It only looks big

BIG DOG modified

Imagine going to the bank. But it’s closed. You try the ATM. It’s empty. That’s the deal in Greece today. Every bank is shuttered, and could stay that way for a week. By Saturday morning 500 of the country’s 7,000 ATMs were out of cash. Twenty-four hours later, half of them were dry. Credit has evaporated. The central bank doesn’t have the money to support the commercial banks. It’s a mess.

(In fact overnight Sunday capital controls were imposed. No citizen can withdraw more than $66 a day.)

None of this is a big surprise after the country’s new socialist government bolted form last-minute rescue talks two days ago. Last week it looked almost certain Europe’s biggest deadbeat debtor nation would agree to reforms lenders were insisting on, so stock markets rallied. But that was a sucker punch, and now Monday could be ugly.

Kicking leadership to the curb, the crew in Athens is opting for a public referendum on the bailout, set for next Sunday. In the meantime, out of money and pickled in debt, the country will spiral and decay for a week. Depending what the vote yields, it could be kicked out of the Euro zone, default on a mountain of debt, or self-destruct.

By the way, here is what Greeks will be voting on next week – a complex, inter-connected series of reforms that would goose the existing 23% GST, increase personal and corporate income taxes, delay retirements and crack down on tax evasion. Plus lots more. So, a government elected because it promised it could end austerity measures and tell Europe to get stuffed, now looks more like Twitter. Will the Greeks vote for more tax and greater penury? Don’t hold your breath.

The banks are shut on the assumption that Monday (one day after the European Central Bank turned off the tap) there’d be a giant run as citizens clamour for cash. There are caps on ATM withdrawals, as well. And the stock market is dark. The country therefore moves rapidly towards an irreversible financial and economic meltdown. Complete default could happen on Tuesday, if the country misses a multi-billion debt payment – which it will if no more credit is extended.

So what does all this mean to us? Should you be freaking out, too, running to the closest banking machine, selling your ETFs or buying gold?

Nah. Don’t think so. Expect volatility until July 5th is over, but it’s highly unlikely a country crash will send shock waves rippling through the world. For starters, Greece is old. This has been going on for years, and markets long ago priced in an economic and fiscal collapse, along with the potential damage to Europe as a whole. While Spain, Portugal and Italy are also dogs when it comes to living within their means and fostering economic growth, nobody seriously expects some virulent form of contagion to develop.

And Greece is tiny. Just eleven million people and an economy less than half that of Ontario. This is a mere whizz in the Eurozone bucket, which at $18.5 trillion is the second-largest in the world. The trouble with the current Greek government, in fact, is that it thinks it matters.

Well, the point is that you should never, ever read doomer web sites which today are calling for a Holocaust-like apocalyptic Armageddon which will, a la Lehman, lead quickly to nations falling like dominoes, a systemic financial collapse, banking crisis and bail-ins which end up confiscating your wealth. But this is not on.

Of course, the weekend collapse could mean stock market volatility, especially as short-term investors move to protect the stretched positions they took last week. Between now and next Sunday some big swings are likely to occur – meaningless moves for anyone building wealth for retirement, their kids’ education or the rest of their lives.

Still on track is American expansion, higher interest rates this autumn and an unhappy spring real estate market. The best way to deal with change you cannot control – like the political nutbars now driving Greece into the sea – is to have a balanced and globally-diversified portfolio. When stocks swoon, money rushes into fixed income and plumps that part of your portfolio. When euro equities (which have been greater performers this year) stumble, you have lots of exposure to the bustling US economy. Meanwhile real estate trusts continue to churn out distributions and your preferreds pay you 5% with a big tax break just to own them.

Hey, it’s also summer. Canada Day. Beer ‘n babes. BBQs, bikes and the beach.

Who’s got time to panic? Silly doomers.

204 comments ↓

#1 Mike T. on 06.28.15 at 3:36 pm

Greece is small but the people in Spain, Portugal, and Italy will be taught a valuable lesson

Ireland made good on their bailout promises I think, what message does this send them?

And then there are the Germans holding all the debt

It’ll look like nothing…contained, priced in, planned for

The NWO is when Ron Paul is president…..just so you know

#2 Robbie on 06.28.15 at 3:38 pm

Heading to one of the local lakes (southern Gulf Islands) and will swim and float in my tube. Time to relax and forget about the housing market, the economy and all the doom and gloomers.

#3 Godth on 06.28.15 at 3:55 pm

If Greece is so small and insignificant why didn’t the Troika write off it’s debts that were clearly unpayable from the start? Why club the Greeks like baby seals instead? As you said the shenanigans started long before Syriza was elected, Goldman Sachs diddled the books to get Greece into the Euro. to begin with.

I don’t think this is the end of the world but I wouldn’t minimize it either. The markets priced it in by moving the risk from private lenders to the general (EU) public. Quelle Surprise!

Of course this is just the beginning of something more widespread – Portugal, Spain, Italy and France will be in line for never ending talks. Unpayable debt is just that. The debts are the contagion, neoliberalism and austerity are completely irrational (but authoritarian, which you clearly like- control, control, control) responses. It’s a recipe for nationalist type disasters that aren’t necessary. Would you prefer the Golden Dawn was in power? That’s what you’re asking for in various countries in the EU. Syriza are actually moderates by historic definitions, the status quo is now very radical. Bankruptcies are part of Capitalism, live by the sword…but we just want flowers thrown at our feet when we lose these days though.

#4 Vancouver Landlord on 06.28.15 at 3:57 pm

Garth, come and visit us some time in Vancouver. It’s truly is a paradise on Earth!
https://youtu.be/0JpSCQUe9_k

#5 Tommy Douglas on 06.28.15 at 3:58 pm

“Hey, it’s also summer. Canada Day. Beer ‘n babes. BBQs, bikes and the beach.”

Amen

#6 Blacksheep on 06.28.15 at 4:02 pm

“– like the political nutbars now driving Greece into the sea – Garth”
———————————————
I hope the people of Greece, stand up give the IMF, the middle finger salute.

The reason the pigs got in trouble to begin with was a lack of consequences for bad financial behaviour, this shared currency idea was doomed from the very start.

There will of course be, financial pain for a few years, (hey they made the mess) but it’s better than being enslaved for generations.

The sooner Greece reclaims it’s right a sovereign currency issuer, the better.

#7 Panhead on 06.28.15 at 4:05 pm

Gotta like it … get to see the Tsawwassen Canada day celebration on Wednesday and the Fourth of July Independance day parade in Point Roberts with our American friends and neighbours … dab-on.

#8 Blacksheep on 06.28.15 at 4:07 pm

“as” a sovereign currency issuer.

#9 Tudor on 06.28.15 at 4:12 pm

I tend to agree with Krugman that not only is a referendum a good idea, but that austerity is foolish under these circumstances:
http://krugman.blogs.nytimes.com/2015/06/27/europes-moment-of-truth/?smid=tw-share

#10 gladiator on 06.28.15 at 4:13 pm

Garth, if a mere company’s collapse wreaked such havoc on the world economy and markets, why wouldn’t a country’s collapse cause as much damage, if not more?
Just like in 2007, the markets are overpriced, there is significant exuberance in margin borrowing and IPO markets, but, unlike then, the rates are already low, so there is no dry powder to contain a collapse, if it happens.
Even a small fuse can explode a big bomb, so little Greece might matter, after all. We’ll see…

#11 Sean on 06.28.15 at 4:15 pm

Great blog, but this type of optimistic posts is missing the mark.
If there is no serious impact, why all the meetings and 24×7 coverage of the unimportant Greece?

How about that 20% drop in China stock prices last week?

There is no American expansion, by the way. The Fed is desperate and full of it, it’s pathetic…

#12 Mukadi on 06.28.15 at 4:16 pm

To be honest, what we see in Europe is a simple circus.
No sane person can expect Greece to pay back $370billion when its GDP has being declining at the speed of light since 2010.

There is only one way out for them – default and exit the Euro, Europe and the NATO and become an independent, debt free country again. A country without a sovereign currency is a de facto vassal state.

As far as the worldwide implications are concerned, I see financial markets fluctuations for a couple of days and that’s all.

The biggest impact would be a geopolitical tectonic shift and that’s what keeps Berlin and Paris asleep. Greek can lease military bases to China and Russia and then joins the BRICS bank and the SCO.

#13 David on 06.28.15 at 4:16 pm

Considering the IMF admitted it underestimated the negative impact of austerity on the Greek economy I can hardly blame the Greeks for being increasingly resistant to further calls for it.

For the non-Bloomberg version of what’s going on read Krugman:
http://krugman.blogs.nytimes.com/2015/06/25/breaking-greece/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body

Or Simon Wren-Lewis:
http://mainlymacro.blogspot.ca/2015/06/the-eurozones-cover-up-over-greece.html

I’ll await the inevitable charges of communism.

#14 Leo Trollstoy on 06.28.15 at 4:22 pm

It’s like 1979 Argentina all over again.

#15 Leo Trollstoy on 06.28.15 at 4:23 pm

It’s like 2002 Argentina all over again.

#16 xausted on 06.28.15 at 4:26 pm

US rates have to go up, not because of a robust recovery, but because of the need to stop the carnage in fixed income investment portfolios of the big insurance companies and pension funds. They would also like to have something in the tank for the next recession. Recovery or not, rates are going up in the US.

Ben Bernanke in 2007 – “subprime is contained”. Best. Quote. Ever.

Things are pretty spring loaded in the markets. We have firm stop losses put in place to try and get us into cash before everyone else hits the exits. Timing is anyone’s guess; could be years yet. ALWAYS HAVE A PLAN TO GO TO CASH, and any advisor who cannot lay out a clear plan should be dumped.

Dean Del Mastro doing the perp walk was pretty satisfying, I must say. He committed a crime against every WWII vet who died defending democracy. Anyone defending him is just as bad.

#17 Victoria Real Estate Update on 06.28.15 at 4:26 pm

This fall, 5-year fixed mortgage rates in Canada will start moving higher.

This will happen even though the BoC will not begin to raise its rate this fall.

As rates rise, house prices fall.

Canada’s enormous housing bubble will deflate.

It would be easy to argue that, overall, there is no housing bubble in the US. In general, house prices there are supported by economic fundamentals.

Incomes in Canada and the US are similar. House prices should be approximately equal.

The end of emergency interest rates in Canada will result in years of falling house prices as Canada’s bubble deflates.

Taking a look at examples of houses for sale in the US makes it obvious that house prices across Canada are deep in bubble territory.

Arizona:

$94 K, Coolidge, AZ (Phoenix) (3 beds, 2.5 baths, 2,040 sq. ft., built in 2005, attached double garage)

$125 K, Casa Grande, AZ (Phoenix) (3 beds, 2 baths, 1,848 sq. ft., built in 2007, attached double garage)

Florida:

$127 K, Jacksonville, FL (4 beds, 2 baths, 1,922 sq. ft., built in 2007, attached double garage)

$134 K, Jacksonville, FL (4 beds, 2 baths, 1,862 sq. ft., new home, attached double garage)

#18 Silly Doomer on 06.28.15 at 4:27 pm

Told you to Sell in May and go fishing.
I did.

#19 Larf on 06.28.15 at 4:27 pm

Huge fan Garth, but gosh sometimes you go waaaayyyy too far right. Here’s an article for anyone interested in the reality of the situation socially rather than just “hurr durr lazy Greeks”

http://www.independent.ie/opinion/columnists/gene-kerrigan/soapbox-greeks-beware-of-adults-in-the-room-31335068.html

#20 Leo Trollstoy on 06.28.15 at 4:29 pm

And Greece is tiny. Just eleven million people and an economy less than half that of Ontario. This is a mere whizz in the Eurozone bucket…

^ This.

Greece is irrelevant. It’s just media fodder of the month.

#21 Silly Doomer on 06.28.15 at 4:31 pm

I wonder how much a Greek island like Paros would go for these days?
One could probably trade an average Vancouver house for it.
Lovely place, though.
Had my honeymoon there.

