A tale of two nations

FAKING

In Washington this morning:

Federal Reserve chair Janet Yellen said prospects are good for further improvements in the labour market and the economy, keeping the central bank on track for an interest rate increase in 2015. “If the economy evolves as we expect, economic conditions would likely make it appropriate at some point this year to raise to raise the federal funds rate target,” Yellen said in testimony prepared for delivery before the House Financial Services Committee in Washington. (Bloomberg)

In Ottawa this morning:

The lower outlook for Canadian growth has increased the downside risks to inflation. While vulnerabilities associated with household imbalances remain elevated and could edge higher, Canada’s economy is undergoing a significant and complex adjustment. Additional monetary stimulus is required at this time to help return the economy to full capacity and inflation sustainably to target. (Bank of Canada release)

Translation: So much for the dollar. Forget the real estate gasbag. Let’s push families into more epic debt. And kick the can down the road – at least past the date of the next election.

DEBT

Immediately after the Bank of Canada shocked once again with a rate cut the dollar (as predicted) plunged, tumbling more than a cent. Bond prices surged and yields slumped. The Toronto stock market jumped a hundred points. And convoys of leased Audi A7s piloted by giddy, aroused realtors spontaneously appeared in downtown Toronto and Vancouver, honking uncontrollably while leaving a trail of moist Re/Max business cards.

The contrast between America and Canada is arresting. In the States the Fed will raise rates, cut stimulus and contain the inflation that lots more jobs bring. In Canada the strategy to rescue a ship sinking in debt is to have everybody borrow more, dragging demand from the future while blowing up a massive and dangerous asset bubble. It’s hard to see how we can ever have a ‘soft landing’ in 416 or 604 when house prices have risen 45% and 30% respectively over the peak of the last bubble.

The average SFH in Toronto costs $1.1 million, while in Chicago the average listing price is $335,984. In Vancouver a urban detached house now goes for $2.2 million. In Seattle the average list is $627,889. A 30-year mortgage in the US costs 4.3% and a five-year adjustable is 3.1%. Both have been rising this year. In Canada you can now borrow a five-year variable-rate mortgage for 1.98% – even before being nipped for today’s central bank folly.

As this pathetic blog has pointed out (in vain), house prices are negatively correlated to mortgage rates. As rates fall, houses increase and affordability falls. Rising real estate values attract more and more capital, concentrating wealth and turning our society into a one-asset orgy. Meanwhile consumer debt grows twice as fast as the rate of inflation and three times quicker than wage gains.

By the way, look where our dollar sat two hours after being Polozified:

DOLLAR

And why’s this happening? Why did our central bankers just exacerbate the imbalances, ensuring more bad consumer behaviour? Because the economy is sliding, exports are falling, jobs eroding and commodity prices fading. The growth forecast has been slashed to 1%, but it could also be negative. How ironic. Bad news is good news. Before it becomes really bad news.

The big banks will be cautious in adjusting their prime rates and likely won’t pass on all of the cut (TD was first with a trim of just a tenth of a point). Mortgage lenders will be more aggressive. Bankers are smart. They know this is an 11th-hour, pre-election move by a politicized Bank of Canada. The more puffed housing values become over the next six months, the more difficult will be the road back down once the US Fed starts on its long-term path.

Remember that 89% of the time the Bank of Canada has followed the Fed lead. Almost 100% of the time over 25 years, our bond market’s done the same. Rates may falter and weaken now, but they will reverse direction in the future. God only knows what amount of debt the greater fools among us will have wolfed down by that time. Do they understand houses only cost what they do because money’s cheap? That when properties plunge the debt endures?

Nope. Of course not. And how can you blame them? We live in an irresponsible nation.

Bank of Canada overnight rate

RATES

Globe & Mail

343 comments ↓

#1 Polozified on 07.15.15 at 12:02 pm

Told you, Garth

#2 Not a Retard on 07.15.15 at 12:09 pm

This is an astounding level of stupidity.

Are Harper and his puppet completely insane? Do you think Canadians are going to be pleased when EVERYTHING costs more?

I mean, a damn iPhone costs $300 dollars more today than it did 3 months ago, And we’re headed back to a 60 cent loonie.

It’s going to take years to undue to damage from the fallout of this terrible economic policy. The worst part is that there is no reason to think either of the other two parties would do better. In fact they will do much, much worse.

Greece. Silly little Greece.

#3 gut check on 07.15.15 at 12:11 pm

” In Canada you can now borrow a five-year variable-rate mortgage for 1.98% –”

where?
is it from one of the Shady McShaderson spots… I have been watching the Big 5 for two months and wherever I have looked they are asking a higher rate for their variable rates than for their fixed.

#4 Ray Skunk on 07.15.15 at 12:11 pm

That’s it! I’m voting for the beard!

#5 S.Bby on 07.15.15 at 12:11 pm

What a ridiculous move by the BoC today. We are being governed by clowns and buffoons who are burying us. This has Harpo’s fingerprints all over it. I am livid at these guys.

#6 MarkhamRenter on 07.15.15 at 12:12 pm

It’s nice to see even the Bank of Canada participating in Amazon Prime Day

#7 gut check on 07.15.15 at 12:13 pm

they don’t want to undo it the ‘failures’ of our economic policy. They want a fire sale.

I mean really – people – I’m not trying to be an arsehole but this is what’s gone on all around you for YEARS. You think Canada has nothing that they would like to have for free? Water, anyone?

#8 Axehead on 07.15.15 at 12:13 pm

This annoucement is a confession by the government that Canada is in real trouble (and the most acurate definition that our nation is in a recession). Hold On, things are only going to get worse.

#9 Sathington Willoughby on 07.15.15 at 12:15 pm

Brutal move BOC! I debated loading up on USD prior to today…
Looks like our vacationing dollars will be spent north of the 49 for the foreseeable future!
Now, who to vote for come election time??

#10 seeing it from both sides on 07.15.15 at 12:18 pm

Why the one-sided assumption that everyone and his dog will rush out and gorge on more debt?
What about this as being an opportunity for paying off debts faster and more tourism dollars flowing into our economy hence creating jobs ..??

#11 Don Derc on 07.15.15 at 12:19 pm

It’s what we voted for….safety. We never pay attention that ignorance goes hand in hand with safety. We should have bumped up the rates in 2009 and kept them there. That’s what I said in 2009….it’s not hindsight thinking.

A lot of people on this blog don’t need this blog. People who need this kind of thinking, and dialogue in their financial life read The Province newspaper instead. They watch Global at 6pm and become forever stupid.

We don’t know how to stand up and shout. We can’t tell when a transit plebiscite offered to BC’ers means that the Gov’t is broke, has mismanaged transit, and wants the voter to hang themselves with more debt. And we happily paid $12 million for the exercise.

Taxpayers (like governmemnts) are tapped – garth has shown chart after chart about personal public debt. Whether Canada kills kids in Afghanistan, or spends their last dollar on stone washed jeans at the Gap, or an overvalued cdn condo, the question is – How do you raise the consciousness of a nation?

Today, the answer is “False Flag”…

sad….

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm

I am going to repost my message from the last story. I am a little disheartened that people think my story is a fake. I especially didn’t appreciate the advice about prostitution. I do not have a financial advisor (and am not about to get one), however, many individuals on this site legitimately seem to have good ideas about things of this nature. Am I in over my head? Yes, I am. That is why I am looking for some assistance. Here goes:

I am starting to get pretty scared. Please don’t judge me, but I bought my house in a decent neighborhood in a Vancouver suburb in recent months. The asking price was $1.65 mm. I ended up paying $1.815 mm. Although I got a standard mortgage, I borrowed a big chunk of the down payment. Including the costs to furnish the place, I am now $1.78 mm in debt. Yes, interest rates going might be good, I suppose, in some respects, as $175,000 of my debt is on high-interest credit cards (and hopefully today’s news will result in those rates coming down a bit), but if Canada is headed into a recession, I am worried about losing my job. My salary is $52,500 per year, and that alone hardly covered my interest payments. I was counting on some big raises over the next few years, but with a recession, I will be lucky to keep my income steady.

Advice?

Thank you! Khris.

#13 Opportunity on 07.15.15 at 12:22 pm

A stupid move by Plutz, but I am due to renew my mortgage in the next seven months so I applaud him for this one moment. Just need the banks to adjust their mortgage rates.

#14 mishuko on 07.15.15 at 12:23 pm

Garth wondering if I could get your 2cents.

They trimmed the rate allowing you to borrow more. Would it be a good time to go back to the bank and see if I can increase my LOC borrowing limit before they eventually raise it again?

Not to borrow more as it’s my o-sh.. fund that I got based on your blogs advice.

#15 Westside Realtor on 07.15.15 at 12:26 pm

That said, HAM purchases on the westside of Vancouver are soft, at best.

WSR

#16 Frank Gallagher on 07.15.15 at 12:27 pm

The federal Liberals got us down to a 62.5 cent Canadian dollar to the U.S. and interest rates were much higher then.

Imagine if interest rates were so low like today, we would of had a 48 to 50 cent Canadian dollar to the U.S. dollar.

Just in time for more bad news, the Ontario Liberals has a recommendation from their University professor buddy to raise gas taxes and add tolls which would bring in another $14 billion in 7 years.

If it is not bad enough we will paying more for alot of stuff from packaged foods, fruits, veggies, I-phones, gasoline, etc. from the much depreciated C$ to U.S. dollar

#17 gladiator on 07.15.15 at 12:28 pm

The nation is dumb, it just follows the candy.
The rulers are irresponsible, if not criminal.

#18 Sheane Wallace on 07.15.15 at 12:29 pm

#9 Sathington Willoughby o

You have seen only the beginning of the decline, the ‘rate’ will go to 0, then negative, then they will start money printing.

CAD in the 0.sixties is a no brainer, it could go much, much lower.

#19 Gregor Samsa on 07.15.15 at 12:35 pm

One key hurdle in securing another Harper Majority Government was passed today.

The Harper votes don’t care about this. If they happen to catch this on the news (unlikely), they will just interpret that their suburban house prices will be rising even more in the near future, and thank our wonderful government for making them rich.

#20 Fuzzy Camel on 07.15.15 at 12:35 pm

BoC obviously following the agenda set out from the meeting in Geneva. I predicted this weeks ago. Expect 0% by Sept.

How to know this won’t end well? When the next financial crisis comes this fall, a 0% rates the BoC will have no way to stimulate or ease the economy. Deflation at 0% = sovereign debt crisis.

Only an idiot would dump gas of a raging housing market, I hope this makes it painfully obvious that the BoC is part of a larger agenda to drown the world in debt.

Say hello to a new world order this October. Kiss your toilet paper money goodbye with your standard of living.

#21 Dollar on 07.15.15 at 12:36 pm

Garth,

For how long do you think the dollar will stay low like this? Think it will go lower?

#22 Cross Border Shoppers on 07.15.15 at 12:37 pm

I noticed where I am cross border hasn’t slowed as much as I would have thought and even with the crappy dollar gas, milk, cheese, eggs, still cheaper across the border. Another thing lots of people live near the border this lower loonie isn’t going to make them happy. Only the few house floggers and that’s beginning to get old, I think there are more cross border shoppers than moist home buyers? Can there be that many idiots left?

#23 Ray Skunk on 07.15.15 at 12:38 pm

#12

$1.85mm house?
On a $52.5k salary?
Plus bonus regret and worry?

Come on, at least make it half-believable.
If you want bites, go and troll RFD.

#24 earlybird on 07.15.15 at 12:38 pm

Consumer debt has been filling in the gap for the lack of wage growth and unstated inflation for quite some time. Groceries, energy, and a roof over your head is overwhelming the Canadian population…these cuts are doing more harm than good….people are tapped out….in fact more than tapped out…crazy..

#25 Godth on 07.15.15 at 12:41 pm

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm

Here’s some advice: put a for sale sign on the house and hope for a greater fool. This rate cut may help you in this regard. Finally live within your means and stay out of debt.

duh – dumb.

#26 Frank Gallagher on 07.15.15 at 12:41 pm

It is not just shorter term interest rates that are falling now for months, years now.

Canada bond yields of 5, 10, 30 years are moving lower too, 0.69%, 1.59%, 2.28%.

So much for higher interest rates that I keep hearing the talking heads spout out.

#27 brampton guy on 07.15.15 at 12:41 pm

For someone who is young and has some money saved, this news is kind of troubling for what the future has in store.

#28 NextYear on 07.15.15 at 12:48 pm

There will be no Inflation though… If the government say there is no inflation then there is no inflation…

Everything we buy will get more expensive but everything we buy is not included in their basket of goods when calculating inflation… So no inflation… even if the loonie at 45 cent their will be no inflation…

and Hey your Iphone goes up in price but it is better then the prevuous version… so no inflation.

And remember… the government loves you!!!!

#29 A Canadian Abroad on 07.15.15 at 12:48 pm

I was hoping the BoC wouldn’t lower interest rates, it is a very foolhardy and short sighted move IMO. But in case they did, I didn’t covert a 40% of our total wealth from USD to CDN. (note: invested in ticker: AOR)

Hopefully the Canadian people and the CDN dollar survive the Canadian Gov’t. :(

#30 Mark on 07.15.15 at 12:50 pm

What is appalling about the last rate cut is that the banks didn’t pass it fully on to their margin borrowing clients. Only one brokerage in Canada did that I’m aware of (Interactive Brokers).

Credit for businesses and non-RE speculation in Canada is still far too expensive relative to consumer credit. This is something that policy makers should be looking at. Although it certainly doesn’t make for good politics when you have a population that is so heavily over-indebted that any suggestion of ‘helping’ business with lower cost credit would be political suicide.

Whomever makes up the next government is going to have a real challenge on their hands. Whether it be dealing with the mess at the CMHC which is likely getting worse by the day with declining housing prices. Or an economy which simply isn’t generating the sort of activity in the past, making profligate spending far more difficult.

#31 The American on 07.15.15 at 12:51 pm

At #21: Dollar, the CAD is going much lower than as it stands today against the USD. There is absolutely no way about it. Haven’t people been listening for the past year? It doesn’t take a rocket scientist to know. Perhaps it’s more of a factor of denial.

#32 CJBob on 07.15.15 at 12:52 pm

Before everyone jumps off a cliff it’s worth taking a balanced look and realizing that rates are actually still HIGHER in Canada than they are in the U.S.

With the U.S. economic outlook better than that in Canada the directional changes in rates make sense for every other reason except real estate values.

#33 Marcus on 07.15.15 at 12:52 pm

U.S. short sellers betting on Canadian housing crash: ‘An accident waiting to happen

June 24, 2015

Large Wall Street investors who made billions when the U.S. housing market collapsed in 2008 are now betting real estate values in Vancouver and other Canadian cities will crash, financial insiders say.

The hedge fund investors, known as short sellers, are betting against what they believe is a housing bubble in Vancouver, Toronto, Calgary and other Canadian cities. They believe Canadians hold too much mortgage debt, and that Canadian banks, mortgage insurers and “subprime” private lenders will lose money on unpaid loans when property prices fall.

“The cross currents are beyond crazy in Vancouver — it’s a mix of money laundering, speculation, low interest rates,” said Marc Cohodes, once called Wall Street’s highest-profile short-seller by The New York Times. “A house is something you live in, but in Vancouver you guys are trading them like the penny stocks on Howe Street.”

He says Vancouver real estate has reached peak insanity, and any number of factors could trigger a collapse.

http://news.nationalpost.com/news/canada/u-s-short-sellers-betting-on-ca

#34 Julie K. on 07.15.15 at 12:52 pm

The body language of Poloz doesn’t cut it — even if his BOC rate did.

#35 Mark on 07.15.15 at 12:53 pm

“For someone who is young and has some money saved, this news is kind of troubling for what the future has in store.”

If you’re young, theory is that you should have a fairly high concentration of your portfolio in riskier assets, not low risk/low-return fixed income. Rate cuts tend to be positive for such investments over time. Although in the short term, it may not show up.

If you’re young, keep saving/investing, and stay the course! Just by avoiding the clap-trap of overpriced (and now declining) RE, you will avoid the loss of thousands of dollars per year.

#36 Republic_of_Western_Canada on 07.15.15 at 12:53 pm

Get real. Nobody “pushed” anybody into ‘epic debt’.

They did it all by themselves with the ontario bankers chuckling along the way.

Now those bankers are starting to worry about future cash flow. Too bad. They should have lent to small businesses instead, to invest in actual, real future cash flow instead of CMHC claims.

#37 boonerator on 07.15.15 at 12:53 pm

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm

First rule of life: When you’re in a hole, stop digging.
This rate cut might motivate someone who is convinced buy now or buy never. Let them make you a renter.

#38 zedgt87 on 07.15.15 at 12:54 pm

The policy of financial repression continues.

Lets inflate away our money and punish those who are actually responsible with debt and savings. Lets use those stupid savers and fiscally conservative people to subsidize the leverage and debt monkeys. Those stupid people should be consuming anyways, savings are bad for the economy right!?

People should be concerned. What happens when the next financial crisis hits, and the fed is zerobound, BOC is zero bound, etc. Its going to get ugly. Central banks are losing control

Glad I converted my cash savings to USD last year when oil started tanking.

#39 kommykim on 07.15.15 at 12:58 pm

Well, the LOONie is a diving bird.

#40 Monopoly Money on 07.15.15 at 1:00 pm

Pretty soon our money will be worth about as much as Monopoly Money! Like last time we had a worthless dollar Americans came to the auctions and bought up all the nice heavy equipment and trucks and left the crap because that’s all Canadians can afford. watch all the good stuff go south soon!

#41 Realtor007 on 07.15.15 at 1:00 pm

So many people with short memories on this blog, as if the CAD was always on par with the USD..sigh, not that long ago we were in the mid 60’s and it may get there again. We survived then and we’ll survive again.

#42 The American on 07.15.15 at 1:00 pm

At #12: Khristine van Lincoln, first I find it highly doubtful your story is in fact true. Yes, Canadian lenders are practicing the dangerous game of sub-prime lending. Even still, it is difficult to believe your story on a salary less than $53,000/year while purchasing a home of $1.815MM with $175,000 in high interest credit card debt. If your story is indeed true, then Canada is in even worse shape than I could imagine.

Here’s some advice. Take advantage of the new rate cut, sell the damn place ASAP (because you can’t even afford an interest payment on the home, let alone to cover your CC debts). You’re clearly well into the negative cash flow, which is just downright stupidity at best. Some other idiot will buy your home with newer, cheaper rates. But don’t wait too long, because it won’t last long. VERY SOON people will be catching on, then you’re stuck with it.

You should be a renter. Being a renter is not a bad thing. But given your highly irresponsible usage of credit cards, you clearly cannot manage funds in the least. Get yourself out of debt, and then live as a renter for no less than three years, enroll yourself in courses for money management.

Then, and only then, consider purchasing a home. In your case, and if you even still have a job, you can afford a home worth no more than $250,000. Period. So in a few years time, when the real estate market have crashed across Canada, you may be able to get yourself into a halfway 1 bedroom condo in Vancouver. Good luck.

