Pooched

CAT PIZZA modified copy

History will show it wasn’t foreign buyers who pushed real estate values into the nutty zone in places like YVR, but the fact most people believed it to be. So they panic bought, forcing prices up. When almost every house was ‘worth’ more than a million bucks, they had all the proof they needed. Damn Chinese.

But relax. This post is not about HAM. It’s about perception. This is what moves real estate. As I posted here two days ago, a housing orgy even more intense than the one we have today raged in the late 1980s – when there was no 5% down, and mortgages cost 12%. But people perceived that high inflation would drive home prices ever-higher. So they panic bought. Big mistake.

Yesterday we looked at what actually causes a housing correction (which is often a slow-motion crash). It need not be a spike in interest rates, a terrorist attack, an earthquake or Kim Kardashian finding morality. Events that apocalyptic are rare. But worry is ever-present, and when it quietly augments, real estate can be seriously sideswiped.

We’re entering that space, it seems. On Thursday there was more to fret over. Loblaws shuttering dozens of stores just months after announcing a big expansion. More losses for the Canadian stock market. Oil now down to just $48 or 25% less than it was three months ago. The dollar at 76 and a half cents, promising a boatload of higher consumer prices. And who can forget the last holy-shit moment from the Canadian Payroll Association?

These guys have polled people for six years, and things are nasty. A hefty 51% of all working stiffs said in the last survey “I would find it difficult to meet my financial obligations if my paycheque was delayed by a single week.” Half of everybody. Only one week. Ouch. What does this tell us when 70% have houses and epic mortgages?

Of course. They own stuff. But no money.

This is borne out by the fact the payrollers also discovered 26% of people could not come up with just $2,000 over the course of an entire month if an emergency cropped up. And everybody seems equally hooped. Almost 80% of mature people say they’ll probably have to delay retirement while 63% of Millennials say they’re living paycheque-to-paycheque.

This last point – financially pooched young people – is an especially big deal for the real estate market. Already the cohort is stressed by educational debt, a crappy job market, over-qualification, falling compensation, competition and houses they want but can’t afford. They’re the ones who started the Occupy movement, moan on Twitter (#dontHave1Million) and float through Tom Mulcair’s sweetest dreams. They don’t hate the Chinese. They hate the Boomers. Conservatives. Banks. Anyone with a Harley or a Hummer. (Gulp.)

They’re also the fuel that keeps the real estate fires burning.

Housing consultant Ross Kay calls it the “equity pyramid” – first timers willing to swallow debt in order to unlock the equity of the people they buy from, who then go on to buy something fancier, unlocking the equity of others who do the same. “The fact is that housing bubbles only pop when first time buyers stop buying,” he says.

Here’s an example from Toronto, where the average house price (detached, condos, townhomes etc) is now $624,000:

  • The top 11% of sales in the GTA averaged $1,500,000
  • The next ladder saw 22% of sales take place at an average $820,000
  • The next lower step saw 44% of sales take place at an average $470,000
  • On the bottom rung were 22% of the buyers who paid an average of $276,000

Says Kay: “The entire pyramid collapses if those paying $276,000 on the bottom rung stop buying resale homes – whether it’s rising interest rates or employment for those most at risk of being impacted by any changes in the economy. When they stop buying the market corrects.”

Well, let’s go back to perceptions. What people believe to be true is more powerful than the truth. This is why investors, not markets, are the ones who create risk. They stampede into rising assets driving prices to unrealistic levels. Then they stampede out when they smell fear, accelerating price declines.

This is why 51% of us couldn’t last seven days without a paycheque. We’re fully engaged in a single-asset strategy that has sapped our financial resources, soaked up our cash, saddled us with long-term debt and left us unbelievably vulnerable. Now, as the economy turns, this looks like a really bad idea.

Sigh. I think we need to talk about puppies tomorrow. Who’s in?

178 comments ↓

#1 haha 1st on 07.23.15 at 6:29 pm

1st hahahahaha

#2 Brad on 07.23.15 at 6:30 pm

Puppies? Yes, please! Could we reserve a little time to talk about kittens as well?

#3 Mr. Monday Night on 07.23.15 at 6:33 pm

Ya, it’s been a rough week since Harperpuppet cut the overnight rate. Could stand some cheering up…let’s talk puppies!

#4 Fausto on 07.23.15 at 6:33 pm

Fausto has 2 townhouses in ancaster and 3 houses in hamilton and a new build just purchased in ancaster. Fausto also has tangerine mutual funds. Fausto is doing just fine

#5 PuppyPost on 07.23.15 at 6:34 pm

Tomorrow’s post should be nothing but puppies to put us in a good mood for the weekend. No real estate, no economic info, no financial info; nothing to do with money whatsoever.

You can go back to depressing us on Sunday.

Happy Thursday!

#6 cad to usd @ PAR on 07.23.15 at 6:35 pm

zenbanx offer cad to usd @par
any1 interested for extra $10 referal codes let me know
http://zenbanx.ca/

#7 Chris in Nanaimo on 07.23.15 at 6:36 pm

It’s amazing how many different ways Garth can say essentially the same thing….and still be entertaining!

Highlight of my sad day reading this pathetic blog. But at least I take heart that I’m not one of the 51%.

#8 Smartalox on 07.23.15 at 6:38 pm

Surely if HAM was ever a ‘thing’, we would have seen the effects of the Tories’ cancelling the immigrant investor visa program by now: http://www.theglobeandmail.com/news/national/canada-gets-just-six-applicants-for-millionaire-immigration-program/article25645653/?service=mobile

#9 mitzerboy aka queencity kid on 07.23.15 at 6:39 pm

im in on the puppy thingy

#10 tom on 07.23.15 at 6:40 pm

Who.wants.to talk.about Pluto?

#11 Robert Johnson on 07.23.15 at 6:40 pm

Garth, I appreciate your point, but I looked into these CPA surveys. In the 2011 survey, the number was 57%; in 2012 it was 47%, and last year it was the 51% that you cited. In other words, statistically speaking, there is probably no meaningful difference between now and years past in terms of how many people would find it difficult if they missed a paycheque.

Many people have been financially struggling for years in Canada, but the situation in that regard is not getting worse.

Actually, with a 5.5% annual increase in indebtedness, it is. — Garth

#12 S.Bby on 07.23.15 at 6:44 pm

I may not be part of the 1% but I am part of the 49%.

#13 Derek R on 07.23.15 at 6:49 pm

Puppies cost a fortune and keep rising in price year after year. Young people are going into serious debt to acquire a puppy before they are priced out.

Are you sure you want to touch on the puppy bubble?

#14 MSM-Free Zone on 07.23.15 at 6:54 pm

Puppies? I’m in.

Far more entertaining than listening to the Lyin’ King and his parliamentary clapping seals.

Arf arf…..Action Plan…..arf arf…..your neighbor is a terrorist, you just don’t know it yet…..arf arf….He’s just not ready (we’ve had 10 years, and we’ve never been ready)….arf arf….

#15 zedgt87 on 07.23.15 at 6:56 pm

Millennial here that could go months without a paycheck…

Refuse to buy into this overpriced gong-show. This financial repression of zero bound interest rates is wearing on me though. We are generation #screwed

#16 MSM-Free Zone on 07.23.15 at 6:57 pm

#13 Derek R on 07.23.15 at 6:49 pm

Yes, (enjoying your sarcasm) and, just like stainless and granite, puppies are total chick magnets.

#17 Renting in YVR on 07.23.15 at 6:58 pm

Even people with real jobs are getting laid off. What about those self-employed folks?

I’ve had 3 emails in the last week from those self-employed colleagues looking for work.

It’s a downward spiral from here on in. The condo market in YVR is about to burst, as the cracks are showing now. Completed projects are not even 75% sold, and many of the new owners are trying to flip their new condos without success.

Unfortunately all the hype created this. Those that marketed this craze must be commended on doing such a fine job of marketing that such a phantom market would exist forever. Such fine marketers. Such greater fools.

#18 TimV on 07.23.15 at 7:00 pm

The Economist just published a mildly related article: it’s not asset bubbles that cause recessions, but rather debt-fueled asset bubbles. Link: http://www.economist.com/news/finance-and-economics/21657817-new-research-suggests-it-debt-not-frothy-asset-prices-should-worry

#19 HanzoJinn on 07.23.15 at 7:03 pm

Garth! Long time listener, first time caller. You know what ads have been crowding my Calgary Facebook feed recently? Home builders offering price “assurance” and other incentives, plus lots of GET OUT OF DEBT ads. As a crusty basement dweller, I find the juxtaposition delicious.

#20 Mister Obvious on 07.23.15 at 7:04 pm

“They have stuff. But no money.”
——————————-

And that ‘stuff’ is all crap that depreciates daily and becomes obsolete in months.

The primary reason to amass wealth is to create a life of choice and possibly.

Did your boss reveal himself to be total idiot? No problem! Move on. You’re in a position to do so with plenty of reserves to bridge you to your next job. (Here’s a thing: I believe bosses recognize employees who don’t ‘need’ them and tend to hassle them less)

Did bikers set up shop next door? No problem! Give notice and find other digs. Fortunately, you own liquid assets that provide you the freedom to split when you want to (or need to).

Don’t want to drop too much precious capital on a new vehicle? Look into leasing. Keep your capital invested and working for you instead.

Somewhere near the bottom of the list of uses for wealth is buying trendy ‘stuff’ you don’t need to impress others who are doing the same.

Why isn’t this clear to people? I’ve known it intuitively since I was very young.

#21 Greg Franklin on 07.23.15 at 7:06 pm

Why is nobody talking about the deep drop in U.S. and Canada bond rates since the Bank of Canada has cut 25 basis points, 0.75% to 0.50% central bank rate.

This means 2-5 year fixed rate mortgage rates will be going down soon and more flame to the fire in Canadian housing, real estate.

Even 15, 30 year U.S. fixed rate mortgages will get cheaper and push up the U.S.real estate market too.

Wait until we get a 1.5% and 2.25% 10, 30 year U.S. treasury bond rates in coming weeks, months.

#22 Frank on 07.23.15 at 7:12 pm

I’m a millenial with a 6 figure salary and quarter million in savings (take tech, not history classes). If my generation is so broke why am I not seeing it? They all live comfy. Shouldn’t i have a baller house and car? I dont because the prices are insane.

