Creamed

CREAMED1

Let’s follow up on last week’s advice not to be a maple-licking, moose-riding, loonie-loving, beaver aficionado with Celine’s Greatest Hits on you playlist and season’s tickets to the Maple Louts. Canada’s being spanked. If you ever wondered why this pathetic blog for years urged you to diversify, this is it, baby.

Now the very fact our central bank does not have faith in the domestic economy should tell you something. Guv Poloz, remember, called it ‘atrocious’ during the winter. Then, speaking before an international forum, he suggested it was on ‘life support.’ And last week he cut our key interest rate by a third, despite the obvious risks in doing so. This is consistent with his public statements – we’re like a heart patient. Surgery sucks. But without it, eternal peace.

Get the picture? Nobody has more data than Stephen Poloz. And did you notice? The dude  never smiles.

This week opened with a collapse in commodity values. Oil fell through $50 a barrel, and gold’s been killed. Commodity prices in general are at the lowest levels in 13 years, because the US dollar is gaining ground as the States prepares to raise interest rates.

Precious metals, oil, Brent crude, nat gas, grains and industrial metals are all lower. Money is flowing out of commodities (as well as metals and emerging markets) and into financial assets, US Treasuries and other safe-currency havens. In some cases, it’s been dramatic.

For example, it took only 15 minutes for the price of gold to spiral lower Sunday night by more than 4.5%. The metal’s collapse was mitigated somewhat in subsequent trade, but by mid-Monday it was still down almost $30 an ounce, putting it below 2014 prices and ripe for further losses. Gold at $1,100 US an ounce is 42% below 2011 levels. Meanwhile it has not paid a cent in interest or dividends. Ouch.

Despite their metal being in a five-year ditch, gold bugs will tell you that priced in Canadian dollarettes, it’s worth holding still. But losses are losses. And our dollar is stuck in the same rut as commodities – since we’re a resource-dependent country and oil is our biggest export. The loonie was at 86.5 cents US as this year began and now, two interest rate cuts later, sits in the 76-cent range.

It’s a real gamble that gold (or silver) will recover any time soon. China revealed Friday its gold holdings are far less than believed, and at the same time a strengthening American economy has bolstered the belief US rates will be higher in two or three months. As a consequence, money managers have slashed their precious metals positions and last week alone more than $2 billion was shaved from ETFs investing in them.

COMMODITIES

Well, back to Canuckistan where the federal government has started sending more free money ($2 billion) to people with kids, erasing the federal surplus and hoping voters don’t notice the $200 billion in new debt added under the current admin. The economy has shrunk in each of the last five months. The trade deficit is at a record level – way worse than during the mess in 2009. Household debt has soared, thanks for the cheap money required to save the economy. Now oil has dropped by half in a year, and it takes $1.30 to buy one US dollar, which three years ago cost 95 cents. What’s to worry about?

Not much, most people believe. But then again, eleven out of 10 folks on the street think it’s impossible for rates to go up, their houses to ever go down and that everybody wants to move here from Guangdong or Chicago. The inflation of a single asset that most people own – their property – has been sufficient to mask the escalating risk that underlies our society. Last week’s bank cut did it again. What should have alarmed Canadians instead comforted them.

So one lesson may be that you can easily fool the people, but you can’t trick markets. The TSX has lost 2.5% over the past 12 months during which the S&P has gained 10%. Money is flowing out of Canada (that’s why we have a trade deficit), out of the dollar (why it’s falling) and from our markets (hence the loss).

It’s still a hulluva place to live, but that home country bias this blog referenced last week is a really, really bad idea. The growth portion of your portfolio needs to be about two-thirds invested outside our borders.

As for real estate, simple. The latest rate cut should be telegraphing danger. Instead it’s creating horny.

And you thought Ashley Madison was all we had to be embarrassed about.

160 comments ↓

#1 Dave Veroniew on 07.20.15 at 5:18 pm

Ummm…Garth. You realize that Quebecor is bidding for an NHL team. They announced it this morning. That is really ALL you should be writing about today.

#2 Squirrel meat on 07.20.15 at 5:31 pm

Let’s follow up on last week’s advice not to be a maple-licking, moose-riding, loonie-loving, beaver aficionado with Celine’s Greatest Hits on you playlist and season’s tickets to the Maple Louts.

——————–
I AM CANADIAN. It’s gonna be hurtin.

#3 TRT on 07.20.15 at 5:31 pm

Let’s hope the shorts gang up on Canada! No bias here lol

CN cutting 600 good paying jobs…hiring freeze.

#4 MSM-Free Zone on 07.20.15 at 5:43 pm

“…..the government is now touting the benefit cheques as tonic for a suddenly sputtering economy and as a job-creation plan……” – Globe & Mail
_________________________

Ever return home from walking the dog and find a wad of cash on the sidewalk, thinking you’ve suddenly hit the jackpot, only to have your wife tell you it’s the same wad of cash you lost from your own pockets a few days ago?

(in-)Action Plan, v2.0

#5 Squirrel meat on 07.20.15 at 5:49 pm

#4 MSM-Free Zone on 07.20.15 at 5:43 pm

“…..the government is now touting the benefit cheques as tonic for a suddenly sputtering economy and as a job-creation plan……” – Globe & Mail
_________________________

Ever return home from walking the dog and find a wad of cash on the sidewalk, thinking you’ve suddenly hit the jackpot, only to have your wife tell you it’s the same wad of cash you lost from your own pockets a few days ago?

(in-)Action Plan, v2.0
———————————

Even worse it comes wrapped in a CON logo.

http://www.theglobeandmail.com/news/politics/poilievre-wears-tory-shirt-while-announcing-child-benefit-payments/article25592748/

#6 Lets be Clear on 07.20.15 at 5:50 pm

“Nobody has more data than Stephen Poloz.”

That clown was bashing the dollar before he sat down as BOC Gov….before he had access to any data…he’s a dollar basher…and his ‘brain trust ‘ are miners and bureaucrats from NFLD……that’s not a slight on Newfies…just a fact that Poloz has surrounded himself with coal miner advisors who graduated high school with Jesus. The playbook at the BOC resembles something out of the 1940’s when Canadians lived in the fields.

Gov Poloz has no education in finance…zero in economics…he’s an appointed bureaucrat with no skills and no knowledge what so ever in interpreting ‘data’. At least Mickey Mouse started out driving a steamboat…..Poloz….a cloistered, pensioned and privileged back office flunky with no prior experience.

#7 Henry on 07.20.15 at 5:58 pm

Just think, for people with U.S bucks Canadian real estate is at a 35% discount from three years ago. No wonder prices are soaring. Real estate for Canadians is getting really expensive, but for foreigners it’s a real bargain!

Now why would Americans buy here because our economy is weakening? I have come across zero data to support this. — Garth

#8 MF on 07.20.15 at 6:16 pm

This loyal Garthonian millennial wants to say thanks for yesterday’s post on preffered’s. The message was informative, but most importantly it calmed my nerves :)

As usual I come to this blog for a daily dose of reality and sanity. Yesterday’s post underscored that well and the discussion that followed was great as well.

As for today’s post, it was like clockwork when that the morons lowered the rate last week. My Facebook friends who are involved in selling real estate or mortgages all posted the articles for everyone to see. I politely reminded them that Poloz also revised the economic outlook downward and that he was “concerned”. I will say this though, lots of people now seem to believe that the market is overheated here in the GTA 1 and 2 that the interest rate reduction was probably a bad move.

The sentiment seems to be shifting very slowly.

Thanks again Garth,

MF

#9 BobC on 07.20.15 at 6:17 pm

Today’s gold price should end all questions about gold. It’s going to $900 U.S.
I’m so glad I listened to you Garth. Thanks again.

#10 Zorba on 07.20.15 at 6:19 pm

Will the rates go up, eventually ,to preserve banks kapital from inflation due to lower canadian dollar,Garth?

#11 family beagle on 07.20.15 at 6:37 pm

Sittin back, nice day… Ping.
What’s that?
Ooh, more US cash goes plop into my paypal acct.
I am investing in Canada, though. I bought a wee trailer park in 250.
Heads up, downsizers. Gated, recreation nearby, cheap pad fee. Company store onsite. Clear timber to pay your IOU.

Behold as the great liquidation of bricabrac, consumer flotsam, and useless decor floods neighbourhood garage sales near you. Get your signs out early as most everybody has the same shtuff.

One thing I am curious about… Retail numbers in YVR/GTA. Are shops and boutiques doing well? The rest of Canada we know, because they are normal.

#12 Brian Ripley on 07.20.15 at 6:38 pm

In the last real estate correction going into the March 2009 interim bottom, it was Calgary momentum that crashed first beginning in late 2006… chart:
http://www.chpc.biz/housing-price-momentum.html

Vancouver and Toronto momentum did not roll over until late 2007 – early 2008…. +/- one year after Calgary.

Calgary momentum rolled over AGAIN in late 2014 (7 years later) AND has been negative since early 2015 (7 months and counting)

If Calgary is the canary (oil & commodity fears), 4Q 2015 may look very different for real estate bulls in Canada.

#13 MSM-Free Zone on 07.20.15 at 6:38 pm

#5 Squirrel meat on 07.20.15 at 5:49 pm

“…..Even worse it comes wrapped in a CON logo….”
_________________________

It’s difficult to fathom how a human being can be born so completely devoid of any moral compass and still manage rise to a position of authority.

Come October, I won’t be giving these people the steam off my next bowel movement, much less my vote.

BTW, today’s blog post should be mandatory reading for every Canadian voter before they cast their ballot.

#14 joe campbell on 07.20.15 at 6:49 pm

all investments have risks, certainly my mining stocks can attest to that (-80%).

i will hold my stocks as they are practically worthless now anyways, i certainly wont try to double down as i did on bbd (i like to dream).

i still expect us(the world) to do what all fiat currencies do, expand and inflate. at which time “main street”, the job market and resources could sky rocket. you know all those 30 year olds might actually want jobs…

fiat currency and dollar manipulation is a tricky game.

#15 Obvious Truth on 07.20.15 at 6:55 pm

Stats can may as well be the grim reaper for the economy.

Bank economists don’t read though so don’t expect to know that ontario led the wholesale sales decline. Or that inventories are up again.

Like garth said. The tsx and the cpeso is doing the talking. It’s almost impossible to find anything constructive.

