Not good

COP CAR modified

It won’t take a lot to push the dollar into the 76-cent range. Or to see oil below fifty bucks. Hell, at this rate, both could be reality by quitting time on Friday. The currency was worth almost 87 cents at the end of last year – about six months ago. Oil was a hundred bucks a barrel last summer.

Face it. This is not good. Oh, people with nicely-balanced and globally-diversified portfolios will do fine (bonds jumped yesterday. So did Canadian equities. And the US motors on, while Europe inflates), but that’s not most of us. Folks with too much net worth in real estate, or too much debt (or both), and who really, really need their jobs should be a little worried. Maybe more than a little.

Unfortunately, that’s most Canadians now that we have a home ownership rate of 70%, record mortgage debt and TFSAs which are 93% unfunded. These people were the ones who needed to listen carefully to Stephen Poloz this week when he said, “The economy is undergoing a significant and complex adjustment… Of particular note are the vulnerabilities associated with household debt and rising housing prices. And we must acknowledge that today’s action could exacerbate these vulnerabilities.”

So, will the interest rate reduction actually backfire and trigger a real estate correction?

Some people think so. They should.

Despite the Bank of Canada doing its desperado thing and nipping its rate down to just 0.5%, there’s no reason to expect fixed-rate mortgages to decline, given what US central banker Janet Yellen said this week (and previously). American rates will rise later in 2015, and bond yields will pace the increase. It’s already happening. US mortgage rates went up again yesterday. Canadian bond yields have aped those to the south 97% of the time, and will do so again. So fixed-rate, five-year mortgages here (which are funded in the bond market) should be higher by Thanksgiving.

So consider a likely scenario: First, summer house prices in YVR and 416 go nuclear as all the misguided hipsters read “RATES GOING DOWN” on Twitter, and rush out to bid on slanty semis with bugs and potlights. Second, mortgage rates don’t actually decline because the banks are already getting killed on spreads. Third, fixed-rate home loans start to rise in the autumn and into the winter, taking everyone by surprise – especially when they hear it’s just the beginning of a multi-year trend. Fourth, with Iran pumping more oil and commodity prices in the dumpster, oil subs below $50, doing serious damage to our exports and key energy industry. Fifth, this slide (plus the dumb BoC policy) gives us a limp loonie, which seriously increases consumer inflation, eroding family cash flow and making life suck just a little more.

Finally, there’s a federal election in October (or sooner, I hear), which throws in a lot of additional volatility, uncertainty and potentially regime change. That disappoints and alarms markets, prompting the Bank of Canada to raise rates next year to support the currency, regardless of the negative economic consequences.

Now, do you really want to have purchased a $900,000 beater house in Toronto with a mortgage of $850,000, knowing the economy (and maybe your job) is unstable, lettuce costs a fortune, real estate values are starting to decline, and your 2.4% mortgage may renew at 5%, with your house worth less?

And what’s this? A media report yesterday says the feds are quietly considering changes to CMHC rules that would require 10% down payments instead of today’s skinny 5%. One scenario, says the Financial Post, would be to have two tiers of down payments – one for all the reasonable people who live in Lethbridge or Moncton, and then a higher bar for the house-lusty real estate porn addicts in Toronto and Vancouver.

That’s unlikely to come to pass this year (for obvious political reasons), but it sure would be an effective way to throw cold water on selected markets – so don’t rule it out for 2016.

Well, I hope I’m wrong (not that I can even imagine what that feels like), but it seems reasonable anyone leaping into a real estate deal on the basis of the rate cut this week could eventually have their ass handed to them. Our two-city bubble was unsustainable enough even before this unwise decision. It will be more so after a few weeks or months of hyperventilated exuberance. Meanwhile the floor boards of the economy slowly rot away beneath the party.

Really smart people would be selling. If any remain.

170 comments ↓

#1 Retired Boomer - WI on 07.16.15 at 6:06 pm

Interesting Day at the Markets. Peculiar things going about…

Gonna be a REAL interesting election season this year, and next. I have this strange feeling I’ll be loading up on more good oil, real estate, and some industrial metals.

#2 Forzudo on 07.16.15 at 6:11 pm

The other proposal under consideration is a 20-year cap on mortgage amortizations: http://business.financialpost.com/personal-finance/mortgages-real-estate/ottawa-eyes-tougher-new-mortgage-measures-larger-down-payments-to-curb-hot-housing-market

#3 seventh on 07.16.15 at 6:11 pm

Why is this blog commenting so much on real estate and not so much on other investments option? I am fed up, YVR and Tor markets are crazy, every day the same thing, i got it, 95% of the people don;t and they don;t come to visit this site. If they would, they wouldn’t upgrade their house to a bigger square footage, you guys think is the CMHC and the first time buyers? People are saying that the capital is miss allocated, well, i don;t think so. Banks are getting the monthly mortgage payments and theoretically are investing in other parts of the economy. Truth is that the top 5 banks are not the best money spenders, the only loosers for now are the medium size investment company, struggling to compete with the big 5, growing the monopoly of BMO, TD, CIBC etc is the problem.
Stupid people are doing stupid investments (been there, done that), that’s how they learn.

#4 Erik on 07.16.15 at 6:13 pm

Things are about to get really interesting in Canadian politics. Regardless of who wins the next election, I believe we will see housing end its current growth cycle.

If PC secure a victory, they will have the confidence to let housing cool – knowing they will have 5 years to let it recover.

If PC’s lose, the winning party will have little motivation to continue our unsustainable housing-based economy and will let it cool.

#5 Mike S on 07.16.15 at 6:20 pm

“Finally, there’s a federal election in October (or sooner, I hear)”

Not calling early elections this year was a bad political move by Harper. (On top of attacking Trudeau and cutting the rate 2 times now)

Not sure that calling one now just 1-2 months earlier will do any good

Not long again ago I thought Harper was smart but self serving. Now I start to question the smart part

#6 Peter on 07.16.15 at 6:22 pm

“Oh, people with nicely-balanced and globally-diversified portfolios will do fine (bonds jumped yesterday. So did Canadian equities. And the US motors on, while Europe inflates), but that’s not most of us.”

Was really pleasantly surprised by my holdings today; especially by local holdings (CAD bonds, REITs, TSX…)

#7 neo on 07.16.15 at 6:27 pm

http://www.timesnews.net/article/9089540/thanks-obama-obama-blamed-for-kingsport-counterfeiting

This is so awesome and poignant on so many levels.

Downs was then placed in handcuffs. Downs then reportedly said, “I don’t give a ****, all these other bitches get to print money so I can too.”

#8 MD on 07.16.15 at 6:32 pm

Can u put some light on what’s happening to Calgary and fort Mcmurray housing as I thought it would be declining big time by this summer and till date it hasn’t inspite of job losses.

#9 Ray Koda on 07.16.15 at 6:34 pm

I got laid off in 2011 and my wife got laid off in 2012. We were always working hard both 65 years combined and what really helped us at 57, 58 was our RRSP’s and LIRA’s.

We used our $35,000 in GIC’s to bridge us for 18 months so we would not touch our investments.

Both combined in RRSP’s and LIRA’s are long term bonds 65% and 35%, 30 year fixed annuities. Good thing interest rates were 4.5% to 5% at that time.

The payouts no matter who survives us are until 2043 and are $2,400 a month. Our RRSP’s pumping out $8,000 every 6 months and take we have not touched any of it now worth $345,000. We topped up our TFSA’s, now worth $98,000 in REIT’s.

We have no debts and no mortgage. We sold the house for $600,000 net of all real estate commission, lawyer fees, H.S.T. etc. and bought 30 minutes out of the city for $300,000. We sold our house back in October-2013.

The $325,000 is now generating $1,200 a month in dividend, REIT, interest income. It gets reinvested as we don’t need it for now.

We are now pondering about taking our early C.P.P for us which would be about $1,150 a month or wait a few more years.

#10 Edmonton Fool on 07.16.15 at 6:38 pm

Company Spends $40k to produce commercial to sell $33mil home in Hollywood.

https://www.youtube.com/watch?v=T3nfq4RCK_Y

#11 C-losYVR on 07.16.15 at 6:40 pm

yeah, I wish I could express this in terms easily understandable to my wife and parents.

Nevermind the fact that trying to find a decent rental in Richmond BC for a small family & two pets is impossible.

#12 totalinvestor.com on 07.16.15 at 6:40 pm

If you think a 77 cent Loonie is low, can you imagine what it would be if the NDP win a majority?

http://i62.tinypic.com/riw8w0.png

#13 Mark on 07.16.15 at 6:41 pm

Turning the CMHC into a true insurer (or abolishing it completely) is something that is long, long overdue. After all, the entire premise of ‘insurance’ is that people pay a premium that is somehow related to the actuarially-derived risk of the insured event happening.

Obviously houses are far less risky in areas for which credit is not a significant factor and incomes greater, compared to areas which exist at extremely stretched multiples.

The net effect of all of this will be a reduction in CMHC-insured subprime credit to the most stretched regions. Which is definitely a good thing.

On that note, Canada desperately needs a new demand driver in its economy to take the place of the overheated and now deflating RE industry. Its anyone’s guess what it might be, but it does seem likely that an extended period of stimulus will be required to push such into prominence. Until then, rough times indeed.

Anyone watching Valeant (VRX) today? New all time high. Crazy how much just one stock has returned in the past few years of otherwise stagnation in the rest of the Canadian marketplace.

#14 duffy on 07.16.15 at 6:42 pm

Just buy a tent, its cheaper and you don’t have to spend wealth to decorate the dam thing. You’re dating will be somewhat limited to earthy girls which isn’t all that bad as most of them come from wealthy families.
When October arrives just put a smaller tent inside of the original, similiar to double pain windows, by Christmas her rich mom and dad will feel sorry for you and invite you into their home, what a great gift you will be.

#15 Godth on 07.16.15 at 6:43 pm

Who cares? Seriously. It’s a fait accompli, collapse, consolidate – yada, yada. It’s all part of a much larger game, bring on regime change – whoop-dee-doo. If they even bother trying to wrestle back democracy, sovereignty, or free markets (responsibility) they will be crushed. Neo-liberal Authoritarianism rules – congratulate yourself Garth, you won. Enjoy mopping up in your rigged markets. It’s all so boring – until the blackswans start landing, but then it’s just chaos.