Now I’ve heard these stats about inequity and how many people are riding a cliff near financial collapse. I’ve heard these stats for years. Yet the housing market stays a float. What will scare people? We’re a resource country and communities have been in the tank for a year and yet tax revenue is higher and job numbers are weaker but jot terrible. I see nothing ready to shake consumer confidence.

#23 mishuko on 07.23.15 at 7:14 pm

+1 for puppy talks… hey it’s a start since we’re converting to a blog bout dogs right?

I enjoy the insights and the variety of sources used to provide facts and the hilarious pictures!

#24 cool_canadian on 07.23.15 at 7:20 pm

If it’s puppies tomorrow, then please throw me a bone and someone take a rip at Harpers number 1 lapdog of the week, Pierre le Pup. What an arrogant POS that man is…..oooooops check that, both of them are.

#25 Here there on 07.23.15 at 7:24 pm

Oh, yes please, puppies! And let’s not forget the turtle. Yes, the one that Harper and the PC managed, to let it escape.

#26 Andrew Woburn on 07.23.15 at 7:25 pm

I think we should be very respectful of Ms. Kim Largeassian. There is a woman who really knows how to capitalize on her assets. She is also an exemplar of full disclosure and transparency.

#27 Cici on 07.23.15 at 7:25 pm

I’m with Brad…let’s be PC (as in politically correct, not progressively conservative under Harper and Poloz) and talk about both puppies and kittens.

#28 Don on 07.23.15 at 7:26 pm

Forget the puppies. Explain the connection between cats and Italian food.

#29 Leo Trollstoy on 07.23.15 at 7:27 pm

Even people with real jobs are getting laid…

I mis-read that.

#30 ONLY REAL ESTATE MATTERS on 07.23.15 at 7:27 pm

Says Kay: “The entire pyramid collapses if those paying $276,000 on the bottom rung stop buying resale homes – whether it’s rising interest rates or employment for those most at risk of being impacted by any changes in the economy. When they stop buying the market corrects.”

WHICH IS PRECISELY WHY THE CANADIAN GOVERNMENT WILL DO ANYTHING POSSIBLE TO KEEP VIRGINS AT THE BOTTOM MOIST.
HOW MANY TIME IS IT NECESSARY TO SAY THIS FOR YOU RENTING SHEEPLE TO UNDERSTAND.
NOTHING MATTERS MORE IN CANADA THEN REAL ESTATE……GOT IT ?????????????

#31 Cici on 07.23.15 at 7:29 pm

#14 MSM-Free Zone

Thank you, that was hilarious ;-)

#32 Andrew Woburn on 07.23.15 at 7:35 pm

Many pundits are raising concerns about the dismal performance of the Dow transportation index. Dow theorists believe that falling transportation stocks presage a drop in the overall US economy.

This analysis is a great example of why you should always check what’s behind the headlines. The author says the tranny index is reverting to the mean after surging ahead of the overall Dow. He says trucking and other sectors are doing OK but rail has been hit hard by the drop in commodity shipments, especially coal.

http://seekingalpha.com/article/3346465-stocks-concerns-about-the-transports-are-overblown?ifp=0

http://seekingalpha.com/article/3346465-stocks-concerns-about-the-transports-are-overblown?ifp=0

#33 Bobs ur uncle on 07.23.15 at 7:37 pm

Dual income household, we could easily afford it in our small town, but at this point, we are comfortable with the idea that we may never buy. We could both lose our jobs, and easily make rent from the money we have invested instead of spending on a house. Everyone thinks house=security. I see it as a fiery pit you throw money into for the rest of your life. There’s something to be said for fixed costs and no surprise roof/furnace/plumbing/fridge/etc costs.

#34 Dog_On_Bike on 07.23.15 at 7:39 pm

The more this doomer site moans and groans, the better the job ad stream seems to get.

In the last couple of weeks, I’ve had more halfways good job ads pushed to me than in 2014 thru now (or in all of 2007).

Even if companies are vultching, they surely wouldn’t commit funds to the hiring process unless they saw substantial promise for the near future.

#35 Dog_On_Bike on 07.23.15 at 7:40 pm

DELETED (Sexual)

#36 Liz on 07.23.15 at 7:42 pm

What should I tell my finances parents that will make them understand that buying a house now is not a good investment?

#37 WhoLikeShortShorts on 07.23.15 at 7:47 pm

Don’t talk about puppies too much, it will drive the price up and all those foreigners will scoop them up.

#38 Spectacle on 07.23.15 at 7:55 pm

Puppies !

I just became a new Dad, a baby Boy.

Can we explore the Garth Wisdom of the day, to inspire us, to be the Fathers our Baby Deserves……

Honourable mention to nemesis yesterday, sir.

#39 VICTORIA TEA PARTY on 07.23.15 at 7:56 pm

AND THE MEEK SHALL INHERIT THE EARTH…

…or they damn-well should; because that’s all who’ll be left, the broke (meaning the meek), as Canada slips deeper into a recession that will raise the hair and hackles of all those millions of Canucks who’ve never, ever, had to go through a proper and overpowering economic downturn as the one now brewing abroad in our fair land.

What’s it like, since I’ve experienced a few and believe this one will be the very worst of all in my experience?

Well, kind of like sailing through a North Atlantic hurricane, as I had the distinct displeasure of enduring, as a child passenger on a pitching and rolling smallish Cunarder, many decades ago.

That was arguably one of the most terrifying episodes of my life, and I can still see those massive one hundred foot high waves, and hear the screaming hyena-like winds, threatening to swallow our ship in one fantastic gulp.

Recessions will feel like that, especially to those who’ve levered themselves into financial “heaven” via too much low interest rate debt they will find impossible to repay.

It’ll seem like Hell soon enough, take my word.

Just remember the hurricane analogy, please.

It won’t matter one whit the interest rate or the TNL
@TB, and her soothing words which will always end up something like the following:

“pay your monthlies, regardless, or leave your house if you dare. And, BTW, we’ll be after you hook, line and sinker for the rest, no matter where you live after that. Now have a nice friggin’ day, Sunshine…”

Not even Mssrs. Mulcair and Trudeau will help, because THE GOVERNMENT IS ALSO BROKE AND DOESN’T HAVE MONEY EITHER!

That’s why the Tories have made taxable the recent family allowance increases and changes. They know the score.

This is all so troubling.

But St. Garth, of Redeem Thyself Now Advice, is right that economic downturns start in the minds of Main Street and end up on Every Street! It’s like the plague.

NOW THIS BIT OF VICTORIA REAL STATE CLAPTRAP

The flyer, in our mailbox, intones:

WHAT’S HAPPENING…in the West Fairfield Real Estate Market!

At http://www.FairfieldValues.com, realtor Kerry Davies reports the following stats of this fictional neighbourhood, which is really called Fairfield.

It is an enclave occupying the east side of Beacon Hill Park populated by way too many time-expired former BC civil servants and their wet dreams of an NDP/Green Party government emerging in October. Yuck!

Mr. Davies reports the following:

-in the last 12 months, 56 houses were sold;

-that it took 29 days to sell each one on average;

-that the average selling price was $891, 487. 00 bucks (really? The local real estate board puts out a figure more like 600 Gs city wide);

-ten houses are currently for sale, and;

-the Home Price Index change in the last 12 months is up 8.77 per cent (whatever that means). But it has him excited!

We emailed Mr. Davies for an explanation and he still has not returned the courtesy!

He works at Remax apparently.

Can anyone familiar with the curious real estate market here shine some perspective on this?

Thanks.

#40 espressobob on 07.23.15 at 8:02 pm

#28 Don

Cats are higher up on the “food chain”. They have good taste. Don’t knock it.

#41 Frank on 07.23.15 at 8:14 pm

It’s a downward spiral from here on in. The condo market in YVR is about to burst, as the cracks are showing now. Completed projects are not even 75% sold,

Odd timing an hour ago I got an e-mail from a developer about a recently completed project that is 85% and I should buy now.

many of the new owners are trying to flip their new condos without success.

Yeah this isn’t true. Inventory and time on market for condos hasn’t increased in the last few years.

Sadly YVR is the same as always despite your unemployed friends.

#42 Yuus bin Haad on 07.23.15 at 8:14 pm

Do you mean like Poodle puppies?

#43 Frank on 07.23.15 at 8:15 pm

BTW, thanks for the cat shout out.

Dogs are great but there’s place in every house for a feline friend.

#44 Gary on 07.23.15 at 8:19 pm

DELETED (Anti-Asian)

#45 Victoria Real Eatate Update on 07.23.15 at 8:20 pm

Canadian fixed mortgage rates will begin moving higher this fall, at a rate of approximately 1% per year.

This will affect all first-time buyers. First-time buyers cannot qualify under variable rates.

This will have a negative effect on the lower end of housing markets in every major Canadian city. As Garth explained, major housing market corredtions start at the bottom of the market with first-time buyers.

House prices fall as rates rise.

It’s apparent that price corrections have already begun in several Canadian markets, despite record low interest rates.

Over the past several decades (and certainly in recent years) many countries have experienced major housing price declines, despite government efforts to stop them from happening.

It’s inevitable, Canada’s housing bubble will deflate, and rates will be rising as prices fall (unlike in the US where rates were slashed from near normal to emergency levels as prices fell, limiting their price correction).

Canada’s price correction could be one for the record books.

#46 perception on 07.23.15 at 8:23 pm

The perception could have been very easily taken care of if the government was willing to collect data and publish it.

#47 Interstellar Old Yeller on 07.23.15 at 8:23 pm

Puppy pictures and letters from readers who “get it”. Set us up for a happy weekend. :-)

#48 FF on 07.23.15 at 8:30 pm

i think Canada is in a very difficult situation now. Lowering interest rate will reduce debt however will fuel the asset bubble further; increasing interest rate will cause the obvious collapse. Fiscal policy won’t be an option for conservative party because they want to balance the budget.

This oil price drop is not gonna be a short term one, it’s a long term drop as US shale oil is a breakthrough of technology.

Canada is facing a really difficult time in the next decade unless the government diversify the economy.

#49 ALBERTASTROPHE on 07.23.15 at 8:31 pm

And the outlook continues to degrade in Alberta.