No need to be short anything as far as I’m concerned. Q’s are leading the way. The 500 is breaking out. Too many good things to buy stateside.

Long Canuckistan I feel is a ways away. 25% cut in buying power is no different than a painful 25% cut in wages via bailout.

I vote oxi with my money. Leaders of Canuckistan need to earn it back. And no. I’m not still holding a grudge over income trusts and potash. Really I’m not.

#16 DM in C on 07.20.15 at 6:57 pm

Pandering, cynical bullshit ploy to buy votes, plain and simple.

$420. Dumped in our TFSA. Thanks Harper.

#17 takla on 07.20.15 at 6:59 pm

re #9
These are commodities that rise and wain over time in cycles.I read today the gold liquidation had more to do with the china stock market liquidating there positions to cover loss’s to shore up funds in their recent stock market tumble.
Gold did the same thing circa 1999 after a long bear bottomed around 250 oz and washed all the week hand and turned the corner to a 650% run up over the next 11 yrs,can history repeat…I wouldn’t bet against it.

#18 An old bird... on 07.20.15 at 7:04 pm

I wonder if someone can explain something to an old bird who loses quite a bit of sleep about a particular reset preferred. I wasn’t sure whether to post at the tail end of yesterday’s comments or on today’s date, so please bear with me.

A bit of history…I was with TD Private Wealth previously holding quite a few of the reset preferreds issued in 2008 and 2009 when the world was coming to an end.

Recently my eldest chick convinced this old bird to go self managed with broad index funds and diversify more appropriately. I just have one reset preferred left and am down about 30%, hesitant to crystalize the loss to fund the more conservative ETF approach. My understanding originally from the broker was that I would always get the $25.00 par value back if I didn’t think the renewal terms were favourable.

This particular reset is BCE.PR.M 4.85% (previously BAF.PR.A Bell Aliant) with the initial five year fix rate period coming due March 31, 2016. Apparently, from information on BCE’s website, regarding First Preferred Shares AM/AN, there is an automatic conversion ‘feature’ which I just can’t get my head around from trying to read the prospectus. Would there, perhaps, be a kindly, knowledgeable person out there that can tell me whether I’ll get my initial money back as suggested by previous broker and what I would have to do to ensure that outcome?

It certainly doesn’t feel like it from down in this black hole.

Yes….I know…(now)…don’t hold individual preferred shares. ;o(

I’ve been lurking for many years now and am most thankful for all your dedication and hard work, Garth…just one of many, I know. Thank you…

#19 Republic_of_Western_Canada on 07.20.15 at 7:05 pm

Massive drops in commodity prices confirm massive deflation – getting worse at a region near you.

Nope. No deflation yet, or close. — Garth

#20 John on 07.20.15 at 7:12 pm

Well we’re still voted the most admired country in the world… As for real estate. Heard that in hard up Greece 50% of the real estate businesses have shuttered and the only real estate changing hands is stuff sold for cash. Kind of puts a damper on the party. As for China and it’s gold hoard. Not believable numbers. Gold was monkey hammered into a flash crash today. So? Someone needed cash or someone was having a hissy fit. The sun will set and Canadians will shop for granite. It’s all nuts.

#21 Smoking Man on 07.20.15 at 7:13 pm

That pic reminds me of an incident that happed to me a Senica Casino a few years ago..

Drinking 18 year old Scotch with a long lost buddy, he hit it hard. I was scared from head to toe.

At the tax farm next day I said a stupid cyclists lost control of his bicycle and crashed into me..

The carpet burn on top of my head was hard to explain. Let alone figure out how it happened..

Who knew I can preform funky yoga while beyond trashed…

#22 Suede on 07.20.15 at 7:15 pm

Gold price is relatively unchanged in Canadian dollars over the last year.

The venture at the lowest level in almost 20 years. Lots of gloom in that’s sector. Risk off for sure.

On the bright side, getting more money from the feds. Harper sure knows how to buy my wifes vote, even if Facebook peeps are pumping NDP like crazy.

#23 Steve French on 07.20.15 at 7:16 pm

Even though i chose my GF nom de plume after Bubble’s pet cougar in that Trailer Park Boys episode… if “Steve French” is also the name of a gay porn star, well– I will still wear the mantle with pride.

It’s 2015 after all, not 1955.

Hey, we’re an inclusive bunch on this blog.

At least some things will remain forever sacred — such as this classic tune that will never be turned into some sort of weird gay anthem…. (right?)

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

#24 Panhead on 07.20.15 at 7:17 pm

Just returned from a staycation on Cortes Island. Gorgeous place off Van Island. Govt. camsite at $20.00 per night. Usually packed with either parents with kids or kayakers. This year almost empty with perfect weather. Talked to the campsite guy and he says this is the slowest year by far … ever. Ominous in my mind …
That said, I must older than Gartholemew … still like moose meat but don’t know who Ashley Madison is.

#25 John on 07.20.15 at 7:19 pm

On a more serious note that serves to confirm we’re in dangerous waters. In the immediate circle of the across Canada clan, those with the most job insecurity are going over the edge. 1) Western commodity shut down maybe all summer (not oil), 2) business closure all laid off and 3) Eastern sub-contractor @ a nuke laid off during what should be the busy season. And, that’s just one clan. Sounds like the drum roll from the lead up to 2008. Repeat this story by the millions and no wonder the Poloz poodles are in panic. We’re fried.

#26 Cato the Smoking Mark on 07.20.15 at 7:30 pm

Oh crap, oh crap, oh crap!!

I have even more identities on Ashley Madison than I do here.

Now I am so screwed!!!!!!

Garth, do me a solid? If my significant other asks, please tell her Ashley is the name of one of your amazons and I have been in touch with her regularly buying your books from this website using my credit card.

Thanks bro!!!!

#27 Ronaldo on 07.20.15 at 7:42 pm

#7 Henry

”Real estate for Canadians is getting really expensive, but for foreigners it’s a real bargain!”

”Now why would Americans buy here because our economy is weakening? I have come across zero data to support this. — Garth”

So, are you’re saying that with our dollar down 35% that they can now buy a 1 million dollar shack in Vancouver or Toronto for $750,000 U.S. when a comparable house in the U.S. would likely be around $120,000.

#28 Freedom First on 07.20.15 at 7:42 pm

Yes. Having a portfolio backed up by the U.S.$ right now is rather comforting.

Another yes. Male Patrons of Ashley Madison must be sweating bullets right now. Female Patrons are ok though as they are backed up by the Canadian courts.

#29 Victor V on 07.20.15 at 7:43 pm

#24 Panhead

Here you go: http://bfy.tw/uSH

#30 will on 07.20.15 at 7:44 pm

Hey #6 Let’s be clear

Yeah Plutz is an easy target. But didn’t Carney do the same thing? Let’s be fair and distribute the trashing equally.

The BoC is not independent. Currently anyway. Maybe Dave Dodge was the last governor who enjoyed independence in that role.

#31 Scumop on 07.20.15 at 7:45 pm

Its not just Canadians who have problems understanding money. You just have to be wilfully ignorant and self-entitled. This one could be well beyond even Garth’s help…

https://ca.finance.yahoo.com/news/a-college-student-blows-inheritance-bert-show-205833329.html

#32 ERichard on 07.20.15 at 7:47 pm

Got a letter today from MBNA, now a division of TD. Be late on two payments in a year and they are charging you 5% higher rate, must be trying to appeal to all those people in the media this week whom are living off credit cards. Harper’s free money is such a scam, got a $2000.00 apprenticeship completion grant, maybe cleared $500.00 after being taxed federally and provincially.

#33 Sean on 07.20.15 at 7:56 pm

I was underweight Canada this weekend so I bought some today to rebalance. At least I got half the dip :).

#34 saskatoon on 07.20.15 at 7:56 pm

why have ANY portion of a portfolio invested in canada?

#35 Ole Doberman on 07.20.15 at 8:01 pm

Gartho do you believe the future is in the electric car market and that’s a big reason why oil has been cratering?
Just look at Tesla’s stock – $30b mkt cap!

#36 will on 07.20.15 at 8:01 pm

I am 100% Canadian equity though all of my companies combined earn roughly 30-40% of their earnings in the USA and abroad. The tsx is down year to date but I am up close to 6%. This is including a high yield bond fund which is mostly diversified in the USA. It’s obviously too early to say but if oil stays in the toilet, I think I can beat the tsx handily. That’s dividends included.

#37 Balmuto on 07.20.15 at 8:09 pm

The devastation of the miners on the TSX today was something to behold. Even though I don’t hold any of those stocks I felt the pain. Barrick Gold, back to 1990 levels. A sad statement for one of Canada’s blue chip companies.

#38 Sydneysider on 07.20.15 at 8:10 pm

#6 Lets be Clear

“Gov Poloz has no education in finance…zero in economics…he’s an appointed bureaucrat with no skills and no knowledge what so ever in interpreting ‘data’. ”

Dr Poloz does have 3 degrees in economics (including a PhD), so he is probably more knowledgeable in that area than you or I. One can reasonably question his objectives or motivation, but not his basic academic qualifications.

http://www.bankofcanada.ca/profile/stephen-s-poloz/

#39 Larry Laffer on 07.20.15 at 8:18 pm

Hey, why should we be embarrassed about Ashley Madison? :P

#40 SWL1976 on 07.20.15 at 8:18 pm

#4 MSM-Free Zone on

Ever return home from walking the dog and find a wad of cash on the sidewalk, thinking you’ve suddenly hit the jackpot, only to have your wife tell you it’s the same wad of cash you lost from your own pockets a few days ago?

(in-)Action Plan, v2.0

—————————-

And don’t forget they will want their pound of flesh back in April.

How many people you figure will budget for that?

Baaahh!

#41 Llewelyn on 07.20.15 at 8:22 pm

Being the curious soul that I am I reviewed all of the indicators that Janet Yellen is currently using to promote the healthy state of the American economy.

• Growth of industrial production – relatively stable

• CORE PCE inflation – relatively stable between 1.0 and 2.0% excluding food and energy

• Inflation – labour costs – relatively stable

• Housing sales and starts – modest increase but less than 50 % of volume in 2005

• Gross Domestic Product – substantially lower than projections

• Labour force participation rate – lowest level in recent memory only 76.7% of available labour force

• Non-farm payroll – job creation – substantial gains in the number of self employed Americans

• Unemployment rate – substantial decline into the targeted range of 5.5 to 5.6 % of labour force

• Household Wealth measured by S & P 500 – very strong gains

• Household wealth – home price index – very stable

• Bond market inflation expectations – increasing slightly

• Treasury yields – trending upwards

• Federal Funds rate – projected to increase

Setting aside the substantial increase in the S & P 500 the only indicator of substantial economic growth is the decline in the unemployment rate.

