Planning a Greek holiday later this year? Cool. Book the flight now. But not the hotel or the car. Just show up with cash. Haggle your way to epic low prices. Pick up a villa while you’re there. And get used to the idea that all your gain is some Greek’s pain.
So stock markets laid a small egg Monday on news Greek banks shut, capital controls were imposed and people were restricted to withdrawing 60 euros a day to live on. The market decline was more pissed-offedness than panic. Lots of traders and bully investors took long positions last week when it looked like Athens would not be dumb enough to commit suicide. They were wrong. Monday was spanking day.
Of course, the doomers were all over this like mold. The mainstream media, which never reports a 300-point market increase, made this the lead story. That was all it took for DIY investors to log into their online accounts and start dumping perfectly good assets.
Sigh. Some things never change. People buy stuff that’s rising in value because it’ll obviously go up forever. They sell things in decline before they’ll go to zero. Amateurs pay too much and sell at a loss. It’s why the pros love them.
Most of the major banks took Monday seriously enough, however, to scramble out a message. TD sent a video. RBC’s Eric Lascelles circulated a hastily-written multi-page epistle which concluded: “We will know much more over the next seven to nine days. Greece is slightly more likely to remain in the eurozone than exit, but the risks are growing given the imposition of capital controls as well as a rising chance of a major uncoordinated default.”
What does it mean? Should you worry?
Yesterday I said Greece is old. There are better things to vex about than a small country (three million fewer people than Ontario) with a puny economy (0.5% of the global one) and a new socialist government willing to take it to the brink. We’ve seen this movie before. And in 2011 it was a lot scarier.
Since then a lot has changed. Hardly any international banks have exposure to Greece any more. Private investors long ago split. Despite Monday’s kneejerk reaction, global markets are vastly more prepared now for any Greek outcome than they were four years ago, when we had the last crisis. As portfolio manager Doug Rowat points out: “The Athens Stock Exchange is still more than 50% below its 2011 peak when local markets were completely caught off-guard by the developing crisis. European banks are also much more prepared now, having reduced their exposure to Greece from a peak of €128 bln in 2008 to €12 bln in 2013, effectively reducing systematic risk. We are also many years removed from the financial crisis of 2008–09 and major global economies, such as the US, are on a much stronger footing than they were in 2011 further adding to global market stability.”
Also don’t forget that Europe has been on a roll this year, thanks to a fat stimulus program by the European Central Bank – which has injected a trillions euros into the economy. That has richly rewarded investors with a globally-diversified portfolio, yielding double-digit gains in the UK and Germany so far in 2015. Prospects for the European economy have brightened considerably, with growth estimates seriously higher than six months ago.
It’s therefore hard to believe Greeks would be thick enough to vote themselves off this island. Polls show seven in 10 want to stay in Euroland, knowing full well the economy will turn to dust and life savings will vanish if the country is punted or is forced to come up with its own comic-book currency. Europe can afford to toss Greece, which makes up just 1.9% of the regional economy, but Greece cannot survive without Europe.
What about contagion spreading to other debt-pickled places like Portugal, Spain or Italy?
Unlikely. But if it started, the EU is ready. The European Stability Mechanism is a permanent rescue fund with enough money in it to buy three Portugals.
Finally, the world knows Greece’s unfortunate government is just playing politics. If it was serious about a referendum the question would have been, “Do you want to stay in Europe” instead of asking people to vote on a 4,000-word technical bailout-conditions document. The vote also would have happened before tomorrow, which is when the country had a key debt payment due. And it’s telling that the left-wing prime minister who cooked this up is now campaigning for the ‘No’ side. This is about ideology, not the people. Like all socialism.
Well, stocks went down on Monday, but bonds went up. So people with a balanced portfolio were, by design, somewhat shielded from this temporary silliness. The best possible defence, however, remains insufferable indifference.
The gold nuts can’t take that.
173 comments ↓
first first first.
Garth, I find that young woman in the photo very attractive. If you could send me her number, I would really appreciate it. I would like to take her out to dinner. I was thinking The Keg, or something similar. Thank you.
First.
First time.
What does this mean?
Whee!
The problem isn’t Greece. Its Spain, Italy, Portugal and even France which are next in line after Greece is resolved one way or another. And beginning soon, municipal defaults in the United States.
All profoundly deflationary. Gold may not go up as the result of such, but it’s probably going to get a lot cheaper to produce as the rest of the economy slows down.
No data for you!
http://blogs.vancouversun.com/2015/06/25/access-denied-why-i-cant-report-where-b-c-s-immigrants-come-from/
I saw on the news today that Greece had defaulted 5 times already.
I believe the only other country in Europe to be as bad as Greece is Spain.
I’m sure if one were so inclined, they could go to Greece with a suitcase full of euros, and buy gold at a discount from the masses. Turns out they do need cash, not gold, to buy the necessities of life after all.
“This is about ideology, not the people. Like all socialism.”
really Garth? some of the highest standards of living enjoyed in the world are “socialist” like those in Northern Europe…ideology? that has also been used to describe and justify the excesses of capitalism and its destructive impact on the planet…Chomsky is a good start
Greece gave us Socrates who was reported to say on his deathbed, “Crito, I owe a cock to Asclepius; will you remember to pay the debt?”. Wise man.
Phew, he’s okay! Whenever Garth posts late, I worry that he’s broken another ankle or something.
Anyway, it’s been a while since I last distributed the GarthFAQ. So here, once again, is a link to help anybody who’s new to the blog and maybe isn’t sure who [email protected] is, or whether they should worry because they don’t have any squirrel recipes.
The GarthFAQ
Very interesting developments around the globe this past week
The game of “Monkey See Monkey Do” that passes for international monetary policy these days is under a bit of scrutiny. However the cheerleaders are spinning enough good news to convince the masses that the crisis in Greece was self-induced, the credit crisis in China is a minor blip, and that the game continues to be based on sound principles..
Unlike most games ‘Monkey See Monkey Do” is based on the rather interesting premise that there will be no losers only winners.
In “Monkey See Monkey Do” players who begin to run out of chips simply have to arrange loans to purchase more. All players are encouraged to pledge the income of their grandchildren, and great grandchildren as the collateral necessary to borrow more chips to keep the game going.
Observers evaluate “Monkey See Monkey Do” by counting the chips in front of each player. Players with smaller stacks, Greece for example, are forced to borrow more chips than they could ever repay just to stay in the game.
In the game of “Monkey See Monkey Do” players who are able to borrow the most chips always appear to be winning. When the stack of chips compiled by one player gets too high the other players simply arrange more loans to purchase more chips.
In “Monkey See Monkey Do” debt that used to be considered a bad thing is miraculously transformed into quantitative easing and praised as a good thing.
I am reminded of Humpty Dumpty who observed to Alice that ‘When I use a word it means just what I choose it to mean”
When the table becomes too cluttered with all those chips the players simply record the number of chips they own on a computer screen. Cheating is encouraged as long as the stories used to justify the fictitious entries seem ‘con’vincing.
Yup. “Monkey See Monkey Do” is definitely a game worth playing. Just ask the financial institutions who invented the game and receive a nice reward each time a new loan is negotiated.
How could anyone ever doubt that playing “Monkey See Monkey Do” would lead to properity for all?
Time to buy property in Greece. Sucks that most of the place has no land registry.
I can’t help but wonder in a world where you are limited to 60 euro withdrawal a day – is cash really that liquid when things go bad? Aren’t the property owners in Greece doing much better than renters at the moment?
It’s kind of funky that Greece has to face the music whereas the US who is more indebted per capita can just keep happily printing money. Methinks these are the kind of imbalances that will spark the next global war.
interesting read
“But while Tsipras and Co. may be right about the destructiveness of austerity, the way they’ve gone about negotiating with their creditors has also cost Greece dearly. For five months now, Greece and the EU have been locked in fierce negotiations, filled with recrimination and distrust, and the Greek economy has ground to a halt.”
https://www.linkedin.com/pulse/greece-costs-crisis-ian-bremmer?trk=hp-feed-article-title-hpm
and this
https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAAAAAJrAAAAJGE0MzMyMWU5LTNmMzEtNDZhOC05NzQ3LWE5MWE1OWFiNDBkZg.png
Yup. Stocks predictably on sale. Get ready to hit the Enter key over the next few days.