The oil industry pain may be much longer term than thought.

http://business.financialpost.com/news/energy/this-oil-crash-could-be-worst-in-more-than-45-years-morgan-stanley-warns

Albertans are not only showing the greatest increase in EI claims, but food bank usage is exploding.

http://www.cbc.ca/news/business/alberta-food-bank-surge-sign-of-bad-times-for-all-1.3160641

A 40-50% drop in Alberta real estate valuations is starting to seem a little optimistic.

We are in big trouble here.

#50 eddy on 07.23.15 at 8:39 pm

Here we are again in an election. Expect the PM to use Beatles music to trigger positive reactions from brainwashed hippies. Its called mind control, its explained in this podcast. You will be shocked.

https://www.youtube.com/watch?v=L1n5Hfy_dCg

#51 Waterloo Resident on 07.23.15 at 8:46 pm

Compare these two 3-year charts to each other: One of the DOW over 3 years, and the other of the Transport Index over 3 years.

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=3&mn=0&dy=0&id=p95696037966

http://stockcharts.com/h-sc/ui?s=$TRAN&p=D&yr=3&mn=0&dy=0&id=p95696037966

Notice that in those charts there are peaks and valleys. Well, take a few of the valleys in the Dow and draw a line between them, now compare the same line drawn between the same valleys of the Transport-Index. When the lines of the TRANS were rising more than the lines of the DOW, that was the time to be fully invested in the market.

Since about March, the lines between the valleys of the TRANS have been falling a lot faster than the lines between valleys of the DOW. That tells you that the underlying economic foundation of the economy is going down the toilet, and that tells you a nasty recession is coming soon.

My prediction is that within 2 years the U.S. will be in another recession, but by then Canada will already be in one.

Oh year, when a pattern like the above happens, we usually end up with the DOW dropping in a huge crash sometime around September / October. That’s what usually triggers the recession.

#52 sleepless in scarboro on 07.23.15 at 8:52 pm

My overpaid teacher friend told me that she’s worried about her school board going on strike this September. “If I go on strike,” she told me. “I won’t be able to pay my mortgage!”

How about you save your money now, if you know you won’t have it later, instead of spending it on renos and trips and concert tickets?

#53 Squirrel meat on 07.23.15 at 8:54 pm

A tranny index reverting to the mean is a heterosexual.

Wynne should include that her sex ed.

Damn phone wants to turn wynne into winner. Stupid phone.

#54 Moneyfromasia on 07.23.15 at 8:55 pm

Garth,

My fathers house went to $1.2m in Richmond ,BC, then he passed away 3 years ago and we sold the house for $800k (to an Asian buyer) Now the market is back up and the same house in the area is listing for $1.1m. There’s a hefty fluctuation there. A quick drop and a quick recovery all within 3.5 years. I don’t see anyone talking about this. Sure interest rates influence the general population, so does immigration.
Also, if 70 % of Canadians own homes, what percentage of homeowners own more than one home?
Still waiting…..

#55 Moneyfromasia on 07.23.15 at 8:57 pm

Garth,

correction, the fluctuation may have only been in a 1year window not 3.5.

Sorry

#56 Brian Ripley on 07.23.15 at 8:59 pm

“Actually, with a 5.5% annual increase in indebtedness, it is.” Garth

My long term debt chart (since 1990) shows indeed both household and total debt are at historic Canadian peaks

The chart is overlaid with a plot of balance of trade which the low CAD has not been able to get out of negative territory for any sustained period (since the 2008 crash.

It’s almost as if the 2008 crash never went away and ZIRP has allowed Canadians to borrow during this time frame to maintain lifestyle…. ZIRP & NIRP has benefited those with financial assets drawing away potential investment that never reached the economy.

Additionally, Bill Clinton made the same policy mistake as Mr Harper has when he (Bill) balanced the U.S. budget in late 1990’s-2000.

The government is not a household.

#57 Drill Baby Drill on 07.23.15 at 9:02 pm

Talk about puppies !! Sure how about sick puppies like;
Realturds
Joe Owe
Polozio
Trump the human hairpiece

#58 For those about to flop... on 07.23.15 at 9:03 pm

#4
Fausto has 2 townhouses in ancaster and 3 houses in hamilton and a new build just purchased in ancaster. Fausto also has tangerine mutual funds. Fausto is doing just fine

—————————————-

Fausto need English lessons ,no?

#59 Jim dandy on 07.23.15 at 9:08 pm

What is a “housing consultant “? It sounds like a defrocked real estate agent.

#60 Kurt on 07.23.15 at 9:18 pm

Puppies! I’m in!

#61 Sheane Wallace on 07.23.15 at 9:20 pm

#30 ONLY REAL ESTATE MATTERS

—————-
You forgot to flush the toilet after your post.

Canada’s economy is irrelevant in the big scheme of things in the world.

The only interest in our enormous housing is with the intend to short it as well as the CAD.

And don’t worry, your kids will pay for your stupidity.

#62 Investorz on 07.23.15 at 9:21 pm

Canadian energy companies are touching the lows we saw a few months ago, even if oil is 5$ above the bottom oil prices we had back then.

Banks are getting weaker, even if their valuations are cheap. The last sector to announce job cuts is banking. They likely will. Cannacord Genuity printed a report practically recommending they should. Usually, management positions are cut, and those pay well.

Bought Tricon stock today. Exposed to USA.
I don’t want anything that isn’t.

#63 tundra pete on 07.23.15 at 9:24 pm

Reward for missing puppy.

Orange and red, 6 mos. Old, missing one eye, right front leg missing, has been castrated, micro chip implant gone wrong and lodged above right eye, has fleas, great attitude answers to the name of “lucky” .

#64 Freedom First on 07.23.15 at 9:27 pm

Yes. Speaking of puppies, let’s start right now.

As a guy who has raised dogs from puppydom to old age, and found the experience to be more rewarding than I ever thought possible, consider this: A well treated puppy/dog will always jump for joy every time you come home from wherever you were. A well treated dog will wiggle with joy at the mere mention of going for a walk. Dogs are walking beings of gratitude and truly love living life, every day.

Now, ask yourself, are you as happy, easy going, and calm as a dog, on a daily basis? For myself, I can only say yes, absolutely, and for decades. I think if a person is healthy, and cannot answer yes to this, they aren’t doing it right. And there is no yes buts allowed as an answer. Yes or no. No exception.

#65 gut check on 07.23.15 at 9:30 pm

I’m currently in the market and three times this week I’ve smelled that whiff of desperation. “Any offer” “must sell” “financial issues” “just wants to sell it”

It’s unraveling where I am, for sure. Lots of inventory on the market, ALL over priced (except that one that got away last week) but there are cracks. People are starting to chop many tens of thousands off asking.

Just a couple more months – once the last hope of summer sinks into September – and I’ll probably be able to find something suitable and suitably priced.
.
.
I hope.

#66 Smoking Man on 07.23.15 at 9:31 pm

Smoky: “If you’re unknown and you write a master piece. No one is going to buy it.”
With respect, and gently, this is completely incorrect.
………..

This is the response I got from a post in a writers group on linkedIn.

Look how polite these bastards are, I’ve already been raked over the coals a few times now by the Nazi moderators. It’s like everyone of them were vice principles in a previous life…

Then One modorater guy said this.

“It is all in putting yourself out there and while your coarse diatribe was not appreciated by this moderator, I’m not going to criticize it because it makes a very strong point for something that I’ve been saying for a long time to those who want good sales.”

I had to google Diatribe.

These are published authors, he’s been trying to say it for a long time… Hello, don’t you do this for a living, and you can’t explain shit….. Bahahaha.

Dogs, I have been holding back huge…. Heaven help these bastards if I post from Senica.. Or more over heaven help me, I’m doing this under my real name. With all of my clients as witness..

I better get LinkedIn off my phone.. Way to dangerous.

#67 bigtown on 07.23.15 at 9:32 pm

My Word, retail is appearing shabby and unseemly in the upscale haunts of our betters on Lakeshore Road near the border of Burlington and Oakville east of Appleby Road…I like the Sobey’s and Shoppers but other than the EDWARD JONES this strip mall is a virtual GHOST TOWN. Put that in your pipe my geeky quants and see if you can crunch the numbers to squeeze out an economic gain where the big HOO HAS do their make nice on the weekend.

Now all the kids are out of college and seeing their first debt repayment schedules in the mail and it is a dark revelation that the place they believed to be utopia or geographically Canada was just another century of IMAGE AND RHETORIC updated to fit the digital economy. Of course the kids will be emigrants to our great neighbors to the south to pay off those big MBA tickets.

Have a nice black fly season and I love your lawn.

#68 Linda on 07.23.15 at 9:36 pm

The issue I have with the crazy prices is, even if the market does correct by say 30%, with an ‘average’ house price of $624,000 a buyer would still be forking out at least $436,000 on average to buy a place. That is still a hefty mortgage, especially with only 5% down. Given that the prediction is that interest rates will be increasing ‘real soon’ I don’t see how anyone wins out of any correction. People still will be in debt & those who hoped to sell their place & come out ahead will see a lot of that potential windfall evaporate.

#69 Frank on 07.23.15 at 9:42 pm

God some people on this blog are brain dead.

My Word, retail is appearing shabby and unseemly in the upscale haunts of our betters on Lakeshore Road

Retail literally just hit record highs.

http://www.theglobeandmail.com/report-on-business/economy/new-car-purchases-lift-canadas-retail-sales-to-record-in-may/article25641291/

No one gives a shit about your local strip mall. Especially not when your biased mind asserts that it must be slower because you want to see fewer people so you do. Unless you’re doing pedestrian counts and polls to determine spending you’re literally just making shit up.

#70 Doug in London on 07.23.15 at 9:44 pm

@Mister Obvious, post #20:
My thoughts exactly. Having wealth gives you a lot of flexibility, and is infinitely better than owning an oversupply of stuff. I’ve also known the same thing intuitively. Why? It’s so outrageously obvious! I don’t know why more people don’t see it and put themselves through the slavery of living, or more appropriately existing, from paycheque to paycheque instead. Are these people masochists?