#16 Herf on 07.16.15 at 6:46 pm

“Well, I hope I’m wrong (not that I can even imagine what that feels like), . . .”

Garth, we’re all simply overwhelmed with awe to stand in your magnificent presence!

#17 Lee Bow on 07.16.15 at 6:47 pm

I wonder how badly the CMHC would be hit.

#18 Herf on 07.16.15 at 6:49 pm

#3 seventh

“Why is this blog commenting so much on real estate and not so much on other investments option?”

Perhaps because it’s a blog that started devoted to real estate? Everything else has just been gravy.

By the way, you’re third (this time).

#19 mark on 07.16.15 at 6:54 pm

What does a month of wild volatility give you? A lot of worry, but not much change in value.

http://www.idiottax.net/2015/07/a-month-of-living-dangerously.html

#20 Mark on 07.16.15 at 6:54 pm

“Why is this blog commenting so much on real estate and not so much on other investments option?”

I think the host is mostly into advocating for balanced portfolios, which, include, inter alia, stocks, bonds, real estate, and various other asset classes. Most of the truly obscene cases of lack of diversity tend to be concentrated amongst those who own excess amounts of RE.


I am fed up, YVR and Tor markets are crazy, every day the same thing, i got it, 95% of the people don;t and they don;t come to visit this site. If they would, they wouldn’t upgrade their house to a bigger square footage, you guys think is the CMHC and the first time buyers?

Obviously its not the CMHC supporting the highest end of the market, which has seen the most activity in the past few years. But the CMHC supports activity at the lower end, which in turn, props up the high end. Ross Kay, a RE economist, has termed this the “sales chain”, in which, RE owners can only move up if they manage to sell their existing lower-end RE.

Hence, its not terribly important where the CMHC operates in the RE sector, only that they are propping it up with ~$900B of loan guarantees. Capital that otherwise might not find itself into the RE sector at such low rates if not for the government’s backing.


People are saying that the capital is miss allocated, well, i don;t think so. Banks are getting the monthly mortgage payments and theoretically are investing in other parts of the economy.

The banks aren’t though. That’s the problem. Mortgages on residential RE cost less than most business loans. Small business has almost no credit available unless RE is offered as security.


Stupid people are doing stupid investments (been there, done that), that’s how they learn.”

I personally believe the banks and the government will have a sort of Waterloo moment, as they are on an effective collision course, especially as house prices continue to fall and CMHC insurance claims accelerate coinciding with a deterioration of the government’s fiscal circumstances.

Such probably will lead to a lot of volatility in the Canadian banking sector, and serve to raise its long-term cost of capital. Of course, when the cost of capital is raised for one sector of the economy, it logically follows that other sectors may enjoy a lower cost of capital.

#21 Investorz on 07.16.15 at 6:56 pm

This is the last thing we needed to convince us to move out of Toronto. Interviewing with Disney.

Houses won’t be the only asset to rise.
Look at unhedged ETFs of the SP500.

And companies that make US dollars like Progressive Waste Management, CCL, Exco, MartinRea, Magna.

#22 Edmonton Fool on 07.16.15 at 6:57 pm

Canada ranked as ‘most admired’ country in the world: report

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

#23 Trendy Investor on 07.16.15 at 6:58 pm

Canada no longer has a productive exporting capacity.
The CAD is toast. Man the lifeboats, get your assets out of CAD. We are the next Mexico, and this peace deal with Iran will see oil down to $10/barrel by fall.

Cash is trash. Harper and the BoC just threw everyone with an RRSP or savings in CAD under the bus. They will chop rates again by late august. Expect a 1:2 dollar by fall.

Going to open a FOREX account. Might as well short the CAD because the downtrend is established pretty well for the next 2-4 months.

FML, that vacation to Punta Cana just got more pricey. But the economy is great?

#24 Mark on 07.16.15 at 7:02 pm

“I wonder how badly the CMHC would be hit.”

Given CMHC’s quality of their subprime loan guarantees, I figure that only 5X leverage is prudent for the organization. So if you figure $900B of assets, they would need $180B of capital to back such, and are thus $160B deficient.

$160B is perfectly manageable within the (federal) government’s debt load. But it will invoke a huge amount of political theatre, that’s for sure. Home borrowers, of course, will be the long-term losers as the cost of borrowed capital will, against the housing sector, rise significantly in real terms. Probably against a broader deflationary backdrop.

#25 West Coast on 07.16.15 at 7:03 pm

I know quite a few people in YVR who are putting their properties up for sale. Who can blame them…bank rates have never been lower (check out bank rate chart) and demand is crazy. http://www.theglobeandmail.com/report-on-business/top-business-stories/chewing-and-swallowing-insider-trading-tips-wont-save-you-from-the-sec/article25500887/
For many boomers, their incomes haven’t quite kept up with their lifestyles. I know many people born between ’46 and ’52 who are thinking of cashing in and renting. After a life time of home ownership with all it’s accompanying joys and sorrows, they are starting to contemplate a less demanding housing situation. Why not? In YVR a 1200+ sq. ft. view apartment can be rented for $3000 or less/mth. The same is selling for $1,000,000+. Sell the property, invest the money, rent and enjoy life!

#26 Drill Baby Drill on 07.16.15 at 7:04 pm

Dear Pathetic Blog: It is distressing that the only weapon the gov’nt has is tweaking interest rates. Inflation will hammer us here in Canada. Industries need to invest in productivity enhancements while the loonie is low so that we can be far more competitive when resource prices pick-up in a few years. Importing the technologies now is more expensive however we need the tax breaks to do this.
Will the bond market finally say enough and force rates upwards for us regardless of lapdog Poloz ?

#27 MSM-Free Zone on 07.16.15 at 7:10 pm

“….One scenario, says the Financial Post, would be to have two tiers of down payments – one for all the reasonable people who live in Lethbridge or Moncton, and then a higher bar for the house-lusty real estate porn addicts in Toronto and Vancouver…..”
_________________________

A higher down payment required for Toronto than the rest of the country?

The egghead with the baby sheep name will go positively postal on that one. Not that anyone cares:

http://financialuproar.com/2014/04/07/bad-financial-advice-brad-lamb/

#28 Setting the Record Straight on 07.16.15 at 7:10 pm

Electing new politicians over and over again and expecting different results…….

#29 BS on 07.16.15 at 7:10 pm

If PC’s lose, the winning party will have little motivation to continue our unsustainable housing-based economy and will let it cool.

A housing bust under anyones watch is political suicide. Most of Canada’s economy is based on housing. Unemployment will skyrocket after a bust. It will be ugly.

Who ever wins the next election will try to kick the can down the road another 4 years. I think there is zero chance of the inevitable being pushed out 4 years but they will sure try.

#30 Here there on 07.16.15 at 7:11 pm

Mr. Turner, your exasperation is more than understandable.
But, but, you didn’t got the last memo. Conservatives are like Jesus.
So, apparently, everything is kosher. Therefore, we, on the steerage section, keep living “la vida loca.”

#31 Washed Up Lawyer on 07.16.15 at 7:14 pm

Sadly, most of the K9 watchdogs in the comment section of this sorry assed blog have completely missed the most depressing effect of the decline of the Loonie. Canadian NHL teams have to purchase USD to pay the likes of Dion Phaneuf. The Leafs have to purchase USD to subsidize the Penguins (Kessel).

The result is that Stanley’s Mug will not cross the 49th before the Las Vegas Smoking Men hoist the cup.

Find a bookie that will take that bet.

#32 I stand Corrected on 07.16.15 at 7:15 pm

Okay Garth, now I know you troll Reddit to get those great photos!

#33 bubble or not in 416 and 604? on 07.16.15 at 7:16 pm

A few years ago, you said “no bubble” – only mild correction and years of stagnant price and/or declines. And by no bubble, I think you had said correction was up to 25% or so… certainly no 30% or more drop.

But housing has gone up since then… and yesterday’s post seem to hint that you may be changing your tune?

Care to make a new prediction? When and how much is the correction? Today’s post you seem to think it could happen before rates rise… maybe as early as election time.

#34 John of C on 07.16.15 at 7:20 pm

#5 Mike S
Harper will call the election earlier and leave October 19th as the fixed election date therefore this time he break the rules he made and do to the fact the con’s have lots of money a long campaign will kill the other 2 part’s financially. The dictator only carries about destroying people and has to go he’s already done enough damage.
The guys a psychopath. He not in it for Canada

#35 Ray koda on 07.16.15 at 7:31 pm

Just a correction and some important information I forgot to mention, our RRSP’s, $345,000 which is 35% and our LIRA’s, $640,000 in 30 year fixed annuities is 65%.

Also, our monthly combined LIRA’s in 30 year fixed annuities was $2,400 a month but we opted for a 4% annual increase for myself and my wife’s lifetime but will stop after that.

It is currently $2,700 a month being paid to us for both are LIRA, 30 year fixed annuities.

#36 ed on 07.16.15 at 7:33 pm

Macbeth, revised (“The cdn housing bubble”):

Oliver: “Speak. Demand. We’ll answer. ”

Poloz: “Cool it with a baboon’s blood,
Then the charm is firm and good. ”

CMHC: O well done! I commend your pains;
And every one shall share i’ the gains;

Macbeth (home owner): “What need I fear?” …That will never be.
Who can impress the forest, bid the tree
Unfix his earth-bound root?

…………………..

GT: “By the pricking of my thumbs,
Something wicked this way comes. ”

………………….

Closing scene, Macbeth confronts Macduff (reason):

“Accursed be that tongue that tells me so,
For it hath cow’d my better part of man!
And be these juggling fiends no more believed,

….I will not yield, [You know how this ends for him].

#37 Nosty, etc. on 07.16.15 at 7:33 pm

#15 Godth on 07.16.15 at 6:43 pm — “It’s all so boring – until the blackswans start landing, but then it’s just chaos.”