#43 MF on 07.15.15 at 1:05 pm

Hey even CPD is up a percentage of a point today. A miracle.

Small step Closer to breaking even and selling it for good now.

MF

#44 Llewelyn on 07.15.15 at 1:06 pm

To Mark # 231 last post

Do you assume the readers of this blog cannot read or are incapable of logic.

Please do not make irrational comments just to get a reaction. That is the definition of a Troll.

“Corporate profit margins at 27-year high and likely to stay there – Business – CBC News −2014” Enough said!!!

#45 Realtor007 on 07.15.15 at 1:07 pm

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm
I am going to repost my message from the last story. I am a little disheartened that people think my story is a fake.
————————————————————

No lending insitution in this country is giving you 1.8mm with a $52k salary, take that cheap comedy elsewhere.

#46 Island Girl on 07.15.15 at 1:11 pm

For #12 Khristine van Lincoln

Ditto what #25 Godth said, put it up for sale, hope for the best and don’t do it again. Come on really? Did you need to buy a house that cost 34x your annual income?

Hubby and I don’t make a lot and yes we bought a house recently as well but we stuck to a reasonable budget and paid just under 3.5x our annual income (and that was before hubby got a better paying job).

And anyone who has $125000 on a high interest credit card shouldn’t be buying anything let alone furniture….just saying.

#47 Sheane Wallace on 07.15.15 at 1:11 pm

#21 Dollar

Garth,

For how long do you think the dollar will stay low like this? Think it will go lower?
————————
Muuuuuuuuuuuch lower.

Just watch it.

#48 asp on 07.15.15 at 1:12 pm

Easy. The OSFI forces banks to stop giving out mortgages. That easy money then has to flow someplace else. Like small business’ for example.

It’s not low interest rates that forces money into residential mortgages.

Blame the OSFI, not the BoC.

#49 This Just In Again on 07.15.15 at 1:21 pm

It’s probably not something you care to respond to, but I disagree vehemently to your position that “what held true in the past will happen in the future”. Canada will NOT follow the US rate moves so tightly this time around. If you have a variable rate, keep it. Sure, the bond market can run in the fixed rateholders’ face, but BofC will not follow the Fed. That, and the forecasts for growth and inflation in the US are becoming more bleak. The Fed forecasts are one thing. The rest of the thinking analysts say the growth is not nearly as hot as The Fed wants us to believe it is. How can it be with a savings rate above 5%?

The US will not be raising rates this year. See you in 2016. Until then, we’ll be playing with Japanese monetary policy North of the border.

http://www.wsj.com/articles/white-house-cuts-growth-forecast-for-2015-2016-1436907567?mod=pls_whats_news_us_business_f

http://seekingalpha.com/news/2629135-white-house-cuts-growth-figures?ifp=0

#50 Yuus bin Haad on 07.15.15 at 1:22 pm

Maybe the PTB are smarter than I, but they’re sure not as smart as they think.

#51 GTA Observer on 07.15.15 at 1:27 pm

Nuts.

And if I may pick a nit, the facts behind “The average SFH in Toronto costs $1.1 million” (and so on) can be more accurately worded this way:

“The average selling price for Toronto SFHs is now $1.1 million.” Put another way, single family houses in Toronto are now selling on average for $1.1 million.

Averages hide things, so it’s better to apply them to the right factor. As well, there’s no “average house” per se (typical, yes, but that doesn’t come with numbers).

Why does it matter? It matters because people who hold mortgages on crappy middle-market houses now think they are all sitting on at least a million bucks. They may well be, or close to it, but if not — and if so-called luxury homes (IE not necessarily great, but at least not crappy) — are pulling up the average, then these owners are misled and it distorts their saving, investing, borrowing and selling behaviour.

Still, nuts.

Also the guy at the bank this morning at 9:40 am had no idea there was going to be a rate announcement at 10. He did want to know if I wanted to put some surplus money into a mortgage. You see, they just had mortgage training.

#52 kommykim on 07.15.15 at 1:27 pm

RE: #12 Khristine van Lincoln on 07.15.15 at 12:22 pm
$175,000 of my debt is on high-interest credit cards (and hopefully today’s news will result in those rates coming down a bit), but if Canada is headed into a recession, I am worried about losing my job. My salary is $52,500 per year, and that alone hardly covered my interest payments.

Advice?

Look into something called “consumer proposal”. I know a person who did this and got to keep her house and car but only had to pay back 35% of her other debts. A couple of years later she had a credit card again and traded up to a Beemer.

#53 Unhinged Loon on 07.15.15 at 1:32 pm

Wow, just wow.

Should there be legal consequences for a government that plunges the national economy into a crisis?

#54 gladiator on 07.15.15 at 1:35 pm

@12 Khristine:

are you trolling for fun or on purpose?
If you assume that your 52k per year are after-tax, plus, 2% mortgage interest and 11% on your cc debt, then interest alone is 52k/yr. That leaves nothing for repayment of principals as well as for any of your needs.

Your story is a troll’s hogwash.

Go away.

#55 Love my Kia on 07.15.15 at 1:37 pm

I was expecting a re-run of your post from a few months’ back titled, ‘We’re There’.

This doomer thinks we’re nowhere near there yet. What Yellen says and what she does appear to be two different things so far.

#56 Mark on 07.15.15 at 1:37 pm

“Do you assume the readers of this blog cannot read or are incapable of logic.

Please do not make irrational comments just to get a reaction. That is the definition of a Troll.

“Corporate profit margins at 27-year high and likely to stay there – Business – CBC News −2014″ Enough said!!!

Margins and earnings are two completely different things. So please don’t come to any conclusions based on random snippets you read on CBC. TSX earnings have not meaningfully advanced since the 2007/2008 peak. Dividend growth has been only minimal since 2007/2008 as well — you can see this in the XIU distributions — dividend growth between 2008 and present is largely on account of rising payout ratios, not growth in profitability.

#57 MSM-Free Zone on 07.15.15 at 1:38 pm

#30 Mark on 07.15.15 at 12:50 pm
“……..Whomever makes up the next government is going to have a real challenge on their hands…..”
_________________________

You might be onto something there, Mark.

Now that Harpo and his ReformaCons have witnessed the latest polls, perhaps there is some madness in their methods.

Remember when the retreating SoDamn Insane lit all the Kuwaiti oilfields on fire, after realizing he had a war he couldn’t win?

#58 robert james on 07.15.15 at 1:44 pm

I am pretty sure Harper will be out on his neo-con ass come the election.. Even my sister who lives is Sask. who has been a card carrying conservative all her life has had enough of this ass hole,,in her own words.. I don`t envy the next party that wins when they will have to clean this mess up..

#59 seeing it from both sides on 07.15.15 at 1:45 pm

Even this chief financial commentator (?) apparently couldn’t convince her son that renting is the way to go. But she assuages that her son (27) bought his first house the ‘right way’.
http://www.bnn.ca/News/2015/7/14/Pattie-Lovett-Reid-My-son-bought-his-first-house-the-right-way.aspx

#60 Leo Trollstoy on 07.15.15 at 1:47 pm

#12

No way a person making $52k a year can get a $1m+ mortgage.

Stop trolling.

#61 GTA Observer on 07.15.15 at 1:49 pm

#48 Blame the OSFI not the BoC

There is a point. There are other levers to pull to tighten mortgage lending, such as higher down payments, shorter amortization periods etc. Still, the BoC can’t feign innocence about the impact of its rate cuts on the mortgage lending market. Unintended consequence? Probably not.

#62 pinstripe on 07.15.15 at 1:49 pm

There is nothing to gain by educating the sheeple.

all the economists cannot reach an agreement as to which way to go. a 50/50 split amongst the economists is a safe bet.

the Canadian policy makers are focused on POLITICS. Non on these policy makers give a hoot about the shseeple. these policy makers are following the business model used by Greece. looking after their own self interest.

I encourage the millenials to BUY BUY BUY.

a rate cut increased the price of everything forcing the sheeple to BUY.

I bought a couple cases of sardines several months ago so I am okay way past the October election. I am sitting on CASH and am waiting for the bargains.

harpo knows that he is on the move out. the challenge now is to set up the new guy for failure.

#63 lee on 07.15.15 at 1:50 pm

A $700,000 mortgage at 2.5% equals $3,255 a month.

At 3.5%, its $4,557 a month.

At 4.5% (where Yellen would expect we’ll be with our five year fixed mortgage rates by the end of 2017) its $5,859 a month.

That’s an 80% increase in mortgage payments in the time it takes to pay down maybe the CHMC premium on the mortgage. I don’t believe people’s wages will go up 80% in two years, 140% pre-tax. In addition, property taxes will likely be up another 10% by then, not to mention hydro.

Variable mortgages will likely increase the same amounts. In fact, the percentage increases will be larger.

#64 Love my Kia on 07.15.15 at 1:51 pm

# 6 Markhamrenter

It’s nice to see even the Bank of Canada participating in Amazon Prime Day
——————————————
I just checked their ‘deals’, meh. Thanks for letting me know though!

#65 Obvious Truth on 07.15.15 at 2:00 pm

‘Significant and complex adjustment’

Poloz is telling everyone there is nothing he can do. He was praying and hoping. But hes out of ammo. So traders can go ahead and take the cpeso among other things to the woodshed.

Someone else has to pick up the fight. Policy makers of course.

Canada is not like the US and EU. There will be no printing.

#66 fancy_pants on 07.15.15 at 2:02 pm

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm

you silly silly
I mean if they legalize prostitution, it will increase house prices more as all the HAM rushes in and then you can sell your HOUSE

… or set up a brothel, but I wash my hands of those thoughts!

#67 pwn3d on 07.15.15 at 2:03 pm

#9 Sathington Willoughby on 07.15.15 at 12:15 pm
Brutal move BOC! I debated loading up on USD prior to today…
Looks like our vacationing dollars will be spent north of the 49 for the foreseeable future!
Now, who to vote for come election time??
—————
Now there’s irony. You’re doing exactly what they want by spending your money in the country. So how is that a brutal move?

#68 Apocalypse2015 on 07.15.15 at 2:06 pm

The Canadian economy, led by irresponsible cowards and self-serving politicos, now begins its descent into hell.

Grim days ahead. Lots of negative spinoffs will come out of this. The RE bubble deflation will now almost certainly be an explosion instead.

#69 Squirrel meat on 07.15.15 at 2:06 pm

Some nice gains today. Thanks Poodle. You’re a beaut.

House orgy to the max. CAD in the toilet.

#70 Montellino on 07.15.15 at 2:07 pm

#12 Mark on 07.06.15 at 6:18 pm

Another rate cut next week is my prediction (and I’ll sit out of greaterfool’s comments for a whole week if I’m wrong this time!).

———————-
SHit… this almost happened ;)

#71 Sean on 07.15.15 at 2:08 pm

Great day to hold VUN

#72 Mark on 07.15.15 at 2:09 pm

“No way a person making $52k a year can get a $1m+ mortgage.

Stop trolling.

If they have, say, $1M in equity to bring from another property, not a problem. At 50% LTV, most lenders really don’t give two hoots about income.

For all we know, this poster may have taken out the mortgage when their income was better.

#73 Axehead on 07.15.15 at 2:10 pm

#12 – I hope you are a con. If not, your options are:

1 – sell and rent
2 – declare bankruptcy
3 – marry rich
4 – just walk away
5 – run and don’t look back

#74 pwn3d on 07.15.15 at 2:12 pm

Double good news for homeowners with a mortgage. House worth more, mortgage renews for less. Why anyone would be against this is beyond me. Oh right if you don’t have a home and was waiting to buy one when prices dropped. Yeah, that’s a bummer.

Was it yesterday some maroon was saying they wish their house was worth less? I mean come on cut the BS. Same with Krusty van Colon, nobody believes your stupid story. You may want to check for mold, some of those basement apartments can be bad for you.

#75 pwn3d on 07.15.15 at 2:14 pm

from my twitter feed:

“Markets are pricing in more than a 70% chance of another BoC rate cut on September 9th”

and

“Another rate cut this year could potentially drive down govt bond yields to a point where a 1.99% 5yr fixed becomes reality”

so sick!

#76 Godth on 07.15.15 at 2:14 pm

#46 Island Girl on 07.15.15 at 1:11 pm

I think it’s a bogus story but it is indicative of a more widespread insanity obviously. If a person was into a roof over their head for 10X income would it change the story that much? Not really. It’s all a bad joke at this point. The collapse of civilization isn’t an event, it’s a process – and we’re in the thick of it. Insanity rules.

#77 Dave on 07.15.15 at 2:20 pm

Don’t blame Poloz. Blame the low price of Oil and it’s result on our exports.

Despite what 99% of people on this blog believe – lowering the interest rate was the right move by the Bank of Canada.

#78 LH on 07.15.15 at 2:20 pm

Nothing as sweet as being right…
Next call: another 10-20% push higher in M5T, M5S, and M5R houses by Christmas.

If only I had the temerity to sell CADUSD on my PA as aggressively as smoking man

Ah well. My comp is planned in USD and I still have a few millions of CAD mortgage debt, enough of a short for me, and the best kind of short (no margin calls!)

#79 45north on 07.15.15 at 2:20 pm

Realtor007: Khristine van Lincoln:

No lending insitution in this country is giving you 1.8mm with a $52k salary

that’s what common sense tells me

Khristine: how about you prove your story to Garth!

#80 Mike S on 07.15.15 at 2:21 pm

A quick glance on the balanced portfolio shows ~2% gain today … Thank you Garth

#81 Slow Canada on 07.15.15 at 2:23 pm

“Convoys of leased Audi A7s piloted by giddy, aroused realtors spontaneously appeared in downtown Toronto and Vancouver, honking uncontrollably while leaving a trail of moist Re/Max business cards.”

Garth, that is gold. Thank you for your excellent humour, even while I am weeping inside. Today’s rate cut takes us another step further from where we need to be. The road back is a long one, and no-one in power seems to have the slightest clue how to lead us there.

#82 David Lee on 07.15.15 at 2:24 pm

Great article from Hilliard MacBeth:

http://www.theglobeandmail.com/globe-debate/the-bank-of-canada-has-lost-its-mojo/article25517058/

Best lines:

“If housing were not supported by cheap credit, house prices would fall and the economy would contract, causing many people to lose their jobs. The most overextended Canadians wouldn’t be able to make their mortgage payments and banks would foreclose and dump repossessed houses on the market, causing a crash”.

and

“Households are now running out of capacity to live beyond their means and use credit lines or their homes as an ATM.”

#83 Mike S on 07.15.15 at 2:26 pm

“Stop slulking when your wishfull bias stares into the face of ugly reality.

Back a few weeks ago when USDCAD was at about 1.22 I told you bastards to go 50 contracts long USDCAD.

How many listend. I mean ive only been right a zillon times on this shit here.”

Smoking Man

Maybe you should open a blog or something in which you can discuss Herdonomics and rate policies

#84 Whinepegger on 07.15.15 at 2:26 pm

Stephen Harper, prime minister of the ‘HARPER’ government – “You will not recognize this country when I’m finished with it.” (attributed to Harper by Noah Richler)

Mission accomplished. Now go away and take your minions with you.

#85 S.Bby on 07.15.15 at 2:27 pm

Tilley Endurables now purchased by UK private equity firm. Tilley was adamant that their manufacturing stay in Canada. That was their downfall. Meanwhile, Canada continues to shoot itself in the head.

http://www.250news.com/canadian-press/?loc=2&id=33848269

#86 TurnerNation on 07.15.15 at 2:27 pm

Advice? Find out which lender/bank wrote Khristine’s mortgage and short sell their shares…

#87 Mark on 07.15.15 at 2:29 pm

“Was it yesterday some maroon was saying they wish their house was worth less? I mean come on cut the BS. Same with Krusty van Colon, nobody believes your stupid story. You may want to check for mold, some of those basement apartments can be bad for you.”

Professional landlords rationally hope for lower real estate prices as lower prices reduce new supply and reduce their cost of re-investment.

Only landlords who want to imminently exit the business want high prices. Otherwise, high prices are the kiss of death to portfolios that who rely on RE income.

“Double good news for homeowners with a mortgage. House worth more, mortgage renews for less. “

Except that rate cuts have failed to stop house price depreciation (2 years into Canada’s decline!), and creditworthiness is deteriorating to such an extent that renewals for most are very likely not to be at lower rates.

This is basically what happens in deflation. Sure, interest rates go lower, but asset prices also drop as credit disappears. Paradoxically, deflation and strong inflation have a similar impact on credit — a significant expansion of credit spreads and a reduction of real value of credit.

One day away, and you are at it again – making broad and unsubstantiated, incorrect statements. “Creditworthiness is deteriorating to such an extent that renewals for most are very likely not to be at lower rates,” is a good example. This is fiction. It will not be the case for “most” mortgage renewals. Period. My patience is wearing thin. — Garth

#88 SunShowers on 07.15.15 at 2:32 pm

“convoys of leased Audi A7s piloted by giddy, aroused realtors spontaneously appeared in downtown Toronto and Vancouver, honking uncontrollably while leaving a trail of moist Re/Max business cards.”

Thank you so much Garth, you made my day.

#89 @juliek post 38 on 07.15.15 at 2:38 pm

Bingo on the body language!

Poloz behaved as though he had rehearsed the tough questions prior to the press conference. That’s where the awkward body language comes in.

He also side stepped the question on the effects the cut will have on housing.

All in all, this is a political cut. Anyone that bieves that the BoC is independent need to give their head two shakes.

The Bankers (includes BoC) and Corporations want Harper elected back at all costs.

#90 wallflower on 07.15.15 at 2:39 pm

yes, Khris – do some ‘splainin’ on that mortgage there… I am looking for fairytale, part II

#91 jess on 07.15.15 at 2:40 pm

kick the can

1999
China set up four asset-management companies (known as AMCs) to hold the non-performing loans of the four biggest banks in China. The state took a majority stake in each. The four AMCs oversaw $229 billion in nonperforming loans, effectively making them the “bad bank” portion of their related bank.”

http://wallstreetonparade.com/2015/07/whats-really-behind-goldman-sachs-bullish-stance-on-china-stocks/

#92 Mark on 07.15.15 at 2:44 pm

““Creditworthiness is deteriorating to such an extent that renewals for most are very likely not to be at lower rates,” is a good example. This is fiction. “

No, its not fiction at all Garth. Didn’t you see that Prime wasn’t lowered the full 25bp? This is because the perception amongst the banks is that credit-worthiness amongst the borrowers linked to prime has diminished. Additionally, discounts against Prime are nowhere near what they were in the past — again, on account of diminished credit-worthiness of the borrowers.

I’ll stop posting if you want me to, but its pretty hard to deny that at, what, 163% debt to income, and RE prices declining (along with equity), consumer creditworthiness is increasingly emerging as an issue. Which means mortgage rates probably aren’t going to go down much, if any, on account of future policy rate cuts, or market reductions in risk-free yields longer out on the curve.