Kaboom for a little bit… good time to start taking your stockpiled cash and buying some dips I think how about you garth?
Can someone tell me what happened when Iceland went bankrupt? Did everyone there lose their life savings?
Your analysis is wrong. Greece is better off out of the Euro(zone). It’s a failed experiment. Not amalgamating all debts of the member nations was its downfall. When the Euro took off, it doubled and tripled debts of its members and now Greeks are left only to pay the interest on the billions in loans it keeps getting to bailout the other loans.
Kicking the can down the road is not a solution – it’s part of the problem. Get out now while the getting is good.
Constant Greek updates from major Greek daily if anyone is interested…………..
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_29/06/2015_551716
Tsipras says ‘no’ vote will help talks but ‘yes’ will prompt political developments
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_29/06/2015_551713
Public coffers run dry as taxes go unpaid
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_29/06/2015_551711
Double default day for Greece?
As the country exits the bailout program, tranches due to the IMF and BoG are unlikely to be paid
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_29/06/2015_551710
EU officials say referendum is on euro or drachma
Greece is old news, how about the collapse coming in China, HSBC, the Caribbean banking system?
I don’t know Garth. If the EURO is such a great thing, why is every country in debt, and the Eurozone total is 13 Trillion Euros in debt, or average of 92% gdp. Seems if you are going to go into debt for the benefit of a very small group, you may as well turn the tables and go to debt for the elderly, the sick, the kids etc. Plus, I read Greek gst is 23%, and the government is running a primary surplus, ignoring debt repayment to banksters. I can’t blame the Greeks. This is a failure of EU economic policy.
The Greek situation is like a tempest in a teapot. The left wing politicians are just plain stupid. Don’t they realize that when you borrow money, you have to pay it back. This is my first post and I have been following GT’s advice for a few years now. I appreciate the advice and counsel Garth and have as protected a portfolio as possible. Does this mean I am first today.
I feel for the Greek people, though no doubt many will gloat & say they did it to themselves. So what if anything is going to prevent us Canucks from the same fate? Well, a country with more raw assets than what old Greece has, for starters. Plus the USA economic engine will likely keep our chestnuts from burning. A roasting is inevitable, just a matter of when. With luck, just a light toasting will occur.
As for the markets, I thought this had all been factored in & no big drops were anticipated? So if this is so, possibly w/b good to buy stocks tomorrow while prices are still down – I’d expect the upcoming Canada Day & Fourth of July holidays would be too late for anyone looking for a bargain.
#107 Nemesis on 06.28.15 at 11:11 pm — Great movie, and that one line — “We’re gonna need a bigger boat” — is the only ad-libbed, unscripted line.
#187 Cannibalism Coming on 06.29.15 at 4:30 pm — “Is there a link between Deutsche Bank and Greece? It Deutsche the next Lehman?”
Possibly. German hypocrisy. Karma’s a bitch, as all debts must be repaid. And who is profiting from the current chaos? U-Know-Who!
For those that care, the AIIB kickstarted today.
#6 Dan Foresca
Argentina 1x
Iceland 1x (2008)
Germany 2x (19?? & 1945)
UK (GB) 1x (1945)
CCCP 1x
Pakistan 1x
Zimbabwe 1x
Ecuador 6x
France 8x (long time ago)
Spain 7x
Ontario & Alberta – application pending…
(span was first sovereign nation that declared bankruptcy ever.)
#24 Nosty, etc. on 06.29.15 at 9:04 pm
Uncle Nosty!
where you been?
I was starting to get a bit worried.
It’s a redundant song we’ve all heard before and the silliness and drama in the markets become quite old and tiresome after a while.
Stay fully invested but somehow have a pile of cash on the side to buy stocks/ETF’s when they dip or take a thrashing as they are right now in markets like China.
Ummmm…I don’t get it. Impossible to do both don’t ya think? Re-balance maybe?
The money men love to brag about how much more you could have lost if they hadn’t invested your cash this way or that way. But when it’s all said and done, temporary or not, losses are losses and they suck.
“Greece’s situation was priced into the market years ago,” they said.
Oh really?
” If the EURO is such a great thing, why is every country in debt, and the Eurozone total is 13 Trillion Euros in debt, or average of 92% gdp”
That would be simply because debt is wealth, really. I know it must sound like when first hearing about Santa, but it comes a day when the truth must be faced. Probably that’s why people have a problem accepting deflation, because they cannot admit that the destruction of debt can create such a calamity.
And on tomorrow’s schedule, there the first big destruction of debt in recent history. Certainly not the last.
Canada Travel Advisory warning travelers to take CASH and forget credit and debit cards…also U.K. giving same alert and in the case of the U.K. saying ONLY USE CASH and forget about credit cards on your Helenic advenure.
This is refreshing news and maybe another flashing yellow light occasion experienced with the riproaring rollercoaster ride of BITCOIN which bit a few folks in the patooty recently.
I am in awe of that loonie…my WORD that fx is holding up like the Chicago Blackhawks in Game Five..
People who underestimate us do so at their peril.
And it beginss….
Seniors’ bankruptcy jumps:
http://www.msn.com/en-ca/news/canada/seniors-going-bankrupt-in-soaring-numbers/ar-AAcgkV7
“This is about ideology, not the people. Like all socialism.”
Uh oh, the NDPers will be upset with this remark !!
“It’s kind of funky that Greece has to face the music whereas the US who is more indebted per capita can just keep happily printing money.”
Who ever said economics was “fair”? It’s always been about politics, and not ideological ones either.
I don’t own any bonds from Greece or any bond funds, bond ETF’s, bond index funds etc. that have a bunch of different bonds.
I have some 30, 90, 180 days term deposits, GIC’s, TFSA’s and RRSP’s in 3 CDIC financial institutions $7,000, $8,000, $9,000. $68,000, $45,000, $67,000 which are all below $100,000 for each one.
I have though RRSP’s and other investments through Canadian Life insurance companies, GIA’s in Equitable Life of Canada, GIA’s in Sun Life Financial, Manulife Financial.
They are all $65,000, $85,000, $75,000 well under the $100,000 Assuris is supposed to protect policyholders
I have a disability annuity through Standard Life that pays me $1,950 a month until my 65th birthday, 183 more months tax free that 80% of that I live on quite well which is within the $2,000 monthly Assuris limit.
I have no debts at all since 2011which makes me sleep much better at night.
My LIRA annuity at BMO insurance is paying me $20,000 a year for the next 20 years and it is fully depleted.
I don’t see how Greece’s, Peurto Rico’s financial, debt problems and China’s stock market’s 22% drop has anything to do with my particular finances.
I don’t think I am missing something here!
#17 sideline sitter on 06.29.15 at 8:50 pm
”Can someone tell me what happened when Iceland went bankrupt? Did everyone there lose their life savings?”
Goto Google, type in “Iceland and default” and you will get all the information you need. You do know how to google right?
#4 Mark on 06.29.15 at 8:22 pm wrote:
The problem isn’t Greece. Its Spain, Italy, Portugal and even France which are next in line after Greece is resolved one way or another. And beginning soon, municipal defaults in the United States.
All profoundly deflationary.
Nope! Just the opposite. After a default the amount of money in the economy is unchanged but the debt is reduced. Hence defaults and bankruptcies are inflationary, not deflationary.
Defaults are a symptom of deflation, not a cause of it. They are inflationary events which are most likely to happen during a deflation.
I am buying this dip big time.
The greek referendum has setup the stage for others in the Eurozone to follow. Yes, Greece is a tiny butterfly with little impact on the rest of the world’s economy and yes the ECB owns a printing machine; But comes December Pademos in Spain will follow Syriza. There is tectonic shift inEurope and the confidence game is over for theEuro. From here on, it will be a slow and agonizing death for the Euro.
If you think Greece is so yesterday you better think again; Greece is the future and it began yesterday.
#34 Derek – I could read and read and read, but I thought I’d ask ‘experts’ instead of the Internet as a whole
At #13: Catalyst, you forgot to mention the U.S. also has GDP that is 2.4 TIMES per capita than that of Greece, it is the global reserve currency, has a diversified and progressive economy (IT, Biotech, Space, Advanced Manufacturing), and has the ability to repay its debts. Oh, and the U.S. repays its debts to the holders; hence why the USD remains the most trusted currency. Greece? They have beautiful scenery, some decent food, and goats. Nice try, though.
