If the crazy Greeks did anything wrong, it was to borrow like they’d never have to pay it back. Kinda like us. Oops.
While stocks improved on Tuesday and the lefties leading euro’s G-spot started wavering, things got a bit worse here in Canuckistan, on the very eve of our glorious 148th birthday. In fact, probably a lot worse. Turns out we’re more like the Greeks than, say, the Germans – whose leader told Athens yesterday to piss off. Hey, nobody ever said leadership was pretty.
So last month we added a whole lot more mortgage debt, because loans were cheap and we’re not. The latest numbers show mortgage debt increased 5.5% in the last year, and Canadian households now owe $1.835 trillion, which is 1,835 times a billion. That’s an amazing amount of money for a country with only 12.4 million households. By the way, 70% of all debt is housing debt – mortgages. Talk about a nation of one-trick ponies.
This lack of diversification should alarm you, unless you’re part of the problem and think it’s reasonable to have a house, a mortgage and no liquid assets. The condo economy Canada has created over the last six years is, in its own way, as dangerous as the one they forged in Ireland, or Spain – where real estate bubbles burst and no recovery ensued.
In fact, did you catch the latest econo news? We are already reaping what we sowed. At the same time families plunged into new debt and houses in our bubble markets inflated further, the overall economy was contracting. The eggheads call it ‘negative growth.’
This is amazing given the fact interest rates have been in the ditch for years, the government has forked over billions on tax credits, infrastructure programs and giveaways, and collectively we’ve borrowed and spent hundreds of billions of dollars buying houses from each other and building enough condos to blot the sky. Meanwhile the US economy has shot into recovery mode while our dollar has faded – the perfect scenario when we send the vast majority of our exports south.
And still we’re negative. Economists were not expecting April would be yet another month of declines, nor that we’d all suddenly be talking about the possibility of a Canadian recession. This was the fifth losing month in the last six, suggesting the oil price shock may have given us more to regret than just socialists. Speaking of Alberta, wildfires there (did I mention climate change?) have caused some additional oil patch shutdowns, which may mean bad numbers lie ahead for the next few months.
So, we have a disconnect. The Bank of Canada said the economy should grow a feeble 1.8% in 2015, but so far we’ve shrunk 0.6%. Soon we might actually be told that the recession started in the spring, just about the time detached houses in the GTA averaged $1.4 million for the first time, and ditto for YVR digs at $2.2 million. This would also be during a period of record-low mortgage rates and robust borrowing.
Does this mean rates will fall further? Will the Bank of Canada panic again, as it did in January, and drop its key rate just as the Americans are preparing to raise theirs? Wouldn’t another rate cut torpedo the dollar by signaling we’re in trouble, desperate for another debt fix?
Some people think so. But where does Stephen Poloz, the guy in charge of our central bank, stand on the issue?
Well, he ain’t saying. But he sure isn’t talking up Canada on the world stage. During a presentation at the Bank for International Settlements a couple of days ago he compared our nation to a dying patient, and excessive debt to a post-surgical complication.
“If the doctor says you need surgery to avoid death, the side effects usually don’t deter you, you just go ahead and manage them somehow. Other issues must be subordinate and I think of them as side effects.” But in the bank’s own words, our household debt is a ticking time bomb, a “key financial system vulnerability.” And it begs the Greek question: how can you possibly continue to borrow your way back to prosperity?
Poloz had this zinger, too, admitting that he knows what his policies are doing to the real estate market: “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.”
So, there you go. Our policymakers are intentionally encouraging people to borrow money and buy houses at their most bloated levels in history, using cheap money which will surely reset higher for all the decades of those mortgages. That’s bad enough. But it isn’t working. Sure, houses are now unaffordable and people are sautéed in loans, but the economy is also shrinking.
By the way, that same international banking body Poloz was addressing doesn’t agree with him. Cheap money is no fix, it says. It just makes stuff worse. “They in part have contributed to it by fuelling costly financial booms and busts. The result is too much debt, too little growth and excessively low interest rates. In short, low rates beget lower rates.”
Calling Canada a “small, advanced economy”, the BIS said our rates have already been too low for too long – creating a giant gasbag of a credit bubble that “far exceeds historic standards, paving the way for widespread pain once the central banks inevitably launch a new tightening cycle.”
I hope you get the picture. The economy’s shrinking. Jobs will be lost. Yet all your idiot cousin and the people at work want to do is buy houses. So they borrow. Because money is cheap. The guy in charge of rates says we’d be dead without the last cut. So he might cut again.
Too much debt. Too little growth. Nuts in power.
Our flag should have a pita in the middle of it.
146 comments ↓
First
How to deal with the fact you can’t afford to live in Vancouver.
http://i59.tinypic.com/eumuet.jpg
Open US markets tomorrow. Keep finger on trigger.
There’s nothing half way about it, Vix says it all.
Smoke and mirrors. The people may be borrowing a ton of money but so is the government. Low rates also help the government pay off the interest on its debt.
I can see clearly still…. another quarter point on the horizon. I believe you are in the other camp but hey, I’m just a small guy on the sidelines.
Sweet petunia. Canada is the next Greece. You can count on it. Except our beaches aren’t as nice.
seems like a slow moving car crash. Gyro on a pita sounds good thou.
Seniors going bankrupt in soaring numbers thanks to cheap money:
http://www.cbc.ca/news/business/seniors-going-bankrupt-in-soaring-numbers-1.3129176
Nuts in power for sure!
Bill Gross says:
“While Dodd Frank legislation has made actual banks less risky, their risks have really just been transferred to somewhere else in the system. With trading turnover having declined by 35% in the investment grade bond market as shown in Exhibit 1, and 55% in the High Yield market since 2005, financial regulators have ample cause to wonder if the phrase “run on the bank” could apply to modern day investment structures that are lightly regulated and less liquid than traditional banks. Thus, current discussions involving “SIFI” designation – “Strategically Important Financial Institutions” are being hotly contested by those that may be just that. Not “too big to fail” but “too important to neglect” could be the market’s future mantra.”
https://e4e43573badd25bed685-7a10e944c8faa70584d10c32e352d6fb.ssl.cf1.rackcdn.com/international%20outlook/TL-Bill%20Gross%20Investment%20Outlook_July%202015_JCG_non-U.S.version_exp%207.30.16.pdf
That’s $148,000 per household. Mostly fueled by CMHC. So post surgery we need to starve CMHC off oxygen – that’s the treatment. Do it Poloz, just do it.
Lets summarize shall we.
Buying things you can’t afford is a bad idea.
Commonsenseanomics not so common.
It’s funny (or maybe not so) that while most of the country indulges in a little schadenfreude over the oil & gas industry falling flat on its ass, other jobs continue to disappear. Especially retail. Target, Mexx, Future Shop, Black’s, the Gap. I am sure I have missed some, and those are just the ones that get mentioned in the newspapers. Lots of smaller mom & pop operations have shut down. Really noticing it here in Calgary. Can only imagine what other oil connected companies reeling from the O&G fallout are thinking, and I mean right across the country. It must be staggering. For some the dance music has stopped. Others think they are untouchable and as Garth points out keep spending their way to the poorhouse. It’s like they are on some kind of opium. There are always those with the herd mentality that get taken out in the equation because they weren’t paying attention.
Great Gartho. Your forgetting this most important thingee .
Communism is coming to Canada.
Today on talk radio, 1010 and 680 am have started a campaign of chirping the NDP leader.
What that says to this Dr of Herdonomics, bastard is leading huge in the poles.
My final interview for a condo in Santa Monica tomorrow and I can’t blow it. Been studying like a mad man , Convexity , Duration, Bootstraping, Interpolation.
Although I can code it. I don’t really fking know what it means, or what it does, if I did I would be pulling in 5 million a year as a kick ass swap trader. Investopedia going hard on it.