“This is because the perception amongst the banks is that credit-worthiness amongst the borrowers linked to prime has diminished.” Wrong. It’s all about spreads and bank profitability, not a drop in credit quality. Stop making this stuff up. — Garth

#93 I'm stupid on 07.15.15 at 2:44 pm

I hate to say I told you so, but I told you so. It’s playing perfect politics, I said it months ago that it’s a race against time. It looks like the Conservatives will be able to keep this gas bag alive long enough to get elected to 5 more years in office. The only wrench in the plan is how many disenfranchised youth show up to vote. It should be an interesting election.

#94 Big D and I Don't Mean Dallas on 07.15.15 at 2:45 pm

BoC just gave me a raise! Happily earning USD, renting and debt free in YVR. Although I feel a bit strange cheering for further weakening of the Canadian economy.

#95 bdy sktrn on 07.15.15 at 2:55 pm

http://www.theguardian.com/business/live/2015/jul/15/greek-crisis-mps-bailout-imf-debt-relief-alexis-tsipras-live

street party in athens!

look at it tank the markets…oh, my.

#96 Toronto Bylaw enforcement officer # 17 on 07.15.15 at 2:59 pm

“convoys of leased Audi A7s piloted by giddy, aroused realtors spontaneously appeared in downtown Toronto and Vancouver, honking uncontrollably while leaving a trail of moist Re/Max business cards.”
—————
According to Toronto’s Bylaws No. 2347 (noise) and 1867 (littering) they should be fined $152 and $182 respectively.

#97 I'm stupid on 07.15.15 at 3:01 pm

This might be the first recession in history where house prices actually increase. We’re so screwed!

#98 Oceanside on 07.15.15 at 3:05 pm

Poloz is, along with Harpo determined to totally ruin Canada…..Lets just concentrate on the Tar Sands and trade with China, bugger everything else…..Morons.

#99 Nagraj on 07.15.15 at 3:07 pm

#119 LLEWELYN, 9:08AM, 15/7 (previous post comment):

“There is a powerful odour of mendacity emanating from Ottawa . . . ”

ODOUR OF MENDACITY is from the Tennessee Williams play “Cat On On A Hot Tin Roof”, in the play Big Daddy , as I recall, goes on to liken it to the smell of death. [I can’t recall if the Taylor/Newman/Ives movie follows the dialogue so exactly.]

[Tho not unfamiliar with death – I don’t have a fine nose, my smoking impairs my sense of smell, so I blessedly don’t know what death smells like – ]

LLewelyn goes on to say that this odious mendacity shouldn’t be allowed to distort perception of Canadian reality.

Western central banks have been pushing on the proverbial string for quite some time . . . and blessing us all with their perfumed omniscience.

#100 Blobby on 07.15.15 at 3:10 pm

As someone who is paid in USD – Can I please say “Thank you Mr Harper for your short sightedness on the economy, and only caring about looking good at election time”?

Cant wait for the US Fed rate hike… :D

#101 armpit on 07.15.15 at 3:12 pm

Garth

Thank you for you blog and educational information.

Eventually the housing market will go bust. The stars are all beginning to line up.

A couple of questions for you and possibly your readers.

1. What is the future with our farmland values.

2. Why are oil prices/gas prices disconnected with our C$?

In July 2014, Oil was approximately $119 Cdn / barrel and gas prices $1.33. Now it is approximately $75Cdn / barrel and gas prices are $1.19.

Are the Feds allowing this gas gorging to appease Alberta and the same time, continue their tax revenues?

Your opinion please.

#102 willworkforpickles on 07.15.15 at 3:14 pm

…Heads are about to roll in China along with the flow of wealth out of that country…….In about 10 months we will see the beginning of the biggest slide in real estate values in Canadian history….A worldwide real estate plunge in re values is coming on.

#103 Molly Craighead on 07.15.15 at 3:14 pm

I had a really good gut feeling when Poloz got in that he would cut rates.

Carney for 3 years did nothing and kept saying he would raise interest rates.

So what our family did is have no Canadian dollars in Canadian banks and have U.S. dollars in our short term money.

We have our pensions and family business that gets 80% in U.S dollars so we don’t need to invest in Canadian dollars.

We have made a 30% currency gain so far and earning the same 1.5% in U.S. funds.

I see a 65 cent Canadian dollar to U.S. dollar in 6 to 12 months.

#104 Mike S on 07.15.15 at 3:14 pm

“It’s hard to see how we can ever have a ‘soft landing’ in 416 or 604 when house prices have risen 45% and 30% respectively over the peak of the last bubble.”

There will be no soft landing. That ship sailed away about 1-2 years ago

#105 Bill Gable on 07.15.15 at 3:17 pm

Political expediency trumps common sense.

Harper browbeat Poloz into this hamfisted move.

#106 Andy on 07.15.15 at 3:17 pm

Hey Garth.. Read this
Royal LePage says it’s worried a further rate cut might add fuel to some of Canada’s already red hot housing markets.

http://business.financialpost.com/personal-finance/mortgages-real-estate/royal-lepage-warns-rate-cut-could-over-stimulate-housing-market-and-spur-difficult-correction

#107 CJBob on 07.15.15 at 3:18 pm

The reason the banks won’t pass all the rate cut along to consumers is they can’t cut the rates they pay on their deposits because they are essentially paying 0% on chequing accounts, etc. now.

It’s about them keeping bank profits high (obviously) and I’m good with that given the % of the TSX for bank stocks.

#108 Lorne on 07.15.15 at 3:20 pm

#2 Not a Retard on 07.15.15 at 12:09 pm
This is an astounding level of stupidity.

Are Harper and his puppet completely insane? Do you think Canadians are going to be pleased when EVERYTHING costs more?

I mean, a damn iPhone costs $300 dollars more today than it did 3 months ago, And we’re headed back to a 60 cent loonie.

It’s going to take years to undue to damage from the fallout of this terrible economic policy. The worst part is that there is no reason to think either of the other two parties would do better. In fact they will do much, much worse.
…….
Well, don’t see how that can be….after 10 years of shrewd economic leadership by the Conservatives got us here….it is hard to believe anybody could be worse! Fortunately, it is likely we are going to find out…though, they will have an awfully deep hole to dig our country out of…thanks, Steve!

#109 calgaryPhantom on 07.15.15 at 3:28 pm

With interest rate so low, and oil induced RE slowdown in Calgary. Good time to put some money in RE??

#110 Molly Craighead on 07.15.15 at 3:33 pm

To #101 Armpit

The Canadian dollar keeps dropping more than oil prices, gasoline prices than retail gasoline prices will stay high or go higher.

By the way, you maybe paying another 8.3 cents a liter if you live in Ontario but I would not be surprised if all provincial governments and cities that have that taxing power too do it also.

Another $200, $300 a year more out of a household’s pocket.

#111 MF on 07.15.15 at 3:37 pm

#77 Dave on 07.15.15 at 2:20 pm

Care to explain? The last rate cut did zip. Why was this the right thing to do? Are you running for the PC leadership in your riding?

#74 pwn3d on 07.15.15 at 2:12 pm

Was this a rant?

This much is clear: if you are 35+ and did not get into the home ownership thing when you had a chance but still want to, well you missed the boat. Was your little rant directed towards someone like that?

But for us millennials it just means this laughable homeowner delusion gets to continue for a little while longer while everyone here in the GTA believes they are the next Donald Trump, well a Donald Trump that also works at Walmart and is thousands of dollars in debt.

I have zero interest in buying/subsidizing anyone’s crap and going deep into debt for this “privilege” any time soon. What I care about is watching the CAD get pummeled. This rate cut just further highlights the circling down the drain of our economy. Remember Poloz also said GDP forecast is sharply revised downward. I wouldn’t be so smug.

MF

#112 S.Bby on 07.15.15 at 3:38 pm

Priceless…

Bank of Canada governor Stephen Poloz offers the following travel advice:

“Try to get yourself a room somewhere in P.E.I. this summer,” Poloz said after announcing the rate cut. “It’s going to be a good year.”

http://www.news1130.com/2015/07/15/the-pros-and-cons-of-the-bank-of-canadas-25-basis-point-interest-rate-cut/

#113 Underhoused on 07.15.15 at 3:42 pm

Wow, BoC are idiots.

But it’s great for anyone whose money is in USD/USD denominated investments. Cashed out of loonies more than a year ago — get paid in them (my industry pays more in Canada than it does in the US so still OK), and keep enough to run the household only.

Expecting the loonie to go to 60 cents, Just a question of when.

#114 Leo Trollstoy on 07.15.15 at 3:47 pm

Stop making this stuff up. — Garth

That’s like asking a zebra to change their stripes.

Mark had a loooong history making stuff up and providing absolutely no source material or references.

#115 Rexx Rock on 07.15.15 at 3:48 pm

DELETED

#116 Leo Trollstoy on 07.15.15 at 3:49 pm

BoC just gave me a raise! Happily earning USD, renting and debt free in YVR. Although I feel a bit strange cheering for further weakening of the Canadian economy.

I’m glad that I’m not the only one.

I’ll try to keep it muted tho… so hard…

#117 Leo Trollstoy on 07.15.15 at 3:51 pm

Hey Garth.. Read this
Royal LePage says it’s worried a further rate cut might add fuel to some of Canada’s already red hot housing markets.

Hey, Monday called and they want their news back.

#118 Holy Crap Wheres The Tylenol on 07.15.15 at 3:59 pm

This must have been before we just gave ourselves an ugly haircut this morning.

http://www.ctvnews.ca/canada/canada-ranked-as-most-admired-country-in-the-world-report-1.2470040

#119 TRT on 07.15.15 at 4:03 pm

Garth,

Write a post on what “ammo” Poloz has?

He hinted that he could cut more if needed (now 70% chance of sept cut say the markets).

What can they do afterwards outside of housing?

#120 Chris on 07.15.15 at 4:05 pm

Garth, back when you were Minister of National Revenue (circa 1993), the dollar was about where it is now, and all the signs were that it would proceed to crater, and it did over the next few years (not your fault obviously).

Seems like we’re going through a repeat of that same era. (Falling dollar, falling exports, credit downgrades in Ontario just like 1992, etc.) The only thing that seems different is that the US was still in recession at that time and just gearing up to rebound, whereas now the US is in full rebound. From what I remember, the mid 90s actually wasn’t too bad, but the brain drain to the US was massive during that period.

If you get a chance, I’d be interested in hearing your comments in a future post about what your experience then might tell us about what the near term future might hold for the broader economy, not just real estate. How should those of us with jobs in the private sector (not connected to real estate, and not in an area that’s hot like high tech) prepare for the next few years?

#121 Baz on 07.15.15 at 4:05 pm

Garth, I am really scared but happy to be renting .. tell me if I should worry about my 50k CAD$ setting in cash in my saving account ?

#122 Freedom First on 07.15.15 at 4:06 pm

FUBAR

Next question. Will there be another rate reduction in Sept., bringing us to the .25 rate reached in the GFC.

With H&P sauce, anything is possible. Fact.

#123 Mike S on 07.15.15 at 4:09 pm

““This is because the perception amongst the banks is that credit-worthiness amongst the borrowers linked to prime has diminished.” Wrong. It’s all about spreads and bank profitability, not a drop in credit quality. Stop making this stuff up. — Garth”

I have to ask this then

We know that higher rates are profitable for the banks in general, so why they should lower the prime rate at all? Why not raise it a quartet point or more regardless of what the BoC does?

I’m sure going to enjoy these increased dividends …

Similar question on the fix rates, why is there a competition going on on 5 yr fixed mortgage, wouldn’t it be more profitable for all 5 banks to just increase the spreads?

#124 TJ on 07.15.15 at 4:13 pm

The BoC will do whatever it takes to maintain the bubble once it begins to deflate. Similar to the Fed making it a goal of monetary policy to restore housing prices to their 2007 levels (ie the US had a housing bubble, it popped, the Fed printed trillions to restore the bubble). Today Ponzi Poloz talked about the other tools available if he needs them in the presser. “Other tools” means negative interest rate and QE. You’ll see both of those here before you see a long term housing downturn.

Buyers who say ‘you don’t wait to buy, you buy and wait’ are a) complete idiots and b) correct, at least in the upside world we live in. Any short term dip that may occur will be filled in by the BoC. In this ponzi era debt bonanza, deflation of any sort, even deflation of bubbles, cannot be allowed.

Oh, and the fun won’t get started until the fall. That’s when oil should push new lows.

#125 WhoLikesShortShorts on 07.15.15 at 4:16 pm

@calgaryPhantom

Srsly? Have you been reading this blog?

#126 Smartalox on 07.15.15 at 4:19 pm

If a bank can offer my septuagenarian (70-something) parents with no income other than CPP and OAS totaling less than $25k / year a 25-year mortgage for over $750k, then I’m inclined to believe that Khristine’s story about her mortgage may have a ring of truth.

I say offered; that doesn’t mean that they accepted. But not outside the realm of possibility, as an indication of where creditworthiness standards are headed.

And speaking of credit, Khristine, your experience may be different, but I’ve NEVER known credit card debt to be affected by bank rate fluctuations. If your credit card interest rates are 12% or 19%, they’re not about to change, except possibly to rise, as more credit card companies take the hit from users who declare bankruptcy, and stiff them with the bills.

#127 Kothar on 07.15.15 at 4:19 pm

The time has come to load up, I am going to use my HELOC now to get a new car, have some trips in the coming year and some reno to my house, with some borrowing to invest as well. It does not matter any more about debt, if you want something just borrow it, the BoC has your back. As a matter of fact all Western Centeral banks have our backs, the more debt the merrier!

#128 Luxury Yacht on 07.15.15 at 4:26 pm

I can’t say I’m a huge fan of Mark and I filter some of what he has to say out but to his credit he has been leading the charge for months on here that the Canadian rate would be slashed yet again. I would of put money on the next move being an increase. Keep up the good work Mark!

#129 johnk on 07.15.15 at 4:32 pm

This one has Harpoon’s grubby, greasy fingerprints all over it. Poloz is a good boy. Obedient and does not talk back. Wouldn’t want to be deprived of our limo, office suite and squads of fartcatchers scurrying to and fro hoping to look useful. It’s all good, pensionable time.

#130 Shawn on 07.15.15 at 4:36 pm

Why The Banks Won’t Pass Along all of the 25 basis point cut

#107 CJBob on 07.15.15 at 3:18 pm said:

The reason the banks won’t pass all the rate cut along to consumers is they can’t cut the rates they pay on their deposits because they are essentially paying 0% on chequing accounts, etc. now.

**************************************
Which is absolutely correct.

#131 Bottoms_Up on 07.15.15 at 4:44 pm

#107 CJBob on 07.15.15 at 3:18 pm
————————–
Sorry, the bank takes your money and pays you 0.5% interest on it, then turns around and lends 10x that amount at 6%. They can definitely afford to match the BoC. Greedy, very greedy, is all it is.

#132 Shawn on 07.15.15 at 4:47 pm

TSX Earnings

I don’t know of any free and reliable source for that.

Most published P/E ratios have been adjusted in various ways and are unreliable.

The TSX index is heavily weighted to energy and other commodities and its earnings are therefore inherently extremely volatile. TSX earnings are not a particularly good reflection of the state of the Canadian economy.

#133 Bottoms_Up on 07.15.15 at 4:48 pm

#101 armpit on 07.15.15 at 3:12 pm
———————————
We purchase gasoline in US dollars, hence the fall in oil price hasnt ultimately resulted in much lower gasoline prices because our dollar has also fallen.

#134 Joe2.0 on 07.15.15 at 4:53 pm

OH Scamada.
Milk the sheeple until dry.
Then uprates.
It’s all about the dirivitive spider web unraveling.
Soon.

#135 Unhinged Loon on 07.15.15 at 5:04 pm

@S.Bby

“Try to get yourself a room somewhere in P.E.I. this summer,” Poloz said after announcing the rate cut. “It’s going to be a good year.”

That’s sound advice. Why would you hemorrhage money out of Canada for leisure, when we have such a bounty of natural and cultural landmarks?

#136 Smoking Man on 07.15.15 at 5:06 pm

#83 Mike S on 07.15.15 at 2:26 pm
“Stop slulking when your wishfull bias stares into the face of ugly reality.

Back a few weeks ago when USDCAD was at about 1.22 I told you bastards to go 50 contracts long USDCAD.

How many listend. I mean ive only been right a zillon times on this shit here.”

Smoking Man

Maybe you should open a blog or something in which you can discuss Herdonomics and rate policies.
……

That’s a ton of work, commitment . I have accute allergies to this type of thing.

Plus I post all that crap here.

#137 ben on 07.15.15 at 5:08 pm

Khristine – my advice is to troll better. Even the name is hard to believe!

brampton – from here on in I’m keeping most of my savings *outside* CAD. Still earning in CAD but might try to change that also!

#138 Big Mack & Fries on 07.15.15 at 5:12 pm

I’m super happy with the rate cut and the Loonie slump….it means I get a big raise. I work at the OC of a CDN co in the USA and get paid in USD with all my expenses comped due to my expat status.

I spend nothing in Canada…nor will I. But everybody with foreign currency like myself can beat the crap out of any Canadian in a bidding war simply by having Yuan, Pounds, Euro’s or USD in the bank. This $C whack makes foreign buyers the king of the castle. I can buy a third more with my dollar…..75% more with my pounds….and 40% discounts for anyone coming with Renminbi. Of course foreign buyers are laughing….wouldn’t you?

I won’t buy anything in Canada because I buy everything in the US at less than 50% of what it costs in Canada….especially food and all consumer products. Plus…in Texas there is no sales tax. I can buy another house in Dallas for $300K…..the same would cost 3 million in Vancouver.

My $35000 car in Texas costs $47500 on a lot in Vancouver. My 3-pak of T-Bones is $15 in Texas…$50 ++ in Vancouver.

So…when I cruise into Stanley Park and you’re behind me at a hot dog stand…watch me get more change for my US dollar than the item I buy cost you. It’s funny ’cause Canadians peasants are willing to take this nonsense. Put a nice shine on my boots and I might give you a one dollar USD tip. ….enough to buy a doobie in Kits.

#139 The American on 07.15.15 at 5:16 pm

And it’s going to go lower… for a long while.

http://www.cbc.ca/news/business/bank-of-canada-slashes-benchmark-rate-to-0-5-loonie-drops-to-6-year-low-1.3152673

#140 Llewelyn on 07.15.15 at 5:17 pm

I wasn’t kidding about a contest related to improving the Canadian economy. What do we have to lose.

Why limit government investment to Royal Commissions or Senate sub-committees that pick at the entails of our mistakes.

I am 100% certain that the best economic minds in Canada are not working in Ottawa. Surely there are thousands of citizens that would take the time to circulate their thoughts on how the Canadian economy might be improved. If I am wrong about this we probably deserve our fate.

Canada is in serious trouble and our Captain has asked the band to keep playing while he seaches for a lifeboat.

#141 Tom from Mississauga on 07.15.15 at 5:17 pm

I wish I had a financial blog for days like today…

#142 Blacksheep on 07.15.15 at 5:21 pm

Rate cut is not all bad.

My canadian export customers, just got more competitive globally. Holidays will cost more, but with all the work I’m getting from my export customers, It more than offsets. As I pointed out a few days back, our rates are still higher, than the US.