#22 Leo Trollstoy on 06.28.15 at 4:32 pm

Once they see what happens to Greece, Spain/Portugal/Italy won’t be so keen on commiting financial suicide.

#23 Like Mionded on 06.28.15 at 4:33 pm

#125 Smoking Man on 06.27.15 at 6:21 pm

The meaning of life:

We are plopped out on our birthday. We are bar coded with a birth certificate.
It indicates what country owns your labour.

You go to school, you’re natural instincts to hunt are suppressed, natural thought replaced with obedience training.

You start a job, a career, your goal. Get that precious pat on the head for some meaningless thing you did. They through you a crumb, but your teachers taught you crumbs are good.

My only point, if your going to do this dance.
Do it in the sunshine…
California here I come. Just one more interviewer I got to bullshit.

Dr Smoking Man
PhD Herdonomics

——————
you need a visa or some sorts – you don’t just show up.

#24 tkid on 06.28.15 at 4:35 pm

Steve French – if you can’t do anything right, and this is since you put your foot down and decided not to buy real estate (dis be a guess as dis be a real estate blog) or since decision X, what she’s doing is attempting to bully you into changing your mind.

Ditch her. You and her are supposed to be a partnership. Misery ain’t supposed to be one of the facets of a partnership.

If, on the other hand, no major decisions were made recently and things should be smooth sailing, then get her into a hospital. There might be a medical reason why she’s irrational. Do NOT suggest this to her, get her parents to do this for you.

#25 family beagle on 06.28.15 at 4:39 pm

My kid is in Santorini as you write. Apparently, the turtles are migrating. He sent a gopro vid showing hundreds clamoring in the town square. He’s on a 3 month tour, starting in Portugal a month ago, will end in Ireland in August. He’s not expressed any concerns at street level. Though he had difficulty with transit strikes in Italy. Excited he gets to witness some history, slightly anxious parents. He’s an electrician with a break between school and work. Btw, he’s 20 with a maxed rrsp, tfsa, school paid by work, rents from us. That Next generation is savvy, Mr. T.

#26 Freedom First on 06.28.15 at 4:43 pm

Yes. Greece is small. So is Canada. Greece has the EU and Canada has the CMHC. No need to panic, as I always put my own personal Freedom First. After all, it is my duty to be personally responsible for myself, and, to help others. That is to help, not enable. Big difference. No exception.

#27 Turtle on 06.28.15 at 4:46 pm

#21 Silly Doomer

I wonder how much a Greek island like Paros would go for these days?

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

I thought about the same thing. If you have no money – you have to sell something to get money. Sell one of your favorite islands… put it on auction… China and Russia will be happy to pay off your debt… or portion of it.

#28 North Burnaby on 06.28.15 at 4:52 pm

Rent cost rose 22% in Vancouver https://youtu.be/FpoTGCiVjww

#29 Godth on 06.28.15 at 4:55 pm

#22 Leo Trollstoy on 06.28.15 at 4:32 pm

Yeah because being bludgeoned to death trying to pay back the unpayable is so much fun. Maybe the people that took the risk should suffer the consequences. Unthinkable!

#30 Debtfree on 06.28.15 at 4:58 pm

Blacksheep that disconnected thing you speak of isn’t really working out that well for Zimbabwe .

#31 don astill on 06.28.15 at 5:03 pm

Sorry Leo the point is they already have

#32 PR on 06.28.15 at 5:14 pm

No interest hike in those conditions.

#33 dosouth on 06.28.15 at 5:18 pm

…and on a side note, China reduces it’s prime rate, again.

#34 John in Mtl on 06.28.15 at 5:32 pm

G’Day, Garth & Blog Dawgs,

I’m about to make a major move with my money & veer off from conventional bank & CU investment vehicles. I’ve heard that there are Deferred Sales Charges (DSC’s) for some investments, something the CU I deal with NEVER told me about and that you never see mentioned in the investment sales pitch pages. Does anyone here have experience with Desjardins (in Quebec) with respect to this? I’ll give them a call tomorrow and find out the amount of this DSC. I’ve had the portfolios since july 2012 – 3 years, so I expect a DSC of 2-4%. Ouch!

My plan is then to move my TFSA to Tangerine & choose 1 or 2 suitable portfolios & let ’em ZZzzzzzz for a while (min 1 year). At least for the future, I’ll save on Desjardins’s outrageous 2.2% & 2.5% MER’s. CCP (Cdn Couch Potato) seems to think Tangerine is still a good thing for beginner investors, what do you think? For the moment, I’ve no time to tinker with things like TD e-Series & stuff like that.

Part 2 of my plan is to transfer all my RRSP to my employer’s professionally managed pension portfolios. Average 10-20-30 year returns are very good and MER is 0.5%. My employer offers & allows this.

Part 3: this year soon, I’ll be eligible for claiming a pension, the QPP equivalent to CPP. Of course if I claim early, the lifetime payouts are less and the amount gets added to my current income. I also have a DB pension from work which I cannot claim until I retire. The DB pension is reduced by an equivalent amount from QPP at age 65.

Is this a good strategy: for the following 3-4 years, claim the QPP pension and put all of it in the RRSP until max contrib attained, take the tax return & put it in the TFSA also until max contrib attained. From what I’ve calculated (as 1 of many probability scenarios), as long as I can get a min of 5.5% ROI then its worth it. What do you all think? I doubt I’ll get 5.5% from a mix of Tangerine portfolios, given I’m comfy with losing a max of 10-15% of invested capital.

I should add that although I’ve been reading Garth’s blog for about 3 years, I haven’t done anything in line with his suggestions, nor suggestions from you, the readers. I was quite happy with Desjardin’s portfolio returns until this past february so I saw no need to step on the accelerator and start learning more about money matters. Today, different ballgame.

Later on, when I get more seriously financially educated, I’ll start diverting $ into the various portfolio models & investment suggestions I’ve read here (and saved to a file) from Garth & readers.

Any insight appreciated. And, Thank You :)

#35 Linda on 06.28.15 at 5:33 pm

Greece has 11 million people as per Garth’s post & a debt of $370 billion as per one of the comments above. I’d say they are never going to be debt free. I don’t think exiting the Eurozone erases that debt, though I’d also say it is highly unlikely the people holding that debt will ever see even a fraction of it back.

About debt – I’ve always been curious as to how most countries are listed as being in debt for X amount. Who actually ‘owns’ that debt? If China holds USA debt, who holds China’s debt? It seems everyone owes someone. For Greece, the immediate concern of the citizens is how to continue to purchase the necessities of life – I suppose they will barter until banks open for business once again. In the meantime, how are those who are providing goods or services going to deal with any cash they are given? If the banks are closed, do they just stuff it in a mattress or what? They must have a system in place – they can’t have all been evading taxes & getting by all this time just by chance.

#36 Ray Skunk on 06.28.15 at 5:45 pm

Buying opportunity this week perhaps?

Or is there a bigger correction more likely in the fall?

Just invest. If you’re in for more than year or two, when you buy is largely irrelevant. — Garth

#37 MSM-free Zone on 06.28.15 at 5:50 pm

“…..but it’s highly unlikely a country crash will send shock waves rippling through the world……..”
____________________________

Au contraire, in 2008, the U.S. (curiously, a ‘capitalist’ country) did exactly that.

That’s funny. US GDP, $17 trillion. Greece GDP, $320 billion. (And the US did not crash.) — Garth

#38 Bobby on 06.28.15 at 5:51 pm

Maybe there is an important message here for all of the lefties looking at a change in government. Greece is what happens when someone else quits paying.

#39 Incubus on 06.28.15 at 6:02 pm

Must see

http://i.telegraph.co.uk/multimedia/archive/03357/atm_3357366b.jpg

#40 Llewelyn on 06.28.15 at 6:05 pm

Quantitative easing in Europe supported the purchase of billions of dollars on Canadian mortgage bonds at low if not negative interest rates. This was one reason why Canadian mortgage rates declined to historic lows.

If maintaining a firewall against possible contagion in Europe shifts investment priorities one consequence might be a need to increase the rate on bonds issued to support the Canadian housing market. I’m not saying it will happen but I would keep my eye on events as they unfold.

We live in a very interconnected world these days.

#41 Godth on 06.28.15 at 6:06 pm

#35 Linda on 06.28.15 at 5:33 pm

It’s called chaos Linda. The Greeks have been dealing with it to varying degrees for years now. The old are starving and the young are hopelessly unemployed.

Something we can look forward to.

#42 takla on 06.28.15 at 6:09 pm

consensus was there would be a last minite deal and can kicking of debt down the road as always for the greeks.hell it works great for the u.s when they continually come up against their latest debt limite,and have to raise debt ceiling which by the way is quickly approaching again.
My nabour asked me today ‘whats the problem,the IMF banks will just create more money out of nothing and bail the greeks out again,ad it to the tab{of course with added interest}. the cynicism was thick.
All those Canadians in over there heads with mortgage debt can only hope for the same treatment from their banks in the near future.

#43 pinstripe on 06.28.15 at 6:12 pm

It is not a surprise to see how all of this is playing out.

The greeks brought democracy and now the greeks will be able to show the world whether democracy still exists or will the greeks choose to allow the financial manipulation become the business standard in the global economy. The financial manipulators are very aggressive.

the greeks have been manipulated big time to join euro.

I support the referumdum. Let the greeks decide their future.

On a smaller scale in alberta, the global economy manipulators were set to screw Albertans but most of the voters told them enough is ENOUGH. the worst case performance by the alberta ndp will be better than the best case performance by the alberta pc.

QE was a MASSIVE Failure. Why are the policy makers not admitting to their mistake and then move on? these same policy makers are set to further screw the people with the new math. They should be thrown in to jail like the de maestro fellow.

As Canadians we must be aware of the fine print of the “bail in” policy.

I still hold the stories told by my parents and grandparents abouot the dirty thirties. tomarrow I continue withdrawing cash from the bank.

#44 Unhinged Loon on 06.28.15 at 6:16 pm

The Greeks were culturally incapable of supporting a modern money economy.

Which isn’t necessarily bad. They should be allowed to fail so they can return to their lives, making furniture, cheeses and meats, growing olives, selling and trading them in drachmas. The only thing they will sacrifice is the purchasing power of their legacy currency abroad, so fewer vacations in Italy and France. Boo hoo.

Greece and the PIGS need to reform their cultures or face economic obscurity.

#45 Smoking Man on 06.28.15 at 6:18 pm

#23 Like Mionded on 06.28.15 at 4:33 pm.

It’s called a TN visa, 50 Bucks, you get it crossing the border..

Part of Nafta

#46 Obvious Truth on 06.28.15 at 6:23 pm

Nobody leaves the euro zone.

It’s like hotel California. If it wasn’t some countries would have bolted long ago.

Those who thought might makes right here miscalculated.

Nothing changes except debts get renegotiated. US won’t allow it.

Big shots didn’t want to be told what to do even though haircuts were the right move. They likely wanted regime change and embarrassment. Power politics. Why lose political face when you can let the Greeks default and then let creditors deal with them.

I don’t think the government punted. They ran on a platform and are saying we reject the institutions offer. So let’s guage the mood of the people. Not that dissimilar from Iceland. In my mind that Tsipras is quite a politician for his age. And I think he actually cares.

This will leave a bad taste in the EU because Greece had political and bureaucratic supporters. Divisions have been created in an institution that was supposed to end that mentality. It won’t be easy to fix that.

#47 David on 06.28.15 at 6:29 pm

About debt – I’ve always been curious as to how most countries are listed as being in debt for X amount. Who actually ‘owns’ that debt?

Government accounts, foreign governments, institutions, funds, individuals, et cetera own that debt. If you have bonds you likely hold some government debt. Here’s a breakdown of US debt: http://www.factcheck.org/2013/11/who-holds-our-debt/. As you can see, about a third of it is held outside the US. About a quarter of that is held by China. This is a far cry from the terrifying charge that China is ‘hoovering up US debt’ in some bid to control the US as the Tea Party likes to claim.