I’ve interviewed enough dogs on the technical side, but in the interview we get these useless MBAs through ridiculously stuppid questions at candidates with the entre goal of trying to prove they are smart men..
I’ve lost some good guys cause they pronounced PV01 wrong.
I’m up against these bastards tomorrow..
Back to the books.. I got to get out of the shit hole country, haven’t had a decent day to challenge god on the lake yet..
It’s depressing Comrads..
I was playing with Google, and came up with some fun facts . The US cattle industry (cows, about 88,000,000 of them), produces about 11 billion kgs of methane per year. Methane is about 23 times worse than carbon dioxide as a green house gas, so this “burped” gas is the equivalent of 240 billion kgs of CO2 per year. The Keystone XL pipeline would produce about 94 billion kgs of CO2 per year after the crude oil it transported was used. So the cows are about 2 ½ times worse than the pipeline. This does not include the extra CO2 produced to grow the grain to feed the cows, diesel fuel to transport the cattle, energy expended to pump the water to irrigate the crops, etc…
So why isn’t Obama talking about cow corks as a method of saving the environment? Easy.
Blame it on the Canadians.
Canadian economy tanking the CAD.
As per usual.
I’m enjoying my USD! Go Canada!
Well, I’m not sure slashing everything is going to grow an economy either Garth. 23% decline in GDP after doing everything the Troika wants. Hmm. 5 years of increasing misery-I think the people have had enough of their German banking masters!
Time to die, Greece
“Hey never happen here in vancouver… we have a unique position, why its the Monte Carlo of the Pacific, its so supper desirable”….
… or so I was told. By many members of the entitled university crowd…. although this is a particular quote.
they all have degrees, an education you know and are thus wise…
Silver
In spite of all our short comings, Canada is the greatest place in the world to live! From the arctic circle to the great lake waters this land is amazing! I have travelled the world and have heard a common sediment amongst other well travelled Canadians and it is this:
“No matter where I go in the world, I’ve yet to find a place that’s better than Canada” THERE IS NO PLACE LIKE HOME!!!!
LONG LIVE THE MAPLE LEAF AND HAPPY CANADA DAY TO ONE AND ALL!!!
“The BIS warned that interest rates have now been so low for so long that central banks are unequipped to fight the next crises.”
A cynic might say that central banks CAUSED the last crisis. For instance, the Fed under Greenspan was churning out money and providing a ton of cheap credit. The dot com boom, and the very credit bubble from 2004-2007 mentioned in the article that contains this quote in the Telegraph.
It is interesting that with all the talk about the advantages of markets and free choice amongst market participants, that we accept central control of currencies.
One of the major recommendations coming out of the GFC and the TARP bailouts is the examination of alternative forms of currency as a means of avoiding liquidity traps. It is a short hop from there to the idea of competing currencies.
All this talk of financial stability is good. Our financial system is hyper complex and not resilient in the least. The idea that it can be fixed by just the right sort of tweaks to interest rates and the right amount of newly created money each year is a bit of a laugh, to be honest.
Lastly, it is interesting that head of our central bank is also ignorant of the meaning of ‘beg the question’. Literacy these days.
I don’t know about a pita, but perhaps a Greek Salad with lots of lovely feta cheese.
Tell me how this isn’t going to end badly …
http://www.cbc.ca/news/business/the-national-lust-for-home-equity-lines-of-credit-should-we-worry-1.3106533
Stevie P, a debt-free household that can afford to buy a house but hasn’t so far is probably smart enough to see that RE prices have detached from fundamentals. That household you’re envisioning will probably continue to rent, even if interest rates are 0%.
My team had donairs today…whole office was garlic goodness! I can’t wait for the greek exit. Nice place to vacation, and it should be cheaper without the euro.
“…..When we cut rates to stabilize the economy we don’t picture some heavily indebted household going out and adding to their debt pile….”
_________________________
Going out on a limb here, but I’m guessing lowering the price of cigarettes is probably not the most effective way to help smokers kick their habit.
Only a moron would cater Slurpees and donuts to a Weight-Watchers meeting.
I don’t get how people are so financially inept when it comes to buying a house or condo and the mortgage balance is not the real cost of owing, maintaining, repairing and just keeping it and not losing it.
Property taxes range from 1% to 1.75% a year of the value of a house, condo depending where you live, insurance is another 0.25% to 0.50%, all utilities, gas, water, heat, electricity is another 0.75% to 1.00% a year.
Repairs and maintenance is about another 1% to 1.5% per year. You can quickly see that it can easily add up to 3% to 5% a year.
This means $15,000 to $25,000. Don’t forget that these will double, triple in 20, 35 years with no problem, eventually $45,000 to $75,000 a year even if the house is paid off.
The mortgage payments on $500,000 is about $26,000 a year. Around 40% to 50% is other costs, expenses, taxes, insurance that has nothing do with the mortgage payments.
This is not even including the fact that these are all after income tax dollars are paid so add another 25% to 40% on top of these numbers.
Don’t forget all the other costs of living people have like food, medical, clothing, daycare or childcare, car insurance, gas, car maintenance and repairs, car payments and other things that creep up on you like a broken down furnace, water heater, air conditioner, roof etc.
New taxes, deductions that come up, ORPP, garbage taxes Toronto, water rates up 10%, 300% in 11 years, electricity prices up 300% in 11 years, all 4.5 times more than C.P.I., smart meter fees, eco fees, Ontario health tax, premium $300 to $900 a year, Toronto Land transfer tax doubled, up 100%, H.S.T. on almost everything now etc. etc.
Road tolls, higher H.S.T., new environmental and carbon taxes, higher income taxes, higher gasoline taxes etc. are all just around the corner. This just makes having real estate that much tougher.
Don’t forget about land transfer taxes of 2% to 4% plus closing costs, lawyer fees, H.S.T., of $10,000 To $20,000 plus with interest, double that to $20,000 to $40,000.
“This was the fifth losing month in the last six, suggesting the oil price shock may have given us more to regret than just socialists.”
Garth do you really think CONs can turn this around?
The mess was created by these incompetents, So Trudough is saviour of this?
Are you seriously comparing Canada to Greece? Seriously?
#11 What about CMHC? on 06.30.15 at 8:00 pm
_________________________
Admirable, but the Big Six and CREA who own both Poloz and the current government would never allow anyone to harm their golden goose.
#20 Rudygq
“common sediment” indeed.
A week old, but it makes the cheese (feta, of course) more binding for Europe.
http://www.theguardian.com/commentisfree/2015/jun/22/greece-eurozone-germans-single-currency
Someone save the world and drive a stake through Thatcherism.
There have been no referenda in Greece since 1974. Unlike the Swedes, the Greeks were not asked whether they wanted to turn over ‘their monetary sovereignty to the ECB.”
Now at least, they’ll have a chance to uncouple themselves from a currency they truly cannot and never could afford.
Joseph Stiglitz’s article brings some clarity to the situation.
http://www.theglobeandmail.com/report-on-business/rob-commentary/such-punitive-targets-i-know-how-id-vote-in-the-greece-referendum/article25185325/
As an ordained charter holder in the school of herdonomics, (no obedience certs btw)
Sounds like BOC will do whatever they can to keep the house party going.
Does the BoC understand that these stupid Canadians buying houses with little to no money down will borrow until they go bankrupt? That’s exactly what will happen. Harper has destroyed Canada With his sell out policies and his socialist policies of backing all the banks bad mortgages with tax payers money.
he knows what his policies are doing to the real estate market: “When we cut rates to stabilize the economy we don’t picture some heavily indebted household going …,
Hum … BS. Central Banks must work in tandem with Governmnet. Gov could have raise deposit amounts etc. he just trying to skirt responsibility.
Not too much economic growth these days. Don’t worry the job fairy is busy creating lots of employment opportunities.
Lets face it Garth keeping the housing market afloat is the only card our Federal government has left to play. If housing starts decline below 160,000 units the impact on employment and GDP will trigger a recession for sure.