This is unless of course you failed to figure out:

If one is FORCED to live north of the 49 th P. that, Toronto isn’t Chicago, it IS New York and Vancouver isn’t Seattle, it IS Los Angles AND wanted a house, but waited for the crash on the sidelines…..

Yes ,for these unfortunate souls, this rate cut, just made things much worse.

#143 Edith on 07.15.15 at 5:24 pm

Not that SFH’s in Vancouver need any help, but I’m sure they’ll take it.

A shortage of listings. Cheap credit. And a 25% discount for out of towners (a la loonie).

#144 Edward on 07.15.15 at 5:31 pm

No jobs created.
No wage inflation.
Cost of living inflation.
Shelter costs risen dramatically.
A potential housing bubble brewing.
25% discounted currency.
A recession.
Manufacturing wasteland.

But hey, we have a balanced budget.

Sorry Stephen, but you should probably start packing. It’s all about the economy.

#145 Elmer on 07.15.15 at 5:35 pm

So I guess all the experts running the economy are wrong and only you are right? If they cut the rate they must have evaluated all the options and determined that it was the best course of action. I’m sure they did not make the decision lightly.

#146 gut check on 07.15.15 at 5:35 pm

Interesting read. My favorite parts are these:

“The cross currents are beyond crazy in Vancouver — it’s a mix of money laundering, speculation, low interest rates,” said Marc Cohodes, once called Wall Street’s highest-profile short-seller by The New York Times. “A house is something you live in, but in Vancouver you guys are trading them like the penny stocks on Howe Street.”

and

“Local real estate professionals predicted the U.S. investors are likely to lose their shirts betting against Vancouver property, which they described as a __special market thriving on international demand.__”

““Toronto sees some offshore money from China, but definitely Vancouver is in its own world,” the analyst said.

“Some of the guys that have timed this bet think that when China blows up Vancouver will blow up too, but I’m not sure that will happen.”

here’s the complete piece: http://news.nationalpost.com/news/canada/u-s-short-sellers-betting-on-canadian-housing-crash-an-accident-waiting-to-happen

#147 Lastline on 07.15.15 at 5:39 pm

It’s rather unfortunate, but this all setting up that Canada will be a 3rd world nation by the end of the decade. It will be slow and painful. Better sell before it’s too late.

#148 Macrath on 07.15.15 at 5:41 pm

Harper Government™ raising Canadian`s cost of living
to stimulate the economy. We will see how that works out soon enough.

43% of household debt in Canada has a total debt-to-gross-income ratio above 250%. Poloz just pushed a bunch of folks off the cliff.

#149 LOL Canada on 07.15.15 at 5:43 pm

Even Real Estate Agents fear the latest round of cuts. Obviously, what goes down, must come up, so the longer the can is kicked down the road, the worse the pain will be when it comes to light.

If the US rates go up, and ours go down, then the dollar will get destroyed. Low dollar, in a global economy is terrible. most of the plastic crap we buy is from China, and food is from other countries.

A weak dollar means everything is more expensive.

If you make 50K, in USD, your income dropped over 30% in the last year based on exchange. Foreign investors won’t look to Canada because of our sinking dollar as well. Who would buy a house as an investment in Canada if the price it is priced in is declining.

People say HAM is propping up the market, but HAM would be losing some serious cash in the last year on the Canadian market.

When the rate announcement came out, people were excited by lower rates, but it looks like a lot of it won’t be passed to the consumer. Instead, the consumer will get higher prices at the stores. Better save those food stamps.

Anyways, back to realtors. People don’t buy a house when it is declining, so a crash is obviously bad for realtors, and if USA raises rates, we will be forced to do so as well or we will watch our dollar fall to even lower levels.

#150 ZPR CPD UGH on 07.15.15 at 5:47 pm

Meanwhile, ZPR and CPD are getting killed, at -12.9% and -8.3% YTD. Admittedly I don’t understand them, but I hope to understand what happened with them. Did companies across the board lower their dividends?

All rate-sensitive assets in Canada dipped today. Obviously. Just hang on. There’s a trip back up coming. Meanwhile they continue to spit out yield. — Garth

#151 Has anyone seen this? on 07.15.15 at 5:50 pm

http://www.cnbc.com/2015/07/15/feds-yellen-remain-on-track-to-raise-rates-this-year-if-economy-evolves-as-expected.html

(Rep Sean Duffy RIPS the honest FED and Ms Yellen a new one – expect more of this.)

#152 Getting out of Canada on 07.15.15 at 5:56 pm

There’s no other option. Shitty currency. Shitty economy. Overpriced trash real estate on postage stamp size lots. No job prospects for the kids.

US or Northern Europe it is. Sold all real estate, cashing out and leaving this crap shoot behind.

#153 Joe2.0 on 07.15.15 at 6:02 pm

Garth the goods…again.
Just spoke to the manager of TD on the N Shore N Van re the rate drop.
He agreed with me that the dirivitives are at play here.
Hot from his lips.
They are seeing loads of foriegn money and have been for ages, investing all over.
He also mentioned the Iranian money that’s going to reappear once the sanctions have lifted.
Chinese money galore.

Hot from his lips part 2.
The average Canadian doesn’t have a hope.

Mortgage rates go down.
House prices up.
CDN dollar goes down.

Canadians have been shafted.

The local TD guy on the north shore. Wow. You are some connected. — Garth

#154 OttawaMike on 07.15.15 at 6:05 pm

Oh Scheiße!

Our glorious leader is holed up in his bunker trying to figure out who to blame the recession on:

http://www.economist.com/news/americas/21657396-recession-may-already-have-started-government-which-facing-election?fsrc=scn/tw/te/pe/ed/aroughride

The Greeks? The Chinese? The Liberal/NDP rebel leftist parties? The Satanic worshipers?

Better implement prorogation just to be safe.

#155 sockeye sam on 07.15.15 at 6:06 pm

Riot in Greece . It’s Back.

http://dailycaller.com/2015/07/15/protesters-riot-in-greece/

#156 Butch on 07.15.15 at 6:15 pm

Didn’t Vancouver/Toronto real estate go up another 10% this year?

Are we still on track for the 15% fall in Canadian real estate?

#157 nonplused on 07.15.15 at 6:21 pm

Well I for one am not surprised by the cut even though I think it was the wrong thing to do. Here in Cowtown there isn’t a sense of panic yet but the number of people I know personally who are getting laid off or asked to retire is growing every day.

But I don’t think low rates can help. Until US energy demand rises enough to use up their own surpluses and increase activity in the Alberta patch things will remain constrained. That would be even with a negative benchmark rate.

#158 Balmuto on 07.15.15 at 6:23 pm

Oil’s a dog, Gold’s a dog, Base Metals are a dog. Cars can be made more cheaply in Mexico. Blackberry and Bombardier are a joke. We’re a Finance and Real Estate economy, folks. Hanging by a thread.

#159 Sosuke Aizen on 07.15.15 at 6:26 pm

#12 Khristine van Lincoln:
“Borrowing a down payment” is an interesting choice of words. If you have to borrow a down payment, then it’s not a down payment, is it? It’s another loan. By definition, down payment is the portion that is not borrowed.

It is impossible to borrow anywhere near $1.8 million on a salary of $52,500. Neither MICs nor banks would lend you that much money. The only way you might be able to pull it off is to borrow most of the purchase price from the Bank of Mom, and tell the lender that’s your saved down payment. You might also have to fake a higher income. Even your credit card debt seems too high to be real. I believe there is no truth to your story.

The BoC overnight rate affects the prime rate, but it doesn’t pull down credit card rates.

#160 dosouth on 07.15.15 at 6:27 pm

No surprise here, no surpise at all…no leadership either.

#161 NoOneOfConsequence on 07.15.15 at 6:32 pm

You keep saying “89% of the time interest rates in Canada follow the interest rates of the USA”….in yet….if I look back at the last 20 years – that doesn’t seem to be completely accurate.
I did a comparison here: http://www.tradingeconomics.com/united-states/interest-rate

There are some significant differences on the chart when I add in Canadian interest rates and compare the lines.

Accurate. Trust me. — Garth

#162 Washed Up Lawyer on 07.15.15 at 6:32 pm

The reason my comments (which Hon. GT graciously permits) are always off topic is because with no background in economics, commerce and investing, I do not understand what the hell the rest of you are talking about.

So I try to inject newsy, breezy and incredibly well written comments on matters that are in my wheelhouse like sewage backups in Calgary, calf roping, horse genetics, Ford trucks, sporting firearms and the lack of paying clients.

I’ll try to avoid Harper and Poloz.

I completely get Smoking Man. He uses short words and short sentences.

#163 The American on 07.15.15 at 6:35 pm

Canada is now, without a doubt, dealing with a conundrum of epic proportions. As the largest housing bubble in the G20 (ask IMF, lead global economists, global banks, etc.), here are the two scenarios:

1) BOC drops rates even further to assist in keeping people in their homes, as well as continued spurred growth in the real estate sector. After all, an ungody amount of the Canadian economy now relies on grossly overvalued real estate. Rate drops, people binge more on credit, consumer ability to spend goes down. Well, now this is just horrific, isn’t it? It also means the loonies will continue its downward spiral into who knows how low.

2) BOC follows U.S. Fed in third quarter and raises rates. This pushes affordability factor out the door for people in homes or people purchasing homes. In an economy where Canadians are indebted at an all-time high (162%-167%, depending on report), a rate hike means people will indeed be losing homes. Real estate takes downturn BIG TIME. The economy suffers even more than it already is in an economy that relies so much on this particular industry. Loonie recovers *some,* but not nearly what would be expected due to investors shying away from a declining market. Nobody catches a falling knife. Downward spiral ensues to who knows where.

Either way it’s all over. People are spent as it stands already. A move in either direction has negative impact. The reason for the chose rate reduction today? Well, that’s easy. Elections are just around the corner.

#164 moe on 07.15.15 at 6:39 pm

people will walk away from their properties just like they did in the US. Tax payers will have to bail out gamblers.

#165 chapter 9 on 07.15.15 at 6:44 pm

#12 Khris

$100,000.00 in credit card debt @19%, your minimum payment would be $2583.37 assuming the minimum payment was calculated, interest plus 1% of the balance. Even @$100,000 this would take 48 years to pay off. Don’t wait too long to ask for that raise,LOL

#166 ben on 07.15.15 at 6:52 pm

Lots of “sell up and leave” stuff. Let’s be clear – Canada has fabulous natural resources, a prime spot next to the US with a big land border so great defence. Still very good infrastructure.

This place can (and I think will) be fine. All you have to do is crash housing and default on some of the insanely greedy promises the boomers made to themselves.

Wealth is made up of the things we do tomorrow. Yes there are problems due to missed opportunities, but compared to most countries Canada has a 25 mile start in a marathon.

Make work pay instead of land speculation. Purge your elite and the default on the bribes that elite made to the boomers.

Job done.

Now how many on here are boomers who would fight tooth and nail for “their” money from an insanely generous pension scheme and “their” house price appreciation? You guys have to put up or shut up.

#167 8102 on 07.15.15 at 6:58 pm

The extent that Steve and the boys will go through to get re-elected is just plain astonishing and they are getting away with it!

#168 ben on 07.15.15 at 7:03 pm

8102 – how are they getting away with it? Who is voting for them in exchange for bribes?

#169 Former Fool on 07.15.15 at 7:03 pm

The BoC cut, as Garth alludes to, is a political move. If the Conservatives become the party that crashes Canada’s housing market, they are finished from politics for a decade. They’re trying to keep the economy sputtering along until October. Then if shit hits the fan economically, well, whoever gets elected has a mess to clean up.

I’m glad I bought some more ETFs while the markets panicked over the last few weeks, and I’m enjoying the nice boost overall today. Agree with one poster on here, Canada’s going to be bleak for a while. Now, I’m considering my options down South now that I have no mortgage straddling me, am renting, and investing. Love the freedom!

Only wish I’d met Garth when I was 21 to shine the light. Garth, where the hell were you when all my family/friends were pumping R/E as the only safe investment in 2002? Meeting you could have added a few hundred g’s to my overall net worth. ;-)

#170 Waterloo Resident on 07.15.15 at 7:11 pm

Do you really think that housing prices in Canada are going to drop more than 4 or 5% when the vast majority of people here on this blog are talking about how they are Salivating, just waiting for houses to crash 10%, and they they will quickly buy up the spoils ???

Nope, ain’t going to happen, too many rich idiots in Canada.

Only way that Canadian homes drop in price drastically is if we get a massive recession and corresponding massive job losses. That will be the only way people will give up the idea of buying a house, it will be because are without an income. Until then you can expect that any 2% drop in prices will quickly be met by a flock of upper-income Canadians swooping down to buy up the ‘BARGAINS’, bidding up the prices 4 or 5% above what its starting prices was.

Canada really needs a CRUSHING ECONOMIC DEPRESSION, one that lasts 30 to 50 years, one so bad that the government goes broke just like Greece did. That is the only way this housing bubble will come to an end.

But don’t worry, the way the Ontario politicians are overspending, that scenario is just 10 to 15 years away.

#171 Wofenstein on 07.15.15 at 7:12 pm

This is classic monetary policy analysis. Funny, when they taught it to me, they said that an independent central bank would prevent such scenarios. This appears to be a politically motivated decision. There’s a book named The Calculus of Consent that explains how this could happen, but it doesn’t offer a solid strategy for how a willfully ignorant public could make better decisions. I’d ask if this increases the risk of a bubble forming, but when the BoC has just cut the cost of money by 1/3, I think I know the answer.

#172 Frank on 07.15.15 at 7:13 pm

Obviously, what goes down, must come up

You’re thinking of gravity. Interest rates and economics do not have to obey the laws of physics. Expecting rationality from a system not constrained by natural properties is silly.

Today could be the start of a 30 year low rate period or a 30 day one. There’s no reason it has to obey your expectations.

#173 Kreditanstalt on 07.15.15 at 7:14 pm

The problem is the idiotic Keynesian idea that cheaper and cheaper money can somehow “create” genuine growth.

All it MIGHT do is fool investors into misallocating yet more real wealth.

#174 Buy Low Sell High on 07.15.15 at 7:17 pm

Poloz is so far away from reality in Canada that he might as well just be called Plotoz!

#175 not 1st on 07.15.15 at 7:19 pm

What a bunch of fools on the blog today. Canada is an export led economy and sacrificing the dollar is without a doubt the easiest way to ensure our commodities keep getting bought overseas.

But you think your timmies breakfast is too expensive now? BooHoo. If the world doesn’t buy our oil, wood, gas etc, you will be eating from the dumpster in back.

#176 AisA on 07.15.15 at 7:24 pm

I stopped trying to guess when the bubble would burst about a year ago.

What hasn’t stopped is my belief that no soft landing is possible. Crash or nothing has been the modus operandi ever since the 40 year mortgage was introduced.

#177 MSM-Free Zone on 07.15.15 at 7:24 pm

“….Cunning Tories may plan early election call — with aim of draining opponents’ finances….” – National Post
_________________________

“…It seems extremely likely that Harper will visit David Johnston sometime in mid-August, then launch a lopsided advertising war using his greater financial firepower….All the signs for an early campaign are present. Conservative MPs say they were told to take their vacation in July and report that technology is being tested on the ground this month. No-one is confirming an early writ drop internally, but most MPs I spoke with are hedging their bets on a mid-August call….”

http://news.nationalpost.com/full-comment/john-ivison-cunning-tories-may-plan-early-election-call-with-aim-of-draining-opponents-finances

Now, does today make sense? — Garth

#178 The American on 07.15.15 at 7:32 pm

At #175: Not 1st (no shit), Canada being a commodity-driven economy needs to wake up and realize the U.S. just signed the Iran Nuclear deal. U.S. is by far and away Canada’s largest trading partner. Know what this means, dude? Gas in the U.S. headed for $2.50/gallon or LOWER, much in part due to resources coming at a greater reduced rate from the Middle East due to the deal. That’s a known given of the deal and is not disputed. Export of this resource to the U.S. from Canada is going wayside, especially in consideration of our own massive oil and natural gas resources. Now, I suppose you want to talk water, right? Suuuuuuuuurrrrrrre…. as BC sits in drought as well.

#179 Nemesis on 07.15.15 at 7:37 pm

#NotManyPeopleKnow… #BusbyBerkeleyWasAnEconomist… #BeforeHeBecameInfatuated… #WithKaleidoscopes,Hollywood&’Choreography’…

https://youtu.be/UJOjTNuuEVw

#180 BS on 07.15.15 at 7:41 pm

Why the one-sided assumption that everyone and his dog will rush out and gorge on more debt?
What about this as being an opportunity for paying off debts faster and more tourism dollars flowing into our economy hence creating jobs ..??

Good point. Lets ignore what happened after every other rate cut and assume the opposite will happen this time.

#181 Danger Dan on 07.15.15 at 7:49 pm

I thought that Madani guy was nuts to predict the rate cut, guess that goes to show what I know.

CAD was on the way down anyway, rate cut or not. At least this way we can benefit from the trade boost while the weather’s nice.

#182 Drill Babay Drill on 07.15.15 at 7:53 pm

The Mantra in the past for lowering interest rates and letting the loonie slide was to prop up eastern Canada manufacturing. However when you look at the manufacturing plants that have shutdown since 2005 alone you have to wonder what manufacturing is left to prop up ?
Canada is a resource country. We need to build on our strengths. Canada needs to have tidewater access for our oil and nat gas or we are completely at the mercy of the USA. How has this been working out for us lately ?

#183 tundra pete on 07.15.15 at 7:56 pm

This is excellent news. Exactly what we needed. One more nail in Harpers coffin. The younger crowd is going to be pissed come voting day. Forget about closing the liquor stores and pubs on Oct. 19, Harper and his crew will be scalped if they are anywhere near voters that day.

Welcome the New World Order. Be it NDP or Liberal who the hell cares at least we will be rid of the parliamentary bully and his crew of democratic pedophiles.

#184 BS on 07.15.15 at 7:58 pm

Whomever makes up the next government is going to have a real challenge on their hands.

Whomever makes up the next government (Cons, Libs or NDP) will keep doing the same thing until it blows up. Have you heard any party platform say they will do anything different with respect to housing, CMHC, etc? Nope, just more of the same. Then after it implodes they will try to do it some more to launch a recovery. Which of course won’t work. Then it will be massive federal government deficits and debt like Greece.

History has shown this is what politicians do. They never learn. It is about now, screw tomorrow.

#185 Mukadi on 07.15.15 at 8:01 pm

I told you that Nostradamus was always right – that the rate was going to the toilet!!

This is good news for the international vultures circling a dead economy.

CAD 1.2920 / 1 USD is just the beginning.

#186 Grantmi on 07.15.15 at 8:03 pm

Immediately after BEFORE the Bank of Canada shocked once again with a rate cut the dollar (as predicted) plunged, tumbling more than a cent.

Someone knew in advance.. the Loonie dove BEFORE the announcement.. Where’s the investigation into THAT!!!