“Nope! Just the opposite. After a default the amount of money in the economy is unchanged but the debt is reduced. Hence defaults and bankruptcies are inflationary, not deflationary.”
Have to disagree with you here. Defaults remove equity from the system, and when equity is removed from the system, in order to maintain the same amounts of leverage, notional values must fall.
If the leverage ratio is, say, 10 — a default of $300B removes potentially $3T of credit unless leverage manages to expand.
The fear, in such an environment, is of course that risk aversion kicks in and drives spreads so much higher that there’s additional losses, hence a deflationary spiral.
Defaults are a symptom of deflation, not a cause of it. They are inflationary events which are most likely to happen during a deflation.
How do defaults accelerate demand against the existing stock of goods and services? Seems to me that the people who are being defaulted on probably won’t be doing much shopping since they’re now poorer. Nor will the borrowers, who obviously have no access to new credit. I don’t see how you can think this adds up to inflation — although the aftermath of significant deflation can eventually turn into inflation if monetary policy measures are substantial enough.
Regarding :
#4 Mark on 06.29.15 at 8:22 pm
The problem isn’t Greece. Its Spain, Italy, Portugal…….. And beginning soon, municipal defaults in the United States.
All profoundly deflationary. Gold may not go up as the result of such, but it’s probably going to get a lot cheaper to produce as the rest of the economy slows down.
———————
1) US states and their versions of “municipalities ” already under water financially for years back!
2) And Gold mining is much, much more complex than Your guesstimating . Doing a bit of a disservice to the blog dogs with your comments. Complete your research, read the graphs. A huge price of gold etc is the very labour that goes into it. It’s the store of labour among many other elements that give it value.
Try reading the following:
The Real Cost of Mining Gold | Kitco Commentary
——————-
#24 Nosty etc.
Great example of how complicated things are!
Re: Germany owing Greece billions! Reminds me of “black money” in Greece. Huge cash economy! 50%?? Like Cuba, massive commerce , 80% off the books at least.
Regards,
Jeff
The 50% that pay no tax love socialism. It’s the people who work hard and get taxed to death to pay for everyone else that aren’t fans.
Capitalism gives you the freedom to enjoy any lifestyle you are willing to work for.
http://www.vox.com/2015/6/9/8751267/iceland-capital-controls
#4Mark.
Try this article regarding Gold costs, expensive and hard to sustain cash flow as costs grow!
The Real Cost of Mining Gold | Kitco Commentary
http://www.kitco.com/ind/fulp/2015-02-04-The-Real-Cost-of-Mining-Gold.html
Like I said. Keep saying– ‘don’t panic’. You are really going to defend it to the end aren’t you?? Soo sad. Chairs on the Titanic.
Re #11 Kevin
I would also like to buy on this dip but might wait until Friday ( US market closed but I want to take a position in the XIU). Unless the EU comes up with a better deal for Greece before the weekend and the referendum is cancelled, stocks could get hit hard Friday because nobody wants to hold big long positions going into the weekend ?
Garth I years helping folks with their investments. Retail investors tend not sell into falling markets. What they do is wait until their investments go back to what they paid and then sell. They get a long term rate of return of approximately nothing, as they do not enjoy any real growth. Half of the volume is high frequency trading done by hedge funds, banks and other institution. By definition the Pros. Those pros were selling today and this small investor was buying.
Anyone out there selling this dip and re-buying a lower dip on Friday? If they have the gusto!
Correction – Re Kevin #35. Sorry , I previously posted Re Kevin #11 mistakenly.
I would also like to buy on this dip but might wait until Friday ( US market closed but I want to take a position in the XIU). Unless the EU comes up with a better deal for Greece before the weekend and the referendum is cancelled, stocks could get hit hard Friday because nobody wants to hold big long positions going into the weekend ?
#201 Erick on 06.29.15 at 6:28 pm
—————————————–
The numbers you quote are correct, the Greek government is in debt to the tune of 35k per citizen. This is government debt though, technically not each citizens debt. Each citizen will have their own net worth.
“This is about ideology, not the people. Like all socialism.”
And capitalism is about what exactly, Garth?
It doesn’t pretend. — Garth
“The mainstream media, which never reports a 300-point market increase, made this the lead story. ”
Biggest hit the Dow has taken since June of 2013, I’d say that’s more than news worthy Garth.
GOLD IS THE CURRENCY OF KINGS
CASH IS THE CURRENCY OF MERCHANTS
CREDIT IS THE CURRENCY OF SLAVES
A Greek default is really a cleansing of a bankrupt country.
No different than a personal bankruptcy there comes a time when you can’t see yourself out of debt and that is the time to punish the irresponsible lenders as well as the foolish borrowers.
If the Greeks had the stomach to default at the beginning of the crisis they would be in a roaring healthy economy today.
The debtors want the Greeks to be enslaved forever in debt.
I think it is prudent to stand up and take the medicine like a man and default.
In 2 years everyone will be working again.
If they submit to the enslaving masters they will be suffering for time immemorial.
Girl in the photo doesn’t date renters
#31 young & foolish on 06.29.15 at 9:20 pm
Yeah, there’s no ideology involved at all.
Neoliberalism is alive and well
http://mondediplo.com/blogs/neoliberalism-is-alive-and-well
Good On You, Alexis Tsipras (Part 1)
http://davidstockmanscontracorner.com/good-on-you-alexis-tsipras-part-1/
Joseph Stiglitz: how I would vote in the Greek referendum
http://www.theguardian.com/business/2015/jun/29/joseph-stiglitz-how-i-would-vote-in-the-greek-referendum
“The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.”
#2 Tony Tiserton on 06.29.15 at 8:18 pm
Garth, I find that young woman in the photo very attractive. If you could send me her number, I would really appreciate it. I would like to take her out to dinner. I was thinking The Keg, or something similar. Thank you.
Dude, can’t you read? Offer to take her to a restaurant that serves primarily cookies!
Smoking Man.
You write better than Hunter S. Thompson.
So here are a few thoughts I had and wanted to share with you.
Quit beligering the fact that you haven’t post secondary training. Those institutions are a huge social experience in babysitting and methodical/contained thinking. It’s fine for most unimaginatives, but your writing transcends any flat bloatmeal that most dribble out. You’re better than that.
Get over the anger at your disability (dyslexia). I can imagine that you suffered greatly as a young man during your educational years. Let that go. You don’t have to be angry about that anymore because your affliction, which most likely accounted for low esteem and perhaps failure during your youth, is actually a gift. Exceptionally bright people share the ordeal of hellish educational experiences. Celebrate your ability, nurture it and forgive the unimaginatives who held power over your educational youth. In other words, stop excessive drinking and start writing. You have a rare ability; you owe to yourself to nurture your finest strengths. The way you look at the world and the way you express it (dyslexic English) leaves a reader craving more.
No book. Paper is so over. Self e-publish. Sell it chapter by chapter on Amazon/eBay (or the like) at $0.99 each, and cliffhanger each ending. Folks will pay $0.99 to read you. I know you’re not in it for the money. Eventually you can book it if you like, “The Best of Smoking Man.”
..and..
Don’t EVER fix your syntax, spelling or anything. Your raw writing and wry observations are gold.
Nice idea from some – take advantage of Greek assets going cheap! Why don’t you go over there and take some kidneys from some kids?
Hey – it’s just business, right?
Ahh Garth …make fun of us all you want but in the end the math will win out….. and you will be a pariah among your followers
The world cannot continue to spend spend spend and go further and forth in debt forever….in the end nature will correct the imbalance…
The winners will be the ones that got out just before the end..
When I say the end…I don’t mean the end of the world…many who have positioned themselves properly will prosper in the coming dark ages…
When I read you blog I always think of Chicken little….the sky is falling..the sky is falling…..or Peter Wolf
These are not stories of nonsense..they are age old handed down traditions that try to teach and warn….
Bur alas ….many pay no head and think this time is different..it is not.
The Day The Euro Died
http://www.forbes.com/sites/francescoppola/2015/06/29/the-day-the-euro-died/
48 a box in the sky
You should of said your an owner!