Canada hooked their horse to the housing cart and has become committed to keeping the cart moving despite the fact that the cart is headed for a cliff.
When 70% of the all housholds in Canada are hooked on the benefits of home ownership no government wants to be seen taking away the punchbowl.
CMHC = Communism. Why do realtors and bankers hate free markets ? They are commies and blood suckers of Canada
If only Canucks had played their cards differently we’d be seeing headlines like: The Turner Government today announced expansive tax breaks towards Bikes, Babes and Balanced Portfolios.
And, income splitting between people and dogs (GRRRSP).
The US is not recovering.
I am currently spending the week in Green Bay, WI, and in the last 12 months I have been in the following states numerous times……..Washington, Montana, Oregon, Michigan, Colorado, New Mexico, Illinois, South Dakota and Vermont.
Boots on the ground see the truth……..politicians, bankers and economists lie.
Image and rhetoric insert phrases like NEGATIVE GROWTH into the lexicon of our bean counters and bank presidents…it is a serious degree of unhappiness needed to rely on to manage such a liar’s paradise.
We could have showcased the GTA big time by opening up the 407 TOLL ROAD FREE to everybody for the PANAM games but instead we show all the world our inability to maximize our infrastructure assets and cause delay and heartache for the citizens and the visitors. Never mind all those out of towners who would have dropped several HUNDRED DOLLARS TWO OR THREE TIMES A DAY for a week or two on restaurants; spas; hair salons; Costo; the malls; and endless amounts of services …such a bundle of foregone sales tax the government could have rung up and more people would have worked the summer. But no we have to pretend only the rich can enjoy Toronto. Good Luck with that.
Common sense?Isn’t that a super power?No one seems to have it.
Let’s be optimistic. We may be on deep caca. But perhaps, the electorate will wake up, and get rid of the “commies” who have been running Ottawa for the last decade. We will get better. So much so, that even Smoking Man will pull a “Conrad” and come back, on time, before his OHIP card expires.
You forgot the plug about this is why you hold bonds, even when you think interest rates might go up… because you just don’t know…
Personal lines of credit are not an issue. They are usually interest only repayment facilities where you can pay the principal whenever with no requalifying. Every year the principal in effect shrinks because of inflation. A $50000 line of credit today will have an inflation adjusted value of $25000 in ten years in today’s dollars. So if you can handle $150 a month you just got effectively a free $50000. As interest rates rise so will your ability to pay as the value of money shrinks. If you don’t go crazy on credit even $50000 is no big deal.
Thought I would throw out a tidbit today. I shared about selling out of oil last year when oil was high. Well, this week I bought the ETF ZEO. I am always well diversified, but I don’t always have to hold everything. For me, any asset is like houses I have owned, when I have made a killing, I have the freedom to cash out.
Hi Garth,
Renter story, Currently rent a 1000 ft2 water front house on the St Lawrence river just outside of Brockville for $865/mo. The landlord has not raised the rent for the last 10 years (what a swell guy), but yesterday he sent me an email saying he was raising it the amount the last 10 years worth of increases (18.6%). Long story short, I told him no, only 1.6% increase this year (by law), but I feel a bit bad because I am pretty sure he is losing his shirt on the place.
Garth:
Interesting that you would mention the fires here in Alberta. I am a shut-in these days following the Alberta Health recommendation that we Fort McMoscowvites stay indoors even if we do not have a medical condition which is exacerbated by smoke. Visibility is quite reduced and the sun is a muted orange ball.
On the positive side of things, 8 minutes outdoors is the equivalent of an unfiltered Pall Mall King Size so I am saving a bundle on my usual source of particulate matter and toxins.
Cough…
Garth, you lament about the contradictions in the real estate market when in fact you should be focusing in on the contradictions of capitalism….this is part and parcel of the system….it’s not meant to make sense, it’s all about greed, making money, manipulating public opinion, and trying to impress your neighbours…do you really believe it’s a logical, self-sustaining system?
As opposed to what? — Garth
Garth, I’ve massively shorted Canada.
Burn baby burn. What’s happening in YVR is a real estate feeding frenzy. Foreign money inflows causing locals to take on huge debts.
Only a matter of time…interesting times we live in where we live in where we hope countries burn.
Garth, you lament about the contradictions in the real estate market when in fact you should be focusing in on the contradictions of capitalism….this is part and parcel of the system….it’s not meant to make sense, it’s all about greed, making money, manipulating public opinion, and trying to impress your neighbours…do you really believe it’s a logical, self-sustaining system?
As opposed to what? — Garth
_______________
dare to dream, it can’t be the only viable economic system…time to evolve and include everyone on the planet….cheers Garth, and Happy Canada Day…I just like debating
#15 RayofLight
Just wait till they find out about water vapor.
another cut on interest rate soon, what do you say Garth ?
http://www.huffingtonpost.ca/2015/06/30/interest-rate-bank-of-canada_n_7699100.html
That is quite the quote from Poloz. People need to think about it for a minute and grasp exactly where Poloz sees the Canadian economy right now. Basically on deaths door step.
Poloz’s vision to save the economy is to draw in more first time home buyers. Exactly what Greenspan did in the US circa 2000 to 2006.
Rate cut because the economy’s declining and a lot of economists say it’s coming, or no rate cut because it would only make things worse and — more importantly (sadly) to the powers that be — we’re 116 days from an election and the governing party wants to run on its economic record?
I’m betting no rate cut at least until after the election, but I could certainly be wrong. Either way, no way the CAD recovers against an ever-stronger USD, so I’m gonna stay hedged either way. Yay balanced portfolio!
39: I’m a dual citizen and go to the US all the time. I’ve commented here before each time I go at how amazed I’ve been at the recovery in the places I’ve been — derelict buildings reopened with shops, people actually excited, family members who have been unemployed for years now have jobs again. Nothing’s perfect and there are a lot of dumpy parts but compared to even a couple of years ago there’s activity and hope where there wasn’t any before.
This situation is quite representitive of Adolph Hitlers 1940’s ideology.
If you tell a lie, big enough, often enough, people will beleive you.
Hence the bill C 51 being forced through paliament like we have a country full of quasi terrorists waiting in the wings.
Beleive the crap coming out of the BoC and F’s office and they are sure you will go see [email protected] sign the papers, and keep the orgy going.
“So Much For That” gets 9/10 for humour.
Many things jumped out at me, here’s some:
– “the Germans – whose leader”
Mutti Merkel aint no Fuehrer (one hopes). [Started off as a physics prof in Ostdeutschland, and tho not pretty, she dresses sensibly.]
– “forged” as in “this economy is as dangerous as the one they forged in Eire and – ”
Made me think of the village smithy poem that starts “Under the spreading chestnut tree” and the version that follows with “I sold you and you sold me”.
– “robust borrowing”
The Latin root of robust means oak tree. “I leaned my back up against an oak. I thought it was a trusty tree. But first it swayed and then it broke.” (Lovely melody.)
– “people are sauteed in loans”
Sauter translates as jump. So I see the banksters with a giant frying pan in which Canuckistanian peanut people are jumpin up and down screaming. Dantesque.
– “I hope you get the picture”
Funniest line in the entire thing. (Yes I do.)
– “Too much debt. Too little growth. Nuts in power.”
Military march to muffled drums. Boom boom boom/boom biddy boom/boom boom boom.
– I am NOT going to comment on the unforgettable “Our flag should have a pita in the middle of it.” Except to say that now every time I see . . . and that maybe instead of the pita it should be a bowl of mixed nuts.
Seems to me it was goldman sachs that advised Greece to take on all that debt and all would be ok. let me rephrase that: goldman sachs advised SOME greeks that it would all be okay. most greeks were not informed of the hazards of drinking all those gallons of koolaid. if they had been an informed democracy I doubt they would have taken such mighty draughts of the stuff.
oh yeah I can hear the accusers now: will’s wearing a tinfoil hat.