Just wondering — do blackswans and chaos include sovereignty, or is sovereignty a separate side dish?!?
*
Not good. “. . . and who really, really need their jobs should be a little worried. Maybe more than a little.”

The owner of this — Japan’s first robot-staffed hotel — wanted to ‘lower’ wages, vacations and benefits (robots get none).

With the US Army downsizing, the workforce (or lack thereof) is certainly changing quite radically in the next decade. Newspapers are almost dinosaured, while TV doesn’t have the allure it once did. Some sheeples are beginning to question “the authority (m$m)”, as they are not entirely accurate.

Such as — SMan — Further to MH17, plus Pic of 2 planes Commentary from wrh.com: “MH17 in the ‘wrong place?’ What was Captain Vladislav Voloshin supposed to be shooting at that looks like a passenger jet painted white with blue and red trim?!?

“As it happens, Russian President Vladimir Putin was flying through the same area on that very day, returning home from a six day visit to Cuba and South America. Putin’s Presidential jet is based on the Ilyushin 96. The IL-96 is a passenger jet, and is painted with a similar color scheme to the Malaysian 777. At a distance, they could easily have been confused for one another!

“So Kiev wanted to murder Putin, to throw the Russian government into turmoil while Kiev reconquered the east (and possibly Crimea), but botched the operation, shooting down MH17 instead, then tried to drop the blame on Russia.”

Yet the majority of sheeple are still dumb enough to believe the m$m, as they cannot and will not think for themselves.

#38 Internal Auditor on 07.16.15 at 7:34 pm

Enjoyed the post. Seeing as the spring house shopping season is over I am not sure how much more residential mortgage growth we’ll see with the current increase. If anything (I’m speculating) it just helps those that were already in the market to take the plunge. I’m not sure how many people are rushing to sell as a result of this. If the supply of condos/homes in high demand areas keeps up with population growth then perhaps all we see is nominal growth on levered assets. Even a 2% increase on $500k will churn out $10k which is a decent cash inflow (upon sale) and may discourage more people from selling. However, when rates rise (and I’ve been saying this for 6yrs now) we may see expectations come back into alignment. Let’s hope there are no more rate cuts, seeing our loonie drop over the past year has been a thumbs down to our economy and will eventually widen the gap between us and our neighbours to the south. Keep up the good work, great blog.

#39 Daisy Mae on 07.16.15 at 7:35 pm

“And what’s this? A media report yesterday says the feds are quietly considering changes to CMHC rules that would require 10% down payments instead of today’s skinny 5%.”

*****************

Feds backtracking — undoing another of their screw-ups?

#40 ben on 07.16.15 at 7:37 pm

> We have no debts and no mortgage. We sold the house for $600,000

Big clap for Ray there. Well done Ray.

Any advice for kids now who have to buy in at insane prices, have both parents working and have no chance of saving the equivalent of a $300K gift borne of young people being forced to take on more debt?

Here’s one suggestion: be born earlier.

#41 GG on 07.16.15 at 7:42 pm

Canada’s housing boom has no demographic legs to stand on

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-housing-boom-has-no-demographic-legs-to-stand-on/article25523999/

#42 Sheane Wallace on 07.16.15 at 7:46 pm

really smart people would be taking their assets and moving.

There will be line up of federal (CMHC), provincial (ontario new pension plan, toll roads, new gas taxes) municipal (property taxes) etc. governments looking to loot whatever wealth is left. Just move on and give them the finger.

#43 not 1st on 07.16.15 at 7:46 pm

Not just Vancouver or Toronto, but little ol Paris of the Prairie – Saskatoon

“Angie Britton and her husband Charles own a pair of homes on Saskatchewan Crescent East. They want to sell one and live in the other, but because they can’t decide which one they like better, they are letting the eventual buyer decide.

The houses have different list prices, $1.8 million and $1.55 million, to account for different square footage, Britton said.”

http://www.thestarphoenix.com/business/Saskatoon+homeowners+offer+unique+deal+million+dollar+homes/11218169/story.html

#44 Smoking Man on 07.16.15 at 7:47 pm

Due too my in box being creamed with questions here is your answer my 49 fans, wee grasshoppers.

Forex 101

Very dangerous, extremely dangerous. Only purely mental people will attempt this on a daily basis.

However there are times when you are holding pocket aces, and 2 hit the flop.

That’s how things were set up at the start of the month. Shit data Canada, Yellen, yelling higher. Iran deal, oil to get wacked. And Poloz Export Freak.

While you guys are busy writing hate mail. I was making loot.

This is how it works.

1 Contract.. USDCAD =100k in play. 10 contracts = 1 million. 100 contracts =10 million in play.

To put 1 contract in play. It cost 200 of real money.
10 contracts = 2000 of real money.
100 contracts = 20k of real money.

I don’t normally say go nuts with this less I’m very sure. That’s why I told you what to do. Back at the end of June.

Now if you buy USDCAD your betting that usd goes up or CAD goes down. 1/2 full or 1/2 empty.

So if you buy 10 contracts of USDCAD at 1.23 and you sell at 1.24 you have just made 10, 000 bucks using around 2470 of real money.

100 contracts = 100,000 using 24,700 of real money.

Now if you bought at 1.230 and sold at 1.299 = 600k

Now I’m thinking it’s going to 1.35

So for 25,800 of real money and you buy at 1.23 and sell at 1.35 = 1, 200,000

Welcome to the club…

Buy the same token, had BOC not cut, and you had 50k in your trading account you could have been wiped out in a fraction of a second.

No guts no glory..

#45 espressobob on 07.16.15 at 7:58 pm

#23 Trendy Investor

A little emotional? A global portfolio with some USD may prove profitable over the long term with-out the drama.

#46 Balmuto on 07.16.15 at 7:58 pm

“Despite the Bank of Canada doing its desperado thing and nipping its rate down to just 0.5%, there’s no reason to expect fixed-rate mortgages to decline, given what US central banker Janet Yellen said this week (and previously). ” – Garth

Well, I’d never heard of a 2.40% 5yr fixed rate mortgage until the BOC cut rates in January. Mortgage lenders got really aggressive following the rate cut, despite the fact that bond yields actually rose in the months following. So even if your prognosis on the bond market is correct, I’m not sure that will deter mortgage lenders who will take their cue from the BOC and drive fixed rates down even further (perhaps to 2.00%?). It may make no economic sense, but then in the current Canadian RE market, what does?

#47 Oh no on 07.16.15 at 7:59 pm

The Harper government is shameless. Given the economic condition, 0.25% cut doesn’t help the economy. Such a political move, just because there is an election coming up. So disgusting by sacrificing the entire country’s well-being just to stay in power.

I am a 28 yr old professional in Toronto. Lots of friends and colleagues around me taking huge amount of debt, purchasing houses FAR FAR FAR away from their workplace. All of them believe the house price will keep increasing.

Rule of Thumb: when everyone knows it’s a good idea, it is usually not a good idea anymore. couple of years ago, the “good idea” used to be condo flipping, look at what happens now. Now it’s the house flipping/investment, i am waiting to see how this will end.

#48 Klt on 07.16.15 at 8:01 pm

How about a two tier downpayment system similar to what was introduced in Ireland after their house price collapse?

First time buyers need 10% of the purchase price for the first 220 000 Euros and then 20% of the excess.

Second time buyers need 20%.

They also added in some provisions whereby you have to show that you’ve actually saved some of the downpayment yourself and not just had it given to you by your parents.

#49 Brian Ripley on 07.16.15 at 8:03 pm

“Really smart people would be selling. If any remain.” Garth

Indeed they have been and are; chart: http://www.chpc.biz/6-canadian-metros.html

There’s a lid for every pot.

#50 Ret on 07.16.15 at 8:07 pm

#9 Waiting to take CPP

Lots on-line about this. Most articles say to take early but check out your specific situation carefully. Also check out a couple of the life expectancy tables on-line. Sad stuff happens to good people often when they least expect it.

I took CPP early. No regrets after 3 yr. The money has been invested, not spent.

Flip it around. How would you feel if you left it on the table and sadly, don’t see your 65th birthday? Your contributions go back into the pot and the CPP gives it to someone else you don’t even know!

Your estate gets only $2,500 for a lifetime of contributions by you and your employer in your name.

#51 I'm Out on 07.16.15 at 8:07 pm

Garth you sound like The American more and more. I am open to another man’s opinion. But I will not read your blog anymore with all your pro US and anti Canadian hyperbole. If you love them so much then GTFO.

Jingoistic rah-rah doesn’t cut it when it comes to money. But I’m sure I’ve done as much for Canada in my lifetime as, say, you. — Garth

#52 David Lee on 07.16.15 at 8:12 pm

I’m starting to think that a Conservative federal minority government would be a very good thing:

– the Cons would be forced to clean up there own mess (think of all the entertainment value every night on “The National”),

– if the NDP and Libs could agree on various issues, then they could really influence and change what the Cons try to do, and best of all,

– our Federal Parliament would start looking more like something that is representative of a democracy.

Too bad I can’t vote strategically to help make this happen.

#53 Bank of Millennial on 07.16.15 at 8:22 pm

Check out the fine print on page 11 of the June 2015 FSR..

“In Alberta, for example, about 35 per cent of mortgage
loans held by federally regulated lenders are uninsured and non-recourse.”

So banks financing the housing market at the greatest risk of losing value… is handing out mortages that are only secured by the value of the home..in the event real estate corrects in price its going to be ugly.

#54 Mark on 07.16.15 at 8:22 pm

“Will the bond market finally say enough and force rates upwards for us regardless of lapdog Poloz ?”

It will on retail mortgages. Other types of credit, particularly business credit, not so much. Poloz will be forced into further policy action, downwards.

“How about a two tier downpayment system similar to what was introduced in Ireland after their house price collapse?”

Why not get the government out of the ‘business’ altogether? And let the private sector determine the requirements to get a mortgage?

“, I’m not sure that will deter mortgage lenders who will take their cue from the BOC and drive fixed rates down even further (perhaps to 2.00%?). It may make no economic sense, but then in the current Canadian RE market, what does?”