#71 Nwo on 07.23.15 at 9:46 pm

To Freedom First (#64)
Well said.
Lock your wife and your dog in the trunk overnight.
Which one will be happy to see you in the morning?

#72 Doug in London on 07.23.15 at 9:49 pm

With each passing day, the unemployment situation seems to be getting worse and worse. So, where’s this coming labour shortage so many “experts” have been predicting for many years now?

#73 Ultraman on 07.23.15 at 10:01 pm

Thanks Freedom First for your dog philosophy. So true.

#74 Panhead on 07.23.15 at 10:06 pm

For all you fellow Canadians further east than B.C., we out here had the pleasure of seeing our supreme leader standing beside our leader on the evening “news” tonight. Photo-op up in Kelowna talking about fires. I didn’t know whether to laugh at Stevie’s hair or look at Christie’s …

#75 Terrier on 07.23.15 at 10:16 pm

You nailed it again Mr. Turner … masses in panic could be highly unpredictable especially when comes to real estate. Considering the present state of economic affairs, levels of personal debt and shrinking job market, placing all bets on RE “equity game” is pretty darn insane …

#76 Brian Ripley on 07.23.15 at 10:16 pm

re: My post at #56

If you are interested in why Bill Clinton and Mr Harper’s “balanced budget” policy is disastrous for the private sector, here is my post from earlier this year that explains it (with many thanks to Cullen Roche):

http://www.chpc.biz/history-readings/myth-making

Net Public Sector+Net Private Sector+Net Foreign Trade Sector = 0

The result of this accounting reality is that:

If society wants more private sector savings, then either the Federal government must run a bigger deficit or exports must increase.

When the government runs a surplus, then the private sector must run a deficit unless exports are booming and make up the difference.

#77 Vanecdoatal on 07.23.15 at 10:17 pm

You aren’t kidding GT, FTHB pool appears to be nearing exhaustion locally, (local earners are priced out and finally realizing even in YVR condos/townhomes bought in last 5 years are flat or declining across all areas tracked by both Boards own stats). Where’s the future price support coming from for starter (not luxury) homes? Few observations:

– White Rock new luxury spec SFH builds on small lots continue to pile up on MLS. Plenty to choose from right now, some a few years on/off market and many more (recent, raize-raise-flip prev. perfectly livable tear downs in most cases) in the pipe as we speak. Seeing re-lists with token price drops now. Poorly located “luxury’ (amateur flips?) spec builds sit particularly unloved, with more supply coming online in immediate future.

– Homes listed under $1 million selling briskly. Almost all (all?) torn down replaced with luxury spec build. Builders driving SFH market.

– Total listings has barely moved in last 3-4 months. Can’t speak to sales mix. Did notice few weeks after last surprise rate cut a spate of ultra hi-end luxury SFH’s finally sold. Premium lots, with good chunk of land, some waterfront. Some have been on/off market and drifting down for few years, finally hit bids. Few new spec builds also sold in this mix @ same time. Others still sit however. If HAM is active still, they are very particular. Not spilling over into other segments of market.

– Nearby, where plebes like myself congregate, townhomes continue sprouting like mushrooms. One development @ 50 townhomes 3 years “new”, is still trying to flog phase1 units. Prices slowly drifting down, now into mid $350k. Recently commenced Phase 3, apparently well behind schedule. Across the street from this, different builder has @ 50 more cookie cutter THs coming to market in next few weeks starting mid $420k. (LOL). The other builder can’t sell comparable units for $80k less than that ask after 3 years of trying. Good luck with that pricing.

– 5 min. down the road mega TH/condo development (looks like a couple hundreds of units) has also been flogging non stop 3 years now, they advertise in local rag regularly. Terrible location, stone’s throw from hi-tension power lines for that emf tan, and you can almost reach out and stroke car tailpipes on the freeway on-ramp outside your door. Lots of supply streaming online around here NOT being absorbed. There are multiple smaller developments in this area also flogging into year 3 of “new”.

Mr. Market sez “we’re tapped out/don’t like this product at this price/don’t believe it will appreciate”. Running out of Greater FTHB Fools quickly. In spite of generous immigration, no restrictions on foreign purchases or speculators, and and epically low interest rates. I would wager that the most highly-leveraged builders may be the first caught swimming nekkid in the not-too-distant future judging by recent more substantial price drops in recent weeks.

#78 Leo Trollstoy on 07.23.15 at 10:19 pm

#54
Also, if 70 % of Canadians own homes, what percentage of homeowners own more than one home?

Look it up yourself on the Statistics Canada Survey of Financial Security.

#79 Steve French on 07.23.15 at 10:28 pm

Smoking Man # 66

“Heaven help these bastards if I post from Senica.”

LOL….

SteveO

#80 lee on 07.23.15 at 10:31 pm

Did I read it right: Canada got just six applications for its millionaire immigration program? Where are all the rich Asians that are supposed to keep our real estate market juiced?

#81 I'm stupid on 07.23.15 at 10:31 pm

Hi Garth

What’s your view on buying vs leasing a car? I’ve always just bought cars with no financing and run them to the ground but i hate having to service them when they’re older. Any thoughts?

#82 S.Bby on 07.23.15 at 10:32 pm

Not your parent’s basement:

https://www.youtube.com/watch?v=gjHo5BZM7V0

#83 Vanecdotal on 07.23.15 at 10:35 pm

Wondering Garth, how does the 70% home ownership in Canada break down by age group, specifically what % are >Freedom 55rs who may find themselves downsizing sooner than later?

If the FTHB support is not there at “their” asking price, how big a share of that 70% do the older downsizers represent?

#84 Larry Laffer on 07.23.15 at 10:35 pm

Not quite on today’s blog topic, but could anyone shed some lights on how hybrid bonds work? I am currently looking at this ETF and I am a bit puzzled on its inner workings and subtleties, and how they compare to pref. shares and high yield bonds.

http://www.blackrock.com/ca/individual/en/products/239488/

Thanks in advance.

#85 Siva on 07.23.15 at 10:38 pm

Today on ‘Love It or List It’ they reaired an episode that was originally telecast on 22 Sep 2008. The three bedroom house was valued at $260k. I bet it’s more than half a million now.

The other day on ‘Property Brothers’ a couple ‘bought’ a house for $760k but didn’t have $2k for an unexpected repairs.

#86 Cory on 07.23.15 at 10:45 pm

Wayyyy too much Canada bashing in your blogs.

Where is there any bashing? — Garth

#87 Republic_of_Western_Canada on 07.23.15 at 10:52 pm

#72 Doug in London on 07.23.15 at 9:49 pm

With each passing day, the unemployment situation seems to be getting worse and worse. So, where’s this coming labour shortage so many “experts” have been predicting for many years now?

No shortage.

Just insufficient massively-cheap labor in tech fields to make companies happy. Extensively trained in the latest commodity discipline of course, at someone else’s expense.

http://heather.cs.ucdavis.edu/h1b.html

#88 Genghis Can on 07.23.15 at 10:53 pm

#112 Sosuke Aizen on 07.23.15 at 2:43 am

I wouldn’t want to be counted among the nutbars & gold bugs that come here. I urge you not to become another nutbar by joining Bill’s crusade against the evil Chinese Empire. And Google only helps if you understand the question.”

Suggest you stick to comics, just like your anime name suggests…you can look at pictures instead of engaging strategic areas of your cerebrum via reading up on google….

#89 BG on 07.23.15 at 10:56 pm

“What people believe to be true is more powerful than the truth.”

100% agree.
We can only observe the gap between what we know about the real estate market (hopefully the truth) and what most people think.
And by doing so we can asses the risk.

Forecasting the correction is a another story.
It’s not happening until people believe it’s happening.

#90 drydock on 07.23.15 at 11:00 pm

#30 ONLY REAL ESTATE MATTERS on 07.23.15 at 7:27 pm
Says Kay: “The entire pyramid collapses if those paying $276,000 on the bottom rung stop buying resale homes – whether it’s rising interest rates or employment for those most at risk of being impacted by any changes in the economy. When they stop buying the market corrects.”

WHICH IS PRECISELY WHY THE CANADIAN GOVERNMENT WILL DO ANYTHING POSSIBLE TO KEEP VIRGINS AT THE BOTTOM MOIST.
HOW MANY TIME IS IT NECESSARY TO SAY THIS FOR YOU RENTING SHEEPLE TO UNDERSTAND.
NOTHING MATTERS MORE IN CANADA THEN REAL ESTATE……GOT IT ?????????????

………………………………………………………………………………………….

Wash an atavan down with a large mug of warm milk and get a good nights sleep.
Your nervous system will thank you in the morning.

#91 Baloncina on 07.23.15 at 11:05 pm

http://scradar.com/usa/vancouver-vs-beverly-hills-sta-mozete-kupiti-od-nekretnina-za-4-89-miliona-dolara/

#92 Balmuto on 07.23.15 at 11:16 pm

“Forecasting the correction is a another story.
It’s not happening until people believe it’s happening.”

Truer words were never spoken.

#93 Genghis Can on 07.23.15 at 11:21 pm

Garth

I think you should devote at least one day per week to good news…..if there is any…sigh….

#94 Marco on 07.23.15 at 11:23 pm

@sleepless in Scarboro

Going to be an interesting Fall here in BC. Too. When the full impact (inflation) of the lower loonie hits home. Unions will be striking for more pay left right and centre.
Lots of highly paid Public Service workers holding extremely high mortgages here in BC.

Joy, joy.

Cheers.

#95 Suede on 07.23.15 at 11:28 pm

If i vote for Mulcair just to see some chaos, will all you guys hate me?

Or just most of you?

I’ll do it…seriously. Or maybe i’ll vote for Trudeau because that TV spot said he has nice hair. It’s the sign of a good leader.

check it out:

http://www.gq.com/story/world-leaders-hair

“The lion’s share of the G20 nations have black-haired leaders. Remember, you cannot escape people with black hair. They are powerful and important.”

#96 Shawn on 07.23.15 at 11:34 pm

First Time Home Buyers

The answer is in the Stats Canada Population Pyramid.

http://www12.statcan.ca/census-recensement/2011/dp-pd/pyramid-pyramide/his/index-eng.cfm

Slide the slider to 2011 and note how the population drops off under age 15 (as of 2011) so age 19 as of now.