NO. but I sure got my bull shit detectors on. Wide range. With high sensitivity.
#44 lee
Free, except for all those $150 payments, and the $50k itself, which never actually goes to 0 by itself.
That’s like “building equity” on a massive mortgage, ignoring the cost of all the interest, property tax and maintenance. Yes, eventually that $500k house will be yours… after paying $1M for it.
Hamilton isn’t worried. We got a new stadium, a new GO station and the Pan-Am games are about to start to put my town on the World stage.
Wynne has given the go ahead on a $800M LRT which is good but not really needed as most of the citizens already have free $3000 scooters from the government disability programs but who are we to turn down a free LRT.
Cheques are out. Barton Street was alive tonight with many of the locals getting an early start on Canada Day celebrations. It just keeps getting better and better in Hamilton!
#23 Your home as your personal ATM
Thanks for the CBC link, but I quit reading after the second paragraph when I realized it was about young Canadians struggling to function without the benefit of rational minds. It was far too discouraging for me.
A $78,000 wedding? Come again? Did they hire Taylor Swift to perform? Sheesh! Surely it was a blessed matrimonial celebration that will remembered for days.
A $78K divorce I could see. That would be a bargain.
#JustForSmokingMan…
http://articles.latimes.com/2013/mar/25/local/la-me-chez-jay-20130325
[NoteToHommeDuTabagisme: Bonne Chance… and please extend my HeartyCompliments to Miss Pfeiffer.]
Report from the builders’ trenches in TO:
I have this acquaintance, a very skilled carpenter. He used to work on commercial RE projects – even for the PanAm games. So, two years ago he was itching to buy a house in Toronto and he shared this idea with his manager. The manager told him that in a couple of years he will be sorry he did buy and that he better rent instead. He is still renting and very glad about it because…
Because he said the volume of work is shrinking like crazy. Commercial RE projects are almost stalled, so he switched to residential ones, and these are now slowing down very fast.
Now, I know how appreciated and sought after he is (gave me real examples, so did not bend the truth), and he is now studying to get into property management. If such skilled professionals in the building industry are thinking about leaving it, what does it say about the majority who are more or less average? They’re seriously screwed and will soon find it out.
Not pretty.
The issue with buying it today is that the price is at its peak while interest rate at its bottom. Now if the interest rate was higher, you can save some serious interest if you repay it faster so you won’t have to pay the bank that much. Not that everyone can do that. But if you can save or have a windfall from somewhere you can really do that. Not when the interest is this low though.
For all the seniors going bankrupt I truly feel for them.To avoid this from happening to people younger than fifty I recommend;
1-only purchase a home if it is 2-3 times earning with a minimum 20% down payment pay it off in under 15 yesrs
2- people need to save 30% of net pay(in retirement they advise you to live off about 70% of working pay)so when you retire no change in living standards the sooner the better as compounding is amazing
3-no debt at retirement
It’s not hard to do but it is delayed gratification which less and less people understand
But they won’t do anything this year, mabey lower the rates. Its an election years . Its about staying in power..When did the 1 percent care about the low lifes.
BTW, its not about making the poor rich, its about how they can milk the life out of the poor and make them poorer so they can be richer.
The poor get poor , the rich get rich
That’s how it goes
Cause everybody knows!
Canada would be the best Place in the world if they allowed the free markets to eliminate all the waste ( bankers, realtors , CMHC etc) . I don’t care who wants to buy a house but not using taxpayers money. You support free markets right smoking mad or are you a communist supporter? Conservatives support communism and have proven of being more communists then China. That’s a fact.
So, essentially:
-Cutting interest rates hasn’t worked in the past.
-Cutting interest rates just leads to more indebtedness.
-Cutting interest rates does nothing for the economy.
-Cutting interest rates won’t work in the future.
Well, I’m pretty much prepared for interest rates to be cut again.
That’s my level of confidence in economic genius Poloz and his desperate electioneering puppetmaster Harper.
So in other words, Poloz, what you’re saying about you’re fellow Canadian indebted and house horny freaks is they are Collateral Damage? Wow lol
Good thing I know I will be keeping my shirt on when the chips fall. Renting, invested and low debt
Thanks to Garth, too
ETF question …
I thought I had a pretty good handle on ETFs but a couple of the ones I own sometimes make me go “hmmmm:.
As in … today FXM. Dropped 3% today. FXM tracks about 30 bluish-chip Cdn companies. The worst performer today was BNP – lost 2.72%. The rest did better; some much better. ERF was up 3.3%
I thought it had something to do with the dividend date or the dividend yield. But a lot of First Asset’s ETFs have the same dates and similar yields but not the same result.
Any enlightenment would be appreciated.
CO
Comparing Greece to Canada is like comparing a club full of babes with a church full of grandmas. Canada is the most boring place to live in the world (civilized).
http://www.homegreekhome.com/en/search/results/residential/sale/r108/m2803m2812m2826m7378m10294m/propertyType_apartment/price_nd-50000/offset_20
The sport of choice for the urban poor is BASKETBALL.
The sport of choice for maintenance level employees is BOWLING.
The sport of choice for front-line workers is FOOTBALL.
The sport of choice for supervisors is BASEBALL.
The sport of choice for middle management is TENNIS.
The sport of choice for corporate executives and officers is GOLF.
The amazing facts are, The higher you go in the corporate structure, the smaller your balls become.
There must be a boatload of people in Ottawa playing marbles.
Happy Canada Day tomorrow :)
#60
A $78,000 wedding? Come again? Did they hire Taylor Swift to perform?
Hi Mr Obvious,
I am guessing that you haven’t been to a wedding for quite a while? The last wedding we went to was well over 60K, and we are going to a wedding this weekend that has got to be pushing 80K. There are 300 guests at over $200 a plate. The stag was in Vegas and there was a bridal party in Miami. None of this is uncommon these days.
The bride works for my wife. She is 3 years out of a Phd and buried in debt. She has told people that she expects couples to fork out $500 to attend….good luck with that.
The world has really gone insane. My wedding in 2005 was less than $5000.
Happy Canada Day in advance – couple of hours from now it will be here. Hopefully many more to come, with Canadians less indebted as the years go by.
Speaking of debt, the whole wedding thing mentioned earlier in the blog is simply an illustration of why Canadians are indebted. Lots of people thinking that the big splash is the reason for the occasion & yes, trying to keep up with the Jones. Its all about looking uber-rich & yes, outdoing the others in your circle. Did you know that now there are pre-kindergarden graduation parties? As for children’s birthday parties, let me just say that excess reigns. I doubt the child cares, but man, the parents sure do.
Just reported that most BC residents choosing local vacation as they cannot afford to go anywhere outside Canada!
First goes the foreign vacations, next goes the toilet paper…ah to be rich and own Canadian real estate. I am buying futures on adult diapers, although I suspect some may commando naturel and crap in woods as bears do!
Getting into big debt over a wedding with a 50% survival rate? Sounds like a car. Unless you can afford to walk away and re-do with no sweat off your back with someone else-remember, 50% survival rate not including deeevorce court & a alimony, etc.-then stay within your means.
Guests just show up & participate. No one else cares about extravagant weddings but you and your parents. The Jones’ complex
Know too many sad saps going through deeevorce court with years left of paying off the cindyrella fantasy wedding that no one else remembers
#20 Rudygq on 06.30.15 at 8:20 pm
In spite of all our short comings, Canada is the greatest place in the world to live! From the arctic circle to the great lake waters this land is amazing! I have travelled the world and have heard a common sediment amongst other well travelled Canadians and it is this…”
SEDIMENT indeed!
In Vancouver, you don’t need air conditioning in your million dollar condo. Close your eyes, tap your heels together three times and think to yourself, It’s the best place on earth!
Great peice today garth.