In the case of Greece, numerous European banks and institutions owned their debt.

#48 Andrew Woburn on 06.28.15 at 6:36 pm

#12 Mukadi on 06.28.15 at 4:16 pm

Greek can lease military bases to China and Russia and then joins the BRICS bank and the SCO.

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

Be careful what you wish for.

Over the years, Europe has expended considerable blood and treasure to keep Russian naval power out of the Mediterranean. It isn’t going to just roll over now. At the very least, Greece could be pushed into selling the Piraeus to a consortium of Euro powers as part of a debt settlement.

The increasingly bellicose Russia has always wanted to control the Bosphorus at Istanbul. Turkey sees itself as the logical leader of the Central Asian Islamic countries that used to be part of the USSR. Russia wants them back.

Turkey is an important part of NATO as a modern democracy with military power that knows its way around the Middle East. If Europe were foolish enough to let Russia into Greece, it would likely also lead to Russian bases in the Greek part of Cyprus which is only a few miles from Turkey.

If this all sounds so 19th century “Realpolitik”, remember that governments come and go but geostrategic interests never change. Russia has a long history of expansionism under Tsars and commissars and there is no reason to think it has changed.

#49 doomer on 06.28.15 at 6:42 pm

The markets needed a catalyst to correct. This is it. Greece is relatively insignificant in the grand scheme of things but with markets vastly over valued, if an extension is not forthcoming there will be some blood in the streets.

Dow futures are already brutal and there are many hours to go until open. As for Grexit being priced in, that is completely laughable. I really have to question your sanity when you make a statement like that.

#50 Jas on 06.28.15 at 6:42 pm

Garth,
I can’t help posting this:

Cash flow – Masterpiece on Economics :-

One day a tourist comes to the only hotel in a debt ridden town in Kenya. He lays a 100 dollar note on the table & goes to inspect the rooms.

Hotel owner takes the note & rushes to pay his debt to the butcher.

Butcher runs to pay the pig farmer.

Pig farmer runs to pay the feed supplier.

Supplier runs to pay the prostitute, who in these hard times gave her services on credit.

Prostitute then runs to pay off her debt to the hotel owner for the rooms she rented for her clients.

Hotel owner then lays the 100 dollar note back on the counter.

The tourist comes down, takes his money & leaves as he did not like the rooms.

No one earned anything. But that group of people is now without debt & looks to the future with a lot of optimism.

And that is how the world is doing business today!

#51 devore on 06.28.15 at 6:47 pm

#3 Godth

The markets priced it in by moving the risk from private lenders to the general (EU) public. Quelle Surprise!

“The markets” did no such thing. EU did.

#52 takla on 06.28.15 at 6:50 pm

http://money.cnn.com/2015/06/27/news/economy/china-rate-cuts/index.html?iid=surge-stack-dom

And more contagion to add to the greek “problem”

#53 devore on 06.28.15 at 6:53 pm

#9 Tudor

I tend to agree with Krugman that not only is a referendum a good idea, but that austerity is foolish under these circumstances

There is no such as too little government spending in Krugman’s mind.

#54 Andrew Woburn on 06.28.15 at 6:59 pm

10 gladiator on 06.28.15 at 4:13 pm
Garth, if a mere company’s collapse wreaked such havoc on the world economy and markets, why wouldn’t a country’s collapse cause as much damage, if not more?
=============================

In relation to the global financial body, the collapse of Lehman was like a blocked coronary artery. It was unexpected and paralyzed the heart of the financial system affecting millions of investors. The Greek problem is like a crushed finger, painful but not fatal. The crisis has been telegraphed for years and most of the debt is owed to governments not private investors.

#55 Gulf Breeze on 06.28.15 at 7:06 pm

Interesting game of chicken. Argentina defaulted, survived and eventually thrived (somewhat) under a socialist regime.

Iceland — same. Not the end of the world.

In the meantime it’s quite possible that Russia could provide emergency funds for a month to keep people from starving to death. They will limp along, develop work arounds. They brought a certain amount of this on themselves but not all of it. Banks have to be reminded that they have been as reckless in their lending as Greece has been in their borrowing …. And absorb some of the cost. They should NOT be charging onerous interest rates on the debt. They create a terrible double bind for themselves (Germany mainly)

The ‘moral hazard’ argument invoked by the powers that be, with regards Greece, is utterly laughable.

I wonder if part of the alarm is the risk of a derivatives fiasco. Who knows? They don’t call it shadow banking for nothing.

#56 bigtown on 06.28.15 at 7:07 pm

In the 70’s I worked in Greek restaurants while attending Concordia U. in downtown Montreal. The management were merciless to the help and you would have to move like a bat out of hell or else you would be out the door. Never could connect how in Canada they were so arrogant to their Canadian staff and in their homeland they were in serious penury. If there was a way for them to collect some sort of tax from all those smuggled boat people from Africa to offset the drag on their economy they might get their head above water. They are a modern democracy and I suspect the workout will happen on the Eurozone’s tab.

#57 BS on 06.28.15 at 7:12 pm

34:

Tangerine is still a good thing for beginner investors, what do you think? For the moment, I’ve no time to tinker with things like TD e-Series & stuff like that.

At some point you will no longer be a ‘beginner’ and then you will need an investment account. May as well do it now. It is pretty simple to open up a discount online investment account with TD or RBC. You can have all your TSFAs, RRSPs, LIRA and regular investment accounts in both CAD and USD all in one place linked to your bank account for easy transfer of funds both ways. There you can buy ETFs, stocks, GICs and even discounted MER mutual funds. You only need to open the account once and you are done for life. Just do it.

#58 Waterloo Resident on 06.28.15 at 7:28 pm

What everyone is missing here is the fact that China is quickly melting down.

Everyone is watching Greece while the Chinese stock market has begun crashing. The Chinese central bank has brought about an emergency drop in rates on Saturday in order to bring the sudden drop of the Chinese stocks to a halt.

“Why Chinese stocks could slide 50 percent”
http://www.cnbc.com/id/102787311

The effect of a rate reduction will have a more ‘positive’ effect on the American stock markets than the ‘negative’ effect from Greece, so American markets might actually rise 2% come Monday.

Now let us just hope that the Chinese don’t get freaked out by Greece and start selling like mad because that’s what I’ve just heard is about to start in a few hours.

#59 Nagraj on 06.28.15 at 7:35 pm

If you’ve got money in a Greek bank, get it out NOW.
That was Mish Shedlock’s warning WEEKS AGO.

Canadians, reading the news that ATMs in Greece are shutting down, etc., will reconsider their faith not just in the savvy of Eurozone leaders. For Western capitalism’s claim to absolute confidence, the Greek situation is a (perhaps merely episodic) disaster. It doesn’t matter how big Greece is in this context. Those non-functioning ATMs make almost all political leaders look stupid at best.

As for the SPX, in the most desperate need of a good correction, of course something will have to serve as a reason for an initial move down. (That a prolonged bear mkt isn’t likely – is not a given.)

[The prices of some Eurozone sovereign bonds are a historic joke. I don’t know enough to connect the dots between EU QE and Wall Street, but as I recall LLEWELYN touched on that topic re MBS. Much appreciated.]

“It Only Looks Big” quite rightly means to pre-empt silly panicking – but it’s a bit too light-hearted nonetheless. Greece certainly won’t “self-destruct”. (Tho not up to Argentine TANGO standards, still, Greeks dance good.)

#60 joblo on 06.28.15 at 7:41 pm

Is this what Goldman Sachs call “Doing God’s Work”?

#61 Like Mionded on 06.28.15 at 7:45 pm

#45 Smoking Man on 06.28.15 at 6:18 pm

#23 Like Mionded on 06.28.15 at 4:33 pm.

It’s called a TN visa, 50 Bucks, you get it crossing the border..

Part of Nafta
————————-

you have the required degree?

#62 Smoking Man on 06.28.15 at 7:48 pm

My son sent me this, a letter from Hunter s Thompson to a friend asking for advice.
He came across it on line, said he thought I wrote it, as the guts of it have been the way I’ve brought up my boys..

Guess what, all 3 Love what they do..

Me and hunter are connect in weird spiritual way. Mind set is similar, but let’s face it… He can write, I ll never get to his perch on the mountain, but an have time of my life trying..
….

Enjoy.. Pay attention to his bit about the herd.

……….

April 22, 1958
57 Perry Street
New York City

Dear Hume,

You ask advice: ah, what a very human and very dangerous thing to do! For to give advice to a man who asks what to do with his life implies something very close to egomania. To presume to point a man to the right and ultimate goal — to point with a trembling finger in the RIGHT direction is something only a fool would take upon himself.

I am not a fool, but I respect your sincerity in asking my advice. I ask you though, in listening to what I say, to remember that all advice can only be a product of the man who gives it. What is truth to one may be disaster to another. I do not see life through your eyes, nor you through mine. If I were to attempt to give you specific advice, it would be too much like the blind leading the blind.

“To be, or not to be: that is the question: Whether ’tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles … ” (Shakespeare)

And indeed, that IS the question: whether to float with the tide, or to swim for a goal. It is a choice we must all make consciously or unconsciously at one time in our lives. So few people understand this! Think of any decision you’ve ever made which had a bearing on your future: I may be wrong, but I don’t see how it could have been anything but a choice however indirect — between the two things I’ve mentioned: the floating or the swimming.

But why not float if you have no goal? That is another question. It is unquestionably better to enjoy the floating than to swim in uncertainty. So how does a man find a goal? Not a castle in the stars, but a real and tangible thing. How can a man be sure he’s not after the “big rock candy mountain,” the enticing sugar-candy goal that has little taste and no substance?

The answer — and, in a sense, the tragedy of life — is that we seek to understand the goal and not the man. We set up a goal which demands of us certain things: and we do these things. We adjust to the demands of a concept which CANNOT be valid. When you were young, let us say that you wanted to be a fireman. I feel reasonably safe in saying that you no longer want to be a fireman. Why? Because your perspective has changed. It’s not the fireman who has changed, but you. Every man is the sum total of his reactions to experience. As your experiences differ and multiply, you become a different man, and hence your perspective changes. This goes on and on. Every reaction is a learning process; every significant experience alters your perspective.

So it would seem foolish, would it not, to adjust our lives to the demands of a goal we see from a different angle every day? How could we ever hope to accomplish anything other than galloping neurosis?

The answer, then, must not deal with goals at all, or not with tangible goals, anyway. It would take reams of paper to develop this subject to fulfillment. God only knows how many books have been written on “the meaning of man” and that sort of thing, and god only knows how many people have pondered the subject. (I use the term “god only knows” purely as an expression.) There’s very little sense in my trying to give it up to you in the proverbial nutshell, because I’m the first to admit my absolute lack of qualifications for reducing the meaning of life to one or two paragraphs.

I’m going to steer clear of the word “existentialism,” but you might keep it in mind as a key of sorts. You might also try something called “Being and Nothingness” by Jean-Paul Sartre, and another little thing called “Existentialism: From Dostoyevsky to Sartre.” These are merely suggestions. If you’re genuinely satisfied with what you are and what you’re doing, then give those books a wide berth. (Let sleeping dogs lie.) But back to the answer. As I said, to put our faith in tangible goals would seem to be, at best, unwise. So we do not strive to be firemen, we do not strive to be bankers, nor policemen, nor doctors. WE STRIVE TO BE OURSELVES.

But don’t misunderstand me. I don’t mean that we can’t BE firemen, bankers, or doctors — but that we must make the goal conform to the individual, rather than make the individual conform to the goal. In every man, heredity and environment have combined to produce a creature of certain abilities and desires — including a deeply ingrained need to function in such a way that his life will be MEANINGFUL. A man has to BE something; he has to matter.

As I see it then, the formula runs something like this: a man must choose a path which will let his ABILITIES function at maximum efficiency toward the gratification of his DESIRES. In doing this, he is fulfilling a need (giving himself identity by functioning in a set pattern toward a set goal), he avoids frustrating his potential (choosing a path which puts no limit on his self-development), and he avoids the terror of seeing his goal wilt or lose its charm as he draws closer to it (rather than bending himself to meet the demands of that which he seeks, he has bent his goal to conform to his own abilities and desires).