BoC policy action is likely to have diminishing returns/effectiveness. Which is why they’re likely to be forced into increasingly extreme examples of such.

“Rule of Thumb: when everyone knows it’s a good idea, it is usually not a good idea anymore. couple of years ago, the “good idea” used to be condo flipping, look at what happens now. Now it’s the house flipping/investment, i am waiting to see how this will end.”

If you can figure out what the next hot trend will be and put a modest amount of capital towards it, you’ll make yourself pretty rich. I think its Canadian stocks. But who knows. For a stock market that hasn’t moved upwards for the past 7 years since the 2008 peak, there’s a lot of built-up pressure to move it much higher. Balance sheets have been significantly cleaned up and bolstered. Projects completed, particularly in the oilsands. The golds are so out of favour that they’ve been left for dead. So much of the modern TSX is trading at its cyclical lows at the moment, its crazy.

#55 the Jaguar on 07.16.15 at 8:26 pm

I understand the time honoured practice of lowering the fed rate to stimulate investment, but is it just me that wonders how this will bring back a manufacturing industry or in this country that was transferred overseas years ago to places like China, India, and Mexico due to lower labour costs and more lax government oversight? The ship has sailed. Is it just me that thinks what has kept the economy going in this country is: commodities like oil & gas,forestry, minerals, fishing, agriculture and the service industries that support those industries? Bringing in lots of new immigrants helps move things along as well. They all need houses, cars, stuff. The housing and real estate industry employ people, but only as long as the housing lust can be sustained. And then what? What happens when the music stops?
How does cutting the fed rate a “tiny bit more’ stimulate manufacturing when we are entering the age of the “sharing economy”? The players that own Uber & AirBnB don’t have factories and they don’t have responsibility to employees. And they don’t manufacture anything. They just skim off their percentage. Like a new kind of legalized Mafia.
It feels like the old methods of stick handling the economic fortunes of the country are sadly out of touch at the Bank of Canada and at the federal government level.

#56 Freedom First on 07.16.15 at 8:26 pm

I was thinking. Once a person has even the plan of becoming a balanced, diversified, liquid, and long term minded investor, the feeling of letting go of the daily fluctuations of the world’s markets brings a freedom and peace of mind that cannot be described. Once the plan is in place, you are really there.

Garth’s Post today just reminded me that I have been at that place for a long time. It works over the long term, as nothing else does, as it is high risk, but that does not mean it is easy, as we are surrounded by financial noise pollution and a herd mentality of insanity.

Even the thought of worrying about either interest rates, living paycheque to paycheque, or the value of any one asset looks so repulsive to me I can’t even entertain the idea of putting myself in that unnecessary painful predicament.

But then again, I always put my own Freedom First. So please, don’t worry about me. I care enough about me for the both of us.

#57 TJ on 07.16.15 at 8:28 pm

Smoking Man #32: You’re missing a zero on your numbers. Maintenance margin on CAD futures is $1,670 USD which is over $2k CAD, that’s for 1 contract.

Why would any broker let retail clowns trade forex at a margin where a 20 pip move against them wipes out all their equity?

#58 Trojan House on 07.16.15 at 8:34 pm

Hmmm, I’m not sure but this blog post sure sounds doomer to me. Garth, I’m not sure if you realize this but you may be one of the biggest doomers around! Lol!

#59 Andrew Woburn on 07.16.15 at 8:48 pm

#40 ben on 07.16.15 at 7:37 pm
> We have no debts and no mortgage. We sold the house for $600,000

Big clap for Ray there. Well done Ray.

Any advice for kids now who have to buy in at insane prices, have both parents working and have no chance of saving the equivalent of a $300K gift borne of young people being forced to take on more debt?

Here’s one suggestion: be born earlier.

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

Second suggestion. Save your money and wait.

If you’ve never seen a real estate decline before, you’ll be amazed how fast it happens.

#60 Smoking Man on 07.16.15 at 8:49 pm

#37 Nosty, etc. on 07.16.15 at 7:33 pm
…….

Ya, anniversary tomorrow. MH17 MH370 still not found. And what became of that Malaysia 777 in that isreali hanger.
……..

I’m surprised the Zero guy hasn’t picked up on the Greek thing.

Guy goes to Eu 60% mandate to show them the middle finger, comes out with the worced posable deal ever, it’s voted on 260 to 30 for having there ass handed to em on a stick.. The German old guy, finance dude. Pissed of, don’t want to do the deal. Wants them to default.

My take, Greece got an amazing deal, it’s hushed up so the population of Germany, France, Italy and Spain can feel good.

What’s your take?

#61 TurnerNation on 07.16.15 at 8:58 pm

Economy is rotten as Smoking man’s teeth.

Broker said Tangerine is not budging their rates while they exit new mortgage orignations, favouring investments. Gee I see ‘er.

#62 BG on 07.16.15 at 9:02 pm

If this continue I might move to US or Europe and work there for a couple of years.

The only thing is my girlfriend cannot find a job easily and she happens have a decent one here in Montreal.

#63 Chaddywack on 07.16.15 at 9:07 pm

I will buy in Vancouver when it is reasonable. In the meantime the babe got a job in Calgary for a year…..it’s pretty easy to give up my rental in Vancouver, sign a year lease in Calgary, and sit back and watch the carnage unfold.

I think a lot of the uneducated masses are going to be VERY confused when fixed rate mortgages start rising even though rates have dropped!

#64 Smoking Man on 07.16.15 at 9:15 pm

#56 TJ on 07.16.15 at 8:28 pm
Smoking Man #32: You’re missing a zero on your numbers. Maintenance margin on CAD futures is $1,670 USD which is over $2k CAD, that’s for 1 contract.

Why would any broker let retail clowns trade forex at a margin where a 20 pip move against them wipes out all their equity?
…..

I was rounding damn it. Remember the audience. Plus it’s not Futures, it’s CFDs you silly rabbit.

http://Www.AVAtrade.Com

#65 Godth on 07.16.15 at 9:23 pm

#52 Bank of Millennial on 07.16.15 at 8:22 pm

Don’t worry, the banks won’t have to bear any responsibility for their risks. It will all be dumped onto the taxpayer one way or another. Good deal.

#66 Nosty, etc. on 07.16.15 at 9:28 pm

#59 Smoking Man on 07.16.15 at 8:49 pm — “What’s your take?”

Not sure. Lots of fluffy bafflegab with little substance. Guess it will play out as it should over the next few months.

#67 Diversified in Oakville on 07.16.15 at 9:30 pm

Love the BOC rate decrease!
I hope to have my detached Oakville home spruced up for some lunatic to buy Spring 2016, and then rent for a few years.
Thanks for the great posts Garth! Fully diversified world portfolio with only 20% in the Canadian market and 25% hedged in U.S. dollars. I sleep very very well these days.

#68 Nattie on 07.16.15 at 9:35 pm

Can we talk about how Comment #36 is the Best Thing Ever on the internet?

#69 MikeM on 07.16.15 at 9:46 pm

416 & 604 prices will continue to appreciate at least 5 –
10%+ for years to come. Here’s why:

1. Another rate cut – as early as September or a year or two from now…another wave or two of people entering the market to lock in those low rates.

2. Rate Hike – a few years from now there will be a rate hike. Another wave entering the market to lock in what they know they can afford. Rates going up means we are in recovery. Do the math…

3. Mandated 10% Down payment minimums – all the remaining 5 downers rush in before the deadline. Demand drives the prices up again. Shortly after, the 10% becomes the new ‘5%’. The greater fools that have been holding out for a decade and a half at this point, finally throw down $50K on a $500K one bedroom suburban condo – same square footage they could have had for $250K including parking downtown..in 2010..with as little as $12.5K down…

Think about that.

#70 Realtor007 on 07.16.15 at 9:47 pm

Man oh man the negative Nellies have been pouring into this site like rain water into a Toronto basement, when will people realize that attitude is everything and the rest is just noise, waiting or praying for this or that to play out because you got left out is so lame, get with it people, study up and look for the net opportunity rather then complain day in and day out and make nonsensical predictions that always happen to be wrong.

I hope maxxy is still in mommy’s basement or he’ll have to couch surf at Garth’s and smoking man’s place

#71 Karma on 07.16.15 at 10:01 pm

#31 Washed Up Lawyer on 07.16.15 at 7:14 pm
“Sadly, most of the K9 watchdogs in the comment section of this sorry assed blog have completely missed the most depressing effect of the decline of the Loonie. Canadian NHL teams have to purchase USD to pay the likes of Dion Phaneuf. The Leafs have to purchase USD to subsidize the Penguins (Kessel).

The result is that Stanley’s Mug will not cross the 49th before the Las Vegas Smoking Men hoist the cup.

Find a bookie that will take that bet.”

Totally. I got a little sad this morning that Canada might lose another hockey again. At least there is some program to help Canadian teams now since the lock out. Or so I have been told.

Go Canucks!

#72 Balmuto on 07.16.15 at 10:02 pm

#53 Mark
“BoC policy action is likely to have diminishing returns/effectiveness. ”

The BOC is not trying to encourage mortgage lenders to lower their rates. Or business lenders for that matter. It’s simply trashing the loonie to boost exports. Its own Financial Conditions Index indicates very accommodative conditions prevail, 26% more accommodative than a year ago. Credit is loose, not tight. Export weakness is the real problem.

#73 My Wife Loves Garth on 07.16.15 at 10:03 pm

So glad I sold in spring. Better to leave the party early, than get caught when everyone is scrambling for the exit.

Thanks Garth

#74 AisA on 07.16.15 at 10:04 pm

“Meanwhile the floor boards of the economy slowly rot away beneath the party.”

By floor boards, do you mean veneer paper towels?

#75 Millmech on 07.16.15 at 10:06 pm

#40 Ben,
Why do you have to buy now?Every generation has it’s housing boom/bust cycle,be patient you will save lots.Family member bought a house in Edmonton at the peak of the last cycle,got transferred 6 months after purchase,had to get help from the family to pay back the bank the difference(back then two years wages)after the sale.Funny thing was that it took twenty five years for that house to come back up to what he originally paid for it.
You want to buy a house when everyone is telling you it’s the worst decision to make because they have all lost money on it.The easy money has been made and more and more people are going to be heading for the exits soon and that door is very narrow.Perception is starting to change and fear will kick in and people will start to list and reduce like crazy to cut their loses(is that spelled correctly).This will be epic!