Canadian data has been horrible for a year. But bank economists can’t apparently read. Or spot an inverted yield curve. Today’s internals look really bad. Go figure service jobs grew with the world cup and pan am games. What can poloz really do.
Greece will come out fine. What an embarrassment German, Spanish, French, junker et al are. To come out and basically tell a country to unseat their own prime minister. And imply that they would be forced out of the euro zone. They actually coordinated to think that up. Amazing.
It’s what happens when you’ve been too powerful for too long. You become a thoughtless bully. You just believe you are right because of who you are. Remind any one of anything close to home.
Msm is starting to change their tune with new ‘leaked’ imf documents. Great tv drama. Feel bad for the people affected and living it. They have my support.
Greek politicians have run circles around the eu playground bullies. They don’t like it when you push back. My call is that there will be a deal. With restructuring on the table. Maybe a euro summit on debt/growth in the euro zone.
And for lillooet. Welcome back. 26 in the bright sunshine in my small corner of northern Ontario.
On my own dock today. I sat snacking in my favourite Muskoka chair. The maple leaf in all its glory waving in the breeze across our small bay at jeff and andreas place. My daughter says pass the tzazikki!
Happy Canada day.
“Meanwhile the US economy has shot into recovery mode while our dollar has faded – the perfect scenario when we send the vast majority of our exports south.”
The US is doing well presently, but Nostradamus Jr. (Dad) was right on the mark when he said a few years ago that the US would bankrupt TROTW, albeit through illegal wars, FFs and an increase in the fake war on terror.
Unfortunately, he didn’t take into account the cycle change from the caucasian to the yellow / red race. Probably take a couple of decades yet, but it will happen.
Meanwhile, a couple of links — Rockefeller – Obama Obama was put in place for two reasons — Obamacare and Obamatrade. Both will be implemented shortly, due to fast track.
To #58 Will
Goldman Sachs or any other investment bank, bankers are in it for themselves. They only care about making money and obtaining power through credit expansion which in turn can get them revenue producing assets like airports, railroads, toll bridges, energy and electricity, power companies etc.
However, Greece is always a country with alot of corruption and socialism. Poor economic policies of past and present has made them default 5 times.
If they were on their own with a drachma currency, they would of had to pay much higher interest rates long time ago. They could not get away with 5% to 5.5% 10 year bond yields back in 2005, 2006.
They were not equivalent to the U.S. in terms of borrowing rates. They would of been paying 9%, 10% maybe 11% so they would not be able to borrow so much as they were backed and protected for only so long under the ECB and the Euro currency.
Peurto Rico is a perfect example of a territory of 3.5 million people with $73 billion U.S. in debt and are now paying close to 10% yields.
At the great risk of outing my real identity, here is the current listing for my family home in SW Calgary that I was I was raised in. Seven of us (2 parents and 5 kids) in 1300 square feet.
A few months ago, it was listed at $650,000. Now it is at $619,000. The folks bought it for about $18,000 in about 1960.
It has been tarted up quite a bit. It even appears that the damage I caused with pucks from the backyard rink through the windows have been repaired.
Those were happy days. Frozen feet walking home from the community rink.
Happy Canada Day.
http://www.remaxcentral.ab.ca/cgi-bin/re/listings.cgi?overlord=Details&featured=&@mlnum=C4017584&listingtype=res&realtor_mysqldb=redbcalgary
I am 59 years old and living in the fantasyland called Vancouver. I am renting a luxury condo and love having my landlord subsidize my lifestyle. Just to let you know how bizarre this city is my fiancée left me because I am not drinking the real estate kool aid. She has ridden the appreciation wave and has a house worth 1.9 million. She thinks she is an investment genius and believes by leveraging herself to the tits……which aren’t very big and probably aren’t worth much in the open market…..she will be worth over 5 million in a few years. We have reached the peak when a woman’s main reason for breaking up an engagement is because I believe real estate will crash in LaLa land. She also only makes about $60,000 per year, has a 1.8 million house that she has to withdraw approx. $20,000 year from to make ends meet. I am considered a complete wack job in the city that everybody knows is DIFFERENT and will never collapse. I will sit in my rented luxury condo and watch as the city collapses beneath me…….and no when she is bankrupt and homeless I won’t take her back. Even love in this crazy city is based on real estate.
Unbelievable.
When the average family, with help from the bank of mom and dad, basement rentals, third jobs, ultra low interest rates, subprime mortgage lending and, monthly scratch ticket winnings, cannot afford the average home…then the party is over. We might be a nation of one trick ponies when it comes to debt, but we are magicians when it comes to the ways of acquiring it. Amazing the things people will do to earn themselves a mortgage.
The BIS is also suggesting the central banks are out of tricks to help fight the next financial crash. Link:
http://business.financialpost.com/news/economy/world-out-of-firepower-to-stave-off-next-financial-crisis-because-rates-too-low-for-too-long
The new ForEx rate for the Drachma/Eur is 1.00
1.00 EURO equals 1.00 wheelbarrows of Drachmas (wheelbarrow not included)
To buy a pita takes a friend with a pickup truck.
http://www.thestar.com/business/real_estate/2015/06/18/price-of-a-new-house-hits-new-record-783995.html
The link in number 23 says he wants to borrow 40k (40,000) more on his highly mortgaged house to install a glass railing on the staircase. Also, they have two investment condos.
Honestly, I think the article is trolling us… that’s just too insane to believe. I DO NOT believe that article is true.
#33 West Coast on 06.30.15 at 8:54 pm
There have been no referenda in Greece since 1974. Unlike the Swedes, the Greeks were not asked whether they wanted to turn over ‘their monetary sovereignty to the ECB.”
Now at least, they’ll have a chance to uncouple themselves from a currency they truly cannot and never could afford.
Joseph Stiglitz’s article brings some clarity to the situation.
http://www.theglobeandmail.com/report-on-business/rob-commentary/such-punitive-targets-i-know-how-id-vote-in-the-greece-referendum/article25185325/
…………………………………………………………….
West Coast, Thanks for the link to Stiglitz. The article makes sense to me. I would vote “No” in the upcoming Greek referendum. The European “right” is out to destroy the democratically elected left-wing Greek government. And Garth appears to be cheering on this ugly punishment of Greek citizens. Too bad.
Regardless of policy rates, mortgage rates would not be as low as they are if the banks had moral hazard.
The banks do not have moral hazard because of the CMHC and because of government backing of private mortgage insurers by “only” 90%.
That’s the problem.
The solution is an enigma.
As more homes are sold the more money the government takes in, as in the property purchase tax.
Greece will dive, and if they had some sense revert back to their own currency, the EURO is done for. But love Greek food ..
Allowing our courts to be used by foreigners using leftist/green blob proxies to block Canadian resource progress has denied a trillion in tax revenue to flow through into infrastructure and social spending.
Anyone innocently wondering why Canada is in a pickle who at the same time supports the Liberal- Green Blob – American -Russian- Hedge Fund- Rockefeller- Tides Foundation agenda against Canadian industrial progress should learn that the magic money hole underneath the Parliament Bldgs ran dry decades ago.
https://twitter.com/FairQuestions
3 oil sands projects were down in May but Chrysler restarted its Minivan plant in Windsor in May so maybe offset.
In Rome – everyone seems sanguine and could care less about Greece. Newspapers this morning said about the same thing as our genial host. ” This is what we expected” and Italy says they’re prepared – if things get tricky. Our Hotel, just above the Spanish Steps is busy. Oh, and if you think food is expensive in Canada – a can of Coke is 15 Euro at this hotel.
The streets are packed and tourists are frying in the 34 degree heat.
One day the economy is recovering, the next day it’s all gloomy…
Forecasting is pointless.