In short, he has not dedicated his life to reaching a pre-defined goal, but he has rather chosen a way of life he KNOWS he will enjoy. The goal is absolutely secondary: it is the functioning toward the goal which is important. And it seems almost ridiculous to say that a man MUST function in a pattern of his own choosing; for to let another man define your own goals is to give up one of the most meaningful aspects of life — the definitive act of will which makes a man an individual.

Let’s assume that you think you have a choice of eight paths to follow (all pre-defined paths, of course). And let’s assume that you can’t see any real purpose in any of the eight. THEN — and here is the essence of all I’ve said — you MUST FIND A NINTH PATH.

Naturally, it isn’t as easy as it sounds. You’ve lived a relatively narrow life, a vertical rather than a horizontal existence. So it isn’t any too difficult to understand why you seem to feel the way you do. But a man who procrastinates in his CHOOSING will inevitably have his choice made for him by circumstance.

So if you now number yourself among the disenchanted, then you have no choice but to accept things as they are, or to seriously seek something else. But beware of looking for goals: look for a way of life. Decide how you want to live and then see what you can do to make a living WITHIN that way of life. But you say, “I don’t know where to look; I don’t know what to look for.”

And there’s the crux. Is it worth giving up what I have to look for something better? I don’t know — is it? Who can make that decision but you? But even by DECIDING TO LOOK, you go a long way toward making the choice.

If I don’t call this to a halt, I’m going to find myself writing a book. I hope it’s not as confusing as it looks at first glance. Keep in mind, of course, that this is MY WAY of looking at things. I happen to think that it’s pretty generally applicable, but you may not. Each of us has to create our own credo — this merely happens to be mine.

If any part of it doesn’t seem to make sense, by all means call it to my attention. I’m not trying to send you out “on the road” in search of Valhalla, but merely pointing out that it is not necessary to accept the choices handed down to you by life as you know it. There is more to it than that — no one HAS to do something he doesn’t want to do for the rest of his life. But then again, if that’s what you wind up doing, by all means convince yourself that you HAD to do it. You’ll have lots of company.

And that’s it for now. Until I hear from you again, I remain,

your friend,

Hunter

#63 Obvious Truth on 06.28.15 at 8:06 pm

30 points is all the futures got with a sovereign default.

Shouldn’t it be 70?

What if euro goes green tomorrow?

So do we go short or long in the mornng?

# onlydaytraderscare

#64 Llewelyn on 06.28.15 at 8:14 pm

# 49 Jas

All the players in your circle started with an account receivable and an account payable – net zero.

The net position of all players remained unchanged

Under current monetary policy the current generation collects all benefits and passes the bill on to future generations. The current generation rationalizes this nonsense by claiming that they will invest all benefits received to expand the economy to the degree necessary to meet all future debt obligations. What else would you expect them to say!!!

Everyone in the current generation is too busy trying to collect their share of borrowed benefits to question what might happen if the economy expands as predicted but the income of citizens stuck with future debt service obligations do not increase at the same pace.

No one even bothers to consider what might happen if the economy actually failed to expand.

As Greece is finding out you cannot kick your debt obligations into the future forever. At some point the piper demands to be paid.

No country no matter how confident they may be today can play hot potato to too long before getting burned.

The library is full of books about countries that were once full of confidence, at least they thought it was confidence.

#65 the Jaguar on 06.28.15 at 8:15 pm

Greece = Shirley Valentine. Keeps in all in perspective.

#66 NoName on 06.28.15 at 8:17 pm

interesting read

manufacturing index chart, us, ger chi, uk

https://fortunedotcom.files.wordpress.com/2015/06/bri-07-01-15.jpg?quality=80

http://fortune.com/2015/06/26/fracking-manufacturing-costs/

#67 Raging Ranter on 06.28.15 at 8:20 pm

Can someone please link me to a Krugman article on this topic? Please, I’m begging you people! Someone tell me what Krugman thinks. Because clearly if Krugman says it, it must be right.

#68 sideline sitter on 06.28.15 at 8:21 pm

Euro is hurting in early trading

#69 Rexx Rock on 06.28.15 at 8:25 pm

God bless the Greek leader,shorting time Monday morning.I’ll get up early and find the pre market and check the market gapers with the most volume and percentage decline then its off to races baby.Monday is going to be awesome,cha ching.Money Monday for all for the taking.Happy shorting everyone.

#70 John in Mtl on 06.28.15 at 8:25 pm

Tsipras has a good idea – democracy – ask the people if they really want the deal offered by the troika. It also lets him off the hook if they vote the “wrong” answer!

They should just Grexit otherwise the debtors will screw them over, as in buy up assets at an unfair value.

This whole mess could even start a war: No pay debt huh? OK, we seize assets by force. Hello, China, Russia? Help!!! Could this actually happen?

Speaking of Greek assets, what’s stopping the Greek gov’t from selling some things to the highest bidder(s)? Unless they have been convinced by everyone that whatever is for sale is “worthless”… which, IMHO, would only be another way to get something of value on the cheap.

#71 Ray Vasquez on 06.28.15 at 8:27 pm

The whole European Union and Euro once currency for Euro is such a socialist experiment that does not work.

Why does all these countries in Europe still have their own old central banks, there should not be a Bank of Spain, Bank of Italy, Bank of Portugal, Bank of Greece, Bundus Bank Germany’s one, etc. etc.

There should be the ECB and that is it. This is such a stupid idea the way they set this up.

Either they are all in or don’t go in it in the first place. Even if Greece was not part of Europe, their economy would still be messed up.

Their socialistic and central, government command policies just make it worse.

I don’t see the big deal if they had a 40% cut to a new Greek currency as other worldwide currencies have fallen 20% to 40% against the Euro, British Pound, U.S Dollar.

Currencies of Canada, Brazil, Japan are just a few that have experienced this already over the last few years.

#72 Smoking Man on 06.28.15 at 8:34 pm

Steve French, read my above post, and hunters advice about asking for advice.

I don’t know what to tell you about your girlfriend. From my limited experience got married at 24 basically one woman. Im drawing a blank.

But judging by my kids experience, its all good at first then the woman goes phyco. Do they even question if perhaps they have changed after the honey moon.

Relationship are difficult, as far as my wife being a phyco, absolutely. But so am I.

It works for us..

Good luck.

#73 William of the North on 06.28.15 at 8:46 pm

I would feel a lot better, if you could explain to me how Canada or the U.S. is in any better position than the Greeks (Debt. wise) Greece was never, or would ever be in a position to pay off it’s debt…. much like Canada; and very Much like the U.S. (18 trillion is a lot of denarius to owe!)

Oh, and since we talking about a bank holiday in Greece; (regular people scrambling to get some cash out of the bank) tell me how counter-party risk in a financial instrument is a good thing. I know how Gold sucks, but maybe chickens would be a good investment. A bird in the hand is worth two in the bush…… I wonder what that means.

The issue is not Greece repaying debt. It can’t service it. Canada and the US can easily meet their debt servicing obligations. — Garth

#74 Questions on 06.28.15 at 8:48 pm

canadian preferreds, reits and other similar yield products have been crap for a couple years now. being diversified seems like a net zero game with only the etf and portfolio managers winning.

Overall return on a 60/40 portfolio last year was 8.5%. The five-year average is 7.8%. — Garth

#75 Sebee on 06.28.15 at 8:49 pm

Garth,

Hate to break it to you, but forecasting experts say no beach weather in our near future. So there…you’re finally wrong about something.

#76 RainyCoast on 06.28.15 at 8:58 pm

The issue is not Greece repaying debt. It can’t service it. Canada and the US can easily meet their debt servicing obligations. — Garth

Because they can print money and Greece can’t. But, U.S. Debt of $18trillion is greater that it’s GDP. Greece’S GDP is also 100% of GDP.

#77 John in Mtl on 06.28.15 at 9:13 pm

@ #61 Smoking Man on 06.28.15 at 7:48 pm

“My son sent me this, a letter from Hunter s Thompson to a friend asking for advice.”

Thanks for publishing that letter SM, I was pondering those very thoughts about goals & life in general. More food for thought.

#78 John Jerman on 06.28.15 at 9:14 pm

The markets are broken.
The economy is wobbling.
We need to return to a local economy, the sooner the better

#79 GetsomeAg on 06.28.15 at 9:30 pm

The U.S. can always meet debt obligations because we can just print more money…..Alan Greenspan

Canada…..?

While everyone was distracted over a flag flap and gay marriage the T.P.P. was passed quietly .

Surprised not one mention of it here tonight…thought the Smoking Man would have had something on it.
NAFTA on steroids

#80 gabe on 06.28.15 at 9:30 pm

#21, #27

Nonsense….just an ancient monument on Paros is worth a city block of Vancouver….and by the way I would pick Paros or Lake Garda any day over that garbage of Vancouver

#81 William of the North on 06.28.15 at 9:33 pm

So… what you are saying… is that as long as you can service your debt, you don’t need to worry about paying it back.

…..Interesting.

Is There anyway I can use this to ‘service’ my retirement?

People are not countries, which have the power to tax. But, give it a shot. — Garth

#82 tundra pete on 06.28.15 at 9:34 pm

The Greeks dont want no freaks. Or EU loot either.

Got the beans, bullets and band aids. Converted all my rrsp and tfsa into shiny metal.

Closing the lid on the bunker. Putting on my tinfoil hat.

#83 Has anyone seen this? on 06.28.15 at 9:35 pm

http://www.businessinsider.com/goldman-sachs-shorted-greek-debt-after-it-arranged-those-shady-swaps-2010-2

#84 Apocalypse2015 on 06.28.15 at 9:42 pm

Just hours away now, the start of a global calamity unravelling all around us starting this summer.

Greece will be compounded by China. Then the rest of the PIGS. And we’ll learn, and be surprised, how badly off are some other countries we have paid less attention to.

Plus terrorism, climate calamities and wars.

Before you even wake up the meltdown will have begun.

Dream well, deniers, it may be your last good night’s sleep.

For realists, prepare for the worst if you have not done so already.

A long, hot, horrible summer begins……………………

#85 Another Sean on 06.28.15 at 9:49 pm

“I should add that although I’ve been reading Garth’s blog for about 3 years, I haven’t done anything in line with his suggestions, nor suggestions from you, the readers.”

With 2%+ MERs and DSCs, we weren’t under the impression that you had :).

I think you might need professional help (not psychologically, and not from a bank because they clearly have already taken you to the cleaners once) because your post seems to be full of ideas and strategies but not necessarily good ones.

It seems like you would do yourself a lot better to open a single investment account (or one TFSA and one RRSP), and read this page:

http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf

You said you don’t have time to learn how e-series works, but if that’s really the case, you don’t have time to be writing long posts here either. Learn what an index ETF is before you squander any more money.

#86 GetsomeAg on 06.28.15 at 9:49 pm

Ontario pop. 11.5 million approx debt. $300 billion
Greece pop. 11.5 million approx debt $340 billion

Not far behind

#87 dutch4505 on 06.28.15 at 9:56 pm

keep in mind that the “economy of” Netflix or Starbucks is larger than Greece. Even 20 acres of greenhouses in the Netherlands produces more agriculture than Greece. The Greeks are nice people but they lack the work ethic of northern Europe.

#88 Fed-up on 06.28.15 at 9:59 pm

#85 GetsomeAg on 06.28.15 at 9:49 pm

Ontario pop. 11.5 million approx debt. $300 billion
Greece pop. 11.5 million approx debt $340 billion

Not far behind
—————————————————————————

Ontario’s population closer to 14 million.

But the debt and economy here are both terrifying indeed.

#89 Keith in Calgary on 06.28.15 at 10:00 pm

Garth……

Did you just cut and paste this blog post from the Cypriot bank holiday post ?

Can you save this one for the next country to go under as well ?

