in others, yet fail to see your own

Who among us is not the same? Don’t be insufferable. — Garth

#197 S.Bby on 06.21.15 at 11:45 am

#73 Henry on 06.19.15 at 11:03 pm
“Don’t be a renter!”

That was sponsored by Tangerine bank. What do you think they would pay for a pro-renting article?

#198 saskatoon on 06.21.15 at 11:54 am

DELETED (Ad hominem)

#199 gut check on 06.21.15 at 12:00 pm

I ran a small business (a car wash) and I chose to pay my employees a little more than minimum wage, plus tips.

I made money.
Yes.. I could have made a wee bit more if I had have taken more from them, but I chose not to.

It can be done.

put that in your ego-pipes and smoke it.

#200 SWL1976 on 06.21.15 at 12:01 pm

Who among us is not the same? — Garth

Lots of people I know, and no that does not make me, them, or anyone better than another.

More of the same will not bring about positive change

#201 crowdedelevatorfartz on 06.21.15 at 12:21 pm

@#196 SWL1976
Ignorance isnt stupidity.

Stupidity is lack of intelligence.

Ignorance is lack of an education.

Although, ironically enough, an “educated” person can also be stupid.
Hence the propensity for people to take out prohibitive student “loans” for such financially astute educational “experiments’ in fiscal naivity such 1st year psychology or English Lit.
Perhaps, night school is the answer.
A coworker of mine in her late 50’s who hates her job( which consists of answering the phone once an hour and playing Candy Crush until the clock stikes 5) took my advice to “take a course” has decided between 2 intellectually stimulating endeavors…… “Wedding Planner”(6 months and $2500 later) or “Traffic Management”(Stop! Go!).
Both highly skilled jobs deserving much more than the pittance they are paid… im sure……
But as the old saying goes.
Ignorance is bliss
And then you retire to the poor house because you were took lazy to do anything about your lot in life.
And it’s the govt or “big business’s” fault……
Dont wait for the govt to raise minimum wage.
Crappy pay is the incentive to change.

#202 Rainclouds on 06.21.15 at 12:30 pm

Here in the B.P.O.E. Just finished a 3 week stint working for minimum wage. it was interesting to observe the dynamic.

10 hired in a cattle call from a craigslist ad with a stated promise this would lead to longer term employment for some. 2 retired dudes (me). 8 Bright outgoing students, 1st or 2nd year UNI, even gender mix

Based on my 40+yrs of employment the job was clean, not demanding, good hours, close to mass transit, respectful management.A potential career path for advancement in a large multi disciplined corporation was obvious AND available.

Overtime at 1.5x was plentiful but not worked by most.

At the end, as promised, a few of us were asked if we wanted to continue employment. Only one young man availed himself of the opportunity.

As far as I can tell nothing has changed in 40 years. Good employees are valued, will succeed, AND advance.

Speaks volumes

#203 Nemesis on 06.21.15 at 12:38 pm

#SuperiorJobSatisfaction,Or… #SpotTheDifference…

#EmployeeA…

http://youtu.be/cSv4IkB5tiQ

#VersusEmployeeB…

http://youtu.be/749iU2Zv1kw

#204 Godth on 06.21.15 at 12:47 pm

#191 crowdedelevatorfartz on 06.21.15 at 10:46 am

I’m sure your bathroom has a mirror. If you really want to see stupid…
Noam Chomsky on stupid people
https://www.youtube.com/watch?v=olbbhTSwDIk

Of course every bully likes to pick on the vulnerable though.

#205 LLewelyn on 06.21.15 at 12:52 pm

Hey Crowded Maybe its time to step out of that elevator into reality.

Our governments decided to cut their support for Post Secondary education and as a result tuition rates skyrocketed.

My real concern is that children of low income families that wish to improve their lot on life have no choice but to borrow the cost of their post secondary education. No Bank of Mom and Dad for them.

Graduating with a debt of $30,000 and then finding out that jobs in their chosen field have become scarce forces them to accept lower paying jobs just to survive.

Our governments cannot afford to ignore the simple fact that tens of thousands of Canadian citizens are finding it increasingly difficult to retire their student loans. Can mortgages be very far behind.

I realize that many children of parents with wealth feel that they are smarter than children of lower income parents but that just isn’t so.

Equating the financial position of Canadians to intelligence is probably the most elitist nonsense I have read on this blog.

#206 4 AM Sunrise on 06.21.15 at 1:56 pm

#201 crowdedelevatorfartz on 06.21.15 at 12:21 pm

took my advice to “take a course” has decided between 2 intellectually stimulating endeavors…… “Wedding Planner”(6 months and $2500 later) or “Traffic Management”(Stop! Go!).