#76 Tom from Mississauga on 07.16.15 at 10:09 pm

Portfolio is doing awesome. ZSP, ZUQ, ZUB, NWC all hit 52 week highs today, multi family REITs, ZDM and ZEQ rebounded, perpetual preferreds holding. Other divco’s moving up. 5.7% jump since June 30th. Maybe a winter vacation to the Caribe to keep the tan is in order…

#77 AisA on 07.16.15 at 10:09 pm

#68 MikeM

Have you completely lost your marbles?

The reason it matters that our dollar is in tatters is that the rubber band has already been pulled too far. If the fed hikes at all we will have to play catch up and that means rates here will have to rise faster than imagined or all the not greater fools will take to parliament with pitch forks and torches over the cost of not going hungry.

#78 espressobob on 07.16.15 at 10:15 pm

#57 Trojan House

That’s why you do what?

Do some homework house. Might do you some good?

#79 real estate lover on 07.16.15 at 10:15 pm

You people just don’t get it.
With every penny our loonie drops it becomes soooooo much cheaper for people from china to buy up the whole of canada.
Sorry to hear you’re still renting folks because the truth is, you always will.!!!!!!

#80 Yuus bin Haad on 07.16.15 at 10:24 pm

Mario. What a card. He left a message on my machine today (in his spot-on Crocodile Dundee): “That’s not a bank rate … THAT’S a bank rate.” HA!

#81 Reality-check on 07.16.15 at 10:31 pm

I think u guys are a little behind the curve …. The dollar is @ 1.29 NOT 76 cents as u r thinking ….. And the down Jones and s&p are headed up for one last hurrah. And then crash and burn read it and weep,boys

#82 Leo Trollstoy on 07.16.15 at 10:38 pm

#44 SM

You da boss.

Knowledge, balls and money.

#83 Leo Trollstoy on 07.16.15 at 10:42 pm

The BOC is not trying to encourage mortgage lenders to lower their rates. Or business lenders for that matter. It’s simply trashing the loonie to boost exports. Its own Financial Conditions Index indicates very accommodative conditions prevail, 26% more accommodative than a year ago. Credit is loose, not tight. Export weakness is the real problem.

I believe that this is spot on. Canada has been an impotent exporter for awhile now. Only time will tell how effective these cuts are.

#84 European on 07.16.15 at 10:43 pm

How would this possible volatility or the alarming markets, prompt an increase in interest rates. Wouldn’t it prompt the BoC to keep rates low?

“Finally, there’s a federal election in October (or sooner, I hear), which throws in a lot of additional volatility, uncertainty and potentially regime change. That disappoints and alarms markets, prompting the Bank of Canada to raise rates next year to support the currency, regardless of the negative economic consequences.

#85 Buy Cemetery Plot$ instead of a home on 07.16.15 at 10:45 pm

its crazy i dont understand peoples logic.
a cookie cutter home for a 2500sqft cost $90 +- $10sqft
house sells for 950k.
725k for 38′ lot x 95′ lot in woodbridge?

last i looked theres plenty of land in canada. if not i’m investing Cemetery Plots asap

#86 SWL1976 on 07.16.15 at 10:45 pm

#37 Nosty, etc.

Yet the majority of sheeple are still dumb enough to believe the m$m, as they cannot and will not think for themselves.

True, and the masses still believe that a handful of guys with box cutters committed the crime of the century and brought down 3 buildings in New York.

The big question now is… Who’s prepared for the next false flag coming to a power grid near you?

The ruling class want chaos and looks like chaos they will get. Jade Helm is much much more than training, and now officially 2 days in and 4 marines shot dead in Tennessee.

This powder keg is set to go off.

I truly hope the masses and the military can awaken to the deception and steer this ship in a different direction. For we have been, and are being played like a fiddle to a real bad tune.

Deception is a state of mind and the mind of the state.

When the government fears the people that’s liberty. When the people fear the government that’s tyranny. – Thomas Jefferson

#87 Spectacle on 07.16.15 at 10:47 pm

For those who want to see the bigger picture: & Nosty…of course.

To quote Garths reference to Poloz-aluzza from above.” “The economy is undergoing a significant and complex adjustment…”. Noooo kidding.

The takeaway is : agenda-21 is being implemented as a massive test/blueprint in China, to curry favour with the U.S. . It will be used in America, and has begun. Started first in Seattle actually.

Due to the Bond scare China now faces; as China owns massive foreign bonds in America, and they want to get Paid One Day. It is an older article, but the lesson is the same.

The Chinese Version of Agenda 21 and Why the US Should Care …
http://www.thecommonsenseshow.com/…/the-chinese-version-of-agenda-21-and-...

Regards

#88 Reality-check on 07.16.15 at 10:56 pm

I don’t know what u been smokin. ..man, I PLAY FX .. I play the dragon not sleepers like usd/cad. Yawnnnn I saw that move personally it was suicide. … But I caught a piece of it. 100 + pips in 45 secs. Booom goes ur acct if u were short lol

#89 bottomfeeders on 07.16.15 at 10:56 pm

Garth,

Now that the RE house of cards is starting to unwind, as an uber-strategist chessmaster, I assume that you will also be advising the great unwashed readers of this blog how to navigate their way back into the housing market when it hits rock bottom….

#90 Marco on 07.16.15 at 10:57 pm

Thanks Garth. Very informative one tonight.

All this propaganda on Detached Vancouver house inventory dwarfing demand is a load of crock. Inventory right now is higher then 2009, 2011 and 2014. Sales are higher, just a tad higher then in 2011. That just highlites there are more people listing their houses every day and more people gobbling them up (no brainer).
When buyers slowly dry up watch for quick soaring inventory.

Cheers.

#91 Waterloo Resident on 07.16.15 at 10:58 pm

Hey everybody; do you remember the 1970’s TV show called “HERE COME THE 70’s” ?

In that show they talked about how our future was so bright, how we would all be living in mile-high apartment buildings, how we would travel to work on hover-trains, and all other sorts of amazing things that never came true.

Here is some videos of the opening and closing scenes of that show, it just might bring some memories of better times back to you:

Here Come The 70s opening:
https://www.youtube.com/watch?v=37z6eAp3D4A

Here Come the 70s, closing (in French):
https://www.youtube.com/watch?v=4X83ZGjUjlk

When you look back at those TV shows that was promising such great things for us in the future, and we see how we are stuck with such a crappy present, WHERE DID WE GO WRONG?

#92 bottomfeeders on 07.16.15 at 11:11 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.
….”

My money is on white crock in a toe to toe dukefest. A wounded beaver will take down a bloviating eagle every time…..if all else fails the beaver will retreat inside its million $ dam which was built with 95% CMHC backed financing!

#93 Mark on 07.16.15 at 11:13 pm

“The BOC is not trying to encourage mortgage lenders to lower their rates. Or business lenders for that matter. It’s simply trashing the loonie to boost exports. Its own Financial Conditions Index indicates very accommodative conditions prevail, 26% more accommodative than a year ago. Credit is loose, not tight. Export weakness is the real problem.”

Considering that there was not a word in the BoC announcements concerning such, and considering that there are other policy tools the BoC can use (ie: as used by John Crow in the 1980s/early 1990s) — it is pretty hard to believe that they have any sort of target in mind for the CAD$.

If their policy actions move the CAD$ in the direction they want, then, yes, that might be a victory for the BoC. But no evidence exists to suggest that such is their stated goal. The goal, first and foremost, is to stimulate the economy by driving down the cost of credit, particularly short term credit. Ideally the credit would go towards job creation and investment, rather than personal consumption. But like a fire-hose, the BoC doesn’t have a lot of control over exactly where any newly created credit goes, or even if the market will expand its creation of credit in response to what is likely a set of deteriorating economic conditions characteristic of economic deflation.

As for credit being loose, that’s all relative. There is evidence that lenders have pulled back significantly in the residential loans. And business loans don’t seem to be loosening appreciably either. Credit-worthiness is a significant issue with the former, and even with businesses significantly exposed to the latter. The chief beneficiaries of ZIRP are likely to be large-cap corporations with good balance sheets and relatively economically insensitive businesses (or exporters, if the CAD$ remains so artificially low, although its anyone’s guess how long that can last as deflation deepens!). The TSX60 has thus outperformed the TSX Composite for much of the past year or two, and the small-caps have been beaten to smithereens in Canada.

#94 SI2K on 07.16.15 at 11:18 pm

#12: I also thought for a long time we were screwed for quality Toronto rental housing with two kids and three pets. It was true when the kids were little – no landlord would touch us despite two professional incomes and great credit, but after the kids turned ten and twelve we sold our beater and now we rent a nice apartment. Eventually being ‘a nice family’ is an asset to landlords, IME, just not when the kids are three. I’ll let you read into what ‘a nice family’ is according to these people, because you’d be right. It’s a big issue, I agree, discrimination in rental housing in tight markets. We bought because of it, but fortunately it was November, 2008 at the time and now we’re out. It’s fuelling the ownership fervour still, though, I’m sure of it. Toronto landlords are horrendous. Worst of any city I’ve lived in.

#95 cramar on 07.16.15 at 11:26 pm

“…lettuce costs a fortune….”

Not for me! At least not at the moment. I grow my own, so it is free, and currently it is at the peak of the crop. A perk of owning a house and not a condo I suppose.

Reminds me, some of the huge greenhouse farms in the area here sell to the U.S. Bet they are happy!

Humm! There are over 2,000 acres of veggie greenhouses in Essex county. Maybe I should consider the business opportunity. You should see the houses next to some of these greenhouses. Obviously a growing business (pun intended)!

#96 Mister Obvious on 07.16.15 at 11:27 pm

#84 SWL1976

True, and the masses still believe that a handful of guys with box cutters committed the crime of the century and brought down 3 buildings in New York.
————————————–

Not to mention that bogus moon landing. Now NASA is treating us to obviously faked pictures of Pluto. Yeah sure… Pluto Schmuto.