Naaahhhh……there’s nothing to see here, it’s going to be all right, nothing to worry about at all, they’re so far away and so small, move along you nice little lambs, the nice man at the abbatoir……..err…….the nice lady at the bank wants to talk to you now.

I hope the Greeks vote no and shove it up the ECB’s ass which should light a math under the approximate 550 trillion worth of derivatives out there. If Greek goes broke the ECB is broke too……..

It is time to reset the clock, and round up some bankers and politicians.

#90 Walter Safety on 06.28.15 at 10:04 pm

My taxi driver in Athens 6 months ago had paid all of his 2014 taxes and 50 % of his 2015 taxes in advance no choice in the matter, same thing at his second job, same thing for his wife. How much more can people pay ?
He wanted to stay in the Euro , I wonder if he is prepared or can pay the price the debt masters want.
Now corporations are to pay 100 % of taxes in advance.
It’s about control as the Trokia already know they can’t get blood from a stone.
But if it’s blood they want you can be sure they have already picked their targets.

#91 Jimbo on 06.28.15 at 10:04 pm

The property taxes on my house in Greece is 135 euros. It’s a 2 minute walk to a beauty of a beach and is about 1000 sq feet. Prior to austerity (2009), believe it or not, my property taxes were 0 euros.

10s of billions stolen from corrupt officials of previous governments.

The red tape in Greece is so long making it easier to hide assets and avoid payments amongst other things.

Garth is right. Deal or no deal, no way Greece could have serviced the debt. Giving Greece another bailout loan is like giving a drug addict a needle loaded with heroin.

The problem in Greece has been century long toxic governments with an electorate expecting their rousfeti (tradition of cronyism). This has produced a starving state.

People grew tired of the main parties in Greece because of the aforementioned. The result was voting in the tieless lefty party called Syriza.

I find it interesting that Syriza did not sign the deal and create the technical reforms within Greece that would lead to growth.

The institutions were offering a cure. If the cure is worse than the disease, you live with the disease. Only time will tell which one is worse.

Going to Greece in two weeks. Can’t wait.

#92 Smoking Man on 06.28.15 at 10:06 pm

#76 John in Mtl on 06.28.15 at 9:13 pm
@ #61 Smoking Man on 06.28.15 at 7:48 pm

“My son sent me this, a letter from Hunter s Thompson to a friend asking for advice.”

Thanks for publishing that letter SM, I was pondering those very thoughts about goals & life in general. More food for thought.
……

Go with floating, you can’t lose.
Swimming is so over rated.

#93 Leo Trollstoy on 06.28.15 at 10:10 pm

Speaking of Greek assets, what’s stopping the Greek gov’t from selling some things to the highest bidder(s)?

When you see them financially hurt you wait. Wait until they fall unconscious from blood loss. And approach them when they’re on the operating table on life support.

Nobody will offer Greece anything now.

It’s too early.

#94 Washed Up Lawyer on 06.28.15 at 10:15 pm

Never mind Greece.

On Wednesday, Canada’s banks and stock market will be closed. Tens of thousands will march in the streets and gather on Parliament Hill.

I am going out now to find an ATM.

#95 lurker on 06.28.15 at 10:20 pm

@GetsomeAg

The difference is debt to GDP ratio. Our wages are way higher, unemployment lower etc. Relatively, our debt is much more serviceable. Not saying we don’t need to reduce it, just saying we’re not near Greece. The population and total debt numbers don’t tell the story.

#96 Leo Trollstoy on 06.28.15 at 10:20 pm

you have the required degree?

If getting a TN visa is challenging, that person has bigger problems.

#97 Plato's Playdough on 06.28.15 at 10:21 pm

“Hey, it’s also summer. Canada Day. Beer ‘n babes. BBQs, bikes and the beach.” Garth

Isn’t this a bit like fiddlin’ while Rome errr….. Athens burns????

#98 DUI on Money Road on 06.28.15 at 10:26 pm

Some talk here on irrationality and psychoness. My advice is #1 communicate. Ask what is up, try to get to the bottom of where the behaviour is coming from. It could be minor, based on past grudges, it could be medical, it could be based on a need for control (which could be rooted in their own upbringing). But, communicate, and go from there.

#99 DUI on Money Road on 06.28.15 at 10:32 pm

As part of the medical possibility, google ‘pmdd’ and read the wiki link.

#100 Smoking Man on 06.28.15 at 10:40 pm

#60 Like Mionded on 06.28.15 at 7:45 pm
#45 Smoking Man on 06.28.15 at 6:18 pm

#23 Like Mionded on 06.28.15 at 4:33 pm.

It’s called a TN visa, 50 Bucks, you get it crossing the border..

Part of Nafta
————————-

you have the required degree?
….

Nope, Management Consultant.:)

And I’m damn good at it.

#101 Setting the Record Straight on 06.28.15 at 10:42 pm

Once they see what happens to Greece, Spain/Portugal/Italy won’t be so keen on commiting financial suicide.

&&&&&&
Perhaps they have already committed financial suicide.

#102 Freedom First on 06.28.15 at 10:49 pm

#83 Apocalypse2015

Yes. It is good to always be prepared. Diversified at its finest.

A one asset strategy is never a good idea. No exception.

#103 Dee on 06.28.15 at 10:50 pm

@#73 Questions – I suspect you’re making the beginner mistake of only looking at the share prices. Preferreds are all about the (tax-friendly) dividends. (And if you got them when they were on sale, as the diversified portfolio would help you do (since suddenly your % preferred would be down), you even got a little capital gain out of it.)

Even if the share price stays perfectly flat, my preferred ETFs churn out 4-5% in dividends. Beats inflation and helps temper the wild swings on the equity side.

#104 John in Mtl on 06.28.15 at 10:50 pm

@ #84 Another Sean on 06.28.15 at 9:49 pm:

I think you might need professional help.

It seems like you would do yourself a lot better to open a single investment account (or one TFSA and one RRSP), and read this page:

Thanks for taking time to reply. I probably don’t have “enough” for a pro advisor to bother with it, although it would be welcome. Yes, I would open only 1 investment account for the TFSA but split my initial transfer into 2 of the portfolios. The RRSP still goes where I’ve chosen, its a very good deal and quite worry-free. I’ll go read some more CCP. CPP had a .pdf from PWL explaining the Tangerine portfolios – thats what started me off on making a move. And I just discovered I also had the Vanguard .pdf from dec-2014 but forgot all about it.

Anyways, first step is first – getting serious about financial education, so I’ll spend this summer immersed in this; meantime I am looking at stopping the hemmorage of high fees.

#105 William of the North on 06.28.15 at 11:01 pm

A picture that makes me laugh; perhaps true, perhaps not. Perception is reality.

http://www.armstrongeconomics.com/wp-content/uploads/2013/03/bank-robs-clients.jpg

#106 Randman on 06.28.15 at 11:02 pm

“Overall return on a 60/40 portfolio last year was 8.5%. The five-year average is 7.8%. — Garth”

I forget who said it but I think it goes like this…

I don’t care so much about the return on my capital…

As much as I care about the return of my capital

Good luck with your prognosis Garth

Actually that was a report, not a prognosis. You may be happy with 0%, but most people are not. — Garth

#107 Nemesis on 06.28.15 at 11:11 pm

“Who’s got time to panic? Silly Doomers.” – SanguineGT

Funny you should say that, AuldPol…

http://youtu.be/2I91DJZKRxs

#108 JohnL on 06.28.15 at 11:23 pm

The question, regarding greece, would be…..who was dumb enough to lend them all that money? Should they not deserve to get pants’d? I think so!!
Don’t fight the fed is the meme of your current time. When it breaks down the worm will have turned. Keep your eyes open for that.
Pboc double rate cut …is there any traction there yet? My screens red….hmm

#109 Lala on 06.28.15 at 11:28 pm

Hey, it’s also summer. Canada Day. Beer ‘n babes. BBQs, bikes and the beach.

Summer ….. Which summer, canada Gose still one
Canada Day …. What is that?
Beer …. Check
Babes ….. No babes is Canada, sorry
BBQ …. Check
Bikes …. Yikes
Beach …. Go back to number 1.

Sorry kids but this Country sucks.

#110 robert on 06.28.15 at 11:36 pm

I went to 100% cash 10 days ago and would not trade places with the buy and hold crowd. The markets have been looking for a reason to correct and in my opinion that black swan has just landed. Watch the bond yields carefully as they will send a clear concise signal that a major correction is underway. Forget about gold and silver the minor rallies willnot hold. Bonds are about to implode in price and create a pool of dead money like we have never seen before. Margins at all time highs will only add to the downside momentum of the market. I guess this will be a true test of diversification. Not a doom and gloomer just a common sense investor who happens to believe that at times Cash is King. I believe this is one of those times.

#111 Carpe Diem on 06.28.15 at 11:41 pm

Greece …

Economically screwed.

As my Canadian buddies(born in Greece) say:

This isn’t economics … it’s Geo-political.

The German Nazis versus the Communist Russians.

The US? Well, the biggest immigration group is German, so assume what you will …

I assume nothing … I just got popcorn and watching the show.

#112 Ron on 06.28.15 at 11:51 pm

Like a previous post the debt of the US as a percentage of GDP is very similar to Greece. You keep defending and writing of how solid the US growth is and responded to another post that the difference is Canada and the US can service their debt. The US cannot service it’s debt. That is why they created QE which is nothing but counterfeiting. On a previous post I made a few months ago where I stated facts that after WW2 a little over 40% of the US was employed in manufacturing and now it is just under 10% you responded that the US has a huge technology sector. I did some research and technology is less than 3% of GDP. I do admire you for being able to clearly see our housing bubble and the media buying into the yellow hoards scooping up Vancouver real estate, fudged real estate board statistics, etc. Unfortunately the way you view and defend the US recovery is exactly how the masses view the housing bubble in Canada. You believe in a fantasy and not the cold hard facts. It is interesting that foreign investment in Vancouver is probably around 2 or 3% very similar to the often repeated massive technology sector in the US of approx. 2 to 3%. The masses believe that it is significantly higher in both situations. I think Garth that you have refused to drink the kool aid in Canada but you are drinking it by he gallon in the US. Never in the history of the world has an economy of the scale of the US ever been in this position. The IMF, the EU and world can punish and handle Greece or Argentina defaulting but we are in uncharted waters with the US. Nobody wants to pull the plug on the US as the whole world would collapse. Our answer is to keep accepting their counterfeit currency. I don’t pretend to know how or when it will unravel but it has to. Greece is just the warm up act to the main event.

#113 deutchebak on 06.29.15 at 12:24 am

Its funny because Dutch have Ajax and so called world class players and many times qualified in football but have poor work ethic. Greece only needed to enter competition once in 2004 to win…

Maybe you should bet on some tulips next time instead or just accept that they are better truly. At least you brought the world coloured tulips and plastic toys oh thats Deark sorry

#114 young & foolish on 06.29.15 at 12:33 am

A default a few years ago would have meant major Euro banks would have taken losses (as well as big investors). Now, the debt has been shifted to the Euro Central Bank.

#115 ohcanaduh on 06.29.15 at 12:33 am

Hey at least Canada brought forth maple syrup, hockey and basketball and Rob Ford. Poor old Greece is suffering with rain like sunny Vancouver and no where to swim due to a sewage plamt at the “beaches”.
They can always fall back to their contributions in science, medicine, arts, architecture, language, math and all of school as its a Greek word j I st like democracy. Well stick to having a referendum only in Quebec poir the separatistes. Who needs democracy here? Its Greek to me… eh

Keep the Canadian dream alive I need to live on the beaches and pay the bank 1.5 mill for my club Med shack. Ah the smell of garbage and sewage with algae bloom water. Ill try swiming in the pool next time

Ontario has the same debt as Greece? Wow I am sure our travel and tourism industry, Target canada and maple syrup factories will keep our debt serviced

#116 csarichardo on 06.29.15 at 12:45 am

I think eventually we will have a EUR government debt jubilee. How much ? Well just enought to help out Greece which means enough to help out Spain, Italy and Germany ! Say the ECB creates 3 trillion Euro (out of no where) and Greece gets 2.85% (85 billion) and Germany gets 27.13% (815 billion) in line with EFSF percentages and it must be used for debt repayment?! If that happens the US and China will need to follow along if we want a zero relative impact between currencies. I think people are dismissing this reset option ?