#187 TKO canada on 07.15.15 at 8:07 pm

BOC has no clue. the end

#188 Mark on 07.15.15 at 8:07 pm

Wow, makes me glad that I ‘only’ have a 180k mortgage….although you can get a decent place in Windsor for that! But it is exactly 2 times my income which is pretty reasonable nowadays

#189 Waitin', Rentin', Savin' in YYC on 07.15.15 at 8:08 pm

Song of Day:

https://www.youtube.com/watch?v=BWpYQjuJ0u0

Harper should add this to his piano repertoire

#190 not 1st on 07.15.15 at 8:11 pm

Any true leader would book off 30 minutes of prime time and address the nation and offer a simple message.

“My fellow Canadians – Canada skirted a number of economic downturns in the past 10 years due to a combination of government and central bank policy but that has created imbalances in the economy. And now Canada is in the midst of a larger world wide slow down that we will not be able to avoid this time. Therefore, the BofC has taken the step of lowering the overnight lending rate to 0.5%. This is done in order to ensure our exports continue to be purchased all over the world and so that domestic businesses can continue to operate profitably and keep people employed.

It is not however a green light to load up on consumer or household debt. Citizens should be using this time to lower their debt to income ratios so that when this soft patch is passed we can return to a solid economic footing”

#191 my house is my friend on 07.15.15 at 8:12 pm

They keep telling us rates are going up and then turn around and lower them. Same with the economy, its always going to get better. Politicians are all liars. Everybody I know complains about the rising cost of living. I am determined to live within my means. Cable and restaurants gone and trips south gone.

#192 Brian on 07.15.15 at 8:23 pm

Just imagine those fortunate souls who bought SFH from 2000 – 2005, have seen their properties double or even triple in value, and now are enjoying the windfall of 2% rates to finish off their mortgage. I am stuck on the outside looking in, and will forever be in a different financial class as them. Might take 10 – 20 years for this mess to revert to the mean, in that time I’ll hit retirement age. I feel cheated.

People who bought a decade ago are hardly finishing their mortgages off. Moreover, if they don’t sell, they do not profit. The future will not look like the past. BTW, who ‘cheated’ you? — Garth

#193 imaso stupid eh on 07.15.15 at 8:25 pm

So what happened to the sturdy as the Canadian Shield claim? Must be an election year. Again. So why haven’t the credit card rates dropped ? What happened to that pledge?

#194 Godth on 07.15.15 at 8:30 pm

#166 ben on 07.15.15 at 6:52 pm

Hahaha. When you learn how to cure greed, normalcy bias and resource depletion – to name a few, please let us know. The boomers are a lost cause, they just want to coast to the finish line and will fight tooth and nail to make sure that happens. They’ve already sold their kids and grand-kids down the river so why would they stop now?

I case you haven’t noticed this blog is all about holding the boomers hands while they dream of a rosie end.

I’ll take a McMansion and a Hummer to go. I’m going golfing – Four! Good luck suckers.

Yeah. Greece. Oil. China. Rates. Demographics. It’s all a conspiracy. Good thinking. — Garth

#195 Cici on 07.15.15 at 8:36 pm

#58 Robert James

I am pretty sure Harper will be out on his neo-con ass come the election.. Even my sister who lives is Sask. who has been a card carrying conservative all her life has had enough of this ass hole,,in her own words.. I don`t envy the next party that wins when they will have to clean this mess up..
___________________________________________

That’s their game plan Robert…they know they’re on their way out, and they’re setting the next government up for failure, with the hope that things will get so bad for Canadians under the next ruling party that we’ll forget that the conservatives idiot policies brought us there. That will help them get tvoted back in again.

I’m voting Conservative this time round and I’m hoping many others will follow suit because I want them to pay for their crimes.

#196 MF on 07.15.15 at 8:37 pm

ZPR CPD UGH on 07.15.15 at 5:47 pm

That was needed Garth. Cpd is my worst performing asset and I’m down a lot. The yield does not make up for the shortfall.

You mean to say that rates will “raise” at some point? I used to think so but not anymore. There’s no one at the helm anymore in my eyes at the BoC

MF

#197 Godth on 07.15.15 at 8:43 pm

Yeah. Greece. Oil. China. Rates. Demographics. It’s all a conspiracy. Good thinking. — Garth

The basic conspiracy is greed and stupidity. Infinite growth on a finite planet. Hahahahaha.

The future is going to be so much fun.

#198 Brian on 07.15.15 at 8:47 pm

People who bought a decade ago are hardly finishing their mortgages off. Moreover, if they don’t sell, they do not profit. The future will not look like the past. BTW, who ‘cheated’ you? — Garth
________________________

We have friends who bought in port moody in 2003 for 300k. Good houses. They are close to finishing off / or entirely done their mortgage now. The wife doesn’t need to work, they are on easy street.

Where as myself and my wife – potential slaves to 1M homes (if we chose to buy), but we sold townhome a few months ago and now rent)

Cheated as in other people who make similar salaries, most likely even less, and who were just lucky enough to be a few years older than us who had kids and bought a house and settled down, are now sitting on this windfall, all for dumb luck. They certainly were not savvy investors. Regrettably I feel bitter about this. I’m working on it. Thanks for all you do.

#199 kickthecan on 07.15.15 at 8:48 pm

“In Canada the strategy to rescue a ship sinking in debt is to have everybody borrow more”

uh, I think this is the Global de facto means for growth(?) and has been for a long time now…

gotta love our 2 city real estate economy. and it’s going to go on for a long, long, looong time…..
Calgary’s not even going down, what’s there to say. Post fodder for a long time GT…..cheer up……..

#200 kickthecan on 07.15.15 at 8:49 pm

“In Canada the strategy to rescue a ship sinking in debt is to have everybody borrow more”

uh, I think this is the Global de facto means for growth(?) and has been for a long time now…

gotta love our 2 city real estate economy. and it’s going to go on for a long, long, looong time…..
Calgary’s not even going down, what’s there to say. Post fodder for a long time GT…..cheer up……

#201 bigtown on 07.15.15 at 8:50 pm

Okay so the currency won’t be motivating to any new immigrants to relocate but the latest Canada booster again stating WE ARE THE BEST COUNTRY IN THE WORLD cause we have five months of flesh eating black flies in the only months you can go outside and the other seven months we can only look out the window.

Boy that Mr. Poloz sure brings out all the sissies in this northern gulag…HOOYAH

#202 Smoking Man on 07.15.15 at 9:13 pm

Vindicated!!!!

Reading all your negative comments reinforces my core bielef that your teachers seriously screwed up your minds.

Harpo is Bad, Poloz is an Idiot. Bla bla bla.

You knew it was going to happen, been telling you pricks it for the longest time.

I have vision, telecontetic powers. Just this weekend I finally trained my autistic dog Wyatt to finaly go wee-wee, and number 2 outside.

I communicated with him using brain waves and wierd facial expressions. It worked. Now I got to work on barking, he’s never barked or growled.

Back to you idiots.. The reason your pissed is because you have iron clad, unshaken wrong belief system.

Not two weeks ago had you taken my advice on USDCAD you would be sitting right now with a positive P&L of 500k.

You wouldn’t be pissed right now, but your trained by your slavers, never listen to a dude like me, who advocates lying, dishonesty, screw the little guy. Alphas Rule.

You where taught, work hard and study, be hounest, don’t practice plagiarism. Get a degree, then a job with a fat pay check awaits with that white picket fence.

And you still beilive it..

But if you could remove your conditioning for just an hour and realy study your work environment. You will see what’s obvious to me.

Bad men finish first…

Now back to batching, cause things didn’t go the way you where told they would go.

#203 Leo Trollstoy on 07.15.15 at 9:18 pm

Oil’s a dog, Gold’s a dog, Base Metals are a dog.

CAD’s a dog.

Good luck to bombardier and blackberry. They’re gonna need it.

#204 real estate lover on 07.15.15 at 9:18 pm

Furthermore…….
Another cut coming soon to 0.25% and Vancouver real estate 50% higher in the next 3 years ……..
Bring it on baby……………….

#205 Leo Trollstoy on 07.15.15 at 9:22 pm

Didn’t Vancouver/Toronto real estate go up another 10% this year?

Something stupid like that.

#206 VICTORIA TEA PARTY on 07.15.15 at 9:24 pm

WHAT A FREAKIN’ DISASTER…

awaits all those highly indebted Canadians in about a year or less.

By then, it’ll be a pretty sure bet, that the US Fed will have marched its bank rate up probably by 75 bps.

Not only will this roil our stock and real estate markets, nevermind the commodities (which will tank even further thanks to an even more powerful USD), but our central bank’s gutless monetary policy will take over where 2008 left off and Canada’s middle class will be looking somewhat like downtown Stalingrad circa Fedbruary 1943.

In modern times citizens of a democracy should always be on their toes when they see their central government (and bank) essentially offering something for nothing: in Canada’s current case irresistibly lowering interest rates, which our so-called betters inevitably say are needed, “in order to bring our economy back into balance , create more jobs and restore economic growth.” Piffle!

NDP governments say essentially the same thing: “we go into deficit during the bad times so that we can help out working people then pay off the money when the good times return…” More piffle!

So, one government wants YOU to dive into debt as your individual patriotic duty while the other one wants you to approve of limitless government deficits with no idea of how much will be borrowed or paid back, if ever.

The signals here are that all of this debt will solve your problems and Easy Street will follow later in the week, something like what’s shaking in Greece is my guess.

BELIEVE ME…

It won’t really matter which party wins the next federal general election because the policies of the current administration, going back to the GFC, have resoundingly backfired.

It’s too late to turn this sinking ship of fiscal/monetary state around. Instead it’s battered barnacle-covered hulk is in need of a comfy looking beach right about now.

And, finally, no: neither an NDP nor a Liberal government, will EVER pay off your personal debts, no matter how much they promise and how much you whine.

SO, BACK TO BASICS…

start paying down your deficits, because NO ONE ELSE WILL, and learn to live a really simple existence. And after a few years you’ll believe that you’re living the Life of Riley, or whatever. Compared to your neighbours, that may well be the case!

ALWAYS REMEMBER THAT

this government is flat broke and in recession.

We are in great company joining, as we have, a pantheon of governments right around the world.

All of those leaders, and banksters, are all scared out of their wits about their terrible looking balance sheets. They simply don’t know WHAT TO DO!

#207 juno on 07.15.15 at 9:29 pm

the BOC will cut mortgage rates. If Oil job disappears and export decline they need something for their stats for the next few months.

That will be the only thing driving Canada’s economy. Yes housing. So they will let this gasbag rise. Making home owners feel warm and fuzzy inside.

But in reality its another tax. Property taxes will continue to increase. But on the flips low interest rates means less income for the old savers. For those hoping their savings can help them out in the retirement years , well think again.

Declining dollar will kill the poor, food and other basic needs will go up.

Oh yes we just got a decline in our wages, that is what the declining dollar does.

So what is a retired person to do pay more taxes, less interest income coming in, and cost of living going up.
I guess they can live on dog food and mac an cheese

#208 John in Mtl on 07.15.15 at 9:33 pm

#195 Cici on 07.15.15 at 8:36 pm
I’m voting Conservative this time round and I’m hoping many others will follow suit because I want them to pay for their crimes.

Ha!! They’ll just keep doing the same thing they’ve always done and so, they will never pay. Politicians and corporations are unaccountable now; they bought each other out and hold all the power.

#209 MF on 07.15.15 at 9:37 pm

#200 real estate lover on 07.15.15 at 9:18 pm

Your food costs 50% higher!

Inflation eroding at your “gains”!

Longer way back when this thing goes up in flames!

Bring it on baby…………………….

MF

#210 saskatoon on 07.15.15 at 9:42 pm

#197 Godth

greed is a conspiracy?

keep drinkin’ the tap water, buddy.

#211 Joe2.0 on 07.15.15 at 9:42 pm

RE 153 Garth.
Do detect a note of sarcasm?
These fandangled bankers network with computers and technically highly advanced shiney stuff.
He said they are seeing heavy foriegn investment all over Canada, and the markets strong.
I don’t mean heavy as being fat, but as being very active.

#212 White Crock BC on 07.15.15 at 9:43 pm

# 178 The American

1st, I don’t believe for a second that you’re American

2nd. Take a good look at your own situation:

$18.3 Trillion in debt that will never, ever, ever stop climbing (over $61T counting future liabilities) and hey! those are real US dollars don’t forget!

A one half trillion dollar budget deficit.

Over 45 million Americans on food stamps.

Number one cause of personal bankruptcy in the US? Health care debt.

Highest incarceration rate in the world.

Over 300 million guns, just kinda… floating around unaccounted for.

A strong currency isn’t everything. I’ll take Canada, thanks.

#213 ANON on 07.15.15 at 9:48 pm

Worth repeating: rates will rise, except not by choice, but by fear, only when promises start being broken. And promises can be broken pretty darn fast, especially with trust eroding faster than headless-chicken Pols of the Union jumping around in planes from conference to summit to emergency meeting. No shortage of solution providers among those totally oblivious of the problem.

#214 Monday Night Election? on 07.15.15 at 9:50 pm

RE #189 Song Of Day

Shortly after the polls close on election night the Cons will be hearing this tune over and over all night long.

https://www.youtube.com/watch?v=CtGxusvUT3k

#215 gerinder on 07.15.15 at 9:51 pm

great news my house will be priceless now that harper

#216 bob dog on 07.15.15 at 9:54 pm

POF.com was acquired for $600 million yesterday. One shareholder cashes in. Employees get nothing. People wonder why we have no tech industry in Canada. Now we all get to give an american company SRED tax breaks.

Why oh why did I ever move back to Canada once I had escaped? it must have been a momentary lapse of reason.

#217 TRT on 07.15.15 at 9:57 pm

Immediately after BEFORE the Bank of Canada shocked once again with a rate cut the dollar (as predicted) plunged, tumbling more than a cent.

Someone knew in advance.. the Loonie dove BEFORE the announcement.. Where’s the investigation into THAT!!!

—————————

Some insiders probably made millions of dollars today. They probably had an initial trade of a certain number to signal the insiders. A bunch of people won the Lotto Max a few minutes before the announcement.

#218 MSM-Free Zone on 07.15.15 at 9:59 pm

#177 MSM-Free Zone on 07.15.15 at 7:24 pm

Now, does today make sense? — Garth
_________________________

“…..The trajectory for core inflation is little changed from April, since the additional downward pressures on inflation from a wider output gap are largely offset by an upward revision to the estimated impact from exchange rate pass-through….” – BoC

No, nothing from the BoC makes much sense to Canadians lately. You can’t make this stuff up!

Though, I think what you meant was, “given the imminent federal election call, anyone connecting the dots here today?”

Absolutely.

#219 PeterfromCalgary on 07.15.15 at 10:06 pm

It seems pretty obvious that Poloz is aiming to lower the Canadian dollar until exports recover.

An obvious solution to the problem of the GTA and Vancouver’s bubble is to gradually lower what CMHC will insure in $50000 increments until the high priced areas of greater Vancouver and greater Toronto cool off. The CMHC could also raise the minimum down payment if necessary. This would not hurt housing in the reasonably priced parts of Canada but might allow Poloz to lower rates to zero without expanding the GTA and Vancouver bubble. Maybe that will happen after the election.

Finally although a zero interest is the wrong policy for the GTA and Vancouver it is the perfect policy for Calgary which is dealing with the twin evils of low energy prices and the NDPocalypse.

#220 Hawk on 07.15.15 at 10:10 pm

Well…..on the upside, Mark will now not have to self-exile from the forum for a whole week :-)

#221 Smoking Man on 07.15.15 at 10:14 pm

Nostalgia.. Jun 26 USDCAD was at around 1.23

Do the math.. $$$$$$$$$$
As much as you pricks hate me, I rock!!!!!!
Dr Smoking Man
PhD Herdonomics.

…….

#43 Smoking Man on 06.26.15 at 9:17 pm
We all know the dick, can’t spell. Lonnie, , is going to get crushed, boc will cut, fed might spike. If they do.

It’s a worthy bet, 50k in a forex account. Buy USDCAD On margin, only 50 contracts..

Welcome to the millionaires club. Next year.

………..

#111 Smoking Man on 06.30.15 at 8:32 am
GDP -0.1% Boom!!!!

Buy a house, a condo, a shead.

BOC will cut…..Guaranteed. …..

#222 WhoLikesShortShorts on 07.15.15 at 10:20 pm

@bob dog

Sadly, I know plenty of US based tech companies taking advantage of our SRED credits.

#223 whitehorn on 07.15.15 at 10:29 pm

#170 Waterloo “Do you really think that housing prices in Canada are going to drop more than 4 or 5% when the vast majority of people here on this blog are talking about how they are Salivating, just waiting for houses to crash 10%, and they they will quickly buy up the spoils”

House prices can definitely correct significantly as evidenced by the USA and other countries. The recent interest rate cut to .5 percent vs. 4 percent in 2008 shows Canada has serious economic issues. The piling up of debt close to 200 billion since that time shows more problems as well. It may take a small trigger of events to get it in motion such as 1 or 2 percent increase in the unemployment rate. Lump that in with record house prices in Vancouver and Toronto, could correct like the price of oil did in 6 months. There were not many so called experts that seen the oil downturn, real estate is similar. Another scary thing, it shows up in our media hourly, justifying on why house prices should continue to climb.

#224 Nagraj on 07.15.15 at 10:29 pm

– thoroughly enjoyed VICTORIA TEA PARTY likening the fate of Canada’s middle class to downtown Stalingrad in 1943
– loved the guy noting “five months of flesh-eating blackflies”
– and GODTH’s HAHAHA was delightful (and rare) (and GT`s retort too sober – )
– SMOKING MAN was unknowingly channeling Berthold Brecht with his praise of Mack the Knife, to put it one way

Do suppose, just for a moment, that Canada in the next six months will NOT squeak by with minimal GDP growth and that – surprise – we get a housing CRASH too. That the US economy will not sail on as wished, and that the SPX – correction – will be alarmingly agressive. – but it is VERBOTEN to keep the worst case scenario on the table.

Dog and cat food is actually quite nutritious and tasty. I routinely mush it up and serve it as dip. `Wild duck and brown rice` and `Lamb and kelp`are especially popular.
(But `Kitten chow` I find needs a shot of Bourbon to get it across.)

#225 Balmuto on 07.15.15 at 10:35 pm

Look what we started:

http://www.bloomberg.com/news/articles/2015-07-15/loonie-to-kiwi-tumble-as-canada-rate-cut-heralds-stimulus-wave

#226 Estrella on 07.15.15 at 10:35 pm

Once i heard the news this morning about the rate cut, I eagerly anticipated today’s blog. Truly this was the epic nail to seal our fate.
Perhaps the only light in today’s news might be that lowering the bar today will make a future increase this fall less of a shock to our economy? almost like a reversal to normal.
Unfortunately what is Canada left with? Our precious natural resources like water and wood will become our hot commodities. Anyone have an etf in mind for this?

#227 Ruane on 07.15.15 at 10:39 pm

@162 WUL

WUL, I enjoy your comments. I don’t understand half of what these people are saying either…actually, it’s a lot less than half! I do enjoy reading it, though.