On further analysis however this decline is mitigated by the continued decline in the labour participation rate. This decline is only partially explained by shifting demographics and indicates that many able bodied workers are being excluded from calculation of the official unemployment rate.

Without the substantial increase in equities few external observers could conclude that the American economy was in full recovery mode.

Retail sales in June actually declined and have hardly set the world in fire since June 2014.

Automobile sales have recovered to levels last achieved in 2005 but with interest rates at the lowest levels in history and a range of incentives this level of sales is not all that surprising.

My concern is that all confidence games get the audience to focus on what they want them to focus on. The S & P 500 is certainly an indicator that corporate profits are increasing but I found it very difficult to find evidence that this supposed recovery has made a substantial difference in the lives of ordinary Americans.

If I was over $18 trillion dollars in debt and running a projected deficit of over $550 billion this year I would do everything in my power to keep global eyes focused on the success of American equities. Peeking behind the curtain would definitely be discouraged.

Maybe you should obsess this much about our own economy. — Garth

#42 anotherstabbinginsaskatoon on 07.20.15 at 8:31 pm

It’s a helluva place to live for people that have money. It’s looking more like a open air prison/workcamp for the rest of us dregs. And the food sucks.

#43 Nagraj on 07.20.15 at 8:31 pm

On the IDEAL BUSINESS CYCLE diagram, the sequence of turns in asset classes reads: BONDS STOCKS COMMODITIES BONDS STOCK COMMODITIES BONDS STOCKS COMMODITIES etc ad inf

Well, ya can’t argue that COMMODITIES aint turned, can ya now.
So BONDS is next. That would fit in nicely with GT’s theory that rates is gonna rise.
And then the SPX finally gits to rest from its inhuman labours . . .

TIMING aforesaid turns however is tricky. (It IS possible for all three asset classes to move in tandem – but not for long.)

My own bias is to think that the distance between a rise in yields and a drop in the SPX will be quite quite short.

AS A RULE, gold leads any turn in commodities (by a mile) and the miners lead the metal. It is POSSIBLE that miners will lead a gold reversal to the upside while at the same time the bond mkt is squealin’ like a stuck pig (counterintuitive as that may seem to some). [AS ANOTHER RULE, in a serious stock rout, the miners git sold to meet margin calls while the metal price does well – and then are the first to git bought back … ]

Putting all these idealisms together – unbeloved ABX looks like a BUY AND HOLD, soon. Depends on yer persapatective. Of course GT will say, in a deep voice – What has this to do with responsible conservative longterm investing? Nuthin, I cheerfully admit.

(By the way, it do look like Canada’s reputation is in deep trouble. Which it is. How you feel about ANOTHER quarter of negative GDP? In time yer gonna be real grateful for them there gold deposits . . .
“Hey, baby. see that bulge in my pocket?” “Oh yes, Johnny.” “You know what its is, baby?” “Oh no I don’t, Johnny.” “Baby, it’s CANADIAN TIRE MONEY! We’re rich!” “Johnny – ” “Yeah, baby?” “I have a headache.”)

#44 My Life is a Pile of Shit on 07.20.15 at 8:32 pm

Garth, your brand of hypocrisy is speaking about home ownership with disdain while owning a Lambo, Tesla, Harley, RV, boat, or any discretionary vehicle of that nature. There’s nothing wrong with “house horniness”; debt horniness is the problem. Canadians fly toward debt like moths to flame. I have no debt, and home ownership may be better for me (than renting), because I spend money on home improvements instead of hookers.

#45 gladiator on 07.20.15 at 8:38 pm

If gold is such a horrible investment, then it means that central banks around the world are ruled by morons who are not selling it to get the cash into other (better?) stores of value. Why do they still hoard tons of it and some countries even are repatriating it from storages abroad? Are they really that dumb?

Or, maybe they know something we don’t? After all, they have much more info than us little people. Main idea is that they buy it as a storage of value. Nothing can replace it. No one can inflate or print it. In order to back the value of a country’s currency, holding gold is one of the best things a central bank can do.
Now, if we try to understand why people buy physical gold, it is for the very same reason – to store value. This usually happens when the trust in a fiat currency starts losing ground.
Yes, it does not pay you to own it, yes it costs to store it in a safe place, yes it is falling in price, but more and more the price falls look orchestrated. No professional gold trader will sell a huge amount of it at once and basically crash the price, unless there was an intention to lose some money. The flash crash in gold price last night was something very-very unusual and done by someone who either intended do harm his/her employer by losing a lot of money on that trade, or someone interested in pushing the price lower for whatever reason.
I am not a conspiracy theorist, but more and more of these are former theories and current facts. Thus, it is better not to blindly dismiss anything so unusual, but to try and see what actually happened and make your own conclusions.
Steel and concrete buildings don’t fall at freefall speed because of a fire, especially when the owner gave indication to “pull it” (as he said himself) on the same day and in the heart of the financial district.

I did not recognize you as a nutbar. Thanks for clarifying. — Garth

#46 For those about to flop... on 07.20.15 at 8:45 pm

My wife and I have not had the pleasure/displeasure of having children ,so no handout for us.
We just work hard ,rent and stay out of debt .I guess we’re not worth bribing to get our vote!
Anyways with our dollar going down the toilet I was thinking about staying in Canada on our annual camping trip, but out of spite I am definitely going to spend as much of my hard earned cash south of the border .
Memo to the government :You screw me ,I screw you….
Sort your shit out!

#47 Henry on 07.20.15 at 8:49 pm

“Now why would Americans buy here because our economy is weakening? I have come across zero data to support this. — Garth”

I admit this, in many ways, is anecdotal evidence but it seems the big serge is in vacation properties

http://www.moneysense.ca/property/vacation/u-s-buyers-flock-to-canadian-vacation-homes/

The sources for that ‘article’? Two real estate agents. Gimme a break. — Garth

#48 Spectacle on 07.20.15 at 8:49 pm

Anyone want a clearer picture of how the bigger picture, or Agenda-21 is going to play out…..here it is. Real estate is going to be hammered, Town & Country.

Notice the web developer at bottom of site. All they do is promote the Agenda. And that’s why the good people like Mr Turner are removed from office. Willing political pawns are promoted instead.

Better Growth, Better Climate: The New Climate Economy Report
newclimateeconomy.report/

Al Gore and the 90 trillion dollar plan to remove cars from the worlds cities, just the beginning .

Preserve Your own interests.

#49 Spectacle on 07.20.15 at 8:51 pm

Try this link…

New Climate Economy | Commission on the Economy and Climate
newclimateeconomy.net/

#50 Shawn on 07.20.15 at 8:51 pm

Canadian Bank Capital and Inflation

Zorba on 07.20.15 at 6:19 pm asked:

Will the rates go up, eventually ,to preserve banks kapital from inflation due to lower canadian dollar,Garth?

**************************************
The capital (owners equity and debt issuances) of Canadian Banks is not directly impacted by inflation. (It would be indirectly impacted if inflation lowered the banks profits, although that is questionable itself).

Canadian interest rates will rise when they rise.

Banks would generally like interest rates to rise. So far this desire of banks has had zero impact on interest rates.

#51 Waterloo Resident on 07.20.15 at 8:52 pm

Quote: ( “The TSX has lost 2.5% over the past 12 months. Money is flowing out of Canada (that’s why we have a trade deficit), out of the dollar (why it’s falling) and from our markets (hence the loss).” )

Well, look at the bright side; at least we still have good employment with our real estate jobs market still BOOMING, right ?

#52 Tony on 07.20.15 at 8:53 pm

Lost some money on gold but made it back shorting palladium from long ago. America all their fairy tales of Americans buying more cars as I watch palladium keep on falling.

#53 Spectacle on 07.20.15 at 8:55 pm

Nosty, can you help with the link. My fascist iPad won’t let me.

Regards,

New Climate Economy | Commission on the Economy and Climate
newclimateeconomy.net/

#54 Smoking Man on 07.20.15 at 8:55 pm

My take on USA especially in the technology, finance world. USA is the place to be.

Canada is behind the 8 ball. They are only now recently gone with Temporary Foreign Workers in a big way.

Coping what failed miserably down in the USA, those crafty well tanned Smoking Men shafted them big time, took em to the cleaners. To ad insult to injury, in the world of disgruntled slaves, Twitter, YouTube, facebook..

Next downturn watch out.

The big boys are playing with fire next time around.

Reputations will be destroyed, people will be fired, remeber Gordon Nixon being boxed in with Igate. He’s CIO quietly disappear shortly there after.

But who cares, I would do the same if I was IT management and make bonus, so the service goes down the shitter, just hide it and milk em..

Screw the business, they make enough. In my field, not only is the cost of living in some states much lower, but the contracting rates are usually double for specialist, plus getting paid in real money is appealing.

TD paying in NYC twice what they pay Canadians for the work here, in real money, it’s debatable which city is more expensive to live in now.

I turned down a gig in California, paying 140 p/h. They had a good deal to have the world’s best.

I couldn’t start in 3 days. Plus I would have destroyed a 5 year great relationship I built with the business. This Canadian boy has a warped sence of morality. Somethings I value, others not so much

But there are lots more, just like that. Wife wants to be within a 12 hour drive.

Brain drain 2.0

Get out of Dodge if you can dogs..

#55 Investorz on 07.20.15 at 8:57 pm

Wow did gold stocks get smashed today. Goldcorp down 14%. Now I hear that portfolio managers are going 0% weighting on gold and some even are going 0% materials. So much for diversification.

Energy was looking pale too.

TSX is going to get creamed. That means most canadian investors will have a lot less money to give their kids to buy old semi-detached in Toronto.

#56 Squirrel meat on 07.20.15 at 9:03 pm

Garth owns a lambo and a tesla? My life is a pile of shit too I guess.

#57 kids on 07.20.15 at 9:04 pm

The kids grew up too fast, before they could have made government money.

Now they are on their own – so we are, as far as the government is concerned.

#58 Washed Up Lawyer on 07.20.15 at 9:14 pm

Gloomy Hon. Garth:

Once, just once could you inject something cheery into this munificent, pathetic and mildly patriotic blog?