Yeah I owne not a scum bag renter!
You would have a better chance getting in to her pants!
How’s paying rent to rbc going for ya !
Holy Frack!
“U.S. Manufacturing costs are almost as low as China’s, and that’s a very big deal”
http://fortune.com/2015/06/26/fracking-manufacturing-costs/
Monday was spanking day.
It sure was! But bond gains absorbed about 20% of the whacking, so yay balanced portfolio. Tomorrow is payday, which means new cash for ETF purchases. Can’t say I mind the timing!
Enjoy your commentary on the Greece drama, thanks Garth.
Schadenfreude is the word of the day.
Overleveraged Greeks are paying a nasty economic price.
Overleveraged Chinese retail investors are paying a nasty financial price: Shanghai Composite down ~5% in the first 1 hour of trading… (Source: Twitter, so somewhat unreliable for another 15 mins)
Greece will vote no. Unlike the Scots. Remember the Sparan King. It’s in there blood.
Dr Smoking Man
PhD Herdonomics
socialist government NOW in greece?
lol.
what did they have BEFORE????
I am a dual citizen with Canada and Netherlands. I live the summer months in Alberta and the winter months in Europe. (Mostly Spain/Netherlands.)
If anyone wants to debate me on how flipping wonderful socialism is, giver. But I take no prisoners. Let’s start with this fun fact: 21% GST
Here’s another: The Brown Envelope Economy is on point and the game is strong. Officially unemployment is at 25%, but people are working – for cash and under the table. They have more cash put away in their mattresses than is in the bank anyway. Why is the BEE so strong? See fun fact #1.
Want to buy a car in a socialist country? Well, better get your application in for permission. Then once you have permission, get ready to wait at least 6 weeks. When I tell them I can walk into a car dealership here in Canada and drive away within hours with a brand new car, they think I’m lying. Oh, and enjoy a €1200+ yearly car registration fee… oh, what was that? A little more than the $89 you pay Canada?
Ya, let ‘er rip – I’m ready for your socialist utopia questions. No holds barred.
“This is about ideology, not the people. Like all socialism.” Garth
Can’t wait for your blog response when Mulcair wins the next federal election. Your anti-socialism comments are shallow and of little value. As everyone knows, most countries and governments are blends of characteristics adopted from both socialism and capitalism. You’re inside a narrow box that doesn’t exist in the world.
I run because I really like hot chicks with tight bodies!!!
(But I usually run a bit SLOWER than them, alas….;)
Oh, forgot to mention: Health care ISN’T free – in Spain citizens pay €258/month for health care and welfare. They have to pay for 15 years before they can collect full benefits.
In the Netherlands, the first €150/year is out of pocket and you have to pay for health insurance. They say the €150 keeps citizens from clogging up the doctors and ER with needless appointments. They are right.
Like I said, ready, willing, and able to take your questions.
And, BTW, I’m a proud renter, on two continents. Free as a bird. ;)
It doesn’t pretend. — Garth (at #50)
Doesn’t lie, cheat, or exploit either. Let capitalism serve itself and it’s prosperity for everyone. Just like in the 19th Century.
This is about ideology, not the people. Like all socialism.
Alberta’s new slogan?
We’ve seen this all before it’s priced in. Just noise.
Bought Dream REIT @ 9.21% yield today ..Thank you
Just as an aside….
Most Greeks that didn’t work for the government weren’t making 60 euros per day while I was living there just as the debt crisis exploded.
The bell tolled for me and I got out when I woke up one morning at it was announced that the minimum wage would be cut by 20%.
People earning minimum wage in Greece, I repeat, basically everyone that wasn’t working for the government, were also the only ones paying any taxes. So basically when it was announced that the government was going to battle it’s debt problem by slashing it’s tax base by 20%, I booked a flight out.
Unemployment was at 9% at the time, it has since metastasized to Spanish levels.
Wait for it…Wait for it….The VIX has jumped to almost 19 to-day. Anything north of 20 is a good proxy that fear has dominated the market .Nervous investors are throwing out the baby with the bath water. If it goes over 20, sell your greens and buy your deeper reds. This maybe Oct 13/14 all over again!
#7 valleyrenter on 06.29.15 at 8:29 pm
==================================
I’m not a Gold fanatic, but your point about Gold made in the context of suitcases filled with “Euros” (backed by the ECB is irrelevant, in ascertaining its value, because its a given that the Euro is a currency with strength.
The value of Gold comes into play when paper currency loses purchasing power.
Now, if the Greeks had only Drachmas (as opposed to Euros) or Gold to buy goods and products with in the International Market, you’d see very clearly and unequivocally which one of the two would let them have greater purchasing power.
I am the mythological greek Canadian god Debtos Borealis….as I am a myth you may not have heard of me yet, but I will soon be your reality.
I refer you to the Paul Krugman article on Greece in the NY Times, and quote one section for your kind mortal perusal….Canada, Iceland, and Greece all mentioned in one paragraph….in spite of what Mark says a major loonie devaluation looks likely…but hey, read it for yourself
http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html
“Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently. But Greece, without its own currency, didn’t have that option….”
Puerto Rico Finance Minister Interview
https://www.youtube.com/watch?v=DDIQNO8PS8M
#66 Dual Citizen on 06.29.15 at 10:40 pm
I am a dual citizen with Canada and Netherlands. I live the summer months in Alberta and the winter months in Europe. (Mostly Spain/Netherlands.)
You must like rain…talk about slumming it in the winter time!
Greece is still in the news?
ugh.
And here i thought the markets went down in response to the Canucks letting Eddie Lack go for nothing.
Markets fall when confidence is shattered. Canucks fans are in tatters.
#26 bill on 06.29.15 at 9:10 pm — Hi bill — taking a break, that’s all!
#70 Herb on 06.29.15 at 10:51 pm — “Let capitalism serve itself and it’s prosperity for everyone. Just like in the 19th Century.”
Because BRICS and AIIB will take a fair chunk of moolah away from the west, Obama and Cameron had little choice but to introduce the TPP and TTIP, ‘tho the ramifications are not that great for the average Joe and Jane in a corporate-run west.
Well I saw Elvis this weekend in BC and he seemed to be having a heck of a time getting money out of the hotel ATM!
NOW IS NOT THE TIME TO BUY PROPERTY IN GREECE
The only thing keeping the lights on in Greece is that they still have the Euro as currency.
If you truly believe they will exit the EU then they will have to revive their own currency – a neo-Dracma.
The resolve the Greek people are showing in dealing with their “drunken sailor” spending does not bode well for them actually dealing their debt problem.
My bet is the neo-Dracma will drift down against other currencies for years to come.
@22
The Greek situation is like a tempest in a teapot. The left wing politicians are just plain stupid. Don’t they realize that when you borrow money, you have to pay it back.
$$$$$$
The politicians borrowed it. Shouldn’t they be the ones to pay it back?
One more.
As everyone knows, most countries and governments are blends of characteristics adopted from both socialism and capitalism.
Well said. Your’s is the only sane post today. Everybody is so afraid as if Stalin will reappear………..
Instead of getting hung up on the deadbeat Greeks who might get kicked out of the EuroZone, why not look at the capable new members who are joining? Lithuania became the 19th member of the Euro just this year. I’m sure they’ll make a much better member. Other countries (e.g. Poland, Czech Republic) might join as well.
Capitalism is the worst economic system. Except for all others.
Just because one can live for five years off others’ money, doesn’t mean that one can do that forever. Lower and even lower standards for everyone, censorship and tyranny. That’s what socialism offers long term.
Hopefully Greece refreshes the memories of the good doers who have quickly forgotten the Eastern block.
#57 Ben
The troika has already harvested the kidneys and everything else from the Greek youth (including their futures), so what’s the harm in picking up some assets on the cheap?
Christine Lagarde gets about $1million compensation for loaning out G7 countries tax payer’s money – pays % tax, preaches austerity.
End of story.
In Response to:
#66 Dual Citizen on 06.29.15 at 10:40 pm
“I am a dual citizen with Canada and Netherlands. I live the summer months in Alberta and the winter months in Europe. (Mostly Spain/Netherlands.)