The US won’t be raising interest rates. 100 million unemployed and 50 million people being supported on food stamps. 210 trillion total debt including unfunded pensions and healthcare. Really sounds like their economy is booming. From my understating there is around 200 trillion dollars of total wealth in the world which would mean the U.S. has more debt that all the worlds wealth. I think we are in for an unprecedented ride over the next few years.
#37 Llewelyn,
May I suggest a friendly amendment to your comment?
“Canada hooked their horse to the housing cart …” We did more than that, so I would add –
“…, then put the cart before the horse.”
Happy Canada Day to all of us anyway.
@ #25 Corban on 06.30.15 at 8:26 pm
My team had donairs today…whole office was garlic goodness! I can’t wait for the greek exit. Nice place to vacation, and it should be cheaper without the euro.
Why wait impatiently for it? There are cheap tourist destinations already in the wider Med region: Syria, Libya, Tunisia. Sudan and Yemen come to mind also, if you’re looking for the best bang for your buck.
I just locked in for 5 years at 2.44%, you mean I could have waited and the mortgage rate would have been lower? I thought rates were going to go up.
#91 — The Euro is not done and Greek food is over rated.
Talking about Canadian flag. WHAT DOES it have pictured on it, that it needed to be covered by a maple leaf?
In 2007 financial institutions were busy packaging toxic mortgages into complex derivatives and pocketing billions of dollars in profits. When the fraud was discovered the world was thrown into panic mode.
In 2007 gross world product was estimated at $56.840 trillion.
In 2007 total worldwide debt was $35.4 trillion, or 62.3% of gross worldwide product
By 2014 gross world product had increased to $77.6 trillion, an average annual increase of 4.55%/year
By 2014 total worldwide debt had increased to $63.0 trillion, an average annual increase of 8.6%/year
By 2014 total debt represented 82.2% of gross worldwide product. Yikes!!!
If current trends continue through 2019 total debt will have escalated to $96.0 trillion and this debt will represent 100% of total worldwide production.
It is hard to be too critical of Greece when the entire world has been on a credit binge, a binge that has made financial institutions around the world, and their executives fabulously wealthy.
Wages of the majority of workers who generated products around the world however have barely kept pace with inflation, or have actually declined in real terms. Notice that the Federal Reserve avoids any reference to average wage levels when bragging about economic growth in the USA.
At the risk of being branded a ‘socialist’ I simply ask who is really benefitting from current monetary policy. Surely the fact that the average debt of Canadian citizens now represents 163% of average income is an indication that the Canadian economy has become unbalanced.
At some point in time the population of Canada has to look through the eyes of their children, and their grandchildren, and imagine what the future might look like if the current feeding frenzy continues at its current pace.
TS Eliot had it wrong. This insane race to the bottom will end ‘not with a wimper but a great big bang’
Feeling like you just got fracked?
http://www.theguardian.com/money/2015/jun/30/fracketeering-capitalism-power-hosing-estate-agents-cakeage
#27 Nina Harley on 06.30.15 at 8:33 pm
I don’t get how people are so financially inept when it comes to buying a house or condo and the mortgage balance is not the real cost of owing, maintaining, repairing and just keeping it and not losing it.
blah, blah, blah, blah.
Nina Harley is Victoria Real Estate Update.
Google Nina Hartley, shes hot!
@84 Ron
“I will sit in my rented luxury condo and watch as the city collapses beneath me.”
Hopefully not literally! Seriously though, I’m sorry for your disengagement, but it sounds like you may have dodged a bullet there. It’s kind of illogical to dump someone without a house when you already have one. Surely a $2M house in Vancouver is big enough for two people to live in.
Oh well, you know what they say: “The best revenge is a life lived serving well-cooled dishes” or something like that. It sounds like it’s time for you to double down on the balanced portfolio contributions, find a younger, bigger-titted girlfriend who appreciates the virtues of renting, and maybe get a motorcycle. Then, when your ex starts begging you to take her back, invite her over for sandwiches and iced tea, and surprise her with your new babe.
#95 BG,
that’s because forecasting is like navigating a ship only by the ships log. A well-kept log will tell you where you are and how you got there, but it can’t get you where you want to go. That takes a rudder and a helmsman.
The good ship “Economy” has neither. It is a galley in which each oarsman follows his own beat. It might veer to port or starboard depending on which side temporarily happens to have the most “pull”, but it neither has nor can hold a course.
“Invisible hand” anyone?
Mr. Poloz basically said he is kicking the can down the road (‘doesn’t worry about the side effects’). This should not be the mandate of central banks to effectively play politics. A central bank should be focused on curing that which is making the patient sick not injecting him with adrenaline and a fresh coat of lipstick.
Imagine if a doctor received a drug addict and instead of weening them off (at discomfort to the patient but in his/her best long term interests) prescribes higher doses of LSD, side effects be damned.
Finally, from a global (not just Greece) perspective, I don’t believe any nation has the ability to pay off its debt but rather focuses on its ability to service the debt.
In my view, the problem is structural reliance on government. Even our private sector is run off of government stimulus with infrastructure projects, sred credits, boondoggles, public sector wages, auto bailouts etc…
It’s a tough problem, but the fact that the central bank is refuses to tackle it, and if the problem is a credit bubble – and the bank is purposely fueling it, than god help us.
Wedding Economics 101
“The length of a marriage is inversely related to the cost of the wedding”.
I do enjoy my life in Kanada, a corrupt 2nd World country.
I posted before all new infrastructure projects (transit, roads, building) in GTA run massively overbudget as reported in the papers. Legal graft to the Sunshine list Crown corp. employees and contractors. SNC much?
Stunning display of 2nd World technology:
We got a new rail link from downtown Union Stn to the Airport. Takes almost 1hr and full fare is $35. That’s nice. Uber costs me $35 from front door to airport in 20 min.
How about a high speed bullet or mag-lev train? Naw, 1st World countries get those.
– Toronto roads being choked off with new bike lanes. Get your State approved rickshaw, scooter or pedal bike ready. The attempted shut down of our highways due to Pan Am HOV lanes has begun. Get used to it. Gardiner ‘Distressway’ soon to be torn down.
(Of course the Pan games are massively over budget to taxpayers.)
Elites charging us 10-20% of our income for ancient technologies like Electricity and running water!
Most going to crown corp employees and contractors high wages. Think of it, we are still burning coal for electricity. Is this 1800s? All that new generating technology is off limits to us. Tidal bore, solar, biomass energy re-capture.
Joke’s on us. Elites flying around in private jets staying at 6-star hotels and resorts.
While signs in downtown office buildings admonish us to wear a sweater, turn down heat, conserve power?
Why? Unlimited power and resources are thrown at dirty war overseas.
All the king’s horses and all the king’s men. Some things never change. That face on rear of our coinage…
Bill Gable #94
Thanks for the info Bill. I will be seeing Italy in September, and as I always live like a king on a pauper’s budget in Mexico, the DR, and Cuba, I have a feeling Italy will be a challenge – especially with a $15 Euro can of pop. Yikes! You gouge for cash when you are broke.
Does everyone like action movie franchises?
Maybe the best way to frame the coming events is to think of your favorite action movie franchise….I like Die Hard.
At the end of the movie, the ‘good guys’ beat the ‘bad guys’, only they don’t and we get sequels.
In our world the west are the bad guys and the east is home to the good guys.
After some set changes and re-organization, our own sequel will start, everything will be the same, but different!
#110 Don Derc on 07.01.15 at 11:10 am
Bill Gable #94
I have a feeling Italy will be a challenge – especially with a $15 Euro can of pop. Yikes! You gouge for cash when you are broke.
————————————————————-
Sounds like B.C. Happy Canada Day to the dawgs …
And, as we know 2nd and 3rd Countries are dominated with corporate influence. . Low-paid and TFW workers are the future. Why they’ve clearly telegraphed their plan: $15 minimum wage is planned. The only wage.