The Aerosmith concert last night in Fort McMurray went swimmingly and based upon what I could hear from my front lawn, Steven Tyler was in fine fettle.

#59 Investorz on 07.20.15 at 9:17 pm

CN laying of 600.

Layoffs, same thing that happenned in the US during their crisis. Companies want to improve their margins. They don’t care for votes. Poloz and Harper do.

#60 Llewelyn on 07.20.15 at 9:25 pm

I would hardly call my comments about the American economic recovery an obssession.

– Investing in China was great until it wasn’t

– Buying gold was great until it wasn’t

– Buying Bre – X. Nortel, Enron, RIM, etc was great until it wasn’t

– Buying derivatves based on toxic mortgages was great until it wasn’t

Observing that the fundamentals behind the American ‘recovery’ are not all that strong can hardly be called an obession. I spent over 40 years sorting out the wheat from the chaff and it is my opinion that there is an awful lot of chaff in the good old USA.

Several months ago I mentioned how I witnessed the sub-prime market in action when I was working in the USA. When I looked into what was going on I determined that a substantial con game was being played. If I was following your blog at the time I might have mentioned my concern and I probably would have been called obsessive.

If you are uncomfortable with my views on the American recovery just politely ask me to comment elsewhere and I will comply. After all it is your site.

#61 Balmuto on 07.20.15 at 9:28 pm

“Now, if we try to understand why people buy physical gold, it is for the very same reason – to store value. This usually happens when the trust in a fiat currency starts losing ground.”

You’ll know the trust in a fiat currency is losing ground when there’s a significant pickup in inflation. The gold bugs were expecting hyperinflation would have manifested itself by now with all the money printing that’s gone on. Instead we’ve just seen low, low inflation. Not even deflation, which would at least given people something to get excited about. Just boring old price stability. A horrible environment for gold. You need inflation to turn this around.

#62 Anon on 07.20.15 at 9:30 pm

Way to exaggerate the numbers. The S&P has gone up 7.59% from one year ago, not 10%.

You’re correct. I did exaggerate. The exact gain is 9.78%. — Garth

#63 Unhinged Loon on 07.20.15 at 9:34 pm

All these miserable numbers, sell-offs and panicked investors….

Finally, some good opportunities for value. :3

#64 Frankie Goes To Greeze on 07.20.15 at 9:37 pm

Hey Garth- When all hell breaks loose this Sept-Oct I will buy all your cars off you for 20 cents on the dollar with 100 of my 20,000 ounces of Silver. Have they been smoked in? A Lambo??? Italian Trash. Won’t buy that- you can keep that. BTW China has over 20,000 tons of gold- Wait till they announce that. Now come back with a short non-witty insult. I will still buy your cars though.

#65 Shawn on 07.20.15 at 9:39 pm

Canadian National Railways Earnings Report and its Implications

Railways are often considered a good indicator of the economy.

Q2 profits up, mostly due to the benefit of the lower dollar as U.S. earnings get translated in at a higher rate.

Keep in mind CN gets about a third of its revenues from its U.S. tracks.

Car loading down by 3%. Ton-miles transported down by 7%.

The two consumer-driven load categories auto and intermodal both had increased car loadings.

All five commodity load categories had lower car loadings (grain, coal, petroleum, metals and forest products)

Overall conclusion, not bad but it does offer added proof of a soft economy. However, while the commodity sector is weak, the consumer sector has not gotten the memo.

The question remains, will consumer consumption decline or at least fail to grow in the next six months?

Consumer consumption is the ultimate driver of the economy. Nothing gets produced except to directly or indirectly feed current or expected future consumer demand. Nor should it.

#66 Smoking Man on 07.20.15 at 9:42 pm

https://m.youtube.com/watch?v=Ynt6PqrXyQI

My crew at Area 51….

You can Always find a way..

#67 Bottoms_Up on 07.20.15 at 9:46 pm

I’d be curious to know how often the US raised interest rates in the year leading up to an election. If Canada can reduce rates I’m certain the usa can come up with good reasons not to raise them.

#68 GTA Observer on 07.20.15 at 9:46 pm

#7 Henry – Just think, for people with U.S bucks Canadian real estate is at a 35% discount from three years ago.

You’re joking, right? Because Americans are cautious enough about buying in their own country — it’s not as if there’s pent-up Yankee demand for Canadian housing.

Nah, you’re joking. Good one.

#69 Doug in London on 07.20.15 at 9:46 pm

Well, look on the bright side. I haven’t checked the prices lately, but it’s a good bet that resource funds are on sale and may get even cheaper in the near future.

#70 Bottoms_Up on 07.20.15 at 9:55 pm

#46 For those about to flop… on 07.20.15 at 8:45 pm
————————————————
You are welcome to my $31,000 per year daycare bill, in exchange for the “enhanced” yearly child benefit of $3840.

#71 Linda on 07.20.15 at 9:59 pm

Of course Poloz never smiles – he is the sacrificial goat, doomed to act as the bagman for what is nothing more than vote purchase with our tax dollars (rate cut). Hence the largesse handed out to families with children 3 months before the next election – say it isn’t so, that that wasn’t just blatant vote buying.

My take is that Poloz will be blamed for the inevitable drop in RE valuations once the US starts hiking rates. Though I noticed that the blog is now talking maybe as much as a year out before those rates hike – which is interesting, since the indicators are that USA will hike this calendar year, timing being anyone’s guess but I’d bet September/October once the kids are back in school at the very latest. Harper is likely sacrificing chickens in the hope it will be after the next election, please & thank you. Poloz is next – hard to smile when your fate is to be chicken dinner…..

#72 omg the original on 07.20.15 at 10:01 pm

So one lesson may be that you can easily fool the people, but you can’t trick markets.
——————————–

Markets always get it right, but sometimes it can take a while. Of course behind the markets are a whole bunch of people and that’s why markets can act irrationally in the short-term. In the case of Canadian housing the markets have been irrational in some markets for over 15 years.

But over the long run the laws of finance always win out and the human irrationality is pummelled from the market regardless of what the government, MSM, or the private sector may try to do. Think sub-prime in the US or Japan’s never ending real estate and equities correction which began in the 1990s.

In Canada the reversion of the real estates market will be 60-70% in some markets. Much of this reversion will likely occur as inflation slow erodes stagnating real estate prices.

Markets have no mercy and life savings and fortunes will be lost in Canada due to the massive real estate reversion back to the mean. It just may take several more years before we see it. Or it may happen so slowly no one notices.

I hope for the second option.

#73 Andrew Woburn on 07.20.15 at 10:02 pm

Frances Coppola is a former banker who writes for Bloomberg, Forbes and the FT. She believes the imposition of capital controls in Greece may have set the stage to force Grexit.

As she points out (see attached), now controls are in place, bank runs are impossible so there is no risk of contagion from depositor panic. This makes it easier to force bail-ins on the remaining uninsured depositors. As 30% of these deposits are the working capital of Greek businesses, the resulting haircuts would devastate what is left of the Greek economy unless they leave the Euro.

I hope the very astute Ms. Coppola is wrong this time but, if she isn’t, Angela Merkel’s message to Europe will be unmistakable: my way or the autobahn.

http://coppolacomment.blogspot.co.uk/2015/07/the-great-greek-bank-drama-act-ii-heist.html

#74 Bottoms_Up on 07.20.15 at 10:05 pm

#35 Ole Doberman on 07.20.15 at 8:01 pm
———————————————–
Oil is cratering because of abundant supply, lead by Saudi Arabia pumping and Iran coming on-line. But yes, the future is in electric vehicles.

#75 gladiator on 07.20.15 at 10:10 pm

You’re welcome.
Here is a video with more nutbars, but they are more qualified to speak about it.
Enjoy and, more importantly, don’t think what the propaganda tells you to.
https://m.youtube.com/watch?v=zi887OFzsx8

#76 gladiator on 07.20.15 at 10:13 pm

Of course, one can say that this video is also propaganda. Totally agree, but still, concrete buildings don’t fall at freefall speed because of a fire.

#77 Smoking Man on 07.20.15 at 10:19 pm

Know this you who quest for knowledge, the world is run by very bad vacuum cleaner sales men, if they where any good, they would still be selling filter queen’s.

You guys ever had discussions with board members of big name Canadian companies..

I call it the land of the living brain dead.

It’s incredible how stupid they are.

Obviously I will never qualify..

#78 omg the original on 07.20.15 at 10:20 pm

6 Lets be Clear

Gov Poloz has no education in finance…zero in economics…he’s an appointed bureaucrat with no skills and no knowledge what so ever in interpreting ‘data’. At least Mickey Mouse started out driving a steamboat…..Poloz….a cloistered, pensioned and privileged back office flunky with no prior experience.
———————-

Always easy for guys hanging out on the comment section of a free blog to call somebody else an idiot.

But you and most other do not understand what the BOC is facing.

The economy in Canada is crap.

A election is looming and no matter how “independent” the BOC is supposed to be, there is incredible political pressure to get the economy going (or at least out of recession).

So about the only option the BOC has is to lower rates and let the dollar free fall.

AND pick-up the pieces later…….or hope a booming US economy will drag Canada along.

So as amazed as you may be that Mr Poloz is not follow your gut feeling for what the economy needs, the BOCs actions make perfect sense from a macro economic/political perspective.

#79 Andrew Woburn on 07.20.15 at 10:24 pm

Goldbugs have recently been very disappointed by the recent release of updated Chinese official gold purchases. The dream of a gold-backed yuan crippling the US dollar remains a fantasy.

I have never understood why people delude themselves that the leaders of a totalitarian command economy would choose to tie their own hands. The alleged benefits of the gold standard was that it disciplined governments. There are no governments anywhere today that choose to accept outside discipline, especially the Chinese communist party.

“China is not very interested in gold; it owns little of it, and has actually shown proportionately more interest in accumulating paper bonds denominated in fiat currency.
The days of China’s massive FX reserve accumulation are essentially over. Consequently, it is likely that the days of significant official gold accumulation in the country are past.

The evidence makes it extremely clear that China has no interest in tying its currency to gold.”

The reason central banks keep some gold around is because in times of war or other turbulence, countries may have to resort to payment in gold if their domestic currencies are unacceptable to a particular counterparty.

http://seekingalpha.com/article/3337225-chinas-gold-reserves-a-strong-dose-of-reality

#80 For those about to flop... on 07.20.15 at 10:26 pm

#70 Bottoms up.
I wonder how many parents are only getting by thanks to the childcare help of grandma and grandpa?
Especially in Vancouver where supposedly people are plowing 85% of there money into their homes.
Something doesn’t add up.