#97 Andrii on 07.16.15 at 11:28 pm

#37 Nosty, etc
it is not a blog to spread Russian propaganda , Garth please save us from Russian bots .

#98 TheAwakenedOne on 07.16.15 at 11:30 pm

“.. row row your boat gently down the stream
merrily merrily merrily merrily… life’s but a dream… ”
or a damn night mare in YVR !
This too, shall pass… don’t get sucked in by the herd.
Nothing is forever, everything is impermanent.

” Be fearful when everyone’s greedy
Be greedy when everyone’s fearful… ”
It would be very interesting to see how this bubble deflates itself to normal metrics and reality.

#99 Nagraj on 07.16.15 at 11:54 pm

Poloz decides to go home for lunch.
Mrs. Poloz has made sandwiches.
They’re lettuce sandwiches. (Between two leaves of Romaine lettuce is a filling of shredded iceberg lettuce.)

Poloz: “What’s this?”
Mrs. Poloz: “Lettuce sandwiches.”
Poloz: “Huh?”
Mrs. Poloz: “They’re just right for you.”
Poloz: “Why?!”
Mrs. Poloz: “BECAUSE YOU’RE A SILLY RABBIT!!! I CAN’T GO ANYPLACE WITHOUT PEOPLE LAUGHING AT ME BECAUSE OF YOUR DUMB BoC POLICY!”

She stomps off and, because the floor boards are rotting, crashes straight down into the basement.

POLOZ: “This is not good.”

Enter HARPER: “Hey, Desperado! How ya doin’?”
POLOZ: “My various vulnerabilities are exacerbated.”
HARPER: “Well, dang. What’s with the hole in the floor?”
POLOZ: “My wife’s down there.”
HARPER: “Cool. Islamist booby trap, eh?”

MRS. POLOZ, singing: “Rock of ages cleft for me, let me hide . . . ”

HARPER: “Could I take some o’ these broken boards home? Laureeny’s buildin’ another little bat cage.”
POLOZ: “Why not.”

#100 Nosty, etc. on 07.16.15 at 11:57 pm

One more thing to consider (old article): Greece’s oil and gas fields. Israel did the same last year (albeit more violently), when they flattened Gaza, took their natural gas deposits and signed a deal with Jordan.

No doubt they’ll go back later, take their oil and pretty much wipe Palestine out. That’s life, I guess.

#101 Spectacle on 07.17.15 at 12:14 am

Regarding:
“#67 Nattie on 07.16.15 at 9:35 pm
Can we talk about how Comment #36 is the Best Thing Ever on the internet?”

Mm, rule one of writing, consider your audience.
( eg: this blog)
More like : ” Blooop-doing, Gilligan! “

#102 Spectacle on 07.17.15 at 12:35 am

Regarding:

“#84 SWL1976 on 07.16.15 at 10:45 pm
#37 Nosty, etc.

Yet the majority of sheeple are still dumb………. as they cannot and will not think for themselves.

The big question now is… Who’s prepared for the next false flag coming to a power grid near you?

The ruling class want chaos…….

Deception is a state of mind and the mind of the state.”
————–
#84 sswl1976 : you write well!
Can you sharpen the pencil a little bit, provide some notes with the opinion. Great contribution to the blog if you’d add that.

Thanx,

#103 TJ on 07.17.15 at 12:49 am

Smoking Man: I stand mostly corrected. I see they give 400:1 margin on that metatrader product on FX. I’m surprised these guys are still in business after the CHF fiasco earlier this year.

You comfortable leaving your money with them?

#104 Seven on 07.17.15 at 1:01 am

I cannot make this bs, take it as a YVR fake story: he is a truck driver she is a nurse: they sell their south vancouver house for 1 million and right after buy a bigger land for 1.1 mil. Planning to build a new house, which will cost minimum 400k, their biggest dillema is where to live until completion.
Soon if i am not lazy i will compose a report regarding townhouses in a good area that i am following, don’t expect miracle numbers but be assure you will not see the victoria housing market crap
Bonus: Greece has spent a lot of it’s budget on military expenditures, guessing Tsiparis was facing an army coup if exiting Euro. Plus IMF aka USA wants a weaker Germany…

#105 Spectacle on 07.17.15 at 1:01 am

Regarding:
“#94 Andrii on 07.16.15 at 11:28 pm
#37 Nosty, etc
it is not a blog to spread Russian propaganda , Garth please save us from Russian bots .”
————–

Thank you for the input #94 Andrii.
I’m certain Nosty did not intend a slight to anyone. Consider that on this blog, Nosty exposes the strategy behind the world-wide govt games, scandal, economics, politics on this site. Rather than just ……..checkers.

#106 Mike T. on 07.17.15 at 1:05 am

people are so distracted today that it is easy to take advantage of the masses

it’s not an accident that facebook/twitter/iphones all have people looking in the wrong direction

people haven’t even noticed the sun changed from yellow to white, maybe you can’t see the sun where you live (?)

simple stuff is being missed because everyone wants to be a celebrity

#107 Tony on 07.17.15 at 1:07 am

Re: #50 Ret on 07.16.15 at 8:07 pm

You don’t seem to get it about CPP. It’s not about seeing 65 it’s more about will there be anything left to pay anyone in the future.

#108 drydock on 07.17.15 at 2:25 am

#49 Brian Ripley on 07.16.15 at 8:03 pm

“Really smart people would be selling. If any remain.” Garth

Indeed they have been and are; chart: http://www.chpc.biz/6-canadian-metros.html

There’s a lid for every pot.

………………………………………………………….

And pot for evey lid.

#109 Leo Trollstoy on 07.17.15 at 3:26 am

In addition to the Canadian dollar, another casualty of a Fed rate hike will be gold.

Gold has only begun its downward trend. Whenever the Fed begins rising will be the beginning of a long deep decline for gold.

http://www.cnbc.com/2015/07/16/gold-is-on-the-cusp-of-a-major-breakdown-technician.html

#110 PeterfromCalgary on 07.17.15 at 3:34 am

Lower the amount CMHC will insure to 500K. Any mortgages over that amount would need a 20% down payment.

#111 eddy on 07.17.15 at 4:01 am

double plus Not good-

1000’s of smart meter fires: whistleblower & court evidence (2015)

https://www.youtube.com/watch?v=Am2_-qHW-T0

#112 Londoner on 07.17.15 at 5:23 am

“American rates will rise later in 2015…”

BoE sounds like it’s getting on board with this plan now. Carney making some noises about raising rates towards the end of the year. May happen this year or next but both CBs are saying they will moderate pace depending on data. What data? Trade balance, full-time employment, wage inflation and consumer spending. Let’s see how it plays out over the next few months.

#113 Trojan House on 07.17.15 at 7:19 am

#77 espressobob on 07.16.15 at 10:15 pm

???????

#114 Sheane Wallace on 07.17.15 at 9:03 am

the sucker is in the .76… already

CAD/USD 0.7699 Down 0.0017(0.22%)

#115 Holy Crap Wheres The Tylenol on 07.17.15 at 9:05 am

Had to sit there yesterday and digest why the rate drop occurred. The so called expert economists were split on whether the BOC would make this move despite the obvious weakness in both the domestic and global economies. Of course Smoking Man new about it and was calling it (Insider Information from the BOC)? This rate cut was unnecessary. The rate-sensitive parts of the economy, such as housing, weren’t really in need of a rate cut. Just drive by any development here in the GTA and observe the house horny minions gravitating towards the massive black holes in the empty fields. Cash was already flowing freely. This cut was targeted toward exports, which are targeted towards our currency. Canada’s export problems aren’t a monetary problem; they’re a fiscal problem that needs to be solved by the federal government. We used to give out all sorts of incentives to the auto sector to entice manufacturers to come to Canada. So when was the last major time we had a significant investment here? I really don’t recall, and a lower currency will only go so far. Nobody will invest in Alberta right now with the present NDP government and their non-committal stance on taxing policy’s towards corporations. What boggles the mind is that this lowering of the currency will potentially cause inflation to remain higher than it needs to be. Import prices will rise. So, your cheap Canadian dollar will only purchase one avocado instead of two. Our fuel costs will increase and you can kiss your vacations to anywhere warm goodbye. A lower Canadian dollar is bad, how the hell did we ever get to the point where it was drilled into our heads by these lefty unionist that it was good. So after much pondering last night and a glass of very expensive scotch I decided were all pooched. Thank God I have diversification on my personal wealth. I should have done more diversification with my corporate funding. Bye the way there was a second and a third glass before retiring for the evening.

#116 Karma on 07.17.15 at 9:06 am

As they say in France…

“Etats Unis! Etats Unis!”

http://www.bloomberg.com/news/articles/2015-07-17/consumer-prices-in-u-s-increase-in-june-paced-by-higher-rents

#117 Tuck Tape Tailight on 07.17.15 at 9:21 am

And yet another piece of the puzzle.
Demographics…..

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-housing-boom-has-no-demographic-legs-to-stand-on/article25523999/

#118 LOL Canada on 07.17.15 at 9:28 am

Government is considering more regulations on housing. We have plenty of regulations, but need more.
The population has proved to the government that given enough rope, we will hang ourselves.
Canadians are willing to borrow as much as the bank is willing to lend them and more. Canadians use what the bank gives them to buy houses. The only reason to buy a house now is for investment, but the tides are starting to turn for most Canadians on that thought.

We need to curb this reckless borrowing or the country will suffer for years to come. There is no good solution to this problem.

#119 fancy_pants on 07.17.15 at 9:34 am

My tune hasn’t changed. If they tightened mortgages to 10/20 instead of loosening to 0/40 when they introduced ’emergency rates’ back in ’09; this problem would not be so prominent now. Idiocracy is the one constant.

#120 Greg on 07.17.15 at 9:36 am

Hi Garth,
re: “Really smart people would be selling. If any remain.”
I’m not sure about the ‘really smart’ part, but some of us are listening. Our realtor’s photographer is coming over on Monday. We are purging, painting, moving stuff to a storage unit to stage our place! Then rent, and it might end up being in the place that just sold right next to us.