But I take no prisoners. Let’s start with this fun fact: 21% GST
Here’s another: The Brown Envelope Economy is on point and the game is strong. Officially unemployment is at 25%, but people are working – for cash and under the table. They have more cash put away in their mattresses than is in the bank anyway. Why is the BEE so strong? See fun fact #1.
Want to buy a car in a socialist country? Well, better get your application in for permission….. Oh, and enjoy a €1200+ yearly car registration fee…
Ya, let ‘er rip – I’m ready for your socialist utopia questions. No holds barred.”
——————————
I’m intrigued Dual Citizen! How in the world does a person or company do business there? It seems like they have perfected the propaganda, and eliminated the middle class with such policies.
Do you know if it is just Huge Companies doing business, such as a commercial and residential construction service company, for example? And then the “BEE Brown Envelope Economy” for the middle class to make a living? Must be hard to grow a company , and harder to build personal wealth?
Look forward to you insights. My reasoning, it’s coming to Canada, and I see it around me in that industry since 2009.
Regards,
Game of chicken:
http://www.salientpartners.com/epsilontheory/post/2015/06/22/inherent-vice
>Greece will vote no. Unlike the Scots. Remember the >Sparan King. It’s in there blood.
>Dr Smoking Man
>PhD Herdonomics
SM … I agree with you! All my Greek friends, all CA top 1-5% earners, agree that Greece should get out of the Eurozone and get control of their currency.
All-in Greece default, GExit and seeing a strong, proud Greece someday!
Plus they hate the Germans, who they blame for this.
The Russians, they like ….
Canada should be bailing out the Grecians.
Where is your sense of empathy?
Its our duty to bail out everyone including the politician.
Garth,
Cramer is saying not to buy this dip, but to wait a bit…..should I listen to him or you??
http://finance.yahoo.com/news/cramer-danger-alert-dont-buy-221009420.html
Well, gold’s doing a big load of nothing. Isn’t this exactly the doomer scenario that should send it skyrocketing?
#39 Mark on 06.29.15 at 9:45 pm wrote:
If the leverage ratio is, say, 10 — a default of $300B removes potentially $3T of credit unless leverage manages to expand.
If a bank is defaulting perhaps. But in the far more likely case of a person or business defaulting, not a chance.
How do defaults accelerate demand against the existing stock of goods and services?
Money is used to pay off debts. Those debts may have been caused by people taking out loans, or by people purchasing goods and services. A bankruptcy cancels out one or more debts, leaving the same amount of money circulating in the economy but less debt.
Seems to me that the people who are being defaulted on probably won’t be doing much shopping since they’re now poorer.
The “people” who are being defaulted on aren’t generally people: they’re usually banks. Organisations which aren’t noted for doing much shopping. But however much (or little) they did before the default, they’ll probably do much the same after it.
Nor will the borrowers, who obviously have no access to new credit.
Borrowers who have declared bankruptcy are usually able to increase their spending because they no longer have to service the former debt. Thus they can now spend a larger share of their income on goods and services. That was seen to happen in the US after people started defaulting on their mortgages.
#80 Nosty, etc. on 06.29.15 at 11:35 pm
good to hear old son!
What concerns me a bit is the probability of a top heavy global economy oscillating within the trading programs. As more wealth concentrates to fewer individuals a single decision could wreak havoc. All our well thought out planning destroyed in a minute.
Oh well, what is the chance of that?
Aaaaaand the U.S. keeps on booming.
Carry on.
I am amazed at all the otherwise smart commentators that seem to think bankruptcy and default are not a part of the capitalistic system. If it weren’t, we would all invest in high interest rate Greek debt.
There’s a reason it is high interest rate denominated and it is not because it comes with cheap ouzo and souvlaki.
Sometimes the creditor loses and the rest of the time he just doesn’t win.
Whine about socialists and lazy Greeks all you want. But they only dance with fat cats with loose cash. Opa!
I’m in Greece right now and am surprised by their apparent indifference. Sure there are protestors in Athens, but otherwise feels like business as usual. I thought they would be a little more anxious… maybe that’s the problem in the first place?
Anyway, I suppose it’s a bit too early to scoop up a nice island property. Perhaps in a few months, as Garth suggests.
Nobody panic, OK? We’ve got to keep our composure! Will Ferrell shows us how in “Old School”: https://www.youtube.com/watch?v=QvMq2YZloZM
We had One Big Down Day in the markets in June 2014, too. Seems to be an end-of-Q2 thing. Maybe it’s just conveniently coincidental this year that we can blame it on Greece.
#89 Communist IMF chief on 06.30.15 at 12:29 am
Christine Lagarde gets about $1million compensation for loaning out G7 countries tax payer’s money – pays % tax, preaches austerity.
===
The kicker was left out somehow: Christine Lagarde’s IMF compensation is TAX FREE income.
Nice comment Garth, you got it right about Greece, and the writing is beautiful as usual!
#66 Dual Citizen,
would you mind specifying the “socialist” country you are talking about before throwing out your universal challenge?
#67 HJD,
what do you think you are doing trying to introduce realism into this debate?
We only beat up on straw/bogey men here!
#11 Llewelyn on 06.29.15 at 8:36 pm
‘When I use a word it means just what I choose it to mean”
Sounds so cb.
Can’t shake the creeping dread that this increasingly likely possibility will happen somewhere soon:
“All the king’s horses and all the king’s men
Couldn’t put Humpty together again.”
“So stock markets laid a small egg on Monday”
WALL STREET LAYS AN EGG is, as everybody knows, the most famous American newspaper headline (Variety, Oct 30, 1929).
Some years ago I spent some time reading Time Magazine articles from the late 1920’s and early 1930’s. It took a while for the Crash to be taken seriously. Press language, before the realization that a disaster was afoot, was the REVOLTINGLY FLIPPANT language of the Roaring Twenties – clever cool modern breezy etc., anything and everything except serious, serious being equated with stuffy.
I don’t see this sort of waggishness in Canadian MSM today EXCEPT for their business sections where too often a don’t-worry-it’s-nuthin-serious attitude is preferred. Poloz “Why don’t they work for free for a year” is right out of the Roaring Twenties, as is “house prices remain elevated”. Not to mention Wynne re the (supposed) economic Recovery, “I can feel it”.
Remember when Canada was a true democracy (power of the people) and the electorate was allowed to participate before important decisions were made.
When citizens in Alberta used a democratic process to replace a plutocracy the mainstream media and dozens of contributors on this blog could not contain their disdain for the very concept of democracy. (They are going to be sorry!! How could they be so stupid? Socialism always fails!!! Experimenting with the Left will only make them realize how good they had it before!!!)
Are we really surprised that many citizens of Greece have become dissatisfied with the plutocracy that rules the IMF and the EEC? Greece became a prisoner of the IMF and the EEC and future debt obligations became a form of bondage not a source of economic prosperity.
Blaming the current debt crisis in Greece on Socialism or the laziness of Greek citizens avoids the real issue facing most democratic countries in the world today. If you do not become a member of the plutocracy you will eventually become a slave to the plutocracy.
Plutocracies exploit opportunities to generate wealth. Perspectives on exploitation by those receiving wealth are bound to be different from the perspective of those generating wealth for others.
We seem to have lost sight of the fact that the IMF is charging the citizens of Greece over 3.0% on loans they could provide for less than 1.0%. Unlike Canada the EEC does not offer equalization where revenues from wealthier members are transferred to less fortunate members.
Imagine what life in Quebec or Nova Scotia might have been like without equalization payments from Alberta. The sharing of wealth is a fundamental component of democratic governments.
Do the IMF and EEC really strike you as democratic institutions?
Are you really surprised that a country that introduced democracy to the world is looking for a better deal?
This is about ideology, not the people. Like all socialism.
Sure, and the troika’s commitment to austerity-as-growth mechanism despite admitted evidence to the contrary is about the people, not ideology.
GDP -0.1% Boom!!!!
Buy a house, a condo, a shead.
BOC will cut…..Guaranteed. …..
#67 HJD on 06.29.15 at 10:43 pm
“This is about ideology, not the people. Like all socialism.” Garth
Can’t wait for your blog response when Mulcair wins the next federal election. Your anti-socialism comments are shallow and of little value. As everyone knows, most countries and governments are blends of characteristics adopted from both socialism and capitalism. You’re inside a narrow box that doesn’t exist in the world.