#81 Nora Lenderby on 07.20.15 at 10:31 pm

#42 anotherstabbinginsaskatoon on 07.20.15 at 8:31 pm
It’s a helluva place to live for people that have money. It’s looking more like a open air prison/workcamp for the rest of us dregs. And the food sucks.

Hmm…doesn’t it depend on how you kill it and how you cook it?

I recommend that you find a good wife. You’ll live longer, be happier and will eat well.

#82 Scooter on 07.20.15 at 10:33 pm

eleven out of 10 folks on the street think it’s impossible for rates to go up
_____________________

Thanks Garth. Gems like this one are what keeps me coming back every day.

#83 No Canada, No on 07.20.15 at 10:41 pm

Actually people running Canada’s CB are not the only idiots out there, not at all.

Here, fresh from Bloomberg for Reserve Bank of Australia

RBA: HIGH HOUSE PRICES HARD FOR FIRST TIME BUYERS, BUT BOOSTS WEALTH OF OWNERS

BOOSTS WEALTH OF OWNERS, NO FFKING KIDDING!

Or this:
RBA: HOUSE PRICE GROWTH CONFINED TO SYDNEY AND MELBOURNE, APARTMENT PRICES RESTRAINED

Punchline:
RBA: FURTHER FALL IN A$ LIKELY, NECESSARY TO PROVIDE ASSISTANCE TO ECONOMY

Soo, yeah. Economies and rates.
They going to continue to create disbalances, bubbles an moral hazards. And Bank of Japan and ECB continue to print like there is no tomorrow cuz its theirs turn (80$ bln/mo prints Japan only).
Until morale improves. And then a blowout.

#84 Shawn on 07.20.15 at 10:47 pm

Why Oil is lower than before (but still pretty high)

#74 Bottoms_Up on 07.20.15 at 10:05 pm said:
———————————————–
Oil is cratering because of abundant supply, lead by Saudi Arabia pumping and Iran coming on-line. But yes, the future is in electric vehicles.

*******************************************
It may be that oil prices are down because the OPEC cartel is no longer capable of constraining supply in order to artificially boost the price as it had done for some 45 years.

In that case, yes it is because of abundant supply, But it may be that supply was potentially abundant for years but OPEC constrained supply to boost prices.

I understand that OPEC no longer even bothers to have production quotas for its members. It’s basically every country for itself to pump their brains out as the cartel lost the ability to enforce quotas on the members some time ago. For a while Saudi Arabia may have kept a thumb in a the dam by itself but eventually tired of being the only one to curtail production while all oil producers benefited.

It may just be that OPEC has been Alberta’s best friend for about 45 years.

Unless OPEC can get back to cooperatively curtailing oil prices then lower oil prices are here for a while.

That will be good for the world economy although not so great for Alberta.

#85 Ronaldo on 07.20.15 at 10:47 pm

#65 Shawn = re: CNR

Given that CN consumed 440 milion gallons of diesel in 2014, lower fuel prices would have contributed greatly to their bottom line. Fuel costs for railways is a very large part of their expenses.

#86 BlackDog on 07.20.15 at 10:49 pm

Ladies sign up for free at AshleyMadison. Or at least they used to unless things have changed recently. So I heard anyway, not that I would know this from personal experience.

#87 45north on 07.20.15 at 10:59 pm

But then again, folks on the street think it’s impossible for rates to go up, their houses to ever go down. The inflation of a single asset that most people own – their property – has been sufficient to mask the escalating risk that underlies our society. Last week’s bank cut did it again. What should have alarmed Canadians instead comforted them.

Poloz is going to shoot all his bullets and when they’re gone then housing will crash.

Victoria Real Estate Update: (from yesterday) Canada’s (bigger) bubble will deflate in an environment of rising rates.

He ( Victoria Real Estate Update ) makes the point that the US dropped the interest rate from 5% to 0% to defend the economy. Canada can only drop from .75%. ( now .50% ).

https://research.stlouisfed.org/fred2/graph/?id=FEDFUNDS

funny, information on the US drop is not secret, you can spend all day, all year reading about it. Here’s a clip:

The secondary market, it was Jabba the Hutt — ‘feed me, feed me,

http://www.publicintegrity.org/2009/05/06/5452/predatory-lending-decade-warnings

how bad could it get here ( in Canada )? I’m thinking real bad.

#88 Tom from Mississauga on 07.20.15 at 11:01 pm

Spoke to buddy on the Board of an oil fracker in Alberta, Sask and North Dakota the other week. He mentioned there are a huge pile of companies on the north side of the border who have yet to layoff employees and Acc’ts Receivable are massive and absolutely uncollectible. Would Poloz know about that?

#89 Lee on 07.20.15 at 11:02 pm

I see the next five years as a golden opportunity to load up on cheap Canadian growth etfs as they sink in price.

#90 Doug in London on 07.20.15 at 11:05 pm

Oh, so that’s who (or what) Ashley Madison is. Wow, I learn something new every time I read this blog.

#91 By the time I get to Phoenix on 07.20.15 at 11:07 pm

“And you thought Ashley Madison was all we had to be embarrassed about.”

Not no more…..

http://www.youtube.com/watch?v=mUg5p3BncuQ

#92 gut check on 07.20.15 at 11:09 pm

“#78 omg the original on 07.20.15 at 10:20 pm

So as amazed as you may be that Mr Poloz is not follow your gut feeling for what the economy needs, the BOCs actions make perfect sense from a macro economic/political perspective.”

The last two rate cuts, yes – they were pretty much trapped there. HOWEVER, the BoC’s behaviour in the preceding years when our economy was stronger was absolutely senseless. (unless of course they were trying to get us into a position ripe for exploitation which is where we are now. The IMF gang must be drooling)

We are now in the worst position possible: should the economy continue its downward spiral we have no more cuts to make. We cannot make any more emergency rate cuts to get us out of hot water.

so.. we’re screwed. It’s going to hurt. Carney was Goldman Sachs – he still is, over there in England. Serving us up to the vultures.

#93 45north on 07.20.15 at 11:10 pm

oh yeah Ashley Madison:

http://ottawacitizen.com/storyline/hackers-breach-cheating-site-ashley-madison-and-threaten-to-release-info-the-sites-1-canadian-user-base-ottawa

#94 Shawn on 07.20.15 at 11:11 pm

Canadian National Railway’s Earnings Performance:

#85 Ronaldo on 07.20.15 at 10:47 pm said:
#65 Shawn = re: CNR

Given that CN consumed 440 milion gallons of diesel in 2014, lower fuel prices would have contributed greatly to their bottom line. Fuel costs for railways is a very large part of their expenses.

*************************************
Agreed but a good part of the lower fuel bill is passed on to customers as a lower fuel surcharge but I agree that was part of the reason for the earnings increase.

Since we don’t really do individual stocks on this blog I was focusing more on what the car loadings tell about the economy.

#95 Yosemite Samuel on 07.20.15 at 11:12 pm

Let’s follow up on last week’s advice not to be a maple-licking, moose-riding, loonie-loving, beaver aficionado…Garth”

you forgot sap-sucking and yellow-bellied!

#96 Yosemite Samuel on 07.20.15 at 11:20 pm

“…everybody wants to move here from Guangdong or Chicago….”

Garth do not compare Chicago and Guandong, Ferris Bueller’s Day off could never have taken place in China….he would have been sent to a re-education gulag!

#97 Frank on 07.20.15 at 11:22 pm

You’re correct. I did exaggerate. The exact gain is 9.78%. — Garth

I just triple checked. Looks like it’s 2 against 1.
https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1437448731168&chddm=98532&chls=IntervalBasedLine&q=INDEXSP:.INX&ntsp=0&ei=ErqtVYn0EJH9etLCthg

So when is Canada a buying opportunity? Sure there’s a hole in the economy now but we’re a smart, hard working country. We’ll be back. The time to buy is before then.

#98 Hally Butt on 07.20.15 at 11:25 pm

It’s still a hulluva place to live, ….”

Just for the halibut, would you care to give 10 reasons why?

#99 Roblund Blantre on 07.20.15 at 11:28 pm

Shanghi Composite is up around 15% from the trough..the government stepped in to save the stock markets. If Canada’s Housing Market had a similar fate, would our government step in to do likewise?

Also, a rumour that a new trade deal would help bring down cheese prices. An interesting development.

And Finally,
Was at loblaws today..prices were still really good..wondering when inflation will kick in..

#100 betamax on 07.20.15 at 11:30 pm

#35 Ole Doberman: “the future is in the electric car market…?”

If everyone went electric, the power grid couldn’t support them. Oil prices dropped because of fracking.

#101 cramar on 07.20.15 at 11:32 pm

CBC National carried a story tonight that Albertans are maxing out credit card debt to survive and bankruptcies are rising. Makes you wonder what it will be like a couple years from now!

#102 Lisa Green on 07.20.15 at 11:36 pm

CBC’s Ontario Today radio broadcast, podcast as of July-20-2015,about the Ontario’s ORPP and blaming Harper for Canadians not using $280 billion of RRSP room and not saving enough for retirement. What a joke Ontario’s government and CBC.

They can force taking people’s money force retirement but you can legislate people to save and have good financial habits and discipline. Financial illiteracy and no financial education is the true culprit.

It is the same old cradle to grave, nanny state, big brother control every aspect of Ontario residents in this case. People are so clueless. It is truly sad.

I know alot of people that waste money everyday from smoking to buying $5 coffees, not to mention borrowing on credit cards at 28.8% department store credit cards, gas credit cards etc.

#103 Lisa Green on 07.20.15 at 11:41 pm

Unused TFSA room is another wrong financial move that many Canadians are doing too.

Maxing out RRSP’s, TFSA’s, RESP’s, etc. is the way to live much better in retirement and for future needs and wants.

#104 rosholt on 07.20.15 at 11:52 pm

What’s generally the #1 rule in investing?

A: Don’t invest in something you don’t understand!

Yet you all don’t have a clue what preferreds are and you want to jump into them.

#105 BlackDog on 07.20.15 at 11:54 pm

To any of you dogs who are really freaking out over the AM hack, maybe this will work. Tell your spouse you lost your wallet, ASAP.