The end of the echo boom or whatever. I am tail end of the baby boom and had my kids a bit late at age 35 and 36. They are now in college. So yes, end of the echo boom is turning 20. What comes after is a baby bust. Teenagers today are part of a baby bust generation.

Starting immediately now we should have a decline in new first-time renters including college students. This alone may kick start the end of the whole move-up cycle.

So if the decline and fear is not triggered some other way we have this population bust (for the youngest home buyers) baked into the numbers.

On the other hand youth unemployment should fall. That is baked into the numbers as well.

#97 Shawn on 07.23.15 at 11:38 pm

Also, if 70 % of Canadians own homes, what percentage of homeowners own more than one home?

**************************
30% on average since the missing 30% live in rented places and someone owns those.

But that is just on average in reality one guy may own 1000 rental units.

Another guy owns 0.01% of a rental unit by owning some Boardwalk shares.

#98 saskatoon on 07.23.15 at 11:40 pm

#56 Brian Ripley

“It’s almost as if the 2008 crash never went away…”

obvs.

#99 Karma on 07.23.15 at 11:42 pm

My cousin’s friend, a highly paid single mother, just paid +$1 million for a second home she plans to rent out. I highly doubt she paid cash for all of it. My cousin said she needs to be lucky to not have an extended period of vacancy. On the bright side, she does have her primary home, which is on the same street, paid off. The houses are in the Annex. Some quick math estimates the cap rate to be 3.2%, which is generous.

#100 Shawn on 07.23.15 at 11:43 pm

Population Pyramid

http://www12.statcan.ca/census-recensement/2011/dp-pd/pyramid-pyramide/his/index-eng.cfm

And check out the huge bulge of boomers who were about 56 and a bit younger in 2011 and now hitting 60 and a bit younger.

At 60 I suspect spending really does start to taper off. And people start dying in scary numbers from natural causes too.

And moving up to a more expensive house is unlikely after age 60. Now downsizing starts to kick in. Just a few percentage wise downsize but it adds up and the virtuous circle of real estate kicks into reverse?

The great thing about demographics is it is quite predictable.

#101 Shawn on 07.23.15 at 11:50 pm

Actually it looks like the bulge was about 60 and younger in 2011 so worse than I said. The economy will not grow much with so many people entering their 60’s.

#102 MF on 07.24.15 at 12:08 am

#22 Frank on 07.23.15 at 7:12 pm

First off, someone give this guy a prize for the fact he was able to use his crystal ball to not take history classes in school. Well done. Second, and I am sorry, but when someone mentions their salary on an internet board it is always a roll your eyes moment.

I am a millennial too, and I live in the GTA. Everything is pay as you go and instant gratification is the name of the game here. Our generation is the biggest joke ever. Everyone lives with their head in the sand. We are not seeing it because debt has allowed the spending spree to continue. Most of us have only known falling interest rates. That will change in the next five years. Listen to some of the older folks’ stories on here about rising rates. No one cares about your plight in that situation. You either can handle the change or you are screwed. My gut feeling is our generation will be screwed.

As Garth has said a million times, debt seems fine until it keeps adding up. It appears fine right until the very end where there is a tipping point and it all comes crashing down. Rates are going up soon in the US. That will be the first spark IMO.

Speaking of history, did you read Garth’s historical post on the last housing crash a few days ago? Bottom line is no one is going to come out and notify you. It just happens. It’s insidious then it happens and you are stuck, especially if you owe a lot. People today are more in debt than ever and have shittier job prospects than ever. This whole thing is like a powder keg. Garth does an admiral job showing us how to be prepared for any changes in the economic cycle ahead. Some of us are listening and most are not.

MF

#103 marnic on 07.24.15 at 12:14 am

#86 Cory: Yup, no bashing. BTW though, be sure to buy into the USA Recovery narrative here or you’re a rotten America Hater.

#104 MF on 07.24.15 at 12:15 am

#96 Shawn on 07.23.15 at 11:34 pm

Hopefully some of the boomers retire and provide vacancies for the youth.

I am 32 and about half of my friends have gainful employment, while the other half like myself are still looking for something of substance. Those of us that did extended schooling like me are the worst off. Oh well.

MF

#105 Mark on 07.24.15 at 12:18 am

“Going to be an interesting Fall here in BC. Too. When the full impact (inflation) of the lower loonie hits home.”

Except that there is no inflation. The economy is trending towards deflation, and price growth is anemic. I know a lot of the public sector unions where I live settled on 1-2%/annum increases for the next few years, and, given how close the economy is to deflation, and the carnage in the private sector employment, such settlements appear to be extremely generous.

The loonie is only low because commodities have lost so much. As house prices start to really accelerate downwards after the minor declines of the past couple years, the CAD$ should start to rise again. In which case, outright CPI deflation is quite likely, and the public sector employers will have good ammunition to seek settlements at negative rates (ie: wage decreases).

#106 BS on 07.24.15 at 12:26 am

Also, if 70 % of Canadians own homes, what percentage of homeowners own more than one home?

**************************
30% on average since the missing 30% live in rented places and someone owns those.

The 70% figure does NOT mean 70% of Canadians own homes. 70% home ownership refers to the percent of homes that are owner occupied. That leaves 30% of homes that are not owner occupied or are rentals. Some of the 70% can also be a partial rental (basement suite rented for example). Many people renting are living in owner occupied homes. Many people living in owner occupied homes are not renters but living there as family or guests but do not own the home. Obviously a large part of Canadians are below the age of 19 and would be unlikely to own a home. Far less than 70% of Canadians actually own a home. Still the 70% number indicates more people own homes now than in the past which means there will be less buyers in the future.

#107 Nagraj on 07.24.15 at 12:27 am

DANCING WITH PARKINSONS

I was in Tronna yesterday having dinner with some artsy ballet types and I learned that their hospital DANCING WITH PARKINSONS program is a great success. I also learned that they wanted to extend it to dementia patients but couldn’t come up with a good title.

Well, if GT or SMOKING MAN or any other blogdogs git Parkinsons or dementia I can recommend where you should go so’s youse kin be happy dancing, see?

This is not off topic cuz GT’s last two posts come under the heading of DANCING WITH DEPRESSION – and in light of over half of woikin Canajuns DANCING WITH INSOLVENCY, not to mention the Canadian REALTURDS RUMBA craze, DANCING WITH THE SHAKES is hardly outa line I’d say.

Well, I have a big mouth and after suggesting titles for the dementia program, such as DANCING WITH THE NEAR-DEAD, OLD FOLKS NIGHT ON BALD MOUNTAIN, ZOMBIE HOOTENANNY, etc., I was graciously taken aside and told to shut the f up.

#108 Kingartur on 07.24.15 at 12:40 am

Realtor offers $2,000,000 for any 33 foot on the west side of Vancouver:

http://www.news1130.com/2015/06/26/telephone-pole-real-estate-ad-an-indication-of-vancouvers-hot-market/

A sure sign of something!! He does admit Chinese money drives this craziness.

#109 whitehorn on 07.24.15 at 12:50 am

#49 Albertastrophe “And the outlook continues to degrade in Alberta.

The oil industry pain may be much longer term than thought.

http://business.financialpost.com/news/energy/this-oil-crash-could-be-worst-in-more-than-45-years-morgan-stanley-warns

Albertans are not only showing the greatest increase in EI claims, but food bank usage is exploding.”

I agree with your comments. I’m an Alberta resident and starting to see some scary trends as well. It was mentioned the Calgary Stampede was down at least 10 percent from last year. Went to 2 K-days events recently in Edmonton; noticed the scarce crowds, and shorter lineups which were the contrary last year. Also a major 5 day rural rodeo, which was extremely busy last year, was slower this year, and chatted to an organizer that mentioned people are very concerned about losing their jobs. Plus, agriculture industry facing one of the worst droughts since 2002, and most think it is more severe. Plus, I know some people that are having difficult times selling their houses which was not the case last year. Plus, ghost oil towns, throughout the province, i.e. drilling is down significantly and all those spinoffs. Plus, as you mentioned the food bank usage is worse than the 2008 downturn. Overall, you can see money is definitely tighter this year and more talk about it in group circles. This definitely does not help real estate, which you can almost sense the bubble is ready to be pricked substantially based on all the news justifying the continual uptrend in house prices especially in Alberta.

#110 Jon B on 07.24.15 at 1:02 am

Would puppies be included in a diversified portfolio? What percentage of live stock do you suggest? I would also think that american puppies would be preferable considering your bias favoring international exposure.

#111 cramar on 07.24.15 at 1:22 am

Dog days of summer!

#112 OBSERVER on 07.24.15 at 1:42 am

Can I show you my puppies Garth?

#113 Freedom First on 07.24.15 at 1:49 am

#71 Nwo

I guess you don’t know who I am. I love women. Always have. However, I am an honest man and every girlfriend knows up front that they are never getting a key to my place or a trip to the altar with me. Never fails though, once they think I care I will change my mind. I don’t, and it ends. Surprisingly, they just seem happy that I have no hard feelings. It’s all good.

#114 Bottoms_Up on 07.24.15 at 2:29 am

#69 Frank on 07.23.15 at 9:42 pm
————————————–
Exactly, that my friends is the difference between anecdotal evidence, and actual meaningful, substantive, research.

#115 jane 24 on 07.24.15 at 2:46 am

I was a RE agent in TO during the late 1980’s house price crash. On the Monday it was business as usual – phones ringing. By the Friday those phones were silent. It was like a tap turning off. In a matter of days group think went from .this is a great time to buy a house. to ‘this is the worse time to buy a house’. Tide simply turned on a dime.

Then the key to shift a house was to get your price drop in before the market average dropped. To be cheaper than the curve. As Garth said, folk brought all the way down, thinking it was the bottom. Whole mess lasted about 10 years.

As Garth says consumer perception is all. The prices will hold until the herd says that they won’t. Then they drop hard. Been there and got the T-shirt.

#116 Bob Santarossa on 07.24.15 at 4:21 am

What Garth is saying about the CPA study of Sept. 2014 (51% of Canadians live paycheque to paycheque) is that highly leveraged debt/mortgage holders will be in serious trouble if layoffs happen in the economy (…23% of Canadian mortgages are for 80% or more of the value of the homes financed…).