#117 BigM on 06.29.15 at 1:13 am

*cracks knuckles on the keyboard*

#3why didn’t the Troika write off it’s debts that were clearly unpayable from the start?

Because then every other country in the EU would want the same thing.
Remember for all the complaints about bankers, the democratically elected politicians signed off on everything.

#12There is only one way out for them – default and exit the Euro, Europe and the NATO and become an independent, debt free country again.

They should leave, but they won’t walk away from the debts. Just ask Iceland.

#43the greeks have been manipulated big time to join euro.I support the referumdum. Let the greeks decide their future.

Again, the politicians signed off on it all.
And how much of a decision will it be for people who have seen the banks closed all week, and soon the gas stations / supermarkets / restaurants will run out of stock, just like Cyprus.

How can you have a democratic vote under those conditions ?

#59If you’ve got money in a Greek bank, get it out NOW.
That was Mish Shedlock’s warning WEEKS AGO.

Yes, it’s too late for that now. No money can be transferred out of country for the moment.

#68Euro is hurting in early trading

Could be a good week to short the Euro a bit, but I’m sure the ECB is ready for that.

#70stopping the Greek gov’t from selling some things

They have been trying, no one wants to buy.

#91going to Greece

Better bring cash, I have heard that for now foreign bank cards will not be subject to the 60 euro a day capital controls. I would not expect that to continue.
Too many Greeks now have foreign accounts.
And then remember the criminals will know the foreigners have been told to bring cash.

Banks closed all week, vote on Sunday, if yes vote couple more days for Parliament to ratify, and another couple days to get the banks open again. So 2 weeks.

#101Once they see what happens to Greece, Spain/Portugal/Italy won’t be so keen on committing financial suicide.

S/P/Italy have worked hard to turn things around, Ireland is actually doing ok these days. They all took their lumps with bailout money, only the Greeks have been wailing about everything. But yes they will also not rush to make a mess of it, watching Greece default will not be funny short term.

This is the view from a Canuck stuck in Italy.

#118 millenial1982 on 06.29.15 at 1:15 am

Ah, the apocalyptic seagulls have been pitched a couple French fries. This should be an interesting week filled with nutbar activity at greater fool.

Gotta feel for the people in Greece. After reading the first paragraph I find myself trying to relate to the situation but can only imagine what it might be like. I hope though that everyone is paying attention and taking away what they can of the situation. At the very least, it should be a wake up call to anyone on autopilot covered in a warm fuzzy blanket. Shit can happen to anyone, time to get serious.

I’m starting to hypothesize one of the problems of our own grim financial situation is that the majority of us are born into a world that’s too easy and sheltered. Too many lacking the hunger to plan, strategize and grow out of necessity. Not to mention, ignorant and numb to the consequences of the decisions we make.

#119 jeff on 06.29.15 at 1:21 am

the other “socialist” countries of northern Europe are doing fine and have a higher standard of living than we do in Canada….

#120 Grey Swan on 06.29.15 at 1:37 am

Greece has to take some responsibility for falling into
the Wall street- Federal reserve banks agenda for growth!! (European major banks are part of Reserve)!
Wall Steet`s lobby for deregulation in 1990`s such as Glass-Stegal
Allowing banks to lend money they did NOT have backed -up by % of deposits is a cause.
If Banks and their partners never went to
Greece….people would be secure and happy with a
modest life instead of the SELL job that caused wild speculation in real estate and more!!

#121 Yitzhak Rabin on 06.29.15 at 1:58 am

Stocks have historically gone up so shut up and buy them. Great analysis.

A developed first world country is on the verge a complete economic collapse. Yes, Greece cannot service its debts. All actions taken to “bailout” the country since 2010 have only served to extend the problem and debt load into the future and pretend it is solvent.

Greece was bankrupt in 2005 but it didn’t matter – until it finally did. The same problem exists with nearly all other major world economies.

All interventions since the financial crisis have served to levitate asset prices artificially and lower interest rates to keep the debt serviceable. We are reaching the limits of this with the weakest dominoes falling first.

Venezuela is in hyperinflation. Greece, Ukraine and Puerto Rico on the verge of sovereign debt defaults. Zooming in, a state like Illinois is no different than Greece and there are countless others across the globe a short way behind.

When further increases in debt result in a negative nominal GDP like in 2008, there will be biggest trouble.

I don’t know if this week’s Greece problem is big enough to start it in motion. But with massive leverage, inter-connected banking collateral chains, $1 quadrillion in derivatives and huge margin debt, anything is possible.

Gold remains under-owned, under-supplied and under-loved and under-priced.

#122 Andreas on 06.29.15 at 2:04 am

Jimbo:

Many people in Greece have the good fortune to own their homes as they are family residences (ie: inherited or housing more than one generation), so though they may be poor, they at least have a place to live. Increased property taxes would literally displace these people and fill the streets with homeless seniors and youth, benefiting nobody. I go to Greece frequently, people there have been in financial hibernation since 2008, they can afford to just -barely- cover their bills, buy a liter or two of gas (currently around 1.60 EURO per liter, fewer cars on the road, most people have bicycles or scooters and the national highways are empty because nobody can afford the tolls) and -maybe- buy a coffee every day for 2.50Euro, which they drink for 3 hours because they can’t afford another and they likely don’t have a job.

These people have no future (for the time being). Increasing their property taxes and making them homeless would be profoundly cruel. The 23% VAT, expensive gas/diesel, heating oil, relatively high price of property compared to wages and staggering unemployment, especially amongst the youth is enough. While I agree that Greece very much needs fundamental structural reforms, many of its poorest people have been suffering since 2008.

#123 TRT on 06.29.15 at 3:47 am

There is nothing wrong with Greece. Its a democracy and they rightfully decide what they want to do. Why shouldn’t they be able to push the reset button.

The system is set up that those first in or those connected to the ‘FED’ get ahead while the rest falter. I’m sure, to Garth’s chagrin, that this makes him understandably uneasy. Do you really want to live in a Fascist/Bank state?

Get over it.

#124 rampant inflation on 06.29.15 at 5:49 am

i’ll bet the Greeks wish they had their wealth in gold and silver locked up in their houses somewhere right now.

#125 V for Me on 06.29.15 at 6:22 am

You say Greece be tiny, but the Crefit Default Swaps that it could trigger upon default would be huge. That kind of cash, even Wall Street don’t got. I’m going long on underwear.

#126 Honey Dripper on 06.29.15 at 6:33 am

Greece is a nothingburger, good advice today!

#127 Smoking Man on 06.29.15 at 6:55 am

Blood bath=Grexit

Anyone who thinks rates are going up rather than down after the over night event’s should drink more.

CAN & TSY’S are IN HUGE DEMAND yet again..

#128 Bottoms_Up on 06.29.15 at 7:15 am

#112 Ron
———————
The USA has a growing economy, is the largest economy in the world, can afford to raise taxes, and can print money. That aint Greece.

#129 Jimbo on 06.29.15 at 7:16 am

#122 Andreas

I agree with you. As a yearly visitor I also see people living on the brink.

In good times, Greeks never paid taxes. In bad times Greeks are now being asked to pay taxes with reduced salaries.

The problem started decades ago with its manifestation appearing in the past few years.

It’s possible that geopolitics has something to do with the trap Greece is currently in but I am not ready to speculate yet.

#130 PJ on 06.29.15 at 7:24 am

We are witnessing the worst collapse in liquidity we have ever witnessed, but yeah… BBQ.

Drama queen. — Garth

#131 Acropolis Apocalypse2015 on 06.29.15 at 8:01 am

Looking ugly.

Just the start.

This will spiral down much worse over the weeks ahead and get geopolitical very soon.

http://money.cnn.com/2015/06/28/investing/greece-market-reaction/index.html

I notice your email addy is “apocalypse2014”. Sorry that didn’t work out for you. — Garth

#132 maxx on 06.29.15 at 8:04 am

I certainly wouldn’t be buying re at this point…..

#133 TurnerNation on 06.29.15 at 8:34 am

What’s scariest. Banks raising interest rates creating variable and perpetual debt slaves, Greece’s new debt slaves, or t-t-terroists who HateOurFreedom.
(Haven’t head that from our Leaders for a while. I guess it’s not needed now. And maybe they never did.)

#134 Bill Gable on 06.29.15 at 8:40 am

Here in Paris for the last week and watched Cab drivers have a heart attack over Uber. Uber idiots have pushed an IPO for basically an amateur Cab Company into the Billions.
Rome tomorrow- and we shall see how Italians handle this Greek fiasco. Locals are blasé – but prices are insane and unemployment is growing.
Try 600 Euros for a small room here at the Warwick – trust me – the Hotel is about 1/2 full. Yes the streets are busy – but only stores with heavy discounts are busy. People are so busy taking selfies, they don’t have a clue.
This Euro mess will be interesting to watch – like a slow mo’ train wreck.

#135 David McDonald on 06.29.15 at 9:02 am

I have been waiting to see the market reaction to the Grexit since March. There were two irreconcilable facts; the Greeks needed something like the Marshall plan and the German taxpayers couldn’t accept paying for it. The outcome was obvious but very discouraging for Europe.

I hope to buy some European ETF’s at a discount but will not jump in just yet. The simultaneous Chinese meltdown is troubling. This may be worse than Garth predicts. I hope he is right.

#136 RayofLight on 06.29.15 at 9:02 am

It might not make that much difference if this referendum passes yes or no . If yes, there is economic hardship , if no, Greece exits, and there is economic hardship. To the average Greek, I don’t know which is better. Bad place to be in.

#137 gut check on 06.29.15 at 9:05 am

@Bill Gable –
funny, I was in Paris at the moment of the Lehman announcement.
thanks for the memories. :)

#138 rosie "moving forward" in the knowledge that, "this won't end well" on 06.29.15 at 9:08 am

So many wild cards popping up. Best to stay tight lipped.

http://www.marketwatch.com/story/does-the-fed-finally-realize-forward-guidance-is-folly-2015-06-29

http://www.marketwatch.com/story/greek-debt-crisis-is-wild-card-as-feds-dudley-anticipates-september-hike-2015-06-29?dist=beforebell

#139 JimH on 06.29.15 at 9:13 am

The European Monitary Union, unlike the single-currency systems of the USA or Canada, is deeply flawed by its lack of any mechanism for redistribution. It appears to have been designed around the notion that all its parts would continually run current account surpluses, and really has no way of dealing with a member which is mired in a current account deficit quagmire, as is Greece.
In both Canada and the USA, the “rich” states/provinces aid the “poor” regions through various forms of equalization payments and outright grants that keep the system in rough, basic equilibrium.
Without a similar mechanism, the EMU has been doomed from the get-go, as there are simply no attractive options for members running current account deficits.
As Greece is finding out, joining the EMU was a tragic mistake in the first place.

#140 Holy Crap Wheres The Tylenol on 06.29.15 at 9:13 am

#100 Smoking Man on 06.28.15 at 10:40 pm
#60 Like Mionded on 06.28.15 at 7:45 pm
#45 Smoking Man on 06.28.15 at 6:18 pm
#23 Like Mionded on 06.28.15 at 4:33 pm.
It’s called a TN visa, 50 Bucks, you get it crossing the border..
Part of Nafta
————————-
you have the required degree?
…………………………….

Nope, Management Consultant.:)
And I’m damn good at it.
__________________________________________

Smoking Man a degree would have required schooling on your part however anyone including a Clown (no offense to Clowns) can claim to be a management consultant. So it is essentially a weak link in the TN-1. Why not go for a green card? I have one still. Or perhaps the fact that you have only applied for a TN-1 shows us that you will be back here after it expires! They will not likely renew them anymore.