#228 Karma on 07.15.15 at 10:39 pm

#15 Westside Realtor on 07.15.15 at 12:26 pm
“That said, HAM purchases on the westside of Vancouver are soft, at best.

WSR”

Care to elaborate on why?

#229 Rural Rick on 07.15.15 at 10:39 pm

#12 Khristine van Lincoln
Hey, cut the guy some slack. If he is trolling so what. He is irrelevant as the rest of us.
If this is real. Show some compassion. Who among you did not screw up?

#230 Sheane Wallace on 07.15.15 at 10:41 pm

#218 PeterfromCalgary

The problem is: Lower loonie is not increasing even nominal GDP, on the contrary, we are producing less and less in depreciating crappy currency.

This is what the economy has become.

At some point the loonie will reach break point and will get the status of the Mexican Peso, which should not be a surprise considering that their manufacturing is much stronger than ours.

There is no way out of this mess, choices are pretty much in between severe depression and very high inflation, most likely inflationary depression or severe form of stagflation.

The young are doomed anyway. If I am in my 20-es or 30-es and educated I would be moving out of Canada immediately. US and even Europe are much better choice.

#231 Smoking Man on 07.15.15 at 10:42 pm

I posted this at 8:30 moments after the numbers where released.

2 cent spike right after the 10am announcement. Do you dogs realize how much money you could have made.

Who says gambling sucks… :) I added another 100 contracts at 8:31
……
From this morning.

#117 Smoking Man on 07.15.15 at 8:57 am
The Mfg sales MoM dismal, if it wasn’t for aerospace the overall number would be brutal.

110% certain of a cut…

Seems USDCAD agrees. Why wait till 10 it’s going to happen.

#232 MF on 07.15.15 at 10:42 pm

#192 Brian on 07.15.15 at 8:23 pm

Why didn’t you buy a house at that time then? You should have like everyone else your age. The good thing is that the stock market has been on an absolute tear since 2008. APPL has gone up like 1,200% since then. If you invested in it as an example, you would have made out like a bandit and be wealthier than your co gen Xer’s (i’m assuming your Gen X?) who shoveled money into mortgages.

MF

#233 B Riding Dirty on 07.15.15 at 10:43 pm

Well side lining for a family home alittle longer.

Was at The Fairmont Pacific Rim today ay the Willow Spa, insane place.

Perks of not having a fat mortgage!

Happy birthday Suede!! WHat a day!!

#234 Trumped at both ends on 07.15.15 at 10:43 pm

This is a real kick to the cojones for Canucks…now Donald Trump is gonna call for a fence at the northern border as well. Best call that Mexican dude el chapo, and purchase some tunneling technology from him….that is, if he accepts dollarettes!

#235 Doug in London on 07.15.15 at 10:47 pm

@ZPR CPD UGH, post #150:
It’s called a BUYING OPPORTUNITY!!!!!! It’s also proof that you don’t have to be in Australia or New Zealand to experience BOXING WEEK SALES in summer! Bring it on baby, bring it on! YEEEEHA!

#236 MF on 07.15.15 at 10:52 pm

#234 Doug in London on 07.15.15 at 10:47 pm

I hope so. I’ve owned CPD since April but its just been hammered for years.

What would cause this to change if the BoC keeps lowering rates? I don’t think rates are rising anytime soon.

MF

#237 Smoking Man on 07.15.15 at 11:05 pm

#223 Nagraj on 07.15.15 at 10:29 pm

Coninsedently Mack the knife released in my birth year

#238 not 1st on 07.15.15 at 11:06 pm

Some insiders probably made millions of dollars today.
—–

You didn’t need to be an insider to know the loonie was going to get hammered. Analysts have been saying oil’s going lower for months but nobody wanted to believe it and the G&M had a page long spread in May saying the rallying loonie wouldn’t last and it didn’t.

#239 cramar on 07.15.15 at 11:06 pm

#162 Washed Up Lawyer on 07.15.15 at 6:32 pm

I completely get Smoking Man. He uses short words and short sentences.

——————–

Yeah! But he spelts bad, and his gramma is atrosius!

#240 NotAGreaterFool on 07.15.15 at 11:10 pm

Example of blow- back: Harper government = Duffy. Recession (“economic down-turn”). Imploding house market.

It’s becoming clear Oliver will need to mutter the word “recession”. He may very well need to so the same for “housing bubble”

POP!

#241 NotAGreaterFool on 07.15.15 at 11:11 pm

Garth – Are you no longer in the camp of a “long low thaw”? Have you prescribed to the “hard-landing “camp now?

#242 Christopher Lackey on 07.15.15 at 11:18 pm

@158 balmuto. You hit the nail on the head. Remember the dark days of the tsx in the 2008-2011 Era? Potash at $250, teck at $60, Barrick at $44, Kinross at $18, sherrit at $15, suncor at $75, blackberry at $160, bombardier at $10.

Hanging by a thread indeed. Talk about shareholder value destruction

#243 housing industry on 07.15.15 at 11:28 pm

Garth, a good comparison of the two countries would be to examine the weight of the housing industry in both countries and the weight of non-resource related industries in their entire economies.

We would probably see, that in Canada the housing industry is the holy cow of employment and the financial industry, except financial advisers, a most household money goes into RE, instead of investment portfolios.

No wonder all type of governments would feel like cutting their throat if they wanted to put a break on it.

The unhealthy and non-balanced, not diversified economic sectors that make up the Canadian economy is the fundamental cause in making the housing and RE industry both economically and politically more influential than in other countries.

There is no doubt that the US economy is much more robust, partially because it is way better diversified than in Canada.

This whole crises really rooted there – the rest of it that you describe just comes from there.

#244 BS on 07.15.15 at 11:39 pm

It’s called a BUYING OPPORTUNITY!!!!!!

The problem with prefs is very little upside with lots of downside risk. Just look at the return over the past year. A 4.5% yield does not go very far when you are down 20% YOY with really no hope of making that 20% back. You need 5 years of dividends to break even. If you hold for 6 or 7 years to collect the yield you might equal a bank account type return. With prefs you have the upside of a GIC with the risk of an equity.

#245 BillyBob on 07.15.15 at 11:39 pm

Dear Mr. Poloz,

THANK YOU!

Signed,

A Canadian expat paid in USD.

#246 Doug in London on 07.15.15 at 11:54 pm

@MF, post 235:
The key to winning this game is patience. Interest rates have to go up sooner or later, meanwhile this ETF is probably being oversold in panic. Remember what happened with REITs 2 years ago? What to do in the time being? I’ll just park my ass in the comfy cozy chair, relax, put my feet up, and let the dividends roll in!

#247 Nosty, etc. on 07.15.15 at 11:58 pm

Screw the financial stuff. That’s beyond my capacity and besides, this far more interesting — Remember The Borg? Not Bjorn Borg (tennis), but Star Trek: TNG’s Borg. Just in time for Jade Helm, an unknown cube box appears in the sky.

SMan, TNation — Is this what Wynne has in store for men? If so, I don’t blame you for getting out. Perhaps this is one of the reasons.

BTW, this is an 8th grade test from 1912. They seem to be smarter than the PC dipshits in education today.

#248 Whatever on 07.16.15 at 12:06 am

There will be no jobs in here, only massive debts and real estate bubbles. Canada as a nation will fail sooner or later.

#249 DisgustMadeMePost on 07.16.15 at 12:20 am

Sometimes I wonder if it makes you sad, Garth. Or maybe a little sick to your stomach.

I mean what the PC’s have become.

On the other hand, maybe Harper tried in vain to stop Poloz… nahhhh!

#250 what bubble? on 07.16.15 at 12:37 am

A housing correction is likely to happen this summer:
http://www.bnn.ca/News/2015/7/14/Authors-summer-2015-housing-correction-hunch-looking-more-likely.aspx

#251 juno on 07.16.15 at 12:56 am

I don’t know why you canucks are complain about. If you bought usd when the loonie was above even par with the green back you would be 26% up

In a couple of month even more when the us rates rises and we don’t.

our 20 dollar will soon only be able to buy you half a bag of groceries when it use to buy you 2 bags.

But 70% of Canadians are so call millionaires so what do you care.

#252 David on 07.16.15 at 12:56 am

Canada is getting as close to ZIRP as ever dreamed. At best, the purported benefits are illusory especially if it means keeping a long past its best due date housing bubble alive.

http://wolfstreet.com/2015/07/15/largest-alternative-subprime-mortgage-lender-in-canada-plunges-denies-systemic-problem-in-housing-market-home-capital-group-hcg/

#253 Jj on 07.16.15 at 12:58 am

Mr turner let me tell you some thing does not mater but how you tell publicl .more ten 90 prescent is idoid ,does not matter if they are even doctor

#254 Mike T. on 07.16.15 at 1:39 am

the greatest material losses should come during the actual solar transition itself – coordinated that way worldwide

that is how the elites figure to mess it up for you

also, if you still own an book with the word economics on it, throw it out, obsolete

#255 calgaryPhantom on 07.16.15 at 2:03 am

#125 WhoLikesShortShorts on 07.15.15 at 4:16 pm
@calgaryPhantom

Srsly? Have you been reading this blog?

——————————————————————-
I don’t come here to read the blog, i’m here for the comments section.
BTW, i would like to know why is it not a good thinking?
rates crazy low, housing sales and prices pressured since last year’s fall, lots of supply in the market, some desparate people looking to offload their properties. If one has enough dicersified assets and follows the rule of 90, why not take advantage of all these variables?

#256 4 AM Sunrise on 07.16.15 at 2:04 am

Poloz finds it “puzzling” that our economy didn’t rebound in Q2 the way they expected it to. Translation: “we don’t know what we’re doing.”

#257 Retired Boomer - WI on 07.16.15 at 2:06 am

Wow! Long day here away from the house.

The Poloz guy did it (as I thought the poly-tics won).

poly-tics: (noun many blood-sucking parasites).

While today’s statement sounded ok it is mostly crapola due to forces beyond the country’s control. That is the price of commodities: read oil. Fueling a DEBT orgy via cheap money has been on-going for quite a long time.

How you get a relatively thrifty people to saddle their asses with 163% of annual income in debt, why cheap money of course.

How do you get those same thrifty people to accelerate repayment of that debt? You could try killing jobs,. but that also kills the debtor. OOPS! You could try raising the price of money!
Anyway with a cheap Loonie in the wings would I want to invest in Canada now? Why, they might further devalue their money, who can trust the BOC now? Gee, are the monied job creators things the same??

What if Janet the Persuasive frozen Banker who can’t say “YES” to a rate increase were to grow a will, and really goose rates up that devastating 1/4 point? Will that materially change a thing? Hardly. Should the old broad go rigid and raise .5% that might get a bit of attention.

Will she get icy stiff in the fall, or postpone the eternally delayed increase? Stay Tuned…

IDEA: Calculate your families ‘costs’ now. Compare them with your families ‘costs’ on election day. Decide if the ruling party has ‘earned’ your support – or not.

Then pick the best liar in the pile, make your choice, flush twice, it is a long way to Ottawa…

#258 Said me on 07.16.15 at 2:18 am

Vote out Harper….he is corrupt as they come..time for change not just lower rates

#259 cynically on 07.16.15 at 2:26 am

The sheeple on this blog have had their field day doing what they do best – bitching and complaining about everyone and everything that is wrong in the country but as always nothing will change. It has become part of their character, so ingrained that it will never change. It’s just unfortunate that some of the better parts of the American character can’t seem to rub off. Things like the industriousness , competitiveness and curiosity that has built them into a world power while Canada lingers in a third category along with Spain, Belgium, Netherlands, Austria, Sweden, etc. These countries don’t have the size, population and resources that Canada has so they are at home in that category but not Canada. We should be up there with Germany, Italy, France and Britain but alas, it shall never be so let’s keep bitching and complaining but never try changing what is wrong.

#260 macroman on 07.16.15 at 2:32 am

Garth, real estate can be classed as a Giffin Good. The higher the price, the more demand.

Gold will be the next Giffin Good. The higher it goes, the more they want it…

4 G…Garth Giffin Good Gold

#261 Randy Randerson on 07.16.15 at 2:40 am

So glad that Harper and poodles are killing the loonie. I’m thankful that 60% of my portfolio is in VTI/VUN, and 30% in VXUS. My measily 10% Canadian equities in HXT isn’t going to suffer a big hit.

But since I’m working in BC, my salary is in CDN. It’ll be crazily expensive to buy US equities when comparing to not too long ago we were at par.

#262 Coho on 07.16.15 at 2:54 am

What makes humans commit inhuman acts to one another?

What makes anyone think they can survive and thrive when the establishment keeps changing the rules to benefit the few to the detriment of the many?

What makes people think that our leaders and bankers are insane, stupid or inept in pushing their agendas? Is it because they think those we entrust with our future mean well, but are unwise, or too stupid, ‘unlike the rest of us’? Or is it by design — not so much theirs but by the dictates of unseen masters passed down the chain of command directing them to ultimately betray their own?

What makes people think that those dictating world affairs are working for the common good, when in fact the financial, religious and political institutions (among others) they’ve set up have become so putrid and self serving, that they do not serve the people, but in fact divide them?

What makes people think that if the ‘Too big to Fails’ banks and hedge funds, which are parasites intent on devouring entire sovereign states, are an evil necessity when in fact they are just plain evil.

There is nothing worse than trading one’s freedom — one’s humanity — one’s spirituality — one’s hopes and dreams, for a false sense of security be it financial or otherwise. There is no security in tyranny. There is no security in indentured servitude.

Free societies containing an ignorant, one dimensional, fearful populace, will soon part ways. Let those who want to trade in their liberty and self determination, find a sandy island, appoint a ruler, and proceed to live on their knees.

#263 Coho on 07.16.15 at 4:39 am

Fake about sums up the world’s debt.

Except for Saudi Arabia and perhaps a handful of other countries, is not every country in debt to the tune equivalent of hundreds of billions if not trillions of dollars? The planet as a whole is many trillions in debt. Who or what pray tell is the money owed to? How can an entity or entities attain such a powerful position where entire nations, in fact, the entire planet is beholden to them because of insurmountable debt? How did they come by such power? Who or what gave it to them?

How is it that the sweat and toil of the world’s inhabitants amounts to a net deficit every year? How is it that the massive amount of time, effort and energy annually put forth by the world’s work force is not enough to cover the annual costs of running the planet?
Half the people are starving. The infrastructure even in first world nations is deteriorating. Average people in ‘wealthy nations’ spend more than they earn to maintain a middle class lifestyle.

Some might say it is it because of supply and demand or a so called ‘free market’. How does it end well when from the level of an individual up to an entire nation state needs to spend more than it takes in to survive?

It’s easy to blame the people and parrot the propaganda aimed to mislead and divide us while soulless ones atop the hierarchy look on and laugh at the ignorant and arrogant attacking one another. But, something (besides the visible superficial reasons) is behind the market prices from rice to houses causing them to be more than they’re worth. The game is rigged to indebt the entire world from kid to country.

We know that a quarter to a third of taxes taken in go towards servicing the interest on the debt. That’s a big chunk right off the top. Those in the shadows get their cut first. Ultimately those elite (no one knows who they really are) who actually own institutions such as the US Fed, BOC, IMF, ECB , investment banks (Goldman Sachs, JP Morgan, etc) use them as tools to push through an agenda to indebt people and nations alike to the point where they’ll become indentured servants into the distant future. A broke and broken, voiceless and powerless people is what tyrants and haters of freedom desire most. We’re well on our way there.

#264 earthboundmisfit on 07.16.15 at 6:26 am

Like a good little mandarin, Poloz did what Poloz was told to do. So much for the iron curtain, eh?

#265 PR on 07.16.15 at 6:30 am

Even if the FED jack up interest rate, it does not mean it will stay that way. They will surely cut back soon after. Low interest rate are here to stay. Only a deflationary depression will set everything…to the ground.

#266 backwardsevolution on 07.16.15 at 7:05 am

#172 Frank – “Obviously, what goes down, must come up.

You’re thinking of gravity. Interest rates and economics do not have to obey the laws of physics. Expecting rationality from a system not constrained by natural properties is silly.

Today could be the start of a 30 year low rate period or a 30 day one. There’s no reason it has to obey your expectations.”

Oh, Frank, everything follows the laws of physics, unless there is a force (central banks) acting to prop things up: 25 year amortizations going to 30 years, then to 40 years; no money down/cash back/no doc mortgages; artificially suppressing interest rates; sinking the loonie; manipulation of CPI, etc.

This sucker is going down and I smell desperation in the air everywhere: here, U.S., China, Europe, South America. The natural order will reassert itself. It always does.

#267 Steve French on 07.16.15 at 7:49 am

Just like clockwork, another $1,400 from my fortnightly paycheque, direct into my savings account.

Just call me Mr. Consistent.

Squirrelled away another acorn for the coming winter.

Soon I will be ready to invest that shiny nest egg.

#268 aizlynne on 07.16.15 at 8:05 am

Garth, you are a suckered to believe Janet Yellen. Is it her fancy haircut that has you believing her BS? They will not raise rates and BOC is running out of room. And do you think the Shiny Pony or The Beard would have done anything different than Pudgemaster? I guess your blog title is right about you in this regard anyway.

#269 Zorik on 07.16.15 at 8:18 am

This must have been before we just gave ourselves an ugly haircut this morning.
http://www.ctvnews.ca/canada/canada-ranked-as-most-admired-country-in-the-world-report-1.2470040

Give me break you believe this propaganda. I am moving out of country by end July.
I personally know many families moved out of Canada backhome due to high taxes, not stable job and expensive living, low education, crime and poor health system as in third world countries.

Yes Canada is more admired country for refuges from Middle East and Starving Africans and poor Asians countries and drug cartels from South America.
Open your eyes I can not believe how much Canadians brainwashed by system.
May be Canada was admired 25 years ago then I would believe it

#270 The American on 07.16.15 at 8:27 am

At #211: White Crock BC, I wish you and I could be face to face. You’d realize I don’t have a speck of give-a-shit in my eye as to what you think. I’m American. Born and reared.

As for the U.S. debt, you need to learn something about economics, as well as what it means to be *the* global reserve currency. The United States is the world’s largest economy, representing 22% of nominal global GDP and 17% of global GDP (Purchasing Power Parity). The United States’ GDP is estimated to be $17.71 trillion as of Q1 2015. The U.S. dollar is the currency most used in international transactions and is the world’s foremost reserve currency. With numbers like this, the U.S. can EASILY sustain a debt service of about $83 trillion (and that is as of today, not in consideration of the economy growing larger throughout the years). So yes the number you spout are big. But hey, so is the U.S. and our economy. Funny how you fail to see the full picture.

The actual 2014 U.S. budget deficit was $483 billion, $3 billion less than what the Congressional Budget Office estimated a week ago. For the record, $483 billion is $197 billion below the almost $680 billion deficit recorded in 2013. Clearly a trend of a shrinking budget deficit.