The difference between 2011 and 2015 is that our economy in 2015 appears to be headed towards or is in a recession and Garth gives plenty of examples that job layoffs are accelerating in his recent postings (I checked all of them, and he is correct).

If job layoffs get worse, many more people will not have the cash to pay their mortgages and as in the past, will sell their homes to get out of unsustainable debt or more simply, walk away from their homes and mortgages. This is what happened in the early 1980s.

On August 7, we will have the Labour Force Survey for July 2015. On July 31, we will have the GDP by Industry Report for May 2015.

If Garth is correct, these numbers should be worse than the last reports (-6400 jobs in June 2015 and -01.% GDP in April 2015).

I believe he is correct, you need only look at the latest StatsCan – The Daily – Indicators: http://www.statcan.gc.ca/dai-quo/ind2-eng.htm

And to quote him:

“People are simple. They fear, they freeze. The music stops.”

#117 Smoking Man on 07.24.15 at 7:38 am

We need to take action now, we need to fire up our coal power plants immediately. We need to pump out carbon and warm the planet…

We got to stop the coming ice age.

http://www.theregister.co.uk/2015/07/21/arctic_bounces_back_world_returns_to_sea_ice_levels_seen_in_1980s/

#118 maxx on 07.24.15 at 7:48 am

#10 tom on 07.23.15 at 6:40 pm

“Who.wants.to talk.about Pluto?”

Moi. Analogous to Canada with its current stellar management and going forward if nothing changes- demoted and far from the center of the action.

#119 Steve French on 07.24.15 at 7:49 am

It’s Friday night down under…

Is it time for another single malt?

Yup.

#120 Maggie Danson on 07.24.15 at 7:56 am

Why are U.K bond rates of 5 year rates in particular, are much higher than Canada’s 5 year bond rates.

We both have a 0.50% central bank rates, but their 5 year rate is 1.52% and ours is 0.64%.

I doubt inflation is much different in U.K. and Canada justify such spread, difference of 88 basis points, 0.88% of a percentage point.

#121 Llewelyn on 07.24.15 at 8:05 am

Canadians often overlook that the quest for profit skews the way information is disseminated. All forms of mainstream media are struggling to keep their head above water as the popularity of mobile devices increases. Newspapers and television networks require advertising revenue to remain viable and as a result editorial content is delicately balanced to avoid the loss of existing and potential advertisers.

The end result of all this balancing is a flow of information biased towards the generation of short-term profit at the expense of long-term economic growth.

The average Canadian did not incur debt that exceeded 160% of their annual income by accident. They were bombarded by information designed to create a reality where additional debt was OK as long as it could be managed.

World famous economists observed that a country that was over $18 trillion, yes trillion, in debt was not only healthy but a shining example for all to follow. Critics of quantitative easing just didn’t understand how the new global economy works.

The MSM focussed our attention on rising house prices, increases in the TSX average, declining unemployment and numerous success stories like Walmart, Costco, Apple, Google, Facebook, Amazon etc. to convince the general population that their Emperor was the best dressed man in town. Warnings that the Emperor might actually be naked could not be heard through those fancy new earmuffs bought on credit.

We are slowly starting to realize that excessive debt might actually be a problem for some today, but are resisting the reality that it might be a problem for us all in the long run. Who wants to wake up one day and find that the last 25 years was just one big confidence game designed to redirect 95% of the world’s wealth into 5% of the world’s pockets.

I leave you with the last words of one of Bernie Madoff’s marks;

“It was fantastic until the day reality reared its ugly head. No emperor, no clothes.”

Valid comments, marred only bythe gratuitous and irrelevant last line. There is no correlation between the activities of an amoral, unethical, professional crook and the wider economy. — Garth

#122 Bank of Millennial on 07.24.15 at 8:29 am

Hi Garth,

In this interest rate environment I think the 44% at $470,000 are the drivers of the pyramid. Not the 22% at $276000. Most couples with dual incomes would scoff at anything below $300,000 even as a starter. I bet most first timers are putting 470 on the nut right out of the gate.

And for this reason, I’m staying out.

#123 Reddy on 07.24.15 at 8:45 am

Freedom first @ 113, I really do feel sorry for you.

#124 maxx on 07.24.15 at 9:01 am

#28 Don on 07.23.15 at 7:26 pm

“Forget the puppies. Explain the connection between cats and Italian food.”

Even cats don’t like cat food.

#125 maxx on 07.24.15 at 9:08 am

#42 Yuus bin Haad on 07.23.15 at 8:14 pm

“Do you mean like Poodle puppies?”

Please, no. I just had breakfast.

#126 Dee on 07.24.15 at 9:34 am

I’m visiting my sister in Michigan this week, as I’ve mentioned — but, speaking of puppies, I just got my new favourite picture of her dog:

https://pbs.twimg.com/media/CKnrmGeWEAAiCNk.jpg:large

and felt I should share it with the blog, instead of writing another comment about the raging economy here vs the dying one in Toronto.

I think a puppy day is a great idea.

#127 Bottoms_Up on 07.24.15 at 9:35 am

#117 Smoking Man on 07.24.15 at 7:38 am
———————————————-
One year of extra cold temperatures in the arctic and hence corresponding ice build-up does not trump a 125 year trend of global warming and gradual ice loss.

#128 Nora Lenderby on 07.24.15 at 9:40 am

#123 Reddy on 07.24.15 at 8:45 am
“Freedom first @ 113, I really do feel sorry for you.”

Leave him be. Yes, he can be repetitive. Perhaps he is annoying. I think he’s OK and has some interesting insights. Recently his comments have been interesting.

FF, your comment about dogs was very true and touching. I don’t particularly agree with all your remarks about people, but that’s my right to disagree :-)

#129 Hot Albertan Money on 07.24.15 at 9:44 am

Sigh. I think we need to talk about puppies tomorrow. Who’s in?

Yes, please. My pooch is looking into a bigger doghouse, but the thing is can’t afford it unless he gets a loan from the Bank of Owner

#130 BlackDog on 07.24.15 at 9:57 am

#97 Shawn re: “Also, if 70 % of Canadians own homes, what percentage of homeowners own more than one home?
**************************
30% on average since the missing 30% live in rented places and someone owns those. ”

Sorry don’t mean to be rude, but I think you better rethink your ‘logic’.

#131 RR on 07.24.15 at 9:58 am

Garth, HAM is coming through all the Chinese students enrolled in schools across the GTA and GVA. You would be surprised at the volume of 18-20 year olds snapping up property. After they buy property, the family tries to get PA status by showing they already own property here. The discontinuation of the investor program did little to nothing to slowdown HAM.

Prove it. — Garth

#132 Live & Learn on 07.24.15 at 10:36 am

I’m a little miffed with myself for selling my place last fall. Knowing I could have made more. Balancing this is knowing a Bull can make money, a Bear can money and a Pig rarely does.

In the past 5 years I’ve sold all my real estate 3 houses and one condo. Most of it was upside down debit/equity anyway after a brutal decade. The last one was my principle home sold it Nov 2014. It was simple home and sold for $395k. I bought it in 2009 for $270. Being a finance guy had a couple of appraisals done both where between 385 and 391k. So alls good, made money on all the places, though what was made, went to living expenses. At least I’m debt free.

Had two agents bid on the listing. One wanted to list and hold back offers and viewing a week. Out of town guy. The other local convinced me this was unethical and listed with that one. Good guys finish last. Unethical to who? Out of town guy sells a place in one day! For $435k. Me? I endure over 40 showings, lots of locals just wanting to check the place out. Whatever my consequence.

Last week out of town guy sold another place on my street. In Pickering btw, within 300 metres of the GO – Regional Transit hub. A semi. Listed for $390 and sold $455k. In a day again!

I actually ended up renting my place back from the buyer. Just a fluke. I need to move anyway, being so close to nuclear plant waay past it’s prime.

It’s a really stupid this cup half full feeling, I should be giddy over a $100k in a few years. Instead I feel like…I could really have used an extra $50k.

lol Thank you Garth! For letting me get my unresolved resentment off my chest.

#133 Smoking Man on 07.24.15 at 10:37 am

#123 Reddy on 07.24.15 at 8:45 am
Freedom first @ 113, I really do feel sorry for you.
……

Are you kidding me, FF is the most logical dude in this dog pen. Clearly he knows what he wants. Doesn’t lie, or sneak around, or needs to take mini vacations in short term rental properties to keep him saine.

He’s a real Man..

#134 Irent on 07.24.15 at 10:43 am

Who can we trust — when not regulated and thats how it should be, how can such articles be validated.

G&M – “Canada bouncing back, further rate cuts unlikely”

And just below that one they have another one

Commodity rout continues as loonoe falls””

#135 NoName on 07.24.15 at 10:53 am

#151 chapter 9 on 07.23.15 at 12:39 pm

smart meters and rolling blackouts…

Main idea behind a installing smart meters is not to have convenience to disconnect user hydro, main idea of is to charge more for same amount electricity consumed, by having different rates thru out a day.
Hydro charges more when demand is higher and less when demand dwindles down at night time. That is a best example of capitalism and price efficiency. , why do you think companies are pushing subscription based products more and more?

Rolling blackouts I would not worry much about it, what I would worry about is accuracy of the unit on my house and what steps are in place to keep “my” unit correctly calibrated.

side note
smart meter teardown
https://www.ifixit.com/Teardown/Elster+REX2+Smart+Meter+Teardown/5710
and this
http://www.ic.gc.ca/pics/lm/electric/ae/1320r3.pdf

#136 Mike on 07.24.15 at 11:07 am

Spent some time with a buddy who bought up in Fort McMurray last Sept against my strong urging not to. He said his $700k house has dropped $80k (so far). OUCH.

Meanwhile, I’ve been unemployed in Edmonton for over 3 months now, despite pumping out 100+ resumes, with moderate interest in my specialized white collared field, but meaningless until I actually start getting a paycheck again. At least I’m debt free with lots of savings, so I’m weathering the storm ok. I think things are going to get worse here in Alberta. The doo-doo is just starting to hit the fan, IMHO

#137 Mark on 07.24.15 at 11:18 am

“I am 32 and about half of my friends have gainful employment, while the other half like myself are still looking for something of substance. Those of us that did extended schooling like me are the worst off. Oh well.”