#141 Squatter on 06.29.15 at 9:20 am

A game of chicken between a bus and a bicycle.

#142 Holy Crap Wheres The Tylenol on 06.29.15 at 9:23 am

The whole thing started with the Eurozone letting Greece join in the first place. It is akin to throwing a lamb into a lions den!

#143 Herb on 06.29.15 at 9:24 am

#94 Washed u Lawyer,

… and smoke will rise from backyards!

#144 Bottoms_Up on 06.29.15 at 9:52 am

I notice your email addy is “apocalypse2014″. Sorry that didn’t work out for you. — Garth
————————————————————
Garth, you’ve got the best zingers sometimes! LOL

#145 fancy_pants on 06.29.15 at 9:58 am

time to throw some Greecy burgers on the Barbie. Summer time!

I’ll flip the burgers, you flip the LP to the B side song called “Same rates, different year”.

cheers.

#146 Yuus bin Haad on 06.29.15 at 10:01 am

It’s just Mother Nature trying to fool you – a misdirection. Don’t forget to keep track of what’s going on in her other hand.

#147 Herb on 06.29.15 at 10:08 am

Re Greece, again –

Forget the noise bouncing from ideological or political sounding boards. Ask cui bono? from this mess. And if things do go south, ask who tried to profit from it.

Ideologies don’t matter. It is concrete, even if only perceived, interests that lead to action. The challenge is to penetrate the spin to see the interests at play. It is better not to accept spin than to wind up “spun”.

#148 Grantmi on 06.29.15 at 10:10 am

#14 Leo Trollstoy on 06.28.15 at 4:22 pm

It’s like 1979 Argentina all over again.
#15 Leo Trollstoy on 06.28.15 at 4:23 pm

It’s like 2002 Argentina all over again.

And Venezuela is not far off.
Puerto Rico as we heard this morning is as well. http://fxn.ws/1RLGxv9

#149 fred on 06.29.15 at 10:15 am

Keep rearranging the chairs on the deck of the Titanic- Garth. The fuse has been lit. Go back to sleep sheeple- the global economic reset is soon enough. All of your paper will seek hard assets. I expect LOTS of articles that keep saying- don’t panic.
“He who panics first- panics best”

#150 Marie on 06.29.15 at 10:32 am

Here’s what Paul Krugman has to say
http://krugman.blogs.nytimes.com/2015/06/29/the-awesome-gratuitousness-of-the-greek-crisis/?smid=tw-NytimesKrugman&seid=auto&_r=0

#151 TurnerNation on 06.29.15 at 10:46 am

Ha gold not up even by 1% today.
I bought CPD.TO instead.

#152 4 AM Sunrise on 06.29.15 at 10:46 am

#134 Bill Gable on 06.29.15 at 8:40 am
Yes the streets are busy – but only stores with heavy discounts are busy.

Well, yeah, because right now it’s the semiannual Running of the Fashionistas. I was there a couple of years ago. Midnight madness sales! Good times all around!

#153 seeing it from both sides on 06.29.15 at 11:06 am

So much drama in the news. Friend landed in Greece yesterday, still able to get cash from ATM with foreign card, and if not reading the news, wouldn’t know any different.

#154 Ole Doberman on 06.29.15 at 11:10 am

Garth don’t you think the stock market is just a rigged computerized game designed to fleece the general public out if it’s money?

#155 HJD on 06.29.15 at 11:11 am

The Greek situation is now all about right-wing European governments attempting to bring down their political enemy, a left-wing government elected by Greek citizens. I wonder what side Garth is rooting for?

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html

#156 Obvious Truth on 06.29.15 at 11:19 am

The negotiating begins tomorrow.

Until now it was all political showmanship.

USA has entered.

#157 not 1st on 06.29.15 at 11:30 am

I seem to remember a quote from a certain bearded blogger from about 3 years ago saying Greece largely contained.

Thanks to Greece, Notley and oil, my portfolio is reeling.

Sure, blame me for Greeks electing a socialist government that went home sulking. BTW, markets are off 1%. Oh, the horror. — Garth

#158 Leo Trollstoy on 06.29.15 at 11:44 am

Garth don’t you think the stock market is just a rigged computerized game designed to fleece the general public out if it’s money?

No.

It’s designed to fleece morons.

It’s working.

#159 Lillooet,BC on 06.29.15 at 11:54 am

#75 Sebee on 06.28.15 at 8:49 pm
Garth,

Hate to break it to you, but forecasting experts say no beach weather in our near future. So there…you’re finally wrong about something.
****************************
Ever heard of Lillooet,BC?
Mid 30’s, sunshine, beaches?

Sacred Toronto???

#160 rosie "moving forward" in the knowledge that, "this won't end well" on 06.29.15 at 12:01 pm

The author doesn’t define rich.

http://www.vancouversun.com/business/Cayo+free+savings+account+change+irks+originator/11175399/story.html

#161 Doug in London on 06.29.15 at 12:23 pm

So far, with the exception of GREK-NY, the markets don’t seem to be too upset about what’s going on with Greece. Crisis, what crisis? Looks like a fine example of a tempest in a teapot for the world outside of Greece.

#162 Doug in London on 06.29.15 at 12:26 pm

@Leo Trollstoy, post #158:
Agreed fully. Oh, the market is rigged alright, it’s rigged so that disciplined investors who buy rather than sell during down markets (also known as buying opportunities) do better than those who don’t.

#163 Mike T. on 06.29.15 at 12:26 pm

I think the best way to consider what is happening/going to happen is to think of your favorite action movie series, maybe Die Hard

At the end of Die Hard the ‘good guys’ defeat the ‘bad guys’. Only they don’t and soon enough you have Die Hard 2.

We are going to watch East vs West in our good guy/bad guy scenario.

The East is the voice of reason that saw all this coming.

The West are the incompetent stooges that don’t know what they are doing.

Of course this is all scripted by the real powers that are orchestrating the show.

if you didn’t figure out the plot as we went along you get another chance!

if there is any advice for these strange times…..find the tings you like to do and do them as much as possible.

and don’t poison yourself

#164 Godth on 06.29.15 at 12:42 pm

Next to default?
Goldman Sees Ukraine Default in July as Debt Standoff Holds
http://www.bloomberg.com/news/articles/2015-06-25/goldman-sees-ukraine-in-solvency-crisis-likely-default-in-july-ibbnk177
After that? Spain? Italy? Who knows?
The Chinese Ponzi is unwinding too…

#165 Doug in London on 06.29.15 at 12:44 pm

@TurnerNation, post #151:
Good choice, you’ve obviously been paying attention. Correct me if I’m wrong, but you ARE supposed to buy assets when they are on sale, isn’t that right?

#166 ILoveCharts on 06.29.15 at 12:48 pm

On some days, it has to be pretty easy to write this blog ;)

http://www.cbc.ca/news/business/seniors-going-bankrupt-in-soaring-numbers-1.3129176

#167 Bottoms_Up on 06.29.15 at 12:53 pm

#153 seeing it from both sides on 06.29.15 at 11:06 am
——————————————————-
Turning off the news can do wonders to your health. I remember a leisurely vacation mid-2000’s, only to come back and first contact with people tell me that the world is ending, palestine and israel are bombing each other. Here we are almost a decade later and world is still here.

#168 Smoking Man on 06.29.15 at 1:01 pm

#140 Holy Crap Wheres The Tylenol on 06.29.15 at 9:13 am
#100 Smoking Man on 06.28.15 at 10:40 pm
#60 Like Mionded on 06.28.15 at 7:45 pm
#45 Smoking Man on 06.28.15 at 6:18 pm
#23 Like Mionded on 06.28.15 at 4:33 pm.
It’s called a TN visa, 50 Bucks, you get it crossing the border..
Part of Nafta
————————-
you have the required degree?
…………………………….

Nope, Management Consultant.:)
And I’m damn good at it.
__________________________________________

Smoking Man a degree would have required schooling on your part however anyone including a Clown (no offense to Clowns) can claim to be a management consultant. So it is essentially a weak link in the TN-1. Why not go for a green card? I have one still. Or perhaps the fact that you have only applied for a TN-1 shows us that you will be back here after it expires! They will not likely renew them anymore.
…..

I’ve had 4 in the past, easy for me, best in the world in my field expertise. Hard to beilive im sure. But when Microsoft has you on a retainer, the last go to guy. Well either I’m the worlds greatest bull shitter. Or I’m good.

But your right, with any given company 2 years max, renewable once a year.

And I am considering a green card. Furthest South I can retire here is Windsor..yuk.

I’m liken Arazona…

#169 BillyBob on 06.29.15 at 1:17 pm

“seeing it from both sides on 06.29.15 at 11:06 am

So much drama in the news. Friend landed in Greece yesterday, still able to get cash from ATM with foreign card, and if not reading the news, wouldn’t know any different.”

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

Yep, couldn’t agree more. G/F just got back from a week’s vacation in Goúves (near Crete) and didn’t experience any issues with ATM’s or banking at all. Nor did she see panicked massed running amok. (I had to work…)

Are people concerned? Sure. But just like people who live in Beirut shrug when a bomb goes off, Greeks are a little bit past freaking out over any bad financial news.

Life goes on.

#170 Havegood Wayward on 06.29.15 at 1:19 pm

Great time to be a well armed pawnbroker in Greece. I’m sure there’ll be a lot of expensive baubles to be had cheap. A briefcase full of cash can be filled with Rolex watches bought at a dime on the dollar to sell in Beijing where people are walking around with mitt fulls of burning Yuan. Whats the Greek Kajiji? Don’t you love a good vultch?

#171 Nagraj on 06.29.15 at 1:32 pm

For #134 BILL GABLE in Paris at the Warwick

Wish I was there. The last time I saw Paris – my frugal wife booked us into this peculiarly narrow centuries-old structure hidden behind the Opera on some medieval sidestreet which no cabdriver could find –

Decades ago there was this gaggle of schoolmarm tourists from the GTA – I AM NOT MAKING THIS UP – standing next to the Eiffel Tower. THUD! SCREAMING! An unhappy Frenchwoman had decided to end her unhappiness by jumping from the Eiffel Tower, and she landed smackdab on top of one of the Canadian schoolmarms. Two instantly deceased women on the ground. Bingo.

– thought I’d add to the – macabre – howling taken up by the blogdogs today. (Should I ever get to Paris again I shall book myself into the Hotel Crillon.)

#172 Realtor007 on 06.29.15 at 1:37 pm

DELETED

#173 pwn3d on 06.29.15 at 1:57 pm

Just bought some XTR on sale, got to love the >6% yield.

As for bonds, 5 year back to .9 and dropping fast. We’ll probably drop another .25 on the overnight this year and I find it hard to believe the US is going to raise rates in Sept given all this stuff going on around the world, it isn’t just Greece.

Like I said before, expect another banner fall RE market in Toronto.

#174 Holy Crap Wheres The Tylenol on 06.29.15 at 2:29 pm

#168 Smoking Man on 06.29.15 at 1:01 pm

#140 Holy Crap Wheres The Tylenol on 06.29.15 at 9:13 am
#100 Smoking Man on 06.28.15 at 10:40 pm
#60 Like Mionded on 06.28.15 at 7:45 pm
#45 Smoking Man on 06.28.15 at 6:18 pm
#23 Like Mionded on 06.28.15 at 4:33 pm.
It’s called a TN visa, 50 Bucks, you get it crossing the border..
Part of Nafta
————————-
you have the required degree?
…………………………….
Nope, Management Consultant.:)
And I’m damn good at it.
__________________________________________

Smoking Man a degree would have required schooling on your part however anyone including a Clown (no offense to Clowns) can claim to be a management consultant. So it is essentially a weak link in the TN-1. Why not go for a green card? I have one still. Or perhaps the fact that you have only applied for a TN-1 shows us that you will be back here after it expires! They will not likely renew them anymore.
…………………………………………………

I’ve had 4 in the past, easy for me, best in the world in my field expertise. Hard to believe im sure. But when Microsoft has you on a retainer, the last go to guy. Well either I’m the worlds greatest bull shitter. Or I’m good.
But your right, with any given company 2 years max, renewable once a year.
And I am considering a green card. Furthest South I can retire here is Windsor..yuk.
I’m liken Arizona…
____________________________________________
Arizona is nice when its cold as hell here, however having lived there in the past no way! Heat is unbearable in the mid day summer. Not much to do unless you love golf. Boating is limited. Lots of old and I mean old people getting ready for the sunset sendoff to the great beyond. Ive already got my fall winter place lined up in the Bahamas. Got great food, lots of water, great people, exciting hotels with shows. Very international setting and best of all 200 miles or less to the Continental US for anything urgent. Flights in and out several times per day. Hot but not oppressive hot. Ive lived in California, Arizona, Florida and Michigan already and that’s not including all of the places Uncle Sam sent me for my military career. Loved the south but not that much!