#106 Nosty, etc. on 07.20.15 at 11:57 pm

SWL1976 — A new take on Agenda 21. To go with that, possibly Artificial Intelligence slowly replaces the workforce, along with drones and computer technology. It’s not just Greece.

Spectacle — Copy and paste the url, possibly into a hyperlink.

#107 Barry in Pickering on 07.21.15 at 12:06 am

I think that rate reset pref shares are headed lower this year. Many of the rate resets will reset this year to lower yields – and this will send the shares lower.

#108 Help Me prepare for my whole life to end on 07.21.15 at 12:14 am

Ashley Madison is hacked, my life is about to end. I’m sitting here sweating and shaking. Even if the site goes down like the hackers want, I’m sure they will release the data anyway. The hackers are in it for shits and giggles, they have no reason to keep a promise. It’s not like they’re a COMPANY that could get SUED for LYING to us (F-you AM!!!)

I guess I just want a sympathetic audience one last time before everyone in my life turns on me and vilifies me. My family is very religious, they won’t accept me after this, they’ll get brownie points with their church friends to cast me out in the most public way possible.

My friends are all my wife’s friends; they’re going to take her side. My kids are old enough to understand what’s going on.

How is everyone coping?? I’m about to do something drastic. I just want to drink and drink but I can’t do that as wife will wonder what is up, but I can’t survive this level of anxiety either.

Titanic is going down let’s hold hands

#109 Vancouverboy on 07.21.15 at 12:33 am

I have a cousin who we made fun of as kids because he was so incredibly stupid. He barely got through university. He failed a couple of times and was on probation. He got a job with a province and over the next couple of decades became the number one civil servant. He controlled the whole province which I won’t name because he would be furious with this posting. He is completely incapable of running a lemonade stand. My brother married a girl whose father was the comtroller of Telus. I was doing a business venture with my brother and he thought he should show our financial projections to his father in law. To his shock and dismay his father in law said he couldn’t read or understand a financial statement. Correct me if I am wrong Garth but Mr. Harper has never had an adult full time job outside of politics. I don’t know about Mr. Poloz’s background but I assume with my knowledge that he is also brain dead. I know Harper is an economist which is now known as the dismal science. The Economist magazine did a long term study involving major CEO ‘s, respected economists and as comic relief included London garbage men. They all had to predict interest rates, unemployment, etc. Guess what….the garbage men were far and away the winners. We put in power yes men who have no opinions and go with the flow. They rise to the top and then we wonder why the country is so messed up. They have no clue what they are doing. All Harper knows how to do is keep inflating real estate. The peasants are happy as their homes become massive ATM machines. Once real estate stars to fall we will really see what a complete disaster the mindless and incompetent Mr. Harper has done. I worry for our county and the ignorant masses who hug and cherish their homes and know everything will always be wonderful. Owning real estate in Canada is virtually a religion. We are a complete train wreck.

#110 kommykim on 07.21.15 at 12:55 am

RE: #18 An old bird… on 07.20.15 at 7:04 pm
Apparently, from information on BCE’s website, regarding First Preferred Shares AM/AN, there is an automatic conversion ‘feature’ which I just can’t get my head around from trying to read the prospectus. Would there, perhaps, be a kindly, knowledgeable person out there that can tell me whether I’ll get my initial money back as suggested by previous broker and what I would have to do to ensure that outcome?

Well, it looks like you’ll be able to convert your 5 year reset shares to a floating rate type on March 31, 2016 if you want to. The catch is that a total of 1 million shares (can be multiple investors) must opt for the conversion for it to be allowed by BCE. If not, they automatically stay/revert as a new 5 year reset until March 31, 2021.
As for getting your capital back, that depends on what the market price is when you sell or if BCE ever decides to call them and what you paid for them.
Personally, I’d hang on to them and see where interest rates go in 2016 and decide whether to go floating or not.

#111 sam on 07.21.15 at 1:00 am

Just think, for people with U.S bucks Canadian real estate is at a 35% discount from three years ago. No wonder prices are soaring. Real estate for Canadians is getting really expensive, but for foreigners it’s a real bargain!

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

So you think they ignore GREAT places like Atlanta, Florida , Las Vegas, Texas where properties sell for 120k + and buy your shitty expensive houses ?

Idiot.

#112 Brian on 07.21.15 at 1:30 am

Great article on yvr

http://www.theglobeandmail.com/report-on-business/rob-commentary/vancouver-is-mortgaging-its-future-for-a-market-thats-anything-but-free/article25558615/

#113 Steve French on 07.21.15 at 4:26 am

How many of you blog dogs getting a bit nervous about the Ashley Madson guest list leakage?

Might be a few Canadian home sales coming up based upon Ashley Madison-inspired divorces…

Not that I would wish ill upon anyone. I’m just glad I had the general good sense not to sign up to that site (although I guess the thought has crossed my mind).

Happy wife, happy life.

(mixed with a bit of “there but for the grace of dog go I….” relief…)

#114 Londoner on 07.21.15 at 6:50 am

#18 An old bird…

Re: BCE.PR.M

This series of preferreds has no fixed maturity date. BCE.PR.M is paying a fixed rate of 4.85%/yr until March 31, 2016. At this time, and every 5 yrs after, BCE has the option to either redeem the shares at $25 or let them continue for another 5yrs paying a fixed rate equal to a spread of 209 bps over the 5yr CAD bond rate. At the end of each fixed rate period you will have the option to convert these preferred shares into another floating quarterly rate preferred series (“AN”). Finally, BCE has the option to automatically convert all AM series shares into the new floating rate series without existing shareholder’s consent in certain scenarios.

You, as the holder, do not have the option to redeem the shares.

It’s difficult to summarize all the conditions of the conversion in this comments space so probably best you consult an advisor if you’re having difficulty understanding the prospectus.

#115 LowRent of Arabia on 07.21.15 at 6:51 am

DISENFRANCHISED today!

All expats living outside of Canada for more than five years just lost the right to vote.

Apparently we don’t have to live with the consequences of our votes so hence we are not entitled to vote…tell that to the Canadian Family courts who try to collect from expats and so they should…but that gives us the right to want a say in Federal lawmaking.

How about 6 year olds? They are getting their futures screwed as we speak…by federal court logic they should be allowed to vote because they will live with the consequences. But no…sit there quietly, don’t speak while the adults are talking ( I mean stealing your future), we know what’s best for you.

I am glad I lost my vote today. I will take foreign denominated income over the choice between a bearded socialist, a flaky drama teacher and a washed up pseudo con anyday. My vote was worthless…even Bernardo and Holmolka get to vote…can’t be worth much.

#116 Londoner on 07.21.15 at 7:10 am

#54 Smoking Man

They only offered you 140/hr in cali? I thought you could bootstrap rate curves and calculate xccy swap discounts. You could earn a lot more here in London. But, then again, you have to put with British food and weather. Oh well, never mind.

#117 mikef on 07.21.15 at 7:18 am

Ummm…Garth. You realize that Quebecor is bidding for an NHL team. They announced it this morning. That is really ALL you should be writing about today.

——————————————————

Will never happen

#1 Too many teams in the Eastern Conference
#2 A separatist bidding for an NHL team.
Better off Peladeau joined al-qaida.
#3 Little corporate support to buy luxury boxes
and too small a TV market.
#4 Les Canadiens de Montreal have little appetite
to share their market (Quebec).
I can just hear now Geoffrey Molson reminding
Commish Bettman that les Canadiens & les Maple
Leafs prop up the league through revenue sharing,
which is why you’ll never see an Nhl team in Hamilton,
Markham or anywhere else in the GTA either.

#118 David McDonald on 07.21.15 at 7:30 am

I remember 20% interest rates in the early eighties. I remember seeing husbands comforting weeping wives in mortgage brokers’ offices. They didn’t qualify for a renewal at the higher rates and would lose their homes. It was decimation of those unlucky few whose mortgage came due at the wrong time. It was deliberate government policy to stop inflation.

My point is that when push comes to shove you are on your own. The government can’t help you. Those who are over leveraged in housing will be hurt when rates rise. They will have to pick themselves up like those Canadians a generation ago and like the Americans seven years ago.

#119 Smoking Man on 07.21.15 at 7:35 am

#113 Steve French on 07.21.15 at 4:26 am
How many of you blog dogs getting a bit nervous about the Ashley Madson guest list leakage?

Might be a few Canadian home sales coming up based upon Ashley Madison-inspired divorces…

Not that I would wish ill upon anyone. I’m just glad I had the general good sense not to sign up to that site (although I guess the thought has crossed my mind).

Happy wife, happy life.

(mixed with a bit of “there but for the grace of dog go I….” relief…)
……..

If your that way inclined, short term rentals, paid to go away. No database, no credit cards, no one stalking you and screwing up your life.

Who in their right mind ever get involved with AM. Or anything like it.

And they all thought they were getting it for free… Without cost… Ha.

Humans, they never look at the big picture.

#120 xplain on 07.21.15 at 7:36 am

Questions:

Preferred etf’s have dropped in value 17+% over 2 years yet their yeild has not changed substantially in that period. What other reason could there be besides some preffereds resetting at lower rates? Why wouldn’t that trend continue in the future?

The commodities charts are also falling and you say that it is a disaster. But preferreds are falling and you say it’s an oportunity. Why?

See Sunday’s post. — Garth

#121 pbrasseur on 07.21.15 at 8:19 am

«Brain drain 2.0»

You got that right Smoking man!

You can have housing booms, commodities boom, oil booms, etc… but ultimately economies grow on smarts and innovation and you need capital to finance innovation and hire the best of the best. So when you waste your money on consumption or when your capital loses value as the CAD descends don’t expect miracles.

Canada is a great place to live, it is vast peaceful and pretty, it is also another mediocre socialist nation that still don’t get what’s coming!

I put my money where my mouth is, never been more glad I did.

#122 maxx on 07.21.15 at 8:38 am

#27 Ronaldo on 07.20.15 at 7:42 pm

“So, are you’re saying that with our dollar down 35% that they can now buy a 1 million dollar shack in Vancouver or Toronto for $750,000 U.S. when a comparable house in the U.S. would likely be around $120,000.”

Exactly- why on earth would they buy at the top of the slide? Only stupid Canucks do that.

#123 old gringo on 07.21.15 at 9:17 am

Re-Help Me prepare for my whole life to end .