Amongst my circle of friends, there’s basically 2 categories. Those who got into the public sector early, and are doing reasonably well. And those who didn’t, and are generally either significantly underemployed or unemployed. Higher levels of schooling seem to be correlated with, just like in your case, poorer overall employment quality.

I don’t see how this is at all sustainable, leaving our best and brightest on underemployment. I really do think we’ve entered a sort of “Idiocracy”, and the so-called “Peter Principle” is in full force.

#138 JimH on 07.24.15 at 11:39 am

#105 Mark
“Except that there is no inflation. The economy is trending towards deflation, and price growth is anemic.”
===========
As is so often the case, Mark, your post is another pile of rubbish. You cite anemic price growth as evidence that the economy is trending towards deflation? That’s pure idiocy and is not at all based on any factual evidence.
Even with a year over drop of -2.6% in transportation costs and a drastic -9% drop in energy prices, the cost of ALL items has risen 1% Y/Y, with food up over 3%, household furnishings and operations up over 3%, recreation and education up over 2%, and Healthcare up over 1%.
Mark, you are in dire need of extended deep colonic hydro-therapy.
This is just another example of your obsessive desire to spread more mis-information.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/cpis01a-eng.htm

Mark snuck back in when I was out polishing my pipes. — Garth

#139 Calgary Rip Off on 07.24.15 at 11:41 am

I have been following this blog since its beginning(2007?)

The repeated argument “the sky is falling” is typical in news media. So called adults like this because they are tired and need something negative to get a fire under their rear. You see it all the time in the daily news.

For some time I believed what I read as Canadian “predictions” for housing. Who wouldnt want this in the major Canadian cities? Vancouver, Calgary, Toronto are all overpriced. The reality sets in that there are so many variables put into place by so many people in power that dont know what they are doing that there is a system of checks and balances so that the little guy loses out unless he decides on what his variables are.

In Calgary NW houses have gone up $100K since I got the mortgage in 2011. Did I want to get it? No. But renting and mortgage ownership are both a ripoff. Had I took the global advice here and rented I would be out what another $80K? Im not up for retirement for say another 40 years, assuming I am still alive, so should I continue to rent that long?

On baby boomers: Like anyone else, some, not all are total morons. I see it everyday at work(health care): Part timers whining about this that and the other when they are making big money and the majority of their housing is paid. If it were up to me I would fire them and put them on a boat and ship them somewhere where I dont have to hear their lame conversations about what they are going to do before they die. Just get it over with because they are wasting space for people that want to work and are grateful for the things they have, such as myself. It’s these people with their posturing and bs that slow down healthcare which impacts patient wait times. Get them out of the way. For those boomers that are not like this(the minority) I salute you for your wisdom and experience, you have spent your time well and not wasted it whining.

As for this blog I expect more of the same, designed to bring up tension for tired people who should focus on something else productive that is enjoyable because the reality is in modern society the individual has no control over most events other than the ability to think what they want and ignore irrelevant chatter.

#140 Chris on 07.24.15 at 11:46 am

@Mark 137

I have basically the same experience as you do with my circle of friends. The ones who are doing ok are those who joined the public sector, got into a health-related profession (in some sense that counts as public sector), or went into tech. I don’t know too many people who went into the trades, so I can’t speak for them. Most of the others (myself included), even ones with a decent amount of education in non-fluff fields, are not doing particularly well and facing either low compensation or unstable employment.

#141 Smoking Man on 07.24.15 at 11:48 am

#127 Bottoms_Up on 07.24.15 at 9:35 am
#117 Smoking Man on 07.24.15 at 7:38 am
———————————————-
One year of extra cold temperatures in the arctic and hence corresponding ice build-up does not trump a 125 year trend of global warming and gradual ice loss.
……..

Not even going to debate it with you. We got more ice at the poles now that we did 30 years ago.. So much for that theory. Polar Bears live.

What other garbage will be tossed out in the comunist manifesto who’s only goal is to steal my wallet.

#142 RR on 07.24.15 at 11:50 am

Garth, if you’re up for a coffee, I can discuss. Posting too much here would get me fired!

#143 Randy Randerson on 07.24.15 at 11:51 am

At least Freedom First is honest with his women, unlike most men who lie and cheat behind their women. His posts are often my reminder to stay true to myself.

#144 Londoner on 07.24.15 at 11:53 am

#137 Mark

Sounds like your friends are of a bunch of idiots. You think working in the public sector is being successful? Please give it a rest already!

#145 Jonah on 07.24.15 at 12:16 pm

With this notion or “perception” of yours, even the renters would not last 7 days without a paycheck. You know it Garth, if the housing goes down, the rent goes up. I am currently paying over 2000 in GTA for rent for 1500 square feet considered a deal. If i had not gotten this, I would have been paying $1800 for 800 square feet.

Lets be realistic, I know you are “short” on housing.

#146 Llewelyn on 07.24.15 at 12:29 pm

No correlation between the accumulation of obscene wealth by the few and abject poverty for the many. Now that really is viewing the world through rose coloured designer glasses.

Don’t get me wrong Garth I get capitalism and I certainly agree that it has generated substantial wealth for the general population in North America. My concern is that the inequitable distribution of benefits is not sustainable over the long run and consequences of continuing on this path are not getting the attention they should.

The belief that corporate profits can increase by more than 5.0% year after year while wage increases are held to 2.0% and that the availability of well paid jobs will continue is to suspend reality. We can join our governments and use debt to postpone the inevitable day reality is restored but pretending that debt incurred today will not reduce the quality of life of future generation is self-serving.

No matter how you slice it encouraging households to devote more than 50% of their disposable income to accommodation and to go into debt just because they can meets every definition of a confidence game. People do not buy stuff when they lose their confidence.

My last contribution to this blog offered an observation that once confidence is lost, for a wide variety of reasons, wealth can disappear in the blink of an eye. My reference to Bernie Madoff was meant to illustrate just how quick confidence, and your hard earned money, can disappear when reality is restored. It was not meant to be a comment on the integrity within our current economy.

#147 Debtfree on 07.24.15 at 12:55 pm

Harper is adopting NDP policy for his champaign . Do you think he has enough time to grow a beard ?

#148 Bob Santarossa on 07.24.15 at 1:01 pm

#139 Calgary Rip Off

Great candor and too funny!

I am a Boomer. Do not believe all of the Boomer stories at work about how well they are doing.

Here are the stats (Revenue Canada, Gross Income by Age Group for Canada):

55-64 yr old (4.3 million people in that age group):

-71% make $20,000 and over
-53% make $35,000 and over
-36% make $50,000 and over
-10% make $100,000 and over
-2% make $200,000 and over

Below is what those annoying Boomer’s at work are not sharing with you about what their retirement income and lifestyle will be.

65 yrs and older (5.3 million people in that age group):

-65% make $20,000 and over
-24% make $35,000 and over
-19% make $50,000 and over
-4% make $100,000 and over
-1% make $200,000 and over

As you can see, the upper income brackets are vacated by about 50%. The numbers also tell you that most these Boomer’s are relying on CPP and OAS as their main source of income – which is not much. The above is GROSS INCOME, not NET INCOME.

So “Calgary Rip Off”, rest assured that what you are hearing is not the truth unless the Revenue Canada Agency is lying. They are posturing and no more. Unfortunately for you, they will probably stay on as long as they can since their retirement cash situation looks dismal.

If it is true what most finance people (and Garth) are saying: that few Canadians have large investment portfolios and instead have most/almost all of their equity in their homes, then you will have the last laugh, especially in Calgary.

That home equity nest egg is being whittled away as I type. If the next few months to the end of the year get as bad as it was in the early 1980s, then 30% to 50% of their equity nest egg will disappear in short order.

Feel sorry for them instead.

#149 lee on 07.24.15 at 1:09 pm

#131 RR,

What exactly is the problem with people from around the world coming to school here, paying huge sums of money in tuition, and then deciding to stay and buy real estate? After 6-8 years of schooling here they probably are starting to feel at home, have friends, know which politicians to keep an eye on. Imagine someday you have children who want to become doctors and can only get into medical school in India, and then after studying there they decide to stay? Why should the border be an issue?

#150 Reddy on 07.24.15 at 1:21 pm

128&133, I’m not picking on anyone, when I read FF’s comment I genuinely felt sad for him. I was trying to be compassionate in my post, but typing here in my phone causes my entries to be considered terse.

#151 Reddy on 07.24.15 at 1:22 pm

Our cat opened our screen door last nite and decided to explore the backyard. I think maybe it’s time to trade her in for a dog ;)

#152 Blacksheep on 07.24.15 at 1:33 pm

Brian # 76,

“When the government runs a surplus, then the private sector must run a deficit unless exports are booming and make up the difference.”
———————————————————–
Ahh….an MMT / MMR man.

This was Cullen in his ‘post’ MMT phase, once he decided it was flawed. I still believe much of MMT / MMR has merit. Stefanie Kelton is great source if one is so inclined. Either way, your miles ahead of the clueless Cattle at getting a handle on how things actually function.

It seems Stefanie going mainstream.

http://www.forbes.com/sites/timworstall/2015/01/12/watch-out-mmts-about-as-bernie-sanders-hires-stephanie-kelton/

Good post.

#153 Different Perspective on 07.24.15 at 1:35 pm

http://www.cbc.ca/news/business/refugees-pay-more-income-tax-than-millionaire-investor-immigrants-1.2984982

#154 Mark on 07.24.15 at 1:35 pm

“As is so often the case, Mark, your post is another pile of rubbish. You cite anemic price growth as evidence that the economy is trending towards deflation? That’s pure idiocy and is not at all based on any factual evidence.”

Its not rubbish at all. Nothing I post is rubbish. So lay off the pipe please.

As for inflation, despite the CAD$ losing 20-30% in the past year, prices, according to CPI and StatsCan, haven’t moved much at all. And they won’t either. Global demand is just that poor. If the CAD$ had held steady, then we easily would be in significant explicit CPI deflation.

As for evidence, its in the StatsCan data. Its in the obviously dramatically weakening (from an already chronically weak) labour market. No reason to get mad at me, just open your eyes instead of engaging in the personal attacks or calling my posts ‘rubbish’.