———————————————-
You think a guy who refinanced his personal residence 11 times should be running this country? gawd help us all if Mulclair gets anywhere near the treasury.
Mulclair saw an opportunity in 07 and wanted to be part of it, he was going to join the Tories, of course he dreamed of a big pay day ($300k) that never materialized in his favour, oh yes, this guy sure sounds like he’s all for the poor and disenfranchised. Sounds more like he’s in it for himself.
http://www.macleans.ca/politics/ottawa/mulcairs-secret-meetings-with-the-tories/
could all Canadian conservatives please visit on our Election Day and help us out? We’re going down the Greece path.
Supreme Court strikes again – states can’t force voters to prove citizenship:
http://atr.rollcall.com/supreme-court-victory-for-voting-rights-advocates/?dcz=
Worry not about Greece…Canada has its own issues right now:
http://www.statcan.gc.ca/daily-quotidien/150630/dq150630a-eng.htm?HPA
Is that a recession coming? 4 months of GDP decline. 2 more and we’re in a recession just before a Federal election, which would certainly be a boon for the NDP.
Who cares about Greece Garth.
You do realize GDP in April was negative for the 4th month in a row in Canada. That was with a “red hot” housing sector. So even that can’t prop up with creaking ship. Bottom line, Canada is already in recession. What will the natives think when they here that? You still think we raise rates under those circumstances? Quite the opposite really. Maybe next year….
Gold still down through all of this.
It’s a hedge against SFA….
Just saw this.
Thanks dude, nice of you to say that.
But let’s be honest, Noone is better or even come close to Hunter S Thompsons; Flow, action, wit and dark charm. I discovered him by the blog dogs. I don’t really read books. But I read Fear and Loathing twice. I was hooked.
As far as best and Worced of Smoking Man. It can be found free of charge in the archives of Greater Fool.
I will Definitely consider your suggestions. I like the idea of putting it up chapter by chapter. Cause I keep editing them and I will never finish.
…….
#56 saltpony on 06.29.15 at 10:12 pm
Smoking Man.
You write better than Hunter S. Thompson.
So here are a few thoughts I had and wanted to share with you.
Quit beligering the fact that you haven’t post secondary training. Those institutions are a huge social experience in babysitting and methodical/contained thinking. It’s fine for most unimaginatives, but your writing transcends any flat bloatmeal that most dribble out. You’re better than that.
Get over the anger at your disability (dyslexia). I can imagine that you suffered greatly as a young man during your educational years. Let that go. You don’t have to be angry about that anymore because your affliction, which most likely accounted for low esteem and perhaps failure during your youth, is actually a gift. Exceptionally bright people share the ordeal of hellish educational experiences. Celebrate your ability, nurture it and forgive the unimaginatives who held power over your educational youth. In other words, stop excessive drinking and start writing. You have a rare ability; you owe to yourself to nurture your finest strengths. The way you look at the world and the way you express it (dyslexic English) leaves a reader craving more.
No book. Paper is so over. Self e-publish. Sell it chapter by chapter on Amazon/eBay (or the like) at $0.99 each, and cliffhanger each ending. Folks will pay $0.99 to read you. I know you’re not in it for the money. Eventually you can book it if you like, “The Best of Smoking Man.”
..and..
Don’t EVER fix your syntax, spelling or anything. Your raw writing and wry observations are gold.
BREAKING NEWS
Greece’s longstanding friendship with Canada saves the day!
The Government of Greece is proud to announce that a partnership between our nation and Canadian businessmen Russell (‘The Cashman’) Oliver and Harold the Jewellery Buyer will provide all capital required to meet current and future EU payments until the end of July or forever, whichever comes first.
A national holiday will be declared this evening and we will worry about August if and when it comes.
Σας ευχαριστώ Καναδοί!!!
Jeff
The 50% that pay no tax love socialism. It’s the people who work hard and get taxed to death to pay for everyone else that aren’t fans.
Capitalism gives you the freedom to enjoy any lifestyle you are willing to work for.
____________________
kinda like the sub-prime mess of 2008 or the transfer of work to Asia? or did you conveniently forget these events? yeah, real healthy system, not to mention ethical
Having the NDP in leadership positions across Canada is good for the CAD.
Hahahahaha
Best sums up reality. So much for the predictions of the spring bounce and the windfall from cheaper gas:
“And thus far, we are yet to see the positives that should be offsetting weakness in the energy sector … Lower gasoline prices are doing little thus far to spur retail spending, while the weaker loonie is doing little to boost manufacturing.”
What’s crazy is people buying a $600,000 new two bedroom condo on Queen W. In Toronto living amongt hipsters. Possibly, typically shoddy skimped small new build.
#50 Herb on 06.29.15 at 10:02 pm
” “This is about ideology, not the people. Like all socialism.”
And capitalism is about what exactly, Garth?
It doesn’t pretend. — Garth”
No, it just extends.
Just like clockwork….They found a reason not to raise rates….
http://www.cnbc.com/id/102799251
No Inflation Treat, No rate increase…. they will manufacture a reason if needed.
here are the greek goverments for the last 20 years:
1990-1993 ND
1993-2004 PASOK
2004-2009 ND
2009-2011 PASOK
2011-2015 ND-PASOK
2015 SYRIZA
ND: conservators
PASO: social-democrats
SYRIZA: socialists
so the debt was created by the socialists, right ?
To curb pollution in Greece long time ago they decided to have odd ending number license plates circulate one day and the even ones on the next day and so on. Hoping the population would share car share half the time. What did the people do? They bought two cars; one ending with and odd number and one with an even number. So the pollution was not curbed, in contrary now the family members that did not drive were encouraged to do so with the extra car being around. Environment 0 : Banks 1.
This is the kind of games sneaky Greece has played at all times!!! Suflaki anyone!!!
Damn, what happened to all those bargains the “experts” said would materialize? The stock markets are up slightly today, and even GREK-NY has gone up again. Another tempest in tiny teapot inside a doll house.
The Greeks are not that far off from young Canadians buying housing… 2nd class citizens with 1st class credit (& financing via the bank of mom & dad)
GDP down again in April meaning there is absolutely no reason to expect rates in Canada to rise in the next 12 to 18 months.
#107 maxx
“All the king’s horses and all the king’s men Couldn’t put Humpty together again.”
——————————–
I can see how the horses would have been quite useless but surely the king’s men with the benefit opposing thumbs could have accomplished something.
– Mister Ed (as dictated to Mister Obvious).
On Friday people went home with the message that a Greek deal was likely and they ended up closing all banks for a week, why does anyone even read or listen to the news anymore?
the best and only advice I would give is
Find the things you like to do in life and do them as often as possible.
It is convenient that I really like Jays baseball!!
The sun is changing and life is changing. The weird events are to distract you from this.
Canada is now in recession. That’s right, two quarters of contraction.
“Right now it’s only the housing market that’s growing”
http://www.bnn.ca/Video/player.aspx?vid=647035
Now ask yourself, will Poloz increase rates? No way. Our dollar is going to get punished and you’ll be vacationing in Hallifax instead of Florida.
Bill gross says hold cash to prepare for nightmare panic selling. The biggest etf managers are building a mountain of cash for redemptions.
But meanwhile back at the greater fool magic forest everyone keep calm and buy more etfs because Garth knows better than the worlds biggest bond managers.
#94 raindog millionaire
Garth,
Cramer is saying not to buy this dip, but to wait a bit…..should I listen to him or you??
http://finance.yahoo.com/news/cramer-danger-alert-dont-buy-221009420.html
…………………………………………
Raindog Millionaire – you should listen to you.
Greece?
Look at China.
Nothing anywhere is getting better, things are just starting to unravel. Nothing was fixed in 2008.
this morning the coffee shop was standing room only.
The heated voice was all about harpo and his stupid policies setting Canada to be a third world country.
harpo preaches how the crooks should be punished and yet de maestro is just about scott free.
Why is our military in Iraq and Syria? In the meantime the political crooks are destroying our own country.
the senate and mps have forced Canadians to lose all trust and confidence in government policies. NO responsibility and NO accountablablity whatso ever. harpo is a dictator and even his lap dogs cant stand it any more.
Many Albertans have the experience what a PC regime can do to th citizens. We are very fortunate now to have Rachel bring some HOPE to Alberta.
even though the PCs were kicked out they are still spreading their Fear Mongering mantra, fortunately no one is listening to the BS.