What little you understand about welfare and foodstamps numbers in the U.S. The number sounds astounding. Break it down, though. The elderly on fixed incomes, the disabled who may not be working, young adults attending school, and yes families out of work. WOW! A whopping 14.5% of the U.S. population. See, it isn’t so bad now when you break it down like that. In a nation with over 316,000,000 people, it’s surprising this number isn’t even higher. For whatever reason the term “foodstamps” (which isn’t even correct these days, so you are clearly dated) is thrown around as an ugly term. The correct terminology is SNAP, Supplemental Nutrition Assistance Program. Additionally, the numbers for Presidents Bush and President Obama are higher than they otherwise would have been because the government started using food stamps for disaster relief starting in 2005 for Hurricane Katrina.

As for personal bankruptcy due to healthcare indebtedness, yes it is very sad. It is indeed wrong for this ever to have happened. A couple things to remember: Personal bankruptcy due to medical reasons in the U.S. barely causes for a rejection of even the most aggressive of home loans, credit cards, or automobile loans (in case you don’t understand, and obviously you do not, there are varying levels of bankruptcy in the U.S. as reported on your credit). Additionally, with the implementation of Affordable Care Act, this will no longer be the case.

As for incarceration, gotta give you this one. It’s very sad and stupid how the system is being manipulated and used. Reform is underway at all four levels, including local, county, state, and national.

Canadians love to talk guns. Well, the truth is, as a nation, Canadian civilians own more guns per capita than American civilians. Only when you account for the addition of the U.S. military (of or relating to armed forces; especially of or relating to ground or sometimes ground and air forces as opposed to naval forces), does the number quickly become skewed as Americans owning more guns. So in reality this is more of a technicality.

I’ve not said you shouldn’t take Canada at all. You SHOULD take Canada. It is your homeland. I am saying be aware of the great implications recent years of very poor consumer habits will reap, especially when coupled with a declining Canadian economy. People should brace themselves and prepare because it is going to be worse than what the U.S. experienced. I wonder how long before Americans scratch their heads in wonder and ask why so many Canadians are on “foodstamps?” Oh yeah, Canada doesn’t offer this program. It essentially lump sums it into “social assistance” as to not be so transparent. Yeah, I know how that game is played, too.

#271 maxx on 07.16.15 at 8:27 am

Such an ugly performance by the current gang.
We deserve so much better.
The same one-trick attitude that pinned Canada’s economic future on fossil fuel is more than ever focused on re. Huge mistake- and the rest of the world knows it.
Our American neighbours have learned and understood well and have now moved on to far greener pastures. They have a much more diverse economy, a highly developed and wide-spread “can-do” attitude, which is cultural and perhaps most importantly, hope.
Canada has learned zero.
Many blog dogs excepted.

#272 maxx on 07.16.15 at 8:39 am

#9 Sathington Willoughby on 07.15.15 at 12:15 pm

“Looks like our vacationing dollars will be spent north of the 49 for the foreseeable future!”

Not ours….whatever the exchange rate, vacation value is still far better in the U.S. No way are we staying in a place where we are bombarded with the same old, same old whilst on precious holiday time.

#273 No Canada, No on 07.16.15 at 8:45 am

It’s strange you ranting about rate drop. Isn’t it exactly what markets love, thus great stuff for portfolio?

I mean yeah, the poor will dig themselves even further into the debt hole, but that’s the part of the game.

I was expecting something like: wow, great move bank of Canada! Portfolio going gangbusters this year, 7th in row, whoo-hoo.

PS It’s amazing how they got everybody, literally everybody with this Greece and China “crash, exit and end of the world” BS. Now everything is back to awsome.

#274 Holy Crap Wheres The Tylenol on 07.16.15 at 8:52 am

God I just love getting up to read the news every day here in status symbol land. Oh her plans have such perfect timing. Well at least by the time Wynne bankrupts us we can at least crawl back from it as we’ve got nothing to loose. I just hope when shes finished killing Ontario that she has to find a real job and contributes something meaningful to society.

Raise Gas Tax & Add Toll Roads, Expert Tell Ontario
Higher gas taxes and road tolls – the mere thought of both makes drivers cringe but both could be in the cards should the province listen to a road pricing expert out of Trent University.

A report by professor Harry Kitchen argues that Queen’s Park should hike the gas tax this year from 14.7 cents to 23 cents a liter. He also thinks Ontario should implement “High Occupancy Toll” Lanes.

The suggestions come as the province recently earmarked $130B for infrastructure projects. Kitchen says the gas tax hike alone could generate $14B over 7 years

Ontario Won’t Meet 15% Reduction Goal In Auto Insurance
Auto insurance premiums in Ontario rose slightly in the second quarter of this year, despite the Liberal government’s pledge to lower rates an average of 15% by next month.

The government announced in April that premiums were down an average of 7%since the summer of 2013, after decreasing 0.95% in the first quarter of this year but have increased 0.6% in the second.

#275 Holy Crap Wheres The Tylenol on 07.16.15 at 8:54 am

#238 cramar on 07.15.15 at 11:06 pm
#162 Washed Up Lawyer on 07.15.15 at 6:32 pm
I completely get Smoking Man. He uses short words and short sentences.
——————–
Yeah! But he spelts bad, and his gramma is atrosius!
____________________________________________
You forgot the rotting teeth syndrome or is it down to a single rotten tooth hanging on by a thread?

#276 Rational Optimist on 07.16.15 at 9:16 am

184 BS on 07.15.15 at 7:58 pm

“Whomever makes up the next government…”

Please don’t imitate Mark’s poor grammar. Using “whom” instead of “who” is a form of hypercorrection used by people who mistakenly think it might make them seem smarter: http://www.dailywritingtips.com/10-types-of-hypercorrection/

“Whom” can be done away with entirely: definitely don’t use it where it isn’t warranted. If you need to emulate someone’s grammar, choose Smoking Man: the style he’s cultivated makes him seem genuine and down to Earth.

#277 maxx on 07.16.15 at 9:31 am

#41 Realtor007 on 07.15.15 at 1:00 pm

“So many people with short memories on this blog, as if the CAD was always on par with the USD..sigh, not that long ago we were in the mid 60’s and it may get there again. We survived then and we’ll survive again.”

Wrong again.
Last time, we had nowhere near the epic levels of debt we do today. Neither did government. So we won’t “survive” anywhere near as well. Americans know that survival is so overrated.
Realtards will come to learn this. The world does not revolve around your collective, comic book pop philosophy.
Your collective stupidity resides in the never-ending insistence on telling the world the economic “way it is”. The only reason you and your ilk have evolved such humongous pie holes is that tptb allowed it to be.
Fool.

#278 Edward on 07.16.15 at 9:52 am

Prime Minister Stephen Harper demolishes value of the Canadian dollar to boost chance of reelection.

http://www.straight.com/news/491141/prime-minister-stephen-harper-demolishes-value-canadian-dollar-boost-chance-reelection

#279 grapho on 07.16.15 at 9:54 am

“Raise Gas Tax & Add Toll Roads, Expert Tell Ontario
Higher gas taxes and road tolls – the mere thought of both makes drivers cringe but both could be in the cards should the province listen to a road pricing expert out of Trent University.”

How the he$% does someone become a ‘road pricing expert’?!?!?! It’s not that widespread a practice, yet. Where are all the experts on how to save the middle class?

#280 Doug in London on 07.16.15 at 10:08 am

@BS, post #243:
You’ve completely missed the point about buying opportunities. In 2013 REITs were on sale and a lot of commenters here were bellyaching about how much they had dropped. How about now? CAR.UN was down to $20 and change and now it’s close to $29. The cheaper something gets, the more upward potential there is going forward. Why is it many people will line up outside for hours in the cold weather for Black Friday or Boxing Cay sales, but not show the same level of enthusiasm for when stocks or ETFs are on sale?

#281 Llewelyn on 07.16.15 at 10:09 am

#269 The American

You win!!! Please accept this prize for being the most selfish nation on earth. (cue finger)

Bragging about gobbling up 23% of the total GDP of the world just about says it all.

What your goal? 40%, 50% or the whole ball of wax.

I think most Canadians have a pretty good idea of who they are living next to and very few of us feel inferior in any way.

We may have screwed up our economy over the past few years but we never tried to bring the world down with us like our greedy neighbour.

Oh and by the way we proudly welcome citizens from any country in the world, even Mexico!!.

#282 grapho on 07.16.15 at 10:13 am

@ Rational Optimist # 275

Thanks for the link about hypercorrection. “Whom” cannot be done away with entirely. People need to go back to elementary school and learn the difference between subject and object in a sentence (doubtful they even still teach that in elementary school these days, crying shame). “Whom” is the object; “who” is the subject.

I love that link, though, because it points out all the stupid things people do when they are trying to sound smart with language. I love #5 in the list, me versus I. Copy and paste:

“Some people, when they learn that the object in such constructions as “You and me are the same height” and “Me and John are the candidates” should read “You and I are the same height” and “John and I are the candidates,” generalize that me is an undesirable pronoun, even when used in a sentence’s subject, but “There’s no difference in height between you and me” and “The candidates are John and me,” unlike the sentence versions ending in the word I, are perfectly correct.”

It is perfectly correct to write “There is no difference between you and me.” It would be wrong to write “There is no difference between you and I” because ‘I’ is the object in the sentence, not the subject, it needs to take the form ‘me’. A very common mistake amoung uneducated people is to put ‘me’ in the subject and say “Me and Jane went to the store”. Of course it should be “Jane and I went to the store”. Because that mistake is so common, some people think ‘me’ is always wrong and use ‘I’ even in the object. That is hypercorrection and it is laughable because someone is trying really hard to show they are smart but they are actually soundling like they need to go back to elementary school.

#283 Doug in London on 07.16.15 at 10:13 am

@Holy Crap Wheres The Tylenol, post #274:
Yes, he spelts bad, and his gramma is atrosius. Wow, I bet you and me are glad we gots gooder gramma than he’s gots!

#284 Kaganovich on 07.16.15 at 10:20 am

Coho

http://www.mpifg.de/pu/mpifg_dp/dp13-7.pdf

#285 johnsaccy123 on 07.16.15 at 10:22 am

Technical Analysis on CAD/USD:

SIGNIFICANT support for CAD at .7725…A daily closing below this should trigger a waterfall to 0.73 within a very short period of time (could be less than a month).

However, a rebound from here will not be uncommon rallying to 0.80 before any meaningful downward move.

This upward move is likely to pose a lot of headache to Mr. Poloz as he will attempt to talk down the CAD.

#286 Squirrel meat on 07.16.15 at 10:29 am

#269 The American on 07.16.15 at 8:27 am

The apocalypse begins… they’re coming for the guns.

http://news.nationalpost.com/news/some-nervous-texans-are-stockpiling-ammo-hiding-weapons-just-in-case-as-jade-helm-begins

#287 Kostas on 07.16.15 at 10:32 am

So what will people do? I just found out that in one year I lost ~28% of my savings because of the CAD going constantly down… Houses are still increasing and people are going to borrow more money for houses. Can I just ask, where’s the logic? We are living in a country that is encouraging debt and discouraging saving money!! Who would tell me, should I convert my money today into USD? Or should I leave them in CAD? Will the CAD lose at least 5% more ground towards USD so the conversion would become profitable, or this is just panic?….

#288 ARP on 07.16.15 at 10:42 am

The Canadian government is actively consulting on a move to increase the minimum down payment required to buy a house. Sources say that Ottawa has been studying proposals to increase the minimum down payment from five percent and said the government is particularly keen on adding restrictions for high-priced housing.

http://bit.ly/1fLp5eH

#289 JR on 07.16.15 at 10:55 am

http://m.investing.com/currencies/btc-cad-chart

#290 Sheane Wallace on 07.16.15 at 10:55 am

#287 Kostas

You can ask our glorious Leader.

http://www.straight.com/news/491141/prime-minister-stephen-harper-demolishes-value-canadian-dollar-boost-chance-reelection

If you ask me:
CAD is done, Canada can not afford higher rates to protect the dollar due to the record debt, they will devalue.

It is outright moral crime (and it might same day be a criminal offence) and financial terrorism action by the glorious Leader regime.

Keep in mind: Harper’s government is not equivalent to Canada even though they speak on Canada’s behalf.

It is a mindless regime of the stupid ruled by the ruthless, through fear.

#291 Josh in Calgary on 07.16.15 at 10:56 am

287 Kostas,
My first reaction is, if you had balanced your portfolio like Garth is constantly suggesting then you haven’t lost 28% of your savings. You would have had plently of US and international exposure that would have performed quite well in terms of Canadian $. Better yet you would have invested some of that in a US$ account.

Many people predict there is more weakness ahead for the Canadian dollar so it’s not too late, but don’t just cash in Canadian dollars for US dollars in a savings account. Invest in US markets in a US trading account. As always, keep it balanced and don’t over react. Nobody knows the future, so keep diversified and balanced and you’ll do well.

#292 Edward on 07.16.15 at 11:06 am

Kevin O’Leary, chairman of O’Leary Financial Group says it was a “mistake of the highest measure” for the Bank of Canada to cut its key interest rate to 0.5 per cent, as the country struggles to come to grips with a growing economic slide.

http://www.bnn.ca/News/2015/7/16/Bank-of-Canadas-interest-rate-cut-was-a-big-mistake-Kevin-OLeary.aspx

#293 Ronaldo on 07.16.15 at 11:13 am

#12 Khristine van Lincoln on 07.15.15 at 12:22 pm

What on earth were you thinking? You are a perfect example of why the real estate situation is where it is today. You need to sell that place and hope that a greater fool bites and frees you from this burden or seek the advice of a bankruptcy lawyer because this is where you are heading.

#294 Chris on 07.16.15 at 11:20 am

@Kostas,

Garth would say invest in an internationally diversified equity portfolio, and your savings are largely insulated from these currency moves. And he’s right. Most of us with cap-weighted portfolios (i.e., roughly 50% US stocks) have not lost purchasing power over the last year. Our salaries, on the other hand…

#295 Ben on 07.16.15 at 11:27 am

Since coming into power, Harper has used OUR MONEY to BUY us.

I have been paying attention and have seen atrocious decisions that were implemented SOLELY to deliver a feel good/pay later economy.

Such moves serve ONLY to BUY power. With OUR money!

And it works because so many people don’t pay attention or react without thinking.

They swallow it hook line and sinker.

They think “Harper must be doing a great job because I’ve got granite counter tops I could never afford before.”

They don’t even have the sense to realize that the BANK owns those counter tops.

Sad that it works, sad that people are so dumb.

Harpers new campaign slogan should really be:

“Thank you for not paying attention”

#296 4 AM Sunrise on 07.16.15 at 11:31 am

#276 Rational Optimist on 07.16.15 at 9:16 am

My favourite hypercorrection from my corporate job days was, “for more information, please see Bob or myself.” No, you’re the only one who can see “myself”.

#297 Retired Boomer - WI on 07.16.15 at 11:35 am

Noticed a price drop on gasoline this am. Was $2.73 now $2.59 a galloon.

Can’t explain that one, but it is welcome!

Hope this translates over to the meat counter. Those angus steaks are getting pricey! They’re more tan a litre of brandy – yikes!

#298 Realtor007 on 07.16.15 at 11:46 am

#41 Realtor007 on 07.15.15 at 1:00 pm

Wrong again.
Last time, we had nowhere near the epic levels of debt we do today. Neither did government. So we won’t “survive” anywhere near as well. Americans know that survival is so overrated.
Realtards will come to learn this. The world does not revolve around your collective, comic book pop philosophy.
Your collective stupidity resides in the never-ending insistence on telling the world the economic “way it is”. The only reason you and your ilk have evolved such humongous pie holes is that tptb allowed it to be.
Fool.

——————————-

Aren’t you an angry lil man, hope you don’t use that sharp tongue with your mommy or you’ll be evicted from that moldy basement soon enough.

Rates were in the 60’s before and we survived and we’ll survive again, deal with it, try to get out from under that dark cloud and your anger may subside a little.

#299 pinstripe on 07.16.15 at 11:51 am

The alberta PCs policy makers set policy to encourage corporations to follow the business model to escape all consequences. iow, the same practice that Greece applied to their big money holders.

When most Albertans said enough is ENOUGH, they took action immediately.

the alberta pC party is dead. the wra is basically telling them to go to hell.

Rachel has her job cut out for her. If she walkis her talk she will do a darn good job.

the global debt is at an all time high and here we have the HP team endorsing more debt. the talk of the D work is becoming louder and louder. the market is being manipulated like never before fo political reasons only.

http://www.edmontonjournal.com/Corporations+Alberta+unpaid+taxes/11217605/story.html

#300 Prairie Girl on 07.16.15 at 12:06 pm

#195 Cici on 07.15.15 at 8:36 pm
I’m voting Conservative this time round and I’m hoping many others will follow suit because I want them to pay for their crimes.
**********************************************
What an ingenious approach! I think I may adopt it come election time.

#301 saskatoon on 07.16.15 at 12:08 pm

#295 Ben

you do realize that EVERY major political party does this, right?

#302 Leo Trollstoy on 07.16.15 at 12:09 pm

Oh and by the way we proudly welcome citizens from any country in the world, even Mexico!!

Unless they’re Chinese.

http://vancouverisland.ctvnews.ca/mobile/go-away-chinese-ads-defaced-with-racist-messages-in-nanaimo-1.2424140

#303 Dominoes Lining Up on 07.16.15 at 12:14 pm

Wow. A real eye-opener right now on CBC Radio 1, Ontario Today:

The first guest just said that Seniors are having an average of $69,000 in debt and represent the biggest user increase in payday loans as well as tax debts!

Have a listen – a broad discussion of how badly off retiring boomers are, happening live now from 12-1.

http://www.cbc.ca/ontariotoday/

Just one sample of how badly off so many current home “owners” are, and what will push them to join a rush to sell in the months and years ahead.

Talk about a major domino tipping over…….

#304 Sheane Wallace on 07.16.15 at 12:35 pm

http://www.bnn.ca/News/2015/7/16/Bank-of-Canadas-interest-rate-cut-was-a-big-mistake-Kevin-OLeary.aspx

I will go with O’Leary over Poloz and the glories Leader or the financial minister. O’Leary is entrepreneur and actually made some money managing his own companies an investment funds. He risks his own money.

While the other are bureaucrats who never did anything useful in their life, they simply spend other people’s money.

Considering such morons in power and the degree of danger they represent maybe is time to start restricting the ability of the federal government to control our lives and money.

For our kid’s sake (we are already f..cked).

The guys should be at least investigated for their actions and if found guilty pay for it.

#305 Nuff Said on 07.16.15 at 12:35 pm

Ben Rabidoux in the G&M:
“The current level of housing construction in Canada is absolutely unprecedented relative to underlying demographic trends. Some of this phenomenon could be due to demand for new houses from foreign investors. Unfortunately regulators and policy makers can’t seem to figure out how to accurately measure this potential source of demand.”

#306 Holy Crap Wheres The Tylenol on 07.16.15 at 12:46 pm

#270 The American on 07.16.15 at 8:27 am

At #211: White Crock BC, I wish you and I could be face to face. You’d realize I don’t have a speck of give-a-shit in my eye as to what you think. I’m American. Born and reared……………………………………………..