What’s wrong, auto assembly employees in US right-to-work states earn this much. We deserve more? But their housing costs 50-80% less than ours. Oh wait. There’s one more step in the plan…
I wonder which corp. leaders are behind this. How about that elected senate and senate reform? Joke’s on us:
http://www.cbc.ca/news/politics/leo-housakos-says-measures-to-pass-bill-c-377-through-senate-within-rules-1.3131760
Look, can we stop the “our taxes pay for roads and firefighters” nonsense? We’re living in a run of the mill corporate fifedom. Taxes are funneled off into special interest projects.
Many people we know in downtown Calgary veterans of O&G and related service companies have been laid off. We are still working for now but nearing that age when our opinions and exoeriences are worth less and less to the junior geniuses running companies and we turn invisible. such is human nature which never changes. Another round of large job cuts is rumoured for end of summer. The large outfits seem to be signalling that this is not just a quick and dirty slump. A friend’s daughter works in a legal office and says that they are flooded with bankruptcy and divorce cases. Grateful to have paid our modest inner city joint off a few years ago and stayed where we have been for decades. The place is just a house and we value it as worth no more than what we paid for it twenty odd years ago. Two cents above that is just pure sh*t-house luck. Not wealthy but not in debt. My advice to kids eager to buy a house here? Don’t. Follow Uncle Garth’s sage advice.
89:
The article blames the austerity as the culprit in the shrinking Greek GDP. Could it be Greek GDP prior was an illusion based on debt? Kind of like Canada’s economy now with a housing/credit bubble fuelling most of it? Once the bubble pops things are going to look much less prosperous here too. GDP will tank.
Life is pretty simple. You make X dollars over your lifetime and you spend X dollars over your lifetime. It works for both nations and individuals. If you choose to spend or borrow more at the start you will have less in the later years and visa versa.
The Greeks choose to live the good life for the past 40 years by borrowing, spending, not paying taxes and working less. Now they they have to stop borrowing, spend less, pay more taxes and work harder. It seems fair to me. Why should the German who worked 50 hour weeks (while the Greeks worked 25), lived conservatively (while the Greeks partied), saved (while the Greeks borrowed), payed taxes (while the Greeks evaded them) so they could retire at age 65 have to pay for the Greeks now who want to retire at age 60? It is partially unfair to the young in Greece who didn’t get to participate in the party, but that is life. You are born into circumstances that your parents and the governments they elected provide. Blame them. There are much worse places to be born today than in Greece. There will be opportunity in Greece but first they have to suffer the hang over from the party. That is the way life works. There will be a hang over no matter which way they vote.
Canada will go through something similar in the future. We are partying now with the money being borrowed for housing. That will mean a hang over in the future when the money has to be paid back. We are doing it to ourselves. Just like the Greeks. I hope people do not expect a different result.
@ #109 TurnerNation on 07.01.15 at 11:09 am
Yes. You get get a standing ovation from me for that post.
The scariest documentaries you’ll ever watch are the ones that do a serious job of covering Agenda 21. Something tells me you might be familiar?
There’s a reason such seeming idiocy as bike lanes is happening all over the Western World simultaneously. This so called sustainability agenda is choking us all to death with traffic, high density living, GMOs, funding cuts, walling off the commons, refusing to provide services to even slightly rural areas, creating a monster out of wind energy instead of doing it sensibly, noise pollution, cuts to education, the corporatization of science, criminalizing of truth, pick-pocketing with more and more fees and fines, incomprehensible legislation, secret trade agreements, turning doctors into a virtual Pharma Enforcement arm… I could go on.
I know how this reads to those who are still living in the dark, but for those of us who have studied, who have learned, who are old enough to remember the way it was before 9/11 and who have the guts to be honest with ourselves, well, we see the writing on the wall.
@ #107 Catalyst on 07.01.15 at 10:28 am
Imagine if a doctor received a drug addict and instead of weening them off (at discomfort to the patient but in his/her best long term interests) prescribes higher doses of LSD, side effects be damned.
—————————————————–
But they do – just not with LSD. they do it with all the drugs they prescribe, though. doctors no longer look for underlying causes as their real bosses make big $$ selling patients individual pills for each symptom.
How many times have you ever heard someone say “I’ll be able to stop taking my blood pressure medicine next month” or “thankfully I’m all finished with insulin / my inhaler / the remicade / etc.”
Maybe it happens.. but I’ve never heard of it.
Prime example of how insecure we are… article on CBC
“Canadians are often curious about how others see them, so, for Canada Day, with the help of the International Council for Canadian Studies, CBC News reached out to the 7,000 or so academics outside Canada who teach courses about Canada.”
http://www.cbc.ca/news/canada/how-canada-is-perceived-around-the-world-1.3132343
#115 BS on 07.01.15 at 12:23 pm
“hangover from the Greek party…”
So true – funny how many commentators here want to blame “corporate executives” or “government” but don’t take responsibility for accepting their role in creating the bubbles. People are generally self-serving but some are self-serving in the short-term (teenagers and socialists) and some are for the long-term (entrepreneurs and depression-raised kids).
It depends on where you go in Italy.
Come to my part, way down south in Irsina, Basilicata and a can of coke or beer is one euro and that 15 euros buys you 3 gallons of white wine!!
As I predicted, deflation is no where to be seen and the BoC’s actions combined with the direction of the Canadian economy is keeping the CAD low.
This will continue as Canada continues to be an importer country running their 7th consecutive trade deficit.
Happy Canada Day!
Two things, the better comparison for Canada’s future is not Greece it is the Netherlands: http://www.spiegel.de/international/europe/economic-crisis-hits-the-netherlands-a-891919.html
Secondly, why are taxes absurdly high in places like Greece and developing nations ? Not because everyone is a socialist it is because tax evasion is very high and the less collected the higher the tax rate will be to get the same absolute amount of currency. It is one of the reforms that both the IMF and the government of Greece agree needs to happen.
Greece is a talking point for 24/7 new channels. It means little and less.
Another month of strong job growth in the US
http://www.reuters.com/article/2015/07/01/us-usa-economy-employment-adp-idUSKCN0PB4OI20150701
Construction too
http://www.reuters.com/article/2015/07/01/us-construction-spending-idUSKCN0PB4ZC20150701
Growth is on track for federal tightening. For the past 6 month period the run-rate meets targets, they’ll probably get ahead of the ball and tighten without waiting for the full year. Count it.
So true. Looking back at all my friends and families marriages almost all of them that had the big lavish wedding are divorced within 5 years while most who did minimal weddings are still together.
I have a friend going through it right now. Dream wedding with 300 guests, stag and stagette in Vegas (different times), 6 week honeymoon in Europe, $1.4 million condo bought 1 year prior. All paid for with credit. Now they are broke due to debt and getting divorced 5 years later. Lavish condo is rented out because they can’t make the payments and they are living in a rented basement suite.
Could it be those who have this fantasy of how life should be, which never materializes even after the ‘dream’ wedding, end up in divorce because the fantasy of what they deserve does not come true. The expensive wedding, new cars and the big house do not make you happy if you are not already happy. Especially if you acquire all that with borrowed money.
Weddings to me seem so dated anyway. First off weddings used to be paid for by the parents. Not so much anymore. Paying for a wedding yourself is kind of like buying your own birthday present IMO. Almost everyone who gets married today already lives together, has been sleeping together and already has all those useless gifts you receive at a wedding. You no longer need the wedding to get your life started as it used to be. For most people nothing changes after the wedding. Nothing wrong with getting married and having a little party after but no reason to dump money you don’t have for the sake of a few photos nobody wants to look at anyway. After the first 10 guests nobody really wants to be there.
From the chilling predictions dept.:
Kids will be taught via tv screen by a single remoted teacher – or via a A.I. robot (see IBM’s Watson. Same IBM which lent support to 3rd Reich) -and be drugged up.
How many kids already are rightly or wrongly diagnosed with Asp. or Adhd or Autism and given a pharmaceutical solution?