#155 Rexx Rock on 07.24.15 at 1:37 pm

In Vancouver to have a roof over your head will cost you about $800-$1000 sqft.In Dallas and Houston you can get nice houses for $60-$80 sqft.People in Vancouver are really rich or losing their mind.How could your average worker in that city survive is beyond me?

#156 Blacksheep on 07.24.15 at 1:37 pm

Bottoms #127,

“One year of extra cold temperatures in the arctic and hence corresponding ice build-up does not trump a 125 year trend of global warming and gradual ice loss.”
——————————————
Hotter….colder….c’est la vie, it was occurring before the blight that is the human race evolved and will continue to occur, long after we’re extinct.

Funny fact: The “geocentric model” was also a common held belief by the brightest minds of the time, as late as the start of 17th century.

Ever time I hear this topic brought up, it reminds of religion and the naivety of man.

#157 Blacksheep on 07.24.15 at 1:49 pm

JimH # 138,

“As is so often the case, Mark, your post is another pile of rubbish. You cite anemic price growth as evidence that the economy is trending towards deflation? That’s pure idiocy and is not at all based on any factual evidence.”
————————————————-
Don’t get me wrong, I’m no fan of Marks, but…

http://monetaryrealism.com/?p=3423

Just sayin.

#158 Blacksheep on 07.24.15 at 2:08 pm

Add me to the list of Freedom First fans.

People don’t want hear what he is saying, cause it’s not PC. F-that, I have lived my life in a married version of much of what he writes.

It’s all about honesty. My wife of 30 years hears the truth about everything in our lives, the good and the bad, but we deal with it together.

It of course helps to be old school faithful and you never half to worry about some stupid drunken shit you did 18 years ago, coming back on you.

I’ve got one go round and I’m not going to waste time playing games.

#159 harden on 07.24.15 at 2:32 pm

Interesting article from BNN regarding U.S.

“They’ve got job growth. They’ve got real income growth. They’re confident again. They’ve reorganized their debts, and they have lower gas pump prices that are giving them $100 billion extra to spend. Put that all together. They should be spending. What are they doing? They’re saving at the moment. They’re as nervous as everybody else about the wiggles in the economy after six years of flat performance,” said Hall, who worked alongside Poloz at EDC for nine years.

http://bit.ly/1CVa0Bo

#160 S.Bby on 07.24.15 at 2:34 pm

#108 Kingartur
That pole sign to buy lots for $2million is just a ploy for some realtor to get listings. It is no different than the flyers I get all the time saying some unknown realtor has cash buyers (right…) wanting to buy houses in my area.

#161 Nosty, etc. on 07.24.15 at 2:38 pm

Hey SMan, Spectacle and others — Here’s another of the male p.c. girlie men ravaging society.

There seems to be a lot of these misguided people around. China, the EPA and a few others have decided to ban charcoal bbq’s, claiming it is in our best interests.

Actually, this planet is in fine shape, but plenty of its inhabitants are so far out in left field, they are not even in the same galaxy as the few sensible ones here.

BTW, the mass murders taking place — this pic gives a much clearer indication of what is going on. What causes people to go ballistic? Choose an answer. Cheers!

#162 Renter's Revenge! on 07.24.15 at 2:45 pm

RE: the U.S.

“What are they doing? They’re saving at the moment.”

God forbid a population invests in its future rather than spend its entire income on current consumption!

#163 Mike T. on 07.24.15 at 3:05 pm

FOMC meets next week

there is a ‘leaked’ graph indicating the rate hike may come in July

interesting

#164 Blacksheep on 07.24.15 at 3:12 pm

Garth, you should see my wives!

Puppies, that is…dogs, we’re talking about little dogs, right : )

#165 Lynn Chen on 07.24.15 at 3:19 pm

The TSX is down from almost 15,000 in June to today which is around 14,170. This is about 5.5% drop in less than 2 months.

Will we see under 14,000 next week. It is a real possibility.

This drop and Dow Jones down too is pushing government bond yields to much lower levels since June, 2.46% 30 year Canada versus 2.15% today.

#166 Smartalox on 07.24.15 at 3:21 pm

@King Artur, #108:

Curious as to why the sign specified $2M for the house, sight unseen?

It’s worth noting that the most recent revisions to the immigrant investor visa program requires that potential immigrant investors invest… $2M (surprise!) in a business venture in order to gain citizenship.

Buying and flipping properties is a business venture, right?

#167 Breaking: FED LEAK! on 07.24.15 at 3:40 pm

Fed will raise 1 time this year.

3 times in 2016.

3 times in 2017.

At that time will be 2%.

Canada will come back up to 1%…and then pause.

http://www.marketwatch.com/story/rare-glimpse-inside-fed-shows-staff-expects-funds-rate-to-reach-035-in-the-fourth-quarter-2015-07-24?dist=countdown

#168 Retired Boomer - WI on 07.24.15 at 3:47 pm

“What people believe to be true is more powerful than the truth,” quoting the Hon. Garth Turner in tonight’s blog.

Yeah, a lot of things seem to be falling that way, don’t they?

Canada has pricing mis-application in several localized housing markets, which will be self correcting as soon as the least able buyers wise up. That may be the 12th of never as the younger generation, egged on by boomer parents, are also financially illiterate.

See an earlier post showing that of the over 65 only 19% have a retirement have an income over $50,000, and worse only 24% of that population has an income over $35,000??

Well, over 65 includes those 75-85-95 as well and those old coots never had the rampant inflation or earnings of the 70’s to early 80’s so that group includes a fair number who never earned those inflated salaries.
Still ONLY 24% with what I will call ‘barely adequate’ living. Forget having a house payment, car note or credit card debt and be retired.

An opinion on teachers (American Perspective).

While NOT a teacher myself, I have known many who were teachers, some for 5-10 years as well as those who were until retirement.
First off, there is NO money here in teaching. A meager pension & healthcare at the end of a full career. Maybe an ending salary of 70-80 grand (not big).

Second the starting salaries SUCK!
You take BS from students, parents, and the administration. You are not allowed to paddle the ass of some smart mouth who desperately needs it, and face criminal issues if you did manhandle, or shove that 15 yr old who challenged you.

I have known some teachers who were wonderful additions to peoples lives, others who may have added no value, and a few in-between.

I salute anyone who tries, and succeeds in that profession, your tolerance level is greater than mine.
Good Job!

#169 Blacksheep on 07.24.15 at 3:54 pm

Correction: Wife’s, not wives, only a fool would complicate his life in that fashion.

#170 debtified on 07.24.15 at 4:08 pm

#123 Reddy, what do you have against Freedom First?

If he were a female, she’d be my kind of woman.

Unfortunately, some (note: SOME) women find it comforting to hear BS in order to chase some fantasy they have concocted in their heads, influenced heavily by their hearts. The truth and reality are just not that romantic most of the time. Reality eventually catches up to them and that is when they finally see the BS for what it is and their fantasy sadly crumbles in tears and disappointments.

For me, the best romance sits in the foundation of reality, rather than fantasy.

This reminds me of the gold nuts, to bring the topic back to relevance. While the world moves on, they cling to this romanticized idea that gold is money. So medieval.

Fantasy vs. Reality.

#171 harden on 07.24.15 at 4:21 pm

Go figure – re. (American) Millennials:

“This generation’s ‘dream’ may be to rent, not buy.”

http://www.forbes.com/sites/nealegodfrey/2015/07/12/buy-rent-the-millennial-struggle-for-the-american-dream/

#172 Smoking Man on 07.24.15 at 4:25 pm

#163 Mike T. on 07.24.15 at 3:05 pm
FOMC meets next week

there is a ‘leaked’ graph indicating the rate hike may come in July

interesting
……..

Bahahaha…..

#173 Bottoms_Up on 07.24.15 at 4:38 pm

#156 Blacksheep on 07.24.15 at 1:37 pm
———————————-
I think you are missing the point. There are natural temperature changes over time. And then there is human-induced temperature change. Never before in history have humans been attributed to be the biggest contributor to temperature changes on the planet. That AND the rate of change is something new.

#174 Sam Boldoni on 07.24.15 at 4:51 pm

Puppies in a basket….this is what I think of every time I read you puke up more HAM denial….childlike politics of a Liberal dream dead and buried. G…stop trying to defend ‘the village’….the foreign buyers are Chinese…they’re here…everyone see’s them….you can’t hide them by denying their existence. Even established Chinese complain about the HAM influence. Gosh Garth….talking to you is as productive as scolding a retarded kid.

Did I mention I prefer dogs to people? — Garth

#175 joe on 07.24.15 at 5:18 pm

that’s it. this blog is going to the dogs :)

#176 Shawn on 07.24.15 at 5:23 pm

Canada’s Soft Labour Market?

Mark said:

Its in the obviously dramatically weakening (from an already chronically weak) labour market.

***************************************
Well if the labour market is weak (which I am not sure about) then yes, it is chronic. The unemployment rate among those of labour force age who are actually working or actively looking for a job is 6.8%. (You are not unemployed if you are not working but are not bothering to look for a job, you are just probably lazy)

I have been paying attention to that number since I was in high school circa 1975.

I don’t have the figures but I believe it may have been a somewhat lower than 6.8% in 1975. By about 1980 it was in double digits as I recall and stayed there a long time.

I would guess the average has been about 7 to 8% since 1980. In my experience 6.8% is on the low end of the range for Canada.

So if anyone is holding their breath for 5%, forget it.

And yes people can natter on about the “real” figure and all that. But does anyone have actual Stats Canada data that suggests that 6.8% is weak by the standard’s of the last forty years?

#177 cramar on 07.24.15 at 5:59 pm

#139 & #148

This retired boomer would be offended if I did not find your postings interesting. The majority of my Boomer friends are well off. I don’t know who these statistical ones are that are eating dog food and cannot retire at 65 because they cannot afford to live without a pay check!

Whining seems to be a characteristic of Millennials not Boomers.

Yup, we rely on most of CPP & OAS to pay living expenses. What is left, plus private pensions, and investment income is again invested. That is possible since our living expenses are low and we have no debt. That is the way of most retired Boomers I know.

#178 cramar on 07.24.15 at 6:02 pm

Did I mention I prefer dogs to people? — Garth

Yeah, sometimes I feel the same way!