The PCs promise everything and deliver NOTHING.
#129 CJBob on 06.30.15 at 11:57 am
———————————————-
The variable rate may not rise, but bond yields will rise to stay competitive, meaning 5-year fixed rates will go up. Garth has covered that many times.
#117 Smoking Man on 06.30.15 at 10:09 am
Just saw this.
Thanks dude, nice of you to say that.
But let’s be honest, Noone is better or even come close to Hunter S Thompsons; Flow, action, wit and dark charm. I discovered him by the blog dogs. I don’t really read books. But I read Fear and Loathing twice. I was hooked.
As far as best and Worced of Smoking Man. It can be found free of charge in the archives of Greater Fool.
I will Definitely consider your suggestions. I like the idea of putting it up chapter by chapter. Cause I keep editing them and I will never finish.
…….
#56 saltpony on 06.29.15 at 10:12 pm
Smoking Man.
__________________________________________
Consider it the Never Ending Story! You could be another Michael Ende…………….
This, the book concludes, “is another story and shall be told another time”.
I really want to believe that rates will go up, but let’s face it – rates are not going up any time soon… Not if the central banks can help it. If anything, they lower rates and more QE. I’m not a doomer, but let’s face the facts. They would have raised by now if the economic recovery was as strong as they claim it is.
Maybe rates will go up if the FED loses control of the bond market, but then again, they are resourceful critters, and who knows what other tricks they still have up their sleeve…
Garth, I hope you’re right, but I’m losing faith.
On the bright side, the longer the rates stay low, the more sheep get sucked into this ponzi scheme and the faster the bubble will pop.
I say let Canadian RE keep going up because that which cannot be sustained, won’t be. This bubble will pop not because of rates, but because of high prices. There are only so many greater fools with big enough bank accounts to keep it going… I will wait patiently for the crash, but I’m not putting my faith in rising rates.
Looks like another ride down on the sawtooth today in the markets. Thanks Greece, thanks Euro Market, thanks oh that’s it, no more thanks!
One of my friends is finally giving up on the Forex Market. He was constantly telling us of his gains (wins) however his average win $$ was less that his average loss number of $$ lost in losing trades. We can now clearly see why traders lose money despite bring right more than half the time. They lose more money on their losing trades than they make on their winning trades. Having that edge to essentially make the correct decision on what to trade I would venture is still akin to a roulette wheel, visa-vi risk/reward ratio. Anyway he is out and moving on to better investments.
Recommendations stemming from the Australian Housing Enquiry. (which seems like it’s off the rails)
http://www.propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/43524-the-great-australian-household-debt-trap-lf-economics-lobs-first-submission-into-hor-housing-bubble-inquiry.html
The one that scares me is #15, which would actually enable more lending-borrowing habits, and protect those that are already in the market. Basically subsidizing their lifestyle for the last 10 years – all at the expense of those who saw the bubble forming, and stayed away.
@#117 Smoking Man
“I read Fear and Loathing twice. I was hooked.”
So much of read fiction is quickly forgotten, but some books stick with a person. Considering that FALILV is the story of an epic bender, it is surprisingly memorable. Favourite part is on the merry-go-round bar in Circus Circus. That location is the vortex at the centre of the whole American way of life.
#92 Carpe Diem on 06.30.15 at 12:34 am
>Greece will vote no. Unlike the Scots. Remember the >Sparan King. It’s in there blood.
>Dr Smoking Man
>PhD Herdonomics
SM … I agree with you! All my Greek friends, all CA top 1-5% earners, agree that Greece should get out of the Eurozone and get control of their currency.
All-in Greece default, GExit and seeing a strong, proud Greece someday!
Plus they hate the Germans, who they blame for this.
The Russians, they like ….
….
I wouldn’t be suprised if grand chess master Putin is behind Greece taktics. Reforendom is like bitch slapping the queen.
Don’t be one bit suprised if NO wins and as fast as Creama went Russian. Greece will export and trade with Russia perhaps a naval base facing Isreal …
Greece. Serbia. Russian. all orthodox Christian
#64 Smoking Man on 06.29.15 at 10:28 pm
Greece will vote no. Unlike the Scots. Remember the Spartan King. It’s in there blood.
Dr Smoking Man
PhD Herdonomics
_____________________________________________
Not quite sure what your were trying to say Smoking Man. The Scots voted No for independence. So can I assume your statement saying that Greece will follow Scotland’s path and say no to independence from the EU?
While 71% of 16- and 17-year olds voted Yes, a similar percentage of pensioners voted No. And there are a lot more pensioners in Scotland than 16- and 17-year-olds.
Just one of many reasons. Scotland remained in the union because of old people, concerns over pensions, and people who wanted to keep the pound. The young blood wanted independence but they will live to fight another day!
BTW which King of Sparta are you discussing, Leonidas I?
http://rt.com/uk/188952-why-scotland-vote-no/
To #139, When will they raise rates?
Seniors going bankrupt now makes 10% of all personal bankruptcies in Canada.
What do you think that this is just by coincidence. This will get worse not because interest rates, mortgage rates, line of credit rates, credit card rates, car loan rates etc. go up say 1% or 1.5% over the next 2, 3, 4 years.
It will get worse because of all the high and getting higher home, auto insurance rates, property taxes, utilities, gas, water, electricity, gas prices, other taxes and tax increases, new taxes etc. etc.
People are making this much worse by putting it on credit cards, adding to payday loans, high interest short term loans at 200%, 300%+ debt service costs.
Just today, mortgage balances are growing even more and more. These people are nuts if they think this will not bite them in the end.
This is not even including those taking out reverse mortgages at rates and fees double regular mortgage rates in the 5% or more.
Even if the Bank of Canada cuts interest rates or there are declines in U.S., Canada, bond yields, this will not help them but actually put more gasoline on the fire.
http://www.ctvnews.ca/business/recession-concerns-grow-as-gdp-falls-again-1.2447081
so when they pull another rate cut sometime this year we will refrain from smirking
There is no legal basis for Greece leaving the €uro or being kicked out. Never going to happen.
Pundits who write otherwise don’t know what they are talking about, even after years of covering the Greek crisis. Sad.
Northern European politicians, of course, will and are saying all kinds of scary things. Some are lying outright, others are in bed with the corporate journalists. Ignorant of the rules and legalities and economics of their own Union. Childish. Depressing.
if Greece decide to change neighborhoods, live eu and lean towards Russia and former eastern block members, it will be nothing short spectacular implosion of standard of living for Greek people.
Quality of living index
Greece 94
Russia 28
Ukraine 20
Moldova 42
Serbia 60
Bulgaria 68
Romania 83
Macedonia 28
Germany 195
France 139
UK 156
Italy 100
Spain 134
Portugal 129
really really stupid headlines from today’s G&M
“Economy contracts again, raising prospect of mild recession”
Oh John, isn’t it mild out today though? Let’s have a picnic.
“Will Poloz cut rates again as R-word is bandied about?”
Oh John, can you please just stop bandying that awful R-word about? Please just stop bandying it about!
“Amid Greek debt crisis, a round of applause for Canada’s banking system”
No John, that’s applause, you know, clap clap, NOT applesauce, silly boy.
“How to buy expensive clothes at a bargain price”
Oh look John! An Italian silk thong for you! I got it at Dollarama!
“Low borrowing rates spur Canadians to add to mortgage debt in May”
Oh John, let’s add to our debt, I’m so spurred . . .
from the Nagraj Gazette:
CANADIAN ECONOMY FAILS ON ALL FRONTS
BoC PANICS
CANADIAN DEBT CRISIS WORRIES BANKS
FINAL DEMAND FALTERS
HOUSING BUBBLE SET TO BURST
“Planning a Greek holiday later this year? Cool. Book the flight now. But not the hotel or the car. Just show up with cash.”
If you hold an account in a bank other than the Greek ones, there is no limit to how much you can withdraw from an ATM. Well, I guess the restriction is how much you have in your RBC or BMO account.
You will also have no problem booking hotels or renting a car with your VISA.
Take extra cash though just in case as this will be preferred but your credit won’t be refused.
International tourists are up 9.5%. Flights from YYZ are pricey.