The “wedding planner” course is a scam. The customer doesn’t care whether the planner has taken a course or not as long as he/she is awesome. Lucrative field, though, if you’re willing to hustle.

As for traffic management – is that, like, a flag person? Has credentialism taken over that field, too, that you can’t get that job without the course? Way back when I was in high school, I overheard people talking about how flagging is easy money at $18 or $21/h. It’s all danger pay, of course.

#207 crowdedelevatorfartz on 06.21.15 at 2:02 pm

@#205 Orwellian
“Equating the financial position of Canadians to intelligence is probably the most elitist nonsense I have read on this blog….”
++++++++++++++++++++++++++++++++++

Well, going hideously into debt for a degree which is completely useless doesnt seem overly “intelligent” to me….but thats just me.

Perhaps your socialist rants would be better served elsewhere?

“Our governments cannot afford to ignore the simple fact that tens of thousands of Canadian citizens are finding it increasingly difficult to retire their student loans. Can mortgages be very far behind. …”

Since when is it the govts responsibility to save fools(insert mortgaged homeowners or student loans here) and their bad financial decisions from themselves.

Caveat emptor.

YOU made the decision to borrow money unwisely. Its no one’s fault but yours. Live with it.

Dont blame the govt for your fiscal ineptitude.
It wont get you anywhere.
Or is reality too “elitist” for your sensitive indebted soul.

#208 crowdedelevatorfartz on 06.21.15 at 2:10 pm

@#204 Godth
Thanks for the link. I’ll use that narrative at some other time.

@#206 4am
“flag person”
Yep. another ridiculous govt regulation foisted upon us by litigation lawyers.
Flag peoples just gots ta have a diploma now days.
And those ‘flags” are now referred to as “paddles”.
I particularly like the ones with “Slow” written on them.
It usually describes the I.Q. of the paddle holder.
And judging from years of traffic gridlock observations…….I dont think their union has a dental plan because the majority seem to have more feet than teeth????

#209 45north on 06.21.15 at 2:52 pm

Garth: don’t let the bastards get you down

Washed Up Lawyer: the Argos open their season next Saturday in Fort McMurray I thought you were kidding! nope:

http://www.cbc.ca/sports/football/cfl/argos-play-2015-cfl-home-opener-in-fort-mcmurray-alta-1.2957039

John: You know, granite wasn’t a kitchen counter and each home had one black phone on the wall

“a long time ago in a galaxy far, far away”
https://en.wikipedia.org/wiki/Star_Wars_opening_crawl

Hancock: Garth’s reply: Vancouver real estate is an over-priced tower of risk

that’s the message, Garth is paying the price to preach it. That is to speak truth to the powerless.

Llewelyn: We a now looking at a world where hard work and a good education guaranteed a well paid job in our rearview mirror.

you’re right. Not completely right but mostly right.

Jim H: It’s not ignorance that is the greatest enemy of knowlege and understanding; the greatest enemy is the illusion of knowledge.

good one!

Rainclouds: Good employees are valued, will succeed, AND advance.

another good comment

#210 triplenet on 06.21.15 at 6:05 pm

#208 Farter

We employ traffic control persons for our road building division and ICI work.
Go ahead and laugh – however I highly doubt you could submit, organize and execute a traffic plan on any village road let alone a six lane 401 highway intersection at rush hour.
You may qualify at a rural road cattle crossing. Teeth and feet? …..alright I’ll give you that. But you still don’t qualify. Honk honk.

#211 maxx on 06.21.15 at 6:23 pm

#4 GH on 06.19.15 at 6:28 pm

Opinion: Call this what it is: tax evasion

http://www.vancouversun.com/news/Opinion+Call+this+what+evasion/11141340/story.html

“To permit foreign nationals to acquire permanent resident status for themselves and their dependents without becoming resident for income tax purposes for the duration of their PR status is an abomination. It creates an attachment disorder for those who would obtain all of the benefits of Canadian residence and a pathway to precious citizenship for themselves and/or their dependents without their assuming any responsibility to contribute their fair share, based on their worldwide income as all resident Canadians are legally required to do.”

Opinion: As egregious as this debacle is, it shouldn’t really come as a surprise given that government can’t even effectively manage Senate expenses….and long, drawn-out effete attempts at justice simply add insult to injury.

The people of Canada have a right to demand that Canada’s accounts be managed correctly and effectively. Always. They are, after all, paying for this service.

And dearly I might add.