Before you blow yourself up, better wait to see if your wife’s name is in the Ashley Madison list.
She may be shaking in her boots as well!
C’est la vie

#124 Axehead on 07.21.15 at 9:40 am

#44 POS

Your handle reflects the quality of your post. Get a job, get a business, become an entreprenuer and contribute to society instead of whining on public sites.

#125 BlackDog on 07.21.15 at 9:45 am

@SmokingMan #119,

I heard that one dude got so nervous about the AM leak that he fessed up to being on the site before even being caught.

His spouse has been looking for advice on reddit as to whether or not to believe the guy’s story. Apparently he told her that he signed up BEFORE they were married. Yeah, right. What an idiot. Could he not have waited to defend himself at least until after he got caught? Now he is screwed – both ways. The comments the wife received on Reddit have probably convinced her by now that the guy panicked and pre-CONfessed up a lie. LOL. This stuff is too funny. Except for the part about families potentially getting broken up.

#126 NoName on 07.21.15 at 10:02 am

#97 Frank

1yreturn return + 1 year of distribution + drip
7.6+2+drip=10

#127 Courage and Poo on 07.21.15 at 10:27 am

China will reveal its gold holdings incrementally. And the first increment was over 50%! They’re bid for a reserve currency will depend in part on their holdings. Besides, the first update on their holdings since 2009 happened during a market rout. Coincidence, I think not. They play with their numbers, just like everyone else does. Billions around the world like gold, doesn’t have to make sense, but its the reality. At the end of the day, sovereign nations will never turn down gold to settle their accounts.

China will never have a reserve currency. No country of consequence will ever have a gold-based money supply. Get over it. — Garth

#128 An old bird... on 07.21.15 at 10:32 am

#110 KommieKim and #114 Londoner

Thank you both for taking the time to respond. I sincerely appreciate it.

Life Lesson#3249 (and counting)…don’t invest in anything you don’t understand.

For any of you still back at Life Lesson 200 or so, take heed.

Thanks again…

#129 Llewelyn on 07.21.15 at 10:48 am

I am shocked a big international company like Toshiba circulated financial statements full of porkies.

It is a good thing the United States, Canada, China and Europe have strong regulations that stop their executives from equivocating. There is nothing like a good wrist slapping or fine to discourage dishonesty.

In a world that has become ‘obsessed’ with corporate earnings and the escalating value of stocks it only makes sense to peek behind the corporate curtains every now and then.

I can hear all the cheerleaders reciting ‘bound to be a few bad apples in the barrel’ or ‘we have improved regulations since the last time’ or ‘can’t happen in North America’.

Bad apples rob banks for $1,000 so I think we have some idea what they might get up to when a $1,000,000 bonus is on the line.

My point is that corporate executives around the world have a vested interest in presenting information in the best light possible. Retail investors buy a stock or an ETF because they are confident that their investment will increase in value. Confidence is seldom based on reality but on a perception of reality at a point in time. Toshiba shareholders – not so confident today.

We are being told the Canadian economy is in real trouble and to reduce weighting in Canadian equities. At the same time as Canadian equities are being dumped by retail investors the interest rate for long-term Canadian bonds is at all time low with no shortage of international customers.

Why would institutional investors continue to buy long-term bonds issued by Canada at 2.0% when they can purchase a long-term bond from the paragon of economic growth for 3.0%?

Is no one the slightest bit curious why international investors seem so confident in the future of Canada while Canadian citizens are being encouraged to book passage on the USS Pinocchio or the ROCS Shuo Huang Jer.

We are a relatively modest economy compared to our big neighbour but we continue to have considerable potential for economic growth. After resting on our commodity based laurels for the past 25 years it is time to shift gears and examine where Canada has an advantage and to find ways to exploit our advantages around the world.

Advantage number one most large Canadian companies are prepared to invest our future and are looking for support from our political leaders. It is definitely time for a new paradigm to emerge from the ‘asses’.

#130 Blair on 07.21.15 at 10:49 am

Anyone think buying preferred ETF for my 7 month child’s RESP is a wise choice? I just deposited 1200 and its sitting in cash

Thinking maybe 60% US/World, 40% preferred

Thoughts?

#131 The American on 07.21.15 at 10:53 am

Henry, now why would Anericans buy in Canada, even at a 35% reduction when:

1) Americans can purchase homes, whether primary or secondary, in far better areas and weather conditions right here in the U.S.
2) Americans can purchase homes in the U.S., forgoing negative tax implications associated with buying and selling property in Canada. Seriously, do you have any idea how long the Canadian government holds proceeds of gains from real estate? It’s pathetic. At least six months. I have yet to meet an American over the past five years who has had a different experience. In the U.S., gains of proceeds are released instantly at time of closing through escrow.
3) Americans know actual prices on real estate in Canada are going to come WAY down over the next several years, even in consideration of the discount associated with exchange rate
4) Americans can already buy real estate at 50% of the price in the U.S. in areas where there is this thing I the sky called the “sun.” It’s a marvelous, celestial component that provides things like warmth and vitamin D.

Face it, Americans aren’t buying jack shit in Canada. If they are, prove it with actual numbers and statistical data.

#132 calgary on 07.21.15 at 10:59 am

so who gained from USA RE bailout?
US debt sure went from say 4T to 16T so somebody made 12T.
any first or second hand knowledge of whether folks who could not pay up got bailed out i.e. principal reduced (if stayed) or losses reduced (if sold)?
i am worried that all the fools would be bailed out using my money.
if so is not it better to get bailed out myself too so that atleast i get a piece of my own money back!

#133 Smoking Man on 07.21.15 at 11:00 am

#116 Londoner on 07.21.15 at 7:10 am
#54 Smoking Man

They only offered you 140/hr in cali? I thought you could bootstrap rate curves and calculate xccy swap discounts. You could earn a lot more here in London. But, then again, you have to put with British food and weather. Oh well, never mind.
….

Weather is a show stopper.

Can do it all with my eyes shut, hungover and stoned while on acid. Been doing it a long time. Code smithing that is.

But I have a voice in my head calling, Smoky, oh Smoky, write Fiction you old deranged bastard, write Fiction..

I’m in a transition faze of my life, from the diabolical math mind bootstraper to the chasing UFOs and writing about it.

Call it a casualty of to many years on a trade floor.

#134 Smoking Man on 07.21.15 at 11:08 am

#125 BlackDog on 07.21.15 at 9:45 am
@SmokingMan #119,

I heard that one dude got so nervous about the AM leak that he fessed up to being on the site before even being caught.

His spouse has been looking for advice on reddit as to whether or not to believe the guy’s story. Apparently he told her that he signed up BEFORE they were married. Yeah, right. What an idiot. Could he not have waited to defend himself at least until after he got caught? Now he is screwed – both ways. The comments the wife received on Reddit have probably convinced her by now that the guy panicked and pre-CONfessed up a lie. LOL. This stuff is too funny. Except for the part about families potentially getting broken up.
…….

What an idiot, let’s face it, news paper won’t print the names, or TV, or radio. It was an inside job, authority probably knows who done it, arrests shortly, list will never see the light of day.

But interesting enough, the message form the hackers. Men will pay…..

Ha, femanazis for sure.

#135 Josh in Calgary on 07.21.15 at 11:29 am

#84 Shawn on 07.20.15 at 10:47 pm,
You’re spot on and one of the few that “gets it”. People keep blaming OPEC and the Saudi’s for this oil price collapse, but it has every thing to do with the oil shale boom in the US. I’ve even heard a friend (university professor by the way) claim what they’re doing is anti-freemarket. No everything up until a few years ago was anti-free market. This is the first time in a generation we’re actually seeing the markets determine the price of oil.

The Saudis were always content to play the long game by keeping oil at a relatively high price year after year. The difference this time around is A) shale oil is competative at the higher price and B) they see that electric cars and alternative energy are going to be the limiting price on oil with in a decade or two. Now the game is to sell as much as possible before that happens.

As for the effect on Alberta’s economy it will be painful for a few years, but eventually we will settle into a nice steady state, where the oil patch chugs along making a decent amount of money but significant growth is a thing of the past. Not necessarily the end of the world because rapid growth has its own problems.

#136 Bottoms_Up on 07.21.15 at 11:42 am

#130 Blair on 07.21.15 at 10:49 am
————————————————-
It is such a small sum, it doesn’t really matter. Buy an ETF that is currently ‘on sale’. Also, I would wait for the 20% top-up from the government, but you may miss out on the sale. The more money you accumulate in the account, the more you’ll want to be diversified.

#137 Sheane Wallace on 07.21.15 at 11:49 am

#130 Blair on 07.21.15 at 10:49 am
Anyone think buying preferred ETF for my 7 month child’s RESP is a wise choice? I just deposited 1200 and its sitting in cash

Thinking maybe 60% US/World, 40% preferred

Thoughts?

———————-
My RESP plan is called: move to Europe. So I am collapsing everything in the RESP accounts (had good performance, will pay some taxes).

There is no way I am paying american university fees in a country with European taxes, if I am paying high taxes better move to Europe, where universities are either very cheap or free.

Oxford and Cambridge cheaper than McMaster! Come on!

#138 tuericentrum on 07.21.15 at 11:54 am

Hi Garth,

As you probably know, or suspected, the commodities chart looks very similar to a chart of our dollar (CAD) vs the US dollar (USD): http://www.google.com/finance?q=cadusd&ei=BmquVdXfD8u2iAKT4KWQDQ

TC

#139 Courage and Poo on 07.21.15 at 12:15 pm

China will never have a reserve currency. No country of consequence will ever have a gold-based money supply. Get over it. — Garth

Why would China’s currency not climb the ranks to equal footing with the US, be it reserve or part of a global basket. The money supply will not be gold-based, but the gold opens the door to higher status. Otherwise, the US wouldn’t have over 8000 tons of it picking up dust. Otherwise the Chinese would not time their gold reporting with market crashes. Otherwise the Modi government wouldn’t be considering defiling their temples for it.

Do you not have a difference of opinion for gold with respect to an individual as opposed to a country?

#140 johnk on 07.21.15 at 12:33 pm

China has a command economy? Someone actually said that in an earlier post. Too many Batman comics, dude.