#121 fancy_pants on 07.17.15 at 9:37 am

#108 Londoner on 07.17.15 at 5:23 am

MC was wagging his finger and barking the same for years here in Canada before he crossed the pond. He was tuned out long before he checked out.

#122 PR on 07.17.15 at 9:38 am

10 % Cash down , will cool the real estate madness. Nothing less.

#123 jess on 07.17.15 at 9:39 am

systemically significant nonbanks

complex, high-risk financial activities — including funding agreement-backed securities, commercial paper issuance and securities lending activities

http://www.wsj.com/public/resources/documents/metvfsoc.pdf

http://www.americanbanker.com/bankthink/large-nonbanks-deserve-fsoc-scrutiny-1075244-1.html

#124 Mr Happy on 07.17.15 at 9:46 am

“#35 Ray koda on 07.16.15 at 7:31 pm
Just a correction and some important information I forgot to mention…”

Who gives a $h#t?????

#125 Mortgage man on 07.17.15 at 9:52 am

its all about carrying costs
I had two teachers come into my office now
historically teachers were always been considered middle class
They both 80k each and take home pay was about 2k each every two weeks so over 8k a month
Both had no debts or car payments
They were in their early 30s and had a down payment of 100k
They were approved for a 715k mortgage or 2900 a month

#126 Marco on 07.17.15 at 9:52 am

Inflation rising:

http://business.financialpost.com/news/economy/canada-inflation-rate-edges-up-as-higher-food-costs-offset-cheaper-fuel

Any which way they try to measure or tweak the CPI index you can’t hide consumer inflation with a lower dollar.

Cheers.

#127 Retired Boomer - WI on 07.17.15 at 10:27 am

It is amazing…. Greece is offered another Bailout!

Apparently it comes with more external directives to cut pensions, increase taxes yadda, yadda.

They tried this twice before, it did not work! When a country decides to give up its currency, and stake its fate to a union like the EU, the richest, strongest country does well the poorer countries do much less well. Greece, Italy, Spain, Portugal all probable losers here.

Can they bring their countries fortunes back to compete economically with the rest?

At least Canada, the U.S. can be managed by our elected reps -for better, AND worse- to steer a course for their peoples. What is the Greek’s alternative, but to take the “prescriptive advice” of physicians whose only end is to keep the EU. Will it work? My gut says no way.

Canada’s rate cut will it benefit Canada? Specifically, the Canadian people. My gut tells me no way.

I trust my gut.

#128 R. Santarossa on 07.17.15 at 10:35 am

Truly your BEST POST EVER GARTH. Add to that 51% of Canadians live paycheque to paycheque, historically high debt levels and a looming recession = job losses, we are in for a very rough ride indeed.

#129 Balmuto on 07.17.15 at 10:36 am

#90 Mark
“Considering that there was not a word in the BoC announcements concerning such, and considering that there are other policy tools the BoC can use (ie: as used by John Crow in the 1980s/early 1990s) — it is pretty hard to believe that they have any sort of target in mind for the CAD$.”

It’s not overt – it’s covert – that’s why. You need to read between the lines. “Try to get yourself a room somewhere in P.E.I. this summer…it’s going to be a good year”. He’s not predicting a surge in Canadian small business owners taking a vacation. He’s talking about a favourite vacation spot for Americans, that’s going to do a brisk business this summer because of a weaker CAD. And his “export weakness is puzzling” comment – why is it puzzling? Because he thought weakening the loonie would prop up exports more than it has. But he’ll keep trying.

#130 Ken Lovegrove on 07.17.15 at 10:38 am

The reality is that tough times with the economy and oil prices creates opportunity.

My company does oil and gas training all around the world.

The Majors have all been looking at their costs and seeking cheaper alternatives which has been great for us.

Reality is we need to have recessions. Gives us an opportunity to re evaluate and look at the way we do things. The alternative is to just become more bloated and inefficient.

Oil price is tough. We have been affected by it. But not the end of the world and with forward thinking opportunities are there.

#131 Sacramento Northern on 07.17.15 at 10:43 am

Great post, Garth. One of your best.

When you have the time, check out Young & Eligible in Toronto. The construction dust is unbelievable! A ten-minute walk in the area reveals at least eight – EIGHT! – condos announced, a-building or almost done. Madness.

A walk yesterday by the old World’s Biggest Bookstore site yesterday, just north of Dundas – a well-read guy like you knows the place – revealed a fenced-off area where the store building once stood, now razed completely. A sign said a 35 story condo was being proposed for the site. I guess it’s too valuable for parkland!

#132 pinstripe on 07.17.15 at 11:17 am

a touch why many Albertans decided that enough was ENOUGH and threw the alberta PCs out the door.

the early meeting this morning at the coffee shop was quite the show. athe aberta PCs are DEAD.

http://www.edmontonjournal.com/news/politics/investments+including+millions+loaned+Peter+Pocklington/11220780/story.html

#133 Mister Obvious on 07.17.15 at 11:21 am

#127 Sacramento Northern

I make similar observations here in Vancouver.

Now and then I have appointments that require me to leave my comfortable downtown perch and travel across East Vancouver, Burnaby and New Westminster.

I can report that construction in Greater Vancouver continues at a fever pitch. The Kingsway corridor is especially active. Combination commercial/residential buildings are still popping up everywhere.

Old post-WWII wooden buildings are disappearing at an astonishing rate and almost overnight being replaced by ‘yet-to-be-leased’ ground level retail space sitting over three levels of parking and underneath 50 units of ‘yet-to-be-sold’ boxy little one-bedroom condo units.

It boggles the mind. It’s the direct result of a decade of ultra cheap money and a great poverty of imagination putting it to use.

Is this the best we can do with such a bounty of nearly free capital? Rabid speculative construction largely concentrated around two urban centers?

Clearly, yes.

#134 pinstripe on 07.17.15 at 11:31 am

boom and bust is part of the business cycle. any political ingterference creates a mirage and cannot prevent the consequence of either the boom or bust. In the meantime the le;vel of corruption increases many fold forcing the rich to get richer. history will take its time but it will repeat itself.

fortunately the sheeple cannot be educated and will always make demands to lead themselves to destrucdtion, whereas those who understand how cycles work will be able to make money.

#135 Rational Optimist on 07.17.15 at 11:39 am

98 Spectacle on 07.17.15 at 12:14 am

Re: “Can we talk about how Comment #36 is the Best Thing Ever on the internet?”

‘Mm, rule one of writing, consider your audience.’

Agreed. Nagraj’s sitcom sketch of Stephens Harper and Poloz was much closer to the tone of this comment section, while still managing to elevate it somewhat. We are not ready for Shakespeare here.

#136 Sacramento Northern on 07.17.15 at 11:50 am

No. 129 Mister Obvious:

Agreed.

The ‘poverty of imagination’ angle is something that hadn’t occurred to me. But it is still a good point; Bad enough there are so many skyboxes in my area, worse still that they are, well, not exactly ugly, but not terribly attractive either. Kind of like Stalinist Moderne.

The point about the waste of almost-free capital is well-taken.

#137 SWL1976 on 07.17.15 at 11:57 am

#99 Spectacle

Can you sharpen the pencil a little bit, provide some notes with the opinion. Great contribution to the blog if you’d add that.

I don’t like to get into too many details here as this is a real estate and financial blog, not a conspiracy blog. Garth has been and is very gracious with letting us all share our points of view.

I have been a conspiracy nut for years and am constantly looking at the bigger picture beyond what we are being spoon fed. My research generally reveals quite a story line behind all of these big events that do not happen just by chance or coincidence.

So, in taking advice from someone in this comments section who so gracefully suggested I start my own blog. I did.

http://www.realitynext.ca

My intentions for my blog are to bridge the gap between the hard core conspiracy theorists and the people who can clearly see and feel that something isn’t right with the world around us, but just don’t know where to start. I know there are a lot of people who feel this way. The truth, as frightening as it is in some cases needs to be better understood.

By no means do I claim to have all the answers. I encourage critical thinking and questioning things we have been taught not to.

Things are happening fast and it is in all of our best interests to pay closer attention to what is happening in the world around us

#138 TRT on 07.17.15 at 12:34 pm

Breached 76 cent level.

#139 TRT on 07.17.15 at 12:39 pm

Any snowbirds here with fixed pensions? How far are your loonies going to go this year?

This is the first whammy of many more to come for our smug retirees.

#140 The American on 07.17.15 at 12:48 pm

At #110: Sheane Wallace, brace yourself. You ain’t seen nothin’ yet…

#141 TurnerNation on 07.17.15 at 1:00 pm

Gold always falling…a hedge against nothing

Guild hall debtors prison.

#142 Expensive on 07.17.15 at 1:15 pm

Now watch the price of everything rise because of the dollar that affects… Everyone. For idiots who think great interest rate is low I’ll go buy a bigger house well stupid you will pay more for taxes, more for heat, more for power, and more repairs where are you saving anything and when the interest rate increases by even a fraction can you sustain it? Thats if you have a job! Who would have thought an army of realturds could dumb down so many people and convince them that they better buy now or be priced out forever in one of the largest countries in the world! It’s pure and simple GREED!!!

#143 Spectacle on 07.17.15 at 1:16 pm

Regarding:

“#133 SWL1976 on 07.17.15 at 11:57 am
Re: #99 Spectacle”

Ahh, I thought I heard the sound of a treasured sack of Pearls of Wisdom in your writing.

I put your own blog on my home screen! Thank you!

Much respect for your effort, it’s what Nosty has been showing me ( & blog dogs…?) on Mr Turners blog.

You stated : ” My intentions for my blog are to bridge the gap between the hard core conspiracy theorists and the people who can…” you just did that!

And a big thanks to Garth for the blog, as always .

Sincerely,

#144 Expensive on 07.17.15 at 1:19 pm

next watch the postal workers go on strike and the teachers and any other union workers meanwhile watch small business go belly up because they are so tied down with CASL and other stupid laws they are scared to do business.