A single staffer (TFW) will monitor many classes and administer punishment. Which will be: blocking kids’ smart phone internet access perhaps via blocking of government issued Internet credentials. It’s coming, t-t-terrorists could make use of internet ya know!
Taking away a kid’s phone these days will induce stress and social isolation.
But there’ll be a drug for this too. Don’t believe me? There’s a drug for Restless Leg Syndrome. Look it up…
We need a catalyst. Maybe austerity and lay off teachers.
Remember years ago I said Iceland was a test bed for what’s to come? They were a perfect homogeneous and isolated test bed. Now we see this most countries. All computer simulated. This is true.
#109 TurnerNation
funny I keep saying same, and so many times I was told to go back to $#!7 country that I came from, just because I pointed an obvieous.
Not that I’m bragging, now I’m down to 5 friends and one quasi friend…
So tell us more about that uber drive to airport, was it a realtor(r), driving it and trying to solicit some new business?
Stumbled on a website called Canadian Mortgage Trends. Interesting piece:
“These measures will reduce mortgage discounts among bank challengers, especially on conventional mortgages. That, in turn, will likely cause banks themselves to price less aggressively since banks are continually looking to maximize margin and not lead on rate.”
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2015/06/major-crosscurrents-for-rates.html
Wall Street and the Greek Financial Crisis
BILL BLACK and MICHAEL HUDSON
http://www.counterpunch.org/2015/07/01/wall-street-and-the-greek-financial-crisis/
Is there anything Canada can learn from all of this? Nah, we’re different. We’re so special.
“How many kids already are rightly or wrongly diagnosed with Asp. or Adhd or Autism”
pandas disease
#120 jane 24 on 07.01.15 at 1:09 pm
How much does getting robbed (face to face) cost you though?
I hear the wine around Naples is a little tainted.
https://www.youtube.com/watch?v=vBHNmw0A80M
Porter Airlines got fined 150000 for Spam they aren’t complaining this can be a big money maker for the government with 320000 complaints think of the possibilities!!! CASL has the answers anyone can be fined not just business I wonder what happens if u can’t pay!!! I wonder when a non Canadian company will be fined you know the ones… Hmmm too much like work… Wasn’t that who the law was supposed to cut down on??? I get more crap now than ever… CASL prevents an affordable way for small business to get the word out now one complaint and they can shut you down permanently guilty till you prove your innocense, unless you are a mega company with a host of lawyers u are screwed!!! My advice screw it I’ll offer my services to Any one but Canadians and give them the advantage!!! Besides even with contracts getting Canadians to clear up their account is a PITA lately!
#27 Nina Harley on 06.30.15 at 8:33 pm
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You sound inept on a couple things. $26000 a year is closer to a 400k mortgage, not 500k. Also, maintenance is highly variable. On a brand new build, you may not have any substantial maintenance bills. But budgeting 1% per year is necessary for an older home. If costs double and triple over 25 years, there’s a chance your home value does too.
This should come as no real surprise.
Right wing governments, always, without fail nuke economies by bad practices, and giving money away to their rich buddies.
… Then they’ll blame it on the lefties who replace them just as it all comes tumbling down.. I feel sorry for whoever is due to replace Harper.. They’ll get the blame for this mess.
… Joe on the street hasn’t seen what’s happening yet.
Washed Up Lawyer: Visibility is quite reduced and the sun is a muted orange ball.
ominous
here is the current listing for my family home in SW Calgary that I was I was raised in. Seven of us (2 parents and 5 kids) in 1300 square feet.
are you ever in Ottawa? ( I’m never in Fort McMurray )
[email protected]
james: “The BIS warned that interest rates have now been so low for so long that central banks are unequipped to fight the next crisis.”
I’m not an economist but that’s what my intuition tells me
personal ATM: from your link: Murad Ali and Arsheen Haji live large thanks to easy access to their home equity lines of credit, joining the many Canadians succumbing to the same temptation.
obviously this living large cannot continue
Suede: Sounds like BOC will do whatever it can to keep the house party going.
sounds like the BOC has just about done all it can
idiots: Does the BoC understand that these stupid Canadians buying houses with little to no money down will borrow until they go bankrupt?
well I do. With a team of highly paid economists, how could the Bank of Canada not?
Llewelyn: Lets face it Garth keeping the housing market afloat is the only card our Federal government has left to play. If housing starts decline below 160,000 units the impact on employment and GDP will trigger a recession for sure.
I think we’re looking at a new world. It’s naive to think that the cards the US played as their housing crashed can be played by the Canadian government today.
devore: That’s like “building equity” on a massive mortgage, ignoring the cost of all the interest, property tax and maintenance.
especially when you don’t pay down the mortgage
gladiator: I have this acquaintance, a very skilled carpenter. He is still renting and very glad about it because he said the volume of work is shrinking like crazy.
that got my attention
Ron: I am 59 years old and living in the fantasyland called Vancouver. I am renting a luxury condo and love having my landlord subsidize my lifestyle. Just to let you know how bizarre this city is my fiancée left me because I am not drinking the real estate kool aid.
good for you Ron. Better now than later.
Day of rest. Some trading. Then back to the tax slave farm.
One more observation, anyone with their wedding photo still up as their Facebook profile pic 6 months or longer after day of is unhappy. Seen this 5x.
ps. I’ve had only three uber drivers from same background as me. Two were realtors.
I use uber 2x a week. Mainly hopping around for nightlife.
Agree on the lavish wedding often equals early divorce comments. Because the #1 reason for splitting up is – issues (arguments) about money. Married in 1985, spent about $500 (not a typo) on the wedding including the dress (a fabulous sari for less than $100). Still together 30+ years later:)
To #104 Broke Dick
I can see why more Canadians are going bankrupt. It is in your blood. They are lost.
“Canada is the most boring place to live in the world (civilized).”
lala is AWESOME!
And about oil…
It is truly amazing how Mr. Poloz, and others before him, are the ones for creating our Canadian housing bubble. Bank of Canada will lower AGAIN, interest rates, because that is all they know, and all they got left.
When you borrow to consume today, you are spending future earnings today. So, future will be bleak for the economy. That is where we are today. Almost at the edge of a deep cliff. A little more, and we are falling to unknown future.
I am getting ready financially for a 10-20 years of economic pain, that was created by our own making.
I am renting, save 20% of my earnings, do my own at home cooking, and live a comfortable but simple lifestyle.
I never listen to Bank of Canada predictions, their history is bad, any Bank economists, our Governments, and many people in general. I make my own decisions.
Congrats Linda #137. $500.00 you did better than me. Married 21 yrs. Married Farmers Daughter. He Butchered a steer. My Father bought the Booze. Picked up my suit $400.00. Wife Bought a Dress $600.00. Rented town Hall. I think we were around $3000.00 all in. Two hundred guests. Approx $8.00/plate. Still happily Married.
GT: “Too much debt. Too little growth. Nuts in power.”
CLAUDIO BORIO who works for the BIS commented on its recent report criticizing historically accommodative monetary policy: ” . . . too much debt, too little growth, too low interest rates.” The idea here is that what’s needed is a normalization of rates.
Obviously Mr. Poloz disagrees with GT, Claudio, the BIS, Nagraj and others (possibly even with the neckless midget granny in NY), but, it seems to me, that Bay Street’s been howling for a rate cut. Nuts everywhere on Bay Street too, eh? Yes.
Well, reasonable people must needs lead somewhat solitary lives.
Uber Driver Earnings – Do They Clear Minimum Wage?
NO! at least this driver, that wrote this, dint…
http://jetsettershomestead.boardingarea.com/2015/01/19/uber-driver-earnings/
interesting read
#128 Godth,
someone please tell me – and show me – it isn’t so!
The Leafs got rid of Kessel, dumping him in Pittsburgh. There goes a 8 millions/year problem gone.
Happy Canada Day!