#2 Tony…thx for patronizing the KEG…KEG.Un pays me a nice monthly dividend at 5++ % p/a…and has shown a healthy capital gain….I bought at $12 and it’s currently around $19.
“This is about ideology, not the people. Like all socialism.”
Garth…For a minute I thought you were talking about the debacle in Alberta.
#127 Doug in London on 06.30.15 at 11:54 am
Damn, what happened to all those bargains the “experts” said would materialize? The stock markets are up slightly today, and even GREK-NY has gone up again. Another tempest in tiny teapot inside a doll house.
—————
Yeah, yesterday was the buying opportunity. VEE up 2% today, ZRE 1%, XTR 2/3%…
CDN 5yr bond yield down to .8 today. The people with the money not buying a rate hike this year.
“The “people” who are being defaulted on aren’t generally people: they’re usually banks. Organisations which aren’t noted for doing much shopping. But however much (or little) they did before the default, they’ll probably do much the same after it.”
Banks are owned by people. The owners of the banks will be doing “less shopping”. The depositors in said bank, if the equity capital of the bank is destroyed, will be subject to a debt to equity swap (sometimes called a bail-in). Your explanation fails on the postulated fallacy that banks are somehow detached from natural people.
#94 raindog millionaire
On average, doing the opposite of what Cramer says will come out ahead. You should not look to an entertainer for investment advice.
#143 Entropic Entity on 06.30.15 at 1:50 pm
@#117 Smoking Man
“I read Fear and Loathing twice. I was hooked.”
So much of read fiction is quickly forgotten, but some books stick with a person. Considering that FALILV is the story of an epic bender, it is surprisingly memorable. Favourite part is on the merry-go-round bar in Circus Circus. That location is the vortex at the centre of the whole American way of life.
___________________________________________
Up there on my top five list of authors. My personal fav.
“We can’t stop here, this is bat country!”
Sir Garth: Re: The discussion of the eariler today! I forgot to reply that the said company was being bought out, or it was buying some other company out! Sorry for my confusion! My sincere apology.
#141 Holy Crap Wheres The Tylenol on 06.30.15 at 1:47 pm
One of my friends is finally giving up on the Forex Market. He was constantly telling us of his gains (wins) however his average win $$ was less that his average loss number of $$ lost in losing trades. We can now clearly see why traders lose money despite bring right more than half the time. They lose more money on their losing trades than they make on their winning trades. Having that edge to essentially make the correct decision on what to trade I would venture is still akin to a roulette wheel, visa-vi risk/reward ratio. Anyway he is out and moving on to better investments.
……
Agreed one of the hardest things to trade. Im successful because I only trade one pair. USDCAD. It’s local. I know what moves it. I know when economic news releaseS are . And have a steler track record of calling market events perfectly.
But I still have the odd losing day.
Last week I said Long USDCAD 50 contracts and hold the bastard
This sucker’s going down. Quick, hand Poloz the paddles and stand clear.
http://www.bloomberg.com/news/articles/2015-06-29/poloz-compares-canada-rate-cut-in-january-to-life-saving-surgery
The Scottish vote was fixed. Every known method was used.
Also, Scotland is crawling with freemasons and orange men,two pro Empire organizations. The enemy within.
#119 Jeff,
Agreed. Working with capitalism’s basic requirement of endless growth ends up requiring a debt based Ponzi scheme.
It is, ultimately, particularly in an age of robotics and automation, the most witless, divorced from reality economic world view.
I love the ‘hard working’ capitalist bs. I’m a landlord in an American partnership. I make money doing sweet tweet. Is it fair? No. Did I work hard for it? No. Am I going to vote conservative to protect what’s mine after I receive tax credits from US taxes? No. I’m going full on NDP. Go ahead. Make my day. Tax the Hell out of me–just get Harper and his neo-troglodytes out of there, legalize pot and bring Canada back into the 21st century.
Holy Crap where’s the Tylenol?
I lived in Spain during an economic crisis. The Spanish have all kinds of extended family work arounds to deal with major crises of all sorts. I imagine the Greeks are the same way. They could very well vote for a default and a Grexit. They have had years of harsh austerity under the union, plus had their pride deeply offended. They aren’t Scotland.
Mbi was a great 2 day trade short and then long!!You need to trade these markets accordingly.Recession coming to Canada,perfect timing to celebrate Canada day.Any Canada’s one trick pony oil is on life support and the other housing will get more medicine with a rate cut.Its sad our economy can’t be diversified as Garth’s portfolio.
Ya, let ‘er rip – I’m ready for your socialist utopia questions. No holds barred
Cool dual citizen. I always like another perspective. Which is your home nation, as in which are you from? If everything is so expensive, how do they have such high standards of living?
Bank of Canada July rate cut back on the table after GDP shocker, economists say
http://business.financialpost.com/news/economy/bank-of-canada-july-rate-cut-back-on-the-table-after-gdp-shocker-economists-say#__federated=1
“I say let Canadian RE keep going up because that which cannot be sustained, won’t be. This bubble will pop not because of rates, but because of high prices. There are only so many greater fools with big enough bank accounts to keep it going… I will wait patiently for the crash, but I’m not putting my faith in rising rates.”
Agree with every word
Greece defaulted.
See?
Nobody cares.
I look at debt as “Danger, danger, Will Robertson” – a boomer recollection. I still look at debt as the penalty for indulgencies but I believe if you are going to save, then make the money work for you. It is not deferred gratification for things that don’t matter except in your own mind – status.
I see people who think they can flip massive debt onto greater fools – sad. But on the other hand, Rachel will increase minimum wages shortly. My response will be to tip less. Mind you, a lot of people don’t tip so I won’t feel bad. Rachel’s heart is in the right place but reality can suck.
Meanwhile, I see pundits stated that Rachel’s increased carbon tax will lead to increased electrical costs – time to lock in a fixed rate. Christ, I feel like a tax cow. Today I had to listen to “public servants” express their difficulty with income. My god, these people have no concept of their value of contribution. My life would not change much if they disappeared – public servants don’t get it.
I have never heard a Public Servant worry about debt – just income and why they deserve more. Kinda like c-suit guys – alas the world would end if they didn’t exist. Obviously they haven’t checked the graveyard.
Derek, thank you thank you thank you! The GarthFAQ is priceless!
“Bank of Canada July rate cut back on the table after GDP shocker, economists say”
Gee, and what has Mark been saying all along now? Lol. That’s the problem with looking at day-to-day data rather than looking at the bigger picture which has been that the the Canadian economy, ex-FIRE, and at least for a while, ex-O&G, has been performing terribly.
As I’ve said before, policy rates all the way down to zero, and some sort of QE may be required by the BoC. There’s simply such a lack of demand in the Canadian economy, especially with the severe consumer austerity now upon us.
#165 Victor V
What is a real possibility is short term rates fall and longer term rates rise.
This will be the doing of the bond market and if the spread between shorter term rates and longer term rates widen to 275 to 300 basis points, this could present a borrow short and invest long opportunity.
Unless the U.S. has a big drop off in U.S. monthly job numbers to below 150,000 per month instead of 225,000 to 250,000 on average, I don’t see how longer term rates can not climb over the next 12 to 18 months.
People have to be able to distinguish and know the difference between short term and longer term rates.
They are do not react and move the same way.
#169 MJ on 06.30.15 at 7:02 pm wrote:
Derek, thank you thank you thank you! The GarthFAQ is priceless!
I’m glad you liked reading it, MJ. Writing it was just as much fun.
I normally aim to link to the GarthFAQ every three months, so that new readers can get the blog’s “in” jokes but it’s been a bit longer this time.
#154 Mark on 06.30.15 at 3:35 pm wrote:
Banks are owned by people. The owners of the banks will be doing “less shopping”. The depositors in said bank, if the equity capital of the bank is destroyed, will be subject to a debt to equity swap (sometimes called a bail-in). Your explanation fails on the postulated fallacy that banks are somehow detached from natural people.
So you’re saying that the depositors will swap one kind of financial asset (which could be sold for cash) for another type of financial asset (which could be sold for cash). And even then the swap only happens if the defaults are large enough to destroy the bank’s equity. Doesn’t seem like it will affect the depositors’ wallets or shopping habits at all.
That sounds pretty detached to me.