#145 M on 07.17.15 at 1:21 pm

Gartho baby…
U still don’t listen. You should try.
Babe Jane won’t jack up shit never mind interest rates.
Forgetabadit!!
Bonds will explode world wide but NOT because anyone tightens. Nobody tightens. They’re all printing baby.
Bonds will explode because of the bond market. And then watch out. It will be a joy to watch. Keep the cash ready for it’ll be half cents to the dollar for anything.
Canadian interest rates will explode for Kanuck is just a pimple on the camel’s ass.
The other name of Greece is Canada, Portugal, Spain and another 40 or so countries. Seat belt tight for the ride, enjoy the show and be ready to make like thieves shorting everything. Stealing from thieves , greedy and the fearful is tremendously satisfying.

#146 Sheane Wallace on 07.17.15 at 1:32 pm

#137 TurnerNation

Gold falling?
Not against CAD apparently

#147 Herb on 07.17.15 at 2:32 pm

#111 Holy Crap and Tylenol,

“… where it was drilled into our heads by these lefty unionist that it was good.”

Revelation for ya, buddy, “lefty unionists” don’t have traction in government. Corporations (and their major shareholders) do, and they’re at the other end of the political spectrum. That’s where your fiscal, economic, trade and tax policy hails from.

Another revelation for you, Tylenol is bad for your liver, especially in combination with scotch.

#148 TurnerNation on 07.17.15 at 2:43 pm

SWL1976 good personal blog on trends.

Life’s grand here at bottom level of control pyramid. Look up, it’s raining brown again.

#149 Godth on 07.17.15 at 2:55 pm

#133 SWL1976 on 07.17.15 at 11:57 am
A Big Little Idea Called Legibility
http://www.ribbonfarm.com/2010/07/26/a-big-little-idea-called-legibility/

https://www.youtube.com/watch?v=EYYdQB0mkEU

#150 calgary on 07.17.15 at 2:57 pm

calgary RE update from the ground:
move in ready house still selling within a week or two at close to asking price. only change is that it wont sell the first day! and it wont go over asking price. there are usually still multuple bids but folks dont up their bids so no bidding war.
houses with minor needs taking over a month to sell. at about 5% less than asking.
may make a conservative bid on one this week myself. most likely wont get it.

#151 Obvious Truth on 07.17.15 at 3:08 pm

Looks like linda from linamar doesn’t like the cpeso that much either.

She would like a strong cad back. The economists speaking for her and manufacturing aren’t listening. They just make up weak dollar stuff as needed.

She seems rob understand that nobody is listening and there’s nothing they can do anyway.

Big cheese at Toyota at Cambridge just quit to be an educator…..

Maybe we Canadians can just all become forex traders. Pass our skills on to the kids. Teach our kids at home. Government will be broke soon anyway. Just watch the deficit explode for next year. After the election of course.

Poloz and his men may just as well have worn rally caps at the meeting. They’re deep in the hole. Still behind the yield curve as far as I can tell.

Avery shenfeld thinks bond market hasn’t priced in fed rate hike. Good thing he doesn’t get paid to be right. Has he seen the move? Hasn’t everyone on the planet front run it.

It’s down right hilarious listening to people who are supposedly experts in Canada.

#152 Holy Crap Wheres The Tylenol on 07.17.15 at 3:15 pm

War is coming sooner than later. Our bailout will be short and sweet, until it rains black death.

http://www.msn.com/en-us/news/world/new-north-korean-nuclear-test-could-come-in-october/ar-AAd5NTc

#153 TRT on 07.17.15 at 3:16 pm

Garth,

Early election call. You heard it here first. Your old ‘buddy’ is in YVR.

#154 lee on 07.17.15 at 3:22 pm

Fitch says we are in for a soft landing, and maybe no landing at all in Toronto. Why should we not believe Fitch? It is reputable.

#155 Leo Trollstoy on 07.17.15 at 3:33 pm

Deflation is behind us.

Ahead of us is a lower CAD, higher inflation, trade deficits, and poo

Lots of poo

#156 Nagraj on 07.17.15 at 3:40 pm

“We may imagine he [Poloz] may be a bit intimated by the truly daunting size the combined real estate and consumer credit bubbles have attained in Canada. To call them monuments to monetary megalomania would be an understatement. Among developed nations only the bubbles in a few Scandinavian countries and Australia can hold a candle to them.”

This is from a Mish Shedlock post today, and he’s quoting Pater Tenebrarum. The piece goes on to suggest the possibility of an “Operation Twist”, and banks front-running 5Y and 7Y notes.
And of course the INSANE reluctance to call the Recession a Recession is grounds for humour.

Mr. Turner has used the word epic to describe the aforementioned bubbles (epic being a latter day version of awesome). Actually they’re catastrophic.

The wagon’s in the ditch, all four wheels are off, the horse is dead, the driver’s brain-damaged and roaming about aimlessly.

“Corporate profits are weak.” No kiddin’. Final demand is falling. You bet. How ’bout another quarter of zip GDP.

#157 Gulf Breeze on 07.17.15 at 3:44 pm

#137 Turner Nation

Gold is falling in American dollars. In Canadian dollars, it’s strengthening. Look at a 30 day chart in American dollars, then compare. The thirty day chart of gold priced in Canadian dollars is not showing a downtrend.

As well, top money managers, by a slim margin, have gone from bearish to bullish on the metal.

As a hedge against the unknowable and unimaginable, 5% to 10% is proper insurance.

#158 papawhiskeytango on 07.17.15 at 3:51 pm

Garth,

I need your help. Should my mom start taking CPP/OAS now at 65 or delay till 70. If she takes it now she will invest the money according to your dream portfolio I promise.

thanking you in advance for your advice.
papa

Take CPP at 60. Always. — Garth

#159 gut check on 07.17.15 at 4:00 pm

seems like critical mass of critical thinking is happening.
or maybe I’m being too optimistic.

#160 SWL1976 on 07.17.15 at 4:34 pm

#139 Spectacle

And a big thanks to Garth for the blog, as always.

This blog and comments section is second to none in providing readers with an immense amount of knowledge.

Most people who contribute here bring something of value to the table, and it is greatly appreciated.

Thanks to Garth, and thanks to everyone who contributes to the conversation.

#161 Karma on 07.17.15 at 4:45 pm

List of the worst offending perma-bears:

http://fundreference.com/articles/2015/1000555/the-clowns-of-wall-street/

#162 Mark on 07.17.15 at 4:48 pm

“Deflation is behind us.”

Weren’t you claiming there was no deflation? How can something you claim doesn’t exist, actually be ‘behind us’?

What’s astonishing is that house price drops over the past 2 years have only been minor. The CAD$ has fallen off a cliff. Yet all the economy can muster is a measly 1% YoY CPI figure. Imagine what the case will be when RE’s downwards movement really starts to accelerate in earnest!


Ahead of us is a lower CAD, higher inflation, trade deficits, and poo

And what exactly will drive demand to cause this? The CAD$ is actually doing quite all right against many currencies, so its recent weakness is largely a strong USD$ story more than anything.

Repeat after me, ‘There is no deflation.’ Atta boy. — Garth

#163 Mark on 07.17.15 at 4:49 pm

“Anyone care to comment on Home Capital Plunge in stock price the past week???”

House prices declining, subprime credit quality getting worse. What more is there to say?

#164 Fred Stoneflint on 07.17.15 at 5:30 pm

I have to think there’ll be a rush of newbies to ‘get under the wire’ before this threat of raising the down payment becomes reality. You can be sure all those sleaze bag real tards will be telling the sheeple that a hike of the down stoke is already getting carved into stone and that ‘they have to hurry before they priced out forever’.

People already stretched by the ZIRP and the huge mortgages are already stealing heads of lettuce. And figure the cost of food to get even crazier as Clown Prince Poloz fiddles from his perch on the loon tower at the flames he’s fanned become conflagration.

#165 IHCTD9 on 07.17.15 at 5:31 pm

Great post as per usual GT. I am now a regular reader, even though I’m am not in the housing market (like most folks commenting here). Keep up the good work!

#166 Leo Trollstoy on 07.17.15 at 5:38 pm

Weren’t you claiming there was no deflation? How can something you claim doesn’t exist, actually be ‘behind us’?

My bad.

“With the spectre of deflation solidly behind us…”

Thanks for catching that mistake!

Repeat after me, ‘There is no deflation.’ Atta boy. — Garth

Bingo!

#167 Leo Trollstoy on 07.17.15 at 5:41 pm

House prices declining, subprime credit quality getting worse. What more is there to say?

Which data claims that house prices are declining? Definitely not in Toronto and Vancouver, that’s for certain.

Which data claims that subprime credit quality is getting worse?

Why are you posting falsehoods again? Stop it already. Get some psychological help. It’s disturbing.

#168 Godth on 07.17.15 at 5:44 pm

#156 gut check on 07.17.15 at 4:00 pm

Yeah, you’re being too optimistic. They all still have tv’s, plus they’re (we’re) completely dependent. When the fan is clogged and people are truly disturbed…maybe then. Too late though, it will be chaos rules and people aren’t programmed for that.

The Gervais Principle, Or The Office According to “The Office”
http://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/

#169 Godth on 07.17.15 at 6:00 pm

#156 gut check on 07.17.15 at 4:00 pm

p.s. when chaos rules have reached a sufficient threshold then there will be war (chaos = a new order). People will line up to sacrifice themselves, or rather their children, (there’s always an evil other to be conjured and the table has been set with more than one – Muslims, Russians, Chinese). So it goes, until it doesn’t. It’s kind of pathetic really, but then Universal Empire was baked into the cake of civilization (what is civilization? what is barbarism?) right from the start.
http://www.amazon.ca/Mesopotamia-Assyrians-Babylonians-University-California/dp/B00SQAT1C4/ref=sr_1_1?s=books&ie=UTF8&qid=1437170293&sr=1-1&keywords=Mesopotamia+Ascalone

#170 markymark on 07.18.15 at 10:36 am

Zeitgeist documentary if true makes everything on here poppy cock. When you really think about it it is all a Ponzi scheme, it will be like musical chairs, music stops and who is one out of luck.
Very sad documentary, making you think about society as a whole?