___________________________________________
Yes, yes I know America is great, powerful, inventive and such, but does the world love ya!!!!! Apparently not!
Just stiring the pot.

http://www.msn.com/en-us/travel/video/which-country-has-the-best-reputation/vi-AAd1H4T

#307 Holy Crap Wheres The Tylenol on 07.16.15 at 12:53 pm

#297 Retired Boomer – WI on 07.16.15 at 11:35 am

Noticed a price drop on gasoline this am. Was $2.73 now $2.59 a galloon.
Can’t explain that one, but it is welcome!
Hope this translates over to the meat counter. Those angus steaks are getting pricey! They’re more tan a litre of brandy – yikes!
___________________________________________
You can thank Mr Obama for that cheaper gas, perhaps even cheaper since cozying up to Iran. Isn’t it interesting that after 6 plus years of negotiations with Canada, Obama said it would be dangerous to let Canada build a pipeline(XL), but after 2 years of negotiations, it is safe for Iran to build a nuclear program(Mushroom Cloud). Creating jobs and positive change in North America is dangerous, but giving nuclear weapons to Apocalyptic Mullahs is safe. No wonder Justin Trudeau loves this guy.
Ive got to start drinking heavily, Smoking Man where are you, Ive got a lot of catching up to do.

#308 Mike S on 07.16.15 at 12:54 pm

Toronto condo market seems like a disaster waiting to happen. From the beginning of the year (along with the previous rate cut) lots of new supply came to the market. It sits there waiting to be rented out, but not many takers

I guess it makes sense, since renting is throwing the money away …

Anyway slowly the “investors” seem to realize they might be better off if they sell. So they list, along with tens of similar listings in the same building. Then it sits there for a few months. Some prices are delusional, while other “fairly” priced units are enough to fetch maybe 2.5% in the absolutely best case scenario

Recently some started to cut the asking price (not much just 2%-3% down vs previous asking)

I wonder what happens next?

I hear that condos is not a good investment anymore. Not what it used to be

#309 Uke on 07.16.15 at 1:02 pm

Abraham Lincoln: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time”. . . . . unless they are Canadian.

#310 Holy Crap Wheres The Tylenol on 07.16.15 at 1:08 pm

#283 Doug in London on 07.16.15 at 10:13 am

@Holy Crap Wheres The Tylenol, post #274:
Yes, he spelts bad, and his gramma is atrosius. Wow, I bet you and me are glad we gots gooder gramma than he’s gots!
____________________________________________
Sad thing is I can peruse his chaotic ramblings, get a small nucleonic kernel of it and comprehend what he was trying to convey.
God dam he must be good enough to function on a daily basis at a literate enough level to fool everyone. Were all totally whacked now that we can read his native tongue.

#311 Squirrel meat on 07.16.15 at 1:11 pm

#307 Holy Crap Wheres The Tylenol on 07.16.15 at 12:53 pm

#297 Retired Boomer – WI on 07.16.15 at 11:35 am

Noticed a price drop on gasoline this am. Was $2.73 now $2.59 a galloon.
Can’t explain that one, but it is welcome!
Hope this translates over to the meat counter. Those angus steaks are getting pricey! They’re more tan a litre of brandy – yikes!
___________________________________________
You can thank Mr Obama for that cheaper gas, perhaps even cheaper since cozying up to Iran. Isn’t it interesting that after 6 plus years of negotiations with Canada, Obama said it would be dangerous to let Canada build a pipeline(XL), but after 2 years of negotiations, it is safe for Iran to build a nuclear program(Mushroom Cloud). Creating jobs and positive change in North America is dangerous, but giving nuclear weapons to Apocalyptic Mullahs is safe. No wonder Justin Trudeau loves this guy.
Ive got to start drinking heavily, Smoking Man where are you, Ive got a lot of catching up to do.

————————————————–
That was at Mark Steyn site.

#312 Holy Crap Wheres The Tylenol on 07.16.15 at 1:12 pm

#304 Sheane Wallace on 07.16.15 at 12:35 pm
http://www.bnn.ca/News/2015/7/16/Bank-of-Canadas-interest-rate-cut-was-a-big-mistake-Kevin-OLeary.aspx
I will go with O’Leary over Poloz and the glories Leader or the financial minister. O’Leary is entrepreneur and actually made some money managing his own companies an investment funds. He risks his own money.
While the other are bureaucrats who never did anything useful in their life, they simply spend other people’s money.
Considering such morons in power and the degree of danger they represent maybe is time to start restricting the ability of the federal government to control our lives and money.
For our kid’s sake (we are already f..cked).
The guys should be at least investigated for their actions and if found guilty pay for it.
____________________________________________
We don’t even have the balls to do anything about our our Provincial government re: Gas Plant Scandal, Ornge…etc. So nothing will be done at a federal level.

#313 Godth on 07.16.15 at 1:14 pm

#284 Kaganovich on 07.16.15 at 10:20 am
http://www.mpifg.de/pu/mpifg_dp/dp13-7.pdf

—————————————————————

That was a great read – thanks.

We’re all Chile now. Democracy? pffft.

#314 Cici on 07.16.15 at 1:15 pm

Average US rate on 30-year mortgage rises to 4.09 per cent; 15-year rate up to 3.25 per cent

https://ca.finance.yahoo.com/news/average-us-rate-30-mortgage-rises-4-09-161154376.html

#315 Sheane Wallace on 07.16.15 at 1:28 pm

#311 Holy Crap Wheres The Tylenol

forgot eHealth.

It seems they are thinking now about additional gas taxes and tolls.

Teacher’s pension fund has 155 billions in assets, teacher with 10 years experience makes 100k , has awesome public pension, full health insurance and 2 months summer break, this year they did not bother to write the school report cards in Toronto.

As for Wynne, SM already wrote it. No comments.

#316 Leo Trollstoy on 07.16.15 at 1:35 pm

Abraham Lincoln: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time”. . . . . unless they are Canadian.

I would also like to add,

“I know it’s in Texas, probably in Tennessee that says, ‘Fool me once, shame on … shame on you. Fool me… You can’t get fooled again!'” – George Bush

#317 JimH on 07.16.15 at 1:42 pm

#270 The American on 07.16.15 at 8:27 am
Great post and a good read! (Of course you’ll get a few idiotic and jingoistic knee-jerk responses from the peanut gallery).

I find it amusing that folks can spew out reams of mis-information about their southern neighbor while displaying a complete aversion to doing any research or even an attempt to absorb a fact or two.

I’m also curious as to why their is such a fascination with US government debt without any consideration of the assets of said government. Some time ago I posted a conservative estimate of those assets at close to $300 Trillion (US, of course). Is holding only debt without any assets a Canadian thing?

Anyway, thanks for your post!

#318 jess on 07.16.15 at 1:46 pm

bottom feeders?

http://www.therecord.com/news-story/5733766-landlord-has-history-of-challenging-buildings/

#319 Joseph Turnbull on 07.16.15 at 2:10 pm

My guess is another 25 basis points or 0.25% point rate cut from the Bank of Canada in the rest of 2015. It could be September or thereafter but it will happen.

I can see them pushing along this Canadian housing for another 1 to 2 years at the very least.

The condo market is going to be hit first and hardest when things go bad.

#320 Daisy Mae on 07.16.15 at 2:17 pm

#145 Elmer: “So I guess all the experts running the economy are wrong and only you are right? If they cut the rate they must have evaluated all the options and determined that it was the best course of action. I’m sure they did not make the decision lightly.”

**************

You mean like all the previous ‘wise’ decisions this government has made over the past few years, resulting in the present fiasco…those decisions?

#321 Mike S on 07.16.15 at 2:28 pm

“So what will people do? I just found out that in one year I lost ~28% of my savings because of the CAD going constantly down… Houses are still increasing and people are going to borrow more money for houses. Can I just ask, where’s the logic? We are living in a country that is encouraging debt and discouraging saving money!! Who would tell me, should I convert my money today into USD? Or should I leave them in CAD? Will the CAD lose at least 5% more ground towards USD so the conversion would become profitable, or this is just panic?”

Why not go with balanced portfolio tailored to your situation?

Besides it depends what is the savings are required for. If you wanted to save to study abroad (like US for instance) you should have saved in USD

#322 Mike S on 07.16.15 at 2:32 pm

“The Canadian government is actively consulting on a move to increase the minimum down payment required to buy a house. Sources say that Ottawa has been studying proposals to increase the minimum down payment from five percent and said the government is particularly keen on adding restrictions for high-priced housing.”

Doing such a change starting from Oct 1st (for instance) would be a smart political move, as it creates temporal economic activity (buy houses to beat the change) and decreases the risk in the long run (the hit would be after the election)

Instead they went for stupid political move, as in tank our $ and increase the risk.

Not sure why, I thought Harper was smarter

#323 Crazy in the Okanagan on 07.16.15 at 2:36 pm

I read this in the daily rag “Strong consumer demand in the Okanagan-Shuswap has pushed home sales to an eight-year high and reduced days to sell to 72 days on average compared with 94 last year at this time,” said OMREB! It claims that most are young families moving up and old timers downsizing. When do we run out of idiots??? I heard somewhere most people don’t think and sadly Canadians have been so dumbed down it’s obvious! Getting in at low rates but do they realize how much even a half percent rise will increase their payment, this is not sustainable especially in the valley where there isn’t many jobs unless you want to be a seasonal fruit picker! Yeah those houses on the mountain they are nice but when you get up there you aren’t guaranteed a view unless you call a peek a boo view something and you burn up your transmission going up and your brakes going down.

#324 Joseph Turnbull on 07.16.15 at 2:44 pm

To CiCi #314

They are still pretty low as 15 years ago, in 2000, beginning of the century, U.S 15, 30 year fixed rate mortgages were 7.25% to 7.65%.

They are still a bargain at 3.25%, 4.09%, however, if we test the new interest rate lows as mortgage rates follow benchmark U.S 10, 30 year treasury bonds, 2.75%, 3.4% 10, 30 year U.S. fixed rate mortgage rates could be soon in coming months.

#325 Nagraj on 07.16.15 at 2:54 pm

M A C K the K N I F E
opened Brecht’s “3 Penny Opera” in Berlin in 1928.
(Its PIRATE JENNY is the ultimate revenge ditty . . . )
(SMOKING MAN likely referenced the 1956 American recording – )

I couldn’t remember the exact year, 1928, so I googled – and read that Brecht was impressed by Eisenstein’s 1925 movie BATTLESHIP POTEMKIN. That made me think of Gorky’s 1902 play THE LOWER DEPTHS. And tangentially of Murnau’s movies . . .

So I checked up on all these things – and here it is 2:30PM already.

The invective on this blog against the Canadian political and social status quo, compared to the above, is mild. And philosophically innocent. But not inappropriate.
The host in taking on the genesis of the housing bubble is more sophisticated – but IMO prefers optimism to e.g. my pessimism.

Let’s not forget that the vast majority of Canadians don’t give a rat’s ass about the stock mkt.

#326 Setting the Record Straight on 07.16.15 at 3:04 pm

@118
This must have been before we just gave ourselves an ugly haircut this morning.

http://www.ctvnews.ca/canada/canada-ranked-as-most-admired-country-in-the-world-report-1.2470040

&&&&&&&
That and five —-seven(?) bucks will get me a coffee at Starbucks.

#327 MF on 07.16.15 at 3:06 pm

#308 Mike S on 07.16.15 at 12:54 pm

Yup I have noticed the same thing. My friends who all bought condos in the last five years in the GTA are all now moving on to houses because “condos are a bad investment”. Add to that the ton of condos being put on the market presently and it is a complete disaster in the waiting.

MF

#328 MF on 07.16.15 at 3:12 pm

#246 Doug in London on 07.15.15 at 11:54 pm

I don’t think interest rates are going anywhere for a long time. I hope you are right and I am wrong though!

I will wait a while with CPD, collect some more yield, hope it rises so I break even, and then sell it. Like BS mentioned above.. I think preferreds have too much risk on the downside and little in the way of upside (other than yield which doesn’t make up for the downside losses).

MF

#329 Setting the Record Straight on 07.16.15 at 3:15 pm

@145
I guess all the experts running the economy are wrong and only you are right? If they cut the rate they must have evaluated all the options and determined that it was the best course of action. I’m sure they did not make the decision lightly.

&&&&&&&
Yes the moronic Keynesian expert central bankers running economies are wrong.

#330 Keith in Calgary on 07.16.15 at 3:48 pm

Don’t expect anything to happen on the upside for Canada for a very, very, long time.

Now that the Iranians are shipping oil again expect prices to slip under $50 and stay there…….they will be fighting with the Saudi’s for market share as they desperately need foreign capital, so prices have only one direction to go.

I predict we’ll have a 68 cent CAD in 6 months. Of course, this could have been a windfall for me, as all my money is outside the country in other currencies that are faring much better than ours. But, I don’t want to buy anything in Canada……LOL !!

#331 Doug in London on 07.16.15 at 3:55 pm

@BS, post #244:
Further to my comment #280, have you looked up CPD and XPF lately? They’re going back up, from being oversold. Did you scoop up more CPD at $14.02 and XPF at $18.40 like I did? You ARE supposed to buy low, is that right? Forget about those damn overpriced houses and condos, there are much better deals to be had out there in the world.

#332 Sheane Wallace on 07.16.15 at 4:03 pm

#330 Keith in Calgary

0.7712 Down 0.0028(0.36%) 4:02 PM EDT

the sucker would be in the .76 pretty soon,

#333 Holy Crap Wheres The Tylenol on 07.16.15 at 4:05 pm

#311 Squirrel meat on 07.16.15 at 1:11 pm

#307 Holy Crap Wheres The Tylenol on 07.16.15 at 12:53 pm

Yes paraphrased him forgot Marks Link.

#334 maxx on 07.16.15 at 4:11 pm

#298 Realtor007 on 07.16.15 at 11:46 am

” Aren’t you an angry lil man, hope you don’t use that sharp tongue with your mommy or you’ll be evicted from that moldy basement soon enough.

Rates were in the 60’s before and we survived and we’ll survive again, deal with it, try to get out from under that dark cloud and your anger may subside a little.”

Wrong, wrong, wrong, they weren’t rates (duh) and wrong again.

There’s no anger, just a huge allergy to bs, like many on this blog. Deal with that and maybe you’ll gain a bit of maturity.

#335 cramar on 07.16.15 at 4:19 pm

#278 Edward on 07.16.15 at 9:52 am
Prime Minister Stephen Harper demolishes value of the Canadian dollar to boost chance of reelection.

http://www.straight.com/news/491141/prime-minister-stephen-harper-demolishes-value-canadian-dollar-boost-chance-reelection

—————

Thinking about this thesis that Harper orchestrated lower rates makes no sense to me. He just killed any re-election changes he might have had. He should have pushed for the opposite. The article’s premise is that Harper wants to brag about a balanced budget come election is illogical.

If I was advising Harper, I’d tell him that if he wants ANY chance to be re-elected, get the Loonie up asap! People don’t really care about balanced, deficit, or surplus budgets, if they are personally getting shafted in the pocketbook. With a low Loonie, ALL voters are feeling it in the wallet. Everything we consume in Canada is going up in price because we make nothing and import everything. We need a high Loonie to preserve out consumer society. By election time the full force of a lower Loonie will be really hitting home, and Harper will be blamed. Let those who are intoxicated with cheap credit suffer with rising rates! Let the housing in TO & Van fall! GET THE LOONIE UP! NOW!!

The smartest thing the opposition parties could do is keep hammering this single message home. You are hurting financially because prices are rising. Harper has destroyed the Cdn$.

#336 devore on 07.16.15 at 4:23 pm

#101 armpit

Are the Feds allowing this gas gorging to appease Alberta and the same time, continue their tax revenues?

What nonsense is this? Alberta sells crude. An oil company drilling in Alberta’s north doesn’t care what the price at the pump is. They get crude prices. High gas prices are appeasing no one except foreign owned gas distributors.

#337 LLewelyn on 07.16.15 at 4:27 pm

Note to The American #270 and his new fan #315 Jim H

Here is my kneejerk response just in case you are interested in the actual truth

“With numbers like this, the U.S. can EASILY sustain a debt service of about $83 trillion”

What does this even mean? Are you suggesting that the USA could service a debt even if it ballooned to $83 trillion. Good luck with that!

“For the record, $483 billion is $197 billion below the almost $680 billion deficit recorded in 2013. Clearly a trend of a shrinking budget deficit.”

Hate to tarnish your cheerleading badge but the projected deficit for the USA Federal government in 2015 is $583 billion. Oops!! Wrong direction me thinks!

“the government started using food stamps for disaster relief starting in 2005 for Hurricane Katrina.”

In 2006 the Supplemental Nutrition Assistance Program provided $33 billion in assistance to 26,500,000 Americans. . By 2013 this assistance had ballooned to $80 billion supporting 46,500,000 Americans. That must have been quite a hurricane!

“Additionally, with the implementation of Affordable Care Act, this will no longer be the case”.

I hate to rain on your parade but premiums for health care insurance in the good old USA are going nowhere but up, up, up. I hear you can read about it the looming premium crisis for health care in the USA in a newspaper.

“Canadian civilians own more guns per capita than American civilians.”

What planet are you living on? In 2014 there were 88.8 guns for every 100 American citizens. In Canada there were ‘only’ 30.8 guns per 100 citizens. Do you think Canadians cannot look stuff up?

I don’t mind you trying to polish the status of the USA but try to get at least one fact comparative fact right.

#338 rwm on 07.16.15 at 4:41 pm

Just enough time to cut the GST another 2% before election time. What the hell, 0% income tax for all! Just check the PC candidate box and uncle Steve will take care of us all.

#339 bill on 07.16.15 at 4:43 pm

Nagraj
https://www.youtube.com/watch?v=qjLBXb1kgMo

#340 Mike S on 07.16.15 at 5:08 pm

“Yup I have noticed the same thing. My friends who all bought condos in the last five years in the GTA are all now moving on to houses because “condos are a bad investment”. Add to that the ton of condos being put on the market presently and it is a complete disaster in the waiting.”

I guess they mostly move to the overpriced houses in the far suburbs with long commutes to work, because who can really afford Toronto, especially with no appreciation in the condo prices in the recent years?

Perhaps lagging 1-2 years in time but suburbs has no land constraints and is or is about to become overbuilt as well. On top of that the detached segment is very credit intensive (as in 500K mortgage is a piece of cake)

#341 The American on 07.16.15 at 5:34 pm

At #337: Re-read my post. Your reading comprehension is lacking.

#342 JB on 07.16.15 at 5:46 pm

LOL #12 Khristine van Lincoln on 07.15.15 at 12:22 pm

———————————————-
This person has succeeded in trolling. Look at the responses they got. Can you imagine if this were true?

#343 espressobob on 07.16.15 at 6:16 pm

#241
#331

Owning ZPR and CPD is an ‘averaging in’ process in a non-registered account. Over the long haul things tend to level out, no biggy. Down the road those of us who own prefs can enjoy a pleasant tax efficient income stream.

XPF on the other hand might be better served in a RRSP or TFSA in small weightings due to the foreign content which doesn’t apply to the Canadian dividend tax credit.

Strategy counts.