It is not tax evasion. — Garth

#212 triplenet on 06.21.15 at 6:35 pm

So 8% mortgage interest rates are on their way. If that is what you are obtusely indicating.
What will automobile interest rates be.
Chrysler and the stage coach bank have cooked up a car scam not totally different from the BC Credit Union shenanigan’s.
Factor in all levels of government debt.
This will drive all capital valuations downward. Perhaps even wages of course.
Real investment real estate capitalization rates will soar – you know, reversion to the mean. Try valuing your holdings with an overall rate of 10-12% cap. Perhaps not the $500M shopping center or bank head office but 99% of income producing properties will suffer – probably worse than residential valuations.
Nova Scotia and Tofino real estate values will trend more toward the negative. Like before. Reversion repeats….. Ouch!
But if mom and dad can achieve a match funded interest rate on low risk savings….sucks to be you or I. What will we do.
Ever flagged Garth?

Who ever mentioned 8% mortgages? — Garth

#213 maxx on 06.21.15 at 7:55 pm

Lost together….that is the tragedy.
Those who aren’t are drowning in a sea of idiots.

#214 crowdedelevatorfartz on 06.21.15 at 9:00 pm

@#210 Triplenet

“You may qualify at a rural road cattle crossing. Teeth and feet? …..alright I’ll give you that. But you still don’t qualify. Honk honk.”
++++++++++++++++++++++++++++++++++

good one!

Yeah, I must admit. Setting up a safe road crew on the 401 would be beyond my toothless, smelly footed, flatulence induced capabilities.

I was thinking more along the lines of a typical , cigarette dangling, surly roadie, ready to whack the side of a car in a PMS induced “road rage” with those metal “paddles” (I’ve seen it several times).

But this is Vancouver where Yoga almost creates road work……

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=4&cad=rja&uact=8&ved=0CC4QqQIwAw&url=http%3A%2F%2Fwww.straight.com%2Fblogra%2F475236%2Fyou-can-still-do-yoga-today-just-not-middle-burrard-bridge&ei=_F2HVeO_GYbuoAS0-Yi4Ag&usg=AFQjCNGIXz4zkzeL5l03NoqV5WqBlxrQtg&bvm=bv.96339352,d.cGU

#215 triplenet on 06.21.15 at 10:58 pm

#214 crowdedelevatorfartz

Now that was funny. Thank you.
…and I’ll add to that. I get the humorous opportunity to listen to the stories of the PMS fuelled – you know – and with the exception of a little hyperbole, or not, you’re not far off. Don’t pick a fight with them.
Just laugh.
PS – they know how to control the Lexus drivers in Van. They’re mean.

#216 Victoria Real Estate Update on 06.22.15 at 3:19 am

. . . . . . . . .Single Family Home Prices. . . . . . . . . .
. . . . . . . . . . . . . . Oak Bay. . . . . . . . . . . . . . . .
. . . . . . . . (Percent Below 2010 Peak). . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0%. . . * . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-7%. . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . .
-8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11%. . . . . . . . . . . . . . . *. . . . . . * . . . . . . . .
-12%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-13%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-14%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-15%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . .
———————————————————————————-
. . .March 10. . Dec.10. . Dec.11. . Dec.12. . Dec.13

#217 Kreditanstalt on 06.22.15 at 8:07 am

“Gold thrives on inflation, and there’s little.”

If you open wider, you may be able to get that other foot in too.

“No inflation”????

Try: beef prices, food prices in general, house prices, college tuition, medical care costs, taxes, energy costs, stock prices, bond prices, artwork and…bond YIELDS.

About the only thing that is (artificially) depressed in price is…GOLD.

#218 Food for Thought on 06.22.15 at 12:51 pm

Hi Garth,

Hopefully you get to read this. A thought occurred to me the other day, as I have not been a big believer in your opinion that Chinese (and other offshore) buying is not having a significant impact on the market. While there are certainly more important factors – primarily interest rates – I do believe that Chinese buyers have more impact on the market than you currently believe.

One of your main arguments is that offshore buyers account for only ~3% of the market. While this is indisputable, your other comment that only ~3% of the total real estate float changes hands every year got me thinking:

Considering that most of the offshore money has flowed in over the past decade, and more specifically over the past 5 years, their 3% hold on the market actually has much more impact than you believe. If only 3% of houses change hands per year, and offshore buyers have accumulated 3% of the TOTAL market, they account for 100% of the houses sold in 1 year or 20% of all houses sold in 5 years.

I believe the 20% number is more consistent with what people in the market are actually experiencing. This is why there is such a disconnect between what people are actually experiencing and what your numbers are telling you.

Hopefully this gives you some food for thought Garth!

Best regards,

-James