#175 Waterloo Resident on 06.29.15 at 2:33 pm

There is a lot of talk on the trading floors of ‘CONTAGION’.
– Greece defaulting
– Major banks in China soon defaulting
– Puerto Rico saying that they cannot pay their debts (default coming)
– Ukraine almost certain to default in July
and the list goes on and on.

Whats going around now is the massive debts that Spain’s banks have, their exposure to Greece, and the risks that they too will soon become insolvent.

So as you can see, its now snowballing into bigger worries and the spotlight is now being focused onto other countries with large debt problems as well.

What trading floor are you on in Waterloo? BTW, the trading floor on the TSX closed decades ago. — Garth

#176 not 1st on 06.29.15 at 2:36 pm

#173 pwn3d on 06.29.15 at 1:57 pm

XTR distributions are more than half return of capital back to shareholders and its full of junk bonds. Its real yield is 3.7%. Sure you want to own that?

#177 Mike S on 06.29.15 at 2:50 pm

““When we cut rates to stabilize the economy we don’t picture some heavily indebted household going out and adding to their debt pile, rather we picture a household with no debt at all deciding finally to buy a house and taking out a mortgage,” Poloz said.”

Garth,
Seems like Poloz opposes your message of being balanced, and expect me to buy a house at these elevated prices …

Well that not going to happen …

#178 Blacksheep on 06.29.15 at 2:56 pm

Not # 157,

“Sure, blame me for Greeks electing a socialist government that went home sulking.”
———————————————-`
The error was not in the election of said government, the error was made when the IMF over estimated the willingness of the Greek people to commit to eternal servitude.

I keep reading how small and irrelevant Greece is.

How it’s debts are similar to those of Ontario.

How financial contagion will be limited.

So why not let it go, what’s the big deal?

What’s being missed, is the Greek situation is all about avoiding ‘a new precedence’.

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

“You let ONE ant stand up to us, then they ALL might stand up to us”

#179 Apocalypse2015 on 06.29.15 at 3:18 pm

The day is not even over, and the Greek contagion is spreading.

From the BBC (not a ‘doomer’ site last time I checked, btw)

http://www.bbc.com/news/world-us-canada-33317495

Deniers underestimate how much the Greek debacle will allow other political entities to feel less shame in coming out of the closet.

More surprises ahead.

This gets very ugly very soon.

An unforgettable summer unfolds ahead of us.

#180 Holdon Longstaff on 06.29.15 at 3:35 pm

“What trading floor are you on in Waterloo? BTW, the trading floor on the TSX closed decades ago. — Garth”

Garth…you should no better than to question the veracity of the internet. Everything is true if it’s been scrutinized vetted by the wisest among us on Facebook and Google, tsk tsk.

I have been using a tried true and trustworthy method of Druid divination…sitting on the toilet and communing with the random settling of my poo. If the dropping is lengthy and contiguous I know the world is unfolding as it should. The meditation time on the throne is cathartic and liberating.

Today’s sacred sight told me that stocks in the Russel 2000 and 5000 are oversold in reaction to a media with it’s hair on fire over two states ( Puerto Rico and Greece) which together couldn’t shift the needle of the global economy if either was functioning. The S&P companies have little exposure to Europe generally. I am thinking this is a good time. Since November I have increased my six figure cash position to around 35% as this has unfolded.

I’m sorry to not agree in any way with your balanced approach….my lifestyle needs more money faster. If you could pick ETF winners out of this chaos what would they be?

#181 Spiltbongwater on 06.29.15 at 3:38 pm

Is Greece a bigger issue then NBC cutting ties with Donald Trump?

#182 devore on 06.29.15 at 3:54 pm

#139 JimH

It’s not that they can’t deal with a deficit, it’s that they can’t force a member to deal with their deficits so they do not become structural. A really flawed system from the ground up.

#183 TurnerNation on 06.29.15 at 4:02 pm

Treasury Blondes have more fun today!
TLT.US

#184 JuliaS on 06.29.15 at 4:05 pm

At least their tax free savings accounts are safe.

/sarc

#185 Bottoms_Up on 06.29.15 at 4:22 pm

Cmhc stats for ottawa just out, ytd including may sales are up 6% over a year earlier, and prices in line with inflation (up 1.5%). The flatlining of the market is real here, with no imminent collapse in prices as some would have you believe.

#186 sand in the line on 06.29.15 at 4:28 pm

#180 Holdon Longstaff

If you could pick ETF winners out of this chaos what would they be?

===

Probably that’s the sand in the line where you have to be a paying client.

#187 Cannibalism Coming on 06.29.15 at 4:30 pm

Is there a link between Deutsche Bank and Greece?

https://www.google.ca/webhp?sourceid=chrome-instant&rlz=1C1EODB_enCA593CA594&ion=1&espv=2&ie=UTF-8#q=deutsche%20bank%20stock

It Deutsche the next Lehman?

#188 cramar on 06.29.15 at 4:35 pm

#100 Smoking Man on 06.28.15 at 10:40 pm
….

Nope, Management Consultant.:)

And I’m damn good at it.

————

Really!?

A R-E-A-L Management Consultant needs a real eduction to play in the big leagues. Major corporations will only deal with someone with education and proven track record, and respects spelling.

Son #2 is a real one. Honours MBA, and now a senior partner in a major U.S. consulting firm. I don’t know his income, but it is a fixed salary plus bonus that depends on how much service the firm can bill for. The more clients and the bigger, the better. He told me one fellow there has only one large client whom he devotes all his time to. His bonus is $7 million/year! This is the big league.

#189 espressobob on 06.29.15 at 4:54 pm

Is it any wonder why Garth disses DIY investing? So many worry warts. Yeesh. Market corrections are good! Here’s hoping.

There’s less risk when prices are down, more when their up!

#190 Jake O'riley on 06.29.15 at 4:57 pm

Nasdaq below 5000 again. I would not be surprised to see China’s shanghai index down another 10% and the Nasdaq down another 6% over the next few days or week.

#191 pwn3d on 06.29.15 at 4:57 pm

#173 pwn3d on 06.29.15 at 1:57 pm

XTR distributions are more than half return of capital back to shareholders and its full of junk bonds. Its real yield is 3.7%. Sure you want to own that?

————
I prefer the term “high yield” :)

It’s an ETF of ETFs that I don’t believe will get crushed when the Fed eventually starts to raise rates. Maybe will be wrong but will be happy collecting the 6%.

#192 Mark on 06.29.15 at 5:10 pm

Down, down, down go long-term interest rates today. Was it any surprise? So much for the inflationists insisting that inflation was about to explode and policy rates would need to go higher to offset such.

#193 Mike S on 06.29.15 at 5:26 pm

“Down, down, down go long-term interest rates today. Was it any surprise? So much for the inflationists insisting that inflation was about to explode and policy rates would need to go higher to offset such.”

Mark really?
Does one day set a trend?
Did you really expect yields to go up when market was going down?

#194 live within your means on 06.29.15 at 5:39 pm

Just waiting impatiently for things to happen re the Euro while we’re U know where Garth.

#195 Republic_of_Western_Canada on 06.29.15 at 5:43 pm

#179 Apocalypse2015 on 06.29.15 at 3:18 pm

More surprises ahead.

This gets very ugly very soon.

An unforgettable summer unfolds ahead of us.

This is true.
Contagion is usually disregarded as an improbable event based on raw individual randomness.

Until all the phase-locked loops close simultaneously.

At which time Garth will start to devote way too much bandwidth to squirrel recipes again.

#196 Meager Agents on 06.29.15 at 5:45 pm

@pwn3d Enjoy the XTR investment. As long as you have the distributions on DRIP, you get to enjoy that 6% buying more units on sale!

When things recover, the upward momentum will be as rewarding as a hot air balloon ride on the calmest day of the year! DRIP investors love markets in decline, as long as you have many years to live.

If markets violently move up again, switch the distributions back to cash and enjoy the distribution that way.

#197 Holdon Longstaff on 06.29.15 at 5:54 pm

“If Greece is so small and insignificant why didn’t the Troika write off it’s debts that were clearly unpayable from the start?”

* Socialists in the ECB have no idea how to manage money in the first place…they are political beasts first and foremost…..now that the Greek debt is over 300 billion has it become an issue of ‘us against them’. The EU is like a big NDP….and you know what happens when the Dippers are in charge.

“Probably that’s the sand in the line where you have to be a paying client.”

Many times in the past I’ve left lists of potential winners ( in retrospect they all doubled and tripled…some even quintupled) so…. I say ‘Lets see yours’ as a challenge to all the experts. Balanced vs Stock Picker…mano a mano….put ’em up….there couldn’t be a better time to seek a bottom and make a bet….got the juice to make a call?

#198 Smoking Man on 06.29.15 at 5:58 pm

#188 cramar on 06.29.15 at 4:35 pm
#100 Smoking Man on 06.28.15 at 10:40 pm
….

Nope, Management Consultant.:)

And I’m damn good at it.

————

Really!?

A R-E-A-L Management Consultant
……

Wtf is a real management consultant. I’m a job killer, I slay people for a living. Productivity freek..

Where in your kids MBA does it teach him to take the customer list and set up shop accross the street. How to get un tendered contracts with governments..

Ya thought so…

It kills my when the schooled discover that you don’t need all those obedience certificates to penetrate the machine and prosper.

I’m leaving my current gig not because I suck. I’m 2 and 1/2 years over the max of 2 years for consultants are allowed to work.

My option was to become an FTE and a huge pay cut at 200k a year..please I don’t get out if bed for that. That’s 2k a week clearly.property.

Dr Smoking Man
PhD in Herdonomics.

#199 kommykim on 06.29.15 at 5:58 pm

RE:#192 Mark on 06.29.15 at 5:10 pm
Down, down, down go long-term interest rates today.

Confusing Bond yields with Bond coupon rates again? Tsk Tsk.

#200 Smoking Man on 06.29.15 at 6:27 pm

#192 Mark on 06.29.15 at 5:10 pm
Down, down, down go long-term interest rates today. Was it any surprise? So much for the inflationists insisting that inflation was about to explode and policy rates would need to go higher to offset such.
…..

Duration and convexities are a bitch

#201 Erick on 06.29.15 at 6:28 pm

Garth,
Please help me here: if Greece is only 10 million people and the debt is 350 billion, then every citizen has a debt of 35k. Is that correct?

#202 Republic_of_Western_Canada on 06.29.15 at 6:38 pm

–badda-boom!–

http://www.threehundredeight.com/2015/06/ndp-now-favoured-in-new-polls-and-seat.html

‘Bout time to shut down all those parasitic financial offices in hogtown, outsource and offshore them, then convert the hi-rise buildings to greenhouses and small manufacturing shops.

#203 Getting Old on 06.29.15 at 6:50 pm

People are not countries, which have the power to tax. But, give it a shot. — Garth

Funny Garth, I thought countries were people. I guess Greece didn’t know how to tax.

#204 DK on 06.29.15 at 10:32 pm

What do you recommend for a “balanced and globally-diversified portfolio?” Is there an ETF that covers the majority of equity investments?