#141 Vermithrax on 07.21.15 at 12:55 pm

Really hope Gath’s gonna tell us when to buy back into Canada? When it’s a steal and expected to recover? All the financial advice I’ve followed here so far has been spot on. :)

#142 Blacksheep on 07.21.15 at 1:14 pm

American # 131,

“Americans can already buy real estate at 50% of the price in the U.S. in areas where there is this thing I the sky called the “sun.” It’s a marvelous, celestial component that provides things like warmth and vitamin D.”
—————————————————
Your reasoning is totally valid.

Who the hell wants to live in Vancouver or Toronto, if they could live in So Cal or New York ?

There in lies the dilemma for Canadians seeking, those types of living environments. For multiple reasons, many Canadians are unable to just relocate to their preferred Merican location.

So where is a poor beaver riding Canuck supposed to go?……Van & T.O., cause it’s as close as their gonna get, north of the 49 th.

Is anybody still wondering why these cities RE values are so damn high.

#143 JimH on 07.21.15 at 1:35 pm

#140 johnk
Yes, China (People’s Republic of) was referred to as having a planned or “command” economy. This is still correct, as recent events have clearly demonstrated.

#144 JimH on 07.21.15 at 1:55 pm

#139 Courage and Poo
“Why would China’s currency not climb the ranks to equal footing with the US, be it reserve or part of a global basket?”
=========================
Well, one way to look at this question is to ask , “What is it about the US Greenback that enables it to continue on as the world’s reserve currency?”
Certainly, the strength, resilience and flexibility of the US economy is a major factor: but obviously, the world sees the US currency as one deserving of trust and confidence.
Will this advantageous status continue forever? Of course not. After all, Britain, France, Spain, the Netherlands and even Portugal had their time as holders of global reserve currencies.
Garth is correct. China has a very long way to go before the world will have the same confidence in the Yuan that it currently awards the Greenback.

#145 TurnerNation on 07.21.15 at 2:26 pm

Chilling vision for the future/repeat of past regimes:

– Cars will be for elite party members. Workers get bicycles. Carbon permits and fuel taxes and lane tolls prevent otherwise.
– some areas will be rationed without water, but collecting rainwater will be illegal without a water use permit.
– some areas will go hungry, but fishing and hunting will be deemed an illegality of environmental protection.
– some will go without heat, but open air burning will be outlawed due to climate change [sic].
– Well paid loyal and armed state agents and block captains will be watching at all times.
– seizure of assets will be expanded to include Climate Crimes.

Communism part II

#146 jess on 07.21.15 at 2:33 pm

Fatal Extraction: Australian Mining’s Damaging Push Into Africa
http://www.icij.org/project/fatal-extraction
http://projects.icij.org/fatalextraction/
nteractive graphic
Explore the Data: Where Australian Mining Leaves Its Mark
By Cécile Schilis-Gallego Friday, July 10, 2015 – 10:00am
There were more than 150 publicly traded Australian mining companies present in 33 African nations at the end of 2014, some of them linked to alleged injustices that would never be tolerated in better-regulated nations.

#147 Courage and Poo on 07.21.15 at 2:35 pm

What is it about the US Greenback that enables it to continue on as the world’s reserve currency?

The military dominance of the US gives it the world reserve currency status. No one can compete with the Empire. Except maybe…

https://upload.wikimedia.org/wikipedia/commons/a/ac/BRICS_heads_of_state_and_government_hold_hands_ahead_of_the_2014_G-20_summit_in_Brisbane%2C_Australia_%28Agencia_Brasil%29.jpg

#148 Sheane Wallace on 07.21.15 at 2:44 pm

China will never have a reserve currency. No country of consequence will ever have a gold-based money supply. Get over it. — Garth

I see China’s currency more and more used within BRICS.

It won’t achieve ‘world reserve currency’ status for a while.

But don’t underestimate the strength of the Chinese economy, they can easily become 2.5-3.5 times the size of the US economy in 10-15 years, when they boost their internal consumption (and these is a lot of room to grow).

US dollar is strong due to multiple reasons very little of it is the strength of the US economy, on the contrary, countries are struggling due to the excessive debts issued in dollars, that require to buy dollars to pay debt.
It is an old trick to issue debt in currency you control and then stop the loans, this would drive demand for the currency you issue.

Unless other countries stop trading in your currency and this is exactly what BRICS is doing.

So give it 3-5 years and we will see what the monetary system will look like,

Gaze around. That’s how it will look. — Garth

#149 Courage and Poo on 07.21.15 at 2:53 pm

Gaze around. That’s how it will look. — Garth

Financial Products are accelerating change, 5 years ago, a realization of the New Development Bank was a dream. Now it is here.

#150 Sheane Wallace on 07.21.15 at 2:53 pm

Gaze around. That’s how it will look. — Garth

we will see. don’t get me wrong, I am in USD and not in a way thinking of shorting it short term.

But in long run and with the way US is confronting China and Russia… I don’t know. Without the reserve status accepted by all countries US economy is vulnerable.

If they compromise there could be multiple reserve currencies (don’t exclude the Euro here, it is very stable), USD, Yuan, if not, I don’t know, US could be in big trouble.

#151 Sheane Wallace on 07.21.15 at 2:58 pm

#147 Courage and Poo
——————-
US can not take on China and Russia at the same time. And China will not abandon Russia. And Russia will not bend.

Somebody in US has to get their act together.
Things are not simple as they look. ASIA is very ,very deep. Take it likely at your own expense.

#152 Shawn on 07.21.15 at 2:59 pm

Smarter Blog Dogs

#135 Josh in Calgary on 07.21.15 at 11:29 am said:

#84 Shawn on 07.20.15 at 10:47 pm,
You’re spot on and one of the few that “gets it”.

******************************************
Josh in Calgary is clearly a man of intelligence who should be listened to.

#153 Sheane Wallace on 07.21.15 at 3:02 pm

lightly

#154 debtified on 07.21.15 at 3:44 pm

$140/hr Smokie? That’s it?!

I still remember vividly typing $180 to $250 on my invoices and that was ten years ago – with living expenses (transportation, meals & accommodation) charged to the expense account. And I am not nearly as good as you are.

Good thing you declined. You deserve more for your awesome skills. ;)

But you are right, you are even more awesome with fiction! You seem to have having this problem of being shortchanged by reality a lot. I will buy your book.

#155 Smoking Man on 07.21.15 at 4:56 pm

#154 debtified on 07.21.15 at 3:44 pm
$140/hr Smokie? That’s it?!

I still remember vividly typing $180 to $250 on my invoices and that was ten years ago – with living expenses (transportation, meals & accommodation) charged to the expense account. And I am not nearly as good as you are.

Good thing you declined. You deserve more for your awesome skills. ;)

But you are right, you are even more awesome with fiction! You seem to have having this problem of being shortchanged by reality a lot. I will buy your book.
…….

I do ok for an aging bald dude with rotten teech, stench of cigarettes, and the previous nights drink up odder ozzing out of my pours.

Walks around all day with a stir stick hanging out of my mouth, I use it as a plak chizzle..

Who dident bill 250 ten years ago.

#156 jess on 07.21.15 at 5:11 pm

leveraged ships/offshore greeks
The German ship financing guarantee
http://ec.europa.eu/competition/publications/cpn/2004_2_105.pdf
2006
..”Now there are retail investors without industry knowledge who for tax reasons create a supply of capital and vessels which is not necessarily related to the demand.”
http://www.nytimes.com/2006/10/25/business/worldbusiness/25iht-transcol26.3287158.html?_r=0
http://www.kravets.de/kk-report/2014/10/14/rise-and-fall-of-one-ship-kg-financing-in-germany
http://www.bloomberg.com/news/articles/2012-04-24/german-shipping-funds-die-as-inv
http://www.spiegel.de/international/europe/greek-shipowners-spend-freely-as-country-suffers-a-975754.html

============
Toshiba boss quits over £780m accounting scandal

Hisao Tanaka stands down at Japanese electronics firm as finance minister warns the scandal risks damaging market’s trust in country
Toshiba overstated its operating profits over several years in accounting irregularities involving its top management, an independent panel of accountants and lawyers said on Monday
http://www.theguardian.com/world/2015/jul/21/toshiba-boss-quits-hisao-tanaka-accounting-scandal

#157 11 out of 10 or 10 out of 11? on 07.21.15 at 5:53 pm

“Eleven out of 10 folks in the street”
Come on garth, surely you do believe 1 out of every 10 folks in the street know better? If so, you should change the above to “ten out of 11 folks on the street”

:-)

#158 Nagraj on 07.21.15 at 6:11 pm

Back to GT’s “Corporate profits are weak” and his memorable chart of Final Demand; BNN ‘s Frances Horodelski’s chase note today had this headline, “Economic headwinds taking a toll on Corporate Canada”.

(Horodelski is in the Turner camp re the BoC, and I just must add that the boys and girls who used to put together the Eaton’s Catalogue now work on set design and costume for BNN.)

Horodelski is not responsible for the aforementioned headline, so permit me to rewrite the typically stupid “Economic headwinds taking a toll on Corporate Canada”: “Bay Streeters Barfin All Over The Place”

The Dinglenuts Ever More Terrified Tribune adds to the script with “Canadian wholesale sales drop 1% in May” (oh no! not that!) and “As oil prices plummet, Calgary reaches record levels of unleased office space” (oh plummet). [Guess somebody clicked on Richter’s 19/7 piece on Calvary’s offices’ languishing potted plants.]

Yes, today is JUNK FOOD DAY and every day is JUNK LANGUAGE DAY in Canadian MSM (smells like 1928). Why don’t you people help Corporate Canada out a bit, eh? Eat some junk food, lease some office space in Calvary, buy a Blackberry and ride a train to someplace like scenic Moose Jaw. Use yer credit cards. Buy sumpin at Canadian Tire. Anything.

#159 chapter 9 on 07.21.15 at 6:17 pm

#115 Low rent of Arabia

My vote was worthless..even Bernado and Holmolka get to vote… can’t be worth much.

To deny inmates the right to vote is to lose an important means of teaching them democratic values and social responsibility—Supreme Court of Canada

Sorry, I just don’t buy into this load of crap. What about the victims are they learning about values and social responsibility. No, they are dead or spending the rest of their lives picking up the pieces of the emotional train wreck left by being brutalized by this animal. God forbid anybody speaking out in the media because now you will be labelled a “racist”

#160 Andrii on 07.21.15 at 6:19 pm

151 Sheane Wallace US can not take on China and Russia at the same time. And China will not abandon Russia. And Russia will not bend
Only ask USSR , tovarishch .